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UNITED STATES
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):May 22, 2000
MCM CAPITAL GROUP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 000-26489 48-1090909
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(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) Identification No.)
4302 E. BROADWAY, PHOENIX, AZ 85040
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (800) 265-8825
Not applicable
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(Former name or former address, if changed since last report.)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On May 22, 2000, Midland Acquisition Corporation, a Delaware
corporation ("MAC") a wholly owned subsidiary of MCM Capital Group, Inc., a
Delaware corporation ("MCM"), completed the acquisition of substantially all of
the operating assets of West Capital Financial Services Corp., a California
corporation ("West Capital"), and the assumption by MAC of certain operating
liabilities of West Capital, pursuant to an Asset Purchase Agreement, dated May
11, 2000, between MAC and West Capital (the "Purchase Agreement"). In connection
with the transaction, MCM entered into a Guaranty for the benefit of West
Capital to guarantee certain obligations of MAC with regard to the transaction.
The consideration for the acquisition consisted of 375,000 shares of
MCM's common stock and the assumption of approximately $1.75 million in
liabilities. The consideration was determined based on arms-length negotiations.
The 375,000 shares had a value of approximately $632,812 based on a closing
price of $1.6875 per share on May 22, 2000, as reported by Nasdaq National
Market.
The assets acquired include 3 portfolios of charged-off consumer
receivables, all of the fixed assets of West Capital, and various agreements and
rights, used by West Capital in the operation of its business. Various assets
that were acquired pursuant to the Purchase Agreement were used as part of West
Capital's business of collecting charged-off consumer receivables, including
computer hardware and software, telephone equipment, and other related
equipment. MCM intends to continue such use. As part of the transaction, all of
the previous employees of West Capital were offered and accepted employment by
Midland Credit Management, Inc. ("Midland Credit"), a wholly-owned subsidiary of
MCM.
In a separate but related transaction, MCM acquired a securitized
portfolio of charged-off consumer receivables from WCFSC Consumer Receivables
Recovery Trust 1995-1 (the "Trust"), a trust formed by WCFSC Special Purpose
Corporation, a California corporation and wholly owned subsidiary of West
Capital ("WCFSC SPC"). The acquisition was pursuant to a Trust Receivables
Purchase Agreement, dated May 22, 2000, by and among MCM, West Capital, WCFSC
SPC, WCFSC Special Purpose Corporation II, and Norwest Bank Minnesota, National
Association, as Trustee for the Trust. The consideration for the acquisition
consisted of 25,000 shares of MCM's common stock, 10,000 shares of Redeemable
Preferred Stock of WCFSC Special Purpose Corporation II (the "Preferred Stock"),
and a WCFSC Consumer Receivables Recovery Trust 1995-1 Note (the "Note"), with a
remaining principal balance of approximately $228,000. The Preferred Stock and
the Note were previously owned by SunAmerica Inc., the parent corporation of
West Capital. MCM acquired the Preferred Stock and the Note from SunAmerica Inc.
in a separate transaction for a nominal cash purchase price and other
non-monetary consideration. The 25,000 shares of MCM common stock had a value of
approximately $42,187 based on a closing price of $1.6875 per share on May 22,
2000 as reported by NASDAQ National Market.
In a separate but related transaction, Midland Credit succeeded West
Capital as servicer of a pool of charged-off consumer accounts that are owned by
West Capital Receivables Corporation I, a California corporation and
wholly-owned subsidiary of West Capital.
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The press release related to the West Capital transactions is attached
hereto as Exhibit 99.1.
ITEM 5. OTHER EVENTS
New Management
In conjunction with the West Capital transaction, effective May 23,
2000, the Board of Directors of MCM elected West Capital's Carl C. Gregory, III
as President and Chief Executive Officer, Barry R. Barkley as Executive Vice
President and Chief Financial Officer, and J. Brandon Black as Executive Vice
President of the Company.
Nasdaq Notice
On June 6, 2000, MCM announced that it had been notified by the
National Association of Securities Dealers that the total value of its public
float is below $5 million, the necessary threshold for continued listing on the
NASDAQ National Market. The related press release is attached hereto as Exhibit
99.2.
Status of Securitization and Warehouse Events of Default
On May 30, 2000, we failed to maintain the specified level of liquidity
required pursuant to our 1999-1 Securitization and our 1999-A Warehouse
financing, resulting in an Event of Default under both. We have received a
Waiver of default through June 16, 2000. No assurance can be given that
subsequent waivers will be obtained. See Form 10-Q filed May 22, 2000 for a
detailed discussion regarding the effect of such an Event of Default.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Businesses Acquired.
It is impracticable to file with this Form 8-K the financial
statements required by Item 7(a) with regard to the acquisition
described in Item 2 above. Those financial statements will be
filed, if necessary, by amendment to this Form 8-K as soon as
practicable and, in any event, within 60 days after the required
filing date for this Form 8-K.
(b) Pro Forma Financial Information.
It is impracticable to file with this Form 8-K the pro forma
financial information required by Item 7(b) with regard to the
acquisition described in Item 2 above. This information will be
filed, if necessary, by amendment to this Form 8-K as soon as
practicable and, in any event, within 60 days after the required
filing date for this Form 8-K.
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Exhibit No. Description
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10.1 Asset Purchase Agreement, dated May 11, 2000, between Midland
Acquisition Corporation and West Capital Financial Services
Corp.
10.2 Trust Receivables Purchase Agreement, dated May 22, 2000, by
and among MCM Capital Group, Inc., West Capital Financial
Services Corp., WCFSC Special Purpose Corporation, WCFSC
Special Purpose Corporation II and Norwest Bank Minnesota,
National Association, as Trustee for WCFSC Consumer
Receivables Recovery Trust 1995-1.
10.3 Registration Rights Agreement, dated May 22, 2000, by and
among MCM Capital Group, Inc., West Capital Financial Services
Corp., and WCFSC Special Purpose Corporation.
10.4 Guaranty, dated May 22, 2000, by MCM Capital Group, Inc. for
the benefit of West Capital Financial Services Corp.
99.1 Press release dated May 23, 2000 announcing West Capital
transaction.
99.2 Press release dated June 6, 2000 announcing Nasdaq
notification.
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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 hereunto duly authorized.
MCM CAPITAL GROUP, INC.
Date: June 6, 2000 By: /s/ Barry R. Barkley
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Barry R. Barkley
Executive Vice President and Chief
Financial Officer (Principal Financial
and Accounting Officer)
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EXHIBIT INDEX
10.1 Asset Purchase Agreement, dated May 11, 2000, between Midland
Acquisition Corporation and West Capital Financial Services
Corp.
10.2 Trust Receivables Purchase Agreement, dated May 22, 2000, by
and among MCM Capital Group, Inc., West Capital Financial
Services Corp., WCFSC Special Purpose Corporation, WCFSC
Special Purpose Corporation II and Norwest Bank Minnesota,
National Association, as Trustee for WCFSC Consumer
Receivables Recovery Trust 1995-1.
10.3 Registration Rights Agreement, dated May 22, 2000, by and
among MCM Capital Group, Inc., West Capital Financial Services
Corp., and WCFSC Special Purpose Corporation.
10.4 Guaranty, dated May 22, 2000, by MCM Capital Group, Inc. for
the benefit of West Capital Financial Services Corp.
99.1 Press release dated May 23, 2000 announcing West Capital
transaction.
99.2 Press release dated June 6, 2000 announcing Nasdaq
notification.
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