--------------------------------------------------------------------------------
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
------------------------------------------------------------------------------
TRANSACTION VALUATION US$9,825 (a) AMOUNT OF FILING FEE: $1.97 (b)
(a) Calculated as the aggregate maximum purchase price to be paid for
$196,000 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
[ ] issuer tender offer subject to Rule 13e-4
[ ] going-private transaction subject to Rule 13e-3
[ ] amendment to Schedule 13D under Rule 13d-2
Check the following box if the filing is a final amendment reporting the
results of the tender offer: [ ]
SEC SCHEDULE T.O PRINOVA TENDER OFFER FOR AUTOLEND DEBT
--------------------------------------------------------------------------------
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 utilize 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. 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
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 10Q
---------------------
(5) Mr. Garcia is a citizen of the United States.
SEC SCHEDULE T.O PRINOVA TENDER OFFER FOR AUTOLEND DEBT
--------------------------------------------------------------------------------
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 $196,000 US, upon the
terms and subject to the conditions set forth in the Offer to Purchase, dated
October 15, 2001 (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.
(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
bock of the Company's Common Stock together with the largest block of the
Company's Debt for $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.
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 witih
respect to any securities of the Company.
ITEM 6. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.
----------------------------------------------------------
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 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 corporate 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 the term of 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 that could result in impeding the
acquisition of control of the Company by another person;
(8) a class of equity securities of the Company being delisted from
a national securities exchange or ceasing to be authorized to be quoted on an
inter-dealer quotation system of a registered national securities association;
(9) a class of equity security of the Company becoming eligible for
termination of registration under the Securities Exchange Act of 1934;
(10) the 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 filing person (Prinova) is not the subject company (AutoLend),
even though Prinova has recently acquired a controlling interest in AutoLend
and, simultaneously, acquired the majority of the outstanding five-year debt
(which debt is the subject of this Tender Offer).
ITEM 7. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
--------------------------------------------------------
(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 November 15, 2001, 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 is also a
Director of the Company, and 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.
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.
SEC SCHEDULE T.O PRINOVA TENDER OFFER FOR AUTOLEND DEBT
--------------------------------------------------------------------------------
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.
----------------------
(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 November 15, 2001, 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 is also a
Director of the Company, and 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.
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 is 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
(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.
(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.
SEC SCHEDULE T.O PRINOVA TENDER OFFER FOR AUTOLEND DEBT
--------------------------------------------------------------------------------
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
November 15, 2001
OFFER TO PURCHASE MADE BY PRINOVA WITH RESPECT TO AUTOLEND DEBT
--------------------------------------------------------------------------------
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 PURCHASE 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 CAPTIAL GROUP, LLC OFFERING TO PURCHASE? (PAGE 3)
----------------------------------------------------------------------------
Prinova Capital Group, LLC ("Prinova" or the Offeror") is offering to
purchase all of the presently outstanding five-year unsecured
non-interest-bearing debt obligation (the "Debt") that was incurred by
AutoLend Group, Inc. (the "Company"), and which Debt is 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 in principal face value (exclusive of
any interest or discout). The Offer is conditioned upon the tender of all
debt held by any individual Debt Holder.
HOW MUCH AND IN WHAT FORM WILL THE OFFEROR PAY ME FOR MY DEBT? (PAGE 3)
--------------------------------------------------------------------------------
Cash. 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 7)
--------------------------------------------------------------------------------
Yes. If the Offeror purchases all $196,500 face value of the Debt, its
cost will be $9,8225. (Exclusive of fees and expenses incurred in
connection with the offer.)
WHEN DOES THE OFFER EXPIRE? CAN THE OFFEROREXTEND THE OFFER, AND IF SO, HOW
--------------------------------------------------------------------------------
WILL I BE NOTIFIED? (PAGE 10)
----------------------------------
- The offer expires on the 30th day of December, 2001, at 12:00
midnight, mountain daylight savings time, unless the Offeror extends
the offer.
- The Offeror may extend the offer period at any time, at its sole
election.
(Over)
OFFER TO PURCHASE MADE BY PRINOVA WITH RESPECT TO AUTOLEND DEBT
--------------------------------------------------------------------------------
- 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.
HOW DO I TENDER MY DEBT (PAGE 3)
---------------------------------------
If you decide to tender your 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 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 before the
expiration date.
CAN I WITHDRAW TENDERED DEBT? (PAGE 3)
--------------------------------------------
Once tendered, you may not withdraw it unless the Offeror has not
accepted your tendered Debt for payment by 12:01 a.m. on December 31, 2001.
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 3)
-----------------------------------------------------------------------
- contact Robert G. Cates, Esq. and submit written notice to the law
firm of Cates & Quintana, Attorneys.
WILL THERE BE ANY TAX CONSEQUENCES TO TENDERING MY DEBT? (PAGE 10)
-----------------------------------------------------------------------------
The Offeror is not able to comment on any tax consequences or to
provide tax advice under the laws of any jurisdiction. Please consult your
tax advisor as to any possible tax consequences for you by tendering your
debt.
WHAT IS THE PURPOSE OF THE OFFER? (PAGE 4)
--------------------------------------------------
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 itself into the Company or
sell assets to the Company. The Company, as presently structured and
encumbered, 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 4)
-------------------------------------------------------------------------
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 Debt tendered for
payment, and decline to proceed with the Tender Offer, purchase or payment
under any circumstances at its sole discretion.
IF I DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY DEBT? (PAGE 7)
----------------------------------------------------------------------
iii
OFFER TO PURCHASE MADE BY PRINOVA WITH RESPECT TO AUTOLEND DEBT
--------------------------------------------------------------------------------
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 hard to
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.
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. 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 principals. 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 fax at (505) 837-9427, or by email
quincates@aol.com, or by mail Cates & Quintana law offices 600 Central
Avenue SW, Suite 300, Albuquerque, NM 87102.
iv
<TABLE>
<CAPTION>
OFFER TO PURCHASE MADE BY PRINOVA WITH RESPECT TO AUTOLEND DEBT
--------------------------------------------------------------------------------
TABLE OF CONTENTS
-----------------
PAGE
----
<S> <C>
Summary Term Sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii
Risk Factors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
The Offer to Purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1. Price; Amount of Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2. Procedure for Tendering Debt. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 3. Withdrawal Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 4. Payment for Debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 5. Certain Conditions of the Offer . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 6. Purpose of the Offer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 7. Plans or Proposals of the Offeror . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 8. Price Range of Debt; Interest . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 9. Interest of Offeror and Related Parties; Transactions and Arrangements Concerning
the Debt and Common Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 10. Certain Effects of the Offer . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 11. Source and Amount of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 12. Certain Information about the Company. . . . . . . . . . . . . . . . . . . . . . 7
Section 13. Certain Information about the Offeror. . . . . . . . . . . . . . . . . . . . . . 9
Section 14. Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 15. Certain Federal Income Tax Consequences. . . . . . . . . . . . . . . . . . . . . 11
Section 16. Extension of Tender Period; Termination; Amendments. . . . . . . . . . . . . . . 11
Section 17. Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Attachments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Latest Company Financial Statements -- as of September 30, 2000 . . . . . . . . . . . . 12
Audited Company Financial Statements - as of March 31, 2000. . . . . . . . . . . . . . . 30
Form 8-K - filed by the Company October 19, 2000 . . . . . . . . . . . . . . . . . . . . 88
Schedule 13D - filed by the Offeror October 31, 2000 . . . . . . . . . . . . . . . . . . 91
Affirmation of Debt - executed by the Company October 2, 2000. . . . . . . . . . . . . . 99
</TABLE>
(Over)
OFFER TO PURCHASE MADE BY PRINOVA WITH RESPECT TO AUTOLEND DEBT
--------------------------------------------------------------------------------
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 indentifiable, Liquid market for the Debt does not
exist and is not likely to exist in the near future. Accordingly, it
is Hard to establish a fair market value for 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 US$75,000.
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, including obligations on its current lease. 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.
B. Debt HoldersWHO DO NOT TENDER All or Any Portion of 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 or revenue or income, (3) is rapidly expending its
remaining small amount of case, (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 December 31, 2001, 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
repayments 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 an annual repayments. The principal risk to holders of debt who
do not tender, is that the Company will fail and pay out nothing.
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OFFER TO PURCHASE MADE BY PRINOVA WITH RESPECT TO AUTOLEND DEBT
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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 payment $196,500 or such lesser amount
of AutoLend Group, Inc.'s (the "Company") five-year unsecured
non-interest-bearing debt (the "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 December 30, 2001 (such time and date
being hereinafter called the "Initial Expiration Date"). The Debt was
originally issued under the terms of AutoLend'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 is hereinafter called the "Expiration Date." See Section 16.
---
The purchase price of the Debt will be 5% of the face value of the Debt
tendered by the tendering party. 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. If the amount of Debt properly tendered
prior to the Expiration Date is less than or equal to $196,500 in face
value, the Offeror will, upon the terms and subject to the conditions of
the 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 AutoLend Group
Inc.'s March 5, 1999 Third Plan of Reorganization.
B. Signature guaranties 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 Robert
G. Cates, Esq., signed by Robert G. Cates in his capacity as agent for
Prinova.
C. DETERMINATION OF VALIDITY. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of tenders will be
determined by the Offeror, in its sole discretion, whose determination
shall be final and binding. The Offeror reserves the right to reject
tenders determined by it not to be in appropriate form or the acceptance of
or payment for which may, in the opinion of the Offeror's counsel, be
unlawful and shall incur no liability for so doing. The Offeror reserves
the right to waive conditions of the Offer, or defects or irregularities in
a tender at its sole discretion. The Offeror's interpretations of the terms
and conditions of the Offer will be controlling, final and binding. Unless
waived, defects or irregularities of tenders must be cured by the time and
in the way specified by the Offeror, and Tendered Debt will not be accepted
for payment unless the defects or irregularities have been cured within
such time and specification No person shall be obligated to give notice of
any defects or irregularities in tenders, nor shall any person Incur any
liability for failure to give such notice.
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 12:01 a.m. on December 31, 2001, may be withdrawn by the tendering party
at that party's option.
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OFFER TO PURCHASE MADE BY PRINOVA WITH RESPECT TO AUTOLEND DEBT
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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 of the offer, events occur (or shall have been
determined by the Offeror to have occurred) that in the judgement of
Offeror make it inadvisable to proceed with the Offer or with purchase or
payment of Debt. Any determination by the Offeror concerning events is
final and binding on all parties.
If the Offeror decides to amend the Offer or to postpone the acceptance for
payment of or payment for Debt tendered, it will, to the extent necessary,
extend the period of time during which the Offer is open, as provided in
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 intends to
consider sales of assets between themselves and 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 ANY OR ALL OF SUCH 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 ADVISERS, AND MAKE THEIR OWN DECISIONS WHETHER TO TENDER
DEBT.
7. PLANS OR PROPOSALS OF THE OFFEROR. Affiliates of the Offeror purchases and
sells assets and debt instruments in the ordinary course of 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 purchase was made in 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: (1) selling assets of affiliates of Prinova to
the Company; (2) liquidating and closing the Company; (3) cleaning-up and
selling the Company as a "shell" Significant factors influencing the choice
of which course to pursue include: consolidation of the Company's five-year
Debt obligations (which is the subject of this Tender Offer); and, the
presence or Absence of any significant, but presently unknown issues. The
Offeror's affiliates prefer the course of action of asset sale.
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. Such changes could include changes in
management appointment of new Directors to the Board, raising of additional
equity capital and debt and other actions appropriate to the circumstances.
If the possible asset sale is effected and the Company subsequently re-
4
OFFER TO PURCHASE MADE BY PRINOVA WITH RESPECT TO AUTOLEND DEBT
--------------------------------------------------------------------------------
structured, 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, and upon future developments (including,
but not limited to, market prices of the Common Stock, availability and
alternative uses of funds, as well as conditions in the securities markets
and general economic and industry conditions), the Offeror reserves the
right to acquire additional shares of Common Stock, to dispose of shares of
Common Stock or to formulate other purposes, plans or proposals regarding
the Company to the extent deemed advisable by the Offeror.
While no specific plan has yet been decided upon - the following list of
possibilities is not intended to be or Represented as exhaustive and
complete - Affiliates of the Offeror could implement or develop other plans
or proposals including;
(1) the acquisition or disposition of additional securities of 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 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
term of 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 that could result in impeding the
acquisition of control of the Company by another person;
(8) a class of equity securities of the Company being delisted from a
national securities exchange or ceasing to be authorized to be quoted
on an inter-dealer quotation system of a registered national
securities association;
(9) a class of equity security of the Company becoming eligible for
termination or registration under the Securities Exchange Act of 1934;
or
(10) the suspension of the Company's obligation 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 Cmpany's By-Laws or instruments
corresponding thereto that would, in and of themselves, impede the
acquisition of control of the Company by any person.
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 in
cash as paid by the Offeror on approximately 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 November 15, 2001, the 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) majority interest-holder of
the Offeror. He Effectively controls 58% interest in the Company and the
$412,500 block of Debt. Mr. Garcia's holdings in
5
OFFER TO PURCHASE MADE BY PRINOVA WITH RESPECT TO AUTOLEND DEBT
--------------------------------------------------------------------------------
the Offeror are as a joint tenant with rights of survivorship with his
wife, Maria Patricia Garcia. Mr. Garcia is also a Director of the Company.
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
other executives, directors, officers, employees, or consultants of the
Company or its affiliates hold any additional stock or Debt in the Company.
Exhibit as set forth in the Offer to Purchase, the Offeror knows of no
other 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.
10. CERTAIN EFFECTS OF THE OFFER. The Offeror in no way conditions acquiring
Debt upon considering the sale of assets discussed herein, but such
acquisition must be a significant factor in being able to effect an asset
sale. If the asset sale does not happen, and another course of action is
chosen, such as liquidation, holders of Debt may have increased risk with
respect to their holding due to several factors, including the Company's
substantial negative net equity, the small amount of cash available, and
the apparent precedence of the lease obligation. See "Five-year Debt" in
Item 12 below. The risks associated with these factors 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, or course, free to retain any
stock that they may hold, and if an asset sale occurs, and if it is
successful, such stock could improve in value. Successful consolidation of
the outstanding Debt (i.e., receiving tenders in this Offer) is a key
factor in t he Off eror's analysis and decision of the course of action the
Offeror will take. Offeror cannot and does not make warranties or
representations with respect to which course of action will be taken, and,
once taken, the outcome of that course of action. See also Risk Factors, on
page 2 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 (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, or a Prinova designee other than the Company.
12. CERTAIN INFORMATION ABOUT THE COMPANY. The information in this Section 12,
except as Specifically noted, is taken from publicly available information,
as filed by the Company with the United States Securities and Exchange
Commission ("SEC"). AutoLend Group, Inc.'s offices are located at:
600 Central Avenue, SW, 3rd Floor
Albuquerque, NM 87102
Phone: (505) 768-1000; fax: (505) 768-1111
STRUCTURE AND SUBSIDIARIES. The Company is a publicly traded Delaware
corporation (Over-The-Counter "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:
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 now consists entirely of
inactive Loans that have been more than six months in arrears and now
written off. The Loans presently provide the Company an irregular net
cash flow of approximately $4,000 to $8,000 per month, which amount
will likely diminish. A portion of this Loan portfolio is presently
"out of state" (i.e., no longer legally enforceable).
6
OFFER TO PURCHASE MADE BY PRINOVA WITH RESPECT TO AUTOLEND DEBT
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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.
[Note: The Company 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 Janurary 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 United States Bankruptcy Code in the
United States 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 on 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 U.S. Securities and Exchange Commission (the
"SEC"). Following this investigation, on June 13, 2000, the Enforcement Staff of
the SEC (the "Staff") 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 (CEO), for alleged violations of federal securities
laws. The Company has stated in its Form 10-Q that it believes that the Staff
recommendations are based on activities that took place prior to October 1997.
After the change in 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, with an offer to enter into discussion with
the SEC, which has resulted in an Offer of Settlement. The Offer of settlement
specifically notes that none of the current officers and directors of the
Company was involved with AutoLend Group, Inc. at the time of the conduct
subjected to SEC investigation. The Company accepted this offer on 1/8/01 and a
Cease and Desist Order requiring the Company not to violate certain sections of
the Securities Exchange Act of 1934 and certain securities rules, was filed by
the SEC on 4/19/01. See 8-K
---
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, or
associated in any manner with, the Company. The agreement provided for, among
other things, the settlement of all past, present, and future claims by Mr.
DeSantis against the Company. Mr. DeSantis had previously resigned from the
Company's Board of Directors, and has held no shares in the Company since March
1999. The agreement further provides that Mr. DeSantis henceforth shall not
acquire, possess, or assert, directly or indirectly, any interest of any kind in
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, which 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 is less than at September
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OFFER TO PURCHASE MADE BY PRINOVA WITH RESPECT TO AUTOLEND DEBT
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30, 2000, and the net deficit is larger. During the Company's latest fiscal year
(ended March 31, 2000), the Company suffered recurring losses from operations
that have raised substantial doubt about its ability to Continue. Without either
an infusion of capital, and / or 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 Form 10-K as filed approximately March
30, 2001) 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 through the second
quarter of 2001. The Company is audited by Meyners + Company LLC, a BDO Seidman
LLC Alliance member. The Company is and has been current on all its SEC filings.
LEASE OBLIGATION. 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 $121,800, and the first annual payment was originally
scheduled for approximately March 5, 2000. The Company, on advice from the
Company's former reorganization counsel, did not make this payment. The
Company's former reorganization counsel advised that, under his interpretation
of the terms of the Plan of Reorganization, making such a payment while the
Company is in its present financial condition would be inappropriate, and,
moreover, that the Company's lease obligation (see above) takes precedence. The
Company stated that if the Company were to liquidate, any such Debt repayment,
if made, would likely be the subject of an adversary proceeding against the
recipients (i.e., the Debt Holders). The Company has given no indication of when
or if any such payment, in any amount, might ever be made, or any likelihood of
such a payment. 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, under certain conditions. 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, and what actions may be necessary in order to realize any potential
benefit that may be due from this sale. 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.
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 recent or former
shareholder, director, or officer of the Company. Effective October 13, 2000,
two new Directors were appointed to the Company's Board. They are: Mr. John D.
Emery, 53, of Albuquerque, NM; and Mr. Vincent J. Garcia, 50, also of
Albuquerque. Mr. Emery was also appointed acting Chairman, acting President, and
Secretary of the Company. Mr. Garcia is the Managing Member and, together with
his wife Maria Patricia Garcia, is Majority interest-holder in the Offeror.
After the appointment of Mr. Emery and Mr. Garcia to the Board, the
8
OFFER TO PURCHASE MADE BY PRINOVA WITH RESPECT TO AUTOLEND DEBT
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only other Director, Philip Vitale, M.D., tendered his resignation from the
Board of Directors, which the Board accepted.
OTHER. The Company has, in the past, accumulated unused operating loss
carryforwards and capital loss carryforwards, which would ordinarily provide for
certain tax benefits. However, the requirements to utilize such loss
carryforwards are strict, and the possibilities for usage are extremely limited.
Due to the substantial change in ownership effective October 12, 2000 (see
above), these tax benefits have been reduced, if not eliminated.
NOTE. Readers are referred to the public filings of the Company with the United
States Securities and Exchange Commission. Information gathered in this section
about the Company is primarily 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.
13. CERTAIN INFORMATION ABOUT THE OFFEROR. Prinova Capital Group, LLC.
("Prinova," or, 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 office address is:
600 Central Ave., S.W., 3rd Floor
Albuquerque, NM 87102
Phone: (505) 881-0808; fax: (505) 837-9427
Prinova Capital Group, LLC, is an investment and asset management company.
Prinova, became a majority shareholder in the Company effective October 12,
2000. Mr. Vincent J. Garcia is the Managing Member of Prinova. Mr. Garcia of
Albuquerque, with his wife Maria Patricia Garcia, is also the majority
interest-holder of Prinova. Mr. Garcia became an outside Director of the Company
on October 13, 2000. Mr. Garcia's business address and telephone number is the
same as Prinova's.
14. ADDITIONAL INFORMATION. The Offeror has filed a statement on Schedule TO
with the U.S. Securities and Exchange Commission (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, DC 20549-0102.
15. CERTAIN FEDERAL INCOME TAX CONSEQUENCES. Debt holders should consult their
own tax advisers 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 period of time during which the Offer is pending
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 and from
time to time, up to and including 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 daylight savings 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
9
OFFER TO PURCHASE MADE BY PRINOVA WITH RESPECT TO AUTOLEND DEBT
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(including Rule 13e-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) promulgated under the Securities Exchange Act
of 1934. 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 or the tender of Debt would not be in compliance
with the laws of such jurisdiction. 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 the execution of holders residing in such
jurisdiction is Permitted under Rule 13e-4(f)(9) promulgated under the
Exchange Act.
ATTACHMENTS. Attached are the following documents:
Latest Company Financial Statements - as of September 30, 2000 . . . 11
Audited Company Financial Statements - as of March 31, 2000 . . . 29
Form 8-K - filed by the Company October 19, 2000. . . . . . . . . . . 87
Schedule 13D - filed by the Offeror October 31, 2000 . . . . . 90
Affirmation of Debt - executed by the Company October 2, 2000
Revised commercial office Lease, dated November 19, 2000
10
OFFER TO PURCHASE MADE BY PRINOVA WITH RESPECT TO AUTOLEND DEBT
--------------------------------------------------------------------------------
Exhibit (a) (1) (i)
OFFER TO PURCHASE FOR CASH:
AUTOLEND GROUP, INC.
FIVE-YEAR UNSECURED NON-INTEREST-BEARING DEBT OBLIGATIONS
AT 5% OR PRINCIPAL (FACE) VALUE
--------------------------------------------------------------------------------
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE
AT 12:00 MIDNIGHT MOUNTAIN DAYLIGHT SAVINGS TIME ON DECEMBER 26, 2001,
UNLESS THE OFFER IS EXTENDED.
--------------------------------------------------------------------------------
To the Holders of Five-Year Non-interest-bearing Debt
(issued pursuant to the Third Amended Plan of Reorganization)
of AutoLend Group, Inc. made effective March 5, 1999) :
Prinova Capital Group, LLC, a New Mexico limited liability company located
in Albuquerque, New Mexico, USA, ("Prinova" or the "Offeror") offers to purchase
all of the five-year non-interest-bearing debt obligations (the "Debt") incurred
by AutoLend Group, Inc. ("AutoLend" or the "Company"), which was incurred
pursuant to the terms of the Company's Third Amended Plan of Reorganization,
which Plan was made effective March 5, 1999 by court order. The Offeror is
offering to purchase the Debt for case at a price (the "Purchase Price") equal
to 5% of the principal (face) value of the Debt. The offer, proration period
and withdrawal rights will expire at 12:00 midnight Mountain Daylight Savings
time on December 26, 2001 (the "Initial Expiration Date"), unless extended (the
Initial Expiration Date or the latest date to which the Offer is exented, the
"Expiration Date"), upon the terms and conditions set forth in this Offer to
Purchase and the related Letter of Transmittal (which together constitute the
"Offer"). The Debt is not currently traded on an established trading market.
The Offer is conditioned upon the tender of all debt held by any individual Debt
Holder.
THIS OFFER IS BEING MADE TO ALL DEBT HOLDERS
AND IS CONDITIONED UPON THE TENDER OF ALL
DEBT HELD BY AN INDIVIDUAL DEBT HOLDER.
THIS OFFER IS SUBJECT TO CERTAIN CONDITIONS. SEE SECTION 5.
IMPORTANT
If you desire to tender all or any portion of your Debt, you may do so by
completing and signing the Letter of Transmittal and mailing or delivering it
along with any other required documents to Robert G. Cates, Esq., Cates &
Quintana, Attorneys, 600 Central Avenue SW, Suite 300, Albuquerque, New Mexico
87102.
NEITHER THE COMPANY NOT ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATIONS TO
ANY DEBT HOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ALL OR ANY
PORTION OF SUCH DEBT HOLDER'S DEBT. DEBT HOLDERS ARE URGED TO EVALUATE CAREFULLY
ALL INFORMATION IN THE OFFER, CONSULT THEIR OWN INVESTMENT AND TAX ADVISERS AND
MAKE THEIR OWN DECISIONS WHETHER TO TENDER DEBT.
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF THE
COMPANY OR THE OFFEROR AS TO WHETHER DEBT HOLDERS SHOULD TENDER DEBT PURSUANT TO
THE OFFER. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED HEREIN
OR IN THE LETTER OF TRANSMITTAL. IF GIVEN OR MADE, SUCH RECOMMENDATION AND SUCH
INFORMATION AND REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR THE OFFEROR.
Requests for additional copies of this Offer to Purchase and the Letter of
Transmittal should be directed to Robert G. Cates, Esq., Cates & Quintana,
Attorneys, 600 Central Ave. SW, Suite 300, Albuquerque, New Mexico 87102, attn:
Robert G. Cates, Esq. Questions and requests for assistance may be directed to
Mr. Cates at (505) 767-9993.
December 6, 2001
PRINOVA CAPITAL GROUP, LLC.
EXHIBIT (a) (1) (ii)
FORM OF LETTER TO DEBT HOLDERS WHO HAVE REQUESTED OFFER TO PURCHASE
-------------------------------------------------------------------
Dear Debt Holder:
As you requested, we are enclosing a copy of the Prinova Capital Group,
LLC, (the "Offeror") Offer to Purchase up to $196,500 of the five-year unsecured
non-interest-bearing debt obligations (the "Debt") of AutoLend Group, Inc. (the
"Company") as incurred by the Company under the terms of AutoLend's Third
Amended Plan of Reorganization, made effective March 5, 1999. We are also
enclosing the related Letter of Transmittal (which together with the Offer to
Purchase constitute the "Offer"). The Offer is for cash at 5% of The face value
of the Debt tendered. The expiration date of the Offer is midnight, mountain
daylight savings time on December 30, 2001, unless extended as stated in the
Offer. Please read carefully the enclosed documents, which include the Company's
most recent financial statements.
If after reviewing the information set forth in the Offer, you wish to
tender Debt for purchase by the Offeror, Please follow the instructions
contained in the Offer to Purchase and Letter of Transmittal.
Neither the Offeror nor the Company nor the Company's Board of Directors
has made or is making any Recommendations to any holder of Debt as to whether to
tender the Debt. Each Debt holder is urged to consult His or her Financial
Advisor or tax professional before deciding whether to tender any Debt. The
Offeror is not Aware of any secondary market trading for the Debt.
Should you have any questions on the enclosed material, please do not
hesitate to call or email the Offeror's representative, Robert G. Cates, Esq. at
(505) 767-9993 during business hours or email him at quincates@aol.com.
Sincerely yours,
PRINOVA CAPITAL GROUP, LLC
600 Central Avenue, SW, 3rd Floor
Albuquerque, NM 87102
Telephone (505) 881-0808
Fax (505) 837-9427
Email: quincates@aol.com
EXHIBIT (a) (1) (iii)
FORM OF LETTER OF TRANSMITTAL
-----------------------------
(including Guidelines for Certification of Taxpayer Identification)
LETTER OF TRANSMITTAL
Regarding the 5-YEAR NON-INTEREST-BEARING DEBT OBLIGATIONS of
AUTOLEND GROUP, INC.
Tendered Pursuant to the Offer to Purchase Dated November 15, 2001
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT,
AND THIS LETTER OF TRANSMITTAL MUST BE RECEIVED BY THE PARTNERSHIP BY,
12:00 MIDNIGHT MOUNTAIN DAYLIGHT SAVINGS TIME, ON THE 30TH DAY, DECEMBER, 2001
(THE "EXPIRATION DATE"), UNLESS THE OFFER IS EXTENDED BY OFFERORS.
Name of Debt Holder:___________________________ If applicable:
Street Address (or PO Box):__________________ Custodian name_________________
City, State, Zip (or Postal code):___________ Custodian Address______________
Country:_____________________________________ City, State, Zip:______________
Face value of Debt tendered:_________________ Account#:______________________
Optional: Fax and/or phone #:___________________ (in case of problems)
Tax I.D.#:___________________________
I am a Debt holder of AutoLend Group, Inc.'s debt obligations as issued in
AutoLend's bankruptcy proceedings (the five-year unsecured non-interest-bearing
debt which was made effective March 5, 1999), or the duly, authorized
representative or agent thereof. I hereby tender my Debt, or that of my
principal, interest, as described and specified below, to Prinova Capital Group,
LLC. (the "Offeror"), upon the terms and conditions set forth in the Offer to
Purchase, dated August 15, 2001 (collectively, the "Offer to Purchase" and
"Letter of Transmittal" constitute the "Offer").
THIS LETTER OF TRANSMITTAL IS SUBJECT TO ALL THE TERMS AND CONDITIONS SET FORTH
IN THE OFFER TO PURCHASE, INCLUDING, BUT NOT LIMITED TO, THE RIGHT OF THE
OFFEROR TO REJECT ANY AND ALL TENDERS DETERMINED BY IT, IN ITS SOLE DISCRETION,
NOT TO BE IN THE APPROPRIATE FORM.
I hereby represent and warrant that I have full authority to sell my interests,
or those of my principal, to the Offeror, and that the Offeror will acquire good
title, free and clear of any adverse claim. Upon request, I will execute and
deliver any additional documents necessary to complete the sale of my interests
in accordance with the terms of the Offer.
I hereby appoint Prinova Capital Group, LLC (without posting of a bond) as my
attorney-in-fact with respect to my interests, or those of my principal, with
full power of substitution (such power of attorney being deemed to be an
irrevocable power coupled with an interest), to: (1) transfer ownership of my
interests or those of my principal on the Company's books to the respective
Offeror, (2) change the address of record of my interests or those of my
principal prior to or after completing the transfer, (3) execute and deliver
lost certificate indemnities and all other transfer documents, (4) direct any
custodian or trustee holding record title to the interests to do what is
necessary, including executing and delivering a copy of this Letter of
Transmittal, and (5) upon payment by the respective Offeror of the purchase
price, to receive all benefits and cash distributions and otherwise exercise all
rights of beneficial ownership of my interests hereby tendered.
(Over)
INSTRUCTIONS TO TENDER DEBT
Please complete the following steps to tender your Debt:
- Complete Part 1. by inserting the amount of Debt tendered.
- Complete Part 2. by providing your telephone and facsimile number(s).
- Complete Part 3. by providing the appropriate signature(s). (Note: if
you account is held by a Trustee or Custodian, sign below and forward
this form to the Trustee or Custodian at the address noted on the
first page of this Letter of Transmittal to complete the remaining
steps). All signatures must be notarized by a Notary Public or
equivalent.
- Return your original Certificate(s) of Ownership for the interests
with this form. If you are unable to locate your Certificate(s) of
Ownership, complete the Affidavit and Indemnification Agreement for
Missing Certificate(s) of Ownership.
PART 1. AMOUNT OF DEBT TO BE TENDERED:
[ ] I tender my entire interest or that of my principal if I am acting as
agent or custodian in the Debt of $_____ face value, for a price of 5% of
face value.
PART 2. TELEPHONE NUMBER(S).
My telephone numbers are:( ) [Daytime] and ( ) [Evening]
---------------- ---------------
PART 3. SIGNATURE(S).
FOR INDIVIDUAL/JOINT OWNERS:
_________________________________ ___________________________________
Print Name of Debt Holder If Joint, Print Name of Joint Owner
_________________________________ ___________________________________
Signature of Debt Holder If Joint, Signature of Joint Owner
Sworn to me this ___ day Sworn to me this ___day of
of _________, 2001 ___________, 2001
__________________________________ __________________________________
Notary Public Notary Public
Return or Deliver: (1) this Letter of Transmittal; (2) your original
Certificate(s) of Ownership for the interests, or if you are unable to locate
your Certificate(s) of Ownership, the Affidavit and Indemnification Agreement
for Missing Certificate(s) of Ownership; and (3) the Substitute Form W-9 on or
before the Expiration Date to:
2