Winfield Capital Corp. Reports Results for the First Quarter Ended June 30, 2005.WHITE PLAINS, N.Y. -- Winfield Capital Corp. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). : WCAP WCAP World Class Athlete Program WCAP Web Calendar Access Protocol WCAP Winfield Capital Corporation (stock symbol) WCAP Westinghouse Commercial Atomic Power WCAP World Climate Applications Program ) announced today a net loss of $460,358 or a basic net loss per share of $0.09 for the quarter ended June 30, 2005 versus a net loss of $547,500 or a basic net loss per share of $0.10 for the quarter ended June 30, 2004. The net loss in the quarter ended June 30, 2005 included a net investment loss of $287,413 and a realized net capital loss of $391,170 on the sale of a debt security compared with a net investment loss of $295,114 and a realized net capital gain of $314,213 for the quarter ended June 30, 2004. The net loss for the three months ended June 30, 2005 was partially offset by a decrease in unrealized depreciation on investments of $218,225 (principally related to the increase in fair value of three portfolio companies, offset by the decrease in fair value of two portfolio companies). There was an increase in unrealized depreciation on investments of $566,599 for the three months ended June 30, 2004. The Company's investment income decreased by $289,820, or a decrease of 77.6%, from $373,267 for the three-month period ended June 30, 2004 to $83,447 for the three-month period ended June 30, 2005. This primarily reflected a decrease in interest from small business concerns of $281,027 as a result of the Company's sale of loan investments. Interest from idle funds Idle Funds Money that is not invested and, therefore, earning no income. For example, funds in a checking account. Notes: If you want to increase your income, try to place your idle funds into a money market account (or some other interest bearing account). decreased by $8,793 during this period as a result of a decrease in idle in vain. - Chaucer. See also: Idle funds that were invested. Interest expense decreased by $281,613, or a decrease of 77.9%, from $361,448 for the three-month period ended June 30, 2004 to $79,835 for the three-month period ended June 30, 2005 as a result of the repayment of certain debentures to the U.S. Small Business Administration (the "SBA SBA abbr. Small Business Administration Noun 1. SBA - an independent agency of the United States government that protects the interests of small businesses and ensures that they receive a fair share of government "). The Company's operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. decreased by $15,908, or a decrease of 5.2%, from $306,933 for the three months ended June 30, 2004 to $291,025 for the three months ended June 30, 2005. Legal fees decreased by $29,675, insurance expense decreased by $6,202, stock record costs increased by $15,125 due to the Annual Meeting of Shareholders and state tax increased by $5,115. There were miscellaneous decreases of $271. As previously disclosed in the Company's public filings and in press releases, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the SBA Regulations, the Company is required to be in compliance with the capital impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. rules, as defined by regulation 107.1830 of the SBA Regulations. The Company was notified by the SBA on April 30, 2003 that the Company was no longer in compliance with the SBA's capital impairment requirements and that the SBA had accelerated the maturity date of the Company's debentures. The aggregate principal, interest and fees due under the debentures totaled approximately $25.6 million as of April 30, 2003, including interest and fees due through the next semi-annual payment date. As a result of subsequent repayments by the Company, the aggregate principal, interest and fees due under the debentures totaled approximately $3.7 million as of June 30, 2005, including interest and fees due through the next semi-annual payment date. The SBA has transferred Winfield Capital's account to 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 status where any new investments and material expenses are subject to prior SBA approval. Based on discussions and meetings that the Company has had with the SBA to date, the SBA will not afford the Company the flexibility of a self-managed liquidation to repay its indebtedness. As a result, the Company anticipates that it will be required to repay all or substantially all of the principal and interest owing to owing to prep. Because of; on account of: I couldn't attend, owing to illness. owing to prep → debido a, por causa de the SBA on a schedule acceptable to the SBA. On April 6, 2005, the Company entered into a Forbearance Refraining from doing something that one has a legal right to do. Giving of further time for repayment of an obligation or agreement; not to enforce claim at its due date. A delay in enforcing a legal right. Agreement with the SBA whereby the maturity date of the Company's remaining principal indebtedness to the SBA was extended until June 30, 2005, subject to a cure period of fifteen days. In connection with the Forbearance Agreement, the Company entered into a Stipulated Settlement and a Consent and Judgment whereby the SBA may pursue any remedies it deems appropriate under the law or the instruments evidencing the Company's indebtedness, including, without limitation, initiating proceedings for the appointment of the SBA or its designee des·ig·nee n. A person who has been designated. as receiver to the extent that the Company defaults under its obligations pursuant to the Forbearance Agreement. The Company is in default pursuant to the terms of the Forbearance Agreement that required the repayment in full of all of the Company's outstanding indebtedness to the SBA including accrued interest Accrued Interest The interest that has accumulated on a bond since the last interest payment up to but not including the settlement date. There are two methods for calculating accrued interest: 1) 360-day year method, used for corporate and municipal bonds. on July 15, 2005 after giving effect to a fifteen-day cure period. To date, the SBA has refused to grant the Company an extension of the maturity under the Forbearance Agreement. The SBA has yet to formally accelerate its indebtedness, although the SBA is now entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: to pursue any remedies, including, without limitation, seeking a receivership receivership In law, state of being in the hands of a receiver, a person appointed by the court to administer, conserve, rehabilitate, or liquidate the assets of an insolvent corporation for the protection or relief of creditors. of the Company. If the SBA were to require the Company to immediately pay back the entire indebtedness including accrued interest, certain private security investments may need to be disposed of in a forced sale that may result in proceeds less than their carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. at June 30, 2005. As such, this impairment could have a material adverse effect on the Company's financial position, results of operations and cash flows that raises substantial doubt about the Company's ability to continue as a going concern. The Company continues to explore various strategic alternatives, including a third party equity infusion, although there can be no assurance that it will be successful in its ability to consummate or implement these or any other strategic alternatives. Winfield Capital is a small business investment company that makes loans and equity investments pursuant to funding programs sponsored by the SBA and is a non-diversified, closed-end investment company closed-end investment company: see mutual fund. that is a business development company under the Investment Company Act of 1940. The Company's common stock is traded on the Over the Counter Bulletin Board ("OTCBB") under the symbol "WCAP". This press release may contain 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. . For this purpose, any statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as "may," "will," "expect," "could," "would," "should," "believe," "anticipate," "estimate," "continue," "provided," or comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, and actual results may differ materially depending on a variety of factors. The Company operates in a changing environment in which new factors can emerge from time to time. It is not possible for management to predict all of these risks, nor can it assess the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in forward-looking statements. All forward-looking statements are subject to risks and uncertainties, including without limitation, those identified in the Company's annual report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. , which could cause actual results to differ from those projected. Winfield Capital disclaims any obligation to update any forward-looking statements contained in this press release.
SELECTED FINANCIAL INFORMATION
Three Months Ended June 30,
2005 2004
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Total Investment Income $ 83,447 $ 373,267
Net (Loss) $ (460,358) $ (547,500)
Net (Loss) Per Share
Basic $ (0.09) $ (0.10)
Diluted $ (0.09) $ (0.10)
Weighted Average Number
of Shares Outstanding &
Common Stock Equivalents 5,346,084 5,346,084
Total Assets $ 4,940,151 $ 23,750,098
Cash & Cash Equivalents $ 388,539 $ 6,940,942
Total Shareholders' Equity $ 1,196,551 $ 2,080,244
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