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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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) November 25, 1996
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SEARCH CAPITAL GROUP, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 0-9539 41-1356819
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(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation) Identification No.)
700 N. PEARL STREET
SUITE 400
DALLAS, TEXAS 75201-7490
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (214) 965-6000
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NOT APPLICABLE
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
Effective November 25, 1996, Registrant completed its acquisition of
certain assets of U.S. Lending Corporation ("USLC"). At closing, Registrant
acquired cash of approximately $3.5 million, used motor vehicle retail
installment sales contracts with total unpaid installments of approximately $2
million, repossessed motor vehicles with an aggregate wholesale value of
approximately $78,000 and an undetermined amount of delinquent accounts and
foreclosure deficiency balances. In consideration for those assets,
Registrants issued 271,867 shares of 9%/7% Convertible Preferred Stock, 231,066
shares of Common Stock and Warrants expiring March 14, 2001 to purchase 154,960
shares of Common Stock at an initial exercise price of $16.00 per share,
increasing $2.00 per share per year.
Over the period from February 1993 through May 1995, USLC's historical
credit losses on its portfolio of contracts as a percentage of the outstanding
contracts receivable were approximately 26%. Registrant has acquired limited
assets from USLC, not USLC's business. Registrant believes USLC's historical
financial statements are not indicative of the performance of the assets
acquired and would not be useful to investors. Registrant does not intend to
resume USLC's underwriting or servicing activities. As a consequence, the
expenses of USLC reflected in its prior financial statements may not be
indicative of Registrant's future expenses with respect to the acquired assets.
The Company's financial condition, liquidity and capital resources have been
improved by the acquired cash and over time should be further improved by the
collection of the contracts acquired from USLC. Registrant does not expect to
have any substantial increase in general and administrative expenses as a
result of the acquisition and, consequently, expects to have improved operating
results from the increased revenues resulting from the collection of the
contracts acquired from USLC.
The statements in the foregoing paragraph regarding future improvement
in the Company's financial condition, liquidity and capital resources, and
improved operating results, are forward-looking statements as defined in the
Private Securities Litigation Reform Act of 1995 that involve risks or
uncertainties, including principally whether the obligors of the contracts
acquired make the payments required thereunder in a timely manner.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(C) EXHIBITS.
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Exhibit No. Description
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10.1 Asset Purchase Agreement (the "Asset Purchase Agreement") among U.S. Lending Corporation, as
Debtor-In-Possession, and Search Capital Group, Inc. and Search Funding III, Inc. dated July
17, 1996 (Incorporated by reference to Exhibit 10.1 to Registrant's Quarterly Report on Form
10-Q for the quarter ended June 30, 1996)
10.2 Second Amendment dated November 5, 1996 to the Asset Purchase Agreement (Incorporated by
reference to Exhibit 10.1 to Registrant's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1996)
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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.
SEARCH CAPITAL GROUP, INC.
By: /s/ Robert D. Idzi
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Robert D. Idzi
Senior Executive Vice President
Dated: December 16, 1996
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EXHIBIT INDEX
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Exhibit No. Description
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10.1 Asset Purchase Agreement (the "Asset Purchase Agreement") among U.S. Lending Corporation, as
Debtor-In-Possession, and Search Capital Group, Inc. and Search Funding III, Inc. dated July
17, 1996 (Incorporated by reference to Exhibit 10.1 to Registrant's Quarterly Report on Form
10-Q for the quarter ended June 30, 1996)
10.2 Second Amendment dated November 5, 1996 to the Asset Purchase Agreement (Incorporated by
reference to Exhibit 10.1 to Registrant's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1996)
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