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 JUNE 30, 1999 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
2499 GLADES ROAD, SUITE 203
BOCA RATON, FLORIDA 33431
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices)
Registrant's Telephone Number, Including Area Code: (561) 347-8663
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 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 ________
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 JUNE 30, 1999
- ----- -------------------------
Units of Beneficial Interest, Trust Certificate, No Par Value
No Par Value 27,894
<PAGE>
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
2
<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. However, since that date an extensive search has been conducted to
locate missing unitholders in order to provide them with the opportunity to
participate in the exchange program and to identify those accounts which are to
be escheated. As of June 30, 1999 there were 27,894 new units outstanding that
were held by 206 unitholders. As of the same date, there were 96,395 old units
outstanding that were held by 156 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.
27 Financial Data Schedule
3
<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: August 13, 1999 BY: /s/ GINO J. DIMARCO, TRUSTEE
-----------------------------------------
GINO J. DiMARCO, Trustee
4
<PAGE>
SOUTHWARD VENTURES DEPOSITARY TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS AND TRUST CERTIFICATE HOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1999 1998 1999 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues:
Real estate sales $ -- $ 260,000 $ 10,000 $ 350,586
Rental income 21,428 20,928 42,356 41,856
--------- --------- --------- ---------
21,428 280,928 52,356 392,442
--------- --------- --------- ---------
Costs & expenses:
Cost of sales -- 4,872 -- 6,570
Selling expenses -- 36,400 187 47,134
General & administrative 11,498 13,914 21,131 25,604
Trustee fees 11,400 11,400 22,800 22,800
Legal & professional fees 42,241 41,740 104,870 65,992
Secretarial & bookkeeping fees 6,000 5,000 12,000 12,000
Other operating expenses 4,194 16,900 4,388 20,982
Depreciation 4,618 2,941 9,236 5,882
--------- --------- --------- ---------
79,951 133,167 174,612 206,964
--------- --------- --------- ---------
Income (loss) before interest expense (58,523) 147,761 (122,256) 185,478
Interest expense 1,171 -- 1,391 --
--------- --------- --------- ---------
Net income (loss) (59,694) 147,761 (123,647) 185,478
Trust certificate holders' equity, beginning of period 663,819 679,078 727,772 641,361
--------- --------- --------- ---------
Trust certificate holders' equity, end of period $ 604,125 $ 826,839 $ 604,125 $ 826,839
========= ========= ========= =========
Net income (loss) per trust certificate $ (2.08) $ 5.14 $ (4.30) $ 6.45
========= ========= ========= =========
Certificates used in computing net income (loss)
per trust certificate 28,735 28,735 28,735 28,735
========= ========= ========= =========
</TABLE>
SEE ACCOMPANYING NOTES.
5
<PAGE>
SOUTHWARD VENTURES DEPOSITARY TRUST
CONSOLIDATED BALANCE SHEETS
AT JUNE 30, 1999 (UNAUDITED) AND DECEMBER 31, 1998 (AUDITED)
1999 1998
ASSETS
Cash $ 8,657 $ 17,443
Land and improvements held for development or sale 634,388 634,575
Property & equipment, net 155,780 165,016
Other assets 71,701 55,040
-------- --------
$870,526 $872,074
======== ========
LIABILITIES AND TRUST CERTIFICATE HOLDERS' EQUITY
Accounts payable and accrued liabilities $219,401 $119,302
Notes payable to related parties 47,000 20,000
Deposits on sales contracts -- 5,000
-------- --------
Total liabilities 266,401 144,302
Commitments
Trust certificate holders' equity 604,125 727,772
-------- --------
$870,526 $872,074
======== ========
SEE ACCOMPANYING NOTES.
6
<PAGE>
SOUTHWARD VENTURES DEPOSITARY TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND 1998
(UNAUDITED)
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
Cash flows from operating activities:
Net income $(123,647) $ 185,478
Adjustments to reconcile net income (loss) to net cash provided by (used in)
operating activities:
Depreciation 9,236 5,882
Net reductions of land and improvements held for development or sale 187 6,570
Increase in other assets (16,661) (21,962)
Increase (decrease) in account payable and accrued liabilities 100,099 (29,201)
Increase (decrease) in deposits on sales contracts (5,000) (35,150)
--------- ---------
Net cash provided by (used in) operating activities (35,786) 111,617
--------- ---------
Cash flows from investing activities:
Purchase of property and equipment -- (55,873)
--------- ---------
Net cash used in investing activities -- (55,873)
--------- ---------
Cash flows from financing activities:
Proceeds from issuance of notes payable to related parties 47,000 --
Principal payments on notes payable to related parties (20,000) (15,000)
Proceeds from notes payable to T. D. Fender -- 51,517
Principal payments on notes payable to T. D. Fender -- (51,517)
--------- ---------
Net cash provided by (used in) financing activities (27,000) (15,000)
--------- ---------
Net (decrease) increase in cash and cash equivalents (8,786) 40,744
Cash at beginning of period 17,443 42,147
--------- ---------
Cash at end of period $ 8,657 82,891
========= =========
</TABLE>
SEE ACCOMPANYING NOTES.
7
<PAGE>
SOUTHWARD VENTURES DEPOSITARY TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1999
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 Company" Annual Report on Form
10-K for the year ended December 31, 1998.
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 undertook an appeal of the adverse decision
that was entered on April 15, 1997. On February 24, 1999 the Trust's
appeal was denied.
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 for
costs plus interest from the date the judgement is signed. The amount
of attorneys' fees to be awarded, if any, will require judicial
determination at a future date.
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 effect on the financial statements.
8
<PAGE>
3. LEASE WITH GREAT HARBOUR MANAGEMENT LTD.
As of August 13, 1999 the lease with Great Harbour Management, Ltd is
in default due to non payment of rent for the months of March, April,
May, June, July and August, 1999. The amount of rent due is currently
subject to dispute as a result of certain offsets claimed by the Tenant
9
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
- ------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 8,657
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 706,089
<PP&E> 155,780
<DEPRECIATION> 4618
<TOTAL-ASSETS> 870,526
<CURRENT-LIABILITIES> 266,401
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 870,526
<SALES> 0
<TOTAL-REVENUES> 21,428
<CGS> 0
<TOTAL-COSTS> 79,951
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (58,523)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (58,523)
<EPS-BASIC> (2.08)
<EPS-DILUTED> 0
</TABLE>
