TITAN TRADING ANALYTICS INC.
CONSOLIDATED
FINANCIAL STATEMENTS
OCTOBER 31,1995
Collins
Barrow
Chartered Accountants
Suite 800
1030 West Georgia Street
Vancouver, Canada
V6E 3B9
AUDITORS' REPORT
To the Shareholders of
Titan Trading Analytics Inc.
We have audited the consolidated balance sheets of Titan Trading
Analytics Inc. as at October 31, 1995 and 1994 and the consolidated
statements of operations and deficit and changes in financial
position for the years then ended. These financial statements are
the responsibility of the company's management. Our responsibility
is to express an opinion on these financial statements based on our
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform an audit to obtain reasonable assurance whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation.
In our opinion, these consolidated financial statements present
fairly, in all material respects, the financial position of the
company as at October 31, 1995 and 1994 and the results of its
operations and changes in financial position for the years then
ended in accordance with generally accepted accounting principles,
As required by the Company Act (B.C.), we- report that, in our
opinion, these principles have been applied on a consistent basis.
/S/ Collins Barrow
CHARTERED ACCOUNTANTS
Vancouver, Canada
December 15, 1995
Founding Member of
Moores
Rowland
International
Represented in 60 Countries
TITAN TRADING ANALYTICS INC.
(Incorporated under the laws of British Columbia)
CONSOLIDATED BALANCE SHEET
OCTOBER 31,1995
ASSETS 1995 1994
Current assets
Cash and short-term investments $ 873,552 $ 80,757
Accounts receivable 12,681 2,641
Prepaid expenses (note 3) 39,285 --
--------- --------
925,518 83,398
Capital assets (note 4) 51,720 23,038
--------- --------
$ 977,238 $106,436
--------- --------
LIABILITIES
Current liabilities
Accounts payable and
accrued liabilities $ 22,798 $ 5,493
--------- --------
SHAREHOLDERS' EQUITY
Share subscriptions received
(note 5) $ 30,000 176,000
Share capital (note 5) 1,314,901 1
Deficit (390,461) (75,058)
--------- --------
954,440 100,943
$ 977,238 $ 106,436
--------- --------
Approved by the Directors
/S/ Michael Paauwe, Director
/S/ Michael Gossland, Director
See accompanying notes to the consolidated financial
statements.
TITAN TRADING ANALYTICS INC.
CONSOLIDATED STATEMENT OF OPERATIONS AND DEFICIT
FOR THE YEAR ENDED OCTOBER 31, 1995
1994
1995 (note 1)
Revenue
Software sales $ 11,165 $ --
Interest and other income 9,490 --
--------- ---------
20,655 --
--------- ---------
Expenses
Advertising 32,288 --
Amortization 11,104 4,065
Bank charges 768 --
Consulting fees 30,000 --
Management fees 34,160 11,778
Marketing and promotion 12,964 --
Office 12,735 3,359
Professional fees 12,587 5,564
Rent 5,715 3,550
Research and development (note 6) 161,442 43,376
Salaries and benefits 9,977 --
Telephone 8,434 1,151
Travel 8,884 2,215
--------- ---------
336,058 75,058
--------- ---------
Net loss for the period (315,403) (75,058)
Deficit, beginning of the period (75,058) --
--------- ---------
Deficit, end of the period $ (390,461) $(75,058)
--------- ---------
Net loss per share for the period $ (.78) $(75,058)
(note 8) --------- ---------
See accompanying notes to the consolidated financial
statements.
TITAN TRADING ANALYTICS INC.
CONSOLIDATED STATEMENT OF CHANGES IN FINANCIAL POSITION
FOR THE YEAR ENDED OCTOBER 31,1995
1994
1995 (note 1)
Cash from operating activities
Net loss for the period $ (315,403) $ (75,058)
Item not involving cash
Amortization 11,104 4,065
--------- ---------
(304,299) (70,993)
Net change in non-cash working
capital balances (32,020) 2,852
--------- ---------
(336,319) (68,141)
--------- ---------
Cash used in investing activities
Acquisition of capital assets (39,786) (27,103)
--------- ---------
Cash from financing activities
Share subscriptions received and
issuance of Common shares 1,168,900 176,001
--------- ---------
Increase in cash during the period 792,795 80,757
Cash and short-term investments,
beginning of the period 80,757 --
Cash and short-term investments,
end of the period $ 873,552 $ 80,757
--------- ---------
See accompanying notes to the consolidated financial
statements.
TITAN TRADING ANALYTICS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31,1995
1. General information
The company was incorporated on November 30, 1993 as KBK No. 24
Ventures Ltd. and changed its name to Titan Trading Analytics Inc.
on November 14, 1994. The company commenced operations in May 1994
and accordingly the comparative figures are for the period from May
1994 to October 31, 1994.
The company develops and markets financial software systems.
2. Significant accounting policies
a) Consolidation - The financial statements include the
accounts of the company and of its wholly-owned inactive
subsidiary, Titan Trading Corp.
b) Capital assets - Capital assets are recorded at coot and
amortized at the following annual rates:
Computer equipment - 30% declining balance
Furniture and equipment - 20% declining balance
Copyrights and trademarks - 20% Straight line
c) Research and development - Research costs are expensed when
incurred. Development costs are expensed when incurred unless a
commercial product is developed for which adequate resources exist
to market the product.
d) Foreign currency translation - Foreign currency transactions
are translated using the temporal method, whereby:
i) monetary items are translated at the rate of exchange in
effect at the balance sheet date;
ii) non-monetary items are translated at historical exchange
rates; and
iii) revenue and expense items are translated at the average
rate of exchange for the year.
3. Prepaid expenses
Prepaid expenses includes prepaid royalties of $10,000 paid
pursuant to an agreement entered into by the company during the
year.
TITAN TRADING ANALYTICS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31,1995
4. Capital assets
1995
---------------------------------------
Accumulated
Cost Amortization Net
---------- ------------ ----------
Computer equipment $ 52,643 $ 14,345 $ 38,298
Furniture and equipment 4,246 824 3,422
Copyrights and trademarks 10,000 -- 10,000
---------- ------------ ----------
$ 66,889 $ 15,169 $ 51,720
---------- ------------ ----------
1994
---------------------------------------
Accumulated
Cost Amortization Net
---------- ------------ ----------
Computer equipment $ 25,289 $ 3,793 $ 21,496
Furniture and equipment 1,814 272 1,542
---------- ------------ ----------
$ 27,103 $ 4,065 $ 23,038
---------- ------------ ----------
5. Share capital
1995 1994
---- ----
Authorized
100,000,000 Common shares,
without par value Issued
4,114,001 (1994 - 1) Common shares $ 1,314,901 $ 1
----------- -------
During the year the company changed its authorized share capital
from 10,000 Common shares without par value.
During the year the company issued the following Common shame for
cash.
Number of Common Shares Consideration
----------------------- -------------
2,600,000 $ 650,000
614,000 214,900
900,000 450,000
--------- -----------
4,114,000 $ 1,314,900
--------- -----------
During the year the company received share subscriptions for, and
allotted, 3,000,000 Common shares at $.01 per share which, when
issued, will be held in escrow with their release being subject to
regulatory approval, At October 31, 1995 the shares had not been
issued.
Subsequent to October 31, 1995 the company issued 52,000 Common
shares for $13,000 pursuant to a share subscription received during
the year.
In 1994 the company received share subscriptions for 704,000 Common
shares at $.25 per share and during 1995 the shares were issued.
See note 10.
TITAN TRADING ANALYTICS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 1995
6. Research and development
1995 1994
---- ----
Computer services and software $ 10,709 $ 6,268
Contract services 115,000 32,500
Other 26,133 4,608
Product research 6,100 --
Rent 3,500 --
--------- --------
$ 161,442 $ 43,376
--------- --------
7. Income taxes
The financial statements do not reflect the potential tax
reductions which may be available through the application of losses
of $379,000 carried forward against future years' earnings
otherwise subject to income taxes.
The losses expire as follows:
2001 $ 65,000
2002 314,000
---------
$ 379,000
---------
8. Loss per share
The loss per share is calculated on the basis of the weighted
average number of shares outstanding during the year of 405,764
(1994 - 1). At October 31, 1995 there were 4,114,001 shares
outstanding (1994 - 1). See note 5.
9. Related party transactions
Included in the statement of operations and deficit am the
following transactions with related individuals.
1995 1994
---- ----
Expenses
Consulting fees $ 30,000 $ --
Management fees $ 32,600 $ 7,500
Office $ 2,300 $ --
Rent $ 4,200 $ 1,750
Research and development $ 57,500 $22,500
At October 31, 1995 $6,427 (1994 - $1,750) due to related
individuals is included in accounts payable and accrued
liabilities.
During the year the company purchased copyrights, trademarks, and
other rights under an agreement for $20,000 from a related
individual.
During 1994 the company purchased a capitol asset for $2,400 from a
related individual.
TITAN TRADING ANALYTICS INC.
NOTES TO THE CONSOLIDATED FINANCIAL SIATEMENTS
OCTOBER 31, 1995
10. Subsequent events
Subsequent to October 31, 1995 the company continued to take steps
in connection with its plan to file a preliminary prospectus in
British Columbia and Alberta for the purpose of completing an
initial public offering of the company's Common shares.
See note 5.