TORONTO, ONTARIO – GC-Global Capital Corp. (“Global Capital” or the “Company”) (TSX Venture Exchange “GDE.A”) previously announced in an October 23, 2013 press release the intention is to spin-out a wholly-owned subsidiary real estate investment company, GC Marathon Financial Corp. (“GC Marathon”) in the form of a return of capital share distribution to Global Capital’s shareholders. Although GC Marathon filed a preliminary prospectus dated March 13, 2014 in this regard, GC Marathon and Global Capital have decided not to proceed with a public offering by way of a distribution in kind to its shareholders.


Instead, shareholders of Global Capital will receive two-thirds of a Class A Preferred Share in the capital of the Company (the “Class A Preferred Shares”) and one-third of a Class B Preferred Share in the capital of the Company (the “Class B Preferred Shares”) for each subordinate voting share or multiple voting shares of the Company held at the close of business on May 23, 2014. The distribution by Global Capital of the 17,335,578 Class A Preferred Shares and 8,667,353 Class B Preferred Shares will not affect the number of outstanding subordinate voting or multiple voting shares of Global Capital.


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.


The Class A Preferred Shares and the Class B Preferred Shares shall convert automatically into subordinate voting shares and multiple voting shares, respectively, of, GC Marathon upon GC Marathon becoming a reporting issuer in any jurisdiction in Canada in accordance with applicable securities laws. In addition, holders of Class A Preferred Shares and Class B Preferred Shares shall have the following rights:



  • Both classes of preferred shares shall have the right to participate equally upon the winding up, dissolution or liquidation of the Corporation, but only with respect to the assets of GC Marathon;

  • Both classes of preferred shares shall be entitled to dividends if so declared by the board of directors of the Company;

  • Any fundamental changes to either the structure or operation of GC Marathon, such as amending the terms of the preferred shares, dissolving or liquidating GC Marathon, changing the focus of GC Marathon’s business in a material manner or sell assets outside the ordinary course of business, shall only be undertaken upon the approval of two-thirds of the votes attached to the Class A Preferred Shares- 2 – (entitled to one vote per share) and the Class B Preferred Shares (entitled to four votes per share), voting together as a class; and

  • Any changes to the board of directors of GC Marathon shall only be undertaken with the approval of a majority of the votes attached to the Class A Preferred Shares (entitled to one vote per share) and the Class B Preferred Shares (entitled to four votes per share), voting together as a class.


 


The assets of GC Marathon currently have a market value of approximately $1.8 million and will continue to be consolidated into Global Capital’s financial statements until this conversion occurs. The Company anticipates that this will be accounted for by being booked as an liability of approximately $3.0 million, being the original book value, but will remain as an asset on the balance sheet reflecting the current market value of $1.8 million.


Global Capital’s registered shareholders will receive share certificates representing their Class A Preferred Shares and Class B Preferred Shares by mail shortly after the May 23, 2014 record date. Global Capital’s beneficial shareholders should contact their securities dealers regarding receipt of their Class A Preferred Shares and Class B Preferred Shares.


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 Statements


This news release contains statements that may constitute “forward-looking information” or “forward-looking statements” within the meaning of applicable Canadian securities legislation. Forward-looking information and statements may include, among others, statements regarding the future plans, costs, objectives or performance of Global Capital, or the assumptions underlying any of the foregoing. In this news release, words such as “may”, “would”, “could”, “will”, “likely”, “believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate” and similar words and the negative form thereof are used to identify forward-looking statements. Forward-looking statements should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether, or the times at or by which, such future performance will be achieved. No assurance can be given that any events anticipated by the forward-looking information will transpire or occur, including GC Marathon becoming a reporting issuer, or if any of them do so, what benefits that Global Capital, GC Marathon or their respective shareholders will derive. Forward-looking statements and information are based on information available at the time and/or management’s good-faith belief with respect to future events and are subject to known or unknown risks, uncertainties, assumptions and other unpredictable factors, many of which are beyond the control of – 3 – Global Capital. Global Capital does not intend, nor does Global Capital undertake any obligation, to update or revise any forward-looking information or statements contained in this news release to reflect subsequent information, events or circumstances or otherwise, except if required by applicable laws.


Neither the 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.