Westech Capital Corp. Announces Year End 2012 Financial Results

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Aug 21, 2013, 04:30 ET

AUSTIN, Texas, Aug. 21, 2013 /PRNewswire/ -- Westech Capital Corp. (Pink Sheets: WTEC) today announced its audited consolidated Year End 2012 financial results.

2012 total revenues were $22.4 million compared to total revenues of $20.3 million for 2011. The Company reported a pre-tax loss of $4.9 million for 2012 as compared to a pre-tax loss of $3.2 million for 2011. The Company reported an after-tax net loss of $5.0 million for 2012 as compared to an after-tax net loss of $3.3 million for 2011. The Company reported a net loss available to common stockholders of $5.6 million for 2012 as compared to a net loss available to common stockholders of $3.4 million for 2011. The Company reported a net loss of $1.38 per share of common stock on a basic and fully diluted basis for 2012, compared to a net loss of $0.85 per share of common stock on a basic and fully diluted basis for 2011.

Company Information

Westech Capital Corp. (Pink Sheets:WTEC) is a holding company whose primary operating subsidiary is Tejas Securities Group, Inc., ("Tejas Securities"). Tejas Securities is a full service brokerage and investment banking firm that focuses on the following: (i) proprietary research on distressed debt and special situation securities, (ii) trading and other brokerage services to value-based institutional and retail investors active in fixed income and equity instruments, and (iii) corporate finance and strategic advisory services to middle-market companies within our target industries.

WESTECH CAPITAL CORP. AND SUBSIDIARIES
Consolidated Statements of Financial Condition


			December 31,
Assets			2012	2011

Cash and cash equivalents			$ 819,415	$ 1,444,106
Receivable from clearing organization			2,110,079	2,730,309
Receivables from employees, current			372,303	252,451
Securities owned, at fair value			1,005,922	6,413,002
Prepaid expenses and other assets			677,758	680,867

		Total current assets	4,985,477	11,520,735

Property and equipment, net			3,625,518	3,844,440
Receivables from employees, non-current			167,519	350,467

		Total assets	$ 8,778,514	$ 15,715,642

Liabilities, Redeemable Preferred Stock and Stockholders' Equity (Deficit)

Accounts payable, accrued expenses and other liabilities			$ 3,033,245	$ 2,901,948
Securities sold, not yet purchased, at fair value			179,599	2,211,689
Current portion of long term debt			101,112	117,564

		Total current liabilities	3,313,956	5,231,201

Long term debt			1,931,878	2,074,074

		Total liabilities	5,245,834	7,305,275

Redeemable preferred stock
	Preferred stock, $0.001 par value, 400 shares authorized
		Current Series A redeemable, convertible preferred stock ("Current Preferred Stock"), 338 and 339 shares issued and outstanding at December 31, 2012 and 2011, respectively, including unpaid accrued dividends of $746,627 and $160,913 at December 31, 2012 and 2011, respectively, and net of issuance costs of $247,084



			8,949,543	8,388,829
	Note receivable from former director and executive officer (Note 18)		(1,000,000)	(1,000,000)

		Total redeemable preferred stock	7,949,543	7,388,829

Commitments and contingencies

Stockholders' equity (deficit):
	Common stock, $0.001 par value, 30,000,000 shares authorized, 8,198,508 issued at December 31, 2012 and 2011
			8,199	8,199
	Additional paid in capital		69,633,850	69,502,296
	Accumulated deficit		(62,687,416)	(57,108,615)
	Treasury stock,
		Common stock, at cost, 4,166,776 shares at December 31, 2012 and 2011
			(11,248,244)	(11,248,244)
	Accumulated other comprehensive loss		(123,252)	(132,098)
		Total stockholders' equity (deficit)	(4,416,863)	1,021,538

		Total liabilities, redeemable preferred stock and stockholders' equity (deficit)
			$ 8,778,514	$ 15,715,642

WESTECH CAPITAL CORP. AND SUBSIDIARIES
Consolidated Statements of Operations


		Years Ended December 31,
		2012	2011

Revenue:
	Commissions from principal transactions	$ 14,708,622	$ 16,024,668
	Commissions from agency transactions	1,947,146	643,697
	Underwriting and investment banking revenue	104,807	1,754,237
	Net dealer inventory and investment revenue, net of trading interest expense of $4,617 and $11,735, respectively
		5,428,934	1,824,774
	Other revenue	251,110	88,304
	Total revenue	22,440,619	20,335,680

Expenses:
	Commissions, employee compensation and benefits	17,318,973	15,883,169
	Floor brokerage and clearing organization charges	1,076,453	287,963
	Communications and occupancy	3,404,564	1,950,340
	Professional fees	1,977,773	1,585,061
	Interest	149,078	202,778
	Other	3,427,376	3,652,816
	Total expenses	27,354,217	23,562,127

Loss before income tax expense		(4,913,598)	(3,226,447)

	Income tax expense	79,489	24,282

Net loss		(4,993,087)	(3,250,729)

Less:
	Dividends on Current Preferred Stock	585,714	160,913

Net loss available to common stockholders		$ (5,578,801)	$ (3,411,642)

Net loss per share of common stock:
	Basic and diluted	$ (1.38)	$ (0.85)

Weighted average common shares outstanding:
	Basic and diluted	4,031,732	4,031,732