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:
September 30,
2009
|
|
|
|
[ ]
|
TRANSITION REPORT UNDER SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
|
|
|
For
the transition period from ____________________ to
_____________
|
|
Commission
file number
__________________________
|
|
LANDMARK LAND COMPANY, INC.
(Exact
Name of Registrant as specified in its Charter)
|
|
DELAWARE
(State
or Other Jurisdiction of Incorporation or Organization)
|
77-0024129
(I.R.S.
Employer Identification No.)
|
|
2817 Crain Highway, Upper Marlboro,
Maryland
(Address
of Principal Executive Offices)
|
20774
(Zip
Code)
|
|
(301) 574-3330
(Registrant's
Telephone Number, Including Area Code)
|
|
______________________________________________________________________________________________
(Former
name, former address and former fiscal year, if changed since last
report)
|
|
Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
|
[√]
Yes [ ] No
|
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reported company” in Rule 12b-2 of the Exchange
Act.
|
Large
accelerated filer [ ]
|
Accelerated
filer [ ]
|
|
Non-accelerated
filer [ ] (Do not check if a smaller reporting
company)
|
Smaller
reporting company [√]
|
|
Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
|
[ ]
Yes [√] No
|
APPLICABLE
ONLY TO CORPORATE ISSUERS
The
number of shares outstanding of the issuer's common stock, $0.50 par value as of
November 9, 2009 was 7,567,530.
Landmark
Land Company, Inc.
INDEX
TO QUARTERLY REPORT ON FORM 10-Q
QUARTER
ENDED SEPTEMBER 30, 2009
|
PART
I
|
FINANCIAL
INFORMATION
|
Page
Number
|
|
|
|
|
|
|
|
|
Consolidated
Financial Statements
|
3
|
|
|
|
|
|
Consolidated
Balance Sheets as of September 30, 2009 (unaudited) and December 31,
2008
|
4
|
|
|
|
|
|
|
|
|
Consolidated
Statements of Operations (unaudited) for the three months and nine months
ended September 30, 2009 and 2008
|
6
|
|
|
|
|
|
|
|
|
Consolidated
Statements of Comprehensive Income (unaudited) for the three months and
nine months ended September 30, 2009 and 2008
|
7
|
|
|
|
|
|
|
|
|
Consolidated
Statements of Cash Flows (unaudited) for the nine months ended September
30, 2009 and 2008
|
8
|
|
|
|
|
|
|
|
|
Notes
to Consolidated Financial Statements
|
9
|
|
|
|
|
|
|
|
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
17
|
|
|
|
|
|
Quantitative
and Qualitative Disclosures about Market Risk
|
21
|
|
|
|
|
|
Controls
and Procedures
|
21
|
|
|
|
PART
II
|
OTHER
INFORMATION
|
|
|
|
|
|
|
|
|
Legal
Proceedings
|
22
|
|
|
|
|
|
Risk
Factors
|
22
|
|
|
|
|
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
22
|
|
|
|
|
|
Defaults
Upon Senior Securities
|
22
|
|
|
|
|
|
Submission
of Matters to a Vote of Security Holders
|
22
|
|
|
|
|
|
|
|
|
Other
Information
|
22
|
|
|
|
|
|
|
|
|
Exhibits
|
22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IMPORTANT
ADVISORY NOTE REGARDING FORWARD-LOOKING
STATEMENTS
|
This
report and the documents incorporated into this report contain forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995 ("PSLRA"), including, but not limited to, statements relating to the
company's business objectives and strategy. Such forward-looking statements are
based on current expectations, management beliefs, certain assumptions made by
the company's management, and estimates and projections about the company's
industry. Words such as "anticipates," "expects," "intends," "plans,"
"believes," "seeks," "estimates," "forecasts," "is likely," "predicts,"
"projects," "judgment," variations of such words and similar expressions are
intended to identify such forward-looking statements. These statements are not
guarantees of future performance and are subject to certain risks, uncertainties
and assumptions that are difficult to predict with respect to timing, extent,
likelihood and degree of occurrence. Therefore, actual results and outcomes may
differ materially from those expressed, forecasted, or contemplated by any such
forward-looking statements.
Factors
that could cause actual events or results to differ materially include, but are
not limited to, the following: early terminations of existing golf course
management agreements; the company's ability to expand its golf management
business; general demand for the company's services or products, intense
competition from other golf course managers and residential developers/builders;
the company's limited cash flow from operations; changes in laws and regulations
affecting the company and/or its services; the outcomes of future litigation and
contingencies; trends in the golf and housing industry; changes in local,
national and international economies; the current war against terrorism; risks
arising from natural disasters; risks involved in doing business in
foreign countries; and risks inherent in and associated with doing business in a
recreational and/or interest rate sensitive industry. Given these uncertainties,
investors are cautioned not to place undue reliance on any such forward-looking
statements.
Unless
required by law, the company undertakes no obligation to update publicly any
forward-looking statements, whether as a result of new information, future
events or otherwise. However, readers should carefully review the risk factors
set forth in other reports or documents that the company files from time to time
with the Securities and Exchange Commission (the "SEC"), particularly Annual
Reports on Form 10-K, Quarterly Reports on Form 10-Q and any Current Reports on
Form 8-K.
PART I – FINANCIAL INFORMATION
.
Item
1.
Consolidated
Financial Statements
|
|
|
|
Consolidated
Balance Sheets
|
|
|
(Unaudited)
|
|
|
|
|
September
30,
|
|
|
December
31,
|
|
|
Assets
|
|
2009
|
|
|
2008
|
|
|
Current
assets
|
|
|
Cash
and cash equivalents
|
|
$
|
254,759
|
|
|
$
|
270,278
|
|
|
Accounts
receivable
|
|
|
191,543
|
|
|
|
302,804
|
|
|
Receivable
from affiliates
|
|
|
763,482
|
|
|
|
1,265,250
|
|
|
Inventories
|
|
|
77,401
|
|
|
|
118,441
|
|
|
Other
current assets
|
|
|
125,074
|
|
|
|
259,523
|
|
|
Total
current assets
|
|
|
1,412,259
|
|
|
|
2,216,296
|
|
|
|
|
|
Real
estate and golf management contract rights acquired,
|
|
|
|
|
|
|
|
|
|
net
of accumulated amortization of $961,726 in 2009 and 2008
|
|
|
2,323,861
|
|
|
|
2,323,861
|
|
|
|
|
|
Real
Estate
|
|
|
Real
estate held for sale
|
|
|
4,441,471
|
|
|
|
3,163,498
|
|
|
Real
estate held for or under development
|
|
|
10,969,022
|
|
|
|
12,366,236
|
|
|
Total
real estate
|
|
|
15,410,493
|
|
|
|
15,529,734
|
|
|
|
|
|
Property and equipment,
net of accumulated depreciation
|
|
|
of
$1,688,999 and $1,228,264 in 2009 and 2008, respectively
|
|
|
5,482,015
|
|
|
|
6,091,385
|
|
|
|
|
|
Other
assets
|
|
|
Investment
in unconsolidated affiliates
|
|
|
14,939,583
|
|
|
|
15,734,327
|
|
|
Receivable
from affiliates, non-current
|
|
|
487,064
|
|
|
|
548,551
|
|
|
Deposits
|
|
|
85,355
|
|
|
|
80,181
|
|
|
Deferred
tax assets
|
|
|
4,400,000
|
|
|
|
4,400,000
|
|
|
Total
other assets
|
|
|
19,912,002
|
|
|
|
20,763,059
|
|
|
|
|
|
Total
assets
|
|
$
|
44,540,630
|
|
|
$
|
46,924,335
|
|
The
accompanying Notes to Consolidated Financial Statements are an integral part of
these financial statements.
|
Landmark
Land Company, Inc.
|
|
|
Consolidated
Balance Sheets
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
September
30,
|
|
|
December
31,
|
|
|
Liabilities
and Stockholders' Equity
|
|
2009
|
|
|
2008
|
|
|
Current
liabilities
|
|
|
Current
portion of notes payable to others
|
|
$
|
13,440,086
|
|
|
$
|
13,944,621
|
|
|
Current
portion of notes payable to affiliates
|
|
|
1,023,874
|
|
|
|
892,074
|
|
|
Accounts
payable and accrued expenses
|
|
|
1,170,267
|
|
|
|
1,165,343
|
|
|
Accrued
payroll and related expenses
|
|
|
791,424
|
|
|
|
404,373
|
|
|
Accrued
interest due affiliates
|
|
|
926,314
|
|
|
|
789,551
|
|
|
Accrued
interest due others
|
|
|
629,276
|
|
|
|
549,436
|
|
|
Other
liabilities and deferred credits
|
|
|
150,886
|
|
|
|
97,947
|
|
|
Dividends
payable
|
|
|
158,407
|
|
|
|
8,407
|
|
|
Current
income taxes
|
|
|
20,740
|
|
|
|
5,061
|
|
|
Total
current liabilities
|
|
|
18,311,274
|
|
|
|
17,856,813
|
|
|
|
|
|
Liabilities
due after one year
|
|
|
|
|
|
|
|
|
|
Notes
payable to others
|
|
|
3,557,655
|
|
|
|
3,542,310
|
|
|
Purchase
obligation to others
|
|
|
500,000
|
|
|
|
-
|
|
|
Notes
payable to affiliate
|
|
|
1,310,000
|
|
|
|
200,000
|
|
|
Total
liabilities payable after one year
|
|
|
5,367,655
|
|
|
|
3,742,310
|
|
|
|
|
|
Total
liabilities
|
|
|
23,678,929
|
|
|
|
21,599,123
|
|
|
|
|
|
Stockholders'
equity
|
|
|
Preferred
stock, Series C, non-voting, $.50 par value; $100
|
|
|
|
|
|
|
|
|
|
liquidation
value; $10 cumulative annual dividend;
|
|
|
|
|
|
|
|
|
|
50,000
shares authorized; 20,000 shares issued and outstanding,
|
|
|
|
|
|
|
stated
at liquidation value
|
|
|
2,000,000
|
|
|
|
2,000,000
|
|
|
Common
stock, $.50 par value; 20,000,000 shares authorized;
|
|
|
|
|
|
|
|
|
|
8,804,468
shares issued; 7,567,530 shares outstanding
|
|
|
4,402,234
|
|
|
|
4,402,234
|
|
|
Additional
paid-in capital
|
|
|
30,491,464
|
|
|
|
30,449,470
|
|
|
Treasury
stock, at cost, 1,236,938 shares
|
|
|
(1,299,820
|
)
|
|
|
(1,299,820
|
)
|
|
Accumulated
deficit
|
|
|
(14,668,150
|
)
|
|
|
(10,167,890
|
)
|
|
Accumulated
other comprehensive loss
|
|
|
(64,027
|
)
|
|
|
(58,782
|
)
|
|
Total
stockholders' equity
|
|
|
20,861,701
|
|
|
|
25,325,212
|
|
|
|
|
|
Total
liabilities and stockholders' equity
|
|
$
|
44,540,630
|
|
|
$
|
46,924,335
|
|
The
accompanying Notes to Consolidated Financial Statements are an integral part of
these financial statements.
|
Landmark
Land Company, Inc.
|
|
|
Consolidated
Statements of Operations
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Three
months ended September 30,
|
|
|
Nine
months ended September 30,
|
|
|
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real
estate sales
|
|
$
|
302,000
|
|
|
$
|
1,207,699
|
|
|
$
|
1,614,335
|
|
|
$
|
4,460,011
|
|
|
Real
estate services revenue
|
|
|
282,437
|
|
|
|
313,662
|
|
|
|
939,382
|
|
|
|
826,674
|
|
|
Golf
course revenue
|
|
|
271,272
|
|
|
|
201,910
|
|
|
|
952,161
|
|
|
|
950,175
|
|
|
Golf
merchandise sales
|
|
|
43,715
|
|
|
|
56,302
|
|
|
|
156,546
|
|
|
|
204,410
|
|
|
Food
and beverage sales
|
|
|
303,676
|
|
|
|
211,446
|
|
|
|
834,831
|
|
|
|
529,205
|
|
|
Management
and consulting fees
|
|
|
517,883
|
|
|
|
735,150
|
|
|
|
1,248,735
|
|
|
|
2,510,357
|
|
|
Reimbursement
of out-of-pocket expenses
|
|
|
286,866
|
|
|
|
344,297
|
|
|
|
1,110,338
|
|
|
|
1,162,952
|
|
|
Total
revenues
|
|
|
2,007,849
|
|
|
|
3,070,466
|
|
|
|
6,856,328
|
|
|
|
10,643,784
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs
of revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
of real estate sold
|
|
|
216,100
|
|
|
|
773,011
|
|
|
|
1,072,275
|
|
|
|
3,044,995
|
|
|
Real
estate operating expenses
|
|
|
489,902
|
|
|
|
657,152
|
|
|
|
1,579,894
|
|
|
|
2,077,512
|
|
|
Cost
of golf merchandise sold
|
|
|
27,774
|
|
|
|
37,023
|
|
|
|
117,008
|
|
|
|
140,032
|
|
|
Cost
of food and beverage sold
|
|
|
114,581
|
|
|
|
97,056
|
|
|
|
321,413
|
|
|
|
233,075
|
|
|
Golf
operating expenses
|
|
|
569,041
|
|
|
|
558,513
|
|
|
|
1,633,212
|
|
|
|
1,631,990
|
|
|
Out-of-pocket
expenses
|
|
|
286,866
|
|
|
|
344,297
|
|
|
|
1,110,338
|
|
|
|
1,162,952
|
|
|
Management
and consulting payroll and related expenses
|
|
|
693,370
|
|
|
|
1,029,040
|
|
|
|
2,775,577
|
|
|
|
3,187,959
|
|
|
Depreciation
and amortization
|
|
|
152,931
|
|
|
|
148,386
|
|
|
|
473,717
|
|
|
|
481,541
|
|
|
Total
costs of revenue
|
|
|
2,550,565
|
|
|
|
3,644,478
|
|
|
|
9,083,434
|
|
|
|
11,960,056
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
(loss)
|
|
|
(542,716
|
)
|
|
|
(574,012
|
)
|
|
|
(2,227,106
|
)
|
|
|
(1,316,272
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General,
administrative and other expenses
|
|
|
(161,439
|
)
|
|
|
(482,200
|
)
|
|
|
(683,404
|
)
|
|
|
(1,553,845
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
(expenses) income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
in (loss) income of unconsolidated affiliates
|
|
|
(50,172
|
)
|
|
|
(342,068
|
)
|
|
|
(850,985
|
)
|
|
|
5,340,493
|
|
|
Interest
income
|
|
|
278
|
|
|
|
2,787
|
|
|
|
886
|
|
|
|
51,387
|
|
|
Interest
expense
|
|
|
(211,921
|
)
|
|
|
(144,982
|
)
|
|
|
(555,384
|
)
|
|
|
(469,551
|
)
|
|
Total
other (expenses) income
|
|
|
(261,815
|
)
|
|
|
(484,263
|
)
|
|
|
(1,405,483
|
)
|
|
|
4,922,329
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
(loss) income before income taxes
|
|
|
(965,970
|
)
|
|
|
(1,540,475
|
)
|
|
|
(4,315,993
|
)
|
|
|
2,052,212
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal
and state income taxes
|
|
|
(4,600
|
)
|
|
|
3,271
|
|
|
|
(34,267
|
)
|
|
|
(280,008
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
(loss) income
|
|
$
|
(970,570
|
)
|
|
$
|
(1,537,204
|
)
|
|
$
|
(4,350,260
|
)
|
|
$
|
1,772,204
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
(loss) income per common share
|
|
$
|
(0.13
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
(0.59
|
)
|
|
$
|
0.22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
weighted average shares outstanding
|
|
|
7,567,530
|
|
|
|
7,567,530
|
|
|
|
7,567,530
|
|
|
|
7,567,530
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
(loss) income per common share
|
|
$
|
(0.13
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
(0.59
|
)
|
|
$
|
0.22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
weighted average shares outstanding
|
|
|
7,567,530
|
|
|
|
7,567,530
|
|
|
|
7,567,530
|
|
|
|
7,567,530
|
|
The
accompanying Notes to Consolidated Financial Statements are an integral part of
these financial statements.
|
|
|
|
Consolidated
Statements of Comprehensive Income
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Three
months ended September 30,
|
|
|
Nine
months ended September 30,
|
|
|
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
(loss) income
|
|
$
|
(970,570
|
)
|
|
$
|
(1,537,204
|
)
|
|
$
|
(4,350,260
|
)
|
|
$
|
1,772,204
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
comprehensive (loss) income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
currency translation adjustments
|
|
|
(3,956
|
)
|
|
|
(632
|
)
|
|
|
(5,245
|
)
|
|
|
8,263
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
(loss) income
|
|
$
|
(974,526
|
)
|
|
$
|
(1,537,836
|
)
|
|
$
|
(4,355,505
|
)
|
|
$
|
1,780,467
|
|
The
accompanying Notes to Consolidated Financial Statements are an integral part of
these financial statements.
|
|
|
|
Consolidated
Statements of Cash Flows
|
|
|
Nine
Months Ended September 30, 2009 and 2008
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
2009
|
|
|
2008
|
|
|
Cash
flows from operating activities
|
|
|
|
|
|
|
|
Net
(loss) income for the period
|
|
$
|
(4,350,260
|
)
|
|
$
|
1,772,204
|
|
|
Adjustments
to reconcile net (loss) income to net cash
|
|
|
|
|
|
|
|
|
|
(used)
by operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation
and amortization
|
|
|
473,717
|
|
|
|
481,541
|
|
|
Stock
options expensed
|
|
|
41,994
|
|
|
|
63,473
|
|
|
Loss
on disposal of property and equipment
|
|
|
2,195
|
|
|
|
-
|
|
|
Equity
in loss (income) of unconsolidated affiliates
|
|
|
789,499
|
|
|
|
(5,340,493
|
)
|
|
Purchase
and development of real estate inventory
|
|
|
(1,048,646
|
)
|
|
|
(3,422,333
|
)
|
|
Sale
of real estate inventory
|
|
|
1,302,110
|
|
|
|
3,235,238
|
|
|
(Increase)
decrease in
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
111,261
|
|
|
|
(215,763
|
)
|
|
Receivable
from affiliates
|
|
|
563,255
|
|
|
|
(544,807
|
)
|
|
Inventories
|
|
|
41,040
|
|
|
|
(17,458
|
)
|
|
Other
current assets
|
|
|
134,449
|
|
|
|
94,903
|
|
|
Deposits
|
|
|
(5,174
|
)
|
|
|
(80,181
|
)
|
|
Deferred
tax assets
|
|
|
-
|
|
|
|
268,000
|
|
|
Increase
(decrease) in
|
|
|
|
|
|
|
|
|
|
Accounts
payable and accrued expenses
|
|
|
4,924
|
|
|
|
(52,419
|
)
|
|
Accrued
payroll and related expenses
|
|
|
387,051
|
|
|
|
12,484
|
|
|
Accrued
interest
|
|
|
216,603
|
|
|
|
139,895
|
|
|
Other
liabilities and deferred credits
|
|
|
52,939
|
|
|
|
(180,583
|
)
|
|
Current
income taxes
|
|
|
15,679
|
|
|
|
(68,439
|
)
|
|
Net
cash (used) by operating activities
|
|
|
(1,267,364
|
)
|
|
|
(3,854,738
|
)
|
|
|
|
|
Cash
flows from investing activities
|
|
|
|
|
|
|
|
|
|
Purchase
of property and equipment, net
|
|
|
(764
|
)
|
|
|
(50,380
|
)
|
|
Net
cash (used) by investing activities
|
|
|
(764
|
)
|
|
|
(50,380
|
)
|
|
|
|
|
Cash
flows from financing activities
|
|
|
|
|
|
|
|
|
|
Proceeds
from notes payable to others
|
|
|
1,167,270
|
|
|
|
2,445,595
|
|
|
Repayments
on notes payable to others
|
|
|
(1,156,461
|
)
|
|
|
(2,675,836
|
)
|
|
Proceeds
from notes payable to affiliates
|
|
|
1,241,800
|
|
|
|
-
|
|
|
Sale
of preferred stock
|
|
|
-
|
|
|
|
1,000,000
|
|
|
Cash
dividends paid on common stock
|
|
|
-
|
|
|
|
(567,565
|
)
|
|
Cash
dividends paid on preferred stock
|
|
|
-
|
|
|
|
(77,466
|
)
|
|
Net
cash provided by financing activities
|
|
|
1,252,609
|
|
|
|
124,728
|
|
|
|
|
|
Net
(decrease) in cash during period
|
|
|
(15,519
|
)
|
|
|
(3,780,390
|
)
|
|
|
|
|
Cash
balance, beginning of period
|
|
|
270,278
|
|
|
|
4,934,820
|
|
|
|
|
|
Cash
balance, end of period
|
|
$
|
254,759
|
|
|
$
|
1,154,430
|
|
|
|
|
|
Supplemental
disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
|
Cash
paid for interest, including $29,500 interest paid to
|
|
|
|
|
|
|
|
|
|
affiliates
in 2009 and $20,000 in 2008
|
|
$
|
640,428
|
|
|
$
|
729,231
|
|
|
|
|
|
|
|
|
|
|
|
|
Housing
units leased to others, transferred from Real estate held
|
|
|
|
|
|
|
|
|
|
for
development to Property and equipment at cost
|
|
$
|
-
|
|
|
$
|
840,612
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
paid for income taxes
|
|
$
|
17,188
|
|
|
$
|
5,308
|
|
The
accompanying Notes to Consolidated Financial Statements are an integral part of
these financial statements.
Landmark
Land Company, Inc.
Notes
to Consolidated Financial Statements
Landmark
Land Company, Inc.
Notes
To Consolidated Financial Statements
(Unaudited)
1. Basis
of Presentation
The
accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Article 3 of Regulation S-X
promulgated by the Securities and Exchange Commission. Accordingly,
they do not include all of the information and footnotes normally included in
the annual financial statements. In the opinion of management, all
adjustments considered necessary for a fair presentation have been
included. The company has evaluated subsequent events through the
time of filing these financial statements with the Securities Exchange
Commission on November 13, 2009. Operating results for the nine-month
period ended September 30, 2009 are not necessarily indicative of the results
that may be expected for the fiscal year ending December 31,
2009. There have been no significant changes to accounting policies
or critical estimates during the first nine months of 2009. For
further information, please refer to the audited financial statements and
footnotes thereto included in the company’s Form 10-K for the year ended
December 31, 2008, as filed with the Securities and Exchange
Commission.
The
accompanying financial statements include the assets, liabilities, revenues and
expenses of Landmark Land Company, Inc. and its wholly-owned subsidiaries,
Landmark of Spain, Inc., DPMG, Inc., LML Caribbean, LTD., Lake Presidential
Beverage Company, Inc., South Padre Island Development, LLC, South Padre Island
Realty, LLC, and SPIBS, LLC. The three entities related to the South
Padre project, South Padre Island Development, LLC, South Padre Island Realty,
LLC, and SPIBS, LLC, are sometimes collectively referred to as “South
Padre”. All significant inter-company accounts and transactions have
been eliminated in consolidation.
LML Caribbean, LTD
owns a
33.33% interest in Apes Hill Development SRL (“Apes Hill”) and accounts for its
investment on the equity basis. Apes Hill’s functional currency is
the Barbados dollar. Apes Hill reported the following results
for the periods shown below, converted to US dollars at the exchange rate of two
Barbados dollars to one US dollar:
|
|
|
Three Months Ended September
30,
|
|
|
Nine Months Ended
September 30,
|
|
|
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
|
Revenue
|
|
$
|
2,239,138
|
|
|
$
|
1,059,373
|
|
|
$
|
3,830,171
|
|
|
$
|
32,182,248
|
|
|
Gross
profit
|
|
$
|
1,357,812
|
|
|
$
|
591,102
|
|
|
$
|
2,098,043
|
|
|
$
|
19,305,633
|
|
|
(Loss)
Profit from continuing operations
|
|
$
|
(65,420
|
)
|
|
$
|
(927,851
|
)
|
|
$
|
(1,984,057
|
)
|
|
$
|
16,552,968
|
|
|
Net
(loss) income
|
|
$
|
(65,420
|
)
|
|
$
|
(927,851
|
)
|
|
$
|
(1,984,057
|
)
|
|
$
|
16,552,968
|
|
Apes Hill
closed 3 lot sales in the third quarter of 2009 generating US $2.2 million in
revenue compared to 2 lot sales in the third quarter of 2008 generating US $1.0
million in revenue. At September 30, 2009, Apes Hill reported 11 lots
and 2 houses under contract with a total sales value of approximately US $27.5
million.
The
company has a receivable from Apes Hill in the amount of $0.6 million at
September 30, 2009 representing unpaid management fees and out-of-pocket
expenses. The amount is reported in the Consolidated Balance Sheet as
Receivable from affiliates.
Landmark
Land Company, Inc.
Notes
to Consolidated Financial Statements
Landmark of Spain, Inc.
owns a
50% interest in a Spanish company, Landmark Developments of Spain, SL (“Landmark
Spain”). Landmark of Spain, Inc. accounts for its investment on the
equity basis. Landmark Spain’s functional currency is the
Euro. Landmark Spain reported the following results for the periods
shown below, converted to US dollars at the approximate average rate of exchange
during each period:
|
|
|
Three
Months Ended September 30,
|
|
|
Nine
Months Ended
September
30,
|
|
|
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
|
Revenue
|
|
$
|
1,800
|
|
|
$
|
9,111
|
|
|
$
|
37,208
|
|
|
$
|
312,782
|
|
|
Gross
(loss)
|
|
$
|
(51,533
|
)
|
|
$
|
(65,570
|
)
|
|
$
|
(112,482
|
)
|
|
$
|
(354,327
|
)
|
|
(Loss)
from continuing operations
|
|
$
|
(51,533
|
)
|
|
$
|
(65,570
|
)
|
|
$
|
(112,482
|
)
|
|
$
|
(354,327
|
)
|
|
Net
income (loss)
|
|
$
|
(51,533
|
)
|
|
$
|
(65,570
|
)
|
|
$
|
(112,482
|
)
|
|
$
|
(354,327
|
)
|
The
company has a receivable from this affiliate of $0.6 million as of September 30,
2009. In addition, the company has recorded cumulative losses
from this investment of $119,000 more than its original capital investment of
$1.3 million and this excess loss is reported in the Consolidated Balance Sheet
as a reduction in the company’s Receivable from affiliates.
DPMG owns
a 7.45% interest in
Presidential Golf Club, LLC
, a
Maryland limited liability company (“Presidential”). Presidential has
developed an 18-hole championship golf course, Lake Presidential Golf Club, on
approximately 240 acres of land in Upper Marlboro, Maryland. The
course was opened for play on May 1, 2008. During the second quarter
of 2009, the company corrected the accounting for its investment in Presidential
from the cost method to the equity method in recognition of Presidential’s legal
structure as a limited liability company which maintains specific ownership
accounts for each investor. The $133,000 recorded as Landmark’s 7.45%
share of Presidential’s loss through September 30, 2009 includes $90,000
applicable to the year ended December 31, 2008. The 2008 adjustment
included in the 2009 financial statements is not material to the company’s
reported operating results for either period. Presidential reported
the following results for the periods shown below:
|
|
|
Three
Months Ended September 30,
|
|
|
Nine
Months Ended
September
30,
|
|
|
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
|
Revenue
|
|
$
|
1,096,503
|
|
|
$
|
788,611
|
|
|
$
|
2,463,367
|
|
|
$
|
1,488,839
|
|
|
Gross
profit
|
|
$
|
958,298
|
|
|
$
|
674,427
|
|
|
$
|
2,104,291
|
|
|
$
|
1,295,233
|
|
|
Loss
from continuing operations
|
|
$
|
(36,208
|
)
|
|
$
|
(434,492
|
)
|
|
$
|
(577,745
|
)
|
|
$
|
(409,212
|
)
|
|
Net
loss
|
|
$
|
(36,208
|
)
|
|
$
|
(434,492
|
)
|
|
$
|
(577,745
|
)
|
|
$
|
(409,212
|
)
|
The
company has receivables from Presidential totaling $0.2 million at September 30,
2009, representing unpaid management fees, out-of-pocket expenses, short-term
working capital loans, and accrued interest. The amount is reported
in the Consolidated Balance Sheet as Receivable from affiliates.
Lake Presidential Beverage Company,
LLC
is a wholly owned subsidiary of the company formed on November 7,
2007 to hold the alcoholic beverage license for the Lake Presidential Golf Club
in Maryland.
Fair value of financial
instruments:
The fair value of a financial instrument is
generally the amount at which the instrument could be exchanged in a current
transaction between willing parties. The fair value of cash,
receivables, and payables approximates cost due to the short period of time to
maturity.
Landmark
Land Company, Inc.
Notes
to Consolidated Financial Statements
2. Liquidity
and Capital Resources
The
company’s current operating results are largely dependent on real estate sales
in its developments in Texas and Barbados. The general economic
recession in the US that began in late 2007 has hit the real estate market
particularly hard. The company’s properties are suffering along with
most other real estate developments in the US and abroad. Sales
contracts already in the pipeline at the end of 2007, particularly in the Apes
Hill development in Barbados, generated profitable sales for the company in
2008. However, new contracts in 2008 and in the first nine months of
2009 were minimal. Although prospective purchaser traffic has
increased in our Texas development over the last few months, most shoppers are
still looking to find bargains at the bottom of the market. We
continue to liquidate existing inventories of lots and houses at reduced profit
margins and to defer any significant additional development until the market
improves.
The
reduction in real estate sales beginning in the second half of 2008 and through
the first three quarters of 2009 has significantly reduced the company’s cash
flows from operations. In addition, cash flows generated in Barbados
are generally used to repay bank loans or are reinvested in continuing
development of the Apes Hill property and the company’s accumulated profits are
not expected to be available for distribution from Barbados until late in 2010
or sometime in 2011. In response to the reduction in cash flows
generated from operations, the company has taken various actions to reduce
expenses and minimize operating losses and has increased its borrowings, as
further discussed below.
Recognizing
that, historically, personnel costs have accounted for more than half of the
company’s operating costs (excluding the cost of real estate and merchandise
sold), management has reduced the number of employees by approximately 37% from
132 employees at June 30, 2008 to 83 employees at September 30,
2009. Current staffing levels remain adequate to service additional
projects that the company is pursuing. In the second quarter of
2009, the company grounded its airplane and terminated employment of its
pilots. To further conserve cash, a portion of the salaries of
certain officers is being accrued with actual payment deferred until cash flow
improves.
The
company has increased its financing activity including loans from affiliates of
$1.4 million during the fourth quarter of 2008 and the first half of
2009. During the third quarter of 2009, the company also
negotiated for an investor to acquire a member interest in South Padre as
discussed in Note 9, although the final documents have not been executed as of
the date of filing this Form 10Q. In addition, the company has
applied for new lines of credit from banks operating in the Caribbean, and is
exploring additional working capital loans from other sources; however, there is
no guarantee that sufficient additional funding will be received. If
loans are not received, or if our current bank lenders do not continue to renew
existing credits or if affiliates should call their working capital loans, the
company could be required to make further reductions in personnel and to
liquidate real estate or other assets at prices less than would be expected
under normal operating conditions. The Consolidated Financial
Statements do not reflect any adjustments that might result from the outcome of
these uncertainties.
The
company’s Consolidated Balance Sheet at September 30, 2009 reports current
assets totaling $1.4 million and current liabilities totaling $18.3 million for
a $16.9 million excess of current liabilities over current
assets. Approximately $12.4 million of the current liabilities is due
to two Texas banks that have funded the South Padre real estate development for
the last ten years. The banks have recently renewed credit
lines covering the outstanding debt for periods of six months to one
year. Approximately $2.0 million of the current liabilities is owed
to affiliates who have advanced funds for working capital and are not expected
to demand repayment until the company’s liquidity position
improves.
Landmark
Land Company, Inc.
Notes
to Consolidated Financial Statements
3. Earnings
Per Share
Earnings
per share (EPS) are computed using weighted average number of common shares
outstanding during the year. Diluted earnings per share reflect the
common stock options granted to employees, directors and legal counsel in 2006
and 2007. The following is a reconciliation of the numerators and
denominators used in the calculation of earnings per share:
|
|
|
Three
Months Ended
September
30,
|
|
|
Nine
Months Ended September 30,
|
|
|
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
|
Net
(loss) income
|
|
$
|
(970,570
|
)
|
|
$
|
(1,537,204
|
)
|
|
$
|
(4,350,260
|
)
|
|
$
|
1,772,204
|
|
|
Less: Preferred
dividends
|
|
|
(50,000
|
)
|
|
|
(27,466
|
)
|
|
|
(150,000
|
)
|
|
|
(77,466
|
)
|
|
Net
(loss) income available to common shareholders
|
|
|
(1,020,570
|
)
|
|
|
(1,564,670
|
)
|
|
|
(4,500,260
|
)
|
|
|
1,694,738
|
|
|
Weighted
average common shares outstanding
|
|
|
7,567,530
|
|
|
|
7,567,530
|
|
|
|
7,567,530
|
|
|
|
7,567,530
|
|
|
Incremental
shares from assumed exercise of dilutive options
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Diluted
weighted average common shares outstanding
|
|
|
7,567,530
|
|
|
|
7,567,530
|
|
|
|
7,567,530
|
|
|
|
7,567,530
|
|
|
Basic
(loss) income per common share
|
|
$
|
(0.13
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
(0.59
|
)
|
|
$
|
0.22
|
|
|
Diluted
(loss) income per common share
|
|
$
|
(0.13
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
(0.59
|
)
|
|
$
|
0.22
|
|
The
dilutive effect of the employee stock options and directors’ options is reported
using the treasury stock method.
4. Stock
Option Plans
The 2006
Landmark Land Company, Inc. Incentive Stock Option Plan (“Plan”) was adopted by
the Board of Directors on April 29, 2006 and approved by the shareholders on
November 18, 2006. Generally, options must be granted within ten
years of the plan adoption date, vest five years from the date of grant, and be
exercised within five years from the date of vesting.
A summary
of options issued to employees under the company’s incentive stock option plan
as of September 30, 2009, and changes during the nine months then ended is
presented below:
|
Options
|
|
Shares
|
|
Weighted-Average
Grant-Date
Fair Value
|
|
Outstanding
at January 1, 2009
|
|
606,000
|
|
$0.62
|
|
Granted
|
|
-
|
|
-
|
|
Vested
|
|
-
|
|
-
|
|
Forfeited
|
|
130,500
|
|
-
|
|
Outstanding
at September 30, 2009
|
|
475,500
|
|
$0.59
|
|
Exercisable
at September 30, 2009
|
|
-
|
|
-
|
During
the first nine months of 2009, the company recognized share-based compensation
costs in the amount of $42,000. As of September 30, 2009, there was
$147,000 of total unrecognized compensation costs related to non-vested
share-based compensation arrangements granted under the plan. That
cost is expected to be recognized over the remaining 3.2 years vesting period
for grants outstanding under the plan.
The
company has also granted options to its independent directors and legal counsel
to purchase a total of 300,000 shares of the company’s common stock at 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.
Landmark
Land Company, Inc.
Notes
to Consolidated Financial Statements
A summary
of options granted to independent directors and legal counsel as of September
30, 2009, and changes during the nine months then ended is presented
below:
|
Options
|
Shares
|
|
Weighted-Average
Exercise
Price
|
|
Weighted-
Average Remaining Contractual
Term
|
|
Aggregate
Intrinsic
Value
|
|
Outstanding
at January 1, 2009
|
300,000
|
|
$2.23
|
|
2.7
years
|
|
-
|
|
Granted
|
-
|
|
-
|
|
-
|
|
-
|
|
Exercised
|
-
|
|
-
|
|
-
|
|
-
|
|
Forfeited
or expired
|
-
|
|
-
|
|
-
|
|
-
|
|
Outstanding
at September 30, 2009
|
300,000
|
|
$2.23
|
|
1.9
years
|
|
-
|
|
Exercisable
at September 30, 2009
|
300,000
|
|
$2.23
|
|
1.9
years
|
|
-
|
There was
no related unrecognized cost related to the directors and legal counsel options
as of September 30, 2009.
5. Reclassifications
Certain
reclassifications have been made in the 2008 financial statements to conform to
the 2009 presentation. These changes had no effect on net
income.
6. Commitments
The
company’s subsidiary, South Padre, provides a one-year latent defects warranty
and a ten-year structural warranty on the houses it builds. The
accompanying financial statements include a provision for warranty expense
calculated as approximately 0.5% of gross house sales. The summary of
warranty accruals for the nine months ended September 30, 2009 and 2008
follows:
|
|
|
2009
|
|
|
2008
|
|
|
Warranty
accrual balance January 1,
|
|
$
|
90,897
|
|
|
$
|
132,165
|
|
|
Provision
for warranty
|
|
|
6,258
|
|
|
|
20,090
|
|
|
Payments
|
|
|
(20,117
|
)
|
|
|
(55,413
|
)
|
|
Warranty
accrual balance September 30,
|
|
$
|
77,038
|
|
|
$
|
96,842
|
|
7. Income
Taxes
The
company reported a loss before income taxes of $4.3 million for the nine-month
period ended September 30, 2009. The provision for federal and state income
taxes is a net provision of $34,000 and is comprised of estimated current state
taxes. Deferred federal and state tax benefits of approximately $1.5 million
generated by the current period loss are offset by an increase in the deferred
tax asset valuation allowance in the same amount.
It should
be noted that the estimated net future benefit available to the company from all
its deferred tax positions is approximately $49.3 million at September 30, 2009;
however, realization of that benefit is dependent on the company’s ability to
generate taxable income in the future. The company has established a
deferred tax asset valuation allowance to reduce the carrying value of the
deferred tax asset to an amount that is more likely than not to be realized in
the future. Based on a current evaluation of historical and
prospective earnings, the company increased the valuation allowance during 2009
by approximately $1.5 million to a balance of $44.9 million, reducing the net
deferred tax benefit to $4,400,000 as of September 30, 2009.
Landmark
Land Company, Inc.
Notes
to Consolidated Financial Statements
The
company had no material unrecognized tax benefits at September 30, 2009, nor
does it expect any significant change in that status during the next 12
months. No accrued interest or penalties on uncertain tax positions
have been included on the statements of operations or the statement of financial
condition as of September 30, 2009. Should the company adopt tax
positions for which it would be appropriate to accrue interest and penalties,
such costs would be reflected in the tax expense for the period in which such
costs accrued. The company is subject to U.S. federal income tax and
to several state and foreign jurisdictions. Returns filed for tax
periods ending after December 31, 2004 are still open to examination by those
relevant taxing authorities.
8.
Segment Information
The
company’s operations are comprised of four segments – real estate, golf,
management services, and corporate investments and
administration. The following table summarizes the three months and
nine months ended September 30, 2009 and 2008 operations by
segment:
|
|
|
Three
Months Ended September 30, 2009
|
|
|
|
|
Real
Estate
|
|
|
Golf
|
|
|
Management
|
|
|
Corporate
|
|
|
Total
|
|
|
Revenue
|
|
$
|
584,437
|
|
|
$
|
618,663
|
|
|
$
|
804,749
|
|
|
$
|
-
|
|
|
$
|
2,007,849
|
|
|
Costs
of revenue
|
|
|
(706,002
|
)
|
|
|
(711,396
|
)
|
|
|
(980,236
|
)
|
|
|
-
|
|
|
|
(2,397,634
|
)
|
|
Depreciation
and amortization
|
|
|
(6,613
|
)
|
|
|
(37,662
|
)
|
|
|
(7,278
|
)
|
|
|
(101,378
|
)
|
|
|
(152,931
|
)
|
|
Operating
income (loss)
|
|
|
(128,178
|
)
|
|
|
(130,395
|
)
|
|
|
(182,765
|
)
|
|
|
(101,378
|
)
|
|
|
(542,716
|
)
|
|
General
and administrative
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(161,439
|
)
|
|
|
(161,439
|
)
|
|
Other
income (expenses)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(261,815
|
)
|
|
|
(261,815
|
)
|
|
Federal
& state income taxes
|
|
|
44,631
|
|
|
|
45,435
|
|
|
|
64,071
|
|
|
|
(158,737
|
)
|
|
|
(4,600
|
)
|
|
Net
income (loss)
|
|
$
|
(83,547
|
)
|
|
$
|
(84,960
|
)
|
|
$
|
(118,694
|
)
|
|
$
|
(683,369
|
)
|
|
$
|
(970,570
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-lived
assets
|
|
$
|
16,442,539
|
|
|
$
|
1,573,232
|
|
|
$
|
6,363,173
|
|
|
$
|
18,749,427
|
|
|
$
|
43,128,371
|
|
|
Other
assets
|
|
|
146,653
|
|
|
|
266,262
|
|
|
|
918,228
|
|
|
|
81,116
|
|
|
|
1,412,259
|
|
|
Total
assets
|
|
$
|
16,589,192
|
|
|
$
|
1,839,494
|
|
|
$
|
7,281,401
|
|
|
$
|
18,830,543
|
|
|
$
|
44,540,630
|
|
|
|
|
|
|
|
Three
Months Ended September 30, 2008
|
|
|
|
|
Real
Estate
|
|
|
Golf
|
|
|
Management
|
|
|
Corporate
|
|
|
Total
|
|
|
Revenue
|
|
$
|
1,521,361
|
|
|
$
|
469,658
|
|
|
$
|
1,079,447
|
|
|
$
|
-
|
|
|
$
|
3,070,466
|
|
|
Costs
of revenue
|
|
|
(1,430,163
|
)
|
|
|
(692,592
|
)
|
|
|
(1,373,337
|
)
|
|
|
-
|
|
|
|
(3,496,092
|
)
|
|
Depreciation
and amortization
|
|
|
(8,235
|
)
|
|
|
(31,036
|
)
|
|
|
(7,472
|
)
|
|
|
(101,643
|
)
|
|
|
(148,386
|
)
|
|
Operating
income (loss)
|
|
|
82,963
|
|
|
|
(253,970
|
)
|
|
|
(301,362
|
)
|
|
|
(101,643
|
)
|
|
|
(574,012
|
)
|
|
General
and administrative
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(482,200
|
)
|
|
|
(482,200
|
)
|
|
Other
income (expenses)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(484,263
|
)
|
|
|
(484,263
|
)
|
|
Federal
& state income taxes
|
|
|
(33,650
|
)
|
|
|
102,799
|
|
|
|
126,689
|
|
|
|
(192,567
|
)
|
|
|
3,271
|
|
|
Net
income (loss)
|
|
$
|
49,313
|
|
|
$
|
(151,171
|
)
|
|
$
|
(174,673
|
)
|
|
$
|
(1,260,673
|
)
|
|
$
|
(1,537,204
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-lived
assets
|
|
$
|
16,427,238
|
|
|
$
|
1,090,960
|
|
|
$
|
5,468,489
|
|
|
$
|
14,477,652
|
|
|
$
|
37,464,339
|
|
|
Other
assets
|
|
|
604,624
|
|
|
|
247,740
|
|
|
|
1,562,009
|
|
|
|
811,610
|
|
|
|
3,225,983
|
|
|
Total
assets
|
|
$
|
17,031,862
|
|
|
$
|
1,338,700
|
|
|
$
|
7,030,498
|
|
|
$
|
15,289,262
|
|
|
$
|
40,690,322
|
|
Landmark
Land Company, Inc.
Notes
to Consolidated Financial Statements
|
|
|
Nine
Months Ended September 30, 2009
|
|
|
|
|
Real
Estate
|
|
|
Golf
|
|
|
Management
|
|
|
Corporate
|
|
|
Total
|
|
|
Revenue
|
|
$
|
2,553,717
|
|
|
$
|
1,943,538
|
|
|
$
|
2,359,073
|
|
|
$
|
-
|
|
|
$
|
6,856,328
|
|
|
Costs
of revenue
|
|
|
(2,652,169
|
)
|
|
|
(2,071,633
|
)
|
|
|
(3,885,915
|
)
|
|
|
-
|
|
|
|
(8,609,717
|
)
|
|
Depreciation
and amortization
|
|
|
(39,255
|
)
|
|
|
(108,258
|
)
|
|
|
(21,539
|
)
|
|
|
(304,665
|
)
|
|
|
(473,717
|
)
|
|
Operating
income (loss)
|
|
|
(137,707
|
)
|
|
|
(236,353
|
)
|
|
|
(1,548,381
|
)
|
|
|
(304,665
|
)
|
|
|
(2,227,106
|
)
|
|
General
and administrative
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(683,404
|
)
|
|
|
(683,404
|
)
|
|
Other
income (expenses)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,405,483
|
)
|
|
|
(1,405,483
|
)
|
|
Federal
& state income taxes
|
|
|
47,946
|
|
|
|
82,293
|
|
|
|
539,112
|
|
|
|
(703,618
|
)
|
|
|
(34,267
|
)
|
|
Net
income (loss)
|
|
$
|
(89,761
|
)
|
|
$
|
(154,060
|
)
|
|
$
|
(1,009,269
|
)
|
|
$
|
(3,097,170
|
)
|
|
$
|
(4,350,260
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine
Months Ended September,30, 2008
|
|
|
|
|
Real
Estate
|
|
|
Golf
|
|
|
Management
|
|
|
Corporate
|
|
|
Total
|
|
|
Revenue
|
|
$
|
5,286,685
|
|
|
$
|
1,683,790
|
|
|
$
|
3,673,309
|
|
|
$
|
-
|
|
|
$
|
10,643,784
|
|
|
Costs
of revenue
|
|
|
(5,122,507
|
)
|
|
|
(2,005,097
|
)
|
|
|
(4,350,911
|
)
|
|
|
-
|
|
|
|
(11,478,515
|
)
|
|
Depreciation
and amortization
|
|
|
(25,479
|
)
|
|
|
(92,141
|
)
|
|
|
(58,991
|
)
|
|
|
(304,930
|
)
|
|
|
(481,541
|
)
|
|
Operating
income (loss)
|
|
|
138,699
|
|
|
|
(413,448
|
)
|
|
|
(736,593
|
)
|
|
|
(304,930
|
)
|
|
|
(1,316,272
|
)
|
|
General
and administrative
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,553,845
|
)
|
|
|
(1,553,845
|
)
|
|
Other
income (expenses)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4,922,329
|
|
|
|
4,922,329
|
|
|
Federal
& state income taxes
|
|
|
(54,474
|
)
|
|
|
162,382
|
|
|
|
289,298
|
|
|
|
(677,214
|
)
|
|
|
(280,008
|
)
|
|
Net
income (loss)
|
|
$
|
84,225
|
|
|
$
|
(251,066
|
)
|
|
$
|
(447,295
|
)
|
|
$
|
2,386,340
|
|
|
$
|
1,772,204
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The company has negotiated an agreement
with D. & G., L.L.C., an Oklahoma limited liability company
(“D&G”) whereby D&G will invest the sum of two million dollars
($2,000,000) in South Padre Island Development LLC (“South Padre”), payable in
installments through March 1, 2010, for which D&G will receive a 20% member
interest in South Padre. Invested funds may be used for any corporate
purpose. Effective date of the acquisition is expected to be October
1, 2009; however, the final documents have not been executed as of the date of
filing these financial statements with Form 10Q. Under the terms of
the proposed Amended and Restated Operating Agreement of South Padre Island
Development, LLC (“Amended Operating Agreement”), D&G will be entitled to
receive priority distributions of available cash flow from South Padre until
they have received an amount equal to their investment, plus a 6% preferred
return on their investment, after which the company will receive the next
distributions until it has received an amount equal to $8,000,000 plus a 6%
return on that agreed equity value. Thereafter, distributions will be
in proportion to the members’ equity interest.
Concurrently
with its purchase of the South Padre member interest, D&G will grant to the
company an option to purchase the 20% member interest at any time after June 1,
2010 and the company will grant to D&G a put to purchase the interest at any
time after June 1, 2011 or, upon the company’s written request, after June 1,
2012. The purchase price under either the put or the option is
defined as the greater of:
|
(a)
|
an
amount equal to the sum of (i) D&G’s Unreturned DG Capital (as defined
in the Amended Operating Agreement) plus (ii) D&G’s Unpaid DG
Preference (as defined in the Amended Operating Agreement);
or
|
|
(b)
|
an
amount equal to the amount D&G would receive if all of the assets of
South Padre were sold on the closing date for their fair market value (as
mutually agreed between D&G and the company), all liabilities of South
Padre were paid in full and the remaining proceeds distributed pursuant to
Section 6.3 of the Amended Operating
Agreement.
|
Landmark
Land Company, Inc.
Notes
to Consolidated Financial Statements
Assuming
no distributions of available cash flow are made before exercise of either the
option or the put, the company’s minimum purchase price for D&G’s 20% member
interest in South Padre is estimated to be as follows:
|
Date
|
|
Price
|
|
|
|
|
|
June
1, 2010
|
|
$2,063,292
|
|
June
1, 2011
|
|
$2,184,958
|
|
June
1, 2012
|
|
$2,306,958
|
Since the
company’s proposed obligation to purchase the South Padre member interest
requires settlement of that obligation by the transfer of assets (i.e., cash),
generally accepted accounting principles in the United States require that the
company account for that obligation as a liability. Accordingly, the
$500,000 received from D&G prior to September 30, 2009 is included on the
Consolidated Balance Sheet at that date as Purchase obligation to others, due
after one year.
At such
time as the relevant agreements are executed by all parties, they will be filed
on appropriate forms with the Securities and Exchange Commission.
10.
Recent Accounting Pronouncements
In August
2009, the FASB issued Accounting Standards Update (ASU) 2009-05,
Measuring Liabilities at Fair
Value
, to clarify how entities should estimate the fair value of
liabilities under Accounting Standards Codification (ASC) 820,
Fair Value Measurements and
Disclosures
. The ASU clarifies that the quoted price for the identical
liability, when traded as an asset in an active market, is also a Level 1
measurement for that liability when no adjustment to the quoted price is
required. In the absence of a Level 1 measurement, an entity must use one or
more of the following valuation techniques to estimate fair value (in a manner
consistent with the principles in ASC 820), which can be classified into two
broad categories: (1) a valuation technique that uses a quoted price (a quoted
price of an identical liability when traded as an asset, or a quoted price of a
similar liability or of a similar liability when traded as an asset) or (2)
another valuation technique consistent with the principles of ASC 820 (a market
approach or an income approach). The new guidance is effective for the first
interim or annual reporting period beginning after August 28,
2009. The company is evaluating the impact the adoption of ASU No.
2009-05 will have on its consolidated financial statements.
Item
2.
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
Overview
The
company, through subsidiaries, owns and manages for others, interests in real
estate and golf oriented real estate developments. After a long
period of relative dormancy, the company acquired its first operating companies
in 2003 and has continued to rebuild its business through acquisitions and
expansion. The company’s current operating results are largely
dependent on real estate sales in its developments in Texas and
Barbados. The general economic recession in the US that began in late
2007 has hit the real estate market particularly hard. The company’s
properties are suffering along with most other real estate developments in the
US and abroad. Sales contracts already in the pipeline at the
end of 2007, particularly in the Apes Hill development in Barbados, generated
profitable sales for the company in 2008. However, new contracts in
2008 and 2009 have been minimal. Although prospective purchaser
traffic has increased in our Texas development over the last few months, most
shoppers are still looking to find bargains at the bottom of the
market. We continue to liquidate existing inventories of lots and
houses at reduced profit margins and to defer any significant additional
development until the market improves.
During
the second half of 2008 and the first three quarters of 2009 the company has
taken various actions to reduce expenses and minimize operating
losses. Recognizing that, historically, personnel costs
have accounted for more than half of the company’s operating costs (excluding
the cost of real estate and merchandise sold), management has reduced the number
of employees by approximately 37% from 132 employees at June 30, 2008 to 83
employees at September 30, 2009. In the second quarter of 2009, the
company grounded its airplane and terminated employment of its
pilots. To further conserve cash, a portion of the salaries of
certain officers is being accrued with actual payment deferred until cash flow
improves. An affiliate of one of the company’s executive officers and
another affiliate of one of the directors loaned the company approximately $1.4
million in working capital funds during the last quarter of 2008 and
the first half of 2009. In addition, the company has
negotiated a transaction whereby an investor will provide $2 million for an
investment in South Padre as discussed in Note 9. Additional comments
on the company’s actions to manage its way through the current recession are
included in the liquidity and capital resources paragraphs below.
The
company’s consolidated statements of operations and cash flows for the nine
months ended September 30, 2009 and 2008 include the operations of the company
and its subsidiaries identified in Note 1 to the Consolidated Financial
Statements. The loss reported in these statements for 2009
reflects the depressed real estate market described above. Year to
year comparisons should be analyzed carefully and historical results should not
be assumed to be indicative of the company’s future operations.
Management’s
additional analysis of the company’s operations during the three and nine month
periods ended September 30, 2009 and 2008 and comments on its current financial
condition are as follows:
Liquidity
and capital resources
The
reduction in real estate sales beginning in the second half of 2008 and through
the first three quarters of 2009 has significantly reduced the company’s cash
flows from operations. In addition, cash flows generated in Barbados
are generally used to repay bank loans or are reinvested in continuing
development of the Apes Hill property and the company’s accumulated profits are
not expected to be available for distribution from Barbados until late in 2010
or sometime in 2011. In response to the reduction in cash flows
generated from operations, the company has taken various actions to reduce
expenses and minimize operating losses and has increased its borrowings, as
further discussed below.
Recognizing
that, historically, personnel costs have accounted for more than half of the
company’s operating costs (excluding the cost of real estate and merchandise
sold), management has reduced the number of employees by approximately 37% from
132 employees at June 30, 2008 to 83 employees at September 30,
2009. Current staffing levels remain adequate to service additional
projects that the company is pursuing. In the second quarter of
2009, the company grounded its airplane and terminated employment of its
pilots. To further conserve cash, a portion of the salaries of
certain officers is being accrued with actual payment deferred until cash flow
improves.
The
company has increased its financing activity including loans from affiliates of
$1.4 million during the fourth quarter of 2008 and the first half of
2009. During the third quarter of 2009, the company also
negotiated for an investor to acquire a member interest in South Padre as
discussed in Note 9, although the final documents have not been executed as of
the date of filing this Form 10Q. In addition, the company has
applied for new lines of credit from banks operating in the Caribbean, and is
exploring additional working capital loans from other sources; however, there is
no guarantee that sufficient additional funding will be received. If
loans are not received, or if our current bank lenders do not continue to renew
existing credits or if affiliates should call their working capital loans, the
company could be required to make further reductions in personnel and to
liquidate real estate or other assets at prices less than would be expected
under normal operating conditions. The Consolidated Financial
Statements do not reflect any adjustments that might result from the outcome of
these uncertainties.
The
company’s Consolidated Balance Sheet at September 30, 2009 reports current
assets totaling $1.4 million and current liabilities totaling $18.3 million for
a $16.9 million excess of current liabilities over current
assets. Approximately $12.4 million of the current liabilities is due
to two Texas banks that have funded the South Padre real estate development for
the last ten years. The banks have recently renewed credit
lines covering the outstanding debt for periods of six months to one
year. Approximately $2.0 million of the current liabilities is owed
to affiliates who have advanced funds for working capital and are not expected
to demand repayment until the company’s liquidity position
improves.
Current assets
total $1.4
million at September 30, 2009 compared to $2.2 million at December 31, 2008,
reflecting, primarily, the collection of receivables and use of most of the cash
collected to pay operating expenses.
Real estate and golf management
contract rights acquired
remained unchanged during the first nine months
of 2009. The only contract in this asset group with unamortized costs
relates to a property in the Hudson Valley of New York state. While
no fees are currently being realized from that contract as government approvals
are pending for the proposed development, the company expects to recover the
remaining unamortized costs from future construction supervision fees and profit
incentive fees.
Real estate
held for either
development or sale totaled $15.4 million at September 30, 2009 compared to
$15.5 million at December 31, 2008. Costs incurred to complete units
under construction at the beginning of 2009 were only slightly less than the
costs of real estate sold during the first three quarters.
Property and equipment
decreased approximately $0.6 million, reflecting depreciation of $0.5
million recorded in the first nine months of 2009 and the sale of one home that
had been held as rental property.
Other assets
are comprised
primarily of
investments in
unconsolidated affiliates
which decreased approximately $0.8 million in
the first three quarters of 2009, reflecting losses recognized in Apes Hill,
Landmark Spain, and Presidential, and
deferred tax assets
which
remained unchanged at $4.4 million as discussed in Note 7.
Liabilities
totaled $23.7
million at September 30, 2009 – a net increase of approximately $2.1 million
from December 31, 2008. The increase results primarily from $1.2
million borrowed from affiliates for working capital, $0.5 million received from
a new investor in South Padre as discussed in Note 9, and continuing deferral of
executive salaries.
The
company has no
off-balance
sheet arrangements
that have or are reasonably likely to have a material
current or future effect on the company’s financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures, or capital resources.
Stockholders’ equity
decreased by approximately $4.5 million in the nine months of 2009,
reflecting primarily, the company’s net loss of $4.4 million and $0.1 million of
dividends declared, but not paid, on preferred stock.
There
were no commitments regarding purchase or sale of the company's stock at
September 30, 2009; however, see Note 4 to the Consolidated Financial Statements
regarding stock options outstanding and Note 9 regarding an obligation to
purchase a member interest in South Padre.
Revenue
Real estate sales
at South
Padre totaled 7 lots and 5 houses during the nine months ended September 30,
2009, generating $1.6 million in revenue, including 2 lots and 1 house sold in
the three months ended September 30, 2009 for total sales of $0.3
million. In the first nine months of 2008, South Padre reported 4 lot
sales and 19 house sales generating $4.5 million in revenue, including 2 lots
and 5 houses closed in the third quarter for total sales of $1.2
million. The decrease in real estate sales apparently reflects
continuing apprehension about the global recession. Although the
stock market has recovered some of its dramatic losses during the last few
months and a few ‘bottom fishers’ bought lots and houses at South Padre this
year, we do not expect any significant recovery of the real estate market until
next year.
Real estate services revenue
is comprised primarily of fees charged to homeowners’ associations for landscape
maintenance services, rents received from tenants in company owned houses that
were converted to rental property in 2008, and commissions and fees earned on
rental pool operations or on third-party real estate sales. Revenue
in the first nine months of 2009 totaled $0.9 million compared to $0.8 million
in the same period of 2008. In prior years, HOA
reimbursement of costs related to the landscape operations were netted against
those costs in real estate operating expenses and revenues and costs related to
the rental pool operations were included in management and consulting
operations. As these operations are now more significant to South
Padre’s total operations, we are reporting the revenue from these real estate
related services separately. 2008 amounts have been reclassified to
conform to the 2009 classifications.
Golf
related revenue,
including food and beverage sold in golf restaurants, totaled $1.9 million
during the nine months ended September 30, 2009. Paid golf rounds
totaled 23,600. In the same period of 2008, golf rounds totaled
23,900 and total revenue was $1.7 million. For the three months ended
September 30, 2009, the company realized $0.6 million in revenue from 5,800
rounds, compared to the same period of 2008 when we realized $0.5 million in
golf revenue from 4,300 rounds played. The small increase in revenue
in 2009 reflects increased food and beverage sales by Lake Presidential Beverage
Company which opened May 1, 2008.
The South
Padre golf course is a public, daily fee course, but is operated primarily as an
amenity for the surrounding real estate development. The company
anticipates phased development of the land surrounding the golf course to meet
future demand in this long-term development property. While the
company anticipates a good long-term real estate market and increases in golf
play as more golfers move into the residential community, the current depressed
real estate sales are evidence that buyer psychology and other factors outside
management’s control often affect golf and real estate operations.
Management and consulting
agreements generated $0.5 million in fee revenue in the three months ended
September 30, 2009 compared to $0.7 million during the same period of
2008. For the first nine months of 2009, fee revenue totaled $1.2
million compared to $2.5 million for the same period in 2008. The
2009 decrease reflects a significant reduction in planning and construction fees
earned in Barbados and in South Padre and in consulting fees recognized in
Spain. The company was also reimbursed for out-of-pocket expenses
related to its management agreements in the amount of $1.1 million and $1.2
million for the nine months ended September 30, 2009 and 2008,
respectively.
Costs
of revenues
Cost of real estate sold,
including land, development, construction, and closing costs, totaled
$0.2 million or 72% of sales in the third quarter of 2009 compared to $0.8
million or 64% of real estate sales in the same quarter of
2008. Costs for the nine months ended September 30, 2009 were $1.1
million or 66% of sales, compared to $3.0 million or 68% of sales in the same
period of 2008. Gross profit margins are generally higher on
lot development than on vertical construction, but differ among various
subdivision lot developments and various house models as well; consequently, the
gross profit margin realized in any reporting period will vary according to the
mix of products sold during the period.
Real estate operating expenses
totaled $0.5 million and $1.6 million respectively in the three-month and
nine-month periods ended September 30, 2009 compared to $0.7 million and $2.1
million in the same period of 2008. The lower costs in 2009 reflect
additional reductions in personnel and in other costs, primarily advertising and
marketing, implemented in response to the continuing depressed real estate
market.
Cost of golf merchandise sold
in the three-month and nine-month periods ending September 30, 2009
totaled $28,000 (64% of sales) and $117,000 (75% of sales) respectively,
compared to $37,000 (66% of sales) and $140,000 (69% of sales) for the same
periods of 2008. The increase in cost percentage of merchandise sold
reflects adjustments for the cost of missing or dated merchandise identified
after a change in golf management in the second quarter of 2009.
Cost of food and beverage
sold
in the three-month and nine-month periods ending September 30, 2009
totaled $115,000 (38% of sales) and $321,000 (39% of sales) respectively,
compared to $97,000 (46% of sales) and $233,000 (44% of sales) in the same
periods of 2008. The increased dollar cost in 2009 and improved cost
percentage reflects results from Lake Presidential Beverage Company that began
operations May 1, 2008.
Golf operating expenses
totaled $0.6 million in the third quarter of 2009 and $1.6 million for the first
nine months of 2009, which totals were approximately the same amounts as were
incurred in the same periods in 2008.
Management and consulting payroll
and related expenses
totaled $0.7 million and $2.8 million respectively
during the three-month and nine-month periods ending September 30, 2009 compared
to $1.0 million and $3.2 million for the same periods in 2008. The
decreased cost reflects termination of several employees in 2009. The
2009 payroll expense includes approximately $0.4 million of salary due to
officers of the company, payment of which is being deferred until cash flow
improves.
Depreciation and amortization
included in the company’s consolidated statement of operations was $0.5 million
in the nine-month periods ended September 30, 2009 and 2008, with the cost
divided approximately equally among the three quarters in each
year.
General,
administrative and other expense
General, administrative and other
expenses
totaled $0.2 million and $0.7 million respectively in the third
quarter and first nine months of 2009 compared to $0.5 million and $1.6 million
in the same periods of 2008. The decrease reflects, primarily,
limited use of the company airplane in the first four months of 2009, at which
time the plane was grounded and the pilots’ employment terminated. In
today’s severely depressed market for private aircraft, the market value of the
plane approximates current book value. In anticipation of additional
real estate opportunities in the Caribbean and improved aircraft market
conditions, the company plans to leave the plane grounded as we evaluate
alternatives, including possible sale.
Other
income and expense
Equity in profit (loss) of
unconsolidated affiliates
reflects the company’s share of the operating
profits or losses of the following unconsolidated affiliates:
|
|
|
|
|
|
Three
Months Ended September 30,
|
|
|
Nine
Months Ended September 30,
|
|
|
|
|
Ownership
|
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
|
Landmark
Developments of Spain, S.L.
|
|
|
50%
|
|
|
$
|
(25,766
|
)
|
|
$
|
(32,784
|
)
|
|
$
|
(56,241
|
)
|
|
$
|
(177,163
|
)
|
|
Apes
Hill Development SRL
|
|
|
33.33%
|
|
|
|
(21,709
|
)
|
|
|
(309,284
|
)
|
|
|
(661,255
|
)
|
|
|
5,517,656
|
|
|
Presidential
Golf Club, LLC
|
|
|
7.45%
|
|
|
|
(2,697
|
)
|
|
|
-
|
|
|
|
(133,489
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
$
|
(50,172
|
)
|
|
$
|
(342,068
|
)
|
|
$
|
(850,985
|
)
|
|
$
|
5,340,493
|
|
The
profits reported by Apes Hill Development SRL in early 2008 resulted from sales
of developed lots to buyers who had signed purchase contracts over the preceding
two-year development period. The global recession has affected real
estate sales in Barbados with few new contracts in 2008 and
2009. Apes Hill has sales contracts totaling approximately US $27.5
million in the pipeline at September 30, 2009; however, the recession has also
caused delays in closing some of these existing contracts.
Interest income
has decreased
to insignificant levels, reflecting the use of cash to pay current operating
costs leaving no excess cash balances invested in overnight funds.
Interest expense
totaled
$212,000 in the third quarter and $555,000 in the first nine months of 2009
compared to $145,000 and $470,000 in the same periods last year. The
increase in 2009 reflects, primarily, increased borrowing from an affiliate to
fund current operations.
Federal
and state income taxes
The
company reported a loss before income taxes of $1.0 million in the third quarter
of 2009 and $4.4 million for the first nine months of the year. The
provision for federal and state income taxes reflects a net provision of $34,000
for the nine months ended September 30, 2009 and is comprised of current state
taxes. Deferred federal and state tax benefits generated by the 2009 loss were
offset by an increase in the deferred tax valuation allowance as discussed in
Note 7 to the financial statements. In 2008 the company realized
income before taxes of $2.1 million in the first nine months of the year and
provided for federal and state income taxes in the amount of $0.3
million.
Critical
accounting estimates
Future
realization of the company’s significant deferred tax asset is dependent on its
ability to generate taxable income in future years. The company has
established a valuation allowance to reduce the carrying value of the asset to
an amount likely to be realized. While estimates of future income are
always uncertain, the current economic recession and 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, the timing of any economic
recovery, whether the new investments are profitable and whether or when those
profits are taxable in the U.S. Any significant change in the various
factors affecting the company’s expectations of future taxable earnings could
require a change in the valuation allowance. Any change in the valuation
allowance is reflected in the company’s operating statement for the period such
change is recognized.
Item
3.
Quantitative
and Qualitative Disclosures About Market Risk
N/A
Item
4.
Controls
and Procedures
The
company maintains disclosure controls and procedures designed to ensure that
information required to be disclosed in reports filed under the Securities
Exchange Act of 1934 (“Exchange Act”) is recorded, processed, summarized and
reported within the specified time periods. The company’s Chief
Executive Officer and its Chief Financial Officer (collectively, the “Certifying
Officers”) are responsible for maintaining disclosure controls for the
company. The controls and procedures established by the company are
designed to provide reasonable assurance that information required to be
disclosed by the issuer in the reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the Commission’s rules and forms.
As of the
end of the period covered by this report, the Certifying Officers evaluated the
effectiveness of the company’s disclosure controls and
procedures. Based on the evaluation, the Certifying Officers
concluded that as of September 30, 2009, the company’s disclosure controls and
procedures were effective to provide reasonable assurance that information
required to be disclosed by us in the reports that we file or submit under the
Exchange Act is recorded, processed, summarized and reported, within the time
periods specified in the applicable rules and forms, and that it is accumulated
and communicated to our management, including the Certifying Officers, as
appropriate to allow timely decisions regarding required
disclosure.
The
Certifying Officers have also concluded that there was no change in the
company’s internal controls over financial reporting identified in connection
with the evaluation that occurred during the company’s 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.
Items 1A through 5
of this report on Form 10-Q are not
applicable.
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
|
|
November
13, 2009
|
|
LANDMARK
LAND COMPANY, INC.
|
|
|
|
|
|
|
|
/s/ Joe V. Olree
|
|
Joe
V. Olree
|
|
Senior
Vice President and Chief Financial Officer
|
|
November
13, 2009
|
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