PORTLAND, Ore., May 14, 2013 (GLOBE NEWSWIRE) -- Paulson Capital Corp. (Nasdaq:PLCC), parent company of Paulson Investment Company, Inc., today reported a net loss of $240,391, or ($0.04) per share for the three months ended March 31, 2013 versus net income of $1,412,294, or $0.24 per share, for the three months ended March 31, 2012. Revenues for the quarter ended March 31, 2013 totaled $1,250,680 compared to revenues of $5,609,660 for the same period in 2012. The lower revenues in the current quarter were largely due to lower commission revenue as a result of the sale of substantially all of the Company's retail brokerage operations to JHS Capital Advisors, LLC in April 2012.
In January 2013, the Company announced that it had agreed in principle to a change of ownership transaction involving the broker-dealer license held by our wholly-owned subsidiary, Paulson Investment Company, Inc. ("PIC"). Since then, the transaction has been restructured to facilitate FINRA approval. In January 2013, PIC received a $1,500,000 loan from an outside investor pursuant to a convertible promissory note bearing 5% simple interest. The note is convertible into preferred stock of PIC, representing approximately 35% of PIC on a fully diluted basis. The holders of the preferred stock shares will have no liquidation or other rights in the cash, receivables, inventories (including underwriter warrants), and certain prepaid assets, furniture and equipment that existed when the convertible promissory note was executed, and will not participate in any future gains or losses derived from those assets. On May 8, 2013, PIC submitted an updated Continuing Membership Application to FINRA for approval of this change of ownership transaction, after which the promissory note will convert into the preferred stock of PIC.
Chester L.F. Paulson, Chairman, stated:
"The proposed new investment in Paulson Investment Company, Inc. will allow the Company to expand its investment banking activities on behalf of smaller and emerging companies to include early- and late-stage private financings. The management team being formed in the broker-dealer has the experience to expand our presence in this area while leveraging the existing broker-dealer platform. During the first quarter of 2013, we leased temporary office space in New York City, and hired 13 new employees, including 10 institutional brokers focused on managing private financings."
Paulson Capital Corp. is the parent company of Paulson Investment Company, Inc. Located in Portland, Oregon, Paulson Investment Company is a national leader in public offerings of small and emerging growth companies with capital needs of $5 million to $45 million. Founded by Chet Paulson in 1970, it has managed or underwritten more than 166 public offerings and has generated approximately $1.2 billion for client companies.
This release may contain "forward-looking statements" based on current expectations but involving known and unknown risks and uncertainties. Actual results of achievements may be materially different from those expressed or implied. The Company's plan and objectives are based on judgments with respect to future conditions in the securities markets as well as general assumptions regarding the economy and competitive environment in the securities industry, which can be volatile and out of our control. In particular, we make assumptions about our ability to complete corporate finance transactions and increase the volume and size of our securities operations, which are difficult or impossible to predict accurately and often beyond the control of the Company. Therefore, there can be no assurance that any forward-looking statement will prove to be accurate.