2007 annual report aveiro investment corp. - First West Properties

The Warehouse Mortgage is a fi rst mortgage and demand
promissory note for $3,625,000, which note can only be demanded
on default or if in the opinion of the bank there has been a change
in the business fi nancial condition, operations or conduct of the
Company which will adversely affect either the Company or the
Company’s ability to fulfi ll its obligations or the bank’s security.
The note bears interest at prime plus 1% per annum (an effective
rate of 7% as at June 30, 2007), with interest payable monthly,
secured by land having a net book value of $5,575,780 and is to be
repaid on June 13, 2012.
The Airdrie Land is subject to a fi rst mortgage bearing interest
at 7.5% per annum secured by land having a net book value of
$7,971,034 with interest only quarterly payments. The loan is due
on May 15, 2009.
The Airdrie Land is also subject to a second mortgage bearing
interest at 7.5% per annum secured by land having a net book
value of $7,971,034. The mortgage is to be repaid in two equal
installments of $1,026,000 plus interest on October 16, 2007 and
April 16, 2008.
The provisions of the mortgage agreements require repayment of
the principal amounts as follows:
2008 $ 2,108,820
2009 1,491,295
2010 96,876
2011 103,879
2012 3,277,080
$ 7,077,950
Shareholders’ Equity
Shareholders’ Equity at June 30, 2007 totaled $9,741,120. At
June 30, 2006 the Shareholders’ Defi cit was $5,649. The changes
in the Shareholders’ Equity accounts occurred as follows during
the year:
1) Share Capital increased from $20,900 at June 30, 2006 to
$10,373,594 at June 30, 2007 due to the private placement
issuance of Common Shares of $11,430,000 less share issue
costs of $1,077,306.
2) Contributed surplus increased from $16,634 at June 30 2006
to $283,459 due to the recording of stock based compensation
of $249,207 and stock based share issue costs of $17,618 in
accordance with generally accepted accounting principles.
3) The accumulated defi cit increased from $43,183 to $915,933
due to the net loss of $872,750. This net loss is described in
more detail in the following section.
Results of Operations
The Company had no operations for the year ended June 30, 2006.
For the year ended June 30, 2007, the Company had total revenues
of $74,496, total expenses of $947,246 and as a result a net loss
of $872,750 or $0.1535 per basic and fully diluted Common Share.
The loss for the comparative year ended June 30, 2006 was $6,863
or $0.0033 per basic and diluted Common Share.
Cash Flows
During the year ended June 30, 2007, the Company generated
net cash infl ows from fi nancing activities of $17,438,262 which
included the issuance of mortgages and Common Shares less
share issue costs and subsequent mortgage repayments. Those
net cash infl ows were used to fund investing activities, which were
the purchase of assets (as described above) totaling $14,955,113,
including the Lethbridge Warehouse for $5,579,409, the Airdrie
Aveiro Investment Corp. | 2007 Annual Report | 19