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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM 8-K/A NO. 2
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AMENDING ITEM NUMBER 7*
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) May 14, 1998.
EASTBROKERS INTERNATIONAL INCORPORATED
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 000-26202 52-1807562
(State or Other (Commission File Number) (I.R.S. Employer
Jurisdiction of Identification Number)
Incorporation)
15245 Shady Grove Road, Suite 340
Rockville, Maryland 20850
(Address of Principal Executive Offices, Including Zip Code)
(301) 527-1110
(Registrant's Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
* The Form 8-K/A No. 1 of the registrant dated October 30, 1998 is being
amended to revise the pro forma financial information of the registrant.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED (previously filed).
(b) PRO FORMA FINANCIAL INFORMATION.
COHIG (previously filed).
(c) PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION.
EASTBROKERS INTERNATIONAL INCORPORATED:
Pro Forma Condensed Consolidated Financial Statements as of and for
the year ended March 31, 1998 (unaudited).
(d) EXHIBITS (previously filed).
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this amendment to the report to be signed on its
behalf by the undersigned hereunto duly authorized.
EASTBROKERS INTERNATIONAL INCORPORATED
(REGISTRANT)
Date: December 8, 1998 By: /S/ KEVIN D. MCNEIL
-----------------------------------
Name: Kevin D. McNeil
Title: Vice President, Treasurer,
and Chief Financial Officer
<PAGE>
Item 7(c)
EASTBROKERS INTERNATIONAL INCORPORATED
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31, 1998
---------------------------------------------------------------------
EASTBROKERS COHIG & PRO FORMA PRO FORMA
INTERNATIONAL ASSOC., INC. ADJUSTMENT AS ADJUSTED
------------- ------------ ---------- -----------
(Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
REVENUE
Commissions $ 2,521,031 $ 12,982,805 $ - $ 15,503,836
Investment banking 807,803 2,253,289 - 3,061,092
Trading profit, net 4,175,023 2,361,466 - 6,536,489
Other 2,735,024 131,289 - 2,866,313
----------- ------------ ---- ------------
Total revenue 10,138,881 17,728,849 - 27,867,730
----------- ------------ ---- ------------
EXPENSES
Compensation and benefits 3,748,948 12,226,364 - 15,975,312
Consulting and professional fees 2,412,787 491,928 - 2,904,715
Occupancy and equipment costs 982,095 1,840,284 - 2,722,379
Communications 678,718 1,371,352 - 2,050,070
Brokerage, clearing, exchange
fees & other 1,145,567 773,460 - 1,919,027
General and administrative 6,041,354 1,884,622 - 7,925,976
----------- ------------ ---- ------------
Total expenses 15,009,469 18,588,010 - 33,597,479
----------- ------------ ---- ------------
Income (loss) from continuing
operations before provision for
income taxes and minority interest
in earnings of subsidiaries (4,870,588) (859,161) - (5,729,749)
Income tax benefit (expense) (285,830) 245,049 - (40,781)
Minority interest in earnings of
subsidiaries 208,861 - - 208,861
Income from continuing operations (4,947,557) (614,112) - (5,561,669)
Discontinued operations
Income (loss) from discontinued
operations (net of income taxes
of $0 for the year March 31,
1998) - - - -
----------- ------------ ---- ------------
NET INCOME (LOSS) $(4,947,557) $ (614,112) $ - $( 5,561,669)
=========== ============ ==== ============
Pro forma earnings per common share from
continuing operations
Primary $ (1.09) $ (1.38) $ - $ (1.42)
----------- ------------ ---- ------------
Fully diluted $ (1.09) $ (1.38) $ - $ (1.42)
----------- ------------ ---- ------------
Pro forma earnings from common shares
Primary $ (1.57) $ (1.38) $ - $ (1.54)
----------- ------------ ---- ------------
Fully diluted $ (1.57) $ (1.38) $ - $ (1.54)
----------- ------------ ---- ------------
Pro forma weighted shares outstanding
Primary 3,149,009 445,000 - 3,594,009
----------- ------------ ---- ------------
Fully diluted 3,149,009 445,000 - 3,594,009
----------- ------------ ---- ------------
</TABLE>
The accompanying notes and assumptions for the consolidated pro forma
presentation are an integral part of these statements.
<PAGE>
EASTBROKERS INTERNATIONAL INCORPORATED
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1998
(UNAUDITED)
This unaudited Pro Forma Condensed Consolidated Statement of Operations is
presented as if Eastbrokers International Incorporated (the "Company") had owned
Cohig & Associates, Inc. ("Cohig") as of April 1, 1997. This unaudited Pro Forma
Condensed Consolidated Statement of Operations should be read in conjunction
with the historical financial statements of the Company as presented in Form
10-KSB for the year ended March 31, 1998. In management's opinion, all
significant adjustments necessary to reflect the acquisition transactions have
been made.
This unaudited Pro Forma Condensed Consolidated Statement of Operations is not
necessarily indicative of what the actual results of operations of the Company
would have been assuming the acquisition transactions had been consummated as of
April 1, 1997, nor does it purport to represent the results of operations
anticipated or attainable in future periods.
Assumptions:
1. Eastbrokers International Incorporated acquired 100 percent of the
outstanding capital stock of Cohig & Associates, Inc. as of April 1, 1997
for 445,000 shares of the Company. The value assigned to this transaction
by the Board of Directors was $2,225,000 or $5.00 per share.
<PAGE>
EASTBROKERS INTERNATIONAL INCORPORATED
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
EASTBROKERS COHIG & PRO FORMA PRO FORMA
INTERNATIONAL ASSOC., INC. ADJUSTMENT AS ADJUSTED
------------- ------------ ---------- -----------
(Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents $ 7,156,702 $ 24,524 $ - $ 7,181,226
Cash and securities segregated
under regulations 986,233 - - 986,233
Securities purchased under
agreements to resell 887,170 - - 887,170
Receivables 17,924,744 868,695 - 18,793,439
Securities owned, at value 8,677,912 2,040,416 - 10,718,328
Net assets held for sale 868,960 - - 868,960
Office facilities, furniture and
equipment, at cost 1,153,439 166,842 - 1,320,281
Goodwill 2,073,774 - 613,914 2,773,138
Other assets 5,109,919 104,498 (85,450) 5,128,967
----------- ---------- -------- ------------
Total assets $44,838,853 $3,204,975 $613,914 $ 48,657,742
=========== ========== ======== ============
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Short-term borrowings 2,602,436 - - 2,602,436
Payables 12,302,135 1,242,729 - 13,544,864
Other liabilities and accrued
amounts 1,169,272 351,160 - 1,520,432
----------- ---------- -------- ------------
16,073,843 1,593,889 - 17,667,732
Deferred taxes - liability 84,382 - - 84,382
Long-term borrowings 2,020,087 - - 2,020,087
----------- ---------- -------- ------------
Total liabilities 18,178,312 1,593,889 - 19,772,201
----------- ---------- -------- ------------
Minority interest in consolidated
subsidiaries 8,776,678 - - 8,776,678
----------- ---------- -------- ------------
SHAREHOLDERS' EQUITY
Common stock 214,888 124 22,126 237,138
Paid-in capital 25,640,114 910,110 1,292,640 27,790,664
Retained earnings/(accumulated
deficit) (5,517,386) 700,852 (700,852) (4,327,040)
Note receivable - common stock (313,133) - - (313,133)
Cumulative translation adjustments (2,140,620) - - (2,140,620)
----------- ---------- -------- ------------
Total shareholders' equity 17,883,863 1,611,086 613,914 20,108,863
----------- ---------- -------- ------------
Total Liabilities and
Shareholders' Equity $44,838,853 $3,204,975 $613,914 $ 48,657,742
=========== ========== ======== ============
</TABLE>
The accompanying notes and assumptions for the consolidated pro forma
presentation are an integral part of these statements.
<PAGE>
EASTBROKERS INTERNATIONAL INCORPORATED
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED MARCH 31, 1998
(UNAUDITED)
This unaudited Pro Forma Condensed Consolidated Statement of Financial Position
is presented as if Eastbrokers International Incorporated (the "Company") had
owned Cohig & Associates, Inc. ("Cohig") as of April 1, 1997. This unaudited Pro
Forma Condensed Consolidated Statement of Operations should be read in
conjunction with the historical financial statements of the Company as presented
in Form 10-KSB for the year ended March 31, 1998. In management's opinion, all
significant adjustments necessary to reflect the acquisition transactions have
been made.
This unaudited Pro Forma Condensed Consolidated Statement of Operations is not
necessarily indicative of what the actual results of operations of the Company
would have been assuming the acquisition transactions had been consummated as of
April 1, 1997, nor does it purport to represent the results of operations
anticipated or attainable in future periods.
Assumptions:
1. Eastbrokers International Incorporated acquired 100 percent of the
outstanding capital stock of Cohig & Associates, Inc. as of April 1, 1997
for 445,000 shares of the Company. The value assigned to this transaction
by the Board of Directors was $2,225,000 or $5.00 per share.
Adjustments:
(a) Purchase of 100 percent of the outstanding capital stock of Cohig &
Associates, Inc. as of April 1, 1997 for 445,000 shares of the Company.
The value assigned to this transaction by the Board of Directors was
$2,225,000 or $5.00 per share.
Consolidation of Cohig & Associates, Inc. into Eastbrokers International
Incorporated and recording the goodwill related to the purchase
transaction at April 1, 1997. Net assets acquired were $1,611,086 leaving
goodwill acquired of $613,914.
