10-Q 1 crh10q033104.txt CANADIAN ROCKPORT HOMES 10Q, 03.31.04 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2004 [_] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from to ---------- ---------- 333-62786 ------------------------ (Commission file number) CANADIAN ROCKPORT HOMES INTERNATIONAL, INC. ----------------------------------------------------------------- (Exact name of small business issuer as specified in its charter) Delaware 98-0354610 --------------------------------- ------------------- (State or other jurisdiction (IRS Employer of incorporation or organization) Identification No.) 700 W. Bender Street, Suite 507 Vancouver, BC Canada V6C 1G8 ---------------------------------------- (Address of principal executive offices) (604) 669-1081 --------------------------- (Issuer's telephone number) ---------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) [X] Check whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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. [_] Check whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). The number of shares outstanding of each of the issuer's classes of common equity as of May 26, 2004 is 15,806,005 shares of Common Stock. Canadian Rockport Homes International, Inc. ------------------------------------------- Index ----- Page Number ------ PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Balance Sheets 3 Consolidated Statements of Operations 5 Three-Months Ended March 31, 2003 and 2004 and from the Company's inception (March 27, 1997) through March 31, 2004 Consolidated Statements of Cash Flows 6 Three-Months Ended March 31, 2003 and 2004 and from the Company's inception (March 27, 1997) through March 31, 2004 Notes to Consolidated Financial Statements 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 10 Item 3. Quantitative and Qualitative Disclosures About Market Risk 11 Item 4. Controls and Procedures 11 Part II. OTHER INFORMATION Item 1. Legal Proceedings 12 Item 2. Change in Securities and Use of Proceeds 12 Item 3. Defaults Upon Senior Securities 12 Item 4. Submission of Matters to a Vote of Security Holders 12 Item 5. Other Information 12 Item 6. Exhibits and Reports on Form 8-K 12 SIGNATURES 13 PART I. FINANCIAL INFORMATION ------------------------------- ITEM 1. Financial Statements ------------------------------

(Mark One)
[X]	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
	EXCHANGE ACT OF 1934
	For the quarterly period ended June 30, 2003
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
	For the transition period from to

The accompanying notes are an integral part of these consolidated financial statements. 4

~~333~~Canadian Rockport Homes International, Inc. (A Development Stage Company) CONSOLIDATED STATEMENTS OF OPERATIONS -~~62786~~-------------------------------------------------------------------------------------------------- From Inception (~~Commission~~March ~~file~~27, ~~number~~1997) ~~Canadian~~For ~~Rockport~~the ~~Homes~~Three ~~International~~Months Ended Through March 31, ~~Inc.~~2003 March 31, 2004 March 31, 2004 ---------------- ---------------- ---------------- (~~Exact~~Unaudited) ~~name~~(Unaudited) (Unaudited) Income $ - $ - $ - Operating Expenses General and administrative expenses (250,171) (473,631) (4,274,169) Compensation and consulting expense incurred on stock option grants - (178,747) (3,192,621) Loss on disposition of ~~small~~assets ~~business~~- ~~issuer~~- as(358,361) ~~specified~~Loss inon ~~its~~impairment ~~charter~~of goodwill - - (30,000) ---------------- ---------------- ---------------- Loss from Operations (250,171) (652,378) (7,855,151) Other Income (Expenses) Commission income 2,917 - 2,917 Interest income 111 - 4,240 Interest expense (9,714) (1,856) (59,021) ---------------- ---------------- ---------------- Net Loss $ (256,857) $ (654,234) $ (7,907,015) ================ ================ ================ Basic and Diluted Loss per Share: $ (0,02) $ (0.04) ================ ================ Weighted Average Common Shares Outstanding 15,458,678 15,718,670 ================ ================

The accompanying notes are an integral part of these consolidated financial statements. 5

~~Delaware~~Canadian Rockport Homes International, Inc. (~~State~~A orDevelopment ~~other~~Stage ~~jurisdiction~~Company) CONSOLIDATED STATEMENTS OF CASH FLOWS --------------------------------------------------------------------------------------------------------------- From Inception (March 27, 1997) For the Three Months Ended Through March 31, 2003 March 31, 2004 March 31, 2004 ---------------- ---------------- ---------------- (Unaudited) (Unaudited) (Unaudited) Cash Flows from Operating Activities Net loss $ (256,857) $ (654,234) $ (7,907,015) Adjustments to reconcile net loss to net cash provided by operating activities: Issuance of ~~incorporation~~common orstock for services - 5,875 22,375 Issuance of common stock in Company's organization - - 1,000 Compensation recognized on stock option grants - 178,747 3,192,621 Loss on disposition of assets - - 358,749 Loss on impairment of goodwill - - 30,000 Depreciation and amortization 10,678 11,283 143,790 (Increase) Decrease in Assets (Increase) decrease in prepaid expenses 11,645 - (1,800) (Increase) decrease in other assets (1,537) 3,295 204 Increase (Decrease) in Liabilities Increase in accrued compensation - 145,147 145,147 Increase in trade and other payables 18,001 5,024 434,463 ---------------- ---------------- ---------------- Net Cash Used in Operating Activities (218,070) (304,863) (3,580,466) ---------------- ---------------- ---------------- Cash Flows from Investing Activities Net proceeds from sale of timber and truss plant - - 211,639 Insurance proceeds on equipment theft - - 252 Acquisition of equipment and other property (121,177) (158,935) (1,076,173) ---------------- ---------------- ---------------- Net Cash Used in Investing Activities (121,177) (158,935) (864,282) ---------------- ---------------- ---------------- Cash Flows from Financing Activities Gross proceeds from private stock offerings 315,774 440,992 4,748,664 Cost incurred in stock offerings (17,932) (33,812) (335,986) Advances from officer - - 129,810 Principal reduction on obligation under capital lease (97) (583) (2,299) Proceeds from loans - - 144,668 Loans repayments to officer - - (127,382) Purchase of treasury stock - - (35,000) ---------------- ---------------- ---------------- Net Cash Provided by Financing Activities 297,745 406,597 4,522,475 ---------------- ---------------- ---------------- Effect of Exchange Rates on Cash 14,920 (3,812) 4,978 ---------------- ---------------- ---------------- Net Increase (Decrease) in Cash and Cash Equivalents (26,582) (61,013) 82,705 Beginning Balance - Cash and Cash Equivalents 181,331 143,718 - ---------------- ---------------- ---------------- Ending Balance - Cash and Cash Equivalents $ 154,749 $ 82,705 $ 82,705 ================ ================ ================

The accompanying notes are an integral part of these consolidated financial statements. 6 Canadian Rockport Homes International, Inc. (A Development Stage Company) STATEMENTS OF CASH FLOWS -------------------------------------------------------------------------------- Supplemental Information: ------------------------- Non-cash Investing and Financing Activities: -------------------------------------------- During the first quarter of 2003, the Company issued 1,600 shares of its common stock in consideration for services rendered in connection with the Company's public offering. The issued shares were valued at $8,000. The costs attributed to the issued shares were netted against the proceeds received. During the first quarter of 2004, the Company issued 650 shares of its common stock in consideration for services rendered in connection with the Company's public offering. The issued shares were valued at $3,250. The costs attributed to the issued shares were netted against the proceeds received. Cash Paid For: --------------

~~98-0354610~~From Inception (~~IRS~~March ~~Employer~~27, ~~Identification~~1997) ~~No.~~For the Three Months Ended Through March 31, 2003 March 31, 2004 March 31, 2004 ---------------- ---------------- ---------------- (Unaudited) (Unaudited) (Unaudited) Interest $ - $ 548 $ 2,553 ================ ================ ================ Income Taxes $ - $ - $ - ================ ================ ================

The accompanying notes are an integral part of these consolidated financial statements. 7 Canadian Rockport Homes International, Inc. (a Development Stage Company) NOTES TO FINANCIAL STATEMENTS Note 1 - Summary of Significant Accounting Policies ---------------------------------------------------- Presentation ------------ In the opinion of the Company's management, the accompanying unaudited consolidated financial statements contain all adjustment (consisting of normal recurring accruals) necessary to present fairly the financial position of the Company as of March 31, 2004, and the results of its operations and cash flows for the three-month periods ended March 31, 2003 and 2004. The operating results of the Company on a quarterly basis may not be indicative of operating results for the full year. Reference should be made to Canadian Rockport Homes International, Inc.'s (the "Company") Form 10-K for the year ended December 31, 2003, for additional disclosures including a summary of the Company's accounting policies, which have not significantly changed. Business Activities and Related Risks ------------------------------------- Canadian Rockport Homes International, Inc was incorporated in Delaware on January 10, 1996 under the name, Lenz Products, Inc. The Company changed its name to Canadian Rockport Homes International, Inc. in early 2001. The Company is in the development stage as defined in FASB Statement 7 and currently has plans to manufacture and erect low cost concrete modular buildings. The Company has not paid any dividends and any dividends which may be paid in the future will depend on the financial requirements of the Company and other relevant factors. In February 2001, the Company acquired all of the outstanding shares of Canadian Rockport Homes, Ltd., ("CRH") a company incorporated in the Province of British Columbia on March 26, 1997, in exchange for issuing 11,300,000 of its common stock. For financial reporting purposes, the acquisition was treated as a reverse acquisition whereby CRH's operations continue to be reported as if it had actually been the acquirer. Assets and liabilities continue to be reported at the Acquiree's historical cost because before the reverse acquisition, the Company had nominal assets, liabilities and operations. The Company also formed a subsidiary in 2001 in Chile under the name Rockport Homes Chile Limitada ("RHCL"). The Company and CRH are the sole shareholder's of this Chilean company. In 2002, the Company acquired certain assets of 598546 BC Ltd., which included 100% of the outstanding shares of Canadian Rockport Trading Limitada, a Chilean corporation, formerly Maderas Doradas Canadienses, S.A. ("RT"). At the time of its acquisition, RT had no operations. During the year, the Company sold all of the assets of RT except for the acquired building and land on which the Company is building its Chilean plant and offices. For ease in administration and to reduce costs, the Company in 2003 decided to dissolve "RHCL" and operate its Chilean operations solely through RT which owned significantly all of the Company's Chilean assets prior to this decision being made. 8 Canadian Rockport Homes International, Inc. (a Development Stage Company) NOTES TO FINANCIAL STATEMENTS Principles of consolidation --------------------------- The accompanying financial statements include the accounts and transactions of Canadian Rockport Homes International, Inc. and its wholly owned subsidiaries, Canadian Rockport Homes, Ltd. Rockport Homes Chile Limitada and Canadian Rockport Trading, Limitada. Intercompany transactions and balances have been eliminated in consolidation. Foreign Currency Translations ----------------------------- For foreign operations whose functional currency is the local foreign currency, balance sheet accounts are translated at exchange rates in effect at the end of the year and income statement accounts are translated at average exchange rates for the year. Translation gains and losses are included as a separate component of stockholders' equity. Property and Equipment ---------------------- The cost of property and equipment is depreciated over the estimated useful lives of the related assets that range from 3 to 7 years. Depreciation is computed on the straight-line method for financial reporting purposes and for income tax reporting purposes. Depreciation expense for the three months ended March 31, 2003 and 2004 was $10,512, and $10,895, respectively. Intangible Assets ----------------- Patents are being amortized over their respective remaining lives of 18 years. Amortization expense for March 31, 2003 and 2004 were $133, and $168, respectively. Intangible assets consist of the following: March 31, 2004 Weighted Gross Net Average Intangible Accumulated Intangible Life Assets Amortization Assets (Years) ---------- ------------ ---------- -------- Patents $ 11,563 $ 1,977 $ 9,586 18 March 31, 2003 Weighted Gross Net Average Intangible Accumulated Intangible Life Assets Amortization Assets (Years) ---------- ------------ ---------- -------- Patents $ 11,505 $ 1,302 $ 10,203 18 Estimated amortization expense for each of the next five years ended March 31, is as follows: 2005 $ 674 2006 674 2007 674 2008 674 2009 674 ------- Total $ 3,370 ======= 9 Canadian Rockport Homes International, Inc. (a Development Stage Company) NOTES TO FINANCIAL STATEMENTS Net Loss Per Share ------------------ The Company adopted Statement of Financial Accounting Standards No. 128 that requires the reporting of both basic and diluted earnings (loss) per share. Basic earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. In accordance with FASB 128, any anti-dilutive effects on net earnings (loss) per share are excluded. Issuances Involving Non-cash Consideration ------------------------------------------ All issuances of the Company's stock for non-cash consideration have been assigned a dollar amount equaling either the market value of the shares issued or the value of consideration received, whichever is more readily determinable. The majority of the non-cash consideration received pertains to services rendered by consultants and others. Cash and Cash Equivalents ------------------------- For purposes of the statement of cash flows, the Company considers cash and cash equivalents to include all stable, highly liquid investments with maturities of three months or less. Use of Estimates ---------------- The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Income Taxes ------------ Provisions for income taxes are based on taxes payable or refundable for the current year and deferred taxes on temporary differences between the amount of taxable income and pretax financial income and between the tax bases of assets and liabilities and their reported amounts in the financial statements. Deferred tax assets and liabilities are included in the financial statements at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled as prescribed in FASB Statement No. 109, "Accounting for Income Taxes". As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. Fair Value of Financial Instruments ----------------------------------- Pursuant to SFAS No. 107, "Disclosures About Fair Value of Financial Instruments", the Company is required to estimate the fair value of all financial instruments included on its balance sheet as of March 31, 2004. The Company considers the carrying value of such amounts in the financial statements to approximate their face value. Note 2 - Accrued Compensation ------------------------------ On January 1, 2004, the Company entered into employment, consulting, and other related contracts with its management and personnel. Under the terms of these various agreements, the Company is obligated to pay on a monthly basis approximately $82,000 in compensation. Due to the Company's current cash flow requirements needed in the construction of its Chilean facility, monthly compensation currently being paid is approximately $34,000. The difference of approximately $48,000 a month is being accrued and will be paid when the Company has sufficient funds available. The terms of the contracts are for two years. 10 Canadian Rockport Homes International, Inc. ------------------------------------------- Item 2. Management's Discussion and Analysis of Financial Condition and Results -------------------------------------------------------------------------------- of Operations ------------- Results of Operations for the Three Months Ended March 31, 2004 and 2003 ------------------------------------------------------------------------ From the Company's inception, it has been in the development stage and has not commenced principal operations. During 2004, the Company is continuing the construction of its plant in Chile. General and administration costs were $473,463 and $250,171, respectively, for the three-month periods ended March 31, 2004 and 2003. Of the $473,463 incurred during the first quarter of 2004, $75,307 was incurred in the Company's Chilean operations. The remaining $398,156 pertains to costs incurred in operating its Canadian offices and general administration. Of the $250,171 incurred during 2003, $88,158 was incurred in the Company's Chilean operations. The remaining $162,013 pertains to costs incurred in operating its Canadian offices and general administration. The major expenses incurred in Chile during 2004 consisted of rent amounting to $3,756, salaries and related expenses totaling $36,601, professional fees of $4,524, office expense of $7,234, depreciation of $2,602, and telephone and utilities of $1,982. Other general expenses incurred in 2004 including operating the Company's Canadian offices consists of compensation and related costs of $281,719 (of which $145,147 has been accrued), professional fees of $19,408, depreciation expense of $8,293, rent of $18,602, telephone of $5,703, office expense of $5,587, and travel expenses of $23,498. The major expenses incurred in Chile during 2003 consisted of rent amounting to $15,862, salaries and related expenses totaling $33,201, professional fees of $2,986, and costs relating to its new facilities totaling $11,003. Other general expenses incurred in 2003 including operating the Company's Canadian offices consists of salaries and related payroll costs of $69,992, consulting fees of $16,137, advertising and promotion of $20,767, depreciation expense of $10,372, rent of $16,934, office expense of $6,295, telephone of $4,701 and travel expenses of $3,378. Liquidity and Capital Resources ------------------------------- Cash and cash equivalents as of March 31, 2004 and 2003 were $82,705 and $154,749, respectively. During the first quarter of 2004, the Company received a total of $440,992 through the sale of 88,105 shares of the Company's common stock. During the same period, the Company paid $304,863 in its operations, purchased equipment for its Canadian offices totaling $1,839, paid $157,096 towards the construction of the Chilean plant, paid $33,812 in costs associated with its public offering, and made principal payments on its equipment leases totaling $583. During the first quarter of 2003, the Company moved from its former leased facility in Chile and commenced construction of its new plant on the land previously acquired in that Country. During this three-month period, the Company received a total of $315,774 through the sale of 63,024 shares of the Company's common stock, $2,917 in commissions earned on a timber sale and $111 in interest. During the same period, the Company paid $221,098 in its operations, purchased equipment for its Canadian offices totaling $5,753, paid $41,303 on the construction of its modular display home, paid $74,121 in connection with construction of its new plant, and paid $17,932 in costs associated with its public offering. 11 Item 3. Quantitative and Qualitative Disclosures About Market Risk ------------------------------------------------------------------- Canadian Rockport Homes International, Inc. may be subject to market risk in the form of interest rate risk and foreign currency risk. Canadian Rockport Homes International, Inc. is a development stage company with limited operations to date, and neither interest rate nor foreign currency has had a material impact on such operations. The company's exposure to interest rate changes primarily relate to long-term debt used to fund future property acquisitions. Management's objective is to limit any impact of interest rate changes and may include any borrowing to be negotiated at fixed rates. Although interest rate changes have had no material affect on operations to date, management must continually evaluate such rates as manufacturing operations commence, corporate profitability is achieved, and expansion is being considered. The company may also establish lines of credit through traditional banking venues to insure liquidity during future periods of growth, and may consider fixed or variable rate bank lines consistent with any fluctuation of interest rates at the time of such growth. The company's exposure to foreign currency exchange requires continuing management attention to the stability of the countries in which operations may be planned, as well as trade relations between the selected country(s) and Canada. Both trade relations and stability as pursuant to planned operations in Chile are currently favorable. Canadian Rockport Homes International, Inc. will continue to comprehensively evaluate conditions in countries where operations are in place and where future operations are planned, and will take any measures feasible at the time to minimize foreign currency risk. Such measures may include, but are not limited to; a reduction in operations or relocating a portion of operations to a more favorable environment. Item 4. Controls and Procedures -------------------------------- Canadian Rockport Homes International, Inc. management, including the Principal Executive Officer and Principal Financial Officer, have conducted an evaluation of the effectiveness of disclosure controls and procedures pursuant to Exchange Act Rule 13a-14(c) and 15d-14(c). This evaluation was conducted within 90 days prior to the filing of this report. Based on that evaluation, the Principal Executive Officer and Principal Financial Officer concluded that the disclosure controls and procedures are effective in ensuring that all material information required to be filed in this quarterly report has been made known to them in a timely fashion. There have been no significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date the Principal Executive Officer and Principal Financial Officer completed their evaluation. 12 Canadian Rockport Homes International, Inc. ------------------------------------------- Part II. OTHER INFORMATION --------------------------- Item 1. Legal Proceedings --------------------------- None Item 2. Change in Securities and Use of Proceeds -------------------------------------------------- During the three-months ended March 31, 2004, the Company received a total of $440,992 through the sale of 88,105 shares of the Company's common stock. During the same period it issued 650 shares of its common stock for services rendered in connection with its public offering, and 1,175 shares for services rendered in connection with the preparation of the Company's business plan. All shares issued for non-monetary consideration were valued at $5.00 per share. During the period from April 1, 2004 through May 26, 2004, the company issued 36,225 of its common stock in exchange for approximately $181,000 and issued 1,954 shares of its common stock for services valued at $9,770. Item 3. Defaults Upon Senior Securities ----------------------------------------- None Item 4. Submission of Matters to a Vote of Security Holders ------------------------------------------------------------- Not applicable Item 5. Other Information --------------------------- None Item 6. Exhibits and Reports on Form 8-K ------------------------------------------ Exhibits -------- Canadian Rockport Homes International, Inc. includes herewith the following: Number Description ------ ----------- 31.1 Certification of Principal Executive Officer pursuant to Section 302 31.2 Certification of Principal Accounting Officer pursuant to Section 302 32.1 Certification of Principal Executive Officer pursuant to Section 1350 32.2 Certification of Principal Accounting Officer pursuant to Section 1350 The following documents are incorporated by reference, as noted in each description, to this report: Number Description ------ ----------- 3 (a) Articles of Incorporation of the registrant (filed as Exhibit 3.1 to the registrant's Registration Statement on Form S-1 (Number 333-62786) as amended, filed October 30, 2001), and incorporated herein by reference. 3 (b) Bylaws and Amendments of the registrant (filed as Exhibit 3.5 to the registrant's Registration Statement on Form S-1 (Number 333-62786) as amended, filed October 30, 2001), and incorporated herein by reference. Reports on Form 8-K ------------------- No filings were made during the period covered by this report. 13 Canadian Rockport Homes International, Inc. ------------------------------------------- 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. Canadian Rockport Homes International, Inc. ------------------------------------------- Registrant By: \s\ William R. Malone, CEO ----------------------------------- William R. Malone, CEO Date: July 2, 2004 Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Date: July 2, 2004 By: \s\ William R. Malone, President ------------------------------------ William R. Malone, President and Director Date: July 2, 2004 By: \s\ Carol Laeser Treasurer ------------------------------------ Carol Laeser, Treasurer and Director Date: July 2, 2004 By: \s\ Harry Gordon, Secretary ------------------------------------ Harry Gordon, Secretary And Director Date: July 2, 2004 By: \s\ Nelson Riis, Director ------------------------------------ Nelson Riis, Director 14

700 W. Bender Street, Suite 507 Vancouver, BC Canada V6C 1G8 (Address of principal executive offices) (604) 669-1081 (Issuer's telephone number)

(Former name, former address and former fiscal year, if changed since last report)

[X]

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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.

The number of shares outstanding of each of the issuer's classes of common equity. As of July 21, 2003 - 15,539,320 shares of Common Stock

		Page
		Number
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Balance Sheets	3
	December 31, 2002 and June 30, 2003 (Unaudited)
	Consolidated Statements of Operations and Accumulated Deficit	5
	For the three and six months ended June 30, 2002 and 2003
	and from the Company's inception (March 27, 1997) through
	June 30, 2003
	Consolidated Statement of Cash Flows	6
	For the three and six months ended June 30, 2002 and 2003
	and from the Company's inception (March 27, 1997) through
	June 30, 2003
	Notes to Consolidated Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition
	and Results of Operations	11
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	13
Item 4.	Controls and Procedures	13
Part II.	OTHER INFORMATION
Item 1.	Legal Proceedings	14
Item 2.	Change in Securities and Use of Proceeds	14
Item 3.	Defaults Upon Senior Securities	14
Item 4.	Submission of Matters to a Vote of Security Holders	14
Item 5.	Other Information	14
Item 6.	Exhibits and Reports on Form 8-K	14
SIGNATURES		15
CERTIFICATION		16

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

Canadian Rockport Homes International, Inc. (A Development Stage Company)

CONSOLIDATED BALANCE SHEETS

	December 31, 2002			June 30, 2003
				(Unaudited)
Assets
Current Assets
Cash and cash equivalents	$	181,331	$	68,229
Employee advances		-		2,226
Loans to related party		-		2,845
Loans receivable - other		-		1,187
Prepaid expenses	500		260
Total current assets	181,831		74,747
Property and Equipment
Land		400,000		400,000
Trucks		23,773		27,820
Furniture and equipment	163,440		181,043
		587,213		608,863
Less accumulated depreciation	(77,789)		(110,065)
		509,424		498,798
Construction in progress	692,479		848,095
Total property and equipment - net	1,201,903		1,346,893
Other Assets
Deferred lease expense		11,894		-
Intangibles:
Patents	10,341		10,075
Total other assets	22,235		10,075
Total Assets	$ 1,405,969		$ 1,431,715

Canadian Rockport Homes International, Inc. (A Development Stage Company)

CONSOLIDATED BALANCE SHEETS

	December 31, 2002			June 30, 2003
				(Unaudited)
Liabilities and Stockholders' Equity
Current Liabilities
Rent payable	$	283,985	$	283,985
Accounts payable		94,105		146,519
Payroll taxes payable		3,457		4,528
Franchise taxes payable		-		2,000
Loans payable - officer		2,117		-
Loans payable - other		15,612		15,612
Current maturities of obligation under capital lease		653		841
Current maturities of long-term debt	80,771		106,474
Total Current Liabilities		480,700		559,959
Long-Term Debt	1,970		1,806
Total Liabilities	482,670		561,765
Stockholders' Equity
Common stock, $.001 par value; authorized
100,000,000 shares; issued and outstanding
15,418,856 shares as of December 31, 2002,
and 15,5117,320 shares as of June 30, 2003		15,419		15,517
Additional paid-in capital		4,084,431		4,529,659
Deficit accumulated during development stage		(3,175,470)		(3,682,095)
Other comprehensive income	(1,081)		6,869
Total Stockholders' Equity	923,299		869,950
Total Liabilities and Stockholders' Equity	$ 1,405,969		$ 1,431,715

Canadian Rockport Homes International, Inc. (A Development Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT

									From Inception
									(March 27, 1997)
		For the Three Months Ended				For the Six Months Ended				Through
	June 30, 2002		June 30, 2003		June 30, 2002		June 30, 2003		June 30, 2003
		(Unaudited)	(Unaudited)			(Unaudited)		(Unaudited)		(Unaudited)
		(Restated)				(Restated)
Income	$	-	$	-	$	-	$	-	$	-
Operating Expenses
General and administrative expenses		(319,922)		(247,962)		(611,633)		(498,133)		(3,261,234)
Loss on disposition of assets		(308,477)		-		(317,661)		-		(358,361)
Loss on impairment of goodwill	-		-		-		-		(30,000)
Loss from Operations		(628,399)		(247,962)		(929,294)		(498,133)		(3,649,595)
Other Income (Expenses)
Commission income		-		-		-		2,917		2,917
Interest income		208		67		243		178		4,233
Interest expense	(551)		(1,873)		(551)		(11,587)		(39,650)
Net Loss	$ (628,742)		$ (249,768)		$ (929,602)		$ (506,625)		$ (3,682,095)
Basic Loss Per Share	$ (0.04)		$ (0.02)		$ (0.06)		$ (0.03)
Weighted Average
Common Shares Outstanding	15,159,763		15,495,537		15,071,159		15,477,210

Canadian Rockport Homes International, Inc. (A Development Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

									From Inception
								(March 27, 1997)
		For the Three Months Ended				For the Six Months Ended			Through
		June 30, 2002		June 30, 2003		June 30, 2002	June 30, 2003		June 30, 2003
		(Unaudited)		(Unaudited)		(Unaudited)	(Unaudited)		(Unaudited)
		(Restated)				(Restated)
Cash Flows from Operating Activities
Net Loss	$	(628,742)	$	(249,768)	$	(929,602)	$ (506,625)	$	(3,682,095)
Adjustments to reconcile net loss to
net cash provided by operating activities
Issuance of common stock for services		-		3,000		-	3,000		16,500
Issuance of common stock in
Company's organization		-		-		-	-		1,000
Loss on disposition of assets		308,477		-		308,477	-		358,361
Loss on impairment of goodwill		-		-		-	-		30,000
Depreciation and amortization		7,598		11,940		20,912	22,619		104,790
(Increase) Decrease in Assets
Increase (decrease) in receivables		(38,363)		(564)		(38,363)	(2,102)		(2,102)
(Increase) decrease in prepaid expenses		11,894		490		23,009	12,134		(353)
Increase (decrease) in Liabilities
37,302 430,522 94,655 Increase (decrease) in trade and other payables 129,114 55,357
Net cash used in operating activities	(224,481)		(197,600)		(486,453)		(415,617)	(2,743,377)
Cash Flows from Investing Activities
Net proceeds from sale of timber and truss plants		141,523		-		141,523	-		211,639
(33,166) (828,417) (73,781) Acquisition of equipment and other property (132,399) (145,207)
(33,166) (616,778) 67,742 Net cash provided (used) in investing activities 9,124 (145,207)
Cash Flows from Financing Activities
Gross proceeds from private stock offerings		28,977		166,232		218,461	482,649		3,548,573
Costs incurred in stock offerings		-		(25,653)		-	(43,686)		(240,122)
Advances and repayments from officer		25,524		-		38,101	-		127,969
Principal reduction on obligation under capital lease		(131)		(239)		(131)	(399)		(819)
Proceeds from loans		83,228		-		71,287	-		144,668
Loans repayments to officer		(13,924)		(32)		(40,021)	(110)		(127,254)
Repayment on loans made to third parties		-		2,242		-	22,242		2,242
- (35,000) (10,000) Purchase of treasury stock (10,000) -
142,550 3,420,257 113,674 Net cash provided by financing activities 277,697 440,696
1,696 8,127 2,378 Effect of exchange rates on cash 2,016 7,026
Net Increase (Decrease) in Cash and
Cash Equivalents		(60,687)		(86,520)		(197,616)	(113,102)		68,229
Cash and Cash Equivalents -
154,749 - 86,894 Beginning Balance 223,823 181,331
Ending Balance	$ 26,207		$ 68,229		$ 26,207		$ 68,229	$ 68,229

Canadian Rockport Homes International, Inc. (A Development Stage Company)

STATEMENTS OF CASH FLOWS

Supplemental Information:
Cash Paid For:
					From Inception
					(March 27, 1997)
	For the Three Months Ended		For the Six Months Ended		Through
	June 30, 2002	June 30, 2003	June 30, 2002	June 30, 2003	June 30, 2003
	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)
Interest Expenses	$ 551	$ 167	$ 551	$ 303	$ 1,124
Income Taxes	$ -	$ -	$ -	$ -	$ -

Canadian Rockport Homes International, Inc. (a Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1.

In the opinion of the Company's management, the accompanying unaudited consolidated financial statements contain all adjustment (consisting of normal recurring accruals) necessary to present fairly the financial position of the Company as of June 30, 2003, and the results of its operations and cash flows for the three-month and six-month periods ended June 30, 2002 and 2003. The operating results of the Company on a quarterly or semi-annual basis may not be indicative of operating results for the full year.

Note 2.

The accompanying consolidated financial statements for the three and six months ended June 30, 2002 have been restated to reflect the actual terms and valuations of the assets purchased from of 598546 B.C. Ltd during the second quarter of 2002. A schedule reflecting the adjustments to the previously reported are as follows:

	Three Months	Six Months
	Ended	Ended
	June 30, 2002	June 30, 2002
	(Unaudited)
Net loss as orginally reported	(808,682)	(1,109,480)
Less: Loss allocation to
Minoroty shareholder	(10,231)	(10,231)
Add: Adjustment to cost basis
of assets sold	9,183	9,121
Reversal of goodwill
impairement	180,988	180,988
Total Adjustments	179,940	179,878
Net loss as revised	(628,742)	(929,602)
Loss per share as originally reported	$ (0.05)	$ (0.07)
Loss per share on adjustments	0.01	0.01
Loss per shares as revised	$ (0.04)	$ (0.06)

Note 3.

Summary of Significant Accounting Policies

Principles of consolidation

The accompanying consolidated financial statements include the accounts and transactions of Canadian Rockport Homes International, Inc. and its wholly owned subsidiaries, Canadian Rockport Homes, Ltd. Rockport Homes Chile Limitada and Rockport Trading, S.A. Intercompany transactions and balances have been eliminated in consolidation.

Foreign Currency Translations

For foreign operations whose functional currency is the local foreign currency, balance sheet accounts are translated at exchange rates in effect at the end of the year and income statement accounts are translated at average exchange rates for the year. Translation gains and losses are included as a separate component of stockholders’ equity.

Property and Equipment

The cost of property and equipment is depreciated over the estimated useful lives of the related assets that range from 3 to 7 years. Depreciation is computed on the straight-line method for financial reporting purposes and for income tax reporting purposes. Depreciation expense for the three months ended June 30, 2002 and 2003 was $7,432, and $11,773, respectively. Depreciation expense for the six months ended June 30, 2002 and 2003 was $20,579, and $22,285, respectively.

Canadian Rockport Homes International, Inc. (a Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Intangible Assets

Patents received from TWiC are being amortized over their respective remaining lives ranging from 11to18 years. Amortization expense for the three months ended June 30, 2002 and 2003 was $166, and $167, respectively. Amortization expense for the six months ended June 30, 2002 and 2003 was $333, and $334, respectively.

Intangible assets consist of the following:

				June 30, 2003
							Weighted
		Gross				Net	Average
		Intangible	Accumulated			Intangible	Life
		Assets	Amortization			Assets	(Years)
Patents	$	11,547	$	1,472	$	10,075	18
				June 30, 2002
							Weighte
							d
		Gross				Net	Average
		Intangible		Accumulated		Intangible	Life
		Assets		Amortization		Assets	(Years)
Patents	$	11,491	$	623	$	10,868	18

Estimated amortization expense for each of the next five years ended June 30, is as follows:

2004	$	674
2005		674
2006		674
2007		674
2008		674
Total	$	3,370

Net Loss Per Share

The Company adopted the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 128, “Earnings Per Share” (“EPS”) that established standards for the computation, presentation and disclosure of earnings per share, replacing the presentation of Primary EPS with a presentation of Basic EPS.

Issuances Involving Non-cash Consideration

All issuances of the Company’s stock for non-cash consideration have been assigned a dollar amount equaling either the market value of the shares issued or the value of consideration received whichever is more readily determinable. The majority of the non-cash consideration received pertains to services rendered by consultants and others.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers cash and cash equivalents to include all stable, highly liquid investments with maturities of three months or less.

Canadian Rockport Homes International, Inc. (a Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Income Taxes

The Company accounts for its income taxes under the provisions of Statement of Financial Accounting Standards 109 ("SFAS 109"). The method of accounting for income taxes under SFAS 109 is an asset and liability method. The asset and liability method requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between tax bases and financial reporting bases of other assets and liabilities.

Fair Value of Financial Instruments

Pursuant to SFAS No. 107, “Disclosures About Fair Value of Financial Instruments”, the Company is required to estimate the fair value of all financial instruments included on its balance sheet as of June 30, 2003. The Company considers the carrying value of such amounts in the financial statements to approximate their face value.

Canadian Rockport Homes International, Inc.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations for the Three Months Ended June 30, 2003 and 2002

From the Company’s inception, it has been in the development stage and has not commenced principal operations. During 2003 and 2002, the Company is continuing the construction of its plant in Chile. General and administration costs were $247,962 and $319,922, respectively, for the three-month periods ended June 30, 2003 and 2002.

Of the $247,962 incurred during 2003, $64,368 was incurred in the Company’s Chilean operations. The remaining $183,594 pertains to costs incurred in operating its Canadian offices and general administration.

The major expenses incurred in Chile during the three month period ended June 30, 2003 consisted of salaries and related expenses totaling $39,230, professional fees of $1,425, rent of $2,809, supplies of $3,878 and travel expense of $7,110.

Other general expenses incurred during the three months ended June 30, 2003 including operating its Canadian offices consisted of salaries and related payroll costs of $71,602, consulting fees of $14,869, professional fees of $24,627, advertising and promotion of $17,846, rent of $17,929, telephone of $3,578, and office supplies of $3,260.

During the quarter ended June 30, 2002, the Company sold all of the timber acquired from 598546 B.C. Ltd for $141,523. On its acquisition, the timber was valued at $450,000, thus resulting in a loss from the sale of $308,477.

Of the $319,922 incurred during 2002, $165,672 was incurred in the Company’s Chilean operations. The remaining $154,250 pertains to costs incurred in operating its Canadian offices and general administration.

The major expenses incurred in Chile during the three-month period ended June 30, 2002 consisted of rent amounting to $108,853, salaries and related expenses totaling $15,023, sales commission on the sale of the timber amounting to $10,232, professional fees of $4,159, security guards of $6,607, depreciation expense of $4,422, and travel expense of $7,894.

Other general expenses incurred in the second quarter of 2002 including operating its Canadian offices consisted of salaries and related payroll costs of $47,918, consulting fees of $27,574, professional fees of $31,746, advertising and promotion of $9,784, rent of $16,133, telephone of $3,926, and office supplies of $5,007.

Canadian Rockport Homes International, Inc.

Results of Operations for the Six Months Ended June 30, 2003 and 2002

General and administration costs were $498,133 and $611,633, respectively, for the six-month periods ended June 30, 2003 and 2002.

Of the $498,133 incurred during 2003, $155,521 was incurred in the Company’s Chilean operations. The remaining $342,612 pertains to costs incurred in operating its Canadian offices and general administration.

The major expenses incurred in Chile during the six month period ended June 30, 2003 salaries and related expenses totaling $69,636, professional fees of $5,566, rent of $14,486 and travel expense of $13,383.

Other general expenses incurred in the second quarter of 2003 including operating its Canadian offices consisted of salaries and related payroll costs of $141,594, consulting fees of $28,306, professional fees of $28,265, advertising and promotion of $36,980, rent of $34,864, telephone of $8,279 and office supplies of $8,364.

Of the $611,633 incurred during 2002, $324,693 was incurred in the Company’s Chilean operations. The remaining $286,970 pertains to costs incurred in operating its Canadian offices and general administration.

The major expenses incurred in Chile during the six month period ended June 30, 2002 consisted of rent amounting to $216,822, salaries and related expenses totaling $30,491, sales commission on the sale of the timber amounting to $10,232, professional fees of $12,142, security guards of $10,601, depreciation expense of $8,845, and travel expense of $10,584.

Other general expenses incurred in the second quarter of 2002 including operating its Canadian offices consisted of salaries and related payroll costs of $106,294, consulting fees of $43,228, professional fees of $51,446, advertising and promotion of $13,591, rent of $27,562, telephone of $7,168, and office supplies of $8,256.

Liquidity and Capital Resources

Cash and cash equivalents as of June 30, 2003 and 2002 were $68,229, and $26,207, respectively. During the six months ended June 30, 2003, the Company received $166,232 through the sale of 33,240 shares of its common stock, $134 in interest, $2,917 received as commissions on timber sales and received $2,242 on a repayment of consulting fees paid in a previous year. During the six month period ended June 30, 2003, $418,668 was used in the Company’s operations, $145,207 was used in the construction of its Chilean plant and display home, , $399 reduction in the principal balance due on the purchase of computer equipment and $43,686 was paid in connection with the Company’s offering. The cash balance as of June 30, 2003 was $68,229.

During the six months ended June 30, 2002, the Company received $141,523 from the sale of its timber, $218,461 through the sale of 43,635 shares of its common stock, $243 in interest, $71,287 in loans from a third parties, and $38,101 from Dr. Malone. During the three-month period, $452,946 was used in the Company’s operations. In addition, $132,399 was used in the construction of its Chilean plant and for the purchase of other equipment, $10,000 was paid to a stockholder in exchange for the receipt and subsequent cancellation of 5,000 shares of its common stock, $131 reduction in the principal balance due on the purchase of computer equipment, $40,021 was advanced to the Company’s President. The cash balance as of June 30, 2002 was $26,207.

Canadian Rockport Homes International, Inc.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Canadian Rockport Homes International, Inc. may be subject to market risk in the form of interest rate risk and foreign currency risk. Canadian Rockport Homes International, Inc. is a development stage company with limited operations to date, and neither interest rate nor foreign currency has had a material impact on such operations.

The company's exposure to interest rate changes primarily relate to long-term debt used to fund future property acquisitions. Management's objective is to limit any impact of interest rate changes and may include any borrowing to be negotiated at fixed rates. Although interest rate changes have had no material affect on operations to date, management must continually evaluate such rates as manufacturing operations commence, corporate profitability is achieved, and expansion is being considered. The company may also establish lines of credit through traditional banking venues to insure liquidity during future periods of growth, and may consider fixed or variable rate bank lines consistent with any fluctuation of interest rates at the time of such growth.

The company's exposure to foreign currency exchange requires continuing management attention to the stability of the countries in which operations may be planned, as well as trade relations between the selected country(s) and Canada. Both trade relations and stability as pursuant to planned operations in Chile are currently favorable. Canadian Rockport Homes International, Inc. will continue to comprehensively evaluate conditions in countries where operations are in place and where future operations are planned, and will take any measures feasible at the time to minimize foreign currency risk. Such measures may include, but are not limited to; a reduction in operations or relocating a portion of operations to a more favorable environment.

Item 4. Controls and Procedures

Canadian Rockport Homes International, Inc. management, including the Principal Executive Officer and Principal Financial Officer, have conducted an evaluation of the effectiveness of disclosure controls and procedures pursuant to Exchange Act Rule 13a-14(c) and 15d-14(c). This evaluation was conducted within 90 days prior to the filing of this report. Based on that evaluation, the Principal Executive Officer and Principal Financial Officer concluded that the disclosure controls and procedures are effective in ensuring that all material information required to be filed in this quarterly report has been made known to them in a timely fashion. There have been no significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date the Principal Executive Officer and Principal Financial Officer completed their evaluation.

Canadian Rockport Homes International, Inc.

Part II. OTHER INFORMATION

Item 1. Legal Proceedings None

Item 2. Change in Securities and Use of Proceeds

During the three months ended June 30, 2003, the Company received a total of $166,232 through the sale of 33,240 shares of its common stock,. During the same period it issued 600 shares of its common stock for marketing services. During the period from July 1, 2003 through July 21, 2003, the Company received $110,000 through the issuance of 22,000 shares of its common stock. In addition, during the period, the Company issued a total of 700,000 shares of its common stock to its management and employees for services rendered.

In July 2003, an employee located in Chile resigned her position with the Company and returned to the Company 150,000 shares of Company common stock which was previously issued to her. These shares were returned to the Company’s treasury and subsequently cancelled.

Item 3.	Defaults Upon Senior Securities
	None
Item 4.	Submission of Matters to a Vote of Security Holders
	Not applicable
Item 5.	Other Information
	None

Item 6. Exhibits and Reports on Form 8-K

Exhibits

Canadian Rockport Homes International, Inc. includes herewith the following:

Number	Description
99.1	Certification of Chief Executive Officer of Canadian Rockport Homes International, Inc. pursuant
	to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.2	Certification of Principal Accounting Officer of Canadian Rockport Homes International pursuant
	to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Reports on Form 8-K

No filings were made during the period covered by this report.

Canadian Rockport Homes International, Inc.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Canadian Rockport Homes International, Inc.
	Registrant
Date: August 15, 2003	By: \s\ William R. Malone, President
	William R. Malone, President and Director
Date: August 15, 2003	By: \s\ Carol Laeser Treasurer
	Carol Laeser, Treasurer and Director
Date: August 15, 2003	By: \s\ Harry Gordon, Secretary
	Harry Gordon, Secretary And Director
Date: August 15, 2003	By: \s\ Nelson Riis, Director
	Nelson Riis, Director

CERTIFICATION

I William R. Malone, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Canadian Rockport Homes International, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officer and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: August 15, 2003 /s/ William R. Malone - ----------------------------- William R. Malone Principal Executive Officer

CERTIFICATION

I, Carol Laeser, certify that:

Date: August 15, 2003 /s/ Carol Laeser - ----------------------------- Carol Laeser Principal Accounting Officer

Filing Compare · Canadian Rockport Homes Int'l, Inc.