FMX Ventures Inc.
NEX BOARD : FMX.H

May 08, 2009 20:50 ET

FMX Ventures Inc.: Financial Statements and MD&A for the 12 Months Ended December 31, 2008

TORONTO, ONTARIO--(Marketwire - May 8, 2009) - FMX Ventures Inc. (NEX BOARD:FMX.H) -

As a result of sale of its orthotics business in November, 2007, the only remaining material assets of the Company are its tax loss carryforwards and its listing and status as a reporting issuer. Accordingly, the board of directors initiated a process to determine the marketable value of the tax losses and reporting issuer status pursuant to which a wide range of entities, including legal, tax, financial and consulting firms, have been solicited to determine their interest in potentially acquiring the benefit of the Company's tax losses and reporting issuer status. The Company received certain informal proposals and inquiries which it considered but none resulted in an acceptable agreement. As a result during the month of February 2009, with limited resources available to the Company, the board put forth a proposal to dissolve the company.

A shareholders meeting was held on March 27, 2009 after all shareholders were duly notified. A vote was taken on that date and the shareholders approved the proposed voluntary dissolution of FMX Ventures Inc. However, on April 17, 2009 an agreement was made by new investors to acquire the shares of our two major shareholders. As part of the arrangement a deposit of $50,000 was made to the Company to fund the annual filing requirements.

During the twelve months ended December 31, 2008, the Company did not operate due to the sale late last year of all of the Company's assets and operations. The Company had a $ $312,725 net loss during this period primarily relating to expenses for legal, accounting and administrative expenses to support its public listing and for the ongoing marketing of the company and its tax losses.

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.

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




Consolidated Financial Statements of

FMX VENTURES INC.
(Formerly Footmaxx Holdings Inc.)

Years ended December 31, 2008 and 2007

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Auditors' Report

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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, 2008 and 2007 and the consolidated statements of operations, comprehensive income (loss) and deficit, shareholders' equity (deficiency) 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, 2008 and 2007 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

May 8, 2009



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

December 31, 2008 and 2007

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2008 2007
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Assets

Current assets:
Cash $ 124,951 $ 441,819
Short term investment (Note 4) 25,573 25,000
Accounts receivable, net 2,425 11,277
Other receivable (Note 3) - 300,000
Other assets - 31,881
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$ 152,949 $ 809,977
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Liabilities and Shareholders' Equity

Current liabilities:
Accounts payable and accrued
liabilities (Note 5) $ 45,836 $ 390,139
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Shareholders' equity
Capital stock (Note 6) 20,248,082 20,248,082
Contributed surplus (Note 5) 2,119,715 2,119,715
Deficit (22,260,684) (21,947,959)
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107,113 419,838
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$ 152,949 $ 809,977
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See accompanying notes to consolidated financial statements.

On behalf of the Board:

Lenny Simak, Director

Ryan Farquhar, Director



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

Years ended December 31, 2008 and 2007

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2008 2007
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Sales $ - $ 10,990,525

Cost of goods sold - 5,274,192
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Gross profit - 5,716,333
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Expenses:
Selling and administration (Note 3) 320,299 4,274,663
Information technology - 717,350
Accrued interest on
convertible debentures - 1,357,094
Interest on long-term debt - 21,480
Other interest (income) (573) 4,395
Foreign exchange gain (3,664) (43,106)
Amortization of capital assets - 212,211
Amortization of deferred financing costs - 38,745
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316,062 6,582,832
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Loss before income taxes and
undernoted items (316,062) (866,499)


Gain on settlement of convertible
debentures (Note 5) - 497,031
Gain on sale of Company's assets (Note 3) - 13,575,231
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Income (loss) before income taxes (316,062) 13,205,763

Income taxes recovery (Note 9) (3,337) -
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Net income (loss) and total
comprehensive income (loss) (312,725) 13,205,763
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Deficit, beginning of year (21,947,959) (35,153,722)
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Deficit, end of year $ (22,260,684) $ (21,947,959)
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Basic earnings (loss) per common
share (note 10) $ (0.01) $ 0.33

Diluted earnings (loss) per common
share (note 10) $ (0.01) $ 0.33
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See accompanying notes to consolidated financial statements.



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

Years ended December 31, 2008 and 2007

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Number of Contri- Equity
Common Capital buted (Defic-
Shares Stock Surplus Deficit iency)
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Note 6 6 5
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Balance,
December
31, 2006 41,131,205 $ 20,248,082 $ - $ (35,153,722)$ (14,905,640)

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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Net Loss - - - (312,725) (312,725)

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Balance,
December
31, 2008 39,342,894 $ 20,248,082 $ 2,119,715 $ (22,260,684) $ 107,113
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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, 2008 and 2007

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2008 2007
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Cash flows from (used in)
operating activities:
Net income (loss) $ (312,725) $ 13,205,763
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
Amortization of deferred financing
costs - 38,745
Accrued interest on convertible
debentures - 1,357,094
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(312,725) 741,551
Change in non-cash operating
working capital:
Decrease (increase) in accounts
receivable and other receivable 308,852 (86,397)
Decrease (increase) in inventory - (116,573)
Decrease (increase) in other assets 31,881 (7,152)
Increase (decrease) in accounts
payable and accrued liabilities (344,303) (429,189)
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(316,295) 102,240
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Cash flows used in financing activities:
Repayments on long-term debt - (444,445)
Imputed interest on long-term debt - (420,487)
Repayment of convertible debentures - (14,101,219)
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- (14,966,151)
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Cash flows from (used in) investing
activities:
Purchase of capital assets - (138,964)
Net proceeds from sale - 15,147,081
Increase in short term investment (573) (25,000)
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(573) 14,983,117
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Net change in cash (316,868) 119,206

Cash, beginning of year 441,819 322,613
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Cash, end of year $ 124,951 $ 441,819
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Supplemental cash flow information:
Interest paid on short-term debt $ - $ 4,395
Interest paid on long-term debt $ - $ 441,966
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Non-cash items:
Receivable on sale of Company's
assets (Note 3) $ - $ 300,000
Payable to Series I debenture
holders (Note 5) $ - $ 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, 2008 and 2007

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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 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 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.

These consolidated financial statements have been prepared on the basis that the Company will continue as a going concern, which assumes the realization of assets and the settlement of liabilities in the normal course of business. The Company has a positive working capital at year end, but has incurred losses to date of $22.3 million which includes an operating loss for the current year of $312,725. The continuation of the Company is dependent upon the Company's ability to generate future profitable operations through the sale of the shell company.

(b) Changes in accounting policies

On January 1, 2008, the Company adopted the following new and amended Canadian Institute of Chartered Accountants (the "CICA") accounting standards.

Section 1400 - General Standards of Financial Statement Presentation

This section describes the requirements for management to assess the entity's ability to continue as a going concern and to disclose material uncertainties related to events and conditions that may cast significant doubt on the entity's ability to continue as a going concern.

Section 1535 - Capital Disclosures

This section requires the Company to disclose its objectives, policies and processes for managing capital. Additional disclosure has been provided in Note 12 to the Company's consolidated financial statements.

Section 3862 - Financial Instruments - Disclosures and Section 3863 - Financial Instruments Presentation

These sections enhance the disclosure requirements and carry forward unchanged its presentation requirements. These new sections place increased emphasis on disclosures about the nature and extent of risks arising from financial instruments and how the Company manages those risks. Additional disclosure has been provided in Note 11 to the Company's consolidated financial statements.

The above noted new and amended CICA standards have no material impact on the classification and measurement in the Company's consolidated financial statements.

(c) 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.

(d) Stock based compensation:

The Company has a stock-based compensation plan, which is described in note 6.

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.

(e) 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.

(f) Revenue recognition:

The Company recognizes interest revenue on an accrual basis as it is earned.

(g) 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.

(h) 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 operations.

(i) 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. New accounting pronouncements

Section 1582 - Business Combinations

Section 1582 replaces Handbook Section 1581 "Business Combinations" and improves the relevance, reliability and comparability of the information that the entity provides in its financial statements about a business combination and its effects. This section is applicable to the annual and interim financial statements of the Company beginning on or January 1, 2011, with early adoption permitted. The Company is in the process of evaluating the impact of this standard.

Section 1601 - Consolidations and Section 1602 - Non-controlling Interests

The CICA Section 1601 establishes standards for the preparation of consolidated financial statements. CICA Section 1602 establishes standards for accounting for a non-controlling interest in a subsidiary in consolidated financial statements subsequent to a business combination. These standards are applicable to interim and annual financial statements of the Company beginning on January 1, 2011. The Company is in the process of evaluating the impact of these standards.

Section 3064 - Goodwill and Intangible Assets and Section 1000 - Financial Statement Concepts

In February 2008, the CICA released new Handbook Section 3064 "Goodwill and intangible assets", replacing Handbook Section 3062 "Goodwill and Intangible Assets" and Handbook Section 3450 "Research and development costs". This new section is effective for annual periods beginning on or after October 1, 2008. The CICA also amended Handbook Section 1000 "Financial Statements Concepts" to provide consistency with this new standard. Accordingly, the Company will adopt the new sections for its fiscal year beginning January 1, 2009. Section 3064 establishes standards for the recognition, measurement, presentation and disclosure of goodwill subsequent to its initial recognition and of intangible assets by profit-oriented enterprises. This section clarifies that costs can be deferred only when they relate to an item that meets the definition of an asset and as a result start-up costs must be expensed as incurred. The provisions relating to the definition and initial recognition of intangible assets, including internally generated intangible assets, are equivalent to the corresponding provisions of International Financial Reporting Standards IAS 38 "Intangible Assets". The Company has considered the effect of the new standard and determined that the adoption of the requirements will have no impact on the Company's consolidated financial statements.

Harmonizing of Canadian and International Financial Reporting Standards

In February, 2008, the Accounting Standards Board ("AcSB") of the CICA confirmed that Canadian GAAP for publicly accountable enterprises will be converged with International Financial Reporting Standards ("IFRS") effective in the calendar year 2011. The conversion to IFRS will be required, for the Company, for interim and annual financial statements beginning on January 1, 2011. IFRS uses a conceptual framework similar to Canadian GAAP, but there are significant differences on recognition, measurement and disclosures. In the period leading up to the conversion, the AcSB will continue to issue accounting standards that are converged with IFRS such as IAS 2 "Inventories" and IAS 38 "Intangible Assets", thus mitigating the impact of adopting IFRS at the mandatory transition date. Due to the limited scope of the Company's present operations, the Company has not yet invested significant resources in planning for the adoption of IFRS. While the Company has begun assessing the adoption of IFRS, commencing January 1, 2011, the financial impact of the transition to IFRS cannot be reasonably estimated at this time.

3. 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 were held in escrow by the Company's lawyer for a one year holding period and bearing interest at the 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 4. In 2008, the $300,000 of funds in escrow were returned to the Company. The gain on sale of company's assets was 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.

4 Short term investment

The short term investment consists of a guaranteed investment certificate which bears interest at a rate of 1.25% (2007 - 3.5%) per annum and matures on November 27, 2009 (2007 - November 27, 2008). Subsequent to the year-end, the Company cashed out the short term investment on February 28, 2009.

5. Convertible debentures

The convertible debentures consisted of Series l debentures with a acef 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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2008 2007
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Series I debentures $ - $ 822,903
Series II debentures - 3,866,932
Series III debentures - 1,315,059
Series IV debentures - 1,107,099
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$ - $ 7,111,993
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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 $1,315,059 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 was to be paid to the Series I debenture holders, in the same proration as their original holdings, on November 1, 2008. On November 1, 2008, the $300,000 was paid to the Series I debenture holders.

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 had been reflected as a gain on settlement in the statement of operations in fiscal year 2007.

6. Capital stock



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2008 2007
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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 (2007 - 39,342,894)
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.

7. Stock option plan

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, 2008 and 2007, all of the options have expired and none remained outstanding.

8. Related party transactions

The Company had no other related party transactions for the years ended December 31, 2008 and 2007, except those related to the debenture holders outlined in note 5.

9. Income taxes

The average statutory Canadian income tax rate for the year ended December 31, 2008 was 33.50% (2007 - 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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2008 2007
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Income (loss) before income taxes $ (316,062) $13,205,763
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Income tax expense (recovery) at average
statutory Canadian income tax rate $ (105,881) $ 4,769,922
Expiry of non-capital loss carry-forwards - 75,994
Increase (decrease) in income taxes due to
change in valuation allowance 217,942 (3,513,730)
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 (115,398) 75,907
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$ (3,337) $ -
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A summary of the principal components of future tax assets and liabilities
at December 31, 2008 are as follows:

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2008 2007
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Future tax assets:
Non-capital loss carry forwards $ 5,007,892 $ 5,003,175
General reserves and goodwill - 11,522
Interest 1,207,510 982,763
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6,215,402 5,997,460
Less valuation allowance 6,215,402 5,997,460
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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 (2007 - $14,800,000) 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 $ 1,018,156
2015 39,079
2018 4,605,262
2019 1,950,532
2026 978,851
2027 5,691,953
2028 492,697
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$ 14,776,529
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10. Earnings (loss) per common share

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

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2008 2007
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Numerator of basic EPS calculation:
Net income (loss) $ (312,725) $ 13,205,763

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Denominator:
Denominator for basic & diluted net earnings
(loss) per share - weighted average
shares outstanding 39,342,894 39,842,640

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

Fully diluted earnings (loss) per
common share $ (0.01) $ 0.33
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11. Financial Instruments

Fair value:

The carrying values of cash, short term investment, accounts receivable, other receivable and accounts payable and accrued liabilities approximate their fair values due to the relatively short periods to maturity of the instruments. The fair value of the short term investment is determined by using published price quotations in an active market.

Interest rate risk:

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to short term interest rate risk through the interest earned on cash and short term investment balances; however, management does not believe this exposure is significant. A 1% change in interest rates would have an insignificant impact on net income (loss).

Credit risk:

The Company is exposed to credit risk through its cash and short term investment which are held in large Canadian financial institutions. They Company believes this credit risk is insignificant.

Liquidity risk:

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company manages liquidity risk through the management of its capital structure. Accounts payable and accrued liabilities are due within the current operating period.

12. Capital Management

The Company manages its capital taking into account the long-term business objectives of the Company, to provide stability and reduce risk. The Company defines its capital structure as shareholders' equity. The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets.

13. Segmented information

The Company operated in Canada and internationally in one dominant industry segment (foot orthotics and associated computer systems) during fiscal year 2007. Revenue was attributed to geographic areas based on location of customer. International sales were predominantly sales to the United States.



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2008 2007
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Revenue:
Canada $ - $ 5,778,103
International - 5,212,422
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$ - $ 10,990,525
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Gross profit:
Canada $ - $ 3,085,694
International - 2,630,639
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$ - $ 5,716,333
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14. Contingent Liabilities

A lawsuit has been filed against the company for incidents which arose in the ordinary course of business. The lawsuit has been settled subsequent to the year end and the net cost of the settlement has been recognized as a liability for the year ended December 31, 2008.

15. Subsequent Events

In February 2009, the Board of Directors proposed to dissolve FMX Ventures Inc. as the company had limited funds to maintain its operating and listing status and as efforts to seek a buyer for its shell and tax losses had not resulted in any acceptable offers. Subsequently a shareholder meeting was arranged after proper notice and on March 27, 2009 a shareholder vote was taken and the proposal to dissolve the company was approved.

On April 17, 2009 an arrangement between a new investor and two of the Company's shareholders holding approximately 51% of the outstanding shares resulted in a $50,000 deposit being paid to the Company. At the request of these shareholders, the Company agreed not to proceed with the previously approved voluntary dissolution of the Company, and to prepare and file with applicable securities regulators and deliver to shareholders its financial statements and management's discussions and analysis for the year ended December 31, 2008 and for the first quarter ended March 31, 2009.



FMX VENTURES INC.
formerly operating as FOOTMAXX HOLDINGS INC.
for the Year Ended December 31, 2008
Management Discussion and Analysis


May 8, 2009

Overall Performance

As a result of sale of its orthotics business in November, 2007, the only remaining material assets of the Company are its tax loss carryforwards and its listing and status as a reporting issuer. Accordingly, the board of directors initiated a process to determine the marketable value of the tax losses and reporting issuer status pursuant to which a wide range of entities, including legal, tax, financial and consulting firms, have been solicited to determine their interest in potentially acquiring the benefit of the Company's tax losses and reporting issuer status. The Company received certain informal proposals and inquiries which it considered but none resulted in an acceptable agreement. As a result during the month of February 2009, with limited resources available to the Company, the board put forth a proposal to dissolve the company.

A shareholders meeting was held on March 27, 2009 after all shareholders were duly notified. A vote was taken on that date and the shareholders approved the proposed voluntary dissolution of FMX Ventures Inc. However, on April 17, 2009 an agreement was made by new investors to acquire the shares of our two major shareholders. As part of the arrangement a deposit of $50,000 was made to the Company to fund the annual filing requirements.

During the twelve months ended December 31, 2008, the Company did not operate due to the sale late last year of all of the Company's assets and operations. The Company had a $ $312,725 net loss during this period primarily relating to expenses for legal, accounting and administrative expenses to support its public listing and for the ongoing marketing of the company and its tax losses.

Results of Operations

Net Loss

Net loss for the twelve months ended December 31, 2008 was $312,725 which relates to accounting, legal, and other administrative services required to maintain the company's status as a publicly traded entity during the year.



Summary of Quarterly Results

(000's) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
$CDN 2008 2008 2008 2008 2007 2007 2007 2007

Revenue - - - - $3,341 $3,448 $2,997 $1,205

Net
Income
(Loss) ($48.3) ($73.4) ($131.3) ($59.7) $(54,8) $(35.2) $(220.6) $13,516.4

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

Fully
Diluted
Earnings
(Loss)
per
share $0.00 $0.00 ($0.01) $0.00 $0.00 $0.00 $ 0.00 $ 0.33


During the year ended December 31, 2008, the Company did not operate due to the sale of all of the Company's assets and operations late last year. The Company had a $312,725 net loss during the year primarily relating to expenses for legal, accounting and administrative expenses to support its public listing and the ongoing marketing of the company and its tax losses.

Liquidity

Cash Flow

Total cash outflow for 2008 was $316,868. The company has approximately $124,000 of cash in the bank which will be used to support the ongoing efforts to market the Company's public shell and tax losses over the coming months in addition to the year end audit and other required costs.

Convertible debentures

The Company's convertible debentures were satisfied as a result of the sale of the Company's assets on November 1, 2007 except for an amount of $300,000 that remained in escrow until November 1, 2008. The purchaser of the company, Footlevelers, did not indicate they had any claims to the escrow up to November 1, 2008. Subsequently the $300,000 escrow plus any accumulated interest was distributed to the holders of debenture series I, prorated as to the amount they had contributed.

Capital Resources and off-balance sheet arrangements

As of December 31, 2008, the Company had no commitments for capital expenditures and no off-balance sheet arrangements.

Related party transactions

For the year ended December 31, 2008, the Company had no transactions with any related parties.

Outstanding share data

As at December 31, 2008, the number of common shares outstanding is 39,342,894.

Changes in accounting policies

Standards of Financial Statement Presentation

On January 1, 2008 the Company adopted 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 January 1, 2008. The Company's current and previous disclosures meet the reporting requirements of this section.

Financial Instruments and Capital Disclosures

On January 1, 2008 the Company adopted 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 replaces 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 adoption of these new accounting standards did not impact the amounts reported in the Company's financial statements.

New Accounting Pronouncements

Section 1582 - Business Combinations

Section 1582 replaces Handbook Section 1581 "Business Combinations" and improves the relevance, reliability and comparability of the information that the entity provides in its financial statements about a business combination and its effects. This section is applicable to the annual and interim financial statements of the Company beginning on or January 1, 2011, with early adoption permitted. The Company is in the process of evaluating the impact of this standard.

Consolidations and Non-controlling Interests

The CICA Section 1601 establishes standards for the preparation of consolidated financial statements. CICA Section 1602 establishes standards for accounting for a non-controlling interest in a subsidiary in consolidated financial statements subsequent to a business combination. These standards are applicable to interim and annual financial statements of the Company beginning on January 1, 2011. The Company is in the process of evaluating the impact of these standards.

Section 3064 - Goodwill and Intangible Assets and Section 1000 - Financial Statement Concepts

In February 2008, the CICA released new Handbook Section 3064 "Goodwill and intangible assets", replacing Handbook Section 3062 "Goodwill and Intangible Assets" and Handbook Section 3450 "Research and development costs". This new section is effective for annual periods beginning on or after October 1, 2008. The CICA also amended Handbook Section 1000 "Financial Statements Concepts" to provide consistency with this new standard. Accordingly, the Company will adopt the new sections for its fiscal year beginning January 1, 2009. Section 3064 establishes standards for the recognition, measurement, presentation and disclosure of goodwill subsequent to its initial recognition and of intangible assets by profit-oriented enterprises. This section clarifies that costs can be deferred only when they relate to an item that meets the definition of an asset and as a result start-up costs must be expensed as incurred. The provisions relating to the definition and initial recognition of intangible assets, including internally generated intangible assets, are equivalent to the corresponding provisions of International Financial Reporting Standards IAS 38 "Intangible Assets". The Company has considered the effect of the new standard and determined that the adoption of the requirements will have no impact on the Company's consolidated financial statements.

Harmonizing of Canadian and International Financial Reporting Standards

In February, 2008, the Accounting Standards Board ("AcSB") of the CICA confirmed that Canadian GAAP for publicly accountable enterprises will be converged with International Financial Reporting Standards ("IFRS") effective in the calendar year 2011. The conversion to IFRS will be required, for the Company, for interim and annual financial statements beginning on January 1, 2011. IFRS uses a conceptual framework similar to Canadian GAAP, but there are significant differences on recognition, measurement and disclosures. In the period leading up to the conversion, the AcSB will continue to issue accounting standards that are converged with IFRS such as IAS 2 "Inventories" and IAS 38 "Intangible Assets", thus mitigating the impact of adopting IFRS at the mandatory transition date. Due to the limited scope of the Company's present operations, the Company has not yet invested significant resources in planning for the adoption of IFRS. While the Company has begun assessing the adoption of IFRS, commencing January 1, 2011, the financial impact of the transition to IFRS cannot be reasonably estimated at this time.

Financial Instruments

Fair value:

The carrying values of cash, short term investment, accounts receivable, other receivable and accounts payable and accrued liabilities approximate their fair values due to the relatively short periods to maturity of the instruments. The fair value of the short term investment is determined by using published price quotations in an active market.

Interest rate risk:

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to short term interest rate risk through the interest earned on cash and short term investment balances; however, management does not believe this exposure is significant.

Credit risk:

The Company is exposed to credit risk through its cash and short term investment which are held in large Canadian financial institutions. They Company believes this credit risk is insignificant.

Liquidity risk:

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company manages liquidity risk through the management of its capital structure. Accounts payable and accrued liabilities of $40,475 are due within the current operating period.

Oversight Role of the Audit Committee

The Audit Committee reviews, with management, the Company's annual MD&A and related consolidated financial statements and approves 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.

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