Bontan Corporation Inc.
Consolidated Financial Statements
For the Six Months Ended September 30, 2007 and 2006
(Canadian Dollars)
(UNAUDITED – see Notice to Reader dated November 9, 2007)
BONTAN CORPORATION INC.
NOTICE TO READER OF THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements for Bontan Corporation Inc. for the six months ended September 30, 2007 have been prepared by management in accordance with Canadian generally accepted accounting principles, consistently applied. These consolidated financial statements have not been reviewed by the auditors of the Company.
These financial statements are presented on the accrual basis of accounting. Accordingly, a precise determination of many assets and liabilities is dependent upon future events. Therefore, estimates and approximations have been made using careful judgement. Recognizing that the management is responsible for both the integrity and objectivity of the financial statements, management is satisfied that these financial statements have been fairly presented.
Canadian generally accepted accounting principles vary in certain significant respects from accounting principles generally accepted in the United States. Application of accounting principles generally accepted in the United States would have affected results of operations for the six months ended September 30, 2007 and the shareholders’ equity as at that date to the extent summarised in Note 13 to the consolidated financial statements.
November 9, 2007
Bontan Corporation Inc.
Consolidated Statements of Operations
(Canadian Dollars)
(Unaudited –see Notice to Reader dated November 9, 2007)
Note | September 30, 2007 (unaudited) | March 31, 2007 (Audited) | |||||
Assets | |||||||
Current | |||||||
Cash | $2,208,459 | $3,014,928 | |||||
Short term investments | 2(b), 3 | 4,137,361 | 3,315,691 | ||||
Deferred stock based compensation | 4 | 119,256 | 276,146 | ||||
Prepaid and other receivables | 26,909 | 66,153 | |||||
6,491,985 | 6,672,918 | ||||||
Computer Equipment | 2,299 | - | |||||
$6,494,284 | $6,672,918 | ||||||
Liabilities | |||||||
Current | |||||||
Accounts payable | $26,842 | $19,052 | |||||
Accrued liabilities | 12,505 | 29,400 | |||||
39,347 | 48,452 | ||||||
Shareholders' Equity | |||||||
Capital stock | 5 | 27,778,073 | 27,667,872 | ||||
Warrants | 6 | 6,961,152 | 6,961,152 | ||||
Contributed surplus | 4,069,549 | 4,069,549 | |||||
Accumulated other comprehensive income | 2(a) | 145,723 | - | ||||
Deficit | (32,499,560) | (32,074,107) | |||||
6,454,937 | 6,624,466 | ||||||
$6,494,284 | $6,672,918 | ||||||
Approved by the Board ”Kam Shah” Director ”Dean Bradley” Director
(signed) (signed)
The accompanying notes are an integral part of these financial statements.
Bontan Corporation Inc.
Consolidated Statements of Operations
(Canadian Dollars)
(Unaudited –see Notice to Reader dated November 9, 2007)
Three months ended | Six months ended | Three months ended | Six months ended | |||
September 30, 2007 | September 30, 2006 | |||||
Income | ||||||
Interest | 25,025 | 46,681 | 27,106 | 53,459 | ||
Gain on disposal of short term investments | - | 75,661 | 62,325 | 33,429 | ||
$25,025 | $122,342 | $89,431 | $86,888 | |||
Expenses | ||||||
Exchange loss | 81,009 | 186,710 | (20,262) | 151,028 | ||
Stock based compensation (note 4) | 78,372 | 156,890 | 88,563 | 214,446 | ||
Shareholders information | 37,546 | 73,867 | 43,671 | 79,981 | ||
Travel, promotion and consulting | 36,763 | 87,333 | 38,374 | 68,360 | ||
Loss on short term investments | 25,974 | - | - | - | ||
Professional fees | 8,033 | 14,563 | 5,451 | 8,370 | ||
Communication | 2,055 | 4,774 | 1,659 | 4,328 | ||
Office and general | 5,820 | 17,480 | 6,145 | 8,201 | ||
Bank charges and interest | 258 | 655 | 10,384 | 12,372 | ||
Transfer agents fees | 1,201 | 2,652 | 1,324 | 2,845 | ||
Rent | 1,412 | 2,871 | 1,480 | 2,966 | ||
Interest in gas property written off | - | - | 4,081 | 4,081 | ||
$278,443 | $547,795 | $180,870 | $556,978 | |||
Net loss for period | $(253,418) | $(425,453) | $(91,439) | $(470,090) | ||
Deficit - beginning of period | (32,246,142) | (32,074,107) | (32,288,715) | (31,910,064) | ||
Deficit - end of period | $(32,499,560) | $(32,499,560) | $(32,380,154) | $(32,380,154) | ||
Net Loss per share - Basic and diluted (note 7) | $(0.01) | $(0.01) | $(0.00) | $(0.02) | ||
The accompanying notes are an integral part of these financial statements.
Bontan Corporation Inc.
Consolidated Statement of Cash Flows
(Canadian Dollars)
(Unaudited –see Notice to Reader dated November 9, 2007)
|
|
|
|
| Three months ended | Six months ended | Three months ended | Six months ended |
|
|
|
|
| September 30, 2007 | September 30, 2006 | ||
Cash flows from operating activities | ||||||||
Net loss for period | (253,418) | (425,453) | (91,439) | $ (470,090) | ||||
Interest in gas property written off | - | - | 4,081 | 4,081 | ||||
(Gain)/loss on disposal of short term investments | 25,974 | (75,661) | - | - | ||||
Stock based compensation | 78,372 | 156,890 | 88,563 | 214,446 | ||||
Net change in working capital components | ||||||||
Prepaid and other receivable | 46,823 | 39,244 | 32,402 | 31,535 | ||||
Accounts payable and accrued liabilities | (27,467) | (9,105) | 4,795 | (113,592) | ||||
|
|
|
| $ | (129,716) | (314,085) | 38,402 | (333,620) |
Investing activities | ||||||||
Short term Investments | (380,491) | (675,947) | (600,069) | (1,656,705) | ||||
Interest in gas property | - | - | - | - | ||||
Net proceeds from sale of short term investments | (25,974) | 75,661 | - | - | ||||
Computer equipment | (2,299) | (2,299) | (4,081) | (4,081) | ||||
|
|
|
| $ | (408,764) | (602,585) | (604,150) | (1,660,786) |
Financing activities | ||||||||
Common shares issued net of issuance costs | - | 110,201 | - | 1,172,813 | ||||
Net advances from shareholders | - | - | 8 | (149) | ||||
|
|
|
|
| - | 110,201 | 8 | 1,172,664 |
Increase (decrease) in cash during period | (538,480) | (806,469) | (565,740) | (821,742) | ||||
Cash at beginning of period | 2,746,939 | 3,014,928 | 3,006,840 | 3,262,842 | ||||
Cash at end of period |
|
| $ | 2,208,459 | 2,208,459 | 2,441,100 | $ 2,441,100 | |
The accompanying notes are an integral part of these financial statements.
Bontan Corporation Inc.
Consolidated Statement of Comprehensive Income and Accumulated Other
Comprehensive Income
(Canadian Dollars)
(Unaudited –see Notice to Reader dated November 9, 2007)
Three months ended | Six months ended | Three months ended | Six months ended | |||
September 30, 2007 | September 30, 2006 | |||||
Net loss for period | (253,418) | (425,453) | (91,439) | (470,090) | ||
Other comprehensive loss | ||||||
Unrealised losses on available for sale financial assets arising during the period | (198,288) | (813,979) | - | - | ||
Comprehensive loss | (451,706) | (1,239,432) | (91,439) | (470,090) | ||
Accumulated other comprehensive income | ||||||
Beginning of period | 344,011 | 959,702 | - | - | ||
Other comprehensive loss for period | (198,288) | (813,979) | - | - | ||
Accumulated other comprehensive income, end of period | 145,723 | 145,723 | - | - | ||
The accompanying notes are an integral part of these financial statements.
Bontan Corporation Inc.
Notes to Consolidated Financial Statements
(Canadian Dollars)
September 30, 2007 and 2006
(Unaudited –see Notice to Reader dated November 9, 2007)
1.
NATURE OF OPERATIONS
Bontan Corporation Inc. (“the Company”) is a diversified natural resource company that invests in major oil and gas exploration and exploitation projects in countries around the globe through its subsidiary by acquiring joint venture, indirect participation interest and working interest in those projects.
The Company focuses on projects where the other project partners have proven experience in oil and gas exploration, development and distribution.
The Company had no active projects during the six months ended September 30, 2007.
2.
ACCOUNTING PRINCIPLES AND USE OF ESTIMATES
These unaudited interim financial statements have been prepared on the same basis as the audited financial statements of the Company for the year ended March 31, 2007 and include all adjustments necessary for the fair statement of results of the interim periods.
These interim consolidated financial statements should be read in conjunction with the annual audited financial statements for the year ended March 31, 2007, and the summary of significant accounting policies included therein except for the following new accounting standards, which were adopted as at April 1, 2007. These accounting policy changes were adopted on a prospective basis with no restatement of prior period financial statements:
(a)
Canadian Institute of Chartered Accountants (“CICA”) Handbook Section 1530, Comprehensive Income
The new standard introduces comprehensive income, which consists of net income and other comprehensive income, (“OCI”). For the Company, OCI is currently comprised of the unrealized gains and losses on the Company’s short term investments which are classified as available for sale.
The cumulative changes in OCI are included in accumulated other comprehensive income (“AOCI”), which is presented as a new category within shareholders’ equity in the consolidated balance sheet. The Company’s consolidated financial statements now include a statement of accumulated other comprehensive income, which provides the continuity of the AOCI balance.
(b)
CICA Section 3855, Financial instruments –Recognition and Measurement.
This standard establishes the recognition and measurement criteria for financial assets, liabilities and derivatives. All financial instruments are required to be measured at fair value on initial recognition of the instrument, except for certain related party transactions. Measurement in subsequent periods depends on whether the financial instrument has been classified as “held-for-trading”, “available-for-sale”, “held-to-maturity”, “loans and receivables”, or “other financial liabilities” as defined by the standard. The methods used by the Company in determining the fair value of financial instruments are unchanged as a result of implementing this new accounting standard.
Cash is designated as “held-for-trading” and are measured at carrying value, which approximates fair value due, short term investments which are mostly in marketable securities are designated as “available-for-sale”, prepaid and other receivable are designated as “loans and receivable” and are carried at cost. Accounts payable and accrued liabilities are designated as ‘other financial liabilities” and are carried at cost.
Bontan Corporation Inc.
Notes to Consolidated Financial Statements
(Canadian Dollars)
September 30, 2007 and 2006
(Unaudited –see Notice to Reader dated November 9, 2007)
2.
ACCOUNTING PRINCIPLES AND USE OF ESTIMATES – Continued.
(c)
CICA Section 1651 Foreign currency translation
This Standard provides for a new treatment for exchange gains and losses arising from the translation of the financial statements of self sustaining foreign operations. The Standard requires that such translation gains and losses should be recognized in a separate component of other comprehensive income and disclosed in equity section of the balance sheet.
The Company’s only subsidiary, Bontan Oil & Gas Corporation uses US Dollar as a functional currency. However, the subsidiary is not self sustaining but is integrated to Bontan Corporation Inc. Hence translation gains and losses of this subsidiary continue to be charged to income.
3.
SHORT TERM INVESTMENTS
Short-term investments comprise marketable securities, designated as “available-for-sale”.
Short term investments are stated at fair value based on quoted market prices on the balance sheet as at September 30, 2007 except for the following investments which are stated at cost since their market value was not easily ascertainable as at September 30, 2007 and the management believes that it approximates the cost.
(a)
50,000 preference shares held in a private corporation for a cost of US$50,000.
(b)
500,000 Class A shares held in a private corporation for a cost of US$50,000.
(c)
500,000 common shares in a private corporation for a cost of $100,000 (see also note 9 (f)).
Based on the management review of the affairs of the above investee companies and discussions with their management, it was concluded that there was no permanent impairment in the carrying costs of these investments as at September 30, 2007.
During the six months and three months ended September 30, 2007, the short term investments had an unrealised loss of $813,979 and $ 198,288 respectively, which has been included in the accumulated other comprehensive income.
Short term investments as at March 31, 2007 are stated at lower of cost and net realisable value and an unrealised gain of $959,702 was not accounted for in the accumulated other comprehensive income.
Bontan Corporation Inc.
Notes to Consolidated Financial Statements
(Canadian Dollars)
September 30, 2007 and 2006
(Unaudited –see Notice to Reader dated November 9, 2007)
4.
DEFERRED STOCK BASED COMPENSATION
Deferred stock option compensation relates to the fair value of shares and options issued under the Company’s Stock Compensation and Option Plans to consultants for services that will be performed during the period subsequent to the balance sheet date. Changes during the period were as follows:
Balance at April 1, 2007 | Deferred during six months to September 30, 2007 | Expensed during six months to September 30, 2007 | Balance at September 30, 2007 | |
Stocks | 276,146 | - | (156,890) | 119,256 |
$276,146 | $- | $(156,890) | $119,256 |
Balance at April 1, 2006 | Deferred during six months to September 30, 2006 | Expensed during six months to September 30, 2006 | Balance at September 30, 2006 | |
Stocks | 314,208 | 22,406 | (214,446) | 122,168 |
$314,208 | $22,406 | $(214,446) | $122,168 |
Bontan Corporation Inc.
Notes to Consolidated Financial Statements
(Canadian Dollars)
September 30, 2007 and 2006
(Unaudited –see Notice to Reader dated November 9, 2007)
5.
CAPITAL STOCK
(a)
Authorized
Unlimited number of common shares
(ii)
Issued
June 30, 2007 | March 31, 2007 | ||||
Common | Common | ||||
Shares | Amount | Shares | Amount | ||
Beginning of period | 28,430,203 | $27,667,872 | 22,757,703 | $30,585,691 | |
Issued under a private placement | - | - | 4,500,000 | 1,303,126 | |
Warrants issued | - | - | - | (3,810,814) | |
Warrants issued in settlement of expenses relating to private placement | - | - | (609,730) | ||
Expenses relating to private placement | (130,313) | ||||
Warrants exercised | 315,540 | 122,446 | |||
Expenses relating to warrants exercised | (i) | (12,245) | |||
Issued under 2003 Consultant Stock Compensation Plan | - | - | 42,500 | 22,406 | |
Issued under 2007 Consultant Stock Compensation Plan | - | - | 1,150,000 | 313,486 | |
Shares cancelled | - | - | (20,000) | (5,980) | |
28,745,743 | $27,778,073 | 28,430,203 | $27,667,872 | ||
(i)
Expenses relating to warrants exercised related to finder fee payable to Current Capital Corp., a related corporation, at the rate of 10% of the proceeds.
350,000 common shares have not yet been issued under 2007 Consultant stock compensation plan.
Bontan Corporation Inc.
Notes to Consolidated Financial Statements
(Canadian Dollars)
September 30, 2007 and 2006
(Unaudited –see Notice to Reader dated November 9, 2007)
6. WARRANTS
September 30, 2007 | March 31, 2007 | ||||
# of warrants | Fair value | # of warrants | Fair value | ||
Issued and outstanding at beginning of period | 13,161,960 | 6,961,152 | 5,667,410 | 2,540,608 | |
Issued during period | - | - | 6,500,000 | 3,810,814 | |
Issued in settlement of finders fee | - | - | 1,040,000 | 609,730 | |
Exercised during period | (315,540) | - | - | - | |
Expired during period | - | - | (45,450) | ||
Issued and outstanding at end of period | 12,846,420 | $6,961,152 | 13,161,960 | $6,961,152 | |
7. OPTIONS
September 30, 2007 | March 31, 2007 | |||
# of options | weighted average exercise price in US$ | # of options | weighted average exercise price in US$ | |
Issued and outstanding at beginning of period | 4,795,000 | 0.46 | 4,795,000 | 0.46 |
Issued during period | - | - | - | - |
Issued in settlement of finders fee | - | - | - | - |
Execrcised during period | - | - | - | - |
Expired during period | (20,000.00) | 0.75 | - | - |
Issued and outstanding at end of period | 4,775,000 | $0.46 | 4,795,000 | $0.46 |
1,000,000 options are reserved for issuance as at September 30, 2007.
8.
LOSS PER SHARE
Loss per share is calculated on the weighted average number of common shares outstanding during the period, which were 28,710,563 shares for the six months and 28,745,743 for the three months ended September 30, 2007 (Six and three months ended September 30, 2006: 27,281,870 and 27,292,703 respectively).
The Company had approximately 12.8 million warrants and 4.8 million options, which were not exercised as at September 30, 2007. Inclusion of these warrants and options in the computation of diluted loss per share would have an anti-dilutive effect on loss per share and are therefore excluded from the computation. Consequently, there is no difference between loss per share and diluted loss per share.
Notes to Consolidated Financial Statements
(Canadian Dollars)
September 30, 2007 and 2006
(Unaudited –see Notice to Reader dated November 9, 2007)
9.
COMMITMENTS AND CONTINGENT LIABILITIES
(a) The Company entered into media relations and investor relations contracts with Current Capital Corp., a shareholder corporation, effective July 1, 2004 initially for a period of one year and renewed automatically unless cancelled in writing by a 30-day notice for a total monthly fee of US$10,000.
(b) The Company entered into a new consulting contract with Mr. Kam Shah, the Chief Executive Officer and Chief Financial Officer on April 1, 2005 for a five-year term up to March 31, 2010. The fee for each of the years is to be decided at the board meeting after the end of the third quarter of the calendar year. Fee for the calendar year ending December 31, 2007 was settled by issuance of 350,000 common shares under 2007 Consultant Stock Compensation Plan. Further, the contract provides for a lump sum compensation of US$250,000 for early termination of the contract without cause. The contract also provides for entitlement to stock compensation and stock options under appropriate plans as may be decided by the board of directors from time to time.
(c) The Company entered into a consulting contract with Mr. Terence Robinson, the Chief Executive Officer on April 1, 2003 for a six-year term up to March 31, 2009. The contract provides for a monthly fee of $10,000 inclusive of taxes plus reimbursement of expenses and a lump sum compensation of $250,000 for early termination of the contract without cause. Mr. Robinson accepted 500,000 common shares issued under 2007 Consultant Stock Compensation Plan in lieu of his fees for the year ending December 31, 2007.
(d) The Company has a consulting contract with Mr. John Robinson expiring in June 2007. Mr. John Robinson is sole owner of Current Capital Corp., a firm with which the Company has an ongoing contract for media and investor relations, and a brother of Mr. Terence Robinson who is a key consultant to the Company and a former Chief Executive Officer of the Company. On February 8, 2007, the Company renewed the consulting contract with Mr. John Robinson for another year to June 30, 2008. The consulting fee was agreed to be US$82,000 which was pre-paid by issuance of 300,000 common shares under 2007 Consultant Stock Compensation Plan. Mr. Robinson will provide services that include monitoring the oil and gas projects and short term investment opportunities that the Company may participate in from time to time.
(e) The Company has agreed to payment of a finder’s fee to Current Capital Corp., a related party, at the rate of 10% of the proceeds from exercise of any of the outstanding warrants. The likely fee if all the warrants outstanding as at September 30, 2007 are exercised will be approximately $575,000.
(f) The Company has subscribed to one million common shares for a total cost of $200,000 of a private Ontario Company whose principal shareholder and director is a brother of the Company’s key consultant, Mr. Terence Robinson. Of the amount subscribed, the Company paid $100,000 as at September 30, 2007. The balance of $100,000 was paid on November 7, 2007.
Bontan Corporation Inc.
Notes to Consolidated Financial Statements
(Canadian Dollars)
September 30, 2007 and 2006
(Unaudited –see Notice to Reader dated November 9, 2007)
10.
RELATED PARTY TRANSACTIONS
Transactions with related parties are incurred in the normal course of business and are measured at the exchange amount. Related party transactions and balances have been listed below, unless they have been disclosed elsewhere in the financial statements. The amounts are for the six months ended September 30, 2007 with comparatives for the same period in fiscal 2007.
(i)
Included in shareholders information expense is $65,021 (2007 – $67,200) to Current Capital Corp, (CCC) for media relations services. CCC is a shareholder corporation. Its sole director and shareholder, Mr. John Robinson provides consulting services to the company and a director of the Company provides accounting services as a consultant.
(ii)
CCC charged $2,871 for rent, telephone, consultants’ fees and other office expenses (2007: $2,966).
(iii)
Finders fee of $12,245 (2007: $740,043 of which $130,313 was paid in cash and balance in 1,040,000 warrants exercisable at US$0.35 each) was payable to CCC in connection with warrants exercised.
(iv)
Business expenses of $9,677 (2007 - $5,256) were reimbursed to a director of the Corporation and $59,371 (2007: $51,602) to a key consultant and a former Chief Executive Officer of the Company (Key Consultant).
(v)
Payable includes $5,829 (2007: $5,560) due to CCC, $3,503 (2007: $15,451) due to the Key Consultant and $1,576 (2007: $1,292) due to a Director.
(vi)
Prepaid and other receivable includes an advance of $2,500 to a Director.
11.
SEGMENTED INFORMATION
As at September 30, 2007 and 2006, the Company had only one major business segment-
Energy sector: This segment includes the Company’s acquisition of interests in joint ventures and projects relating to exploration and commercial drilling of oil and gas and related products.
The accounting policies of the segments are same as those described in Note 2 of the audited consolidated financial statements for the year ended March 31, 2007.
Geographic Information
The Company operates from one location in Canada. Its assets are located as follows:
September 30, 2007 | March 31, 2007 | |
Canada | $6,494,284 | $6,557,628 |
USA | - | 115,290 |
$6,494,284 | $6,672,918 |
Bontan Corporation Inc.
Notes to Consolidated Financial Statements
(Canadian Dollars)
September 30, 2007 and 2006
(Unaudited –see Notice to Reader dated November 9, 2007)
12.
FINANCIAL INSTRUMENTS AND CONCENTRATION OF RISKS
The fair value for all financial assets and liabilities is considered to approximate their carrying values due to their short-term nature.
There is an exposure to market price fluctuation risk on the Company’s short term investments in marketable securities which accounted for approximately 64% of total assets of the Company as at September 30, 2007(50% as at March 31, 2007). Further, the Company’s holding in one Canadian marketable security accounted for approximately 56% of the total short term investment in marketable securities (48% as at March 31, 2007) or 36% of total assets at September 30, 2007 (24% as at March 31, 2007). As at September 30, 2007, this security had a carrying cost of approximately $1.9 million ($1.6 million as at March 31, 2007) and market value of approximately $2.3 million ($2.7 million as at March 31, 2007).
The management mitigates the market price fluctuation risk by daily monitoring of all its investments by experienced consultants.
The Company also has a currency exposure on its US dollar cash balances and marketable securities in US dollar on hand at September 30, 2007, which accounted for approximately 18% of the total assets (approximately 20% as at March 31, 2007).
13.
DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
These financial statements have been prepared in accordance with generally accepted accounting principles in Canada ("Canadian GAAP"). Material variations in the accounting principles, practices and methods used in preparing these consolidated financial statements from principles, practices and methods used in the United States ("US GAAP") and in SEC Regulation S-X are described and quantified below.
Bontan Corporation Inc.
Notes to Consolidated Financial Statements
(Canadian Dollars)
September 30, 2007 and 2006
(Unaudited –see Notice to Reader dated November 9, 2007)
13.
DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES - Continued
September 30, 2007 | March 31, 2007 | |||||
Balance under Canadian GAAP | Adjustment | Balance under US GAAP | Balance under Canadian GAAP | Adjustment | Balance under US GAAP | |
Balance Sheets | ||||||
Current assets | $6,491,985 | $6,491,985 | $6,672,918 | 959701 | $7,632,619 | |
Computer equipment | 2,299 | 2,299 | - | - | - | |
Total assets | $6,494,284 | $- | $6,494,284 | $6,672,918 | $959,701 | $7,632,619 |
Current Liabilities | 39,347 | 39,347 | 48,452 | 48,452 | ||
Capital stock | 27,778,073 | 27,778,073 | 27,667,872 | 27,667,872 | ||
Warrants | 6,961,152 | 6,961,152 | 6,961,152 | 6,961,152 | ||
Accumulated other comprehensive income | 145,723 | 145,723 | 0 | 1,412,673 | 1,412,673 | |
Contributed surplus | 4,069,549 | 4,069,549 | 4,069,549 | 4,069,549 | ||
Deficit | (32,499,560) | (32,499,560) | (32,074,107) | (452,972) | (32,527,079) | |
Liabilities and shareholders' equity | $6,494,284 | $- | $6,494,284 | $6,672,918 | $959,701 | $7,632,619 |
The impact of significant US GAAP variations on the Consolidated Statement of Operations are as follows:
Six months ended September 30 | 2007 | 2006 |
Net Loss for period, Canadian GAAP | (425,453) | (470,090) |
Reclassification of exchange loss(gain) on period end translation of foreign currency items and balances | - | 151,028 |
Loss for year US GAAP | (425,453) | (319,062) |
Reclassification of exchange gain(loss) on period end translation of foreign currency items and balances | - | (151,028) |
Unrealised gain(losses) on available for sale financial assets arising during period (i) | (813,979) | 579,921 |
Comprehensive loss for period, US GAAP | (1,239,432) | 109,831 |
Basic and diluted loss per share, US GAAP | (0.01) | (0.01) |
Bontan Corporation Inc.
Notes to Consolidated Financial Statements
(Canadian Dollars)
September 30, 2007 and 2006
(Unaudited –see Notice to Reader dated November 9, 2007)
13.
DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES – Continued
There was no impact of the above differences between Canadian GAAP and US GAAP on the consolidated statements of cash flows.
(i)
Short-term Marketable securities
As explained in Note 2, CICA introduced a new section 3855 to recognize and measure financial instruments including marketable securities. This revision brings the Canadian GAAP in line with the Statement of Financial Accounting Standard (“SFAS”) No. 115, “Accounting for Certain Investments in Debt and Equity Securities”, which requires that equity securities that have readily determinable fair values be classified as either available-for-sale or trading securities, and that they be reported at fair market values. For available-for-sale securities, unrealized gains or losses are to be reported as other comprehensive income, a separate component of shareholders’ equity, until realized. All short term investments are classified as “available-for-sale”.
Since the Company implemented the new Canadian standard on a prospective basis with no restatement of prior period financials, the reconciliation is presented to provide comparatives as per US GAAP.
New accounting pronouncements
There were no new accounting developments in the US standards that would affect the results of operations or financial position of the Company other than those detailed in the audited consolidated financial statements for the year ended March 31, 2007.
BONTAN CORPORATION INC.
SIX MONTHS ENDED SEPTEMBER 30, 2007
MANAGEMENT’S DISCUSSION AND ANALYSIS
Prepared as at November 9, 2007
Index | |
Overview | 3 |
Summary of results | 3 |
Number of common shares, options and warrants | 4 |
Business environment Risk factors | 4 4 |
Forward looking statements | 5 |
Business plan | 5 |
Results of operations | 6 |
Liquidity and Capital Resources | 11 |
Key contractual obligations | 12 |
Off balance sheet arrangements | 12 |
Transactions with related parties | 12 |
Financial and derivative instruments | 13 |
Critical accounting estimates | 14 |
Disclosure controls and procedures | 14 |
Internal controls and procedures | 15 |
Current Outlook | 15 |
Public securities filing | 16 |
Management Discussion and Analysis
The following discussion and analysis by management of the financial condition and financial results for Bontan Corporation Inc. for the three months ended September 30, 2007 should be read in conjunction with the unaudited Consolidated Financial Statements for the six months ended September 30, 2007, unaudited Consolidated Financial Statements and Management Discussion & Analysis for the three months ended June 30, 2007 and the audited Consolidated Financial Statements and Management Discussion and Analysis for the year ended March 31, 2007. The financial statements and the financial information herein have been prepared in accordance with generally accepted accounting principles in Canada. Reference is made to Financial Statement Notes for a discussion of the material differences between Canadian GAAP and U.S. GAAP, and their effect on the Company's financial statements.
This management discussion and analysis is prepared by management as at November 9, 2007. The Company’s auditors have not reviewed it.
In this report, the words “us”, “our”, “the Company” and “Bontan” have the same meaning unless otherwise stated and refer to Bontan Corporation Inc. and its subsidiary.
Overview
Summary of Results
During the quarter ended September 30, 2007, the management continued to look for suitable projects to participate into. Our search for project extended to include apart from oil and gas, coal, water purification and high tech software development and distribution. We also placed advertisements in industry journal covering oil and gas inviting project participation opportunities. While these advertisements generated some responses, they are still being reviewed at various levels. However, many of the projects were either considered too expensive or not promising. As a result, at the end of the quarter, the Company had no exploration projects and had no proven reserves of oil or gas.
Meanwhile, the surplus cash on hand continued to be invested in short-term marketable securities.
The following table summarizes financial information for the 2nd quarter ended September 30, 2007 and the preceding seven quarters: (All amounts in ‘000 CDN$ except Net income (loss) per share, which are actual amounts).
Quarter ended | Sept.30, 2007 | June30, 2007 | Mar. 31, 2007 | Dec. 31, 2006 | Sept. 30, 2006 | June 30, 2006 | Mar. 31, 2006 | Dec. 31, 2005 |
Total Revenue | 25 | 123 | 499 | 130 | 89 | 26 | 116 | (174) |
Net (loss) income | (253) | (172) | 309 | (3) | (91) | (379) | (91) | (155) |
Working capital | 6,453 | 6,907 | 6,625 | 6,002 | 6,011 | 6,095 | 5,286 | 3,162 |
Shareholders’ equity | 6,453 | 6,907 | 6,624 | 6,002 | 6,011 | 6,095 | 5,286 | 3,162 |
Net loss per share - basic and diluted | (0.01) | (0.01) | - | - | - | (0.01) | - | (0.01) |
Number of common shares, options and warrants
These are as follows:
As at September 30, 2007 and November 9, 2007 | |
Shares issued and outstanding | 28,745,743 |
Warrants issued and outstanding ( a) | 12,846,420 |
Options granted but not yet exercised (b) | 4,775,000 |
(a)
Warrants are convertible into equal number of common shares of the Company within two years of their issuance, at an exercise prices ranging from US$ 1 per warrant to US$0.35 as follows:
September 30, 2007 and November 9, 2007
Exercise price
----------------No of warrants--------
US$ 1
1,721,960
US$0.35
11,124,460
(b)
Options are exercisable into equal number of common shares at an average exercise price of US$0.48 and have a weighted average remaining contractual life of approximately 2 years.
Business Environment
Risk factors
Please refer to the Annual Report in the form F-20 for the fiscal 2007 for detailed information as the economic and industry factors that are substantially unchanged.
Forward looking statements
Certain statements contained in this report are forward-looking statements as defined in the U.S. Federal Securities Laws. All statements, other than statements of historical facts, included herein or incorporated by reference herein, including without limitation, statements regarding our business strategy, plans and objectives of management for future operations and those statements preceded by, followed by or that otherwise include the words “believe”, “expects”, “anticipates”, “intends”, “estimates” or similar expressions or variations on such expressions are forward-looking statements. We can give no assurances that such forward-looking statements will prove to be correct.
Each forward-looking statement reflects our current view of future events and is subject to risks, uncertainties and other factors that could cause actual results to differ materially from any results expressed or implied by our forward-looking statements.
Risks and uncertainties include, but are not limited to:
·
Our lack of substantial operating history;
·
The success of the exploration prospects, in which we have interests;
·
Uninsured risks;
·
The impact of competition;
·
The enforceability of legal rights;
·
The volatility of oil and gas prices;
·
Weather and unforeseen operating hazards;
Important factors that could cause the actual results to differ materially from our expectations are disclosed in more detail set forth under the heading “Risk Factors” in herein. Our forward-looking statements are expressly qualified in their entirety by this cautionary statement.
Currently we do not hold interests in any exploration projects and have no reserves as defined in Canadian National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101"). All information contained herein regarding resources is references to undiscovered resources under NI 51-101, whether stated or not.
Business plan
The Company’s primary business plan is focused on becoming an international diversified natural resource company that invests in major oil and gas exploration prospects. However if the Company is unable to find a suitable project in the resource sector, it will seek opportunities in any other sectors.
Through its wholly owned subsidiary, the Company will continue to seek highly visible opportunities in countries around the globe that offer exciting and attractive propositions. The company will seek to minimize risk by bringing in either joint venture, carried or working interest partners, depending on the size and scale of the project.
The company’s efforts at securing projects in energy sector, which meet our criteria, have not yet been rewarded but the management is convinced that the sector is still very attractive and will offer the kind of projects that will suit the company’s needs.
Results of operations
Three months ended September 30 | 2007 | 2006 |
in 000' CDN $ | in 000' CDN $ | |
Income | 25 | 89 |
Expenses | (278) | (181) |
Net loss for year | (253) | (92) |
Deficit at end of period | (32,500) | (32,380) |
Overview
The key events during the three months ended September 30, 2007 were:
1.
The Company received and reviewed several different types of projects. These projects included oil exploration in China, design, manufacture and delivery of health drinks, ecological building technology marketing and development and coal production, procurement and sell in USA. All these projects were either too expensive or did not meet the due diligence criteria and hence were eventually not pursued further. After the initial reviews. Some of these projects were received because of advertisements given in industry specific magazines.
2.
We are currently reviewing three proposals in oil and gas. No firm conclusions have yet been reached in respect of any of these proposals.
3.
The surplus funds meanwhile continued to be invested in short term marketable securities. Approximately $4 million remained invested in marketable securities. The fair value of these investments at September 30, 2007 was $4.1 million.
The key event during the three months ended September 30, 2006 included conducting due diligence on two project proposals but eventually deciding against participating in those projects due to unsatisfactory results of our due diligence. Meanwhile, surplus funds continued to be invested in short term marketable securities, which showed significant gains.
Income
Three months ended September 30 | 2007 | 2006 |
in 000' CDN $ | in 000' CDN $ | |
Interest | 25 | 27 |
Gain on disposal of short term investments | - | 62 |
25 | 89 | |
Income during the quarter ended September 30, 2007 consisted of interest earned on cash balances with brokerage firms.
Interest income earned during the quarter ended September 30, 2006 was entirely comprised of interest on cash balances with brokerage firm.
Gain and loss on disposal of short term investment is being discussed below under expenses.
Expenses
The overall analysis of the expenses is as follows:
Three months ended September 30 | 2007 | 2006 |
Operating expenses | $ 93,088 | $ 112,569 |
Stock based compensation | 78,372 | 88,563 |
Exchange loss(gains) | 81,009 | (20,262) |
Loss on disposal of short term investments | 25,974 | - |
$ 278,443 | $ 180,870 |
Operating Expenses
Travel, promotion and consulting –
Three months ended September 30 | 2007 | 2006 |
Travel, meals and entertainment | $ 22,778 | $ 27,802 |
Consulting | 13,985 | 10,572 |
$ 36,763 | $ 38,374 | |
% of operating costs | 39% | 34% |
Travel, meals and entertainment
These expenses were substantially incurred by the key consultant, Mr. Terence Robinson in visiting USA and Europe in connection with meetings with the owner/promoters of the water purification project and various other projects as detailed in the Overview section. These visits also usually covered networking with existing and potential investors of the Company. Mr. Robinson’s extensive network in the business and finance sectors in North America and Europe has been the main reason for the company’s success in raising funds, in attracting qualified consultants with minimum cash outlay and in securing suitable projects.
Expenses incurred during the quarter ended September 30, 2006 were also substantially attributed to Mr. Robinson’s efforts in meeting and exploring new opportunities and dealing with investors.
Consulting costs
Consulting fee in both the quarters ended September 30, 2007 and 2006 mainly consisted of fees paid to administrative assistant. Mr. Shah, the CEO and CFO and Mr. Robinson, the key consultant accepted shares in lieu of their fees to minimize the cash outlay of the Company.
The Company prefers to settle the fees of their consultants in shares and options in order to retain its funds for business investments purposes.
Other operating costs -
Three months ended June 30, | 2007 | 2006 |
Shareholder information | $ 37,546 | $ 43,671 |
Other | 20,004 | 30,524 |
$ 57,550 | $ 74,195 | |
% of operating costs | 61% | 66% |
Shareholder information
Shareholder information costs comprise investor and media relations fee, costs of holding annual general meeting of the shareholders and various regulatory filing fees.
Major cost for the three months ended September 30, 2007 and 2006 consisted of media relation and investor relation services provided by Current Capital Corp. under contracts dated July 1, 2004, which are being renewed automatically unless canceled in writing by a 30-day notice for a total monthly fee of US$10,000. Current Capital Corp. is a related party. Lower cost for the 2007 quarter compared to 2006 quarter was mainly due to significant gains in Canadian dollar exchange against US dollar.
Other operating costs
These costs include rent, professional fee, telephone, Internet, transfer agents fees and other general and administration costs.
The following were significant changes in other operating costs in 2007 period compared to 2006 period:
a.
Interest and bank charges decreased from $10,384 in 2006 quarter to $258 in 2007 quarter. This was owing to interest being charged in 2006 on overdrawn accounts with brokerage firms in US dollar which were not immediately covered by Canadian dollar balances. Although the Company never used margins, there were occasions when buying from one currency account being offset from funds available in other currency account. However these off sets were not matched immediately giving rise to interest charge in one and interest credit in another. We have ensured that such inconsistency did not happen during the quarter ended September 30, 2007.
b.
there was a small balance of $4,081 relating to expenses on the Louisianan gas project being written off in the quarter ended September 30, 2006. No such expense incurred during the quarter ended September 30, 2007.
c.
During the quarter ended September 30, 2007, a new cost of directors and officers insurance premium of $4,292 was incurred, which did not exist in the previous year’s quarter.
d.
effective April 1, 2007, audit fee has been accrued on a quarterly basis based on an estimated annual fee of $25,00. Thus, a fee of $6,250 was accrued for the quarter ended September 30, 2007. In fiscal 2007 and prior years, audit fee used to be accrued at the year end and not on a quarterly basis.
All other costs remained consistent.
Stock based compensation
Three months ended September 30 | 2007 | 2006 |
Stock based compensation | $ 78,372 | $ 88,563 |
Deferred stock based compensation | $ 20,004 | $ 122,168 |
Stock based compensation is made up of the Company’s common shares being issued to various consultants and directors of the Company for services provided. The Company used this method of payment mainly to conserve its cash flow for business investments purposes. This method also allows the Company to avail the services of consultants with specialized skills and knowledge in the business activities of the Company without having to deplete its limited cash flow. Value of stock compensation expense related to the part of the deferred stock compensation, which related to the services rendered during the quarter, essentially by three consultants – Mr. Kam Shah, the CEO/CFO, Mr. Terence Robinson, the key consultant and Mr. John Robinson.
During the quarters ended September 30, 2007 and September 30, 2006, no new Plans were created. However the company still has the following options and shares unalloted from previously registered Plans:
a.
One million options under 2005 Stock Option Plan and
b.
350,000 common shares under 2007 Consultant Stock Compensation Plan
Exchange Losses (gains)
Exchange losses and gains related to translation losses and gains arising from converting foreign currency balances into Canadian dollar, which is the reporting unit of currency, on consolidation.
The Company’s treasury transactions – issuance of shares, exercise of warrants and options are in US dollar. Similarly, approximately 20% cash and short term investments are in US dollars.
Canadian dollar continued to strengthen over the US dollar during the three months ended September 30, 2007. The exchange rates between the two currencies changed from 1US to CDN 1.06 at June 30, 2007 to 0.99 at September 30, 2007. This trend resulted in net exchange loss of $81,009 on translation at the quarter-end.
During the quarter ended September 30, 2006, the Company liquidated significant amount, approximately $2 million, of its cash and short term investments in US dollar and reinvested it into Canadian dollar. This change primarily resulted in the company making a small gain of $20,262 on translation due to marginal decline in the value of US dollar compared to Canadian dollar at September 30, 2006.
Gain/loss on disposal of short term investments
The company’s surplus cash are mostly invested in marketable securities while awaiting projects to participate into. These marketable securities are held for short duration and disposed of when considered appropriate. The gains and losses realised on such disposal are accounted in the income statement.
During the six months ended September 30, 2007, the company made a net gain of $75,661 which consisted of the gain of $101,635 for the first quarter ended June 30, 2007 and a loss of $25,974 for the second quarter ended September 30, 2007. Approximately $3.3 million remained invested in various marketable securities during the quarter ended September 30, 2007.
Net gain was $33,429 for six months ended September 30, 2006 of which first quarter to June 30, 2006 had a loss of $28,896 and the second quarter ended September 30, 2006 had a gain of $62,325. Average funds invested in marketable securities were $3 million.
Liquidity and Capital Resources
Working Capital
As at September 30, 2007, the Company had a net working capital of approximately $6.5 million compared to a working capital of $6.7 million as at March 31, 2007.
97% of the working capital – approximately $6.3 million – at September 30, 2007 was in the form of cash and short term investments compared to 94% at March 31, 2007.
Improvement in the liquid working capital was entirely due to change in the accounting policy under which short term investments were shown at fair value of $4.1 million instead of the carrying cost of $4 million. This change was not applied to the figures at March 31, 2007.
Cash on hand as at September 30, 2007 was $2.2 million compared to $3 million as at March 31, 2007.
Overall the company continued to have minimum debts and high amount of cash or assets which can be easily liquidated to enable the Company to take immediate advantage of any attractive business opportunity.
Operating cash flow
During the quarter ended September 30, 2007, operating activities required net cash outflow of $129,716 compared to the net cash inflow of $38,402 during the quarter ended September 30, 2006. The main operating outflow for the quarter ended September 30, 2007 resulted from exchange losses of $ 81,009. While the net inflow for the quarter ended September 30, 2006 included exchange gain of $20,262.
Operating cash requirements were met primarily through cash on hand.
Investment cash flows
A net sum of approximately $400,000 was invested in short-term marketable securities through various brokerage firms during the three months ended September 30, 2007.
The cash flow required was primarily met through cash on hand
During the three months ended September 30, 2006, approximately $ 600,000 was invested in short term marketable securities, which was met from the available cash.
Financing cash flows
During the three months ended September 30, 2007 and September 30, 2006, there was no additional financing activity.
Key Contractual Obligations
These are detailed in Note 9 – commitments and contingent liabilities to the consolidated unaudited financial statements for the six months ended September 30, 2007.
Off Balance Sheet Arrangements
At September 30, 2007 and 2006, the Company did not have any off balance sheet arrangements, including any relationships with unconsolidated entities or financial partnership to enhance perceived liquidity.
Transactions with Related Parties
Transactions with related parties are incurred in the normal course of business and are measured at the exchange amount. Related party transactions and balances have been listed in Note 10 of the consolidated unaudited financial statements for the six months ended September 30, 2007
Given below is background information on some of the key related parties and transactions with them:
1.
Current Capital Corp. (CCC). CCC is a related party in following ways –
a.
Director/President of CCC, Mr. John Robinson is a consultant with Bontan
b.
CCC provides media and investor relation services to Bontan under a consulting contract.
c.
Chief Executive and Financial Officer of Bontan is providing services to CCC as CFO.
d.
CCC and John Robinson hold significant shares, options and warrants in Bontan.
Bontan shares premises with CCC for which CCC charges rent on a quarterly s based on the actual costs and area occupied. Charges from CCC reflect actual costs and do not include any mark ups.
Another charge from CCC relates to the investor relations and media relation services provided under a contract. The charge is a fixed sum of US$10,000 per month plus taxes.
CCC also charged a finder’s fee at the rate of 10% of the gross money raised for the Company through issuance of shares and warrants under private placements. In addition,
2.
Mr. Kam Shah is a director of the Company and also provides services as chief executive and financial officer under a five-year contract. The compensation is decided by the board on an annual basis and is usually given in the form of shares and options.
3.
Mr. Terence Robinson was Chairman of the Board and Chief Executive Officer of the Company since October 1, 1991. He resigned from the Board on May 17, 2004 but continues with the Company as a key consultant. He advises the board in the matters of shareholders relations, fund raising campaigns, introduction and evaluation of investment opportunities and overall operating strategies for the Company.
Financial and derivative Instruments
We are exposed to financial market risks, credit risks on investments and foreign currency exchange rates. We do not use derivative financial instruments.
Financial Market and Credit Risk
At September 30, 2007 we had invested approximately $4 million (March 31, 2007: $3.3 million) in short-term marketable securities. About 50% of this investment is in common shares of one Canadian listed and traded corporation.
A fundamental objective of our investment policy is to obtain better than bank interest return on the surplus funds being held while we review and finalize opportunities for participation in oil and gas projects. Our investments are mostly in marketable securities quoted and traded on Canadian or US exchanges. We have consultants with extensive experience monitoring our investments on a daily basis and therefore believe that we will be able to respond on time to any major factors affecting the value of our investments and reduce or eliminate the risks of significant market price fluctuations.
Foreign Currency Risk
The majority of our expenditures is in Canadian or United States dollars. As at September 30, 2007; approximately $1.1 million – 18% - of our assets were held in US dollar. (As at March 31, 2007: $5 million or 75%). We incurred a foreign exchange loss of $81,009 for the three months ended September 30, 2007 (see Results of Operations – Exchange loss above). Due to our net United States dollar working capital position in Fiscal 2007 and the increasing value of the Canadian dollar as compared to the United States dollar, we incurred a foreign exchange loss.
Further, the Company also plans activities in different countries involving different local currencies. Exchange rates for these currencies in the future may have an adverse effect on our earnings or assets when these currencies are exchanged for Canadian dollars. The Company has not entered into forward foreign exchange contracts in an attempt to mitigate this risk. To date, losses and gains resulting from foreign exchange transactions have been included in our results of operations, since our subsidiary is fully integrated to the Company.
The Company has no debt instruments subject to interest payments, sales contracts, swaps, derivatives, or forward agreements or contracts, or inventory.
The Company has no currency or commodity contracts, and the Company does not trade in such instruments.
The Company periodically accesses the capital markets with the issuance of new shares to fund operating expenses and new projects.
Critical accounting estimates
The Company’s unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in Canada. The significant accounting policies used by the Company are same as those disclosed in note 2 to the consolidated financial statements for the year ended March 31, 2007. Certain accounting policies require that the management make appropriate decisions with respect to estimates and assumptions that affect the assets, liabilities, revenue and expenses reported by the Company. The Company’s management continually reviews its estimates based on new information, which may result in changes to current estimated amounts.
There were three major changes in the accounting policies during the six months ended September 30, 2007. These changes related to Comprehensive income, financial instruments recognition and measurement and treatment of exchange gains and losses of self-sustaining foreign operations. These changes are applied prospectively effective April 1, 2007 and are explained in detail in the unaudited consolidated financial statements for the six months ended September 30, 2007.
Disclosure Controls and Procedures
The Company maintains a set of disclosure controls and procedures designed to ensure that information required to be disclosed in filings made pursuant to Multilateral Instrument 52-109 and as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, is recorded, processed, summarized and reported within the time periods specified in the applicable regulatory bodies’ rules and forms.
Our management, including our Chief Executive Officer, who also acts as Chief Financial Officer, together with the members of our audit committee, has evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, our Chief Executive Officer has concluded that our disclosure controls and procedures were effective in relation to the level and complexity of activities in our Company as of the end of the period covered by this report.
Internal Controls over Financial Reporting
The Company has designed internal controls over financial reporting to provide reasonable assurance regarding the reliability of the company’s financial reporting and the preparation of financial statements in compliance with Canadian generally accepted accounting principles.
The Company’s Chief Executive Officer and Chief Financial Officer are also responsible for the design of internal controls required in order to provide reasonable assurance that processes used for preparation of financial statements and financial reporting for external purposes are reliable and in accordance with Canadian GAAP. They have evaluated the design of our internal controls and procedures over financial reporting as of the end of the period covered by this report and believe the design to be sufficient to provide such reasonable assurance.
Regardless of how well an internal control system is designed and operated, it can provide only reasonable, not absolute, assurance that it will prevent or detect all misstatements, due to error or fraud, from occurring in the financial statements due to the inherent limitations of any internal control system.
There were no changes in the company’s internal controls over financial reporting that occurred during the three months ended September 30, 2007 that have materially affected, or are reasonably likely to materially affect, its internal controls over financial reporting.
Current Outlook
Our long-term business plan continues to be focused on becoming a diversified natural resource company with emphasis on investing in major oil and gas exploration prospects. However, we have been trying in vain for the past several months to find suitable projects in oil and gas sector. We have therefore expanded our mandate to look for projects in any other sector so long as they meet our selection criteria and help improve our Company’s value for our shareholders.
Through our wholly-owned subsidiaries, we will continue to seek highly visible opportunities in countries around the globe that offer exciting and attractive propositions. We will seek to minimize risk by bringing in either joint venture, carried or working interest partners, depending on the size and scale of the project.
Therefore, our current business model, based on our experience with resource projects handled over the recent past and our assumptions set forth above, envisions the following key features:
a.
Preference will be given to projects that have proven revenue and are on the verge of expansion/diversification
b.
We will invest our resources in projects which involve multiple opportunities;
c.
Preference will be given to projects with other experienced partners who are involved in the project;
d. We will attempt to allocate our cash or liquidity resources to more than one project.
Public securities filings
Additional information, including the Company’s annual information form in the Form 20-F annual report is filed with the Canadian Securities Administrators at www.Sedar.com and with the United States Securities and Exchange Commission and can be viewed at www.Edgar.com.