-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Qi08vY/EfKmpJYGIKB/Lg9pL9NHVerYkWbfVa1qi5VL/loM3cINs3pxyzHEgY2Af Ul/Ft/zvtGO3WAcONPyeJg== 0001094328-99-000044.txt : 19991117 0001094328-99-000044.hdr.sgml : 19991117 ACCESSION NUMBER: 0001094328-99-000044 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991115 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTEGRATED CARBONICS CORP CENTRAL INDEX KEY: 0001058330 STANDARD INDUSTRIAL CLASSIFICATION: MINING, QUARRYING OF NONMETALLIC MINERALS (NO FUELS) [1400] IRS NUMBER: 43163270 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-24723 FILM NUMBER: 99754107 BUSINESS ADDRESS: STREET 1: 1600 E DESERT INN RD STREET 2: SUITE 102 CITY: LAS VEGAS STATE: NV ZIP: 89109 BUSINESS PHONE: 7027322253 MAIL ADDRESS: STREET 1: 1600 E DESERT INN RD STREET 2: SUITE 102 CITY: LAS VEGAS STATE: NV ZIP: 89109 10QSB 1 U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______________ TO ______________ COMMISSION FILE NUMBER: 000-24723 Urbana.ca, Inc. (Exact name of registrant as specified in its charter) Nevada 88-0393257 (State or jurisdiction of incorporation I.R.S. Employer or organization) Identification No. 750 West Pender Street, Suite 804, Vancouver, British Columbia V6C 2T8 (Address of principal executive offices) (Zip Code) Registrant's telephone number: (604) 682-8445 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.001 Par Value 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) been subject to such filing requirements for the past 90 days. Yes No X . As of September 30, 1999, the registrant had 10,031,350 shares of common stock issued and outstanding. Transitional Small Business Disclosure Format (check one): Yes No X . TABLE OF CONTENTS PART I - FINANCIAL INFORMATION PAGE ITEM 1. FINANCIAL STATEMENTS BALANCE SHEETS AS OF SEPTEMBER 30, 1999 AND DECEMBER 31, 1998 3 STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDEDd SEPTEMBER 30, 1999 AND SEPTEMBER 30, 1998 4 STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND SEPTEMBER 30, 1998 5 NOTES TO FINANCIAL STATEMENTS 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 11 PART II ITEM 1. LEGAL PROCEEDINGS 14 ITEM 2. CHANGES 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 SIGNATURE 15 PART I. ITEM 1. FINANCIAL STATEMENTS. URBANA.CA, INC (formerly Integrated Carbonics Corp.) (A development stage company) Balance Sheets (prepared by management and without audit) 30 Sep 99 31 Dec 98 _________ _________ Assets Cash in hand and at Bank $ 60 $ 713 Prepaid expenses - 2,342 _________________________________________________________________________ Total Current Assets 60 3,055 _________________________________________________________________________ Capital Assets Fixed Assets - - Property, Plant and Equipment (Note 4) 3,031 4,784 Other Assets Investment in graphite processing joint venture (Note 7) 253,408 253,408 _________________________________________________________________________ 256,439 258,192 _________________________________________________________________________ Total Assets 256,499 261,247 _________________________________________________________________________ Liabilities and Stockholder's Equity Accounts Payable 160,578 156,360 Other Current Liabilities 34,144 - Shareholder Loan 50,000 - Current portion of long-term debt (Note 7) 130,000 130,000 _________________________________________________________________________ Total Current Liabilities 374,722 286,360 _________________________________________________________________________ Long-term debt less current portion (Note 7) - - _________________________________________________________________________ Total Liabilities 374,722 286,360 _________________________________________________________________________ Stockholders' Equity (Deficit) Common Stock (Note 9) 10,006 9,856 Additional paid-in capital 713,220 673,590 Deficit accumulated during the development stage (841,449) (708,559) _________________________________________________________________________ Total Stockholers' Equity (Deficit) (118,223) ( 25,113) _________________________________________________________________________ Total Liabilities and Stockholders' Equity (Deficit) $ 256,499 $ 261,247 _________________________________________________________________________ See accompanying Notes To The Financial Statements) URBANA.CA, INC. (formerly Integrated Carbonics Corp.) (a development stage company) STATEMENT OF OPERATIONS For the 9-month period ended September 30, 1999 (prepared by management and without audit _________________________________________________________________________ February 23, 1993 Nine Months Ended Three Months Ended (inception to 30-Sep-99 30-Sep-98 30-Sep-99 30-Sep-98 30-Sep-99 _________ _________ _________ _________ _____________ Operating Expenses Amortization $ 1,753 $ 3,071 $ 584 $ 1,024 $ 6,139 Engineering Costs - - - - 274,170 General and Adm expenses 97,832 198,993 (110,907) 32,843 314,323 Interest and bank charges 266 3,467 133 1,159 9,902 Legal and accounting 6,141 - 2,890 - 63,746 Transfer agent and filing fees 10,350 3,816 3,046 3,446 23,300 Rent 16,548 26,299 5,023 7,867 51,165 Salaries and wages - 81,856 - 12,677 83,704 Write-off of interest in mineral property - - - - 15,000 _________________________________________________________________________ 132,890 317,502 (99,231) 59,016 841,449 _________________________________________________________________________ NET LOSS $(132,890) $(317,502) $ 99,231 $(59,016) $(841,449) __________________________________________________________________________ NET LOSS PER SHARE-BASIC $ (0.01) $ (0.03) $ 0.01 $ (0.01) $ - __________________________________________________________________________ WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK OUTSTANDING 10,229,683 10,126,350 9,465,900 9,843,016 - __________________________________________________________________________ (See accompanying Notes to Financial Statements) URBANA.CA, INC. (formerly Integrated Carbonics Corp.) (a development stage company) STATEMENT OF CASH FLOWS For the 9-month period ended September 30, 1999 (Prepared by management and without audit __________________________________________________________________________ February 23 1993 Nine Months Ended Three Months Ended (inception to 30-Sep-99 30-Sep-98 30-Sep-99 30-Sep-98 30-Sep-99 _________ _________ _________ _________ ____________ Operating Activities Net loss $(132,890) $(317,502) $ 99,231 $ (59,016) $ (841,449) Add (less) Amortization 1,753 3,071 584 1,024 6,139 Imputed interest on long-term debt 9,000 Organization cost (308) Write-off interest in mineral property 15,000 Write-off other asset 4,500 Loss on disposal of property, plant and equipment 1,589 Net changes in working capital 90,704 77,915 33,907 (13,333) 225,627 __________________________________________________________________________ (40,433) (236,516) 133,722 (71,325) (579,902) ___________________________________________________________________________ FINANCIAL ACTIVITIES Repayment of long-term debt - (70,000) - - (70,000) Issuance of common stock 39,780 605,446 (133,722) 13,200 665,376 Suscription received - (37,000) - (5,250) 37,000 __________________________________________________________________________ 39,780 498,446 (133,722) 7,950 632,376 __________________________________________________________________________ INVESTMENT ACTIVITIES Purchase of property, plant and equipment - (11,423) (11,423) Proceeds on disposal of property, plant and equipment 972 Investment in a graphite processing joint venture (2,420) (37,463) Engineering costs Phase 1 - (265,640) (9,645) (4,500) ___________________________________________________________________________ - (279,483) - (9,645) (52,414) ___________________________________________________________________________ NET CASH INFLOW (653) (17,553) - (73,020) 60 CASH, BEGINNING OF PERIOD 713 44,576 60 100,043 - __________________________________________________________________________ CASH, END OF PERIOD $ 60 $ 27,023 $ 60 $ 27,023 60 __________________________________________________________________________ (See accompanying Notes To The Financial Statements) URBANA.CA, INC. (formerly Integrated Carbonics Corp.) (a development stage company) Notes to Financial Statements (Unaudited) For the Nine Months Ended September 30, 1999 1. DESCRIPTION OF BUSINESS The Company was organized on February 23, 1993 under the laws of the State of Delaware as PLR, Inc. On October 3, 1997, it changed its name to Integrated Carbonics Corp. and on October 30, 1997, changed its jurisdiction of incorporation to Nevada. On July 23, 1999 the Company changed its name to Urbana.ca, Inc. On April 15, 1999 a wholly owned subsidiary company, 583574 B.C Ltd. was incorporated under the laws of British Columbia in Canada as a means of entering into acquisitions in Canada. On May 4, 1999 the subsidiary company's name was changed to ICC Integrated Carbonics (Canada) Corp. The Company has signed joint venture agreements for the construction and operation of two graphite processing plants in the People's Republic of China. 2. CONTINUING OPERATIONS The financial statements have been prepared on the basis of accounting principles applicable to a going concern which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company is a development stage enterprise and as such has no significant revenue and is incurring substantial costs in connection with its investment in a graphite processing joint venture as described in Note 5. In addition the Company incurred a loss of $132,890 for the nine months ended September 30, 1999 and has a working capital deficiency of $374,662 at September 30, 1999. The Company's continued existence is dependent on its ability to obtain additional financing to proceed with the joint venture and ultimately to attain profitable operations. If the going concern assumption is not appropriate in the preparation of these financial statements, adjustments would be necessary to the carrying values of assets and liabilities, the reported loss and the balance sheet classifications used. 3. SIGNIFICANT ACCOUNTING POLICIES The financial statements are expressed in U.S. dollars, have been prepared in accordance with accounting principles generally accepted in the United States, and include the following significant accounting policies: (a) Investment in joint ventures. The Company records its investment in joint ventures at cost until such date as the venturers make their initial capital contribution at which time they are recorded on the equity basis. (b) Interest in mineral property. The Company follows the method of accounting for its interest in mineral property whereby initial costs related to the acquisition of mineral properties are capitalized by property. Exploration and development costs are expensed as incurred. The interest in mineral property will be written down on a property by property basis when a significant decline in value that is other than temporary has occurred and will be written off when a property is abandoned. (c) Property, plant and equipment. Property, plant and equipment are recorded at cost. Depreciation is charged to operations over the estimated useful lives of the assets as follows: Computer software straight line over 12 months Computer hardware straight line over 24 months Furniture and office equipment straight line over 60 months The carrying value of property, plant and equipment is reviewed on a regular basis for any permanent impairment in value. Where such impairment is indicated, property, plant and equipment are written down to estimated net realizable value. (d) Accounting estimates. Preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Actual results could differ from those estimates. (e) Net loss per share. Net loss per share is computed using the weighted average number of common shares outstanding during the period. Diluted loss per share has not been disclosed as the effect of common shares issuable upon the exercise of options or warrants would be anti- dilutive. In February 1997, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 128 ("SFAS 128"), "Earnings per Share". SFAS 128 is effective for the fiscal year ending after December 15, 1997. SFAS 128 redefines earnings per share under U.S. GAAP and replaces primary earnings per share with basic earnings per share and fully diluted earnings per share with diluted earnings per share. Net loss per share, as reported, is equal to the net loss per share based on SFAS 128 for all periods presented. (f) Recent accounting policies. In June 1998, the FASB issued Statement No. 133 ("SFAS 133"), "Accounting for Derivative Instruments and Hedging Activities". SFAS 133 establishes standards for accounting for derivative instruments. SFAS 133 is effective for fiscal years beginning after June 15, 1999. The Company does not expect that adoption of SFAS 133 will have a material effect on the Company's financial statements. 4. PROPERTY, PLANT AND EQUIPMENT Sept 30, Dec. 31, 1999 1998 Computer $ 1,692 $ 1,692 software Computer 1,520 1,520 hardware Furniture and office equipment 5,011 5,011 _______________________________________________________________________ 8,223 8,223 Less: accumulated depreciation (5,192) (3,439) _______________________________________________________________________ $ 3,031 $ 4,784 _______________________________________________________________________ 5. INVESTMENTS IN GRAPHITE PROCESSING JOINT VENTURES (a) Liumao. On October 7, 1997, the Company entered into an agreement with Da-Jung Resource Corp., a company controlled by certain directors of the Company, to acquire 100% of its rights and obligations pursuant to an "Agreement on Establishment of a Sino Foreign Equity Joint Venture" with Jixi Liumao Graphite Mine, of Heilongjiang Province, the People's Republic of China. Consideration for this agreement was 6,000,000 shares of the Company's post split common stock, plus $70,000 on the completion of the offering which has been paid, $50,000 on the exercise of all related warrants and $80,000 one year from the date of the offering or upon completion of additional financing, whichever comes first. In connection with the agreement, $130,000 is due on December 31, 1999. On November 10, 1997, the Company entered into a formal agreement with the Liumao Graphite Mine to form a joint venture company named ICC Liumao Graphite Products, Ltd. The purpose of the joint venture company is to establish value added graphite processing facilities at the Liumao Mine in China to produce high purity graphite, expandable graphite, graphite sheet or other graphite products. The total investment of the Company in the joint venture company is stipulated as 80% of anticipated joint venture construction costs of $28 million, and the Company will obtain an 80% share of the profits over a thirty year period. Further investment in the joint venture by the Company is contingent on the completion of additional financing arrangements with shareholders or third parties. The joint venture company has received regulatory approval. The investment in the graphite processing joint venture is valued at the cost to acquire the rights to enter into the joint venture plus legal and other costs incurred by the Company to negotiate the formal joint venture agreement. No capital investment in the joint venture has been made to date. (b) YiChang. On September 21, 1998, the Company entered into an interim agreement with YiChang Heng Da Graphite Group Company Ltd. ("YiChang") to obtain a 55% interest in a joint venture between YiChang and the Company. Under this joint venture agreement, YiChang will sell, at net book value, to the joint venture one of its operating divisions consisting of a new mine and mineral processing plant and a graphite sheet manufacturing plant. The Company will contribute RMB 28.6 million ($3.84 million) according to a contribution schedule to be negotiated. The joint venture will then proceed to construct additional graphite sheet manufacturing capacity and, at its option, construct a fluorographite and lithium ion battery manufacturing facility. As of September 30, 1999, no costs have been incurred. The Joint Venture Agreement was formally executed in April 1999. 6. INTEREST IN MINERAL PROPERTY On September 22, 1997, the Company entered into an agreement with Da-Jung Resource Corp., a company controlled by certain directors of the Company, to acquire 100% of its interest in the Yue-jinshan-Zianfengbei mineral property, in the Wandashan mineralization zone of Heilongjiang Province, People's Republic of China, in exchange for 150,000 shares of the Company's common stock valued at $0.10 per share. During 1998, the interest in mineral property was written off. 7. LONG-TERM DEBT Sept.30 Dec. 31, 1999 1998 ________ ________ Amount payable to Da-Jung Resource Corp. on acquisition of its interest in the graphite processing joint venture (Note 5(a)) $ 130,000 $ 130,000 Current portion (130,000) (130,000) ______________________________________________________________________ $ - $ - _______________________________________________________________________ The long-term debt is unsecured and non-interest bearing and as a result was recorded on a present-value basis to December 31, 1998 with imputed interest recognized at 8%. During the period, the repayment terms were extended to December 31, 1999. 8. SHARE CAPITAL The company has given retroactive effect and restated share numbers to give effect to the following capital transactions: (a) On March 15, 1996, at a meeting of the Board of Directors, the Board approved amending its Articles of Incorporation. These amendments were approved by a majority vote of the shareholders. The Company authorized changing its authorized common stock of 15,000 shares with $5.00 par value, to 50,000,000 common shares with par value $.001 and 10,000,000 preferred shares with a par value $.001. The Company also approved a forward stock split on the basis of 3,500:1, increasing the number of outstanding shares from 600 shares to 2,100,000 shares. (b) On January 17, 1997, at a special meeting of the shareholders, the shareholders approved, effective January 4, 1997, a forward stock split of 5:1, increasing the number of common shares outstanding from 2,100,000 common shares to 10,500,000 common shares outstanding. (c) On October 31, 1997, at a special meeting of the shareholders, the shareholders approved a reverse stock split of 1:100 thus reducing the number of common shares outstanding from 25,500,000 shares to 255,000 shares of common stock. On October 31, 1997, at a special meeting of the shareholders, the shareholders authorized a Regulation D Rule 504 offering of a maximum of 2,300,000 units at $.10 per unit consisting of one common share and one warrant exercisable at $.33 per share for six months. (d) In January 1999, the Company entered into a one-year corporate finance advisory agreement, cancellable at any time on 30 days' written notice, with a third party and agreed to issue, as partial consideration, 350,000 common shares at predetermined dates over the course of the contract. The common shares are subject to registration and, to March 31, 1999, 150,000 common shares have been delivered at a deemed value of $39,780. The finance agreement was subsequently cancelled such that no future shares are required to be delivered in respect of this agreement. Also in January 1999, the Company entered into a marketing agreement with another third party and issued, as partial consideration, 360,000 common shares, at a deemed value of $133,722 which are subject to registration. The parties subsequently agreed to terminate the marketing agreement and in August 1999 cancelled the 360,000 common shares previously issued. As at September 30, 1999 25,000 shares were held in escrow. 9. STOCK OPTIONS During the period the Company adopted a new Stock Option Plan and cancelled all previously granted stock options. The newly adopted Stock Option Plan will provide options to purchase up to 2,000,000 common shares of the Company for its employees, officers and directors. The options that will be granted pursuant to the Stock Option Plan are exercisable at a price of $0.50 which is equal to the fair value of the common shares at the time of adoption. 10. RELATED PARTY TRANSACTIONS (a) As of September 30 1999, liabilities include $11,216 (1998 - $10,529) due to companies controlled by certain directors of the Company. The amounts are unsecured, interest-free, and do not have fixed repayment terms. (b) The Company entered into the following transactions with companies controlled by certain directors of the Company: Nine Months Ended September 30 1999 1998 ____ _____ Rent $ 14,923 $ 19,993 Office expenses and travel 597 5,546 Miscellaneous expense 2,796 Management fees 24,178 Consultancy fee 9,668 The Company has entered into an agreement to lease premises from a company controlled by certain directors as described in Note 11. 11. COMMITMENTS On December 8, 1997, the Company entered into a one-year lease commitment effective January 1, 1998 for $6,600 plus applicable operating costs. During 1998, this lease was extended to December 31, 1999. 12. SUBSEQUENT EVENTS During the period the Company entered into an agreement to acquire, through its wholly owned Canadian subsidiary, ICC Integrated Carbonics (Canada) Corp., the entire equity interest of HomeNet100.com Enterprises, Inc.("HomeNet"). Completion of the acquisition is subject to finalizing a formal agreement with HomeNet. 13. PRIOR YEARS' AMOUNT Certain of prior years' amounts have been reclassified where applicable, to conform with the current year's presentation. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. The following discussion should be read in conjunction with the financial statements of the Company and notes thereto contained elsewhere in this report. Results of Operations. During the three month period ended September 30, 1999, the Company continued with its program to develop itself (formerly Integrated Carbonics Corp.) into an operating company. For the nine months ended September 30, 1999, the Company had a net loss of $132,890 or 1 cent per share. This loss compares with a loss of $317,502 or 3 cents per share for the corresponding nine month period last year. During the three months ended September 30, 1999, the Company continued to seek financing for its joint ventures in China. In this regard, the Company engaged consultants to assist the Company concerning structuring development plans, financing strategies, shareholder communications, and creating awareness with the brokerage community by electronic means. While continuing with efforts to obtain financing for the Company's China graphite projects, management implemented a diversification strategy late in the first quarter, in an attempt to reduce the risk of being unable to make progress in that financing effort. During this period, the Company entered into a letter of intent to acquire the entire equity interest of HomeNet100.com Enterprises, Inc. ("HomeNet") through its wholly owned Canadian subsidiary, ICC Integrated Carbonics (Canada) Corp. which had been incorporated for that purpose. HomeNet is an e-commerce company established to tap the rapidly growing market for home furnishings and accessories with an e-commerce only brand and business model. The acquisition received approval from both the Company and HomeNet shareholders. During the three months ended September 30, 1999, the Company cancelled all outstanding stock options previously granted to directors, officers, and employees of the Company and has cancelled its 1998 revised stock option plan. A new stock option plan received shareholders' approval and was adopted during the period. During this period, the Company cancelled the corporate finance advisory agreement originally executed in January 1999 along with shares that had been issued in respect of this agreement for consulting services. In addition the Company cancelled a marketing agreement with a third party also executed in January 1999. Liquidity and Capital Resources. During the three month period ended September 30, 1999, the Company continued its status as a development company. The Company is continuing to incur development expenses, is deriving no revenues, and has experienced an ongoing deficiency in working capital. The Company's continued existence is dependent on its ability to obtain additional financing to proceed with investment in its joint ventures and ultimately to attain profitable operations from its joint ventures and the newly acquired e-commerce venture. At September 30, 1999 the Company had a working capital deficiency of $374,662. This compares with a working capital deficiency of $283,305 at December 31, 1998. The Company continues efforts to arrange suitable financing for its China projects but reports that to date no commitments have been made. The Company is also continuing with the requirements to complete its aquistion of HomeNet. Only essential administrative expenses are being incurred. Capital Expenditures. No material capital expenditures were made during the quarter ended on September 30, 1999. Year 2000 Issue. The Year 2000 issue arises because many computerized systems use two digits rather than four to identify a year. Date sensitive systems may recognize the year 2000 as 1900 or some other date, resulting in errors when information using the year 2000 date is processed. In addition, similar problems may arise in some systems which use certain dates in 1999 to represent something other than a date. The effects of the Year 2000 issue may be experienced before, on, or after January 1, 2000, and if not addressed, the impact on operations and financial reporting may range from minor errors to significant system failure which could affect the Company's ability to conduct normal business operations. This creates potential risk for all companies, even if their own computer systems are Year 2000 compliant. It is not possible to be certain that all aspects of the Year 2000 issue affecting the Company, including those related to the efforts of customers, suppliers, or other third parties, will be fully resolved. The Company currently believes that its systems are Year 2000 compliant in all material respects. Although management is not aware of any material operational issues or costs associated with preparing its internal systems for the Year 2000, the Company may experience serious unanticipated negative consequences or material costs caused by undetected errors or defects in the technology used in its internal systems. The Company's Year 2000 plans are based on management's best estimates. Forward Looking Statements. The foregoing Management's Discussion and Analysis contains "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as amended, and as contemplated under the Private Securities Litigation Reform Act of 1995, including statements regarding, among other items, the Company's business strategies, continued growth in the Company's markets, projections, and anticipated trends in the Company's business and the industry in which it operates. The words "believe," "expect," "anticipate," "intends," "forecast," "project," and similar expressions identify forward-looking statements. These forward-looking statements are based largely on the Company's expectations and are subject to a number of risks and uncertainties, certain of which are beyond the Company's control. The Company cautions that these statements are further qualified by important factors that could cause actual results to differ materially from those in the forward looking statements, including, among others, the following: reduced or lack of increase in demand for the Company's products, competitive pricing pressures, changes in the market price of ingredients used in the Company's products and the level of expenses incurred in the Company's operations. In light of these risks and uncertainties, there can be no assurance that the forward-looking information contained herein will in fact transpire or prove to be accurate. The Company disclaims any intent or obligation to update "forward looking statements". PART II. ITEM 1. LEGAL PROCEEDINGS. The Company is not a party to any material pending legal proceedings and, to the best of its knowledge, no such action by or against the Company has been threatened. ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS. None. ITEM 3. DEFAULTS UPON SENIOR SECURITIES. Not Applicable. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. None ITEM 5. OTHER INFORMATION. None. ITEM 6. EXHBITS AND REPORTS ON FORM 8-K. (a) Reports on Form 8-K. No reports on Form 8-K were filed during the third quarter of the fiscal year covered by this Form 10-QSB. (b) Exhibits included or incorporated by reference herein: See Exhibit Index. SIGNATURE Pursuant to the requirements of Section 13 or 15(d) 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. Urbana.ca, Inc. Dated: November 12, 1999 By: /s/ Jason Cassis Jason Cassis, President EXHIBIT INDEX Exhibit No. Description ___________ ___________ 2 Articles of Merger of Foreign Corporation into Integrated Carbonics Corp. (incorporated by reference to Exhibit 2 to the Registration Statement on Form 10-SB/A filed on December 17, 1998. 3.1 Articles of Incorporation of Integrated Carbonics Corp. (incorporated by reference to Exhibit 3.1 of the Registration Statement on Form 10-SB/A filed on December 17, 1998. 3.2 Certificate of Amendment to Articles of Incorporation of Integrated Carbonics Corp. (see below). 3.3 Bylaws of Integrated Carbonics Corp. (incorporated by reference to Exhibit 3.2 of the Registration Statement on Form 10-SB/A filed on December 17, 1999. 4 Integrated Carbonics Corp. 1999 Stock Option Plan (see below). 10.1 September 22, 1997 Agreement between Da-Jung Resource Corp. and PLR, Inc. (incorporated by reference to Exhibit 10.1 of the Registration Statement on Form 10-SB/A filed on December 17, 1998). 10.2 October 7, 1997 Agreement between Da-Jung Resource Corp. and Integrated Carbonics Corp. (incorporated by reference to Exhibit 10.2 of the Registration Statement on Form 10-SB/A filed on December 17, 1998). 10.3 September 9, 1997 Agreement on Establishment of Sino Equity Joint Venture, China-Canada Liumao Graphite Products Co. Ltd. (incorporated by reference to Exhibit 10.3 of the Registration Statement on Form 10-SB/A filed on December 17, 1998). EXHIBIT INDEX Exhibit No. Description ___________ ___________ 10.4 November 10, 1997 Equity Joint Venture Liumao Graphite Mine and Integrated Carbonics Corp. (incorporated by reference to Exhibit 10.4 of the Registration Statement on Form 10-SB/A filed on December 17, 1998). 10.5 August, 1997 Cooperative Joint Venture Agreement between Heilongjiang Geological and Mining Technology Development Corp. and Da-Jung Resource Corp. (incorporated by reference to Exhibit 10.5 of the Registration Statement on Form 10-SB/A filed on December 17, 1998). 27 Financial Data Schedule (see below). EX-3.2 2 CERTIFICATE OF AMENDMENT TO ARTICLES OF INCORPORATION CERTIFICATE OF AMENDMENT TO ARTICLES OF INCORPORATION OF INTREGRATED CARBONICS CORP. Mario Aiellot, President of INTEGRATED CARBONICS CORP. (the "Corporation") certifies that: 1. The original articles were filed with the Office of the Secretary of State on October 10, 1997. 2. As of the date of this certificate shares of stock of the corporation have been issued. 3. Pursuant to a shareholders meeting at which in excess of 51% voted in favor of the following amendment, the company hereby adopts the following amendments to the Articles of Incorporation of this Corporation: Article I: The Name of the Corporation: The Name of the Corporation will be URBANA.CA, INC. /s/ Mario Aiello Mario Aiello, President /s/ Robert S. Tyson Robert S. Tyson, Secretary Province of British Columbia Country of Canada On July 16, 1999, Mario Aiello personally appeared before me, a Notary public, who acknowledged that he executed the above instrument. /s/ A Notary Public in the Province of British Columbia, Canada Province of British Columbia Country of Canada On July 16, 1999, Robert S. Tyson personally appeared before me, a Notary public, who acknowledged that he executed the above instrument. /s/ A Notary Public in the Province of British Columbia, Canada EX-4 3 1999 STOCK OPTION PLAN INTEGRATED CARBONICS CORP. (the "Corporation") 1999 STOCK OPTION PLAN 1. Purpose of the Plan The purpose of the plan is to provide certain directors, officers and key employees of, and certain other persons or business entities who provide services to, the Corporation and its Subsidiaries with an opportunity to purchase Common Shares and to benefit from any appreciation in the value thereof. This will provide an increased incentive for these individuals or business entities to contribute to the future success and prosperity of the Corporation, thus enhancing the value of the Common Shares for the benefit of all the shareholders and increasing the ability of the Corporation and its Subsidiaries to attract and retain skilled and motivated individuals in the service of the Corporation. 2. Defined Terms Where used herein, the following terms shall have the following meanings, respectively: (a) "Board" means the board of directors of the Corporation; (b) "Common Shares" means the common shares of the Corporation or, in the event of an adjustment contemplated by Article 6 hereof, such other Common Shares to which a Participant may be entitled upon the exercise of an Option as a result of such adjustment; (c) "Corporation" means Integrated Carbonics Corp. and includes any successor corporation thereof; (d) "Exchange" means OTC Bulletin Board or, if the Common Shares are not then listed and posted for trading on the OTC Bulletin Board, on such stock exchange on which such shares are listed and posted for trading as may be selected for such purpose by the Board; (e) "Market Price" per Common Share at any date shall be $0.50 per share; (f) "Option" means an option to purchase Common Shares granted by the Board to Participants, subject to the provisions contained herein; (g) "Option Price" means the price per share at which Common Shares may be purchased under the Option, as the same may be adjusted in accordance with Articles 4 and 6 hereof; (h) "Participants" means certain directors, officers and key employees of, and certain other persons or business entities who provide services to, the Corporation to whom Options are granted and which Options or a portion thereof remain unexercised; (i) "Plan" means the 1999 Stock Option Plan of the Corporation, as the same may be amended or varied from time to time; and (j) "Subsidiary" means any corporation which is controlled by the Corporation. 3. Administration of the Plan 3.1 The Plan shall be administered by the Board. The Corporation shall effect the grant of Options under the Plan, in accordance with determinations made by the Board, pursuant to the provisions of the Plan, as to those individuals or business entities eligible to be Participants and the number of Common Shares which shall be the subject of each Option, by the execution and delivery of a stock option agreement in such form which is consistent with the provisions of the Plan as may be approved by the Board. 3.2 The Board may, from time to time, adopt such rules and regulations for administering the Plan as it may deem proper and in the best interest of the Corporation and may, subject to the applicable law, delegate its powers hereunder to administer the Plan to a committee of the Board. 4. Granting of Options 4.1 The Board from time to time may grant Options to certain individuals or business entities eligible to be Participants. The grant of Options will be subject to the conditions contained herein and may be subject to additional conditions determined by the Board from time to time. 4.2 The aggregate number of Common Shares reserved for issuance under the Plan must not exceed 10% of the issued and outstanding Common Shares of the Company (on a non-diluted basis). The aggregate number of Common Shares reserved for issuance to any one person or business entity under the Plan must not exceed 2% of the issued and outstanding Common Shares of the Company (on a non- diluted basis). The Common Shares in respect of which Options are not exercised shall be available for subsequent options. No fractional shares may be purchased or issued hereunder. 4.3 The Option Price shall be calculated by the Board and shall be a minimum of the Market Price less a discount as deemed appropriated by the Board of Directors subject always to regulatory requirements. 4.4 An Option must be exercised within a period of one year from the date of the granting of the Option. The limitation period or periods within this one year period during which an Option or a portion thereof may be exercised by a Participant shall be determined by the Board. 5. Exercise of Option Subject to the provisions of the Plan and the terms of the granting of the Option, an Option or a portion thereof may be exercised from time to time by delivery to the Corporation at its head office of a notice in writing signed by the Participant or the Participant's legal personal representative and addressed to the Corporation. This notice shall state the intention of the Participant or the Participant's legal representative to exercise the said Option or a portion thereof, the number of Common Shares in respect of which the Option is then being exercised, and must be accompanied by payment in full of the Option Price for the Common Shares which are the subject of the exercise. 6. Adjustment in Shares 6.1 Appropriate adjustments in the number of Common Shares subject to the Plan and, as regards Options granted or to be granted, in the number of Common Shares optioned and in the Option Price, shall be made by the Board to give effect to adjustments in the number of Common Shares resulting from subdivisions, consolidations or reclassification of the Common Shares or other relevant changes in the authorized or issued capital of the Corporation. 6.2 Options granted to Participants hereunder are non-assignable and, except in the case of the death of a Participant who is an individual (which is provided for in Section 8), are exercisable only by the Participant to whom the Options have been granted; provided that subject to the prior approval of the Board an Option may be assigned to a corporation controlled by the Participant and 100% beneficially owned by the Participant and his spouse or children, which control and ownership shall continue for as long as any part of the Option remains unexercised. 7. Decisions of the Board All decisions and interpretations of the Board respecting the Plan or Options granted thereunder shall be conclusive and binding on the Corporation and the Participants and their respective legal representative and on all directors, officers, employees and other persons or business entities eligible under the provisions of the Plan to participate therein. 8. Termination of Employment/Death 8.1 If a Participant ceases to be a director, officer, employee, person or business entity providing services to the Corporation (other than death), with written approval of the Board of Directors, he may within 30 days following his ceasing to be a director, officer, employee, person or business entity providing services to the Corporation, exercise his Option to the extent that he was entitled to exercise it at the date of such cessation. 8.2 In the event of the death of a Participant who is an individual, the Option previously granted to him shall be exercisable only within twelve months following such death and then only: (a) by the person or persons to whom the Participant's rights under the Option shall pass by the Participant's will or the laws of descent and distribution; and; (b) if and to the extent that he was entitled to exercise the Option at the date of his death. 8.3 The Plan does not confer upon a Participant any right with respect to continuation of employment or retention of services by the Corporation or any Subsidiary, nor does it interfere in any way with the right of the Participant or the Corporation to terminate the Participant's employment or retention at any time. 8.4 Options shall not be affected by any change of employment or retention of the Participant where the Participant continues to be employed or retained by the Corporation or any of its subsidiaries. 9. Effect of Takeover Bid 9.1 If a bona fide offer (the "Offer") for Common Shares is made to the Participant or to shareholders generally or to a class of shareholders which includes the Participant, which Offer, if accepted in whole or in part, would result in the offeror exercising control over the Corporation, then the Corporation shall, immediately upon receipt of notice of the Offer, notify each Participant currently holding an Option of the Offer, with full particulars thereof; whereupon, such Option may be exercised in whole or in part by the Participant so as to permit the Participant to tender the Common Shares received upon such exercise (the "Option Shares") pursuant to the Offer. If: (a) the Offer is not completed within the time specified therein; or (b) the Participant does not tender the Optioned Shares pursuant to the Offer; or (c) all of the Optioned Shares tendered by the Participant pursuant to the Offer are not taken up and paid for by the offeror in respect thereof; then the Optioned Shares or, in the case of clause (c) above, the Optioned Shares that are not taken up and paid for shall be returned by the Participant to the Corporation and reinstated as authorized but unissued Common Shares and the terms of the Option as set forth in the Plan shall again apply to the Option. If any Optioned Shares are returned to the Corporation under this Section, the Corporation shall refund the exercise price to the Optioned for such Optioned Shares. In no event shall the Participant be entitled to sell the Optioned Shares otherwise than pursuant to the Offer. 10. Effect of Amalgamation, Consolidation or Merger 10.1 If the Corporation amalgamates, consolidates with or merges with or into another corporation any Common Shares receivable on the exercise of an Option shall be converted into the securities, property or cash which the Participant would have received upon such amalgamation, consolidation or merger if the Participant had exercised his Option immediately prior to the record date applicable to such amalgamation, consolidation or merger, and the Option Price shall be adjusted appropriately by the Board and such adjustment shall be binding for all purposes of the Plan. 11. Amendment or Discontinuance of Plan 11.1 The Board may amend or discontinue the Plan at any time without the consent of the Participants provided that such amendment shall not alter or impair any Option previously granted under the Plan except as permitted by the provisions of Article 6 hereof. Any amendment of the Plan may require the approval of the Corporation's shareholders. 12. Government Regulation 12.1 The Corporation's obligation to issue and deliver Common Shares under any Option is subject to: (a) the satisfaction of all requirements under applicable securities laws in respect thereof and obtaining all regulatory approvals as the Corporation shall determine to be necessary or advisable in connection with the authorization, issuance or sale thereof; (b) the admission of Common Shares to listing on any stock exchange on which such Common Shares may then be listed; and (c) the receipt from the Participant of such representations, agreements and undertakings as to future dealings in such Common Shares as the Corporation determines to be necessary or advisable in order to safeguard against the violation of the securities laws of any jurisdiction. In this connection, the Corporation shall take all reasonable steps to obtain such approvals and registrations as may be necessary for the issuance of such Common Shares in compliance with applicable securities laws and for the listing of such Common Shares on any stock exchange on which such Common Shares are then listed. 13. Participant's Rights A Participant shall not have any rights as a shareholder of the Corporation until the issuance of a certificate for Common Shares upon the exercise of an Option or a portion thereof, and then only with respect to the Common Shares represented by such certificate or certificates. 14. No Representation or Warranty The Corporation makes no representation or warranty as to the future market value of any Common Shares issued in accordance with the provisions of the Plan. 15. Effective Date The Plan shall become effective upon being adopted by the Board, provided that no payments or distributions of Common Shares may be made to any Participant under the Plan until such time as shareholders approval of the Plan is obtained. Plan approved by Consent Resolutions of the Board of Directors of the Corporation dated as of July 27, 1999. /s/ Robert S. Tyson Robert S. Tyson, Secretary EX-27 4 FINANCIAL DATA SCHEDULE WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S FORM 10-QSB AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1 PERIOD-TYPE> 9-MOS DEC-31-1999 JAN-01-1999 SEP-30-1999 60 0 0 0 0 60 3,031 0 256,499 374,722 0 0 0 10,006 (118,223) 256,499 0 0 0 0 132,890 0 0 (132,890) 0 (132,890) 0 0 0 (132,890) (.01) (.01)
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