SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
(Mark
One)
|
[X]
|
QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
|
|
|
For
the quarterly period ended:
June 30,
2009
|
|
|
|
[ ]
|
TRANSITION REPORT UNDER SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
|
|
|
For
the transition period from ____________________ to
_____________
|
|
Commission
file number
__________________________
|
|
LANDMARK LAND COMPANY, INC.
(Exact
Name of Registrant as specified in its Charter)
|
|
DELAWARE
(State
or Other Jurisdiction of Incorporation or Organization)
|
77-0024129
(I.R.S.
Employer Identification No.)
|
|
2817 Crain Highway, Upper Marlboro,
Maryland
(Address
of Principal Executive Offices)
|
20774
(Zip
Code)
|
|
(301) 574-3330
(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 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 [ ] No
|
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reported company” in Rule 12b-2 of the Exchange
Act.
|
Large
accelerated filer [ ]
|
Accelerated
filer [ ]
|
|
Non-accelerated
filer [ ] (Do not check if a smaller reporting
company)
|
Smaller
reporting company [√]
|
|
Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
|
[ ]
Yes [√] No
|
APPLICABLE
ONLY TO CORPORATE ISSUERS
The
number of shares outstanding of the issuer's common stock, $0.50 par value as of
August 13, 2009 was 7,567,530.
Landmark
Land Company, Inc.
INDEX
TO QUARTERLY REPORT ON FORM 10-Q
QUARTER
ENDED JUNE 30, 2009
|
PART
I
|
FINANCIAL
INFORMATION
|
Page
Number
|
|
|
|
|
|
|
|
|
Consolidated
Financial Statements
|
3
|
|
|
|
|
|
Consolidated
Balance Sheet as of June 30, 2009 (unaudited) and December 31,
2008
|
4
|
|
|
|
|
|
|
|
|
Consolidated
Statements of Operations (unaudited) for the three months
and six months ended June 30, 2009 and 2008
|
6
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|
|
|
|
|
|
|
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Consolidated
Statement of Comprehensive Income (unaudited) for the three months and six
months ended June 30, 2009 and 2008
|
7
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|
|
|
|
|
|
|
|
Consolidated
Statements of Cash Flows (unaudited) for the six months ended June 30,
2009 and 2008
|
8
|
|
|
|
|
|
|
|
|
Notes
to Consolidated Financial Statements
|
9
|
|
|
|
|
|
|
|
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
16
|
|
|
|
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|
Quantitative
and Qualitative Disclosures about Market Risk
|
19
|
|
|
|
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Controls
and Procedures
|
20
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|
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|
PART
II
|
OTHER
INFORMATION
|
|
|
|
|
|
|
|
|
Legal
Proceedings
|
20
|
|
|
|
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|
Risk
Factors
|
20
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|
|
|
|
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
20
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Defaults
Upon Senior Securities
|
20
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Submission
of Matters to a Vote of Security Holders
|
20
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Other
Information
|
20
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|
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|
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|
Exhibits
|
20
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IMPORTANT
ADVISORY NOTE REGARDING FORWARD-LOOKING
STATEMENTS
|
This
report and the documents incorporated into this report contain forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995 ("PSLRA"), including, but not limited to, statements relating to the
company's business objectives and strategy. Such forward-looking statements are
based on current expectations, management beliefs, certain assumptions made by
the company's management, and estimates and projections about the company's
industry. Words such as "anticipates," "expects," "intends," "plans,"
"believes," "seeks," "estimates," "forecasts," "is likely," "predicts,"
"projects," "judgment," variations of such words and similar expressions are
intended to identify such forward-looking statements. These statements are not
guarantees of future performance and are subject to certain risks, uncertainties
and assumptions that are difficult to predict with respect to timing, extent,
likelihood and degree of occurrence. Therefore, actual results and outcomes may
differ materially from those expressed, forecasted, or contemplated by any such
forward-looking statements.
Factors
that could cause actual events or results to differ materially include, but are
not limited to, the following: early terminations of existing golf course
management agreements; the company's ability to expand its golf management
business; general demand for the company's services or products, intense
competition from other golf course managers and residential developers/builders;
the company's limited cash flow from operations; changes in laws and regulations
affecting the company and/or its services; the outcomes of future litigation and
contingencies; trends in the golf and housing industry; changes in local,
national and international economies; the current war against terrorism; risks
arising from natural disasters; risks involved in doing business in
foreign countries; and risks inherent in and associated with doing business in a
recreational and/or interest rate sensitive industry. Given these uncertainties,
investors are cautioned not to place undue reliance on any such forward-looking
statements.
Unless
required by law, the company undertakes no obligation to update publicly any
forward-looking statements, whether as a result of new information, future
events or otherwise. However, readers should carefully review the risk factors
set forth in other reports or documents that the company files from time to time
with the Securities and Exchange Commission (the "SEC"), particularly Annual
Reports on Form 10-K, Quarterly Reports on Form 10-Q and any Current Reports on
Form 8-K.
PART I – FINANCIAL INFORMATION
.
Item
1.
Consolidated
Financial Statements
|
|
|
|
Consolidated
Balance Sheets
|
|
|
|
|
|
|
|
June
30,
|
|
|
December
31,
|
|
|
|
|
2009
|
|
|
2008
|
|
|
Assets
|
|
(Unaudited)
|
|
|
|
|
|
Current
assets
|
|
|
Cash
and cash equivalents
|
|
$
|
337,504
|
|
|
$
|
270,278
|
|
|
Accounts
receivable
|
|
|
95,546
|
|
|
|
302,804
|
|
|
Receivable
from affiliates
|
|
|
502,216
|
|
|
|
1,265,250
|
|
|
Inventories
|
|
|
99,945
|
|
|
|
118,441
|
|
|
Other
current assets
|
|
|
178,026
|
|
|
|
259,523
|
|
|
Total
current assets
|
|
|
1,213,237
|
|
|
|
2,216,296
|
|
|
|
|
|
Real
estate and golf management contract rights acquired,
|
|
|
|
|
|
|
|
|
|
net
of accumulated amortization of $961,726 in 2009 and 2008
|
|
|
2,323,861
|
|
|
|
2,323,861
|
|
|
|
|
|
Real
Estate
|
|
|
Real
estate held for sale
|
|
|
4,506,583
|
|
|
|
3,163,498
|
|
|
Real
estate held for or under development
|
|
|
10,867,227
|
|
|
|
12,366,236
|
|
|
Total
real estate
|
|
|
15,373,810
|
|
|
|
15,529,734
|
|
|
|
|
|
Property and equipment,
net of accumulated depreciation
|
|
|
of
$1,535,017 and $1,213,198 in 2009 and 2008, respectively
|
|
|
5,770,276
|
|
|
|
6,091,385
|
|
|
|
|
|
Other
assets
|
|
|
Investment
in unconsolidated affiliates
|
|
|
14,963,990
|
|
|
|
15,734,327
|
|
|
Receivable
from affiliates, non-current
|
|
|
516,787
|
|
|
|
548,551
|
|
|
Deposits
|
|
|
85,355
|
|
|
|
80,181
|
|
|
Deferred
tax assets
|
|
|
4,400,000
|
|
|
|
4,400,000
|
|
|
Total
other assets
|
|
|
19,966,132
|
|
|
|
20,763,059
|
|
|
|
|
|
Total
assets
|
|
$
|
44,647,316
|
|
|
$
|
46,924,335
|
|
The
accompanying Notes to Consolidated Financial Statements are an integral part of
these financial statements.
|
Landmark
Land Company, Inc.
|
|
|
Consolidated
Balance Sheets
|
|
|
|
|
|
|
|
June
30,
|
|
|
December
31,
|
|
|
|
|
2009
|
|
|
2008
|
|
|
Liabilities
and Stockholders' Equity
|
|
(Unaudited)
|
|
|
|
|
|
Current
liabilities
|
|
|
Current
portion of notes payable to others
|
|
$
|
13,400,638
|
|
|
$
|
13,644,621
|
|
|
Current
portion of liabilities to affiliates
|
|
|
1,223,768
|
|
|
|
1,192,074
|
|
|
Accounts
payable and accrued expenses
|
|
|
1,022,885
|
|
|
|
1,165,343
|
|
|
Accrued
payroll and related expenses
|
|
|
556,160
|
|
|
|
404,373
|
|
|
Accrued
interest due affiliates
|
|
|
1,078,758
|
|
|
|
971,905
|
|
|
Accrued
interest due others
|
|
|
389,985
|
|
|
|
367,082
|
|
|
Other
liabilities and deferred credits
|
|
|
189,215
|
|
|
|
97,947
|
|
|
Dividends
payable
|
|
|
108,407
|
|
|
|
8,407
|
|
|
Current
income taxes
|
|
|
16,140
|
|
|
|
5,061
|
|
|
Total
current liabilities
|
|
|
17,985,956
|
|
|
|
17,856,813
|
|
|
|
|
|
Liabilities
due after one year
|
|
|
|
|
|
|
|
|
|
Notes
payable to others, due after one year
|
|
|
3,479,131
|
|
|
|
3,542,310
|
|
|
Note
payable to affiliate, due after one year
|
|
|
1,310,000
|
|
|
|
200,000
|
|
|
Total
liabilities payable after one year
|
|
|
4,789,131
|
|
|
|
3,742,310
|
|
|
|
|
|
Total
liabilities
|
|
|
22,775,087
|
|
|
|
21,599,123
|
|
|
|
|
|
Stockholders'
equity
|
|
|
Preferred
stock, Series C, non-voting, $.50 par value; $100
|
|
|
|
|
|
|
|
|
|
liquidation
value; $10 cumulative annual dividend;
|
|
|
|
|
|
|
|
|
|
50,000
shares authorized; 20,000 shares issued and outstanding,
|
|
|
|
|
|
|
stated
at liquidation value
|
|
|
2,000,000
|
|
|
|
2,000,000
|
|
|
Common
stock, $.50 par value; 20,000,000 shares authorized;
|
|
|
|
|
|
|
|
|
|
8,804,468
shares issued; 7,567,530 shares outstanding
|
|
|
4,402,234
|
|
|
|
4,402,234
|
|
|
Additional
paid-in capital
|
|
|
30,477,466
|
|
|
|
30,449,470
|
|
|
Treasury
stock, at cost, 1,236,938 shares
|
|
|
(1,299,820
|
)
|
|
|
(1,299,820
|
)
|
|
Accumulated
deficit
|
|
|
(13,647,580
|
)
|
|
|
(10,167,890
|
)
|
|
Accumulated
other comprehensive loss
|
|
|
(60,071
|
)
|
|
|
(58,782
|
)
|
|
Total
stockholders' equity
|
|
|
21,872,229
|
|
|
|
25,325,212
|
|
|
|
|
|
Total
liabilities and stockholders' equity
|
|
$
|
44,647,316
|
|
|
$
|
46,924,335
|
|
The
accompanying Notes to Consolidated Financial Statements are an integral part of
these financial statements.
|
Landmark
Land Company, Inc.
|
|
|
Consolidated
Statements of Operations
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Three
months ended June 30,
|
|
|
Six
months ended June 30,
|
|
|
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real
estate sales
|
|
$
|
1,178,015
|
|
|
$
|
1,695,185
|
|
|
$
|
1,312,335
|
|
|
$
|
3,252,312
|
|
|
Real
estate services revenue
|
|
|
341,786
|
|
|
|
257,993
|
|
|
|
656,945
|
|
|
|
513,012
|
|
|
Golf
course revenue
|
|
|
301,785
|
|
|
|
311,077
|
|
|
|
680,889
|
|
|
|
748,265
|
|
|
Golf
merchandise sales
|
|
|
55,065
|
|
|
|
73,628
|
|
|
|
112,831
|
|
|
|
148,108
|
|
|
Food
and beverage sales
|
|
|
343,102
|
|
|
|
206,299
|
|
|
|
531,155
|
|
|
|
317,759
|
|
|
Management
and consulting fees
|
|
|
337,764
|
|
|
|
669,126
|
|
|
|
730,852
|
|
|
|
1,775,207
|
|
|
Reimbursement
of out-of-pocket expenses
|
|
|
315,133
|
|
|
|
417,689
|
|
|
|
823,472
|
|
|
|
818,655
|
|
|
Total
revenues
|
|
|
2,872,650
|
|
|
|
3,630,997
|
|
|
|
4,848,479
|
|
|
|
7,573,318
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs
of revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
of real estate sold
|
|
|
779,784
|
|
|
|
1,272,203
|
|
|
|
856,175
|
|
|
|
2,271,984
|
|
|
Real
estate operating expenses
|
|
|
547,422
|
|
|
|
713,702
|
|
|
|
1,089,992
|
|
|
|
1,420,360
|
|
|
Cost
of golf merchandise sold
|
|
|
46,547
|
|
|
|
52,027
|
|
|
|
89,234
|
|
|
|
103,009
|
|
|
Cost
of food and beverage sold
|
|
|
125,459
|
|
|
|
86,105
|
|
|
|
206,832
|
|
|
|
136,019
|
|
|
Golf
operating expenses
|
|
|
580,755
|
|
|
|
599,016
|
|
|
|
1,064,171
|
|
|
|
1,073,477
|
|
|
Out-of-pocket
expenses
|
|
|
315,133
|
|
|
|
417,689
|
|
|
|
823,472
|
|
|
|
818,655
|
|
|
Management
and consulting payroll and related expenses
|
|
|
1,015,003
|
|
|
|
1,108,160
|
|
|
|
2,082,207
|
|
|
|
2,158,919
|
|
|
Depreciation
and amortization
|
|
|
160,395
|
|
|
|
148,829
|
|
|
|
320,786
|
|
|
|
333,155
|
|
|
Total
costs of revenue
|
|
|
3,570,498
|
|
|
|
4,397,731
|
|
|
|
6,532,869
|
|
|
|
8,315,578
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
(loss)
|
|
|
(697,848
|
)
|
|
|
(766,734
|
)
|
|
|
(1,684,390
|
)
|
|
|
(742,260
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General,
administrative and other expenses
|
|
|
(261,589
|
)
|
|
|
(481,843
|
)
|
|
|
(521,965
|
)
|
|
|
(1,071,645
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
(expenses) income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
in (loss) income of unconsolidated affiliates
|
|
|
(403,693
|
)
|
|
|
380,080
|
|
|
|
(800,813
|
)
|
|
|
5,682,561
|
|
|
Interest
income
|
|
|
298
|
|
|
|
14,573
|
|
|
|
608
|
|
|
|
48,600
|
|
|
Interest
expense
|
|
|
(191,261
|
)
|
|
|
(148,033
|
)
|
|
|
(343,463
|
)
|
|
|
(324,569
|
)
|
|
Total
other (expenses) income
|
|
|
(594,656
|
)
|
|
|
246,620
|
|
|
|
(1,143,668
|
)
|
|
|
5,406,592
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
(loss) income before income taxes
|
|
|
(1,554,093
|
)
|
|
|
(1,001,957
|
)
|
|
|
(3,350,023
|
)
|
|
|
3,592,687
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal
and state income taxes
|
|
|
(23,967
|
)
|
|
|
(9,847
|
)
|
|
|
(29,667
|
)
|
|
|
(283,279
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
(loss) income
|
|
$
|
(1,578,060
|
)
|
|
$
|
(1,011,804
|
)
|
|
$
|
(3,379,690
|
)
|
|
$
|
3,309,408
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
(loss) income per common share
|
|
$
|
(0.22
|
)
|
|
$
|
(0.14
|
)
|
|
$
|
(0.46
|
)
|
|
$
|
0.43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
weighted average shares outstanding
|
|
|
7,567,530
|
|
|
|
7,567,530
|
|
|
|
7,567,530
|
|
|
|
7,567,530
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
(loss) income per common share
|
|
$
|
(0.22
|
)
|
|
$
|
(0.14
|
)
|
|
$
|
(0.46
|
)
|
|
$
|
0.43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
weighted average shares outstanding
|
|
|
7,567,530
|
|
|
|
7,567,530
|
|
|
|
7,567,530
|
|
|
|
7,567,530
|
|
The
accompanying Notes to Consolidated Financial Statements are an integral part of
these financial statements.
|
|
|
|
Consolidated
Statements of Comprehensive Income
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Three
months ended June 30,
|
|
|
Six
months ended June 30,
|
|
|
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
(loss) income
|
|
$
|
(1,578,060
|
)
|
|
$
|
(1,011,804
|
)
|
|
$
|
(3,379,690
|
)
|
|
$
|
3,309,408
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
comprehensive (loss) income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
currency translation adjustments
|
|
|
(4,377
|
)
|
|
|
(930
|
)
|
|
|
(1,289
|
)
|
|
|
8,895
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
(loss) income
|
|
$
|
(1,582,437
|
)
|
|
$
|
(1,012,734
|
)
|
|
$
|
(3,380,979
|
)
|
|
$
|
3,318,303
|
|
The
accompanying Notes to Consolidated Financial Statements are an integral part of
these financial statements.
|
|
|
|
Consolidated
Statements of Cash Flows
|
|
|
Six
Months Ended June 30, 2009 and 2008
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
2009
|
|
|
2008
|
|
|
Cash
flows from operating activities
|
|
|
|
|
|
|
|
Net
(loss) income for the period
|
|
$
|
(3,379,690
|
)
|
|
$
|
3,309,408
|
|
|
Adjustments
to reconcile net (loss) income to net cash
|
|
|
|
|
|
|
|
|
|
(used)
by operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation
and amortization
|
|
|
320,786
|
|
|
|
333,155
|
|
|
Stock
options expensed
|
|
|
27,996
|
|
|
|
42,326
|
|
|
Loss
on disposal of property and equipment
|
|
|
1,085
|
|
|
|
-
|
|
|
Equity
in loss (income) of unconsolidated affiliates
|
|
|
800,813
|
|
|
|
(5,682,561
|
)
|
|
(Increase)
decrease in
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
207,257
|
|
|
|
103,156
|
|
|
Receivable
from affiliates
|
|
|
794,729
|
|
|
|
(852,385
|
)
|
|
Real
estate inventory
|
|
|
155,924
|
|
|
|
(100,410
|
)
|
|
Golf
inventories
|
|
|
18,496
|
|
|
|
(11,674
|
)
|
|
Other
current assets
|
|
|
81,497
|
|
|
|
10,660
|
|
|
Deposits
|
|
|
(5,174
|
)
|
|
|
(80,180
|
)
|
|
Deferred
tax assets
|
|
|
-
|
|
|
|
268,000
|
|
|
Increase
(decrease) in
|
|
|
|
|
|
|
|
|
|
Accounts
payable and accrued expenses
|
|
|
(142,458
|
)
|
|
|
(224,586
|
)
|
|
Accrued
payroll and related expenses
|
|
|
151,787
|
|
|
|
58,703
|
|
|
Accrued
interest
|
|
|
129,756
|
|
|
|
139,496
|
|
|
Other
liabilities and deferred credits
|
|
|
91,268
|
|
|
|
(41,023
|
)
|
|
Current
income taxes
|
|
|
11,079
|
|
|
|
(65,168
|
)
|
|
Net
cash (used) by operating activities
|
|
|
(734,849
|
)
|
|
|
(2,793,083
|
)
|
|
|
|
|
Cash
flows from investing activities
|
|
|
|
|
|
|
|
|
|
Purchase
of property and equipment, net
|
|
|
(763
|
)
|
|
|
(27,292
|
)
|
|
Net
cash (used) by investing activities
|
|
|
(763
|
)
|
|
|
(27,292
|
)
|
|
|
|
|
Cash
flows from financing activities
|
|
|
|
|
|
|
|
|
|
Proceeds
from notes payable to others
|
|
|
629,445
|
|
|
|
1,685,122
|
|
|
Repayments
on debt to others
|
|
|
(936,607
|
)
|
|
|
(1,936,619
|
)
|
|
Proceeds
from debt to affiliates
|
|
|
1,110,000
|
|
|
|
-
|
|
|
Cash
dividends paid on common stock
|
|
|
-
|
|
|
|
(378,378
|
)
|
|
Cash
dividends paid on preferred stock
|
|
|
-
|
|
|
|
(50,000
|
)
|
|
Net
cash provided (used) by financing activities
|
|
|
802,838
|
|
|
|
(679,875
|
)
|
|
|
|
|
Net
increase (decrease) in cash during period
|
|
|
67,226
|
|
|
|
(3,500,250
|
)
|
|
|
|
|
Cash
balance, beginning of period
|
|
|
270,278
|
|
|
|
4,934,820
|
|
|
|
|
|
Cash
balance, end of period
|
|
$
|
337,504
|
|
|
$
|
1,434,570
|
|
|
|
|
|
Supplemental
disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
|
Cash
paid for interest, including $4,000 interest paid to
|
|
|
|
|
|
|
|
|
|
affiliates
in 2009 and none in 2008
|
|
$
|
428,240
|
|
|
$
|
457,534
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
paid for income taxes
|
|
$
|
17,188
|
|
|
$
|
5,308
|
|
The
accompanying Notes to Consolidated Financial Statements are an integral part of
these financial statements.
Landmark
Land Company, Inc.
Notes
to Consolidated Financial Statements
Landmark
Land Company, Inc.
Notes
To Consolidated Financial Statements
(Unaudited)
1. Basis
of Presentation
The
accompanying unaudited 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 3 of Regulation S-X
promulgated by the Securities and Exchange Commission. Accordingly,
they do not include all of the information and footnotes normally included in
the annual financial statements. In the opinion of management, all
adjustments considered necessary for a fair presentation have been
included. The company has evaluated subsequent events through the
time of filing these financial statements with the Securities Exchange
Commission on August 13, 2009. Operating results for the six-month
period ended June 30, 2009 are not necessarily indicative of the results that
may be expected for the fiscal year ending December 31, 2009. There
have been no significant changes to accounting policies or critical estimates
during the second quarter of 2009. For further information, please
refer to the audited financial statements and footnotes thereto included in the
company’s Form 10-K for the year ended December 31, 2008, as filed with the
Securities and Exchange Commission.
The
accompanying financial statements include the assets, liabilities, revenues and
expenses of Landmark Land Company, Inc. and its wholly-owned subsidiaries,
Landmark of Spain, Inc., DPMG, Inc., LML Caribbean, LTD., Lake Presidential
Beverage Company, Inc., South Padre Island Development, LLC, South Padre Island
Realty, LLC, and SPIBS, LLC. The three entities related to the South
Padre project, South Padre Island Development, LLC, South Padre Island Realty,
LLC, and SPIBS, LLC, are sometimes collectively referred to as “South
Padre”. All significant inter-company accounts and transactions have
been eliminated in consolidation.
LML Caribbean, LTD
owns one
third interest in Apes Hill Development SRL (“Apes Hill”) and accounts for its
investment on the equity basis. Apes Hill’s functional currency is
the Barbados dollar. Apes Hill reported the following results
for periods shown below, converted to US dollars at the exchange rate of two
Barbados dollars to one US dollar:
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
|
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
|
Revenue
|
|
$
|
1,167,380
|
|
|
$
|
2,589,433
|
|
|
$
|
1,591,033
|
|
|
$
|
31,122,875
|
|
|
Gross
profit
|
|
$
|
521,688
|
|
|
$
|
1,559,555
|
|
|
$
|
740,231
|
|
|
$
|
18,714,531
|
|
|
Profit
(loss) from continuing operations
|
|
$
|
(748,926
|
)
|
|
$
|
1,002,347
|
|
|
$
|
(1,918,637
|
)
|
|
$
|
17,480,819
|
|
|
Net
income (loss)
|
|
$
|
(748,926
|
)
|
|
$
|
1,002,347
|
|
|
$
|
(1,918,637
|
)
|
|
$
|
17,480,819
|
|
Apes Hill
closed 2 lot sales in the second quarter of 2009 generating US $1.1 million in
revenue compared to 6 lot sales in the second quarter of 2008 generating US $2.5
million in revenue. At June 30, 2009, Apes Hill reported 15 lots and
2 houses under contract with a total sales value of approximately US $31.4
million.
The
company has a receivable from Apes Hill in the amount of $0.3 million at June
30, 2009 representing unpaid management fees and out-of-pocket
expenses. The amount is reported in the Consolidated Balance Sheet as
Receivable from affiliates.
Landmark
Land Company, Inc.
Notes
to Consolidated Financial Statements
Landmark of Spain, Inc.
owns a
50% interest in a Spanish company, Landmark Developments of Spain, SL (“Landmark
Spain”). Landmark of Spain, Inc. accounts for its investment on the
equity basis. Landmark Spain’s functional currency is the
Euro. Landmark Spain reported the following results for the periods
shown below, converted to US dollars at the approximate average rate of exchange
during each period:
|
|
|
Three
Months Ended June 30,
|
|
|
Six
Months Ended June 30,
|
|
|
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
|
Revenue
|
|
$
|
592
|
|
|
$
|
303,362
|
|
|
$
|
35,408
|
|
|
$
|
303,671
|
|
|
Gross
profit (loss)
|
|
$
|
(46,516
|
)
|
|
$
|
91,929
|
|
|
$
|
(60,949
|
)
|
|
$
|
(288,757
|
)
|
|
Profit
(loss) from continuing operations
|
|
$
|
(46,516
|
)
|
|
$
|
91,929
|
|
|
$
|
(60,949
|
)
|
|
$
|
(288,757
|
)
|
|
Net
income (loss)
|
|
$
|
(46,516
|
)
|
|
$
|
91,929
|
|
|
$
|
(60,949
|
)
|
|
$
|
(288,757
|
)
|
The
company has a receivable from this affiliate of $0.6 million as of June 30,
2009. In addition, the company has recorded cumulative losses
from this investment of $89,000 more than its original capital investment of
$1.3 million and this excess loss is reported as a reduction to the company’s
receivable from the affiliate.
DPMG owns
7.45% of
Presidential Golf
Club, LLC
, a Maryland limited liability company
(“Presidential”). Presidential has developed an 18-hole championship
golf course, Lake Presidential Golf Club, on approximately 240 acres of land in
Upper Marlboro, Maryland. The course was opened for play on May 1,
2008. During the second quarter of 2009, the company corrected the
accounting for its investment in Presidential from the cost method to the equity
method in recognition of Presidential’s legal structure as a limited liability
company which maintains specific ownership accounts for each
investor. The $131,000 recorded as Landmark’s 7.45% share of
Presidential’s loss through June 30, 2009 includes $90,000 applicable to the
year ended December 31, 2008. The 2008 adjustment included in the
2009 financial statements is not material to the company’s reported operating
results for either period. Presidential reported the following
results for the periods shown below:
|
|
|
Three
Months Ended June 30,
|
|
|
Six
Months Ended June 30,
|
|
|
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
|
Revenue
|
|
$
|
1,077,416
|
|
|
$
|
700,228
|
|
|
$
|
1,366,864
|
|
|
$
|
700,228
|
|
|
Gross
profit
|
|
$
|
226,554
|
|
|
$
|
108,887
|
|
|
$
|
290,006
|
|
|
$
|
108,887
|
|
|
Loss
from continuing operations
|
|
$
|
(46,903
|
)
|
|
$
|
(137,486
|
)
|
|
$
|
(541,537
|
)
|
|
$
|
(137,486
|
)
|
|
Net
loss
|
|
$
|
(46,903
|
)
|
|
$
|
(137,486
|
)
|
|
$
|
(541,537
|
)
|
|
$
|
(137,486
|
)
|
The
company has receivables from Presidential totaling $0.2 million at June 30,
2009, representing unpaid management fees, out-of-pocket expenses, short-term
working capital loans, and accrued interest. The amount is reported
in the Consolidated Balance Sheet as Receivable from affiliates.
Lake Presidential Beverage Company,
LLC
is a wholly owned subsidiary of the company formed on November 7,
2007 to hold the alcoholic beverage license for the Lake Presidential Golf Club
in Maryland.
2. Liquidity
and Capital Resources
The
company’s current operating results are largely dependent on real estate sales
in its developments in Texas and Barbados. The general economic
recession in the US that began in late 2007 has hit the real estate market
particularly hard. The company’s properties are suffering along with
most other real estate developments in the US and abroad. Sales
contracts already in the pipeline at the end of 2007, particularly in the Apes
Hill development in Barbados, generated profitable sales for the company in
2008. However, new contracts in 2008 and in the first six months of
2009 were minimal. Although prospective purchaser traffic has
increased in our Texas development over the last three months, most shoppers are
still looking to find bargains at the bottom of the market. We
continue to liquidate existing inventories of lots and houses at reduced profit
margins and defer any significant additional development until the market
improves.
Landmark
Land Company, Inc.
Notes
to Consolidated Financial Statements
During
the second half of 2008 and the first half of 2009 the company has taken various
actions to reduce expenses and minimize operating
losses. Recognizing that, historically, personnel costs
have accounted for more than half of the company’s operating costs (excluding
the cost of real estate and merchandise sold), management has reduced the number
of employees by approximately 37% from 132 employees at June 30, 2008 to 83
employees at June 30, 2009. In the second quarter of 2009, the
company grounded its airplane and terminated employment of its
pilots. To further conserve cash, a portion of the salaries of
certain officers is being accrued with actual payment deferred until cash flow
improves. An affiliate of the company’s chairman and chief executive
officer loaned the company approximately $1.1 million in working capital
funds during the first half of 2009. Additional comments on the
company’s actions to manage its way through the current recession are included
in the liquidity and capital resources paragraphs below.
The
company anticipates a small profit from its Barbados affiliate in 2009, but
expects losses from its domestic operations. The cash flow generated
in Barbados is expected to be used to repay bank loans and/or to be reinvested
in continuing development of the Apes Hill property so that accumulated profits
are not expected to be available for distribution to the owners until 2010 or
2011. To reduce the anticipated 2009 cash flow shortfall from
domestic operations, the company has reduced operating expenses, including
reductions in personnel and deferral of payment of a portion of certain company
executives’ salaries as discussed in the overview above. Current
staffing levels remain adequate to service additional projects that the company
is pursuing. To meet the remaining cash flow shortfall, the
company has received a loan of approximately $1.1 million from an affiliate, has
applied for new lines of credit from banks operating in the Caribbean and is
exploring additional working capital loans from other sources; however, there is
no guarantee that additional funding will be received. If loans are
not received, or if our current bank lenders do not renew existing credits or if
affiliates should call their working capital loans, the company could be
required to make further reductions in personnel and to liquidate real estate or
other assets at prices less than would be expected under normal operating
conditions. The Consolidated Financial Statements do not reflect any
adjustments that might result from the outcome of these
uncertainties.
The
company’s Consolidated Balance Sheet at June 30, 2009 reports current assets
totaling $1.2 million and current liabilities totaling $18.0 million for a $16.8
million excess of current liabilities over current
assets. Approximately $12.5 million of the current liabilities is due
to two Texas banks that have funded the company’s South Padre real estate
development for the last ten years. One bank has renewed credit
lines totaling $2.0 million for another year to May 2010 and the other, whose
loans mature in July and August 2009, has agreed to renew on substantially the
same terms, except for a $1.0 million reduction in the maximum amount, reducing
its credit lines to $11.4 million. We do not expect the change to
have any significant impact on the company’s real estate
operations. Additionally, approximately $2.3 million of the current
liabilities is owed to affiliates who have advanced funds for working capital
and are not expected to demand repayment until the company’s liquidity position
improves.
3. Earnings
Per Share
Earnings
per share (EPS) are computed using weighted average number of common shares
outstanding during the year. Diluted earnings per share reflect the
common stock options granted to employees, directors and legal counsel in 2006
and 2007. The following is a reconciliation of the numerators and
denominators used in the calculation of earnings per share:
|
|
|
Three
Months Ended June 30,
|
|
|
Six
Months Ended June 30,
|
|
|
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
|
Net
(loss) income
|
|
$
|
(1,578,060
|
)
|
|
$
|
(1,011,804
|
)
|
|
$
|
(3,379,690
|
)
|
|
$
|
3,309,408
|
|
|
Less: Preferred
dividends
|
|
|
(50,000
|
)
|
|
|
(25,000
|
)
|
|
|
(100,000
|
)
|
|
|
(50,000
|
)
|
|
Net
(loss) income available to common shareholders
|
|
|
(1,628,060
|
)
|
|
|
(1,036,804
|
)
|
|
|
(3,479,690
|
)
|
|
|
3,259,408
|
|
|
Weighted
average common shares outstanding
|
|
|
7,567,530
|
|
|
|
7,567,530
|
|
|
|
7,567,530
|
|
|
|
7,567,530
|
|
|
Incremental
shares from assumed exercise of dilutive options
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Diluted
weighted average common shares outstanding
|
|
|
7,567,530
|
|
|
|
7,567,530
|
|
|
|
7,567,530
|
|
|
|
7,567,530
|
|
|
Basic
(loss) income per common share
|
|
$
|
(0.22
|
)
|
|
$
|
(0.14
|
)
|
|
$
|
(0.46
|
)
|
|
$
|
0.43
|
|
|
Diluted
(loss) income per common share
|
|
$
|
(0.22
|
)
|
|
$
|
(0.14
|
)
|
|
$
|
(0.46
|
)
|
|
$
|
0.43
|
|
The
dilutive effect of the employee stock options and directors’ options is reported
using the treasury stock method.
Landmark
Land Company, Inc.
Notes
to Consolidated Financial Statements
4. Stock
Option Plans
The 2006
Landmark Land Company, Inc. Incentive Stock Option Plan (“Plan”) was adopted by
the Board of Directors on April 29, 2006 and approved by the shareholders on
November 18, 2006. Generally, options must be granted within ten
years of the plan adoption date, vest five years from the date of grant, and be
exercised within five years from the date of vesting.
A summary
of options issued to employees under the company’s incentive stock option plan
as of June 30, 2009, and changes during the six months then ended is presented
below:
|
Options
|
|
Shares
|
|
|
Weighted-Average
Grant-Date
Fair Value
|
|
|
Outstanding
at January 1, 2009
|
|
|
606,000
|
|
|
$
|
0.62
|
|
|
Granted
|
|
|
-
|
|
|
|
-
|
|
|
Vested
|
|
|
-
|
|
|
|
-
|
|
|
Forfeited
|
|
|
83,000
|
|
|
|
-
|
|
|
Outstanding
at June 30, 2009
|
|
|
523,000
|
|
|
$
|
0.60
|
|
|
Exercisable
at June 30, 2009
|
|
|
-
|
|
|
|
-
|
|
During
the first six months of 2009, the company recognized share-based compensation
costs in the amount of $28,000. As of June 30, 2009, there was
$161,000 of total unrecognized compensation costs related to non-vested
share-based compensation arrangements granted under the plan. That
cost is expected to be recognized over the remaining 3.4 years vesting period
for grants outstanding under the plan.
The
company has also entered into agreements with its outside directors and legal
counsel under which it granted options to purchase the company’s common
shares. Options to purchase a total of 300,000 shares have been
granted under these agreements with an exercise price equal to the fair market
value at the time of grant. These options vest immediately and expire
five years from the date of grant.
A summary
of options issued under the agreements with directors and legal counsel as of
June 30, 2009, and changes during the six months then ended is presented
below:
|
Options
|
|
Shares
|
|
|
Weighted-Average
Exercise
Price
|
|
Weighted-
Average Remaining Contractual
Term
|
|
Aggregate
Intrinsic
Value
|
|
|
Outstanding
at January 1, 2009
|
|
|
300,000
|
|
|
$
|
2.23
|
|
|
|
|
|
|
Granted
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
Exercised
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
Forfeited
or expired
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
Outstanding
at June 30, 2009
|
|
|
300,000
|
|
|
$
|
2.23
|
|
2.2
years
|
|
|
-
|
|
|
Exercisable
at June 30, 2009
|
|
|
300,000
|
|
|
$
|
2.23
|
|
2.2
years
|
|
|
-
|
|
There was
no related unrecognized cost related to the directors and legal counsel options
as of June 30, 2009.
5. Reclassifications
Certain
reclassifications have been made in the 2008 financial statements to conform to
the 2009 presentation. These changes had no effect on net
income.
Landmark
Land Company, Inc.
Notes
to Consolidated Financial Statements
6. Commitments
The
company’s subsidiary, South Padre, provides a one-year latent defects warranty
and a ten-year structural warranty on the houses it builds. The
accompanying financial statements include a provision for warranty expense
calculated as approximately .5% of gross house sales. The summary of
warranty accruals for the six months ended June 30, 2009 and 2008
follows:
|
|
|
2009
|
|
|
2008
|
|
|
Warranty
accrual balance January 1,
|
|
$
|
90,897
|
|
|
$
|
132,165
|
|
|
Provision
for warranty
|
|
|
5,498
|
|
|
|
15,001
|
|
|
Payments
|
|
|
(18,102
|
)
|
|
|
(34,127
|
)
|
|
Warranty
accrual balance June 30,
|
|
$
|
78,293
|
|
|
$
|
113,039
|
|
7. Income
Taxes
The
company reported a loss before income taxes of $3.4 million for the six-month
period ended June 30, 2009. The provision for federal and state income taxes is
a net provision of $30,000 and is comprised of estimated current state taxes.
Deferred federal and state tax benefits of approximately $1.2 million generated
by the current period loss are offset by an increase in the deferred tax asset
valuation allowance in the same amount.
It should
be noted that the estimated net future benefit available to the company from all
its deferred tax positions is approximately $48.9 million at June 30, 2009;
however, realization of that benefit is dependent on the company’s ability to
generate taxable income in the future. The company has established a
deferred tax asset valuation allowance to reduce the carrying value of the
deferred tax asset to an amount that is more likely than not to be realized in
the future. Based on a current evaluation of historical and
prospective earnings, the company increased the valuation allowance during the
first half of 2009 by approximately $1.2 million to a balance of $44.6 million,
reducing the net deferred tax benefit to $4,400,000 as of June 30,
2009.
The
company had no material unrecognized tax benefits at June 30, 2009, nor does it
expect any significant change in that status during the next 12
months. No accrued interest or penalties on uncertain tax positions
have been included on the statements of operations or the statement of financial
condition as of June 30, 2009. Should the company adopt tax positions
for which it would be appropriate to accrue interest and penalties, such costs
would be reflected in the tax expense for the period in which such costs
accrued. The company is subject to U.S. federal income tax and to
several state and foreign jurisdictions. Returns filed for tax
periods ending after December 31, 2004 are still open to examination by those
relevant taxing authorities.
8.
Segment Information
The
company’s operations are comprised of four segments – real estate, golf,
management services, and corporate investments and
administration. The following table summarizes the three months and
six months ended June 30, 2009 and 2008 operations by segment:
Landmark
Land Company, Inc.
Notes
to Consolidated Financial Statements
|
|
|
Three
Months Ended June 30, 2009
|
|
|
|
|
Real
Estate
|
|
|
Golf
|
|
|
Management
|
|
|
Corporate
|
|
|
Total
|
|
|
Revenue
|
|
$
|
1,519,801
|
|
|
$
|
699,952
|
|
|
$
|
652,897
|
|
|
$
|
-
|
|
|
$
|
2,872,650
|
|
|
Costs
of revenue
|
|
|
(1,327,206
|
)
|
|
|
(752,761
|
)
|
|
|
(1,330,136
|
)
|
|
|
-
|
|
|
|
(3,410,103
|
)
|
|
Depreciation
and amortization
|
|
|
(17,111
|
)
|
|
|
(34,510
|
)
|
|
|
(7,130
|
)
|
|
|
(101,644
|
)
|
|
|
(160,395
|
)
|
|
Operating
income (loss)
|
|
|
175,484
|
|
|
|
(87,319
|
)
|
|
|
(684,369
|
)
|
|
|
(101,644
|
)
|
|
|
(697,848
|
)
|
|
General
and administrative
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(261,589
|
)
|
|
|
(261,589
|
)
|
|
Other
income (expenses)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(594,656
|
)
|
|
|
(594,656
|
)
|
|
Federal
& state income taxes
|
|
|
(57,177
|
)
|
|
|
30,764
|
|
|
|
252,299
|
|
|
|
(249,853
|
)
|
|
|
(23,967
|
)
|
|
Net
income (loss)
|
|
$
|
118,307
|
|
|
$
|
(56,555
|
)
|
|
$
|
(432,070
|
)
|
|
$
|
(1,207,742
|
)
|
|
$
|
(1,578,060
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-lived
assets
|
|
$
|
16,531,646
|
|
|
$
|
1,628,938
|
|
|
$
|
6,505,358
|
|
|
$
|
18,768,137
|
|
|
$
|
43,434,079
|
|
|
Other
assets
|
|
|
288,723
|
|
|
|
271,439
|
|
|
|
634,433
|
|
|
|
18,642
|
|
|
|
1,213,237
|
|
|
Total
assets
|
|
$
|
16,820,369
|
|
|
$
|
1,900,377
|
|
|
$
|
7,139,791
|
|
|
$
|
18,786,779
|
|
|
$
|
44,647,316
|
|
|
|
|
|
|
|
Three
Months Ended June 30, 2008
|
|
|
|
|
Real
Estate
|
|
|
Golf
|
|
|
Management
|
|
|
Corporate
|
|
|
Total
|
|
|
Revenue
|
|
$
|
1,953,178
|
|
|
$
|
591,004
|
|
|
$
|
1,086,815
|
|
|
$
|
-
|
|
|
$
|
3,630,997
|
|
|
Costs
of revenue
|
|
|
(1,985,905
|
)
|
|
|
(737,148
|
)
|
|
|
(1,525,849
|
)
|
|
|
-
|
|
|
|
(4,248,902
|
)
|
|
Depreciation
and amortization
|
|
|
(9,605
|
)
|
|
|
(30,406
|
)
|
|
|
(7,174
|
)
|
|
|
(101,644
|
)
|
|
|
(148,829
|
)
|
|
Operating
income (loss)
|
|
|
(42,332
|
)
|
|
|
(176,550
|
)
|
|
|
(446,208
|
)
|
|
|
(101,644
|
)
|
|
|
(766,734
|
)
|
|
General
and administrative
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(481,843
|
)
|
|
|
(481,843
|
)
|
|
Other
income (expenses)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
246,620
|
|
|
|
246,620
|
|
|
Federal
& state income taxes
|
|
|
20,741
|
|
|
|
60,599
|
|
|
|
169,016
|
|
|
|
(218,721
|
)
|
|
|
(9,847
|
)
|
|
Net
income (loss)
|
|
$
|
(63,073
|
)
|
|
$
|
(115,951
|
)
|
|
$
|
(277,192
|
)
|
|
$
|
(555,588
|
)
|
|
$
|
(1,011,804
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-lived
assets
|
|
$
|
16,389,640
|
|
|
$
|
1,026,203
|
|
|
$
|
6,551,454
|
|
|
$
|
13,864,922
|
|
|
$
|
37,832,219
|
|
|
Other
assets
|
|
|
765,806
|
|
|
|
368,313
|
|
|
|
1,749,715
|
|
|
|
752,083
|
|
|
|
3,635,916
|
|
|
Total
assets
|
|
$
|
17,155,446
|
|
|
$
|
1,394,515
|
|
|
$
|
8,301,169
|
|
|
$
|
14,617,005
|
|
|
$
|
41,468,135
|
|
|
|
|
Six
Months Ended June 30, 2009
|
|
|
|
|
Real
Estate
|
|
|
Golf
|
|
|
Management
|
|
|
Corporate
|
|
|
Total
|
|
|
Revenue
|
|
$
|
1,969,280
|
|
|
$
|
1,324,875
|
|
|
$
|
1,554,324
|
|
|
$
|
-
|
|
|
$
|
4,848,479
|
|
|
Costs
of revenue
|
|
|
(1,946,167
|
)
|
|
|
(1,360,237
|
)
|
|
|
(2,905,679
|
)
|
|
|
-
|
|
|
|
(6,212,083
|
)
|
|
Depreciation
and amortization
|
|
|
(32,642
|
)
|
|
|
(70,596
|
)
|
|
|
(14,261
|
)
|
|
|
(203,287
|
)
|
|
|
(320,786
|
)
|
|
Operating
income (loss)
|
|
|
(9,529
|
)
|
|
|
(105,958
|
)
|
|
|
(1,365,616
|
)
|
|
|
(203,287
|
)
|
|
|
(1,684,390
|
)
|
|
General
and administrative
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(521,965
|
)
|
|
|
(521,965
|
)
|
|
Other
income (expenses)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,143,668
|
)
|
|
|
(1,143,668
|
)
|
|
Federal
& state income taxes
|
|
|
3,315
|
|
|
|
36,858
|
|
|
|
475,041
|
|
|
|
(544,881
|
)
|
|
|
(29,667
|
)
|
|
Net
income (loss)
|
|
$
|
(6,214
|
)
|
|
$
|
(69,100
|
)
|
|
$
|
(890,575
|
)
|
|
$
|
(2,413,801
|
)
|
|
$
|
(3,379,690
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six
Months Ended June 30, 2008
|
|
|
|
|
Real
Estate
|
|
|
Golf
|
|
|
Management
|
|
|
Corporate
|
|
|
Total
|
|
|
Revenue
|
|
$
|
3,765,324
|
|
|
$
|
1,214,132
|
|
|
$
|
2,593,862
|
|
|
$
|
-
|
|
|
$
|
7,573,318
|
|
|
Costs
of revenue
|
|
|
(3,692,344
|
)
|
|
|
(1,312,505
|
)
|
|
|
(2,977,574
|
)
|
|
|
-
|
|
|
|
(7,982,423
|
)
|
|
Depreciation
and amortization
|
|
|
(17,244
|
)
|
|
|
(61,105
|
)
|
|
|
(51,519
|
)
|
|
|
(203,287
|
)
|
|
|
(333,155
|
)
|
|
Operating
income (loss)
|
|
|
55,736
|
|
|
|
(159,478
|
)
|
|
|
(435,231
|
)
|
|
|
(203,287
|
)
|
|
|
(742,260
|
)
|
|
General
and administrative
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,071,645
|
)
|
|
|
(1,071,645
|
)
|
|
Other
income (expenses)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,406,592
|
|
|
|
5,406,592
|
|
|
Federal
& state income taxes
|
|
|
(20,824
|
)
|
|
|
59,583
|
|
|
|
162,609
|
|
|
|
(484,647
|
)
|
|
|
(283,279
|
)
|
|
Net
income (loss)
|
|
$
|
34,912
|
|
|
$
|
(99,895
|
)
|
|
$
|
(272,622
|
)
|
|
$
|
3,647,013
|
|
|
$
|
3,309,408
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Landmark
Land Company, Inc.
Notes
to Consolidated Financial Statements
9.
Recent Accounting Pronouncements
In May
2009, the FASB issued SFAS No. 165, “Subsequent Events.” The statement
establishes general standards of accounting for and disclosure of events that
occur after the balance sheet date but before the date that the financial
statements are issued or are available to be issued, and requires disclosure of
the date through which an entity has evaluated subsequent events and the basis
for that date. SFAS No. 165 is effective for interim and annual periods ending
after June 15, 2009, and therefore, was effective for the company this quarter.
The adoption of this pronouncement did not have a material impact on the
company’s consolidated financial position, results of operations or cash
flows. The additional disclosures required by this standard are included
in Note 1.
In June
2009, the FASB issued SFAS No. 166, “Accounting for Transfers of Financial
Assets.” The statement is a revision to SFAS No. 140, “Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities,” and will
require more information about transfers of financial assets, including
securitization transactions, and where there is continuing exposure to the risks
related to transferred financial assets. It eliminates the concept of a
“qualifying special-purpose entity,” changes the requirements for derecognizing
financial assets, and requires additional disclosures. SFAS No. 166 is effective
at the start of a company’s first fiscal year beginning after November 15, 2009
and early adoption is not permitted. The company is currently evaluating the
impact of the adoption of SFAS No. 166; however, it is not expected to have a
material impact on the company’s consolidated financial position, results of
operations or cash flows.
In June
2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation No.
46(R).” The statement is a revision to FASB Interpretation No. 46(R),
“Consolidation of Variable Interest Entities,” and changes how a company
determines when an entity that is insufficiently capitalized or is not
controlled through voting (or similar rights) should be consolidated. The
determination of whether a company is required to consolidate an entity is based
on, among other things, an entity’s purpose and design and a company’s ability
to direct the activities of the entity that most significantly impact the
entity’s economic performance. SFAS No. 167 is effective at the start of a
company’s first fiscal year beginning after November 15, 2009 and early adoption
is not permitted. The company is currently evaluating the impact the adoption of
SFAS No. 167 will have on its consolidated financial statements.
In June
2009, the FASB issued SFAS No. 168, “The FASB Accounting Standards Codification
and the Hierarchy of Generally Accepted Accounting Principles — a replacement of
FASB Statement No. 162.” SFAS No. 168 establishes the FASB Accounting Standards
Codification as the source of authoritative accounting principles recognized by
the FASB to be used in the preparation of financial statements of
nongovernmental entities that are presented in conformity with U.S. GAAP. SFAS
No. 168 is effective for financial statements issued for interim and annual
periods ending after September 15, 2009. The adoption of the SFAS No. 168 will
not impact the company’s consolidated financial position, results of operations
or cash flows.
Item
2.
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
Overview
The
company, through subsidiaries, owns and manages for others, interests in real
estate and golf oriented real estate developments. After a long
period of relative dormancy, the company acquired its first operating companies
in 2003 and has continued to rebuild its business through acquisitions and
expansion. The company’s current operating results are largely
dependent on real estate sales in its developments in Texas and
Barbados. The general economic recession in the US that began in late
2007 has hit the real estate market particularly hard. The company’s
properties are suffering along with most other real estate developments in the
US and abroad. Sales contracts already in the pipeline at the
end of 2007, particularly in the Apes Hill development in Barbados, generated
profitable sales for the company in 2008. However, new contracts in
2008 and in the first six months of 2009 were minimal. Although
prospective purchaser traffic has increased in our Texas development over the
last three months, most shoppers are still looking to find bargains at the
bottom of the market. We continue to liquidate existing inventories
of lots and houses at reduced profit margins and defer any significant
additional development until the market improves.
During
the second half of 2008 and the first half of 2009 the company has taken various
actions to reduce expenses and minimize operating
losses. Recognizing that, historically, personnel costs
have accounted for more than half of the company’s operating costs (excluding
the cost of real estate and merchandise sold), management has reduced the number
of employees by approximately 37% from 132 employees at June 30, 2008 to 83
employees at June 30, 2009. In the second quarter of 2009, the
company grounded its airplane and terminated employment of its
pilots. To further conserve cash, a portion of the salaries of
certain officers is being accrued with actual payment deferred until cash flow
improves. An affiliate of the company’s chairman and chief executive
officer loaned the company approximately $1.1 million in working capital
funds during the first half of 2009. Additional comments on the
company’s actions to manage its way through the current recession are included
in the liquidity and capital resources paragraphs below.
The
company’s consolidated statements of operations and cash flows for the six
months ended June 30, 2009 and 2008 include the operations of the company and
its subsidiaries identified in Note 1 to the Consolidated Financial
Statements. The loss reported in these statements for 2009
reflects the depressed real estate market described above. Year to
year comparisons should be analyzed carefully and historical results should not
be assumed to be indicative of the company’s future operations.
Management’s
additional analysis of the company’s operations during the three and six month
periods ended June 30, 2009 and 2008 and comments on its current financial
condition are as follows:
Liquidity
and capital resources
The
company anticipates a small profit from its Barbados affiliate in 2009, but
expects losses from its domestic operations. The cash flow generated
in Barbados is expected to be used to repay bank loans and/or to be reinvested
in continuing development of the Apes Hill property so that accumulated profits
are not expected to be available for distribution to the owners until 2010 or
2011. To reduce the anticipated 2009 cash flow shortfall from
domestic operations, the company has reduced operating expenses, including
reductions in personnel and deferral of payment of a portion of certain company
executives’ salaries as discussed in the overview above. Current
staffing levels remain adequate to service additional projects that the company
is pursuing. To meet the remaining cash flow shortfall, the
company has received a loan of approximately $1.1 million from an affiliate, has
applied for new lines of credit from banks operating in the Caribbean and is
exploring additional working capital loans from other sources; however, there is
no guarantee that additional funding will be received. If loans are
not received, or if our current bank lenders do not renew existing credits or if
affiliates should call their working capital loans, the company could be
required to make further reductions in personnel and to liquidate real estate or
other assets at prices less than would be expected under normal operating
conditions. The Consolidated Financial Statements do not reflect any
adjustments that might result from the outcome of these
uncertainties.
The
company’s Consolidated Balance Sheet at June 30, 2009 reports current assets
totaling $1.2 million and current liabilities totaling $18.0 million for a $16.8
million excess of current liabilities over current
assets. Approximately $12.5 million of the current liabilities is due
to two Texas banks that have funded the company’s South Padre real estate
development for the last ten years. One bank has renewed credit
lines totaling $2.0 million for another year to May 2010 and the other, whose
loans mature in July and August 2009, has agreed to renew on substantially the
same terms, except for a $1.0 million reduction in the maximum amount, reducing
its credit lines to $11.4 million. We do not expect the change to
have any significant impact on the company’s real estate
operations. Additionally, approximately $2.3 million of the current
liabilities is owed to affiliates who have advanced funds for working capital
and are not expected to demand repayment until the company’s liquidity position
improves.
Current assets
total $1.2
million at June 30, 2009 compared to $2.2 million at December 31, 2008,
reflecting, primarily, the collection of receivables and use of most of the cash
collected to pay operating expenses.
Real estate and golf management
contract rights acquired
remained unchanged during the first six months
of 2009. The only contract in this asset group with unamortized costs
relates to a property in the Hudson Valley of New York state. While
no fees are currently being realized from that contract as government approvals
are pending for the proposed development, the company expects to recover the
remaining unamortized costs from future construction supervision fees and profit
incentive fees.
Real estate
held for either
development or sale totaled $15.4 million at June 30, 2009 compared to $15.5
million at December 31, 2008, reflecting slightly less inventory added through
continuing construction than was sold during the period.
Property and equipment
decreased approximately $0.3 million, reflecting depreciation recorded in
the first half of 2009.
Other assets
are comprised
primarily of
investments in
unconsolidated affiliates
which decreased approximately $0.8 million in
the first half, reflecting losses recognized in Apes Hill, Landmark Spain, and
Presidential, and
deferred tax
assets
of $4.4 million which is discussed in Note 7.
Liabilities
totaled $22.8
million at June 30, 2009 – a net increase of approximately $1.2 million from
December 31, 2008. The increase results primarily from $1.1 million
borrowed from an affiliate for working capital.
The
company has no
off-balance
sheet arrangements
that have or are reasonably likely to have a material
current or future effect on the company’s financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures, or capital resources.
Stockholders’ equity
decreased by approximately $3.5 million in the first half of 2009,
reflecting primarily, the company’s net loss of $3.4 million and $0.1 million of
dividends declared, but not paid, on preferred stock.
There
were no commitments regarding purchase or sale of the company's stock at June
30, 2009; however, see Note 4 to the Consolidated Financial Statements regarding
stock options outstanding.
Revenue
Real estate sales
at South
Padre totaled 5 lots and 4 houses during the six months ended June 30, 2009,
generating $1.3 million in revenue, including 2 lots and 4 houses sold in the
three months ended June 30, 2009 for total sales of $1.2 million. In
the first six months of 2008, South Padre reported 2 lot sales and 14 house
sales generating $3.3 million in revenue, including 8 houses closed in the
second quarter for total sales of $1.7 million. The decrease in real
estate sales apparently reflects continuing apprehension about the global
recession. Although the stock market recovered some value during the
second quarter and a few ‘bottom fishers’ bought lots and houses at South Padre
during the second quarter, real recovery of the real estate market appears still
to be several months away.
Real estate services revenue
is comprised primarily of fees charged to homeowners’ associations for landscape
maintenance services, rents received from tenants in company owned houses that
were converted to rental property in 2008, and commissions and fees earned on
rental pool operations or on third-party real estate sales. Revenue
in the first half of 2009 totaled almost $0.7 million compared to $0.5 million
in the first half of 2008. In each year, approximately half the
revenue was earned in each of the two quarters. In prior years, HOA
reimbursement of costs related to the landscape operations were netted against
those costs in real estate operating expenses and revenues and costs related to
the rental pool operations were included in management and consulting
operations. As these operations are now more significant to South
Padre’s total operations, we are reporting the revenue from these real estate
related services separately. 2008 amounts have been reclassified to
conform to the 2009 classifications.
Golf
related revenue,
including food and beverage sold in golf restaurants, totaled $1.3 million
during the six months ended June 30, 2009. Paid golf rounds totaled
17,800. In the same period of 2008, golf rounds totaled 19,600 and
total revenue was $1.2 million. For the three months ended June 30,
2009, the company realized $0.7 million in revenue from 6,900 rounds, compared
to the same period of 2008 when we realized $0.6 million in golf revenue from
7,700 rounds played. The small increase in revenue in 2009 reflects
increased food and beverage sales by Lake Presidential Beverage Company which
opened May 1, 2008, partially offset by lower revenues in South
Padre.
The South
Padre golf course is a public, daily fee course, but is operated primarily as an
amenity for the surrounding real estate development. The company
anticipates phased development of the land surrounding the golf course to meet
future demand in this long-term development property. While the
company anticipates a good long-term real estate market and increases in golf
play as more golfers move into the residential community, the current depressed
real estate sales are evidence that buyer psychology and other factors outside
management’s control often affect golf and real estate operations.
Management and consulting
agreements generated $0.3 million in fee revenue in the three months ended June
30, 2009 compared to $0.7 million during the same period of 2008. For
the first half of 2009, fee revenue totaled $0.7 million compared to $1.8
million for the same period in 2008. The 2009 decrease reflects a
significant reduction in planning and construction fees earned in Barbados and
in South Padre and in consulting fees recognized in Spain. The
company was also reimbursed for out-of-pocket expenses related to its management
agreements during the six-month period in the amount of $0.8 million in both
2009 and 2008.
Costs
of revenues
Cost of real estate sold,
including land, development, construction, and closing costs, totaled
$0.8 million or 66% of sales in the second quarter of 2009 compared to $1.3
million or 75% of real estate sales in the same quarter of
2008. Costs for the six months ended June 30, 2009 were $0.9 million
or 65% of sales, compared to $2.3 million or 70% of sales in the same period of
2008. Gross profit margins are generally higher on lot
development than on vertical construction, but differ among various subdivision
lot developments and various house models as well; consequently, the gross
profit margin realized in any reporting period will vary according to the mix of
products sold during the period. The higher profit margin realized in
2009 reflects a higher percentage of lots sold as a percentage of total sales
and a higher percentage of harbor units sold as a percentage of total houses
sold.
Real estate operating expenses
not included in
cost of
real estate sold
totaled $0.5 million and $1.1 million respectively in
the three-month and six-month periods ended June 30, 2009 compared to $0.7
million and $1.4 million in the same period of 2008. The lower costs
in 2009 reflect additional reductions in personnel and in other costs, primarily
advertising and marketing, implemented in response to the continuing depressed
real estate market.
Cost of golf merchandise sold
in the three-month and six-month periods ending June 30, 2009 totaled
$47,000 (85% of sales) and $89,000 (79% of sales) respectively, compared to
$52,000 (71% of sales) and $103,000 (70% of sales) for the same periods of
2008. The increase in cost percentage of merchandise sold reflects
adjustments for the cost of missing or dated merchandise identified after a
change in golf management in the second quarter of 2009 as well as price mark
downs initiated to stimulate sales.
Cost of food and beverage
sold
in the three-month and six-month periods ending June 30, 2009
totaled $125,000 (37% of sales) and $207,000 (39% of sales) respectively,
compared to $86,000 (42% of sales) and $136,000 (43% of sales) in the same
periods of 2008. The increased dollar cost and improved cost
percentage reflects results from Lake Presidential Beverage Company that began
operations May 1, 2008.
Golf operating expenses
totaled $0.6 million in the second quarter of 2009 and $1.1 million for the
first half of 2009, which totals were approximately the same amounts as were
incurred in the same periods in 2008.
Management and consulting payroll
and related expenses
totaled $1.0 million and $2.1 million respectively
during the three-month and six-month periods ending June 30, 2009 compared to
$1.1 million and $2.2 million for the same periods in 2008. The
decreased cost reflects termination of several employees in 2009. The
2009 payroll expense includes approximately $0.2 million of salary due to
officers of the company, payment of which is being deferred until cash flow
improves.
Depreciation and amortization
included in the company’s consolidated statement of operations was $.3 million
in the six-month periods ended June 30, 2009 and 2008, with the cost divided
approximately equally between the two quarters in each year.
General,
administrative and other expense
General, administrative and other
expenses
totaled $0.3 million and $0.5 million respectively in the second
quarter and first half of 2009 compared to $0.5 million and $1.1 million in the
same periods of 2008. The decrease reflects, primarily, limited use
of the company airplane in the first four months of 2009, followed by no use in
May and June. In today’s severely depressed market for private
aircraft, the market value of the plane approximates current book
value. In anticipation of additional real estate opportunities in the
Caribbean and improved aircraft market conditions, the company plans to leave
the plane grounded as we evaluate alternatives, including possible
sale.
Other
income and expense
Equity in profit (loss) of
unconsolidated affiliates
reflects the company’s share of the operating
profits or losses of the following unconsolidated affiliates:
|
|
|
|
|
|
Three
Months Ended June 30,
|
|
|
Six
Months Ended June 30,
|
|
|
|
|
Ownership
|
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
|
Landmark
Developments of Spain, S.L.
|
|
|
50%
|
|
|
$
|
(23,259
|
)
|
|
$
|
45,964
|
|
|
$
|
(30,475
|
)
|
|
$
|
(144,379
|
)
|
|
Apes
Hill Development SRL
|
|
|
33%
|
|
|
|
(249,642
|
)
|
|
|
334,116
|
|
|
|
(639,546
|
)
|
|
|
5,826,940
|
|
|
Presidential
Golf Club, LLC
|
|
|
7.45%
|
|
|
|
(130,792
|
)
|
|
|
-
|
|
|
|
(130,792
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
$
|
(403,693
|
)
|
|
$
|
380,080
|
|
|
$
|
(800,813
|
)
|
|
$
|
5,682,561
|
|
The
profits reported by Apes Hill Development SRL in the first half of 2008 resulted
from sales of developed lots to buyers who had signed purchase contracts over
the preceding two-year development period. The global recession has
affected real estate sales in Barbados with few new contracts in 2008 and
2009. Apes Hill has sales contracts totaling approximately US $31.4
million in the pipeline at June 30, 2009, some of which were expected to close
in the first half of the year; however, the recession has also caused delays in
closing some of these existing contracts.
Interest income
decreased
from $15,000 and $49,000 in the second quarter and first half of 2008 to less
than $1,000 in 2009, reflecting the use of cash to pay current operating costs
leaving no excess cash balances invested in overnight funds.
Interest expense
totaled
$191,000 in the second quarter and $343,000 in the first half of 2009 compared
to $148,000 and $325,000 in the same periods last year. The increase
in 2009 reflects, primarily, increased borrowing from an affiliate to fund
current operations.
Federal
and state income taxes
The
company reported a loss before income taxes of $1.6 million in the second
quarter of 2009 and $3.4 million for the first half of the year. The
provision for federal and state income taxes reflects a net provision of $30,000
for the six months ended June 30, 2009 and is comprised of current state taxes.
Deferred federal and state tax benefits generated by the 2009 loss were offset
by an increase in the deferred tax valuation allowance as discussed in Note 7 to
the financial statements. In 2008 the company realized income before
taxes of $3.6 million in the first six months of the year and provided for
federal and state income taxes in the amount of $0.3 million.
Critical
accounting estimates
Future
realization of the company’s significant deferred tax asset is dependent on its
ability to generate taxable income in future years. The company has
established a valuation allowance to reduce the carrying value of the asset to
an amount likely to be realized. While estimates of future income are
always uncertain, the diversification of the company’s investments into foreign
real estate affiliates makes current estimates even more
challenging. Realization of the tax asset will be significantly
affected by, among other factors, whether the new investments are profitable and
whether or when those profits are taxable in the U.S. Any significant
change in the various factors affecting the company’s expectations of future
taxable earnings could require a change in the valuation allowance. Any change
in the valuation allowance is reflected in the company’s operating statement for
the period such change is recognized.
Item
3.
Quantitative
and Qualitative Disclosures About Market Risk
N/A
Item
4.
Controls
and Procedures
The
company maintains disclosure controls and procedures designed to ensure that
information required to be disclosed in reports filed under the Securities
Exchange Act of 1934 (“Exchange Act”) is recorded, processed, summarized and
reported within the specified time periods. The company’s Chief
Executive Officer and its Chief Financial Officer (collectively, the “Certifying
Officers”) are responsible for maintaining disclosure controls for the
company. The controls and procedures established by the company are
designed to provide reasonable assurance that information required to be
disclosed by the issuer in the reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the Commission’s rules and forms.
As of the
end of the period covered by this report, the Certifying Officers evaluated the
effectiveness of the company’s disclosure controls and
procedures. Based on the evaluation, the Certifying Officers
concluded that as of June 30, 2009, the company’s disclosure controls and
procedures were effective to provide reasonable assurance that information
required to be disclosed by us in the reports that we file or submit under the
Exchange Act is recorded, processed, summarized and reported, within the time
periods specified in the applicable rules and forms, and that it is accumulated
and communicated to our management, including the Certifying Officers, as
appropriate to allow timely decisions regarding required
disclosure.
The
Certifying Officers have also concluded that there was no change in the
company’s internal controls over financial reporting identified in connection
with the evaluation that occurred during the company’s second fiscal quarter
that has materially affected, or is reasonably likely to materially affect, the
company’s internal control over financial reporting.
PART
II – OTHER INFORMATION
Item
1.
Legal
Proceedings
The
company is not currently involved in any pending legal proceedings, except for
routine litigation that is incidental to the company's business.
Item
6.
Exhibits
|
|
10.1*
|
Third
Amended and Restated Loan Agreement between Apes Hill Development SRL and
BNB Finance & Trust Corporation, et. al., executed December,
2007
|
|
|
10.2*
|
Amendment
to Loan Agreement between South Padre Island Development, LLC (formerly
known as South Padre Island Development, L.P.) and Compass Bank (formerly
known as Texas State Bank) effective May 1,
2009.
|
|
|
10.3*
|
Extension
of Real Estate Note and Lien between South Padre Island Development, LLC
and Compass Bank effective as of May 1, 2009 (Original Loan Amount of
$4,000,000)
|
|
|
10.4*
|
Extension
of Real Estate Note and Lien between South Padre Island Development, LLC
and Compass Bank effective as of May 1, 2009 (Original Loan Amount of
$1,507,000)
|
|
|
10.5*
|
Promissory
Note from DPMG, Inc. to Newco XXV, Inc in the amount of $400,000.00 dated
March 30, 2009
|
|
|
10.6*
|
Promissory
Note from DPMG, Inc. to Newco XXV, Inc in the amount of $200,000.00 dated
February 26, 2009
|
|
|
10.7*
|
Promissory
Note from DPMG, Inc. to Newco XXV, Inc in the amount of $200,000.00 dated
February 17, 2009
|
|
|
10.8*
|
Promissory
Note from DPMG, Inc. to Newco XXV, Inc in the amount of $200,000.00 dated
February 3, 2009
|
|
|
10.9*
|
Promissory
Note from DPMG, Inc. to Newco XXV, Inc in the amount of $200,000.00 dated
December 12, 2008
|
|
|
10.10*
|
Real
Estate Lien Note from South Padre Island Development, LLC to International
Bank of Commerce dated August 29, 2007 in the sum of
$4,500,000.00
|
|
|
10.11*
|
Extension
and/or Modification Agreement between South Padre Island Development,
LLC and International Bank of Commerce dated January 17, 2008
(Outstanding Principal Balance of
$4,536,848.94)
|
|
|
10.12*
|
Evidence
of Indebtedness effective October 1, 2004 from South Padre Island
Development, LLC (“Maker”) to Newco XXV, Inc. (“New Payee) in the
principal amount of $558,475.32
|
|
|
10.13*
|
Evidence
of Indebtedness effective August 31, 2003 from Delos Partners, Inc., a
wholly-owned subsidiary of DPMG, Inc. to Newco XXV, Inc. in the principal
amount of $333,599.47
|
|
|
10.14*
|
Adjustable
Rate Note dated February 6, 2002 in the sum of $100,000.00 from KES, Inc.
(“Maker”) to John David Davenport
(“Payee”)
|
|
|
10.15*
|
Adjustable
Rate Note dated September 11, 2001 in the sum of $100,000.00 from KES,
Inc. (“Maker”) to John David Davenport
(“Payee”)
|
|
|
10.16*
|
Adjustable
Rate Note dated May 11, 2001 in the sum of $100,000.00 from KES, Inc.
(“Maker”) to John David Davenport
(“Payee”)
|
|
|
10.17*
|
Promissory
Note dated December 16, 2002 in the sum of $600,000.00 from DPMG, Inc.
(“Maker”) to GRG Corp. (“Payee”)
|
|
|
10.18*
|
Promissory
Note from DPMG, Inc. to Newco XXV, Inc in the amount of $110,000.00 dated
June 26, 2009
|
|
|
10.19*
|
Promissory
Note dated January 11, 2007 from DPMG, Inc. to Key Equipment Finance Inc.,
in the amount of $3,900,000.00
|
|
|
31.1*
|
Certification
of the Chief Executive Officer filed pursuant to Section 302 of the
Sarbanes-Oxley Act of 2004
|
|
|
31.2*
|
Certification
of the Chief Financial Officer filed pursuant to Section 302 of the
Sarbanes-Oxley Act of 2004
|
|
|
32.1*
|
Certification
of the Chief Executive Officer filed pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2004
|
|
|
32.2*
|
Certification
of the Chief Financial Officer filed pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2004
|
|
|
__________________________
|
Signatures
and Certifications of the Chief Executive Officer and the Chief Financial
Officer of the Company
The
following pages include the Signatures page for this report and Exhibits
containing the Certifications of the Chief Executive Officer and the Chief
Financial Officer of the company.
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.
|
LANDMARK
LAND COMPANY, INC.
|
|
|
|
|
|
|
|
/s/ Gerald G. Barton
|
|
Gerald
G. Barton
|
|
Chairman
and Chief Executive Officer
|
|
August
13, 2009
|
|
LANDMARK
LAND COMPANY, INC.
|
|
|
|
|
|
|
|
/s/ Joe V. Olree
|
|
Joe
V. Olree
|
|
Senior
Vice President and Chief Financial Officer
|
|
August
13, 2009
|
LANDMARK
LAND COMPANY, INC.
FORM
10-Q
EXHIBIT INDEX
Exhibit
Number
|
|
Third
Amended and Restated Loan Agreement between Apes Hill Development SRL and
BNB Finance & Trust Corporation, et. al., executed December,
2007
|
|
|
|
|
|
Amendment
to Loan Agreement between South Padre Island Development, LLC (formerly
known as South Padre Island Development, L.P.) and Compass Bank (formerly
known as Texas State Bank) effective May 1, 2009
|
|
|
|
|
|
Extension
of Real Estate Note and Lien between South Padre Island Development, LLC
and Compass Bank effective as of May 1, 2009 (Original Loan Amount of
$4,000,000)
|
|
|
|
|
|
Extension
of Real Estate Note and Lien between South Padre Island Development, LLC
and Compass Bank effective as of May 1, 2009 (Original Loan Amount of
$1,507,000)
|
|
|
|
|
|
Promissory
Note from DPMG, Inc. to Newco XXV, Inc in the amount of $400,000.00 dated
March 30, 2009
|
|
|
|
|
|
Promissory
Note from DPMG, Inc. to Newco XXV, Inc in the amount of $200,000.00 dated
February 26, 2009
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Promissory
Note from DPMG, Inc. to Newco XXV, Inc in the amount of $200,000.00 dated
February 17, 2009
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Promissory
Note from DPMG, Inc. to Newco XXV, Inc in the amount of $200,000.00 dated
February 3, 2009
|
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Promissory
Note from DPMG, Inc. to Newco XXV, Inc in the amount of $200,000.00 dated
December 12, 2008
|
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Real
Estate Lien Note from South Padre Island Development, LLC to International
Bank of Commerce dated August 29, 2007 in the sum of
$4,500,000.00
|
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Extension
and/or Modification Agreement between South Padre Island Development,
LLC and International Bank of Commerce dated January 17, 2008
(Outstanding Principal Balance of $4,536,848.94)
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Evidence
of Indebtedness effective October 1, 2004 from South Padre Island
Development, LLC (“Maker”) to Newco XXV, Inc. (“New Payee) in the
principal amount of $558,475.32
|
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Evidence
of Indebtedness effective August 31, 2003 from Delos Partners, Inc., a
wholly-owned subsidiary of DPMG, Inc. to Newco XXV, Inc. in the principal
amount of $333,599.47
|
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Adjustable
Rate Note dated February 6, 2002 in the sum of $100,000.00 from KES, Inc.
(“Maker”) to John David Davenport (“Payee”)
|
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Adjustable
Rate Note dated September 11, 2001 in the sum of $100,000.00 from KES,
Inc. (“Maker”) to John David Davenport (“Payee”)
|
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Adjustable
Rate Note dated May 11, 2001 in the sum of $100,000.00 from KES, Inc.
(“Maker”) to John David Davenport (“Payee”)
|
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Promissory
Note dated December 16, 2002 in the sum of $600,000.00 from DPMG, Inc.
(“Maker”) to GRG Corp. (“Payee”)
|
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Promissory
Note from DPMG, Inc. to Newco XXV, Inc in the amount of $110,000.00 dated
June 26, 2009
|
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Promissory
Note dated January 11, 2007 from DPMG, Inc. to Key Equipment Finance Inc.,
in the amount of $3,900,000.00
|
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Certification
of the Chief Executive Officer filed pursuant to Section 302 of the
Sarbanes-Oxley Act of 2004
|
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Certification
of the Chief Financial Officer filed pursuant to Section 302 of the
Sarbanes-Oxley Act of 2004
|
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Certification
of the Chief Executive Officer filed pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2004
|
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Certification
of the Chief Financial Officer filed pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2004
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______________________
* Filed
herewith
Landmark Land (CE) (USOTC:LLND)
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