EIGER TECHNOLOGY, INC.
Unaudited Consolidated Financial Statements
for the three months ended March 31, 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.
Unaudited Consolidated Balance Sheet
March 31 2005 (Unaudited) | September 30 2004 (Audited) | |||||||
---|---|---|---|---|---|---|---|---|
$ | $ | |||||||
Assets | ||||||||
Current | ||||||||
Cash and Marketable Securities | 272,000 | 275,000 | ||||||
Accounts Receivable | 846,000 | 2,221,000 | ||||||
Inventories | — | 1,648,000 | ||||||
Prepaid Expenses | 27,000 | 128,000 | ||||||
1,145,000 | 4,272,000 | |||||||
Capital Assets (note 2) | 1,428,000 | 2,498,000 | ||||||
Long-term Investments | 96,000 | 96,000 | ||||||
Other | — | 182,000 | ||||||
2,669,000 | 7,048,000 | |||||||
Liabilities and Shareholders’ Equity | ||||||||
Current | ||||||||
Bank Indebtedness | — | 1,847,000 | ||||||
Accounts Payable and Accrued Liabilities | 2,286,000 | 5,103,000 | ||||||
Deferred Revenue | 423,000 | 333,000 | ||||||
Current Portion of Long-term Debt | 265,000 | 500,000 | ||||||
2,974,000 | 7,783,000 | |||||||
Long-term Debt | — | 347,000 | ||||||
Non-Controlling Interest | (284,000 | ) | (4,356,000 | ) | ||||
Shareholders’ Equity | ||||||||
Share Capital | 43,297,000 | 43,297,000 | ||||||
Retained Earnings (Deficit) | (43,318,000 | ) | (40,023,000 | ) | ||||
(21,000 | ) | 3,274,000 | ||||||
2,669,000 | 7,048,000 | |||||||
On Behalf of the Board:
“Gerry Racicot” —————————————————— Gerry Racicot | Director | |
| ||
“Jason Moretto” —————————————————— Jason Moretto | Director |
EIGER TECHNOLOGY, INC.
Unaudited Consolidated Statement of Operations and Retained Earnings
For the three months ended March 31 | 2005 | 2005 | 2004 | 2004 | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(Current Quarter) $ | (Year-to-Date) $ | (Current Quarter) $ | (Year-to-Date) $ | |||||||||||
Sales | 1,231,000 | 2,744,000 | 3,498,000 | 7,913,000 | ||||||||||
Cost of Sales | 1,002,000 | 2,367,000 | 3,079,000 | 6,514,000 | ||||||||||
Gross Margin | 229,000 | 377,000 | 419,000 | 1,399,000 | ||||||||||
Expenses | ||||||||||||||
Selling, General and Administrative | 335,000 | 1,036,000 | 1,616,000 | 3,106,000 | ||||||||||
Amortization of Capital Assets | 63,000 | 136,000 | 177,000 | 264,000 | ||||||||||
Amortization of Goodwill and Other Assets | — | — | 43,000 | 66,000 | ||||||||||
Interest and Bank Charges | 31,000 | 80,000 | 129,000 | 259,000 | ||||||||||
Discontinued Operations (Net) | — | 84,000 | 21,000 | 42,000 | ||||||||||
429,000 | 1,336,000 | 1,986,000 | 3,737,000 | |||||||||||
Income (Loss) from Operations | (200,000 | ) | (959,000 | ) | (1,567,000 | ) | (2,338,000 | ) | ||||||
Other Income | — | — | 287,000 | 421,000 | ||||||||||
Income before Taxes | (200,000 | ) | (959,000 | ) | (1,280,000 | ) | (1,917,000 | ) | ||||||
Provision for Income Taxes - Future | — | — | (122,000 | ) | (141,000 | ) | ||||||||
Income before Non-controlling Interest | (200,000 | ) | (959,000 | ) | (1,158,000 | ) | (1,776,000 | ) | ||||||
Non-controlling Interest | (19,000 | ) | (105,000 | ) | (340,000 | ) | (412,000 | ) | ||||||
Non-recurring Items | (119,000 | ) | (2,441,000 | ) | — | — | ||||||||
Net Income (Loss) for the Period | (300,000 | ) | (3,295,000 | ) | (818,000 | ) | (1,364,000 | ) | ||||||
Retained Earnings (Deficit), Beginning of Period | (43,018,000 | ) | (40,023,000 | ) | (34,289,000 | ) | (33,743,000 | ) | ||||||
Retained Earnings (Deficit), End of Period | (43,318,000 | ) | (43,318,000 | ) | (35,107,000 | ) | (35,107,000 | ) | ||||||
Earnings Per Share: | ||||||||||||||
Excluding Non-recurring Items: | ||||||||||||||
Basic | 0.00 | (0.02 | ) | (0.02 | ) | (0.04 | ) | |||||||
Diluted | 0.00 | (0.02 | ) | (0.02 | ) | (0.04 | ) | |||||||
Including Non-recurring Items: | ||||||||||||||
Basic | (0.01 | ) | (0.08 | ) | (0.02 | ) | (0.04 | ) | ||||||
Diluted | (0.01 | ) | (0.08 | ) | (0.02 | ) | (0.04 | ) | ||||||
EIGER TECHNOLOGY, INC.
Unaudited Consolidated Statement of Cash Flows
For the three months ended March 31 | 2005 | 2005 | 2004 | 2004 | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(Current Quarter) $ | (Year-to-Date) $ | (Current Quarter) $ | (Year-to-Date) $ | |||||||||||
Operating Activities | ||||||||||||||
Net Income (Loss) for the Period | (181,000 | ) | (854,000 | ) | (818,000 | ) | (1,364,000 | ) | ||||||
Items not Involving Cash | ||||||||||||||
Loss on Non-Recurring Items | (119,000 | ) | (2,441,000 | ) | — | — | ||||||||
Provision for Income Taxes - Future | — | — | (122,000 | ) | (141,000 | ) | ||||||||
Amortization | 63,000 | 136,000 | 220,000 | 330,000 | ||||||||||
(237,000 | ) | (3,159,000 | ) | (720,000 | ) | (1,175,000 | ) | |||||||
Changes in Non-cash Operating Accounts | ||||||||||||||
Accounts Receivable | (157,000 | ) | 1,375,000 | 93,000 | 327,000 | |||||||||
Inventories | — | 1,648,000 | 521,000 | 370,000 | ||||||||||
Prepaid Expenses | 28,000 | 101,000 | 35,000 | (35,000 | ) | |||||||||
Accounts Payable | 100,000 | (2,817,000 | ) | (55,000 | ) | 194,000 | ||||||||
Deferred Revenue | 188,000 | 90,000 | — | — | ||||||||||
Non-controlling Interest | — | — | (340,000 | ) | (426,000 | ) | ||||||||
(78,000 | ) | (2,762,000 | ) | (466,000 | ) | (745,000 | ) | |||||||
Investment Activities | ||||||||||||||
Sale (Purchase) of Capital Assets | (3,000 | ) | 1,007,000 | (179,000 | ) | (326,000 | ) | |||||||
Long-term Investments | — | — | (13,000 | ) | (8,000 | ) | ||||||||
Goodwill and Other Assets | — | 182,000 | (156,000 | ) | (123,000 | ) | ||||||||
(3,000 | ) | 1,189,000 | (348,000 | ) | (457,000 | ) | ||||||||
Financing Activities | ||||||||||||||
Operating Line of Credit | — | (1,847,000 | ) | (319,000 | ) | (288,000 | ) | |||||||
Long-term Debt | (60,000 | ) | (625,000 | ) | (180,000 | ) | 60,000 | |||||||
Non-controlling Interest | 11,000 | 4,072,000 | 310,000 | 1,025,000 | ||||||||||
Common Shares Issued | — | — | 542,000 | 626,000 | ||||||||||
(49,000 | ) | 1,600,000 | 353,000 | 1,423,000 | ||||||||||
Net Cash Flows for the Period | (130,000 | ) | 27,000 | (461,000 | ) | 221,000 | ||||||||
Cash and Cash Equivalents, Beginning of Period | 402,000 | 245,000 | 1,709,000 | 1,027,000 | ||||||||||
Cash and Cash Equivalents, End of Period | 272,000 | 272,000 | 1,248,000 | 1,248,000 | ||||||||||
Cash and Cash Equivalents Represented By: | ||||||||||||||
Cash and Marketable Securities | 272,000 | 272,000 | 1,248,000 | 1,248,000 | ||||||||||
EIGER TECHNOLOGY, INC.
Notes to the Consolidated Financial Statements
For the three months ended March 31, 2005
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 | (934,000 | ) | |||
Amortization provided for six months | (136,000 | ) | |||
Balance per March 31, 2005 financial statements | 1,428,000 | ||||
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 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 assumed all of the outstanding liabilities of Eiger Net 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 year-to-date period 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.