Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C.
QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended October 31, 1999 Commission file No. 0-0767
LINCOLN INTERNATIONAL CORPORATION
(Exact Name of Registrant as specified in its charter)
Kentucky 61-0575092
(State of other Jurisdiction (I.R.S. Employer
incorporation or organization) Identification Number
P.O. Box 43129
2200 Greene Way, Suite 101
Louisville, Kentucky 40220
(Address or principal executive offices) (Zip Code)
(Registrants Telephone Number, Including A (502) 671-0010
Indicate by check whether the registrant (1) has filed a report required to
be filed Section 13 or 15 (d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or of 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
Indicate the numbers of shares outstanding of each of the issuer's classes of
common stock, as of the close of the period covered by this report: 7972 of
the (no-par) voting common stock.
LINCOLN INTERNATIONAL CORPORATION
CONSOLIDATED BALANCE SHEETS
10/31/99 7/31/99
ASSETS
Current assets:
Cash 172397 396466
Other receivables 2500 2500
Prepaid expenses 0 0
Total current assets 174897 398966
Net property, plant and equipment 3087065 3105922
Noncurrent assets: Deferred tax asset 185506 185506
Investment interest in Accounting USA, Inc 200000 0
Total assets 3647468 3690394
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable 28985 32297
Accrued expenses 12580 18750
Current maturities of long-term debt 0 0
Deferred Rent 0 0
Deposits 0 0
Total current liabilities 41565 51047
Long-term debt, less current maturities 0 0
Deferred Income Taxes - Non Current 883387 883387
Stockholders' equity
Common Stock
Voting 7972 shares O/S 1879898 1879898
Retained earnings 842618 876062
Total stockholders' equity 2722516 2755960
Total liabilities and stockholders' equity 3647468 3690394
LINCOLN INTERNATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDING OCTOBER 31
10/31/99 07/31/99
Revenues:
Net service and operating revenues 86276 65179
86276 65179
Cost and expenses:
Cost of service and operating revenues 58802 22157
Operating, general and administrative expenses 89643 65459
148445 87616
Income - Loss from operations -62169 -22437
Other income - expense:
Interest expense 4484 -11524
Gain on sale of assets 0 0
Miscellaneous 3200 839
7684 -10685
Income - Loss before income taxes -54485 -33122
Provision for income taxes 21042 0
Net income - loss -33443 -33122
Net income - loss per common share -4.20 -8.31
LINCOLN INTERNATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE YEAR TO DATE TO OCTOBER 31
1999 1998
Cash flows from operating activities:
Net income (loss) -33443 -33122
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation and amortization 18857 10163
(Gain) Loss on sale of assets 0 0
Other receivables 0 10725
Prepaid expenses 0 3141
Accounts payable -3312 597
Accrued expenses -6170 3501
Income Taxes 0 0
Total adjustments 9375 28127
Net cash provided by (used in) operating activities -24068 -4995
Cash flows from investing activities:
Proceeds from sale of fixed assets 0 0
(Purchases of) Sales of property and eq 0 0
(Purchases of) Sale of Investment in a -200000 0
Net cash provided by (used in) investing activities -200000 0
Cash flows from financing activities:
Net borrowings (repayments) under
short term notes payable 0 0
Proceeds from the issuance of common stock 0 0
Principal payments on long-term debt 0 -20418
Net cash provided by (used in) financing activities 0 -20418
Net increase (decrease) in cash -224068 -25413
Cash, beginning of year 396465 90994
Cash, end of period 172397 65581
Supplemental disclosure of cash flow information:
Cash paid during the year for interest 0 11524
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
OCTOBER 31, 1999
Real Estate Business
Net revenue from the real estate rentals increased by approximately
$31,097, or 24% during the quarter ended October 31, 1999 as compared to the
quarter ended October 31, 1998.
Operating costs for the quarter ended October 31, 1999 increased by
approximately $60,829, 69% as compared to the quarter ended October 31, 1998.
Increased cost relative to depreciation expense, professional fees and
utilities were cited as the major reasons for the increase.
Consolidated Operations
On August 6, 1999, the Company's Board of Directors approved the
investment of $1,500,000 in Accounting USA, Inc., a company that provides
accounting services for small businesses. The Company holds a 75% equity
position in Accounting USA, Inc. and has invested $200,000 in this company
as of the balance sheet date of October 31, 1999.
The Company had no other capital commitments at October 31, 1999.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
OCTOBER 31, 1999
Litigation Report. On March 23, 1999, two minority shareholders, Mr.
Merle Brewer and Sarah Forree, filed a lawsuit in the United States District
Court, Western District of Kentucky, Louisville Division against Lincoln
International Corporation, and individual Thomas L Sisney, David Barhorst
(who resigned June of 1998) and Mr. Richard Dolin (deceased in February of
1999). The case is styled: Civil Action No. 3:99CV-178-S. On May 18, 1999,
Lincoln International Corporation filed a Motion to Dismiss the complaint
alleging that there are no questions of law nor facts substantiating the
allegatons in the complaint. A response to the Motion to Dismiss was filed
by the plaintiffs on July 8, 1999. On June 30, 1999, the plaintiffs filed a
Motion to Amend the complaint to substitute another plaintiff in place of one
of the original plaintiffs, Sarah Forree. At this time, all Motions are
either pending or further briefing will be required. In addition to
replacing one of the original plaintiffs, defendants also raise in their
Motion to Amend the complaint the allegation that notice of dissenters rights
should have been provided in the reverse split that concluded on April 5,
1998. Legal counsel for the corporation gives little merit to the complaint
or causes of actions raised by the plaintiffs. If the Company should be
unsuccessful on its Motion to Dismiss, as well as its opposition to the other
Motions filed on behalf of the plaintiffs our answer will be filed to the
complaint.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
APRIL 30, 1999
NO DIVIDENDS WERE PAID BY THE COMPANY DURING THE INTERIM PERIOD.
Lincoln International Corporation was not required to file a Form 8K during
the current quarter.
The unaudited consolidated financial statements include the accounts
of the Company and all of its subsidiaries after eliminating all material
inter-company accounts and transactions. They reflect all adjustments which
are necessary in the opinion of management to fairly state the financial
position of the Company at October 31, 1999 and the result of its
operations and cash flow for the period then ended.
-SIGNATURES-
Pursuant to the requirement 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.
LINCOLN INTERNATIONAL CORPORATION
Lee Sisney, President
Richard J. Frockt, Treasurer
Dated this 24th day of November, 1999
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