RESULTS OF OPERATIONS
The Company reported a net loss of approximately $71,000 ($0.07 per share) for
the three months ended September 30, 2020 and net income of approximately
$339,000 ($0.33 per share) for the three months ended September 30, 2019. For
the nine months ended September 30, 2020, the Company reported a net loss of
approximately $910,000 ($0.90 per share) and net income of approximately
$337,000 ($0.33 per share) for the nine months ended September 30, 2019.
REVENUES
Rentals and related revenues for the three and nine months ended September 30,
2020, were approximately $20,000 and $59,000, respectively, and primarily
consists of rent from the Advisor to CII for its corporate office. For the three
and nine months ended September 30, 2019 rental and related revenues were
$19,000 and $56,000, respectively.
Net realized and unrealized gains (losses) from investments in marketable
securities:
Net realized loss from the sale of marketable securities for the three and nine
months ended September 30, 2020 was approximately $9,000 and $80,000,
respectively. Net realized gain from the sale of marketable securities for the
three and nine months ended September 30, 2019 was approximately $17,000 and
$6,000, respectively. Unrealized net (loss) gain from investments in marketable
securities for the three and nine months ended September 30, 2020 was
approximately $128,000 and ($186,000), respectively. This was primarily due to
the substantial recovery in the overall U.S. stock market from lows in March
2020 as businesses began reopening in the second quarter. Unrealized net (loss)
gain from investments in marketable securities for the three and nine months
ended September 30, 2019 was approximately ($5,000) and $247,000, respectively.
For further details refer to Note 6 to the Condensed Consolidated Financial
Statements (unaudited).
Income from other investments:
Income from other investments for the three and nine months ended September 30,
2020 was approximately $68,000 and $240,000, respectively. Income from other
investments for the three and nine months ended September 30, 2019 was
approximately $479,000 and $654,000, respectively. For further details refer to
Note 7 to the Condensed Consolidated Financial Statements (unaudited).
11
Other than temporary impairment losses from other investments ("OTTI"):
For the nine months ended September 30, 2020 OTTI valuation adjustment was
$315,000 related to two investments. For further details, refer to Note 7 to the
Condensed Consolidated Financial Statements (unaudited).
Interest, dividend, and other income:
Interest, dividend, and other income for the three and nine months ended
September 30, 2020 was approximately $71,000 and $249,000, respectively.
Interest, dividend, and other income for the three and nine months ended
September 30, 2019 was approximately $137,000 and $375,000, respectively. The
decreases in the three and nine-month comparable periods was primarily due to
decreased interest income from investments in U.S. T-bills.
EXPENSES
Expenses for rental and other properties for the nine months ended September 30,
2020 as compared with the same period in 2019 decreased by approximately $16,000
(21%) primarily due to decreased repairs and maintenance at our corporate
office.
General and administrative expenses for the three months ended September 30,
2020 as compared with the same period in 2019 decreased by approximately $10,000
(25%) primarily due to decreased non-employee stock compensation.
Interest expense for the nine months ended September 30, 2020 as compared with
the same period in 2019 decreased by approximately $18,000 (42%) primarily due
to decreased outstanding balance and decreased interest rate on note payable to
our affiliate TGIF.
EFFECT OF INFLATION:
Inflation affects the costs of holding the Company's investments. Increased
inflation would decrease the purchasing power of our mainly liquid investments.
LIQUIDITY, CAPITAL EXPENDITURE REQUIREMENTS AND CAPITAL RESOURCES
The Company's material commitments primarily consist of a note payable to the
Company's 49% owned affiliate, T.G.I.F. Texas, Inc. ("TGIF") of $650,000 due on
demand, contributions committed to other investments of approximately $668,000
due upon demand. The $1.91 million in margin is primarily related to the
purchase of US T-bills at quarter end. The T-bills were sold in October 2020 and
the related margin was repaid. The purchase of T-bills at each fiscal quarter
end is for the purposes of qualifying for the REIT asset test. The funds
necessary to meet these obligations are expected from the proceeds from the
sales of investments, distributions from investments and available cash.
MATERIAL COMPONENTS OF CASH FLOWS
For the nine months ended September 30, 2020, net cash used in operating
activities was approximately $995,000, primarily consisting of operating
expenses.
For the nine months ended September 30, 2020, net cash provided by investing
activities was approximately $1.94 million. This consisted primarily of $1
million collection of loan due from purchaser of Grove Isle, $200,000 collection
of loan participation, net proceeds from sales and redemptions of marketable
securities of $1.21 million, distributions from other investments of $598,000
and distribution from affiliate of $221,000. These sources of funds were
partially offset by uses of cash consisting primarily of $1.06 million in
purchases of marketable securities and $227,000 of contributions to other
investments.
For the nine months ended September 30, 2020, net cash used in financing
activities was approximately $8.9 million, consisting of $8.0 million in
repayment of margin payable relating to the quarter end purchases of U.S.
T-bills, $507,000 dividend paid, $350,000 principal payment on note due to
affiliate and $66,000 in purchase of treasury shares.
© Edgar Online, source Glimpses