SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
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Quarterly Report Under Section 13 or 15 (d) of the
Securities Exchange Act of 1934
For Quarter Ended MARCH 31, 1996 Commission File No. 1-8249
LINCORP HOLDINGS, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 23-2161279
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
250 Park Avenue
New York, New York 10017
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(Address of Principal Executive (Zip Code)
Offices)
Registrant's Telephone Number,
Including Area Code: (212) 599-0465
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(Former Name, Former Address and Former Fiscal Year, if Changed Since
Last Report)
Indicated 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 th epreceding 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
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Indicate the number of shares outstanding or each of the issuer's classes of
common stock, as of the latest practicable date.
1,730,559 Shares of Common Stock Outstanding at May 1, 1996
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PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The condensed financial statements included herein have been prepared
by the registrant from the books of Lincorp Holdings, Inc. without audit (except
for the Balance Sheet as of December 31, 1995), pursuant to the rules and
regulations of the Securities and Exchange Commission. This information, which
is subject to year-end adjustments, reflects all adjustments which are, in the
opinion of management, necessary to present fairly the results for the interim
periods. Although the registrant believes that the disclosures are adequate to
make the information presented not misleading, certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. It is suggested that these condensed
financial statements be read in conjunction with the financial statements and
the notes thereto included in the registrant's latest Annual Report on Form
10-K.
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LINCORP HOLDINGS, INC.
BALANCE SHEETS
(DOLLARS IN THOUSANDS)
March 31, December 31,
1996 1995
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(Unaudited)
ASSETS
Cash................................................ $ 314 $ 660
Investment in real estate assets, net............... 15,665 15,517
Other assets........................................ 4 4
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$ 15,983 $ 16,181
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LIABILITIES AND STOCKHOLDERS' DEFICIT
Liabilities:
Debt on real estate, including accrued interest... $ 16,057 $ 15,663
Other borrowed funds, including accrued interest.. 160,885 157,989
Other liabilities................................. 3,795 4,195
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180,737 177,847
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Commitments and contingent liabilities
Stockholders' deficit:
Preferred stock, Series A;
200 shares authorized;
no shares issued and outstanding................. - -
Preferred stock, $.01 par value;
10,000 shares authorized;
no shares issued and outstanding................. - -
Common stock, $.01 par value;
1,990,000 shares authorized;
1,730,559 shares issued and outstanding.......... 17 17
Capital contributed in excess of par value......... 148,434 148,434
Accumulated deficit................................ (313,205) (310,117)
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(164,754) (161,666)
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$ 15,983 $ 16,181
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The accompanying notes are an integral part of these financial statements.
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LINCORP HOLDINGS, INC.
STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
UNAUDITED
Three Months
Ended March 31,
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1996 1995
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Income:
Rental income.............................................. $ 115 $ 117
Equity in operating results of real estate joint ventures.. 40 97
Interest income............................................ 23 32
Other income............................................... 89 3
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Total income........................................ 267 249
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Expenses:
Interest expense........................................... 3,290 3,234
General and administrative expense......................... 56 59
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Total expenses...................................... 3,346 3,293
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Loss before income taxes...................................... (3,079) (3,044)
Provision for income taxes.................................... 9 15
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Net loss...................................................... $(3,088) $(3,059)
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Loss per share of Common Stock outstanding.................... $ (1.78) $ (1.77)
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Weighted average shares of Common Stock outstanding........... 1,731 1,731
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The accompanying notes are an integral part of these financial statements.
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LINCORP HOLDINGS, INC.
STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
UNAUDITED
Three Months
Ended March 31,
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1996 1995
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OPERATING ACTIVITIES
Net loss............................................... $(3,088) $(3,059)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Equity in operating results of real estate
joint ventures............................ (40) (97)
Increase in marketable securities............ - (14)
Decrease in other assets..................... - 3
Increase in accrued interest payable......... 3,290 3,146
Decrease in other liabilities................ (400) -
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Net cash used in operating activities.................. (238) (21)
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INVESTING ACTIVITIES
Investment in real estate assets....................... (108) -
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Net cash used in investing activities.................. (108) -
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Net decrease in cash................................... (346) (21)
Cash, beginning of period.............................. 660 125
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Cash, end of period.................................... $ 314 $ 104
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SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest.................................... $ - $ 118
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Income taxes................................ $ 9 $ 15
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The accompanying notes are an integral part of these financial statements.
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LINCORP HOLDINGS, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - BUSINESS
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Effective January 1, 1995, as a result of an improving real estate market, the
Company reformulated their business plan to focus on such activity.
Accordingly, effective January 1, 1995, the Company restatd its balance sheet to
reflect the real estate operations as a continuing operation. The restatement
had no effect on prior period Statements of Operations but effective January 1,
1995, the Company recognized the results of its real estate operations as part
of its results from continuing operations. This included recording its equity
in the operating results of its real estate joint ventures in accordance with
the equity method of accounting as well as recording rental and other income and
expenses from its other real estate activities.
NOTE 2 - LIQUIDITY AND GOING CONCERN
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At March 31, 1996, the Company had outstanding $160.9 million of indebtedness,
including interest payable of $55.7 million, (collectively the "Indebtedness")
under its Senior, Subordinated and Junior credit facilities. The Company's
parent company, Unicorp Energy Corporation ("UEC") , holds $147.2 million of the
Indebtedness and Hees International Bancorp, Inc. which currently owns an
indirect 24.6% non-voting equity interest in UEC, holds the balance of the
indebtedness, $13.7 million. The Company is in payment default under each of
the above mentioned credit facilities. These credit facilities are secured by
a security interest in all of the Company's assets.
The Company's sources of operating funds during the three months ended March
31, 1996 and to date have been primarily funds from rental income. The assets
generating the funds being utilized by the Company are part of the
collateral package securing the above described credit facilities. Unless the
Company's lenders are prepared to continue to defer in realizing on the pledged
collateral and allow the Company to utilize the proceeds from such collateral to
fund its ongoing operations, the Company will be unable to continue as a going
concern.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND GOING CONCERN
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At March 31, 1996, the Company had outstanding $160.9 million of indebtedness,
including interest payable of $55.7 million, (collectively the "Indebtedness")
under its Senior, Subordinated and Junior credit facilities. The Company's
parent company, Unicorp Energy Corporation ("UEC"), holds $147.2 million of the
Indebtedness and Hees International Bancorp, Inc. which currently owns an
indirect 24.6% non-voting equity interest in UEC, holds the balance of the
Indebtedness, $13.7 million. The Company is in payment default under each of
the above mentioned credit facilities. These credit facilities are secured by
a security interest in all of the Company's assets.
The Company's sources of operating funds during the three months ended March
31, 1996 and to date have been primarily funds from rental income. The assets
generating the funds being utilized by the Company are part of the collateral
package securing the above described credit facilities. Unless the Company's
lenders are prepared to continue to defer in realizing on the pledged collateral
and allow the Company to utilize the proceeds from such collateral to fund its
ongoing operations, the Company will be unable to continue as a going concern.
RESULTS OF OPERATIONS
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Three Months Ended March 31, 1996 Compared to the Three Month Ended March 31,
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1995
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For both the three months ended March 31, 1996, and 1995 the Company had a net
loss of $3.1 million. There were no significant changes in the items comprising
the net loss for the three months ended March 31, 1996 and 1995.
FINANCIAL POSITION
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Material Changes Since December 31, 1995
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There was no significant change in the Company's financial position since
December 31, 1995.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There have been no material developments with respect to litigation.
ITEM 2. CHANGES IN SECURITIES
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
(a) At March 31, 1996, the Company had outstanding $160.9 million of
indebtedness, including interest payable of $55.7 million, (collectively
the "Indebtedness") under its Senior, Subordinated and Junior credit
facilities. The Company's parent company, Unicorp Energy Corporation
("UEC"), holds $147.2 million of the Company's Indebtedness and Hees
International Bancorp, Inc. which currently owns an indirect 24.6% non-
voting equity interest in UEC, holds the balance of the Indebtedness, $13.7
million. The Company is in payment default under each of the above
mentioned credit facilities. These credit facilities are secured by a
security interest in all of the Company's assets.
(b) Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Not applicable.
(b) None filed.
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SIGNATURE
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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.
LINCORP HOLDINGS, INC.
Dated: May 14, 1996 /s/ Jack R. Sauer
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Jack R. Sauer
Chief Financial Officer
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