SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
SCHEDULE TO
--
TENDER OFFER STATEMENT
(Pursuant to Section 13(e)(1) of the Securities Exchange Act of 1934)
AUTOLEND GROUP, INC.
(Name of Issuer; "Subject Company")
PRINOVA CAPITAL GROUP, LLC
(Name of Person(s) Filing Statement; "Offeror")
Five-year unsecured non-interest-bearing debt obligations
---------------------------------------------------------
(aggregate principal face value $196,500)
under the terms of AutoLend's Third Amended Plan of Reorganization
made effective March 5, 1999.
(Title of Class of Securities)
(none)
(CUSIP Number of Class of Securities)
Robert G. Cates, Esq.
Cates & Quintana, Attorneys
600 Central Avenue SW, Suite 300
Albuquerque, NM 87102
Tel. No.: (505) 767-9993
Fax No.: (505) 837-9427
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of Person(s) Filing Statement)
--------------------------------------------
CALCULATION OF FILING FEE
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TRANSACTION VALUATION US$9,825 (a) AMOUNT OF FILING FEE: $1.97 (b)
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(a) Calculated as the aggregate maximum purchase price to be paid for
$196,500 aggregate principal face value, per the offer.
(b) Calculated as 1/50 of 1% of the Transaction Valuation.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Rule
0-11(a)(2), and identify the filing with which the offsetting fee was previously
paid. Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing:
Amount Previously Paid:---------------------- Not Applicable
Form or Registration No.:-------------------- Not Applicable
Filing Party:-------------------------------- Not Applicable
Date Filed:---------------------------------- Not Applicable
[ ] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer. Check the appropriate boxes
below to designate any transactions to which the statement relates:
[X] third-party tender offer subject to Rule 14d-1
1
[ ] issuer tender offer subject to Rule 13e-4
[ ] going-private transaction subject to Rule 13e-3
[ ] amendment to Schedule 13D under Rule 13d-2
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Check the following box if the filing is a final amendment reporting the results
of the tender offer: [ ]
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SEC Schedule T.O Prinova Tender Offer for AutoLend Debt
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ITEM 1. SUMMARY TERM SHEET.
------------------
Reference is hereby made to the Summary Term Sheet of the Offer to Purchase,
which is attached as exhibit (a)(1)(i) and is incorporated herein by reference.
ITEM 2. SUBJECT COMPANY INFORMATION
---------------------------
The name of the issuer is AutoLend Group, Inc., a Delaware corporation,
headquartered in Albuquerque, New Mexico ("AutoLend" or the "Company"). The
Company's name was changed to "CapX Corporation" effective February 1992, and
then to "AutoLend Group, Inc." effective January 1995. The principal executive
offices of the Company are located at 600 Central Avenue SW, 3rd Floor,
Albuquerque, NM 87102. The Company's telephone number is (505) 768-1000, and the
fax number is (505) 768-1111.
The title of the securities being sought is the five-year unsecured
non-interest-bearing debt obligations of the Company originated in, and pursuant
to, the Company's Third Amended Plan of Reorganization, as made effective by
court order March 5, 1999 (the "Debt"). As of November 15, 2001, there was
$196,000 face value outstanding, excluding the portion already held by the
filing party, and excluding any imputed accounting discount thereon. The Debt is
not, and should not be confused with, the Company's 9.5% convertible
subordinated debentures, which were originated in 1990 and had been due in
September 1997.
The Securities that are the subject of this Tender Offer (i.e. the five-year
unsecured non-interest-bearing Debt obligations) have no known market and there
are no known historical prices other than the Prinova purchase described herein.
The Company's Common Shares, which are not the subject of this Tender Offer,
trade on an infrequent basis on the Over-The-Counter "Pink Sheets" and utilizes
the ticker symbol "ALEN."
(d) (e) (f) Not Applicable.
ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON
----------------------------------------
(a) and (b) The name of the filing person is Prinova Capital Group, LLC (a New
Mexico limited liability company referred to herein as the "Offeror" or
"Prinova"). Prinova Capital Group, LLC is an investment and asset management
company. The principal executive offices of the Offeror are located at 600
Central Avenue, SW, Albuquerque, NM 87102. The telephone number is (505)
881-0808 and the fax number is (505) 837-9427. Prinova Capital Group, LLC became
a majority shareholder in the Company effective October 12, 2000. Mr. Vincent J.
Garcia is the Managing Member of Prinova. Mr. Garcia became an outside Director
of the Company on October 13, 2000 and resigned that position on January 24,
2002. Mr. Garcia's business address and telephone number is the same as
Prinova's.
(c) Vincent J. Garcia:
(1) and (2) During the past 3 years, Mr. Garcia has served as Managing
Member of Prinova Capital Group, LLC.
(3) Mr. Garcia has not been the subject of any criminal proceedings.
(4) During the past five years, Mr. Garcia was not a party to any judicial or
administrative proceeding that resulted in a judgment, decree or final order
enjoining future violations of, or prohibiting activities subject to, federal or
state securities laws or finding any violations of such laws. Mr. Garcia is
presently a director of AutoLend Group, Inc., whose Board of Directors
2
unanimously authorized Mr. John D. Emery, Acting President of AutoLend Group,
Inc., to execute an Offer of Settlement with the United States Securities and
Exchange Commission on January 8, 2001 and subsequent imposition of a Cease and
Desist Order. See June 30, 2001 10-Q
(5) Mr. Garcia is a citizen of the United States.
SEC SCHEDULE T.O PRINOVA TENDER OFFER FOR AUTOLEND DEBT
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ITEM 4. TERMS OF THE TRANSACTION.
(a) (1) The Offeror is seeking tenders for up to all of the presently
outstanding and remaining five-year non-interest-bearing Debt not already held
by the Offeror, which outstanding amount could total up to a principal face
value (exclusive of any imputed accounting discount) of $196,500 US, upon the
terms and subject to the conditions set forth in the Offer to Purchase, dated
March 15, 2002 (the "Offer to Purchase"), and the related Letter of Transmittal
(which together constitute the "Offer"). A copy of each of the Offer to
Purchase and the Letter of Transmittal are attached hereto as Exhibit (a)(1)(i)
and Exhibit (a)(1)(iii), respectively, each of which is incorporated herein by
reference.
Offeror had previously filed a Tender Offer under generally the same terms
as contained herein on December 7, 2001 and as a result of that filing opened
communications with debt holders regarding terms for sale of the outstanding
five-year debt instruments. That Tender Offer period expired on December 27 with
no purchases of outstanding debt having been made. See TO-A statement of Prinova
Capital Group. Although the terms of this Tender Offer are highly similar to the
Tender Offer of December 7, 2001 there have been changes in the management of
the Company as reported by 8-K and 10-Q filings entered of record since December
27, 2001. Debt Holders should not assume that this Tender Offer is identical to
the Tender Offer of December 7, 2001 nor that the conditions of the Company are
identical and should carefully review all the terms of this statement and the
accompanying Summary Term Sheet.
(b) Not applicable.
ITEM 5. PAST CONTRACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.
---------------------------------------------------------
Reference is hereby made to Section 9 "Interest of Offeror and Related
Parties; Transactions and Arrangements Concerning the Debt and Common Stock" of
the Offer to Purchase.
(a) and (b) On October 12, 2000, Prinova acquired a majority-interest
block of the Company's Common Stock together with the largest block of the
Company's Debt for US$75,000. On October 13, 2000 Prinova installed a new
Board of Directors at the Company, including Mr. Vincent J. Garcia as a
Director. Vincent J. Garcia is the Managing Member of Prinova Capital Group,
LLC, the Offeror. Mr. Garcia resigned as a Director of AutoLend effective
January 24, 2002.
Except as set forth in the Offer to Purchase, the Offeror knows of no
contract, transaction, negotiation or agreement relating to the Offer between
the Offeror, its predecessor, any of the Offeror's executive officers or
principals, any person controlling the Offeror, or any officer or director of
any corporation ultimately in control of the Offeror, and any person with
respect to any securities of the Company.
ITEM 6. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.
--------------------------------------------------
3
Reference is hereby made to the Offer to Purchase, and more specifically,
Section 6 "Purpose of the Offer,"; Section 7 "Plans or Proposals of the
Offeror,"; Section 10 "Certain Effects of the Offer" and Section 11 "Source and
Amount of Funds" therein. The Affiliates of the Offeror regularly purchase and
sell asset and debt instruments in the ordinary course of business.
(a) and (b) On October 12, 2000, Prinova acquired a majority-interest
block of the Company's Common Stock together with the largest bock of the
Company's Debt for $75,000. The Offeror replaced the Company's Board of
Directors, who, in turn, appointed a new acting principal executive officer, and
terminated certain of the Company's prior legal
SEC Schedule T.O Prinova Tender Offer for AutoLend Debt
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counsel and executive vice president. The Offeror's present intentions
include the possibility of further substantive changes in the Company.
Such possible changes include: 1) sale of assets between the Company and
Prinova or its affiliates; 2) liquidating and closing the Company; 3)
cleaning-up and selling the Company as a "shell'. A significant factor
influencing the choice of which course to pursue is resolution of the Company's
five-year Debt obligations (which is the subject of this Tender Offer). The
Offeror's preferred course of action is the sale of assets to the Company, which
depends in large measure on favorable consolidation of the debt.
If Prinova or its affiliates sells assets to the Company, then Prinova
would likely make material changes consistent with its business purpose,
including adding new Directors to the Board, appointing additional corporate
officers, executives, management and staff; raising additional equity capital,
and any other actions that may be appropriate under such circumstances.
(c ) While no specific plan has yet been decided upon - and the following
list of possibilities is not intended to be or is represented as exhaustive and
complete - Offeror could implement or develop other plans or proposals
including:
(1) the acquisition or disposition of additional securities of the Company;
(2) an extraordinary transaction involving the Company; such as a merger,
reorganization or liquidation;
(3) a sale or transfer of a material amount of assets of the Company;
(4) additional changes in the present Board of Directors or management of the
Company; including the possibility of changing the number and/or terms of
the Directors;
(5) a material change in the present indebtedness or capitalization of the
Company;
(6) other material changes in the Company's structure or business;
(7) changes in the Company's By-Laws or instruments corresponding thereto,
and/or separate unrelated actions designed to impede the acquisition or
control of the Company by another person;
(8) Listing or de-listing a class of equity securities by a national securities
exchange;
(9) Termination or registration of a class of securities;
(10) Suspension of the Company's obligation to file reports pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934; or
(11) The creation of additional classes of securities.
(d) The filer of this Tender Offer is Prinova and not the subject company
AutoLend Group, Inc., even though Prinova has acquired a majority of the voting
stock and outstanding five year debt instruments of Autolend.
ITEM 7: SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
- -----------------------------------------------------------
4
(a) The total cost to the Offeror of purchasing US$196,500 of the Company's
Debt pursuant to the Offer will be approximately US$9,825 (based on a price of
5% of the face value), which funds will come only form Prinova's cash on hand,
or a Prinova designee other than the Company.
(b) Not applicable.
(c) The expenses incurred by the Offeror will be usual and ordinary
professional and administrative expenses required to present the Offer to the
Debt Holders. The Company has not paid and will not be responsible for any
payment of any expense incurred in the Offer.
(d) Not applicable.
ITEM 8. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
----------------------------------------------
As of February 15, 2002, Offeror beneficially holds 634,026 shares of
common stock, representing approximately 58% of the total outstanding, and also
holds $412,500 of
SEC SCHEDULE T.O PRINOVA TENDER OFFER FOR AUTOLEND DEBT
--------------------------------------------------------------------------
the Debt (out of a total of $609,000 outstanding). Mr. Vincent J. Garcia is
the Managing Member and (together with his wife) is majority interest-holder of
the Offeror. He effectively controls the 58% interest in the Company and a
$412,500 block of Debt.
Mr. Garcia's holdings in the Offeror are as a joint tenant with rights of
survivorship with his wife, Maria Patricia Garcia. Mr. Garcia was a Director of
the Company from October 2000 to January 2002. Mrs. Garcia is a part-time,
temporary employee of the Company. No other executives, directors, officers,
employees or consultants of the Offeror or its affiliates, nor any immediate
family relatives of Mr. or Mrs. Garcia, hold any additional stock or Debt in the
Company. Similarly, no executives, directors, officers, employees, or
consultants of the Company or its affiliates hold any additional stock or Debt
in the Company.
Some of the current members of the Board of Directors of AutoLend Group,
Inc. hold preferred, non-voting shares in Prinova Capital Group, Inc. Prinova
Capital Group, Inc. is a separate entity from Prinova Capital Group, LLC (the
Offeror), however, both companies have a majority of their voting shares
controlled by Vincent J. Garcia and Maria P. Garcia as joint tenants.
Prinova Capital Group, Inc. may sell assets to AutoLend Group, Inc. in
exchange for stock in the Company but neither company has made a formal proposal
of sale and neither has, as of the date of this Tender Offer, entered into a
letter of understanding to permit preliminary due diligence on any such sale of
assets. Prinova requires satisfactory consolidation or reduction of
outstanding debt obligations of AutoLend before it can consider the stock of the
Company to be of sufficient value to consider it valuable consideration for sale
of Prinova assets.
Except as set forth in the accompanying Offer to Purchase, neither the
Offeror nor, to the best of the Offeror's knowledge, any of its Directors or
executive officers, is a party to any contract, arrangement, understanding or
relationship with any other person relating to the Offer with respect to any
securities of the Company; nor has any Director or officer of the Company, in
those capacities, effected any transaction in the Company's shares or the Debt
during the sixty business day period prior to the date hereof.
ITEM 9. PERSONS/ASSETS RETAINED, EMPLOYED, COMPENSATED OR USED.
------------------------------------------------------
No persons have been employed, retained or are to be compensated by or on
behalf of the Offeror or the Company to make solicitations or recommendations in
connection with the Offer.
ITEM 10. FINANCIAL INFORMATION.
---------------------
5
(a) and (b) Reference is hereby made to the Financial Statements of
AutoLend Group, Inc., included as part of the Offer to Purchase as Exhibit
(a)(1)(i).
ITEM 11. ADDITIONAL INFORMATION.
----------------------
(a) As of March 15, 2002, Offeror beneficially holds 634,026 shares of
common stock, representing approximately 58% of the total outstanding, and also
holds $412,500 of the Debt (out of a total of $609,000 outstanding). Mr.
Vincent J. Garcia is the Managing Member and (together with his wife) is
majority interest holder of the Offeror. He effectively controls the 58%
interest in the Company and the $412,500 block of Debt.
Mr. Garcia's holdings in the Offeror are as a joint tenant with rights of
survivorship with his wife, Maria Patricia Garcia. Mr. Garcia was a Director of
the Company from October 2000 to January 2002. Mrs. Garcia is a part-time,
temporary employee of the Company. No other executives, directors, officers,
employees or consultants of the Offeror or its affiliates, nor any immediate
family relatives of Mr. or Mrs. Garcia, hold any additional stock or Debt in the
Company. Similarly, no executives, directors, officers, employees, or
consultants of the Company or its affiliates hold any additional stock or Debt
in the Company.
SEC Schedule T.O Prinova Tender Offer for AutoLend Debt
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No material agreements, arrangement, understanding, or relationship between
the Offeror and any of its executive officers, directors, controlling persons,
or subsidiaries exists or has been made that affects or touches on this Tender
Offer.
Offeror knows of no pending legal or regulatory proceeding relating to this
Tender Offer. The Board of Directors of AutoLend Group, Inc., of which Mr.
Vincent J. Garcia was at the time a member, unanimously authorized Mr. John D.
Emery, Acting President of AutoLend Group, Inc. to execute an Offer of
Settlement with the United States Securities and Exchange Commission on January
8, 2001, which led to the imposition of a Cease and Desist Order. See AutoLend
Group, Inc. June 30, 2001 10Q.
Offeror previously filed on December 6, 2001 a Tender Offer containing the
same terms as proposed in this Offer and expiring December 26, 2001. No holders
of debt instruments accepted, or requested an extension of time to accept, the
terms of that prior Tender Offer. The filing of the December 6, 2001 Tender
Offer did result in the commencement of negotiations with holders of debt
instruments. See TO-A filed January 24 , 2002. As a result, this Tender Offer
contains terms Offeror is confident will appeal to the majority of current
holders of outstanding five-year debentures.
(b) The Offer to Purchase is referenced and incorporated by this
statement, including all exhibits thereto.
ITEM 12. EXHIBITS.
--------
(a)(1)(i) Offer to Purchase (including Financial Statements).
(a)(1)(ii) Form of Letters to Debt holders who have requested Offer to
Purchase.
(a)(1)(iii) Form of Letter of Transmittal (including Guidelines for
Certification of Taxpayer ID Number).
(a)(2) Not applicable.
(a)(3) Not applicable.
(a)(4) Not applicable.
(a)(5)(i) Affirmation of Debt, executed by the Company October 2, 2000.
(a)(5)(ii) Excerpts from the Company's Third Amended Plan of Reorganization
and Disclosure Statement. Filed July 28, 1998 and August 18 1998 and made
effective by court order March 5, 1999.
6
(a)(5)(iii) Lease revision proposal and counter-proposal, dated November 13,
2000 and January 19, 2001.
(b) Not applicable.
(c) Not applicable.
(d)(1) Schedule 13D - filed by Prinova LLC on October 31, 2000.
(d)(2) Form 8-K -- filed by the Company October 19, 2000.
(e), (f), (g), (h) Not applicable.
SIGNATURE
---------
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
PRINOVA CAPITAL GROUP, LLC
/s/ Vincent J. Garcia
-------------------------
Vincent J. Garcia,
Managing Member
March 15, 2002
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7
OFFER TO PURCHASE Made by Prinova Capital Group, LLC For AutoLend Debt
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SUMMARY TERM SHEET
------------------
OFFER TO PURCHASE FOR CASH:
FIVE-YEAR UNSECURED NON-INTEREST-BEARING DEBT OBLIGATIONS
OF AUTOLEND GROUP, INC.
AS OFFERED BY PRINOVA CAPITAL GROUP, LLC.
THIS SUMMARY HIGHLIGHTS CERTAIN INFORMATION IN THIS OFFER TO PURCHASE. TO
UNDERSTAND THE OFFER FULLY AND FOR A MORE COMPLETE DESCRIPTION OF THE TERMS OF
THE OFFER, YOU SHOULD READ CAREFULLY THIS ENTIRE OFFER TO PURHCASE AND THE
RELATED LETTER OF TRANSMITTAL. WE HAVE INCLUDED PAGE REFERENCES PARENTHETICALLY
TO DIRECT YOU TO A MORE COMPLETE DESCRIPTION OF THE TOPICS IN THIS SUMMARY.
WHAT SECURITIES IS PRINOVA CAPITAL GROUP, LLC OFFERING TO PURCHASE? (Page 12)
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Prinova Capital Group, LLC ("Prinova" or the "Offeror") is offering to
purchase all of the presently outstanding five-year unsecured
non-interest-bearing debt obligations (the "Debt") incurred by AutoLend Group,
Inc. (the "Company"), and which was issued pursuant to the Company's Third
Amended Plan of Reorganization, which was made effective March 5, 1999. The
Debt is not, and should not be confused with, the Company's 9.5% convertible
subordinated debentures, which were originated in 1990 and had been due in
September 1997.
The Offeror currently holds a majority of the Debt, and the remaining
portion outstanding totals $196,500 US in principal face value (exclusive of any
interest or discount). The Offer is contingent upon the tender of all debt held
on a per individual Debt holder basis. The Offer is not contingent upon all
Debt holders agreeing to tender.
HOW MUCH AND IN WHAT FORM WILL THE OFFEROR PAY ME FOR MY DEBT? (Page 12)
The Offeror will pay cash for your Debt tendered in proper form. The
purchase price will equal five percent (5%) of the principal face value of the
Debt.
WILL I HAVE TO PAY ANY FEES OR COMMISSIONS?
No.
DOES THE OFFEROR HAVE THE FINANCIAL RESOURCES TO PAY ME FOR MY SHARES? (Page 15)
Yes. If the Offeror purchases all $196,500 face value of the Debt, its cost
will be $9,822.50 US. (Exclusive of fees and expenses incurred in connection
with the offer.)
WHEN DOES THE OFFER EXPIRE? CAN THE OFFEROR EXTEND THE OFFER AND, IF SO, HOW
WILL I BE NOTIFIED? (Page 19)
The offer expires on the 15th day of April , 2002 at 12:00 midnight,
Mountain Standard Time, unless the Offeror extends the Offer. The Offeror may
extend the offer period prior to the actual expiration of time at any period, at
its sole discretion. A request to extend time must be received by Offeror prior
to 12:00 midnight on the 15th day of April, 2002.
If the offer period is extended, the Offeror will make a public
announcement of the extension no later than 9:00 a.m. on the next business day
following the previously scheduled expiration date.
8
OFFER TO PURCHASE Made by Prinova Capital Group, LLC For AutoLend Debt
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HOW DO I TENDER MY DEBT? (Page 12)
If you decide to tender you debt:
- You may contact Robert G. Cates, Esq. and request that your debt be
tendered to the Trust Account of Cates & Quintana, Attorneys (email:
quincates@aol.com)
-----------------
- If you do tender, you must:
a) complete and sign in proper form the Letter of Transmittal
accompanying this Offer to Purchase; and
b) send the Letter of Transmittal, and any other required documents
to Robert G. Cates, Esq., Cates & Quintana, Attorneys, postmarked
before the expiration date. Please send a confirming email to
quincates@aol.com or directly contact Attorney Robert G. Cates at
-----------------
telephone number 505-767-9993; facsimile number 505-837-9427.
CAN I WITHDRAW TENDERED DEBT? (Page 13)
Once tendered, you may not withdraw your debt unless the Offeror has not
accepted your tendered Debt for payment by 12:01 a.m. on April 15, 2002. In the
case of such non-acceptance, you may withdraw your offer at any time thereafter.
IN SUCH A CASE, HOW WOULD I WITHDRAW TENDERED DEBT? (Page 13)
Contact Robert G. Cates, Esq. and submit written notice to the law firm of
Cates & Quintana, Attorneys: Address: 600 Central Avenue SW Suite 300,
Albuquerque, NM 87102 or facsimile to number 505-837-9427. Please send a
confirming email with any facsimile transmission to quincates@aol.com.
-----------------
WILL THERE BE ANY TAX CONSEQUENCES TO TENDERING MY DEBT? (Page 19)
The Offeror is not able to comment on the tax consequences of tendering
debt or to provide tax advice under the laws of any jurisdiction. Please
consult your tax advisor as to any possible tax consequences for you.
WHAT IS THE PURPOSE OF THE OFFER? (Page 13)
The offer seeks to consolidate Debt of the Company that is held by persons
or entities other than the Offeror. If the Debt is consolidated, affiliates of
the Offeror may decide to merge into the Company or sell assets to the Company.
The Company may be deemed financially unsatisfactory for such an asset sale, and
the consolidation of Debt could materially change this view. The Offeror,
however, makes no assurances or representations that an asset sale will occur,
or if it were to occur, that it would be worthwhile, or that certain results of
the Tender Offer operate as a condition precedent for an asset sale.
WHAT ARE THE MOST SIGNIFICANT CONDITIONS TO THE OFFER? (Page 13)
Prinova foresees no circumstances that condition the Tender Offer, and it
hopes the debt holders tender. But the Offeror has the right to terminate the
Tender Offer, amend its terms, reject the Debt tendered for payment, and decline
to proceed with the Tender Offer, purchase or payment under circumstances that
Prinova believes, in the exercise of its sound business judgment, results in
negative consequences to Prinova. In particular, Prinova requires that any Debt
Holder tendering debt also advise of any pledge, liens or other encumbrances on
the Debt instruments.
IF I DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY DEBT? (Page 15)
If the holders do not tender their debt, affiliates of Prinova may decide
not to affect an asset sale, in which case, given the current financial
situation of the Company, the probability of repayment is difficult to
9
OFFER TO PURCHASE Made by Prinova Capital Group, LLC For AutoLend Debt
- --------------------------------------------------------------------------------
assess. If affiliates of Prinova do affect an asset sale with the Company, no
guarantee or assurance is offered that such action will be successful enough to
permit repayment of the Debt.
IS THERE A DIFFERENCE BETWEEN THE FACE VALUE OF THE DEBT AND THE AMOUNT ON THE
COMPANY'S PUBLISHED FINANCIAL STATEMENTS?
Yes. The aggregate amount shown on the Company's Balance Sheet is less
than the aggregate face value of the Debt. The difference is an imputed
discount required by the Company's auditors in order for the Company's records
to conform to Generally Accepted Accounting Principles. This imputed discount
has no effect on the actual amount legally owed to holders of the Debt, and has
no effect on this Offer.
WHO DO I CONTACT IF I HAVE QUESTIONS ABOUT THE TENDER OFFER?
For additional information or assistance, you may contact Robert G. Cates,
Esq. at (505) 767-9993, or by facsimile at (505) 837-9427, or by email at
quincates@aol.com, or by mail to Cates & Quintana, Attorneys, 600 Central Avenue
-----------
SW, Suite 300, Albuquerque, NM 87102.
10
OFFER TO PURCHASE Made by Prinova Capital Group, LLC For AutoLend Debt
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TABLE OF CONTENTS
-----------------
Summary Term Sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Risk Factors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
The Offer to Purchase
Section 1. Price; Amount of Debt. . . . . . . . . . . . . . . . . . . 12
Section 2. Procedure for Tendering Debt . . . . . . . . . . . . . . . 12
Section 3. Withdrawal Rights. . . . . . . . . . . . . . . . . . . . . 13
Section 4. Payment for Debt . . . . . . . . . . . . . . . . . . . . . 13
Section 5. Certain Conditions of the Offer. . . . . . . . . . . . . . 13
Section 6. Purpose of the Offer . . . . . . . . . . . . . . . . . . . 13
Section 7. Plans or Proposals of the Offeror. . . . . . . . . . . . . 14
Section 8. Price Range of Debt; Interest. . . . . . . . . . . . . . . 15
Section 9. Interest of Offeror and Related Parties; Transactions and
Arrangements Concerning the Debt and Common Stock. . . . 15
Section 10. Certain Effects of the Offer. . . . . . . . . . . . . . . . 15
Section 11. Source and Amount of Funds. . . . . . . . . . . . . . . . . 15
Section 12. Certain Information about the Company . . . . . . . . . . . 15
Section 13. Certain Information about the Offeror . . . . . . . . . . . 18
Section 14. Additional Information. . . . . . . . . . . . . . . . . . . 19
Section 15. Certain Federal Income Tax Consequences . . . . . . . . . . 19
Section 16. Extension of Tender Period, Termination; Amendments . . . . 19
Section 17. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . 19
Attachments
Latest Company Financial Statements - as of
Audited Company Financial Statements as of
Form 8-K - filed by the Company October 19, 2000.
Schedule 13D - filed October 31, 2000.
Affirmation of Debt - executed by the Company October 2, 2000.
RISK FACTORS
------------
A. Debt Holders Tendering All of Their Debt Are Subject to Certain Risks:
----------------------------------------------------------------------
Purchase Price May Be Less Than Fair Market Value and/or Liquidation
Value.
The Debt is not traded on any known or recognized exchange or
trading market. A readily identifiable, liquid market for the Debt
does not exist and is not likely to exist in the near future.
Accordingly, it is difficult to establish a fair market value of the
Debt. The Offeror did purchase a block of $412,500 in face value of
the Debt on October 12, 2000, along with 63,028 shares of the
Company's common stock (representing approximately 58% of the
Company's shares) for a combined price of $75,000 US.
If affiliates of Prinova sell assets to the Company, a possible course
of action, the Company would seek to honor any outstanding debt under
present or re-negotiated terms. If the Company liquidates, another
possible course of action, Debt holders could receive a distribution
from the liquidation, although there is no assurance that any funds
would be available after satisfaction of all other obligations of the
Company. The Offeror has not obtained an opinion from an independent
third party regarding the Purchase Price, nor an appraisal of the
Company's Debt in establishing the Purchase Price. The principal risk
to holders of Debt who tender is that the Company under certain
circumstances could succeed as presently configured and pay off the
Debt.
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OFFER TO PURCHASE Made by Prinova Capital Group, LLC For AutoLend Debt
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B. Debt Holders Who Do Not Tender Their Debt Are Subject To Certain
Risks:
The Company May Liquidate.
While Debt holders could receive a distribution if the Company
liquidates, they also could receive little or nothing. The Company
presently (1) has a negative net equity (i.e., a deficit), (2) no
significant source of revenue or income, (3) is rapidly expending its
remaining small amount of cash, (4) has warned in its Form 10-K and
10-Q filings that it does not believe that it will have sufficient
cash to last beyond the present fiscal year (ending March 31, 2002),
and (5) has a "going-concern" opinion issued by its auditors.
The Company has stated in its 10-K and 10-Q filings that it
believes that its landlord and obligations under its lease would have
precedence over Debt holders in any liquidation distribution, such
obligations currently total $323,600. The Company has not yet made any
repayment on the Debt, and missed the first such anticipated payment
in March 2000. The Company has made no indication in its filings, or
otherwise to the knowledge of the Offeror, of when, if ever, it might
make annual repayments. The principal risk to holders of Debt who do
not tender is that the Company will fail and pay out nothing.
THE OFFER TO PURCHASE
---------------------
1. PRICE; AMOUNT OF DEBT. The Offeror will, upon the terms and subject to the
conditions of the Offer, accept for purchase $196,500 or such lesser amount
of the Company's five-year unsecured non-interest-bearing debt that is
properly tendered (and not withdrawn in accordance with Section 3) prior to
12:00 a.m. midnight, Mountain Daylight Savings Time, on April 15, 2002
("Initial Expiration date"). The Debt was originally issued under the terms
of AutoLend Group Inc.'s Third Amended Plan of Reorganization, which was
made effective March 5, 1999. The total aggregate Debt outstanding is
$609,000, of which the Offeror already holds $412,500; this Offer is for
the balance not presently held by the Offeror. The Debt is not, and should
not be confused with the Company's 9.5% convertible subordinated
debentures, which were originated in 1990 and had been due in September,
1997.
The Offeror reserves the right to extend the Offer to the later of the
Initial Expiration Date or the latest time and date to which the Offer is
extended (hereafter called the "Expiration Date") See Section 16.
The Purchase Price o the Debt will be 5% of the face value of the Debt
tendered. The Offeror will not pay interest on the Purchase Price.
The Offer is being made to all holders of the Debt and is not conditioned
upon any minimum amount of Debt being tendered. The Offer is conditioned,
however, on the requirement that any individual Debt Holder must tender all
Debt held by that Debt holder. The Offeror will, upon the terms of this
Offer, purchase all the Debt held by a given Debt Holder.
2. PROCEDURE FOR TENDERING DEBT.
A. Proper tender of Debt. Delivery of originals of all debt instruments,
powers of attorney And other documents evidencing title or claim to
AutoLend Group, Inc.'s five-year non-interest-bearing debt
certificates or instruments issued as a result of the Company's March
5, 1999, Third Amended Plan of Reorganization. Each tender must
include any statement or documentation demonstrating any claim, grant,
pledge or lien by third parties to the tendered Debt instruments.
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OFFER TO PURCHASE Made by Prinova Capital Group, LLC For AutoLend Debt
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B. Signature guarantees and method of delivery. Delivery of original of
all debt instruments that Offeror has agreed to purchase by certified
mail, or courier, return receipt requested, to the offices of Cates &
Quintana, Attorneys; Robert G. Cates, Esq. as agent for Prinova
Capital Group, LLC.
C. Determination of Validity. All questions as to validity, form,
eligibility (including time of receipt) and acceptance of tenders will
be determined by the Offeror, in the sole discretion of its principal
officers, whose determination shall be final and binding. The Offeror
reserves the right to reject tenders determined by Offeror not to be
in the format described for Proper tender of Debt or in which the
documents provided fail to demonstrate good and unemcumbered title to
the Debt instruments sought by this Offer. The Offeror reserves the
right to waive conditions of the Offer, or defects or irregularities
in a tender at its sole discretion. Unless waived, defects in the
documentation required to properly tender Debt must be cured by the
Expiration Date or during any period of extension agreed to by the
Offeror. No person shall be liable for a failure to give notice to a
Debt holder of a defect in the documentation supporting tendered Debt.
3. WITHDRAWAL RIGHTS.
Tenders of Debt made pursuant to the Offer will be irrevocable, save in the
event that tendered Debt not accepted by Offeror by 12:00 a.m. midnight on
April 15, 2002, may be withdrawn by the tendering party at that party's
option.
4. PAYMENT FOR DEBT.
For purposes of the Offer, the Offeror will be deemed to have accepted for
payment (and thereby purchased) tendered Debt when Offeror instructs Robert
G. Cates, Esq. to accept the Debt for payment under the terms of the Offer.
Offeror undertakes to pay promptly after the Expiration Date accepted Debt
from funds held in trust by Robert G. Cates Esq. and Cates & Quintana,
Attorneys at Law.
5. CERTAIN CONDITIONS OF THE OFFER.
Offeror is not required to accept for payment, or to purchase or pay for
any Debt tendered. Offeror may terminate, or amend the Offer, or may
postpone the acceptance for payment of, the purchase of, and payment for
Debt tendered, if at any time at or before the Expiration Date, events
occur that in the judgment of the Offeror make it inadvisable to proceed
with purchase.
If the Offeror decides to amend the Offer or to postpone the acceptance for
payment of Debt tendered, it will, to the extent necessary, extend the
period of time during which the Offer is open. See Section 15.
6. PURPOSE OF THE OFFER.
In addition to the Debt, the Offeror holds a majority of the Company's
common stock. The Offer seeks to consolidate Debt of the Company presently
held by entities other than the Offeror. If the offer results in
consolidation of the Debt, affiliates of Offeror intend to consider sales
of assets from themselves to the Company. The Offeror makes no
representations that such an asset sale will occur, or if it were to occur,
that it would be worthwhile.
NEITHER THE OFFEROR NOR THE COMPANY NOR THE COMPANY'S BOARD OF DIRECTORS
MAKE ANY RECOMMENDATIONS TO ANY DEBT HOLDER AS TO WHETHER TO TENDER OR
REFRAIN FROM THE TENDERING OF DEBT HOLDER'S DEBT, AND HAS NOT AUTHORIZED
ANY PERSON TO MAKE ANY SUCH RECOMMENDATION. DEBT HOLDERS ARE URGED TO
EVALUATE CAREFULLY ALL INFORMATION IN THE OFFER, CONSULT THEIR OWN
INVESTMENT AND TAX ADVISORS, AND MAKE THEIR OWN DECISIONS WHETHER TO TENDER
DEBT.
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OFFER TO PURCHASE Made by Prinova Capital Group, LLC For AutoLend Debt
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7. PLANS OR PROPOSALS OF THE OFFEROR.
Affiliates of the Offeror are in the business of purchasing and selling
assets and debt instruments in the ordinary course of their business. On
October 12, 2000, the Offeror acquired a majority interest block of the
Company's Common Stock together with the largest block of the Company's
Debt. The $75,000 US purchase was made as an investment.
The Offeror's present intentions include the possibility of changes,
following assessment of the internal Condition of the Company. Such
possible changes include selling assets of affiliates of Prinova to the
Company; liquidating and closing the Company; or cleaning up and selling
the Company as a public "shell". Significant factors influencing the choice
of which course to pursue include: consolidation of the Company's
outstanding five-year debt obligations and subsequent valuation of the
Company stock as a reasonable basis for exchange with the assets of
Prinova's affiliates or other company.
Some other potential changes the Offeror may consider include disposing of
certain assets, pursuing potential legal claims, and re-negotiating the
Company's office lease. If the asset sale is pursued, the Offeror would
likely make additional changes in Company operations. Such changes could
include new management, appointment of new Directors, raising of additional
equity capital and other sources of debt or equity financing for future
business activities. If the possible asset sale is affected and the Company
subsequently restructured, the value of the Company and its shares could
increase, but there is no guarantee, assurance, or representation that this
will happen.
The Offeror intends to review its equity and debt interests in the
Company on a continuing basis. Depending on the Offeror's evaluation of the
Company's business and prospects, the Offeror reserves the right to acquire
additional shares of Common Stock, to dispose of shares of Common Stock or
to formulate other investment strategies regarding its holdings in the
Company.
While no specific plan has yet been decided upon, the Offeror and its
affiliates have or are studying, among other possibilities the following:
1) The acquisition or disposition of additional securities in the
Company;
2) An extraordinary corporate transaction involving the Company, such as
a merger, reorganization or liquidation;
3) A sale or transfer of a material amount of the Company's assets;
4) Additional changes in the present Board of Directors or management of
the Company, including changing the number or terms of Directors;
5) A material change in the present indebtedness or capitalization of the
Company;
6) Other material changes to the Company's organization structure or area
of business activity;
7) Changes to the Company's By-Laws and\or separate policies to impede
acquisition or control of the Company by another person;
8) Listing or De-listing a class of equities from a national securities
exchange.
9) Registering a class of equities to become eligible for registration
under the Securities Exchange Act of 1934;
10) The suspension of the Company's obligations to file reports pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934;
11) The creation of additional classes of securities.
The Company at present pays no dividends and has paid none for the past
several years. Offeror foresees no material change in the present dividend
rate or policy, or any changes in the Company's By-Laws that would impede
the acquisition of control of the Company by any person.
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OFFER TO PURCHASE Made by Prinova Capital Group, LLC For AutoLend Debt
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8. PRICE RANGE OF DEBT; INTEREST.
The Offeror is unaware of any previous transactions involving the sale or
purchase of the Debt, other than the Offeror's own acquisition of the Debt.
In the singular case of the Offeror's acquisition of its present holding of
the Debt, the Debt was acquired in a bundled deal that also included the
acquisition by the Offeror of a controlling block of the Company's stock.
The combined price for 634,026 shares of common stock (representing
approximately 58% of the total outstanding) plus $412,500 in face value of
the Debt was $75,000 US in cash as paid by the Offeror on October 12, 2000.
There is no interest or dividends associated with the Debt.
9. INTEREST OF OFFEROR AND RELATED PARTIES; TRANSACTION AND ARRANGEMENTS
CONCERNING THE DEBT AND COMMON STOCK.
As of March 8, 2002, the Offeror beneficially holds for 634,026 shares of
common stock (representing approximately 58% of the total outstanding) plus
$412,500 in face value of the Debt, out of $609,000 outstanding. Mr.
Vincent J. Garcia is the Managing Member and, together with his wife,
majority interest holder of the Offeror. Mr. Garcia effectively controls
58% of the Company. Mr. Garcia's holdings in the Offeror are as a joint
tenant with rights of survivorship with his wife, Maria Patricia Garcia.
Mr. Garcia was a Director of the Company from October, 2000 to January,
2002. No other executives, directors, officers, employees or consultants of
the Offeror or its affiliates, nor any immediate relatives of Mr. or Mrs.
Garcia, hold any additional stock or Debt in the Company. Similarly, no
such persons of the Company hold membership units or other investments in
Prinova. Members of the Board of Directors of the Company do hold preferred
non-voting stock in Prinova Capital Group, Inc., an affiliate of the
Offeror, Prinova Capital Group, LLC, and one of the companies from which
assets could be negotiated for purchase by the Company.
10. CERTAIN EFFECTS OF THE OFFER.
The Offeror in no way conditions acquiring Debt upon considering the sale
of assets discussed herein, but Prinova views acquisition of outstanding
debt a significant factor in being able to justify an asset sale,
particularly since the Company will likely be able to purchase assets only
for value of its stock. If another course of action is chosen, such as
liquidation, holders of Debt may have increased risk tht their holdings
will result in little or no return after payment of Company debts. See
"Five-year Debt" in Section 12. The risks may change, however, in the face
of an asset sale and Debt holders who do not tender pursuant to this Offer
could possibly receive more for their Debt than is offered here. Debt
holders who tender under this offer are, of course, free to retain any
stock that they may hold, and if an asset sale occurs, and the resulting
new business activity is successful, such stock could improve in value.
Successful consolidation of the outstanding Debt is a key factor in
Prinova's analysis regarding whether to sell assets for Company stock. See
also Risk Factors section of this Offer to Purchase.
11. SOURCE AND AMOUNT OF FUNDS.
The total cost to the Offeror of purchasing $196,500 of the Company's Debt
pursuant to the Offer will be approximately $9,825.00 US (based on a price
of 5% of face value) in addition to professional and administrative
expenses, which funds will come only from Prinova's cash on hand.
12. CERTAIN INFORMATION ABOUT THE COMPANY.
The information in this Section, except as specifically noted, is taken
from publicly available information, as filed by the Company with the
Securities Exchange Commission ("SEC"). AutoLend Group, Inc.'s offices are
located at 600 Central Avenue, SW Suite 300, Albuquerque, New Mexico 87102.
Phone (505) 768-1000 and fax (505) 768-1111.
STRUCTURE AND SUBSIDIARIES. The Company is a publicly traded Delaware
corporation (Over the Counter or "Pink Sheets", present ticker symbol ALEN,
former symbol AUTL), and is in the form of a holding company headquartered
in Albuquerque, New Mexico. The Company is currently winding down two of
its businesses. The Company primarily operates through its wholly-owned
subsidiaries. They are:
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OFFER TO PURCHASE Made by Prinova Capital Group, LLC For AutoLend Debt
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AutoLend Corporation, which maintains a residual portfolio of
--------------------
sub-prime consumer used-car loan contracts purchased from used-car dealers
(the "Loans"). AutoLend Corporation ceased purchasing these Loans in
December 1995. This portfolio has now been sold and AutoLend Corporation
does not realize any monthly return from the Loan portfolio.
American Life Resources Group, Inc. and LB NM, Inc. which maintain
----------------------------------- -----
portfolios of unmatured life insurance policies purchased from persons with
life-threatening illnesses, a business generically referred to as "viatical
settlements". These subsidiaries generally ceased purchasing policies in
September 1994. The five remaining policies had an aggregate face value of
approximately $366,000 and a net book value of $36,000 on September 30,
2000.
AutoLend Group, Inc. is not affiliated with the website
www.autolend.com, nor is the Company affiliated with the Miami-based
----------------
business, AutoLend IAP.
OVERVIEW OF RECENT ACTIVITIES. For approximately three years, the Company's
activities concentrated on concluding its bankruptcy (see below), and
attempting to develop a gaming business, which attempt was terminated in
June 2000. Additionally, the Company has worked to complete its
Registration Statement (as required by the bankruptcy Plan of
Reorganization), which was made effective by the SEC in January 2000. Since
February 1999, the Company has been working to resolve an investigation by
the SEC regarding incidents that occurred prior to September 1997 (see
below). The Company until the date of the sale of this portfolio collected
amounts due from the residual Loan portfolio and the residual Policy
portfolio. Most recently, effective on or about October 12, 2000, there was
a complete change in control of the Company (see below).
PAST BANKRUPTCY. As a result of the Company's inability to make repayment
on (and subsequent default on) its convertible subordinated debentures due
September 19, 1997, (the "Debentures"), the Company filed for voluntary
reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S.
Bankruptcy Court for the District of New Mexico (the "Bankruptcy Court") on
September 22, 1997. The Bankruptcy Court confirmed a Plan of Reorganization
(the "Plan"), which became effective March 5, 1999, at which time the
Company was no longer classified as a "debtor-in-possession". On January
13, 2000, the Bankruptcy Court entered its final decree, thereby closing
the Company's Chapter 11 case.
SEC INVESTIGATION. On February 16, 1999, the Company was notified that it
was subject to an investigation by the SEC. Following this investigation,
on June 13, 2000, the Enforcement Staff of the SEC told the Company that
the Staff would recommend a civil injunctive action be brought against the
Company, as well as against its former chief executive officer, Nunzio P.
DeSantis, for alleged violations of federal securities laws. The Company
has stated in its 10-Q that it believes the activities under investigation
occurred prior to October , 1997. After the change of control, on November
1, 2000, the new Board of Directors through the company's new legal
counsel, sent correspondence to the SEC seeking a prompt resolution of the
matter. Following negotiations with the SEC, the Company accepted a
settlement offer on January 8, 2001 and a Cease and Desist Order requiring
the Company not to violate certain sections of the Securities Exchange Act
of 1934 and certain SEC rules was filed by the SEC on April 19, 2001. See
8-K. Although Nunzio P. DeSantis has reached subsequent agreements with the
SEC in connection with his activities as CEO or Director of the Company,
the current Board of Directors and management of the Company have had no
dealings with Mr. DeSantis since assuming control of the Company in
October, 2000.
TERMINATION OF FORMER CEO. Effective September 28, 2000, through an
executed agreement between the Company and its then-CEO Nunzio P. DeSantis,
Mr. DeSantis resigned as an employee and officer and is no longer
affiliated with Company in any manner. Mr. DeSantis had previously resigned
from the Board of Directors and has held no shares in the Company since
March, 1999.
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OFFER TO PURCHASE Made by Prinova Capital Group, LLC For AutoLend Debt
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Agreements between the Company and Mr. DeSantis provide that he will not
acquire, possess, or assert, directly or indirectly, any interest of any
kind the Company.
LIQUIDITY / "GOING CONCERN". On March 31, 2000, the Company had net cash of
#12,912, and had a Negative net equity (i.e. a deficit) of $575,981, which
excludes the financial effect of a remaining lease Obligation due pursuant
to the Albuquerque office lease terms. The lease terms totaled
approximately $241,000 at November 13, 2000. The Offeror believes that,
based on the Company's recent published sources of cash receipts and its
past expense trends, that cash on hand as of the date of this Offering
isles than at September 30, 2000, and the net deficit is larger. During the
Company's latest fiscal year (ended March 31, 2001), the Company suffered
recurring losses from operations that have raised substantial doubt about
its ability to continue. Without either an infusion of capital, and/ the
infusion of a positive cash-flow business, and/or the sale or realization
of assets for cash at greater than net book value, the Company has reported
in its most recent Form 10-K that it will not be able to meet all its
presently outstanding obligations. The Company further reported that it
believes that it presently has insufficient cash necessary (even if
obligations currently due under the five-year unsecured debt are excluded)
to continue operating beyond the end of the current fiscal year (ending
March 31, 2002) without additional financing. The Company was previously
audited by Meyners + Company LLC, a BDO Seidman LLC Alliance member. The
Company recently retained Henderson, Black & Company upon the resignation
of Meyners + Company LLC in January, 2002. The Company is, and has been,
current on all its SEC filings.
LEASE OBLIGATIONS. The Company assumed a lease in February 1999, which
covers its office space at 600 Central Avenue SW in Albuquerque, New Mexico
where the Company has had its offices since August 1997. The lease
terminates on July 31, 2002, and the lease payments are presently $10,441
per month.
FIVE-YEAR DEBT. Emergence from bankruptcy led to elimination of the
Company's debenture debt. It also led to new, unsecured,
non-interest-bearing debt obligations, aggregating $609,000. The Company
incurred this new debt, effective March 5, 1999, pursuant to the terms of
the Company's Third Amended Plan of Reorganization in favor of former
Debenture holders who elected Option A under the Plan. The Offeror acquired
$412,500 of the Debt from a former Debenture holder, effective October 12,
2000, which leaves $196,500 in the possession of other parties.
The Debt was originally anticipated to be payable in five equal annual
payments of $121,000, and the first annual payment was originally scheduled
for March 5, 2000. The Company, on advice from it's former reorganization
counsel, did not make this payment. That counsel advised that the Company's
financial position in March, 2000 would not permit a payment and that other
debts, notably the lease agreement, took precedence under law. The Company
concluded that if the Company were to liquidate, any such Debt repayment
would likely be the subject of an adversary proceeding against the
recipients of repayments. (i.e., the Debt Holders). The Company has given
no indication of when or if such payment will ever be made and its
financial situation has not substantially improved since March, 2000. The
Offeror believes that a single annual payment would require cash in excess
of the total cash that the Company has on hand, and that the Company
appears to have little or no means in its present structure to obtain any
additional cash.
POTENTIAL RIGHTS. According to a Form 8-K filed with the SEC by
International Thoroughbred Breeders, Inc. ("ITB") on June 7, 2000, the
former El Rancho Hotel property in Las Vegas, Nevada was sold by ITB on May
22, 2000. AutoLend had earlier received certain indirect contingent rights
in the event this ITB property sold above a certain threshold amount. The
Company's rights thereunder, if any, may be up to $2.0 million. ITB's Form
10-K, filed approximately October 13, 2000, has stated that "no payments
are due as a result of the transaction." The Company is presently
investigating its legal options. Realization of any rights that may exist
with regard to this transaction would likely be costly, and may be beyond
the Company's means to attain.
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OFFER TO PURCHASE Made by Prinova Capital Group, LLC For AutoLend Debt
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CHANGE IN CONTROL. Effective October 12, 2000, a block of 634,028 shares of
the Company's common stock, equal to approximately 58% of the total shares
outstanding, changed hands in a private sale between two third parties. The
buyer and new majority owner was Prinova Capital Group, LLC, the Offeror.
Prinova has no past or present ties or affiliations to any pre-bankruptcy
shareholder, director, or officer of the Company. Effective October 13,
2000, two new Directors were appointed to the Company's Board: John D.
Emery, 53 and Vincent J. Garcia, 50, both of Albuquerque. Mr. Emery was
appointed acting Chairman, acting President, and Secretary of the Company.
Mr. Garcia did not assume an officer's position in the Company. After the
appointment of Mr. Emery and Mr. Garcia to the Board, the only other
Director, Philip Vitale, MD, tendered his resignation from the Board of
Directors, which the Board accepted.
On January 8, 2002, John D. Emery tendered his resignation from the
Board of Directors and as President and Secretary of the Company. Luther W.
Reynolds was appointed to the Board and assumed the duties of acting
President. Also in January, 2002, Vincent J. Garcia resigned as a member of
the Board of Directors. Effective January 28, 2002 the Company's Board of
Directors consists of Luther W. Reynolds, of Albuquerque, NM ,Chairman;
Christobal "Chris" Baca, of Albuquerque and Werner Gellert, of Albuquerque.
A previous 8-K filing by the Company, dated January 28, 2002,
erroneously described Company Vice-President Jeff Ovington as having once
been a member of the Company Board of Directors. Mr. Ovington tendered his
resignation from the Company in December, 2000.
OTHER. The Company has, in the past, accumulated unused operating loss
carry-forwards and capital loss carry-forwards, which would ordinarily
provide for certain tax benefits. However, the requirements to utilize such
loss carry-forwards are strict, and the possibilities for usage are
extremely limited, particularly where there has been a major change of
control over the organization. Due to the substantial changes in ownership
effective October 12, 2000, these tax benefits may have been eliminated,
but are still subject to investigation by Prinova.
NOTE. Readers are referred to the public filings of the Company with the
SEC. Information gathered in this section about the Company is, largely,
excerpted from those filings. The Offeror believes the information stated
here about the Company is correct and objective. But, the SEC filings are
the controlling documents and those should be consulted by Debt holders
prior to accepting the Offer.
This Offer was subject to a prior Tender Offer extended for the period
December 7 to December 27, 2001. Although the terms of this Offer are
substantially the same as the prior tender offer, there are some changes to
these disclosures, particularly since there has been a change of management
of AutoLend since December, 2001. Although there is substantial similarity
with the prior offer, the Debt holder should not assume that the factual
disclosures of this tender offer are identical to those contained in the
tender offer dated December 7, 2001.
13. CERTAIN INFORMATION ABOUT THE OFFEROR.
Prinova Capital Group, LLC. (the Offeror) is a New Mexico limited liability
company. It holds 58% of the Company's common stock and $412,500 of the
Company's Debt. Its principal offices are located at:
600 Central Avenue SW Suite 300
Albuquerque, NM 87102
Phone: (505) 881-0808; Fax (505) 837-9427
The Offeror is an investment and asset management company. It became a
majority shareholder in the Company effective October 12, 2000. Mr. Vincent
J. Garcia is the Managing Member of Prinova. Mr. Garcia and his wife, Maria
Patricia Garcia, are also the majority interest holders in Prinova. Mr.
Garica became an outside Director of the Company on October 13, 2000 and
continued until his resignation from the Board in January, 2002. Mr.
Garcia's business address and telephone is the same as that of Prinova.
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OFFER TO PURCHASE Made by Prinova Capital Group, LLC For AutoLend Debt
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14. ADDITIONAL INFORMATION.
The Offeror has filed a statement on Schedule TO wit the SEC which includes
certain additional information relating to the Offer. Such information is
available on the EDGAR Database on the SEC's Internet site (www.sec.gov),
-----------
and copies of this information may be obtained, after paying a duplicating
fee, by electronic request at the following e-mail address:
publicinfo@sec.gov, or by writing the Public Reference Section of the SEC,
------------------
Washington, D.C. 20549-0102.
15. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
Debt holders should consult their own tax advisors regarding any tax
consequences of a sale of Debt pursuant to the Offer, as well as the
effects of state, local and foreign tax laws.
16. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENTS.
The Offeror reserves the right to extend the Expiration Date by making a
public announcement thereof. During any such extension, all Debt previously
tendered and not purchased or withdrawn will remain subject to the Offer.
The Offeror also reserves the right, at any time prior to the Expiration
Date to (a) terminate the Offer and not to purchase or pay for any Debt or,
subject to applicable law, postpone payment for Debt upon the occurrence of
any of the conditions specified in Section 6; and (b) amend the Offer in
any respect by making a public announcement thereof. Such public
announcement will be issued no later than 9:00 a.m. Mountain Standard Time
on the next business day after the previously scheduled Expiration Date and
will disclose the approximate amount of Debt tendered as of that date.
Without limiting the manner in which the Offeror may choose to make a
public announcement of extension, termination or amendment, except as
provided by applicable law (including Rule 13d-4(e)(2), the Offeror shall
have no obligation to publish, advertise or otherwise communicate any such
public announcement.
If the Offeror materially changes the terms of the Offer or the information
concerning the Offer, or if it waives a material condition of the Offer,
the Offeror will extend the Offer to the extent required by Rules
13e-4(d)(2) and 13e-4(e)(2) of the SEC. These rules require that the
minimum period during which an offer must remain open following material
changes in the terms of the offer or information concerning the offer
(other than a change in price or a change in percentage of securities
sought) will depend on the facts and circumstances, including the relative
materiality of such terms or information. If (i) the Offeror increases or
decreases the price to be paid for Debt, or the Offeror decreases the
amount of Debt being sought, and (ii) the Offer is scheduled to expire at
any time earlier than the expiration of a period ending on the tenth
business day from, and including, the date that notice of such increase or
decrease is first published, sent or given, the Offer will be extended at
least until the expiration of such period of ten business days.
17. MISCELLANEOUS
The Offer is not being made to, nor will the Offeror accept tenders from,
owners of Debt in any jurisdiction in which the Offer or its acceptance
would not comply with the securities laws or "blue sky" laws of such
jurisdiction. The Offeror is not aware of any jurisdiction in which the
making of the Offer to the tender of Debt would not be in compliance with
such laws. However, the Offeror reserves the right to exclude holders in
any jurisdiction in which it is asserted that the Offer cannot lawfully be
made. So long as the Offeror makes a good-faith effort to comply with any
state law deemed applicable to the Offer, the Offeror believes that
purchase from holders residing in such jurisdiction is permitted under SEC
Rule 13e-4(f)(9).
ATTACHMENTS: Attached are the following documents:
Latest Company Financial Statements (unaudited)
Audited Company Financial Statements
Form 8-K - filed by the Company October 19, 2000, January 11, 2002 and
February 1, 2002
Schedule 13D - filed by the Offeror October 31, 2000
Affirmation of Debt - executed by the Company October 2, 2000.
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