EIGER TECHNOLOGY, INC. | |
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS | |
As at December 31, 2006 | |
with | |
Comparative figures as at September 30, 2006 | |
and | |
For the three months ended December 31, 2006 and 2005 | |
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. | |||||||
Consolidated Balance Sheet | |||||||
December 31 | September 30 | ||||||
2006 | 2006 | ||||||
(Unaudited) | (Audited) | ||||||
$ | $ | ||||||
Assets | |||||||
Current | |||||||
Cash and Marketable Securities | 80,000 | 102,000 | |||||
Accounts Receivable | 210,000 | 262,000 | |||||
Prepaid Expenses | 32,000 | 34,000 | |||||
Income Tax Recovery | 12,000 | 7,000 | |||||
334,000 | 405,000 | ||||||
Property and Equipment (Note 4) | 922,000 | 986,000 | |||||
Advance to Corporation | 31,000 | 31,000 | |||||
Licensing Rights | 1,479,000 | 1,479,000 | |||||
2,766,000 | 2,901,000 | ||||||
Liabilities and Shareholders' Deficit | |||||||
Current | |||||||
Accounts Payable and Accrued Charges | 1,056,000 | 1,077,000 | |||||
Other Payable (Note 5) | 587,000 | 699,000 | |||||
Deferred Revenue | 700,000 | 458,000 | |||||
2,343,000 | 2,234,000 | ||||||
Non-Controlling Interests in Subsidiaries | 621,000 | 695,000 | |||||
Shareholders' Deficit | |||||||
Share Capital (Note 6) | 43,839,000 | 43,839,000 | |||||
Stock-Based Compensation | 1,705,000 | 1,705,000 | |||||
Accumulated Deficit | (45,742,000) | (45,572,000) | |||||
(198,000) | (28,000) | ||||||
2,766,000 | 2,901,000 | ||||||
On Behalf of the Board: | |||||||
"Gerry Racicot" | Director | ||||||
Gerry Racicot | |||||||
"Jason Moretto" | Director | ||||||
Jason Moretto | |||||||
EIGER TECHNOLOGY, INC. | ||||||||
Consolidated Statement of Operations and Deficit | ||||||||
For the period ended December 31 | 2006 | 2006 | 2005 | 2005 | ||||
Current Quarter | Year-to-Date | Current Quarter | Year-to-Date | |||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||
$ | $ | $ | $ | |||||
Revenues | 840,000 | 840,000 | 1,022,000 | 1,022,000 | ||||
Cost of Revenues | 509,000 | 509,000 | 715,000 | 715,000 | ||||
Gross Profit | 331,000 | 331,000 | 307,000 | 307,000 | ||||
Expenses | ||||||||
Selling, General and Administrative | 402,000 | 402,000 | 384,000 | 384,000 | ||||
Amortization of Property and Equipment | 64,000 | 64,000 | 84,000 | 84,000 | ||||
Interest and Bank Charges | 52,000 | 52,000 | 50,000 | 50,000 | ||||
518,000 | 518,000 | 518,000 | 518,000 | |||||
Income (Loss) before Undernoted | (187,000) | (187,000) | (211,000) | (211,000) | ||||
Stock-Based Compensation | -- | -- | 9,000 | 9,000 | ||||
Non-Controlling Interests | (17,000) | (17,000) | (48,000) | (48,000) | ||||
Net Earnings (Loss) | (170,000) | (170,000) | (172,000) | (172,000) | ||||
Retained Earnings (Deficit), Beginning of Period | (45,572,000) | (45,572,000) | (44,806,000) | (44,806,000) | ||||
Retained Earnings (Deficit), End of Period | (45,742,000) | (45,742,000) | (44,978,000) | (44,978,000) | ||||
Earnings (Loss) Per Weighted Average Number of Shares Outstanding - Basic and Diluted: | ||||||||
Continuing Operations | 0.00 | 0.00 | 0.00 | 0.00 | ||||
Net Earnings (Loss) | 0.00 | 0.00 | 0.00 | 0.00 | ||||
Weighted Average Number of Shares Outstanding | ||||||||
- Basic and Diluted: | ||||||||
38,819,054 | 38,819,054 | 38,819,054 | 38,819,054 | |||||
EIGER TECHNOLOGY, INC. | |||||||||||||
Consolidated Statement of Cash Flows | |||||||||||||
For the period ended December 31 | 2006 | 2006 | 2005 | 2005 | |||||||||
Current Quarter | Year-to-Date | Current Quarter | Year-to-Date | ||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||
$ | $ | $ | $ | ||||||||||
Cash Flows from Operating Activities: | |||||||||||||
Net Earnings (Loss) for the Period | (170,000 | ) | (170,000 | ) | (172,000 | ) | (172,000 | ) | |||||
Adjustments for: | |||||||||||||
Stock-Based Compensation | - | - | 9,000 | 9,000 | |||||||||
Amortization | 64,000 | 64,000 | 84,000 | 84,000 | |||||||||
(106,000 | ) | (106,000 | ) | (79,000 | ) | (79,000 | ) | ||||||
Changes in Non-Cash Working Capital: | |||||||||||||
Accounts Receivable | 52,000 | 52,000 | 265,000 | 265,000 | |||||||||
Prepaid Expenses | 2,000 | 2,000 | (54,000 | ) | (54,000 | ) | |||||||
Income Tax Recovery | (5,000 | ) | (5,000 | ) | |||||||||
Accounts Payable | (21,000 | ) | (21,000 | ) | (381,000 | ) | (381,000 | ) | |||||
Other Payable | (112,000 | ) | (112,000 | ) | 18,000 | 18,000 | |||||||
Deferred Revenue | 242,000 | 242,000 | 391,000 | 391,000 | |||||||||
52,000 | 52,000 | 160,000 | 160,000 | ||||||||||
Cash Flows from Investment Activities: | |||||||||||||
Sale (Purchase) of Property and Equipment | - | - | (53,000 | ) | (53,000 | ) | |||||||
- | - | (53,000 | ) | (53,000 | ) | ||||||||
Cash Flows from Financing Activities: | |||||||||||||
Long-Term Debt | - | - | (56,000 | ) | (56,000 | ) | |||||||
Non-Controlling Interests | (74,000 | ) | (74,000 | ) | (38,000 | ) | (38,000 | ) | |||||
(74,000 | ) | (74,000 | ) | (94,000 | ) | (94,000 | ) | ||||||
Net Increase (Decrease) in Cash | (22,000 | ) | (22,000 | ) | 13,000 | 13,000 | |||||||
Cash and Cash Equivalents - Beginning of Period | 102,000 | 102,000 | 33,000 | 33,000 | |||||||||
Cash and Cash Equivalents - End of Period | 80,000 | 80,000 | 46,000 | 46,000 | |||||||||
EIGER TECHNOLOGY, INC. | |||||||
Notes to the Consolidated Financial Statements | |||||||
For the three months ended December 31, 2006 | |||||||
1. Organization and Nature of Business: | |||||||
Eiger Technology, Inc. (the "Company" or "Eiger") was originally incorporated as Alexa Ventures Inc. | |||||||
on September 8, 1986 under the laws of British Columbia. Currently, the Company is in good standing, | |||||||
operating under the laws of Ontario. The Company is listed as an issuer on the TSX. | |||||||
Through its subsidiaries, the Company is engaged in developing Voice over Internet Protocol ("VoIP") | |||||||
based long distance calling and the business of owning or leasing horse racetracks and/or the conducting | |||||||
of horse races. | |||||||
2. 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, 2006. 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, 2006. | |||||||
3. Going Concern: | |||||||
The accompanying consolidated financial statements have been prepared on a going concern basis, 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 and contingencies in the normal course of operations. The | |||||||
Company's ability to continue as a going concern is dependent upon the Company's ability to raise | |||||||
additional capital, to increase sales, satisfy or renegotiate the forbearance agreement and sustain | |||||||
profitable operations. Should the Company be unable to continue as a going concern, it may be unable to | |||||||
realize the carrying value of its assets and to meet its liabilities as they become due. The Company | |||||||
believes that future shares issuance and certain sales related efforts will provide sufficient cash flow for it | |||||||
to continue as a going concern in its present form, however, there can be no assurances that the | |||||||
Company will achieve such results. Accordingly, the consolidated financial statements do not include any | |||||||
adjustments related to the recoverability and classification of recorded asset amounts or the amount and | |||||||
classification of liabilities or any other adjustments that might be necessary should the Company be | |||||||
unable to continue as a going concern. | |||||||
4. Property and Equipment: | |||||||
$ | |||||||
Balance per September 30, 2006 financial statements (2005 - $1,148,000) | 986,000 | ||||||
Additions (2005 - $53,000) | - | ||||||
Amortization provided for three months (2005 - ($84,000)) | -64,000 | ||||||
Balance per December 31, 2006 financial statements (2005 - $1,117,000) | 922,000 | ||||||
EIGER TECHNOLOGY, INC. | |
Notes to the Consolidated Financial Statements | |
For the three months ended December 31, 2006 | |
5. Other Payable: | |
Pursuant to a Forbearance Agreement signed on September 30, 2005 with a telecommunications | |
company, the Company's subsidiary, Onlinetel Corp. is obligated to pay a principal amount plus interest | |
calculated at an annual rate of 8% per annum. Newlook unconditionally and irrevocably guarantees | |
payment of the obligation. Amendments to the Forbearance Agreement were signed on May 25, 2006 | |
and December 5, 2006. Newlook made payments towards the outstanding balance of $286,619 on | |
April 11, 2006 and $124,000 on November 9, 2006. The remaining amount is due February 28, 2007. | |
The payable is secured by an interest in all of the present and future personal property of Onlinetel | |
Corp., ranking senior in priority to all liens security interest, encumbrances and charges. | |
6. Share Capital: | |
Authorized: 100,000,000 Common Shares without par value. | |
Issued: 38,819,054 Common Shares. | |
Stock Options Issued: 3,556,000 Options. | |
7. 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 two subsequent private placements by Newlook, the Company | |
now owns approximately 79% of the common shares of Newlook. | |