UNITED STATES
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):
November 13, 1998
ADVANCED FINANCIAL, INC.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware 0-19485 84-1069416
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(State of (Commission (IRS Employer
Incorporation) File Number) Identification
Number)
5425 Martindale, Shawnee, Kansas 66218
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(Address of Principal Executive Offices) (Zip Code)
(913) 441-2466
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former name or former address, if changed since last report)
Item 1. Changes in Control of Registrant
As described in Item 3 hereof, on November 13, 1998, the United States
Bankruptcy Court for the District of Kansas entered an order confirming the
First Amended Joint Plan of Reorganization dated July 29, 1998 of Advanced
Financial, Inc. and its wholly-owned subsidiary, AFI Mortgage, Corp. ("Plan").
Under the terms of the Plan, the members of the Board of Directors of
Advanced Financial, Inc. were changed upon the confirmation of the Plan on
November 13, 1998.
Prior to confirmation of the Plan, the members of the Board of Directors
of Advanced Financial, Inc. were William B. Morris, Richard Schoenfeld and
Daniel Starczewski.
The Plan designates members of an interim Board of Directors of Advanced
Financial, Inc. to take office upon confirmation of the Plan. The members of the
interim Board of Directors are Philip Holtgraves, Charles Holtgraves and William
B. Morris.
Philip Holtgraves is Chairman of the Board of First Mortgage Investment
Co. and beneficially owns a majority of its outstanding stock. Charles
Holtgraves is the son of Philip Holtgraves and is a senior vice president of
First Mortgage Investment Co. The Plan provides that, in connection with the
consummation of certain transactions contemplated by the Plan, First Mortgage
Investment Co. will receive 1,800,000 shares of new Common Stock of the
reorganized company, constituting 60% of its outstanding shares, and an option
to acquire an additional 3,000,000 shares of new Common Stock. The consummation
of such transactions is subject to a number of conditions. For a summary of the
terms of the Plan and the transactions involving First Mortgage Investment Co.
pursuant to the Plan, see Item 3 hereof.
Item 3. Bankruptcy or Receivership
(b) Order Confirming Plan of Reorganization
(1) - (2) On November 13, 1998, the United States Bankruptcy Court for the
District of Kansas ("Bankruptcy Court") entered an order (the "Confirmation
Order") confirming the First Amended Joint Plan of Reorganization dated July 29,
1998 of
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Advanced Financial, Inc. ("Advanced") and its wholly-owned subsidiary, AFI
Mortgage, Corp. (the "Plan").
(3) A summarization of the material features of the Plan is set forth in
Article III of the First Amended Disclosure Statement dated July 29, 1998 of AFI
Mortgage, Corp. and Advanced (the "Disclosure Statement"), under the caption
"Summary of the Joint Plan of Reorganization." The Plan and the Disclosure
Statement are filed as Exhibits 2.1 and 2.2 to this Form 8-K, and are
incorporated herein by reference. The Plan was amended in numerical paragraphs
9, 10, 11, 12 and 20 of the Confirmation Order. A copy of the Confirmation Order
is filed as Exhibit 99.1 to this Form 8-K and is incorporated herein by
reference.
(4) As of November 13, 1998, there were 5,836,476 shares of Common Stock
and 363,000 shares of Series B Preferred Stock of Advanced outstanding. All of
the outstanding shares of stock of Advanced will be cancelled in connection with
the reorganization of Advanced under the Plan.
A total of 7,049,999 shares of new Common Stock of Reorganized
Advanced are reserved for issuance pursuant to the Plan. Under the Plan, (i)
3,000,000 shares of new Common Stock are reserved for issuance to creditors and
to holders of stock interests pursuant to the Plan, (ii) an additional 3,000,000
shares of new Common Stock are reserved for issuance upon exercise of an option
issued to First Mortgage Investment Co. pursuant to the Plan, (iii) 900,000
shares of new Common Stock are reserved for issuance upon exercise of warrants
to be issued to certain unsecured creditors pursuant to the Plan and (iv)
149,999 shares of new Common Stock are reserved for issuance upon exercise of a
stock option to be issued to an employee of Reorganized Advanced pursuant to the
Plan.
(5) Information as to the assets and liabilities of Advanced and AFI
Mortgage, Corp. is incorporated by reference from Sections E, H and I of Article
II of the Disclosure Statement and from Article III of the Disclosure Statement.
The Disclosure Statement is filed as Exhibit 2.2 to this Form 8-K.
Certain statements contained in this Current Report on Form 8-K which are
not statements of historical fact constitute forward-looking statements within
the meaning of Section 21E of the Securities Exchange Act of 1934, as amended,
including, without limitation, any statements specifically identified as
forward-looking statements in this Form 8-K. Examples of forward-
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looking statements include, but are not limited to: (i) projections of revenues,
income or loss, earnings or loss per share, capital expenditures, the payment or
non-payment of dividends, capital structure and other financial items, (ii)
statements of plans and objectives of Advanced and its subsidiary (collectively
the "Company") or its management or Board of Directors, including plans or
objectives relating to the products or services of the Company, (iii) statements
of future economic performance, and (iv) statements of assumptions underlying
the statements described in (i), (ii) and (iii).
Forward-looking statements made by or on behalf of Advanced involve risks
and uncertainties which may cause actual results to differ materially from those
in such statements. Some important factors that could cause the actual results
to differ materially from those discussed in the forward-looking statements
include, but are not limited to: the ability of the Company to satisfy all of
the conditions necessary to successfully implement the Plan; whether FMIC
exercises its option to acquire shares of new Common Stock of Reorganized
Advanced; the ability of the Company to acquire an ongoing business on
reasonable terms; the ability of the Company to successfully integrate and
operate any acquired business; and general international and domestic economic
conditions. Other factors not identified herein could also have such an effect.
Item 7. Financial Statements and Exhibits
(c) Exhibits
2.1 First Amended Joint Plan of
Reorganization of AFI Mortgage, Corp.
and Advanced Financial, Inc. dated
July 29, 1998.
2.2 First Amended Joint Disclosure Statement
of AFI Mortgage, Corp and Advanced
Financial, Inc. dated July 29, 1998.
2.3 Acquisition Agreement dated
November 13, 1998 by and between
First Mortgage Investment Co. and
Advanced Financial, Inc.
99.1 Bankruptcy Court Order dated
November 13, 1998 Confirming
First Amended Joint Plan of
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Reorganization Under Chapter 11 of the
United States Bankruptcy Code.
99.2 Press Release of Advanced Financial,
Inc. dated October 5, 1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report as amended to be signed on its behalf by
the undersigned hereunto duly authorized.
ADVANCED FINANCIAL, INC.
(registrant)
/s/ William B. Morris
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William B. Morris
Chairman of the Board, Senior
Vice-President and Secretary
Date: November 23, 1998
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EXHIBIT INDEX
Assigned
Exhibit
Number Description of Exhibit
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2.1 First Amended Joint Plan of
Reorganization of AFI Mortgage, Corp.
and Advanced Financial, Inc. dated
July 29, 1998.
2.2 First Amended Joint Disclosure Statement
of AFI Mortgage, Corp and Advanced
Financial, Inc. dated July 29, 1998.
2.3 Acquisition Agreement dated
November 13, 1998 by and between
First Mortgage Investment Co. and
Advanced Financial, Inc.
99.1 Bankruptcy Court Order dated
November 13, 1998 Confirming
First Amended Joint Plan of
Reorganization Under Chapter 11 of the
United States Bankruptcy Code.
99.2 Press Release of Advanced Financial,
Inc. dated October 5, 1998.