UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
FORM 40-F
[ ] REGISTRATION STATEMENT PURSUANT TO SECTION 12 OF
THE SECURITIES EXCHANGE ACT OF 1934
[X] ANNUAL REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended
December 31, 2009
|
Commission File Number:
001-32667
|
QUEST CAPITAL CORP.
(Exact name of Registrant as specified in its charter)
Canada
|
6029
|
Not Applicable
|
(Province or Other Jurisdiction of
|
(Primary Standard Industrial
|
(I.R.S. Employer
|
Incorporation or Organization)
|
Classification Code)
|
Identification No.)
|
Suite 1028, 550 Burrard Street
Vancouver, British
Columbia
Canada V6C 2B5
(604) 687-8378
(Address
and telephone number of Registrants principal executive offices)
Corporation Service Company
Suite 400, 2711
Centerville Road
Wilmington, Delaware 19808
(Name,
address (including zip code) and telephone number (including
area
code) of agent for service in the United States)
Securities registered or to be registered pursuant to section
12(b) of the Act:
Title Of Each Class
|
Name Of Each Exchange On Which Registered
|
Common Shares
|
NYSE Amex
|
Securities registered or to be registered pursuant to Section
12(g) of the Act:
None
Securities for which there is a reporting obligation pursuant to
Section 15(d) of the Act:
None
For annual reports, indicate by check mark the information filed
with this Form:
[X] Annual Information
Form
[X] Audited Annual Financial Statements
Indicate the number of outstanding shares of each of the
Registrants classes of capital or common stock as of the close of
the
period covered by the annual report: 151,342,734
Common Shares as
at December 31, 2009
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405
of Regulation S-T during the preceding 12
months (or for such shorter period
that the Registrant was required to submit and post such files).
Yes [
]
No [X]
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Exchange
Act
during the preceding 12 months (or for such shorter period that the Registrant
was required to file such reports), and (2)
has been subject to such filing
requirements for the past 90 days.
Yes
[X]
No [ ]
INTRODUCTORY INFORMATION
In this annual report, references to we, our, us, the
Company or Quest mean Quest Capital Corp. and its subsidiaries, unless the
context suggests otherwise.
Unless otherwise indicated, all amounts in this annual report
are in Canadian dollars and all references to $ mean Canadian dollars.
PRINCIPAL DOCUMENTS
The following documents that are filed as exhibits to this
annual report are incorporated by reference herein:
-
our Annual Information Form for the year ended December 31, 2009;
-
our Audited Consolidated Financial Statements for the years ended December
31, 2009 and 2008; and
-
our Managements Discussion and Analysis for the years ended December 31,
2009 and 2008.
FORWARD-LOOKING STATEMENTS
This annual report includes or incorporates by reference
certain statements that constitute forward-looking statements within the
meaning of the United States
Private Securities Litigation Reform Act of
1995
. These statements appear in a number of places in this annual report
and documents incorporated by reference herein and include statements regarding
our intent, belief or current expectation and that of our officers and
directors. Such forward-looking statements involve known and unknown risks and
uncertainties that may cause our actual results, performance or achievements to
be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. When used in this
annual report or in documents incorporated by reference in this annual report,
words such as believe, anticipate, estimate, project, intend,
expect, may, will, plan, should, would, contemplate, possible,
attempts, seeks and similar expressions are intended to identify these
forward-looking statements. These forward-looking statements are based on
various factors and were derived utilizing numerous assumptions that could cause
our actual results to differ materially from those in the forward-looking
statements. Accordingly, you are cautioned not to put undue reliance on these
forward-looking statements. Forward-looking statements include, among others,
statements regarding:
-
our expected financial performance in future periods;
-
our plan of operations; and
-
our business strategy and plans or budgets.
Some of the risks, uncertainties and assumptions that could
cause our actual results to differ materially from those expressed in our
forward-looking statements include:
-
defaults by borrowers on their repayment obligations;
-
our ability to realize on security granted by defaulting borrowers;
-
a decline in the value of real estate assets held as security for loans to
borrowers;
-
our ability to estimate the provision for loan losses on our loan
portfolio;
- 2 -
-
the nature and quality of our loan portfolio;
-
the concentration of our portfolio in real estate;
-
our ability to reinvest assets in real estate loans as they are repaid;
-
our ability to manage our growth;
-
our managements ability to successfully identify suitable candidates for
loans;
-
competition in the lending business;
-
fluctuations in interest rates;
-
our ability to attract clients and maintain client relationships;
-
our ability to enter into strategic relationships to syndicate loans;
-
our ability to maintain the nature and quality of our loan portfolio;
-
our ability to maintain our tax status as a Mortgage Investment Corporation
(MIC) continuously throughout the taxation year;
-
our ability to comply with our regulatory obligations as a mortgage broker
under the
Mortgage
Brokers Act
(British Columbia) or with other
regulatory bodies that regulate our business;
-
our ability to retain key personnel;
-
environmental issues in respect of the possible possession or acquisition
of properties;
-
liabilities associated with the former ownership of certain mineral
properties;
-
the impact of changes in environmental laws and regulations in respect of
the Castle Mountain property;
-
the costs of completing remaining long term monitoring and maintenance
obligations; and
-
adverse changes in the economy generally.
We refer you to the section entitled Risk Factors in our
Annual Information Form. We assume no obligation to update or to publicly
announce the results of any change to any of the forward-looking statements
contained or incorporated by reference herein to reflect actual results, future
events or developments, changes in assumptions or changes in other factors
affecting the forward-looking statements.
NOTE TO UNITED STATES READERS REGARDING DIFFERENCES
BETWEEN UNITED STATES AND CANADIAN REPORTING PRACTICES
We are permitted to prepare this annual report in accordance
with Canadian disclosure requirements, which are different from those of the
United States. Our audited consolidated financial statements included in this
annual report have been prepared in accordance with Canadian generally accepted
accounting principles, which differ in certain material respects from United
States generally accepted accounting principles. Note 20 to our audited
consolidated financial statements included herein provides a reconciliation of
the significant differences between Canadian and United States generally
accepted accounting principles.
- 3 -
DISCLOSURE CONTROLS AND PROCEDURES
As of the end of the period covered by this report, our
management carried out an evaluation, with the participation of our Chief
Executive Officer and Chief Financial Officer, of the effectiveness of our
disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e)
under the
Securities Exchange Act of 1934
(
Exchange Act
)). Based
upon that evaluation, our Chief Executive Officer and Chief Financial Officer
concluded that, as of the end of the period covered by this report, our
disclosure controls and procedures were effective in recording, processing,
summarizing and reporting, on a timely basis, information required to be
disclosed by us in reports that we file or submit under the Exchange Act.
It should be noted that while our Chief Executive Officer and
our Chief Financial Officer believe that our disclosure controls and procedures
provide a reasonable level of assurance that they are effective, they do not
expect that our disclosure controls and procedures or internal control over
financial reporting will prevent all errors and fraud. A control system, no
matter how well conceived or operated, can provide only reasonable, not
absolute, assurance that the objectives of the control system will be met.
MANAGEMENTS REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING
Our management is responsible for establishing and maintaining
adequate internal control over financial reporting for the Company. With the
participation of the Chief Executive Officer and the Chief Financial Officer,
our management conducted an evaluation of the effectiveness of our internal
control over financial reporting based on the framework and criteria established
in Internal Control Integrated Framework, issued by the Committee of
Sponsoring Organizations of the Treadway Commission. Based on this evaluation,
our management has concluded that our internal control over financial reporting
was effective as of December 31, 2009.
ATTESTATION REPORT OF THE REGISTERED PUBLIC ACCOUNTING FIRM
Our independent public accountant has issued their report on
their audit of our internal control over financial reporting in accordance with
Auditing Standard No. 5 of the Public Company Accounting Oversight Board, which
report is included with our audited financial statements for the year ended
December 31, 2009 which are incorporated by reference in this annual report.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no changes in our internal control over financial
reporting during the fiscal year ended December 31, 2009 that materially
affected, or are reasonably likely to materially affect, our internal control
over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act).
NOTICE OF PENSION FUND BLACKOUT PERIOD
We were not required by Rule 104 of Regulation BTR to send any
notice to any of our directors or executive officers during the fiscal year
ended December 31, 2009.
AUDIT COMMITTEE
Our Board of Directors has established a separately-designated
Audit Committee of the board in accordance with Section 3(a)(58)(A) of the
Exchange Act for the purpose of overseeing our accounting and financial
reporting processes and the audits of our annual consolidated financial
statements. As at the date of this annual report, the Audit Committee is
comprised of W. David Black, Frank Mayer and Dale Peniuk.
- 4 -
AUDIT COMMITTEE FINANCIAL EXPERT
Our Board of Directors has determined that Dale Peniuk, member
of the Audit Committee of our board, is qualified as an audit committee
financial expert (as such term is defined in Form 40-F), and is an independent
director under applicable laws and regulations and the requirements of the NYSE
Amex.
PRINCIPAL ACCOUNTING FEES AND SERVICES
The following table sets forth information regarding amounts
billed to us by our independent auditors for each of our last two fiscal years:
|
|
Year
Ended December 31,
|
|
|
|
2009
|
|
|
2008
|
|
Audit Fees
|
$
|
370,092
|
|
$
|
416,849
|
|
Audit Related Fees
|
|
63,000
|
|
|
52,920
|
|
Tax Fees
|
|
67,394
|
|
|
249,206
|
|
All Other Fees
|
|
13,125
|
|
|
-
|
|
Total
|
$
|
513,611
|
|
$
|
718,975
|
|
* Inclusive of general sales taxes
Audit Fees
Audit fees are the aggregate fees billed by our independent
auditor for the audit of our annual consolidated financial statements, reviews
of our interim consolidated financial statements and attestation services that
are provided in connection with statutory and regulatory filings or
engagements.
Audit-Related Fees
Audit-related fees are fees charged by our independent auditor
for assurance and related services that are reasonably related to the
performance of the audit or review of our financial statements and are not
reported under Audit Fees.
Tax Fees
Tax fees are fees for professional services rendered by our
independent auditors for tax compliance and tax advice on actual or contemplated
transactions.
All Other Fees
All other fees relate to services other than the audit fees,
audit-related fees and tax fees described above.
Audit Committee Pre-Approval Policies
Our Audit Committee has established policies and procedures
that are intended to control the services provided to us by our independent
auditors and to monitor their continuing independence. Under these policies, no
services may be undertaken by our independent auditors, unless the engagement is
specifically approved by the Audit Committee or the services are included within
a category which has been pre-approved by the Audit Committee. The maximum
charge for services is established by the Audit Committee when the specific engagement is approved or the
category of services pre-approved. Management is required to notify the Audit
Committee of the nature and value of pre-approved services undertaken.
- 5 -
The Audit Committee will not approve engagements relating to,
or pre-approve categories of, non-audit services to be provided by our
independent auditors (i) if such services are of a type the performance of which
would cause our independent auditors to cease to be independent within the
meaning of applicable Securities and Exchange Commission rules, and (ii) without
consideration, among other things, of whether the auditors are best situated to
provide the required services and whether the required services are consistent
with their role as our independent auditors.
OFF-BALANCE SHEET ARRANGEMENTS
We have not entered into any off-balance sheet arrangements
that have or are reasonably likely to have a current or future effect on our
financial condition, changes in financial condition, revenues, expenses, results
of operations, liquidity, capital expenditures or capital resources that is
material to investors.
CONTRACTUAL OBLIGATIONS
The following table provides information with respect to our
known contractual obligations as of December 31, 2009:
|
|
Payments due by Period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
More
|
|
|
|
|
|
|
Less than 1
|
|
|
|
|
|
|
|
|
than 5
|
|
Type of Contractual Obligation
|
|
Total
|
|
|
Year
|
|
|
1
- 3 Years
|
|
|
3
- 5 Years
|
|
|
Years
|
|
Operating Lease Obligation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Office Leases and
other
|
$
|
1.3M
|
|
$
|
0.4M
|
|
$
|
0.8M
|
|
$
|
0.1M
|
|
|
-
|
|
Other Obligation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred Compensation
|
|
2.2M
|
|
|
0.2M
|
|
|
2.0M
|
|
|
-
|
|
|
-
|
|
Loan Commitments
|
|
12.1M
|
|
|
12.1M
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Total
|
$
|
15.6M
|
|
$
|
12.7M
|
|
$
|
2.8M
|
|
$
|
0.1M
|
|
|
-
|
|
Additional information related to our obligations and
commitments is provided in the notes to our audited consolidated financial
statements included in this annual report.
CODE OF ETHICS
We have adopted a Code of Ethics (as such term is defined in
Form 40-F), which we refer to as our Code of Conduct that applies to our
officers, employees and directors and promotes, among other things, honest and
ethical conduct. Investors may view our Code of Conduct on our web site at
www.questcapcorp.com
or as provided in the Annual Information Form. On
March 14, 2008, our Code of Conduct was amended: (a) to clarify that officers,
employees and directors are required to report any conduct that violates
applicable law or the Code of Conduct and that failure to report will result in
disciplinary action; (b) to expand the section on code compliance and reporting
to clarify the process for submitting complaints directly to the Chairman of the
Audit Committee or on an anonymous basis through our Whistleblower Hotline and
to describe how those complaints will be handled; (c) to add sections relating
to whistleblower protection, the treatment of proprietary and confidential
information, the protection and proper use of company assets, improper accepting
or giving of gifts and antitrust and fair dealing; (d) to add a provision to
the personal conflicts of interest section acknowledging that personal loans
to insiders are prohibited; and (e) to make other wording and formatting changes
for consistency.
- 6 -
NYSE AMEX CORPORATE GOVERNANCE
The Companys common shares are listed for trading on the NYSE
Amex Exchange (AMEX), previously the American Stock Exchange. Section 110 of
the AMEX company guide permits AMEX to consider the laws, customs and practices
of foreign issuers in relaxing certain AMEX listing criteria, and to grant
exemptions from AMEX listing criteria based on these considerations. A company
seeking relief under these provisions is required to provide written
certification from independent local counsel that the non-complying practice is
not prohibited by home country law. A description of the significant ways in
which the Companys governance practices differ from those followed by domestic
companies pursuant to AMEX standards is contained on the Companys website at
www.questcapcorp.com
.
UNDERTAKING
The Registrant undertakes to make available, in person or by
telephone, representatives to respond to inquiries made by the Commission staff,
and to furnish promptly, when requested to do so by the Commission staff,
information relating to: the securities registered pursuant to Form 40-F; the
securities in relation to which the obligation to file an annual report on Form
40-F arises; or transactions in said securities.
CONSENT TO SERVICE OF PROCESS
The Company has previously filed an Appointment of Agent for
Service of Process and Undertaking on Form F-X signed by the Company and its
agent for service of process with respect to the class of securities in relation
to which the obligation to file this annual report arises.
Any change to the name or address of a Registrants agent for
service shall be communicated promptly to the Commission by amendment to Form
F-X referencing the file number of the Registrant.
SIGNATURES
Pursuant to the requirements of the Exchange Act, the
Registrant certifies that it meets all of the requirements for filing on Form
40-F and has duly caused this annual report to be signed on its behalf by the
undersigned, thereunto duly authorized.
|
QUEST CAPITAL CORP.
|
|
|
|
|
|
|
|
By:
|
Brian E. Bayley
|
|
|
Brian E. Bayley
|
|
|
Chief Executive Officer
|
Date: March 22, 2010
- 7 -
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