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FORM 10-Q--QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the period ended June 30, 1998
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of
the
Securities Exchange Act of 1934
For the transition period from __________ to _______________
Commission File Number: 33-18089-A
HICKORY LENDERS, LTD.
(Exact name of Registrant as specified in its charter)
Tennessee 62-1336905
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification)
One Belle Meade Place, 4400 Harding Road, Suite 500,
Nashville, Tennessee 37205 (Address of principal executive
office) (Zip Code)
(615) 292-1040
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1)
has filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding
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 at least the past 90 days.
YES X NO ___
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PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
HICKORY LENDERS, LTD.
(A Tennessee Limited Partnership)
FINANCIAL STATEMENTS
For The Three and Six Months Ended June 30, 1998 and 1997
INDEX
Financial Statements:
Balance Sheets 3
Statements of Operations 4
Statements of Cash Flows 5
Notes to Financial Statements 6
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HICKORY LENDERS, LTD.
(A Limited Partnership)
BALANCE SHEETS
(Unaudited)
June 30, 1998 December 31, 1997
------------- -------------
ASSETS
CASH $ 49,412 $ 322,741
NOTE RECEIVABLE FROM AFFILIATE 1,458,601 1,833,601
Total Assets $ 1,508,013 $ 2,156,342
========== ==========
PARTNERS' EQUITY
PARTNERS' EQUITY:
Limited partners (4,200
units outstanding) $ 1,508,013 $ 2,156,342
General partner - -
Total partners' equity $ 1,508,013 $ 2,156,342
========== ==========
<FN>
See notes to financial statements.
/TABLE
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HICKORY LENDERS, LTD.
(A Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Quarter to Date Year to Date
Ending JUNE 30,
----------------------------------
1998 1997 1998 1997
REVENUE:
Interest $ - $ 5,269 $ 2,880 $ 5,269
EXPENSES:
State Income Tax - 2,968 - 2,968
Legal & Accounting Fees 4,572 2,972 11,472 11,172
General & Admin. Expenses - - - 888
Mortgage Servicing Fee 1,750 1,750 3,500 3,500
Amortization - 4,480 - 8,960
Total Expenses 6,322 12,170 14,972 27,488
NET LOSS $ (6,322) $(6,901) $(12,092) $(22,219)
<FN>
See notes to financial statements
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HICKORY LENDERS, LTD.
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Year-to-date
JUNE 30,
--------------------------
1998 1997
Cash Flows from Operating Activities:
Net Loss $ (12,092) $(22,219)
Adjustments to reconcile Net
Ioss to Net Cash used in
Operating Activities:
Amortization - 8,960
Net Cash used in
Operating Activities (12,092) (13,259)
Cash Flows from Financing Activities:
Distribution to Partners (636,237) (678,789)
Principal payments received 375,000 345,000
Net Cash used in Financing Activities: (261,237) (333,789)
Net Decrease in
Cash (273,329) (347,048)
CASH AT JANUARY 1, 322,741 374,088
CASH AT JUNE 30, $ 49,412 $ 27,040
========= ========
<FN>
See notes to financial statements.
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HICKORY LENDERS, LTD.
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For the Three and Six Months Ended June 30, 1998 and 1997
(Unaudited)
A.ACCOUNTING POLICIES
The unaudited financial statements presented herein have
been prepared in accordance with the instructions to Form
10-Q and do not include all of the information and note
disclosures required by generally accepted accounting
principles. These statements should be read in
conjunction with the financial statements and notes thereto
included in the Partnership's Form 10-K for the year ended
December 31, 1997. In the opinion of management, such
financial statements include all adjustments, consisting
only of normal recurring adjustments, necessary to
summarize fairly the Partnership's financial position
and results of operations. The results of operations for
the six month period ended June 30, 1998 may not be
indicative of the results that may be expected for the
year ending December 31, 1998.
B.RELATED PARTY TRANSACTIONS
The General Partner and its affiliates have been
actively involved in managing the Partnership's operations.
Compensation earned for these services in the first six
months were as follows:
1998 1997
-------- -------
Mortgage Servicing Fee $3,500 $ 3,500
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HICKORY LENDERS, LTD.
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS(continued)
For the Three and Six Months Ended June 30, 1998 and 1997
(Unaudited)
C. COMPREHENSIVE INCOME
Effective January 1, 1998, the Partnership adopted Statement
of Financial Accounting Standards (SFAS) No. 130. Reporting
Comprehensive Income. SFAS No. 130 establishes standards for
reporting and display of comprehensive income and its components in
a full set of general-purpose financial statements and requires
that all components of comprehensive income be reported in a
financial statement that is displayed with the same prominence as
other financial statements. Comprehensive income is defined as the
change in equity of a business enterprise, during a period,
associated with transactions and other events and circumstances
from non-owner sources. It includes all changes in equity during
a period except those resulting from investments by owners and
distributions to owners. During the three and six month periods
ended June 1998 and 1997, the Partnership had no components of
comprehensive income. Accordingly, comprehensive income for each
of the periods was the same as net loss.
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Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The Partnership's primary business is to lend monies to
Hickory Hills, Ltd. Due to the nature of the Registrant, all
activity is a result of transactions in Hickory Hills, Ltd.,
the loan holder. The Registrant continues its policy begun
in 1991 of not recognizing interest income for financial
reporting purposes on the Lender Financing. This policy was
accepted upon the recommendation of the Registrant's principal
accountants because there had not been any payments made on
the Lender Financing since inception and there has been no
independent verification of the value of the land held as
collateral. Interest income will be recognized for tax and
loan payment purposes.
The Note receivable to Affiliate comes due on December 31,
1998. The General Partner plans to negotiate an extension of
the loan term. The General Partner does not expect the
Borrower to have the liquidity to retire the debt in full on
December 31, 1998. Because the Borrower and the Registrant
share the same general partner, it may be necessary to appoint
an independent party to represent the general partner for the
Registrant, the Borrower or both during the loan negotiations.
However, if the loan term is not extended, the lack of payment
would constitute a default on the loan agreement. In such an
event the Registrant is required to foreclose the loan.
Currently, the Partnership has not foreclosed or accelerated
the amounts due under the loan agreement.
Overall operations of the Registrant have not fluctuated
significantly from previous quarters.
During the first quarter of 1998, the Borrower sold one
lakefront lot at the Hendersonville Property for $75,000. and
71.53 acres of the Nashville Property for $357,650. From these
proceeds, $375,000 in interest was paid to the Registrant.
The remaining proceeds were retained to cover operating
expenses.
During the first six months of 1997, the Borrower sold 16 lots
at the Hendersonville Property for $23,500 per lot and one
lakefront lot for $60,000. From these proceeds, $345,000 in
interest was paid to the Lender. The remaining proceeds were
retained to cover operating expenses.
The General Partner continues to monitor the impact of year
2000 issues on our computer systems and applications and has
developed a remediation plan. We expect the cost of upgrading
computers and software to be immaterial to the Registrant.
FINANCIAL CONDITION
LIQUIDITY
At July 31, 1998, the Registrant had approximately $47,261 in
cash reserves. These funds are expected to be sufficient
through 1998.
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PART II. OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 27 - Financial Data Schedule
(b) No 8-K's have been filed during this quarter.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
HICKORY LENDERS, LTD.
By: 222 HICKORY, LTD.
General Partner
222 PARTNERS, INC.
General Partner
Date: August 14, 1998 By:/s/ Steven D. Ezell
President
Date: August 14, 1998 By:/s/ Michael A. Hartley
Secretary/Treasurer