<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) September 9, 1994
Summit Securities, Inc.
Washington 33-36775 82-0438135
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification
incorporation) Number)
W. 929 Sprague Avenue, Spokane, WA 99204
(Address of principal executive offices)
Registrant's telephone number, including area code
(509) 838-3111
Item 1. Changes in Control of Registrant
On September 9, 1994, the controlling interest in Summit
Securities, Inc. (Summit) was acquired by National Summit Corp., a
Delaware corporation which is wholly owned by C. Paul Sandifur, Jr.
The change in control was made pursuant to a negotiated
reorganization wherein Summit redeemed all the common shares held
by its former parent company, Metropolitan Mortgage & Securities
Co., Inc. (Metropolitan) which consisted of 100% of the outstanding
common stock of Summit. Contemporaneously with this redemption,
Summit issued 10,000 shares of common stock to National Summit
Corp., a Delaware Corporation, for $100,000. In addition, various
investors in Metropolitan's common and preferred stock, including
members of Mr. Sandifur's immediate family acquired 30,224 shares
of Summit's Preferred Stock Series S-1 for $100 per share in
exchange for preferred and common shares of Metropolitan with a
value of approximately $3 million dollars.
Metropolitan Mortgage & Securities Co., Inc. the former parent
company is effectively controlled by C. Paul Sandifur, Jr., through
stock ownership and voting control. National Summit Corp. is
wholly owned by C. Paul Sandifur, Jr. through ownership of 100% of
the voting stock.
The source of funds used by Summit to redeem Metropolitan's
common shares was $3,600,000 paid in cash by Summit to
Metropolitan. The source of funds used by National Summit Corp. to
acquire the 10,000 shares of Summit common stock was $100,000 in
cash.
As part of the negotiated reorganization, the officers and
directors of Summit resigned and new officers and directors were
elected as follows:
Name Title Age
Tom Turner President/Treasurer/Director 44
John Trimble Vice President/Secretary/Director 64
Tom Turner was elected President/Treasurer of the Company on
September 9, 1994. He has been an employee of Metropolitan since
1985, as a financial analyst. From 1983-1985 Mr. Turner was
employed by Olsten Temporary Services. Prior to 1983, Mr. Turner
was self-employed, principally doing business in the real estate
industry.
John Trimble was elected Vice President/Secretary on September
9, 1994. He has been an employee of Metropolitan since 1980. From
1980-1985 he served as a loan officer for Metropolitan. From 1985-
1994 he was an officer of Metropolitan. From 1985 to the present
he has been a member of the Receivable Evaluation Committee.
SUMMIT SECURITIES, INC.
PRO FORMA FINANCIAL INFORMATION
PRO FORMA CONDENSED BALANCE SHEET (UNAUDITED)
June 30, 1994
<TABLE>
<CAPTION>
The following unaudited pro forma condensed balance sheet gives effect to the redemption
of the Company's common shares and the purchase of newly issued common and preferred shares
by National Summit Corp. and other investors as if the transactions occurred as of June 30,
1994. This unaudited pro forma condensed balance sheet should be read in conjunction with the
Company's audited financial statements and related notes thereto.
Redemption Sale of Common
of and
Common Shares Preferred Shares Pro
Historical Dr. (Cr.) Dr. (Cr.) Forma
(Unaudited)
<S> <C> <C> <C> <C>
ASSETS
Cash and Cash Equivalents $ 1,475,086 $ (411,413) (a) $ 100,000 $ 1,163,673
Real Estate Contracts and Mortgage
Notes, Net of Unrealized Discounts
and Allowance For Losses 25,808,491 25,808,491
Real Estate Held For Sale 386,100 386,100
Investment in Metropolitan
Common and Preferred Shares 3,022,425 (b) 3,022,425
Deferred Costs 664,976 664,976
Advances to Parent and Affiliated
Companies 3,143,587 (3,143,587) (a) -
Other Assets 24,446 24,446
---------- ---------- ----------- ----------
TOTAL ASSETS $ 31,502,686 $(3,555,000) $ 3,122,425 $ 31,070,111
=========== =========== =========== ===========
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES:
Investment Certificates and Accrued
Interest $ 27,590,109 $ 27,590,109
Debt Payable 80,989 80,989
Accounts Payable and Accrued Expenses 76,132 76,132
Accrued Income Taxes Due Parent 317,075 317,075
---------- ----------- ----------- -----------
TOTAL LIABILITIES 28,064,305 28,064,305
---------- ----------- ----------- -----------
STOCKHOLDER'S EQUITY:
Common Stock 200,000 200,000 (a) (100,000) (c) 100,000
Preferred Stock 7,052 (302,243) (b) 309,295
Additional Paid-In Capital 1,859,773 3,355,000 (a) (2,720,182) (b)(c) 1,224,955
Retained Earnings 1,371,556 1,371,556
---------- ---------- ----------- ----------
TOTAL STOCKHOLDER'S EQUITY 3,438,381 3,555,000 (3,122,425) 3,005,806
---------- ---------- ----------- ----------
TOTAL LIABILITIES AND STOCKHOLDER'S
EQUITY $ 31,502,686 $ 3,555,000 $(3,122,425) $ 31,070,111
=========== =========== =========== ===========
<FN>
The accompanying notes are an integral part of these pro forma financial statements.
</TABLE>
SUMMIT SECURITIES, INC.
PRO FORMA CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
The following unaudited pro forma condensed statements of income give
effect to the redemption of the Company's common shares and the purchase of
newly issued common and preferred shares by National Summit Corp. and other
investors as if the transaction occurred at the beginning of the periods
presented. These unaudited condensed statements of operations should be read in
conjunction with the Company's audited financial statements and related notes
thereto.
SUMMIT SECURITIES, INC.
PRO FORMA CONDENSED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED JUNE 30, 1994
(UNAUDITED)
<TABLE>
<CAPTION>
Pro Forma
Adjustments
Historical Dr. (Cr.) Pro Forma
<S> <C> <C> <C>
REVENUES:
Interest and Earned Discounts $ 2,312,155 $ 2,312,155
Realized Net Gains on Sales of
Investment Securities 4,252 4,252
Realized Net Gains on Sales of
Receivables 36,494 36,494
Real Estate Sales 88,000 88,000
Dividend Income from Metropolitan $ (147,400) (d) 147,400
Other Income 43,854 43,854
--------- ------------ ---------
TOTAL REVENUES 2,484,755 (147,400) 2,632,155
--------- ------------ ---------
EXPENSES:
Interest 1,837,474 1,837,474
Cost of Real Estate Sold 76,273 76,273
Provision for Losses on Real
Estate Contracts and Real
Estate Held 99,643 99,643
Operating Expenses 188,469 188,469
--------- --------- ---------
TOTAL EXPENSES 2,201,859 2,201,859
--------- --------- ---------
Income Before Income Taxes 282,896 (147,400) 430,296
Provision for Income Taxes (98,832) 15,035 (d) (113,867)
--------- --------- ---------
NET INCOME 184,064 (132,365) 316,429
Preferred Stock Dividends (732) 182,365 (e) (183,097)
--------- --------- ---------
Income to Common Shareholders $ 183,332 $ 50,000 $ 133,332
========= ========= =========
<FN>
The accompanying notes are an integral part of these pro forma financial statements.
</TABLE>
SUMMIT SECURITIES, INC.
PRO FORMA CONDENSED STATEMENTS OF INCOME
FOR THE YEAR ENDED SEPTEMBER 30, 1993
(UNAUDITED)
<TABLE>
<CAPTION>
Pro Forma
Adjustments
Historical Dr. (Cr.) Pro Forma
<S> <C> <C> <C>
REVENUES:
Interest and Earned Discounts
from Metropolitan $ 2,487,686 $ 2,487,686
Realized Net Gains on Sales of
Investment Securities 4,724 4,724
Real Estate Sales 280,500 280,500
Dividends from Metropolitan $ (204,462) (d) 204,462
Other Income 42,714 42,714
------------ ---------- ----------
TOTAL REVENUES 2,815,624 (204,462) 3,020,086
------------ ---------- ----------
EXPENSES:
Interest Expense 1,792,059 1,792,059
Cost of Real Estate Sold 298,900 298,900
Provisions for Losses on Real
Estate Assets 51,012 51,012
Operating Expenses 244,595 244,595
---------- ---------- ----------
TOTAL EXPENSES 2,386,566 2,386,566
---------- ---------- ----------
Income Before Income Taxes 429,058 (204,462) 633,520
Income Tax (Provision) (145,951) 20,855 (d) (166,806)
---------- ---------- ----------
NET INCOME 283,107 (183,607) 466,714
Preferred Stock Dividends - 251,411 (e) (251,411)
---------- ---------- ----------
Income to Common Shareholders $ 283,107 $ 67,804 $ 215,303
========== ========== ==========
<FN>
The accompanying notes are an integral part of these pro forma financial statements.
</TABLE>
SUMMIT SECURITIES, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED
BALANCE SHEET AND STATEMENTS OF INCOME
------------
NOTE 1:
The pro forma condensed balance sheet assumes the redemption of all of the
Company's outstanding common stock as of June 30, 1994 through the payment of
cash and the reduction of an outstanding receivable due from Metropolitan
aggregating $3,555,000. Additionally, National Summit Corp., a Delaware
corporation wholly owned by C. Paul Sandifur, Jr. will acquire 100% of the
newly issued common shares of the Company for $100,000. Contemporaneously,
various investors in Metropolitan common and preferred stock, including members
of Mr. Sandifur's immediate family, will acquire 30,224 of the Company's
preferred stock for $100 per share in exchange for preferred and common shares
of Metropolitan with a value of $3,022,425.
NOTE 2:
The pro forma condensed statements of income reflect the above described
transactions assuming they occurred at the beginning of the periods presented.
The statements have been adjusted to reflect dividend income that would have
been received from the Metropolitan preferred stock and dividends that would
have been paid to the Company's preferred shareholders at dividend rates that
were in effect during the periods. The income tax provisions have been
adjusted assuming that dividend income received by the Company from
Metropolitan will be taxable and subject to the 70% dividends received
deduction. At various times, Metropolitan's preferred stock dividends have
been, for tax purposes, a return of capital, which would have a different tax
treatment from that presented in these statements. The pro forma condensed
statements of operations have no adjustments to eliminate intercompany
transactions previously charged by Metropolitan for services provided to the
Company. In future periods, Metropolitan may charge an additional fee for real
estate contract acquisition services provided for the Company's benefit that
has not been previously charged. Earnings per common share data has not been
presented as all of the outstanding common shares will be wholly-owned by
National Summit Corp.
NOTE 3:
The adjustments to the pro forma condensed financial statements are as
follows:
(a) Adjustments to reflect the redemption of all Company outstanding common
shares through the payment of $411,413 and the reduction of an
outstanding receivable from Metropolitan for $3,143,587.
(b) Adjustments to reflect the issuance of 30,224 shares of Company preferred
stock in exchange for preferred and common stock of Metropolitan valued
at $2,606,252 and $416,173, respectively.
(c) Adjustments to reflect the sale of 10,000 newly issued common shares
purchased by National Summit Corp. for $100,000.
(d) Adjustments to reflect dividend income from Metropolitan preferred stock
and the related income tax effect.
(e) Adjustments to reflect preferred stock dividends on the Company's newly
issued preferred stock.
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.
Dated: September 15, 1994
SUMMIT SECURITIES, INC.
/S/ TOM TURNER
BY: TOM TURNER, President/Treasurer
