SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20459
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED JUNE 30, 1997; COMMISSION FILE NUMBER 0-1957
UPTOWNER INNS, INC.
(Exact Name of Registrant as Specified in its Charter)
West Virginia 55-0457171
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
1415 4th Avenue, Huntington, West Virginia 25701
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including area code (304) 525-7741
Securities registered pursuant to Section 12 (g) of the Act:
1,583,563 shares of common stock - $0.50 par value
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such
reports), and, (2) has been subject to such filing requirements for
the past 90 days.
X Yes No
The aggregate market value of the voting stock held by non-
affiliates of the registrant, as of the 30th day of June 1997, was
$597,884.
As of June 30, 1997, the close of the period covered by this
report, the registrant had 1,583,563 shares of its common capital
stock issued and outstanding. The registrant has issued no other
stock.
DOCUMENTS INCORPORATED BY REFERENCE
The definitive proxy statement to be filed by the registrant,
pursuant to Regulation 14A, is incorporated herein by reference in
Part III, Items 10 and 11.
<PAGE>
PART I
ITEM 1. BUSINESS.
(a) The registrant, Uptowner Inns, Inc., is a corporation that
was incorporated in the State of West Virginia on July 1, 1961. The
registrant operates a 137 room , full service hotel built in 1962 by
the registrant. On January 17, 1997, the Holiday Inn franchise was
terminated. The franchise required standard fees for advertising,
reservation system, etc.
The clientele are predominately business travelers due to the
downtown location and occupancy for the year averaged 44.5% with an
average of $57. rate per room. This yielded a revenue for available
rooms of $9,300. per year.
This facility may be changed to a long-term residential use
facility on completion of the Holiday Inn Hotel & Suites facility
adjacent to the Huntington Civic Arena. Consideration of continuing
to operate as a hotel is an alternative, and other possible uses
may be analyzed.
A wholly owned subsidiary of the registrant, Motel and
Restaurant Supply, which was incorporated in the State of West
Virginia on July 16, 1966, has had no activity since 1981.
Neither the registrant nor any of its subsidiaries has
experienced bankruptcy, receivership or similar proceedings; has been
involved in reclassification, merger or consolidation; has acquired or,
except as hereinafter set forth, disposed of any material amount of
assets otherwise than in the ordinary course of business; or has
undertaken any material change in the mode of conducting its
business.
(b) The registrant is engaged in substantially two lines of
businesses, to wit, the operation of motor hotels with dining and
banquet facilities, and residential/commercial rentals. The income
of the registrant from rentals exceeds ten percent of the consolidated
revenue of the registrant and its subsidiaries, which consolidated
revenue did not exceed $50,000,000. during any of the last three fiscal
years.
The hotel industry is highly competitive with the registrant
competing against numerous national hotel franchises in Huntington,
West Virginia. As the Companies' operations are generally one
business segment, its competition locally includes Radisson hotel,
Ramada Inn, Holiday Inn, Comfort Inn, and Red Roof Inn.
Seasonality directly affects this business as a result of
people not traveling or vacationing in large numbers in the late fall
and winter because of poor weather at these geographical locations.
At June 30, 1997, the registrant and its subsidiaries employ
approximately 50 employees.
(d) The registrant has no foreign operation.
<PAGE>
PART II
Item 2. Properties.
(a) The main physical property of the registrant is a 140
unit, four story motor hotel, with swimming pool, dining, banquet, and
lounge facilities, located in downtown Huntington, West Virginia, at
1415 Fourth Avenue. This property is owned in fee by the registrant.
The motor hotel is subject to a mortgage in favor of the Twentieth
Street Bank, Huntington, West Virginia, in the original amount of
$2,000,000., payable in monthly installments of $22,568. per month,
including interest at 10% until February 4, 2004, when the amount
due must be paid in full. The balance at June 30, 1997 is $1,340,087.
(b) The registrant owns in fee two lots, used for the over-
flow parking, across the street from its main motor hotel at 1432-34
Fourth Avenue, in Huntington, West Virginia.
(c) The registrant owns in fee an undeveloped lot acquired
for future development or parking, across an alley from its main
motor hotel at 1400 Fifth Avenue in Huntington, West Virginia. It is
anticipated the lot will be sold within the next fiscal year.
(d) The registrant owns in fee a lot improved by a three
story brick building used as a fraternity house, across an alley from
its main motor hotel, 1434 Fifth Avenue, in Huntington, West Virginia,
acquired for rental and for future development.
(e) The registrant owns in fee two lots immediately west of
its motor hotel, 1401 Fourth Avenue, in Huntington, West Virginia,
acquired for future development and currently used for parking.
This property is subject to a first mortgage in favor of the
Twentieth Street Bank in the original amount of $2,000,000. as noted
in Item 2 (a).
(f) The registrant owns in fee and operates a 40 unit, two
story apartment building within one city block of the motor hotel, at
1340 Fourth Avenue, in Huntington, West Virginia.
(g) The registrant owns in fee a lot acquired and used for
parking, across the street from its main motor hotel at 1420
Fourth Avenue, in Huntington, West Virginia.
(h) The registrant owns in fee an undeveloped lot acquired
for future development or for parking, across an alley from its main
motor hotel at 1438 Fifth Avenue, in Huntington, West Virginia.
It is anticipated the lot will be sold within the next fiscal year.
(i) The registrant owns in fee a vacant lot within one
city block of the main motor hotel at 1326 Fourth Avenue, in
Huntington, West Virginia. It is anticipated the lot will be sold
within the next fiscal year.
<PAGE>
PART II
(j) The registrant owns in fee a lot improved by a three story
building originally used as a store and apartment, within one city
block of the main motor hotel at 1416-18 Fourth Avenue, in Huntington,
West Virginia, acquired for rental and for future development,
subject to a mortgage in favor of Betty M. Dove, in the original
amount of $76,000., 10% interest, maturing June 2002, the balance of
which was $35,043. at June 30, 1997.
(k) The registrant owns in fee two parcels within one city
block of the main motor hotel at 1436-38 Fourth Avenue and 1440-42
Fourth Avenue, in Huntington, West Virginia acquired for future
development.
(l) The registrant owns in fee a parcel of real estate on the
west side of Huntington approximately 3 miles from the main motor
hotel and at an exit for Interstate 64. This purchase was finalized
in October 1988 from an option entered into in 1983. The property is
currently used as a parking lot unitl it is deemed beneficial to
build and operate a decent motel in that location.
(m) The registrant purchased a parcel of real estate with a
residential building in January 1990. This property is across an
alley from the main motor hotel and was acquired for future
development and parking.
(n) The registrant purchased a parcel of real estate with a
building housing residential and commercial tenants in July 1991.
This property is across the street from its main motor hotel and
adjacent to other rental properties and parking facilities. The
property has been renovated and is now fully utilized as rental
property. The property is subject to a mortgage in favor of West
Virginia Housing Development Fund in the original amount of $500,000.,
5.5% rate of interest, maturing November 2018, the balance of which
is $463,078.
(o) The registrant owns in fee a lot improved by construction
in progress of a Holiday Inn Hotel & Suites located in downtown Huntington
at 800 Third Avenue. This purchase was finalized in December 17, 1996
from a contract entered into on November 21, 1995. The property is subject
to a mortgage in favor of Huntington Urban Renewal Authority in the amount
of $540,000., 8.5% rate of interest, maturing February 2004, the balance
of which is $540,000. and subject to a line of credit in the amount of
$417,809., prime plus 1% rate of interest for construction in progress.
The facility is expected to be completed by February 1998 and
will be marketed for convention and business travelers. It is adjacent
to the Huntington Civic Arena and will be used as a major part of
marketing for conventions and meetings in the Tri-State area.
Annual reviews of insurance coverage are done and adequate insurance
is maintained on all properties.
<PAGE>
PART II
ITEM 3. LEGAL PROCEEDINGS:
A $10 million suit in which the Uptowner Inns, Inc. is a defendant
has been filed in Cabell County Circuit Court by James R. Burton,
an individual who was severely injured in an auto accident by a patron
of the lounge. Legal counsel believes that good defenses exist in
this action, and that the case will ultimately be resolved in Uptowner
Inns, Inc.'s favor. The insurance company has denied liability in
this case and legal counsel believes the risk of loss will fall
to Uptowner Inns, Inc.
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED
SECRUITY HOLDER MATTERS
(a) The common stock of the registrant is traded in the over-the-
counter market. During the past two years, there has been limited activity
of common stock. These shares were traded at $.65 a share.
(b) As of the 20th day of September 1997, the approximate number
of record holders of common stock securities of the registrant was 1,461.
(c) The registrant has paid no individual with respect to its
common stock during the past two years.
ITEM 6. SELECTED FINANCIAL DATA
The following financial information of Uptowner Inns, Inc., and
Subsidiaries is for the years ended June 30, 1997, June 30, 1996, June 30
1995, June 30, 1994, and June 30, 1993, on a scope similar to that set
forth in the report included elsewhere in this report. These Summaries
should be read in conjunction with the financial statements and related
notes included elsewhere in this report.
<PAGE>
<TABLE>
UPTOWNER INNS, INC.
SELECTED FINANCIAL DATA
<CAPTION>
1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C>
Operating
Revenues 1,867,013 2,098,085 2,317,690 2,114,079 2,152,955
Income (Loss) from
Operations 74,257 93,835 187,670 (81,046) (67,587)
Net Income
(Loss) 74,257 89,458 494,600 (81,046) (65,637)
Net Income (Loss)
per share .05 .06 .31 ( .05) ( .04)
Weighted Average Number
of Shares 1,583,563 1,583,563 1,583,563 1,583,563 1,583,563
Cash Dividends
Per Share - - - - -
Total
Assets 6,535,810 5,011,385 5,119,107 4,976,461 4,732,530
Long-Term
Debt 3,119,901 2,322,279 2,527,941 2,924,973 2,376,002
</TABLE>
Revenues increased in 1995 due to marketing tour buses and a
generally improved economic clientele. The decline in 1996 resulted from
the tour bus increase being temporary and the further decline in 1997
resulted from general business decline and the loss of the Holiday Inn
franchise in January 1997.
<PAGE>
<TABLE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
<CAPTION>
REVENUES
1997 1996 1995
<S> <C> <C> <C>
Total Revenues $ 1,867,013. $ 2,098,085. $ 2,317,690.
Percentage Increase
(Decrease) ( 11.0)% ( 9.5)% 9.6%
Motor Inn Revenues 1,198,307. 1,322,668. 1,528,981.
Percentage Increase
(Decrease) ( 9.4)% ( 13.5)% 7.8%
Percentage of Total Revenues 64.2% 63.0% 66.0%
Food and Beverage 352,279. 435,756 463,231.
Percentage Increase
(Decrease) ( 19.2)% ( 5.9)% 3.0%
Rents 235,986. 233,853. 226,197.
Percentage Increase
(Decrease) .9% 3.4% 29.0%
</TABLE>
Motor inn revenue decreased in 1996 due to reductions in bus tours and
competion from other facilities. Food and beverage revenues decreased due
to fewer guests and increased competition in the area due to more
restaurants. Rents increased due to slightly improved occupancy and some
rate increases.
<PAGE>
<TABLE>
<CAPTION>
OPERATING COST AND EXPENSES
1997 1996 1995 1994
<S> <C> <C> <C> <C>
Cost of Sales $ 291,619. $ 362,029. $ 397,215. $ 457,974.
Percentage increase
(decrease) (19.5)% (8.9)% (13.3)% ( 2.9)%
Salaries 475,893. 475,637. 489,763. 403,436.
Percentage increase
(decrease) .1% (2.9)% (21.4)% (8.4)%
Advertising 80,171. 117,833. 136,137. 139,974.
Percentage increase
(decrease) (32.0)% (13.4)% (2.7)% 99.4%
Utilities 118,048. 150,454. 142,520. 152,825.
Percentage increase
(decrease) (21.5)% 5.6% (6.7)% 12.9%
Repairs and Maint. 64,610. 66,769. 95,049. 156,963.
Percentage increase
(decrease) (3.2)% (29.8)% (39.4)% 33.7%
Interest 204,798. 222,742. 236,900. 202,215.
Percentage increase
(decrease) (8.1)% (6.0)% 17.2% (16.1)%
Taxes and License 196,937. 197,093. 208,048. 123,811.
Percentage increase
(decrease) ( .1)% (5.3)% 68.0% (1.9)%
Insurance and Other 36,145. 34,912. 45,027. 46,573.
Percentage increase
(decrease) ( 3.4)% (22.5)% (3.3)% (21.7)%
Total Cost
and Expenses 1,792,756. 2,004,250. 2,130,020. 2,195,125.
Percentage increase
(decrease) (10.6)% (5.9)% (3.0)% (1.1)%
Cost of sales decreased due to the decrease in the revenues and
better management of food and beverage costs. Advertising decreased in 1996
due to the room revenue decrease that affected the change under the
Holiday Inn franchise for advertising and further decreased in 1997 due to
termination of the franchise in January. Utilities decreased due to the
decreased business and the milder weather in the last fiscal year. The
registrant has accomplished only needed repairs and maintenance due to the
new facility being constructed and some uncertainty as to the use of the
current motel property in early 1998. Interest decreased due to the
principal reductions. Taxes and license increased in 1995 due to real
estate tax changes. Total costs and expenses are consistently decreasing
due to the factors affecting the major items (noted above). That is,
declining business has been a major factor in the declining costs and
expenses.
</TABLE>
<PAGE>
[CAPTION]
OTHER INCOME (EXPENSE)
1997 1996 1995
Gain (Loss) on sales of property,
plant and equipment $ - $ - $ -
Gain (Loss) on disposal of
subsidiary $ - - 306,930.
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE FEDERAL INCOME TAXES
1997 1996 1995
$ 76,208. $ 93,835. $ 494,600.
INCOME TAXES
1997 1996 1995
Income taxes (benefit) $ - $ 4,377. $ -
Effective tax rate - 4.7% -
There is no tax benefit for the fiscal years 1994 and 1993 due to
the loss and the lack of any taxable income to apply this against. For
the year ended June 30, 1996, the Company utilized operating loss
carryforwards in the amount of $38,160. to offset taxable income and
incurred $4,377. in alternative minimum tax. The Company has a
carryforward loss for taxable income until the year 2008.
INCOME (LOSS)
1997 1996 1995
$ 74,257. $ 89,458. $ 494,600.
The loss of the Holiday Inn franchise for the motor inn and
construction in progress of the Holiday Inn Hotel & Suites has had an
obvious impact on income resulting in a decrease in revenues of $231,072.
in 1997 and decreased costs and expenses of $22,494. resulted in a
decrease in Income From Operations of $15,201. in 1997.
The sale of the Parkersburg property in August 1994, with the
gain of $306,930., had an obvious impact on Income From Operations.
The decreased revenues of $219,605. in 1996 and decreased costs and
expenses of $125,770. resulted in a decrease in Income From Operations
of $400,765. in 1996.
<PAGE>
[CAPTION]
LIQUIDITY AND CAPITAL RESOURCES
1997 1996
Resources available at
June 30, 1997 and 1996
Cash $ 245,427. $ 463,998.
The registrant had significant reductions in liquidity for each
year since 1995 due to the acquisition and development of property for
the Holiday Inn Hotel & Suites adjacent to the Huntington Civic Arena.
The registrant's accounts payable in 1997 include over $408,000. for
costs in the construction project.
The inventory activities account for the significant decline in
liquidity with over $900,000. of the cash used in investing activities
coming from currently available revenues (including the increased accounts
payable).
The registrant anticipates the liquidity will continue at a below
normal level for the next several years, but should show some slight
improvement by the last quarter of the current year and into the year
following when the new facility is completed.
<PAGE>
UPTOWNER INNS, INC. AND SUBSIDIARIES
PART III
Item 10. Directors and Executive Officers of the Registrant
The information required by Item 10, Part III, will be set forth
in the definitive proxy statement to be filed by the registrant,
pursuant to Regulation 14A, under the captions "Election of Directors"
and "Executive Officers of the Company" and is incorporated herein
by reference.
Item 11. Executive Compensation
The information required by Item 11, Part III, will be set forth
in the definitive proxy statement to be filed by the registrant,
pursuant to Regulation 14A, under the caption "Remuneration of
Directors and Executive Officers", and is incorporated herein by
reference.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
(a) The registrant has issued only one type of security,
namely, common capital stock. The following table sets forth certain
information as to the persons and groups who are known to the
registrant to be the beneficial owners of more than five percent of
its voting securities.
Title of Name and Address Amount and Nature of Percent
Class of Beneficial Owner Beneficial Ownership of Class
Common Violet Midkiff 707,437 Direct and 44.7
922 Eleventh Street Indirect
Huntington, West Virginia
(b) The following table sets forth certain information as
to each class of equity securities of the registrant beneficially
owned by all directors and officers of the registrant as a group.
Title of Name and Address Amount and Nature of Percent
Class of Beneficial Owner Beneficial Ownership of Class
Common Arthur J. Huber 30,049 Indirect 1.9
Common James R. Camp 8,371 Direct .5
Common Violet Midkiff 707,437 Direct and 44.7
Indirect
<PAGE>
Item 12. Security Ownership of Certain Beneficial Owners and
Management (Cont'd)
Title of Name and Address Amount and Nature of Percent
Class of Beneficial Owner Beneficial Ownership of Class
Common Louis Abraham 3,656 Direct .2
Common Carl Midkiff 15,311 Direct and 1.0
Indirect
Common Olive Hager 21,870 Direct 1.4
Common Six Officers and 786,384 Direct and 49.7
Directors as a Indirect
Group
(c) There is no arrangement, known to the registrant, the
operation of which may at a subsequent date result in a change in
control of the registrant.
<PAGE>
UPTOWNER INNS, INC. AND SUBSIDIARIES
ITEM 14 EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K
(A)(1) Financial Statements:
Uptowner Inns, Inc. and Subsidiaries
Opinion of Independent Certified Public Accountant
Consolidated Balance Sheets as of
June 30, 1997 and 1996
Consolidated Statement of Income for the
Year Ended June 30, 1997 and 1996
Consolidated Statement of Stockholders' Equity
for the Year Ended June 30, 1997 and 1996
Consolidated Statement of Cash Flows for the
Year Ended June 30, 1997 and 1996
Notes to Consolidated Financial Statements
Uptowner Inns, Inc. and Subsidiaries
Opinion of Independent Certified Public Accountant
Consolidated Balance Sheets as of June 30, 1996 and 1995
Consolidated Statement of Income for the
Years Ended June 30, 1996 and 1995
Consolidated Statement of Stockholders' Equity
for the Years Ended June 30, 1996 and 1995
Consolidated Statement of Cash Flows for the
Years Ended June 30, 1996 and 1995
Notes to Consolidated Financial Statements
Uptowner Inns, Inc. and Subsidiaries
Opinion of Independent Certified Public Accountant
Consolidated Balance Sheets as of June 30, 1994 and 1993
Consolidated Statement of Income for the
Years Ended June 30, 1994, 1993 and 1992
Consolidated Statement of Stockholders' Equity
for the Years Ended June 30, 1994, 1993 and 1992
Consolidated Statement of Cash Flows for the
Years Ended June 30, 1994, 1993 and 1992
Notes to Consolidated Financial Statements
<PAGE>
UPTOWNER INNS, INC. AND SUBSIDIARIES
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K
(A)(2) Schedules:
Schedule II -- Accounts Receivable from
Related Parties and Underwriters
Schedule V -- Property, Plant and Equipment
Schedule VI -- Accumulated Depreciation of
Property, Plant and Equipment
Schedule VIII -- Valuation of Qualifying Accounts
Schedule XII -- Mortgage Loans on Real Estate
All other schedules are omitted since required information
is either not applicable, not deemed material or is shown in the
respective financial statements or in the notes thereto.
(A)(3) Exhibits:
(22) Subsidiaries of Uptowner Inns, Inc.:
All other required exhibits are incorporated in the
Registration Statement Number 2-90194 of Uptowner Inns, Inc.
No reports on Form 8-K have been filed during the period
covered by this report.
<PAGE>
UPTOWNER INNS, INC. AND SUBSIDIARIES
ACCOUNTS RECEIVABLE FROM RELATED PARTIES AND UNDERWRITERS
Schedule II
Column A Column B Column C Column D Column E Column F
Other
Balance at Changes Balance at
Beginning Increase End of
Description Period Additions Retirements (Decrease) Period
As to Uptowner Inns,
Inc. and Subsidiaries:
Year ended June 30, 1997
Receivable $ - $ - $ - $ - $ -
Year ended June 30, 1996
Receivable $ 5,931. $ - $ 5,931. $ - $ -
Year ended June 30, 1995
Receivable $ 1,382. $ 5,931. $ 1,382. $ - $ 5,931.
<PAGE>
UPTOWNER INNS, INC. AND SUBSIDIARIES
PROPERTY, PLANT AND EQUIPMENT
Schedule V
Column A Column B Column C Column D Column E Column F
Other
Balance at Changes Balance at
Beginning Increase End of
Description Period Additions Retirements (Decrease) Period
Year Ended June 30, 1997:
Land $1,087,921. $ 310,856. $ - $ 155,335. $1,554,112.
Building and
improvements 5,322,204. - - (332,859). 4,989,345.
Furniture and
equipment 1,405,036. 21,274. - - 1,426,310.
China, glassware
and linen 37,458. - - - 37,458.
Construction in
Progress 143,390. 1,555,026. - (140). 1,698,276.
Totals $7,996,009. $1,887,156. $ - $(177,664). $9,705,501.
Year Ended June 30, 1996:
Land $ 808,921. $ 279,000. $ - $ - $1,087,921.
Building and
improvements 5,322,204. - - - 5,322,204.
Furniture and
equipment 1,349,786. 55,250. - - 1,405,036.
China, glassware
and linen 37,458. - - - 37,458.
Construction in
Progress - 143,390. - - 143,390.
Totals $7,518,369. $ 477,640. $ - $ - $7,996,009.
Year Ended June 30, 1995:
Land $ 985,437. $ - $ 176,516. $ - $ 808,921.
Building and
improvements 6,462,612. - 1,092,949. (47,459.) 5,322,204.
Furniture and
equipment 1,398,888. 43,852. 140,413. 47,459. 1,349,786.
China, glassware
and linen 37,458. - - - 37,458.
Totals $8,884,395. $ 43,852. $ - $1,409,878. $7,518,369.
<PAGE>
UPTOWNER INNS, INC. AND SUBSIDIARIES
ACCUMULATED DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT
Schedule VI
Column A Column B Column C Column D Column E Column F
Other
Balance at Changes Balance at
Beginning Additions Retirements Increase End of
Description Period At Cost or Sales (Decrease) Period
Year Ended June 30, 1997:
Building and
improvements $2,380,279. $ 168,794. $ - $ (194,168). $2,354,905.
Furniture and
equipment 1,207,581. 40,634. - - 1,248,215.
China, glassware
and linen 22,846. - - - 22,846.
Totals $3,610,706. $ 209,428. $ - $(194,168). $3,625,966.
Year Ended June 30, 1996:
Building and
improvements $2,205,539. $ 174,740. $ - $ - $2,380,279.
Furniture and
equipment 1,165,388. 42,193. - - 1,207,581.
China, glassware
and linen 22,846. - - - 22,846.
Totals $3,393,773. $ 216,933. $ - $ - $3,610,706.
Year Ended June 30, 1995:
Building and
improvements $2,978,072. $ 31,062. $ 803,595. $ - $2,205,539.
Furniture and
equipment 1,159,656. 146,145. 140,413. - 1,165,388.
China, glassware
and linen 22,846. - - - 22,846.
Totals $4,160,574. $ 177,207. $ 944,008. $ - $3,393,773.
<PAGE>
UPTOWNER INNS, INC. AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
Schedule VIII
Column A Column B Column C Column D Column E Column F
Additions
Balance at Charged to Charged to Deductions Balance at
Beginning Profit and Other From End of
Description Period Loss Accounts Reserves Period
As to Uptowner Inns, Inc.:
Year ended June 30, 1997:
Reserve for doubtful
accounts $ 3,000. $ - $ - $ - $ 3,000.
Year ended June 30, 1996:
Reserve for doubtful
accounts $ 3,000. $ - $ - $ - $ 3,000.
Year ended June 30, 1995:
Reserve for doubtful
accounts $ 3,000. $ - $ - $ - $ 3,000.
As to Uptowner Inns, Inc.
and Subsidiaries:
Year ended June 30, 1997:
Reserve for doubtful
accounts $ 3,000. $ - $ - $ - $ 3,000.
Year ended June 30, 1996:
Reserve for doubtful
accounts $ 3,000. $ - $ - $ - $ 3,000.
Year ended June 30, 1995:
Reserve for doubtful
accounts $ 3,000. $ - $ - $ - $ 3,000.
<PAGE>
UPTOWNER INNS, INC. AND SUBSIDIARIES
NOTES PAYABLE
Schedule XII
<PAGE>
1997 1996
10% mortgage note due a financial
individual, secured by a deed of
trust, payable at $733. per month,
including interest, until June 2002 $35,043. $40,100.
2% note due City of Huntington,
secured by a second deed of trust,
payable at $2,024. per month,
including interest, until January 2008 231,439. 250,881.
10% note due a financial
institution, secured by a
deed of trust, payable at
$22,568. per month including
interest, until February
2004 1,340,087. 1,435,579.
Deferred payment note due the
City of Huntington, secured by
a deed of trust on rental property,
payable in full during first five
years if property is sold,
20% forgiveness per year
in sixth through tenth
years, dated September 1989 27,000. 36,000.
7.5% mortgage note,
unsecured, payable at $218.
per month, including
interest, until January 1995 - 22,182.
Prime plus 1% installment
note due a financial
institution, secured by
second deed of trust, payable
at $1,213. per month, including
interest, until September
2002 61,818. 70,278.
Prime plus 2% installment
note due a financial
institution, secured by
equipment, payable at $586.
per month, including interest,
until February 1997 - 5,106.
<PAGE>
UPTOWNER INNS, INC. AND SUBSIDIARIES
NOTES PAYABLE
Schedule XII
1997 1996
8.5% note due the Huntington
Urban Renewal Authority of
Huntington, secured by a deed of
trust, payable at $3,825. per
month interest only, and final
installment of all principal and
accrued interest then outstanding
due and payable February 2004 540,000. -
Prime plus 1% installment note
due a financial institution by a
credit line deed of trust, payable
at $33,901. per month until
January 2008 417,809. -
9.25% note due a related company
added to their existing note,
payable upon pay down to $25,366.
in October 2004 25,366. -
5.5% mortgage note due to
the West Virginia Housing
Development Fund, secured
by a deed of trust, payable
at $3,070. per month,
including interest, until
November 2018 463,078. 474,122.
Prime plus 1% installment
note due a financial
institution, secured by a
deed of trust, payable at
$2,902. per month, including
interest, until February
1999 202,934. 218,147.
10% note due an individual,
interest payable annually,
due December 1993 8,000. 8,000.
10% note due an individual
interest payable annually,
due December 1993 39,810. 39,810.
3,392,384. 2,600,204.
Less current portion 272,483. 277,925.
$ 3,119,901. $ 2,322,279.
<PAGE>
UPTOWNER INNS, INC. AND SUBSIDIARIES
Exhibit 22 - Subsidiaries of Uptowner Inns, Inc.
* Motel & Restaurant Supply
100% Owned Subsidiary
Incorporated in the State of West Virginia
* Represents a Corporation which had
no activity during
fiscal year June 30, 1997 or 1996
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
(Registrant) UPTOWNER INNS, INC.
By: Violet Midkiff
Violet Midkiff, President
November 1997
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following persons
on behalf of the registrant and in the capacities and on the dates
indicated.
By: Arthur Huber
Arthur Huber, Vice President
November 1997
By: James R. Camp
James R. Camp, Treasurer and Director
November 1997
By: Olive Hager
Olive Hager, Secretary and Director
November 1997
By: Carl E. Midkiff
Carl E. Midkiff, Director
November 1997
By: Louis Abraham
Louis Abraham, Director
November 1997
<PAGE>
AUDIT REPORT
OF
UPTOWNER INNS, INC. AND SUBSIDIARIES
FOR THE YEARS ENDED JUNE 30, 1997, 1996, AND 1995
AUGUST 20, 1997
<PAGE>
SOMERVILLE & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITORS' REPORT
Board of Directors
Uptowner Inns, Inc. and Subsidiary
Huntington, West Virginia
We have audited the accompanying consolidated balance sheets of
Uptowner Inns, Inc. and Subsidiary as of June 30, 1997 and June 30, 1996,
and the related consolidated statements of income, stockholders' equity
and cash flows for the year 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
audit.
We conducted our audit 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 included
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the consolidated
financial position of Uptowner Inns, Inc. and Subsidiary as of June
30, 1997 and June 30, 1996, and the consolidated results of its
operations and cash flows for the three years then ended in conformity
with generally accepted accounting principles.
(signed)
SOMERVILLE & COMPANY
August 20, 1997
Huntington, West Virginia
<PAGE>
UPTOWNER INNS, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
June 30, 1997 and 1996
<TABLE>
<CAPTION>
ASSETS
1997 1996
Current Assets:
<S> <C> <C>
Cash $ 245,427. $ 463,998.
Accounts receivable (less
allowance for doubtful
accounts of $3,000.
in 1997 and 1996) 25,203. 54,656.
Inventories 5,996. 9,226.
Prepaid expenses 51,439. 28,398.
Total current assets $ 328,065. 556,278.
Property, Plant and Equipment:
Land 1,554,112. 1,087,921.
Buildings and improvements 4,989,345. 5,322,204.
Furniture and equipment 1,463,768. 1,442,494.
Construction in Progress 1,698,276. 143,390.
9,705,501. 7,996,009.
Less accumulated depreciation
and amortization 3,625,966. 3,610,706.
Property, plant and
equipment - net 6,079,535. 4,385,303.
Other Assets:
Deposits and other 128,210. 69,804.
$ 6,535,810. $ 5,011,385.
</TABLE>
The accompanying notes are an integral part of these financial
statements.
<PAGE>
UPTOWNER INNS, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
June 30, 1997 and 1996
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
1997 1996
Current Liabilities:
<S> <C> <C>
Accounts payable $ 635,311. $ 71,182.
Accrued liabilities 103,360. 94,041.
Taxes other than
Federal income tax 192,283. 107,742.
Current portion of long-term debt 272,482. 277,925.
Total current liabilities $ 1,203,436. $ 550,890.
Long-Term Debt:
Notes payable 3,119,901. 2,322,279.
Total liabilities 4,323,337. 2,873,169.
Stockholders' Equity:
Common stock - $.50 par value;
authorized - 5,000,000 shares
issued - 1,583,563 shares 791,782. 791,782.
Additional paid - in capital 1,032,290. 1,032,290.
Retained earnings 388,401. 314,144.
Total stockholders' equity 2,212,473. 2,138,216.
Total Liabilities and Equity: $ 6,535,810. $ 5,011,385.
</TABLE>
The accompanying notes are an integral part of these financial
statements.
<PAGE>
UPTOWNER INNS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF INCOME
For the years ended June 30, 1997, 1996 and 1995
<TABLE>
<CAPTION>
1997 1996 1995
<S> <C> <C> <C>
Revenues:
Rooms $ 1,198,307. $ 1,322,668. $ 1,528,981.
Food and beverage 352,279. 435,756. 463,231.
Telephone 36,005. 31,676. 47,118.
Rent 235,986. 233,853. 226,197.
Other 44,436. 74,132. 52,163.
Total operating revenues $ 1,867,013. $ 2,098,085. $ 2,317,690.
Costs and Expenses:
Operating departments:
Cost of sales 182,211. 241,148. 236,210.
Salaries 475,893. 475,637. 489,763.
Other 109,408. 120,881. 161,005.
General and administrative 131,750. 159,848. 202,154.
Advertising 80,171. 117,833. 136,137.
Utilities 118,048. 150,454. 142,520.
Repairs and maintenance 64,610. 66,769. 95,049.
Interest 204,798. 222,742. 236,900.
Taxes and licenses 196,937. 197,093. 208,048.
Insurance and other 36,145. 34,912. 45,027.
Depreciation and amortization 192,785. 216,933. 177,207.
Total costs and expenses 1,792,756. 2,004,250. 2,130,020.
Operating income (loss) 74,257. 93,835. 187,670.
Other Income (Expense):
Gain on disposal of subsidiary - - 306,930.
Income before Federal
Income Taxes 74,257. 93,835. 494,600.
Federal Income Taxes:
Current - 4,377. -
Deferred - - -
Net Income (Loss) $ 74,257. $ 89,458. $ 494,600.
Net Income per Share $ .05 $ .06 $ .31
</TABLE>
The accompanying notes are an integral part of these financial
statements.
<PAGE>
UPTOWNER INNS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
For the years ended June 30, 1997, 1996 and 1995
<TABLE>
<CAPTION>
Additional Retained
Common Paid-In Earnings
Stock Capital (Deficit) Total
<S> <C> <C> <C> <C>
Balance -
June 30, 1994 $ 791,782. $ 1,032,290. $( 269,914.) $ 1,554,158.
Net Income - - 494,600. 494,600.
Balance -
June 30, 1995 $ 791,782. $ 1,032,290. $ 224,686. $ 2,048,758.
Net Income - - 89,458. 89,458.
Balance -
June 30, 1996 $ 791,782. $ 1,032,290. $ 314,144. $ 2,138,216.
Net Income - - 74,257. 74,257.
June 30, 1997 $ 791,782. $ 1,032,290. $ 388,401. $ 2,212,473.
</TABLE>
The accompanying notes are an integral part of these financial
statements.
<PAGE>
UPTOWNER INNS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
For the years ended June 30, 1997, 1996 and 1995
<TABLE>
<CAPTION>
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
1997 1996 1995
<S> <C> <C> <C>
Cash Flows From Operating Activities:
Net income $ 74,257. $ 89,458. $ 494,600.
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and amortization 192,785. 216,933. 177,207.
Debt forgiveness ( 9,000.) ( 9,000.) -
(Gain) loss on disposal of subsidiary - - ( 306,930.)
(Increase) decrease in other assets ( 58,406.) ( 65,619.) 37,072.
(Increase) decrease in current assets:
Accounts receivable 29,453. 25,046. ( 28,910.)
Receivable - stockholders - 5,931. ( 4,549.)
Receivable - other - 430. ( 280.)
Inventories 3,230. 1,477. 7,903.
Prepaid expenses (23,041.) ( 9,688.) 2,544.
Increase (decrease) in current liabilities:
Accounts payable 564,128. 38,590. 20,105.
Accrued liabilities 9,319. 4,407. ( 55.)
Taxes other than Federal
income taxes 84,542. ( 50,494.) ( 22,217.)
Total adjustments 793,010. 158,013. ( 118,110.)
Net Cash Provided By
Operating Activities 867,267. 247,471. 376,490.
</TABLE>
The accompanying notes are an integral part of these financial
statements.
<PAGE>
UPTOWNER INNS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended June 30, 1997, 1996 and 1995
<TABLE>
<CAPTION>
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
1997 1996 1995
<S> <C> <C> <C>
Cash Flows From Investing Activities:
Purchase of investments $ - $ - $( 576,470.)
Proceeds from sale of investments 576,470. -
Proceeds from sale of fixed assets - - 750,000.
Capital expenditures (1,887,017.)( 477,641.) ( 21,053.)
Net cash provided
by investing activities (1,887,017.) 98,829. 152,477.
Cash Flows From Financing Activities:
Issuance of long-term debt 983,175. - -
Principal payments of long-term debt ( 181,996.) ( 180,682.) ( 349,786.)
Net cash provided
by financing activities: 801,179. ( 180,682.) ( 349,786.)
Net Increase
in Cash and Cash Equivalents ( 218,571.) 165,618. 179,181.
Cash and Cash Equivalents
at Beginning of Year 463,998. 298,380. 119,199.
Cash and Cash Equivalents
at End of Year $ 245,427. 463,998. 298,380.
</TABLE>
Supplemental Disclosure of Cash Flow Information:
<TABLE>
<CAPTION>
Cash Paid During the Year for:
<S> <C> <C> <C>
Interest $ 204,798. 218,827. 232,323.
Income taxes - 4,377. -
</TABLE>
The accompanying notes are an integral part of these financial
statements.
<PAGE>
UPTOWNER INNS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of significant accounting policies:
A. Principles of consolidation:
The consolidated financial statements include the
accounts of Uptowner Inns, Inc. and its Subsidiary after
elimination of all material intercompany balances and
transactions. The wholly owned subsidiary has had no
activity since 1981.
B. Business activity:
The Company operates a motor inn in Huntington,
West Virginia that consists of dining, banquet, and
lounge facilities. In addition, the Company operates
apartment buildings and rental properties located in
Huntington, West Virginia.
C. Inventories:
Inventories are stated at the lower of cost or market on
the first-in, first-out method.
D. Property, plant and equipment:
Property, plant and equipment are stated at cost with
depreciation being provided on the straight-line method over
the estimated useful lives of the assets as follows:
Buildings and improvements 10 - 40 years
Furniture and equipment 2 - 10 years
Repairs, maintenance and renewals are charged to
operations as incurred, and expenditures for significant
betterments and renewals are capitalized.
The cost of fixed assets retired or sold, together with
the related accumulated depreciation, are removed from the
accounts and the resulting gain or loss is included in net
earnings.
<PAGE>
UPTOWNER INNS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of significant accounting policies (Cont'd):
E. Income taxes:
The income taxes are provided for the tax effects of the
transactions reported in the financial statements and consist
of taxes currently due plus deferred taxes related primarily
to different methods of depreciation for book and tax
purposes and net operating loss carryovers. The deferred tax
assets and liabilities represent the future tax return
consequences of those differences, which will either be
taxable or deductible when the assets and liabilities are
recovered or settled.
F. Per share computations:
Income per share computations are based on the weighted
average number of common shares outstanding during the year.
The average number of shares outstanding was 1,583,563 for
1997, 1996 and 1995.
G. Cash and cash equivalents:
For purposes of the statement of cash flows, cash
equivalents include time deposits, certificates of deposit, and
all highly liquid debt instruments with original maturities of
three months or less, of which the Company had none.
H. Use of 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 revenue and expenses during the reporting
period. Actual results could differ from these estimates.
I. Capitalized interest:
Interest costs are capitalized when incurred when proceeds
were used to finance the construction of assets. Capitalized
interest for fiscal year ending June 30, 1997 was $19,733. There
was no capitalized interest for the fiscal years ending June 30,
1996 and 1995.
<PAGE>
UPTOWNER INNS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. Disposal of subsidiary:
On August 31, 1994, the Company sold all the assets of
Uptowner Inns of Parkersburg, its wholly owned subsidiary for
cash of $750,000. The transaction resulted in a gain of
$306,930., which has been included in operations in the
year ended June 30, 1995.
<TABLE>
<S> <C>
Operating revenues $ -
Costs and expenses 35,527.
Net Income from operations ( 35,527.)
Other income 572,710.
Gain on disposal 306,930.
Net Income (Loss) $ 844,113.
</TABLE>
<PAGE>
UPTOWNER INNS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. Long-term debt:
The long-term indebtedness of the Company at June 30,
1997 and 1996, were as follows:
1997 1996
10% mortgage note due a
financial institution,
secured by a deed of trust,
payable at $733. per month,
including interest, until
June 2002<PAGE>
$ 35,043. $ 40,100.
2% note due City of
Huntington, secured by a
second deed of trust,
payable at $2,024. per
month, including interest,
until January 2008<PAGE>
231,439. 250,881.
10% note due a financial institution,
secured by a deed of trust, payable at
$22,568. per month including interest,
until August 2004<PAGE>
1,340,087. 1,435,579.
<PAGE>
UPTOWNER INNS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. Long-term debt (Cont'd):
1997 1996
Deferred payment note due
the City of Huntington,
secured by a deed of trust
on rental property, payable
in full during first five
years if property is sold,
20% forgiveness per year
in sixth through tenth
years, dated September 1989<PAGE>
27,000. 36,000.
8.5% note due the Huntington
Urban Renewal Authority of Huntington,
secured by a deed of trust, payable at
$3,825. per month interest only, and final
installment of all principal and accrued
interest then outstanding due and payable
February 2004 540,000. -
Prime plus 1% installment note due a
financial institution secured by a credit
line deed of trust, payable quarterly and
then payable at $33,901. per month until
January 2008 417,809. -
7.5% mortgage note, unsecured,
payable at $218. per month,
including interest - 22,182.
Prime plus 1% installment note due a
financial institution, secured by
second deed of trust, payable
at $1,140. per month, including
interest, until September 2002<PAGE>
61,818. 70,278.
Prime plus 2% installment note
due a financial institution, secured
by equipment, payable at $586.
per month, including
interest - 5,106.
<PAGE>
UPTOWNER INNS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. Long-term debt (Cont'd):
1997 1996
5.5% mortgage note due to
the West Virginia Housing
Development Fund, secured
by a deed of trust, payable
at $3,070. per month,
including interest, until
November 2018<PAGE>
463,078. 474,122.
Prime plus 1% installment note
due a financial institution,
secured by a deed of trust,
payable at $2,902. per month,
including interest, until
February 1999<PAGE>
202,934. 218,146.
3,319,208. 2,552,394.
Less current portion 224,673. 230,115.
$3,094,535. $2,322,279.
Maturities of long-term debt, including debt to stockholders,
range from 1996 to 2008 and principal payment requirements during the
next five years ending June 30, are as follows:
<TABLE>
<S> <C> <C>
1998 272,483.
1999 526,225.
2000 350,579.
2001 365,838.
2002 264,979.
Thereafter 1,612,279.
$ 3,392,383.
<PAGE>
UPTOWNER INNS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4. Related party transactions:
During October 1988, the Company purchased property from a
related entity for the sum of $528,659. Two notes existing at the
time of purchase are being paid by the Company. One loan was
refinanced to a nonstockholder in 1989. In addition, notes were
executed for the balance of the purchase price. These loans at
June 30, 1997 and 1996 were:
1997 1996
10% note due an individual,
interest payable annually,
due December 1993 $ 8,000. $ 8,000.
10% note due an individual,
interest payable annually,
due December 1993 39,810. 39,810.
47,810. 47,810.
Less current portion 47,810. 47,810.
$ - $ -
The Company is attempting to locate the individuals in
order to satisfy these debts.
The Company and its subsidiary have entered into transactions
with various entities controlled and related to one of the Company's
shareholders. Following is a summary of transactions with these
entities as of and for the year ended June 30, 1997 and 1996:
1997 1996
Purchases from related companies $ 20,618. $ 39,018.
1997 1996
9.25% note due a company added to
their existing note, payable upon pay
down to $25,366. in October 2004 $ 25,365. -
Less current portion - -
$ 25,365. $ -
<PAGE>
UPTOWNER INNS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5. Federal income taxes:
A reconciliation of income tax at the statutory rates to the
Company's effective rate for the years ended June 30, 1997, 1996
and 1995 is as follows:
</TABLE>
<TABLE>
<CAPTION>
1997 1996 1995
% of % of % of
Pre- Pre- Pre-
Tax Tax Tax
Amount Income Amount Income Amount Income
<S> <C> <C> <C> <C> <C> <C>
Income tax
provision at
statutory rate 25,247. 34.0 31,904. 34.0 168,164. 34.0
Increases (reductions):
Gain on disposal - - - - 20,228. 4.1
Dep. difference (21,549.)(29.0) (19,449.)(20.7) (26,738.)( 5.4)
Other 212. .3 519. .5 3,477. .7
Alternative
minimum tax - - 4,377. 4.7 - -
Utilization of
operating loss
carryforward ( 3,910.)( 5.3) (12,974.)(13.8) (165,131.)(33.4)
Actual provision and
effective rate - - $ 4,377. 4.7% - -
</TABLE>
The Company has available at June 30, 1997, unused operating
loss carryforwards that may be applied against future taxable
income and that expire as follows:
<TABLE>
<CAPTION>
Unused
Operating
Loss
Expiration Date Carryforwards
<S> <C>
June 30, 2002 $ 20,986.
June 30, 2003 433,830.
June 30, 2004 245,295.
June 30, 2005 128,142.
June 30, 2006 147,900.
June 30, 2007 78,505.
June 30, 2008 18,147.
June 30, 2009 70,932.
June 30, 2010 -
June 30, 2011 3,816.
June 30, 2012 1,150.
</TABLE>
<PAGE>
UPTOWNER INNS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5. Federal Income taxes (Cont'd):
Deferred tax assets as of June 30, 1997 and 1996
are as follows:
<TABLE>
1997 1996
<S> <C> <C>
Deferred tax asset $ 59,907. $ 83,885.
Valuation allowance 59,907. 83,885.
$ - $ -
</TABLE>
6. Parent Company information:
Following is the selected information for Uptowner Inns, Inc.,
Parent Company only, as of June 30, 1997, 1996 and 1995 and the
years then ended:
<TABLE>
<CAPTION>
1997 1996 1995
<S> <C> <C> <C>
Operating revenues $ 1,867,013. $ 2,098,085. $ 2,317,690.
Income from operations 74,257. 93,835. 223,197.
Net income (loss) 74,257. 89,458. ( 349,513.)
Current assets 328,065. 556,278. 990,326.
Total assets 6,535,810. 5,011,385. 5,127,107.
Current liabilities 1,203,436. 550,890. 542,408.
Total liabilities 4,323,337. 2,873,169. 3,070,349.
</TABLE>
The company has no restricted net assets.
7. Contingencies:
A $10 million suit in which the Uptowner Inns, Inc. is a
defendant has been filed by an individual who was severely injured
in an auto accident by a patron of the lounge. Legal counsel
believes that good defenses exist in this action, and that the case
will ultimately be resolved in Uptowner Inns, Inc.'s favor. The
insurance company has denied liability in this case and legal
counsel believes the risk of loss will fall to UpTowner Inns, Inc.
There are other suits pending at June 30, 1997 of approximately
$50,000. in which the Corporation is a defendant. In the opinion
of management and legal counsel, the Corporation's potential
liability arising from such cases is not reasonably determinable at
this time.
<PAGE>
UPTOWNER INNS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
8. Commitments:
The Company has entered into a maintenance agreement
expiring in May 1999.
Minimum future payments under the non-cancelable agreement
for each of the next five years and in the aggregate are:
<TABLE>
<CAPTION>
Year Ended Amount
<S> <C>
1998 1,653.
1999 1,515.
2000 -
2001 -
2002 -
Total minimum future payments $ 3,168.
</TABLE>
On January 3, 1997, the Uptowner Inns, Inc. entered into a
loan agreement with the Twentieth Street Bank for interim financing
for construction of the Holiday Inn Hotel & Suites now under
construction in the amount of $750,000. As of June 30, 1997, the
balance on this loan is zero because the need to borrow on this
loan has not arisen.
On January 3, 1997, the Uptowner Inns, Inc. entered into a
loan agreement with the Twentieth Street Bank for financing of
construction in the amount of $3,700,000. As of June 30, 1997, the
balance on this loan is $417,809.
On December 2, 1996, the Uptowner Inns, Inc. entered into a
contract agreement with The Winter Construction Company for the
construction of the Holiday Inn Hotel & Suites now under construction
in the amount of $4,950,000. As of June 30, 1997, the commitment left
on this contract is $3,698,870.
On March 22, 1996, the Uptowner Inns, Inc. entered into a
contract agreement with Marko & Associates, Inc. for the interior
design of the Holiday Inn Hotel & Suites now under construction in
amount of $31,320. As of June 30, 1997, the commitment left on this
contract is $4,957.
On September 15, 1995, the Uptowner Inns, Inc. entered into a
contract agreement with David L. Wallace & Associates, P.A. for
architectural services of the Holiday Inn Hotel & Suites now under
construction in the amount of $76,000. As of June 30, 1997, the
commitment left on this contract is $46,427.
<PAGE>
UPTOWNER INNS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
8. Commitments (Cont'd):
On March 11, 1996, the Uptowner Inns, Inc. entered into a
contract agreement with Site Design for professional services for
the Holiday Inn Hotel & Suites now under construction not to
exceed $5,000. As of June 30, 1997, the possible commitment left
on this contract is $1,017.
On March 15, 1996, the UpTowner Inns, Inc. entered into a
franchise agreement for the Holiday Inn Hotel & Suites in the
amount of $65,000. This agreement is based upon specific requirements
stated for completion of the hotel and approval before opening as
Holiday Inn Hotel & Suites.
On May 6, 1996, the Uptowner Inns, Inc. entered into a master
technology agreement with Holiday Inn Worldwide for the front desk
system for the Holiday Inn Hotel & Suites for $31,949. As of
June 30, 1997, no funds have been required due to level of
construction in progress.
On May 9, 1996, the Uptowner Inns, Inc. received a proposal
from GIAC Leasing Corporation for reservation equipment for the
Holiday Inn Hotel & Suites in the amount of $31,949. As of
June 30, 1997, a contract has not been signed, but Holiday Inn
Worldwide requires this equipment and in all probability GIAC will
be contracted.
On September 23, 1996, the Uptowner Inns, Inc. entered into
a leasing agreement with GIAC Leasing Corporation for furniture,
fixtures and equipment for the Holiday Inn Hotel & Suites for
$810,000. As of June 30, 1997, they have paid $16,200. for a
lease documentation fee and proposal fee.
On November 25, 1996, the Uptowner Inns, Inc. entered into
an agreement with The Winter Construction Company to perform
construction estimated to cost $200,000. in order to reduce the
construction contract signed on December 2, 1996. As of June 30,
1997, no funds have been required due to level of construction
in progress.
9. Credit risk:
The Company maintains cash balances at a bank. Accounts at
the institution are insured by the Federal Deposit Insurance
Corporation up to $100,000.
<PAGE>
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