UNITED STATES SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
CURRENT REPORT
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-
16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
FOR THE MONTH OF JULY 2002
-------------------
INSIDE HOLDINGS INC.
------------------------------------------
(Translation of registrant's name into English)
Suite 1260, 609 Granville Street, Vancouver, B.C., Canada
---------------------------------------------------------
(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
--- ---
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 AND ANNUAL REPORT FOR THE TWELVE MONTHS
ENDED APRIL 30, 2002.
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.
By: "Kevin Winter"
-----------------
Name: Kevin Winter
Title: President
Date: July 19, 2002
Exhibit 1
Financial Statements
July 19, 2002
INSIDE HOLDINGS INC.
FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
(A Development Stage Company)
APRIL 30, 2002
DAVIDSON & COMPANY
Chartered Accountants A Partnership of Incorporated Professionals
AUDITORS' REPORT
To the Shareholders of
Inside Holdings Inc.
(A Development Stage Company)
We have audited the balance sheets of Inside Holdings Inc. as at April 30,
2002 and 2001 and the statements of operations, cash flows and shareholders'
equity for the years ended April 30, 2002, 2001 and 2000 and the period from
the commencement of the development stage on May 1, 2000 to April 30, 2002.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with Canadian and United States
generally accepted auditing standards. Those standards require that we
plan and perform an audit to obtain reasonable assurance whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation.
In our opinion, these financial statements present fairly, in all material
respects, the financial position of the Company as at April 30, 2002 and 2001
and the results of its operations and its cash flows for the years ended
April 30, 2002, 2001 and 2000 and the period from the commencement of the
development stage on May 1, 2000 to April 30, 2002 in accordance with
generally accepted accounting principles in Canada.
"DAVIDSON & COMPANY"
Vancouver, Canada
Chartered Accountants
May 6, 2002
COMMENTS BY AUDITORS FOR U.S. READERS ON CANADA
- - U.S. REPORTING DIFFERENCE
In the United States, reporting standards for auditors require the addition
of an explanatory paragraph (following the opinion paragraph) when the
financial statements are affected by conditions and events that cast
substantial doubt on the Company's ability to continue as a going concern,
such as those described in Note 1 to the financial statements. Our report
to shareholders dated May 6, 2002 is expressed in accordance with Canadian
reporting standards which do not permit a reference to such events and
conditions in the auditors' report when these are adequately disclosed in
the financial statements.
"DAVIDSON & COMPANY"
Chartered Accountants
Vancouver, Canada
May 6, 2002
A Member of SC INTERNATIONAL
1200 - 609 Granville Street, P.O. Box 10372, Pacific Centre,
Vancouver, BC, Canada, V7Y 1G6
Telephone (604) 687-0947 Fax (604) 687-6172
INSIDE HOLDINGS INC.
BALANCE SHEETS
(Expressed in Canadian Dollars)
(A Development Stage Company)
AS AT APRIL 30
2002 2001
ASSETS $ $
Current
Cash 226,289 6,940
Receivable 216 681
-------- -------
Total current assets 226,505 7,621
Intellectual property (Note 3) - 20,000
-------- --------
Total assets 226,505 27,621
--------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)
Current
Accounts payable and accrued liabilities 7,843 13,894
Due to related parties (Note 4) - 64,075
-------- --------
Total current liabilities 7,843 77,969
-------- --------
Shareholders' equity (deficiency)
Capital stock (Note 5)
Authorized
100,000,000 common shares, without par value
Issued
9,735,300 common shares
(April 30, 2001 - 4,637,600) 3,706,079 3,368,694
Deficit accumulated during the development stage (160,989) (92,614)
Deficit (3,326,428) (3,326,428)
---------- ---------
Total shareholders' equity (deficiency) 218,662 (50,348)
--------- --------
Total liabilities and shareholders' equity 226,505 27,621
---------- --------
Nature and continuance of operations (Note 1)
On behalf of the Board:
"Kevin Winter" Director "Eric Collins" Director
Kevin Winter Eric Collins
The accompanying notes are an integral part of these financial statements.
INSIDE HOLDINGS INC.
STATEMENTS OF OPERATIONS
(Expressed in Canadian Dollars)
(A Development Stage Company)
Cumulative
Amounts
From the
Commencement
of Development
Stage on May 1,
2000 to Apr 30, Year Ended April 30
2002 2002 2001 2000
- ----------------------------------------------------------------------------
EXPENSES $ $ $ $
Amortization 40,000 20,000 20,000 -
Consulting 7,500 - 7,500 30,000
Listing and transfer agent fees 21,908 8,615 13,293 4,923
Management fees 47,500 17,500 30,000 30,000
Office and general 7,109 622 6,487 6,441
Professional fees 36,972 21,638 15,334 11,289
----------------------------------------
Loss before other item (160,989) (68,375) (92,614) (82,653)
OTHER ITEM
Write-off of loan receivable - - - (104,873)
------------------------------------------
Loss for the year (160,989) (68,375) (92,614) (187,526)
- ------------------------------------------------------------------------------
Basic and diluted loss per share (0.01) (0.04) (0.38)
- ------------------------------------------------------------------------------
Weighted average number of shares
Outstanding 5,854,018 2,636,470 487,600
- ------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
INSIDE HOLDINGS INC.
STATEMENTS OF CASH FLOWS
(Expressed in Canadian Dollars)
(A Development Stage Company)
Cumulative
Amounts
From the
Commencement
of Development
Stage on May 1,
2000 to Apr 30, Year Ended April 30
2002 2002 2001 2000
- ----------------------------------------------------------------------------
$ $ $ $
CASH FLOWS FROM
OPERATING ACTIVITIES
Loss for the year (160,989) (68,375) (92,614) (187,526)
Items not involving cash:
Amortization 40,000 20,000 20,000 -
Write-off of loan receivable - - - 104,873
Capital stock issued for services 2,500 2,500 - -
Change in non-cash working
capital items:
(Increase) decrease in receivable (216) 465 (681) -
Increase (decrease) in
accounts payable 8,794 13,534 (5,039) 13,660
Increase in due to related
parties 38,700 18,725 19,975 65,300
----------------------------------------
Cash used in operating activities (71,211) (13,151) (58,359) (3,693)
----------------------------------------
CASH FLOWS FROM
FINANCING ACTIVITIES
Issuance of capital stock 297,500 232,500 65,000 -
Cash provided by financing
Activities 297,500 232,500 65,000 -
----------------------------------------
CASH FLOWS FROM
INVESTING ACTIVITIES
Loan receivable - - - 700
----------------------------------------
Cash provided by investing
Activities - - - 700
----------------------------------------
- continued -
The accompanying notes are an integral part of these financial statements.
INSIDE HOLDINGS INC.
STATEMENTS OF CASH FLOWS
(Expressed in Canadian Dollars)
(A Development Stage Company)
Cumulative
Amounts
From the
Commencement
of Development
Stage on May 1,
2000 to Apr 30, Year Ended April 30
2002 2002 2001 2000
- ----------------------------------------------------------------------------
$ $ $ $
Continued...
Increase (decrease) in cash
for the year 226,289 219,349 6,641 (2,993)
Cash, beginning of year - 6,940 299 3,292
------------------------------------------
Cash, end of year 226,289 226,289 6,940 299
- ------------------------------------------------------------------------------
Cash paid for income taxes - - - -
- ------------------------------------------------------------------------------
Cash paid for interest - - - -
- ------------------------------------------------------------------------------
Supplemental disclosure with respect to cash flows (Note 7)
The accompanying notes are an integral part of these financial statements.
INSIDE HOLDINGS INC.
STATEMENT OF SHAREHOLDERS' EQUITY
(Expressed in Canadian Dollars)
(A Development Stage Company)
Deficit
Capital Stock Accumulated
Number During the
Of Development
Shares Amount Stage Deficit Total
- -----------------------------------------------------------------------------
$ $ $ $
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
Cash 3,000,000 232,500 - - 232,500
Shares issued for
debt settlement 2,047,700 102,385 - - 102,385
Shares issued for
Services 50,000 2,500 - - 2,500
Loss for the year - - (68,375) - (68,375)
-----------------------------------------------------
Balance,
April 30, 2002 9,735,300 3,706,079 (160,989) (3,326,428) 218,662
- -----------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
INSIDE HOLDINGS INC.
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
(A Development Stage Company)
APRIL 30, 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.
The success of the Company's plan of operations was dependant upon its ability
to secure, among other things, agreements with prospective network affiliates
and significant additional capital. The Company was not able to secure
satisfactory agreements with prospective network affiliates or the necessary
capital to materially progress its plans. Present market conditions remain
such that internet based companies are, in general, experiencing difficulty
attracting any of the necessary resources to carry out their business plans.
As a consequence of these circumstances, the Board of Directors chose not to
renew the registration of its domain names and is determined to seek new
lines of business, which may also be highly speculative in nature. There can
be no assurance that 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 year includes the previously unamortized cost
of its 400 registered internet domain names to reflect the changes in the
Company's plans.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Estimates
The preparation of financial statements in conformity with Canadian 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 year.
Actual results could differ from these estimates.
INSIDE HOLDINGS INC.
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
(A Development Stage Company)
APRIL 30, 2002
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd.)
Cash
The Company considers all investments with a maturity of three months or less
to be cash.
Intellectual property
Intellectual property is recorded at cost and is amortized over two years.
Future income taxes
Future income taxes are recorded 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
Loss per share is calculated using the weighted-average number of shares
outstanding during the year.
In accordance with the revised recommendations of the Canadian Institute of
Chartered Accountants, the Company changed from the imputed earnings approach
to the treasury stock method, to compute the dilutive effect of options,
warrants and similar instruments. Under this method the dilutive effect on
earnings per share is recognized on the use of the proceeds that could be
obtained upon exercise of options and warrants. It assumes that the proceeds
would be used to purchase common shares at the average market price during the
period. The new standard has been applied on a retroactive basis and had no
material impact on the amounts presented.
Segmented information
The Company currently conducts its operations in Canada in one business segment.
INSIDE HOLDINGS INC.
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
(A Development Stage Company)
APRIL 30, 2002
3. INTELLECTUAL PROPERTY
2002 2001
------------------------------- ---------------------------
Accumulated Net Book Accumulated Net Book
Cost Amortization Value Cost Amortization Value
- -------------------------------------------------------------------------------
$ $ $ $ $ $
Domain names - - - 40,000 20,000 20,000
- ------------------------------------------------------------------------------
During the current year, the Company wrote-off its investment in domain names.
4. DUE TO RELATED PARTIES
2002 2001
- ------------------------------------------------------------------------------
$ $
Due to a company controlled by former
directors of the Company. - 24,075
Due to a company controlled by former directors of the
Company and secured on the intellectual property - 40,000
----------------------
- 64,075
- ------------------------------------------------------------------------------
During the current year, the amounts due to related parties were settled
through the issuance of capital stock.
Unless otherwise noted, amounts due to related parties are non-interest
bearing and unsecured, with no fixed terms of repayment.
The fair value of amounts due to related parties are not determinable as
they have no specific repayment terms.
5. CAPITAL STOCK
During fiscal 2001, the Company issued shares of common stock as follows:
a) 3,500,000 shares to settle certain debts totalling $140,573,
including amounts owed to related parties.
b) 650,000 shares for cash proceeds in the amount of $65,000.
INSIDE HOLDINGS INC.
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
(A Development Stage Company)
APRIL 30, 2002
During the current year, the Company issued shares of common stock as follows:
a) 2,047,700 shares to settle certain debts totalling $102,385, including
amounts owed to related parties.
b) 50,000 for shares services, valued at $2,500.
c) 3,000,000 shares for cash proceeds in the amount of $232,500.
6. INCOME TAXES
Income tax expense varies from the amount that would be computed by applying
the combined federal and provincial income tax rate to income before income
taxes as follows:
2002 2001 2000
- ---------------------------------------------------------------------------
$ $ $
Loss before income tax recovery (68,375) (92,614) (187,526)
- ---------------------------------------------------------------------------
Expected income tax recovery (30,495) (41,324) (85,549)
Tax effect of expenses not deducted
for income tax purposes 8,924 8,924 -
Unrecognized benefit of net operating
losses carried forward 21,571 32,400 85,549
-----------------------------------
Actual income tax recovery - - -
- --------------------------------------------------------------------------
The significant components of the Company's future income tax assets are as
follows:
- ---------------------------------------------------------------------------
2002 2001
- --------------------------------------------------------------------------
$ $
Future tax assets:
Intellectual property 17,848 8,924
Non-capital loss carryforwards 53,961 32,400
----------------------
Net future tax assets before valuation allowance 71,809 41,324
Less valuation allowance (71,809) (41,324)
-----------------------
Net future tax assets - -
- ---------------------------------------------------------------------------
INSIDE HOLDINGS INC.
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
(A Development Stage Company)
APRIL 30, 2002
6. INCOME TAXES (cont'd.)
The Company has non-capital losses carried forward for income tax purposes of
approximately $120,000, which can be applied against future years taxable
income. Losses of approximately $586,000, incurred prior to May 1, 2000, have
expired and cannot be applied against future income. These losses expired due
to a change in control of the Company as well as a change in the core business
of the Company, in accordance with the Income Tax Act of Canada.
7. SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS
The following non-cash investing and financing transactions occurred during
the year ended April 30, 2002:
a) The company issued 2,047,700 shares to settle amounts due to related
parties and accounts payable in the amount of $102,385.
b) The Company issued 50,000 shares as payment for services valued at
$2,500.
The following non-cash investing and financing transactions occurred during
the year ended April 30, 2001:
a) The Company issued 3,500,000 shares to settle debts in the amount of
$140,513.
b) The Company issued to a related party, a note payable in the amount
of $40,000 for the purchase of intellectual property.
There were no significant non-cash transactions for the year ended April 30,
2000.
8. RELATED PARTY TRANSACTIONS
The Company entered into the following transactions with related parties
during the year ended April 30, 2002:
a) Paid or accrued $17,500 (2001 - $30,000; 2000 - $30,000) in
management fees to a company controlled by former directors of the Company.
b) Paid or accrued $Nil (2001 - $7,500; 2000 - $30,000) in consulting
fees to a former significant shareholder of the Company.
These transactions were in the normal course of operations and were measured
at the exchange amount, which is the amount of consideration established and
agreed to by the related parties.
INSIDE HOLDINGS INC.
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
(A Development Stage Company)
APRIL 30, 2002
9. FINANCIAL INSTRUMENTS
The Company's financial instruments consist of cash, receivable, accounts
payable and accrued liabilities. 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.
10. 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 ("Canadian GAAP"). Excepted as set
out below, these financial statements also comply, in all material respects,
with accounting principles generally accepted in the United States of America
("United States GAAP").
Recent Accounting Pronouncements
In June 2001, the FASB issued SFAS No. 141, "Business Combinations", which
supersedes Accounting Principles Board ("APB") Opinion No. 16, "Business
Combinations", and SFAS No. 38, "Accounting for Preacquisition Contingencies
of Purchased Enterprises". Concurrently, the Accounting Standards Board
("ASB") in Canada issued CICA Handbook Section 1581, "Business Combinations",
which is consistent with SFAS No. 141. This statement will change the
accounting for business combinations and goodwill. SFAS No. 141 and CICA
Handbook Section 1581 require that the purchase method of accounting be used
for all business combinations initiated after June 30, 2001. Use of the
pooling-of-interests method is no longer permitted. This statement also
establishes criteria for separate recognition of intangible assets acquired
in a purchase business combination. This statement also applies to all
business combinations accounted for using the purchase method for which the
date of acquisition is July 1, 2001, or later. The Company does not
anticipate that the adoption of this statement will have a significant
impact on its financial statements.
In June 2001, the FASB issued Statement No. 142, "Goodwill and other
Intangible Assets", which supersedes APB Opinion No. 17, "Intangible Assets".
Concurrently, the ASB in Canada issued CICA Handbook Section 3062, "Goodwill
and Other Intangible Assets", which is consistent with SFAS No. 142. This
statement requires that goodwill no longer be amortized to earnings, but
instead be reviewed for impairment. This statement is effective for fiscal
years beginning after December 15, 2001, and is required to be applied at
the beginning of an entity's fiscal year and to be applied to all goodwill
and other intangible assets recognized in its financial statements at that
date. Impairment losses for goodwill and indefinite-lived intangible assets
that arise due to the initial application of this statement (resulting from
a transitional impairment test) are to be reported as resulting from a
change in accounting principle. Under an exception to the date at which this
statement becomes effective, goodwill and intangible assets acquired after
June 30, 2001, will be subject immediately to the non-amortization and
amortization provisions of this statement.
INSIDE HOLDINGS INC.
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
(A Development Stage Company)
APRIL 30, 2002
10. DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES (cont'd...)
In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations" ("SFAS 143"), which addresses financial accounting and reporting
for obligations associated with the retirement of tangible long-lived assets
and the associated asset retirement costs. The Company does not anticipate
that the adoption of this statement will have a significant impact on its
financial statements.
In October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment
on Disposal of Long-lived Assets" (SFAS 144), which supersedes SFAS No. 121,
"Accounting for the Impairment of Long-lived Assets and for Long-lived Assets
to be Disposed of". SFAS No. 144 applies to all long-lived assets (including
discontinued operations) and consequently amends APB Opinion No. 30,
"Reporting Results of Operations - Reporting the Effects of Disposal of a
Segment of a Business". SFAS No. 144 requires that long-lived assets that
are to be disposed of by sale be measured at the lower of book value or fair
value less cost to sell. That requirement eliminates APB Opinion No.30's
requirement that discontinued operations be measured at net realizable value
or that entities include under "discontinued operations" in the financial
statements amounts for operating losses that have not yet occurred.
Additionally, SFAS No. 144 expands the scope; of discontinued operations
to include all components of an entity with operations that (1) can be
distinguished from the rest of the entity and (2) will be eliminated from the
ongoing operations of the entity in a disposal transaction. SFAS No. 144 is
effective for financial statements issued for fiscal years beginning after
December 15, 2001, and, generally, its provisions are to be applied
prospectively. The Company does not anticipate that the adoption of this
statement will have a significant impact on its financial statements.
INSIDE HOLDINGS INC.
QUARTERLY AND YEAR END REPORT - FORM 51-901F
APRIL 30, 2002
SCHEDULE A: FINANCIAL INFORMATION
See attached financial statements for the year ended April 30, 2002.
SCHEDULE B: SUPPLEMENTARY INFORMATION
1. See attached financial statements for the year ended April 30, 2002.
2. See attached financial statements for the year ended April 30, 2002.
3. a) Summary of securities issued during the year:
Date of Type of Type of Number Total Type of Commi-
Issue Security Issue or Amount Price Proceeds Consider- ssion
ation Paid
$ $ $
- -----------------------------------------------------------------------------
11 29 01 Common Debt 50,000 0.05 2,500 Services Nil
shares settlement
01 08 02 Common Debt 2,047,700 0.05 102,385 Debt Nil
shares settlement
02 28 02 Common Private 3,000,000 U.S. 232,500 Cash Nil
shares placement 0.05
- ----------------------------------------------------------------------------
b) Summary of stock options granted during the year: Nil.
4. a) See attached financial statements for the year ended April 30, 2002.
b) See attached financial statements for the year ended April 30, 2002.
c) See attached financial statements for the year ended April 30, 2002.
d) See attached financial statements for the year ended April 30, 2002.
5. Directors: Kevin Winter - President and CEO
Eric Collins - Director
Richard King - Director
Officers: Kevin Winter - President and CEO
INSIDE HOLDINGS INC.
QUARTERLY AND YEAR END REPORT - FORM 51-901F
APRIL 30, 2002
SCHEDULE C: MANAGEMENT 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 was dependant upon
its ability to secure, among other things, agreements with prospective
network affiliates and significant additional capital. The Company was
not able to secure satisfactory agreements with prospective network affiliates
or the necessary capital to materially progress its plans. Present market
conditions remain such that internet based companies are, in general,
experiencing difficulty attracting any of the necessary resources to carry
out their business plans. As a consequence of these circumstances, the Board
of Directors chose not renew the registration of its domain names and is
determined to seek new lines of business, which may also be highly speculative
in nature. There can be no assurance that 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 year includes the previously unamortized cost
of its 400 registered internet domain names to reflect the change in the
Company's plan.
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. Kevin Winter, a director of the Company, is
a director of Gateway. On February 28, 2002, Mr. William McCartney, Mr.
Murray Oliver and Mr. Leonard Petersen resigned from the Board of Directors
and Mr. Eric Collins and Mr. Richard King were appointed to the Board.
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 former directors of the Company.
Liquidity and Capital Resources
During the year, the Company issued 2,047,700 to an insider to settle debts
of the Company in the aggregate amount of $102,385 and completed a private
placement of 3,000,000 shares for cash proceeds of $232,500.
As of March 31, 2002 the Company had cash of $226,289 and working capital of
$218,662. The book value of total assets exceed liabilities by $218,662.
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.
INSIDE HOLDINGS INC.
QUARTERLY AND YEAR END REPORT - FORM 51-901F
APRIL 30, 2002
SCHEDULE C: MANAGEMENT DISCUSSION AND ANALYSIS
Operations
The Company's expenses are primarily administrative in nature and include,
professional fees, management fees and transfer agent expenses. There is
no material change in the nature and amount of these expenses incurred in
comparative periods, except that effective November 30, 2001 the Company was
no longer contractually obligated to pay management fees to Pemcorp.
During the period, the Board of Directors chose to discontinue its current
business plans. As a consequence, the Company included in amortization
expense for the period the net book value of its intellectual properties,
which represent the unamortized cost of its 400 registered internet domains.
Investor Relations
The Company did not undertake any investor relations activities during the
quarter.