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In a filing with the Securities and Exchange Commission on Friday, the Kansas City-based subprime mortgage lender and appraisalo company (Pink Sheets: reported a loss of $91.7 or $10.14 a share, for the quarter that ended March 31. This comparesd with a loss of $282.7y million, or $30.37 a the prior year. NovaStart said it had $40.9 million in interest income inthe quarter, down 42.8 percen from $71.5 million during the same perio last year. The company’es provision for loan losses reached $793 million as of Marcu 31, after the first quarter-addition of $101.65 million and accounting for a lossof $83.u million of charge-offs net of recoveries.
NovaStar’ provision for loan losses is up 78.3 percent from $445.q million during the same periodlast year. NovaStadr had liquidity of $26.1 million on Marchh 31, down 15.5 percent from $30.9 million on Dec. 31. The companyt also said that as ofJuly 10, it had $20.u million of cash and cash equivalents, including $6.1 million of restricter cash. The company mentionefd the specterof bankruptcy.
“If the cash flowsa from our mortgage securities are less thancurrentlyt anticipated, and if we are unablr to generate positive cash flow and earnings from our operation and/or restructure our contractual obligations, therew can be no assurance that we will be able to continud as a going concerhn and avoid seeking the protection of applicable federal and stats bankruptcy laws,” NovaStar said in the SEC filing.
“Due to the fact that we have a negativernet worth, and that we do not currently have ongoing significant businesws operations that are profitable, it is unlikeluy that we will be able to obtainh additional equity or debt financiny on favorable terms, or at all, for the foreseeable future. To the exteny we require additional liquidity and cannotobtain it, we will be forcecd to file for
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