<PAGE> 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
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(Exact name of registrant as specified in its charter)
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<S> <C>
CALIFORNIA 95-2588374
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(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)
</TABLE>
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.
<PAGE> 2
BEVERLY HILLS BANCORP
TABLE OF CONTENTS
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Page
PART I. Financial Information Number
--------------------- ------
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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
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<PAGE> 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 -
<PAGE> 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."
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<PAGE> 5
BEVERLY HILLS BANCORP AND SUBSIDIARIES
CONDENSED STATEMENT OF NET ASSETS
(UNAUDITED)
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
ASSETS LIQUIDATION BASIS
-----------------
<S> <C>
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
==========
</TABLE>
See Accompanying Notes to Condensed Financial Statements.
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<PAGE> 6
BEVERLY HILLS BANCORP AND SUBSIDIARIES
CONDENSED STATEMENT OF CHANGES IN NET ASSETS IN LIQUIDATION (1995)
AND CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (1994)
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
SEPTEMBER 30,
------------------------------------------
1995 1994
------------------- ---------------------
(Liquidation Basis) (Going Concern Basis)
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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
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Total Expenses 138,000 137,000
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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
=========== ==========
</TABLE>
See Accompanying Notes to Condensed Financial Statements.
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<PAGE> 7
BEVERLY HILLS BANCORP AND SUBSIDIARIES
CONDENSED STATEMENT OF CHANGES IN NET ASSETS IN LIQUIDATION (1995)
AND CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (1994)
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED
SEPTEMBER 30,
--------------------------------------------
1995 1994
------------------- ---------------------
(Liquidation Basis) (Going Concern Basis)
<S> <C> <C>
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
========= =========
</TABLE>
See Accompanying Notes to Condensed Financial Statements.
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<PAGE> 8
BEVERLY HILLS BANCORP AND SUBSIDIARIES
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
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<CAPTION>
FOR THE NINE MONTHS ENDED
SEPTEMBER 30,
--------------------------------------------
1995 1994
------------------- ---------------------
(Liquidation Basis) (Going Concern Basis)
(Consolidated)
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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
============ ==========
</TABLE>
See Accompanying Notes to Condensed Financial Statements.
- 8 -
<PAGE> 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."
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<PAGE> 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:
<TABLE>
<S> <C> <C>
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
===========
</TABLE>
The increase in valuation of the Tigera shares is based on the
sale of such shares, as discussed in Note 7 - Subsequent Event.
- 10 -
<PAGE> 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 -
<PAGE> 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.
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<PAGE> 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:
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<PAGE> 14
<TABLE>
<S> <C> <C>
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
===========
</TABLE>
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 -
<PAGE> 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.
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<PAGE> 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:
<TABLE>
<S> <C>
Votes For 150,112
Votes Against 804,944
Abstentions 3,147
</TABLE>
(2) Adjourn the Vote on the Adoption of
the Plan of Complete Liquidation and
Dissolution until July 10, 1995:
<TABLE>
<S> <C>
Votes For 1,011,378
Votes Against 200
</TABLE>
(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.
<TABLE>
<CAPTION>
NUMBER OF VOTES
-----------------------
FOR ABSTAIN
--------- -------
<S> <C> <C>
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
</TABLE>
(4) Ratification of the appointment of BDO
Seidman as independent certified public
accountants for the year ending December
31, 1995:
<TABLE>
<S> <C>
Votes For 1,007,858
Votes Against 1,769
Abstentions 1,911
</TABLE>
- 16 -
<PAGE> 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 -
<PAGE> 18
EXHIBIT INDEX
Exhibit 27 - Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 610,000
<SECURITIES> 0
<RECEIVABLES> 450,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 6,058,000
<CURRENT-LIABILITIES> 436,000
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 5,622,000
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 440,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (231,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 643,000
<NET-INCOME> 412,000
<EPS-PRIMARY> 5.35
<EPS-DILUTED> 0
</TABLE>
