Mogo(MOGO) - 2024 Q4 - Annual Report

Certain Interpretation Matters This Annual Information Form is for the financial year ended December 31, 2024, with all monetary amounts in Canadian dollars unless otherwise specified - This Annual Information Form (AIF) is for the financial year ended December 31, 2024, and is dated March 31, 2025. All monetary amounts are in Canadian dollars unless otherwise specified[6][7] Cautionary Note Regarding Forward-Looking Statements The document contains forward-looking statements about future financial outlook, business strategy, and operational results, subject to various known and unknown risks and uncertainties - The document contains forward-looking statements regarding future financial outlook, business strategy, growth plans, and operational results. These statements are based on management's current expectations and are subject to numerous known and unknown risks and uncertainties[8][11] - Key areas covered by forward-looking statements include expectations on revenue, expenses, cash needs, product expansion, member growth, and performance of the investment portfolio[10][12] - The company identifies significant risk factors that could cause actual results to differ materially, including credit market disruptions, member default rates, regulatory changes, competition, and risks related to its investment portfolio and use of AI[13][14][17] Corporate Structure Mogo Inc. operates through key subsidiaries, focusing on online lending, passive investing, stock trading, and European payments Name, Address, and Incorporation This section details the corporate history of Mogo Inc., including its incorporation, various name changes, and the pivotal 2019 business combination with Mogo Finance Technology Inc. through a plan of arrangement, resulting in the current corporate structure listed on the TSX and Nasdaq under the symbol 'MOGO', with a three-for-one share consolidation completed in August 2023 - In June 2019, the company completed a business combination with Mogo Finance, which was accounted for as a reverse acquisition. The combined entity was named Mogo Inc. and continued on the TSX and Nasdaq under the symbol 'MOGO'[21][22][24] - On August 10, 2023, the company consolidated its issued and outstanding Common Shares on a three-for-one basis[23] - The company's head office is located at 516-409 Granville St, Vancouver, BC, V6C 1T2[25] Intercorporate Relationships Mogo Inc. operates through several direct and indirect subsidiaries, including Mogo Finance Inc. for online lending, Moka Financial Technologies Inc. for the passive investing app, MogoTrade Inc. for the commission-free stock trading platform, and Carta Solutions Holding Corp for the European payments business - Mogo's business is structured through key wholly-owned subsidiaries: Mogo Finance (lending), Moka (investing), MogoTrade (stock trading), and Carta (payments)[26] - Carta Financial Services Ltd., an indirect subsidiary operating in the UK, is highlighted as a material subsidiary responsible for European payments[26] Business Description Mogo is a financial technology company focused on helping Canadians achieve financial freedom through three core business lines: wealth, payments, and lending, with a central focus on its 'Intelligent Investing' wealth platform and a significant payments business through its subsidiary Carta, maintaining an investment portfolio with a focus on crypto-related assets General Overview Mogo is a financial technology company focused on helping Canadians achieve financial freedom through three core business lines: wealth, payments, and lending. Its strategy combines technology and behavioral science, with a central focus on its 'Intelligent Investing' wealth platform. The company also operates a significant payments business through its subsidiary Carta and maintains an investment portfolio with a focus on crypto-related assets - The company operates across three main business lines: wealth, payments, and lending[28] - The 'Intelligent Investing' platform is central to its business, designed to help investors build long-term wealth and provide a pathway for borrowers to transition from debt to investing[29][30] - The payments business, operated by subsidiary Carta Worldwide, processed over $11 billion in volume in 2024[31] - Mogo holds a significant investment portfolio with a focus on crypto-related investments[32] Products and Services Mogo's offerings are categorized into Wealth, Lending, Payments, and an Investment Portfolio, featuring 'IntelligentInvesting.ai' with the Moka app for automated investing and the MogoTrade app for commission-free stock trading, MogoMoney for unsecured credit up to $5,000, Carta for B2B card issuing, and the Mogo Ventures investment portfolio valued at approximately $38 million including a 13% stake in WonderFi - Wealth products include Moka (automated investing in ETFs like the S&P 500) and MogoTrade (commission-free stock trading on major North American exchanges), bundled under the 'Intelligent Investing' subscription[34][36] - Lending product 'MogoMoney' provides unsecured open credit of up to $5,000 with rates up to 34.37%[39] - Payments subsidiary Carta provides B2B card issuing and processing infrastructure, handling approximately $11.5 billion in annual transaction volume[41] - The 'Mogo Ventures' investment portfolio was valued at approximately $38 million as of December 31, 2024, and includes a 13% stake in WonderFi Technologies Inc.[42][46] Product Development The company maintains a strong focus on product innovation, led directly by the CEO, prioritizing convenience, transparency, and simplicity to improve the financial health of its members, with plans to continue investing in products like MogoTrade and Moka that meet its ROI criteria - Product development is a core focus, led by the CEO, with an emphasis on creating user-centric financial products[43] - The company expects to continue investing in key products like MogoTrade and Moka based on their potential for return on investment[43] Our Platforms Mogo's technology is built on distinct platforms: MogoTrade and Moka are cloud-native with a microservices architecture, the core Mogo platform emphasizes ease of use, automation, analytics, and 'plug-and-play' functionality, and the Carta platform, a B2B offering with data centers in North America and Europe, is expected to complete a migration to Oracle Cloud Infrastructure in 2025, maintained by 51 full-time technology and credit risk analysis employees as of December 31, 2024 - MogoTrade and Moka platforms are built entirely in the cloud using a microservices architecture[44] - The core Mogo platform is built on four key strengths: Ease of Use, Automation, Analytics-Based decisioning, and Plug-&-Play Functionality[51] - The Carta platform is a B2B offering that is migrating to Oracle Cloud Infrastructure in 2025 and exited its Canadian payments business to focus on Europe[49][53] - As of Dec 31, 2024, the company had 51 full-time employees dedicated to technology and credit risk analysis for platform maintenance[54] Specialized Skill and Knowledge As of December 31, 2024, Mogo had a total of 211 team members, including employees and temporary contractors, possessing a wide range of competencies across technology, credit risk, finance, and operations, crucial for the company's success and innovation in the financial services industry - The company had 211 team members (employees and contractors) as of December 31, 2024[55] - The team includes 41 software developers, designers, data scientists, product managers, and marketers, alongside traditional financial services roles[55] Sales and Marketing Mogo's marketing strategy centers on establishing 'Intelligent Investing' as a trusted, aspirational wealth brand in Canada, employing a multi-channel approach including web optimization, content marketing, performance marketing, and strategic partnerships with Postmedia and Fundstrat, while Carta's marketing is a B2B effort focused on the European market through direct sales and industry lead generation - The marketing strategy for Mogo and Moka focuses on building the 'Intelligent Investing' brand as a premium, principle-driven alternative to traditional wealth management and speculative trading[56][57] - Key marketing channels include web/funnel optimization, content-driven education, performance marketing, and strategic partnerships, notably with Postmedia for national reach and Fundstrat for market insights[58][64] - Carta's sales and marketing is a B2B approach targeting fintechs and banks primarily in the European market[61] Competitive Conditions Mogo competes in a rapidly transforming financial services industry against other fintech companies (Wealthsimple, Questrade), traditional banks, and consumer finance companies, differentiating itself by focusing on long-term financial outcomes through its 'Intelligent Investing' platform, which promotes a disciplined, value-based investment philosophy and uniquely offers an integrated pathway from borrowing to investing - Competitors include fintechs like Wealthsimple and Questrade, large Canadian banks, credit unions, and consumer credit companies[62] - Mogo's key differentiator is its 'Intelligent Investing' platform, which is designed with a behavioral-first, long-term wealth-building philosophy inspired by investors like Warren Buffett[63] - Carta competes with both legacy payment processors (TSYS, FISERV) and modern platforms (Marqeta, Galileo), differentiating through product, service level, and pricing[66][67] Intangible Properties Mogo protects its intellectual property through a combination of copyright, trademark, design patent, and trade secret laws, rather than utility patents, holding registered trademarks in Canada, the US, UK, and EU, with pending design applications for its graphical user interface, and utilizing confidentiality and IP assignment agreements with employees and consultants to safeguard proprietary information - The company protects its IP using copyright, trademark, and trade secret laws, and has no issued utility patents[68] - Mogo has pending industrial design and design applications in Canada and the U.S. for its 'Display Screen Having Graphical User Interface for Investment Management'[68] - The company owns various registered trademarks and domain names related to the Mogo, Moka, and Intelligent Investing brands[71] Credit Facility As of December 31, 2024, Mogo had one primary credit facility with Fortress Investment Group to finance its loan products, which was amended in February 2025 to extend the maturity to 2029, reduce the interest rate by 100 basis points, and allow for a potential increase in capital from $60 million to $100 million, with an outstanding balance of $48.8 million at year-end 2024 Credit Facility Details | Metric | Value | | :--- | :--- | | Facility Size | $60 million (potential to increase to $100 million) | | Lender | Fortress Investment Group | | Maturity Date | January 2, 2029 (extended Feb 2025) | | Interest Rate | SOFR + 7% (reduced from SOFR + 8% in Feb 2025) | | Balance at Dec 31, 2024 | $48.8 million | - The facility is subject to financial and portfolio performance covenants, including requirements for minimum tangible net worth, maximum leverage, and limits on loan default rates[75][77] Employees As of December 31, 2024, Mogo and its subsidiaries had 174 full-time and 4 part-time employees, with the largest departments being Customer Service & Operations and Technology & Development Employee Count by Functional Area (as of Dec 31, 2024) | Functional Area | Full-time Employees | Part-time Employees | | :--- | :--- | :--- | | Technology & Development | 47 | 0 | | Customer Service & Operations | 85 | 2 | | General and Administrative | 40 | 1 | | Marketing | 2 | 1 | | Total | 174 | 4 | Foreign Operations The company's foreign operations are primarily conducted through its subsidiary, Carta, which is focused on the European market, with approximately 91% of Carta's revenues in 2024 derived from its European operations - Carta's operations are concentrated in Europe, with card programs in over 11 countries[78] - Approximately 91% of Carta's 2024 revenue was generated from its European operations[78] General Development of the Business Over the past three years, Mogo has undergone a significant strategic transformation, launching new wealth products, forming strategic partnerships, becoming the largest shareholder in WonderFi, and prioritizing profitability through cost-cutting and a sharpened focus on its digital wealth and lending platforms Current Financial Year – Recent Developments In early 2025, Mogo undertook significant strategic actions, including a favorable amendment to its senior secured credit facility with Fortress, which extended the maturity by three years to 2029 and reduced the interest rate, and the exit of its legacy institutional brokerage business to sharpen its focus on higher-margin core offerings - In February 2025, Mogo extended its credit facility with Fortress to January 2, 2029, and reduced the interest rate by 100 basis points to SOFR plus 7%[80] - Subsequent to year-end 2024, Mogo exited its institutional brokerage business, which contributed $5.3 million in 2024 revenue at a negligible operating margin[80] Three Year History Over the past three years, Mogo has undergone a significant strategic transformation. Key developments include launching new wealth products like Moka.ai and 'Buffett Mode', forming strategic partnerships with Postmedia and Fundstrat, and becoming the largest shareholder in the regulated crypto exchange WonderFi. A major theme has been the prioritization of profitability, leading to cost-cutting measures, the wind-down of non-core products like MogoCrypto, and a sharpened focus on its digital wealth and lending platforms 2024 Developments In 2024, Mogo launched the next generation of its wealth-building app, Moka.ai, and added Bitcoin to its treasury management strategy, also resuming its share repurchase program and securing an extension of its $60 million credit facility with Fortress Investment Group to January 2026 - Launched Moka.ai, an enhanced version of its wealth-building app, in March 2024[81] - The Board approved a treasury management strategy to include Bitcoin and Bitcoin ETFs, authorizing an initial investment of up to $5.0 million[81] - Resumed share repurchases, buying back 44,741 shares at an average price of $2.30[81] 2023 Developments 2023 was a pivotal year focused on strategic realignment and partnerships, with Mogo launching its 'Buffett Mode' investing app, partnering with Postmedia and Fundstrat, becoming the largest shareholder of WonderFi, executing a 3-for-1 share consolidation to regain Nasdaq compliance, and accelerating its path to profitability by winding down legacy products like MogoCard and MogoProtect - Became the largest shareholder of WonderFi (TSX:WNDR), Canada's only fully regulated crypto exchange, holding an approximate 13% ownership stake[85] - Completed a three-for-one share consolidation in August 2023 to regain compliance with Nasdaq's minimum bid price rule[85][86] - Prioritized profitability by winding down legacy products, including the MogoCard prepaid card and MogoProtect identity fraud monitoring[86] - Launched 'Buffett Mode' self-directed investing app and formed strategic partnerships with Postmedia and Tom Lee's Fundstrat[84][85] 2022 Developments In 2022, Mogo aggressively pursued profitability through significant cost-cutting, including a 33% reduction in workforce and the exit of its MogoCrypto product and Moka France operations, resulting in the company reporting its first positive quarterly adjusted EBITDA since 2020 in Q4 2022, while also growing its member base to 2 million and forming Mogo Ventures to manage its investment portfolio - Implemented significant cost reduction initiatives, including an approximate 33% reduction in workforce, leading to a $9.2 million decrease in quarterly operating expenses from Q1 to Q4 2022[88][92] - Exited the MogoCrypto product and monetized the digital assets on its balance sheet, with remaining crypto exposure primarily through its investment in Coinsquare (now WonderFi)[92] - Grew its member base to 2 million members[92] - Formed Mogo Ventures to manage its investment portfolio, including legacy investments in companies like Hootsuite and Alida[92] Risk Factors The company outlines a comprehensive set of risks that could materially affect its business, broadly categorized into economic, operational, regulatory, financial, and strategic risks, including the impact of economic downturns on loan defaults, reliance on proprietary credit models, extensive and evolving regulations, cybersecurity threats, dependence on concentrated debt financing with restrictive covenants, and risks associated with its significant investment in the volatile cryptocurrency sector via WonderFi - Economic and Credit Risk: Worsening economic conditions may increase member loan default rates. The company's allowance for loan losses is based on subjective factors and may not be adequate[90][93] - Operational and Technology Risk: The business relies heavily on its proprietary credit scoring model, is vulnerable to cybersecurity incidents, and must comply with complex data privacy laws. It also depends on third-party platforms like the Apple App Store and Google Play for distribution[94][144][168] - Regulatory Risk: The business is subject to extensive regulation. This includes changes to the criminal rate of interest for its lending products, CIRO regulations for MogoTrade, and evolving rules for cryptocurrency, which affects its investment in WonderFi[108][110][115] - Financial Risk: The company has a history of losses, relies on a highly concentrated source of debt financing (Credit Facility), and must adhere to restrictive covenants. Its total indebtedness was $48.8 million on its Credit Facility and $35.3 million in debentures as of Dec 31, 2024[96][129][134] - Investment and Market Risk: Mogo's approximate 13% stake in WonderFi exposes it to the volatility and reputational risks of the cryptocurrency market, including negative publicity from fraudulent actors in the space[113][136] Dividends and Distributions The company has not declared dividends in the past three financial years and does not intend to pay dividends in the foreseeable future, planning to reinvest all future earnings for business development and growth - No dividends have been declared on the Company's securities in the three most recently completed financial years[195] - The Company does not intend to pay dividends in the foreseeable future, as it plans to reinvest all future earnings to finance business development and growth[196] Description of Capital Structure The company's capital structure consists of unlimited Common Shares, with 24,472,377 currently issued and outstanding, and unlimited Preferred Shares with 0 issued, where each Common Share grants one vote and dividend rights Capital Structure as of AIF Date | Security Type | Authorized | Issued and Outstanding | | :--- | :--- | :--- | | Common Shares | Unlimited | 24,472,377 | | Preferred Shares | Unlimited | 0 | - Each Common Share entitles the holder to one vote at shareholder meetings and to receive dividends when declared[198] Market for Securities The company's common shares trade on the TSX and Nasdaq under the symbol 'MOGO', with details on monthly trading prices and volumes provided for the 2024 fiscal year, and no outstanding securities subject to escrow or contractual transfer restrictions Trading Price and Volume The company's common shares trade on the TSX and Nasdaq under the symbol 'MOGO'. This section provides a table detailing the monthly high and low trading prices and average trading volumes on both exchanges for the 2024 fiscal year 2024 Monthly Trading Summary (Sample - High/Low Price) | Month | TSX High (CAD) | TSX Low (CAD) | Nasdaq High (USD) | Nasdaq Low (USD) | | :--- | :--- | :--- | :--- | :--- | | Jan 2024 | $2.62 | $1.89 | $1.97 | $1.40 | | Mar 2024 | $3.08 | $2.34 | $2.25 | $1.74 | | Jun 2024 | $2.29 | $1.91 | $1.68 | $1.31 | | Sep 2024 | $1.72 | $1.49 | $1.28 | $1.09 | | Dec 2024 | $2.40 | $1.82 | $1.73 | $1.27 | Escrowed Securities and Securities Subject to a Contractual Restriction on Transfer As of the date of this AIF, the company reports that, to its knowledge, there are no outstanding securities subject to escrow arrangements or contractual restrictions on transfer - To the knowledge of the Company, no securities are currently subject to escrow or contractual transfer restrictions[200] Prior Sales During 2024, the company issued several securities not listed on a marketplace, consisting of stock options and warrants, with a table detailing the issue dates, exercise prices, and number of securities for these issuances Unlisted Securities Issued in 2024 | Security Type | Issue Date | Exercise Price | Number of Securities | | :--- | :--- | :--- | :--- | | Options | Mar 31, 2024 | $2.71 | 64,400 | | Options | Jun 30, 2024 | $2.04 | 145,041 | | Options | Sep 30, 2024 | $1.63 | 5,800 | | Options | Dec 31, 2024 | $1.86 | 54,500 | | Warrants | Aug 9, 2024 | $2.15 | 500,000 | Directors and Officers This section lists the company's directors and executive officers, including their positions and principal occupations, with key figures like David Feller (Chair & CEO) and Gregory Feller (President & CFO), who collectively owned or controlled approximately 8% of the company's issued and outstanding Common Shares Name, Occupation and Security Holding This section lists the company's directors and executive officers as of the AIF date, including their positions and principal occupations. Key figures include David Feller (Chair & CEO) and Gregory Feller (President & CFO). Collectively, the directors and executive officers beneficially owned or controlled approximately 8% of the company's issued and outstanding Common Shares - Key executive officers include David Feller (Chair & CEO), Gregory Feller (President & CFO), and Justin Carter (COO)[204] - As of the AIF date, directors and executive officers as a group beneficially owned or controlled approximately 8% of the Company's issued and outstanding Common Shares[205] Biographies Professional biographies are provided for the company's directors and key officers, including David Feller, the founder and CEO; Gregory Feller, co-founder, President, and CFO with a background in investment banking; and other directors with experience in technology, private equity, and entrepreneurship - David Feller, founder and CEO, has led Mogo for over 20 years[207] - Gregory Feller, President and CFO, has a background in technology investment banking at firms including Citadel Securities, UBS, and Lehman Brothers[208] - Director Christopher Payne co-founded X.com with Elon Musk, which later became PayPal[210] Cease Trade Orders, Bankruptcies, Penalties or Sanctions The company confirms that none of its directors, executive officers, or major shareholders have been subject to any corporate cease trade orders, personal or corporate bankruptcies, or significant penalties or sanctions from courts or securities regulators within the last 10 years - No director or executive officer has been subject to a cease trade order for more than 30 days in the past 10 years[215] - No director, executive officer, or major shareholder has been involved in a bankruptcy or similar proceeding in the past 10 years[216] - No director or executive officer has been subject to penalties or sanctions by a court or securities regulator[217] Interests of Management and Others in Material Transactions To the best of the company's knowledge, there have been no material interests, direct or indirect, held by directors, senior management, or shareholders with more than 10% ownership in any transaction within the last three years that has materially affected the company - The company reports no material interests of directors, senior management, or major shareholders in any material transaction within the last three years[219] Legal Proceedings and Regulatory Actions The company is involved in legal proceedings considered normal to its business but believes none are material to its financial condition or results of operations, and neither the Company nor its subsidiaries are involved in any regulatory action that would have a material adverse effect on the Company - The company states it is involved in legal proceedings considered normal to its business but believes none are material to its financial condition or results of operations[220] - Neither the Company nor its subsidiaries are involved in any regulatory action that would have a material adverse effect on the Company[221] Transfer Agent and Registrar The transfer agent and registrar for the Common Shares is Computershare Investor Services Inc., located in Vancouver, British Columbia - The transfer agent and registrar for the Common Shares is Computershare Investor Services Inc., located in Vancouver, British Columbia[222] Material Contracts The only material contracts listed, other than those in the ordinary course of business, are related to the company's revolving credit facility and associated subordination agreements, specifically the Second Amended and Restated Revolving Credit and Guarantee Agreement dated February 26, 2025, with DB FSLF 50 LLC, with copies available on the SEDAR+ website - The only material contracts listed, other than those in the ordinary course of business, are related to the company's revolving credit facility and associated subordination agreements[223] - The primary material contract is the Second Amended and Restated Revolving Credit and Guarantee Agreement dated February 26, 2025, with DB FSLF 50 LLC[225] - Copies of these contracts are available on the SEDAR+ website[224] Experts The company's annual consolidated financial statements as of December 31, 2024, were audited by MNP LLP, an independent registered public accounting firm, which has confirmed its independence under all relevant Canadian and U.S. professional and regulatory standards - The company's annual consolidated financial statements as of December 31, 2024, were audited by MNP LLP, an independent registered public accounting firm[225] - MNP LLP has confirmed its independence with respect to the Company under all relevant Canadian and U.S. professional and regulatory standards[227] Information on the Audit Committee The Audit Committee's charter, outlining its purpose, composition, and responsibilities, is attached as Appendix A to this Annual Information Form, with all members considered independent and financially literate under applicable Canadian and U.S. securities rules, and at least one member qualifying as an 'audit committee financial expert' as defined by the SEC The Audit Committee's Charter The company's Audit Committee Charter, which outlines the committee's purpose, composition, and responsibilities, is attached as Appendix A to this Annual Information Form - The full text of the Audit Committee Charter is provided in Appendix A of the AIF[228] Composition of the Audit Committee The Audit Committee is composed of three directors: Christopher Payne (Chair), Kristin McAlister, and Kees Van Winters. All members are considered independent and financially literate under applicable Canadian and U.S. securities rules - The Audit Committee consists of three directors: Christopher Payne (Chair), Kristin McAlister, and Kees Van Winters[229] - All three members are independent and financially literate in accordance with NI 52-110 and Nasdaq rules[229] Relevant Education and Experience The Board has determined that all members of the Audit Committee are financially literate, meaning they can read and understand complex financial statements, and at least one member qualifies as an 'audit committee financial expert' as defined by the SEC - All committee members are deemed financially literate, capable of understanding complex financial statements comparable to the company's[230][231] - At least one member of the committee is designated as an 'audit committee financial expert' per SEC definition[231] Audit Committee Oversight The Audit Committee's charter mandates that it must pre-approve all audit and non-audit services provided by the external auditors, a process designed to ensure the auditor's independence is not compromised - The Audit Committee is required to pre-approve all audit and non-audit services to be performed by the external auditors[232] - The pre-approval process includes considering the potential impact of non-audit services on the auditor's independence[232] External Auditor Service Fees (By Category) This section provides a breakdown of fees paid to the company's auditors for the fiscal years ended December 31, 2023, and 2024. Total fees paid increased from $1,422,238 in 2023 to $1,540,538 in 2024, with the majority of fees related to audit services Auditor Fees (2023 vs. 2024) | Fee Category | FY 2024 | FY 2023 | | :--- | :--- | :--- | | Audit Fees | $1,171,629 | $1,235,850 | | Audit-Related Fees | $247,170 | $0 | | Tax Fees | $108,305 | $155,492 | | All Other Fees | $13,433 | $30,896 | | Total Fees Paid | $1,540,538 | $1,422,238 | Additional Information Additional information relating to the Company, including financial statements and management circulars, can be found on SEDAR+ (www.sedarplus.ca) and EDGAR (www.sec.gov) - Additional information relating to the Company, including financial statements and management circulars, can be found on SEDAR+ (www.sedarplus.ca) and EDGAR (**www.sec.gov**)[234](index=234&type=chunk)[235] Appendix A – Audit Committee Charter The Audit Committee Charter outlines the committee's mandate, composition, and extensive responsibilities, including assisting the Board with oversight of accounting, financial reporting, internal controls, and risk management, direct responsibility for the appointment, compensation, and oversight of the external auditor, and functions involving reviewing financial statements, overseeing the audit process, monitoring internal controls, and establishing procedures for handling complaints regarding financial matters - Purpose and Composition: The committee assists the Board in oversight of financial reporting and risk management. It must consist of a minimum of three independent and financially literate directors[236][238][239] - External Auditor Oversight: The committee is directly responsible for recommending, compensating, and overseeing the work of the external auditor, to whom the auditor must report directly. It must also pre-approve all audit and non-audit services[248][259] - Financial Review: The committee reviews annual and quarterly financial statements, MD&A, and earnings press releases before public disclosure. It also discusses critical accounting policies and major financial risk exposures with management[255][259][262] - Internal Controls and Compliance: The committee is responsible for establishing procedures for the confidential submission of complaints ('whistleblowing') regarding accounting or auditing matters and reviews related-party transactions for conflicts of interest[266][267]