Credit Depot Announces Fiscal 1998 First Quarter Results.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)--Nov. 17, 1997--Credit Depot Corporation (Nasdaq: LENDD) today announced that the net loss for the three months ended September September: see month. 30, 1997 was $(1,115,345) after 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. dividends, or $(1.37) per share after giving effect to a one-for-five reverse stock split effected on October October: see month. 29, 1997. Comparable figures for the three months ended September 30, 1996 were a net loss of $(418,193) or $(0.62) per share. Revenues for the 1998 fiscal first quarter were $1,686,866 compared to $1,383,712 in the similar 1997 period a year ago. In addition, the Company reported pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma results for the 1997 period giving effect to a previously announced conversion offer to 10% convertible debt holders and 9% preferred stock holders, which offer was accepted on October 24, 1997. Due to a non-cash debt conversion expense and write down of deferred finance charges, the pro forma net loss for the three months ended September 30, 1997 was $(7,536,271). On the balance sheet, the stockholders' deficit was $(738,224) at September 30, 1997; however, due primarily to the conversion of $6,970,000 of debt to common equity, the pro forma balance sheet reported stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. of $5,261,579. Management stated: "As a result of the conversion of debt and preferred stock, annual interest and other expense has been reduced by approximately $930,000, and annual preferred stock dividend payments have been reduced by $555,000. In addition, while not implemented in time to have a material effect on the quarter ending September 30, 1997, recent internal changes have reduced expenses by $1.3 million on an annual basis. The total reduction in cash outflow for all these changes is estimated at $2.5 million on an annual basis. Nearly all of our loan production is now funded with $13.5 million in warehouse line facilities, and not with working capital as had been the case prior to acquiring the facilities in July 1997. The warehouse lines have facilitated expansion of the Company's sales base, which in turn has allowed the Company to expand its product origination Origination The process through which a mortgage lender creates a mortgage secured by some amount of the mortgagor's real property. Notes: Also known as loan origination, everyone must go through the origination process when securing a mortgage for a piece of real line to include the popular adjustable rate Adjustable rate Applies mainly to convertible securities. Refers to interest rate or dividend that is adjusted periodically, usually according to a standard market rate outside the control of the bank or savings institution, such as that prevailing on Treasury bonds or notes. and 125% loan-to-value mortgages. By implementing the changes listed above, we believe that Credit Depot now has a much improved foundation upon which to sustain long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. growth." 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 14 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 on 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)
Three Months Ended September 30, 1997
September 30,
1997 1996 Adjustments Pro Forma
Revenues:
Finance income and fees
earned $ 466,589 $ 151,296 $ $ 466,589
Gain on sale of
receivable 1,193,593 1,266,054 1,193,593
Other 26,324 (33,638) 26,324
1,686,866 1,383,712 1,686,866
Expenses:
Salaries and employee
benefits 1,244,324 745,687 1,244,324
Legal and professional
fees 121,106 96,711 121,106
Other operating expenses 673,408 486,256 673,408
Provision for credit losses 30,000 20,000 30,000
Debt conversion expense 5,576,000 5,576,000
Interest expense and amortization
of deferred financing
costs 545,588 309,251 844,926 1,390,514
2,614,426 1,657,905 6,420,926 5,995,405
Income (loss) before
provision for income
taxes (927,560) (274,193) (6,420,926) (7,348,486)
Provision for income tax - - - -
Net income (loss) $(927,560)$(274,193) $(6,420,926)$(7,348,486)
Dividends on preferred stock 187,785 144,000 187,785
Net loss attributable to
common shareholders $ (1,115,345)$(418,193) $ (7,536,271)
Net loss per share
common stock $ (1.37)$ (0.62) $ (9.25)
Weighted average shares
outstanding 814,573 675,753 814,573
-0-
Credit Depot Corporation
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, 1997
Actual Adjustments Pro Forma
Assets:
Net loans receivable $ 6,432,026 $ $ 6,432,026
Cash 1,184,380 (125,000) 1,059,380
Cash-restricted 1,290,594 1,290,594
Interest-only strip
receivable 7,783,991 7,783,991
Deferred financing
costs 1,453,420 844,926 608,494
Goodwill 880,465 880,465
Other assets 976,193 976,193
Total Assets $20,001,069 $ 969,926 $19,031,143
Liabilities:
Convertible notes
payable $ 11,790,000 (6,970,000) $ 4,820,000
Warehouse line of
credit 5,083,865 5,083,865
Other liabilities 3,865,428 3,865,428
Total Liabilities 20,739,293 (6,970,000) 13,769,293
Stockholders' Equity (Deficit)
Series "A" preferred stock,
.001 par value 315 (312) 3
Series "B" preferred stock,
.001 par value 17 17
Common stock, .001 par value 815 4,892 5,707
Additional paid-in
capital 16,251,282 12,416,420 28,667,702
Accumulated deficit (16,990,653) (6,420,926) (23,411,579)
Total Stockholders'
Equity (Deficit) (738,224) 6,420,074 5,261,850
Total Liabilities and
Stockholders' Equity $ 20,001,069 $ (969,926) $19,031,143
-0-
CONTACT: Credit Depot Corporation, Gainesville Gerald F. Sullivan / Charles Farrahar (770) 531-9927 Kehoe, White, Savage & Company, Inc., New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Van Negris / John P. Kehoe (212) 888-1616 |
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