The rationale for this acquisition was for Gold Coast to acquire a number of similar operations in South Florida to create a sizeable group of these Arcades and for Gold Coast’s Management to utilize their experience and skill to improve those operations acquired so as to achieve maximum profitability.
Gold Coast and GNCC consider this business model to be very sound and financially viable. The existing Gold Coast Operations are well established, profitable and extremely well managed. GNCC did extensive due diligence into these operations prior to this acquisition and remain very satisfied with this acquisition and with Gold Coast’s prospects.
The Company’s recently appointed Chief Executive Officer, Peter Voss, will be publishing an in depth report on the business of Gold Coast, its acquisition/growth strategy and its prospects in South Florida and very possibly, abroad.
Gold Coast is expected to contribute substantial profits to the Company over a long period of time. It is expected that over time, the business of Gold Coast could become as important to us as are our Mining Exploration Properties.
BACKGROUND: On August 11, 2014, GNCC Capital, Inc. (“GNCC”) acquired Gold Coast Gaming Corp (“GoldCoast”) which owns and operates two well established Adult Social Gaming Arcades in South Florida, namely “Boardwalk Bothers” and “Play It Again”. The rationale for this acquisition was for Gold Coast to acquire a number of similar operations in South Florida to create a sizeable group of these Arcades and for Gold Coast’s Management to utilize their experience and skill to improve those operations acquired so as to achieve maximum profitability. Gold Coast and GNCC consider this business model to be very sound and financially viable. The existing Gold Coast Operations are well established, profitable and extremely well managed. GNCC did extensive due diligence into these operations prior to this acquisition and remain very satisfied with this acquisition and with Gold Coast’s prospects. The Company’s recently appointed Chief Executive Officer, Peter Voss, will be publishing an in depth report on the business of Gold Coast, its acquisition/growth strategy and its prospects in South Florida and very possibly, abroad. Gold Coast is expected to contribute substantial profits to the Company over a long period of time. It is expected that over time, the business of Gold Coast could become as important to us as are our Mining Exploration Properties. LEGALITY OF ADULT SOCIAL GAMING OPERATIONS IN FLORIDA: Following changes to Law in Florida pertaining to these operations approximately a year ago, all operators were forced to amend the way in which they operated their business. The State did not outlaw arcades, but said they needed to change the way they operate. The change is found in the Florida Statue 849.161 (see attached). This resulted in substantial decline in profits for these operators and a number closed. Over the past year, the new business models deployed in these businesses by a number of operators, to comply with the letter of the law, resulted in reasonable profitability of these businesses. Gold Coast’s Management in particular, have been very successful in this new approach. These changes to the law in Florida resulted in a wealth of acquisition opportunities at reasonable prices for Gold Coast’s strategy. Gold Coast’s operations operate strictly within the laws of the State of Florida. 2 | Page DESCRIPTION OF GOLD COAST’S BUSINESS OPERATIONS OPERATING WITHIN THE STATUTES OF THE STATE FLORIDA: GOLD COAST’S BUSINESSES, “BOARDWALK BROTHERS” and “PLAY IT AGAIN” OPERATE STRICTLY WITH THE LAWS OF THE STATE OF FLORIDA AND IN NO WAY VIOLATE THE EXISTING STATUTES UNDER WHICH THEY OPERATE. Gold Coast’ existing two Arcades, “Boardwalk Brothers” and “Play It Again” only operate their arcades in a very specific business manner. First, the games at each arcade are strictly for amusement. Customers cannot win anything from playing the games. Hence, the term gaming specifically means playing a video game. To be considered gambling, three elements must be present: consideration, chance, and prizes. Since we have eliminated all prizes, no gambling is taking place. Next, the games at each location as well as each location itself fall under the definition of an “amusement game or machine” and “arcade amusement center” found in the Florida Statue 849.161 (see attached). Furthermore, each location is considered a social club in our business model. Members pay a daily membership fee to spend time at our social club with their friends. For that daily membership fee, they get credits to play our video games, they can sit and play cards, and they get served a free meal. Once again, if they choose to play our video games, they cannot win anything from the outcome of the games. They cannot transfer or redeem the credits from playing a game for anything of value. Finally, Gold Coast has created a rewards program similar to a rewards/loyalty program you would find at: American Express, Capital One, Discover Card, Best Buy, Sports Authority, Restaurants, etc. The way our rewards/loyalty program works is for every dollar a customer spends and for just coming in, they earn reward points. Once they have accumulated enough reward/loyalty points they can exchange these reward/loyalty points for prizes. These reward / loyalty points are not tied to the games at our locations. For example, a person can come in, pay their membership fee, sit and have coffee with friends, never play a game, and earn reward/loyalty points.
GNCC Capital, Inc. (OTC:GNCP) (“The Company”) has acquired a 100% interest in a Reputation Management company and with immediate effect.
This Reputation Management Company is based in Southern California; and operates in the “Internet SEO and Social Media” space.
This Company meets our acquisition criteria track record requirements: namely, established Management, strong sustainable revenues, cash flow and profits with minimal Capital expenditure requirements and little to no Accounts Receivable or Inventory. The Company has a 6 year track record and strong Management whom will continue on long term Agreements.
ACQUISITION OF REPUTATION MANAGEMENT COMPANY:-
GNCC has acquired the entire interest in a Reputation Management Company (“RM”), effective September 18, 2014. RM will contribute to the Company’s revenues with immediate effect and will be accounted for in the Company’s Annual Results to September 30, 2014.
The Company acquired RM through the issuance of shares of Series H Convertible Preferred Stock.
The Company will not be taking any impairment charges on this acquisition as it is comprised of various fixed and tangible assets and goodwill. No liabilities are being assumed in this acquisition.
GNCC and RM have entered into initial three year service and employment agreements with the Directors of RM.
THE BUSINESS AND PROSPECTS OF THIS REPUTATION MANAGEMENT COMPANY:-
RM is a well-established and profitable company, specializing in Reputation Management for Brands and Individuals and it is at the cutting edge of this industry. The directors, have an extremely solid and proven track record, in building and scaling on-line businesses.
RM has a very stable revenue stream and an impressive client list on which to build further. The white- hat expertise and techniques used incorporate; Social Media, SEO (Search Engine Optimization) and SEM (Search Engine Marketing). This acquisition will enable management to focus on growing revenues and continuing their development of software, which will automate the vast majority of the processes required.
RM are currently in beta mode for, what will be, the first Reputation Monitoring and Management software, enabling Politicians to manage how they are perceived online. The software will be used to help identify conversations that appear online, offer up solutions and to be proactive in preventing these from staying in the search engines and to keep up to date on conversations that are being said about their constituents. The software will not only aggregate, in real time, content that exists on the web, but will take it one step further and offer up suggestions on what to do when the content does appear.
Clients will purchase the software and have access to the data. There will also be a business model to help service clients when they do not have a team internally to help respond to negative or positive press that appears online.
The market size is huge, with political marketing expected to grow to over $20b by 2016 in the US. This is not only fueled by national election years, but also local state and city elections. In addition to the US market, there is interest being expressed from both Mexico and the Philippines
Reputation Management is amongst the fastest growing sectors of the on-line industry. The explosive growth of the Internet has dramatically changed the demands of reputation management. There are few barriers to publishing online, and every author has at least the potential of reaching broad audiences. There are also few laws regulating online information. Content is often posted anonymously, and website operators have legal immunity over what is posted on their sites. In many cases there is no one to prosecute, and no leverage to demand retractions.
Online reputation management (ORM) first appeared in the mid-1990s, and has grown along with Internet use. These changes have also forced a much more proactive stance toward the protection of brand integrity. Security professionals now have a broad mandate for investigating, addressing and resolving online threats to the reputation of their company and its executives.
APPOINTMENT TO GNCC ADVISORY COMMITTEE:-
The Company has appointed the Chief Executive Officer of this Reputation Management Company, David J. Harris to its Advisory Committee and with immediate effect.
STRATEGIC BENEFITS TO GNCC:
In addition to the revenues, profits, growth and new directions mentioned above, the Directors of GNCC see additional benefits in that this acquisition will enable GNCC and its main operating Subsidiary companies to (a) utilize the strengths and internal expertise of RM to complete upon its various required corporate web sites, and (b) position GNCC and its various subsidiaries on the web and on Internet Search Engines, and (c) allow GNCC and its various subsidiaries to draw upon the acquired company’s combined Management and Employee talent in order, and to (d) to favorably position GNCC and its subsidiaries on various internet search engines for the benefit of its stockholders.
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