Jannock Properties Limited
TSX VENTURE : JPL.UN

Jannock Properties Limited

August 18, 2009 14:42 ET

Jannock Properties Limited Reports June 30, 2009 Results

TORONTO, ONTARIO--(Marketwire - Aug. 18, 2009) - Jannock Properties Limited (TSX VENTURE:JPL.UN) today reported a net loss for the Second Quarter of 2009 of $61,000 ($0.00 per share) compared with a net loss of $17,000 ($0.00 per share) for the Second Quarter of 2008. The increased losses in the Second Quarter were mainly due to expenses incurred relating to the expected dissolution of the Corporation later this year.

Operating activities for the three months ended June 30, 2009 used cash of $93,000 compared with cash used of $6,000 for the same period in 2008.

Revenue

Income in the three months to June 30, 2009 consisted of interest earned on short term investments of surplus cash of $3,000 compared with interest earnings of $42,000 in the same period last year.

General and Administrative Expenses

In the Second Quarter of this year, general and administrative expenses were $93,000, compared with $68,000 for the Second Quarter of last year. This increase is mainly due to additional expenses incurred in relation to the dissolution of the Corporation.

Income Taxes

Income tax recoveries on the Second Quarter of 2009 amount to $27,000.

Cash Flows from Operations

Cash used for operating activities in the Second Quarter of this year amounted to $93,000 compared with a cash usage of $6,000 for the same period last year. The major differences are due to:

- Cash receipts for the Second Quarter this year were $12,000 and included interest receipts of $3,000 and an income tax refund of $9,000. This compares with $42,000 of interest receipts for the Second Quarter last year.

- Cash payments for administrative and other expenses in the Second Quarter of this year were $105,000 compared with $48,000 in the same period last year.

Corporate Items

Shareholders at the Annual General and Special Meeting on May 14, 2009 approved a voluntary dissolution of the Corporation and its eventual delisting from the TSX-V exchange with an anticipated dissolution date of October 30, 2009.

The Corporation has made an application for a clearance certificate from the Canada Revenue Agency (CRA) to confirm that no taxes are payable up to the dissolution date and will seek consent from CRA to the dissolution. Following receipt of the clearance certificates and consent a dissolution date will be set and the remaining cash after payment of all liabilities will be distributed to shareholders. The Corporation has no control over how long it will take to get the required clearances from CRA and there is currently no indication as to whether they will be received in sufficient time to meet a dissolution date of October 30, 2009. The Corporation will continue to issue reports on its operating results and matters relating to the dissolution until the dissolution date.

The Corporation has estimated that an additional $200,000 may be required to satisfy all of its ordinary course debts, obligations and liabilities, including the administrative costs related to the dissolution and delisting (the "Dissolution Costs"). These Dissolution Costs include, but are not limited to, the estimated costs and expenses of: (i) the legal fees for the dissolution and delisting, (ii) tax return preparation and filing; (iii) auditor fees; (iv) mailing costs; and (v) all other amounts whatsoever required to satisfy the expenses, liabilities and obligations of the Corporation. The Corporation does not intend to make any distribution to the Shareholders until after the Corporation has obtained the consents from CRA, and satisfied all of its debts, obligations and liabilities.

Management has determined that after the payment of ordinary course liabilities, including the Dissolution Costs, the Corporation will have approximately $5,400,000 in cash, which will comprise the remaining property and assets of the Corporation that will be distributed to shareholders on the dissolution in accordance with their holdings of Special Shares.

The Corporation's shareholders hold Units which currently consists of a combination of one Class B common share and 65 Class A special shares. There are a total of 35,631,932 Units outstanding. The combination of the Corporation's Common and Special Shares are listed as Units on the TSX-V Exchange (trading symbol: JPL.UN).

Forward-looking statements contained in this news release involve risks and uncertainties that could cause actual results to differ materially from those contemplated by such statements. Factors that could cause such differences include local real estate markets, zoning applications, changes in interest rates and general economic conditions. In addition there are risk factors described from time to time in the reports and disclosure documents filed by Jannock Properties Limited with Canadian and U.S. securities regulatory agencies and commissions.



NOTICE

The accompanying interim unaudited financial statements have not been
reviewed by the Company's auditors.




JANNOCK PROPERTIES LIMITED

Interim Balance Sheet
(in thousands of Canadian dollars)
June 30 December 31
2009 2008
---- ----
(unaudited)
------------
Assets
Cash and cash equivalents (note 2) $ 5,619 $ 5,813
Other assets 12 5
Income taxes recoverable 80 37
------------ ------------
$ 5,711 $ 5,855
------------ ------------

Liabilities
Accounts payable and accrued liabilities $ 21 $ 44
Income taxes payable - 5
------------ ------------
$ 21 $ 49
------------ ------------

Shareholders' Equity
Capital stock (note 4) $ 23,115 $ 23,115
Contributed surplus 6,868 6,868
Deficit (24,293) (24,177)
------------ ------------
$ 5,690 $ 5,806
------------ ------------

------------ ------------
$ 5,711 $ 5,855
------------ ------------
------------ ------------



Interim Statement of Income, Comprehensive Income and deficit
(in thousands of Canadian dollars, except per share amount)
Three Months Six Months
Ended June 30 Ended June 30
-------------------------------------------------
2009 2008 2009 2008
---- ---- ---- ----
(unaudited) (unaudited) (unaudited) (unaudited)
Revenue
Interest Income $ 3 $ 42 $ 16 $ 95
------------- ----------- ----------- -----------
Total 3 42 16 95
------------- ----------- ----------- -----------

Expenses
General and
administrative
costs (93) (68) (191) (130)
Foreign exchange gains/
(losses) 2 2 -

------------- ----------- ----------- -----------
Income/(loss) before
income taxes (88) (26) (173) (35)

Income tax provision
(recovery) (note 3)
- current (61) (9) (93) (13)
- future 34 - 36 1
Net income (loss) and
comprehensive
income (loss) ------------- ----------- ----------- -----------
for the period $ (61) $ (17) $ (116) $ (23)
------------- ----------- ----------- -----------

Deficit - beginning of
period $ (24,232) $ (24,606) $ (24,177) $ (24,600)
Deficit - end of period $ (24,293) $ (24,623) $ (24,293) $ (24,623)

Basic and diluted earnings
(loss) per share $ (0.00) $ (0.00) $ (0.00) $ (0.00)



Interim Statement of Cash Flows
(in thousands of Canadian dollars)
Three Months Six Months
Ended June 30 Ended June 30
----------------------- -----------------------
2009 2008 2009 2008
---- ---- ---- ----
(unaudited) (unaudited) (unaudited) (unaudited)
Cash provided by (used in)

Operating activities
Cash receipts
Income tax recoveries $ 9 $ 9
Interest received 3 42 16 104
Cash payments
Income taxes - - - (443)
Other payments (105) (48) (219) (129)
----------- ----------- ----------- -----------
Total operating activities (93) (6) (194) (468)
----------- ----------- ----------- -----------

----------- ----------- ----------- -----------
Increase (decrease) in cash
equivalents (93) (6) (194) (468)
----------- ----------- ----------- -----------


Cash and cash equivalents -
beginning of period $ 5,712 $ 5,363 $ 5,813 $ 5,825
Cash and cash equivalents -
end of period $ 5,619 $ 5,357 $ 5,619 $ 5,357
Cash and cash equivalents
are comprised of:
Cash 43 55
Short term investments
(note 2) 5,576 5,302



NOTES TO INTERIM FINANCIAL STATEMENTS
(unaudited - in thousands of dollars)


1. Summary of significant accounting policies

These interim unaudited financial statements have been prepared in accordance with Canadian generally accepted accounting principles for interim financial statements in Canada. The disclosures contained in these unaudited interim financial statements do not include all disclosures required for annual financial statements. They have been prepared using the same accounting policies as set out in Note 2 to the financial statements for the year ended December 31, 2008 and should be read in conjunction with those financial statements.

2. Cash and cash equivalents

Investments are held in either banker's acceptances or term deposits with major Canadian banks in order to minimize any credit risk.

3. Income taxes

The following table reconciles income taxes calculated at the current Canadian federal and provincial tax rates with the Company's income tax expense.



Six months ended
------------------
June 30, 2009 June 30, 2008
-------------- ---------------
Income (loss) before income taxes $ (173) $ (35)
-------- -------
Expected income taxes (recovery) $ (57) $ (12)
-------- -------


4. Capital Stock

The Company's capital stock consists of Class A special shares and Class B common shares. The Class A special shares are transferable with and only with the associated Class B common shares and trade as one unit (JPL.UN). Accordingly, the Company's earnings per share have been calculated using the number of Class B common shares outstanding of 35,631,932. There have been no changes to the shares outstanding during the six months to June 30, 2009



Number of shares
----------------
Class B Class A
------- -------
Common Special Amount
------ ------- ------
Issued and outstanding at June 30, 2009 35,631,932 2,316,075,580 $ 23,115


5. Capital Management

The mandate for the Corporation is to dispose of its assets in a manner that maximizes value and distributes the net proceeds realized from those assets to shareholders in a timely fashion.

The Corporation's remaining assets are almost entirely its cash balances.

6. Potential Recoveries

The Corporation has identified approximately $200 of potential recoveries of development charges that are expected to be recovered from other developers. Any amounts received will be treated as a recovery of development costs charged to cost of sales in prior years. The Corporation is looking for ways to realize a portion of any remaining development charges within the liquidation time-frame.

The ultimate amount realized and the timing of recovery is uncertain and could differ from current estimates.

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