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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT FILED PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended November 30, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to __________.
Commission file No. 0-5141
Princeton American Corporation
(Exact name of small business issuer as specified in its Charter)
Nevada 22-1848644
(state or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
2222 East Camelback Road, Suite 105, Phoenix, AZ 85016
(Address of Principal Executive Offices, including Zip Code)
Issuer's telephone number, including area code: (602) 522-2444
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 periods
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 [ ]
14,148,047 shares of Common Stock, par value $.001 per share, were
outstanding at November 30, 2000
Transitional Small Business Disclosure Format (Check One):
Yes [ ] No [X]
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PRINCETON AMERICAN CORPORATION
FORM 10-QSB
INDEX
<TABLE>
<CAPTION>
<S> <C>
Part I Financial Information Page
Item 1 - Financial statements (unaudited)
Balance Sheet - November 30, 2000 1
Statements of Operations and Comprehensive Loss - Three Months
ended November 30, 2000 and 1999 3
Statements of Cash Flows - Three Months ended November 30, 2000
and 1999. 4
Notes to Financial Statements 5
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations. 6
PART II Other Information - None 8
Signatures 9
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PRINCETON AMERICAN CORPORATION
Unaudited Condensed Balance Sheet
November 30, 2000
ASSETS
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<S> <C>
Current assets:
Cash and cash equivalents $ 8,238
Investments in marketable securities 73,687
Prepaid expenses 62,171
----------
Total current assets 144,096
----------
Investment in commission contract 204,484
Property and equipment, net 1,219,432
----------
$1,568,012
==========
</TABLE>
See accompanying notes to financial statements
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PRINCETON AMERICAN CORPORATION
Unaudited Condensed Balance Sheet
November 30, 2000
LIABILITIES AND STOCKHOLDERS' DEFICIT
<TABLE>
<S> <C>
Current liabilities:
Notes payable - current portion $ 29,364
Notes payable, officers 130,000
Accounts payable 207,307
Bankruptcy claims 679,289
Liabilities in dispute 619,603
Accrued interest 151,519
Accrued real estate taxes 246,206
Payroll and sales taxes payable 12,670
Advance rental income and tenant security deposits 40,531
-----------
Total current liabilities 2,116,489
Tenant security deposits - long term 26,512
Mortgage notes payable 1,758,600
-----------
3,901,601
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Stockholders' deficit:
Common stock 15,000
approximately 15,000,000 shares issued and outstanding
Additional paid-in-capital 2,460,350
Accumulated deficit (4,400,170)
-----------
(1,924,820)
Net unrealized loss on marketable securities (408,769)
-----------
Total stockholders' deficit (2,333,589)
-----------
Total liabilities and stockholders' deficit 1,568,012
===========
</TABLE>
See accompanying notes to financial statements
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PRINCETON AMERICAN CORPORATION
Unaudited Condensed Statements of Operations and Comprehensive Loss
For the Three Months and Six Months Ended November 30, 2000 and 1999
<TABLE>
<CAPTION>
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
November 30, November 30, November 30, November 30,
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues
Rental income $ 182,975 188,878 $ 407,453 413,441
Parking and other 2,765 (1,047) 80,010 1,594
--------- -------- --------- --------
185,740 187,831 487,463 415,035
--------- -------- --------- --------
Costs and expenses
Building operating costs 87,026 92,664 175,538 181,632
Professional fees 55,596 32,303 115,874 64,012
Payroll and payroll taxes 34,684 33,278 69,757 67,252
Ground lease 31,451 29,669 62,486 59,147
Depreciation 32,588 32,358 65,176 64,946
Consulting 5,650 21,150 23,200 41,150
Other 11,869 12,124 23,330 21,913
--------- -------- --------- --------
Total costs and expenses 258,864 253,546 535,361 500,052
--------- -------- --------- --------
Income (loss) from operations (73,124) (65,715) (47,898) (85,017)
--------- -------- --------- --------
Other income (expense)
Interest and dividend income 4,848 6,030 9,797 11,620
Interest expense (56,214) (59,824) (110,975) (109,394)
Other (4,080) 131,981 (7,374) 130,490
--------- -------- --------- --------
(55,446) 78,187 (108,552) 32,716
--------- -------- --------- --------
Net income (loss) before income tax (128,570) 12,472 (156,450) (52,301)
Income taxes -- -- -- 50
--------- -------- --------- --------
Net income (loss) $(128,570) 12,472 (156,450) (52,351)
========= ======== ========= ========
Net income (loss) per common share, basic and diluted $ (0.01) 0.00 (0.01) (0.00)
========= ======== ========= ========
Net income (loss) $(128,570) 12,472 (156,450) (52,351)
Net unrealized gain (loss) on marketable securities (9,602) (4,681) (33,578) (5,231)
--------- -------- --------- --------
Comprehensive income (loss) $(138,172) 7,791 (190,028) (57,582)
========= ======== ========= ========
</TABLE>
See accompanying notes to financial statements
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PRINCETON AMERICAN CORPORATION
Unaudited Condensed Statements of Cash Flows
For the Six Months Ended November 30, 2000 and 1999
<TABLE>
<CAPTION>
2000 1999
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Cash flows from operating activities:
Net loss $(156,450) (52,351)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation 65,176 64,946
Interest income on investment contract (9,103) (8,945)
Gain on sale of real estate -- (8,481)
Decrease in receivables -- 443
Decrease (increase) in prepaid expenses (42,004) 10,654
Increase in accounts payable and accrued expenses 69,169 91,259
Increase in accrued interest 29,356 22,456
Increase (decrease) in rent deposits 9,654 (47,520)
--------- -------
Net cash provided by (used in) operating activities (34,202) 72,461
--------- -------
Cash flows from investing activities:
Payments on notes receivable 18,149 962
Purchase of property and equipment (873) (27,020)
Payments on investment contract 7,375 7,125
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Net cash provided by investing activities 24,651 (18,933)
--------- -------
Cash flows from financing activities:
Refund of deposit -- 9,930
Proceeds from sale of real estate -- 20,981
Proceeds from (payments on) loan from officers 30,000 (20,000)
Payments on mortgage notes payable (13,861) (12,799)
--------- -------
Net cash provided by (used in) financing activities 16,139 (1,888)
--------- -------
Net increase in cash and cash equivalents 6,588 51,640
Cash and cash equivalents, beginning of year 1,650 5,820
--------- -------
Cash and cash equivalents, end of period $ 8,238 57,460
========= =======
Supplementary Disclosure of Cash Flow Information
Cash paid during the period for interest $ 81,619 86,938
========= =======
Cash paid during the period for income taxes $ -- 50
========= =======
</TABLE>
See accompanying notes to financial statements
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PRINCETON AMERICAN CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
NOVEMBER 30, 2000 AND 1999
1. BASIS OF PRESENTATION
The accompanying financial statements have been prepared by the Company,
without audit, and reflect all adjustments that are, in the opinion of
management, necessary for a fair statement of the results for the
interim periods. The statements have been prepared in accordance with
generally accepted accounting principles for interim financial
reporting and Securities and Exchange Commission regulations. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations. In the opinion of management, the financial statements
reflect all adjustments (of a normal and recurring nature) which are
necessary for a fair presentation of the financial position, results of
operations and cash flows for the interim periods. The results of
operations for the six months ended November 30, 2000 are not
necessarily indicative of the results to be expected for the entire
fiscal year.
These financial statements should be read in conjunction with the financial
statements and notes thereto included in the Company's annual report on
Form 10K-SB for the fiscal year ended May 31, 2000.
2. CANCELLATION OF OUTSTANDING SHARES AND ISSUANCE OF NEW SHARES
On September 15, 2000, the Bankruptcy Court ordered Princeton American and
its transfer agent, American Stock Transfer & Trust ("AST") to cancel
all outstanding Princeton American share certificates and issue new
share certificates reflecting the allowed interest of shareholders
under the Plan of Reorganization for Princeton American and the Court's
prior orders. The Court further ordered that Princeton American and AST
are not subject to any claim based upon the cancellation of outstanding
share certificates and the issuance of new certificates in accordance
with the Court's orders. The final order became final and
non-appealable on September 29, 2000.
Princeton American is in the process of implementing the Court's order, and
new share certificates will be issued for the allowed interests as soon
as reasonably practicable. In connection with the issuance of new
certificates, Princeton American has also initiated a process to change
its trading symbol. Effective as of October 9, 2000, the trading
symbol, PELT, has been officially cancelled, and no further trades will
be made under that symbol. After new certificates have been issued to a
majority of those shareholders possessing an allowed interest, a new
trading symbol will be issued to Princeton American.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements contained in this report discuss future
expectations, contain projections of results of operations or financial
condition or state other "forward-looking" information. Those statements are
subject to known and unknown risks, uncertainties and other factors that could
cause the actual results to differ materially from those contemplated by the
statements. The forward-looking information is based on various factors and was
derived using numerous assumptions. Important factors that may cause actual
results to differ from forward-looking statements and projections include, for
example:
- a downturn in the Phoenix, Arizona real estate market,
particularly one which would adversely affect commercial lease
rates;
- an adverse result in the Weiss or other litigation referred to
in this report;
- any change in tax laws which would change the Company's
ability to utilize its tax loss carryforward or the inability
under existing tax laws for the full utilization of such tax
loss carryforward;
- an inability of the Company to regain listed or trading status
on the Over-the-Counter Bulletin Board, NASDAQ, the American
Stock Exchange, or some other recognized market or exchange;
- certain operations of the Company, including the formation of
alliances with other entities, will remain under the
jurisdiction of and be subject to the confirmation and
approval of the U.S. Bankruptcy Court. The decisions of the
Bankruptcy Court, with respect to Company operations retained
under its jurisdiction, could affect the business of the
Company;
- the inability of the Company to secure renewals of existing
leases at commercially reasonable rates or to promptly replace
tenants following the expiration of existing leases;
- the effect of changing economic conditions; and
- other risks which may be described in our future filings with
Securities and Exchange Commission. We do not promise to
update forward-looking information to reflect actual results
or changes in assumptions or other factors that could affect
those statements.
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RESULTS OF OPERATIONS:
Since the filing of the 10QSB for the first quarter ended August 31, 2000,
Management has focused on:
- Continuing settlement negotiations with Harry and Irene Weiss with
respect to their claim which is currently the subject of several
appeals by both parties in the Federal District Court of Arizona and
the 9th Circuit Court of Appeals. On December 11, 2000, pursuant to
stipulated agreement of the parties, Federal District Judge Paul G.
Rosenblatt remanded the Weiss issues before his court for a settlement
mediation before Bankruptcy Court Judge Charles G. Case II. The
mediation proceedings are set before Judge Case on January 19,
2001. There is no assurance that the mediation process will be
successful.
- Leasing of suite 200 at 4908 North 22nd Street, Phoenix, Arizona. A
lease of the second floor (10,000 square feet) of this office building
was entered into with Alliance Investors, LLC, a residential
development company on December 5, 2000. Alliance has 420 employees
(with 44 in the Phoenix office) and over a billion dollars of real
estate under management. The lease is for five years at an average
annual rate of $20.44 per square foot for a total of $ 1,046,960 in
revenues to Princeton over the term of the lease. Occupancy is
scheduled for February 1, 2001. When this tenant completes its move in,
the building will be fully leased with projected revenues of $390,312
annually. Alliance will continue to occupy suites 210 and 250 at the
Camelback address formerly leased to BRE (Alliance's predecessor) until
it moves into its new quarters at 4808 North 22nd Street. Princeton is
required under the terms of the lease to provide $70,000 of tenant
improvements in the form of reduced rent over a period of ten months
commencing May 1, 2001.
- Leasing of vacant spaces at 2222 East Camelback Road, Phoenix, Arizona.
With the pending move of Alliance Investors, LLC to the 4808 North 22nd
Street facility, Princeton has been marketing suites 200, 210 and 250.
The Company has presented a draft for the lease of suites 200 and 210
to United Title Company. Upon execution of the lease, United Title will
occupy these spaces effective February 1, 2001. The lease is for five
years at an average annual rate of $ 23.00 per square foot for a total
of $ 607,430 in revenues to the Company over the term of the lease.
Princeton is required under the terms of the lease to provide
approximately $12,000 in tenant improvements in the form of reduced
rent during a portion of the first year of the lease.
Suite 250 has been offered to Nationwide Vision Centers. Negotiations
are ongoing at this time and are based upon terms similar to the United
Title lease. It is expected that a lease with this clinic will be
concluded in time for the tenant to occupy this space during the second
or third month of this calendar year.
- Implementing the adjustments of outstanding shares and shareholders. On
September 15, 2000, The Bankruptcy Court entered its Order: (1)
Approving Cancellation Of Outstanding
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Share Certificates and Issuance Of New Certificates, and (2) Barring
Claims. A copy of the Order is contained in the Form 8-K set forth in
Item 6 hereof.
Pursuant to the Order, American Stock Transfer & Trust has been
directed to cancel all outstanding shares of the Company. As of October
9, 2000, Princeton's trading symbol "PELT" has been officially
cancelled and no further trades will be made under that symbol. On
October 10, 2000, notice was mailed to those shareholders possessing an
allowed interest, requesting that the cancelled share certificates be
returned to the Company to be replaced by new certificates as
authorized by the Order. Once this process is completed, Princeton will
have approximately 15,000,000 shares issued and outstanding. The
Company has applied to the NASD for registration of the Company's
shares for trading on the Over the Counter Bulletin Board Market
(OTCBB). It is anticipated that a new trading symbol will be issued by
the NASD if Princeton's application is approved.
THREE MONTHS ENDED NOVEMBER, 2000 COMPARED TO THREE MONTHS ENDED
NOVEMBER 30, 1999
We believe that our cash position of $ 8,238 as of November 30, 2000,
coupled with the increased revenues resulting from the lease-up of 4808
North 22nd Street, and the leasing to United Title and Nationwide
Vision Centers of the spaces at 2222 East Camelback Road (to be vacated
by Alliance Investors, LLC) will be sufficient to continue operations
for the next twelve months under bankruptcy court supervision.
The company is required to pay all unsecured and administrative claims
(aggregating $679,289, but not including the Weiss claim) in order to
emerge from bankruptcy proceedings. In order to raise the capital
necessary to accomplish this, we plan to either: (1) Sell 4808 North
22nd Street or (2) refinance both office buildings. Either of these
alternatives (or a combination thereof) should produce sufficient funds
to discharge these obligations. Efforts are ongoing to sell the 4808
building. We have had a tentative commitment from a lender to refinance
both buildings, pending resolution of outstanding bankruptcy issues.
PART II Other Information - None
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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.
Date: January 16, 2001
PRINCETON AMERICAN CORPORATION
/s/ William C. Taylor
------------------------------
William C. Taylor
President
/s/ Roderick W. McKinnon
------------------------------
Roderick W. McKinnon
Corporate Secretary
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