<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: June 30, 1996
-------------
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________________ to ____________________
Commission File Number: 33-89966
--------
TREMONT ADVISERS, INC.
------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Delaware 06-1210532
- -------------------------------- ------------------
(State or other jurisdiction or (I.R.S. Employer
incorporation or organization) Identification No)
555 Theodore Fremd Avenue, Rye, New York 10580
------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(914) 921-3400
------------------------------------------------------------------
(Issuer's telephone number)
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period) that the issuer was required to file such reports, and (2) has
been subject to such filing requirements for the past 90 days.
Yes X No
------------ ------------
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDING DURING
THE PRECEDING FIVE YEARS
Check whether the issuer filed all documents and reports required to be
filed by Section 12, 13, or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.
Yes No
------------ ------------
APPLICABLE ONLY TO CORPORATE ISSUERS:
The number of shares outstanding of the Registrant's Class A Common Stock, $0.01
par value, as of the close of business on August 2, 1996 was 1,284,718, and the
number of shares outstanding of the Registrant's Class B Common Stock, $0.01 par
value, was 2,559,739 as of the same date.
<PAGE>
INDEX
Tremont Advisers, Inc.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements. (Unaudited) Page
Condensed Consolidated Balance Sheet - June 30, 1996 1
Condensed Consolidated Statements of Operations -
three and six months ended June 30, 1996 and 1995 2
Condensed Consolidated Statements of Cash Flows -
three and six months ended June 30, 1996 and 1995 3
Notes to Condensed Consolidated Financial Statements 4
Item 2. Management's Discussion and Analysis 7
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 10
Item 4. Submission of Matters to a Vote of Security Holders 10
Item 6. Exhibits and Reports on Form 8-K 10
The following exhibit is included herein;
Exhibit 27 - Financial Data Schedule
SIGNATURE 10
<PAGE>
Tremont Advisers, Inc.
Condensed Consolidated Balance Sheet
June 30
1996
-----------
(Unaudited)
Assets
Current Assets
Cash and cash equivalents $ 253,026
Marketable securities 355,563
Accounts receivable, less allowance for bad debts of $25,000 864,055
Prepaid expenses and other 59,506
----------
Total current assets 1,532,150
Investments in limited partnerships 702,039
Other investments 217,408
Fixed assets, net 225,870
Other assets 46,107
----------
Total assets $2,723,574
==========
Liabilities and shareholders' equity
Current liabilities:
Accounts payable and accrued expenses $ 934,590
Deferred revenue 74,649
Deferred income taxes payable 14,400
----------
Total current liabilities 1,023,639
Redeemable preferred stock:
Series A Preferred Stock, $1 par value, 650,000 shares
authorized, issued and outstanding - none -
Shareholders' equity:
Preferred Stock $1 par value, 350,000 shares
authorized, issued and outstanding - none -
Class A Common Stock, $0.01 par value, 5,000,000 shares
authorized, 1,284,718 shares issued and outstanding 12,847
Class B Common Stock, $0.01 par value, 5,000,000 shares
authorized, 2,559,739 shares issued and outstanding 25,597
Additional paid in capital 3,924,463
Accumulated deficit (2,393,275)
Unrealized investment gain 130,303
----------
Total shareholders' equity 1,699,935
----------
Total liabilities and shareholders' equity $2,723,574
==========
See accompanying notes.
1
<PAGE>
Tremont Advisers, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
June 30 June 30
1996 1995 1996 1995
------------------------- -------------------------
Revenues
<S> <C> <C> <C> <C>
Consulting fees $1,745,180 $1,196,730 $ 900,261 $611,330
Performance fees 144,616 31,073 68,569 -
Commissions 82,058 - 40,298 -
--------- ---------- -------- ---------
Total Revenues 1,971,854 1,227,803 1,009,128 611,330
Expenses
Compensation 1,235,416 1,099,249 622,887 539,542
General and administrative 510,089 410,780 281,064 196,708
Consulting 167,216 53,068 81,222 21,708
Depreciation and amortization 51,752 34,869 22,179 17,528
--------- ---------- -------- ---------
Total expenses 1,964,473 1,597,966 1,007,352 775,486
Equity in earnings of limited partnerships 52,232 37,783 25,006 24,430
Loss from operations of joint venture (35,000) - (25,900) -
Other income, net 102,898 11,865 100,316 5,510
--------- ---------- -------- ---------
Income (loss) before income taxes 127,511 (320,515) 101,198 (134,216)
Provision for income taxes 14,400 - 14,400 -
--------- ---------- -------- ---------
Net income (loss) $ 113,111 $ (320,515) $ 86,798 $(134,216)
========= ========== ======== =========
Net income (loss) per Common Share $ 0.03 $ (0.08) $ 0.02 $ (0.03)
========= ========== ======== =========
Weighted average Common Shares and
Common Share Equivalents outstanding 3,844,457 3,844,457 3,844,457 3,844,457
========= ========== ======== =========
</TABLE>
2
See accompanying notes.
<PAGE>
Tremont Advisers, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30
1996 1995
------------------------
Operating Activities
<S> <C> <C>
Net income (loss) $113,111 $(320,515)
Adjustments to reconcile net income (loss)
to cash provided (used) by operating activities:
Equity in earnings of limited partnerships (52,232) (37,783)
Loss from operations of joint venture 35,000 -
Depreciation and amortization 51,752 34,869
Gain on marketable securities (96,744) -
Changes in operating assets and liabilities:
Accounts receivable (145,815) (124,886)
Prepaid expenses (24,846) (16,031)
Accounts payable and accrued expenses 191,270 166
Deferred revenue 74,649 (5,003)
Income taxes payable 12,100 -
Other (4,437) 88
--------- ---------
Net cash provided (used) by operating activities 153,808 (469,095)
Investing activities
Investments in limited partnerships (85,928) -
Investment in joint venture (80,000) (60,000)
Investment in other investments (17,408) -
Purchase of marketable securities (128,516) -
Purchase of fixed assets (44,079) (4,800)
--------- ---------
Net cash used by investing activities (355,931) (64,800)
Net decrease in cash and cash equivalents (202,123) (533,895)
Cash and cash equivalents at beginning of period 455,149 901,062
--------- ---------
Cash and cash equivalents at end of period $ 253,026 $ 367,167
========= =========
</TABLE>
See accompanying notes.
3
<PAGE>
Tremont Advisers, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
NOTE A - Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and Item 310(b)
of Regulation S-B. 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) necessary for a fair presentation have been
included. Operating results for the three month and six month periods ended June
30, 1996 are not necessarily indicative of the results that may be expected for
the year ending December 31, 1996. For further information, refer to the
consolidated financial statements and footnotes thereto included in the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1995.
Net Income (Loss) Per Common Share: Per share amounts are based on the weighted
average number of shares of common stock outstanding during the period, plus the
effect of common stock equivalents in the periods where there is a dilutive
effect.
Concentrations of Credit Risk: The Company's accounts receivable are not
concentrated in any specific geographic region, but are concentrated in the
investment industry. At June 30, 1996, the Company had accounts receivable of
$241,579 and $88,000 from Ultima Investments Limited and The Chrysler Minority
Equity Trust, respectively. Although the Company's exposure to credit risk
associated with nonpayment by customers is affected by conditions within the
investment industry, no other customer exceeded 10% of the Company's net
receivables at June 30, 1996.
Income Taxes: The provision for income taxes includes federal and state taxes
currently payable and those deferred because of temporary differences between
the financial statement and the tax basis of assets and liabilities. A valuation
allowance is recorded, based on available evidence when it is more likely than
not that some portion or all of the deferred tax assets will not be realized.
NOTE B - Marketable Securities
Management determines whether marketable securities are to be classified as,
trading or available-for-sale at the time of purchase and reevaluates such
designation as of each balance sheet date. Securities classified as trading, are
securities acquired (and generally held for short periods) to make a profit from
short-term movements in market price. These securities are carried at fair
value, with unrealized holding gains and losses included in earnings.
Available-for-sale securities are carried at fair value, with the unrealized
gains and losses, net of tax, reported as a separate component of shareholders'
equity. Realized gains and losses and declines in value judged to be
other-than-temporary on available-for-sale securities are included in other
income (expense), net. The cost of securities is based on the specific
identification method.
4
<PAGE>
At June 30, 1996, marketable securities include trading and available-for-sale
securities as follows:
Trading:
Carrying Fair
Value Value
-------- --------
Common Stock $130,077 $130,077
======== ========
Trading securities consist of 22,222 shares of common stock purchased at $1.50
per share, pursuant to appropriate exemptions, which are subject to a holding
period. Simultaneous with the purchase of these shares in June 1996, Tremont
(Bermuda) Limited ("TBL") entered into an agreement with a related party, that
provides TBL the option to sell these shares to the related party at a price of
$5.85 per share. As a result of this agreement, these shares were classified as
trading securities, therefore an unrealized a gain of $96,744 is included in
other income, net. (See Note F.)
Available-for-Sale:
<TABLE>
<CAPTION>
Gross Unrealized Fair
Cost Gains Value
---- ---------------- -----
<S> <C> <C> <C>
Common Stock $95,183 $100,178 $195,361
Common Stock Purchase Warrants - 30,125 30,125
------- -------- --------
$95,183 $130,303 $225,486
======= ======== ========
</TABLE>
Available-for-sale securities consist of shares of common stock and the right to
purchase shares of common stock ("common stock purchase warrants"). At June 30,
1996, TBL owns 35,417 shares of common stock, which were purchased at $2.69 per
share, pursuant to appropriate exemptions, and are subject to a holding period
which expires in August 1996.
In addition, TBL owns common stock purchase warrants, which entitles TBL to
purchase 87,500 shares of common stock at $3.78 per share which expires October
19, 1998 and 18,750 shares of common stock of the Corporation at $3.63 per share
which expires October 30, 1998, respectively. Such warrants were acquired
pursuant to appropriate exemptions and have been valued at June 30, 1996 at
$30,125.
NOTE C - Investments in Limited Partnerships
At June 30, 1996, TPI's investment in The Broad Market Fund, L.P. was $515,486
and represented 1.0% of the fund's net assets. Summarized unaudited financial
information is as follows:
June 30, 1996
-------------
Total Assets $50,104,082
Partners' Capital 50,027,492
<TABLE>
<CAPTION>
Six Months ended June 30
1996 1995
---------------------------
<S> <C> <C>
Net investment income $ 297,658 $ 202,526
Net unrealized gain (loss) on investments 631,610 1,447,801
Net realized gain (loss) on investments 2,440,000 (43,494)
Net income 3,369,268 1,606,832
</TABLE>
5
<PAGE>
NOTE D - Other Investments
At June 30, 1996, TBL's investment in joint venture (N-Compass Financial
Services Limited) was $80,000. Summarized unaudited financial information of the
joint venture is as follows:
June 30, 1996
-------------
Total assets $262,295
Shareholders' equity (deficit) (18,338)
<TABLE>
<CAPTION>
Six Months ended June 30
1996 1995
-----------------------------
<S> <C> <C>
Revenues $ 46,995 $ 5,211
Expenses 153,532 53,849
--------- --------
Net loss $(106,537) $(48,638)
========== =========
</TABLE>
NOTE E - Accounts Payable and Accrued Expenses
Accrued expenses at June 30, 1996 consist of the following:
Professional and consulting fees $699,648
Compensation 103,000
Accounts payable 90,521
Other 40,863
-------
$934,032
Included in accrued professional and consulting fees is an amount accrued for
alleged claims against the Company. (See Note G)
NOTE F - Other Income (Expense), Net
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
June 30 June 30
1996 1995 1996 1995
----------------------- ------------------------
<S> <C> <C> <C> <C>
Interest income $ 6,154 $11,865 $ 3,572 $5,510
Investment gain (see Note B) 96,744 - 96,744 -
-------- ------- -------- ------
$102,898 $11,865 $100,316 $5,510
======== ======= ======== ======
</TABLE>
NOTE G - Contingencies
In August 1993, a law suit was initiated against the Company, TPI, TBL and Ms.
Manzke, the Chairman of the Board, in the Supreme Court of the State of New
York, County of New York, by Mr. Sass Khazzam, Capulet Management Inc. and Kazco
Mgt., Inc. alleging that there was an agreement whereby the plaintiffs would
recover 20% of the fees generated from the Global Advisors Portfolio, N.V. The
complaint against Ms. Manzke has been dismissed. With regard to the proceedings,
discovery has been completed and the Company intends to defend its position
vigorously. The Company has recorded reserves which it estimates will adequately
cover any such liability to date although the reserves would not be sufficient
to cover the entire claim in the event the plaintiff was to succeed on all
claims asserted in the action. It is management's position that the ultimate
resolution of the aforementioned claim will not have a material effect on the
Company's consolidated financial statements. In the event the plaintiffs should
prevail, the Company would be required to make payments. If the income to the
Company from fees paid by Global Advisors Portfolio, N.V. remains a major
portion of the Company's revenue, such payments could have a material impact on
the Company's financial resources.
6
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation
Tremont Advisers, Inc. (the "Company") revenues are derived from consulting and
specialized investment services provided to institutional and other clients, as
well as management fees from certain funds under management. Consulting fees are
generally a function of the amount of assets under management and the percentage
fees charged to clients. Management fees are based on a percentage of the assets
of the managed fund and are usually paid on a monthly basis. The Company also
receives asset-based fees for investments placed by its foreign subsidiary,
Tremont (Bermuda) Limited ("TBL"), in certain offshore mutual funds. The Company
provides other consulting services generally on a fixed-fee basis, whether as
annual retainer fees or single project fees. The Company's principal operating
expenses consist of its costs of personnel and independent consultants. It is
management's intention to adjust the Company's focus to launching new products
and take advantage of its growing world-wide relationships in order to expand
its operations.
Consulting fees for the Company for the six months ended June 30, 1996 increased
by $548,450, or approximately 45.8%, as compared to the six months ended June
30, 1995. At the domestic subsidiary, Tremont Partners, Inc., ("TPI") consulting
fees increased from $562,021 for the six months ended June 30, 1995 to
approximately $982,500 for the six months ended June 30, 1996. The increase at
this subsidiary is primarily due to increases in revenues from The Broad Market
Fund, L.P. ($177,641), The F.W. Thompson Fund, L.P. ($51,646), Minority Equity
Trust - Chrysler ($56,637) and The Ultima Fund, L.P. ($51,349). TBL consulting
fees increased from $634,709 for the six months ended June 30, 1995 to
approximately $762,680 for the six months ended June 30, 1996. The increase at
this subsidiary is primarily due to increases in revenues from Kingate Global
Fund Class B Shares ($111,677), Ultima Investments Limited ($36,894) and WAFRA
Global Fund ($20,220). These increases in revenues, as well as other increases
in revenues, at TBL were partially offset by declines in revenues from Global
Advisors Portfolio, N.V. ($104,193) and Global Advisors Portfolio II, N.V.
($10,721). The increases or decreases in revenue were primarily as a result of
increases or decreases in the value of the assets within the respective
investment vehicles.
Consulting fees for the Company for the three months ended June 30, 1996
increased by $288,931, or approximately 47.3%, as compared to the three months
ended June 30, 1995. TPI consulting fees increased from $308,675 for the three
months ended June 30, 1995 to approximately $524,132 for the three months ended
June 30, 1996. The increase at this subsidiary is primarily due to increases in
revenues from The Broad Market Fund, L.P. ($86,833), The F.W. Thompson Fund,
L.P. ($27,386), Minority Equity Trust - Chrysler ($20,681) and The Ultima Fund,
L.P. ($29.254). TBL consulting fees increased from $302,655 for the three months
ended June 30, 1995 to approximately $376,129 for the three months ended June
30, 1996. The increase at this subsidiary is primarily due to increases in
revenues from Kingate Global Fund Class B Shares ($53,059), Ultima Investments
Limited ($22,071) and WAFRA Global Fund ($9,900). These increases in revenues,
as well as other increases in revenues, at TBL were partially offset by declines
in revenues from Global Advisors Portfolio, N.V. ($49,263) and Global Advisors
Portfolio II, N.V. ($6,943). The increases or decreases in revenues were
primarily as a result of increases or decreases in the value of the assets
within the respective investment vehicles.
Performance fees for the six months ended June 30 1996 and 1995, respectively,
relate to Global Advisor Portfolio II, N.V. ($76,047 and $31,073, respectively)
and to One World Capital Partners Limited ($18,842 in 1996) and Zeron Capital
Management Limited ($49,727 in 1996). The performance fees are based upon the
underlying investment vehicles outperforming pre-established benchmarks.
Commissions increased by $82,058 and $40,298, respectively, for the six and
three months ended June 30, 1996 as a result of the commissions received by the
Company's wholly owned subsidiary, Tremont Securities, Inc. ("TSI"), which
became a registered broker dealer on June 28, 1995.
Management believes that, for the remainder of 1996, the Company will become
less dependent on a small number of large clients, as the Company is developing
relationships with a variety of additional entities. The Company is also
utilizing these relationships to create diversified ways to package and
distribute Tremont proprietary products. In addition, management expects
performance fee revenue to increase during periods of positive market
conditions, but management cannot predict with any accuracy whether such income
from performance fees will continue in the future due to changing market
conditions and outside factors.
7
<PAGE>
Compensation expense increased for the three and six months ended June 30, 1996
by $83,345, or 15.4%, and $136,167, or 12.4%, over the similar periods in 1995,
as a result of the Company's continued efforts to attract and retain qualified
employees. Such efforts resulted in an increase in the number of employees to 26
at June 30, 1996 from 20 at June 30, 1995. In addition to the increase in the
number of employees, compensation expense also increased due to salary increases
of certain employees that became effective January 1, 1996 and as a result of
increased health care costs due to the increase in the number of employees.
General and administrative expenses consist primarily of rent,
telecommunications, travel and entertainment, outside professional fees and
other related expenses. General and administrative expenses were $510,089 and
$410,780 for the six months ended June 30, 1996 and 1995, respectively,
representing 25.9% and 33.4% of revenues, respectively. General and
administrative expenses were $281,064 and $196,708 for the three months ended
June 30, 1996 and 1995, respectively, representing 27.8% and 32.2% of revenues,
respectively. The increases in general and administrative expenses were
primarily due to costs related to the Company's continued expansion to service
its business growth. The decreases, however, in general and administrative
expenses as a percentage of revenues for the comparable three and six month
periods were attributable to the increase in revenues from the Company's
proprietary products, expansion of its client base, and in conjunction with cost
containment measures.
Consulting expenses increased during the first and second quarters of 1996, as
compared to the similar periods of 1995 primarily as a result of the increase in
revenues from the clients that participate in revenue sharing arrangements. For
example, TSI has an arrangement for securities clearance services with a
clearing broker dealer whereby a certain percentage of the commissions earned is
shared; this agreement became effective in June 1995 when TSI became a
registered broker dealer. Also, TPI has revenue sharing arrangements with
respect to certain clients whose products were launched during 1995 subsequent
to the closing of the first quarter.
The increase in depreciation and amortization is as a result of fixed asset
purchases during 1995, after June 30, 1995. These purchases consisted of
computer equipment for the new employees hired during the year, software
purchases, as well as a computer system network for TBL. At June 30, 1996, the
Company has made commitments for capital expenditures totaling $27,000. The
Company made capital expenditures of $44,079 during the six months ended June
30, 1996.
Other income increased for the three and six months ended June 30, 1996 by
$94,800 and $91,033, respectively, over similar periods in 1995. Other income in
1996 includes an investment gain of $96,744. At June 30, 1996, TBL owns
additional shares of common stock of a public company which were purchased at
$2.69 per share ($95,183 cost), pursuant to appropriate exemptions and are
subject to a holding period, which expires in August 1996. The fair value at
June 30, 1996 was $195,361. In addition, TBL has certain warrants to purchase
common stock in this company, which entitle TBL to purchase 87,500 shares of
common stock at $3.78 per share until October 19, 1998 and 18,750 shares of
common stock at $3.63 per share until October 30, 1998, respectively. Such
warrants were acquired pursuant to appropriate exemptions and have been valued
at June 30, 1996 at $30,125.
Profitability is dependent on the ability of the Company to maintain existing
client relationships, several of which currently account for a significant
portion of the Company's revenues, to increase assets under management for its
clients, and to market its services to new accounts.
TBL is currently in the process of forming Tremont International Insurance, Ltd.
("TIIL"), a Cayman Island corporation. TIIL will offer certain deferred variable
annuities, variable life insurance and other insurance contracts to customers
who are not resident in the Cayman Islands. At June 30, 1996, TBL has invested
$12,500, which is included in other investments, and has an additional
commitment to fund $60,000 for its 24.9% share of TIIL.
Cash provided by operations was $153,808 for the six months ended June 30, 1996,
as compared to cash used in operations of $469,095 in the comparable period of
1995. The $433,626 increase in net income for the period was the primary cause
of this improvement. The net cash used for investing activities increased by
$291,131 primarily as a result of purchases of marketable securities and
increased net contributions to the Company's proprietary products.
8
<PAGE>
The Company believes it has adequate capital resources and working capital to
bring to market those products currently in the developmental stage, and that
the revenue stream from these, as well as from existing products, will be
sufficient to support future growth. The Company has no short-term or long-term
debt obligations.
In August 1993, a law suit was initiated against the Company, TPI, TBL and Ms.
Manzke, the Chairman of the Board, in the Supreme Court of the State of New
York, County of New York, by Mr. Sass Khazzam, Capulet Management Inc. and Kazco
Mgt., Inc. alleging that there was an agreement whereby the plaintiffs would
recover 20% of the fees generated from the Global Advisors Portfolio, N.V. The
complaint against Ms. Manzke has been dismissed. With regard to the proceedings,
discovery has been completed and the Company intends to defend its position
vigorously. The Company has recorded reserves which it estimates will adequately
cover any such liability to date although the reserves would not be sufficient
to cover the entire claim in the event the plaintiff was to succeed on all
claims asserted in the action. It is management's position that the ultimate
resolution of the aforementioned claim will not have a material effect on the
Company's consolidated financial statements. In the event the plaintiffs should
prevail, the Company would be required to make payments. If the income to the
Company from fees paid by Global Advisors Portfolio, N.V. remains a major
portion of the Company's revenue, such payments could have a material impact on
the Company's financial resources.
9
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
In August 1993, a law suit was initiated against the Company, TPI, TBL and Ms.
Manzke, the Chairman of the Board, in the Supreme Court of the State of New
York, County of New York, by Mr. Sass Khazzam, Capulet Management Inc. and Kazco
Mgt., Inc. alleging that there was an agreement whereby the plaintiffs would
recover 20% of the fees generated from the Global Advisors Portfolio, N.V. The
complaint against Ms. Manzke has been dismissed. With regard to the proceedings,
discovery has been completed and the Company intends to defend its position
vigorously. The Company has recorded reserves which it estimates will adequately
cover any such liability to date although the reserves would not be sufficient
to cover the entire claim in the event the plaintiff was to succeed on all
claims asserted in the action. It is management's position that the ultimate
resolution of the aforementioned claim will not have a material effect on the
Company's consolidated financial statements. In the event the plaintiffs should
prevail, the Company would be required to make payments. If the income to the
Company from fees paid by Global Advisors Portfolio, N.V. remains a major
portion of the Company's revenue, such payments could have a material impact on
the Company's financial resources.
Item 4. Submission of Matters to a Vote of Security Holders
At the Company's Annual Meeting of Stockholders held on June 13, 1996, the
stockholders elected the following to serve as directors until the next Annual
Meeting of Stockholders and until their successors are duly elected and
qualified.
For Withheld
--------- --------
Sandra L. Manzke 5,544,396 8,664
Robert I. Schulman 5,544,396 8,664
John L. Keeley, Jr. 5,544,396 8,664
Jimmy L. Thomas 5,544,356 8,704
The stockholders also voted to ratify the selection of Ernst & Young LLP to
serve as the Company's auditors for the fiscal year ending December 31, 1996.
The vote was as follows:
For Against Abstain
--- ------- -------
5,548,920 4,140 -
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The following exhibit is included herein;
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the quarter ended
June 30, 1996.
Signature
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 thereunto duly authorized.
Tremont Advisers, Inc.
Date: August 6, 1996 /s/Stephen T. Clayton
------------------
Stephen T. Clayton
Chief Financial Officer
(Duly authorized Officer and
Principal Financial and Accounting
Officer)
10
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from financial
statements for the period ended June 30, 1996 and is qualified in its entirety
by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 253,026
<SECURITIES> 355,563
<RECEIVABLES> 889,055
<ALLOWANCES> (25,000)
<INVENTORY> 0
<CURRENT-ASSETS> 1,532,150
<PP&E> 405,676
<DEPRECIATION> (179,806)
<TOTAL-ASSETS> 2,723,574
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0
0
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</TABLE>
