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Novation Companies, Inc. Message Board

  • poolblue3 poolblue3 Nov 9, 2011 4:55 PM Flag

    10Q for Q3 Rel early for NOVS

    Business Plan and Liquidity - Management is developing its operating entities by increasing market share and introducing new products and distribution channels and is exploring additional investments in operating companies.

    The Company had $16.6 million in cash and cash equivalents as of September 30, 2011, which was an increase of $4.0 million from December 31, 2010. In addition to the Company's operating expenses, the Company has quarterly interest payments due on its senior debentures. The Company's current projections indicate sufficient available cash and cash flows from operations and its mortgage securities to meet these payment needs.

    The Company continues its strategy of developing StreetLinks and significantly increasing its order volume. For the nine and three months ended September 30, 2011, StreetLinks had revenues of $81.5 million and $37.4 million, respectively, as compared to $50.2 million and $22.8 million, respectively, for the nine and three months ended September 30, 2010. StreetLinks had significant growth during 2010 and for the nine months ended September 30, 2011 with the addition of new customers.

    During the nine and three months ended September 30, 2011, the Company received $8.2 million and $2.6 million, respectively, in cash on our mortgage securities portfolio, compared to $8.6 million and $3.4 million, respectively, during the nine and three months ended September 30, 2010. During the nine and three months ended September 30, 2011, the Company used cash to pay for corporate and administrative costs and made a distribution to the noncontrolling interests of StreetLinks.

    For the nine and three months ended September 30, 2011, Advent had revenues of $6.7 million and $0.2 million, respectively, but had minimal activity for the same periods in 2010 as it was in the start-up phase.

    As of September 30, 2011, the Company had working capital of $18.9 million as compared to a working capital deficiency of $35.9 million as of December 31, 2010. The increase of approximately $54.8 million was mainly attributable to dividends payable being eliminated as part of the Recapitalization. The accrued and unpaid dividends on the outstanding Series C Preferred Stock and the outstanding Series D Preferred Stock were eliminated through the Recapitalization. See Note 3 to the condensed consolidated financial statements for further details.

    The Company's consolidated financial statements have been prepared on a going concern basis of accounting which contemplates continuity of operations and realization of assets, liabilities and commitments in the normal course of business.

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    Management believes that its current operations and its cash availability are sufficient for the Company to discharge its liabilities and meet its commitments in the normal course of business.

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