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:
March 31,
2008
|
|
|
|
[ ]
|
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
May 8, 2008 was 7,567,530.
Landmark
Land Company, Inc.
INDEX
TO QUARTERLY REPORT ON FORM 10-Q
QUARTER
ENDED MARCH 31, 2008
|
PART I
|
FINANCIAL
INFORMATION
|
Page
Number
|
|
|
|
|
|
|
|
|
Condensed
Consolidated Financial Statements
|
3
|
|
|
|
|
|
Condensed
Consolidated Balance Sheet as of March 31, 2008 (unaudited) and December
31, 2007
|
4
|
|
|
|
|
|
|
|
|
Condensed
Consolidated Statements of Operations (unaudited) for the three months
ended March 31, 2008 and 2007, respectively
|
6
|
|
|
|
|
|
|
|
|
Condensed
Consolidated Statement of Comprehensive Income (unaudited) for the three
months ended March 31, 2008 and 2007, respectively
|
7
|
|
|
|
|
|
|
|
|
Condensed
Consolidated Statements of Cash Flows (unaudited) for the three months
ended March 31, 2008 and 2007, respectively
|
8
|
|
|
|
|
|
|
|
|
Notes
to Condensed Consolidated Financial Statements
|
9
|
|
|
|
|
|
|
|
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
14
|
|
|
|
|
|
Quantitative
and Qualitative Disclosures about Market Risk
|
16
|
|
|
|
|
|
Controls
and Procedures
|
17
|
|
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|
PART
II
|
OTHER
INFORMATION
|
|
|
|
|
|
|
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|
Legal
Proceedings
|
17
|
|
|
|
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|
Risk
Factors
|
17
|
|
|
|
|
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
17
|
|
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Defaults
Upon Senior Securities
|
17
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|
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|
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Submission
of Matters to a Vote of Security Holders
|
17
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|
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Other
Information
|
17
|
|
|
|
|
|
|
|
|
Exhibits
|
17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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; local and global uncertainties created by
the terrorist acts of September 11 and 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.
Condensed
Consolidated Financial Statements
|
Landmark
Land Company, Inc.
|
|
|
Consolidated
Balance Sheets
|
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
|
December
31,
|
|
|
|
|
2008
|
|
|
2007
|
|
|
Assets
|
|
(Unaudited)
|
|
|
|
|
|
Current
assets
|
|
|
Cash
and cash equivalents
|
|
$
|
3,646,833
|
|
|
$
|
4,934,820
|
|
|
Accounts
receivable
|
|
|
364,728
|
|
|
|
315,932
|
|
|
Receivable
from affiliates
|
|
|
988,254
|
|
|
|
733,771
|
|
|
Inventories
|
|
|
117,580
|
|
|
|
117,028
|
|
|
Other
current assets
|
|
|
294,705
|
|
|
|
235,128
|
|
|
Total
current assets
|
|
|
5,412,100
|
|
|
|
6,336,679
|
|
|
|
|
|
Real
estate and golf management contract rights acquired,
|
|
|
|
|
|
|
|
|
|
net
of accumulated amortization of $961,726 and $924,472
|
|
|
|
|
|
|
|
|
|
in
2008 and 2007, respectively
|
|
|
2,323,861
|
|
|
|
2,361,115
|
|
|
|
|
|
Real
Estate
|
|
|
Real
estate held for sale
|
|
|
1,186,849
|
|
|
|
1,379,203
|
|
|
Real
estate held for or under development
|
|
|
14,571,966
|
|
|
|
14,477,550
|
|
|
Total
real estate
|
|
|
15,758,815
|
|
|
|
15,856,753
|
|
|
|
|
|
Property and equipment,
net of accumulated depreciation
|
|
|
of
$931,591 and $785,818 in 2008 and 2007, respectively
|
|
|
4,848,249
|
|
|
|
4,960,701
|
|
|
|
|
|
Other
assets
|
|
|
Investment
in unconsolidated affiliates
|
|
|
9,924,821
|
|
|
|
4,587,466
|
|
|
Deposits
|
|
|
100,000
|
|
|
|
100,000
|
|
|
Deferred
tax assets, non-current
|
|
|
4,400,000
|
|
|
|
4,668,000
|
|
|
Total
other assets
|
|
|
14,424,821
|
|
|
|
9,355,466
|
|
|
|
|
|
Total
assets
|
|
$
|
42,767,846
|
|
|
$
|
38,870,714
|
|
The
accompanying notes to Consolidated Financial Statements are an integral part of
these financial statements.
|
Landmark
Land Company, Inc.
|
|
|
Consolidated
Balance Sheets
|
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
|
December
31,
|
|
|
|
|
2008
|
|
|
2007
|
|
|
Liabilities
and Stockholders' Equity
|
|
(Unaudited)
|
|
|
|
|
|
Current
liabilities
|
|
|
Current
portion of notes payable to others
|
|
$
|
3,231,843
|
|
|
$
|
8,353,641
|
|
|
Current
portion of liabilities to affiliates
|
|
|
1,192,074
|
|
|
|
1,192,074
|
|
|
Accounts
payable and accrued expenses
|
|
|
572,201
|
|
|
|
623,629
|
|
|
Accrued
payroll and related expenses
|
|
|
293,589
|
|
|
|
326,309
|
|
|
Accrued
interest due affiliates
|
|
|
882,814
|
|
|
|
845,845
|
|
|
Accrued
interest due others
|
|
|
326,742
|
|
|
|
300,168
|
|
|
Other
liabilities and deferred credits
|
|
|
322,564
|
|
|
|
311,393
|
|
|
Current
income taxes
|
|
|
81,432
|
|
|
|
76,000
|
|
|
Total
current liabilities
|
|
|
6,903,259
|
|
|
|
12,029,059
|
|
|
|
|
|
Long
term liabilities
|
|
|
Notes
payable to others
|
|
|
12,825,994
|
|
|
|
7,941,090
|
|
|
|
|
|
Total
liabilities
|
|
|
19,729,253
|
|
|
|
19,970,149
|
|
|
|
|
|
Stockholders'
equity
|
|
|
Preferred
stock, Series C, non-voting, $.50 par value; $100
|
|
|
|
|
|
|
|
|
|
liquidation
value; $10 cumulative annual dividend;
|
|
|
|
|
|
|
|
|
|
50,000
shares authorized; 10,000 shares issued and outstanding,
|
|
|
|
|
|
|
stated
at liquidation value
|
|
|
1,000,000
|
|
|
|
1,000,000
|
|
|
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
|
|
|
30,445,546
|
|
|
|
30,424,367
|
|
|
Treasury
stock, at cost, 1,236,938 shares
|
|
|
(1,299,820
|
)
|
|
|
(1,299,820
|
)
|
|
Accumulated
deficit
|
|
|
(11,453,755
|
)
|
|
|
(15,560,779
|
)
|
|
Accumulated
other comprehensive loss
|
|
|
(55,612
|
)
|
|
|
(65,437
|
)
|
|
Total
stockholders' equity
|
|
|
23,038,593
|
|
|
|
18,900,565
|
|
|
|
|
|
Total
liabilities and stockholders' equity
|
|
$
|
42,767,846
|
|
|
$
|
38,870,714
|
|
The
accompanying notes to Consolidated Financial Statements are an integral part of
these financial statements.
|
Landmark
Land Company, Inc.
|
|
|
Consolidated
Statements of Operations
|
|
|
Three
Months ended March 31, 2008 and 2007
|
|
|
(Unaudited)
|
|
|
|
|
2008
|
|
|
2007
|
|
|
Revenues
|
|
|
Real
estate sales
|
|
$
|
1,557,127
|
|
|
$
|
5,915,051
|
|
|
Golf
course revenue
|
|
|
437,188
|
|
|
|
413,715
|
|
|
Golf
merchandise sales
|
|
|
74,480
|
|
|
|
64,292
|
|
|
Food
and beverage sales revenue
|
|
|
111,460
|
|
|
|
93,950
|
|
|
Management
and consulting revenue
|
|
|
1,202,750
|
|
|
|
487,674
|
|
|
Reimbursement
of out-of-pocket expenses
|
|
|
400,966
|
|
|
|
339,710
|
|
|
Total
|
|
|
3,783,971
|
|
|
|
7,314,392
|
|
|
|
|
|
Costs
of revenues
|
|
|
Cost
of real estate sold
|
|
|
999,781
|
|
|
|
3,862,693
|
|
|
Real
estate operating expenses
|
|
|
548,308
|
|
|
|
485,123
|
|
|
Cost
of golf merchandise sold
|
|
|
50,982
|
|
|
|
40,105
|
|
|
Cost
of food and beverage sold
|
|
|
49,914
|
|
|
|
40,144
|
|
|
Golf
operating expenses
|
|
|
474,461
|
|
|
|
433,472
|
|
|
Out-of-pocket
expenses
|
|
|
400,966
|
|
|
|
339,710
|
|
|
Management
and consulting payroll and related expenses
|
|
|
1,050,759
|
|
|
|
964,763
|
|
|
Depreciation
and amortization
|
|
|
184,326
|
|
|
|
77,223
|
|
|
Total
|
|
|
3,759,497
|
|
|
|
6,243,233
|
|
|
|
|
|
Operating
income
|
|
|
24,474
|
|
|
|
1,071,159
|
|
|
|
|
|
General,
administrative and other expenses
|
|
|
(589,802
|
)
|
|
|
(638,351
|
)
|
|
|
|
|
Other
income (expenses)
|
|
|
Equity
in profit (loss) of unconsolidated affiliates
|
|
|
5,302,481
|
|
|
|
(60,285
|
)
|
|
Interest
income
|
|
|
34,027
|
|
|
|
57,675
|
|
|
Interest
expense
|
|
|
(176,536
|
)
|
|
|
(138,693
|
)
|
|
Total
other income (expenses)
|
|
|
5,159,972
|
|
|
|
(141,303
|
)
|
|
|
|
|
Net
income before income taxes
|
|
|
4,594,644
|
|
|
|
291,505
|
|
|
|
|
|
Federal
and state income taxes
|
|
|
(273,432
|
)
|
|
|
(133,160
|
)
|
|
|
|
|
Net
income
|
|
$
|
4,321,212
|
|
|
$
|
158,345
|
|
|
|
|
|
Basic
income per common share
|
|
$
|
0.57
|
|
|
$
|
0.02
|
|
|
|
|
|
Diluted
income per common share
|
|
$
|
0.57
|
|
|
$
|
0.02
|
|
|
|
|
|
Basic
weighted average shares outstanding
|
|
|
7,567,530
|
|
|
|
7,567,530
|
|
|
|
|
|
Diluted
weighted average shares outstanding
|
|
|
7,567,530
|
|
|
|
7,729,505
|
|
The
accompanying notes to Consolidated Financial Statements are an integral part of
these financial statements.
|
Landmark
Land Company, Inc.
|
|
|
Consolidated
Statements of Comprehensive Income
|
|
|
Three
months ended March 31, 2008 and 2007
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
|
|
|
Net
income
|
|
$
|
4,321,212
|
|
|
$
|
158,345
|
|
|
|
|
|
Other
comprehensive income (loss)
|
|
|
Foreign
currency translation adjustments
|
|
|
9,825
|
|
|
|
(4,883
|
)
|
|
|
|
|
Comprehensive
income
|
|
$
|
4,331,037
|
|
|
$
|
153,462
|
|
The
accompanying notes to Consolidated Financial Statements are an integral part of
these financial statements.
|
Landmark
Land Company, Inc.
|
|
|
Consolidated
Statements of Cash Flows
|
|
|
Three
months ended March 31, 2008 and 2007
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
Cash
flows from operating activities
|
|
|
Net
income for the period
|
|
$
|
4,321,212
|
|
|
$
|
158,345
|
|
|
Adjustments
to reconcile net income to net cash
|
|
|
provided
by operating activities:
|
|
|
Depreciation
and amortization
|
|
|
184,326
|
|
|
|
77,223
|
|
|
Employee
stock compensation
|
|
|
21,179
|
|
|
|
6,522
|
|
|
Equity
in (profit) or loss of unconsolidated subsidiaries
|
|
|
(5,302,481
|
)
|
|
|
60,285
|
|
|
(Increase)
decrease in
|
|
|
Accounts
receivable
|
|
|
(48,796
|
)
|
|
|
2,496,764
|
|
|
Receivable
from affiliates
|
|
|
(279,531
|
)
|
|
|
(148,036
|
)
|
|
Inventories
|
|
|
(552
|
)
|
|
|
(16,790
|
)
|
|
Other
current assets
|
|
|
(59,577
|
)
|
|
|
(77,055
|
)
|
|
Deposits
|
|
|
-
|
|
|
|
135,800
|
|
|
Deferred
tax assets
|
|
|
268,000
|
|
|
|
126,000
|
|
|
Increase
(decrease) in
|
|
|
Accounts
payable and accrued expenses
|
|
|
(51,428
|
)
|
|
|
(77,890
|
)
|
|
Accrued
payroll and related expenses
|
|
|
(32,720
|
)
|
|
|
30,031
|
|
|
Accrued
interest
|
|
|
63,543
|
|
|
|
15,813
|
|
|
Current
income taxes
|
|
|
5,432
|
|
|
|
(164,237
|
)
|
|
Other
liabilities and deferred credits
|
|
|
10,500
|
|
|
|
(125,220
|
)
|
|
|
|
|
Net
cash provided (used) by operating activities
|
|
|
(900,893
|
)
|
|
|
2,497,555
|
|
|
|
|
|
Cash
flows from investing activities
|
|
|
Purchase
of property and equipment
|
|
|
(34,620
|
)
|
|
|
(4,128,414
|
)
|
|
Purchase
and development of real estate
|
|
|
(926,900
|
)
|
|
|
(4,428,009
|
)
|
|
Sale
of real estate inventory
|
|
|
1,024,837
|
|
|
|
3,966,747
|
|
|
Investment
in unconsolidated affiliates
|
|
|
-
|
|
|
|
(63,746
|
)
|
|
Net
cash provided (used) by investing activities
|
|
|
63,317
|
|
|
|
(4,653,422
|
)
|
|
|
|
|
Cash
flows from financing activities
|
|
|
Proceeds
from notes payable to others
|
|
|
567,410
|
|
|
|
8,331,054
|
|
|
Repayments
on notes payable to others
|
|
|
(804,305
|
)
|
|
|
(3,947,235
|
)
|
|
Cash
dividends paid on common stock
|
|
|
(188,516
|
)
|
|
|
(188,516
|
)
|
|
Cash
dividends paid on preferred stock
|
|
|
(25,000
|
)
|
|
|
(25,000
|
)
|
|
Net
cash provided (used) by financing activities
|
|
|
(450,411
|
)
|
|
|
4,170,303
|
|
|
|
|
|
Net
increase (decrease) in cash during period
|
|
|
(1,287,987
|
)
|
|
|
2,014,436
|
|
|
|
|
|
Cash
balance, beginning of period
|
|
|
4,934,820
|
|
|
|
5,437,186
|
|
|
|
|
|
Cash
balance, end of period
|
|
$
|
3,646,833
|
|
|
$
|
7,451,622
|
|
|
|
|
|
Supplemental
disclosure of cash flow information:
|
|
|
Cash
paid for interest, including $40,000 paid to affiliates
|
|
|
in
2007, none in 2008
|
|
$
|
263,481
|
|
|
$
|
291,125
|
|
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 Condensed Consolidated Financial Statements
(Unaudited)
1. Basis
of Presentation
The
accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for condensed 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 required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments
considered necessary for a fair presentation have been
included. Operating results for the three-month period ended March
31, 2008 are not necessarily indicative of the results that may be expected for
the fiscal year ending December 31, 2008. There have been no
significant changes to accounting policies or critical estimates during the
first quarter of 2008. 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, 2007, 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, L.P., and SPIBS,
LLC. The two entities related to the South Padre project, South Padre
Island Development, L.P. and SPIBS, LLC, are sometimes collectively referred to
as “South Padre”. All significant inter-company accounts and
transactions have been eliminated in consolidation.
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 March 31,
|
|
|
|
|
2008
|
|
|
2007
|
|
|
Revenue
|
|
$
|
309
|
|
|
$
|
513,103
|
|
|
Gross
profit (loss)
|
|
$
|
(380,686
|
)
|
|
$
|
102,306
|
|
|
Profit
(loss) from continuing operations
|
|
$
|
(380,686
|
)
|
|
$
|
102,306
|
|
|
Net
income (loss)
|
|
$
|
(380,686
|
)
|
|
$
|
102,306
|
|
The
company has a receivable from this affiliate of $586,281 as of March 31,
2008 In addition, the company has recorded cumulative losses
from this investment of $25,048 in excess of its capital investment of
$1,250,587. This excess loss is reported as a reduction to the
company's loan receivable from the affiliate.
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 began development and
marketing of a golf-oriented real estate project in Barbados in the fourth
quarter of 2005 and closed the first sales of residential lots in the fourth
quarter of 2007. 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 March 31,
|
|
|
|
|
2008
|
|
|
2007
|
|
|
Revenue
|
|
$
|
28,533,432
|
|
|
|
-
|
|
|
Gross
profit (loss)
|
|
$
|
17,154,976
|
|
|
$
|
(334,314
|
)
|
|
Profit
(loss) from continuing operations
|
|
$
|
16,478,472
|
|
|
$
|
(334,314
|
)
|
|
Net
income (loss)
|
|
$
|
16,478,472
|
|
|
$
|
(334,314
|
)
|
Apes Hill
closed 62 lot sales in the first quarter of 2008 generating US $28,508,000 in
revenue. At March 31, 2008, Apes Hill reported 50 lots under contract with
a total sales value of approximately US $45,672,000, including a bulk sale of 30
lots to one purchaser with a sales value of approximately US
$31,157,000.
Landmark
Land Company, Inc.
Notes
to Consolidated Financial Statements
The
company has a receivable from Apes Hill in the amount of $320,770 at March 31,
2008 representing unpaid management fees and out-of-pocket
expenses. The amount is reported in the balance sheet as Receivable
from affiliates.
In
December 2005, the company’s subsidiary, DPMG Inc., entered into a limited
liability company agreement with V.O.B. Limited Partnership (“V.O.B.”), the
owner and developer of the approximately 1,200 acre Beechtree residential
development located near Upper Marlboro, Maryland (a suburb of Washington,
D.C.). Each of V.O.B. and DPMG Inc. owned 50% of
Presidential Golf Club, LLC
(“Presidential”). V.O.B. contributed approximately 240 acres of real
property to Presidential and each of V.O.B. and DPMG Inc. have contributed
$700,000 in equity for the development of an 18-hole championship golf
course. V.O.B. agreed to lend to Presidential the remaining funds to
complete the golf facility which DPMG Inc. will manage and operate.
During
the first quarter of 2008, DPMG Inc. and V.O.B. agreed to amendments to the
Presidential operating agreement that restructured V.O.B.’s contributions for
the construction of the golf course and related facilities effective July 31,
2007. Under the amended agreement, V.O.B. will write off a portion of
the cost of the golf course against its surrounding real estate development and
convert the remainder of its funding from debt to equity. DPMG,
Inc.’s $700,000 investment in Presidential now represents a 7.45% ownership
interest that the company will now account for on the cost
basis. Presidential opened its golf course for play on May 1,
2008. Until that time substantially all costs were capitalized. The
company has a $103,476 receivable from Presidential at March 31, 2008, included
in the balance sheet as Receivable from affiliates. Presidential
reported the following condensed financial position at March 31, 2008 and
December 31, 2007:
|
|
|
|
|
|
December
31, 2007
|
|
|
|
|
|
|
|
Per
Amended
|
|
|
Per
Original
|
|
|
|
|
March
31, 2008
|
|
|
Agreement
|
|
|
Agreement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
$
|
11,321,285
|
|
|
$
|
10,562,517
|
|
|
$
|
16,512,301
|
|
|
Liabilities
|
|
$
|
1,921,585
|
|
|
$
|
1,162,517
|
|
|
$
|
15,112,301
|
|
|
Members’
equity
|
|
$
|
9,400,000
|
|
|
$
|
9,400,000
|
|
|
$
|
1,400,000
|
|
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.
2. 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,
2007 and 2008. The following is a reconciliation of the numerators
and denominators used in the calculation of earnings per share:
|
|
|
Three
Months Ended March 31,
|
|
|
|
|
2008
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
|
4,321,212
|
|
|
$
|
158,345
|
|
|
Less: Preferred
dividends
|
|
|
(25,000
|
)
|
|
|
(25,000
|
)
|
|
Net
income available to common stockholders
|
|
$
|
4,296,212
|
|
|
$
|
133,345
|
|
|
Weighted
average common shares outstanding
|
|
|
7,567,530
|
|
|
|
7,567,530
|
|
|
Incremental
shares from assumed exercise of dilutive options
|
|
|
-
|
|
|
|
161,975
|
|
|
Diluted
weighted average common shares outstanding
|
|
|
7,567,530
|
|
|
|
7,729,505
|
|
|
Basic
income per common share
|
|
$
|
0.57
|
|
|
$
|
0.02
|
|
|
Diluted
income per common share
|
|
$
|
0.57
|
|
|
$
|
0.02
|
|
The
dilutive effect of the employee stock options and directors’ options is reported
using the treasury stock method.
3. 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.
Landmark
Land Company, Inc.
Notes
to Consolidated Financial Statements
A summary
of options issued to employees under the company’s incentive stock option plan
as of March 31, 2008, and changes during the three months then ended is
presented below:
|
Options
|
|
Shares
|
|
Weighted-Average
Grant-Date
Fair Value
|
|
Outstanding
at January 1, 2008
|
|
708,000
|
|
$0.64
|
|
Granted
|
|
-
|
|
-
|
|
Vested
|
|
-
|
|
-
|
|
Forfeited
|
|
-
|
|
-
|
|
Outstanding
at March 31, 2008
|
|
708,000
|
|
$0.64
|
|
Exercisable
at March 31, 2008
|
|
-
|
|
-
|
During
the first quarter of 2008, the company recognized share-based compensation costs
in the amount of $21,179. As of March 31, 2008, there was
$333,798 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 4.7 years vesting period
for outstanding grants 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
March 31, 2008, and changes during the three months then ended is presented
below:
|
Options
|
Shares
|
|
Weighted-Average
Exercise
Price
|
|
Weighted-
Average Remaining Contractual
Term
|
|
Aggregate
Intrinsic
Value
|
|
Outstanding
at January 1, 2008
|
300,000
|
|
$2.23
|
|
|
|
|
|
Granted
|
-
|
|
-
|
|
|
|
|
|
Exercised
|
-
|
|
-
|
|
|
|
|
|
Forfeited
or expired
|
-
|
|
-
|
|
|
|
|
|
Outstanding
at March 31, 2008
|
300,000
|
|
$2.23
|
|
3.4
years
|
|
-
|
|
Exercisable
at March 31, 2008
|
300,000
|
|
$2.23
|
|
3.4
years
|
|
-
|
There was
no related unrecognized cost related to the directors and legal counsel options
as of March 31, 2008
4. Reclassifications
Certain
reclassifications have been made in the 2007 financial statements to conform to
the 2008 presentation. These changes had no effect on net
income.
Landmark
Land Company, Inc.
Notes
to Consolidated Financial Statements
5. 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 first quarter of 2008 and 2007 follows:
|
|
|
2008
|
|
|
2007
|
|
|
Warranty
accrual balance January 1,
|
|
$
|
132,165
|
|
|
$
|
146,635
|
|
|
Provision
for warranty
|
|
|
6,525
|
|
|
|
21,987
|
|
|
Payments
|
|
|
(13,999
|
)
|
|
|
(7,820
|
)
|
|
Warranty
accrual balance March 31,
|
|
$
|
124,691
|
|
|
$
|
160,802
|
|
6. Income
Taxes
The
company reported income before income taxes of $4,594,644 for the three-month
period ended March 31, 2008. The provision for federal and state income taxes
totals $273,432 and is comprised of estimated state taxes of $5,432 and federal
taxes of $1,677,000 partially offset by a decrease in the deferred tax asset
valuation allowance in the amount of $1,409,000. The federal tax
liability is offset by utilization of a deferred tax benefit related to a net
operating loss carried forward from 2002.
It should
be noted that the estimated net future benefit available to the company from all
its deferred tax positions is approximately $48,440,000 at March 31, 2008;
however, realization of that benefit is dependent on the company’s ability to
generate taxable income in the future. Based on a current evaluation
of historical and prospective earnings, the company has decreased the deferred
tax asset valuation allowance by approximately $1,409,000 to a balance of
$44,040,000, reducing the net tax benefit to $4,400,000 as of March 31,
2008.
The
company had no material unrecognized tax benefits at January 1, 2008, 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 the date of implementation. 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, 2003 are still open to
examination by those relevant taxing authorities.
Landmark
Land Company, Inc.
Notes
to Consolidated Financial Statements
7.
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 ended March 31, 2008 and 2007
operations by segment:
|
|
|
Three
Months Ended March 31, 2008
|
|
|
|
Real
Estate
|
|
|
Golf
|
|
|
Management
|
|
|
Corporate
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
1,557,127
|
|
|
$
|
623,128
|
|
|
$
|
1,603,716
|
|
|
-
|
|
|
$
|
3,783,971
|
|
|
Costs
of revenue
|
|
|
(1,548,089
|
)
|
|
|
(575,357
|
)
|
|
|
(1,451,725
|
)
|
|
-
|
|
|
|
(3,575,171
|
)
|
|
Depreciation
and amortization
|
|
|
(7,639
|
)
|
|
|
(30,699
|
)
|
|
|
(145,988
|
)
|
|
-
|
|
|
|
(184,326
|
)
|
|
Operating
income (loss)
|
|
|
1,399
|
|
|
|
17,072
|
|
|
|
6,003
|
|
|
-
|
|
|
|
24,474
|
|
|
General
and administrative
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
(589,802
|
)
|
|
|
(589,802
|
)
|
|
Other
income (expenses)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,159,972
|
|
|
|
5,159,972
|
|
|
Federal
& state income taxes
|
|
|
(83
|
)
|
|
|
(1,016
|
)
|
|
|
(357
|
)
|
|
|
(271,976
|
)
|
|
|
(273,432
|
)
|
|
Net
income (loss)
|
|
$
|
1,316
|
|
|
$
|
16,056
|
|
|
$
|
5,646
|
|
|
$
|
4,298,194
|
|
|
$
|
4,321,212
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-lived
assets
|
|
$
|
14,709,653
|
|
|
$
|
1,071,544
|
|
|
$
|
7,977,728
|
|
|
$
|
13,496,821
|
|
|
$
|
37,255,746
|
|
|
Other
assets
|
|
|
785,198
|
|
|
|
414,552
|
|
|
|
692,472
|
|
|
|
3,619,878
|
|
|
|
5,512,100
|
|
|
Total
assets
|
|
$
|
15,494,851
|
|
|
$
|
1,486,096
|
|
|
$
|
8,670,200
|
|
|
$
|
17,116,699
|
|
|
$
|
42,767,846
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended March 31, 2007
|
|
|
|
Real
Estate
|
|
|
Golf
|
|
|
Management
|
|
|
Corporate
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
5,915,051
|
|
|
$
|
571,957
|
|
|
$
|
827,384
|
|
|
|
-
|
|
|
$
|
7,314,392
|
|
|
Costs
of revenue
|
|
|
(4,347,816
|
)
|
|
|
(513,721
|
)
|
|
|
(1,304,473
|
)
|
|
|
-
|
|
|
|
(6,166,010
|
)
|
|
Depreciation
and amortization
|
|
|
(2,988
|
)
|
|
|
(29,395
|
)
|
|
|
(44,840
|
)
|
|
|
-
|
|
|
|
(77,223
|
)
|
|
Operating
income (loss)
|
|
|
1,564,247
|
|
|
|
28,841
|
|
|
|
(521,929
|
)
|
|
|
-
|
|
|
|
1,071,159
|
|
|
General
and administrative
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
(638,351
|
)
|
|
|
(638,351
|
)
|
|
Other
income (expenses)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(141,303
|
)
|
|
|
(141,303
|
)
|
|
Federal
& state income taxes
|
|
|
(714,551
|
)
|
|
|
(13,175
|
)
|
|
|
238,418
|
|
|
|
356,147
|
|
|
|
(133,160
|
)
|
|
Net
income (loss)
|
|
$
|
849,696
|
|
|
$
|
15,666
|
|
|
$
|
(283,511
|
)
|
|
$
|
(423,507
|
)
|
|
$
|
158,345
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-lived
assets
|
|
$
|
11,670,302
|
|
|
$
|
1,154,414
|
|
|
$
|
8,389,194
|
|
|
$
|
6,867,938
|
|
|
$
|
28,081,848
|
|
|
Other
assets
|
|
|
1,440,803
|
|
|
|
311,468
|
|
|
|
2,432,330
|
|
|
|
5,953,116
|
|
|
|
10,137,717
|
|
|
Total
assets
|
|
$
|
13,111,105
|
|
|
$
|
1,465,882
|
|
|
$
|
10,821,524
|
|
|
$
|
12,821,054
|
|
|
$
|
38,219,565
|
|
8.
Recent Accounting Pronouncements
In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements – an amendment of ARB No. 51”, which amends
the presentation of noncontrolling interests in the income statement and the
balance sheet by changing classification of the noncontrolling interest to
equity and net income attributable to the noncontrolling interest as a separate
net income line on the face of the income statement. This aligns the
reporting with International Financial Reporting
Standards. This statement is effective for fiscal years, and
interim periods within those fiscal years, beginning on or after December 15,
2008. The Company does not believe this statement will have a
material impact on financial position or the results of operations.
In
December 2007, the FASB issued SFAS No. 141(R), “Business Combinations” which
requires the application of the acquisition method of accounting to all business
combinations where control of another entity is acquired. This
statement also modifies the requirement of stating all acquired assets and
liabilities at the fair value rather than an allocation of the purchase price as
was previously required under SFAS No. 141. In addition, any negative
goodwill amounts are recognized as gain rather than a reduction of the basis of
other assets acquired. This statement applies to all acquisitions on
or after the beginning of the first annual reporting period beginning on or
after December 15, 2008. The Company does not believe this statement
will have a material impact on financial position or the results of
operations.
In March
2008, the FASB issued SFAS No. 161, "Disclosures about Derivative Instruments
and Hedging Activities – an amendment of FASB Statement No. 133” which provides
for enhanced disclosures regarding how and why companies use hedging instruments
as well as the accounting for the instruments and how that affects the financial
position and results of operations. The Company has adopted SFAS No.
161 as of its effective date. The statement does not have a material
impact on financial position or the results of operations because the Company
does not engage in hedging transactions.
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,
DPMG, Inc. and its affiliates, on August 31, 2003 and subsequently, South Padre
Island Development, L.P. on October 1, 2004. The company’s
consolidated statements of operations and cash flows for the three months ended
March 31, 2008 and 2007 include the operations of the company and its
subsidiaries identified in Note 1 to the Condensed Financial Statements. 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
analysis of the company’s operations during the first quarters of 2008 and 2007
and comments on its current financial condition are as follows:
Revenue
Real estate sales
at South
Padre totaled 2 lots and 6 houses during the first quarter of 2008, generating
$1,557,000 in revenue. In the same period of 2007, South Padre
reported 20 lot sales and 28 house sales generating $5,915,000 in
revenue. The dramatic decrease in real estate sales appears to
reflect apprehension about the continuing fallout from the sub-prime mortgage
market and the fear of a possible recession.
Golf
related revenue,
including food and beverage sold in the golf restaurant, totaled $623,000 during
the first quarter of 2008. Paid golf rounds totaled
11,900. In the same period of 2007 South Padre reported $572,000 in
golf revenue from 11,400 rounds played.
The 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 $1,203,000 in fee revenue in the quarter ended March 31,
2008 compared to $488,000 during the same period of 2007. The company
was also reimbursed for out-of-pocket expenses related to its management
agreements during the three-month period in the amount of $401,000 in 2008 and
$340,000 in 2007. The increased fees reflect primarily increased
construction fees earned in Barbados and consulting fees recognized in
Spain. The higher reimbursements reflect primarily, increased costs
paid on behalf of Apes Hill Development, the company’s unconsolidated affiliate
in Barbados.
Costs
of Revenues
Cost of real estate sold,
including land, development, construction and closing costs, totaled
$1,000,000 or 64% of sales in the first quarter of 2008. During the
same period of 2007 South Padre reported costs of real estate sold totaling
$3,863,000 or 65% of real estate sales. Gross profit margins
differ among various subdivision lot developments and various house models
constructed; consequently, the gross profit margin realized in any reporting
period will vary according to the mix of products sold during the
period.
Real estate operating expenses
not included in
cost of
real estate sold
totaled $548,000 for the first quarter of 2008 and
$485,000 for the first quarter of 2007. The company allocates its
fixed costs associated with real estate development and construction to
individual lots and houses based on normal capacity. Since real
estate development and construction activity has slowed considerably in 2008, a
smaller percentage of construction department fixed costs are being absorbed in
cost of sales, and a larger percentage in operating expenses compared to
2007.
Cost of golf merchandise sold and
food and beverage sold
in the three-month period ending March 31, 2008
totaled $101,000 (54% of sales) and $80,000 (51% of sales) for the same period
of 2007.
Golf operating expenses
totaled $474,000 in the first quarter of 2008 compared to $433,000 in the first
quarter of 2007. Increases were related primarily to golf maintenance
costs.
Management and consulting payroll
and related expenses
totaled $1,051,000 in the three-month period ending
March 31, 2008 compared to $965,000 for the same period in
2007. Increases reflect salary increases granted in the second
quarter of 2006 plus the addition of a new senior vice president and other
supporting staff.
Depreciation and amortization
included in the company’s consolidated statement of operations was $184,000 in
the three-month period ending March 31, 2008. In the same period of
2007, the company reported $77,000. Depreciation estimated on
the airplane in the first quarter of 2007 was adjusted later in 2007 to reflect
a shorter useful life and lower salvage value than the estimates used in the
first quarter. The 2008 depreciation estimates are consistent with
the estimates used for the full fiscal year 2007. The remaining
increase reported in 2008 relates to the amortization of intangible real estate
management contracts, the costs of which are amortized as fees are earned under
those contracts.
General,
administrative and other expense
General, administrative and other
expenses
totaled $590,000 in the first quarter 2008 compared to $638,000
in the same period of 2007. The decrease reflects, primarily, lower
franchise fees in Texas that resulted from changes in the legal and ownership
structure of the South Padre entities and the management group in
2006.
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
March
31,
|
|
|
|
|
Ownership
|
|
|
2008
|
|
|
2007
|
|
|
Landmark
Developments of Spain, S.L.
|
|
|
50%
|
|
|
$
|
(190,343
|
)
|
|
$
|
51,153
|
|
|
Apes
Hill Development SRL
|
|
|
33%
|
|
|
$
|
5,492,824
|
|
|
$
|
(111,438
|
)
|
|
|
|
|
|
|
|
$
|
5,302,481
|
|
|
$
|
(60,285
|
)
|
Interest income
decreased
from $58,000 in the first quarter of 2007 to $34,000 in the same period this
year, reflecting lower cash balances invested in overnight funds.
Interest expense
increased
from $139,000 in the first quarter of 2007 to $177,000 in the same period this
year, reflecting the interest paid on the debt used to purchase additional
land at South Padre in the third quarter of 2007, partially offset by lower
rates.
Federal
and state income taxes
The
company reported income before income taxes of $4,595,000 for the three-month
period ended March 31, 2008. The provision for federal and state
income taxes totals $273,000 and is described in Note 6. The federal
tax liability is offset by utilization of a deferred tax benefit related to a
net operating loss carried forward from 2002. During the first
quarter of 2007, the company reported income before taxes in the amount of
$292,000 with a provision for income taxes in the amount of
$133,000.
Net
income
The
company reported net income of $4,321,000 for the first quarter of
2008. In the comparable period of 2007, the company reported net
income of $158,000. The significant increase results primarily from
profitable real estate sales in the Barbados development, offset partially by
lower real estate sales in South Padre.
Liquidity
and capital resources
Current assets
total
$5,412,000 at March 31, 2008 compared to $6,337,000 at December 31, 2007,
reflecting use of cash to pay operating expenses and to pay down
debt. Although the company’s current liabilities exceed
current assets, the company anticipates that approximately $3,232,000 of the
debt to others due within one year will be repaid from sale proceeds of real
estate inventory at South Padre that is pledged to secure that debt. Debt and
interest due to affiliates in the approximate amount of $2,075,000 is due on
demand, but is owed to stockholders of the company who advanced the funds in
prior years to provide working capital liquidity. The company
anticipates its current reserves to be adequate for anticipated current
needs.
Real estate and golf management
contract rights acquired
remained unchanged during the first three months
of 2008 except for the $37,000 amortization recorded on the Spain
contract. The only contract in this asset group with significant
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 $15,759,000 at March 31, 2008 compared to
$15,857,000 at December 31, 2007, with the reductions from limited real estate
sales offset almost entirely by continuing development and carry costs on
existing inventory.
Property and equipment
decreased approximately $112,000, reflecting depreciation recorded in the
first quarter of 2008, partially offset by the purchase of model furniture at
South Padre.
Other assets
are comprised
primarily of
investments in
unconsolidated affiliates
which increased approximately $5,337,000 in the
first quarter, reflecting undistributed profits recognized in Apes Hill in
Barbados, and the
deferred tax
assets
which decreased by approximately $268,000, reflecting anticipated
use of the deferred tax benefit to offset the federal tax liability discussed in
Note 6.
Liabilities
totaled
$19,729,000 at March 31, 2008 – a net decrease of approximately $241,000 from
December 31, 2007. One of the lines of credit financing real estate
development at South Padre was extended during the first quarter of 2008,
shifting the classification of approximately $5,000,000 from current to long
term debt.
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
increased by approximately $4,138,000 in the first three months of 2008,
reflecting the company’s net income of $4,321,000, the benefit of employee stock
option compensation in the amount of $21,000, and the unrealized gain from
currency translation in the amount of $10,000, all of which
were partially offset by $214,000 of dividends paid on common and
preferred stock .
There
were no commitments regarding purchase or sale of the company's stock at March
31, 2008; however, see Note 3 to the Condensed Consolidated Financial Statements
regarding stock options outstanding.
Critical
accounting estimates
Future realization of the significant
deferred tax asset is dependent on the company’s 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 would be
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 March 31, 2008, 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 third 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
|
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
|
|
May
15, 2008
|
|
LANDMARK
LAND COMPANY, INC.
|
|
|
|
|
|
|
|
/s/ Joe V. Olree
|
|
Joe
V. Olree
|
|
Senior
Vice President and Chief Financial Officer
|
|
May
15, 2008
|
LANDMARK
LAND COMPANY, INC.
FORM
10-Q
EXHIBIT INDEX
Exhibit
Number
|
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
|
______________________
* Filed
herewith
Landmark Land (CE) (USOTC:LLND)
Gráfica de Acción Histórica
De Dic 2024 a Ene 2025
Landmark Land (CE) (USOTC:LLND)
Gráfica de Acción Histórica
De Ene 2024 a Ene 2025
