Quantitative Alpha Trading (AGBTF) Inactive
Filed: 3 Sep 10, 12:00am
RTN STEALTH SOFTWARE INC.
(Formerly Arris Resources Inc.)
InterimConsolidated Financial Statements
Expressed in Canadian Dollars
Three and six months ended June 30, 2010
(Unaudited)
UNAUDITED INTERIM FINANCIAL STATEMENTS
In accordance with National Instrument 51-102 released by Canadian Securities Administrators, the
Company discloses that its auditors have not reviewed the unaudited consolidated interim financial
statements for the three and six months period ended June 30, 2010
RTN STEALTHSOFTWARE INC.
(Formerly Arris Resources Inc.)
ConsolidatedBalance Sheets
(Basic ofPresentation- note 2)
(Unaudited - expressed in Canadian Dollars)
June 30
December 31
2010
2009
(Unaudited)
Assets
Current assets
Cash and cash equivalents
$
175,035
$
379,284
Marketable securities (note 6 & 9b)
–
1,448,800
Amounts receivable
15,568
242,744
Prepaid expenses (note 7)
208,333
10,000
Short terminvestment (note 5)
50,033
–
448,969
2,080,828
Equipment (note 4)
11,671
3,940
License & software (note 7)
8,278,500
–
Prepayment - long term(note 7)
407,986
–
Mineralproperties (note 6 & 9b)
–
67,185
Oiland gas property (note 1)
–
1
$
9,147,126
$
2,151,954
Liabilities and Shareholders' Equity
Current liabilities
Accounts payable and accrued liabilities
$
10,754
$
75,072
10,754
75,072
Note payable -long term(note 7)
2,503,500
–
2,514,254
75,072
Shareholders' equity
Share capital(note 8a)
8,605,580
3,919,865
Contributed surplus (note 8c)
2,604,737
670,374
Accumulated comprehensive income (note 9b)
–
504,770
Deficit
(4,577,445)
(3,018,127)
$
9,147,126
$
2,151,954
Subsequent events-note 10
See accompanying notes to the interimconsolidated financial statements
Approved on behalf of the Board of Directors
"Nikolas Perrault"
"Lucky Janda"
Director
Director
RTN STEALTHSOFTWARE INC.
(Formerly Arris Resources Inc.)
ConsolidatedStatements of Operations
(Unaudited - expressed in Canadian Dollars except for number of shares)
Three months ended June 30
Six months ended June 30
2010
2009
2010
2009
Expenses
Advertising and promotion
$
28,291 $
–
50,923 $
–
Amortization
473
782
4,221
1,565
Bank charges and interest
823
267
1,062
359
Foreign exchange (gain)
-
12,084
-
(1,148)
Management,consulting and administrative
147,535
15,000
181,135
35,000
Office
14,052
991
17,053
1,043
Professionalfees
471
–
42,679
–
Rent
7,500
15,000
20,000
35,000
Property research fees
-
5,154
-
14,698
Stock-based compensation (note 8b)
-
146,288
1,736,064
146,288
Travel
6,461
–
7,961
–
Trust and filing fees
5,217
15,829
15,022
18,910
Loss before the following:
(210,823)
(211,395)
(2,076,120)
(251,715)
Interest income
21
–
33
–
Loss in write off of oiland gas property (note 1)
(1)
–
(1)
–
Release of un-realized gain in relation to the disposalof
marketible securities (note 9b)
–
–
504,770
–
Gain on spin-off of former subsidiaries (note 6)
–
–
12,000
–
Net loss forthe period
$
(210,803) $
(211,395)
$ (1,559,318) $
(251,715)
Loss pershare, basic and fully diluted
$
(0.00) $
(0.00)
$
(0.01) $
(0.00)
Weighted average numberofcommon shares
outstanding
111,779,497
68,517,965
105,632,330
68,517,965
See accompanying notes to the interimconsolidated financialstatements
ConsolidatedStatements of Deficit
(Unaudited - expressed in Canadian Dollars)
Three months ended June 30
Six months ended June 30
2010
2009
2010
2009
Deficit, beginning ofperiod
$ (4,366,642) $ (2,458,975)
$ (3,018,127) $ (2,418,655)
Net (loss) for the period
(210,803)
(211,395)
(1,559,318)
(251,715)
Deficit, end ofperiod
$ (4,577,445) $ (2,670,370)
$ (4,577,445) $ (2,670,370)
See accompanying notes to the interimconsolidated financial statements
RTN STEALTHSOFTWARE INC.
(Formerly Arris Resources Inc.)
ConsolidatedStatements of Comprehensive Income (Loss)
(Unaudited - expressed in Canadian Dollars)
Three months ended June 30
Six months ended June 30
2010
2009
2010
2009
Net loss for the period
$
(210,803) $
(211,395)
$ (1,559,318) $
(251,715)
Other comprehensive loss for the period
-
-
-
-
Totalcomprehensive loss for the period
$
(210,803) $
(211,395)
$ (1,559,318) $
(251,715)
See accompanying notes to the interimconsolidated financialstatements
RTN STEALTHSOFTWARE INC.
(Formerly Arris Resources Inc.)
ConsolidatedStatements of CashFlows
(Unaudited - expressed in Canadian Dollars)
Three months ended June 30
Six months ended June 30
Cash provided by (used in)
2010
2009
2010
2009
Operating activities
Income(loss) for the period
$
(210,803) $
(211,395)
$ (1,559,318) $
(251,715)
Items not involving cash
Accrued interest income
(21)
–
(33)
–
Amortization
473
782
4,221
1,565
Gain on spin-off of former subsidiaries (note 6)
–
–
(12,000)
–
Release of un-realized gain in relation to the disposalof
marketible securities (note 9b)
–
–
(504,770)
–
Management fees paid by share issuance (note 7)
8,681
–
8,681
–
Stock-based compensation (note 8b)
–
146,288
1,736,064
146,288
Write off of oiland gas properties (note 1)
1
–
1
–
(201,669)
(64,325)
(327,154)
(103,862)
Net changes in non-cash working capital
Amounts receivable
(3,193)
(230)
(10,825)
(1,533)
Prepaid expenses
–
–
10,000
18,655
Due to (from) related parties
–
–
–
(52,500)
Accounts payable
(54,246)
15,796
(52,318)
30,144
(259,108)
(48,759)
(380,297)
(109,096)
Investing activities
Purchase of equipment
(4,793)
–
(11,952)
–
Acquisition of short-terminvestment
(40,000)
(25,000)
(50,000)
(25,000)
(44,793)
(25,000)
(61,952)
(25,000)
Financing activities
Share subscription receivable
–
–
238,000
–
Share issuance cost
–
271,425
–
271,425
–
271,425
238,000
271,425
Increase (Decrease) in cash and cash equivalents
(303,901)
197,666
(204,249)
137,329
Cash and cash equivalents, beginning ofperiod
478,936
39,029
379,284
99,366
Cash and cash equivalents, end ofperiod
$ 175,035 $ 236,695
$ 175,035 $ 236,695
Supplementary information:
Cash received frominterest
$
– $
–
$
– $
–
Non-cash transactions:
Common shares issued for the acquisition of
license and software (note 7& 8b)
$ 5,625,000 $
–
$ 5,625,000 $
–
Common shares issued for prepaid expense and
prepayment-long term(note 7)
$ 616,319 $
–
$ 616,319 $
–
RTN STEALTH SOFRWARE INC.
(Formerly Arris Resources Inc.)
Notes to the Interim Consolidated Financial Statements
June 30, 2010
(Unaudited - expressed in Canadian dollars, unless stated otherwise)
1.
NATURE AND CONTINUANCE OF OPERATIONS
RTN Stealth Software Inc. (formerly known as Arris Resources Inc., hereinafter referred to as the
“Company” or “RTN Stealth”) is a public company incorporated in the Province of British Columbia,
Canada.
On December 21, 2009, the Company changed its name from Arris Resources Inc. to RTN Stealth Software
Inc. At the same time, the Company changed its trading symbol to RTN. The Company is listed on
Canadian National Stock Exchange.
Under the plan of arrangement effective January 5, 2010, the Company transferred its interest in five
mineral claims in British Columbia, Canada, its agreement with a British Columbia manufacturing
company to distribute its earthquake sensor products in India, and its marketable securities to its three
subsidiaries to complete the spin-off of its three former subsidiaries (note 6). The Company has entered
into the business of software sales and executed a definitive agreement to acquire an exclusive and
perpetual license for security trading software: the Market Navigation, Trade Execution, and Market
Timing Software, in January, 2010 and also acquired trading software in May, 2010 (Note 7). Management
also decided to abandon its remaining interest ($1) in oil and gas properties and recorded a write off
expense of $1 in June, 2010. After this series of corporate restructuring and acquisitions, the Company is
solely in the business of developing and promoting software for trading purposes.
The Company had a negative working capital of $120,118 and accumulated a deficit of $4,577,445 as at
June 30, 2010. As the Company has changed its business from resource exploration to a software business,
it is unsure whether the Company can successfully change its business model and strategic direction. The
ability of the Company to continue to operate as a going concern is dependent upon its ability to ultimately
operate its business at a profit. To date, the Company has not generated any revenues from operations and
will most likely require additional funds to meet its obligations and the costs of its operations. As a result,
further losses are anticipated prior to the generation of any profits.
The Company’s future capital requirements will depend on many factors, including the costs of operating
the software business. The Company’s anticipated operating losses and increasing working capital
requirements may require that it obtain additional capital to continue operations.
The Company will depend almost exclusively on outside capital. Such outside capital will include the sale
of additional shares. There can be no assurance that capital will be available as necessary to meet these
continuing operating costs or, if the capital is available, that it will be on terms acceptable to the Company.
Any issuing of additional equity securities by the Company may result in significant dilution to the equity
interests of its current shareholders. Obtaining commercial loans, assuming those loans would be available,
will increase the Company’s liabilities and future cash commitments. If the Company is unable to obtain
financing in the amounts and on terms deemed acceptable, the business and future success may be
adversely affected, thus giving rise to doubt about the Company’s ability to continue as a going concern.
The financial statements do not reflect adjustments to the carrying values of assets, liabilities or reported
results should the Company be unable to continue as a going concern.
RTN STEALTH SOFRWARE INC.
(Formerly Arris Resources Inc.)
Notes to the Interim Consolidated Financial Statements
June 30, 2010
(Unaudited - expressed in Canadian dollars, unless stated otherwise)
2.
BASIS OF PRESENTATION
These unaudited interim consolidated financial statements have been prepared in accordance with Canadian
generally accepted accounting principles (“Canadian GAAP”). They do not include all the disclosures as
required for annual financial statements under generally accepted accounting principles. These unaudited
interim consolidated financial statements should be read in conjunction with the Company's audited annual
consolidated financial statements for the year ended December 31, 2009, which are available through the
internet on SEDAR at www.sedar.com.
These consolidated financial statements include the accounts of RTN Stealth Software Inc. and its wholly
owned inactive subsidiaries: Arris Minerals Inc. (“AMI”) and Arris Oil & Gas Inc. (“AOG”).
All significant inter-company transactions and transactions have been eliminated upon consolidation.
3.
SIGNIFICANT ACCOUNTING POLICIES
These unaudited interim consolidated financial statements follow the same accounting policies and
methods of application as the Company's most recent audited annual financial statements for the financial
year ended December 31, 2009, except as described below.
i)
New Accounting Standards Not Yet Adopted:
International Financial Reporting Standards ("IFRS")
The AcSB has announced its decision to replace Canadian generally accepted accounting principles
(“Canadian GAAP”) with IFRS for all Canadian publicly-listed companies. The AcSB announced that the
changeover date will commence for interim and annual financial statements relating to fiscal years
beginning on or after January 1, 2011. The transition date for the Company to changeover to IFRS will be
January 1, 2010. Therefore, the IFRS adoption will require the restatement for comparative purposes of
amounts reported by the Company for the year ending December 31, 2010. The Company is currently
executing an IFRS conversion plan and is considering the accounting policy choices under IFRS.
4.
EQUIPMENT
June 30, 2010
December 31, 2009
Cost
Accumulated
Net
Net
Amortization
$
$
$
$
Office furniture
3,414
2,071
1,343
1,492
Computer equipment
21,901
11,823
10,078
2,347
Computer software
10,473
10,223
250
100
Leasehold improvements
2,522
2,522
-
-
33,517
26,166
11,671
3,939
5.
SHORT TERM INVESTMENT
The Company’s short term investment consisted of two guaranteed investment certificates (“GICs”) with
the principal amount totaling $50,000 plus accrued interest of $33. The two GICs are issued by a Canadian
chartered bank, have interest rates ranged from 0.82% to 1.4%, and will mature in the next 12 months.
RTN STEALTH SOFRWARE INC.
(Formerly Arris Resources Inc.)
Notes to the Interim Consolidated Financial Statements
June 30, 2010
(Unaudited - expressed in Canadian dollars, unless stated otherwise)
6.
CORPORATE RESTRUCTURING
On November 2, 2009, the Company and its three former wholly owned subsidiaries Arris Holdings Inc.
(“AHI”), CLI Resources Inc. (“CLI”) and QMI Seismic Inc. (“QMI”), collectively known as the “Parties”,
entered into a plan of arrangement (“Arrangement Agreement”) whereby the three former subsidiaries
would spin-out from the parent company, each becoming a reporting issuer and each acquiring an asset
from the Company in exchange for common shares (the “Common Shares”) of the respective subsidiary.
The change in corporate structure was effective on January 5, 2010 with the sequence of events as
summarized below:
I.
Altered the identifying name of the Company’s Common Shares to Class A Common Shares
without par value, being the RTN Class A Common Shares.
II.
Created a class consisting of an unlimited number of common shares without par value (the
“ Common Shares’’).
III.
Each issued RTN Class A Common Share was exchanged for one Common Share and one RTN
Class A Preferred Share (with no par value). The RTN Class A Common Share was eliminated
upon the completion of the Arrangement Agreement.
IV.
The Company transferred its interest in five mineral claims in Atlin, British Columbia (the
Mineral Properties) to CLI; an agreement with a British Columbia manufacturing company to
distribute its earthquake sensor products in India (the “Distribution Agreement”) to QMI; and all
of the Company’s marketable securities (the “Equity Portfolio”) to AHI in the consideration for
17,583,372 common shares of each of CLI, QMI, and AHI (collectively known as “Distributed
Shares”) issued by the three former subsidiaries respectively (note 9b).
V.
The Company redeemed the issued RTN Class A Preferred Shares for consideration consisting
solely of the Distributed Shares. Each shareholder of record as of the close business on November
5, 2009, being the share distribution record date, of the Company, has received its pro-rata share
of the Distributed Shares. RTN Class A Preferred Share was eliminated upon the completion of
the Arrangement Agreement.
7.
ACQUISITION OF SOFTWARE
On January 19, 2010, the Company executed a definitive agreement with privately owned Market Guidance
Systems Inc. (“MGS”) whereby the Company acquired a fully supported exclusive and perpetual license to
the Market Navigation, Trade Execution and Market Timing Software (the “RTN-Stealth Software”).
As consideration for the above, the Company issued 5,000,000 Class B preferred shares to the shareholders
of MGS. In connection with the acquisition, the Company paid a company controlled by a director of the
Company a transaction advisory fee of 250,000 Class B Preferred Shares (Note 8a). Each Class B Preferred
share is convertible into ten common shares of the Company when the cumulative net revenues derived from
the license of the RTN-Stealth Software reach a total of US$20,000,000.
On May 17, 2010, the Company executed two definitive agreements. In the first case the Company acquired
the RTN-Stealth Software from MGS, and in the second case the Company purchased the EMC-ALGO
Software Suite from ENAJ Mercantile Corporation (“ENAJ”).
RTN STEALTH SOFRWARE INC.
(Formerly Arris Resources Inc.)
Notes to the Interim Consolidated Financial Statements
June 30, 2010
(Unaudited - expressed in Canadian dollars, unless stated otherwise)
In the first case, the Company issued twenty million common shares of the Company to MGS shareholders
which are escrowed in four equal tranches at 6, 9, 12, and 15 months, and has assumed four promissory
notes, in the amount totalling US$2,407,212 (C$ equivalent 2,503,500), owed by MGS as the consideration
of the acquisition. In addition, the exclusive and perpetual license to market the RTN-Stealth Software that
was acquired in January 2010 was cancelled upon the completion of the acquisition of the RTN-Stealth
Software.
The details of the four promissory notes assumed are as follows:
Due date
Interest rate
Others
Four promissory notes
Principal and
Canadian business
Senior to any and all other
with the principal
interest are due on
prime rate + 1%
shareholder loans and shall
totalling US$2,407,212
May 15, 2012
per annum
be paid in full prior to
(C$ equivalent 2,503,500)
compound annually repayment by the Company
to any and all other
shareholder loans
In the ENAJ case, the Company issued two million five hundred thousand (2,500,000) common shares as
consideration for the acquisition of the EMC-ALGO Software Suite from ENAJ. The 2.5 million common
shares were issued to ENAJ and are escrowed in four equal tranches at 6, 9, 12, and 15 months.
Details of the two software acquisitions are summarized as follows:
$
$
RTN-Stealth Software:
Issuance of 20 million common shares of RTN each having a market value
5,000,000
of $0.25 per share on May 17, 2010
Assumption of four promissory notes
2,503,500
Cancellation of the license for the marketing of RTN-Stealth Software
150,000
7,653,500
EMC-ALGO Software:
Issuance of 2.5 million common shares of RTN each having a market value
of $0.25 per share on May 17, 2010
625,000
625,000
8,278,500
Also the Company entered into a management agreement with Mr. Michael Boulter, the founder and chief
technology officer of ENAJ in exchange for two million five hundred thousand common shares of the
Company as compensation. The management agreement has a three (3) year term and grants the titles of
President and Chief Operating Officer of the Company. The 2.5 million common shares of the Company are
vested in three equal tranches at 12, 24, and 36 months from May 17, 2010. As a result, the corresponding
management fee is deferred and amortized as follows:
Expensed in the current quarter ended June 30, 2010
$
8,681
Deferred and amortized from July 2010 to June 2011
208,333
Deferred and amortized from July 2011 to May 2013(Long term)
407,986
$
625,000
RTN STEALTH SOFRWARE INC.
(Formerly Arris Resources Inc.)
Notes to the Interim Consolidated Financial Statements
June 30, 2010
(Unaudited - expressed in Canadian dollars, unless stated otherwise)
8.
SHARE CAPITAL
a) Authorized and outstanding shares:
As at June 30, 2010 the authorized share capital of the Company consisted of the following:
-Unlimited number of Common Shares with no par value
-Unlimited number of Class B Preferred Shares with no par value.
Each Class B Preferred Share is convertible into ten Common Shares when the cumulative net revenues
derived from the license of the RTN-Stealth Software reach a total of US$ 20,000,000 (Note 7).
The continuity of the issued and outstanding shares of the Company as at June 30, 2010 is as follows:
CommonShare (renamedas Class AcommononJanuary5,2010)
Numberofshares
$
Outstanding balance,12/31/2008
-
-
Issuance -Arrangement with Incana Investment Inc.
75,416,860
2,806,956
Exercise ofoptions
6,050,000
190,575
Fairvalue ofshare options allocated to shares issued on exercise
-
45,845
Private placement,net ofshare issuance costs
17,500,000
876,489
Stocksplit and consolidation round off
-
-
Share issued forprivate placement finders fee
450,000
-
Outstanding balance,12/31/2009
99,416,860
3,919,865
Cancellation at January 5,2010-Arrangement Agreement with AHI,CLI,
QMI(note 6)
(99,416,860)
(3,919,865)
Outstanding balance,6/30/2010
-
-
This Class A common shares were eliminated from the Company’s share capital.
CommonShare
Numberofshares
$
Outstanding balance,12/31/2008
-
-
Issuance
-
-
Redemption
-
-
Outstanding balance,12/31/2009
-
-
Issuance -Arrangement Agreement with AHI,CLI,QMI(note 6)
99,416,860
2,205,580
Issuance -acquisition ofRTNStealth Software (note 7)
20,000,000
5,000,000
Issuace -managemnt agreement with the ChiefOperating Officer(note 7)
2,500,000
625,000
Issuance-acquisition ofENAJ software (note 7)
2,500,000
625,000
Outstanding balance,6/30/2010
124,416,860
8,455,580
RTN STEALTH SOFRWARE INC.
(Formerly Arris Resources Inc.)
Notes to the Interim Consolidated Financial Statements
June 30, 2010
(Unaudited - expressed in Canadian dollars, unless stated otherwise)
Class Apreferredshare
Numberofshares
$
Outstanding balance,12/31/2008
-
-
Issuance -Arrangement Agreement Inanca Investment Inc.
75,416,860
100,000
Redemption -Arrangement Agreement Inanca Investment Inc.
(75,416,860)
(100,000)
Outstanding balance,12/31/2009
-
-
Issuance -Arrangement Agreement with AHI,CLI,QMI(Note 5)
99,416,860
1,714,285
Redemption &cancellation-Arrangement Argreement with AHI,CLI,
QMI(note 6)
(99,416,860)
(1,714,285)
Outstanding balance,6/30/2010
-
-
This class of preferred share (Class A) was eliminated from the Company’s share capital.
Class B preferredshare
Numberofshares
$
Outstanding balance,12/31/2008
-
-
Issuance ofnewclass ofpreferred shares
-
-
Redemption ofnewclass ofpreferred shares
-
-
Outstanding balance,12/31/2009
-
-
Issuance -acquisition ofsoftware license (Note 7)
5,250,000
150,000
Outstanding balance,6/30/2010
5,250,000
150,000
b) Stock Options
RTN has an incentive stock option plan authorizing the Company to issue incentive stock options
to directors, officers, employees and consultants of the Company. No specific vesting terms are required.
The option price shall not be less than the fair market value of the Company’s common shares on the grant
date. In February 2010, the Company awarded its directors, officers, employees and consultants a total of
5,650,000 stock options at an exercise price of $0.32 with the expiry date of February 24, 2015. The fair
value of each option at the date of grant was estimated at $0.31/option by using the Black-Scholes option
pricing model with the following assumptions:
Risk free interest rate
3.25%
Expected life
5 years
Volatility
232%
Expected dividends
nil
The 5,650,000 granted options had a fair value of $1,736,064 at the grant date and all the granted options
were vested immediately on issuance. As a result, the Company recognized $1,736,064 in stock-based
compensation expense and credited to contributed surplus to account for the vesting of the options (Note 8c )
during the quarter.
RTN STEALTH SOFRWARE INC.
(Formerly Arris Resources Inc.)
Notes to the Interim Consolidated Financial Statements
June 30, 2010
(Unaudited - expressed in Canadian dollars, unless stated otherwise)
The continuity of the outstanding stock options of the Company as at June 30, 2010 is as follows:
Number of outstanding
Weighted Average
option
Exercise Price
$
Balance, December 31, 2009
-
-
Grants
5,650,000
0.32
Expired/Cancelled/Consolidated
-
-
Exercised
-
-
Balance, June 30, 2010
5,650,000
0.32
As at June 30, 2010, there were 5,650,000 stock option outstanding with a weighted average exercise price
of $0.32 per share and a remaining life of 4.67 years.
c) contributed surplus
The continuity of the contributed surplus is as follows:
ContributedSurplus
$
Balance,12/31/2008&2009
670,374
Stockoption granted (note 8b)
1,736,064
Cancellation ofClass A preferred share-Arrangement Argreement with
AHI,CLI,QMI(note 6)
198,299
Balance,6/30/2010
2,604,737
9.
RELATED PARTY TRANSACTIONS
a) During the three months ended June 30, 2010, rental expense, accounting fees, and consulting fees
charged by a company controlled by the CEO, the CFO, and a company controlled by the Executive Vice
President were $7,500 (2009 - $9,750), $5,175 (2009- $nil), and $9,000 (2009 - $nil) respectively. The
President of the Company has also charged the Company management fees of $8,681 in the current quarter
(note 7). The Company owed $1,475 to the CFO (2009 - $nil) and had no balance owing to the company
controlled by the CEO, the Vice President, and the President as at June 30, 2010. These transactions have
occurred in the normal course of operations and management represents that they have occurred on a basis
consistent with those involving unrelated parties, and accordingly they are measured at their fair values.
b) The Arrangement Agreement envisioned the transfer of the Mineral Properties, the Distribution Agreement,
and the Equity Portfolio (collectively the “Transferred Assets’) from RTN Stealth to CLI, QMI, and AHI
respectively. As consideration for the transfer, the controlling interest in the common shares of CLI, QMI,
and AHI was immediately distributed to the shareholders of RTN Stealth. (Note 6(IV)). The shareholders
of RTN Stealth at the time of the transfer continued to collectively own the Transferred Assets.
Consequently, there was no substantive change in the beneficial ownership of the Transferred Assets at the
time that the Transferred Assets were vended to RTN Stealth. As such the transfer of the Mineral
Properties, Distribution Agreement, and the Equity Portfolio was recorded, in accordance with the
Canadian generally accepted accounting principles, at the carrying values as follows
RTN STEALTH SOFRWARE INC.
(Formerly Arris Resources Inc.)
Notes to the Interim Consolidated Financial Statements
June 30, 2010
(Unaudited - expressed in Canadian dollars, unless stated otherwise)
Value of the transfer being the carrying
value at RTN Stealth’s account on
Mineral Properties
January 5, 2010
five mineral claims in the areas located near Gladys
Lake Molybdenum occurrences in the Atlin Mining
District, British Columbia
$
67,185
Distribution Agreement
Distribution Agreement with a British Columbia
private company to distribute its seismic sensors in
India.
$
1
Value of the transfer being the
Number of
carrying value at RTN Stealth’s
Equity Portfolio
shares
account on January 5, 2010
Publicly traded common shares
-Desert Gold Ventures Inc.
300,000
$
240,000
-Ona Power Corp.
2,800,000
509,600
-Maxtech Ventures Inc.
440,000
228,800
Share purchase warrants of publicly traded
shares
-Ona Power Corp.
2,800,000
470,400
$
1,448,800
The Company recorded to the account of accumulated other comprehensive income of $504,770 in fiscal
2009 to account for the un-realized gain earned from the appreciation in the market value of the Equity
Portfolio. The Company reclassified the whole amount of $504,770 from “other comprehensive income” to
“release of un-realized gain in relation to the disposal of marketable securities” in accordance with the
Canadian generally accepted accounting principles when the Equity Portfolio was transferred to AHI upon
the completion of the Arrangement Agreement.
10. SUBSEQUENT EVENTS
On July 30, 2010, the Company announced its intention to proceed with a private placement consisting of
up to 4,285,714 Units at a price of $0.35 per Unit to raise gross proceeds of up to $1,500,000. Each Unit
consists of one common share and one half common share purchase warrant of the Company. Each share
purchase warrant entitles the holder to acquire one common share of RTN at $0.40 per share on or before
July 30, 2011. This private placement is expected to close on or around August 31, 2010.