Hallmark Properties, Inc.
3802 East 36th Street
Tulsa, OK 74135
918-836-9928 Office
918-742-1979 Fax
Office of Applications and
Reports Services
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: Hallmark Properties, Inc.
SEC File No. 33-8817-D
Ladies and Gentlemen:
Please find enclosed one copy of Form 10-Q for the period ended December 31,
1996 for Hallmark Properties, Inc.
If you have any questions, please contact us.
Sincerely,
James L. Porter
President
Enclosures
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SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities and Exchange Act of 1934
For the Period Ended December 31, 1996
Commission File Number 33-8817-D
Hallmark Properties, Inc.
(Exact Name of Registrant as Specified in its Charter)
Colorado 84-1036901
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
3802 East 36th Street
Tulsa, Oklahoma 74135-4532
(Address of Principal (Zip Code)
Executive Offices)
(918) 836-9928
(Registrant's Telephone Number, Including Area Code)
Not Applicable
Former Name, Former Address and Former Fiscal
Year, if Changes Since Last Report
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 and 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_______
The number of shares outstanding of Registrant's common stock, no par value
per share at December 31, 1996 was 56,674,970 shares.
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Hallmark Properties, Inc.
December 31, 1996
(Unaudited)
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CONTENTS
Page
ACCOUNTANTS' REPORT 1
BALANCE SHEETS 2
STATEMENTS OF LOSS AND ACCUMULATED DEFICIT 3
STATEMENT OF STOCKHOLDERS' EQUITY 4
STATEMENTS OF CASH FLOWS 5
NOTES TO FINANCIAL STATEMENTS 6-7
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McKenzie & McKenzie
1222 South Joplin
Tulsa, OK 74112
U.S.A.
Phone 918-832-0057
800-962-1684
Fax 918-832-1423
Item 1. Financial Statements
The Board of Directors
Hallmark Properties, Inc.
The accompanying balance sheets of Hallmark Properties, Inc., as of
December 31, 1996 and the related statements of loss and accumulated
deficit, stockholders equity and cash flows for the period from inception
(August 11, 1986) to December 31, 1996 were not audited by us and,
accordingly, we do not express an opinion on them.
Tulsa, Oklahoma
January 2, 1997
Sincerely,
McKenzie & McKenzie
Professional
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Hallmark Properties, Inc.
BALANCE SHEETS
December 31, 1996 and March 31, 1996
Dec. 31, 1996 March 31, 1996
ASSETS (unaudited) (unaudited)
CURRENT ASSETS
Cash and cash equivalents $90.00 $0.00
TOTAL ASSETS $90.00 $0.00
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $0.00 $0.00
Total Current Liabilities $0.00 $0.00
STOCKHOLDERS' EQUITY
Common stock, no par value, 400,000,000 shares
authorized; 56,674,970 shares issued and
outstanding at December 31, 1996
$276,944.00 $271,944.00
Deficit accumulated during the development stage
($276,854.00) ($271,944.00)
Total stockholders' equity $90.00 $0.00
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$90.00 $0.00
The accompanying notes are an integral part of the financial statements.
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Hallmark Properties, Inc.
STATEMENTS OF LOSS AND ACCUMULATED DEFICIT
For the period from inception (August 11, 1986) to Dec. 31, 1996 and
March 31, 1996
(unaudited)
For the nine For the six For the three
From Inception to months ended months ended months ended
Dec. 31, 1996 Dec. 31, 1996 Dec. 31, 1996 Dec. 31, 1996
Income from operations $5,125.00 $5,125.00 $5,125.00 $125.00
Expenses
Amortization of organization costs $1,100.00 $0.00 $0.00 $0.00
Dues, fees and subscriptions $1,218.00 $603.00 $603.00 $113.00
Legal and professional $13,058.00 $1,469.00 $1,469.00 $350.00
Merger expenses (Note 4) $230,421.00 $0.00 $0.00 $0.00
Travel and entertainment $3,000.00 $0.00 $0.00 $0.00
Rent expense $6,700.00 $0.00 $0.00 $0.00
Office salaries $18,850.00 $0.00 $0.00 $0.00
Payroll taxes $1,426.00 $0.00 $0.00 $0.00
Bank charges $189.00 $113.00 $113.00 $113.00
Miscellaneous expenses $3,545.00 $2,850.00 $2,850.00 $1,305.00
Total expenses ($274,382.00) $5,035.00 $5,035.00 ($1,881.00)
Other income
Interest income $1,925.00 $0.00 $0.00 $0.00
NET GAIN/(LOSS) ($272,457.00) $90.00 $90.00 ($1,756.00)
Accumulated deficit
Balance, beginning of period
$0.00 ($272,547.00) ($272,547.00) ($270,701.00)
Balance, end of period
($272,457.00) ($272,457.00) ($272,457.00) ($272,457.00)
Loss per share Nil Nil Nil Nil
Weighted average number of shares 56674970 56674970 56674970 56674970
The accompanying notes are an integral part of the financial statements.
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Hallmark Properties, Inc.
(A Development Stage Enterprise)
STATEMENT OF STOCKHOLDERS' EQUITY
For the period from inception (August 11, 1986) to September 30, 1996
Common Stock Total
Number of Accumulated Stock Stockholders'
Shares Amount Deficit Subsriptions Equity
Balance, August 11, 1986 0 $0.00 $0.00 $0.00 $0.00
Issuance of stock for
cash, August 12, 1986
($0.0001 per share) 33500000 $3,000.00 $0.00 $0.00 $0.00
Issuance of stock for
cash, August 27, 1986
($0.005 per share) 2200000 $11,000.00 $0.00 $0.00 $11,000.00
Issuance of stock for
services, August 27, 1986
($0.005 per share) 200000 $1,000.00 $0.00 $0.00 $1,000.00
Stock subscriptions received 0 $0.00 $0.00 $19,601.00 $19,601.00
Loss for the year ended
March 31, 1987 (audited) 0 $0.00 ($3,861.00) $0.00 ($3,861.00)
Balance, March 31, 1987 (audited)
35900000 $15,000.00 ($3,861.00) $19,601.00 $30,740.00
Issuance of stock for
cash, April 1987
($0.02 per share) 15000000 $256,944.00 $0.00 ($19,601.00) $237,343.00
Loss for the year ended
March 31, 1988 (audited) $0.00 $0.00 ($267,694.00) $0.00 ($267,694.00)
Balance, March 31, 1988 50900000 $271,944.00 ($271,555.00) $19,601.00 $389.00
Loss for the year ended
March 31, 1989 (unaudited) 0 $0.00 ($389.00) $0.00 ($389.00)
Balance, March 31, 1989 50900000 $271,944.00 ($271,944.00) $19,601.00 $0.00
Loss for the year ended
March 31, 1990 (unaudited) 0 $0.00 $0.00 $0.00 $0.00
Balance, March 31, 1990 50900000 $271,944.00 ($271,944.00) $19,601.00 $0.00
Loss for the year ended
March 31, 1991 (unaudited) 0 $0.00 $0.00 $0.00 $0.00
Balance, March 31, 1991 50900000 $271,944.00 ($271,944.00) $19,601.00 $0.00
Loss for the year ended
March 31, 1992 (unaudited) 0 $0.00 $0.00 $0.00 $0.00
Balance, March 31, 1992 50900000 $271,944.00 ($271,944.00) $19,601.00 $0.00
Reverse stock split 15:1
November, 1992 -47506667 $0.00 $0.00 $0.00 $0.00
Issuance of stock for
Treasury 3860000 $0.00 $0.00 $0.00 $0.00
Merger expense 9421637 $0.00 $0.00 $0.00 $0.00
Loss for the year ended
March 31, 1993 (unaudited) 0 $0.00 $0.00 $0.00 $0.00
Balance, March 31, 1993 16674970 $271,944.00 ($271,944.00) $19,601.00 $0.00
Loss for the year ended
March 31, 1994 (unaudited) 0 $0.00 $0.00 $0.00 $0.00
Balance, March 31, 1994 16674970 $271,944.00 ($271,944.00) $19,601.00 $0.00
Loss for the year ended
March 31, 1995 (unaudited) 0 $0.00 $0.00 $0.00 $0.00
Balance, March 31, 1995 16674970 $271,944.00 ($271,944.00) $19,601.00 $0.00
Loss for the year ended
March 31, 1996 (unaudited) 0 $0.00 $0.00 $0.00 $0.00
Balance, March 31, 1996 16674970 $271,944.00 ($271,944.00) $19,601.00 $0.00
Loss for the period ended
June 30, 1996 (unaudited) 0 $0.00 $0.00 $0.00 $0.00
Balance, June 30, 1996 16674970 $271,944.00 ($271,944.00) $19,601.00 $0.00
Issuance of stock for
cash & services, August 1996 40000000 $5,125.00 $0.00 $0.00 $5,125.00
Loss for the period ended
September 30, 1996 0 $0.00 ($3,154.00) $0.00 ($3,154.00)
Balance, September 30, 1996
56674970 $276,944.00 ($275,098.00) $19,601.00 $1,846.00
Loss for the period ended
December 31, 1996 0 $0.00 ($1,756.00) $0.00 ($1,756.00)
Balance, December 31, 1996
56674970 $276,944.00 ($276,854.00) $19,601.00 $90.00
The accompanying notes are an integral part of the financial statements.
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Hallmark Properties, Inc.
STATEMENTS OF CASH FLOWS
For the period from inception (August 11, 1986) to Dec. 31, 1996
(unaudited)
For the nine For the six For the three
From inception to months ended months ended months ended
Dec. 31, 1996 Dec. 31, 1996 Dec. 31, 1996 Dec. 31, 1996
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $280,008.00 ($4,910.00) ($4,910.00) ($1,756.00)
Noncash items included in net loss
Amortization $1,100.00 $0.00 $0.00 $0.00
Changes in:
Current Liabilities $1,732.00 $0.00 $0.00 $0.00
Current assets (other than cash) $225,000.00 $0.00 $0.00 $0.00
Organization costs ($3,000.00) $0.00 $0.00 $0.00
Cash provided by operating activities ($47,112.00) $0.00 $0.00 $0.00
CASH FLOWS FROM INVESTING ACTIVITIES
Loan to merger company (Note 4) ($225,000.00) $0.00 $0.00 $0.00
Cash provided by investing activities
($225,000.00) $0.00 $0.00 $0.00
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock $280,944.00 $5,000.00 $5,000.00 $0.00
Deferred offering costs $0.00 $0.00 $0.00 $0.00
Stock issued for services included in
deferred offering costs $1,000.00 $0.00 $0.00 $0.00
Cash provided by financing activities $271,944.00 $0.00 $0.00 $0.00
Net increase in cash $90.00 $90.00 $90.00 ($1,756.00)
Cash, beginning of period $0.00 $0.00 $0.00 $1,846.00
Cash, end of period $90.00 $1,846.00 $1,846.00 $90.00
The accompanying notes are an integral part of the financial statements.
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Hallmark Properties, Inc.
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Hallmark Properties, Inc. (the "Company") was formed on August 11, 1986 to
evaluate, structure and complete a merger with, or acquisitions of other
entities.
During the nine month periods ended December 31, 1995 and 1996, the
Company's activities involved the payment of general and administrative
expenses.
Since the Company is in the development stage there are no meaningful
comparisons that can be made for the nine months ended December 31, 1995
and 1996.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Not applicable.
Item 2. Changes in Securities.
Not applicable.
Item 3. Defaults Upon Senior Securities.
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 5. Other Information.
Not applicable.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits. Not applicable.
(b) Reports on Form 8-K. Not applicable.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1933, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Hallmark Properties, Inc.
Date: January 2, 1997 _________________________
James Louis Porter, President
