Credit Depot Announces Fiscal 1997 Results; Conversion Offer.GAINESVILLE Gainesville. 1 City (1990 pop. 84,770), seat of Alachua co., N central Fla.; inc. 1869. The Univ. of Florida is a major source of employment in the city. Agriculture and the manufacture of electronic equipment add to the economy. , Ga.--(BUSINESS WIRE)--September 11, 1997--Credit Depot Corporation (Nasdaq: LEND) today announced that the net loss for the year ended June 30, 1997 was $3,362,999, or $1.06 per share, compared to a net loss of $4,114,820, or $1.34 per share, for the year ended June 30, 1996. Revenues were $5,918,460 and $2,278,899 for the respective years. Nearly all of the fiscal 1997 loss occurred in the second half of the Company's 1997 fiscal year. The net loss for the year was the result of several factors: a major expansion effort, begun in January 1997, did not result in the anticipated increase in loan originations The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. ; sharp increases in interest rates in the fiscal 1997 third quarter reduced the Company's gain on sale for an extended period; a significant portion of loan production consisting of bulk purchases, made to supplement loan originations during the "ramp-up" phase of the expansion effort, which further lowered profit margins on sales; and liquidity pressures which adversely affected the volume of loans originated for an extended period. As part of an overall plan to improve its financial condition, the Company also announced plans to make a conversion offer to holders of its 9 percent convertible Preferred Stock Convertible Preferred Stock Preferred stock that includes an option for the holder to convert the preferred shares into a fixed number of common shares, usually anytime after a predetermined date. Also known as "convertible preferred shares". (the "Preferred Stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. ") and 10 percent Senior Secured Notes (the "Notes"). Preferred Stock holders who accept the offer would convert each share of Preferred Stock (having a liquidation The collection of assets belonging to a debtor to be applied to the discharge of his or her outstanding debts. A type of proceeding pursuant to federal Bankruptcy preference of $20.00 per share) into 30.8 shares of Common Stock or a conversion price of $0.65 per share (the Preferred Stock is currently convertible into 8 shares of Common Stock or a conversion price of $2.50 per share). Note holders could convert each $1,000 principal amount of their notes into 2,000 shares of Common Stock or a conversion price of $0.50 per share (the Notes are currently convertible into 400 shares of Common Stock or a conversion price of $2.50 per share). Currently, 315,000 shares of Preferred Stock (with a liquidation value Liquidation value Net amount that could be realized by selling the assets of a firm after paying the debt. of $6,300,000) and $8,140,000 of Notes are outstanding. If this conversion offer is accepted in full, the outstanding Common Stock would increase from 4,072,761 to 30,045,069 shares, and the shares reserved for issuance of convertible securities would decrease from 22,384,518 to 14,483,518 shares. The conversion offer is subject to certain conditions, including approval of a five-for-one reverse stock split by the Common Stock shareholders of the Company. The conversion offer described above is part of a plan to reduce debt and cash expenditures of the Company and allow the Company to raise long term working capital. The Company recently received additional bridge financing Bridge Financing A method of financing, used by companies before their IPO, to obtain necessary cash for the maintenance of operations. Notes: These funds are usually supplied by the investment bank underwriting the new issue. , bringing the total received to $850,000, in conjunction with its plan to seek additional financing in the form of preferred stock. There can be no assurance that the conversion offer, reverse stock split, or additional financing transaction can be consummated con·sum·mate tr.v. con·sum·mat·ed, con·sum·mat·ing, con·sum·mates 1. a. To bring to completion or fruition; conclude: consummate a business transaction. b. . Credit Depot Corporation is a multi-state financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. Company that provides residential real estate financing to individuals unable to secure loans through conventional sources. The Company operates in 11 states. These loans are collateralized by mortgages, primarily on owner-occupied residential properties. "Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " Statement under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995: The statements in this press release regarding matters that are not statements of historical fact, including statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc plans, strategies, expectations and future economic results, are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. . Actual results may differ materially from the statements made, as a result of various factors, including risks associated with the Company's mortgage loan investments, such as the risks of defaults of mortgage loans, economic and other factors which impact real estate values and prevailing interest rates, the Company's ability to originate o·rig·i·nate v. 1. To bring into being; create. 2. To come into being; start. a sufficient volume of mortgage loans, the Company's ability to resell re·sell tr.v. re·sold , re·sell·ing, re·sells 1. To sell again. 2. To sell (a product or service) to the public or to an end user, especially as an authorized dealer. the mortgage loans in the secondary market, and other factors which are listed from time to time in the Company's Securities and Exchange Commission filings. -0-
Credit Depot Corporation
Condensed Consolidated Statements of Operations
(Unaudited)
Year Ended Quarter Ended
June 30, June 30,
1997 1996 1997 1996
Revenues:
Finance income and
fees earned $756,847 $640,390 $479,306 $ 12,768
Gain or sale of receivable 5,141,695 1,578,088 487,221 515,344
Other 19,918 60,421 (21,189) (17,547)
5,918,460 2,278,899 945,338 510,655
Expenses:
Salaries and employee
benefits 4,194,149 2,733,814 1,452,487 749,445
Legal and professional
fees 525,333 288,012 156,887 51,630
Other operating expenses 2,693,121 1,980,443 956,245 834,915
Provision for credit losses 425,231 185,000 350,231 110,000
Interest expense and
amortization of deferred
financing costs 1,443,625 1,206,450 370,204 120,161
9,281,459 6,393,719 3,286,054 1,866,151
Loss before provision for
income taxes (3,362,999) (4,114,820) (2,340,716) (1,355,586)
Provision for income tax - - - -
Net income (loss) $(3,362,999)$(4,114,820)$(2,340,716)$(1,355,586)
Dividends on preferred
stock 568,500 415,677 141,750 144,000
Net loss per share common
stock $ (1.06) $ (1.34) $ (0.63) $ (0.44)
Weighted average shares
outstanding 3,701,574 3,378,761 3,922,311 3,378,761
-0-
CONTACT: Credit Depot Corporation Gerald F. Sullivan / Charles Farrahar (770) 531-9927 or Kehoe, White, Savage & Co., Inc. John P. Kehoe/Van Negris (212) 888-1616 |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion