EXHIBIT 99.2
GENTERRA CAPITAL INC.
INTERIM REPORT
Notice to Reader
Management has compiled the unaudited interim financial information of Genterra Capital Inc. consisting of the interim consolidated balance sheet as at June 30, 2010 and the interim consolidated statement of retained earnings, operations, comprehensive loss and cash flows for the six-month period then ended. An accounting firm has not reviewed or audited this interim financial information.
GENTERRA CAPITAL INC. | |||||||||
(the corporation which continued from the amalgamation of Genterra Inc. and Consolidated Mercantile Incorporated) | |||||||||
CONSOLIDATED BALANCE SHEET | |||||||||
(Unaudited) | |||||||||
June 30 | December 31 | ||||||||
2010 | 2009 | ||||||||
A S S E T S | |||||||||
CURRENT | |||||||||
Cash and cash equivalents | $ | 18,148,754 | $ | 14,491,151 | |||||
Short-term investments | 4,443,086 | 2,475,769 | |||||||
Accounts receivable | 842,636 | 981 | |||||||
Prepaid expenses and deposits | 204,743 | 467,395 | |||||||
Current portion of notes and mortgage receivable | 27,025 | 96,853 | |||||||
Future income taxes | 32,384 | - | |||||||
23,698,628 | 17,532,149 | ||||||||
NOTES AND MORTGAGE RECEIVABLE | 249,000 | - | |||||||
INVESTMENTS | - | 294,164 | |||||||
RENTAL REAL ESTATE PROPERTIES | 20,764,594 | - | |||||||
FUTURE INCOME TAXES | 333,222 | - | |||||||
$ | 45,045,444 | $ | 17,826,313 | ||||||
L I A B I L I T I E S | |||||||||
CURRENT | |||||||||
Accounts payable and accrued liabilities | $ | 568,185 | $ | 377,565 | |||||
Income taxes payable | 74,163 | 1,118,086 | |||||||
Deferred revenue | 201,447 | - | |||||||
Current portion of long-term debt | 2,535,156 | - | |||||||
Future income taxes | - | 3,157 | |||||||
3,378,951 | 1,498,808 | ||||||||
LONG-TERM DEBT | 607,265 | - | |||||||
DEFERRED GAIN | - | 42,100 | |||||||
FUTURE INCOME TAXES | 3,406,699 | - | |||||||
RETRACTABLE PREFERENCE SHARES | 5,039,172 | - | |||||||
12,432,087 | 1,540,908 | ||||||||
S H A R E H O L D E R S' E Q U I T Y | |||||||||
CAPITAL STOCK | 19,229,307 | 2,830,765 | |||||||
CONTRIBUTED SURPLUS | 747,398 | 59,411 | |||||||
RETAINED EARNINGS | 12,636,652 | 13,395,229 | |||||||
32,613,357 | 16,285,405 | ||||||||
$ | 45,045,444 | $ | 17,826,313 | ||||||
See accompanying notes to consolidated financial statements |
GENTERRA CAPITAL INC. | ||||||||||||||||
(the corporation which continued from the amalgamation of Genterra Inc. and Consolidated Mercantile Incorporated) | ||||||||||||||||
CONSOLIDATED STATEMENT OF RETAINED EARNINGS | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Six Months ended June 30 | Three months ended June 30 | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Balance at beginning of period | $ | 13,395,229 | $ | 13,627,690 | $ | 13,335,632 | $ | 13,598,242 | ||||||||
Excess of cost of shares repurchased for cancellation from | ||||||||||||||||
shareholders dissenting to the amalgamation over stated value | (489,388 | ) | - | (489,388 | ) | - | ||||||||||
Net loss for the period | (269,189 | ) | (236,418 | ) | (209,592 | ) | (206,970 | ) | ||||||||
Balance at end of period | $ | 12,636,652 | $ | 13,391,272 | $ | 12,636,652 | $ | 13,391,272 | ||||||||
See accompanying notes to consolidated financial statements |
GENTERRA CAPITAL INC. | ||||||||||||||||
(the corporation which continued from the amalgamation of Genterra Inc. and Consolidated Mercantile Incorporated) | ||||||||||||||||
CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Six Months ended June 30 | Three months ended June 30 | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
REVENUE | ||||||||||||||||
Rent | $ | 459,168 | $ | - | $ | 459,168 | $ | - | ||||||||
EXPENSES | ||||||||||||||||
Administrative and general | 441,799 | 522,485 | 274,757 | 387,103 | ||||||||||||
Loss (gain) on foreign exchange | (248 | ) | 989 | (306 | ) | 2,353 | ||||||||||
Rental real estate operating expenses | 214,521 | - | 214,521 | - | ||||||||||||
656,072 | 523,474 | 488,972 | 389,456 | |||||||||||||
LOSS BEFORE THE FOLLOWING | (196,904 | ) | (523,474 | ) | (29,804 | ) | (389,456 | ) | ||||||||
Amortization | 123,083 | - | 123,083 | - | ||||||||||||
Dividends on retractable preference shares | 55,733 | - | 55,733 | - | ||||||||||||
Interest on long-term debt | 20,555 | - | 20,555 | - | ||||||||||||
199,371 | - | 199,371 | - | |||||||||||||
LOSS BEFORE THE FOLLOWING | (396,275 | ) | (523,474 | ) | (229,175 | ) | (389,456 | ) | ||||||||
OTHER INCOME AND EXPENSES | ||||||||||||||||
Interest income | 64,906 | 63,400 | 44,128 | 24,422 | ||||||||||||
Investment income (loss) | (47,282 | ) | 226,153 | (86,310 | ) | 144,016 | ||||||||||
Impairment loss on note receivable | (32,962 | ) | (38,000 | ) | (18,069 | ) | (19,000 | ) | ||||||||
Equity earnings (loss) of significantly influenced company | 939 | 1,172 | 415 | (1,783 | ) | |||||||||||
(14,399 | ) | 252,725 | (59,836 | ) | 147,655 | |||||||||||
LOSS BEFORE INCOME TAXES | (410,674 | ) | (270,749 | ) | (289,011 | ) | (241,801 | ) | ||||||||
Income taxes (recovery) | ||||||||||||||||
Current | (3,126 | ) | 7,719 | 16,840 | 7,219 | |||||||||||
Future | (96,259 | ) | - | (96,259 | ) | - | ||||||||||
(99,385 | ) | 7,719 | (79,419 | ) | 7,219 | |||||||||||
LOSS FROM CONTINUING OPERATIONS | (311,289 | ) | (278,468 | ) | (209,592 | ) | (249,020 | ) | ||||||||
Deferred gain recognized on sale of former consolidated subsidiary | 42,100 | 42,050 | - | 42,050 | ||||||||||||
EARNINGS FROM DISCONTINUED OPERATIONS | 42,100 | 42,050 | - | 42,050 | ||||||||||||
NET LOSS FOR THE PERIOD, ALSO BEING | ||||||||||||||||
COMPREHENSIVE LOSS FOR THE PERIOD | $ | (269,189 | ) | $ | (236,418 | ) | $ | (209,592 | ) | $ | (206,970 | ) | ||||
EARNINGS (LOSS) PER SHARE | ||||||||||||||||
Loss per share from continuing operations | ||||||||||||||||
Basic and diluted | $ | (0.049 | ) | $ | (0.055 | ) | $ | (0.028 | ) | $ | (0.049 | ) | ||||
Earnings per share from discontinued operations | ||||||||||||||||
Basic and diluted | $ | 0.007 | $ | 0.008 | $ | 0.000 | $ | 0.008 | ||||||||
Loss per share | ||||||||||||||||
Basic and diluted | $ | (0.042 | ) | $ | (0.047 | ) | $ | (0.028 | ) | $ | (0.041 | ) | ||||
Weighted average number of shares | ||||||||||||||||
Basic and diluted | 6,344,966 | 5,076,407 | 7,599,585 | 5,076,407 | ||||||||||||
The effect on the fiscal 2010 second quarter and year-to-date earnings (loss) per share of the conversion of the Genterra Capital Inc.'s Class A preference shares is anti-dilutive | ||||||||||||||||
and therefore not disclosed. | ||||||||||||||||
See accompanying notes to consolidated financial statements |
GENTERRA CAPITAL INC. | ||||||||||||||||
(the corporation which continued from the amalgamation of Genterra Inc. and Consolidated Mercantile Incorporated) | ||||||||||||||||
CONSOLIDATED STATEMENT OF CASH FLOWS | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Six Months ended June 30 | Three months ended June 30 | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
OPERATING ACTIVITIES | ||||||||||||||||
Loss from continuing operations | $ | (311,289 | ) | $ | (278,468 | ) | $ | (209,592 | ) | $ | (249,020 | ) | ||||
Amortization | 123,083 | - | 123,083 | - | ||||||||||||
Future income taxes | (96,259 | ) | - | (96,259 | ) | - | ||||||||||
Unrealized loss (gain) on short-term investments | 47,802 | 26,089 | 59,322 | (74,418 | ) | |||||||||||
Dividends on retractable preference shares | 55,733 | - | 55,733 | - | ||||||||||||
Accretion interest on discounted note receivable | (36,109 | ) | (38,065 | ) | (18,069 | ) | (19,000 | ) | ||||||||
Impairment loss on note receivable | 32,962 | 38,000 | 18,069 | 19,000 | ||||||||||||
Equity (earnings) loss of significantly influenced company | (939 | ) | (1,172 | ) | (415 | ) | 1,783 | |||||||||
Unrealized (gain) loss on foreign exchange | (248 | ) | 353 | (306 | ) | 410 | ||||||||||
(185,264 | ) | (253,263 | ) | (68,434 | ) | (321,245 | ) | |||||||||
Change in non-cash components of working capital | ||||||||||||||||
Accounts receivable | 352,845 | 10,270 | 351,966 | 6,970 | ||||||||||||
Prepaid expenses and deposits | 463,735 | (179,969 | ) | 585,025 | (78,347 | ) | ||||||||||
Accounts payable and accrued liabilities | (305,276 | ) | (588 | ) | (403,637 | ) | (30,436 | ) | ||||||||
Income taxes payable | (1,147,302 | ) | 250,278 | (1,130,763 | ) | 240,778 | ||||||||||
(821,262 | ) | (173,272 | ) | (665,843 | ) | (182,280 | ) | |||||||||
FINANCING ACTIVITIES | ||||||||||||||||
Redemption of shares held by dissenting shareholders | (2,141,464 | ) | - | (2,141,464 | ) | - | ||||||||||
Redemption of Class A preference shares | (138,839 | ) | - | - | - | |||||||||||
Repayment of long-term debt | (25,371 | ) | - | (25,371 | ) | - | ||||||||||
(2,305,674 | ) | - | (2,166,835 | ) | - | |||||||||||
INVESTING ACTIVITIES | ||||||||||||||||
Cash acquired on acquisition of Genterra Inc. | 7,255,426 | - | 7,255,426 | - | ||||||||||||
Transaction costs | (747,289 | ) | - | (747,289 | ) | - | ||||||||||
Proceeds from note receivable | 247,200 | 100,000 | 147,200 | 100,000 | ||||||||||||
Proceeds from (additions to) short-term investments | 28,954 | 608,106 | 49,330 | (62,465 | ) | |||||||||||
6,784,291 | 708,106 | 6,704,667 | 37,535 | |||||||||||||
UNREALIZED FOREIGN EXCHANGE (GAIN) LOSS | ||||||||||||||||
ON CASH BALANCES | 248 | (353 | ) | 306 | (410 | ) | ||||||||||
CHANGE IN CASH AND CASH EQUIVALENTS | 3,657,603 | 534,481 | 3,872,295 | (145,155 | ) | |||||||||||
CASH AND CASH EQUIVALENTS, beginning of period | 14,491,151 | 14,178,399 | 14,276,459 | 14,858,035 | ||||||||||||
CASH AND CASH EQUIVALENTS, end of period | $ | 18,148,754 | $ | 14,712,880 | $ | 18,148,754 | $ | 14,712,880 | ||||||||
Cash and cash equivalents consist of cash balances with banks, and investments in money market instruments. | ||||||||||||||||
Cash and cash equivalents included in the cash flow statement are comprised of the following balance sheet amounts: | ||||||||||||||||
Cash balances with banks | $ | 798,754 | $ | 49,071 | ||||||||||||
Money market instruments | 17,350,000 | 14,663,809 | ||||||||||||||
Total cash and cash equivalents | $ | 18,148,754 | $ | 14,712,880 | ||||||||||||
Money market instruments consist primarily of investments in short term deposits with maturities of three months or less. | ||||||||||||||||
Supplementary cash flow information: | ||||||||||||||||
Income taxes paid | $ | 1,173,136 | $ | 24,824 | $ | 1,158,136 | $ | 22,324 | ||||||||
Interest paid | $ | 11,779 | $ | - | $ | 11,779 | $ | - | ||||||||
See accompanying notes to consolidated financial statements |
GENTERRA CAPITAL INC.
(the corporation which continued from the amalgamation of Genterra Inc. and Consolidated Mercantile Incorporated)
NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
The accompanying unaudited interim consolidated financial statements have been prepared by Genterra Capital Inc. (the corporation which continued from the amalgamation of Genterra Inc. and Consolidated Mercantile Incorporated) (“GCI” or “the Company”) in accordance with accounting principles generally accepted in Canada on a basis consistent with those followed in the most recent audited consolidated financial statements except as noted below. These unaudited interim consolidated financial statements do not include all the information and footnotes required by the generally accepted accounting principles for annual financial statements and therefore should be read in conjunction with the audited consolidated financial statements and notes included in Consolidated Mercantile Inc.’s (“CMI”) Annual Report for the year ended December 31, 2009 and the audited consolidated financial statements and notes included in Genterra Inc.’s (“Genterra”) Annual Report for the year ended September 30, 2009.
Amalgamation
On February 25, 2010 the shareholders of Genterra and CMI adopted Special Resolutions authorizing the proposed amalgamation of the two companies to continue as an amalgamated company under the name “Genterra Capital Inc.” The amalgamation became effective on May 10, 2010. The year end of Genterra Capital Inc. will be September 30.
As a result of the amalgamation, Genterra Shareholders received one GCI Common Share for every 3.6 Genterra Common Shares held and CMI Shareholders received one GCI Common Share in exchange for each CMI Common Share held. Each holder of Genterra Class A preference shares, series 1 received one GCI Class A preference share, series 1 in exchange for each Genterra Class A preference share, series 1 held and each holder of Genterra Class B preference shares received one GCI Class B preference share in exchange for each Genterra Class B preference share held.
CMI and Genterra are deemed to be related parties pursuant to Canadian generally accepted accounting standards and the amalgamation qualifies for treatment at the exchange amount for accounting purposes. The amalgamation has been accounted for as a purchase transaction based on the exchange amount as negotiated between the two companies with CMI identified as the acquirer of Genterra. Accordingly the net assets of CMI have been recorded in the accounts of the Company at their carrying values and the net assets of Genterra have been recorded at fair value.
The preliminary purchase price allocation as at May 10, 2010 is as follows:
Genterra Equity Investment (1.5%) | Genterra Acquisition (98.5%) | Total (100%) | ||||||||||
Purchase consideration | ||||||||||||
5,290,860 Common shares | $ | 16,983,661 | ||||||||||
26,274,918 Class B preference shares | 1,313,746 | |||||||||||
326,000 retractable convertible Class A preference shares | 5,668,439 | |||||||||||
Transaction costs | 607,173 | |||||||||||
$ | 295,104 | $ | 24,573,019 | $ | 24,868,123 | |||||||
Assets acquired | ||||||||||||
Working capital | $ | 7,983 | $ | 7,502,642 | $ | 7,510,625 | ||||||
Note receivable | 3,761 | 245,239 | 249,000 | |||||||||
Rental real estate properties | 354,209 | 20,533,468 | 20,887,677 | |||||||||
Long-term debt | (9,319 | ) | (607,616 | ) | (616,935 | ) | ||||||
Future income taxes | (61,530 | ) | (3,100,714 | ) | (3,162,244 | ) | ||||||
$ | 295,104 | $ | 24,573,019 | $ | 24,868,123 | |||||||
As at June 30, 2010 the fair value of the purchase price and the allocation of the purchase price to the fair value of the net assets acquired has not been finalized and will be subject to further adjustment. Income from the acquired assets is included in the consolidated statement of operations of GCI from the date of acquisition.
Investments (see “Amalgamation”)
Long-term investments in which the Company has significant influence are accounted for using the equity method. Whenever events or changes in circumstances indicate that the carrying value of an investment may not be recoverable, the investment will be written down to its fair value. Any impairment in value is recorded in the consolidated statement of operations. On May 10, 2010 the Company amalgamated with Genterra, a significantly influenced company.
June 30, 2010 | December 31, 2009 | |||||||
Investment in significantly influenced company – at equity (1.5%) | $ | - | $ | 294,164 |
GENTERRA CAPITAL INC.
(the corporation which continued from the amalgamation of Genterra Inc. and Consolidated Mercantile Incorporated)
NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Notes and Mortgage Receivable
June 30, 2010 | December 31, 2009 | |||||||
Note receivable, non-interest bearing, discounted at 17.5% . The note is secured by the shares of a former consolidated subsidiary, Distinctive Designs Furniture Inc. | $ | 414,154 | $ | 437,578 | ||||
Accretion interest receivable | 32,962 | 73,429 | ||||||
Allowance for doubtful accounts | (447,116 | ) | (414,154 | ) | ||||
Note receivable, bearing interest at prime plus 1%, due on demand | 249,000 | - | ||||||
First mortgage receivable, bearing interest at floating rate, due September 2010 | 27,025 | - | ||||||
276,025 | 96,853 | |||||||
Less: current portion | 27,025 | 96,853 | ||||||
$ | 249,000 | $ | - |
Effective December 28, 2007, the Company sold all of its investment interest in Distinctive Designs Furniture Inc. (“Distinctive”) to Distinctive’s other major shareholder. The proceeds from the sale of the shares was satisfied by a promissory note issued by the purchaser. The note, which is non-interest bearing, has been discounted and is repayable in ten equal consecutive annual instalments of $100,000, with the instalments due on January 15 of each year. The note is secured by the shares of Distinctive. This note is only due and payable in any given year if Distinctive continues its business. Over the past number of years, Distinctive incurred substantial operating losses. Distinctive continues to be impacted by a difficult retail environment as a result of competitive market conditions and the poor global economy and accordingly, management of the Company believe a reserve is appropriate.
Capital Stock
Capital stock transactions during the period are summarized as follows:
Common | Class A preference | |||||||||||||||
Number | Amount | Number | Amount | |||||||||||||
Balance at December 31, 2009 | 5,076,407 | $ | 2,688,939 | 315,544 | $ | 141,826 | ||||||||||
Shares redeemed by the Corporation | - | - | (315,544 | ) | (141,826 | ) | ||||||||||
Shares cancelled on amalgamation | (24 | ) | (46 | ) | - | - | ||||||||||
Shares issued on acquisition of net assets of Genterra | 5,290,860 | 16,983,661 | - | - | ||||||||||||
Transaction costs, net of future taxes | - | (104,803 | ) | - | - | |||||||||||
Shares purchased for cancellation from shareholders dissenting to the amalgamation | (875,274 | ) | (1,652,044 | ) | - | - | ||||||||||
Balance at June 30, 2010 | 9,491,969 | $ | 17,915,707 | - | $ | - |
Class A preference, Series 1 | Class B preference | |||||||||||||||
Number | Amount | Number | Amount | |||||||||||||
Balance at December 31, 2009 | - | $ | - | - | $ | - | ||||||||||
Shares issued on acquisition of net assets of Genterra | 326,000 | 4,983,439 | 26,274,918 | 1,313,746 | ||||||||||||
Shares purchased for cancellation from shareholders dissenting to the amalgamation | - | - | (2,912 | ) | (146 | ) | ||||||||||
Balance at June 30, 2010 | 326,000 | $ | 4,983,439 | 26,272,006 | $ | 1,313,600 |
As part of its ongoing management of capital, on February 19, 2010 the Company exercised its right to redeem all 315,544 of its issued and outstanding Class A preference shares.
Shareholders holding 656,341 common shares of CMI, 788,157 common shares of Genterra and 2,912 Class B preference shares of Genterra made a valid dissent to the amalgamation under Section 185 of the Ontario Business Corporations Act (“OBCA”). GCI made offers to these shareholders totaling $2,141,464, representing the amount considered by the directors of the Company to be the fair value thereof. These offers have been accepted by and paid to these dissenting shareholders. Accordingly, 875,274 common shares and 2,912 Class B shares of GCI have been cancelled. The Company disqualified certain shares from the dissent process in those cases where it determined that the dissent in respect of such shares was not registered and pursued in compliance with the requirements of Section 185 of the OBCA. The Company has filed a claim with the Superior Court of Justice and has, amongst other things, requested a declaration that the holder of certain of these shares is not a dissenting shareholder for the purposes of Section 185 of the OBCA and is not entitled to receive fair value for such shares.
GENTERRA CAPITAL INC.
(the corporation which continued from the amalgamation of Genterra Inc. and Consolidated Mercantile Incorporated)
NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Related Party Transactions
Significant related party transactions and outstanding balances not disclosed elsewhere in these consolidated financial statements are summarized as follows:
Accounts payable and accrued liabilities include $Nil (December 31, 2009 - $229,171) due to a company of which certain directors, officers and/or shareholders are also directors and officers of the Company.
Administration and management fees of $151,318 (2009 - $120,000) were paid to a company of which certain directors, officers and/or shareholder are also directors and officers of the Company.
Recent Accounting Pronouncements
In January 2009, the Canadian Institute of Chartered Accountants (“CICA”) issued new accounting standards, Handbook Section 1582 “Business Combinations”, Handbook Section 1602 “Non-Controlling Interests”, and Handbook Section 1601 “Consolidated Financial Statements”, which are based on the International Accounting Standards Board’s (“IASB”) International Financial Reporting Standard 3, “Business Combinations”. The new standards replace the existing guidance on business combinations and consolidated financial statements. The objective of the new standards is to harmonize Canadian accounting for business combinations with the international and U.S. accounting standards. The new standards are to be applied prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January 1, 2011, with earlier application permitted. Assets and liabilities that arose from business combinations whose acquisition dates preceded the application of the new standards shall not be adjusted upon application of these new standards. Section 1602 should be applied retrospectively except for certain items. The Company is currently assessing the impact of adopting these new standards may have on its results of operations, financial position and disclosures.
On April 29, 2009, the CICA amended Section 3855, “Financial Instruments – Recognition and Measurement”, adding/amending paragraphs regarding the application of effective interest method to previously impaired financial assets and embedded prepayment options. The amendments are effective for interim and annual financial statements relating to fiscal years beginning on or after January 1, 2011 with early adoption permitted. These amendments are not expected to have a significant impact on the Company’s accounting for its financial instruments.
Transition to International Financial Reporting Standards (“IFRS”)
In February 2008, the CICA announced that Canadian generally accepted accounting principles (“GAAP”) for publicly accountable enterprises will be replaced by International Financial Reporting Standards (“IFRS”) for fiscal years beginning on or after January 1, 2011. Companies will be required to provide IFRS comparative information for the previous fiscal year. Accordingly, the conversion from Canadian GAAP to IFRS will be applicable to the Company’s reporting for the first quarter of the year ending September 30, 2012 for which the current and comparative information will be prepared under IFRS.
The Company’s IFRS project consists of three phases – scoping, evaluation and design, and implementation and review. The Company has commenced the scoping phase of the project, which consists of project initiation and awareness, identification of high-level differences between Canadian GAAP and IFRS and project planning and resourcing. The Company has completed a high level scoping exercise and has prepared a preliminary comparison of financial statement areas that would be impacted by the conversion.
A detailed assessment of the impact of adopting IFRS on the Company’s consolidated financial statements, accounting policies, information technology and data systems, internal controls over financial reporting, disclosure controls and procedures, and the various covenants and capital requirements and business activities has not been completed. The impact on such elements will depend on the particular circumstances prevailing at the adoption date and the IFRS accounting policy choices made by the Company. The Company has not completed its quantification of the effects of adopting IFRS. The financial performance and financial position as disclosed in the Company’s GAAP consolidated financial statements may be significantly different when presented in accordance with IFRS Recent Accounting Pronouncements.