SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: (Date of earliest event reported): December 8, 1999
PARKS AMERICA! INC.
----------------------------------------------------
(Exact name of Registrant as specified in its charter)
000-23712
----------------------
(Commission file number)
Nevada 91-1395124
- ------------------------------- ---------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation)
P.O. Box 1400, Eagle, Idaho 83616
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(Address of principal executive offices) (Zip code)
(208) 463-1300
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(Registrant's telephone number, including area code)
Wincanton Corporation
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(Former name or former address, if changed since last report)
1
Item 1. Changes in Control of Registrant
As a result of the acquisition of Parks America! Inc. and the reverse split
of 1:100, there was a change in control of the Registrant. The following persons
are now the controlling shareholders of the Registrant.
Name No. Of Shares Percentage
- ------------------ -------------- -----------
Robert Klosterman 4,485,861 26.26%
2686 Park Lane
Eagle, ID 83616
Larry Eastland 4,037,450 23.63%
1901 Spanish Bay
Eagle, ID 83616
Item 2. Acquisition or Disposition of Assets
On November 15, 1999, the Registrant acquired 12,000,000 LLC interests of
Northwest Parks LLC, an Idaho Limited Liability Company (the "Company"), such
constituting all of the issued and outstanding LLC interests of the Company in
exchange for 12,000,000 post 1:100 reverse split common stock. None of the
parties to this transaction were related parties.
The Company was formed as a limited liability company on March 28, 1996
under the laws of the State of Idaho for the purpose of constructing, owning and
operating multi-faceted theme parks along with the related entertainment,
retail, hospitality and recreational facilities. Since its inception, the
Company has been in its development stage and has devoted its efforts to the
development of the theme park concept, identifying potential sites, preparing
feasibility and market studies, investigating financial models, raising initial
capital and acquiring the rights to properties that management deemed suitable
for theme park sites.
On March 28, 1996, the Company acquired a 16.67% interest in BW Partners
LLC (BWP) and certain other assets and rights valued at $48,014 (based upon the
amounts recorded by BWP)from a member in exchange for a 25% interest in the
Company. The Company from whom the BWP interest was acquired is a corporation in
which a managing member of the Company held a 20% interest at the time of the
acquisition. On January 8, 1998, the Company acquired the remaining 83.33%
interest in BWP in exchange for an 8.75% interest in the Company.
The Company formed Sweetwater Holdings LLC (SWH) on January 9, 1997, for
the purpose of acquiring approximately 12 acres of land and a dwelling in Canyon
Country, Idaho, known as The Idaho Center property. The Company acquired a 99%
interest in SWH, with the remaining 1% held by a majority member of the Company.
In January 1999, SWH transferred approximately 1.5 acres of the property to the
Company and the Company sold SWH and the remaining approximately 10.5 acres to a
third party.
2
The Company participated in the formation of Crossroads Convenience Center
LLC (CCC) on June 18, 1998. Based upon the operating agreement, the Company
owned a 10% interest in CCC, after transferring a 15% interest in CCC to an
individual who is a majority member in the Company in partial satisfaction of
interest accrued on a note that was owed to the individual by the Company. The
Company's interest in CCC was acquired in exchange for the 1.5 acres of property
acquired from SWH and certain development costs incurred on CCC's behalf.
In January 1999, the Company, along with its two managing members, formed
Magic Valley Parks LLC (MVP), with the Company acquiring a 98% ownership
interest.
Item 5. Other Events
On December 13, 1999, the Registrant filed Articles of Amendment to its
Articles of Incorporation with the Secretary of State of Washington whereby it:
a) changed its name from Wincanton Corporation to Parks America! Inc.,
and
b) reduced its common share capital from 15,000,000 shares of no par
common stock to 150,000 shares of no par common stock by means of a
100 to 1 reverse stock split.
On December 13, 1999, Messers. Henri Horby and Neil Hornby resigned as
directors of the Company. Elected to serve until the next annual meeting of
shareholders were Messers. Larry Eastland and Robert Klosterman.
On December 13, 2000, the Registrant filed Articles of Amendment to its
Articles of Incorporation with the Secretary of State for the State of
Washington whereby increased its authorized shares of common stock to 30,000,000
and created a par value of $.0001 per share.
Item 7. Financial Statements & Exhibits
a. Financial Statements of Business Acquired
1. Audited Financial Statements of Northwest Parks LLC and
Subsidiaries for the years ended December 31, 1996, 1997 and
1998.
2. Financial Statements of Northwest Parks LLC and Subsidiaries for
the nine months ended September 30, 1999 and 1998.
b. Proforma Financial Information
Because the Registrant disposed of nearly all of its assets and liabilities
in anticipation of the acquisition of Northwest Parks LLC and Subsidiaries, no
proforma financial information is being furnished as the financial information
of Northwest Parks LLC and Subsidiaries would mirror any proforma financial
information.
3
c. Exhibits
3.1 Articles of Amendement of Wincanton Corporation
3.2 Amended and Restated Articles of Incorporation as filed on March 24,
2000
10.1 Purchase Agreement
21.1 Subsidiaries of the Registrant
4
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 hereunto duly authorized.
PARKS AMERICA! INC.
By: /s/ Larry Eastland
------------------------
Larry Eastland
Date: April 10, 2000
5
NORTHWEST PARKS LLC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
TABLE OF CONTENTS
TITLE PAGE
------- ------
INDEPENDENT AUDITOR'S REPORT........................................... 1
AUDITED CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS......................................... 2 - 3
CONSOLIDATED STATEMENTS OF OPERATIONS............................... 4
CONSOLIDATED STATEMENTS OF MEMBER'S CAPITAL (DEFICIENCY)............ 5
CONSOLIDATED STATEMENTS OF CASH FLOWS............................... 6 - 7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.......................... 8 - 14
Independent Auditor's Report
To the Members
NORTHWEST PARKS LLC
Boise, Idaho
We have audited the accompanying Consolidated Balance Sheets of NORTHWEST PARKS
LLC AND SUBSIDIARIES (a Development Stage Company) as of December 31, 1998 and
1997, and the related Consolidated Statements of Operations, Members' Capital
(Deficiency) and Cash Flows for the years ended December 31, 1998 and 1997, and
for the period March 28, 1996 (inception) to December 31, 1996. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the accompanying consolidated financial statements referred to
above present fairly, in all material respects, the consolidated financial
position of NORTHWEST PARKS LLC AND SUBSIDIARIES (a Development Stage Company)
as of December 31, 1998 and 1997, and the results of their operations and their
cash flows for the years ended December 31, 1998 and 1997, and the period March
28, 1996 (inception) to December 31, 1996, in conformity with generally accepted
accounting principles.
ARONSON, FETRIDGE & WEIGLE
Rockville, Maryland
August 28, 1999
NORTHWEST PARKS LLC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1997, 1998 AND JUNE 30, 1999
ASSETS
June 30,
December 31, 1999
1997 1998 (Unaudited)
------ ------ ------------
CURRENT ASSETS
Cash (Note 1) $ 753 $ 114 $ 60,266
Accounts receivable - managing members (Note 2) 52,000 57,609 30,600
--------- -------- --------
Total current assets 52,753 57,723 90,866
--------- -------- --------
PROPERTY AND EQUIPMENT, AT COST (NOTES 1 AND 4)
Land 648,772 649,622 -
Buildings 361,594 269,344 -
Furniture, fixtures and equipment 50,133 50,133 72,336
--------- -------- --------
Total 1,060,499 969,099 72,336
Less: Accumulated depreciation and amortization 18,446 37,390 23,311
--------- -------- --------
Net property and equipment 1,042,053 931,709 49,025
--------- -------- --------
OTHER ASSETS
Deposits 72,620 22,220 22,020
Capitalized project development costs (Note 1) 138,406 149,894 122,423
Land options (Note 3) - 51,000 57,000
Investment in affiliate (Note 5) - - 40,444
Other 245 245 245
--------- -------- --------
Total other assets 211,271 223,359 242,132
--------- -------- --------
TOTAL ASSETS $ 1,306,077 $ 1,212,791 $ 382,023
========= ========= ========
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
2
NORTHWEST PARKS LLC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1997, 1998 AND JUNE 30, 1999
LIABILITIES AND MEMBERS' CAPITAL
June 30,
December 31, 1999
1997 1998 (Unaudited)
------- ------- -----------
CURRENT LIABILITIES
Notes payable - members (Note 4) $ 615,000 $ 615,000 $ -
Notes payable - others (Note 4) 350,000 350,000 -
Loan payable - managing member - 5,209 -
Accounts payable 39,828 75,510 42,515
Accrued interest - members (Note 4) 198,300 346,850 79,683
Accrued interest - others 16,000 66,000 -
Accrued rent - land lease 46,749 - -
Deferred revenue - construction management fee (Note-5) - - 59,750
--------- ---------- ---------
Total current liabilities 1,265,877 1,458,569 181,948
--------- ---------- ---------
MINORITY INTEREST - - 145,000
--------- ---------- ---------
COMMITMENTS AND CONTINGENCIES (NOTES 3, AND 6)
MEMBERS' CAPITAL (DEFICIENCY) (NOTE 7)
Contributed 810,000 979,416 979,416
Losses accumulated during development stage (769,800) (1,225,194) (924,341)
--------- ---------- ---------
Total members' capital (deficiency) 40,200 (245,778) 55,075
--------- ---------- ---------
TOTAL LIABILITIES AND MEMBERS' CAPITAL (DEFICIENCY) $1,306,077 $ 1,212,791 $ 382,023
========= ========== =========
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
3
NORTHWEST PARKS LLC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE PERIOD MARCH 28, 1996 (INCEPTION) TO DECEMBER 31, 1996,
THE YEARS ENDED DECEMBER 31,1997 AND 1998, AND
THE SIX MONTH PERIOD ENDED JUNE 30, 1999
March 28, Cumulative Six From
1996 From Months Inception
(Inception) Inception Ended to
to Years Ended to June 30, June 30,
December December 31, December 1999 1999
31, 1996 1997 1998 31, 1998 (Unaudited) (Unaudited)
---------- ------ ------ ----------- ------------- -----------
REVENUE
Miscellaneous $ - $ 1,186 $ - $ 1,186 $ - $ 1,186
Gain on sale of land - - - - 379,857 379,857
Gain on transfer of interest in - - - - 50,082 50,082
--------- --------- -------- ---------- --------- -----------
Total revenue - 1,186 - 1,186 429,939 431,125
--------- --------- -------- ---------- --------- -----------
EXPENSES
General and administrative 173,511 168,774 255,878 598,163 121,086 719,249
Interest - 274,450 199,516 473,966 8,000 481,966
Loss on sale of land - 117,265 - 117,265 - 117,265
--------- --------- -------- ---------- --------- -----------
Total expenses 173,511 560,489 455,394 1,189,394 129,086 1,318,480
--------- --------- -------- ---------- --------- -----------
NET LOSS BEFORE INTEREST IN LOSS OF (173,511) (559,303) (455,394) (1,188,208) 300,853 (887,355)
INTEREST IN LOSS OF (11,912) (25,074) - (36,986) - (36,986)
--------- --------- -------- ---------- --------- -----------
NET LOSS $ (185,423) $(584,377) $(455,394) $ (1,225,194) $ 300,853 $(924,341)
========= ========= ======== ========== ========= ===========
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
4
NORTHWEST PARKS LLC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF MEMBERS' CAPITAL (DEFICIENCY)
FOR THE PERIOD MARCH 28, 1996 (INCEPTION) TO DECEMBER 31, 1996,
THE YEARS ENDED DECEMBER 31,1997 AND 1998,
AND THE SIX MONTH PERIOD ENDED JUNE 30, 1999
Losses
Accumulated
During
Contributed Development
Capital Stage Total
----------- ------------- ---------
MEMBERS' EQUITY, MARCH 28, 1996 $ - $ - $ -
CAPITAL CONTRIBUTIONS IN CASH 325,000 - 325,000
CAPITAL CONTRIBUTION OF A 16.67% INTEREST IN A LIMITED LIABILITY 85,000 - 85,000
CAPITAL CONTRIBUTION OF LAND (NOTE 7) 300,000 - 300,000
NET LOSS FOR THE PERIOD MARCH 28, 1996 (INCEPTION) TO DECEMBER - (185,423) (185,423)
---------- ----------- ----------
MEMBERS' CAPITAL, DECEMBER 31, 1996 710,000 (185,423) 524,577
CAPITAL CONTRIBUTIONS IN CASH 100,000 - 100,000
NET LOSS FOR 1997 - (584,377) (584,377)
---------- ----------- ----------
MEMBERS' CAPITAL (DEFICIENCY), DECEMBER 31, 1997 810,000 (769,800) 40,200
CAPITAL CONTRIBUTIONS IN CASH 72,141 - 72,141
CAPITAL CONTRIBUTION OF AN 83.33% INTEREST IN A LIMITED 97,275 - 97,275
NET LOSS FOR 1998 - (455,394) (455,394)
---------- ----------- ----------
MEMBERS' CAPITAL (DEFICIENCY), DECEMBER 31, 1998 979,416 (1,225,194) (245,778)
NET INCOME FOR THE SIX MONTHS ENDED JUNE 30, 1999 (UNAUDITED) - 300,853 300,853
---------- ----------- ----------
MEMBERS' CAPITAL (DEFICIENCY), JUNE 30, 1999 (UNAUDITED) $ 979,416 $ (924,341) $ 55,075
========== =========== ==========
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
5
NORTHWEST PARKS LLC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE PERIOD MARCH 28, 1996 (INCEPTION) TO DECEMBER 31, 1996,
THE YEARS ENDED DECEMBER 31,1997 AND 1998,
AND THE SIX MONTH PERIOD ENDED JUNE 30, 1999
March 28, Cumulative Six Cumulative
1996 From Months From
(Inception) Inception Ended Inception
to to June 30, To June 30,
December December 1999 1999
31, 1996 1997 1998 31, 1998 (Unaudited) Unaudited
----------- --------- --------- ----------- ------------ ----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income $ (185,423) $(584,377) $(455,394) $(1,225,194) $ 300,853 $ (924,341)
Adjustments to reconcile net income to net cash
Loss (gain) on sale of land - 117,265 - 117,265 (379,857) (262,592)
Depreciation and amortization 3,337 15,509 19,344 38,190 8,040 46,230
Interest in loss of equity investee 11,912 25,074 - 36,986 - 36,986
Building transferred in settlement of an - - 92,250 92,250 - 92,250
Rent cancellation upon acquisition of LLC - - 50,526 50,526 - 50,526
Gain on sale of interest in equity in - - - - (50,082) (50,082)
Write-off of capitalized development costs - - - - 27,217 27,217
Increase (decrease) in liabilities
Accounts payable 3,297 36,531 35,682 75,510 (32,995) 42,515
Accrued expenses 56,093 (9,344) - 46,749 - 46,749
Accrued interest - members - 198,300 148,550 346,850 (156,417) 190,433
Accrued interest - others - 16,000 50,000 66,000 (66,000) -
---------- ---------- --------- ---------- ---------- ----------
Net cash used by operating activities (110,784) (185,042) (59,042) (354,868) (349,241) (704,109)
---------- ---------- --------- ---------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Payment of capitalized development costs (41,337) (49,055) (11,488) (101,880) - (101,880)
Purchase of property and equipment (35,691) (14,442) - (50,133) (22,203) (72,336)
Loans to members (90,000) (118,450) (22,696) (231,146) - (231,146)
Repayment of loans to members - 156,450 17,087 173,537 27,009 200,546
Proceeds from sale of land - 182,735 - 182,735 1,209,200 1,391,935
Purchase of land - (648,772) (850) (649,622) - (649,622)
Purchase of buildings - (361,594) - (361,594) - (361,594)
Deposits (51,286) (23,020) - (74,306) - (74,306)
Deposits refunded - 1,286 50,000 51,286 - 51,286
Acquisition of other assets - (245) - (245) - (245)
Payments for land options - - (51,000) (51,000) (6,000) (57,000)
---------- ---------- --------- ---------- ---------- ----------
Net cash used by investing activities (218,314) (875,107) (18,947) (1,112,368) 1,208,006 95,638
---------- ---------- --------- ---------- ---------- ----------
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
6
NORTHWEST PARKS LLC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE PERIOD MARCH 28, 1996 (INCEPTION) TO DECEMBER 31, 1996,
THE YEARS ENDED DECEMBER 31,1997 AND 1998,
AND THE SIX MONTH PERIOD ENDED JUNE 30, 1999
March 28, Cumulative Six Cumulative
1996 From Months From
(Inception) Inception Ended Inception
to to June 30, To June 30,
December December 1999 1999
31, 1996 1997 1998 31, 1998 (Unaudited) Unaudited
---------- -------- -------- ----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes and loans - members $ 9,000 $ 615,000 $ 5,209 $ 629,209 $ - $ 629,209
Repayment of notes and loans - members - (9,000) - (9,000) (620,209) (629,209)
Proceeds from notes payable - others - 350,000 - 350,000 - 350,000
Repayment of notes payable - others - - - - (350,000) (350,000)
Capital contributions in cash 325,000 100,000 72,141 497,141 - 497,141
Proceeds of minority interest investment - - - - 145,000 145,000
Proceeds from equity investee - - - - 26,596 26,596
---------- ----------- -------- ---------- ---------- ---------
Net cash provided by financing activities 334,000 1,056,000 77,350 1,467,350 (798,613) 668,737
---------- ----------- -------- ---------- ---------- ---------
NET INCREASE (DECREASE) IN CASH 4,902 (4,149) (639) 114 60,152 60,266
CASH, BEGINNING OF PERIOD - 4,902 753 - 114 -
---------- ----------- -------- ---------- ---------- ---------
CASH, END OF PERIOD $ 4,902 $ 753 $ 114 $ 114 $ 60,266 $ 60,266
========== =========== ======== ========== ========== =========
SUPPLEMENTAL CASH FLOW INFORMATION
Actual cash payments for interest $ - $ 60,150 $ 966 $ 61,116 $ 233,417 $ 294,533
========== =========== ======== ========== ========== =========
NONCASH INVESTING AND FINANCING ACTIVITIES
Capital contributions as follows:
Land $ 300,000 $ - $ - $ 300,000 $ - $ 300,000
A 16.67% interest in a limited liability 36,986 - - 36,986 - 36,986
Capitalized development costs by members of 48,014 - - 48,014 - 48,014
A 83.33% interest in an LLC and a 25% - - 97,275 97,275 - 97,275
Interest due to a member exchanged for a 15% - - - - (110,750) (110,750)
The Company exchanged land for a 25% interest - - - - 67,958 67,958
---------- ----------- -------- ---------- ---------- ---------
Total $ 385,000 $ - $ 92,275 $ 482,275 $ (42,792) $ 439,483
========== =========== ======== ========== ========== =========
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
7
NORTHWEST PARKS LLC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996, 1997, 1998, AND JUNE 30, 1999
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
(A) Organization and principles of consolidation
Northwest Parks LLC (the Company) was formed as a limited liability
company on March 28, 1996 under the laws of the State of Idaho for the
purpose of constructing, owning and operating multi-faceted theme parks
along with the related entertainment, retail, hospitality and recreational
facilities. Since its inception, the Company has been in its development
stages and has devoted its efforts to development of the theme park
concepts, identifying potential sites, preparing feasibility and market
studies, investigating financing methods, raising initial capital and
acquiring the rights to properties that management deemed suitable for
theme park sites. These efforts have been pursued through the Company as
well as through affiliated and controlled subsidiary entities.
In 1996, the Company acquired 100% of State Street Holdings LLC (SSH)
in exchange for a 3% interest in the Company. This transaction was
accounted for as a purchase. The lone asset of SSH was a parcel of land in
Boise, Idaho, which the Company sold in August 1997. As a result of the
land sale, SSH was liquidated and ceased existence.
On March 28, 1996, the Company acquired a 16.67% interest in BW
Partners LLC (BWP) and certain other assets and rights valued at $48,014
based upon the amounts recorded by BWP from a member in exchange for a 25%
interest in the Company. The Company from whom the BWP interest was
acquired is a corporation in which a managing member of the Company held a
20% interest at the time of the acquisition. On January 8, 1998, the
Company acquired the remaining 83.33% interest in BWP in exchange for an
8.75% interest in the Company, which was accounted for as a purchase.
The Company formed Sweetwater Holdings LLC (SWH) on January 9, 1997,
for the purpose of acquiring approximately 12 acres of land and a dwelling
in Canyon County, Idaho, known as The Idaho Center property. The Company
acquired a 99% interest in SWH, with the remaining 1% held by a minority
member of the Company. This transaction was accounted for as a purchase. In
January 1999, SWH transferred approximately 1.5 acres of the property to
the Company and the Company sold SWH with the remaining approximately 10.5
acres to a third party.
The Company participated in the formation of Crossroads Convenience
Center LLC (CCC) on June 18, 1998. Based upon the operating agreement, the
Company owned a 10% interest in CCC, after transferring a 15% interest in
CCC to an individual who is a minority member in the Company in partial
satisfaction of interest accrued on a note that was owed to the individual
by the Company (Note 4). The Company's interest in CCC was acquired in
exchange for the 1.5 acres of property acquired from SWH and certain
development costs incurred on CCC's behalf.
In January 1999, the Company, along with its two managing members,
formed Magic Valley Parks LLC (MVP), with the Company acquiring a 98%
ownership interest. This transaction was accounted for as a purchase.
8
NORTHWEST PARKS LLC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996, 1997, 1998, AND JUNE 30, 1999
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(A) Organization and principles of consolidation (continued)
The accompanying consolidated financial statements include all of the
accounts and activities of the Company and its subsidiaries for the period
in which the majority ownership rested with the Company. This includes SSH,
BWP, SWH and MVP. Affiliates in which the Company did not have a majority
ownership interest, which includes BWP prior to January 8, 1998, and CCC,
have been accounted for by the equity method of accounting. All significant
intercompany transactions and balances have been eliminated in
consolidation.
(B) Use of accounting 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
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
(C) Cash and cash equivalents
For purposes of financial statement presentation, the Company
considers all highly liquid debt instruments with initial maturities of
ninety days or less to be cash equivalents. From time to time, the Company
maintains cash balances which may exceed Federally insured limits. The
Company does not believe that this results in any significant credit risk.
(D) Property and equipment
Property and equipment are recorded at original cost to the Company
and are depreciated over the estimated useful lives using the straight-line
method.
(E) Financial instruments
The fair value of all financial instruments included in the
consolidated financial statements is estimated by management to approximate
their recorded carrying amounts.
(F) Income taxes
As a Limited Liability Company, all members recognize their respective
share of income or loss on their separate income tax returns. Accordingly,
accruals for income taxes have not been included in the accompanying
financial statements.
9
NORTHWEST PARKS LLC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996, 1997, 1998, AND JUNE 30, 1999
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(G) Operating segments
The Company has been in a development stage since its inception and
operates in only one business segment.
(H) Capitalized development costs
The Company has capitalized and deferred direct costs incurred for
feasibility, market and site studies, promotional materials and preliminary
site development costs including design, engineering and architectural
drawings related to specific theme park sites. When it is determined that a
site or project is not suitable, the capitalized development costs are
expensed. No such costs were written-off during 1996, 1997, 1998. During
the six months ended June 30, 1999, costs totaling $27,217 were
written-off. Costs of projects that are ultimately constructed and operated
will either be allocated to park site assets or amortized over a five year
period upon commencement of operations.
NOTE 2 - ACCOUNTS RECEIVABLE - MANAGING MEMBERS
The Company has loaned its two managing members various sums at various
times either in the form of direct cash advances or by payments of expenses on
their behalf. These loans require no interest and have no specific terms of
repayment, though they are expected to be paid on a short-term basis.
NOTE 3 - LAND OPTIONS
On April 2, 1998, the Company acquired an option for $50,000 to purchase 68
acres of land in Canyon County, Idaho. Under the terms of the option, the
Company has the right to purchase the land for $2.4 million during the one year
period expiring April 2, 1999. The option was extended for a one year period
with a purchase price of $2.64 million by payment of an additional $50,000,
payable $3,000 per month for six months, $4,000 per month for five months and
$12,000 as a balloon payment in April 2000. The agreement provides for an
additional one year extension period for $50,000, payable monthly, with the
option price increased to $2.9 million. The amounts paid for the option and all
extensions are to be applied against the purchase price upon settlement.
In September 1998, the Company acquired an option to purchase 32 acres of
land in Burly, Idaho, at a purchase price of $1.5 million for $1,000. The option
expired in May 1999. In August 1999, the Company obtained an extension of the
option period to May 30, 2000 for an additional $1,000.
10
NORTHWEST PARKS LLC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996, 1997, 1998, AND JUNE 30, 1999
NOTE 4 - NOTES PAYABLE
(A) Notes payable to members are as follows:
June 30,
December 31, 1999
1997 1998 (Unaudited)
------ ------ ------------
Member holding a 1.5% interest in the
$78,000 dated January 10, 1997,
increased to $84,750 on July 10,
1998, bearing interest at 15%,
due July 10, 1999. Note paid in
April 1999 $ 65,000 $ 65,000 $ -
Member holding a 2.25% interest in the
Company in the original amount of
$660,000 dated January 10, 1997 and
due July 7, 1997, secured by a deed
of trust on a portion of the land at
"The Idaho Center." Interest at 20%.
Principal paid in April 1999, with
unpaid interest due in installments 550,000 550,000 -
-------- --------- --------
Total $ 615,000 $ 615,000 $ -
======== ========= ========
Interest accrued on the above notes totaled $198,300, $346,850 and
$79,683 at December 31, 1997, 1998 and June 30, 1999, respectively.
In April 1999, the Company transferred a 15% interest in Crossroads
Convenience Center LLC (Note 5) in partial payment of interest accrued on
the above $550,000 note payable at December 31, 1997 and 1998. The amount
of accrued interest considered paid was $110,750 and the apportioned basis
of the interest in the LLC was $60,668, resulting in a gain on the transfer
to the Company of $50,082.
11
NORTHWEST PARKS LLC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996, 1997, 1998, AND JUNE 30, 1999
NOTE 4 - NOTES PAYABLE (CONTINUED)
(B) Notes payable to others were as follows:
June 30,
December 31, 1999
1997 1998 (Unaudited)
------ ------ ------------
Note to the relatives of a managing $ 50,000 $ 50,000 $ -
Note dated January 10, 1997, due July 300,000 300,000 -
--------- --------- ------
Total $350,000 $ 350,000 $ -
========= ========= ======
NOTE 5 - INVESTMENT IN AFFILIATE
The Company owns a 10% interest in the Crossroads Convenience Center LLC (CCC)
which is located on "The Idaho Center" property in Canyon County, Idaho. Since
its inception, CCC has been developing and constructing a automobile service
center and convenience store and had no other significant operations. The
Company served as the construction manager for the Center for which it is to
receive a fee.
12
NORTHWEST PARKS LLC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996, 1997, 1998, AND JUNE 30, 1999
NOTE 6 - LEASES
The Company entered into a sublease arrangement with a joint venture that
was 75% owned by BW Partners LLC (BWP) and 25% owned by individuals related to a
managing member of the Company for 68 acres of land that commenced December 15,
1995 and had a term of 50 years. The lease required initial rent of $50,000 for
the period December 15, 1995 through June 30, 1996, and monthly rent of $12,000
for the period July 1 through December 31, 1996. Annual rent, payable monthly,
thereafter was as follows:
1997 $ 180,000
1998 216,000
1999 240,000
2000 264,000
Thereafter 264,000, increased annually by the
percentage increase in the
consumer price index
The sublease contained a purchase option granting the Company a right of
first refusal to purchase the property in the event the owner of the property
gave notice of an intention to sell. In addition, the lease contained a put
option to the owner of the property whereby upon the death of either of the
owners of the property the Company could be required to purchase a 20 acre tract
of the property. In 1997, one of the owners of the property died, and the
Company purchased a house and other buildings on the property for $92,500.
On January 10, 1998, the 83.33% members of BWP exchanged their interests in
BWP for an 8.75% interest in the Company, thereby becoming a wholly owned
subsidiary, and the 25% joint venture partners exchanged their interest in the
joint venture for a 3.9% interest in the Company. As a result, the Company
asceded to ownership of the master lease.
In March 1998, the Company and the landlord to the master lease agreed to a
termination and the security deposit was returned to the Company, net of certain
settlement expenditures.
The Company leased office space in Boise, Idaho under an agreement that was
effective May 20, 1996 and expired April 30, 1998. The agreement contained a
renewal option for 3 years at the then prevailing market rates, not to exceed
certain limits as defined in the lease. The lease required annual rent of
$15,432 during the first lease year and $16,075 during the second year, and was
personally guaranteed by a managing member and his spouse. The lease expired in
April 1998.
13
NORTHWEST PARKS LLC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996, 1997, 1998, AND JUNE 30, 1999
NOTE 6 - LEASES (CONTINUED)
Total rent expense under the leases was as follows:
March 28, 1996 (inception) to December 31, 1996 $ 46,656
1997 26,958
1998 48,269
January 1 to June 30, 1999 -
NOTE 7 - CAPITAL CONTRIBUTIONS
On March 28, 1996, the Company granted to Floating Feather Entertainment,
Inc. (FFE) a 25% interest in the Company for a 16.67% interest in BW Partners
LLC (BWP). A managing member of the Company was a 20% owner of FFE. The most
significant asset owned by BWP was a 75% joint venture interest in a lease for
68 acres of land, which was immediately subleased to the Company (Note 6). Other
assets acquired included certain development costs and property rights which
were valued at $48,014 based upon the costs recorded by BWP. The value of the
exchange was determined by management to be $85,000 in aggregate. In addition,
FFE and the Company agreed that at all times FFE's interest in the Company would
remain at 25%. In January 1998, the remaining members of BWP exchanged their
83.33% interest for an 8.75% interest in the Company.
In August 1996, the Company granted three 1% member interests to the
stockholders of State Street Holdings LLC (SSH) in exchange for a 100% interest
in SSH. The only asset held by SSH was a parcel of land in Boise, Idaho which
management estimated had a fair value of approximately $300,000. The land was
the contributed capital recorded for the transaction.
In January 1998, the owners of the 25% joint venture interest, who are
related to a managing member of the Company, exchanged their joint venture
interest for a 3.5% interest in the Company. That interest, along with the 8.75%
in BWP was valued at $98,916 by management of the Company based upon the net
assets of the joint venture that were acquired, the most significant of which
was rent receivable from the Company.
14
NORTHWEST PARKS LLC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1998 AND SEPTEMBER 30, 1999
ASSETS
September 30, December 31,
1999 1998
------------- -------------
CURRENT ASSETS
Cash (Note 1) $ 32,681 $ 114
Accounts Receivable-managing members 62,837 57,609
----------- ----------
Total current assets 95,518 57,723
PROPERTY AND EQUIPMENT, AT COST
Land 0 649,622
Buildings 0 269,344
Furniture, fixtures and equipment 77,687 50,133
Total 177,689 969,099
Less: Accumulated depreciation and amortization 27,115 37,390
----------- ----------
Net property and equipment 50,574 931,709
OTHER ASSETS
Deposits 22,020 22,220
Capitalized project development costs (Note 1) 128,565 149,894
Land options 68,000 51,000
Investment in affiliate 40,444 -
Other 245 245
----------- ----------
Total other assets 259,274 223,359
TOTAL ASSETS $ 405,366 $ 1,212,791
=========== ==========
The Accompanying Notes to Consolidated Financial Statements are
an integral part of these financial statements
NORTHWEST PARKS LLC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1998 AND SEPTEMBER 30, 1999
September 30, December 31,
1999 1998
------------- -------------
CURRENT LIABILITIES
Notes payable-members $ $ 615,000
Notes payable-others 350,000
Loan payable 3,439 5,209
Accounts payable 60,279 75,510
Accrued interest-members 346,850
Accrued interest-others 66,000
Deferred revenue-construction management fee 240,543 -
---------- -----------
Total current liabilities 304,261 1,458,569
---------- -----------
MINORITY INTEREST 145,000 -
---------- -----------
COMMITMENTS AND CONTINGENCIES
MEMBERS' CAPITAL (DEFICIENCY)
Contributed 1,025,133 979,416
Losses accumulated during development stage (1,069,027) (1,225,194)
----------- -----------
Total members' capital (deficiency) (43,895) (245,778)
----------- -----------
TOTAL LIABILITIES MINORITY INTEREST AND
MEMBERS' CAPITAL (DEFICIENCY) $ 405,366 $ 1,212,791
=========== ===========
The Accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements
NORTHWEST PARKS LLC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
DECEMBER 31, 1998 AND SEPTEMBER 30, 1999
Nine Months Ended September 30,
1999 1998
----------- ----------
Revenue
Gain on Sale of Land $379,857 -
Gain on Transfer of interest
Equity investee 50,082 -
----------- -----------
Total revenue 429,939 -
----------- -----------
Expenses
General & Administrative 265,772 229,838
Interest 8,000 146,912
----------- -----------
Total expenses 273,772 376,750
----------- -----------
Net income 156,157 (376,750)
=========== ===========
The Accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements
NORTHWEST PARKS LLC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 1998 AND 1999
Nine months Nine months
ended Sept. ended Sept.
30, 30,
1998 1999
-------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income (376,750) 156,167
Adjustments to reconcile net income to net cash
(used) by operating activities
Gain on sale of land (379,857)
Depreciation and amortization 11,844
Gain on sale of interest in equity in investee (50,082)
Write-off of capitalized development costs 27,217
Increase (decrease) in liabilities
Accounts receivable (18,300) -
Accounts payable 26,762 (15,232)
Deferred revenue 180,793
Accrued interest-members (156,417)
Accrued interest-others (46,749) (66,000)
Accrued expenses 146,912 -
------------- ------------
Net cash used by operating activities (268,125) (291,567)
------------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Payment of capitalization development costs (5,897) (6,141)
(Purchase) of or sale of property and equipment 105,606 (27,557)
Loans to members (17,500)
Loans to affiliates (16,004)
Repayment of loans to members 28,276
Proceeds from sale of land 1,209,200
Acquisition of other assets-deposits 50,400 -
Payments for land options (51,000) (17,000)
------------- ------------
Net cash used by investing activities 99,109 1,153,274
------------- ------------
The Accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes and loans-members 169,416 -
Proceeds from notes and loans-others 3,439
Repayment of notes and loans-members (699,892)
Repayment of notes payable-others (350,000)
Capital contributions in cash 45,717
Proceeds of minority interest investment 145,000
Proceeds from equity investee 26,596
------------ -----------
Net cash provided by financing activities 169,416 (829,140)
------------ -----------
NET INCREASE (DECREASE) IN CASH 400 32,567
CASH AT BEGINNING OF PERIOD 753 114
------------ -----------
CASH, END OF PERIOD 1,153 32,681
------------ -----------
The Accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements