UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
Registration File # 000-30194
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of DECEMBER 31, 2002 - FORM 20-F: Audited Financial Statements
and Shareholder List
BYRON RESOURCES INC.
(Formerly Bioforest Pacific Inc.)
2200 - 181 UNIVERSITY AVENUE, TORONTO, ONTARIO, CANADA M5H 3M7
Indicate by check mark whether the registrant files or will file annual reports
under cover of 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 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 [X] No [ ]
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b):
82-1918.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
BYRON RESOURCES INC.
(Registrant)
Date May 20, 2003 By Ross McGroarty (signed)
-----------------------------
Ross McGroarty, Chairman, ASO
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM 20-F
[ ] REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF
THE SECURITIES EXCHANGE ACT OF 1934
or
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission File No. 82-1918 Section 12g 3-2(b)
Registration File No: 000 - 30194
----------
BIOFOREST PACIFIC INC.
(Formerly Castello Casino Corp.)
(Exact name of Registrant as specified in its charter)
ONTARIO, CANADA
(Jurisdiction of incorporation or organization)
181 University Avenue, Suite 2200
Toronto, Ontario M5H-3M7, Canada
Tel: (416) 594-0528
Fax: (416) 594-6811
e-mail: bioforest@interface.ca
(Addresses of principal executive offices)
Securities registered or to be registered pursuant to
Section 12(b) of the Act: None
Securities registered or to be registered pursuant to
Section 12(g) of the Act: Common
Common shares
(Title of Class)
Securities for which there is a reporting obligation pursuant to
Section 15(d) of the Act: None
Indicate the number of outstanding shares of each of the
issuer's classes of capital or common stock as of the close of the
period covered by the annual report.
Number of outstanding Common shares as of December 31, 2002: 42,169,302
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 period 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 by check mark which financial statement item the Registrant
has elected to follow:
Item 17 X Item 18 _
2
TABLE OF CONTENTS
Page
----
PART I
Item 1. Description of Business...................................................... 3
Item 2. Description of Property...................................................... 11
Item 3. Legal Proceedings............................................................ 11
Item 4. Control of Registrant........................................................ 12
Item 5. Nature of Trading Market..................................................... 12
Item 6. Exchange Controls and Other Limitations Affecting Security Holders........... 13
Item 7. Taxation..................................................................... 13
Item 8. Selected Financial Data...................................................... 14
Item 9. Management's Discussion and Analysis of Financial Condition and
Results of Operations........................................................ 15
Item 9A. Quantitative and Qualitative Disclosures about Market Risk................... 17
Item 10. Directors and Officers of Registrant......................................... 17
Item 11. Compensation of Directors and Officers ...................................... 18
Item 12. Options to Purchase Securities from Registrant............................... 18
Item 13. Interest of Management in Certain Transactions............................... 18
PART II
Item 14. Description of Securities to be Registered................................... 19
PART III
Item 15. Defaults Upon Senior Securities.............................................. 19
Item 16. Changes in Securities and Changes in Security for Registered Securities...... 19
PART IV
Item 17. Financial Statements......................................................... 19
Item 18. Financial Statements......................................................... 19
Item 19. Financial Statements and Exhibits............................................ 19
Signatures............................................................................. 20
Attachment "A" Index to Financial Statements........................................... 23
Attachment "B" Exhibits ............................................................... 30
3
PART I
ITEM 1. DESCRIPTION OF BUSINESS
INTRODUCTION
BioForest Pacific Inc. ("BIFP" or the "Company") is a corporation under the laws
of the Province of Ontario, Canada, with principal executive offices at 181
University Avenue, Suite 2200, Toronto, Ontario, M5H 3M7. The Company has no
operating business. Formerly known as Castello Casino Corp., the company changed
its name on January 3, 2001 and on January 8, 2001 the common shares of the
company were consolidated on the basis of one (1) new share for fourteen (14)
old.
At the Annual and Special Meeting of Shareholders held on December 12, 2002
approval was granted to consolidate the issued common shares on the basis of 1
new consolidated share for each 140 shares held and to change the name of the
Corporation.
Pursuant to agreements dated August 31, 1999 and October 25, 1999 and the
extension granted on September 26, 2001, by the Native Trust Board of Fiji, the
rights to the Merit Concession expired on October 31, 2002. A further extension
is under discussion with the Taukei Unit Trust and the Native Land Trust Board.
On February 22, 2001, BioForest Pacific Inc. completed the acquisition of
BioForest Investments Inc., with the issuance of 36,723,050 common shares,
pursuant to the Share Exchange Agreement dated May 9, 2000 and as amended by
letter agreement dated December 15, 2000.
The shares were issued in a transaction that is exempt from the registration
requirements of the Securities Act of 1933, as amended, of the United States of
America, and may not be transferred except pursuant to registration under the
Securities Act or exemption from such registration.
BioForest Investments Inc. had the right to earn 70% of BioForest Holdings
(Fiji) Limited and BioForest Products (Fiji) Limited ("H&P") upon providing U.S.
$10,000,000. H&P are 30% owned by the Taukei Unit Trust, which represents the
interest of certain Fijian owners of forestlands. The funding was to be used to
acquire several indigenous timber concessions in the Republic of Fiji, to
purchase and upgrade certain operating sawmills and dry mills and for operating
capital.
On June 9, 2000, Castello announced that the Company has completed a U.S.
$560,000, 8% convertible debenture financing. The proceeds from this financing
were used for working capital. The company also issued a warrant to purchase US
$112,000 of common shares exercisable under the same terms as the Debenture. The
Warrant expires on April 30, 2003. The principle amount remaining on the
convertible debenture is US$342,000. The debenture was due on June 30, 2001 and
as of December 31, 2002 had not been paid. On December 12, 2002 shareholders of
the corporation approved a resolution authorizing the issuance of common shares
of the corporation for debt. The debenture holder subject to certain conditions
is agreeable to accept common shares for debt.
BioForest Investments Inc. became an approved foreign investor under the Fiji
Foreign Investment Act on the 28th February 2000 as a condition to being
entitled to own 70% of H&P. The Fiji Trade and Investment Board and the Reserve
Bank of Fiji issue foreign investment approvals.
The Native Land Trust Board (NLTB) confirmed and approved the BioForest
Investments Inc. acquisition of the Merit Concession on the 14th of July 1999
subject to certain performance conditions.
Historically the Fiji Forestry Department has geared the harvest rates for
indigenous timber
4
concessions to the mean annual increment (MAI) a figure calculated to be
approximately 2.65%. Over the past 15 years the average annual indigenous forest
harvest has been approximately 150,000 cubic metres. Based on a MAI of 2.65%
this would suggest that the cut rate is based on a resource base of
approximately 5,700,000 cubic metres. This appears correct as the country has an
indigenous forest resource base of approximately 17,000,000 cubic metres based
on the 1973 Land Resource Study-Fiji Forestry Inventory prepared by the Land
Resource Division of the UK Overseas Development Administration. The present
harvest rate is a function of existing operating concessions or 34% of available
resources.
The Fiji Forestry Department has major challenges to shift existing logging
production into a sustainable logging practice and sustainability guidelines.
The forest logging practices of H&P will be based on ISO14000FSC certification
in accordance with International Trade and Timber Organization (ITTO)
sustainable harvesting guidelines. The country's natural hardwood forests
consist of some 700,000 hectares. Together with the establishment of a
centralized state of the art processing facility and afforestation program, H&P
plans to increase its present 95,000 cubic meter per annum cut rate to an
annualized 300,000 cubic meter for indigenous timbers, 150,000 cubic metres for
mahogany and 50,000 cubic metres of other planted species within 4 years.
ACQUISITION OF BIOFOREST INVESTMENTS INC.
At a special meeting on December 28, 2000, the Corporation received approval
from shareholders to acquire all of the outstanding shares of BFI, a private
corporation engaged in the ownership, development and exploitation of certain
hardwood forest opportunities in Fiji, change the name of the Corporation to
Bioforest Pacific Inc. ("BIFP") and a consolidation of the share capital on a 1
new for 14 old shares. The formal name change and consolidation were effective
on January 3rd and 8th, 2001 respectively with the Ministry of Commercial
Relations (Ontario).
At the December 28, 2000 meeting, Shareholders of the Corporation approved and
ratified the execution and delivery of the Share Exchange Acquisition Agreement
made as of May 9, 2000 and as amended on December 15, 2000 by the Corporation
and BFI (the "Vendor"), and the purchase by the Corporation of all of the
outstanding shares of BFI in exchange for up to 38,000,000 fully paid and
non-assessable post-consolidated common shares of the Corporation.
FORMAL VALUATION OF BFI
The Corporation received a valuation in respect of the H&P properties from John
Duncanson, Registered Forester, President, Duncanson Investment Research Inc.,
Toronto, Ontario. In his valuation report dated November 1999, Mr. Duncanson set
forth his opinion that the planted undeveloped value of the Merit Forest
Concession, Fiji, in its current state is approximately US $91.7 million.
BFI was incorporated under the laws of the British Virgin Islands on August 31,
1999. The registered and records office of BFI is Akraa Building, 24 De Castro
Street, Whickhams Clay Road Town, Tortola, British Virgin Islands. The records
are kept at 47 Ono Street, Suva, Fiji Islands.
GENERAL
BioForest Investments Inc. through its 70% owned subsidiaries, BioForest
Products (Fiji) Limited ("BFP"), BioForest Holdings (Fiji) Limited ("H&P"),
currently holds the Merit Forest Concession. In addition, H&P has been granted
an option by the Native Land Trust Board to acquire the Namosi and
Wainikoroiluva concessions, and is negotiating to acquire other concessions, the
pulpwood plantation lands and the Government owned mahogany plantations. These
three timber concessions on Viti Levu are appraised at US$114 million. H&P's
business strategy is centered on the development of sustainable hardwood forest
plantations and the processing and manufacture of forest products. Fiji's
hardwood forest represents less than 0.01% of the world's productive hardwood
area. In worldwide
5
terms sales of tropical hardwood are increasing in value but declining in
availability due to a combination of factors including non-sustainable logging
practices and population pressures forcing conversion of forest lands for food
production. Proper environmental planning and a more favourable land/population
ratio in Fiji should avoid both these negatives.
BACKGROUND
BFI was incorporated in the BVI on August 31, 1999, to participate in the
development of an integrated and sustainable forestry enterprise in partnership
with the native landowners in Fiji. BFI has the right to earn 70% of H&P upon
providing US$10,000,000 being the balance of its equity contribution to fund the
implementation of H&P's US$12, 000,000 Phase 1 business plan. H&P are 30% owned
by the Taukei Unit Trust (TUT) representing the native landowners.
THE PROJECT
The project is based on the sustainable exploitation of indigenous forest,
acquisition of mature mahogany plantations (not native) and the development and
planting of fast growing eucalyptus (hardwood) plantations as a source of short
fiber-wood chip. The US $12,000,000 investment will be used to acquire and
upgrade existing timber processing operations, acquire further forest resources,
initiate the pulpwood plantations program and to provide the option payment on
the mahogany plantations and to provide operating capital. Ten million of the
US$12 million investment is being provided by BFI as the balance of its equity
contribution and US$2 million will be raised by H&P. The Phase 1 planned annual
harvest of 45,000 cubic metres log will be processed on a two shift operation to
yield about 20,000 cubic metres of sawn timber 65% of which will be value added
for export and is expected to provide annualized earnings of US$5.0 million and
net asset value of US$200,000,000 by the end of year one.
BFIP has retained Duncanson Investment Research Inc. Registered Professional
Foresters of Toronto, Ontario, Canada to undertake project feasibility and
marketing study which was completed in April 2001.
Phase 2 involves the continuation and expansion of the Phase 1 operation to
support a sustainable annual log harvest of 300,000 cubic meters, the
development of up to 100,000 hectares of fast growing eucalyptus plantation and
to acquire the Government controlled mahogany plantation. The successful
implementation of Phase 2 is expected to provide annual earnings of
US$50,000,000 by the end of year 5 and earnings are projected to be
US$150,000,000 by year 12.
REVISED BUSINESS PLAN - APRIL 2, 2001
EXECUTIVE SUMMARY
H&P is seeking to raise US$15-20 million to purchase and upgrade certain
processing facilities and to acquire further timber concessions to support a
sustainable annual log harvest of up to 100,000 cubic metres. The 10 year
Business Plan of H&P is divided into two phases:
PHASE 1 -
The Phase 1, a US$18.12 million investment, will increase the resource value to
more than US$200.0 million and the upgraded processing facilities, mobile
equipment, roads and infrastructure will have a value of about US$15.0 million.
Approximately US$10.0 million of the US$15-20 million investment is being
provided by BIFP as the balance of its equity contribution. To date,
approximately US$1.5million has been advanced by BIFP/BFI and US$5-10 million
will be raised through BIFP as a special loan and/or a convertible debenture
issued by H&P. The planned annual log harvest of 67,000 cubic metres will be
processed to yield: 25,000 cubic metres of sawn timber (65% of which will be
6
value added for export) and 7,500 cubic metres of plywood and veneer. The
operation is expected to provide earnings of US$7.0 million by the end of year
one.
PHASE 2 -
The three key elements of the Phase 2 - US$223 million program are:
i) the extension of the Phase 1 program to a country-wide operation
to support a sustainable annual log harvest of up to 200,000 cubic
metres by 2005;
ii) the acquisition of mahogany plantations to provide a 100,000 cubic
metre sustainable annual log harvest by 2005;
iii) the development of up to 80,000 hectares of fast growing
eucalyptus plantations.
The final scope of Phase 2 will be determined by feasibility and investment
study as well as the Company's ability to arrange the necessary financing. It is
anticipated that notwithstanding the Company's ability to proceed with items ii
and iii (the acquisition of mahogany plantations and the eucalyptus
development), the Company will expand its indigenous hardwood operations.
FIJI FORESTRY: SECTOR OVERVIEW
Forested lands in Fiji amount to approximately 825,000 hectares or the
equivalent of 48% of total land base. Fiji's forests are divided into three
groups: natural or indigenous hardwood (716,000 ha.), mahogany plantations
(68,000 ha.), and pine plantations (41,000 ha.). The indigenous hardwood forests
are located primarily on the three larger islands of Fiji; Viti Levu, Vanua Levu
and Kadavu. The mahogany plantations, first established in 1952, are contained
in 14 forest stations, 8 on Viti Levu and 6 on Vanua Levu. The Caribbean Pine
plantations, first introduced in 1955, are located in the drier grassland areas
of northwestern Viti Levu and western Vanua Levu. The mahogany plantations have
yet to be harvested and have a projected annual allowable cut in excess of
100,000m/3/.
In February 1996, H&P's founders retained two international forest plantations
and processing consultancy groups to formulate a proposal to integrate the
indigenous forests to form the base of a viable operation and to acquire the
Government owned mahogany plantations and develop a pulpwood plantation. This
was reviewed and updated in 1999 and 2000 by Duncanson Investment Research Inc.
of Ontario, Canada.
INDIGENOUS FORESTS
Detailed information on the extent and composition of the indigenous resource
dates from a survey released in 1973 by the Land Resources Division of the
Overseas Development Administration, U.K.
This survey identifies three separate management entities - protection,
non-commercial, and production forest. The survey with subsequent reviews and
updating form an excellent data base for the country's indigenous forest
resources.
While the survey does not cover the entire forested areas, it does embrace the
bulk of the potentially exploitable forest in the three main islands. Results
indicate a total overbark volume of 16,406,000m/3/ for all species above 40cm
dbh, over a production forest area of 235,903 ha.
The Fiji Forestry Department has major challenges to shift existing logging
production into International Trade and Timber Organization (ITTO) logging
practice and sustainability guidelines. The ITTO requirements will be satisfied
by the logging and reforestation practices proposed by H&P
7
which will be ISO14000 and or FSC certified and conforms with ITTO sustainable
harvesting guidelines.
MAHOGANY PLANTATIONS (PHASE 2)
The mahogany of world trade fame comes from natural forests of South America and
Africa. It is regarded as the most valuable tree in tropical America and as one
of the premier cabinet woods in the world.
The mahogany plantations were planted by the Fijian government on areas
previously logged. The plantations are owned by the Government and are now being
prepared for development. In total, the Fijian Forestry Department has access to
68,600 hectares of land for planting. Approximately 93% of this land is leased
customary land, with the balance being Crown Land or Crown Grants. 84 leases
ranging in terms from 99 years to 50 years cover the mahogany plantations. The
majority of the leases are 50 years.
H&P's interest in the purchase of the Mahogany Plantations is linked to the
interest of the TUT, whose founding members represent the vast majority of the
mature mahogany plantation landowners most of which are located in south eastern
Viti Levu.
PULPWOOD PLANTATIONS (PHASE 2)
The establishment of large-scale hardwood pulpwood plantations to meet the
projected demand for short fibre wood chip has been recognized as having the
greatest potential for the forestry sector in Fiji. Consultants including Dr.
John Davidson, Margules Groome Poyry and Eric Roughana and Associates of
Australia and Duncanson Investment Research Inc., Canada, have provided positive
preliminary studies and recommend further development of the project.
Fiji's hardwood forest industry, both indigenous and plantation based, is
undergoing significant change. The most recent analysis of the market
opportunities for the plantation sector have concluded that the outlook is
positive and there are major opportunities for investment in fast growing
hardwoods. Fiji has the available land and appropriate climate and physical
setting similar to Aracruz in Brazil, to significantly expand its wood resource
base.
LAND HOLDINGS AND PULPWOOD DEVELOPMENT
H&P has the opportunity to acquire up to 100,000 hectare of land belonging to
members of TUT for the establishment of fast growing eucalyptus pulpwood
plantation to produce 300m/3/ per ha on a 7 to 10 year rotation as a source of
short fibre wood chip for the pulp and paper industry; in the longer term, i.e.
15 -17 years this resource could support a pulp and paper mill. The wood chip
production stage is being developed entirely for the export market. Projections
indicate that the pulpwood chip export will contribute up to 75% of the Group's
earnings by year twelve.
PROCESSING AND MANUFACTURING
H&P's Phase 1 business plans include the acquisition of existing operations to
produce 20,000m/3/ sawn timber with expected annualized earnings of US$5,000,000
by the end of year one. Phase 2 would involve the construction of a centralized
integrated processing facility to process up to 400,000m/3/ of logs per year to
be completed by year 5 with projected annualized earnings of US$50 million. H&P
proposes to develop value added production both up stream and down stream,
including manufacturing and finishing facilities. This would include the
manufacture of doors, windows, furniture, parquet and other building products.
Linkages will be established with various manufacturers, through joint venture
agreements between H&P and foreign industry partners.
8
Subsequent to successful establishment of the pulpwood program, by year 3 it is
proposed to construct the chipping plant and the necessary infrastructure to
start wood chip production and export by year 8 to 10 and full production by
year 12.
MARKET OPPORTUNITIES & STRATEGY
The initial thrust of H&P's export program will be to expand its market share
into countries such as USA, UK, Germany, Japan and Australia each of which have
established trading history in Fijian woods and veneers for decorative use and
furniture manufacture. H&P have had initial discussions with cabinet and door
manufacturers in Europe and North America with experience in Fijian woods and
mahogany for the purpose of establishing manufacturing joint venture in Fiji
once the company is established. Preliminary studies carried out by Australian
and Canadian consultants show that subject to green certification (ITTO
sustainable guidelines) there is a ready market for Fiji timber products in the
North American, Australian and Japanese markets. A detailed market study will be
undertaken by the H&P's consultant to form part of the feasibility study.
MANAGEMENT
H&P has identified a suitable team to manage and operate the project and to
obtain support and financing for H&P's business plan. H&P is well advanced in
sourcing key management people that would be acceptable to H&P's financiers. H&P
has the option to secure a suitable industry partner to join the management
team. This of course will have to be a corporate fit and will be considered
within the framework of H&P's business plan. The management issue is a key
factor in the success of the venture.
EUROPEAN ECONOMIC COMMUNITY (EEC)
The Fiji Islands by virtue of its ex-colonial status is a member of the
African-Caribbean Pacific ("ACP") group of countries. The ACP was formed by the
EEC to provide aid and assistance to a select group of small countries in the
three regions. The EEC particularly encourages the development of private
enterprise projects with a minimum of 25% indigenous landowner participation.
Assistance is considered on a project by project basis, key elements being the
beneficial impact of the project on the country and the region and whether the
EEC is a consumer of the product and suppliers and constructors for the project.
Initial discussions indicate that H&P qualifies for assistance with both
financing and marketing. H&P will request the Fiji Government to arrange a
meeting with the EEC to establish the framework for the assistance program.
REFORESTATION AND ENVIRONMENTAL
The Fiji Forestry Department has major challenges to shift existing logging
production into International Trade and Timber Organization (ITTO) logging
practice and sustainability guidelines. The ITTO requirements will be satisfied
by the logging and reforestation practices proposed by H & P which will be ISO
14000 and or FSC certified and conforms with ITTO sustainable harvesting
guidelines.
RESEARCH AND DEVELOPMENT
Subsequent to the initial acquisition and operations start up phase H&P will
establish a market research and silvicultural development division to guide the
Company in implementing its business plans.
COMPETITION
The forest industry in Fiji can trace its roots back to the sandalwood trade in
the early 1800s. The sawmill industry in Fiji is a collection of small,
inefficient and disjointed band mills. The sawmill industry currently processes
260,000m/3/ of sawn logs annually. There are two plywood/veneer mills on Vanua
Levu with a total annual productive capacity of 10,000m/3/. There is no pulp and
paper industry in Fiji.
9
SAWMILL INDUSTRY
According to the Fiji Forest Department, there are 24 sawmills currently
licensed for operation and operating in Fiji, including; eleven sawmills on Viti
Levu, twelve on Vanua Levu, and on the island of Kandavu. There are eight
sawmills that are neither licensed nor operational. Only 22 of the sawmills
process indigenous hardwood species. In 1994, there were 46 sawmills operating
in Fiji. Most of the smaller mills employed older circular saw technology.
Concerned about wasteful practices the Government introduced legislation in 1996
restricting the use of circular saw head rigs. As a result 22 sawmills closed.
Only sawmills with band saw head rigs were licensed to operate. It is expected
that further closures will occur and that the number of sawmills operating will
be reduced to 10.
The sawmills currently operating in Fiji are small with an average daily
productive capacity of less than 25m/3/. The largest sawmill, built in 1982, is
the Tropik Wood Industries Ltd. mill in Lautoka. Fiji Pine (99% owned by the
Fiji Government) owns 75% of Tropik and the Commonwealth Development Corporation
owns the remaining 25%. The Tropik sawmill has the capacity to produce 300m/3/
per day of Caribbean Pine softwood lumber and 250,000 tons of pine wood chips
for export. Another sawmill, the Pacific Green sawmill in Sigatoka, specializes
in custom cutting coconut palm trees into furniture components.
Production of hardwood chips face a variety of competitors including Australia,
New Zealand and Chile. In all cases Fiji has an advantage because of its soils,
climate, land ownership and shipping distance to market. On a rotation of
plantings Fiji is much better placed with a rotation age base of 10 years
compared to 30 years in Australia.
SALES AND MARKETING
H&P has no experience in selling, marketing or distributing any forest products.
In order to market any of its products directly, H&P must develop and propose to
acquire a substantial marketing and sales force with technical expertise and
with supporting distribution capability through the purchase of existing
operations. There can be no assurance that H&P will be able to build such a
sales force or distribution capability or that its sales or marketing efforts
will be successful. If H&P relies on third parties to market and distribute its
products, the commercial success of such products may be outside of H&P's
control. Moreover, there can be no assurance that the industry will accept H&P's
products, even if H&P's products prove to be superior to other comparable
products in the marketplace.
AVAILABILITY OF CAPITAL AND PARTNERING STRATEGY
Due to regulatory environment and the uncertainties involved, there can be no
assurance that BIFPs financial resources will be sufficient to permit H&P to
complete its business objectives. BIFP's anticipated cash resources may not be
sufficient to commercialize the products currently under development without
further financing, and there can be no assurance that BFIP will be able to
obtain such further financing. There can be no assurance that BFIP will obtain
corporate partners in the forestry industry to participate financially in the
pre-development and/or development stage of H&P's products, nor can there be any
assurance that the amount of any such participation will be sufficient.
Insufficient funding may require BFIP to delay or eliminate expenditures for
research and development, testing, production and marketing of one or more of
its proposed products. There can be no assurance that BFIP will be able to raise
additional capital if its capital resources are exhausted. If BFIP requires and
obtains additional financing, shareholdings of investors in the Corporation may
be diluted. There is no assurance that H&P's research and product development
strategies will lead to commercial marketing.
PRODUCT LIABILITY AND INSURANCE
H&P is subject to the inherent business risk of exposure to product liability
claims in the event that the use of its prospective products is alleged to have
resulted in adverse effects following commercial sale. There can be no assurance
that H&P will be able to obtain coverage at the appropriate time or at
10
economically feasible rates or that such insurance will provide adequate
coverage against all potential claims. An inability to obtain insurance on
economically feasible terms or otherwise to protect against potential product
liability claims could inhibit or prevent the marketing of products developed by
H&P The obligation to pay any product liability claim or a recall of a product
could have a material adverse effect on the business, financial condition and
future prospects of H&P.
ADVANTAGES TO INVESTING IN FIJI
Fiji offers the following blend of advantages to investors to locate their
investments in manufacturing and other enterprises:
. Preferential access to Australian and New Zealand markets under
SPARTECA, to European markets under Lome Agreement.
. Easy repatriation of capital and profits.
. An adaptable, productive, industrially disciplined and English
speaking labour force with competitive wage rates.
. A well-balanced package of financial and other incentive schemes
including a 13-year tax holiday and total freedom from import duties.
. Good air and sea links with overseas markets.
. Sophisticated telecommunication links with the rest of the world.
. A well-developed infrastructure, including electricity, water supplies
and internal communications.
. Availability of factory land and buildings at reasonable rates.
. A government which welcomes and supports local and foreign investment,
within its overall objectives of accelerating industrial development.
. Well-developed banking and financing institutions providing full
ongoing financial services.
. An illustrious list of local and foreign companies, large and small
already successfully manufacturing and operating in Fiji.
. Under the Foreign Investment Act the FTIB issues business certificates
to all new proposals within 15 days of receiving complete proposals.
The Company is a Foreign Issuer inasmuch as it does not meet any of the
standards set in Rule 3b-4 c.2.i, ii or iii. The citizenship of the Company's
officers and directors are as follows: three Canadians (R. McGroarty, G.E. Mara
and D.L. Hynes) Greg Hill (Fiji) and Ewan Stoddart (Australia). The business of
the Company is administered in Toronto, Ontario Canada.
The Company's financial statements appearing in this Registration Statement are
expressed in Canadian Dollars. References to other currencies are identified as
necessary.
GENERAL HISTORY AND DEVELOPMENT OF BIOFOREST PACIFIC, INC. (FORMERLY CASTELLO
CASINO CORP.)
The Company was incorporated under the laws of the Province of British Columbia,
Canada, on July 18, 1986 as Castello Resources Ltd. It subsequently changed its
name to Castello Business Systems Ltd. on January 21, 1993 before becoming
Castello Casino Corp. on October 31, 1995. Also, in 1995, Articles of
Continuance provided for the Company's continuance in the Province of Ontario,
Canada. Articles of Amendment granted Castello provided for an increase in the
authorized capital to 100,000,000 common shares of no par value and the
consolidation of the common shares on the basis of four (4) pre-consolidation
common shares for one (1) post-consolidation common share. On January 3, 2000,
the Company changed its name to Bioforest Pacific Inc. ("BIFP") and consolidated
its common shares on the basis of fourteen (14) shares for one (1)
post-consolidated share and increased the authorized capital to an unlimited
number of Common shares.
The Company was formed to engage in the business of both mineral and oil and gas
exploration and development in Canada and the United States. By 1989, the
Company abandoned its option on the mining claims held in British Columbia and
sold its oil and gas interests in 1990.
11
In July 1991, the Company entered into an agreement with Minolta Corporation to
market and distributes the Minolta Payfax machine. By Agreement dated May 3,
1993, the Company and Minolta Corporation terminated the agreement. The
agreement provided for payments to the Company aggregating CD$600,000 including
the re-purchase of equipment.
In 1994, the Company entered into an agreement to purchase certain casino
properties in Central City, Colorado, and advanced $662,510. The terms provided
for a 4% equity interest in the project. The Company received from the Vendor,
One Eye, LLC, GCDC Limited Partnership and their officers, members and agents,
Jim McClay, Charles Callaway, Jon Telleen and Richard M. Greene, a convertible
Promissory Note for $683,000 payable on demand after April 8, 1996 with interest
at 8%. The Note was convertible into an additional 6% interest in the project.
The operator abandoned the project and the company has written off its
investment.
In February 1994, the Company submitted a proposal to the Ontario Government to
establish the initial First Nation Casino on native lands in the Province of
Ontario. The Government repudiated this participation in November 1994. The
Company in April 2002 filed an amended statement of claim for costs against the
Province of Ontario as well as the Ontario Casino Corporation in the amount of
$825,000 and $10,000,000 in punitive damages. BioForest's position is that it
was allowed participation in the process, being in compliance with the agreed to
objectives, criteria and guidelines. The company claims the Government acted in
bad faith and abused the process by repudiating the participation of gaming
management companies.
In November 1995, the Company entered into an agreement to acquire a 25%
interest in a Venezuelan gaming entertainment centre. The agreement provided the
Company would provide not less than $1,618,800 for development of the project.
The agreement provided that 80% of the operating profit would be applied to
repayment of capital advanced by the Company.
Pursuant to an agreement dated December 30, 1996, the Company acquired a further
21.85% interest in the Venezuelan project, valued at $3,033,675. The
consideration was through the issuance of 1,091,250 units comprising one (1)
common share and one (1) Series "A" Warrant. The Warrant entitled the holder to
purchase one (1) common share for CDN$2.78 per share and to receive one (1)
Series "B" Warrant. Each Series "B" Warrant entitled the holder to purchase one
(1) common share for $3.34 per share. The warrants expired on March 21, 1998.
The lease of the Forum Entertainment and Gaming Centre was terminated by the
landlord as a result of a new federal law, which was enacted in Venezuela in
July 1997, which prohibited the operation of any gaming related facilities or
organizations without a license from the federal government. The facility
operated by Castello had been operating under municipal license until that point
in time. The federal law superceded all local and municipal licenses and
terminated all gaming operations in the country. As a result of the termination
of the lease of the Company's facility in Los Teques, Venezuela and the seizure
of its equipment by a creditor, the Company has written off its investment of
$5,648,857 in the project.
On December 28, 2000, shareholders approved the acquisition of BFI a private
corporation. (See page 4)
ITEM 2. DESCRIPTION OF PROPERTY
The Company maintains corporate headquarters in Toronto, Ontario, Canada. The
space consists of 225 square feet and is leased on a monthly basis.
12
ITEM 3. LEGAL PROCEEDINGS
On June 9, 2000, the company was also served a Statement of Claim on behalf of
Beach Tree Trust of Nassau, a company associated with Mr. Fox, a former
director. The Claim is an amount of US $1,135, 234 and 594,999 pre-consolidated
shares of Castello. Beach Tree claims that various sums of money were paid to
Castello to finance a gaming facility in Venezuela. Ross McGroarty, the Chairman
of Castello, has also been named as a defendant. Management is of the opinion
that the claim is without merit and is defending the claim. Bioforest has
initiated a motion for Security of Costs.
In February 1994, the Company submitted a proposal to the Ontario Government to
establish the initial First Nation Casino on native lands in the Province of
Ontario. The Government repudiated this participation in November 1994. The
Company (Plaintiff) filed a claim in the Ontario Court (General Division)
against the Province of Ontario (Defendant) in June 1995 in the amount of
$825,000 and punitive damages in the amount of $10,000,000. Castello's position
is that it was allowed participation in the process, being in compliance with
the agreed to objectives, criteria and guidelines. In April 2002, the claim was
amended to include the Ontario Casino Corporation. Castello claims the
Government acted in bad faith and abused the process by repudiating the
participation of gaming management companies.
The defendant denies that the plaintiff is entitled to the relief claimed and
denies the allegations of the statement of claim. Examination of Discovery has
been completed and Bioforest will make application for a trial date.
ITEM 4. CONTROL OF REGISTRANT
BioForest Pacific, Inc. is not directly or indirectly owned or controlled by
another corporation. To the knowledge of the directors and senior officers of
the Company, no person or corporation beneficially owns, directly or indirectly,
or exercises control or direction over, voting shares of the company carrying
more than 10% of the voting rights attached to any class of voting securities of
the Company except as follows:
TITLE OF CLASS IDENTITY OF PERSON OR GROUP AMOUNT OWNED PERCENT OF CLASS
Common shares All officers and directors
As a group 2,190,085 .052%
Ross McGroarty holds 454,962 shares and David L. Hynes holds 35,714 shares.
The following held more than 10% as of December 31, 2002.
Pacific Rim Mining P/L 10,200,671 24.2%
Win bloom Holdings Ltd 6,000,000 14.2%
On the same date Mr. E. Stoddart a director held the following indirect
interests: 50% of Consol Trading Corporation Ltd., which holds 529,400 BIFP
common shares and 100% interest in Tavan Finance Corporation Ltd., which holds
434,709 BIFP common shares. Also, Mr. G. Hill owns a 100% interest in Pelmy
Limited representing 1,000,000 BIFP common shares.
ITEM 5. NATURE OF TRADING MARKET
The common shares are quoted on the OTC Bulletin Board. The table below
indicates the high and low sales prices for common shares in U.S. Dollars as
reported on the OTC Bulletin Board for each full fiscal quarter of the Company
since the last quarter of fiscal year 2000.
High Low
---- ---
Quarter ended December 31, 2000 0.15 0.05
Quarter ended March 31, 2001 1.75 0.56
Quarter ended June 30, 2001 0.75 0.53
Quarter ended September 30, 2001 0.65 0.23
Quarter ended December 31, 2001 0.22 0.07
Quarter ended March 31, 2002 0.10 0.07
Quarter ended June 30, 2002 0.08 0.03
Quarter ended September 30, 2002 0.07 0.02
Quarter ended December 31, 2002 0.03 0.02
* 1-14 shares consolidation, January 3, 2001
13
DEMOGRAPHICS OF SHARE DISTRIBUTION
On December 31, 2002, 2,128,989 of the outstanding common shares were held by
persons with United States addresses in twenty-four (24) states. Shareholder
distribution in countries other than the United States totaled 40,036,761common
shares, of which 37,622,863 are restricted securities. The demographics of the
share distribution are as follows: Australia 3,669,829; Bahamas 5,798,500;
Bermuda 1,750,000; Canada 1,821,428; Fiji 11,481,000; Hong Kong 10,200,671;
Ireland 2,900,363.
The Company's common stock is a penny stock as defined by Rule 3a 51-1 of the
Securities Exchange Act 1934 and is subject to penny stock rules which impose
additional sales practice requirements on broker-dealers who sell such
securities to persons other than established customers and accredited investors,
generally institutions with assets in excess of $5,000,000 or individuals with
net worth in excess of $1,000,000 or annual income exceeding $200,000 or
$300,000 jointly with their spouse. For transactions covered by the rule, the
broker-dealer must make a special suitability determination for the purchaser
and transaction prior to the sale. Consequently, the rule may affect the ability
of broker-dealers to sell the Company's securities and also may affect the
ability of purchasers of BioForest stock to sell their shares in the secondary
market.
ITEM 6. EXCHANGE CONTROLS AND OTHER LIMITATIONS AFFECTING SECURITY HOLDERS
As of the date of this Registration Statement, there are no governmental laws,
decrees or regulations in Canada that restrict the export or import of capital,
including, but not limited to, foreign exchange controls, or that affect the
remittance of dividends or other payments to nonresident holders of Common
shares.
There are no limitations as to the securities to be registered on the right of
non-resident or foreign owners to hold or vote such securities imposed by
foreign law or by the charter or other constituent document of the registrant.
ITEM 7. TAXATION
The following is a summary of the Canadian federal income tax provisions
applicable to United States corporations, citizens, and resident alien
individuals purchasing, holding and disposing of Common shares. The discussion
does not purport to deal with all aspects of Canadian federal taxation that may
be relevant to shareholders, including those subject to special treatment under
the income tax laws; however, this discussion covers all material tax
consequences. Shareholders are advised to consult their own tax advisers
regarding the Canadian federal income tax consequences of holding and disposing
of the Company's Common shares, as well as any consequences arising under U.S.
federal, state or local tax laws or tax laws of other jurisdictions outside the
United States. The summary is based on the assumption that, for Canadian tax
purposes, the purchasers or shareholders (I) deal at arm's length with the
Company, (ii) are not residents of Canada, (iii) hold the Common shares as
capital property, and (iv) do not use or hold Common shares in, or in the course
of, carrying on business in Canada (a "Non-Resident Holder").
Dividends paid or credited on the Common shares to a non-resident holder will be
subject to a non-resident withholding tax under the Income Tax Act (Canada) at
the rate of 25%, although such rate may be reduced under the provisions of an
applicable income tax treaty. For this purpose, dividends will include amounts
paid by the Company in excess of the paid-up capital of the Common shares on
redemption or a purchase for cancellation of such shares by the Company (other
than purchases on the open market). Under the Canada-United States Income Tax
Convention, 1980 (the "Tax Treaty") the rate is generally reduced to 15% for
dividends paid to a person who is a US resident. Dividends paid to US
corporations owning at least 10% of
14
the voting stock of the Company are subject to a withholding tax rate of 5%
under the Tax Treaty as amended by the Protocol signed on March 17, 1995. Other
applicable tax treaties may reduce the 25% Canadian tax rate for other
Non-Resident Holders.
A Non-Resident Holder generally will not be subject to tax in Canada on capital
gains realized from disposition of Common shares, unless such shares are
"taxable Canadian property" within the meaning of the Income Tax Act (Canada).
Generally, the Common shares would not be taxable Canadian property unless the
Non-Resident Holder, together with related parties, at any time during the five
years prior to the disposition of the Common shares owned not less than 25% of
the issued shares of any class of the capital stock of the Company. Under the
Treaty, a resident of the United States will not be subject to tax under the
Income Tax Act (Canada) in respect of gains realized on the sale of Common
shares which constitute "taxable Canadian property, provided that the value of
the Common shares at the time of disposition is not derived principally from
real property located in Canada. This summary is not exhaustive of all possible
income tax considerations and shareholders and prospective purchasers are
advised to consult with their own tax advisors with respect to their particular
circumstances. The Canadian Tax Act on dividends to U.S. residents is a 15%
withholding tax.
ITEM 8. SELECTED FINANCIAL DATA
The following selected historical consolidated financial data of the Company for
the five years ended December 31, 2002 has been derived from the Audited
Financial Statements of the Company, which are expressed in Canadian currency.
The information set forth below should be read in conjunction with Item 9 -
Management's Discussion and Analysis of Financial Condition and Results of
Operations, and the Consolidated Financial Statements of the Company including
the notes thereto, included in Item 17 of this Registration Statement.
Year Ended December 31
1998 1999 2000 2001 2002
Operating Revenue $ 8,508 $ 33,231 $ 38,794 $ 7,021 $ 0,000
Operating Loss 123,780 349,931 351,492 1,102,213 1,258,583
Net Loss per Share 0.01 0.03 0.03 0.03 0.03
Total Assets 34,282 12,834 808,409 1,457,895 305,711
Long-Term Obligations None None None None None
Redeemable Preferred Shares None None None None None
Dividends None None None None None
..1998
"Income" was the gain on sale of an investment. In total "income" would be a
better description than "revenue".
1999
"Income" was a gain on sale of an investment.
2000
"Income" was interest income on funds on deposit to finance further activities.
Principal funding arose from the issue of a U.S.$560,000 8% convertible
debenture due June 30, 2001.
2001
Income resulted from interest from funds on deposit. The Company has experienced
no changes in accounting
15
procedures over the last five years. There has been no change in accounting,
business combinations or dispositions of business operations that would
materially affect the comparability of the information reflected in the selected
financial data
2002
The Company received no income during the period. The Company did not experience
any changes in accounting procedures over the last five years. Advances of
$ 984,760 to Bioforest Holdings (Fiji) Ltd., a subsidiary of Bioforest
Investments Inc. were written off as uncollectable.
EXCHANGE RATE DATA
The following table discloses, for the years indicated, the high, low, end of
year and average for year noon buying rates in New York City for cable transfers
in Canadian Dollars certified for customs purposes, by the Federal Reserve Bank
of New York, as expressed in U.S. Dollars.
1998 1999 2000 2001 2002
High for year 1.5450 1.5465 1.5632 1.6097 1.6184
Low for year 1.4163 1.4447 1.4378 1.5032 1.5029
End of year 1.5422 1.4519 1.5035 1.5908 1.5776
Average for year 1.4831 1.4849 1.5005 1.5484 1.5704
ITEM 9. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion and analysis of the results of operations of the
Company should be read in conjunction with Item 8 - Selected Financial Data and
the Financial Statements of the Company, and the notes thereto, included
elsewhere in this Registration statement.
The Company has experienced no changes in accounting procedures over the last
five years. There has been no change in accounting, business combinations or
dispositions of business operations that would materially affect the
comparability of the information reflected in the selected financial data.
The Company has suffered substantial losses in the last six-year period, wherein
the Company has experienced a write-down of assets.
The following is a comparative analysis of the results of operations for 2002
vs. 2001:
2001 2002
------------- -----------
Operating revenue $ 7,021 $ 0,000
Costs and expenses 1,109,234 273,823
Operating loss 1,102,213 273,823
NET LOSS $ 1,102,213 $ 273,823
============= ===========
In 2002, the Company received no income. The operating loss of $273,283 in year
2002 represented a decrease of $ 828,930 or 75% from the 2001 loss. The decrease
in the 2002 loss reflects the decrease in fees, travel and promotion expenses of
$ 849,322. Interest payable increased $21,148. Administration and general
expenses increased by $1,424. The administration and general expenses included
general costs, audit, accounting, legal fees, and transfer fees and shareholder
information costs. These decreases reflect a reduction in business activity
relating to the Fiji timber project and Bioforest Investment Inc.
16
LIQUIDITY
Supplementary disclosure of non-cash investing and financial activities:
During the 2001 year, the Company issued 2,063,838 shares in settlement of
$1,620,734 in debt to a related party, 287,256 shares in settlement of $264,183
of the convertible debenture, 2,000,000 shares for consulting, legal and other
services of $917,949 and 36,723,050 shares for an investment in a related
company valued at $1. In 2001, cash flow was financed by the issuance of shares
for $2,802,858 relating to directors options, debt payment and a shareholder
loan of $938,216.
During 2002 there were no financings and no income.
The following is a comparative analysis of the changes in cash position for 2002
vs. 2001:
2001 2002
----------- -----------
Cash resources provided by (used in):
Operating activities $ (192,670) $ (160,863)
Financing activities 840,912 --
Investing activities (557,036) (409,645)
----------- -----------
(Decrease)/Increase in cash $ 91,206 $ (570,508)
=========== ===========
..In 2001, financing was obtained from a shareholder loan of $938,216 and the
issuance of shares for $2,802,858 relating to debt payment and directors
options.
The continuation as a going concern is dependant on the continued support from
the Company's investors and on achieving a source of income. Management is
pursuing other business opportunities and is confident in its ability to provide
capital to effect a successful turnaround for the Company.
The Company has been able, in the past, to raise funds for the acquisition,
participation or development of business opportunities. While past ability does
not assure future success, the Company believes that it will be able to
re-capitalize itself. The Company maintains significant contacts in the U.S.,
Canada, Europe and other areas with the belief that it will benefit from its
experience in securing the required capital to ensure the continuance of the
Company as a viable entity.
Any recently issued changes in accounting standards will have little if any
impact on the Company's financial statements if, as and when the standards are
adopted. This is applicable to any accounting standards issued (Canadian and
U.S.) and their impact on the Company's financial statements.
The following table illustrates the financial support from investors and
management:
Summary of issued share capital: Shares Capital
-------------------------------- ----------- ------------
Balance, December 31, 1993 4,011,339 $ 2,362,586
Private Placement 1,000,000 500,000
Exercise of stock options 358,500 143,400
Exercise of 1993 private placement warrants 225,000 112,500
Exercise of 1994 private placement warrants 175,000 105,000
Balance, December 31, 1994 5,769,839 $ 3,223,486
Private placement 11,378,842 2,275,769
Exercise of stock options 764,000 114,600
Exercise of stock options 425,000 63,750
Balance, December 31, 1996 18,337,681 $ 5,677,605
*Balance, December 31, 1996 4,584,420 $ 5,677,605
17
Debt settlement 806,125 703,509
Investment in Venezuela Casino project 1,091,250 2,991,335
Consulting, legal and other services 3,843,850 1,095,056
Exercise of stock options 500,000 110,000
Balance, December 31, 1997 and 1998 10,825,645 $ 10,577,605
Consulting, legal and other services 2,225,000 129,807
Related party loan 900,000 52,506
Balance, December 31, 1999 13,950,645 $ 10,759,818
Directors Options 1,000,000 88,620
Conversion of debenture debt to shares
Principal 370,370 75,175
Accrued Interest 11,202 2,268
Balance, December 31, 2000 15,332,217 $ 10,925,881
January 8, 2001 - one new share for 14 old shares 1,095,158 $ 10,925,881
Conversion of debenture debt to shares
Principal 277,992 253,762
Accrued interest 9,265 10,421
Bioforest Investments Inc. 36,723,050 1
Related party loan 2,063,838 1,620,734
Consulting, legal and other services 2,000,000 917,940
----------- ------------
Balance, December 31, 2001 42,169,302 13,728,739
=========== ============
*(1-4 Share Consolidation)
Ross McGroarty, Chairman of the Company, is committed to financially support the
Company, within reason, until such time that the Company implements a vailable
business plan.
ITEM 9A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not Applicable.
ITEM 10. DIRECTORS AND OFFICERS OF THE REGISTRANT
The Directors and Executive Officers of the Company as at December 31, 2002 are
set forth below:
Name Age Position Citizenship Shares Held
- -------------- --- ------------------- ----------- -----------
Ross McGroarty 64 Chairman/Secretary Canadian 454,962
David L. Hynes 57 President, Director Canadian 35,714
George E. Mara 54 Director Canadian NIL
Greig Hill 42 Director Fijian NIL*
Ewan Stoddart 37 Director Australian NIL**
Ross McGroarty has served as Chairman and Director of the Company since June
1991. He was an officer and a director of Ontex Resources Limited from March
1988 to September 1999 and Micromem Technologies Inc. (formerly Avanticorp
International Inc.) from September 1987 to June 2000. Both Ontex and Micromem
are reporting issuers.
David L. Hynes has served as President and a Director of the Company since April
2000. Mr. Hynes has been a lawyer for several years.
George E. Mara, a businessman, has served as a Director of the Company since
August 2000.
18
Greig Hill, the project manager of BioForest Investments Inc. has served as a
Director of the Company since December 2000. Mr. Hill has an indirect interest
through his 100% interest in Pelmy Limited, a Fijian company holding 1,000,000
post-consolidated common shares.*
Ewan Stoddart, a chartered accountant, has served as a Director of the Company
since December 2000. Indirectly, Mr. E. Stoddart has an indirect interest in the
following post-consolidated shares: Consol Trading Corporation Ltd., 50%
representing 529,400 Bioforest shares and a 100% interest in Tavan Finance
Corporation Ltd., representing 434,709 BFI shares.**
There are no arrangements or understandings between any director and any other
person pursuant to which the director was selected as a director or executive
officer. There is no family relationship between any director or executive
officer and any other director or executive officer.
STATEMENT OF CORPORATE GOVERNANCE PRACTICES
The Corporation's Board of Directors is charged with developing and
monitoring the Corporation's governance practices. The following statement
reflects the corporate governance practices and policies that the
Corporation has either adopted or it is considering adopting. The
Corporation believes that the steps it has taken to date represent an
appropriate approach to corporate governance and is pleased to make the
following disclosure regarding its corporate practices.
BOARD RESPONSIBILITIES AND COMPOSITION
The Board is responsible for the supervision of the management of the
Corporation and for approving the overall direction of the Corporation, in
a manner, which is in the best interests of the Corporation. The Board has
explicitly confirmed its stewardship responsibility for reviewing and
approving the Corporation's strategy, and for implementing, or requiring
management to implement, procedures and systems for: (1) adopting a
strategic planning process; (2) communications policy; and (5) adopting
internal control and management information systems.
The Board participates fully in assessing and approving strategic plans and
prospective decisions proposed by management. To ensure that the principal
business risks that are borne by the Corporation are appropriate, the Board
regularly monitors the financial performance of the Corporation's
individual units. This monitoring function often entails review and comment
by the Board on various management reports. The Board, directly and through
its Audit Committee, assesses the integrity of the Corporation's internal
control and management information systems. In respect of senior management
succession planning, the Board has been involved in identifying candidates
from within and outside the Corporation to fill senior management
positions, as required. As a practice, the Board approves significant
corporate communications with shareholders.
There were six formal meetings of the Board last year while several matters
of business were dealt with by telephone and by written resolution of the
directors. Frequency of meetings, and the nature of agenda items change,
depending upon the state of the Corporation's affairs, in light of
opportunities or risks, which the Corporation faces from time to time.
The Board is currently composed of five members. Of the current Board
members, Mr. Mara is considered by the board to be an "unrelated director",
as in "free from any interest and any business or other relationship which
would, or could reasonably perceived to, materially interfere with the
director's ability to act with a view to the best interests of the
Corporation, other than interests and relationships arising from
shareholding." The other four members, Messer's Hynes, McGroarty, Stoddart
and Hill are related within the meaning of the Guidelines. In deciding
whether a particular director is or is not a "related director", the Board
examined the factual circumstances of each director.
The Board believes that all of its directors made a valuable contribution
to the Corporation. A number of the directors, although not "unrelated
directors", possess an extensive knowledge of the Corporation's business,
which has proven to be beneficial to the Board, and their participation as
directors contributes to the effectiveness of the Board. The Board also
believes that the directors are sensitive to conflicts of interest and will
excuse themselves from deliberations and voting in appropriate
circumstances.
19
BOARD FUNCTIONING AND INDEPENDENCE
The Board has no formal policy with respect to which matters, other than
those required by statute, must be brought by the President of the
Corporation or other senior management to the Board for approval, however,
there is a clear understanding between senior management and the Board that
all major strategic decisions including any change in the strategic
direction of the Corporation and acquisitions and/or divestitures of a
material nature, will be presented by management to the Board for approval.
As part of its ongoing activity, the Board regularly receives and comments
upon reports of management as to the performances of the Corporation's
business and managements expectations and planned actions in respect
thereto.
Mr. Ross McGroarty is the Chairman of the Board of the Corporation; Mr.
David L. Hynes is the President of the Corporation. All directors are
expected to exercise critical judgement at all times and the outside
directors have unrestricted, direct access to both Corporation executives
and the external auditor.
In order to assist the Board to discharge its responsibilities, the Board
is committed to continuing to examine and develop the processes which it
follows in its deliberations for ensuring that the Board continues to
fulfill its mandate.
The Board has developed a formal position description for the President,
which includes development of a strategic plan for the Corporation and the
general management of all aspects and affairs of the Corporation, including
overseeing the financial management of the Corporation and the
Corporation's compliance with all applicable regulatory requirements. In
addition, the Board and the President engage in regular dialogue regarding
achieving the Corporation's strategic objectives as determined by
management and the Board.
The Board has not met without management present. If the Board believed it
was appropriate and meaningful, it would have formalized the process by
which the Board would meet without management and for handling the Board's
overall relationship with management.
BOARD COMMITTEES
The Board has an Audit Committee and a Compensation Committee. As and when
required, ad hoc committees of the Board will be appointed. As the Board
has plenary power, responsibility, which is not delegated, to management or
a Board committee remains with the Board.
With respect to individual members of the Board, no situation has arisen to
date in which an individual member of the Board has expressed an interest
in retaining, or has actually retained, an outside advisor at the expense
of the Corporation. The Board would consider any such request by an
individual member of the Board on its merits at the time it was made.
AUDIT COMMITTEE
The Audit Committee is composed of three directors, Messrs Hynes, McGroarty and
Mara. Mr. Mara is also an outside director. The Audit Committee is responsible
for the integrity of the Corporation's internal accounting and control systems.
The Committee receives and reviews the financial statements of the Corporation
and makes recommendations thereon to the Board prior to their approval by the
full Board. The Audit Committee communicates directly with the Corporation's
external auditors in order to discuss audit and related matters wherever
appropriate.
COMPENSATION COMMITTEE
The Board's Compensation Committee is composed of two directors, Messrs Hynes
and Mara. Mr. Mara is an outside director. The Committee reviews and approves
significant human resources policies. The Committee also develops and
articulates the corporate compensation philosophy and reviews and approves stock
options and executive compensation, including incentive plans, compensation
policies and changes.
NOMINATING COMMITTEE
The Board does not have a nominating committee. All members of the Board are
encouraged to bring forward their recommendations for nominees for election
thereto. Nominations are made after extensive discussion involving the President
and other members of the Board.
20
SHAREHOLDER COMMUNICATIONS
The Corporation endeavors to keep all shareholders well informed as to financial
performance of the Corporation, primarily by means of its annual and quarterly
reports.
With the approval of the Board, management has appointed Mr. David L. Hynes,
President of the Corporation, and Mr. Ross McGroarty, Chairman of the
Corporation. They are the principal individuals responsible for receiving
shareholder enquiries and addressing shareholder concerns. While being guided by
regulatory requirements and the Corporation's policies in respect to
confidentiality and disclosure, Messrs. Hynes and McGroarty are available for
interviews by stakeholders, including analysts, the media and investors. They
endeavour to respond promptly and appropriately to all such requests and/or
inquiries.
ITEM 11. COMPENSATION OF DIRECTORS AND OFFICERS
The aggregate amount of compensation paid by the Company and its subsidiaries
during the Company's last fiscal year to all directors and officers, as a group
for services in all capacities was nil.
ITEM 12. OPTIONS AND WARRANTS TO PURCHASE SECURITIES FROM REGISTRANT
NIL. There were no options exercised in 2002. At a Shareholder's Meeting on
December 12, 2002, the approval of the creation of a new director's, senior
officer's and key employee's incentive stock option plan was approved.
ITEM 13. INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS
During the past three years, there have been no material transactions in which
the Company or any of its subsidiaries was a party and in which any director or
officer of the Company had a direct or indirect material interest. During the
last three years, no officer or director or any of their associates have been
indebted to the Company.
PART II
ITEM 14. DESCRIPTION OF SECURITIES TO BE REGISTERED
(Not Applicable)
PART III
ITEM 15. DEFAULTS UPON SENIOR SECURITIES
None, there are no senior securities.
ITEM 16. CHANGES IN SECURITIES AND CHANGES IN SECURITY FOR REGISTERED
SECURITIES
There are no changes in securities and there are no changes in security for
registered securities.
21
PART IV
ITEM 17. FINANCIAL STATEMENTS
The financial statements are audited in accordance with auditing standards
generally accepted in the United States of America.
ITEM 18. FINANCIAL STATEMENTS
Not Applicable.
ITEM 19. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements: A - 1
See the Index to Financial Statements on page A-1 of the financial
statements filed as part of this Registration Statement as Attachment
"A:" hereto for year ending: December 31, 2002 with comparative
financial statements for 2001.
Exhibits: The following exhibits are filed as part of this registration
statement as Attachment "B" hereto.
Certified Shareholder List - December 31, 2002 B - 1
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant certifies that it meets all of the
requirements for filing on Form 20-F and has duly caused this annual
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
BIOFOREST PACIFIC, INC.
By: /s/ Ross McGroarty (signed)
--------------------
Ross McGroarty, Chairman
Dated this 17th day of April, 2003
22
ATTACHMENT "A"
BIOFOREST PACIFIC, INC.
INDEX TO FINANCIAL STATEMENTS
YEAR ENDING DECEMBER 31, 2002
Auditor's Report, Balance Sheets, Statements of Operation
& Deficit, Statement of Changes in
Cash Position and Notes to Financial Statements A-1
with comparative figures.
23
BIOFOREST PACIFIC INC.
FINANCIAL STATEMENTS
DECEMBER 31, 2002
24
INDEPENDENT AUDITOR'S REPORT
To the shareholders,
Bioforest Pacific Inc.
I have audited the balance sheets of Bioforest Pacific Inc. (an
Ontario, Canada corporation) as at December 31, 2002 and 2001 and the statements
of operations and deficit and cash flows for the years then ended. These
financial statements are the responsibility of the Company's management. My
responsibility is to express an opinion on these financial statements based on
my audits.
I conducted my audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that I 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. I believe that my audit provides a reasonable
basis for my opinion.
In my opinion, these financial statements referred to above present
fairly, in all material respects, the financial position of Bioforest Pacific
Inc. as at December 31, 2002 and 2001 and the results of its operations and cash
flows for the years then ended in accordance with accounting principles
generally accepted in the United States of America.
Toronto, Canada
March 12, 2003. John E. Goodwin
25
BIOFOREST PACIFIC INC.
BALANCE SHEETS
December 31,
2002 2001
Current assets
Cash $ 66,844 $ 637,352
Accounts receivable 1,845 7,202
--------------- --------------
68,689 644,554
Investments (note 2) 233,808 -
Investment in related company
Acquisition cost 1 1
Advances (note 8) - 813,340
Capital assets (note 3) 3,213 -
--------------- --------------
$ 305,711 $ 1,457,895
=============== ==============
LIABILITIES
Current liabilities
Accounts payable $ 4,200 $ 16,182
Convertible debenture (note 4) 1,015,556 938,216
Convertible debenture (note 5) 617,746 576,705
--------------- --------------
1,637,502 1,531,103
--------------- --------------
CAPITAL DEFICIENCY
Share capital (note 6)
Authorized
Unlimited number of common shares
Issued
42,169,302 shares 13,728,739 13,728,739
Deficit (15,060,530) (13,801,947)
--------------- --------------
(1,331,791) (73,208)
--------------- --------------
$ 305,711 $ 1,457,895
=============== ==============
Approved by the Board: David L. Hynes, Director (signed)
Ross McGroarty, Director (signed)
26
BIOFOREST PACIFIC INC.
STATEMENTS OF OPERATIONS AND DEFICIT
Years ended
December 31,
2002 2001
Revenue
Interest $ - $ 7,021
--------------- --------------
Costs and expenses
Administration and general 105,383 103,959
Legal fees 47,529 57,394
Consulting fees, travel and promotion 1,281 850,603
Amortization of capital assets 1,204 -
Interest 118,426 97,278
--------------- --------------
273,823 1,109,234
--------------- --------------
Operating loss 273,823 1,102,213
Advances to a related company written off 984,760 -
--------------- --------------
Net loss 1,258,583 1,102,213
Deficit, beginning of the year 13,801,947 12,699,734
--------------- --------------
Deficit, end of the year $ 15,060,530 $ 13,801,947
=============== ==============
Net loss per share $ 0.03 $ 0.03
=============== ==============
BIOFOREST PACIFIC INC.
STATEMENTS OF CASH FLOWS
Years ended
December 31,
2002 2001
Cash resources provided by (used in)
Operating activities
Operating loss $ (273,823) $ (1,102,213)
Items not involving cash
Amortization 1,204 -
Expenses settled by issue of shares - 917,940
--------------- --------------
(272,619) (184,273)
Change in non-cash working capital balances
(Increase) decrease in accounts receivable 5,357 (1,243)
Decrease in accounts payable (11,982) (114,711)
Increase in convertible debentures 118,381 81,147
Increase in related party loan - 26,410
--------------- --------------
(160,863) (192,670)
--------------- --------------
Financing activities
Demand notes - 914,906
Director loans repaid - (73,994)
--------------- --------------
- 840,912
--------------- --------------
Investing activities
Investments (233,808) -
Capital assets (4,417) -
Advances to a related company (171,420) (557,036)
--------------- --------------
(409,645) (557,036)
--------------- --------------
Increase (decrease) in cash (570,508) 91,206
Cash, beginning of the year 637,352 546,146
--------------- --------------
Cash, end of the year $ 66,844 $ 637,352
=============== ==============
27
Supplementary disclosure of non-cash investing and financing activities:
. During the 2001 year, the Company issued 2,063,838 shares in
settlement of $1,620,734 in debt to a related party, 287,256 shares in
settlement of $264,183 of the convertible debenture, 2,000,000 shares
for consulting, legal and other services of $917,940 and 36,723,050
shares for an investment in a related company valued at $1.
BIOFOREST PACIFIC INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002
1. Accounting policies
a) The financial statements have been prepared in accordance with
generally accepted accounting principles in Canada as promulgated by
The Canadian Institute of Chartered Accountants.
b) These financial statements have been prepared on the basis of
generally accepted accounting principles as applicable to a going
concern. The Company has suffered substantial losses. The continuation
as a going concern is dependent on the continued support from the
Company's investors and on achieving a source of income.
2. Investments
At December 31, 2002, the Company holds 635,500 shares of Ontex Resources
Limited, a Canadian public company. The investment is carried at cost.
28
3. Capital assets
Accumulated Carrying
Cost Amortization Value
Computer equipment $ 3,640 $ 1,049 $ 2,591
Office equipment 777 155 622
------------ ------------ -----------
$ 4,417 $ 1,204 $ 3,213
============ ============ ===========
Amortization is provided as follows:
Computer equipment - 30% declining balance
Office equipment - 20% declining balance
4. Convertible debenture
As of January 15, 2002, demand notes dated September 6, 2001 and September
10, 2001 were replaced by an 8% convertible debenture in the amount of
U.S.$579,495 (Cdn$914,906) due on January 31, 2004. Accrued interest of
$100,650 (2001 - $23,310) is owing on the debenture.
5. Convertible debenture
The 8% convertible debenture issued on May 7, 2000 and due on June 30, 2001
was reduced in 2001 to U.S.$342,000 (Cdn$513,023) by the conversion of debt
to shares of the Company's capital. Accrued interest of $104,723 (2001 -
$63,682) is owing on the debenture.
BIOFOREST PACIFIC INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002
6. Issued share capital
a) Summary of issued share capital:
Shares Capital
Balance, December 31, 2000 15,332,217 $ 10,925,881
---------- -------------
January 8, 2001 - one new share for 14 old shares 1,095,158 10,925,881
Conversion of debenture debt to shares
Principal 276,075 253,762
Accrued interest 11,181 10,421
Bioforest Investments Inc. 36,723,050 1
Settlement of related party loan 2,063,838 1,620,734
Consulting, legal and other services 2,000,000 917,940
---------- -------------
Balance, December 31, 2001 and 2002 42,169,302 $ 13,728,739
========== =============
b) Options outstanding to Directors and Officers on a total of 1,900,000
shares at U.S. $0.04 per share
29
pre-consolidation (U.S.$0.56 - post consolidation) expired on
December 28, 2002.
7. Contingent liability
An action has been filed against the Company by Beach Tree Trust of Nassau,
Bahamas, a Company related to a former director, for U.S.$1,135,254 and
594,999 shares of the Company's shares with respect to the Company's
Venezuela operations. Management is of the opinion that the claim is
without merit and is defending the claim. Any loss which might occur as a
result of these proceedings would be charged against earnings in the year
incurred.
8. Related party transactions
Advances of $984,760 to Bioforest Holdings (Fiji) Ltd., a subsidiary of
Bioforest Investments Inc. were written off as uncollectable.
9. Income tax information
The Company estimates that it has a total of $119,000 of various classes of
resource deductions available for carryforward to apply against taxable
income of future taxation years.
Non capital losses of $5,119,000 expire over the years to 2009. The Company
also has capital losses of $8,144,000.
10. Financial instruments
The carrying value of cash, accounts receivable, accounts payable, and
the convertible debentures reflected in the balance sheet approximate their
respective fair values. The fair value of investments is assumed to
approximate the carrying value.
30
ATTACHMENT "B"
BIOFOREST PACIFIC, INC.
EXHIBITS
Certified Shareholder List - December 31, 2002 B-1
31
ATTACHMENT "B"
Shareholder Name Address 1 Address 2
AGAMETE GROUP LTD 181 UNIVERSITY AVE SUITE 2200
PATRICK ALLEN & MARIE COSTA JTWROS 13 W CREST DR
BRYAN ARMSTRONG 2717 MUNSTER BLVD
ARRUNDI PTY LTD 209 DEEPWATER LTD
ARTMIS PACIFIC LIMITED 81 MOALA ST
AUROCHS LIMITED 14 PAR- LA -VIELLE PLACE
COREY AZZALINO LOT 5 CONCESSION #8
DANIELLE AZZALINO LOT 5 CONCESSION #8
FRAN AZZALINO LOT 5 CONCESSION #8
JULIE AZZALINO LOT 5 CONCESSION #8 14TH AVE
JEREMY AZZALINO LOT 5 CONCESSION #8
WILLIAM AZZALINO LOT 5 CONCESSION #8 14TH AVE
JOHN WALKER BAILEY 81 MOALA ST
CHRISTOPHER J BALSER 1404 HIGH AVE
BARNES/TAKATA/SAKAMOTO PARTNERSHIP C/O DAVID BARNES 18 HARPER CROFT
CHRIS BEAR 116 CHAPLIN CRES
JOHN T BEARD PO BOX 1129
BELVEDERE INVESTMENTS C/O JEROME E PYFROM & CO CHARLOTTE HOUSE 2ND FLOOR
EDWARD A BEREZUK 6-1926 35 STREET SW
BERON TRADING LIMITED C/O JEROME E PYFROM & CO CHARLOTTE HOUSE 2ND FLOOR PO BOX N 3950
MIMI BIEDA CUST LEVI BIEDA UNDER THE FL UNIF TRAN MIN ACT 5555 COLLINS AVE APT 12T
GEOFFREY L BOONE 11 WEDGEFIELD DRIVE
ERIT BOROD 3333 JEAN TALON W
LAYAH BOROD 3333 JEAN TALON W
MANNY BOROD 3333 JEAN TALON W
SAM BOROD 3333 JEAN TALON W
NANCY BRETT 95 TOWNLEY CRES
ADAM BUTTIVANT 4 HALLOW CRES
LEE CAMPBELL 6613 BERTRAND AVE
GINO J CARLEO 114 W 7TH
COLIN CARROLL 197 LONDON RD W
JUNE CARROLL 197 LONDON RD W
SARAH CARROLL 197 LONDON RD W
CEDE & CO PO BOX 20 BOWLING GREEN STN
ALBERT CIARDI & ROBERTA CIARDI JT TEN 658 MALIN ROAD
PETER B CLARK 14-240 SAND KEY ESTATES DR
C DAVID COATS 5156 NE 54TH ST SEATTLE WA
HUGH V COCHRANE 103 SILVER CREEK LN
COHEN BRAME & SMITH 1700 LINCOLN ST STE 1800
COLUM CILLE FOUNDATION 50-52 PEMBROKE RD
CONSOL TRADING CORPORATION LTD LEVEL 11 CAVILL AVE
CAROLINE COOPER 50 EDENBROOK HILL
DONNA COOPER 8 LANGLEY PL
DAVID COOPER 8 LANGLEY PL
GORDON COOPER 50 EDENBROOK HILL
JENNIFER COOPER 50 EDENBROOK HILL
KEVIN COOPER 8 LANGLEY PL
MYRTLE COOPER 4 TWYFORD RD
RICHARD COOPER 400 BRUNER ROAD
CORBIN ENTERPRISES LIMITED 81 MOALA ST
ROSS COREY 81 MOALA ST
CREATIVE GAMING CONSULTANTS INC 412 LOMA DRIVE
CREATIVE GAMING 932 BURKE STREET
STAN DARLING INSURANCE INC BOX 540
SHIRLEY I DAWSON 1004 LAWRENCE AVENUE EAST 101 DON MILLS ONTARIO
Shareholder Name City State Zip Code Shares
AGAMETE GROUP LTD TORONTO ONTARIO CAN M5H 3M7 202778
PATRICK ALLEN & MARIE COSTA JTWROS CLIFTON PARK NY 12065-2719 150
BRYAN ARMSTRONG MERAUX LA 70075 9
ARRUNDI PTY LTD CASTLE HILL SYDNEY AUS 1181704
ARTMIS PACIFIC LIMITED SAMABULA SUVA FIJ 1000000
AUROCHS LIMITED HAMILTON BER HMJX 100000
COREY AZZALINO 14TH AVE MARKHAM ON CAN L3P 3J3 2
DANIELLE AZZALINO 14TH AVE MARKHAM ON CAN L3P 3J3 2
FRAN AZZALINO 14TH AVE MARKHAM ON CAN L3P 3J3 2
JULIE AZZALINO MARKHAM ON CAN L3P 3J3 2
JEREMY AZZALINO 14TH AVE MARKHAM ON CAN L3P 3J3 2
WILLIAM AZZALINO MARKHAM ON CAN L3P 3J3 2
JOHN-WALKER BAILEY SAMABULA SUVA FIJ 200000
CHRISTOPHER J BALSER METAIRIE LA 70001 5
BARNES/TAKATA/SAKAMOTO PARTNERSHIP C/O DAVID BARNES UNIONVILLE ON CAN L3R 6K9 95
CHRIS BEAR TORONTO ON CAN M5P 1A7 2
JOHN T BEARD SAGAMORE BEACH MA 2562 179
BELVEDERE INVESTMENTS C/O JEROME E PYFROM & CO NASSAU BAH 469100
EDWARD A BEREZUK CALGARY AB T3E2X3 7142
BERON TRADING LIMITED C/O JEROME E PYFROM & CO NASSAU BAH 3029400
MIMI BIEDA CUST LEVI BIEDA UNDER THE FL UNIF TRAN MIN ACT MIAMI BEACH FL 33140-2544 14
GEOFFREY L BOONE HILTON HEAD ISLAND SC 29926-2242 4
ERIT BOROD MOUNT ROYAL QUE CAN H3R 2E8 2
LAYAH BOROD MOUNT ROYAL QUE CAN H3R 2E8 2
MANNY BOROD MOUNT ROYAL QUE CAN H3R 2E8 2
SAM BOROD MOUNT ROYAL QUE CAN H3R 2E8 2
NANCY BRETT BRAMPTON ON CAN L6Z 4T1 2
ADAM BUTTIVANT REXDALE ON CAN M9W 2V9 2
LEE CAMPBELL RESEDA CA 91335 7
GINO J CARLEO PUEBLO CO 81003 18
COLIN CARROLL GUELPH ONT CAN N1H 2C5 2
JUNE CARROLL GUELPH ONT CAN N1H 2C5 2
SARAH CARROLL GUELPH ONT CAN N1H 2C5 2
CEDE & CO NEW YORK NY 10274 2537866
ALBERT CIARDI & ROBERTA CIARDI JT TEN NEWTOWN SQUARE PA 19073 9
PETER B CLARK CLEARWATER FL 34630 305
C DAVID COATS 98105-2815 ** 36
HUGH V COCHRANE NORWALK CT 06860-0001 18
COHEN BRAME & SMITH DENVER CO 80203 357
COLUM CILLE FOUNDATION DUBLIN 4 IRE FOR 2478670
CONSOL TRADING CORPORATION LTD SURFERS PARADISE AUS QLD4217 529400
CAROLINE COOPER ISLINGTON ON CAN M9A 3Z9 2
DONNA COOPER BRAMALEA BRAMPTON ON CAN L6S 3Z9 2
DAVID COOPER BRAMALEA BRAMPTON ON CAN L6S 3Z9 2
GORDON COOPER ISLINGTON ON CAN M9A 3Z9 2
JENNIFER COOPER ISLINGTON ON CAN M9A 3Z9 2
KEVIN COOPER BRAMALEA BRAMPTON ON CAN L6S 3Z9 2
MYRTLE COOPER ISLINGTON ON CAN M9A 1V7 2
RICHARD COOPER MISSISSAUGA ONTARIO CAN L4Z2CZ 2
CORBIN ENTERPRISES LIMITED SAMABULA SUVA FIJ 800000
ROSS COREY SAMABULA SUVA FIJ 100000
CREATIVE GAMING CONSULTANTS INC FLORENCE CO 81226 4059
CREATIVE GAMING WINSTON SALEM NC 27101 2232
STAN DARLING INSURANCE INC BURKS FALLS ON CAN P0A 1C0 21
SHIRLEY I DAWSON CANADA M3C1R5 357
32
Shareholder Name Address 1 Address 2
EDWARD DEBOLT 15824 BAYVIEW BLVD
DAISY DIAZ 141 HAMILTON AVE
DIR INTERNATIONAL PO BOX N10852 2 FLAMINGO CT
WILLIAM DRUMM III C/O WHITNEY NATIONAL BANK 228 ST CHARLES AVENUE
EVELYN DUNN 47 LILLOOET CRES
LARRY DUNN 47 LILLOOET CRES
EL TORO INVESTMENTS LTD C/O JEROME E PYFROM & CO CHARLOTTE HOUSE 2ND FLOOR PO BOX N 3950
EPHESUS INVESTMENTS 81 MOALA ST
ROBERT A FINK 1608 MISSOURI AVENUE
FINLAY AUSTRALIA PTY LTD 81 MOALA ST
RONALD M FONTAINE JR & JOSETTE M FONTAINE JT TEN 2208 PINNACLE DR
JERRY A FORTENBERRY & JANIS DALE FORTENBERRY JT TEN BOX 308
RICHARD A FOX SUITE 215 2185 N CALIFORNIA BLVD
JOSEPH FOX 305 MEADOWLARK RD
STEVEN R FOX C/O LASORDA GROUP INC 249 EAST OCEAN BLVD SUITE 800
ANDREW M FREMUTH 9073 ACADEMY VIEW CT
IAN GALLACHER 16 ROVERDALE COURT
BRUCE GASKIN 423 JANE AVE
GLENDALE SECURITIES INC THE EXCHANGE TOWER
GLENDALE SECURITIES INC 2 FIRST CDN PLACE
FREDERIC GONZALES JR 6004 CHATEAU LOIRI CIRCLE
CYNTHIA GOODCHILD 155 WORTH AVE
DEANNA GOODCHILD 155 WORTH AVE
SANDRA GOODCHILD 155 WORTH AVE
KEVIN GRAHAM 115 CHAPLIN CRES
CAROLYN GREATHOUSE 6628 MARIPOSA EL PASO TX
GREIG HILL IN TRUST BIOFOREST PACIFIC INC 150 YORK ST SUITE 302
GROVER INVESTMENTS PTY LTD 81 MOALA ST
EDWARD J HALL JR & ANDREA L HALL JTTEN 8837 MORRISON COURT
DANIEL C HARDIE 422 MOUNTSBERG ROAD R R #2
HECTOR M CHISHOLM & CO LIMITED C/O MCDERMID ST LAWRENCE
LEONARD HJ HUNDSCHEID CAUMERSTR 80
DAVID L HYNES C/O CASTELLO CASINO CORP 302-150 YORK ST
TONY IANNE 4800 INDIGO COURT
JOE IMBESI 2520 MARYLAND AVE
JOE IMBESI & DENIS IMBESI & CLAIRE MORRISON JT TEN 2520 MARYLAND AVE
KIRK ISENHOWER LADYHAWK FARM HWY 316 BOX 1288
STANLEY J JANKOWSKI & PHYLLIS D JANKOWSKI JTWROS 13 EVERETT AVE
GEORGE M JERKOWSKI RTE 1 BOX 24 A
JOSEPH M JERKOWSKI LISA R JERKOWSKI JTWROS 5 TALL OAKS DRIVE
WILLIS JUNG 5183 MELBOURNE ST UNIT 405 VANCOUVER B C
MARCUS KEITH RTS 4 BOX 5154
STEPHEN KILBY & LUCELENIA KILBY JTWROS 701 SW 189TH TER
KJ INVESTMENTS C/O JEROME E PYFROM & CO CHARLOTTE HOUSE 2ND FLOOR PO BOX N 3950
CALVIN J LAICHE 913 NEYREY DR
ANTHONY C LAMM 3228 SUGAR MILL RD KENNER LA
F BRUCE LAUER 3246 COUNTRY ROAD #102
GERALD LEBRETON 711 HOMESTEAD AVE
WILLIAM LEDOUX 26 ELM ST
CHARLES R LINDSTROM 3815 NORTH MULFORD ROAD
CARRIE BRIGHT LIST & JOSEPH ROBERT LIST JTWROS 5653 E IRLO BRONSON HWY
YUSEN LIU 10705 CARDINGTON WAY
JOHN W MACDONALD 12 COLONNADE RD
MARILYN MACDONALD 12 COLONNADE RD
MARILYN L MACDONALD 12 COLONNADE RD
IRVING MANDELL TTEE MANDELL FAMILY TRUST UA DTD 10/25/1994 15316 PINE ORCHARD DR APT 2C
GEO E MARA JR 44 PARK LN CIR
ERIC MASTEN & HEIDI MASTEN JTTEN 1220 WEIMER RD
Shareholder Name City State Zip Code Shares
EDWARD DEBOLT GRABILL IN 46741 89
DAISY DIAZ ELMWOOD PARK NJ 7407 43
DIR INTERNATIONAL PARADISE ISLAND NASSAU BAH 100000
WILLIAM DRUMM III NEW ORLEANS LA 70130 27
EVELYN DUNN RICHMOND HILL ON CAN L4C 5A6 2
LARRY DUNN RICHMOND HILL ON CAN L4C 5A6 2
EL TORO INVESTMENTS LTD C/O JEROME E PYFROM & CO NASSAU BAH 2000000
EPHESUS INVESTMENTS SAMABULA SUVA FIJ 100000
ROBERT A FINK KENNER LA 70062 20
FINLAY AUSTRALIA PTY LTD SAMABULA SUVA FIJ 200000
RONALD M FONTAINE JR & JOSETTE M FONTAINE JT TEN UTICA NY 13501-4218 86
JERRY A FORTENBERRY & JANIS DALE FORTENBERRY JT TEN COLUMBIA MS 39429-0308 18
RICHARD A FOX WALNUT CREEK CA 94596 109
JOSEPH FOX FLORENCE CO 81226 3214
STEVEN R FOX LONG BEACH CA 90802 20438
ANDREW M FREMUTH DAYTON OH 45458-9657 107
IAN GALLACHER UNIONVILLE MARKHAM ON CAN L3R 7K7 179
BRUCE GASKIN OSHAWA ON CAN L1J 3L6 2
GLENDALE SECURITIES INC BOX 56 130 KING ST W SUITE 720
TORONTO ON CAN M5X 1B1 2500
GLENDALE SECURITIES INC EXCHANGE TOWER SUITE 720 BOX 56
TORONTO ON CAN M5X 1B1 1786
FREDERIC GONZALES JR MANDEVILLE LA 70448 84
CYNTHIA GOODCHILD PALM BEACH FL 33480-4406 2
DEANNA GOODCHILD PALM BEACH FL 33480-4406 2
SANDRA GOODCHILD PALM BEACH FL 33480-4406 2
KEVIN GRAHAM TORONTO ON CAN M5P 1A7 2
CAROLYN GREATHOUSE USA 79912 ** 277
GREIG HILL IN TRUST TORONTO CAN M5H3S5 1750000
GROVER INVESTMENTS PTY LTD SAMABULA SUVA FIJ 1936000
EDWARD J HALL JR & ANDREA L HALL JTTEN BLOOMINGTON IN 47401 71
DANIEL C HARDIE CAMPBELLVILLE ONTARIO CAN L0P 1B0 400000
HECTOR M CHISHOLM & CO LIMITED 7 KING STREET E 2200 PH
TORONTO ON CAN M5C 1A2 14
LEONARD HJ HUNDSCHEID 6467 G M KERKRADE HOLLAND 1785
DAVID L HYNES TORONTO ONTARIO CAN M5H355 35714
TONY IANNE PUEBLO CO 81001-1055 18
JOE IMBESI BALTIMORE MD 21218-4510 581
JOE IMBESI & DENIS IMBESI & CLAIRE MORRISON JT TEN BALTIMORE MD 21218-4510 54
KIRK ISENHOWER FT MCCOY FL 32637 18
STANLEY J JANKOWSKI & PHYLLIS D JANKOWSKI JTWROS CLAYMONT DE 19703-2711 29
GEORGE M JERKOWSKI TILLSON NY 12486-9716 15
JOSEPH M JERKOWSKI LISA R JERKOWSKI JTWROS TILLSON NY 12486-9717 10
WILLIS JUNG CANADA V5R6E6 71
MARCUS KEITH ATHENS TX 75751 9
STEPHEN KILBY & LUCELENIA KILBY JTWROS PMBK PINES FL 33029-6067 251
KJ INVESTMENTS C/O JEROME E PYFROM & CO NASSAU BAH 200000
CALVIN J LAICHE METAIRIE LA 70001 3214
ANTHONY C LAMM USA 70065 ** 4
F BRUCE LAUER SAFETY HARBOR FL 34695 63
GERALD LEBRETON METAIRIE LA 70005 5
WILLIAM LEDOUX TILLSON NY 12486-1511 18
CHARLES R LINDSTROM ROCKFORD ILLINOIS 61111 18
CARRIE BRIGHT LIST & JOSEPH ROBERT LIST JTWROS ST CLOUD FL 34771 463
YUSEN LIU COCKEYSVILLE MD 21030 36
JOHN W MACDONALD WILLOWDALE ON CAN M2K 2L5 2
MARILYN MACDONALD WILLOWDALE ON CAN M2K 2L5 84
MARILYN L MACDONALD WILLOWDALE ON CAN M2K 2L5 27
IRVING MANDELL TTEE MANDELL FAMILY TRUST UA DTD 10/25/1994 SILVER SPRING MD 20906-1336 5
GEO E MARA JR NORTH YORK ONT 2
ERIC MASTEN & HEIDI MASTEN JTTEN BLOOMINGTON IN 47401 143
33
Shareholder Name Address 1 Address 2
HEIDI MASTEN & ERIC MASTEN JT TEN 1221 WEIMER RD
C BLASE MCCARTY 2508 NASHVILLE AVE
ARTHUR MCCARTHY & MARY G MCCARTHY JTWROS 23 OAK STREET
MCDERMID ST LAWRENCE SECURITIES LTD BOX 90
DEBRA MCDONALD 12 COLONNADE RD
JOHN A MCDONALD 12 COLONNADE RD
ELIZABETH MCGROARTY 35 LOWER VILLAGE GATE
JEFFREY MCGROARTY 145 CRESCENT RD
PAUL J MCGROARTY 3215 MIDLAND ROAD
RICHARD MCGROARTY 145 CRESCENT RD
ROSS J MCGROARTY 181 UNIVERSITY AVE SUITE 2200
SUZANNE MCGROARTY 3215 MIDLAND RD
STEPHEN MCGROARTY 145 CRESCENT RD
GREGORY MCGROARTY 50-52 PEMBROKE ROAD
ROSS MCGROARTY 181 UNIVERSITY AVENUE SUITE 2200
DENISE MARIE MCKENNY 12516 S BROUGHAM DRIVE
MIKE MCMAHON 917 CHAPEL HILL
BARRY MEIER 82 140 KENT ST
PRISCILLA S W MI 58 GRAMPIAN ROAD 1/F KOWLOON
FRANK MOBLEY 2916 NEYREY DR
MOHAWK MANAGEMENT LIMITED 14 PAR- LA- VIELLE PLACE AURTHUR JONES
BERNECE MORELLI 118 W 4TH ST
MOROVO INVESTMENTS LTD LEVEL 11 50 CAVILL AVE
OWEN H NICKERSON & DONNA L NICKERSON JT TEN 2221 SE TALTON AVE
MATHEW NING & MONICA NING TTEE NING SUPERANNUATION FUND 2 CLAUDE ST
RITA NITSCHKE 114 CENTRAL LANE
EDWARD C NORMAN 1209 WASHINGTON AVE
ANTHONY THOMAS NORTHCOTE 81 MOALA ST
OCEAN MARKETING CORP 2901 HILL STREET
JOSEPH D OLIVO 2167 WESTMINSTER CLEVELAND HEIGHTS OH
OSCAR CHESS PTY LTD 2 WILLOWIE RD
JOE V OVERCASH 1020 BROOKSTOWN AVE UNIT 14
TOMMY OWEN 2021 CENTERPOINT RD
GAIL A OWENS 7131 KING AUTHUR DR PORT RICHEY FL
PACIFIC RIM MINING LTD C/O PROFFESIONAL CORPORATE SERVICES 1523 PRINCES BLDG
PACIFIC TIMBER INDUSTRIES PTY LTD LEVEL 11 50 CAVILL AVENUE
ANTHONY J PARILLE 214 FOREST TRAIL DRIVE
DAVID PATHE 20 PRINCE ARTHUR AVENUE 8H
ANTHONY PEACHEY TTEE PEACHEY SUPERANNUATION FUND 12 HILLIYUP STREET
PELMY LIMITED 81 MOALA ST
ROGER D PERRY 712 SHERWOOD HILLS
SIGURDUR G PETURSSON 2169 LINBY ST
TODD STANLEY PIERCE PO BOX 23586 PAPATOETOE AUCKLAND
CHRISTOPHER M PISCIOTTA 100 SHETLAND DR
BUTLER POWELL JR 318 LAKE MARINA DR #307 NEW ORLEANS LA
FRANCO PROFETA ST TRUIDERSTRAAT 51 3700 TONGEREN
SALVATORE PROFETA ST TRUIDERSTEEENWEG 126 3700 TONGEREN
PYRAMID HOLDING INC C/O AMBER CAPITAL CORP 490 N CAUSEWAY
JAMES A RANSWEILER & DOROTHY J RANSWEILER JTWROS 4301 SHAENANDOAH
REXCO 900-609 GRANVILLE STREET BOX 10341 PACIFIC CENTRE
VANCOUVER
FLORENCE F RIDER 9840 LUNA CIRCLE
KATHY RUTTER 10 LIBERATION DR
SAND ENTERTAINMENT INC 325 MARYLAND PARKWAY S
WILLIAM J SCHAEFFER 1102 N NEW ST
WILLIAM R SCHAUM & CAROLYN M SCHAUM 3504 CHERRY BLOSSOM LN
PATSY SCHMIDER RR 1 STN MAIN
CHERYL SCHOENBERGER ROUTE 3 122 HONEYSUCKLE
ANDREA SCHONFELD 4454 VAN NUYS BLVD 210
Shareholder Name City State Zip Code Shares
HEIDI MASTEN & ERIC MASTEN JT TEN BLOOMINGTON IN 47401 71
C BLASE MCCARTY NEW ORLEANS LA 70115 2
ARTHUR MCCARTHY & MARY G MCCARTHY JTWROS CHARLESTOWN MASS US 2129 54
MCDERMID ST LAWRENCE SECURITIES LTD 1000-601 HASTINGS ST
W VANCOUVER BC CAN V6B 5E2 286
DEBRA MCDONALD WILLOWDALE ON CAN M2K 2L5 2
JOHN A MCDONALD WILLOWDALE ON CAN M2K 2L5 2
ELIZABETH MCGROARTY TORONTO ON CAN M5P 3L7 2
JEFFREY MCGROARTY TORONTO ONT 2
PAUL J MCGROARTY VICTORIA BC CAN V8R 6G3 2
RICHARD MCGROARTY TORONTO ON CAN M4W 1V1 2
ROSS J MCGROARTY TORONTO ON CAN M5H 3M7 2
SUZANNE MCGROARTY VICTORIA BC CAN V8R 6G3 2
STEPHEN MCGROARTY TORONTO ONT 2
GREGORY MCGROARTY DUBLIN 4 IRE 1600000
ROSS MCGROARTY TORONTO ONTARIO CAN M5H 3M7 35714
DENISE MARIE MCKENNY OLATHE KS 66062-5247 36
MIKE MCMAHON BOYNTON BEACH FL 33435-8112 2285
BARRY MEIER WHITBY ONTARIO CAN L1N 4X9 2
PRISCILLA S W MI HONG KONG 357
FRANK MOBLEY METAIRIE LA 70002 139
MOHAWK MANAGEMENT LIMITED HAMILTON BER HMJX 1650000
BERNECE MORELLI FLORENCE CO 81226 48
MOROVO INVESTMENTS LTD SURFERS PARADISE AUS QLD4217 255000
OWEN H NICKERSON & DONNA L NICKERSON JT TEN VANCOUVER WA 98683-6549 143
MATHEW NING & MONICA NING TTEE NING SUPERANNUATION FUND CHATSWOOD SYDNEY AUS 324632
RITA NITSCHKE SECAUCUS NJ 7094 18
EDWARD C NORMAN NEW ORLEANS LA 70130 7
ANTHONY THOMAS NORTHCOTE SAMABULA SUVA FIJ 10000
OCEAN MARKETING CORP NEW SMYRNA BEACH FL 32169 10952
JOSEPH D OLIVO 44118-2821 ** 9
OSCAR CHESS PTY LTD CASTLE COVE, NSW AUS 2069 855360
JOE V OVERCASH WINSTON-SALEM NC 27101 18
TOMMY OWEN BIRMINGHAM AL 35215 89
GAIL A OWENS 34668-3879 ** 36
PACIFIC RIM MINING LTD C/O PROFFESIONAL CORPORATE SERVICES 10 CHATER RD HKG 9 10200671
PACIFIC TIMBER INDUSTRIES PTY LTD SURFERS PARADISE AUS QLD4217 30000
ANTHONY J PARILLE OAK BROOK IL 60523 18
DAVID PATHE TORONTO ONTARIO CAN M5R1B1 23
ANTHONY PEACHEY TTEE PEACHEY SUPERANNUATION FUND WESTLAKE BRISBANE AUS 59024
PELMY LIMITED SAMABULA SUVA FIJ 1000000
ROGER D PERRY BLOOMINGTON IN 47401 143
SIGURDUR G PETURSSON MISSISSAUGA ON CAN L4Y 1V6 18
TODD STANLEY PIERCE NEW ZEALAND 1249
CHRISTOPHER M PISCIOTTA SAINT LOUIS MO 63125-3709 71
BUTLER POWELL JR USA 70124 ** 36
FRANCO PROFETA BELGIUM ** 536
SALVATORE PROFETA BELGIUM ** 536
PYRAMID HOLDING INC NEW SMYRNA BEACH FL 32169 1465
JAMES A RANSWEILER & DOROTHY J RANSWEILER JTWROS DALLAS TX 75205-2025 357
REXCO CANADA V7Y1H4 9
FLORENCE F RIDER NAPLES FL 34109-4537 22
KATHY RUTTER BRAMALEA BRAMPTON ON CAN L6S 3V9 2
SAND ENTERTAINMENT INC LAS VEGAS NV 89101 1786
WILLIAM J SCHAEFFER BETHLEHEM PA 18018-2718 71
WILLIAM R SCHAUM & CAROLYN M SCHAUM OCEAN SPRINGS MS 39564 9
PATSY SCHMIDER BRADFORD ON CAN L3Z 2A4 27
CHERYL SCHOENBERGER COVINGTON LA 70433 9
ANDREA SCHONFELD SHERMAN OAKS CA 91403-5733 36
34
Shareholder Name Address 1 Address 2
DAVID SCHWARZ 4353 BANCROFT DR
JAMES W SHUPPERD BOX 728
GERDA SMIT 302 ESSEX AVE
GENE DAVID SOLMUNDSON 633 LODGE AVENUE
FRANK SPAGNUOLA 254 LANSING DR
BELINDA STANFORD PO BOX 1444
DANIEL STARCZEWSKI C/O CREATIVE GAMING CONSULTANTS 932 BURKE ST
ADRIANE TAIT 1105-1700 THE COLLEGEWAY
JAMES TAIT 128 ALEXANDER BLVD
TAVAM FINANCE CORPORATION LTD LEVEL 11 50 CAVILL AVE
LEE TAYLOR 14 BRADBURY CRES
MARYANNE TENAGLIA 16 ROVERDALE CRT
FRUMI TENSER 1049 MCNICOLL AVE
DAVID GRAHAM THOMSON 1 THE PONDS WEYBRIDGE SURREY KT13 OJB
TREW FAMILY TRUST 1921 COLUMBIA CT
SAKIUSA TUISALEA 81 MOALA ST
TROY G TURNER 2021 PIETY STREET
VANCOUVER STOCK EXCHANGE SERVICE CORP PO BOX 10333 609 GRANVILLE ST
CINDY VANEGAS 18900 SPRINGFIELD AVE
FRANK C VOLINSKY & JOSIE VOLINSKY JTWROS 101 RAY STREET
MARK WALDRON 90 INVERARY ROAD
HERB WENZEL 650 CHILDS DR UNIT 44
WEST CANADA DEPOSITORY TRUST COMPANY -4TH FLOOR-STOCK EXCHANGE TOWER
-C/O CORPORATE SECRETARY -609 GRANVILLE STR PO BOX 10333
LCD
GENE WETZEL 2905 GOLDEN FLEECE DR PASADENA MD
MARVIN WILLENBURG 2524 W 51ST TERRACE
BRAD WILSON 82 MAITLAND ST APT 6
WIN BLOOM HOLDINGS INC 81 MOALA STREET
PAUL WINIECKI 60 FREDERICK ST
STEVE WINTER & GLORIA WINTER JTWROS 15734 E PALOMINO BLVD
GARY WOODHOUSE 81 MOALA ST
BRIAN WOODS 2273 SE 10TH STREET
MUTIAN ZHU 81 MOALA ST
Shareholder Name City State Zip Code Shares
DAVID SCHWARZ NEW ORLEANS LA 70122 7
JAMES W SHUPPERD MANTECA CA 95336-1132 4
GERDA SMIT RICHMOND HILL ON CAN L4C 7H5 9
GENE DAVID SOLMUNDSON WINNIPEG MANITOBA CAN R3J0S9 5356
FRANK SPAGNUOLA MANTUA NJ 8051 54
BELINDA STANFORD CRYSTAL RIVER FL 34423-1444 3
DANIEL STARCZEWSKI WINSTON SALEM NC 27101 521
ADRIANE TAIT MISSISSAUGA ON CAN L5L 4M2 2
JAMES TAIT TORONTO ONT CAN M3H 2P9 2
TAVAM FINANCE CORPORATION LTD SURFERS PARADISE AUS QLD4217 434709
LEE TAYLOR ETOBICOKE ON CAN M9C 4B2 2
MARYANNE TENAGLIA MARKHAM ON CAN L3R 7K7 2
FRUMI TENSER SCARBOROUGH ONT CAN M1W 3W6 2
DAVID GRAHAM THOMSON UK ** 89
TREW FAMILY TRUST TRACY CA 95876 150000
SAKIUSA TUISALEA SAMABULA SUVA FIJ 10000
TROY G TURNER NEW ORLEANS LA 70117 9
VANCOUVER STOCK EXCHANGE SERVICE CORP VANCOUVER BC CAN V7Y 1H1 11
CINDY VANEGAS FLOSSMOOR IL 6.04221E+11 99
FRANK C VOLINSKY & JOSIE VOLINSKY JTWROS OLD FORGE PA 18518-1204 18
MARK WALDRON LONDON ONTARIO CAN N6G 3L6 5
HERB WENZEL MILTON ONT CAN L9T 3N8 2
WEST CANADA DEPOSITORY TRUST COMPANY VANCOUVER BC CAN V7Y 1H1 7
GENE WETZEL 21122-6338 ** 89
MARVIN WILLENBURG WESTWOOD KS 66205 90
BRAD WILSON TORONTO ONT M4Y1E1 9
WIN BLOOM HOLDINGS INC SAMABULA SUVA FIJ NO ZI 6000000
PAUL WINIECKI BRAMPTON ON CAN L6Y 1G8 2
STEVE WINTER & GLORIA WINTER JTWROS FOUNTAIN HILLS AZ 85268 71
GARY WOODHOUSE SAMABULA SUVA FIJ 50000
BRIAN WOODS POMPANO BEACH FL 33062 36
MUTIAN ZHU SAMABULA SUVA FIJ 75000