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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 12B-25
NOTIFICATION OF LATE FILING
(Check One):
[X] Form 10-K Form 11-K Form 20-F Form 10-Q Form N-SAR
For Period Ended: March 31, 1998
[ ] Transition Report on Form 10-K
[ ] Transition Report on Form 20-F
[ ] Transition Report on Form 11-K
[ ] Transition Report on Form 10-Q
[ ] Transition Report on Form N-SAR
For the Transition Period Ended:
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If the notification relates to a portion of the filing checked above,
identify the Items(s) to which the notification relates:
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PART I - REGISTRANT INFORMATION
Search Financial Services Inc.
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Full Name of Registrant
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Former Name if Applicable
600 N. Pearl Street, Suite 2500, L.B. 123
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Address of Principal Executive Office (Street and Number)
Dallas, TX 75201-2899
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City, State and Zip Code
PART II -RULES 12b-25(b) AND (c)
If the subject report could not be filed without unreasonable effort or expense
and the registrant seeks relief pursuant to Rule 12b-25(b), the following should
be completed (check box if appropriate):
[ ] (a) The reasons described in reasonable detail in Part III of this
form could not be eliminated without unreasonable effort or
expense;
[ ] (b) The subject annual report, semi-annual report, transition
report on Form 10-K, Form 20-F, Form 11-K or Form N-SAR, or
portion thereof will be filed on or before the fifteenth
calendar day following the prescribed due date; or the subject
quarterly report or transition report on Form 10-Q, or portion
thereof, will be filed on or before the fifth calendar day
following the prescribed due date; and
[ ] (c) The accountant's statement or other exhibit required by Rule
12b-25(c) has been attached if applicable.
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PART III -NARRATIVE
On March 6, 1998, the Company and three of its non-prime automobile
finance subsidiaries filed petitions seeking protection from their creditors
under Chapter 11 of the United States Bankruptcy Court (the "Chapter 11
Proceedings"). The Chapter 11 Proceedings are pending in the United States
Bankruptcy Court for the Northern District of Texas, Dallas Division, and are
being jointly administered under Case No. 398-32129-RCM-11. Since commencement
of the Chapter 11 Proceedings, the Company and its subsidiaries have severally
curtailed operations, including completing their exit from the non-prime
automobile business which represented approximately 90% of the assets of the
Company and its subsidiaries. The Company and its subsidiaries have also reduced
their number of employees by over 50% during the last eight months.
The Company's Chief Executive Officer, Chief Financial Officer and
other executive officers have devoted substantially all their time to management
of the Chapter 11 Proceedings, including completing the sale of substantially
all of the non-prime automobile receivables owned by the Company's subsidiaries
and the structuring and negotiation of a sale of, or investment in, the
Company's remaining business, its consumer finance operations. It is currently
contemplated that a sale of the consumer finance operations will form the core
element of the Company's plan of reorganization.
The Company has not employed a firm of independent certified public
accountants to perform an audit of its financial statements at, and for the
fiscal year ended, March 31, 1998 and has not determined whether or when such a
firm will be engaged for that purpose.
The Company's 9%/7% Convertible Preferred Stock and Common Stock were
delisted from The Nasdaq National Market effective with the close of business
June 1, 1998. The last reported sales prices per share for the Company's 9%/7%
Convertible Preferred Stock and Common Stock were $0.03 and $0.01, respectively.
PART IV -OTHER INFORMATION
(1) Name and telephone number of person to contact in regard to this
notification:
Robert D. Idzi 214 965-6000
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(Name) (Area Code) (Telephone Number)
(2) Have all other periodic reports required under Section 13 or 15(d) of
the Securities Exchange Act of 1934 or Section 30 of the Investment
Company Act of 1940 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports) been
filed? If the answer is no, identify report(s).
[X] Yes [ ] No
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(3) Is it anticipated that any significant change in results of operations
from the corresponding period for the last fiscal year will be
reflected by the earning statements to be included in the subject
report or portion thereof?
[X] Yes [ ] No
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If so, attach an explanation of the anticipated change, both
narratively and quantitatively, and, if appropriate, state the reasons
why a reasonable estimate of the results cannot be made.
The Company's anticipated net loss for the fiscal year ended
March 31, 1998 of approximately $30 million represents an increase of
approximately $25 million over its net loss of approximately $5 million
for the fiscal year ended March 31, 1997. The increase in net loss was
primarily attributable to (1) a loss of $9.1 million related to
discontinued automobile finance operations, (2) a $2.5 million loss on
sale of assets, (3) an increase of $11.4 million in provision for loan
losses and (4) expenses of $1.2 million for the settlement of a
potential class action lawsuit. The anticipated net loss of
approximately $30 million does not reflect any gain or loss from the
sale of the assets of MS Financial, Inc. ("MS") as part of the
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Chapter 11 Proceedings. As previously reported, under the terms of the
sale of MS' assets, MS is entitled to receive a portion of the proceeds
from the liquidation of the assets sold if those proceeds exceed a
threshold amount. The Company has not determined the amount of proceeds
it expects to receive, nor, therefore, whether and in what amount the
sale will result in a gain or loss. That gain or loss must be
determined before the final net loss for the fiscal year can be
calculated.
SEARCH FINANCIAL SERVICES INC.
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(Name of Registrant as specified in charter)
has caused this notification to be signed on its behalf by the undersigned
thereunto duly authorized.
Date: June 30, 1998 By: /s/ Robert D. Idzi
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Robert D. Idzi
Senior Executive Vice President and
Chief Financial Officer
