SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-KA
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) August 8, 1996
MARKET DATA CORP.
(Exact name of registrant as specified in its charter)
TEXAS 33-22264-FW 76-0252235
(State or jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
14505 TORREY CHASE BLVD. SUITE 410, HOUSTON, TX 77014
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (713) 586-8686
Item 5. Other Items
The following items are pertinent to Renet Financial Corporation,
which was acquired as a subsidiary of registrant.
1. Financial Statements dated June 30, 1996, from Renet
Financial Corporation.
2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
The following discussion should be read in conjunction with the
attached unaudited subsidiary financial statements for the fourth
quarter, ending June 30, 1996, (see exhibit 99).
Financial Results of Operations
Total revenues for Renet Financial Corporation decreased to
$645,498 in the quarter ended June 30, 1996, from $1,231,926 in
the quarter ended June 30, 1995, a decrease of 48%. This was due
to the changing loan market away from the refinance market to a
weak real estate market in California. The change was brought
about with increases in interest rates and a weak California
economy. In addition, a major factor in reduction in revenues
was the loss of HUD approvals and the subsequent loss of the
warehouse lending line of credit. (See discussion below).
Operating expenses decreased to $738,962 for the quarter ending
June 30, 1996, compared to $969,925 for the quarter ending June
30, 1995, a decrease of 23.8%. The Company downsized during this
period by closing branch offices. Commissions paid decreased 42%
from $457,656 to $261,084. Salaries decreased 13.7% from
$211,984 to $182,902. The employee costs did not come down as
rapidly as other expenses, because of the cost of termination
including accrued vacation pay and other benefits.
A net loss resulted for the quarter of $(160,520) as compared to
a net profit of $75,826 for the prior year's quarter ending June
30, 1995. The loss was due to the drop in revenues and the cost
of office closings during the period.
Business Operations
During the quarter the company continued to experience losses.
On May 28, 1996, Renet received a Notice of Withdrawal of HUD
Title II lender approval for a period of three years. The main
reason for the withdrawal was the failure to pay and the late
payment of UFMIP funds. In addition, the letter stated that HUD
intends to assess $50,000 in civil penalties for these violations
of HUD regulations. The Company had 30 days in which to request
a hearing in regards to HUD's action, and did so. The hearing
date has not been set as yet.
Upon Renet's announcement of HUD's action, Renet's warehouse
lender, Imperial Credit Industries, canceled Renet's warehouse
line of credit and requested that all loans held for sale be
promptly sold off. In addition, Imperial Credit Industries
verbally notified Renet that it would not forward any proceeds of
the sales of its loans until all the loans were sold. To date
twenty loans have been sold, but seven loans remain. Because of
Imperial Credit Industries restricting the cash flow out of the
warehouse line, several small collection demands and suits have
been commenced against Renet for $3,000 to $20,000.
Management's action to counter these was to close all remaining
branch offices and reduce staffing and consolidate operations to
the main office in Orange, California. In addition, the funding
division was closed. The funding division required significant
working capital and recently generated operating losses. Renet
remains a broker of loans and is table funding some loans with
its lenders. These actions should move us toward operating
profits by the end of this quarter.
On July 26, 1996, the California Department of Real Estate
completed an audit (as a result of the HUD action) and made
specific findings which management believes may lead to a "Cease
and Desist" order based on unpaid MIP's. The audit found
$197,077.41 unpaid as of June 30, 1996, based on Renet's
accounting. On July 27, 1996, Management presented the auditors
with a letter of corrective actions. This included that some of
the amounts had already been subsequently paid and that all of
the remaining amounts will be paid by August 15, 1996, by
agreement with Homeside Lending and other lenders who will
advance the funds of Renet's behalf. Each of the lenders has
submitted demands to Renet for the repayment of the amounts
advanced as follows:
Countrywide Funding on July 26, 1996, sent a letter to Renet
demanding payment of $30,707 plus late fees of $1,381.85 for MIP
advances.
First Nationwide Mortgage has demanded $67,424 which is the
remaining balance on funds advanced for MIP's.
First Plus is advancing $17,000 on behalf of Renet and Renet will
sign a note for that amount. Homeside Mortgage is advancing the
balance plus late charges and fees ($140,000 estimated), and
should make its demand shortly.
First Nationwide, On July 19, 1996, demanded repurchase by Renet
of loans totaling $336,456. The reason is that these loans had
late payment of MIP's and FHA will not issue insurance unless the
borrower's payments are on time. If there is a late payment, FHA
requires a period of six months with no late payments to insure
the loan. Renet has asked First Nationwide for the payment
history and status of each loan to determine if and when they may
be insured to determine if they may be resold to another lender.
Such action would result in a market loss on the face amount of
the loans, the amount is yet undetermined. Renet may be subject
to other loan repurchase liabilities in the normal course of
business and in particularly on the FHA loans with late MIP
payments. HUD loans represented 15% of the loan volume of Renet
in the past year.
The loss of HUD approval does not directly affect Renet's
franchisees, because they were not allowed to do FHA loans by HUD
under a 1991 agreement with Renet. The Renet franchisees
continue to broker loans to their lender of choice as they have
in the past. Renet's efforts will be to concentrate on
supporting the franchisees and their marketing efforts. Renet
will also continue its wholesale and retail loan marketing in its
high loan to value market niche.
Capital
The Company is aggressively pursuing raising additional capital.
Currently, management is in negotiation with a Southern
California investment advisor for the purposes of obtaining a
bridge loan, leading to a private offering to raise capital for
the expansion of the marketing of franchises and the geographic
expansion of the wholesale operation. Management anticipates
that the capital raising should take place before the end of this
year. The funds from the offering will allow the Company to
expand its market share and, in turn, expand revenues. The
Company will also receive the necessary funds to settle the
payable as described above. Should the Company be unable to
raise additional capital, its ability to repay the above
obligations would be limited to earnings and the payment of
accounts receivable.
The Company is also in negotiation with a California CPA firm to
complete the current audit and to maintain the necessary SEC
filings in a timely manner. This should be finalized by August
9, 1996. Within the same period, the Company will be hiring a
new California based SEC attorney to assist in all filings.
Item 6. Resignations of Registrant's Directors
1. On June 11, 1996, David P. LaPuma resigned as a Director of
the Company and as an officer and director of Renet Financial
Corporation so that he could pursue other interests. He remains
available as a consultant to the Company as needed (see exhibit
17).
2. On August 7, 1996, Steven C. Naremore resigned as a Director
and as an officer of Market Data Corp. in a disagreement with the
board over the disclosure and consequences of the HUD approval
withdrawal within the Renet Financial Corporation (see exhibit
17).
3. On August 7, 1996, Janice S. Whalen resigned as a Director
and as an officer of Market Data Corp. in a disagreement with the
board over the disclosure and consequences of the HUD approval
withdrawal within the Renet Financial Corporation (see exhibit
17).
Signatures
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
Market Data Corp.
(Registrant)
8/9/96 Michael F. Pope
(Signature)
8/9/96 Philip C. LaPuma
(Signature)
Mike Pope, Chairman
Phil LaPuma, Director
Steven Naremore, Director
Janice Whalen, Director
Market Data Corp.
14505 Torrey Chase Blvd. Suite 410
Houston, Texas 77014
June 11, 1996
Dear Board,
I wish to inform you of my decision to resign my title as
Director with Market Data/Renet Financial Services Corp. and
Renet Financial Corp. effective immediately.
At this time I wish to pursue other business opportunities
available to me.
I will still be available as a contract accountant to assist
Renet Financial Corp. with its bookkeeping as I have been doing
for the past several months.
David P. LaPuma
(Signature)
Steven C. Naremore
8014 Dutch Oak Circle
Spring, Texas 77379
Steven C. Naremore
8014 Dutch Oak Circle
Spring, Texas 77379
August 7, 1996
Via Fax (714) 288-5929
Certified Mail Return Receipt Requested and Regular Mail
Philip C. LaPuma
Michael F. Pope
Renet Financial Corporation
1187 Tustin Avenue
Orange, California 92667
Market Data Corp.
14505 Torrey Chase Blvd. #410
Houston, Texas 77014
Dear Sirs:
The undersigned, Steven C. Naremore, hereby resigns all positions
as an officer or director of Market Data Corp., its subsidiaries
and affiliates (collectively "MDC"), effective immediately.
While I regret the circumstances that require this action, which
I have previously explained to each of you, I believe you can
understand that the previously undisclosed adverse information
regarding Renet Financial appears to be of such a nature, and the
fact of the nondisclosure is of such a nature, that I do not
believe I can any longer fulfill my duties as an officer or
director of MDC with any confidence. This resignation is
immediate and irreversible.
Please bear in mind that as a public company, MDC has continuing
obligations to disclose all material developments to the public
in a timely fashion. While I resign as an officer and director,
I remain a significant shareholder, and hereby demand that you
make full, complete, prompt and appropriate public disclosure of
all material developments affecting MDC, particularly those
relating to Renet Financial Corporation as to which you are in
the most knowledgeable position to make.
As contemplated in the reporting requirements of Current Report
on Form 8-K, please bear in mind that this resignation is as a
result of a disagreement of the sort contemplated in Item 6 of
such Form, and that I reserve the right to furnish you prior to
the time of such filing a letter setting forth a description of
such disagreement for summarization in such Form.
Steven C. Naremore
(Signature)
Janice S. Whalen
2016 Main Street, #2202
Houston, Texas 77002
August 7, 1996
Via Fax (714) 288-5929
Certified Mail Return Receipt Requested and Regular Mail
Philip C. LaPuma
Michael F. Pope
Renet Financial Corporation
1187 Tustin Avenue
Orange, California 92667
Market Data Corp.
14505 Torrey Chase Blvd. #410
Houston, Texas 77014
Dear Sirs:
The undersigned, Janice S. Whalen, hereby resigns all positions
as an officer or director of Market Data Corp., its subsidiaries
and affiliates (collectively "MDC"), effective immediately.
While I regret the circumstances that require this action, which
I have previously explained to each of you, I believe you can
understand that the previously undisclosed adverse information
regarding Renet Financial appears to be of such a nature, and the
fact of the nondisclosure is of such a nature, that I do not
believe I can any longer fulfill my duties as an officer or
director of MDC with any confidence. This resignation is
immediate and irreversible.
Please bear in mind that as a public company, MDC has continuing
obligations to disclose all material developments to the public
in a timely fashion. While I resign as an officer and director,
I remain a significant shareholder, and hereby demand that you
make full, complete, prompt and appropriate public disclosure of
all material developments affecting MDC, particularly those
relating to Renet Financial Corporation as to which you are in
the most knowledgeable position to make.
As contemplated in the reporting requirements of Current Report
on Form 8-K, please bear in mind that this resignation is as a
result of a disagreement of the sort contemplated in Item 6 of
such Form, and that I reserve the right to furnish you prior to
the time of such filing a letter setting forth a description of
such disagreement for summarization in such Form.
Janice S. Whalen
(Signature)
EXHIBIT 99
RENET FINANCIAL CORP.
BALANCE SHEET
June 30, 1996
<TABLE>
<S> <C>
ASSETS
Current Assets
Cash $ 56,168.95
Due to/from Parent Company (196,000.00)
Franchise Receivables - Net 925,847.29
Secured Fundings 2,398,837.27
Other Receivables 44,450.00
Notes Receivable 11,199.00
Prepaid Expenses 19,696.97
Prepaid Postage - Corporate 228.16
_______________ <C>
Total Current Assets $3,260,427.64
Plant and Equipment
Computer Equipment 127,145.05
Furniture and Fixtures 341,559.94
Computer Software 46,895.82
Accumulated Depreciation (402,009.46)
Net Plant and Equipment $ 113,591.35
Other Assets
Goodwill 101,807.00
Deposits 3,678.34
Total Other Assets $ 105,485.34
_____________
TOTAL ASSETS $3,479,504.33
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</TABLE>
RENET FINANCIAL CORP
BALANCE SHEET
June 30, 1996
<TABLE>
LIABILITIES AND EQUITY
LIABILITIES
<S> <C>
Current Liabilities
Bank Credit Line $ 250,000.00
Contracts Payable 17,535.14
Settlements,Payable 16,145.39
Outstanding on Warehouse Line 2,398,837.27
Accounts Payable - Trade 347,164.93
Accrued Expenses 251,318.75
Accrued Vacation 2,669.35
Dividends Payable 29,436.58
Accrued Salaries & Wages 45,664.17
Customer Deposits 9,657.39
______________
<C>
Total Current Liabilities 3,368,428.97
Long Term Liabilities
Note Payable 34,229.74
Contracts Payable 13,5O6.17
______________
Total Long Term Liabilities 47,735.91
_____________
TOTAL LIABILITIES $3,416,164.88
STOCKHOLDERS' EQUITY
Preferred Stock 741,849.00
Common Stock 534,972.50
Dividends Paid (159,690.99)
Retained earnings (1,053,791.06)
_______________
TOTAL STOCKHOLDERS' EQUITY $ 63,339.45
_____________
TOTAL LIABILITIES AND EQUITY $3,479,504.33
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</TABLE>
RENET FINANCIAL CORP.
STATEMENT OF INCOME
June 30, 1996
<TABLE>
<S> <C>
Fourth
Quarter
______________
REVENUES
Franchise Origination Fee
Origination Fees Franchise $ 66,982.32
_______________
66,982.32
In House Origination Fees
Origination Fees-Conv. 176,384.06
Gain on Sale-Funding 133,695.63
Funding Fees 45,345.00
Appraisal Review Fees 75.00
Origination Fees-FHA/V 105,394.35
Escrow Fees (60.00)
Document Fees 18,825.00
_______________
Total In House Fees 479,659.04
Franchise Services
Franchise Sales 16,800.00
Processing/Admin. Fees 32,430.00
Other Fees 31,415.35
Funding Division Inc. 18,212.09
_______________
Total Franchise Services 98,857.44
Less Franchise Commission
Franchise Commissions (54,959.52)
_______________
(54,959.52)
_______________
Net Revenue 590,539.28
Operating Expenses
Advertising 1,471.44
Loan Officer Commissions 261,084.04
Marketing Overrides 1,602.50
Quality Control 10.00
Escrow Fees 476.41
Warehousing Fees -Funding 7,500.00
Sales Expense- entertainment 200.77
Marketing 4,346.64
Salaries 189,902.72
Auto Expenses 731.21
Appraisal/Credit Expense 13,620.93
Flood Certs. 3,233.00
Refunds to Borrowers 4,395.17
Training Center Costs 300.00
Travel 1,348.36
Courier Services 13,169.49
Title Fees - Anaheim 160.00
Title Fees - Lancaster 163.00
Document Service 6,894.00
Officers Salaries 41,218.65
Office Rent / Storage 26,037.23
Legal 2,366.22
Accounting 6,375.00
Insurance - General 9,004.61
Auto Allowance 1,500.00
Office Expense 9,541.41
Bank Charges 2,456.25
Office Supplies 6,089.47
Postage 2,853.60
Equipment Lease / Rental 438.22
Dues & Subscription 1,799.89
Computer/Copier Maint. 937.18
Outside Services 10,908.16
Employee Benefits 10,927.57
Depreciation 27,249.90
Amortization of Goodwill 2,994.00
Late fees - Orange 183.64
Late fees - Bakersfield 5.65
Late fees - Riverside 128.35
Late fees - Funding 476.46
Late fees - Corporate 804.67
Bad debts 23,000.00
Property Taxes 22.64
Taxes & Licenses 3,082.15
Payroll Taxes 19,148.30
Printing 1,662.69
Telephone Exp. 20,018.56
Utilities 4,122.15
_____________
Total Operating Expense 738,962.30
Other Income/Expense
Interest Income 36,714.42
Interest Expense (48,811.62)
_____________
Total Other (12,097.20)
</TABLE>
RENET FINANCIAL CORPORATION
STATEMENT OF INCOME (Continued)
June 30, 1996
<TABLE>
<S> <C>
Fourth
Quarter
____________
Income Before Taxes (160,520.22)
Net Income or Loss (160,520.22)
____________
Retained Earnings-End (160,520.22)
============
</TABLE>
