UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended: September 30, 1999
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: 0-6103
WATERMARK INVESTORS REALTY TRUST
(Exact name of registrant as specified in its charter.)
Texas 75-1372785
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
227 West Trade Street, Suite 2320, Charlotte, NC 28202 (Address
of principal executive offices)
(Zip Code)
(704)343-9334
(Registrant's telephone number, including area code)
- --------------------------------------------------------------------------------
(Former Name, Former Address and Former Fiscal Year, if changed)
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 [ ]
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practical date:
As of September 30, 1999, there were outstanding 542,413 shares of
beneficial interest of the registrant.
<PAGE>
PART I. - FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
The accompanying financial statements have not been audited by
independent accountants, but in the opinion of management, all adjustments
(which consist of normal recurring accruals) necessary for a fair presentation
of results of operations, financial position and cash flows at the dates and for
the periods indicated have been included.
WATERMARK INVESTORS REALTY TRUST
CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1999 1998 1999 1998
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Gain on sale of land
--- --- --- ---
-------------------------------------------------------------------------------------
Professional fees $1,471 $1,932 $9,749 $15,111
Property taxes --- --- --- 243
Interest expense 1,694 2,710 8,012 7,336
Other expenses 2,168 -0- 5,105 1,396
-------------------------------------------------------------------------------------
Total expense 5,333 4,642 22,866 24,086
-------------------------------------------------------------------------------------
Net earnings (loss) ($5,333) ($4,642) ($22,866) ($24,086)
=====================================================================================
Earnings (loss) per share
of beneficial interest ($0.01) ($0.01) ($0.04) ($0.04)
=====================================================================================
Shares of beneficial
interest used in computing
per share amounts 542,413 542,413 542,413 542,413
=====================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
WATERMARK INVESTORS REALTY TRUST
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1999 1998
----------------------------- ----------------------------
(Unaudited)
<S> <C> <C>
ASSETS
Real estate $168,588 $168,588
Less allowance for
estimated losses (168,588) (168,588)
----------------------------- ----------------------------
Cash 7,507 10,714
----------------------------- ----------------------------
TOTAL ASSETS $7,507 $10,714
============================= ============================
LIABILITIES AND SHAREHOLDERS'
DEFICIT
LIABILITIES
Note payable-related party $115,100 $105,100
Accrued liabilities 16,070 14,423
Accrued interest payable - related party 28,364 20,352
Unclaimed dividends 20,174 20,174
----------------------------- ----------------------------
$179,708 $160,049
----------------------------- ----------------------------
SHAREHOLDERS' DEFICIT
Shares of beneficial interest, $1.00 par
value, authorized 10,000,000 shares
with 542,413 issued and outstanding 196,235 196,235
Additional paid-in capital 44,205 44,205
Accumulated deficit (412,641) (389,775)
----------------------------- ----------------------------
$(172,201) $(149,335)
----------------------------- ----------------------------
TOTAL LIABILITIES AND
SHAREHOLDERS' DEFICIT $7,507 $10,714
============================= ============================
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
WATERMARK INVESTORS REALTY TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30
1999 1998
---------------------------- -------------------------
(unaudited)
<S> <C> <C>
Cash flow from operating activities:
Net earnings (loss) ($22,866) ($24,086)
Adjustment to reconcile net cash
provided by (used in) operating activities
Net change in accrued
liabilities 9,659 5,031
---------------------------- -------------------------
Net cash used in operations ($13,207) ($19,055)
---------------------------- -------------------------
Cash flow from financing:
Proceeds from note payable 10,000 19,750
---------------------------- -------------------------
Increase (decrease) in cash (3,207) 695
Cash
At beginning of period 10,714 74
---------------------------- -------------------------
At end of period $7,507 $769
============================ =========================
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
WATERMARK INVESTORS REALTY TRUST
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
SEPTEMBER 30, 1999
Note A - Basis of Presentation
The accompanying unaudited consolidated financial statements 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
Rule S-X. Accordingly, they do not include all of the information and notes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments considered necessary
for a fair presentation have been included. All such adjustments were of a
normal recurring nature. For further information refer to the financial
statements and notes thereto included as Item 14 to Corporation's annual report
on Form 10-K for the year ended December 31, 1998.
ITEM II. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources - At September 30, 1999, existing current
liabilities exceed available cash by $172,201.
Balance Sheet Changes - Assets decreased by $1,985 for the quarter. Accrued
liabilities increased by $3,342.
ITEM III. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
Management does not believe the Company has any exposure to market risk other
than the risks commonly associated with ownership of real property.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
5
<PAGE>
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
(27) Financial Data Schedule
b. Reports on Form 8-K
None.
6
<PAGE>
WATERMARK INVESTORS REALTY TRUST
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.
WATERMARK INVESTORS REALTY TRUST
Date: November 12, 1999 By: /s/ Michael S. Verruto
Michael S. Verruto
Trustee, Vice President
and Secretary
(An Authorized Officer and
Chief Accounting Officer)
7
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S
FINANCIAL STATEMENTS CONTAINED IN ITS REPORT ON FORM 10-Q FOR THE QUARTER
ENDING SEPTEMBER 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 7,507
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 7,507
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 7,507
<CURRENT-LIABILITIES> 179,708
<BONDS> 0
0
0
<COMMON> 196,235
<OTHER-SE> (368,436)
<TOTAL-LIABILITY-AND-EQUITY> 7,507
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 14,854
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,012
<INCOME-PRETAX> (22,866)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (22,866)
<EPS-BASIC> (0.04)
<EPS-DILUTED> (0.04)
</TABLE>
