JPMorgan - KASE

Interest expense
Interest expense for the year ended December 31, 2001 and 2000 was $19.5 million and $18.7
million respectively of which interest related to long term debt was $15.87 million and $0.11
million respectively. Interest expense for the year ended December 31, 1999 was $23.87 million
all of which was related to short-term debt.
13 Share Capital
(a) Authorized share capital consists of an unlimited number of Class A common shares, and an
unlimited number of Class B redeemable preferred shares, issuable in series.
Issued Class A common shares:
As at December 31
2001 2000
Number Amount Number Amount
Balance, beginning of year ...................................... 79,808,673 203,930 44,512,359 105,245
Stock options exercised for cash .................................. 353,550 589 1,771,900 2,256
Shares issued for ShNOS acquisition (Note 3) ....................... — — 19,430,543 57,082
Special Warrants issued and converted on ShNOS acquisition (e) ..... — — 4,067,381 11,949
Corresponding convertible securities, converted (f (i)) ............... 93,018 96 675,710 872
Special Warrants issued for cash and converted (d) ................. — — 9,346,000 25,082
Corresponding convertible securities ............................. — — — 2,910
Series 5 warrants converted (b) .................................. 2,200 8 4,780 20
Redemption of Series 5warrants (b) .............................. — (1,799) — —
Redemption of corresponding convertible securities (c) ............. — (3,878) — —
Cancelled shares (g) ............................................ (153,657) (440) —
Less costs of issue .............................................. — — — (1,486)
Balance, end of year ............................................ 80,103,784 198,506 79,808,673 203,930
(b) On March 26, 1997, the Corporation issued 110,000 Special Warrants (see Note 11). Each
Special Warrant was exercisable, partially into 45 Series 5 Warrants. As described in Note 11,
C$2.5 million (U.S.$1.8 million) of the proceeds were allocated to the Series 5 Warrants. Each
Series 5 Warrant entitled the holder to purchase one common share of the Corporation at a
price of Canadian $6.25 until March 26, 2002. The Special Warrants were deemed to be
exercised 5 days after a receipt was issued for the prospectus which was dated July 21,1997;
accordingly, 4,950,000 Series 5 Warrants were issued. All 4,950,000 Series 5 warrants were
outstanding at December 31, 1999. 2,200 warrants were exercised during the period ended
December 31, 2001 (4,780 during the period ended December 31, 2000).
The Corporation reached an agreement with the Series 5 warrant holders to redeem 4,943,020 of
the outstanding Series 5 warrants on February 23, 2001 at C$2.90 per warrant for a total
consideration of $9.425 million. $1.799 million was recorded as a reduction of share capital based
upon the average cost of each warrant at issuance, and the remaining $7.626 was recorded as an
increase in the Corporation’s deficit. On February 23, 2001, 2,200 Series 5 warrants were exercised
and as at December 31, 2001 there were no outstanding Series 5 warrants.
(c) Simultaneously, the corresponding convertible securities associated with the Series 5
warrants were redeemed under the same terms as the Series 5 warrants at C$2.90 per
corresponding convertible security for total consideration of $3.878 million. On February 23,
2001, 906 of these corresponding convertible securities were exercised and as at
December 31, 2001 there were no outstanding corresponding convertible securities
associated with the Series 5 warrants.
(d) On March 7, 2000, the Corporation completed a private placement of 9,346,000 Special
Warrants at a price of C$36 million (equivalent U.S. $25 million). Each Special Warrant
entitled the holder thereof to acquire, at no additional cost, one Common Share of the
Corporation until five days after receipt was issued for the prospectus, which was dated
July 6, 2000. All of the Special Warrants were exercised before the expiry date.
(e) On March 31, 2000, in connection with the acquisition of ShNOS, the Corporation issued 4,067,381
Corresponding Special Warrants, which enabled the holder to acquire, at no additional cost, one
common share of the Corporation under the same terms as the Special Warrants discussed in (d)
above. All of the Corresponding Special Warrants were exercised before the expiry date.
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