<PAGE>   1
                                                                   Exhibit 99.4






                    BROOKE (OVERSEAS) LTD. AND SUBSIDIARIES

                       CONSOLIDATED FINANCIAL STATEMENTS


                                 JUNE 30, 1999


<PAGE>   2

                    BROOKE (OVERSEAS) LTD. AND SUBSIDIARIES

                       CONSOLIDATED FINANCIAL STATEMENTS


                               TABLE OF CONTENTS



<TABLE>
<CAPTION>

                                                                                                            Page
                                                                                                            ----
<S>                                                                                                         <C>
   Consolidated Balance Sheets as of June 30, 1999 and December 31, 1998...............................        2

   Consolidated Statements of Operations for the three and six months ended
         June 30, 1999 and June 30, 1998...............................................................        3

   Consolidated Statement of Stockholder's Equity (Deficit) for the six months
         ended June 30, 1999...........................................................................        4

   Consolidated Statements of Cash Flows for the six months ended June 30,
         1999 and June 30, 1998........................................................................        5

   Notes to Consolidated Financial Statements..........................................................        6


</TABLE>



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<PAGE>   3

                    BROOKE (OVERSEAS) LTD. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                  (UNAUDITED)
<TABLE>
<CAPTION>

==============================================================================================================

                                                                             June 30,         December 31,
                                                                               1999               1998
                                                                         ------------------ ------------------
<S>                                                                        <C>                 <C>
ASSETS
Current assets:
  Cash and cash equivalents........................................        $    1,142          $   2,722
  Accounts receivable - trade......................................             1,200                650
  Inventories......................................................            17,407             10,342
  Other current assets.............................................             6,511              2,928
                                                                            ---------           --------
     Total current assets..........................................            26,260             16,642

Property, plant and equipment, at cost, less
      accumulated depreciation of $4,231 and $2,959................           103,102             77,286
Other..............................................................             3,719              5,782
                                                                            ---------           --------
     Total assets..................................................          $133,081           $ 99,710
                                                                            =========           ========

LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
Current liabilities:
  Credit facilities and current portion of notes payable.........           $  30,816           $ 20,005
  Accounts payable - trade.......................................              20,967             10,415
  Due to affiliates..............................................              68,749             51,533
  Accrued taxes..................................................               5,603              7,658
  Accrued interest...............................................                 741                228
  Other accrued liabilities......................................               5,023              3,628
                                                                            ---------           --------
     Total current liabilities...................................             131,899             93,467

Long-term portion of notes payable...............................              15,222             19,652
Deferred gain....................................................               4,004             20,392
Participating loan...............................................              32,253             31,991
Other liabilities................................................               1,200              4,252

Commitments and contingencies....................................

Stockholder's equity (deficit):
  Common stock, par value $1 per share, 701,000 shares authorized,
     authorized, issued and outstanding..........................                 701                701
  Additional paid-in-capital.....................................              29,017             17,104
  Deficit........................................................             (81,215)           (87,849)
                                                                            ---------           --------
     Total stockholder's equity (deficit)........................             (51,497)           (70,044)
                                                                            ---------           --------
     Total liabilities and stockholder's equity (deficit)........            $133,081           $ 99,710
                                                                            =========           ========
</TABLE>


                  The accompanying notes are an integral part
                   of the consolidated financial statements.




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<PAGE>   4
                    BROOKE (OVERSEAS) LTD. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                  (UNAUDITED)

<TABLE>
<CAPTION>

======================================================================================================================

                                                                 Three Months Ended               Six Months Ended
                                                            ------------------------------ ---------------------------
                                                              June 30,        June 30,        June 30,        June 30,
                                                                1999            1998            1999            1998
                                                            -------------- --------------- --------------- -----------
<S>                                                             <C>            <C>             <C>             <C>
Net sales*............................................          $15,339        $27,865         $37,689         $47,042
Cost of sales*........................................           12,784         18,749          31,198          34,333
                                                                 ------         ------          ------          ------
Gross profit..........................................            2,555          9,116           6,491          12,709
Operating, selling, administrative and
       general expenses...............................            3,468          3,057           6,114           5,198
                                                                -------        -------         -------         -------
Operating income......................................             (913)         6,059             377           7,511

Other income (expense):
   Interest expense...................................           (3,005)        (2,645)         (6,971)         (6,088)
   Recognition of deferred gain on sale of assets.....                                           8,478
   Gain on foreign currency exchange..................              341              5           2,611              84
   Amortization of goodwill...........................                          (1,023)                         (1,054)
   Other, net.........................................              169              7             259             (32)
                                                               --------     ----------        --------        --------
(Loss) income before income taxes.....................           (3,408)         2,403           4,754             421
(Benefit) provision for income taxes..................             (164)         1,546          (1,880)          1,311
                                                               --------        -------         -------         -------
Net (loss) income.....................................         $ (3,244)     $     857        $  6,634       $    (890)
                                                                =======       ========         =======        ========
</TABLE>


--------------------

*    Net sales and cost of sales include excise taxes of $1,111, $4,761, $2,596
     and $7,869, respectively.


                  The accompanying notes are an integral part
                   of the consolidated financial statements.



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<PAGE>   5
                    BROOKE (OVERSEAS) LTD. AND SUBSIDIARIES
            CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY (DEFICIT)
                (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                  (UNAUDITED)

<TABLE>
<CAPTION>

==============================================================================================================================

                                                              Common Stock             Additional
                                                        -----------------------          Paid-in
                                                        Shares           Amount          Capital        Deficit         Total
                                                        ------           ------        ----------       -------       --------
<S>                                                      <C>               <C>           <C>            <C>           <C>
Balance, December 31, 1998....................           701,000           $701          $17,104        $(87,849)     $(70,044)

Net income....................................                                                             6,634          6,634

Effect of New Valley recapitalization.........                                            11,913                         11,913
                                                         -------           ----          -------         --------      --------
Balance, June 30, 1999........................           701,000           $701          $29,017         $(81,215)     $(51,497)
                                                         =======           ====          =======         --======      ========
</TABLE>




                  The accompanying notes are an integral part
                   of the consolidated financial statements.




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<PAGE>   6
                    BROOKE (OVERSEAS) LTD. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                  (UNAUDITED)

<TABLE>
<CAPTION>

================================================================================================

                                                                          Six Months Ended
                                                                   ----------------------------
                                                                    June 30,           June 30,
                                                                      1999               1998
                                                                   ---------           --------
<S>                                                                <C>                 <C>
Net cash provided by operating activities....................      $ 18,812            $  3,634
                                                                   --------            --------

Cash flows from investing activities:
      Capital expenditures...................................       (30,565)             (6,444)
                                                                   --------            --------
Net cash used in investing activities........................       (30,565)             (6,444)
                                                                   --------            --------
Cash flows from financing activities:
      Proceeds from debt.....................................                            11,995
      Repayments of debt.....................................          (155)             (7,000)
      Borrowings under credit facility.......................        10,959
      Proceeds from participating loan.......................                            20,000
      Capital contributions..................................                             9,000
      Repayment of intercompany debt.........................                           (27,080)
      Distributions paid to parent...........................                            (1,275)
                                                                   --------            --------
Net cash provided by financing activities....................        10,804               5,640
                                                                   --------            --------

Effect of exchange rate changes on cash
        and cash equivalents.................................          (631)                 84
                                                                   --------            --------

Net (decrease) increase in cash and cash equivalents.........        (1,580)              2,914

Cash and cash equivalents, beginning of period...............         2,722                 968
                                                                   --------            --------
Cash and cash equivalents, end of period.....................      $  1,142            $  3,882
                                                                   ========            ========

</TABLE>


                  The accompanying notes are an integral part
                   of the consolidated financial statements.



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<PAGE>   7
                    BROOKE (OVERSEAS) LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                  (UNAUDITED)


1.       PRINCIPLES OF REPORTING

         Brooke (Overseas) Ltd. ("the Company"), a Delaware corporation, is a
         wholly-owned subsidiary of BGLS Inc. ("BGLS") and an indirect
         subsidiary of Brooke Group Ltd. ("Brooke"). The consolidated financial
         statements of the Company include Western Tobacco Investments LLC
         ("Western Tobacco"), a Delaware limited liability company. Western
         Tobacco holds the Company's interest in Liggett-Ducat Ltd.
         ("Liggett-Ducat"), a Russian closed joint stock company engaged in the
         manufacture and sale of cigarettes in Russia, and Liggett-Ducat
         Tobacco ("LDT"), a wholly-owned subsidiary of Liggett-Ducat which
         recently completed construction of a new cigarette factory.

         The interim consolidated financial statements of the Company are
         unaudited and, in the opinion of management, reflect all adjustments
         necessary (which are normal and recurring) to present fairly the
         Company's consolidated financial position, results of operations and
         cash flows. These consolidated financial statements should be read in
         conjunction with the consolidated financial statements and the notes
         thereto included as Exhibit 99.4 in Brooke's and BGLS' Annual Report
         on Form 10-K, as amended, for the year ended December 31, 1998, as
         filed with the Securities and Exchange Commission. The consolidated
         results of operations for interim periods should not be regarded as
         necessarily indicative of the results that may be expected for the
         entire year.

         RISKS AND UNCERTAINTIES:

         During 1998, the Russian Federation entered a period of economic
         instability which has continued in 1999. The impact includes, but is
         not limited to, a steep decline in prices of domestic debt and equity
         securities, a severe devaluation of the currency, a moratorium on
         foreign debt repayments, an increasing rate of inflation and
         increasing rates on government and corporate borrowings. The return to
         economic stability is dependent to a large extent on the effectiveness
         of the fiscal measures taken by government and other actions beyond
         the control of companies operating in the Russian Federation. The
         Company's operations may be significantly affected by these factors
         for the foreseeable future.

         USE OF ESTIMATES:

         The preparation of financial statements in conformity with generally
         accepted accounting principles requires management to make estimates
         and assumptions that affect the reported amounts of assets and
         liabilities and disclosures of contingent assets and liabilities and
         the reported amounts of revenues and expenses. Actual results could
         differ from those estimates.

         RECLASSIFICATIONS:

         Certain amounts in the 1998 consolidated financial statements have
         been reclassified to conform to the 1999 presentation.




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<PAGE>   8

                    BROOKE (OVERSEAS) LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
         (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) - (CONTINUED)
                                  (UNAUDITED)

2.       LIQUIDITY

         At June 30, 1999, the Company had net capital and working capital
         deficiencies of $51,497 and $105,639, respectively. Factory management
         is currently using credit facilities totaling $22,285. Availability
         under these facilities is $2,500. In addition, the Company has
         obtained funding from BGLS of approximately $12,900 to complete the
         factory. In connection with the move to the new factory in June 1999,
         Liggett-Ducat began the manufacture and marketing of western style
         cigarettes. Management believes that such activities will result in
         improved operations and cash flow, but there can be no assurances in
         this regard.


3.       SALE OF BROOKEMIL

         In connection with the sale by the Company of the common shares of
         BrookeMil Ltd. ("BML") to New Valley Corporation ("New Valley") in
         1997, a portion of the gain was deferred in recognition of the fact
         that the Company's parent, BGLS, retained an interest in BML through
         its then 42% equity ownership of New Valley and that a portion of the
         property sold (the site of the third phase of the Ducat Place real
         estate project being developed by BML, which was used by Liggett-Ducat
         for its cigarette factory operation) was subject to a put option held
         by New Valley. The option expired when Liggett-Ducat ceased factory
         operations at the site in March 1999. The Company recognized that
         portion of the deferred gain, $8,478, in March 1999.

         As of June 1, 1999, New Valley became a consolidated subsidiary of
         Brooke. The deferred gain remaining related to the sale of BML,
         $11,913, was reclassified as a contribution to capital.


4.       INVENTORIES

         Inventories consist of:
<TABLE>
<CAPTION>

                                                             June 30,          December 31,
                                                               1999                1998
                                                             --------          ------------
          <S>                                                <C>                 <C>
          Leaf tobacco.............................          $  5,405            $  3,086
          Other raw materials......................             8,908               2,888
          Work-in-process..........................               372                 173
          Finished goods...........................             1,343               3,215
          Replacement parts and supplies...........             1,379                 980
                                                              -------             -------
                                                              $17,407             $10,342
                                                              =======             =======
</TABLE>

          Replacement parts and supplies are shown net of a provision for
          obsolescence of $408 and $545 at June 30, 1999 and December 31, 1998,
          respectively.

          During the six months ended June 30, 1999, Liggett-Ducat exchanged
          $251 of cigarettes for the equivalent value in tobacco, other




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<PAGE>   9
                    BROOKE (OVERSEAS) LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
         (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) - (CONTINUED)
                                  (UNAUDITED)


          materials and services as compared to $2,510 for the same period in
          1998. Sales and purchases were priced at what management believes are
          normal sales prices for cigarettes and the normal market price for
          tobacco, other materials and services.

          At June 30, 1999, the Company had leaf tobacco purchase commitments
          of approximately $34,870.


5.       PROPERTY, PLANT AND EQUIPMENT

         Property, plant and equipment consists of:
<TABLE>
<CAPTION>

                                                             June 30,              December 31,
                                                               1999                    1998
                                                             ---------             ------------
          <S>                                                <C>                     <C>
          Factory machinery and equipment..........          $  54,922               $10,589
          Computers and software...................                737                   466
          Office furniture and equipment...........                622                   470
          Vehicles.................................              2,527                 1,767
          Construction-in-progress.................             48,526                66,953
                                                              --------               -------
                                                               107,334                80,245
          Less accumulated depreciation............             (4,232)               (2,959)
                                                              --------               -------
                                                              $103,102               $77,286
                                                              ========               =======
</TABLE>

         Liggett-Ducat completed construction of a new cigarette factory on the
         outskirts of Moscow and began production in June 1999. Production at
         Liggett-Ducat's old factory ceased in March 1999. At June 30, 1999,
         the remaining liability under the construction contracts is $4,045 and
         the remaining liability under equipment purchase agreements is
         $21,795.


6.       NOTES PAYABLE, CREDIT FACILITIES AND PARTICIPATING LOAN

         Notes payable and credit facilities consist of the following:

<TABLE>
<CAPTION>
                                                              June 30,            December 31,
                                                                1999                  1998
                                                              --------            ------------

          <S>                                                 <C>                  <C>
          Notes payable............................            $23,753              $28,057
          Credit facilities........................             22,285               11,600
                                                               -------               ------

          Total notes payable and credit
            facilities.............................             46,038               39,657
          Less:
          Current maturities.......................             30,816               20,005
                                                               -------              -------
          Amount due after one year................            $15,222              $19,652
                                                               =======              =======
</TABLE>

         At June 30, 1999, Liggett-Ducat had various credit facilities under
         which approximately $22,285 was outstanding. One facility for $10,000,
         which is fully utilized and bears interest at 25%, expires in May




                                      -8-
<PAGE>   10
                    BROOKE (OVERSEAS) LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
         (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) - (CONTINUED)
                                  (UNAUDITED)


         2000. Another facility for $5,000, of which $2,500 is utilized and
         bears interest at 20%, expires in December 1999. The remaining
         facilities, denominated in rubles (approximately $9,800 at the June
         30, 1999 exchange rate), have terms of six - twelve months with
         interest rates of 52% - 63%. The facilities are collateralized by
         factory equipment and tobacco inventory.

         In 1997, Western Tobacco entered into several contracts for the
         purchase of cigarette manufacturing equipment. Approximately 85% of
         the contracts are being financed with promissory notes generally over
         a period of 5 years. The outstanding balance on these notes, which are
         denominated in various European currencies, is $20,386 at June 30,
         1999. The Company also has issued a promissory note for $1,339 due
         March 31, 2000 covering deposits for equipment being purchased for the
         factory.

         On July 29, 1998, the Company borrowed $3,000, subsequently reduced to
         $2,034, from an unaffiliated third party with interest at 14% per
         annum. The remaining principal of the note and accrued interest on the
         loan of $1,950 was paid on August 2, 1999.

         In February 1998, New Valley and Apollo Real Estate Investment Fund
         III, L.P. organized Western Realty Development LLC ("Western Realty
         Ducat") to make real estate and other investments in Russia. Through
         June 30, 1999, Western Realty Ducat had made a $30,000 participating
         loan to Western Tobacco with the proceeds used by the Company to
         reduce intercompany debt to BGLS and for payments on the new factory
         construction contracts. The loan bears no fixed interest and is
         payable only out of 30% of distributions made by Western Tobacco to
         the Company. After the prior payment of debt service on loans to
         finance the construction of the new factory, 30% of distributions from
         Western Tobacco to the Company will be applied first to pay the
         principal of the loan and then as contingent participating interest on
         the loan. Any rights of payment on the loan are subordinate to the
         rights of all other creditors of the Company. For the three and six
         months ended June 30, 1999, a preference requirement equal to 30% of
         Western Tobacco's net (loss) income of $(741) and $261 has been
         charged to interest expense.

7.       INCOME TAXES

         For the six months ended June 30, 1999 and 1998, the tax (benefit)
         provision of $(1,880) and $1,311, respectively, consisted of income
         tax (benefit) expense pursuant to Russian statutory requirements of
         $(171) and $1,311, respectively, and U.S. income tax benefit of $2,051
         and $0 in accordance with the Company's tax sharing agreement with
         Brooke.

8.       CONTINGENCIES

         BGLS has pledged its ownership interest in the Company's common stock
         as collateral in connection with the issuance of BGLS' 15.75% Senior
         Secured Notes due 2001 ("BGLS Notes").

         On March 2, 1998, BGLS entered into an agreement with AIF II, L.P. and
         an affiliated investment manager on behalf of a managed account




                                      -9-
<PAGE>   11
                    BROOKE (OVERSEAS) LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
         (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) - (CONTINUED)
                                  (UNAUDITED)


         (together, the "Apollo Holders"), who held approximately 41.8% of the
         BGLS Notes then outstanding. The Apollo Holders (and any transferees)
         agreed to defer the payment of interest on the BGLS Notes held by
         them, commencing with the interest payment that was due July 31, 1997,
         which they had previously agreed to defer, through the interest
         payment due July 31, 2000. The deferred interest payments will be
         payable at final maturity of the BGLS Notes on January 31, 2001 or
         upon an event of default under the Indenture for the BGLS Notes. In
         connection with the agreement, the Company pledged 50.1% of Western
         Tobacco to collateralize the BGLS Notes held by the Apollo Holders
         (and any transferees).








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