SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 1994
Commission File No. 1-9859
GEV CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Delaware 06-1215192
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
165 Mason Street
Greenwich, Connecticut 06830
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (203) 629-8750
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Class A Common Stock, $.01 par value
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not 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-K or any
amendment to this Form 10-K. [ X ]
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes X No
The aggregate market value of Class A voting stock held by non-
affiliates of the registrant, based on the average high and low bid and ask
prices on the NASD OTC Bulletin Board for such a stock, was approximately
$4,500,000 as of February 23, 1995. As of February 23, 1995, 15,168,663 shares
of the registrant's Class A Common Stock $.01 par value per share, and 3,077,419
shares of the registrant's Class B Common Stock, $.01 par value per share, were
issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
The registrant's Proxy Statement for its 1995 Annual Meeting of
Stockholders, to be held on March 27, 1995, is incorporated by reference into
Part III - Items 11, 12 and 13.
Exhibit index is located at sequential page number 28.
GEV CORPORATION
ANNUAL REPORT ON FORM 10-K
DECEMBER 31, 1994
PAGE
PART I
ITEM 1. BUSINESS 4
ITEM 2. PROPERTIES 5
ITEM 3. LEGAL PROCEEDINGS 5
ITEM 4. VOTE OF SECURITY HOLDERS 5
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS 6
ITEM 6. SELECTED FINANCIAL DATA 7
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 8
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 9
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE 21
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF
THE REGISTRANT 22
ITEM 11. EXECUTIVE COMPENSATION 25
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT 25
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 25
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
AND REPORTS ON FORM 8-K 26
PART 1
ITEM 1. BUSINESS
GEV Corporation ("GEV" or the "Company"), formerly Finevest Foods, Inc., is a
Delaware corporation based in Greenwich, Connecticut.
GEV acts as a holding company for three subsidiaries:
Acquired or
Incorporated
Dairy Holdings, Inc. ("Dairy Holdings") (and its
wholly-owned subsidiaries) 1992
Old Atlanta, Inc. 1987
Old Jacksonville, Inc. 1986
Old Johnson City, Inc. 1985
SEFCO Holdings, Inc. ("SEFCO") 1986
Good Foods Acquisition Corp. ("Good Foods") 1988
Dairy Holdings and its subsidiaries, SEFCO and Good Foods have ceased operations
and have disposed of substantially all of their assets.
BANKRUPTCY REORGANIZATION.
Following the filing on February 4, 1991 of an involuntary bankruptcy petition
against a significant subsidiary, on February 11, 1991, GEV and each of its
operating subsidiaries filed voluntary petitions seeking reorganization under
Chapter 11 of the U.S. Bankruptcy Code (collectively, the "Debtors"). On
February 11, 1992, the Debtors filed two amended plans of reorganization (the
"Plans"). One plan covered GEV (including Good Foods) and its dairy
subsidiaries (the "Reorganized Operating Subsidiaries") (the "Joint Plan"). A
second plan of reorganization was filed for SEFCO, whose operating assets were
sold in June 1991 (the "SEFCO Plan").
On May 15, 1992, Judge George L. Proctor ruled that the Joint Plan and the SEFCO
Plan met the requirements of the Bankruptcy Code and confirmed the Plans. A
confirmation order was entered on June 9, 1992. The confirmation process became
fully effective on July 9, 1992 (the "Effective Date"), and GEV and its
Reorganized Operating Subsidiaries emerged from bankruptcy.
The Joint Plan placed the Reorganized Operating Subsidiaries under a new holding
company subsidiary, Dairy Holdings, with an independent Board of Directors, new
management and separate financing. Through various pre- and post-petition
agreements, GEV and the Reorganized Operating Subsidiaries granted to the then
lending bank group (the "Bank Group") security interests in all of the assets
and property of the Reorganized Operating Subsidiaries. Furthermore, as a
result of the security interests granted to the Banks and the confirmation of
the Plans, GEV did not expect to be able to exercise significant influence over
the operating and financing decisions of the Reorganized Operating Subsidiaries.
GEV therefore changed its method of accounting at December 31, 1991 and
deconsolidated the subsidiaries in its year-end financial statements for all
periods presented.
PRIVATE PLACEMENT
During February 1994, the Company sold 4,410,000 shares primarily to certain of
its directors, including Mr. Berkley, through a private placement for
approximately $1,102,000 in net proceeds. The Company is using the net proceeds
from the Private Placement for general corporate purposes and acquisitions.
EMPLOYEES
At December 31, 1994, GEV employed one person in its headquarters.
ITEM 2. PROPERTIES
GEV maintains a small executive office in leased space in Greenwich,
Connecticut.
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted during the fourth quarter of 1994 to a vote of holders
of the Company's Common Stock.
5
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
The Class A Common Stock of GEV is currently traded on the NASD OTC Bulletin
Board under the ticker symbol: "GEVCA".
Price Range (1)
High Low
1994
Fourth Quarter $15/32 $ 1/8
Third Quarter 9/16 3/8
Second Quarter 3/4 7/16
First Quarter 11/16 1/4
1993
Fourth Quarter $7/16 $1/16
Third Quarter 1/2 1/4
Second Quarter 1/2 1/4
First Quarter 3/4 1/4
There is no established public trading market for GEV's Class B Common Stock.
The number of holders of GEV's Class A and Class B Common Stock at February 23,
1995 was approximately 1,500 and 3, respectively.
(1) This information is obtained from the high and low bid and ask
prices, and is not indicative of actual trading prices should
an investor make a trade on a particular date.
ITEM 6. SELECTED FINANCIAL DATA
The following selected financial data of GEV should be read in conjunction with
the financial statements as of December 31, 1994 and 1993 and for each of the
three years in the period ended December 31, 1994 included elsewhere herein.
The data should also be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" included elsewhere in
this Form 10-K.
<TABLE>
<S><C>
GEV Corporation
Year Ended December 31
1994 1993 1992 1991 1990
(In thousands, except per share data)
Balance Sheet:
Total assets $ 912 $ 217 $ 283 $ 89,566 $118,846
Long-term obligations - - 478 - -
Liabilities subject to compromise - - - 122,042 132,587
Stockholders' equity (deficiency) 625 (223) (355) (35,550) (14,343)
Operations:
General and administrative expenses 155 505 560 1,543 4,342
Provision for restructuring - - - - 2,742
Equity in earnings (losses) of unconsolidated
subsidiaries - - - 1,490 (40,141)
Bankruptcy costs - - 377 5,093 -
Reduction in carrying value of investment
in unconsolidated subsidiaries - - - 15,196 -
Interest (income) expense, net (15) 15 9 865 7,424
Loss before income taxes and
extraordinary item (140) (520) (946) (21,207) (54,649)
Extraordinary item (1) - - 34,698 - -
Net income (loss) $ (140) $ (520) $33,752(2) $ (21,207) $(54,649)
Per share information $ (.01) $ (.04) $ 2.78 $ (2.00) $ (5.16)
======= ====== ====== ========= ========
Average number of shares of common
stock outstanding 17,290 13,677 12,147 10,600 10,600
Cash dividends declared per common stock - - - - -
(1) Represents gain on settlement of pre-petition liabilities.
(2) The 1992 period included an extraordinary gain from the settlement of pre-petition liabilities totalling $34,698, or
$2.86 per share.
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion and analysis should be read in conjunction with the
selected financial data, and the financial statements and the notes thereto
included elsewhere in this Form 10-K.
The following sets forth selected items of the results of operations of GEV:
Year Ended December 31
1994 1993 1992
(In thousands, except share data)
Income (Expense)
General and administrative
expenses $(155) $(505) $ (560)
Bankruptcy costs - - (377)
Interest income (expense) net 15 (15) 9
----- ----- -------
Loss before extraordinary item (140) (520) (946)
Extraordinary item - - 34,698
----- ----- -------
Net income (loss) $(140) $(520) $33,752
====== ======= =======
Per share information: $(.01) $(.04) $2.78
====== ====== =====
1994 RESULTS OF OPERATIONS/BUSINESS REVIEW
GEV reported a net loss of $140,000, or $.01 per share, in the year ended
December 31, 1994 as compared to a net loss of $520,000 or $.04 per share, in
1993. General and administrative expenses were $350,000 lower in 1994 than in
1993, due primarily to a reduction in payroll and related costs as the number of
employees has decreased.
Interest income was earned in 1994 from investments of the Private Placement
proceeds.
1993 RESULTS OF OPERATIONS/BUSINESS REVIEW
GEV reported a net loss of $520,000, or $.04 per share, in the year ended
December 31, 1993 as compared to net income of $33,752,000, or $2.79 per share,
in 1992. The 1992 period included a second quarter extraordinary gain of
$34,698,000, or $3.26 per share, for the settlement of pre-petition liabilities
resulting from the successful completion of the bankruptcy case. General and
administrative expenses were $54,000 lower in 1993 than in 1992.
Interest expense was accrued at prime plus 1% during 1993 on amounts due Dairy
Holdings, offset by interest earned of $4,000.
LIQUIDITY AND CAPITAL RESOURCES
GEV reduced the size of its corporate headquarters staff and is evaluating
acquisitions and start-up opportunities in new businesses. GEV intends to use
its best efforts to remain in operation through such new businesses. However,
GEV may not be able to obtain the necessary capital to acquire or establish any
new business, and the anticipated tax benefits at December 31, 1994 of
approximately $80,000,000 (the "NOL") are subject to Internal Revenue Service
challenge and may not be available.
On February 18, 1994, GEV circulated a Private Placement document offering up to
8,000,000 shares of its Class A Common Stock. The shares were offered only to
accredited investors (the "Investors"), as defined in the rules of the
Securities Act of 1933, as amended, at a price per share of $.25. The offering
terminated on February 28, 1994. The Company sold 4,410,000 shares for net
proceeds totalling approximately $1,102,000 to the Investors, including certain
of the Company's directors and officers. The Company is using the net proceeds
for general corporate purposes and acquisitions.
The Company believes, exclusive of any acquisitions, that available cash will be
sufficient to meet anticipated needs.
On January 25, 1995, GEV announced that it had signed a letter of intent to
acquire (subject to obtaining required approvals, financing, performing
satisfactory due diligence, and negotiating and executing a definitive
agreement) Pioneer Americas, Inc., a manufacturer of chlorine, caustic soda and
related products. There is no certainty at this time that the transaction will
be consummated.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Index to Financial Statements
Page
Balance Sheets 10
Statements of Operations 11
Statements of Stockholders' Equity (Deficiency) 12
Statements of Cash Flows 13
Notes to Financial Statements 14
Independent Auditors' Report 20
GEV Corporation
BALANCE SHEETS
(In thousands, except share data)
December 31
1994 1993
Assets
Current assets:
Cash and cash equivalents $ 880 $ 104
Due from Dairy Holdings - 75
------- -------
Total current assets 880 179
Office equipment, net 32 38
Deferred tax asset - -
------- -------
Total assets $ 912 $ 217
======= =======
Liabilities and Stockholders'
Deficiency
Current liabilities:
Accounts payable and accrued expenses $ 150 $ 290
Deferred income and other liabilities - 150
------- -------
Total current liabilities 150 440
------- -------
Stockholders' equity (deficiency):
Preferred stock: $.01 par value,
authorized 10,000,000 shares; none
issued
Common stock: $.01 par value,
Class A authorized 46,000,000 shares;
issued and outstanding 15,073,996 shares 151 106
Class B authorized 4,000,000 shares; issued
and outstanding 3,077,419, convertible
share-for-share into Class A shares 30 30
Additional paid-in capital 1,734 653
Deficit (1,153) (1,013)
------- -------
762 (223)
------- -------
Total liabilities and stockholders'
equity (deficiency) $ 912 $ 217
======= ========
See notes to financial statements.
<TABLE>
<S><C>
GEV Corporation
STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Year Ended December 31
1994 1993 1992
General and administrative expenses $ 155 $ 505 $ 560
------- ------- -------
Operating loss (155) (505) (560)
Interest (income) expense, net (15) 15 9
------- ------- -------
Loss before reorganization items,
income taxes and extraordinary item (140) (520) (569)
Reorganization items - - 377
------- ------- -------
Loss before income taxes and extraordinary item (140) (520) (946)
Income taxes - -
------- ------- -------
Loss before extraordinary item (140) (520) (946)
Extraordinary item:
Settlement of pre-petition liabilities - - 34,698
------- ------- -------
Net income (loss) $ (140) $ (520) $ 33,752
======== ======= ========
Per share information:
From operations $ (.01) $ (.04) $ (.08)
Extraordinary item - - 2.86
------- ------- -------
Net income (loss) $ (.01) $ (.04) $ 2.78
========= ======== =========
Average number of shares of
common stock outstanding 17,290 13,677 12,147
====== ====== ======
</TABLE>
See notes to financial statements.
<TABLE>
<S><C>
GEV Corporation
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
(In thousands, except share data)
Common Stock Issued and Outstanding
Class A Class B
Additional
Paid in
Shares Amount Shares Amount Capital (Deficit)
Balance January 1, 1992 10,600 106 - - 54,269 (89,926)
Net income 33,752
Reorganization items:
Issuance of Class B Common Stock - - 3,077 30 1,412 -
Elimination of pre-confirmation
deficit (55,681) 55,681
------ ------ ------ ------ ------ ------
Balance December 31, 1992 10,600 106 3,077 30 0 (493)
Net loss - - - - - (520)
Forgiveness of indebtedness to
Dairy Holdings - - - - 653 -
------ ------ ------ ------ ------ ------
Balance December 31, 1993 10,600 106 3,077 30 653 (1,013)
Private Placement 4,410 44 - - 1,058 -
Net loss - - - - - (140)
Stock issued to non-employee
Directors 64 1 - - 23 -
------ ------ ------ ------ ------ ------
Balance December 31, 1994 15,074 $151 3,077 $30 $1,734 $(1,153)
====== ==== ===== === ====== ========
See notes to financial statements.
GEV Corporation
STATEMENTS OF CASH FLOWS
(In thousands)
Year Ended December 31
1994 1993 1992
Cash flows from operating activities:
Net income (loss) $ (140) $ (520) $ 33,752
Adjustments to reconcile net income (loss) to net cash
provided (used) in operating activities:
Depreciation and amortization 6 8 9
Increase (decrease) in operating liabilities:
Accounts payable and accrued expenses (291) 204 (294)
Other, net 24 - -
------- ------- -------
Net cash provided (used) in operating activities
before reorganization items (401) (308) 33,467
------- ------- -------
Cash flows from reorganization items:
Extraordinary item: Settlement of pre-petition liabilities - - (34,698)
Bankruptcy and restructuring costs - - 392
Professional and other fees paid in connection with the bankruptcy filing - - (952)
------- ------- -------
Net cash used by reorganization items - - (35,258)
------- ------- -------
Net cash used in operating activities (401) (308) (1,791)
------- ------- -------
Cash flows from investing activities:
Capital expenditures - - (8)
------- ------- -------
Cash flows from financing activities:
Proceeds from Private Placement of Class A Common Stock 1,102 - -
Loan payable to unconsolidated subsidiary 75 175 478
Repayment of long-term obligations:
In accordance with the DIP Financing
Agreement and cash collateral order - - (1,196)
Repayments from unconsolidated subsidiaries - - 931
------- ------- -------
Net cash provided by financing activities 1,177 175 213
------- ------- -------
Increase (decrease) in cash and cash equivalents 776 (133) (1,586)
Cash and cash equivalents at beginning of year 104 237 1,823
------- ------- -------
Cash and cash equivalents at end of year $ 880 $ 104 $ 237
======== ======= =======
</TABLE>
See notes to financial statements.
GEV Corporation
NOTES TO FINANCIAL STATEMENTS
(In thousands, except share and per share data)
Note 1: Basis of Presentation
At the annual shareholders meeting held on May 20, 1993, the shareholders
approved a name change from Finevest Foods, Inc. to GEV Corporation ("GEV" or
the "Company").
Following the filing on February 4, 1991 of an involuntary bankruptcy petition
against a significant subsidiary, on February 11, 1991, GEV and each of its
operating subsidiaries filed voluntary petitions seeking reorganization under
Chapter 11 of the U.S. Bankruptcy Code (collectively, the "Debtors"). On
February 11, 1992, the Debtors filed two amended plans of reorganization (the
"Plans"). One plan covered GEV (including Good Foods) and its dairy
subsidiaries (the "Reorganized Operating Subsidiaries") (the "Joint Plan"). A
second plan of reorganization was filed for SEFCO, a subsidiary whose operating
assets were sold in June 1991 (the "SEFCO Plan").
On May 15, 1992, Judge George L. Proctor ruled that the Joint Plan and the SEFCO
Plan met the requirements of the Bankruptcy Code and confirmed the Plans. A
confirmation order was entered on June 9, 1992. The confirmation process became
fully effective on July 9, 1992 (the "Effective Date"), and GEV and its
Reorganized Operating Subsidiaries emerged from bankruptcy.
The Joint Plan placed the Reorganized Operating Subsidiaries under a new holding
company subsidiary, Dairy Holdings, with an independent Board of Directors, new
management and separate financing. Through various pre- and post-petition
agreements, GEV and the Reorganized Operating Subsidiaries granted to the then
lending bank group (the "Bank Group") security interests in all of the assets
and property of the Reorganized Operating Subsidiaries. Furthermore, as a
result of the security interests granted to the Banks and the confirmation of
the Plans, GEV did not expect to be able to exercise significant influence over
the operating and financing decisions of the Reorganized Operating Subsidiaries.
GEV therefore changed its method of accounting at December 31, 1991 and
deconsolidated the subsidiaries in its year-end financial statements for all
periods presented. During 1994, Dairy Holdings sold the last of its operating
units and has ceased operations.
Note 2: Forgiveness of Indebtedness
From the Effective Date of the Bankruptcy through June 30, 1993 the Reorganized
Operating Companies financed, in accordance with a loan agreement, the operating
expenses of GEV in a maximum aggregate amount of $925 per year, of which $625
per year was in the form of a loan to GEV due to mature in full on July 1, 1997.
On June 30, 1993, the Reorganized Operating Companies forgave the loans (plus
accrued interest) made to GEV through June 30, 1993. These loans, totalling
$653, were credited to additional paid-in capital during the second quarter. A
new agreement was reached whereby GEV received $300 through July 1994 from the
Reorganized Operating Companies, with no obligation to repay.
Note 3: Significant Accounting Policies
CASH EQUIVALENTS - All highly liquid investments with a maturity of three months
or less when purchased are considered to be cash equivalents.
OFFICE EQUIPMENT - Office equipment is recorded at cost. Depreciation is
calculated using the straight-line method over the estimated useful lives of the
assets.
PER SHARE INFORMATION - Income (loss) per common share is computed using the
weighted average number of Class A and Class B common shares outstanding during
the period.
Note 4: Office Equipment, Net
December 31
1994 1993
Office Equipment $ 71 $ 71
Less: accumulated depreciation 39 33
------ ------
$ 32 $ 38
====== ======
Note 5: Accounts Payable and Accrued Expense
December 31
1994 1993
Accounts payable $ 20 $ 70
Accrued expenses 130 220
------- ------
$ 150 290
======= ======
Accrued expenses are made up primarily of professional and legal fees.
Note 6: Stock Options
In February 1988, the Board of Directors adopted GEV's 1988 Stock Option Plan
(the "Plan") for officers, key employees and certain directors. A total of
500,000 shares of Common Stock have been reserved for issuance under the Plan.
The options are exercisable at not less than 85% of the fair market value of the
Common Stock at the date of grant. Such options are exercisable at the rate of
20% per year and expire at the end of five years. There are 500,000 shares
available for grant.
Note 7: Common Stock
GEV's Second Restated Certificate of Incorporation was amended on May 20, 1993
to increase the authorized capital stock. The aggregate number of shares of
capital stock of all classes which GEV is now authorized to issue is 60,000,000
shares, of which 50,000,000 shares are to be common stock (46,000,000 of Class A
Common and 4,000,000 of Class B Common), par value $.01 per share and 10,000,000
shares are to be preferred stock, par value $.01 per share.
On March 10, 1994, the Company, in accordance with the 1993 Non-Employee
Director Stock Plan, issued 63,996 shares of its Class A common stock in
settlement of the 1993 Directors' fees.
The Third Restated Certificate of Incorporation requires a two-thirds vote of
stockholders to approve certain extraordinary corporate transactions with
related parties which occur within two years after such related party acquires
25% or more of the outstanding common stock of the Company. However, only a
majority vote of stockholders will generally be required, if (i) such
transactions are approved by a majority of the members of the Board who are not
affiliates of the related party, and (ii) certain "fair price" criteria and
procedural requirements are met.
GEV issued 3,077,419 shares of Class B Common Stock to its former lending bank
group, convertible share-for-share into Class A Common Stock. These additional
shares represented 22.5% of GEV common stock then outstanding (The Class A
Common Stock and the Class B Common Stock are collectively referred to as the
"GEV Common Stock"). The GEV Common Stock has the rights and privileges
provided for in GEV's Third Restated Certificate of Incorporation.
Each share of the Class A Common Stock entitles the holder to one vote on all
matters voted upon by shareholders. Each share of the Class B Common Stock
entitles the holder to one-tenth of one vote on all matters voted upon by
shareholders.
Each share of GEV Common Stock entitles the holder to share equally in such
dividends as the Board of Directors may declare.
In accordance with the Company's Third Restated Certificate of Incorporation,
which was approved on May 20, 1993, a single investor may not purchase shares
if, as a result of such purchase that investor would become a new "5% holder" as
defined by the Internal Revenue Service (the "IRS") unless the Board of
Directors approved such a purchase. Any purchaser who, as a result of
purchasing any shares, would own more than 900,000 shares would be a "5%
holder".
Holders of the GEV Common Stock have no preemptive or other rights to subscribe
for or purchase additional shares. In the event of GEV's liquidation, each
outstanding share of the GEV Common Stock entitles the holder thereof to
participate pro-rata in the assets remaining after payment of debts and
expenses. All of the outstanding shares of GEV Common Stock are fully paid and
non-assessable. The holders of GEV Common Stock do not have cumulative voting
rights.
On February 18, 1994, GEV circulated a Private Placement Memorandum offering a
minimum of 4,000,000 shares and up to a maximum of 8,000,000 shares of its Class
A Common Stock. The shares were offered only to accredited investors, as
defined in the Securities Act of 1933, as amended, at a price per share of $.25.
The offering terminated on February 28, 1994. A minimum purchase of 15,000
shares was required.
The Company sold 4,410,000 shares primarily to certain of its directors through
the private placement for approximately $1,102 in net proceeds.
Note 8: Income Taxes
At December 31, 1994, GEV had available to it on a consolidated tax return basis
approximately $80,000 of net operating loss carryforward ("NOL") for income tax
reporting purposes (expiring 2003 to 2010). The NOL is available for offset
against future income if generated during the carryforward period.
The Internal Revenue Code limits the amount of a corporation's NOL's and credit
carryforwards that may be used each year to offset future income after an
"ownership change" (as defined). GEV does not believe that the reorganization
resulted in an ownership change.
GEV reduced the size of its corporate headquarters staff and will evaluate
acquisition opportunities in new businesses. GEV intends to use its best
efforts to remain in operation through acquisitions, and may use the tax loss
carryforward benefits available to it mentioned above. However, (i) GEV may not
be able to obtain the necessary capital to acquire or establish any new
business, and (ii) the anticipated tax benefits are subject to Internal Revenue
Service challenge and may not be available.
Upon adoption of Statement of Financial Accounting Standard Number 109,
"Accounting for Income Taxes," GEV established a deferred tax asset based upon
the future utilization of the net operating loss carryfoward. However, since
GEV has no operating subsidiaries with which to generate taxable income, a 100%
valuation reserve was recorded against this asset. Any future utilization of
this NOL by GEV will be recorded as additional paid-in capital in accordance
with current accounting standards (see Note 1). At December 31, 1994 and 1993
the net balance of this deferred tax asset was zero.
Note 9: Quarterly Information (unaudited)
The following summary shows the quarterly results of operations for GEV for the
years ended December 31, 1994 and 1993:
<TABLE>
<S><C>
Quarters (a)
First Second Third Fourth Total
1994
Net loss $ (26) $ (88) $ (104) $ 78 $ (140)
Loss per share $ (.01) $ (.01) $ (.01) $ .01 $ (.01)
Common stock price 1994 (b)
High $ 11/16 $ 3/4 $ 9/16 $15/32
Low 1/4 7/16 3/8 1/8
1993:
Net loss $ (69) $ (162) $ (163) $ (126) $ (520)
Loss per share $ (.01) $ (.01) $ (.01) $ (.01) $ (.04)
Common stock price
1993 (b)
High $ 3/4 $ 1/2 $ 1/2 $ 7/16
Low 1/4 1/4 1/4 1/16
</TABLE>
(a) Each period is computed separately.
(b) The common stock price is based on the high and low bid and ask prices
on the NASD OTC Bulletin Board for such stock.
Note 10: Subsequent Events
On January 24, 1995, GEV announced that it had signed a letter of intent to
acquire (subject to obtaining required approvals, financing, performing
satisfactory due diligence, and negotiating and executing a definitive
agreement) Pioneer Americas, Inc., a manufacturer of chlorine, caustic soda and
related products. There is no certainty at this time that the transaction will
be consummated.
Note 11: Related Party Transaction
The Company leases a minimal amount of office space at market rates from a
company of which the Company's Chairman of the Board is a majority owner.
In addition, the Company's Vice President and Chief Financial Officer is also
the Chief Financial Officer of and paid by a related company of which the
Company's Chairman of the Board is a majority owner. Had the Company paid for
his services, including benefits, during 1994 the amount would have been
immaterial.
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of
GEV Corporation
Greenwich, Connecticut
We have audited the accompanying balance sheets of GEV Corporation ("GEV") as of
December 31, 1994 and 1993 and the related statements of operations,
stockholders' equity (deficiency) and cash flows for each of the three years in
the period ended December 31, 1994. These financial statements are the
responsibility of the Company'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 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 accompanying financial statements present fairly, in all
material respects, the financial position of GEV as of December 31, 1994 and
1993 and the results of its operation, changes in stockholders' equity
(deficiency) and cash flows for each of the three years then ended in conformity
with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
New York, New York
January 25, 1995
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Reference is made to the Company's definitive proxy statement relating to its
1995 Annual Meeting of Stockholders, to be held on March 27, 1995, which will be
filed with the Securities and Exchange Commission on or before April 30, 1995,
and which is incorporated herein by reference.
The following information is provided as to the directors and executive officers
of GEV as of February 23, 1995:
Name Age Position
William R. Berkley(1)....... 49 Chairman of the Board
Catherine B. James.......... 42 President
Nelson A. Barber............ 39 Vice President - Chief
Financial Officer and
Treasurer
William L. Mahone......... 43 Vice President -
General Counsel and
Secretary
Joshua A. Polan............. 47 Vice President
Philip J. Ablove(2)......... 54 Director
Andrew M. Bursky(2)......... 38 Director
George H. Conrades (2)..... 55 Director
Donald J. Donahue (3)....... 70 Director
Jack H. Nusbaum (3)......... 54 Director
(1) Term to expire at 1997 Annual Meeting.
(2) Term to expire at 1996 Annual Meeting.
(3) Term to expire at 1995 Annual Meeting.
GEV's Third Restated Certificate of Incorporation classifies the Board of
Directors into three classes. Successors to the class of directors whose term
expires at each annual meeting will be elected for a three-year term. Officers
serve at the discretion of the Board of Directors.
The Board of Directors has an Executive Committee, an Audit Committee and a
Compensation and Stock Option Committee. The current members of the Executive
Committee are Messrs. Berkley and Bursky. The current members of the Audit
Committee are Messrs. Donahue and Ablove. The current members of the
Compensation and Stock Option Committee are Messrs. Berkley and Nusbaum.
William R. Berkley has been Chairman of the Board and a Director of GEV since
its formation in 1987. He also serves as Chairman of the Board of several
companies which he controls or founded. These include W. R. Berkley Corporation
and Interlaken Capital, Inc., a private investment and consulting firm. He is
also a director of Strategic Distribution, Inc.
Nelson A. Barber, the only executive officer of GEV during 1994, has been
employed by the Company since June 1989. Mr. Barber was named Vice President--
Chief Financial Officer and Treasurer of the Company in June 1992. From January
1990 through May 1992, Mr. Barber was Corporate Controller of the Company. Mr.
Barber was Director of Corporate and International Accounting at Combustion
Engineering from May 1987 to June 1989. Since November 1993, Mr. Barber has
also served as Vice President, Chief Financial Officer/Treasurer of Fine Host
Corporation, a company affiliated with Mr. Berkley.
Catherine B. James was elected President of GEV on February 23, 1995. She has
been a Managing Director of Interlaken Capital, Inc., since January 1990. Ms.
James has served as a member of the Board of Directors of Strategic
Distribution, Inc. since 1990, as Executive Vice President of Strategic
Distribution, Inc. since January 1989 and as its Secretary and Treasurer since
December 1989. She was Chief Financial Officer of Strategic Distribution, Inc.
from January 1989 until September 1993. From 1982 through 1988, she was
employed by Morgan Stanley & Co. Incorporated, serving as a Managing Director in
the corporate finance area during the last two years of her tenure.
William L. Mahone was elected Vice President - General Counsel and Secretary of
GEV on February 23, 1995, and has served as Secretary of the Company since May
1993. He has served as Vice President, General Counsel and Secretary of
Interlaken Capital, Inc. since September 1988. For the six years prior to
September 1988, Mr. Mahone was an associate attorney at the New York law firm of
Willkie Farr & Gallagher.
Joshua A. Polan was elected Vice President of GEV on February 23, 1995. He has
served as an executive officer of Interlaken Capital, Inc. since June 1988,
currently serving as a Managing Director. He has served as a member of the
Board of Directors of Strategic Distribution, Inc. since 1988. For more than
five years prior to June 1988, Mr. Polan was a partner in the accounting firm of
Touche Ross & Co.
Philip J. Ablove has been a Director of GEV since January 1991 and a
restructuring consultant since July 1992. He was President and Chief Executive
Officer of GEV from January 1991 to July 1992 after serving as a consultant to
the Company from October 1990 to January 1991. He has served as an officer and
director specializing in restructuring financially distressed companies since
1983. He was a Director of Ironstone Group, Inc. from June 1988 until June
1990, Executive Vice President and Chief Financial Officer from September 1988
until February 1989 and President and Chief Operating Officer from February 1989
until June 1990. Ironstone Group is a publicly held holding company with
interests in wholesale plumbing distribution and oil and gas exploration and
production. Ironstone Group filed a bankruptcy petition in January 1991. Mr.
Ablove was Chairman of the Board of American National Petroleum Company, a
subsidiary of the Ironstone Group, from December 1989 until June 1990 and
Executive Vice President and a Director of Iron-Oak Supply Corporation from July
1988 until June 1990. Iron-Oak Supply Corporation filed a bankruptcy petition
in January 1991. Until June 1988, Mr. Ablove had been Senior Vice President and
Chief Financial Officer (from April 1986) and a Director (from March 1986) of
GCA Corporation, a New York Stock Exchange company that manufactures and
distributes semiconductor manufacturing equipment.
Andrew M. Bursky was appointed a Director of GEV in January 1994. Mr. Bursky
has been a Managing Director of Interlaken Capital, Inc., a private investment
and consulting firm, since May 1980. He has been Chairman of the Board of
Strategic Distribution, Inc., a distributor of maintenance and safety products
to industry, since July 1988. Mr. Bursky is an executive officer of Idle Wild
Farm, Inc., a privately owned manufacturer of frozen food, which in October
1993, while he was an executive officer, filed a chapter 11 petition for
reorganization under federal bankruptcy law. Interlaken Capital, Inc.,
Strategic Distribution, Inc. and Idle Wild Farm, Inc. are corporations
controlled by William R. Berkley.
George H. Conrades has been a Director of GEV since February 1988. Mr. Conrades
became President and CEO of Bolt Beranek and Newman Inc., a leading provider of
internetworking technologies and services designed to help people and businesses
work and learn, in January 1994. He was Chairman of Conrades/Reilly Associates,
Inc., a software and services firm, from August 1992 to January 1994. Mr.
Conrades joined International Business Machines Corporation in 1961 and served
as an officer from 1978 until his retirement in March 1992, at which time he was
a Senior Vice President. Mr. Conrades is a member of the Board of Trustees of
Ohio Wesleyan University and a Director of Bolt Beranek and Newman Inc.,
Westinghouse Electric Corporation, and Comprehensive Rehabilitation Associates,
Inc.
Donald J. Donahue has been a Director of GEV since February 1988. Mr. Donahue
has been Chairman of the Board of Magma Copper Company since 1987 and Chairman
of Nacolah Holding Co. from 1990 to 1993. From 1984 to 1985, Mr. Donahue served
as Chairman and was a Director of KMI Continental Group, Inc. From 1975 to
1984, he was Vice Chairman and a Director of Continental Group, Inc. Mr.
Donahue is a Trustee of Northeast Utilities, Inc. and is a Director of Signet
Star Holdings, Inc., Chase Brass Industries, Inc., Counsellors Tandem Securities
Fund, Inc., and twelve other registered investment companies managed by EMW
Warburg, Pincus Counsellors, Inc. (Warburg Pincus Capital Appreciation Fund;
Warburg Pincus Emerging Growth Fund; Warburg Pincus International Equity Fund;
Warburg Pincus Institutional Fund, Inc.; Warburg Pincus Global Fixed Income
Fund; Warburg Pincus Fixed Income Fund; Warburg Pincus Intermediate Maturity
Government Fund; Warburg Pincus New York Municipal Bond Fund; Warburg Pincus New
York Tax Exempt Fund; Warburg Pincus Cash Reserve Fund; Warburg Pincus Managed
Bond Trust - Short-Term After-Tax Bond Fund; and Warburg Pincus Japan OTC Fund.)
Jack H. Nusbaum has been a Director of GEV since 1988. Mr. Nusbaum is a Senior
Partner and Co-Chairman in the New York law firm of Willkie Farr & Gallagher.
He is a Director of W. R. Berkley Corporation, The Topps Company, Inc., Signet
Star Holdings, Inc., and Prime Hospitality Corp.
ITEM 11. EXECUTIVE COMPENSATION
Reference is made to the Company's definitive proxy statement relating to its
1995 Annual Meeting of Stockholders, to be held on March 27, 1995, which will be
filed with the Securities and Exchange Commission within 30 days after the
filing of this Report, and which is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) Security ownership of certain beneficial owners
Reference is made to the Company's definitive proxy statement relating to
its 1995 Annual Meeting of Stockholders, to be held on March 27, 1995,
which will be filed with the Securities and Exchange Commission on or
before April 30, 1995, and which is incorporated herein by reference.
(b) Security ownership of management
Reference is made to the Company's definitive proxy statement relating to
its 1995 Annual Meeting of Stockholders, to be held on March 27, 1995,
which will be filed with the Securities and Exchange Commission on or
before April 30, 1995, and which is incorporated herein by reference.
(c) Changes in control
Reference is made to the Company's definitive proxy statement relating to
its 1995 Annual Meeting of Stockholders, to be held on March 27, 1995,
which will be filed with the Securities and Exchange Commission on or
before April 30, 1995, and which is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Reference is made to the Company's definitive proxy statement relating to its
1995 Annual Meeting of Stockholders, to be held on March 27, 1995, which will be
filed with the Securities and Exchange Commission on or before April 30, 1995,
and which is incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Financial Statements
(1) The financial statements filed as part of this report are listed on
the Index to Financial Statements on page 9 hereof.
(2) Additional financial information and schedules required pursuant to
the requirements of Form 10-K are included elsewhere in the financial
statements or notes thereto.
(b) Reports on Form 8-K
A report on Form 8-K was filed March 15, 1994 covering the Private
Placement of GEV Corporation Class A Common Stock.
(c) A report on Form 8-K was filed January 24, 1995 covering the text of a
press release issued by the Company covering a letter of intent to acquire
Pioneer Americas, Inc.
(d) Exhibits
The exhibits filed as part of this report are listed on page 28 hereof.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
GEV Corporation
By /S/William R. Berkley
William R. Berkley
Chairman of the Board
February 23, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
Signature Title Date
/S/William R. Berkley Chairman of the Board February 23, 1995
William R. Berkley
Principal Executive Officer
/S/Philip J. Ablove Director February 23, 1995
Philip J. Ablove
/S/Andrew M. Bursky Director February 23, 1995
Andrew M. Bursky
/S/George H. Conrades Director February 23, 1995
George H. Conrades
/S/Donald J. Donahue Director February 23, 1995
Donald J. Donahue
/S/Jack H. Nusbaum Director February 23, 1995
Jack H. Nusbaum
/S/Nelson A. Barber Vice President- February 23, 1995
Nelson A. Barber Chief Financial
Principal Financial Officer Officer and Treasurer
EXHIBIT INDEX
Exhibit Sequential
Number Page No.
(A) Exhibits.
3.1(a) Third Restated Certificate of Incorporation
3.2(b) By Laws
21.1 Subsidiaries of the Registrant.
99.1(a) Confidential Private Placement Memorandum
and Private Placement Subscription Agreement.
99.2(c) Second Amended Disclosure Statement for
Second Amended Joint Plan of Reorganization.
99.3(c) Second Amended Disclosure Statement for
Second Amended Plan of Reorganization for
Southeast Frozen Foods, Inc.
99.4(c) Loan Agreement dated July 1, 1992 between
Finevest Foods, Inc. and Dairy Holdings, Inc.
(B) Financial Statement Schedules** - None.
** Schedules which are not included have been omitted because either they are
not required or are not applicable because the required information has
been included elsewhere in the financial statements or notes thereto.
(a) Incorporated by Reference to Exhibit contained in the registrant's Form 10-
K for the year-end December 31, 1993.
(b) Incorporated by Reference to Exhibit contained in the registrant's Form 10-
K for the year-end December 31, 1988.
(c) Incorporated by Reference to Exhibit contained in the registrant's Form 10-
Q for the quarter ended June 30, 1992.
EXHIBIT 21.1
SUBSIDIARIES OF REGISTRANT
BUSINESS OR PERCENTAGE DATE ACQUIRED
STATE OF TYPE OF OF OR
NAME INCORPORATION OPERATION OWNERSHIP INCORPORATED
Dairy Holdings, Inc. Delaware Asset 100% 1992
3 Greenwich Office Park disposition
Greenwich, CT 06831 in process
Old Atlanta, Inc. Delaware Asset 100% (1) 1987
3 Greenwich Office Park disposition
Greenwich, CT 06831 in process
Old Jacksonville, Inc. Delaware Asset 100% (1) 1986
3 Greenwich Office Park disposition
Greenwich, CT 06831 in process
Old Johnson City, Inc. Delaware Asset 100% (1) 1985
3 Greenwich Office Park disposition
Greenwich, CT 06831 in process
(1) Owned by Dairy Holdings, Inc.
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This schedule contains summary financial information extracted from GEV Corp.
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