SEC Info - Lookaway Partners - ‘10KSB’ for 12/31/96

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Lookaway Partners – ‘10KSB’ for 12/31/96

As of: Tuesday, 3/31/98 · For: 12/31/96 · Accession #: 950116-98-756 · File #: 333-06354

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 3/31/98  Lookaway Partners                 10KSB      12/31/96    1:111K                                   St Ives Financial/FA

Annual Report — Small Business — Form 10-KSB
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10KSB       Annual Report -- Small Business                       44    176K

Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) Business Certain Relationships and Related Transactions Changes in and Disagreements With Accountants or Accounting and Financial Disclosure Construction Financing Construction Plan Directors, Executive Officers, Promoters and Control Persons; Compliance With Section 16(A) of the Exchange Act Executive Compensation Exhibits and Reports on Form 8-K Financial Statements Legal Proceedings Limited Partners Management's Discussion and Analysis or Plan of Operation Market for Registrant's Common Equity and Related Stockholder Matters Properties Risk Factors Security Ownership of Certain Beneficial Owners and Management Submission of Matters to A Vote of Security Holders
1	1st Page - Filing Submission
3	Item 1. Business
4	Construction Plan
5	Construction Financing
6	Risk Factors
9	Item 2. Properties
11	Item 3. Legal Proceedings
"	Item 4. Submission of Matters to A Vote of Security Holders
"	Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
13	Item 6. Management's Discussion and Analysis or Plan of Operation
14	Item 7. Financial Statements
18	Limited Partners
37	Item 8. Changes in and Disagreements With Accountants or Accounting and Financial Disclosure
"	Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance With Section 16(A) of the Exchange Act
41	Item 10. Executive Compensation
"	Item 11. Security Ownership of Certain Beneficial Owners and Management
"	Item 12. Certain Relationships and Related Transactions
42	Item 13. Exhibits and Reports on Form 8-K

10KSB 1st Page of 44 TOC ↑Top Previous Next ↓Bottom Just 1st
 
FORM 10-KSB 

SECURITIES AND EXCHANGE COMMISSION  

WASHINGTON, DC 20549  
(Mark One)                                                                      

|X|   ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT    
OF 1934                                                             

For the fiscal year ended                  DECEMBER 31, 1997                    
                           -----------------------------------------------------

OR  

| |   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934.                                                            

For the transition period from_____________________ to _________________________

Commission file number    SECURITIES ACT FILING 333-6454                        
                      ----------------------------------------------------------

LOOKAWAY PARTNERS 
--------------------------------------------------------------------------------
(Name of Small Business Issuer in Its Charter)  

   PENNSYLVANIA                                   23-2799318
-------------------------------------------        -----------------------------
(State or Other Jurisdiction of                      (I.R.S. Employer   
Incorporation or Organization                        Identification No.)

4219 UPPER MOUNTAIN ROAD, BUCKINGHAM, PA                   18912            
-------------------------------------------        -----------------------------
(Address of Principal Executive Offices)                  (Zip Code)        

Issuer's Telephone Number   215-794-5727                                        
                          ------------------------------------------------------

Securities registered under Section 12(b) of the Exchange Act:                  

                                                 Name of Each Exchange
    Title of Each Class                          On Which Registered
     -------------------                         ---------------------

NONE                                          
-------------------------------------------        -----------------------------

Securities registered under Section 12(g) of the Exchange Act:  

NONE  
--------------------------------------------------------------------------------
(Title of Class)  

     Check whether the issuer (1) filed all exports required to be filed
by Section 12 or 15(d) of the Exchange Act during the past 12 months (or for    
such shorter period that the registrant was required to file such reports),     
and (2) has been subject to such filing requirement for past 90 days.           

Yes______X______    No _____________                                            

10KSB 2nd Page of 44 TOC 1st Previous Next ↓Bottom Just 2nd
     Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B is not contained in this form, and no disclosure     
will be contained, to the best of registrant's knowledge, in definitive proxy   
of information statements incorporated by reference in Part III of the Form     
10-KSB. [   ]                                                                   

     The issuer's revenues for its most recent fiscal year were $96,060.

       The aggregate market value of the voting and non-voting common equity
held by the 203 non-affiliated limited partners of the Partnership, computed    
by reference to the current price at which the registrant's limited             
partnership interests are offered for sale, is $12,180,000.                     

DOCUMENTS INCORPORATED BY REFERENCE 

NONE  

-2- 

10KSB 3rd Page of 44 TOC 1st Previous Next ↓Bottom Just 3rd
ITEM 1.  BUSINESS                                                               

(a)      Business Development                                                   

Lookaway Partners (the "Partnership") is a Pennsylvania limited partnership     
organized in November 1995 to pursue the development of a premier 18 hole,      
limited membership golf course and related facilities (the "Club"). As of       
February 2, 1998, the Partnership had a total of 218 Limited Partners, as       
compared to the anticipated maximum of 229 Limited Partners. No assurances can  
be given that the Partnership will not determine to increase its membership     
beyond 229 Limited Partners. The 25 Founders are also the shareholders in the   
corporation (the "General Partner" or alternatively the "Corporation") that is  
the general partner of the Partnership. The directors and officers of the       
General Partner are 14 of the persons known as the Series 1 Founders. Since     
the formation of the Partnership as a Pennsylvania limited partnership on       
November 17, 1995, the Corporation has served as the General Partner of the     
Partnership and is responsible for managing all aspects of the Partnership's    
business.                                                                       

(b)      Business of Issuer                                                     

Between November and December 1995, the Corporation executed five agreements    
to acquire the 217 acres referred to herein as the Buckingham Properties that   
include the site of the Club. Initial funding of $675,000 came from the         
purchase of securities by the 25 Founders, and thereafter, between February     
1996 and March 1997, the Partnership sold an aggregate of 111 Partnership       
Interests in an offering of securities known as the Backers Offering, the       
principal purpose for which was to raise the funds to acquire the Buckingham    
Properties. In February and March 1997, the Partnership acquired for cash fee   
simple title to approximately 203 acres and entered into 99 year ground leases  
for the approximately 16 acres that in the aggregate constitute the Buckingham  
Properties and in connection therewith issued three Partnership Interests to    
certain sellers of the Buckingham Properties.                                   

While conducting the Backers Offering, the Partnership also began to pursue     
obtaining the necessary land use approvals and permits needed for the           
development of the Project. In February 1997, the Partnership received          
conditional final subdivision and land development plan approval from           
Buckingham Township. Initial construction of the golf course, consisting of     
timber clearing, began in March 1997. In October 1997, the Partnership          
received final subdivision and land development plan approval from Buckingham   
Township. As of February 2, 1998, it was anticipated that all 18 holes          
proposed for the golf course will be suitable for limited playing by the        
autumn of 1998, although 10 holes of the golf course may be suitable for        
playing prior to such date. However, no assurances can be given that the        
construction will be completed, or that the opening of the Club will occur or   
will not be delayed.                                                            

The Partnership's sources of cash are (i) the sale of Partnership Interests     
expected to be approximately $9.6 million; (ii) anticipated proceeds in the     
amount of $1.2 million from the sale of six (6) lots (the "Re-Sale Lots")       
acquired as part of one of the Buckingham Properties known as the King          
Property, although no assurances can be given in this regard; and (iii)         
interest income in the amount of approximately $75,000. The Partnership's       
sources of cash are expected to be about $1.75 million less than the projected  
budget for the opening of the Club. The Partnership anticipates making up this  
shortfall by borrowing.                                                         

The budget for the entire project from inception to the opening of the Club is  
anticipated to be approximately $12.65 million. No assurances can be given      
that the Partnership has not materially underestimated the amount of funds      
needed to open the Club. The projected budget as of February 2, 1998 is as      
follows:                                                                        

Land:                                                                 
Golf Course         $2,990,000  
Lots (6)               830,000  
                   Closing Costs           68,266           $3,888,266
               -------------
          Engineering Fees:                                    400,000
          Legal Fees                                           180,000
Architectural Fees:                               
Golf Course            405,000  
                   Clubhouse               95,000              500,000
                --------------

          Golf Course Construction                           4,070,161

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   Clubhouse Renovations                             1,950,000
   Maintenance Building                                210,000
   Course Equipment                                    370,000
   Membership/Marketing                                300,000
   Furniture/Fixtures                                  250,000
   Interest Expense                                     65,000
   Operating and Miscellaneous Expenses                417,500
   Contingency                                          51,073
                                                    ----------

                               Projected Budget:     $12,652,000

Construction Plan                                                               

The Partnership has secured the services of Rees Jones, a prominent golf        
course architect, to develop the layout of the Club and to design a golf        
course which is intended to be comparable to renowned golf courses. In October  
1997, the Partnership received final subdivision and land development plan      
approval for the construction of the golf course from Buckingham Township.      

The final approval provides that the land development plans are legended with   
reference to the Partnership's authorization to remove trees over and above     
the Township's ordinance limiting tree removal to a certain standard. The       
legend shall provide that in the event that the property is ever put to any     
other use other than a golf course, the base site area calculation shall be     
reduced by double the amount of tree removal in excess of this standard. In     
addition, the steep slope zoning requirement relief granted to the Partnership  
by the Zoning Hearing Board in its decision of September 16, 1996 applies only  
for so long as the property is being used as a golf course. The final approval  
also provides that the clubhouse is to be considered an accessory building and  
that it shall not be open to the public for purposes of a restaurant or         
similar facility but is limited to members and their guests. The final          
approval also provides that, prior to the issuance of a certificate of          
occupancy, the parties are to develop a set of restrictions covering the use    
of the clubhouse and grounds that limit the use of the property for wedding     
receptions and other such events that would attract large numbers of people.    
In connection with obtaining this final approval, the Partnership agreed to     
accept certain treated waste water from the Township to irrigate the golf       
course.                                                                         

It is presently anticipated that all 18 holes proposed for the golf course      
will be suitable for playing in the autumn of 1998, although 10 holes of the    
golf course may be suitable for playing prior to such date. The Partnership     
believes that these dates are attainable, but these dates are dependent upon    
many factors beyond control of the Partnership including the reliability and    
schedules of contractors and subcontractors, as well as weather conditions.     
These dates are also subject to the availability of construction financing,     
the sale of the remaining Units in the Partnership's offering of Partnership    
Interests, and the sale of the Re-Sale Lots. No assurances can be given that    
the construction will be completed, or that the opening of the Club will occur  
or will not be delayed.                                                         

The clubhouse renovations that are presently contemplated include a             
restoration and expansion of the farmhouse on Lookaway Farm to add a dining     
area to seat 50-60 people, a lounge area and men's and women's locker rooms.    
No assurances can be given that the Partnership has budgeted sufficient funds   
for this construction activity or that all or any of such proposed              
construction and renovations will be commenced or completed.                    

Construction of the golf course and clubhouse renovations and improvements is   
being overseen and directed for the Partnership by a Construction Committee.    
The chairman of the Construction Committee is Robert Jeter. Other members of    
the Construction Committee include Bill Bierlin, Bill Black, Harry Ferguson,    
Larry Mann, Norm Kulujian and Steve Neidhart.                                   

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Construction Financing                                                          

The Partnership has received a loan committment from First Union National Bank  
(the "Bank") for a $3 million construction loan (the "Construction Loan"). The  
construction period shall terminate on the earlier from twelve (12) months      
from closing or the issuance of a certificate of occupancy. Up to $1.75         
million of the Construction Loan may be converted into a term loan with a term  
of five (5) years, inclusive of the construction period. Up to $500,000 of the  
Construction Loan may be in the form of a letter of credit, the term of which   
shall be for twelve (12) months. This letter of credit would be used to         
replace the existing letter of credit on behalf of the Partnership with         
Buckingham Township. The amount of the Construction Loan shall not exceed       
seventy percent (70%) of the market value "as is" for the Partnership's land,   
buildings and improvements. The Construction Loan is to be used to finance the  
completion of the golf course and construction of a new clubhouse.              

The interest rate during the construction period shall be prime less 1/2% or    
LIBOR market index rate plus 2.25 %. During the term loan period, the interest  
rate shall be the same as the foregoing or the Partnership shall have the       
option to do a forward fixed rate hedge until the commencement of the term      
loan. The Partnership will be required to hedge all of the term loan floating   
interest expense by entering into an interest rate swap acceptable to the Bank  
contemporaneously with the closing of the term loan, pursuant to which the      
Partnership shall receive the amount necessary to pay the interest expense due  
under the term loan (exclusive of any default interest, any reserves or other   
adjustments provided for the loan documents) and shall pay the amount that      
would be equal to the interest rate that would accrue on the loan at a fixed    
rate. The Bank is willing to provide a forward swap to the Partnership upon     
mutually agreeable terms.                                                       

The default rate of interest is 3% higher than the interest rate during the     
non-default period. The facility may be prepaid in whole or in part at any      
time without pre-payment penalty or premium. As collateral, the Bank will take  
a first priority mortgage lien on the Partnership's real estate and             
improvements as well as all licenses, permits and approvals. The loan is        
subject to obtaining an appraisal indicating a value satisfactory to the Bank.  
The loan is also subject to an environmental assessment and a number of other   
conditions. The Bank is to receive one hundred percent (100%) of the proceeds   
from the Resale Lots. The loan agreement will be evidenced by loan documents.   
No assurances can be given that a loan agreement with the Bank will be          
executed, on these or any other terms.                                          

Agreement with Rees Jones, Inc.                                                 

The Corporation entered into an agreement (the "Course Agreement") dated March  
17, 1995 with Rees Jones, Inc., Montclair, New Jersey (the "Designer"), a       
corporation controlled by Rees Jones, a renowned golf course architect,         
providing for the design and inspection of the construction of the Club. The    
Course Agreement was assigned to the Partnership at settlement under the        
Lookaway Agreement. Certain of the duties of the Designer under the Course      
Agreement are summarized under "Business - Construction Plan", to which         
reference is made. The Partnership expects that the Designer's work will be     
completed by September 30, 1998.                                                

All plans, working drawings, specifications and sketches remain the property    
of the Designer whether or not the work for which they are made is executed.    
The Designer's performance under the Course Agreement shall be considered       
complete when and if the golf course area has been seeded or planted. The       
Corporation and Partnership have agreed to hold the Designer harmless against   
any liability arising out of the maintenance, operation or use of the Club.     

Agreement with Van Cleef Engineering                                            

The Corporation accepted the Fee Proposal of Van Cleef Engineering Associates   
(the "Engineers") dated July 12, 1995 and revised October 30, 1995 (the "Fee    
Proposal") and has entered into an agreement with such firm for professional    
engineering, land surveying and environmental services. Such agreement was      
assigned to the Partnership at settlement under the Lookaway Agreement. At      
present, the Engineers are working on a per diem basis.                         

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Agreement with Sandra Palmer                                                    

The Partnership has engaged Sandra Palmer to be the Club's golf professional    
in a salaried position at a guaranteed annual compensation of not less than     
$100,000 plus additional compensation through the collection of fees for        
lessons and clinics. The agreement is terminable by either party upon 90 days   
notice.                                                                         

Operation of the Facilities                                                     

Upon completion of construction of the golf course and related practice and     
maintenance facilities and completion of the initial renovations of the         
clubhouse, the Corporation intends to operate the Club on behalf of the         
Partnership. Each Limited Partner will be required to exercise his or her       
Membership Warrant and become a member of the Club, and to pay annual           
membership dues and to abide by the By-laws and other rules and regulations of  
the Club. All such By-laws and other rules and regulations will be subject to   
change from time to time.                                                       

The 1998 annual dues are $4,500 per Limited Partner, payable in two (2)         
installments. The Partnership has not determined the amount of annual dues      
which each person using the Club will be obligated to pay after 1998.           

The Partnership projects that aggregate dues payments, guest fees, transfer     
fees, operating income and other fees will be sufficient to defray              
substantially all maintenance and operating expenses for the Club, although no  
assurances that these projections are accurate can be given. The Partnership    
has the right to assess members in the event of a capital need, and membership  
privileges and Partnership Interests can be lost in the event of a failure to   
pay such assessments. The Partnership intends no less frequently than annually  
to determine the amount to be paid for annual dues based on its estimates of    
actual and projected maintenance and general operating expenses and operating   
revenues, including guest fees, and the number of members.                      

Employees                                                                       

The General Partner is responsible for hiring all personnel which it            
determines to be necessary to support the operation of the Club. Such           
personnel will include, but will not be limited to, a general manager, golf     
professional, head greenskeeper, assistant manager for golf operations and      
their respective support staff. The General Partner estimates that operation    
of the Club will initially entail the employment of six (6) full time persons   
year round, plus up to twenty (20) full time seasonal persons.                  

Competition                                                                     

There are an abundance of private clubs with golf facilities in the             
Southeastern Pennsylvania region encompassing Lancaster, Lebanon, Berks,        
Chester, Delaware, Montgomery, Lehigh, Bucks and Philadelphia Counties, from    
which the Corporation anticipates drawing the majority of its members. Many of  
these clubs offer more extensive facilities than those which the Partnership    
will offer and, in many cases, at a lower price.                                

The Partnership believes that the quality of the golf course design, the        
limitation on the number of members, the absence of athletic facilities         
unrelated to golf, and the emphasis on golf under uncrowded conditions          
distinguishes the Club from most other golf or country clubs in Southeastern    
Pennsylvania.                                                                   

RISK FACTORS  

AN INVESTMENT IN THE UNITS IS SUBJECT TO A RISK AND IS SUITABLE ONLY FOR        
PERSONS OF SUBSTANTIAL FINANCIAL MEANS WHO HAVE NO NEED FOR LIQUIDITY IN THEIR  
INVESTMENT. THE PURCHASE OF A UNIT SHOULD ONLY BE MADE BY PERSONS WHO CAN       
AFFORD TO LOSE THEIR ENTIRE INVESTMENT. THE PARTNERSHIP IS SUBJECT TO ALL OF    
THE RISKS INVOLVED IN THE DEVELOPMENT OF A LARGE REAL ESTATE PROJECT AND IS     
SPECIFICALLY SUBJECT TO ALL OF THE RISKS INVOLVED IN THE DEVELOPMENT AND        
OPERATION OF A GOLF COURSE. PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER     
THE FOLLOWING RISK FACTORS, AMONG OTHERS.                                       

1. Limited Construction Financing; Risk of Foreclosure Upon Real Estate. The    
primary sources of funds to pay for the construction of the Club are (i) the    
sale of the Partnership interests; (ii) to a lesser extent, the sale of the     
Re-Sale Lots; and (iii) an anticipated loan in the amount of $3,000,000, of     
which the Partnership expects to                                                

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borrow approximately $1,750,000, predicated upon the sale of the Re-Sale Lots   
for $1,200,000, as to which there can be no assurances. The Partnership has     
received a commitment letter from First Union National Bank for $3 million of   
borrowing. See "Business--Construction Financing." However, no assurances can   
be given that such borrowings will be consumated. In the event that the         
Partnership is unable to borrow the funds needed, the construction of the golf  
course and club house would be halted or delayed. If the Partnership is able    
to borrow the needed funds, it anticipates that such funds would be repaid      
initially on the basis of a twenty year amortization, over a five year term,    
at which time the balance would be refinanced, or paid off through the sale of  
new memberships, or through other steps. Partners will be required to make      
payments on account of this indebtedness. If the anticipated Partnership bank   
borrowings are not repaid, it is anticipated that the lender would have the     
right to foreclose upon the Partnership property.                               

2. Uncertainties as to Construction Costs; Uncertainty as to Permits. No        
assurances can be given that the projected construction and renovation budget   
will prove to be accurate. Although the Partnership believes that it has        
obtained all permits needed for the construction of the golf course, no         
assurances can be given that additional permitting will not be required. No     
assurances can be given that all permits required for the operation of the      
club will be obtained.                                                          

3. Risks of Delays and Unanticipated Expenses. It is not anticipated that any   
part of the golf course would be playable before August 1998, and the           
completion of all of the 18 holes proposed for the golf course and related      
facilities is not anticipated prior to the autumn of 1998. No assurances can    
be given that unanticipated problems will not arise or that there will not be   
significant delays. No assurances can be given that the golf course will ever   
be completed or that the Club will ever open. See "Business - Construction      
Plan."                                                                          

Apart from the risks associated with funding the development of the Project,    
completion of the construction of the golf course and related practice          
facilities are also subject to factors which may be beyond the control of the   
Partnership, including delays, increases in the cost or the unavailability of   
goods, materials or services, unforeseen problems which require capital         
expenditures to resolve or environmental considerations. Such factors may       
result in increased costs, delays and the corresponding reduction in the        
Partnership's working capital.                                                  

4. Uncertainty as to Amount of Proceeds From The Spin-off of Certain Acreage.   
The Partnership plans to sell six (6) approximately 1.8 acre development lots   
consisting of an aggregate of up to approximately eleven (11) acres. No         
assurances can be given as to the date that the Re-Sale Lots will be available  
for re-sale by the Partnership. No assurances can be given that the             
Partnership will be able to find buyers for the Re-Sale Lots at prices that     
will yield the net proceeds of $1.2 million that has been used for budgeting    
purposes.                                                                       

5. Restrictions on Transferability. An investment in the Units is a long-term   
investment. There are a variety of restrictions upon the transferability of     
the Units:                                                                      

(i) The Partnership's Agreement of Limited Partnership provides that no   
Limited Partner may transfer a Unit without the consent of the Corporation as   
the General Partner of the Partnership, which consent may be arbitrarily        
withheld. Absent extenuating circumstances, the Partnership does not            
anticipate consenting to any transfer of a Unit by sale before 229 Memberships  
are sold. Other restrictions are set forth in the form of Agreement of Limited  
Partnership.                                                                    

(ii) The Partnership Agreement limits the right of a Partner to designate 
another as having the rights, privileges and obligations of Club Membership.    

(iii) It is anticipated that, once the Club is operating, the Partnership 
Interests (and underlying Membership) will be transferable to persons approved  
by the Club's Membership Committee who are on the waiting list. A transfer      
fee, in the amount of 10% of the selling price, or such amount then provided    
for by the By-laws, will be assessed on the seller. The Partnership Agreement   
imposes restrictions on the manner in which a Partnership Interest may be       
sold. No assurances can be given as to the existence of a resale market. An     
investor may not be able to find a buyer for his Partnership Interest. Nor is   
it likely that the Partnership Interests are acceptable collateral to be        
pledged to secure a loan.                                                       

6. Lack of Public Market. The investment represented by a purchase of the       
Units is illiquid and will remain illiquid. There is no public market for the   
Partnership Units or the Partnership Interests, nor is there any expectation    
that one will develop. The Partnership does anticipate establishing a           
mechanism to facilitate and govern the re-sale of                               

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Partnership Interests. An investor in the Units may not be able to sell his or  
her Units readily, if at all, and therefore must be able to bear the economic   
risk of the investment for an indefinite period of time. Although the           
Partnership Interests are transferable under conditions elsewhere described     
(see "Risk Factors - Restrictions on Transferability"), no assurances can be    
given as to the extent, if any, of demand for the Partnership Interests on a    
resale basis.                                                                   

7. Uncertainty As to Amount of Annual Dues. Dues for 1998 are $4,500 per        
Limited Partner. The Partnership has not determined the amount of annual dues   
which each person using the Club will be obligated to pay beyond 1998.          

8. Possibility of Assessments. After the opening of the Club, the Partnership   
may, once the General Partner reasonably determines the Partnership requires    
additional capital to maintain or improve the Club, require additional capital  
from the Limited Partners after the prior written consent of Limited Partners   
holding at least a majority of the outstanding Partnership Interests (other     
than the General Partner and any of its Affiliates, if any of them is a         
Limited Partner). In such event, the Corporation shall notify all Limited       
Partners of their obligation to pay additional funds to the Partnership pro     
rata on the basis of their respective Partnership Interest (an "Assessment").   
If any Limited Partner fails to contribute such additional funds as may be      
required, the other Limited Partners shall have the right, but not the          
obligation, to loan to the Partnership the additional funds required. In the    
absence of any such loan, under the terms of the Partnership Agreement a        
Limited Partner's Interest may be sold as collateral for the obligation to      
satisfy the Assessment. No assurances can be given that Assessments will not    
be imposed.                                                                     

9. Dependence on Key Persons; Lack of Management Experience in Golf Course      
Development. The Project is materially dependent upon the personal efforts and  
abilities of Bruce McKissock, the Corporation's President, as well as Harry     
Ferguson, William Waldman and Martin Woldow. The loss or unavailability of any  
of the foregoing could adversely effect the Project. However, none of the       
officers or directors of the General Partner has any experience in developing   
a golf course, although the Partnership believes that such persons have         
significant relevant experience. No assurances can be given that management's   
lack of experience in developing a golf course will not adversely affect the    
Project.                                                                        

10. Limited Operating Revenues. The Partnership will have limited operating     
revenues after completion of the Project. The Partnership's sources of income   
will be primarily from membership dues and guest fees, and to a lesser extent,  
from membership transfer fees, sale and rental of equipment, and the sale of    
food and beverages. No assurances can be given these sources will generate      
sufficient operating revenues. The Partnership has the right to assess members  
for capital needs.                                                              

11. Limitation on Limited Partner Role. The Limited Partners, as such, are      
restricted from taking part in the management of the Partnership's business,    
which will be vested exclusively in the Corporation as the General Partner.     
Under the provisions of the Partnership Agreement, the Limited Partners will    
have very restricted rights to vote upon many important matters affecting the   
Partnership, including (a) the termination and liquidation of the Partnership,  
and (b) certain amendments to the Partnership Agreement (provided that such     
amendments may not affect the allocation of profits and losses among, or cash   
distributions to, the partners without approval of all the Limited Partners).   

12. Tax Status of the Partnership. There is no assurance that the Internal      
Revenue Service (the "IRS") will determine that, under current law, the         
Partnership should be classified as a partnership and not as an association     
taxable as a corporation for federal income tax purposes, because the           
Partnership has not received and does not intend to request a ruling from the   
IRS on this issue. The General Partner has the right in its discretion to       
elect to have the Partnership treated as an association taxable as a            
corporation. If the Partnership should be held or elect to be an association    
taxable as a corporation, the tax treatment to the Partnership and the          
Partners might be materially adversely affected.                                

13. Conflicts of Interest; Contracts Between the Partnership and the General    
Partner and Between the Partnership and Limited Partners. The interests of the  
Corporation as the General Partner of the Partnership may not always be         
consistent with the interests of the holders of the Partnership Interests in    
their capacity as limited partners of the Partnership (the "Limited             
Partners"). Subsequent to December 31, 1997, the General Partner renounced its  
right to receive five (5) General Partners warrants as compensation for         
services rendered to the Partnership. The General Partner in the future may     
seek compensation for services provided to the Partnership.                     

The Partnership Agreement provides that the Corporation as General Partner,     
and its officers, directors, shareholders and their affiliates may receive      
compensation for services performed on behalf of the Partnership, provided      
that such                                                                       

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compensation is on terms no less favorable to the Partnership than the terms    
on which such services would be available from independent third parties.       

The Partnership Agreement provides that a majority of the Limited Partners      
must approve agreements between the Partnership and any Partner, and the        
General Partner on behalf of the Partnership has determined that all proposed   
contracts between the Partnership and any Limited Partner also must be on       
terms no less favorable to the Partnership than the terms on which such         
services would be available from independent third parties, determined on a     
competitive bid process.                                                        

ITEM 2. PROPERTIES.                                                             

In February and March 1997, the Partnership acquired for cash fee simple title  
to approximately 203 acres (consisting of Lookaway Farm, the King Property and  
the Murphree Property) and entered into 99 year ground leases for               
approximately 16 acres (consisting of the Montgomery Property and the Swanson   
Property) collectively referred to as the Buckingham Properties that are        
intended to be developed into and to include the Club. The 217 acre site        
includes the approximate 11 acres that the Partnership expects to subdivide as  
the six (6) Re-Sale Lots.                                                       

Description of the Real Estate Agreements                                       

1. Lookaway Farm. The following is a summary of the Agreement of Sale that was  
executed for the purchase of Lookaway Farm, one of the properties comprising    
the Buckingham Properties. This property was acquired on February 24, 1997.     
This description is expressly qualified by the exact terms of such agreement    
as amended.                                                                     

The General Partner executed an agreement dated June 28, 1995, as amended (the  
"Lookaway Agreement") with Carl A. Swanson, Jr., Rodney E. Montgomery, and      
Thomas E. Murphree, co-executors and co-trustees under Will of Theodore         
Sterling, deceased, and Carl A. Swanson, Jr., executor of the Estate of Marion  
P. Sterling, deceased (collectively, the "Lookaway Seller"), for the purchase   
of approximately 113 acres of land together with the buildings and              
improvements erected thereon located on Upper Mountain Road, Buckingham, Bucks  
County, known as "Lookaway Farm" ("Lookaway Farm"). The improvements to         
Lookaway Farm include a three (3) story stone 18th century farmhouse and three  
other smaller houses and one garage/studio structure. The aggregate             
consideration paid to the sellers of Lookaway Farm was $1,775,000. In           
addition, the Partnership paid settlement charges of approximately $28,000,     
consisting primarily of title insurance, transfer taxes and local real estate   
taxes.                                                                          

In addition, the Partnership is liable to pay any Act 319 or 515 roll-back      
taxes that may arise.                                                           

Under the terms of the Lookaway Agreement, certain restrictive covenants        
limiting the future use of Lookaway Farm to that of a golf course or other      
similar non-residential, non-commercial open space were filed of record. Such   
restrictive covenants are subordinate to any acquisition and/or construction    
mortgage entered into by the Partnership that pertains to the acquisition or    
development of the Club. These same restrictive covenants are to take effect    
immediately upon pay-off of any such mortgage. In the event of foreclosure or   
other default proceedings against the Partnership, the restrictive covenants    
are dischargeable. The Partnership has further agreed that it shall not         
initiate or cause to be initiated any change in the character of the zoning     
district in which Lookaway Farm is located.                                     

2. The King Property. The following is a summary of the Agreement for the Sale  
of Real Estate for the purchase of the King Property. This property was         
acquired on March 17, 1997. This description is expressly qualified by the      
exact terms of such agreement.                                                  

The General Partner and Scott L. King ( "Mr. King") executed an agreement       
dated October 10, 1995 for the purchase of approximately 71 acres constituting  
the second parcel comprising part of the Buckingham Properties known as the     
"King Property." The aggregate consideration paid to or escrowed for the        
account of Mr. King was approximately $1,614,000. This sum includes an          
escrowing of $300,000 to cover verified capital gains taxes that may be         
incurred by Mr. King from the sale of his property. In addition, the            
Partnership paid settlement charges of approximately $19,000, consisting        
primarily of title insurance, transfer taxes, and local real estate taxes. In   
addition, the Partnership is liable to pay any Partnership Act 319 rollback     
taxes that may arise.                                                           

In addition, as part of the transaction with Mr. King, Mr. King has leased a    
guest house located on Lookaway Farm on a month-to-month basis for up to 24     
months for $100 per month plus all costs associated with his possession.        
Pursuant to                                                                     

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the terms of the King Agreement, at settlement Mr. King was issued a fully      
transferrable Partnership Interest with a non-transferable lifetime personal    
exemption from payment of the annual membership fees appurtenant to Club        
membership.                                                                     

3. The Murphree Agreement. The following is a summary of an Agreement of Sale   
for the purchase of the Murphree Property. This property was acquired on        
February 24, 1997. This description is expressly qualified by the exact terms   
of such agreement.                                                              

The Corporation executed an agreement dated November 1, 1995 (the "Murphree     
Agreement") with Janet S. Murphree for the purchase of approximately 16 acres   
("the Murphree Property"). The purchase price paid by the Partnership to Mrs.   
Murphree was $350,000. This amount consisted (i) the base consideration of      
$105,000, (ii) $45,000 paid on account of Mrs. Murphree's election not to take  
title to a Partnership Interest and (iii) $200,000 paid on account of Mrs.      
Murphree's election not to take title to a Re-Sale Lot. In addition, the        
Partnership paid closing costs of approximately $5,700, consisting primarily    
of title insurance and transfer taxes. In addition, the Partnership has agreed  
to pay any Act 319 or 515 roll-back taxes that may arise from this conveyance   
or as a result of a change in the use of the Murphree Property.                 

4. 99 Year Ground Lease with the Montgomerys. On February 24, 1997, the         
Partnership entered into a 99 year ground lease (the "Montgomery Lease") with   
Rodney E. and Helen S. Montgomery for approximately 8.9 acres (the "Montgomery  
Property") of undeveloped real property contiguous to Lookaway Farm. The        
following summary of the lease is expressly qualified by the exact terms of     
the lease, which are incorporated herein by reference.                          

The Montgomery Property is subject to an agreement relating to a rural          
residence exemption dated July 30, 1994 with the Bucks County Department of     
Health which provides inter alia that part of the Montgomery Property shall     
lose its status as being exempt from otherwise applicable requirements for an   
on-lot septic system if such parcel were to be subdivided. Because a            
conveyance of fee simple title from the Montgomerys to the Partnership would    
constitute such a subdivision, the Partnership and the Montgomerys terminated   
a prior agreement providing for the outright purchase of the Montgomery         
Property and instead entered into the Montgomery Lease. The Partnership has     
agreed to compensate the Montgomerys for all expenses in the event that the     
Bucks County Board of Health should determine that such rural residence         
exemption has been lost as a result of the execution of the Montgomery Lease    
or in the event of the exercise by the Partnership of its purchase option (as   
hereafter described). The expenses that the Partnership has agreed to cover     
include the cost of installing a septic system on the remaining property of     
the Montgomerys. No assurances can be given that the Partnership will not be    
required to incur the expenses associated with the loss of rural residence      
exemption.                                                                      

The term of the Montgomery Lease shall automatically earlier terminate if and   
when the Partnership terminates its use of the Montgomery Property as part of   
an 18 hole golf course. In the Montgomery Lease, the Montgomerys reserved the   
option to deed the Montgomery Property to the Partnership in fee simple.        

The amount of rent called for by the Montgomery Lease is $1. In addition, the   
Partnership conveyed to the Montgomerys one (1) joint and survivor Partnership  
Interest inclusive of a Club membership, inheritable by an heir of the          
survivor, together with a non-transferable joint personal lifetime exemption    
from the payment of annual Club membership fees. Such Partnership Interest was  
valued by the parties at $45,000. In addition, the Partnership made a $30,000   
donation to Trinity Church, Solebury, Pennsylvania, and agreed to make          
additional $30,000 donations on January 1, 1998 and January 1, 1999. The        
Montgomerys reserved the right to direct that the donations to be made in 1998  
an 1999 shall be paid to themselves in lieu of Trinity Church. Any right to     
take a charitable deduction for such donations is reserved to the Montgomerys.  

The Partnership has the right at its sole expense to construct on the           
Montgomery Property any and all improvements as it may determine are necessary  
for the development of an 18 hole golf course and related facilities. The       
Partnership is solely responsible for obtaining all permits and approvals and   
for paying all expenses and costs associated with any such improvements. The    
Partnership may only use the Montgomery Property as part of an 18 hole golf     
course and related facilities.                                                  

The Partnership is responsible for all taxes on the Montgomery Property as if   
it were the fee simple owner of such property. In addition, if other property   
owned by the Montgomerys that is contiguous to the Montgomery Property is       
reassessed as a result of the Partnership's construction of the golf course     
and related facilities, all increases in the assessment of such contiguous      
property are the responsibility of the Partnership. The Montgomery Lease        
provides that                                                                   

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in the event of a condemnation, to the extent not prohibited by law there       
shall be separate awards to the Montgomerys and to the Partnership as their     
interests may appear.                                                           

The Partnership has the obligation under the Montgomery Lease to obtain         
specified amounts of personal injury and property damage insurance, naming the  
Montgomerys as an additional insured. Both parties retain the right to assign   
the Montgomery Lease upon written notice. The Montgomery Lease provides for     
various events of default including a failure to pay rent or taxes or to        
obtain insurance or to pay an insurance premium. The Montgomery Lease also      
provides for a limited right to cure a default after written notice of same.    

The Partnership has retained the right to purchase fee simple title to the      
Montgomery Property for the sum of $1 provided that the Partnership pays any    
and all costs arising from the transaction including real estate transfer       
taxes, Act 319 or Act 515 rollback taxes and rural residency covenant           
expenses. As a precondition to the Montgomerys' obligation to convey fee        
simple title, the Partnership is obligated to execute and deliver a use         
restriction for the Montgomery Property restricting the future use of such      
property to a golf course or other similar non-residential, non-commercial      
open space. Such restriction, however, shall be subordinate in lien, payment    
and all other respects to any initial acquisition and/or construction mortgage  
related to purchasing, developing or refinancing part of a golf course and      
related facilities subject to certain provisions including that such            
restriction shall be void and extinguished automatically in the event of the    
delivery of a deed in mortgage foreclosure or deed in lieu of mortgage          
foreclosure of any such mortgage.                                               

5. 99 Year Ground Lease with the Swansons On February 24, 1997, the             
Partnership entered into a 99 year ground lease (the "Swanson Lease") with      
Carl A. Swanson, Jr., and Sarah S. Swanson for approximately 4 acres (the       
"Swanson Property") of undeveloped realty contiguous to Lookaway Farm. The      
following summary of the lease is expressly qualified by the exact terms of     
the lease, which are incorporated herein by reference.                          

As in the case of the Montgomerys, the Partnership terminated an agreement of   
sale to acquire the Swanson Property and entered into the Swanson Lease on      
account of the rural residence exemption that applies to the Swanson Property,  
which exemption would have been lost in the event of an outright purchase by    
the Partnership of the Swanson Property. No assurances can be given that this   
exemption will nonetheless not be lost, with resulting expenses to the          
Partnership.                                                                    

The amount of rent to be paid under the Swanson Lease is $1. In addition, the   
Partnership conveyed to the Swansons a joint and survivor membership,           
inheritable by an heir of the survivor, together with a non-transferable joint  
lifetime exemption from the payment of annual Club membership fees. Such        
Partnership Interest was valued by the parties at $45,000.                      

The terms and conditions of the Swanson Lease are substantially similar to the  
Montgomery Lease except that the Swansons did not reserve the right to deed     
the Swanson Property to the Partnership in fee simple. The Partnership does     
not have the right to construct permanent above-ground structures, other than   
a pavilion or weather shelter, on the Swanson Property. If the Swansons find    
that construction of the 18 hole golf course creates objectionable views, the   
Partnership has agreed to provides appropriate screening, provided that the     
Swansons request same prior to completion of such construction. The parties to  
the Swanson Lease waived trial by jury in any action, proceeding or             
counterclaim brought by any party against the other (except for personal        
injury or property damage) on any matter arising out of the ground lease. The   
Swansons granted the Partnership a limited first right to purchase the          
property of which the Swanson Property forms a part in the event that they      
should elect to sell same.                                                      

ITEM 3. LEGAL PROCEEDINGS.                                                      

Neither the Partnership nor the Corporation is at this time involved in any     
litigation, nor, to the knowledge of the General Partner, is any litigation     
threatened against the Partnership or the Corporation which might materially    
affect the Partnership or the Corporation.                                      

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.                    

Not applicable.                                                                 

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.  

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(a) Market Information.                                                         
There is no public trading market for the Partnership Interests. As of          
February 2 , 1998, the Partnership was offering to sell Series E Partnership    
Interests at a price of $60,000 per unit, and $100,000 for a Corporate Gold     

Partnership Interest. The Partnership is not aware of any private resale of     
Partnership Interests to third parties, and the Partnership has the right to    
disapprove of any transfer of a Partnership Interest until the Partnership      
shall have sold all Partnership Interests.                                      

There are substantial restrictions on the transferability of the Units and its  
sub-parts. The Partnership Agreement provides further that no Limited Partner   
may transfer a Partnership Interest or any right or privilege of membership in  
the Club without the consent of the Corporation, as General Partner, which      
consent may be arbitrarily withheld. Absent extenuating circumstances, the      
Corporation does not anticipate consenting to any transfer of a Partnership     
Interest by sale before the Partnership issues an aggregate of 229 Partnership  
Interests. Certain intra-family transfer shall be permitted and the transfer    
to a spouse of a Limited Partner who acquired his interest as a Founder shall   
not result in the loss of the Initial Founders Dues Preference until the        
subsequent transfer, inter vivos, testamentary or intestate of the Interest by  
the initial transferee spouse.                                                  

(b) Holders. As of February 2, 1998, the Partnership had 218 Limited Partners,  
 including three Limited Partners who were issued Partnership Interests in
connection with the Real Estate Agreements.                             

(c) Dividends. The Partnership does not expect to pay dividends.                

(d) Recent Sales of Unregistered Securities.                                    

(i) Between November 1995 and January 1996, the General Partner sold 25         
Founders Units to the Founders for aggregate consideration of $625,000. No      
underwriting discounts or commissions were paid or deducted from this sum.      
Each Founder's Unit consisted of (A) a warrant to acquire a Founders            
Partnership Interest in the Partnership, inclusive of a warrant for golf        
membership, and (B) a Trailing Warrant to acquire a Partnership Interest.       
These securities were sold under the exemption from registration afforded by    
Rule 504 promulgated under the Securities Act of 1933.                          

(ii) Between January 1996 and June 1996, the Partnership sold an aggregate of   
36 Partnership Interests inclusive of a warrant for golf membership for         
aggregate consideration of $1,356,000. These securities were sold under the     
exemption from registration afforded by Rule 506 promulgated under the          
Securities Act of 1933.                                                         

(iii) Between June 1996 and May 1997, the Partnership sold an aggregate of 75   
Partnership Interests inclusive of a warrant for golf membership for aggregate  
consideration of $3,357,000. These securities were sold pursuant to Regulation  
A under the Securities Act of 1933.                                             

(e) Use of Proceeds from Registered Securities.                                 

The Partnership's Registration Statement on Form SB-2 (File no. 333-6454) was   
declared effective on April 22, 1997, upon which date the Partnership           
commenced the offering of securities registered thereby, which offering is      
still ongoing as of February 2, 1998. An aggregate of 90 Partnership Units      
were registered for sale at a maximum price of $5,349,005, inclusive of         
$825,000 to be received by Founders in connection with their sale of Trailing   
Warrants sold in connection with such offering.                                 

Through February 2, 1998, the Partnership had sold an aggregate of 79           
Partnership Units inclusive of the sale by certain Founders of the Trailing     
Warrants, resulting in gross proceeds received and/or due to the Partnership    
and the Founders of $3,889,200 and $579,800, respectively. The Partnership      
incurred no underwriting discounts or commissions or finder's fees in           
connection with this offering. No payments were made to officers, directors or  
shareholders of the General Partner or to limited partners of the Partnership   
except for payments for services rendered to Eastburn & Gray, a law firm which  
John Vanluvanee, a limited partner and a director and shareholder of the        
General Partner, is a shareholder; Antheil Nicholas Maslow & MacMinn, a law     
firm in which Jeffrey Nicholas, a limited partner and a shareholder of the      
General Partner, was a partner; and to A.H. Cornell & Co., a construction firm  
owned by or affiliated with Stanley Cornell, a limited partner and a            
shareholder of the General Partner.                                             

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Through December 31, 1997, the Partnership had collected approximately $3.7     
million from the sale of Partnership Interests in this offering. Such proceeds  
were expended approximately as follows: golf course related engineering fees,   
$150,000; legal fees, $125,000; golf course and club house architectural fees,  
$200,000; golf course equipment, $50,000; membership expenses, $175,000;        
miscellaneous operating expenses, $215,000; golf course construction, $2.2      
million; and investments in short term interest bearing securities, $585,000.   

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION               

Plan of Operation                                                               

During the next twelve (12) months, the activities of the Partnership are       
expected to consist of the completion of the construction of the golf course,   
the commencement and completion of clubhouse construction and rennovations,     
and the opening of the Club. In addition, the Partnership anticipates           
completing the sale of Partnership Units in its SB-2 offering. The Partnership  
also expects that it will market the Re-Sale Lots during the next twelve        
months, with a goal of selling some or all of the Re-Sale Lots. The             
Partnership also anticipates entering into a loan agreement with First Union    
National Bank for the borrowing of funds needed for the completion of           
construction and opening of the club. In addition, the Partnership also         
expects to engage in other organizational development activities. No            
assurances can be given that the Partnership will be successful in any of the   
aforementioned activities.                                                      

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS                       

The Partnership and the General Partner have made forward-looking statements    
in this document that are subject to risks and uncertainties. Forward-looking   
statements include the information concerning possible or assumed future        
activities, plans, results or operations of the Partnership and the General     
Partner and those preceded by, followed by or that include the words            
"believes", "expects", "anticipates" or similar expressions.                    

The following important factors, in addition to those discussed elsewhere in    
this document and in the documents incorporated by reference, could affect the  
future activities, plans, results or operations of the Partnership and the      
General Partner, and could cause those results to differ materially from those  
expressed in the forward-looking statements: changes in the economy which       
affect the discretionary spending practices of persons who are or might         
otherwise become Partners in the Partnership; an increase in interest rates     
which might affect the salability of the Re-Sale Lots; regulatory changes       
affecting the necessary permits or approvals to open or operate the golf        
course; an increase in construction costs; improper, illegal or unexpected      
actions by third parties; unfavorable weather conditions; and the like.         

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ITEM 7. FINANCIAL STATEMENTS.                                                   

TABLE OF CONTENTS 

                                                                      PAGE

LOOKAWAY PARTNERS (A Limited Partnership)                                       

Independent Auditor's Report                                           F-2

Balance sheet as of December 31, 1997                                  F-3

Statements of operations for the year ended                               
December 31, 1997, and cumulative                                       
 during development stage                                              F-4

Statements of partners' equity for the period from November 17, 1995      
(inception) to December 31, 1996,                                       
  and for the year ended December 31, 1997                             F-5-6

Statements of cash flows for the year ended                               
December 31, 1997, and cumulative during                                
 development stage                                                     F-7

  Notes to financial statements                                         F-8-15

PAUNNACUSSING FOUNDERS, INC. (The General Partner)                              

Independent Auditor's Report                                          F-16

Balance sheet as of December 31, 1997                                 F-17

   Notes to balance sheet                                                F-18-20

F-1 

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Partners                                                                        
Lookaway Partners                                                               
Doylestown, Pennsylvania                                                        

INDEPENDENT AUDITOR'S REPORT  
----------------------------  

     We have audited the accompanying balance sheet of LOOKAWAY PARTNERS
(A Development Stage Limited Partnership) as of December 31, 1997, the related  
statements of operations and cash flows for the year ended December 31, 1997,   
and cumulative during development stage, and the related statements of          
partners' equity for the period from November 17, 1995 (inception) to December  
31, 1996, and for the year ended December 31, 1997. These financial statements  
are the responsibility of the Partnership's management. Our responsibility is   
to express an opinion on these financial statements based on our audits.        

We conducted our audits in accordance with generally accepted 
auditing standards. Those standards require that we plan and perform the        
audits to obtain reasonable assurance about whether the financial statements    
are free of material misstatement. An audit includes examining, on a test       
basis, evidence supporting the amounts and disclosures in the financial         
statements. An audit also includes 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 Lookaway Partners   
as of December 31, 1997, and the results of its operations and its cash flows   
for the year ended December 31, 1997, and cumulative during development stage,  
in conformity with generally accepted accounting principles.                    

                                                      FISHBEIN & COMPANY, P.C.

Elkins Park, Pennsylvania                                                       
February 2, 1998 (March 19, 1998                                                
as to Note 6)                                                                 

F-2 

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LOOKAWAY PARTNERS 
----------------- 
(A Development Stage Limited Partnership) 

BALANCE SHEET 
------------- 

DECEMBER 31, 1997 
----------------- 

ASSETS  
------  

CURRENT ASSETS                                                                  
Cash                                                          $1,385,399  
Prepaid expenses and other current assets                          3,574  
                                                            ----------

   Total current assets                                      1,388,973
                                                            ----------
PROPERTY AND EQUIPMENT                                                          
Golf facility under construction                               7,193,105  
Machinery and equipment                                           35,147  
Office furniture and equipment                                    10,743  
                                                            ----------

                                                             7,238,995
Less accumulated depreciation                                      9,308  
                                                            ----------
                                                             7,229,687
                                                            ----------
LAND HELD FOR RESALE                                                265,500     
                                                            ----------
                                                            $8,884,160
                                                            ==========
LIABILITIES AND PARTNERS' EQUITY  
--------------------------------  
CURRENT LIABILITIES                                                             
Demand note payable - General Partner (Includes                           
accrued interest at 5.81% of $5,822)                         $  123,822 
Accounts payable and accrued expenses                            154,660  
Due to Founders                                                  339,000  
                                                            ----------
   Total current liabilities                                   617,482
                                                            ----------
ACCOUNT PAYABLE - Net of current portion                             30,000     
                                                            ----------
COMMITMENTS (Note 4)                                                            

PARTNERS' EQUITY                                                                
General Partner                                                    7,000  
Limited Partners                                                          
229 Units proposed; 214 issued                                8,961,357 
Deficit accumulated during development stage                 (   391,425) 
                                                            ----------
                                                             8,576,932
Less subscriptions receivable - Limited Partners             (   340,254) 
                                                            ----------
                                                             8,236,678
                                                            ----------
                                                            $8,884,160
                                                            ==========

See notes to financial statements.                                              

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LOOKAWAY PARTNERS 
----------------- 
(A Development Stage Limited Partnership) 

STATEMENTS OF OPERATIONS  
------------------------  

                                                                  Cumulative
                                         Year Ended               During
                                            December 31,           Development
                                             1997                  Stage
                                           -----------           -----------

REVENUES                                                                        
Interest                                 $   92,005             $   92,005
Other                                         4,055                  4,055
                                         ----------             ----------
                                             96,060                 96,060

OPERATING EXPENSES                             487,485                487,485   
                                         ----------             ----------

NET LOSS                                   ($  391,425)           ($  391,425)  
                                         ==========             ==========

See notes to financial statements.                                              

F-4 

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LOOKAWAY PARTNERS 
----------------- 
(A Development Stage Limited Partnership) 

STATEMENTS OF PARTNERS' EQUITY  
------------------------------  

NOVEMBER 17, 1995 (INCEPTION) TO DECEMBER 31, 1996  
AND FOR THE YEAR ENDED DECEMBER 31, 1997  
--------------------------------------------------  

                                                        [Enlarge/Download Table]


                                                                           Limited Partners    
                                                                        ---------------------  
                                                               General   Number                
                                                               Partner  of Units     Amount    
                                                               -------  --------     ------    
                                                                                               
General Partner interest                                  $    7,000                $          

Issuance of warrants under a private offering:                                                 
    Founders                                                                21         449,979 
    Trailing                                                                                21 
                                                          ----------       ---      ---------- 

Balance - December 31, 1995                                    7,000        21         450,000 

Issuance of warrants under a private offering:                                                 
    Founders                                                                 4          99,996 
    Trailing                                                                                 4 

Issuance of Units under a confidential private offering:                                       
    Series 1                                                                10         350,000 
    Series 2                                                                10         370,000 
    Series 3                                                                10         390,000 
    Series 4                                                                 6         246,000 

Issuance of Units under a Regulation A offering:                                               
    Series 4                                                                14         574,000 
    Series 5                                                                25       1,075,000 
    Series 6                                                                 2          90,000 
    Series 8 Corporate Gold                                                  1          78,000 

Offering costs incurred by the                                                                 
 General Partner and transferred                                                               
 to the Partnership                                                                (   116,743)

Subscriptions collected                                                                        
                                                          ----------       ---      ---------- 
Balance - December 31, 1996                               $    7,000       103      $3,606,257 
                                                          ==========       ===      ========== 


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                                                                [Download Table]


      Subscriptions                   Deficit Accumulated                    
       Receivable                  During Development Stage                  
 ----------------------------     ----------------------------               
 General             Limited      General              Limited               
 Partner             Partners     Partner              Partners     Total    
 -------             --------     -------              --------     -----    
                                                                             
($    7,000)         $            $                   $            $         

(   449,979)                                                                 
(        21)                                                                 
 ----------                                                                  
(   457,000)                                                                 

(    99,996)                                                                 
(         4)                                                                 

(    35,000)        (   315,000)                                             
(    37,000)        (   333,000)                                             
(    41,000)        (   349,000)                                             
(    24,600)        (   221,400)                                             

(    57,600)        (   516,400)                                             
(   103,800)        (   971,200)                                             
(     9,000)        (    81,000)                                             
(     7,800)        (    70,200)                                             

    116,743                                                                  

                      2,149,500                                     2,149,500
 ---------          ----------                                    ---------- 

($  756,057)        ($  707,700)  $      -            $      -     $2,149,500
 ==========          ==========   ==========          ==========   ==========


See notes to financial statements.                                              

F-5   

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LOOKAWAY PARTNERS 
----------------- 
(A Development Stage Limited Partnership) 

STATEMENTS OF PARTNERS' EQUITY  
------------------------------  

NOVEMBER 17, 1995 (INCEPTION) TO DECEMBER 31, 1996  
AND FOR THE YEAR ENDED DECEMBER 31, 1997  
--------------------------------------------------  
(Continued) 

                                                        [Enlarge/Download Table]


                                                                        Limited Partners      
                                                                 ---------------------------- 
                                                      General      Number                     
                                                      Partner     of Units          Amount    
                                                      -------     --------          ------    
                                                                                   <C.        
Balance - December 31, 1996                          $    7,000    103             $3,606,257 
 (From previous page)                                                                         

Issuance of warrants under a Regulation A offering:                                           
    Series 6                                                        21                945,000 
    Series 7                                                        11                517,000 
    Series 8 Corporate Gold                                          1                 78,000 

Issuance of Units for land purchases                                 3                135,000 

Net assets transferred from General Partner                                                   
 in connection with land purchases                                                            

Issuance of Units under a                                                                     
 Small Business Offering:                                                                     
    Series A                                                         9                450,000 
    Series B                                                        13                682,500 
    Series C                                                        16                880,000 
    Series D                                                        17                977,500 
    Series E                                                        17                508,400 
    Series F Corporate Gold                                          3                234,000 

Offering costs incurred                                                           (    52,300)

Subscriptions collected                                                                       

Net loss                                                                                      
                                                     ----------    ---             ---------- 
Balance - December 31, 1997                          $    7,000    214             $8,961,357 
                                                     ==========    ===             ========== 


10KSB 21st Page of 44 TOC 1st Previous Next ↓Bottom Just 21st
                                                        [Enlarge/Download Table]


            Subscriptions                    Deficit Accumulated                     
             Receivable                    During Development Stage                  
--------------------------------    -----------------------------------              
    General             Limited       General              Limited                   
    Partner             Partners      Partner              Partners           Total  
    -------             --------      -------              --------           -----  
                                                                                     
($  756,057)        ($  707,700)    $                    $                $2,149,500 

(   185,000)        (   760,000)                                                     
(   132,880)        (   384,120)                                                     
                    (    78,000)                                                     

                                                                             135,000 

    835,569         (   835,569)                                                     

                    (   450,000)                                                     
                    (   682,500)                                                     
                    (   880,000)                                                     
                    (   977,500)                                                     
                    (   508,400)                                                     
                    (   234,000)                                                     

                                                                         (    52,300)

    238,368           6,157,535                                            6,395,903 

                                  (     3,914)         (   387,511)      (   391,425)
 ----------          ----------    ----------           ----------        ---------- 

 $      -           ($  340,254)  ($    3,914)         ($  387,511)       $8,236,678 
 ==========          ==========    ==========           ==========        ========== 

See notes to financial statements.                                              
F-6 

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LOOKAWAY PARTNERS 
----------------- 
(A Development Stage Limited Partnership) 

STATEMENTS OF CASH FLOWS  
------------------------  
Increase (Decrease) in Cash 

                                                        [Enlarge/Download Table]

                                                                               Cumulative
                                                               Year Ended       During   
                                                               December 31,   Development
                                                                   1997          Stage   
                                                              -------------  ------------
                                                                                         
CASH FLOWS FROM OPERATING ACTIVITIES                                                     
   Net loss                                                  ($  391,425)    ($  391,425)
   Adjustments to reconcile net loss to net                                              
    cash used in operating activities                                                    
      Depreciation                                                 9,308           9,308 
      Demand note payable of $118,000 incurred and                                       
       decrease in subscriptions receivable of $42,405                                   
       recorded for reimbursement to General Partner                                     
       for operating expenses                                    160,405         160,405 
      Accrued interest on demand note payable -                                          
       General Partner                                             5,822           5,822 
      Increase in prepaid expenses and other current assets  (     3,574)    (     3,574)
      Decrease in accounts payable and accrued expenses      (    82,566)    (    82,566)
                                                              ----------      ---------- 

           Net cash used in operating activities             (   302,030)    (   302,030)
                                                              ----------      ---------- 

CASH FLOWS FROM INVESTING ACTIVITIES                                                     
   Additions to property and equipment - Cash used                                       
    in investing activities                                  ( 2,804,584)    ( 2,804,584)
                                                              ----------      ---------- 

CASH FLOWS FROM FINANCING ACTIVITIES                                                     
   Increase in due to Founders                                   339,000         339,000 
   Offering costs incurred                                   (     7,450)    (     7,450)
   Proceeds from issuance of Units                             4,160,463       4,160,463 
                                                              ----------      ---------- 

           Net cash provided by financing activities           4,492,013       4,492,013 
                                                              ----------      ---------- 

NET INCREASE IN CASH AND CASH - ENDING                        $1,385,399      $1,385,399 
                                                              ==========      ========== 


Note: Through March 31, 1997, all of the Partnership's transactions were        
conducted by the General Partner on behalf of the Partnership. The  
Partnership had no cash transactions prior to that date.            

See notes to financial statements.                                              
F-7 

10KSB 23rd Page of 44 TOC 1st Previous Next ↓Bottom Just 23rd
SCHEDULE OF NONCASH OPERATING, INVESTING AND FINANCING ACTIVITIES               

The following noncash transactions resulted from the sale of Units:             

                                                                [Download Table]


                                                                 Cumulative  
                                                 Year Ended        During    
                                                 December 31,    Development 
                                                     1997           Stage    
                                               ---------------  -------------
                                                                             
Increase in:                                                                 
   Restricted cash - Escrowed funds            ($1,414,819)     ($3,592,509) 
Increase (decrease) in:                                                      
   Unearned interest income - Restricted cash       19,248           47,438  
   Partners' equity                                                          
      General Partner                          (   322,179)     (   637,979) 
      Limited Partners                           1,717,750        4,183,050  

During the year ended December 31, 1997, and cumulative during development      
stage, the General Partner completed the purchase of land. Simultaneously with  
the closings, the General Partner assigned its rights and obligations under     
the real estate and construction agreements to the Partnership, resulting in    
the following noncash transactions:                                             

(Increase) decrease in:                                                   
Golf facility under construction                ($4,305,869)        
Office furniture and equipment                  (    10,743)        
Land held for resale                            (   265,500)        
Restricted cash - Escrowed funds                  3,592,509         
Increase (decrease) in:                                                   
Accounts payable and accrued expenses               149,427         
Unearned interest income - Restricted cash      (    47,438)        
Partners' equity                                                    
General Partner                                  797,464      
Limited Partners - Net of offering                            
costs of $44,850                                 90,150     

At December 31, 1997, accounts payable and accrued expenses include             
$117,799 for costs of the golf facility under construction.                     

10KSB 24th Page of 44 TOC 1st Previous Next ↓Bottom Just 24th
LOOKAWAY PARTNERS 
----------------- 
(A Development Stage Limited Partnership) 

NOTES TO FINANCIAL STATEMENTS 
----------------------------- 

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                                   

a. Organization and Nature of Business                                    

   Lookaway Partners (the Partnership) was formed as a limited partnership
 under the laws of the Commonwealth of Pennsylvania in November, 1995.
 The Partnership owns, is developing, and will operate a golf facility
located in Central Bucks County, Pennsylvania.                      

    In March, 1997, the General Partner completed the purchase of a 216-acre
site for the golf facility. Simultaneously with the closings, the   
General Partner assigned its rights and obligations under the real  
estate agreements to the Partnership.                               

b. Use of Estimates                                                       

 The presentation of financial statements in conformity with generally
    accepted accounting principles requires management 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 from those 
estimates.                                                          

c. Partnership Matters                                                    

  The Limited Partners are restricted from taking part in the management
  of the Partnership's business, which will be vested exclusively in the
 General Partner, Paunnacussing Founders, Inc. Under the provisions of
  the Partnership Agreement, the Limited Partners have restricted rights
to vote upon certain important matters affecting the Partnership,   
 including (a) the termination and liquidation of the Partnership, and
(b) certain amendments to the Partnership Agreement.                

  The interests of the General Partner of the Partnership may not always
be consistent with the interests of the holders of the Partnership  
   Interests in their capacity as Limited Partners of the Partnership. The
    General Partner is entitled to certain compensation from the Partnership
 and reimbursement of certain costs incurred by the General Partner on
behalf of the Partnership.                                          

    The Limited Partners may not remove the General Partner prior to January
    1, 2003. Thereafter, the Limited Partners may remove the General Partner
 with the prior written consent of Limited Partners holding 66-2/3% or
 more of the outstanding Partnership interests (other than the General
Partner or any of its affiliates, as defined, if any of them is a   
Limited Partner).                                                   

F-8 

10KSB 25th Page of 44 TOC 1st Previous Next ↓Bottom Just 25th
LOOKAWAY PARTNERS 
----------------- 
(A Development Stage Limited Partnership) 

NOTES TO FINANCIAL STATEMENTS 
----------------------------- 

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)                       

c. Partnership Matters (Continued)                                        

    The Partnership will terminate on June 30, 2070, unless sooner dissolved
upon the occurrence of one of the following events: (a) the vote to 
 terminate by Limited Partners holding at least 80% of the outstanding
   interests (other than interests owned by the General Partner and any of
    its affiliates); (b) the vote to terminate by the General Partner and by
  Limited Partners holding at least 66-2/3% of the outstanding interests
(other than interests owned by the General Partner and any of its   
affiliates); (c) the occurrence of any event which shall make it    
  unlawful for the existence of the Partnership to be continued; (d) the
   withdrawal, removal or bankruptcy of the General Partner unless, within
   60 days of such event, Limited Partners holding at least 66-2/3% of the
   outstanding interests elect to continue the Partnership and elect a new
   general partner to continue the business of the Partnership; or (e) the
voluntary or involuntary sale or other disposition of all or        
substantially all of the Partnership's assets.                      

All profits and losses of the Partnership other than from the       
disposition, refinancing, liquidation or condemnation of Partnership
   property are allocated 1% to the General Partner and 99% to the Limited
    Partners. Upon liquidation of the Partnership, the General Partner shall
  contribute to the Partnership an amount equal to the lesser of (a) the
 deficit balance in its capital account, or (b) the excess of 1.01% of
the aggregate capital contributions of the Limited Partners over the
    capital previously contributed by the General Partner. After the payment
 and discharge of all of the Partnership's debts and liabilities, cash
distributions, if any, will be made to the Partners based upon their
respective positive capital accounts as adjusted to reflect the net 
profits and losses realized upon liquidation.                       

All profits, losses and credits which are allocable to, and any     
    distributions made to, the Limited Partners as a class will be allocated
    or distributed among them in accordance with their ownership percentages
which are based on amounts contributed.                             

d. Property and Equipment                                                 

    Property and equipment are stated at cost. The cost of the golf facility
under construction includes expenditures made to change the land,   
   exclusive of buildings, which are treated as permanent improvements and
 are not depreciable. Depreciation is provided using the straight-line
and declining balance methods over the estimated useful lives of the
assets.                                                             

F-9 

10KSB 26th Page of 44 TOC 1st Previous Next ↓Bottom Just 26th
LOOKAWAY PARTNERS 
----------------- 
(A Development Stage Limited Partnership) 

NOTES TO FINANCIAL STATEMENTS 
----------------------------- 

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)                       

e. Income Taxes                                                           

  Income taxes are not payable by, or provided for, the Partnership. All
   tax effects of the Partnership's income or losses are passed through to
the partners individually.                                          

  There is no assurance that the Internal Revenue Service will determine
that, under current law, the Partnership should be classified as a  
partnership and not as an association taxable as a corporation for  
 federal income tax purposes, because the Partnership has not received
  and does not intend to request a ruling from the IRS on this issue. In
  addition, the General Partner has the right at its discretion to elect
to have the Partnership treated as an association taxable as a      
corporation. If the Partnership should be held or elect to be an    
association taxable as a corporation, income taxes would become the 
responsibility of the Partnership and not of the partners.          

f. Reclassifications                                                      

Certain 1996 amounts have been reclassified to conform to current   
account classifications.                                            

2. PARTNERS' EQUITY                                                             

a. Private Offering                                                       

   Under a private offering consisting of 25 Units ($675,000), 15 of which
  were Series 1 Units at $25,000 per Unit, and 10 of which were Series 2
    Units at $30,000 per Unit, all of the Series 1 Units and 6 of the Series
2 Units were issued as of December 31, 1995. In January, 1996, the 4
    remaining Series 2 Units were issued. Each Unit consists of 25 shares of
the common stock of the General Partner, one Founders Partnership   
Warrant and one Trailing Partnership Warrant.                       

The purchase price for each Unit is allocated as follows:           

                                                   Series 1         Series 2
                                                  Units            Units
                                                   ----------       ----------
Common stock of the General Partner                                 
      (not a security of the Partnership)          $    5,000       $    5,000
     Founders Partnership Warrant                      19,999           24,999
     Trailing Partnership Warrant                           1                1
                                                   ----------       ----------

                                                   $   25,000       $   30,000
                                                   ==========       ==========

F-10  

10KSB 27th Page of 44 TOC 1st Previous Next ↓Bottom Just 27th
LOOKAWAY PARTNERS 
----------------- 
(A Development Stage Limited Partnership) 

NOTES TO FINANCIAL STATEMENTS 
----------------------------- 

2. PARTNERS' EQUITY (Continued)                                                 

a. Private Offering (Continued)                                           

 Each Founders Partnership Warrant entitles the holder to purchase one
    Founders limited partnership interest, which represents the right of the
holder, upon payment of membership dues, to be a member of the golf 
facility. Each Trailing Partnership Warrant entitles the holder to  
 purchase one Non-Founders limited partnership interest at an exercise
  price of $25,000 for holders of Series 1 Units and $30,000 for holders
  of Series 2 Units (see Note 2-d). The Non-Founders limited partnership
interest represents the right of the holder, upon payment of annual 
membership dues, to be a member of the golf facility.               

b. Confidential Private Offering                                          

    A Confidential Private Offering memorandum dated January, 1996, provided
for the issuance of up to 120 Units (a maximum of $5,380,000), 10 of
   which were Series 1 Units offered at $35,000 per Unit, 10 of which were
 Series 2 Units offered at $37,000 per Unit, 10 of which were Series 3
Units offered at $39,000 per Unit, 20 of which were Series 4 Units  
   offered at $41,000 per Unit, 25 of which were Series 5 Units offered at
    $43,000 per Unit, 25 of which were Series 6 Units offered at $45,000 per
    unit, 10 of which were Series 7 Units offered at $47,000 per Unit and 10
      of which were Series 8 - Corporate Gold Units offered at $78,000 per Unit.
   Each Unit consists of one limited partnership interest which includes a
    warrant which entitles the holder upon payment of membership dues, to be
 a member of the golf facility. Through June 11, 1996, the date of the
discontinuation of any sales under the Confidential Private Offering
(see Note 2-c), 36 Units were issued for an aggregate of $1,356,000,
which has been collected as of December 31, 1997.                   

c. Regulation A Offering                                                  

    A Regulation A Offering Statement filed in April, 1996, which superseded
the Confidential Private Offering (see Note 2-b), provided for the  
  issuance of up to 79 Units (a maximum of $3,572,000), 14 of which were
 Series 4 Units offered at $41,000 per Unit, 25 of which were Series 5
Units offered at $43,000 per Unit, 25 of which are Series 6 Units   
  offered at $45,000 per Unit, 12 of which are Series 7 Units offered at
$47,000 per Unit and 3 of which are Series 8 - Corporate Gold Units 
offered at $78,000 per Unit. Each Unit consists of one limited      
    partnership interest which includes a warrant which entitles the holder,
 upon payment of membership dues, to be a member of the golf facility.
Through December 31, 1997, 75 units were issued for an aggregate of 
$3,357,000, which has been collected as of December 31, 1997.       

F-11  

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LOOKAWAY PARTNERS 
----------------- 
(A Development Stage Limited Partnership) 

NOTES TO FINANCIAL STATEMENTS 
----------------------------- 

2. PARTNERS' EQUITY (Continued)                                                 

c. Regulation A Offering (Continued)                                      

   This offering and the Confidential Private Offering were conducted on a
   "modified best efforts" basis, meaning that there was no minimum number
of Units that must be sold before the Partnership had access to the 
   subscriber's down payment (10% of subscription proceeds). The remaining
90% of subscription proceeds including interest were held in escrow 
until closing of the land purchases (see Note 1-a).                 

d. Small Business Offering (SB-2)                                         

Under Form SB-2 Registration Statement filed in April, 1997, which  
  superseded the Regulation A Offering (Note 2-c), up to 90 Units may be
    issued (a maximum of $5,349,005), 10 of which are Series A Units offered
  at $50,000 per Unit, 15 of which are Series B Units offered at $52,500
    per Unit, 20 of which are Series C Units offered at $55,000 per Unit, 17
    of which are Series D Units offered at $57,500 per Unit, 28 of which are
   Series E Units offered at $60,000 per Unit, and 8 of which are Series F
   - Corporate Gold Units of which 3 are offered at $78,000 per Unit, 3 at
   $90,000 per Unit and 2 at $100,000 per Unit. To the extent to which any
  of the Series F Units are sold, the Partnership will reduce the number
    of Series A-E Units sold, and the reduction will occur within the Series
then being sold at the time the Series F Unit is sold. Each Unit    
 consists of one limited partnership interest which includes a warrant
which entitles the holder, upon payment of membership dues, to be a 
 member of the golf facility. Through December 31, 1997, 75 Units were
  issued for an aggregate of $3,732,400 (which is net of the proceeds of
$476,600 from the sale of Units in connection with the exercise of  
warrants offered by the Founders), of which $340,254 is receivable. 
Through February 2, 1998, 79 units were issued for an aggregate of  
 $3,899,200 (which is net of the proceeds of $579,800 from the sale of
Units in connection with the exercise of warrants offered by the    
Founders), of which $191,500 is receivable.                         

F-12  

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LOOKAWAY PARTNERS 
----------------- 
(A Development Stage Limited Partnership) 

NOTES TO FINANCIAL STATEMENTS 
----------------------------- 

2. PARTNERS' EQUITY (Continued)                                                 

d. Small Business Offering (SB-2) (Continued)                             

The holders of the Trailing Partnership Warrants (the Founders) (see
  Note 2-a) intend to offer these warrants under the SB-2 offering. Each
   warrant will be exercisable for one Series E Unit. The Founders will be
    obliged in sequence to either exercise the warrant for their own account
   or for the account of a permitted transferee, or to sell the warrant to
  a purchaser in the SB-2 offering for $60,000, inclusive of the warrant
exercise price. The sale of all of the Trailing Partnership Warrants
 would result in proceeds to the Founders of $825,000 (net of $675,000
which would be paid to the Partnership for the exercise of the      
   warrants). Through December 31, 1997, one founder exercised the warrant
    for his own account, and 14 warrants were sold. An administrative fee of
 $600 is charged to each founder who sells their warrants. At December
 31, 1997, the amount due to Founders represents the net proceeds from
the sale of these warrants.                                         

    This offering is being conducted on a "best efforts" basis, meaning that
there is no minimum number of Units that must be sold before the    
Partnership will have access to the proceeds.                       

 The proceeds received from the sale of certain of the Units are to be
held in escrow until specific conditions are met.                   

    This offering shall terminate upon the earlier of March 31, 1998, or the
 sale by the Partnership of an aggregate of 229 Partnership interests.
 The Partnership also reserves the right to terminate this offering at
any time without notice, and to extend the termination date of this 
offering beyond March 31, 1998.                                     

e. Other                                                                  

    The General Partner contributed to the Partnership cash in the amount of
$7,000 in consideration for which it received a 1% General Partner  
interest in the Partnership.                                        

F-13  

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LOOKAWAY PARTNERS 
----------------- 
(A Development Stage Limited Partnership) 

NOTES TO FINANCIAL STATEMENTS 
----------------------------- 

3. RELATED PARTY TRANSACTIONS                                                   

Through March 17, 1997 (the date the land purchases were completed), the  
General Partner expended approximately $547,000 (including accrued but    
unpaid expenses) consisting of engineering, architectural expenses, legal 
 fees, other expenditures and certain operating expenses. Upon closing under
the land purchases (see Note 1-a), the General Partner assigned and       
transferred these expenses, including related rights and interests, to the
Partnership.                                                              

Costs aggregating $116,743 during 1996, incurred by the General Partner in
connection with the Confidential Private Offering and Regulation A        
  Offering, including $98,409 paid to a company in which a Limited Partner has
 an interest, were transferred to the Partnership during 1996 and charged to
partners' equity as a reduction of the proceeds received.                 

Costs incurred by the General Partner in connection with the SB-2 Offering
aggregating $44,850 during 1997, were transferred to the Partnership and  
charged to partners' equity as a reduction of the proceeds received.      

In connection with the above costs, upon closing under one of the land    
purchase agreements, the Partnership delivered to the General Partner a   
subordinated negotiable note bearing interest at 5.81%, payable on demand 
to the General Partner, in the amount of $118,000, representing           
approximately 1% of the anticipated total capitalization of the           
Partnership, for reimbursement of deferred development costs incurred by  
the General Partner.                                                      

  The cost of the golf facility under construction and offering costs incurred
during the year ended December 31, 1997, include $637,859 and $40,233,    
respectively, paid to companies in which certain Limited Partners have an 
interest.                                                                 

Operating expenses for the year ended December 31, 1997, and cumulative   
during development stage, include $192,726 incurred by the General Partner
 on behalf of the Partnership, and $822 paid to a company in which a Limited
Partner has an interest.                                                  

4. COMMITMENTS                                                                  

a. Engineering, Land Surveying and Environmental Services                 

 The Partnership is committed under an agreement for engineering, land
surveying and environmental services for total fees of approximately
  $102,000. The General Partner assigned its rights under this agreement
to the Partnership simultaneously with the land purchases (see Note 
1-a).                                                               

F-14  

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LOOKAWAY PARTNERS 
----------------- 
(A Development Stage Limited Partnership) 

NOTES TO FINANCIAL STATEMENTS 
----------------------------- 

4. COMMITMENTS (Continued)                                                      

b. Design and Inspection Agreement                                        

The Partnership is committed under an agreement for the design and  
inspection of the construction of the golf facility. The agreement  
 provides for total fees of $400,000, however, the Partnership has the
   right to defer or abandon any of the work provided the designer is paid
   in full for all services previously rendered. The fees will increase 6%
  annually, since construction was not begin prior to December 31, 1996.
The General Partner assigned its rights under this agreement to the 
Partnership simultaneously with the land purchases (see Note 1-a).  

c. Construction of Golf Facility                                          

   At December 31, 1997, the total estimated cost to complete construction
of the golf facility is approximately $4,000,000; the Partnership is
committed for approximately $500,000 of this amount.                

5. FAIR VALUE OF FINANCIAL INSTRUMENTS                                          

 Statement of Financial Accounting Standards No. 107, Disclosures about Fair
 Value of Financial Instruments, requires disclosure of estimated fair value
of all financial instruments for which it is practicable to estimate fair 
value.                                                                    

The carrying amount of cash and the amount due to Founders approximates   
their fair value because of their short maturity.                         

It was not deemed practicable to estimate the fair value of the amount of 
the demand note payable - General Partner, since this financial instrument
is not readily marketable.                                                

6. SUBSEQUENT EVENTS                                                            

In January, 1998, the Partnership filed a notice of termination of        
registration with the Securities and Exchange Commission to terminate the 
Partnership's duty to file reports required under the Securities Exchange 
Act of 1934 for periods after December 31, 1997.                          

In connection with the land purchases (see Note 1-a), the General Partner 
was to receive five warrants for Partnership interests each exercisable at
$1.00 upon the sale of 195 Units of the Partnership. In March, 1998, the  
General Partner rescinded its right to receive these warrants.            

F-15  

10KSB 32nd Page of 44 TOC 1st Previous Next ↓Bottom Just 32nd
Stockholders and Directors                                                      
Paunnacussing Founders, Inc.                                                    
Doylestown, Pennsylvania                                                        

INDEPENDENT AUDITOR'S REPORT  
----------------------------  

 We have audited the accompanying balance sheet of PAUNNACUSSING
FOUNDERS, INC. (A Development Stage Company) as of December 31, 1997. This      
balance sheet is the responsibility of the Company's management. Our            
responsibility is to express an opinion on this balance sheet based on our      
audit.                                                                          

       We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to        
obtain reasonable assurance about whether the financial statements are free of  
material misstatement. An audit includes examining, on a test basis, evidence   
supporting the amounts and disclosures in the financial statements. An audit    
also includes assessing the accounting principles used and significant          
estimates made by management, as well as evaluating the overall financial       
statement presentation. We believe that our audit provides a reasonable basis   
for our opinion.                                                                

      In our opinion, the balance sheet referred to above presents fairly,
in all material respects, the financial position of Paunnacussing Founders,     
Inc. as of December 31, 1997, in conformity with generally accepted accounting  
principles.                                                                     

                                                FISHBEIN & COMPANY, P.C.

Elkins Park, Pennsylvania                                                       
February 2, 1998 (March 19, 1998                                                
as to Note 6)                                                                 

F-16  

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PAUNNACUSSING FOUNDERS, INC.  
----------------------------  

BALANCE SHEET 
------------- 

DECEMBER 31, 1997 
----------------- 

ASSETS  
------  

CURRENT ASSETS                                                                  
Demand note receivable - Lookaway Partners (Includes                      
  accrued interest at 5.81% of $5,822)                            $  123,822
 Prepaid expenses and other current assets                               625
                                                                  ----------
      Total current assets                                           124,447

INVESTMENT IN LOOKAWAY PARTNERS                                          3,086  
                                                                  ----------

                                                                  $  127,533
                                                                  ==========

LIABILITIES AND STOCKHOLDERS' EQUITY  
------------------------------------  

CURRENT LIABILITY                                                               
 Accounts payable and accrued expenses                            $      226
                                                                  ----------

COMMITMENTS (Note 4)                                                            

STOCKHOLDERS' EQUITY                                                            
Common stock - No par value                                               
Authorized 1,000 shares                                                 
   Issued and outstanding 625 shares                                 125,000
 Retained earnings                                                     2,307
                                                                  ----------

                                                                     127,307
                                                                  ----------

                                                                  $  127,533
                                                                  ==========
PLEASE NOTE THAT A PURCHASER OF UNITS OF LOOKAWAY PARTNERS                      
HAS NOT PURCHASED AN INTEREST IN THE COMPANY WHOSE                            
BALANCE SHEET APPEARS ABOVE                                                   

See notes to balance sheet.                                                     

F-17  

10KSB 34th Page of 44 TOC 1st Previous Next ↓Bottom Just 34th
PAUNNACUSSING FOUNDERS, INC.  
----------------------------  

NOTES TO BALANCE SHEET  
----------------------  

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                                   

a. Organization and Nature of Business                                    

    Paunnacussing Founders, Inc. (the Company) was incorporated in November,
    1994, and is the general partner of Lookaway Partners (the Partnership),
which was formed as a limited partnership under the laws of the     
    Commonwealth of Pennsylvania in November, 1995. The Partnership owns, is
developing and will operate a golf facility located in Central Bucks
County, Pennsylvania.                                               

 In March, 1997, the Company completed the purchase of a 216-acre site
for the golf facility. Simultaneously with the closings, the Company
   assigned its rights and obligations under the real estate agreements to
the Partnership.                                                    

b. Use of Estimates                                                       

 The presentation of financial statements in conformity with generally
    accepted accounting principles requires management 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 from those 
estimates.                                                          

c. Investment in Lookaway Partners                                        

    The Company's 1% interest in the Partnership (see Note 1-a) is stated at
equity because of its ability to exercise significant influence.    

d. Income Taxes                                                           

  The Company has elected to be an S Corporation under the provisions of
    the Internal Revenue Code and the Pennsylvania S Corporation Statute. As
a result, income and losses of the Company are passed through to its
stockholders for federal and state income tax purposes.             

2. DEMAND NOTES RECEIVABLE - LOOKAWAY PARTNERS                                  

Upon closing under one of the land purchase agreements (see Note 1-a), the
 Partnership delivered to the Company a subordinated negotiable note bearing
interest at 5.81%, payable on demand to the Company, in the amount of     
$118,000, representing approximately 1% of the anticipated total          
capitalization of the Partnership, for reimbursement of deferred          
development costs incurred by the Company.                                

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PAUNNACUSSING FOUNDERS, INC.  
----------------------------  

NOTES TO BALANCE SHEET  
----------------------  

3. INVESTMENT IN LOOKAWAY PARTNERS                                              

Following is a summary of financial position and results of operations of 
the Partnership as of and for the year ended December 31, 1997 (see Note  
1-c):                                                                     

Current assets                         $1,388,973               
Property and equipment - Net            7,495,187               
                        ----------

                         8,884,160
                        ----------
Current liabilities                       617,482               
Long-term liabilities                      30,000               
                        ----------
                           647,482
                        ----------
Partners' equity                       $8,236,678               
                        ==========
Revenues                               $   96,060               
                        ==========

Net loss                               $  391,425               
                        ==========

4. STOCKHOLDERS' EQUITY                                                         

Under a private offering consisting of 25 Units ($675,000), 15 of which   
were Series 1 Units at $25,000 per Unit, and 10 of which were Series 2    
Units at $30,000 per Unit, all of the Series 1 Units and 6 of the Series 2
Units were issued as of December 31, 1995. In January, 1996, the 4        
remaining Series 2 Units were issued. Each Unit consists of 25 shares of  
the common stock of the Company (the General Partner), one Founders       
Partnership Warrant and one Trailing Partnership Warrant.                 

The purchase price for each Unit is allocated as follows:                 

                                                    Series 1        Series 2
                                                   Units           Units
                                                    ----------      ----------
   Common stock of the Company                      $    5,000      $    5,000
Equity of the Partnership (not the Company)                             
      Founders Partnership Warrant                      19,999          24,999
      Trailing Partnership Warrant                           1               1
                                                    ----------      ----------

                                                    $   25,000      $   30,000
                                                    ==========      ==========

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PAUNNACUSSING FOUNDERS, INC.  
----------------------------  

NOTES TO BALANCE SHEET  
----------------------  

5. FAIR VALUE OF FINANCIAL INSTRUMENTS                                          

 Statement of Financial Accounting Standards No. 107, Disclosures about Fair
 Value of Financial Instruments, requires disclosure of estimated fair value
of all financial instruments for which it is practicable to estimate fair 
value.                                                                    

 It was not deemed practicable to estimate the fair value of the demand note
receivable - Lookaway Partners and the investment in Lookaway Partners,   
since these financial instruments are not readily marketable.             

6. SUBSEQUENT EVENT                                                             

In connection with the land purchases (see Note 1-a), the Company was to  
receive five warrants for Partnership interests each exercisable at $1.00 
upon the sale of 195 Units of the Partnership. In March 1998, the Company 
rescinded its right to receive these warrants.                            

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ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS OR ACCOUNTING AND         
FINANCIAL DISCLOSURE.                                                           

None.                                                                           

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;           
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.                              

The business of the Partnership is managed by the Corporation, as General       
Partner, and the General Partner will make any "investment decisions" for the   
Partnership. The address and telephone number of the General Partner is the     
same as that of the Partnership.                                                

The General Partner is a Pennsylvania corporation incorporated in November      
1995. Its directors and officers are the Series 1 Founders named below and its  
stockholders are the 25 Founders. The General Partner was incorporated for the  
purpose of serving as the vehicle for the pursuit of the establishment of what  
has become the Club. After the execution of the several agreements relating to  
the acquisition of the Buckingham Properties and the agreement with Rees Jones, 

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the General Partner caused the organization of the Partnership in November      
1995. The General Partner does not at present engage in any business activity   
except as relates to the Partnership.                                           

At settlement under the Lookaway Agreement in February 1997, the Partnership    
delivered to the General Partners its promissory note and mortgage for          
$118,000. Subsequent to December 31, 1997, the General Partner amended the      
Partnership Agreement effective ab initio to eliminate its right to receive     
five General Partners Warrants as compensation for services rendered.           

Each of the individuals named below is a Series 1 Founder and is the holder of  
securities of the Partnership and General Partner. The names of the executive   
officers and directors of the Corporation are as follows:                       

NAME                                         POSITION                           

J. Bruce McKissock                           President and Class A Director     
Harry J. Ferguson                            Vice President and Class A Director
William B. Waldman                           Treasurer and Class A Director     
Martin Woldow                                Secretary and Class B Director     
Kevin MacDonald                              Class B Director                   
Ira Gouterman                                Class B Director                   
Robert H. Jeter                              Class C Director                   
Peter P. Stratil                             Class C Director                   
James R. Yarrington                          Class D Director                   
Patrick J. O'Neill                           Class D Director                   
James C. Urban                               Class D Director                   
John Voltz                                   Class E Director                   
John Van Luvanee                             Class E Director                   
James A. Collins                             Class E Director                   

J. Bruce McKissock is a founding partner of the law firm of McKissock &         
Hoffman, with offices in Philadelphia and Doylestown, and has practiced law     
for more than the past five years.                                              

Harry J. Ferguson has been employed by Merrill Lynch Pierce Fenner and Smith,   
Princeton, NJ, for more than the past five years and is currently First         
Vice-President, Real Estate.                                                    

William B. Waldman for more than the past five years has been president of      
Waldman Sales Corp., the president of Simplicity Inc., a manufacturer of        
juvenile furniture, and the chairman of the board and president of L.E.G.       
Inc., a manufacturer of candy.                                                  

Martin Woldow for more than the past five years has been president and chief    
operating officer of a New Hope, Pennsylvania, restaurant.                      

Kevin MacDonald for more than the past 12 years been self-employed in the       
insurance industry as an international claims auditor and adjusting service,    
and CEO of Specialty Assistance Services, a travel medical emergency company,   
with office locations in Doylestown, Pennsylvania; Atlanta, Georgia; London,    
England; and Johannesburg, South Africa.                                        

Ira Gouterman, M.D., has been a practicing dermatologist for more than the      
past five years.                                                                

Robert H. Jeter has been employed by Merrill Lynch Pierce Fenner Smith,         
Princeton, New Jersey, for the last three years as a contract manager, where    
his work relates to construction management. For the 20 years prior thereto,    
Mr.                                                                             
Jeter was employed by Huber, Hunt & Nichols in the same capacity.               

Peter P. Stratil for the past five years has been employed by Victaulic         
Company of America, Easton, Pennsylvania, a privately-owned manufacturer of     
pipe couplings, fittings and valves. Mr. Stratil is corporate materials         
manager, responsible for purchasing, production control and distribution.       

James R. Yarrington for more than five years has been employed as the           
president and general manager of Yarrington Mills Corp., a knitting mill.       

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Patrick J. O'Neill for more than five years has been a vice-president of        
Ethicon, Inc., a Johnson & Johnson Company. He has held positions of            
vice-president, research and development and vice-president, new business       
development.                                                                    

James C. Urban for more than the past five years has been employed in the       
sales department of Interstate Steel Company, Philadelphia, Pennsylvania,       
Currently, Mr. Urban is a sales manager.                                        

John Voltz for the last two years has worked as a manufacturer's                
representative in his own business supplying capital equipment to the           
semi-conductor industry. For the three years prior thereto, Mr. Voltz was the   
director, North-American and European Sales, for Plasma and Material            
Technologies Corp.                                                              

John Van Luvanee is an attorney licensed to practice law in Pennsylvania. For   
more than the past five years he has been a partner or shareholder in the law   
firm of Eastburn & Gray, Doylestown, Pennsylvania. He is presently corporate    
secretary of Eastburn & Gray.                                                   

James A. Collins for more than the past five years has been employed in the     
sales department of Interstate Steel Company, Philadelphia, Pennsylvania,       
Currently, Mr. Collins is a sales manager.                                      

Compensation of Officers and Directors. It is not intended that any director    
or officer of the General Partner will receive any compensation for services    
rendered as such. The Corporation reimburses its officers and directors for     
any reasonable expenses which they incur on behalf of the Corporation or the    
Partnership. All directors and officers are holders of a Founders Partnership   
Warrant and a Trailing Warrant. See "Certain Relationships and Related          
Transactions."                                                                  

Board of Directors of the General Partner. The by-laws of the Corporation       
provide that the Board of Directors of the Corporation consist of up to         
fifteen (15) persons, each of whom is entitled to one vote. As of the date      
hereof, there is one vacancy on the Board.                                      

Term of Office of Initial Founders as Directors. Pursuant to the terms of the   
Amended and Restated Subscription and Founders Agreement as amended (the        
"Founders Agreement"), Series 1 Founders serve as directors of the Corporation  
(the "Initial Directors") for a term (the "Initial Directors' Term") beginning  
with the acceptance by the Corporation of their subscription to purchase a      
Series 1 Unit and continuing until no less than five (5) years after the        
opening of the Club, subject to the conditions as hereafter described.          
Pursuant to the Founders Agreement, each Founder has agreed, in his capacity    
as a shareholder of the Corporation, to vote his Shares in favor of the         
election of the Series 1 Founders as the directors of the Corporation at each   
meeting of shareholders at which directors of the Corporation shall be elected  
during the Initial Directors' Term. During such time, in the event of a         
vacancy on the Board, the Series 2 Founders are be eligible for nomination for  
and election to the Board of Directors of the Corporation. Upon expiration of   
an Initial Directors' Term of each Director, Articles IV and IX of the By-Laws  
of the Club, provide that the Board shall consist of not less then nine (9)     
and not more than fifteen (15) Limited Partners who shall be nominated by the   
Limited Partners and elected by the shareholders of the Corporation to three    
(3) year terms. A minimum of one third (1/3) of the Board shall be              
shareholders of the Corporation but it shall be the Limited Partners, as a      
class, who shall nominate, at each annual meeting of the Partners at which      
nominations to the Board are to be presented, members for election to the       
Board.                                                                          

Classifications of Directors. For purposes of determining the duration of the   
Initial Directors' Term of office of each Founder, the Series 1 Founders are    
divided into five (5) classes, with each class consisting of three (3)          
persons. The classification of a Series 1 Founder for these purposes is a       
function of the date upon which such Series 1 Founder's subscription was        
accepted by the Corporation. The by-laws of the Corporation provide that the    
first directors to stand for election upon the expiration of the Initial        
Directors' Term shall be Class E directors, followed in the next year by Class  
D directors, followed in the next year by Class C directors, etc. Assuming      
that the Club opens in 1998 (as to which no assurances can be given), the       
expiration date of the Initial Directors' Term of office of Series 1 Founders   
would be as follows:                                                            

Class                               Year in Which Term Expires
-----                               --------------------------

E                                             2004      
D                                             2005      
C                                             2006      
B                                             2007      
A                                             2008      

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The actual date of the first meeting of shareholders of the Corporation for     
the election of directors upon the expiration of the Initial Directors' Term    
shall be determined by the Board of Directors of the Corporation, but shall be  
no later than five (5) years and six (6) months after the opening of the Club.  

Term of Office of Initial Officers. Pursuant to the terms of the Founders       
Agreement, the Initial Officers of the Corporation shall serve as the officers  
of the Corporation until such time as the Club shall have been open for a one   
(1) year period (the "Initial Officers' Term"). Each Founder agreed to vote as  
a director in favor of the election of the Initial Officers as aforementioned   
at any meeting of directors at which officers of the Corporation shall be       
elected during the Initial Officers' Term. After the expiration of the Initial  
Officers' Term, the Board of Directors of the Corporation shall elect officers  
in accordance with the by-laws of the Corporation. Under the by-laws of the     
Corporation, during the period of the Initial Officers' Term, the Initial       
Officers may be replaced and vacancies may be filled only for "proper cause"    
within the meaning of the Pennsylvania Business Corporation Law of 1988.        

Duties of Directors. Under the terms of the by-laws of the Corporation, the     
Board of Directors may exercise all powers of the Corporation and do all        
lawful acts and things that are not by statute or by such by-laws directed or   
required to be exercised or done by the shareholders. A director of the         
Corporation stands in a fiduciary relation to the Corporation and shall         
perform his duties as a director, including his duties as a member of any       
committee of the Board upon which he may serve, in good faith, in a manner he   
reasonably believes to be in the best interest of the Corporation, and with     
such care, including reasonable inquiry, skill and diligence, as a person of    
ordinary prudence would use under similar circumstances. Absent breach of       
fiduciary duty, lack of good faith or self-dealing, actions taken as a          
director or any failure to take any action shall be presumed to be in the best  
interest of the Corporation.                                                    

Liability of Directors. Under certain circumstances, a director will be         
personally liable for failing to perform his duties as a director. Pursuant to  
the by-laws of the Corporation, a director of the Corporation shall not be      
personally liable for monetary damages as such for any action taken, or any     
failure to take any action, unless he has both (i) breached or failed to        
perform the duties of his office pursuant to such by-laws or in accordance      
with the standards set forth in certain specified provisions of the             
Pennsylvania Business Corporation Law of 1988 relating to the performance of a  
directors duties and (ii) such breach or failure to perform constitutes         
self-dealing, willful misconduct or recklessness. Other provisions not          
addressed herein apply to the responsibility of a director pursuant to any      
criminal statute or to the liability of a director for the payment of taxes     
pursuant to local, state or federal law.                                        

Limitation of Director Liability; Indemnification of Directors and Officers.    
The personal liability of the General Partner's directors is limited to the     
fullest extent permitted by Pennsylvania law. Under the General Partner's       
by-laws and Pennsylvania Business Corporation Law ("PBCL"), a director shall    
not be personally liable for monetary damages for his or her actions as a       
director unless: (1) the director has breached or failed to perform the duties  
of his office under subchapter 17B of PBCL; and (2) the breach or failure to    
perform constitutes self-dealing, willful misconduct or recklessness.           
Pennsylvania law further provides that this limitation is not available with    
respect to the responsibility or liability of a director pursuant to any        
criminal statute or the liability of a director for the payment of taxes        
pursuant to Federal, state or local law.                                        

Pursuant to the by-laws of the Corporation, each person who was or is made a    
party or is threatened to be made a party to or is involved in any action,      
suit or proceeding (a "proceeding"), whether civil, criminal, administrative    
or investigative, including without limitation, an action or suit by or in the  
right of the Corporation, by reason of the fact that he is or was a director    
or officer of the Corporation, shall be indemnified and held harmless by the    
Corporation to the fullest extent and manner authorized or permitted by the     
laws of the Commonwealth of Pennsylvania, as the same exists or may hereafter   
be amended, against all expense, liability and loss (including attorneys fees)  
reasonably incurred or suffered by such person in connection therewith, and     
such indemnification shall continue as to a person who has ceased to be a       
director or officer and shall inure to the benefit of his heirs, executors and  
administrators. The foregoing right to indemnification is limited where the     
proceeding was initiated by the person seeking the indemnification. Under the   
by-laws of the Corporation, the indemnification shall be made by the            
Corporation unless a determination is reasonably and promptly made that         
indemnification of a director or officer is not proper in the circumstances     
because of the existence of grounds for denying indemnification under such      
by-laws or under applicable law. Such a determination                           

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may be made only by the Board of Directors by a majority vote of a quorum       
consisting of directors who are not parties to such proceeding, by the          
shareholders, or under other specified circumstances.                           

The by-laws of the Corporation provide that the Corporation may maintain        
insurance to protect itself and any director and officer against any such       
expense, liability or loss. The Corporation does not at this time maintain any  
such insurance, nor is it anticipated that any such insurance will be           
obtained.                                                                       

Section 16(a) Compliance                                                        

Not applicable.                                                                 

ITEM 10. EXECUTIVE COMPENSATION.                                                

No compensation was awarded to any officer or director of the General Partner   
in 1997, except to the extent to which the sale of the Trailing Warrants,       
which were acquired by all Founders as part of their purchase of their          
Founders' Interests, might be considered as such. Nor was any compensation      
paid to the General Partner in 1997, except to the extent to which the          
reimbursement by the Partnership of $118,000 of expenses incurred by the        
General Partner in connection with the project might be considered as such.     

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.        

Each of the officers and directors of the General Partner is the holder of one  
Partnership Interest except for one person, who is the holder of two            
Partnership Interests as a result of his exercise of his Trailing Warrant. As   
of February 2, 1998, 13 of the Founders had sold their Trailing Warrants in     
the SB-2 Offering, and the balance of the Founders were expected to sell their  
Trailing Warrants in such offering prior to December 31, 1998.                  

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.                        

The 25 Founders are expected to receive a life-time preferential reduction in   
annual membership dues upon becoming a member of the Club (the "Founders Dues   
Preference"). It is anticipated that the Founders Dues Preference will be the   
lowest rate charged in the dues structure. If the Founders Partnership          
Interest is jointly owned with a spouse or transferred to a spouse upon the     
death of a Founder, the benefits and privileges of the Founders Dues            
Preference shall continue to the death of the survivor. Upon the death of such  
survivor or upon any earlier sale of the Founders Partnership Interest, the     
Founders Dues Preference shall lapse and be extinguished.                       

The Founders and the Corporation are each party to the Founders Agreement       
pursuant to which the Founders acquired their Founders Units including their    
interests in the Partnership and the Trailing Warrants sold in the Builders     
Offering. The sale of all of the Trailing Warrants is executed to result in     
proceeds to the Founders of $825,000. The Founders Agreement also provides for  
certain terms relating to the governance of the Corporation, as described       
elsewhere.                                                                      

Under the terms of the Partnership Agreement, in consideration General Partner  
the Corporation's services on behalf of the Project through settlement under    
the Real Estate Agreements, the General Partner was entitled at settlement on   
the Lookaway Agreement to five (5) warrants for Partnership Interests that are  
referred to herein as the General Partner's Warrants. After December 31, 1997,  
the General Partner amended the Partnership Agreement ab initio to eliminate    
the right to receive these warrants . Also at the closing under the Lookaway    
Agreement, the Partnership reimbursed the Corporation the sum of $118,000,      
representing part of the expenses incurred by the Corporation on behalf of the  
Partnership for the Project, by delivery of the Partnership's negotiable        
promissory note, payable on demand. Such note bears interest at the minimum     
rate required so as to avoid the imputation of interest under the applicable    
internal revenue laws of the United States with respect to annual payments of   
interest thereunder. Said note may be recorded but shall be subordinated to     
any financing required by the Partnership to complete the Project or operate    
the Club.                                                                       

Under the terms of the Partnership Agreement, the Corporation, as General       
Partner, and its officers, directors and shareholders and their affiliates may  
receive additional compensation from the Partnership for services performed on  
the                                                                             

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Partnership's behalf, provided that such compensation is on terms no less       
favorable to the Partnership than the terms on which such services would be     
available from independent third parties.                                       

Under the terms of the Partnership Agreement, upon a vote of a majority of the  
directors, a Founder may make a loan to the Corporation or the Partnership.     
Such loans shall be upon such terms and conditions as the Board of Directors    
of the Corporation and the lender shall agree, but all Founders shall be        
entitled to interest at no more than                                            

the then prevailing prime rate of interest plus one percent (1%) and shall be   
entitled to receive collateral for any loans made, including the granting of a  
mortgage on any of the Buckingham Properties. If any such mortgage is granted,  
however, the Founder shall subordinate such mortgage to any institutional       
financing that is later secured. Any such mortgage shall further restrict the   
lender from declaring a default in the repayment of the note. No Founder shall  
be required to cross-guaranty any loan made by any other Founder.               

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.                                      

(a) Exhibits. The Exhibits listed in the accompanying Index to Exhibits are     
filed as part of, or incorporated by reference, into this report:       

                                   INDEX TO EXHIBITS

Exhibit                                                                         
Number Description                                                        Filing

3(a)      Agreement of Limited Partnership of Lookaway Partners           (1)   
3(b)      By-laws of Lookaway Golf Club                                   (1)   
4         Subscription Agreement                                                
10(a)     Agreement as amended with Carl A. Swanson, Rodney G.                  
Montgomery and Thomas E. Murphree, co-executors and       
co-trustees under the will of Theodore Sterling, deceased,
   and Carl A. Swanson, Jr., executor of the estate of Marion P.
        Sterling, deceased                                             (1)
10(b)     Agreement with Scott L. King                                    (1)   
(c)     Agreement with Carl A. Swanson and Sarah S. Swanson             (1) 
(d)     Agreement with Rodney E. Montgomery and Helen S.                    
        Montgomery                                                     (1)
(e)     Agreement with Janet S. Murphree                                (1) 
(f)     Agreement with Rees Jones, Inc.                                 (1) 
(g)     Agreement with Club Marketing, Inc.                             (1) 
(h)     Amendment and Restated Founders and Subscription Agreement      (1) 
(h)(i)  Amendment No. 1 to Amended and Restated Founders and                
        Subscription Agreement                                         (1)
10(i)    Ground Lease By and Between Lookaway Partners (Lessee)          (2)  
   and Rodney E. Montgomery, Jr. and Helen S. Mongomery (Lessor)
        dated February 24, 1997                                        (2)
10(j)     Ground Lease By and Between Lookaway Partners (Lessee) and            
Carl A. Swanson, Jr. and Sarah S. Swanson (Lessor)        
        dated February 24, 1997                                        (2)
10(k)     Agreement between Lookaway Partners and Sandra Palmer           (2)   
10(l)     Form of Promissory Note and Mortgage given by Lookaway Partners       
        in favor of Paunnacussing Founders, Inc.                       (2)

--------------------                                                            
(1)   Incorporated by reference to the Offering Statement on Form I-A filed     
with the Northeast Regional Office of the Securities and Exchange   
Commission (File No. 24-8830-NY).                                   
(2)   Incorporated by reference to the Registration Statement Form SB-2 filed   
    with the Securities and Exchange Commission declared effective April 22,
1997 (File No. 333-6454).                                           

(b) Reports on Form 8-K. No Reports on Form 8-K were filed during the last      
quarter of the period covered by this Report.                           

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SIGNATURES  

In accordance with Section 13 or 15 (d) of the Exchange Act, the Registrant     
has caused this report to be signed on its behalf by the undersigned,           
thereunto duly authorized.                                                      

LOOKAWAY PARTNERS   

By:      PAUNNACUSSING FOUNDERS, INC.,  
General Partner       

March  5, 1998      By:      /s/ J. Bruce McKissock                             
 -----------------------
J. Bruce McKissock    
                   President and Chief Executive Officer and
director              

In accordance with the Exchange Act, this report has been signed below by the   
following persons on behalf of the Registrant and in the capacities and on the  
dates indicated:                                                                

March 5, 1998                /s/ J. Bruce McKissock                             
 -----------------------
J. Bruce McKissock    
                   President and Chief Executive Officer and
director              

March 5, 1998                /s/ Harry J. Ferguson                              
--------------------- 
Harry J. Ferguson     
                        Vice President and Chief Financial Officer and
               director of General Partner of Issuer

            ----------------------------------
William B. Waldman    
                             Treasurer and director of General Partner of Issuer

March 5, 1998                /s/ Martin Woldow                                  
-----------------     
Martin Woldow         
                             Secretary and director of General Partner of Issuer

March 7, 1998                /s/Kevin MacDonald                                 
------------------    
Kevin MacDonald       
               director of General Partner of Issuer

            ----------------------------------
Ira Gouterman         
               director of General Partner of Issuer

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March 5, 1998                /s/ Robert Jeter                                   
               -------------------------------------
Robert Jeter          
               director of General Partner of Issuer

March 7,1998                 /s/ Peter P.Stratil                                
               -------------------------------------
Peter P. Stratil      
               director of General Partner of Issuer

               -------------------------------------
James R. Yarrington   
               director of General Partner of Issuer

               -------------------------------------
Patrick J. O'Neill    
               director of General Partner of Issuer

March 7, 1998                /s/ James C. Urban                                 
               -------------------------------------
James C. Urban        
               director of General Partner of Issuer

March 7, 1998                /s/ John Voltz                                     
               -------------------------------------
John Voltz            
               director of General Partner of Issuer

John A. VanLuvanee  
                 -------------------------------------
                 director of General Partner of Issuer

                 -------------------------------------
James A. Collins    
                 director of General Partner of Issuer

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Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘10KSB’ Filing	Date	First	Last	Other Filings

	1/1/03	24		None on these Dates
	1/1/99	10
	12/31/98	41
	9/30/98	5
Filed on:	3/31/98	29
	3/19/98	15	32
	3/7/98	43	44
	3/5/98	43	44
	2/2/98	3	41
	1/1/98	10
	12/31/97	1	41
	4/22/97	12	42
	3/31/97	22
	3/17/97	9	30
	2/24/97	9	42
For Period End:	12/31/96	14	31
	9/16/96	4
	6/11/96	27
	12/31/95	26	35
	11/17/95	3	20
	11/1/95	10
	10/30/95	5
	10/10/95	9
	7/12/95	5
	6/28/95	9
	3/17/95	5
	7/30/94	10
				List all Filings

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Filing Submission 0000950116-98-000756 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

Lookaway Partners – ‘10KSB’ for 12/31/96

As of: Tuesday, 3/31/98 · For: 12/31/96 · Accession #: 950116-98-756 · File #: 333-06354

Annual Report — Small Business — Form 10-KSBFiling Table of Contents

Document Table of Contents

Dates Referenced Herein and Documents Incorporated by Reference

Annual Report — Small Business — Form 10-KSB
Filing Table of Contents