UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
FORM 10-K
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ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended
December 31, 2015
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TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from ____________
to ____________
Commission File No.: 333-71773
MANASOTA GROUP, INC.
(Exact Name of Registrant as Specified in Its
Charter)
Florida
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65-0840565
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(State or other Jurisdiction of
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(I.R.S. Employer
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Incorporation or Organization)
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Identification No.)
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P. O. Box 14302
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Bradenton, Florida
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34280
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(Address of principal executive offices)
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(Zip Code)
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(941) 462-1640
(Registrant’s telephone number, including
area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, par value $.01 per share
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OTC Markets
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Securities registered pursuant to Section 12(g)
of the Act: None
Indicate by check mark if the registrant is
a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is
not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
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
has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files). Yes ☐ No ☒
Indicate by check mark if disclosure of delinquent
filers pursuant to Item 405 of Regulation S-K (Sec. 229.405 of this chapter) is not contained herein, and will not be contained,
to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K. ☒
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 reporting company” in Rule 12b-2
of the Exchange Act. (Do not check if a smaller reporting company.)
Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12 b-2 of the Act). Yes ☐ No ☒
The aggregate market value of the voting common
stock held by non-affiliates of the Registrant, computed by the reference to average bid and asked price of such stock on June
30 2016, was approximately $44,430.
Documents Incorporated by Reference:
None
EXPLANATORY NOTE
The purpose of this Amendment No.
1 to the registrant’s Annual Report on Form 10-K which was filed with the Securities and Exchange Commission on October
11, 2016 as the Annual Report for the year ended December 31, 2015 (the “Form 10-K”), is to replace such Report in
its entirety. The Annual Report for the year ended December 31, 2014 was inadvertently filed in place of the Annual Report for
year ended December 31, 2015. This Report speaks as of the original filing date and does not reflect events that may have occurred
subsequent to the original filing date.
MANASOTA GROUP, INC.
TABLE OF CONTENTS
PART I.
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Item 1.
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Business.
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1
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Item 1A.
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Risk Factors.
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2
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Item 1B.
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Unresolved Staff Comments.
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2
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Item 2.
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Properties.
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2
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Item 3.
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Legal Proceedings.
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3
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Item 4.
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Mine Safety Disclosures.
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3
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PART II.
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Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
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3
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Item 6.
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Selected Financial Data.
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3
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Item 7.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations.
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4
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Item 7A.
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Quantitative and Qualitative Disclosures about Market Risk.
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6
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Item 8.
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Financial Statements and Supplementary Data.
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6
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Item 9.
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
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6
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Item 9A.
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Controls and Procedures.
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6
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Item 9B.
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Other Information.
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8
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PART III.
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Item 10.
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Directors, Executive Officers, and Corporate Governance.
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8
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Item 11.
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Executive Compensation.
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11
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
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11
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Item 13.
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Certain Relationships and Related Transactions, and Director Independence.
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14
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Item 14.
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Principal Accountant Fees and Services.
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14
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Item 15.
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Exhibits and Financial Statement Schedules.
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15
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Signatures
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16
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Financial Statements
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F-i
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PART I.
ITEM 1. Business.
This report contains
forward-looking statements regarding our business, financial condition, results of operations and prospects. Words such as “expects,”
“anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates”
and similar expressions or variations of such words are intended to identify forward-looking statements, but are not the exclusive
means of identifying forward-looking statements in this report.
Although forward-looking
statements in this report reflect the good faith judgment of our management, such statements can only be based on facts and factors
currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties and actual results
and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements.
Except as required by federal securities laws, we undertake no obligation to revise or update any forward-looking statements in
order to reflect any event or circumstance that may arise after the date of this report.
Manasota Group, Inc., f/k/a
Horizon Bancorporation, Inc. (hereinafter, the “Company,” “we” or the “Registrant”), was incorporated
in the State of Florida on May 27, 1998, for the purpose of becoming a bank holding company owning all of the outstanding capital
stock of Horizon Bank, a commercial bank chartered under the laws of Florida and a member of the Federal Reserve System(the “Bank”).
The Bank was capitalized
by means of a $5.6 million initial public offering of its common stock, $0.1 par value (the “Common Stock”) at $5.50
per share, which was completed in October 1999, allowing the Bank to open for business on October 25, 1999. Subsequently, in order
to meet the Bank’s capital needs, the Company sold additional shares of Common Stock in a rights offering (in 2003), two
private placements (in 1999 and 2003) and through the exercise of warrants issued in the rights offering, for aggregate net proceeds
of approximately $4.65 million.
In order to facilitate
a private placement of preferred stock, the proceeds of which were designed to augment the capital of the Bank, we authorized,
on October 22, 2009, the issuance of 5,000 shares of Series A Preferred Stock, having a $1,000 liquidation preference, by filing
the Third Amended and Restated Articles of Incorporation containing the appropriate designation of such series of stock. The private
placement was not successful and no shares of the Series A Preferred Stock were sold. On June 11, 2011, we filed the Fourth Amended
and Restated Articles of Incorporation effecting the cancellation of this designation and change in the Company’s name from
Horizon Bancorporation, Inc. to Manasota Group, Inc.
On May 18, 2004, the Company
registered, by filing an SEC Form 8A, the Common Stock under Section 12(g) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”). Subsequently, in November 2004, the Common Stock began trading on the OTCBB under the symbol “HZNB”.
During October 25, 1999
through September 10, 2010, the Company acted as a one-bank holding company with respect to the Bank. On September 10, 2010, when,
due to significant losses incurred by the Bank during 2008-2010, the Florida Office of Financial Regulation (the “OFR”)
declared the Bank to be “imminently insolvent.” The Bank was closed, with the Federal Deposit Insurance Corporation
(the “FDIC”) being appointed as receiver therefor, and sold to Bank of the Ozarks.
After a series of negotiations,
we entered into, on July 11, 2011, a settlement agreement with the FDIC, pursuant to which we paid the FDIC the net amount $511,000
in exchange for full ownership of the one-story, approximately 7,000 square foot building previously occupied by the Bank (the
“Building”). Simultaneously, we entered into a lease with Bank of the Ozarks, which commenced retroactively to September
11, 2010 and expired on September 10, 2013. The Building was subject to a mortgage held by 1st Manatee Bank, a Florida state bank
with headquarters in Manatee County, with a maturity date of August 31, 2013 (the “Building Note”). After the expiration
of the lease with Bank of the Ozarks, 1st Manatee Bank became the lessee of the Building. We sold the Building on September 29,
2015, to 1st Manatee Bank.
In summary, for the last
five years, our business has consisted of owning, maintaining and holding for rent the Building, leased to a single tenant. Accordingly,
our sole source of income has consisted of rent under such lease and our net income has consisted of the net margin between such
revenue and the sum of the debt service with respect to the mortgage and operating expenses.
None of our officers have
been receiving any compensation since September 10, 2010. Moreover, beginning after filing the Quarterly Report on Form 10-Q for
the third quarter of 2011, particularly with the advent of the requirement that our periodic reports be accompanied by Interactive
Data Files pursuant to Rule 405 of Regulation S-T, the total fees payable to the accountants, legal counsel and contractors engaged
to convert the reports into formats suitable for filing on EDGAR have increased to a level which exceeded our net margin. Furthermore,
the Common Stock continued to trade very thinly and on a sporadic basis. Consequently, on or about December 31, 2011, the Board
of Directors made the decision to temporarily suspend the Company’s filing of periodic reports under the Exchange Act beginning
with its Annual Report on Form 10-K for the fiscal year ending December 31, 2011.
On April 26, 2013, we received
a letter from the Office of Enforcement Liaison in the SEC’s Division of Corporation Finance. The letter informed the Company
that if we did not take the necessary steps to return the Company into compliance with its reporting requirements under the Exchange
Act within the next fifteen days, the SEC may commence administrative proceedings to revoke our registration under the Exchange
Act and impose a trading suspension with respect to the Common Stock. On May 6, 2014, we filed a letter with the SEC setting forth
a plan for returning into such compliance by filing this Report on or before July 31, 2014 and all other delinquent periodic reports
on or before July 31, 2014, and requesting that no such administrative proceedings or trading suspension be commenced at this time.
We have since filed the Annual Report on form 10-K for fiscal 2011 and the Quarterly Reports on Form 10-Q for the first three fiscal
quarters of 2012 as well as the Annual Report on form 10-K for fiscal 2012 and the first three fiscal quarters of 2013.
In early 2013, because
of the expense involved, the Company once again suspended filing periodic reports under the Exchange Act commencing with the Annual
Report on Form 10-K for fiscal 2013. In late 2015, after the sale of the Building,
see
discussion in Items 2 and 7 below,
the Board of Directors decided to bring the Company into compliance with the reporting requirements under the Exchange Act by filing
the Annual Reports on Form 10-K for the fiscal year ended December 31, 2013, 2014 and 2015, as well as the Quarterly Reports for
all relevant interim periods through June 30, 2016.
ITEM 1A. Risk Factors
Not Applicable.
ITEM 1B. Unresolved Staff Comments
Not applicable
ITEM 2. Properties
Until its sale in September
2015, the Company owned the Building located at 900 53rd Avenue East, in Bradenton. The Building consisted of approximately 7,000
square feet of interior space, four interior teller windows, four exterior drive-through teller stations and 36 parking spaces.
The interior included executive offices, work stations for support staff and safe deposit box storage areas. The total cost of
the Building, including the costs of construction, landscaping, and furniture and equipment, was approximately $1.96 million, and
the Company spent another approximately $40,000 to furnish certain additional space with furniture and equipment. Subsequently
all furniture and equipment was taken into receivership by the FDIC. Until September 10, 2013, the Building was leased to Bank
of the Ozarks. Since December 6, 2013, and until its sale, the Building was leased under a three-year lease, to 1st Manatee Bank,
the holder of the Building Note. In 2015, we recorded net rent of $115,059 with respect to the Building. The Building was sold,
on September 29, 2015, to 1st Manatee Bank, for $2,100,000. After paying sales commissions and the outstanding balance on the mortgage
of approximately $1,432,000, we realized approximately $538,000 in net cash proceeds and an approximately $1 million gain for income
tax purposes from the sale. The gain was offset by a portion of $ 11.4 million of the Company’s net operating loss carryover
as of December 31, 2015.
ITEM 3. Legal Proceedings
The Company is not a party
to, nor is any of its property the subject of, any material pending legal proceeding that is not routine litigation that is incidental
to its business, or any other material legal proceeding.
ITEM 4. Mine Safety Disclosures
Not applicable
PART II.
ITEM 5. Market for Registrant’s Common
Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Our Articles of Incorporation
authorize us to issue up to 25,000,000 shares of the Common Stock and 1,000,000 shares of preferred stock. As of June 30, 2016,
1,809,912 shares of the Common Stock were issued, and 1,770,139 were outstanding and held by approximately 580 holders of record.
No shares of preferred stock were then issued and outstanding.
Since November 2004, the
Common Stock has been trading on the OTCQB Marketplace under the symbol “HZNB”. The following table sets forth the
range of high and low bid information for the four quarters of 2015, as reported by Bloomberg.com:
Quarter ended
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High
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Low
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March 31
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$
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0.20
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$
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0.07
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June 30
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$
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0.25
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$
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0.11
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September 30
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$
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0.13
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$
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0.08
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December 31
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$
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0.21
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$
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0.00
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These quotations reflect
inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions.
The following table sets
forth the range of high and low bid information for the four quarters of 2013, as reported by Bloomberg.com:
Quarter ended
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High
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Low
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March 31
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$
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0.01
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$
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0.01
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June 30
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$
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0.17
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$
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0.01
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September 30
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$
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0.15
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$
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0.07
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December 31
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$
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0.15
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$
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0.09
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These quotations also reflect
inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions.
ITEM 6. Selected Financial Data
Not applicable
ITEM 7. Management’s Discussion and
Analysis of Financial Condition and Results of Operations
The following discussion
of our financial condition and results of operations should be read in conjunction with our financial statements and related notes
included in this report. This discussion includes forward-looking statements that involve risks and uncertainties. As a result
of many factors, our actual results may differ materially from those anticipated in these forward-looking statements.
A. Overview
The Registrant was incorporated
in the State of Florida on May 27, 1998, for the purpose of becoming a bank holding company owning all of the outstanding capital
stock of Horizon Bank, a commercial bank chartered under the laws of Florida and a member of the Federal Reserve System (the “Bank”).
The Bank opened for business on October 25, 1999.
As previously reported,
during October 25, 1999 through September 10, 2010, the Company acted as a one-bank holding company with respect to the Bank. On
September 10, 2010, due to significant losses incurred by the Bank during 2008-2010, the Florida Office of Financial Regulation
(the “OFR”) declared the Bank to be “imminently insolvent.” The Bank was closed, with the Federal Deposit
Insurance Corporation (the “FDIC”) being appointed as receiver therefor, and sold to Bank of the Ozarks.
Pursuant to a settlement
agreement with the FDIC and a three-year lease, both entered into July 11, 2011, but effective September 11, 2010, we have owned,
maintained and held for rent the Building under a lease to Bank of the Ozarks. Effective December 6, 2013, we entered into a new
three-year lease with 1
st
Manatee Bank.
As reported under Item
2 above, the Building was sold in September 2015. Using the approximately $538,000 in net proceeds from the sale of the Building,
we (a) declared and paid, on November 2, 2015, a cash dividend of $0.27 per share of Common Stock for a total of approximately
$490,000 and (b) repaid all outstanding accounts payable. As a result, we began fiscal year 2016 with approximately $48,000 in
cash.
Subsequent to December 31, 2015, as of the date of this Report,
the following event is hereby reported
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Effective March 21, 2016, we sold 2,000,000 shares of Common Stock to three members of our Board
of Directors (Charles S. Conoley, M. Shannon Glasgow and Barclay Kirkland, D.D.S.) and Daniel D. Dinur, for the purchase price
of $.01 per share in a private placement. We intend to use the proceeds from such sale, as well as any remaining proceeds from
the sale of the Building, to defray the costs of restoring the Company’s compliance with the reporting requirements under
the Exchange Act.
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In the wake of the Company’s
sale of the Building and the subsequent distribution of the special dividend, management began to consider the future of the Company
as a viable entity. In early March 2016, management decided that it would not be in the best interest of the Company and its shareholders
to cease all operations and allow the Company to become defunct, similar to the overwhelming majority of the other community bank
holding companies which lost their bank subsidiaries in the Great Recession. Instead, the conclusion was reached that the Company
could serve as the surviving entity in a merger or other combination with an operating company, the management of which was desirous
of attaining public company status for the operating company. Such combination with the right operating company would, management
believed, give our shareholders a chance to recover at least some portion of their original investment in the Company by participating
in the future financial results of the chosen operating company.
Because any such operating
company would by definition require that, at the time of the merger, the Company is a fully-reporting public company, management
resolved to undertake the effort and the expense of restoring the Company’s compliance with its reporting obligations under
the Exchange Act. In the absence of cash on hand or borrowing capacity to defray the cost of such restoration, the Board of Directors
inquired whether any of its members would be willing to take the risk of investing in the Company cash sufficient to effect such
restoration
and
to keep the Company compliant through fiscal 2016, there being no assurance that the Company would be able
to find the right operating company and complete a merger during 2016. Three of the members of the Board of Directors, and Daniel D.
Dinur, the Company’s outside corporate counsel, did then, in March 2016, invest $20,000 in the Company by purchasing shares
of Common Stock at a purchase per share which exceeded the then trading price of such stock by over 200%. Mr. Conoley also agreed
to continue to serve as our President and CEO without compensation through the end of 2016.
As of the date of this
Report, management is continuing in its efforts to identify a potential merger partner whose prospects for growth and other attributes
would give our shareholders the optimal chance for recovering, over time, some portion of their original investment in the Company.
There is no assurance that we will identify the appropriate operating company, negotiate a fair merger deal and consummate the
transaction in the near future.
B. Results
of Operations
Year ended December 31, 2015 Compared
to Year Ended December 31, 2014
Continuing Operations
We incurred a $102,064
loss in 2015 from continuing operations caused by $64,424 in debt service under the Building Note and $113,345 in general and administrative
expenses being offset by $9,069 in other miscellaneous income and an income tax benefit for the year of $66,636. In 2014, out loss
from continuing operations was $55,656, caused by $78,886 in debt service under the Building Note and $15,344 in general and administrative
expenses being offset by $236 in other miscellaneous income and an income tax benefit for the year of $36,338. The increase in
general administrative expenses in 2015 compared to 2014 was attributable mainly to costs associated with the sale of the Building.
Discontinued Operations
Due to the gain of $1,094,487
from the sale of the Building, offset by a $442,679 income tax provision for the year, we recognized, in 2015, $651,808 in income
from discontinued operations. In 2014, the comparable amounts were $120,735 in income and $47,690 in an income tax provision, for
income from discontinued operations of $73,045.
Net Income
Net income for 2015 from
both continuing and discontinued operations amounted to $594,744, compared to $17,389 in 2014, with the increase attributable to
the gain from the sale of the Building.
Liquidity and Capital
Resources
As of December 31, 2015,
we had a working capital excess of $48,616. We realized net income of $549,744 in 2015, compared to net income of $17,389 in 2014.
The 2015 increase is explained in the above paragraph.
Off Balance Sheet Arrangements
As of the filing date of
this Report, we have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated
retained interests, derivative instruments or other contingent arrangements that expose us to material continuing risks, contingent
liabilities or any other obligations under a variable interest in an unconsolidated entity that provides us with financing, liquidity,
market risk or credit risk support.
Impact of Inflation
We believe that inflation
has not had a material impact on our results of operations for the years ended December 31, 2015 and 2014. There is no assurance
that future inflation will not have an adverse impact on our operating results and financial condition.
Application of Critical Accounting Policies
and Estimates
The preparation of financial
statements in conformity with accounting principles generally accepted in the United States requires our management to make estimates
and assumptions that affect the amounts reported in the financial statements and the accompanying notes. These estimates and assumptions
are based on our management’s judgment and available information and, consequently, actual results could be different from
these estimates.
Recently-Issued Accounting Pronouncements
There were various updates
recently issued, most of which represented updates to current accounting literature or application to specific industries, and
are not expected to a have a material impact on the Company’s financial position, results of operations or cash flows.
ITEM 7A. Quantitative and Qualitative Disclosure
About Market Risk
Not applicable
ITEM 8. Financial Statements and Supplementary
Data
Our audited financial statements
for the year ended December 31, 2015 are included as a separate section of this Report beginning on page F-i.
ITEM 9. Changes in and Disagreements with
Accountants on Accounting and Financial Disclosure
As previously reported,
on December 12, 2012, our Audit and Compliance Committee replaced Francis & Co., CPA’s as the Company’s independent
registered public accounting firm, and appointed Pender Newkirk, LLP as the Company’s new independent registered public accounting
firm to conduct the audit of our financial statements for the fiscal year ended December 31, 2011, and for the periods thereafter.
Effective January 1, 2013, Pender Newkirk, LLP merged into Warren Averett, LLC.
Subsequent to December
31, 2014, as previously reported, effective March 22, 2016, the Company engaged Goldstein Schechter Koch, PA (“GSK”),
as its principal accountant to audit the Company’s financial statements for the fiscal years ending December 31, 2013, 2014
and 2015. Warren Averett, LLC (“Warren Averett”) had last acted as the Registrant’s principal accountant for
the fiscal year ending December 31, 2012. The Company decided, by action of the Audit Committee of its Board of Directors, not
to renew such firm’s engagement going forward.
Warren Averett’s
report on our financial statements for either of the past two fiscal years or for the fiscal years ended December 31, 2011 and
2012, did not contain an adverse opinion, a disclaimer of opinion, or was qualified or modified as to uncertainty, audit scope
or accounting principle. By the same token, there were no disagreements during such periods, or during the subsequent interim period
preceding March 22, 2016, between the Company and Warren Averett on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure.
The Company has not consulted
with GSK during its two most recent fiscal years, or during any subsequent interim period prior to its appointment as the principal
accountant, either with respect to (i) the application of accounting principles to a specified transaction, either completed or
proposed, or the type of audit opinion that might be rendered on the Company’s financial statements, and neither a written
report was provided to the Company nor oral advice was provided that GSK concluded was an important factor considered by the Company
in reaching a decision as to the accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject
of disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) or a reportable event (within
the meaning of Item 304(a)(1)(v) of Regulation S-K).
ITEM 9A. Controls and Procedures
Evaluation of Disclosure Controls and
Procedures
We maintain disclosure
controls and procedures that are designed to ensure that material information required to be disclosed in our periodic reports
filed under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s
rules and forms and to ensure that such information is accumulated and communicated to our management, including our Chief Executive
Officer and Chief Financial Officer (Principal Financial Officer) as appropriate, to allow timely decisions regarding required
disclosure. During the last quarter of 2015, we carried out an evaluation, under the supervision and with the participation of
our management, including the Principal Executive Officer and the Acting Chief Financial Officer (Principal Financial Officer),
of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13(a)-15(e) under
the Exchange Act. Based on this evaluation, because of lack of segregation of duties attributable to limited resources and limited
number of employees, management concluded that our disclosure controls and procedures were ineffective as of December 31, 2015.
Management’s Report on Internal
Control over Financial Reporting
Our management is responsible
for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting
is designed to provide reasonable assurances regarding the reliability of financial reporting and the preparation of our financial
statements in accordance with U.S. generally accepted accounting principles, or GAAP. Because of its inherent limitations, internal
control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree
or compliance with the policies or procedures may deteriorate.
With the participation
of our Principal Executive Officer and Principal Financial Officer, our management conducted, during the last quarter of 2015,
an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2015, based on the framework
in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO.
Based on our evaluation and the material weaknesses described below, management concluded that the Company did not maintain effective
internal control over financial reporting as of December 31, 2015, based on the COSO framework criteria.
Management has identified
the major control deficiencies as being lack of segregation of duties and the small size of our accounting staff. These control
deficiencies could result in a misstatement of account balances that would result in a reasonable possibility that a material misstatement
to our financial statements may not be prevented or detected on a timely basis. Accordingly, we have determined that these control
deficiencies together constitute a material weakness.
To mitigate these control
deficiencies, which are attributable to our current limited resources, we do now and will continue to rely heavily on direct management
oversight, along with the use of external legal and accounting professionals. As our resources grow, e.g. upon the sale of the
Building, we expect to increase the number of employees, which will enable us to implement adequate segregation of duties within
the internal control framework.
In light of this material
weakness, we performed additional analyses and procedures in order to conclude that our financial statements for the year ended
December 31, 2015 included in this Report were fairly stated in accordance with US GAAP. Accordingly, management believes that
despite our material weaknesses, our financial statements for the year ended December 31, 2015 are fairly stated, in all material
respects, in accordance with U.S. GAAP.
This Report does not include
an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s
report was not subject to attestation by our registered public accounting firm.
Limitations on Effectiveness of Controls and Procedures
Our management, including
our Principal Executive Officer and Principal Financial Officer, does not expect that our disclosure controls and procedures or
our internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide
only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system
must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs.
Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control
issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include, but are not limited
to, the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.
Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management
override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood
of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future
conditions.
Over time, controls may
become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.
Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be
detected.
Changes in Internal Controls
During the fourth quarter
ended December 31, 2015, there have been no changes in our internal control over financial reporting that have materially affected
or are reasonably likely to materially affect our internal controls over financial reporting.
ITEM 9B. Other Information
None
PART III.
ITEM 10. Directors, Executive Officers and Corporate Governance
The following table shows
the positions held by our board of directors and executive officers, as well a key employee, and their ages, as of June 30, 2016:
Name
|
|
Age
|
|
Position
|
Charles S. Conoley
|
|
57
|
|
Director, President and Chief Executive Officer
|
Michael Shannon Glasgow
|
|
47
|
|
Director
|
Barkley Kirkland, DDS
|
|
71
|
|
Director
|
Bruce E. Shackelford
|
|
58
|
|
Director
|
Clarence R. Urban
|
|
70
|
|
Director
|
Kathleen M. Jepson
|
|
67
|
|
Chief Financial Officer
|
Biographical Information Concerning Directors.
Charles S. Conoley has
served as a director of the Company since June 15, 2013; as a Class II director of the Company since May 11, 2009 and as a Class
I director of the Company from October 2, 1998 to May 11, 2009. Mr. Conoley has served as the President and Chief Executive Officer
of the Company since October 2, 1998, and served as a director and President and Chief Executive Officer of the Bank from October
25, 1999 to September 10, 2013. Mr. Conoley is currently employed as Vice-President; Commercial Lending Office for 1st Manatee
Bank in Parrish, Florida. From 1993-1998, he was a Vice President and commercial loan officer for American Bank in Bradenton, Florida.
Prior to that he was employed as a senior executive for affiliates of Barnett Bank in Miami and Bradenton, Florida. Mr. Conoley
received his MBA in Finance and Accounting from Indiana University in Bloomington, Indiana and his undergraduate degree from Purdue
University.
Michael Shanon Glasgow
has served as a Director of the Company since June 15, 2013; as a Class I director of the Company since October 2, 1998, and served
as a director of the Bank from October 25, 1999 to September 10, 2013. He is employed with USA Steel Fence, Inc., a commercial
and residential fence company that has operations in Bradenton, Lakeland, Gibsonton, Englewood and St. Petersburg, Florida, and
serves as its President. Mr. Glasgow is also the owner of USA Land Company, and USA Used Cars, all of Bradenton, Florida. He also
serves as Vice President for USA Group, Inc. and USA Real Estate, also of Bradenton, Florida.
Barclay Kirkland, DDS,
has served as a Director of the Company since June 15, 2013; as a Class I director of the Company since May 18, 2000, and served
as a director of the Bank from February 2001 to September 10, 2013. He is in private practice in Bradenton, Florida. He is a member
of the American Academy of Peridontology and the American Academy of Anti-Aging Medicine, and is active in Rotary International.
Bruce E. Shackelford has
served as a Director of the Company since June 15, 2013; as a Class I director of the Company since October 2, 1998, and served
as a director of the Bank from October 25, 1999 to September 10, 2013. He serves as President of Four Star Tomato, Inc., R&S
Sales and Management, Inc. and Western Tomato Growers & Shippers, Inc., all companies engaged in food production and distribution.
He is also the general partner of Triple-S Farms, a farming operation.
Clarence R. Urban has served
as a Director of the Company since June 15, 2013; as a Class II director of the Company since May 20, 2004 and as a Class III director
of the Company from October 2, 1998 to May 20, 2004. He served as a director of the Bank from October 25, 1999 to September 10,
2013. He served as Chairman of the Company’s Board of Directors from October 2, 1998, to September 17, 2003, and as Chairman
of the Bank’s Board of Directors from October 25, 1999, to September 17, 2003. He is a retired businessman.
Additional Information about our Board and
its Committees
We continue to monitor
the rules and regulations of the SEC regarding “independent” directors. All directors, except for Charles S. Conoley,
are “independent” as defined in the listing standards of NASDAQ Global Market.
During 2015, all of our
directors attended at least 75% of all meetings during the periods for which they served on our board, and all of the meetings
held by committees of the board on which they serve. The board of directors has a standing Audit and Compliance Committee but no
standing compensation committee or nominations and governance committee. The Charter for the Audit and Compliance Committee was
filed with the SEC on May 13, 2003.
As of December 31, 2015,
the Audit and Compliance Committee consisted of Bruce E. Shackleford, who served as the Chairman, Michael S. Glasgow and Clarence
R. Urban. The Audit and Compliance Committee’s duties, which are specified in its Charter, include, but are not limited to:
|
·
|
reviewing and discussing with management and the independent accountants our annual and quarterly
financial statements,
|
|
·
|
directly appointing, compensating, retaining, and overseeing the work of the independent auditor,
|
|
·
|
approving, in advance, the provision by the independent auditor of all audit and permissible non-audit
services,
|
|
·
|
establishing procedures for the receipt, retention, and treatment of complaints received by us
regarding accounting, internal accounting controls, or auditing matters and the confidential, anonymous submissions by our employees
of concerns regarding questionable accounting or auditing matters,
|
|
·
|
the right to engage and obtain assistance from outside legal and other advisors as the audit committee
deems necessary to carry out its duties,
|
|
·
|
the right to receive appropriate funding from us to compensate the independent auditor and any
outside advisors engaged by the committee and to pay the ordinary administrative expenses of the audit committee that are necessary
or appropriate to carrying out its duties, and
|
|
·
|
reviewing and approving all related party transactions unless the task is assigned to a comparable
committee or group of independent directors.
|
The Audit and Compliance
Committee will at all times be composed exclusively of “independent directors” who are “financially literate.”
“Financially literate” is defined as being able to read and understand fundamental financial statements, including
a company’s balance sheet, income statement and cash flow statement.
The committee has, and
will continue to have, at least one member who has past employment experience in finance or accounting, requisite professional
certification in accounting, or other comparable experience or background that results in the individual’s financial sophistication.
The board of directors believes that Mr. Shackelford satisfies the definition of financial sophistication and also qualifies as
an “audit committee financial expert,” as defined under rules and regulations of the SEC.
Indebtedness of Directors and Executive
Officers
None of our directors or
executive officers or their respective associates or affiliates is indebted to us.
Family Relationships
There are no family relationships
among our directors and executive officers.
Legal Proceedings
As of June 30, 2016, there
was no material proceeding to which any of our directors, executive officers, affiliates or stockholders is a party adverse to
us.
Code of Ethics
In March 2003, we adopted
a Code of Ethics that applies to all of our executive officers, directors and employees. The Code of Ethics codifies the business
and ethical principles that govern all aspects of our business. We will provide a copy of our Code of Ethics without charge to
any shareholder who makes a written request for a copy.
Committee Interlocks and Insider Participation
No member of our board
of directors is employed by us.
Section 16(a) Beneficial Ownership Reporting
Compliance
Rules adopted by the SEC
under Section 16(a) of the Exchange Act, require our officers and directors, and persons who own more than 10% of the issued and
outstanding shares of our equity securities, to file reports of their ownership, and changes in ownership, of such securities with
the SEC on Forms 3, 4 or 5, as appropriate. Such persons are required by the regulations of the SEC to furnish us with copies of
all forms they file pursuant to Section 16(a).
Based solely upon a review
of Forms 3, 4 and 5 and amendments thereto furnished to us during our most recent fiscal year, and any written representations
provided to us, we believe that all of the officers, directors, and owners of more than ten percent of the outstanding shares of
our common stock did comply with Section 16(a) of the Exchange Act for the year ended December 31, 2015.
ITEM 11. Executive Compensation
Summary Compensation Table
The following table sets
forth, for the most recent fiscal year, all cash compensation paid, distributed or accrued, including salary and bonus amounts,
for services rendered to us by our President and Chief Executive Officer:
Name and Principal Position
(a)
|
|
|
Year
(b)
|
|
|
|
Salary
(c)
|
|
|
|
Bonus
(d)
|
|
|
|
Stock
Awards
(e)
|
|
|
|
Option Awards
(f)
|
|
|
|
Non-Equity Incentive Plan Compensation (g)
|
|
|
|
Non-qualified Deferred Compensation Earnings
(h)
|
|
|
|
All Other Compensation (i)
|
|
|
|
Total
(j)
|
|
Charles S. Conoley. President and CEO of the
Company
|
|
|
2015
2014
|
|
|
$
$
|
0
0
|
|
|
|
0
0
|
|
|
$
$
|
0
0
|
|
|
$
$
|
0
0
|
|
|
$
$
|
0
0
|
|
|
$
$
|
0
0
|
|
|
$
$
|
0
0
|
|
|
$
$
|
0
0
|
|
Outstanding Equity Awards at Fiscal Year-End
No equity awards were outstanding at December
31, 2014.
Employment Agreements
Charles S. Conoley has
served as the Company’s President and Chief Executive Officer since its inception. Biographical information about Mr. Conoley
is set forth above in the segment containing information about the Company’s directors and executive officers. Effective
January 1, 2009, Mr. Conoley, the Company and the Bank entered into a three-year employment agreement, which was terminated by
mutual consent effective April 20, 2013. Mr. Conoley serves the Company with no compensation.
Kathleen
M. Jepson has served as the Company’s Senior Vice President and Chief Financial Officer since January 31, 2005. Ms. Jepson
has over twenty years banking experience, for the five years prior to 2005 with Pelican Financial, Inc., Ann Arbor, Michigan. Ms.
Jepson now works as a contract (hourly) employee for the Company, acting as its Acting Chief Financial Officer.
Director Compensation
None of the Directors received
any compensation during 2015.
ITEM 12. Security Ownership of Certain Beneficial
Owners and Management and Related Stockholder Matters
Beneficial Owners of More than 5% of the Common Stock:
The following table shows all persons whom we
know to be “beneficial owners” of more than five percent of the Common Stock as of June 30, 2016.*
Name and Address of
Beneficial
Owner
|
|
Number
of
Shares
|
|
Percent
of
Class
(1)
|
Charles S. Conoley
410 68
th
Ct. N.W.
Bradenton, Florida 34209
|
|
|
592,995
|
(2)
|
|
|
15.73
|
%
|
|
|
|
|
|
|
|
|
|
Daniel D. Dinur
6400 Powers Ferry Road, Suite 396
Atlanta, GA 30339
|
|
|
507,000
|
|
|
|
13.45
|
%
|
|
|
|
|
|
|
|
|
|
Michael Shannon Glasgow
1209-44
th
Avenue East
Bradenton, Florida 34203
|
|
|
502,325
|
(3)
|
|
|
13.32
|
%
|
|
|
|
|
|
|
|
|
|
Barclay Kirkland, D.D.S.
2109-59th Street West
Bradenton, Florida 34209
|
|
|
551,899
|
(4)
|
|
|
14.64
|
%
|
|
*
|
Information relating to beneficial ownership of the Common
Stock is based upon “beneficial ownership” concepts set forth in rules of the SEC under Section 13(d) of the Securities
Exchange Act of 1934, as amended. Under such rules, a person is deemed to be a “beneficial owner” of a security if
that person has or shares “voting power,” which includes the power to vote or direct the voting of such security,
or “investment power,” which includes the power to dispose of or to direct the disposition of such security. A person
is also deemed to be a beneficial owner of any security of which that person has the right to acquire beneficial ownership within
60 days. Under the rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may
be deemed to be a beneficial owner of securities as to which he has no beneficial interest. For instance, beneficial ownership
includes spouses, minor children and other relatives residing in the same household, and trusts, partnerships, corporations or
deferred compensation plans which are affiliated with the principal.
|
(1) The percentages are based on 3,770,139 shares of Common Stock
outstanding on June 30, 2016, plus shares of Common Stock that may be acquired by the beneficial owner within 60 days of June 30,
2016, by exercise of options and/or warrants.
(2) Includes 3,500 shares held as custodian for Max Conoley and
3,200 shares held as custodian for Alexandra Conoley, as to which Mr. Conoley disclaims beneficial ownership. Also includes 14,300
shares owned jointly with Mr. Conoley’s wife.
(3) Includes 1,825 shares held as custodian for Savannah
Glasgow as to which Mr. Glasgow disclaims beneficial ownership and 500 shares held as custodian for Marina Glasgow as to which
Mr. Glasgow disclaims beneficial ownership.
(4) Includes 33,782 shares held jointly with his wife.
Also includes 500 shares held as custodian for Cari Beth Kirkland, and 900 shares held as custodian for Chloe Fay Kirkland, and
an equal number held for each by his wife as custodian, as to all of which Dr. Kirkland disclaims beneficial ownership.
Share Ownership of Directors and Executive
Officer
The following chart shows
the number of shares of the Common Stock that each executive officer, director and nominee for director of the Company beneficially
owns, and the total shares of the Common Stock that such persons own as a group as of June 30, 2016:
Name and Address
of
Beneficial
Owner
|
|
Number of Shares
|
|
Percent of Class
(1)
|
Charles S. Conoley
410 68
th
Court N.W.
Bradenton, Florida 34209
|
|
|
592,995
|
(2)
|
|
|
15.73
|
%
|
|
|
|
|
|
|
|
|
|
Michael Shannon Glasgow
1209-44
th
Avenue East
Bradenton, Florida 34203
|
|
|
502,325
|
(3)
|
|
|
13.32
|
%
|
|
|
|
|
|
|
|
|
|
Barclay Kirkland, D.D.S.
2109-59th Street West
Bradenton, Florida 34209
|
|
|
551,899
|
(4)
|
|
|
14.64
|
%
|
|
|
|
|
|
|
|
|
|
Bruce E. Shackelford
P. O. Box 91
Ellenton, Florida 34222
|
|
|
17,958
|
(5)
|
|
|
.48
|
%
|
|
|
|
|
|
|
|
|
|
Clarence R. Urban
2108 Whitfield Park Loop
Sarasota, Florida 34243
|
|
|
78,707
|
(6)
|
|
|
2.09
|
%
|
|
|
|
|
|
|
|
|
|
All directors, nominees and
named executive officers
as a group
|
|
|
1,743,884
|
|
|
|
46.26
|
%
|
|
*
|
Information relating to beneficial ownership of the Common
Stock is based upon “beneficial ownership” concepts set forth in rules of the SEC under Section 13(d) of the Securities
Exchange Act of 1934, as amended. Under such rules, a person is deemed to be a “beneficial owner” of a security if
that person has or shares “voting power,” which includes the power to vote or direct the voting of such security,
or “investment power,” which includes the power to dispose of or to direct the disposition of such security. A person
is also deemed to be a beneficial owner of any security of which that person has the right to acquire beneficial ownership within
60 days. Under the rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may
be deemed to be a beneficial owner of securities as to which he has no beneficial interest. For instance, beneficial ownership
includes spouses, minor children and other relatives residing in the same household, and trusts, partnerships, corporations or
deferred compensation plans which are affiliated with the principal.
|
(1) The percentages
are based on 3,770,139 shares of Common Stock outstanding as of June 30, 2016, plus shares of Common Stock which may be acquired
by the beneficial owner, or group of beneficial owners, within 60 days of June 30, 2016, by exercise of options and/or warrants.
The percentage total differs from the sums of the individual percentages due to the differing denominators with respect to each
calculation.
(2) Includes
3,500 shares held as custodian for Max Conoley and 3,200 shares held as custodian for Alexandra Conoley, as to which Mr. Conoley
disclaims beneficial ownership. Also includes 14,300 shares owned jointly with Mr. Conoley’s wife.
(3) Includes
1,825 shares held as custodian for Savannah Glasgow as to which Mr. Glasgow disclaims beneficial ownership and 500 shares held
as custodian for Marina Glasgow as to which Mr. Glasgow disclaims beneficial ownership.
(4) Includes
33,782 shares held jointly with his wife. Also includes 500 shares held as custodian for Cari Beth Kirkland, and 900 shares held
as custodian for Chloe Fay Kirkland, and an equal number held for each by his wife as custodian, as to all of which Dr. Kirkland
disclaims beneficial ownership.
(5) Held by
Triple S Farms Profit Sharing for the benefit of Mr. Shackelford.
Unless otherwise indicated,
we believe that all persons named in the table below have sole voting and investment power with respect to all shares of common
stock beneficially owned by them.
Change in Control
There are no arrangements
currently in effect which may result in our “change in control,” as that term is defined by the provisions of Item
403(c) of Regulation S-K.
Equity Compensation Plan Information
There are no equity plans.
ITEM 13. Certain Relationships and Related
Transactions, and Director Independence
Related Party Transactions
As reported in Item 7 above,
as of December 31, 2014, certain current and former directors were owed $50,000 of Advances, $40,000 of which did not yield interest
and were payable on demand, and $10,000 of which bore interest at the rate of 3.25% per annum. The obligees and the amounts owed
to them as of December 31, 2014, as Advances were as follows:
Name
|
|
Amount
|
Charles S. Conoley
|
|
$
|
15,000.00
|
|
Estate of C. Donald Miller, Jr.
|
|
|
5,000.00
|
|
Michael Shannon Glasgow
|
|
|
5,000.00
|
|
Barclay Kirkland, DDS
|
|
|
5,000.00
|
|
Estate of David K. Scherer
|
|
|
5,000.00
|
|
Elizabeth Thomason, DMD
|
|
|
5,000.00
|
|
Mary Ann P. Turner
|
|
|
5,000.00
|
|
Clarence R. Urban
|
|
|
5,000.00
|
|
Total
|
|
$
|
50,000.00
|
|
As reported in Item 7 above, all Advances were repaid in October
2015 from the proceeds of sale of the Building.
Director Independence
All of the directors, except
for Charles S. Conoley, are “independent” directors, as such term is defined in Rule 10A-3(b)(1) under the Exchange
Act. All other directors, except for Barclay Kirkland, DDS, serve on each of our Audit and Compliance Committee.
See
Item
10, “Directors, Executive Officers and Corporate Governance” for more information on the independence of our directors.
ITEM 14. Principal Accountant Fees and Services
GSK served as our independent
registered public accounting firm for the fiscal periods ended December 31, 2014 and December 31, 2015.
Audit Fees
Audit fees are those fees
billed for professional services rendered for the audit of the annual financial statements and review of the financial statements
included in Forms 10-Q. The aggregate amount of the audit fees billed by GSK for 2014 was $10,000. Audit fees billed by GSK for
2015 were $10,000.
Audit-related Fees
No audit-related fees were billed by GSK for
2014 or 2015.
Tax Fees
Tax fees are those fees
billed for professional services rendered for tax compliance, including preparation of corporate federal and state income tax returns
and related compliance. No tax fees were billed by GSK for 2014 or 2015.
All Other Fees
None
Audit and Compliance Committee
Our board of directors
and Audit and Compliance Committee approved the services rendered and fees charged by our independent auditors. The Audit and Compliance
Committee has reviewed and discussed our audited financial statements for the years ended December 31, 2014 and 2015 with our management.
In addition, the Audit and Compliance Committee has discussed the financial statements for 2014 and 2015 with GSK as required under
PCAOB standards.
Based on the Audit and
Compliance Committee’s review of the matters noted above and its discussions with our independent auditors and our management,
the Audit and Compliance Committee recommended to the board of directors that the audited financial statements be included in our
Annual Report on Form 10-K for the year ended December 31, 2015.
Policy for Pre-Approval of Audit and Non-Audit
Services
The Audit and Compliance
Committee’s policy is to pre-approve all audit services and all non-audit services that our independent auditor is permitted
to perform for us under applicable federal securities regulations. As permitted by the applicable regulations, the Audit and Compliance
Committee’s policy utilizes a combination of specific pre-approval on a case-by-case basis of individual engagements of the
independent auditor and general pre-approval of certain categories of engagements up to predetermined dollar thresholds that are
reviewed annually by the Audit and Compliance Committee. Specific pre-approval is mandatory for the annual financial statement
audit engagement, among others.
The pre-approval policy
was implemented effective as of September 2004. All engagements of the independent auditor to perform any audit services and non-audit
services since that date have been pre-approved by the Audit and Compliance Committee in accordance with the pre-approval policy.
The policy has not been waived in any instance. All engagements of the independent auditor to perform any audit services and non-audit
services prior to the date the pre-approval policy was implemented were approved by the Audit and Compliance Committee in accordance
its normal functions.
ITEM 15. Exhibits and Financial Statement Schedules
Exhibit No.
|
|
Description
|
3.1
|
|
Fourth Amended and Restated Articles of Incorporation. (1)
|
3.2
|
|
Amended and Restated By-Laws. (2)
|
31.1
|
|
Certifications of Chief Executive Officer required by Rule 13(a)-14(a).
|
31.2
|
|
Certifications of Chief Financial Officer required by Rule 13(a)-14(a).
|
32.1
|
|
Certifications pursuant to Section 906 of the Sarbanes Oxley Act of 2002.
|
_________________
(1)
|
Incorporated herein by reference to Exhibit 3.1 to Current Report on Form 8-K, filed on June 15, 2013.
|
(2)
|
Incorporated herein by reference to Exhibit 2.2 to Registration Statement on Form SB-1 (File No. 333-71773), filed on February 9, 1999.
|
SIGNATURES
Pursuant to the requirements
of Section 13 or 15(d) 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.
MANASOTA GROUP, INC.
Registrant
BY:
|
/S/ Charles S. Conoley
|
|
|
Charles S. Conoley, President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
/S/ Kathleen M. Jepson
|
|
|
Kathleen M. Jepson, Acting Chief
|
|
|
Financial Officer
|
|
|
(Principal Financial Officer and Principal Accounting Officer)
|
|
Date: October 7, 2016
Pursuant to the requirements of the Securities
Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities
and on the dates indicated:
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/S/ Charles S. Conoley
|
|
President, Chief Executive Officer and Director
|
|
October 7,
2016
|
Charles S. Conoley
|
|
|
|
|
|
|
|
|
|
/S/ Michael Shannon Glasgow
|
|
Director
|
|
October 7, 2016
|
Michael Shannon Glasgow
|
|
|
|
|
|
|
|
|
|
/S/ Barclay Kirkland, DDs
|
|
Director
|
|
October 7, 2016
|
Barclay Kirkland, D.D.S.
|
|
|
|
|
|
|
|
|
|
/S/ Bruce E. Shackelford
|
|
Director
|
|
October 7, 2016
|
Bruce E. Shackelford
|
|
|
|
|
|
|
|
|
|
/S/ Clarence R. Urban
|
|
Director
|
|
October 7, 2016
|
Clarence R. Urban
|
|
|
|
|
MANASOTA
GROUP, INC.
F/k/a
horizon bancorporation, inc.
BRADENTON,
FLORIDA
FINANCIAL STATEMENTS
FOR THE YEARS ENDED
DECEMBER 31, 2015 AND 2014
TABLE OF CONTENTS
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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F-1
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FINANCIAL
STATEMENTS
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Balance
Sheets
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F-2
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Statements
of Operations
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F-3
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Statements
of Changes in Shareholders’ Equity/(Deficit)
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F-4
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Statements
of Cash Flows
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F-5
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Notes
to Financial Statements
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F-6
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
To the Board of Directors and Stockholders of Manasota Group, Inc.
We have audited the accompanying balance sheets
of Manasota Group, Inc.as of December 31, 2015 and 2014 and the related statements of operations, stockholders’ equity (deficit),
and cash flows for each of the years in the two year period ended December 31, 2015. Manasota Group, Inc.’s. management is
responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with
the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company
is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included
consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purposes of expressing an opinion on the effectiveness of the Company’s internal control over
financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence
supporting the amount and disclosures in the financial statements, assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements referred
to above present fairly, in all material respects, the financial position of Manasota Group, Inc. as of December 31, 2015 and 2014,
and the results of its operations and its cash flows for each of the years in the two year period ended December 31, 2015 in conformity
with accounting principles generally accepted in the United States of America.
The accompanying financial statements have
been prepared assuming the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company
sold its significant operating asset and has subsequently has had no operating activity and has a net capital deficiency which
raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding these matters are also
described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Goldstein Schechter Koch P.A.
Fort Lauderdale, Florida
October 7, 2016
MANASOTA GROUP, INC.
F/K/A HORIZON BANCORPORATION, INC.
BRADENTON, FLORIDA
Balance Sheets
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As of December 31,
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2015
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2014
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ASSETS
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|
|
|
|
|
|
|
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Cash
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$
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48,616
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|
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$
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4,214
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|
Other assets
|
|
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50
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|
|
|
50
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|
Deferred tax asset, net
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|
|
0
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|
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365,352
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|
Discontinued operations - asset
|
|
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0
|
|
|
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1,120,189
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|
Total Assets
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$
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48,666
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|
|
$
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1,490,189
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LIABILITIES & SHAREHOLDERS’ EQUITY/(DEFICIT)
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Liabilities:
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Accrued expenses
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$
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8,516
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$
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18,831
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Note payable
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0
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1,449,609
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Line of Credit
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0
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3,000
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Advances from related parties
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0
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50,000
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Total Liabilities
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8,516
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1,521,440
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Shareholders’ Equity/(Deficit):
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Preferred stock, $.01 par value, 1,000,000 shares authorized; zero shares issued and outstanding
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|
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—
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—
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Common stock, $.01 par value, 25,000,000 shares authorized; 1,809,912 issued and 1,770,139 outstanding at December 31, 2015 and 2014
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18,099
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|
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18,099
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Paid-in-capital
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10,428,214
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10,428,214
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Retained (deficit)
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(9,926,770
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)
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(9,998,171
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)
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519,543
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448,142
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Less Treasury stock: 39,773 shares
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(479,393
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)
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(479,393
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)
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Total Shareholders’ Equity/(Deficit)
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40,150
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(31,251
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)
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Total Liabilities and Shareholders’ Equity/(Deficit)
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$
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48,666
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$
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1,490,189
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The accompanying notes are an integral part
of these financial statements
MANASOTA GROUP, INC.
F/K/A HORIZON BANCORPORATION, INC.
BRADENTON, FLORIDA
Statements of Operations
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Year Ended December 31,
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2015
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2014
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Income
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|
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Other miscellaneous income
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$
|
9,069
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$
|
236
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|
Total income
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9,069
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|
236
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|
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Operating Expenses
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Interest expense on note
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64,424
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76,886
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General and administrative expenses
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113,345
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15,344
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Total operating expenses
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177,769
|
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92,230
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|
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|
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|
|
|
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Income (loss) from continuing operations before income taxes
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|
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(168,700
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)
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(91,994
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)
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Income tax provision (benefit)
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|
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(66,636
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)
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|
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(36,338
|
)
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Income (loss) from continuing operations
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(102,064
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)
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(55,656
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)
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Discontinued operations
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Income from discontinued operations - including gain from sale of property
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1,094,487
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120,735
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Income tax provision (benefit)
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442,679
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47,690
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Income from discontinued operations
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651,808
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73,045
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|
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Net income
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$
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549,744
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$
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17,389
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Basic and diluted net income (loss) per common share:
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Net income (loss) from continuing operations
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$
|
(0.06
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)
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$
|
(0.03
|
)
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Net income from discontinued operations
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0.25
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|
|
|
0.03
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$
|
0.31
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|
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$
|
0.01
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Weighted average number of shares outstanding
|
|
|
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|
|
|
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Basic and diluted
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1,779,139
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|
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|
1,779,139
|
|
The accompanying notes are an integral part
of these financial statements
MANASOTA GROUP, INC.
F/K/A HORIZON BANCORPORATION, INC.
BRADENTON, FLORIDA
Statements of Changes in Shareholders’
Equity/(Deficit)
For the years ended December 31, 2015 and
2014
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|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
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Paid in
|
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Retained
|
|
Treasury
|
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Shares
|
|
Par Value
|
|
Capital
|
|
Earnings/(Deficit)
|
|
Stock
|
|
Total
|
Balance December 31 , 2013
|
|
|
1,809,912
|
|
|
$
|
18,099
|
|
|
$
|
10,428,214
|
|
|
$
|
(10,015,560
|
)
|
|
$
|
(479,393
|
)
|
|
$
|
(48,640
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,389
|
|
|
|
|
|
|
|
17,389
|
|
Balance December 31, 2014
|
|
|
1,809,912
|
|
|
$
|
18,099
|
|
|
$
|
10,428,214
|
|
|
$
|
(9,998,171
|
)
|
|
$
|
(479,393
|
)
|
|
$
|
(31,521
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends paid
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(478,343
|
)
|
|
|
|
|
|
|
(478,343
|
)
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
549,744
|
|
|
|
|
|
|
|
549,744
|
|
Balance December 31, 2015
|
|
|
1,809,912
|
|
|
$
|
18,099
|
|
|
$
|
10,428,214
|
|
|
$
|
(9,926,770
|
)
|
|
$
|
(479,393
|
)
|
|
$
|
40,150
|
|
The accompanying notes are an integral part
of these financial statements
MANASOTA GROUP, INC.
F/K/A HORIZON BANCORPORATION, INC.
BRADENTON, FLORIDA
Statements of Cash Flows
|
|
2015
|
|
2014
|
|
|
|
|
|
Net income
|
|
$
|
549,744
|
|
|
$
|
17,389
|
|
Less: income from discontinued operations
|
|
|
(651,808
|
)
|
|
|
(73,045
|
)
|
Net income from continuing operations
|
|
|
(102,064
|
)
|
|
|
(55,656
|
)
|
|
|
|
|
|
|
|
|
|
Adjustments to reconcile net income (loss) from continuing operations to net cash provided (used) by operating activities
|
|
|
|
|
|
|
|
|
Changes in deferred tax asset
|
|
|
365,352
|
|
|
|
11,353
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Other assets
|
|
|
0
|
|
|
|
10,631
|
|
Accrued expenses
|
|
|
(10,315
|
)
|
|
|
(15,529
|
)
|
Net cash provided (used) by operating activities - continuing operations
|
|
|
252,973
|
|
|
|
(49,201
|
)
|
Net cash provided (used) by operating activities - discontinued operations
|
|
|
(327,619
|
)
|
|
|
100,933
|
|
Net cash used in operating activities
|
|
|
(74,646
|
)
|
|
|
51,732
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
Net cash provided by discontinued operations - Proceeds from sale of land and building
|
|
|
2,100,000
|
|
|
|
0
|
|
Net cash provided by investing activities
|
|
|
2,100,000
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
Repayment on advance from related party
|
|
|
(50,000
|
)
|
|
|
(7,224
|
)
|
Cash dividends
|
|
|
(478,343
|
)
|
|
|
0
|
|
Payment of note payable
|
|
|
(1,449,609
|
)
|
|
|
(20,492
|
)
|
Repayment on line of credit
|
|
|
(3,000
|
)
|
|
|
(20,560
|
)
|
Net cash used in financing
activities - continuing operations
|
|
|
(1,980,952
|
)
|
|
|
(48,276
|
)
|
|
|
|
|
|
|
|
|
|
Net increase in cash
|
|
|
44,402
|
|
|
|
3,456
|
|
Cash beginning of year
|
|
|
4,214
|
|
|
|
758
|
|
Cash end of year
|
|
$
|
48,616
|
|
|
$
|
4,214
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
Cash paid for interest
|
|
$
|
64,424
|
|
|
$
|
76,886
|
|
The accompanying notes are an integral part
of these financial statements
Manasota Group, Inc.
f/k/a Horizon Bancorporation, Inc.
Notes to Financial Statements
December 31, 2015 and 2014
Note 1 - Organization and Summary of Significant
Accounting Policies
MANASOTA GROUP, Inc. f/k/a HORIZON BANCORPORATION,
Inc, Bradenton, Florida (the “Company”) was a one-bank holding company with respect to Horizon Bank, Bradenton, Florida
(the “Bank”). The Company commenced banking operations on October 25, 1999 when the Bank opened for business. On
September 10, 2010, the Company ceased to be a bank holding company when the Florida Office of Financial Regulation (the “OFR”)
closed the Bank and the Federal Deposit Insurance Corporation (the “FDIC”) was appointed as receiver. The FDIC sold
the Bank to the Bank of the Ozarks. The Bank was primarily engaged in the business of obtaining deposits and providing commercial,
consumer, and real estate loans to the general public. Bank deposits were each insured up to $250,000 by the FDIC subject
to certain limitations. Until September 29, 2015, the Company’s sole asset was the building located at 900 53
rd
Ave E, Bradenton, FL. The building was leased to Bank of the Ozarks under a 3-year lease which expired on September 10, 2013. Subsequently
the building was leased to 1
st
Manatee Bank in December of 2013 under a three year lease with an option to purchase.
On September 29, 2015 the Building was sold to 1
st
Manatee Bank for $2.1 million.
The Company is authorized to issue up to 25.0
million shares of its $.01 par value per share common stock. Each share is entitled to one vote and shareholders have
no preemptive or conversion rights. As of December 31, 2015 and 2014 there were 1,809,912 shares of the Company’s
common stock issued outstanding. As of December 31, 2015 and 2014 the Company held 39,773 shares of treasury stock. Additionally,
the Company is authorized to issue up to 1.0 million shares of its $.01 par value per share preferred stock, which may be designated
by the Company’s Board, without further action by the shareholders, for any proper corporate purpose with preferences, voting
powers, conversion rights, qualifications, special or relative rights and privileges which could adversely affect the voting power
or other rights of shareholders of common stock. As of December 31, 2015 and 2014, there was no designated preferred
stock and no shares issued or outstanding.
Use of Estimates.
The accounting
and reporting policies of the Company conform to U.S. generally accepted accounting principles. In preparing the financial statements,
management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ significantly from those estimates.
Concentration of Credit Risk.
Cash is
maintained at a major financial institution and, at times, balances may exceed federally insured limits. The Company has never
experienced any losses related to these balances. The Company has not experienced any losses in such accounts and believes that
it is not exposed to any significant credit risk on the accounts. As of December 31, 2015, all non-interest bearing checking accounts
were FDIC insured to a limit of $250,000. The Company did not have any interest-bearing accounts at December 31, 2015 and 2014,
respectively.
Manasota Group, Inc.
f/k/a Horizon Bancorporation, Inc.
Notes to Financial Statements
December 31, 2015 and 2014
Property
.
The Company’s
property consisted of land, a building and building improvements and was stated at cost. The straight-line method was used in computing
depreciation over the estimated useful lives of the building and improvements of 10 to 40 years. Expenditures which significantly
increase values or extend useful lives are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred.
Upon sale or retirement of property the cost and related accumulated depreciation are eliminated from the respective accounts and
the resulting gain or loss is included in the current earnings.
The Company follows the provisions of FASB
ASC Topic 360, Property, Plant and Equipment, which establishes accounting standards for the impairment of long-lived assets such
as property and equipment. The Company reviews long-lived assets to be held-and-used for impairment whenever events or changes
in circumstances indicate that the carrying amount of the assets may not be recoverable. If the sum of the undiscounted expected
future cash flows over the remaining useful life of a long-lived asset group is less than its carrying amount, the asset is considered
to be impaired. An impairment loss is recognized when management’s estimate of fair value, through outside consultation or
internal assessment of value is less than its carrying amount. There were no impairment charges for the years ended December 31,
2015 and 2014 related to these long-lived assets.
Income Taxes.
Income taxes are accounted
for using an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected
future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities
and their respective tax bases. A valuation allowance is provided when it is more likely than not that some portion or the entire
deferred tax asset will not be realized. A tax position is recognized as a benefit only if it is “more likely than not”
that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized
is the largest amount of tax benefit that is greater than 50 percent of being realized on examination. For tax positions not meeting
the “more likely than not” test, no tax benefit is recorded. The Company is no longer subject to examination by U.S.
taxing authorities for years prior to 2010.
Sales Taxes.
Amounts collected on behalf
of governmental authorities for sales taxes and other similar taxes are reported on a net basis.
Revenue Recognition.
The Company recognizes
its rental revenues based on the terms on its signed lease with tenant on a straight-line basis.
Earnings Per Share.
Basic
earnings per share are determined by dividing net income by the weighted-average number of common shares outstanding. Diluted
income per share is determined by dividing net income by the weighted average number of common shares outstanding increased by
the number of common shares that would be issued assuming exercise of stock options. This also assumes that only options
with an exercise price below the existing market price will be exercised. In computing net income per share, the Company
uses the treasury stock method.
Manasota Group, Inc.
f/k/a Horizon Bancorporation, Inc.
Notes to Financial Statements
December 31, 2015 and 2014
Reclassification
. Certain reclassifications
have been made to the prior period’s financial statements to conform to the current period’s presentation.
Subsequent Events
. Management has
evaluated subsequent events through October 7, 2016, the date the financial statements were issued
.
Note 2 – Recently Issued Accounting
Pronouncements
The Company’s management does not believe
that any recent codified pronouncements by the Financial Accounting Standards Board (“FASB”) will have a material impact
on the Company’s financial statements.
Note 3 – Going Concern
The accompanying financial statements and notes
have been prepared assuming that the Company will continue as a going concern.
The Company sold its significant operating
asset and has had no operating activity subsequent to September 29, 2015. There are no assurances that the Company will be able,
in the next twelve months, to either (1) consummate a business combination transaction with a privately-owned business seeking
to become a public company and, if successful in such consummation, achieve a level of revenues adequate to generate sufficient
cash flow from operations; or (2) otherwise obtain additional financing through either private placements, public offerings and/or
bank financing necessary to support the Company’s current working capital requirements and to retire existing liabilities and obligations,
if any, on a timely basis. To the extent that funds generated from any private placements, public offerings and/or bank
financing are insufficient to support the Company, the Company will have to raise additional working capital. No assurance
can be given that additional financing will be available, or if available, will be on terms acceptable to the Company.
If, during the next twelve months, a business
combination is not consummated and no additional operating capital is received, the Company will be forced to rely on existing
cash on hand and upon additional funds loaned by management and/or significant stockholders to preserve the integrity of the corporate
entity. In the event, the Company is unable to acquire advances from management and/or significant stockholders, who
have no legal obligation to provide any further funding, the Company may not continue its operations.
Manasota Group, Inc.
f/k/a Horizon Bancorporation, Inc.
Notes to Financial Statements
December 31, 2015 and 2014
Note 4 – Discontinued Operations and Gain on Sale of Property
On September 29, 2015, the Company completed
the sale of a building and land to the lessee for a total sale price of $2,100,000. The Company recognized a gain on the sale of
approximately $1.0 million. At the time of the sale, the Company paid off the principal balance of the mortgage note secured by
the property and accrued interest totaling approximately $1,432,000.
Discontinued operations - assets consisted of the following as of
December 31:
|
|
2015
|
|
2014
|
Land
|
|
$
|
0
|
|
|
$
|
395,035
|
|
Building & building improvements
|
|
|
0
|
|
|
|
1,104,951
|
|
Property, gross
|
|
|
0
|
|
|
|
1,499,986
|
|
Deduct:
|
|
|
|
|
|
|
|
|
Accumulated depreciation
|
|
|
0
|
|
|
|
(379,413
|
)
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
0
|
|
|
$
|
1,120,573
|
|
The building served as collateral on the note
disclosed in note 4.
Depreciation expense for each of the years
ended December 31, 2015 and 2014 amounted to $20,917 and $27,889, respectively.
The pre-tax gain on sale of property was calculated
as follows:
Land
|
|
$
|
395,035
|
|
Building & building improvements
|
|
|
1,104,951
|
|
Property, gross
|
|
|
1,499,986
|
|
Deduct:
|
|
|
|
|
Accumulated depreciation at September 29, 2015
|
|
|
(400,330
|
)
|
Property, net
|
|
$
|
1,099,656
|
|
|
|
|
|
|
Proceeds from sale of land and building
|
|
$
|
2,100,000
|
|
Deduct Property, net
|
|
|
1,099,656
|
|
Gain on sale
|
|
$
|
1,000,344
|
|
Costs associated with the sale were approximately
$97,000.
Manasota Group, Inc.
f/k/a Horizon Bancorporation, Inc.
Notes to Financial Statements
December 31, 2015 and 2014
The components of the income from discontinued operations consisted
of the following for the years ended December 31:
|
|
2015
|
|
2014
|
Rental income
|
|
$
|
115,059
|
|
|
$
|
148,624
|
|
Gain on sale of land and building
|
|
|
1,000,344
|
|
|
|
0
|
|
Depreciation
|
|
|
(20,917
|
)
|
|
|
(27,889
|
)
|
Net income from discontinued operations
|
|
$
|
1,094,486
|
|
|
$
|
120,735
|
|
Note 5 – Long Term Debt
The Company’s long term debt consists
of a mortgage note with a financial institution. The note was amended in July 2012. The note bears interest at 5.50%, and required
monthly payments of principal and interest of $9,369 through July 2013 and the remaining balance and accrued interest due August
2013. In August of 2013 the Company entered into negotiations to renew the note during which the Company paid interest only on
the note. The debt is secured by the building and an assignment of leases arising from the operation of the building. At December
31, 2015 and 2014, the outstanding balance on the note was zero and $1,449,609 respectively.
In September 2015, the Company sold the building
and paid off the remaining mortgage balance which at that time was approximately $1,428,000.
Note 6 - Related Party Transactions
The Company’s former directors and a
partnership related to certain former directors advanced funds to the Company in 2010. These advances were unsecured, are due on
demand and do not bear interest. Mr. Conoley advanced the Company $10,000 in the fourth quarter of 2013. This advance has an interest
rate of 3.25% (Published prime rate at that time). The total balance of the advances from related parties at December 31, 2015
and 2014 was zero and $50,000, respectively
Note 7 – Leasing Activities
The Company leased its building to one tenant
under an operating lease that expired in September 2013. Subsequent to the expiration of that lease the Company entered into a
new three year lease with a different tenant with lease payments of $12,320 per month to be paid beginning in January, 2014 with
the December, 2013 payment being made in January. This lease terminated when the building was sold on September 29, 2015.
Manasota Group, Inc.
f/k/a Horizon Bancorporation, Inc.
Notes to Financial Statements
December 31, 2015 and 2014
Note 8 – Provision for Federal &
State Income Taxes
The
company’s provision (benefit) for income taxes from continuing operations was as follows:
|
|
2015
|
|
2014
|
Current
|
|
|
|
|
|
|
|
|
Federal
|
|
|
(57,358
|
)
|
|
|
(31,278
|
)
|
State
|
|
|
(9,278
|
)
|
|
|
(5,060
|
)
|
|
|
|
(66,636
|
)
|
|
|
(36,338
|
)
|
Deferred
|
|
|
|
|
|
|
|
|
Federal
|
|
|
0
|
|
|
|
0
|
|
State
|
|
|
0
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
(66,636
|
)
|
|
|
(36,338
|
)
|
The company’s provision (benefit) for income taxes from discontinued
operations was as follows:
|
|
2015
|
|
2014
|
Current
|
|
|
|
|
|
|
|
|
Federal
|
|
|
381,040
|
|
|
|
41,050
|
|
State
|
|
|
61,639
|
|
|
|
6,640
|
|
|
|
|
442,679
|
|
|
|
47,690
|
|
Deferred
|
|
|
|
|
|
|
|
|
Federal
|
|
|
0
|
|
|
|
0
|
|
State
|
|
|
0
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
442,679
|
|
|
|
47,690
|
|
Manasota Group, Inc.
f/k/a Horizon Bancorporation, Inc.
Notes to Financial Statements
December 31, 2015 and 2014
The income tax provision differs from the amount of tax determined
by applying the Federal statutory rate as follows:
|
|
2015
|
|
2014
|
Income tax provision/(benefit) at statutory rate:
|
|
|
314,877
|
|
|
|
9,921
|
|
Increase (decrease) in income tax due to:
|
|
|
|
|
|
|
|
|
State income taxes net
|
|
|
52,360
|
|
|
|
1,580
|
|
Alternative minimum tax
|
|
|
10,816
|
|
|
|
|
|
Other adjustments
|
|
|
(2,019
|
)
|
|
|
(148
|
)
|
Change in Valuation Allowance
|
|
|
0
|
|
|
|
0
|
|
|
|
|
376,034
|
|
|
|
11,353
|
|
Net deferred tax assets and liabilities were comprised of the following:
|
|
2015
|
|
2014
|
Long-term deferred tax assets (liabilities)
|
|
|
|
|
|
|
|
|
Fixed assets
|
|
|
(11,148
|
)
|
|
|
(11,148
|
)
|
Net Operating Loss
|
|
|
4,156,191
|
|
|
|
4,521,672
|
|
Total deferred tax asset
|
|
|
4,145,173
|
|
|
|
4,510,524
|
|
|
|
|
|
|
|
|
|
|
Valuation Allowance
|
|
|
(4,145,173
|
)
|
|
|
(4,145,172
|
)
|
|
|
|
0
|
|
|
|
365,352
|
|
In assessing the realizability of deferred
tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not
be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during
the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred
tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. As of December 31,
2015, based upon the levels of historical taxable income and projections of future taxable income over which the deferred tax assets
are deductible, the Company believes that it is more likely than not that it will not be able to realize the benefits of these
deductible differences. Accordingly, a valuation allowance of approximately $4,145,000 has been provided in the accompanying
financial statements as of December 31, 2015.
At December 31, 2015, the Company has federal
and state tax net operating loss carryforwards of approximately $10,523,800 and $11,449,000, respectively. The federal tax
loss carryforward will expire through 2031, unless previously utilized. The state tax loss carryforward will expire through
2029, unless previously utilized.
Manasota Group, Inc.
f/k/a Horizon Bancorporation, Inc.
Notes to Financial Statements
December 31, 2015 and 2014
Note 9 – Subsequent Events
Effective March 21, 2016, the Company issued
an aggregate of 2,000,000 shares of the Company’s Common Stock, $.01 par value, to four existing shareholders for the purchase
price of $.01 per share. The total consideration received by the Company was $20,000 in cash.