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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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) July 23, 1998
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THE AEGIS CONSUMER FUNDING GROUP, INC.
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(Exact Name of Registrant as Specified in Its Charter)
DELAWARE
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(State of Incorporation or Organization)
0-25714 22-3008867
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(Commission File No.) (I.R.S. Employer Identification No.)
200 North Cobb Parkway, Suite 428, Marietta, Georgia 30062
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(Address of Principal Executive Offices) (Zip Code)
(770) 281-7000
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(Registrant's Telephone Number, Including Area Code)
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On July 23, 1998, the stockholders of The Aegis Consumer
Funding Group, Inc. (the "Company"), at its Annual Meeting of Stockholders (the
"Meeting"), approved the sale (the "Sale") of all of the capital stock (the
"Shares") of the Company's wholly-owned subsidiary, Systems & Services
Technologies, Inc. ("SST"), to Adams, Viner & Mosler, Ltd., an Illinois limited
partnership ("AVM"), and III Associates, a Nevada general partnership ("III"),
for $7,000,000 in cash. The sale was consummated the same day. The terms of the
Sale agreement provide the Company with an option (the "Option") to repurchase
all, but not less than all, of the Shares of SST at a purchase price equal to
$7,000,000 plus a premium thereon at the rate of 5% per annum from July 23,
1998 to the date on which the Option is exercised. The Option expires on
December 31, 1998. See "Other Events -- Annual Meeting of Stockholders."
III Offshore Advisors, an affiliate of III, serves as the
investment advisor for The High Risk Opportunities Hub Fund, Ltd. (the "Hub
Fund"), which owns approximately 44% of the outstanding shares of the common
stock, par value $.01 per share, of the Company (the "Common Stock"). The Hub
Fund also owns 21 shares of Series C Preferred Stock, par value $.10 per share
(the "Series C Preferred Stock"), of the Company, which is convertible into
shares of Common Stock. Through its ability to direct investment in the Company
through the Hub Fund, as of July 23, 1998, III Offshore Advisors may be deemed a
beneficial owner of an aggregate of approximately 47.7% of the shares of Common
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Stock. Such percentage of beneficial ownership is subject to fluctuation
because the applicable conversion price of the Series C Preferred Stock is
based upon the market price of Common Stock.
The Hub Fund also owns 4,946.903 shares of Class D Redeemable
Preferred Stock, par value $.10 per share (the "Class D Redeemable Preferred
Stock"), of the Company. In addition, III Finance Ltd. ("III Finance"), another
affiliate of III, owns an additional 16,159.877 shares of Class D Redeemable
Preferred Stock of the Company. Such shares of Class D Redeemable Preferred
Stock are redeemable at the election of the holder thereof at any time. Upon
any such election, the Company has the option to pay the redemption price in
Common Stock of the Company or cash. If the shares of Class D Redeemable
Preferred Stock were redeemed at the election of the holders thereof and the
Company opted to issue Common Stock therefor, an aggregate of approximately
16,751,413 shares would be issuable.
At the Meeting, as discussed in Item 5 below, Messrs.
Warren B. Mosler and Robert Fasulo were elected directors of the
Company. Mr. Mosler is a managing general partner of AVM, a
registered broker-dealer and futures commission merchant, and a
principal of and trader for III Offshore Advisers. Mr. Fasulo is
General Counsel and Chief Compliance Officer of AVM and a
principal of III and of III Offshore Advisers.
III Finance is also a creditor of the Company with respect to
its $75 million warehouse line of credit, lease warehouse facility and retained
yield line financing. In addition, in connection with the Company's
securitization transactions,
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III and/or its affiliates have purchased in excess of $500 million of trust
certificates which are backed by the Company's finance contracts.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
(a) On August 6, 1998, the engagement of Ernst & Young LLP as
the Company's independent auditors for the fiscal year ended June 30, 1998 was
terminated by the Company. The termination of Ernst & Young LLP was approved by
the Company's Board of Directors on such date. The Company does not have an
audit or similar committee. The report of Ernst & Young LLP regarding the
Company's financial statements for the year ended June 30, 1997 stated that
substantial doubt existed as to the Company's ability to continue as a going
concern and that such statements did not include any adjustments that might be
necessary should the Company be unable to continue as a going concern. Except
as set forth in the preceding sentence, such report (and the report of Ernst &
Young LLP for the Company's prior fiscal year) did not contain any adverse
opinion or disclaimer of opinion or any qualification or modification as to
uncertainty, audit scope or accounting principles. In connection with the audits
of the Company's financial statements for each of the two fiscal years ended
June 30, 1997, and in the subsequent interim period, there were no
disagreements between the Company and Ernst & Young LLP on any matter of
accounting principles or practices, financial statement disclosure or auditing
scope or procedure which, if not resolved to the satisfaction of Ernst & Young
LLP, would have caused it to make reference to the matter in
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their report. During the Company's two most recent fiscal years
and in the subsequent interim period, no event occured which would be required
to be reported pursuant to Item 304(a)(1)(v) of Regulation S-K. Ernst & Young
LLP has been provided with a copy of this Current Report on Form 8-K and has
been requested to furnish a letter stating whether or not it agrees with the
foregoing statement. Such letter will be filed by amendment.
ITEM 5. OTHER EVENTS.
(a) Resignations. Effective July 8, 1998 and July 17,
1998 respectively, Carl Frischling and Paul Fitzpatrick resigned
as directors of the Company.
(b) Annual Meeting of Stockholders. The Meeting was held on
July 23, 1998 in Atlanta, Georgia. Three matters were submitted to a vote: (1)
the approval of the Sale, (2) the approval of an amendment to the Company's
Certificate of Incorporation to increase the number of authorized shares of
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Common Stock from 30,000,000 to 75,000,000 (the "Amendment"), and (3) the
election of Warren B. Mosler and Robert Fasulo to serve as Class III Directors
of the Company until the 2001 Annual Meeting of Stockholders of the Company.
The Sale was approved at the Meeting with 19,052,632 votes
for; 108,979 votes against; 15,183 votes abstaining; and 10,823,213 broker
non-votes. See "ITEM 2 -- Acquisition or Disposition of Assets."
The Amendment was approved at the Meeting with 22,209,005
votes for; 229,404 votes against; 57,933 votes abstaining; and 7,503,658 broker
non-votes. The Amendment was filed with the Delaware Secretary of State and
became effective on July 29, 1998.
Both Messrs. Mosler and Fasulo were nominated to serve as
directors from the floor at the Meeting and both were elected to serve as Class
III Directors of the Company by a vote of 13,135,987 for their respective
elections.
As stated in subsection (a) of this Item, Carl Frischling
resigned as a director of the Company on July 8, 1998. He concurrently withdrew
his nomination to serve as a Class III Director of the Company. In light of
this withdrawal, proxies delivered to the Company in favor of Mr. Frischling's
election or abstaining with respect thereto were counted as abstentions. On
this basis there were 11,226,525 abstentions recorded at the Meeting for Mr.
Frischling's election to serve as a Class III Director.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
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(b) Pro Forma Financial Information
1. Pro forma financial statements of the Company giving
effect to the Sale as indicated in Note 7 to the financial statements of the
Company set forth in its Quarterly Report on Form 10-Q for the period ended
March 31, 1998, and such pro forma financial statements are incorporated herein
by reference.
(c) Exhibits:
1. Stock Purchase Agreement dated as of January 28, 1998
between the Company, AVM and III (incorporated by reference from Annex A of the
Company's Proxy Statement mailed to stockholders on or about June 17, 1998).
2. Certificate of Amendment of the Certificate of
Incorporation of the Company.
3. Note 7 to the financial statements of the Company for the
period ended March 31, 1998 (incorporated by reference from the Company's
Quarterly Report on Form 10-Q for the period ended March 31, 1998).
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SIGNATURES
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 hereunto duly authorized.
THE AEGIS CONSUMER FUNDING GROUP, INC
Date: August 6, 1998 By: /S/ MATTHEW B. BURNS
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Matthew B. Burns,
Chief Executive Officer and
President
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EXHIBIT INDEX
No. Description Page
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1. Stock Purchase Agreement dated as of January 28, 1998 between the
Company, AVM and III (incorporated by reference from Annex A of the
Company's Proxy Statement mailed to stockholders on or about June 17,
1998).
2. Certificate of Amendment of the Certificate of Incorporation of the
Company.
3. Note 7 to the financial statements of the Company for the period ended
March 31, 1998 (incorporated by reference from the Company's Quarterly
Report on Form 10-Q for the period ended March 31, 1998).
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CERTIFICATE OF AMENDMENT
OF THE CERTIFICATE OF INCORPORATION OF
THE AEGIS CONSUMER FUNDING GROUP, INC.
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Pursuant to Section 242 of the General
Corporation Law of the State of Delaware
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It is hereby certified that:
1. The name of the corporation is The Aegis Consumer
Funding Group, Inc. (the "Corporation")
2. Article Fourth, Section 1 of the Certificate of
Incorporation of the Corporation is hereby amended in its entirety as follows:
"FOURTH: Capitalization.
SECTION 1. Authorized Capital. The total number of
shares of stock which the Corporation shall have authority to issue is
seventy-seven million (77,000,000) shares, of which seventy-five
million (75,000,000) shares shall be common stock ("Common Stock"),
par value $.01 per share, and two million (2,000,000) shares shall be
preferred stock ("Preferred Stock"), par value $.10 per share."
3. Said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware. Resolutions authorizing said amendment were unanimously adopted by
the directors of the Corporation and subsequently approved at the Corporation's
Annual Meeting of Stockholders on July 23, 1998 by the vote of the stockholders
of the Corporation holding the majority of the outstanding stock entitled to a
vote thereon.
IN WITNESS WHEREOF, the undersigned has executed this
Certificate on this 27 day of July, 1998.
/s/ MATTHEW B. BURNS
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Matthew B. Burns
Chief Executive Officer of
The Aegis Consumer Funding
Group, Inc.
