Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
Commission File Number 33-8817-D
Hallmark Properties, Inc.
---------------------------
(Exact Name of Registrant as Specified in its Charter)
Colorado 84-1036901
-------- -----------
(State or Other Jurisdictionof (I.R.S. Employer
Incorporation or Organization) Identification No.)
7810 West 70th Drive
Arvada, Colorado 80004
---------------------- -------------
(Address of Principal (Zip Code)
Executive Offices)
(303) 424-6919
--------------
(Registrants Telephone Number, Including Area Code)
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
requirement 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, 1997 was 43,393,333 shares.
<PAGE>
Hallmark Properties, Inc.
Index.
Part I. Financial Information Page No.
Item 1. Financial Statements
Balance Sheets
December 31, 1996 and 1997 3
Statements of Operations
Three and Nine Months Ended
December 31, 1996 and 1997 4
Statements of Cash Flows
Three and Nine Months Ended
December 31, 1996 and 1997 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
Part II OTHER INFORMATION
Item 1. through Item 6. 8
Signatures 9
- 2 -
<PAGE>
Hallmark Properties, Inc.
(A Development Stage Company)
<TABLE>
<CAPTION>
Balance Sheet
(In Thousands, Except Per Share Data)
December 31, 1996 and 1997
1996 1997
ASSETS -------- --------
<S> <C> <C>
Current assets
Cash and cash equivalents $ - $ -
Accounts receivable - -
Inventory - -
Short term notes receivable - -
-------- --------
Total current assets - -
-------- --------
Other assets
Real estate
Other - -
-------- --------
Total other assets - -
-------- --------
- -
======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities
Accounts payable - -
Notes payable - -
-------- --------
Total current liabilities - -
-------- --------
Stockholder's Equity
Common stock, no par value, 400,000,000
shares authorized, issued and outstanding
43,393,333 and 43,393,333 at December 31,
1996 and 1997 respectively 296 296
Deficit accumulated during the development
stage. ( 296) ( 296)
-------- --------
Total Stockholder's Equity ( -) ( -)
-------- --------
$ - $ -
======== ========
</TABLE>
See accompanying notes
- 3 -
<PAGE>
Hallmark Properties, Inc.
(A Development Stage Company)
<TABLE>
<CAPTION>
Statement of Operations
(In Thousands, except per share data)
Three and Six Months Ended December 31, 1996 and 1997
Cumulative
amount from
1996 1997 inception
------------------- -------------------- -----------
Three Nine Three Nine
Months Months Months Months
------- ------- ------- ------- -----------
<S> <C> <C> <C> <C> <C>
Income from operations $ - $ 5 $ - $ - $ 5
Cost of sales
------- ------- ------- ------- -----------
Gross profit - 5 - - -
------- ------- ------- ------- -----------
Expenses
Organizational costs - - - - 1
Bank charges - - - - -
Dues, fees, postage,
printing and
telephone - 1 - - 1
Legal, professional
and consulting 1 2 - - 10
Merger expenses - - - - 261
Miscellaneous 1 2 - - 3
Rent expense - - - - 6
Salaries - - - - 19
Taxes - - - - -
Travel and
entertainment - - - - -
------- ------- ------- ------- -----------
Total expenses 2 5 - - 301
------- ------- ------- ------- -----------
Net loss before
income taxes ( 2) - - - ( 296)
Income taxes - - - - -
------- ------- ------- ------- -----------
Net income $( 2) $ - $ - $ - $( 296)
======= ======= ======= =======
Per share earnings during
reporting period $ - $ - $ - $ - $ -
------- ------- ------- ------- -----------
Weighted average number
of shares 43393333 43393333 43393333 43393333 33,417,188
-------- -------- -------- ------- ----------
See accompanying notes
</TABLE>
- 4 -
<PAGE>
Hallmark Properties, Inc.
(A Development Stage Company)
<TABLE>
<CAPTION>
Statement of Cash Flows
(In Thousands, except per share data)
Three and Nine Months Ended December 31, 1996 and 1997
Cumulative
amount from
1996 1997 inception
------------------- ----------------- ------------
Three Nine Three Nine
Months Months Months Months
------- ------ ------ ------
<S> <C> <C> <C> <C> <C>
Cash flows from operating
activities
Net Loss $( 2) $ - $ - $ - $( 272)
Adjustments to reconcile
Net Loss to Net Cash
used in operating
activities
Increase (decrease) in
accounts payable - ( 24) - - ( 24)
------- ------ ------ ------ -----------
Net cash used in
operations ( 2) ( 24) - - ( 296)
------- ------ ------ ------ -----------
Cash used in investing
activities - - - - -
------- ------ ------ ------ -----------
Cash flows from financing
activities
Proceeds from sale of
Common Stock - 24 - - 296
------- ------ ------ ------ -----------
Cash balance at beginning
of period 2 - - - -
------- ------ ------ ------ -----------
Cash balance at end of
period $ - $ - $ - $ - $ -
======= ====== ====== ====== ===========
</TABLE>
See accompanying notes
- 6 -
<PAGE>
Hallmark Properties, Inc.
Notes to Financial Statements
December 31, 1997
1.Summary of significant accounting policies
Organization
Hallmark Properties, Inc. ("Hallmark" or the "Company" (formerly
Tierra Environmental Corporation) was organized under the laws
of the State of Colorado on August 11, 1986, for the purpose
of evaluating and seeking merger candidates. The Company is
currently considered to be in the development stage as more fully
defined in the Financial Accounting Standards Board Statement
No. 7. The Company has engaged in limited activities, but has
not generated significant revenues to date. The Company is
currently seeking business opportunities.
Accounting methods
The Company records income and expenses on the accrual method.
Fiscal year
The Company has selected March 31 as its fiscal year.
Deferred offering cost
Costs associated with any public offering were charged to proceeds
of the offering.
Loss per share
All stock outstanding prior to the public offering had been issued
at prices substantially less than that which was paid for the stock
in the public offering (Note 3). Accordingly, for the purpose of the
loss per share calculation, shares outstanding at the end of the
period were considered to be outstanding during the entire period.
2.Income taxes
Since its inception, the Company has incurred a net operating loss.
Though the Company showed a net profit for the year ended March 31,
1992, no tax liability has been assessed due to the accumulated net
loss from prior periods. Accordingly, no provision has been made for
income taxes. The Company has a net operating loss of approximately
$296,000 expiring through 2007.
3.Related Party Transactions
On August 19, 1996 the Company entered into an agreement with James
Porter and Louis Porter whereby the "Porters" paid $24,817 to the
Company and the Company issued 40,000,000 of its common stock to the
Porters (20,000,000 to each). The Company used the cash to settle
outstanding liabilities (approximately $24,000 at March 31, 1996 and
$0 at March 31, 1997).
- 7 -
<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
2. Management discussion and analysis of financial condition and results
of operations
Hallmark Properties, Inc. (the "Company") was formed on August 11, 1986.
Since inception, management has been actively seeking business
opportunities. Several potential candidates were identified between
1986 and the end of fiscal 1997; no combination with any of these
companies was ever completed, although the Company several times changed
its name in anticipation of a combination with another entity being
consumated.
The Company still does not have any business activity of its own. The
Company has no agreement in principle or any formal contract to acquire
or enter into any business opportunity as of the date of this report.
The Company has engaged in limited activities but has been hampered in
its efforts due to its lack of capital. It is possible that the Company
will need a substantial amount of additional capitalization before it
will be able to participate in any merger activities. There is no
assurance that the Company will obtain any additional capitalization.
The Company intends to structure any merger or acquisition in such a
manner as to minimize federal and state tax consequences to the Company
and any target company.
Part II - OTHER INFORMATION
1. Legal proceedings There are none.
2. Changes in Securities None
3. Defaults upon senior securities Not applicable
4. Submission of matters to a vote of securitiy holders Not applicable
5. Other information Not applicable
6. Exhibits and reports on Form 8-K
(a) Exhibits Not applicable
(b) Reports on Form 8K Not applicable
- 8 -
<PAGE>
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, thereunto duly authorized.
HALLMARK PROPERTIES, INC.
(Registrant)
By /s/ Miles D. Wynn
---------------------------
MILES D. WYNN, President
and Principal Financial
and Accounting Officer
- 9 -
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This financial data schedule is taken from the Hallmark Properties
Form 10-Q for the period ended December 31, 1997 and is limited in
its entirety by reference thereto.
</LEGEND>
<CIK> 0000802203
<NAME> HALLMARK PROPERTIES INC.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> DEC-31-1997
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 296,000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
