<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
OR
( )TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to _________________
Commission File Number 1-9043
B.H.I.T. Inc.
(Formerly Banyan Hotel Investment Fund)
(Exact Name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification Number 36-3361229)
875 Avenue of the Americas, Suite 1808
New York, New York 10001
(Address of principal executive Offices) (Zip Code)
Registrant's telephone number, including area code (212) 736-7880
Indicate by check mark 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.
Shares of Common Stock outstanding as of May 9, 2000: 12,338,051
Transitional Small Business Disclosure Format Yes. No. X.
<PAGE>
B.H.I.T. Inc. Formerly
BANYAN HOTEL INVESTMENT FUND
QUARTERLY REPORT ON FORM 10-QSB
FOR THE THREE MONTHS ENDED MARCH 31, 2000
TABLE OF CONTENTS
<TABLE>
<CAPTION>
INDEX PAGE
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<S> <C>
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of March 31,
2000 (unaudited) and December 31, 1999..........................3
Consolidated Statements of Operations for
the three months ended March 31, 2000 and
1999 (unaudited)................................................4
Consolidated Statement of Stockholders' Equity
for the three months ended March 31, 2000
(unaudited).....................................................5
Consolidated Statements of Cash flows for the
three months ended March 31, 2000 and 1999
(unaudited).....................................................6
Notes to Consolidated Financial Statements
(unaudited).....................................................7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations.....................................................10
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.................................12
SIGNATURES ...............................................................13
</TABLE>
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B.H.I.T. Inc. Formerly
BANYAN HOTEL INVESTMENT FUND
CONSOLIDATED BALANCE SHEETS
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
ASSETS March 31, December 31,
2000 1999
---- ----
(Unaudited)
<S> <C> <C>
Cash and Cash Equivalents $ 52,261 $ 110,992
Interest Receivable on Mortgages
and Miscellaneous Receivables 3,205 4,166
Mortgage Loans Receivable 300,000 300,000
Investment in Joint Venture 930,507 915,504
Prepaid Insurance 8,282 16,243
Other Assets 3,198 3,198
----------- -----------
Total Assets $ 1,297,453 $ 1,350,103
=========== ===========
LIABILITIES & STOCKHOLDERS' EQUITY
Accounts Payable and Accrued Expenses $ 6,244 $ 35,864
Stockholders' Equity
Shares of Common Stock $0.01 Par Value
20,000,000 Shares Authorized,
12,338,051 Shares Outstanding 87,477,847 87,477,847
Accumulated Deficit (86,178,449) (86,155,419)
Treasury Stock, At Cost
for 32,757 Shares of Common Stock (8,189) (8,189)
----------- -----------
Total Stockholders' Equity 1,291,209 1,314,239
----------- -----------
Total Liabilities and Stockholders' Equity $ 1,297,453 $ 1,350,103
=========== ===========
</TABLE>
See Accompanying Notes
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<PAGE>
B.H.I.T. Inc. Formerly
BANYAN HOTEL INVESTMENT FUND
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
2000 1999
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<S> <C> <C>
INCOME
Interest Income on Cash and Cash Equivalents $ 902 $ 1,734
Interest Income on Mortgages Receivable 9,000 9,000
Interest Income from Related Parties -- 1,770
--------- ---------
Total Income 9,902 12,504
--------- ---------
EXPENSES
Stockholder Expenses 2,333 1,754
Other Professional Fees 3,271 --
General and Administrative 42,331 41,112
--------- ---------
Total Expenses 47,935 42,866
--------- ---------
Equity in Net Income (Loss) of
Unconsolidated Joint Venture 15,003 (48,344)
--------- ---------
Net Loss $ (23,030) $ (78,706)
========= =========
Basic and Diluted Net Loss Per Share of Common Stock (Based on
Number of Shares Outstanding of 12,338,051) $ (0.00) $ (0.01)
========= =========
</TABLE>
See Accompanying Notes
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<PAGE>
B.H.I.T. Inc. Formerly
BANYAN HOTEL INVESTMENT FUND
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
THREE MONTHS ENDED MARCH 31, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
Shares of Common Stock
----------------------------- Accumulated Treasury
Shares Amount Deficit Stock Total
------ ------ ------- ----- -----
<S> <C> <C> <C> <C> <C>
Stockholders'
Equity (Deficit)
December 31, 1999 12,338,051 $ 87,477,847 $ (86,155,419) $ (8,189) $ 1,314,239
---------- ------------ ------------- -------- -----------
Net Loss -- -- (23,030) -- (23,030)
---------- ------------ ------------- -------- -----------
Stockholders'
Equity (Deficit)
March 31, 2000 12,338,051 $ 87,477,847 $ (86,178,449) $ (8,189) $ 1,291,209
========== ============ ============= ======== ===========
</TABLE>
See Accompanying Notes
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<PAGE>
B.H.I.T. Inc. Formerly
BANYAN HOTEL INVESTMENT FUND
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2000 and 2000
(UNAUDITED)
<TABLE>
<CAPTION>
2000 1999
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (23,030) $ (78,706)
Adjustments to Reconcile Net Loss to Net
Cash Flows Used in Operating Activities
Equity in Net (Income) or Loss of Unconsolidated
Joint Venture (15,003) 48,344
Net Change in:
Interest Receivable on Mortgage and Miscellaneous Receivables 961 (137)
Prepaid Insurance 7,961 8,511
Other Assets -- 4,437
Accounts Payable and Accrued Expenses (29,620) (19,044)
-------- ---------
Net Cash Used in Operating Activities (58,731) (36,595)
-------- ---------
CASH FLOW FROM INVESTMENT ACTIVITIES:
Principal Collections on Mortgage Loan -- 106,189
-------- ---------
Net Cash Provided by Investment Activities -- 106,189
-------- ---------
Net Increase (Decrease) in Cash and Cash equivalents (58,731) 69,594
Cash and Cash Equivalents at Beginning of Period 110,992 193,710
-------- ---------
Cash and Cash Equivalents at End of Period $ 52,261 $ 263,304
======== =========
</TABLE>
See Accompanying Notes
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<PAGE>
B.H.I.T. Inc. Formerly
BANYAN HOTEL INVESTMENT FUND
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000
(UNAUDITED)
BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-QSB and Item 310 of Regulation
S-B. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the three month period ended March 31, 2000, are
not indicative of the results that may be expected for the year ended December
31, 2000.
The balance sheet at December 31, 1999 has been derived from the
audited financial statements at that date but does not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements.
For further information, refer to the financial statements and
footnotes thereto included in B.H.I.T. Inc.'s (the "Company") annual report on
Form 10-KSB for the year ended December 31, 1999.
The business of the Company is not seasonal and the Company does no
foreign or export business. The Company does not segregate revenue or assets by
geographical region, and such presentation is not applicable and would not be
material to an understanding of the Company's business taken as a whole.
Harvey Polly, the President and Chief Executive Officer of the Company
and Sheltering Palms Foundation, a not-for-profit charitable entity controlled
by Mr. Polly and his wife, have entered into an agreement under and pursuant to
which Mr. Polly will sell 2,720,563 shares of the Company's common stock,
2,650,000 shares of the Company's stock which Mr. Polly will acquire under and
pursuant to his original agreement with the Company dated August 4, 1994, as
amended, and Sheltering Palms Foundation will sell 500,000 shares of the
Company's common stock held by it to Vesper Corporation, or its assignee. Upon
closing of the transaction, Vesper Corporation, or its assignee, will own a
total of 5,870,563 shares or 39% of the total of the then outstanding shares of
common stock of the Company and will be in a position to control the Company. In
connection with the consummation of the transactions contemplated by the
agreement with Vesper Corporation, or its assignee, Mr. Polly has agreed to
acquire the Company's 50% interest in Metro Franchising Commissary LLC, for
$1,000,000.
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BASIS OF PRESENTATION (continued)
Vesper Corporation's obligation to conclude its arrangement is
conditioned upon, among other things, approval by the stockholders of the
Company of an amendment to the certificate of incorporation of the Company and
approval by the stockholders of the sale of the Company's 50% interest in Metro
Franchising Commissary LLC to Mr. Polly for $1,000,000.
MORTGAGE LOANS RECEIVABLE
On February 29, 1996, the Company had a first mortgage loan in the
approximate amount of $106,000 which was secured by an industrial property in
Lake Worth, Florida. The property securing the mortgage was controlled by Mr.
Harvey Polly, who has personally guaranteed the mortgage. The loan called for
10% interest per annum, payable monthly, with a balloon payment of principal
after five years. This loan was fully paid off March 1, 1999.
On August 20, 1997, the Company made a first mortgage loan in the
amount of $1,000,000, which was secured by one commercial and one residential
property located in the Dallas, Texas area. The loan bears interest at the rate
of 12% and calls for monthly payments of interest only. The loan was originally
due on April 1,1998. The principals of the Corporate owners of both properties
have personally guaranteed the loan. In April 1998, this loan was paid down by
$700,000 to $300,000 and the residential property was released from the lien.
The mortgage is now due on June 1, 2000.
As of March 31, 2000, the carrying amount of the above loan
approximates its fair value.
INVESTMENT IN JOINT VENTURE
On May 28, 1998, the Company made an investment of $1,005,000 in Metro
Franchising Commissary, LLC (the "Venture") , resulting in a 50% interest in the
Venture by paying $655,000 in cash upon closing, and issuing a non-interest
bearing note in the amount of $350,000. The note was due on the date which was
the earlier of (i) September 30,1998 or (ii) 10 days after the date on which
demand was made by the holder of the note. This due date was subsequently
extended to November 2, 1998, at which time the note was paid by the Company.
The business of the Venture is to open Dunkin' Donuts Quick Service
Restaurant locations in Exxon Service Stations in the New York, New Jersey and
Connecticut areas. The Venture has leased property in Long Island City, New
York, where Dunkin' Donuts products are baked for delivery to various locations.
It is expected that this facility will have the capacity to service
approximately 20 retail locations.
The individual retail locations are selected by the Venture with
Dunkin' Donuts' and Exxon's approval. Each site is renovated and equipped by the
Venture and operated by the station operator. All baked products are purchased
from the Venture and the station operator also pays the Venture a royalty fee
based on sales, a portion of which is remitted to Dunkin' Donuts.
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<PAGE>
INVESTMENT IN JOINT VENTURE (continued)
As of December 31, 1998, the Venture's baking facility was fully
operational. The first retail location commenced operations in December, 1998.
One additional retail location opened in January, 1999 and two additional retail
locations opened in February, 1999. In April 1999, two additional locations were
opened, and one location was opened in August, 1999, bringing the total to seven
locations. It is expected than an eighth retail location will commence
operations in late May, 2000.
Pursuant to certain provisions in the Venture's operating agreement,
the Company has been allocated all of the Venture's net income and net loss for
the three months ended March 31, 2000 and 1999, respectively.
A summarized statement of operations is as follows for the Venture:
<TABLE>
<CAPTION>
For the three month
period ended
March 31, 2000 March 31, 1999
-------------- --------------
<S> <C> <C>
Revenues
Net Sales and Royalties $ 336,028 $ 124,851
Interest Income 163 2,045
----------- ----------
336,191 126,896
Expenses
Total Expenses 321,188 175,240
----------- ----------
Net Income (Loss) 15,003 (48,344)
Net Income (Loss) allocated
to Company $ 15,003 $ (48,344)
=========== ==========
</TABLE>
INVESTMENT IN LIQUIDATING TRUST
The Company has an interest in a liquidating Trust which was received
as final settlement of guarantees of VMS Realty Partners of loans made by the
Company in prior years. No funds have been received by the Company, from the
Trust in 2000 or 1999.
OTHER INVESTMENT
As of March 31, 1999, the Company owned, a 50% partnership interest in
the Santa Barbara Biltmore Hotel. The fair value of the interest at March 31,
2000 and December 31, 1999 is $0.
TRANSACTIONS WITH AFFILIATES
During the first quarter of 1999, the Company reimbursed an affiliated
company $5,051 for Health Insurance premiums paid on behalf of the Company.
During the first quarter of 2000, no liabilities for such costs were incurred.
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<PAGE>
INCOME TAXES
Prior to January 1, 1995, the Company elected to be treated as a Real
Estate Investment Trust (REIT) under sections 856--860 of the Internal Revenue
Code of 1986. However, management of the Company discontinued its REIT status
effective January 1, 1995. Accordingly, the Company has subsequently been
treated as a C--Corporation in accordance with the Internal Revenue Code.
As of March 31, 2000, the Company had a net operating loss carry
forward of approximately $75,470,000 which expires between 2005 and 2020. The
utilization of the net operating losses may be subject to limitations contained
in the Internal Revenue Code.
A summary of the components of deferred taxes is as follows:
Deferred Tax Asset - Non Current
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
---- ----
<S> <C> <C>
Net Operating Loss Carry Forward $ 30,188,231 $ 30,220,173
============ ============
Valuation allowance (30,188,231) (30,220,173)
============ ============
$ -0- $ -0-
============ ============
</TABLE>
LEGAL PROCEEDINGS
The Registrant is not aware of any material pending legal proceedings
as of May 9, 2000 nor were any proceedings terminated during the quarter ended
March 31, 2000.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents consist of cash and short--term investments
of a period of ninety days or less. The Company's cash and cash equivalents
balance at March 31, 2000 and December 31, 1999 was $52,261 and $110,992
respectively.
At this time, there are no material commitments for capital
expenditures. The Company's cash and cash equivalents are sufficient to meet its
needs for anticipated operating expenses. The Company deems its liquidity to be
adequate.
As of March 31, 2000, the Company's mortgage loan portfolio consisted
of one loan.
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<PAGE>
LIQUIDITY AND CAPITAL RESOURCES (continued)
The Company's ultimate return of cash to its stockholders is dependent
upon, among other things: (i) the activities undertaken by the Company; (ii)
interest earned from the investment of cash and cash equivalents, and mortgages;
(iii) the Company's ability to control its operating expenses; (iv) possible
recoveries from the Santa Barbara Biltmore Hotel and the liquidating Trust, if
any, should such investments generate cash to the Company; and (v) operating
results of the Joint Venture.
RESULTS OF OPERATIONS
Total income for the three months ended March 31, 2000 and 1999, was
$9,902 and $12,504 respectively. The decrease is due primarily to the principal
repayments of one of the Company's mortgage loan receivable on March 1, 1999.
Operating expenses for the three months ended March 31, 2000 were
higher than those for the same period in 1999. In addition, the Company incurred
a loss of $48,344 from its equity investment for the three month period ended
March 31, 1999, while as a result of seven retail locations being in operations
during the three month period March 31, 2000, the Company's equity in earnings
from its equity investment was $15,003.
The above changes for the three months ended March 31, 2000, when
compared to the same period in 1999, resulted in a net loss of $23,030 ($0.00
per share) and of $78,706 ($0.01 per share), respectively.
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<PAGE>
PART II
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
No exhibits are included with this Report.
No Form 8-K was filed with the Securities and Exchange Commission
during the period January 1, 2000 to March 31, 2000.
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<PAGE>
SIGNATURES
PURSUANT to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned there-unto duly authorized.
B.H.I.T. INC.
By: /s/ Harvey Polly Date: May 9, 2000
Harvey Polly, Director, President
and Chief Executive Officer
By: /s/ Morton I. Kalb Date: May 9, 2000
Morton I. Kalb, Director, Vice President
and Chief Financial Officer
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 52,261
<SECURITIES> 0
<RECEIVABLES> 3,205
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 363,748
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,297,453
<CURRENT-LIABILITIES> 6,244
<BONDS> 0
0
0
<COMMON> 87,477,847
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 1,291,209
<SALES> 0
<TOTAL-REVENUES> 24,905
<CGS> 0
<TOTAL-COSTS> 47,935
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (23,030)
<INCOME-TAX> 0
<INCOME-CONTINUING> (23,030)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (23,030)
<EPS-BASIC> (0.00)
<EPS-DILUTED> (0.00)
</TABLE>
