A major stockholder of La Jolla-based Gascard Club has agreed to provide the financially ailing company with a one-year loan guarantee of up to $1.5 million, the company said Monday. Gascard will use the loan guarantee to obtain capital required to cover operating expenses, according to Jane Crossen, Gascard's chief financial officer.
"We need operating capital," said Crossen, who refused to identify the shareholder. "We believe the loan guarantee will help us reach the level of liquidity that we need."
Gascard, which reported a $1.3-million net loss for the second quarter ended Sept. 30, has reported a total of $6.6 million in net losses during the past six quarters.
In addition to that string of quarterly losses, Gascard also has been threatened with eviction for failing to pay its rent. Gascard has issued its landlord, First Capital Life Insurance Co., stock in lieu of rent payments, Crossen said.
"A year into our lease, the free-rent period ended and we were not in a position to pay our rent," Crossen said. "We expect that we'll be able to work things out without getting to the point of eviction proceedings."
Gascard operates an electronic fuel payment and management program for fleet operators.