<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-KA
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported) MAY 14, 1999
- -------------------------------------------------------------------------------
SEMELE GROUP INC.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 0-16886 36-3465422
- -------------------------------------------------------------------------------
(State or other jurisdiction of (Commission (IRS Employer
incorporation or organization) File Number) Identification Number)
ONE CANTERBURY GREEN, STAMFORD, CONNECTICUT 06901
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (203) 363-0849
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- -------------------------------------------------------------------------------
(Former name or former address, if changed since last report.)
<PAGE>
SEMELE GROUP INC.
FORM 8-KA
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
This report on Form 8-KA provides financial statements and exhibits required
pursuant to Item 7 of Form 8-K resulting from the acquisition of Ariston
Corporation ("Ariston") by Semele Group Inc. (the "Company" or the
"Registrant"). Information required pursuant to Item 2, Acquisition or
Disposition of Assets, is included in Form 8-K filed by the Registrant on
September 15, 1998.
SUMMARY
Ariston was organized on July 31, 1998 as a Delaware corporation by Equis
Financial Group Limited Partnership ("Equis"). On August 3, 1998, Equis
contributed its limited partnership interests in two majority owned
subsidiaries, AFG Eireann Limited Partnership ("AFG Eireann") and Old North
Capital Limited Partnership ("ONC"), to Ariston in exchange for Ariston common
stock. On August 31, 1998, the Company executed an agreement to acquire all of
the common stock of Ariston from Equis for a total purchase price of
$12,450,000.
Ariston was formed principally to facilitate the transfer of limited partnership
interests held by Equis to the Company. Ariston has no business activities other
than through its limited partnership interests in AFG Eireann, which holds an
intangible tax interest in a portfolio of leases, and ONC, which owns equipment
on lease to third parties, limited partnership units in several affiliated
equipment leasing programs, and certain other assets. Gary D. Engle, Chairman,
Chief Executive Officer and a director of the Company, has control over AFG
Eireann, ONC, and Equis. Accordingly, the accompanying combined audited
financial statements of ONC and AFG Eireann, consisting of an audited balance
sheet at December 31, 1997, and audited statements of operations, cash flows and
changes in partners' capital for each of the years ended December 31, 1997 and
1996, include AFG Eireann and ONC as entities under common control.
The Registrant also has included a pro-forma balance sheet that reflects the
effect of the acquisition on the Company assuming it had occurred on December
31, 1997. In addition, the Registrant has included pro-forma statements of
operations for the year ended December 31, 1997 and for each of the nine month
periods ended September 30, 1998 and 1997 that reflect the effect of the
acquisition on the Company assuming it had occurred on January 1, 1997. The
Registrant has recorded the acquisition of Ariston using the purchase method of
accounting, which method is reflected in the pro-forma financial statements.
2
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Partners of Old North Capital Limited Partnership and
AFG Eireann Limited Partnership:
We have audited the accompanying combined balance sheet of Old North
Capital Limited Partnership and AFG Eireann Limited Partnership as of December
31, 1997, and the related combined statements of operations, cash flows and
changes in partners' capital for the years ended December 31, 1997 and 1996.
These financial statements are the responsibility of Old North Capital Limited
Partnership's and AFG Eireann Limited Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the combined financial statements. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the combined financial position of Old North
Capital Limited Partnership and AFG Eireann Limited Partnership at December 31,
1997, and the combined results of its operations and its cash flows for the
years ended December 31, 1997 and 1996, in conformity with generally accepted
accounting principles.
ERNST & YOUNG LLP
Boston, Massachusetts
May 5, 1999
3
<PAGE>
OLD NORTH CAPITAL LIMITED PARTNERSHIP AND AFG EIREANN LIMITED PARTNERSHIP
COMBINED BALANCE SHEET
DECEMBER 31, 1997
<TABLE>
<CAPTION>
<S> <C>
ASSETS
Cash and cash equivalents .................................... $ 9,307,434
Rents receivable ............................................. 144,486
Accounts receivable - affiliate .............................. 1,116,823
Interest receivable - affiliates ............................. 367,056
Other receivables ............................................ 35,000
Investments in partnerships and trusts ....................... 2,649,387
Note receivable from affiliates .............................. 3,990,070
Equipment on operating leases, net of accumulated depreciation
of $500,116 ................................................ 86,618
------------
Total assets ................................................. $ 17,696,874
------------
------------
LIABILITIES AND PARTNERS' CAPITAL
Notes payable ................................................ $ 1,436,850
Accrued interest ............................................. 73,642
Accrued expenses - affiliates ................................ 578,917
Accrued expenses ............................................. 20,000
Deferred income .............................................. 177,365
------------
Total liabilities ............................................ 2,286,774
------------
Partners' capital:
General Partners ........................................... 25,643
Limited Partners ........................................... 15,868,644
Subscriptions receivable ................................... (484,187)
------------
Total partners' capital ...................................... 15,410,100
------------
Total liabilities and partners' capital ...................... $ 17,696,874
------------
------------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements
4
<PAGE>
OLD NORTH CAPITAL LIMITED PARTNERSHIP AND AFG EIREANN LIMITED PARTNERSHIP
COMBINED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
---------- ----------
<S> <C> <C>
INCOME
Lease revenue ................ $1,647,850 $2,809,633
Interest income .............. 1,119,343 273,264
Income from investments ...... 418,455 --
Other income ................. 434,895 177,335
Gain on sale of equipment .... 1,418,445 827,644
---------- ----------
Total income ................. 5,038,988 4,087,876
---------- ----------
EXPENSES
Depreciation ................. 283,155 485,780
Interest expense ............. 133,474 152,946
Operating expenses - affiliate 359,467 474,467
---------- ----------
Total expenses ............... 776,096 1,113,193
---------- ----------
Net income ................... $4,262,892 $2,974,683
---------- ----------
---------- ----------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements
5
<PAGE>
OLD NORTH CAPITAL LIMITED PARTNERSHIP AND AFG EIREANN LIMITED PARTNERSHIP
COMBINED STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
General Limited
Partner Partners Total
------------- ------------- -------------
<S> <C> <C> <C>
Balance at December 31, 1995 .... $ 24,385 $ 2,414,088 $ 2,438,473
Contributions ................... -- 5,685,000 5,685,000
Distributions ................... -- (1,990,768) (1,990,768)
Net income ...................... 29,747 2,944,936 2,974,683
------------- ------------- -------------
Balance at December 31, 1996 .... 54,132 9,053,256 9,107,388
Contributions ................... -- 324,428 324,428
Subscribed contributions received -- 8,830,813 8,830,813
Distributions ................... (71,118) (7,044,303) (7,115,421)
Net income ...................... 42,629 4,220,263 4,262,892
------------- ------------- -------------
Balance at December 31, 1997 .... 25,643 15,384,457 15,410,100
------------- ------------- -------------
------------- ------------- -------------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements
6
<PAGE>
OLD NORTH CAPITAL LIMITED PARTNERSHIP AND AFG EIREANN LIMITED PARTNERSHIP
COMBINED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ............................................. $ 4,262,892 $ 2,974,683
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation ......................................... 283,155 485,780
Gain on sale of equipment ............................ (1,418,445) (827,644)
Income from investments .............................. (418,455) --
Net Change In:
Rents receivable ..................................... 383,982 41,857
Accounts receivable - affiliate ...................... (205,918) (369,331)
Interest Receivable - affiliates ..................... (367,056) --
Other receivables .................................... 448,487 26
Accrued interest ..................................... 55,649 17,516
Accrued expenses - affiliates ........................ (447,541) 889,388
Accrued expenses ..................................... (40,632) (513,714)
Deferred income ...................................... (354,640) 532,005
------------ ------------
Net Cash Provided By Operating Activities .............. 2,181,478 3,230,566
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment ................................ -- (303,387)
Proceeds from sale of equipment ...................... 1,673,946 1,542,985
Note receivable from affiliates ...................... (3,990,070) --
Investments in partnerships and trusts ............... (630,932) (1,600,000)
------------ ------------
Net Cash Used In Investing Activities .................. (2,947,056) (360,402)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Contributions from former Partner .................... 324,428 --
Contributions received ............................... 8,830,813 5,685,000
Distributions paid ................................... (7,115,421) (1,990,768)
Notes payable ........................................ (746,059) 352,306
------------ ------------
Net Cash Provided By (Used In) Financing Activities .... 1,293,761 4,046,538
------------ ------------
Net increase in cash and cash equivalents .............. 528,183 6,916,702
Cash and cash equivalents at beginning of period ....... 8,779,251 1,862,549
------------ ------------
Cash and cash equivalents at end of period ............. $ 9,307,434 $ 8,779,251
------------ ------------
------------ ------------
Supplemental disclosure of cash flow information:
Cash paid during the period for interest ............. $ 77,825 $ 135,430
------------ ------------
------------ ------------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements
7
<PAGE>
OLD NORTH CAPITAL LIMITED PARTNERSHIP AND AFG EIREANN LIMITED PARTNERSHIP
NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 1 - ORGANIZATION AND OWNERSHIP
The financial statements combine the two majority owned subsidiaries of
Equis Financial Group Limited Partnership ("Equis"): (i) a 99% limited
partnership interest in AFG Eireann Limited Partnership ("AFG Eireann"), a
Massachusetts limited partnership having a tax interest in a diversified pool of
lease contracts owned by an institutional investor and (ii) a 98% limited
partnership interest in Old North Capital Limited Partnership ("ONC" or
collectively with AFG Eireann the "Company"), a Massachusetts limited
partnership. ONC has investments in (i) cash, (ii) a portfolio of equipment
leases, (iii) limited partnership units of several direct-participation
equipment leasing programs sponsored and managed by EFG, (iv) general and
limited partnership interests in a real estate partnership sponsored by EFG that
owns two commercial buildings leased to an investment-grade educational
institution, and (v) a note receivable having a principal balance of
approximately $3.99 million that is due from Messrs. Engle and Coyne.
Ariston Corporation ("Ariston") is a Massachusetts corporation organized on
July 31, 1998 as a wholly-owned subsidiary of Equis. On August 3, 1998, Equis
contributed its limited partnership interests in AFG Eireann and ONC to Ariston
in exchange for Ariston common stock. Ariston is a holding company that was
created principally to facilitate the sale of limited partnership interests held
by Equis to an affiliate, Semele Group Inc. Ariston has no business activities
other than through its limited partnership interests in AFG Eireann and ONC.
The general partner of ONC, with a 1% controlling interest, is ONC I
Corporation ("ONC I"), a Massachusetts corporation. At December 31, 1997, ONC
had two limited partners: (i) Equis with a 49% limited partner interest and (ii)
Old North Capital Corporation with a 50% limited partner interest. Equis
acquired an additional 49% limited partner interest in ONC from Old North
Capital Corporation in 1998. ONC I Corp. is controlled by Gary D.
Engle.
The general partner of AFG Eireann, with a 1% controlling interest, is AFG
Ireland, Inc., a Massachusetts corporation. At December 31, 1997, the sole 99%
limited partner of AFG Eireann was Equis. AFG Ireland, Inc. is controlled by
Gary D. Engle.
NOTE 2 - BASIS OF PRESENTATION
Gary D. Engle, Chairman, Chief Executive Officer and sole director of
Ariston, has control over AFG Eireann, ONC, and Equis. Accordingly, the
accompanying audited combined financial statements of the Company, consisting of
an audited combined balance sheet at December 31, 1997, and audited combined
statements of operations, cash flows and changes in partners' capital for each
of the years ended December 31, 1997 and 1996, include AFG Eireann and ONC as
entities under common control.
8
<PAGE>
OLD NORTH CAPITAL LIMITED PARTNERSHIP AND AFG EIREANN LIMITED PARTNERSHIP
NOTES TO COMBINED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
STATEMENT OF CASH FLOWS
The Company considers liquid investment instruments purchased with a
maturity of three months or less to be cash equivalents. From time to time, the
Company invests excess cash with large institutional banks in federal agency
discount notes and in reverse repurchase agreements with overnight securities.
Under the terms of the agreements, title to the underlying securities passes to
the Company. The securities underlying the agreements are book entry securities.
At December 31, 1997, the Company had no cash invested in federal agency
discount notes and in reverse repurchase agreements secured by U.S. Treasury
Bills or interests in U.S. Government securities.
EQUIPMENT ON OPERATING LEASE
The Company holds equipment on operating leases for its own portfolio which
is depreciated using the straight line method over the equipment's estimated
useful life. Rental income and interest expense associated with equipment on
operating leases are recognized as earned and incurred, respectively. At
December 31, 1997, the Company's equipment portfolio consisted of equipment with
a cost and accumulated depreciation of $586,734 and $500,116, respectively.
At December 31, 1997, future minimum rents due in connection with equipment
on operating leases was as follows:
<TABLE>
<CAPTION>
<S> <C>
For the year ending December 31, 1998 $ 495,587
1999 139,551
2000 68,673
--------------
Total $ 703,811
--------------
--------------
</TABLE>
USE OF ESTIMATES
The preparation of the combined financial statements in conformity with
generally accepted accounting principles requires the use of estimates and
assumptions that affect the amounts reported in the combined financial
statements and accompanying notes. Actual results could differ from those
estimates.
INVESTMENTS IN PARTNERSHIPS AND TRUSTS - AFFILIATES
The Company uses the equity method to account for investments in affiliated
partnerships and trusts in which the Company's percentage ownership is greater
than 5%. The Company uses the cost method to account for investments in
affiliated partnerships and trusts in which the Company's percentage ownership
is less than 5%.
9
<PAGE>
OLD NORTH CAPITAL LIMITED PARTNERSHIP AND AFG EIREANN LIMITED PARTNERSHIP
NOTES TO COMBINED FINANCIAL STATEMENTS
(CONTINUED)
INCOME TAXES
No provision or benefit from income taxes is included in the accompanying
financial statements. ONC and AFG Eireann were partnerships during the
historical period and all income taxes were the responsibility of the partners.
If these entities had been a corporate form during this period, the tax expense
would have been approximately $1,705,000 and $1,190,000 for the years ended
December 31, 1997 and 1996, respectively.
NOTE 4 - NOTES PAYABLE
The Company has debt of $929,216 related to its limited partnership
interest in a real estate partnership. The note bears a fluctuating interest
rate based on prime plus a margin and requires quarterly payments of principal
and interest. The note matures on January 15, 2003 and is secured by the
associated limited partnership interest. Repayment of the debt is partially
guaranteed by certain individuals, including Messrs.
Engle and Coyne.
Additionally, the Company has $507,634 of non-recourse debt, consisting of
installment notes that are collateralized by certain equipment held on operating
leases. The installment notes will be repaid fully by non-cancelable rents
generated by the associated lease agreements. At December 31, 1997, the interest
rates on these obligations ranged from 7.1% to 12.5%. The carrying value
approximates fair value at December 31, 1997.
The annual maturities of the installment notes payable are as follows:
<TABLE>
<CAPTION>
<S> <C>
For the year ending December 31, 1998 $ 395,700
1999 219,035
2000 218,838
2001 184,258
2002 201,903
2003 217,116
--------------
Total $ 1,436,850
--------------
--------------
</TABLE>
NOTE 5 - RELATED PARTY TRANSACTIONS
All rents and proceeds from the sale of equipment are paid directly to
either Equis or to a lender. Equis temporarily deposits collected funds in a
separate interest-bearing escrow account prior to remittance to the Partnership.
At December 31, 1997, the Company was owed $1,116,823 by Equis for such funds
and the interest thereon. These funds were remitted to the Company in January
1998.
The Company owns limited partnership units in several affiliated investment
programs which are engaged in either equipment leasing or real estate.
10
<PAGE>
OLD NORTH CAPITAL LIMITED PARTNERSHIP AND AFG EIREANN LIMITED PARTNERSHIP
NOTES TO COMBINED FINANCIAL STATEMENTS
(CONTINUED)
Gary D. Engle owns all of the voting stock, and has a one-third equity
interest in, and is a director of the general partner of ONC. James A. Coyne
owns non-voting stock, and has a one-third equity interest in, and is a director
of the general partner of ONC.
NOTE 6 - YEAR 2000 (UNAUDITED)
The Year 2000 Issue generally refers to the capacity of computer
programming logic to correctly identify the calendar year. Many companies
utilize computer programs or hardware with date sensitive software or embedded
chips that could interpret dates ending in "00" as the year 1900 rather than the
year 2000. In certain cases, such errors could result in system failures or
miscalculations that disrupt the operations of the affected businesses. The
Company uses information systems provided by EFG and has no information systems
of its own. EFG has adopted a plan to address the Year 2000 Issue that consists
of four phases: assessment, remediation, testing, and implementation and has
elected to utilize principally internal resources to perform all phases. EFG has
completed substantially all of its Year 2000 project at an aggregate cost of
less than $50,000 and at a di minimus cost to the Company. All costs incurred in
connection with EFG's Year 2000 project have been expensed as incurred.
EFG's primary information software was coded by IBM at the point of
original design to use a four digit field to identify calendar year. All of the
Company's lease billings, cash receipts and equipment remarketing processes are
performed using this proprietary software. In addition, EFG has gathered
information about the Year 2000 readiness of significant vendors and third party
servicers and continues to monitor developments in this area. All of EFG's
peripheral computer technologies, such as its network operating system and
third-party software applications, including payroll and electronic banking,
have been evaluated for potential programming changes and have required only
minor modifications to function properly with respect to dates in the year 2000
and thereafter. EFG understands that each of its and the Company's significant
vendors and third-party servicers are in the process, or have completed the
process, of making their systems Year 2000 compliant. Substantially all parties
queried indicated that their systems would be Year 2000 compliant by the end of
1998.
Presently, EFG is not aware of any outside customer with a Year 2000 Issue
that would have a material effect on the Company's results of operations,
liquidity, or financial position. The Company's equipment leases were structured
as triple net leases, meaning that the lessees are responsible for, among other
things, (i) maintaining and servicing all equipment during the lease term, (ii)
ensuring that all equipment functions properly and is returned in good
condition, normal wear and tear excepted, and (iii) insuring the assets against
casualty and other events of loss. Non-compliance with lease terms on the part
of a lessee, including failure to address Year 2000 Issues, could result in lost
revenues and impairment of residual values of the Company's equipment assets
under a worst-case scenario.
EFG believes that its Year 2000 compliance plan will be effective in
resolving all material Year 2000 risks in a timely manner and that the Year 2000
Issue will not pose significant operational problems with respect to its
computer systems or result in a system failure or disruption of its or the
Company's business operations. However, EFG has no means of ensuring that all
customers, vendors and third-party servicers will conform ultimately to Year
2000 standards. The effect of this risk to the Company is not determinable.
11
<PAGE>
OLD NORTH CAPITAL LIMITED PARTNERSHIP AND AFG EIREANN LIMITED PARTNERSHIP
NOTES TO COMBINED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 7 - SUBSEQUENT EVENT
On August 31, 1998, all of the outstanding stock of Ariston was sold by
Equis to Semele Group Inc.
12
<PAGE>
PRO-FORMA FINANCIAL INFORMATION
The balance sheet of the Registrant at September 30, 1998 reflects the
effect of acquisition of Ariston and is not re-presented herein.
The accompanying pro-forma statements of operations for the year ended
December 31, 1997 and for each of the nine month periods ended September 30,
1998 and 1997 reflect the effect of the acquisition of Ariston to the Registrant
assuming it had occurred on January 1, 1997. The Ariston income statements are
included under the pro forma adjustments column. The Registrant has recorded the
acquisition of Ariston using the purchase method of accounting, which method is
reflected in the pro-forma financial statements.
13
<PAGE>
SEMELE GROUP INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
Historical Pro forma Pro forma
Statements Adjustments Results
----------- ------------ ------------
<S> <C> <C> <C>
INCOME
Income From Lending and Investing Activities:
Interest on Loans Receivable .................................... $ 28,333 $ -- $ 28,333
Income on Investments ........................................... 206,308 648,898 855,206
----------- ------------ ------------
Total Income From Lending and Investing Activities ................ 234,641 648,898 883,539
----------- ------------ ------------
Other Income:
Lease Revenue ................................................... -- 1,647,850 1,647,850
Interest on Note Receivable - Affiliate ......................... -- 888,900 888,900
Other Income .................................................... -- 434,895 434,895
Gain on Sale of Equipment ....................................... -- 1,418,445 1,418,445
----------- ------------ ------------
Total Other Income ................................................ -- 4,390,090 4,390,090
----------- ------------ ------------
Total Income ...................................................... 234,641 5,038,988 5,273,629
----------- ------------ ------------
EXPENSES
Expenses From Property Operating Activities:
Net Loss From Operations of Foreclosed Real Estate Held for Sale. 660,994 -- 660,994
Net Loss From Disposition of Foreclosed Real Estate Held for Sale 32,612 -- 32,612
Net Income From Operations of Real Estate Venture ............... (412,236) -- (412,236)
----------- ------------ ------------
Total Expenses From Property Operating Activities ................. 281,370 -- 281,370
----------- ------------ ------------
Other Expenses:
Stockholder Expenses ............................................ 120,031 -- 120,031
Directors' Fees, Expenses, and Insurance ........................ 234,075 -- 234,075
Other Professional Fees ......................................... 371,966 -- 371,966
General and Administrative ...................................... 1,007,307 444,725 1,452,032
Administrative Reimbursement - Affiliate ........................ 49,166 -- 49,166
Interest Expense - Affiliates ................................... 108,947 -- 108,947
Depreciation Expense ............................................ -- 283,155 283,155
Interest Expense ................................................ -- 133,474 133,474
Recovery of Losses on Loans, Notes and Interest Receivable ...... 1,166,246 -- 1,166,246
----------- ------------ ------------
Total Other Expenses .............................................. 3,057,738 861,354 3,919,092
----------- ------------ ------------
Total Expenses .................................................... 3,339,108 861,354 4,200,462
----------- ------------ ------------
Net Income (Loss) ................................................. $(3,104,467) $ 4,177,634 $ 1,073,167
----------- ------------ ------------
----------- ------------ ------------
Net Income (Loss) Per Share of Common Stock Basic
(Based on the Weighted Average Number of Shares
Outstanding of 1,127,561) ....................................... $ (2.75) $ 3.71 $ 0.95
----------- ------------ ------------
----------- ------------ ------------
</TABLE>
14
<PAGE>
SEMELE GROUP INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
Historical Pro forma Pro forma
Statements Adjustments Results
----------- ------------ ------------
<S> <C> <C> <C>
INCOME
Income From Lending and Investing Activities:
Interest on Loans Receivable ................................... $ 24,705 $ -- $ 24,705
Income on Investments .......................................... 290,880 34,675 325,555
----------- ------------ ------------
Total Income From Lending and Investing Activities ............... 315,585 34,675 350,260
----------- ------------ ------------
Other Income:
Lease Revenue .................................................. 28,590 379,198 407,788
Interest on Note Receivable - Affiliate ........................ 25,763 320,367 346,130
Other Income ................................................... -- 3,297,927 3,297,927
Gain on Sale of Equipment ...................................... 3,400 1,617,914 1,621,314
----------- ------------ ------------
Total Other Income ............................................... 57,753 5,615,406 5,673,159
----------- ------------ ------------
Total Income ..................................................... 373,338 5,650,081 6,023,419
----------- ------------ ------------
EXPENSES
Expenses From Property Operating Activities:
Net Loss From Operations of Foreclosed Real Estate Held for Sale 605,094 -- 605,094
----------- ------------ ------------
Total Expenses From Property Operating Activities ................ 605,094 -- 605,094
----------- ------------ ------------
Other Expenses:
Stockholder Expenses ........................................... 73,960 -- 73,960
Directors' Fees, Expenses, and Insurance ....................... 173,828 -- 173,828
Other Professional Fees ........................................ 84,800 -- 84,800
General and Administrative ..................................... 229,845 199,924 429,769
Administrative Reimbursement - Affiliate ....................... 113,201 -- 113,201
Interest Expense - Affiliates .................................. 391,512 -- 391,512
Depreciation Expense ........................................... 13,518 263,576 277,094
Interest Expense ............................................... 7,067 109,932 116,999
Recovery of Losses on Loans, Notes and Interest Receivable ..... (108,176) -- (108,176)
----------- ------------ ------------
Total Other Expenses ............................................. 979,555 573,432 1,552,987
----------- ------------ ------------
Total Expenses ................................................... 1,584,649 573,432 2,158,081
----------- ------------ ------------
Net Income (Loss) ................................................ $(1,211,311) $ 5,076,649 $ 3,865,338
----------- ------------ ------------
----------- ------------ ------------
Net Income (Loss) Per Share of Common Stock Basic
(Based on the Weighted Average Number of Shares
Outstanding of 1,202,287) ...................................... $ (1.01) $ 4.22 $ 3.21
----------- ------------ ------------
----------- ------------ ------------
</TABLE>
15
<PAGE>
SEMELE GROUP INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
Historical Pro forma Pro forma
Statements Adjustments Results
------------ ------------ ------------
<S> <C> <C> <C>
INCOME
Income From Lending and Investing Activities:
Interest on Loans Receivable .................................... $ 29,694 $ -- $ 29,694
Income on Investments ........................................... 90,686 189,423 280,109
------------ ------------ ------------
Total Income From Lending and Investing Activities ................ 120,380 189,423 309,803
------------ ------------ ------------
Other Income:
Lease Revenue ................................................... -- 1,344,227 1,344,227
Interest on Note Receivable - Affiliate ......................... -- 651,209 651,209
Other Income .................................................... -- 77,839 77,839
Gain on Sale of Equipment ....................................... -- 1,667,838 1,667,838
------------ ------------ ------------
Total Other Income ................................................ -- 3,741,113 3,741,113
------------ ------------ ------------
Total Income ...................................................... 120,380 3,930,536 4,050,916
------------ ------------ ------------
EXPENSES
Expenses From Property Operating Activities:
Net Loss From Operations of Foreclosed Real Estate Held for Sale 451,418 -- 451,418
Net Loss From Disposition of Foreclosed Real Estate Held for Sale 32,612 -- 32,612
Net Income From Operations of Real Estate Venture ............... (412,236) -- (412,236)
------------ ------------ ------------
Total Expenses From Property Operating Activities ................. 71,794 -- 71,794
------------ ------------ ------------
Other Expenses:
Stockholder Expenses ............................................ 112,778 -- 112,778
Directors' Fees, Expenses, and Insurance ........................ 167,545 -- 167,545
Other Professional Fees ......................................... 289,744 -- 289,744
General and Administrative ...................................... 665,121 367,448 1,032,569
Administrative Reimbursement - Affiliate ........................ 29,700 -- 29,700
Interest Expense - Affiliates ................................... 10,178 -- 10,178
Depreciation Expense ............................................ -- 298,905 298,905
Interest Expense ................................................ -- 102,056 102,056
------------ ------------ ------------
Total Other Expenses .............................................. 1,275,066 768,409 2,043,475
------------ ------------ ------------
Total Expenses .................................................... 1,346,860 768,409 2,115,269
------------ ------------ ------------
Net Income (Loss) ................................................. $(1,226,480) $ 3,162,127 $ 1,935,647
------------ ------------ ------------
------------ ------------ ------------
Net Income (Loss) Per Share of Common Stock Basic
(Based on the Weighted Average Number of Shares
Outstanding of 1,105,729) ....................................... $ (1.11) $ 2.86 $ 1.75
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
16
<PAGE>
SEMELE GROUP INC.
FORM 8-K
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
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.
SEMELE GROUP INC.
(Registrant)
By: /S/ JAMES A. COYNE Date: MAY 14, 1999
----------------------- --------------
James A. Coyne
President and Chief Operating
Officer and a Director
17
