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 SEPTEMBER 30, 1998 Commission File 2-77085
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SOUTHWARD VENTURES DEPOSITARY TRUST
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(Exact Name of Registrant as Specified in its Charter)
FLORIDA 59-6737200
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(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
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(Address of Principal Executive Offices)
Registrant's Telephone Number, Including Area Code: (561) 582-2755
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NOT APPLICABLE
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(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 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 Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
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Indicate the number of shares outstanding at each of the Issuer's classes of
common stock, as of the close of the period covered by this report:
CLASS OUTSTANDING SEPTEMBER 30, 1998
- ----- -------------------------------
Units of Beneficial Interest, Trust Certificate, No Par Value
No Par Value 26,784
<PAGE>
SOUTHWARD VENTURES DEPOSITARY TRUST
INDEX
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PART I: PAGE NO.:
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Financial Statements (Rider A) 5
PART II:
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Other Information
Items 1 through 9 3
PART III:
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Signature Page 4
<PAGE>
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.
On July 25, 1998 the exchange program for outstanding units was
terminated. As of September 30, 1998 there were 26,784 new units outstanding
that were held by 140 unitholders. As of the same date, there were 224,453 old
units outstanding that were held by 377 unitholders.
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.
A - Exhibits
27 Financial Data Schedule
B - Reports on Form 8-K
On June 19, 1998, the Registrant filed a Form 8-K pertaining
to the execution of a Purchase and Sale Agreement (hereinafter the "Agreement")
by Indeco, Inc. and T.D. Fender, who is the sole Shareholder and President of
Southward Acquisition Corporation, which is the majority unitholder of the
Registrant. On September 17, 1998 the Registrant filed a Form 8-K pertaining to
the termination of the Agreement by Indeco, Inc.. Accordingly, it was reported
that the potential change of control will not occur as a result of the
Agreement.
<PAGE>
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: November 13, 1998 BY: /s/ GINO J. DIMARCO, TRUSTEE
---------------------------------
GINO J. DiMARCO, Trustee
<PAGE>
PART I
(RIDER A)
SOUTHWARD VENTURES DEPOSITARY TRUST
CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998 (UNAUDITED) AND DECEMBER 31, 1997 (AUDITED)
<PAGE>
SOUTHWARD VENTURES DEPOSITARY TRUST
CONSOLIDATED BALANCE SHEETS
AT SEPTEMBER 30, 1998 (UNAUDITED) AND DECEMBER 31, 1997 (AUDITED)
1998 1997
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ASSETS
CASH $ 44,710 $ 42,147
LAND AND IMPROVEMENTS HELD FOR DEVELOPMENT OR SALE 634,575 641,145
PROPERTY & EQUIPMENT, NET 147,848 83,886
OTHER ASSETS 46,624 33,481
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$873,757 $800,659
======== ========
LIABILITIES AND TRUST CERTIFICATE HOLDERS' EQUITY
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES $118,105 $104,148
NET PAYABLE TO GHC MANAGEMENT -- 15,000
DEPOSITS ON SALES CONTRACTS 5,000 40,150
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TOTAL LIABILITIES 123,105 159,298
COMMITMENTS
TRUST CERTIFICATE HOLDERS' EQUITY 750,652 641,361
-------- --------
$873,757 $800,659
======== ========
See accompanying notes.
<PAGE>
SOUTHWARD VENTURES DEPOSITARY TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(UNAUDITED)
<TABLE>
<CAPTION>
1998 1997
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME $ 109,291 $ 98,119
ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH USED IN OPERATING ACTIVITIES:
DEPRECIATION 8,822 7,893
NET REDUCTIONS OF LAND AND IMPROVEMENTS HELD FOR DEVELOPMENT OR SALE 6,570 5,622
(INCREASE) DECREASE IN OTHER ASSETS (13,143) (18,496)
DECREASE IN MORTGAGE NOTE RECEIVABLE -- --
DECREASE IN DEFERRED PROFIT PURSUANT TO THE INSTALLMENT METHOD OF ACCOUNTING -- --
INCREASE (DECREASE) IN ACCOUNT PAYABLE AND ACCRUED LIABILITIES 13,957 (61,145)
DECREASE IN DEPOSITS ON SALES CONTRACTS (35,150) (10,000)
DECREASE IN NET PAYABLE TO GHC MANAGEMENT (15,000)
INCREASE IN PAYABLE TO T.D. FENDER -- --
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NET CASH USED IN OPERATING ACTIVITIES 75,347 21,993
CASH FLOW FROM FINANCING ACTIVITIES:
PURCHASE OF PROPERTY AND EQUIPMENT (72,784) --
--------- ---------
NET CASH USED IN FINANCING ACTIVITIES (72,784) --
--------- ---------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS 2,563 21,993
CASH AT BEGINNING OF PERIOD 42,147 28,273
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CASH AT END OF PERIOD $ 44,710 $ 50,266
========= =========
</TABLE>
See accompanying notes.
<PAGE>
SOUTHWARD VENTURES DEPOSITARY TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS AND TRUST CERTIFICATE HOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------------- ------------------------------
1998 1997 1998 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUES:
REAL ESTATE SALES $ -- $ -- $ 350,586 $ 300,000
RENTAL INCOME 20,928 20,928 62,784 62,784
OTHER INCOME -- -- -- --
INTEREST INCOME -- -- -- --
PROFIT RECOGNIZED FROM REAL ESTATE SALES -- -- -- --
----------- ----------- ----------- -----------
20,928 20,928 413,370 362,784
COSTS & EXPENSES:
COST OF SALES -- -- 6,570 5,622
SELLING EXPENSES -- -- 47,134 56,038
GENERAL & ADMINISTRATIVE 16,524 9,617 42,128 36,449
TRUSTEE FEES 11,400 11,400 34,200 34,200
LEGAL & PROFESSIONAL FEES 6,121 23,140 72,113 90,065
SECRETARIAL & BOOKKEEPING FEES 6,021 6,000 18,021 18,000
OTHER OPERATING EXPENSES 51,644 5,567 72,626 16,398
DEPRECIATION 2,940 2,631 8,822 7,893
----------- ----------- ----------- -----------
94,650 58,355 301,614 264,665
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE INTEREST EXPENSE (73,722) (37,427) 111,756 98,119
INTEREST EXPENSE 2,465 -- 2,465 --
----------- ----------- ----------- -----------
NET INCOME (LOSS) (76,187) (37,427) 109,291 98,119
TRUST CERTIFICATE HOLDERS' EQUITY, BEGINNING OF PERIOD 826,839 720,875 641,361 585,329
LESS DISTRIBUTIONS PAID -- -- -- --
----------- ----------- ----------- -----------
TRUST CERTIFICATE HOLDERS' EQUITY, END OF PERIOD $ 750,652 $ 683,448 $ 750,652 $ 683,448
=========== =========== =========== ===========
NET INCOME (LOSS) PER UNIT OF BENEFICIAL INTEREST $ ( 2.65) $ ( 0.01) $ 3.80 $ 0.03
=========== =========== =========== ===========
UNITS USED IN COMPUTING NET LOSS PER UNIT OF
BENEFICIAL INTEREST 28,735 3,177,019 28,735 3,177,019
=========== =========== =========== ===========
</TABLE>
See accompanying notes.
<PAGE>
SOUTHWARD VENTURES DEPOSITARY TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998 AND DECEMBER 31, 1997
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 COSTS AGAINST THE TRUST OF 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 TRUSTS' 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 ADVERSE
EFFECT ON THE FINANCIAL STATEMENTS.
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTON
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27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JUL-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 44,710
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 681,199
<PP&E> 147,848
<DEPRECIATION> 0
<TOTAL-ASSETS> 873,757
<CURRENT-LIABILITIES> 123,105
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 873,757
<SALES> 0
<TOTAL-REVENUES> 20,928
<CGS> 0
<TOTAL-COSTS> 94,650
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (73,722)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (76,187)
<EPS-PRIMARY> (2.65)
<EPS-DILUTED> 0
</TABLE>
