UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20459
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 or 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For quarterly period ended March 31, 2005
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.
Suite 3304
New York, New York 10118
--------------------------------------- -----------
(Address of principal executive offices) (Zip Code)
(212) 564-3393
--------------
(Registrant's telephone number, including area code)
Unchanged
---------
(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 [X] No [ ]
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2).
Yes [ ] No [X]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 5,107,401 shares of common
stock, $.10 par value, as of May 13, 2005.
THACKERAY CORPORATION AND SUBSIDIARY
- INDEX -
Page(s)
-------
PART I: FINANCIAL INFORMATION:
Item 1 - Consolidated Financial Statements
Statement of Net Assets in Liquidation - March 31, 2005 (unaudited) and December 31, 2004 2
Condensed Statements of Operations - Three Months Ended March 31, 2005 and 2004
(unaudited) 3
Condensed Statements of Cash Flows - Three Months Ended March 31, 2005 and 2004
(unaudited) 4
Notes to Consolidated Condensed Financial Statements 5 - 6
Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations 7
Item 3 - Quantitative and Qualitative Disclosures About Market Risk 7
Item 4 - Controls and Procedures 7 - 8
PART II. OTHER INFORMATION
Item 6 - Exhibits 9
SIGNATURES 10
EXHIBITS
PART 1 - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
THACKERAY CORPORATION
---------------------
STATEMENT OF NET ASSETS IN LIQUIDATION
--------------------------------------
- ASSETS -
March 31, 2005 December 31, 2004
-------------- ------------------
(Unaudited)
Cash and cash equivalents $ 2,495,000 $ 6,486,000
Prepaid expenses - 18,000
------------- -------------
TOTAL ASSETS $ 2,495,000 $ 6,504,000
============= =============
- LIABILITIES AND STOCKHOLDERS' EQUITY -
Accounts payable and accrued expenses $ 63,000 $ 122,000
------------- -------------
Total liabilities 63,000 122,000
------------- -------------
NET ASSETS IN LIQUIDATION 2,432,000 6,382,000
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,495,000 $ 6,504,000
============= =============
See accompanying notes.
2
THACKERAY CORPORATION AND SUBSIDIARY
------------------------------------
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
-----------------------------------------------
(Unaudited)
For the Three Months
Ended March 31,
---------------------------------
2005 2004
------------- -------------
REVENUES FROM REAL ESTATE $ - $ -
EQUITY IN NET LOSS FROM REAL ESTATE PARTNERSHIP - -
------------- -------------
LOSS FROM REAL ESTATE - -
OTHER (EXPENSES) INCOME:
General and administrative expense (186,000) (155,000)
Gain on sale of real estate 700,000 -
Interest income 10,000 2,000
------------- -------------
INCOME (LOSS) BEFORE INCOME TAXES 524,000 (153,000)
Income tax provision (benefit) - -
------------- -------------
NET INCOME (LOSS) $ 524,000 $ (153,000)
============= =============
INCOME (LOSS) PER SHARE - BASIC AND DILUTED $ .10 $ (.03)
============= =============
NUMBER OF SHARES 5,107,401 5,107,401
============= =============
3
THACKERAY CORPORATION AND SUBSIDIARY
------------------------------------
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
-----------------------------------------------
(Unaudited)
For The Three Months Ended
March 31,
------------------------------
2005 2004
------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 524,000 $ (153,000)
Changes in operating assets and liabilities:
(Decrease) in accounts payable and accrued liabilities (59,000) (16,000)
(Increase) in other assets, net (370,000) (118,000)
------------- -------------
Net cash provided (used in) operating activities 95,000 (287,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Liquidating distribution to shareholders (4,086,000) -
------------- -------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (3,991,000) (287,000)
Cash and cash equivalents - beginning of period 6,486,000 1,298,000
------------- -------------
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 2,495,000 $ 1,011,000
============= =============
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the year for:
Interest $ - $ -
------------- -------------
Taxes $ - $ -
------------- -------------
4
THACKERAY CORPORATION AND SUBSIDIARY
------------------------------------
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
----------------------------------------------------
MARCH 31, 2005 AND 2004
-----------------------
(Unaudited)
-----------
NOTE 1. BASIS OF PRESENTATION:
The significant accounting policies followed by the Company in the
preparation of these unaudited interim condensed financial statements
are consistent with the accounting policies followed in the audited
annual financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included.
Certain information and footnote disclosures included in the audited
financial statements have been omitted. For additional information,
reference is made to the financial statements and notes thereto
included in the Company's Annual Report on Form 10-K for the year
ended December 3l, 2004.
The net income (loss) applicable to common stock for the three months
ended March 31, 2005 and 2004 was divided by the number of shares
outstanding during the period to determine per share data. Since there
are no common stock equivalents outstanding, diluted earnings per
share is the same as basic earnings per share.
NOTE 2. SALE OF INVESTMENT IN REAL ESTATE PARTNERSHIP:
In October 2001, the Company's real estate partnership (the
"Partnership") with Belz Enterprises received equity and debt funding
in excess of $120 million for the Partnership's planned 925,000 sq.
ft. Festival Bay, Orlando, Florida retail/entertainment center.
Thackeray contributed $1,750,000 to the equity portion of the funding.
The Partnership incurred net losses and negative operating cash flows
since inception of operations in 1999, as the project was being
developed and has experienced limited operating activity. Because of
its share of the cumulative losses of the Partnership, Thackeray's
balance of its investment in and advances to the Partnership was
reduced to zero as of March 31, 2002.
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 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. EST Orlando 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.
5
THACKERAY CORPORATION AND SUBSIDIARY
------------------------------------
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
----------------------------------------------------
MARCH 31, 2005 AND 2004
-----------------------
(Unaudited)
-----------
NOTE 2. SALE OF INVESTMENT IN REAL ESTATE PARTNERSHIP (CONTINUED):
On January 12, 2005, the Company made an initial liquidating
distribution in the aggregate of $4,086,000 ($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 by June 30, 2005.
Additionally, on January 12, 2005, the Company filed a Certificate of
Dissolution with the Secretary of State of the State of Delaware.
The various classifications of real estate owned by Thackeray, all of
which was located in Florida, at March 31, 2005 and 2004 were as
follows:
2005 2004
------------ -------------
Investment in real estate:
Undeveloped land $ - $ 1,860,000
Deferred real estate costs - 91,000
------------ -------------
Total real estate assets $ - $ 1,951,000
============ =============
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
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
period. 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 carryforwards in the future years as the Company is in the
process of liquidation and therefore it did not record any deferred
tax asset.
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.
6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(1) Forward Looking Information
---------------------------
This 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.
(2) Material Changes in Financial Condition
---------------------------------------
The Company believes that its current cash balance will be sufficient
to fund all of its requirements for the balance of its existence.
At March 31, 2005 there were no commitments for capital expenditures.
(3) Material Changes in Results of Operations
-----------------------------------------
General and administrative expenses for the first quarter in 2005 were
$186,000 or $31,000 higher that the first quarter of 2004. This was
primarily due to expenses incurred in connection with the liquidation
of the Company.
During the first quarter in 2005, the Company received $700,000 as
additional consideration in connection with the sale of its real
property in December 2004. Pursuant to an agreement entered into with
the buyer, the parties agreed that if EST Orlando (the buyer) sold the
Orlando property by December 10, 2005, Thackeray would be entitled to
receive, as additional consideration, 50% of EST Orlando's profit. The
resale of the property was consummated on March 16, 2005 and Thackeray
received $700,000 subject to certain post-closing adjustments as
additional consideration. This $700,000 will be included in the June
2005 final liquidating distribution to stockholders.
Interest income for the three months ended March 31, 2005 was $10,000
versus $2,000 for the comparable period in 2004. The increase results
from the Company's maintaining substantially higher cash investment
balances as well as receiving higher interest rates on invested cash.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 4. 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 March 31, 2005. 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 March 31, 2005.
7
ITEM 4. CONTROLS AND PROCEDURES (Continued)
(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 March 31, 2005, that has materially affected, or is
reasonably likely to materially affect, the Company's internal
control over financial reporting.
8
PART 2 - OTHER INFORMATION
ITEM 6. EXHIBITS:
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
9
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.
THACKERAY CORPORATION
By: /s/ Jules Ross
---------------------------------
Jules Ross
Vice President, Finance
(Principal Financial Officer)
Date: May 16, 2005
10
EXHIBIT INDEX
-------------
TO
--
THACKERAY CORPORATION
---------------------
QUARTERLY REPORT ON FORM 10-Q
-----------------------------
FOR PERIOD ENDED March 31, 2005
-------------------------------
Exhibit No. Description of Document
----------- -----------------------
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 Office 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.
11