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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
(Mark One)
/ X / ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1999
-----------------
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
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Commission file number 1-8547
LINCORP HOLDINGS, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 23-2161279
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
3900 Park Ave., Suite 102
Edison, NJ 08820
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(Address of Principal Executive (Zip Code)
Offices)
Registrant's Telephone Number,
Including Area Code: (732) 494-9455
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Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on
- --------------------------------- which registered
Common Stock, par value $.01 --------------------------
per share NONE
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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
requirements for the past 90 days.
Yes X No
---- ----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not considered herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
The Company's common stock, which is traded over the counter, had no
identifiable transactions during 1999 and through February 25, 2000. Based on
the last identifiable common stock transaction, the aggregate market value of
the Company's common stock held by non-affiliates of the registrant would be an
indeterminate nominal amount. On February 25, 2000, there were 1,730,559 shares
of registrant's common stock outstanding.
Documents Incorporated by Reference
See Item 14 (c) for a listing of exhibits incorporated by reference.
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PART I
Items 1 and 2. Business and Properties
Recent Developments
At December 31, 1999, Lincorp Holdings, Inc. (the "Company") had
approximately $175.8 million of principal and accrued interest (the
"Indebtedness") outstanding under its various debt obligations. The Company's
parent company, Unicorp Inc. ("Unicorp"), holds all of the Company's
Indebtedness. The Company is in payment default under several of the debt
obligations comprising the Indebtedness. The Indebtedness is secured by a senior
security interest in all of the Company's assets. See Note 4 to the Company's
Financial Statements.
During 1999, Unicorp agreed to waive substantially all interest owing
by the Company on its Indebtedness to Unicorp that would otherwise accrue for
the twelve months ended December 31, 1999, which was approximately $10.9
million.
The Company's sources of funds during the year ended December 31, 1999,
and to date, have been primarily from its previously existing cash balances and
advances from Unicorp. Unless Unicorp continues to defer in realizing on the
pledged collateral, the Company will be unable to continue as a going concern.
The Company hopes that it will be able to continue as a going concern so that it
may seek out opportunities which, among other matters, will allow it to realize
on its intangible assets and tax attributes. As of December 31, 1999, the
Company's stockholders' deficit was $179.0 million.
Real Estate and Mortgage Loan Transactions
During the fourth quarter of 1997, the Company made a $0.6 million
secured first mortgage loan to Republic Development Co. (the "Republic Mortgage
Loan") for the purpose of developing a commercial real estate property. This
loan was scheduled to mature May 19, 1998. To finance this loan, the Company
borrowed funds from Unicorp. The Unicorp borrowing was in the form of a $602,000
discounted note (the "Unicorp Republic Note") which matured on May 19, 1998 in
the amount of $620,000 and is secured by the Republic Mortgage Loan.
The Republic Mortgage Loan was not repaid on May 19, 1998 and in
November 1999, the Company foreclosed on the Republic Mortgage Loan and took
possession of the land. The Company believes the land is recorded at fair market
value which is approximately the value of the original loan. The Unicorp
Republic Note, which matured on May 19, 1998, was not repaid by the Company as
its payment was dependent upon collecting the Republic Mortgage Loan. Unicorp
has agreed to defer the collection of its note until the land is sold.
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On December 16, 1998, the Company sold its limited partnership interest
in the Cambridge Park Partnership (the "Partnership") for $1,035,000 cash plus
an interest free $247,500 promissory note (the "Note") payable within three
years of closing. The Note can be prepaid by the purchaser at various discounted
values if the total Note is prepaid within two years. The discounts range from
10% to 20% depending upon how soon the prepayment is made. The Company's
investment in the Partnership was $900,000. The Company did not record the value
of the Note at the time of sale and will record it as income when the Note is
collected. Therefore, the gain recorded on this transaction in 1998 was
$135,000.
Employees
The Company presently has no compensated employees.
Item 3. Legal Proceedings
(A) Joseph Frazier ("Frazier") has instituted three lawsuits in which
the Company's predecessors in interest, Greit Realty Trust Company and Unicorp
America Corporation (collectively the "Company"), and other parties were named
as defendants. All three actions arose from a series of real estate-related
transactions which began in 1978 with respect to property in Bucks County, PA
(the "Bucks Property"). More specifically, Frazier's partnership used a mortgage
as a vehicle pursuant to which Greit paid the partnership $400,000
contemporaneously with entering into the agreement and gave the partnership a
Promissory Note in the amount of $850,000 which further provided for nineteen
annual payments of $10,000 each and a final installment of $660,000. In return,
the partnership assigned its rights in an Agreement of Sale for the Bucks
Property to Greit. The Company has not made any payment to the partnership since
1992 and has a $730,000 unsecured liability recorded in its financial
statements.
In 1993, Frazier instituted an action in the Court of Common Pleas of
Philadelphia County asserting claims against the Company for fraud and breach of
contract, i.e., the failure to make certain payments due and owing to Frazier
and/or a general partnership in which he had an interest in connection with a
mortgage granted to Frazier's partnership by Greit. In 1997, Frazier instituted
a second action in the Court of Common Pleas of Philadelphia County alleging
fraudulent conveyancing of the Bucks Property by five separate parties,
including the Company. These actions have been consolidated with Frazier v.
Estate of Wright, an action previously filed in the Court of Common Pleas of
Philadelphia County by Frazier against his late partner and attorney, Bruce
Wright, alleging legal malpractice. The two actions against the Company were
dismissed for failure to join an indispensable party. The appellate court
squashed Frazier's appeal of that dismissal as premature until judgment is
entered in the Frazier v. Estate of Wright case.
In 1998, Frazier instituted an action in the Court of Common Pleas of
Bucks County, PA asserting vague claims arising from the conveyance of the Bucks
Property. Frazier has asserted claims against the Company and numerous other
parties, including approximately 475 homeowners who currently reside on the
Bucks Property. Frazier sought to eject the homeowners from their homes and
regain possession of the Bucks Property. The Court has dismissed claims against
the home-owners. Frazier still seeks damages of
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$84 million from the Company and from other defendants. The Company is
vigorously defending the claims that have been asserted in the Bucks County
action.
(B) A tax assessment (the "Assessment") has been made by the
Commonwealth of Massachusetts against a former wholly-owned subsidiary of the
Company, which was dissolved in July 1990. The Massachusetts Department of
Revenue (the "MDR") stated, in a notice dated February 15, 1992, that the amount
due and owing was $1.2 million and it is believed that additional interest
and/or penalties have been imposed with regard to the Assessment. On November
29, 1993, an Offer in Settlement (the "Offer") was forwarded to the MDR with
respect to the Assessment which was rejected by the MDR on October 26, 1995, and
there have been no subsequent developments on this matter since that date. The
ultimate outcome of the Assessment cannot be determined at this time.
Item 4. Submission of Matters to a Vote of Security Holders
Not Applicable.
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PART II
Item 5. Market Price of and Dividends on the Registrant's Common Equity and
Related Stockholder Matters
The Company's Common Stock is traded over the counter. During 1999,
there were no identifiable stock transactions.
On February 25, 2000, there were approximately 765 stockholders of
record of the Company's Common Stock. There were no dividends paid on the
Company's Common Stock in 1999 and 1998.
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Item 6. Selected Financial Data
Year ended December 31,
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1999 1998 1997 1996 1995
---------- ----------- ---------- ----------- --------
(Dollars In Thousands)
INCOME STATEMENT DATA
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Interest income................................... $ -- $ 34 $ 19 $ 23 $ 144
Interest expense.................................. (109) (5,595) (12,418) (13,720) (13,316)
Rental income..................................... -- -- 357 1,169 487
Gain on sale of real estate assets................ -- 135 6,631 1,033 --
Other income...................................... 3 -- 236 479 253
Other expense..................................... (237) (213) (190) (160) (312)
----------- ----------- ----------- ----------- ----------
Loss before income taxes.......................... (343) (5,639) (5,365) (11,176) (12,744)
Provision for (refund of) income taxes............ (4) 22 16 17 23
----------- ---------- ---------- ---------- ---------
Net loss.......................................... $ (339) $ (5,661) $ (5,381) $ (11,193) $ (12,767)
=========== =========== =========== =========== ==========
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Item 6. Selected Financial Data, continued
At or for the year ended December 31,
--------------------------------------------------------
1999 1998 1997 1996 1995
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(In Thousands, Except Per Share Amounts)
INCOME STATEMENT DATA
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Per share amounts
Basic loss per share of common stock
outstanding.................................. $ (0.20) $ (3.27) $ (3.11) $ (6.47) $ (7.38)
============ =========== ============ ============ ==========
Weighted average shares of common stock
outstanding.................................. 1,731 1,731 1,731 1,731 1,731
============ =========== ============ ============ ===========
BALANCE SHEET DATA
Total assets...................................... $ 652 $ 746 $ 1,535 $ 23,978 $ 16,181
============ ========== ============ ============ ===========
Other borrowed funds, excluding accrued interest.. $ 97,154 $ 97,154 $ 97,814 $ 106,614 $ 105,215
============ =========== ============ ============ ===========
Total stockholders' deficit....................... $ (179,036) $ (178,697) $ (173,036) $ (167,655) $ (161,666)
============= ============ ============ ============ ===========
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Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
LIQUIDITY AND GOING CONCERN
At December 31, 1999, the Company had approximately $175.8 million of
principal and accrued interest (the "Indebtedness") outstanding under its
various debt obligations. The Company's parent company, Unicorp Inc.
("Unicorp"), holds all of the Company's Indebtedness. The Company is in payment
default under several of the debt obligations comprising the Indebtedness. The
Indebtedness is secured by a senior security interest in all of the Company's
assets. See Note 4 to the Company's Financial Statements.
During 1999, Unicorp agreed to waive substantially all interest owing
by the Company on its Indebtedness to Unicorp that would otherwise accrue for
the twelve months ended December 31, 1999, which was approximately $10.9
million.
The Company's sources of funds during the year ended December 31, 1999,
and to date, have been primarily from its previously existing cash balances and
advances from Unicorp. Unless Unicorp continues to defer in realizing on the
pledged collateral, the Company will be unable to continue as a going concern.
The Company hopes that it will be able to continue as a going concern so that it
may seek out opportunities which, among other matters, will allow it to realize
on its intangible assets and tax attributes. As of December 31, 1999, the
Company's stockholders' deficit was $179.0 million.
RESULTS OF OPERATIONS
1999 Compared to 1998
For the year ended December 31, 1999, the Company had a net loss of
$0.3 million compared to a net loss of $5.7 million for the year ended December
31, 1998. Excluding the impact of the gain on the sale of a real estate asset of
$0.1 million in 1998 and the $5.5 million of interest not waived by Unicorp in
1998, the comparative net loss for 1998 was $0.3 million.
Interest expense decreased $5.5 million primarily because Unicorp
agreed to waive substantially all interest owing by the Company on it's
Indebtedness to Unicorp that would otherwise accrue starting July 1, 1998. As
such, 1998 excludes six months of such interest while 1999 excludes twelve
months of interest.
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1998 Compared to 1997
For the year ended December 31, 1998, the Company had a net loss of
$5.7 million compared to a net loss of $5.4 million for the year ended December
31, 1997. Excluding the impact of the gains on sale of real estate assets of $.1
million in 1998 and $6.6 million in 1997, and the $5.6 million of interest
waived by Unicorp in 1998, the comparative net loss for 1998 and 1997 was $11.4
million and $12.0 million, respectively.
Excluding the gains on sale of real estate assets, total income for
1998 decreased $0.6 million compared to 1997. This decrease is primarily due to
a $0.4 million decrease in rental income. The Company's rental income was
generated solely by a subsidiary it sold in April 1997.
Interest expense decreased $6.8 million primarily because Unicorp
agreed to waive substantially all interest owing by the Company on it's
Indebtedness to Unicorp that would otherwise accrue for the period July 1, 1998
through December 31, 1998.
FINANCIAL POSITION
Material Changes Since December 31, 1998
During 1999, Unicorp agreed to waive substantially all interest owing
by the Company on its Indebtedness to Unicorp that would otherwise accrue for
the twelve months ended December 31, 1999, which was approximately $10.9
million.
During the fourth quarter of 1997, the Company made a $0.6 million
secured first mortgage loan to Republic Development Co. (the "Republic Mortgage
Loan") for the purpose of developing a commercial real estate property. This
loan was scheduled to mature May 19, 1998. To finance this loan, the Company
borrowed funds from Unicorp. The Unicorp borrowing was in the form of a $602,000
discounted note (the "Unicorp Republic Note") which matured on May 19, 1998 in
the amount of $620,000 and is secured by the Republic Mortgage Loan.
The Republic Mortgage Loan was not repaid on May 19, 1998 and in
November 1999, the Company foreclosed on the Republic Mortgage Loan and took
possession of the land. The Company believes the land is recorded at fair market
value which is approximately the value of the original loan. The Unicorp
Republic Note, which matured on May 19, 1998, was not repaid by the Company as
its payment is dependent upon collecting the Republic Mortgage Loan. Unicorp has
agreed to defer the collection of its note until the land is sold.
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There were no other significant changes in the Company's financial
position since December 31, 1998.
Item 8. Financial Statements and Supplementary Data
The Financial Statements of the Company are set forth in Part IV on
pages F-1 to F-11 and incorporated herein by reference. See "Item 14. Exhibits,
Financial Statement Schedules and Reports on Form 8-K" for a complete list of
Financial Statements and Financial Statement Schedules.
Item 9. Changes In and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
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PART III
Item 10. Directors and Executive Officers of the Registrant
Directors and Executive Officers
The term of each director is for one year and thereafter until his
successor shall have been elected and qualified. The Company's executive
officers are elected by, and serve at the discretion of the Board of Directors.
The following table sets forth certain information with respect to each
director and executive officer of the Company on March 28, 2000.
Service with
Name Age Position with Company Company from
- ----- --- --------------------- ------------
George S. Mann 67 Chairman of the Board (1) 1981
Ian G. Cockwell 52 Director (2) 1994
William Kirschenbaum 55 Director (2) 1982
Ralph V. Marra 62 Director (1) 1994
Jack R. Sauer 47 President 1996
Gordon Flatt 37 Vice President and 1998
Chief Financial Officer
(1) Member of the Executive Committee.
(2) Member of the Audit Committee.
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George S. Mann has served as Chairman of the Board since 1981, and as
President from 1989 through August, 1996. He served as Chairman of the Board of
Unicorp from 1983 until June 1990, and served as a Director until July 1998.
Ian G. Cockwell has been President of Westcliff Management Services
Inc. since prior to 1988. He is currently the Chairman of Unicorp. He has been a
Director of the Company since November 1994.
William Kirschenbaum has been the Chairman of the Board of Hamilton
Financial Services Corporation, successor to Hamilton Savings Bank, since prior
to 1988.
Ralph V. Marra has been Corporate Controller for SSR Realty Advisors,
Inc. since April 1998. Prior to that he was Director of Planning from December
1997. From October 1994 through December 1997 he was the Senior Managing
Director of Grubb and Ellis Inc.
Jack R. Sauer has been the President of the Company since August, 1996.
He is also the Vice President and Director of the Catalyst Group, Inc. since
February, 1990.
Gordon Flatt has been the President of Unicorp since March 10, 1999.
Prior to that he was the Chief Operating Officer of Unicorp since September
1997. He has been the Vice President and Chief Financial Officer of the Company
since December 1998.
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Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Exchange Act requires the Company's officers and
directors and persons who own more than 10% of the Company's Common Stock to
file initial reports of ownership and reports of changes of ownership (Forms 3,
4 and 5) of the Company's Common Stock with the Securities and Exchange
Commission (the "SEC"). Officers, directors and beneficial owners of more than
10% of the Company's Common Stock are required by the SEC regulations to furnish
the Company with copies of such forms that they file.
To the Company's knowledge, based solely on the Company's review of the
copies of such reports received by the Company, all Section 16(a) filing
requirements applicable to its officers, directors and beneficial owners of more
than 10% of the Company's Common Stock, were complied with.
Directors Remuneration
Directors of the Company received a quarterly fee of $1,500 in addition
to a fee of $600 for actual attendance at each directors' or committee meeting.
For meetings of any committee held on the same day as any meeting of the Board
of Directors, the fee for attendance at the committee meetings is $300. Where
meetings of the Board or committees thereof are held by telephone conference,
directors receive a fee of $150. Fees paid to all directors for attendance at
the Board and committee meetings during the year ended December 31, 1999,
totaled approximately $19,000.
Directors Meeting and Committees
The Board of Directors of the Company held 4 meetings during the year
ended December 31, 1999. During the year, three of the directors attended 100%
of the meetings and one director attended 50% of the meetings.
The Board of Directors has a standing Audit Committee which represents
the Board of Directors in its relations with the Company's independent
accountants and oversees the Company's compliance with operating procedures and
policies. This committee also approves the scope of the Company's financial
statement examinations, monitors the adequacy of the Company's internal controls
and reviews and monitors any other activity that the committee deems necessary
or appropriate. The Company does not have a standing Compensation or Nominating
Committee. The Executive Committee is authorized to act on behalf of the Board
of Directors between Board meetings and to have such powers and duties which may
lawfully be assigned to it under Delaware law.
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The only Committee which held a meeting during the year ended December
31, 1999, was the Audit Committee which held one meeting.
Item 11. Executive Compensation
No executive officer of the Company, received any compensation for
their services during any of the years ended December 31, 1999, 1998 or 1997.
No compensation committee report or performance graph is included
herein because none of the executive officers draws any salary from the Company.
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Item 12. Security Ownership of Directors, Nominees and Officers and Other
Principal Holders of the Company's Voting Securities
The table below sets forth information concerning the shares of the
Common Stock beneficially owned by the individual directors, all directors and
officers of the Company as a group without naming them and each person who is
known by the Company to be the beneficial owner of more than five percent of the
Common Stock as of February 25, 2000. The address of each of the directors is
c/o Lincorp Holdings, Inc., 3900 Park Ave., Suite 102, Edison, NJ 08820. The
address of Unicorp is 67 Yonge Street Suite 1101 Toronto, Ontario, Canada
M5E1J8.
Shares of
Common Stock
Beneficially
Name of Owned as of Percent of
Beneficial Owner February 25, 2000 Class
- ----------------- ----------------- ----------
Unicorp Inc. (1) 1,286,886 74.3%
Ian G. Cockwell (1) 1,286,886 74.3%
Gordon Flatt (1) 1,286,886 74.3%
William Kirschenbaum 3,767 *
All officers and directors 1,290,653 74.6%
as a group (4 persons) (1)
_____________________
* Less than 1%
(1) The stockholdings indicated for Messrs. Cockwell and Flatt are all
owned directly by Unicorp. Messrs. Cockwell and Flatt disclaim
beneficial ownership of all such shares.
Item 13. Certain Relationships and Related Transactions
See Items 1 and 2 - Real Estate and Mortgage Loan Transactions.
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PART IV
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Item 14.
Exhibits, Financial Statement Schedules and Reports on Form 8-K
Page
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(a) (1) Financial Statements
Independent Auditors' Report............................................ F-1
Balance Sheets as of
December 31, 1999 and 1998............................................ F-2
Statements of Operations for the years ended
December 31, 1999, 1998, and 1997..................................... F-3
Statements of Changes in Stockholders' Deficit
years ended December 31, 1999, 1998, and 1997......................... F-4
Statements of Cash Flows years ended
December 31, 1999, 1998 and 1997...................................... F-5
Notes to Financial Statements........................................... F-7
(2)All schedules have been omitted because they are not required
or because the required information is contained in the
financial statements or notes thereto.
(b) Reports on Form 8-K
None.
(c) Exhibits
Page
----
3.1 Restated Certificate of Incorporation of the Company, *
as amended to date (incorporated by reference to Exhibit 3.1 to the
Company's Annual Report on Form 10-K for the year ended December 31,
1987).
3.2 By-Laws of the Company as amended to date (incorporated *
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by reference to Exhibit 3.2 to the Company's Annual Report Form
10-K for the year ended December 31, 1986).
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10.01 Subscription and Purchase Agreement dated December *
31, 1987, between the Company and Unicorp (incorporated by
reference to Exhibit 2.2 to the Company's Current Report Form 8-K
dated January 14, 1988).
10.02 Letter Agreement re: Line of Credit dated November 30, 1989, *
between Unicorp and the Company (incorporated by reference to
Exhibit 10.23 to the Company's Annual Report on Form 10-K for the
year ended December 31, 1989).
10.03 Revolving Demand Note dated November 30, 1989, *
from the Company to Unicorp (incorporated by reference to Exhibit
10.24 to the Company's Annual Report on Form 10-K for the year
ended December 31, 1989).
10.04 Consulting Agreement dated as of February 13, 1990, *
between the Company and Coscan Inc. (incorporated by reference to
Exhibit 10.27 to the Company's Annual Report on Form 10-K for the
year ended December 31, 1989).
10.05 Letter Agreement re: Operating Deficit Loan Agreement *
dated February 13, 1990, between the Company and Coscan Inc.
(incorporated by reference to Exhibit 10.28 to the Company's
Annual Report on Form 10-K for the year ended
December 31, 1989).
10.06 Form of Promissory Note from the Company to Coscan Inc. *
(incorporated by reference to Exhibit 10.29 to the Company's
Annual Report on Form 10-K for the year ended December 31, 1989).
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10.07 Closing Agreement, dated as of July 23, 1990, among *
the Company, Coscan Colorado Inc. ("CCI"), Coscan Colorado
LHI Inc. and Coscan Commercial Limited Partnership, a California
Limited Partnership ("Coscan California) (incorporated by
reference to Exhibit 28.1 to the Company's Report on Form 8-K
dated August 13, 1990).
10.08 Closing Agreement, dated as of July 23, 1990, among the *
Company, Coscan California Commercial Inc. ("CCC"), Coscan
California LHI Inc. and Coscan Commercial Limited Partnership, a
California Limited Partnership ("Coscan California) (incorporated
by reference to Exhibit 28.2 to the Company's Report on Form 8-K
dated August 13, 1990).
10.09 Agreement of Limited Partnership of Coscan Commercial, *
dated as of July 23, 1990 (incorporated by reference to
Exhibit 28.3 to the Company's Report on Form 8-K dated August 13,
1990).
10.10 Agreement of Limited Partnership of Coscan Commercial, *
dated as of July 23, 1990 (incorporated by reference to
Exhibit 28.3 to the Company's Report on Form 8-K dated August 13,
1990).
10.11 Letter Agreement, dated as of July 23, 1990, among CCI, *
CCC, the Company, Coscan Commercial and Coscan California, \
regarding loans by CCI and CCC (incorporated by reference to
Exhibit 28.5 to the Company's Report on Form 8-K dated August 13,
1990).
10.12 $24,000,000 Secured Revolving Credit Agreement, dated *
as of July 25, 1990 (the "Senior Credit Agreement"), among the
Company, Hees International Bancorp Inc. ("Hees"), National Bank
of Canada ("NBC") and NBC, as Agent (incorporated by reference to
Exhibit 28.6 to the Company's Report on Form 8-K dated August 13,
1990).
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10.13 Amended and Restated Credit Agreement, dated as of July 25, *
1990, between the Company and NBC (incorporated by reference to
Exhibit 28.7 to the Company's Report on Form 8-K dated August 13,
1990).
10.14 Letter Agreement, dated July 25, 1990, between Unicorp *
and the Company regarding the revolving line of credit from UCC
to the Company (incorporated by reference to Exhibit 28.8 to the
Company's Report on Form 8-K dated August 13, 1990).
10.15 Securities Pledge Agreement, dated as of July 25, 1990, by the *
Company in favor of Unicorp (incorporated by reference to Exhibit
28.8 to the Company's Report on Form 8-K dated August 13, 1990).
10.16 Lincorp Pledge Agreement, dated as of July 25, 1990, by Lincorp *
Inc. in favor of Unicorp (incorporated by reference to Exhibit
28.10 to the Company's Report on Form 8-K dated August 13, 1990).
10.17 Subsidiaries Pledge Agreement, dated as of July 25, 1990, *
by Unicorp Delaware I, Inc., Unicorp Delaware II, Inc. and
ITT Missouri Corp. in favor of Unicorp (incorporated by reference
to Exhibit 28.11 to the Company's Report on Form 8-K dated August
13, 1990).
10.18 Security Agreement, dated as of July 25, 1990, by the *
Company in favor of Unicorp (incorporated by reference to
Exhibit 28.12 to the Company's Report on Form 8-K dated August
13, 1990).
10.19 Agreement Relating to the Lincoln Savings Bank, FSB dated as of *
December 31, 1992, among the OTS, the Company and certain other
parties (incorporated by reference to Exhibit A to the Company's
Current Report on Form 8-K dated January 20, 1993).
10.20 Trust Agreement dated as of January 20, 1993, among the OTS, *
the Company and certain other parties (incorporated by reference
to Exhibit B to the Company's Current Report on Form 8-K dated
January 20, 1993).
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10.21 Consent Agreement dated March 4, 1994, among Unicorp, *
Union Holdings, Inc., Lincorp, Inc., the Company, Hees
International Bancorp, Inc., National Bank of Canada, Anthony M.
Frank, as trustee, the Lincoln Savings Bank, FSB and Anchor
Savings Bank FSB (incorporated by referenced to Exhibit 10.23 to
the Company's Annual Report on Form 10-K for the year ended
December 31, 1993).
10.22 Loan Modification Agreement dated as of September 28, *
1995, by and between Coscan, Inc. and the Company (incorporated
by reference to Exhibit B to the Company's Report on Form 8-K
dated September 28, 1995).
10.23 Loan Modification Agreement dated as of September 28, 1995, by *
and between CCI and the Company (incorporated by reference to
Exhibit C to the Company's Report on Form 8-K dated September 28,
1995.)
10.24 Agreement dated as of September 5, 1995,by and among *
CCI, the Company, Coscan Limited Partner Corporation, CCC, Coscan
California Limited Partner Corporation and Coscan, Inc.
22 Subsidiaries of the Company.
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___________________________
* Incorporated by reference.
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<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 in Edison, New Jersey.
Dated: March 28, 2000
LINCORP HOLDINGS, INC.
By: /s/ Jack R. Sauer
--------------------
Jack R. Sauer
President
-19-
<PAGE>
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.
<TABLE>
<CAPTION>
Name Title Date
- ----- ------ -----
<S> <C> <C>
s/George S. Mann Chairman of the March 28, 2000
- --------------------------------- Board of Directors
George S. Mann (Principal Executive Officer)
s/Jack R. Sauer President March 28, 2000
- ---------------------------------
Jack Sauer
s/Ian G. Cockwell Director March 28, 2000
- ---------------------------------
Ian G. Cockwell
s/William Kirschenbaum Director March 28, 2000
- ---------------------------------
William Kirschenbaum
s/Ralph V. Marra Director March 28, 2000
- ---------------------------------
Ralph V. Marra
</TABLE>
-20-
<PAGE>
Independent Auditors' Report
The Board of Directors and Stockholders
Lincorp Holdings, Inc.:
We have audited the accompanying balance sheets of Lincorp Holdings, Inc.
("Company") as of December 31, 1999 and 1998, and the related statements of
operations, changes in stockholders' deficit, and cash flows for each of the
years in the three year period ended December 31, 1999. 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 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 Lincorp Holdings, Inc. as of
December 31, 1999 and 1998, and the results of its operations and its cash flows
for each of the years in the three year period ended December 31, 1999 in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company is in default on several of its credit
facilities and, at December 31, 1999, has $97.1 million of principal
indebtedness, and $78.1 million of accrued and unpaid interest. In addition, the
Company has a net capital deficiency of $179.0 million as of December 31, 1999.
These matters raise substantial doubt about the Company's ability to continue as
a going concern. The Company's plans in regard to these matters are also
described in Note 1. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
KPMG LLP
New York, New York
March 17, 2000
F-1
<PAGE>
LINCORP HOLDINGS, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
------------------------
1999 1998
--------- ---------
(dollars in thousands)
ASSETS
<S> <C> <C>
Cash............................................................ $ 41 $ 100
Investment in real estate....................................... 611 646
-------------- --------------
$ 652 $ 746
============== ==============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Liabilities:
Debt secured by real estate,
including accrued interest............................... $ 620 $ 620
Other borrowed funds, including accrued interest............. 175,208 175,099
Other liabilities............................................ 3,860 3,724
-------------- --------------
179,688 179,443
-------------- --------------
Commitments and contingent liabilities
Stockholders' deficit:
Preferred stock, Series A;
200 shares authorized;
no shares issued and outstanding......................... - -
Preferred stock, $.01 par value;
10,000 shares authorized;
no shares issued and outstanding......................... - -
Common stock, $.01 par value;
1,990,000 shares authorized;
1,730,559 shares issued and outstanding.................. 17 17
Capital contributed in excess of par value.................. 153,638 153,638
Accumulated deficit......................................... (332,691) (332,352)
-------------- --------------
(179,036) (178,697)
-------------- --------------
$ 652 $ 746
============== ==============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-2
<PAGE>
LINCORP HOLDINGS, INC.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Year ended December 31,
--------------------------------------------
1999 1998 1997
--------------- ------------- ---------
(in thousands, except
per share amounts)
Income:
<S> <C> <C> <C>
Rental income....................................... $ - $ - $ 357
Interest income..................................... - 34 19
Gain on sale of real estate assets.................. - 135 6,631
Other income........................................ 3 - 236
-------------- ------------ ------------
Total income................................... 3 169 7,243
-------------- ------------ ------------
Expense:
Interest expense.................................... 109 5,595 12,418
General and administrative expense.................. 237 213 190
-------------- ------------ ------------
Total expense.................................. 346 5,808 12,608
-------------- ------------ ------------
Loss before income taxes.................................. (343) (5,639) (5,365)
Provision for (refund of) income taxes.................... (4) 22 16
--------------- ------------ ------------
Net loss.................................................. $ (339) $ (5,661) $ (5,381)
============== ============ ============
Basic loss per share of common stock outstanding.......... $ (0.20) $ (3.27) $ (3.11)
============== ============= ===========
Weighted average shares of common stock outstanding....... 1,731 1,731 1,731
============== ============= ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE>
LINCORP HOLDINGS, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
<TABLE>
<CAPTION>
Capital
contributed
Common in excess Accumulated
stock of par value deficit
---------------- ---------------------- -------------
(dollars in thousands)
<S> <C> <C> <C>
Balances, December 31, 1996............................... $ 17 $ 153,638 $ (321,310)
Net loss.............................................. - - (5,381)
---------------- --------------- -----------------
Balances, December 31, 1997............................... 17 153,638 (326,691)
Net loss.............................................. - - (5,661)
---------------- --------------- -----------------
Balances, December 31, 1998............................... 17 153,638 (332,352)
Net loss.............................................. - - (339)
---------------- --------------- -----------------
Balances, December 31, 1999............................... $ 17 $ 153,638 $ (332,691)
================ =============== =================
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE>
LINCORP HOLDINGS, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year ended December 31,
--------------------------------------------
1999 1998 1997
------------- -------------- --------
(dollars in thousands)
OPERATING ACTIVITIES
<S> <C> <C> <C>
Net loss........................................................ $ (339) $ (5,661) $ (5,381)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Provision for uncollectible interest...................... 35 - -
Gain on sale of subsidiary................................ - - (146)
Gain on sale of real estate assets........................ - (135) (6,631)
Equity income from real estate partnership................ - - (60)
Decrease (increase) in other assets....................... - (34) 74
Increase (decrease) in other liabilities.................. 136 (62) 10
Increase in interest payable.............................. 109 5,594 11,840
------------- ------------ ---------------
Net cash used in operating activities........................... (59) (298) (294)
-------------- ------------- ----------------
INVESTING ACTIVITIES
Proceeds from sale of subsidiary................................ - - 50
Proceeds from sale of real estate assets........................ - 1,035 -
Investment in real estate and mortgage loans.................... - - (745)
------------- ------------ --------------
Net cash provided by (used in) investing activities............. - 1,035 (695)
------------- ------------ --------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
LINCORP HOLDINGS, INC.
STATEMENTS OF CASH FLOWS
(continued)
<TABLE>
<CAPTION>
Year ended December 31,
--------------------------------------------
1999 1998 1997
------------- -------------- --------
(dollars in thousands)
FINANCING ACTIVITIES
<S> <C> <C> <C>
Funds borrowed ............................................... - - 802
Repayment of borrowed funds..................................... - (660) -
------------- ------------ -------------
Net cash provided by (used in) financing activities............. - (660) 802
------------- ------------ -------------
Net (decrease) increase in cash................................. (59) 77 (187)
Cash, beginning of year......................................... 100 23 210
------------- ----------- -------------
Cash, end of year............................................... $ 41 $ 100 $ 23
============= =========== =============
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION
Cash paid during the year for:
Interest.................................................. $ - $ - $ 579
Income taxes.............................................. 2 22 16
Noncash investing and financing activities:
Assets sold............................................... $ - $ - $ 22,989
Liabilities sold.......................................... - - 13,210
Debt repurchased.......................................... - - 16,506
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-6
<PAGE>
LINCORP HOLDINGS, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - LIQUIDITY AND GOING CONCERN
- ------------------------------------
At December 31, 1999, Lincorp Holdings, Inc. (the "Company") had
approximately $175.8 million of principal and accrued interest (the
"Indebtedness") outstanding under its various debt obligations. The Company's
parent company, Unicorp Inc. ("Unicorp"), holds all of the Company's
Indebtedness. The Company is in payment default under several of the debt
obligations comprising the Indebtedness. The Indebtedness is secured by a senior
security interest in all of the Company's assets.
During 1998 and 1999, Unicorp agreed to waive substantially all
interest owing by the Company on its Indebtedness to Unicorp that would
otherwise accrue for the period July 1, 1998 through December 31, 1999. For the
twelve months ended December 31, 1999 the interest waived was approximately
$10.9 million and for the six months ended December 31, 1998 the interest waived
was approximately $5.6 million.
The Company's sources of funds during the year ended December 31, 1999,
and to date, have been primarily from its previously existing cash balances and
advances from Unicorp. Unless Unicorp continues to defer in realizing on the
pledged collateral, the Company will be unable to continue as a going concern.
NOTE 2 - REAL ESTATE OPERATIONS
- -------------------------------
During the fourth quarter of 1997, the Company made a $0.6 million
secured first mortgage loan to Republic Development Co. (the "Republic Mortgage
Loan") for the purpose of developing a commercial real estate property. This
loan was scheduled to mature May 19, 1998. To finance this loan, the Company
borrowed funds from Unicorp. The Unicorp borrowing was in the form of a $602,000
discounted note (the "Unicorp Republic Note") which matured on May 19, 1998 in
the amount of $620,000 and was secured by the Republic Mortgage Loan.
The Republic Mortgage Loan was not repaid on May 19, 1998 and in
November 1999, the Company foreclosed on the Republic Mortgage Loan and took
possession of the land. The Company believes the land is recorded at fair market
value which is approximately the value of the original loan. The Unicorp
Republic Note, which matured on May 19, 1998, was not repaid by the Company as
its payment is dependent upon collecting the Republic Mortgage Loan. Unicorp has
agreed to defer the collection of its note until the land is sold.
On December 16, 1998, the Company sold its limited partnership interest
in the Cambridge Park Partnership (the "Partnership") for $1,035,000 cash plus
an interest free $247,500 promissory note (the "Note") payable within three
years of closing. The Note can be prepaid by the purchaser at various discounted
values if the total Note is prepaid within two years. The discounts range from
10% to 20% depending upon how soon the
F-7
<PAGE>
LINCORP HOLDINGS, INC.
NOTES TO FINANCIAL STATEMENTS
prepayment is made. The Company's investment in the Partnership was $900,000.
The Company did not record the value of the Note at the time of sale and will
record it as income when the Note is collected. Therefore, the gain recorded on
this transaction in 1998 was $135,000.
During the third quarter of 1997, the Company sold its interest in the
Colorado State Bank Building (the "CSBB") to one of the other owners of CSBB
(the "Purchaser") in exchange for $16.5 million of the Company's outstanding
debt ($12.6 million in principal and $3.9 million in accrued interest) which the
Purchaser acquired from Unicorp. As of the date of sale, the Company's recorded
net book value for the CSBB was $9.9 million and therefore the gain on the sale
was approximately $6.6 million.
During the second quarter of 1997, the Company sold its wholly-owned
subsidiary, DB Holdings, Inc. ("DBH") for $50,000. At the time of sale, DBH's
liabilities exceeded its assets by approximately $96,000, resulting in a gain on
the sale of approximately $146,000.
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- ---------------------------------------------------
INCOME TAXES
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
basis. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax
assets and liabilities of change in tax rates is recognized in income in the
period that includes the enactment date.
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 revenues and expenses during the
reporting period. Actual results could differ from those estimates.
INVESTMENTS IN MORTGAGE LOANS AND REAL ESTATE
Investments in mortgage loans and real estate are carried at cost.
F-8
<PAGE>
LINCORP HOLDINGS, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 4 - OTHER BORROWED FUNDS
The Company's other borrowed funds are as follows:
<TABLE>
<CAPTION>
December 31,
-----------------------
1999 1998
----------- -------
(dollars in thousands)
Principal
<S> <C> <C>
Senior secured revolving credit facility (a)................... $ 10,261 $ 10,261
Subordinated term loan (b)..................................... 65,000 65,000
Junior line of credit (c)...................................... 20,494 20,494
MSLL Note (d).................................................. 1,399 1,399
----------- -----------
97,154 97,154
Accrued interest............................................... 78,054 77,945
----------- -----------
$ 175,208 $ 175,099
=========== ===========
</TABLE>
(a) This debt facility, which is held by Unicorp, expired in August 1991 and
the Company has made no interest payments on this facility since its
expiration.
(b) This $65 million facility with Unicorp matured in August 1997, and calls
for interest-only payments at a fixed rate of 11.4 %, payable
semi-annually. The Company may prepay the loan at any time in whole or in
amounts aggregating $1 million or any larger multiple of $1 million. The
term loan includes convenants, among others, that require the maintenance
of a minimum level of tangible net worth and limit aggregate levels of
additional indebtedness. As a result of the losses incurred by the
Company, it was not in compliance with the above covenants and it has not
paid its semi-annual interest payment since August 1991.
(c) In November 1989, the Company entered into an agreement with Unicorp that
provided the Company with a line of credit in the aggregate amount of $30
million (amended to $25 million on July 25,1990) due on demand with an
interest rate of prime plus 3.5% and a standby fee of one quarter of one
percent of the unused portion of the commitment.
(d) This note with Unicorp matures June 30, 2005, and has an interest rate of
6.38%.
During 1999, the weighted average amount of total principal debt
outstanding was $97.2 million (1998 - $98.4 million). The weighted average
interest cost of these funds during 1998 was 5.68 %. There is no weighted
average interest cost for 1999 and the 1998 average interest cost was low
both due to the Unicorp partial waiver of interest discussed in Note 1.
The maximum amount of borrowed principal funds
F-9
<PAGE>
outstanding at any one time during 1999 and 1998 was approximately $97.2
million and $98.4 million, respectively.
SFAS No. 107 "Disclosures about Fair Value of Financial Instruments"
requires entities to disclose the fair value of on and off-balance sheet
financial instruments. In view of the financial position of the Company at
December 31, 1999, management has determined it is not practicable to
estimate the fair value of debt and other borrowed funds.
NOTE 5 - INCOME TAXES
- ---------------------
Set forth below is an analysis of the Company's provision (refund) for
income taxes for the years ended December 31, 1999, 1998 and 1997.
<TABLE>
<CAPTION>
1999 1998 1997
--------- --------- ------
(dollars in thousands)
<S> <C> <C> <C>
Current provision (refund):
State and local income taxes.............................. $ (4) $ 22 $ 16
========== ========= =========
</TABLE>
A reconciliation of the total provision (benefit) for income taxes to
amounts computed by applying the federal tax rate to the net loss is as follows:
<TABLE>
<CAPTION>
1999 1998 1997
--------- --------- ------
(dollars in thousands)
<S> <C> <C> <C>
Computed at statutory rate..................................... $ (117) $ (1,917) $ (1,824)
State and local income taxes (benefit)......................... (3) 14 11
Effect of no benefit recognized for net operating losses....... 116 1,925 1,829
--------- --------- ---------
Provision (refund) for income taxes............................ $ (4) $ 22 $ 16
========== ========= =========
</TABLE>
The accompanying balance sheets reflect no deferred tax assets or
liabilities as of December 31, 1999 and 1998.
As part of the sale of Lincoln, the Company's debt previously owed to
the National Bank of Canada ("NBC") of approximately $77 million plus accrued
and unpaid interest was transferred to Unicorp. The debt acquired from NBC by
Unicorp was acquired at a cost of $4.7 million. As a result of the transfer of
the debt to an affiliate of the Company, the amount of debt transferred which is
in excess of the face amount is, for federal and state income tax purposes,
considered forgiveness of debt of the Company and therefore is required to be
included as taxable income by the Company. The Company will not have to pay
federal or state taxes on this income because of its insolvency pursuant to
Internal Revenue Service Code Section 108 (Discharge of
F-10
<PAGE>
Indebtedness). However, tax attributes of the Company (net operating loss carry
forwards, capital losses and built-in losses) will be reduced to the extent of
the forgiveness of indebtedness. Additionally, for federal tax purposes, the
Company may realize a bad debt loss of approximately $85 million, as well as
certain as yet undetermined and unrealized potential capital losses. The Company
has fully reserved any deferred tax benefit associated with the net operating
loss carryforwards.
NOTE 6 - LEGAL PROCEEDINGS
- --------------------------
(A) Joseph Frazier ("Frazier") has instituted three lawsuits in which
Lincorp Holdings, Inc., the Company's predecessors in interest, Greit Realty
Trust Company and Unicorp America Corporation (collectively the "Company"), and
other parties were named as defendants. All three actions arose from a series of
real estate-related transactions which began in 1978 with respect to property in
Bucks County, PA (the "Bucks Property"). More specifically, Frazier's
partnership used a mortgage as a vehicle pursuant to which Greit paid the
partnership $400,000 contemporaneously with entering into the agreement and gave
the partnership a Promissory Note in the amount of $850,000 which further
provided for nineteen annual payments of $10,000 each and a final installment of
$660,000. In return, the partnership assigned its rights in an Agreement of Sale
for the Bucks Property to Greit. The Company has not made any payment to the
partnership since 1992 and has a $730,000 unsecured liability recorded in its
financial statements.
In 1993, Frazier instituted an action in the Court of Common Pleas of
Philadelphia County asserting claims against the Company for fraud and breach of
contract, i.e., the failure to make certain payments due and owing to Frazier
and/or a general partnership in which he had an interest in connection with a
mortgage granted to Frazier's partnership by Greit. In 1997, Frazier instituted
a second action in the Court of Common Pleas of Philadelphia County alleging
fraudulent conveyancing of the Bucks Property by five separate parties,
including the Company. These actions have been consolidated with Frazier v.
Estate of Wright, an action previously filed in the Court of Common Pleas of
Philadelphia County by Frazier against his late partner and attorney, Bruce
Wright, alleging legal malpractice. The two actions against the Company were
dismissed for failure to join an indispensable party. The appellate court
squashed Frazier's appeal of that dismissal as premature until judgment is
entered in the Frazier v. Estate of Wright case.
In 1998, Frazier instituted an action in the Court of Common Pleas of
Bucks County, PA asserting vague claims arising from the conveyance of the Bucks
Property. Frazier has asserted claims against the Company and numerous other
parties, including approximately 475 homeowners who currently reside on the
Bucks Property. Frazier sought to eject the homeowners from their homes and
regain possession of the Bucks Property. The Court has dismissed claims against
the home-owners. Frazier still seeks
F-11
<PAGE>
damages of $84 million from the Company and from other defendants. The Company
is vigorously defending the claims that have been asserted in the Bucks County
action.
(B) A tax assessment (the "Assessment") has been made by the
Commonwealth of Massachusetts against a former wholly-owned subsidiary of the
Company, which was dissolved in July 1990. The Massachusetts Department of
Revenue (the "MDR") stated, in a notice dated February 15, 1992, that the amount
due and owing was $1.2 million and it is believed that additional interest
and/or penalties have been imposed with regard to the Assessment. On November
29, 1993, an Offer in Settlement (the "Offer") was forwarded to the MDR with
respect to the Assessment which was rejected by the MDR on October 26, 1995, and
there have been no subsequent developments on this matter since that date. The
ultimate outcome of the Assessment cannot be determined at this time.
F-12
<PAGE>
EXHIBIT INDEX
Exhibit No. Document Name
- ----------- -------------
22 Subsidiaries of the Company
27 Financial Data Schedule
<PAGE>
Exhibit 22
Rev. 12/31/99
SUBSIDIARIES OF LINCORP HOLDINGS, INC.
--------------------------------------
IIT Missouri Corp.
IIT Realty Corp.
Lincorp, Inc.
Pleasure Island Corp.
Unicorp Delaware I, Inc.
Unicorp Delaware II, Inc.
Unicorp Holdings (U.S.) Incorporated
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-mos
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 41
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 652
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 17
<OTHER-SE> 179,053
<TOTAL-LIABILITY-AND-EQUITY> 652
<SALES> 0
<TOTAL-REVENUES> 3
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 237
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 109
<INCOME-PRETAX> (343)
<INCOME-TAX> (4)
<INCOME-CONTINUING> (339)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (339)
<EPS-BASIC> (0.20)
<EPS-DILUTED> (0.20)
</TABLE>
