SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) OCTOBER 15, 1998
----------------
PELICAN PROPERTIES, INTERNATIONAL INC.
--------------------------------------
(Exact name of registrant as specified in its charter)
Florida 0-23075 65-0616879
- --------------------------------------------------------------------------------
(State or other jurisdiction (Commission File (IRS Employer
or incorporation) Number) Identification No.)
12520 S.W. 195 Terrace, Miami, Florida 33177
--------------------------------------------
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code (305) 251-4060
--------------
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
1
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
------------------------------------
(a) On October 15, 1998, Pelican Properties International, Inc.
(the "Company"), through its wholly owned subsidiaries, Ohio
Key I, Inc. and Ohio Key II, Inc., "Subsidiaries" purchased
the McLure House Hotel and Conference Center located in
Wheeling, West Virginia for $3,200,000 paid in cash. The
consideration was determined through internal analysis by
management. The purchase funds were drawn from the proceeds
held in the Company's 1031 exchange account that was
established by the sale of the Subsidiaries assets in May
1998. The Buyer has no material relationship with the Company
or any of its affiliates, directors or officers, or any
associate of any such director or officer.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
---------------------------------
(4)(a) Audited Consolidated Balance Sheet for the years ended
December 31, 1997 and December 31, 1996 for the McLure Hotel,
Inc.
Audited Consolidated Statement of Operations for the years
ended December 31, 1997 and December 31, 1996 for the McLure
Hotel, Inc.
Audited Consolidated Statements of Stockholders Deficit for
the years ended December 31, 1997 and December 31, 1996 for
the McLure Hotel, Inc.
Audited Consolidated Statement of Cash Flows for the years
ended December 31, 1997 and December 31, 1996.
Unaudited Consolidated Balance Sheet for the quarter ended
September 30, 1998 for the McLure Hotel, Inc.
Unaudited Consolidated Statement of Operations for the quarter
ended September 30, 1998 for the McLure Hotel, Inc.
Unaudited Consolidated Statement of Cash Flows for the quarter
ended September 30, 1998 for the McLure Hotel, Inc.
Unaudited Pro Forma Consolidated Balance Sheet for the quarter
ended September 30, 1998 for Pelican Properties, International
Corp.
Unaudited Pro Forma Consolidated Statement of Operations for
the quarter ended September 30, 1998 and the year ended
December 31, 1997 for Pelican Properties, International Corp.
(c) 10.15 Agreement of Sale (Incorporated by reference to the
exhibit of the same number filed with the Company's Form
8-K as filed with the Securities and Exchange Commission
on October 22, 1998, File No. 000-23075)
2
<PAGE>
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.
PELICAN PROPERTIES INTERNATIONAL, INC.
By: /s/Timothy M. Benjamin
---------------------------------------
Timothy M. Benjamin, CFO/Treasurer
DATED: December 28, 1998
3
<PAGE>
McLURE HOTEL, INC.
FINANCIAL STATEMENTS
Years Ended December 31, 1997 and 1996
C O N T E N T S
--------
Page
Number
------
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS 1
FINANCIAL STATEMENTS
Balance Sheets 2
Statements of Operations 3
Statements of Changes in Stockholder's Equity 4
Statements of Cash Flows 5
Notes to Financial Statements 6
<PAGE>
Board of Directors
Pelican Properties International Corp.
Lake Mary, Florida
We have audited the accompanying balance sheets of McLure Hotel, Inc. as of
December 31, 1997 and 1996, and the related statements of operations, changes in
stockholder's equity, and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these 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 financial statements referred to above present fairly, in
all material respects, the financial position of McLure Hotel, Inc. as of
December 31, 1997 and 1996, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.
Certified Public Accountants
/s/ MOORE, STEPHENS, LOVELACE, P.A.
- -----------------------------------
MOORE, STEPHENS, LOVELACE, P.A.
Orlando, Florida
December 18, 1998
- 1 -
<PAGE>
MCLURE HOTEL, INC.
BALANCE SHEETS
December 31, 1997 and 1996
<TABLE>
<CAPTION>
ASSETS
1997 1996
------------------ ------------------
<S> <C> <C>
CURRENT ASSETS
Cash $ 308,212 $ 128,507
Accounts receivable 63,935 55,938
Prepaid expenses 511 -
Other current assets 27,523 17,339
------------------ ------------------
TOTAL CURRENT ASSETS 400,181 201,784
PROPERTY AND EQUIPMENT
Land 205,390 205,390
Buildings and building improvements 3,044,038 2,985,159
Furniture, fixtures and equipment 615,151 438,516
------------------ ------------------
3,864,579 3,629,065
Less accumulated depreciation (484,142) (243,893)
------------------ ------------------
3,380,437 3,385,172
Operating supplies 35,000 35,000
------------------ ------------------
3,415,437 3,420,172
DEPOSITS 3,002 4,876
------------------ ------------------
$ 3,818,620 $ 3,626,832
================== ==================
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES
Accounts payable $ 14,102 $ 23,007
Accrued liabilities
Payroll and related expenses 24,209 20,221
Real estate and personal property taxes 19,252 17,030
Sales taxes 11,050 10,932
Advance deposits and other 33,649 23,064
------------------ ------------------
TOTAL CURRENT LIABILITIES 102,262 94,254
COMMITMENTS
STOCKHOLDER'S EQUITY
Common stock; $10 par value; 500 shares authorized;
100 shares issued and outstanding 1,000 1,000
Additional paid-in capital 3,814,756 3,603,064
Accumulated deficit (99,398) (71,486)
------------------ ------------------
3,716,358 3,532,578
------------------ ------------------
$ 3,818,620 $ 3,626,832
================== ==================
</TABLE>
The accompanying notes are an integral part of the financial statements.
- 2 -
<PAGE>
MCLURE HOTEL, INC.
STATEMENTS OF OPERATIONS
Years Ended December 31, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
------------------ -------------------
<S> <C> <C>
REVENUES
Rooms $ 1,146,889 $ 938,343
Apartment rental 108,927 128,690
Telephone 28,104 22,940
Parking and other 304,135 318,628
------------------ ------------------
TOTAL REVENUES 1,588,055 1,408,601
OPERATING COSTS AND EXPENSES
Rooms 361,591 318,910
Property operation and maintenance 231,033 253,423
General and administrative 216,695 208,535
Marketing and sales 165,326 138,920
Utility costs 161,464 163,546
Telephone 36,055 31,288
Apartment rental 12,830 12,135
Other 108,910 122,193
------------------ ------------------
TOTAL OPERATING COSTS AND EXPENSES 1,293,904 1,248,950
------------------ ------------------
INCOME BEFORE FIXED CHARGES 294,151 159,651
FIXED CHARGES
Depreciation and amortization 240,248 200,996
Property taxes 58,798 40,478
Insurance 23,017 20,727
------------------ ------------------
322,063 262,201
------------------ ------------------
NET LOSS $ (27,912) $ (102,550)
================== ==================
</TABLE>
The accompanying notes are an integral part of the financial statements.
- 3 -
<PAGE>
MCLURE HOTEL, INC.
STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
Years Ended December 31, 1997 and 1996
<TABLE>
<CAPTION>
Retained
Additional Earnings
Common Paid-In (Accumulated Stockholder's
Stock Capital Deficit) Equity
------------- ------------------ ----------------- ------------------
<S> <C> <C> <C> <C>
BALANCE - DECEMBER 31, 1995 $ 1,000 $ 3,407,000 $ 31,064 $ 3,439,064
NET LOSS FOR THE YEAR ENDED
DECEMBER 31, 1996 - - (102,550) (102,550)
STOCKHOLDER CONTRIBUTIONS - 196,064 - 196,064
------------- ------------------ ----------------- ------------------
BALANCE - DECEMBER 31, 1996 1,000 3,603,064 (71,486) 3,532,578
NET LOSS FOR THE YEAR ENDED
DECEMBER 31, 1997 - - (27,912) (27,912)
STOCKHOLDER CONTRIBUTIONS - 211,692 - 211,692
------------- ------------------ ----------------- ------------------
BALANCE - DECEMBER 31, 1997 $ 1,000 $ 3,814,756 $ (99,398) $ 3,716,358
============= ================== ================= ==================
</TABLE>
The accompanying notes are an integral part of the financial statements.
- 4 -
<PAGE>
MCLURE HOTEL, INC.
STATEMENTS OF CASH FLOWS
Years Ended December 31, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
----------------- ----------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (27,912) $ (102,550)
Adjustments to reconcile net loss to net cash provided
by operating activities
Depreciation and amortization 240,248 200,996
(Increase) decrease in
Accounts receivable (7,997) (18,595)
Prepaid expenses (511) 285
Other current assets (10,184) 91
Deposits 1,874 (4,076)
Increase (decrease) in
Accounts payable (8,905) 6,777
Accrued liabilities 16,913 26,504
----------------- ----------------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 203,526 109,432
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment (235,513) (294,065)
CASH FLOWS FROM FINANCING ACTIVITIES
Stockholder contributions 211,692 196,064
----------------- ----------------
NET INCREASE IN CASH 179,705 11,431
CASH AT BEGINNING OF YEAR 128,507 117,076
----------------- ----------------
CASH AT END OF YEAR $ 308,212 $ 128,507
================= ================
</TABLE>
The accompanying notes are an integral part of the financial statements.
- 5 -
<PAGE>
MCLURE HOTEL, INC.
NOTES TO FINANCIAL STATEMENTS
Years Ended December 31, 1997 and 1996
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
The McLure House Hotel (the Hotel) has operated since 1852 as a
short-term lodging hotel. In 1995, the Hotel was foreclosed upon
by Wesbanco Bank Wheeling (the Bank) when the owners defaulted on
the debt associated with the mortgage on the property.
McLure Hotel, Inc. (the Company) was incorporated on October 11,
1995 by the Bank and was owned by the Bank during the periods
reported upon in the accompanying financial statements. McLure
Hotel, Inc. consists of a 173-room hotel with 30 appurtenant
apartment units and a seven-story parking garage for approximately
225 vehicles in Wheeling, West Virginia. In 1998, the Company was
purchased by Ohio Key I, Inc. and Ohio Key II, Inc., wholly owned
subsidiaries of Pelican Properties International Corp.
Property and Equipment
The Bank, at the time it foreclosed on the mortgage and seized the
property in satisfaction of its loan, commissioned an independent
appraisal to determine the market value of the property and
equipment. The results of the appraisal indicated that the market
value was less than the loan balance. Accordingly, the property
and equipment were initially recorded at their appraised values.
Subsequent additions and betterments have been recorded at cost.
Repairs and maintenance have been expensed as incurred.
Depreciation has been provided using the straight-line method over
the estimated useful lives of the assets, as follows:
Years
-----
Building 31
Building improvements 15
Furniture and equipment 5 - 10
Depreciation expense for the years ended December 31, 1997 and
1996, amounted to approximately $240,000 and $201,000,
respectively.
Revenue Recognition
Revenue is recorded on the accrual basis in the period in which
occupancy rights are provided to guests and tenants. Advance
deposits are recorded as deferred revenue until occupancy occurs.
- 6 -
<PAGE>
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Income Taxes
The Company was included as part of the consolidated income tax
return of the Bank for the years ended December 31, 1997 and 1996.
For financial reporting purposes, current federal income taxes are
provided in accordance with an income tax allocation arrangement
between the Company and the Bank, which provides, among other
things, that the Company pay to the Bank an amount equal to the
Company's pro-forma, stand-alone basis income tax. Since the
Company did not have taxable income in the years ended December
31, 1997 and 1996, there was no tax due the Bank for those
respective time periods. The arrangement also provides that
deferred income taxes are charged or credited to the Company based
upon the differences between the financial statement and tax bases
of assets and liabilities using enacted tax rates in effect for
the year in which the differences are expected to reverse. During
1997 and 1996, there were no significant book-tax temporary
differences. At December 31, 1997 and 1996, deferred tax assets of
approximately $34,000 and $22,000, respec-tively, resulting from
net operating loss carryforwards of approximately $130,000 and
$100,000, were fully reserved by valuation allowances. Under
federal tax law, certain changes in ownership may operate to
restrict future utilization of the Company's net operating loss
carryforwards.
Credit Risk
Financial instruments which potentially subject the Company to
concentrations of credit risk consist primarily of accounts
receivable and cash. Management believes that credit risk with
respect to the Company's accounts receivable is mitigated by the
number of such accounts.
The Company maintains cash deposits in bank accounts, which, at
times, may exceed federally insured limits. The Company has not
experienced any losses in such bank accounts and believes it is
not exposed to any significant credit risk with respect to cash
deposits.
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.
NOTE 2 - MANAGEMENT AGREEMENTS
The Company was party to a management agreement with Lane
Hospitality Management, Inc. in 1996 and 1997 relating to the
management of the Hotel. The agreement provided, among other
things, for a management fee of 3.5% of gross property revenues
and 0.75% of gross food and beverage revenues, as defined in the
agreement, plus a financial services fee of $500 per month.
Management fees incurred for the periods ended December 31, 1997
and 1996, were approximately $57,000 and $52,000, respectively.
- 7 -
<PAGE>
NOTE 2 - MANAGEMENT AGREEMENTS (Continued)
While the Company was operated under the authority of the Bank, a
management fee was collected by the Bank for services relating to
organizing and financing the operations of the Company. There was
no written agreement for such services. Management fees incurred
for the periods ended December 31, 1997 and 1996, were
approximately $45,000 and $61,000, respectively, and are included
in general and administrative expenses in the accompanying
statements of operations.
NOTE 3 - LEASES
Rental Income
The Company leased various store fronts and other space it owns to
unrelated businesses. The Company received rents for the leased
space on a monthly basis.
The scheduled future minimum rents to be received under these
leases are approximately as follows:
Year Ending Rents
----------------- ------------------
1998 $ 107,000
1999 98,000
2000 64,000
------------------
$ 269,000
==================
Rental income for the years ended December 31, 1997 and 1996 was
approximately $99,000 and $95,000, respectively.
Rent and Lease Expense
The Company had leases primarily for equipment and to receive
cable television services. The scheduled future minimum payments
due under these leases are approximately as follows:
Year Ending Payments
----------------- ------------------
1998 $ 32,000
1999 12,000
2000 1,000
------------------
$ 45,000
==================
Rent and lease expense for the years ended December 31, 1997 and
1996 was approximately $32,000 and $31,000, respectively.
- 8 -
<PAGE>
NOTE 4 - PROFIT SHARING PLAN
The Company has an employee retirement savings plan (the Plan),
which includes substantially all employees. The Plan provides,
among other things, that contributions to the Plan were
determined by the Bank's Board of Directors prior to the end of
each year and that the contributions were to be paid in cash
within the limits prescribed by the Internal Revenue Code. The
Company incurred no expenses related to the Plan in the years
ended December 31, 1997 and 1996, respectively.
- 9 -
<PAGE>
McLURE HOTEL, INC.
BALANCE SHEET
SEPTEMBER 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 234,073
Accounts receivable 24,494
Other current assets 62,524
--------------------
Total current assets 321,091
PROPERTY AND EQUIPMENT, NET 3,426,714
OTHER ASSETS 5,007
--------------------
TOTAL ASSETS $ 3,752,812
====================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable & accrued expenses $ 30,244
Other current liabilities 41,683
Current porrtion of capital lease obligations 12,000
--------------------
Total current liabilities 83,927
CAPITAL LEASE OBLIGATIONS 42,901
--------------------
Total liabilities 126,828
--------------------
COMMITMENTS
STOCKHOLDERS' EQUITY
Common stock; $10 par value; 500 shares authorized;
100 shares issued and outstanding 1,000
Paid-in capital 3,814,756
Retained earnings (deficit) (189,772)
--------------------
Total stockholders' equity 3,625,984
--------------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 3,752,812
====================
</TABLE>
The accompanying notes are an integral part of the financial statements.
- 10 -
<PAGE>
McLURE HOTEL, INC.
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C>
REVENUES $ 1,128,108
COST OF REVENUES 345,904
--------------------
GROSS PROFIT 782,204
--------------------
EXPENSES:
Operating 327,445
Selling, general & administrative 337,595
Depreciation 207,538
--------------------
Total expenses 872,578
--------------------
NET INCOME (LOSS) (90,374)
RETAINED EARNINGS, beginning of year (99,398)
--------------------
RETAINED EARNINGS, end of year $ (189,772)
====================
</TABLE>
The accompanying notes are an integral part of the financial statements.
- 11 -
<PAGE>
McLURE HOTEL, INC.
STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (90,374)
--------------------
Adjustments to reconcile income to net cash (used)
provided by operating activities
Depreciation 207,538
Changes in working capital:
Decrease in accounts receivable 39,441
Increase in prepaid expenses (56,991)
Decrease in other current assets 20,861
Increase in other assets (2,005)
Increase in accounts payable 9,656
Decrease in accrued expenses (12,349)
Decrease in other current liabilities (26,004)
--------------------
Net adjustments 180,147
--------------------
Net cash (used) provided by operating activities 89,773
--------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (163,912)
--------------------
Net cash (used) provided by investing activities (163,912)
--------------------
CASH FLOW FROM FINANCING ACTIVITIES:
--------------------
Net cash (used) provided by financing activities -
--------------------
NET INCREASE IN CASH (74,139)
CASH, BEGINNING OF YEAR 308,212
--------------------
CASH, END OF YEAR $ 234,073
====================
The accompanying notes are an integral part of the financial statements.
- 12 -
</TABLE>
<PAGE>
MCLURE HOTEL, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
For the nine months ended September 30, 1998
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- -------------------------------------------------------------------------
Basis of presentation
The accompanying unaudited financial statements have been prepared
in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form
8-K. The financial information herein is unaudited. However, in
the opinion of management, all adjustments, consisting of normal
recurring accruals, considered necessary for a fair presentation
have been included. Operating results for the nine months ended
September 30, 1998, are not indicative of the results that may be
expected for the year ended December 31, 1998. A complete
description of the Company's accounting policies and other
financial information is included in its audited financial
statements for the years ended December 31, 1997 and 1996,
respectively.
Organization
The McLure House Hotel (the Hotel) has operated since 1852 as a
short-term lodging hotel. In 1995, the Hotel was foreclosed upon
by Wesbanco Bank Wheeling (the Bank) when the owners defaulted on
the debt associated with the mortgage on the property. McLure
Hotel, Inc. (the Company) was incorporated on October 11, 1995 by
the Bank and was owned by the Bank during the periods reported
upon in the accompanying financial statements. McLure Hotel, Inc.
consists of a 173-room hotel with 30 appurtenant apartment units
and a seven-story parking garage for approximately 225 vehicles in
Wheeling, West Virginia. In 1998, the Company was purchased by
Ohio Key I, Inc. and Ohio Key II, Inc., wholly owned subsidiaries
of Pelican Properties International Corp.
Property and Equipment
The Bank, at the time it foreclosed on the mortgage and seized the
property in satisfaction of its loan, commissioned an independent
appraisal to determine the market value of the property and
equipment. The results of the appraisal indicated that the market
value was less than the loan balance. Accordingly, the property
and equipment were initially recorded at their appraised values.
Subsequent additions and betterments have been recorded at cost.
Repairs and maintenance have been expensed as incurred.
Depreciation has been provided using the straight-line method over
the estimated useful lives of the assets, as follows:
Years
-----
Building 31
Building improvements 15
Furniture and equipment 5- 10
Depreciation expense for the nine months ended September 30, 1998,
amounted to $207,538.
Revenue Recognition
Revenue is recorded on the accrual basis in the period in which
occupancy rights are provided to guests and tenants. Advance
deposits are recorded as deferred revenue until occupancy occurs.
- 13 -
<PAGE>
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- -------------------------------------------------------------------------
(Continued)
Income Taxes
The Company was included as part of the consolidated income tax
return of the Bank for the years ended December 31, 1997 and 1996
and will also be included through the date of the sale in 1998.
For financial reporting purposes, current federal income taxes are
provided in accordance with an income tax allocation arrangement
between the Company and the Bank, which provides, among other
things, that the Company pay to the Bank an amount equal to the
Company's pro-forma, stand-alone basis income tax. Since the
Company did not have taxable income in the years ended December
31, 1997 and 1996, there was no tax due the Bank for those
respective time periods. The arrangement also provides that
deferred income taxes are charged or credited to the Company based
upon the differences between the financial statement and tax bases
of assets and liabilities using enacted tax rates in effect for
the year in which the differences are expected to reverse. During
the nine months ended September 30, 1998, there were no
significant book-tax temporary differences. At September 30, 1998,
deferred tax assets of approximately $69,000, resulting from net
operating loss carryforwards of approximately $221,000, were fully
reserved by valuation allowances. Under federal tax law, certain
changes in ownership may operate to restrict future utilization of
the Company's net operating loss carryforwards.
Credit Risk
Financial instruments which potentially subject the Company to
concentrations of credit risk consist primarily of accounts
receivable and cash. Management believes that credit risk with
respect to the Company's accounts receivable is mitigated by the
number of such accounts.
The Company maintains cash deposits in bank accounts, which, at
times, may exceed federally insured limits. The Company has not
experienced any losses in such bank accounts and believes it is
not exposed to any significant credit risk with respect to cash
deposits.
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.
NOTE 2 - MANAGEMENT AGREEMENTS
- -----------------------------------
The Company was party to a management agreement with Lane
Hospitality Management, Inc. in 1996 and 1997 relating to the
management of the Hotel. The agreement provided, among other
things, for a management fee of 3.5% of gross property revenues
and 0.75% of gross food and beverage revenues, as defined in the
agreement, plus a financial services fee of $500 per month.
Management fees for the nine months ended September 30, 1998 were
approximately $51,000.
- 14 -
<PAGE>
NOTE 2 - MANAGEMENT AGREEMENTS (Continued)
- -----------------------------------
While the Company was operated under the authority of the Bank, a
management fee was collected by the Bank for services relating to
organizing and financing the operations of the Company. There was
no written agreement for such services. Management fees are
included in general and administrative expenses in the
accompanying statements of operations.
NOTE 3 - LEASES
- --------------------
Rental Income
The Company leased various store fronts and other space it owns to
unrelated businesses. The Company received rents for the leased
space on a monthly basis.
The scheduled future minimum rents to be received under these
leases are approximately as follows:
Year Ending Rents
----------------- ------------------
1998 $ 107,000
1999 98,000
2000 64,000
------------------
$ 269,000
==================
Rent and Lease Expense
The Company had leases primarily for equipment and to receive
cable television services. The scheduled future minimum payments
due under these leases are approximately as follows:
Year Ending Payments
----------------- ------------------
1998 $ 32,000
1999 12,000
2000 1,000
------------------
$ 45,000
==================
- 15 -
<PAGE>
NOTE 4 - PROFIT SHARING PLAN
- ---------------------------------
The Company has an employee retirement savings plan (the Plan),
which includes substantially all employees. The Plan provides,
among other things, that contributions to the Plan were
determined by the Bank's Board of Directors prior to the end of
each year and that the contributions were to be paid in cash
within the limits prescribed by the Internal Revenue Code. The
Company incurred no expenses related to the Plan during 1998.
NOTE 5 - SUBSEQUENT EVENT
- -------------------------
On October 15, 1998, the MCLURE HOTEL and Parking Lot
(Substantially all of the Company's assets) were sold to Ohio Key
I, Inc. and Ohio Key II, Inc., wholly owned subsidiaries of
Pelican Properties International Corp. for approximately $3.2
million dollars.
- 16 -
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED CONDENSED FINANCIAL STATEMENTS AS OF
SEPTEMBER 30, 1998 AND FOR THE PERIODS ENDED
SEPTEMBER 30, 1998 AND DECEMBER 31, 1997
(UNAUDITED)
- 17 -
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
(Historical) (Pro Forma)
September 30, September 30,
ASSETS 1998 1998
----------------- ----------------
<S> <C> <C>
CURRENT ASSETS
Cash $ 138,926 $ 2,538,926
Cash, restricted 7,416,372 4,186,823
Cash held in escrow 526,296 526,296
Accounts receivable - -
Inventories - -
Other current assets 6,044 19,432
----------------- ----------------
Total current assets 8,087,638 7,271,477
PROPERTY AND EQUIPMENT, NET 17,588 3,233,749
-
OTHER ASSETS 280 280
----------------- ----------------
TOTAL ASSETS $ 8,105,506 $ 10,505,506
================= ================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable & accrued expenses $ 47,370 $ 47,370
Deferred revenues - -
Current portion of pre-petition debt - -
Other current liabilities 102,183 102,183
Current maturities of long-term debt - -
Net current liabilities of discontinued operations - -
Income taxes payable 1,536,834 1,536,834
Loans payable to stockholders - -
----------------- ----------------
Total current liabilities 1,686,387 1,686,387
----------------- ----------------
NON-CURRENT LIABILITIES
Long-term portion of pre-petition debt - -
Long-term debt, less current maturities - 2,400,000
Deferred income taxes 1,942,136 1,942,136
----------------- ----------------
Total non-current liabilities 1,942,136 4,342,136
----------------- ----------------
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock (6%), par value $.001; 1,000,000 shares - -
authorized and 195,907shares as of December 31, 1997 - -
Common stock, par value $.001; 100,000,000 shares - -
authorized, 5,114,185 shares issued as of - -
September 30, 1998 5,114 5,114
Additional Paid-in Capital 3,303,590 3,303,590
Retained earnings (accumulated deficit) 1,168,279 1,168,279
----------------- ----------------
Total stockholders' equity (deficit) 4,476,983 4,476,983
----------------- ----------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT) $ 8,105,506 $ 10,505,506
================= ================
</TABLE>
- 18 -
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
(Historical) (Pro Forma) (Historical) (Pro Forma)
September 30, September 30, December 31, December 31,
1998 1998 1997 1997
----------------- ----------------- ----------------- ----------------
<S> <C> <C> <C>
REVENUES - 1,128,108 3,648,678 1,588,055
COST OF REVENUES - 345,904 1,081,893 519,386
----------------- ----------------- ----------------- ----------------
GROSS PROFIT - 782,204 2,566,785 1,068,669
----------------- ----------------- ----------------- ----------------
EXPENSES:
General & administrative 320,398 657,993 708,569 602,984
Operating - 327,445 1,308,852 451,295
Interest expense 51,882 186,882 439,505 180,000
Depreciation & amortization 388 113,731 337,875 151,124
----------------- ----------------- ----------------- ----------------
Total expenses 372,668 1,286,051 2,794,801 1,385,403
----------------- ----------------- ----------------- ----------------
Loss from continuing operations
before other income (expenses) (372,668) (503,847) (228,016) (316,734)
OTHER INCOME (EXPENSES) 65,656 65,656 (254,320) (184,224)
----------------- ----------------- ----------------- ----------------
Loss from continuing operations
before income taxes (307,012) (438,191) (482,336) (500,958)
Provision for income taxes (tax benefit) (115,831) (115,831) - -
----------------- ----------------- ----------------- ----------------
- - -
Loss from continuing operations (191,181) (322,360) (482,336) (500,958)
Gain on sale of discontinued operations
(net of income taxes) 5,477,012 5,477,012 - -
Income (loss) from discontinued
operations (net of income taxes) 71,045 71,045 - (100,166)
----------------- ----------------- ----------------- ----------------
- - -
Income (loss) before extraordinary gain 5,356,876 5,225,697 (482,336) (601,124)
Extraordinary gain (net of income taxes) 361,570 361,570 - -
----------------- ----------------- ----------------- ----------------
- - -
NET INCOME (LOSS) 5,718,446 5,587,267 (482,336) (601,124)
================= ================= ================= ================
BASIC AND DILUTED EARNINGS (LOSS)
PER SHARE:
Continued operations (0.04) (0.06) (0.10) (0.11)
Sale of discontinued operations 1.08 1.08 - -
Discontinued operations 0.01 0.01 - (0.02)
Extraordinary gain 0.07 0.07 - -
----------------- ----------------- ----------------- ----------------
Net income (loss) 1.12 1.10 (0.10) (0.13)
================= ================= ================= ================
- - - -
Weighted average number of shares - - - -
basic and diluted 5,068,443 5,068,443 4,743,819 4,743,819
================= ================= ================= ================
</TABLE>
- 19 -
<PAGE>
NOTE 1 - BASIS OF PRESENTATION
- ------------------------------
The accompanying unaudited pro forma condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
and with the instructions to Form 8-K, and Article 10 & 11 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
The financial information included herein is unaudited. However, in the opinion
of management, all adjustments, consisting of normal recurring accruals,
considered necessary for a fair presentation have been included. Operating
results for the nine months ended September 30, 1998, are not necessarily
indicative of the results that may be expected for the year ending December 31,
1998. A description of the Company's accounting policies and other financial
information is included in its audited historical consolidated financial
statements for the year ended December 31, 1997. The Company's complete
condensed historical financial statements for the nine months ended September
30, 1998 are included in its Form 10-QSB filing.
The September 30, 1998 condensed consolidated financial statements include the
accounts of Pelican Properties, International Corp. and its wholly owned
subsidiaries Ohio Key I, Inc. and Ohio Key II, Inc. and its 99% owned
subsidiary, Sunshine Key Associates Limited Partnership, an inactive Partnership
after December 31, 1996.
As more fully discussed in Note 2, the Company's operating results are
segregated and reported as discontinued operations in the accompanying condensed
consolidated statements of operations. The Company's historical September 30,
1998 Condensed Consolidated Balance Sheet and the Company's historical September
30, 1998 and December 31, 1997 Condensed Consolidated Statements of Operations
are shown for comparison purposes. The pro forma Balance Sheet as of September
30, 1998 is presented as if the acquisition occurred on September 30, 1998.The
pro forma Statements of Operations include the accounts of the McLure Hotel,
Inc. as if the acquisition had occurred on January 1, 1997.
NOTE 2 - SALE OF DISCONTINUED OPERATIONS
- ----------------------------------------
On May 29, 1998, the Company, through its wholly owned subsidiaries Ohio Key I,
and Ohio Key II, sold its only revenue producing asset known as Sunshine Key RV
Resort and Marina, which resulted in a gain of $ 5,477,012, which is net of $
3,307,290 in taxes. The proceeds were used to pay outstanding indebtedness of
$5,589,908 existing at date of sale. The sale is intended to qualify as a
like-kind exchange as promulgated by Internal Revenue Code Section 1031. In
order to ensure this type of income tax treatment, certain qualifying criteria
must be met, including, but without limitation, the proceeds are to be held by a
third party and such proceeds must be used to acquire like-kind property or
properties. It is the intention of management to continue the Company's primary
business and to reinvest such proceeds in resort type real estate.
As an additional result of the sale of discontinued operations, the company
benefited from a forgiveness of debt due to early extinguishment. This is
reflected on the Company's financial statements as an extraordinary gain of $
361,570, which is net of $ 218,973 in taxes.
- 20-
<PAGE>
NOTE 3 - DISCONTINUED OPERATIONS
- --------------------------------
As more fully discussed in Note 2, the Company sold its principal revenue
producing asset, and accordingly, the results of operations of Ohio Key I, and
Ohio Key II, are being accounted for as discontinued operations.
Information relating to the discontinued operations for the periods ended
September 30, 1998 and December 31,1997 are summarized as follows:
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
---- ----
<S> <C> <C>
Revenues $ 1,853,645 $ 3,648,678
Costs of revenues (439,491) (1,081,893)
Operating expenses 0 (1,308,852)
General & administrative expenses (947,581) (510,623)
Interest expense (195,177) (439,505)
Depreciation and amortization (142,681) (337,875)
Other income 10,868 0
Other expenses, net 0 (70,096)
Income taxes (68,538) 0
------------- -------------
Income (loss) from
discontinuing operations $ 71,045 $ (100,166)
============= =============
</TABLE>
NOTE 4 - STOCK BASED COMPENSATION
- ---------------------------------
On January 1, 1998 the Company issued 50,000 shares of common stock as payment
of legal fees resulting in a $50 increase to "Common Stock" and a $6,200
increase to "Additional paid in capital."
On February 28, 1998 the Company issued 20,000 shares of common stock as
compensation resulting in a $20 increase to "Common stock" and a $2,480 increase
to "Additional paid in capital". On May 29, 1998 the Company issued 20,000
shares on common stock as compensation resulting in a $20 increase to "Common
Stock" and a $26,230 increase to "Additional paid in capital". On August 27,
1998 the Company issued 20,000 shares on common stock as compensation resulting
in a $20 increase to "Common Stock" and a $25,000 increase to "Additional paid
in capital".
On February 26, 1998 the Company granted to the Chief Financial Officer ("CFO"),
the option to purchase up to 50,000 shares of Common Stock at an exercise price
of $.01 per share that is vested and exercisable on March 1, 1998. On March 6,
1998, the CFO exercised the option and was issued 50,000 shares of Common Stock
of the Company as restricted shares under Rule 144 of the Securities Act of
1933.
NOTE 5 - NET INCOME (LOSS) PER SHARE
- ------------------------------------
The net income (loss) per share is computed by dividing the net income or (loss)
for the period by the weighted average number of shares outstanding (as adjusted
retroactively for the dilutive effect of prior years common stock options) for
the period plus the dilutive effect of outstanding common stock options,
warrants, and preferred shares considered common stock equivalents. As of
September 30, 1998 no common stock equivalents were used in the net income
(Loss) per share calculation due to its anti-dilutive effect.
- 21 -
<PAGE>
NOTE 6 - PREFERRED STOCK
- ------------------------
On June 30, 1997, the Company issued 195,907 shares of Series A Preferred Stock
in exchange for payment of $293,862 of debt, $223,862 of which was included in
Pre-petition debt and $70,000 was owed to a related party. On May 29, 1998, the
Company redeemed 195,907 shares of Series A Preferred Stock or all of its
Preferred Stock for $293,862 in cash.
NOTE 7 - 1031 EXCHANGE
- ----------------------
The Company's purchase of McLure Hotel, Inc. is intended to qualify as a
like-kind exchange ("1031 exchange") for income tax purposes.
The deadline to meet the qualifying criteria to treat the Company's sale of
Sunshine Key RV Resort and Marina as a like-kind exchange ("1031 exchange") for
income tax purposes is on or about November 25, 1998. At this time, management
expects to meet the 1031 exchange requirements on or before the deadline.
However, if the requirements are not met, then the deferred income taxes plus
penalties and interest will become currently due.
NOTE 8 - YEAR 2000
- ------------------
The Year 2000 ("Y2K") problem basically is a programming glitch for systems that
were designed with 2-digits for month, day, and year. The problem specifically
lies in the 2-digit year, whereby "00" would be recognized as year 1900 instead
of year 2000. The result means significant miscalculations or possibly complete
system failure. Currently, the Company does not operate any software or
specialized systems, which would cause management to have a concern regarding
the Y2K problem. However, due to the uncertainties of how the Y2K affects the
Company's vendors or customers, we are unable to determine the effect, if any,
on the Company's financial condition, or result's of operations.
NOTE 9 - PRO FORMA STATEMENTS
- -----------------------------
On October 15, 1998 the Company purchased the assets of McLure Hotel, Inc. for
$3,216,161. McLure Hotel, Inc. was incorporated on October 11, 1995 by Wesbanco
Bank Wheeling and was operated under the bank until its purchase by the Company.
McLure Hotel, Inc. consists of a 173-room hotel with 30 apartment units and a
seven-story parking garage for approximately 225 vehicles in Wheeling, West
Virginia. The following pro form statements reflect the Company's purchase of
the assets of McLure Hotel, Inc.
- 22 -
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP. AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 1998 AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
AND FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
NOTE 9 - PRO FORMA STATEMENTS (CONTINUED)
- -----------------------------------------
Company
Company as Pro Forma Pro Forma
Reported Adjustments for Combined at
September 30 McLure Hotel September 30
ASSETS 1998 Acquisition (1) 1998
--------------- ----------------- ---------------
<S> <C> <C> <C>
CURRENT ASSETS
Cash $ 138,926 $ 2,400,000 $ 2,538,926
Cash, restricted 7,416,372 (3,229,549)(2) 4,186,823
Cash held in escrow 526,296 526,296
Accounts receivable - -
Inventories - -
Other current assets 6,044 13,388 (2) 19,432
--------------- ----------------- ---------------
Total current assets 8,087,638 (816,161) 7,271,477
PROPERTY AND EQUIPMENT, NET 17,588 3,216,161 (2) 3,233,749
OTHER ASSETS 280 280
--------------- ----------------- ---------------
TOTAL ASSETS $ 8,105,506 $ 2,400,000 $ 10,505,506
=============== ================= ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable & accrued expenses $ 47,370 $ 47,370
Deferred revenues - -
Current portion of pre-petition debt - -
Other current liabilities 102,183 102,183
Current maturities of long-term debt - -
Net current liabilities of discontinued operations - -
Income taxes payable 1,536,834 1,536,834
Loans payable to stockholders - -
--------------- ----------------- ---------------
Total current liabilities 1,686,387 - 1,686,387
--------------- ----------------- ---------------
NON-CURRENT LIABILITIES
Long-term portion of pre-petition debt - -
Long-term debt, less current maturities - 2,400,000 (2) 2,400,000
Deferred income taxes 1,942,136 1,942,136
--------------- ----------------- ---------------
Total non-current liabilities 1,942,136 2,400,000 4,342,136
--------------- ----------------- ---------------
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock (6%), par value $.001; 1,000,000
shares authorized and 195,907shares as of
December 31, 1997 - -
Common stock, par value $.001; 100,000,000 shares -
authorized, 5,114,185 shares issued as of -
September 30, 1998 5,114 5,114
Additional Paid-in Capital 3,303,590 3,303,590
Retained earnings (accumulated deficit) 1,168,279 1,168,279
--------------- ----------------- ---------------
Total stockholders' equity (deficit) 4,476,983 - 4,476,983
--------------- ----------------- ---------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT) $ 8,105,506 $ 2,400,000 $ 10,505,506
=============== ================= ===============
(1) Reflects the Company's purchase of McLure Hotel, Inc. which closed October 15,
1998.
(2) Reflects the purchase of McLure Hotel, Inc. for $3,216,161 and the securing of a
first mortgage in the amount of $2,400,00. The allocation of the total
consideration is $2,598,895 for Building, $194,834 for Land and $422,432
for Personal Property.
</TABLE>
- 23 -
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP. AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 1998 AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
AND FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
NOTE 9 - PRO FORMA STATEMENTS (CONTINUED)
- -----------------------------------------
Company as Pro Forma Pro Forma
Reported McLure Hotel Adjustments Combined
September 30, Acquisition for McLure Hotel September 30,
1998 as Reported Acquisition (1) 1998
---------------------------------------------------------------
<S> <C> <C>
REVENUES - 1,128,108 1,128,108
COST OF REVENUES - 345,904 345,904
---------------------------------------------------------------
GROSS PROFIT - 782,204 - 782,204
---------------------------------------------------------------
EXPENSES:
General & administrative 320,398 337,595 657,993
Operating 327,445 327,445
Interest expense 51,882 135,000 186,882
Depreciation & amortization 388 207,538 (94,195) 113,731
---------------------------------------------------------------
Total expenses 372,668 872,578 40,805 1,286,051
---------------------------------------------------------------
Loss from continuing operations
before other income (expenses) (372,668) (90,374) (40,805) (503,847)
OTHER INCOME (EXPENSES) 65,656 65,656
---------------------------------------------------------------
Loss from continuing operations
before income taxes (307,012) (90,374) (40,805) (438,191)
Provision for income taxes (tax benefit) (115,831) - (115,831)
---------------------------------------------------------------
Loss from continuing operations (191,181) (90,374) (40,805) (322,360)
Gain on sale of discontinued operations
(net of income taxes) 5,477,012 - - 5,477,012
Income (loss) from discontinued
operations (net of income taxes) 71,045 - - 71,045
---------------------------------------------------------------
Income (loss) before extraordinary gain 5,356,876 (90,374) (40,805) 5,225,697
Extraordinary gain (net of income taxes) 361,570 - - 361,570
---------------------------------------------------------------
NET INCOME (LOSS) 5,718,446 (90,374) (40,805) 5,587,267
===============================================================
BASIC AND DILUTED EARNINGS (LOSS)
PER SHARE:
Continued operations (0.04) (0.06)
Sale of discontinued operations 1.08 1.08
Discontinued operations 0.01 0.01
Extraordinary gain 0.07 0.07
---------------------------------------------------------------
Net income (loss) 1.12 1.10
===============================================================
Weighted average number of shares
basic and diluted 5,068,443 5,068,443
===============================================================
(1) Reflects adjustments for the purchase of McLure Hotel, Inc. as if it had occurred on
January 1, 1997.
</TABLE>
- 24 -
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP. AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 1998 AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
AND FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
NOTE 9 - PRO FORMA STATEMENTS (CONTINUED)
- -----------------------------------------
Company
Company as Pro Forma Company Pro Forma Pro Forma
Reported Adjustments Pro Forma for McLure Hotel Adjustments Combined
December 31, for Discontinue Discontinued Acquisition for McLure Hotel December 31,
1997 Operations (1) Operations as Reported Acquisition (2) 1997
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUES 3,648,678 (3,648,678) - 1,588,055 1,588,055
COST OF REVENUES 1,081,893 (1,081,893) - 519,386 519,386
------------------------------------------------------------------------------------------
GROSS PROFIT 2,566,785 (2,566,785) - 1,068,669 - 1,068,669
------------------------------------------------------------------------------------------
EXPENSES:
General & administrative 708,569 (510,623) 197,946 405,038 602,984
Operating 1,308,852 (1,308,852) - 451,295 451,295
Interest expense 439,505 (439,505) - 180,000 180,000
Depreciation & amortization 337,875 (337,875) - 240,248 (89,124) 151,124
------------------------------------------------------------------------------------------
Total expenses 2,794,801 (2,596,855) 197,946 1,096,581 90,876 1,385,403
------------------------------------------------------------------------------------------
Loss from continuing operations
before other income (expenses) (228,016) 30,070 (197,946) (27,912) (90,876) (316,734)
OTHER INCOME (EXPENSES) (254,320) 70,096 (184,224) (184,224)
------------------------------------------------------------------------------------------
Loss from continuing operations
before income taxes (482,336) 100,166 (382,170) (27,912) (90,876) (500,958)
Provision for income taxes (tax
benefit) - -
------------------------------------------------------------------------------------------
Loss from continuing operations (482,336) 100,166 (382,170) (27,912) (90,876) (500,958)
Gain on sale of discontinued
operations (net of income taxes) - -
Income (loss) from discontinued
operations (net of income taxes) - (100,166) (100,166) - (100,166)
------------------------------------------------------------------------------------------
Income (loss) before extraordinary
gain (482,336) - (482,336) (27,912) (90,876) (601,124)
Extraordinary gain (net of income
taxes) - -
------------------------------------------------------------------------------------------
NET INCOME (LOSS) (482,336) - (482,336) (27,912) (90,876) (601,124)
==========================================================================================
BASIC AND DILUTED EARNINGS (LOSS)
PER SHARE:
Continued operations (0.10) (0.08) (0.11)
Sale of discontinued operations - - -
Discontinued operations - - (0.02)
Extraordinary gain - - -
==========================================================================================
Net income (loss) (0.10) (0.08) (0.13)
==========================================================================================
Weighted average number of shares
basic and diluted 4,743,819 4,743,819 4,743,819
==========================================================================================
(1) Reflects adjustments for the sale of Sunshine Key RV Resort and Marina as if it
had occurred on January 1, 1997.
(2) Reflects adjustments for the purchase of McLure Hotel, Inc. as if it had occurred on
January 1, 1997.
- 25 -
</TABLE>
