UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
Date of Earliest Event Reported: July 6, 2000
LAHAINA ACQUISITIONS, INC.
(Exact Name of Registrant as specified in its Charter)
Commission File No. 0-27480
Colorado 84-1325695
--------------------------------------------------------------------------------
(State or other jurisdiction (I.R.S Employer
of incorporation or organization) Identification No.)
5895 Windward Parkway, Suite 220
Alpharetta, Georgia 30005
--------------------------------------------------------------------------------
(Address of Principal Executive Offices, including Zip Code)
(770) 754-6140
--------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
--------------------------------------------------------------------------------
(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
================================================================================
This is Amendment No. 1 to the Registrant's current report on Form 8-K that was
originally filed on November 21, 2000. This Amendment No. 1 is being filed to
include financial stements of United Capital Mortgage Corporation.
LAHAINA ACQUISITIONS, INC.
FORM 8-K/A
Table of Contents
<TABLE>
<S> <C>
Page
Item 2. Acquisition or Disposition of Assets 2
Exhibit 2.1 - Stock Purchase Agreement
Item 7. Financial Statements and Exhibits 3
Signatures
</TABLE>
<PAGE>
LAHAINA ACQUISITIONS, INC.
FORM 8-K/A
Item 2. Acquisition or Disposition of Assets
On November 14, 2000 Registrant acquired 100% of the stock of United
Capital Mortgage Corporation ("United"). The effective date of the purchase was
October 1, 2000. The total purchase price was $2,947,675, payable as follows:
$750,000 in cash at the closing.
$250,000 note due 90 days from the date of closing.
$897,675 note due in 12 equal monthly installments beginning 30 days after
the closing date.
$1,050,000 in stock of Registrant (total of 934,996 shares of restricted
common stock of Lahaina Acquisitions, Inc.)
If the market value one year after the closing of the stock issued is less
than $1,050,000, the selling stockholders have the right to demand additional
shares such that the aggregate value of the shares issued is $1,050,000. The
market value of the shares issued was and will be determined by the average
closing price of the stock for the 5 days preceding the measurement date.
The price paid for the stock of United was determined through arm's length
negotiations between the parties.
United Capital is a traditional mortgage operation in that it has a
warehouse line of credit that is used to fund mortgages that are then sold to
investors. United collects fees for originating the loans and then earns fees
when the loan is sold to the ultimate lender/investor. United retains no loans
for investment and performs no loan servicing function. United's corporate
offices are in Denver, CO with traditional branch operations in Boulder, Co,
Clearwater, FL, Fort Collins, CO, and Las Vegas, NV. United has a relatively
small wholesale operation in Buffalo, NY.
2
<PAGE>
Item 7. Financial Statements and Exhibits.
Independent Auditor's Report
Board of Directors and Stockholders
United Capital Mortgage Corporation
14001 E. Iliff Avenue, Suite 901
Aurora, Colorado 80014
Gentlemen:
We have audited the accompanying statement of financial position of United
Capital Mortgage Corporation as of June 30, 2000 and 1999, and the related
statements of income, retained earnings, and cash flows for the years then
ended. 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
misstatements. 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 financial statements referred to above present fairly
in all material respects, the financial position of United Capital Mortgage
Corporation as of June 30, 2000 and 1999, and the results of its operations and
cash flows for the years then ended in conformity with generally accepted
accounting principles.
WADSWORTH, TUCKER & PARKS
El Dorado, Arkansas
Certified Public Accountants
August 25, 2000
3
<PAGE>
<TABLE>
UNITED CAPITAL MORTGAGE CORPORATION
STATEMENT OF FINANCIAL POSITION
AS OF JUNE 30, 2000 AND 1999
<S> <C> <C>
2000 1999
Current Assets ---- ----
Cash in Bank 463,395 380,333
Certificate of Deposit 112,993 144,437
Accounts Receivable 188,499 258,027
Employee Advances 103,058 81,455
Prepaid Insurance 4,383 4,362
Prepaid Lease 11,182 8,682
Prepaid Expenses 15,001 11,184
Prepaid Taxes 46,239 -
Mortgages Held for Sale 11,386,191 13,364,618
Foreclosure Real Estate - 125,448
------------- -------------
Total Current Assets 12,330,941 14,378,546
Property, Plant, and Equipment
Equipment 891,979 845,075
Accumulated Depreciation (513,160) (417,937)
------------- -------------
Total Property, Plant, and Equipment 378,819 427,138
Other Assets
Note Receivable 2,500 15,091
Deposits 46,787 46,787
Investment in Joint Venture 49,780 -
Real Estate 340,217 340,217
------------- -------------
Total Other Assets 439,284 402,095
------------- -------------
Total Assets 13,149,044 15,207,779
============= =============
Escrow Funds
(Segregated in Separate Bank Accounts
and Excluded from Company Assets and 187,478 91,352
Liabilities) See Contra ============= =============
Current Liabilities
Accounts Payable 428,824 208,328
Payroll Taxes Payable 7,290 6,715
Federal Income Tax 1,900 23,411
Current Portion of Notes Payable (note) 11,384,005 13,421,571
------------- -------------
Total Current Liabilities 11,822,019 13,660,025
Long-Term Liabilities
Deposits Payable 1,300 1,300
Deferred Income Taxes 30,336 22,729
Long-Term Portion of Notes Payable 282,362 299,364
-------------- -------------
Total Long-Term Liabilities 313,998 323,393
--------------- -------------
Total Liabilities 12,136,017 13,983,418
Stockholders' Equity
Common Stock 7,050 5,300
Additional Paid in Capital 854,711 681,461
Retained Earnings 151,266 537,600
--------------- -------------
Total Stockholders Equity 1,013,027 1,224,361
--------------- -------------
Total Liabilities and Stockholders' Equity 13,149,044 15,207,779
=============== =============
Escrow Funds
(Segregated in Separate Bank Accounts 187,478 91,353
and Excluded from Company Assets and =============== =============
Liabilities) See Contra
</TABLE>
See notes to financial statements
4
<PAGE>
<TABLE>
UNITED CAPITAL MORTGAGE CORPORATION
STATEMENT OF RETAINED EARNINGS
FOR THE YEARS ENDED JUNE 30, 2000 AND 1999
2000 1999
------ ------
<S> <C> <C>
Balance - Beginning of Year 537,600 464,992
Add: Net Income (386,334) 72,608
------------- -------------
Balance - End of Year 151,266 537,600
============= =============
</TABLE>
See notes to financial statements
5
<PAGE>
<TABLE>
UNITED CAPITAL MORTGAGE CORPORATION
INCOME STATEMENT
FOR THE YEAR ENDED JUNE 30, 2000 AND 1999
2000 1999
---- ----
<S> <C> <C>
Income
Servicing Income 900 540
Origination Fees 1,424,827 1,926,716
Marketing Fees 3,573,023 4,236,887
Appraisal Fees 168,233 118,821
Interest Income 534,051 698,486
------------- -------------
Total Income 5,701,034 6,981,450
Expenses
Accounting 6,465 6,516
Advertising 65,993 121,165
Automobile 17,081 32,959
Bad Debts 86,043 7,700
Charitable Donations 1,775 3,694
Closing 5,796 7,669
Computer 17,562 28,279
Depreciation 95,223 93,968
Dues 30,741 34,284
Interest 435,103 602,675
Insurance 158,363 156,715
Lease 541,864 461,804
Legal 103,357 38,999
Marketing 58,110 60,472
Meals and Entertainment 28,490 49,032
Office 125,385 203,418
Postage 83,222 112,668
Processing 172,096 131,603
Salaries 3,396,102 4,061,633
Taxes 249,790 293,346
Telephone and Utilities 224,059 186,278
Travel 99,653 125,455
Quality Review 16,267 22,459
Warehouse 35,916 41,423
------------- -------------
Total Expenses 6,054,456 6,884,214
------------- -------------
Net Income Before Other Income
and Expenses (353,422) 97,236
Other Income and (Expenses)
Gain (Loss) on Disposition of Assets (64,593) (4,570)
------------- -------------
Net Income Before Income Tax (418,015) 92,666
Income Tax Expense 31,685 (20,058)
------------- -------------
Net Income 386,330 72,608
============= =============
See notes to financial statements
</TABLE>
6
<PAGE>
UNITED CAPITAL MORTGAGE CORPORATION
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 2000 AND 1999
<TABLE>
2000 1999
---- ----
<S> <C> <C>
Cash flows from operating activities
Net Income ($386,330) $72,608
------------- -------------
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 95,223 93,969
Change in Assets & Liabilities
(Increase) decrease in Certificate of Deposit 31,444 (5,844)
(Increase) decrease in Foreclosure Escrow - (3,500)
(Increase) decrease in Income Receivable 69,532 56,876
(Increase) decrease in Employee Advances (6,512) (12,436)
(Increase) decrease in Prepaid Insurance (21) 252
(Increase) decrease in Prepaid Lease (2,500) 608
(Increase) decrease in Prepaid Expenses (3,817) (2,274)
(Increase) decrease in Mortgage Loans for Sale 1,978,427 1,955,110
(Increase) decrease in Deposits - (2,978)
Increase (decrease) in Accounts Payable 220,488 (150,631)
Increase (decrease) in Taxes Payable 575 1,023
Increase (decrease) in Income Taxes Payable (21,511) 5,261
Increase (decrease) in Deferred Income Taxes 7,607 2,394
Increase (decrease) in Prepaid Income Taxes (46,239) -
------------- -------------
Total adjustments 2,322,696 1,922,520
------------- -------------
Net cash provided (used) by operating activities 1,936,366 1,995,128
Cash flow from investing activities:
Purchase of Equipment (46,904) (70,666)
Purchase of Real Estate - (125,448)
Purchase of Joint Venture (49,780) -
Notes Receivable (2,500) -
Sale of Assets 125,448 -
------------- -------------
Net cash provided (used) by investing activities 26,264 (196,114)
Cash flow from financing activities:
Net Change in Lines of Credit (2,072,698) (1,783,457)
Principal Proceeds 41,254 54,759
Principal Payments on Notes Payable (23,124) (70,377)
Issue of Stock 175,000 -
------------- -------------
Net cash provided (used) by financing activities (1,879,568) (1,799,075)
------------- -------------
Net increase (decrease) in cash and equivalents 83,062 (61)
Cash and equivalents, beginning of year 380,333 380,394
------------- -------------
Cash and equivalents, end of year $463,395 $380,393
============= =============
</TABLE>
See notes to financial statements
7
<PAGE>
UNITED CAPITAL MORTGAGE CORPORATION
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
1. Nature of Operations
United Capital Mortgage Corporation originates and sells home mortgage
loans on the secondary market.
2. Summary of significant accounting policies.
a. 1,000 shares of Class A voting $1.00 par value common stock are
authorized, issued and outstanding. 1,000,000 shares of Class B non-voting
$.01 par value common stock are authorized, 605,000 shares are issued and
outstanding.
b. The accrual method of accounting is used.
c. The election was made to amortize organization expenses over a
period of 60 months.
d. Equipment is recorded at cost and is depreciated on a combination
of straight line and accelerated methods.
e. Leased equipment with an initial term greater than one year is
capitalized.
f. Amounts received from builders and lenders as commitment fees and
expenses are deposited into escrow accounts. The income is recognized as
loan commitments are fulfilled and the fees are earned.
g. The income tax returns filed have not been audited by the Internal
Revenue Service.
h. For purposes of the statement of cash flows, the company considers
all highly liquid debt instruments purchased with an original maturity of
three months or less to be cash equivalents.
i. Temporary differences giving rise to the deferred tax liability
consists primarily of the excess of depreciation for tax purposes over the
amount for financial reporting purposes, and the difference between income
and expenses reported on the accrual method for financial statement
purposes and the cash basis for the tax return.
j. The company has not accrued uncompensated absences because the
amount cannot be reasonably estimated.
k. United Capital Mortgage Corporation's cash accounts are located at
various institutions. Each deposit is insured up to $100,000 by the Federal
Deposit Insurance Corporation. The certificate of deposit is not insured.
l. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results could differ from those estimates.
m. The cost basis of accounting is used for the investment in joint
venture.
n. The direct method is used to account for bad debts.
8
<PAGE>
UNITED CAPITAL MORTGAGE CORPORATION
NOTES TO FINANCIAL STATEMENTS (continued)
JUNE 30, 2000 AND 1999
3. Supplemental disclosures of cash flow information:
Cash Paid During the Year For: 2000 1999
Interest 402,261 590,223
Income Taxes 28,459 22,831
4. Inventory of Loans for Resale
United Capital Mortgage Corporation had the following amounts in inventory:
No. of Loans in Inventory Balance of Inventory
6-30-00 6-30-99 6-30-00 6-30-99
88 121 11,386,191 13,364,618
United Capital Mortgage Corporation does not retain any loans as
investments. Placing or sale of the loans takes an average of eight days.
These loans are held at cost.
5. Servicing
On November 30, 1997, United Capital Mortgage Corporation sold all its
loan servicing rights. As of June 30, 1999 and 1998, United Capital
Mortgage was not servicing any loans.
6. Pension Plan
United Capital Mortgage Corporation provides a 401(k) pension plan for
its employees.
Employees with six months of service are eligible to participate.
Contributions are employee elective deferrals. The employer
contribution is discretionary. United Capital Mortgage did not make an
employer contribution.
9
<PAGE>
UNITED CAPITAL MORTGAGE CORPORATION
NOTES TO FINANCIAL STATEMENTS (continued)
JUNE 30, 2000 AND 1999
Note 7. Notes Payable
<TABLE>
June 30, 2000
Interest Monthly Balance Due 7/1/00 Due 7/1/01 Due 7/1/02 Due 7/1/03 Due 7/1/04
Rate Payment 6/30/00 6/30/01 6/30/02 6/30/03 6/30/04 6/30/05
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Lanier 12.00% 295 2,742 2,742 - - - -
Lanier 12.00% 284 1,731 1,731 - - - -
Chase 8.50% 988 47,282 8,150 39,132 - - -
GMAC Mortgage 9.75% 2,224 245,832 2,602 3,115 3,433 3,783 4,169
Banco Espirito
Santo E Prime + 1% 107,128 107,128 - - - -
Commercial De Lisboa
New York, N.Y.
GMAC RFC LIBOR 11,261,652 11,261,652
------------------------------------------------------------------------
Total 11,666,368 11,384,005 42,247 3,433 3,783 4,169
========================================================================
</TABLE>
<TABLE>
June 30, 1999
Interest Monthly Balance Due 7/1/99 Due 7/1/00 Due 7/1/01 Due 7/1/02 Due 7/1/03
Rate Payment 6/30/99 6/30/00 6/30/01 6/30/02 6/30/03 6/30/04
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Lanier 12.00% 423 5,910 5,077 833 - - -
Lanier 12.00% 295 5,781 2,733 3,048 - - -
Lanier 12.00% 284 4,877 3,039 1,838 - - -
Chase 8.50% 988 54,759 7,477 8,150 39,132 - -
Capstead Servicing 8.13% 1,997 249,384 3,021 3,296 243,067 - -
Banco Espirito
Santo E Prime + 1% 65,874 65,874 - - - -
Commercial De Lisboa
New York, N.Y.
PNC Mortgage Bank Libor + 2.25% 95,721 95,721 - - - -
LaSalle 13,238,629 13,238,629 - - - -
-------------------------------------------------------------------------------------
<30 Days Libor + 2.125%
31-61 Days Libor + 2.375%
>61 Days Libor + 2.625%
Total 13,720,935 13,421,571 17,165 282,200 0 0
===================================================================================
</TABLE>
10
<PAGE>
Independent Auditor's Report
Board of Directors and Stockholders
United Capital Mortgage Corporation
14001 E. Iliff Avenue, Suite 901
Aurora, Colorado 80014
Gentlemen:
We have audited the accompanying statement of financial position of United
Capital Mortgage Corporation as of June 30, 1999 and 1998, and the related
statements of income, retained earnings, and cash flows for the years then
ended. 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
misstatements. 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 financial statements referred to above present fairly
in all material respects, the financial position of United Capital Mortgage
Corporation as of June 30, 1999 and 1998, and the results of its operations and
cash flows for the years then ended in conformity with generally accepted
accounting principles.
WADSWORTH, TUCKER & PARKS
El Dorado, Arkansas
Certified Public Accountants
August 20, 1999
11
<PAGE>
UNITED CAPITAL MORTGAGE CORPORATION
STATEMENT OF FINANCIAL POSITION
AS OF JUNE 30, 1999 AND 1998
<TABLE>
1999 1998
---- ----
<S> <C> <C>
Current Assets
Cash in Bank 380,333 380,393
Certificate of Deposit 144,437 138,604
Accounts Receivable 258,027 314,903
Employee Advances 81,455 84,112
Prepaid Insurance 4,362 4,614
Prepaid Lease 8,682 9,290
Prepaid Expenses 11,184 8,909
Mortgages Held for Sale 13,364,618 15,319,728
Foreclosure Real Estate 125,448 0
------------ ------------
Total Current Assets 14,378,546 16,260,553
Property, Plant, and Equipment
Equipment 845,075 794,453
Accumulated Depreciation (417,937) (344,012)
------------ ------------
Total Property, Plant, and Equipment 427,138 450,441
Other Assets
Note Receivable 15,091 0
Deposits 46,787 40,309
Real Estate 340,217 340,217
------------ ------------
Total Other Assets 402,095 380,526
------------ ------------
Total Assets 15,207,779 17,091,520
============ ============
Escrow Funds
(Segregated in separate Bank Accounts 91,353 121,281
and Excluded from Company Assets and ============ ============
Liabilities) See Contra
Current Liabilities
Accounts Payable 208,328 358,970
Payroll Taxes Payable 6,715 5,692
Federal Income Tax 23,411 28,672
Current Portion of Notes Payable (note) 13,421,571 15,205,120
------------ ------------
Total Current Liabilities 13,660,025 15,598,454
Long-Term Liabilities
Deposits Payable 1,300 1,300
Deferred Income Taxes 22,729 25,123
Long-Term Portion of Notes Payable 299,364 314,890
------------ ------------
Total Long-Term Liabilities 323,393 341,313
------------ ------------
Total Liabilities 13,983,418 15,939,767
Stockholders' Equity
Common Stock 5,300 5,300
Additional Paid in Capital 681,461 681,461
Retained Earnings 537,600 464,992
------------ ------------
Total Stockholders Equity 1,224,361 1,151,753
------------ ------------
Total Liabilities and Stockholders' Equity 15,207,779 17,091,520
============ ============
Escrow Funds
(Segregated in separate Bank Accounts 91,353 121,281
and Excluded from Company Assets and ============ ============
Liabilities) See Contra
</TABLE>
See notes to financial statements
12
<PAGE>
UNITED CAPITAL MORTGAGE CORPORATION
STATEMENT OF RETAINED EARNINGS
FOR THE YEARS ENDED JUNE 30, 1999 AND 1998
1999 1998
---- ----
Balance - Beginning of Year 464,992 371,591
Add: Net Income 72,608 93,401
--------- ---------
Balance - End of Year 537,600 464,992
========= =========
See notes to financial statements
13
<PAGE>
UNITED CAPITAL MORTGAGE CORPORATION
INCOME STATEMENT
FOR THE YEAR ENDED JUNE 30, 1999 AND 1998
1999 1998
------ ------
Income
Servicing Income 540 21,136
Origination Fees 1,926,716 1,793,835
Marketing Fees 4,236,887 4,052,009
Appraisal Fees 118,821 118,710
Interest Income 698,486 718,497
----------- -----------
Total Income 6,981,450 6,704,187
Expenses
Accounting 6,516 6,122
Advertising 121,165 182,260
Automobile 32,959 12,759
Bad Debts 7,700 0
Charitable Donations 3,694 1,265
Closing 7,669 12,154
Computer 28,279 23,947
Depreciation 93,968 76,780
Dues 34,284 33,662
Interest 602,675 731,715
Insurance 156,715 113,230
Lease 461,804 435,892
Legal 38,999 22,011
Marketing 60,472 47,492
Meals and Entertainment 49,032 37,066
Office 203,418 170,872
Postage 112,668 113,595
Processing 131,603 151,164
Salaries 4,061,633 3,774,100
Taxes 293,346 297,184
Telephone and Utilities 186,278 179,033
Travel 125,455 103,551
Quality Review 22,459 16,545
Warehouse 41,423 33,463
----------- -----------
Total Expenses 6,884,214 6,575,862
----------- -----------
Net Income Before Other Income
and Expenses 97,236 128,325
Other Income and (Expenses)
Gain (Loss) on Disposition
of Assets (4,570) (12,779)
----------- -----------
Net Income Before Income Tax 92,666 115,546
Income Tax Expense (20,058) (22,145)
----------- -----------
Net Income 72,608 93,401
=========== ============
See notes to financial statements
14
<PAGE>
UNITED CAPITAL MORTGAGE CORPORATION
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 1999 AND 1998
<TABLE>
1999 1998
<S> <C> <C>
Cash flows from operating activities
Net Income $ 72,608 $ 93,401
------------ ------------
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 93,969 76,781
(Loss) on Disposition of Assets 0 12,779
Change in Assets & Liabilities
(Increase) decrease in Certificate of Deposit (5,844) (6,341)
(Increase) decrease in Foreclosure Escrow (3,500) 0
(Increase) decrease in Income Receivable 56,876 (84,875)
(Increase) decrease in Employee Advances (12,436) 4,601
(Increase) decrease in Prepaid Insurance 252 288
(Increase) decrease in Prepaid Lease 608 (1,938)
(Increase) decrease in Prepaid Expenses (2,274) 22,992
(Increase) decrease in Prepaid Income Taxes 0 6,416
(Increase) decrease in Mortgage Loans for Sale 1,955,110 (7,803,268)
(Increase) decrease in Deposits (2,978) (1,500)
Increase (decrease) in Accounts Payable (150,631) 200,134
Increase (decrease) in Taxes Payable 1,023 (24,292)
Increase (decrease) in Income Taxes Payable (5,261) 15,174
Increase (decrease) in Deferred Income Taxes (2,394) 555
Increase (decrease) in Deposits Payable 0 1,300
------------ ------------
Total adjustments 1,922,520 (7,581,194)
------------ ------------
Net cash provided (used) by operating activities 1,995,128 (7,487,793)
Cash flow from investing activities:
Purchase of Equipment (70,666) (146,850)
Purchase of Real Estate (125,448) 0
Proceeds from Sale of Asset 0 111,706
------------ ------------
Net cash provided (used) by investing activities (196,114) (35,144)
Cash flow from financing activities:
Net Change in Lines of Credit (1,783,457) 7,798,515
Principal Proceeds 54,759 0
Principal Payments on Notes Payable (70,377) (21,602)
------------ ------------
Net cash provided (used) by financing activities (1,799,075) 7,776,913
------------ ------------
Net increase (decrease) in cash and equivalents (61) 253,976
Cash and equivalents, beginning of year 380,394 126,417
------------ -------------
Cash and equivalents, end of year $ 380,333 $380,393
============ =============
</TABLE>
See accountant's report and notes to financial statements
15
<PAGE>
UNITED CAPITAL MORTGAGE CORPORATION
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999 AND 1998
1. Nature of Operations
United Capital Mortgage Corporation originates and sells home mortgage
loans on the secondary market.
2. Summary of significant accounting policies.
a. 1,000 shares of Class A voting $1.00 par value common stock are
authorized, issued and outstanding. 1,000,000 shares of Class B non-voting $.01
par value common stock are authorized, 430,000 shares are issued and
outstanding.
b. The accrual method of accounting is used.
c. The election was made to amortize organization expenses over a period of
60 months.
d. Equipment is recorded at cost and is depreciated on a combination of
straight line and accelerated methods.
e. Leased equipment with an initial term greater than one year is
capitalized.
f. Amounts received from builders and lenders as commitment fees and
expenses are deposited into escrow accounts. The income is recognized as loan
commitments are fulfilled and the fees are earned.
g. The income tax returns filed have not been audited by the Internal
Revenue Service.
h. For purposes of the statement of cash flows, the company considers all
highly liquid debt instruments purchased with an original maturity of three
months or less to be cash equivalents.
i. Temporary differences giving rise to the deferred tax liability consists
primarily of the excess of depreciation for tax purposes over the amount for
financial reporting purposes, and the difference between income and expenses
reported on the accrual method for financial statement purposes and the cash
basis for the tax return.
j. The company has not accrued uncompensated absences because the amount
cannot be reasonably estimated.
k. United Capital Mortgage Corporation's cash accounts are located at
various institutions. Each deposit is insured up to $100,000 by the Federal
Deposit Insurance Corporation. On June 30, 1998, cash held in one financial
institution exceeded the insurable limit by $714,598. The certificate of deposit
is not insured.
l. The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures. Accordingly,
actual results could differ from those estimates.
3. Supplemental disclosures of cash flow information:
Cash Paid During the Year For: 1999 1998
Interest 590,223 662,806
Income Taxes 22,831 -
16
<PAGE>
UNITED CAPITAL MORTGAGE CORPORATION
NOTES TO FINANCIAL STATEMENTS (Continued)
JUNE 30, 1999 AND 1998
4. Inventory of Loans for Resale
United Capital Mortgage Corporation had the following amounts in inventory:
No. of Loans in Inventory Balance of Inventory
6-30-99 6-30-98 6-30-99 6-30-98
121 137 13,364,618 15,319,728
United Capital Mortgage Corporation does not retain any loans as
investments. Placing or sale of the loans takes an average of eight days. These
loans are held at cost.
5. Servicing
On November 30, 1997, United Capital Mortgage Corporation sold all its loan
servicing rights. As of June 30, 1999 and 1998, United Capital Mortgage was not
servicing any loans.
6. Pension Plan
United Capital Mortgage Corporation provides a 401(k) pension plan for its
employees.
Employees with six months of service are eligible to participate.
Contributions are employee elective deferrals. The employer contribution is
discretionary. United Capital Mortgage did not make an employer contribution.
17
<PAGE>
UNITED CAPITAL MORTGAGE CORPORATION
NOTES TO FINANCIAL STATEMENTS (Continued)
JUNE 30, 1999 AND 1998
Note 7. Notes Payable
<TABLE>
June 30, 1999
Interest Monthly Balance Due 7/1/99 Due 7/1/00 Due 7/1/01 Due 7/1/02 Due 7/1/03
Rate Payment 6/30/99 6/30/00 6/30/01 6/30/02 6/30/03 6/30/04
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Lanier 12.00% 423 5,910 5,077 833 - - -
Lanier 12.00% 295 5,781 2,733 3,048 - - -
Lanier 12.00% 284 4,877 3,039 1,838 - - -
Chase 8.50% 988 54,759 7,477 8,150 39,132 - -
Capstead Servicing 8.13% 1,997 249,384 3,021 3,296 243,067 - -
Banco Espirito Santo E Prime + 1% 65,874 65,874 - - - -
Commercial De Lisboa
New York, N.Y.
PNC Mortgage Bank Libor + 2.25% 95,721 95,721 - - - -
LaSalle 13,238,629 13,238,629 - - - -
<30 Days Libor + 2.125%
31-61 Days Libor + 2.375%
>61 Days Libor + 2.625%
---------------------------------------------------------------------------
Total 13,720,935 13,421,571 17,165 282,200 0 0
</TABLE>
<TABLE>
June 30, 1998
Interest Monthly Balance Due 7/1/98 Due 7/1/99 Due 7/1/00 Due 7/1/01 Due 7/1/02
Rate Payment 6/30/98 6/30/99 6/30/00 6/30/01 6/30/02 6/30/03
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
National Bank of Commerce 8.00% 721 3,271 3,271 - - - -
Lanier 12.00% 423 10,221 4,723 4,665 833 - -
Lanier 12.00% 295 8,265 2,697 3,039 2,529 - -
Lanier 12.00% 284 7,479 2,903 3,149 1,427 - -
GMAC 10.00% 898 54,729 5,077 49,653 - - -
Capstead Servicing 8.75% 1,997 252,364 2,796 3,021 3,296 243,278
Banco Espirito Santo E Prime + 1% 38,030 38,030 - - - -
Commercial De Lisboa
New York, N.Y.
PNC Mortgage Bank Fed Funds + 2.5% 6,726,563 6,726,563 - - - -
Pacific Southwest Bank Prime - .125% - - - - - -
LaSalle Libor + 2.125% 8,419,088 8,419,088 - - - -
--------------------------------------------------------------------------
Total 15,520,011 15,205,120 63,526 8,085 243,278 0
</TABLE>
18
<PAGE>
(b) Pro Forma Financial Statements
BASIS OF PRESENTATION
Lahaina Acquisitions, Inc. (Lahaina) acquired the operations of United
Capital Mortgage Corpoation ("United") in a transaction effective as of October
1, 2000. The acquisition of United will be accounted for using the purchase
method of accounting.
The following unaudited pro forma financial statement is derived from
internal financial statements prepared by United for the quarter ended September
30, 1999 and 2000 and the audited financial statement of operations for the year
ended June 30, 2000 and should be read in conjunction with the other financial
statements and notes thereto included elsewhere in this Form 8-K/A.
The pro forma adjustments are based on estimates, available information and
assumptions and may be revised as additional information becomes available. The
pro forma does not purport to represent what United's results of operations
would actually have been for the year ended September 30, 2000 if it had been
acquired by Lahaina at October 1, 1999 and is not necessarily representative of
United's results of operation for any future period.
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
UNITED CAPITAL MORTGAGE CORPORATION
For the year ended September 30, 2000
Mortgage Revenues $6,342,198
------------
Operating Expenses
General and administrative 1,540,539
Interest expense 519,580
Loss on disposition of assets 99,370
Professional fees 119,455
Salaries 3,674,085
Amortization of goodwill 172,300
Occupancy expense 547,671
Depreciation 61,446
------------
Total Operating Expenses 6,734,447
------------
Net loss ($392,248)
============
PRO FORMA ADJUSTMENTS
The pro forma statement of operations includes an adjustment to include
amortization of goodwill as if the acquisition had occured at the beginning of
the year ended September 30, 2000. The purchase price allocation results in
goodwill of $1,723,000 which will be amortized using the straight line method
over 10 years. The pro forma statement includes goodwill amortization of
$172,300.
19
<PAGE>
(c) Exhibits
2.1 Stock Purchase Agreement Among Lahaina Acquisitions, Inc. and The
Shareholders of United Capital Mortgage Corporation. Dated October 1, 2000. +
23.1 Consent of Wadsworth Tucker & Parks
+ Previously filed
20
<PAGE>
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.
January 19, 2001
/s/ L. Scott Demerau
-------------------------------
L. Scott Demerau, President and
Chief Executive Officer
