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TXS Venture:URB

 

Toronto, Ontario – May 14, 2004 – Urbana Corporation (“Urbana”) (TSX Venture: URB) is pleased to announce the completion of private placement equity financing of its securities to accredited investors. 3,000,000 common shares of Urbana were issued today at a purchase price of $1.00 per common share for total proceeds of $3,000,000. No commissions were paid to any agent or underwriter in connection with the private placement. The common shares issued today may not be sold, transferred or traded before September 15, 2004.

 

The proceeds of the offering are expected to be used for general corporate purposes and it is management’s intention to finance the purchase of an additional seat on the New York Stock Exchange. In addition, proceeds will be used to supplement Urbana’s investment program and to develop its gold prospect holdings in Urban Township, Quebec.

 

Urbana is currently focusing its mineral exploration efforts on its 72 claim holding in Urban Township, Quebec.

 

Please contact Thomas S. Caldwell at 416-595-9106 for further information.

 

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

 

This press release has not been reviewed by the TSX Venture Exchange.

TXS Venture:URB

 

Toronto, Ontario – April 5, 2004 – Urbana Corporation (“Urbana”) (TSX Venture: URB) is pleased to announce a proposed private placement equity financing of its securities to accredited investors. A maximum of 3,000,000 common shares of Urbana will be issued at a purchase price of $1.00 per common share. Urbana currently expects that the private placement will be completed by May 14, 2004. No commissions will be paid to any agent or underwriter in connection with the private placement.

 

The proceeds of the offering are expected to be used for general corporate purposes and it is management’s intention to finance the purchase of an additional seat on the New York Stock Exchange. In addition, proceeds will be used to supplement Urbana’s investment program and to develop its gold prospect holdings in Urban Township, Quebec.

 

The private placement is subject to the approval of the TSX Venture Exchange.

 

Urbana is currently focusing its mineral exploration efforts on its 72 claim holding in Urban Township, Quebec.

 

Please contact Thomas S. Caldwell at 416-595-9106 for further information.

 

This press release has not been reviewed by the TSX Venture Exchange.

Toronto, Ontario – January 12, 2004 – Urbana Corporation (TSX Venture: URB) announces that its wholly-owned U.S. subsidiary, Urbana America Inc., has leased out its New York Stock Exchange Seat, which was purchased on December 18, 2003 for $1,500,000 (U.S). The seat has been leased for $190,000 (U.S) per year under a 1 year lease.

 

“We’re on track with our business plan for Urbana Corporation. With our investment portfolio having grown by 692% since September 30, 2002 and 309% for the year ended December 31, 2003, these have been very exciting times for the company,” stated President, Thomas S. Caldwell.

 

Urbana Corporation’s NYSE seat purchase and lease, in conjunction with its continuing mineral exploration investment activities, illustrate the company’s long-term strategy of balance between investment and natural resource activities.

 

This press release has not been reviewed by the TSX Venture Exchange.

The Board of Directors
The Board of Executives
Members
The New York Stock Exchange
11 Wall Street
New York, NY
10005

 

Dear Ladies and Gentlemen:

 

The challenges of 2003 are, in part, a harsh reminder that the New York Stock Exchange (“NYSE”) is caught in a unique and ongoing quandary. It is both a non-profit, quasi-regulatory “utility” and a corporation that must compete in order to survive and grow. Within these pressures, the NYSE must serve a variety of constituencies, all with legitimate claims on its functioning. This discussion paper attempts to provide a basis for considering why and how the NYSE can address all of its stakeholders through becoming a publicly traded, for-profit organization. The following points outline a reasonably compelling case for this course of action.

 

Ownership
1. Legislators, regulators, issuers, institutional investors and the general public have a sense of unease with the narrow ownership base of the NYSE. Of the 1366 seats, the vast majority are held by Specialists or Specialist-related persons. I, for example, am an investment manager who owns a seat and leases it to a Specialist trading firm. The optics and possible influence of one ownership constituency on an institution with world economic influence will be a continuing source of vulnerability to the NYSE. Mr. Reid’s heroic efforts in 2003, establishing governance guidelines, restructuring the Board(s) and selling the package to regulators, legislators and investors turned a potentially fatal blow to the NYSE into a “near miss.” Without his presence, stature and efforts, events could have been quite different. The point to keep in mind, however, is the underlying basis of the problem (real or perceived) was the inordinate influence of one group on the utility aspect of the NYSE. The NYSE needs to have a wide ownership base, reflecting its broad role in our society.

 

Regulation
2. Pressure to separate the Self-Regulatory Organization (“SRO”) function from the listing, trade processing, data sales and overall corporate growth aspects of the NYSE will be ongoing. It has often been stated that the SRO function is central to the NYSE’s stature. It is not. Some years ago, I argued the opposite point as a Board Member of the Toronto Stock Exchange. I was wrong. The value of a securities exchange is based upon the liquidity it provides and the fair dealing it offers. It is irrelevant who actually enforces this latter requirement, as long as it is done and seen to be done. The independence of the SRO function is therefore paramount and if anything, this separation will add to the stature of the NYSE. The current governance structure is a step in the right direction, but if one more violation occurs, all the statesmanship and salesmanship in the world will not preserve the current NYSE structure. Future growth and thus world positioning would be significantly undermined for the foreseeable future.

 

The Specialist
3. The case for our Specialist system can and must be made on a business basis. Our dual functioning has jeopardized this important NYSE feature as a result of regulatory overlap. With a separate regulatory body policing this function, infractions will be dealt with as necessary, yet the overall Specialist role would remain, as it makes sense to the NYSE’s customers, through providing liquidity and an orderly market mechanism which underpins our central market status. The argument is that separation of the two roles (SRO and business) may insulate the Specialist system from behavioral concerns with individual traders. For the record, I personally view the role of the Specialist and the floor-trading environment as necessary and valid for the NYSE in the future.

 

Future Expansion
4. In the not too distant future, the NYSE will be compelled to invest in system upgrades and expansion. Our physical facilities will also require significant investment. The NYSE lives in a competitive world where other exchanges have now unlocked significant sources of capital with which to grow. Over time, large European or Asian exchanges may well challenge the NYSE’s current position. Added to this possibility is the fact that public exchanges have a currency in their shares with which to take over or merge with other exchanges. This means of transacting business could have us facing substantial, consolidated exchange groupings and thereby becoming marginalized on a worldwide basis. This can have a major overall economic impact on America’s relative economic position. The NYSE is in the business of attracting listings of world scale companies. We are in competition and to be successful in the future we must anticipate what will be, rather than look at what is and was. If last year’s Wall Street Journal article regarding NASDAQ overtures was correct, then any acquisition (if desirable) could be more easily facilitated with publicly traded shares. The dual-listing issue, which has recently surfaced, could possibly be dealt with through a public share offer to Nasdaq, if it were thought advisable.

 

Unlocking Value and Liquidity 
5. The spreads between bid and ask prices for NYSE seats are typically in hundreds of thousands of dollars. If one has to sell at a given point, for estate or personal reasons, the impact can be significant for our owners. In essence, it is akin to holding one share, where the quote is $1,450,000 bid to $1,900,000 asked (at the time of this writing). By exchanging their seats for stock, current seat owners would be switching their lease income stream for a combination of dividends and capital gains from their share holdings. A clear case that this swap would be extremely advantageous to the owners is not hard to make, particularly when viewing the experiences of other exchanges which have entered the public markets. Our Members would be realizing the substantial underlying value of the NYSE and the fact that it would truly be the world standard in publicly traded exchanges. A stock split prior to an IPO would not only provide our owners with a tighter market, but also liquidity for a portion of this investment, with which to diversify into possibly less volatile holdings. To illustrate unlocking value, the Toronto Stock Exchange (“TSE”), having “gone public” in 2002, now has a market capitalization of $1.3 billion (U.S.) compared with a $2 billion valuation for the NYSE (1366 seats x $1.5 million). The comparison of these two numbers speaks volumes. On a simplistic basis, comparable Canadian/U.S. valuations are roughly ten times, representing trading volumes and economic output etc. On that basis, an NYSE seat, or the comparable number of shares, would be valued at approximately $9.5 million each ($13 billion divided by 1366 seats). This “off the cuff” number does, however, illustrate that there would be significant upward value potential for seat holders. The current 20 times multiple of earnings for most public exchanges also supports a significantly higher valuation. At a minimum, the share valuations would be some multiple of current seat values. TSE seats, although held artificially low and with approximately 120 members, moved from $39,000 U.S. to in excess of $9,750,000 U.S. as a result of its IPO.

 

NYSE Revenues
6. The above conversion of seats into shares would also generate approximately $200 million in additional revenues for the NYSE from existing Specialists’ fees. NYSE income could also be augmented through listing, trading, market data and other business service revenues. Other sources of revenue can be developed once a true NYSE business model is addressed. One advantage to both the NYSE and Specialists is that the approval and lease processes would then be united, bringing greater flexibility, simplicity and control to the process. This may also result in more realistic fee calculations. This general revenue stream would then be part of the NYSE framework, where it can be allocated more appropriately to current and future NYSE needs.

 

Executive Compensation
7. This is still a sensitive topic, yet looking to the future, it will have to be addressed. We have been very fortunate in attracting leaders recently with a sense of public purpose who have either donated retirement time or made significant financial sacrifices to help the NYSE. That will not always be the case at the CEO and other management levels. A compensation regime will eventually have to be in place to compete with other public companies for talent and skill. At present, the dual role (utility and business) of the NYSE can place constraints on our attracting management depth in the future. Clarity of purpose and goals are mandatory for professionals working for the NYSE. Having dual responsibilities is serving two masters. One will suffer.

 

Conclusion
As noted above, the SRO function is not the keystone of the NYSE. If anything, it is our Achilles heel. Separating our regulatory burden into a different entity and building our business foundation to deal with future challenges would enable the NYSE to address clearly the best practices in each area. This dichotomy, coupled with becoming a forprofit, publicly owned corporation, would simply and visibly address all the constituencies having a stake or interest in the NYSE. The current governance structure, although a vast improvement over what was, is still a hybrid with some of the same vulnerabilities which will surface over time. Within the breathing space we have now been granted, it is incumbent upon us to build a significantly better structure which will withstand future regulatory and competitive challenges. The purpose of this letter is simply to put this issue on the table. If agreement is secured for this course of action, the path is relatively straightforward with numerous precedents to lead the way.

 

Thank you for your consideration in this matter. I would gladly offer any assistance to further this course of action.

 

Yours truly,

 

Thomas S. Caldwell

 

Member/Lessor

Toronto, Ontario – Urbana Corporation (TSX Venture: URB) pleased to announce its wholly-owned subsidiary, Urbana America Inc., has purchased a seat on the New York Stock Exchange.

 

Management of Urbana Corporation views this purchase, through its nominee, as a long-term investment with both income and capital gains potential.

 

This purchase by Urbana Corporation, in conjunction with its continuing mineral exploration activities, illustrates our company’s long-term balance between investment and natural resource activities.

 

The purchase price for the New York Stock Exchange Seat was $1.5 Million (U.S.).

 

Please contact Thomas S. Caldwell at (416) 595-9106 for further information.

 

This press release has not been reviewed by the TSX Venture Exchange.

One of the great challenges in any industry is finding a “New Model,” or dramatically better way to provide a service or product.

 

Within the U.S. investment industry, there has been a shift from mutual funds to more flexible “hedge funds.” Both of these structures have inherent problems. Mutual funds are caught in a continual quest for short term performance, suffer redemptions during low markets, or have the structural inflexibility of having to stay within a specified category of investments. Typically, hedge funds are limited to larger investors and have restrictions on liquidation, as well as a certain lack of visibility as to their underlying holdings and management.

 

The closed-end investment company or publicly traded corporation provides the most efficient and flexible means of accumulating wealth. This structure harkens back to the first half of the last century when numerous closed-end investment companies created significant wealth for their shareholders.

 

Over the years, closed-end investment companies fell into disuse as many traded at discounts to their underlying asset value. That was more the case with stagnant or passive holding companies than with actively managed organizations. Within our definition, Berkshire Hathaway Inc., for example, would qualify as a closed-end investment company, which is actively managed and trades at a premium to its underlying asset value.

 

Another criticism was that closed-end investments were tax inefficient, since corporations have to pay their own tax. This can actually be an advantage for private shareholders, or taxed accounts, who seek simplicity in their financial affairs. Tax inefficiency can be overcome with greater operating efficiency, such as the use of leverage, non-taxed dividend flow-throughs and the ability to be flexible as to asset mix. Tax considerations should never outweigh operational advantages. Wherever there are accumulated corporate tax losses, this objection is negated.

 

Surpassing the above points are the significant positives emanating from the use of a publicly traded company as a medium for a wide range of investment activities. A partial list is as follows:

 

1. Managers are able to take a long view in order to achieve results. For mutual funds, quarterly performance demands can undercut strategic investing.
2. Asset mix can be more attuned to market conditions. There is a time to be in the stock market and a time to simply hold cash. Fixed income holdings can be altered and maturities shifted to capitalize on opportunities in the bond market. Mutual fund managers must stay heavily invested in the specific type of securities within the mandate of their specific funds. Asset shifts by investors from one mutual fund to another are reactive, rather than in anticipation of events or in order to make profit. The combination of inflexibility with after the fact changes can be very costly.
3. Leverage (borrowing) can be used to overweight a sector or security which appears attractive. This is, of course, a double-edged sword which can have both advantages and disadvantages. There is, however, the flexibility to capitalize on opportunities and enhance results. Options can also be used, when advisable. In the above cases, the investor has his or her risk limited to the amount of the investment in the closed-end investment company.
4. The capital invested in a closed-end investment company is stable. Mutual funds lose their resources through redemptions in depressed markets and regain them as a result of investor purchases toward market tops. In short, funds gain or lose cash resources at the worst possible times. This can impact longer-term performance.
5. “Short” positions can be implemented by closed-end investment companies when potential declines are identified and again, with limited liability for the individual investors.
6. There is increased scope to participate in various investment products from real estate, to private companies, to venture capital opportunities.
7. The capital structure of a closed-end investment company can be structured using bank borrowings, bonds, zero coupon bonds, convertibles, preferred shares and common shares to provide greater and more focused benefits to investors.
8. Greater liquidity exists. If an investor wishes to liquidate his or her holdings, then a simple sale can be initiated on a stock exchange through any broker. Often, with mutual funds, there is a tendency for the Investment Advisor to want to continue holding because of trailer fees. The variance of the stock price from the underlying asset value also provides trading opportunities.
9. Overall efficiencies are greater in a closed-end investment company, since operating and transfer costs are reduced. Investment Management costs can be higher or lower, depending on the specific management contract in place. At least, a greater proportion of expenses is used to achieve results, with the manager’s compensation more closely aligned with performance.

 

Urbana Corporation has the flexibility to invest across a wide spectrum of investment possibilities. We are of the opinion that market volatility and the rapidly changing economic scene will present both opportunities and risks. It is therefore incumbent upon investors to have a full range of alternatives available in one vehicle, in order to avoid pitfalls and to seize opportunities on a timely basis.

 

Urbana Corporation is utilizing the facilities of Caldwell Investment Management Ltd. and Caldwell Asset Management Inc. to aggressively manage the company’s marketable investment portfolio on a 1% fee basis and a 20% participation in net portfolio gains.

 

Caldwell Investment Management Ltd. and Caldwell Asset Management Inc. (“Caldwell”) and their affiliates have managed investments for high net worth private clients and institutions since 1981.

 

Caldwell ‘s disciplines combine a “top down” economic and financial market overview with a “bottom up” analysis of specific companies which fit within this broad analysis.

 

Over the years, the Caldwell team has demonstrated strength in identifying changes in price and market trends ahead of many other market participants and commentators.

 

The primary difference between this aggressive trading entity and the main body of Caldwell ‘s managed accounts is based upon Urbana ‘s use of leverage and aggressive positioning to capitalize on their market views and analysis. The asset mix of bonds and equities can vary significantly, as can the currency and nature of the investments used.

 

The term “Hedge Fund” is often used to describe the above. We do not anticipate “hedging” or offsetting positions to counter risk exposure. Caldwell ‘s technique utilizes market volatility in order to benefit from focused positioning.

 

The nature of this trading style has risk and, as such, investors must be “qualified” as to net worth and experience. Risk can always be contained within a portfolio by restricting investment to a small portion of one’s overall holdings.

 

Success in aggressive investing depends upon correctly forecasting the trend, picking the sector and then selecting the individual securities to be used. Among these three factors, anticipating the overall market trend is the most critical. If one does not correctly perceive the general trend, sector and individual stock selection become significantly less relevant in achieving results. This has been clearly illustrated over the past few years.

 

Caldwell has been using this levered model for Urbana Corporation since September 30, 2002 with the results as indicated in the attached Performance Appendix. One should be cautious in extrapolating performance numbers into the future. In September 2002, Caldwell correctly took positions near the market bottom of October 9, 2002 . They also correctly selected the money-centre banks and telecom equipment groups. As much as we would hope, they are not going to hit home runs each time at bat.

 

Thomas S. Caldwell and Caldwell Financial Ltd. own just under 50% of the outstanding shares of Urbana Corporation. Caldwell Financial Ltd. has also provided financing to Urbana Corporation in the amount of $1 million, convertible into shares of Urbana Corporation on an escalating scale from $0.30 per share. Exercise of the conversion would place Caldwell Financial Ltd. in a majority share position.

 

Thomas S. Caldwell

 

President

 

Urbana Corporation (Symbol: URB)

 

Listed on the Toronto Stock Exchange Venture Exchange

Toronto, Ontario – Urbana Corporation (TSX Venture: URB) is pleased to announce that it has entered into an agreement to issue a non-interest bearing convertible note (the “Note”) for $500,000 to Caldwell Financial Ltd. (“CFL”) to replace a $500,000 amount of a demand loan provided to the Corporation by CFL in November 2002. The Note will be convertible at any time for a five-year term into units at an initial conversion rate of CDN$0.30 per unit. Each unit will be comprised of one common share and one warrant to purchase a common share of the Corporation. Each warrant entitles CFL to subscribe for one common share initially at a price of $0.30. This transaction was an isolated private placement of a convertible note by the Corporation.

 

Assuming full conversion of the Note, the private placement represents approximately 42% of the Corporation’s issued and outstanding common shares and 100% of the Corporation’s issued and outstanding warrants. Prior to this transaction, CFL owned 100,000 common shares of the Corporation.

 

On a fully-diluted basis (assuming the exercise of the Note and the warrants issued on conversion of the Note on the date hereof), CFL beneficially owns 3,433,333 common shares representing approximately 59.88% of the total outstanding common shares of the Corporation.

 

The transaction has been approved by the Corporation’s minority shareholders and by the TSX Venture Exchange.

 

Urbana Corporation is a mineral exploration company currently focusing its efforts on its 68 claim holding in Urban Township, Quebec.

 

Please contact Thomas S. Caldwell at 416-595-9106 for further information.

Urbana Corporation has, for the last two decades, been a self-sustaining resource exploration and development enterprise. “Self-sustaining” meant that funds were generated through investment and business activities, rather than new share issues. The funds were then used to acquire and explore resource prospects.

 

Over this time, properties were acquired and released (e.g. the diamond prospect in Wawa, Ontario) or expanded, explored and developed such as our 70 claim gold prospect in Urban Townships, Quebec.

 

This latter group has grown from an original holding of six claims and has had approximately $2,000,000 spent by ourselves and joint venture parties on its development. Improved ground access, coupled with a greater interest in gold in general and this area in particular, augur well for the future of this asset.

 

Throughout the modern history (post 1980) of this company, there has been a cycle of building the treasury, expending the funds accumulated on exploration and then starting the process over again.

 

It is clear that Urbana must now build its asset base to significantly higher levels. Thus, for the foreseeable future, a greater emphasis will be placed upon the growth of our marketable investment base.

 

To this end, a loan of $1 million was secured from Caldwell Financial Ltd. in order to build our treasury. The initial phase has proceeded well, with our liquid assets growing from approximately $225,000 in September 2002 to $600,000 by early July 2003. The investment performance has been exceptional over this period since it also includes the deduction of operating expenses.

 

Although the nature of our company will not change in the near term, our shareholder value has greater near term potential through the active building of our treasury, while seeking out joint venture partners to participate in the development of our resource properties.

 

That has, in fact, always been the long-term nature of Urbana Corporation and its previous incarnations. Raise funds, initiate and develop projects, then seek out larger industry participants to bring them to completion. The primary difference in this phase is that, given the nature of Canadian capital markets, it makes sense, at present, to raise the funds internally. This is our quest.

 

Thomas S. Caldwell

 

President

Toronto, Ontario – Urbana Corporation (TSX Venture: URB) is pleased to announce that it has entered into an agreement to issue a non-interest bearing convertible note (the “Note”) for up to $500,000 to Caldwell Financial Ltd. (“Caldwell”) to replace the equivalent amount of a demand loan provided to the Corporation by Caldwell in November 2002. The Note will be convertible at any time for a five-year term into units at an initial conversion rate of CDN$0.30 per unit. Each unit will be comprised of one common share and one warrant to purchase a common share.

 

The transaction is subject to approval by minority shareholders and the TSX Venture Exchange.

 

For more information call
Sarah Noonan
Investor Relations
(416) 595-9106

Caldwell Financial Ltd. (“Caldwell”) has entered into an agreement with Urbana Corporation (“Urbana”) whereby Caldwell will provide a demand loan to Urbana of up to one million dollars at current levels of interest.

 

The funds will be used by Urbana to build the treasury of that company.

 

The terms of this demand loan can be changed, by agreement between both management groups, to make any portion of the loan convertible into common shares.

 

The shares of Urbana trade on the TSX Venture Exchange (symbol URB).

 

Thomas S. Caldwell
Chairman

 

 

For more information call
Sarah Noonan
Investor Relations
(416) 595-9106