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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q/A
(AMENDMENT NO. 1)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- ------- EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED: SEPTEMBER 30, 1998
OR
TRANSITION REPORT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE TRANSITION PERIOD FROM _____ TO _____
COMMISSION FILE NUMBER: 001-13637
APEX MORTGAGE CAPITAL, INC.
(Exact name of Registrant as specified in its Charter)
MARYLAND 95-4650863
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification Number)
865 SOUTH FIGUEROA STREET
LOS ANGELES, CALIFORNIA 90017
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (213) 244-0440
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
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APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of the issuer's classes of common
stock, as of the last practicable date.
Common Stock ($0.01 par value) 5,753,000 as of November 10,1998
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This amendment is being filed solely for the purpose of inserting the
following discussion at the end of Part I, Item 2, Management's Discussion and
Analysis of Financial Condition and Results of Operations, which was
inadvertently omitted from the original report.
YEAR 2000 MATTERS
The year 2000 issue is the result of computer programs using two digits
rather than four to define the applicable year. Any computer system that the
Company relies on with time sensitive software may recognize a date entered as
"00" as the year 1900 rather than the year 2000. This could result in a system
failure or miscalculations causing disruption of operations, including, among
other things, a temporary inability to process transactions or engage in normal
business activities. The Company believes that most of its exposure to Year 2000
issues involves the readiness of external third parties such as, but not limited
to, loan servicers, security master servicers, security paying agents and
trustees, its stock transfer agent, its securities custodian, the counterparties
on its various financing agreements and hedging contracts and vendors ("External
Service Providers").
The Company relies on the Manager for its computer services and the
Manager has been addressing this issue at no cost to the Company. Specifically,
the Manager's internally developed computer systems have been implemented within
the past five years. These systems have been developed with software tools that
utilize a century date format (ccyymmdd). Although it has been a standard
procedure to use this format for all date fields, the Manager is nonetheless in
the process of unit testing its internally developed applications for numerous
date conditions, including: the first and last day of the year 2000, the leap
year day and the day after, the first day of the year 2001, functions with date
ranges from 1999 which cross over into year 2000, functions which have both
"from date" and "to date" in the year 2000, date arithmetic and validation using
standard routines through the year 2199.
The Manager has been, and is currently in contact with, each of its
External Service Providers to evaluate their readiness for the year 2000. The
Manager has requested each of its External Service Providers to either (i)
prepare a description of its process for identifying date sensitive areas, its
approach for implementing changes, its testing methodology, along with its
timetable for completion, or (ii) certify as to its year 2000 compliance.
Due to the technical architecture of the Manager's internally developed
applications, its emphasis on using major providers and its ongoing
communication with those providers, the Manager anticipates it will be well
positioned to begin the year 2000. There can be no assurance, however, that the
Company's External Service Providers will resolve their own Year 2000 issues in
a timely manner, or that any failure by these External Service Providers to
resolve such issues would not have an adverse effect on the Company's operations
and financial condition. Each External Service Provider is in turn subject to
the Year 2000 Issues of various third parties with which it does business,
making the Company's exposure to the noncompliance of any External Service
Provider difficult to assess. In a worst case scenario, a significant portion of
the Company's External Service Providers and contractual counter-parties could
fail to fulfill their respective obligations which would significantly impair
the Company's ability to meet its obligations under its financing and hedging
agreements. This would in turn cause the Company to liquidate assets at
potentially substantial losses and possibly render the Company insolvent. The
Company believes it is devoting the necessary resources to address the Year 2000
Issues over which it has control. With respect to the Year 2000 Issues of
External Service Providers, over which the Company has no control, the Company's
contingency plan is to identify replacement vendors, where possible.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned thereunto duly authorized.
APEX MORTGAGE CAPITAL, INC.
Dated: February 3, 1999
By: /s/ Philip A. Barach
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Philip A. Barach
President and Chief Executive Officer
(Principal Executive Officer)
By: /s/ Daniel K. Osborne
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Daniel K. Osborne
Executive Vice President
Chief Operating Officer
Chief Financial Officer
(Principal Accounting Officer)
