The Goldfarb Corporation announces 2009 year end and fourth quarter results

TORONTO, April 5 /CNW/ - The Goldfarb Corporation (the "Corporation") today announced its fourth quarter and fiscal 2009 results.

Revenues from operations for the fourth quarter of 2009 were $10,000 compared to $114,000 in 2008, a decrease of $104,000. The net loss for the Corporation in the fourth quarter of 2009 was $294,000 or $0.05 per share compared to a net loss of $929,000 or $0.15 per share in the fourth quarter of 2008. For the year ended December 31, 2009, the Corporation's revenues from operations were $95,000 compared to $522,000 in 2008, a decrease of $427,000. Net income for 2009 was $83,000 or $0.01 per share compared to a net loss of $4,948,000 ($0.83 per share) in 2008.

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 Income (Loss), Comprehensive Income (Loss) and Deficit
    -------------------------------------------------------------------------
                                   Three Months Ended        Year Ended
                                       December 31           December 31
                                     2009       2008       2009       2008
    -------------------------------------------------------------------------
    (thousands of dollars except
     per share information) (unaudited) $          $          $          $

    Interest Revenue                     10        114         95        522
    Administrative expenses             266       (176)     1,039      1,595
    -------------------------------------------------------------------------
                                       (256)       290       (944)    (1,073)
    Litigation recovery (settlement)
     (note 8)                             -          -      1,315     (1,500)
    Impairment charge on long-term
     investments (note 2)                 -     (1,637)         -     (3,008)
    Depreciation                         (2)        (2)        (5)        (5)
    Foreign exchange gains (losses)     (36)       420       (283)       638
    -------------------------------------------------------------------------
    Income (loss) before income taxes  (294)      (929)        83     (4,948)
    Income tax expense (note 6)           -          -          -          -
    -------------------------------------------------------------------------

    Net Income (Loss) and
     Comprehensive Income (Loss)       (294)      (929)        83     (4,948)

    Deficit, beginning of period    (32,847)   (32,295)   (33,224)   (28,276)
    -------------------------------------------------------------------------
    Deficit, end of period          (33,141)   (33,224)   (33,141)   (33,224)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Basic and Diluted Income
     (Loss) per Share                 (0.05)     (0.15)      0.01      (0.83)
    -------------------------------------------------------------------------
    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
                                     2009       2008       2009       2008
    -------------------------------------------------------------------------
    (thousands of dollars) (unaudited)  $          $          $          $
    Operating Activities
    Net income (loss)                  (294)      (929)        83     (4,948)
    Add (deduct) items not
     involving cash:
      Depreciation                        2          2          5          5
      Unrealized foreign
       exchange losses (gains)          (72)      (420)       175       (638)
      Impairment charge on
       long-term investments (note 2)     -      1,637          -      3,008
    -------------------------------------------------------------------------
                                       (364)       290        263     (2,573)
    Changes in non-cash working
     capital balances (note 5(a))        39       (312)       (64)       (24)
    -------------------------------------------------------------------------
    Cash provided by (used in)
     operating activities              (325)       (22)       199     (2,597)
    -------------------------------------------------------------------------

    Financing Activities
    Distribution to shareholders
     (note 4)                             -          -     (6,530)         -
    -------------------------------------------------------------------------
    Cash used in financing activities     -          -     (6,530)         -

    Investing Activities
    Redemption of short-term
     investments                          -          -      6,582      9,491
    Acquisition of short-term
     investments                        135        (51)    (6,650)    (6,582)
    Repayment of note receivable          -          -      1,478          -
    Principal and interest received
     on long-term investments (note 2)   81          -        941          -
    Additions to capital assets           -         (1)         -          -
    -------------------------------------------------------------------------
    Cash provided by (used in)
     investing activities               216        (52)     2,351      2,909
    -------------------------------------------------------------------------

    Foreign exchange gain (loss) on
     cash held in foreign currency       72        197       (175)       347
    -------------------------------------------------------------------------
    Increase (decrease) in cash and
     cash equivalents for the period    (37)       123     (4,155)       659
    Cash and cash equivalents,
     beginning of period (note 5(b))  1,062      5,057      5,180      4,521
    -------------------------------------------------------------------------
    Cash and cash equivalents, end
     of period (note 5(b))            1,025      5,180      1,025      5,180
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Balance Sheet
    -------------------------------------------------------------------------
    As at December 31                                      2009       2008
    -------------------------------------------------------------------------
    (thousands of dollars) (unaudited)                       $          $

    ASSETS
    Current Assets
    Cash and cash equivalents (note 5(b))                   1,025      5,180
    Short-term investments                                  6,650      6,582
    Accounts receivable and prepaid expenses                   55         78
    Current portion of note receivable (note 3)                 -        355
    -------------------------------------------------------------------------
    Total Current Assets                                    7,730     12,195
    -------------------------------------------------------------------------
    Long-term Investments (note 2)                          8,881      9,822
    -------------------------------------------------------------------------
    Note Receivable (note 3)                                    -      1,123
    -------------------------------------------------------------------------
    Capital Assets                                             12         17
    -------------------------------------------------------------------------
                                                           16,623     23,157
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current Liabilities
    Accounts payable and accrued liabilities                  105        192
    -------------------------------------------------------------------------
    Total Current Liabilities                                 105        192
    -------------------------------------------------------------------------
    Shareholders' Equity
    Capital stock (note 4)                                 49,206     55,736
    Contributed surplus                                       453        453
    Deficit                                               (33,141)   (33,224)
    -------------------------------------------------------------------------
    Total Shareholders' Equity                             16,518     22,965
    -------------------------------------------------------------------------

    Contingency (note 9)
    -------------------------------------------------------------------------
                                                           16,623     23,157
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Notes to Interim Financial Statements
    -------------------------------------------------------------------------
    For the period ended December 31, 2009 (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, 2008.

    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.

    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, 2009 and the results of operations and
    cash flows for the periods ended December 31, 2009 and 2008.

    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. With the
    Corporation proceeding to liquidation in the next twelve months, it is
    not expected that IFRS will have an impact on the Corporation's
    accounting and financial reporting.

    2.  Long-Term Investments (formerly Asset-Backed Commercial Papers
        ("ABCP"))

                                                             December 31
                                                           2009       2008
                                                       ----------------------
                                                             $          $

    Long-Term Investments                                   8,881      9,822
                                                       ----------------------

    In 2007, the Corporation invested $17.1 million in three separate
    non-bank sponsored asset-backed commercial papers that did not redeem on
    maturity. Dominion Bond Rating Service Limited ("DBRS") had rated these
    commercial papers as R-1 High at the time of purchase.

    These investments did not settle on maturity as a consequence of
    liquidity issues in the non-bank sponsored ABCP market. Since that time,
    the market for these asset-backed securities has been frozen. As a
    result, the Corporation has classified its investment as held-for-trading
    long-term investments. These investments are recorded at fair value with
    unrealized gains and losses included in earnings.

    The securities were subject to restructuring by the Pan-Canadian
    Investors Committee (the "Committee") pursuant to which the holders of
    the ABCP, including the Corporation, would exchange their securities for
    new floating rate notes with maturities that match the maturities of the
    underlying assets. In January 2009, the Ontario Superior Court of Justice
    granted an order for the implementation of the Committee's final amended
    restructuring plan for the ABCP. The restructuring was completed on
    January 21, 2009 and on closing the Corporation exchanged its holdings of
    ABCP for $17.1 million of long-term floating rate notes from Master Asset
    Vehicle 2 ("MAV 2").

    On closing, interest (net of actual and future estimated restructuring
    fees and expenses) of $572 was received on the ABCP for the period from
    August 13, 2007 to August 31, 2008. Interest for the period from
    September 1, 2008 through January 21, 2009 in the amount of $326 was
    received in 2009. These amounts have been included in the calculation of
    the fair value of the long-term investments.

    The MAV II Notes can be summarized as follows at December 31, 2009:

    Note Categories                      Interest Rate
    ---------------                      -------------
                                                                           $
    Class A-1                            BA - 50 bps                   5,968
    Class A-2                            BA - 50 bps                   8,497
    Class B                              BA - 50 bps                   1,542
    Class C                              20%                             496
    Class 15 Tracking Notes              Floating                        541
                                                                     --------
                                                                      17,044
    Interest received                                                   (925)
    Valuation provision                                               (7,238)
                                                                     --------
    Balance at December 31, 2009                                       8,881
                                                                     --------
                                                                     --------

    Interest on the Class A-1 and A-2 Notes is payable quarterly after
    payment of the margin funding facility ("MFF"). The Class B and C Notes
    will pay interest only after the Class A-1 and A-2 Notes are fully
    repaid. The Class 15 Notes pay interest quarterly to the extent that
    proceeds are realized and cash is available for that note. The Class A-1
    and A-2 Notes were assigned an "A" rating by DBRS. In August 2009, DBRS
    downgraded the rating of the Class A-2 Notes to BBB (low) from A and
    maintained the rating Under Review with Negative Implication. On
    February 9, 2010, DBRS removed the ratings from Under Review with
    Negative Implication. The remaining notes are not rated.

    Interest rates on the MAV II Notes are primarily based on prevailing
    Banker's Acceptance rates. First quarter interest on the Class A-1 and
    A-2 Notes was not paid when it became due because the prevailing banker's
    acceptance rates were so low and there were insufficient funds to pay the
    fixed expense of the MFF required to be paid prior to interest being
    paid. By July 2009, rates had improved sufficiently to pay the accrued
    MFF shortfall and both the first and second quarter interest due.
    However, third and fourth quarter interest was not paid because rates
    were again too low. Interest on the Class 15 Notes was paid for all
    quarters of 2009. A one-time principal repayment attributable to excluded
    securities was made on the

    Class A-1 Notes and was received in two distributions that occurred
    during the year and subsequent to year-end.

    There is currently a very illiquid market for the MAV 2 Notes. Trading
    has been limited and at distressed prices. It is uncertain when or if a
    liquid market will develop. As a result, the Corporation will continue to
    estimate the fair value of its long-term investments 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, 2009, the Corporation estimated the fair value of its
    long-term investments to be $8.9 million (December 31, 2008 - $9.8
    million).

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


        Timing of principal repayments                           at maturity
        Risk free interest rate on Class A-1, A-2 and
         Class 15 Notes                                       3.28% to 4.28%
        Discount rate on Class B and C Notes                             30%
        Interest rate on Class A-1 and A-2 Notes                        2.0%
        Interest rate on Class B, C and Class 15 Notes         2.0% to 20.0%
        Term of notes                                              6-8 years
        Recovery of Class A-1 and A-2 Note principal and
         interest                                                40% to 100%
        Recovery of Class B and C Note principal and interest      0% to 40%
        Recovery of Class 15 Note principal and interest         80% to 100%


    The fair value of these investments could range from $8.1 million to
    $9.9 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 these long-term investments by approximately
    $0.6 million.

    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
                                                                2009    2008
                                                              ---------------
                                                                   $       $
    T-Note (2008-US $1,209)                                        -   1,478
    Less: Amount due within one year                               -    (355)
                                                              ---------------
                                                                   -   1,123
                                                              ---------------
                                                              ---------------

    The T-note had terms and conditions that matched 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 or at an
       earlier date under certain circumstances.
    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 advanced to July 8, 2009.
    The Purchaser 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. The remaining
    outstanding balance was received on July 8, 2009.

    4.  Capital Stock

    At December 31, 2009, 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
                                                                2009    2008
                                                              ---------------
                                                                   $       $
    5,754,660 Class A Subordinate Voting Shares               49,193  55,523
    182,000 Class B Shares                                        13     213
                                                              ---------------
                                                              49,206  55,736
                                                              ---------------
                                                              ---------------

    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.

    5.  Supplementary Cash Flow Information

    a) Changes in non-cash working capital balances

                                            Three Months Ended    Year Ended
                                                   December 31   December 31
                                                   2009   2008   2009   2008
                                            ---------------------------------
                                                      $      $      $      $
    Decrease in accounts and other amounts
     receivable                                      48     44     23      5
    Decrease in income taxes recoverable              -     34      -     34
    Decrease in accounts payable and accrued
     liabilities                                     (9)  (390)   (87)   (63)
                                            ---------------------------------
                                                     39   (312)   (64)   (24)
                                            ---------------------------------
                                            ---------------------------------

    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
                                                               2009     2008
                                                              ---------------
                                                                  $        $
    Cash on hand and with banks                                  81      695
    Cash equivalents                                            944    4,485
                                                              ---------------
                                                              1,025    5,180
                                                              ---------------
                                                              ---------------

    c) Short-term investments

    Short-term investments at December 31, 2009 consisted of redeemable GIC's
    with original maturities of 365 days or less bearing interest at rates
    ranging from 0.3% to 0.7%. Short-term investments at December 31, 2008
    consisted of investments in corporate commercial papers that were
    invested for more than 90 days at 3.10%.

    d) Income taxes recovered

    In 2008, the Corporation recovered income taxes of $34.

    6.  Income Taxes

    The Corporation's provision for income taxes differs from the Canadian
    statutory income tax rate of 33.5% due to the unrecognized benefit of
    non-capital loss carry-forwards from losses incurred in prior years.

    At December 31, 2009, the Corporation had non-capital losses available to
    reduce future taxable income of approximately $13.3 million. No tax
    benefits have been recognized on the losses incurred because it is more
    likely than not that the losses will not be realized.If unused, these
    losses expire as follows:

        Year Of Expiry     Amount
       ---------------------------
                                $
           2026            10,696
           2028             2,593
                         ---------
                           13,289
                         ---------
                         ---------

    At December 31, 2009, 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 2006, the Corporation reached a settlement in the amount of
             $12 million in the claim that had been filed against the
             Corporation and certain of its officers by the purchaser of
             Goldfarb Consultants, the market research and consulting
             business sold by the Corporation in 1998. The Corporation sought
             contribution toward the settlement amount from the insurer of
             the Corporation's directors and officers. In April 2009, a panel
             of arbitrators ruled in favour of the Corporation and determined
             that the insurer should contribute US$ 960 plus related interest
             costs. The Corporation received Cdn $1.32 million. The recovery
             has been recorded as income in 2009.

       (b)   In May 2008, the Corporation reached a settlement in the amount
             of US$ 1.45 million in the claim that had been filed against the
             Corporation and certain of its directors and officers by the
             trustee of Fleming Packaging Corp. ("Fleming"). The settlement
             was approved by the Illinois Bankruptcy Court in June 2008. The
             Corporation sought contribution toward the settlement amount
             from the insurer of the Corporation's directors and officers.
             Arbitration proceedings took place in December 2009. Subsequent
             to year-end, the arbitrator ruled in favour of the Corporation
             and determined that the insurer should contribute US$ 725 plus
             approximately US$35 in interest and Cdn $66 in respect of costs.
             Payment was received in March 2010. The recovery will be
             recognized as income in 2010.

    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 Packaging Corp. ("Fleming"). A claim was filed in connection
    with this notice in 2007. The claim was dismissed by the Illinois
    District Court in 2008 but was appealed by the plaintiff. In May 2009,
    the judgment of the district court was affirmed. On August 10, 2009, the
    appeal period for the plaintiff expired and the claim is now fully
    concluded.

    10. Financial Instruments

    The carrying values reported in the balance sheet for cash and cash
    equivalents, short-term investments, accounts 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 Corporation uses the following hierarchy in attempting to maximize
    the use of observable inputs and minimize the use of unobservable inputs,
    primarily using market prices in active markets.

    Level 1 - Quoted prices in active markets for identical assets or
    liabilities. An active market for an asset or liability is a market in
    which transactions for the asset or liability occur with sufficient
    frequency and volume to provide pricing on an ongoing basis.

    Level 2 - Observable inputs other than Level 1 prices, such as quoted
    prices for similar assets or liabilities, quoted prices in markets that
    are not active, or other inputs that are observable that can be
    corroborated by observable market data for substantially the full term of
    the asset or liability.

    Level 3 - Unobservable inputs that are supported by little or no market
    activity and that are significant to the fair value of the assets or
    liabilities.

    The following details the fair value hierarchy classification for
    financial instruments carried at fair value on the balance sheets:

                                        Fair value at December 31, 2009 using
                                                 Level 1   Level 2   Level 3
                                       --------------------------------------
                                                       $         $         $
    Cash and cash equivalents                      1,025         -         -
    Short-term investments                         6,650         -         -
    Long-term investments                              -         -     8,881
                                       --------------------------------------
                                                   7,675         -     8,881
                                       --------------------------------------
                                       --------------------------------------

    The nature of these financial instruments and the Corporation's structure
    as an investment holding company expose the Corporation to credit risk,
    interest rate risk, currency 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 represented 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. Long-term investments are in floating rate notes
    receivable (formerly 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, 2009, the maximum exposure to credit risk was $16,661
    (2008 - $23,140) 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
    the long-term investments. The Corporation does not believe that there is
    significant credit risk arising from any of its receivables and
    investments except in connection with its long-term investments as
    disclosed in Note 2.

    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. Prior
    to repayment, the T-Note receivable had a floating interest rate which is
    based on the Wall Street Journal prime rate of interest. A 1% change in
    market interest rates would have increased or decreased interest revenue
    by approximately $84 for the year ended December 31, 2009. The
    Corporation also has interest rate risk relating to its long-term
    investments 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, 2009, the
    Corporation had cash and cash equivalents and short-term investments of
    $991 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, 2009 would have increased or decreased the foreign exchange loss by
    approximately $99 as at December 31, 2009.

    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, 2009, the Corporation's accounts payable and accrued
    liabilities were $105, all of which become due for payment within the
    normal terms of trade, generally between 30 and 60 days (2008 - $192).

    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, 2009.

    -------------------------------------------------------------------------

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

%SEDAR: 00002535E

SOURCE GOLDFARB CORPORATION

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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