6-K/A 1 peak2003qtr26ka2.txt AMENDED 2003 SECOND QUARTER REPORT FORM 6-K/A (Amendment No. 2) SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16 under the Securities Exchange Act of 1934 For the month of March, 2003 Commission File Number: 000-24069 PEAKSOFT MULTINET CORP. ----------------------- (Translation of registrant's name into English) 3930 Meridian Street, Suite C117, Bellingham, Washington 98226 USA ------------------------------------------------------------------ (Address of principal executive offices) Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. Form 20-F |X| Form 40-F |_| Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): |_| Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders. Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): |_| Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR. Indicate by check mark whether by furnishing the information contained in this Form, the registrant 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): 82-0-24069 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. PEAKSOFT MULTINET CORP. Date: December 30, 2003 By: /s/ Timothy W. Metz ---------------------- Timothy W. Metz Chairman and Chief Executive Officer PeakSoft Multinet Corp. 2003 Second Quarter Financial Statements (In Canadian Dollars) Period Ending 31 March 2003 Revised 24 December 2003 Consolidated Balance Sheet (in Canadian dollars) (Prepared by Management - Unaudited) March 31, 2003 and 2002 -------------------------------------------------------------------------------- Quarter Quarter Year Ended Ended Ended 31 March 31 March 30 Sept. 2003 2002 2002 $ $ $ -------------------------------------------------------------------------------- Assets Current Assets: Cash 571 2,092 48,043 Accounts receivable 589 406 578 Prepaids and deposits 11,592 16,287 16,810 ---------------------------------------------------------------------------- -------------------------------------------------------------------------------- 12,752 18,786 65,431 -------------------------------------------------------------------------------- Liabilities and Shareholders' Equity Current liabilities: Accounts Payable and Accrued Liabilities 3,285,754 2,411,018 2,893,615 Notes Payable 4,900,744 4,932,327 4,900,744 ---------------------------------------------------------------------------- 8,186,498 7,343,345 7,794,359 Shareholders' Equity: Share capital 9,019,271 9,019,271 9,019,271 Accumulated deficit 17,193,017 16,343,830 16,748,199 ---------------------------------------------------------------------------- (8,173,746) (7,324,559) (7,728,928) -------------------------------------------------------------------------------- 12,752 18,786 65,431 -------------------------------------------------------------------------------- 1 Consolidated Statement of Operations and Deficit (in Canadian dollars) (Prepared by Management - Unaudited) Six Months Ended March 31, 2003 and 2002

2 Statement of Changes in Financial Position (in Canadian dollars) (Prepared by Management - Unaudited) Six Months Ended March 31, 2003 and 2002

3 PEAKSOFT MULTINET CORPORATION Notes to the Consolidated Financial Statements Period ended 31 March 2003 and 2002 (Unaudited - See Notice to Reader) The Company is incorporated under the Laws of Alberta, Canada and its principal business activities are providing Internet software to corporate and individual users, and providing Internet portal facility. 1. Continuing operations: These consolidated financial statements have been prepared using generally accepted accounting principles that are applicable to a going concern, not withstanding that the Company incurred significant operating losses in the current and prior years. This basis of preparation may be inappropriate because significant doubt exists about the appropriateness of the going concern assumption. The Company's ability to continue as a going concern is dependent upon obtaining additional external financing and on the attainment of profitable operations. Management is of the opinion that external financing will remain in place and that additional external financing will be obtained to enable the execution of its plan to concentrate on providing software for vertical markets. For this reason, the financial statements do not reflect adjustments in the carrying values of the assets and liabilities, the reported revenues and expenses and the balance sheet classifications used that would be necessary if the going concern assumption were not appropriate. 2. Significant accounting policies: (a) Principles of consolidation: The consolidated financial statements include the accounts of the Company and its wholly-owned American subsidiary, PeakSoft Multinet Corp., USA. All significant inter-company transactions and balances have been eliminated on consolidation. (b) Revenue recognition: Revenue from product sales is recognized as the products are sold and title to the product is transferred. Revenue from service contracts is recognized when the work is completed. (c) Foreign currency translation: Foreign currency transactions entered into directly by the Company as well as the financial statements of the integrated foreign operations are translated using the temporal method. Under this method, monetary assets and liabilities are translated at year-end exchange rates. Other balance sheet items are translated at historical exchange rates. Income statement items are translated at average rates of exchange prevailing during the year except for depreciation expense, which is translated at historical rates. Translation gains and losses are included in income except for unrealized gains and losses arising from the translation of long-term monetary assets and liabilities which are deferred and amortized over the remaining lives of related items. (d) Research and development: Research costs are charged to operations as incurred. Development costs are charged to operations as incurred unless they meet the criteria for deferral under generally accepted accounting principles. (e) Use of estimates: The presentation 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. Significant areas 4 PEAKSOFT MULTINET CORPORATION Notes to the Consolidated Financial Statements Period ended 31 March 2003 and 2002 (Unaudited - See Notice to Reader) requiring the use of management estimates relate to the determination of net recoverable value of assets, in particular as it relates to acquired research and development, useful lives for amortization, recognition of revenue and the determination of deferred revenue. (f) Financial instruments: The Company has applied retroactively the new accounting standard with respect to the presentation of financial instruments. 3. Notes payable: Period Period Ended Ended March 31, 2003 March 31, 2002 $ $ -------------------------------- Notes payable bearing interest at 12% per annum with interest paid quarterly, and specific repayment terms. 4,900,744 4,932,327 ================================ 4. Share capital: Authorized: Unlimited voting common shares without par value Shares Amount # $ -------------------------------- Issued: Balance, 01 October 1994 82,036 94,580 Issued amount year ended 30 September 1995: Issued to founders 293,018 - Issued for cash 324,287 948,865 Issue for services and technology 19,407 45,700 Less share issuance costs - (193,278) Issued amount year ended 30 September 1996: Issued for cash 143,893 667,500 Issued for services and technology 213,026 1,835,537 Issued amount year ended 30 September 1997: Issued for cash 443,158 2,496,498 Issued for services and technology 11,855 75,969 Less share issuance costs - (191,916) Issued amount year ended 30 September 1998: Issued for cash 211,497 623,281 Issued amount year ended 30 September 1999: Issued for cash 2,052,743 2,981,847 Less share issuance costs - (429,128) Issued amount year ended 30 September 2000: Issued for services 36,054 63,816 -------------------------------- Balance, 31 March 2003 and 2002 3,830,974 9,019,271 ================================ 5 PEAKSOFT MULTINET CORPORATION Notes to the Consolidated Financial Statements Period ended 31 March 2003 and 2002 (Unaudited - See Notice to Reader) 5. Fair value of financial instruments: The methods and assumptions used to estimate the fair value of each class of financial instruments for which it is practical to estimate a value are as follows: (a) Short-term financial assets and liabilities: The carrying amount of these financial assets and liabilities are a reasonable estimate of the fair values because of the short maturity of these instruments. Short-term financial assets comprise cash and accounts receivable. Short-term financial liabilities comprise accounts payable and accrued liabilities. (b) Long-term financial liabilities: The carrying value of long-term financial assets and liabilities are a reasonable estimate of the fair values. Long-term financial liabilities comprise long-term debt and obligations under capital leases and other paid-in capital. 6. Loss per common share: Loss per common share is based on the weighted average number of common shares outstanding during the year. 7. Loss on investment In the second quarter of fiscal year 2003, the company discovered that funds advanced to Peak.com, Inc. and to IncuLab, Inc. by some of the shareholders, on behalf of PeakSoft Multinet Corporation and that were to be repaid by PeakSoft Multinet Corporation, as loan repayment, had not been completely recorded on the Company's books. The advances were made toPeak.com between July and November 2000. These advances were reflected in a contingent debt conversion agreement with these shareholders dated for reference 1 August 2001. The Company was unable to verify the validity of the amounts of these advances until the forth quarter of fiscal year 2003. The Company acquired 89.5% of Peak.com, in November 2000, in exchange for certain fixed assets, a software license agreement and the assumption of US$410,000 in debt. As a part of the agreement to acquire an interest in IncuLab, Inc. through the sale of Peak.com to IncuLab, these same shareholders advanced additional funds directly to IncuLab on behalf of PeakSoft Multinet Corp., in order to acquire a greater interest in IncuLab. These advances were to be repaid by PeakSoft as loan repayment. During the second quarter of fiscal year 2003, the company discovered that these advances were also not completely recorded on the Company's books. These advances were reflected in a contingent debt conversion agreement with these shareholders dated for reference 1 August 2001. The Company was unable verify the validity of the amounts of these advances until the forth quarter of fiscal year 2003. The verification of the amounts of the advances to both Peak.com and IncuLab was accomplished during the forth quarter of fiscal year 2003 and found to be USD$1,023,090 in total, This total amount had been included in a contingent debt conversion agreement, with these shareholders, dated for reference 1 August 2001. As a result, the amount has been included in the 2001 comparatives and has been adjusted in these 2002 financial statements with retroactive effect. After the acquisition, management determined that IncuLab was not a going concern, nor would it be in the near future. As a result the investment was written off to the operating statement as a loss on investment. 6 PEAKSOFT MULTINET CORPORATION Notes to the Consolidated Financial Statements Period ended 31 March 2003 and 2002 (Unaudited - See Notice to Reader) 8. Related party transactions: The following are related party transactions, not already disclosed elsewhere in the notes to the financial statements: Period Period Ended Ended March 31, 2003 March 31, 2002 $ $ USD USD -------------------------------- Salaries to directors and officers (accrued) 125,628 119,874 Benefits to directors and officers (accrued) 9,000 9,000 Interest accrued on notes due to a shareholder 121,260 121,261 Legal fees paid to a former employee 0 0 -------------------------------- 255,888 250,135 ================================ At the end of the fiscal year of 30 September 2002, the Company had deferred funds of $75,000 from Alma Inc., a company incorporated in Japan. The funds were advanced by Alma Inc. in anticipation of a merger with PeakSoft Multinet Corp. With the authority of Alma Inc., the funds were used by PeakSoft to pay the expenses related to the anticipated merger over the last two quarters. These transactions are in the normal course of operations and are measured at the exchange amount, which is the amount of consideration established and agreed to by related parties. 9. United States GAAP reconciliation: The consolidated financial statements have been prepared in accordance with generally accepted accounting principles ("GAAP") in Canada. These principles differ in the following material respects from those in the United States as summarized below: (a) Loss and loss per share: Period period Ended Ended March 31, 2003 March 31, 2002 $ $ -------------------------------- Loss in accordance with Canadian GAAP (444,818) (461,890) Difference in accounting for acquired research and development (note d) - - -------------------------------- Loss in accordance with United States GAAP (444,818) (461,890) -------------------------------- Loss per common share $ 0.12 $ 0.12 ================================ Weighted average number of shares used for calculation 3,830,974 3,830,974 ================================ 7 PEAKSOFT MULTINET CORPORATION Notes to the Consolidated Financial Statements Period ended 31 March 2003 and 2002 (Unaudited - See Notice to Reader) (b) Balance sheet: The amounts in the consolidated balance sheet that differ from those reported under Canadian GAAP are as follows: 31 March 2003 31 March 2002 Canadian United States Canadian United States GAAP GAAP GAAP GAAP $ $ $ $ ------------------------------------------------------ Accumulated deficit 17,193,017 16,370,788 16,343,830 15,521,601 ====================================================== (c) Statement of cash flows: Cash used in operations and cash provided by financing activities would decrease by $822,229 for the quarter ended 31 March 2003 and $822,229 for the comparable period in 2002. (d) Research and development: In accordance with United States GAAP, research and development costs, including the costs of research and development acquired in a business combination is charged to operations as it is incurred. (e) Stock based compensation: The Company records compensation expense for United States GAAP purposes following the intrinsic value principles of Accounting Principles Board Opinion 25, "Accounting for Stock Issued to Employees" (APB 25) in accounting for the options issued under the Company's stock option plan. Under APB 25, no compensation expense has been recognized for its stock based compensation plans in the Quarter ended 31 March 2003 and in comparable periods in 2002 - nil and 2000 - nil. The Company has elected the disclosure provisions of Statement of Financial Accounting Standards No. 123 ("FAS 123"), "Accounting for Stock-Based Compensation," for United States GAAP purposes. Had compensation cost for the Company's stock option plan been determined based on the fair value at the grant date for awards under those plans consistent with the measurement provisions of FAS 123, the Company's loss and loss per share under United States GAAP would have been adjusted as follows: (f) Taxation: For U.S. GAAP purposes, income taxes are accounted for in accordance with Statement of Financial Accounting Standards No. 109 ("FAS 109"), "Accounting for Income Taxes." FAS 109 requires the asset and liability method whereby deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing asset and liabilities and their respective tax bases. 8 PEAKSOFT MULTINET CORPORATION Notes to the Consolidated Financial Statements Period ended 31 March 2003 and 2002 (Unaudited - See Notice to Reader) Period Period Ended Ended March 31, 2003 March 31, 2002 $ $ -------------------------------- Loss - as reported 444,818 461,890 Loss - stock option value adjusted - - Loss per common share - as reported 0.12 0.12 Loss per common share - adjusted 0.12 0.12 The fair value of each option grant is estimated on the date of the grant using the following assumptions: Period Period Ended Ended March 31, 2003 March 31, 2002 -------------------------------- Expected dividend yield 0% 0% Expected stock price volatility N/A N/A% Risk-free interest rate N/A N/A% Expected life of options N/A N/A% Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided on deferred tax assets to the extent it is not more likely than not that such deferred tax assets will be realized. Under FAS 109, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company has deferred tax assets of approximately $8,500,000 (2001 - $7,150,000, 2000 - $6,500,000 and 1999 - $5,000,000) arising from losses carried forward. The Company has provided a valuation allowance against the entire deferred tax asset amount as it is more likely than not that they will not be realized. 10. Commitments: There are no other commitments outstanding not already reported elsewhere in these notes to the financial statements. 11. Income taxes: The Company has non-capital losses from foreign and Canadian operation available for offset against future taxable income totaling approximately USD $4,200,000 in the United States and CDN $7,700,000 in Canada. 12. Subsequent Events: Subsequent to the close of the period, the Company filed applications with the Alberta Securities Commission, the British Columbia Securities Commission and the Ontario Securities Commission for revocation of the cease trade orders that had been issued against the Company in March 2002 due to its having been delinquent in the making of its financial filings. These filings could not be made due to the financial hardship that the Company was experiencing. 9 PEAKSOFT MULTINET CORPORATION Notes to the Consolidated Financial Statements Period ended 31 March 2003 and 2002 (Unaudited - See Notice to Reader) On July 24, 2003 the Alberta Securities Commission issued an order granting the Company a partial revocation of the Cease Trade Order that it had issued in March 2002. 13. Comparative figures: Certain of the comparative amounts have been reclassified to conform with the financial presentation adopted in the current fiscal year. This release may contain forward-looking statements as well as historical information. Forward-looking statements, which are included in accordance with the "safe harbor" provisions of the "Private Securities Litigation Reform Act of 1995, may involve known and unknown risks, uncertainties and other factors that may cause the company's actual results and performance to be materially different from any results or performance suggested by the statements in this release. Such statements, and other matters addressed in this press release, may involve a number of risks and uncertainties including price competition, technological advances, decreased demand or diversion to other software solutions. 10 Company Information: Corporate Headquarters PeakSoft Multinet Corp. 3930 Meridian Street, Suite C117 Bellingham, WA 98226 USA Tel: (360) 961-1419 Fax: (360) 647-5960 Investor Relations PeakSoft Multinet Corp. (360) 961-1419 Stock Listing PeakSoft Multinet Corp. common stock is listed on the TSX Venture Exchange under symbol PKS. Auditor Gordon K. W. Gee, Chartered Accountant #101 - 325 Howe Street Vancouver, BC V6C 1Z7 Tel: (604) 689-8815 Fax: (604) 689-8838 Corporate Counsel Forbes, Boyle & Patterson Barristers & Solicitors Suite 215 -8171 Cook Road Richmond, BC V6Y 3T8 Tel: (604)-273-7575 Fax: (604)-273-8475 Transfer Agent and Registrar Computershare Trust Company of Canada, Calgary, Alberta Directors Timothy W. Metz, Chairman of the Board Simon Arnison, Director Jesyka Anne Clarkson, Director Management Timothy W. Metz, Chief Executive Officer and President 11

PEAKSOFT MULTINET CORP 6-K/A