B) FMNL LIQUIDITY AND CAPITAL RESOURCES-
Liquidity
As of December 31, 2011 the Company had in excess of $90,873 cash on deposit.
In 2011 the working capital deficiency decreased to $3,722,506 primarily due to the reduction of current deferred revenue during the year, which decreased $200,903 to $876,165 as at September 30, 2011.
In 2010 the working capital surplus decrease to a deficiency of $3,366,191 primarily due to the sales the company’s marketable securities portfolio, which decreased $2,240,324 to $51 as at September 30, 2010.
For continuation and long-term growth specifically the development of the Life Settlement operations additional capital is required. The Company’s 120-foot motor vessel is completed and the vessel contributed some revenue in fiscal 2011.
Financing the work on the vessel to date had been from operations, a credit facility from Caterpillar Financial Services, and funds raised. The credit facility with Caterpillar Financial Services Corporation was created in September of 2005 for $3.0 million USD. This credit facility was subsequently increased to a total of $4.3 million USD in spring of 2007. The construction loan has been converted to a 5 year term loan facility of $5 million USD with an interest rate of 7%. The Company incurred additional capital expenditures of $410,872 in the fiscal year ending September 30, 2010, and $2,025 in fiscal year ending September 30, 2011. The Company does not currently hedge against foreign exchange or interest rate fluctuations.
The Company’s total Revenues for the year ended September 30, 2011 decreased by $560,606 to $3,380,691 (2010 - $3,941,297, 2009 - $3,516,417). The decrease was the result of the disposal of the Company’s wholly-owned subsidiary International Fitness Vacations Ltd. during the year. Fair value changes on the investment in life settlements was recorded under “Other Income (expenses)”, totaling $(369,132) (2010 - $(1,582,464), 2009 - $775,207).
