-----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, Dfzla5P8fI2io0i6Y/G2owCmUFCb7/C63j5ZICdGT383MDhNziohgiYJnmtYvpYI 2U/VaMvbiwaOQZn2QT7ZKA== 0000950150-97-001315.txt : 19970918 0000950150-97-001315.hdr.sgml : 19970918 ACCESSION NUMBER: 0000950150-97-001315 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970902 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19970917 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MEGO FINANCIAL CORP CENTRAL INDEX KEY: 0000736035 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE DEALERS (FOR THEIR OWN ACCOUNT) [6532] IRS NUMBER: 135629885 STATE OF INCORPORATION: NY FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-08645 FILM NUMBER: 97681781 BUSINESS ADDRESS: STREET 1: 4310 PARADISE RD CITY: LAS VEGAS STATE: NV ZIP: 89109 BUSINESS PHONE: 7027373700 MAIL ADDRESS: STREET 1: 4310 PARADISE RD CITY: LAS VEGAS STATE: NV ZIP: 89109 FORMER COMPANY: FORMER CONFORMED NAME: MEGO CORP DATE OF NAME CHANGE: 19920703 8-K 1 FORM 8-K DATED SEPTEMBER 2, 1997 1 =============================================================================== SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (date of earliest event reported) September 2, 1997 ----------------- MEGO FINANCIAL CORP. ----------------------------------------------------------- (Exact name of registrant as specified in its charter) New York ----------------------------------------------------------- (State or other jurisdiction of incorporation) 1-8645 13-5629885 ------------------------------ ------------------------------------ (Commission File Number) (I.R.S. Employer Identification No.) 4310 Paradise Road, Las Vegas, Nevada 89109 ----------------------------------------------------------- (Address of principal executive offices) (Zip Code) (702) 737-3700 ----------------------------------------------------------- (Registrant's telephone number, including area code) Not applicable ----------------------------------------------------------- (Former name or former address, if change since last report) =============================================================================== 2 ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS As previously reported, on August 6, 1997, the Board of Directors of the registrant, Mego Financial Corp. (the "Company"), unanimously approved a tax-free distribution (the "Distribution") to the Company's shareholders of record on August 27, 1997 (the "Record Date"), of all of the Company's 10 million shares of common stock of its then 81.3%-owned subsidiary, Mego Mortgage Corporation ("Mego Mortgage"). The decision was made following receipt of a favorable ruling from the Internal Revenue Service establishing the tax-free status of the Distribution. The Distribution was consummated effective as of September 2, 1997 (the "Distribution Date"), and resulted in the Company's shareholders of record on the Record Date, receiving 0.476 shares of Mego Mortgage common stock for each share of Mego Financial common stock owned on the Record Date. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS (a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED Not applicable. (b) PRO FORMA FINANCIAL INFORMATION The following unaudited pro forma condensed consolidated financial statements are filed with this report: Pro Forma Condensed Consolidated Statement of Financial Condition Page F-1 Pro Forma Condensed Consolidated Statements of Operations: Nine Months ended May 31, 1997 Page F-2 Year Ended August 31, 1996 Page F-3 The Pro Forma Condensed Consolidated Statement of Financial Condition of the Company as of May 31, 1997 reflects the financial position of the Company after giving effect to the Distribution of the stock of Mego Mortgage discussed in Item 2 and assumes the Distribution took place on May 31, 1997. The Pro Forma Condensed Consolidated Statements of Operations for the fiscal year ended August 31, 1996 and the nine months ended May 31, 1997 assume that the Distribution occurred on September 1, 1995, and are based on the results of operations of the Company for the year ended August 31, 1996 and the nine months ended May 31, 1997. The unaudited pro forma condensed consolidated financial statements have been prepared by the Company based upon assumptions deemed proper by it. The unaudited pro forma condensed consolidated financial statements presented herein are shown for illustrative purposes only and are not necessarily indicative of the future financial position or future results of operations of the Company, or of the financial position or results of operations of the Company that would have actually occurred had the transaction been in effect as of the dates or for the periods presented. In addition, it should be noted that the Company's actual financial statements will reflect the Distribution only from September 2, 1997, the Distribution Date. The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the historical financial statements and related notes of the Company. Certain reclassifications have been made to these financial statements to conform to the current presentation and the historical financial statements are subject to year end audit adjustments. (c) EXHIBITS None -2- 3 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. MEGO FINANCIAL CORP. Dated: September 17, 1997 By: /s/ Jerome J. Cohen -------------------------------- Jerome J. Cohen, President -3- 4 MEGO FINANCIAL CORP. AND SUBSIDIARIES PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (thousands of dollars, except per share amounts) (unaudited)
May 31, 1997 -------------------------------------------------- HISTORICAL LESS: MFC(a) MMC(b) OTHER PRO FORMA ---------- ---------- --------- --------- ASSETS Cash, cash equivalents and restricted cash $ 16,220 $ 10,021 $ - $ 6,199 Notes receivable, net of allowance for cancellations, valuation discounts, and credit losses 64,407 24,913 - 39,494 Mortgage related securities, at fair value 94,298 91,348 - 2,950 Mortgage servicing rights 7,751 7,751 - - Timeshare interests held for sale 34,604 - - 34,604 Land and improvements inventory 2,218 - - 2,218 Property and equipment, net of accumulated depreciation 25,295 2,065 - 23,230 Due from MMC - - 6,571 (d) 6,571 Other assets 20,261 6,856 - 13,405 ---------- ---------- --------- --------- TOTAL ASSETS $ 265,054 $ 142,954 $ 6,571 $ 128,671 ========== ========== ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Notes and contracts payable $ 99,027 $ 32,837 $ - $ 66,190 Accounts payable and accrued liabilities 26,477 9,971 - 16,506 Future estimated contingency for notes receivable sold with recourse 15,605 4,893 - 10,712 Due to MFC from MMC - 5,949 5,949 (d) - Due to PEC from MMC(c) 622 622 (d) - Other liabilities 19,212 201 - 19,011 ---------- ---------- --------- --------- Total liabilities before minority interest, subordinated debt and redeemable preferred stock 160,321 54,473 6,571 112,419 ---------- ---------- --------- --------- Minority interest of consolidated subsidiary 9,066 - (9,066)(e) - ---------- ---------- --------- --------- Subordinated debt 48,269 40,000 - 8,269 ---------- ---------- --------- --------- Redeemable preferred stock, Series A, 12% cumulative preferred stock, $.01 par value, $10 redemption value, 0 shares issued and outstanding - - - - ---------- ---------- --------- --------- Total stockholders' equity 47,398 48,481 9,066 (e) 7,983 ---------- ---------- --------- --------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 265,054 $ 142,954 $ 6,571 $ 128,671 ========== ========== ========= =========
(a) MFC is defined as Mego Financial Corp. and Subsidiaries. (b) MMC is defined as Mego Mortgage Corporation. (c) PEC is defined as Preferred Equities Corporation, a wholly-owned subsidiary of MFC. (d) At May 31, 1997, MMC owed MFC $5,949 and owed PEC $622, which is not included in the historical Statements of Financial Condition of MFC as it was eliminated in consolidation. The adjustment in the "Other" column reflects the receivable to MFC and PEC in the amount to be paid by MMC, on a pro forma basis. (e) The Minority interest of consolidated subsidiary of $9,066 is adjusted in the "Other" column to eliminate minority interest after giving effect to the spin-off of MMC. F-1 5 MEGO FINANCIAL CORP. AND SUBSIDIARIES PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (thousands of dollars, except per share amounts) (unaudited)
NINE MONTHS ENDED MAY 31, 1997 -------------------------------------------------------- HISTORICAL LESS: MFC(a) MMC(b) OTHER PRO FORMA ---------- ---------- --------- --------- REVENUES: Timeshare interest sales, net $ 23,595 $ - $ - $ 23,595 Land sales, net 12,510 - - 12,510 Gain on sale of notes receivable 30,044 28,651 - 1,393 Net unrealized gain on mortgage related securities 5,213 5,213 - - Interest income 11,280 5,940 - 5,340 Interest expense - MMC - (3,922) (3,922)(d) - Financial income 2,799 1,924 1,180 (c) 2,055 Other 4,920 - - 4,920 ---------- ---------- --------- ---------- Total revenues 90,361 37,806 (2,742) 49,813 ---------- ---------- --------- ---------- COSTS AND EXPENSES: Direct cost of sales of timeshare interests and land and incidental operations 7,119 - - 7,119 Commissions and selling 24,952 - - 24,952 Interest expense 10,493 220 (3,922)(d) 6,351 Other expenses 6,890 5,488 - 1,402 General and administrative 28,119 14,566 - 13,553 Servicing fees paid to PEC from MMC(c) - 1,180 1,180 (c) - ---------- ---------- --------- ---------- Total costs and expenses 77,573 21,454 (2,742) 53,377 ---------- ---------- --------- ---------- INCOME (LOSS) BEFORE INCOME TAXES AND MINORITY INTEREST 12,788 16,352 - (3,564) INCOME TAXES (BENEFIT) 1,221 6,230 - (5,009) MINORITY INTEREST 1,493 - (1,493)(f) - ---------- ---------- --------- ---------- NET INCOME APPLICABLE TO COMMON STOCK $ 10,074 $ 10,122 $ 1,493 $ 1,445 ========== ========== ========= ========== EARNINGS PER COMMON SHARE: Primary: Net income $ 0.52 $ 0.07 ========== ========== Weighted-average number of common shares and common share equivalents outstanding 19,497,659 19,497,659 ========== ========== Fully Diluted: Net income $ 0.52 $ 0.07 ========== ========== Weighted-average number of common shares and common share equivalents outstanding 19,497,659 19,497,659 ========== ==========
(a) MFC is defined as Mego Financial Corp. and Subsidiaries. (b) MMC is defined as Mego Mortgage Corporation. (c) PEC is defined as Preferred Equities Corporation. (d) Interest expense related to MMC's warehouse debt is included in Interest expense on MFC's Consolidated Statements of Operations while on MMC's Statements of Operations the Interest expense is netted with Interest income. The Interest expense relating to MMC of $3,922 is subtracted from the Interest expense line in the REVENUES section and $3,922 is subtracted from the Interest expense line in the COST AND EXPENSES section for pro forma results. (e) Expenses incurred by MMC for services performed by PEC have been eliminated during consolidation and need to be added back for pro forma results. (f) The minority interest relating to MMC would not exist on a pro forma basis after giving effect to the spin-off. F-2 6 MEGO FINANCIAL CORP. AND SUBSIDIARIES PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (thousands of dollars, except per share amounts) (unaudited)
YEAR ENDED AUGUST 31, 1996 -------------------------------------------------------- HISTORICAL LESS: MFC(a) MMC(b) OTHER PRO FORMA ---------- ---------- --------- --------- REVENUES: Timeshare interest sales, net $ 27,778 $ - $ - $ 27,778 Land sales, net 17,968 - - 17,968 Gain on sale of notes receivable 17,655 16,539 - 1,116 Net unrealized gain on mortgage related securities 2,697 2,697 - - Interest income 8,698 2,104 - 6,594 Interest expense - MMC - (1,116) (1,116)(d) - Financial income 3,892 3,348 709 (e) 1,253 Other 6,652 - - 6,652 ---------- ---------- --------- ---------- Total revenues 85,340 23,572 (407) 61,361 ---------- ---------- --------- ---------- COSTS AND EXPENSES: Direct cost of timeshare interests and land sales and incidental operations 8,099 - - 8,099 Commissions and selling 30,351 - - 30,351 Interest expense 8,597 167 (1,116)(d) 7,314 Other expenses 1,975 449 - 1,526 General and administrative 28,300 11,092 - 17,208 Servicing fees paid to PEC from MMC(c) - 709 709 (c) - ---------- ---------- --------- ---------- Total costs and expenses 77,322 12,417 (407) 64,498 ---------- ---------- --------- ---------- INCOME (LOSS) BEFORE INCOME TAXES 8,018 11,155 - (3,137) INCOME TAXES (BENEFIT) 3,167 4,235 - (1,068) ---------- ---------- --------- ---------- NET INCOME (LOSS) 4,851 6,920 - (2,069) CUMULATIVE PREFERRED STOCK DIVIDENDS 240 - - 240 ---------- ---------- --------- ---------- NET INCOME (LOSS) APPLICABLE TO COMMON STOCK $ 4,611 $ 6,920 $ - $ (2,309) ========== ========== ========= ========== EARNINGS (LOSS) PER COMMON SHARE: Primary: Net income (loss) $ 0.24 $ (0.12) ========== ========== Weighted-average number of common shares and common share equivalents outstanding 19,087,387 19,087,387 ========== ========== Fully Diluted: Net income (loss) $ 0.24 $ (0.12) ========== ========== Weighted-average number of common shares and common share equivalents outstanding 19,087,387 19,087,387 ========== ==========
(a) MFC is defined as Mego Financial Corp. and Subsidiaries. (b) MMC is defined as Mego Mortgage Corporation. (c) PEC is defined as Preferred Equities Corporation. (d) Interest expense related to MMC's warehouse debt is included in Interest expense on MFC's Consolidated Statements of Operations while on MMC's Statements of Operations the Interest expense is netted with Interest income. The Interest expense relating to MMC of $1,116 is subtracted from the Interest expense line in the REVENUES section and $1,116 is subtracted from the Interest expense line in the COST AND EXPENSES section for pro forma results. (e) Expenses incurred by MMC for services performed by PEC have been eliminated during consolidation and need to be added back for pro forma results. F-3 -----END PRIVACY-ENHANCED MESSAGE-----