2018 Q1 Form 10-Q Financial Statement

#000082787118000005 Filed on May 10, 2018

View on sec.gov

Income Statement

Concept 2018 Q1 2017 Q1
Revenue $46.63M $76.79M
YoY Change -39.28% 159.51%
Cost Of Revenue $7.223M $10.77M
YoY Change -32.9% -26.21%
Gross Profit $34.82M $66.03M
YoY Change -47.27% 340.13%
Gross Profit Margin 74.68% 85.98%
Selling, General & Admin $15.19M $18.58M
YoY Change -18.22% 53.18%
% of Gross Profit 43.64% 28.14%
Research & Development $17.32M $7.525M
YoY Change 130.17% 36.3%
% of Gross Profit 49.74% 11.4%
Depreciation & Amortization $341.0K $196.0K
YoY Change 73.98% 40.0%
% of Gross Profit 0.98% 0.3%
Operating Expenses $44.32M $44.10M
YoY Change 0.51% 44.64%
Operating Profit $2.305M $32.70M
YoY Change -92.95% -3745.04%
Interest Expense $675.0K $27.00K
YoY Change 2400.0%
% of Operating Profit 29.28% 0.08%
Other Income/Expense, Net -$648.0K -$24.00K
YoY Change 2600.0% -220.0%
Pretax Income $1.657M $32.67M
YoY Change -94.93% -3825.43%
Income Tax -$959.0K $9.748M
% Of Pretax Income -57.88% 29.84%
Net Earnings $2.616M $22.92M
YoY Change -88.59% -2658.48%
Net Earnings / Revenue 5.61% 29.85%
Basic Earnings Per Share $0.18 $1.50
Diluted Earnings Per Share $0.17 $1.42
COMMON SHARES
Basic Shares Outstanding 14.82M shares 15.26M shares
Diluted Shares Outstanding 15.48M shares 16.17M shares

Balance Sheet

Concept 2018 Q1 2017 Q1
SHORT-TERM ASSETS
Cash & Short-Term Investments $95.70M $27.70M
YoY Change 245.49% -64.62%
Cash & Equivalents $95.67M $27.71M
Short-Term Investments
Other Short-Term Assets $580.0K $1.215M
YoY Change -52.26% 486.96%
Inventory $6.141M $3.015M
Prepaid Expenses
Receivables $53.43M $84.74M
Other Receivables $0.00 $0.00
Total Short-Term Assets $168.8M $123.6M
YoY Change 36.62% 7.81%
LONG-TERM ASSETS
Property, Plant & Equipment $6.498M $3.796M
YoY Change 71.18% 32.31%
Goodwill $39.74M $39.74M
YoY Change 0.0%
Intangibles $22.65M $32.66M
YoY Change -30.64% 193.81%
Long-Term Investments
YoY Change
Other Assets $106.0K $618.0K
YoY Change -82.85% 557.45%
Total Long-Term Assets $80.48M $101.2M
YoY Change -20.52% 619.14%
TOTAL ASSETS
Total Short-Term Assets $168.8M $123.6M
Total Long-Term Assets $80.48M $101.2M
Total Assets $249.3M $224.8M
YoY Change 10.89% 74.68%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $9.353M $19.03M
YoY Change -50.84% 84.82%
Accrued Expenses $13.10M $15.40M
YoY Change -14.92% -21.28%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00
YoY Change
Long-Term Debt Due $6.250M
YoY Change
Total Short-Term Liabilities $28.76M $35.44M
YoY Change -18.84% 14.8%
LONG-TERM LIABILITIES
Long-Term Debt $41.62M $0.00
YoY Change
Other Long-Term Liabilities $700.0K $22.60M
YoY Change -96.9%
Total Long-Term Liabilities $41.62M $22.60M
YoY Change 84.18%
TOTAL LIABILITIES
Total Short-Term Liabilities $28.76M $35.44M
Total Long-Term Liabilities $41.62M $22.60M
Total Liabilities $70.38M $58.00M
YoY Change 21.35% 59.34%
SHAREHOLDERS EQUITY
Retained Earnings $28.90M -$2.735M
YoY Change -1156.67% -97.47%
Common Stock $16.00K $16.00K
YoY Change 0.0% 6.67%
Preferred Stock
YoY Change
Treasury Stock (at cost) $87.80M $50.66M
YoY Change 73.32%
Treasury Stock Shares 1.365M shares 756.0K shares
Shareholders Equity $178.2M $166.8M
YoY Change
Total Liabilities & Shareholders Equity $249.3M $224.8M
YoY Change 10.89% 74.68%

Cashflow Statement

Concept 2018 Q1 2017 Q1
OPERATING ACTIVITIES
Net Income $2.616M $22.92M
YoY Change -88.59% -2658.48%
Depreciation, Depletion And Amortization $341.0K $196.0K
YoY Change 73.98% 40.0%
Cash From Operating Activities $4.921M -$12.44M
YoY Change -139.57% -500.13%
INVESTING ACTIVITIES
Capital Expenditures $19.00K $676.0K
YoY Change -97.19% -15.92%
Acquisitions
YoY Change
Other Investing Activities $0.00
YoY Change -100.0%
Cash From Investing Activities -$19.00K -$676.0K
YoY Change -97.19% -82.68%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net $7.003M $13.65M
YoY Change -48.71%
Debt Paid & Issued, Net $0.00
YoY Change
Cash From Financing Activities -$23.89M -$12.00M
YoY Change 99.11%
NET CHANGE
Cash From Operating Activities $4.921M -$12.44M
Cash From Investing Activities -$19.00K -$676.0K
Cash From Financing Activities -$23.89M -$12.00M
Net Change In Cash -$18.99M -$25.11M
YoY Change -24.38% 3054.52%
FREE CASH FLOW
Cash From Operating Activities $4.921M -$12.44M
Capital Expenditures $19.00K $676.0K
Free Cash Flow $4.902M -$13.11M
YoY Change -137.39% -669.1%

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CY2017Q1 us-gaap Net Income Loss Available To Common Stockholders Basic
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CY2018Q1 us-gaap Net Income Loss Available To Common Stockholders Basic
NetIncomeLossAvailableToCommonStockholdersBasic
2616000 USD
CY2017Q1 us-gaap Nonoperating Income Expense
NonoperatingIncomeExpense
-24000 USD
CY2018Q1 us-gaap Nonoperating Income Expense
NonoperatingIncomeExpense
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CY2017Q1 us-gaap Operating Expenses
OperatingExpenses
44097000 USD
CY2018Q1 us-gaap Operating Expenses
OperatingExpenses
44321000 USD
CY2017Q1 us-gaap Operating Income Loss
OperatingIncomeLoss
32696000 USD
CY2018Q1 us-gaap Operating Income Loss
OperatingIncomeLoss
2305000 USD
CY2018Q1 us-gaap Operating Leases Future Minimum Payments Due
OperatingLeasesFutureMinimumPaymentsDue
2326000 USD
CY2018Q1 us-gaap Operating Leases Future Minimum Payments Due Current
OperatingLeasesFutureMinimumPaymentsDueCurrent
502000 USD
CY2018Q1 us-gaap Operating Leases Future Minimum Payments Due In Five Years
OperatingLeasesFutureMinimumPaymentsDueInFiveYears
120000 USD
CY2018Q1 us-gaap Operating Leases Future Minimum Payments Due In Four Years
OperatingLeasesFutureMinimumPaymentsDueInFourYears
117000 USD
CY2018Q1 us-gaap Operating Leases Future Minimum Payments Due In Three Years
OperatingLeasesFutureMinimumPaymentsDueInThreeYears
395000 USD
CY2018Q1 us-gaap Operating Leases Future Minimum Payments Due In Two Years
OperatingLeasesFutureMinimumPaymentsDueInTwoYears
674000 USD
CY2018Q1 us-gaap Operating Leases Future Minimum Payments Due Thereafter
OperatingLeasesFutureMinimumPaymentsDueThereafter
518000 USD
CY2017Q4 us-gaap Other Accrued Liabilities Current
OtherAccruedLiabilitiesCurrent
1423000 USD
CY2017Q4 us-gaap Other Assets Current
OtherAssetsCurrent
561000 USD
CY2018Q1 us-gaap Other Assets Current
OtherAssetsCurrent
580000 USD
CY2017Q4 us-gaap Other Assets Noncurrent
OtherAssetsNoncurrent
124000 USD
CY2018Q1 us-gaap Other Assets Noncurrent
OtherAssetsNoncurrent
106000 USD
CY2018Q1 us-gaap Payments For Repurchase Of Common Stock
PaymentsForRepurchaseOfCommonStock
7003000 USD
CY2017Q1 us-gaap Payments Of Debt Issuance Costs
PaymentsOfDebtIssuanceCosts
482000 USD
CY2017Q1 us-gaap Other Sales Revenue Net
OtherSalesRevenueNet
25000000 USD
CY2018Q1 us-gaap Other Sales Revenue Net
OtherSalesRevenueNet
0 USD
CY2017Q1 us-gaap Payments For Repurchase Of Common Stock
PaymentsForRepurchaseOfCommonStock
13653000 USD
CY2018Q1 us-gaap Payments Of Debt Issuance Costs
PaymentsOfDebtIssuanceCosts
0 USD
CY2017Q1 us-gaap Payments Related To Tax Withholding For Share Based Compensation
PaymentsRelatedToTaxWithholdingForShareBasedCompensation
0 USD
CY2018Q1 us-gaap Payments Related To Tax Withholding For Share Based Compensation
PaymentsRelatedToTaxWithholdingForShareBasedCompensation
3051000 USD
CY2017Q1 us-gaap Payments To Acquire Property Plant And Equipment
PaymentsToAcquirePropertyPlantAndEquipment
676000 USD
CY2018Q1 us-gaap Payments To Acquire Property Plant And Equipment
PaymentsToAcquirePropertyPlantAndEquipment
19000 USD
CY2017Q4 us-gaap Preferred Stock Shares Authorized
PreferredStockSharesAuthorized
1500000 shares
CY2018Q1 us-gaap Preferred Stock Shares Authorized
PreferredStockSharesAuthorized
1500000 shares
CY2017Q4 us-gaap Preferred Stock Shares Issued
PreferredStockSharesIssued
0 shares
CY2018Q1 us-gaap Preferred Stock Shares Issued
PreferredStockSharesIssued
0 shares
CY2017Q4 us-gaap Preferred Stock Shares Outstanding
PreferredStockSharesOutstanding
0 shares
CY2018Q1 us-gaap Preferred Stock Shares Outstanding
PreferredStockSharesOutstanding
0 shares
CY2017Q4 us-gaap Preferred Stock Value
PreferredStockValue
0 USD
CY2018Q1 us-gaap Preferred Stock Value
PreferredStockValue
0 USD
CY2017Q4 us-gaap Prepaid Expense And Other Assets Current
PrepaidExpenseAndOtherAssetsCurrent
15101000 USD
CY2018Q1 us-gaap Prepaid Expense And Other Assets Current
PrepaidExpenseAndOtherAssetsCurrent
13583000 USD
CY2017Q4 us-gaap Prepaid Insurance
PrepaidInsurance
116000 USD
CY2018Q1 us-gaap Prepaid Insurance
PrepaidInsurance
843000 USD
CY2017Q4 us-gaap Prepaid Taxes
PrepaidTaxes
9597000 USD
CY2018Q1 us-gaap Prepaid Taxes
PrepaidTaxes
10524000 USD
CY2017Q1 us-gaap Proceeds From Stock Options Exercised
ProceedsFromStockOptionsExercised
2137000 USD
CY2018Q1 us-gaap Proceeds From Stock Options Exercised
ProceedsFromStockOptionsExercised
1166000 USD
CY2017Q4 us-gaap Property Plant And Equipment Net
PropertyPlantAndEquipmentNet
6820000 USD
CY2018Q1 us-gaap Property Plant And Equipment Net
PropertyPlantAndEquipmentNet
6498000 USD
CY2018Q1 us-gaap Purchase Obligation
PurchaseObligation
80369000 USD
CY2018Q1 us-gaap Purchase Obligation Due After Fifth Year
PurchaseObligationDueAfterFifthYear
0 USD
CY2018Q1 us-gaap Purchase Obligation Due In Fifth Year
PurchaseObligationDueInFifthYear
0 USD
CY2018Q1 us-gaap Purchase Obligation Due In Fourth Year
PurchaseObligationDueInFourthYear
0 USD
CY2018Q1 us-gaap Purchase Obligation Due In Next Twelve Months
PurchaseObligationDueInNextTwelveMonths
80369000 USD
CY2018Q1 us-gaap Purchase Obligation Due In Second Year
PurchaseObligationDueInSecondYear
0 USD
CY2018Q1 us-gaap Purchase Obligation Due In Third Year
PurchaseObligationDueInThirdYear
0 USD
CY2017Q1 us-gaap Research And Development Expense
ResearchAndDevelopmentExpense
7525000 USD
CY2018Q1 us-gaap Research And Development Expense
ResearchAndDevelopmentExpense
17320000 USD
CY2017Q4 us-gaap Retained Earnings Accumulated Deficit
RetainedEarningsAccumulatedDeficit
26284000 USD
CY2018Q1 us-gaap Retained Earnings Accumulated Deficit
RetainedEarningsAccumulatedDeficit
28900000 USD
CY2017Q1 us-gaap Royalty Expense
RoyaltyExpense
7229000 USD
CY2018Q1 us-gaap Royalty Expense
RoyaltyExpense
4585000 USD
CY2017Q1 us-gaap Royalty Revenue
RoyaltyRevenue
36507000 USD
CY2018Q1 us-gaap Royalty Revenue
RoyaltyRevenue
35788000 USD
CY2017Q1 us-gaap Sales Revenue Goods Net
SalesRevenueGoodsNet
15286000 USD
CY2018Q1 us-gaap Sales Revenue Goods Net
SalesRevenueGoodsNet
10838000 USD
CY2017Q1 us-gaap Sales Revenue Net
SalesRevenueNet
76793000 USD
CY2018Q1 us-gaap Sales Revenue Net
SalesRevenueNet
46626000 USD
CY2017Q1 us-gaap Selling General And Administrative Expense
SellingGeneralAndAdministrativeExpense
18578000 USD
CY2018Q1 us-gaap Selling General And Administrative Expense
SellingGeneralAndAdministrativeExpense
15193000 USD
CY2017Q1 us-gaap Share Based Compensation
ShareBasedCompensation
4193000 USD
CY2018Q1 us-gaap Share Based Compensation
ShareBasedCompensation
5305000 USD
CY2018Q1 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Award Vesting Period1
ShareBasedCompensationArrangementByShareBasedPaymentAwardAwardVestingPeriod1
P4Y
CY2017Q1 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Fair Value Assumptions Expected Dividend Rate
ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedDividendRate
0
CY2018Q1 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Fair Value Assumptions Expected Dividend Rate
ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedDividendRate
0
CY2017Q1 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Fair Value Assumptions Expected Volatility Rate
ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedVolatilityRate
0.3727
CY2018Q1 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Fair Value Assumptions Expected Volatility Rate
ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedVolatilityRate
0.4376
CY2017Q1 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Fair Value Assumptions Risk Free Interest Rate Maximum
ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsRiskFreeInterestRateMaximum
0.0242
CY2018Q1 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Fair Value Assumptions Risk Free Interest Rate Maximum
ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsRiskFreeInterestRateMaximum
0.0271
CY2017Q1 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Fair Value Assumptions Risk Free Interest Rate Minimum
ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsRiskFreeInterestRateMinimum
0.0191
CY2018Q1 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Fair Value Assumptions Risk Free Interest Rate Minimum
ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsRiskFreeInterestRateMinimum
0.0230
CY2017Q1 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Options Grants In Period Gross
ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross
810650 shares
CY2018Q1 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Options Grants In Period Gross
ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross
631625 shares
CY2017Q1 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Options Grants In Period Weighted Average Grant Date Fair Value
ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodWeightedAverageGrantDateFairValue
33.56
CY2018Q1 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Options Grants In Period Weighted Average Grant Date Fair Value
ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodWeightedAverageGrantDateFairValue
26.58
CY2017Q1 us-gaap Share Based Compensation Arrangements By Share Based Payment Award Options Grants In Period Weighted Average Exercise Price
ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsGrantsInPeriodWeightedAverageExercisePrice
84.92
CY2018Q1 us-gaap Share Based Compensation Arrangements By Share Based Payment Award Options Grants In Period Weighted Average Exercise Price
ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsGrantsInPeriodWeightedAverageExercisePrice
59.14
CY2018Q1 us-gaap Stock Issued During Period Value Stock Options Exercised
StockIssuedDuringPeriodValueStockOptionsExercised
1166000 USD
CY2016Q3 us-gaap Stock Repurchase Program Authorized Amount1
StockRepurchaseProgramAuthorizedAmount1
75000000.0 USD
CY2017Q3 us-gaap Stock Repurchase Program Authorized Amount1
StockRepurchaseProgramAuthorizedAmount1
100000000 USD
CY2017Q4 us-gaap Stockholders Equity
StockholdersEquity
179144000 USD
CY2018Q1 us-gaap Stockholders Equity
StockholdersEquity
178177000 USD
CY2017Q4 us-gaap Treasury Stock Shares
TreasuryStockShares
1241695 shares
CY2018Q1 us-gaap Treasury Stock Shares
TreasuryStockShares
1365386 shares
us-gaap Treasury Stock Shares Acquired
TreasuryStockSharesAcquired
1365386 shares
CY2018Q1 us-gaap Treasury Stock Shares Acquired
TreasuryStockSharesAcquired
123691 shares
CY2017Q4 us-gaap Treasury Stock Value
TreasuryStockValue
80795000 USD
CY2018Q1 us-gaap Treasury Stock Value
TreasuryStockValue
87798000 USD
us-gaap Treasury Stock Value Acquired Cost Method
TreasuryStockValueAcquiredCostMethod
87800000 USD
CY2018Q1 us-gaap Treasury Stock Value Acquired Cost Method
TreasuryStockValueAcquiredCostMethod
7003000 USD
CY2018Q1 us-gaap Treasury Stock Value Acquired Cost Method
TreasuryStockValueAcquiredCostMethod
7000000 USD
CY2018Q1 us-gaap Unrecognized Tax Benefits
UnrecognizedTaxBenefits
0 USD
CY2017Q1 us-gaap Weighted Average Number Diluted Shares Outstanding Adjustment
WeightedAverageNumberDilutedSharesOutstandingAdjustment
16165361 shares
CY2018Q1 us-gaap Weighted Average Number Diluted Shares Outstanding Adjustment
WeightedAverageNumberDilutedSharesOutstandingAdjustment
15478335 shares
CY2017Q1 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
16165361 shares
CY2018Q1 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
15478335 shares
CY2017Q1 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
15257892 shares
CY2018Q1 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
14819530 shares
CY2018Q1 us-gaap Basis Of Accounting
BasisOfAccounting
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:8px;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Interim Condensed Consolidated Financial Statements</font></div><div style="line-height:120%;padding-bottom:8px;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (&#8220;U.S. GAAP&#8221;) for interim information and pursuant to the rules and regulations of the Securities and Exchange Commission (the &#8220;SEC&#8221;) for reporting on Form 10-Q. Accordingly, certain information and footnote disclosures required for complete financial statements are not included herein. The condensed consolidated balance sheet at December 31, 2017 was derived from audited financial statements, but certain information and footnote disclosures normally included in the Company's annual consolidated financial statements have been condensed or omitted. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary for the fair presentation of the financial information for the interim periods reported have been made.&#160;Results of operations for the </font><font style="font-family:inherit;font-size:10pt;">three months ended</font><font style="font-family:inherit;font-size:10pt;"> </font><font style="font-family:inherit;font-size:10pt;">March&#160;31, 2018</font><font style="font-family:inherit;font-size:10pt;"> are not necessarily indicative of the results for the year ending December 31, </font><font style="font-family:inherit;font-size:10pt;">2018</font><font style="font-family:inherit;font-size:10pt;"> or any period thereafter. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited financial statements and related notes included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2017, filed with the SEC on February 26, 2018. Unless otherwise indicated or required by context, reference throughout to the "Company," "Eagle Pharmaceuticals," "Eagle," "we," "us" or "our" mean Eagle Pharmaceuticals, Inc., a Delaware corporation and its subsidiary, Eagle Biologics, Inc., and references to "Eagle Biologics" mean Eagle Biologics, Inc.</font></div></div>
CY2018Q1 us-gaap Prior Period Reclassification Adjustment Description
PriorPeriodReclassificationAdjustmentDescription
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:6px;padding-top:6px;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Reclassifications</font></div><div style="line-height:120%;padding-bottom:6px;padding-top:6px;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Certain reclassifications have been made to prior year amounts to conform with the current year presentation.</font></div></div>
CY2018Q1 us-gaap Use Of Estimates
UseOfEstimates
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Use of Estimates</font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">These financial statements are presented in U.S. dollars and are prepared in accordance with U.S. GAAP. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed financial statements including disclosure of contingent assets and contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period and accompanying notes. The Company's critical accounting policies are those that are both most important to the Company's financial condition and results of operations and require the most difficult, subjective or complex judgments on the part of management in their application, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Because of the uncertainty of factors surrounding the estimates or judgments used in the preparation of the financial statements, actual results may materially vary from these estimates.</font></div></div>

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