The NRG Group Inc. Reports Second Quarter Results.Business Editors TORONTO--(BUSINESS WIRE)--Aug. 24, 2001 The NRG NRG Energy NRG NRG Energy, Inc. NRG Natural Resources Group NRG New Radiancy Group NRG Network Referral Group NRG Network Resource Grapher NRG Numerics Rapporteur Group NRG Neuroprosthetics Research Group NRG notional requirements generator Group Inc. ("NRG") (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :NRG), a venture capital company, today reported financial results for the second quarter ended June June: see month. 30, 2001. NRG ended the quarter with $2.5 million in cash and $8.5 million in stock of publicly traded companies publicly traded company A company whose shares of common stock are held by the public and are available for purchase by investors. The shares of publicly traded firms are bought and sold on the organized exchanges or in the over-the-counter market. . The net book value of NRG at June 30, 2001 was $15.7 million or $0.55 per share. Publicly traded investments of $8.5 million are based on quoted market prices less a liquidity discount. NRG reported revenues for the three months ended June 30, 2001 of $98,000 compared to $144,000 for the second quarter last year. These revenues were primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to interest income. NRG reported net income for the three months ended June 30, 2001 of $2.8 million compared to a net loss of $20.8 million for the same period last year. The loss before realized and unrealized gain Unrealized Gain A profit that results from holding on to an asset rather than cashing it in and using the funds. Notes: Let's say you own a stock that has doubled, but you haven't sold it yet. This is said to be an unrealized gain. (loss) on investments, income taxes and goodwill charges amount to $893,000. Of this amount, $534,000 related directly to restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). costs and approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $200,000 related to operational costs not anticipated to be incurred in future quarters. The realized loss Realized Loss A loss recognized when assets are sold for a price lower than the original purchase price. Notes: A portion of the realized loss may be applied against a capital gain or realized profit to reduce taxes. on investments for the second quarter was $16.1 million compared to $4.3 million for the second quarter ended June 30, 2000. Of this loss, $16 million had been previously recognized. The sale of Charity.ca for a nominal Trifling, token, or slight; not real or substantial; in name only. Nominal capital, for example, refers to extremely small or negligible funds, the use of which in a particular business is incidental. NOMINAL. Relating to a name. amount, the sale of Chinadotcom, and the cessation cessation Vox populi The stopping of a thing. See Smoking cessation. of operations by Sportslink resulted in this loss. The cash invested in these companies amounted to $2.2 million. The remaining $13.9 million was not a cash loss but relates to fair value increments resulting from the business merger of 2FundEcom and NRG in March of 2000. NRG continued to refocus Verb 1. refocus - focus once again; The physicist refocused the light beam" focus - cause to converge on or toward a central point; "Focus the light on this image" 2. the future course of operations during the second quarter and has broadened its investment mandate A judicial command, order, or precept, written or oral, from a court; a direction that a court has the authority to give and an individual is bound to obey. A mandate might be issued upon the decision of an appeal, which directs that a particular action be taken, or upon a to include companies that are not primarily technology companies. NRG has reviewed many business opportunities ranging from processes solving environmental concerns to internet based service providers. NRG has also considered investments other than equity such as higher yielding debt and convertible instruments. Operationally, Aubrey Au·brey , John 1626-1697. English antiquarian and writer whose Brief Lives, published posthumously, contains character sketches of his notable friends, including Thomas Hobbes, John Milton, and Francis Bacon. Baillie Bail´lie n. 1. Bailiff. 2. Same as Bailie. , Robert Robert, Henry Martyn 1837-1923. American army engineer and parliamentary authority. He designed the defenses for Washington, D.C., during the Civil War and later wrote Robert's Rules of Order (1876). Noun 1. McLeish and Peter Wallace For the rugby league player, see Peter Wallace (rugby league) Peter Marsden Wallace (b. August 15, 1954 in Parkersburg, West Virginia) is executive producer and host of the Day1 ecumenical radio and internet ministry [1] and vice president, production of the Alliance for continue their roles as Co-Chief Executive Officers. With nearly all restructuring activities completed in the second quarter, Anthony Messina Messina (mās-sē`nä), city (1991 pop. 231,693), capital of Messina prov., NE Sicily, Italy, on the Strait of Messina, opposite the Italian mainland. It is a busy seaport and a commercial and light industrial center. , Chief Financial Officer, and Mike Svetkoff, Corporate Controller, focused on our core business of monitoring current investments and evaluating new investment opportunities. Management believes future operating costs operating costs npl → gastos mpl operacionales will average $175,000 per quarter. MedcomSoft MedcomSoft TSX: MSF is a leading developer of interoperable software tools for the ambulatory care environment. Its flagship product, MedcomSoft Record 2006, is a comprehensive, integrated software suite that enables physicians to automate the majority of tasks required to Inc. (www.medcomsoft.com) is a health care efficiency company specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. in the development of intelligent data entry systems and clinical applications to meet the challenges of connectivity A generic term for connecting devices to each other in order to transfer data back and forth. It often refers to network connections, which embraces bridges, routers, switches and gateways as well as backbone networks. and managed care. MedcomSoft applications are designed to simplify business workflow The automatic routing of documents to the users responsible for working on them. Workflow is concerned with providing the information required to support each step of the business cycle. , improve the delivery and quality of patient care and decrease costs throughout the health care industry. Recently, Medcomsoft has concluded an agreement with The Independent Physician Association's Association of America America [for Amerigo Vespucci], the lands of the Western Hemisphere—North America, Central (or Middle) America, and South America. The world map published in 1507 by Martin Waldseemüller is the first known cartographic use of the name. ("TIPAAA TIPAAA The IPA (Independent/Integrated Physician Association) Association of America "), the leading U.S. independent physicians association with 817 Independent Physician Association members representing over 339,000 physicians in 39 states. TIPAAA will endorse To sign a paper or document, thereby making it possible for the rights represented therein to pass to another individual. Also spelled indorse. endorse (indorse) v. , promote, advertise, market and provide Medcomsoft's advanced software solutions to its members and to other members of the health care industry in the United States of America UNITED STATES OF AMERICA. The name of this country. The United States, now thirty-one in number, are Alabama, Arkansas, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Hampshire, . MedcomSoft has also signed an agreement with Trizetto Group of California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). which is a leading U.S. health care ASP asp, popular name for several species of viper, one of which, the European asp (Vipera aspis), is native to S Europe. It is also a name for the Egyptian cobra (Naja haja). provider expanding the distribution and market penetration Noun 1. market penetration - the extent to which a product is recognized and bought by customers in a particular market penetration - the act of entering into or through something; "the penetration of upper management by women" of MedcomSoft in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . StreetViews Inc., a private company, operates fundlibrary.com, an online mutual fund information centre and soon-to-be-launched streetviews.com, an online investment research aggregation resource. The company is positioned to become Canada's leading and most comprehensive provider of Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. investment dealer research and professional analysts' insights, offering a dynamic and searchable online financial investment information centre that will be delivered free of charge to investors, financial advisors, investment professionals and institutional money managers. The company is currently in discussions with numerous media and financial based companies interested in acquiring, financing or investing in Streetviews Inc. and its subsidiary fundlibrary.com. NRG advanced a total of $350,000 to Streetviews Inc. during the second quarter and a further $900,000 subsequent to the quarter. Youthography, (youthography.com) a leading youth-driven marketing consultancy aimed at providing fast, accurate strategic answers, products or projects for any organization targeting the 13-29 year old demographic See demographics. . During the past quarter, Youthography continued their work with clients such as Bell Mobility, Ford of Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of and Kellogg Canada Inc. NRG has signed a letter of intent to provide Just White Shirts and Black Socks
The Black Socks (or Black Sox) are the New Zealand national men's softball team. Inc. ("JWS JWS Jackson-Weiss Syndrome JWS Joint Warfighting Space (DOD warfighter concept integrating responsive space assets to battle theater) JWS Joint Work Statement JWS Java Web Service JWS Java Web Start JWS Java Workshop JWS Java Web Server ") a total of $1.26 million in equity financing Equity Financing The act of raising money for company activities by selling common or preferred stock to individual or institutional investors. In return for the money paid, shareholders receive ownership interests in the corporation. . Subsequent to the quarter end, NRG advanced $600,000, in the form of an interest bearing, secured promissory note promissory note, unconditional written promise to pay a certain sum of money at a definite time to bearer or to a specified person on his order. Promissory notes are generally used as evidence of debt. in anticipation The performance of an act or obligation before it is legally due. In patent law, the publication of the existence of an invention that has already been patented or has a patent pending, of the equity financing noted above. JWS is an on-line, catalogue and recently bricks and mortar A store (shop, supermarket, department store, etc.) in the real world. Contrast with clicks and mortar. retailer of men's and women's business and casual wear. Virtually all of JWS's business to date has been from catalogue and on-line distribution. JWS recently opened a retail location in North Toronto North Toronto is the northern section of the old, pre-amalgamation City of Toronto, Ontario, Canada. It occupies a geographically central location within the current "megacity" boundaries. in order to complement their previous distribution channels and plans to continue the expansion of its bricks and mortar retail channel in major cities across North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . JWS is currently looking to open a retail location in Toronto's financial district. During the quarter NRG purchased for cancellation cancellation (See: cancel) CANCELLATION. Its general acceptation, is the act of crossing a writing; it is used sometimes to signify the manual operation of tearing or destroying the instrument itself. Hyde v. Hyde, 1 Eq. Cas. Abr. 409; Rob. 23,500 common shares for a total of $4,575. Subsequent to the end of the quarter, the company purchased for cancellation 440,000 common shares for a total of $119,205. From January January: see month. 1, 2001 to August 24, 2001, the number of common shares has been reduced by 2,213,502 (7.4%) for a cost to the company of $123,780 or $0.056 per share. In the same period common shares under stock option plans of 91,004 were issued for proceeds of $9,464 or $0.104 per share. At August 24, 2001, there are 27,981,815 shares outstanding compared to 30,104,313 at December December: see month. 31, 2000. The company's normal course issuer bid is complete. NRG would also like to announce the appointment of Peter Braaten to the Board of Director's of NRG. Peter Braaten is Chairman of Brompton Brompton may refer to:
American writer who won the 1993 Nobel Prize for literature. Her novels, such as Sula (1973) and Beloved (1987), examine the experiences of African Americans. Middlefield Middlefield is the name of some places in the United States of America:
Bow Valley Provincial Park (part of the Kananaskis park system) is established east of the Canadian Rockies in the arch of the Energy Ltd. About NRG The NRG Group is a venture capital company investing in a broad range of companies. The NRG Group has increased the scope of its investment policy in order to broaden the amount of potential investments and diversify diversify To acquire a variety of assets that do not tend to change in value at the same time. To diversify a securities portfolio is to purchase different types of securities in different companies in unrelated industries. its portfolio holdings. The goal of the NRG Group is to invest in companies that will provide attractive rates of return and maximize In a graphical environment, to enlarge a window to the full size of the screen. See Win Maximize windows. shareholder value. Forward Looking Statements The Company and its representatives periodically make written and spoken forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , including those contained in the annual and quarterly reports to shareholders. By their nature, forward-looking statements are subject to risks and uncertainties that could result in actual performance being materially different from anticipated results. The Company cautions readers when making decisions to consider the risks and uncertainties of forward-looking statements. For further information regarding this financial information or to present or propose business opportunities, contact Anthony Messina, CFO See Chief Financial Officer. and Corporate Secretary (416-867-8576), or Mike Svetkoff, Corporate Controller, (416-867-8592), or by e-mail at ir@thenrggroup.com. The NRG Group has moved its corporate office to Scotia Plaza Scotia Plaza is a commercial office complex in the city of Toronto, Ontario, Canada. The complex is situated in the financial district of the downtown core, and is generally bordered by Yonge Street on the east, King Street West on the south, Bay Street on the west, and Adelaide , 40 King St. West, Suite 5012, Toronto Toronto (tərŏn`tō), city (1998 est pop. 2,400,000), provincial capital, S Ont., Canada, on Lake Ontario. Toronto is the largest city in Canada and since the 1970s has been one of the fastest-changing cities in North America, experiencing , Ontario Ontario, city, United States Ontario, city (1990 pop. 133,179), San Bernardino co., S Calif., near Los Angeles, in a region of vineyards; inc. 1891. , M5H 3Y2. Please find below the unaudited interim financial statements for the three and six-month period ended June 30, 2001.
The NRG Group Inc.
BALANCE SHEETS
(in thousands of dollars)
(Unaudited) (Audited)
June 30, December 31,
2001 2000
$ $
---------------------------------------------------------------
ASSETS
Cash and cash equivalents 2,528 5,315
Accounts receivable and other assets 232 797
Investments and advances (note 2) 13,695 10,900
Capital assets, net 107 505
Goodwill, net - 106
---------------------------------------------------------------
16,562 17,623
===============================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Accounts payable and accrued
liabilities (note 3) 821 723
Due to related parties - 148
---------------------------------------------------------------
Total liabilities 821 871
---------------------------------------------------------------
Shareholders' equity
Share capital (note 4) 48,382 51,395
Contributed surplus (note 4) 4,860 1,840
Deficit (37,501) (36,483)
---------------------------------------------------------------
Total shareholders' equity 15,741 16,752
---------------------------------------------------------------
16,562 17,623
===============================================================
See accompanying notes
The NRG Group Inc.
STATEMENTS OF INCOME (LOSS) AND
RETAINED EARNINGS (DEFICIT)
(in thousands of dollars except earnings per share and share amounts)
Three-months Three-months Six-months Six-months
Ended June Ended June Ended June Ended June
30, 2001 30, 2000 30, 2001 30, 2000
$ $ $ $
---------------------------------------------------------------
INCOME
Interest 98 144 211 150
----------------------------------------------------------------
EXPENSES
General and
administrative 450 1,186 1,075 1,375
Sales and marketing 4 184 26 233
Amortization of
capital assets 3 33 6 36
Restructuring charges
(note 4) 534 - 1,911 -
---------------------------------------------------------------
991 1,403 3,018 1,644
---------------------------------------------------------------
Loss before realized
and unrealized gain
(loss) on investments,
income taxes and
goodwill charges (893) (1,259) (2,807) (1,494)
Realized loss on sales
and dispositions of
investments (net) (16,087) (4,308) (16,144) (4,308)
Previously recognized
unrealized losses 16,025 - 16,053 -
Unrealized gain (loss)
on investments (net) 3,709 (22,812) 1,921 7,781
---------------------------------------------------------------
Income (loss) before
income taxes and
goodwill charges 2,754 (28,379) (977) 1,979
Provision for income
taxes (note 5) - (8,963) - 59
---------------------------------------------------------------
Income (loss) before
goodwill charges 2,754 (19,416) (977) 1,920
Goodwill charges - (757) - (883)
---------------------------------------------------------------
Income (loss) from
continued operations
for the period 2,754 (20,173) (977) 1,037
Net loss from
discontinued
operations for the
period (note 6) - (601) (41) (701)
---------------------------------------------------------------
Net income (loss) for
the period 2,754 (20,774) (1,018) 336
Retained earnings
(deficit), beginning
of period (40,255) 21,849 (36,483) 739
---------------------------------------------------------------
Retained earnings
(deficit), end of
period (37,501) 1,075 (37,501) 1,075
===============================================================
Earnings (loss) per common share
Continuing Operations
Basic and fully
diluted $0.10 $(0.74) $(0.03) $0.05
===============================================================
Reported
Basic and fully
diluted $0.10 $(0.76) $(0.04) $0.02
===============================================================
Weighted average number
of common shares
outstanding
Basic 28,631,313 27,227,177 29,040,390 20,642,263
Fully diluted 28,691,665 27,227,177 29,040,390 20,964,510
===============================================================
See accompanying notes
The NRG Group Inc.
STATEMENTS OF CASH FLOWS
(in thousands of dollars)
Three-months Three-months Six-months Six-months
Ended June Ended June Ended June Ended June
30, 2001 30, 2000 30, 2001 30, 2000
$ $ $ $
---------------------------------------------------------------
OPERATING ACTIVITIES
Net income (loss)
for the period 2,754 (20,774) (1,018) 336
Items not involving
cash
Amortization and
write-down of
capital assets 73 33 76 36
Realized loss on
investments (net) 16,087 4,308 16,144 4,308
Previously
recognized
unrealized
losses (16,025) - (16,053) -
Unrealized loss
(gain)
on investments
(net) (3,709) 22,812 (1,921) (7,781)
Goodwill charge - 757 - 883
Net change in non-cash
working capital
balances (282) (8,580) 98 19
---------------------------------------------------------------
Cash used in
operating
activities (1,102) (1,444) (2,674) (2,199)
---------------------------------------------------------------
INVESTING ACTIVITIES
Acquisition of
investments and
advances (350) (1,411) (765) (2,273)
Sale of investments 318 - 326 -
Purchase of capital
assets - (391) - (489)
Sale of capital assets 39 - 322 -
---------------------------------------------------------------
Cash provided by
(used in) investing
activities 7 (1,802) (117) (2,762)
---------------------------------------------------------------
FINANCING ACTIVITIES
Issuance of common
shares, net of costs 9 13,399 9 13,499
Repurchase of common
shares (5) - (5) -
Proceeds on issuance
of convertible debt - - - 3,693
Repayment of bank
indebtedness - - - (765)
Repayment of amount
due to related party - - - (600)
---------------------------------------------------------------
Cash provided by
financing activities 4 13,399 4 15,827
---------------------------------------------------------------
Net increase (decrease)
in cash and cash
equivalents
during the period (1,091) 10,153 (2,787) 10,866
Cash and cash
equivalents,
beginning of period 3,619 2,736 5,315 2,023
---------------------------------------------------------------
Cash and cash
equivalents, end
of period 2,528 12,889 2,528 12,889
===============================================================
See accompanying notes
The NRG Group Inc.
NOTES TO FINANCIAL STATEMENTS (in thousands of dollars except share and per share amounts) 1. SIGNIFICANT ACCOUNTING POLICIES These financial statements have been prepared by management in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with Canadian generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting . These statements should be read in conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with the audited financial statements for the year ended December 31, 2000. These statements follow the same accounting policies and methods as the most recent annual financial statements, except for: Earnings per share The Company has retroactively ret·ro·ac·tive adj. Influencing or applying to a period prior to enactment: a retroactive pay increase. [French rétroactif, from Latin adopted the new recommendations for determining earnings (loss) per common share issued by The Canadian Institute of Chartered Accountants The Canadian Institute of Chartered Accountants (CICA) is the umbrella body for the Chartered Accountant profession in Canada and Bermuda. Membership of the CICA totals 70,000 Chartered Accountants and 8,500 students. . Accordingly, basic earnings (loss) per share has been determined by dividing net income attributable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of is in accordance with the treasury stock method and is based on the weighted average number of common shares and dilutive common share equivalents outstanding during the period. The change in accounting policy did not result in a difference in the reported earning per share Noun 1. earning per share - the portion of a company's profit allocated to each outstanding share of common stock net income, net profit, profit, profits, earnings, lucre, net - the excess of revenues over outlays in a given period of time (including depreciation figures.
2. INVESTMENTS AND ADVANCES AND RELATED SUBSEQUENT
EVENTS
June 30, 2001
-------------------------------------
Number of
securities for
publicly traded Fair
companies value Cost
(No.) $ $
---------------------------------------------------------------
Investments in publicly
-traded companies (a)
ACEnetx Inc.
- common shares 740,000 102 1,031
MedcomSoft Inc.
- common shares 1,250,000 7,550 1,003
- warrants 150,000 810 -
Starfire Technologies
International Inc.
- common shares 133,333 5 134
---------------------------------------------------------------
Total publicly-traded companies 8,467 2,168
===============================================================
Investments in privately-held
companies
Youthography 94 94
StreetViews Inc. 2,990 3,990
---------------------------------------------------------------
Total privately-held companies 3,084 15,616
---------------------------------------------------------------
Total investments 11,551 17,784
Advances to StreetViews Inc. (b) 1,844 1,844
Note receivable from Youthography (c) 300 300
---------------------------------------------------------------
Total investments and advances 13,695 19,928
===============================================================
a) The fair value of the publicly traded investments includes a
liquidity discount.
b) The advances to Streetviews Inc. bear interest at the rate of
15% to 20% per annum and are collaterized by assets of
Streetviews Inc. and its subsidiary, The Fund Library. The
amount includes $179 of accrued interest. Subsequent to the end
of the quarter, NRG advanced $900 to Streetviews Inc. The notes
are due on demand.
c) The note receivable from Youthography is non-interest bearing and
is due on February 1, 2003.
d) NRG advanced $600 to Just White Shirts and Black Socks Inc.
subsequent to the end of the quarter in the form of a 10% interest
bearing promissory note collaterized by assets of Just White Shirts
and Black Socks Inc. The note is due at the earlier of February
28, 2002 or the closing of a subsequent round of financing. This
note is part of a signed letter of intent that commits the Company
to invest up to $1,260 (including the $600 already advanced) in the
next round of equity financing.
December 31, 2000
-------------------------------------
Number of
securities for
publicly traded Fair
companies value Cost
(No.) $ $
---------------------------------------------------------------
Investments in publicly
-traded companies (a)
ACEnetx Inc.
- common shares 740,000 461 1,031
China.com Studios Inc.
- common shares 71,442 480 2,969
MedcomSoft Inc.
- common shares 1,250,000 4,550 1,003
- warrants 150,000 450 -
Starfire Technologies
International Inc.
- common shares 200,000 101 201
---------------------------------------------------------------
Total investments in
publicly-traded companies 6,042 5,204
---------------------------------------------------------------
Investments in privately
-held companies
COL Canada Inc. (charity.ca) 100 7,840
Eye-Ons Corporation 552 3,440
StreetViews Inc. 2,990 3,990
---------------------------------------------------------------
Total investments in privately
-held companies 3,642 15,270
---------------------------------------------------------------
Total investments 9,684 20,474
Advances to StreetViews Inc. 1,216 1,216
---------------------------------------------------------------
Total investments and advances 10,900 21,690
===============================================================
3. RESTRUCTURING CHARGES
On January 22, 2001, the Company announced a corporate
restructuring and market repositioning and recorded restructuring
charges amounting to $1,377 in the first quarter ended March 31, 2001.
The Company continued in the second quarter ended June 30, 2001 to a
staff consisting of two full time employees. Additional restructuring
charges of $535 were taken in the quarter ended June 30, 2001. The
majority of these costs relate to severance, occupancy and
infrastructure expenses.
As at June 30, 2001, the restructuring costs included in accounts
payable and accrued liabilities were $518.
4. SHARE CAPITAL
Share capital consists of the following:
Number of Stated
common amount
shares (in thousands)
(No.) $
---------------------------------------------------------------
Authorized
Unlimited common shares
Issued
Balance, December 31, 2000 30,104,313 51,395
Shares repurchased and held
for cancellation by the
Company (1,773,502) (3,023)
Stock option plan 91,004 10
---------------------------------------------------------------
Balance, June 30, 2001 28,421,815 48,382
===============================================================
Shares repurchased for cancellation
a) During the first quarter ended March 31, 2001, the Company
repurchased 1,000,002 common shares for a nominal amount from the
former Co-CEO's and a former officer of the Company resulting in a
reduction of share capital in the amount of $1,705 and increase in
contributed surplus of $1,705.
b) At the time of the initial public offering, 750,000 shares were
held in escrow on behalf of former officers of the Company,
including the former Co-CEOs, and would be released to them if
certain financial conditions were met. As these conditions were not
met on the anniversary date of May 4, 2001, all of these shares
were purchased for cancellation for a nominal amount by the
Company. The discount on the repurchase of shares amounted to
$1,280 and was reported as contributed surplus.
c) The Company repurchased 23,500 common shares during the quarter for
a total of $5 under the normal course issuer bid. An amount of $35
was recorded as contributed surplus.
d) Subsequent to the end of the quarter ended June 30, 2001, the
Company repurchased 440,000 common shares for a total of $119 under
the normal course issuer bid, completing the amount of common
shares able to be purchased by the Company and closing the normal
course issuer bid.
5. INCOME TAXES
At December 31, 2000, the Company had non-capital losses available
for carryforward of approximately $5,900 that are available to reduce
taxable income until 2007. Of this amount, $405 will expire in 2006
and $5,495 in 2007. The benefit of such losses has not been recognized
in these financial statements.
6. DISCONTINUED OPERATIONS
On February 1, 2001, the Company sold a 66.6% interest of its
consulting business to an employee group for $300 consisting of a $300
non-interest bearing note receivable maturing on February 1, 2003. The
net book value of the assets of the business sold totaled $300 and
therefore there was no gain or loss on the transaction. This business
will carry on as Youthography Inc.. Youthography is recorded as an
investment and will be accounted for in accordance with the Company's
policy for privately held investments.
The results of discontinued operations are summarized as follows:
Three-months Six-months Six-months
Ended June Ended June Ended June
30, 2000 30, 2001 30, 2000
$ $ $
---------------------------------------------------------------
Consulting revenue 413 45 455
Operating expenses 1,014 86 1,156
---------------------------------------------------------------
Net loss (601) (41) (701)
---------------------------------------------------------------
7. STOCK OPTION PLAN
The Company may grant to employees, directors and other service
providers options to acquire common shares of the Company limited to
3,157,646 common shares. The exercise price of each option equals the
fair market value of the Company's common shares on the date of the
grant and an option's maximum term is six years. Vesting terms and
conditions are determined by the Board of Directors at the time of the
grant. A summary of the Company's stock option plan as at June 30,
2001 is presented below:
Weighted
average
Options exercise price
(No.) $
---------------------------------------------------------------
Outstanding, December 31, 2000 2,072,613 1.92
Granted 930,000 0.32
Exercised (91,004) 0.104
Surrendered (1,227,600) 1.01
---------------------------------------------------------------
Outstanding, June 30, 2001 1,684,009 1.75
===============================================================
Vested options, end of the period 826,458
===============================================================
The following table summarizes information about the stock options
outstanding as at June 30, 2001:
Exercise Exercisable at
Options price Expiry date June 30, 2001
(No.) $ (No.)
---------------------------------------------------------------
42,925 0.104 August 2001 42,925
96,300 0.208 December 2005 52,965
352,850 0.32 February 2006 -
78,534 0.57 July 2002
- October 2005 56,368
25,000 0.70 October 2005 25,000
2,500 1.65 July 2005 2,500
1,085,900 2.50 July 2001
- April 2005 646,700
---------------------------------------------------------------
1,684,009 826,458
===============================================================
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