SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended
Commission File Number 2-96366-A
VANDERBILT SQUARE CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
Florida 59-2483405
(State or Other Jurisdiction(IRS Employer
of Incorporation) Identification Number)
3040 East Commercial Blvd., Ft. Lauderdale, Florida, 33308
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (954) 776-0902
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of each exchange
on which registered
None None
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant (1) has filed all
reports 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 by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained heDecember 31,
1996rein, and will not be contained, to the best of registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. (x)
The aggregate market value of the voting stock held by non-
affiliates of the Registrant as of March 24, 1997 was $1,631,560.
The number of shares of Registrant's Common Stock issued as of
March 24, 1997, was 16,490,756, of which a total of 92,400 shares
were held by the Company in treasury.
<PAGE>
INDEX
Item Page
Part I 1. Business 3
2. Properties 3
3. Legal Proceedings 3
4. Submission of Matters to a Vote of
Security Holders 4
Part II 5. Market for Registrant's Common Equity
and Related Stockholder Matters 4
6. Selected Financial Data 5
7. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 5
8. Financial Statements and Supplementary
Data 7
9. Changes in and Disagreements with
Accountants on Accounting and Financial
Disclosure 7
Part III 10. Directors and Executive Officers of the
Registrant 7
11. Executive Compensation 8
12. Security Ownership of Certain Beneficial
Owners and Management 8
13. Certain Relationships and Related
Transactions 9
Part IV 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K 11
<PAGE>
PART I
ITEM 1. Business
Vanderbilt Square Corporation (the "Registrant" or "Company")
was organized under the laws of the state of Florida on January 16,
1985. The Company is engaged in (a) leasing equipment to customers
through its wholly-owned subsidiary, Hi-Tech Leasing, Inc., ("Hi-
Tech"); (b) deriving revenues from investments in marketable
securities; and (c) rendering consulting advice and administrative
and office management services to Corrections Services, Inc.
("CSI") on an "as needed" basis. CSI, a public company, is engaged
in developing and marketing electronic monitoring systems to law
enforcement agencies and facilities. The system consists of a
computer-controlled electronic signalling system which permits
continuous monitoring of a person's presence or absence from their
residence. The Company currently owns approximately twenty-eight
percent (28%) of the issued and outstanding CSI Common Stock, and
the Company's President and Secretary are also officers and
directors of CSI.
Through Hi-Tech, the Company enters into equipment leasing
with customers pursuant to which the Company retains title and
ultimate ownership of the leased equipment. The customer, or
lessee, is entitled to possession and use of the equipment for the
purposes for which the equipment is intended so long as the
customer continues to make the scheduled lease payments and so long
as all other performance obligations incumbent upon the customer
under the lease agreement are performed and satisfied. The Company
establishes its payment schedule and lease term under each and
every lease on a case-by-case basis in keeping with its view of
commercial risk, inflationary prospects, customer's financial data
and prevailing terms in the equipment leasing industry. The lease
payment schedules vary from twelve (12) months to sixty (60)
months, terms which are customary in the equipment leasing
industry.
ITEM 2. Properties
The Company does not own or lease real property. The Company
maintains its executive offices pursuant to an oral month-to-month
tenancy from an affiliate at a cost of $1,350 per month.
ITEM 3. Legal Proceedings
No legal proceedings are currently pending or, to the
knowledge of management, threatened against the Company.
ITEM 4. Submission Of Matters To A Vote Of Security Holders
No matters were submitted to a vote of security holders,
<PAGE>
through a solicitation of proxies or otherwise, during the fourth
quarter of the fiscal year covered by this report.
PART II
ITEM 5. Market For Registrant's Common Equity And Related
Stockholder Matters
The Company's Common Stock is traded in the over-the-counter
market on the National Association of Securities Dealers, Inc. OTC
Bulletin Board under the symbol "VNSR". Set forth below is the
range of high and low bid and asked information for the Company's
Common Stock for the two most recent fiscal years. This
information represents prices between dealers and does not reflect
retail mark-up or mark-down or commissions, and does not
necessarily represent actual market transactions.
During the period between January 1, 1995 and December 31,
1996, the range of the reported high and low bid and asked
quotations for the Company's Common Stock was as follows:
PERIOD BID PRICE ASKED PRICE
HIGH LOW HIGH LOW
First Quarter - 1995 $ .07 $ .0625 $ .125 $ .10
Second Quarter - 1995 $ .07 $ .0625 $ .125 $ .10
Third Quarter - 1995 $ .08 $ .0625 $ .125 $ .10
Fourth Quarter -
Ending December 31, 1995 $ .08 $ .0625 $ .125 $ .10
First Quarter - 1996 $ .375 $ .25 $ .50 $.375
Second Quarter - 1996 $ .375 $ .25 $ .50 $.375
Third Quarter - 1996 $ .40 $ .18 $ .40 $ .25
Fourth Quarter -
Ending December 31, 1996 $ .375 $ .18 $ .40 $ .25
As of March 24, 1997, there were approximately 185 record
holders of the Registrant's outstanding Common Stock. Moreover,
additional shares of the Company's Common Stock are held for
additional stockholders at brokerage firms and/or clearing houses.
The Company, therefore, was unable to determine the precise number
of beneficial owners of its Common Stock as of March 24, 1997.
The Company has never paid any cash dividends on its Common
Stock and does not anticipate paying cash dividends in the
foreseeable future, but rather intends to retain earnings, if any,
for future growth and expansion opportunities. Payment of cash
dividends in the future will be dependent upon the Company's
earnings, financial condition, capital requirements and other
factors determined to be relevant by the Board of Directors.
<PAGE>
ITEM 6. Selected Financial Data
<TABLE>
<CAPTION>
Years Ended December 31,
1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C>
Revenues $ 227,902 $ 99,710 $ 108,928 $ 172,354 $ 144,670
Operating Expenses $ 169,509 $ 91,595 $ 110,129 $ 153,895 $ 152,227
Net Income (loss) $ 59,443 $ 1,498 $ 6,642 $ 254,483 $ (277,593)
Weighted number of
shares outstanding 14,847,281 14,224,096 14,515,066 12,779,737 12,291,903
Net income (loss)
per share of Common
Stock outstanding $ -0- $ -0- $ -0- $ .02 $ (.023)
Total Assets $1,063,919 $ 920,910 $1,004,085 $1,011,870 $ 631,361
Total Liabilities $ 51,673 $ 40,810 $ 78,987 $ 76,818 $ 288,911
Cash Dividends $ -0- $ -0- $ -0- $ -0- $ -0-
</TABLE>
See Financial Statements and Notes to Financial Statements
ITEM 7. Management Discussion And Analysis Of Financial Condition
And Results Of Operations
This analysis of the Company's financial condition, liquidity,
capital resources and results of operations should be viewed in
conjunction with the accompanying financial statements, including
the notes thereto.
Financial Condition
At December 31, 1996, the Company had current assets of
$763,977 as compared to $667,371 at December 31, 1995, total assets
of $1,063,919 at December 31, 1996 as compared to $920,910 at
December 31, 1995, current liabilities of $48,447 at December 31,
1996, as compared to $40,810 at December 31, 1995, total
liabilities of $51,673 at December 31, 1996, as compared to $40,810
at December 31, 1995, and a net worth of $1,012,246 at December 31,
1996, as compared to $880,100 at December 31, 1995. (See
"Financial Statements"). The increase in assets was principally
due to the increases in cash and cash equivalents and marketable
trading securities. The increase in liabilities was principally
due to the increase in accounts payable and accrued expenses.
Liquidity
During the year ended December 31, 1996, the Company had an
increase in cash and cash equivalents and marketable securities to
$693,276. The Company's increase in cash was principally due to
the sale of its investment in its unconsolidated subsidiary,
Americas Gaming in 1995. The Company has limited liabilities, and
no present commitments that are reasonably likely to result in its
liquidity increasing or decreasing in any material way. The
Company, therefore, believes that it has sufficient funds to meet
any current liquidity needs. In addition, the Registrant knows of
no trend, additional demand, event or uncertainties that will
<PAGE>
result in, or that are reasonably likely to result in, its
liquidity increasing or decreasing in any material way.
Capital Resources
The Company has no outstanding credit lines or credit
commitments in place and has no current need for financial credit.
In the event of future need, the Company believes that it will be
able to meet any financial needs with its current cash position, or
borrow at prevailing terms and through loans collateralized, if
necessary, by its assets.
The Company has no material commitments for capital
expenditures. The Company knows of no material trends, favorable
or unfavorable, in the Registrant's capital resources.
Results of Operations
The Company's revenues for the year ended December 31, 1996,
was $227,902 as compared to $99,710 for the year ended December 31,
1995, and $108,928 for the year ended December 31, 1994. The
principal reason for the increase in revenues was the increase in
income from sales of marketable trading securities.
Operating expenses increased to $169,509 for the year ended
December 31, 1996 as compared to $91,595 at December 31, 1995 and
$110,129 at December 31, 1994. The difference between operating
expenses at December 31, 1996 and December 31, 1995, was $77,914.
The difference in operating expenses at December 31, 1995 and
December 31, 1994 was $18,534. The principal reasons for the
differences was an increase in provision for uncollectable accounts
between December 31, 1996 and 1995, and a decrease in professional
and consulting fees between December 31, 1995 and 1994. Income
before provision for income taxes for the year ended December 31,
1996, was $86,846 as compared to a loss of ($480) for the year
ended December 31, 1995 and income of $10,130 for the year ended
December 31, 1994. The increase in income of $87,326 for the year
ended December 31, 1996 as compared to December 31, 1995, was
principally due to an increase in earnings from the sale of
marketable trading securities. The decrease in income of $10,610
for the year ended December 31, 1995 as compared to December 31,
1994 was principally due to a decrease in earnings of an
unconsolidated subsidiary.
Registrant knows of no other trends or uncertainties that have
had, or that the Company reasonably expects will have, a materially
favorable or unfavorable impact on the Company's capital resources,
net sales, revenues or income from continuing operations.
Moreover, Registrant knows of no other events that will cause a
material change in the relationship between its costs and revenues.
<PAGE>
ITEM 8. Financial Statements And Supplementary Data
Financial information pursuant to this Item appears elsewhere
in this Report. See Item 14.
ITEM 9. Disagreements On Accounting And Financial Disclosure
No change in Accountants took place with respect to the
preparation of the Company's financial statements for the two (2)
most recent fiscal years contained in this report, namely the
fiscal years ended December 31, 1996 and December 31, 1995.
PART III
ITEM 10. Directors And Executive Officers Of The Registrant
The directors and executive officers of the Company, as of
the date of this Report were as follows:
Name Age Offices Held
Norman H. Becker 59 President and Director
Glenn Shaffren 42 Vice President and
Director
Diane Aquino 49 Secretary/Treasurer and
Director
Norman H. Becker, prior to his appointment as the Company's
President and Chief Executive Officer during February 1987, was
Secretary/Treasurer and a Director of the Company since its
inception, January 16, 1985. Since January, 1993, Mr. Becker has
also been President of CSI, an affiliate of the Company. (See
"Business" and "Financial Statements" and accompanying notes).
Additionally, since January 1985, Mr. Becker has been self-employed
in the practice of public accounting. Mr. Becker is a graduate of
City College of New York (Bernard Baruch School of Business) and is
a member of a number of professional accounting associations
including the American Institute of Certified Public Accountants,
the Florida Institute of Certified Public Accountants, and the Dade
County Chapter of the Florida Institute of Certified Public
Accountants.
Glenn Shaffren became Vice President and a Director of the
Company in November, 1996. Since 1994, Mr. Shaffren has been an
officer and director of Digitel Network Services, Inc., a private
Georgia corporation, and its Chief Executive Officer and Chief
Financial Officer since March, 1995. He has been involved in cable
television since 1979 and has owned, operated and sold two outside
plant construction and installation companies specializing in fiber
optic cable and coaxial cable, aerial and underground construction,
splicing and activation. In 1992, Mr. Shaffren was Vice President
of Operations for American Fiber Optics. Mr. Shaffren resigned as
an officer and director of the Company on January 29, 1997.
<PAGE>
Diane Aquino has been Secretary/Treasurer and a Director of
the Company since February 15, 1989. Since January 1993, Ms.
Aquino has been Secretary and Treasurer of CSI, an affiliate of the
Company.
Ronald A. Martini was a director of the Company since April
1986, and was Vice-President since February 27, 1987. On April 24,
1990, Mr. Martini entered a guilty plea in the United States
District Court for the District of New Jersey to violations of
federal conspiracy, mail fraud and securities laws in connection
with transactions in securities of public companies unrelated to
the Company during a fifteen (15) month period in 1988 and 1989.
On October 30, 1996, the Company accepted the resignation of Mr.
Martini as an officer and director of the Company.
Mr. Martini and Ms. Aquino are married to each other.
ITEM 11. Executive Compensation
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation
Awards Payments
Restricted Securities
Name of Individual Other Annual Stock Underlying/ LTIP All Other
and Principal Position Year Salary Bonus Compensation Award(s) Options/SARs Payouts Compensation
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Norman H. Becker 1996 $ 4,000 -0- $1,163 -0- -0- -0- -0-
President
Glenn Shaffren 1996 -0- -0- -0- -0- -0- -0- -0-
Vice President
Diane Aquino 1996 $7,500 -0- -0- -0- -0- -0- -0-
Secretary/Treasurer
</TABLE>
During the 1996 fiscal year, the Company did not issue any
stock options, stock appreciation rights, restricted stock awards,
LTIP awards, or similar compensation to any person or entity. In
addition, none of the Company's officers and directors had
employment agreements or similar arrangements with the Company.
ITEM 12. Security Ownership Of Certain Beneficial Owners And
Management
The following table sets forth, as of the date of this Report,
certain information concerning beneficial ownership of the
Company's Common Stock, by (i) each person known to the Company to
own five percent (5%) or more of the Company's outstanding Common
Stock, (ii) all directors of the Company, naming them and (iii) all
directors and officers of the Company as a group, without naming
them.
<TABLE>
<CAPTION>
Amount and Nature of Percent
Name and Address Beneficial Ownership (1) of Class (1)(4)
<S> <C> <C>
Norman H. Becker (2) 1,157,200 7.0%
Diane Aquino (2)(3) 1,138,500 6.9%
Ronald A. Martini (2)(3) 4,131,945 25.1%
Glenn Shaffren (2) 6,600 .1%
Peter Isaacs 900,000 5.5%
13387 Double Tree Circle
West Palm Beach, FL 33414
All Officers and Directors
as a Group (3 persons) 2,302,300 14.0%
</TABLE>
(1) As used herein, the term beneficial ownership with respect to
a security is defined by Rule 13d-3 under the Securities
Exchange Act of 1934 as consisting of sole or shared voting
power (including the power to vote or direct the vote) and/or
sole or shared investment power (including the power to
dispose or direct the disposition of) with respect to the
security through any contract, arrangement, understanding,
relationship or otherwise, including a right to acquire such
power(s) during the next 60 days. Unless otherwise noted,
beneficial ownership consists of sole ownership, voting and
investment rights.
(2) The address for each person is c/o Vanderbilt Square
Corporation, 3040 East Commercial Blvd., Ft. Lauderdale,
Florida 33308.
(3) Ms. Aquino and Mr. Martini are married to each other.
(4) Calculations are based upon 16,490,756 issued shares of the
Company's Common Stock of which 92,400 shares were held by the
Company in treasury.
ITEM 13. Certain Relationships And Related Transactions
During the fiscal year ended December 31, 1996, there were no
material transactions between the Company and any of its officers
and/or Directors which involved $60,000 or more.
On August 6, 1996, the Board of Directors of the Company
declared a 10% stock dividend of the outstanding Common Stock of
the Company. The stock dividend was paid on September 24, 1996 to
all stockholders of record at the close of business on August 23,
1996.
On October 30, 1996, the Company accepted the resignation of
Ronald A. Martini as an officer and director of the Company. In
addition, the Board of Directors of the Company appointed Glenn
<PAGE>
Shaffren to the vacancy on its Board of Directors and elected Mr.
Shaffren as Vice President and a Director of the Company,
effective on November 1, 1996. On January 29, 1997, the Company
accepted the resignation of Mr. Shaffren as an officer and director
of the Company.
<PAGE>
PART IV
ITEM 14. Exhibits, Financial Statements, Schedules And Reports On
Form 8-K
(a) 1. Financial Statements:
(i) Report of Independent Certified Public Accountant;
(ii) Consolidated Balance Sheet - December 31, 1996 and
December 31, 1995;
(iii) Consolidated Statement of Operations - Three years
ended December 31, 1996;
(iv) Consolidated Statement of Shareholders' Equity -
Three years ended December 31, 1996;
(v) Consolidated Statement of Cash Flows - Three years
ended December 31, 1996;
(vi) Notes to Consolidated Financial Statements
(a) 2. Financial Statement Schedules:
Schedule I - Marketable Securities - Other
Investments - December 31, 1996;
Marketable Securities - Other
Investments - December 31, 1995;
Schedule II - Amounts Receivable From Related
Parties - December 31, 1996;
Amounts Receivable From Related
Parties - December 31, 1995;
Amounts Receivable From Related
Parties - December 31, 1994;
Schedule XIII - Other Investments - Unconsolidated
Subsidiary - December 31, 1996
December 31, 1995
All other financial statements and schedules not listed have
been omitted since they are neither applicable nor required, or
because the required information is not material or is included in
the financial statements or the notes thereto.
(a) (3) Exhibits None
(b) Reports of Form 8-K
The Registrant filed no reports on Form 8-K during
the fourth quarter of 1996.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities and Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned, hereunto
duly authorized.
VANDERBILT SQUARE CORP.
Dated: March 24, 1997 By:/s/ Norman H. Becker
Norman H. Becker, President
Pursuant to the requirements of the Securities Exchange Act of
1934, this report have been signed below by the following persons
on behalf of the Registrant in the capacities and on the dates
indicated.
Signatures Title Date
(i) Principal Executive Officer
/s/ Norman H. Becker Chief Executive March 24, 1997
Norman H. Becker Officer
(ii) Principal Financial and
Accounting Officer
/s/ Diane Aquino Treasurer March 24, 1997
Diane Aquino
(iii) A Majority of the Board
of Directors
/s/ Norman H. Becker Director March 24, 1997
Norman H. Becker
Director March 24, 1997
Glenn Shaffren
/s/ Diane Aquino Director March 24, 1997
Diane Aquino
<PAGE>
VANDERBILT SQUARE CORP. AND SUBSIDIARIES
REPORT ON EXAMINATION OF CONSOLIDATED
FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996 AND 1995
<PAGE>
CONTENTS
PAGE
INDEPENDENT AUDITOR'S REPORT 1
CONSOLIDATED BALANCE SHEET 2
CONSOLIDATED STATEMENT OF OPERATIONS 3
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY 4
CONSOLIDATED STATEMENT OF CASH FLOWS 5
NOTES TO FINANCIAL STATEMENTS 6 - 13
<PAGE>
Board of Directors and Shareholders
Vanderbilt Square Corp. and Subsidiaries
Fort Lauderdale, Florida
INDEPENDENT AUDITOR'S REPORT
I have audited the accompanying balance sheet of Vanderbilt Square
Corp. and subsidiaries as of December 31, 1996 and 1995, and the
related consolidated statements of operations and shareholders'
equity and cash flows for each of the three years ended December
31, 1996. These financial statements are the responsibility of the
Company's management. My responsibility is to express an opinion
on these financial statements based on my audits.
I conducted my audits in accordance with generally accepted
auditing standards. Those standards require that I plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. I believe that my audits provide
a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of
Vanderbilt Square Corp. as of December 31, 1996 and 1995, and the
results of its operations and its cash flows for the three years
ended December 31, 1996, in conformity with generally accepted
accounting principles.
/s/Thomas W. Klash
Thomas W. Klash
Certified Public Accountant
Hollywood, Florida
January 30, 1997
<PAGE>
<TABLE>
<CAPTION>
VANDERBILT SQUARE CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1996 AND 1995
ASSETS
1996 1995
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 250,209 $ 197,182
Notes receivable - current:
Affiliate 38,478 14,298
Other 20,544 98,695
Accounts receivable:
Other 4,334 26,297
Investment in marketable trading
securities - at market 443,067 320,920
Accrued interest receivable 143 1,037
Net investment in direct financing
leases - current 3,453 3,976
Deferred income taxes - current - 4,966
Prepaid income taxes 3,749 -
TOTAL CURRENT ASSETS 763,977 667,371
INVESTMENT IN UNCONSOLIDATED SUBSIDIARY 250,008 214,316
PROPERTY AND EQUIPMENT - at cost -
Net of accumulated depreciation of
$3,920 in 1996 and 1995 - -
NOTES RECEIVABLE - NONCURRENT
Affiliate 34,347 179
Other 6,733 25,561
NET INVESTMENT IN DIRECT FINANCING
LEASES - noncurrent 8,854 4,610
DEFERRED INCOME TAXES - noncurrent - 8,873
$1,063,919 $ 920,910
</TABLE>
See accompanying notes to consolidated financial statements.
-2(a)-
<PAGE>
<TABLE>
<CAPTION>
VANDERBILT SQUARE CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1996 AND 1995
LIABILITIES AND SHAREHOLDERS' EQUITY
1996 1995
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 40,109 $ 34,818
Income taxes payable - 5,992
Deferred income taxes - current 8,338 -
TOTAL CURRENT LIABILITIES 48,447 40,810
DEFERRED INCOME TAXES - NON CURRENT 3,226 -
51,673 40,810
SHAREHOLDERS' EQUITY
Common stock $.0001 par value,
authorized 50,000,000 shares,
issued 16,490,756 shares in 1996,
and 14,991,600 shares in 1995;
outstanding 16,398,356 in 1996
and 13,935,850 shares in 1995 1,649 1,499
Additional paid-in capital 1,137,363 970,557
Retained earnings (deficiency) (116,734) (9,221)
1,022,278 962,835
Less treasury stock - 92,400 in 1996;
and 1,055,750 shares in 1995 10,032 82,735
1,012,246 880,100
$1,063,919 $ 920,910
</TABLE>
See accompanying notes to consolidated financial statements.
-2(b)-
<PAGE>
<TABLE>
<CAPTION>
VANDERBILT SQUARE CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
THREE YEARS ENDED DECEMBER 31, 1996
1996 1995 1994
<S> <C> <C> <C>
REVENUES:
Interest and dividend income $ 39,424 $ 33,448 $ 20,228
Income realized from
sale of marketable
equity securities 187,493 47,317 29,176
Consulting fees - 18,000 57,940
Direct finance lease income 985 945 1,584
227,902 99,710 108,928
OPERATING EXPENSES:
Selling, general and
administrative expenses 225,097 85,046 99,934
Provision for loss on market
decline of marketable
trading securities (55,588) 6,549 10,195
169,509 91,595 110,129
INCOME (LOSS) FROM OPERATIONS 58,393 8,115 (1,201)
OTHER INCOME (EXPENSE)
Equity in earnings (loss) of
unconsolidated subsidiary 26,453 8,595 11,331
INCOME (LOSS) BEFORE INCOME TAXES 86,846 (480) 10,130
PROVISION FOR INCOME TAXES
- CURRENT - - 1,741
PROVISION (CREDIT) FOR INCOME
TAXES - DEFERRED 25,403 (1,978) 1,747
25,403 (1,978) 3,488
NET INCOME (LOSS) $ 59,443 $ 1,498 $ 6,642
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 14,847,281 14,224,096 14,515,066
NET INCOME (LOSS) PER COMMON
SHARES $ - $ - $ -
</TABLE>
See accompanying notes to consolidated financial statements.
-3-
<PAGE>
<TABLE>
<CAPTION>
VANDERBILT SQUARE CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
THREE YEARS ENDED DECEMBER 31, 1996
Common Stock
$.0001 Par Value Additional Retained
Authorized 50,000,000 Shares Paid-In Earnings Treasury
Shares Amount Capital (Deficit) Stock Total
<S> <C> <C> <C> <C> <C> <C>
Balance - December 31, 1993 14,633,750 1,499 970,557 (17,361) (19,643) 935,052
Purchase of Treasury Shares (204,000) - - - (16,596) (16,596)
Net income for the period - - - 6,642 - 6,642
Balance - December 31, 1994 14,429,750 1,499 970,557 (10,719) (36,239) 925,098
Purchase of Treasury Stock (826,900) - - - (71,477) (71,477)
Sale of Treasury Stock 333,000 - - - 24,981 24,981
Net income for the period - - - 1,498 - 1,498
Balance -
December 31, 1995 13,935,850 1,499 970,557 (9,221) (82,735) 880,100
10% Stock Dividend 1,499,156 150 166,806 (166,956) - -
Purchase of Treasury Stock (249,100) - - - (33,070) (33,070)
Sale of Treasury Stock 1,212,450 - - - 105,773 105,773
Net income for the period - - - 59,443 - 59,443
Balance
December 31, 1996(a) 16,398,356 $ 1,649 $1,137,363 $(116,734) $ (10,032) $1,012,246
</TABLE>
(a) Reflected on the accompanying
balance sheet as:
Issued: 16,490,756
Treasury Shares: 92,400
16,398,356
See accompanying notes to financial statements.
-4-
<PAGE>
<TABLE>
<CAPTION>
VANDERBILT SQUARE CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
THREE YEARS ENDED DECEMBER 31, 1996
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
1996 1995* 1994*
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $ 59,443 $ 1,498 $ 6,642
Adjustments to reconcile net
income to net cash provided
by (used in) operating
activities:
(Gain) on sale of
marketable securities (187,493) (47,317) 29,177)
Amortization of deferred
revenue - - (3,940)
Equity in (earnings) loss
of unconsolidated subsidiary (26,453) 8,595 (11,331)
Allowance for market decline
of securities (55,588) 6,549 10,195
Write off of uncollectible
notes 74,000 10,000 -
Changes in operating assets
and liabilities:
Increase in accounts
payable and accrued expenses 5,291 (42,797) 4,511
(Increase) decrease in
accrued interest receivable 894 (334) (450)
Decrease (increase) in
deferred income taxes 25,403 (1,978) 1,747
(Increase) decrease in accounts
receivable - other 22,331 (6,456) 3,581
(Decrease) increase in income
taxes payable (9,741) 326 1,598
Proceeds from sale of
marketable securities 728,716 236,496 141,260
Purchase of marketable
securities (531,320) (596,177) (129,952)
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES 105,483 (431,595) (5,316)
</TABLE>
Continued on next page
-5(a)
<PAGE>
<TABLE>
<CAPTION>
VANDERBILT SQUARE CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
THREE YEARS ENDED DECEMBER 31, 1996
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
1996 1995* 1994*
<S> <C> <C> <C>
CASH FLOWS FROM
INVESTING ACTIVITIES:
Loan advance to affiliates (74,043) (3,000) (30,000)
Principal collections of loans
to affiliates 15,695 30,741 24,260
Advances paid on notes
receivable - other (9,250) (68,500) (272,000)
Principal collections of notes
receivable - other 32,229 186,144 82,041
Principal collections on direct
financing leases 3,379 5,769 6,226
Purchase of equipment for lease (7,100) - -
Proceeds from sale of
investments in
unconsolidated subsidiaries 4,753 469,255 81,054
Investment in unconsolidated
subsidiaries (18,119) (19,628) (54,053)
NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES (52,456) 600,781 (162,472)
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 53,027 169,186 (167,788)
CASH AND CASH EQUIVALENTS -
Beginning of year 197,182 27,996 195,784
CASH AND CASH EQUIVALENTS -
End of Year $ 250,209 $ 197,182 $ 27,996
</TABLE>
See accompanying notes to financial statements.
* Reclassified for comparative purposes
-5(b)-
<PAGE>
VANDERBILT SQUARE CORP. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation - The consolidated financial
statements include the accounts of the Company, and its
wholly-owned subsidiaries, Hi-Tech Leasing, inc., and
Professional Programmers, Inc. All significant
intercompany accounts and transactions have been
eliminated. The financial statements of Hi-Tech Leasing,
Inc., are included in consolidation for its year ended
November 30, in order to expedite preparation of financial
statements and to coincide with the taxable year of the
Company.
Revenue Recognition - The Company leases equipment under
agreements accounted for as direct financing leases.
Under this accounting method, the gross investment in the
leases is recorded as the total of the minimum lease
payments plus the unguaranteed residual salvage value of
the property. The excess of the gross investment over the
cost of the property represents unearned income, and this
is deducted from the gross investment to arrive at the net
investment in the direct financing leases. The unearned
interest income is amortized to income over the term of
the leases using the "interest method" so as to produce a
constant periodic rate of return on the net investment in
the leases.
Investments in Marketable Trading Securities - The
Company's investment in marketable trading securities
consists of trading securities as defined in FASB
Statement No. 115. Trading securities are carried at
market value in the accompanying balance sheets.
Unrealized gains and losses resulting from fluctuations in
the market price of the related securities are currently
reflected in the statement of operations.
Net Income (Loss) Per Common Share - Net income (loss) per
common share was computed by dividing the net income
(loss) for each period by the weighted average number of
common shares outstanding during each period.
Cash and Cash Equivalents - For purposes of the balance
sheet and statement of cash flows, the Company considers
all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents.
-6-
<PAGE>
VANDERBILT SQUARE CORP. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
NOTE B - NOTES RECEIVABLE - AFFILIATES
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
10% Note Receivable - Unsecured -
Due from a company whose shareholder
is an officer and director of an
affiliated company. $ - $ 12,211
10% Note Receivable - Due from
a company whose shareholder is an
officer and director of the Company
- unsecured and due on demand 25,000 -
8% Note Receivable - Due from an
individual who is an officer and
director of the Company -
collateralized by transportation
equipment - payable in monthly
installments of $488, including
interest, thru November 15, 2000 20,000 -
10% Note Receivable - Due from
a company whose shareholder is
an officer and director of the
Company - collaterized by
transportation equipment - payable
in monthly installments of $937,
including interest, through
September 15, 1999 27,647 -
7% Note Receivable - Due from an
officer of the Company - payable
in monthly installments of $575,
including interest through
March 23, 1996 - 2,266
Other 178 -
72,825 14,477
Deduct noncurrent portion 34,347 179
$ 38,478 $ 14,298
</TABLE>
Interest income relating to notes from related parties
amounts to $1,334 in 1996 and $2,207 in 1995.
-7-
<PAGE>
VANDERBILT SQUARE CORP. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
NOTE C - NOTES RECEIVABLE - OTHER
Notes receivable - other - consist of the following:
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
8% - 12% Notes Receivable -
Collateralized by transportation
and other equipment. Payments
are due in various monthly
installments through
November 15, 1998 $ 23,797 $ 44,377
10% Note Receivable -
Collateralized by common
stock of publicly traded
companies and due on demand - 10,000
10% Notes Receivable -
Collateralized by equipment
having fair market value
exceeding the principal balance
of the respective note. The
notes are due in various monthly
installments of through
October 1, 1997 3,480 -
6% - 10% Notes Receivable -
Due from various individuals
- on demand and unsecured - 69,879
27,277 124,256
Deduct noncurrent portion 6,733 25,561
$ 20,544 $ 98,695
</TABLE>
Interest earned on the above notes amounts to $9,644 in
1996 and $22,382 in 1995.
NOTE D - INVESTMENT IN MARKETABLE TRADING SECURITIES
At December 31, 1996, the Company's investment in
marketable trading securities consisted entirely of
trading securities as follows:
Cost Market Value
Investment in corporate
trading securities $420,584 $443,067
-8-
VANDERBILT SQUARE CORP. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
NOTE D - INVESTMENT IN MARKETABLE TRADING SECURITIES (Cont'd)
Unrealized gains (losses) on changes in market values of
marketable trading securities amounted to $55,588 in 1996
and ($6,549) in 1995.
NOTE E - NET INVESTMENT IN DIRECT FINANCING LEASES
The Company's operations include leasing various types of
equipment which are classified as direct financing leases.
These leases are summarized as follows at December 31,
1996 and 1995:
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Total minimum lease payment
to be received (a) $ 14,017 $ 6,778
Add: unguaranteed residuals - 2,500
Gross investment in leases 14,017 9,278
Deduct: unearned interest
income 1,710 692
Net investment in direct
financing leases 12,307 8,586
Deduct: current portion 3,453 3,976
Noncurrent portion $ 8,854 $ 4,610
</TABLE>
(a) The minimum leases payments due at December 31,
1996, for each of the remaining years on the leases
are as follows:
1997 $ 4,313
1998 4,313
1999 4,313
2000 1,078
$14,017
-9-
<PAGE>
VANDERBILT SQUARE CORP. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
NOTE F - INVESTMENT IN UNCONSOLIDATED SUBSIDIARY
The Company's investment in Corrections Services, Inc. ("CSI")
consists of 1,417,800 shares of common stock, which represents
27.7% of the investee's outstanding common stock at December
31, 1996. This investment is accounted for using the equity
method for recognizing income or loss of the investee. During
1996, the Company increased its equity in the investee by
$26,453 as a result of the investees net profit of $113,003 and
the net purchase of 47,800 additional common shares.
The condensed financial statements of CSI are as follows:
<TABLE>
<CAPTION
December 31,
1996 1995 1994
<S> <C> <C> <C>
Total Assets $1,205,096 $1,087,236 $1,101,968
Total Shareholders'
Equity 1,070,006 957,003 979,720
Total Revenues 552,441 533,269 890,094
Net Income (Loss) 113,003 (22,717) 61,412
</TABLE>
The quoted market value of CSI Common Stock owned by the
Company at December 31, 1996 was $171,466.
NOTE G - INVESTMENT IN UNCONSOLIDATED SUBSIDIARY - AT COST
During the year ended December 31, 1995, the Company sold
907,500 shares of Americas Gaming International, Inc. f/k/a
Oxford Capital Corp. ("Americas Gaming") Common Stock that it
held for investment purposes. Moreover, the Company bought and
sold additional Americas Gaming stock during the year, which
resulted in a gain in the amount of $36,775.
The quoted market value of Americas Gaming Common Stock owned
by the Company at December 31, 1995 was $15,183.
During 1995, the Company sold Americas Gaming Common Stock to
certain Vanderbilt shareholders and another related entity at
prevailing market prices at the time of sale. The transactions
resulted in a loss of $8,967.
-10-
<PAGE>
VANDERBILT SQUARE CORP. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
NOTE H - RELATED PARTY TRANSACTIONS
Consulting and Professional Fees - The Company paid
consulting and professional fees of $43,525 in 1996,
$6,139 in 1995, and $10,663 in 1994, to various firms and
individuals affiliated by virtue of common management or
stock ownership.
Office Management and Expenses - The Company paid office
management expenses of $15,300 in 1996, and $14,875 in
1995 and 1994.
Consulting Revenues - The Company received consulting fees
from various affiliated entities amounting to $-0- in
1996, $18,000 in 1995, and $57,940 in 1994.
Rent Expense - The Company paid total rent expense of
$16,200 in 1996, and $15,750 in 1995 and 1994, to an
entity affiliated by common principal stockholders and
management.
Sale of Investments - During 1994, the Company sold
certain marketable securities of affiliated companies, at
market value which resulted in a gain of $43,028.
NOTE I - CONSULTING AGREEMENT
On February 23, 1989, the Company entered into an
agreement with CSI. The agreement provided that the
Company will render consulting services to CSI for a
period of five years. The consulting services include
marketing, financial and administrative services. In
accordance with the contract, the Company received
1,000,000 shares of CSI common stock valued at $233,333.
CSI has certain officers, directors and principal
shareholders in common with the Company.
Revenues relating to the agreement are considered earned
proratably over five years, accordingly, operating
revenues include consulting fees of $3,940 in 1994,
$46,656 in 1993. The Company received a total of $-0- in
1996 and $18,000 for services during 1995 on an as-needed
basis.
-11-
<PAGE>
VANDERBILT SQUARE CORP. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
NOTE J - INCOME TAXES
The components of the provision for income taxes are as
follows for the three years ended December 31, 1996:
<TABLE>
<CAPTION>
1996 1995 1994
<S> <C> <C> <C>
Federal $ 24,078 $ 1,978 $ 3,211
State 1,325 - 277
$ 25,403 $ 1,978 $ 3,488
</TABLE>
Significant components of deferred tax expense are as
follows:
<TABLE>
<CAPTION
Deferred Tax
Asset Liability
<S> <C> <C>
Current Assets and Liabilities:
Allowance for market
appreciation of securities $ - $ 8,338
Total Current - 8,338
Noncurrent Assets and Liabilities:
Investment in unconsolidated
subsidiaries - equity in
earnings or loss - 3,968
Net operating loss carryforward 742 -
Total Noncurrent 742 3,968
Total Current and Noncurrent $ 742 $ 12,306
NET DEFERRED TAX LIABILITY $ 11,564
</TABLE>
NOTE K - SEGMENT INFORMATION
The Company operates principally in three businesses,
namely, equipment leasing, consulting, and deriving income
from investments. Equipment leasing operations involve
the purchase of tangible personal property in connection
with a financing arrangement for certain property for a
specific customer. Investment operations principally
relate to the purchase and sale of marketable equity
securities. Operations in the consulting industry include
financial consulting and office management. Total revenue
by industry includes both sales to unaffiliated customers
and sales to affiliates, as reported in the Company's
consolidated statement of operations.
Operating profit is total revenue less operating expenses.
In computing operating profit, none of the following items
has been added or deducted; general corporate expenses,
interest expenses, income taxes and extraordinary items.
-12-
<PAGE>
VANDERBILT SQUARE CORP. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
NOTE K - SEGMENT INFORMATION (Cont'd)
Identifiable assets by industry are those assets that are
used in the Company's operations in each industry.
Corporate assets are principally cash and notes
receivable.
<TABLE>
<CAPTION
Equipment Consolidated
Leasing Investments Consulting Total
<S> <C> <C> <C> <C>
Revenues $ 985 $ 282,505 $ -0- $ 283,490
Operating Profit
(loss) $ 517 $ 74,273 $ -0- $ 74,790
General Corporate
Expenses $ 15,829
Net Operating
Income $ 58,961
Identifiable
assets at
December 31,
1996 $12,307 $1,047,863 $ - $1,060,170
Total assets at
December 31,
1996 $1,078,326
</TABLE>
NOTE L - OTHER INFORMATION
On August 6, 1996, the Board of Directors of the Company
declared a 10% stock dividend of the outstanding Common
Stock of the Company. The stock dividend was paid on
September 24, 1996 to all stockholders of record at the
close of business on August 23, 1996.
On October 30, 1996, the Company accepted the resignation
of Ronald A. Martini as an officer and director of the
Company. In addition, the Board of Directors of the
Company appointed Glenn Shaffren to the vacancy on its
Board of Directors and elected Mr. Shaffren as Vice
President and a Director of the Company, effective on
November 1, 1996. On January 29, 1997, the Company
accepted the resignation of Glenn Shaffren as an officer
and director of the Company.
-13-
<PAGE>
VANDERBILT SQUARE CORP. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
NOTE M - CONCENTRATIONS OF CREDIT RISK
Financial instruments which potentially subject the
Company to concentrations of credit risk consist primarily
of temporary cash investments, investments in marketable
securities, and notes receivable. The Company places its
cash investments and investments in marketable securities
with high quality institutions and limits the amount of
credit exposure to any one institution or investee.
Concentrations of credit risk with respect to notes
receivable are limited, due to the relatively small
average balance per debtor.
NOTE N - FAIR VALUE OF FINANCIAL INSTRUMENTS
The following notes summarize the major methods and
assumptions used in estimating the fair value of financial
instruments.
Cash and cash equivalents - The carrying amount
approximates fair value due to the liquidity of thse
financial instruments.
Investments - The fair value of investments are based upon
quoted market prices for those investments.
Notes Receivable - The fair value of notes receivable is
based upon net realizable value.
-14-
<PAGE>
INDEPENDENT AUDITOR'S REPORT
ON FINANCIAL STATEMENTS SCHEDULES
Board of Directors and Shareholders
Vanderbilt Square Corp. and Subsidiaries
Fort Lauderdale, Florida
I have audited the consolidated financial statements of Vanderbilt
Square Corp. and subsidiaries as of December 31, 1996 and 1995 and
for each of the three years ended December 31, 1996 and have issued
my report thereon dated January 30, 1997. In connection with my
examination, I have also examined the financial statement schedules
listed in Item 14(a)(2). In my opinion, these schedules, when
considered in relation to the basic financial statements, present
fairly in all material aspects the information set forth therein.
Thomas W. Klash
Certified Public Accountant
Hollywood, Florida
January 30, 1997
<PAGE>
<TABLE>
<CAPTION>
VANDERBILT SQUARE CORP. AND SUBSIDIARIES
MARKETABLE SECURITIES - OTHER INVESTMENTS
DECEMBER 31, 1996
SCHEDULE I
Amount At Which Each
Number of Shares or Portfolio of Equity
Name of Issuer and Units - Principal Cost of Market Value Security Issued Carried
Title of Each Issue Amount of Bonds Each Issue of Each Issue In the Balance Sheet
<S> <C> <C> <C> <C>
Time Warner 1,000 $ 25,000 $ 25,125 $25,125
Dyneco Corp. 12,500 25,000 10,938 10,938
Kenilworth System Common 20,000 - - -
Mission Cap 2,000 50,000 51,000 51,000
Parallel Technologies
Common 13,000 14,416 130 130
Ohio Edison 2,000 50,000 51,625 51,625
ABE Industrial Holdings
Common 5,000 - - -
Utilicorp 2,000 50,000 52,250 52,250
Republic Industries, Inc. 2,500 41,979 83,438 83,438
Renaissance Enterprises
Common 349,475 - - -
Americas Gaming Intl. Inc. 1,000 1,458 1,125 1,125
Atlantic Cap 1,000 25,000 24,875 24,875
Guardian Int'l. Inc. 1,000 4,428 3,000 3,000
Extended Stay America 500 6,886 10,375 10,375
Gulfstar Ind. 20,000 9,044 7,500 7,500
Pacificorp 1,000 25,000 25,625 25,625
PSE&G Cap 1,000 25,000 25,750 25,750
Republic Ind. Inc. (Calls) 10 2,769 3,875 3,875
RJR Nabisco 1,000 24,877 25,500 25,500
US West Fin. 1,000 25,000 25,125 25,125
Western Resources 500 14,727 15,811 15,811
$420,584 $443,067 $443,067
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
VANDERBILT SQUARE CORP. AND SUBSIDIARIES
MARKETABLE SECURITIES - OTHER INVESTMENTS
DECEMBER 31, 1995
SCHEDULE I
Amount At Which Each
Number of Shares or Portfolio of Equity
Name of Issuer and Units - Principal Cost of Market Value Security Issued Carried
Title of Each Issue Amount of Bonds Each Issue of Each Issue In the Balance Sheet
<S> <C> <C> <C> <C>
Cashtek Corp. 20,000 $ 5,978 $ 1,000 $ 1,000
Time Warner 1,000 25,000 25,500 25,500
Dyneco Corp. 12,500 25,000 25,000 25,000
Xavier Mines 25,000 36,128 26,600 26,600
Little Switzerland 4,000 20,508 14,500 14,500
Kenilworth System Common 20,000 2,805 - -
Mission Cap 2,000 50,000 51,000 51,000
Parallel Technologies
Common 104,500 45,914 16,962 16,962
Ohio Edison 2,000 50,000 51,875 51,875
ABE Industrial Holdings
Common 5,000 3,284 - -
Utilicorp 2,000 50,000 52,500 52,500
Republic Waste 1,000 10,497 26,875 26,875
Rothchild Companies, Inc. 78,500 3,811 3,925 3,925
American Waste 2,000 9,105 5,000 5,000
Enzo Biochem (Calls) 2,000 3,605 5,000 5,000
Americas Gaming Intl. Inc. 9,000 12,290 15,183 15,183
Renaissance Enterprises
Common 349,475 100 - -
$ 354,025 $320,920 $320,920
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
VANDERBILT SQUARE CORP. AND SUBSIDIARIES
SCHEDULE II - AMOUNTS RECEIVABLE FROM RELATED PARTIES
DECEMBER 31, 1996
SCHEDULE II
Column A Column B Column C Column D Column E
Balance at
Balance Deductions End of Period
Beginning of Amounts Amounts Not
Name of Debtor Period Additions Collected Other Written Off Current Current
<S> <C> <C> <C> <C> <C> <C>
Digitel Network
Services, Inc. $ - $ 54,043 $ 1,396 $ - $ - $33,881 $ 18,766
Ronald A. Martini 2,266 20,000 2,266 - - 4,419 15,581
Specialty Device
Installers 10,000 - 10,000 - - - -
Frank Bauer 2,211 - 2,033 - - 178 -
$ 14,477 $ 74,043 $ 15,695 $ - $ - $38,478 $ 34,347
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
VANDERBILT SQUARE CORP. AND SUBSIDIARIES
SCHEDULE II - AMOUNTS RECEIVABLE FROM RELATED PARTIES
DECEMBER 31, 1995
SCHEDULE II
Column A Column B Column C Column D Column E
Balance at
Balance Deductions End of Period
Beginning of Amounts Amounts Not
Name of Debtor Period Additions Collected Other Written Off Current Current
<S> <C> <C> <C> <C> <C> <C> <C>
Ronald A. Martini $ 8,755 $ - $ 6,489 $ - $ - $ 2,266 $ -
Specialty Device
Installers 24,741 - 14,741 - - 10,000 -
Frank Bauer 8,722 3,000 9,511 - - 2,032 179
$ 42,218 $ 3,000 $ 30,741 $ - $ - $14,298 $ 179
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
VANDERBILT SQUARE CORP. AND SUBSIDIARIES
SCHEDULE II - AMOUNTS RECEIVABLE FROM RELATED PARTIES
DECEMBER 31, 1994
SCHEDULE II
Column A Column B Column C Column D Column E
Balance at
Balance Deductions End of Period
Beginning of Amounts Amounts Not
Name of Debtor Period Additions Collected Other Written Off Current Current
<S> <C> <C> <C> <C> <C> <C> <C>
Corrections
Services, Inc. $ 3,219 $ - $ 3,219 $ - $ - $ - $ -
Ronald A. Martini 14,807 - 6,052 - - 6,489 2,266
Specialty Device
Installers - 30,000 5,259 - - 23,550 1,191
Frank Bauer 18,452 - 9,730 - - 8,722 -
$ 36,478 $ 30,000 $ 24,260 $ - $ - $38,761 $ 3,457
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
VANDERBILT SQUARE CORP. AND SUBSIDIARIES
MARKETABLE SECURITIES - OTHER INVESTMENTS
DECEMBER 31, 1996
SCHEDULE XIII
Amount At Which Each
Number of Shares or Equity in Portfolio of Equity
Name of Issuer and Units - Principal Cost of Earnings or Security Issued Carried
Title of Each Issue Amount of Bonds Each Issue (Loss) Issuer In the Balance Sheet
<S> <C> <C> <C> <C>
Corrections Services, Inc.
Common 1,417,800 $299,898 $(49,890) $250,008
Cumulative
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
VANDERBILT SQUARE CORP. AND SUBSIDIARIES
MARKETABLE SECURITIES - OTHER INVESTMENTS
DECEMBER 31, 1995
SCHEDULE XIII
Amount At Which Each
Number of Shares or Equity in Portfolio of Equity
Name of Issuer and Units - Principal Cost of Earnings or Security Issued Carried
Title of Each Issue Amount of Bonds Each Issue (Loss) Issuer In the Balance Sheet
<S> <C> <C> <C> <C>
Corrections Services, Inc.
Common 1,370,000 $290,659 $(76,343) $214,316
Cumulative
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule containst summary financial information extracted from Balance
Sheet, Statement of Operations, Statements of Cash Flows and Notes thereto
incorporated in Part II, Item 8. of this Form 10-K and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 250,209
<SECURITIES> 443,067
<RECEIVABLES> 66,952
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 763,977
<PP&E> 3,920
<DEPRECIATION> 3,920
<TOTAL-ASSETS> 1,063,919
<CURRENT-LIABILITIES> 48,447
<BONDS> 0
0
0
<COMMON> 1,649
<OTHER-SE> 1,010,597
<TOTAL-LIABILITY-AND-EQUITY> 1,063,919
<SALES> 0
<TOTAL-REVENUES> 227,902
<CGS> 0
<TOTAL-COSTS> 225,097
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 86,846
<INCOME-TAX> 25,403
<INCOME-CONTINUING> 59,443
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 59,443
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
