UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM 10-QSB
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: December 31, 2002
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
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 |
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: 14,284,812
Transitional Small Business Disclosure Format (check one):
Yes [ ] No [x]
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 1,600 to 4,000 square feet and have purchase prices ranging from $190,000 to $1,500,000. In the past, certain of the Company’s projects consisted of smaller units and were geared more to the lower-end buyer. However, certain of the newer projects are geared toward the high-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 nine and three months ended December 31, 2002 as compared to the nine and three months ended December 31, 2001:
Revenues:
Home and Lot Sales:
| The Company’s home and lot sales decreased by approximately $1,515,000 to approximately $8,913,000 for the nine months ended December 31, 2002 as compared to approximately $10,428,000 for the nine months ended December 31, 2001. The Company’s home and lot sales decreased by approximately $87,000 to approximately $2,890,000 for the three months ended December 31, 2002 as compared to approximately $2,977,000 for the three months ended December 31, 2001. The decrease in revenues is primarily attributable to the number of lots sold during both the nine and three months ended December 31, 2002 versus the comparable prior periods, as well as the four fewer homes closed during the nine months ended December 31, 2002 compared to the prior year and the one fewer home closed in the third quarter ended December 31, 2002 compared to the prior year quarter. In addition, construction delays and the cyclical nature of the market resulted in a significant backlog of homes expected to be delivered in the fourth quarter. Current contracts are in place for closing 27 homes in the fourth quarter of the current fiscal year, many of which were originally scheduled to close in the third quarter. | ||
| During the nine month period ended December 31, 2002, the average selling price of homes was $184,000 as compared to $183,000 for the nine month period ended December 31, 2001. The Company sold 20 fewer lots during the nine months ended December 31, 2002 than during the nine months ended December 31, 2001. |
1
| Lot sales during this period generated $1,536,000 in revenues as compared to lot sales aggregating approximately $2,396,000 during the nine months ended December 31, 2001. Despite closing a fewer number of lots during the nine month period ending December 31, 2002, the average selling price of those lots was $67,000 as compared to $56,000 for the nine month period ending December 31, 2001. |
Costs and expenses:
Cost of sales:
| Cost of sales decreased by approximately $397,000 to approximately $8,249,000 for the nine months ended December 31, 2002 as compared to approximately $8,646,000 for the nine months ended December 31, 2001. Cost of sales increased by approximately $206,000 to approximately $2,897,000 for the three months ended December 31, 2002 as compared to approximately $2,691,000 for the three months ended December 31, 2001. The cost as a percent of sales approximated 92% and 100% for the nine and three months ended December 31, 2002, respectively as compared with 83% and 90% for the nine and three months ended December 31, 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 than in the prior year. The cost associated with the land in the Heron Creek project is greater than that of other projects. 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 closed. Currently, the Company has two major communities, Edgewater Moorings at Lakewood Ranch (136 units) and Waterchase (56 units) in which delays in final governmental approvals significantly impacted construction schedules and building programs. The Company has resolved all significant issues related to these approvals, and the first closings for both communities have occurred or will occur in the fourth quarter of fiscal 2003. Also, the Company has continued to add additional project superintendents to circumvent construction delays in the future. Additional operational staff has also been added to enhance efficiencies in permitting and scheduling. | ||
| (3) | The Company’s vendors increased their costs at a higher rate than what the Company could pass through to its customers. | ||
| (4) | Finally, during the three months ended December 31, 2002, the Company incurred certain unanticipated costs which were associated with units and projects previously completed. |
Selling, general and administrative:
| Selling, general and administrative costs increased by approximately $474,000 to approximately $2,295,000 for the nine months ended December 31, 2002 as compared to approximately $1,821,000 for the nine months ended December 31, 2001. Selling, general and administrative increased by approximately $420,000 to approximately $979,000 for the three months ended December 31, 2002 as compared to approximately $559,000 for the three months ended December 31, 2001. General and administrative costs increased approximately $190,000 for the nine months ended December 31, 2002 as compared to the nine months ended December 31, 2001. Selling expenses increased approximately $284,000 during the same period due to increased use of outside realtors and promotional expenses associated with several new developments. For the three months ended December 31, 2002, general and administrative expenses increased by approximately $194,000 as compared to the three months ended December 31, 2001. In addition, during the same period, selling expenses also increased by approximately $225,000. This increase was also a result of increased project staffing requirements during the quarter related to new communities in development. The increase in general and administrative costs for both the nine and three months ended December 31, 2002 is primarily attributable to a non-cash charge of approximately $127,000 resulting from the issuance of 976,500 shares of common stock to its employees under the employee stock plan and additional employees necessary to staff current and future projects. |
2
Interest:
| Interest expense increased for the nine months ended December 31, 2002 as compared to the nine months ended December 31, 2001 by approximately $43,000. Interest expense increased for the three months ended December 31, 2002, as compared to the three months ended December 31, 2001, by approximately $20,000. 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 rather than expensed. |
Net loss:
| As a result of the aforementioned, the Company’s net loss after taxes and allocation of the loss to the joint venture partner was approximately $(997,000) ($(.07) per share) and $(43,000) (less than $.01 per share) for the nine months ended December 31, 2002 and 2001, respectively. The Company’s net loss was approximately ($680,000) ($(.05) per share) and $(163,000) ($(.01) per share) for the three months ended December 31, 2002 and 2001, respectively. |
Liquidity and Capital Resources:
As of December 31, 2002, the Company had net assets of approximately $315,000 including cash and cash equivalents of approximately $420,000. During the nine months ended December 31, 2002, the Company’s cash position decreased by approximately $45,000. Its operating activities utilized approximately $6,338,000 of cash. This was primarily caused by the Company funding the net loss including the loss applicable to its joint venture partner and an increase in inventories of approximately $5,714,000, offset by an increase in accounts payable and accrued expenses and customer deposits and advances of approximately $565,000 and $489,000, respectively. This utilization was effected through the Company’s financing activities. The Company’s financing activities provided approximately $6,323,000 of cash principally from the proceeds of its mortgages and notes payable of approximately $10,472,000 offset by repayments of approximately $4,899,000. The Company’s principal source of financing has historically been construction financing which is based on the value of the underlying projects. In addition, during the nine months ended December 31, 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 nine months ended December 31, 2002, a company related to the principal stockholder advanced the Company an aggregate of $250,000 for working capital purposes. This advance is due on demand and bears interest at 12% payable monthly. The Company has additional committed bank lines of credit of approximately $9,252,000 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 976,500 shares of our common stock to our employees under our employee stock plan as a bonus. We placed a value of $.13 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
(a) Exhibits.
| 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.
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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. | ||
| February 12, 2003 | /s/ | Ronald Mustari |
| Ronald Mustari, President and Chief Executive Officer (Principal Executive Officer) | ||
| February 12, 2003 | /s/ | Kay Carter |
| Kay Carter, 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: February 12, 2003
| /s/ Ronald Mustari | ||
| Ronald Mustari, President and Chief Executive Officer |
6
I, Kay Carter, 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: February 12, 2003
| /s/ Kay Carter | ||
| Kay Carter, Chief Financial Officer and Treasurer |
7
WHITEHALL LIMITED, INC. AND SUBSIDIARIES
I N D E X
| PAGE | ||||
| CONDENSED CONSOLIDATED BALANCE SHEET | F-2 | |||
| DECEMBER 31, 2002 (UNAUDITED) | ||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | F-3 | |||
| NINE AND THREE MONTHS ENDED DECEMBER 31, 2002 AND 2001 (UNAUDITED) | ||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | F-4 | |||
| NINE MONTHS ENDED DECEMBER 31, 2002 AND 2001 (UNAUDITED) | ||||
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | F-5/6 | |||
* * *
F-1
WHITEHALL LIMITED, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2002
(UNAUDITED)
| ASSETS | |||||||
| Cash and cash equivalents | $ | 419,943 | |||||
| Inventories | 24,569,149 | ||||||
| Property and equipment, net | 445,330 | ||||||
| Other assets | 124,505 | ||||||
| Total | $ | 25,558,927 | |||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
| Liabilities: | |||||||
| Mortgages and notes payable | $ | 18,363,697 | |||||
| Notes payable – related party | 750,288 | ||||||
| Accounts payable and accrued expenses | 1,989,129 | ||||||
| Customer deposits and advances | 2,058,801 | ||||||
| Total liabilities | 23,161,915 | ||||||
| Interest of joint venture partner | 2,081,824 | ||||||
| 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; | |||||||
| 14,284,812 shares issued and outstanding | 1,428,481 | ||||||
| Additional paid-in capital | (307,767 | ) | |||||
| Accumulated deficit | (805,526 | ) | |||||
| Total stockholders’ equity | 315,188 | ||||||
| Total | $ | 25,558,927 | |||||
See Notes to Condensed Consolidated Financial Statements.
F-2
WHITEHALL LIMITED, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
NINE AND THREE MONTHS ENDED DECEMBER 31, 2002 AND 2001
(UNAUDITED)
| Nine Months Ended | Three Months Ended | |||||||||||||||||
| December 31, | December 31, | |||||||||||||||||
| 2002 | 2001 | 2002 | 2001 | |||||||||||||||
| Revenue: | ||||||||||||||||||
| Home and lot sales | $ | 8,912,811 | $ | 10,427,523 | $ | 2,889,935 | $ | 2,977,248 | ||||||||||
| Other | 35,197 | 32,467 | 12,666 | 7,700 | ||||||||||||||
| Totals | 8,948,008 | 10,459,990 | 2,902,601 | 2,984,948 | ||||||||||||||
| Costs and expenses: | ||||||||||||||||||
| Cost of sales | 8,249,413 | 8,645,702 | 2,896,586 | 2,690,559 | ||||||||||||||
| Selling | 1,198,942 | 915,072 | 518,309 | 293,204 | ||||||||||||||
| General and administrative | 1,095,965 | 905,914 | 460,594 | 266,223 | ||||||||||||||
| Interest | 134,740 | 92,113 | 44,280 | 24,019 | ||||||||||||||
| Totals | 10,679,060 | 10,558,801 | 3,919,769 | 3,274,005 | ||||||||||||||
| Loss from operations | (1,731,052 | ) | (98,811 | ) | (1,017,168 | ) | (289,057 | ) | ||||||||||
| Loss applicable to interest of joint | ||||||||||||||||||
| venture partner | 282,778 | 16,698 | 96,245 | 16,698 | ||||||||||||||
| Loss before income taxes | (1,448,274 | ) | (82,113 | ) | (920,923 | ) | (272,359 | ) | ||||||||||
| Provision for income taxes | (451,730 | ) | (39,600 | ) | (240,790 | ) | (109,400 | ) | ||||||||||
| Net loss | $ | (996,544 | ) | $ | (42,513 | ) | $ | (680,133 | ) | $ | (162,959 | ) | ||||||
| Basic loss per share | $ | (.07 | ) | $ | – | $ | (.05 | ) | $ | (.01 | ) | |||||||
| Basic weighted average shares outstanding | 13,376,876 | 11,235,699 | 13,506,607 | 11,241,366 | ||||||||||||||
See Notes to Condensed Consolidated Financial Statements.
F-3
WHITEHALL LIMITED, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED DECEMBER 31, 2002 AND 2001
(UNAUDITED)
| 2002 | 2001 | |||||||||||
| Operating activities: | ||||||||||||
| Net loss | $ | (996,544 | ) | $ | (42,513 | ) | ||||||
| Adjustments to reconcile net loss to net cash | ||||||||||||
| used in operating activities: | ||||||||||||
| Depreciation | 31,896 | 31,244 | ||||||||||
| Deferred income taxes | (451,730 | ) | (63,000 | ) | ||||||||
| Cost of services paid through issuance of common stock | 126,945 | 41,026 | ||||||||||
| Loss applicable to interest of joint venture partner | (282,778 | ) | (16,698 | ) | ||||||||
| Gain on sale of equipment | (12,715 | ) | ||||||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Inventories | (5,714,289 | ) | (9,984,494 | ) | ||||||||
| Other assets | 15,158 | (88,209 | ) | |||||||||
| Accounts payable and accrued expenses | 564,559 | 93,354 | ||||||||||
| Customer deposits and advances | 489,291 | 890,523 | ||||||||||
| Income taxes payable | (108,277 | ) | (3,730 | ) | ||||||||
| Net cash used in operating activities | (6,338,484 | ) | (9,142,497 | ) | ||||||||
| Investing activities: | ||||||||||||
| Capital contributed by joint venture partner | 2,500,000 | |||||||||||
| Purchase of property and equipment | (60,389 | ) | (33,227 | ) | ||||||||
| Proceeds from sale of equipment | 30,500 | |||||||||||
| Net cash provided by (used in) investing activities | (29,889 | ) | 2,466,773 | |||||||||
| Financing activities: | ||||||||||||
| Proceeds from mortgages and notes payable | 10,472,376 | 12,244,581 | ||||||||||
| Repayments of mortgages and notes payable | (4,899,400 | ) | (5,829,330 | ) | ||||||||
| Proceeds from notes payable – related party | 751,288 | |||||||||||
| Repayment of notes payable – related party | (1,000 | ) | ||||||||||
| Net cash provided by financing activities | 6,323,264 | 6,415,251 | ||||||||||
| Net decrease in cash and cash equivalents | (45,109 | ) | (260,473 | ) | ||||||||
| Cash and cash equivalents, beginning of period | 465,052 | 950,005 | ||||||||||
| Cash and cash equivalents, end of period | $ | 419,943 | $ | 689,532 | ||||||||
| Supplemental disclosure of cash flow data: | ||||||||||||
| Interest paid, net of amount capitalized | $ | 134,740 | $ | 92,113 | ||||||||
See Notes to Condensed Consolidated Financial Statements.
F-4
WHITEHALL LIMITED, INC. AND SUBSIDIARIES
NOTES TO 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 December 31, 2002, and its results of operations for the nine and three months ended December 31, 2002 and 2001 and cash flows for the nine months ended December 31, 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 from March 31, 2002 that was previously filed with the SEC. | |||
| The results of the Company’s operations for the nine and three months ended December 31, 2002 are not necessarily indicative of the results of operations to be achieved 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 nine and three months ended December 31, 2002 and 2001 because there were no dilutive securities outstanding. |
F-5
WHITEHALL LIMITED, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
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 collateralized 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. During the nine months ended December 31, 2002, a Company related to the principal stockholder advanced the Company $250,000 for working capital purposes. These advances are due on demand and bear interest at 12% payable monthly. |
Note 4 - Employee stock plan:
| During the nine months ended December 31, 2002, the Company issued 976,500 shares of common stock having a value of $126,945 under its employee stock plan. |
* * *
F-6
EXHIBIT INDEX
| Exhibit | ||
| Number | Description | |
| 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. |
