-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, B9t+SpZ3ubAnkqWebv1B6Jkj9xNsesxfTGberSNeknkjgEfMl3UNgj3RT9qd8EHx LnTjbOal6c6GOwuLWawTqg== 0000950123-95-003265.txt : 19951212 0000950123-95-003265.hdr.sgml : 19951212 ACCESSION NUMBER: 0000950123-95-003265 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951113 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BEVERLY HILLS BANCORP CENTRAL INDEX KEY: 0000011917 STANDARD INDUSTRIAL CLASSIFICATION: 6022 IRS NUMBER: 952588374 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-04559 FILM NUMBER: 95589556 BUSINESS ADDRESS: STREET 1: 100 WILSHIRE BLVD STE 1940 CITY: SANTA MONICA STATE: CA ZIP: 90401 BUSINESS PHONE: 3103957754 MAIL ADDRESS: STREET 1: 100 WILSHIRE BLVD CITY: SANTA MONICA STATE: CA ZIP: 90401 10QSB 1 FORM 10-QSB 1 SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-QSB [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR QUARTER ENDED SEPTEMBER 30, 1995 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the period from __________ to __________ Commission File Number 0-4559 ----------------------------- BEVERLY HILLS BANCORP ------------------------------------------------------ (Exact name of registrant as specified in its charter) CALIFORNIA 95-2588374 --------------------------- -------------------------------------------- (State of Incorporation) (I.R.S. Employer Identification Number) 100 WILSHIRE BOULEVARD, SUITE 1940, SANTA MONICA, CA 90401 --------------------------------------------------------- --------------- (Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 310-395-7754 ------------ Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No . --- --- Number of shares of Common Stock, $1.00 par value, outstanding as of September 30, 1995: 1,194,432. 2 BEVERLY HILLS BANCORP TABLE OF CONTENTS
Page PART I. Financial Information Number --------------------- ------ Item 1. Financial Statements Condensed Financial Statements 3-4 Condensed Statement of Net Assets (Liquidation Basis) -- September 30, 1995 5 Condensed Statement of Changes in Net Assets in Liquidation (1995) and Condensed Consolidated Statement of Operations (1994) -- For the Three Months Ended September 30, 1995 and 1994 6 Condensed Statement of Changes in Net Assets in Liquidation (1995) and Condensed Consolidated Statement of Operations (1994) -- For the Nine Months Ended September 30, 1995 and 1994 7 Condensed Statements of Cash Flows -- For the Nine Months Ended September 30, 1995 and 1994 8 Notes to Condensed Financial Statements 9-12 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 12-15 PART II. Other Information ----------------- Item 1. Legal Proceedings 16 Item 4. Submission of Matters to a Vote of Security Holders 16-17 Item 6. Exhibits and Reports on Form 8-K 17 SIGNATURE 17
- 2 - 3 PART I. Financial Information Item 1. Beverly Hills Bancorp--Financial Statements Condensed Financial Statements (Unaudited) The Condensed Financial Statements included herein have been prepared by Beverly Hills Bancorp (the "Company"), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes the disclosures which are made are adequate to make the information presented not misleading. Further, the Condensed Financial Statements have been prepared in accordance with generally accepted accounting principles for interim financial information, the instructions to Form 10-QSB and Regulation S-B (including Item 310(b) thereof) and reflect, in the opinion of management, all adjustments necessary to present fairly the net assets, changes in net assets in liquidation and results of operations as of and for the periods indicated. It is suggested that these Condensed Financial Statements be read in conjunction with the Consolidated Financial Statements and the Notes thereto for the year ended December 31, 1994, included in the Beverly Hills Bancorp Form 10-KSB Annual Report to the Securities and Exchange Commission. The Company has adopted the liquidation basis of accounting as of September 30, 1995. Therefore, the Company's investments in subsidiaries are stated at their estimated realizable value and the subsidiaries' assets and liabilities are no longer consolidated with the Company's financial statements. This basis of accounting is considered appropriate when the Company has adopted a Plan of Complete Liquidation and Dissolution (the "Plan") and liquidation appears imminent, the Company is no longer viewed as a going concern and the net realizable value of the Company's assets are reasonably determinable. Under this basis of accounting, assets and liabilities are stated at their estimated net realizable value and estimated costs of liquidating the Company are provided to the extent they are reasonably determinable. The Plan provides for the liquidation of all of the Company's assets. In connection with the adoption of the liquidation basis of accounting, the Company has accrued what management believes are reasonable estimates of realizable value and costs to liquidate its remaining assets. The actual realizable value and costs may differ significantly depending on a number of factors, including the length of time it takes to dispose of and the amount received for the remaining assets and the holding costs associated therewith. Estimated costs to liquidate are reflected in the Statement of Net Assets as "Reserve for Remaining Lease Obligations" and "Reserve for Estimated Costs of Operation, Liquidation and Dissolution." - 3 - 4 The Condensed Consolidated Statements of Operations and of Cash Flows for 1994 were prepared on a going concern basis of accounting which contemplated the realization of assets and the satisfaction of liabilities in the normal course of business. The Condensed Financial Statements for 1995 were prepared on the liquidation basis of accounting. The effects of adopting the Plan are explained in Note 2 - Plan of Complete Liquidation and Dissolution. The changes in net assets in liquidation for the three and nine months ended September 30, 1995 are not necessarily indicative of results to be expected for the entire year ending December 31, 1995. See Item 2 - "Management's Discussion and Analysis of Financial Condition and Results of Operations." - 4 - 5 BEVERLY HILLS BANCORP AND SUBSIDIARIES CONDENSED STATEMENT OF NET ASSETS (UNAUDITED) SEPTEMBER 30, 1995
ASSETS LIQUIDATION BASIS ----------------- Cash and Cash Equivalents $ 610,000 Investment in Tigera Group, Inc. 4,266,000 Investments in Subsidiaries 532,000 Notes Receivable - Officer/Shareholder 250,000 Notes Receivable - Sixty Eight Thousand, Inc. 200,000 Investment in Comprehensive Holdings Corporation, S.A. 200,000 ---------- Total Assets 6,058,000 ---------- LIABILITIES Accounts Payable and Accrued Liabilities 84,000 Reserve for Remaining Lease Obligations 80,000 Reserve for Estimated Costs of Operation, Liquidation and Dissolution 272,000 ---------- Total Liabilities 436,000 ---------- Net Assets in Liquidation $5,622,000 ==========
See Accompanying Notes to Condensed Financial Statements. - 5 - 6 BEVERLY HILLS BANCORP AND SUBSIDIARIES CONDENSED STATEMENT OF CHANGES IN NET ASSETS IN LIQUIDATION (1995) AND CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (1994) (UNAUDITED)
FOR THE THREE MONTHS ENDED SEPTEMBER 30, ------------------------------------------ 1995 1994 ------------------- --------------------- (Liquidation Basis) (Going Concern Basis) Income: Interest, Dividend and Other $ 33,000 $ 16,000 Equity in Loss of Investment (2,000) (19,000) Forfeited Deposit 100,000 -- ----------- ---------- Total Income/(Loss) 131,000 (3,000) ----------- ---------- Operating Expenses: General and Administrative 94,000 93,000 Amortization of Excess Cost of Investment 44,000 44,000 ----------- ---------- Total Expenses 138,000 137,000 ----------- ---------- Loss Before Minority Interests and Effects of Liquidation (7,000) (140,000) Minority Interests in Subsidiaries' Losses 1,000 2,000 ----------- ---------- Loss Before Effects of Liquidation (6,000) (138,000) Effects of Liquidation 643,000 --- ----------- ---------- Net Income/(Loss) $ 637,000 $ (138,000) =========== ========== Net Income/(Loss) Per Share $.53 $(.12) =========== ========== Weighted Average Number of Common Shares Outstanding 1,194,432 1,194,432 =========== ==========
See Accompanying Notes to Condensed Financial Statements. - 6 - 7 BEVERLY HILLS BANCORP AND SUBSIDIARIES CONDENSED STATEMENT OF CHANGES IN NET ASSETS IN LIQUIDATION (1995) AND CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (1994) (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, -------------------------------------------- 1995 1994 ------------------- --------------------- (Liquidation Basis) (Going Concern Basis) Income: Interest, Dividend and Other $ 130,000 $ 90,000 Equity in Loss of Investment (24,000) (96,000) Forfeited Deposit 100,000 -- ----------- ----------- Total Income/(Loss) 206,000 (6,000) ----------- ----------- Operating Expenses: General and Administrative 309,000 276,000 Amortization of Excess Cost of Investment 131,000 131,000 ----------- ----------- Total Expenses 440,000 407,000 ----------- ----------- Loss Before Minority Interests and Effects of Liquidation (234,000) (413,000) Minority Interests in Subsidiaries' Losses 3,000 10,000 ----------- ----------- Loss Before Effects of Liquidation (231,000) (403,000) Effects of Liquidation 643,000 -- ----------- ----------- Net Income/(Loss) $ 412,000 $ (403,000) =========== =========== Net Income/(Loss) Per Share $ .35 $ (.34) ===== ====== Weighted Average Number of Common Shares Outstanding 1,194,432 1,194,432 ========= =========
See Accompanying Notes to Condensed Financial Statements. - 7 - 8 BEVERLY HILLS BANCORP AND SUBSIDIARIES CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, -------------------------------------------- 1995 1994 ------------------- --------------------- (Liquidation Basis) (Going Concern Basis) (Consolidated) Cash Flows from Operating Activities: Net Income/(Loss) $ 412,000 $ (403,000) Adjustments to Reconcile Net Income/(Loss) to Net Cash Used in Operating Activities: Equity in Loss of Investment 24,000 96,000 Amortization of Excess Cost of Investment 131,000 131,000 Minority Interests in Subsidiaries' Losses (3,000) (10,000) Effects of Liquidation (643,000) -- Change in Assets and Liabilities: Change in Presentation of Minority Interests in Subsidiaries (1,039,000) -- Increase/(Decrease) in Accounts Payable and Accrued Liabilities (16,000) 2,000 ------------ ---------- Net Cash Used in Operating Activities and Net Decrease in Cash and Cash Equivalents (1,134,000) (184,000) Cash and Cash Equivalents at Beginning of Period 1,744,000 1,958,000 ------------ ---------- Cash and Cash Equivalents at End of Period $ 610,000 $1,774,000 ============ ==========
See Accompanying Notes to Condensed Financial Statements. - 8 - 9 BEVERLY HILLS BANCORP AND SUBSIDIARIES NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) SEPTEMBER 30, 1995 Note 1- Basis of Presentation: The Condensed Financial Statements included herein have been prepared by Beverly Hills Bancorp (the "Company"), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes the disclosures which are made are adequate to make the information presented not misleading. Further, the Condensed Financial Statements have been prepared in accordance with generally accepted accounting principles for interim financial information, the instructions to Form 10-QSB and Regulation S-B (including Item 310(b) thereof) and reflect, in the opinion of management, all adjustments necessary to present fairly the net assets, changes in net assets in liquidation and results of operations as of and for the periods indicated. It is suggested that these Condensed Financial Statements be read in conjunction with the Consolidated Financial Statements and the Notes thereto for the year ended December 31, 1994, included in the Beverly Hills Bancorp Form 10-KSB Annual Report to the Securities and Exchange Commission. The Company has adopted the liquidation basis of accounting as of September 30, 1995. Therefore, the Company's investments in subsidiaries are stated at their estimated realizable value and the subsidiaries' assets and liabilities are no longer consolidated with the Company's financial statements. This basis of accounting is considered appropriate when the Company has adopted a Plan of Complete Liquidation and Dissolution (the "Plan") and liquidation appears imminent, the Company is no longer viewed as a going concern and the net realizable value of the Company's assets are reasonably determinable. Under this basis of accounting, assets and liabilities are stated at their estimated net realizable value and estimated costs of liquidating the Company are provided to the extent they are reasonably determinable. The Plan provides for the liquidation of all of the Company's assets. In connection with the adoption of the liquidation basis of accounting, the Company has accrued what management believes are reasonable estimates of realizable value and costs to liquidate its remaining assets. The actual realizable value and costs may differ significantly depending on a number of factors, including the length of time it takes to dispose of and the amount received for the remaining assets and the holding costs associated therewith. Estimated costs to liquidate are reflected in the Statement of Net Assets as "Reserve for Remaining Lease Obligations" and "Reserve for Estimated Costs of Operation, Liquidation and Dissolution." - 9 - 10 The Condensed Consolidated Statements of Operations and of Cash Flows for 1994 were prepared on a going concern basis of accounting which contemplated the realization of assets and the satisfaction of liabilities in the normal course of business. The Condensed Financial Statements for 1995 were prepared on the liquidation basis of accounting. The effects of adopting the Plan are explained in Note 2 - Plan of Complete Liquidation and Dissolution. Note 2- Plan of Complete Liquidation and Dissolution On July 10, 1995, the Company, its principal shareholder, Albert M. Zlotnick, and five of the six remaining directors had reached an agreement with A-Mark Financial Corporation ("A-Mark") under which A-Mark was to acquire all the issued and outstanding shares of the Company. The Company received a deposit of $100,000 from A-Mark, which deposit was to be forfeited if the tender offer with the terms set forth was not made or commenced within the time period stated. On September 6, 1995, A-Mark stated that it would not go through with the purchase and, thereby, forfeited its deposit. Since the agreement between the Company and A-Mark was not consummated, the Company is operating in accordance with a Plan of Complete Liquidation and Dissolution which was adopted by the Company's shareholders at their adjourned annual meeting on July 10, 1995. Effects of Liquidation: The net adjustment at September 30, 1995 required to convert from the going concern (historical cost) basis to the liquidation basis of accounting was an increase in the carrying value of net assets of $643,000 which was included in the Condensed Statement of Net Assets and of Changes in Net Assets. This increase is a result of recording estimated realizable values and costs, as follows: 1. Increase in valuation of Investment in Tigera Group, Inc. ("Tigera") to estimated realizable value of $.90 per share $ 995,000 2. Reserve for Remaining Lease Obligations (80,000) 3. Reserve for Estimated Costs of Operation, Liquidation and Dissolution (272,000) ----------- Effects of Liquidation $ 643,000 ===========
The increase in valuation of the Tigera shares is based on the sale of such shares, as discussed in Note 7 - Subsequent Event. - 10 - 11 Note 3- Net Income/(Loss) per Share: Net income/(loss) per share is based on the weighted average number of common shares outstanding during each period. Note 4- Investments in Subsidiaries: As stated, the Company has adopted the liquidation basis of accounting. Therefore, the Company's investments in subsidiaries are stated at their estimated realizable value and the subsidiaries' assets and liabilities are no longer consolidated with the Company's financial statements. Note 5- Notes Receivable - Sixty Eight Thousand, Inc.: During March 1995, Sixty Eight Thousand, Inc. paid the Company the interest due for the year ended December 31, 1994 and for the three months ended March 31, 1995. These amounts, $38,500 and $9,625, respectively, have been included in interest income for the three months ended March 31, 1995. Additionally, the maturity date of these notes was extended to December 31, 1995 and the Company received an escrow payment for interest from April 1, 1995 to December 31, 1995, of which $9,625 has been included in interest income for each of the three months ended June 30, 1995 and September 30, 1995. Note 6- Income Taxes: The Company files consolidated federal income and combined California franchise tax returns on a cash basis. As of December 31, 1994, the Company has net operating loss carryforwards of approximately $5,000,000 which are available to offset future taxable income expiring from 1997 through 2009. Examination by taxing authorities of open tax years could result in tax assessments and material changes to the net operating loss carryforwards. As a result of its reorganization, the Company is required to report income for financial statement purposes as if no tax loss carryforward existed. However, since the Company's tax status is not affected by the reorganization, it is entitled to a reduction of federal income taxes, except for personal holding taxes, arising from the utilization of its net operating losses incurred prior to reorganization. Such reduction is credited to capital surplus, when realized, rather than reflected in the income statement. Federal statutes place significant restrictions on the utilization of net operating loss deductions. Under present tax law, there is substantial risk that net operating loss carryforwards will be reduced if certain conditions are present in connection with an acquisition, merger or reorganization. As of December 31, 1994, the deferred tax assets related to the net operating loss carryforwards totaling approximately $2,000,000 have been fully offset by valuation allowances, since the utilization of such amounts is uncertain. - 11 - 12 Due to the Plan of Complete Liquidation and Dissolution, it is anticipated that the Company will not fully utilize these net operating loss carryforwards. Note 7- Subsequent Event: On November 8, 1995, the Company sold to Forschner Enterprises, Inc. ("Forschner") its holding of Tigera shares owned directly and indirectly for $.90 per share, or a total sales price of $4,266,000. Forschner also purchased or agreed to purchase certain shares of Tigera owned by Albert M. Zlotnick (1,731,000 shares) and Michael S. Berlin (248,250 shares) at $.90 per share. Tigera retained Albert M. Zlotnick as a consultant for a period of two years at a rate of $180,000 per year and Forschner agreed to retain him for a third year, under certain circumstances. Additionally, Forschner has agreed, if requested, to either arrange for the sale in the open market or purchase themselves within five months of the closing date, any shares of Tigera owned by Directors of the Company who will be resigning as Directors of Tigera and by an individual affiliated with them (1,638,276 shares in total) at $.90 per share. The Board also approved, as part of the Plan of Complete Liquidation and Dissolution, a payment of $3.50 per share by January 31, 1996. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations September 30, 1995 General The Securities and Exchange Commission, by letter dated June 29, 1993, raised the question of whether the Company "...may fall within the definition of an investment company under Section 3(a)(1) and 3(a)(3) of the Investment Company Act of 1940." After subsequent communication between the staff of the Securities and Exchange Commission and the Company, special counsel for the Company, in a letter dated December 6, 1993, informed the Securities and Exchange Commission that if a "letter of intent" had not been entered into within 90 days from the date thereof, the Company "...will take the necessary steps promptly to effect a liquidation." Though the Company was actively seeking a merger candidate, at a meeting of the Board of Directors of the Company held on February 11, 1994, a Committee of three directors was appointed to prepare a report to be submitted to the Board at a meeting to be held on March 24, 1994, "...detailing the manner and method to be used to liquidate the Company, with specific recommendations with respect to each asset of the Company so as to maximize shareholder value." On March 24, 1994 and April 28, 1994, the Company's Board of Directors reviewed a report of the Committee and authorized the Committee to continue to pursue its detailed recommendations with respect to this matter. - 12 - 13 On January 20, 1995, the Board of Directors called for a Shareholders' meeting to approve, among other things, the sale by the Company of its direct and indirect holdings of the common stock of Tigera Group, Inc. ("Tigera") to Forschner Enterprises, Inc. ("Forschner") for $4,076,400 and to adopt a Plan of Complete Liquidation and Dissolution ("Plan"). The meeting was held on June 1, 1995. On May 31, 1995, the Company received a written offer from Qualis Care L.P. ("Qualis") in which Qualis would either purchase the Tigera shares owned directly or indirectly by the Company for $.90 per share or elect by June 23, 1995 to tender for certain shares of the Company itself. On June 1, 1995, the shareholders voted to reject the offer from Forschner and to adjourn until July 10, 1995 the vote on the Plan. On June 29, 1995, the Company issued a press release stating that Qualis had not exercised its option to tender and, on July 5, 1995, it issued a further press release stating that Qualis had failed to purchase the Tigera shares owned by the Company. On July 7, 1995, the Company received a written offer from Forschner in which Forschner offered to purchase the Tigera shares owned directly and indirectly by the Company for $.90 per share, which offer was to expire on July 10, 1995, following the adjourned meeting of the Company shareholders. The offer contained certain conditions, including the adoption by shareholders of the Plan. On July 10, 1995, the Company, its principal shareholder, Albert M. Zlotnick, and five of the six remaining directors had reached an agreement with A-Mark Financial Corporation ("A-Mark") under which A-Mark was to acquire all the issued and outstanding shares of the Company. The Company received a deposit of $100,000 from A-Mark, which deposit was to be forfeited if the tender offer with the terms set forth was not made or commenced within the time period stated. On September 6, 1995, A-Mark stated that it would not go through with the purchase and, thereby, forfeited its deposit. Since the agreement between the Company and A-Mark was not consummated, the Company is operating in accordance with a Plan of Complete Liquidation and Dissolution which was adopted by the Company's shareholders at their adjourned annual meeting on July 10, 1995. Effects of Liquidation: The net adjustment at September 30, 1995 required to convert from the going concern (historical cost) basis to the liquidation basis of accounting was an increase in the carrying value of net assets of $643,000 which was included in the Condensed Statement of Net Assets and of Changes in Net Assets. This increase is a result of recording estimated realizable values and costs, as follows: - 13 - 14 1. Increase in valuation of Investment in Tigera Group, Inc. ("Tigera") to estimated realizable value of $.90 per share $ 995,000 2. Reserve for Remaining Lease Obligation (80,000) 3. Reserve for Estimated Costs of Operations, Liquidation and Dissolution (272,000) ----------- Effects of Liquidation $ 643,000 ===========
The increase in valuation of the Tigera shares is based on the sale of such shares, as discussed herein. On November 8, 1995, the Company sold to Forschner Enterprises, Inc. ("Forschner") its holding of Tigera shares owned directly and indirectly for $.90 per share, or a total sales price of $4,266,000. Forschner also purchased or agreed to purchase certain shares of Tigera owned by Albert M. Zlotnick (1,731,000 shares) and Michael S. Berlin (248,250 shares) at $.90 per share. Tigera retained Albert M. Zlotnick as a consultant for a period of two years at a rate of $180,000 per year and Forschner agreed to retain him for a third year under certain circumstances. Additionally, Forschner has agreed, if requested, to either arrange for the sale in the open market or purchase themselves within five months of the closing date, any shares of Tigera owned by Directors of the Company who will be resigning as Directors of Tigera and by an individual affiliated with them (1,638,276 shares in total) at $.90 per share. The Board also approved, as part of the Plan of Complete Liquidation and Dissolution, a payment of $3.50 per share by January 31, 1996. Results of Operations Interest, dividend and other income were $33,000 and $130,000, respectively, for the three and nine months ended September 30, 1995, as compared to $16,000 and $90,000, respectively for the three and nine months ended September 30, 1994. The increase is primarily due to the receipt of an interest payment of $67,375 in 1995 from Sixty Eight Thousand, Inc. for the interest due on the notes receivable for 1994 and the first, second and third quarters of 1995, as compared to the receipt of an interest payment of approximately $32,000 in 1994 for the interest due on the notes receivable for 1993. The equity in loss of investment and amortization of excess cost of investment relate to the Company's purchase in December 1992 of 22.5% of the outstanding shares of Tigera. The principal activity of Tigera consists of seeking and evaluating candidates for acquisition. Tigera's net losses were $7,000 and $106,000, respectively, for the three and nine months ended September 30, 1995, as compared to $87,000 and $427,000, respectively, for the three and nine months ended September 30, 1994. - 14 - 15 General and administrative expenses increased to $94,000 and $309,000, respectively, for the three and nine months ended September 30, 1995, from $93,000 and $276,000, respectively, for the three and nine months ended September 30, 1994. The increase is primarily attributable to increased professional fees in connection with the sale of the Tigera shares and Plan of Complete Liquidation and Dissolution and the holding of the Annual Meeting of Shareholders. The Company files consolidated federal income and combined California franchise tax returns on a cash basis. As of December 31, 1994, the Company has net operating loss carryforwards of approximately $5,000,000 which are available to offset future taxable income expiring from 1997 through 2009. Examination by taxing authorities of open tax years could result in tax assessments and material changes to the net operating loss carryforwards. As a result of its reorganization, the Company is required to report income for financial statement purposes as if no tax loss carryforward existed. However, since the Company's tax status is not affected by the reorganization, it is entitled to a reduction of federal income taxes, except for personal holding taxes, arising from the utilization of its net operating losses incurred prior to reorganization. Such reduction is credited to capital surplus, when realized, rather than reflected in the income statement. Federal statutes place significant restrictions on the utilization of net operating loss deductions. Under present tax law, there is substantial risk that net operating loss carryforwards will be reduced if certain conditions are present in connection with an acquisition, merger or reorganization. As of December 31, 1994, the deferred tax assets related to the net operating loss carryforwards totaling approximately $2,000,000 have been fully offset by valuation allowances, since the utilization of such amounts is uncertain. Due to the Plan of Complete Liquidation and Dissolution, it is anticipated that the Company will not fully utilize these net operating loss carryforwards. Liquidity and Capital Resources Cash and cash equivalents decreased to $610,000 as of September 30, 1995, compared with $1,744,000 as of December 31, 1994. The decrease is attributable to expenditures for general and administrative expenses and the restatement of the investments in subsidiaries. As of September 30, 1995, the Company's principal source of funds consisted of $610,000 in cash and cash equivalents. Near-term capital requirements for operating expenses and payment of liabilities are expected to be financed through cash flow from interest income and existing cash balances. - 15 - 16 PART II. Other Information Item 1. Legal Proceedings None. Item 4. Submission of Matters to a Vote of Security Holders (a) The Company held its Annual Meeting of Shareholders ("Annual Meeting") on June 1, 1995. At such Annual Meeting, the following matters were voted upon: (1) Approval of sale by the Company of its direct and indirect holdings of the common stock of Tigera Group, Inc. to Forschner Enterprises, Inc. for the sum of $4,076,400: Votes For 150,112 Votes Against 804,944 Abstentions 3,147
(2) Adjourn the Vote on the Adoption of the Plan of Complete Liquidation and Dissolution until July 10, 1995: Votes For 1,011,378 Votes Against 200
(3) Election of seven directors to serve until the sooner of (i) the filing of a Certificate of Dissolution with the State of California, or (ii) until the next annual meeting of shareholders or (iii) until their respective successors are duly elected and qualified.
NUMBER OF VOTES ----------------------- FOR ABSTAIN --------- ------- Michael S. Berlin 989,102 200 Philip R. Hankin 989,102 200 Irving I. Lassoff 989,102 200 James A. Martin III 989,102 200 Daniel A. Rivetti 1,009,153 200 Albert M. Zlotnick 989,102 200 David B. Zlotnick 989,102 200
(4) Ratification of the appointment of BDO Seidman as independent certified public accountants for the year ending December 31, 1995: Votes For 1,007,858 Votes Against 1,769 Abstentions 1,911
- 16 - 17 (b) The Company reconvened its Annual Meeting on July 10, 1995. On that date, the following matters were voted upon: (1) Reconsider Proposal No. 1 from the Annual Meeting held on June 1, 1995, relating to the offer by Forschner Enterprises, Inc. to purchase the Company's direct and indirect holdings of the common stock of Tigera Group, Inc. Votes For 1,010,198 No other votes were cast. (2) Approval of sale by the Company of its direct and indirect holdings of the common stock of Tigera Group, Inc. to Forschner Enterprises, Inc. for the increased offer of $4,266,000. Votes Against 1,010,198 No other votes were cast. (3) To approve and adopt a Plan of Complete Liquidation and Dissolution effective upon the failure to conclude the offer by A-Mark Financial Corporation ("A-Mark") to acquire all of the issued and outstanding shares of the Company, within the time set forth in the agreement with A-Mark. Votes For 1,010,198 No other votes were cast. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits - None. (b) Report on Form 8-K: Form 8-K relating to Item 5, Other Events, was filed on July 14, 1995, and is incorporated herein by reference. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. BEVERLY HILLS BANCORP (Registrant) By: /s/ Albert M. Zlotnick ---------------------------------- Albert M. Zlotnick Chairman of the Board, President and Chief Executive, Financial Dated: November 8, 1995 and Accounting Officer - 17 - 18 EXHIBIT INDEX Exhibit 27 - Financial Data Schedule EX-27 2 FINANCIAL DATA SCHEDULE
5 9-MOS DEC-31-1995 JAN-01-1995 SEP-30-1995 610,000 0 450,000 0 0 0 0 0 6,058,000 436,000 0 0 0 0 0 5,622,000 0 0 0 0 440,000 0 0 0 0 (231,000) 0 0 643,000 412,000 5.35 0
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