<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: September 30, 1996
OR
TRANSITION REPORT PURSUANT TO SECTION 13 or
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
<TABLE>
<S> <C>
Commission File Number: 1-8927 Commission File Number: 0-16156
------ -------
HOMEFREE VILLAGE RESORTS, INC. HOMEFREE INVESTORS L.P.
- ------------------------------------------------------ --------------------------------------------------------------------
(Exact name of Registrant as specified in its charter) (Exact name of Registrant as specified in its charter
Delaware Delaware
- -------------------------------------------------------------- --------------------------------------------------------------------
(State or other jurisdiction of incorporation or organization) (State or other jurisdiction of incorporation or organization)
37-0959405 84-1062287
- --------------------------------------------------- --------------------------------------------------------------------
(I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
1400 S. Colorado Boulevard, Suite 410 1400 S. Colorado Boulevard, Suite 410
Denver, Colorado 80222 Denver, Colorado 80222
- ------------------------------------------------------------- --------------------------------------------------------------------
(Address of principal executive offices, including zip code) (Address of principal executive offices, including zip code)
(303) 757-3002 (303) 757-3002
- ---------------------------------------------------- --------------------------------------------------------------------
(Registrant's telephone number, including area code) (Registrant's telephone number, including area code)
</TABLE>
Indicate by checkmark 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 X NO
------ ------
Indicate the number of shares outstanding of each of the issuers' classes of
common stock or partnership interests, respectively, as of the close of
business on October 31, 1996:
<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 3
COMBINED
Combined Balance Sheets --
September 30, 1996 and December 31, 1995 3
Combined Statements of Operations --
Three and Nine Month Periods ended
September 30, 1996 and 1995 5
Combined Statements of Cash Flows --
Nine Months ended September 30, 1996 and 1995 6
THE COMPANY
Consolidated Balance Sheets --
September 30, 1996 and December 31, 1995 7
Consolidated Statements of Operations --
Three and Nine Month Periods ended
September 30, 1996 and 1995 9
Consolidated Statements of Cash Flows --
Nine Months ended September 30, 1996 and 1995 10
THE PARTNERSHIP
Balance Sheets -- September 30, 1996 and
December 31, 1995 11
Statements of Operations --
Three and Nine Month Periods ended
September 30, 1996 and 1995 12
Statements of Cash Flows --
Nine Months ended September 30, 1996 and 1995 13
Notes to Financial Statements 14
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 15-16
PART II. OTHER INFORMATION 17
</TABLE>
2
<PAGE> 3
HOMEFREE VILLAGE RESORTS, INC. AND SUBSIDIARIES
AND HOMEFREE INVESTORS L.P. (a limited partnership)
COMBINED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------- ------------
(unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 13,300 $ 38,700
Other current assets 4,700 4,000
---------- ----------
Total current assets 18,000 42,700
RECEIVABLES FROM UNCONSOLIDATED ENTITIES, net 8,747,000 8,620,200
INVESTMENTS IN UNCONSOLIDATED ENTITIES 86,500 82,400
PROPERTY AND EQUIPMENT, at cost
Office furniture and equipment 104,500 102,900
Vehicles 25,000 25,000
---------- ----------
129,500 127,900
Accumulated depreciation (114,700) (110,000)
---------- ----------
Net property and equipment 14,800 17,900
---------- ----------
OTHER ASSETS
Land option costs 195,600 195,600
---------- ----------
TOTAL ASSETS $9,061,900 $8,958,800
========== ==========
</TABLE>
See accompanying notes to financial statements 3
<PAGE> 4
LIABILITIES, STOCKHOLDERS' EQUITY AND PARTNERS' DEFICIT
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------- ------------
(unaudited)
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 103,800 $ 94,600
Payable to unconsolidated entity 833,500 150,500
Current maturities of long-term debt 44,400 44,400
Total current liabilities 981,700 289,500
LONG TERM DEBT, less current maturities:
Unconsolidated entity 7,154,500 7,154,500
Other -- --
DEFERRED INCOME TAXES -- --
DEFERRED PROFIT 488,500 488,500
OTHER LIABILITIES, payable to unconsolidated entities -- --
STOCKHOLDERS' 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 (2,881,300) (2,293,100)
Partners' deficit - limited partners ( 229,000) ( 228,100)
----------- -----------
Total stockholders' equity and partners' deficit 437,200 1,026,300
----------- -----------
TOTAL LIABILITIES, STOCKHOLDERS' EQUITY AND PARTNERS' DEFICIT $ 9,061,900 $ 8,958,000
=========== ===========
</TABLE>
See accompanying notes to financial statements 4
<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 NINE MONTHS ENDED
-------------------------------- --------------------------------
SEPT. 30, SEPT. 30, SEPT. 30, SEPT. 30,
1996 1995 1996 1995
----------- ----------- ----------- ----------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
REVENUES (SUBSTANTIALLY ALL
FROM RELATED PARTIES):
Management and
administrative fees from unconsolidated
entities $ 51,200 $ 48,300 $ 166,700 $161,600
Equity in earnings of
unconsolidated entities 2,600 400 8,000 6,700
Interest 2,700 5,700 8,600 17,500
----------- ----------- ----------- ----------
$ 56,500 $ 54,400 $ 183,300 185,800
----------- ----------- ----------- ----------
EXPENSES:
General and administrative 226,400 100,000 742,800 332,900
Interest -- -- -- --
Equity in losses of unconsolidated
entities 1,100 (800) 4,000 700
Loss on related party receivable ( 10,400) -- ( 30,700) --
Administrative fee 18,800 18,800 56,300 56,300
----------- ----------- ----------- ----------
235,900 118,000 772,400 389,900
----------- ----------- ----------- ----------
EARNINGS (LOSSES) BEFORE INCOME TAX $ (179,400) ( 63,600) (589,100) (204,100)
INCOME TAX -- 21,600 -- 69,400
----------- ----------- ----------- ----------
NET EARNINGS (LOSSES) $ (179,400) $ ( 42,000) $ (589,100) $(134,700)
=========== =========== =========== ==========
EARNINGS (LOSS) PER PAIRED SHARE $ ( .02) $ (.00) $ (.06) $ (.01)
=========== =========== =========== ==========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING 10,484,000 10,484,000 10,484,000 10,484,000
=========== =========== =========== ==========
</TABLE>
See accompanying notes to financial statements 5
<PAGE> 6
HOMEFREE VILLAGE RESORTS, INC. AND SUBSIDIARIES
AND HOMEFREE INVESTORS L.P. (a limited partnership)
COMBINED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
NINE MONTHS ENDED
------------------------------------------
SEPT. 30, SEPT. 30,
1996 1995
--------- ---------
(unaudited) (unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (losses) earnings $ (589,100) $(134,700)
Adjustments to reconcile net income (loss)
to net cash used in operating activities
Depreciation and amortization 4,700 4,800
Provision for loss on related party receivable ( 30,700) --
Equity in losses (earnings) of unconsolidated entities, ( 4,100) ( 6,000)
net
Deferred income taxes -- ( 69,400)
Changes in operating assets and liabilities:
Other assets ( 700) 5,100
Accounts payable and accrued expenses 9,200 (16,500)
Other liabilities -- --
--------- ---------
Net cash used in operating activities (610,700) (216,700)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash advance to officer 30,700 ( 56,700)
Cash advances to unconsolidated entities (294,500) --
Collection of advances from unconsolidated entities 167,700 126,800
Purchase of property, furniture and equipment ( 1,600) ( 5,900)
--------- ---------
Net cash provided by investing activities ( 97,700) 64,200
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Advance from related party 683,000 150,500
--------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ( 25,400) ( 2,000)
CASH AND CASH EQUIVALENTS,
beginning of period 38,700 10,600
--------- ---------
CASH AND CASH EQUIVALENTS, end of period $ 13,300 $ 8,600
========= =========
</TABLE>
See accompanying notes to financial statements 6
<PAGE> 7
HOMEFREE VILLAGE RESORTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS Sept. 30, December 31,
------ 1996 1995
---------- ----------
(unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 13,300 $ 38,700
Other current assets 4,700 4,000
---------- ----------
Total current assets 18,000 42,700
RECEIVABLES FROM UNCONSOLIDATED
ENTITIES, NET 8,747,000 8,620,200
INVESTMENTS IN UNCONSOLIDATED ENTITIES 86,500 82,400
PROPERTY AND EQUIPMENT, at cost:
Office furniture and equipment 104,500 102,900
Vehicles 25,000 25,000
---------- ----------
129,500 127,900
Accumulated depreciation (114,700) (110,000)
---------- ----------
Net property and equipment 14,800 17,900
LAND OPTION COSTS 195,600 195,600
---------- ----------
TOTAL ASSETS $9,061,900 $8,958,800
========== ==========
</TABLE>
See accompanying notes to financial statements 7
<PAGE> 8
LIABILITIES AND STOCKHOLDERS' EQUITY AND PARTNERS' DEFICIT
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
----------- ----------
(unaudited)
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 103,800 $ 94,600
Payable to unconsolidated entity 833,500 150,500
Current maturities of long-term debt 44,400 44,400
Total current liabilities 981,700 289,500
LONG TERM DEBT, less current maturities:
Unconsolidated entity 7,154,500 7,154,500
Other -- --
DEFERRED INCOME TAXES -- --
DEFERRED PROFIT 488,500 488,500
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 authorized;
issued and outstanding 10,484,000 10,500 10,500
Additional paid-in capital 3,537,000 3,537,000
Accumulated deficit (3,110,300) (2,521,200)
----------- ==========
TOTAL STOCKHOLDERS' EQUITY 437,200 1,026,300
----------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 9,061,900 $8,958,800
=========== ==========
</TABLE>
See accompanying notes to financial statements 8
<PAGE> 9
HOMEFREE VILLAGE RESORTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
------------------------------- --------------------------------
SEPT. 30, SEPT. 30, SEPT. 30, SEPT. 30,
1996 1995 1996 1995
---------- ---------- ---------- ----------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
REVENUES:
Management and
administrative fees from unconsolidated
entities $ 51,200 $ 48,300 $166,700 $161,600
Equity in earnings of unconsolidated
entities 2,600 400 8,000 6,700
Interest 2,700 5,700 8,600 17,500
---------- ---------- ---------- ----------
56,500 54,400 183,300 185,800
---------- ---------- ---------- ----------
EXPENSES:
General and administrative 227,000 99,900 741,900 332,700
Interest -- -- -- --
Equity in losses of unconsolidated
entities 1,100 (800) 4,000 700
Impairment of investment in HILP 200 100 900 200
Loss on related party receivable ( 10,400) -- ( 30,700) --
Administrative fee 18,000 18,800 56,300 56,300
---------- ---------- ---------- ----------
235,900 118,000 772,400 389,900
---------- ---------- ---------- ----------
EARNINGS (LOSS) BEFORE
INCOME TAXES (179,400) ( 63,600) (589,100) (204,100)
---------- ---------- ---------- ----------
INCOME TAX BENEFIT -- 21,600 -- 69,400
---------- ---------- ---------- ----------
NET EARNINGS (LOSS) $(179,400) $(42,000) $(589,100) $(134,700)
========== ========== ========== ==========
EARNINGS (LOSS) PER
COMMON SHARE $ (.02) $ (.00) $ (.06) $ (.01)
========== ========== ========== ==========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING 10,484,000 10,484,000 10,484,000 10,484,000
========== ========== ========== ==========
</TABLE>
See accompanying notes to financial statements 9
<PAGE> 10
HOMEFREE VILLAGE RESORTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
NINE MONTHS ENDED
------------------------------------------
SEPT. 30, SEPT. 30,
1996 1995
--------- ---------
(unaudited) (unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES: $(589,100) $(134,700)
Net earnings/(loss)
Adjustments to reconcile net earnings
to net cash used in operating activities:
Depreciation and amortization 4,700 4,800
Provision for loss on related party receivable ( 30,700) --
Deferred income taxes -- ( 69,400)
Equity in losses (earnings) of unconsolidated entities ( 4,100) ( 6,000)
Impairment of investment in HILP 900 200
Changes in operating assets and liabilities:
Other assets ( 700) 5,100
Accounts payable and accrued expenses 9,200 ( 16,500)
Income taxes currently payable -- --
Other liabilities -- --
--------- ---------
Net cash used in operating activities (609,800) (216,500)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash advances to officer 30,700 ( 56,700)
Investment in unconsolidated entities ( 900) ( 200)
Cash advances to unconsolidated entities (294,500) --
Collection of advances from unconsolidated entities 167,700 126,800
From sale/(acquisition) of property,
furniture and equipment ( 1,600) ( 5,900)
--------- ---------
Net cash provided/(used in) by investing
activities ( 98,600) 64,000
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Advance from related party 683,000 150,500
--------- ---------
Net cash provided/(used) by financing activities 683,000 150,500
--------- ---------
NET INCREASE/DECREASE IN CASH AND CASH EQUIVALENTS ( 25,400) ( 2,000)
CASH AND CASH EQUIVALENTS,
beginning of period 38,700 10,600
--------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 13,300 $ 8,600
========= =========
</TABLE>
See accompanying notes to financial statements 10
<PAGE> 11
HOMEFREE INVESTORS L.P.
(a limited partnership)
BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------- ------------
(unaudited)
<S> <C> <C>
ASSETS
------
CURRENT ASSET, Receivable from
unconsolidated entity $833,500 $150,500
======== ========
LIABILITIES
-----------
CURRENT LIABILITY, Payable to
unconsolidated entity $833,500 $150,500
PARTNERS' CAPITAL -- --
-------- --------
TOTAL LIABILITIES AND PARTNERS' CAPITAL $833,500 $150,500
======== ========
</TABLE>
See accompanying notes to financial statements 11
<PAGE> 12
HOMEFREE INVESTORS L.P.
(a limited partnership)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
------------------------------- -------------------------------
SEPT. 30, SEPT. 30, SEPT. 30, SEPT. 30,
1996 1995 1996 1995
---------- ---------- ---------- ----------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
REVENUES:
EXPENSE
- AMORTIZATION ORGANIZATION COSTS -- -- -- --
---------- ---------- ---------- ----------
- GENERAL AND ADMINISTRATIVE 200 100 900 200
---------- ---------- ---------- ----------
NET EARNINGS (LOSSES) $( 200) $( 100) ( 900) ( 200)
========== ========== ========== ==========
EARNINGS (LOSSES) PER
LIMITED PARTNERSHIP
INTEREST $ (.00) $ (.00) $ (.00) $ (.00)
========== ========== ========== ==========
WEIGHTED AVERAGE SHARES
OUTSTANDING 10,484,000 10,484,000 10,484,000 10,484,000
========== ========== ========== ==========
</TABLE>
See accompanying notes to financial statements 12
<PAGE> 13
HOMEFREE INVESTORS L.P.
(a limited partnership)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
NINE MONTHS ENDED
---------------------------------------------
SEPT. 30, SEPT. 30,
1996 1995
---------- ----------
(unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net losses $ ( 900) $ ( 200)
Adjustments to reconcile net loss
to net cash used in operating activities:
Amortization -- --
---------- ----------
Net cash used in operating activities ( 900) ( 200)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Capital investment by limited partners -- --
Capital investment by Homefree General
Partner 900 200
---------- ----------
NET CASH FLOW FROM FINANCING ACTIVITIES $ 900 $ 200
NET INCREASE IN CASH AND CASH EQUIVALENTS -- --
CASH AND CASH EQUIVALENTS,
beginning of period -- --
---------- ----------
CASH AND CASH EQUIVALENTS, end of period $ -- $ --
========== ==========
</TABLE>
See accompanying notes to financial statements 13
<PAGE> 14
HOMEFREE VILLAGE RESORTS, INC. AND SUBSIDIARIES
AND HOMEFREE INVESTORS L.P.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
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, 1995. 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 September 30, 1996, the results of
operations and the cash flows for the nine months ended September 30, 1996.
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, 1995. The results of operations for the nine-month period ended
September 30, 1996, 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.
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 $279,300 at September 30,
1996. 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 1996
was $310,000. In prior years, a provision for losses was recorded in
connection with this note that constituted 100% of the outstanding balance.
During 1996, the Company recorded a loss restoration of $30,700 associated with
this note inasmuch as partial repayments have been made.
14
<PAGE> 15
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
LIQUIDITY AND CAPITAL RESOURCES
The 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.
Cash used for operating activities during the first half of 1996 totalled
$609,800. Cash used from investing activities ($98,600) resulted principally
from the net payment of advances to unconsolidated entities, reduced by the
partial repayment of cash previously advanced to an officer. Cash provided by
financing activities ($683,000) is attributable to advances from an
unconsolidated entity.
The Company believes that it will be able to continue as a going concern. The
Company has completed a response to the SEC's comments to its "going private".
If completed this transaction will result in the Company's savings of
approximately $90,000 per year in direct accounting, legal and administrative
costs, along with a savings of considerable management time, thereby improving
the Company's cash flow and efficiency of management. Further, the Company
expects that improved operations of the Monte Vista project will generate
additional cash flow, thereby resulting in additional repayment of the
Company's loans to Aristek Properties and MV I. MV I also recently
restructured its first mortgage debt, and generated additional financing, which
will improve the Company's liquidity. The Company will also continue to reduce
personnel and administrative costs, so as to minimize cash outflow until new
sources of revenues can be obtained. The Company itself does not have long
term debt and therefore, has no long term liquidity requirements. Aristek
Properties Ltd. and Aristek Western Properties, in which the Company has an
interest, are separate entities and have long term debt which the Company
believes can be satisfied from the assets of the two entities.
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.
15
<PAGE> 16
RESULTS OF OPERATIONS
The Company
Nine Months Ended September 30, 1996 Compared to
Nine Months Ended September 30, 1995
The Company recorded a net loss of $589,100 for the nine months ended September
30, 1996, compared to a net loss of $134,700 for the nine months ended September
30, 1995. The additional loss ($454,400) was attributable principally to
increased compensation costs, and a decision not to accrue a provision for
income tax benefits partially offset by a restoration of losses previously
recorded in connection with a related party receivable ($30,700). The loss
restoration was recorded to reflect the partial repayment of a related party
receivable where a full reserve had been previously provided.
Total revenues remained substantially unchanged for the nine month periods
ended September 1995 and 1996. Total expenses for the nine months ended
September 30, 1996, were $772,400 compared to $389,900 for the nine months
ended September 30, 1995. The increase is attributable principally to
additional compensation costs of approximately $349,000 and increases in legal
and accounting expenses of approximately $57,000 partially offset by a
receivable loss restoration recorded in connection with a related party
receivable.
No provision for an income tax benefit has been recorded during the nine months
ended September 30, 1996, inasmuch as the recognition of future tax benefits is
uncertain and cannot be assured. The effective tax rate used for determining
the income tax benefit with respect to the nine months ended September 30,
1995, was 34% based on the projected annual effective tax rate for that fiscal
year.
Partnership
The Partnership has not commenced its planned operations.
16
<PAGE> 17
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
Not Applicable.
Item 5. Other Information
Not Applicable.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
27 -- Financial Data Schedule
b. No reports on Form 8-K were filed during the period covered by
this report.
17
<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed on behalf of the Registrants and in the capacities and
on the dates indicated.
HOMEFREE VILLAGE RESORTS, INC. MEFREE 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 Chairman of the Board
(Principal Executive and (Principal Executive and
Financial Officer) Financial Officer)
Dated November 19, 1996 Dated November 19, 1996
---------------------------- ---------------------
18
<PAGE> 19
EXHIBIT INDEX
Exhibit No. Exhibit Description Page
- ----------- ------------------- ----
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000065291
<NAME> HOMEFREE VILLAGE RESORTS, INC.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 13,300
<SECURITIES> 0
<RECEIVABLES> 8,747,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 18,000
<PP&E> 129,500
<DEPRECIATION> 114,700
<TOTAL-ASSETS> 9,061,900
<CURRENT-LIABILITIES> 981,700
<BONDS> 7,154,500
0
0
<COMMON> 10,500
<OTHER-SE> 426,700
<TOTAL-LIABILITY-AND-EQUITY> 9,061,900
<SALES> 0
<TOTAL-REVENUES> 183,300
<CGS> 0
<TOTAL-COSTS> 772,400
<OTHER-EXPENSES> 0
<LOSS-PROVISION> (30,700)
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (589,100)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (589,100)
<EPS-PRIMARY> (.06)
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<NAME> HOMEFREE INVESTORS L.P.
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0
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