UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM 10-K
---------
FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTIONS 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004
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 1-8254
THACKERAY CORPORATION
---------------------
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 04-2446697
-------- ----------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
350 FIFTH AVENUE, NEW YORK, NEW YORK 10118
-------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (212) 564-3393
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: COMMON STOCK, $.10
PAR VALUE
_______________________
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES X NO
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy materials or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). YES NO X
--- ---
Aggregate market value of the voting stock (which consists solely of shares of
Common Stock) held by non-affiliates of the registrant as of January 25, 2005
computed by reference to the last average bid and asked price of the
registrant's Common Stock on the OTC Bulletin Board on such date $495,725.
Number of shares of the registrant's Common Stock outstanding as of March 21,
2005: 5,107,401
2
CAUTIONARY STATEMENT FOR PURPOSE OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995
This Annual Report contains "forward looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. Such forward looking
statements are based upon management's expectations, estimates, projections and
assumptions. Words such as "expects", "anticipates", "intends", "plans",
"believes", "estimates", and variations of such words and similar expressions
are intended to identify such forward looking statements. These forward looking
statements are subject to risks and uncertainties which could cause the
Company's actual results or performance to differ materially from those
expressed or implied in such statements. These factors include, among others,
the risk that we may incur additional liabilities in connection with our
liquidation, that our expenses may be higher than estimated and that the
settlement of our liabilities could be higher than expected, all of which would
reduce the distributions to our stockholders. Although we believe that the
expectations reflected in any forward-looking statements are reasonable, we
cannot guarantee future events or results. Except as may be required under
federal law, we undertake no obligation to update publicly any forward-looking
statements for any reason, even if new information becomes available or other
events occur.
PART I
Item 1. BUSINESS
DESCRIPTION OF BUSINESS
Thackeray Corporation ("Thackeray" or the "Company") was incorporated
in the State of Delaware on July 14, 1981. Historically, Thackeray's business
has been the management of real estate investments. As described below, the
Company has sold substantially all of its assets, filed a Certificate of
Dissolution and is in the process of completing its liquidation.
In 1996, the Company and affiliates of Belz Enterprises ("Belz")
entered into an Agreement of Limited Partnership of BT Orlando Limited
Partnership (the "Partnership"). Pursuant to this agreement, the Company agreed
to contribute approximately 140 acres of property in Orlando, Florida to the
Joint Venture (JV) Partnership. The JV has been in the process of developing,
constructing and leasing an approximately 925,000 square foot retail and
entertainment shopping center complex - Festival Bay - on the property, which is
to consist of 655,000 sq.ft. of anchor and other perimeter tenants and 270,000
sq.ft of interior small stores. The Company and Belz also entered into a letter
agreement in 1996 regarding the development of the remaining approximately 78
acres of the Company's Orlando, Florida property. Pursuant to this letter
agreement, the parties agreed to form a new partnership to develop 22.5 acres of
such property as commercial property and 55.5 acres thereof as multi-family
residential property. Additionally, under the terms of this letter agreement,
the Company and Belz, or one of its affiliates, would be 50% owners and general
partners of such partnership, and the Company would be entitled to certain
preferential distributions.
3
In September 1999, the Company's real estate Partnership closed $40
million of construction financing and simultaneously the Company deeded 140
acres of its Orlando, Florida acreage to the Partnership and also pledged its
remaining contiguous 78 acres as additional collateral to secure the
construction loan.
Development efforts largely were completed mid - 2003. A 20 screen
Cinemark theatre opened in December 1999, a Bass Pro 163,000 sq.ft. anchor store
opened in June 2000, and a 50,000 sq. ft. Van's Skate Park opened in January
2002. Leases for approximately 65% of the mall have been executed as of December
31, 2004.
The $40 million construction loan was refinanced in October 2001 and
additional financing was obtained by the real estate Partnership as part of a
$104.3 million third party facility. In connection with the financing, the
partnership agreement was materially revised and amended to provide for certain
adjustments to the economic rights and obligations of the partners. In
accordance with the August 2001 revision to the partnership agreement, the
Company contributed $1.75 million to the Partnership capital and Belz
contributed $12.1 million. In addition to the $12.1 million, Belz contributed
$9.3 million through December 31, 2001, which is entitled to a 9% annual,
cumulative, uncompounded preferential return and is senior to all prior
Partnership investments of the Company and Belz, which investments are not
entitled to a preferential return subsequent to July 2001.
The Partnership experienced a slow down in rental activity by mid-year
2001, which worsened in the wake of the September 11 terrorist attacks. Orlando
tourism was adversely effected and theme park attendance and hotel occupancy
rates dropped substantially and did not return to pre 9/11 levels until 2004
(per Global Insight, Inc. and Amusement Business Trade Association). According
to the Florida Retail Federation, its Florida Retail Index halted its descent in
mid year 2003 and turned around with positive results for three consecutive
quarters in 2003 and through all of 2004. The Orlando region is the second
highest regional component of the Index.
Pursuant to an August 2001 letter agreement by the partners concerning
the future development by the partners of the approximately 78 acres owned by
Thackeray, which are contiguous to the 140 Festival Bay acres, the partners were
to agree upon conceptual construction plans, an overall development plan and a
development budget for the 78 acres on or before June 30, 2003. In the absence
of such an agreement between the parties, the August 2001 letter agreement
automatically terminated. June 30, 2003 passed without such a mutual
understanding, thereby voiding the agreement and any rights Thackeray's partners
may have had to the contiguous 78 acres.
The Partnership was in default of provisions of its credit agreement as
amended, which required certain annualized operating income and small store
lease levels be achieved by October 2003. The lenders under the credit agreement
and the mezzanine lender waived such defaults and an amendment to such
provisions was agreed to in January 2004. The amendment extended the maturity
date of the credit agreement and that of the mezzanine loan from October 1, 2004
to January 2, 2005, but provided for an additional extension of one year to
January 2, 2006 if, by November 30, 2004, the Partnership was receiving monthly
base rent from signed leases of $800,000 and had achieved an 80% occupancy rate
from tenants open for business. The Partnership was unable to satisfy both of
the November 30, 2004 requirements.
4
On July 23, 2004, the Company entered into an agreement for the sale of
its 35% general partner interest in the Partnership and approximately 78 acres
of undeveloped land in Orlando, Florida, constituting substantially all of its
assets, to EST Orlando, Ltd., a limited partner of the Partnership, for
$6,250,000.
On December 10, 2004, the Company announced that, following its receipt
of the requisite stockholder approval at a Special Meeting of its Stockholders,
it had completed the sale of substantially all of its assets to EST Orlando. The
Company's stockholders also approved a plan for the dissolution and complete
liquidation of the Company. Thackeray will proceed to implement its plan of
liquidation and dissolution, pursuant to which its remaining net cash, after
payment of all liabilities and expenses, will be distributed to its
stockholders.
Additionally, on December 10, 2004, the Company and EST Orlando entered
into an agreement relating to the potential resale of the Orlando property
purchased on December 10, 2004 by EST Orlando from the Company.
Pursuant to this agreement, the parties have agreed that if EST Orlando
sells the Orlando property to a designated unrelated third party or any entity
affiliated with that party pursuant to an agreement entered into by December 10,
2005, Thackeray would be entitled to receive additional consideration from EST
Orlando for its sale of the Orlando property. The additional consideration would
be equal to fifty percent (50%) of EST Orlando's profit (as defined) from the
resale. The Company has been advised that EST Orlando has entered into an
agreement relating to the resale of the Orlando property, which sale was
consummated on March 16, 2005. Thackeray received $700,000, subject to certain
post-closing adjustments, in additional consideration for the Orlando property
as a result of such sale.
On January 12, 2005, the Company made an initial liquidating
distribution of $0.80 per share to holders of record of its common stock as of
January 11, 2005. Thackeray's stock transfer books were closed as of the close
of business on January 11, 2005, and no further stock transfers will be
recognized. It is anticipated that a final liquidating distribution will be made
in approximately six months following this initial distribution.
Additionally, on January 12, 2005, the Company filed a Certificate of
Dissolution with the Secretary of State of the State of Delaware.
INDEBTEDNESS
The Company has no outstanding borrowings.
GENERAL
As of December 31, 2004, the Company had two employees.
5
Item 2. PROPERTIES
For additional information with respect to the Company's previous
investments in real estate and to its lease obligations, see Notes 1, 2, and 5
to the Consolidated Financial Statements included herein.
Thackeray's executive offices are located at 350 Fifth Avenue, New
York, New York 10118. Since February 2005, Thackeray has been renting these
offices on a month-to-month basis at $1,000 per month.
Item 3. LEGAL PROCEEDINGS
There are no legal proceedings currently pending against the Company or
its subsidiary.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF STOCKHOLDERS
On December 10, 2004 the Company's stockholders, at a Special Meeting
of Stockholders, approved the sale of substantially all of its assets to EST
Orlando, Ltd. and the Plan of Complete Liquidation and Dissolution of Thackeray
as well as the liquidation and dissolution of Thackeray contemplated thereby.
The holders of 3,320,150 shares, being a majority of the outstanding
shares, voted in favor of the sale to EST Orlando, the holders of 420,241 shares
voted against the sale, the holders of 1,810 shares abstained, and there were 0
broker non-votes.
The holders of 3,531,425 shares, being a majority of the outstanding
shares, voted in favor of the dissolution and liquidation of the Company, the
holders of 209,425 shares voted against the dissolution and liquidation of the
Company, the holders of 1,680 shares abstained, and there were 0 broker
non-votes.
6
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON STOCK, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
Since October 16, 2002, the Company's common stock has been traded on
the Over the Counter Bulletin Board under the Symbol "THKY". Prior thereto, the
Company's common stock was traded on the American Stock Exchange under the
Symbol "THK".
Quarter Ended
March 31 June 30 September 30 December 31
2004 High $1.38 $1.60 $1.60 $1.05
Low 0.95 1.30 1.05 0.87
2003 High 1.55 1.65 1.47 1.18
Low 1.25 1.20 1.11 0.81
As of the close of business on January 11, 2005, the date on which
Thackeray's stock transfer books were closed, there were approximately 1,300
holders of record of Thackeray's common stock.
During the three years ended December 31, 2004, no dividends were paid
on Thackeray's common stock. On January 12, 2005, Thackeray made an initial
liquidating distribution of $0.80 per share to holders of record of its common
stock as of January 11, 2005.
7
Item 6. SELECTED FINANCIAL DATA
FIVE YEAR SUMMARY
The following tabulation presents selected financial data for Thackeray
for each of the five years in the period ended December 31, 2004 (amounts stated
in thousands except for per share data):
2004 2003 2002 2001 2000
- ----------------------------------------- ----------- ----------- ----------- ---------- ----------
Real estate revenues $ --- $ --- $ --- $ --- $ ---
- ----------------------------------------- ----------- ----------- ----------- ---------- ----------
Net income (loss) 3,156 (383) (1,349) (3,552) (2,491)
- ----------------------------------------- ----------- ----------- ----------- ---------- ----------
Net income (loss) per share .62 (.07) (.26) (.70) (.49)
- ----------------------------------------- ----------- ----------- ----------- ---------- ----------
Total assets 6,504 3,310 3,978 5,183 8,907
- ----------------------------------------- ----------- ----------- ----------- ---------- ----------
Real estate assets --- 1,951 1,951 2,506 4,004
- ----------------------------------------- ----------- ----------- ----------- ---------- ----------
Stockholders' equity 6,382 3,226 3,609 4,805 8,510
- ----------------------------------------- ----------- ----------- ----------- ---------- ----------
QUARTERLY FINANCIAL DATA (UNAUDITED)
Financial date for interim periods were as follows (amounts stated in
thousands except for per share data):
2004 MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31
- ----------------------------------------- ------------ ---------- --------------- -------------
Real estate revenues $ --- $ --- $ --- $ ---
- ----------------------------------------- ------------ ---------- --------------- -------------
Income (loss) from real estate --- --- --- ---
- ----------------------------------------- ------------ ---------- --------------- -------------
Net income (loss) (153) (185) (347) 3,841
- ----------------------------------------- ------------ ---------- --------------- -------------
Net income (loss) per share (.03) (.04) (.07) .76
- ----------------------------------------- ------------ ---------- --------------- -------------
2003
- ----------------------------------------- ------------ ---------- --------------- -------------
Real estate revenues $ --- $ --- $ --- $ ---
- ----------------------------------------- ------------ ---------- --------------- -------------
Loss from real estate --- --- --- ---
- ----------------------------------------- ------------ ---------- --------------- -------------
Net income (loss) (134) (186) (164) 101
- ----------------------------------------- ------------ ---------- --------------- -------------
Net income (loss) per share (.03) (.04) (.03) .03
- ----------------------------------------- ------------ ---------- --------------- -------------
Reference should be made to the Notes to the Consolidated Financial Statements
and Management's Discussion and Analysis of Financial Condition and Results of
Operations.
8
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
On July 23, 2004, the Company entered into an agreement for the sale of
its 35% general partner interest in BT Orlando Limited Partnership (the
"Partnership") and approximately 78 acres of undeveloped land in Orlando,
Florida, constituting substantially all of its assets, to EST Orlando, Ltd., a
limited partner of the Partnership, for $6,250,000.
On December 10, 2004, the Company, following its receipt of the
requisite stockholder approval at a Special Meeting of its Stockholders,
completed the sale of substantially all of its assets to EST Orlando. The
Company's stockholders also approved a plan for the dissolution and complete
liquidation of the Company. Thackeray is proceeding to implement its plan of
liquidation and dissolution, pursuant to which its remaining net cash, after
payment of all liabilities and expenses, will be distributed to its
stockholders. Reference is made to Item 1 - "Business" for further information
concerning the sale of the Company's assets and its liquidation.
At December 31, 2004, the Company had no commitments for capital
expenditures. The Company believes that its current cash balance will be
sufficient to fund all of its remaining expenses to complete its liquidation.
DISCLOSURE OF CONTRACTUAL OBLIGATIONS
The following table reflects contractual obligations as of December 31,
2004:
Contractual Obligations Total
- ----------------------- -----
Long -Term Debt Obligations............................ -----
Capital Lease Obligations.............................. -----
Operating Lease Obligations (all due in 2005).......... $2,000
Purchase Obligations................................... -----
Other Long-Term Liabilities Reflected on the
Balance Sheet under GAAP............................ -----
Operating Lease Obligations relates to the Company's lease for office
space for January 2005.
RESULTS OF OPERATIONS
2004 vs. 2003
General and Administrative expenses for 2004 were $1,030,000 versus
$398,000 in 2003. The increase resulted exclusively from higher professional
fees, insurance, proxy, fairness opinion and other costs relating to the
liquidation of the business.
9
Net income in 2004 of $3,156,000 as compared with a $383,000 loss in
2003 is attributable exclusively to the combined gain in 2004 on the sale of the
Company's real estate and its partnership interest of $4,170,000.
2003 vs. 2002
The Company did not share in the net losses of the Partnership during
2003 as its investment in and advances to the Partnership were reduced to zero
in 2002.
General and administrative expenses for 2003 are stated net of a
write-off of previously over accrued liabilities, principally taxes, of
approximately $300,000. Remaining general and administrative expenses were
largely unchanged from those of 2002 with the exception of insurance which
increased approximately $50,000 in 2003 vs. 2002.
Interest income was $15,000 in 2003 and $34,000 in 2002. The decrease
results from the Company's maintaining lower available cash investment balances
and receiving lower yield on invested funds.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not Applicable.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See "List of Financial Statements and Financial Statement Schedules" commencing
on Page F-1 hereof.
Item 9. CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
10
Item 9A. CONTROLS AND PROCEDURES
(a) The Company's management evaluated, with the participation of the
Company's principal executive and principal financial officers, the
effectiveness of the Company's disclosure controls and procedures (as defined in
Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), as of December 31, 2004. Based on their
evaluation, the Company's principal executive and principal financial officers
concluded that the Company's disclosure controls and procedures were effective
as of December 31, 2004.
(b) There has been no change in the Company's internal control over
financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act) that occurred during the Company's fiscal quarter ended December
31, 2004, that has materially affected, or is reasonably likely to materially
affect, the Company's internal control over financial reporting.
Item 9B. OTHER INFORMATION
Not applicable.
11
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS
The Board of Directors consists of three members, each of whom has been
elected to hold office until the next Annual Meeting of Stockholders and until
their successors are duly elected and qualified.
The following table sets forth certain information regarding the
members of the Company's Board of Directors and Executive Officers. Except as
otherwise indicated, each has held his present principal occupation for the past
five years.
- --------------------------------------------------------------------------------
Name, Age (at March 1, 2005) and Principal Occupation
Position Held With the Company
- --------------------------------------------------------------------------------
Martin J. Rabinowitz (1), 73 Chairman of the Board (since 1986)
and President (since 1987);
Principal, Taconic Investment
Partners (since 1998); Managing
member RFIA Holdings LLC, a private
investment company (since 1998);
Limited Partner of Odyssey, an
investment partnership, New York,
NY (since 1993; previously general
partner); Director and Chairman of
the Board, Eagle Food Centers Inc.
(1992-1998)
- --------------------------------------------------------------------------------
Jules Ross (1), 72 Vice President, Finance, Treasurer
(since 1990) and Secretary (since
1991); previously Principal of
Odyssey (1987-1997)
- --------------------------------------------------------------------------------
Ronald D. Rothberg (2), 58 President, The RDR Group Inc., a
private investment company (since
1988)
- --------------------------------------------------------------------------------
- --------------------
(1) Member of the Company's Executive Committee and Nominating Committee.
(2) Member of Company's Audit Committee.
No family relationships exist between any director or executive officer
of the Company. There are no executive officers of the Company other than those
named above. Officers are generally elected annually at the first meeting of the
directors of the Company following the Annual Meeting of Stockholders
None of the present directors is a director of any company with a class
of securities registered pursuant to Section 12 of the Securities Exchange Act
of 1934 or subject to the requirements of Section 15(d) of that Act or any
company registered as an investment company under the Investment Company Act of
1940, except as indicated above.
12
ADDITIONAL INFORMATION
The Board of Directors held a total of six meetings during 2004.
The Company has a standing Nominating Committee and Audit Committee,
but has no standing Compensation Committee.
The Audit Committee is responsible for overseeing the Company's
financial reporting process on behalf of the Board. As part of its duties it
selects the Company's independent auditors, which selection is then ratified by
the Board. The Audit Committee analyzes the reports of such auditors,
periodically reviews the adequacy of the Company's internal financial controls,
periodically reviews the terms of material transactions between the Company and
its affiliates and subsidiaries, and makes such recommendations to the Board
with respect thereto as such committee may deem advisable. The Audit Committee
has considered whether the independent auditors' provision of non-audit services
to the Company is compatible with maintaining the auditors' independence. Ronald
D. Rothberg who is "independent" under the listing standards of the Nasdaq Stock
Market, is the sole member of the Audit Committee. While Mr. Rothberg is
financially literate and has finance experience, he is not deemed an "audit
committee financial expert" within the meaning of Securities and Exchange
Commission regulations. Given the limited resources of the Company, and the
qualifications of the existing Committee member, the Board of Directors has
determined not to devote resources to locating a suitable "audit committee
financial expert" to serve on the Audit Committee. The Audit Committee met twice
in 2004.
The Nominating Committee makes recommendations regarding nomination of
candidates for election as directors. The Committee's members are Martin J.
Rabinowitz and Jules Ross. The members of the Nominating Committee are not
independent as defined by applicable listing standards of the Nasdaq Stock
Market. There was one meeting of the Nominating Committee in 2004. If sent by
mail, addressed to the Secretary of the Company at the offices of the Company,
350 Fifth Avenue, Suite 2723, New York, NY 10118, the Committee will review
stockholder recommendations for nominees for election as directors, provided
that the recommendation is accompanied by a resume outlining the proposed
nominee's business and professional qualifications and a statement of the facts
which cause the stockholder to believe that the nomination of such person would
serve the best interests of the Company. Board candidates are considered based
upon various criteria, such as their business and professional skills and
experiences, including particular experience in areas relevant to the Company's
business activities, concern for the long-term interests of the stockholders,
and personal integrity and judgment. In addition, directors must have time
available to devote to Board activities. Accordingly, the Company seeks to
attract and retain highly qualified directors who have sufficient time to attend
to their duties and responsibilities to the Company, and the Nominating
Committee will review all candidates in the same manner, regardless of the
source of the recommendation. The Company, however, will not be holding an
Annual Meeting in 2005, since it is in the process of liquidating and has filed
a Certificate of Dissolution.
13
The Company has adopted charters for its Audit Committee and Nominating
Committee and a Code of Ethics that applies to its Chief Executive Officer,
Chief Financial Officer and other senior officers.
The Board of Directors provides a process for stockholders to send
communications to the Board. Stockholders may send written communications
directly to Martin Rabinowitz. Stockholders who wish to send communications to
the independent director may send communications directly to Ronald Rothberg.
Such communications should be addressed to them c/o Thackeray Corporation, 350
Fifth Avenue, New York, NY 10118.
The Board encourages each member of the Board to attend each annual
meeting of stockholders. Each of Messrs. Rabinowitz, Ross and Rothberg attended
the 2004 Annual Meeting of Stockholders.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company believes that all reports required to be filed during 2004
by the Company's executive officers, directors and beneficial owners of 10% or
more of the Company's common stock, pursuant to Section 16(a) of the Securities
and Exchange Act of 1934, as amended, and the rules promulgated thereunder, were
timely filed.
Item 11. EXECUTIVE COMPENSATION
The Company qualifies as a "small business issuer" under the rules of
the Securities and Exchange Commission and, accordingly, the information in this
section is furnished in accordance with the rules applicable to such issuers.
SUMMARY COMPENSATION TABLE
The following table sets forth information with respect to the
compensation of the Chief Executive Officer for services in all capacities to
the Company and its subsidiaries in 2004, 2003 and 2002. One executive officer
had compensation during the fiscal years ended December 31, 2004, 2003, and 2002
in excess of $100,000.
14
- ------------------------------------------------------------------------------- ----------------------------------------------------
Annual Compensation Long Term Compensation
- ------------------------------------------------------------------------------- ----------------------------------------------------
Awards Payouts
- ----------------------------- -------- ------------ ---------- ---------------- ------------- ----------- --------- ----------------
Name and Principal Year Salary Bonus Other Restricted Options LTIP All
Position(s) Annual Stock (# of Payouts Other
Compensation(1) Awards Shares) Compensation(1)
- ----------------------------- -------- ------------ ---------- ---------------- ------------- ----------- --------- ----------------
Martin J. Rabinowitz 2004 0 0 0 0 0 0 $ 2,000
Chairman, CEO and President 2003 0 0 0 0 0 0 2,000
2002 0 0 0 0 0 0 1,000
- ----------------------------- -------- ------------ ---------- ---------------- ------------- ----------- --------- ----------------
Jules Ross 2004 $ 120,000 0 0 0 0 0 0
Vice President, Finance and 2003 120,000 0 0 0 0 0 0
Treasurer 2002 120,000 0 0 0 0 0 0
- ----------------------------- -------- ------------ ---------- ---------------- ------------- ----------- --------- ----------------
- ---------------
(1) Mr. Rabinowitz did not receive any salary or other compensation from the
Company, except in his capacity as a director.
Directors of the Company who are not salaried officers of the Company
are paid a fee of $2,000 for each meeting attended. Mr. Rabinowitz is paid a fee
of $500 for each meeting attended. In addition, the members of the Company's
Audit Committee receive a fee of $2,000 for each committee meeting attended.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED SHAREHOLDER MATTERS
OWNERSHIP OF VOTING SECURITIES
The following table contains certain information with respect to each
person known to the Company to have been, at January 11, 2005, the day on which
the Company's stock transfer books were closed (or as to Lance S. Gad, November
12, 2003), the beneficial owner of more than 5% of our shares of common stock.
Except as otherwise indicated, all shares are owned directly.
-------------------------------------------------------------------------------
NAME AND ADDRESS AMOUNT AND NATURE
OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP PERCENT OF CLASS
-------------------------------------------------------------------------------
Odyssey Partners, L.P. 1,328,250(1) 26.0%
280 Park Avenue
New York, NY 10017
-------------------------------------------------------------------------------
The Peter Jay Sharp Foundation 1,272,400 24.9%
c/o Peter Sharp & Co., Inc.
545 Madison Avenue
New York, NY 10022
-------------------------------------------------------------------------------
Lance S. Gad 360,700 7.06%
1250 Fence Row Drive
Fairfield, CT 06824
- --------------------
(1) Of this amount 1,309,500 shares are owned directly by Odyssey Partners,
L.P. ("Odyssey") and 18,750 shares are owned directly by Ronald D.
Rothberg, formerly a principal of Odyssey and currently a director of the
Company. Jack Nash, Stephen Berger, Joshua Nash and Brian Wruble, by virtue
15
of being general partners of Odyssey, share voting and dispositive power
with respect to the common stock owned by Odyssey and, accordingly, may be
deemed beneficial owners of the common stock owned by Odyssey. Each of the
aforesaid persons expressly disclaims any such beneficial ownership (within
the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as
amended) which exceeds the proportionate interest in the common stock which
he may be deemed to own as a general partner of Odyssey. The Company has
been advised that no other person exercises (or may be deemed to exercise)
any voting or investment control over the common stock owned by Odyssey.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of January 11, 2005, the number of
our shares of common stock beneficially owned by each director of the Company,
each of our current executive officers and each other individual who was one of
our five most highly compensated executive officers during 2004 and by all
directors and executive officers of the Company as a group. The address of each
director and executive officer of the Company is c/o Thackeray Corporation, 350
Fifth Ave., Suite 2723, New York, NY 10118. Except as otherwise indicated, all
shares are owned directly.
AMOUNT AND NATURE OF
NAME OR GROUP BENEFICIAL OWNERSHIP PERCENT OF CLASS
------------- -------------------- ----------------
Martin J. Rabinowitz(1) -- --
Jules Ross -- --
Ronald D. Rothberg 28,125(2) (3)
All directors and officers as a group 28,125(4) (3)
(3 persons)
- ----------------------
(1) Does not include 5,650 shares owned by Mr. Rabinowitz's wife as to which
shares Mr. Rabinowitz disclaims beneficial ownership.
(2) All of such shares are owned directly by Mr. Rothberg, but Odyssey shares
beneficial ownership with him as to 18,750 of such shares.
(3) Less than 1%.
(4) See footnotes above.
16
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
SELECTION OF INDEPENDENT ACCOUNTANTS
The Audit Committee has appointed, which appointment has been ratified
by the Board of Directors, the firm of Lazar Levine & Felix LLP, and such
appointment was ratified by the stockholders at the 2004 Annual Meeting, to
audit the accounts of the Company for the fiscal year ending December 31, 2004
and to perform such other services as may be required of them. The Company knows
of no direct or indirect financial interests of Lazar Levine & Felix LLP in the
Company. Should this firm of public accountants be unable to perform these
services for any reason, the Audit Committee will appoint other independent
public accountants to serve for the remainder of the year.
AUDIT AND OTHER FEES
The following table summarizes fees billed to the Company by Lazar
Levine & Felix LLP for 2004 and 2003:
---------------------------- --------------------- ----------------------
2004 2003
---------------------------- --------------------- ----------------------
Audit Fees $45,000 $45,000
---------------------------- --------------------- ----------------------
Audit-Related Fees 10,395 0
---------------------------- --------------------- ----------------------
Tax Fees 7,000 4,000
---------------------------- --------------------- ----------------------
All Other Fees 0 0
---------------------------- --------------------- ----------------------
Audit fees include fees for professional services rendered in
connection with the audit of the Company's annual financial statements as well
as reviews of the Company's quarterly financial statements. Audit-related fees
include fees for professional services provided in connection with the sale of
the Company's assets. Tax fees include fees for the preparation of the Company's
tax returns, which were approved by the Audit Committee. The Audit Committee
pre-approves all audit and permissible non-audit services provided by the
independent auditors.
17
PART IV
Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a)(1) and (2): All Financial Statements and Financial Statement
Schedules - The response to this portion of Item 15 is submitted as a separate
section of this report entitled "List of Financial Statements and Financial
Statement Schedules".
(a)(3): Exhibits:
EXHIBIT NO. EXHIBIT
----------- -------
2 Plan of Complete Liquidation and
Dissolution of Thackeray Corporation (1)
3(a)(i) Certificate of Incorporation of the
Company. (2)
3(a)(ii) Certificate of Designation of $4.15
Cumulative Preferred Stock. (3)
3(a)(iii) Amendment to Certificate of
Incorporation of the Company. (4)
3(b) By-Laws of the Company. (2)
10(a) Amended and Restated Agreement of
Limited Partnership of BT Orlando
Limited Partnership, dated August 1,
2001, among BEF, Inc., Brennand-Paige
Industries, Inc., BT Partnership and EST
Orlando, Ltd. (5)
10(b) Number 2 Partnership Letter Agreement,
dated August 1, 2001, between the
Company and Belz Investco G.P. (6) 10(c)
Ratification of Agreement dated August
1, 2001. (6)
10(d) Amended and Restated Mortgage,
Assignment of Rents and Security
Agreement (Thackeray Land), dated as of
October 1, 2001, between the Company and
Bank of America, N.A. (7)
10(e) Mortgage, Security Agreement, Financing
Statement and Fixture Filing with
Absolute Assignment of Rents and Leases,
dated as of October 1, 2001, by the
Company and Carpartners Realty Holding
Company IV LLC. (7)
10(f) Agreement for Purchase and Sale by and
between Brennand-Paige Industries, Inc.,
Thackeray Corporation and EST Orlando,
LTD. (8)
18
EXHIBIT NO. EXHIBIT
----------- -------
10(g) First Amendment to Agreement, dated as
of September 1, 2004. (9)
10(h) Second Amendment to Agreement, dated as
of September 14, 2004. (9)
10(i) Third Amendment to Agreement, dated as
of October 4, 2004. (9)
10(j) Agreement, dated as of December 10,
2004, between Thackeray and EST Orlando
Ltd. (10)
11 Statement re Computation of Per Share
Data.*
14 The Company's Code of Ethics for the
Chief Executive Officer, Chief Financial
Officer and other Senior Officers. (11)
21 Subsidiaries of the Company.*
31.1 Certification of Chief Executive Officer
Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.*
31.2 Certification of Chief Financial Officer
Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.*
32.1 Certification of Chief Executive Officer
pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.*
32.2 Certification of Chief Financial Officer
pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.*
- -------------------
* Filed herewith.
(1) Incorporated by reference to Exhibit 2 to the Company's Proxy Statement
Pursuant to Section 14(a) of the Securities Exchange Act of 1934 as filed
with the Securities and Exchange Commission on November 9, 2004
(2) Incorporated by reference to the Company's Registration Statement on Form
S-14 (SEC File No. 2-73435).
(3) Incorporated by reference to the Company's Registration Statement on Form
S-11 (SEC File No. 2-84299).
(4) Incorporated by reference to the Company's Annual Report on Form 10-K for
the year ended December 31, 1998.
(5) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarterly period ended September 30, 2001.
(6) Incorporated by reference to the Company's Annual Report on Form 10-K for
the year ended December 31, 2001.
(7) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarterly period ended March 31, 2004.
19
(8) Incorporated by reference to the Company's Current Report on Form 8-K dated
July 23, 2004.
(9) Incorporated by reference to the Company's Current Report on Form 8-K dated
October 4, 2004.
(10) Incorporated by reference to the Company's Current Report on Form 8-K dated
December 10, 2004.
(11) Incorporated by reference to the Company's Annual Report on Form 10-K for
the year ended December 31, 2003.
20
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.
Date: March 22, 2005
THACKERAY CORPORATION
(Registrant)
By: /s/ Martin J. Rabinowitz
-------------------------------
Name: Martin J. Rabinowitz
Title: President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
Chairman of the Board, March 22, 2005
/s/ Martin J. Rabinowitz President and Director
--------------------- (Principal Executive Officer)
Martin J. Rabinowitz
/s/ Jules Ross Vice President, Finance, Treasurer, March 22, 2005
--------------------- Secretary and Director (Principal
Jules Ross Financial and Accounting Officer)
/s/ Ronald D. Rothberg Director March 22, 2005
---------------------
Ronald D. Rothberg
21
Form 10-K - Items 8, 15(a)(1) and (2)
THACKERAY CORPORATION
LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
The following consolidated financial statements of Thackeray Corporation are
included in Item 8 of this report.
- -----------------------------------------------------------------------------------------------------------
1. Report of Independent Registered Public Accounting Firm - Lazar Levine & Felix LLP. F-2
- -----------------------------------------------------------------------------------------------------------
2. Consolidated Balance Sheets - December 31, 2004 and 2003. F-3
- -----------------------------------------------------------------------------------------------------------
3. Consolidated Statements of Operations and Comprehensive Income for the years
ended December 31, 2004, 2003 and 2002. F-4
- -----------------------------------------------------------------------------------------------------------
4. Consolidated Statements of Cash Flows for the years ended December 31, 2004, 2003 and 2002. F-5
- -----------------------------------------------------------------------------------------------------------
5. Notes to Consolidated Financial Statements - December 31, 2004, 2003 and 2002. F-6
- -----------------------------------------------------------------------------------------------------------
The following financial statement schedule of Thackeray Corporation is filed
herewith:
Schedule III - Real Estate and Accumulated Depreciation (Thackeray Corporation) F-14
All other schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission are not required under the
related instructions or are inapplicable and therefore have been omitted.
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
-------------------------------------------------------
To The Stockholders and Board of Directors
Thackeray Corporation
New York, New York
We have audited the accompanying consolidated balance sheets of Thackeray
Corporation (a Delaware corporation) and subsidiary (the "Company") as of
December 31, 2004 and 2003, and the related consolidated statements of
operations and comprehensive income, and cash flows for the years ended December
31, 2004, 2003 and 2002. Our audits also included the financial statement
schedule listed in the Index at Item 15(a). These financial statements and
schedule are the responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements and schedule based on our
audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Thackeray Corporation and
subsidiary as of December 31, 2004 and 2003, and the results of their operations
and their cash flows for the years then ended, in conformity with accounting
principles generally accepted in the United States of America. Also in our
opinion, the related financial statement schedule, when considered in relation
to the basic financial statements taken as a whole, presents fairly, in all
material respects, the information set forth therein.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Notes 2 and 7 to the
financial statements, the Company sold substantially all of its assets in
December 2004 and a plan for dissolution and complete liquidation of the Company
was approved by its shareholders. In January 2005, subsequent to the balance
sheet date, the Company made an initial liquidating distribution to its
shareholders and filed a Certificate of Dissolution in its State of
Incorporation.
LAZAR LEVINE & FELIX LLP
New York, New York
March 7, 2005
F-2
THACKERAY CORPORATION
---------------------
CONSOLIDATED BALANCE SHEETS
---------------------------
DECEMBER 31, 2004 AND 2003
--------------------------
- ASSETS -
2004 2003
---------------- ----------------
Cash and cash equivalents $ 6,486,000 $ 1,298,000
Investment in and advances to real estate partnership (Note 2) - -
Investments in real estate (Note 2) - 1,951,000
Other assets 18,000 61,000
---------------- ----------------
TOTAL ASSETS $ 6,504,000 $ 3,310,000
================ ================
- LIABILITIES AND STOCKHOLDERS' EQUITY -
Accounts payable and accrued expenses $ 122,000 $ 24,000
Other liabilities - 60,000
---------------- ----------------
Total liabilities 122,000 84,000
---------------- ----------------
COMMITMENTS (NOTE 5)
STOCKHOLDERS' EQUITY (NOTE 4):
Common stock, $.10 par value (20,000,000 shares authorized;
5,107,401 shares issued and outstanding) 511,000 511,000
Capital in excess of par value 43,542,000 43,542,000
Accumulated deficit (37,671,000) (40,827,000)
---------------- ----------------
Total stockholders' equity 6,382,000 3,226,000
---------------- ----------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 6,504,000 $ 3,310,000
================ ================
See accompanying notes
F-3
THACKERAY CORPORATION
---------------------
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
--------------------------------------------------------------
FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
----------------------------------------------------
2004 2003 2002
---------------- ---------------- ---------------
REVENUES FROM REAL ESTATE $ - $ - $ -
EQUITY IN NET LOSS FROM REAL ESTATE PARTNERSHIP - - 708,000
---------------- ---------------- ---------------
(LOSS) FROM REAL ESTATE - - (708,000)
---------------- ---------------- ---------------
OPERATING EXPENSES:
General and administrative expenses 1,030,000 398,000 675,000
Interest income (16,000) (15,000) (34,000)
Gain on sale of real estate (3,920,000) - -
Gain on sale of partnership interest (250,000) - -
---------------- ---------------- ---------------
(3,156,000) 383,000 641,000
---------------- ---------------- ---------------
INCOME (LOSS) BEFORE INCOME TAXES 3,156,000 (383,000) (1,349,000)
Income taxes - - -
---------------- ---------------- ---------------
NET INCOME (LOSS) $ 3,156,000 $ (383,000) $ (1,349,000)
================ ================ ===============
NET INCOME (LOSS) PER SHARE:
Net income (loss) per share $ .62 $ (.07) $ (.26)
================ ================ ===============
Number of shares 5,107,401 5,107,401 5,107,401
================ ================ ===============
COMPREHENSIVE INCOME (LOSS):
Net income (loss) $ 3,156,000 $ (383,000) $ (1,349,000)
Other comprehensive income (loss):
Equity in other comprehensive loss from real estate
partnership relating to cash flow hedges - - 153,000
---------------- ---------------- ---------------
COMPREHENSIVE INCOME(LOSS) $ 3,156,000 $ (383,000) $ (1,196,000)
================ ================ ===============
See accompanying notes
F-4
THACKERAY CORPORATION
---------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
----------------------------------------------------
2004 2003 2002
--------------- --------------- ---------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 3,156,000 $ (383,000) $ (1,349,000)
Adjustments to reconcile net income (loss) to net cash used in
operating activities:
Gain on sale of assets (4,170,000) - -
Equity in net loss from real estate partnership - - 708,000
Write-off of over-accrued liabilities (60,000) (304,000) -
Changes in operating assets and liabilities:
Increase (decrease) in accounts payable and accrued liabilities 98,000 19,000 (9,000)
Decrease (increase) in other assets 43,000 (17,000) (23,000)
--------------- --------------- ---------------
NET CASH USED IN OPERATING ACTIVITIES (933,000) (685,000) (673,000)
--------------- --------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of real estate 5,871,000 - -
Proceeds from sale of partnership interest 250,000 - -
--------------- --------------- ---------------
NET CASH PROVIDED BY INVESTING ACTIVITIES 6,121,000 - -
--------------- --------------- ---------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 5,188,000 (685,000) (673,000)
Cash and cash equivalents, at beginning of year 1,298,000 1,983,000 2,656,000
--------------- --------------- ---------------
CASH AND CASH EQUIVALENTS, AT END OF YEAR $ 6,486,000 $ 1,298,000 $ 1,983,000
=============== =============== ===============
See accompanying notes
F-5
THACKERAY CORPORATION
---------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
DECEMBER 31, 2004, 2003 AND 2002
--------------------------------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
(A) PRINCIPLES OF CONSOLIDATION:
The consolidated financial statements include the accounts of
Thackeray Corporation and its wholly owned subsidiary Brennand-Paige
Industries, Inc. (collectively the "Company"). All significant
intercompany transactions and balances have been eliminated.
The Company's operations were comprised exclusively of managing its
real estate investments. Accordingly, the Company historically
prepared an unclassified balance sheet. In addition, the accompanying
consolidated statements of operations reflect the activities of such
investments, all of which were sold in December 2004.
(B) CASH EQUIVALENTS:
The Company considers investments in certificates of deposit which
mature in 90 days or less when purchased to be cash equivalents. The
carrying amount of cash equivalents approximates fair value due to the
short-term maturity of these amounts.
(C) LONG-LIVED ASSETS:
Long lived assets to be held and used are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable. If such review indicates
that the carrying amount of an asset exceeds the sum of its expected
future cash flows, on an undiscounted basis, the asset's carrying
amount is written down to fair value.
(D) INVESTMENT IN REAL ESTATE PARTNERSHIP:
The investment in the real estate partnership is accounted for on the
equity method of accounting, taking into consideration the capital
contributed by each partner into the partnership and the distribution
priorities provided for in the partnership agreement. The carrying
value of the Company's investment in its real estate partnership was
written down to zero in 2002 to reflect partnership losses absorbed by
the Company. (See also Note 2 re: Sale of Investment in Real Estate.)
(E) EARNINGS PER SHARE:
Net income (loss) applicable to common stock in each of the years
2004, 2003 and 2002 was divided by the number of shares outstanding
during such period.
(F) REVENUE RECOGNITION:
Profit on sales of real estate is recognized in full when the profit
is determinable, an adequate down payment has been received,
collectability of the sales price is reasonably assured and the
earnings process is substantially complete. If the sales transaction
does not meet the criteria, all profit or a portion thereof is
deferred until such criteria are met. The Company has not recognized
any revenues during the three-year period ended December 31, 2004.
F-6
THACKERAY CORPORATION
---------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
DECEMBER 31, 2004, 2003 AND 2002
--------------------------------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
(G) ACCOUNTING ESTIMATES:
The preparation of these consolidated financial statements in
conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements, and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
(H) COMPREHENSIVE INCOME:
Comprehensive income (loss) includes net income (loss) plus other
comprehensive income (loss), presented net of taxes. Other
comprehensive income (loss) represents the Company's equity in other
comprehensive income (loss) from the real estate partnership relating
to derivative instruments, specifically the interest rate swaps
designated as cash flow hedges.
In 2001, the Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and
Hedging Activities," as subsequently amended. This statement provides
that all derivative instruments should be recognized as either assets
or liabilities depending on the rights and obligations under the
contract and that all derivative instruments be measured at fair
value. The impact on the Company's consolidated financial statements
upon adoption of this statement, relating to the Company's investment
in its real estate partnership, was approximately $153,000 and is
reflected in the other comprehensive loss recorded for the 2002 year.
(I) RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS:
In December 2004, the FASB issued FASB Statement No. 123 (revised
2004), "Shared-Based Payment." Statement 123(R) addresses the
accounting for share-based payment transactions in which an enterprise
receives employee services in exchange for (a) equity instruments of
the enterprise or (b) liabilities that are based on the fair value of
the enterprise's equity instruments or that may be settled by the
issuance of such equity instruments. Statement 123(R) requires an
entity to recognize the grant-date fair-value of stock options and
other equity-based compensation issued to employees in the income
statement. The revised Statement generally requires that an entity
account for those transactions using the fair-value-based method, and
eliminates the intrinsic value method of accounting in APB Opinion No.
25, "Accounting for Stock Issued to Employees", which was permitted
under Statement 123, as originally issued.
The revised Statement requires entities to disclose information about
the nature of the share-based payment transactions and the effects of
those transactions on the financial statements.
Statement 123(R) is effective for public companies that do not file as
small business issuers as of the beginning of the first interim or
annual reporting period that begins after June 15, 2005 (i.e., third
quarter 2005 for the Company). All public companies must use either
the modified prospective or the modified retrospective transition
method. Early adoption of this Statement for interim or annual periods
for which financial statements or interim reports have not been issued
is encouraged.
F-7
THACKERAY CORPORATION
---------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
DECEMBER 31, 2004, 2003 AND 2002
--------------------------------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
(I) RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (CONTINUED):
In December 2004, the FASB issued SFAS No. 153 "Exchanges of
Non-monetary Assets-amendment of APB Opinion No. 29". Statement 153
eliminates the exception to fair value for exchanges of similar
productive assets and replaces it with a general exception for
exchange transactions that do not have commercial substance, defined
as transactions that are not expected to result in significant changes
in the cash flows of the reporting entity. This statement is effective
for exchanges of non-monetary assets occurring after June 15, 2005.
In December 2004, the FASB issued SFAS No. 152 "Accounting for Real
Estate Time-Sharing Transactions". This statement amends SFAS No. 66
(Accounting for Sales of Real Estate) and SFAS No. 67 (Accounting for
Costs and Initial Rental Operations of Real Estate Projects). This
standard, which is effective for financial statements for fiscal years
beginning after June 15, 2005, is not applicable to the Company's
current operations.
In November 2004, the FASB issued SFAS No. 151, "Inventory Costs, an
amendment of ARB No. 43, Chapter 4," ("SFAS 151") which clarifies the
types of costs that should be expensed rather than capitalized as
inventory. This statement also clarifies the circumstances under which
fixed overhead costs associated with operating facilities involved in
inventory processing should be capitalized. The provisions of SFAS No.
151 are effective for fiscal years beginning after June 15, 2005. This
standard is not applicable to the Company's current operations.
(J) RECLASSIFICATIONS:
Certain prior year amounts have been reclassified to conform with the
current year's presentation.
NOTE 2 - REAL ESTATE:
On December 10, 2004, Thackeray sold 100% of its real estate and
interest in its real estate partnership. The various classifications
of real estate owned by Thackeray, all of which was located in
Florida, at December 31, 2004 and 2003 were as follows:
2004 2003
------------- -------------
Investment in real estate:
Undeveloped land $ - $ 1,860,000
------------- -------------
Deferred real estate costs - 91,000
------------- -------------
- 1,951,000
------------- -------------
Total real estate assets $ - $ 1,951,000
============= =============
F-8
THACKERAY CORPORATION
---------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
DECEMBER 31, 2004, 2003 AND 2002
--------------------------------
NOTE 2 - REAL ESTATE (CONTINUED):
In 1996, the Company and affiliates of Belz Enterprises ("Belz")
entered into an Agreement of Limited Partnership of BT Orlando Limited
Partnership ("BT Orlando"), which was revised under certain amendments
to the partnership agreement. Brennand-Paige Industries, Inc. ("BPI"),
a wholly owned subsidiary of the Company, and an affiliate of Belz
were the general partners in the partnership. Pursuant to this
agreement, the Company agreed to contribute approximately 140 acres of
its Orlando, Florida property to the Joint Venture (JV) partnership,
which property was valued at $15,246,000 for capital account purposes
and which had a historical carrying value of approximately $3.5
million that has been recorded by the partnership. The JV has
developed and constructed an approximately 925,000 square foot retail
and entertainment shopping center complex -- Festival Bay -- on the
property which consists of approximately 625,000 sq. ft. of anchor and
other perimeter tenants and approximately 300,000 sq. ft. of interior
small stores. Leasing efforts for the project are on going. The
Company had a 35% general partner interest in the partnership and was
entitled to participate in the cash flow, sales proceeds and
refinancing proceeds from the operation, financing and disposition of
such project. Thackeray Corporation and affiliates of Belz have
provided certain guarantees relating to the obligations of their
respective general partner affiliates under the partnership agreement.
The agreement also contains certain buy-sell provisions among the
partners.
In September 1999, the Company's real estate partnership closed $40
million of construction financing and simultaneously the Company
deeded the 140 acres of its Orlando, Florida property to the
partnership and also pledged its remaining contiguous 78 acres as
additional collateral to secure the construction loan.
The Partnership has incurred net losses and negative operating cash
flows since the inception of operations in 1999, as the project has
experienced limited operating activity. Accordingly, as of December
31, 2002 Thackeray's balance of its investment in and advances to the
partnership were reduced to zero to reflect its proportionate share of
the Partnership's losses.
On December 10, 2004, the Company announced that it had completed a
sale of substantially all of its assets to EST Orlando, Ltd. ("EST
Orlando"). The Company sold its real estate holdings for a sales price
of $6,000,000 and its investment in BT Orlando for $250,000.
Simultaneously, the Company entered into an Agreement (the
"Agreement") relating to the potential resale of the approximately 78
acres of undeveloped land located in Orlando, Florida (the "Orlando
Property") purchased by EST Orlando from the Company. A summary of
this transaction follows:
Sale of land undeveloped land $ 6,000,000
Cost of land $ 1,951,000
Closing costs 129,000 2,080,000
------------ --------------
Gain on sale of land 3,920,000
Sale and gain on zero basis Partnership interest 250,000
--------------
Gain on sale of land and Partnership interest $ 4,170,000
==============
Pursuant to the Agreement, the parties have agreed that if EST Orlando
sells the Orlando Property to a designated unrelated third party or
any entity affiliated with that party (collectively, "New Buyer")
pursuant to an agreement entered into by December 10, 2005, the
Company would be entitled to receive additional consideration from EST
Orlando for its sale of the Orlando Property. The additional
consideration would be equal to fifty percent (50%) of EST Orlando's
profit (as defined) from the sale to the New Buyer.
F-9
THACKERAY CORPORATION
---------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
DECEMBER 31, 2004, 2003 AND 2002
--------------------------------
NOTE 2 - REAL ESTATE (CONTINUED):
The following are the condensed financial statements of BT Orlando as
of December 31, 2004 and 2003 and for the years ended December 31,
2004 and 2003 (000's omitted):
- BALANCE SHEETS -
2004 2003
-------------- --------------
(UNAUDITED)
Real estate, net $ 117,300 $ 118,147
Other assets 3,447 2,599
Debt (96,526) (96,974)
Other liabilities (2,657) (4,609)
-------------- --------------
Partners' capital $ 21,564 $ 19,163
============== ==============
Partners' capital - Thackeray $ - $ -
============== ==============
- STATEMENTS OF OPERATIONS -
2004 2003
-------------- --------------
(UNAUDITED)
Rental and other income $ 7,304 $ 3,943
Operating expenses (8,122) (5,856)
Interest expense (8,916) (5,967)
Depreciation and amortization expense (4,783) (5,006)
-------------- --------------
Net loss $ (14,517) $ (12,886)
============== ==============
Net loss allocation - Thackeray $ (3,913) $ (3,473)
============== ==============
NOTE 3 - INCOME TAXES:
For the year ended December 31, 2004 the Company reported net income
as a result of the sale of its real estate and from the sale of its
limited partnership interest in BT Orlando. As a result of these
transactions the Company realized a current tax benefit from the
utilization of prior year consolidated net operating loss
carryforwards. Therefore, there is no federal and minimal state taxes
due for the current year. To the extent that the consolidated net
operating loss carryforwards exceeded the 2004 net income the Company
did not report a current tax benefit for federal or state purposes. It
is not anticipated that the Company will utilize any remaining
consolidated loss carryfowards in future years as the Company is in
the process of liquidation and therefore it did not record any
deferred tax asset.
For the 2003 and 2002 years, the Company reported a consolidated net
loss. The Company did not report an income tax benefit for federal or
state purposes, as the Company had a taxable loss for those years and
such losses could not be carried back for tax purposes. In addition,
the Company did not report a deferred income tax benefit for federal
or state purposes, due to the uncertainty as to whether the Company
would realize a benefit from such amounts against future taxable
income.
F-10
Deferred income taxes are computed based on the differences between
the financial reporting carrying amounts and the tax bases of assets
and liabilities using the enacted marginal tax rate. Deferred income
tax expenses or benefits are based on the changes in the deferred
income tax asset or liability from period to period.
F-11
THACKERAY CORPORATION
---------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
DECEMBER 31, 2004, 2003 AND 2002
--------------------------------
NOTE 3 - INCOME TAXES (CONTINUED):
The Company recorded deferred tax assets related to its investment in
the real estate partnership of approximately $900,000 as of December
31, 2003 and 2002, and related to its net operating loss carryforwards
of approximately $4,840,000 and $4,600,000 as of December 31, 2003 and
2002, respectively. However, because it is more likely than not that
the deferred tax assets will not be realized, a valuation allowance
was established equal to the full amount of the deferred tax assets.
As of December 31, 2003, Thackeray had net operating loss
carryforwards for Federal income tax purposes of approximately
$12,000,000, which can be carried forward to offset future taxable
income and expire from 2007 through 2022. However, the Company is
being liquidated, and to the extent that they cannot be utilized to
offset the Company's net income from the sale of its real estate and
its limited partnership interest in BT Orlando the Company will derive
no federal or state tax benefit from them.
A nominal amount of taxes were paid by the Company in 2004, 2003 and
2002.
NOTE 4 - STOCKHOLDERS' EQUITY:
Changes in stockholders' equity for the years ended December 31, 2004,
2003 and 2002 were as follows:
Common Stock
--------------------- Accumulated
Capital in Other
Number of Excess of Par Accumulated Comprehensive
Shares Amount Value Deficit Loss Total
------------- ------------- ------------- ------------- ------------- -------------
Balance December 31,
2001 5,107,401 $ 511,000 $ 43,542,000 $(39,095,000) $ (153,000) $ 4,805,000
Net loss for year - - - (1,349,000) - (1,349,000)
Other comprehensive
income - - - - 153,000 153,000
------------- ------------- ------------- ------------- ------------- -------------
Balance December 31,
2002 5,107,401 511,000 43,542,000 (40,444,000) - 3,609,000
Net loss for year - - - (383,000) - (383,000)
------------- ------------- ------------- ------------- ------------- -------------
Balance December 31,
2003 5,107,401 511,000 43,542,000 (40,827,000) - 3,226,000
Net income for year - - - 3,156,000 - 3,156,000
------------- ------------- ------------- ------------- ------------- -------------
Balance December 31,
2004 5,107,401 $ 511,000 $ 43,542,000 $(37,671,000) $ - $ 6,382,000
============= ============= ============= ============= ============= =============
NOTE 5 - COMMITMENTS:
Thackeray entered in a lease for office space through January 2005.
Total rent expense amounted to $28,000, $24,000 and $31,500 in 2004,
2003 and 2002, respectively. Upon expiration of this lease, the
Company is now occupying space on a month-to-month basis.
Future minimum rent payments are as follows:
YEAR AMOUNT
---- ------
2005 $ 2,000
F-12
THACKERAY CORPORATION
---------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
DECEMBER 31, 2004, 2003 AND 2002
--------------------------------
NOTE 6 - BUSINESS SEGMENTS:
The Company's operations were comprised exclusively of real estate,
which was managed as one segment.
NOTE 7 - SUBSEQUENT EVENTS:
On January 12, 2005, the Company announced that it made an initial
liquidating distribution of $0.80 per share to holders of record of
its common stock as of January 11, 2005. Thackeray's stock transfer
books were closed as of the end of business on January 11, 2005, and
no further stock transfers will be recognized. It is anticipated that
a final liquidating distribution will be made in approximately six
months.
Additionally, on January 12, 2005, Thackeray filed a Certificate of
Dissolution with the Secretary of State of the State of Delaware.
F-13
Thackeray Corporation and Subsidiary Real Estate and Accumulated Depreciation
For the years ended December 31, 2004, 2003 and 2002
Schedule III
Cost capitalized Gross amount
Description Initial cost subsequent to at which carried
computed Encumbrances to the Company acquisition at close of period
- -------- ------------ -------------- ----------- ------------------
78 Acres of unimproved land,
Orlando, Florida (A) $1,860,000 $ 0 $0
** TABLE CONTINUED **
Life on which
depreciation in
Description Accumulated Date of Date latest income
computed depreciation construction acquired statement is
- -------- ------------ ------------ -------- ------------
78 Acres of unimproved land,
Orlando, Florida $0 N/A 1981 N/A
** TABLE COMPLETE **
2004 2003 2002
---- ---- ----
Balance at Beginning of period $1,860,000 $1,860,000 $1,860,000
Cost of real estate deeded to real
estate partnership __ 0 0
Cost of real estate sold 1,860,000 0 0
Balance at End of period $0 $1,860,000 $1,860,000
========== =========== ===========
Federal tax basis is the same as book basis. (A)
(A) The property was pledged as collateral for the $12.8 million portion of the
credit agreement of BT Orlando Limited Partnership. The property was sold
on December 10, 2004.
F-14
EXHIBIT INDEX
-------------
EXHIBIT NO. EXHIBIT
----------- -------
2 Plan of Complete Liquidation and
Dissolution of Thackeray Corporation (1)
3(a)(i) Certificate of Incorporation of the
Company. (2)
3(a)(ii) Certificate of Designation of $4.15
Cumulative Preferred Stock. (3)
3(a)(iii) Amendment to Certificate of
Incorporation of the Company. (4)
3(b) By-Laws of the Company. (2)
10(a) Amended and Restated Agreement of
Limited Partnership of BT Orlando
Limited Partnership, dated August 1,
2001, among BEF, Inc., Brennand-Paige
Industries, Inc., BT Partnership and EST
Orlando, Ltd. (5)
10(b) Number 2 Partnership Letter Agreement,
dated August 1, 2001, between the
Company and Belz Investco G.P. (6) 10(c)
Ratification of Agreement dated August
1, 2001. (6)
10(d) Amended and Restated Mortgage,
Assignment of Rents and Security
Agreement (Thackeray Land), dated as of
October 1, 2001, between the Company and
Bank of America, N.A. (7)
10(e) Mortgage, Security Agreement, Financing
Statement and Fixture Filing with
Absolute Assignment of Rents and Leases,
dated as of October 1, 2001, by the
Company and Carpartners Realty Holding
Company IV LLC. (7)
10(f) Agreement for Purchase and Sale by and
between Brennand-Paige Industries, Inc.,
Thackeray Corporation and EST Orlando,
LTD. (8)
10(g) First Amendment to Agreement, dated as
of September 1, 2004. (9)
10(h) Second Amendment to Agreement, dated as
of September 14, 2004. (9)
10(i) Third Amendment to Agreement, dated as
of October 4, 2004. (9)
10(j) Agreement, dated as of December 10,
2004, between Thackeray and EST Orlando
Ltd. (10)
11 Statement re Computation of Per Share
Data.*
14 The Company's Code of Ethics for the
Chief Executive Officer, Chief Financial
Officer and other Senior Officers. (11)
EXHIBIT NO. EXHIBIT
----------- -------
21 Subsidiaries of the Company.*
31.1 Certification of Chief Executive Officer
Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.*
31.2 Certification of Chief Financial Officer
Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.*
32.1 Certification of Chief Executive Officer
pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.*
32.2 Certification of Chief Financial Officer
pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.*
- -------------------
* Filed herewith.
(1) Incorporated by reference to Exhibit 2 to the Company's Proxy Statement
Pursuant to Section 14(a) of the Securities Exchange Act of 1934 as filed
with the Securities and Exchange Commission on November 9, 2004
(2) Incorporated by reference to the Company's Registration Statement on Form
S-14 (SEC File No. 2-73435).
(3) Incorporated by reference to the Company's Registration Statement on Form
S-11 (SEC File No. 2-84299).
(4) Incorporated by reference to the Company's Annual Report on Form 10-K for
the year ended December 31, 1998.
(5) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarterly period ended September 30, 2001.
(6) Incorporated by reference to the Company's Annual Report on Form 10-K for
the year ended December 31, 2001.
(7) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarterly period ended March 31, 2004.
(8) Incorporated by reference to the Company's Current Report on Form 8-K dated
July 23, 2004.
(9) Incorporated by reference to the Company's Current Report on Form 8-K dated
October 4, 2004.
(10) Incorporated by reference to the Company's Current Report on Form 8-K dated
December 10, 2004.
(11) Incorporated by reference to the Company's Annual Report on Form 10-K for
the year ended December 31, 2003.