Pinetree Capital Ltd. (TSX:PNP)
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1 Year : From Mar 2017 to Mar 2018
Pinetree Capital Ltd. (TSX:PNP) (“Pinetree” or the “Company”) today announced its financial results for the three and six months ended June 30, 2017. All financial information provided in this press release is unaudited and all figures are in $’000 except per share amounts and shares outstanding.
Unaudited financial results for the three and six months ended June 30, 2017
The following information should be read in conjunction with the Company’s Unaudited Condensed Consolidated Interim Financial Statements for the three and six months ended June 30, 2017 and the accompanying notes, our Management Discussion and Analysis for the three and six months ended June 30, 2017, and with our annual Consolidated Financial Statements, prepared in accordance with International Financial Reporting Standards (“IFRS”) and our annual Management Discussion and Analysis for the year ended December 31, 2016, which can be found on SEDAR at www.sedar.com.
Selected Financial Information
| ||Three months ended||Six months ended|
| ||June 30, 2017||June 30, 2016||June 30, 2017||June 30, 2016|
|Net realized gains (losses) on disposal of investments||(2,467||)||(8,708||)||(2,467||)||(9,842||)|
|Net change in unrealized gains (losses) on investments||1,915|| ||(1,156||)||1,092|| ||(476||)|
|Net investment gain (loss)||(552||)||(9,864||)||(1,375||)||(10,318||)|
|Other income||0|| ||(3||)||595|| ||166|| |
|Total expenses||146|| ||2,049|| ||420|| ||3,246|| |
|Net (loss) for the period||(698||)||(11,916||)||(1,200||)||(13,398||)|
|(Loss) per share – basic & fully diluted||(0.15||)||(3.13||)||(0.26||)||(4.43||)|
The net investment losses for the three months ended June 30, 2017 was $552 (three months ended June 30, 2016 – net investment losses of $9,864) as a result of a net change in realized and unrealized gains (losses) on investments as indicated in the table above.
Other income for the three months ended June 30, 2017 is comprised of interest income of $nil (three months ended June 30, 2016 – other loss of $3).
The net investment losses for the six months ended June 30, 2017 was $1,375 (six months ended June 30, 2016 – net investment losses of $10,318) as a result of a net change in realized and unrealized gains (losses) on investments as indicated in the table above.
Other income for the six months ended June 30, 2017 is comprised of interest income of $1 (six months ended June 30, 2016 – $13) and $594 (six months ended June 30, 2016 - $nil) funds received from the settlement agreement on a class action law suit with a company whose shares used to be in Pinetree’s investment portfolio. Other income in the six months ended June 30, 2016 also included $1 gain on purchase of convertible debentures under normal course issuer bid and $152 gain on redemption of convertible debentures.
| ||As at June 30, 2017||As at Dec 31, 2016|
|Total assets|| ||19,244|| ||11,024|
|Total liabilities|| ||405|| ||375|
|Net asset value|| ||18,839|| ||10,649|
|Shares outstanding|| ||9,045,198|| ||4,522,599|
|Net asset value per share – basic*||$||2.08||$||2.35|
As at June 30, 2017, the Company held investments at fair value totaling $5,585 as compared to $6,695 as at December 31, 2016, a 17% decrease, attributable to realized loss on existing investments offset by additions to the investment portfolio during the three months ended June 30, 2017.
The following is Pinetree's NAV per share and Operating Expenses per NAV for the eight most recently completed interim financial periods:
| ||Shares Outstanding||Net Asset Value (NAV)||Operating Expenses (OpEx)||NAV per share - basic*||QuarterlyOpEx per NAV*|
| || ||$'000s||$'000s||$||%|
|Mar-31-17|| 4,522,599|| 10,154|| 274|| 2.25|| 2.7|
|Dec-31-16|| 4,522,599|| 10,649|| 286|| 2.35|| 2.7|
|Sep-30-16|| 4,522,599|| 11,481|| 261|| 2.54|| 2.3|
|Jun-30-16|| 4,522,599|| 12,327|| 1,938|| 2.73|| 15.7|
|Mar-31-16|| 2,261,305|| 18,938|| 1,019|| 8.37|| 5.4|
|Dec-31-15|| 2,019,292|| 19,502|| 734|| 9.66|| 3.8|
|Sep-30-15|| 2,019,292|| 25,375|| 2,534|| 12.57|| 10.0|
* Refer to “Use of Non-GAAP Financial Measures”Shares Outstanding and Net Asset Value amounts are as at the Quarter End dateOperating Expenses amounts are for the Three months ending the Quarter End date
During the three months ended June 30, 2017, the Company continued to take a disciplined approach to capital management in order to fund ongoing operations of the Company. The Quarterly operating expenses as a percentage of NAV decreased significantly due primarily to the increased cash balance following the financing outlined below.
On May 12, 2017, the Company offered rights to holders of its common shares at the close of business on the record date of May 19, 2017, on the basis of one right for each common share held. Each right entitles the holder to subscribe for one common share of Pinetree upon payment of the subscription price of $2.10 per common share. The rights started trading on the TSX under the symbol PNP.RT from May 17, 2017 and until noon on June 22, 2017 and expired at 5:00 p.m. (Toronto time) on June 22, 2017 (the “Expiry Time”), after which time unexercised rights were void and of no value. Shareholders who fully exercised their rights were entitled to subscribe pro rata for additional common shares, if available as a result of unexercised rights prior to the Expiry Time.
On June 29, 2017, the Company's shareholders exercised 4,522,599 rights for 4,522,599 common shares of Pinetree under the rights offering with gross proceeds of $9,498. In accordance with the terms of the rights offering, 2507492 Ontario Ltd. ("250 Ontario"), a company controlled by Peter Tolnai, purchased 2,098,912 common shares of Pinetree at the same subscription price of $2.10 per common share for gross proceeds to Pinetree of $4,408. The Company incurred $117 transaction costs in connection with the rights offering.
Forward Looking Statements
Certain statements herein may be “forward looking” statements that involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Pinetree or the industry to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to vary significantly from the results discussed in the forward-looking statements. These forward-looking statements reflect current assumptions and expectations regarding future events and operating performance and are made as of the date hereof and Pinetree assumes no obligation, except as required by law, to update any forward-looking statements to reflect new events or circumstances.
Non-IFRS Measures, Non-GAAP Measures
NAV (net asset value per share) is a non-IFRS (international financial reporting standards) measure calculated as the value of total assets less the value of total liabilities divided by the total number of common shares outstanding as at a specific date. The term NAV does not have any standardized meaning according to IFRS and therefore may not be comparable to similar measures presented by other companies. There is no comparable IFRS measure presented in Pinetree’s consolidated financial statements and thus no applicable quantitative reconciliation for such non-IFRS financial measure. The Company has calculated NAV consistently for many years and believes that NAV can provide information useful to its shareholders in understanding its performance and may assist in the evaluation of its business relative to that of its peers.
About Pinetree Capital Ltd.
Pinetree is a diversified investment and merchant banking firm focused on the small cap market, with early stage investments in technology, and resource companies. Pinetree’s common shares are listed on the Toronto Stock Exchange (TSX) under the symbol “PNP”.
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Chief Executive Officer