which was partially offset by a 6.45% same clinic sales increase that increased distributions from LifeMark effective January 1, 2011. LifeMark’s physiotherapy business is not economy dependent as people will continue to get hurt and require rehabilitative services. Going forward, annual distributions of $6.75 million will increase by 4% each July. Revenues from LMS were $1.68 million compared to $1.99 million in the prior year, a decrease of 16% due to the year over year performance adjustment based on the change in gross profit for LMS effective Jan 1, 2011. The annual distribution actually increased effective April 1, 2011 but the decline left over from the first quarter of 2011 offset the increase for the remainder of the year. Revenues from End of the Roll were $1.25 million in the year compared to $1.35 million in the prior year, a decrease of 7.8% as a result of the same store sales adjustment to the annual royalty effective May 1, 2011. Distributions from KMH were $1.28 million compared to $0.56 million for the prior year. The 127.1% increase is due to a follow on investment in October 2011 of $22.4 million. Distributions from Solowave commenced in December 2010 and were $5.0 million in the year. Distributions from Killick commenced in July 2011 and were $2.08 million in the year. Distributions from Quetico commenced in November 2011 and were $0.45 million in the year. Revenues from MEDIchair. were $0.53 million in the year compared to $1.20 million for the prior year as the MEDIchair royalty was sold on June 9, 2011. See “Private Company Partner Update” for more information on the individual Partners’ performance. 

Finance costs of $1,235,348 in the year were lower compared to $1,707,713 in the prior year because of lower senior debt and no subordinated outstanding in 2011. 

In the year ending December 31, 2011, the Corporation recorded non-cash stock based compensation expenses totaling $1,978,727 (2010 - $1,817,981) that included: $1,247,452 to amortize the fair value of the RSU Plan (2010 – $1,521,424); $578,725 to recognize the fair value of outstanding stock options (2010 – $158,507); and $152,550 to recognize the fair value of shares issued to management in lieu of dividends under the RSU Plan (2010 - $138,050). Also in the year, the Corporation made cash payments based on current dividend rates of $248,653 to employees and directors in lieu of dividends under the RSU Plan (2010 - $226,105). 

Salaries and benefits were $1,875,508 in the year compared to $1,060,915 in the prior year period. In recognition of the Corporation’s continuing success, and as a result of the significant gains realized on the LifeMark and MEDIchair transactions, the Corporation paid a $1 million management performance bonus at June 30, 2011 compared to a $250,000 bonus paid in December 2010. Regular salaries and benefits were up 7% compared the prior year period due to a small increase in the salary of one employee effective January 1, 2011 and a modest increase in the cost of benefits. 

Corporate and office expenses were $859,727 compared to $626,990 in the prior year and include office rent, travel and corporate administrative expenses. The 37.1% increase was due to the higher travel and associated costs in 2011 with increased deal flow including the Corporation’s first transaction in the United States. Additionally, TSX fees and other regulatory administrative expenses increased along with the market capitalization of the Corporation compared to the prior year and the Corporation hosted its first annual conference in 2011 bringing together the executive teams of each of the Partner companies. 

Legal and accounting expenses were $556,621 for the year compared to $443,262 for the prior year. The 25.6% increase was due to additional legal costs associated with the Corporation’s first international Partner and additional accounting fees due to the first full year of reporting under IFRS. 

Amortization and depreciation include the amortization of the intangible assets and the depreciation of capital assets. The Corporation amortizes its intangible assets over the term of the licensing agreement and depreciates capital assets over the estimated useful lives. The Corporation does not amortize preferred interests in limited partnerships. Since these transactions are treated as financial instruments, they are 

