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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