10-Q 1 a2050170z10-q.txt FORM 10-Q U. S. Securities and Exchange Commission Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2001 -------------- [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ------------- ------------- Commission File No. 0-25127 -------- PRESS REALTY ADVISORS CORPORATION -------------------------------------------------------------------------------- (Exact name of Small Business Issuer in its Charter) NEVADA 95-4592066 ------ ---------- (State or Other Jurisdiction of (I.R.S. Employer I.D. No.) incorporation or organization) 1939 South 300 West, Suite 103 Salt Lake City, Utah 84115 -------------------------------------------------------------------------------- (Address of Principal Executive Offices) Issuer's Telephone Number: (801) 994-8474 Not applicable. (Former name, changed since last report) Check whether the Issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the Company was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. (1) Yes No X (2) Yes X No --- --- --- --- (APPLICABLE ONLY TO CORPORATE ISSUERS) State the number of shares outstanding of each of the Issuer's classes of common equity, as of the latest practicable date: As of March 31, 2001, the Company had 24,276,000 shares of its $.001 par value Common Stock outstanding. Transitional Small Business Issuer Format Yes No X --- --- PRESS REALTY ADVISORS CORPORATION TABLE OF CONTENTS

PRESS REALTY ADVISORS CORPORATION FINANCIAL STATEMENTS MARCH 31, 2001 AND JUNE 30, 2000 1 PRESS REALTY ADVISORS CORPORATION Balance Sheets ASSETS

The accompanying notes are an integral part of these financial statements. 2 PRESS REALTY ADVISORS CORPORATION Balance Sheets (Continued) LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

The accompanying notes are an integral part of these financial statements. 3 PRESS REALTY ADVISORS CORPORATION Statements of Operations (Unaudited)

The accompanying notes are an integral part of these financial statements. 4 PRESS REALTY ADVISORS CORPORATION Statements of Stockholders' Equity (Deficit)

The accompanying notes are an integral part of these financial statements. 5 PRESS REALTY ADVISORS CORPORATION Statements of Cash Flows (Unaudited)

The accompanying notes are an integral part of these financial statements. 7 PRESS REALTY ADVISORS CORPORATION Statements of Cash Flows (Continued) (Unaudited)

The accompanying notes are an integral part of these financial statements. 8 PRESS REALTY ADVISORS CORPORATION Notes to the Financial Statements March 31, 2001 and 2000 NOTE 1 - ORGANIZATION Press Realty Advisors Corporation, (the "Company") was incorporated under the laws of the State of Nevada, under the name Tercero Corporation, on November 6, 1995. The Company is authorized to do any legal business activity as controlled by Nevada law. The Company originally elected the fiscal year ended on September 30, but in fiscal year 1999 elected to adopt a June 30 year end. The Company is engaged in the business of acquiring, developing and managing high potential real estate properties. As this process has not yet produced a reliable, long- term source of revenues, the Company intends to seek after additional capital and to form financial partners to supply the needed capital. On July 1, 1999, the Company (then under the name of Tercero Corporation) consummated an Agreement and Plan of Reorganization whereby the Company acquired Press Realty Advisors, LLC ("Press") in exchange for 19,200,000 restricted shares of the Company's common stock. Press was originally organized under the laws of the state of Utah on December 16, 1998. The Company then changed its name to Press Realty Advisors Corporation. Immediately prior to the Agreement and Plan of Reorganization, the Company had 19,200,000 shares of common stock issued and outstanding. The acquisition was accounted for as a recapitalization of Press because subsequent to the acquisition, the shareholders of Press controlled the surviving entity. Therefore, Press is treated as the acquiring entity. There was no adjustment to the carrying value of the assets or liabilities of Press in the exchange. The Company is appropriately classified as the acquiring entity for legal purposes, whereas Press is the surviving entity for accounting purposes. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Company uses the accrual basis of accounting for financial reporting, in accordance with generally accepted accounting principles. a. Use of Estimates In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting period. Actual results could differ form these estimates. b. Revenue Recognition The Company is engaged in the business of acquiring, developing and managing high potential real estate properties. The Company recognizes revenue on the sale of these properties only when 100% of its obligations pertaining to the specific properties have been fulfilled, and the related contracts are satisfied in full. 9 PRESS REALTY ADVISORS CORPORATION Notes to the Financial Statements March 31, 2001 and 2000 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) c. Statements of Cash Flows The Company prepares its statement of cash flows using the indirect method as defined under Financial Accounting Standards Board Statement No. 95. For purposes of the statements of cash flows, the Company considers all highly liquid investments with a maturity of three months or less to be cash equivalents. d. Income Taxes The Company accounts for income taxes in accordance with Financial Accounting Standards Board Statement No. 109. As of June 30, 2000, the Company has a net operating loss carryforward of approximately $570,000 to reduce future taxable income. To the extent not utilized, the NOL carryforward will begin to expire in fiscal year 2020. The future tax benefit of the NOL has been offset by a valuation allowance in full. e. Basic Earnings (Loss) Per Share Basic earnings (loss) per share has been calculated based on the weighted average number of shares of common stock outstanding during the period.

NOTE 3 - GOING CONCERN The Company's financial statements are prepared using generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company has not yet developed a consistent, reliable source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern. It is the intent of the Company to continue to seek additional funding opportunities and financial arrangements in order to continue its real estate development projects. 10 PRESS REALTY ADVISORS CORPORATION Notes to the Financial Statements March 31, 2001 and 2000 NOTE 4 - COMMON STOCK The Company amended its Articles of Incorporation in 1996 to increase the authorized number of shares to 50,000,000. NOTE 5 - STOCK SUBSCRIBED/RECEIVABLE On October 25, 1999, the Company entered into an agreement with a related party under which the Company was to receive $75,000 funding in exchange for 450,000 restricted shares of the Company's common stock. As of June 30, 2000, the Company had received the entire $75,000 as a part of the agreement, but had not yet issued any shares of its common stock under this arrangement. On July 7, 2000, the Company received $10,000 funding in exchange for 62,500 restricted shares of common stock. As of March 31, 2001, the Company had not issued these shares of common stock. On November 13, 2000, the Company entered into an agreement whereby the Company would receive $1,000,000 plus 8% interest payable to the Company at $33,215 per month. As funds are received, common stock will be issued at a rate of one share for every $0.20 received. Upon receiving the entire $1,000,000 (plus interest), the Company will issue a total of 5,000,000 shares. As of March 31, 2001, $172,013 had been received under the promissory note, however, none of the shares of stock had been issued. NOTE 6 - RELATED PARTY TRANSACTIONS At June 30, 2000 and March 31, 2001, the Company had four notes payable to related parties totaling $94,382 and $53,726, respectively. None of the notes have formal payment structures or note documents. Due to the lack of specific terms, the entire balance of each note is classified as current. NOTE 7 - NOTES PAYABLE Notes payable consisted of the following:

11 PRESS REALTY ADVISORS CORPORATION Notes to the Financial Statements December 31, 2000 and 2000 NOTE 7 - NOTES PAYABLE (Continued)

12 PRESS REALTY ADVISORS CORPORATION Notes to the Financial Statements March 31, 2001 and 2000 NOTE 8 - LAND Land assets consisted of the following:

NOTE 9 - COMMITMENTS AND CONTINGENCIES On June 28, 2000, the Company sold a 50% interest in one of its development properties for $1,116,000. As a part of this agreement, the buyer agreed to assume 50% of the construction loan pertaining to the development of this property. The construction loan carries a maximum balance of $1,375,000. The Company is responsible for the remaining 50% (up to $687,500) of the construction loan, and any additional costs required to complete the development of the property. The Company recognized $428,500 in deferred revenue as a result of this transaction. At the end of the period, the Company was negotiating an agreement with another entity to obtain financing under a promissory note. The agreement would require the other entity to loan funds to the Company over the next five years and making a balloon payment at the end of the five years. The interest on the note will be repaid by the other entity receiving 45% of the "profit" realized by the Company on the development of certain real property. The other entity has already advanced funds to the Company and the Company is accounting for the transactions as if the agreement had been finalized. 13 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. RESULTS OF OPERATIONS The Company currently holds interests in the following properties: 1. A 68% interest in a 51,200 square foot building currently under construction for use as office or warehouse space, located at 1490 North 2200 West, Salt Lake City, Utah. The Company will move its corporate offices to this location upon its completion. The Salt Lake office of NAI Commercial ("NAI") is marketing the property for the Company. NAI is an active and successful participant in these markets in the Salt Lake Valley. When fully leased, this property is expected to generate a net operating income of approximately $337,000 per year. 2. 4.445 acres of land located directly east of the property described above. This parcel fronts a 330 foot stretch of I-215, a major freeway running through the Salt Lake Valley. This property was appraised in September 1999 at $817,000.00, or approximately $4.22 per square foot. The Company's cost for the property was approximately $223,000. The Company intends to build a structure on this parcel that is similar to the building currently under construction at the location described in the paragraph above. This building will have approximately 59,870 square feet and when fully leased should generate a net operating income of $364,370 per year. The Company intends to begin development on the site by the fall of 2001. 3. A parcel of property consisting of 28.65 acres, which is located at 1700 North 2200 West, Salt Lake City, Utah. The property borders the acres noted above. The Company intends to build two additional office/warehouse buildings on five acres of this property. The amount of lease space for the two buildings should be approximately 91,000 square feet. These buildings when fully leased could generate a net operating income of $675,172 per year. The Company intends to create a master plan for the remaining 23 acres and either sell the property or hold the land for future development. The Company is also actively pursuing "build to suit" opportunities which it may include in the total development of the above described acreage. 4. 1.82 acres of land located at 3588 South 7200 West, Salt Lake City, Utah, purchased for $90,000. An appraisal of the property dated December 29, 1998 placed the value of this parcel at $370,000, which is equivalent to $4.72 per square foot. The Company intends to find a "build to suit" retail client for this parcel. In addition to the properties discussed above, the Company is scheduled to close on a parcel of ground located in North Ogden, Utah, within the next three months. The parcel is a pad of ground, which is a part of a larger fully developed grocery-retail development. The Company has been able to purchase the improved pad for $293,500 and is selling a portion of the parcel to another developer for $170,000. Through negotiation with the Redevelopment Agency of North Ogden City, the Company was able negotiate a $70,000 credit from the city's RDA fund resulting in a purchase price for the parcel of $53,500. The Company intends to build, own and operate a Wingers restaurant on the site. The Company is also negotiating to purchase an additional Wingers restaurant located in Ogden, Utah. This purchase would include the land, building and restaurant operations. This particular Wingers restaurant is corporately owned and has been in operation since 1995. 14 PLAN OF OPERATION The Company is moving forward in the development and marketing of its real estate holdings. This includes planned development of approximately 200,000 square feet of flex space in the Salt Lake City market as mention above. In addition, the Company has purchased additional land for further development near the planned developments mentioned. To bring these and other developments to fruition, the Company is actively negotiating with a number of potential financial partners and investors to further develop its real estate holdings. CAPITAL RESOURCES AND LIQUITY The Company has been able to obtain funding for its operation through private lenders or banks. This financing has and will continue to involve personal guaranties by our officers and directors for the loans. The Company has been successful in selling some of its properties in the past and is actively negotiating with a number of potential financial partners in order to reduce the Company's serviceable debt and allow the purchase or development of additional income-producing properties. The Company has operated primarily on funds generated by the sale of properties that took place during the second quarter of 2000, as noted in the fiscal year-end report dated June 30, 2000. In addition, the Company has successfully negotiated and secured a $1,000,000 investment note payable in monthly installments of $33,230 from Corporate Ventures L.L.C. located in Nuevo, California. The company is current in the receipt of all payments due in the note described. Terms and conditions of the note are found in the Company's financial statements. 15 PART II: OTHER INFORMATION Item 1. Legal Proceedings. None Item 3. Defaults Upon Senior Securities None Item 4. Submission of matters to a Vote of Security Holders None Item 5. Other Information None Item 6. Exhibits and Reports (a) Exhibits None (b) Reports on Form 8-K None 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. PRESS REALTY ADVISORS CORPORATION Date: 05/21/01 By: /s/ David Murdock -------------------------------- David Murdock, Chief Executive Officer Date: 05/21/01 By: /s/ Matthew Seegmiller -------------------------------- MATTHEW, Chief Financial Officer 16

PRESS REALTY ADVISORS 10-Q