Gascard Chief, Board Members Resign
Gascard Club Inc., which just four days ago filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code, announced Monday that Tom Cannon, its president and chief executive, has resigned.
Keith Moore, chief financial officer of West Texas Gas, a major Gascard franchisee, was named a temporary replacement for Cannon. Moore is the third president the company has had in four years.
Cannon also has resigned from Gascard’s board of directors, along with board members Ken Deangelis, James Leary and Timothy Noll. Lindsay Holland, president of Barney Holland Oil Co., was named chairman of the new board. The Forth Worth-based oil company is a major Gascard franchisee.
La Jolla-based Gascard, which is developing a computerized network to monitor gasoline and diesel-fuel sales to drivers of corporate and government vehicle fleets, Friday reported it had $2.5 million in assets and $5.2 million in secured and unsecured liabilities.
Gascard reported a $1.8-million net loss for the third quarter ended Dec. 31, compared with a $730,000 net loss for the previous third quarter. Third quarter revenue fell to $1.2 million, down from $1.8 million a year earlier.
For the nine-month period, the firm reported a $4.2-million net loss and revenue that fell 28% to $3.6 million. The company has not yet reported figures for the fourth quarter and year ended March 31, said Gascard Chief Financial Officer Jane Crossen.
Gascard has generated $21.9 million in net losses since its inception in 1984.
On Monday, Gascard reported that it had entered into an agreement for a new line of credit for up to $500,000 with GCF, a company owned by several major Gascard franchisees and one large shareholder. GCF became a controlling shareholder Friday when it purchased an existing block of stock, Crossen said.
The $500,000 line of credit “will allow continued operations” of Gascard’s computerized fuel-sales management system, Crossen said.
Details of Gascard’s proposed reorganization have not yet been filed. However, GCF and other, unidentified investors expect to soon make a $2-million equity investment in Gascard. New stock would be issued to those investors, Crossen said.
Gascard, which was removed from NASDAQ’s listing several months ago because it failed to meet the exchange’s minimum capital requirements, traded at $.375 a share Friday.
Gascard has fallen behind on lease payments for its corporate headquarters in La Jolla. Crossen declined to comment on the lease payments.
In its prospectus, Gascard acknowledged that it faced severe competition from “substantially better-capitalized” companies--including several major oil companies, credit card companies and financial institutions.
Gascard, which moved to La Jolla in 1985, was founded in 1981 in New Mexico by a family that was relieved of its management control by the board of directors in 1986.
