The Goldfarb Corporation announces 2008 year end and fourth quarter results



    TORONTO, April 7 /CNW/ - The Goldfarb Corporation (the "Corporation")
today announced its fourth quarter and fiscal 2008 results.
    Revenues from operations for the fourth quarter of 2008 were $114,000
compared to $196,000 in 2007, a decrease of $82,000. The net loss for the
Corporation in the fourth quarter of 2008 was $929,000 or $0.15 per share
compared to a net loss of $2,080,000 or $0.35 per share in the fourth quarter
of 2007. For the year ended December 31, 2008, the Corporation's revenues from
operations were $522,000 compared to $1,277,000 in 2007, a decrease of
$755,000. The net loss for 2008 was $4,948,000 or $0.83 per share compared to
a net loss of $5,050,000 ($0.85 per share) in 2007.
    The accompanying ten pages of unaudited interim and annual financial
statements have been prepared by and are the responsibility of the
Corporation's management. The Corporation's auditor has not performed a review
of the interim financial statements.

    
    Statement of Loss, Comprehensive Loss and Deficit
    -------------------------------------------------------------------------
                                     Three Months Ended        Year Ended
                                         December 31           December 31
                                       2008       2007       2008       2007
    -------------------------------------------------------------------------
    (thousands of dollars except
     per share information)
     (unaudited)                          $          $          $          $

    Interest Revenue                    114        196        522      1,277
    Administrative expenses            (176)       512      1,595      1,195
    -------------------------------------------------------------------------
                                        290       (316)    (1,073)        82
    Impairment charge on long-term
     investments (note 2)            (1,637)    (1,705)    (3,008)    (4,270)
    Litigation settlement (note 8)        -          -     (1,500)         -
    Depreciation                         (2)        (4)        (5)       (13)
    Foreign exchange gains (losses)     420        (55)       638       (849)
    -------------------------------------------------------------------------
    Net Loss and Comprehensive Loss    (929)    (2,080)    (4,948)    (5,050)
    Deficit, beginning of period    (32,295)   (26,196)   (28,276)   (23,226)
    -------------------------------------------------------------------------
    Deficit, end of period          (33,224)   (28,276)   (33,224)   (28,276)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Basic and Diluted Loss
     per Share                        (0.15)     (0.35)     (0.83)     (0.85)
    -------------------------------------------------------------------------
    Weighted average number of
     shares outstanding           5,936,660  5,936,660  5,936,660  5,936,660



    Cash Flow Statement
    -------------------------------------------------------------------------
                                     Three Months Ended        Year Ended
                                         December 31           December 31
                                       2008       2007       2008       2007
    -------------------------------------------------------------------------
    (thousands of dollars)
     (unaudited)                          $          $          $          $

    Operating Activities
    Net loss                           (929)    (2,080)    (4,948)    (5,050)
    Add (deduct) items not
     involving cash:
      Depreciation                        2          4          5         13
      Foreign exchange losses
       (gains)                         (420)        55       (638)       849
      Impairment charge on
       long-term investments
       (note 2)                       1,637      1,705      3,008      4,270
    -------------------------------------------------------------------------
                                        290       (316)    (2,573)        82
    Changes in non-cash working
     capital balances (note 5)         (312)       244        (24)       298
    -------------------------------------------------------------------------
    Cash provided by (used in)
     operating activities               (22)       (72)    (2,597)       380
    -------------------------------------------------------------------------

    Financing Activities                  -          -          -          -

    Investing Activities
    Repayment of note receivable          -        283          -      2,828
    Redemption of short-term
     investments                          -          -      9,491     21,871
    Acquisition of short-term
     investments                        (51)      (116)    (6,582)    (9,491)
    Acquisition of long-term
     investments                          -          -          -    (17,100)
    Additions to capital assets          (1)        (9)         -         (9)
    -------------------------------------------------------------------------
    Cash provided by (used in)
     investing activities               (52)       158      2,909     (1,901)
    -------------------------------------------------------------------------

    Foreign exchange gain (loss) on
     cash held in foreign currency      197        (84)       347       (627)
    -------------------------------------------------------------------------
    Increase (decrease) in cash
     and cash equivalents for
     the period                         123          2        659     (2,148)
    Cash and cash equivalents,
     beginning of period (note 5)     5,057      4,519      4,521      6,669
    -------------------------------------------------------------------------
    Cash and cash equivalents,
     end of period (note 5)           5,180      4,521      5,180      4,521
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Balance Sheet
    -------------------------------------------------------------------------
    As at December 31                                        2008       2007
    -------------------------------------------------------------------------
    (thousands of dollars) (unaudited)                          $          $

    ASSETS
    Current Assets
    Cash and cash equivalents (note 5)                      5,180      4,521
    Short-term investments                                  6,582      9,491
    Accounts receivable and prepaid expenses                   78         83
    Current portion of note receivable (note 3)               355          -
    Income taxes recoverable                                    -         34
    -------------------------------------------------------------------------
    Total Current Assets                                   12,195     14,129
    -------------------------------------------------------------------------
    Long-term Investments (note 2)                          9,822     12,830
    -------------------------------------------------------------------------
    Note Receivable (note 3)                                1,123      1,187
    -------------------------------------------------------------------------
    Capital Assets                                             17         22
    -------------------------------------------------------------------------
                                                           23,157     28,168
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current Liabilities
    Accounts payable and accrued liabilities                  192        255
    -------------------------------------------------------------------------
    Total Current Liabilities                                 192        255
    -------------------------------------------------------------------------
    Shareholders' Equity
    Capital stock (note 4)                                 55,736     55,736
    Contributed surplus                                       453        453
    Deficit                                               (33,224)   (28,276)
    -------------------------------------------------------------------------
    Total Shareholders' Equity                             22,965     27,913
    -------------------------------------------------------------------------

    Contingency (note 9)
    -------------------------------------------------------------------------
                                                           23,157     28,168
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Notes to Interim Financial Statements
    -------------------------------------------------------------------------
    For the period ended December 31, 2008 (thousands of dollars)
    (unaudited)

    1.  Significant Accounting Policies

    The disclosures contained in these unaudited interim financial statements
    do not include all requirements of generally accepted accounting
    principles for annual financial statements. The unaudited interim
    financial statements should be read in conjunction with the annual
    financial statements for the year ended December 31, 2007.

    The unaudited interim financial statements are based upon accounting
    principles consistent with those used and described in the annual
    financial statements, except that effective January 1, 2008, the
    Corporation adopted three new Handbook Sections issued by the CICA:
    Section 3862 ("Financial Instruments-Disclosures"), Section 3863
    ("Financial Instruments-Presentation") and Section 1535 ("Capital
    Disclosures"). These sections require the Corporation to provided
    additional disclosures relating to its financial instruments and about
    the Corporation's capital (notes 10 and 11).

    The Corporation adopted the new requirements of CICA Handbook Section
    1400 ("General Standards of Financial Statement Presentation") that
    became effective January 1, 2008. The adoption did not have an impact on
    the presentation of the financial statements for the year ended
    December 31, 2008. However, should management seek and intend to proceed
    to wind up the Corporation, the Corporation will change the basis of
    presentation of its financial statements from going concern to a
    liquidation basis of accounting.

    The unaudited interim financial statements reflect all adjustments,
    consisting only of normal recurring accruals, which are, in the opinion
    of management, necessary to present fairly the financial position of the
    Corporation as of December 31, 2008 and the results of operations and
    cash flows for the periods ended December 31, 2008 and 2007.

    In February 2008, the CICA announced that Canadian generally accepted
    accounting principles for public companies will be replaced by
    International Financial Reporting Standards ("IFRS") for fiscal years
    beginning on or after January 1, 2011. As a result, the conversion from
    Canadian generally accepted accounting principles to IFRS will occur in
    the first quarter of 2011. Comparative information for the previous
    fiscal year will be required to be in accordance with IFRS. The
    Corporation expects the transition to IFRS to impact accounting and
    financial reporting and is currently assessing the impact of the
    transition to ensure that conversion to IFRS occurs on a timely basis.

    2.  Asset-Backed Commercial Papers ("ABCP")

                                                               December 31
                                                             2008       2007
                                                          -------------------
                                                                $          $
    ABCP                                                    9,822     12,830
                                                          -------------------

    The Corporation is currently holding three separate matured asset-backed
    commercial papers totaling $17.1 million that have not been paid out and
    remain outstanding at December 31, 2008. Aurora Trust ($5.0 million),
    Structured Investment Trust III ($5.0 million) and Structured Asset Trust
    ($7.1 million) did not redeem on their maturity date of August 13, 2007.
    These trusts were administered by Coventree Capital Group Inc. Each of
    these trusts had lines of credit from liquidity providers to finance the
    repayment of their notes upon maturity if need be. On August 13, 2007,
    the market stopped purchasing commercial paper from these trusts amongst
    others. Since that time, the market for these asset-backed securities has
    been frozen. Dominion Bond Rating Service Limited ("DBRS") had rated
    commercial paper issued by these trusts as R-1 High at the time of
    purchase.

    The securities have been the subject of a restructuring plan developed by
    the Pan-Canadian Investors Committee (the "Committee") pursuant to which
    the holders of the ABCP, including the Corporation, will exchange their
    securities for new floating rate notes with maturities that match the
    maturities of the underlying assets. The assets of the various trusts are
    being pooled into two new legal entities.

    On March 17, 2008, the Committee obtained an Order commencing a
    proceeding in respect of the trusts under the Companies' Creditors
    Arrangement Act (Canada) (the "CCAA") and filed a plan to implement the
    proposed restructuring (the "Plan"). The Plan was overwhelmingly approved
    by the creditors of the trusts at a meeting held on April 25, 2008.

    On May 12, 2008, the Committee sought the approval of the Plan by the
    Ontario Superior Court of Justice (the "Court"). A substantial number of
    holders of commercial paper, including the Corporation, opposed the
    approval by the Court of the Plan. The Committee, with the support of the
    financial institutions providing liquidity pursuant to the Plan, filed an
    Amended Plan excluding certain fraud claims from the releases contained
    in the original Plan. The fraud claims excluded from the releases were
    narrowly defined and limited to the seller of the ABCP making it
    difficult for any holder of ABCP to establish liability on the part of
    the financial institution which sold the ABCP to each such holder. A
    substantial number of holders of ABCP, including the Corporation, opposed
    the approval of the Amended Plan because the fraud claims excluded from
    the releases were too narrow. On June 5, 2008, the Court approved the
    Amended Plan. After further appeals and numerous delays, the Amended Plan
    was approved on January 12, 2009. The restructuring closed effective
    January 21, 2009 and the ABCP was exchanged for new senior and
    subordinated notes. Interest on the ABCP for the period from August 13,
    2007 (net of actual and future estimated restructuring fees and expenses)
    will be paid in two instalments. Interest of $571 for the period to
    August 31, 2008 was received on January 21, 2009. A second instalment of
    interest for the period from September 1, 2008 through January 21, 2009
    is expected to be received in the second quarter of 2009.

    The Corporation received senior notes and subordinated notes from Master
    Asset Vehicle 2 ("MAV2") as follows:

                                              Interest Rate       Par Amount
                                              -------------       ----------
    Class A-1                                   BA - 50 bps           $5,983
    Class A-2                                   BA - 50 bps            8,497
    Class B                                     BA - 50 bps            1,542
    Class C                                             20%              496
    Tracking Notes                                 Floating              541
    -------------------------------------------------------------------------
                                                                     $17,059


    The Class A-1 and Class A-2 Notes ("Senior Notes") received an A rating
    from DBRS while the Class B, Class C and Tracking Notes ("Subordinated
    Notes") were not rated.

    In estimating fair value, the Corporation's valuation approach considers
    that the Amended Plan was implemented effective January 21, 2009. Until
    an active market develops for the new notes, the Corporation will
    continue to estimate the fair value of its investment in ABCP using a
    valuation technique which incorporates a probability weighted discounted
    cash flow approach considering the best available market data for such
    investments. At December 31, 2008, the Corporation estimated the fair
    value of its ABCP to be $9.1 million after recording impairment charges
    of $3.0 million during the year ended December 31, 2008. The impairment
    is predominantly a result of the worsening credit markets and the
    reduction in credit ratings. An impairment charge of $4.3 million was
    previously recorded as a reduction in fair value at December 31, 2007.

    The significant assumptions used to value the Corporation's investment in
    these securities are as follows:

    Margin facility cost                                      1.0%
    Timing of principal repayments                            at maturity
    Risk free interest rate on Senior Notes                   2.3%
    Discount rate on Subordinated Notes                       30%
    Interest rate on Senior Notes                             2.0%
    Interest rate on Subordinated Notes                       2.0% to 20.0%
    Term of notes                                             8 years
    Recovery of Senior Note principal and interest            50% to 100%
    Recovery of Subordinated Note principal and interest      0% to 60%

    The interest received on closing of the restructuring along with the
    estimated interest owing at December 31, 2008 has been included in the
    calculation of the fair value of the ABCP at December 31, 2008. The fair
    value of the Corporation's ABCP could range from $8.7 million to
    $10.7 million using the same valuation methodology with alternative
    reasonably possible assumptions. In subsequent periods, the recorded fair
    values may change materially from the estimated fair values. No changes
    to the fair value resulted from the completion of the restructuring in
    January 2009. A 1% change in the discount rate would increase or decrease
    the estimated fair value of the ABCP by approximately $555.

    Currently, the Corporation has sufficient cash available to maintain its
    operations while the restructuring of asset-backed commercial paper is
    completed. The balance of the Corporation's investments totaling
    $11.1 million are invested in highly rated liquid instruments.

    3.  Note Receivable

    The following note represents the Corporation's pro-rata share (48.4%) of
    the promissory note issued by SMK Speedy International Inc. ("Speedy"):

                                                               December 31
                                                             2008       2007
                                                          -------------------
                                                                $          $
    T-Note (US $1,209; 2007-US $1,209)                      1,478      1,187
    Less: Amount due within one year                         (355)         -
                                                          -------------------
                                                            1,123      1,187
                                                          -------------------
                                                          -------------------

    The T-note has terms and conditions that match the note that Speedy
    received from the purchaser, Tuffy Associates Corp. (the "Purchaser"),
    upon the sale of its Car-X business in 2002 and was comprised of:

        a.  A note in the amount of US $1,453 bearing interest at US prime
            plus 3%, payable quarterly, with the principal due July 8, 2007.
        b.  A further note in the amount of US $2,906 bearing interest at US
            prime plus 2% payable quarterly, with US $484 of principal
            payments due on July 8 in each of the years 2007 through 2009
            with the balance of US $969 due on July 2, 2010.

    In February 2007, the Purchaser renegotiated certain terms and conditions
    of the note which resulted in an immediate prepayment of all principal
    amounts due in 2007 and 2008 plus related accrued interest (US $2,219).
    The maturity date of the remaining principal is July 8, 2009. The
    Purchaser has guaranteed the remaining principal balance. The noteholders
    agreed to subordinate the remaining outstanding principal to new
    increased senior bank financing of the Purchaser.

    In December 2007, an additional principal repayment of US $244 was
    received. In January 2009, a further principal repayment of US $291 was
    received.

    Subsequent to year-end, the Purchaser advised the Corporation that it has
    encountered difficulty obtaining the refinancing required to fund the
    repayment of the T-Note principal scheduled to occur in July 2009. As a
    result, the Purchaser has requested a deferral of US $1,400,000 to
    December 31, 2009, of which the Corporation's share is approximately
    US $678,000. The proposed deferral requires the approval of a majority of
    the T-Note noteholders. The Board of Directors of the Corporation has
    made a preliminary assessment of the situation at this juncture and is
    prepared to consider the deferral further once the Purchaser's banking
    arrangements are solidified in order to ensure that the ultimate course
    of action taken is the most appropriate in the circumstances. The
    Purchaser's ability to repay the T-Note will be dependent on its ability
    to obtain refinancing. As a result, the principal balances not paid
    subsequent to year-end have been classified as long-term.

    The Corporation is entitled to receive interest and principal payments
    only to the extent that such amounts are received from the Purchaser and
    has no further recourse against Speedy.

    4.  Capital Stock

    At December 31, 2008, the Corporation's authorized capital stock was as
    follows:

    -   Unlimited number of Preference Shares, issued in series;
    -   Unlimited number of Class A Subordinate Voting Shares;
    -   182,000 Class B Shares carrying 15 votes per share, convertible into
        Class A Subordinate Voting Shares on a one-for-one basis. In certain
        prescribed circumstances, additional Class B Shares as may be
        required to effect the conversion of Class A Subordinate Voting
        Shares into Class B Shares.

    The issued share capital is summarized as follows:

                                                               December 31
                                                             2008       2007
                                                          -------------------
                                                                $          $
    5,754,660 Class A Subordinate Voting Shares            55,523     55,523
    182,000 Class B Shares                                    213        213
                                                          -------------------
                                                           55,736     55,736
                                                          -------------------
                                                          -------------------

    Subsequent to year-end, in February 2009, the shareholders passed a
    special resolution that impacted the stated capital of the Corporation
    (note 12).

    The Corporation had 140,000 stock options outstanding all of which
    expired on April 1, 2007.

    Diluted loss per share for the period ended December 31, 2007 has not
    been adjusted since the effect of any exercise of outstanding stock
    options is anti-dilutive.

    5.  Supplementary Cash Flow Information

    a)  Changes in non-cash working capital balances

                                     Three Months Ended        Year Ended
                                         December 31           December 31
                                       2008       2007       2008       2007
                                   ------------------------------------------
                                          $          $          $          $
    Decrease in accounts and
     other amounts receivable            44         52          5        231
    Decrease in income taxes
     recoverable                         34          -         34          -
    Increase (decrease) in
     accounts payable and
     accrued liabilities               (390)       192        (63)        67
                                   ------------------------------------------
                                       (312)       244        (24)       298
                                   ------------------------------------------
                                   ------------------------------------------

    b)  Cash and cash equivalents

    Cash and cash equivalents consist of cash on hand and with banks, and
    short-term investments in highly liquid instruments with original
    maturities of 90 days or less. Cash and cash equivalents included in cash
    flow statements comprise the following balance sheet amounts:

                                                               December 31
                                                             2008       2007
                                                          -------------------
                                                                $          $
    Cash on hand and with banks                               695        295
    Short-term investments                                  4,485      4,226
                                                          -------------------
                                                            5,180      4,521
                                                          -------------------
                                                          -------------------

    c)  Short-term investments

    Short-term investments consist of investments in corporate commercial
    paper that were invested for more than 90 days at 3.10%. All the
    commercial paper matured on January 7, 2009.

    d)  Income taxes recovered

    In 2008, the Corporation recovered income taxes of $34 (2007 - $ nil).

    6.  Income Taxes

    At December 31, 2008, the Corporation had non-capital losses available to
    reduce future taxable income of approximately $14.5 million. If unused,
    these losses expire as follows:

        Year Of Expiry         Amount
        ------------------------------
                                    $
             2009                  80
             2010               1,094
             2026              10,702
             2028               2,576
                        --------------
                               14,452
                        --------------
                        --------------

    No tax benefits have been recognized on the losses incurred during the
    years ended December 31, 2008 and 2007 because it is more likely than not
    that the losses will not be realized. At December 31, 2008, the
    Corporation had capital losses available to offset future capital gains
    of approximately $27.0 million. These capital losses do not expire.

    7.  Segmented Information

    The Corporation's sole business segment is an investment holding company.
    The Corporation's operations reside entirely in Canada.

    8.  Litigation Settlements

    (a) In the fourth quarter of 2006, the Corporation settled the
        $110 million claim that had been filed against the Corporation and
        certain of its officers by the purchaser of Goldfarb Consultants, the
        market research and consulting business sold by the Corporation in
        1998. The settlement was in the amount of $12 million. The Board of
        Directors of the Corporation appointed a committee of independent
        directors to represent the Corporation's interest in this litigation.
        Amongst other things, the committee approved the payment of the
        settlement and applicable expenses of all defendants, being the
        Corporation's Chairman, Secretary, its former Executive-Vice
        President and its former Chief Financial Officer. The Corporation, on
        behalf of the defendants, is seeking reimbursement of a portion of
        the settlement from the insurer of the Corporation's directors and
        officers. The amount of recovery from the insurance company is not
        currently determinable. Any recovery will be recognized as income
        upon resolution.

    (b) An action was filed against the Corporation and certain of its
        officers by the trustee of Fleming Packaging Corp. ("Fleming") in
        2004. Much of the claim was not quantified, however, the plaintiff
        had asserted ranges between US$ 3.0 million and US$ 26.0 million. In
        May 2008, the Corporation reached a settlement with the plaintiff for
        US$ 1.5 million. The settlement was approved by the Illinois
        Bankruptcy Court on June 3, 2008. The Corporation is seeking
        contribution toward the settlement amount from the insurer of the
        Corporation's directors and officers. The amount to be contributed by
        the insurance company has not been determined at this time. Any
        recovery will be recognized as income upon resolution.

    9.  Contingency

    In 2003, the Corporation received a notice of withdrawal liability
    assessment and demand for payment of US$ 900 from the GCIU-Employer
    Retirement Fund in connection with the unionized employees' pension plan
    of Fleming. A claim was filed in connection with this notice in 2007. The
    claim was dismissed by the Illinois District Court on August 6, 2008 but
    has been appealed by the plaintiff. The Corporation is of the view that
    it has meritorious defences. The Corporation will vigorously defend
    itself if and when required.

    No amount has been accrued in the financial statements in connection with
    this claim.

    10. Financial Instruments

    The carrying values reported in the balance sheet for cash and cash
    equivalents, short-term investments, accounts receivable, interest
    receivable and accounts payable and accrued liabilities approximate fair
    values due to the short maturity of those instruments. The carrying value
    of the note receivable approximates fair value because the interest rates
    on this instrument changes with market interest rates. Long-term
    investments are carried at estimated fair value.

    The nature of these financial instruments and the Corporation's structure
    as an investment holding company expose the Corporation to credit risk,
    market risk and liquidity risk. The Corporation manages its exposure to
    these risks by employing risk management strategies and polices to ensure
    that any exposure to risk is in compliance with the Corporation's capital
    management objectives and risk tolerance levels. These risks are
    monitored in relation to market conditions. The Board of Directors has
    overall responsibility for the establishment and oversight of the
    Corporation's risk management framework.

    a)  Credit risk

    Financial instruments that potentially subject the Corporation to
    concentrations of credit risk consist of cash and cash equivalents,
    short-term and long-term investments, accounts receivable and the note
    receivable. The Corporation's cash and cash equivalents and short-term
    investments consist of bank deposits and investments in highly rated
    liquid investments with Canadian financial institutions. The T-Note
    receivable represents the Corporation's pro-rata share of the promissory
    note issued by Speedy arising from the sale of its Car-X business in 2002
    as described in Note 3. The long-term investment is in asset-backed
    commercial paper ("ABCP").

    Financial instruments are exposed to credit risk as a result of the risk
    of the counter-party defaulting on its obligations. The Corporation
    monitors and limits its exposure to credit risk on a continuous basis.
    The Corporation provides reserves for credit risks based on the financial
    condition and short and long-term exposures to counter-parties.

    As at December 31, 2008, the maximum exposure to credit risk was $23,140
    (2007 - $28,146) being the carrying value of its cash and cash
    equivalents, short-term and long-term investments, accounts receivable
    and the note receivable. None of the financial assets that are fully
    performing have been renegotiated during the year with the exception of
    ABCP and subsequent to the year-end with respect to the note receivable.
    The Corporation does not believe that there is significant credit risk
    arising from any of its receivables and investments except in connection
    with its investment in ABCP as disclosed in Note 2. The timing of the
    collection of the note receivable by December 31, 2009 will be dependent
    on the ability of Tuffy to obtain refinancing by that date (note 3).

    b)  Interest rate risk

    The Corporation is exposed to interest rate risk arising from
    fluctuations in interest rates on its cash and cash equivalents, short-
    term investments, note receivable and long-term investments. Cash and
    cash equivalents which are in excess of day-to-day requirements are
    placed on short-term deposit with Canadian financial institutions and
    earn interest at rates available at the time the deposits are made. The
    T-Note receivable has a floating interest rate which is based on the Wall
    Street Journal prime rate of interest. At December 31, 2008, the interest
    rate on the T-Note was 5.25% (2007 - 9.25%). A 1% change in market
    interest rates would have increased or decreased interest revenue by
    approximately $142 for the year ended December 31, 2008. The Corporation
    also has interest rate risk relating to its investments in ABCP as
    disclosed in Note 2.

    c)  Currency risk

    The Corporation has financial assets which are denominated in U.S.
    dollars and are subject to fluctuations in exchange rates of the Canadian
    dollar with the U.S. dollar. The Corporation does not utilize any
    financial instruments or cash management policies to mitigate the risks
    arising from changes in exchange rates. At December 31, 2008, the
    Corporation had cash and cash equivalents, short-term investments and
    T-Note receivable of $3,397 and accounts payable of $65 which were
    denominated in U.S. dollars. A 10% change in the foreign exchange rate
    from Canadian dollars to United States dollars at December 31, 2008 would
    have increased or decreased the foreign exchange gain by approximately
    $1,159 for the year ended December 31, 2008.

    d)  Liquidity risk

    The Corporation's approach to managing liquidity is to ensure that it
    will have sufficient liquidity to meet its liabilities when they are due.
    The Corporation manages liquidity risk through timing the maturities of
    its investments to match its financial obligations and ensuring that it
    invests in secure instruments. The Corporation's contractual obligations
    are specifically related to its accounts payable and accrued liabilities.
    At December 31, 2008, the Corporation's accounts payable and accrued
    liabilities were $192, all of which become due for payment within the
    normal terms of trade, generally between 30 and 60 days (2007 - $255).

    11. Capital Management

    The Corporation defines its capital as cash and cash equivalents, short-
    term investments and long-term investments. Since the sale of Speedy, the
    Board of Directors have been evaluating the various alternatives for the
    use of the cash proceeds from the transaction, including determining the
    cash available for distribution. The Board will consider alternative
    methods of effecting a tax efficient distribution of the proceeds prior
    to making such a distribution. The Corporation's objectives in managing
    its capital are to provide an appropriate return on investment to its
    shareholders while maintaining capital preservation.

    There were no changes in the Corporation's approach to capital management
    in the period ended December 31, 2008.

    12. Subsequent Event

    On February 6, 2009, the shareholders of the Corporation passed a special
    resolution approving the reduction of the Corporation's stated capital by
    an aggregate of $6.5 million, resulting in a distribution of $1.10 per
    Class A Subordinate Voting Share and Class B Share. The distribution was
    made on February 18, 2009.

    -------------------------------------------------------------------------
    The Goldfarb Corporation trades on the NEX Board of the TSX Venture
    Exchange under the symbol GDF.H.
    

    %SEDAR: 00002535E




For further information:

For further information: Karen Killeen, Chief Financial Officer, at
(416) 928-3710, Toronto, info@goldfarbcorp.com

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GOLDFARB CORPORATION

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