Name of each Exchange on which registered
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20542
FORM 10-K
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended August 31, 1993
Commission File Number
0-14834
CORNWALL TIN & MINING CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction
of incorporation)
IRS Employer Identification No.
13-2627473
20 Oueen Street West, Suite 600. Toronto. Ontario, Canada M5H 3R3,
Address of principal executive offices
Registrant's telephone number including area code:
(416) 971-8611
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Common
Name of each exchange on which registered
None
Securities registered pursuant to Section 12(g) of the Act:
Title of Class
Common
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 ___
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the Registrant has filed all documents
and reports required to be filed by Sections 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of
securities under a plan confirmed by a court.
Not Applicable.
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Issued and outstanding:
2,710,800 Common Shares
DOCUMENTS INCORPORATED BY REFERENCE
Financial Statements of the Corporation for the year ended August 31,
1993, are hereby incorporated by reference.
PART I
Item 1. Business
Acquisition of H Space Technologies Inc.
H Space Technologies Inc. ("H Space") is in the business of designing and
manufacturing point of sale, promotional and corporate display systems. A
discussion with respect to H Space is set out hereafter.
Management has conditionally agreed to merge the Corporation with H Space.
The agreement is conditional on regulatory and shareholder approval. The
Corporation intends to split its existing issued and outstanding shares on
a 2:1 basis and thereafter issue 10,799.961 common treasury shares of the
Corporation to the shareholders of H Space in exchange for all of the
3.599.987 common shares issued or optioned in H Space. As part of the
merger, a private placement of up to 2,000,000 shares of the Corporation
for a consideration of $1,000,000 is planned.
Technology Profile
Utilizing a knowledge base gained over the past 20 years in the field of
fibre optics, the founders of H Space developed a unique Light Management
System, "LMS" which will allow the company to launch into two commercial
markets which are global in nature. This new "patent pending" technology
facilitates the design and manufacture of animated point of sale and
corporate identification display systems displacing aging neon signage. Low
wattage, energy efficient light is transmitted through computer generated
light/colour management system into any array of fibre optic cables which
bring to the viewer an exciting array of every changing colours and message
patterns. Prototype systems have been presented to major corporate end
users. Engineering to prepare for multiple unit manufacturing is in
process.
The Company will focus its fiscal efforts on the commercialization of fibre
optics "LMS" for the promotional, point of sale and corporate display
market. The Company's sustainable competitive advantages rest in a
combination of its technical depth in fibre optics and light transmission,
its computer based design system and its seasoned management. Following
completion of the commercialization of the above subject technology, the
company will avail itself of Canadian government research grants to bring
to market readiness equally existing fibre optic lighting systems for
"holographic" display and interior design applications.
Market Profile:
Xzotec Inc. will initially focus on two defined markets:
1. Promotional signage; and
Corporate display.
The total market is estimated to be in the range of $3 billion (U.S.). The
following is a brief overview.
Promotional Signage:
The utilization of illuminated promotion or "point of sale" signs and
displays is a well established marketing tool. Advertising budgets are
projected to increasingly focus on point of purchase where the majority of
buying decisions are made. Currently, a portion of the point of purchase
advertising budget of major corporations is committed to neon signs. Xzotec
will be positioned to capture projected budget expenditure growth by
offering major corporations enhanced, motion and colour rich sign age not
previously available. The price point will be slightly higher than neon but
this is not a barrier to entry. Test marketing and prototype work is
already underway with a number of consumer product, Fortune 500 companies.
Management believes that industries ranging from food and beverage to
footwear, computers, clothing, financial services, tobacco, automotive and
consumer electronics will be end user customers.
Corporate Display:
Most if not all Fortune 500 companies continue to invest in corporate
imagery. This market sector will be attracted to the special ability of
Xzotec Inc. to provide high profile corporate identification which is
individually unique in design but utilizes the company's standard light
management system and fibre optics. The marketplace for display systems
will range from corporate name/logo signs to interior building designs and
trade show exhibits.
Strategic Relationship:
Xzotec Inc. has benefited and will continue to derive assistance from its
special relationship with Precision Camera Inc. Founded over 15 years ago
by Mr. Gerd Kurz, an investor in and shareholder of H Space, Precision is
Canada's premiere Company in the growing field of complex video
applications. With in-house, state of the art design studios, precision
machining, optical, electronic and video testing and repair facilities,
Precision Camera has the technical capacity to design, engineer, manufacture
and install complex integrated audio/video systems.
The company is certified by Sony of Japan as a broadcast service facility
for television and motion picture equipment. Precision has engineered
systems from remote control cameras operating in nuclear reactors to the
system in Toronto's Skydome Stadium retractable roof. This relationship has
assisted management in their prototype development phase and will prove
invaluable as the company moves into full commercial production.
Management:
Management of H Space has a considerable depth of knowledge in marketing,
manufacturing, fibre optic and holographic technology. Both Michael
Miville, the firm's President and Richard Howard, the Executive Vice-
President, have previously built and sold successful companies.
Other Business:
Other than the acquisition of H Space, the Corporation has no business
activities.
Item 2. Properties:
N/A
Item 3. Legal Proceedings:
None
Item 4. Security Ownership of Certian Beneficial Owners and Management:
None
PART II
Item 5. Market for the Registrant's Common Stock and Related
Holder Matters:
None
Item 6. Selected Financial Data:
See attached information as Exhibit A.
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations:
The Board of Directors and shareholders have agreed with H Space
Technologies Inc. to approve the change of the name of the Corporation to
Xzotec Inc. to increase the capital of the Corporation to 30 million
common shares without par value to split the issued and outstanding common
shares on a 2:1 basis prior to the acquisition of H Space Technologies
Inc., to approve the acquisition of H Space Technologies Inc., to approve
the stock option plan and to approve the private placement of 2 million
treasury shares for a consideration of $1,000,000.
Item 8. Financial Statements and Supplementary Data:
Attached are financial statements for the period ending
August 31, 1993.
Item 9. Disagreements on Accounting and Financial Disclosure
None
PART III
Item 10. Directors and Executive Officers of the Registrant:
Name and Principal Present Shareholdings Shareholdings
Occupation Shareholdings After Split After
Acquisition Acquisition
Michael Miville Nil Nil 2.430,000
President, Xzotec Inc.
Richard Howard
Exec. Vice-President Nil Nil 999,999
Xzotec Inc.
Michael Mewha
C.E.O., North American Nil Nil Nil
Network Co. Inc.
Barry Brawn Nil 956,463 1,114,797 (2)
President, Assistco
Inc.
Anthony Swartz Nil Nil 3,324,960 (1)
President, Sussex
Investments Inc.
Gerd Kurz President, Nil Nil 750,000
Precision
Camera Inc.
James T. Riley 956,463 956,463 956,463
Chairman
Northquest Ventures Inc.
(1) Assumes conversion of debenture in the principal amount of $150,000.
(2) Assumes exercise of option in the amount of 158,334 shares at $1.00 per
share.
(3) The above directors have approved the acquisition of H Space Technologies
Inc.
Item 11. Executive Compensation:
None
Item 12. Security Ownership of Certain Beneficial Owners and
Management:
Mr. James T. Riley holds 936,463 shares directly.
He also is the major shareholder of Northquest Ventures Inc.
Item 13. Certain Relationships and Related Transactions
None
PART IV
Item 14. Exhibits, Financial Statement Schedules
and Reports on Form 8-K:
See attached Financial Statements.
The Corporation has no subsidiaries.
See 8-K Report previously filed.
Signatures:
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Date: October 7. 1993
CORNWALL TIN & MINING CORPORATION
Date: October 7, 1993.
"James T. Riley"
CORNWALL TIN AND MINING CORPORATION
(A Delaware Corporation)
FINANCIAL STATEMENTS
August 31, 1993 and 1992
(in U.S. dollars)
Chartered Accountants
BCE Place
181 Bay Street
Suite 1400
Toronto, Ontario
M5J 2V1
AUDITORS' REPORT
To the Shareholders of
Cornwall Tin and Mining Corporation
Telephone: (416) 601-6150
Telecopier: (416) 601-6151
We have audited the balance sheets of Cornwall Tin and Mining Corporation (A
Delaware Corporation) as at August 31, 1993 and 1992 and the statements of
loss and deficit and of changes in financial position for each of the years
then ended. These financial statements are the responsibility of the
Corporation's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform an audit to
obtain reasonable assurance whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation.
In our opinion, these financial statements present fairly, in all material
respects, the financial position of the Corporation as at August 31, 1993
and 1992 and the results of its operations and the changes in its financial
position for each of the years then ended in accordance with generally
accepted accounting principles.
"Deloitte & Touche"
Chartered Accountants
Toronto, Ontario
September 16, 1993
COMMENTS BY AUDITOR FOR U.S. READERS
ON CANADA-U.S. REPORTING CONFLICT
In the United States, reporting standards for auditors require the addition
of an explanatory paragraph when the financial statements are affected by
significant uncertainties such as that referred to in the attached balance
sheets as at August 31, 1993 and 1992 and as described in Note 1 to the
financial statements. Our report to the shareholders dated September 16,
1993 is expressed in accordance with Canadian reporting standards which do
not permit a reference to such an uncertainty in the auditor's report when
the uncertainty is adequately disclosed in the financial statements.
"Deloitte & Touche"
Chartered Accountants
Toronto, Ontario September 16, 1993
Deloitte Touche Tohmatsu International
CORNWALL TIN AND MINING CORPORATION
(A Delaware Corporation)
BALANCE SHEETS
August 31, 1993 and 1992
(in U.S. dollars)
1993 1992
ASSETS
CURRENT $168 $204
Cash
ADVANCE TO RELATED COMPANY - $43,573
(Note 3)
LIABILITY
CURRENT
Accounts payable and $1,945 $23,525
accrued liabilities
CAPITAL DEFICIENCY
Share capital
Authorized
4,000,000 common shares with
a par value of $0.01 each
Issued
2,710,800 common shares 27,108 27,108
Contributed surplus 3,039,388 3,039,388
Deficit (3,068,273) (3,046,244)
1,777 20,252
$168 $43,777
APPROVED BY THE BOARD
"Jim Riley" Director
"W Deschamps" Director
CORNWALL TIN AND MINING CORPORATION
(A Delaware Corporation)
STATEMENTS OF LOSS AND DEFICIT
Years ended August 31, 1993 and 1992
(in U.S. dollars)
1993 1992
EXPENSES
Administrative services $18,114 -
(Note 3)
Net foreign
exchange loss $1,900 $853
Legal and audit $1.895 $837
Franchise tax $100 $97
Bank charges $20 -
Transfer agent - $170
LOSS FOR THE YEAR $22,029 $1957
DEFICIT, BEGINNING OF YEAR 3.046.244 3,044,287
DEFICIT, END OF YEAR $ 3,068,273 $3,046,244
LOSS PER SHARE $ 0.0081 $0.0007
CORNWALL TIN AND MINING CORPORATION
(A Delaware Corporation)
STATEMENTS OF CHANGES IN FINANCIAL POSITION
Years ended August 31,1993 and 1992
(in U.S. dollars)
1993 1992
NET INFLOW (OUTFLOW) OF CASH
RELATED TO THE FOLLOWING
ACTIVITIES:
OPERATING
Loss for the year $(22,029) $(1,957)
Change in non-cash operating
working capital item
Accounts payable and accrued (21,580) (389)
liabilities
(43,609) (2,346)
FINANCING
Advance to related company 43,573 2,353
NET CASH (OUTFLOW) INFLOW (36) 7
CASH, BEGINNING OF YEAR 204 197
CASH, END OF YEAR $168 $204
CORNWALL TIN AND MINING CORPORATION
(A Delaware Corporation)
NOTES TO THE FINANCIAL STATEMENTS
August 31, 1993 and 1992
(in U.S. dollars)
1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION OF FINANCIAL STATEMENTS
The Corporation was incorporated under the laws of the State of Delaware on
November 1, 1968. The Corporation has ceased its former operations of Mineral
Exploration. Its charter was revived on June 2, 1992 for future undertakings.
These financial statements have been prepared on the basis of accounting
principles applicable to a going concern. Continuation of the business on this
basis is dependent upon the Corporation achieving future profitable operations
(see Note 3). There can be no assurance such operations will be successful.
2. SIGNIFICANT ACCOUNTING POLICY
The accompanying financial statements are prepared in accordance with
accounting principles generally accepted in Canada and conform in all material
respects with accounting principles generally accepted in the United States.
Foreign currency translation
Monetary assets and liabilities are translated at the effective rate of exchange
at the year end.
Foreign currency transactions occurring during the year are translated at the
effective rate of exchange on the transaction date.
3. ADVANCE TO RELATED COMPANY
The Corporation has advanced funds to Northquest Ventures Inc. (formerly The
Canadian Games Network Inc., a Canadian Company). The President of the
Corporation is also the President of Northquest Ventures Inc. During fiscal
1993, Northquest Ventures Inc. agreed to assume the liabilities of the
Corporation outstanding as at August 31, 1992 in exchange for an equal
reduction in its advance. The remaining balance of the advance was charged to
operations in exchange for services provided by Northquest Ventures Inc. up to
August 31, 1993.
4. INCOME TAXES
The Corporation has available net operating losses which may be carried forward
to be applied against future income for income tax purposes until at least the
year 2000.
CORNWALL TIN AND MINING CORPORATION
(A Delaware Corporation)
NOTES TO THE FINANCIAL STATEMENTS
August 31, 1993 and 1992
(in U.S. dollars)
SUBSEQUENT EVENTS
At the Annual Meeting of the Shareholders on September 8, 1993, the
shareholders approved a resolution by the board of directors to acquire H
Space Technologies Inc. ("H Space"), subject to regulatory approval. The
acquisition would be facilitated by issuing 10,799,961 common shares of the
Corporation in exchange for 3,599,987 common shares of H Space, being all
the issued and outstanding shares of H Space. H Space Technologies Inc. is
a corporation that has developed a unique "patent pending" technology which
facilitates the design of and manufacture of animated point of sale and
corporate identification display systems displacing aging neon signage.
Resolutions were also approved: to change the name of the Corporation to
"Xzotec Inc.," to increase the number of authorized common shares of the
Corporation to 30,000,000; to split the issued and outstanding shares of
the Corporation on the basis of two common shares of the new Corporation in
exchange for one common share previously issued prior to closing the
acquisition of H Space; and to create a stock option plan for the
Corporation's senior directors, offices, affiliates as well as key
employees and consultants to acquire shares at prices approved from time to
time by the various regulatory bodies. Articles of Amendment have not been
filed to effect these changes until the acquisition agreement with H Space
has been executed.