SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
------------------ ------------------
Commission File Number 333-63987
VILLAGE FINANCIAL CORPORATION
------------------------------------------
(Exact name of Registrant as specified in its Charter)
New Jersey 22-3562091
- ------------------------------- ----------------------
(State or other jurisdiction of I.R.S. Employer
incorporation or organization) Identification Number
590 Lawrence Square Boulevard, Lawrenceville, New Jersey 08648
- -------------------------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (609) 689-1010
--------------
Check whether the issuer: (1) filed all reports required to be
filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the
past 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.
X Yes No
--- ---
As of August 9, 1999, there were 94,850 shares of the Registrant's
common stock, par value $0.10 per share, outstanding. The Registrant has no
other classes of common equity outstanding.
Transitional small business disclosure format:
Yes X No
--- ---
<PAGE>
VILLAGE FINANCIAL CORPORATION
LAWRENCEVILLE, NEW JERSEY
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<S> <C>
Balance Sheet - (Unaudited) as of
June 30, 1999 and December 31, 1998...................................................3
Statement of Operations - (Unaudited) for the three months ended
June 30, 1999 and 1998 and for the period from January 16, 1998 (inception)
to June 30, 1999......................................................................4
Statement of Operations - (Unaudited) for the six months ended
June 30, 1999 and 1998 and for the period from January 16, 1998 (inception)
to June 30, 1999......................................................................5
Statements of Cash Flows - (Unaudited) for the six months ended June 30, 1999
and 1998 and for the period from January 16, 1998 (inception)
to June 30, 1999......................................................................6
Notes to Unaudited Financial Statements...............................................7
Item 2. Management's Discussion and Analysis or
Plan of Operation.........................................................8
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.........................................................9
Item 2. Changes in Securities and Use of Proceeds.................................9
Item 3. Defaults Upon Senior Securities...........................................9
Item 4. Submission of Matters to a Vote of Security Holders.......................9
Item 5. Other Information.........................................................9
Item 6. Exhibits and Reports on Form 8-K..........................................9
SIGNATURES
</TABLE>
2
<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
--------------------
VILLAGE FINANCIAL CORPORATION
BALANCE SHEET
<TABLE>
<CAPTION>
June 30, 1999 December 31, 1998
-------------------- ------------------------
(Unaudited)
<S> <C> <C>
ASSETS
Cash $ 29,685 $ 16,475
Short-term investments 27,270 418,312
Premises and equipment 181,401 140,123
Deferred offering costs 220,130 114,894
Other assets 106,182 103,428
-------------------- ------------------------
Total assets $ 564,668 $ 793,232
==================== ========================
LIABILITIES
Accounts payable and accrued expenses $ 82,818 $ 38,358
-------------------- ------------------------
STOCKHOLDERS' EQUITY
Preferred stock, no par value;
1,000,000 authorized; none outstanding - -
Common stock, par value $.10;
5,000,000 shares authorized;
94,850 shares issued and outstanding 9,485 9,485
Additional paid-in-capital 939,015 939,015
Retained deficit (466,650) (193,626)
-------------------- ------------------------
Total stockholders' equity 481,850 754,874
-------------------- ------------------------
Total liabilities and stockholders' equity $ 564,668 $ 793,232
==================== ========================
</TABLE>
3
<PAGE>
VILLAGE FINANCIAL CORPORATION
STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Period From
Three Months Three Months January 16, 1998
Ended Ended (Inception) to
June 30, 1999 June 30, 1998 June 30, 1999
--------------- --------------- ------------------
<S> <C> <C> <C>
INCOME
Interest $ 1,279 $ 4,522 $ 22,559
Other - - 100
--------------- --------------- ------------------
Total income 1,279 4,522 22,659
--------------- --------------- ------------------
EXPENSES
Salaries and employee benefits 68,691 - 226,824
Occupancy and equipment 32,084 - 91,529
Professional services 2,098 21,505 96,546
Other 10,059 582 74,110
--------------- --------------- ------------------
Total expenses 112,933 22,087 489,009
--------------- --------------- ------------------
Loss before income taxes (111,654) (17,565) (466,350)
Income taxes (300) - (300)
--------------- --------------- ------------------
NET LOSS $ (111,954) $ (17,565) $ (466,650)
=============== =============== ==================
LOSS PER SHARE $ (1.18) N/A $ (4.92)
AVERAGE SHARES OUTSTANDING 94,850 N/A 94,850 (1)
</TABLE>
(1)From May 20, 1998, the date of issuance.
See accompanying notes to the financial statements.
4
<PAGE>
VILLAGE FINANCIAL CORPORATION
STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Period From
Six Months Six Months January 16, 1998
Ended Ended (Inception) to
June 30, 1999 June 30, 1998 June 30, 1999
---------------------- ---------------------- -----------------------
<S> <C> <C> <C>
INCOME
Interest $ 4,363 $ 4,530 $ 22,559
Other 100 - 100
---------------------- ---------------------- -----------------------
Total income 4,463 4,530 22,659
---------------------- ---------------------- -----------------------
EXPENSES
Salaries and employee benefits 150,357 - 226,824
Occupancy and equipment 64,143 - 91,529
Professional services 11,485 31,505 96,546
Other 51,202 582 74,110
---------------------- ---------------------- -----------------------
Total expenses 277,188 32,087 489,009
---------------------- ---------------------- -----------------------
Loss before income taxes (272,724) (27,557) (466,350)
Income taxes (300) - (300)
---------------------- ---------------------- -----------------------
NET LOSS $ (273,024) $ (27,557) $ (466,650)
====================== ====================== =======================
LOSS PER SHARE $ (2.88) N/A $ (4.92)
AVERAGE SHARES OUTSTANDING 94,850 N/A 94,850 (1)
</TABLE>
(1)From May 20, 1998, the date of issuance.
See accompanying notes to the financial statements.
5
<PAGE>
VILLAGE FINANCIAL CORPORATION
STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Period From
Six months Six months January 16, 1998
ended ended (Inception) to
June 30, 1999 June 30, 1998 June 30, 1999
----------------- ----------------- --------------------
OPERATING INCOME
<S> <C> <C> <C>
Net loss $ (273,024) $ (27,557) $ (466,650)
Adjustments to reconcile net loss to net cash
used for operating activities:
Depreciation and amortization 15,789 - 20,892
Net increase in prepaid organization expenses 9,752 - (77,818)
----------------- ----------------- --------------------
Net cash used for operating activities (247,483) (27,557) (523,576)
----------------- ----------------- --------------------
INVESTING ACTIVITIES
Purchase of premises and equipment (72,535) - (217,761)
----------------- ----------------- --------------------
FINANCING ACTIVITIES
Deferred offering costs paid (45,401) - (137,795)
Proceeds from sale of common stock - 948,500 948,500
Advances from organizers (1) - - -
----------------- ----------------- --------------------
Net cash provided by (used for) financing activities (45,401) 948,500 810,705
----------------- ----------------- --------------------
Increase (decrease) in cash and cash equivalents (365,419) 920,943 69,368
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 434,787 - -
----------------- ----------------- --------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 69,368 $ 920,943 $ 69,368
================= ================= ====================
</TABLE>
6
<PAGE>
VILLAGE FINANCIAL CORPORATION
NOTES TO UNAUDITED FINANCIAL STATEMENTS
Note 1 - Basis of Presentation
The accompanying unaudited financial statements have been prepared in
accordance with the instructions to Form 10-QSB and, therefore, do not
necessarily include all information that would be included in audited financial
statements. The information furnished reflects all adjustments that are, in the
opinion of management, necessary for a fair statement of the results of
operations. All such adjustments are of a normal recurring nature. As of the
date of these financial statements, Village Financial Corporation's ("Company")
operations have been limited to in-formation procedures: raising capital,
recruiting officers and staff, obtaining banking facilities and working towards
obtainment of regulatory approval. Since the Company's planned principal
operations have not yet been commenced, no significant revenue has been derived
therefrom. The results of operations for the interim periods are not indicative
of the results that may be expected for a full year and could be materially
different if the company was not an "in-formation" entity and operation.
7
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation
---------------------------------------------------------
Cautionary Statement
Certain statements contained in this filing are "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995, such statements relating to financial results and plans for future
business development activities, and are thus prospective. Such forward-looking
statements are subject to risks, uncertainties and other factors, which could
cause actual results to differ materially from future results expressed or
implied by such forward-looking statements. Potential risks and uncertainties
include, but are not limited to; economic conditions, competition and other
uncertainties detailed from time to time in the Company's Securities and
Exchange Commission filings.
Plan of Operation
Since February 3, 1999, Village Financial Corporation (the "Company")
had been offering a minimum of 425,000 and a maximum of 1,200,000 shares of its
common stock, par value $.10 per share, for a purchase price of $10.00 per share
in a subscription offering (the "Subscription Offering") pursuant to its
Registration Statement on Form SB-2 (File No. 333-63987) declared effective by
the Securities and Exchange Commission ("SEC") on February 3, 1999. The
Subscription Offering expired March 26, 1999, but was extended by the Company. A
new termination date for the Subscription Offering was not established by the
Company. The Subscription Offering could not extend, however, beyond November 6,
1999, without regulatory approval. As of August 9, 1999, the Company had
received subscriptions for 191,422 shares of common stock, well below its
minimum offering amount of 425,000 shares. In addition, the amount of stock
subscribed for is insufficient to provide the minimum amount of initial
regulatory capital to complete the organization of Village Bank, the proposed
Federal savings bank to be wholly-owned by the Company (the "Bank").
The Company previously raised $948,500 in a private offering of 94,850
shares of its common stock at a purchase price of $10.00 per share. These funds
were used to pay for the offering costs and preopening expenses of the Bank and
were substantially exhausted as of August 9, 1999. As a result, on August 9,
1999, the Board of Directors of the Company terminated the Subscription Offering
and subsequently directed the Company's Escrow Agent to refund all subscriptions
received. The Company is currently exploring the possible sale of all or
substantially all of its assets and the dissolution and liquidation of the
Company. The Company will not continue to seek the organization of the Bank.
There can be no assurance that the Company will be able to find a buyer or
dispose of all or substantially all of its assets.
8
<PAGE>
Part II. OTHER INFORMATION
Item 1. Legal Proceedings
-----------------
None.
Item 2. Changes in Securities and Use of Proceeds
-----------------------------------------
(d) Use of Proceeds
(3) (i) the Subscription Offering was terminated as of August
9, 1999;
(ii) There have been no offering proceeds from the
Subscription Offering paid to the Company to date. The
Company's Escrow Agent has been directed by the Company
to refund all subscriptions.
Item 3. Defaults Upon Senior Securities
-------------------------------
None
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
None
Item 5. Other Information
-----------------
None
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) None.
(b) Reports on Form 8-K
None.
9
<PAGE>
SIGNATURES
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.
VILLAGE FINANCIAL CORPORATION
Date: August 9, 1999 By /s/Kenneth J. Stephon
--------------------------------------------
Kenneth J. Stephon, President
(Principal Executive and Accounting Officer)
10
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
QUARTERLY REPORT ON FORM 10-QSB AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL INFORMATION.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 29,685
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 39,683
<INVESTMENTS-MARKET> 39,683
<LOANS> 0
<ALLOWANCE> 0
<TOTAL-ASSETS> 564,668
<DEPOSITS> 0
<SHORT-TERM> 0
<LIABILITIES-OTHER> 82,818
<LONG-TERM> 0
0
0
<COMMON> 9,485
<OTHER-SE> (466,650)
<TOTAL-LIABILITIES-AND-EQUITY> 564,668
<INTEREST-LOAN> 0
<INTEREST-INVEST> 22,559
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 22,559
<INTEREST-DEPOSIT> 0
<INTEREST-EXPENSE> 0
<INTEREST-INCOME-NET> 22,559
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 489,009
<INCOME-PRETAX> (466,350)
<INCOME-PRE-EXTRAORDINARY> (466,350)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (466,350)
<EPS-BASIC> (4.92)
<EPS-DILUTED> 0
<YIELD-ACTUAL> 0
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
