(Ending September 30th 2016)
Common Shares: 48,421,510
Insider Holdings: 22,830,260 (This can be found on SEDAR – Information Circular)
Monthly Updates can be found here: thecse.com
**NOTE** Q1 results will be out in February 2017
Most Recent Financial Statements(SEDAR)
Accounts Receivable: $362,124
Prepaid Expenses: $33,240
Property & Equipment: $596,685
Total Assets: $1,051,908
Bank Debt: $165,221 (Now reduced to $112K, see CSE December Monthly Update)
Accounts Payable: $631,395
Finance Leases: $69,080 (Portion)
Finance Loans: $25,965 (Portion)
Deferred Revenue: $100,560 – This will disappear as its revenue already received
Deferred Rent: $5,971 (Portion)
Loans Payable: $345,000 (Increased to $545,000 – Loan from GTI Employee. See monthly Report)
Finance Lease: $42,252 (Remaining)
Finance Loan: $34,619 (Remaining)
Deferred Rent: $28,361 (Remaining)
Total Liabilities: $1,448,424
**Keep in mind the update as per December 2016 from the CSE**.
2016 Revenue (2015 Revenue)
Gross: $4,695,552 ($4,184,230) – Sales increased year over year
EBTIDA: $264,501 (-$40,060) – 2015 was a loss and 2016 was a profit
Net Income: $43,784 (-$191,629)
GTI went from several quarters of losses to three back to back profitable quarters. See MD&A on Sedar.
Glenbriar Technologies Inc. (CSE: GTI) provides leading edge Cloud-enabled business technology solutions. From its offices in Calgary, Vancouver and Waterloo, Glenbriar’s IT professionals and software developers design, manage and support solutions that include IT Services, Cloud Services, Portals & Collaboration, Unified Communications, Software and Security. See www.glenbriar.com for more details.
Revenue increased 12% in 2016, made up of a 1% decrease in services revenue and a 48% increase in equipment sales. Most of the change reflects a reduction of services to the oil and gas sector, which experienced continued decline in Alberta due to low oil prices, resulting in several clients going out of business, deferral of project work, and reduced services due to declining staff counts. This downturn was offset by Glenbriar actively diversifying its client base outside of the energy sector and into senior health and living facilities. A number of new projects in this latter sector resulted in an increase in equipment sales, which is unlikely to be repeated in fiscal 2017, although a pickup is expected by the fourth quarter in equipment sales to that sector. In addition, Glenbriar made major investments in 2015 in data centre and back office infrastructure to facilitate the shift to a Cloudcentric service model, which investments were continued on a substantially reduced basis until January 2016. As more clients are brought into the Cloud centric model, there are lower equipment sales to clients and more equipment being purchased directly by Glenbriar. Gross margin remained steady at 32% in 2016 and 2015, compared to 26% in 2014. The move to a Cloud-centric services model increases fixed costs in relation to variable costs, making operations less profitable in a downturn and more profitable in an upturned economy. Net income was $43,784 in 2016, up from a loss of $191,629 in 2015, but still below income of $271,122 in 2014. The 2014 net income included a $107,000 gain on sale of Peartree Dealership.
Glenbriar entered into a revolving demand credit facility with the Royal Bank of Canada in March 2015. The total borrowings are secured by a general security agreement over Glenbriar’s current and after acquired assets, and postponement of loans payable. The bank indebtedness required the Corporation to maintain a ratio of liabilities to tangible net worth of not greater than 4:1 at the end of the fiscal year. At September 30, 2015 the Corporation was in default of the covenant, leading to suspension of the facility in February 2016. The Corporation then entered in to an agreement with the Bank to repay the balance at $20,000 per month commencing in April 2016 (at which time the balance was $292,000) through September 2016, with the balance due in October 2016. This agreement was extended in December 2016 to continue the monthly payments until April 2017, with the balance now due in May 2017. The balance outstanding as of September 30, 2016 was $165,221.
Loans payable at September 30, 2016 in the amount of $345,000 (September 30, 2015 - $345,000) consist of net advances from officers of the Corporation secured by a general security agreement which bear interest at the rate of interest charged on the bank indebtedness (note 5). The advances are repayable 12 months after the officers provide written request for payment. As at September 30, 2016, the officers had not requested payment, and consequently, the advances have been classified as non-current liabilities, and related accrued interest of $17,100 is included in accounts payable (2015 - $45,564).
Glenbriar entered into two (2015 – four) new finance leases in fiscal year 2016 to facilitate its new cloud infrastructure. Finance leases consisted of six equipment leases. The equipment leases bear interest ranging between 12.33% and 16.52% annually and require blended monthly payments of interest and principal. The final payments are due between November 2017 and September 2019.
Management believes that its ongoing cash flow from operating activities, based on current internal operating forecasts, will be sufficient to satisfy its current and future obligations as they become due and to fund ongoing operations.
During December 2016, a long term employee agreed to advance $200,000 to assist with the transition away from the bank line and to provide additional liquidity over the coming year. This increased the management loan advance as of December 31, 2016 to $545,000, which is secured by a second charge on all of Glenbriar’s existing and future property. As an additional incentive to making the advance, two officers have agreed to transfer 1 million shares each to the long term employee.
Management loan advances were $345,000 as of September 30, 2016, the same as the prior year end. During the year ended September 30, 2016, Glenbriar recorded $17,100 of interest in relation to loans payable, which is included in accounts payable and accrued liabilities. See note 6 of Notes to the Financial Statements.