-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FwPBbWIktbQ375NFE2zDO1bgjn5DFOPdZdeuaYCAVJ5hArz8ij48OmqgSHGia7VM kf3LkWCNAdil8ZElDaKiRA== 0001019892-01-000014.txt : 20010314 0001019892-01-000014.hdr.sgml : 20010314 ACCESSION NUMBER: 0001019892-01-000014 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000509 ITEM INFORMATION: FILED AS OF DATE: 20010313 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HOMEGOLD FINANCIAL INC CENTRAL INDEX KEY: 0000277028 STANDARD INDUSTRIAL CLASSIFICATION: PERSONAL CREDIT INSTITUTIONS [6141] IRS NUMBER: 570513287 STATE OF INCORPORATION: SC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-08909 FILM NUMBER: 1567587 BUSINESS ADDRESS: STREET 1: 3901 PELHAM ROAD CITY: GREENVILLE STATE: SC ZIP: 29615 BUSINESS PHONE: 8642895400 MAIL ADDRESS: STREET 1: 3901 PELHAM ROAD CITY: GREENVILLE STATE: SC ZIP: 29615 FORMER COMPANY: FORMER CONFORMED NAME: EMERGENT GROUP INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: NRUC CORP DATE OF NAME CHANGE: 19911002 FORMER COMPANY: FORMER CONFORMED NAME: NATIONAL RAILWAY UTILIZATION CORP DATE OF NAME CHANGE: 19840813 8-K 1 0001.txt MERGER WITH HOMESENSE FINANCIAL CORPORATION SECURITIES & 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) May 9, 2000 ------------ HOMEGOLD FINANCIAL, INC. ------------------------ (Exact Name of Registrant as Specified in its Charter) South Carolina -------------- (State of Other Jurisdiction of Incorporation) 00 0-08909 57-0513287 - ---------------------------- ------------------------------------ (Commission File Number) (IRS Employer Identification No.) 3901 Pelham Road, Greenville, South Carolina 29615 -------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) (864) 289-5400 -------------- (Registrant's Telephone Number Including Area Code) Not Applicable -------------- (Former Name or Former Address, if Changed Since Last Report) Copies to: Eric K. Graben Wyche, Burgess, Freeman & Parham, P.A. 44 East Camperdown Way (29601) P.O. Box 728 Greenville, SC 29602-0728 (864) 242-8200 ITEM 2: ACQUISITION OR DISPOSITION OF ASSETS. On May 9, 2000, the Company acquired HomeSense Financial Corporation and certain affiliated companies by their merger with and into the Company's wholly-owned subsidiary HomeGold, Inc., which was the surviving company. This acquisition was reported under Item 5 of Part II of the Company Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2000 filed with the Commission on May 15, 2000 in lieu of filing a Current Report on Form 8-K to report the acquisition. The audited combined financial statements of HomeSense Financial Corporation and Affiliates for the year ended March 31, 2000 were not included in such quarterly report and are set forth below. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial Statements of the Businesses Acquired. HomeSense Financial Corporation's audited financial statements the year ended March 31, 2000. HOMESENSE FINANCIAL CORPORATION AND AFFILIATES REPORT ON COMBINED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2000 REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS Board of Directors HomeSense Financial Corporation and Affiliates Columbia, South Carolina We have audited the accompanying combined balance sheet of HomeSense Financial Corporation and Affiliates as of March 31, 2000 and the related combined statements of operations, shareholders' deficit and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. The combined financial statements of HomeSense Financial Corporation and Affiliates at March 31, 1999 were audited by other auditors whose report, dated June 29, 1999, expressed an unqualified opinion. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the combined financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the combined financial statements referred to above present fairly, in all material respects, the financial position of HomeSense Financial Corporation and Affiliates as of March 31, 2000, and the combined results of their operations and their cash flows for the year then ended in conformity with generally accepted accounting principles. /s/ Elliott Davis & Company, LLP June 23, 2000
HOMESENSE FINANCIAL CORPORATION AND AFFILIATES COMBINED BALANCE SHEET MARCH 31, 2000 ASSETS Cash $ 873,797 Mortgage notes receivable held for sale $ 34,453,137 Allowance for credit losses (100,000) Deferred loan fees (1,109,679) Deferred loan costs 72,688 33,316,146 ---------------- Loans to shareholder 6,945,340 Property and equipment, net 4,943,720 Real estate acquired through foreclosure 649,683 Prepaid expenses and other 177,337 --------------- $ 46,906,023 =============== LIABILITIES AND SHAREHOLDERS' DEFICIT Warehouse lines of credit $ 28,912,692 Operating lines of credit 2,017,548 Notes payable 2,862,951 Loans closed but not funded 6,286,160 Capital lease obligations 433,211 Accounts payable, accrued expenses and accrued interest payable 2,236,583 Advance from affiliated company (Note 10) 4,000,000 Minority interest 368,271 Shareholders' equity (deficit) Common stock $ 36,603 Additional paid-in capital 3,125,570 Accumulated deficit (3,373,566) (211,393) ---------------- --------------- $ 46,906,023 =============== The accompanying notes are an integral part of this combined financial statement.
-2-
HOMESENSE FINANCIAL CORPORATION AND AFFILIATES COMBINED STATEMENT OF OPERATIONS For the year ended March 31, 2000 REVENUES Origination fees $ 9,989,464 Gain on sale of loans 14,407,225 Interest income 2,403,231 --------------- Total revenues 26,799,920 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES Salaries and employee benefits $ 15,660,951 Advertising and promotion 3,450,370 General and administrative 2,257,295 Data processing and telecommunications 961,094 Occupancy 1,516,459 Depreciation and amortization 598,274 24,444,443 ----------------- --------------- Income from operations 2,355,477 INTEREST EXPENSE 2,687,166 --------------- Loss before minority interest (331,689) MINORITY INTEREST IN NET INCOME OF AFFILIATES (103,507) --------------- Net loss $ (435,196) =============== The accompanying notes are an integral part of this combined financial statement.
-3-
HOMESENSE FINANCIAL CORPORATION AND AFFILIATES COMBINED STATEMENT OF SHAREHOLDERS' DEFICIT For the year ended March 31, 2000 Total Additional Shareholders' Common Paid-in Accumulated Equity Stock Capital Deficit (Deficit) BALANCE, MARCH 31, 1999, AS PREVIOUSLY REPORTED $ 36,603 $ 1,619,467 $ 334,862 $ 1,990,932 Prior period adjustments (Note 9) - - (971,968) (971,968) ------------- ------------ ----------- ------------ BALANCE, MARCH 31, 1999, AS RESTATED 36,603 1,619,467 (637,106) 1,018,964 Capital contributions - 1,506,103 - 1,506,103 Distributions to majority shareholders - - (2,301,264) (2,301,264) Net loss - - (435,196) (435,196) ------------- ------------ ----------- ------------- BALANCE, MARCH 31, 2000 $ 36,603 $ 3,125,570 $(3,373,566) $ (211,393) ============= ============ ============ ============= The accompanying notes are an integral part of this combined financial statement.
-4-
HOMESENSE FINANCIAL CORPORATION AND AFFILIATES COMBINED STATEMENT OF CASH FLOWS For the year ended March 31, 2000 OPERATING ACTIVITIES Net loss $ (435,196) Adjustments to reconcile net loss to net cash used for operating activities Minority interest in net income of affiliates 103,507 Depreciation and amortization 598,274 Loans originated with intent to sell (425,745,593) Proceeds from loans sold 410,017,937 Provision for credit losses 30,000 Loss on sale of property and equipment 8,011 Changes in operating assets and liabilities: Deferred loan fees 649,514 Deferred loan costs (72,688) Real estate acquired through foreclosure (447,983) Amount due from affiliate 593,130 Prepaid expenses and other 153,817 Loans closed but not funded 2,538,431 Accounts payable, accrued expenses and accrued interest payable 517,484 --------------- Net cash used for operating activities (11,491,355) --------------- INVESTING ACTIVITIES Proceeds from sale of property and equipment 154,500 Purchase of property and equipment (1,036,431) Proceeds from matured certificate of deposit 2,484,232 Loans to shareholders (4,947,129) --------------- Net cash used by investing activities (3,344,828) --------------- FINANCING ACTIVITIES Advances under warehouse lines of credit 424,772,687 Payments on warehouse lines of credit (410,529,740) Net payments on operating lines of credit (3,433,986) Proceeds from capital lease obligations 123,570 Payments on capital lease obligations (227,008) Proceeds from notes payable 1,387,847 Payments on notes payable (197,696) Advance from affiliated company 4,000,000 Capital contributions 1,506,103 Distributions to shareholders (2,710,433) --------------- Net cash provided by financing activities 14,691,344 --------------- Net decrease in cash (144,839) CASH, BEGINNING OF YEAR 1,018,636 --------------- CASH, END OF YEAR $ 873,797 =============== CASH PAID FOR Interest $ 2,470,068 =============== NONCASH ACTIVITIES Property acquired through foreclosure $ 742,750 =============== The accompanying notes are an integral part of this combined financial statement.
-5- HOMESENSE FINANCIAL CORPORATION AND AFFILIATES NOTES TO COMBINED FINANCIAL STATEMENTS NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACTIVITIES - ------------------------------------------------------------------ HomeSense Financial Corporation and its affiliated companies, headquartered in Lexington, South Carolina, (collectively "HomeSense" or the "Company") operates in the sub-prime residential mortgage business. HomeSense originates, purchases, and services first and second lien mortgage loan products and typically sells the mortgages it originates in whole-loan sales within sixty days of origination. The Company's principal loan product is a debt consolidation loan, which is secured by a first lien on real estate. HomeSense was founded May 2, 1989 as Equitable Mortgage Corp. In 1996 its name was changed to Equitable Mortgage Corp. of Columbia, and in 1998 to HomeSense Financial Corp. HomeSense utilizes a multi-channel distribution system including eight retail branches, a centralized retail call center in Columbia, and wholesale account executives who work from their homes and call on independent mortgage brokers. The retail operations market under the name HomeSense, while the wholesale group operates under the name of EMMCO. Basis of presentation The accompanying combined financial statements include the accounts of the following companies each privately wholly-owned by the Company's majority shareholder, except for EMMCO, the Mortgage Service Station, Inc. and Doc-Write, Inc., which are principally owned by the majority shareholder. The minority interest recorded in the accompanying combined financial statements represents the net equity and operations of the combined companies owned by parties other than the majority shareholder.
Common Shares Stock issued and Company Authorized outstanding HomeSense Financial Corporation of Alabama 1,000 1,000 HomeSense Financial Corporation of Asheville 1,000 1,000 HomeSense Financial Corporation of Baton Rouge 1,000 1,000 HomeSense Financial Corporation of Charleston 100,000 1,000 HomeSense Financial Corporation of Charlotte 100,000 1,000 HomeSense Financial Corporation of Cleveland 1,000 1,000 HomeSense Financial Corporation of Columbia 1,000 1,000 HomeSense Financial Corporation of Illinois 1,000 1,000 HomeSense Financial Corporation of Indiana 1,000 1,000 HomeSense Financial Corporation of Jackson 1,000 1,000 HomeSense Financial Corporation Little Rock 1,000 1,000 HomeSense Financial Corporation Maine 1,000 1,000 HomeSense Financial Corporation Memphis 1,000 1,000 HomeSense Financial Corporation Missouri 1,000 1,000 HomeSense Financial Corporation New Jersey 1,000 1,000 HomeSense Financial Corporation New York 1,000 1,000 HomeSense Financial Corporation Orlando 1,000 1,000 HomeSense Financial Corporation Pennsylvania 1,000 1,000 HomeSense Financial Corporation Savannah 1,000 1,000 HomeSense Financial Corporation Texas 1,000 1,000 HomeSense Financial Corporation Virginia 1,000 1,000 HomeSense Financial Corporation West Virginia 1,000 1,000 HomeSense Financial Corporation II 10,000 1,000 HomeSense Financial Management Corporation 100,000 1,000 Columbia Media Corporation 100,000 1,000
-6- NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACTIVITIES, Continued - ----------------------------------------------------------------------------- Basis of presentation, continued
Common Shares Stock issued and Company Authorized outstanding ------- ---------- ----------- HomeSense Financial Loan Center Corporation 1,000 1,000 Mortgage Avenue Corporation 1,000 1 Doc-Write, Inc. 1,000 1,000 EMC Training Corporation 1,000 1,000 EMC Underwriting Corporation 1,000 1,000 EMC Holding Corporation 1,000 1,000 EMMCO, The Mortgage Service Station, Inc. 1,000,000 10,000 EMMCO, The Mortgage Service Station of Texas, Inc. 1,000,000 1 EMMCO, The Mortgage Service Station of Alabama, Inc. 1,000 1
All significant intercompany balances and transactions have been eliminated in combination. Cash The Company places its temporary cash investments with high credit quality financial institutions. At times such investments may be in excess of the FDIC insurance limits. Mortgage notes receivable held for sale Loans receivable held for sale are carried at the lower of aggregate cost or market. Allowance for credit losses The allowance for credit losses is based on management's ongoing evaluation of the loan portfolio and reflects an amount that, in management's opinion, is adequate to absorb inherent losses in the existing portfolio. In evaluating the portfolio, management takes into consideration numerous factors including delinquencies, current economic conditions, prior loan loss experience, the composition of the serviced loan portfolio, and management's estimate of anticipated credit losses. Management considers the year-end allowance appropriate and adequate to cover inherent losses in the loan portfolio; however, management's judgment is based upon a number of assumptions about future events, which are believed to be reasonable. Actual results could differ from these estimates. Thus, there can be no assurance that charge-offs in future periods will not exceed the allowance for credit losses or that additional increases in the allowance for credit losses will not be required. Real estate acquired though foreclosure Real estate acquired through foreclosure represents properties that have been acquired through actual foreclosures or deeds received in lieu of loan payments. These assets are recorded at the lower of the carrying value of the loans or the estimated fair value of the related real estate, net of estimated selling costs. Property and equipment Property and equipment is stated at cost. Depreciation is computed principally by the straight-line method over the estimated useful lives of the assets. Estimated lives are 7 to 25 years for building and improvements and 3 to 10 years for furniture, fixtures, equipment and vehicles. Equipment and furniture under capital lease obligations is amortized using the straight-line method over the shorter period of the lease term or the estimated useful life of the equipment. Loans closed but not funded Loans closed but not funded represents loans that have closed with the loan receivable and corresponding origination fees recorded in the accompanying combined financial statements, but which have not yet been funded to the borrower or advanced to HomeSense on a warehouse line. -7- NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACTIVITIES, Continued - ----------------------------------------------------------------------------- Revenue recognition Origination fees charged on closed loans are deferred and are recorded as deferred loan fees in the HomeSense combined balance sheet until the sale of the loans to third parties when they are recorded as period income. Gains on sales of loans are recorded when the loans are sold to third parties as the difference between book value and the sales proceeds. Mortgage loans are sold servicing released and on a non-recourse basis, with customary representations and warranties. In connection with the sale of mortgage loans, the Company receives cash premiums. Advertising costs Advertising expense is primarily the costs of telemarketing and direct mail solicitation and is recorded as expense in the period in which the solicitations are mailed. The Company incurred advertising expense of $3,450,370 during fiscal year 2000. Estimates The preparation of combined financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the Company's financial position and results of operations and disclosure of contingent assets and liabilities at the time of the financial statements and the reported amounts of revenue and expenses during the reported period. Actual results could differ from these estimates. Income taxes The Company, with the consent of its shareholders, has elected to be taxed as an S corporation for federal and state income tax purposes. Under this election, the Company's income, deductions and credits are reported by its shareholders on their individual income tax returns. For income tax purposes, the Company uses a calendar year-end. NOTE 2 - PROPERTY AND EQUIPMENT - ------------------------------- Land $ 540,223 Building and land improvements 2,405,586 Equipment 1,717,555 Furniture and fixtures 769,242 Vehicles 635,241 --------------- 6,067,847 Less accumulated depreciation (1,124,127) --------------- Property and equipment, net $ 4,943,720 =============== Depreciation and amortization expense totaled $598,274 in fiscal 2000. NOTE 3 - WAREHOUSE LINES OF CREDIT - ---------------------------------- Warehouse line of credit in the amount of $15,000,000 with interest at the bank's prime rate plus .5 percent (9.5 percent at March 31, 2000) and principal due in full on June 30, 2000. This loan is collateralized by mortgage notes receivable held for sale and personally guaranteed by the Company's majority shareholder. The line contains certain covenants, all of which have not been met at March 31, 2000. (see Note 10). $ 6,674,289
-8- NOTE 3 - WAREHOUSE LINES OF CREDIT, Continued - --------------------------------------------- Warehouse line of credit in the amount of $25,000,000 with interest at the bank's prime rate plus .25 percent (9.25 percent at March 31, 2000) and principal due in full on demand but no later than March 31, 2000. This loan is collateralized by mortgage notes receivable held for sale and personally guaranteed by the Company's majority shareholder. 11,929,447 Warehouse bank line of credit in the amount of $30,000,000 with interest at the bank's prime rate plus .25 percent (9.25 percent at March 31, 2000) and principal due in full on September 30, 2000. This loan is collateralized by the mortgage note receivable held for sale. The line contains certain covenants, all of which have not been met at March 31, 2000. (See Note 10). 10,308,956 ------------- $ 28,912,692 ============= NOTE 4 - OPERATING LINES OF CREDIT - ---------------------------------- Operating line of credit in the amount of $1,860,000 with interest due quarterly at 30 day LIBOR plus 2.5 percent (8.79 percent at March 31, 2000) and principal due in full on October 1, 2000. This loan is collateralized by assignment of a $1,000,000 certificate of deposit held by the Company's majority shareholder and all outstanding shares of HomeSense common stock. $ 1,860,000 Operating line of credit with interest due monthly at the bank's prime rate less .75 percent (8.25 percent at March 31, 2000) and principal due on November 2, 2000. 135,064 Uncollateralized bank line of credit in the amount of $35,000 with interest due monthly at the bank's prime rate plus 6.75 percent (15.5 percent at March 31, 2000). Payment of this line of credit is guaranteed by the Company's majority shareholder. 22,484 ------------- $ 2,017,548 ============= NOTE 5 - NOTES PAYABLE - ---------------------- Notepayable due in monthly payments of $9,066 and bearing interest at the prime rate less a quarter percent (8.75 percent at March 31, 2000); matures May 2003; collateralized by the Company's main office facility. $ 2,440,656 Note payable due in monthly installments of $3,628 and bearing interest at 8.25 percent through October 2019, collateralized by a vehicle. 422,295 ------------ $ 2,862,951 ============
-9- NOTE 5 - NOTES PAYABLE, Continued - --------------------------------- Scheduled principal repayments on long-term debt are: For the year ended March 31, ------------------- 2001 $ 117,831 2002 118,606 2003 119,447 2004 2,125,849 2005 12,558 Thereafter 368,660 ---------------- $ 2,862,951 ================ NOTE 6 - CAPITAL LEASE OBLIGATIONS - ---------------------------------- The Company has incurred capital lease obligations under nine separate leases, at varying rates of interest ranging from 12 percent to 21 percent, which are collateralized by leased equipment and furniture with a cost of approximately $752,000 and accumulated depreciation of approximately $226,000 at March 31, 2000. $ 433,211 ================ Scheduled principal repayments on capital lease obligations are: For the year ended March 31, ------------------ 2001 $ 256,783 2002 160,486 2003 52,939 2004 43,235 2005 11,016 ---------------- 524,459 Less amount representing interest 91,248 ---------------- $ 433,211 ================ NOTE 7 - OPERATING LEASES - -------------------------- The Company has entered into non-cancelable operating leases covering office facilities, equipment and vehicles expiring at various dates through 2003. Certain of the lease agreements provide for minimum annual rentals with provisions to increase the rent to cover increases in expenses of the lessor. Rent expense under these lease agreements for the year ended March 31, 2000 totaled $917,692. The future minimum rental commitments under non-cancelable operating lease agreements having a remaining term in excess of one year at March 31, 2000 are: For the year ended March 31, 2001 $ 324,476 2002 246,319 2003 30,802 ---------------- $ 601,597 ================
-10- NOTE 8 - 401(k) PLAN - -------------------- The Company adopted a 401(k) plan in fiscal 1998. The plan covers all employees who are at least 21 years of age with one or more years of service. The Company's contribution is discretionary and no contributions were made during fiscal 2000. NOTE 9 - PRIOR PERIOD ADJUSTMENTS - --------------------------------- HomeSense previously recognized loan origination fees and related loan costs on the cash basis. In accordance with Statement of Financial Accounting Standards No. 91 "Accounting for Nonrefundable Fees and Costs Associated with Originating or Acquiring Loans and Initial Direct Costs of Leases," origination fees charged on closed loans and costs associated with loans held for sale should be deferred until the loans are sold. Accordingly, the company has recorded a prior period adjustment of $460,165 to increase the accumulated deficit at March 31, 1999 to reflect the deferral of origination fees and related costs on loans held for sale at March 31, 1999. Additionally, at March 31, 1999, the Company had accrued $511,803 of gains related to loans sold during April of 1999. A prior period adjustment of $511,803 has been recorded to recognize these gains during fiscal year 2000, which increased the accumulated deficit at March 31, 1999. NOTE 10 - SUBSEQUENT EVENT - -------------------------- HomeSense entered into a Reorganization Agreement dated February 29, 2000 with HomeGold Financial, Inc. ("HGFN"). HGFN is primarily engaged in the business of originating, selling, securitizing and servicing first and second lien residential mortgage loan products. Substantially all of HGFN's loans are made to sub prime borrowers. Effective May 9, 2000 and after shareholder approval, HomeSense was merged into one of HGFN's subsidiaries, HomeGold, Inc. The merger was recorded under the purchase method of accounting in accordance with generally accepted accounting principles. Subsequent to the merger, certain of the Company's warehouse lines were modified to extend to HGFN. Additionally, of the $6,945,340 loans to shareholders at March 31, 2000, $5,700,000 at the merger date was converted to a non-recourse promissory note between HGFN and the majority shareholder. The note bears interest at 7.5 percent per year and is due one year from the merger date. The note has been collateralized by a stock pledge agreement which pledged 4,560,000 shares of HGFN common and 5,700,000 shares of HGFN preferred stock as collateral. In conjunction with the merger, during March of 2000 HGFN advanced HomeSense $4,000,000 which was loaned by HomeSense to the majority shareholder prior to March 31, 2000. The payable to HGFN has been classified as an advance from affiliated company in the accompanying balance sheet. -11- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. HOMEGOLD FINANCIAL, INC. Date: March 13, 2001 By: /s/ Rhonda B. Johnson ------------------------- ----------------------------- Rhonda B. Johnson Executive Vice President & Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----