Business & Finance
Business and FinanceBusiness and Finance 
Mon, November 30, 2009
Spring Creek Corp. Announces September 30, 2009 Quarterly Financial Results
NEW YORK, NY--(Marketwire - November 30, 2009) - Spring Creek Corp. (
HIGHLIGHTS:
At September 30, 2009:
Total Assets: $1.8 million Investment Portfolio: $936,000 Net Assets: $1.7 million Net Asset Value per share: $.05
Portfolio Activity for the Quarter Ended September 30, 2009:
Net Investments made during the quarter: $37 thousand
Operating Results for the Quarter Ended September 30, 2009
Net investment loss: $649,000 Net unrealized gains: $899,000 Net increase in net assets from operations: $250,000 Earnings per share: $.01
PORTFOLIO AND INVESTMENT ACTIVITY
During the period since our election to become a Business Development Company in April 2009, we made our first investments ($37 thousand) in portfolio companies. Our portfolio was invested 96.2% in common equity and 3.8% in corporate indebtedness. The yield on the debt is 10%. Each of our portfolio companies is in the healthcare industry and each entity is being incubated by us. The Company's management and Board of Directors in their quarterly review of the portfolio companies, as of September 30, 2009, also recognized that the fair value of our equity interests required recording unrealized gains as a result of the progress these entities were making in pursuing their business plans. As a result the Company recorded an unrealized gain of $899,000 in the quarter ended September 30, 2009.
RESULTS OF OPERATIONS
Results for the three and nine months ended September 30, 2009
Investment Income
Investment income for the three and nine months ended September 30, 2009 totaled $15 thousand. We currently have limited investment income and our equity investments are not expected to pay dividends currently. We have also generated revenue in the form of fees for providing significant managerial assistance and may in future receive fees for commitment, origination, structuring or diligence fees as well as consulting fees. In all likelihood we will be required to make future expenditures in connection with our due diligence efforts along with general and administrative expenses before we will earn any material investment income.
Expenses
Expenses during the three and nine months ended September 30, 2009 aggregated $664,000 and $749,000, which included a non-cash charge of $588,000 related to amortization of finance costs. The finance charge results from the fair value accounting for warrants issued in connection with debt issuances. Our primary operating expenses include the payment of: (i) consulting fees under arrangements to fund costs related to personnel, advisors and other administrative obligations for identifying, evaluating, negotiating, closing, monitoring and servicing our investments; (ii) interest on borrowings; and (iii) professional services including legal, accounting and transfer agent.
Net change in unrealized gain
During the three and nine month period ended September 30, 2009, the Company recognized unrealized gain on its investments of $899,000 as a result of the matters discussed above concerning its investments.
Net increase in net assets from operations
For the three and nine months ended September 30, 2009, the Company had a net increase in net assets resulting from operations of $250 thousand or $.01 per share and $165 thousand or $.01 per share, respectively.
LIQUIDITY AND CAPITAL RESOURCES
The Company's liquidity and capital resources are generated and will generally be available through periodic follow-on equity offerings and through borrowings, as well as from cash flows from operations. The primary use of funds will be investments in portfolio companies, cash distributions to our stockholders, reductions in debt outstanding and other general corporate purposes.
As of September 30, 2009, the Company had a negative working capital of $86,000. During this period we invested $37,000. As of September 30, 2009, we had net assets of $1.7 million and, based on 33.7 million shares of common stock outstanding, a net asset value per common share of approximately $.05. Since implementing the BDC business plan, we generated net cash proceeds of $126,000 from equity placements and borrowed $177,000 from a related party. In the future, the Company will need to raise additional equity or debt capital to meet its operating needs as well as its commitments to its portfolio companies.
SPRING CREEK CAPITAL CORP. STATEMENTS OF ASSETS AND LIABILITIES September December 30, 2009 31, 2008 ----------- ----------- (unaudited) Assets Investments in portfolio companies Non-controlled investments, at fair value (cost $27,725) $ 127,625 $ - Controlled investments, at fair value (cost $99,230) 808,500 - Cash 1,720 - Accounts receivable 12,920 - Prepaid finance costs and other assets 827,970 - ----------- ----------- Total assets $ 1,778,735 $ - ----------- ----------- Liabilities Accounts payable and accrued expenses 10,649 500 Notes and interest payable to related party - net of discount of $94,078 90,540 - ----------- ----------- Total liabilities 101,189 500 ----------- ----------- Net Assets $ 1,677,546 $ (500) =========== =========== Analysis of Net Assets: Common stock, par value $.001 per share, 75,000,000 shares authorized, and 33,730,000 (2009) and 32,880,000 (2008) issued and outstanding $ 33,730 $ 32,880 Additional paid-in capital 1,604,908 93,120 Retained earnings/accumulated deficit 38,908 (126,500) ----------- ----------- Total Net Assets $ 1,677,546 $ (500) =========== =========== Net Asset Value Per Share $ .05 $ - =========== =========== SPRING CREEK CAPITAL CORP. STATEMENTS OF OPERATIONS (unaudited) Three months ended Nine months ended September 30, September 30, ------------------------ ------------------------ 2009 2008 2009 2008 ----------- ----------- ----------- ----------- Investment income Interest $ 420 $ - $ 420 $ - Other income 15,000 - 15,000 - ----------- ----------- ----------- ----------- Total Investment Income 15,420 - 15,420 - Expenses Administrative 66,635 - 139,823 - Professional fees 4,603 - 13,640 72,845 Interest expense 5,218 - 7,829 - Amortization of financing costs 587,890 - 587,890 - ----------- ----------- ----------- ----------- Total expenses 664,346 - 749,182 72,845 ----------- ----------- ----------- ----------- Net investment loss (648,926) - (733,762) (72,845) Unrealized gains on investments 899,170 - 899,170 - ----------- ----------- ----------- ----------- Net increase (decrease) in net assets resulting from operations $ 250,244 $ - $ 165,408 $ (72,845) =========== =========== =========== =========== Net increase (decrease) in net assets resulting from operations per common share - Basic $ .01 $ - $ .01 $ - Dilutive $ .01 - $ .01 $ - Weighted number of common shares outstanding - basic 33,730,000 32,880,000 33,631,103 31,135,182 dilutive 35,343,495 32,880,000 34,529,655 31,135,182
Per Share Information
Net changes in net assets resulting from operations per common share, or basic earnings per share, are calculated using the weighted average number of common shares outstanding for the period presented. The weighted average number of shares outstanding for the dilutive computation for the three and nine months ended September 30, 2009 includes 1,613,495 and 898,552 shares, respectively, for warrants outstanding based upon the treasury method.
About Spring Creek Corp.
Spring Creek Capital Corp. is a closed-end investment company that has elected to be treated as a business development company (BDC) under the Investment Company Act of 1940. Spring Creek intends to invest principally in equity securities, including convertible preferred securities and debt securities of private U.S. based micro-cap companies. Spring Creek plans to provide its portfolio companies with management expertise as well as capital. Its investment objective is to maximize the portfolio's capital appreciation while generating current income from the portfolio investments.
This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21 E of the Securities Exchange Act of 1934, as amended. Investors are cautioned that these forward-looking statements involve uncertainties and risk that cold cause actual performance and results of operations to differ materially from those anticipated. These risks and uncertainties include issues related to the ability to: obtain sufficient funding to continue operations, maintain adequate cash flow, profitably exploit new ventures, as well as other factors set forth in Spring Creek Capital's most recently filed Form 10-K and Form 10-Q reports. The forward looking statements contained herein represent the Company's judgment as of the date of this release and it cautions readers not to place undue reliance on such statements. Spring Creek Capital assumes no obligation to update the statements contained in this release except as required by applicable securities disclosure rules.