VLKAY » Topics » Liquidity

This excerpt taken from the VLKAY 10-K filed Mar 22, 2010.

Liquidity

        The Bank strives to maintain the liquidity necessary to meet member-credit demands, repay maturing COs, meet other obligations and commitments, and respond to changes in membership composition. The Bank monitors its financial position in an effort to ensure that it has ready access to sufficient liquid funds to meet normal transaction requirements, take advantage of investment opportunities, and cover unforeseen liquidity demands.

        The Bank is not able to predict future trends in member-credit needs since they are driven by complex interactions among a number of factors, including, but not limited to: mortgage originations, other loan portfolio growth, deposit growth, and the attractiveness of the pricing and availability of advances versus other wholesale borrowing alternatives. However, the Bank regularly monitors current trends and anticipates future debt-issuance needs in an effort to be prepared to fund its members' credit needs and its investment opportunities.

        The Bank manages its liquidity needs to ensure that it is able to meet all of its contractual obligations and operating expenditures as they come due and to support its members' daily liquidity needs. Through the Bank's contingency liquidity plans, the Bank attempts to ensure that it is able to meet its obligations and the liquidity needs of members in the event of operational disruptions at the Bank or the Office of Finance or short-term disruptions of the capital markets.

        For information and discussion of the Bank's guarantees and other commitments, see Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Off-Balance Sheet Arrangements and Aggregate Contractual Obligations, and for further information and discussion of the Bank's joint and several liability for FHLBank COs, see Management's Discussion and Analysis of Financial Condition and Results of Operations—Financial Condition—Debt Financing-Consolidated Obligations.

        The Bank's short-term liquidity management practices and contingent liquidity plans, which provide protection against temporary disruptions in access to the CO debt markets, are described in Item 7A—Quantitative and Qualitative Disclosures About Market Risk—Liquidity Risk.

92


Table of Contents

        The Bank has an additional source of external liquidity through the Federal Home Loan Banks P&I Funding Contingency Plan Agreement (the Agreement), which became effective in 2006. Under the terms of the Agreement, in the event the Bank does not fund its principal and interest payments under a CO by deadlines established in the Agreement, the other FHLBanks will be obligated to fund any shortfall in funding to the extent that any of the other FHLBanks have a net positive settlement balance (that is, the amount by which end-of-day proceeds received by such FHLBank from the sale of COs on that day exceeds payments by such FHLBank on COs on the same day) in its account with the Office of Finance on the day the shortfall occurs. The Bank would then be required to repay the funding FHLBanks.

        Until December 31, 2009, the Bank also had a source of external liquidity through a lending agreement the Bank entered into in the third quarter of 2008 with the U.S. Treasury in connection with the U.S. Treasury's establishment of the Government Sponsored Enterprise Credit Facility (GSECF). The GSECF was a lending facility under which funding was available to be provided by the U.S. Treasury in exchange for eligible collateral, which was limited to guaranteed MBS issued by Freddie Mac and Fannie Mae as well as advances by the Bank to its members. The maximum borrowings under the GSECF were based on eligible collateral. The GSECF expired in accordance with its terms on December 31, 2009, and the Bank never borrowed under the GSECF.

        During 2009, investor confidence in GSE debt improved and the Bank experienced improved market access and long-term funding costs relative to 2008. This improvement was due in part to the Federal Reserve Bank of New York's initiative to purchase up to $175 billion in GSE debt, including FHLBank debt, announced November 25, 2008, which is described under—Recent Legislative and Regulatory Developments in this Item. Following this announcement, FHLBank long-term CO bond pricing improved relative to U.S. Treasury securities and interest rate swaps, a trend which continued throughout 2009. Through March 1, 2010, the Federal Reserve Bank of New York has purchased approximately $169 billion in such debt, of which approximately $37 billion was FHLBank term debt. The Federal Reserve Bank of New York is expected to complete its purchases of GSE debt in the near term.

        Investor confidence in GSE debt has also been supported by an announcement by the U.S. Treasury in late December 2009, that it had effectively removed its $200 billion funding commitment cap for the next three years to Fannie Mae and Freddie Mac and agreed to increase its support as needed to accommodate any financial deterioration in these GSEs. Investors appear to have interpreted this as a U.S. Treasury guarantee of Fannie Mae's and Freddie Mac's liabilities for the next several years. The combined effect of the removal of that funding commitment cap and increased investor demand seems to have offset the adverse impact that the end of Federal Reserve Bank of New York purchases of GSE debt may have.

        GSE investor demand remains robust as investors continue to seek both safety and liquidity of the GSE debt market. With the continued low rate environment, the relative LIBOR spread of discount notes versus term debt has greatly diminished. These low short term rates have caused investors in search of higher rates of return to increase their demand for medium-term GSE debt which is paying more favorable rates of return.

        The FHLBanks issued a total of $506.4 billion par value of CO bonds during the year ended December 31, 2009, a decrease of $48.3 billion compared with the $554.7 billion par value issued during the year ended December 31, 2008.

This excerpt taken from the VLKAY 10-K filed Mar 22, 2010.
Liquidity.  The primary concern of depositors, creditors and regulators is the Company's ability to have sufficient funds readily available to repay liabilities as they mature.  In order to evaluate whether adequate funds are and will be available at all times, the Company monitors and projects the amount of funds required on a daily basis.  The Bank's primary source of liquidity is deposits from its customer base, which has historically provided a stable source of "core" demand and consumer deposits.  Other sources of liquidity are available, including borrowings from the Federal Reserve Bank, the FHLB and from correspondent banks.  Liquidity requirements can also be met through disposition of short-term assets.  In management's opinion, the Company maintains an adequate level of liquid assets for its known and reasonably foreseeable liquidity requirements, consisting of cash and amounts due from banks, interest bearing deposits and federal funds sold to support the daily cash flow requirements.

Management expects to continue to rely on customer deposits as the primary source of liquidity, but may also obtain liquidity from maturity of its investment securities, sale of securities currently available for sale, loan sales, brokered deposits, government sponsored programs, loan repayments, net income, and other borrowings.  Although deposit balances have shown historical growth, deposit habits of customers may be influenced by changes in the financial services industry, interest rates available on other investments, general economic conditions, consumer confidence, changes to government insurance programs, and competition.  Competition for deposits is presently quite intense, even in our traditional markets of operations in Western Washington, making deposit retention challenging and new deposit growth quite difficult.  Reductions in deposits could adversely affect the Company's financial condition, results of operations, and liquidity.  See "Risk Factors" under Item 1A. above.

Borrowings may be used on a short-term basis to compensate for reductions in deposits, but are generally not considered a long term solution to liquidity issues.  Long-term borrowings at December 31, 2009 and 2008 represent advances from the FHLB of Seattle.  Advances at December 31, 2009 bear interest at 2.94% to 4.12% and mature in various years as follows: 2011 - $10,500,000; 2012 - $5,000,000 and 2013 - $5,500,000.  The Bank has pledged $129.5 million of loans as collateral for these borrowings at December 31, 2009.  Based on pledged collateral, at December 31, 2009, the Bank had $104 million of available borrowing capacity on its line at the FHLB, although each advance is subject to prior consent.  The Bank also has a borrowing facility of $30.9 million at the Federal Reserve Bank, of which none was used at December 31, 2009.  The bank has pledged $67.4 million of loans as collateral to the Federal Reserve Bank.

The holding company specifically relies on dividends from the Bank, proceeds from the exercise of stock options, and proceeds from the issuance of trust preferred securities for its funds, which are used for various corporate purposes.  Dividends from the Bank are the holding Company's most important source of funds, and are subject to regulatory restrictions and the capital needs of the Bank, which are always primary.  Sales of trust preferred securities have historically also been a source of liquidity for the holding company and capital for both the holding company and the Bank.  We do not anticipate trust preferred securities will be a source of liquidity in 2010 due to market conditions.

At December 31, 2009, two wholly-owned subsidiary grantor trusts established by the Company had issued and outstanding $13,403,000 of trust preferred securities.  During 2009, the Company elected to exercise the right to defer interest payments on trust preferred debentures.  Under the terms of the indenture, the Company has the right to defer interest payments for up to twenty consecutive quarterly periods without going in to default.  During the period of deferral, the principal balance and unpaid interest will continue to bear interest as set forth in the indenture.  In addition, the Company will not be permitted to pay any dividends or distributions on, or redeem or make a liquidation payment with respect to, any of the Company's common stock during the deferral period.  As of December 31, 2009, deferred interest totaled $403,000 and is included in accrued interest payable on the balance sheet.

 
-42-

 

On July 2, 2003, the Federal Reserve issued Supervisory Letter SR 03-13 clarifying that Bank Holding Companies should continue to report trust preferred securities in accordance with current Federal Reserve Bank instructions which allows trust preferred securities to be counted in Tier 1 capital subject to certain limitations.  The Federal Reserve has indicated it will review the implications of any accounting treatment changes and, if necessary or warranted, will provide appropriate guidance.  For additional information regarding trust preferred securities.  See our condensed consolidated financial statements and related notes included in Item 15 of this report, including Note 9 – "Junior Subordinated Debentures".

This excerpt taken from the VLKAY 10-K filed Mar 22, 2010.

Liquidity

Our primary cash requirements include working capital, principal and interest payments on indebtedness, and funding bonuses and severance obligations. Our primary sources of funds are cash received from customers in connection with operations, proceeds from the sale of our investments, debt financing and availability under our $450,000 revolving line of credit. At December 31, 2009, we had cash and cash equivalents of $2.1 million and investments in certificates of deposit (“CDs”) of $492,000. The CDs are pledged to financial institutions as collateral to support the issuance of our line of credit. The Company had $200,000 of unused availability under its revolving line of credit at December 31, 2009.

 

33


Table of Contents

Subsequent to December 31, 2009, we satisfied our remaining severance obligation to our former CEO through the conveyance of a 32% ownership interest in Cortez. Cortez owns vacant real property located in Hernando County, Florida that previously served as Collateral to the Note discussed in “Borrowings” above. The Modification Agreement was entered into in connection with our satisfaction of this severance obligation. In connection with this severance payment, we paid approximately $320,000 to satisfy the related payroll taxes.

We currently intend to fund our capital expenditures and liquidity needs with existing cash and cash equivalent balances, our investments in certificates of deposit, as well as with cash generated by operations, the potential sales of our investments and unused availability under our revolving line of credit. As a result of our progress in significantly reducing our overhead expenses, we believe that these sources will be sufficient to fund our scheduled debt service, bonus and severance obligations, and provide required resources for working capital for the next twelve months.

We may seek to raise additional funds through public or private debt or equity financing for long-term liquidity. Financing terms from our recent debt financing discussed under “Borrowings” represent what possible additional financing could look like in the near term.

This excerpt taken from the VLKAY 8-K filed Feb 26, 2010.

Liquidity

R&G Financial’s business requires continuous access to various funding sources, both short-term and long-term. R&G Financial and its operating subsidiaries, including Premier Bank, have different liquidity and capital positions, as well as different liquidity risk management policies and funding plans, as each has different funding needs and sources of liquidity. R&G Financial and Premier Bank are also subject to regulatory capital requirements.

This excerpt taken from the VLKAY 20-F filed Feb 23, 2010.

Liquidity

        As of November 30, 2009, our principal sources of liquidity consisted of cash and cash equivalents of $51.9 million and our multi-currency credit facilities with HSBC. The facilities include a revolving line of credit which expires in October 2011, and a short-term overdraft facility. The revolving line of credit is for an aggregate principal amount of up to $30.0 million and bears interest at a rate of between 2.5% and 3.0% above LIBOR, depending on the level of debt relative to operating income. The overdraft facility is for an aggregate principal amount of $25.0 million and bears interest at a rate equal to 3% above LIBOR. As of November 30, 2009, we had no debt outstanding under our revolving line of credit or our overdraft facility. The HSBC credit facilities provide for a security interest on substantially all of our assets.

        Our future financing requirements will depend on many factors, but are particularly affected by our ability to generate profits, changes in revenues and associated working capital requirements, changes in the payment terms with our major customers and suppliers of disk drives, and quarterly fluctuations in our revenues. Additionally, our cash flow could be significantly affected by any acquisitions we might choose to make or alliances we have entered or might enter into. We believe that our cash and cash equivalents together with our credit facilities with HSBC will be sufficient to meet our cash requirements at least through the next 12 months. However, we cannot assure you that additional equity or debt financing will be available to us on acceptable terms or at all.

50


Table of Contents

This excerpt taken from the VLKAY 6-K filed Feb 17, 2010.
Liquidity – All of the assets of GoldTrust are liquid and consist of gold bullion, gold certificates, cash and interest-bearing cash deposits.

This excerpt taken from the VLKAY 8-K filed Dec 14, 2009.

Liquidity


Recent tightening of the credit markets and unfavorable economic conditions has led to a low level of liquidity in many financial markets and extreme volatility in the credit and equity markets.  As contemplated by the share exchange agreement, described below, entered into on September 28, 2009, management expects to access the equity markets to raise cash in the near future.  The Company plans to raise $3 to $5 million within the next six months through equity financing.   However, there is no assurance that the Company will be successful in securing additional capital.   In addition, if signs of improvement in the global economy do not progress as expected and the economic slowdown continues or worsens, the Company’s business, financial condition, cash flows and results of operations will be adversely affected. If that happens, the Company’s ability to access the capital or credit markets may worsen and it may not be able to obtain sufficient capital to satisfy or refinance all of its outstanding debt obligations as the obligations are required to be paid.  The Company is dependent on the continued financial support of its principal shareholder and convertible debenture investor.  If the Company is unable to achieve projected operating results and/or obtain the additional contemplated financing, management will be required to curtail growth plans and scale bank planned development activities.  Should the Company not be able to identify new capital required to it would have to renegotiate the terms of its existing loan agreements with a supplier and related parties.  The Company will be required to consider strategic and other alternatives, including, among other things, the sale of assets to generate funds, the negotiation of revised terms of its indebtedness, additional exchanges of its existing indebtedness obligations for new securities and additional equity offerings. The Company has retained financial advisors to assist it in considering these strategic, restructuring or other alternatives. There is no assurance that the Company will be successful in completing any of these alternatives.  The Company’s failure to satisfy or refinance any of its indebtedness obligations as they come due, including through additional exchanges of new securities for existing indebtedness obligations or additional equity offerings, including through additional exchanges of new securities for existing indebtedness obligations or additional equity offerings, will result in a default and potential acceleration of its remaining indebtedness obligations and will have a material adverse effect on its business.







- 7 -


This excerpt taken from the VLKAY 6-K filed Dec 14, 2009.

Liquidity


Historically, the Company’s sole source of funding is and has been the issuance of equity securities for cash, primarily though private placements to sophisticated investors and institutions.  The Company has issued common shares pursuant to private placement financings and the exercise of warrants and options.

The current market conditions, the challenging and inhospitable funding environment and the low price of the Company’s common shares make it difficult to raise funds through private placements of shares.  In addition the Company endeavors to minimize dilution to existing shareholders.  There is no assurance that the Company will be successful with any financing ventures.  Please refer to the “Risks” section of this document.

At September 30, 2009, the Company had a working capital deficiency of $1,317,551, defined as current assets less current liabilities, compared with working capital of $15,967 at December 31, 2008.  The Company’s interim consolidated financial statements were prepared using Canadian generally accepted accounting principles applicable to a going concern.  Several adverse conditions cast substantial doubt on the validity of this assumption.  

Operations for the nine months ended September 30, 2009, have been funded primarily from the redemption of short-term investments and a private placement of $204,600 completed during the period.  Subsequent to September 30, 2009, the Company closed a private placement of 3,500,000 units at a price of $0.05, for proceeds of $175,000.  At September 30, 2009, $143,854 in share subscriptions had been received by the Company.

At the shareholders’ annual general meeting, a special resolution was passed authorizing the directors, subject to receipt of all necessary regulatory approvals, to proceed in their discretion with a consolidation of all the issued and outstanding common shares of the Company on the basis of one (1) new post-consolidation common share for every ten (10) pre-consolidation common shares.  The share consolidation was recommended by Emgold management as necessary with respect to the Company’s ability to obtain required additional financing, and management wishes to express their appreciation to our shareholders for their continued support.  It is not anticipated that there will be a change of name in connection with the share consolidation.

 

13


 

Emgold Mining Corporation

Quarterly Report

Three and Nine Months Ended (Q3 2009)
September 30, 2009

(expressed in United States dollars, unless otherwise stated)

 

Shareholder approval was also given for the amendment of the terms of the Company’s outstanding Series A First Preference Shares, by changing the conversion ratio for the exchange of First Preference Shares into common shares from one (1) pre-consolidation common share for four Series A First Preference Shares to one (1) post-consolidation common share for each Series A First Preference Share.  This amendment will also require regulatory approval, and it is intended that application will also be made in the near future for this.

The Company’s ability to continue as a going concern is contingent on its ability to obtain additional financing.  The current equity and financial market conditions, the challenging environment for raising monies, and the low price of the Company’s common stock make it difficult to obtain additional funding by private placements of shares.  The junior resource industry has been severely impacted by the world economic situation, as it is considered to be a high-risk investment.  There is no assurance that the Company will be successful with any financing ventures.  It is dependent upon the continuing financial support of shareholders and obtaining financing to continue exploration and/or development of its mineral property interest.  While the Company is expending its best efforts to achieve its plans by examining various financing alternatives including reorganizations, mergers, sales of assets, or other form of equity financing, there is no assurance that any such activity will generate funds that will be available for operations.

To date, the Company has been able to advance all of its planned activities related to the I-M Project.  Golden Bear has access to commercially available technology not proprietary to Ceramext that is readily available to advance the development of the I-M Project and efforts are continuing to raise separate funding for Golden Bear to possibly construct its first commercial plant outside of Grass Valley.  Progress on the I-M Project has been at a slower pace than planned due to budgetary constraints and due to a decision by Management to revise the Permit Application at the end of the MEA prior to proceeding with the Initial Study.  

This excerpt taken from the VLKAY 6-K filed Dec 11, 2009.

¢ Liquidity

The Telecom Italia Group has a centralized financial risk management policy for market, credit and liquidity risks. The Group defines the guidelines for directing operations, identifying the most appropriate financial instruments to meet prefixed objectives, monitoring the results achieved and excluding the use of financial instruments for speculative purposes.

The table below summarizes, for the periods indicated, the Telecom Italia Group’s cash flows.

 

     Nine months ended
September 30,
 
     2009
(Unaudited)
    2008
(Recast)
(Unaudited)
 
     (millions of euros)  

Cash flows from (used in) operating activities

   3,812      5,759   

Cash flows from (used in) investing activities

   (3,793   (3,713

Cash flows from (used in) financing activities

   (1,007   (2,884

Cash flows from (used in) Discontinued operations/Non-current assets held for sale

   30      (41
            

Aggregate cash flows (A)

   (958   (879

Net cash and cash equivalents (*) at beginning of the year (B)

   5,226      6,204   

Net foreign exchange differences on net cash and cash equivalents (C)

   101      (30
            

Net cash and cash equivalents (*) at end of the year (D=A+B+C)

   4,369      5,295   
            

 

(*) For further details please see the Unaudited Interim Consolidated Statements of Cash Flows for the nine months ended September 30, 2009 and 2008 (recast) in the Unaudited Interim Consolidated Financial Statements included elsewhere herein in this Telecom Italia’s 2009 Third Quarter Financial Report 6-K.
This excerpt taken from the VLKAY 6-K filed Dec 9, 2009.

Liquidity

The financing completed June 19, 2009 has provided a significant cash position to the Company, expected to be sufficient to support its aggressive programs at the Sabodala gold project in Senegal

This excerpt taken from the VLKAY 6-K filed Dec 8, 2009.

6. Liquidity

At October 31, 2009 the Company’s cash and cash equivalents totalled $0.6 million, unchanged from the $0.6 million balance as of July 31, 2009 (the end of the Company’s first quarter of fiscal 2010) and a decrease of $0.7 million from the April 30, 2009 balance of $1.3 million, (the end of the Company’s previous fiscal year). Bullion (held by the Company and not yet sold) was valued at $0.2 million at October 31, 2009 compared to $0.8 million at July 31, 2009 and $1.2 million at April 30, 2009. Bullion is valued at the gold and silver price on the date the bullion was received. Current assets were $0.9 million at October 31, 2009 compared to $1.6 million at July 31, 2009 and $2.6 million at April 30, 2009, a decrease of $1.6 million since the end of the Company’s previous fiscal year. This decrease reflects bullion sales to fund the expenditures of cash on exploration expenses and project generation efforts, general and administrative costs associated with maintaining a public company, and expenditures related to advancing the CAFTA action.

During Q2 2010 the Company received $1.0 million from the sale of bullion and $0.3 million in expenses were added to accounts payable. Outlays of cash during the quarter included: $0.4


million in direct exploration expenditures, $0.4 million in direct general and administrative expenses and $0.6 million in CAFTA-related expenses. The net result was a marginal ($0.06 million) decrease in cash between July 31 and October 31, 2009.

See Section 7 for further discussion of the Company’s financial condition and estimated funding requirements.

6.1 Cash Flow Used For Operating Activities

The Company’s loss from continuing operations was $(1.4) million in Q2 2010 compared to $(2.6) million in the same quarter a year earlier. These losses were offset by a number of non-cash items and changes in non-cash working capital including: stock-based compensation of $0.1 million for each of Q2 2010 and Q2 2009; financing costs of $0.2 million in Q2 2010 compared to $nil in Q2 2009; a change in accounts payable and accrued liabilities of $0.3 million for Q2 2010 compared to $(0.8) million for Q2 2009; and. As a result, cash flow used for operating activities was $(0.1) million in Q2 2010, substantially decreased from $(3.2) million in Q2 2009.

For the first six months of fiscal 2010, cash flow used for operating activities was $(0.7) million compared to $(6.6) million for the first six months of fiscal 2009. The substantial decrease in cash flow used for operating activities for the current six month period compared to the same period a year earlier is largely attributable to a decrease in the loss from continued operations (a loss of $(2.2) million for the first six months of fiscal 2010 compared to $(6.4) million for the first six months of fiscal 2009) and non-cash items and changes in non-cash working capital including: financing costs of $0.2 million in the first six months of fiscal 2010 compared to $nil in the same period a year earlier; a change in accounts payable and accrued liabilities ($0.1 million for the first six months of fiscal 2010 compared to $(0.7) million for the same period of a year earlier); a change in receivables for the six months ended October 31, 2009 of $0.1 million compared to $0.1 million for the six months ended October 31, 2008; and a change in bullion of $1.1 million for the first six of fiscal 2010 compared to $nil for the same period a year earlier.

6.2 Cash Flow Provided by Investing Activities

During Q2 2009 net redemptions from the Company’s short term investments totaled $2.0 million and proceeds from the sale of discontinued operation totaled $3.1 million, compared to $nil for both items during Q2 2010. As a result, cash flow provided by investing activities was $nil during Q2 2010 compared to $5.1 million during Q2 2009.

During the first six months of fiscal 2009 the Company made redemptions from short term investments of $4.2 million and realized proceeds from the sale of discontinued operations of $3.1 million, compared to $nil for both items during the first six months of fiscal 2010. Investments in property, plant and equipment were negligible during both six month periods and as a result, cash flow used for investing activities was negligible during the first six months of fiscal 2010 compared to $7.3 million provided by investing activities during the first six months of fiscal 2009.

6.3 Cash Flow Provided by Financing Activities

The Company realized no cash flow from financing activities during Q2 2010 or Q 2 2009.

During the first six months of fiscal 2010, a negligible amount of cash flow from financing activities was realized from the exercise of employee stock options (16,666 shares at an average price of CDN $0.17 per share). There was no cash flow from financing activities during the first six months of fiscal 2009.


6.4 Contractual Obligations

The Company’s contractual obligations have not materially changed from those disclosed in its 2009 Annual Report.

This excerpt taken from the VLKAY 6-K filed Dec 2, 2009.

1.6        Liquidity

Historically, the Company's sole source of funding has been the issuance of equity securities for cash, primarily through private placements. The Company has issued common share capital in each of the past few years, pursuant to private placement financings and the exercise of warrants and options.

At September 30, 2009, the Company had working capital of approximately $2.2 million, compared to working capital of $3.3 million as at March 31, 2009. The decrease in working capital is due to the exploration and administrative expenditure incurred during the six month period ended September 30, 2009. The Company's current working capital is sufficient to fund its known commitments.

The Company will continue to advance its exploration projects, but in light of current market conditions will remain prudent and disciplined in its approach in doing so, by finding the right balance between advancing the projects and preserving its cash.

- 9 -


The Company has no long term debt, capital lease obligations, operating leases or any other long term obligations.

Development of any of the Company's mineral properties will require additional equity and possibly debt financing. As the Company is an exploration stage company, it does not have revenues from operations and, except for interest income from its cash and cash equivalents, the Company relies on equity funding for its continuing financial liquidity.

This excerpt taken from the VLKAY 6-K filed Dec 2, 2009.

Liquidity


The Company has no mineral producing properties at this time and receives no revenues from production.  All of the Company’s properties are exploration projects, and there is no assurance that a commercially viable ore deposit exists in any such properties until further exploration work and a comprehensive evaluation based upon unit cost, grade, tonnage, recoveries, and other factors conclude economic feasibility.


Effective August 14, 2009, 2,675,000 options were cancelled and 3,325,000 options were issued at $0.10, expiring August 14, 2014. The cancelled options are not eligible for re-issue for 90 days.  As of November 15, 2009, there are no share purchase warrants outstanding and if all the issued incentive stock options were exercised the number of shares outstanding would be 84,217,537.  


This excerpt taken from the VLKAY 6-K filed Nov 27, 2009.

Liquidity


Because the Company does not currently derive any production revenue from operations, its ability to conduct exploration and development work on its properties is largely based upon its ability to raise capital by equity funding. Throughout the year, the Company issued 906,209 shares in private placements with Mr. Sinclair, Chairman and CEO of the Company in consideration for cash received of $4,250,000   In addition, the Company has received $1,740,000 for share subscriptions for which 692,401 common shares were issued.


As of August 31, 2009 the Company’s working capital was $943,000 as compared to $1,265,000 on August 31, 2008.  As the Company’s mineral properties advance under various exploration agreements, option payments could increasingly play a role in funding exploration activities for our own account.


The following table sets out the Company’s known contractual obligations as of the latest fiscal year end:


Contractual Obligations

Payments Due by Period

Total

Less than
1 year

2-3 years

4-5 years

More than
5 years

Capital Lease

US$38,110(1)

US$38,110

Nil

Nil

Nil

 (1)        Includes finance charges

  


This excerpt taken from the VLKAY 6-K filed Nov 27, 2009.

LIQUIDITY

The Company used $557,497 in cash for its operations during the second quarter, down from the comparable quarter of 2008 due to efforts to reduce expenses in all areas. Cash flow used by operating activities, the comparable GAAP measure was $446,708.

7


At the beginning of May 2008, Genoil announced a new bridge financing from the Company’s CEO. The previous $1 million credit facility was replaced by a one year, $5 million facility that bears no interest and has 1,200,000 warrants attached; the warrants have an exercise price of $0.37 and a term of one year. Under the terms of this agreement, the CEO agreed to lend to the Company up to an aggregate of $5 million, provided that the amounts have been pre-approved by the CEO. Any amounts repaid shall not be subject to being redrawn and shall reduce the aggregate commitment. Upon the repayment of all advances at any time, this facility shall terminate immediately. Any amounts not repaid on May 12, 2009 will accrue interest at 12%.

The Company also closed a shares for debt transaction on May 1, 2009 to satisfy amounts outstanding to certain creditors. A total of U.S. $ 212,191.74 debt has been cancelled in exchange for an aggregate of 1,367,319 common shares and 564,302 warrants of the Company. Genoil granted certain of the creditors warrants which are exercisable at any time prior to 2 years after the date of issuance at a price of US $0.21, and granted other creditors warrants which are exercisable at any time prior to 2 years after the date of issuance at a price of US $0.20.

Genoil closed a private placement on May 6, 2009. The Corporation issued a total of 10,725,443 units, at a price of US$0.13 per unit, each unit consisting of one common share and one common share purchase warrant for total gross proceeds of US$1,394,308.26. These warrants are exercisable until two years following their issue date at a price of US$0.20. The common shares and warrants issued in connection with this private placement are subject to a four-month hold period pursuant to the rules of the TSX Venture Exchange and Canadian securities legislation.

On October 22, 2009, Genoil announced that it had closed a private placement, whereby the Corporation issued 1,399,884 units, at a price of U.S. $0.13 per Unit, each Unit consisting of one common share and one common share purchase warrant for total gross proceeds of approximately U.S. $182,000. The warrants are exercisable until two years following their issue date at a price of U.S. $0.20. The common shares and warrants issued in connection with the private placement are subject to a four-month hold period pursuant to the rules of the TSX Venture Exchange and Canadian securities legislation

This excerpt taken from the VLKAY 6-K filed Nov 25, 2009.

Liquidity


The Company’s cash and cash equivalents balance at September 30, 2009 was $3,937,621 compared with $762,560 at December 31, 2008. The Company had working capital of $4,209,954 at September 30, 2009 compared with working capital of $652,131 at December 31, 2008. The increase in working capital is attributable to the acquisition of Rimfire Minerals and completion of a brokered private placement during the quarter.


For the three months ended September 30, 2009 and 2008, cash used in operating activities was $4,030,741 and $3,251,693, respectively. The increase is attributable to increased exploration combined with decreased selling, administrative and consulting services as the Company curtailed activities late in 2008 to preserve cash. For the nine months ended September 30, 2009 and 2008, cash used in operating activities was $5,405,249 and $6,794,193, respectively.  


The Company’s financial instruments are all fully cashable at any time so there are no restrictions on availability of funds. There is no long-term debt. The Company’s current obligations include lease commitments for office space. The lease expires November 30, 2010. Lease commitments for the remainder of the current fiscal year total $31,852. The other current obligations are statutory withholding and payroll taxes.


This excerpt taken from the VLKAY 6-K filed Nov 18, 2009.

1.6        Liquidity

Historically, the Company's sole source of funding has been the issuance of equity securities for cash, primarily through private placements to sophisticated investors and institutions. Except for 2008, the Company has issued common shares in each of the past few years pursuant to private placement financings and the exercise of warrants and/or share purchase options. The Company's access to financing when the financing is not transaction specific is always uncertain. There can be no assurance of continued access to significant equity funding.

The funding of expenditures on the Pebble Project is through the Pebble Partnership which is currently being provided by Anglo (described below). Excluding cash and cash equivalents in the Pebble Partnership, Northern Dynasty has approximately $45 million in cash and cash equivalents for its own operating requirements.

As discussed in section 1.2.2. , the Company is in a 50:50 limited partnership with Anglo. Each of the Company and Anglo effectively has equal rights in the Pebble Partnership through wholly-owned affiliates. To maintain its 50% interest in the Pebble Partnership, Anglo is required to make staged cash investments into the Pebble Partnership aggregating US$1.425 billion to US$1.5 billion over a period of several years. This includes an initial minimum expenditure of US$125 million to be expended towards a prefeasibility study (funding completed as of 2008), plus a requirement to fund any additional expenditures approved. Thereafter in order to retain its 50% interest, Anglo is required to commit to further expenditures which bring its total investment to at least US$450 million which amount is to be expended producing a final feasibility study and in related activities, the completion of which is expected to take the Pebble Partnership to a production decision. Upon an affirmative decision to develop a mine, Anglo is required to commit to the remainder of the total investment of US$1.425 billion to US$1.5 billion in order to retain its 50% interest in the Pebble Partnership.

At September 30, 2009, the Company had working capital of approximately $44.9 million as compared to $46.1 million at December 31, 2008.

Other than disclosed in the financial statements, the Company has no long term debt, capital lease obligations, operating leases or any other long term obligations.

The Pebble Partnership has purchase orders for goods and services relating to engineering, environmental, stakeholder affairs and site operations activities on the Pebble Project. It also is responsible for all

Page 13


 
NINE MONTHS ENDED SEPTEMBER 30, 2009
MANAGEMENT'S DISCUSSION AND ANALYSIS

maintenance payments on the property and routine office leases. All costs are funded through existing cash resources in the Pebble Partnership which are being funded by Anglo and are in the normal course of operations.

This excerpt taken from the VLKAY 6-K filed Nov 17, 2009.

1.6          Liquidity

At September 30, 2009, the Company had cash and equivalents of $41.6 million, as compared to $4.6 million at December 31, 2008. In addition, the Company had working capital of $31.3 million, as compared to working capital deficiency of $70.7 million at December 31, 2008. The increase in working capital was primarily a result of additional funding raised from financing activities discussed in Section 1.7 Capital Resources as well as increase in both copper and molybdenum prices and sales volume since December 2008.

Management anticipates that sales from copper and molybdenum concentrate and copper cathode, along with the various financing activities disclosed in Section 1.7 Capital Resources, the new 24-month mine plan and implemented cash management strategies will be sufficient to fund current operations and satisfy obligations as they come due. Management is actively monitoring all commitments and planned expenditures necessary to maintain operational objectives for the upcoming fiscal year.

Liquidity Risk

The Company ensures that there is sufficient capital in order to meet short term business requirements, after taking into account cash flows from operations and the Company's holdings of cash and equivalents. The Company believes that these sources will be sufficient to cover the likely short and long term cash requirements. The Company's cash and equivalents are invested in business accounts with a major Canadian financial institution and are available on demand for the Company's programs.

The following are the principal maturities of contractual obligations (in thousands of Canadian dollars):

    Carrying                       Over 3  
As at September 30, 2009   amount     2009     2010     2011     years  
Accounts payable and accrued liabilities $  16,638   $  16,638   $  –   $  –   $  –  
Amounts due to a related party   901     901              
Long-term credit facility   52,249         22,306     26,768     3,175  
Capital lease obligations   14,849     1,082     3,529     3,750     6,488  
Long-term equipment loan   5,016     275     1,163     1,267     2,311  
Total liabilities $  89,653   $  18,896   $  26,998   $  31,785   $  11,974  

During the period, the Company completed repurchase/redemption of the US$30 million in convertible bonds that it had outstanding. In second quarter of 2009, the Company repurchased US$7.5 million of the convertible bonds from one of its bondholders for the purpose of cancellation. During this third quarter, the Company repurchased another US$12.5 million of the convertible bonds for the purpose of cancellation. In addition, the remaining bondholders exercised the “put” right on the final US$10 million.

14


THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009
MANAGEMENT'S DISCUSSION AND ANALYSIS
 

The Company currently has a US$50 million 36-month term credit facility with Credit Suisse. In addition, the Company also increased its long-term equipment loan from $3.2 million to $5.0 million. The Company is also committed to equipment purchases in relation to its expansion activities at the Gibraltar Mine in the amount of $14 million.

The Company also has purchase orders in the normal course of operations for capital equipment required for the Gibraltar expansion project. The orders have specific delivery dates and financing of this equipment will be through existing cash resources.

Other than those obligations disclosed in the notes to the unaudited interim consolidated financial statements of the Company for the period ended September 30, 2009, the Company has no other material capital commitments for capital expenditures, long term debt, capital lease obligations, operating leases or any other long term obligations.

Although the Company has implemented the necessary plans to ensure sufficient financial liquidity, the Company’s ability to repay or refinance its financial liabilities to their contractual maturities depends on a number of factors, some of which are beyond the Company’s control. There is no assurance that our expected cash flows from operations in combination with other steps being taken will allow us to meet these obligations as they become due.

This excerpt taken from the VLKAY 6-K filed Nov 17, 2009.

LIQUIDITY

At September 30, 2009, cash and cash equivalents was $1.0 million compared to $1.1 million at December 31, 2008. At September 30, 2009 the Company had a working capital deficiency of $20.2 million, compared to a working capital deficiency of $7.8 million at December 31, 2008, as a result of the following activities:

Operations:

In the nine months ended September 30, 2009 the Company recorded a loss of $24.6 million, which, adjusted for non-cash items, primarily depreciation, depletions and amortization of $4.6 million, accretion of $2.2 million and unrealized foreign exchange loss of $1.4 million, resulted in cash outflows of $15.1 million before changes in working capital. This is comprised primarily of temporary shut down costs of $10.1 million, a negative gross margin of $2.7 million and general and administrative costs of $1.9 million. During the nine months ended September 30, 2008 the Company recorded a loss of $91.8 million, which, adjusted for non-cash items, primarily depreciation, depletions and amortization of $7.9 million, accretion of $1.6 million, impairment of mineral properties of $69.4 million and a future income tax recovery of $11.7 resulted in cash outflows of $25.3 million before changes in working capital. This resulted from an $8.8 million negative gross margin, temporary shutdown costs of $7.9 million, general and administration costs of $3.5 million and restructuring charges of $4.5 million. The higher operating cash outflows are a result of minimal gold sales during the nine months ended September 30, 2009 as the mill was operational for only a short period of time and underperforming during that time due to the poor management of the mill by the contractor in place.

Changes in non-cash working capital resulted in a $10.6 million cash inflow during the nine months ended September 30, 2009 compared to cash inflows of $12.5 million in comparable period in 2008. The inflows in 2009 were primarily due to an increase in accounts payable by $4.5 million primarily related to the Jerritt Canyon operations, and the receipt of $4.7 million for future gold deliveries classified as deferred revenue. In 2008 changes to non-cash working capital were due to a reduction of accounts receivable $5.2 million due to the recovery of various deposits and an increase in payable of $9.1 million. In 2008 the payable on purchased ore also increased by $10.6 million but this was substantially offset by increased inventory.

This excerpt taken from the VLKAY 6-K filed Nov 13, 2009.

Liquidity

We completed a number of capital raising initiatives to date in 2009, including public issuances of common and preferred equity, debt securities and capital for managed funds. These initiatives have generated a total of $12 billion, of which $7 billion was completed during the third quarter. Core liquidity at the Corporation and our major operating platforms totalled $3.8 billion at quarter end, substantially higher than historical levels. In addition, we have a total of $6.7 billion of uninvested capital allocated by investors to our various mandates for total capital of $10.5 billion that could potentially be deployed into new investment opportunities.

Subsequent to the third quarter we also completed two additional equity issues, one in Brookfield Infrastructure Partners, and one in our Brazilian residential business that together raised a further $1.2 billion, of which we purchased $435 million. These issues further bolstered our liquidity and in the case of Brookfield Infrastructure, represented $950 million of the capital necessary to fund our $1.1 billion commitment to the $1.8 billion restructuring of Babcock & Brown Infrastructure that we have sponsored. We raised $560 million of the remaining capital required to complete the restructuring in the third quarter through an Australian public offering and the cash is being held in escrow awaiting closing of the transaction.

Highlights during the quarter included:

Equity Issues

 

   

$1,300 million of common and preferred shares issued by Brookfield Properties (we subscribed for $519 million of common shares); and

 

 

   

$690 million of common equity issued by Brookfield Renewable Power Fund (we subscribed for $345 million).

 

Managed funds and investment consortiums

 

   

$5 billion of equity capital allocations to the Brookfield Global Real Estate Turnaround Consortium (we have allocated $1 billion);

 

 

   

$1.3 billion of capital allocations to a Debtor-in-Possession fund (we have allocated $185 million);

 

 

   

$260 million towards a $360 million Columbia Infrastructure Fund (we have committed $50 million); and

 

 

   

We secured the mandate to launch a $500 million Peru Infrastructure Fund.

 

Debt Financings

 

   

We completed an additional $750 million of public and private debt financings including mortgage bonds and corporate financings.

 

 

 

Brookfield Asset Management  |  Q3 /2009 INTERIM REPORT           13


This excerpt taken from the VLKAY DEF 14A filed Nov 13, 2009.

Liquidity

Liquidity represents an institution’s ability to meet present and future financial obligations through either the sale or maturity of existing assets or the acquisition of additional funds through liability management. At December 31, 2008, cash and due from banks, overnight funds sold, interest-bearing deposits in other banks, and investment securities and loans maturing within one year were $1.65 billion, or 53.70% of total assets. As a result of the Company’s management of liquid assets and the ability to generate liquidity through liability funding, management believes the Company maintains overall liquidity sufficient to satisfy its depositors’ requirements and meet its customers’ credit needs.

The Company also possesses additional sources of liquidity through a variety of borrowing arrangements. The Banks maintain federal funds lines with large regional and national banking institutions and through the Federal Reserve Discount Window. These available lines totaled approximately $430.66 million at December 31, 2008, of which $73.30 million was outstanding. Federal funds purchased during 2008 averaged $3.41 million compared to an average of $609 thousand during 2007.

The Banks have credit lines in the amount of $366.35 million at the FHLB. These lines may be utilized for short and/or long term borrowing. The Banks have utilized the credit lines for overnight funding throughout 2008 and 2007 with average balances of $7.89 million and $1.06 million, respectively. At December 31, 2008, the Banks had $34.30 million of these short-term credit lines outstanding, while none were outstanding at year-end 2007. Long-term FHLB borrowings were $279.07 million and $53.00 million at year-end 2008 and 2007, respectively.

This excerpt taken from the VLKAY 6-K filed Nov 12, 2009.

Liquidity

Liquidity is defined as total available revolving credit facilities, less utilization (including letters of credit), plus cash and cash equivalents. NOVA Chemicals’ total liquidity at the end of the third quarter of 2009 was $308 million, up from $244 million at the end of the second quarter of 2009.

NOVA Chemicals had five revolving credit facilities totaling $765 million as of Sep. 30, 2009 ($683 million as of Dec. 31, 2008). As of Sep. 30, 2009 and Dec. 31, 2008, NOVA Chemicals had utilized $544 million and $184 million of its revolving credit facilities, respectively (of which $47 million and $40 million, respectively, was in the form of letters of credit). All of the revolving credit facilities mature during March 2010 (see Note 4 on page 18). NOVA Chemicals expects that during the fourth quarter of 2009, it will (i) amend and restate its $350 million syndicated secured revolving credit facility and extend the term thereof for three years and (ii) amend its three bilateral credit facilities so that they will mature in accordance with their original maturity dates. Effective Oct. 15, 2009, the undrawn $150 million facility was terminated.

On Oct. 16, 2009, NOVA Chemicals issued $350 million of 8.375% senior notes due 2016 at an issue price of 99.34%, and $350 million of 8.625% senior notes due 2019 at an issue price of 99.168%. The 2016 notes and 2019 notes have an effective yield to maturity of 8.5% and 8.75%, respectively. Net proceeds from the offering were $681 million (after deducting discounts of $5 million and fees of $14 million). The net proceeds were used to repay $242 million outstanding under the Company’s $350 million secured revolving credit facility and $254 million outstanding under NOVA Chemicals’ bilateral credit facilities. The remaining cash balance of $185 million will be used to repay the total return swap when it terminates in March 2010 and for general corporate purposes. The notes were made available in a private offering that was exempt from the registration requirements of the Securities Act of 1933 (the “Securities Act”) and were offered only to “qualified institutional buyers” as defined in Rule 144A under the Securities Act and outside the United States in reliance on Regulation S under the Securities Act. The notes have not been registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration except pursuant to an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws. NOVA Chemicals has agreed to file a registration statement with the Securities and Exchange Commission (“SEC”) within 90 days after the issuance of the notes relating to a registered offer to exchange the notes for substantially identical notes and cause such registration statement to be declared effective within 180 days after the notes were issued. Under existing SEC interpretations, subject to certain requirements, the exchange notes will be freely transferable by holders of such notes other than affiliates of the Company.

Prior to July 6, 2009, IPIC provided the Company with $350 million of interim debt financing that was converted into common equity at the closing of the IPIC transaction. Related accrued interest and fees totaling $17 million ($12 million after-tax) on the interim debt financing were forgiven by IPIC and reclassified to Contributed surplus. NOVA Chemicals removed the balance in common shares of $508 million as of July 6, 2009, before push-down adjustments, and recorded the cash paid by IPIC to acquire all of NOVA Chemicals issued and outstanding common shares for $499 million.

The $350 million secured revolving credit facility, the total return swap and NOVA Chemicals’ accounts receivable securitization programs are governed by financial covenants which require quarterly compliance. The covenants require a maximum net debt-to-cash flow ratio of 5:1 and a minimum interest coverage ratio of 2:1 computed on a rolling 12-month basis.

During the second quarter of 2009, NOVA Chemicals negotiated the following amendments to the financial covenants:

 

   

removing the maximum net debt-to-cash flow ratio and minimum interest coverage ratio covenants for the quarters ending June 30, 2009, Sep. 30, 2009 and Dec. 31, 2009; and

 

   

adding a minimum consolidated cash flow covenant which requires NOVA Chemicals to maintain consolidated cash flow, based on a calculation as determined in the loan agreement, that is positive for the quarter ending June 30, 2009, and that is not less than $50 million for each of the quarters ending Sep. 30, 2009 and Dec. 31, 2009, and that the minimum consolidated cash flow required can be reduced by cash proceeds received from new equity contributed by IPIC through

 

8


 

the remainder of 2009 (excluding the equity contributions made on July 6, 2009 discussed above). NOVA Chemicals was in compliance with this covenant at Sep. 30, 2009.

All lenders party to NOVA Chemicals’ revolving credit facilities, the total return swap and NOVA Chemicals’ accounts receivable securitization programs gave their consent to the change of control effective July 6, 2009 upon closing of the IPIC transaction.

NOVA Chemicals has $130 million ($190 million at December 31, 2008) in accounts receivable programs that expire in February 2010. The balances as of Sep. 30, 2009 and Dec. 31, 2008, were $119 million and $175 million, respectively. NOVA Chemicals does not include any undrawn amounts under the accounts receivable securitization programs as part of liquidity. NOVA Chemicals expects to enter into a new accounts receivable securitization program during the fourth quarter of 2009 to replace its existing programs.

The INEOS NOVA joint venture has two accounts receivable securitization programs, a $150 million North American program and a €120 million European program. NOVA Chemicals’ 50% share of the balances as of Sep. 30, 2009 and Dec. 31, 2008, were $24 million and $27 million, respectively, under the North American program and €24 million and €25 million, respectively, under the European program.

RELATED TOPICS for VLKAY:

Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki