SOURCE: Spring Creek Capital Corporation

November 30, 2009 08:00 ET

Spring Creek Corp. Announces September 30, 2009 Quarterly Financial Results

NEW YORK, NY--(Marketwire - November 30, 2009) - Spring Creek Corp. (OTCBB: SCRK) or the ("Company") today announces financial results for its fiscal quarter ended September 30, 2009.


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.

Contact Information

  • Contact:
    Jan E. Chason
    Spring Creek Corp.
    (646) 591-4599