<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K/A
AMENDMENT TO APPLICATION OR REPORT
Filed pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 4, 1996
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RSI HOLDINGS, INC.
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(Exact name of registrant as specified in charter)
North Carolina 0-18091 56-1200363
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
Post Office Box 6847, Greenville, South Carolina 29606
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (864) 271-7171
----------------
Not Applicable
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(Former name or former address, if changed since last report
The undersigned registrant hereby amends the following items,
financial statements, exhibits or other portions of its Form 8-K Report filed
on November 12, 1996 as set forth in the pages attached hereto:
Item 7 of Form 8-K - - Financial Statements, Pro Forma Financial Information
and Exhibits
(a) Financial statements of business acquired -
CambridgeBanc, Inc.
(b) Pro forma financial information
<PAGE> 2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this amendment to report on Form 8-K to be
signed on its behalf by the undersigned, thereunto duly authorized.
Date: January 15, 1997 By: /s/ Joe F. Ogburn
-------------------
Joe F. Ogburn,
Vice President
and Treasurer
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ITEM 7 FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of business acquired -
CambridgeBanc, Inc.
Audited Financial Statements
- Report of Independent Certified Public Accountants
- Balance Sheet - December 31, 1995
- Statement of Operations - For the period from September 29, 1995
(inception) through December 31, 1995
- Statement of Shareholder's Equity - For the period from September
29, 1995 (inception) through December 31, 1995
- Statement of Cash Flows - For the period from September 29, 1995
(inception) through December 31, 1995
- Notes to Financial Statements
Unaudited Interim Financial Statements
- Balance Sheet - September 30, 1996
- Statement of Operations - Nine Months ended September 30, 1996
- Statement of Shareholder's Equity - Nine Months ended September
30, 1996
- Statement of Cash Flows - Nine Months ended September 30, 1996
- Notes to Financial Statements
(b) Pro forma financial information
Pro forma financial information for 1996 and 1995 is not presented
as CambridgeBanc, Inc. has only been in existence since September 29,
1995 and had no material revenues until 1996. In addition, RSI
Holdings, Inc. had no operations during fiscal 1996 and 1995 and has
presented its financial results on the liquidation basis since August
31, 1994.
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AUDITED FINANCIAL STATEMENTS OF BUSINESS ACQUIRED
AS OF DECEMBER 31, 1995 AND
FOR THE PERIOD FROM SEPTEMBER 29, 1995 (INCEPTION) TO DECEMBER 31, 1995
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<PAGE> 5
The Directors
CambridgeBanc, Inc.
Greenville, South Carolina
We have audited the accompanying balance sheet of CambridgeBanc,
Inc. (a Development Stage Company) as of December 31, 1995, and the related
statements of operations, shareholder's equity and cash flows for the period
from September 29, 1995 (inception) to December 31, 1995. 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 audit.
We conducted our audit 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 audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of
CambridgeBanc, Inc. as of December 31, 1995 and the results of its operations
and its cash flows for the period from September 29, 1995 (inception) to
December 31, 1995, in conformity with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on
the basic financial statements taken as a whole. The accompanying information
provided in Supplemental Schedule 1 is presented for the purpose of additional
analysis and is not a required part of the basic financial statements. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
Elliott, Davis & Company, L. L. P.
Greenville, South Carolina
January 22, 1996
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CAMBRIDGEBANC, INC.
(A Development Stage Company)
BALANCE SHEET
DECEMBER 31, 1995
<TABLE>
<S> <C> <C>
ASSETS
Cash and cash equivalents $305,463
Mortgage loans receivable, net - Note 2 47,953
Furniture and equipment, net - Note 3 65,551
Prepaid and other 37,724
--------
Total assets $456,691
========
LIABILITIES AND SHAREHOLDER'S EQUITY
Due to affiliated company - Note 4 $181,317
Shareholder's equity
Common stock, no par value - authorized 100,000
shares, 1,000 shares issued $375,000
Retained earnings (deficit) (99,626) 275,374
------- --------
$456,691
========
</TABLE>
See Notes to Financial Statements which are an integral part of this
statement.
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<PAGE> 7
CAMBRIDGEBANC, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
For the period from September 29, 1995 (inception) through
December 31, 1995
<TABLE>
<S> <C> <C>
Interest income, servicing fees and finance charges $356
Provision for loan losses 100
--------
256
Other expenses
Salaries, wages and employee benefits $35,723
Legal and professional 6,983
Advertising 15,338
Postage 20,711
Travel and entertainment 5,311
Other operating expenses 15,816 99,882
--------- --------
Loss before provision for income taxes (99,626)
Provision for income taxes -
--------
Net loss $(99,626)
========
</TABLE>
See Notes to Financial Statements which are an integral part of this
statement.
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<PAGE> 8
CAMBRIDGEBANC, INC.
(A Development Stage Company)
STATEMENT OF SHAREHOLDER'S EQUITY
For the period from September 29, 1995 (inception) through
December 31, 1995
<TABLE>
<CAPTION>
Retained
Common earnings
stock (deficit) Total
--------- ----------- -------
<S> <C> <C> <C>
Balance at September 29, 1995 - Inception $ - $ - $ -
Issuance of common stock 375,000 - 375,000
Net loss - (99,626) (99,626)
--------- --------- ---------
Balance at December 31, 1995 $ 375,000 $ (99,626) $ 275,374
========= ========= =========
</TABLE>
See Notes to Financial Statements which are an integral part of this
statement.
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<PAGE> 9
CAMBRIDGEBANC, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
For the period from September 29, 1995 (inception) through
December 31, 1995
<TABLE>
<S> <C>
OPERATING ACTIVITIES
Net loss $ (99,626)
Adjustments to reconcile net loss to net cash
used for operating activities
Depreciation and amortization 2,441
Provision for loan losses 100
Changes in operating assets and liabilities increasing (decreasing) cash
Accrued interest receivable (337)
Deferred loan costs 2,284
Other assets (38,906)
---------
Net cash used for operating activities (134,044)
---------
INVESTING ACTIVITIES
Loans originated for investment purchases (50,000)
Purchase of furniture and equipment (66,810)
---------
Net cash used for investing activities (116,810)
---------
FINANCING ACTIVITIES
Issuance of common stock 375,000
Net cash received from borrowings with affiliated company 181,317
---------
Net cash provided by financing activities 556,317
---------
Net increase in cash and cash equivalents 305,463
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD -
---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 305,463
=========
</TABLE>
See Notes to Financial Statements which are an integral part of this
statement.
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<PAGE> 10
CAMBRIDGEBANC, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACTIVITIES
Organization and business activity
As of the date of the accompanying financial statements,
CambridgeBanc, Inc. (the "Company") was a wholly-owned subsidiary of
Emergent Group, Inc. ("Parent Company"). The Company was formed on
September 29, 1995 and is a Title I non-supervised lender approved by the
Department of Housing and Urban Development (HUD). Loans are made to
finance home improvements up to $25,000. While the Company was a
subsidiary of the Parent Company, the funds for these loans were obtained
through a line of credit supplied by an affiliated company.
The Company's financial statements have been prepared in accordance with
disclosure requirements applicable to a development stage entity since
planned principal operations have commenced but there have been no
significant revenues derived from those operations.
Cash and cash equivalents
The Company considers all highly liquid investments with an original
maturity of three months or less to be cash equivalents and accordingly
the carrying amount of such instruments is deemed to be a reasonable
estimate of fair value. The Company's cash is maintained at one financial
institution with a $100,000 FDIC insurance limit.
Mortgage loans receivable
Mortgage loans receivable consist of second mortgages originated
throughout South Carolina and are stated at the principal amount
outstanding. Non-refundable loan fees and direct costs associated with
the origination of loans are deferred and netted against outstanding loan
balances. Interest income is recorded on the accrual basis as earned.
Allowance for loan losses
The allowance for loan losses is based on management's ongoing evaluation
of the loan portfolio and reflects an amount that, in management's
opinion, is adequate to absorb losses in the existing portfolio. In
evaluating the portfolio, management takes into consideration numerous
factors, including current economic conditions, prior loan loss
experience, the composition of the loan portfolio, and management's
estimate of anticipated credit losses. Loans are charged against the
allowance at such time as they are determined to be losses. Subsequent
recoveries are credited to the allowance.
Management considers the year-end allowance appropriate and adequate to
cover possible losses in the loan portfolio; however, management's
judgment is based upon a number of assumptions about future events, which
are believed to be reasonable, but which may or may not prove valid.
Thus, there can be no assurance that charge-offs in future period will not
exceed the allowance for loan losses or that additional increases in the
allowance for loan losses will not be required.
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<PAGE> 11
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACTIVITIES, Continued
Furniture and equipment
Furniture and equipment are stated at cost less accumulated depreciation
and amortization. Depreciation is calculated using the straight-line
method over the useful lives of the related assets.
Other assets
Other assets are comprised primarily of organizational costs that the
Company incurred during the development stage. These costs are being
amortized on a straight-line basis over sixty months.
Income taxes
The Company was included in the consolidated federal income tax return
of its Parent Company. The tax sharing agreement with the Parent
Company allowed the Company to reduce its taxes to the extent of an
available net operating (NOL) carryforward of its Parent Company.
Estimates
The accompanying financial statements have been prepared in accordance
with generally accepted accounting principles. In preparing the
financial statements, management is required to make estimates and
assumptions that affect the reported amounts of assets and liabilities
as of the date of the balance sheet and revenues and expenses for the
period. Actual results could differ from those estimates.
NOTE 2 - MORTGAGE LOANS RECEIVABLE
The following is a summary of mortgage loans receivable at December
31, 1995:
<TABLE>
<S> <C>
Second mortgage loans $ 50,000
Accrued interest receivable 337
-----------
50,337
Less net deferred loan fees (2,284)
Less allowance for loan losses (100)
-----------
Mortgage loans receivable, net $ 47,953
===========
</TABLE>
The mortgage loans have contractual maturities of 180 to 240 months with
interest rates ranging from 12 to 14 percent at December 31, 1995.
NOTE 3 - FURNITURE AND EQUIPMENT
Furniture and equipment consists of the following at December 31,
1995:
<TABLE>
<S> <C>
Office furniture $ 34,782
Computer equipment 32,028
-----------
66,810
Less accumulated depreciation (1,259)
-----------
$ 65,551
===========
</TABLE>
Depreciation expense totaled $1,259 for the period ended December
31, 1995.
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NOTE 4 - LINE OF CREDIT FROM RELATED PARTY
The Company received a commitment from a company affiliated with the
Parent Company for a line of credit of $500,000 with interest rate at prime
plus two percent (10.5% at December 31, 1995). At December 31, 1995, $318,683
was available under this line.
NOTE 5 - LEASE COMMITMENTS
The Company leases office space under an operating lease. Future
minimum lease payments are as follows:
<TABLE>
<S> <C>
1996 $ 20,028
1997 20,028
1998 16,690
------------
$ 56,746
</TABLE>
Total rent expense was $3,514 for the period ended December 31,
1995.
NOTE 6 - FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards (SFAS) 107, "Disclosures
about Fair Value of Financial Instruments" required disclosures of fair value
information whether or not recognized in the statement of financial position,
when it is practicable to estimate the fair value. SFAS 107 defines a
financial instrument as cash, evidence of an ownership interest in an entity or
contractual obligations which require the exchange of cash or financial
instruments. Certain items are specifically excluded from the disclosure
requirements, including the Company's Common Stock, furniture and equipment and
other assets.
The following methods and assumptions were used to estimate the fair
value of each class of financial instruments for which it is practicable to
estimate that value.
Cash and short-term investments
For short-term instruments, the carrying amount is a reasonable estimate
of fair value.
Mortgage loans receivable
For residential mortgage loans, fair value is estimated using the
secondary market prices received in recent sales of these loans in the
secondary market.
Due to affiliates
For amounts due to an affiliated company, the carrying amount is a
reasonable estimate of fair value.
The estimated fair values of the Company's financial instruments at
December 31, 1995 are as follows:
<TABLE>
<CAPTION>
Carrying Fair
amount value
--------- ----------
<S> <C> <C>
Financial assets
Cash and short-term investments $305,463 $305,463
Mortgage loans receivable, net 47,953 50,453
Due to affiliated company 181,317 181,317
</TABLE>
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<PAGE> 13
UNAUDITED FINANCIAL STATEMENTS OF BUSINESS ACQUIRED
AS OF SEPTEMBER 30, 1996 AND
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
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<PAGE> 14
CAMBRIDGEBANC, INC.
BALANCE SHEET
(Unaudited)
September 30, 1996
<TABLE>
<S> <C>
ASSETS
Cash and cash equivalents $ 77,402
Mortgage loans receivable, net 505,164
Furniture and equipment, net 62,436
Prepaid and other 2,422
----------------
Total assets $ 647,424
================
LIABILITIES AND SHAREHOLDER'S EQUITY
Due to affiliated company $ 315,851
Accrued expenses 4,485
----------------
320,336
Shareholder's equity
Common stock, no par value,
authorized 100,000 shares,
1000 shares issued 775,000
Retained earnings (deficit) (447,912)
----------------
327,088
----------------
$ 647,424
================
</TABLE>
See Notes to Financial Statements which are an integral part of this statement.
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<PAGE> 15
CAMBRIDGEBANC, INC.
STATEMENT OF OPERATIONS
(Unaudited)
Nine months ended September 30, 1996
<TABLE>
<S> <C>
Interest income, gain on sale of loans
and other income $ 117,578
Provision for loan losses 888
-----------------
116,690
Expenses:
Salaries, wages and employee benefits $ 184,736
Legal and professional 18,750
Advertising 85,593
Rent 21,236
Postage 42,191
Travel and entertainment 5,158
Management fee 40,000
Other operating expenses 67,312
-----------------
464,976
-----------------
Net loss $ (348,286)
=================
</TABLE>
See Notes to Financial Statements which are an integral part of this statement.
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<PAGE> 16
CAMBRIDGEBANC, INC.
STATEMENT OF SHAREHOLDER'S EQUITY
(Unaudited)
Nine Months ended September 30, 1996
<TABLE>
<CAPTION>
Retained
Common Earnings
Stock (Deficit) Total
------------ -------------- --------------
<S> <C> <C> <C>
Balance, beginning $ 375,000 $ (99,626) $ 275,374
Additional contribution
to capital 400,000 400,000
Net loss (348,286) (348,286)
------------ -------------- --------------
Balance, ending $ 775,000 $ (447,912) $ 327,088
============ ============== ===============
</TABLE>
See Notes to Financial Statements which are an integral part of this statement.
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<PAGE> 17
CAMBRIDGEBANC, INC.
STATEMENT OF CASH FLOWS
(Unaudited)
Nine Months ended September 30, 1996
<TABLE>
<S> <C>
OPERATING ACTIVITIES
Net loss $ (348,286)
Adjustments to reconcile net loss to net
cash used for operating activities
Depreciation and amortization 32,611
Provision for loan losses 888
Changes in operating assets and liabilities
Accrued interest receivable (4,817)
Other receivables (27,560)
Deferred loan costs 18,624
Other assets 11,737
Accrued liabilities 4,485
-----------------
Net cash used for operating activities (312,318)
INVESTING ACTIVITIES
Loans originated for investment purposes (444,346)
Purchase of furniture and equipment (5,931)
-----------------
Net cash used for investing activities (450,277)
FINANCING ACTIVITIES
Issuance of common stock 400,000
Net cash received from borrowings
with affiliated company 134,534
-----------------
Net cash provided by financing activities 534,534
-----------------
Net decrease in cash and cash equivalents (228,061)
CASH AND CASH EQUIVALENTS AT
JANUARY 1, 1996 305,463
-----------------
SEPTEMBER 30, 1996 $ 77,402
=================
</TABLE>
See Notes to Financial Statements which are an integral part of this statement.
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<PAGE> 18
CAMBRIDGEBANC, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 -- BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with Article 10 for Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the nine months ended September 30, 1996 are not necessarily
indicative of the results that may be expected for the year ended December 31,
1996.
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(c) Exhibit
(a) Listing of Exhibit
23 Consent of Elliott, Davis & Company, L.L.P.
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<PAGE> 1
Exhibit 23
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
RSI Holdings, Inc.
Greenville, South Carolina
We hereby consent to the use of our report dated January 22, 1996 with respect
to the financial statements of CambridgeBanc, Inc. included in this current
report on Form 8-K/A dated November 4, 1996.
/s/ Elliott, Davis & Company, L.L.P.
Greenville, South Carolina
January 10, 1997
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