FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13A-16 OF
THE SECURITIES AND EXCHANGE ACT OF 1934
FOR THE MONTH OF MARCH, 2002
-------------------
INSIDE HOLDINGS INC.
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(Translation of registrant's name into English)
Suite 1260, 609 Granville Street, Vancouver, B.C., Canada
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(Address of principal executive offices)
[Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.]
Form 20-F X Form 40-F
----- -----
[Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.]
Yes No X
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If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b):
THE COMPANY, A FOREIGN PRIVATE ISSUER DOMICILED IN CANADA, IS REQUIRED, UNDER
THE BRITISH COLUMBIA SECURITIES ACT AND RULES TO FILE WITH THE BRITISH COLUMBIA
SECURITIES COMMISSION, FOR PUBLIC VIEWING, QUARTERLY AND ANNUAL FINANCIAL
STATEMENTS, AND OTHER INFORMATION, WHICH THE REGISTRANT DEEMS OF MATERIAL
IMPORTANCE TO STOCKHOLDERS.
ATTACHED IS THE COMPANY'S QUARTERLY REPORT FOR THE THREE AND NINE MONTHS ENDED
JANUARY 31, 2002.
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INSIDE HOLDINGS INC.
UNAUDITED FINANCIAL STATEMENTS
(EXPRESSED IN CANADIAN DOLLARS)
(A DEVELOPMENT STAGE COMPANY)
JANUARY 31, 2002
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INSIDE HOLDINGS INC.
BALANCE SHEETS
(Unaudited)
(Expressed in Canadian Dollars)
(A Development Stage Company)
====================================================================================
January 31, April 30,
2002 2001
- ------------------------------------------------------------------------------------
ASSETS
CURRENT
Cash $ 20 $ 6,940
Receivable 463 681
----------- -----------
483 7,621
INTELLECTUAL PROPERTY - 20,000
----------- -----------
$ 483 $ 27,621
====================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT
Accounts payable and accrued liabilities $ 2,395 $ 13,894
Due to related parties - 64,075
----------- -----------
2,395 77,969
----------- -----------
SHAREHOLDERS' EQUITY
Capital stock
Authorized
100,000,000 common shares without par value
Issued
6,735,300 common shares (April 30, 2001 - 4,637,600) 3,473,579 3,368,694
Deficit accumulated during the development stage (149,063) (92,614)
Deficit (3,326,428) (3,326,428)
----------- -----------
(1,912) (50,348)
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$ 483 $ 27,621
====================================================================================
The accompanying notes are an integral part of these financial statements.
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INSIDE HOLDINGS INC.
STATEMENTS OF OPERATIONS AND DEFICIT
(Unaudited)
(Expressed in Canadian Dollars)
(A Development Stage Company)
============================================================================================================
Cumulative
Amounts
From the
Start of
Development
Stage on
May 1, Three Month Period Ended Nine Month Period Ended
2000 to January 31 January 31
January 31, -------------------------------------------------------------
2002 2002 2001 2002 2001
- ------------------------------------------------------------------------------------------------------------
EXPENSES
Amortization $ 40,000 $ 10,000 $ 5,000 $ 20,000 $ 15,000
Consulting 7,500 - - - 7,500
Listing and transfer agent fees 20,251 1,582 2,446 6,957 10,170
Management fees 47,500 2,500 7,500 17,500 22,500
Office and general 7,061 22 16 576 6,463
Professional fees 26,751 4,692 2,317 11,416 13,610
------------- ------------- -------------- ------------ --------------
LOSS FOR THE PERIOD $ (149,063) $ (18,796) $ (17,279) $ (56,449) $ (75,243)
============================================================================================================
BASIC AND DILUTED LOSS PER SHARE $ (0.004) $ (0.003) $ (0.012) $ (0.016)
============================================================================================================
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 4,687,600 4,637,600 4,637,600 4,637,600
============================================================================================================
The accompanying notes are an integral part of these financial statements.
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INSIDE HOLDINGS INC.
STATEMENT OF CASH FLOWS
(Unaudited)
(Expressed in Canadian Dollars)
(A Development Stage Company)
============================================================================================================
Cumulative
Amounts
From the
Start of
Development
Stage on
May 1, Three Month Period Ended Nine Month Period Ended
2000 to January 31 January 31
January 31,---------------------------------------------------------------
2002 2002 2001 2002 2001
- -------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM
OPERATING ACTIVITIES
Loss for the period $ (149,063) $ (18,796) $ (17,279) $ (56,449) $ (75,243)
Item not involving cash:
Amortization 40,000 10,000 5,000 20,000 15,000
Change in non-cash
working capital items:
(Increase) decrease in receivable (463) 374 2,219 218 (1,039)
Increase (decrease)
in accounts payable (16,538) (17,800) 799 (11,499) (3,059)
Increase (decrease) in due to
related parties (44,100) (80,125) 8,025 (64,075) (88,563)
------------- ------------- -------------- ------------ --------------
Cash used in operating activities (170,164) (106,347) (1,236) (111,805) (152,904)
------------- ------------- -------------- ------------ --------------
CASH FLOWS FROM
FINANCING ACTIVITIES
Issuance of capital stock 169,885 104,885 - 104,885 205,513
------------- ------------- -------------- ------------ --------------
Cash provided by financing activities 169,885 104,885 - 104,885 205,513
------------- ------------- -------------- ------------ --------------
CASH FLOWS FROM
INVESTING ACTIVITIES
Purchase of intellectual property - - - - (40,000)
------------- ------------- -------------- ------------ --------------
Cash used in investing activities - - - - (40,000)
------------- ------------- -------------- ------------ --------------
INCREASE (DECREASE) IN CASH
FOR THE PERIOD (279) (1,462) (1,236) (6,920) 12,609
CASH, BEGINNING OF PERIOD 299 1,482 14,144 6,940 299
------------- ------------- -------------- ------------ --------------
CASH, END OF PERIOD $ 20 $ 20 $ 12,908 $ 20 $ 12,908
===================================================================================================================
CASH PAID FOR INCOME TAXES $ - $ - $ - $ - $ -
===================================================================================================================
CASH PAID FOR INTEREST $ - $ - $ - $ - $ -
===================================================================================================================
The accompanying notes are an integral part of these financial statements.
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INSIDE HOLDINGS INC.
STATEMENT OF SHAREHOLDERS' EQUITY
(Unaudited)
(Expressed in Canadian Dollars)
(A Development Stage Company)
======================================================================================================
Common Common Deficit
Shares Shares Accumulated
Issued and Issued and During
Fully Paid Fully Paid Development
(Number) (Amount) Stage Deficit Total
- ------------------------------------------------------------------------------------------------------
Balance, April 30, 1998 488,235 $ 3,163,181 $ - $(3,044,438) $ 118,743
Cancellation of shares (635) - - - -
Loss for the year - - - (94,464) (94,464)
----------- ------------ ------------- ------------ ----------
Balance, April 30, 1999 487,600 3,163,181 - (3,138,902) 24,279
Loss for the year - - - (187,526) (187,526)
----------- ------------ ------------- ------------ ----------
Balance, April 30, 2000 487,600 3,163,181 - (3,326,428) (163,247)
Shares issued for cash 650,000 65,000 - - 65,000
Shares issued for debt settlement 3,500,000 140,513 - - 140,513
Loss for the year - - (92,614) - (92,614)
----------- ------------ ------------- ------------ ----------
Balance, April 30, 2001 4,637,600 3,368,694 (92,614) (3,326,428) (50,348)
Shares issued for services 50,000 2,500 - - 2,500
Shares issued for debt settlement 2,047,700 102,385 - - 102,385
Loss for the period - - (56,449) - (56,449)
----------- ------------ ------------- ------------ ----------
Balance, January 31, 2002 6,735,300 $ 3,473,579 $ (149,063) $(3,326,428) $ (1,912)
======================================================================================================
The accompanying notes are an integral part of these financial statements.
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INSIDE HOLDINGS INC.
NOTES TO THE FINANCIAL STATEMENTS
(Unaudited)
(Expressed in Canadian Dollars)
(A Development Stage Company)
JANUARY 31, 2002
================================================================================
1. NATURE AND CONTINUANCE OF OPERATIONS
THE COMPANY WAS FORMED UNDER THE LAWS OF THE PROVINCE OF BRITISH COLUMBIA,
CANADA, ON JULY 7, 1992 PURSUANT TO A STATUTORY AMALGAMATION OF TWO
PREDECESSOR COMPANIES PREVIOUSLY ENGAGED IN THE EXPLORATION AND DEVELOPMENT
OF MINERAL RESOURCE PROPERTIES IN CANADA. THE BALANCE SHEETS OF THE
PREDECESSOR COMPANIES WERE CARRIED OVER AT HISTORICAL COST. EFFECTIVE
OCTOBER 6, 2000, THE COMPANY CHANGED ITS GOVERNING JURISDICTION FROM THE
PROVINCE OF BRITISH COLUMBIA TO THE YUKON.
Since the date of formation, the Company raised additional private equity
capital to settle certain indebtedness and for the further purpose of
exploring new lines of business. All costs associated with identifying,
researching and negotiating with prospective businesses have been charged
to earnings in the year they were incurred.
On May 1, 2000, the Company purchased 400 registered internet domain names
each ending with the suffix "inside.com" from a privately held company with
the intention of developing a network of affiliated destination web-sites
for transacting e-commerce within several industry segments under a
singular bond. As a consequence, these financial statements have been
prepared to reflect a new development stage, which commenced on May 1,
2000.
The success of the Company's plan of operations is dependant upon its
ability to secure, among other things, agreements with prospective network
affiliates and significant additional capital. The Company has, thus far,
not been able to secure satisfactory agreements with prospective network
affiliates or the necessary capital to materially progress its plans.
Present market conditions are such that internet based companies are, in
general, experiencing difficulty attracting any of the necessary resources
to carry out their business plans. As at January 31, 2002, the Company had
a working capital deficiency of $1,912 and had incurred substantial losses
to January 31, 2002. The Company's registered domain names come up for
renewal between February and May 2002. The total cost of a one year renewal
is estimated to be approximately $20,000. As a consequence of these
circumstances, the Board of Directors may choose in the future to
discontinue its current plans and may seek new lines of business, which may
also be highly speculative in nature. The Company has not engaged in any
formal discussions with prospective businesses and there can be no
assurance that in such event the Company will successfully identify and
secure an agreement to acquire or merge with a new business on terms
acceptable to the Company or on any terms.
Amortization expense for the period includes the previously unamortized
cost of its 400 registered internet domain names to reflect the above
uncertainties.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
In preparing these financial statements, management is required to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amount of revenues and
expenses for the year. Actual results in the future periods could be
different from these estimates made in the current year. The following is a
summary of the significant accounting policies of the Company.
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INSIDE HOLDINGS INC.
NOTES TO THE FINANCIAL STATEMENTS
(Unaudited)
(Expressed in Canadian Dollars)
(A Development Stage Company)
JANUARY 31, 2002
================================================================================
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D )
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amount of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amount of revenues and expenses
during the period. Actual results could differ from these estimates.
FINANCIAL INSTRUMENTS
The Company's financial instruments consist of cash, receivable, accounts
payable and accrued liabilities and due to related parties. Unless
otherwise noted, it is management's opinion that the fair value of these
financial instruments approximate their carrying values and the Company is
not exposed to significant interest currency or credit risks arising from
these financial instruments. The fair value of these financial instruments
approximate their carrying values, unless otherwise noted.
INTELLECTUAL PROPERTY
Intellectual property was recorded at cost and was being amortized over two
years. The unamortized balance was charged to earnings in the current
period.
INCOME TAXES
Future income taxes are recorded for using the asset and liability method.
Under the asset and liability method, future tax assets and liabilities are
recognized for the future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases. Future tax assets and
liabilities are measured using enacted or substantively enacted tax rates
expected to apply when the asset is realized or the liability settled. The
effect on future tax assets and liabilities of a change in tax rates is
recognized in income in the period that substantive enactment or enactment
occurs. To the extent that the Company does not consider it to be more
likely than not that a future tax asset will be recovered, it provides a
valuation allowance against the excess.
LOSS PER SHARE
Basic loss per share is calculated using the weighted average number of
common shares outstanding during the year.
SEGMENTED INFORMATION
The Company currently conducts its operations in Canada in one business
segment.
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INSIDE HOLDINGS INC.
NOTES TO THE FINANCIAL STATEMENTS
(Unaudited)
(Expressed in Canadian Dollars)
(A Development Stage Company)
JANUARY 31, 2002
================================================================================
3. RELATED PARTY TRANSACTIONS
The Company entered into the following transactions with related parties
during the nine month period ended January 31, 2002:
a) Paid or accrued $17,500 (2001 - $22,500) in management fees to a company
controlled by directors of the Company.
b) Issued 2,047,700 to a company with a common director in full settlement
and satisfaction of debts of the Company in the aggregate amount
of $102,385.
4. DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES
These financial statements have been prepared in accordance with generally
accepted accounting principles in Canada. These financial statements also
comply, in all material respects, with accounting principles generally
accepted in the United States and the rules and regulations of the
Securities and Exchange Commission.
NEW UNITED STATES ACCOUNTING STANDARDS
Accounting for derivative instruments and hedging activities
In June 1998, the FASB issued SFAS No. 133 "Accounting for Derivative
Instruments and Hedging Activities" which establishes accounting and
reporting standards for derivative instruments and for hedging activities.
SFAS 133 is effective for all fiscal quarters of fiscal years beginning
after June 15, 1999. In June 1999, the FASB issued SFAS 137 to defer the
effective date of SFAS 133 to fiscal quarters of fiscal years beginning
after June 15, 1999. In June 2000, the FASB issued SFAS No. 138, which is a
significant amendment to SFAS 133. The Company does not anticipate that the
adoption of these statements will have a significant impact on its
financial statements.
Comprehensive income
SFAS No. 130, "Reporting Comprehensive Income", addresses standards for the
reporting and display of comprehensive income and its components.
Comprehensive income includes net income and other comprehensive income.
Other comprehensive income represents revenues, expenses, gains and losses
that are excluded from net income under generally accepted accounting
principles.
For the year ended April 30, 2001 and the nine month period ended January
31, 2002, there were no other items of comprehensive income.
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MANAGEMENT'S DISCUSSION AND ANALYSIS
Overview
On May 1, 2000, the Company purchased 400 registered internet domain names each
ending with the suffix "inside.com" from a privately held company, with the
intention of developing a network of affiliated destination web sites for
transacting e-commerce within several industry segments under a singular brand.
The success of the Company's plan of operations is dependant upon its ability to
secure, among other things, agreements with prospective network affiliates and
significant additional capital. The Company has, thus far, not been able to
secure satisfactory agreements with prospective network affiliates or the
necessary capital to materially progress its plans. Present market conditions
are such that internet based companies are, in general, experiencing difficulty
attracting any of the necessary resources to carry out their business plans. As
at January 31, 2002, the Company had a working capital deficiency of $1,912 and
had incurred substantial losses to January 31, 2002. The Company's registered
domain names come up for renewal between February and May 2002. The total cost
of a one year renewal is estimated to be approximately $20,000. As a consequence
of these circumstances, the Board of Directors may choose in the future to
discontinue its current plans and may seek new lines of business, which may also
be highly speculative in nature. The Company has not engaged in any formal
discussions with prospective businesses and there can be no assurance that in
such event the Company will successfully identify and secure an agreement to
acquire or merge with a new business on terms acceptable to the Company or on
any terms.
Amortization expense for the period includes the previously unamortized cost of
its 400 registered internet domain names to reflect the above uncertainties.
In January 2002, Gateway Research Management Group Ltd., of the Bahamas,
purchased 1,675,000 common shares of the Company from an insider of the Company
in a private transaction and 2,047,700 common shares from the Company in
connection with an assignment and settlement of Company debts in the aggregate
amount of $102,385. After giving effect to these transactions, Gateway owned
approximately 55% of the Company. Kevin Winter, a director of the Company, is a
director of Gateway.
The Company also terminated without penalty, effective November 30, 2001, the
management agreement made by and between the Company and Pemcorp Management Inc.
("Pemcorp"). Pemcorp is a management services company controlled by two
directors of the Company.
LIQUIDITY AND CAPITAL RESOURCES
The Company has sustained substantial operating losses and has used substantial
amounts of working capital in its operations to January 31, 2002. As of January
31, 2002 the Company had cash equivalents of $20 and a working capital deficit
of $1,912. Total liabilities exceeded the book value of total assets by $1,912.
During the period, the Company issued 2,047,700 to an insider to settle debts of
the Company in the aggregate amount of $102,385.
The Company's ability to satisfy its remaining liabilities and meet its
obligations as they become due is dependent upon its ability to secure
additional funding through public or private sales of securities, including
equity securities of the Company and there are no assurances that the Company
will be successful in securing such necessary funding.
The common shares of the Company are listed for trading on the OTC Bulletin
Board in the United States. They trade under the symbol "IHLGF". There is,
however, no assurance that a market for the Company's shares will develop, or if
a market develops that it will continue.
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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.
INSIDE HOLDINGS INC.
Date: March 4, 2002 By: "Kevin Winter"
------------------ -----------------
Name: Kevin Winter
Title: President
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