UNITED STATES
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, 2000
--------------------------
OR
/X/ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________ to ______________
Commission file number 1-7865
HMG/COURTLAND PROPERTIES, INC.
----------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Delaware 59-1914299
--------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1870 S. Bayshore Drive, Coconut Grove, Florida 33133
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
305-854-6803
--------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
--------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) has filed all reports required to be filed by
Sections 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. Yes x No
----- -----
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Check whether the registrant filed all documents and reports required to be
filed by Sections 12, 13, or 15 (d) of the Exchange Act after the distribution
of securities under a plan confirmed by court.
Yes No
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.
1,089,135 Common shares were outstanding as of October 31, 2000.
<PAGE>
HMG/COURTLAND PROPERTIES, INC.
Index
PAGE
NUMBER
------
PART I. Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of
September 30, 2000 (Unaudited) and December 31, 1999..................1
Condensed Consolidated Statements of Operations for the
Three and Nine Months Ended September 30, 2000 and 1999
(Unaudited)...........................................................2
Condensed Consolidated Statements of Cash Flows for the
Nine Months Ended September 30, 2000 and 1999 (Unaudited).............3
Notes to Condensed Consolidated Financial Statements (Unaudited)......4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations..........................7
PART II. Other Information
Item 1. Legal Proceedings . . . ...................................10
Item 6. Reports on Form 8-K........................................10
Cautionary Statement. This Form 10-QSB contains certain statements relating to
future results of the Company that are considered "forward-looking statements"
within the meaning of the Private Litigation Reform Act of 1995. Actual results
may differ materially from those expressed or implied as a result of certain
risks and uncertainties, including, but not limited to, changes in political and
economic conditions; interest rate fluctuation; competitive pricing pressures
within the Company's market; equity and fixed income market fluctuation;
technological change; changes in law; changes in fiscal, monetary, regulatory
and tax policies; monetary fluctuations as well as other risks and uncertainties
detailed elsewhere in this Form 10-QSB or from time-to-time in the filings of
the Company with the Securities and Exchange Commission. Such forward-looking
statements speak only as of the date on which such statements are made, and the
Company undertakes no obligation to update any forward-looking statement to
reflect events or circumstances after the date on which such statement is made
or to reflect the occurrence of unanticipated events.
<PAGE>
<TABLE>
<CAPTION>
HMG/COURTLAND PROPERTIES, INC. AND SUBSIDIARIES Part I Financial Information
------------------------------------------------ Item I Financial Statements
CONDENSED CONSOLIDATED BALANCE SHEETS
-------------------------------------
(UNAUDITED)
September 30, December 31,
2000 1999
------------ ------------
<S> <C> <C>
ASSETS
Investment Properties, net of accumulated depreciation:
Commercial and Industrial $2,984,472 $3,097,027
Hotel and Club Facility 5,618,148 5,924,872
Yacht Slips 1,299,468 1,699,853
Land Held for Development 2,194,891 2,451,404
------------ ------------
Total investment properties, net 12,096,979 13,173,156
Investments in Marketable Securities 6,230,986 4,166,747
Other Investments 9,040,195 6,543,353
Cash and Cash Equivalents 1,621,214 3,410,476
Cash Restricted Pending Delivery of Securities 1,525,273 2,268,559
Loans, Notes and Other Receivables 1,016,422 1,319,420
Notes and Advances Due From Related Parties 916,488 925,130
Other Assets 772,645 355,643
------------ ------------
TOTAL ASSETS $33,220,202 $32,162,484
============ ============
LIABILITIES
Accounts Payable and Accrued Expenses $739,492 $971,098
Mortgages and Notes payable 9,385,574 9,808,478
Sales of Securities Pending Delivery 1,357,914 1,215,355
Income taxes payable 241,000 465,000
Other Liabilities 942,966 879,844
------------ ------------
TOTAL LIABILITIES 12,666,946 13,339,775
Minority Interests 344,299 372,729
------------ ------------
STOCKHOLDERS' EQUITY
Preferred Stock, no par value; 2,000,000 shares
authorized; none issued
Common Stock, $1 par value; 1,500,000 shares authorized;
1,315,635 and 1,245,635 shares issued and outstanding
as of September 30, 2000 and December 31, 1999, respectively 1,315,635 1,245,635
Additional Paid-in Capital 26,571,972 26,283,222
Undistributed Gains From Sales of Real Estate, net of losses 37,609,862 37,314,284
Undistributed Losses From Operations (42,621,997) (46,095,572)
Dividends paid (1,089,135)
Notes receivable - exercised stock options (288,750)
Accumulated other comprehensive income 370,484 1,084,775
------------ ------------
21,868,071 19,832,344
Less: Treasury Stock, at cost (226,500 and 165,000 shares as of
September 30, 2000 and December 31, 1999, respectively) (1,659,114) (1,382,364)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 20,208,957 18,449,980
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $33,220,202 $32,162,484
============ ============
</TABLE>
See notes to condensed consolidated financial statements
1
<PAGE>
<TABLE>
<CAPTION>
HMG/COURTLAND PROPERTIES, INC. AND SUBSIDIARIES
------------------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
-----------------------------------------------
(UNAUDITED)
Three months ended Nine Months ended
REVENUES September 30, September 30,
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Rentals and related revenue $424,543 $409,141 $1,262,890 $1,248,698
Marina revenues 115,204 114,612 373,573 388,919
Net gain from sale of marketable securities 484,962 940,130 3,049,590 1,166,748
Unrealized gain from sales of securities pending delivery 267,861 659,382
Gain from other investments 54,802 40,969 84,505 184,648
Interest and dividends from invested cash and other 202,839 64,123 371,189 171,988
-------------------------------------------------------------
Total revenues 1,550,211 1,568,975 5,801,129 3,161,001
-------------------------------------------------------------
EXPENSES
Operating expenses:
Rental Properties and other 153,476 139,201 450,499 439,935
Marina 95,402 94,062 285,043 330,994
Advisor's fee 165,000 165,000 495,000 495,000
General and administrative 67,590 51,720 157,562 171,866
Professional fees and expenses 45,559 289,757 115,422 1,439,696
Directors' fees and expenses 12,974 12,846 34,737 33,301
Depreciation and amortization 177,267 220,502 537,217 672,804
-------------------------------------------------------------
Total operating expenses 717,268 973,088 2,075,480 3,583,596
Interest expense 215,983 210,866 652,127 597,904
Minority partners' interests in operating
gains of consolidated entities 92,244 3,325 207,673 573
-------------------------------------------------------------
Total expenses 1,025,495 1,187,279 2,935,280 4,182,073
-------------------------------------------------------------
Income (loss) before sales of real estate, income from
litigation and taxes 524,716 381,696 2,865,849 (1,021,072)
Gain on sales of real estate, net 48,690 276,582 295,578 643,960
Income from litigation 3,375,847 383,726 3,375,847
-------------------------------------------------------------
Income before income taxes 573,406 4,034,125 3,545,153 2,998,735
Benefit from income taxes 224,000 224,000
-------------------------------------------------------------
Net income $797,406 $4,034,125 $3,769,153 $2,998,735
=============================================================
Net Income Per Common Share:
Basic $0.75 $3.67 $3.57 $2.73
=========== =========== =========== ===========
Diluted $0.74 $3.67 $3.53 $2.73
=========== =========== =========== ===========
</TABLE>
See notes to condensed consolidated financial statements
2
<PAGE>
<TABLE>
<CAPTION>
HMG/COURTLAND PROPERTIES, INC. AND SUBSIDIARIES
------------------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------
(UNAUDITED)
Nine months ended
September 30,
2000 1999
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $3,769,153 $2,998,735
Adjustments to reconcile net income to net cash (used in)
provided by operating activities:
Depreciation and amortization 537,217 672,804
Gain from other investments (84,505) (184,648)
Gain from sale of yacht slips (119,420)
Gain on sales of real estate, net (295,578) (643,960)
Net gain from sales of marketable securities (3,049,590) (1,166,748)
Unrealized gain from sales of securities pending delivery (659,382)
Minority partners' interest in operating gains (losses) 207,673 573
Changes in assets and liabilities:
Increase in other assets (294,713) (124,812)
Increase (decrease) in due from affiliates 8,642 (230,939)
(Decrease) increase in accounts payable and accrued expenses (231,606) 851,614
Increase (decrease) in other liabilities 63,122 (88,600)
Decrease in income taxes payable (224,000)
----------- -----------
Total adjustments (4,142,140) (914,716)
----------- -----------
Net cash (used in) provided by operating activities (372,987) 2,084,019
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Aquisitions and improvements of properties (28,824) (152,049)
Net proceeds from disposals of properties 840,889 1,315,158
Increase in mortgage loans, notes and other receivables (507,698) (50,469)
Decrease in mortgage loans, notes and other receivables 432,916 60,402
Contributions to other investments, net of distributions (2,412,337) (913,083)
Net proceeds from sales and redemptions of securities 4,486,086 1,770,071
Decrease in restricted cash from sales of securities pending delivery 743,286
Net increases in sales of securities pending delivery 801,941
Increased investments in marketable securities (4,215,026) (1,138,019)
----------- -----------
Net cash provided by investing activities 141,233 892,011
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of mortgages and notes payables (422,904) (461,034)
Additions to mortgages and notes payables 575,000
Exercised stock options 70,000
Dividends paid (1,089,135)
Net distributions to minority partners (115,469) (2,297)
----------- -----------
Net cash (used in) provided by financing activities (1,557,508) 111,669
----------- -----------
Net (decrease) increase in cash and cash equivalents (1,789,262) 3,087,699
Cash and cash equivalents at beginning of the period 3,410,476 1,834,365
----------- -----------
Cash and cash equivalents at end of the period $1,621,214 $4,922,064
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest $521,000 $409,000
=========== ===========
</TABLE>
See notes to condensed consolidated financial statements
3
<PAGE>
HMG/COURTLAND PROPERTIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
-------------------------------------------
In the opinion of the Company, the accompanying unaudited condensed
consolidated financial statements include all adjustments (consisting only of
normal recurring accruals), which are necessary for a fair presentation of the
results for the periods presented. Certain information and footnote disclosures
normally included in the financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted. It is
suggested that these condensed consolidated financial statements be read in
conjunction with the Company's Annual Report for the year ended December 31,
1999. The balance sheet as of December 31, 1999 was derived from audited
financial statements as of that date. The results of operations for the nine
months ended September 30, 2000 are not necessarily indicative of the results to
be expected for the full year.
2. NEW ACCOUNTING PRONOUNCEMENTS
-----------------------------
In March 2000, the Financial Accounting Standards Board (FASB)
issued FASB Interpretation No. 44 (Interpretation 44), Accounting for Certain
Transactions Involving Stock Compensation. Interpretation 44 provides criteria
for the recognition of compensation expense in certain stock-based compensation
arrangements that are accounted for under Accounting Principles Board Opinion
No. 25, Accounting for Stock-Based Compensation. Interpretation 44 was effective
July 1, 2000, with certain provisions that were effective retroactively to
December 15, 1998 and January 12, 2000. Adoption of Interpretation 44 did not
have an impact on the Company's financial statements.
3. GAIN ON SALES OF REAL ESTATE
----------------------------
In April 2000, The Grove Towne Center-Texas, Ltd. sold
approximately 1.9 acres of vacant land located in Houston, Texas for
approximately $591,000. The Company recognized a net gain of approximately
$247,000.
In July 2000, Courtland Investments sold approximately 2.4 acres of
vacant land located in Stoughton, Massachusetts for approximately $70,000. The
Company recognized a net gain of approximately $49,000.
4. INVESTMENTS IN MARKETABLE SECURITIES
------------------------------------
Investments in marketable securities are composed primarily of
large capital corporate equity securities in varying industries. These
securities are classified as available-for-sale and carried at fair value, based
on quoted market prices. The net unrealized gains or losses on these investments
are reported as a separate component of stockholders' equity. Gross unrealized
gains on available-for-sale securities as of September 30, 2000 were
approximately $1,127,000. Gross unrealized losses as of September 30, 2000 were
approximately $756,000.
Unrealized gain from sales of securities pending delivery is
reported on the statement of operations. For the three and nine months ended
September 30, 2000 such gains were approximately $268,000 and $659,000,
respectively. There was no such gain or loss in 1999.
Gross gains on sales of marketable securities of approximately
$526,000 and $3,146,000 were realized during the three and nine months ended
September 30, 2000, respectively. Gross losses of approximately $41,000 and
$96,000 were realized during the three and nine months ended September 30, 2000,
respectively. Gross gains and losses are based on the average cost method of
determining cost, net of incentive fee.
(4)
<PAGE>
HMG/COURTLAND PROPERTIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Continued)
5. PURCHASE OF MINORITY PARTNERSHIP INTERESTS
------------------------------------------
On May 31, 2000 the Company purchased the 25% minority partnership
interest in The Grove Towne Center-Texas, Ltd. for $275,000.
On January 1, 2000 the Company purchased the 10% minority
partnership interest in Fashion Square Partnership for approximately $266,000.
This was paid for by the cancellation of a promissory note in the same amount.
6. BASIC AND DILUTED EARNINGS PER SHARE
------------------------------------
Basic and diluted earnings per share for the three and nine months
ended September 30, 2000 and 1999 are computed as follows:
<TABLE>
<CAPTION>
For the three months ended For the nine months ended
September 30, September 30,
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Basic:
------
Net Income $797,406 $4,034,125 $3,769,153 $2,998,735
Weighted average shares outstanding 1,058,796 1,100,235 1,055,779 1,100,235
-----------------------------------------------------------
Basic earnings per share $0.75 $3.67 $3.57 $2.73
===========================================================
Diluted:
--------
Net Income $797,406 $4,034,125 $3,769,153 $2,998,735
Weighted average shares outstanding 1,058,796 1,100,235 1,055,779 1,100,235
Options to acquire common stock 11,818 --- 12,974 ---
-----------------------------------------------------------
Diluted weighted average common shares 1,070,614 1,100,235 1,068,753 1,100,235
Diluted earnings per share $0.74 $3.67 $3.53 $2.73
===========================================================
</TABLE>
(5)
<PAGE>
HMG/COURTLAND PROPERTIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Continued)
7. STOCKHOLDERS' EQUITY
--------------------
Dividend
--------
On August 23, 2000, the Company declared a special non-recurring
dividend of $1.00 per share. This dividend was paid on September 14, 2000 to
shareholders of record as of September 6, 2000 and qualifies as a dividends paid
deduction to offset taxable income for the year ended December 31, 1999.
Stock Options
-------------
On August 24, 2000, certain officers and directors of the Company
exercised all of their stock options and purchased a total of 70,000 shares of
the Company's stock for $358,750. The Company received $70,000 in cash and
promissory notes for the balance of $288,750. These promissory notes bear
interest at 6.18% per annum payable quarterly in arrears on the first day of
January, April, July and October. The outstanding principal is due on August 23,
2005 and the notes are collateralized by the stock.
(6)
<PAGE>
HMG/COURTLAND PROPERTIES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
---------------------
The Company reported net income of approximately $797,000 (or $.75 per
share) and $3,769,000 (or $3.57 per share) for the three and nine months ended
September 30, 2000, respectively. This is as compared with net income of
approximately $4,034,000 (or $3.67 per share) and $2,999,000 (or $2.73 per
share) for the three and nine months ended September 30, 1999, respectively.
Total revenues for the three months ended September 30, 2000, as compared with
the same period in 1999, decreased by approximately $19,000 (or 1%). Total
revenues for the nine months ended September 30, 2000, as compared with the same
period in 1999, increased by approximately $2,640,000 (or 84%). Total expenses
for the three and nine months ended September 30, 2000, as compared with the
same periods in 1999, decreased by approximately $162,000 (or 14%) and
$1,247,000 (or 30%), respectively. Gain on sales of real estate for the three
and nine months ended September 30, 2000 was approximately $49,000 and $296,000,
respectively, as compared with approximately $277,000 and $644,000 for the three
and nine months ended September 30, 1999, respectively.
REVENUES
For the three and nine months ended September 30, 2000 sales of
marketable securities resulted in a net gain from the sale of marketable
securities of approximately $485,000 and $3,050,000, respectively. This is as
compared with approximately $940,000 and $1,167,000 for the same comparable
periods in 1999. This represents a decrease of approximately $455,000 (or 48%)
for the three-month comparable periods and an increase of approximately
$1,883,000 (or 161%) for the nine-month comparable periods.
Unrealized gain from sales of securities pending delivery for the
three and nine months ended September 30, 2000 was approximately $268,000 and
$659,000, respectively. There was no such gain or loss in 1999.
Gain from other investments for the three and nine months ended
September 30, 2000 were approximately $55,000 and $85,000, respectively. This is
as compared with approximately $41,000 and $185,000, respectively, for the same
periods in 1999. The decrease of approximately $100,000 (or 54%) for the
nine-month comparable periods was primarily attributable to a non-recurring gain
relating to a 1999 distribution to the Company from one of its investments in a
privately held partnership. The amount of the change in the nine-month
comparable periods is not significant.
Interest and dividends from invested cash and other for the three and
nine months ended September 30, 2000 were approximately $203,000 and $371,000,
respectively. This is as compared with approximately $64,000 and $172,000,
respectively, for the same periods in 1999. These increases of approximately
$139,000 (or 216%) and $199,000 (or 116%) for the three and nine month
comparable periods were the result of gains from the sale of yacht slips during
the third quarter of 2000 of approximately $119,000 and from increased dividend
income from investments in marketable securities.
(7)
<PAGE>
HMG/COURTLAND PROPERTIES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(Continued)
EXPENSES
Marina operating expenses for the nine months ended September 30, 2000
were approximately $285,000, as compared with approximately $331,000 for the
same period in 1999. This decrease of approximately $46,000 (or 14%) was
primarily attributable to lower operating costs due to the closing of the marina
store in March 1999. The change in the three-month comparable periods was not
significant.
General and administrative expenses for the three and nine months
ended September 30, 2000 were approximately $68,000 and $158,000, respectively.
This is as compared with approximately $52,000 and $172,000, respectively, for
the same periods in 1999. The increase of approximately $16,000 (or 31%) for the
nine-month comparable period was attributable to increased state taxes incurred
during the third quarter of 2000. The change in the nine-month comparable
periods was not significant.
Professional fees for the three and nine months ended September 30,
2000 were approximately $46,000 and $115,000, respectively. This is as compared
with approximately $290,000 and $1,440,000, respectively, for the same periods
in 1999. These decreases of approximately $244,000 (or 84%) and $1,324,000 (or
92%), respectively, for the three and nine months comparable periods were
attributable to decreased legal fees as a result of the culmination of
previously reported litigation.
Depreciation and amortization expense for the three and nine months
ended September 30, 2000 was approximately $177,000 and $537,000, respectively.
This is as compared with approximately $220,000 and $673,000, respectively, for
the same periods in 1999. These decreases of approximately $43,000 (or 20%) and
$136,000 (or 20%), respectively, for the three and nine months comparable
periods were primarily due to decreased depreciation of furniture and fixtures
owned by Grove Isle Club, Inc. ("GICI"). The majority of GICI's fixed assets
have reached their useful life and are fully depreciated.
Interest expense for the three and nine months ended September 30,
2000 was approximately $216,000 and $652,000, respectively. This is as compared
with approximately $211,000 and $598,000, respectively, for the same periods in
1999.The increase of approximately $54,000 (or 9%) for the nine-month comparable
periods was primarily due to increased amounts due to TGIF Texas, Inc. and
increases in margin balances.
Minority partners' interests in operating gains of consolidated
entities for the three and nine months ended September 30, 2000 were
approximately $92,000 and $208,000, respectively. This is as compared with
approximately $3,000 and $600 for the same comparable periods in 1999. These
increases of approximately $89,000 and $207,000 for the three and nine months
comparable periods were primarily the result of increased income from 95%-owned
Courtland Investments, Inc.
Benefit from income taxes for the three and nine months ended
September 30, 2000 was $224,000. This consisted of a benefit of $465,000,
representing a reduction in the income tax provision for the year ended December
31, 1999 as a result of the dividends paid deduction in September 2000 (refer to
discussion of dividend below). This benefit was partially offset by a provision
for income taxes for the nine months ended September 30, 2000 of $241,000.
(8)
<PAGE>
HMG/COURTLAND PROPERTIES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(Continued)
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
The Company's material commitments primarily consist of maturities of
debt obligations. The funds necessary to meet these obligations are expected
from the proceeds of sales of properties, refinancing, distributions from
investments and available cash. In addition, the Company intends to continue to
seek opportunities for investment in income producing properties.
MATERIAL COMPONENTS OF CASH FLOWS
---------------------------------
For the nine months ended September 30, 2000, net cash provided by
investing activities was approximately $141,000. This was comprised primarily of
net proceeds from sales and redemptions of securities of approximately
$4,486,000, net proceeds from the disposals of property of approximately
$841,000 net increases in sales of securities pending delivery of approximately
$802,000, decreased restricted cash from sales of security pending delivery of
approximately $743,000 and decreased receivables of approximately $433,000.
These amounts were partially offset by increased investments in marketable
securities of approximately $4,215,000, contributions to other investments of
approximately $2,412,000 and increased receivables of approximately $508,000.
For the nine months ended September 30, 2000, net cash used in
financing activities was approximately $1,558,000. This consisted primarily of
approximately $1,089,000 from the payment of the special dividend and $423,000
of repayments of mortgages payable.
NEW ACCOUNTING PRONOUNCEMENTS
-----------------------------
In March 2000, the Financial Accounting Standards Board (FASB)
issued FASB Interpretation No. 44 (Interpretation 44), Accounting for Certain
Transactions Involving Stock Compensation. Interpretation 44 provides criteria
for the recognition of compensation expense in certain stock-based compensation
arrangements that are accounted for under Accounting Principles Board Opinion
No. 25, Accounting for Stock-Based Compensation. Interpretation 44 was effective
July 1, 2000, with certain provisions that were effective retroactively to
December 15, 1998 and January 12, 2000. Adoption of Interpretation 44 did not
have an impact on the Company's financial statements.
DIVIDEND
--------
On August 23, 2000, the Company declared a special non-recurring
dividend of $1.00 per share. This dividend was paid on September 14, 2000 to
shareholders of record as of September 6, 2000 and qualifies as a dividends paid
deduction to offset taxable income for the year ended December 31, 1999.
STOCK OPTIONS
-------------
On August 24, 2000, certain officers and directors of the Company
exercised all of their stock options and purchased a total of 70,000 shares of
the Company's stock for $358,750. The Company received $70,000 in cash and
promissory notes for the balance of $288,750. These promissory notes bear
interest at 6.18% per annum payable quarterly in arrears on the first day of
January, April, July and October. The outstanding principal is due on August 23,
2005 and the notes are collateralized by the stock.
(9)
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
------- -----------------
As previously reported, on August 31, 1999 the court issued a final
order and judgment in favor of the Company relating to its litigation with two
former Directors. The monetary award to the Company was $4,538,294. The total
amount of the award plus $79,427 in post judgment interest has been collected.
Item 6. Exhibits and Reports on Form 8-K
------- --------------------------------
(a) There were no reports on Form 8-K filed for the quarter ended
September 30, 2000.
(10)
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HMG/COURTLAND PROPERTIES, INC.
------------------------------------------
Dated: November 13, 2000 /s/ Lawrence Rothstein
------------------------------------------
Lawrence Rothstein
Director, President, Treasurer & Secretary
Dated: November 13, 2000 /s/ Carlos Camarotti
------------------------------------------
Carlos Camarotti
Vice President - Finance and Controller
(11)
