<PAGE>
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 Period Ended June 30, 1996
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 0-23256
JAMESON INNS, INC.
------------------------------------------------------
(Exact name of registrant as specified in its Articles)
Georgia 58-2079583
- ----------------------------------- ----------------
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
8 Perimeter Center East, Suite 8050,
Atlanta, Georgia 30346-1603
- ----------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(770) 901-9020
---------------------------------------------------
(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 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
------ -------
Applicable Only to Corporate Issuers
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practical date - Common
Stock, $.10 Par Value - 7,320,565 shares outstanding as of July
31,1996.
<PAGE>
<PAGE>
Jameson Inns, Inc.
INDEX
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets as of June 30, 1996
(unaudited) and December 31, 1995 . . . . . . . . . . . . . . . 3
Condensed Consolidated Statements of Income for the Three
Month Periods Ended June 30, 1996 and 1995 (unaudited). . . . . 4
Condensed Consolidated Statements of Income for the Six
Month Periods Ended June 30, 1996 and 1995 (unaudited). . . . . 5
Condensed Consolidated Statements of Cash Flows for the Six
Month Periods Ended June 30, 1996 and 1995 (unaudited). . . . . 6
Notes to Condensed Consolidated Financial
Statements (unaudited) . . . . . . . . . . . . . . . . . . . . 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS . . . . . . . . . . . . . . 9
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K . . . . . . . . . 17
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . 18
EXHIBITS
<PAGE>
<PAGE>
ITEM 1. FINANCIAL STATEMENTS
Jameson Inns, Inc.
Condensed Consolidated Balance Sheets
June 30, December 31,
1996 1995
----------- ------------
(Unaudited)
ASSETS
Property and equipment, at cost $66,842,435 $57,369,657
Less accumulated depreciation (7,840,426) (6,589,753)
----------- ------------
59,002,009 50,779,904
Cash 230,801 235,254
Lease revenue receivable 783,604 495,855
Prepaid expenses 118,830 37,412
Deferred finance costs, net 923,203 1,213,396
Other assets 114,107 44,036
------------ ------------
$61,172,554 $52,805,857
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Mortgage notes payable $9,139,371 $30,213,904
Accounts payable 271,420 65,948
Accounts payable to affiliates 533,108 568,661
Accrued interest 15,773 151,182
Accrued property taxes 197,217 13,533
Other accrued liabilities 33,154 38,279
------------ ------------
10,190,043 31,051,507
Stockholders' equity:
Preferred stock, $1 par value,
100,000 shares authorized, no
shares issued and outstanding - -
Common stock, $.10 par value,
20,000,000 shares authorized,
7,315,045 (3,857,942 in 1995)
shares issued and outstanding 731,505 385,795
Contributed capital 51,277,997 22,395,546
Retained deficit (1,026,991) (1,026,991)
------------ ------------
Total stockholders' equity 50,982,511 21,754,350
------------ ------------
$61,172,554 $52,805,857
============ ============
See notes to condensed consolidated financial statements.
3
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<PAGE>
Jameson Inns, Inc.
Condensed Consolidated Statements of Income (unaudited)
For the Three Month Period Ended
June 30
--------------------------------
1996 1995
-------------- --------------
Lease revenue $2,427,100 $1,665,597
Property tax expense 100,289 73,902
Insurance expense 63,947 49,336
Depreciation 640,284 368,955
---------- ----------
1,622,580 1,173,404
Other expenses:
Interest expense, net of
capitalized amounts 275,736 354,945
General and administrative 180,193 221,186
--------- ---------
Income before extraordinary loss 1,166,651 597,273
Extraordinary loss 989,376 -
--------- ---------
Net income $177,275 $597,273
========== ==========
Funds from operations (Note 2) $1,806,935 $966,228
========== ==========
Per common and common
equivalent share:
Income before extraordinary loss $.18 $.10
========== ==========
Net income $.03 $.10
========== ==========
Dividends paid $.21 $.12
========== ==========
See notes to condensed consolidated financial statements.
4
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<PAGE>
Jameson Inns, Inc.
Condensed Consolidated Statements of Income (unaudited)
For the Six Month Period Ended
June 30
------------------------------
1996 1995
----------- -----------
Lease revenue $4,342,690 $2,897,792
Property tax expense 191,812 143,044
Insurance expense 114,130 92,217
Depreciation 1,250,673 791,667
---------- ----------
2,786,075 1,870,864
Other expenses:
Interest expense, net of
capitalized amounts 965,979 568,762
General and administrative 314,941 361,476
---------- ----------
Income before extraordinary loss 1,505,155 940,662
Extraordinary loss 989,376 -
---------- ----------
Net income $515,779 $940,662
========== ==========
Funds from operations (Note 2) $2,755,828 $1,732,329
========== ==========
Per common and common
equivalent share:
Income before extraordinary loss $.29 $.24
========== ==========
Net income $.10 $.24
========== ==========
Dividends paid $.42 $.38
========== ==========
See notes to condensed consolidated financial statements.
5
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<PAGE>
Jameson Inns, Inc.
Condensed Consolidated Statements of Cash Flows (unaudited)
For the Six Month
Period Ended
June 30
-----------------------
1996 1995
---------- ----------
Net income $ 515,779 $ 940,662
Adjustments to reconcile net income to
net cash provided by operating
activities:
Extraordinary item 989,376 -
Depreciation and amortization 1,307,245 823,424
Stock option and other expenses 36,623 36,986
Changes in assets and liabilities
increasing (decreasing) cash:
Lease revenue receivable (287,749) (147,951)
Prepaid expenses and other assets (151,489) (79,433)
Accounts payable 205,472 (113,080)
Accounts payable to affiliates (35,553) -
Accrued interest (135,409) 86,077
Accrued property taxes and
other accrued liabilities 178,559 113,661
----------- -----------
Net cash provided by operating activities 2,622,854 1,660,346
Investing activities
Additions to property and equipment (9,472,778) (8,403,393)
------------ -----------
Net cash used in investing activities (9,472,778) (8,403,393)
Financing activities
Common stock dividends paid (2,333,567) (1,295,087)
Preferred stock dividends paid - (489,949)
Proceeds from issuance of common stock 30,899,103 -
Proceeds from exercise of stock options 110,224 -
Proceeds from long-term debt 14,222,365 9,698,764
Payment of deferred finance costs (755,755) 318,752
Payments on long-term debt (35,296,899) (550,164)
------------ -----------
Net cash provided by financing 6,845,471 7,044,812
activities
Net increase(decrease) in cash (4,453) 301,765
Cash at beginning of period 235,254 353,387
----------- ----------
Cash at end of period $ 230,801 $ 655,152
=========== ==========
See notes to condensed consolidated financial statements.
6
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Jameson Inns, Inc.
Notes to Condensed Consolidated Financial Statements
1. Business and Basis of Financial Statements
Jameson Inns, Inc. (the "Company") is a self-administered real estate
investment trust ("REIT") headquartered in Atlanta which develops and
owns limited service hotel properties ("Inns") operating in the
southeastern United States under the trademark "The Jameson Inn." At
June 30, 1996, the Company had a total of 51 Inns either in operation
or under development, including 35 Inns in operation (1,717 available
rooms), 11 Inns under construction and contracts to acquire five
parcels of land on which additional Inns are expected to be
constructed during 1996. In addition, at that date, three of the Inns
in operation were undergoing 20-room expansions. Upon completion of
these projects, the Company expects to have 2,417 available rooms.
The accompanying unaudited condensed 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 Article 10 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 condensed consolidated balance sheet at December
31, 1995 has been derived from the audited consolidated financial
statements at that date. Operating results for the three month period
or six month period ended June 30, 1996 are not necessarily indicative
of the results that may be expected for the year ended December 31,
1996 or any other interim period. For further information, refer to
the consolidated financial statements and footnotes thereto included
in the annual report on Form 10-K for the year ended December 31,
1995.
2. Funds from Operations
Industry analysts generally consider funds from operations (FFO) an
appropriate measure of an equity REIT's performance. Effective the
second quarter of 1995, the Company adopted the March 1995
interpretation of the NAREIT definition of funds from operations which
is calculated (in the Company's case) as net income plus depreciation
and extraordinary items, if applicable. The following FFO calculations
for both periods follow the new interpretation. Other non-cash
expenses such as amortization and stock option expense have not been
added back in FFO. Funds from operations should not be considered an
alternative to net income as an indicator of the Company's operating
performance or to cash flow as a measure of liquidity.
7
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<PAGE>
2. Funds from Operations (continued)
Three months ended
June 30
-----------------------
1996 1995
--------- ---------
Net income $177,275 $597,273
Depreciation 640,284 368,955
Extraordinary loss 989,376 -
--------- ---------
Funds from operations, per March 1995
NAREIT interpretation $1,806,935 $966,228
========== =========
Six months ended
June 30
------------------------
1996 1995
---------- ----------
Net income $515,779 $940,662
Depreciation 1,250,673 791,667
Extraordinary loss 989,376 -
---------- ----------
Funds from operations, per March 1995
NAREIT interpretation $2,755,828 $1,732,329
========== ==========
3. Stockholders' Equity
On April 22, 1996 and May 6, 1996, the Company completed the sale of
3,000,000 and 375,000 newly issued shares, respectively, of common
stock at $10 per share. Net proceeds of approximately $30,837,500
were used to repay certain existing mortgage indebtedness at that
date. Simultaneous to the closing of the equity offering, the Company
modified its lines of credit and certain long-term mortgages into new
lines of credit with terms more favorable to the Company.
On April 17, 1996, the Company and Thomas W. Kitchin, its Chairman,
Chief Executive Officer and President agreed to amend the Employment
Agreement with Mr. Kitchin to cancel his stock appreciation rights
effective March 31, 1996. The Company's Board of Directors
unanimously approved the amendment as being in the best interest of
the Company.
8
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the
Jameson Inns, Inc. condensed consolidated financial statements and
notes thereto appearing elsewhere in this quarterly report.
Jameson Inns, Inc. (the "Company") is a self-administered real estate
investment trust ("REIT") headquartered in Atlanta which develops and
owns limited service hotel properties ("Inns") operating in the
southeastern United States under the trademark "The Jameson Inn." At
June 30, 1996, the Company had a total of 51 Inns either in operation
or under development, including 35 Inns in operation (1,717 available
rooms), 11 Inns under construction and contracts to acquire five
parcels of land on which additional Inns are expected to be
constructed during 1996. In addition, at that date, three of the Inns
in operation were undergoing 20-room expansions. Upon completion of
these projects, the Company expects to have 2,417 available rooms.
The Company's primary source of revenue is rent payments by Jameson
Operating Company (the "Operator") from leases under a master lease
(the "Lease") covering all of the Inns in operation. The expenses of
the Company consist of property taxes, insurance, corporate overhead,
compensation expense related to certain stock options, interest on
mortgage debt and depreciation of the Inns. The Lease provides for the
payment of Base Rent and Percentage Rent. For the quarter ended June
30, 1996, Base Rent and Percentage Rent in the aggregate amount of
$2.4 million was earned by the Company. The principal determinant of
Percentage Rent is Room Revenues of the Inns. Therefore, management
believes that a review of the historical performance of the operations
of the operating Inns, particularly with respect to occupancy, average
daily rate ("ADR") and revenue per available room ("REVPAR") is
appropriate for understanding the Lease revenue.
9
<PAGE>
<PAGE>
The following table shows certain historical financial and other
information for the periods indicated.
Three Month Period
Ended June 30
----------------------
1996 1995
-------- --------
Occupancy rate 72.52% 70.33%
ADR $45.14 $42.99
REVPAR $32.74 $30.24
Room Revenues (000 s) $5,164 $3,309
Room nights available 154,017 106,765
Room nights occupied 111,698 75,085
Operating Inns (at period end) 35 26
Rooms available (at period end) 1,717 1,241
Six Month Period
Ended June 30
----------------------
1996 1995
-------- --------
Occupancy rate 68.62% 69.31%
ADR $44.59 $41.97
REVPAR $30.60 $29.09
Room Revenues (000 s) $9,264 $5,905
Room nights available 294,571 197,679
Room nights occupied 202,135 137,010
Operating Inns (at period end) 35 26
Rooms available (at period end) 1,717 1,241
10
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<PAGE>
Results of Operations
Comparison of the Three Months Ended June 30, 1996 to the Three Months
Ended June 30, 1995.
Lease revenue for the Company for the three month period ended June
30, 1996 increased 41% to $2.4 million as compared to $1.7 million for
the same period in 1995. The increase was due to the increase in the
Operator's Room Revenues, partially offset by the effect of a change
in the Percentage Rent formula under the Lease Amendment effective
July 1, 1995.
The number of room nights available increased from 106,765 in 1995 to
154,017 in 1996, or 44%, due to the opening from January 1, 1995
through June 30, 1996 of 17 new 40-room Inns, eight 20-room expansions
of existing Inns and one 16-room expansion of an existing Inn. The
occupancy rate increased from 70.33% during the second quarter of 1995
to 72.52% during the second quarter of 1996. In addition, ADR
increased 5% from $42.99 in 1995 to $45.14 in 1996. As a result of
these three factors, second quarter Room Revenues rose 58%, from $3.3
million for 1995 to $5.2 million in 1996. Same Inn Room Revenues for
1996 versus 1995 grew to $3.2 million from $2.9 million, or 10%. The
growth is due to an increase in ADR from $43.02 to $44.88 for these
Inns, an increase in room nights available (due to expansions of
certain of these Inns) from 89,365 to 97,330, and an increase in the
occupancy rate from 72.36% to 72.65% for these Inns for 1996 compared
to 1995.
General and administrative expense includes overhead charges for
management, accounting and legal services for the corporate home
office. General and administrative expense for the three months ended
June 30, 1996 was $180,193, as compared to $221,186 for the three
months ended June 30, 1995. The 1996 expense is lower than 1995 due
to a decrease in third party accounting, legal and marketing services.
Property taxes and insurance expenses totaled $164,236 for the three
month period ended June 30, 1996 compared to $123,238 for the same
period in 1995. The increase is attributable to the increase in
number of Inns.
11
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<PAGE>
Interest expense decreased from $354,945 for the three-month period
ended June 30, 1995 to $275,736 for the same period ended June 30,
1996, due to the greater amount of principal indebtedness outstanding
in the second quarter of 1995. Debt balances were lower in 1996 due
to the $30.8 million payoff in April 1996 with the equity offering
proceeds. As a result of the early extinguishment of this debt, the
Company had a loss of $989,376 comprised of the write-off of deferred
finance costs, which is reflected as an extraordinary item. Interest
expense amounts exclude interest capitalized in the cost of new Inn
development.
Depreciation expense increased from $368,955 to $640,284 for the three
month periods ended June 30, 1995 and 1996, respectively, due to an
increase in the number of operating Inns.
Comparison of the Six Months Ended June 30, 1996 to the Six Months
Ended June 30, 1995.
Lease revenue for the Company for the six month period ended June 30,
1996 increased 48% to $4.3 million as compared to $2.9 million for the
same period in 1995. The increase was due to the increase in the
Operator's Room Revenues, partially offset by the effect of a change
in the Percentage Rent formula under the Lease Amendment effective
July 1, 1995.
The number of room nights available increased from 197,679 in 1995 to
294,571 in 1996, or 49%, due to the opening from January 1, 1995
through June 30, 1996 of 17 new 40-room Inns, eight 20-room expansions
of existing Inns and one 16-room expansion of an existing Inn. The
occupancy rate decreased from 69.31% to 68.62% for 1995 and 1996,
respectively. However, ADR increased 6% from $41.97 in 1995 to $44.59
in 1996. As a result of these three factors, Room Revenues rose 58%
from $5.9 million for 1995 to $9.3 million in 1996. Same Inn Room
Revenues for 1996 versus 1995 grew to $6.0 million from $5.3 million
or 13%. The growth is due to an increase in ADR from $41.87 to $44.38
for these Inns and an increase in room nights available (due to
expansions of certain of these Inns) from 175,439 to 192,759,
partially offset by a decrease in the occupancy rate from 70.47% to
67.75% for these Inns for 1996 compared to 1995. The decrease in the
overall occupancy rate of the Inns is attributable primarily to (i)
the expansion of several high occupancy Inns which then experienced
lower occupancy rates because of the additional rooms available in the
marketplace and (ii) more severe weather conditions in the first
quarter of 1996 versus 1995.
12
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<PAGE>
General and administrative expense includes overhead charges for
management, accounting and legal services for the corporate home
office. General and administrative expense for the six months ended
June 30, 1996 was $314,941, as compared to $361,476 for the six months
ended June 30, 1995. The 1996 expense is lower than 1995 due to a
decrease in third party accounting, legal and marketing services.
Property taxes and insurance expenses totaled $305,942 for the six
month period ended June 30, 1996 compared with $235,261 for the same
period in 1995. The increase is attributable to the increase in the
number of Inns.
Interest expense increased from $568,726 for the six month period
ended June 30, 1995 to $965,979 for the same period ended June 30,
1996, due to the greater amount of average principal indebtedness
outstanding during 1996 prior to the April 1996 payoff, combined with
higher average interest rates in 1996. The additional debt was
incurred for the development of additional Inns and expansion of
existing Inns, however $30.8 million was repaid in April 1996 with the
equity offering proceeds. As a result of the early extinguishment of
this debt, the Company had a loss of $989,376 comprised of the write-
off of deferred finance costs, which is reflected as an extraordinary
item. Interest expense amounts exclude capitalized interest in the
cost of new Inn development.
Depreciation expense increased from $791,667 to $1,250,673 for the six
month periods ended June 30, 1995 and 1996, respectively, due to an
increase in the number of operating Inns.
13
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<PAGE>
Liquidity and Capital Resources
On April 22, 1996 and May 6, 1996, the Company completed the sale of
3,000,000 and 375,000 newly issued shares, respectively, of common
stock at $10 per share. Net proceeds of approximately $30,837,500
were used to repay certain existing mortgage indebtedness at those
dates. Simultaneous to the closing of the equity offering, the
Company modified its existing lines of credit and certain long-term
mortgages into new line of credit facilities. In the aggregate, the
modified mortgages provide the Company with new lines of credit of
approximately $28 million. The new lines of credit have an interest
rate of 25 basis points over the prime rate as published in the Wall
Street Journal, which is currently 8.25%. The interest rate adjusts
annually. The average rate on the mortgages repaid with the proceeds
of the offering was 9.8%. Two years from the closing date of the loan
modification, the lines of credit convert to 15-year amortizing loans
with ten-year call provisions. There are no prepayment penalties for
early extinguishment of the debt balances. As of June 30, 1996, the
Company had five Inns unencumbered and available to use as collateral
for any additional financing, in addition to approximately $33.6
million in available credit under its lines of credit and construction
loans. For most new Inns developed by the Company, a construction
loan for approximately $1.05 million has been obtained usually from
community banks in the general locale of where the Inn is located.
The balance of approximately $200,000 to complete the construction
project is funded with draws on other lines of credit. The
construction loan converts to a long-term mortgage financing after
completion of the Inn without any further action by the Company. As
of June 30, 1996, the Company had $9.1 million in outstanding debt.
The Company expects to continue to develop additional Inns as suitable
opportunities arise. The Company currently is constructing new
40-room Inns in Commerce, Conyers, LaGrange, and Oakwood, Georgia;
Decatur and Greenville, Alabama; Forest City, North Carolina; and
Georgetown, Seneca, Simpsonville and Union, South Carolina. The total
turnkey construction price for the Inns currently under construction
is $13.7 million, of which approximately $4.2 million had been
expended at June 30, 1996. The Company is also currently expanding
Inns in Albany, Georgia, Florence, Alabama and Greenwood, South
Carolina and may in the future expand additional Inns if management
determines that sufficient market demand exists and financing is
available for any such expansion. The Company currently has five
additional land sites under contract, subject to varying
contingencies.
As with most real estate investments, the Company's investments in the
Inns are relatively illiquid. As a result, the ability of the Company
to sell or otherwise dispose of any Inn to provide liquidity may be
very limited.
14
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<PAGE>
The Operator
The Company seeks to enhance Lease revenue by working in a
collaborative manner with the Operator. Presently, the Operator also
has an exclusive relationship with the Company in that the Operator
does not manage any hotel properties other than the Inns. The Company
believes this exclusive relationship ensures that the Company's and
the Operator's interests are well-aligned. While the Company does not
control the operations of the Operator or the day-to-day operation of
the Inns, the two companies work together to enhance both occupancy
and ADR. The Lease formula allows the Company to benefit from
increases in Room Revenues, regardless of the mix between occupancy
and ADR.
The following table summarizes the unaudited financial results of the
Operator. The comparison of revenues of the Operator between the two
periods is the same as that described above for the Company.
Three Month Period
Ended June 30
--------------------------
1996 1995
------------ ------------
Room revenues as defined by lease $5,163,930 $3,309,081
Operating expenses (2,648,806) (1,801,949)
Lease expense to Jameson Inns, Inc. (2,427,100) (1,665,597)
------------ ------------
Net income (loss) $ 88,024 $ (158,465)
============ ============
Six Month Period
Ended June 30
-------------------------
1996 1995
----------- -----------
Room revenues as defined by lease $9,263,534 $5,904,980
Operating expenses (4,830,764) (3,138,125)
Lease expense to Jameson Inns, Inc. (4,342,690) (2,897,792)
----------- -----------
Net income (loss) $ 90,080 $ (130,937)
=========== ===========
15
<PAGE>
<PAGE>
Distributions to Stockholders
The table below sets forth, for the periods indicated, the cash
distributions declared per share for the common stock since January 1,
1995.
First Quarter, 1995 $ .19*
Second Quarter, 1995 .21
Third Quarter, 1995 .21
Fourth Quarter, 1995 .21
First Quarter, 1996 .21
Second Quarter, 1996 .22**
* Includes $.07 declared for the period January 1 to February 2, 1995
and $.12 declared for the period February 3 to March 31, 1995.
** On July 25, 1996, the Company declared this dividend, which is
payable on August 22, 1996 to shareholders of record on August 5,
1996.
16
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<PAGE>
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
Exhibits
10.1 Loan modification agreement between Jameson Inns, Inc.
and Empire Financial Services, Inc. dated June 30, 1996
for loan on Waynesboro, Georgia property
10.2 List of documents substantially similar to 10.1
10.3 Adjustable rate note from Jameson Inns, Inc. to Empire
Financial Services, Inc. dated June 30, 1996 for
Waynesboro, Georgia mortgage
10.4 List of documents substantially similar to 10.3
11.1 Earnings per Share
27.1 Financial Data Worksheet
The Company filed one report on Form 8-K dated April 17, 1996 during
the three months ended June 30, 1996 related to the cancellation of
stock appreciation rights held by Thomas W. Kitchin, president of the
Company.
17
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Jameson Inns, Inc.
(Registrant)
Dated: August 5, 1996 By: /s/ Thomas W. Kitchin
-------------------------
Thomas W. Kitchin
President and Chief
Executive Officer
Dated: August 5, 1996 By: /s/ Craig R. Kitchin
-------------------------
Craig R. Kitchin
Chief Financial Officer
(Principal Financial Officer)
18
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<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Page
10.1 Loan modification agreement between Jameson Inns, Inc.
and Empire Financial Services, Inc. dated June 30, 1996
for loan on Waynesboro, Georgia property
10.2 List of documents substantially similar to 10.1
10.3 Adjustable rate note from Jameson Inns, Inc. to Empire
Financial Services, Inc. dated June 30, 1996 for
Waynesboro, Georgia mortgage
10.4 List of documents substantially similar to 10.3
11.1 - Statement Re: Per Share Earnings ....................
27.1 - Financial Data Worksheet .............................
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000914373
<NAME> JAMESON INNS INC
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1996
<PERIOD-END> JUN-30-1996 JUN-30-1996
<CASH> 230,801 230,801
<SECURITIES> 0 0
<RECEIVABLES> 783,604 783,604
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 1,247,342 1,247,342
<PP&E> 66,842,435 66,842,435
<DEPRECIATION> (7,840,426) (7,840,426)
<TOTAL-ASSETS> 61,172,554 61,172,554
<CURRENT-LIABILITIES> 1,050,672 1,050,672
<BONDS> 9,139,371 9,139,371
0 0
0 0
<COMMON> 731,505 731,505
<OTHER-SE> 50,251,006 50,251,006
<TOTAL-LIABILITY-AND-EQUITY> 61,172,554 61,172,554
<SALES> 2,427,100 4,342,690
<TOTAL-REVENUES> 2,427,100 4,342,690
<CGS> 164,236 305,942
<TOTAL-COSTS> 164,236 305,942
<OTHER-EXPENSES> 180,193 314,941
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 275,736 965,979
<INCOME-PRETAX> 1,166,651 1,505,155
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 1,166,651 1,505,155
<DISCONTINUED> 0 0
<EXTRAORDINARY> 989,376 989,376
<CHANGES> 0 0
<NET-INCOME> 177,275 515,779
<EPS-PRIMARY> .03 .10
<EPS-DILUTED> .03 .10
</TABLE>
<PAGE>
EXHIBIT 10.1
MOORE & MANGUM
P.O. BOX 1327, MILLEDGEVILLE, GEORGIA 31061
LOAN MODIFICATION AGREEMENT
STATE OF GEORGIA
COUNTY OF DEKALB
THIS AGREEMENT made and entered into this 30th day of June,
1996, by and between JAMESON INNS, INC., (hereinafter "Jameson") and
EMPIRE FINANCIAL SERVICES, INC., 121 Executive Parkway, Milledgeville,
Georgia 31061, (hereinafter "Empire").
WHEREAS, on November 10, 1995, Empire made a loan to Jameson
in the principal sum of ONE MILLION FIFTY THOUSAND AND NO/100 DOLLARS
($1,050,000.00), secured by certain real property located in Burke
County, Georgia, more fully described on Exhibit A attached hereto;
and
WHEREAS, by agreement between Empire and Jameson dated April
17, 1996, the parties expressed their intention to modify said loan so
that it will operate as a secured line of credit; and
WHEREAS, a portion of said original indebtedness remains
unpaid; and
WHEREAS, Empire and Jameson intend, and Jameson hereby
agrees, that all collateral securing said original loan shall continue
to secure said loan, as modified.
NOW THEREFORE, for and in consideration of the sum of One
Dollar ($1.00) in hand paid, the receipt and sufficiency of which is
hereby acknowledged and the further consideration of the line of
credit being extended this day by Empire to Jameson, the undersigned
agrees as follows:
(1) All terms, conditions, and obligations of that certain Deed to
Secure Debt from Jameson to Empire dated November 10, 1995, of
record in Deed Book 221, Page 513, records of the Clerk of
Superior Court of Burke County, Georgia, are incorporated by
reference herein.
<PAGE>
<PAGE>
(2) Said loan, as modified, is and shall continue to be secured by
the real property, furniture, fixtures, equipment, rents, fees
and income belonging or accruing to Jameson as fully and
completely as same secured said original loan. Jameson further
agrees that the said loan and this modification thereof shall, in
addition to all collateral referenced herein, be secured by any
and all rights Jameson may have in and to fees, charges, accounts
or other payments for the use or occupancy of rooms in the motel
located on the property or properties described on Exhibit A
hereto, and by its rights to receive payments derived from fees,
charges, and accounts for use or occupancy of said motel rooms
under the operating lease with Jameson Operating Company dated
February 3, 1994, as amended.
(3) This Agreement and the extension of a line of credit made
pursuant hereto, as well as all documents executed in connection
herewith, specifically including a Note of even date, shall not
constitute a release, an accord and satisfaction or novation, nor
operate in any fashion so as to discharge, limit, waive, or
impair any obligation of Jameson as set forth in the original
Security Deed, Security Agreement, Fee and Income Assignment or
other document(s) evidencing or securing said original loan dated
November 10, 1995 or impair or limit any rights of Empire
contained therein. Georgia Intangible Tax on the maximum amount
of new or additional funds that could be extended under the line
of credit ($1,050,000.00) is being paid with the filing of this
instrument. The final maturity date for this loan, as modified,
is June 1, 2006.
(4) By the execution of this Loan Modification Agreement, Jameson
expressly confirms its obligations as contained in all loan
documents dated November 10, 1995, evidencing or securing the
original indebtedness, except to the extent that same are
specifically modified herein or in a Note of even date herewith.
(5) If it is determined that any person or entity other than Empire
shall have a lien, encumbrance, or claim of any type which has a
legal priority over any term of this Agreement, the original Note
and Security Instruments shall be severable from this Agreement
and separately enforceable from the terms thereof as modified
hereby in accordance with their original terms, and Empire shall
maintain legal or equitable priorities which were in existence
before the date of execution of this Agreement. It is understood
by and is the intention of the parties hereto that any legal or
equitable priorities of Empire over any party which were in
existence before the date of execution of this Agreement shall
remain in effect after the execution of this Agreement.
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this instrument to
be executed, under seal, by duly authorized corporate officers.
JAMESON INNS, INC. (SEAL)
BY: Thomas W. Kitchin
Its President
ATTEST: Steven A. Curlee
Its Secretary
Signed, sealed and delivered
on the 30th day of June, 1996.
- -----------------------------
Unofficial Witness
- -----------------------------
Notary Public, -----------
Commission Expiration Date:
(SEAL)
<PAGE>
EXHIBIT 10.2
SCHEDULE OF DOCUMENTS SUBSTANTIALLY SIMILAR TO EXHIBIT 10.1:
1. LOAN MODIFICATION AGREEMENT DATED MAY 28, 1996 BETWEEM JAMESON
INNS, INC. AND EMPIRE FINANCIAL SERVICES, INC. FOR CALHOUN, GEORGIA.
2. LOAN MODIFICATION AGREEMENT DATED MAY 13, 1996 BETWEEN JAMESON
INNS, INC. AND EMPIRE FINANCIAL SERVICES, INC. FOR JESUP, GEORGIA.
3. LOAN MODIFICATION AGREEMENT DATED JUNE 30, 1996 BETWEEN JAMESON
INNS, INC. AND EMPIRE FINANCIAL SERVICES, INC. FOR WAYNESBORO, GEORGIA.
4. LOAN MODIFICATION AGREEMENT DATED MAY 28, 1996 BETWEEN JAMESON
INNS, INC. AND EMPIRE FINANCIAL SERVICES, INC. FOR CARROLLTON, GEORGIA.
5. LOAN MODIFICATION AGREEMENT DATED MAY 28, 1996 BETWEEN JAMESON
INNS, INC. AND EMPIRE FINANCIAL SERVICES, INC. FOR CARROLLTON, GEORGIA.
6. LOAN MODIFICATION AGREEMENT DATED MAY 28 , 1996 BETWEEN JAMESON
INNS, INC. AND EMPIRE FINANCIAL SERVICES, INC. FOR BRUNSWICK, GEORGIA.
7. LOAN MODIFICATION AGREEMENT DATED MAY 28, 1996 BETWEEN JAMESON
INNS, INC. AND EMPIRE FINANCIAL SERVICES, INC. FOR BRUNSWICK, GEORGIA.
8. LOAN MODIFICATION AGREEMENT DATED MAY 13, 1996 BETWEEN JAMESON
INNS, INC. AND EMPIRE FINANCIAL SERVICES, INC. FOR WAYCROSS, GEORGIA.
9. LOAN MODIFICATION AGREEMENT DATED MAY 13, 1996 BETWEEN JAMESON
INNS, INC. AND EMPIRE FINANCIAL SERVICES, INC. FOR BAINBRIDGE, GEORGIA.
10. LOAN MODIFICATION AGREEMENT DATED MAY 13, 1996 BETWEEN JAMESON
INNS, INC. AND EMPIRE FINANCIAL SERVICES, INC. FOR BAINBRIDGE, GEORGIA.
11. LOAN MODIFICATION AGREEMENT DATED MAY 13, 1996 BETWEEN JAMESON
INNS, INC. AND EMPIRE FINANCIAL SERVICES, INC. FOR VALDOSTA, GEORGIA.
12. LOAN MODIFICATION AGREEMENT DATED MAY 13, 1996 BETWEEN JAMESON
INNS, INC. AND EMPIRE FINANCIAL SERVICES, INC. FOR VALDOSTA, GEORGIA.
<PAGE>
<PAGE>
13. LOAN MODIFICATION AGREEMENT DATED JUNE 30, 1996 BETWEEN JAMESON
INNS, INC. AND EMPIRE FINANCIAL SERVICES, INC. FOR EASLEY, SOUTH CAROLINA.
14. LOAN MODIFICATION AGREEMENT DATED MAY 28, 1996 BETWEEN JAMESON
INNS, INC. AND EMPIRE FINANCIAL SERVICES, INC. FOR DOUGLAS, GEORGIA.
15. LOAN MODIFICATION AGREEMENT DATED JUNE 30, 1996 BETWEEN JAMESON
INNS, INC. AND EMPIRE FINANCIAL SERVICES, INC. FOR GREENWOOD, SOUTH CAROLINA.
16. LOAN MODIFICATION AGREEMENT DATED MAY 13, 1996 BETWEEN JAMESON
INNS, INC. AND EMPIRE FINANCIAL SERVICES, INC. FOR COVINGTON, GEORGIA;
THOMASTON, GEORGIA; WINDER, GEORGIA.
17. LOAN MODIFICATION AGREEMENT DATED MAY 13, 1996 BETWEEN JAMESON
INNS, INC. AND EMPIRE FINANCIAL SERVICES, INC. FOR COVINGTON, GEORGIA;
THOMASTON, GEORGIA; WINDER, GEORGIA.
18. LOAN MODIFICATION AGREEMENT DATED MAY 28, 1996 BETWEEN JAMESON
INNS, INC. AND EMPIRE FINANCIAL SERVICES, INC. FOR AMERICUS, GEORGIA;
HARTWELL, GEORGIA; WASHINGTON, GEORGIA; STATESBORO, GEORGIA; ANDERSON,
SOUTH CAROLINA.
19. LOAN MODIFICATION AGREEMENT DATED MAY 28, 1996 BETWEEN JAMESON
INNS, INC. AND EMPIRE FINANCIAL SERVICES, INC. FOR AMERICUS, GEORGIA;
HARTWELL, GEORGIA; WASHINGTON, GEORGIA; STATESBORO, GEORGIA; ANDERSON,
SOUTH CAROLINA.
20. LOAN MODIFICATION AGREEMENT DATED MAY 28, 1996 BETWEEN JAMESON
INNS, INC. AND EMPIRE FINANCIAL SERVICES, INC. FOR AMERICUS, GEORGIA;
HARTWELL, GEORGIA; WASHINGTON, GEORGIA; STATESBORO, GEORGIA; ANDERSON,
SOUTH CAROLINA.
<PAGE>
EXHIBIT 10.3
ADJUSTABLE RATE NOTE
(LINE OF CREDIT)
ATLANTA, GEORGIA
$1,050,000.00 June 30, 1996
FOR VALUE RECEIVED, the undersigned promises to pay to the
order of EMPIRE FINANCIAL SERVICES, INC., at its main office in
Milledgeville, Georgia, or at such place as the holder may designate,
the principal sum of ONE MILLION FIFTY THOUSAND AND NO/100 DOLLARS,
($1,050,000.00) (or so much of the said principal sum as is advanced
by Noteholder), plus interest from date on that part of the
outstanding principal which has not been paid. [The principal sum
represents the aggregate of the outstanding balance of the
indebtedness owed to Empire Financial Services, Inc. by virtue of a
previous Note dated November 10, 1995, plus such additional sums as
may be advanced hereunder].
Beginning on the date of this Note, the undersigned will pay
interest at a rate of eight and one-half (8.50%) per cent per annum
(the "Initial Interest Rate"). Interest shall accrue from the date
hereof on all monies now outstanding from said previous Note and all
monies disbursed from closing, and shall accrue from the date of each
disbursement for all monies hereafter advanced. For the period from
June 30, 1996 through May 31, 1998 (the "Interest Only Period") the
undersigned will pay only accrued interest. During the Interest Only
Period, Borrower shall pay, monthly, on or before the 15th day of each
month, all interest accumulated during the previous calendar month on
monies disbursed, with the first payment due July 15, 1996. All such
interest shall be fully paid on or before June 15, 1998. Between the
first and fifth day of each month, Noteholder will notify Borrower of
the amount of interest due on the 15th day of that month.
The interest rate will be adjusted once during the Interest
Only Period. Beginning on the 1st. day of July, 1997 (the "Interest
Only Adjustment Date"), and continuing until the first "Permanent Loan
Adjustment Date", the interest rate applicable to the total of funds
outstanding will equal the "Prime Rate" plus one-quarter (.25%) per
cent. The term "Prime Rate" has the same meaning and will be calculated
in the same manner as hereinafter provided for the Amortized Loan.
In the event the loan is not paid off during the Interest
Only Period, then, beginning with the payment due on July 1, 1998,
(the "Loan Amortization Date"), Borrower shall make monthly payments
of principal and interest calculated on the basis of a fifteen (15)
year amortization of the total principal balance outstanding at the
end of the Interest Only Period at the interest rate then in effect.
<PAGE>
<PAGE>
Beginning on the first day of July, 1998, and on that day of
the month every twelve (12) months thereafter (the "Permanent Loan
Adjustment Date"), the interest rate applicable to the principal
balance then outstanding will equal the "Prime Rate" plus one-quarter
(.25%) per cent. Each annually adjusted interest rate will be in
effect from the Loan Adjustment Date (July 1st) through June 30th of
the following year, with monthly payments, at the adjusted rate, to be
paid on the first day of each month beginning on the first day of
August and continuing through the payment due on the first day of July
of the following year.
For purposes of this Note, the term "Prime Rate" shall mean
the interest rate published in the Wall Street Journal, Eastern
Edition, identified therein as the "Prime Rate" and currently
described as "the base rate on corporate loans posted by at least 75%
of the nation's 30 largest banks". The "Prime Rate" published on the
last publication date prior to the "Interest Only Adjustment Date" and
the last publication date prior to each "Permanent Loan Adjustment
Date" shall be the index for interest rate adjustments. In the event
that the Wall Street Journal abandons the practice of publishing the
Prime Rate, the Noteholder will designate a comparable reference or
index which shall thereafter be the Prime Rate for this Note. The
Noteholder will round the amount of the change to the nearest one-
eighth (1/8) of one (1) percentage point. However, the interest rate
for this loan shall never be less than seven (7.0%) per cent per annum
nor greater than thirteen (13.0%) per annum. Noteholder will notify
Borrower of the adjustment to be made and such notification, even if
given after the due date of the next monthly installment, shall apply
to all monthly installments due after each adjustment date. The
amount of the monthly payments due under said adjusted interest rate
shall be the amount needed to completely amortize the principal due on
the adjustment date by the 1st day of June, 2013, if such payments
were to continue until that date. Monthly payments shall continue
until all of said interest and principal have been paid in full except
that any balance remaining unpaid on the 1st day of June, 2006, shall
be due and payable, with all accrued interest thereon, on that date.
<PAGE>
<PAGE>
Each payment shall be applied first to accrued interest and
the residue to principal (except as heretofore specified). Any amount
may be prepaid on this Note at any time without premium or fee,
provided that prepayment of only a portion of the balance due on this
Note shall be applied to the end of the Note and the monthly payments
shall continue to be due without interruption. Time is of the essence
of this contract. Lender may collect a late charge of .05 cents for
each One ($1.00) Dollar of each principal and interest payment, with a
minimum charge of Five dollars, for each such payment fifteen (15)
days or more in arrears to cover the extra expense involved in
handling delinquent payment. In the event (a) of a default in the
payment of principal and interest as stipulated herein (including,
without limitation, non-payment upon maturity) or default in any other
monetary obligation of the undersigned which such default(s) continue
for a period of five (5) days after notice of such default by
Noteholder, or (b) upon failure of the undersigned to comply with any
other conditions or covenants contained in this Note or any
instrument(s) securing it which such default(s) continue for a period
of fifteen (15) days after notice of such default by Noteholder or (c)
upon the liquidation or dissolution of a corporate or partnership
Borrower, endorser or guarantor then, and in any such event(s), the
principal indebtedness evidenced hereby, all accrued interest and any
other sums advanced hereunder or pursuant to any other loan documents
shall, at the option of Noteholder and, without further notice to the
undersigned, at once become due and payable and may be collected
forthwith, regardless of the stipulated date of maturity. No omission
on the part of Noteholder to exercise such option, when entitled to do
so, shall be construed a waiver of such right. Upon the happening of
any event of default the entire unpaid principal balance shall bear
interest at the contract rate then in effect until the entire amounts
in default have been paid by the undersigned. If this Note is
collected by law or through an attorney at law, the undersigned shall
pay all costs of collection, including reasonable attorney's fees.
The undersigned (whether maker, endorser, surety, guarantor, or other
party hereto) severally waives demand, protest and notice of demand,
protest and non-payment. It is agreed that this Note may be renewed
or extended from time to time, in whole or in part, without the
consent of or notice to any endorser, maker, guarantor, surety, or
other party hereto and without affecting or lessening the liability of
any such person. The powers granted herein are coupled with an
interest, and are irrevocable by death or otherwise. This Note is the
joint and several obligation of all makers, sureties, guarantors,
endorsers and other parties hereto, and shall be binding upon them,
their heirs, personal representatives and assigns. In this Note and
any instrument securing it, the singular shall include the plural, and
the masculine shall include the feminine and neuter.
<PAGE>
<PAGE>
If from any circumstances whatsoever, fulfillment of any
provision of this Note or of any other instrument securing the
indebtedness evidenced hereby, at the time performance of such
provision shall be due, shall involve transcending the limit of
validity presently prescribed by any applicable usury statute or any
other applicable law, with regard to obligations of like character and
amount, then ipso facto, the obligation to be fulfilled shall be
reduced to the limit of such validity, so that in no event shall any
exaction be possible under this Note or under any other instrument
securing the indebtedness evidenced hereby, that is in excess of the
current limit of such validity, but such obligation shall be fulfilled
to the limit of such validity.
This Note is secured by a Security Deed, Assignment of
Operating Lease, Assignment of Fees and Income and Security Agreement
dated November 10, 1995 executed by the undersigned in favor of Empire
Financial Services, Inc.
WITNESS the hand and seal of the undersigned.
JAMESON INNS, INC. (SEAL)
BY: Thomas W. Kitchin
Its President
ATTEST: Steven A. Curlee
Its Secretary
<PAGE>
EXHIBIT 10.4
SCHEDULE OF DOCUMENTS SUBSTANTIALLY SIMILAR TO EXHIBIT 10.3:
1. ADJUSTABLE RATE NOTE DATED MAY 28, 1996 IN THE AMOUNT OF
$1,500,000.00 FROM JAMESON INNS, INC. TO EMPIRE FINANCIAL SERVICES,
INC. FOR LOAN SECURED BY PROPERTY IN CALHOUN, GEORGIA.
2. ADJUSTABLE RATE NOTE DATED MAY 13,1996 IN THE AMOUNT OF
$1,600,000.00 FROM JAMESON INNS, INC. TO EMPIRE FINANCIAL SERVICES,
INC. FOR LOAN SECURED BY PROPERTY IN JESUP, GEORGIA.
3. ADJUSTABLE RATE NOTE DATED JUNE 30, 1996 IN THE AMOUNT OF
$1,050,000.00 FROM JAMESON INNS, INC. TO EMPIRE FINANCIAL SERVICES,
INC. FOR LOAN SECURED BY PROPERTY IN WAYNESBORO, GEORGIA.
4. ADJUSTABLE RATE NOTE DATED MAY 28, 1996 IN THE AMOUNT OF
$1,000,000.00 FROM JAMESON INNS, INC. TO EMPIRE FINANCIAL SERVICES,
INC. FOR LOAN SECURED BY PROPERTY IN CARROLLTON, GEORGIA.
5. ADJUSTABLE RATE NOTE DATED MAY 28, 1996 IN THE AMOUNT OF
$500,000.00 FROM JAMESON INNS, INC. TO EMPIRE FINANCIAL SERVICES, INC.
FOR LOAN SECURED BY PROPERTY IN CARROLLTON, GEORGIA.
6. ADJUSTABLE RATE NOTE DATED MAY 28, 1996 IN THE AMOUNT OF
$1,000,000.00 FROM JAMESON INNS, INC. TO EMPIRE FINANCIAL SERVICES,
INC. FOR LOAN SECURED BY PROPERTY IN BRUNSWICK, GEORGIA.
7. ADJUSTABLE RATE NOTE DATED MAY 28, 1996 IN THE AMOUNT OF
$600,000.00 FROM JAMESON INNS, INC. TO EMPIRE FINANCIAL SERVICES, INC.
FOR LOAN SECURED BY PROPERTY IN BRUNSWICK, GEORGIA.
8. ADJUSTABLE RATE NOTE DATED MAY 13, 1996 IN THE AMOUNT OF
$1,600,000.00 FROM JAMESON INNS, INC. TO EMPIRE FINANCIAL SERVICES,
INC. FOR LOAN SECURED BY PROPERTY IN WAYCROSS, GEORGIA.
9. ADJUSTABLE RATE NOTE DATED MAY 13, 1996 IN THE AMOUNT OF
$500,000.00 FROM JAMESON INNS, INC. TO EMPIRE FINANCIAL SERVICES, INC.
FOR LOAN SECURED BY PROPERTY IN BAINBRIDGE, GEORGIA.
10. ADJUSTABLE RATE NOTE DATED MAY 13, 1996 IN THE AMOUNT OF
$950,000.00 FROM JAMESON INNS, INC. TO EMPIRE FINANCIAL SERVICES, INC.
FOR LOAN SECURED BY PROPERTY IN BAINBRIDGE, GEORGIA.
11. ADJUSTABLE RATE NOTE DATED MAY 13, 1996 IN THE AMOUNT OF
$500,000.00 FROM JAMESON INNS, INC. TO EMPIRE FINANCIAL SERVICES, INC.
FOR LOAN SECURED BY PROPERTY IN VALDOSTA, GEORGIA.
<PAGE>
<PAGE>
12. ADJUSTABLE RATE NOTE DATED MAY 13, 1996 IN THE AMOUNT OF
$1,000,000.00 FROM JAMESON INNS, INC. TO EMPIRE FINANCIAL SERVICES,
INC. FOR LOAN SECURED BY PROPERTY IN VALDOSTA, GEORGIA.
13. ADJUSTABLE RATE NOTE DATED JUNE 30, 1996 IN THE AMOUNT OF
$1,000,000.00 FROM JAMESON INNS, INC. TO EMPIRE FINANCIAL SERVICES,
INC. FOR LOAN SECURED BY PROPERTY IN EASLEY, SOUTH CAROLINA.
14. ADJUSTABLE RATE NOTE DATED MAY 28, 1996 IN THE AMOUNT OF
$1,000,000.00 FROM JAMESON INNS, INC. TO EMPIRE FINANCIAL SERVICES,
INC. FOR LOAN SECURED BY PROPERTY IN DOUGLAS, GEORGIA.
15. ADJUSTABLE RATE NOTE DATED JUNE 30, 1996 IN THE AMOUNT OF
$1,050,000.00 FROM JAMESON INNS, INC. TO EMPIRE FINANCIAL SERVICES,
INC. FOR LOAN SECURED BY PROPERTY IN GREENWOOD, SOUTH CAROLINA.
16. ADJUSTABLE RATE NOTE DATED MAY 13, 1996 IN THE AMOUNT OF
$600,000.00 FROM JAMESON INNS, INC. TO EMPIRE FINANCIAL SERVICES, INC.
FOR LOAN SECURED BY PROPERTY IN COVINGTON, GEORGIA; THOMASTON,
GEORGIA; WINDER, GEORGIA.
17. ADJUSTABLE RATE NOTE DATED MAY 13, 1996 IN THE AMOUNT OF
$2,900,000.00 FROM JAMESON INNS, INC. TO EMPIRE FINANCIAL SERVICES,
INC. FOR LOAN SECURED BY PROPERTY IN COVINGTON, GEORGIA; THOMASTON,
GEORGIA; WINDER, GEORGIA.
18. ADJUSTABLE RATE NOTE DATED MAY 28, 1996 IN THE AMOUNT OF
$3,361,111.00 FROM JAMESON INNS, INC. TO EMPIRE FINANCIAL SERVICES,
INC. FOR LOAN SECURED BY PROPERTY IN AMERICUS, GEORGIA; HARTWELL,
GEORGIA; WASHINGTON, GEORGIA; STATESBORO, GEORGIA; ANDERSON, SOUTH CAROLINA.
19. ADJUSTABLE RATE NOTE DATED MAY 28, 1996 IN THE AMOUNT OF
$2,050,000.00 FROM JAMESON INNS, INC. TO EMPIRE FINANCIAL SERVICES,
INC. FOR LOAN SECURED BY PROPERTY IN AMERICUS, GEORGIA; HARTWELL,
GEORGIA; WASHINGTON, GEORGIA; STATESBORO, GEORGIA; ANDERSON, SOUTH CAROLINA.
20. ADJUSTABLE RATE NOTE DATED MAY 28, 1996 IN THE AMOUNT OF
$4,200,000.00 FROM JAMESON INNS, INC. TO EMPIRE FINANCIAL SERVICES,
INC. FOR LOAN SECURED BY PROPERTY IN AMERICUS, GEORGIA; HARTWELL,
GEORGIA; WASHINGTON, GEORGIA; STATESBORO, GEORGIA; ANDERSON, SOUTH CAROLINA.
<PAGE>
Exhibit 11.1 Statement Re: Per-Share Earnings
Three Month Period
Ended June 30
---------------------
1996 1995
---------------------
Average shares and common stock
equivalents outstanding 6,397,012 3,852,352
Net effect of dilutive stock options
based on the treasury stock method 29,083 28,666
---------------------
6,426,096 3,881,018
=====================
Net income $ 177,275 $ 597,273
=====================
Extraordinary loss $ 989,376 $ -
=====================
Per common and common equivalent share:
Income before extraordinary loss $ .18 $ .15
Extraordinary loss (.15) -
---------------------
Net income $ .03 $ .15
=====================
Six Month Period
Ended June 30
---------------------
1996 1995
---------------------
Average shares and common stock
equivalents outstanding 5,130,905 3,852,272
Net effect of dilutive stock options
based on the treasury stock method 29,389 29,389
---------------------
5,160,294 3,881,661
=====================
Net income $ 515,779 $ 940,662
=====================
Extraordinary loss $ 989,376 $ -
=====================
Per common and common equivalent share:
Income before extraordinary loss $ .29 $ .24
Extraordinary loss (.19) -
---------------------
Net income $ .10 $ .24
=====================
