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EDLEUN SECOND QUARTER 2010 REPORT MARKS COMMENCEMENT OF ITS SUBSTANTIAL CONSOLIDATION AND GROWTH STRATEGY IN THE CANADIAN CHILD

^{Published on 2010-08-26 19:20:40 - Market Wire}
 

 - The creation of Edleun Group, Inc., a publicly-traded company focused on the consolidation and development of childcare centres in the Canadian childcare industry, through the completion of the "three cornered" amalgamation under the Canada Business Corporations Act involving San Anton Capital Inc. (a Capital Pool Company), Edleun, Inc., and San Anton Subco, a wholly-owned subsidiary of the Company, constituting the Qualifying Transaction for San Anton Inc. under the TSX Venture Exchange rules; - The raising of equity capital of $40.7 million (gross proceeds) through the sale of subscription receipts at $0.50 each, which were subsequently converted to common shares of the Company (the "Initial Financing"); - Commencement of trading of Edleun Group, Inc. common shares on the TSX Venture Exchange under the ticker symbol "EDU"; - Acquisition of 11 childcare centres (including two real estate properties) ("Initial Childcare Acquisition") in Alberta for total consideration of $8.75 million; - Purchase of six real estate properties used in the operation of the 11 centres ("Real Estate Acquisition") noted above for $5.65 million; - Cash and cash equivalents of $22.8 million at June 30, 2010 to fund further acquisitions, development and operations; and - The appointments of Mr. Barry Reichmann, the President and CEO of Reichmann International Inc., and Mr. Jeffrey Olin, the President and CEO of Vision Capital Corporation to the Company's Board of Directors. 

 - Acquisition of six additional childcare centres in Alberta for cash consideration of $7.2 million. 

 ------------------------------------------------------------------------- Three Months Ended ------------------------------ June 30, 2010 June 30, 2009 ------------------------------------------------------------------------- Net loss for the period $ (1,702,813) $ - Add: Depreciation of property and equipment 17,510 - Property acquisition costs expensed as incurred 261,240 - ------------------------------------------------------------------------- FFO $ (1,424,063) $ - Add: Stock based compensation - Finders Fees 300,000 - Stock based compensation - Option Grants 355,316 - Non recurring relocation costs and pre-Qualifying Transaction amounts expensed 323,524 - Accrued 2010 public company costs for the period prior to Qualifying Transaction 239,581 - ------------------------------------------------------------------------- AFFO $ (205,642) $ - ------------------------------------------------------------------------- ------------------------------------------------------------------------- 

 - Brand and Quality - Position Edleun as the number one provider of high quality childcare in Canada - Create a standard of excellence through which all Edleun stakeholders will benefit - Deliver new standards of childcare in Canada, including: - Curriculum - Nutritious meal programs - High quality physical premises - Continuous learning and professional development for staff - Organic Growth - Optimize occupancy rates and margins at each Edleun centre - Create value through sustainable and growing cash flow and capital appreciation - Strategic Growth - Acquire centres and develop greenfield sites in under-served markets - Maintain rapport with existing investors and investment banks while creating and expanding the Company's exposure to capital markets and investors - Optimize the company's overall cost of, and access to, capital through a prudent mix of debt and equity instruments 

 Interim Consolidated Balance Sheets (Unaudited) ------------------------------------------------------------------------- June 30, December 31, 2010 2009 ------------------------------------------------------------------------- Assets Current assets Cash and cash equivalents $ 22,769,218 $ - Accounts receivable 485,693 110 Prepaid expenses 117,178 - Investment 115,976 - ------------------------------------------------------------------------- 23,488,065 110 Property and equipment 8,345,610 - Goodwill 6,587,127 - ------------------------------------------------------------------------- $ 38,420,802 $ 110 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Liabilities and Shareholders' Equity Current liabilities Accounts payable and accrued liabilities $ 933,558 $ 75,000 Shareholders' equity Share capital 38,511,928 110 Contributed surplus 803,628 - Deficit (1,828,312) (75,000) ----------------------------------------------------------------------- 37,487,244 (74,890) Commitments Subsequent event ------------------------------------------------------------------------- $ 38,420,802 $ 110 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Interim Consolidated Statements of Operations and Comprehensive Loss (Unaudited) ------------------------------------------------------------------------- Three months ended Six months ended June 30, June 30, June 30, June 30, 2010 2009 2010 2009 ------------------------------------------------------------------------- Revenue $ 867,252 $ - $ 867,252 $ - Centre expenses Salaries, wages and benefits 491,023 - 491,023 - Other operating expenses 103,177 - 103,177 - Operating leases 32,124 - 32,124 - ------------------------------------------------------------------------- 240,928 - 240,928 - General and administrative 1,009,924 - 1,060,424 - Property acquisition costs 261,240 - 261,240 - Stock-based compensation 655,316 - 655,316 - Depreciation 17,510 - 17,510 - ------------------------------------------------------------------------- 1,943,990 - 1,994,490 - ------------------------------------------------------------------------- Loss before the undernoted items (1,703,062) - (1,753,562) - Other income 249 - 249 - ------------------------------------------------------------------------- Loss before income taxes (1,702,813) - (1,753,313) - Income taxes - - - - ------------------------------------------------------------------------- Net loss and comprehensive loss $(1,702,813) $ - $(1,753,313) $ - ------------------------------------------------------------------------- ------------------------------------------------------------------------- Loss per share: Basic and diluted $ (0.033) $ - $ (0.062) $ - ------------------------------------------------------------------------- ------------------------------------------------------------------------- Weighted average number of shares outstanding: Basic and diluted 50,965,266 - 28,109,609 - ------------------------------------------------------------------------- ------------------------------------------------------------------------- Interim Consolidated Statements of Deficit (Unaudited) ------------------------------------------------------------------------- Three months ended Six months ended June 30, June 30, June 30, June 30, 2010 2009 2010 2009 ------------------------------------------------------------------------- Deficit, beginning of period $ (459,744) $ - $ (409,244) $ - Reverse takeover adjustment Legal parent deficit, beginning 264,942 - 264,942 - Legal parent net loss, January 1, 2010 to May 14, 2010 69,303 - 69,303 - Net loss and comprehensive loss (1,702,813) - (1,753,313) - ------------------------------------------------------------------------- Deficit, end of period $(1,828,312) $ - $(1,828,312) $ - ------------------------------------------------------------------------- ------------------------------------------------------------------------- Interim Consolidated Statements of Cash Flows (Unaudited) ------------------------------------------------------------------------- Three months ended Six months ended June 30, June 30, June 30, June 30, 2010 2009 2010 2009 ------------------------------------------------------------------------- Operating activities: Net loss $(1,702,813) $ - $(1,753,313) $ - Items not affecting cash: Depreciation 17,510 - 17,510 - Stock-based compensation 655,316 - 655,316 - Change in non-cash operating working capital 167,111 - 109,941 - ----------------------------------------------------------------------- Cash used in operating activities (862,876) - (970,546) - Investing activities Business acquisitions (13,400,000) - (13,400,000) - Reverse takeover cash acquisition 706,597 - 814,267 - Purchase of property and equipment (550,348) - (550,348) - ----------------------------------------------------------------------- Cash used in investing activities (13,243,751) - (13,136,081) - Financing activities Proceeds of share issue 40,742,500 - 40,742,500 - Share issuance costs (3,866,655) - (3,866,655) - ----------------------------------------------------------------------- Cash provided by financing activities 36,875,845 - 36,875,845 - ------------------------------------------------------------------------- Change in cash and cash equivalents 22,769,218 - 22,769,218 - Cash and cash equivalents, beginning - - - - ------------------------------------------------------------------------- Cash and cash equivalents, ending $22,769,218 $ - $22,769,218 $ - ------------------------------------------------------------------------- ------------------------------------------------------------------------- Cash and cash equivalents consists of: Cash $ 768,374 $ - $ 768,374 $ - Term deposits 22,000,844 - 22,000,844 - ------------------------------------------------------------------------- $22,769,218 $ - $22,769,218 $ - ------------------------------------------------------------------------- -------------------------------------------------------------------------