UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-KSB/A
(Mark One)
X Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the fiscal year ended December 31, 2004
Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the transition period from ________ to________
ommission File Number 001-12233
Bexil Corporation
(Name of small business issuer in its charter)
Maryland 13-3907058
(State of incorporation) (I.R.S. Employer Identification No.)
11 Hanover Square, New York, New York 10005
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area
code: 1-212-785-0400
Securities registered pursuant to Section
12(b) of the Act:
Title of each class Name of each exchange on which registered
------------------- -----------------------------------------
Common Stock American Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: n/a
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes No X .
----- -------
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]
The issuer's revenues for its most recent fiscal year: $167,160.
The aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
sold, or the average bid and asked price of such common equity, as of May 9,
2005: 604,101 shares at $14.33 per share as of May 9, 2005, or $8,656,767.
The number of shares outstanding of the issuer's classes of common equity, as of
May 20, 2005: Common Stock, par value $.01 per share - 879,591 shares
-1-
This amended Annual Report on Form 10-KSB is being filed to correct certain
errors which resulted from the inadvertent filing of the report before all final
edits were completed. These errors caused the Company to conclude that the
financial statements contained in the Company's Annual Report on Form 10-KSB
filed with the SEC on June 15, 2005 could not be relied upon. The circumstances
surrounding the inadvertent filing and a description of the edits which had not
been completed are described in the Company's Current Report on Form 8-K dated
June 16, 2005, and filed with the SEC on the same date.
-2-
Item Page
Item 1. Description of Business.............................................4
Item 2. Description of Property.............................................7
Item 3. Legal Proceedings...................................................7
Item 4. Submission of Matters to a Vote of Security Holders.................8
Item 5. Market for the Company's Common Equity, Related Stockholder Matters
and Small Business Issuer Purchases of Equity Securities............9
Item 6. Management's Discussion and Analysis or Plan of Operation..........10
Item 7. Financial Statements...............................................14
Item 8A. Controls and Procedures............................................29
Item 9. Directors and Executive Officers of the Registrant.................30
Item 10. Executive Compensation.............................................32
Item 11. Security Ownership of Certain Beneficial Owners
and Management and Related Stockholder Matters.....................34
Item 12. Certain Relationships and Related Transactions.....................37
Item 13. Exhibits...........................................................37
Item 14. Principal Accountant Fees and Services.............................38
-3-
PART I
Item 1. Description of Business
Bexil Corporation, a Maryland corporation ("we," "us" or the "Company), is a
holding company. We have 10 employees. Our primary holding is a 50% interest in
privately held York Insurance Services Group, Inc. ("York").
The Company was incorporated under the laws of the State of Maryland as "Bull &
Bear U.S. Government Securities Fund, Inc." on August 30, 1996. The Company
registered as a investment company with the Securities and Exchange Commission
("SEC") by filing a Form N-8A and Form N-2 on September 27, 1996. On October 4,
1996, the Company's predecessor (a mutual fund which had commenced operations on
March 7, 1986 as a diversified series of shares of Bull & Bear Funds II, Inc.,
an open-end management investment company organized in 1974) transferred its net
assets to the Company in exchange for shares of the Company. Thus, since 1986,
the Company (including its predecessor) was regulated under the Investment
Company Act of 1940 (the "1940 Act"), and the rules and regulations promulgated
thereunder, and under the Company's fundamental investment policies contained in
its registration statement filed pursuant to the 1940 Act. The Company changed
its name to Bexil Corporation on August 26, 1999.
On January 6, 2004 the Company announced that an order declaring that it has
ceased to be an investment company was issued by the SEC. The order was
effective immediately. As a result, we are currently a publicly-held company
listed on the American Stock Exchange subject to the reporting and other
requirements of the Securities Exchange Act of 1934, as amended, and are no
longer subject to regulation under the 1940 Act.
For 2004 the Company's 50% interest in York is accounted for using the equity
method and, therefore, York's financial statements are not consolidated with our
own. For 2003, inasmuch as the Company was a registered investment company at
that time, York is accounted for using the fair value method.
York Insurance Services Group, Inc. - Business
York is one of the leading privately owned insurance services business process
outsourcing ("BPO") companies in the United States. Since the 1930's, York,
through predecessor companies, has served as both an independent adjustment
company and third party administrator ("TPA") providing comprehensive claims,
data, and risk related services to insurance companies, self-insureds, and
intermediaries throughout the United States. More recently York has established
business units in the program management, licensed private investigation,
recovery, environmental consulting, retail logistics and large/complex loss
adjusting markets.
York Industry Profile and Risks
The insurance services industry in which York competes is fragmented and
includes captive and independent service providers. Captives are typically owned
and operated by insurance carriers and brokers. Independents competitors include
a few large, small group of mid-sized, and many small companies. York is one of
the largest independent companies within the mid-sized group. York seeks to
position itself as a nimble, nationwide provider of a broad array of insurance
services. York's objective is
-4-
to offer its customers the flexibility of the smaller providers combined with
the infrastructure and service offerings of larger competitors.
York competes in the domestic and international markets for claims
administration, claims adjusting, and related services, which are highly
competitive. A large number of companies compete in varying ways in various
segments of the market. Competitors include those insurance companies that have
their own claims handling capabilities, insurance brokers offering adjusting and
related services to supplement brokerage services, as well as national, regional
and small adjusting companies.
Although there are a large number of property and casualty insurers, the major
insurers, which account for a substantial portion of the market, typically
maintain a staff of adjusters on their payrolls. Generally, insurers use this
staff to adjust automobile and smaller property claims; however many insurers
also have internal adjusting staffs which handle claims that are larger or more
complicated. Nonetheless, to varying degrees, property and casualty insurers
"outsource" claims adjusting, whether entirely, on a multi-policy "program"
basis or, a policy-by-policy basis or on an adjustment-by-adjustment basis.
Insurers have numerous reasons for out-sourcing claims handling. Some insurers
have elected to reduce overhead by eliminating internal claims adjusting
capability in whole or in part. Others have specialized requirements for
specialized adjusting services. Additionally, certain claims may require
adjusting services outside the geographic area that an insurer's staff can
handle conveniently. Insurers' relationships with insureds or managing general
agents, and those parties' relationships with claims administrators, may also
result in an insurer out-sourcing claims. York makes its services available to
those insurers wishing to out-source claims handling.
Insurance markets tend to be cyclical in nature. As markets "harden", premiums,
deductibles and "self-insured retention" amounts tend to increase, while
coverage terms tend to become more restrictive. As markets "soften", the
opposite tends to occur. Different business opportunities arise in all phases of
these cycles. For example, the higher deductibles and self-insured retention
amounts seen during a "hard" market may lead insureds to take a greater degree
of control over the claims handling process. This presents an opportunity for
York to provide service to "self-insured" parties. On the other hand, a "soft"
market will tend to cause insurers to seek to cut costs. One way insurers try to
do this is by reducing the overhead of their in-house claims departments. This
presents an opportunity to York to handle "out-sourced" claims.
The insurance industry is heavily regulated and has recently been the focus of
intense scrutiny. Business practices of brokers, agents, insurance carriers and
reinsurers have all been under review including many customers and parties that
refer business to York. It is uncertain what impact these recent regulatory
initiatives will have on the insurance industry and ultimately on York's
business. To the extent that these regulatory initiatives lead to changes in the
industry, York believes that both risks to its current business and
opportunities for new business may be created.
York obtains business from numerous sources, including insurers, insurance
brokers, managing general agents ("MGA's"), captives, government agencies,
public entities, private self-insured companies, consultants, and trade
associations. Many of York's sources of revenue often involve multi-party
relationships. For example, an important source of business for York is
industry-specific programs. These programs often involve a large group of
policyholders, a trade association, a managing general agent, in conjunction
with an insurance carrier, each of whom exercise influence over how the program
is managed and who is selected to manage the claims.
-5-
Despite these multi-party relationships, York frequently contracts with the
insurer. One such insurer represented approximately 19% of York's revenue in
2004 and 2003, most of which was derived from TPA services provided on
industry-specific program business which also involved relationships with MGA's
and trade associations which are an integral part of the buying decision. This
insurer is a A+ rated (Superior by A.M. Best) company and York services less
than 5% of their total claims business. York has also generated revenues with
multiple affiliates of this insurer, representing in the aggregate an additional
amount of less than 10% of York's 2004-2003 revenues.
York manages claims for residual market property and auto plans in over 20
states. The selection of York as TPA on these programs is influenced by each
individual state plan, the servicing carrier which manages each plan, the state
departments of insurance which oversee each plan, and the representatives of
insurance companies who serve on the Boards of each plan. York sometimes
contracts directly with the residual market plan, and sometimes with the
servicing carrier, including some of the affiliated insurers referred to above.
In every instance York is approved as claims TPA by the residual market plan in
each state and acts as agents of the plan. In the aggregate, residual market
plans represented approximately 30% of York's revenue in 2004 and 2003. Each of
these state residual market plans is a separate customer relationship and as
such, the customer concentration disclosure above does not reflect any business
derived from residual market plans.
Forward Looking Information
Information or statements provided by or on behalf of the Company from time to
time, including those within this Annual Report on Form 10-KSB, may contain
certain "forward-looking information", including information relating to
anticipated growth in revenues or earnings per share, anticipated changes in the
amount and composition of assets under management, anticipated expense levels,
and expectations regarding financial market conditions. The Company cautions
readers that any forward-looking information provided by or on behalf of the
Company is not a guarantee of future performance and that actual results may
differ materially from those in forward-looking information as a result of
various factors, including but not limited to those discussed below. Further,
such forward-looking statements speak only as of the date on which such
statements are made, and the Company undertakes no obligation to update any
forward-looking statement to reflect events or circumstances after the date on
which such statement is made or to reflect the occurrence of unanticipated
events.
Certain written and oral statements made or incorporated by reference from time
to time by the Company in this report, other reports, filings with the
Securities and Exchange Commission, press releases, conferences, or otherwise,
contain "forward looking information" and are "forward looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include, without limitation, any statement that may
predict, forecast, indicate or imply future results, performance or
achievements. Forward-looking statements may be identified, without limitation,
by the use of such words as "anticipates", "estimates", "expects", "intends",
"plans", "predicts", "projects", "believes", or words or phrases of similar
meaning. Forward-looking statements include risks and uncertainties which could
cause actual results or outcomes to differ materially from those expressed in
the forward-looking statements. In addition to other factors and matters
discussed elsewhere herein, some of the important facts that could cause actual
results to differ materially from those discussed in the forward-looking
statements include the following: changes in general economic conditions in
York's major geographic markets; occurrences of weather-related, natural and
man-made disasters, changes in overall employment levels and associated injury
rates in the United States; changes in the degree to which property and casualty
insurance carriers outsource their claims handling functions; decisions by major
-6-
insurance carriers and underwriters and brokers to expand their activities as
third party administrators and adjusters, which would directly compete with
York's business; the ability to identify new revenue sources not directly tied
to the insurance underwriting cycle; the growth of alternative risk programs and
the use of independent third party administrators such as York, as opposed to
administrators affiliated with brokers or insurance carriers; ability to develop
or acquire information technology resources to support and grow York's business;
the ability to recruit, train and retain qualified personnel; the renewal of
existing major contracts with clients and York's ability to obtain such renewals
and new contracts on satisfactory financial terms and the creditworthiness of
its major clients; changes in accounting principles or application of such
principles to York's business; and any other factors referenced or incorporated
by reference in this report and any other publicly filed report. The risks
included above are not exhaustive.
Other sections of this report may include reference to the additional factors
which could adversely impact the Company's and York's business and financial
performance. Moreover, the Company and York operate in a very competitive and
rapidly changing environment. New risk factors emerge from time to time, and it
is not possible for management to predict all such risk factors, nor can it
assess the impact of known risk factors on the Company and York's business or
the extent to which any factor or combination of factors may cause actual
results to differ materially from those contained in any forward-looking
statement. The Company undertakes no obligation to revise or publicly release
the results of any revisions to forward-looking statements or to identify any
new risk factors which may arise. Given these risks and uncertainties, investors
should not place undue reliance on forward-looking statements as a prediction of
actual future results.
Investors should also be aware that while the Company does, from time to time,
communicate with securities analysts, it is against the Company's policy to
disclose to them any material, non-public information. Accordingly, investors
should not assume that the Company agrees with any statement or report issued by
any analyst irrespective of the content of the statement or report. Furthermore,
the Company has a policy against issuing or confirming financial forecasts or
projections issued by others. Thus, to the extent that the reports issued by
securities analysts contain any projections, forecasts, or opinions, such
reports are not the responsibility of the Company.
Item 2. Description of Property
The principal office of the Company is located at 11 Hanover Square, New York,
New York 10005. The Company shares this office space of 3,800 square feet (and
various administrative and other support functions) with Winmill & Co.
Incorporated, Tuxis Corporation, and their affiliates (the "Affiliates") and
pays an allocated cost based on an estimated assessment of use and other
factors. The Company is expected to reimburse the Affiliates for this office
space and for the year ended December 31, 2004 and 2003, the Company charged
operations approximately $30,200 and $28,600 respectively.
Item 3. Legal Proceedings
From time to time, the Company and/or its subsidiaries are threatened or named
as defendants in litigation arising in the normal course of business. As of
December 31, 2004, neither the Company nor any of its subsidiaries was involved
in any litigation that, in the opinion of management, would have a material
adverse impact on the consolidated financial statements.
-7-
Item 4. Submission of Matters to a Vote of Security Holders
No matter was submitted to a vote of security holders during fourth quarter of
the year covered by this report.
-8-
PART II
Item 5. Market for the Company's Common Equity, Related Stockholder Matters
and Small Business Issuer Purchases of Equity Securities
The Company's Common Stock trades on the American Stock Exchange under the
symbol BXL. There are approximately 223 holders of record of Common Stock as of
December 31, 2004. In addition, there are an indeterminate number of beneficial
owners of Common Stock that are held in "street name." No dividends were paid on
the Common Stock in the past year and the Company does not expect to pay any
such dividends in the foreseeable future. The high and low sales prices of the
Common Stock during each quarterly period over the last two years were as
follows:
2004 2003
---------------------- ---------------------
High Low High Low
First Quarter $27.8500 $16.1000 $12.1200 $10.1000
Second Quarter $25.2000 $17.6500 $15.3200 $10.5900
Third Quarter $18.2500 $15.2500 $16.3400 $13.2300
Fourth Quarter $17.7500 $15.7500 $16.2000 $15.3800
Equity Compensation Plan Information
Number of
Weighted- Shares
Number of average exercise remaining available
shares to be issued price of outstanding for future issuance
upon exercise of options, warrants under equity
outstanding options and rights compensation plans
Equity Compensation Plans
approved by security holders 143,000 $21.47 32,918
Equity Compensation Plans not
approved by security holders - - -
------- ------ ------
Total 143,000 $21.47 32,918
======= ====== ======
Purchases of Equity Securities By The Issuer
None
-9-
Critical Accounting Estimates
Impairment of Goodwill
The company initially recorded $1,500,000 of goodwill relating to the investment
of York. The company reviews goodwill for impairment annually. As part of this
review the Company considers financial performance, legal factors, business
climate, potential action by regulators, etc. The company believes there has
been no impairment of goodwill as of December 31, 2004.
Fair Value Accounting
The Fair Value Accounting policy, applied to years 2003 and prior, when the
Company was under the Investment Company Act of 1940. The primary assets for
which no market quotations existed in 2003 were the company's investments in
York and Safety Intelligence Systems. These assets comprise a majority of the
Company's total assets. In management's opinion, the other assets and other
liabilities historical costs were deemed to approximate fair value. As a general
principle, the current "fair value" of an asset would be the amount the Company
might reasonably expect to receive for it upon its current sale, in an orderly
manner. There is a range of values that are reasonable for such assets at any
particular time. Generally, cost at purchase, which reflects an arm's length
transaction, is the primary factor used to determine fair value until
significant developments affecting the holding (such as result of operations or
changes in general market conditions) provide a basis for use of an appraisal
valuation. Appraisal valuations are based upon such factors as book value,
earnings, cash flow, the market prices for similar securities of comparable
companies, an assessment of the company's current and future financial
prospects, stockholder agreements, and various other factors and assumptions,
such as discount rates, valuation multiples, and future growth projections.
Additional factors which might be considered include: financial standing of the
issuer; the business and financial plan of the issuer and comparison of actual
results with the plan; size of position held and the liquidity of the market;
contractual restrictions on disposition; pending public offering with respect to
the financial instrument; pending reorganization activity affecting the
financial instrument (such as merger proposals, tender offers, debt
restructurings, and conversions); ability of the issuer to obtain needed
financing; changes in the economic conditions affecting the issuer; a recent
purchase or sale of a security of the issuer. In the case of unsuccessful
operations, the appraisal may be based upon liquidation value. Appraisal
valuations are necessarily subjective and management's estimate of values may
differ materially from amounts actually received upon the disposition of the
holding. The Board of Directors reviewed valuation methodologies on a quarterly
basis to determine their appropriateness and may also hire independent firms to
review management's methodology of valuation or to conduct an independent
valuation.
Item 6. Management's Discussion and Analysis or Plan of Operation
Bexil is a holding company. We have 10 employees. Our primary holding is a 50%
interest in privately held York Insurance Services Group, Inc. ("York").
The Company was incorporated under the laws of the State of Maryland as "Bull &
Bear U.S. Government Securities Fund, Inc." on August 30, 1996. The Company
registered as a investment company with the Securities and Exchange Commission
("SEC") by filing a Form N-8A and Form N-2 on September 27, 1996. On October 4,
1996, the Company's predecessor (a mutual fund which had commenced operations on
March 7, 1986 as a diversified series of shares of Bull & Bear Funds II, Inc.,
-10-
an open-end management investment company organized in 1974) transferred its net
assets to the Company in exchange for shares of the Company. Thus, since 1986,
the Company (including its predecessor) was regulated under the Investment
Company Act of 1940 (the "1940 Act"), and the rules and regulations promulgated
thereunder, and under the Company's fundamental investment policies contained in
its registration statement filed pursuant to the 1940 Act. The Company changed
its name to Bexil Corporation on August 26, 1999.
Effective with the Securities and Exchange Commission's order on January 6, 2004
declaring that the Company had ceased to be an investment company under Section
8(f) of the Investment Company Act of 1940, the Company changed its method of
accounting for its 50 percent interest in York from the fair value method to the
equity method. As a registered investment company, the Company recorded its net
assets at fair value (or market value). Upon de-registration, the Company
reported its assets and liabilities on a historical cost basis. In addition, the
Company changed its basis of accounting for its other investment from the fair
value to cost. Although de-registration occurred on January 6, 2004, for
simplicity the Company effected the change as of January 1, 2004 because
management deemed there to be no material change to fair value of its net assets
in the three business day period of 2004. Note, for all other assets and
liabilities, fair value approximated cost at the time of de-registration.
For 2004 the Company's 50% interest in York is accounted for using the equity
method and, therefore, York's financial statements are not consolidated with our
own. For 2003, inasmuch as the Company was a registered investment company at
that time, York is accounted for using the fair value method.
York Insurance Services Group, Inc. - Business
York is one of the leading privately owned insurance services business process
outsourcing ("BPO") companies in the United States. Since the 1930's, York,
through predecessor companies, has served as both an independent adjustment
company and third party administrator ("TPA") providing comprehensive claims,
data, and risk related services to insurance companies, self-insureds, and
intermediaries throughout the United States. More recently York has established
business units in the program management, licensed private investigation,
recovery, environmental consulting, retail logistics and large/complex loss
adjusting markets.
* * * *
Effective with a Securities and Exchange Commission order on January 6, 2004,
the Company ceased to be an investment company under Section 8(f) of the
Investment Company Act of 1940. As a registered investment company, the Company
recorded its net assets at fair value (or market value). Upon de-registration,
the Company reports its assets and liabilities on a historical cost basis.
Although de-registration occurred on January 6, 2004, for convenience the
Company affected the change as of January 1, 2004 because management deemed
there to be no material change to fair value of its net assets in the three
business day period of 2004. Consequently, the Company changed its method of
accounting for its 50 percent interest in York from the fair value method to the
equity method. In addition, the Company changed its basis of accounting for its
other investment from the fair value to cost. Note, for all other assets and
liabilities, fair value approximated cost at the time of de-registration. As
such; no additional transition adjustments were required. This transition
resulted in a change in accounting, as described in Note 2 of the financial
statements, that impacts the comparability of the 2004 and 2003 financial
statements.
-11-
2004 Compared to 2003
For the year ended December 31, 2004 compared to the year ended December 31,
2003, the Company's total revenues of $167,160 decreased $5,242,322 from
$5,409,482 and equity earnings (net of taxes) of $2,812,088 were recognized in
2004 and not in 2003, due to an accounting change from fair value accounting to
equity method accounting as discussed in the paragraph above. Interest and
dividends decreased by $115,295 primarily due to lower interest rates and lower
investable assets. Other income increased $105,108 due to $100,000 in consulting
fees earned from York during 2004.
Total expenses of $1,026,757 increased $307,585 or 42.8%. General and
administrative expenses increased $238,058 or 41.4% primarily due to higher
employee costs. Professional fees of $182,796 were $73,391 higher than those in
2003 due to higher legal costs arising out of the adoption of the 2004 Long Term
Incentive Plan and unanticipated higher auditing fees. Communication expense
declined $3,728 or 11.3% from $34,212. The effective tax rate applicable to the
deferred income tax expense is significantly lower under the equity method of
accounting due to the benefit of the 80% dividend receive exclusion.
For the reasons described above, relating to the change in accounting method,
net income for the year ended December 31, 2004 was $2,219,785 or $2.52 per
share on a diluted basis as compared to net income of $2,483,069 or $2.84 per
share on a diluted basis for the twelve months ended December 31, 2003.
Liquidity and Capital Resources
The following table reflects the Company's consolidated working capital, total
assets, long-term debt and shareholders' equity as of the dates indicated.
December 31,
2004 2003
---- ----
Working Capital $ 3,402,659 $ 4,318,571
Total Assets $15,114,564 $20,542,310
Long-Term Debt $ - $ -
Shareholders' Equity $14,870,744 $15,148,085
For the year ended 2004, working capital decreased $915,612 primarily due to
cash used in operating activities. Total assets and shareholders' equity
decreased $5,427,746 and $277,341, respectively, due to an accounting change.
Refer to footnote number 2. The main components of cash flow activity for 2004
was $4,300,000 maturity of a US Treasury Bill which matured during the first
quarter of 2004. Primarily offsetting this was cash used for operating
activities. Overall, there was a net increase in cash and cash equivalents of
$3,401,701 at December 31, 2004.
Management knows of no contingencies that are reasonably likely to result in a
material decrease in the Company's liquidity or that are likely to materially
adversely affect the Company's capital resources.
-12-
The 2003 financial statement information filed with the 2004 Forms 10QSB as of
and for the periods ended March 31, 2004, June 30, 2004 and September 30, 2004
were retroactively restated from that filed during 2003 as a result of
management's original application of APB No. 20. In connection with the
preparation of its 2004 annual financial statements for inclusion in this Form
10KSB, management determined that such application of APB No. 20 was not
appropriate under the circumstances. Instead, the accounting impact of the
change in corporate form resulting from the de-registration should be treated as
a change in accounting principle in accordance with APB No. 20. As such,
applicable APB No. 20 guidance requires a cumulative effect adjustment as of the
date of the accounting change (in this case the effective date of the change is
January 1, 2004) instead of a retroactive restatement of prior periods presented
as had previously been applied for the 2004 10QSB filings.
A comparison of the information included in the summary of operations for 2003
as filed in the 2004 10QSBs versus what would have been presented using the
appropriate application of APB No. 20 as described above follows:
First Second Third
Quarter Quarter Quarter
As Filed: 2003 2003 2003
-------------------------------
Net Income
as reported in 2004
as comparatives as a 1934
Act Company 812 282 445
Using Appropriate Application of APB -20:*
Summary financial information
as a 1940 Act Company
o Net Increase in net assets resulting
from operations 431 742 16
* The information presented follows that of the 1940 Act.
Note under the 1940 Act the First and Third quarters would
not have been filed.
For more information regarding the 10-QSB's above, refer to the actual
filings on 5/17/2004, 8/13/2004 and 11/15/2004.
Item 7. Financial Statements
Financial Statements required by Item 310(a) of Regulation S-B.
-13-
FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm
Balance Sheet
December 31, 2004
Statement of Income
Year ended December 31, 2004
Statement of Operations
Year ended December 31, 2003
Statement of Changes in Net Assets for the year ended December 31, 2003 and
Statement of Changes in Shareholders Equity for the year ended December 31,
2004
Statement of Cash Flows
Year ended December 31, 2004
Notes to Financial Statements
-14-
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of
Bexil Corporation
New York, NY
We have audited the accompanying balance sheet of Bexil Corporation as of
December 31, 2004, and the related statements of income, shareholders' equity,
and cash flows for the year ended December 31, 2004. 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
financial statements of the Company for the year ended December 31, 2003 were
audited by other auditors whose report, dated January 22, 2004, expressed an
unqualified opinion on those statements.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. An audit includes consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, 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, such financial statements present fairly, in all material
respects, the financial position of the Company at December 31, 2004, and the
results of its operations and its cash flows for the year then ended in
conformity with accounting principles generally accepted in the United States of
America.
As more fully described in Note 2 to the financial statements, in 2004 the
Company completed the process of de-registering as a filer under the Investment
Company Act of 1940 and now files in accordance with the Securities Exchange Act
of 1934. As a result, the financial statements for the period subsequent to the
de-registration are presented on a different basis of accounting than those for
periods prior to the de-registration and, therefore, are not directly
comparable.
/s/DELOITTE & TOUCHE LLP
June 14, 2005
Parssippany, NJ.
-15-
BEXIL CORPORATION
BALANCE SHEET AS OF DECEMBER 31, 2004
ASSETS
Current Assets:
Cash and cash equivalents $ 3,601,311
Receivables, prepaid assets and other 45,168
---------------
Total Current Assets 3,646,479
---------------
Fifty percent interest in unconsolidated affiliate (Note 8) 9,423,487
Goodwill (Note 8) 1,500,000
Other investments (Note 3) 326,605
Deferred taxes 217,993
--------------
11,468,085
Total Assets $ 15,114,564
==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued liabilities $ 243,820
--------------
Total Current Liabilities 243,820
Commitments and Contingencies (Note 9) -
Total Liabilities 243,820
--------------
Shareholders' Equity (Notes 3 and 4)
Common Stock, $0.01 par value
10,000,000 shares authorized
879,591 shares issued and outstanding 8,796
Additional paid-in capital 12,642,163
Retained earnings 2,219,785
--------------
Total Shareholders' Equity 14,870,744
--------------
Total Liabilities and Shareholders' Equity $ 15,114,564
==============
See accompanying notes to the financial statements.
-16-
BEXIL CORPORATION
STATEMENT OF INCOME FOR YEAR ENDED DECEMBER 31, 2004
Revenues:
Interest and dividends $ 51,052
Other (Note 7) 116,108
--------
167,160
Expenses:
General and administrative (Note 7) 813,613
Communication costs 30,348
Professional fees 182,796
-------
1,026,757
Loss before income taxes and equity in earnings of
York Insurance Services Group, Inc. (859,597)
Income tax benefit (Note 6) (267,294)
Equity in earnings of York Insurance Services
Group, Inc. 2,812,088
---------
Net income $ 2,219,785
===========
Per share net income:
Basic $ 2.52
Diluted $ 2.52
Weighted average common shares outstanding:
Basic 879,591
Diluted 879,591
See accompanying notes to the financial statements.
-17-
BEXIL CORPORATION
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2003(Predecessor Basis)
INCOME:
Interest $166,349
Other 11,000
----------
Total income 177,349
EXPENSES:
Salaries 430,100
Professional 109,405
Directors 35,440
Printing 26,358
Transfer Agent 11,625
Registration 7,867
Custodian 380
Other 97,997
----------
Total operating expenses 719,172
----------
Net operating loss before income taxes (541,823)
Income tax benefit (note 7) 193,635
----------
Net operating loss (348,188)
----------
REALIZED AND UNREALIZED GAIN
(LOSS) ON HOLDINGS:
Net realized gain on holdings 30,093
Unrealized appreciation on holdings
during the period 5,202,040
Deferred tax expense (note 7) (2,400,876)
----------
Net realized and unrealized gain on holdings 2,831,257
-----------
Net increase in net assets resulting
from operations $2,483,069
==========
See accompanying notes to the financial statements.
-18-
Statement of Changes in Net Assets for the year ended December 31, 2003
(Predecessor Basis) and Statement of Changes in Shareholders Equity for the year
ended December 31, 2004
2003
(Predecessor Basis)
OPERATIONS FOR 2003
Net loss $ (348,188)
Net Unrealized gain from security transactions 30,093
Unrealized appreciation on Holdings during the period 2,801,164
--------------
Net Change in net assets resulting from operations
2,483,069
DISTRIBUTIONS TO SHAREHOLDERS FOR 2003
Tax return of capital to shareholders ($0.60 per share) (522,612)
CAPITAL SHARE TRANSACTIONS FO R2003
Increase in net assets resulting from reinvestment of distributions (14,530 shares) 201,417
--------------
Total Change in Net Assets 2,161,874
NET ASSETS
Balance as of January 1, 2003 12,986,211
--------------
Balance as of December 31, 2003 $ 15,148,085
==============
----- -----------------------------------------------------------------------------------------------------------------------------
2004
Net Assets to Allocate to Shareholders Equity as of January 1, 2004 $ 15,148,085
--------------
ADDITIONAL PAID IN CAPITAL
Allocated Balance as of January 1, 2004 (Predecessor Basis) 9,437,231
Transitional Adjustment from Asset Value Under Predecessor Basis (2,497,127)
Adjustment for Predecessor Retained Earnings 5,702,059
--------------
Balance as of December 31, 2004
12,642,163
COMMON STOCK
Allocated Balance as of January 1, 2004 (879,591 shares, $0.01 par) (Predecessor Basis) 8,796
-------------
Par Value of Common Stock December 31, 2004 (879,591 shares, $.01 par)
8,796
RETAINED EARNINGS
Allocated Balance as of January 1, 2004 (Predecessor Basis) 5,702,059
Reclassification for Predecessor Basis (5,702,059)
Net Income 2,219,785
--------------
Balance as of December 31, 2004
2,219,785
--------------
TOTAL SHAREHOLDERS EQUITY AS OF DECEMBER 31, 2004 $ 14,870,744
==============
See accompanying notes to the financial statements.
-19-
BEXIL CORPORATION
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2004
Cash Flows from Operating Activites
Net income $ 2,219,785
-----------
Adjustments to reconcile net income to net cash
used in operating activities:
Equity in earnings of subsidiary (3,020,550)
Increase (decrease) in deferred income taxes (95,006)
Net realized gain on investments (3,417)
(Increase)decrease in:
Receivables, prepaid assets and other 4,282
Decrease in:
Accounts payable and accrued liabilities (1,779)
-------
Total adjustments (3,116,470)
-----------
Net cash used in operating activities (896,685)
-----------
Cash Flows from Investing Activites:
Maturity of investments 4,300,000
Purchase of investments (1,605)
-----------
Net cash provided by investing activities 4,298,395
-----------
Cash Flows from Financing Activities:
Cash dividend distribution and reinvestment -
Net cash used for financing activities -
Net increase (decrease) in cash and cash equivalents 3,401,710
Cash and Cash Equivalents
At beginning of period 199,601
------------
At end of period $ 3,601,311
============
See accompanying notes to the financial statements.
Supplemental disclosure: The Company paid no Federal income tax for the years
ended December 31, 2004
As a result of the change in corporate form from a 1940 Act filer to a 1934 Act
filer, there was a non-cash transitional adjustment. For more information refer
to Note2.
-20-
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
Bexil Corporation, a Maryland corporation ("we," "us" or the "Company), is a
holding company. We have 10 employees. Our primary holding is a 50% interest in
privately held York Insurance Services Group, Inc. ("York"). Our 50% interest in
York is accounted for using the equity method during 2004. and, therefore,
York's financial statements are not consolidated with our own. In 2003 and
prior, the investment in York was accounted for on a fair value basis. For
further information on this change in accounting, refer to Note 2.
The Company was incorporated under the laws of the State of Maryland as "Bull &
Bear U.S. Government Securities Fund, Inc." on August 30, 1996. The Company
registered as a investment company with the Securities and Exchange Commission
("SEC") by filing a Form N-8A and Form N-2 on September 27, 1996. On October 4,
1996, the Company's predecessor, a mutual fund which had commenced operations on
March 7, 1986 as a diversified series of shares of Bull & Bear Funds II, Inc.,
an open-end management investment company organized in 1974, transferred its net
assets to the Company in exchange for shares of the Company. Thus, since 1986,
the Company (including its predecessor) was regulated under the Investment
Company Act of 1940 (the "1940 Act"), and the rules and regulations promulgated
there under, and under the Company's fundamental investment policies contained
in its registration statement filed pursuant to the 1940 Act. The Company
changed its name to Bexil Corporation on August 26, 1999.
On January 6, 2004 the Company announced that an order declaring that it has
ceased to be an investment company was issued by the SEC. The order was
effective immediately. We are currently a publicly-held company listed on the
American Stock Exchange subject to the reporting and other requirements of the
Securities Exchange Act of 1934, as amended, and are no longer subject to
regulation under the 1940 Act.
York Insurance Services Group, Inc. - Business
York is one of the leading privately owned insurance services business process
outsourcing ("BPO") companies in the United States. Since the 1930's, York,
through predecessor companies, has served as both an independent adjustment
company and third party administrator ("TPA") providing comprehensive claims,
data, and risk related services to insurance companies, self-insureds, and
intermediaries throughout the United States. More recently York has established
business units in the program management, licensed private investigation,
recovery, environmental consulting, retail logistics and large/complex loss
adjusting markets.
Basis of Presentation
As more fully described in Note 2 to the financial statements, in 2004 the
Company completed the process of de-registering as a filer under the Investment
Company Act of 1940 and now files in accordance with the Securities Exchange Act
of 1934. As a result, the financial statements for the period subsequent to the
de-registration present assets and liabilities on a historical cost basis,
whereas prior to de-registration, assets and liabilities were presented on a
fair value basis under the 1940 Act.
-21-
This change in accounting prevents the financial statements for 2004 and 2003
from being directly comparable.
The financial statements include the accounts of the Company. In preparing
financial statements in conformity with generally accepted accounting
principles, management makes estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements, as
well as the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Cash and Cash Equivalents
Investments in money market funds are considered to be cash equivalents. At
December 31, 2004, the Company had invested approximately $3,092,700 in a money
market fund. The company considers short-term investments and other marketable
securities maturing in 90 days to be considered cash equivalents.
Investment in Unconsolidated Affiliate
Our 50% interest in our unconsolidated affiliate, York, is accounted for using
the equity method during 2004 and therefore York's financial statements are not
consolidated with our own. In 2003 and prior, the investment in York was
accounted for on a fair value basis. Refer to Note 2.
Marketable Securities
The Company classified its investment in U.S. Treasury Notes as held-to-maturity
securities since the Company had the positive intent and ability to hold to
maturity, and accordingly these securities were recorded at amortized cost. In
2003 and prior, the notes were accounted under the fair value method under the
Investment Company Act of 1940. The U.S. Treasury notes matured during the first
quarter of 2004. The Company's other material investment in marketable
securities is in common stock of a non-public entity with no readily available
market price, and accordingly this security was carried at the lower of cost or
estimated net realizable value. During the year ended December 31, 2003 this
investment was accounted for at fair value.
Goodwill
The company initially recorded $1,500,000 of goodwill relating to the investment
of York. The company reviews goodwill for impairment annually. As part of this
review the Company considers financial performance, legal factors, business
climate, potential action by regulators, etc. The company believes there has
been no impairment of goodwill as of December 31, 2004.
Income Taxes
The Company's method of accounting for income taxes conforms to Statement of
Financial Accounting Standards No. 109 "Accounting for Income Taxes." This
method requires the recognition of deferred tax assets and liabilities for the
expected future tax consequences of temporary differences between the financial
reporting basis and the tax basis of assets and liabilities. The company
assesses the need for a valuation allowance on recorded deferred tax assets.
-22-
Reporting Segment
The Company's operations are organized around insurance services and classified
into one reporting segment - insurance services. The chief operating decision
maker reviews and considers the consolidated reports of York as the key decision
making information.
Earnings Per Share
Basic earnings per share is computed using the weighted average number of shares
outstanding. Diluted earnings per share is computed using the weighted average
number of shares outstanding adjusted for the incremental shares attributed to
potentially diluted securities including outstanding options to purchase common
stock. The following table sets forth the computation of basic and diluted
earnings per share:
2004 2003
---- ----
Numerator for basic and diluted earnings per share:
Net income $ 2,219,785 $ 2,483,069
=========== ===========
Denominator:
Denominator for basic
earning per share:
Weighted-average shares 879,591 873,016
Effect of dilutive securities:
Employee stock options * - -
----------- -----------
Denominator for diluted earnings per share:
adjusted weighted-average shares
and assumed conversion 879,591 873,016
=========== ===========
*Does not include 143,000 employee stock options issued in 2004 because they
were anti-dilutive. No options were issued in 2003.
The Company applies APB Opinion 25 and related interpretations in accounting for
its stock option plan. Accordingly, no compensation cost has been recognized for
its stock option plan. Pro forma compensation cost for the Company's plan is
required by Financial Accounting Standards No. 123 "Accounting for Stock-Based
Compensation" ("SFAS 123") and has been determined based on the fair value at
the grant dates for awards under the plan consistent with the method of SFAS
123. For purposes of pro forma disclosure, the estimated fair value of the
options is amortized to expense over the options' vesting period. The fair value
of each option grant is estimated as of the date of grants using the Black-
Scholes option-pricing model with the following weighted average assumptions
used for grants in 2004; average volatility of 48%; risk-free interest rate of
2.7%; expected life of 3 years; and, no dividends. The Company's pro forma
information follows:
-23-
2004 2003
---- ----
Net income as reported $ 2,219,785 $ 2,483,069
Plus: Compensation expense
recorded against income - -
Deduct: Total stock-based employee
expense determined under fair
value method for all awards, net
of related tax effects (580,665) -
------------ -----------
Pro forma net income $ 1,639,120 $ 2,483,069
============ ===========
Earning per share
Basic As reported $ 2.52 $ 2.84
Basic Pro forma $ 1.86 $ 2.84
Diluted As reported $ 2.52 $ 2.84
Diluted Pro forma $ 1.86 $ 2.84
Management's Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Estimates are primarily used in the determination of
goodwill, investment impairment and expenses allocation. Actual results may
differ from those estimates.
Emerging Accounting Standards
On December 16, 2004, the FASB issued Statement No. 123 (Revised 2004),
Share-Based Payment. This statement requires all entities to recognize
compensation expense in an amount equal to the fair value of share-based
payments (e.g., stock options and restricted stock) granted to employees. This
standard is effective for public companies in interim or annual periods
beginning after December 15, 2005. We are currently in the process of assessing
the impact that the adoption of this standard will have on our financial
statements.
2. CHANGE IN ACCOUNTING PRINCIPLE
Effective with a Securities and Exchange Commission order on January 6, 2004,
that the Company ceased to be an investment company under Section 8(f) of the
Investment Company Act of 1940. As a registered investment company, the Company
recorded its net assets at fair value (or market value). Upon de-
-24-
registration, the Company reports its assets and liabilities on a historical
cost basis. Although de-registration occurred on January 6, 2004, for
convenience the Company affected the change as of January 1, 2004 because
management deemed there to be no material change in either the fair value or
historical cost of its net assets in the three business day period from January
1 to January 6, 2004.
As a consequence of the de-registration, the Company changed its method of
accounting for its 50 percent interest in York from the fair value method to the
equity method. In addition, the Company changed its basis of accounting for its
other investment from fair value to cost. Note, for all other assets and
liabilities, fair value approximated cost at the time of de-registration. As
such, no additional transition adjustments were required.
The cumulative transitional adjustment made to Additional paid in capital is as
follows:
Opening Retained Earnings January 1, 2004 $ 5,702,060
Effect for the change in accounting as follows:
York Investment
-Equity accounted at January 1, 2004 6,402,936
-Goodwill accounted at January 1, 2004 1,500,000
-Fair Valued at December 31, 2003 (15,695,280)
-----------
Net accounting change (7,792,344)
Deferred tax charge related to fair value accounting 5,712,876
Deferred tax charge related to equity method of York (441,265)
Other Investments 23,606
-----------
Total $3,204,932
===========
3. OTHER INVESTMENTS
As of December 31, 2004, other investments consisted of the following:
Cost Market Value
---- ------------
Common stock of non-public entity* 325,000 *
Other 1,605 1,726
----------
Total $ 326,605
==========
* No readily determinable market value. A valuation committee meets on
a quarterly basis to determine if there is any asset impairment, by reviewing
the most readily available information about the entity and private stock
transactions, if any. Based upon this analysis, management has concluded that
there is no impairment at December 31, 2004.
4. STOCK OPTIONS
On March 25, 2004, the Company's shareholders' approved the adoption of a
Long-Term Incentive Plan,
-25-
which provides for the granting of a maximum of 175,918 options to purchase
common stock to directors, officers and key employees of the Company or its
subsidiaries. The option price per share may not be less than the fair value of
such shares on the date the option is granted, and the maximum term of an option
may not exceed 5 years. The vesting period is three years of service.
The fair value of each option grant is estimated as of the date of grants using
the Black-Scholes option-pricing model with the following weighted average
assumptions used for grants in 2004; average volatility of 48%; risk-free
interest rate of 2.7%; expected life of 3 years; and, no dividends.
A summary of the status of the Company's stock option plans as of and for the
year ended December 31, 2004 are presented below:
Weighted
Number Average
Of Exercise
Stock Options Shares Price
------------- ---------- ----------
Outstanding at Decemeber 31, 2003 - $ -
Granted 147,500 $ 21.47
Expired (4,500) $ 21.59
December 31, 2004 143,000 $ 21.47
There were 92,952 options exercisable at December 31, 2004 with a
weighted-average exercise price of $20.63. The weighted average fair value of
options granted using the Black-Scholes option-pricing model was $2.36 for the
year ended December 31, 2004.
The following table summarized information about stock options outstanding at
December 31, 2004:
Options Outstanding Options Exercisable
Weighted-Average
Range of Number Remaining Weighted-Average Number of Weighted-Average
Exercise Prices Outstanding Contractual Life Exercise Price Stock Options Exercise Price
$16.30-$17.85 23,000 4.75 $16.50 21,000 $16.37
$21.59-$23.75 120,000 4.25 $22.42 71,952 $21.87
------------ -------------
143,000 4.33 $21.47 92,952 $20.63
============ =============
5. 401(K) PLAN
The Company has a 401(k) retirement plan for substantially all of its qualified
employees. Contributions to this plan are based upon a percentage of salaries of
eligible employees and are accrued and funded on a current basis. Total pension
expense for the years ended 2004 and 2003 was approximately $13,337 and $0
respectively.
-26-
6. INCOME TAXES
The provision (benefit) for income taxes for the year ended December 31,
2004 and 2003 is as follows:
2004 2003
---- ----
Current
Federal $ - -
State and local 36,175 30,615
--------- -----------
36,175 30,615
Deferred (303,469) 2,176,626
--------- -----------
$ (267,294) $ 2,207,241
========= ===========
Deferred taxes are comprised of the following as of December 31, 2004:
Net operating and capital loss carryforwards...........................$867,719
Equity in earnings of unconsolidated affiliate.........................(649,726)
----------
$217,993
The net operating loss carryforwards as of December 31, 2004 was $2,090,200 of
which $658,200 expires in 2022, $572,400 expires in 2023 and $859,600 expires in
2024.
Except for as noted below, there was no difference in 2004 and 2003 between the
effective tax rate and the statutory tax rate.
The provision for income taxes differs from the federal statutory income tax
rate as a result of the dividends received exclusion (80%) on the equity in
earnings of the unconsolidated affiliate.
7. RELATED PARTIES
Certain officers of the Company also serve as officers and/or directors of
Winmill & Co. Incorporated, Tuxis Corporation, and their affiliates (the
"Affiliates"). The Company shares office space and various administrative and
other support functions with the Affiliates and pays an allocated cost based on
an estimated assessment of use and other factors. The Company is expected to
reimburse the Affiliates for these costs and for the year ending December 31,
2004 and 2003, the Company charged operations approximately $124,000 and $96,000
respectively. In addition, the Company received $100,000 from York as consulting
fees in 2004.
-27-
8. INTEREST IN UNCONSOLIDATED AFFILIATE
York's summarized condensed consolidated financial information is as follows as
of and for the year ended December 31:
York Insurance Services Group, Inc.
--------------------------------------------------
2004 2003
-------------------- --------------------
Revenues $ 71,409,418 $ 52,759,165
Expenses $ 60,599,590 $ 43,329,222
Net income $ 6,041,101 $ 5,600,129
Working capital $ 14,141,537 $ 8,801,701
Total assets $ 35,454,522 $ 20,880,621
Long term debt $ 1,209,949 $ 2,046,509
Shareholder's equity $ 18,846,973 $ 12,805,872
York is a 50% owned unconsolidated affiliate accounted for by the equity method.
The Company's cost of its 50% interest in York exceeds the underlying equity in
net assets as follows during 2004.
Fifty percent interest in unconsolidated affiliate $10,923,487
Equity in net assets of York 9,423,487
-------------
Goodwill $ 1,500,000
Although in accordance with Financial Accounting Standards No. 142 ("SFAS 142"),
the equity method goodwill of $1,500,000 is not amortized. The goodwill balance
is reviewed for impairment annually for changes in events or circumstances that
would impair the valuation. The aggregate equity method interest in York of
$9,423,487 at December 31, 2004 is reviewed for impairment at least annually in
accordance with FAS 142.
9. CONTINGENCIES
From time to time, Bexil is threatened or named as defendant in litigation
arising in the normal course of business. As of December 31, 2004, Bexil was not
involved in any litigation that, in the opinion of management, would have a
material adverse impact on its financial statements.
-28-
Item 8. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
On January 13, 2005, the Audit Committee (the "Committee") of the Board of
Directors of the Company unanimously voted to recommend to the Board that the
resignation of Tait, Weller & Baker ("Tait") as the Company's independent
registered public accounting firm be accepted, effective upon the appointment by
the Company of successor auditors. The Committee further recommended to the
Board that the appointment of Deloitte & Touche LLP ("Deloitte") as the
independent registered public accounting firm for the Company be approved,
effective upon the successful completion of Deloitte's client acceptance
procedures. Also on January 13, 2005, the Board of Directors of the Company
approved such recommendations.
On April 18, 2005, the Company announced the successful completion of Deloitte's
client acceptance procedures.
Tait's report on the Company's financial statements for the fiscal years ended
December 31, 2003 and December 31, 2002 did not contain an adverse opinion, a
disclaimer of opinion, or any qualification or modifications as to uncertainty,
audit scope or accounting principles. During the Company's fiscal years ended
December 31, 2003 and December 31, 2002, and through the date of termination of
the engagement, there were no disagreements with Tait on any matter of
accounting principles or practices, financial statement disclosure or auditing
scope or procedure which, if not resolved to the satisfaction of Tait, would
have caused Tait to make reference to the subject matter of the disagreement in
connection with its report.
During the fiscal years ended December 31, 2003 and December 31, 2002 and
through the date of termination of the engagement, there have been no reportable
events as defined in Item 304(a)(1)(iv) of Regulation S-B promulgated by the
Securities and Exchange Commission (the "Commission").
The Company has not consulted with Deloitte during the fiscal years ended
December 31, 2003 and December 31, 2002, nor during the subsequent period to the
date of its engagement regarding either the application of accounting principles
to a specified transaction, either completed or proposed, or the type of audit
opinion that might be rendered on the Company's financial statements.
Item 8A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The Company maintains disclosure controls and procedures that are designed to
ensure that information required to be disclosed in the Company's reports filed
under the Securities Exchange Act of 1934 is recorded, processed, summarized and
reported within the time periods specified in the SEC's rules and forms, and
that such information is accumulated and communicated to the Company's
management, including its President and Chief Executive Officer and Principal
Financial Officer, or persons performing similar functions, as appropriate, to
allow timely decisions regarding required disclosure. Management necessarily
applied its judgment in assessing the costs and benefits of such controls and
procedures which, by their nature, can provide only reasonable assurance
regarding management's control objectives. Management, including the Company's
President and Chief Executive Officer along with the Company's Principal
Financial Officer, concluded that the Company's disclosure controls and
procedures are effective
-29-
in reaching the level of reasonable assurance regarding management's control
objectives.
The Company has carried out an evaluation, under the supervision and with the
participation of the Company's management, including the Company's President and
Chief Executive Officer along with the Company's Principal Financial Officer, of
the effectiveness of the design and operation of the Company's disclosure
controls and procedures pursuant to Exchange Act Rule 13a-15(b). Based upon the
foregoing, as of the end of the period covered by this report, the Company's
President and Chief Executive Officer along with the Company's Principal
Financial Officer, or persons performing similar functions, concluded that the
Company's disclosure controls and procedures are effective in timely alerting
them to material information relating to the Company required to be included in
the Company's Exchange Act reports.
Changes in Internal Controls
There has been no change during the Company's fiscal quarter ended December 31,
2004 in the Company's internal control over financial reporting that was
identified in connection with the foregoing evaluation which has materially
affected, or is reasonably likely to materially affect, the Company's internal
control over financial reporting.
Item 8B. Other Information.
n/a
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons
of the Registrant;
The following list contains the names, ages, positions and lengths of service of
all directors and executive officers of the Company.
Name Position Years of Service Age
---- -------- ---------------- ---
Director Officer
-------- -------
Bassett S. Winmill Chairman of the Board 9 9 75
Thomas B. Winmill, Esq. President, Chief Executive Officer, 9 9 45
General Counsel, Director
-30-
Edward G. Webb, Jr. Director 1 - 66
Charles A. Carroll Director 1 - 74
Douglas Wu Director 8
William G. Vohrer Treasurer, Chief Financial Officer, - 4 54
Chief Accounting Officer
Monica Pelaez, Esq. Vice President, Chief Compliance Officer
Secretary, Associate General Counsel - 5 33
Set forth below is a description of the business experience of the directors and
executive officers of the Company during the past five years.
BASSETT S. WINMILL - Chairman of the Board of the Company, as well as Tuxis
Corporation and Global Income Fund, Inc. and of Winmill & Co. Incorporated
("WCI") and certain of its affiliates. Mr. Winmill is a member of the New York
Society of Security Analysts, the Association for Investment Management and
Research, and the International Society of Financial Analysts. Mr. Winmill was
born on February 10, 1930. He is the father of Thomas B. Winmill.
THOMAS B. WINMILL, ESQ. - President, Chief Executive Officer, General Counsel
and Director of the Company as well as Foxby Corp., Global Income Fund,Inc.,
Midas Fund, Inc., Midas Special Equities Fund, Inc., and Midas Dollar Reserves,
Inc. and of WCI and certain of its affiliates. Mr. Winmill is General Counsel of
Tuxis Corporation. Mr. Winmill is a member of the New York State Bar and the SEC
Rules Committee of the Investment Company Institute. Mr. Winmill was born on
June 25, 1959. He is the son of Bassett S. Winmill.
EDWARD G. WEBB, JR. - Equity Portfolio Manager for Advanced Asset Management
Advisers, Inc. since October 2002. Mr. Webb was President of Webb Associates,
Ltd. from 1996 to 2004. Prior to that, he served as a Senior Vice President and
Director of WCI. Mr. Webb was born on March 31, 1939.
CHARLES A. CARROLL - From 1989 to the present, Mr. Carroll has been affiliated
with Kalin Associates, Inc., a member firmof the New York Stock Exchange. Mr.
Carroll was born on December 18, 1930.
DOUGLAS WU - Since 1998, Mr. Wu has been a Principal of Maxwell Partners, prior
to which, he was a Managing Director of Rothschild Emerging Markets/Croesus
Capital Management. Mr. Wu is a director of York Insurance Services Group, Inc.
Mr. Wu was born on July 31, 1960.
WILLIAM G. VOHRER - Treasurer, Chief Financial Officer and Chief Accounting
Officer since 2001. He is also Chief Financial Officer and Treasurer of Tuxis
Corporation, Foxby Corp., Global Income Fund, Inc., Midas Fund, Inc., Midas
Special Equities Fund, Inc., and Midas Dollar Reserves, Inc. and of WCI and
certain of its affiliates. From 1999 to 2001, he consulted on accounting
matters. From 1994 to 1999 he was Chief Financial Officer and Financial
Operations Principal for Nafinsa Securities, Inc., a Mexican Securities
broker/dealer. From 1978 to 1994, he held Chief Financial Officer/Controller
positions with various international banks. Mr. Vohrer was born on August 17,
1950.
MONICA PELAEZ, ESQ. - Vice President, Chief Compliance Officer, Secretary and
Associate General Counsel. She is also Vice President, Secretary and Chief
Compliance Officer of Tuxis Corporation, Foxby Corp., Global Income Fund, Inc.,
Midas Fund, Inc., Midas Special Equities Fund, Inc., and Midas Dollar Reserves,
Inc. and of WCI and certain of its affiliates. Previously, she was Special
Assistant Corporation Counsel to New York City Administration for Children's
Services from 1998 to 2000. She earned her Juris Doctor from St. John's
University School of Law in 1997. She is a member of the New York State Bar. Ms.
Pelaez was born on November 5, 1971.
-31-
The Company has a standing Audit Committee that consists of Charles A. Carroll,
Edward G. Webb and Douglas Wu, each of whom has been determined by the Company's
board of directors to be an audit committee financial expert and "independent"
as that term is used in Item 7(d)(3)(iv) of Schedule 14A under the Exchange Act.
The Company has adopted a Code of Conduct and Ethics, adopted pursuant to
American Stock Exchange Company Guide Section 807 and Regulation SB Item 406,
applies to all Bexil Corporation directors, officers and employees, as well as
to directors, officers and employees of each consolidated subsidiary of Bexil
Corporation. The Code of Ethics is posted on the Company's web site at
www.bexil.com.
Based solely on the information from Forms 3, 4, and 5 furnished to it, the
Company believes that the directors, officers, and owners of more than 10
percent of the Class A Common Stock of the Company have filed on a timely basis
reports required by Section 16(a) of the Securities Exchange Act of 1934 during
the most recent fiscal year.
Item 10. Executive Compensation
The following information and tables set forth the information required under
the Securities and Exchange Commission's executive compensation rules.
Summary Compensation Table
The following table sets forth compensation for the fiscal years ended December
31, 2004, 2003 and 2002 received by the Company's Chief Executive Officer. No
other executive officer of the Company serving at the end of fiscal year 2004
had total annual salary and bonus in fiscal year 2004 in excess of $100,000.
Annual Compensation Long-term compensation
--------------------------------- ------------------------------------------------------
Awards Payouts
------------- -------------
Other Securities Long-term
Annual Restricted underlying incentive All other
Compens- stock options/ plan Compensa-
Name and Principal Position Year Salary ($) Bonus sation ($) awards($) SARs (#) payouts ($) tion
--------------------------------------------------------------------------- -------------------------------------------------------
Thomas B Winmill 2004 300,000 35,000 0 0 60,000 0 5,850 (1)
President and Chief 2003 250,000 30,000 0 0 0 0 0
Executive Officer 2002 150,000 200,000 0 0 0 0 0
(1) Represents a matching contribution to a 401(k) plan.
Option Grants Table
The following table sets forth, for the year ended December 31, 2004,
information regarding the options granted for each of the executive officers
named in the Summary Compensation Table.
-32-
Percentage Of Total
Number of Securities Options/SARs Granted Average
Underlying Options To Employees In Exercise Of Expiration
Name Granted Fiscal Year Base Price Date
----------------------- --------------------- --------------------- ------------ ------------
Thomas B. Winmill 60,000 43.20% $ 21.54 (a)
(a) 50,000 options expire 9/25/2009 and 10,000 options expire 11/10/2009
Aggregated Option/SAR Exercises and Fiscal Year-End Option/SAR Value Table
Shares Number of Securities Value of Unexercisable in-the-
acquired Value underlying/unexercised money options/SARs at
on excercise realized options/SARs at FY-end(#) FY-end($)Exercisable/
Name (#) ($) Excerciseable/Unexercisable Unexercisable
----------------------- ------------------------------------------------------------------------------------------
Thomas B. Winmill - 0.00% 41,476 / 18,524 0
Long-Term Incentive Plan Awards Table
There were no long-term incentive plan awards made during the year ended
December 31, 2004 to the executive officers named in the Summary Compensation
Table.
Compensation of Directors
Non-employee directors of the Company are compensated for services provided as a
director, as follows: $2,000 for each quarterly regular meeting attended; $500
as a retainer paid quarterly; $250 per special or telephonic meeting attended
and per meeting of a committee of a board attended (when not held near the time
of a regular meeting), except for the Governance, Compensation and Nominating
Committee which is $1,000 per annum; and, reimbursement for meeting expenses.
Options. Under the Plan, the Company's non-employee directors receive
non-qualified stock options for Company common stock. The Company will grant an
initial option for 1,000 shares of Company common stock on the effective date of
any non-employee director's initial election to the Board. The Company will also
grant an annual option for 1,000 shares of Company common stock to each
non-employee director at the close of business on the date of the Company's
annual stockholder meeting. These amounts are subject to adjustment for
corporate transactions. These option awards are the only type of awards that
non-employee directors of the Company are eligible to receive under the Plan.
The exercise price per share of non-employee director options will be equal to
100% of the fair market value of a share of Company common stock on the date of
grant and these options will expire at the earlier of (i) five years from the
date of grant or (ii) three months after the date the non-employee director
ceases to serve as a director of the Company for any reason. Non-employee
director options will vest at the end of a period commencing on the date of
grant and ending on a date which is the sooner of three years from the date of
grant date or three years from commencement of service to the Company, and if
the optionee has more than three years of service on the date of grant, the
options will vest immediately.
Other Arrangements. Mr. Douglas Wu also received $17,000 from York for his
services as a director of York in fiscal year 2004.
-33-
Employment Contracts
The Company has no employment or termination contracts with any of its
employees.
Item 11. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters
Securities Authorized For Issuance under Equity Compensation Plans
Securities authorized for issuance under equity compensation plans as of the end
of December 31, 2004 with respect to compensation plans (including individual
compensation arrangements) under which equity securities of the Company are
authorized for issuance, are aggregated as follows:
Equity Compensation Plan Information
------------------------------------
Plan category Number of securities to Weighted-average Number of securities remaining
be issued upon exercise exercise price of available for future issuance
of outstanding options, outstanding options, under equity compensation plans
warrants and rights warrants and rights (excluding securities reflected in
column (a))
(a) (b) (c)
------------------------------------------------------------------------------------------------------------------------
Equity compensation plans 143,000 $21.47 32,918
approved by security holders
------------------------------------------------------------------------------------------------------------------------
Equity compensation plans not 0 0 0
approved by security holders
------------------------------------------------------------------------------------------------------------------------
Total 143,000 $21.47 32,918
------------------------------------------------------------------------------------------------------------------------
Equity compensation plans not 0 0 0
approved by security holders
------------------------------------------------------------------------------------------------------------------------
Total 143,000 $21.47 32,918
------------------------------------------------------------------------------------------------------------------------
Security Ownership of Certain Beneficial Owners
The table below sets forth for person (including any "group") who is known to
the Company to be the beneficial owner of more than five percent of any class of
the Company's voting securities based on their Schedules 13D filed on April 5,
2004.
(1) Title of (2) Name and address of beneficial (3) Amount and nature of beneficial ownership (4) Percent of
class owner class
------------------------------------------------------------------------------------------------------------------------
Common Stock Bassett S. Winmill 53,648 shares.* Bassett S. Winmill has 5.80%
11 Hanover Square indirect beneficial ownership of 222,644 of
New York, New York 10005 these shares, as a result of his status as a
controlling person of Winmill & Co.
Incorporated and Investor Service Center, Inc.,
the direct beneficial owner. Mr. Winmill
disclaims beneficial ownership of the shares
held by Investor Service Center, Inc. Bassett
S. Winmill is Thomas B. Winmill's father.
------------------------------------------------------------------------------------------------------------------------
-34-
Common Stock Winmill & Co. Incorporated 222,644 shares. Winmill & Co. Incorporated has 25.31%
11 Hanover Square indirect beneficial ownership of these shares,
New York, New York 10005 as a result of its status as a controlling
person of Investor Service Center, Inc., the
direct beneficial owner
------------------------------------------------------------------------------------------------------------------------
Common Stock Investor Service Center, Inc. 222,644 shares 25.31%
11 Hanover Square
New York, New York 10005
------------------------------------------------------------------------------------------------------------------------
Common Stock Thomas B. Winmill 91,412 shares.** Thomas B. Winmill has 9.87%
11 Hanover Square indirect beneficial ownership of 26,712 of
New York, New York 10005 these shares held by his spouse and sons. Mr.
Winmill disclaims ownership of the shares held
by his spouse and sons. Bassett S. Winmill is
Thomas B. Winmill's father.
*This amount includes 46,107 shares with respect to which such person has the
right to acquire beneficial ownership as specified in Rule 13d-3(d)(1) under the
Exchange Act, including the right to acquire within sixty days, from options,
warrants, rights, conversion privilege or similar obligations.
**This amount includes 46,107 shares with respect to which such person has the
right to acquire beneficial ownership as specified in Rule 13d-3(d)(1) under the
Exchange Act, including the right to
acquire within sixty days, from options, warrants, rights, conversion privilege
or similar obligations.
Security Ownership of Management
(1) Title of (2) Name and address of beneficial (3) Amount and nature of beneficial ownership (4) Percent of
class owner class
------------------------------------------------------------------------------------------------------------------------
Common Stock Bassett S. Winmill 276,292 shares.(1) Bassett S. Winmill has 29.85%
11 Hanover Square indirect beneficial ownership of 222,644 of
New York, New York 10005 these shares, as a result of his status as a
controlling person of Winmill & Co.
Incorporated and Investor Service Center, Inc.,
the direct beneficial owner. Mr. Winmill
disclaims beneficial ownership of the shares
held by Investor Service Center, Inc. Bassett
S. Winmill is Thomas B. Winmill's father.
------------------------------------------------------------------------------------------------------------------------
Common Stock Thomas B. Winmill 91,412 shares.(2) Thomas B. Winmill has 9.87%
11 Hanover Square indirect beneficial ownership of 26,712 of
New York, New York 10005 these shares held by his spouse and sons. Mr.
Winmill disclaims ownership of the shares held
by his spouse and sons. Bassett S. Winmill is
Thomas B. Winmill's father.
------------------------------------------------------------------------------------------------------------------------
-35-
Common Stock Charles A. Carroll 3,200 shares.(3) 0.23%
11 Hanover Square
New York, New York 10005
------------------------------------------------------------------------------------------------------------------------
Common Stock Edward G. Webb, Jr. 1,500 shares.(4) 0.17%
11 Hanover Square
New York, New York 10005
------------------------------------------------------------------------------------------------------------------------
Common Stock Douglas Wu 2,000 shares.(5) 0.23%
11 Hanover Square
New York, New York 10005
------------------------------------------------------------------------------------------------------------------------
Common Stock William G. Vohrer 4,000 shares.(6) 0.45%
11 Hanover Square
New York, New York 10005
------------------------------------------------------------------------------------------------------------------------
Common Stock Monica Pelaez 4,000 shares.(7) 0.45%
11 Hanover Square
New York, New York 10005
------------------------------------------------------------------------------------------------------------------------
Common Stock Directors and executive officers as 382,404 shares.(8) 38.95%
a group
1. This amount includes 46,107 shares with respect to which such person has the
right to acquire beneficial ownership as specified in Rule 13d-3(d)(1) under the
Exchange Act, including the right to acquire within sixty days, from options,
warrants, rights, conversion privilege or similar obligations.
2. This amount includes 46,107 shares with respect to which such person has
the right to acquire beneficial ownership as specified in Rule 13d-3(d)(1) under
the Exchange Act, including the right to acquire within sixty days, from
options, warrants, rights, conversion privilege or similar obligations.
3. This amount includes 0 shares with respect to which such person has the right
to acquire beneficial ownership as specified in Rule 13d-3(d)(1) under the
Exchange Act, including the right to acquire within sixty days, from options,
warrants, rights, conversion privilege or similar obligations.
4. This amount includes 0 shares with respect to which such person has the right
to acquire beneficial ownership as specified in Rule 13d-3(d)(1) under the
Exchange Act, including the right to acquire within sixty days, from options,
warrants, rights, conversion privilege or similar obligations.
5. This amount includes 2,000 shares with respect to which such person has the
right to acquire beneficial ownership as specified in Rule 13d-3(d)(1) under the
Exchange Act, including the right to acquire within sixty days, from options,
warrants, rights, conversion privilege or similar obligations.
6. This amount includes 4,000 shares with respect to which such person has the
right to acquire beneficial ownership as specified in Rule 13d-3(d)(1) under the
Exchange Act, including the right to acquire within sixty days, from options,
warrants, rights, conversion privilege or similar obligations.
7. This amount includes 4,000 shares with respect to which such person has the
right to acquire beneficial ownership as specified in Rule 13d-3(d)(1) under the
Exchange Act, including the right to acquire within sixty days, from options,
warrants, rights, conversion privilege or similar obligations.
-36-
8. This amount includes 102,214 shares with respect to which directors and
executive officers as a group have the right to acquire beneficial ownership as
specified in Rule 13d-3(d)(1) under the Exchange Act, including the right to
acquire within sixty days, from options, warrants, rights, conversion privilege
or similar obligations.
Item 12. Certain Relationships and Related Transactions
Certain officers of the Company also serve as officers and/or directors of
Winmill & Co. Incorporated, Tuxis Corporation, and their affiliates (the
"Affiliates"). The Company shares office space and various administrative and
other support functions with the Affiliates and pays an allocated cost based on
an estimated assessment of use and other factors. The Company is expected to
reimburse the Affiliates for these costs and for the year ending December 31,
2004 and 2003, the Company charged operations approximately $124,000 and $96,000
respectively.
Item 13. Exhibits
(a) The following exhibits are incorporated as part of this 10KSB annual report:
3.1-1 Articles of Incorporation (the "Charter") of Bexil filed on 11/25/1996
as Exhibit A to Bexil's Registration Statement on Form N-2
(Registration No. 811-07833) ("Form N-2"), are hereby incorporated by
reference.
3.1-2 Articles of Amendment to the Charter filed on 11/25/1996 as Exhibit A
to Bexil's Post-Effective Amendment to Form N-2, are hereby
incorporated by reference.
3.1-3 Articles of Amendment to the Charter filed on 03/29/2004 as Exhibit
4-a-3 to Bexil's S-8, are hereby incorporated by reference.
3.1-4 Articles of Amendment to the Charter are filed herewith.
3.2 By-Laws filed on 03/29/2004 as Exhibit 4-b to Bexil's S-8, are hereby
incorporated by reference.
4.1-1 Specimen common stock certificate filed herewith.
4.1-2 Bexil's 2004 Incentive Compensation Plan effective as of March 24,
2004, included as Appendix A to Bexil's Proxy Statement for its 2004
Special Meeting of Stockholders, is hereby incorporated by reference.
4.1-3 Forms of Stock Option Agreements under Bexil's 2004 Incentive
Compensation Plan filed on 3/29/2004 as Exhibit 4-c-2 to Bexil's S-8,
are hereby incorporated by reference.
10.1-1 Stockholders Agreement among York Insurance Services Group, Inc.,
Thomas C. MacArthur, and Bexil filed as Exhibit C to Bexil's Form N-8F
on 12/05/2003, is hereby incorporated by reference.
10.1-2 By-Laws of York Insurance Services Group, Inc. filed as Exhibit D to
Bexil's Form N-8F on 12/05/2003, are hereby incorporated by reference.
-37-
16 Letter on change in certifying accountant. File the letter required by
Item 304(a)(3). Filed herewith.
21 Subsidiaries of the small business issuer filed herewith.
23. Consents of Independent Registered Public Accounting Firm.
Deloitte & Touche LLP. Filed herewith.
Tait, Weller & Baker Filed herewith.
24-1 Power of attorney -- Durable Power of Attorney of Charles A. Carroll
filed herewith.
24-2 Power of attorney -- Durable Power of Attorney of Edward G. Webb, Jr.
filed herewith.
24-3 Power of attorney -- Durable Power of Attorney of Bassett S. Winmill
filed herewith.
24-4 Power of attorney -- Durable Power of Attorney of Douglas Wu filed
herewith.
31.1 Certification of Chief Executive Officer Pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002. Filed herewith.
31.2 Certification of Chief Financial Officer Pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002. Filed herewith.
32.1 Certification of Chief Executive Officer Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002. Filed herewith.
32.2 Certification of Chief Financial Officer Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002. Filed herewith.
Item 14. Principal Accountant Fees and Services.
On January 13, 2005, the Audit Committee (the "Committee") of the Board of
Directors of the Company unanimously voted to recommend to the Board that the
resignation of Tait, Weller & Baker ("Tait") as the Company's independent
registered public accounting firm be accepted, effective upon the appointment by
the Company of successor auditors. The Committee further recommended to the
Board that the appointment of Deloitte & Touche LLP ("Deloitte") as the
independent registered public accounting firm for the Company be approved,
effective upon the successful completion of Deloitte's client acceptance
procedures. Also on January 13, 2005, the Board of Directors of the Company
approved such recommendations. Tait, Weller & Baker acted in this capacity in
2003 and previously. The information below includes amounts billed or expected
to be billed for these services.
-38-
Audit Fees
The aggregate fees billed or expected to be billed by the independent registered
public accounting firm for professional services rendered for the audit of the
annual financial statements for the fiscal years ended December 31, 2004 and
December 31, 2003 were $75,000 and $14,250 respectively. $75,000 expense has
been accrued for the audit of 2004, payable to Deloitte & Touche. The audit fee
expense for 2003 was attributable to Tait, Weller & Baker Certified Public
Accountants.
Audit-Related Fees
The aggregate fees billed or expected to be billed by the independent registered
public accounting firm for Audit-Related services to the Company, for the fiscal
years ended December 31, 2004 and December 31, 2003, were $6,000 and $2,250
respectively. These services consist primarily of review of quarterly filings
and other services approved by the Audit Committee. These fees were paid to Tait
, Weller & Baker Certified Public Accounts.
Tax Fees
The aggregate fees billed or expected to be billed by the independent registered
public accounting firm for tax services to the Company for the fiscal years
ending December 31, 2004 and December 31, 2003 were $3,250 and $3,250,
respectively. These services primarily relate to the analysis and review of tax
provisions and preparation of tax returns. These fees are payable to the
company's tax consultants, Tait, Weller & Baker Certified Public Accountants.
All Other Fees
The aggregate fees billed or expected to be billed by the independent registered
public accounting firm for all other services to the Company for the fiscal
years ending December 31, 2004 and December 31, 2003 were $0 and $1,200,
respectively. The fees for 2003 were paid to Tait Weller and Baker Certified
Public Accountants.
It is the Audit Committee's policy to approve in advance the types of audit,
audit-related, tax, and any other services to be provided by the Company's
independent registered public accounting firm.
The Audit Committee has approved all of the aforementioned independent
registered public accounting firm's services and fees for 2004 and 2003 and, in
doing so, has considered whether the provision of such services is compatible
with maintaining independence.
-39-
SIGNATURES
Pursuant to the requirements of Section 13 of the Securities Exchange Act of
1934, the Company has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BEXIL CORPORATION
June 20, 2005 By: /s/ William G. Vohrer
-------------------------------------------------------
William G. Vohrer
Chief Financial Officer, Treasurer,
Chief Accounting Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following persons on behalf of the Company and in the
capacities and on the dates indicated.
June 20, 2005 By: /s/ Thomas B. Winmill
------------------------------------------------------
Bassett S. Winmill, Chairman of the Board, Director
Thomas B. Winmill on behalf of Bassett S. Winmill by
Power of Attorney signed 12/11/01
June 20, 2005 By: /s/ Thomas B. Winmill
------------------------------------------------------
Thomas B. Winmill, Esq., President
Chief Executive Officer, General Counsel, Director
June 20, 2005 By: /s/ Thomas B. Winmill
------------------------------------------------------
Edward G. Webb, Jr., Director
Thomas B. Winmill on behalf of Edward G. Webb, Jr. by
Power of Attorney signed 12/11/01
June 20, 2005 By: /s/ Thomas B. Winmill
------------------------------------------------------
Charles A. Carroll, Director
Thomas B. Winmill on behalf of Charles A. Carroll by
Power of Attorney signed 12/11/01
June 20, 2005 By: /s/ Thomas B. Winmill
------------------------------------------------------
Douglas Wu, Director,
Thomas B. Winmill on behalf of Douglas Wu by Power of
Attorney signed 12/11/01
-40-