8-K/A 1 eightka.txt 8-K/A SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------------------------------- FORM 8-K/A CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) August 12, 2002 CEDAR INCOME FUND, LTD. -------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) Maryland 0-14510 42-1241468 -------------------------------------------------------------------------------- (State or other (Commission (IRS Employer Jurisdiction of File Number) Identification No.) Incorporation) 44 South Bayles Avenue, Port Washington, New York 11050 -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (516) 767-6492 ________________________________________________________________________________ (Former name or former address, if changed since last report) Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant hereby amends the following items, financial statements, exhibits or other portions of its current Report on Form 8-K dated May 29, 2002, as filed with the Securities and Exchange Commission on June 13, 2002, as set forth in the pages attached hereto. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits ------------------------------------------------------------------ Acquisition Property Report of Independent Auditors Statement of Revenues and Expenses Notes to Statements of Revenues and Certain Expenses Unaudited Pro Forma Consolidated Financial Statements Pro Forma Condensed Consolidated Balance Sheet as of March 31, 2002 (unaudited) Pro Forma Condensed Consolidating Statement of Operations for the three months ended March 31, 2002 (unaudited) Pro Forma Condensed Consolidating Statement of Operations for the year ended December 31, 2001 Notes to the Pro Forma Financial Statements Exhibits. None STATEMENTS OF REVENUES AND CERTAIN EXPENSES API Red Lion Shopping Center Associates, L.P. For the three months ended March 31, 2002 (unaudited) and the years ended December 31, 2001, 2000 and 1999 API Red Lion Shopping Center Associates, L.P. Statements of Revenus and Certain Expenses For the three months ended March 31, 2002 (unaudited) and the years ended December 31, 2001, 2000 and 1999 Contents Report of Independent Auditors.................................................1 Statements of Revenues and Certain Expenses....................................2 Notes to Statements of Revenue and Certain Expenses..........................3-4 Report of Independent Auditors Board of Directors and Stockholders Cedar Income Fund, Ltd. We have audited the statements of revenues and certain expenses of API Red Lion Shopping Center Associates, L.P. (the "Company") which has been acquired by Cedar Income Fund, Ltd., as described in Note 1, for the years ended December 31, 2001, 2000 and 1999. The financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. 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. The accompanying statements of revenues and certain expenses were prepared for the purpose of complying with Rule 3-14 of Regulation S-X of the Securities and Exchange Commission for inclusion in Form 8-K of Cedar Income Fund, Ltd. and are not intended to be a complete presentation of the company's revenues and expenses. In our opinion, the financial statements referred to above present fairly, in all material respects, the revenues and certain expenses of the Company as described in Note 1 for the years ended December 31, 2001, 2000 and 1999, in conformity with accounting principles generally accepted in the United States. New York, New York August 9, 2002 1 API Red Lion Shopping Center Associates, L.P. Statements of Revenues and Certain Expenses
Three months ended March 31, Years ended December 31, 2002 (Unaudited) 2001 2000 1999 ------------ ------ ------ ------ Revenues Base rents $ 538,766 $ 2,273,340 $ 2,494,080 $ 2,064,887 Tenant reimbursements 151,802 485,892 566,206 533,013 Other income 1,238 16,562 39,836 -- --------- ----------- ----------- ----------- Total rental revenue 691,806 2,775,794 3,100,122 2,597,900 --------- ----------- ----------- ----------- Certain expenses: Real estate taxes 85,910 207,885 231,212 219,548 Management fees 23,282 109,364 125,331 103,085 Property operating expenses 107,821 385,479 399,688 424,440 Bad debt expense -- 44,594 -- -- --------- ----------- ----------- ----------- Total certain expenses 217,013 747,322 756,231 747,073 --------- ----------- ----------- ----------- Revenues in excess of certain expenses $ 474,793 $ 2,028,472 $ 2,343,891 $ 1,850,827 ========= =========== =========== ===========
See accompanying notes to financial statement. 2 API Red Lion Shopping Center Associates, L.P. Notes to Statements of Revenues and Certain Expenses December 31, 2001 1. Basis of Presentation Presented herein are the statements of revenues and certain expenses related to the operation of a multi-tenant shopping center. API Red Lion Shopping Center Associates, L.P. operates a community shopping center ("Red Lion") in northeast Philadelphia, Pennsylvania. Red Lion has approximately 224,000 square feet of leaseable retail space. Cedar Income Fund, Ltd., on May 31, 2002 purchased a 20% general partners interest for approximately $1,183,000. Also, on May 31, 2002, ARC Asset Management purchased a 69% limited partners interest for approximately $4,108,000. The statements of revenues and certain expenses for the three months ended March 31, 2002 is unaudited; however, in the opinion of management, all adjustments (consisting solely of normal recurring adjustments) necessary for a fair presentation of the statements of revenues and certain expenses for this interim period has been included. The results of interim periods are not necessarily indicative of the results to be obtained for a full fiscal year. The accompanying financial statements have been prepared in accordance with the applicable rules and regulations of the Securities and Exchange Commission for the acquisition of real estate properties. Accordingly, the financial statements exclude certain expenses that may not be comparable to those expected to be incurred by the Company in the proposed future operations of the aforementioned property. Items excluded consist of interest, depreciation and general and administrative expenses not directly related to the future operations. 2. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. 3 API Red Lion Shopping Center Associates, L.P. Notes to Statements of Revenues and Certain Expenses (continued) 3. Revenue Recognition Red Lion is being leased to tenants under operating leases. Minimum rental income is generally recognized on a straight-line basis over the term of the lease. The excess of amounts so recognized over amounts due pursuant to the underlying leases amounted to approximately $8,000 (unaudited) for the 3 months ended March 31, 2002, $34,000, 64,000 and 48,000 for the years ended December 31, 2001, 2000 and 1999, respectively. 4. Management Agreements Red Lion incurs management fees, based on 3% of gross collections (as defined). The management services provided by the affiliate are terminable upon ninety days' notice. 5. Property Operating Expenses Property operating expenses for the years ended December 31, 2001, 2000 and 1999, respectively include $26,751, $21,082 and $23,298 for insurance, $31,892, $31,338 and $82,171 for utilities, $133,527, $159,762 and $134,266 for use and occupancy taxes, $83,130, $80,780 and $89,140 in repair and maintenance costs, $49,257, $62,649, and $63,716 in administrative costs, $60,922, $44,077 and $31,849 in payroll (maintenance). 2001 operating expenses also include $44,594 in bad debt expense. Property operating expenses for the three months ended March 31, 2002 (unaudited) include $7,328 for insurance, $10,015 for utilities, $48,238 for use and occupancy taxes, $12,506 for repairs and maintenance costs, $20,938 for administrative costs and $8,802 for payroll costs. 6. Significant Tenants The five most significant tenants constitute approximately 76%, 75%, and 86% of rental revenue in 2001, 2000 and 1999, respectively. 4 API Red Lion Shopping Center Associates, L.P. Notes to Statements of Revenues and Certain Expenses (continued) 7. Future Minimum Rents Schedule Future minimum lease payments to be received by Red Lion as of December 31, 2001, under noncancelable operating leases are as follows: 2001 ------ 2002 $ 2,095,148 2003 2,115,252 2004 2,125,000 2005 1,904,846 2006 1,542,284 Thereafter 9,604,641 ----------- Total $19,387,171 =========== The lease agreements generally contain provisions for reimbursement of real estate taxes and operating expenses over base year amounts, as well as fixed increases in rent. 5 Pro Forma Condensed Combined Balance Sheet As of March 31, 2002 -------------------- The following unaudited Pro Forma Condensed Combined Balance Sheet is presented as if the Company had acquired the 20% general partner interest in API Red Lion Shopping Center Associates, LP ("Red Lion") on March 31, 2002 and consolidated Red Lion and completed the refinancing of The Point Shopping Center LLC mortgage payable. This Pro Forma Condensed Combined Balance Sheet should be read in conjunction with the Pro Forma Condensed Combined Statement of Operations of the Company and the historical financial statements and notes thereto of the Company as filed on Form 10-Q for the three months ended March 31, 2002. The Pro Forma Condensed Combined Balance Sheet is unaudited and is not necessarily indicative of what the actual financial position would have been had the Company acquired the 20% interest in Red Lion on March 31, 2002 and consolidated Red Lion, and completed the refinancing of The Point Shopping Center LLC mortgage payable, nor does it purport to represent the future financial position of the Company.
The Point Shopping As Center LLC Pro-Forma Pro Forma Previously Red Lion Mortgage Adjustments March 31, Description Flied (a) Acquisition (b) Refinancing (c) (d) 2002 ------------------------------------------ -------------- -------------------- ---------------- --------------- -------------- Real estate, net 57,063,006 20,475,545 - 173,333 77,711,884 Real estate held for sale - - - - - Improvements - - - - - Escrow 4,821 - - - 4,821 Property deposits 150,000 - - - 150,000 Cash and cash equivalents 2,204,035 (179,942) 917,604 - 2,941,697 Restricted cash 889,757 399,669 - - 1,289,426 Tenant receivables 359,505 183,892 - - 543,397 Deferred financing fees 922,943 678,524 316,000 - 1,917,467 Deferred legal, net 178,936 - - - 178,936 Prepaid expenses 517,808 260,286 - - 778,094 Deferred leasing commissions 606,565 - - - 606,565 Deferred rental income 128,173 - - - 128,173 Taxes held in escrow 241,958 - - - 241,958 -------------- -------------------- ---------------- --------------- -------------- Total assets 63,267,507 21,817,974 1,233,604 173,333 86,492,418 ============== ==================== ================ =============== ============== Liabilities and Stockholders' Equity Mortgage notes payable 46,042,006 16,796,203 20,000,000 - 64,938,209 - - (17,900,000) - - Loans payable 1,592,525 - - - 1,592,525 Accrued expenses and other 1,409,542 992,806 - - 2,402,348 -------------- -------------------- ---------------- --------------- -------------- Total liabilities 49,044,073 17,789,009 2,100,000 - 68,933,082 Minority interest 2,301,845 4,028,965 (732,146) - 5,598,664 Limited partner's interest in Operating Partnership 8,463,087 - (95,452) 123,240 8,490,875 Stockholders' equity Common stock 6,921 - - - 6,921 Additional paid-in capital 3,451,581 - (38,798) 50,093 3,462,876 -------------- -------------------- ---------------- --------------- -------------- Total stockholders' equity 3,458,502 (38,798) 50,093 3,469,797 -------------- -------------------- ---------------- --------------- -------------- Total liabilities and stockholders' equity 63,267,507 21,817,974 1,233,604 173,333 86,492,418 ============== ==================== ================ =============== ==============
See accompanying Notes to Pro Forma Financial Statements 6 Pro Forma Combined Statement of Operations For the three months ended March 31, 2002 ----------------------------------------- The following unaudited Pro Forma Condensed Combined Statement of Operations is presented as if the Company had acquired the 20% general partner interest in the API Red Lion Shopping Center Associates, LP ("Red Lion") as of January 1, 2002 and consolidated Red Lion and completed the refinancing of The Point Shopping Center LLC mortgage payable, and the Company qualified as a REIT, distributed 90% of its taxable income and, therefore, incurred no income tax expense during the period. This Pro Forma Condensed Combined Statement of Operations should be read in conjunction with the Pro Forma Condensed Combined Balance Sheet of the Company and the historical financial statements and notes thereto of the Company as filed on Form 10-Q for the three months ended March 31, 2002. The Pro Forma Condensed Combined Statement of Operations is unaudited and is not necessarily indicative of what the actual financial position would have been had the Company acquired the 20% interest in Red Lion as of January 2002 and consolidated Red Lion and completed the refinancing of The Point Shopping Center LLC mortgage payable, nor does it purport to represent the operations of the Company for future periods.
The Point Shopping Center LLC Pro-Forma Pro Forma Three As Previously Red Lion Mortgage Adjustments Months Ended Description Flied (e) Acquisition (f) Refinancing (g) (h) March 31, 2002 ---------------------------------------- --------------- ---------------- ---------------- -------------- ------------------- Revenues: Base rent 1,618,256 538,766 - 32,012 2,189,034 Tenant escalations 596,070 151,802 - - 747,872 Interest 10,235 1,238 - - 11,473 --------------- ----------------- --------------- -------------- ------------------- Total revenues 2,224,561 691,806 - 32,012 2,948,379 Expenses: Operating expenses 261,967 85,910 - 43,333 391,210 Real estate taxes 365,894 23,282 - - 389,176 Property expenses 330,173 107,821 - - 437,994 --------------- ----------------- --------------- -------------- ------------------- Total operating expenses 958,034 217,013 - 43,333 1,218,380 Interest 784,068 372,615 174,297 - 1,330,980 Depreciation and amortization 365,834 124,033 2,633 - 492,500 --------------- ----------------- --------------- -------------- ------------------- Total expenses 2,107,936 713,661 176,930 43,333 3,041,860 Net income (loss) before minority interests and limited partner's interest in Operating Partnership: 116,625 (21,855) (176,930) (11,321) (93,481) Minority interests (66,606) 17,484 88,465 (25,610) 13,733 Limited partner's interest (39,145) 3,100 62,899 26,191 53,045 --------------- ----------------- --------------- -------------- ------------------- Net income (loss) 10,874 (1,271) (25,566) (10,739) (26,703) =============== ================= =============== ============== =================== Basic and Diluted Net Income per Share 0.02 (0.00) (0.04) (0.02) (0.04) =============== ================= =============== ============== ===================
See accompanying notes to Pro Forma Financial Statements 7 Pro Forma Combined Statement of Operations For the twelve months ended December 31, 2001 --------------------------------------------- The following unaudited Pro Forma Condensed Combined Statement of Operations is presented as if the Company had acquired the 20% general partner interest in the API Red Lion Shopping Center Associates, LP ("Red Lion") as of January 1, 2001 and consolidated Red Lion and completed the refinancing of The Point Shopping Center LLC mortgage payable, and the Company qualified as a REIT, distributed 90% of its taxable income and, therefore, incurred no income tax expense during the period. This Pro Forma Condensed Combined Statement of Operations should be read in conjunction with the Pro Forma Condensed Combined Balance Sheet of the Company and the historical financial statements and notes thereto of the Company as filed on Form 10-K for the year ended December 31, 2001. The Pro Forma Condensed Combined Statement of Operations is unaudited and is not necessarily indicative of what the actual financial position would have been had the Company acquired the 20% interest in Red Lion as of January 1, 2001, consolidated Red Lion, and completed the refinancing of The Point Shopping Center LLC mortgage payable, nor does it purport to represent the operations of the Company for future periods.
The Point Shopping Red Lion Center LLC Pro-Forma December 31, As Previously Acquisition Mortgage Adjustments 2001 Description Flied (i) (j) Refinancing (k) (l) Pro Forma ----------------------------------------- ----------------- ------------------ ------------------ ------------- --------------- Revenues: Base rent 2,997,308 2,273,340 - 84,088 5,354,736 Tenant escalations 794,672 485,892 - - 1,280,564 Interest 281,494 16,562 - - 298,056 ----------------- ------------------ ------------------ ------------- --------------- Total revenues 4,073,474 2,775,794 - 84,088 6,933,356 ================= ================== ================== ============= =============== Expenses: Property expenses 682,896 207,885 - 173,333 1,064,114 Real estate taxes 387,901 109,364 - - 497,265 Bad debt expense - 44,594 - - 44,594 Administrative 796,522 385,479 - - 1,182,001 ----------------- ------------------ ------------------ ------------- --------------- Total operating expenses 1,867,319 747,322 - 173,333 2,787,974 Interest 1,705,859 1,516,791 697,188 - 3,919,838 Depreciation and amortization 690,940 496,131 10,533 - 1,197,604 ----------------- ------------------ ------------------ ------------- --------------- Total expenses 4,264,118 2,760,244 707,721 173,333 7,905,416 Net (loss) income before minority interests, limited partner's interest, loss on impairment, and gain (loss) on (190,644) 15,550 (707,721) (89,245) (972,060) sales Minority interest (44,129) (12,440) 353,861 (67,270) 230,022 Limited partners' interest (812,872) (2,211) 251,594 111,282 (452,207) Loss on impairment - - - - - Gain on sale 1,638,416 - - - 1,638,416 Loss on sale (295,610) - - - (295,610) ----------------- ------------------ ------------------ ------------- --------------- Net (loss) income before extraordinary item and cumulative effect adjustment 295,161 899 (102,266) (45,233) 148,561 Extraordinary item: Early extinguishment of debt (net of limited partner's interest of ($187,834) (76,312) - - - (76,312) Cumulative effect of change in accounting principles, net of limited partner's share of ($14,723) (6,014) - - - (6,014) ----------------- ------------------ ------------------ ------------- --------------- Net (loss) income 212,835 899 (102,266) (45,233) 66,235 ================= ================== ================== ============= =============== Basic and Diluted Net Income per Share 0.31 0.00 (0.15) (0.07) 0.09 ================= ================== ================== ============= ===============
See accompanying notes to Pro Forma Financial Statements 8 Notes to Pro Forma Financial Statements --------------------------------------- Pro Forma Condensed Combined Balance Sheet a. Reflects the Company's balance sheet as filed as part of the 8-K dated June 7, 2002. b. Reflects the acquisition of the 20% interest in the API Red Lion Shopping Center Associates, LP and the consolidation of API Red Lion Shopping Center Associates, LP. c. Reflects the refinancing of The Point Shopping Center LLC mortgage loan payable. d. Reflects the adjustment related to the certificate for 83,333 warrants issued in connection with the API Red Lion Shopping Center Associates, LP transaction. Additional warrants for equal amounts are scheduled to be issued in the next two following calendar years, subject to certain additional performance requirements by the grantee. Pro Forma Condensed Combined Statements of Operations for the three months ended March 31, 2002 e. Reflects the operations of the Company for the three months ended March 31, 2002 as filed as part of the 8-K dated June 7, 2002. f. Reflects the acquisition of the 20% interest in the API Red Lion Shopping Center Associates, LP and the consolidation of API Red Lion Shopping Center Associates, LP. g. Reflects the refinancing of The Point Shopping Center LLC mortgage loan payable. h. Reflects pro-forma adjustment related to the straight-line rent adjustment, for the acquisition of the 20% interest in API Red Lion Shopping Center Associates, LP and the adjustment related to the issuance of the certificate for 83,333 warrants, with no further transactions being completed. Additional warrants for equal amounts are scheduled to be issued in the next two following calendar years, subject to certain additional performance requirements by the grantee. Pro forma Condensed Combined Statements of Operations for the Year Ended December 31, 2001 i. Reflects the operations of the Company for the year ended December 31, 2001 as filed as part of the 8-K dated June 7, 2002. j. Reflects the acquisition of the 20% interest in the API Red Lion Shopping Center Associates, LP and the consolidation of API Red Lion Shopping Center Associates, LP. k. Reflects the refinancing of The Point Shopping Center LLC mortgage loan payable. l. Reflects pro-forma adjustments related to the straight-line rent adjustment, for the acquisition of the 20% interest in API Red Lion Shopping Center Associates, LP and the adjustment related to the issuance of the certificate for 83,333 warrants, with no further transactions being completed. Additional warrants for equal amounts are scheduled to be issued in the next two following calendar years, subject to certain additional performance requirements by the grantee. 9 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Amendment to be signed on its behalf by the undersigned thereunto duly authorized. CEDAR INCOME FUND, LTD. By: /s/ Leo S. Ullman -------------------------- Leo S. Ullman Chairman Dated: August 12, 2002 CERTIFICATION ------------- I, Leo S. Ullman, Chief Executive Officer of the Cedar Income Fund, Ltd. (the "Company"), pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, do hereby certify as follows: 1. The interim Pro Forma report on Form 8-K/A of the Company dated August 12, 2002, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in such Form 8-K/A fairly presents, in all material respects, the financial condition and results of operations of the Company. IN WITNESS WHEREOF, I have executed this Certification this 12th day of August, 2002. /s/ Leo S. Ullman -------------------------------------- Leo S. Ullman, Chief Executive Officer I, Brenda J. Walker, Acting Chief Financial Officer of the Cedar Income Fund, Ltd. (the "Company"), pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, do hereby certify as follows: 3. The interim Pro Forma report on Form 8-K/A of the Company dated August 12, 2002, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 4. The information contained in such Form 8-K/A fairly presents, in all material respects, the financial condition and results of operations of the Company. IN WITNESS WHEREOF, I have executed this Certification this 12th day of August, 2002. /s/ Brenda J. Walker -------------------------------------- Brenda J. Walker, Acting Chief Financial Officer