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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K/A
(Amendment No. 2)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported) February 2, 1999
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TIS MORTGAGE INVESTMENT COMPANY
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(Exact name of registrant as specified in its charter)
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MARYLAND 1-10004 94-3067889
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(State or Other Jurisdiction (Commission File (IRS Employer
of Incorporation) Number) Identification No.)
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655 Montgomery Street, Suite 800, San Francisco, California 94111
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (415) 393-8000
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Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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Item 2. Acquisition or Disposition of Assets.
On February 2, 1999, TIS Mortgage Investment Company (the "Company")
acquired all the shares of Novato Markets, Inc. ("Novato") from Pacific
Securitization, Inc. ("Pacific"), in exchange for 1,613,070 shares (the
"Shares") of Common Stock of the Company (or approximately 18.1% of its
outstanding shares after giving effect to the transaction discussed in Item 5 of
this Report), pursuant to an Agreement and Plan of Reorganization dated as of
February 1, 1999, between the Company and Pacific (the "Exchange Agreement").
Pacific is indirectly principally owned by Lorraine O. Legg, the President and
Chief Executive Officer and a director of the Company, and Patricia M. Howe, a
director of the Company. The Company's acquisition of Novato and the
transaction discussed in Item 5 of this Report were approved by the Company's
Board of Directors and, specifically, by directors with no financial interest in
or other relationship to Pacific or its owners.
Through a wholly-owned subsidiary, Novato owns a shopping center located in
Rohnert Park, California, named Mountain Shadows Plaza, and owns a shopping
center subject to a ground lease in Petaluma, California, named Midtown Center.
The shopping centers have a combined commercial and retail space totaling
approximately 80,000 square feet. Mountain Shadows Plaza consists of three
buildings and is anchored by a large grocery store. Midtown Center consists of
a single building. Currently, the shopping centers have only one vacancy
(consisting of approximately 1,500 square feet), out of a total of 28 tenant
spaces. The Company intends to continue operating the shopping centers.
The Shares were issued to Pacific under an exemption to the registration
requirements of the Securities Act of 1933, as amended (the "Securities Act").
Accordingly, the Shares are "restricted securities," as defined in Rule 144 of
the Securities Act, and are not freely transferable. The Company granted
Pacific one-time demand registration rights with respect to the Shares for the
period beginning June 30, 1999 and ending February 2, 2001. It also granted
Pacific piggy-back registration rights in the event that the Company files a
registration statement under the Securities Act in connection with the proposed
offer and sale for cash of shares of Common Stock by it or by any of its
stockholders.
In analyzing the share exchange, the directors of the Company who had no
financial interest in the transaction or relationship with Pacific or its owners
acknowledged among other things that, because the Company's stock was no longer
traded on a major stock exchange and was thinly traded, recent quoted market
prices might not reflect the full value of the Shares. In analyzing the value
of the underlying assets acquired in the share exchange, the disinterested
directors considered, among other things, prior appraisals, local capitalization
rates, indebtedness, the quality and condition of the assets and developments
affecting the assets since the date of such appraisals.
The Company determined the fair value of the underlying assets acquired in
the share exchange to be $8,527,000, on the basis of appraisals of the assets by
independent appraisers. The net asset value of $2,443,000 was then determined by
reducing the fair value of $8,527,000 by the $5,984,000 in mortgage debt assumed
and the $100,000 in current liabilities on or related to the assets. In
accordance with generally accepted accounting principles, the assets and
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liabilities acquired in the share exchange were recorded at their respective
fair values, and the Shares issued to Pacific were recorded at the net asset
value of $2,443,000 (or approximately $1.51 per share). The closing price of the
Company's common stock as reported in the over-the-counter market for February
1, 1999 (the Pacific Exchange reported no trades in the common stock for
February 1 or 2, 1999 and the over-the-counter market reported no trades in the
Common Stock for February 2, 1999), was $0.8125 per share.
The share exchange is intended to be a tax free reorganization within the
meaning of Section 368(a)(1) of the Internal Revenue Code of 1986, as amended.
Prior to the closing of the share exchange, Novato caused its wholly-owned
subsidiary to transfer to Pacific all its rights under a lease, with option to
purchase, with Ignacio Properties, LLC, relating to the Ignacio Center in
Novato, California (the "Ignacio Property"), and Pacific agreed to assume all
the obligations of the subsidiary under the lease and option. The Company,
Novato, Novato's wholly-owned subsidiary and Pacific then entered into an
Agreement dated as of February 1, 1999, whereby the parties clarified their
respective rights and obligations relating to the Ignacio Property and the
Company's rights to an escrow established when Pacific originally acquired
Novato. Anthony H. Barash controls Ignacio Properties, LLC and subsequent to
this transaction became a director of the Company.
See Item 5 of this Report for additional information regarding values
related to this transaction. Copies of the Exchange Agreement and the related
Agreement are attached to this Report as Exhibits 2.1 and 2.2. The foregoing
descriptions of the Exchange Agreement and the related Agreement are qualified
in their entirety by reference to the full text of those agreements.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this Amendment No. 2 to Current Report to be signed
on its behalf by the undersigned thereunto duly authorized.
Date: June 1, 1999
TIS Mortgage Investment Company
By /s/ Lorraine O. Legg
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Lorraine O. Legg
President and Chief Executive Officer
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