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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 8-K/A
Amendment No. 2 to
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
Date of Earliest Event Reported: January 18, 2000
LAHAINA ACQUISITIONS, INC.
(Exact Name of Registrant as specified in its Charter)
Commission File No. 0-27480
Colorado 84-1325695
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
5895 Windward Parkway, Suite 220
Alpharetta, Georgia 30005
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(Address of Principal Executive Offices, including Zip Code)
(770) 754-6140
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name or former address, if changed since last report)
Copies to:
Robert E. Altenbach, Esq.
Kutak Rock LLP
Suite 2100
235 Peachtree Street, N.E.
Atlanta, Georgia 30303
(404) 222-4600
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<PAGE>
This is Amendment No. 2 to the Registrant's current report on Form 8-K that
was originally filed with the commission on January 18, 2000. The Registrant
filed Amendment No. 1 to the original current report on February 10, 2000 to
clarify certain information pertaining to the sale by the Registrant and its
wholly-owned subsidiary, Accent Mortgage Services, Inc., of all of the
outstanding capital stock of Beachside Commons I, Inc. This Amendment No. 2 is
being filed in order to provide information required under Item 7.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Businesses Acquired
Not applicable.
(b) Unaudited Pro Forma Financial Information
The unaudited pro forma condensed consolidated statements of operations
contained herein are provided for illustrative purposes only, and should be read
in conjunction with the accompanying notes thereto. The unaudited pro forma
condensed consolidated statements of operations are based on, and should be read
in conjunction with, the historical financial statements and the notes thereto
of the Registrant included in its annual report on Form 10-K for the fiscal year
ended September 30, 1999, the Registrant's quarterly report on Form 10-Q for the
three-month period ended December 31, 1999, and any other filings with the
Securities and Exchange Commission made by the Registrant since September 30,
1999.
The unaudited pro forma condensed consolidated statements of operations
have been prepared to reflect the sale of Beachside Commons I, Inc. as though it
had occurred on July 9, 1999 (date of inception). An unaudited pro forma
condensed consolidated balance sheet has not been provided, as the Consolidated
Balance Sheets contained in the Registrant's quarterly report on Form 10-Q for
the three-month period ended December 31, 1999 already reflects the sale
transaction.
The unaudited pro forma condensed consolidated statements of operations do
not purport to represent what the Registrant's results of operations would have
actually been if the sale had actually occurred on such dates or to project the
Registrant's financial position or results of operations as of any future date
or for any future period. The unaudited pro forma data is not indicative of the
operating results or financial position that would have been achieved had the
sale been consummated at the dates indicated, nor is it indicative of future
operating results and financial condition.
The unaudited pro forma adjustments have been applied to the financial
information derived from the financial statements of the Registrant to account
for the sale.
<PAGE>
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
PERIOD FROM JULY 9, 1999 (DATE OF INCEPTION) THROUGH SEPTEMBER 30, 1999
<TABLE>
Pro Forma
Condensed Condensed
Consolidated Pro Forma Consolidated
Historical Adjustments without
Lahaina (see notes) Beachside
------------------ ------------------ ------------------
<S> <C> <C> <C>
Revenue:
Mortgage Brokerage Services $ 837,803 $ - $ 837,803
Real Estate Development 88,909 - 88,909
------------------ ------------------ ------------------
Total revenue 926,712 - 926,712
------------------ ------------------ ------------------
Operating expenses:
Selling, general and administrative 1,785,097 (15,256) (A) 1,769,841
Amortization of goodwill 18,609 - 18,609
Depreciation and amortization 3,449 - 3,449
------------------ ------------------ ------------------
Total operating expenses 1,807,155 (15,256) 1,791,899
------------------ ------------------ ------------------
Operating income (loss) (880,443) 15,256 (865,187)
Other expense (income):
Other income (1,348) - (1,348)
Interest expense 138,906 (12,692) (B) 126,214
Other expense 137,304 - 137,304
------------------ ------------------ ------------------
274,862 (12,692) 262,170
------------------ ------------------ ------------------
Income (loss) before income taxes (1,155,305) 27,948 (1,127,357)
Income taxes - - -
------------------ ------------------ ------------------
Net income (loss) $ (1,155,305) $ 27,948 $ (1,127,357)
================== ================== ==================
Basic earnings (loss) per share $ (0.08) $ (0.08)
================== ==================
Diluted earnings (loss) per share $ (0.08) $ (0.08)
================== ==================
Weighted average shares outstanding - basic 14,592,917 14,592,917
================== ==================
Weighted average shares outstanding - diluted 14,592,917 14,592,917
================== ==================
</TABLE>
See accompanying notes to unaudited pro forma
condensed consolidated statement of operations
<PAGE>
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
THREE-MONTHS ENDED DECEMBER 31, 1999
<TABLE>
Pro Forma
Condensed Condensed
Consolidated Pro Forma Consolidated
Historical Adjustments without
Lahaina (see notes) Beachside
------------------ ------------------ ------------------
<S> <C> <C> <C>
Revenue:
Mortgage Brokerage Services $ 1,686,361 $ - $ 1,686,361
Real Estate Development 1,090,781 - 1,090,781
------------------ ------------------ ------------------
Total revenue 2,777,142 - 2,777,142
------------------ ------------------ ------------------
Operating expenses:
Selling, general and administrative 2,204,409 (21,196) (A) 2,183,213
Amortization of goodwill 38,277 - 38,277
Depreciation and amortization 6,219 - 6,219
------------------ ------------------ ------------------
Total operating expenses 2,248,905 (21,196) 2,227,709
------------------ ------------------ ------------------
Operating income (loss) 528,237 21,196 549,433
Other expense (income):
Other income (175,039) - (175,039)
Interest expense 178,572 (60,270) (B) 118,302
Other expense 104,049 - 104,049
------------------ ------------------ ------------------
107,582 (60,270) 47,312
------------------ ------------------ ------------------
Income (loss) before income taxes 420,655 81,466 502,121
Income taxes 115,000 (115,000) (C) -
------------------ ------------------ ------------------
Net income (loss) $ 305,655 $ 196,466 $ 502,121
================== ================== ==================
Basic earnings (loss) per share $ 0.02 $ 0.03
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Diluted earnings (loss) per share $ 0.02 $ 0.03
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Weighted average shares outstanding - basic 16,217,343 16,217,343
================== ==================
Weighted average shares outstanding - diluted 17,645,914 17,645,914
================== ==================
</TABLE>
See accompanying notes to unaudited pro forma
condensed consolidated statement of operations
<PAGE>
NOTES TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
1. SALE OF BEACHSIDE COMMONS I, INC.
On December 31, 1999, the Registrant and Accent Mortgage Services, Inc.
("Accent"), a wholly owned subsidiary of the Registrant, sold all of the
outstanding capital stock of Beachside Commons I, Inc. ("Beachside") to NP
Holding, Inc. (the "Buyer"). On December 14, 1998, the Registrant originally
acquired all of the issued and outstanding capital stock of Beachside, which was
reported by the Registrant on a current report on Form 8-K dated December 28,
1998. Beachside is the owner of a commercial real estate development located in
Fernandina Beach, Florida in the resort area of Amelia Island located in
northeast Florida. The property owned by Beachside includes two (2) fully
developed ocean view structures and two ocean front sites for future
development. The net realizable value of the property owned by Beachside has
been determined by the Registrant at this time to be $3,650,000.
The sole member of the Buyer is Beachside Commons Holding, LLC, a recently
formed limited liability company. Beachside Commons Holding, LLC is also the
sole member of Beachside Holding, LLC, which has pledged shares of the
Registrant under a Pledge Agreement (as defined below). Beachside Commons
Holding, LLC is comprised of eight members who received gifts of stock of the
Registrant from Mongoose Investments, LLC, which originally sold all of the
issued and outstanding capital stock of Beachside to the Registrant on December
14, 1998. Each of the members of Beachside Commons Holding, LLC contributed all
of their stock of the Registrant in exchange for a membership interest in
Beachside Commons Holding, LLC. On the date the Registrant originally acquired
all of the issued and outstanding capital stock of Beachside, Mongoose
Investments, LLC owned 89% of the issued and outstanding shares of common stock
of the Registrant. In addition, the manager of Mongoose Investments, LLC,
Richard P. Smyth, served as the Chief Executive Officer, Treasurer and Chairman
of the Board of Directors of the Registrant from December 14, 1998 until August
23, 1999. Neither Mongoose Investments, LLC nor Richard P. Smyth have any
ownership in the Buyer either directly or indirectly.
The purchase price for all of the issued and outstanding capital stock of
Beachside is $4,550,000 payable (i) by the delivery of a Non-Recourse Promissory
Note made payable to Accent in the outstanding principal amount of $3,000,000
from Buyer which bears interest at a rate equal to six percent (6%) per annum
(the "Note") and (ii) by taking the property and assets owned by Beachside
subject to the First Mortgage granted by Beachside in favor of Pacific Coast
Investment Company in the original principal amount of $1,550,000. The purchase
price shall be allocated between the Registrant and Accent for the adjustment,
payment and settlement of certain expenses that the Registrant previously
incurred in connection with the original acquisition of Beachside or its
operating subsequent to the original acquisition. The Registrant and Accent have
also agreed to pay certain liabilities associated with the operation of
Beachside. In the event that such liabilities are not paid by Registrant and/or
Accent, Beachside Holding, LLC may exercise the right to sell shares pledged
under the Pledge Agreement (as defined below) to satisfy such unpaid
liabilities.
<PAGE>
The outstanding principal and interest under the Note is due and payable in
a balloon payment on December 31, 2000. The repayment of the Note is secured
solely by the pledge of 660,000 shares of common stock of Registrant under the
terms of the Stock Pledge Agreement (the "Pledge Agreement") dated December 31,
1999 by and between Beachside Holding, LLC, an affiliate of the Buyer (the
"Pledgor") and Accent. If the outstanding principal and interest under the Note
is not paid in full on or before December 31, 2000, Registrant may only exercise
its rights to the common stock of the Registrant under the Pledge Agreement and
may not seek any recourse against the Buyer.
In addition, in connection with the sale of all of the issued and
outstanding capital stock of Beachside to the Buyer, the consulting agreement
entered into between the Registrant and Gator Glory, LLC, an affiliate of
Richard P. Smyth, has been terminated, except that the provision requiring
payment of a two percent (2%) fee to obtain certain financing on behalf of the
Registrant remains in effect. The Registrant has also terminated its Consulting
Agreement with Gerald F. Sullivan, except that the provision requiring a one
percent (1%) fee for the first $13,000,000 of transactions consummated by
Registrant as a finder's fee for identifying proposed acquisition candidates
with such fee based on the value of the gross assets of the target company
remains in effect.
The Registrant has recorded the note receivable relating to the sale of
Beachside as an other asset in its consolidated balance sheet at December 31,
1999, at a carrying value of $1,944,877, which represents management's estimate
of its fair value as of December 31, 1999.
2. PERIODS PRESENTED
The unaudited pro forma condensed consolidated statements of operations for
the period from July 9, 1999 (date of inception) through September 30, 1999, as
well as for the three-month period ended December 31, 1999, have been prepared
as though the sale of Beachside occurred as of July 9, 1999 (date of inception).
An unaudited pro forma condensed consolidated balance sheet has not been
provided, as the consolidated balance sheets contained in the Registrant's
quarterly report on Form 10-Q for the three-month period ended December 31, 1999
already reflects the sale transaction.
3. PRO FORMA ADJUSTMENTS
Adjustments included in the unaudited pro forma condensed consolidated
statements of operations are summarized as follows:
(A) To reflect a reduction in administrative costs associated with
operating the Beachside property; a total of $15,256 and
$21,196 for the period from July 9, 1999 (date of inception)
through September 30, 1999 and the three-month period ended
December 31, 1999, respectively.
(B) To reflect a reduction in interest expense associated with a
first mortgage loan on the Beachside property; a total of
$12,692 and $60,270 for the period from July 9, 1999 (date of
inception) through September 30, 1999 and the three-month
period ended December 31, 1999, respectively.
(C) To reflect a reduction in the provision for income taxes of
$115,000 for the three-month period ended December 31, 1999,
relating to a gain (for income tax purposes) on the sale of
Beachside.
<PAGE>
(c) Exhibits
2.1 - Stock Purchase Agreement dated December 31, 1999 among Lahaina
Acquisitions, Inc., Accent Mortgage Services, Inc. and
NP Holding, LLC. (+)
2.2 - Stock Pledge Agreement dated December 31, 1999 by and between
Beachside Holding, LLC and Accent Mortgage Services, Inc. (+)
2.3 - Non-Recourse Purchase Money Note dated December 31, 1999 delivered by
NP Holding, LLC to Accent Mortgage Services, Inc. in the original principal
amount of $3,000,000. (+)
(+) previously filed.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
LAHAINA ACQUISITIONS, INC.
March 20, 2000 /s/ L. Scott Demerau
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L. Scott Demerau
President and Chief Executive Officer
