EIGER TECHNOLOGY, INC.
Unaudited Consolidated Financial Statements
for the three months ended December 31, 2004
Unaudited, prepared by Management
(Stated in Canadian Dollars)
The unaudited interim consolidated financial statements of Eiger Technology, Inc. (the
"Company") have not been reviewed by the auditors of the Company. This notice is
being provided in accordance with section 4.3(3)(a) of the National Instrument 51-102
Continuous Disclosure Obligations.
EIGER TECHNOLOGY, INC.
Unaudited Consolidated Balance Sheet
December 31 September 30
2004 2004
$ $
Assets
Current
Cash and Marketable Securities 402,000 275,000
Accounts Receivable 689,000 2,221,000
Inventories -- 1,648,000
Prepaid Expenses 55,000 128,000
1,146,000 4,272,000
Capital Assets (note 2) 1,488,000 2,498,000
Long-term Investments 96,000 96,000
Other - -- 182,000
2,730,000 7,048,000
Liabilities and Shareholders' Equity
Current
Bank Indebtedness -- 1,847,000
Accounts Payable and Accrued Liabilities 2,186,000 5,103,000
Deferred Revenue 235,000 333,000
Current Portion of Long-term Debt 293,000 500,000
2,714,000 7,783,000
Long-term Debt 32,000 347,000
Non-Controlling Interest -295,000 -4,356,000
Shareholders' Equity
Share Capital 43,297,000 43,297,000
Retained Earnings (Deficit) -43,018,000 -40,023,000
279,000 3,274,000
2,730,000 7,048,000
On Behalf of the Board:
"Gerry Racicot" Director
Gerry Racicot
"Jason Moretto" Director
Jason Moretto
EIGER TECHNOLOGY, INC.
Unaudited Consolidated Statement of Operations and Retained Earnings
For the three months ended December 31 2004 2004 2003 2003
(Current Quarter) (Year-to-Date) (Current Quarter) (Year-to-Date)
$ $ $ $
Sales 1,513,000 1,513,000 4,415,000 4,415,000
Cost of Sales 1,365,000 1,365,000 3,435,000 3,435,000
Gross Margin 148,000 148,000 980,000 980,000
Expenses
Selling, General and Administrative 701,000 701,000 1,490,000 1,490,000
Amortization of Capital Assets 73,000 73,000 87,000 87,000
Amortization of Goodwill and Other Assets - -- - -- 23,000 23,000
Interest on Long-term Debt 29,000 29,000 103,000 103,000
Other Interest and Bank Charges 20,000 20,000 27,000 27,000
Discontinued Operations (Net) 84,000 84,000 21,000 21,000
907,000 907,000 1,751,000 1,751,000
Income (Loss) from Operations - -759,000 - -759,000 - -771,000 -771,000
Other Income - -- -- 134,000 134,000
Income before Taxes - -759,000 - -759,000 - -637,000 -637,000
Provision for Income Taxes - Future - -- -- - -19,000 -19,000
Income before Non-controlling Interest - -759,000 - -759,000 - -618,000 -618,000
Non-controlling Interest -86,000 - -86,000 - -72,000 -72,000
Non-recurring Items -2,322,000 - -2,322,000 - -- - --
Net Income (Loss) for the Period -2,995,000 - -2,995,000 - -546,000 -546,000
Retained Earnings (Deficit), Beginning of Period -40,023,000 - -40,023,000 -33,743,000 -33,743,000
Retained Earnings (Deficit), End of Period - -43,018,000 -43,018,000 - -34,289,000 -34,289,000
Earnings Per Share:
Excluding Non-recurring Items:
Basic - -0.02 -0.02 - -0.01 -0.01
Diluted - -0.02 - -0.02 - -0.01 -0.01
Including Non-recurring Items:
Basic -0.08 - -0.08 - -0.01 -0.01
Diluted - -0.08 - -0.08 - -0.01 -0.01
EIGER TECHNOLOGY, INC.
Unaudited Consolidated Statement of Cash Flows
For the three months ended December 31 2004 2004 2003 2003
(Current Quarter) (Year-to-Date) (Current Quarter) (Year-to-Date)
$ $ $ $
Operating Activities
Net Income (Loss) for the Period - -673,000 - -673,000 - -546,000 -546,000
Items not Involving Cash
Loss on Non-Recurring Items - -2,322,000 - -2,322,000 - -- - --
Provision for Income Taxes - Future - -- - -- - -19,000 -19,000
Amortization 73,000 73,000 110,000 110,000
-2,922,000 - -2,922,000 - -455,000 -455,000
Changes in Non-cash Operating Accounts
Accounts Receivable 1,532,000 1,532,000 234,000 234,000
Inventories 1,648,000 1,648,000 - -151,000 -151,000
Prepaid Expenses 73,000 73,000 - -70,000 -70,000
Accounts Payable -2,917,000 - -2,917,000 249,000 249,000
Deferred Revenue - -98,000 - -98,000 - -- - --
Non-controlling Interest 0 0 - -86,000 -86,000
-2,684,000 - -2,684,000 -279,000 -279,000
Investment Activities
Sale (Purchase) of Capital Assets 1,010,000 1,010,000 - -147,000 -147,000
Long-term Investments 0 0 5,000 5,000
Goodwill and Other Assets 182,000 182,000 33,000 33,000
1,192,000 1,192,000 - -109,000 -109,000
Financing Activities
Operating Line of Credit - -1,847,000 - -1,847,000 31,000 31,000
Long-term Debt - -565,000 - -565,000 240,000 240,000
Non-controlling Interest 4,061,000 4,061,000 715,000 715,000
Common Shares Issued 0 0 84,000 84,000
1,649,000 1,649,000 1,070,000 1,070,000
Net Cash Flows for the Period 157,000 157,000 682,000 682,000
Cash and Cash Equivalents, Beginning of Period 245,000 245,000 1,027,000 1,027,000
Cash and Cash Equivalents, End of Period 402,000 402,000 1,709,000 1,709,000
Cash and Cash Equivalents Represented By:
Cash and Marketable Securities 402,000 402,000 1,709,000 1,709,000
EIGER TECHNOLOGY, INC.
Notes to the Consolidated Financial Statements
For the three months ended December 31, 2004
1. Significant Accounting Policies:
These interim financial statements have been prepared using the same accounting principles and the same methods of application as were used in the preparation of the Company's annual financial statements for the year ended September 30, 2004. These interim financial statements may not contain all of the disclosures necessary to be fully in accordance with Canadian generally accepted accounting principles, and should,
therefore, be read in conjunction with the annual financial statements for the year ended September 30, 2004.
2. Capital Assets:
$
Balance per September 30, 2004 financial statements 2,498,000
Additions (Deletions), Discontinued Operations -937,000
Amortization provided for three months - -73,000
Balance - December 31, 2004 1,488,000
3. Discontinued Operations:
Effective June 30, 2003, management resolved to discontinue the operations of its "Newlook" segment. On July 8, 2003, the assets of ADH Custom Metal Fabricators Inc. ("ADH"), the operating company of the segment, were sold for cash.
The Company has reached an agreement, effective July 31, 2004, to sell its interest in Eiger Net Inc. to the non-controlling shareholders for a nominal amount. The purchasers will assume all of the outstanding liabilities of EigerNet Inc. as at July 31, 2004.
On December 15, 2004, K-Tronik International Corp.entered into an agreement to sell all of its interest in K-Tronik N.A. Inc. and the fixed assets of its subsidiary, K-Troniks Asia Ltd. It is expected that K-Tronik International Corp. will no longer be engaged in the business of manufacturing, distributing or selling electronic ballasts.
Operating results for K-Tronik for the current quarter are reported, in summary, as "Discontinued Operations" on the Statement of Operations and Retained Earnings.
4. Reorganization:
Effective March 18, 2004, the Company transferred its 100% interest in the shares of Onlinetel Corp. ("Onlinetel") to Newlook Industries Corp. ("Newlook") in exchange for 12,727,273 common shares of Newlook. At the same time, an additional 7,272,727 common shares of Newlook were issued to the Company in settlement of $1,200,000 of debt owing to the Company by Onlinetel. As a result of these transactions, and a private placement of 1,000,000 common shares by Newlook, the Company now owns
approximately 90% of the common shares of Newlook.