UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2004 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 0-17214 ADMIRAL FINANCIAL CORP. ----------------------- State of Florida I.R.S. No. 59-2806414 7101 Southwest 67 Avenue South Miami, Florida 33143 Telephone Number: (305) 669-6117 Indicate by check mark whether the registrant, (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve (12) months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past ninety (90) days. Yes [X] No [ ] Common Stock $.001 Par Value Outstanding Shares at September 30, 2004: 10,985,046 ADMIRAL FINANCIAL CORP. AND SUBSIDIARY TABLE OF CONTENTS FORM 10-Q PART I FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS Consolidated Balance Sheets 1 Consolidated Statements of Operations 2 Consolidated Statements of Cash Flows 3 Notes to Consolidated Financial Statements 4 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL CONDITION AND RESULTS OF OPERATIONS 5 PART II OTHER INFORMATION Item 1. Legal Proceedings 8 Item 2. Changes in Securities 8 Item 3. Defaults Upon Senior Securities 8 Item 4. Submission of Matters to a Vote of Security Holders 8 Item 5. Other Information 8 Item 6. Exhibits and Reports on Form 8-K 8 PART I - FINANCIAL INFORMATION -------------------------------- ADMIRAL FINANCIAL CORP. AND SUBSIDIARY Consolidated Balance Sheets ($Dollars) September 30, 2004 June 30, 2004 ------------------ ------------- (Unaudited) (Unaudited) Assets ------ Cash $ 0 $ 0 Prepaid expenses and other assets 0 0 Net assets of Haven Federal Savings and Loan Association (notes 1 and 2) 0 0 ------------- ------------ Total assets $ 0 $ 0 ============= ============ Liabilities and Stockholders' (Deficit) Equity - ---------------------------------------------- Accrued expenses and other liabilities $ 23,890 $ 23,890 Net liabilities of Haven Federal Savings and Loan Association (notes 1 and 2) 0 0 ------------- ------------ Total liabilities 23,890 23,890 Preferred stock, $.01 par value, Authorized 6,000,000 shares, none outstanding Common stock, $.001 par value, 50,000,000 shares authorized, 10,987,000 shares issued 10,987 10,987 Treasury stock, 1,954 and 1,954 shares, at cost 0 0 Additional paid-in capital 680,710 680,710 Deficit (715,587) (715,587) ------------- ------------ Total stockholders' (deficit) equity (23,890) (23,890) ------------- ------------ Total liabilities and stockholders' (deficit) equity $ 0 $ 0 ============= ============ ======= See accompanying notes to consolidated financial statements. 1 PART I - FINANCIAL INFORMATION ------------------------------ ADMIRAL FINANCIAL CORP. AND SUBSIDIARY Consolidated Statements of Operations (Unaudited) Three Months Ended Sept 30 ------------------------------------- 2004 2003 ------------- ----------- Interest Income 0 0 Other income 0 0 ------------- ----------- Total income 0 0 Expense Employee Compensation 0 0 Other 0 0 ------------- ----------- Total expense 0 0 Loss from discontinued operation (note 2) 0 0 ------------- ----------- Net loss $ 0 0 ============= =========== Loss per share $ 0.00 $ 0.00 ============= =========== Dividend per share --- --- ============= =========== Weighted average number of shares outstanding 10,985,046 10,985,046 ============= =========== See accompanying notes to consolidated financial statements 2 PART I - FINANCIAL INFORMATION ADMIRAL FINANCIAL CORP. AND SUBSIDIARY Consolidated Statements of Cash Flows (Unaudited) Three Months Ended Sept 30 ------------------------------------- 2004 2003 ------------- ----------- Cash flows from operating activities: Net loss $ 0 $ 0 Adjustments to reconcile net loss to net cash provided by operating activities: Decrease in deficit arising from confiscation of Haven Federal after retroactive disallowance of agreed supervisory goodwill and regulatory capital 0 0 Decrease in prepaid expenses and other assets 0 0 Decrease (increase) in net assets of Haven Federal 0 0 (Decrease) in accrued expenses and other liabilities 0 0 (Decrease) Increase in net liabilities of Haven Federal 0 0 Amortization of organization expenses 0 0 ------------- ----------- Net cash provided (used) by operating activities 0 0 Cash and cash equivalents, beginning of year 0 0 ------------- ----------- Cash and cash equivalents, end of quarter $ 0 $ 0 ============= =========== See accompanying notes to consolidated financial statements 3 PART I - FINANCIAL INFORMATION ------------------------------ ADMIRAL FINANCIAL CORP. AND SUBSIDIARY Notes to Consolidated Financial Statements Note 1. In the opinion of management, the accompanying consolidated financial statements contain all the adjustments (principally consisting of normal recurring accruals and the prior confiscation of all the principal assets of the Company by the United States government) necessary to present fairly the financial statements of Admiral Financial Corp. ('Admiral') and Subsidiary. Note 2. The net assets of Admiral=s principal operating subsidiary, Haven Federal Savings and Loan Association ('Haven'), were confiscated by the United States government on March 2, 1990. Therefore, where applicable, Haven's net assets and net liabilities are presented in the balance sheets in the aggregate; and its loss is shown in the aggregate in the Statements of Operations for the three month period ended September 30, 2004 and 2003. PART I - FINANCIAL INFORMATION ------------------------------ ITEM 2 - Management's Discussion and Analysis of Consolidated Financial Condition and Results of Operations General - ------- ADMIRAL FINANCIAL CORP. ("ADMIRAL"), an inactive corporation, is currently seeking to recapitalize the Company in order to resume its prior activities with respect to the acquisition and investment in interest-earning assets and specialty real estate, as well as other new lines of business, as yet unidentified. Admiral has been a plaintiff in an unsuccessful Winstar-type action against the United States government in the United States Court of Federal Claims since 1993. This discussion may contain statements regarding future financial performance and results. The realization of outcomes consistent with these forward-looking statements is subject to numerous risks and uncertainties to the Company including, but not limited to, the availability of equity capital and financing sources, the availability of attractive acquisition opportunities once such new equity capital and financing is secured (if at all), the successful integration and profitable management of acquired businesses, improvement of operating efficiencies, the availability of working capital and financing for future acquisitions, the Company's ability to grow internally through expansion of services and customer bases without significant increases in overhead, seasonality, cyclicality, and other risk factors. Admiral is presently conducting virtually no business operation, other than its efforts to effect a merger, exchange of capital stock, asset acquisition, recapitalization, or other similar business combination (a "Recapitalization") with an operating or development stage business which Admiral considers to have significant growth potential. Admiral currently receives no cash flow. Admiral anticipates no capital infusions prior to effectuating a Recapitalization. Until such time as Admiral effectuates a Recapitalization, with the exception of certain other professional fees and costs for such a transaction, Admiral currently expects that it will incur minimal future operating costs. No officer or director of Admiral is paid any type of compensation by Admiral and presently, there are no arrangements or anticipated arrangements to pay any type of compensation to any officer or director in the near future. Admiral expects that it will meet its cash requirements until such time as a Recapitalization occurs. However, in the event Admiral depletes its present cash reserves, or in the event that Admiral management ceases to perform it's duties on a non-compensatory basis, Admiral may cease operations and a Recapitalization may not occur. There are no agreements or understandings of any kind with respect to any loans from officers or directors of Admiral on the Company's behalf. On August 5, 1993, Admiral filed a Complaint against the United States of America in the United States Court of 4 Federal Claims, arising in part out of contractual promises made to Admiral by the United States' Government, acting through the Federal Home Loan Bank Board ("FHLBB") and the Federal Savings and Loan Insurance Corporation ("FSLIC") pursuant to their statutory supervisory authority over federally insured savings and loan institutions and savings banks (hereinafter referred to a "thrifts" or "thrift institutions"), and in part out of takings of property by the FHLBB and FSLIC in the course of exercising that authority. On October 16, 2002, the Court granted the Admiral Motion for Summary Judgment in part, by finding that the United States Government liable for damages for breach of contract, pending the taking of testimony regarding a possible prior material breach by Admiral. A trial was conducted during December 2002, and testimony was taken regarding the value of the assets originally contributed by Admiral, and the Government's arguments regarding Admiral's prior material breach were heard by the Court. On August 1, 2003, the Court held in favor of the United States Government, stating that Admiral had committed a prior material breach when the Company did not meet the minimum capital requirement at March 31, 1989, despite the fact that FIRREA was enacted (on August 9, 1989) prior to the end of Admiral's "cure period" (October 16, 1989), thereby making such a cure impossible to perform. Admiral appealed, and the finding of the Court of Federal Claims was affirmed in August 2004. Admiral will not pursue this litigation any further. Liquidity and Capital Resources - ------------------------------- Admiral is currently inactive. There is no corporate liquidity, no available capital resources, and no immediately foreseeable prospects for the future improvement of Admiral's financial picture. Admiral management intends to seek a new line of business. as yet unidentified. In connection therewith, Admiral's management believes that a restructuring of Admiral may be necessary in order to raise capital for new operations, and any such restructuring may have a substantial dilutive effect upon Admiral's existing shareholders. Admiral has no ongoing commitments or obligations other than with respect to its obligations related to the acquisition and subsequent confiscation of Haven. Comparison of Three Months Ended September 30. 2004 and 2003 - ------------------------------------------------------------ Admiral was inactive, and recorded no revenues or expenses during the period. PART II - OTHER INFORMATION --------------------------- Item 1. Legal Proceedings Admiral did not become involved in any new material legal proceedings during the period covered by this report. Item 2. Changes in Securities Not applicable. Item 3. Defaults Upon Senior Securities Not applicable. Item 4. Submission of Matters to a Vote of Security Holders Not applicable. Item 5. Other Information Not applicable. Item 6. Exhibits and Reports on Form 8-k Not applicable. 5 SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused the report to be signed on its behalf by the undersigned thereunto duly authorized. ADMIRAL FINANCIAL CORP. (Registrant) Date: November 13, 2004 By: /s/ Wm. Lee Popham ------------------------------------ Wm. Lee Popham, President Date: November 13, 2004 By: /s/ Wm. Lee Popham ------------------------------------ Wm. Lee Popham, Principal Financial and Accounting Officer 6