Quantitative Alpha Trading 6K Unaudited Interim Financial Statements | AGBTF 2 Sep 11

Quantitative Alpha Trading Inc.

(Formerly known as RTN Stealth Software Inc.)

CONDENSED INTERIM FINANCIAL

STATEMENTS

For the three and six months ended June 30, 2011

(Unaudited)

UNAUDITED INTERIM FINANCIAL STATEMENTS

In accordance with National Instrument 51-102 released bythe Canadian

Securities Administrators, the Companydiscloses that its auditors have not

reviewed the unaudited consolidated interim financial statementsfor the three

and sixmonth period ended June 30, 2011.

Quantitative Alpha Trading Inc.

(Formerlyknownas RTN StealthSoftware Inc.)

CondensedInterimFinancialStatements

StatementofLossandComprehensiveLoss

For the three and six months ended June 30, 2011 and 2010

(Unaudited, expressed in Canadian dollars)

Three months ended June 30

Six months ended June 30

2011

2010

2011

2010

Expenses

Advertising and promotion

28,291

50,923

Amortization - Equipment

1,731

473

3,709

4,221

Amortization - Intangible

207,744

103,872

415,488

103,872

Finance costs

1,256

823

23,428

1,062

Foreign exchange (gain)

7,175

38,548

Management,consulting and administrative

35,550

138,854

95,955

172,454

Office

3,584

14,052

14,551

17,053

Professionalfees

89,407

471

154,251

30,679

Rent

16,137

7,500

32,774

20,000

Salary and wages

111,866

174,780

–

Share based compensation

515,862

8,681

1,659,135

1,744,745

Travel

2,566

6,461

12,760

7,961

Trust and filing fees

10,496

5,217

21,604

15,022

Loss before the following:

(1,003,375)

(314,695)

(2,646,984)

(2,167,992)

Interest and other income

12,160

Loss in write off of oiland gas property

–

(1)

–

(1)

Net loss and comprehensive loss

(991,215) $

(314,675)

$ (2,634,825) $ (2,167,960)

Loss per share,basic

(0.00) $

(0.00)

(0.01) $

(0.02)

Loss per share,fully diluted

(0.00) $

(0.00)

(0.01) $

(0.02)

Weighted average number of common shares outstanding,basic

221,494,233

111,779,497

178,897,801

105,632,330

Weighted average number of common shares outstanding,fully diluted

221,647,202

111,779,497

178,975,135

105,632,330

Quantitative Alpha Trading Inc.

(Formerlyknownas RTN StealthSoftware Inc.)

CondensedInterimFinancialStatements

StatementofFinancialPosition

As at,

June 30,

December 31,

January 1

(Unaudited - expressed inCanadianDollars)

2011

2010

(Note 11)

Assets

Current assets

Cash and cash equivalents

1,921,765

174,530

379,284

Marketable securities

–

1,448,800

Other receivables

52,350

28,664

242,744

Prepaid expenses (Note 2)

223,915

216,135

10,000

2,198,031

419,329

2,080,828

Equipment (Note 5)

15,293

7,884

3,940

Intangible (Note 6)

7,374,903

7,790,391

–

PrepaidExpenses - long term(Note 2)

182,292

286,458

–

Mineralproperty

–

67,185

Oiland gas property

–

9,770,519

8,504,062

$ 2,151,954

Liabilities and Shareholders' Equity

Current liabilities

Trade and other payables

178,350

115,046

75,072

Deposit on private placement

–

250,000

–

Notes payable - current portion(Note 7)

–

358,445

–

178,350

723,491

75,072

Note payable -long term

–

2,095,476

–

178,350

2,818,967

75,072

Shareholders' equity

Share capitaland warrants (Note 8)

13,922,243

8,939,599

3,919,865

Contributed surplus

3,965,692

2,406,438

670,374

Accumulatedother comprehensive income

–

504,770

Deficit

(8,295,767)

(5,660,942)

(3,018,127)

9,770,519

8,504,062

$ 2,151,954

Approved bythe Audit Committee on behalf of Board of Directors on August 15, 2011

Director

Quantitative Alpha Trading Inc.

(Formerlyknownas RTN StealthSoftware Inc.)

CondensedInterimFinancialStatements

StatementofChangesinEquity

For the three and six months ended June 30, 2011 and 2010

(Unaudited, expressed in Canadian dollars)

Accumulated

other

Share Capital

Contributed

comprehensive

and Warrants

Surplus

Income

Deficit

Total Equity

As at January 1, 2011

8,939,599

2,406,438

(5,660,942)

5,685,095

Net loss and comprehensive loss

(2,634,825)

Issuance - private placement (Note 8a)

500,000

Issuance - conversion of notes payable (Note 7)

2,486,930

Issuance - warrant exercise (Note 8a)

2,000,000

Share based compensation (Note 8b)

1,091,189

Share based compensation (Note 8b)

463,779

Cancellation of preferred shares (Note 8a)

(4,286)

4,286

Asat June 30, 2011

13,922,243

3,965,692

(8,295,767)

9,592,168

As at January 1, 2010

3,919,865

670,374

504,770

(3,018,127)

2,076,882

Net loss and comprehensive loss

(2,167,960)

Issuance - Arrangement Agreement

Redemption of Class A preferred shares

(1,515,986)

(504,770)

504,770

(1,515,986)

Share based compensation

1,736,064

Issuance-acquisition of software license

150,000

Issuance - acquisition of RTN Stealth Software

5,000,000

Issuance - finders fees for ENAJ acquisition

31,250

Issuance - management agreement with Chief

Operating officer

625,000

Issuance - acquisition of ENAJ software

625,000

As at June 30, 2010

8,835,129

2,406,438

(4,681,317)

6,560,250

Quantitative Alpha Trading Inc.

(Formerlyknownas RTN StealthSoftware Inc.)

CondensedInterimFinancialStatements

CashFlowStatement

For the three and six months ended June 30, 2011

(Unaudited, expressed in Canadian dollars)

Three months ended June 30

Sixmonths endedJune 30

2011

2010

2011

2010

Cash provided by (used in)

Operating activities

Loss for the period

(991,215) $

(314,675) $

(2,634,825) $

(2,167,960)

Items not involvingcash:

Share based compensation

515,862

8,681

1,659,135

1,744,745

Amortization

209,475

104,345

419,197

108,093

Accrued interest income

–

(21)

–

(33)

Accrued interest onnotes payable

–

21,631

–

Foreign exchange onnotes payable

–

11,378

–

(265,878)

(201,670)

(523,484)

(315,155)

Net changes in non-cash workingcapital

Other receivables

(22,957)

(3,193)

(23,686)

(10,825)

Prepaid expenses

(1,781)

–

(7,781)

10,000

Trade and other payables

31,401

(54,245)

63,304

(64,317)

(259,215)

(259,108)

(491,647)

(380,297)

Investing activities

Purchase of equipment

(11,118)

(4,793)

(11,118)

(11,952)

Short term investments

–

(40,000)

–

(50,000)

(11,118)

(44,793)

(11,118)

(61,952)

Financing activities

Common shares issued

–

2,500,000

–

Share subscription receivable

–

238,000

Deposit on private placement

–

(250,000)

–

2,250,000

238,000

Increase in cash and cash equivalents

(270,333)

(303,901)

1,747,235

(204,249)

Cash and cash equivalents, beginning ofperiod

2,192,098

478,936

174,530

379,284

Cash and cash equivalents, end ofperiod

1,921,765 $

175,035 $ 1,921,765 $

175,035

Supplementary information:

Cash received frominterest

– $

–

– $

Non-cash transactions:

Conversion of notes payable

– $

–

$ 2,486,930 $

–

Shares distributed as part of corporate restructuring

– $

–

– $

1,515,986

Acquisitonof Software License

– $

–

– $

150,000

Common shares issued for management agreement (Note 2)

– $

625,000 $

– $

625,000

Common shares issued for the acquisition of software (Note 2) $

– $ 5,806,250 $

– $

5,806,250

Quantitative Alpha Trading Inc.

(Formerlyknownas RTN StealthSoftware Inc.

Notes tothe CondensedInterim Financial Statements

For the three and six months ended June 30, 2011

(Unaudited, expressed in Canadian Dollars)

Nature of operations and corporate information

Quantitative Alpha Trading Inc. (formerly known as RTN Stealth Software Inc.) herein after

referred to as “Company” or “QAT” is a public company incorporated in the Province of British

Columbia, Canada.

Following the Company’s annual general meeting on March 31, 2011 the Company has

approved its continuance from British Columbia into Ontario as its governing jurisdiction, has

adopted a comprehensive new general bylaw and has changed its name to Quantitative Alpha

Trading Inc.

QAT was incorporated by registration of its memorandum and articles under the British

Columbia Company Act on September 15, 1987 under the name “Grand Resources Inc.”. The

head office and registered office of the company is located at 40 Village Centre Place, Suite

300, Mississauga, Ontario, L4Z 1V9.

The Companyis in the business of developing and promoting software for trading purposes.

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 an 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. 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 May17, 2010, the Companyexecuted two definitive agreements:

a. The Company acquired the RTN-Stealth Software from MGS (the “MGS transaction”),

and

b. the Company purchased the EMC-ALGO Software Suite from ENAJ Mercantile

Corporation (the “ENAJ transaction”).

As part of the MGS transaction, the Company issued 20,000,000 common shares of the

Company to MGS shareholders which are escrowed to be released in four equal tranches at 6,

9, 12, and 15 months, and has assumed four promissory notes, in an amount totalling

$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.

Quantitative Alpha Trading Inc.

(Formerlyknownas RTN StealthSoftware Inc.

Notes tothe CondensedInterim Financial Statements

For the three and six months ended June 30, 2011

(Unaudited, expressed in Canadian Dollars)

Acquisition of software (continued)

The details of the four promissorynotes assumed are as follows:

Due date

Interest rate

Other terms

Four promissorynotes

Principal and interest Bank of Canada prime

Senior to anyand all

with the principal totalling

are due on May15,

rate + 1% per annum

other shareholder loans

$2,503,500 at May17,

2012

compoundannually

and shall bepaid in full

2010

prior to repayment by

the Companyto any

and all other

shareholder loans

On March 23, 2011, the promissory notes were converted to common shares as described in

Note 7.

As part of the ENAJ transaction, the Company issued 2,500,000 common shares as

consideration for the acquisition of the EMC-ALGO Software Suite from ENAJ. The 2,500,000

common shares were issued to ENAJ and are escrowed to be released in four equal tranches

commencing 6, 9, 12, and 15 months after May17, 2010.

Details of the two software acquisitions are summarized as follows:

RTN – Stealth Software

Issuance of 20,000,000 common shares of the Companyeach having a market

value of $0.25 per share on May17, 2010

$ 5,000,000

Assumption of four promissorynotes

2,503,500

Issuance of 5,250,000 Class B preferred shares on January19, 2010

150,000

7,653,500

EMC – ALGO Software

Issuance of 2,500,000 common shares of the Companyeach having a

market value of $0.25 per share on May17, 2010

625,000

Finders fees of 125,000 common shares of the Companyhaving a market

value of $0.25 per share on May17, 2010

31,250

$ 8,309,750

Quantitative Alpha Trading Inc.

(Formerlyknownas RTN StealthSoftware Inc.

Notes tothe CondensedInterim Financial Statements

For the three and six months ended June 30, 2011

(Unaudited, expressed in Canadian Dollars)

Acquisition of software (continued)

Furthermore, 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 (2,500,000) 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 2,500,000 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:

Totalconsideration

625,000

Expensed in the twelve months ended December 31, 2010

(130,209)

Expensed in the three months ended March 31, 2011

(52,083)

Expensed in the three months ended June 30, 2011

(52,083)

390,625

Less current portion

(208,333)

182,292

The current portion of the prepaid expenses in the amount of $223,915 includes the deferred

management fee of $208,333 and other prepaid expenses of $15,582.

Basis of preparation

Going concern assumption

These condensed interim financial statements have been prepared on the basis of accounting

principles applicable to a "going concern," which assumes that the Company will continue in

operation for the foreseeable future and will be able to realize its assets and discharge its

liabilities in the normalcourse of operations.

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 anyprofits.

The Company has addressed short term cash flow requirements through the raising of capital

and conversion of notes payable to common shares. The Company's continued existence is

dependent upon its ability to attain profitable operations and obtain financing from its

shareholders or external sources as required. 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 additionalcapital to continue operations.

Quantitative Alpha Trading Inc.

(Formerlyknownas RTN StealthSoftware Inc.

Notes tothe CondensedInterim Financial Statements

For the three and six months ended June 30, 2011

(Unaudited, expressed in Canadian Dollars)

Basis of preparation (continued)

The Company will depend almost exclusively on outside capital. 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 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.

Although management's efforts to raise capital and monetize assets have been successful in

the past, there is no certaintythat theywill be able to do so in the future. The aforementioned

circumstances maycreate significant doubt as to the abilityof the Companyto meets its

obligations as theycome due.

These interim condensed financial statements have been prepared using accounting principles

that are applied to a going concern and do not reflect the adjustments that would be necessary

to the presentation and carrying amounts of the assets and liabilities if the Company were not

able to continue operations. These adjustments and reclassifications maybe material

Statement of Compliance

These condensed interim financial are prepared in accordance with IAS 34, ‘Interim Financial

Reporting’ and are the Company’s second financial statements prepared under IFRS. These

condensed interim financial statements do not include all information required for full annual

financial statements and should be read in conjunction with the financial statements of the

Company as at and for the year ended December 31, 2010. The Company adopted IFRS in

accordance with IFRS 1 First-time Adoption of International Financial Reporting Standards

(“IFRS 1”) with a transition date to IFRS of January 1, 2010. Consequently the comparative

figures for 2010 and the Company’s statement of financial position as at January 1, 2010 have

been restated from accounting principles generally accepted in Canada (“Canadian GAAP”) to

complywith IFRS.

The reconciliations to IFRS from the previously published Canadian GAAP financial statements

are summarized in Note 11.

Functional and presentation currency

These financial statements are presented in Canadian dollars, which is the Company’s

functional currency.

Quantitative Alpha Trading Inc.

(Formerlyknownas RTN StealthSoftware Inc.

Notes tothe CondensedInterim Financial Statements

For the three and six months ended June 30, 2011

(Unaudited, expressed in Canadian Dollars)

Summary of significant accounting policies

These interim financial statements have been prepared on a basis consistent with the audited

financial statements prepared under Canadian Generally Accepted Accounting Principles for

the year ended December 31, 2010 except as follows:

(a) Intangible asset

Intangible asset consists of acquired software initially recorded at fair value. The software will

be amortized on a straight-line basis over 10 years which represents management’s best

estimate of useful life. The software is available for use and amortization has been recorded

from the date of acquisition. The Company evaluates the reasonableness of the estimated

useful life on an annual basis.

The Company reviews the carrying value of its intangible assets for impairment or whenever

events or circumstances indicate that the carrying value maynot be recoverable.

(b) Use of judgments and critical estimates

The preparation of financial statements in conformity with IFRS requires management to make

estimates and assumptions that affect the reported amounts of assets and liabilities and the

disclosure of contingent assets and liabilities at the date of the financial statements and the

reported amounts of revenue and expenses during the reporting year. Actual results may differ

from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to

accounting estimates are recognized in the period in which the estimates are revised and in

anyfuture periods affected.

Significant assumptions about the future and other sources of estimation uncertainty that

management has made that could result in a material adjustment to the carrying amounts of

assets and liabilities, in the event that actual results differ from assumptions made, relate to, but

are not limited to the following:

• The estimated useful lives of equipment which are included in the balance sheet and

the related amortization included in the statement of loss;

• The estimated useful lives of intangible assets which are included in the balance

sheets, the related amortization included in the statement of loss, and the recoverability

of the intangible asset which is dependent on management’s ability to implement its

current business plan. The recoverability analysis of intangible assets on the balance

sheets require the Company to make assumptions about the future. Changes to one

or more assumptions would result in a change in the recoverable amount calculated;

and

• The valuation allowance for future income tax assets.

Quantitative Alpha Trading Inc.

(Formerlyknownas RTN StealthSoftware Inc.

Notes tothe CondensedInterim Financial Statements

For the three and six months ended June 30, 2011

(Unaudited, expressed in Canadian Dollars)

Summary of significant accounting policies (continued)

(c) Share based compensation

Equity-settled share based payments to employees and others providing similar services are

measured at the fair value at the grant date.

The fair value determined at the grant date is expensed on a straight-line basis over the vesting

period, based on the Company’s estimate of the equity instruments that will eventually vest.

Each tranche is an award and is considered a separate grant with its own vesting period and

grant date fair value.

(d) Earnings per share

The Company presents basic and diluted earnings per share (EPS) data for its common

shares. Basic EPS is calculated by dividing the profit or loss attributable to common

shareholders of the Company by the weighted average number of common shares outstanding

during the period. Diluted EPS is determined by adjusting the profit or loss attributable to

common shareholders and the weighted average number of common shares outstanding, for

the effects of all dilutive potential common shares.

(e) Impairment

(i) Financial assets

A financial asset is assessed at each reporting date to determine whether there is any

objective evidence that it is impaired. A financial asset is considered to be impaired if

objective evidence indicated that one or more events have had a negative effect on the

estimated future cash flows of that asset.

An impairment loss in respect of a financial asset measured at amortized cost is calculated

as the difference between its carrying amount and the present value of the estimated future

cash flows discounted at the original effective interest rate. An impairment loss in respect

of an available-for-sale financial asset is calculated by reference to its fair value.

Individually significant financial assets are tested for impairment on an individual basis.

The remaining financial assets are assessed collectively in groups that share similar risk

characteristics.

(ii) Non-financial assets

The carrying amounts of the Company’s non-financial assets are reviewed each reporting

date to determine whether there is any indication of impairment. If such indication exists,

then the asset’s recoverable amount is estimated.

The recoverable amount of an asset is the greater of its value in use and fair value less

costs to sell. In assessing value in use, the estimated future cash flows are discounted to

their present value using a pre-tax discount rate that reflects current market assessments

of the time value of money and the risk specific to the asset. An impairment loss is

recognized if the carrying amount of an asset exceeds its estimated recoverable amount.

Quantitative Alpha Trading Inc.

(Formerlyknownas RTN StealthSoftware Inc.

Notes tothe CondensedInterim Financial Statements

For the three and six months ended June 30, 2011

(Unaudited, expressed in Canadian Dollars)

Summary of significant accounting policies (continued)

If, after the Corporation has previously recognized an impairment loss, circumstances

indicate that the fair value of the impaired assets is greater than the carrying amount, the

Corporation reverses the impairment loss by the amount the revised fair value exceeds its

carrying amount, to a maximum of the previous impairment loss. In no case shall the

revised carrying amount exceed the original carrying amount, after amortization, that would

have been determined if no impairment loss had been recognized. An impairment loss or a

reversal of an impairment loss is recognized in cost of sales, or general and administration

expense, depending on the nature of the asset

(f) New standards and interpretations not yet adopted

In November 2009, the IASB published IFRS 9, “Financial Instruments” which covers the

classification and measurement of financial assets as part of its project to replace IAS 39,

“Financial Instruments: Recognition and Measurement”. In October 2010, the requirements for

classifying and measuring financial liabilities were added to IFRS 9. Under this guidance,

entities have the option to recognize financial liabilities at fair value through earnings. If this

option is elected, entities would be required to reverse the portion of the fair value change due

to a company’s own credit risk out of earnings and recognize the change in other

comprehensive income. IFRS 9 is effective for the Company on January 1, 2013. Early

adoption is permitted and the standard is required to be applied retrospectively. The Company

is currentlyevaluating the impact of adopting IFRS 9.

Equipment

Office

Computer

Leasehold

Equipment

Software

Improvements

Total

Cost

At January 1, 2010

3,414

10,348

10,073

2,522

26,357

Additions

13,772

400

14,172

At December 31, 2010

3,414

24,120

10,473

2,522

40,529

Additions

11,118

At June 30, 2011

14,532

24,120

10,473

2,522

51,647

Accumulated Amortization

At January 1, 2010

1,922

8,000

9,973

2,522

22,417

Additions

403

9,325

500

10,228

At December 31, 2010

2,325

17,325

10,473

2,522

32,645

Additions

485

3,224

3,709

At June 30, 2011

2,810

20,549

10,473

2,522

36,354

Net book value

January 1, ��2010

1,492

2,348

100

3,940

December 31, 2010

1,089

6,795

7,884

June 30, 2011

11,722

3,571

15,293

Quantitative Alpha Trading Inc.

(Formerlyknownas RTN StealthSoftware Inc.

Notes tothe CondensedInterim Financial Statements

For the three and six months ended June 30, 2011

(Unaudited, expressed in Canadian Dollars)

Intangible

Cost

At January 1, 2010

Additions

8,309,750

At December 31, 2010

8,309,750

Additions

At June 30, 2011

8,309,750

Accumulated Amortization

At January 1, 2010

Additions

519,359

At December 31, 2010

519,359

Additions

415,488

At June 30, 2011

934,847

Net book value

January 1, 2010

December 31, 2010

7,790,391

June 30, 2011

7,374,903

Notes payable

On March 23, 2011, the notes payable in the amount totalling $2,486,930 including accrued

interest were converted for 47,370,100 common shares or $0.0525 per share.

Quantitative Alpha Trading Inc.

(Formerlyknownas RTN StealthSoftware Inc.

Notes tothe CondensedInterim Financial Statements

For the three and six months ended June 30, 2011

(Unaudited, expressed in Canadian Dollars)

Share capital

a) Authorized and outstanding shares

As at June 30, 2011 the authorized share capitalof the Companyconsisted of the following:

Unlimited number of Common Shares with no par value

5,250,000 Class B non-voting 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 reaches a

total of US $ 20,000,000 as described in Note 2).

Acontinuityof the outstanding share capital is as follows:

Number of common

Number of Class A

Number of Class B

preferred shares

As at January 1, 2011

124,862,860

5,250,000

Issuance - private placement

9,523,796

Issuance - conversion of notes payable (Note 7)

47,370,100

Issuance - warrant exercise

38,095,238

Issuance - conversion of preferred shares (Note 10)

37,360,940

(3,736,094)

Cancelled

(150,000)

Asat June 30, 2011

257,212,934

1,363,906

As at January 1, 2010

99,416,860

Issuance - arrangement agreement

99,416,860

Issuance - acquisition of software licence

5,250,000

Cancellation of Class A preferred shares

(99,416,860)

Issuance - acquisition of RTN Stealth Software (Note 2)

20,000,000

Issuance - acquisition of ENAJ software (note 2)

2,500,000

Issuance - management agreement with Chief

Operating Officer (Note 2)

2,500,000

As at June 30, 2010

124,416,860

5,250,000

On January 19, 2011, the Company completed a non-brokered private placement for gross

proceeds to the Companyof $500,000. Pursuant to the private placement, the Company issued

9,523,796 units at a purchase price of $0.0525 per unit. Each unit consists of one common

share of the Company and four common share purchase warrants. Each whole warrant entitles

its holder to purchase one additional Common Share at an exercise price of $0.0525. These

warrants were exercised prior to their expiry on March 31, 2011 resulting in additional gross

proceeds to the Companyof $2,000,000.

As of June 30, 2011, the Company has 337,800 common share purchase warrants outstanding

with a fair value of $33,442 using the Black Scholes model for pricing options. The weighted

average fair value per warrant of $0.099 was calculated using the following weighted average

assumptions: dividend yield of 0%, expected volatility of 161%, risk-free interest rate of 1.7%

and an expected life of 2 years. These warrants entitled the holder to purchase one common

share of the Companyat a price of $0.40 per share until May12, 2012.

Quantitative Alpha Trading Inc.

(Formerlyknownas RTN StealthSoftware Inc.

Notes tothe CondensedInterim Financial Statements

For the three and six months ended June 30, 2011

(Unaudited, expressed in Canadian Dollars)

Share capital (continued)

On June 6, 2011, the companyreceived authorization to cancel 150,000 preferred shares.

b) Stock options

QAT 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.

On March 30 2011, the Company awarded its directors, officers, employees and consultants a

total of 29,958,701 stock options of which 10,440,144 vest immediately at an exercise price of

$0.10, 9,759,279 vest on the first anniversary of the grant date with an exercise price of $0.16

and 9,759,279 vest on the second anniversaryof the grant date with an exercise price of $0.24.

All options granted have an expiry date of March 30, 2021. The fair value of each option at the

date of grant was estimated at $0.10/option by using the Black-Scholes option pricing model

with the following assumptions:

Risk free interest rate

2.90%

Expected life

8-10 years

Volatility

230%

Expected dividends

nil

On April 4, 2011, the Company awarded a consultant a total of 680,880 stock options of which

226,960 vest immediately at an exercise price of $0.34, 226,960 vests on the first anniversary

of the grant date with an exercise price of $0.34 and 226,960 vests on the second anniversary

of the grant date with an exercise price of $0.34. The options granted have an expiry date of

April 4, 2021. The fair value of each option at the date of grant was estimated at $0.10/option

byusing the Black-Scholes option pricing model with the following assumptions:

Risk free interest rate

2.95%

Expected life

8-10 years

Volatility

235%

Expected dividends

nil

The 10,667,104 vested options had a fair value of $1,160,200 at the grant date. The

19,972,478 unvested options had a fair value of $2,172,849 at grant date and is expensed on a

straight-line basis over the vesting period with each tranche being recognized over its own

distinct vesting period resulting in $394,768 in stock based compensation expense. As a result,

the Company recognized $1,554,968 in stock-based compensation expense and credited to

contributed surplus to account for the options. In addition there was $104,167 in stock based

compensation expense relating to the deferred management fees as described in Note 2 for a

total amount of $1,659,135.

Quantitative Alpha Trading Inc.

(Formerlyknownas RTN StealthSoftware Inc.

Notes tothe CondensedInterim Financial Statements

For the three and six months ended June 30, 2011

(Unaudited, expressed in Canadian Dollars)

The continuityof the outstanding stock options of the Companyis as follows:

Numberof

Weighted

Outstanding

average

options

exercise price

Balance, January1, 2010

Granted

5,650,000

0.32

Balance, December 31, 2010

5,650,000

0.32

Expired

(2,600,000)

0.32

Granted

29,958,701

0.17

Granted

680,880

0.34

Balance, June 30, 2011

33,688,701

0.18

Quantitative Alpha Trading Inc.

(Formerlyknownas RTN StealthSoftware Inc.

Notes tothe CondensedInterim Financial Statements

For the three and six months ended June 30, 2011

(Unaudited, expressed in Canadian Dollars)

Related partytransactions

All transactions with related parties have occurred in the normal course of operations and in

management’s opinion have been transacted on a basis consistent with those involving

unrelated parties, and accordingly that they are measured at fair value. Related parties include

key management personnel, the Board of Directors, close family members and enterprises

which are controlled bythese individuals.

• During the three months ended June 30, 2011, a company controlled by the CFO

charged the Company $6,000 (2010 - $nil) in rent and received $15,000 (2010 - $nil) in

accounting fees.

• During the three months ended June 30, 2011, incurred stock based compensation in

the amount of $515,862 (2010 - nil) to related parties as described in Note 8b.

• During the three months ended June 30, 2010, rental expense, accounting fees, and

consulting fees charged by a company controlled by the former CEO, the former CFO

and a company controlled by the former Executive Vice President were $7,500, $5,175

and $9,000 respectively.

10. Conversion of preference shares

On March 30, 2011, the shareholders of the Company had authorized the early conversion of

5,250,000 Class B Preferred Shares into common shares, thereby ensuring that all of its issued

and outstanding equity is represented by voting common shares. Each Class B Preferred

Share is convertible into ten common shares at the option of the holder. As of June 30, 2011,

3,736,094 Preferred Shares have been converted into 37,360,940 common shares.

Quantitative Alpha Trading Inc.

(Formerlyknownas RTN StealthSoftware Inc.

Notes tothe CondensedInterim Financial Statements

For the three and six months ended June 30, 2011

(Unaudited, expressed in Canadian Dollars)

11. Conversion to IFRS

The condensed interim financial statements for the three months ended June 30, 2011 are the

Company’s second condensed interim financial statements prepared under IFRS. For the

accounting period prior to this, the Company prepared its consolidated financial statements

under Canadian GAAP. In accordance with IFRS 1 ‘First time adoption of IFRS’, certain

disclosures relating to the transition to IFRS are given in this note. These disclosures are

prepared under IFRS as set out in the basis of preparation in Note 3.

IFRS 1 allows first time adopters to IFRS to take advantage of a number of voluntary

exemptions from the general principal of retrospective restatement. The Company has taken

the following exemptions:

a) Elective exemptions

Business Combinations

The Company elected to apply IFRS 3 relating to business combinations prospectively from

January1, 2010.

b) Mandatory exemptions

Estimates

Hindsight is not used to create or revise estimates. The estimates previously made by the

Company under Canadian GAAP were not revised for application of IFRS except where

necessaryto reflect anydifferences in accounting policies.

Quantitative Alpha Trading Inc.

(Formerlyknownas RTN StealthSoftware Inc.

Notes tothe CondensedInterim Financial Statements

For the three and six months ended June 30, 2011

(Unaudited, expressed in Canadian Dollars)

c) Effect of material transition adjustments on the balance sheets, income statements and

statement of comprehensive income:

i) Balance Sheets

December 31,2010

January1,2010

IFRS andCdn.

Cdn. GAAP

Adj.

IFRS

GAAP

Assets

Current assets

Cash and cash equivalents

174,530 $

379,284

Marketable securities

–

1,448,800

Other receivables

28,664

–

28,664

242,744

Short term investments

–

Prepaid expenses

216,135

–

216,135

10,000

419,329

–

419,329

2,080,828

Equipment

7,884

–

7,884

3,940

Intangible (Note 11(d)(i))

8,309,750

(519,359)

7,790,391

–

License

–

Prepaid Expenses - long term

286,458

–

286,458

–

Mineralproperty

–

67,185

Oiland gas property

–

$ 9,023,421 $

(519,359) $

8,504,062 $

2,151,954

Liabilities and Shareholders' Equity

Current liabilities

Trade andother payables

115,046 $

75,072

Deposit on private placement

250,000

–

250,000

–

Notes payable - current portion

358,445

–

358,445

–

723,491

75,072

Note payable -long term

2,095,476

–

2,095,476

–

2,818,967

–

2,818,967

75,072

Shareholders' equity

Share capitalandwarrants

8,939,599

–

8,939,599

3,919,865

Contributedsurplus

2,406,438

–

2,406,438

670,374

Accumulated other comprehensive income

–

504,770

Deficit

(5,141,583)

(519,359)

(5,660,942)

(3,018,127)

$ 9,023,421 $

(519,359) $

8,504,062 $

2,151,954

Quantitative Alpha Trading Inc.

(Formerlyknownas RTN StealthSoftware Inc.

Notes tothe CondensedInterim Financial Statements

For the three and six months ended June 30, 2011

(Unaudited, expressed in Canadian Dollars)

i) Balance Sheets (continued)

June 30,2010

Cdn. GAAP

Adj.

IFRS

Assets

Current assets

Cashandcash equivalents

175,035 $

175,035

Marketable securities

–

Other receivables

15,568

–

15,568

Short term investments

50,033

–

50,033

Prepaid expenses

208,333

–

208,333

448,969

–

448,969

Equipment

11,671

–

11,671

Intangible (Note 11(d)(i))

8,309,750

(103,872)

8,205,878

Prepaid Expenses - longterm

407,986

–

407,986

$ 9,178,376 $

(103,872) $

9,074,504

Liabilities and Shareholders' Equity

Current liabilities

Trade andother payables

10,754 $

10,754

Deposit on private placement

–

Notes payable - current portion

–

10,754

–

10,754

Note payable -long term

2,503,500

–

2,503,500

2,514,254

–

2,514,254

Shareholders' equity

Share capitalandwarrants

8,835,129

–

8,835,129

Contributed surplus

2,406,438

–

2,406,438

Accumulatedother comprehensive income

–

Deficit

(4,577,445)

(103,872)

(4,681,317)

$ 9,178,376 $

(103,872) $

9,074,504

Quantitative Alpha Trading Inc.

(Formerlyknownas RTN StealthSoftware Inc.

Notes tothe CondensedInterim Financial Statements

For the three and six months ended June 30, 2011

(Unaudited, expressed in Canadian Dollars)

ii)Interim Statements of loss and comprehensive loss

Three months ended

June 30,2010

Cdn GAAP

Adj.

IFRS

Expenses

Advertisingand promotion

28,291 $

28,291

Amortization - Equipment

473

Amortization - Intangible (Note 11(d)(i)

103,872

Finance costs

823

Management,consulting and administrative

138,854

Office

14,052

Professionalfees

471

Rent

7,500

Stock-based compensation

8,681

Travel

6,461

Trust and filing fees

5,217

Loss before the following:

(210,823)

(103,872)

(314,695)

Write down of mineraland oiland gas properties

(1)

Interest and other income

Net loss and comprehensive loss

(210,803) $

(103,872) $ (314,675)

Six months ended

June 30,2010

Cdn GAAP

Adj.

IFRS

Expenses

Advertisingand promotion

50,923 $

50,923

Amortization - Equipment

4,221

Amortization - Intangible (Note 11(d)(i)

103,872

Finance costs

1,062

Management,consulting and administrative

172,454

Office

17,053

Professionalfees

30,679

Rent

20,000

Stock-based compensation

1,744,745

Travel

7,961

Trust and filing fees

15,022

Loss before the following:

(2,064,120)

(103,872)

(2,167,992)

Write down of mineraland oiland gas properties

(1)

Interest and other income

Net loss and comprehensive loss

(2,064,088) $

(103,872) $ (2,167,960)

Quantitative Alpha Trading Inc.

(Formerlyknownas RTN StealthSoftware Inc.

Notes tothe CondensedInterim Financial Statements

For the three and six months ended June 30, 2011

(Unaudited, expressed in Canadian Dollars)

d) Explanatory notes

Amortization of intangible

Under Canadian GAAP the software asset was amortized once it has been placed in

use. Under IFRS the software asset has been amortized when the asset is available for

use. As the software asset was available for use upon acquisition, amortization has

been recorded from the date of acquisition. For the three and six months ended June 31,

2010 there is an increase in amortization expense of $103,872 and for the year-ended

December 31, 2010 there is an increase in amortization expense of $519,359.

e) Restatement of Statement of Cash Flows from Canadian GAAP to IFRS

The restatement from Canadian GAAP to IFRS had no significant effect on the reported cash

flows generated by the Company for the three months and six months ended June 30, 2010 or

year ended December 31, 2010. The reconciling items between Canadian GAAP presentation

and IFRS have no significant effect on the cash flows generated.

Quantitative Alpha Trading (AGBTF) Inactive 6-KUnaudited Interim Financial Statements