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<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
JOINT QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 or
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 1-8927 Commission File Number: 0-16156
(formerly 0-6627)
HOMEFREE VILLAGE RESORTS, INC. HOMEFREE INVESTORS L.P.
(Exact name of registrant as specified (Exact name of registrant as
in its charter specified in its charter)
Delaware Delaware
(State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)
37-0959405 84-1062287
(I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
1400 S. Colorado Boulevard 1400 S. Colorado Boulevard
Denver, Colorado 80222 Denver, Colorado 80222
(Address of principal executive offices, (Address of principal executive
including zip code) offices, including zip code)
(303) 757-3002 (303) 757-3002
(Registrant's telephone number, (Registrant's telephone number,
including area code)* including area code)*
Indicate by check mark whether the registrants (1) have 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
registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days.
YES NO X
----- -----
Indicate the number of shares and interests outstanding of each of the issuers'
classes of common stock or partnership interests, respectively, as of the close
of business on June 26, 1995:
<TABLE>
<S> <C> <C>
Homefree Village Resorts, Inc. Common Stock $.001 Par Value 10,483,982
Homefree Investors L.P. Assignee Limited Partnership Interest 10,483,982
</TABLE>
N/A
(former name, former address and former fiscal year, if changed since last
report)
<PAGE> 2
HOMEFREE VILLAGE RESORTS, INC. AND HOMEFREE INVESTORS L.P.
INDEX
<TABLE>
<CAPTION>
Page
Number
------
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
COMBINED
Combined Balance Sheets --
March 31, 1995 and December 31, 1994 2
Combined Statements of Operations --
Three Months ended March 31, 1995 and 1994 4
Combined Statements of Cash Flows --
Three Months ended March 31, 1995 and 1994 5
THE COMPANY
Consolidated Balance Sheets --
March 31, 1995 and December 31, 1994 6
Consolidated Statements of Operations --
Three Months ended March 31, 1995
and 1994 8
Consolidated Statements of Cash Flows --
Three Months ended March 31, 1995 and 1994 9
THE PARTNERSHIP
Balance Sheets -- March 31, 1995 and
December 31, 1994 10
Statements of Operations -- Three Months
ended March 31, 1995 and 1994 11
Statements of Cash Flows --
Three Months ended March 31, 1995 and 1994 12
Notes to Financial Statements 13
Item 2. Management's Discussion and Analysis 15
of Financial Condition and Results
of Operations
PART II. OTHER INFORMATION 17
</TABLE>
1
<PAGE> 3
HOMEFREE VILLAGE RESORTS, INC. AND SUBSIDIARIES
AND HOMEFREE INVESTORS L.P. (a limited partnership)
COMBINED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
---------- ------------
<S> <C> <C>
CURRENT ASSETS: (unaudited)
Cash and cash equivalents $ 14,400 $ 10,600
Other current assets 27,100 9,600
---------- ----------
Total current assets 41,500 20,200
RECEIVABLES FROM UNCONSOLIDATED
ENTITIES, net 8,797,700 8,915,600
INVESTMENTS IN UNCONSOLIDATED
ENTITIES 94,900 94,400
PROPERTY, FURNITURE AND EQUIPMENT, at cost
Office furniture and equipment 98,500 95,100
Vehicles 25,000 25,000
---------- ----------
123,500 120,100
Accumulated depreciation (105,200) (103,600)
---------- ----------
Net property and equipment 18,300 16,500
---------- ----------
OTHER ASSETS
Land option costs 195,900 195,600
TOTAL ASSETS $9,148,300 $9,242,300
========== ==========
</TABLE>
See Notes to Financial Statements. 2
<PAGE> 4
LIABILITIES, STOCKHOLDERS' EQUITY AND PARTNERS' DEFICIT
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
----------- ------------
(unaudited)
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable and accrued
expenses $ 88,700 $ 93,600
LONG TERM DEBT, less current maturities:
Unconsolidated entity 7,154,500 7,154,500
Other 44,400 44,400
DEFERRED INCOME TAXES 169,700 200,000
DEFERRED PROFIT 488,500 488,500
OTHER LIABILITIES 3,400 3,400
STOCKHOLDER'S EQUITY AND PARTNERS'
DEFICIT:
Preferred stock, $1.00 par value;
3,000,000 shares authorized; none issued and outstanding
Common stock, $.001 par value;
15,000,000 shares authorized; 10,484,000 shares issued and
outstanding 10,500 10,500
Additional paid-in capital 3,537,000 3,537,000
Accumulated deficit (2,110,500) (2,061,800)
Partners' deficit - limited partners (237,900) (227,800)
----------- -----------
Total stockholders' equity and partners' deficit 1,199,100 1,257,900
----------- -----------
TOTAL LIABILITIES, STOCKHOLDERS' EQUITY
AND PARTNERS' DEFICIT $ 9,148,300 $ 9,242,300
=========== ===========
</TABLE>
See Notes to Financial Statements. 3
<PAGE> 5
HOMEFREE VILLAGE RESORTS, INC. AND SUBSIDIARIES
AND HOMEFREE INVESTORS L.P. (a limited partnership)
COMBINED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
-------------------------------------
March 31, March 31,
1995 1994
------------- -------------
(unaudited)
<S> <C> <C>
REVENUES:
Management and administrative fees from
unconsolidated entities $ 72,000 $ 60,800
Equity in earnings of unconsolidated entities 2,200 --
Interest 5,800 3,800
----------- -----------
80,000 64,600
EXPENSES:
General and administrative 167,300 96,900
Interest -- 300
Equity in losses of unconsolidated entities 1,800 --
Other -- 2,800
----------- -----------
169,100 100,000
LOSS BEFORE INCOME TAXES (89,100) (35,400)
INCOME TAX BENEFIT 30,300 13,100
----------- -----------
NET LOSS $ (58,800) $ (22,300)
=========== ===========
NET LOSS PER PAIRED SHARE $ (.01) $ --
=========== ===========
WEIGHTED AVERAGE PAIRED SHARES
OUTSTANDING 10,484,000 10,484,000
=========== ===========
</TABLE>
See Notes to Financial Statements. 4
<PAGE> 6
HOMEFREE VILLAGE RESORTS, INC. AND SUBSIDIARIES
AND HOMEFREE INVESTORS L.P. (a limited partnership)
COMBINED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
--------------------------------------
March 31, March 31,
1995 1994
------------ -------------
(unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $(58,800) $(22,300)
Adjustments to reconcile net income (loss) to net cash
used in operating activities:
Depreciation and Amortization 1,600 3,600
Equity in losses (earnings) of unconsolidated entities,
net (400) --
Deferred income taxes (30,300) (13,100)
Changes in operating assets and liabilities:
Decrease (increase) in:
Other assets 2,300 34,700
Increase (decrease) in:
Other note receivable (--) (50,000)
Accounts payable and accrued expenses (4,900) 10,700
Other -- 100
-------- --------
Net cash used in operating
activities $(90,500) $(36,300)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in unconsolidated entities -- 2,900
Collection of advances from unconsolidated entities 117,800 94,800
Receivable from officer and director (20,100) (71,100)
Purchase of property, furniture and equipment ( 3,400) (1,900)
-------- --------
Net cash provided by investing activities (94,300) 24,700)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term debt -- (1,300)
-------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 3,800 (12,900)
CASH AND CASH EQUIVALENTS,
beginning of period 10,600 34,500
-------- --------
CASH AND CASH EQUIVALENTS,
end of period $ 14,400 $ 21,600
======== ========
</TABLE>
See Notes to Financial Statements. 5
<PAGE> 7
HOMEFREE VILLAGE RESORTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
----------- ------------
(unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 14,400 $ 10,600
Other current assets 27,100 9,600
---------- ----------
Total current assets 41,500 20,200
RECEIVABLES FROM UNCONSOLIDATED
ENTITIES, net 8,797,700 8,915,600
INVESTMENTS IN UNCONSOLIDATED ENTITIES 94,900 94,400
PROPERTY AND EQUIPMENT, at cost:
Office furniture and equipment 98,500 95,100
Vehicles 25,000 25,000
---------- ----------
123,500 120,100
Accumulated depreciation (105,200) (103,600)
---------- ----------
Net property and equipment 18,300 16,500
LAND OPTION COSTS 195,900 195,600
---------- ----------
TOTAL ASSETS $9,148,300 $9,242,300
========== ==========
</TABLE>
See Notes to Financial Statements. 6
<PAGE> 8
HOMEFREE VILLAGE RESORTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
--------------------------------
March 31, December 31,
1995 1994
---------- -------------
(unaudited)
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 88,700 $ 93,600
LONG TERM DEBT, less current maturities:
Unconsolidated entity 7,154,500 7,154,500
Other 44,400 44,400
DEFERRED INCOME TAXES 169,700 200,000
DEFERRED PROFIT 488,500 488,500
OTHER LIABILITIES 3,400 3,400
Stockholders' equity:
Preferred stock, $1.00 par value;
3,000,000 shares authorized, none issued and outstanding -- --
Common stock, $.001 par value;
authorized 15,000,000 shares; issued and outstanding 10,484,000
shares 10,500 10,500
Additional paid-in capital 3,537,000 3,537,000
Accumulated deficit (2,348,400) (2,289,600)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 1,199,100 1,257,900
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 9,148,300 $ 9,242,300
=========== ===========
</TABLE>
See Notes to Financial Statements. 7
<PAGE> 9
HOMEFREE VILLAGE RESORTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------------------
March 31, March 31,
1995 1994
--------- ---------
(unaudited)
<S> <C> <C>
REVENUES:
Management and administrative fees from
unconsolidated entities $ 72,000 $ 60,800
Equity in earnings of unconsolidated entities 2,200 --
Interest 5,800 3,800
----------- -----------
80,000 64,600
EXPENSES:
General and administrative 157,200 96,900
Interest -- 300
Equity in losses of unconsolidated entities 1,800 --
Impairment of investment in HILP 10,100 --
Other -- 2,800
----------- -----------
169,100 100,000
LOSS BEFORE INCOME TAXES (89,100) (35,400)
INCOME TAX BENEFIT 30,300 13,100
NET LOSS $ (58,800) $ (22,300)
=========== ===========
NET LOSS PER COMMON SHARE $ (.01) $ --
=========== ===========
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 10,484,000 10,484,000
=========== ===========
</TABLE>
See Notes to Financial Statements. 8
<PAGE> 10
HOMEFREE VILLAGE RESORTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------------------
March 31, March 31,
1995 1994
------------- -----------
(unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (58,800) $ (22,100)
Adjustments to reconcile net earnings
to net cash used in by operating
activities:
Depreciation and amortization 1,600 3,600
Equity in losses (earnings) ofunconsolidated entities (400) --
Deferred income taxes (30,300) (13,100)
Impairment of investment in HILP 10,100 --
Changes in operating assets and
liabilities:
Other assets 2,300 34,700
Other notes receivable -- (50,000)
Accounts payable and accrued expenses 4,900 10,500
Income taxes currently payable -- --
Other liabilities -- 100
--------- ---------
Net cash used in operating activities $(100,500) $(107,400)
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in unconsolidated entities (10,100) 2,900
Collection of advances from unconsolidated entities 117,800 94,800
Receivables from officer (20,100) (71,100)
Purchase of property, furniture and equipment (3,400) (1,900)
--------- ---------
Net cash provided by investing activities $ (84,200) $ 24,700
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term debt -- (1,300)
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 3,800 (12,900)
CASH AND CASH EQUIVALENTS,
beginning of period 10,600 34,500
--------- ---------
CASH AND CASH EQUIVALENTS,
end of period $ 14,400 $ 21,600
========= =========
</TABLE>
See Notes to Financial Statements. 9
<PAGE> 11
HOMEFREE INVESTORS L.P.
(a limited partnership)
BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
------------- --------------
(unaudited)
<S> <C> <C>
ORGANIZATION COSTS $166,900 $166,900
ACCUMULATED COSTS 166,900 166,900
-------- --------
LIABILITIES $ -- $ --
PARTNERS' CAPITAL -- --
-------- --------
TOTAL LIABILITIES AND PARTNERS' CAPITAL $ -- $ --
======== ========
</TABLE>
See Notes to Financial Statements. 10
<PAGE> 12
HOMEFREE INVESTORS L.P.
(a limited partnership)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------------------
March 31, March 31,
1995 1994
------------ -------------
(unaudited)
<S> <C> <C>
REVENUE $ -- $ --
GENERAL AND ADMINISTRATIVE EXPENSES 10,100 200
----------- -----------
NET LOSS $ (10,100) $ (200)
=========== ===========
NET LOSS PER LIMITED PARTNERSHIP INTEREST $ -- $ --
=========== ===========
WEIGHTED AVERAGE LIMITED PARTNERSHIP
INTERESTS OUTSTANDING 10,484,000 10,484,000
=========== ===========
</TABLE>
See Notes to Financial Statements. 11
<PAGE> 13
HOMEFREE INVESTORS L.P.
(a limited partnership)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
-----------------------------------
March 31, March 31,
1995 1994
------------ -----------
(unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(10,100) $(200)
Adjustments to reconcile net loss to
net cash used in operating activities:
Increase in Accounts Payable -- 200
-------- -----
Net cash used in operating
activities (10,100) --
-------- -----
CASH FLOWS FROM FINANCING ACTIVITIES:
Capital contributions by general partner 10,100 --
-------- -----
NET CHANGE IN CASH -- --
CASH, beginning of period -- --
CASH, end of period $ -- $ --
======== =====
</TABLE>
See Notes to Financial Statements. 12
<PAGE> 14
HOMEFREE VILLAGE RESORTS, INC. AND SUBSIDIARIES
AND HOMEFREE INVESTORS L.P. (a limited partnership)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
A. COMBINED, CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
Reference is made to Note 2 of the Financial Statements included in the Joint
Annual Report on Form 10-K for the year ended December 31, 1994. In the
opinion of management of the Company and the Partnership, the accompanying
unaudited combined, consolidated and separate financial statements contain all
adjustments (consisting only of normal recurring adjustments) necessary to
present fairly the financial position as of March 31, 1995, the results of
operations and the cash flows for the three months ended March 31, 1995.
Certain information and footnote disclosures, normally included in financial
statements prepared in accordance with generally accepted accounting
principles, have been omitted. It is suggested that the above combined,
consolidated and separate financial statements be read in conjunction with the
financial statements and notes thereto included in the Company's and the
Partnership's Joint Annual Report on Form 10-K for the fiscal year ended
December 31, 1994. The results of operations for the three month period ended
March 31, 1995, are not necessarily indicative of the operating results for the
Company and the Partnership for the full year.
The combined financial statements include the accounts of the Partnership and
of the Company and its subsidiaries. All material intercompany balances and
transactions have been eliminated.
B. PAIRING PLAN
The Assignee Limited Partnership interests in the Partnership ("Partnership
Shares") and the shares of Common Stock of the Company are paired on a
share-for-share basis. The shares can be transferred and traded only in units
("Paired Shares") consisting of the same number of Partnership Shares and
shares of Common Stock of the Company.
See Notes to Financial Statements. 13
<PAGE> 15
C. RELATED PARTY TRANSACTIONS
The Company holds an interest-bearing note from Craig M. Bollman, Jr.,
President and Chairman of the Board, in the amount of $541,000 at March 31,
1995. This indebtedness was incurred in connection with personal loans. This
note bears interest at the "Applicable Federal rate" which is the lowest rate
permitted by the Internal Revenue Service without imputing interest on a
transaction. The largest amount outstanding under this note during fiscal 1995
was $541,000. During 1994, the Company recorded a provision for losses of
$520,900 associated with this note.
See Notes to Financial Statements. 14
<PAGE> 16
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
LIQUIDITY AND CAPITAL RESOURCES
Company
Historically, the Company has not required large amounts of working capital
because the properties in which the Company has interests have been acquired,
financed and improved by related entities.
Management believes that the March 31, 1995 cash balances and the projected
operating results of the Monte Vista project will be sufficient to meet the
liquidity needs of the Company.
Partnership
At present, the Partnership has no liabilities and conducts no business and
thus has no capital needs. While future business of the Partnership has not
been determined, availability of capital will be considered if and when such
business is determined.
See Notes to Financial Statements. 15
<PAGE> 17
RESULTS OF OPERATIONS
Company
Three Months Ended March 31, 1995 Compared to Three Months
Ended March 31, 1994
Total revenues for the three months ended March 31, 1995 were $80,000 as
compared to $64,600 for the three months ended March 31, 1994. The increase
($15,400) was attributable principally to an increase in administrative fees.
Total expenses for the three months ended March 31, 1995, exceeded first
quarter results for 1994 by $69,100 principally as a result of an increase in
general and administrative expenses and a further provision for impairment of
investment in Homefree Investors, Ltd. (HILP) partnership of $10,100. The net
investment in HILP was considered to be impaired since the partnership has not
commenced its planned operations. General and administrative expenses for the
three months ended March 31, 1995 increased above first quarter 1994 levels
principally because of an increase in external audit and accounting fees and
employee compensation.
The effective income tax rate used for purposes of determining the income tax
benefit with respect to the three months ended March 31, 1995 and 1994 is 34%
and 37%, respectively, based on the projected annual effective tax rates for
such fiscal years.
Partnership
The Partnership has not commenced its planned operations.
See Notes to Financial Statements. 16
<PAGE> 18
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Not Applicable.
Item 2. Changes in Securities
Not Applicable.
Item 3. Defaults Upon Senior Securities
Not Applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Not Applicable.
Item 5. Other Information
Not Applicable.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits -
Exhibit 27 - Financial Data Schedule
b. No reports on Form 8-K were filed during the period
covered by this report.
See Notes to Financial Statements. 17
<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed on behalf of the Registrant and in the capacities and on
the dates indicated:
HOMEFREE VILLAGE RESORTS, INC. HOMEFREE INVESTORS L.P.
- ------------------------------ ------------------------------
Registrant (the "Company") Registrant (the "Partnership")
by: Homefree General Partners,
its General Partner
by: Homefree Village Resorts,
Inc., a General Partner
/s/ CRAIG M. BOLLMAN, JR. /s/ CRAIG M. BOLLMAN, JR.
- ------------------------------ ------------------------------
Craig M. Bollman, Jr. Craig M. Bollman, Jr.
Chairman of the Board President
(Principal Executive and
Financial Officer)
Dated: June 29, 1995 Dated: June 29, 1995
See Notes to Financial Statements. 18
<PAGE> 20
EXHIBIT INDEX
Exhibit No. Exhibit Description Page
- ----------- ------------------- ----
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 14,400
<SECURITIES> 0
<RECEIVABLES> 8,797,700
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 41,500
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 9,148,300
<CURRENT-LIABILITIES> 88,700
<BONDS> 0
<COMMON> 10,500
0
0
<OTHER-SE> 1,188,600
<TOTAL-LIABILITY-AND-EQUITY> 9,148,300
<SALES> 0
<TOTAL-REVENUES> 80,000
<CGS> 0
<TOTAL-COSTS> 169,100
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (89,100)
<INCOME-TAX> (30,300)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (58,800)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> 0
</TABLE>
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