SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
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(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ending March 31, 2001
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OR
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934.
For the transition period from ______ to _____
Commission file number 1-4719
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THE DELTONA CORPORATION
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(Exact name of registrant as specified in its charter)
DELAWARE 59-0997584
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(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
8014 SW 135 STREET ROAD, OCALA, FLORIDA 34473
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(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (352)307-8100
-----------------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes _X_ No ___
Indicate the number of shares outstanding of the issuer's classes of common
stock, as of the latest practicable date: 13,544,277 shares of common stock, $1
par value, excluding treasury stock, as of March 31, 2001.
PART I- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
THE DELTONA CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS
MARCH 31, 2001 AND DECEMBER 31, 2000
($000 Omitted)
March 31, December 31,
2001 2000
--------- ------------
ASSETS
------
Cash and cash equivalents, including escrow deposits
and restricted cash of $514 in 2001 and $587 in 2000... $ 551 $ 548
--------- ---------
Contracts receivable for land sales - net .............. 1,246 1,554
--------- ---------
Mortgages and other receivables - net .................. 82 140
--------- ---------
Inventories (b):
Land and land improvements ............................ 8,325 8,375
Homes under construction .............................. 1,863 1,361
--------- ---------
Total inventories ............................... 10,188 9,736
--------- ---------
Property, plant, and equipment at cost - net ........... 439 455
Prepaid expenses and other ............................. 1,183 1,403
--------- ---------
Total ........................................... $ 13,785 $ 13,968
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
-------------------------------------------------
Mortgages and similar debt(c):
Mortgage notes payable ................................ $ 5,100 $ 5,400
Other loans ........................................... 6,595 5,572
--------- ---------
Total mortgages and similar debt .................... 11,695 10,972
Accounts payable, accrued expenses,
customers' deposits ................................... 6,185 6,490
Deferred revenue ....................................... 4,626 5,345
--------- ---------
Total liabilities ...................................... 22,506 22,807
--------- ---------
Commitments and contingencies (d):
Stockholders' equity (deficiency):
Common stock, $1 par value - authorized
15,000,000 shares; outstanding: 13,544,277 shares
(excluding 12,228 shares held in treasury ............ 13,544 13,544
Capital surplus ....................................... 52,327 52,270
Accumulated deficit ................................... (74,592) (74,653)
--------- ---------
Total stockholders' (deficiency) ................ (8,721) (8,839)
--------- ---------
Total .................................... $ 13,785 $ 13,968
========= =========
See accompanying notes.
2
THE DELTONA CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS
FOR THE PERIODS INDICATED
($000 Omitted Except Per Share Amounts)
Three Months Ended
---------------------------
March 31, March 31,
2001 2000
--------- ---------
Revenues (a):
Net land sales......................................... $ 1,894 $ 1,168
House and apartment sales.............................. 981 593
Recognized improvement revenue /
prior period sales.................................... 29 49
Gain on Recovery of Bad Debt........................... 178 0
Interest income........................................ 174 85
Other revenues......................................... 151 192
--------- ---------
Total.............................................. 3,407 2,087
--------- ---------
Costs and expenses (a):
Cost of sales and improvements......................... 1,333 882
Selling, general and administrative
and other expenses.................................... 1,737 1,353
Interest expense (c)(e)................................ 276 254
--------- ---------
Total.............................................. 3,346 2,489
--------- ----------
Net Income (Loss)....................................... $ 61 $ (402)
========= =========
Net Income (Loss) per common share...................... $ .01 $ (.03)
========= =========
Number of common and common equivalent shares........... 13,544,277 13,544,277
========== ==========
See accompanying notes.
3
THE DELTONA CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS
FOR THE THREE MONTHS ENDED
MARCH 31, 2001 AND MARCH 31, 2000
($000 Omitted)
Three Months Ended
---------------------------
March 31, March 31,
2001 2000
--------- ---------
Cash flows from operating activities.................... $ (1,783) $ (1,705)
--------- ---------
Cash flows from investing activities.................... 0 0
--------- ---------
Cash flows from financing activities:
New borrowings........................................ 1,750 1,708
--------- ---------
Net increase (decrease) in cash and cash equivalents
(including escrow deposits and restricted cash)........ (33) 3
Cash and cash equivalents beginning of period........... 680 548
---------- ---------
Cash and cash equivalents end of period................. $ 647 $ 551
=========== =========
See accompanying notes.
4
THE DELTONA CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS
FOR THE THREE MONTHS ENDED
MARCH 31, 2001 AND MARCH 31, 2000
($000 Omitted)
Three Months Ended
---------------------------
March 31, March 31,
2001 2000
--------- ---------
Reconciliation of net income (loss) to net cash
provided by (used in) operating activities:
Net income (loss)..................................... $ 61 $ (402)
--------- ---------
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization......................... 16 12
Provision for estimated uncollectible sales-net....... 670 306
Contract valuation discount, net of amortization...... (79) 38
Imputed interest on debt with related party........... 56 110
Net change in assets and liabilities.................. (2,507) (1,769)
--------- ---------
Total adjustments................................ $ (1,844) $ (1,303)
--------- ---------
Net cash provided by (used in) operating activities... $ (1,783) $ (1,705)
========= =========
Supplemental disclosure of non cash investing
and financing activities:
Reduction of debt as a result of the conveyance
of contracts receivable.......................... $ 1,027 $ 784
========= =========
See accompanying notes.
5
THE DELTONA CORPORATION AND SUBSIDIARIES
----------------------------------------
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------
MARCH 31, 2001
--------------
THE INFORMATION PRESENTED HEREIN AS OF MARCH 31, 2001 FOR THE THREE MONTHS ENDED
MARCH 31, 2001 AND 2000 IS UNAUDITED.
(a) BASIS OF PRESENTATION
The condensed unaudited financial statements of the Company have been
prepared pursuant to the rules and regulations of the Securities and
Exchange Commission (the "Commission"). Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to Commission rules and regulations. The
information furnished reflects, in the opinion of management, all
adjustments (consisting only of normal recurring adjustments) necessary for
a fair statement of the results for the interim periods presented.
Operating results for the three months ended March 31, 2001 are not
necessarily indicative of the results that may be expected for the year
ending December 31, 2001. These condensed consolidated financial statements
should be read in conjunction with the financial statements and the notes
thereto included in the Company's latest Annual Report on Form 10-K.
Certain amounts have been reclassified for comparative purposes.
The accompanying financial statements of The Deltona Corporation and
subsidiaries ("The Company") have been prepared on a going concern basis,
which contemplates the realization of assets and satisfaction of
liabilities in the normal course of business. The Company has incurred
losses from operations resulting in a stockholders' deficiency as of March
31, 2001. The Company has been dependant on its ability to obtain financing
from related companies to meet its cash requirements. There can be no
guarantee that the Company will be able to obtain sufficient financing in
the future or that related parties will continue to make loans to the
Company. The consolidated financial statements do not include any
adjustments relating to the recoverability of asset amounts or the amount
of liabilities should the Company be unable to continue as a going concern.
(b) INVENTORIES
Information with respect to the classification of inventory of land and
improvements including land held for sale or transfer is as follows (in
thousands):
Land and Improvements
---------------------
March 31, December 31,
2001 2000
--------- ------------
Unimproved land.................... $ 420 $ 420
Land in various stages of
development...................... 2,778 2,316
Fully improved land................ 5,127 5,639
-------- --------
Total....................... $ 8,325 $ 8,375
======== ========
(c) MORTGAGES AND SIMILAR DEBT
The following table presents information with respect to mortgages and
similar debt (in thousands):
March 31, December 31,
2001 2000
--------- ------------
Mortgage Notes Payable ............ $ 5,100 $ 5,400
Other Loans........................ 6,595 5,572
--------- ---------
Total mortgages and
similar debt.............. $ 11,695 $ 10,972
========= =========
6
Included in Mortgage Notes Payable is the Yasawa loan ($5,100,000 at March
31, 2001); included in Other Loans is the Swan loan ($6,595,000 as of March
31, 2001).
Indebtedness under various purchase money mortgages and loan agreements is
collateralized by substantially all of the Company's assets, including
stock of certain wholly-owned subsidiaries. The Company's outstanding debt
to Yasawa is secured by a first lien on the Company's receivables and a
mortgage on all of the Company's property; and the Company's outstanding
debt to Swan is secured by a second lien on the Company's receivables.
As of December 31, 1999, the Company had satisfied its principal debt
obligation to Scafholding. The Company's outstanding debt to Yasawa as of
March 31, 2001 was $5,100,000. The terms of repayment of the restructured
Yasawa loan provide for monthly payments of principal in the amount of
$100,000 payable monthly in cash or with contracts receivable at 100% of
face value, plus interest payable monthly on the declining balance at the
rate, effective January 1, 1999, of 6% per annum in cash or with contracts
receivable at 65% of face value. The interest rate was again changed
effective January 1, 2001 to the prime rate of 9.5%, to be adjusted
semi-annually thereafter, to equal the prime rate then in effect. Yasawa
and Scafholding did not require the Company to make interest payments for
the period September 1, 1998 to March 31, 2001. As of March 31, 2001, the
total amount of interest accrued is approximately $1,181,000.
From October 9, 1998 through the present, Swan continued to loan the
Company funds to meet its working capital requirements. The Company's
outstanding debt to Swan, which is secured by a second lien on the
Company's receivables, was $6,595,000 as of March 31, 2001. The Company
signed a promissory note to Swan in March 1999 which provides that funds
advanced by Swan will be paid back by the Company monthly in contracts
receivables at 90% of face value, with recourse. There is no interest for
the first six months after an advance of money is received from Swan by the
Company; thereafter the interest was 6% per annum on the outstanding
balance of the advance. The interest rate was changed effective January 1,
2001 to the prime rate of 9.5%, to be adjusted semi-annually thereafter, to
equal the prime rate then in effect. Each time an advance is made, a
supplemental note is signed. The amount of each monthly payment will vary
and will be dependent upon the amount of contracts receivable in the
Company's portfolio, excluding contracts receivable held as collateral for
prior receivable sales. Pursuant to the terms of the promissory note, the
Company is required to transfer to Swan monthly as debt repayment all
current contracts receivable in the Company's portfolio in excess of the
aggregate sum of $500,000. Funds advanced by Swan were used by the Company
to meet the Company's working capital requirements. As of March 31, 2001,
the total amount of interest accrued is approximately $367,000.
During the period of time which the interest rate was at 6%, the Company
recorded interest expense on all outstanding debt balances to Yasawa and
Swan at 8%, the Company's incremental borrowing rate. Effective January 1,
2001, the Company's incremental borrowing rate is adjusted semi-annually to
equal the prime rate. The difference between interest calculated at the
Company's incremental borrowing rate and the amount accrued under the terms
of the respective notes was recorded as capital contribution increase to
capital surplus.
(d) COMMITMENTS AND CONTINGENCIES
Homesite sales contracts provide for the return of all monies paid in
(including paid-in interest) should the Company be unable to meet its
contractual obligations after the use of reasonable diligence. If a refund
is made, the Company will recover the related homesite and any improvement
thereto.
(e) CAPITALIZED INTEREST
The Company capitalizes interest cost incurred during a project's
construction period. Interest expense was $276,000 and $254,000 for the
three months ended March 31, 2001 and March 31, 2000, respectively.
Interest in the amount of $99,000 was capitalized for the three months
ended March 31, 2001. No interest was capitalized for the three months
ending March 31, 2000.
7
(f) EARNINGS OR LOSS PER SHARE
Basic earnings (loss) per common and common equivalent share were computed
by dividing net income (loss) by the weighted average number of shares of
Common Stock and common stock equivalents outstanding during each period.
(g) RELATED PARTY TRANSACTION
In January 2000, the Company purchased 16 lots and homes under construction
from Scafholding for approximately $862,000. This amount represents
Scafholding's lot cost and payments to date to the home builder. This
transaction was 100% financed by Swan under its existing note payable
arrangement.
8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
---------------------
For the three months ended March 31, 2001 and March 31, 2000.
Revenues
Total revenues were $3,407,000 for the first three months of 2001 compared to
$2,087,000 for the comparable 2000 period.
Gross land sales were $2,515,000 for the first three months of 2001 versus
$1,532,000 for the comparable 2000 period. Net land sales (gross land sales less
estimated uncollectible installment sales and contract valuation discount)
increased to $1,894,000 the first three months of 2001 from $1,168,000 for the
first three months of 2000. The increase in sales reflects higher sales by the
Company's independent dealers.
Housing revenues were $981,000 for the first three months of 2001 versus
$593,000 for the comparable 2000 period. Revenues are not recognized from
housing sales until the completion of construction and passage of title. Housing
revenues increased as of result of higher sales by the Company's independent
dealer network. The backlog of houses under contract was $2,389,000 and $981,000
as of March 31, 2001 and March 31, 2000, respectively.
The following table reflects the Company's real estate product mix for the
periods indicated (in thousands):
Three Months Ended
---------------------------
March 31, March 31,
2001 2000
--------- ---------
Gross Land Sales:
Retail Sales* $ 2,515 $ 1,532
Housing Sales: 981 593
--------- ---------
Total Real Estate $ 3,496 $ 2,125
========= =========
---------------------
* New retail land sales contracts entered into, including deposit sales on
which the Company has received less than 20% of the sales price, net of
cancellations, for the three months ended March 31, 2001 and March 31, 2000
were $2,395,000 and $1,499,000, respectively. The Company had a backlog of
approximately $3,653,000 in unrecognized sales as of March 31, 2001. Such
contracts are not included in retail land sales until the applicable
rescission period has expired and the Company has received payments
totaling 20% of the contract sales price.
Improvement revenues result from recognition of revenues deferred from prior
period sales. Recognition occurs as development work proceeds on the previously
sold property or customers are exchanged to a developed lot. Improvement
revenues totaled $29,000 for the first three months of 2001 versus $49,000 for
the comparable 2000 period.
Interest income was $174,000 for the first three months of 2001 versus $85,000
for the comparable period in 2000. The increase is the result of a favorable
adjustment to the valuation allowance as a result of the cancellation of a large
contract receivable in the first quarter of 2001.
Other revenues were $151,000 for the three months of 2001 versus $192,000 for
the comparable period in 2000. Other revenues are principally generated by the
Company's title insurance and real estate brokerage subsidiaries.
Costs and Expenses
------------------
Costs and expenses were $3,346,000 for the first three months of 2001 versus
$2,489,000 for the comparable period in 2000.
Cost of sales were $1,333,000 for the first three months of 2001, versus
$882,000 for the comparable period in 2000.
9
Commissions, advertising and other selling expenses totaled $1,211,000 for the
three months of 2001 versus $845,000 for the comparable period in 2000. Higher
retail land sales resulted in increased commission expense. Other selling
expenses increased to $276,000 for the first three months of 2001 versus
$258,000 for the comparable period in 2000 as a result of increased jobsite
expenses. Advertising and promotional expenses decreased to $88,000 for the
first three months of 2001 versus $120,000 for the comparable period in 2000.
General and administrative expenses were $381,000 for the first three months of
2001 versus $363,000 for the comparable period in 2000. General and
administrative expenses increased primarily due to increased overhead expenses.
Real estate tax expenses were $144,000 for the first three months of 2000 and
2001.
Interest expense was $276,000 for the first three months of 2001 versus $254,000
for the comparable period in 2000. The increase in interest expense is a result
of higher debt balances accruing interest at a higher interest rate.
Net Income (Loss)
-----------------
The Company reported net income of $61,000 for the first three months of 2001
versus a net loss of $(402,000) for the comparable period in 2000.
Regulatory Developments which may affect Future Operations
----------------------------------------------------------
In Florida, as in many growth areas, local governments have sought to limit or
control population growth in their communities through restrictive zoning,
density reduction, the imposition of impact fees and more stringent development
requirements. Although the Company has taken such factors into consideration in
its master plans by agreeing, for example, to make improvements, construct
public facilities and dedicate certain property for public use, the increased
regulation has lengthened the development process and added to development
costs.
The implementation of the Florida Growth Management Act of 1985 (the "Act")
precludes the issuance of development orders or permits if public facilities
such as transportation, water and sewer services will not be available
concurrent with development. Development orders have been issued for, and
development has commenced in, the Company's existing communities (with
development being completed in certain of these communities). Thus, the
Company's communities are less likely to be affected by the new growth
management policies than future communities. Any future communities developed by
the Company will be strongly impacted by new growth management policies. Since
the Act and its implications are consistently being re- examined by the State,
together with local governments and various state and local governmental
agencies, the Company cannot further predict the timing or the effect of new
growth management policies, but anticipates that such policies may increase the
Company's permitting and development costs.
The Company's real estate business is subject to regulation by various local,
state and federal agencies. The communities are increasingly subject to
substantial regulation as they are planned, designed and constructed, the nature
of such regulation extending to improvements, zoning, building, environmental,
health and related matters. Although the Company has been able to operate within
the regulatory environment in the past, there can be no assurance that such
regulations could not be made more restrictive and thereby adversely affect the
Company's operations.
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
MORTGAGES AND SIMILAR DEBT
From June 19, 1992 through March 1999, the Company had entered into loan
agreements with Selex International B.V., a Netherlands corporation ("Selex"),
Yasawa Holdings, N.V., a Netherlands Antilles Corporation ("Yasawa"), Swan
Development Corporation ("Swan") and related parties, including Scafholding B.V.
("Scafholding"). Since December, 1992, the Company has been dependent on loans
and advances from Selex, Yasawa, Swan and their affiliates in order to meet its
working capital requirements.
10
As of December 31, 1999, the Company had satisfied its principal debt obligation
to Scafholding. The Company's outstanding debt to Yasawa as of March 31, 2001
was $5,100,000. The terms of repayment of the restructured Yasawa loan provide
for monthly payments of principal in the amount of $100,000 payable monthly in
cash or with contracts receivable at 100% of face value, plus interest payable
monthly on the declining balance at the rate, effective January 1, 1999, of 6%
per annum in cash or with contracts receivable at 65% of face value. The
interest rate was again changed effective January 1, 2001 to the prime rate of
9.5%, to be adjusted semi-annually thereafter, to equal the prime rate then in
effect. Yasawa and Scafholding did not require the Company to make interest
payments for the period September 1, 1998 to March 31, 2001. As of March 31,
2001, the total amount of interest accrued is approximately $1,181,000.
From October 9, 1998 through the present, Swan continued to loan the Company
funds to meet its working capital requirements. The Company's outstanding debt
to Swan, which is secured by a second lien on the Company's receivables, was
$6,595,000 as of March 31, 2001. The Company signed a promissory note to Swan in
March 1999 which provides that funds advanced by Swan will be paid back by the
Company monthly in contracts receivables at 90% of face value, with recourse.
There is no interest for the first six months after an advance of money is
received from Swan by the Company; thereafter the interest was 6% per annum on
the outstanding balance of the advance. The interest rate was changed effective
January 1, 2001 to the prime rate of 9.5%, to be adjusted semi-annually
thereafter, to equal the prime rate then in effect. Each time an advance is
made, a supplemental note is signed. The amount of each monthly payment will
vary and will be dependent upon the amount of contracts receivable in the
Company's portfolio, excluding contracts receivable held as collateral for prior
receivable sales. Pursuant to the terms of the promissory note, the Company is
required to transfer to Swan monthly as debt repayment all current contracts
receivable in the Company's portfolio in excess of the aggregate sum of
$500,000. Funds advanced by Swan were used by the Company to meet the Company's
working capital requirements. As of March 31, 2001, the total amount of interest
accrued is approximately $367,000.
The following table presents information with respect to mortgages and similar
debt (in thousands):
March 31, December 31,
2001 2000
--------- ------------
Mortgage Notes Payable ................ $ 5,100 $ 5,400
Other Loans............................ 6,595 5,572
--------- ---------
Total mortgages and similar debt.... $ 11,695 $ 10,972
========= =========
---------------
Included in Mortgage Notes Payable is the Yasawa loan ($5,100,000 at March
31, 2001); included in Other Loans is the Swan loan ($6,595,000 as of March
31, 2001).
CONTRACTS AND MORTGAGES RECEIVABLE SALES
In 1990 and 1992, the Company sold contracts and mortgages receivable to
unrelated third parties. These transactions, among other things, require that
the Company replace or repurchase any receivable that becomes 90 days delinquent
upon the request of the purchaser. Such requirement can be satisfied from
contracts in which the purchaser holds a security interest (approximately
$1,361,000 as of March 31, 2001). The Company has fully reserved for the
estimated future cancellations of these contracts based on the Company's
historical experience for receivables the Company services and believes these
reserves to be adequate. The Company did not replace any delinquent receivables
in 2000 or 2001. As of March 31, 2001 and December 31, 2000, $1,206,000 and
$1,210,000 in receivables were delinquent, respectively.
Since 1997, the Company sold contracts and mortgages receivable to related third
parties, Scafholding and Swan. These transactions, among other things, require
that the Company replace any receivable that becomes eligible to be cancelled.
Such requirement is satisfied monthly from contracts in the Company's receivable
portfolio not otherwise secured to unrelated third parties. The Company has
fully reserved for the estimated future cancellations of these contracts based
on the Company's historical experience for receivables the Company services and
believes these reserves to be adequate.
The Company was the guarantor of approximately $16,712,000 of contracts
receivable sold or transferred as of March 31, 2001, for the transactions
described above. There are no funds on deposit with purchasers of the
receivables as security to assure collectibility as of such date. A provision
has been established for the Company's obligation under the recourse provisions
of
11
which approximately $2,946,000 remains at March 31, 2001. The Company has been
in compliance with all receivable transactions since the consummation of
receivable sales.
In the future, if the Company elects to do so, Yasawa and Scafholding have
agreed to purchase contracts receivable at 65% of face value, with recourse. The
Company has an agreement with Swan whereby Swan will loan the Company funds to
be repaid with contracts receivable at 90% of face value, with recourse.
ACQUISITION OF HOMES UNDER CONSTRUCTION
In January 2000, the Company purchased 16 lots and homes under construction from
Scafholding for approximately $862,000. This amount represents Scafholding's lot
cost and payments to date to the home builder. This transaction was 100%
financed by Swan under its existing note payable arrangement.
LIQUIDITY
Retail land sales have traditionally produced negative cash flow through the
point of sale as a result of a regulatory requirement to sell fully developed
lots and the additional requirement to pay marketing and selling expenses prior
to or shortly after the point of sale. In an effort to offset the negative cash
flow effects of installment land sales, the Company is directing a greater
portion of its marketing efforts to the sale of lots with homes and is now
offering lots for sale in compulsory building areas where a lot purchaser must
complete payments for the lot and construct a home within a limited period of
time.
The Company has been dependent on its ability to sell or otherwise finance its
contracts receivable and/or secure other financing to meet its cash
requirements. Since 1992, the Company has been largely dependent on Yasawa,
Scafholding and Swan and related parties for the financing of its operations.
Although Scafholding has purchased contracts receivables at the rate of 65% of
face value, with recourse, and Swan has loaned the Company additional funds to
be paid back with contracts receivable at the rate of 90% of face value, with
recourse, there can be no guarantee that the Company will be able to generate
sufficient receivables to obtain sufficient financing in the future or that
Yasawa, Scafholding, Swan and other related parties will continue to make loans
to the Company.
12
PART II - OTHER INFORMATION
===========================
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
None.
(b) Reports on Form 8-K
None.
SIGNATURE
---------
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.
THE DELTONA CORPORATION
Date: May 14, 2001 By: /s/John Battle
------------ -------------------------
John Battle
Treasurer
(Principal Financial Officer)
13