UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13A-16 OR 15-D 16 OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE PERIOD ENDED: DECEMBER 31, 2000
COMMISSION FILE NUMBER: 0-30314
DEALCHECK.COM INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
ONTARIO, CANADA
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(JURISDICTION OF INCORPORATION)
65 QUEEN STREET WEST, SUITE 1905, ONTARIO, CANADA M5H 2M5
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(416) 860 0211
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(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
INDICATE BY CHECK MARK WHETHER THE REGISTRANT FILES OR WILL FILE ANNUAL REPORT
UNDER COVER FORM 20F OR 40F:
FORM 20F X FORM 40F
--- ---
INDICATE BY CHECK MARK WHETHER THE REGISTRANT BY FURNISHING THE INFORMATION
CONTAINED IN THE FORM IS ALSO THEREBY FURNISHING THE INFORMATION TO COMMISSION
TO RULE 12G3-2(H) UNDER THE SECURITIES ACT OF 1934:
YES NO X
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THE NUMBER OF SHARES OUTSTANDING OF THE REGISTRANT'S COMMON STOCK AS OF DECEMBER
31, 2000 IS 4,517,616
1
DEALCHECK.COM INC.
DEALCHECK.COM INC. HAS ELECTED TO PROVIDE QUARTERLY FINANCIAL AND OTHER
INFORMATION GENERALLY COMPARABLE TO THAT REQUIRED TO BE PROVIDED BY UNITED
STATES ISSUERS ON FORM 10-Q. THIS REPORT RELATES TO THE PERIOD OF NINE MONTHS
ENDED DECEMBER 31, 2000.
INDEX
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PAGE NO.
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PART 1 - FINANCIAL INFORMATION
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ITEM 1. FINANCIAL STATEMENTS 3-7
CONSOLIDATED BALANCE SHEETS 3
CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT 4
CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL 5
POSITION
NOTES TO FINANCIAL STATEMENTS 6-7
ITEM 2 MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL 8-12
CONDITION AND RESULTS OF OPERATIONS
PART 11- OTHER INFORMATION
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ITEM 1 LEGAL PROCEEDINGS 12
ITEM 2 CHANGES IN SECURITIES 13
ITEM 3 DEFAULT UPON SENIOR SECURITIES 13
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY 13
ITEM 5 OTHER INFORMATION 13
SIGNATURE 13
2
DEALCHECK.COM INC.
CONSOLIDATED BALANCE SHEET
(CANADIAN DOLLARS)
DECEMBER 31, 2000 AND 1999
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DECEMBER March 31, December
31, 2000 2000 31, 1999
(UNAUDITED) (AUDITED) (UNAUDITED)
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ASSETS
CURRENT
Cash 23,822 425,968 2,502,484
Short-term Investments 308,296 697,274 287,733
Advances to directors, non-interest bearing 97,358
Amounts receivable and prepaid expenses 509,217 580,198 75,189
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938,693 1,703,440 2,865,406
LONG-TERM INVESTMENTS 553,162 782,687
LONG-TERM DEPOSIT 12,380
WEB SITES 32,055 10,000
CAPITAL ASSETS 46,475 46,805 47,908
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1,582,765 2,542,932 2,913,314
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LIABILITIES
CURRENT
Accounts payable and accrued liabilities 49,662 40,549 8,991
Other Advances, non-interest bearing 145,418 179,763 297,540
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195,080 220,312 306,531
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SHAREHOLDERS' EQUITY
CAPITAL STOCK 19,782,724 19,660,724 18,924,350
DEFICIT (18,395,039) (17,338,104) (16,317,567)
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1,387,685 2,322,620 2,606,783
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1,582,765 2,542,932 2,913,314
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3
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DEALCHECK.COM INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
(CANADIAN DOLLARS)
FOR THE NINE MONTHS ENDED DECEMBER 31, 2000 AND 1999
(UNAUDITED)
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THREE
MONTHS TO NINE MONTHS Three months Nine months
DECEMBER TO DECEMBER to December to December
31, 2000 31, 2000 31, 1999 31, 1999
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INCOME
LICENCE FEE $ 128,395 $ 128,395
CONSULTING FEE 90,000 90,000 5,000 5,000
INTEREST 1,233 9,871 1,193 1,193
NET EXCHANGE GAIN (4,915) 50,666
OTHER INCOME 110 14,987
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$ 214,823 $ 293,919 $ 6,193 $ 6,193
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EXPENSES
TRAVEL, PROMOTION AND CONSULTING $ 89,712 $ 402,065 $ 93,358 $ 228,157
NET LOSS ON INVESTMENTS 592,527 750,601
PROFESSIONAL FEES 12,340 52,233 14,553 50,951
PROJECTS DEVELOPMENT COSTS 3,111 15,111 29,434 29,434
BANK CHARGES AND INTEREST 1,487 5,722
RENT 4,392 34,649 (3,429) 12,023
TELEPHONE, INTERNET AND COURIER 2,780 8,686 (4,898) 9,546
TRANSFER AGENTS FEES 14,930 19,665 3,048 6,170
SHAREHOLDERS INFORMATION 2,464 19,780 5,033 11,209
AMORTIZATION 6,060 18,180 5,248 15,618
OFFICE AND GENERAL 6,533 24,162 5,079 13,005
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$ 736,336 $ 1,350,854 $ 147,426 $ 376,113
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NET LOSS FOR PERIOD (521,513) (1,056,935) (141,233) (369,920)
DEFICIT AT BEGINNING OF PERIOD (17,873,526) (17,338,104) (16,176,334) (15,947,647)
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DEFICIT AT END OF PERIOD (18,395,039) (18,395,039) (16,317,567) (16,317,567)
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NET LOSS PER SHARE $ 0.15 $ 0.25 $ 0.05 $ 0.16
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APPROVED ON BEHALF OF THE BOARD
TERENCE ROBINSON DIRECTOR KAM SHAH DIRECTOR
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4
DEALCHECK.COM INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(CANADIAN DOLLARS)
FOR THE NINE MONTHS ENDED DECEMBER 31, 2000 AND 1999
(UNAUDITED)
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THREE NINE Three
MONTHS TO MONTHS TO months to Nine months
DECEMBER DECEMBER December to December
31, 2000 31, 2000 30, 1999 31, 1999
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OPERATING ACTIVITIES
Net loss (521,513) (1,056,935) (141,232) (369,920)
Amortization 6,060 18,180 5,248 15,618
Write-off of web site development costs (12,000) 9,435 9,435
Net loss on investments 592,527 750,601
Amounts receivable and prepaid expenses 46,169 (51,019) (22,198) (12,577)
Accounts payable and accrued liabilities (37,771) (9,113) (27,559) (58,432)
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73,472 (348,286) (176,306) (415,876)
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INVESTING ACTIVITIES
Purchase of capital assets (17,850) (2,530) (5,150)
Refund of subscription advance 489,173
Investments (238,956) (359,045) (207,896) (222,819)
Web site development costs (7,055) (22,055)
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(246,011) 90,223 (210,426) (227,969)
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FINANCING ACTIVITIES
Shares issued under private placement 2,815,287 2,815,287
Notes payable (23,250) (23,250)
Net advances 96,079 (34,345) 77,026 289,924
Net deposit (12,380) (12,380)
Net advances to directors (12,855) (97,358)
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70,844 (144,083) 2,869,063 3,081,961
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INCREASE (DECREASE) IN CASH DURING PERIOD (101,695) (402,146) 2,482,331 2,438,116
CASH AT BEGINNING OF PERIOD 125,517 425,968 20,153 64,368
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CASH AT END OF PERIOD 23,822 23,822 2,502,484 2,502,484
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SUPPLEMENTAL DISCLOSURE
NON-CASH FINANCING ACTIVITY
CONVERSION OF DEBTS TO EQUITY $ 122,000 $ 122,000
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5
DEALCHECK.COM INC.
NOTE TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED DECEMBER 31, 2000 AND 1999
(UNAUDITED)
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1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in Canada
for interim information and with the instructions to Form 10Q and Rule 10-1 of
the United States Securities Act of 1933 or Regulation S-X. Accordingly, they do
not include all 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 accruals and certain
adjustments to reserves and allowances considered necessary for a fair
presentation have been included. Operating results for the nine months ended
December 31, 2000 are not necessarily indicative of the results that may be
expected for the year ending March 31, 2001.
2. DIFFERENCE BETWEEN ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN CANADA AND
THOSE IN THE UNITED STATES
WEB SITE COSTS
The costs of developing the commercial web sites are allowed to be deferred
under the Canadian Generally Accepted Accounting Principles. However, these
costs should be expensed under US GAAP. Accordingly, under the US GAAP, net
loss for period would be $1,078,990 (1999: $369,920). Total assets would be
$1,550,710 (1999: $2,913,314) and deficit would be $18,427,094 (1999: $
16,317,567).
INVESTMENTS
Investments in marketable equity securities that are classified as short-term
investments under Canadian GAAP, are grouped into trading and available-for-sale
categories and accounted for at fair value under the US GAAP. Unrealized
holding gains or losses on trading securities are included in the income.
Unrealized holding gains and losses on available-for-sale securities are
included in shareholders' equity.
Investments in equity securities that are classified as long term investments
under the Canadian GAAP, are accounted for at fair value under the US GAAP.
Unrealized holding gains and losses are included in shareholders' equity.
No significant adjustment would be required in the net loss for period, total
assets and deficit under the US GAAP.
RECENT ACCOUNTING DEVELOPMENT
In June 1998, the Financial Accounting Standard Board ("FASB") issued Statement
of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities". In June 1999, the FASB issued SFAS No.
137, "Accounting for Derivative Instruments and Hedging Activities - Deferral of
the effective date of FASB Statement No. 133", which deferred the required date
of adoption of SFAS No. 133 for one year, to fiscal years beginning after June
15, 2000. This Standard is applicable for the Corporation's 2001 fiscal year.
The adoption of SFAS No. 137 had no material impact on its financial position,
results of operations or cash flows for the nine months ended December 31, 2000.
6
DEALCHECK.COM INC.
NOTE TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
FOR THE NINE MONTHS ENDED DECEMBER 31, 2000 AND 1999
(UNAUDITED)
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3. RELATED PARTY TRANSACTIONS
The following is a summary of related party transactions and balances:
(a) Consulting fees paid to directors during the period were $ 178,000 (1999
- $39,824)
(b) Expenses reimbursed to directors during the period were $50,976 (1999 -
$23,162)
(c) Transactions with associated companies
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2000 1999
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Consulting fee charged during the period $ 90,000 $ -
Licence fee charged during the period 128,395 -
Expenses recovered at cost 79,948 23,144
Funds advanced during the period 349,440 (3,872)
Interest charged during the period 4,137 -
Balance due from 409,341 36,331
Expenses relating to the shared premises and consultants were recharged to the
affiliated entities at cost.
Funds advanced are repayable on demand and carry an interest of 5% p.a. (1999:
Nil)
Balances as at year end are included in "Amounts Receivable and prepaid
expenses"
4. COMPARATIVE FIGURES
Certain of the comparative figures have been reclassified to comply with the
current period's presentation.
7
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
The following discussion and analysis should be read in conjunction with the
consolidated (unaudited) financial statements of the Company, which have been
prepared in accordance with generally accepted accounting principles ("GAAP") in
Canada. A summary of material adjustments to conform to U.S. GAAP is set out in
Note 2 to the consolidated (unaudited) financial statements.
All amounts are in Canadian Dollars unless otherwise stated.
RESULTS OF OPERATIONS
3 months to Nine months ended December 31
December 31, 2000 2000 1999
---------------------In 000' $ -----------------
Income 215 294 6
Expenses 737 1,351 376
______________________________________________________
Net Loss for period 522 1,057 370
Deficit at end of period 18,395 16,318
INCOME
Income for the period comprise the following components:
3 months to Nine months ended December 31
December 31, 2000 2000 1999
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License fee 128,395 128,395 -
Consulting 90,000 90,000 5,000
Interest 1,233 9,871 1,193
Net exchange gain (4,915) 50,666 -
Other income 110 14,987 -
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214,823 293,919 6,193
==========================================================
The Company completed its IRCheck project during the quarter ended December 31,
2000. This project comprised a comprehensive web site providing information
about the Investors relations firms and can be accessed at www.ircheck.com. As
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part of this project, the company developed a proprietary database of brokerage
firms and Investors relations firms across North America. The company
successfully negotiated licensing of this database to an associate IR firm in
Canada. Under the terms of the agreement, the company receives an annual license
fee and a percentage of the gross revenue. The license fee earned during the
quarter ended December 31, 2000 represent the amount earned under this
agreement.
Consulting fee is charged to an associate company for management services
rendered at the rate of $10,000 per month. Fee earned during the quarter ended
December 31, 2000 represent the fee charged for the nine months ended on that
date as a result of the finalization of negotiations and signing of a formal
contract in December 31, 2000.
8
Exchange gain mainly resulted from translation of monetary assets and
liabilities in U.S. dollar into Canadian Dollar at the rate at December 31,
2000. Decline in the value of Canadian Dollar in comparison to the U.S. Dollar
from $1.4494 CDN$ to $1 US at March 31, 2000 to $1.4995 CDN at September 30,
2000 resulted in the net exchange gain on conversion. An improvement in the rate
from 1.5070 at September 30, 2000 to 1.4945 at December 31, 2000 resulted in
reversal of some of the exchange gains.
Other income relates to an arrangement fee received for a small term loan
provided. The loan was recovered with interest during the quarter ended December
31, 2000.
EXPENSES
The major components of expenses are as follows:
TRAVEL, PROMOTION AND CONSULTING -
3 months to Nine months ended December 31
December 31,2000 2000 1999
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Travel, meals and entertainment 3,929 45,560 13,918
Consulting 85,783 356,363 214,239
Promotion - 142 -
_______________________________________________
89,712 402,065 228,157
===============================================
% of operating expenses 62% 67% 61%
(net of investment losses)
During the nine months ended December 31, 2000, the management continued to
focus its attention on seeking long-term business opportunities, while at the
same time monitoring investments made during the fiscal year 2000. These efforts
involved significant traveling. During the previous fiscal period management was
still formulating the new business strategy and as a result had no major travel
costs. Traveling however reduced during the third quarter, as the management
began consolidating and reviewing the company's investments rather than seeking
new ones.
Consulting costs include a consulting fee of $89,262 (1999: $88,764) charged by
a shareholder under a Consulting agreement, which expired on September 30, 2000
and was not renewed. The services provided included arranging non-interest
bearing working capital funds, introduction to business opportunities and public
relations. As a new initiative, The Company signed an Investor relation
agreement with a Canadian private company for a one-year term at a fee of
US$10,000 per month plus expenses effective April 1, 2000. A total fee of
$134,326 for the nine months ended December 31, 2000 was included in the
Consulting fee. The investor relations firm handles the financial communications
for the Company. Other consulting fees included $129,500 (1999: $6,750) charged
by the directors for their services as executives of the Company and the balance
related to fees paid for general IT, management and corporate services.
NET LOSS ON INVESTMENTS
The components of the loss are as follows:
3 months to Nine months ended December 31
December 31,2000 2000 1999
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Unrealized losses 193,726 111,138
Realized 398,801 639,462
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592,527 750,601
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9
During the fiscal 2000 and early months of the fiscal 2001, the company's
investment strategy was targeted at the new and emerging technology companies at
a start up stage in accordance with the stated business objectives.
Unfortunately, the technology sector was severely hit by the cash crisis during
2000. Many of the start up businesses were unable to carry out their projects
owing to such market conditions and had to either close down or scale down their
operations. The company began liquidating most of its investments with a view to
recovering some of it rather than wait and lose all of it as more of more of
these start up investees began to go bankrupt.
During the last quarter, the company decided to provide for a permanent decline
of $374,875 in one of its major investments.
PROFESSIONAL FEES
Professional fees in the first three quarters of fiscal 2001 were $52,233
compared to $50,951 for the same period of fiscal 2000. The fee for both the
periods mainly consisted of fees paid to a director for providing financial,
accounting and corporate services
PROJECTS DEVELOPMENT COSTS
Total costs for the nine months ended December 31, 2000 were $15,111, which were
mostly incurred in the first quarter of fiscal 2001. There were no such costs in
the prior period. The costs related to the design and development of the
Company's web site.
OTHER OPERATING COSTS
Other operating costs in the first three quarters of fiscal 2001 were $ 106,942
(1999: 51,953), which included rent of $34,649 (1999: $12,023). The company
acquired additional premises effective February 1, 2000, increasing the space
from 1,200 sq.ft. in 1999 to about 9,000 sq. ft. Other major expense was that
of transfer agents and filing fees of $39,445 (1999: 15,716) These costs related
mainly to the legal and other costs incurred in connection with the Registration
Statement of the Company with SEC and also with Ontario Securities Commission.
No SEC registration costs were incurred in the previous period.
LIQUIDITY AND CAPITAL REQUIREMENTS
CASH AND WORKING CAPITAL
Cash on hand at December 31, 2000 was $23,822 compared to $2.5 million at
December 31, 1999. Net working capital at December 31, 2000 was approx. $0.7
million compared to a $2.6 million at December 31, 1999.
Significant improvement in the liquidity of the Company at December 31, 1999
was the result of a successful private placement of approx. $3.3 million in
December 1999.
Overall liquidity declined considerably at December 31, 2000 due mainly to
investment losses resulting from adverse market conditions as explained above.
The net cash spent on operations during the nine months ended December 31, 2000
was $348,286, about $286,000 of which was incurred in the first three months,
compared to $415,876 during the nine months ended December 31, 1999. Reduction
in cash operating expenses in 2000 was the direct result of the adverse market
conditions for new investment opportunities
INVESTMENTS
The investment profile at December 31, 2000 was as follows:
December 31, 2000 March 31, 2000
--------------------------------------------------
Short term investments 308,296 697,274
Receivables 509,217 489,173
Internet projects 32,055 10,000
Long term investments 553,162 782,687
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$ 402,730 $1,979,134
========== ==========
10
SHORT TERM INVESTMENTS
Short-term investments at December 31, 2000 mainly comprised marketable
securities of $158,986 and an investment of $217,053 in World Vacation Club.com
Inc. (WVC)
Short term marketable securities at March 31, 2000 were $371,918. The reduction
in marketable securities was the result of the company's effort to reduce its
exposure in start up technology businesses due to adverse market conditions.
The investment in WVC is carried from the fiscal 2000. As explained in detail in
the M D & A accompanying the audited financial statements for the fiscal 2000,
the Company is actively seeking buyers to dispose off this investment. The WVC
has recently appointed a new president and is seeking additional equity funds.
The management is actively pursuing opportunities to find buyers or possibly to
sell back to WVC Recently, WVC approached the company with a request to hold the
shares for resale to WVC at cost by March 15, 2001. The company will evaluate
this investment at the fiscal 2001-year end. At the end of the third quarter,
the investment was stated at cost.
The Company invested in Developersnetwork.com (DN) during the fiscal 2000 by way
of convertible debentures. As at March 31, 2000, total amount invested was
$36,741. In May 2000, the Company received the full amount back with interest
and also received, by way of a compensation for early settlement, an option to
purchase 50,000 common shares of DN at $1 per share exercisable within two
years.
RECEIVABLE
As at March 31, 2000, the Company held a subscription advance of $ 489,173 for
the acquisition of common shares of Idealab.com from a private investor. The
Company later decided against this acquisition and recovered the amount in full
in May 2000.
receivable during the nine months ended December 31, 2000 included the
following two major items:
Balance
At December 31,
2000
Current Capital Corp. 210,457
First Empire Entertainment.com Inc. 162,391
Receivable from Current Capital Corp. relate to the licensing and management
fee charged during the third quarter of fiscal 2001.
First Empire Entertainment.com Inc. (First Empire) is a Canadian public company
whose main business is entertainment. The Company's first project is the
development and production of "The Count of Monte Cristo", a live theatrical
musical production, adapted from the novel of the same name. First Empire
acquired the rights to the adaptation from a Toronto based writer and lyricist.
First Empire initiated two previews, one in Toronto and the other in New York.
It will be seeking additional funds to commence a workshop leading to full-blown
road shows. Dealcheck.com Inc. will likely convert its advances into shares of
First Empire.
INTERNET PROJECTS
The current investment is in the design and development of IRCheck.com, a web
site which will provide a comprehensive data base of investors relation firms to
facilitate an informed decision for the prospective public companies desiring to
outsource its investors relation and media relation work to an independent firm.
The Company spent $10,000 up to March 31, 2000 in getting the web site design
11
completed by an independent design firm. It incurred further $22,000 in the
development of the Web site and in hiring consultants to collate and develop
contents and have to date gathered information on about 500 IR firms in North
America. The web site development work was completed. The Site was launched in
November 2000 and can be viewed at www.ircheck.com. In December 2000, the
---------------
company negotiated licensing of its IRCheck database to an associate IR company
for an up front fee of $75,000 plus usage fee of 10% of the gross revenue, which
for the nine months to December 31, 2000 was about $53,000.
The Company now plans to develop a comprehensive marketing plan to attract
listings of the IR firms on this web site and also to drive higher traffic.
LONG TERM INVESTMENTS
DATALOOM INC.
The major investment is in a private company -Dataloom Inc, where the Company's
investment stood at $749,750 ($500,000 US) as at December 31, 2000.
The Company's investment comprises 500,000 Series B preferred stock convertible
at the Company's option at any time, into equal number of Common shares of
Dataloom Inc. The company's holding, if converted now would represent
approximately 5% equity interest in Dataloom Inc.
Dataloom Inc. was formed as a corporation in August 1999 in the State of
Washington, US
Dataloom's application services framework (xLoom) utilizes XML (Extensible
Markup Language) and a proprietary Application Services Directory that enables
web-based application interfaces to be delivered to any wired or wireless device
in real time. xLoom enables a new generation of fast, flexible productivity
tools.
During December 2000, the company was informed of severe cash problems at
Dataloom Inc and management changes. The then CEO agreed to resign and appointed
an expanded board of directors. The new board then appointed an interim CEO
The Company's CFO, as a result visited Dataloom operations in January 2001 and
met with the new management to assess the situation first hand. It appeared that
the previous CEO had ambitious plan of developing three lines of products and
services, which required considerable sum of money and time to be commercially
successful. Owing to the current adverse market conditions for the technology
sector, the previous CEO was unable to raise further cash and agreed to the
management changes. The new interim CEO identified one product, which could be
ready for the commercial application within six months and also pursued its
licensing opportunity with two Japanese buyers. The new management was able to
raise bridge financing to continue the revised development plan.
The company was informed that Dataloom was able to sign an agreement with one of
the Japanese customers and that a final technical due diligence was being done
by the second customer.
Dataloom has now proposed a new corporate restructuring and a marketing plan and
is currently approaching investors for funds required to implement the new plan.
The company has decided not to participate in further financing owing to its
already significant exposure in Dataloom but would work with the new management
to ensure and minimise any permanent impairment in the value of its investment.
The management has however taken a conservative approach to the above situation
and provided 50% - $374,875 ($250,000US) towards the permanent impairment in
value of this investment as at December 31, 2000. The investment net of the
impairment provision constituted about 24% of the total assets of the company at
December 31, 2000.
A more detailed review of this investment will be carried out at the fiscal 2001
year end - March 31, 2001.
12
BIOCHEX INC.
The company invested about $113,000, 7% of its assets at December 31, 2000 in a
Ontario private company, Biochex Inc. Biochex Inc. was incorporated in January
2000 and is engaged in design, development and marketing of Internet appliances
using the wireless Bluetooth and similar technologies.
CAPITAL EXPENDITURE
The Company spent $17,850 on capital assets during the six months ended
September 30, 2000. No further capital expenditure was made during the quarter
ended December 31, 2000. The company spent $5,150 during the nine months ended
December 31, 1999 on capital items. The increased capital expenditure was for
computer equipments and leasehold improvements and furniture for the new
premises.
FUTURE CAPITAL REQUIREMENT
During the third quarter ended December 31, 2000, the management focused its
attention to reviewing its exposure in the start up technology companies in the
light of the adverse market condition for this industry. It tried to reduce its
exposure as much as possible. However these efforts resulted in significant
losses and affected the company's liquidity. However, the management believes
that these efforts saved the company from more losses.
The management believes that the current investments are adequately provided for
and reflect the realizable values.
The management estimates that its working capital requirements to remain at
around $250,000 for the next six months and plans to meet this requirement from
the cash flow from the licensing fee and consulting fee and from further
liquidation of the existing investments when the time is appropriate.
While the warrants attached to the units issued under the fiscal 2000 private
placement have mostly expired in January, The directors were able to obtain
shareholders approval at the Annual and Special meeting of the shareholders held
on November 13, 2000 to extend the expiry date and reduce the exercise price of
the warrants. The management is discussing with the private placement investees
as to what kind of changes would attract further funding from them.
Management will also seek funding when required from Snapper Inc., which in the
past supported the management's efforts with convertible loans.
In the event warrants are not exercised or further capital is not raised, the
Company will not be able to pursue any new business opportunities or marketing
of its IRCheck services.
FORWARD LOOKING STATEMENTS.
The foregoing Management's Discussion and Analysis contains "forward looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Act of 1934, as amended, and as
contemplated under the Private Securities Litigation Reform Act of 1995,
including statements regarding, among other items, the Company's business
strategies, continued growth in the Company's markets, projections, and
anticipated trends in the Company's business and the industry in which it
operates. The words "believe," "expect," "anticipate," "intends," "forecast,"
"project," and similar expressions identify forward-looking statements. These
forward-looking statements are based largely on the Company's expectations and
are subject to a number of risks and uncertainties, certain of which are beyond
the Company's control. The Company cautions that these statements are further
qualified by important factors that could cause actual results to differ
materially from those in the forward looking statements, including, among
others, the following: reduced or lack of increase in demand for the Company's
products, competitive pricing pressures, changes in the market price of
ingredients used in the Company's products and the level of expenses incurred in
the Company's operations. In light of these risks and uncertainties, there can
be no assurance that the forward-looking information contained herein will in
fact transpire or prove to be accurate. The Company disclaims any intent or
obligation to update "forward looking statements".
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PART 11 OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS
There are no material legal proceedings in progress or to the knowledge of the
Company, pending or threatened to which the Company is a party or to which any
of its properties is subject.
ITEM 2 CHANGES IN SECURITIES
None
ITEM 3 DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
None - other than the matters included in the Notice of annual and special
meeting of the shareholders. The full text of this Notice may be found in Form
6-K filed on the Edger on November 1, 2000.
ITEM 5 OTHER INFORMATION
None
SIGNATURES
- ----------
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) 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
---------------------
TERENCE ROBINSON
-----------------
CHAIRMAN & CEO
DEALCHECK.COM INC.
FEBRUARY 26, 2001
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