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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 MARCH 31, 1995
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the period from to
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Commission File Number 0-12113
TIGERA GROUP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 94-2691724
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(State of Incorporation) (I.R.S. Employer Identification Number)
730 FIFTH AVENUE, 9TH FLOOR, NEW YORK, NY 10019-4105
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 212-333-8664
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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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Number of shares of Common Stock, $.01 par value, outstanding as of March 31,
1995: 21,286,301.
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TIGERA GROUP, INC.
TABLE OF CONTENTS
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Page
PART I. Financial Information Number
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Item 1. Financial Statements
Condensed Consolidated Financial
Statements 3
Condensed Consolidated Balance Sheet --
March 31, 1995 4
Condensed Consolidated Statements of
Operations -- For the Three Months
Ended March 31, 1995 and 1994 5
Condensed Consolidated Statements of
Cash Flows -- For the Three Months
Ended March 31, 1995 and 1994 6
Notes to Condensed Consolidated Financial
Statements 7-8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9-10
PART II. Other Information
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Item 1. Legal Proceedings 11
Item 2. Exhibits and Reports on Form 8-K 11
SIGNATURE 12
</TABLE>
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PART I. Financial Information
Item 1. Tigera Group, Inc. -- Financial Statements
Condensed Consolidated Financial Statements
(Unaudited)
The Condensed Consolidated Financial Statements
included herein have been prepared by Tigera Group, Inc. (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 Consolidated 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 financial position and results of operations as of and for
the periods indicated.
It is suggested that these Condensed Consolidated
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 Tigera Group, Inc. Form 10-KSB Annual Report to the Securities and
Exchange Commission.
The results of operations for the three months ended
March 31, 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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TIGERA GROUP, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
MARCH 31, 1995
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<CAPTION>
ASSETS
<S> <C>
Cash, Cash Equivalents and Treasury Bills $ 11,195,000
Other Assets, including restricted cash of $1,000,000 1,049,000
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Total Assets $ 12,244,000
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LIABILITIES AND
STOCKHOLDERS' EQUITY
Accounts Payable and Accrued Liabilities $ 82,000
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Total Liabilities 82,000
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Commitments & Contingencies
Stockholders' Equity:
Preferred Stock - par value $.01 per share;
authorized 10,000,000 shares, none issued
Series B Common Stock - par value $.01 per share;
authorized 750,000 shares, none issued
Common Stock - par value $.01 per share;
authorized 40,000,000 shares, outstanding
21,286,301 shares, net of 826,405 shares
held in treasury 213,000
Additional Paid-in Capital 108,742,000
Accumulated Deficit (96,793,000)
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Total Stockholders' Equity 12,162,000
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Total Liabilities and Stockholders' Equity $ 12,244,000
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</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements.
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TIGERA GROUP, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
MARCH 31,
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1995 1994
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<S> <C> <C>
Lease Revenue $ -- $ 190,000
Depreciation of Revenue-Earning Vehicles -- (123,000)
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Gross Profit -- 67,000
Operating Expenses:
General and Administrative 217,000 217,000
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Operating Loss (217,000) (150,000)
Other Income:
Interest Income 171,000 89,000
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Net Loss $ (46,000) $ (61,000)
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Net Loss Per Share -- --
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Weighted Average Number of Common
Shares Outstanding 21,286,301 21,286,301
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</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements.
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TIGERA GROUP, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
MARCH 31,
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1995 1994
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<S> <C> <C>
Cash Flows from Operating Activities:
Net Loss $ (46,000) $ (61,000)
Adjustments to Reconcile Net Loss to Net
Cash Provided by/(Used in) Operating Activities:
Depreciation of Revenue-Earning Vehicles -- 123,000
Change in Assets and Liabilities:
(Increase)/Decrease in Other Assets 82,000 (21,000)
Increase/(Decrease) in Accounts Payable and
Accrued Liabilities (69,000) 23,000
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Net Cash Provided by/(Used in)
Operating Activities (33,000) 64,000
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Net Increase/(Decrease) in Cash,
Cash Equivalents and Treasury Bills (33,000) 64,000
Cash, Cash Equivalents and Treasury Bills at
Beginning of Period 11,228,000 9,753,000
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Cash, Cash Equivalents and Treasury Bills at
End of Period $ 11,195,000 $ 9,817,000
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</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements.
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TIGERA GROUP, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
MARCH 31, 1995
Note 1 - Condensed Consolidated Financial Statements:
The Condensed Consolidated Financial Statements included herein
have been prepared by Tigera Group, Inc. (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 Consolidated
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
financial position and results of operations as of and for the periods
indicated.
It is suggested that these Condensed Consolidated 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 Tigera
Group, Inc. Form 10-KSB Annual Report to the Securities and Exchange Commission.
Note 2 - Net Loss per Share:
Net loss per share is based on the weighted average number of
common shares outstanding during each period. Common share equivalents (common
stock options and warrants) have not been included in the calculation because
the effect would decrease the loss per share.
Note 3 - Income Taxes:
The Company files a consolidated federal income tax return. The
Company recognizes certain expenses for income tax purposes in years different
from those in which they are provided for in financial reporting.
As of December 31, 1994, the Company has net operating loss
carryforwards of approximately $91,000,000 and $89,000,000 for financial
reporting and tax purposes, respectively, which are available to offset future
taxable income expiring from 1995 through 2009. The Company also has available
investment and research and development credits of
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approximately $2,000,000 expiring in 1995 through 2000. The ability of the
Company to utilize these carryforwards in future years may be limited, or even
eliminated.
Specifically, the Internal Revenue Code of 1986, as amended (the
"Code"), imposes substantial limitations under certain circumstances on the use
of net operating loss carryforwards upon the occurrence of an "ownership change"
(as defined in Section 382 of the Code). An "ownership change" can result from
issuances of equity securities by the Company, purchases of the Company's
securities by the Company, purchases of the Company's securities in the
secondary market by existing or new stockholders or a combination of the
foregoing. The Company's desire to issue new equity securities could be limited
in order to prevent such an "ownership change" from occurring. Alternatively,
certain shareholders could occasion an ownership change if they substantially
increased their ownership of the Company's Common Stock.
As of December 31, 1994, the deferred tax assets related to the net
operating loss carryforwards and investment and research and development credit
carryforwards totaling approximately $36,000,000 have been fully offset by
valuation allowances, since the utilization of such amounts is uncertain.
Note 4 - Security Ownership of Company's Common Stock:
On January 23, 1995, Beverly Hills Bancorp ("BHB") accepted an
offer from Forschner Enterprises, Inc. ("Forschner") to purchase from BHB
295,000 shares of the Company's Common Stock and all of BHB's holding of the
capital stock of TGI Acquisition Corp., a corporation wholly owned by BHB,
which, in turn, owns 4,445,000 shares of the Company's Common Stock, for a total
purchase of 4,740,000 shares of the Company's Common Stock. The transaction is
subject to the approval of the sale and a plan of liquidation and dissolution by
BHB's shareholders at a meeting to be held on June 1, 1995. If the transaction
is completed, Forschner will then own directly and indirectly a total of
6,310,778 shares of the Company's Common Stock, or 29.6% of the shares
outstanding.
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Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
March 31, 1995
Results of Operations
The principal activity of Tigera Group, Inc. (the
"Company" or the "Registrant"), formerly named Fortune Systems Corporation,
consists of seeking and evaluating candidates for acquisition. The Company has
established strategic and financial criteria and has engaged in the
identification of a number of candidates. The major consideration is that the
candidate for acquisition be in the position of availing itself of the Company's
tax loss carryforwards. Therefore, its profitability, both present and future,
is a priority consideration in evaluating potential acquisitions. The Company
identifies potential acquisition candidates through communications with
investment banking and brokerage firms, newspaper advertisements and responses
to classified advertisements. Other criteria include positive cash flow, a
competent management team, strong product and market position and good growth
potential. Although helpful to the acquisition process, the Company's criteria
are not intended to be definitive, but rather reflect priorities and objectives.
The Company competes for acquisitions against domestic and international
companies, financial groups and other entities, many of which may have greater
financial resources and borrowing capacity than the Company. The Company
continues to review potential acquisitions, but none have been deemed
acceptable. While there can be no assurances as to the timing of any particular
acquisition, the Company's goal is to consummate an acquisition as soon as
possible.
In 1994, the Company sold its remaining ownership
interest in certain leased trucks to Lend Lease Trucks, Inc. ("Lend Lease"),
simultaneously with Lend Lease's sale of its operating assets and contracts to
Ryder System Inc. As a result of this transaction, the Company recognized a loss
of approximately $194,000, in addition to the allowance of $530,000 recorded as
of December 31, 1993, and had no lease revenue, depreciation of revenue-earning
vehicles or gross profit during the three months ended March 31, 1995.
General and administrative expenses, including
expenses relating to the Company's search for acquisition candidates, day-to-day
operational costs and professional fees, were $217,000 for the three months
ended March 31, 1995 and 1994. During 1995, the Company incurred increased legal
expenses relating to a lawsuit regarding the scheduling of the Annual Meeting of
Shareholders which was offset by reduced expenses relating to the move of the
Company's headquarters to a less expensive location and the elimination of the
office secretary.
Interest income increased to $171,000 for the three
months ended March 31, 1995, from $89,000 for the three months ended March 31,
1994. The increase is attributable to higher average cash and cash-equivalent
balances as a result of the Company's revenue from and sale of revenue-earning
equipment and an increase in interest rates.
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If the Company is unable to acquire control of an
operating business or businesses, it may be required to register as an
investment company under the Investment Company Act of 1940, as amended ("Act").
The Company is unable to predict what effect registration under such Act would
have, but it believes that its ability to pursue its current business plan could
be adversely affected as a result. The most significant difference with respect
to financial statement presentation and disclosure requirements for companies
registered under the Act would require the investments held by the Company to be
adjusted to market value at the balance sheet date. Given the nature of the
investments held by the Company, the Company believes that the financial
statement reporting and disclosure requirements would not be materially
different from those presented herein.
As of December 31, 1994, the Company has net operating
loss carryforwards of approximately $91,000,000 and $89,000,000 for financial
reporting and tax purposes, respectively, which are available to offset future
taxable income expiring from 1995 through 2009. The Company also has available
investment and research and development credits of approximately $2,000,000
expiring in 1995 through 2000. The ability of the Company to utilize these
carryforwards in future years may be limited, or even eliminated.
Specifically, the Internal Revenue Code of 1986, as
amended (the "Code"), imposes substantial limitations under certain
circumstances on the use of net operating loss carryforwards upon the occurrence
of an "ownership change" (as defined in Section 382 of the Code). An "ownership
change" can result from issuances of equity securities by the Company, purchases
of the Company's securities by the Company, purchases of the Company's
securities in the secondary market by existing or new stockholders or a
combination of the foregoing. The Company's desire to issue new equity
securities could be limited in order to prevent such an "ownership change" from
occurring. Alternatively, certain shareholders could occasion an ownership
change if they substantially increased their ownership of the Company's Common
Stock.
Liquidity and Capital Resources
Cash and cash equivalent balances decreased to
$11,195,000 as of March 31, 1995, including United States Treasury Bills of
$10,986,000, compared with $11,228,000 as of December 31, 1994, including United
States Treasury Bills of $11,014,000. The decrease is primarily attributable to
the payment of general and administrative expenses.
As of March 31, 1995, the Company's principal source
of funds consisted of $11,195,000 in cash and cash equivalents, including United
States Treasury Bills of $10,986,000. 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. The Company
may finance future acquisitions from a number of sources, including but not
limited to existing cash balances, bank debt, the use of promissory notes and
the issuance of additional debt or equity.
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<PAGE> 11
PART II. Other Information
Item 1. Legal Proceedings
Reference is made to Notes 6 and 7 in the Notes to
Consolidated Financial Statements for the year ended December 31, 1994, included
in the Tigera Group, Inc. Form 10-KSB Annual Report to the Securities and
Exchange Commission.
Item 2. Exhibits and Reports on Form 8-K
(a) Exhibits - None.
(b) Reports on Form 8-K: No reports were filed on
Form 8-K during the three months ended March
31, 1995.
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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 thereunto duly authorized.
TIGERA GROUP, INC.
(Registrant)
By: /s/ Robert E. Kelly
----------------------------------
Robert E. Kelly
Senior Vice President
Chief Financial Officer and
Principal Accounting Officer
Dated: April 27, 1995
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EXHIBIT INDEX
Exhibit No. Description Page No.
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Ex-27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 11,195,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 12,244,000
<CURRENT-LIABILITIES> 82,000
<BONDS> 0
<COMMON> 213,000
0
0
<OTHER-SE> 11,949,000
<TOTAL-LIABILITY-AND-EQUITY> 12,244,000
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 217,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (46,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (46,000)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
