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Toronto, Ontario--(Newsfile Corp. - November 29, 2012) - GC-Global Capital Corp. (TSXV: GDE.A) ("Global Capital") is pleased to announce its financial results for the Third quarter ending September 30, 2012.
Overall Third Quarter Performance
As at September 30, 2012 GC’s net assets were valued at $9.92 million or $0.51 per share compared to $10.54 million or $0.58 per share as at December 31, 2011. The $0.62 million dollar drop in net assets is principally a combination of $0.40 million in new shares issued (1,333,332 shares issued January 3, 2012), and the net loss of $1.00 million. The share buybacks through the Company’s Normal Course Issuer Bid (“NCIB”) were minimal in the first nine months of 2012.
The net loss for the period ending September 30, 2012 was $668,781 (2011 – loss of $1,819,603) and net comprehensive loss was $998,087 (2011 – loss of $2,581,409). The bulk of the loss from the following non-cash, valuation related sources may not be realized in the future: $329,305 due to unrealized loss on fair value through profit or loss investments (2011 – loss of $1,059,642. Net loss per share was $0.03 (2011 – loss of $0.10).
In 2012, the management team is focusing on reversing the impact of non-cash, valuation sources where possible. Progress is being made on reversing these non-cash expenses which are focused on: 1) recovering capital from legacy bridge loans which have been written down, 2) identifying opportunities to reduce the provision for loan losses, 3) improving the valuation of equity investments through working with management to drive net profit, 4) capturing improvements in the United States real estate market.
Total expenses for the first nine months of 2012 were $856,822 as compared to $3,842,416 in 2011. Total expenses reflect a decrease in legal and audit cost of $136,159 as compared with $170,428 for the same period in 2011. Rent for the first nine months of 2012 was $81,775 as compared with $70,936 (the increase in rent of $23,429 due to an early lease termination payment). All other expenses are generally lower, reflecting management’s focus on containing costs.
As at September 30, 2012, Global Capital had $621,882 in cash and short-term investments and $1,411,940 in public company investments. The Company had $1,955,657 in notes receivable, bridge loans and convertible debentures due within one year. The Company does not have any bank indebtedness but has a $100,000 Letter of Credit to provide additional working capital to Tanenbaum Landscape and Design. In managements’ opinion, the Company has sufficient resources to meet its current cash flow requirements.
As outlined in its December 2011 press release, Global Capital is one of the founding shareholders of Marathon Mortgage Corporation (“MMC”), a residential mortgage origination, sales and servicing business. In 2012, MMC applied for CMHC approval to commence mortgage origination and servicing in 2012. MMC brings together the former management team of First Marathon Mortgage Corp. which at the time of its sale in 2002 was servicing approximately $4 Billion in mortgages. As part of the process of receiving its CMHC lenders status and commencing operations, Marathon is in the process of finalizing servicing agreements with Canadian financial institutions. Marathon’s management team and business operations are in place and ready to ramp up operations upon receiving its CMHC lenders status.
Subsequent events to the third quarter
| a) | On November 16, 2012 an agreement was reached to recover $119,240 of a $250,000 loan previously written down to nil. | |
| b) | On October 28, 2012, an agreement was reached to recover $175,000 of a $226,455 a judgement previously written down to nil. | |
A full set of unaudited financial statements and related notes have been filed on SEDAR.
About GC-Global Capital Corp.
Global Capital is a merchant bank, which provides bridge loan services, to companies across many industries such as oil & gas, mining, real estate, manufacturing, retail, financial services, technology and biotechnology. For further information, please contact Jason G. Ewart at (416) 488-7760 or visit Global Capital’s website at www.gcglobalcapital.ca.
Forward-Looking Information
These materials include certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Other than statement of historical fact, all statements in this material, including, without limitation, statements regarding fair values of marketable securities, investments, bridge loans, convertible debentures, estimated asset retirement obligations, and future plans and objectives of the Company, are forward-looking statements that involve various known and unknown risks, uncertainties and other factors. There can be no assurance that such statements will prove accurate. Actual results and future events could differ materially from those anticipated in such statements. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date of these materials. Important factors that could cause actual results to differ materially from the Company's expectations include, without limitation, the level of bridge loans completed, the nature and credit quality of the collateral security, the sufficiency of cost estimates for remaining reclamation obligations as well as those factors discussed in the Company's documents filed from time to time with the TSX Venture Exchange, Canadian securities regulators and other regulatory authorities. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by this notice.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.