2007 annual report aveiro investment corp. - First West Properties

Land and Lethbridge Land acquisitions for an aggregate of
$9,321,561 and equipment of $54,143. The cash infl ows from
investing activities were also used to fund the cash outfl ows
from the operations of the business totaling $552,726. The net
increase in cash from all activities was $1,930,423. For the prior
year ended June 30, 2006, there was no net change in the cash of
the business.
SELECTED ANNUAL INFORMATION
2005 2006 2007
Total Revenues $ – $ – $ 74,496
Net Income (loss) $ – $ (6,863 ) $ (872,750 )
Net Income (loss)
per share
$ – $ (.0033 ) $ (.1535 )
Net Income (loss)
per share (diluted)
$ – $ (.0033 ) $ (.1535 )
Total assets $ – $ 700 $ 17,149,884
Total long term
fi nancial liabilities
$ – $ – $ 4,969,130
Cash dividends
per share
$ – $ – $ –
Revenues
For the year ended June 30, 2007, the Company had total revenues
of $74,496. Revenues were derived from three sources. First,
rental revenues representing 15 days rental revenue received
on account of the Lethbridge Warehouse totaled $29,178, which
included charges in respect of property operating costs. Second,
the Company earned $27,318 in interest income from excess funds
invested in guaranteed investment certifi cates with a Canadian
chartered bank. Third, in April 2007, the Company entered into
an agreement with a company which shares common offi cers and
directors, pursuant to which the Company provides shared offi ce
costs, including rent and overhead, at the fi xed amount of $6,000
20 | Aveiro Investment Corp. | 2007 Annual Report
per month. During the year $18,000 related to this agreement has
been recorded in revenue.
Related party transactions are in the normal course of
operations and are recorded at the exchange amount which
management believes to be at market rates under normal terms
and conditions.
Expenses
Expenses for the year totaled $947,246 compared to total expenses
of $6,863 for the year ended June 30, 2006. All expenses of the
prior year related to professional accounting and legal services.
Expenses increased signifi cantly due to the startup of operations
of Aveiro’s business.
Corporate expenses for the year ended June 30, 2007 totaled
$673,976. These expenses include (but are not limited to) sales
and marketing costs of $77,422, offi ce costs of $119,400, salaries
and wages (excluding stock-based compensation) of $125,291,
professional accounting and legal fees of $48,084. Effective August
21, 2006, the Company entered into a strategic management
agreement (the “Management Agreement”) with True North
Strategy Corp. (the “Manager”), a Company owned as to 50% by
each of Messrs. Kunik and Mackay, directors of the Company,
pursuant to which the Manager provides strategic management
services to Aveiro. The Manager is entitled to a fee equal to 1.5%
of the net assets of Aveiro payable as to 0.125% plus tax calculated
at the end of each calendar month. In the event that Aveiro
purchases any assets (other than the Airdrie Land), whether by
direct acquisition, corporate acquisition, amalgamation, majority
or minority investment or otherwise, the Manager is entitled to
a fee equal to 1.5% of the acquisition price or transaction value,
as the case may be. Management fees and acquisition fees
pursuant to the Management Agreement were $159,318 for the
year. Also included in general and administrative expenses for
the year ended June 30, 2007 is $17,312 in offi ce costs paid to