NORTHCORE TECHNOLOGIES INC.
(Exact name of Registrant)
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302 The East Mall, Suite 300, Toronto, Ontario Canada M9B 6C7
(Address of principal executive offices)
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Form 20-F
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x
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Form 40-F
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o
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Yes
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o
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No
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x |
Exhibit
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Description
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99.1
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Press Release dated June 2, 2011
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99.2 | Interim Financial Statements | |
99.3 | Management's Discussion and Analysis | |
99.4 | CEO Certificate | |
99.5 | COO Certificate |
NORTHCORE TECHNOLOGIES INC.
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Date: June 2, 2011 | By: | /s/ Amit Monga |
Name: Amit Monga |
||
Title: Chief Executive Officer
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Northcore Technologies Inc. |
302 The East Mall, Suite 300 |
Toronto, ON M9B 6C7 |
Tel: 416 640-0400 / Fax: 416 640-0412 |
www.northcore.com |
(TSX: NTI; OTCBB: NTLNF) |
●
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Completed the analysis and design phase for the Dutch Auction / Group Purchasing platform “Discount This”;
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●
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Designed, developed and delivered a series of enhancements to the Holistic Remarketing application used by the NACCO Material Handling Group;
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Launched the Home Dealer-Owners Connect website at the Bi-Annual Home Hardware market showcase;
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Initiated a comprehensive Search Engine Optimization project for a major strategic partner; and
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●
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Closed the second tranche of an equity private placement, securing net proceeds of $713,000 through the issuance of common shares and warrants.
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Northcore Technologies Inc.
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||||||||||||
Consolidated Statements of Financial Position
|
||||||||||||
(expressed in thousands of Canadian dollars)
|
||||||||||||
(IFRS, Unaudited)
|
||||||||||||
March 31,
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March 31,
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December 31,
|
||||||||||
2011
|
2011
|
2010
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||||||||||
($C)
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($US)
|
($C)
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||||||||||
translated
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||||||||||||
into US$ at
|
||||||||||||
Cdn$ 0.9717
|
||||||||||||
for
|
||||||||||||
convenience
|
||||||||||||
Cash
|
$ | 376 | $ | 387 | $ | 51 | ||||||
Other current assets
|
194 | 199 | 187 | |||||||||
Non-current assets
|
25 | 26 | 46 | |||||||||
Total assets
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$ | 595 | $ | 612 | $ | 284 | ||||||
Accounts payable and accrued liabilities
|
$ | 595 | $ | 612 | $ | 619 | ||||||
Deferred revenue
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69 | 71 | 3 | |||||||||
Current portion of long term debts
|
956 | 984 | 1,031 | |||||||||
Non-current portion of long term debts
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215 | 221 | 204 | |||||||||
Shareholders' deficiency
|
(1,240 | ) | (1,276 | ) | (1,573 | ) | ||||||
Total liabilities and shareholders' deficiency
|
$ | 595 | $ | 612 | $ | 284 |
Northcore Technologies Inc.
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||||||||||||
Consolidated Statements of Operations and Comprehensive Loss
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||||||||||||
(expressed in thousands of Canadian dollars, except per share amounts)
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||||||||||||
(IFRS, Unaudited)
|
||||||||||||
Three Months Ended
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||||||||||||
March 31,
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||||||||||||
2011
|
2011
|
2010
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||||||||||
($C)
|
($US)
|
($C)
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||||||||||
translated
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||||||||||||
into US$ at
|
||||||||||||
Cdn $0.9717
|
||||||||||||
for
|
||||||||||||
convenience
|
||||||||||||
Revenues
|
$ | 183 | $ | 188 | $ | 150 | ||||||
Expenses:
|
||||||||||||
General and administrative
|
372 | 383 | 387 | |||||||||
Customer service and technology
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181 | 186 | 192 | |||||||||
Sales and marketing
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69 | 71 | 51 | |||||||||
Stock-based compensation
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83 | 86 | 193 | |||||||||
Depreciation
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6 | 6 | 6 | |||||||||
Total operating expenses
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711 | 732 | 829 | |||||||||
Loss from operations before the under-noted
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(528 | ) | (544 | ) | (679 | ) | ||||||
Interest expense:
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||||||||||||
Interest on notes payable and secured subordinated notes
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45 | 46 | 29 | |||||||||
Accretion of secured subordinated notes
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36 | 37 | 26 | |||||||||
Total interest expense
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81 | 83 | 55 | |||||||||
Other income:
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||||||||||||
Income from GE Asset Manager, LLC
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35 | 36 | 21 | |||||||||
Loss and comprehensive loss for the period
|
$ | (574 | ) | $ | (591 | ) | $ | (713 | ) | |||
Loss per share, basic and diluted
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$ | (0.003 | ) | $ | (0.003 | ) | $ | (0.004 | ) | |||
Weighted average number of shares outstanding
basic and diluted (000's)
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177,825 | 177,825 | 161,035 |
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in thousands of Canadian dollars) (Unaudited)
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|||||||
March 31,
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December 31,
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January 1,
|
|||||
2011
|
2010
|
2010
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|||||
(Note 13)
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(Note 13)
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||||||
ASSETS
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|||||||
CURRENT
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|||||||
Cash
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$ 376
|
$ 51
|
$ 210
|
||||
Accounts receivable
|
162
|
151
|
214
|
||||
Deposits and prepaid expenses
|
32
|
36
|
35
|
||||
570
|
238
|
459
|
|||||
INVESTMENT IN GE ASSET MANAGER, LLC (Note 4)
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-
|
15
|
31
|
||||
INVESTMENT IN SOUTHCORE (Note 4)
|
-
|
-
|
544
|
||||
CAPITAL ASSETS
|
25
|
31
|
47
|
||||
$ 595
|
$ 284
|
$ 1,081
|
|||||
LIABILITIES
|
|||||||
CURRENT
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|||||||
Accounts payable
|
$ 385
|
$ 400
|
$ 331
|
||||
Accrued liabilities
|
210
|
219
|
161
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||||
Deferred revenue
|
69
|
3
|
3
|
||||
Notes payable (Note 5)
|
430
|
530
|
156
|
||||
Current portion of secured subordinated notes (Note 6)
|
526
|
501
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-
|
||||
1,620
|
1,653
|
651
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|||||
SECURED SUBORDINATED NOTES (Note 6)
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215
|
204
|
658
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||||
1,835
|
1,857
|
1,309
|
|||||
SHAREHOLDERS’ DEFICIENCY
|
|||||||
Share capital (Note 7)
|
111,375
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110,767
|
110,240
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||||
Contributed surplus
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3,462
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3,462
|
3,071
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||||
Warrants (Note 8)
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965
|
834
|
490
|
||||
Stock options (Note 9)
|
2,009
|
1,949
|
1,435
|
||||
Other options (Note 7)
|
108
|
-
|
-
|
||||
Conversion feature on secured subordinated notes (Note 6)
|
458
|
458
|
547
|
||||
Deficit
|
(119,617)
|
(119,043)
|
(116,011)
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||||
(1,240)
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(1,573)
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(228)
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|||||
$ 595
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$ 284
|
$ 1,081
|
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(in thousands of Canadian dollars, except per share amounts) (Unaudited)
|
|||||||
Three Months Ended
March 31,
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|||||||
2011
|
2010
|
||||||
(Note 13)
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|||||||
Revenues (Note 10)
|
$ 183
|
$ 150
|
|||||
Operating expenses:
|
|||||||
General and administrative
|
372
|
387
|
|||||
Customer service and technology
|
181
|
192
|
|||||
Sales and marketing
|
69
|
51
|
|||||
Stock-based compensation
|
83
|
193
|
|||||
Depreciation
|
6
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6
|
|||||
Total operating expenses
|
711
|
829
|
|||||
Loss from operations before the under-noted
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(528)
|
(679)
|
|||||
Interest expense:
|
|||||||
Interest on notes payable and secured subordinated notes
|
45
|
29
|
|||||
Accretion of secured subordinated notes (Note 6)
|
36
|
26
|
|||||
Total interest expense
|
81
|
55
|
|||||
Other income:
|
|||||||
Income from GE Asset Manager, LLC (Note 4)
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35
|
21
|
|||||
LOSS AND COMPREHENSIVE LOSS FOR THE PERIOD
|
$ (574)
|
$ (713)
|
|||||
LOSS PER SHARE, BASIC AND DILUTED
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$ (0.003)
|
$ (0.004)
|
|||||
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING, BASIC AND DILUTED (000’s)
|
177,825
|
161,035
|
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(in thousands of Canadian dollars) (Unaudited)
|
|||||||||||
Share Capital
|
Contributed Surplus
|
Warrants
|
Stock Options
|
Other
Options
|
Conversion Feature on Secured Notes
|
Deficit
|
Total
|
||||
Opening balance - January 1, 2011 (Note 13)
|
$110,767
|
$ 3,462
|
$ 834
|
$ 1,949
|
$ -
|
$ 458
|
$ (119,043)
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$ (1,573)
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|||
Changes:
|
|||||||||||
Equity private placement
|
456
|
-
|
149
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-
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108
|
-
|
-
|
713
|
|||
Exercise of warrants
|
93
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-
|
(18)
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-
|
-
|
-
|
-
|
75
|
|||
Stock options expense
|
-
|
-
|
-
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83
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-
|
-
|
-
|
83
|
|||
Exercise of stock options
|
59
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-
|
-
|
(23)
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-
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-
|
-
|
36
|
|||
Loss for the period
|
-
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-
|
-
|
-
|
-
|
-
|
(574)
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(574)
|
|||
Closing balance - March 31, 2011
|
$111,375
|
$ 3,462
|
$ 965
|
$ 2,009
|
$ 108
|
$ 458
|
$ (119,617)
|
$ (1,240)
|
Share Capital
|
Contributed Surplus
|
Warrants
|
Stock Options
|
Other Options
|
Conversion Feature on Secured Notes
|
Deficit
|
Total
|
|||
Opening balance - January 1, 2010 (Note 13)
|
$110,240
|
$ 3,071
|
$ 490
|
$ 1,435
|
$ -
|
$ 547
|
$ (116,011)
|
$ (228)
|
||
Changes:
|
||||||||||
Conversion of notes
|
117
|
-
|
41
|
-
|
-
|
(89)
|
-
|
69
|
||
Exercise of warrants
|
170
|
-
|
(27)
|
-
|
-
|
-
|
-
|
143
|
||
Payment of interest
|
12
|
-
|
-
|
-
|
-
|
-
|
-
|
12
|
||
Stock options expense
|
-
|
-
|
-
|
193
|
-
|
-
|
-
|
193
|
||
Loss for the period
|
-
|
-
|
-
|
-
|
-
|
-
|
(713)
|
(713)
|
||
Closing balance - March 31, 2010 (Note 13)
|
$110,539
|
$ 3,071
|
$ 504
|
$ 1,628
|
$ -
|
$ 458
|
$ (116,724)
|
$ (524)
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||
(in thousands of Canadian dollars) (Unaudited)
|
||||||||
Three Months Ended
March 31,
|
||||||||
2011
|
2010
|
|||||||
(Note 13)
|
||||||||
NET INFLOW (OUTFLOW) OF CASH RELATED TO THE FOLLOWING ACTIVITIES
|
||||||||
OPERATING
|
||||||||
Loss for the period
|
$ | (574 | ) | $ | (713 | ) | ||
Items not affecting cash:
|
||||||||
Stock-based compensation
|
83 | 193 | ||||||
Depreciation
|
6 | 6 | ||||||
Accretion of secured subordinated notes
|
36 | 26 | ||||||
Income from investments
|
(35 | ) | (21 | ) | ||||
(484 | ) | (509 | ) | |||||
Changes in non-cash operating working capital (Note 12)
|
35 | 333 | ||||||
(449 | ) | (176 | ) | |||||
INVESTING
|
||||||||
Cash distribution from investment in GEAM, LLC (Note 4)
|
50 | 24 | ||||||
50 | 24 | |||||||
FINANCING
|
||||||||
Repayment of notes payable (Note 5 (b))
|
(100 | ) | - | |||||
Warrants exercised (Note 8 (b))
|
75 | 143 | ||||||
Stock options exercised (Note 9 (c))
|
36 | - | ||||||
Issuance of common shares and warrants (Note 7 (c))
|
838 | - | ||||||
Share issuance costs (Note 7 (c))
|
(125 | ) | - | |||||
724 | 143 | |||||||
NET CASH INFLOW (OUTFLOW) DURING THE PERIOD
|
325 | (9 | ) | |||||
CASH, BEGINNING OF PERIOD
|
51 | 210 | ||||||
CASH, END OF PERIOD
|
$ | 376 | $ | 201 | ||||
SUPPLEMENTAL DISCLOSURE OF CASH PAYMENTS
|
||||||||
Interest paid | $ | 57 | $ | 10 | ||||
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES –See Note 12 |
1.
|
SIGNIFICANT ACCOUNTING POLICIES
|
●
|
Loans and Borrowings
|
●
|
Convertible Debentures
|
2.
|
GOING CONCERN
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|
These unaudited interim consolidated financial statements do not include adjustments or disclosures that may result from the Company’s inability to continue as a going concern. If the going concern assumption were not appropriate for these unaudited interim consolidated financial statements, then adjustments would be necessary in the carrying values of assets and liabilities, the reported net losses and the financial position classifications used.
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The continued existence beyond March 31, 2011 is dependent on the Company’s ability to increase revenue from existing products and services, and to expand the scope of its product offering which entails a combination of internally developed software and business ventures with third parties, and to raise additional financing.
|
3.
|
TRANSACTIONS WITH RELATED PARTIES
|
4.
|
INVESTMENTS IN GE ASSET MANAGER (GEAM), LLC AND SOUTHCORE
|
5.
|
NOTES PAYABLE
|
a)
|
The Series H notes payable matured on December 31, 2009 and were secured as per the Series H security terms; however, the final installment has not been remitted and the Company is currently in negotiation with the debt holders over the timing of the final settlement amount of $30,000.
|
b)
|
On October 28, 2010, the Company received an operating loan from a private institution in the amount of $500,000. The loan bears interest at 18.75 percent, matures in six months from the closing date and is secured by a general security agreement and common shares pledged by certain shareholders of the Company. The balance outstanding as at December 31, 2010 is $500,000.
|
6.
|
SECURED SUBORDINATED NOTES
|
a)
|
The following summarizes the face and carrying values of the secured subordinated notes.
|
Secured Subordinated Notes
|
March 31, 2011
|
December 31, 2010
|
||||||||||||||
Face Value
|
Carrying Value
|
Face Value
|
Carrying Value
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Series N
|
$ | 600 | $ | 526 | $ | 600 | $ | 501 | ||||||||
Series L
|
360 | 215 | 360 | 204 | ||||||||||||
Closing balance
|
$ | 960 | $ | 741 | $ | 960 | $ | 705 | ||||||||
Current portion of notes
|
$ | 600 | $ | 526 | $ | 600 | $ | 501 | ||||||||
Long-term portion of notes
|
$ | 360 | $ | 215 | $ | 360 | $ | 204 |
b)
|
As at March 31, 2011, accrued liabilities include $51,000 (December 31, 2010 - $62,000) of unpaid interest payable relating to the secured subordinated notes.
|
c)
|
The following summarizes the face and carrying values of the liability and the equity components of the secured subordinated notes.
|
Three Months Ended
March 31, 2011
|
|||
Secured Subordinated Notes (Liability Component)
|
Face Value
|
Carrying Value
|
|
(in thousands)
|
|||
Opening balance – January 1, 2011
|
$ 960
|
$ 705
|
|
Accreted (non-cash) interest
|
-
|
36
|
|
Closing balance – March 31, 2011
|
$ 960
|
$ 741
|
|
|
Three Months Ended
March 31, 2011
|
||
Conversion Features on Secured Subordinated Notes including Conversion Feature of attached Warrants
|
Common Shares Issuable
|
Carrying Value
|
|
(in thousands)
|
|||
Opening balance – January 1, 2011
|
19,200
|
$ 458
|
|
No transactions during the quarter
|
-
|
-
|
|
Closing balance – March 31, 2011
|
19,200
|
$ 458
|
7.
|
SHARE CAPITAL
|
a)
|
Authorized
|
b)
|
Outstanding Common Shares
|
|
March 31, 2011
|
|
Number
|
Amount
|
|
(in thousands of shares and dollars)
|
||
Opening balance – January 1, 2011
|
172,170
|
$ 110,767
|
Equity private placement (Note 7 (c))
|
10,478
|
456
|
Warrants exercised (Note 8 (b))
|
500
|
93
|
Stock options exercised (Note 9 (c))
|
300
|
59
|
Closing balance – March 31, 2011
|
183,448
|
$ 111,375
|
c)
|
Equity Private Placement
|
8.
|
WARRANTS
|
a)
|
The following table summarizes the transactions relating to outstanding warrants.
|
|
March 31, 2011
|
||
Number
|
Amount
|
||
(in thousands of warrants and dollars)
|
|||
Opening balance – January 1, 2011
|
15,818
|
$ 834
|
|
Equity private placement (Note 7 (c))
|
10,478
|
149
|
|
Warrants exercised (Note 8 (b))
|
(500)
|
(18)
|
|
Closing balance – March 31, 2011
|
25,796
|
$ 965
|
b)
|
Warrants Exercised
|
9.
|
STOCK OPTIONS
|
a)
|
As at March 31, 2011, 10,645,000 stock options were outstanding to employees and directors of which 7,385,000 were exercisable. As at December 31, 2010, 10,946,000 stock options were outstanding to employees and directors, of which 6,446,000 were exercisable.
|
b)
|
The Company records compensation expense for stock options granted to employees and directors based on the fair value method of accounting. For the three months ended March 31, 2011 and March 31, 2010, the employee stock option expense was $83,000 and $193,000, respectively.
|
c)
|
During the quarter ended March 31, 2011, total proceeds of $36,000 were realized from the exercise of 300,000 stock options (book value of $23,000) at an average exercise price of $0.12.
|
10.
|
REVENUES
|
Three Months Ended
March 31,
|
||||||||
2011
|
2010
|
|||||||
(in thousands)
|
||||||||
Services
|
$ | 124 | $ | 81 | ||||
Hosting fees
|
59 | 56 | ||||||
Royalty fees
|
- | 13 | ||||||
$ | 183 | $ | 150 |
11.
|
FINANCIAL RISK FACTORS
|
a)
|
Credit Risk
|
March 31, 2011
|
December 31, 2010
|
|||
(in thousands)
|
||||
Current
|
$ 108
|
$ 93
|
||
Past due (61-120 days)
|
42
|
45
|
||
Past due (> 120 days)
|
12
|
12
|
||
|
$ 162
|
$ 150
|
b)
|
Liquidity Risk
|
12.
|
SUPPLEMENTAL CASH FLOWS INFORMATION
|
Three Months Ended
March 31,
|
||||||||
2011
|
2010
|
|||||||
(in thousands)
|
||||||||
Accounts receivable
|
$ | (11 | ) | $ | 116 | |||
Deposits and prepaid expenses
|
4 | 11 | ||||||
Accounts payable
|
(15 | ) | (29 | ) | ||||
Accrued liabilities
|
(9 | ) | 82 | |||||
Deferred revenue
|
66 | 153 | ||||||
$ | 35 | $ | 333 |
|
Three Months Ended
March 31,
|
|||||||
2011
|
2010
|
|||||||
(in thousands)
|
||||||||
Issuance of common shares in settlement of interest payments
|
$ | - | $ | 12 |
13.
|
TRANSITION TO IFRS
|
·
|
Share-Based Payments
|
·
|
Financial Instruments
|
IFRS OPENING CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at January 1, 2010
(in thousands of Canadian dollars)
|
||||||||
IFRS ADJUSTMENTS
|
||||||||
Previous GAAP
|
Stock-based
Compensation
|
Investment in
GEAM, LLC
|
Secured
Subordinated
Notes
|
IFRS
|
||||
(Note 13 (a))
|
(Note 13 (b))
|
(Note 13 (c))
|
||||||
ASSETS
|
||||||||
Cash
|
$ 226
|
$ -
|
$ (16)
|
$ -
|
$ 210
|
|||
Accounts receivable
|
253
|
-
|
(39)
|
-
|
214
|
|||
Deposits and prepaid expenses
|
35
|
-
|
-
|
-
|
35
|
|||
514
|
-
|
(55)
|
-
|
459
|
||||
INVESTMENT IN SOUTHCORE
|
544
|
-
|
-
|
-
|
544
|
|||
INVESTMENT IN GEAM, LLC
|
-
|
-
|
31
|
-
|
31
|
|||
CAPITAL ASSETS
|
47
|
-
|
-
|
-
|
47
|
|||
$ 1,105
|
$ -
|
$ (24)
|
$ -
|
$ 1,081
|
||||
LIABILITIES
|
||||||||
Accounts payable
|
$ 331
|
$ -
|
$ -
|
$ -
|
$ 331
|
|||
Accrued liabilities
|
161
|
-
|
-
|
-
|
161
|
|||
Deferred revenue
|
27
|
-
|
(24)
|
-
|
3
|
|||
Notes payable
|
156
|
-
|
-
|
-
|
156
|
|||
675
|
-
|
(24)
|
-
|
651
|
||||
SECURED SUBORDINATED NOTES
|
446
|
-
|
-
|
212
|
658
|
|||
1,121
|
-
|
(24)
|
212
|
1,309
|
||||
SHAREHOLDERS’ DEFICIENCY
|
||||||||
Share capital
|
110,238
|
-
|
-
|
2
|
110,240
|
|||
Contributed surplus
|
3,071
|
-
|
-
|
-
|
3,071
|
|||
Warrants
|
492
|
-
|
-
|
(2)
|
490
|
|||
Stock options
|
1,425
|
10
|
-
|
-
|
1,435
|
|||
Conversion feature on secured subordinated notes
|
779
|
-
|
-
|
(232)
|
547
|
|||
Deficit
|
(116,021)
|
(10)
|
-
|
20
|
(116,011)
|
|||
(16)
|
-
|
-
|
(212)
|
(228)
|
||||
$ 1,105
|
$ -
|
$ (24)
|
$ -
|
$ 1,081
|
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at March 31, 2010
(in thousands of Canadian dollars)
|
||||||||
IFRS ADJUSTMENTS
|
||||||||
Previous GAAP
|
Stock-based
Compensation
|
Investment in
GEAM, LLC
|
Secured
Subordinated
Notes
|
IFRS
|
||||
(Note 13 (a))
|
(Note 13 (b))
|
(Note 13 (c))
|
||||||
ASSETS
|
||||||||
Cash
|
$ 230
|
$ -
|
$ (29)
|
$ -
|
$ 201
|
|||
Accounts receivable
|
111
|
-
|
(13)
|
-
|
98
|
|||
Deposits and prepaid expenses
|
24
|
-
|
-
|
-
|
24
|
|||
365
|
-
|
(42)
|
-
|
323
|
||||
INVESTMENT IN SOUTHCORE
|
544
|
-
|
-
|
-
|
544
|
|||
INVESTMENT IN GEAM, LLC
|
-
|
-
|
28
|
-
|
28
|
|||
CAPITAL ASSETS
|
41
|
-
|
-
|
-
|
41
|
|||
$ 950
|
$ -
|
$ (14)
|
$ -
|
$ 936
|
||||
LIABILITIES
|
||||||||
Accounts payable
|
$ 302
|
$ -
|
$ -
|
$ -
|
$ 302
|
|||
Accrued liabilities
|
225
|
-
|
-
|
-
|
225
|
|||
Deferred revenue
|
171
|
-
|
(14)
|
-
|
157
|
|||
Notes payable
|
161
|
-
|
-
|
-
|
161
|
|||
859
|
-
|
(14)
|
-
|
845
|
||||
SECURED SUBORDINATED NOTES
|
433
|
-
|
-
|
182
|
615
|
|||
1,292
|
-
|
(14)
|
182
|
1,460
|
||||
SHAREHOLDERS’ DEFICIENCY
|
||||||||
Share capital
|
110,534
|
-
|
-
|
5
|
110,539
|
|||
Contributed surplus
|
3,071
|
-
|
-
|
-
|
3,071
|
|||
Warrants
|
509
|
-
|
-
|
(5)
|
504
|
|||
Stock options
|
1,510
|
118
|
-
|
-
|
1,628
|
|||
Conversion feature on secured subordinated notes
|
667
|
-
|
-
|
(209)
|
458
|
|||
Deficit
|
(116,633)
|
(118)
|
-
|
27
|
(116,724)
|
|||
(342)
|
-
|
-
|
(182)
|
(524)
|
||||
$ 950
|
$ -
|
$ (14)
|
$ -
|
$ 936
|
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at December 31, 2010
(in thousands of Canadian dollars)
|
|||||||||
IFRS ADJUSTMENTS
|
|||||||||
Previous GAAP
|
Stock-based
Compensation
|
Investment in
GEAM, LLC
|
Secured
Subordinated
Notes
|
IFRS
|
|||||
(Note 13 (a))
|
(Note 13 (b))
|
(Note 13 (c))
|
|||||||
ASSETS
|
|||||||||
Cash
|
$ 90
|
$ -
|
$ (39)
|
$ -
|
$ 51
|
||||
Accounts receivable
|
157
|
-
|
(6)
|
-
|
151
|
||||
Deposits and prepaid expenses
|
36
|
-
|
-
|
-
|
36
|
||||
283
|
-
|
(45)
|
-
|
238
|
|||||
INVESTMENT IN GEAM, LLC
|
-
|
-
|
15
|
-
|
15
|
||||
CAPITAL ASSETS
|
31
|
-
|
-
|
-
|
31
|
||||
$ 314
|
$ -
|
$ (30)
|
$ -
|
$ 284
|
|||||
LIABILITIES
|
|||||||||
Accounts payable
|
$ 404
|
$ -
|
$ (4)
|
$ -
|
$ 400
|
||||
Accrued liabilities
|
219
|
-
|
-
|
-
|
219
|
||||
Deferred revenue
|
29
|
-
|
(26)
|
-
|
3
|
||||
Notes payable
|
530
|
-
|
-
|
-
|
530
|
||||
Current portion of secured subordinated notes
|
412
|
-
|
-
|
89
|
501
|
||||
1,594
|
-
|
(30)
|
89
|
1,653
|
|||||
SECURED SUBORDINATED NOTES
|
149
|
-
|
-
|
55
|
204
|
||||
1,743
|
-
|
(30)
|
144
|
1,857
|
|||||
SHAREHOLDERS’ DEFICIENCY
|
|||||||||
Share capital
|
110,762
|
-
|
-
|
5
|
110,767
|
||||
Contributed surplus
|
3,462
|
-
|
-
|
-
|
3,462
|
||||
Warrants
|
839
|
-
|
-
|
(5)
|
834
|
||||
Stock options
|
1,780
|
169
|
-
|
-
|
1,949
|
||||
Conversion feature on secured subordinated notes
|
667
|
-
|
-
|
(209)
|
458
|
||||
Deficit
|
(118,939)
|
(169)
|
-
|
(65)
|
(119,043)
|
||||
(1,429)
|
-
|
(144)
|
(1,573)
|
||||||
$ 314
|
$ -
|
$ (30)
|
$ -
|
$ 284
|
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
Three Months Ended March 31, 2010
(in thousands of Canadian dollars, except per share amounts)
|
|||||||
IFRS ADJUSTMENTS
|
|||||||
Previous GAAP
|
Stock-based
Compensation
|
Investment in
GEAM, LLC
|
Secured
Subordinated
Notes
|
IFRS
|
|||
(Note 13 (a))
|
(Note 13 (b))
|
(Note 13 (c))
|
|||||
Revenues
|
$ 172
|
$ -
|
$ (22)
|
$ -
|
$ 150
|
||
Operating expenses:
|
|||||||
General and administrative
|
388
|
-
|
(1)
|
-
|
387
|
||
Customer service and technology
|
192
|
-
|
-
|
-
|
192
|
||
Sales and marketing
|
51
|
-
|
-
|
-
|
51
|
||
Stock-based compensation
|
85
|
108
|
-
|
-
|
193
|
||
Depreciation
|
6
|
-
|
-
|
-
|
6
|
||
Total operating expenses
|
722
|
108
|
(1)
|
-
|
829
|
||
Loss from operations before the under-noted
|
(550)
|
(108)
|
(21)
|
-
|
(679)
|
||
Interest expense:
|
|||||||
Cash interest expense
|
29
|
-
|
-
|
-
|
29
|
||
Accretion of secured subordinated notes
|
33
|
-
|
-
|
(7)
|
26
|
||
Total interest expense
|
62
|
-
|
-
|
(7)
|
55
|
||
Other income:
|
|||||||
Income from GEAM, LLC
|
-
|
-
|
21
|
-
|
21
|
||
Total other expenses
|
-
|
-
|
21
|
-
|
21
|
||
LOSS AND COMPREHENSIVE LOSS FOR THE PERIOD
|
$ (612)
|
$ (108)
|
$ -
|
$ 7
|
$ (713)
|
||
LOSS PER SHARE, BASIC AND DILUTED
|
$ (0.004)
|
$ (0.004)
|
|||||
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING, BASIC AND DILUTED (000’s)
|
161,035
|
161,035
|
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
Twelve Months Ended December 31, 2010
(in thousands of Canadian dollars, except per share amounts)
|
||||||
IFRS ADJUSTMENTS
|
||||||
Previous GAAP
|
Stock-based
Compensation
|
Investment in
GEAM, LLC
|
Secured
Subordinated
Notes
|
IFRS
|
||
(Note 13 (a))
|
(Note 13 (b))
|
(Note 13 (c))
|
||||
Revenues
|
$ 636
|
$ -
|
$ (54)
|
$ -
|
$ 582
|
|
Operating expenses:
|
||||||
General and administrative
|
1,451
|
-
|
(11)
|
-
|
1,440
|
|
Customer service and technology
|
734
|
-
|
-
|
-
|
734
|
|
Sales and marketing
|
188
|
-
|
-
|
-
|
188
|
|
Stock-based compensation
|
358
|
159
|
-
|
-
|
517
|
|
Depreciation
|
22
|
-
|
-
|
-
|
22
|
|
Total operating expenses
|
2,753
|
159
|
(11)
|
-
|
2,901
|
|
Loss from operations before the under-noted
|
(2,117)
|
(159)
|
(43)
|
-
|
(2,319)
|
|
Interest expense:
|
||||||
Cash interest expense
|
154
|
-
|
-
|
-
|
154
|
|
Accretion of secured subordinated notes
|
160
|
-
|
-
|
(45)
|
115
|
|
Total interest expense
|
314
|
-
|
-
|
(45)
|
269
|
|
Other expenses (income):
|
||||||
Income from investments
|
-
|
-
|
(43)
|
-
|
(43)
|
|
Gain on settlement of debt
|
(57)
|
-
|
-
|
-
|
(57)
|
|
Provision for impaired investment
|
544
|
-
|
-
|
-
|
544
|
|
Total other expenses
|
487
|
-
|
(43)
|
-
|
444
|
|
LOSS AND COMPREHENSIVE LOSS FOR THE YEAR
|
$ (2,918)
|
$ (159)
|
$ -
|
$ 45
|
$ 3,032
|
|
LOSS PER SHARE, BASIC AND DILUTED
|
$ (0.018)
|
$ (0.019)
|
||||
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING, BASIC AND DILUTED (000’s)
|
162,899
|
162,899
|
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
As at March 31, 2010
(in thousands of Canadian dollars)
|
|||||||||
Share
Capital
|
Contributed
Surplus
|
Warrants
|
Stock
Options
|
Conversion
Feature on
Secured
Notes
|
Deficit
|
Total
|
|||
Previous GAAP
|
$ 110,534
|
$ 3,071
|
$ 509
|
$ 1,510
|
$ 667
|
$(116,633)
|
$ (342)
|
||
Opening retained earnings adjustment
|
-
|
-
|
-
|
10
|
-
|
(10)
|
-
|
||
Stock-based Compensation (Note 13 (a))
|
-
|
-
|
-
|
108
|
-
|
(108)
|
-
|
||
Investment in GEAM, LLC (Note 13 (b))
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||
Secured Subordinated Notes (Note 13 (c))
|
5
|
-
|
(5)
|
-
|
(209)
|
27
|
(182)
|
||
IFRS
|
$110,539
|
$ 3,071
|
$ 504
|
$ 1,628
|
$ 458
|
$(116,724)
|
$ (524)
|
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
As at December 31, 2010
(in thousands of Canadian dollars)
|
|||||||||
Share
Capital
|
Contributed
Surplus
|
Warrants
|
Stock
Options
|
Conversion
Feature on
Secured
Notes
|
Deficit
|
Total
|
|||
Previous GAAP
|
$ 110,762
|
$ 3,462
|
$ 839
|
$ 1,780
|
$ 667
|
$(118,939)
|
$ (1,429)
|
||
Opening retained earnings adjustment
|
-
|
-
|
-
|
10
|
-
|
(10)
|
-
|
||
Stock-based Compensation (Note 13 (a))
|
-
|
-
|
-
|
159
|
-
|
(159)
|
-
|
||
Investment in GEAM, LLC (Note 13 (b))
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||
Secured Subordinated Notes (Note 13 (c))
|
5
|
-
|
(5)
|
-
|
(209)
|
65
|
(144)
|
||
IFRS
|
$110,767
|
$ 3,462
|
$ 834
|
$ 1,949
|
$ 458
|
$(119,043)
|
$ (1,573)
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended March 31, 2010
(in thousands of Canadian dollars)
|
IFRS ADJUSTMENTS
|
||||||
Previous
GAAP
|
Stock-based
Compensation
|
Investment in
GEAM, LLC
|
Secured
Subordinated
Notes
|
IFRS
|
||
NET INFLOW (OUTFLOW) OF CASH RELATED TO THE FOLLOWING ACTIVITIES
|
(Note 13 (a))
|
(Note 13 (b))
|
(Note 13 (c))
|
|||
OPERATING
|
||||||
Loss for the period
|
$ (612)
|
$ (108)
|
$ -
|
$ 7
|
$ (713)
|
|
Items not affecting cash:
|
||||||
Stock-based compensation
|
85
|
108
|
-
|
-
|
193
|
|
Depreciation
|
6
|
-
|
-
|
-
|
6
|
|
Accretion of secured subordinated notes
|
33
|
-
|
-
|
(7)
|
26
|
|
Income from investments
|
-
|
-
|
(21)
|
-
|
(21)
|
|
(488)
|
-
|
(21)
|
-
|
(509)
|
||
Changes in non-cash operating working capital
|
349
|
-
|
(16)
|
-
|
333
|
|
(139)
|
-
|
(16)
|
-
|
(176)
|
||
INVESTING
|
||||||
Cash distributions from investment in GEAM, LLC
|
-
|
-
|
24
|
-
|
24
|
|
FINANCING
|
||||||
Warrants exercised
|
143
|
-
|
-
|
-
|
143
|
|
NET CASH INFLOW (OUTFLOW) DURING THE PERIOD
|
4
|
-
|
(13)
|
-
|
(9)
|
|
CASH, BEGINNING OF PERIOD
|
226
|
-
|
(16)
|
-
|
210
|
|
CASH, END OF PERIOD
|
$ 230
|
$ -
|
$ (29)
|
$ -
|
$ 201
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
Twelve Months Ended December 31, 2010
(in thousands of Canadian dollars)
|
IFRS ADJUSTMENTS
|
|||||||
Previous
GAAP
|
Stock-based
Compensation
|
Investment in
GEAM, LLC
|
Secured
Subordinated
Notes
|
IFRS
|
|||
NET INFLOW (OUTFLOW) OF CASH RELATED TO THE FOLLOWING ACTIVITIES
|
(Note 13 (a))
|
(Note 13 (b))
|
(Note 13 (c))
|
||||
OPERATING
|
|||||||
Loss for the year
|
$ (2,918)
|
$ (159)
|
$ -
|
$ 45
|
$ (3,032)
|
||
Items not affecting cash:
|
|||||||
Stock-based compensation
|
358
|
159
|
-
|
-
|
517
|
||
Depreciation
|
22
|
-
|
-
|
-
|
22
|
||
Accretion of secured subordinated notes
|
160
|
-
|
-
|
(45)
|
115
|
||
Gain on settlement of debt
|
(57)
|
-
|
-
|
-
|
(57)
|
||
Provision for impaired investment
|
544
|
-
|
-
|
-
|
544
|
||
Income from investments
|
-
|
-
|
(43)
|
-
|
(43)
|
||
(1,891)
|
-
|
(43)
|
-
|
(1,934)
|
|||
Changes in non-cash operating working capital
|
314
|
-
|
(40)
|
-
|
274
|
||
(1,577)
|
-
|
(83)
|
-
|
(1,660)
|
|||
INVESTING
|
|||||||
Investment in GEAM, LLC
|
-
|
-
|
60
|
-
|
60
|
||
Capital assets
|
(6)
|
-
|
-
|
-
|
(6)
|
||
(6)
|
-
|
60
|
-
|
54
|
|||
FINANCING
|
|||||||
Repayment of notes payable
|
(465)
|
-
|
-
|
-
|
(465)
|
||
Proceeds from issuance of notes payable
|
859
|
-
|
-
|
-
|
859
|
||
Warrants exercised
|
170
|
-
|
-
|
-
|
170
|
||
Options exercised
|
4
|
-
|
-
|
-
|
4
|
||
Issuance of common shares and
warrants
|
1,008
|
-
|
-
|
-
|
1,008
|
||
Share issuance costs
|
(129)
|
-
|
-
|
-
|
(129)
|
||
1,447
|
-
|
-
|
-
|
1,447
|
|||
NET CASH OUTFLOW DURING THE YEAR
|
(136)
|
-
|
(23)
|
-
|
(159)
|
||
CASH, BEGINNING OF YEAR
|
226
|
-
|
(16)
|
-
|
210
|
||
CASH, END OF YEAR
|
$ 90
|
$ -
|
$ (39)
|
$ -
|
$ 51
|
a)
|
Stock-Based Compensation
|
b)
|
Investment in GEAM, LLC
|
●
|
Investments are initially recognized at cost;
|
●
|
The Company’s share of post-acquisition profits or losses is recognized in profit or loss and is adjusted against the carrying amount of the investments;
|
●
|
The Company’s share of cash distribution is adjusted against the carrying amount of the investments;
|
●
|
When the Company’s share of losses equals or exceeds its interest in the investee, the Company does not recognize further losses, unless it has incurred obligations or made payments on behalf of the investee; and
|
●
|
Gains on transactions between the Company and its equity method investees are eliminated to the extent of the Company’s interest in these entities and losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred.
|
c)
|
Secured Subordinated Notes
|
14.
|
SUBSEQUENT EVENTS
|
CORPORATE OFFICE
Northcore Technologies Inc.
302 The East Mall, Suite 300
Toronto, Ontario M9B 6C7
1 888 287 7467
AUDITORS
Collins Barrow Toronto LLP
390 Bay Street, Suite 1900
Toronto, Ontario, M5H 2Y2
ADDITIONAL SHAREHOLDER INFORMATION
Website:
www.northcore.com
Email:
investor-relations@northcore.com
|
SHARES OUTSTANDING
As at March 31, 2011:
183,447,985 common shares
REGISTRAR & TRANSFER AGENT
Equity Financial Trust Company
200 University Avenue, Suite 400
Toronto, ON M5H 4H1
STOCK EXCHANGE LISTINGS
Toronto Stock Exchange
Symbol: NTI
OTC Bulletin Board
Symbol: NTLNF
![]() © 2011 Northcore Technologies Inc.
|
●
|
Streamline the sourcing and procurement of critical assets, while reducing purchasing costs;
|
●
|
Track the location of assets to support improved asset utilization and redeployment of idle equipment;
|
●
|
Manage the appraisal of used equipment more effectively, resulting in a better understanding of fair market values; and
|
●
|
Accelerate the sale of surplus assets while generating higher yields.
|
●
|
Completed the analysis and design phase for the Dutch Auction / Group Purchasing platform “Discount This”;
|
●
|
Designed, developed and delivered a series of enhancements to the Holistic Remarketing application used by the NACCO Material Handling Group;
|
●
|
Launched the Home Dealer-Owners Connect website at the Bi-Annual Home Hardware market showcase;
|
●
|
Initiated a comprehensive Search Engine Optimization project for a major strategic partner; and
|
●
|
Closed the second tranche of an equity private placement, securing net proceeds of $713,000 through the issuance of common shares and warrants.
|
●
|
The timing of our future capital needs and our ability to raise additional capital when needed;
|
●
|
Our ability to repay our debt to lenders;
|
●
|
Increasingly longer sales cycles;
|
●
|
Potential fluctuations in our financial results and our difficulties in forecasting;
|
●
|
Volatility of the stock markets and fluctuations in the market price of our stock;
|
●
|
The ability to buy and sell our shares on the OTC Bulletin Board;
|
●
|
Our ability to compete with other companies in our industry;
|
●
|
Our dependence upon a limited number of customers;
|
●
|
Our ability to retain and attract key personnel;
|
●
|
Risk of significant delays in product development;
|
●
|
Failure to timely develop or license new technologies;
|
●
|
Risks relating to any requirement to correct or delay the release of products due to software bugs or errors;
|
●
|
Risk of system failure or interruption;
|
●
|
Risks associated with any further dramatic expansions and retractions in the future;
|
●
|
Risks associated with international operations;
|
●
|
Problems which may arise in connection with the acquisition or integration of new businesses, products, services, technologies or other strategic relationships;
|
●
|
Risks associated with protecting our intellectual property, and potentially infringing the intellectual property rights of others;
|
●
|
Fluctuations in currency exchanges;
|
●
|
Risks to holders of our common shares following any issuance of our preferred shares; and
|
●
|
The ability to enforce legal claims against us or our officers or directors.
|
Quarter ended
|
Mar 31,
2011
|
Dec 31,
2010
|
Sep 30,
2010
|
Jun 30,
2010
|
Mar 31,
2010
|
(in thousands, except per share amounts
|
|||||
Revenues
|
$ 183
|
$ 176
|
$ 132
|
$ 124
|
$ 150
|
Operating expenses:
|
|||||
General and administrative
|
372
|
391
|
311
|
351
|
387
|
Customer service and technology
|
181
|
184
|
174
|
184
|
192
|
Sales and marketing
|
69
|
54
|
42
|
41
|
51
|
Stock-based compensation
|
83
|
143
|
77
|
104
|
193
|
Depreciation
|
6
|
6
|
5
|
5
|
6
|
Total operating expenses
|
711
|
778
|
609
|
685
|
829
|
Loss from operations before the under-noted
|
(528)
|
(602)
|
(477)
|
(561)
|
(679)
|
Interest expense:
|
|||||
Interest on notes payable and secured subordinated notes
|
45 | 54 | 38 | 33 | 29 |
Accretion of secured subordinated notes
|
36
|
32
|
30
|
27
|
26
|
Total interest expense
|
81
|
86
|
68
|
60
|
55
|
Other expenses (income):
|
|||||
Income from GE Asset Manager, LLC
|
(35)
|
(11)
|
(4)
|
(7)
|
(21)
|
Provision for impaired investment
|
-
|
-
|
544
|
-
|
-
|
Gain on settlement of debt
|
-
|
-
|
(57)
|
-
|
-
|
Total other expenses (income)
|
(35)
|
(11)
|
483
|
(7)
|
(21)
|
Loss and comprehensive loss for the period
|
$ (574)
|
$ (677)
|
$ (1,028)
|
$ (614)
|
$ (713)
|
Loss per share - basic and diluted
|
$ (0.003)
|
$ (0.004)
|
$ (0.006)
|
$ (0.004)
|
$ (0.004)
|
Total
|
Remainder
of 2011
|
2012
|
2013
|
2014
|
2015
|
|
(in thousands)
|
||||||
Operating leases
|
$ 559
|
$117
|
$ 156
|
$ 156
|
$ 130
|
$ -
|
License agreements
|
209
|
44
|
55
|
55
|
55
|
-
|
Notes payable
|
430
|
430
|
-
|
-
|
-
|
-
|
Secured subordinated notes - principal repayment
|
960
|
600
|
-
|
360
|
-
|
-
|
Secured subordinated notes - interest payment
|
85
|
40
|
36
|
9
|
-
|
-
|
$ 2,243
|
$ 1,231
|
$ 247
|
$ 580
|
$ 185
|
$ -
|
●
|
Loans and Borrowings
|
After initial recognition, interest bearing loans and borrowings are subsequently measured at amortized cost using the effective interest rate method. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate method. The effective interest rate method amortization is included in finance costs in the consolidated statement of profit or loss. | |
●
|
Convertible Debentures
|
IAS 32, Financial Instruments - Presentation, requires the equity component of a compound financial instrument be assigned the residual amount after deducting from the fair value of the compound financial instrument as a whole the amount separately determined for the liability component. However, under IFRS 1, if the liability component of the instrument has either been settled or converted prior to the date of transition, an entity can elect not to split the amount recognized into the debt and equity components. |
CORPORATE OFFICE
Northcore Technologies Inc.
302 The East Mall, Suite 300
Toronto, Ontario M9B 6C7
1 888 287 7467
AUDITORS
Collins Barrow Toronto LLP
390 Bay Street, Suite 1900
Toronto, Ontario, M5H 2Y2
ADDITIONAL SHAREHOLDER INFORMATION
Website:
www.northcore.com
Email:
investor-relations@northcore.com
|
SHARES OUTSTANDING
As at March 31, 2011:
183,447,985 common shares
REGISTRAR & TRANSFER AGENT
Equity Financial Trust Company
200 University Avenue, Suite 400
Toronto, ON M5H 4H1
STOCK EXCHANGE LISTINGS
Toronto Stock Exchange
Symbol: NTI
OTC Bulletin Board
Symbol: NTLNF
![]() © 2011 Northcore Technologies Inc.
|
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