SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
(Amendment #1)
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
February 9, 1995
- --------------------------------------------------------------------------------
Date of Report (Date of earliest event reported)
HANDLEMAN COMPANY
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Michigan 1-7923 38-1242806
- -------------------------------------- ------------ ------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
500 Kirts Boulevard, Troy, Michigan 48084
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (810) 362-4400
-----------------------------
Not Applicable
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
Page 1 of 53 Pages
Exhibit Index is on Page 19
FORM 8-K
Item 7. Financial Statements and Exhibits.
- ------------------------------------------
(a) Financial Statements.
-------------------------
Financial Statements of Madacy Music Group, Inc.
Pages
Report of Independent Accountants 3
Consolidated Financial Statements:
Balance Sheet 4
Statement of Income 5
Statement of Changes in Stockholder's Equity 6
Statement of Cash Flows 7
Notes to Financial Statements 8-12
Page 2 of 53 Pages
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
Madacy Music Group, Inc.:
We have audited the accompanying consolidated balance sheet of Madacy Music
Group, Inc. as of December 31, 1994 and the related consolidated statements of
income, changes in stockholder's equity, and cash flows for the year then ended.
These consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the consolidated financial statements.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall consolidated
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Madacy
Music Group, Inc. as of December 31, 1994 and the consolidated results of their
operations and their cash flows for the year then ended, in accordance with
generally accepted accounting principles.
Detroit, Michigan
March 15, 1995
Page 3 of 53 Pages
MADACY MUSIC GROUP, INC.
CONSOLIDATED BALANCE SHEET
December 31, 1994
ASSETS
Current assets:
Cash and cash equivalents $ 355,748
Accounts receivable (Notes 4 & 5) 12,672,690
Inventories (Notes 4 & 5) 6,875,023
Prepaid expenses 80,191
-----------
Total current assets 19,983,652
Equipment and improvements, net (Note 3) 463,109
Licenses, net of accumulated amortization of $414,865 939,945
Goodwill, net of accumulated amortization of $98,473 1,275,308
-----------
Total assets $22,662,014
===========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Notes payable (Note 4) $ 2,104,981
Accounts payable 7,092,393
Income taxes payable 729,458
Customer deposits, current portion (Note 7) 2,608,912
Long-term debt, current portion 980,937
-----------
Total current liabilities 13,516,681
Customer deposits (Note 7) 1,956,684
Long-term debt, less current portion 849,912
-----------
Total liabilities 16,323,277
-----------
Commitments
Stockholder's equity:
Common stock (Note 9) 121
Paid-in capital 2,236,530
Foreign currency translation adjustment (332,896)
Retained earnings 4,434,982
-----------
Total stockholder's equity 6,338,737
-----------
Total liabilities and stockholder's equity $22,662,014
===========
The accompanying notes are an integral part of the consolidated financial
statements.
Page 4 of 53 Pages
MADACY MUSIC GROUP, INC.
CONSOLIDATED STATEMENT OF INCOME
for the year ended December 31, 1994
Net sales $41,262,301
Cost of sales 23,616,718
-----------
Gross profit 17,645,583
Selling, general and administrative expenses 8,689,333
Interest expense 700,495
Other income, net 84,230
-----------
Net income before income taxes 8,171,525
Provision for income taxes 3,246,654
-----------
Net income $ 4,924,871
===========
The accompanying notes are an integral part of the consolidated financial
statements.
Page 5 of 53 Pages
MADACY MUSIC GROUP, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
for the year ended December 31, 1994
FOREIGN
ADDITIONAL CURRENCY TOTAL
COMMON PAID-IN TRANSLATION RETAINED STOCKHOLDER'S
STOCK CAPITAL ADJUSTMENT EARNINGS EQUITY
------ ---------- ----------- -------- -------------
Balance, January 1, 1994 $121 $2,236,530 $ (3,118) $ 1,931,123 $4,164,656
Foreign currency translation (329,778) (329,778)
Net income 4,924,871 4,924,871
Dividends paid (2,421,012) (2,421,012)
---- ---------- ---------- ----------- ----------
Balance, December 31, 1994 $121 $2,236,530 $ (332,896) $ 4,434,982 $6,338,737
==== ========== ========== =========== ==========
The accompanying notes are an integral part of the consolidated financial
statements.
Page 6 of 53 Pages
MADACY MUSIC GROUP, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended December 31, 1994
Cash flows from operating activities:
Net income $ 4,924,871
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 398,914
Changes in operating assets and liabilities:
Accounts receivable (497,911)
Inventories (2,270,853)
Prepaid expenses and deposits 73,942
Accounts payable 2,640,627
Income taxes payable (617,433)
-----------
Net cash provided by operating activities 4,652,157
-----------
Cash flows from investing activities:
Acquisition of equipment and improvements (369,327)
Acquisition of licenses (647,850)
Acquisition of Mediaphon, net of cash acquired (1,029,575)
-----------
Net cash used in investing activities (2,046,752)
-----------
Cash flows from financing activities:
Net repayments of customer deposits (2,705,416)
Net proceeds of long-term debt 705,236
Other changes in stockholder's equity (329,778)
Proceeds from notes payable 2,104,981
Dividends paid (2,421,012)
-----------
Net cash used in financing activities (2,645,989)
-----------
Net decrease in cash and cash equivalents (40,584)
Cash and cash equivalents, beginning of year 396,332
-----------
Cash and cash equivalents, end of year $ 355,748
===========
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest $ 695,041
===========
Income taxes $ 3,792,859
===========
The accompanying notes are an integral part of the consolidated financial
statements.
Page 7 of 53 Pages
MADACY MUSIC GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
a. BUSINESS: Madacy Music Group, Inc. (the "Company"), based in Quebec,
operates principally in one business segment, selling prerecorded music
and video products primarily to mass merchants, and also to specialty
chain stores, drug stores and supermarkets. Approximately 87 percent of
the Company's sales in 1994 were to customers in the United States.
b. PRINCIPLES OF CONSOLIDATION: The consolidated financial statements
include the accounts of the Company and its majority owned subsidiaries.
All material intercompany accounts and transactions have been eliminated.
c. CASH AND CASH EQUIVALENTS: The Company considers all highly liquid
investments with an original maturity of three months or less to be cash
equivalents.
d. INVENTORIES: Inventories are valued at the lower of cost or market. Cost
is determined on a first-in, first-out basis.
e. EQUIPMENT AND IMPROVEMENTS: Equipment and furniture and fixtures are
recorded at cost less accumulated depreciation. The Company provides for
depreciation of equipment, furniture and fixtures and assets under capital
leases using the following methods and annual rates:
METHOD RATE
----------------- ----
Equipment Declining balance 20%
Furniture and fixtures Declining balance 20
Computer equipment Declining balance 30
Leasehold improvements Straight-line 20
Machinery and equipment under capital leases Declining balance 20
Computer equipment under capital leases Declining balance 30
f. LICENSES: Licenses consist of fees paid for the right to use master
recordings. Licenses are recorded at cost and amortized over the term of
the licenses but not exceeding the useful life of the recording.
Amortization expense for 1994 was $216,907.
g. GOODWILL: Goodwill is carried at cost less related accumulated
amortization. Amortization is calculated using the straight-line method
over 15 years. Amortization expense for 1994 was $82,424.
h. FOREIGN CURRENCY TRANSLATION: The Company uses the Canadian dollar as its
functional currency. The Company follows the provisions of Statement of
Financial Accounting Standards No. 52, "Foreign Currency Translation," to
convert the balance sheet and operations to United States dollars.
Page 8 of 53 Pages
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:
i. RECOGNITION OF REVENUE AND FUTURE RETURNS: Revenues are recognized upon
shipment of merchandise. The Company reduces gross sales and cost of
sales for expected returns at the time the merchandise is sold.
j. INCOME TAXES: The Company employs the method required by Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes."
Under this method, deferred taxes arise from differences between financial
reporting and tax reporting.
2. ACQUISITION:
In 1994, Madacy Europa Inc., a wholly owned subsidiary, acquired all of the
issued and outstanding shares of Mediaphon Musik Produktin and Verlag GmbH
("Mediaphon"), a foreign corporation, for a total cash consideration of
U. S. $1 million and DM 325,560.72. The Company has guaranteed debts of
Mediaphon for an amount of $350,000. The operating results of Mediaphon were
not material to the Company's consolidated results.
3. EQUIPMENT AND IMPROVEMENTS:
Equipment and improvements consist of the following:
Equipment $104,909
Furniture and fixtures 75,144
Computer equipment 199,373
Leasehold improvements 310,863
Machinery and equipment under capital leases 19,830
Computer equipment under capital leases 47,256
--------
757,375
Less accumulated depreciation and amortization 294,266
--------
$463,109
========
Depreciation and amortization expense for 1994 amounted to $99,583.
Page 9 of 53 Pages
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
4. NOTES PAYABLE:
The Company has a Cdn $6,000,000 line of credit available, bearing interest
at the prime rate (8.5 percent at December 31, 1994) plus 1/4 percent, to
fund working capital needs. The line of credit is collateralized by the
Company's inventory and accounts receivable and a second mortgage on all the
assets of the Company. The amount outstanding at December 31, 1994 was U.S.
$1,906,501. The weighted average interest rate on this line of credit was
7.34 percent during 1994.
The Company also has a DM 400,000 line of credit available, bearing interest
at 7.25 percent, to fund working capital needs of its German operations and
is collateralized by a letter of credit. The amount outstanding at
December 31, 1994 was $198,480.
5. LONG-TERM DEBT:
Long-term debt is comprised of the following:
Bank term loan, bearing interest at prime plus .75 percent, payable in monthly
installments of $40,277 in principal plus interest until the loan is repaid in full $1,006,953
Bank term loan, bearing interest at prime plus .75 percent, payable in monthly
installments of $7,692 in principal plus interest until the loan is repaid in full 184,615
Bank term loan, bearing interest at prime plus .75 percent, payable in monthly
installments of Cdn $41,667 in principal plus interest, with a final payment due in 1996 536,363
Federal Business Development Bank ("FBDB") loan, bearing interest at 10.7 percent, payable
in monthly installments of Cdn $4,000 in principal plus interest, with a final
payment due in 1997 79,897
Obligations under capital leases (Note 6) 23,021
----------
1,830,849
Less current portion 980,937
----------
$ 849,912
==========
The bank loans are collateralized by accounts receivable and inventories and a
second mortgage on all assets of the Company in the amount of Cdn $6,000,000.
The FBDB loan is collateralized by specific assets now owned and to be acquired,
a $500,000 first mortgage bond collateralized by a trust deed, a mortgage on all
other assets and a personal guarantee from the ultimate stockholder for the full
amount of the loan.
Page 10 of 53 Pages
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
5. LONG-TERM DEBT, CONTINUED:
Scheduled maturities of long-term debt are as follows: 1995 - $966,398;
1996 - $790,533, and 1997 - $50,897.
6. OBLIGATIONS UNDER CAPITAL AND OPERATING LEASES:
The following is a schedule of future minimum lease payments under capital
leases:
1995 $17,851
1996 10,414
-------
Total minimum lease payments 28,265
Less amount representing interest at 18.6 percent 5,244
-------
Present value of minimum lease payments 23,021
Less current portion 14,539
-------
$ 8,482
=======
The Company leases two facilities under operating lease agreements which
expire on June 30, 1995 and February 28, 1998. Future minimum lease payments
required under these operating leases are as follows: 1995 - Cdn $217,817;
1996 - Cdn $199,794; 1997 - Cdn $199,794, and 1998 - Cdn $33,298.
7. CUSTOMER DEPOSITS:
During 1993, the Company entered into a product distribution agreement with a
major customer, Handleman Company. With the execution of the agreement, the
customer provided a prepayment to the Company against future purchases. The
Company will in turn provide monthly credits of U. S. $177,778 and Cdn
$55,556 against purchases by the customer over the period remaining in the
agreement. The deposits will be applied as follows:
Customer deposits $4,565,596
Less current portion 2,608,912
----------
$1,956,684
==========
Page 11 of 53 Pages
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
8. INCOME TAXES:
Deferred taxes are determined based on the difference between the financial
statement and tax bases of assets and liabilities using enacted tax rates in
effect in the years in which the differences are expected to reverse. The
Company's deferred taxes are immaterial because there were no significant
differences between the financial statement bases and tax bases of the
Company's assets and liabilities.
9. COMMON STOCK:
Common stock consists of the following:
Authorized:
Class A, voting common stock, no par value
Class B, nonvoting common stock
Class C preferred stock, voting, redeemable at the paid-in value, noncumulative preferred
dividend, nonparticipating
Class D preferred stock, nonvoting, redeemable at the paid-in value, noncumulative
preferred dividend, nonparticipating
Class E preferred stock, voting, redeemable at the paid-in value, noncumulative
preferred dividend, nonparticipating
Class F preferred stock, nonvoting, redeemable at the paid-in value, noncumulative
preferred dividend, nonparticipating
Class G preferred stock, nonvoting, redeemable at $1 per share, noncumulative
preferred dividend, nonparticipating
Issued:
100 Class A common stock, no par value $121
=====
10. COMMITMENTS:
The Company has entered into several forward exchange contracts to sell a
total of U. S. $19,000,000 at prices ranging from Cdn $1.3415 to Cdn $1.4108
maturing during 1995. The unrealized loss of approximately U. S. $382,000
at December 31, 1994 has been recorded in the accompanying consolidated
statement of income.
11. SUBSEQUENT EVENT:
Effective January 1, 1995, the Company's parent corporation, Amos
Entertainment, Inc., sold an 80 percent interest in Madacy Music Group, Inc.
to Handleman Company for approximately $23 million.
Page 12 of 53 Pages
(b) Pro Forma Financial Information.
-------------------------------------
Pro Forma Consolidated Income
Pages
Handleman Company and Madacy Music Group Pro Forma Consolidated
Income Statement for the year ended April 30, 1994 14
Handleman Company and Madacy Music Group Pro Forma Consolidated
Income Statement for the nine months ended January 31, 1995 15
Notes to the Pro Forma Consolidated Income Statements 16-17
Page 13 of 53 Pages
HANDLEMAN COMPANY
PRO FORMA CONSOLIDATED INCOME STATEMENT (UNAUDITED)
YEAR ENDED APRIL 30, 1994
(stated in U. S. dollars)
Madacy Handleman Proforma
Year Ended Year Ended Pro Forma Handleman
April 30, 1994 April 30, 1994 Adjustments and Madacy
-------------- -------------- ---------------- -------------
Net sales $35,572,408 $1,066,566,000 ($10,170,852 (d) $1,091,967,556
Direct product costs 20,720,509 818,517,000 (10,170,852)(d) 829,066,657
----------- -------------- ------------ --------------
Gross profit 14,851,899 248,049,000 0 262,900,899
Selling, general and administrative
expenses 7,488,051 186,161,000 0 193,649,051
Provision for facility realignment 0 2,000,000 0 2,000,000
Amortization of acquisition costs 0 7,536,000 1,239,873 (b) 8,775,873
Interest expense, net 552,496 6,211,000 1,177,987 (c) 7,941,483
----------- -------------- ------------ -------------
Income before income taxes
and minority interest 6,811,352 46,141,000 (2,417,860) 50,534,492
Income taxes 2,555,846 18,485,000 (969,562) 20,071,284
Minority interest 0 0 (851,101) (e) (851,101)
----------- -------------- ------------ -------------
Net income $4,255,506 $27,656,000 ($2,299,399) $29,612,107
=========== ============== ============ =============
Earnings per average common share
outstanding during the period $0.83 $0.89
Average number of shares outstanding
during the period 33,389,000 33,389,000
See notes to the pro forma consolidated income statement for a description of the assumptions and adjustments.
Page 14 of 53 Pages
HANDLEMAN COMPANY
PRO FORMA CONSOLIDATED INCOME STATEMENT (UNAUDITED)
FOR THE NINE MONTHS ENDED JANUARY 31,1995
(stated in U. S. dollars)
Handleman
Madacy Nine Months Proforma
May 1, 1994 - Ended Pro Forma Handleman
Dec 31, 1994 Jan 31, 1995 Adjustments and Madacy
------------- ------------ ---------------- ------------
Net sales $29,624,812 $922,535,000 ($5,910,193) (d) $946,249,619
Direct product costs 16,931,583 709,200,000 (5,910,193) (d) 720,221,390
----------- ------------ ----------- ------------
Gross profit 12,693,229 213,335,000 0 226,028,229
Selling, general and administrative
expenses 6,243,104 157,973,000 0 164,216,104
Amortization of acquisition costs 75,625 4,956,000 826,582 (b) 5,858,207
Interest expense, net 539,709 4,838,000 1,000,904 (c) 6,378,613
---------- ------------ ------------ ------------
Income before income taxes
and minority interest 5,834,791 45,568,000 (1,827,486) 49,575,305
Income taxes 2,389,445 18,091,000 (725,512) 19,754,933
Minority interest 0 0 (689,069) (e) (689,069)
---------- ------------ ------------ ------------
Net income $3,445,346 $27,477,000 ($1,791,043) $29,131,303
=========== ============ =========== ============
Earnings per average common share
outstanding during the period $0.82 $0.87
Average number of shares outstanding
during the period 33,512,000 33,512,000
See notes to the pro forma consolidated income statement for a description of the assumptions and adjustments.
Page 15 of 53 Pages
Handleman Company
Notes to Pro Forma Consolidated Income Statements
(Unaudited)
Two majority-owned subsidiaries of Handleman Company ("Handleman"), a Michigan
corporation, purchased certain assets of Madacy Music Group, Inc. ("Madacy"), a
Canadian corporation. In accordance with the terms and conditions of an Asset
Purchase Agreement dated as of January 1, 1995, Madacy Music Group, Inc.
("Madacy US"), a Michigan corporation, acquired the assets of Madacy used in its
business of licensing, duplicating, marketing, packaging and supplying music and
video products outside of Canada. In accordance with the terms and conditions
of an Asset Contribution Agreement dated as of January 1, 1995, 3100448 Canada
Inc. ("Madacy Canada"), a Canadian corporation, acquired the assets of Madacy
used in its business of licensing, duplicating, marketing, packaging and
supplying music and video products within Canada. The assets acquired by Madacy
US and Madacy Canada include machinery, equipment, tools, supplies, inventory,
packaging, accounts receivable, certain license and distribution rights,
purchase orders, customer commitments and goodwill. Madacy US and Madacy Canada
will use the assets acquired to conduct the businesses previously conducted by
Madacy.
Presented are pro forma consolidated income statements for the fiscal year ended
April 30, 1994 (May 2, 1993 - April 30, 1994) and for the nine months ended
January 31, 1995 (May 1, 1994 - January 31, 1995). The pro forma statements
combine Handleman with Madacy U.S. and Madacy Canada as if the acquisition had
taken place May 1, 1993.
The purchase of assets from Madacy was effective January 1, 1995 and the results
of operations for Madacy U.S. and Madacy Canada for the period of January 1-31,
1995 are included in Handleman's third quarter and nine month results filed on
March 17, 1995 with the Securities and Exchange Commission in Form 10-Q.
Therefore, in presenting the pro forma consolidated income statement for the
nine months ended January 31, 1995, the Madacy financial results for the eight
months ended December 31, 1994 are added.
The following pro forma adjustments are based on available information and
certain estimates and assumptions. Handleman believes that such assumptions
provide a reasonable basis for presenting all of the significant effects of this
acquisition. Further, Handleman believes that the pro forma adjustments give
appropriate effect to those assumptions and that they are properly applied in
the pro forma consolidated income statements.
Below is a list of the assumptions and adjustments used in preparing the pro
forma consolidated income statements:
(a) The exchange rates used to convert Canadian dollars into U.S. dollars:
(i) the average rate for the year ended April 30, 1994 was used to
convert the income statement for this period. This average rate
was Canadian $1 = U.S. $.7554.
(ii) the average rate for the eight months ended December 31, 1994 was
used to convert the income statement for this period. This
average rate was Canadian $1 = U.S. $.7296.
(iii) the rate at May 1, 1993 was used to convert the purchase price
and goodwill. This rate was Canadian $1 = U.S. $.7878.
Page 16 of 53 Pages
-2-
(b) For pro forma purposes, the acquisition was assumed to have taken place
May 1, 1993. Goodwill resulting from the acquisition was assumed to be
the same Canadian dollar amount whether the acquisition had taken place
on May 1, 1993 or January 1, 1995. However, the total purchase price
assumed as of May 1, 1993 was slightly lower due to a lower level of
net assets acquired. Amortization of goodwill was computed using the
straight line method over fifteen years.
(c) Handleman's acquisition of Madacy was financed using amounts available
under its revolving credit arrangements. In the pro forma consolidated
income statements presented, interest expense on the purchase price was
based on the following:
(i) For the year ended April 1994, Handleman's weighted average
interest rate for the same period was used.
(ii) For the nine months ended January 31, 1995, Handleman's weighted
average interest rate for the same period was used.
(d) For the pro forma periods presented, Madacy was a supplier to
Handleman. Madacy sales to Handleman, and the related cost of sales,
were eliminated in the pro forma consolidated income statements
presented.
(e) The pro forma consolidated income statements reflect the minority
shareholder's interest.
The pro forma consolidated income statements are not necessarily indicative of
what actual results would have been had the acquisition occurred on May 1, 1993.
In addition, the pro forma consolidated income statements should not be
interpreted as an indication of future operating results.
Page 17 of 53 Pages
(c) Exhibits.
--------------
2.1 Asset Purchase Agreement, dated as of January 1, 1995, between
Madacy Music Group, Inc., a Canadian corporation, and Madacy Music Group, Inc.,
a Michigan corporation.
2.2 Asset Contribution Agreement, dated as of January 1, 1995,
between Madacy Music Group, Inc., a Canadian corporation, and 3100448 Canada
Inc., a Canadian corporation.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this Amendment No. 1 to Report to be
signed on its behalf by the undersigned hereunto duly authorized.
HANDLEMAN COMPANY
By:_________________________________________
Stephen Strome
President and Chief Executive Officer
Dated: April 25, 1995
Page 18 of 53 Pages
INDEX TO EXHIBITS
-----------------
Exhibit
Number Exhibit Page No.
- ------- ------- --------
2.1 Asset Purchase Agreement, dated as of January 1, 1995,
between Madacy Music Group, Inc., a Canadian corporation,
and Madacy Music Group, Inc., a Michigan corporation 20
2.2 Asset Contribution Agreement, dated as of January 1, 1995,
between Madacy Music Group, Inc., a Canadian corporation,
and 3100448 Canada Inc., a Canadian corporation 38
Page 19 of 53 Pages