UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
| | | |
| [x] | | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the quarterly period ended: September 30, 2002
|
| [ ] | | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
|
For the transition period from _________ to ________________
|
Commission file number: 0-29027
Whitehall Limited, Inc.
(Exact name of small business issuer as specified in its charter)
| | | |
| Florida | | 84-1092599 |
| |
|
(State or other jurisdiction
of incorporation or organization) | | (IRS Employer
Identification No.) |
290 Cocoanut Avenue, Sarasota, Florida 34236
Address of principal executive offices
941-954-1181
(Issuer’s telephone number)
Not applicable
(Former name, former address and former fiscal year, if changed since last report)
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 [x] No [ ]
State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 13,317,312
Transitional Small Business Disclosure Format (check one):
Yes [ ] No [ ]
TABLE OF CONTENTS
Part I
Financial Information
Item 1. Financial Statements
See financial statements beginning on page F-1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Form 10-QSB, other than historical financial information, may consist of forward-looking statements that include risks and uncertainties, including, but not limited to, statements contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Such statements are based upon many assumptions and are subject to risks and uncertainties. Actual results could differ materially from the results discussed in the forward-looking statements due to a number of factors, including, but not limited to, those identified in this document and the Company’s other filings with the Securities and Exchange Commission. The Company disclaims any intent or obligation to update these forward-looking statements.
Overview:
The Company builds quality homes with custom features at moderate prices. The homes are designed principally for the entry level or “moving up” home buyers’ market, as well as the retirement segment of such market. Residences constructed and marketed by the Company generally range in size from 1,400 to 3,500 square feet and have purchase prices ranging from $180,000 to $550,000. In the past, certain of the Company’s projects consisted of smaller units and were geared more to the lower-end buyer. The Company markets the residences through commissioned employees and independent real estate brokers in the Company’s market area, which consists of the West Coast of the State of Florida, primarily, Sarasota, Manatee, Collier, Pasco and Hillsborough Counties. Residential unit sales are usually conducted from sales offices located in furnished models in each subdivision where the Company is active. The Company also typically constructs a limited number of speculative homes in each residential subdivision in which it is active in order to enhance marketing and sales activities.
Results of operations for the six and three months ended September 30, 2002 as compared to the six and three months ended September 30, 2001:
Revenues:
Home and Lot Sales:
| | | The Company’s Home and Lot sales decreased by approximately $1,427,000 to approximately $6,023,000 for the six months ended September 30, 2002 as compared to approximately $7,450,000 for the six months ended September 30, 2001. The Company’s Home and Lot sales decreased by approximately $875,000 to approximately $2,526,000 for the three months ended September 30, 2002 as compared to approximately $3,401,000 for the three months ended September 30, 2001. The decrease in revenues is primarily attributable to the number of lots sold during both the six and three months ended September 30, 2002 versus the comparable prior periods, as well as the five fewer homes closed in the second quarter ended September 30, 2002 compared to the prior year quarter. |
| |
| | | During the six month period ended September 30, 2002, the Company closed 26 homes compared to 31 homes in the six month period ended September 30, 2001. Despite delivering fewer homes during the six month period ended September 30, 2002, the average selling price of those homes was $200,000 as compared to $182,000 for the six month period ended September 30, 2001. The Company sold fewer lots during the six months ended September 30, 2002. Lot sales during this period generated $803,000 in |
1
| | | revenues as compared to lot sales aggregating approximately $1,803,000 during the six months ended September 30, 2001. Despite closing a fewer number of lots during the six month period ending September 30, 2002, the average selling price of those lots was $67,000 as compared to $55,000 for the six month period ending September 30, 2001. |
Costs and expenses:
Cost of sales:
| | | Cost of sales decreased by approximately $602,000 to approximately $5,353,000 for the six months ended September 30, 2002 as compared to approximately $5,955,000 for the six months ended September 30, 2001. Cost of sales decreased by approximately $578,000 to approximately $2,363,000 for the three months ended September 30, 2002 as compared to approximately $2,941,000 for the three months ended September 30, 2001. The cost as a percent of sales approximated 89% and 93% for the six and three months ended September 30, 2002, respectively as compared with 80% and 86% for the six and three months ended September 30, 2001, respectively. Although total cost of sales has decreased due to closing fewer homes than the prior year, the increase in the cost of sales as a percent of sales can be attributed to the following: |
| | (1) | | During 2002, the Company closed more units in the Heron Creek project. The cost associated with the land in the Heron Creek project is greater than other projects. The reason for this is because when the Company bought out its former partner in this project, the former partner was paid an amount exceeding book value. This excess value was allocated to the land in the project, thereby increasing the cost of the land. |
| |
| | (2) | | During the later part of 2001, the Company was developing larger projects and began to incur construction delays, thereby increasing the carrying cost of the units they closed. The Company has added additional project superintendents to circumvent these delays in the future. |
| |
| | (3) | | Finally, the Company’s vendors increased their costs at a higher rate than what the Company could pass through to its customers. |
Selling, general and administrative:
| | | Selling, general and administrative increased by approximately $55,000 to approximately $1,316,000 for the six months ended September 30, 2002 as compared to approximately $1,261,000 for the six months ended September 30, 2001. Selling, general and administrative decreased by approximately $139,000 to approximately $500,000 for the three months ended September 30, 2002 as compared to approximately $639,000 for the three months ended June 30, 2001. General and administrative costs remained relatively stable, decreasing approximately $4,000 for the six months ended September 30, 2002 as compared to six months ended September 30, 2001. Selling expenses increased approximately $59,000 during the same period due to increased use of outside realtors and promotional expenses associated with several new developments. However, for the three months ended September 30, 2002, General and Administrative expenses actually decreased by approximately $116,000 primarily resulting from lower professional and consulting fees being incurred as compared to the comparable prior period. In addition, during the same period, selling expenses also decreased by approximately $23,000. This decrease was a result of fewer closings during the quarter. |
2
Interest:
| | | Interest increased for the six months ended September 30, 2002 as compared to the six months ended September 30, 2001 by approximately $22,000. Interest increased for the six months ended September 30, 2002 as compared to the six months ended September 30, 2001 by approximately $12,000. Total debt outstanding has increased for the period. However when compared to that of the prior year, the majority of the debt for the current period relates to projects under development. As a result, most of the interest expense for the period is capitalized as opposed to expensed. |
Net Income (loss):
| | | As a result of the aforementioned, the Company’s net income (loss) after taxes and allocation of the loss to the joint venture partner was approximately $(316,000) ($(.02) per share) and $120,446 ($.01 per share) for the six months ended September 30, 2002 and 2001, respectively. The Company’s net loss was approximately $(173,000) ($(.01) per share) and $(127,000) ($(.01) per share) for the three months ended September 30, 2002 and 2001, respectively. |
Liquidity and Capital Resources:
As of September 30, 2002, the Company had net assets of approximately $869,000 including cash and cash equivalents of approximately $244,000. During the six months ended September 30, 2002, the Company’s cash position decreased by approximately $221,000. Its operating activities utilized approximately $5,064,000 of cash. This was primarily caused by the Company funding its net loss of approximately $316,000, an increase in inventories of approximately $3,737,000, and a decrease in customer deposits of approximately $748,000. This utilization was financed by the Company’s financing activities. The Company’s financing activities provided approximately $4,827,000 of cash principally from the proceeds of its mortgages and notes payable of approximately $6,546,000 offset by repayments of approximately $2,268,000. The Company’s principal source of financing has historically been provided from its construction financing which is based on the value of the underlying projects. In addition, during the three months ended June 30, 2002, the Company entered into and received $500,000 under a $500,000 revolving line of credit agreement with a related party to be used to fund construction costs on the Edgewater Moorings at Lakewood Ranch Project. During the three months ended September 30, 2002, a Company related to the principal stockholder advanced the Company $50,000 for working capital purposes. During October 2002, the same Company advanced the Company an additional $200,000 for working capital purposes. These advances are due on demand and bear interest at 12% payable monthly. The Company has additional committed bank lines of credit of approximately $5,180,000 to finance projects currently under development.
Item 3. Controls and Procedures
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-14 within 90 days of the filing date of this quarterly report. Based upon their evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures are effective in timely alerting them to material information relating to us (including our consolidated subsidiaries) required to be included in our periodic SEC filings. There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation.
3
Part II
Other Information
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
We issued 9,000 shares of our common stock to our employees under our Employee Stock Bonus Plan as a bonus. We placed a value of $.10 per share on each share issued.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
| | | |
| 99.1 | | Certificate of the President and Chief Executive Officer pursuant to 18 U.S.C. § 1350.
|
| 99.2 | | Certificate of the Chief Financial Officer pursuant to 18 U.S.C. § 1350. |
| | (b) | | Reports on Form 8-K |
| |
| | | | We did not file any reports on Form 8-K during the quarter for which this report is filed. |
4
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| | | | | |
| | | Whitehall Limited, Inc.
|
| November 14, 2002 | | /s/ | | Ronald Mustari |
| | |
|
| | | | | Ronald Mustari, President and
Chief Executive Officer
(Principal Executive Officer)
|
| November 14, 2002 | | /s/ | | Judith Zeman |
| | |
|
| | | | | Judith Zeman, Treasurer and
Chief Financial Officer
(Principal Financial and Accounting Officer) |
5
CERTIFICATIONS
I, Ronald Mustari, President and Chief Executive Officer (principal executive officer) of Whitehall Limited, Inc. certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Whitehall Limited, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and
c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and
6. The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Date: November 14, 2002
| | | |
| | | /s/Ronald Mustari |
| | |
|
| | | Ronald Mustari, President and
Chief Executive Officer |
6
I, Judith Zeman, Chief Financial Officer and Treasurer (principal financial officer) of Whitehall Limited, Inc. certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Whitehall Limited, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and
c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and
6. The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Date: November 14, 2002
| | | |
| | | /s/ Judith Zeman |
| | |
|
| | | Judith Zeman, Chief Financial Officer and
Treasurer |
7
WHITEHALL LIMITED, INC. AND SUBSIDIARIES
I N D E X
| | | |
| | | PAGE |
| | |
|
CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2002 (UNAUDITED) | | F-2 |
| |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
SIX AND THREE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001 (UNAUDITED) | | F-3 |
| |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED SEPTEMBER 30, 2002 AND 2001 (UNAUDITED) | | F-4 |
| |
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | | F-5/6 |
* * *
F-1
WHITEHALL LIMITED, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2002
| | | | | | | | |
| ASSETS | | | | |
| Cash and cash equivalents | | $ | 244,376 | |
| Inventories | | | 22,592,078 | |
| Property and equipment, net | | | 407,015 | |
| Other assets | | | 127,113 | |
| | | |
| |
| | | | Total | | $ | 23,370,582 | |
| | | |
| |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | |
| Liabilities: | | | | |
| | Mortgages and notes payable | | $ | 17,068,351 | |
| | Notes payable — related party | | | 549,000 | |
| | Accounts payable and accrued expenses | | | 1,643,126 | |
| | Customer deposits and advances | | | 821,972 | |
| | Deferred tax liabilities | | | 240,790 | |
| | | |
| |
| | | | Total liabilities | | | 20,323,239 | |
| | | |
| |
| Interest of joint venture partner | | | 2,178,067 | |
| | | |
| |
| Commitments and contingencies | | | | |
| Stockholders’ equity: | | | | |
| | Preferred stock: | | | | |
| | | Series A, $.10 par value; 100,000,000 shares authorized; none issued | | | — | |
| | | Series B, $.10 par value; 2,500,000 shares authorized; none issued | | | — | |
| | Common stock, $.10 par value; 500,000,000 shares authorized; 13,317,312 shares issued and outstanding | | | 1,331,731 | |
| | Additional paid-in capital | | | (337,062 | ) |
| | Accumulated deficit | | | (125,393 | ) |
| | | |
| |
| | | | Total stockholders’ equity | | | 869,276 | |
| | | |
| |
| | | | Total | | $ | 23,370,582 | |
| | | |
| |
See Notes to Condensed Consolidated Financial Statements.
F-2
WHITEHALL LIMITED, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
SIX AND THREE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
(UNAUDITED)
| | | | | | | | | | | | | | | | | | | |
| | | | | Six Months Ended | | Three Months Ended |
| | | | | September 30, | | September 30, |
| | | | |
| |
|
| | | | | 2002 | | 2001 | | 2002 | | 2001 |
| | | | |
| |
| |
| |
|
| Revenue: | | | | | | | | | | | | | | | | |
| | Home and lot sales | | $ | 6,022,876 | | | $ | 7,450,275 | | | $ | 2,525,755 | | | $ | 3,401,449 | |
| | Other income | | | 22,531 | | | | 24,767 | | | | 17,147 | | | | 2,474 | |
| | | |
| | | |
| | | |
| | | |
| |
| | | Totals | | | 6,045,407 | | | | 7,475,042 | | | | 2,542,902 | | | | 3,403,923 | |
| | | |
| | | |
| | | |
| | | |
| |
| Costs and expenses: | | | | | | | | | | | | | | | | |
| | Cost of sales | | | 5,352,827 | | | | 5,955,143 | | | | 2,362,634 | | | | 2,941,393 | |
| | Selling | | | 680,633 | | | | 621,868 | | | | 289,274 | | | | 312,150 | |
| | General and administrative | | | 635,373 | | | | 639,691 | | | | 210,851 | | | | 326,594 | |
| | Interest | | | 90,460 | | | | 68,094 | | | | 39,502 | | | | 27,949 | |
| | | |
| | | |
| | | |
| | | |
| |
| | | Totals | | | 6,759,293 | | | | 7,284,796 | | | | 2,902,261 | | | | 3,608,086 | |
| | | |
| | | |
| | | |
| | | |
| |
| Operating income (loss) | | | (713,886 | ) | | | 190,246 | | | | (359,359 | ) | | | (204,163 | ) |
| Loss applicable to interest of joint venture partner | | | 186,535 | | | | | | | | 61,864 | | | | | |
| | | |
| | | |
| | | |
| | | |
| |
| Income (loss) before income taxes | | | (527,351 | ) | | | 190,246 | | | | (297,495 | ) | | | (204,163 | ) |
| Provision (credit) for income taxes | | | (210,940 | ) | | | 69,800 | | | | (124,410 | ) | | | (77,300 | ) |
| | | |
| | | |
| | | |
| | | |
| |
| Net income (loss) | | $ | (316,411 | ) | | $ | 120,446 | | | $ | (173,085 | ) | | $ | (126,863 | ) |
| | | |
| | | |
| | | |
| | | |
| |
| Basic earnings (loss) per share | | $ | (.02 | ) | | $ | .01 | | | $ | (.01 | ) | | $ | (.01 | ) |
| | | |
| | | |
| | | |
| | | |
| |
| Basic weighted average shares outstanding | | | 13,311,656 | | | | 11,232,820 | | | | 13,314,964 | | | | 11,235,741 | |
| | | |
| | | |
| | | |
| | | |
| |
See Notes to Condensed Consolidated Financial Statements.
F-3
WHITEHALL LIMITED, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
(UNAUDITED)
| | | | | | | | | | | | | |
| | | | | | | 2002 | | 2001 |
| | | | | | |
| |
|
| Operating activities: | | | | | | | | |
| | Net income (loss) | | $ | (316,411 | ) | | $ | 120,446 | |
| | Adjustments to reconcile net income (loss) to net cash used in operating activities: | | | | | | | | |
| | | Depreciation | | | 23,892 | | | | 13,891 | |
| | | Deferred income taxes | | | (210,940 | ) | | | (38,200 | ) |
| | | Cost of services paid through issuance of common stock | | | 900 | | | | 41,026 | |
| | | Loss applicable to interest of joint venture partner | | | (186,535 | ) | | | | |
| | | Gain on sale of equipment | | | (12,715 | ) | | | | |
| | | Changes in operating assets and liabilities: | | | | | | | | |
| | | | Inventories | | | (3,737,218 | ) | | | (2,488,880 | ) |
| | | | Other assets | | | 12,550 | | | | 15,684 | |
| | | | Accounts payable and accrued expenses | | | 218,556 | | | | (106,159 | ) |
| | | | Customer deposits and advances | | | (747,538 | ) | | | 403,787 | |
| | | | Income taxes payable | | | (108,277 | ) | | | 80,870 | |
| | | |
| | | |
| |
| | | | | Net cash used in operating activities | | | (5,063,736 | ) | | | (1,957,535 | ) |
| | | |
| | | |
| |
| Investing activities: | | | | | | | | |
| | Purchase of property and equipment | | | (14,070 | ) | | | | |
| | Proceeds from sale of equipment | | | 30,500 | | | | | |
| | | |
| | | | | |
| | | | | Net cash provided by investing activities | | | 16,430 | | | | | |
| | | |
| | | | | |
| Financing activities: | | | | | | | | |
| | Proceeds from mortgages and notes payable | | | 6,545,996 | | | | 6,593,897 | |
| | Repayments of mortgages and note payable | | | (2,268,366 | ) | | | (4,845,056 | ) |
| | Proceeds from notes payable — related party | | | 550,000 | | | | | |
| | Repayment of notes payable — related party | | | (1,000 | ) | | | | |
| | | |
| | | |
| |
| | | | Net cash provided by financing activities | | | 4,826,630 | | | | 1,748,841 | |
| | | |
| | | |
| |
| Net decrease in cash and cash equivalents | | | (220,676 | ) | | | (208,694 | ) |
| Cash and cash equivalents, beginning of period | | | 465,052 | | | | 950,005 | |
| | | |
| | | |
| |
| Cash and cash equivalents, end of period | | $ | 244,376 | | | $ | 741,311 | |
| | | |
| | | |
| |
| Supplemental disclosure of cash flow data: | | | | | | | | |
| | Interest paid, net of amount capitalized | | $ | 90,460 | | | $ | 68,094 | |
| | | |
| | | |
| |
See Notes to Condensed Consolidated Financial Statements.
F-4
WHITEHALL LIMITED, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
| | | |
Note 1 - Basis of presentation:
|
| | | In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring accruals, necessary to present fairly the financial position of Whitehall Limited, Inc. and Subsidiaries (the “Company”) as of September 30, 2002, and its results of operations for the six and three months ended September 30, 2002 and 2001 and cash flows for the six months ended September 30, 2002 and 2001. Pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”), certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed in or omitted from these financial statements unless significant changes have taken place since the end of the most recent fiscal year. Accordingly, these unaudited condensed financial statements should be read in conjunction with the audited financial statements as of and for the year ended March 31, 2002 and the notes thereto (the “Audited Financial Statements”) and the other information included in the Company’s Annual Report on Form 10-KSB (the “Form 10-KSB”) for the year ended March 31, 2002 that was previously filed with the SEC.
|
| | | The results of the Company’s operations for the six and three months ended September 30, 2002 are not necessarily indicative of the results of operations for the full year ending March 31, 2003.
|
| | | The Company’s significant accounting policies and line of business have not changed from those described in the Form 10-KSB.
|
Note 2 - Earnings (loss) per common share:
|
| | | The Company presents basic earnings (loss) per share and, if appropriate, diluted earnings per share in accordance with the provisions of Statement of Financial Accounting Standards No. 128, “Earnings per Share” (“SFAS 128”). Diluted per share amounts have not been presented in the accompanying unaudited condensed consolidated statements of operations for the six and three months ended September 30, 2002 and 2001 because there were no dilutive securities outstanding.
|
Note 3 - Related party transactions:
|
| | | On June 4, 2002, the Company entered into a $500,000 revolving line of credit agreement with a related party. The principal balance is due and payable eighteen months from the date of the agreement. Borrowings under the line of credit bear interest at 12% which is payable monthly. The line of credit is secured by all second deposits due the Company on certain contracts for condominiums located at the Edgewater Moorings at Lakewood Ranch Project, as defined in the agreement. |
F-5
WHITEHALL LIMITED, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
| | | |
Note 3 - Related party transactions (concluded):
|
| | | During the three months ended September 30, 2002, a Company related to the principal stockholder advanced the Company $50,000 for working capital purposes. During October 2002, the same Company advanced the Company an additional $200,000 for working capital purposes. These advances are due on demand and bear interest at 12% payable monthly.
|
Note 4 - Employee stock plan:
|
| | | During the six months ended September 30, 2002, the Company issued 9,000 shares of common stock having a value of $900 under its employee stock plan (see Note 13 to the Audited Financial Statements). |
* * *
F-6
EXHIBIT INDEX
| | | |
Exhibit
Number | | Description |
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| 99.1 | | Certificate of the President and Chief Executive Officer pursuant to 18 U.S.C. § 1350.
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| 99.2 | | Certificate of the Chief Financial Officer pursuant to 18 U.S.C. § 1350. |
