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Page 1 of 9 Pages
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended MARCH 31, 1998 Commission File 2-77085
SOUTHWARD VENTURES DEPOSITARY TRUST
(Exact Name of Registrant as Specified in its Charter)
FLORIDA 59-6737200
(State or other Jurisdiction of IRS Employer Identification Number
Incorporation or Organization)
C/O GINO J. DIMARCO, TRUSTEE
2900 HIGH RIDGE ROAD
BOYNTON BEACH, FLORIDA 33426
(Address of Principal Executive Offices)
Registrant's Telephone Number, Including Area Code: (561) 582-2755
NOT APPLICABLE
(Former Name, Former Address and
Former Fiscal Year, if Changed since Last Report)
Indicate by checkmark whether the Registrant (1) has filed all reports required
to be fled 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 filing
requirements for the past 90 days.
YES X NO
Indicate the number of shares outstanding at each of the issurer's classes of
common stock, as of the close of the period covered by this report:
CLASS OUTSTANDING MARCH 31, 1998
- --------- --------------------------
Trust Units, No Par Value 28,735 (including those units
currently in the exchange process)
<PAGE>
Page 2 of 9 Pages
SOUTHWARD VENTURES DEPOSITARY TRUST
INDEX
-----
PART I: PAGE NO.:
- ------- ---------
Financial Statements (Rider A) 5
PART II:
- --------
Other Information
Items 1 through 9 3
PART III:
- ---------
Signature Page 4
<PAGE>
Page 3 of 9 Pages
PART II
-------
OTHER INFORMATION
-----------------
Item 1. LEGAL PROCEEDINGS.
None.
Item 2. CHANGES IN SECURITIES.
None.
Item 3. CHANGES IN SECURITY FOR REGISTERED SECURITIES.
None.
Item 4. DEFAULTS UPON SENIOR SECURITIES.
None.
Item 5. INCREASE IN AMOUNT OF OUTSTANDING SECURITIES OR INDEBTEDNESS.
None.
Item 6. DECREASE IN AMOUNT OF OUTSTANDING SECURITIES OR INDEBTEDNESS.
Item 7. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
Item 8. OTHER MATERIALLY IMPORTANT EVENTS.
None.
Item 9. EXHIBITS AND REPORTS ON FORM 8-K.
Exhibit 27 -- Financial Data Schedule
Reports -- None
<PAGE>
Page 4 of 9 Pages
PART III
--------
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 hereunto duly authorized.
SOUTHWARD VENTURES DEPOSITARY TRUST
Dated: June 3, 1998 BY: /S/ GINO J. DIMARCO, TRUSTEE
----------------------------------
GINO J. DiMARCO, Trustee
<PAGE>
Page 5 of 9 Pages
SOUTHWARD VENTURES DEPOSITARY TRUST
CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1998 AND DECEMBER 31, 1997
<PAGE>
Page 6 of 9 Pages
SOUTHWARD VENTURES DEPOSITARY TRUST
CONSOLIDATED BALANCE SHEETS
AT MARCH 31, 1998 AND DECEMBER 31, 1997
<TABLE>
<CAPTION>
MARCH 31 DECEMBER
1998 1997
-------- --------
ASSETS
<S> <C> <C>
Cash $ 104,507 $ 42,147
Land and improvements held for development or sale 639,448 641,145
Property & equipment, net 80,945 83,886
Other assets 36,843 33,481
------------------ ------------------
$ 861,743 $ 800,659
================== ==================
LIABILITIES AND TRUST CERTIFICATE HOLDERS' EQUITY
Accounts payable and accrued liabilities $ 105,148 $ 104,148
Net payable to GHC Development - 15,000
Payable to T.D. Fender 51,517 -
Deposits on sales contracts 26,000 40,150
------------------ ------------------
Total liabilities 182,665 159,298
Commitments
Trust certificate holders' equity 679,078 641,361
------------------ ------------------
$ 861,743 $ 800,659
================== ==================
</TABLE>
SEE ACCOMPANYING NOTES.
<PAGE>
Page 7 of 9 Pages
SOUTHWARD VENTURES DEPOSITARY TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 37,717 $ 190,033
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation 2,941 2,631
Net reductions of land and improvements held for development or sale 1,697 5,622
(Increase) decrease in other assets ( 3,362) 1,193
Decrease in mortgage note receivable - -
Decrease in deferred profit pursuant to the installment method of accounting - -
Increase (decrease) in account payable and accrued liabilities 1,000 ( 57,225)
Decrease in deposits on sales contracts ( 14,150) ( 10,000)
Decrease in net payable to GHC Management ( 15,000)
Increase in payable to T.D. Fender 51,517 -
----------------- -----------------
Net cash used in operating activities 62,360 132,254
----------------- -----------------
Net (decrease) increase in cash and cash equivalents 62,360 132,254
Cash at beginning of period 42,147 28,273
----------------- -----------------
Cash at end of period $ 104,507 $ 160,527
================= =================
</TABLE>
SEE ACCOMPANYING NOTES.
<PAGE>
Page 8 of 9 Pages
SOUTHWARD VENTURE DEPOSITARY TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Revenues:
Real estate sales $ 90,586 $ 300,000
Rental income 20,928 20,928
------------------ ------------------
111,514 320,928
Costs & expenses:
Cost of sales 1,698 5,622
Selling 10,734 55,538
General & administrative 11,690 17,004
Trustee fees 11,400 11,400
Legal & professional fees 24,252 24,140
Secretarial & bookkeeping fees 7,000 6,000
Other operating expenses 4,082 8,560
Depreciation 2,941 2,631
------------------ ------------------
73,797 130,895
------------------ ------------------
Net income 37,717 190,033
Net income per trust certificate $ 1.31 $ 6.61
================== ==================
Certificates used in computing net income
per trust certificate 28,735 28,735
================== ==================
</TABLE>
SEE ACCOMPANYING NOTES.
<PAGE>
Page 9 of 9 Pages
SOUTHWARD VENTURES DEPOSITARY TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1998
1. BASIS OF PRESENTATION
The accompanying financial statements are unaudited and have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q
promulgated by the Securities and Exchange Commission. These financial
statements reflect all adjustments which, in the opinion of management,
are necessary for a fair presentation of financial position, results of
operations and cash flows for the periods presented. All such adjustments
are of a normal recurring nature. The results of operations for interim
periods are not necessarily indicative of the results to be expected for
a full year. The statements should be read in conjunction with the
financial statements and footnotes thereto included in the Trust's
Annual Report on Form 10-K for the year ended December 31, 1997.
2. COMMITMENTS AND CONTINGENCIES
PENDING LITIGATION
In 1993, the Trust filed a complaint against an individual asserting
claims for conversion and civil theft in relation to computer hardware
and software which was ordered, paid for, but never delivered to the
specified entity . The Trust did not prevail in a jury trial of the
civil theft case. The Trust has undertaken to appeal the adverse
decision that was entered on April 15, 1997.
Since the Trust was not successful in that claim, the defendant's
attorney fees and costs could be assessed against the Trust. In the
opinion of the Trustee, it is not possible at this time to assess the
amount of such fees and costs. However, as the matter has been
vigorously litigated since 1993, these fees and costs could be
substantial and have a material effect on the financial statements. A
Motion to Tax Costs was heard on September 26, 1997. Although the
judgement has not been entered as of this date, it is expected that the
Defendant will be awarded against the Trust approximately $2,634 plus
interest from the date the judgement is signed.
BAHAMIAN REAL PROPERTY TAXES
The Trust has been advised by the Ministry of Finance of the
Commonwealth of the Bahamas that property taxes pertaining to lots
located on Great Harbour Cay were not included in a prior settlement
that was understood to encompass all of the Trust's properties on Great
Harbour Cay. The Trust does not currently possess sufficient information
to reasonably estimate the amount of liability to be recorded. However,
the Trust believes that based upon future developments and
determinations, it is possible the amount could have a material effect
on the financial statements.
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 104,507
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 639,448
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 861,743
<CURRENT-LIABILITIES> 182,665
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 861,743
<SALES> 90,586
<TOTAL-REVENUES> 111,514
<CGS> 0
<TOTAL-COSTS> 73,797
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 37,717
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 37,717
<EPS-PRIMARY> 1.31
<EPS-DILUTED> 0
</TABLE>
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