<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from __________________ to _________________
Commission file number 1-10641
MILESTONE PROPERTIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 65-0158204
(State or Other Jurisdiction of (I.R.S. Employer Identification Number)
Incorporation or Organization)
5200 TOWN CENTER CIRCLE, BOCA RATON FLORIDA 33486
- -------------------------------------------------------------- -------------
(Address of principal executive offices) (Zip Code)
(561) 394-9533
- -------------------------------------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
- -------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed 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 Exchange Act of
1934 during the past 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
--- ---
As of May 9, 1997, 4,200,591 shares of the registrant's common stock, par value
$.01 per share, and 3,045,626 shares of the registrant's $.78 Convertible
Series A preferred stock, par value $.01 per share, were outstanding.
<PAGE>
Part I: Financial Information
Item 1. Financial Statements
MILESTONE PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, 1997 (Unaudited) and December 31, 1996
<TABLE>
<CAPTION>
March 31, 1997 December 31, 1996
-------------- -----------------
<S> <C> <C>
Assets:
Current Assets:
Cash and cash equivalents $ 5,927,138 $ 3,141,839
Loans receivable 1,560,513 1,684,585
Accounts receivable 923,621 1,360,621
Accrued interest receivable 2,415,074 9,646,886
Due from related party 838,879 599,093
Prepaid expenses and other 219,730 430,603
Reverse repurchase agreements 24,511,876 34,718,749
Available-for-sale securities 22,647,510 32,314,853
------------ ------------
Total current assets 59,044,341 83,897,229
Property, improvements and equipment, net 18,749,274 18,884,467
Wraparound notes, net 66,704,262 71,431,945
Deferred income tax asset, net 2,795,816 3,272,873
Investment in affiliate 3,565,100 3,959,433
Management contract rights, net 397,089 426,467
Goodwill and organizational cost, net 204,292 222,863
------------ ------------
Total assets $151,460,174 $182,095,277
------------ ------------
------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $ 578,697 $ 2,031,513
Accrued interest payable 485,581 1,139,941
Master lease payable 3,709,902 14,445,351
Due to related party 0 61,688
Current portion of mortgages and notes payable 2,647,731 2,862,274
Income taxes payable 2,605,020 3,250,744
Loans payable 17,295,934 23,829,335
Treasury notes sold short 24,382,900 33,952,346
------------ ------------
Total current liabilities 51,705,765 81,573,192
Mortgages and notes payable 70,815,318 71,562,942
------------ ------------
Total liabilities 122,521,083 153,136,134
------------ ------------
Commitments and Contingencies
Stockholders' equity:
Common stock ($.01 par value, 10,000,000 shares
authorized, 4,881,042 issued) 48,812 47,433
Preferred stock (Series A $0.01 par value, 10,000,000
shares authorized, 3,056,675 shares issued and
outstanding) 30,567 31,822
Additional paid-in surplus 48,105,451 48,105,575
Unrealized holding gain (loss) - available-for-sale
securities (Net of tax liability (benefit) of
$72,795 and $(151,552), respectively) 108,589 (220,396)
Accumulated deficit (15,913,910) (15,564,873)
Shares held in treasury - 692,591 shares at cost (3,440,418) (3,440,418)
------------ ------------
Total stockholders' equity 28,939,091 28,959,143
------------ ------------
Total liabilities and stockholders' equity $151,460,174 $182,095,277
------------ ------------
------------ ------------
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
MILESTONE PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF REVENUES AND EXPENSES
(Unaudited)
For the Three Months Ended March 31, 1997 and 1996
<TABLE>
<CAPTION>
March 31, 1997 March 31, 1996
-------------- --------------
<S> <C> <C>
REVENUES:
Rent $2,871,450 $2,939,694
Interest income 3,376,327 4,079,515
Revenue from management company operations 200,691 179,711
Tenant reimbursements 357,989 348,665
Management and reimbursement income 263,132 278,222
Percentage rent 70,076 18,204
Amortization of discount - available-for-sale securities 89,300 60,053
Unrealized gain on treasury notes sold short 403,430 1,317,238
Loss on sale of available-for-sale securities (784,122) 0
----------- ----------
Total revenues 6,848,273 9,221,572
----------- ----------
EXPENSES:
Master lease expense 3,531,826 3,963,977
Interest expense 2,263,277 2,357,620
Depreciation and amortization 193,108 183,331
Salaries, general and administration 605,018 743,058
Property expenses 434,724 704,466
Expenses for management company operations 285,340 236,326
Professional fees 206,938 286,701
----------- ----------
Total expenses 7,520,231 8,475,479
----------- ----------
(Loss) income before income taxes (671,958) 746,093
(Benefit) provision for income taxes (322,921) 283,514
----------- ----------
Net (loss) income $ (349,037) $ 462,579
----------- ----------
----------- ----------
(Loss) income per share of common stock $ (0.08) $ 0.12
----------- ----------
----------- ----------
Weighted average number of shares of
common stock
4,188,451 3,793,783
----------- ----------
----------- ----------
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
MILESTONE PROPERTIES, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the Three Months Ended March 31, 1997
<TABLE>
<CAPTION>
Common Stock Preferred Stock Treasury Stock
------------------ ------------------- ------------------
Shares Amount Shares Amount Shares Cost
------ ------ ------ ------ ------ ----
<S> <C> <C> <C> <C> <C> <C>
Balance January 1, 1997 4,743,155 $47,433 3,182,184 $31,822 (692,591) $(3,440,418)
Conversion of preferred stock into common stock 137,887 1,379 (125,509) (1,255)
Net loss for the three months ended March 31, 1997
Unrealized holding gain - available-for-sale securities
--------- ------- --------- ------- -------- -----------
Balance March 31, 1997 4,881,042 $48,812 3,056,675 $30,567 (692,591) $(3,440,418)
========= ======= ========= ======= ======== ===========
<CAPTION>
Unrealized
Holding (Loss)/
Additional Gain on
Paid-in Available-for- Accumulated Stockholders'
Surplus Sale Securities Deficit Equity
---------- --------------- ----------- -------------
<S> <C> <C> <C> <C>
Balance January 1, 1997 $48,105,575 $(220,396) $(15,564,873) $28,959,143
Conversion of preferred stock into common stock (124) 0
Net loss for the three months ended March 31, 1997 (349,037) (349,037)
Unrealized holding gain - available-for-sale securities 328,985 328,985
----------- --------- ------------- -----------
Balance March 31, 1997 $48,105,451 $ 108,589 $ (15,913,910) $28,939,091
=========== ========= ============= ===========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
MILESTONE PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Three Months Ended March 31, 1997 and 1996
<TABLE>
<CAPTION>
March 31, 1997 March 31, 1996
-------------- --------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income $ (349,037) $ 462,579
Adjustments to reconcile net (loss) income to
net cash used in operating activities
Depreciation and amortization 193,108 183,331
Deferred benefit taxes 280,032 638,540
Unrealized gain on treasury notes sold short (403,430) (1,317,238)
Amortization of discount - available-for-sale securities (89,300) (60,053)
Realized loss on sale of available-for-sale securities 784,122 0
Change in operating assets and liabilities net:
Decrease in accounts receivable 437,000 215,264
Increase in due from related party (239,786) (480,586)
Decrease (increase) in accrued interest receivable 7,231,812 (2,304,458)
Decrease in prepaid expenses and other 210,873 409,569
Decrease in accrued expenses (1,452,816) (931,487)
Decrease in accrued interest payable (654,360) (583,951)
(Decrease) increase in master lease payable (10,735,449) 3,963,972
Decrease in income taxes payable (645,724) (423,955)
Decrease in due to related party (61,688) (148,865)
----------- -----------
Net cash used in operating activities (5,494,643) (377,338)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Principal repayments on loans receivable 124,072 14,126
Principal repayments on wraparound notes 4,727,683 0
Purchase of leasehold improvements (9,965) 0
Proceeds from the sale of available-for-sale securities 9,498,529 0
Proceeds from redemption of investment in affiliate 394,333 2,000,000
Purchase of available-for-sale securities 0 (8,452,060)
Proceeds from treasury notes sold short 0 9,177,695
Proceeds from redemption of reverse repurchase agreements 9,803,443 0
Purchase of treasury sold short (9,166,015) 0
Purchase of reverse repurchase agreements 0 (9,083,924)
----------- -----------
Net cash provided by (used in) investing activities 15,372,080 (6,344,163)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions paid to preferred stockholders 0 (666,622)
Principal payments on mortgages and notes payable (962,167) (541,782)
Proceeds from loans payable 0 6,339,045
Principal payments on loans payable (6,553,401) (873,388)
Amounts received on treasury notes payable 403,430 1,317,238
----------- -----------
Net cash (used in) provided by financing activities (7,092,138) 5,574,491
----------- -----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 2,785,299 (1,147,010)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 3,141,839 2,562,506
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 5,927,138 $ 1,415,496
----------- -----------
----------- -----------
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION
Cash paid during the period for interest $ 2,917,637 $ 2,997,241
----------- -----------
----------- -----------
Cash paid during the period for income taxes $ 64,823 $ 0
----------- -----------
----------- -----------
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
MILESTONE PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The accompanying consolidated financial statements of Milestone
Properties, Inc ("Milestone") and its wholly owned subsidiaries (together with
Milestone, the "Company"), have been prepared in accordance with generally
accepted accounting principles for interim financial information and with the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X. 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. The
financial statements as of March 31, 1997 and 1996 are unaudited. The results
of operations for the interim periods are not necessarily indicative of the
results of operations for the fiscal year. Certain information for 1996 has
been reclassified to conform to the 1997 presentation. For further information,
refer to the financial statements and footnotes included thereto in the
Company's Annual Report on Form 10-KSB for the year ended December 31, 1996.
1. Disposition of Real Estate Related Assets
On January 23, 1997, Milestone Asset Management, Inc., a wholly-owned
subsidiary of Milestone ("MAMI"), sold for $9,520,088 in a negotiated
transaction, its $12,089,000 holding of Nomura Series 1994-MDI B3A (the
"Certificate") which it originally purchased in April 1994. The Company
received $2,852,060 in cash from the sale, and used the remaining $6,668,028 to
pay of the balance of the financing associated with the Certificate. The cash
generated was applied to general purposes of the Company.
At the time of the sale of the Certificate MAMI had an outstanding
U.S. Treasury Note short position in the amount of $10,000,000 associated with
the Certificate which MAMI had established to mitigate interest rate risk.
Concurrent with the sale of the Certificate, MAMI closed $9.5 million of the
U.S. Treasury Note short position. The remaining $500,000 was reallocated to
another asset.
As a result of the sale of the Certificate and the close of the U.S
Treasury Note short position, the Company realized a loss of approximately
$1,100,000, of which approximately $475,00 has been previously recognized in
the Statement of Operations as an unrealized loss of Treasury Notes sold short
and approximately $600,000 has been previously recognized in the Balance Sheet
as an unrealized holding loss on available-for-sale-securities.
As of March 12, 1997, the Company terminated, by written notice, the
Master Lease on the Prattville Property ("Prattville Lease"). As a result of
such termination, the Company, the tenant under such lease, assigned all of its
rights, title and interest in the Prattville Property to Ivy Ridge Plaza
Associates ("IRPA"), the landlord under the Prattville Lease and IRPA assumed
all of the Company's related obligations under the Prattville Lease.
2. Recently Issued Accounting Pronouncement
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 128, "Earnings per Share" in February, 1997. The
pronouncement established standards for computing and presenting earnings per
share, and is effective for the Company's 1997 year-end financial statements.
The Company's management has determined that this standard will not have a
significant impact on the Company's computation or presentation of net income
per common share.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operation.
General
The Company is engaged in the business of owning, acquiring, managing,
developing and investing in real estate and real estate related assets.
Recent Developments
Union Property Investors, Inc. ("UPI"), a former subsidiary of the
Company which was spun-off to the holders of the Company's common stock, par
value $0.01 per share (the "Common Stock"), in November 1995, redeemed an
aggregate of 39,433 shares of UPI's preferred stock, par value $0.01 per share
(the "UPI Preferred Stock") owned by the Company between January 1, 1997 and
February 25, 1997, at a price of $10.00 per share for a total redemption price
of $394,333 plus the accrued and unpaid dividends on such redeemed shares.
On February 27, 1997, UPI was merged (the "UPI Merger") into a
wholly-owned subsidiary of Kranzco Realty Trust, a Maryland real estate
investment trust ("Kranzco"). In connection with the UPI Merger, UPI terminated
its property management agreement with MPMI (the "Property Management
Agreement") and its management services agreement with Milestone (the
"Management Services Agreement"). The Company does not expect the termination
of the Property Management Agreement and the Management Services Agreement to
have a material adverse effect on the operations or financial condition of the
Company. The aggregate fees paid in 1996 by UPI to MPMI and Milestone for
services provided to UPI under the Property Management Agreement and the
Management Services Agreement were $975,807 and $260,024, respectively.
In connection with the UPI Merger, the 356,400 shares of UPI Preferred
Stock which the Company owned as of the date of the UPI Merger were converted
into 356,400 shares of Kranzco's Series C Cumulative Redeemable Preferred
Shares (the "Kranzco Series C Shares"). The Company believes that the terms of
the Kranzco Series C Shares are similar to the terms of the UPI Preferred
Stock, because the Kranzco Series C Shares (i) have the same redemption price
and liquidation preference and price ($10 per share) as the UPI Preferred
Stock, (ii) pay cumulative dividends at the rate paid on the UPI Preferred
Stock as of the date of the UPI Merger (8%), and (iii) are required to be
redeemed ratably on a quarterly basis over a two-year period from the date of
the UPI Merger, as compared to the UPI Preferred Stock, which was not required
to be redeemed until the year 2002 (although UPI could have, at its option,
redeemed shares of UPI Preferred Stock at any time).
On April 30, 1997, Kranzco redeemed 44,550 shares of the Kranzco
Series C Shares owned by the Company at a price of $10.00 per share for a total
redemption price of $445,500 plus the accrued and unpaid dividends on such
redeemed shares.
Results of Operations
Three Months Ended March 31, 1997 Compared to Three Months Ended March 31, 1996
The Company recognized a net loss of $349,037 for the three months
ended Mach 31, 1997 as compared to net income of $462,579 for the same period
in 1996 due to the factors:
Revenues for the three months ended March 31, 1997 were $6,848,273, a
decrease of $2,373,299, or 26%, from $9,221,572 for the three months ended
March 31, 1996. Such decrease was primarily due to the net of: (1) a decrease
in interest income of $703,188 resulting primarily from (a) a decrease in the
number of wraparound notes to 28 for the three months ended March 31, 1997 from
32 for the same period in 1996 resulting in a decrease in interest income of
approximately $225,000; and (b) a decrease in mortgage backed securities held
by the Company to two for the three
<PAGE>
months ended March 31, 1997 from four for the same period in 1996 resulting in
a decrease in interest income of approximately $539,000; (2) an unrealized
holding gain on U.S. Treasury Notes sold short of $403,430 for the three months
ended March 31, 1997 compared to an unrealized holding gain of $1,317,238 for
the same period in 1996; and (3) a realized loss on the sale of
available-for-sale securities of $784,122 for the three months ended March 31,
1997 compared to no such gain or loss for the same period in 1996.
Operating expenses for the three months ended March 31, 1997 were
$5,063,846, a decrease of $870,682, or 15%, from $5,934,528 for the three
months ended March 31, 1996. Such decrease was primarily due to the net of: (1)
a decrease in lease expense of $432,151 due to a decrease in the properties
leased by the Company to 28 for the three months ended March 31, 1997 from 32
for the same period in 1996 ; and (2) a decrease in property expenses of
$269,742 attributable to (a) a decrease of four properties in 1997 compared to
1996 resulting in a decrease in property expenses of approximately $75,000; (b)
a decline in snow removal costs of approximately $52,000 for the three months
ended March 31, 1997 compared to the same period in 1996; and (c) a decrease in
insurance expense of approximately $20,000 due to a lower premium for the three
months ended March 31, 1997.
Interest expense for the three months ended March 31, 1997 was
$2,263,277, a decrease of $94,343, or 4%, from $2,357,620 for the three months
ended March 31, 1996. Such decrease was primarily due a decrease in the
outstanding mortgage balances during the three months ended March 31, 1997.
Depreciation and amortization for the three months ended March 31,
1997 was $193,108, an increase of $9,777, or 5%, from $183,331 for the three
months ended March 31, 1996. Such increase was primarily due to approximately
$200,000 of property improvement purchases made throughout 1996.
Liquidity and Capital Resources
The Company, as the holder of 311,850 shares of Kranzco Series C
Shares, is entitled to receive from the redemption of such shares, in seven
equal installments over the next 21 months, an aggregate amount of cash equal
to approximately $3,118,500, plus interest at the rate of 8% per annum on the
applicable outstanding balance of such shares. Such funds will be available to
fund the Company's obligations and its real estate investment and development
activities.
The Company also expects, to the extent necessary, to have adequate
sources of cash and/or cash producing assets to meet the expected future
liquidity needs arising from the fluctuations of gain or loss inherent when
marking-to-market, monthly, the assets and liabilities associated with the
investment activities of MAMI.
The Company has no present intention to declare or pay cash dividends
on the Common Stock or the Company's $.78 Convertible Series A preferred stock,
par value $.01 per share (the "Series A Preferred Stock"), in the foreseeable
future. The cumulative period relating to the payment of dividends on the
Series A Preferred Stock expired on September 30, 1995. If the Company declares
future dividends on its Common Stock or Preferred Stock, the Company may need
to obtain additional funds through equity or debt financing or other
arrangements in order to fund the Company's projected operations. No assurance
can be given that additional financing would be available if and when needed or
on terms acceptable to the Company. In addition, the Company's existing
borrowings may inhibit or result in increased costs to the Company in seeking
to obtain such additional financing. Any decision as to the future payment of
dividends on the Common Stock or the Preferred Stock will depend on the results
of operations and the financial condition of the Company and such other factors
as Milestone's Board of Directors, in its discretion, deems relevant.
Management is not aware of any other trends, events, commitments or
uncertainties, that will or are likely to materially impact the Company's
liquidity.
<PAGE>
Cash Flows
Net cash used in operating activities of $5,494,643 for the three
months ended March 31, 1997 included (1) a net loss of $349,037; (2)
adjustments for non-cash items of $764,532; and (3) a net change in operating
assets and liabilities of $5,910,138, compared to net cash used in operating
activities of $377,338 for the three months ended March 31, 1996, which
included (1) net income of $462,579; (2) adjustments for non-cash items of
$555,420; and (3) a net change in operating assets and liabilities of $284,497.
Net cash provided by investing activities of $15,082,700 for the three
months ended March 31, 1997 included (1) proceeds from principal repayments on
loans receivable and wraparound notes of $4,851,755; (2) purchase of leasehold
improvements of $9,965; (3) proceeds from the sale of available-for-sale
securities of $9,498,529; (4) proceeds from redemption of investment in
affiliate of $394,333; (5) proceeds from redemption of reverse repurchase
agreements of $9,803,443; and (6) purchase of repurchase agreements of
$9,166,015, compared to net cash used in investing activities of $6,344,163 for
the three months ended March 31, 1996, which included (1) proceeds from
principal repayments on loans receivable of $14,126; (2) proceeds from
redemption of investment in affiliate of $2,000,000; (3) purchase of
available-forsale securities of $8,452,060; (4) proceeds from U.S. Treasury
Notes payable of $9,177,695; and (5) purchase of reverse repurchase agreements
of $9,083,924.
Net cash used in financing activities of $7,092,138 for the three
months ended March 31, 1997 included (1) principal payments on mortgages and
notes payable of $962,167 (2) principal payments on loans payable of
$6,553,401; and (3) amounts received on U.S. Treasury Notes payable of
$403,430, compared to net cash provided by financing activities of $5,574,491
for the three months ended March 31, 1996, which included (1) distributions of
$666,622 paid to preferred stockholders; (2) principal payments on mortgages
and notes payable of $541,782; (3) proceeds from loans payable of $6,339,045;
(4) principal payments on loans payable of $873,388; and (5) amounts received
on U.S. Treasury Notes payable of $1,317,238.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Not Applicable.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Procedings
As previously reported, on January 30, 1996, an action was commenced in
the Court of Chancery of the State of Delaware (the "Delaware Court") against
the Company, its Board of Directors and Concord Assets Group, Inc. ("Concord").
Concord's executive officers and directors are also executive officers and
directors of the Company. The plaintiff, a Series A Preferred Stockholder of the
Company purporting to bring the action on behalf of himself and other Series A
Preferred Stockholders, brought the action, seeking, among other things, damages
from the Company, by reason of, among other things, (i) the Company's
acquisition and assumption in October 1995 (the "Acquisition") of certain
wraparound notes, wraparound mortgages and fee properties (collectively, the
"Assets") from certain affiliates of Concord, (ii) the transfer (the "Transfer")
to UPI on August 4, 1995 and October 30, 1995 of 16 of the Company's retail
properties (the "UPI Properties"), and (iii) the subsequent distribution of all
of the issued and outstanding shares of UPI's common stock to the Company's
Common Stockholders on a share-for-share basis and for no consideration (the
"Spin-off"). The plaintiff alleged that, in connection with the above, the
Company and its directors engaged in self-dealing, violated federal securities
laws and an injunction against such violations, and breached their fiduciary
duties to the Series A Preferred Stockholders. The plaintiff claimed, among
other things, that, as a result of such actions, the Company would not have
sufficient funds to pay dividends on the Series A Preferred Stock and that the
Assets were grossly inferior to the UPI Properties. The defendants moved to
dismiss the plaintiff's original complaint, and thereafter, the plaintiff
amended his complaint to allege further causes of action, including a claim of
rescission. The defendants moved to dismiss the amended complaint, and after
hearing arguments thereon, the Delaware Court dismissed the plaintiff's claim
for rescission of both the Transfer and the Spin-Off and reserved decision on
the defendants' motion to dismiss the plaintiff's claim for damages and other
relief. On December 9, 1996, the plaintiff requested that the Delaware Court
dismiss the amended complaint, and filed a purported new class action. On
January 14, 1997, the defendants filed a motion to dismiss or stay the purported
new class action, and the Delaware Court heard oral arguments on such motion on
April 15, 1997. On May 12, 1997, the Delaware Court issued a decision on such
motion and dismissed the plaintiff's breach of fiduciary duty and statutory
claims (although the Delaware Court has allowed the plaintiff to replead the
fiduciary duty claim), but did not dismiss the plaintiff's claim that the
Transfer and the Spin-Off did not comply with the Certificate of Designations
for the Series A Preferred Stock.
Item 6. Exhibits and Reports on Form 8-K.
(a) The following exhibit is included herein:
Exhibit 27 - Financial Data Schedule Article 5 included for
Electronic Data Gathering, Analysis, and Retrieval (EDGAR)
purposes only. This Schedule contains summary financial
information extracted from the consolidated balance sheets and
consolidated statements of revenues and expenses of the Company
as of and for the three month period ended March 31, 1997, and
is qualified in its entirety by reference to such financial
statements.
(b) No reports on form 8-K were filed during the quarter for which
this report is being filed.
<PAGE>
SIGNATURES
In accordance with 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.
MILESTONE PROPERTIES, INC.
--------------------------
(Registrant)
Date: May 9, 1997 /s/ Robert A. Mandor
--------------------
Robert A. Mandor
President and Chief Financial Officer
Date: May 9, 1997 /s/ Joan LeVine
---------------
Joan LeVine
Senior Vice President, Treasurer
and Controller
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 5,927,138
<SECURITIES> 47,159,386
<RECEIVABLES> 5,738,087
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 59,044,341
<PP&E> 24,660,732
<DEPRECIATION> 5,911,458
<TOTAL-ASSETS> 151,460,174
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0
30,567
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</TABLE>
