-----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, OK+iVy9JchU0zYJuDH43udqE3VN+PPdEGcwr6bJAEgHcX4Rwou5AGaNx+ya6MG1M G6um16o4LOErnuIHRwlzSQ== 0000890566-97-001115.txt : 19970515 0000890566-97-001115.hdr.sgml : 19970515 ACCESSION NUMBER: 0000890566-97-001115 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970514 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: WESTMARK GROUP HOLDINGS INC CENTRAL INDEX KEY: 0000820771 STANDARD INDUSTRIAL CLASSIFICATION: MORTGAGE BANKERS & LOAN CORRESPONDENTS [6162] IRS NUMBER: 133784149 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-18945 FILM NUMBER: 97604316 BUSINESS ADDRESS: STREET 1: 355 N E FIFTH AVE STREET 2: STE 4 CITY: DELRAY BEACH STATE: FL ZIP: 33483 BUSINESS PHONE: 5612438010 MAIL ADDRESS: STREET 1: 355 N E FIFTH AVE STREET 2: STE 4 CITY: DELRAY BEACH STATE: FL ZIP: 33483 FORMER COMPANY: FORMER CONFORMED NAME: NETWORK FINANCIAL SERVICES INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: NETWORK REAL ESTATE OF CALIFORNIA INC DATE OF NAME CHANGE: 19920623 FORMER COMPANY: FORMER CONFORMED NAME: EAGLE VENTURE ACQUISITIONS INC DATE OF NAME CHANGE: 19900620 10QSB 1 FORM 10-QSB SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended Commission File MARCH 31, 1997 NO. 0-18945 WESTMARK GROUP HOLDINGS, INC. DELAWARE 84-1055077 (State of Incorporation) (I.R.S. Employment Identification No.) 355 N.E. Fifth Avenue Delray Beach, Florida 33483 (561)243-8010 (Address of Principal Executive Offices. Including Zip Code and Telephone Number) 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 [_] THE NUMBER OF SHARES OUTSTANDING OF THE ISSUER'S COMMON STOCK AS OF MARCH 31, 1997 WAS 5,508,498. [X] TRADITIONAL SMALL BUSINESS DISCLOSURE FORMAT. WESTMARK GROUP HOLDINGS, INC. FORM 10-QSB REPORT INDEX 10-QSB PART AND ITEM NO .................................................... PART I-FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS (UNAUDITED) Notes to consolidated financial statements ............. 3 Consolidated balance sheet as of March 31, 1997 and December 31, 1996 ......... 4,5 Consolidated statement of operations for the three months ended March 31, 1997 .................. 6 Consolidated statement of cash flows for the three months ended March 31, 1997 .................. 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ................ 8 PART II-OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS ...................................... 11 ITEM 2. CHANGES IN SECURITIES .................................. 12 ITEM 3. DEFAULTS UPON SENIOR SECURITIES ........................ 13 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS .... 13 ITEM 5. OTHER INFORMATION ...................................... 13 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K ....................... 13 SIGNATURES ........................................................... 14 NOTE 1: BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Item 310b of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended March 31, 1997 are not necessarily indicative of the results that may be expected for the year ended December 31, 1997. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's audited annual report on Form 10-KSB for the year ended December 31, 1996. Loan origination and gain on sale has been restated for March 31, 1996 to reflect the removal of interest income from this category to more definitively allow the reader to compare all sources of revenue. Correspondingly, the interest expense and professional fees have been restated for March 31, 1996 for the same purpose. NOTE 2: FIRST QUARTER FINANCING ACTIVITY The Company received $150,000 from PBF Land Co. ("PBF"). An additional amount of $112,586 was received from officers, directors and officers or directors of subsidiaries. All monies received were used for funding operating activities. The Company was successful in its bid to obtain additional lines of credit for funding loan activities by securing lines of credit, on favorable terms from Household Financial Services, Inc. ($5 million) and The Money Store ($5 million). The current line was reduced with Princap from $15 to $10 million, this reduction can be reinstated as the need arises. This increase and improvement of terms positions the Company to meet its budgetary targets for loan funding growth for 1997. Outstanding debts were reduced by the issuance of 424,900 Common Shares totaling $ 546,800. Additionally, 200,000 shares of series F Preferred shares were issued, in escrow, for the purpose of completing an acquisition of $1 million in additional Palm Beach County, Florida land. The acquisition requires several other criteria to be completed prior to its closure. PART I FINANCIAL INFORMATION WESTMARK GROUP HOLDINGS, INC. CONSOLIDATED BALANCE SHEET MAR 31, 1997 (UNAUDITED) Assets Current Assets: Cash and Equivalents ................................. $ 49,837 Accounts receivable, net of reserve .................. 43,445 Mortgage loans held for sale ......................... 4,779,369 Inventory ............................................ 39,413 Other current assets ................................. 338,265 ------------ Total Current Assets ................................. 5,250,329 Fixed Assets: Office Buildings ..................................... 162,965 Office Equipment ..................................... 74,026 Equipment ............................................ 305,577 Equipment Leased ..................................... 16,534 Leasehold Improvements ............................... 43,898 Less Accumulated Depreciation ........................ (317,275) ------------ Total Fixed Assets ................................... 285,725 Other Assets: Investment Real Estate ............................... 1,000,000 Investment Preferred Stock ........................... 2,000,000 Goodwill, net of amortization ........................ 1,701,363 Dividends Receivable ................................. 175,000 Deposits and other assets ............................ 6,167 ------------ Total Other Assets ................................... 4,882,530 TOTAL ASSETS .............................................. $ 10,418,584 ============ Westmark Group Holdings, Inc. CONSOLIDATED BALANCE SHEET MAR 31, 1997 (UNAUDITED) Liabilities and Stockholders' Equity Current Liabilities: Account Payable .......................................... $ 1,220,650 Warehouse line of credit ................................. 4,559,687 Interest payable ......................................... 307,692 Settlement liability ..................................... 407,560 Notes Payable Current .................................... 2,536,761 Payroll taxes payable .................................... 93,958 Dividends Payable ........................................ 206,000 Other current liabilities ................................ 343,913 ------------ Total Current Liabilities ................................ $ 9,676,221 Total Liabilities ............................................. $ 9,676,221 ============ Callable Preferred Series A 18750 shares outstanding ..... $ 75,000 Stockholders' Equity Preferred shares, $.001 par value, 10,000,000 shares authorized, 980,000 issued and outstanding ............. $ 3,250,000 Common stock, $.001 par value, 50,000,000 shares authorized, 5,508,498 issued and outstanding ........... 5,653 Additional paid in capital ............................... 25,742,362 Stock issued unearned/unpaid ............................. (1,299,882) Accumulated deficit ...................................... (27,030,770) ------------ Total Stockholders' Equity ................................ 667,363 Total Liabilities and Stockholders' Equity .................... $ 10,418,584 ============ Westmark Group Holdings, Inc. CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) THREE MONTHS ENDED MAR 31, MAR 31, 1997 1996 Revenues: Loan origination and gain on sale .......... $ 1,030,782 $ 598,321 Product Sales .............................. 24,640 Interest Income ............................ 230,739 74,581 Other income ............................... 19,114 4,170 ----------- ----------- Total Revenues ................................. 1,305,275 677,072 EXPENSES: Loan origination costs ..................... $ 45,395 $ 49,990 Cost of goods sold ......................... 7,067 Interest ................................... 201,174 323,234 General and administrative ................. 848,165 822,293 Professional fees .......................... 127,746 69,984 Marketing and advertising .................. 5,866 22,656 Non cash compensation ...................... 302,317 Servicing sale adjustment .................. (70,000) Goodwill amortization ...................... 51,681 24,729 Depreciation ............................... 17,846 23,812 ----------- ----------- Total Expenses ................................. $ 1,607,257 $ 1,266,698 Other Income (Expenses) Dividend income ............................ 35,000 ----------- ----------- Loss from continuing ops before income tax ..... (266,982) (589,626) Provision for income tax Net Income (Loss) .............................. $ (266,982) $ (589,626) =========== =========== NET LOSS PER SHARE ............................. $ (0.05) $ (0.21) WEIGHTED AVERAGE SHARES OUTSTANDING ............ 4,988,894 2,637,772 Westmark Group Holdings, Inc. Consolidated Statement of Cash Flows (UNAUDITED) THREE MONTHS ENDED MAR 31, MAR 31, 1997 1996 OPERATING ACTIVITIES Consolidated net loss ............................. $ (266,982) $ (589,626) Adjustment to reconcile consolidated net (loss) to cash used in operations: Depreciation .................................. 17,846 $ 23,812 Non cash compensation Stock issued for services ..................... 324,238 Goodwill amortization ......................... 51,681 $ 24,729 ----------- ------------ Cash used in operations before working capital .... $ 126,783 $ (541,085) (Increase)/Decrease in accounts receivable ... (34,781) (660) (Increase)/Decrease in current assets ........ (7,077) 37,300 (Increase)/Decrease in mortgages held for sale ................................... 3,782,590 10,918,070 (Increase/Decrease in capital lease .......... -- (2,345) Increase/(Decrease) in accounts payable ...... 430,794 (444,343) Increase/(Decrease) in other notes payable ... (562,982) 114,500 Increase/(Decrease) in interest payable ...... 165,909 (85,836) Increase/(Decrease) in other current liabilities ................................ (306,975) (208,045) ----------- ------------ Net cash used after working capital changes ....... $ 3,467,478 $ 10,328,641 Cash used in operating activities ................. $ 3,594,261 $ 9,712,956 INVESTING ACTIVITIES Purchase of fixed assets and improvements .... $ 5,489 ----------- ------------ Cash provided/(used) in investing activities . $ 5,489 $ -- FINANCING ACTIVITIES Net Increase/(Decrease) in warehouse line of credits ............................ $(3,831,032) $(10,235,147) Cash received from MIOA ...................... -- 790,000 Payment of notes receivable stock sale ....... -- 374,222 Notes payable ................................ 262,586 -- Repurchase of stock .......................... -- (700,000) Sale of stock for cash ....................... -- 10,000 ----------- ------------ Cash provided/(used)by financing activities ....... $(3,568,446) $ (9,760,925) Net Increase/(Decrease) in cash ................... 31,304 (47,969) Cash and cash equivalent, beginning period ........ 18,533 311,916 Cash and cash equivalent, end of period ........... $ 49,867 $ 263,947 =========== ============ ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with the attached condensed consolidated financial statements and notes thereto. FINANCIAL RESULTS OF OPERATIONS On a consolidated basis, total revenues increased to $1,305,275 in the quarter ended March 31,1997 from $677,072 in the quarter ended March 31, 1996, an increase of 93%. The increase is a result of substantial growth in loan volume and loan sales as well as the addition of sales from a subsidiary. The net profit margins on loan sales have increased to an average of 4.02% from an average of 1.04% for the respective periods an increase of 286%. This increase is due to the completion of the shift from originating conforming "A" loans to the more profitable non-conforming B/C mortgages. Interest income rose even with the reduction of holding periods prior to sale because of the increased rates charged on non-conforming loans. Expenses for the quarter ended March 31 1997 increased to $1,607,257 from $1,266,698 for the period ended March 31, 1996 a 27% increase. The primary reasons for the increases were the expenses incurred for startup in a subsidiary and the costs of professional services relating to the filing of a registration statement as well as costs associated with securing financing and the resulting need for increased public relations expenses. Loan origination costs decreased 9% to $45,395 for the current quarter from $49,990 in the comparable prior year quarter ending March 31, 1996. General and Administrative expenses increased 3% to $848,165 from $822,293 for the quarter ended March 31, 1996. Marketing and Advertising expense decreased 74% to $5,866 from $22,656 for the quarter ended March 31, 1996. A net loss resulted for the current quarter of $266,982 or $0.05 per share as compared to a net loss of $589,626 or $.21 per share for the quarter ended March 31, 1996. This decreased loss is due to the loss for the period of Green World which did not exist for the corresponding period as well as the increase in net revenues for Westmark Mortgage Corporation. The profit/loss breakdown is as follows:Westmark Mortgage Corporation $0.05,Green World $(0.02) WGHI $(0.08). BUSINESS OPERATIONS During the first quarter of 1997, the Company continued to focus its business to funding non-conforming, B/C paper with approximately 93% of all closed loan volume being B/C loan fundings. Total B/C loan fundings increased from $ 4.79 million in the 3 months ending March 31, 1996 to $19.81 million for the three months ended March 31, 1997, an increase of 313 %. The Company expanded its B/C lending program through bulk sales during the last year and saw record revenue generated in the first three months of 1997 from this expansion. B/C loans are for borrowers with credit histories that fall below the guidelines set forth by Fannie Mae and Freddie Mac. The Company is focusing its marketing efforts in the B/C loan market due to the perceived enhanced returns. The increase in the B/C loans has come primarily from an increased market share in Florida and California. Management intends to continue its marketing strategy in additional states, including California, Georgia, Missouri, Arizona and Illinois where licensing and/or sales activities began or expanded this period. Further expansion is expected in the Northwestern and Midwestern sections of the country in the second and third quarters of 1997. The Company continues to sell loan origination's on a "servicing-released" basis to investors in the normal course of business. The Company's bulk sales program for B/C paper in which loans are pooled and sold in packages ranging from $500,000 to $4,000,000 remains an integral key to future growth. During the first quarter, bulk sales deliveries were completed successfully with institutional investors, such as Household Financial Services, Inc., The Money Store, MorCap, Inc. and Aames Capital Corporation. The Company anticipates further growth of interested institutional buyers and is negotiating for participation into loan securitization pools to further enhance revenue. The expansion of the warehouse line of credit is integral for participation in the securitization pools. LIQUIDITY AND CAPITAL RESOURCES The Company uses its cash flow from whole loan sales, loan origination fees, net interest income and borrowings under its warehouse line of credit to meet its working capital needs. The Company's cash requirements include the funding of loan originations, purchases, payment of interest expenses, operating expenses, taxes and capital expenditures, along with settlement agreements negotiated during the first quarter. On March 31, 1997, total stockholders equity was $667,363. Adequate credit facilities and other sources of funding, including the ability of the Company to sell loans, are essential to the continuation of the Company's ability to originate and purchase loans. The Company borrows funds on a short term basis to support the accumulation of loans prior to sale. These short term borrowings are made under a warehouse line of credit with various lenders including Princap Mortgage, Inc., Household Financial Services, Inc. and The Money Store ("Warehouse Facility"). Pursuant to the Warehouse Facility, the Company has available a total secured revolving credit line of $20 million to finance the Company's origination or purchase of loans, pending sale to investors. The line of credit, pursuant to the Warehouse Facility, has collateral of the assignment and pledge of eligible mortgage loans. These various lines bear interest at annual rates ranging from 1 1/2 to 2% above prime, payable at the time of purchase by the permanent investor. The Warehouse Facility provides for a transaction charge from $140 per loan to as low as $50 per loan and requires the Company to possess a minimum net worth of $250,000 and a compensating cash balance on deposit in the amount of $5,000. On March 31, 1997, the balance outstanding , pursuant to this Warehouse Facility, totaled $4,559,687. The Company does not have any other external lines of credit for financing. Historically, the Company has obtained financing through the issuance of its common stock and borrowings on a negotiated basis. During the first quarter of 1997, the Company issued 860,680 shares of stock. The increase in the number outstanding was attributable to Professional fees for legal services and various consulting agreements. Consulting agreements for services provided in areas of public relations and acquisitions. In May and June 1995, the Company raised $600,000 cash through the issuance of convertible promissory notes in the principal amount of $600,000 and the warrants entitling holders to purchase certain securities ("Bridge Financing"). In April 1996, the Company and all these investors agreed to restructure the investment and the Company paid such investors an aggregate amount of $600,000 and issued such investors 300,000 shares of Series B Preferred Stock ("Series B Preferred Stock") with a stated value of $600,000. The Series B Preferred Stock has a liquidation preference of $600,000, plus accrued and unpaid dividends, is redeemable by the Company at a redemption price of $600,000, plus accrued and unpaid dividends from the date of redemption, subject to adjustment in the event of certain circumstances, and is convertible into shares of Common Stock at a conversion price equal to the lessor of $2.00 or 84% of the closing bid price prior to the date of conversion (subject to further adjustment). In the second quarter of 1996, MIOA (formerly HLOA) has advanced $1,638,593. Total advanced for the six month period ending June 30, 1996 was $2,428,593. $40,000 of the advance was paid back in the third quarter. These fundings were utilized to discharge outstanding debts and for working capital purposes. The Company's internally generated cash flows from operations have historically been and continue to be insufficient for its cash needs. It is expected that internal sources of liquidity will improve when net cash is provided by operating activities and, until such time, the Company will rely on external sources for liquidity. During the first quarter, a subsidiary, Westmark Mortgage Corporation ("WMC") exceeded cash flow needs for daily operations. However, additional holding company and subsidiary expenses continue to require additional capital be raised until WMC and other subsidiaries produce enough revenue to offset these expenses. The Company has not established any other lines of credit or other similar financial arrangements with any lenders. If it appears at any time in the future that the Company is again approaching a condition of cash deficiency, the Company will be required to seek additional debt or equity financing or bring cash flows in balance. If such action is required, there is no assurance that the Company will be successful in any such effort. SUBSEQUENT EVENTS The Company had entered into a financial agreement with J. Michael Reisert, Inc. to close, on the date of a Prospectus issued with Amendment 5 to the SB-2 for the sale of 3,000,000 to 6,000,000 units consisting of 6,000,000 shares of the Company's Series G Convertible Redeemable Preferred Stock and redeemable five year warrants to purchase 3,000,000 shares of Company Common Stock. The offer has been withdrawn by J. Michael Reisert, Inc. without cause. PART II-OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS In the matter of SAXON MORTGAGE V. WESTMARK, Saxon Mortgage obtained a judgment in the amount of $469,348 in connection with various repurchase obligations. An amount of $61,788 has been paid, and the remaining liability of $407,560 is accrued at December 31, 1995. The Company has reached a settlement which calls for monthly payments of $11,788 for 36 months. Counsel for the Company anticipates a further amendment to the stipulated judgment wherein all monthly payments are suspended in consideration for which the Company will secure the obligation to Saxon Mortgage with a portion of the real property acquired from PBF. The Company would remain obligated for the full payment of $407,560 on July 15, 1998 and would be entitled to a full release and final settlement upon payment of the sum of $318,261 on or before June 27, 1997. The Company is a defendant in CONWAY ET AL V. DANNA, NETWORK FINANCIAL SERVICES, INC., ET AL. The suit alleges Unfair Practices, Fraud (Negligent Misrepresentations; Intentional Misrepresentations; Concealment); Breach of Written Contract; Breach of Implied Covenant of Good Faith and Fair Dealing; Common Count; and Breach of California Securities Statutes against Network Financial Services, Inc. (a.k.a. Westmark Group Holdings, Inc.) and others. The Company considers the risk of loss in this matter to be remote and, consequently, no amount has been accrued as of December 31, 1995. The Company is plaintiff in NETWORK FINANCIAL SERVICES, INC. V. MCCURDY, RAICHE, RYALS, NASH & MOSS LAND COMPANY, filed March 1993 in Monterey County, California Superior Court. The plaintiff alleges fraud, negligent misrepresentation, breach of fiduciary duty, negligence, quiet title, RICO violations and conversion. Defendant McCurdy initiated a cross-complaint naming, among others, the Company as a cross defendant. The cross-complaint seeks damages for breach of a stock option agreement, breach of contract, and declaratory relief. The Company has finalized a settlement with defendants Raiche and Ryals, wherein defendants Raiche and Ryals transferred 7,166 shares of the Company's Common Stock to the Company in addition to one-half (1/2) interest in certain property. The balance of the pending litigation involving defendant and cross-complainant McCurdy and others is unaffected by the Raiche/Ryals settlement. Management intends to vigorously defend this cross-complaint. The Company is defendant in KNIGHT V. LOMAS MORTGAGE U.S.A. AND WESTMARK MORTGAGE CORPORATION. The complaint is based upon a contention by the Plaintiff that Lomas Mortgage U.S.A. as the servicing agent wrongfully impaired the credit rating of Plaintiff and breached the written agreement between the parties. A preliminary determination indicates that the basis for the dispute is between Lomas U.S.A. and the Plaintiff, but the Company has been named as a third party defendant in view of the original contractual relationship between the Plaintiff and Westmark. The Company considers the risk of loss in this matter to be remote, and consequently, no amount has been accrued as of December 31,1995. The Company and plaintiffs entered into an agreement wherein and whereby the subject litigation was dismissed without prejudice. The case was refiled in Orange County, California Superior Court on October 29, 1996. The Company does not anticipate any liability with respect to this litigation. The Company is a defendant in ORTEGA V. MICHAEL SANTA MARIA ET AL filed in Orange County Superior Court of the State of California. The complaint is based upon a contention by the Borrower Ortega that Santa Maria, individually and as a owner/manager/broker of Bann Cor Mortgage made false presentations of material fact to plaintiffs. The Company acquired this loan from Bann Cor and subsequently sold the loan to Imperial Credit Industries. A preliminary determination indicates that the basis for the dispute is between Santa Maria and Bann Cor. However, the Company has been named as a party defendant. Westmark generally and specifically denies each and every allegation contained in the complaint. The Company considers the risk of loss in this matter to be minimal and fully intends to defend this action. The Company has filed a Demurrer to plaintiff's Complaint, which Demurrer was sustained on or about October 11, 1996. Although plaintiff has been allowed time to file an Amended Complaint, it is anticipated that plaintiff will dismiss the company from the pending litigation. The Company remains a party defendant in the related cross complaint for indemnity filed by Imperial Credit Industries. One of the Company's wholly owned subsidiaries, Green World has been named, together with other defendants, in a suit action SHAPE UP AMERICA V. PHILLIPPE ET AL., filed in Alameda County, California Superior Court on August 19, 1996. The Complaint alleges breach of contract, conspiracy, fraud, and quantum meruit. The basic premise to plaintiff's Complaint is that plaintiff claims to be entitled to various forms of compensation based upon the sale of certain licensing, patent and marketing rights to the Talon Refrigerant Management System. It is anticipated that venue for this action will be transferred to Sacramento County and to date, no discovery has been undertaken. Based upon a preliminary review of relevant documentation, the Company does not anticipate any liability. From time to time the Company is a defendant (actual or threatened) in certain lawsuits encountered in the ordinary course of its business, the resolution of which, in the opinion of management, should not have a material adverse affect on the Company's financial position. ITEM 2. CHANGES IN SECURITIES None. ITEM 3. DEFAULTS UPON SENIOR SECURITIES None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE SECURITY HOLDERS None. ITEM 5. OTHER INFORMATION None. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K None. SIGNATURES 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 hereunto duly authorized. WESTMARK GROUP HOLDINGS, INC. BY: /s/ NORMAN J. BIRMINGHAM NORMAN J. BIRMINGHAM, DIRECTOR, CHIEF FINANCIAL OFFICER ( PRINCIPAL ACCOUNTING OFFICER & DULY AUTHORIZED DIRECTOR OF THE REGISTRANT) BY: /s/ MARK D. SCHAFTLEIN MARK D. SCHAFTLEIN, PRESIDENT , CHIEF EXECUTIVE OFFICER (DULY AUTHORIZED DIRECTOR & OFFICER OF THE REGISTRANT DATED: MAY 12, 1997 EX-27.1 2
5 3-MOS DEC-31-1997 MAR-31-1997 49,837 2,000,000 4,822,814 0 39,413 5,250,329 603,000 317,275 10,418,584 9,676,221 0 75,000 3,250,000 5,653 (2,588,290) 10,418,584 1,055,422 1,305,275 52,462 52,462 1,353,621 65,808 201,174 (266,982) 0 (266,982) 0 0 0 (266,982) (0.05) 0
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