GNCC Capital Inc (GNCP)

[WrenchHead]

This article is enlightening on buybacks.

http://www.journalofaccountancy.com/Issues/1999/May/mccarthy.htm


Even if a board of directors authorizes the immediate launch of a buyback program, the rules covering the timing of purchases around major developments within the company may cause the CFO to delay implementing it. "We advise the company not to conduct a program at all if there is any material inside information that the company is aware of that has not been publicly disclosed," says Jayne M. Donegan, a corporate and securities-law attorney with Brown, Rudnick, Freed & Gesmer in Providence, Rhode Island. "For example, if the company is in merger negotiations or it knows the earnings but those earnings haven't been released, the company should not be out purchasing its stock."

To address potential insider trading, many companies inform their brokers that they may be required to suspend on short notice purchases authorized as part of an ongoing repurchase program. In fact, many companies apply the same "blackout period"—forbidding all trades—to corporate repurchases as they do for insider stock purchases by individuals. For example, a company may decide not to trade during a period that extends from 10 days before through two days after any earnings release.

It seems as if a company can do a buyback with news/filings etc. being released as long as they suspend the buyback during that time.

From GNCP filings:
http://www.otcmarkets.com/financialReportViewer?symbol=GNCP&id=115366

2. The amount authorized to be repurchased:
The share repurchase shall consist of no more than 20% of the issued and outstanding shares of common stock in the Corporation as may be in issuance from time to time. No other classes of securities are affected by the share repurchase. The total amount to be utilized will not exceed the amount of $750,000.

This calculates out to 1.24 billion shares but can change depending on the total issued and outstanding shares.

3. The estimated time period for when the purchases are anticipated to occur:

The Corporation may repurchase common stock of the Corporation pursuant to the authority granted in the unanimous Directors’ Resolution for a period of one year from the date hereof.

So they have a year to complete the buyback.

4. The manner in which the shares will be repurchased and the Corporation’s plans with respect to the deposition of the shares once repurchased:

The purchase price upon repurchase not exceed any outstanding option or redemption
values.

All share repurchases shall be conducted in an open market. No off-market transactions shall be used to effectuate the repurchase of shares of the common stock of the Corporation.

The Board of Directors of the Corporation may in its sole discretion elect to retire any and/or all repurchased shares from time to time. Any shares not retired may be retained as treasury shares or used for any other valid corporate purpose.

Sounds like they worded it so they have the option to buy the shares then sell them back into the market if they choose to do so. IMO this would pay down debt so long as they do this when the PPS is higher and they do not dillute while doing so.

SALIENT POINTS FROM DIRECTORS’ UNANIMOUS RESOLUTION:

Having given due consideration, the directors unanimously consent and agree that the repurchase is desirable and is in the best interest of the Corporation and its shareholders. Accordingly, we do hereby unanimously consent to the proposed share repurchase in accordance with the articles and bylaws of the Corporation, Delaware state law and relevant federal rules and regulations, including relevant securities laws. The board of directors unanimously decided that:

So everything I have posted about being within the guidelines of SEC and buyback should be followed...at least according to this paragraph.