U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT of 1934
Commission file number 333-59029
MOUNT VINTAGE PLANTATION GOLF CLUB, LLC
(Exact name of small business issuer as specified in its charter)
South Carolina 57-1069631
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
108 1/2 Courthouse Square
P.O. Box 706
Edgefield, South Carolina 29824
(Address of principal executive offices)
(803) 637-5304
Issuer's telephone number
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15 (d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes __ No X
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a.) MOUNT VINTAGE PLANTATION GOLF CLUB, LLC
BALANCE SHEET
(Unaudited)
September 30, 1998
ASSETS
Current Assets
Cash and cash equivalents $ 20,000
========
MEMBERS' EQUITY $ 20,000
========
SEE NOTES TO FINANCIAL STATEMENTS
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MOUNT VINTAGE PLANTATION GOLF CLUB, LLC
NOTES TO THE FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
In the opinion of management the accompanying unaudited financial statements
contain all adjustments necessary to fairly present the financial results for
the interim period presented. The results of operations for any interim period
are not necessarily indicative of the results to be expected for the entire
year.
ORGANIZATION AND BUSINESS ACTIVITIES - Mount Vintage Plantation Golf Club, LLC
(the Company) was organized to develop and operate a single golf course at Mount
Vintage Plantation, a residential and equestrian community. The Company is a
development stage enterprise as defined by Statement of Financial Standards
Number 7, Accounting and Reporting by Development Stage Enterprises, as it
devotes substantially all of its efforts to establish a new business. The
Company's planned principal operations have not commenced and revenue has not
been recognized from the planned principal operations nor has any expense been
incurred; therefore, no income statement is presented.
BASIS OF ACCOUNTING - The Company prepares its financial statements on the
accrual basis of accounting.
USE OF ESTIMATES - Management uses estimates and assumptions in preparing
financial statements. Those estimates and assumptions affect the reported
amounts of assets and liabilities, the disclosure of contingent assets and
liabilities, and the reported revenues and expenses.
CASH AND CASH EQUIVALENTS - The Company considers all highly liquid investments
with a maturity of three months or less to be cash equivalents.
INCOME TAXES - The Company is not a taxpaying entity for federal income tax
purposes; thus, no income tax expense is recorded in the statements. Income from
the Company is taxed to the members in their individual returns.
The following accounting policies will be enacted upon the commencement of the
Company's planned principal operations.
INVENTORIES - Inventories are stated at lower of cost or market using the
first-in, first-out (FIFO) method.
PROPERTY AND EQUIPMENT - Property and equipment are recorded at cost.
Provisions for depreciation and amortization are made by charges to income
at rates based upon the estimated useful lives of the assets and are
computed by the straight-line method for financial statement purposes and
accelerated method for tax purposes. Major additions for capital assets
are capitalized as projects are constructed. Interest incurred during the
construction phase of the fixed assets is reflected in the capitalized
value of the asset constructed. Improvements incurred to develop the golf
course will be amortized over their useful life. The costs attributable to
the raw land will not be depreciated. Maintenance expenditures will be
expensed as incurred.
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MEMBERSHIP DUES - Membership dues are recognized as revenue in the
applicable membership period. Any unearned amounts are included in
deferred revenue at the end of each accounting period.
INITIATION FEES - Initiation fees are recorded as revenue over the life of
an expected membership of ten years. The initial Membership Units sold
through the Company's Form S-11 Prospectus provides the purchaser of the
Unit with the right to a waiver of the initiation fee. The Company will
allocate these proceeds between equity and deferred revenue upon the sale
of a Membership Unit. This provision is unique to the Membership Units
offered in the Prospectus. The Company's operating agreement does not
require all Membership Units contain this provision.
ADVERTISING - The Company follows the policy of charging the costs of
advertising to expense as incurred.
PREOPENING AND ORGANIZATIONAL COSTS - Per Statement of Position (SOP)
98-5, costs of preopening activities, including organizational costs,
should be expensed as incurred. SOP 98-5 is effective for financial
statements for fiscal years beginning after December 15, 1998. The Company
plans to adopt the new standard during the current fiscal year.
NOTE 2 - LIMITED LIABILITY CORPORATION
The Company has been organized as a South Carolina Limited Liability Company by
the issuance of a certificate of organization for the Company by the Secretary
of State of South Carolina. As a result, the members' liability is limited. MV
Development Co., LLC is designated as the Manager (See Note 3).
NOTE 3 - LAND CONTRIBUTION
MV Development Company, LLC, the Company's Manager, will contribute
approximately 243 acres of land located within Mount Vintage Plantation to the
Company in exchange for 48 Membership Units. The transaction will be recorded at
historical cost.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Certain items discussed in this quarterly report may constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995 (the "Reform Act") and as such may involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance
or achievements of the Company to be materially different from any future
results, performance, or achievements expressed or implied by such
forward-looking statements. Such forward-looking statements speak only as of the
date of this quarterly report. The Company expressly disclaims any obligation or
undertaking to release publicly any updates of revisions to any forward-looking
statements contained herein to reflect any change in the Company's expectations
with regard thereto or any change in events, conditions or circumstances on
which any such statement is based.
The Company is a newly-formed, manager-managed, term limited liability company
organized under the laws of the State of South Carolina and has never conducted
any business. The Company was formed solely to develop and operate the golf
course at Mount Vintage Plantation, a residential and equestrian community
located between Edgefield, South Carolina and Augusta, Georgia. The manager of
the Company is MV Development Company, LLC, a South Carolina limited liability
company. The Company's term of existence ends on December 31, 2050; however, the
Company can be liquidated earlier by MV Development Company or by other means as
provided in the Operating Agreement. MV Development Company has no plans at this
time to liquidate the Company prior to the end of its term. The Company will
liquidate on December 31, 2050 and distribute its assets unless previously
liquidated or unless the Members vote to amend the Operating Agreement to extend
the term of the Company's existence.
The golf course, which will be called Mount Vintage Plantation Golf Club, will
be located in the center of Mount Vintage Plantation, the common areas of which
are owned and managed by MV Development Company. The golf course will be an
18-hole championship course and the Company intends for the facilities of the
golf course to include a clubhouse, cart storage facility, maintenance facility,
parking lot and course improvements, including signage, tee markers and cart
paths. Title to the land is currently held by Mount Vintage Property Co., Inc.,
which owns a majority interest in MV Development Company. Prior to or at
consummation of the offering of the Company's membership units as described
below, the Company expects that Mount Vintage Property Co., Inc. will cause the
land to be transferred to MV Development Company, which will in turn contribute
the land to the Company free and clear of all liens and encumbrances other than
any lien imposed by a credit facility, which the Company intends to enter into
to help finance the development and operation of the golf course.
Construction of the golf course began in October of 1998. The Company hopes to
complete construction of the course in May of 1999 and begin seeding at that
time so that the course will be ready for play by September of 1999. The Company
expects to open the golf course for play prior to completion of the club house.
The Company expects that total cost of development of the golf course will be
approximately $6.3 million. Development of the golf course is currently being
financed by MV Development Company.
The Company is offering up to 150 membership units at a price of $20,000 each
with an aggregate offering price of $3,000,000. The offering was registered with
the Securities and Exchange Commission on Form S-11, which registration
statement was declared effective on November 9, 1998 (Commission File No.
333-59029). Investors must subscribe prior to the subscription deadline of
December 31, 1998 and must pay $1,000 per membership unit to be purchased upon
subscribing to the
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offering. If the minimum subscription of 150 membership units is not achieved by
December 31, 1998 subscriber's funds will be returned with interest as more
fully described in the Prospectus contained in the Company's Form S-11. If the
offering is fully subscribed on or before December 31, 1998, the offering will
be consummated, and the balance of the purchase price of the membership units
will be due within fifteen (15) days of the consummation of the offering. The
Company intends to use the net offering proceeds for the following purposes in
the order of priority in which they are listed. MV Development Company has paid
all of the expenses related to the development of the golf course prior to the
consummation of the offering, and offering proceeds will first be used to
purchase all assets from MV Development Company related to the development of
the golf course prior to consummation of the offering. The price of the assets
will equal the expenses and fees incurred by MV Development Company in the
development of the golf course prior to consummation of the offering plus
interest accruing at a rate equal to the prime rate as quoted in the WALL STREET
JOURNAL. Remaining proceeds will be used to directly finance development of the
golf course.
The Company expects the proceeds of this offering to cover all of its
expenditures through February of 1999, after which it will require borrowing
under a credit facility to continue to finance expenditures. The Company expects
total expenditures from November 1, 1998 to September 30, 1999 to be
approximately $5,254,000. Of this amount, the Company expects that approximately
$296,000 will be related to the cost of designing the golf course, market
studies, legal, accounting and offering fees and pre-opening marketing costs.
The Company expects that, approximately $374,000 will be related to the
purchase, lease, or maintenance of equipment, approximately $829,000 will be
related to the construction of the golf course club house, cart storage and
maintenance facilities and grounds, $184,000 will be related to construction
interest and $71,000 will be a reserve for operating losses. The Company expects
to borrow approximately $2,746,000 under the credit facility and use $2,508,000
out of the expected $3,000,000 of gross offering proceeds to finance these
expenditures. As of this filing actual development costs have not materially
differed from those projected in the Company's Form S-11 Prospectus previously
filed with the SEC. The Company expects to have thirty-four (34) employees,
including full-time and part-time, by the end of December 1999.
Year 2000
All technology users including the Company face a potential "Year 2000" or "Y2K"
problem. The Company believes that is not as susceptible to Year 2000 problems
as many other companies because it is a new company with no existing equipment
or contract with third parties who are susceptible to the Year 2000 problem. The
Company has not and does not expect to expend a material amount of resources to
address Year 2000 problems. The Manager will adhere to a policy of purchasing
equipment that uses computer programs only if the equipment comes with a
warranty that it is "Year 2000 compliant." Similarly, the Manager will adhere to
a policy of contracting with third party suppliers and other contractors who
will provide the Company with satisfactory representations or warranties
regarding such third party's Year 2000 compliance. In the Company's worst case
Year 2000 scenario, a supplier would cease to be able to meet its obligations to
the Company in which case the Company would seek an alternative supplier. The
Company cannot estimate the cost of such contingency but does not believe such
cost would be substantial.
Other
Item 1. Legal Proceedings - None.
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<PAGE>
Item 2. Changes in Securities -
The Company is offering 150 of its membership units at a price of $20,000
each or an aggregate price of $3,000,000. The offering has been registered with
the Securities and Exchange Commission on Form S-11, which registration
statement was declared effective on November 9, 1998 (Commission File No.
333-59029). The Company began selling and accepting offers to buy the membership
units on November 18, 1998. The Company has received and expects to continue to
receive subscriptions to the offering; however, no membership units will be sold
unless and until the offering is consummated. The offering must be fully
subscribed by December 31, 1998, or else the Company must return all
subscription funds received to subscribers. If the offering is consummated,
subscribers must pay the balance due on the purchase price of their membership
units within fifteen (15) days of the date of consummation. No underwriters are
being used in connection with the offering.
Item 3. Defaults Upon Senior Securities - None.
Item 4. Submission to a Vote of Security Holders - None.
Item 5. Other Information - None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits -
3.1 Articles of Organization of the Company:
Incorporated by reference to Exhibit 3.1 to the
Company's Registration Statement on Form S-11
(Commission File No. 333-59029, hereinafter, the
"S-11").
3.2 Operating Agreement of the Company: Included as
Exhibit A to the Prospectus contained in the S-11.
4.1 Articles of Organization of the Company: Included
in Exhibit 3.1.
4.2 Operating Agreement of the Company: Included in
Exhibit 3.2.
10.1 Construction Contract between the Company and
Champion Contracting Company: Incorporated by
reference to Exhibit 10.3 to the S-11.
27.1 Financial Data Schedule: Included in electronic
filing only.
(b) Reports on Form 8-K. No report on Form 8-K was
filed during the quarter ended September 30, 1998.
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<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Mount Vintage Plantation Golf Club, LLC
------------------------------------------
Donald P. Howard
President, duly authorized representative
Date:
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
unaudited financial statements of Mount Vintage Plantation Golf Club, LLC for
the quarter ended September 30, 1998, contained in the Quarterly Report on Form
10-QSB of Mount Vintage Plantation Golf Club, LLC and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<S> <C>
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<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> NOV-09-1998
<PERIOD-END> SEP-30-1998
<CASH> 20,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 20,000
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 20,000
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 20,000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 20,000
<SALES> 0
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