SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998
Commission file number 0-20806
FIRSTMARK CORP.
(Name of Small Business Issuer in its Charter)
Maine 01-0389195
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
P.O. Box 1398
Richmond, Virginia 23218
(Address of Principal Executive Offices) (Zip Code)
(804) 648-9048
(Issuer's Telephone Number, Including Area Code)
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $.20 par value
(Title of Class)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act 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 past 90 days.
Yes __X__ No _____
Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. __X__
The issuer's revenues for the fiscal year ended December 31, 1998 were
$__________.
The aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of March 31, 1999 was $1,979,783.
The number of shares outstanding of Common Stock, as of March 31, 1999
was 5,319,876.
DOCUMENTS INCORPORATED BY REFERENCE
Part III -- The Company's definitive Proxy Statement for a Special
Meeting of Shareholders, which was filed with the Commission on January 29,
1999.
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TABLE OF CONTENTS
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PART I
Page
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Item 1. Description of Business.......................................................................3
Item 2. Description of Property......................................................................11
Item 3. Legal Proceedings............................................................................11
Item 4. Submission of Matters to a Vote of Security Holders..........................................13
PART II
Item 5. Market for Common Equity and Related Stockholder Matters.....................................13
Item 6. Management's Discussion and Analysis of Financial Condition
and Results of Operation.....................................................................14
Item 7. Financial Statements.........................................................................18
Item 8. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure.......................................................18
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act............................................18
Item 10. Executive Compensation.......................................................................19
Item 11. Security Ownership of Certain Beneficial Owners and Management...............................19
Item 12. Certain Relationships and Related Transactions...............................................19
Item 13. Exhibits, List and Reports on Form 8-K.......................................................20
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PART I
Item 1. Description of Business
General
Firstmark Corp. (the "Company") was incorporated in Maine in January
1982. The Company makes venture capital and real estate investments either in
the form of pure equity investments or in the form of loans with an equity
participation feature. Until March 5, 1999, the Company was principally engaged
in the business of issuing title insurance through a subsidiary, Southern Title
Insurance Corporation ("STIC"). See "Recent Developments -- Sale of STIC." Until
January 24, 1997, the Company also actively traded public stocks and bonds and
provided financial consulting services to a select number of individuals and
institutions. See "-- Business and Operational Development."
Recent Developments -- Sale of STIC
On March 5, 1999, the Company sold all of the issued and outstanding
capital stock of Investors Southern Corporation ("ISC") (the "Transaction")
pursuant to a Stock Purchase Agreement by and among the Company, Southern
Capital Acquisition Corporation, a Virginia corporation ("SCAC"), ISC, and STIC,
and Old Guard Group, Inc., a Pennsylvania corporation ("Old Guard"), dated as of
December 2, 1998 (the "Stock Purchase Agreement").
The Company is the parent company of SCAC, which owned all of the
outstanding shares of the capital stock of ISC prior to the Transaction. ISC is
a holding company and owns all of the outstanding shares of the capital stock of
STIC, a title insurance company, as well as several other entities conducting
activities related to the title insurance and settlement business. As a result
of the Transaction, ISC and STIC, the Company's principal operating subsidiary,
became wholly owned subsidiaries of Old Guard.
The purchase price paid by Old Guard consists of two components: cash
paid upon the consummation of the Transaction and a three year earn-out to be
paid, if earned, in cash in 2000, 2001 and 2002. Upon the consummation of the
Transaction, Old Guard paid to SCAC $6.75 million by wire transfer of
immediately available funds. In addition, in 2000, 2001 and 2002, SCAC will
receive additional cash payments based on the pre-tax net income of ISC and its
subsidiaries, including STIC, for each of the fiscal years ending December 31,
1999, 2000 and 2001. Such earn-out payments will be paid in cash within 90 days
following the end of each such fiscal year and will be in an amount equal to 25%
of (i) the pre-tax net income of ISC and its subsidiaries, including STIC, for
such fiscal year less (ii) the cumulative net loss of ISC and its subsidiaries,
if any, during all such prior fiscal years.
Pursuant to the Stock Purchase Agreement, Old Guard has agreed to
continue to operate ISC and its subsidiaries in a manner that is consistent with
past practice. In addition, Old Guard has agreed that, when determining ISC's
pre-tax net income, it will not allocate against the revenues of ISC and its
subsidiaries any liabilities or expenses that did not arise in the ordinary
course of business. Finally, Old Guard has agreed that it will not transfer any
of the business operations of ISC and its subsidiaries to itself or one of its
own subsidiaries or sell, assign or otherwise transfer the business of ISC and
its subsidiaries to a third party, whether by sale of assets or stock, merger or
otherwise.
Donald V. Cruickshanks, President, Chief Executive Officer and Chairman
of the Board of the Company, will continue to serve as President and Chief
Executive Officer of STIC.
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Business and Operational Development
Acquisition of STIC. In June 1996, Southern Capital Corp. ("SCC"), the
former parent company of STIC, was merged with and into SCAC. As part of the
merger, the shareholders of SCC received 40,000 shares of the Company's Series
B, cumulative, non-voting preferred stock, par value $.20 per share (the "Series
B Preferred Stock"). The Series B Preferred Stock was not convertible by the
holders, but could be converted by the Company, subject to approval by the
Federal Communications Commission ("FCC"), into not less than 2,000,000 shares
of the Company's common stock, par value $.20 per share (the "Common Stock"),
subject to adjustment if the market price of the Common Stock is less than $4.00
per share at the time of conversion. The Series B Preferred Stock began accruing
dividends on January 1, 1997 and, if not converted by the Company sooner, would
have been redeemable at the option of the holders at a price of $200 per share
after June 30, 1998. The Series B Preferred Stock was converted into shares of
Common Stock in October 1997.
Until March 5, 1999, SCAC, through its subsidiary, STIC, was
principally engaged in the business of issuing title insurance. SCAC also
reviews investment opportunities for its own account. Currently, SCAC is an
investor in Champion Broadcasting Corp. ("Champion"), a small market radio
acquisition company that historically acquired multiple stations in single
markets ranked below the top 150 markets by Arbitron.
Board Review of Company Operations. At the end of 1996, the Company
reviewed several of its operations that were unprofitable. First, Firstmark
Prime Securities, located in Portland, Maine was closed in December 1996. Robert
A. Rice, who had supervised the Portland operations, resigned as an officer and
director of the Company. The Board of Directors also concluded that it was
unlikely that the Company could profitably conduct certain operations located in
Waterville, Maine. Those operations included financial planning, investment
management, estate and tax planning, insurance planning and securities
brokerage. Generally, it was determined that the revenue stream from those
businesses was too uncertain and uneven to justify the related operating
expenses.
In addition to reducing operating expenses, the Board of Directors also
determined that it was important to improve the Company's liquidity by
converting non-cash assets to cash and, if possible, extending the maturity of
some or all of the Company's convertible notes, which, if not extended, were due
on April 21, 1997.
Based on these conclusions, the Company devised a plan intended to help
it achieve its short-term goals of reducing expenses and improving liquidity,
consistent with its clients' interests and its contractual obligations.
Sale of Subsidiaries and Resignation of Officers. Effective January 24,
1997, the Company transferred the stock of three subsidiaries, Firstmark Capital
Corp., Firm Investment Corp. and Firstmark Properties, Inc. to Ivy L. Gilbert.
These subsidiaries conducted the operations that the Company decided to
discontinue. At the time of the transfers, Firstmark Capital Corp. had total
assets of approximately $156,000 and net assets of approximately $56,000; Firm
Investment Corp. had total assets of approximately $47,000 and net assets of
approximately $47,000; and Firstmark Properties, Inc. had total assets of
approximately $1,000 and net assets of approximately $1,000. When the stock of
the subsidiaries was transferred to Ms. Gilbert, she resigned as an officer and
employee of the Company. Ms. Gilbert agreed to serve the Company as a consultant
until July 1997. In addition to the transfer of the subsidiaries, Ms. Gilbert
received $30,000, payable over six months, for her services as a consultant and
an additional $28,500 for other assistance relating to the extension of the
maturity of $585,000 of the Company's
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convertible notes. Ms. Gilbert assigned the right to receive the payments for
her services as a consultant to Firstmark Capital Corp.
On January 24, 1997, James F. Vigue resigned as President and Chief
Executive Officer of the Company. Mr. Vigue was a consultant to the Company from
his resignation until January 1998 and continued to serve as the Chairman of the
Board of Directors until November 1998. For his services as a consultant, Mr.
Vigue was to receive $90,000, payable over 12 months. Mr. Vigue assigned the
right to receive these payments to Firstmark Capital Corp.
As a result of these developments, the Company was released from
several obligations. First, in connection with the transfer of the stock of the
subsidiaries to Ms. Gilbert, Firstmark Capital Corp. assumed the Company's
obligations under the lease, dated January 1, 1993, between the Company, as
tenant, and Pinnacle Investment Group ("Pinnacle"), as landlord, for
approximately 4,000 square feet of commercial space at the Company's office in
Waterville, Maine. At the time of the assumption, the rent under the lease,
which terminates on December 31, 2003, was approximately $44,000 per year. The
Company owned the parcel of land on which its administrative office was located.
On January 27, 1997, Pinnacle purchased the land for $55,000.
In addition, in connection with their respective resignations, both Mr.
Vigue and Ms. Gilbert, as officers of the Company, canceled employment
agreements with the Company. Both agreements were for three-year terms that
commenced on May 17, 1996, with renewals by mutual consent of the parties for
successive terms of one year each. Under the agreements, Mr. Vigue and Ms.
Gilbert were each entitled to base compensation of $120,000 per year and
additional compensation based on any fees or commissions that he or she
generated as employees of the Company and its subsidiaries.
Both Mr. Vigue and Ms. Gilbert continued to serve as directors of the
Company until their resignations in November 1998. Donald V. Cruickshanks,
President of STIC, was appointed President and Chief Executive Officer of the
Company on January 24, 1997. Lewis M. Brubaker, Jr., chief financial officer of
SCC at that time, was appointed Chief Financial Officer of the Company on the
same date. Mr. Brubaker resigned on April 25, 1997 to take advantage of a new
employment opportunity.
Conversion of Series B Preferred Stock. On February 25, 1997, in a
special meeting of the Company's shareholders, the Company presented two
proposals that would allow for the conversion of the Series B Preferred Stock.
These two proposals were:
(1) an amendment to the Company's Articles of
Incorporation to increase the amount of authorized Common Stock from
5,000,000 to 30,000,000 shares.
(2) an amendment to the Company's Articles of
Incorporation to opt out of Section 910 of the Maine Business
Corporation Act.
The shareholders approved both proposals, which are described in
further detail in the Company's definitive Proxy Statement for a Special Meeting
of Stockholders, which was filed with the Securities and Exchange Commission on
February 5, 1997.
On March 12, 1997, the Company approved the conversion of the shares of
Series B Preferred Stock into shares of Common Stock, effective in April 1997,
subject to the approval of the FCC. Each outstanding share of Series B Preferred
Stock was converted into 80.7571 shares of Common Stock, which
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figure was calculated based on the average bid and asked stock prices of the
Common Stock during a 20-day period prior to the date of conversion.
The Series B Preferred Stock entitled the holders to dividends
beginning January 1, 1997, and, with the approval of the conversion, dividends
no longer accrued after March 12, 1997. The preferred stock dividend accrued to
that date ($3.16 per share) was paid on August 13, 1997. Additionally, the
approval of the conversion of the Series B Preferred Stock eliminated the
obligation to establish a sinking fund beginning April 1, 1997, for the
redemption of such stock.
Extension of Notes. In March 1997, holders of $585,000 of the Company's
8% convertible notes due April 21, 1997, agreed to extend the maturity date of
the indebtedness evidenced by these notes to March 1, 1999 at an interest rate
of nine percent. This amount represented approximately 57% of the $1,035,000 of
such notes outstanding. As of March 1, 1999, all of these extended notes were
paid in full by the Company. The holders of the remaining $450,000 of notes
redeemed their notes in April 1997.
Restructuring of the Board of Directors. At the beginning of 1998, the
Board of Directors consisted of five members, three of whom (Messrs.
Cruickshanks and Vigue and Ms. Gilbert) were current or former executive
officers of the Company and two of whom (H. William Coogan, Jr. and Susan C.
Coogan, as trustee of The H. William Coogan Irrevocable Trust) were holders of
more than 20% of the issued and outstanding shares of the Company's common
stock.
In April 1998, Mr. and Mrs. Coogan resigned from the Board of
Directors. In May 1998, Steven P. Settlage, the President and a director of
three real estate development and consulting firms in the Richmond, Virginia
area, was appointed to the Board of Directors. In November 1998, Mr. Vigue and
Ms. Gilbert resigned from the Board of Directors, and George H. Morison, the
President and Chief Operating Officer of Patient First Corporation, a provider
of primary medical care based in Richmond, Virginia, was appointed to the Board
of Directors.
Related Industry Segments
The following description is a summary of the Company's historical
operations by industry segment.
Title Insurance
Until their sale to Old Guard on March 5, 1999, the title
insurance-related subsidiaries derived their revenues from policy premiums and
other related fees for title abstracts, binder preparations and escrow closings.
Title insurance policies are issued to buyers of real property and secured real
property lenders. These policies customarily insure against title defects, liens
and encumbrances that are not specifically exempted in the policy. Title
insurance differs from other types of insurance because it is related to past
events which affect title to the property at the time of closing and not to
unforeseen future events. Revenues were generated from 11 directly, indirectly
and/or partially owned and operated offices as well as an agency network of over
100 agents. The majority of these revenues were generated in Ohio and Virginia.
The sales and marketing efforts of STIC were generally targeted at the
residential housing and commercial real estate markets.
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Venture Capital and Real Estate
The venture capital segment derives its revenue from interest earned on
loans to companies in venture capital situations and from equity returns.
Investment real estate transactions are also considered a source of revenues for
this segment.
Financial Services
Until their sale to Ivy Gilbert on January 24, 1997, the financial
services subsidiaries derived their revenue from commissions and fees generated
from consulting, investment banking, the creation of proprietary investment
products and the marketing of investment and insurance products of other
companies. In addition, the Company invested its own capital in marketable
securities and other investments and made various business and other loans.
There was no geographical limitation of the financial services and
investment segment.
Subsidiaries
The following lists the Company's subsidiaries after the January 24,
1997 transfer of three subsidiaries to Ivy Gilbert (see "-- Business and
Operational Development") and the services that they provide:
QFAN Marketing Services, Inc. Founded: 1984
This subsidiary held certain real estate holdings of the
Company. Its principal holding was sold in April 1997.
Southern Capital Acquisition Corp. Founded: 1996
This subsidiary was established to serve as the corporation
used to acquire the stock of SCC and SCC's subsidiaries. See "--
General." In addition, this subsidiary holds certain securities
holdings of the Company.
The following lists the subsidiaries of ISC, a subsidiary of the
Company until its sale to Old Guard on March 5, 1999 (see "Recent Developments
- -- Sale of STIC"), and the services that they provide. ISC served as the holding
company for the Company's title insurance and related operations.
Southern Title Insurance Corporation Acquired: 1996 (Founded in 1925)
This subsidiary is a title insurance underwriter. It operates
through a combination of 10 direct offices and over 100 agents.
Southern Title Agency Corporation Acquired: 1996
This subsidiary is a title insurance agency for two of the
national title insurance underwriters.
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Southern Abstractors Corporation Acquired: 1996
This subsidiary performs all title examinations and abstracts
for all of the title insurance operations. Title examinations and
abstracts involve the researching of court and other land records to
find the status of title to that particular property.
Glasgow Enterprises Corp. Acquired: 1996
This subsidiary is involved in title agency joint ventures
with various partners. These joint ventures and the percentage of
ownership are as follows:
Ashburn Title Services, L.C. 55%
Southern Title of Ohio, Inc. 75%
Southern Title of Ohio, Limited 75%
Southern Title of the Peninsula, LLC 70%
Southern Title of North Carolina, LLC 70%
Southern Agency, LC 70%
Southern Title of Roanoke, LLC 33%
TBD Settlement LLC 50%
Southern Title Services, Inc. Acquired: 1996
This company is a subsidiary of STIC and provides special
title insurance and real estate transaction accommodation functions,
such as exchanger in like kind exchanges and mechanics' lien agent for
construction loans in Virginia.
The following lists three of the Company's former subsidiaries, which
were transferred to Ms. Gilbert, effective January 24, 1997, and the services
that they provided:
Firstmark Capital Corp. Acquired: June 1982
Firstmark Capital Corp. was the Company's financial planning
subsidiary and offered investment management services to affiliated
partnerships by serving as general partner. The subsidiary also offered
investment management, financial planning, estate and tax planning, and
insurance planning. The subsidiary's revenues were derived from
charging fees and receiving commissions on various products. The
subsidiary had been in business since 1972 and was a Federally
Registered Investment Advisory firm, with two certified financial
planners and five financial advisors.
Firm Investment Corp. (formerly Acquired: January 1986
Firstmark Investment Corp.)
This subsidiary also served as the Company's investment
banking and consulting subsidiary. Firm Investment Corp. marketed the
Company's proprietary investment products to other firms and served as
advisor and manager in some cases to the Company's equity funds.
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Firstmark Properties Inc. Founded: 1985
This subsidiary offered commercial and investment real estate
brokerage services primarily to the Company's own holdings. The
subsidiary also advised its former parent company on real estate
related acquisitions and projects. This subsidiary had five State of
Maine Real Estate Agent licensed professionals affiliated with it.
Employees
As of December 31, 1998, the Company and its subsidiaries had
approximately 143 total employees, of which 24 were part-time. The Company
believes that its relations with its employees are good.
Significant Customers
Prior to the sale of the Company`s title insurance-related subsidiaries
to Old Guard on March 5, 1999, the Company did not receive more than 10% of its
business or revenues from any single customer.
Company Operations -- Title Insurance
Competition. The title insurance business is very competitive.
Competition is based primarily on price, service, and expertise. Competition
within the title insurance industry has increased as new local and regional
title insurance operations as well as national companies are vying for market
share. Title insurance underwriters also compete for agents on the basis of
service and commission levels.
Insured Risk and Loss Reserves. The insured risk or "face amount" of
insurance under a title insurance policy is generally equal to either the
purchase price of the property or the amount of the loan secured by the
property. The insurer is also responsible for the cost of defending claims
against the insured title. The insurer's actual exposure at any time is
significantly less than the total face amount of policies in force because the
risk on an owner's policy is often reduced over time as a result of subsequent
transfers of the property and the reissuance of title insurance by other title
insurance underwriters, and the coverage of the lender's policy is reduced and
eventually terminated as a result of payment of the mortgage loan. Because of
these factors, there is no practical way to ascertain the total contingent
liability of a title underwriter on outstanding policies.
In the ordinary course of business, STIC represents and defends the
interests of their insureds and provides on its books for estimated losses and
loss adjustment expenses. In recent years, the cost of defending policy claims
has increased. Title insurers are also sometimes subject to claims arising
outside the insurance contract, such as for alleged negligence in search,
examination or closing, alleged improper claims handling and alleged bad faith.
The damages alleged in such claims may exceed the stated liability limits of the
policies involved.
Liabilities for estimated losses and loss adjustment expenses are
accrued when premium revenues are recognized and are based upon historical and
anticipated loss experience. The resulting liability reflects estimates of net
costs to settle all reported claims and claims incurred but not yet reported to
the company. Loss reserve calculations are based on annual reviews of the actual
paid claims experience. Reserves for losses incurred but not reported (IBNR) are
estimated based on the use of actuarial methods.
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Regulation. The title insurance businesses, in common with those of
other insurance companies, are subject to comprehensive, detailed regulation in
the jurisdictions in which they do business. Such regulation is primarily for
the protection of policyholders rather than for the benefit of investors.
Although their scope varies from place to place, insurance laws in general grant
broad powers to supervisory agencies or officials to examine companies and to
enforce rules or exercise discretion touching almost every significant aspect of
the conduct of the insurance business. These powers include the licensing of
companies and agents to transact business, the imposition of monetary penalties
for rules violations, varying degrees of control over premium rates, the forms
of policies offered to customers, financial statements, periodic reporting,
permissible investments and adherence to financial standards relating to
surplus, dividends and other criteria of solvency intended to assure the
satisfaction of obligations to policyholders.
State holding company acts also regulate changes of control in
insurance holding companies and transactions and dividends between an insurance
company and its parent or affiliates. Although the specific provisions vary, the
holding company acts generally prohibit a person from acquiring a controlling
interest in an insurer incorporated in the state promulgating the act or in any
other controlling person of such insurer unless the insurance authority has
approved the proposed acquisition in accordance with the applicable regulations.
In many states, including Virginia, where STIC is domiciled, "control" is
presumed to exist if 10% or more of the voting securities of the insurer are
owned or controlled by a party, although the insurance authority may find that
such control in fact does or does not exist where a person owns or controls
either a lesser or a greater amount of securities. The holding company acts also
impose standards on certain transactions with related companies, which generally
include, among other requirements, that all transactions be fair and reasonable
and that certain types of transactions receive prior regulatory approval either
in all instances or when certain regulatory thresholds have been exceeded.
The Insurance Law of Virginia limits the maximum amount of dividends
that may be paid without approval by the Virginia Bureau of Insurance.
Reinsurance. STIC reinsures portions of title insurance risks with
unaffiliated insurance companies under reinsurance treaties (or reinsurance
treaty agreements). In such reinsurance agreements, the reinsurer accepts that
part of the risk which STIC, as the primary insurer, decides not to retain, in
consideration for a portion of the premium. Generally, STIC enters into
traditional reinsurance arrangements to diversify its risk and to limit loss
exposure on risks that exceed STIC's self-imposed policy retention limits. These
limits are considered prudent by STIC's management and were well below the $3.4
million limit allowed by statute, as of December 31, 1998. STIC, however,
remains liable to the insureds for the total risk, whether or not the reinsurer
meets its obligations.
At December 31, 1998, STIC ceded all of its reinsurance liability to
one carrier, Fidelity National Title Insurance Company ("Fidelity"), with which
STIC has had a treaty reinsurance agreement since October 1, 1992. Under this
agreement, STIC has reinsured all single policy risk in excess of $250,000 from
October 1, 1992 to August 1, 1996 and all single policy risk in excess of
$300,000 since August 1, 1996. For the years ended December 31, 1998 and 1997,
STIC ceded to Fidelity $192 million and $282 million, respectively.
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Item 2. Description of Property
Corporate Real Estate
Prior to January 24, 1997, the Company leased its executive and
administrative offices, consisting of approximately 4,000 square feet of
commercial space, from the Pinnacle Investment Group ("Pinnacle"), a group
consisting of four individuals, one of whom was an officer of the Company. This
facility was leased from Pinnacle under a fifteen year lease terminating on
December 31, 2003. The lease was renewable and negotiable after five years.
Effective January 24, 1997, Firstmark Capital Corp. assumed the lease
obligation. The Company owned the parcel of land on which its administrative
offices were located. On January 27, 1997, Pinnacle purchased the land for
$55,000. For further information, see Item 1., "Description of Business --
Business and Operational Development," above.
Prior to the sale of the Company's title insurance-related subsidiaries
to Old Guard on March 5, 1999, the Company owned 5,716 square feet of land and a
two-story office building containing 3,842 square feet that contains the
Charlottesville, Virginia office of STIC. The building was not encumbered and
was in good operating condition. The brick structure was built in 1920 and
renovated in 1985.
Investment Real Estate
Investments in real estate are made for possible development of the
property or immediate re-sale. The majority of the real estate owned by the
Company is either developed or undeveloped raw land. In January 1997, the
Company sold a single-family housing unit that was acquired in connection with
the moving of an employee.
The Company's real estate properties are reviewed for impairment
whenever events or circumstances indicate that the carrying value of such
properties may not be recoverable.
Item 3. Legal Proceedings
The Company is involved in litigation from time to time in the ordinary
course of business. Except as noted below, the Company was not involved in any
litigation outside the ordinary course of business.
Lake Anna Litigation. On August 7, 1996, Lake Anna Development, L.C.
("Lake Anna") filed a Motion for Judgment against STIC in the Circuit Court of
Louisa County in the Commonwealth of Virginia. The Motion for Judgment alleged
that STIC breached a contractual obligation under a title insurance policy that
contained affirmative mechanics' lien coverage when STIC denied liability under
the exclusions of the title insurance policy. STIC issued the title insurance
policy at issue to the lender, a federal savings bank, in connection with the
development of certain real estate. Lake Anna alleged that it had succeeded to
the position of the lender. The Motion for Judgment sought relief in the amount
of $1,342,374.38 plus interest from May 6, 1996.
On May 22, 1998, a jury returned a verdict in favor of STIC. On August
5, 1998, following several post-verdict motions by Lake Anna, the court issued a
Final Order entering judgment on the verdict in favor of STIC. Lake Anna noted
its appeal and, on November 5, 1998, filed a Petition for Appeal with the
Virginia Supreme Court, which raises the same issues that were raised by Lake
Anna in its post-verdict motions. STIC subsequently filed a response stating
that there was no error, and counsel for STIC has advised that it is their
opinion that the trial court verdict should be affirmed.
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In March 1999, the court rejected Lake Anna's appeal and affirmed the
trial court verdict in favor of STIC.
Investigation by the Securities and Exchange Commission. The Securities
and Exchange Commission (the "SEC") has entered an Order Directing Private
Investigation and Designating Officers to Take Testimony in a proceeding titled
In the Matter of Firstmark Corp. The SEC is investigating the possible violation
of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, as amended, and
Section 10(b) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5
thereunder by Firstmark Investment Corp. ("FIC"), Firstmark Capital Corp.
("FCC") and the Company. The private investigation focuses on events that have
occurred from, in or before January 1994 to the present. The Company transferred
FIC and FCC to Ivy L. Gilbert, a former director, officer and employee of the
Company, in January 1997.
The Company believes that any events at issue in the SEC's
investigation relate to the Company's prior management, all of whom have
resigned from all of their positions with the Company. Current management of the
Company does not have specific knowledge of the events at issue and is uncertain
as to the matters under investigation by the Commission. The private
investigation remains in its initial stages of discovery, and the Company
continues to cooperate fully with the Commission.
Burden Litigation. On February 16, 1999, D. Frick and Tammy F. Burden
filed a Complaint against the Company in the United States District Court for
the District of Maine. The Complaint is based on certain actions of the Company
beginning in 1992, at which time the Company was acting through its president,
James F. Vigue, in connection with the formation and administration of a trust
holding certain assets of the plaintiffs and the management of such assets. The
Complaint alleges that the Company, in its capacity as a trustee, breached
certain fiduciary and other duties owed to the plaintiffs and their trust,
including several duties relating to a breach of trust under Maine law, and
violated the anti-fraud provisions of the Maine Securities Act and the Maine
Unfair Trade Practices Act. The plaintiffs have included in their request for
relief (i) a complete accounting of the trust from the date that the Company
became trustee to the present, (ii) restitution for breaches of trust in an
amount equal to the damages suffered by the plaintiffs, (iii) monetary damages
in an amount equal to the value of the trust's assets had they been placed in
the hands of a prudent person, (iv) the imposition of a constructive trust over
all assets of the trust distributed or paid to the Company and (v) exemplary and
punitive damages. The plaintiffs contend that their total damages are $510,000.
Pretrial discovery is in its initial stages. The Company has denied all
liability and it intends to defend the lawsuit vigorously.
Other Claims. The Company's current management is also aware, or has
also been advised by counsel for the Company's prior management, that the
Company may be in the future the subject of civil litigation claims that have
been threatened by certain individuals who are or may have been shareholders of
the Company or customers of FIC, FCC or the Company. The Company believes that
any basis for such actions would arise from the conduct of prior management, but
it has insufficient information to assess whether any such claims, if asserted,
would have any merit. The Company has engaged counsel to make an assessment of
these threatened claims, but has not received the results of any such assessment
as of the date of this report. The Company will vigorously defend any such
claims that may be asserted against it.
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<PAGE>
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the period covered by this report.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters
The Common Stock of the Company is traded on the Nasdaq SmallCap Market
under the symbol of "FIRM".
The shares of Common Stock are currently listed on the Nasdaq SmallCap
Market under the symbol of "FIRM." Effective February 1998, the Nasdaq SmallCap
Market's continued listing requirements require, among others things, that
shares listed on the Nasdaq SmallCap Market maintain a minimum bid price of
$1.00 per share. The shares of Common Stock did not maintain this minimum bid
price standard on a consistent basis in 1998 and, on September 29, 1998, the
Nasdaq SmallCap Market notified the Company that the shares of Common Stock
would be subject to delisting proceedings if the Company was unable to
demonstrate compliance with this standard. On December 30, 1998, the Company
requested a hearing to stay a delisting and, on March 11, 1999, the Company
discussed its plan to improve its ability to maintain the listing of the common
stock on the Nasdaq SmallCap Market with a listing qualifications panel of The
Nasdaq Stock Market. The panel is currently evaluating the Company's plan and
the continued listing of shares of Common Stock. In the event that the shares of
Common Stock are delisted, trading of the shares of Common Stock would be
conducted in the over-the-counter trading markets, such as the OTC Bulletin
Board.
The following table sets forth the high and low bid information for the
shares of Common Stock on the Nasdaq SmallCap Market for the quarters indicated.
<TABLE>
<CAPTION>
Bid Information
---------------
High ($) Low ($)
-------- -------
<S> <C> <C>
Fiscal Year Ended December 31, 1997
1st quarter........................................ 3.50 2.00
2nd quarter........................................ 2.25 1.38
3rd quarter........................................ 1.81 1.50
4th quarter........................................ 1.56 0.75
Fiscal Year Ended December 31, 1998
1st quarter........................................ 0.81 0.25
2nd quarter........................................ 2.75 0.63
3rd quarter........................................ 2.13 0.56
4th quarter........................................ 1.06 0.38
</TABLE>
As of April 9, 1999, there were approximately 320 record holders of
Common Stock.
The Company has never declared any cash dividends on the Common Stock,
and any future payment of dividends is solely in the discretion of the Board of
Directors and is dependent upon the
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<PAGE>
earnings and financial condition of the Company and such other factors as the
Board of Directors from time to time may deem relevant.
Item 6. Management's Discussion and Analysis of Financial Condition and
Results of Operation
General
The following discussion provides information about the major
components of the results of operations and financial condition, liquidity and
capital resources of the Company. This discussion and analysis should be read in
conjunction with the Consolidated Financial Statements and Notes to Consolidated
Financial Statements.
In June 1996, SCC was merged with and into SCAC, a subsidiary of the
Company. For further information on this transaction, see Item 1., "Description
of Business - General," above. Accordingly, the Company's results of operations
for the years ended December 31, 1998 and 1997 include the results of SCC for
each entire year, while the results of operations for previous periods include
the results of SCC only for the period from June 7, 1996 forward.
In addition, on February 4, 1997, the Company changed its fiscal year
end from June 30 to December 31. References in the following discussion to
fiscal 1996 or any earlier fiscal year are references to the fiscal years ended
June 30, 1996 or earlier.
On March 5, 1999, the Company sold ISC and its subsidiaries, including
STIC, to Old Guard for $6.75 million in cash and a three year earn-out in cash
based on the pre-tax net income of ISC and its subsidiaries, including STIC, for
each of the fiscal years ending December 31, 1999, 2000 and 2001. See Item 1.,
"Description of Business -- Recent Developments -- Sale of STIC," above.
Generally accepted accounting principles ("GAAP") require that the Company
reflect the effects of the Transaction as of December 31, 1998, including the
loss on disposal, and segregate continuing operations from discontinued
operations. The discussion that follows is presented in a comparable format for
the two most recent fiscal years.
Results of Operations
Fiscal Year Ended December 31, 1998 vs. Fiscal Year Ended December 31, 1997
Continuing Operations
Investment gains amounted to approximately $22,000 for the year ended
December 31, 1998 compared to net gains of $178,000 in the prior year. The net
gains in the prior year were primarily the result of a gain (approximately
$381,000) recognized on the receipt of shares of Intercel stock previously held
in escrow, which was partially offset by losses on the sales of certain
investments, principally small cap stocks. Interest and dividends revenue
decreased approximately $63,000 to $49,000 in 1998 as compared to $112,000 in
1997.
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Operating expenses and general and administrative expenses decreased by
approximately $180,000 during the current year compared to the prior year. This
decrease is primarily the result of the elimination of employee compensation and
benefits and other expenses associated with the resignations of former officers
of the Company and the transfer of several subsidiaries to a former officer in
1997, which was offset in part by increased legal fees pertaining to the DiBello
lawsuit, the investigation by the Securities and Exchange Commission and other
matters pending against the Company. For further information on certain of these
matters, see Item 3, "Legal Proceedings," above. Reserves for loans and
investments increased by $499,000 to $1,125,000 in 1998 compared to $626,000 in
1997. Reserves in the current year included $450,000 relating to the Company's
investments in Champion, approximately $309,000 pertaining to marketable
securities (where the investments were considered to have permanent diminutions
in value), $156,000 relating to two of the Company's remaining venture capital
investments and $210,000 pertaining to its real estate holdings. While some of
these investments may increase in value in the future, reserves were considered
appropriate at this time because currently available information indicated a
deterioration in values or there was a lack of reliable information supporting
the Company's carrying values for those investments.
Discontinued Operations
Title insurance revenues for 1998 increased to approximately $13.8
million, an increase of approximately $3.0 million or 28% compared to title
insurance revenues of approximately $10.8 million in 1997. Approximately $1.7
million of the increase was attributable to increases in title insurance
premiums earned due to the favorable interest rate environment, which has
generated a significant number of refinancings in the residential and commercial
markets, and continued growth in new and existing markets. Significant increases
were also realized in abstract related income. Investment gains decreased to
approximately $7,000 for the current year compared to net gains of $21,000 in
the prior year. Interest and dividends revenue decreased approximately $50,000
to $270,000 for 1998 as compared to $320,000 for 1997. The decrease was
primarily the result of a one-time dividend of approximately $94,000 received in
the prior year.
Operating expenses and general and administrative expenses increased
$1.6 million or 24.0% from 1997 to 1998. The increase is primarily due to
increases in commissions paid to agents and increases in the costs for searches,
examinations and abstracts. Commissions paid to agents in 1998 increased
$563,000 or 14.8%, which is consistent with the increase in agency premiums
earned of 17.0% over 1997. Employee compensation and benefits increased
approximately $1.1 million or 25.1% in 1998 due primarily to expanding
operations at the affiliate level. STIC's loss expense increased $557,000 to
$1,060,000 in 1998 from $502,000 in 1997. The increase was primarily the result
of an increase of $400,000 in the incurred but not reported ("IBNR") claims
liability, which management agreed to as an element of the transaction with Old
Guard.
Fiscal Year Ended December 31, 1997 vs. Fiscal Year Ended December 31, 1996
Total revenues during the year ended December 31, 1997 increased to
$12.2 million, an 88% increase over the prior year, primarily due to the
inclusion of the results of operations of SCC for the entire year as compared to
just over six months in the prior year. Title insurance revenues amounted to
approximately $10.8 million in the current year as compared to $6.6 million in
the prior year. Revenues from commissions and fees decreased from $1.2 million
in the prior year to less than $6,000 in the current year. This change was the
result of management's decision to close certain business operations, which were
not considered profitable, in the latter part of 1996 and to transfer several
subsidiaries to the former chief financial officer in January 1997 in exchange
for the surrender of certain employment and
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<PAGE>
compensation benefits. For further information, see Item 1., "Description of
Business - Business and Operational Development," above. Net investment gains
(losses) amounted to $642,000 in the current year as compared to a loss of
$467,000 in the prior year. The current year included a gain (approximately
$381,000) recognized on the receipt of shares of Intercel stock previously held
in escrow and an additional gain of $98,000 when these and other shares of
Intercel were ultimately sold. Write-offs of loans and investments amounted to
approximately $655,000 in the current year as compared to $1.1 million in 1996.
Approximately $233,000 of the write-offs in the current year related to the
Company's investment in Champion, with the balance relating principally to
venture capital and real estate investments. In the prior year the $1.1 million
loss primarily related to the writeoffs of principally venture capital
investments and loans in several startup companies, where the future value and
collectibility of such amounts were uncertain.
Operating expenses and general and administrative expenses increased to
approximately $12.2 million in the current year compared to $9.1 million in the
prior year. This increase also results from the inclusion of the title insurance
operations, which are very labor intensive, for the full year as compared to
less than seven months of such operations in the prior year.
Liquidity and Capital Resources
Continuing Operations
As a result of the sale of ISC and its subsidiaries, the Company
received $6.75 million from Old Guard on March 5, 1999. After payment of
transaction-related costs, retirement of the Company's 9% Convertible Notes
Payable and retirement of borrowings against the Company's $500,000 line of
credit, the Company retained approximately $5.4 million to invest. Accordingly,
the Company's cash and cash equivalents remaining after the sale are expected to
exceed its obligations as they become due. The Company continues to maintain the
availability of the $500,000 line of credit with First Union National Bank.
Discontinued Operations
The cash and cash equivalents of the discontinued operations were in
excess of $3.0 million at December 31, 1998. Although a significant portion of
that amount (approximately $2.5 million) was held by STIC and is subject to
certain regulatory requirements as to use, such funds are expected to be used
primarily by STIC and, accordingly, should be sufficient to enable STIC and
related companies in the discontinued operations to satisfy their obligations as
they become due. As an element of the sale of their operations, Old Guard
transferred $750,000 as an additional capital contribution to STIC in March
1999. After the closing of the transaction, the discontinued operations became a
part of Old Guard.
Year 2000 Issues
Year 2000 issues relate primarily to the inability of certain
computerized devices (hardware, software and equipment) to process year-dates
properly after 1999. Many existing computer programs have been written using
only two digits to define an applicable year rather than four digits.
Accordingly, on January 1, 2000, many date-sensitive programs and devices may
recognize a date using the two digits "00" as the year 1900 rather than the year
2000. This situation could result in inaccurate processing of data, erroneous
results or other system failures.
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<PAGE>
The Company continues to address the Year 2000 issues relating to its
operations with the intent that it (i) identify areas of potential exposure,
both internal and external to the organization, (ii) assess the risks and costs
associated with eliminating or reducing that exposure, (iii) develop a plan to
take necessary actions before the year 2000 and (iv) consider the need for a
contingency plan to handle the most reasonably likely worst case scenarios.
To date, the Company has primarily focused on the identification and
assessment of its Year 2000 issues. The Company has completed an initial
assessment of its accounting and operational software and discussed the payroll
and human resources software with its third party service provider. Management
believes, based on discussions with software vendors and initial tests of the
accounting and operational software, that such software is currently Year 2000
compliant and that the Company's risks in these areas are minimal. Management
has been told by the Company's third party service provider that the current
version of the payroll and human resources software is also Year 2000 compliant
and plans to perform tests of this system in the near future to assess any
potential problems.
Costs associated with remediation of Year 2000 issues are not expected
to be material to the Company's financial position, results of operations or
cash flows. To date, such costs have totaled less than $10,000, and the Company
expects that future costs will not exceed $10,000. These costs would include
primarily minimal additional data processing consulting costs, purchases of new
personal computers to replace computers that cannot be modified to handle
date-sensitive data correctly and potentially the costs to purchase upgrades to
certain accounting software programs.
No contingency plan has been developed to date since the potential
impact of the Year 2000 issues facing the Company is currently considered to be
minimal. However, management will continue to assess the need for a contingency
plan if additional risks are identified in the further testing of existing,
updated or new hardware and software or if it becomes aware of other concerns
not presently contemplated in the evaluation of the Company's ability to be Year
2000 compliant.
Recent Accounting Pronouncements
Statement of Financial Accounting Standards No. 130 (SFAS 130),
"Reporting Comprehensive Income," established standards for the reporting and
presentation of comprehensive income, which is divided into net income and other
comprehensive income. Other comprehensive income items are to be classified by
their nature and by their related accumulated balances in the appropriate
financial statements of a company. Generally, other comprehensive income
includes transactions not typically recorded as a component of net income such
as foreign currency items, minimum pension liability adjustments, and unrealized
gains and losses on certain debt and equity securities. SFAS 130 requires that
such items be presented with equal prominence on a comparative basis in the
appropriate financial statements for fiscal years beginning after December 15,
1997. Accordingly, the Company is complying with SFAS 130 beginning with its
1998 fiscal year.
Statement of Financial Accounting Standards No. 131 (SFAS 131),
"Disclosures about Segments of an Enterprise and Related Information,"
establishes standards and disclosure requirements for the way companies report
information about operating segments, including related product information,
both in annual and interim reports issued to stockholders. Operating segments
are components of a company about which separate financial information is
available and which are used in determining resource allocations and performance
results. Information such as segment net earnings, appropriate revenue and
expense items and certain balance sheet items are required to be presented. and
such amounts are required to be reconciled to the Company's combined financial
information. This standard is effective for financial statements
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issued for periods ending after December 31, 1997, including interim periods.
The Company is complying with the methodologies and reporting established by
SFAS 131.
In June 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("FAS No. 133"). FAS No. 133 establishes
accounting and reporting standards for derivative instruments and for hedging
activities. FAS No. 133 is effective for all fiscal quarters of fiscal years
beginning after June 15, 1999. The impact of adopting FAS No. 133 has not yet
been determined.
Forward-Looking Statements
Certain statements in this report may constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Although the Company believes that its expectations with respect to
certain forward-looking statements are based upon reasonable assumptions within
the bounds of its business and operations, there can be no assurance that actual
results, performance or achievements of the Company will not differ materially
from any future results, performance or achievements expressed or implied by
such forward-looking statements.
Item 7. Financial Statements
The Company's financial statements required by this Item have not been
completed and will be filed in an amendment to this report. The Company is
attempting to resolve several accounting and financial disclosure issues
relating to the sale of the Company's primary operating subsidiary and related
subsidiaries on March 5, 1999. See Item 1, "Description of Business -- Sale of
STIC," above. As described above, generally accepted accounting principles
("GAAP") require that the Company reflect the effects of such sale as of
December 31, 1998, including the loss on disposal, and segregate continuing
operations from discontinued operations. As a result, the Company is
experiencing difficulty in gathering the requisite data to complete the
financial statements. The Company expects to file an amendment to this report to
include its financial statements within the next five business days.
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
No changes in the Company's independent accountants or disagreements on
accounting and financial disclosure required to be reported hereunder have taken
place.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act
Pursuant to General Instruction E(3) of Form 10-KSB, the information
contained under the headings "Election of Directors -- Nominees for Election"
and "-- Executive Officers Who Are Not Directors" on pages 7 and 8 of the
Company's definitive Proxy Statement for a Special Meeting of Shareholders,
which was filed with the Commission on January 29, 1999, is incorporated herein
by reference.
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Section 16(a) Beneficial Ownership Reporting Compliance. Section 16(a)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
requires the Company's directors and executive officers, and any persons who own
more than 10% of the Company's Common Stock, to file with the Commission reports
of ownership and changes in ownership of the Company's Common Stock. Officers
and directors are required by SEC regulation to furnish the Company with copies
of all Section 16(a) forms that they file. Based solely on review of the copies
of such reports furnished to the Company or written representation that no other
reports were required, the Company believes that, during fiscal year 1998, all
filing requirements applicable to its officers and directors were complied with.
Item 10. Executive Compensation
Pursuant to General Instruction E(3) of Form 10-KSB, the information
contained under the headings "Election of Directors -- Director Compensation,"
"-- Executive Compensation," "-- Stock Options," and "-- Employment Agreements"
on pages 10 and 11 and of the Company's definitive Proxy Statement for a Special
Meeting of Shareholders, which was filed with the Commission on January 29,
1999, is incorporated herein by reference.
Item 11. Security Ownership of Certain Beneficial Owners and Management
Pursuant to General Instruction E(3) of Form 10-KSB, the information
contained under the headings "Election of Directors -- Security Ownership of
Management and Certain Beneficial Owners" on page 9 of the Company's definitive
Proxy Statement for a Special Meeting of Shareholders, which was filed with the
Commission on January 29, 1999, is incorporated herein by reference.
Item 12. Certain Relationships and Related Transactions
The Company obtains certain related party receivables and payables in
the normal course of business and through advances for accommodation. In
addition, the Company has certain loans receivable from related parties at terms
consistent with those provided to other customers. The loans are substantially
secured by real estate mortgages. The balances at December 31, 1998 that
reflected advances and loans to former employees of Firstmark Financial Services
(formerly Financial Capital Corp.), a subsidiary of the Company until January
24, 1997, amounted to $9,773.
Prior to January 24, 1997, the Company leased its executive and
administrative offices, consisting of approximately 4,000 square feet of
commercial space, from the Pinnacle Investment Group ("Pinnacle"), a group
consisting of four individuals, one of whom was an officer of the Company at the
time that the lease was signed. This facility was leased from Pinnacle under a
fifteen year lease terminating on December 31, 2003. The lease was renewable and
negotiable after five years. Effective January 24, 1997, Firstmark Financial
Services (formerly Firstmark Capital Corp.), a former subsidiary of the Company,
assumed the lease obligation. The Company owned the parcel of land on which its
administrative offices were located. On January 27, 1997, Pinnacle purchased the
land for $55,000.
Satisfaction of Obligation to H. William Coogan, Jr. STIC and H.
William Coogan, Jr., a five percent owner of Common Stock and formerly a
director of the Company, were parties to an agreement
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dated January 2, 1998 (the "Coogan Agreement"). Pursuant to the Coogan
Agreement, Mr. Coogan agreed to terminate his employment contract with STIC as
of December 31, 1997 and forego a lump sum payment of $270,000 payable upon such
termination in return for STIC's agreement to pay Mr. Coogan $311,000 over a
three-year period commencing January 2, 1998. Such payments took the form of
monthly payments of $8,639, less applicable withholdings, a portion of which
could have been applied to health insurance, disability coverage and a leased
automobile. STIC's obligation to make such monthly payments terminated on
December 31, 2000. As a condition to the sale of the Company's title
insurance-related subsidiaries to Old Guard on March 5, 1999, the Company was
required to satisfy STIC's remaining obligations under the Coogan Agreement or
provide security for the payment of the monthly benefits otherwise due to Mr.
Coogan under the Coogan Agreement. The Company satisfied STIC's remaining
obligations under the Coogan Agreement with a cash payment of $165,573 to Mr.
Coogan on March 11, 1999.
For related party information, see Note 9 to the Consolidated Financial
Statements.
Item 13. Exhibits, List and Reports on Form 8-K
(a) Exhibits.
3a Articles of Incorporation, as amended, incorporated by reference to
the Company's Annual Report on Form 10-KSB for the fiscal year
ended June 30, 1994.
3b Bylaws, as amended, incorporated by reference to the Company's
Annual Report on Form 10-KSB for the fiscal year ended June 30,
1994.
4a Stock Certificate, incorporated by reference to the Company's
Annual Report on Form 10-KSB for the fiscal year ended June 30,
1994.
4b Convertible notes, incorporated by reference to the Company's
Annual Report on Form 10-KSB for the fiscal year ended June 30,
1994.
4c Preferred "A" stock certificate, incorporated by reference to the
Company's Annual Report on Form 10-KSB for the fiscal year ended
June 30, 1994.
4d Preferred "A" stock warrant, incorporated by reference to the
Company's Annual Report on Form 10-KSB for the fiscal year ended
June 30, 1994.
4e Preferred "B" stock certificate, incorporated by reference to the
Company's Annual Report on Form 10-KSB for the fiscal year ended
June 30, 1996.
(b) Reports on Form 8-K.
On December 7, 1999, the Company filed a Current Report on Form 8-K
dated December 3, 1998 to disclose, under Item 5, the announcement of the
signing of a definitive agreement for the sale of the Company's title
insurance-related subsidiaries to Old Guard.
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SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
FIRSTMARK CORP.
Date: April 15, 1999 By: /s/ Donald V. Cruickshanks
-------------------------------------
Donald V. Cruickshanks
President and Chief Executive Officer
In accordance with Section 13 or 15(d) of the Exchange Act, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Donald V. Cruickshanks President and Chief Executive April 15, 1999
- ------------------------------------------- Officer and Director
Donald V. Cruickshanks (Principal Executive Officer)
/s/ Ronald C. Britt Chief Financial Officer, Secretary and April 15, 1999
- ------------------------------------------- Treasurer (Principal Financial and
Ronald C. Britt Principal Accounting Officer)
Director April __, 1999
- -------------------------------------------
George H. Morison
/s/ Steven P. Settlage Director April 15, 1999
- -------------------------------------------
Steven P. Settlage
</TABLE>
