EIGER TECHNOLOGY, INC. | ||||||
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS | ||||||
As at June 30, 2007 | ||||||
with | ||||||
Comparative figures as at September 30, 2006 | ||||||
and | ||||||
For the nine months ended June 30, 2007 and 2006 | ||||||
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 | ||||||||||||
June 30 | September 30 | |||||||||||
2007 | 2006 | |||||||||||
(Unaudited) | (Audited) | |||||||||||
Assets | ||||||||||||
Current | ||||||||||||
Cash and Marketable Securities | $ | 37,000 | $ | 102,000 | ||||||||
Accounts Receivable | 115,000 | 262,000 | ||||||||||
Prepaid Expenses | 27,000 | 34,000 | ||||||||||
Income Tax Recovery | - | 7,000 | ||||||||||
179,000 | 405,000 | |||||||||||
Equity Investment (Note 4) | 489,000 | - | ||||||||||
Property and Equipment (Note 5) | 53,000 | 986,000 | ||||||||||
Advance to Related Corporations (Note 6) | 3,047,000 | 31,000 | ||||||||||
Licensing Rights | - | 1,479,000 | ||||||||||
$ | 3,768,000 | $ | 2,901,000 | |||||||||
Liabilities and Shareholders' Deficit | ||||||||||||
Current | ||||||||||||
Accounts Payable and Accrued Charges | $ | 1,401,000 | $ | 1,077,000 | ||||||||
Other payables | - | 699,000 | ||||||||||
Deferred revenue | - | 458,000 | ||||||||||
1,401,000 | 2,234,000 | |||||||||||
Non-Controlling Interests in Subsidiaries | - | 695,000 | ||||||||||
Shareholders' Equity (Deficit) | ||||||||||||
Share Capital (Note 8) | 44,375,000 | 43,839,000 | ||||||||||
Stock-Based Compensation | 1,264,000 | 1,705,000 | ||||||||||
Deficit | (43,272,000 | ) | (45,572,000 | ) | ||||||||
2,367,000 | (28,000 | ) | ||||||||||
$ | 3,768,000 | $ | 2,901,000 | |||||||||
On Behalf of the Board: | ||||||||||||
"John Simmonds" | Director | |||||||||||
John Simmonds | ||||||||||||
"Jason Moretto" | Director | |||||||||||
Jason Moretto |
EIGER TECHNOLOGY, INC. | ||||||||||||||||||||||||||||
Consolidated Statement of Operations and Deficit | ||||||||||||||||||||||||||||
For the period ended June 30 | 2007 | 2007 | 2006 | 2006 | ||||||||||||||||||||||||
Current Quarter | Year-to-Date | Quarter | Year-to-Date | |||||||||||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||||||||||||
Revenues | $ | - | $ | - | $ | 1,082,000 | $ | 3,130,000 | ||||||||||||||||||||
Cost of Revenues | - | - | 583,000 | 1,965,000 | ||||||||||||||||||||||||
Gross Profit | - | - | 499,000 | 1,165,000 | ||||||||||||||||||||||||
Expenses | ||||||||||||||||||||||||||||
Selling, General and Administrative | 1,041,000 | 1,440,000 | 346,000 | 1,104,000 | ||||||||||||||||||||||||
Amortization of Property and Equipment | 3,000 | 9,000 | 80,000 | 242,000 | ||||||||||||||||||||||||
Interest and Bank Charges | 1,000 | 2,000 | 47,000 | 148,000 | ||||||||||||||||||||||||
1,045,000 | 1,451,000 | 473,000 | 1,494,000 | |||||||||||||||||||||||||
Income (Loss) from Operations | (1,045,000 | ) | (1,451,000 | ) | 26,000 | (329,000 | ) | |||||||||||||||||||||
Other Income | ||||||||||||||||||||||||||||
Interest income (expense) | 1,000 | 1,000 | - | - | ||||||||||||||||||||||||
Earnings (Loss) from Equity Investments | (229,000 | ) | (155,000 | ) | - | - | ||||||||||||||||||||||
Gain (Loss) on Sale of Investment in Subsidiary | - | (569,000 | ) | - | - | |||||||||||||||||||||||
Gain (Loss) on Dilution - (Note 2) | 4,479,000 | 4,479,000 | - | - | ||||||||||||||||||||||||
4,251,000 | 3,756,000 | - | - | |||||||||||||||||||||||||
Earnings (Loss) from Continuing Operations | ||||||||||||||||||||||||||||
Before Income Taxes | 3,206,000 | 2,305,000 | 26,000 | (329,000 | ) | |||||||||||||||||||||||
Provision (Recovery) of Income Taxes | - | 5,000 | - | |||||||||||||||||||||||||
Earnings (Loss) from Continuing Operations | 3,206,000 | 2,300,000 | 26,000 | (329,000 | ) | |||||||||||||||||||||||
Stock-Based Compensation | - | - | 429,000 | 438,000 | ||||||||||||||||||||||||
Non-Controlling Interests | (31,000 | ) | - | 36,000 | (8,000 | ) | ||||||||||||||||||||||
Net Earnings (Loss) | 3,175,000 | 2,300,000 | (439,000 | ) | (759,000 | ) | ||||||||||||||||||||||
Retained Earnings (Deficit), Beginning of Period | (46,447,000 | ) | (45,572,000 | ) | (45,126,000 | ) | (44,806,000 | ) | ||||||||||||||||||||
Retained Earnings (Deficit), End of Period | $ | (43,272,000 | ) | $ | (43,272,000 | ) | $ | (45,565,000 | ) | $ | (45,565,000 | ) | ||||||||||||||||
Earnings (Loss) Per Weighted Average Number of Shares Outstanding - Basic and Diluted: | ||||||||||||||||||||||||||||
Continuing Operations | $ | 0.08 | $ | 0.06 | $ | 0.00 | $ | (0.01 | ) | |||||||||||||||||||
Net Earnings (Loss) | $ | 0.08 | $ | 0.06 | $ | (0.01 | ) | $ | (0.02 | ) | ||||||||||||||||||
Weighted Average Number of Shares Outstanding - Basic and Diluted: | ||||||||||||||||||||||||||||
41,372,146 | 39,670,085 | 38,819,054 | 38,819,054 | |||||||||||||||||||||||||
EIGER TECHNOLOGY, INC. | ||||
Consolidated Statement of Cash Flows |
2007 Current Quarter (Unaudited) | 2007 Year-to-Date (Unaudited) | 2006 Current Quarter (Unaudited) | 2006 Year-to-Date (Unaudited) | |||||||||||||
Cash Flows from Operating Activities: | ||||||||||||||||
Net Earnings (Loss) for the Period | $ | 3,175,000 | $ | 2,300,000 | $ | (439,000 | ) | $ | (759,000 | ) | ||||||
Adjustments for: | ||||||||||||||||
Stock-Based Compensation | - | - | 429,000 | 438,000 | ||||||||||||
Dilution gain | (4,479,000 | ) | (4,479,000) | - | - | |||||||||||
Loss on sale | - | 569,000 | - | - | ||||||||||||
Loss of equity accounted investee | 229,000 | 155,000 | - | - | ||||||||||||
Amortization | 3,000 | 9,000 | 80,000 | 242,000 | ||||||||||||
(1,072,000) | (1,446,000) | 70,000 | (79,000) | |||||||||||||
Changes in Non-Cash Working Capital: | ||||||||||||||||
Accounts Receivable | 207,000 | (104,000) | 139,000 | 308,000 | ||||||||||||
Prepaid Expenses | (16,000) | (17,000) | 31,000 | (123,000) | ||||||||||||
Income tax recovery | - | 7,000 | - | - | ||||||||||||
Advances to Corporations | (1,001,000) | (1,099,000) | - | - | ||||||||||||
Accounts Payable | 768,000 | 1,665,000 | 63,000 | (413,000) | ||||||||||||
Other Payable | - | (699,000) | (273,000) | (237,000) | ||||||||||||
Deferred Revenue | - | - | (392,000) | 9,000 | ||||||||||||
(1,114,000) | (1,693,000) | (362,000) | (535,000) | |||||||||||||
Cash Flows from Investment Activities: | ||||||||||||||||
Sale (Purchase) of Property and Equipment | - | - | (1,485,000) | (1,662,000) | ||||||||||||
Goodwill and Other Assets | - | - | - | 20,000 | ||||||||||||
- | - | (1,485,000) | (1,642,000) | |||||||||||||
Cash Flows from Financing Activities; | ||||||||||||||||
Long-Term Debt | ||||||||||||||||
Sale of Common Shares | - | - | - | (82,000) | ||||||||||||
Non-Controlling Interests | 536,000 | 536,000 | - | - | ||||||||||||
438,000 | 1,119,000 | 1,531,000 | 2,264,000 | |||||||||||||
974,000 | 1,655,000 | 1,531,000 | 2,182,000 | |||||||||||||
Net Increase (Decrease) in Cash | (140,000) | (38,000) | (316,000) | 5,000 | ||||||||||||
Cash and Cash Equivalents - Beginning of Period | 177,000 | 75,000 | 354,000 | 33,000 | ||||||||||||
Cash and Cash Equivalents - End of Period | $ | 37,000 | $ | 37,000 | $ | 38,000 | $ | 38,000 | ||||||||
EIGER TECHNOLOGY, INC. | |||||
Notes to the Consolidated Financial Statements | |||||
For the nine months ended June 30, 2007 | |||||
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. | |||||
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. However, Eiger's interest in Newlook decreased from | |||||
85% to 42% during the second quarter of 2007, resulting in Eiger changing its accounting for Newlook | |||||
from consolidation to equity accounting. As a result of this, the company has recognized a dilution | |||||
gain of $4,479,000. During the third quarter of 2007, Eiger's interest in Racino Royale, Inc. | |||||
decreased from 50%to 45%, resulting in Eiger changing its accounting for Racino to equity accounting. | |||||
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 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. Equity Investment: | |||||
The Company's equity investments consist of an ownership interest in Newlook Industries Corp. and | |||||
Racino Royale, Inc. The carrying value of investments is summarized as follows: | |||||
Racino Royale, Inc. | 489,000 | ||||
Newlook Industries Corp. | 0 | ||||
489,000 | |||||
5. Property and Equipment: | |||||
Net Book | |||||
Value | |||||
Furniture and fixtures | 49,000 | ||||
Computer software | 4,000 | ||||
53,000 | |||||
6. Advance to Corporation: | |||||
Newlook Industries Corp. | 862,000 | ||||
OnlineTel | 1,613,000 | ||||
Racino Royale, Inc. | 229,000 | ||||
Alexa Properties | 156,000 | ||||
Club Connects | 2,000 | ||||
ADH | 185,000 | ||||
3,047,000 | |||||
Advances noted above are unsecured, non-interest bearing and have no specific repayment terms. | |||||
7. Commitments and Contingencies: | |||||
The Company is obligated under an office premise lease until February 2011. Under the terms of | |||||
the agreement, the Company is committed to rental payments as follows: | |||||
2007 | 38,500 | ||||
2008 | 102,000 | ||||
2009 | 102,000 | ||||
2010 | 102,000 | ||||
2011 | 34,000 | ||||
378,500 | |||||
8. Share Capital: | |||||
Authorized: 100,000,000 Common Shares without par value. | |||||
Issued: 42,389,054 Common Shares. | |||||
Stock Options Issued: 3,556,000 Options. | |||||