FMX Ventures Inc. formerly Footmaxx Holdings Inc.
NEX BOARD : FMX.H

FMX Ventures Inc. formerly Footmaxx Holdings Inc.

April 28, 2008 23:45 ET

FMX Ventures Inc.: Financial Statements and MD&A for 2007

TORONTO, ONTARIO--(Marketwire - April 28, 2008) - FMX Ventures Inc. (NEX BOARD:FMX.H) formerly operating as Footmaxx Holdings Inc., ("Footmaxx"), a leading orthorpaedic and diagnostic company announces that:

FMX Ventures Inc. completed the sale by the Company and its subsidiaries of substantially all of the assets utilized in carrying on its orthotics, diagnostics and distribution business for aggregate cash consideration of $16,300,000 and the assumption of obligations related to the Company's business on November 1, 2007. The proceeds from the asset sale have been applied primarily to retire the Company's outstanding debentures and to satisfy costs associated with the transaction.

As a result of the sale transaction, the Company no longer has any substantive assets or active business operations and changed its name to "FMX Ventures Inc.". The Company's shares trade on the TSX Venture Exchange ("Exchange"), NEX trading board, symbol FMX.H.

FMX Achieves 2007 EBITDA of $767,000

Overall Performance

Revenue in 2007 was $10,990,525, a decrease of $2,373,380 or 17.8% from $13,363,905 in 2006. The primary reason for the decrease was the reduced operating period of ten months versus twelve months in 2006. EBITDA decreased by $815,300 from $1,582,726 in 2006 to $767,426 in 2007. Net income for 2007 was $13,205,763 and included a $13,575,231 gain on the sale of the Company's assets and a $497,031 gain on settlement of the Series I Debentures.

Non-GAAP Measures

In the Management Discussion and Analysis, and elsewhere, measures such as earnings before interest, taxes, depreciation and amortization (EBITDA) and other terms that are used are not defined by generally accepted accounting principles ("GAAP"). The use of these terms may not be consistent with the way these terms are used by others. Where possible, in particular for EBITDA, tables and other information are provided that enables readers to reconcile between such non-GAAP measures and standard GAAP measures. While these measures are not defined by or required by GAAP, this information is provided to readers to help them better understand significant measures.

Forward-looking Statements

This release may contain projections and other forward-looking statements regarding future events. Such statements are predications involving known and unknown risks, uncertainties and other factors that may cause the actual events or results to be materially different. Although the Company believes that the forward-looking statements contained herein are reasonable, it can give no assurance that the Company's expectations are correct. For information concerning factors affecting the Company's business, the reader is referred to the documents that the Company files from time to time with applicable Canadian securities and regulatory authorities.



Consolidated Financial Statements of

FMX VENTURES INC.
(Formerly Footmaxx Holdings Inc.)

Years ended December 31, 2007 and 2006


Auditors' Report

To the Shareholders of FMX Ventures Inc. (formerly Footmaxx Holdings Inc.)

We have audited the consolidated balance sheets of FMX Ventures Inc. (formerly Footmaxx Holdings Inc.) as at December 31, 2007 and 2006 and the consolidated statements of operations, comprehensive income (loss) and deficit, shareholders' equity (deficit) and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2007 and 2006 and the results of its operations and its cash flows for the years then ended in accordance with Canadian generally accepted accounting principles.

Chartered Accountants, Licensed Public Accountants

Toronto, Ontario

April 21, 2008



FMX VENTURES INC. (formerly Footmaxx Holdings Inc.)
Consolidated Balance Sheets

December 31, 2007 and 2006

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2007 2006
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Assets

Current assets:
Cash $ 441,819 $ 322,613
Short term investment (Note 3) 25,000 -
Accounts receivable, net 11,277 1,368,931
Inventory (Note 4) - 434,533
Other receivable (Note 2) 300,000 -
Other assets 31,881 69,372
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809,977 2,195,449

Capital assets (note 5) - 533,513

Deferred financing costs - 38,745
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$ 809,977 $ 2,767,707
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Liabilities and Shareholders' Equity
(Deficiency)

Current liabilities:
Accounts payable and accrued
liabilities (Note 7) $ 390,139 $ 1,147,358
Current portion of long-term debt (Note 6) - 864,932
Current portion of convertible
debentures (Note 7) - 15,661,057
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390,139 17,673,347
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Shareholders' equity (deficiency)
Capital stock (Note 8) 20,248,082 20,248,082
Contributed surplus (Note 7) 2,119,715 -
Deficit (21,947,959) (35,153,722)
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419,838 (14,905,640)
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$ 809,977 $ 2,767,707
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See accompanying notes to consolidated financial statements.
On behalf of the Board:

Lenny Simak, Director

Grant McCutchion, Director


FMX VENTURES INC. (formerly Footmaxx Holdings Inc.)
Consolidated Statements of Operations, Comprehensive Income (Loss) and
Deficit

Years ended December 31, 2007 and 2006

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2007 2006
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Sales $ 10,990,525 $ 13,363,905

Cost of goods sold 5,274,192 6,444,587
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Gross profit 5,716,333 6,919,318
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Expenses:
Selling and administration (Note 2) 4,274,663 4,556,243
Information technology 717,350 838,136
Accrued interest on convertible debentures 1,357,094 1,360,317
Interest on long-term debt 21,480 196,180
Other interest 4,395 4,798
Foreign exchange gain (43,106) (57,787)
Amortization of capital assets 212,211 312,515
Amortization of deferred financing costs 38,745 92,987
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6,582,832 7,303,389
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Loss before income taxes and undernoted items (866,499) (384,071)


Gain on settlement of convertible debentures
(Note 7) 497,031 -
Gain on sale of Company's assets (Note 2) 13,575,231 -
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Income (loss) before income taxes 13,205,763 (384,071)

Income taxes (Note 10) - -
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Net income (loss) and total comprehensive
income (loss) 13,205,763 (384,071)
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Deficit, beginning of year (35,153,722) (34,769,651)
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Deficit, end of year $(21,947,959) $(35,153,722)
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Basic earnings (loss) per common share
(note 11) $ 0.33 $ (0.01)

Diluted earnings (loss) per common share
(note 11) $ 0.33 $ (0.01)
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See accompanying notes to consolidated financial statements.


FMX VENTURES INC. (formerly Footmaxx Holdings Inc.)
Consolidated Statements of Shareholders' Equity (Deficit)

Years ended December 31, 2007 and 2006

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Number of
Shareholders' Capital Contributed Equity
Common Shares Stock Surplus Deficit (Deficit)
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Note 8 8 7
Balance,
December
31, 2005 41,131,205 $ 20,248,082 $ - $(34,769,651) $(14,521,569)

Net loss - - - (384,071) (384,071)

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Balance,
December
31, 2006 41,131,205 20,248,082 - (35,153,722) (14,905,640)
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Shares
returned
to
treasury (1,788,311) - - - -

Settlement
of
convertible
debentures - - 2,119,715 - 2,119,715

Net Income - - - 13,205,763 13,205,763

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Balance,
December
31, 2007 39,342,894 $ 20,248,082 $ 2,119,715 $(21,947,959) $ 419,838
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See accompanying notes to consolidated financial statements.



FMX VENTURES INC. (formerly Footmaxx Holdings Inc.)
Consolidated Statements of Cash Flows

Years ended December 31, 2007 and 2006

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2007 2006
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Cash flows from (used in) operating activities:
Net income (loss) $ 13,205,763 $ (384,071)
Items not involving cash:
Gain on settlement of convertible debentures (497,031) -
Gain on sale of Company's assets (13,575,231) -
Amortization of capital assets 212,211 312,515
Amortization of deferred financing costs 38,745 92,987
Accrued interest on convertible debentures 1,357,094 1,360,317
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741,551 1,164,122
Change in non-cash operating working capital:
Increase in accounts receivable (86,397) (11,452)
Decrease (increase) in inventory (116,573) 70,600
Increase in other assets (7,152) (30,540)
Increase (decrease) in accounts payable
and accrued liabilities (429,189) 248,181
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102,240 1,441,011
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Cash flows used in financing activities:
Decrease in bank loan - (220,000)
Repayments on long-term debt (444,445) (814,814)
Imputed interest on long-term debt (note 6) (420,487) (217,526)
Repayment of convertible debentures (14,101,219) -
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(14,966,151) (1,034,814)
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Cash flows from (used in) investing activities:
Purchase of capital assets (138,964) (197,574)
Net proceeds from sale 15,147,081 -
Increase in short term investments (25,000) -
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14,983,117 (197,574)
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Net change in cash 119,206 208,623

Cash, beginning of year 322,613 113,990
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Cash, end of year $ 441,819 $ 322,613
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Supplemental cash flow information:
Interest paid on short-term debt $ 4,395 $ 4,798
Interest paid on short-term debt $ 441,966 $ 413,706
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Non-cash items:
Receivable on sale of Company's
assets (Note 2) $ 300,000 $ -
Payable to Series I debenture
holders (Note 7) $ 300,000 $ -
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See accompanying notes to consolidated financial statements.


FMX VENTURES INC. (formerly Footmaxx Holdings Inc.)
Notes to Consolidated Financial Statements

Years ended December 31, 2007 and 2006


The Company was in the business of manufacturing, distributing and selling foot orthotics and associated computer systems for specifying custom foot orthotics in Canada and internationally.

On November 1, 2007, the Company had completed the sale of substantially all of the assets utilized in carrying on its orthotics business and the assumption of obligations related to the Company's business. The shareholders of the Company also completed a name change for the Company from Footmaxx Holdings Inc. to FMX Ventures Inc. The Company no longer has any ongoing operations and it is exploring potential alternatives to maximize the final payout to the shareholders through the sale of the shell company and its accumulated tax losses.

1. Significant accounting policies:

(a) Basis of presentation:

The accompanying consolidated financial statements include the accounts of FMX Ventures Inc. (formerly Footmaxx Holdings Inc.) and its wholly owned subsidiaries, Footmaxx International Inc., Footmaxx Limited and Footmaxx Inc. All significant intercompany balances and transactions have been eliminated upon consolidation.

(b) Change in accounting policy

On January 1, 2007, the Company adopted the new recommendations of the Canadian Institute of Chartered Accountants (CICA) Handbook Section 1530, Comprehensive Income; Section 3251, Equity; Section 3855, Financial Instruments - Recognition and Measurement; Section 3861, Financial Instruments - Disclosure and Presentation; and, Section 3865, Hedges, retrospectively without restatement of comparative figures. These new Handbook Sections, which apply to fiscal years beginning on or after October 1, 2006, provide requirements for the recognition and measurement of financial instruments and on the use of hedge accounting. Section 1530 establishes standards for reporting and presenting comprehensive income, which is defined as the change in equity from transactions and other events from non-owner sources. Other comprehensive income refers to items recognized in comprehensive income that are excluded from net income calculated in accordance with Canadian generally accepted accounting principles.

Under the new standards, policies followed for periods prior to the effective date generally are not reversed and therefore, the comparative figures have not been restated. The adoption of these Handbook Sections had no material impact on opening deficit.

Upon adoption of these new standards, the Company has designated its cash and short term investment as held-for-trading, which are measured at fair value. Accounts receivable and other receivable are classified as loans and receivables, which are measured at amortized cost. Accounts payable, accrued liabilities, long-term debt and convertible debentures are classified as other liabilities and measured at amortized cost.

On adoption, the deferred financing costs were netted against the related long-term debt and amortized using the effective interest method.

The Company had no other comprehensive income or loss transactions during the year ended December 31, 2007, and no opening or closing balances for accumulated other comprehensive income or loss.

(C) Inventory:

Raw materials are stated at the lower of cost and net realizable value. Cost is generally determined on the first-in, first-out basis. Work in process and finished goods are stated at the lower of average cost and net realizable value.

Computer footmats and the associated computer hardware (revenue-generating systems) that are intended for resale are included in inventory.

(d) Capital assets:

Capital assets are recorded at cost less accumulated amortization. Terms of amortization applied by the Company to amortize the cost of the capital assets over their estimated useful lives, on a straight-line basis, are as follows:



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Leasehold improvements over the terms of the lease
Furniture, fixtures and equipment 10 years
Computer hardware 2 - 5 years
Computer software 2 - 5 years
Dies and moulds 20 years

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(e) Impairment of long-lived assets:

The Company follows CICA Handbook Section 3063, "Impairment of Long-Lived Assets", which requires the Company to test for impairment loss of long-lived assets to be held and used when events or changes in circumstances occur which may cause their carrying value to exceed the total undiscounted cash flows expected from their use and eventual disposition. An impairment loss, if any, is determined as the excess of the carrying value of the asset over its fair value.

(f) Deferred financing costs:

Costs incurred to obtain long-term financing are netted with the related long-term debt and amortized over the term of such debt using the effective interest method.

(g) Income taxes:

The Company follows the asset and liability method of accounting for income taxes. Under this method, future tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Future tax assets and liabilities are measured using enacted or substantively enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. In addition, the effect on future tax assets and liabilities of a change in tax rates is recognized in income in the year that includes the enactment or substantive enactment date. Future income tax assets are recognized and if realization is not considered more likely than not, a valuation allowance is provided.

(h) Stock based compensation:

The Company has a stock-based compensation plan, which is described in note 9.

The Company follows CICA Handbook section 3870, "Stock Based Compensation and other Stock-Based Payments". These standards require that direct awards of stock or liabilities incurred, or other compensation arrangements that are based on the price of the common stock, be measured at fair value at each reporting date, with the change in the fair value reported in the statement of operations. The standard did not impact the Company's financial position.

(i) Earnings per share

The Company uses the provisions of "CICA" Handbook section 3500, "Earnings per Share." Basic earnings per share is computed using the weighted average number of common shares that are outstanding during the year. Diluted earnings per share is computed using the weighted average number of common and potential common shares outstanding during the year. Potential common shares consist of the potential shares issuable upon conversion of convertible debt using the converted method.

(j) Revenue recognition:

The Company recognizes revenue from sales of orthotics, proprietary computer equipment, footwear and other accessories for orthopaedic products when shipment occurs, title is transferred to customers and collection is reasonably assured. Revenue is recorded at the invoice price for each product net of estimated returns and incentives provided to customers.

(k) Research and development:

Research costs are expensed in the year in which they are incurred. Development costs are expensed in the year incurred unless such costs meet the criteria for deferral and amortization under Canadian generally accepted accounting principles. To date, there have been no deferred development costs.

(l) Translation of foreign currency:

The results of foreign operations, which are financially and operationally integrated with the Company, are translated using the temporal method. Under this method, monetary assets and liabilities denominated in foreign currencies have been translated into Canadian dollars at the rates of exchange prevailing at year end. Capital assets have been translated at the rates prevailing at the dates of acquisition. Amortization is translated at the rates prevailing when the related assets were acquired. Revenue and expense items, other than amortization, are translated at the average rates of exchange for the year. Any exchange gains or losses are recorded in income.

(m) Use of estimates:

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the year. Actual results could differ from those estimates.

2. Sale of the company's assets

On September 6, 2007 the Company entered into an Asset Purchase Agreement for the sale of substantially all of its operating assets to Footmaxx of Canada ULC, Footmaxx of Virginia Inc. and Footmaxx of New Hampshire Inc. for an aggregate consideration of $ 16,300,000 and assumption of obligations related to the company's business. This transaction closed on November 1, 2007 and funds in the amount of $16,300,000 were paid to Footmaxx Holdings Inc. to be allocated among the subsidiaries. The funds were used to retire the convertible debentures and pay other costs relating to the closing of the transaction. $300,000 of the proceeds are held in escrow by the Company's lawyer for a one year holding period and bear interest at RBC bank's prime rate. Pursuant to the Asset Purchase Agreement, any indemnification liability of the Company shall be limited to $300,000 plus any interest accrued thereon. Any balance of funds remaining in escrow, after any claims the purchaser may have against the escrow have been settled, will be paid to the Series I debenture holders in the same allocation as their original investment as described in note 7. The gain on sale of company's assets is calculated as follows:



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Proceeds $ 16,300,000
Less: Legal fees 167,605
Consultant fees 62,012
Severance and bonus (i) 587,298
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Net proceeds 15,483,085
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Less carrying amounts of net current assets and liabilities
Cash 36,004
Accounts receivable 1,444,051
Inventory 551,106
Other assets 44,643
Accounts payable and accrued liabilities (628,216)
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1,447,588
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14,035,497

Net book value of capital assets sold 460,266
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Gain on sale $ 13,575,231
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(i) Total severance and bonuses of $1,264,282 were paid to the executives of
the Company upon the sale of the Company's assets. Of this amount,
$587,298 was netted against the gain on sale, and $676,984 was included
as selling and administrative expenses in the statement of operations.


3. Short term investment

The short term investment consists of a guaranteed investment certificate which bears interest at a rate of 3.5% per annum and matures on November 27, 2008.



4. Inventory

In 2007, all inventories were sold during the year.

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2007 2006
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Computer footmats and hardware $ - $ 47,229
Orthotic raw materials and components - 200,984
Resale products, non-prescription insoles
and sandal chassis - 186,320
$ - $ 434,533
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5. Capital assets

2007
----

All capital assets were sold during the year.

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Accumulated Net book
2006 Cost amortization value
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Leasehold improvements $ 480,451 $ 439,105 $ 41,346
Furniture, fixtures and
equipment 1,012,380 904,606 107,774
Computer hardware 2,126,292 1,939,526 186,766
Computer software 1,219,321 1,219,321 -
Dies and moulds 510,432 312,805 197,627
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$ 5,348,876 $ 4,815,363 $ 533,513
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6. Long-term debt

On May 31, 2002, the Company secured a loan for $4,000,000 from Penfund Mezzanine Fund to facilitate the redemption of the majority of the Series II debentures. This loan matured on May 31, 2007 and bore annual interest at a rate of 14% paid monthly. In addition, there are bonus interest payments to be paid on the yearly anniversary of the loan. These payments are $50,000 for 2003, $100,000 for 2004, $150,000 for 2005, $300,000 for 2006 and $425,000 for 2007. Factoring these bonus interest payments into account, the effective interest rate is approximately 23.2%. The imputed interest accrued to long-term debt for the year was ($420,487) (2006 - ($217,526)).

During 2007 the company paid the remaining $444,445 of principal and $446,480 in interest. These payments in 2007 completed the Company's obligations under this loan agreement.

The Penfund Mezzanine Fund loan had two financial covenants as part of the agreement. The first is the ratio of concentration debt to EBITDA. Concentration debt is defined as the total of the outstanding Penfund Mezzanine Fund loan plus the outstanding Royal Bank line of credit at the end of each quarter. The covenant requires that the Company maintain a ratio of not more than 3.0 to 1.0.

The second covenant refers to the ratio of earnings before interest and taxes ("EBIT") to concentration interest with concentration interest defined as the interest on the Penfund Mezzanine Fund loan and the Royal Bank line of credit.

The covenant of the Mezzanine Fund loan and the Royal Bank line of credit requires that the Company achieve an EBIT to concentration interest ratio of not less than 2.0 to 1.0.

The Company was in compliance for both these covenants for 2007.

7. Convertible debentures

The convertible debentures consist of Series l debentures with a face value of $6,556,530, Series II debentures with a face value of $1,233,149, Series III debentures with a face value of $1,116,480 and Series IV debentures with a face value of $1,000,000. These convertible debentures matured on June 30, 2007. Series I became non-interest bearing as of March 31, 2002. Series II bear interest at 24%, Series III at 12% and Series IV at 14%. All interest is compounded quarterly in arrears. As at October 31, 2007, interest of $7,111,993 had accrued on these convertible debentures and was included in the balance of convertible debentures. The interest accrued was split between the debentures as follows:



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2007 2006
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Series I debentures $ 822,903 $ 822,903
Series II debentures 3,866,932 2,966,142
Series III debentures 1,315,059 1,086,989
Series IV debentures 1,107,099 878,863
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$ 7,111,993 $ 5,754,897
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On November 1, 2007 the company received the $ 16,300,000 proceeds from the sale of the company. With the majority of these funds the company paid $ 14,101,219 to the debenture holders for full satisfaction of all outstanding debentures. An amount of $ 2,107,099 was paid to satisfy Debenture IV's $1,000,000 in principal and $ 1,107,099 in accrued interest. An amount of $ 2,431,538 was paid to fully satisfy Debenture III's $ 1,116,480 principal and $1,315,058 accrued interest. An amount of $ 5,100,081 was paid to satisfy Debenture II's $ 1,233,149 principal and $ 3,866,932 accrued interest. An amount of $ 4,462,500 was paid to partially retire Debenture I's principal leaving $2,093,843 in principal and $ 822,903 in accrued interest outstanding. The amount of $2,616,746 was forgiven by the holders of Debenture I. The remaining balance of $300,000 which is the amount of the funds held in escrow was moved to an interest free liability owed to the Series I debenture holders. Under a separate direction, the balance of any escrow funds will be paid to the Series I debenture holders, in the same proration as their original holdings, on November 1, 2008.

The majority of the convertible debentures were held by two significant shareholders. Of the $2,616,746 forgiven amount, $2,119,715 was credited to contributed surplus as it is considered a related party transaction. The remaining $497,031 has been reflected as a gain on settlement in the statement of operations.



8. Capital stock

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2007 2006
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Authorized:
Unlimited Class B preferred shares, issuable
in series with rights, privileges, restrictions
and conditions to be determined by the directors
on issue
Unlimited common shares Issued:
39,342,894 (2006 - 41,131,205) common shares $ 20,248,082 $ 20,248,082
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On November 28, 2007 the President returned to treasury, 1,788,311 shares that represented options he had exercised. The President had been given a loan from the Company which upon return of the shares that secured the loan, the loan has been cancelled. The loan ($178,831) was previously deducted from capital stock.



9. Stock option plan

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2007 2006
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Weighted Weighted
average average
Number exercise Number exercise
of shares price of shares price

Outstanding,
beginning of year - $ - 1,014,871 $ 0.10
Retired - - 1,014,871 0.10
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Outstanding,
end of year - $ - - $ 0.10
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Stock options
exercisable,
end of year - $ - - $ 0.10
Weighted average
remaining
contractual life N/A N/A
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The Company had previously granted stock options to employees, directors and members of the advisory board of the Company. The stock options vested over varying time periods from the date of grant to four years and expire approximately five years from the date of grant. As of December 31, 2007, all of the options have expired and none remained outstanding.

10. Income taxes

The average statutory Canadian income tax rate for the year ended December 31, 2007 was 36.12% (2006 - 36.12%). A comparison of nominal provisions at these rates, with the amounts provided in the consolidated statements of operations, comprehensive income (loss) and deficit, is as follows:



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2007 2006
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Income (loss) before income taxes $ 13,205,763 $ (384,071)
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Income tax expense (recovery) at average
statutory Canadian income tax rate $ 4,769,922 $ (138,726)
Expiry of non-capital loss carry-forwards 75,994 395,675
Decrease in income taxes due to
change in valuation allowance (3,513,730) (293,644)
Non-taxable portion of the gain on sale (2,562,497) -
Gain on settlement of debt recorded as
contributed surplus 765,641 -
Change in substantively enacted tax rates 388,763 -
Other 75,907 36,695
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$ - $ -
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A summary of the principal components of future tax assets and liabilities
at December 31 are as follows:

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2007 2006
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Future tax assets:
Non-capital loss carry forwards $ 5,003,175 $ 6,708,348
Capital assets - 777,565
Inventory - 895,129
General reserves and goodwill 11,522 13,561
Interest 982,763 1,192,335
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5,997,460 9,586,938
Less valuation allowance 5,997,460 9,511,190
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- 75,748
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Future tax liabilities:
Capital assets - 75,748
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Net future tax assets $ - $ -
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The Company has available non-capital loss carry forwards for income tax purposes of approximately $14,800,000 (2006 - $18,600,000) to be applied against future years' taxable income, the benefit of which has not been recorded in the accounts of the Company. The losses expire as follows:



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2010 $ 2,275,916
2015 39,079
2018 3,748,108
2019 1,587,490
2026 1,530,102
2027 5,657,072
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$ 14,837,767
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11. Earnings (loss) per common share

The following table sets forth the computation of basic and diluted earnings
(loss) per share:

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2007 2006
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Numerator of basic EPS calculation:
Net income (loss) $ 13,205,763 $ (384,071)

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Denominator:
Denominator for basic net earnings
(loss) per share
- weighted average shares outstanding 39,842,640 41,131,205

Effect of dilutive potential common
shares issuable:
- under conversion of debentures - 156,610,564

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Denominator for diluted net earnings
(loss) per share 39,842,640 197,741,769

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Basic earnings (loss) per common share $ 0.33 $ (0.01)

Fully diluted earnings (loss) per
common share $ 0.33 $ (0.01)
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For fully diluted loss per share in 2007, the numerator is $13,205,763 and the denominator is the same as for basic earnings per share. Since there are no longer any convertible debentures, the net income number and the weighted average number of shares outstanding are the same for both basic and diluted earnings per share.

12. Related party transactions

The Company had no other related party transactions for the years ended December 31, 2007 and 2006, except those related to the debenture holders outlined in note 7.

13. Financial instruments

The carrying values of cash, accounts receivable, other receivable, short tem investments and accounts payable and accrued liabilities approximate their fair values due to the relatively short periods to maturity of the instruments.

The fair values of the short tem investments are determined by using published price quotations in an active market.

Interest rate and credit risk:

Interest rates, maturities and security affecting the interest and credit risk of the Company's financial assets and liabilities have been disclosed in notes 3 and 6.

Due to the Company's circumstances, the fair value of the debt cannot be reliably determined.

Derivative financial instruments:

The Company has utilized certain financial instruments, principally forward currency exchange contracts to manage the risk associated with fluctuations in currency exchange rates to reduce the impact on the Company's sales, purchases of materials and equipment. The Company's policy is not to utilize financial instruments for trading or speculative purposes. As at December 31, 2007, the Company had no forward contracts in place for 2008. As at December 31, 2006, the Company committed to sell a total of US$2,050,000 and buy a total of US$400,000 at an average exchange rate of 1.1358, with maturity dates ranging from January 2007 to December 2007. At December 31, 2006, the unrealized calculated loss on these contracts was approximately $58,000 and was recorded in the 2006 Statement of Operations and Deficit.

Foreign currency risk:

The Company undertakes revenue and purchase transactions in foreign currencies, and therefore is subject to gains and losses due to fluctuations in foreign currency exchange rates. A portion of this risk has been mitigated through forward currency exchange contracts, as described above.

14. Segmented information

The Company operates in Canada and internationally in one dominant industry segment (foot orthotics and associated computer systems). Revenue is attributed to geographic areas based on location of customer. International sales are predominantly sales to the United States.



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2007 2006
----------------------------------------------------------------------------

Revenue:
Canada $ 5,778,103 $ 6,871,840
International 5,212,422 6,492,065
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$ 10,990,525 $ 13,363,905
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----------------------------------------------------------------------------

Gross profit:
Canada $ 3,085,694 $ 3,715,770
International 2,630,639 3,203,548
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$ 5,716,333 $ 6,919,318
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----------------------------------------------------------------------------

Capital assets:
Canada $ - $ 323,803
International - 209,710
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$ - $ 533,513
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15. Contingent Liabilities

A lawsuit has been filed against the company for incidents which arose in the ordinary course of business. In the opinion of management and legal counsel, the outcome of the lawsuit, now pending, is not determinable. Should any loss result from the resolution of these claims, such loss will be charged to operations in the year of resolution.

16. New Accounting Pronouncements

Standards of Financial Statement Presentation

In June 2007, the CICA released new Handbook Section 1400, General Standards of Financial Statement Presentation, effective for annual and interim periods beginning on or after January 1, 2008. This new section provides additional guidance related to management's assessment of the Company's ability to continue as a going concern. This revision is effective for fiscal years beginning on or after October 1, 2008. The Company does not anticipate any significant impact to its financial statements as a result of the new disclosure recommendations in this section.

Financial Instruments and Capital Disclosures

In December 2006, the CICA released new Handbook Sections 1535, Capital Disclosures, Section 3862, Financial Instruments-Disclosures, and Section 3863, Financial Instruments-Presentation, effective for annual and interim periods relating to fiscal years beginning on or after October 1, 2007. Section 1535 establishes disclosure requirements about an entity's capital and how it is managed. The purpose will be to enable users of the financial statements to evaluate objectives, policies and processes for managing capital. Sections 3862 and 3863 will replace section 3861, Financial Instruments - Disclosure and Presentation, revising and enhancing its disclosure requirements while carrying forward its presentation requirements. These new sections place increased emphasis on disclosure about the nature and extent of risks arising from financial instruments and how the entity manages those risks. The Company will begin application of these sections effective January 1, 2008.

Harmonizing Of Canadian and International Standards

On February 13, 2008, the Canadian Accounting Standards Board confirmed that the use of International Financial Reporting Standards ("IFRS") would be required in 2011 for publicly accountable profit-oriented enterprises. The Company will closely monitor changes arising from this transition to IFRS.



FMX VENTURES INC.
formerly operating as FOOTMAXX HOLDINGS INC.
for the Year Ended December 31, 2007
Management Discussion and Analysis


April 28, 2008

Sale of the Company

During 2007, FMX Ventures Inc. completed the sale of substantially all of its assets utilized in carrying on its orthotics, diagnostic and distribution business for aggregate cash consideration of $16,300,000 and obligations related to the Company's business. The proceeds from the asset sale have been applied primarily to retire the Company's outstanding debentures and to satisfy costs associated with the transaction.

The Company no longer has any ongoing operations and is exploring potential alternatives to maximize the final payout to the shareholders through the sale of the shell company and its accumulated tax losses. This process is expected to be completed during 2008.

Overall Performance

Revenue in 2007 was $10,990,525, a decrease of $2,373,380 or 17.8% from $13,363,905 in 2006. The primary reason for the decrease was the reduced operating period of ten months versus twelve months in 2006. EBITDA decreased by $815,300 from $1,582,726 in 2006 to $767,426 in 2007, primarily due to the reduced operating period. Net income for 2007 was $13,205,763 and included a $13,575,231 gain on the sale of the Company's assets and a $497,031 gain on settlement of the Series I Debentures.

Results of Operations

Non-GAAP Measures

In the Management Discussion and Analysis, and elsewhere, measures such as earnings before interest, taxes, depreciation and amortization (EBITDA) and other terms that are used are not defined by Canadian generally accepted accounting principles ("GAAP"). The use of these terms may not be consistent with the way these terms are used by others. Where possible, in particular for EBITDA, tables and other information are provided that enables readers to reconcile between such non-GAAP measures and standard GAAP measures. While these measures are not defined by or required by GAAP, this information is provided to readers to help them better understand the performance of the Company.

Revenue

Revenue for 2007 decreased by $2,373,380 or 17.8%, to $10,990,525 from $13,363,905 in 2006. The primary reason for the decrease was the reduced operating period of ten months in 2007 versus twelve months in 2006. During the ten month operating period for the Company in 2007, the decline in the value of the US dollar impacted year over year revenue negatively by $184,812 or 1.4%.

Revenue by Geographic Area



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$CDN (000's) 2007 % Total Sales 2006 % Total Sales
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Canada $5,778 52.6% $6,872 51.4%
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International (mainly USA) 5,213 47.4% 6,492 48.6%
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Total Sales $10,991 100.0% $13,364 100.0%
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The revenue in Canada for 2007 decreased 15.9% over 2006 primarily due to the operating period being two months shorter than in 2006. Year to year currency fluctuations due to the weakening of the US dollar against the Canadian dollar, impacted International revenue by 1.4%, in addition to the two month reduction in the revenue period.

Gross Profit

Gross Profit decreased $1,202,985 or 17.4% from $6,919,318 in 2006, to $5,716,333 in 2007. The gross profit decreased year over year due to the operating period being two months shorter than in 2006.

Gross Profit by Geographic Area



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$CDN (000's) 2007 % Gross Profit 2006 % Gross Profit
----------------------------------------------------------------------------
Canada $3,086 54.0% $3,716 53.7%
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International
(predominantly USA) 2,630 46.0% 3,203 46.3%
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Total Gross Profit $5,716 100.0% $6,919 100.0%
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Canadian and International gross profits decreased proportionately due to the shortened operating period for 2007.

Operating Expenses

Selling & Administrative expenses decreased $281,580 or 6.2% during 2007. The shorter operating period reduced expenses for Field Sales and Marketing accordingly however severance payments for management actually increased Finance and Administration costs offsetting the impact of the shorter operating period.



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Selling and Administration 2007 2006 Decr (Incr) %
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----------------------------------------------

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Field Sales Force $1,839,238 $2,458,840 $ 619,602 25.2%
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Marketing Expense 193,271 246,689 53,418 21.7%
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Finance and administration 2,242,154 1,850,714 (391,440) (21.1%)
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$4,274,663 $4,556,243 $ 281,580 6.2%
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Information Technology expenses decreased $120,786 from $838,136 in 2006 to $717,350 in 2007. The shorter operating period was the main reason.

Net Income (Loss)

Net Income for 2007 is $ 13,205,763, which is an increase of $13,589,834 over the $384,071 net loss recorded for 2006. The gain on the sale of the Company's assets of $13,575,231 and the gain on settlement of convertible debentures of $497,031, dramatically increased the net income for 2007. This was reduced by severance obligations for management and incremental legal costs generated by the sale of the company, which totaled approximately $690,000.

Summary of Quarterly Results



(000's) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
$CDN 2007 2007 2007 2007 2006 2006 2006 2006

Revenue $3,341 $3,448 $2,997 $1,205 $3,344 $3,449 $3,249 $3,322

Net
Income
(Loss) ($54.8) ($35.2) ($220.6)$13,516.4 $(78.7) $16.6 $(164.8)$(157.2)

Basic
Earnings
(Loss)
per
share ($0.00) $0.00 ($0.01) $0.34 ($0.00) $0.00 ($0.00) $0.00

Fully
Diluted
Earnings
(Loss)
per
share ($0.00) $0.00 ($0.00) $0.33 $0.00 $0.00 $0.00 $0.00


The Company increased its profitability slightly from 2006 to 2007 with the main difference between the two years being the shorter operating period and the major impact of the gain on the sale of the Company's assets in the fourth quarter in the amount of $13,575,231 and the gain on settlement of convertible debentures of $497,031.

EBITDA

Earnings before interest, taxes, depreciation and amortization (EBITDA) decreased by $815,300 from $1,582,726 in 2006 to $767,426 in 2007. Revenue, gross profit and operating expenses achieved were at a level similar to those in 2006 when taking into account the shortened operating period. However, there was approximately $817,000 in severance payments for management and legal expenses that were related to the sale of the Company's assets that reduced EBITDA to the reported level. EBITDA has been used by the Company historically to measure the cash flow profit generated by operations. EBITDA was also used in calculating some of the company's debt covenants for the Penfund long-term debt.



Dec 31,2007 Dec 31,2006
----------- -----------
Net income (loss) $13,205,763 ($384,071)

Add back(deduct):
Gain on settlement of series I debentures (497,031) ----
Gain on sale of the Company's assets (13,575,231) ----
Accrued Interest on convertible debentures 1,357,094 1,360,317
Interest on long term debt 21,480 196,180
Other interest 4,395 4,798
Amortization of capital assets 212,211 312,515
Amortization of deferred financing costs 38,745 92,987
----------- -----------
EBITDA $767,426 $1,582,726
----------- -----------
----------- -----------


Non-Capital Loss Carry Forwards for Canadian Entities

The Company has a total potential loss carry forward for income tax purposes of $17.8 million, made up of the following. As of December 31, 2007 the draft Canadian income tax returns indicate that the Company has available non-capital loss carry forwards for income tax purposes of approximately $9.5 million of which $2.3 million will expire in 2010 and the remaining balance in 2026 and 2027. The Canadian entities have intercompany balances with a US entity. This US entity is not operating and the intercompany balances will have to be written off. This will increase the loss carry forwards an additional $8.3 million leaving the Company with a total of $17.8 million in potential loss carry forward for income tax purposes.

Liquidity

The Company's cash balance as at December 31, 2007 was $441,819 plus a short term deposit certificate of $25,000. The sale of the Company's assets has allowed all debt to be fully repaid or forgiven except for the amount of $300,000. The $300,000 is held in escrow is related to the sale of the Company's assets, however these funds will be paid to the debenture holders once the escrow period has elapsed on November 1, 2008.

Cash flow

During 2007 the Company paid $444,445 in principal and $443,098 in accrued interest and interest expense on its long-term debt. The Company also made $138,964 worth of investment in capital assets, to benefit future revenue and expenses. Cash flow for the year was positive $119,206. There was no use of the bank line at the end of the year. Accounts receivable during the year were maintained at the 38 to 40 days outstanding level prior to the sale of the assets of the Company.

Capital Expenditures

During 2007, the Company made an investment in capital assets in the amount of $138,964, as compared with the $197,574 invested during 2006. The largest investment was in the orthotic ordering system equipment pool to meet the demand for trial and rental systems from customers. In addition, investments were made in software and hardware upgrades to improve the performance of internal operation and to protect and ensure the security of our operating systems.

Convertible debentures

The Company's convertible debentures matured on June 30, 2007. The Company received an extension for the payment of the convertible debentures until October 31, 2007. As a result of the proceeds received from the sale of the company's assets, $14,101,219 was paid to the debenture holders on November 1, 2007. This repaid all of the debentures except a balance of $2,916,746 of principal and interest owing on the Series I convertible debenture. The amount of $2,616,746 was forgiven by the holders of Debenture I. The remaining balance of $300,000, which is equal to the amount of the funds held in escrow, was moved to an interest free current liability owed to the Series I debenture holders less any claims the purchaser may have to be paid. Under a separate direction, the balance of any escrow funds will be paid to the Series I debenture holders, in the same proration as their original holdings, on November 1, 2008.

The majority of the Series 1 convertible debenture were held by two significant shareholders. Of the $2,616,746 forgiven $2,119,715 was credited to contributed surplus as it is considered a related party transaction. The remaining $497,031 has been reflected as a gain on settlement in the statement of operations.

Penfund Loan

The Penfund loan matured on May 31, 2007. On that date the Company paid all of the interest and principal owing including a $425,000 bonus interest payment fulfilling all of the remaining obligations under this loan. All security pledged against this loan has now been released.

Debt Covenants

During 2007, the Company was in compliance with all of its financial covenants.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements and does not expect to enter into any other such arrangement other than in the ordinary course of business.

Financial Commitments and Contractual Obligations

The Company no longer has any outstanding financial or contractual obligations.

2007 Fourth Quarter Results

The Company was only operating for the month of October so that any comparisons to the prior year's fourth quarter would be meaningless therefore they have not been presented.

2008 Financial Outlook

The Company no longer has any ongoing operations. However, the company is evaluating alternatives including the sale of the shell company or its tax losses with proceeds to be used as final payout to the shareholders.

Risk Factors

The Company ceased operations as of November 1, 2007 due to the sale of all its operating assets. Therefore any risk for the Company is minimal except to the extent of any purchaser claim against the escrow amount of $300,000 and a pending lawsuit of which the costs if any are not determinable at this time.

Disclosure of Outstanding Share Data

The information on the Company's share capital including numbers of shares outstanding are detailed in the Company's audited financial statements. The number of common shares outstanding as of the date of this report on April 28, 2008 is 39,342,894 shares.

Transactions with Related Parties

The Company has had no related party transactions during 2007 except for the settlement of the convertible debentures.

Oversight Role of the Audit Committee

The Audit Committee reviews, with management, the Company's quarterly MD&A and related consolidated financial statements and approves, to the Board of Directors, the release to shareholders. Management also periodically presents to the Audit Committee a report of their assessment of the Company's internal controls and procedures for financial reporting.

Forward-Looking statements

The foregoing may contain forward-looking statements. These statements are based on current expectations that are subject to risks and uncertainties, and the Company can give no assurance that these expectations are correct. Various factors could cause actual results to differ materially from those projected in such statements, including financial considerations and those predicting the timing and market acceptance of future products. The Company disclaims any intention or obligation to revise forward-looking statements whether as a result of new information, future developments or otherwise. All forward-looking statements are expressly qualified in their entirety by this Cautionary Statement.

Adoption of New Accounting Standards

On January 1, 2007, the Company adopted the new recommendations of the Canadian Institute of Chartered Accountants (CICA) Handbook Section 1530, Comprehensive Income; Section 3251, Equity; Section 3855, Financial Instruments - Recognition and Measurement; Section 3861, Financial Instruments - Disclosure and Presentation; and, Section 3865, Hedges, retrospectively without restatement. These new Handbook Sections, which apply to fiscal years beginning on or after October 1, 2006, provide requirements for the recognition and measurement of financial instruments and on the use of hedge accounting. Section 1530 establishes standards for reporting and presenting comprehensive income, which is defined as the change in equity from transactions and other events from non-owner sources. Other comprehensive income refers to items recognized in comprehensive income that are excluded from net income calculated in accordance with generally accepted accounting principles.

Under the new standards, policies followed for periods prior to the effective date generally are not reversed and therefore, the comparative figures have not been restated. The adoption of these Handbook Sections had no material impact on opening deficit.
Upon adoption of these new standards, the Company has designated its cash and short term investment as held-for-trading, which are measured at fair value. Accounts receivable and other receivable are classified as loans and receivables, which are measured at amortized cost. Accounts payable, accrued liabilities, long-term debt and convertible debentures are classified as other liabilities and measured at amortized cost.

On adoption, the deferred financing costs were netted against the related long-term debt and amortized using the effective interest method.

The Company had no other comprehensive income or loss transactions during the year ended December 31, 2007, and no opening or closing balances for accumulated other comprehensive income or loss.

Use of Financial Instruments

Fair value estimates of financial instruments are made at a specific point in time, based on relevant information about financial markets and specific financial instruments. As these estimates are subjective in nature, involving uncertainties and matters of significant judgement, they cannot be determined with precision. Changes in assumptions can significantly affect estimated fair values. The carrying value of cash, short term investment, accounts and other receivable, accounts payable and accrued liabilities approximate their fair value because of the short-term nature of these instruments. The Company is not subject to significant interest rate risks arising from these financial instruments. The Company is subject to currency risks since a significant portion of revenue, cost of sales and inventory purchases are denominated in foreign currencies, primarily the US dollar. Since both revenue is sold and inventory is purchased in the foreign currency, this risk is somewhat mitigated. The company is subject to credit risk but is able to minimize this risk by performing evaluations of its customers.

Critical Accounting Estimates

Management estimates are used when accounting for items and matters such as allowances for uncollectible accounts receivable, inventory obsolescence, valuation of financial instruments, warranty provision, valuation of goodwill and intangible assets, useful lives of long-lived assets, estimated future taxes including any valuation allowance, stock-based compensation, and provisions for contingent liabilities. By their nature, these estimates are subject to measurement uncertainty, and the effect on the financial statements of changes in estimates in future periods could be significant. FMX records an allowance for doubtful accounts for estimated credit losses based on customer and industry concentrations and the Company's knowledge of the financial condition of its customers. A change to these factors could impact the estimated allowance. FMX values its inventory on a first-in, first-out basis at the lower of cost (determined on a weighted average cost basis) and replacement cost for production parts, and at the lower of cost (determined on a weighted average cost basis) and net realizable value for raw materials and finished goods. FMX will write down inventory when management considers inventory to be excess or obsolete based upon assumptions about future demand and market conditions. A change to these assumptions could impact the valuation of inventory. FMX also provides for the estimated cost of product warranties based on certain assumptions relating to experience with existing customers.

Management's Responsibility for Financial Reporting

Disclosure Controls

The Company's Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO") have reviewed the disclosure controls in place as at December 31, 2007 and have concluded that they provide reasonable assurance that all material information relating to the Company would be made known to them. While the CEO and CFO believe that the Company's disclosure controls and procedures provide reasonable assurance they are also aware that any control system can only provide reasonable, not absolute, assurance of achieving its control objectives.

Internal Controls Over Financial Reporting

Management is also responsible for the design of internal controls over financial reporting ("ICFR") within the Company in order to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with Canadian generally accepted accounting principles ("Canadian GAAP"). Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, the design of any system of control is based upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all future events, no matter how remote, or that the degree of compliance with the policies or procedures may not deteriorate. Accordingly, even effective ICFR can only provide reasonable, not absolute, assurance of achieving the control objectives for financial reporting. Based on an the initial evaluation of the overall control structure and in accordance with criteria established in Multilateral Instrument 52-109 the following disclosable weaknesses existed, as at December 31, 2007 and require internal control improvements.

Limited Resources - Segregation of Duties

Given the Company's size it had limited resources within the finance department to adequately segregate duties and to permit or necessitate the comprehensive documentation of all policies and procedures that form the basis of an effective design of ICFR. As a result, the Company is highly reliant on the knowledge of a limited number of employees and on the performance of mitigating procedures during its financial close process to ensure that the consolidated financial statements are presented fairly in all material respects. As of December 31, 2007 the Company had done an initial documentation of its key accounting policies and procedures to determine where weaknesses existed. The Company has retained an experienced practitioner to assist in completing the process of comprehensively documenting and disseminating all policies and procedures that could have an impact on financial reporting.

Number of Common Shares issued to date - 39,342,894

Contact Information