TORONTO, ONTARIO – GC-Global Capital Corp. (“Global Capital”) (TSX Venture Exchange “GDE.A”) announces its financial results for the first quarter ending March 31, 2014.
Overall First Quarter Performance
The Company had an active first quarter for bridge financing with over $907,500 advanced to investee companies (Advantagewon Oil Corp. – $257,500, Advantagewon Inc. – $100,000, Innovative Composites Inc. – $300,000 and Tier 3 – $250,000) which continues in the second quarter with recent financing (Advantagewon Inc. – $254,191) and with the expectation of more to follow. In addition, the Company’s investment in Poydras Gaming Finance Corp. went public at $0.25 per share (the gain from the investment will be presented in the Q2 financial statements which will be released in August 2014). The Company’s business has seen significant traction year to date which is expected to continue throughout 2014.
The Company continues to support the growth of its client company, Advantagewon Inc. with its financing of automotive repairs. Advantagewon Inc. announced in March that it had entered into an agreement with Richmond Hill based Mr. Transmission, to be the main provider of transmission and driveline repair financing across the country. Since first beginning in 1963, Mr. Transmission has grown to over 60 franchises from coast to coast becoming the largest chain of transmission and driveline repair specialists in Canada. Also during the first quarter the company closed a $1,000,000 subscription receipt financing and announced the election of Messrs. Paul Kelly and Morris Prychidny to its Board of Directors.
The net loss for the quarter ended March 31, 2014 was $397,686 (March 31, 2013 profit of – $370,948) and net comprehensive loss was $397,686 (March 31, 2013 – profit of $370,948). The bulk of the loss from operations, $257,564 (March 31, 2013 – $265,362) and equity method valuation which may not be realized in the future: $140,122 (March 31, 2013 – profit of $105,586). Net loss per share was $0.02 (March 31, 2013 – loss of $0.02). In 2014 and 2013, the management team focused on reversing the impact of non-cash, valuation sources where possible. Efforts to reverse these non-cash expenses 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.
As at March 31, 2014 GC’s net assets (including the $3.05 million dividend payable were valued at $9.73 million or $0.37 per share compared to $9.16 million or $0.35 per share at December 31, 2013. There were no share buybacks through the Company’s Normal Course Issuer Bid (“NCIB”) in the first quarter of 2014.
“Within the first quarter the Global Capital team made excellent progress executing on our goal of deploying capital in quality investments that we expect will begin to show positive results in the second quarter of this year.” said Jason Ewart, CEO of GC Global Capital Corp. “The Company had an active first quarter with $907,500 of investment transactions completed.”
Highlights Since the End of the First Quarter:
On May 5, 2014, the Company announced the completion of a 12% secured convertible debenture (the “Loan”) in the principal amount of $1,015,000 for its client company 3Tier Logic Inc. Global Capital’s total participation was $250,000 of the total financing. The net proceeds of the Loan shall be used to as working capital for 3 Tier. The Loan matures two years from the effective closing date of March 17, 2014, and bears interest at 12% per annum, payable annually for the first year and 15% per annum payable for the second year. The debenture is convertible into common shares of 3 Tier at a price of $0.10 per share.
On May 12, the Company announced that its investee company, Poydras Gaming Finance Corp. (TSXV symbol: “PYD”) completed its reverse take-over and two concurrent financings for gross proceeds of USD$11,077,000 in the form of 11% secured convertible debentures (USD$7,732,000) and a prospectus offering of shares at a price of CDN$0.25 per share ($CDN$3,345,000).
On May 14, 2014, the Company set a record date for the distribution of preferred shares. The Board of Directors of the Company has approved the distribution by Global Capital to its shareholders of the Class A Preferred Shares and the Class B Preferred Shares and set May 23, 2014 as the record date for the share distribution. This distribution will allow the Company’s shareholders of record as of that date to retain all the interest in the assets of GC Marathon Financial Corp.
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 .
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.