Reading and Interpreting 5-1 a-f, g1 Exhibits 5.19A and 5.19B contain the consolidated statements of cash flows and related note disclosure for The Second Cup Ltd. EXHIBIT 5.19A The Second Cup Ltd.'s 2016 Statements of Cash Flows STATEMENTS OF CASH FLOWS For the periods ended December 31, 2016 and December 26, 2015 (Expressed in thousands of Canadian dollars) 2016 2015 CASH PROVIDED BY (USED IN) Operating activities $ (975) (1,153) Net loss for the period Items not involving cash Depreciation of property and equipment 1,168 1,091 Amortization of intangible assets 403 374 Share-based compensation expense 53 86 Deferred income taxes (note 19) 238 211 Loss (gain) on disposal of capital related items (21) 225 Change in fair value of interest rate swap (note 5) (77) 4 (1,177 Changes in non-cash working capital & other (note 21) (2,288) Cash used in (provided by) operating activities (1,253) (585) Investing activities Proceeds from disposal of capital related items 334 497 Cash payments for capital expenditures (note 21) (382) (1,942) Cash payments for intangible assets (note 21) (733) (393) Notes receivable repayment (issuance) (5) 76 Cash used in investing activities (365) (2,183) continued 2016 2015 Financing activities (6,000) (5,000) Repayment of term loan (note 14) Repayment of swap (note 5) (70) Proceeds from new term loan 8,000 (458) Transaction costs Cash provided by (used in) financing activities (5,070) 1,542 Increase (decrease) in cash and cash equivalents during the period (76) (7,838) Cash provided by (used in) financing activities (5,070) 1,542 Increase (decrease) in cash and cash equiva lents during the period (76) (7,838) Cash and cash equivalents-Beginning of the period 3,080 10,918 $ 3,004 $ 3,080 Cash and cash equivalents-End of the period See accompanying notes to financial statements. Supplemental cash flow information is provided in note 21. EXHIBIT 5.19B Excerpt from the Second Cup Ltd.'s 2016 Annual Report 21. Supplemental cash flow information 2016 2015 Changes in non-cash working capital & other (inflow (outflow)): $ 592 Trade and other receivables $ 411 (8) Inventories 29 Prepaid expenses and other assets Accounts payable and accrued liabilities 176 58 (651) (1,658) (483) (388) Provisions other liabilitles (282) (103) Gift card liability (172) (70) Deposits from franchisees & change in restricted cash (566) (517) Income taxes 155 12 $(12,288) $(1,177) Cash payments for capital expenditures Cash payments for capital expenditures Cash payments for intangible assets $(382) $(1,942) (393) (733) $(2,675) $(775) Supplementary information $ 523 Interest paid $ 318 Income taxes paid $ In total, how much did Second Cup's cash and cash equivalents change during 2016? Was this an increase or a decrease? (Enter amounts in thousands.) In 2016, Second Cup had a net cash of $ How did this compare with the previous year? (Enter amounts in thousands.) In 2015, the company had a net cash of $ LINK OXT LINK TO TEXT Did Second Cup have net income or a net loss in 2016? How did this compare with the cash flows from operating activities? (Enter amounts in thousands.) In 2016, Second Cup had a of $ For the same period cash flows from operating activities was a amount of $ What was the largest difference between these two amounts? (Enter amounts in thousands.) The difference between these two was primarily due to a of s LINK X LINK TO X What effect did the change in the company's accounts payable and accrued liabilities have on cash flows from operating activities in 2016? (Enter amount in thousands.) in 2016 Accounts payable and accrued liabilities by $ This in payables causes cash flows from operating activities to be What does this tell you about the balance owed to these creditors? The means that LINK TO TEXT LINK O XT Did the balance of outstanding gift cards increase or decrease during 2016? Was this considered to be an inflow or an outflow of cash? Was this considered to be an inflow or an outflow of cash? LINK TO X Did Second Cup purchase property, plant, and equipment during 2016? Did the company receive any proceeds from the sale of property, plant, and equipment during the period? Calculate Second Cup's net free cash flow for 2016 and 2015. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000). Enter amounts in thousands.) 2016 2015 Net free cash flow Is the trend positive or negative? LINK O XT LINK TO X Second Cup's total liabilities were $22,038 at December 31, 2016, and $22,558 at December 26, 2015. Determine the company's cash flows to total liabilities ratio. (Round answers to 1 decimal place, e.g. 52.5%.) 2016 2015 Cash flows to total liabilities ratio % LINK O XT LINK TO TEXT