UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
x | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2015
OR
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file no. 33-13437
DEL TACO INCOME PROPERTIES IV
(A California limited partnership)
(Exact name of registrant as specified in its charter)
California | 33-0241855 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification Number) |
25521 Commercentre Drive Lake Forest, California |
92630 | |
(Address of principal executive offices) | (Zip Code) |
(949) 462-9300
(Registrants telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ¨ | Accelerated filer | ¨ | |||
Non-accelerated filer | x (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
DEL TACO INCOME PROPERTIES IV
PAGE NUMBER | ||||
PART I. FINANCIAL INFORMATION |
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Condensed Balance Sheets at September 30, 2015 (Unaudited) and December 31, 2014 |
3 | |||
4 | ||||
Condensed Statements of Cash Flows for the nine months ended September 30, 2015 and 2014 (Unaudited) |
5 | |||
6 | ||||
Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations |
9 | |||
Item 3. Quantitative and Qualitative Disclosures About Market Risk |
11 | |||
11 | ||||
PART II. OTHER INFORMATION |
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12 | ||||
13 |
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PART I. FINANCIAL INFORMATION
ITEM I. | FINANCIAL STATEMENTS |
CONDENSED BALANCE SHEETS
September 30, | December 31, | |||||||
2015 | 2014 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
CURRENT ASSETS: |
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Cash |
$ | 141,323 | $ | 118,794 | ||||
Receivable from Del Taco LLC |
40,826 | 39,830 | ||||||
Other current assets |
624 | 732 | ||||||
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Total current assets |
182,773 | 159,356 | ||||||
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PROPERTY AND EQUIPMENT: |
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Land |
868,344 | 868,344 | ||||||
Land improvements |
368,356 | 368,356 | ||||||
Buildings and improvements |
1,289,860 | 1,289,860 | ||||||
Machinery and equipment |
484,789 | 484,789 | ||||||
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3,011,349 | 3,011,349 | |||||||
Less-accumulated depreciation |
1,794,084 | 1,766,445 | ||||||
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1,217,265 | 1,244,904 | |||||||
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$ | 1,400,038 | $ | 1,404,260 | |||||
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LIABILITIES AND PARTNERS EQUITY | ||||||||
CURRENT LIABILITIES: |
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Payable to limited partners |
$ | 22,448 | $ | 20,152 | ||||
Accounts payable |
48,960 | 17,074 | ||||||
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Total current liabilities |
71,408 | 37,226 | ||||||
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OBLIGATION TO GENERAL PARTNER |
137,953 | 137,953 | ||||||
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PARTNERS EQUITY: |
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Limited partners; 165,375 units outstanding at September 30, 2015 and December 31, 2014 |
1,209,904 | 1,247,924 | ||||||
General partner-Del Taco LLC |
(19,227 | ) | (18,843 | ) | ||||
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1,190,677 | 1,229,081 | |||||||
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$ | 1,400,038 | $ | 1,404,260 | |||||
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See accompanying notes to condensed financial statements.
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CONDENSED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
RENTAL REVENUES |
$ | 123,741 | $ | 118,504 | $ | 363,163 | $ | 343,866 | ||||||||
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EXPENSES: |
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General and administrative |
38,050 | 22,158 | 128,507 | 72,162 | ||||||||||||
Depreciation |
9,213 | 9,213 | 27,639 | 27,639 | ||||||||||||
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47,263 | 31,371 | 156,146 | 99,801 | |||||||||||||
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Operating income |
76,478 | 87,133 | 207,017 | 244,065 | ||||||||||||
OTHER INCOME: |
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Interest |
36 | 36 | 96 | 99 | ||||||||||||
Other |
600 | 750 | 2,475 | 1,045 | ||||||||||||
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Net income |
$ | 77,114 | $ | 87,919 | $ | 209,588 | $ | 245,209 | ||||||||
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Net income per limited partnership unit (Note 2) |
$ | 0.46 | $ | 0.53 | $ | 1.25 | $ | 1.47 | ||||||||
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Number of units used in computing per unit amounts |
165,375 | 165,375 | 165,375 | 165,375 | ||||||||||||
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See accompanying notes to condensed financial statements.
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CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended | ||||||||
September 30, | ||||||||
2015 | 2014 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net income |
$ | 209,588 | $ | 245,209 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: |
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Depreciation |
27,639 | 27,639 | ||||||
Changes in operating assets and liabilities: |
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Receivable from Del Taco LLC |
(996 | ) | 174 | |||||
Other current assets |
108 | 75 | ||||||
Payable to limited partners |
2,296 | (135 | ) | |||||
Accounts payable |
31,886 | 7,774 | ||||||
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Net cash provided by operating activities |
270,521 | 280,736 | ||||||
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CASH FLOWS FROM FINANCING ACTIVITIES: |
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Cash distributions to partners |
(247,992 | ) | (287,567 | ) | ||||
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Net cash used in financing activities |
(247,992 | ) | (287,567 | ) | ||||
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Net change in cash |
22,529 | (6,831 | ) | |||||
Beginning cash balance |
118,794 | 126,862 | ||||||
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Ending cash balance |
$ | 141,323 | $ | 120,031 | ||||
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See accompanying notes to condensed financial statements.
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NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2015
UNAUDITED
NOTE 1 BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements and should therefore be read in conjunction with the financial statements and notes thereto contained in the annual report on Form 10-K for the year ended December 31, 2014 for Del Taco Income Properties IV (the Partnership or the Company). In the opinion of management, all adjustments (consisting of normal recurring accruals) necessary to present fairly the Partnerships financial position at September 30, 2015, the results of operations for the three and nine month periods ended September 30, 2015 and 2014 and cash flows for the nine month periods ended September 30, 2015 and 2014 have been included. Operating results for the three and nine months ended September 30, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015. Amounts related to disclosure of December 31, 2014 balances within these condensed financial statements were derived from the 2014 audited financial statements.
Management has evaluated events subsequent to September 30, 2015 through the date that the accompanying condensed financial statements were filed with the Securities and Exchange Commission (SEC) for transactions and other events which may require adjustment of and/or disclosure in such financial statements.
NOTE 2 NET INCOME PER LIMITED PARTNERSHIP UNIT
Net income per limited partnership unit is based on net income attributable to the limited partners (after one percent allocation to the general partner) using the weighted average number of units outstanding during the periods presented, which amounted to 165,375 in 2015 and 2014.
Pursuant to the partnership agreement, annual partnership income or loss is allocated one percent to Del Taco LLC, formerly known as Del Taco Inc., (Del Taco or the General Partner) and 99 percent to the limited partners. Partnership gains from any sale or refinancing will be allocated to the limited partners until the limited partners receive their unrecovered portion of capital contributions as defined in the partnership agreement and then allocated one percent to the General Partner and 99 percent to the limited partners until the limited partners receive their priority return as defined in the partnership agreement.
NOTE 3 LEASING ACTIVITIES
The Partnership leases three properties for operation of restaurants to Del Taco on a triple net basis. One of these properties has been subleased to a Del Taco franchisee. The leases are for terms of 32 years commencing with the completion of the restaurant facility located on each property and require monthly rentals equal to 12 percent of the gross sales of the restaurants. The leases expire in the years 2021 to 2022. Pursuant to the lease agreements, minimum rentals of $3,500 per month are due to the Partnership during the first six months of any non-operating period caused by an insured casualty loss.
For the three months ended September 30, 2015, the two restaurants operated by Del Taco, for which the Partnership is the lessor, had combined, unaudited sales of $634,439 and unaudited net income of $28,415 as compared to unaudited sales of $616,717 and unaudited net income of $6,037, respectively, for the corresponding period in 2014. Net income or loss of each restaurant includes charges for general and administrative expenses incurred in connection with supervision of restaurant operations and interest expense and the increase in net income from the corresponding period of the prior year primarily relates to an increase in sales and reduced interest expense. For the three months ended September 30, 2015, the one restaurant operated by a Del Taco franchisee, for which the Partnership is the lessor, had unaudited sales of $396,735 as compared with $370,819 during the same period in 2014.
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DEL TACO INCOME PROPERTIES IV
NOTES TO CONDENSED FINANCIAL STATEMENTS CONTINUED
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2015
UNAUDITED
NOTE 3 LEASING ACTIVITIES continued
For the nine months ended September 30, 2015, the two restaurants operated by Del Taco, for which the Partnership is the lessor, had combined, unaudited sales of $1,870,976 and unaudited net income of $65,817 as compared to unaudited sales of $1,802,890 and unaudited net income of $8,807 for the corresponding period in 2014. Net income or loss of each restaurant includes charges for general and administrative expenses incurred in connection with supervision of restaurant operations and interest expense and the increase in net income from the corresponding period of the prior year primarily relates to an increase in sales and reduced interest expense. For the nine months ended September 30, 2015, the one restaurant operated by a Del Taco franchisee, for which the Partnership is the lessor, had unaudited sales of $1,155,380 as compared with unaudited sales of $1,062,658 during the same period in 2014.
NOTE 4 TRANSACTIONS WITH DEL TACO
The receivable from Del Taco consists primarily of rent accrued for the month of September 2015. The September rent receivable was collected in October 2015.
Del Taco serves in the capacity of general partner in other partnerships which are engaged in the business of operating restaurants, and three other partnerships which were formed for the purpose of acquiring real property in California for construction of Mexican-American restaurants for lease under long-term agreements to Del Taco for operation under the Del Taco trade name.
In addition, see Note 5 with respect to certain distributions to the General Partner.
NOTE 5 DISTRIBUTIONS
Total cash distributions declared and paid in February, June and August 2015 were $87,642, $51,417, and $108,933, respectively. On October 26, 2015, a distribution to the limited partners of $75,612, or approximately $0.46 per limited partnership unit, was approved. Such distribution was paid on November 5, 2015. The General Partner also received a distribution of $764 with respect to its one percent partnership interest in November 2015.
NOTE 6 PAYABLE TO LIMITED PARTNERS
Payable to limited partners represents a reclassification from cash for distribution checks made to limited partners that have remained outstanding for six months or longer.
NOTE 7 CONCENTRATION OF RISK
The three restaurants leased to Del Taco make up all of the income producing assets of the Partnership and contributed all of the Partnerships rental revenues during the three and nine months ended September 30, 2015 and 2014. Therefore, the business of the Partnership is entirely dependent on the success of the Del Taco trade name restaurants that lease the properties.
The Partnership maintains substantially all of its cash and cash equivalents at one major commercial bank. Although the Partnership at times maintains balances that exceed the federally insured limit, it has not experienced any losses related to these balances and management believes the credit risk to be minimal.
- 7 -
DEL TACO INCOME PROPERTIES IV
NOTES TO CONDENSED FINANCIAL STATEMENTS CONTINUED
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2015
UNAUDITED
NOTE 8 PURCHASE AND SALE AGREEMENT
On July 24, 2015, the Partnership entered into a purchase and sale agreement (the Agreement) with Orion Buying Corp. (Orion), an unrelated party, which is subject to approval as described below. Pursuant to the Agreement, and upon the terms and subject to the conditions described therein, Orion agreed to purchase all three properties owned by the Partnership (the Properties) on an as is, where is basis for a total purchase price of $6,945,000 in cash. Pursuant to the terms of the Agreement, Orion is obligated to deposit funds in escrow in an aggregate amount of $125,000.
If the Partnership is in default, and Orion is not in default, in the performance of any of its representations, warranties or covenants under the Agreement, and Orion has satisfied all of its obligations, then Orion may either (i) terminate the Agreement and receive a refund of its deposits and also recover from the Partnership its reasonable out-of-pocket costs in connection with the Agreement (but not to exceed $50,000) as liquidated damages, or (ii) bring a suit for specific performance.
If a contingency to the Partnership closing set forth in the Agreement is not satisfied by December 17, 2015, then the Partnership may terminate the Agreement and Orion will be refunded its deposits. However, if Orion is in default, and the Partnership is not in default, in the performance of any of its representations, warranties or covenants under the Agreement, and the Partnership has satisfied all of its obligations, then the Partnership may terminate the Agreement and receive Orions deposits as liquidated damages.
Following completion of the transaction, the current leases on the Properties will be terminated and the General Partner will lease the Properties from Orion. The sale of the Properties pursuant to the terms and conditions of the Purchase and Sale Agreement is subject to approval of a majority interest of the limited partners of the Partnership and other customary closing conditions related to the sale of real property. A Special Meeting of the limited partners is scheduled for November 23, 2015 for the purpose of considering a proposal to sell all of the properties owned by the partnership. If the transaction is consummated, CBRE, Inc., the real estate broker for the sale of the properties by the Partnership, will receive a commission of 1.5% of the purchase price. If the sale is approved by the majority interest of limited partners of the Partnership, the sale is expected to close during the fourth quarter of 2015.
On September 18, 2015, MacKenzie Realty Capital, Inc. (MacKenzie), a limited partner, filed a Schedule TO initiating a tender offer to purchase all units of the Partnership. This MacKenzie tender offer is unrelated to purchase and sale agreement with Orion. On September 25, 2015, the Partnership filed a Schedule 14D-9 solicitation/recommendation statements in response to the Schedule TO. On November 5, 2015, MacKenzie filed an amendment to its Schedule TO reporting that 4,784 units have been tendered and following purchase of all the tendered units, the purchasers will own an aggregate of approximately 13,613 units, or approximately 8.2% of the total outstanding units.
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Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations |
Liquidity and Capital Resources
Del Taco Income Properties IV (the Partnership or the Company) offered limited partnership units for sale between June 1987 and June 1988. $4,135,375 was raised through the sale of limited partnership units and used to acquire sites and build three restaurants and also to pay commissions to brokers and to reimburse Del Taco LLC (Del Taco or the General Partner) for offering costs incurred. In February of 1992, approximately $442,000 raised during the offering but not required to acquire sites and build restaurants was distributed to the limited partners.
The two restaurants leased to Del Taco and the one restaurant subleased to a Del Taco franchisee make up all of the income producing assets of the Partnership. Therefore, the business of the Partnership is entirely dependent on the success of the Del Taco trade name restaurants that lease the properties. The success of the restaurants is dependent on a large variety of factors, including, but not limited to, competition, consumer demand and preference for fast food, in general, and for Mexican-American food in particular.
Results of Operations
The Partnership owns three properties that are under long-term lease to Del Taco for restaurant operations (Del Taco, in turn, has sub-leased one of the restaurants to a Del Taco franchisee).
The following table sets forth rental revenue earned by restaurant (unaudited):
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Orangethorpe Ave., Placentia, CA |
$ | 51,379 | $ | 50,022 | $ | 151,022 | $ | 147,397 | ||||||||
Lakeshore Drive, Lake Elsinore, CA |
47,608 | 44,498 | 138,646 | 127,519 | ||||||||||||
Highland Ave., Highland, CA |
24,754 | 23,984 | 73,495 | 68,950 | ||||||||||||
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Total |
$ | 123,741 | $ | 118,504 | $ | 363,163 | $ | 343,866 | ||||||||
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The Partnership receives rental revenues equal to 12 percent of gross sales from the restaurants. The Partnership earned rental revenue of $123,741 during the three month period ended September 30, 2015, which represents an increase of $5,237 from the corresponding period in 2014. The Partnership earned rental revenue of $363,163 during the nine month period ended September 30, 2015, which represents an increase of $19,297 from the corresponding period in 2014. The changes in rental revenues between 2014 and 2015 are directly attributable to changes in sales levels at the restaurants under lease due to local competitive and industry factors.
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Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations continued |
The following table breaks down general and administrative expenses by type of expense:
Percent of Total | ||||||||||||||||
General & Administrative Expense | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Accounting fees |
14.39 | % | 24.20 | % | 34.22 | % | 59.12 | % | ||||||||
Distribution of information to limited partners |
14.25 | % | 25.45 | % | 15.89 | % | 25.42 | % | ||||||||
Potential sale-related expenses |
71.36 | % | 50.35 | % | 49.89 | % | 15.46 | % | ||||||||
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100.00 | % | 100.00 | % | 100.00 | % | 100.00 | % | |||||||||
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Prior year percentages above have been reclassified to conform to the current year presentation. General and administrative expenses increased in the three and six month periods due to increased legal and printing costs in connection with the matters described in Note 8.
For the three month period ended September 30, 2015, net income decreased by $10,805 from 2014 to 2015 due to the increase in general and administrative expenses of $15,892 and the decrease in interest and other income of $150, partially offset by the increase in revenues of $5,237. For the nine month period ended September 30, 2015, net income decreased $35,621 from 2014 to 2015 due to the increase in general and administrative expenses of $56,345, partially offset by the increase in revenues of $19,297 and the increase in interest and other income of $1,427.
Significant Recent Accounting Pronouncements
None.
Off-Balance Sheet Arrangements
None
Critical Accounting Policies and Estimates
The Partnerships consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of the financial statements requires significant management judgments, assumptions and estimates about matters that are inherently uncertain. These judgments affect the reported amounts of assets and liabilities and the Partnerships disclosure of contingent assets and liabilities as of the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. With different estimates or assumptions, materially different amounts could be reported in the financial statements. Additionally, other companies may utilize different estimates that may impact the comparability of the Partnerships results of operations to those of companies in similar businesses. A discussion of the accounting policies that management considers critical which involve significant management judgments, assumptions and estimates is included in the Partnerships Annual Report on Form 10-K for the year ended December 31, 2014. There have been no significant changes to the Partnerships policies during 2015.
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Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
None.
Item 4. | Controls and Procedures |
(a) | Evaluation of disclosure controls and procedures: |
As of the end of the period covered by this quarterly report, we carried out an evaluation, under the supervision and with the participation of the Companys management, including the Companys Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Companys disclosure controls and procedures. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Companys disclosure controls and procedures are effective in timely alerting them to material information relating to the Company required to be included in the Companys periodic Securities and Exchange Commission filings.
(b) | Changes in internal controls: |
There were no significant changes in the Companys internal controls over financial reporting that occurred during our most recent fiscal quarter that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
(c) | Asset-backed issuers: |
Not applicable.
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PART II. OTHER INFORMATION
There is no information required to be reported for any items under Part II, except as follows:
Item 6. | Exhibits |
(a) | Exhibits |
31.1 | Paul J. B. Murphy, IIIs Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
31.2 | Steven L. Brakes Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
32.1 | Certification pursuant to subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema Document | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
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Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
DEL TACO INCOME PROPERTIES IV |
(a California limited partnership) |
Registrant |
Del Taco LLC |
General Partner |
Date: November 12, 2015 |
/s/ Steven L. Brake | |||
Steven L. Brake | ||||
Chief Financial Officer | ||||
(Principal Financial Officer) |
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Exhibit 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECURITIES
ACT RULES 13A-14 AND 15D-14 AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Paul J. B. Murphy, III, certify that:
1. | I have reviewed this quarterly (report) on Form 10-Q of Del Taco Income Properties IV; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent function): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: November 12, 2015 | /s/ Paul J. B. Murphy, III | |
Paul J. B. Murphy, III | ||
Chief Executive Officer |
Exhibit 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECURITIES
ACT RULES 13A-14 AND 15D-14 AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Steven L. Brake, certify that:
1. | I have reviewed this quarterly report (report) on Form 10-Q of Del Taco Income Properties IV; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent function): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: November 12, 2015 | /s/ Steven L. Brake | |
Steven L. Brake | ||
Chief Financial Officer | ||
(Principal Financial Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
(SUBSECTIONS (a) AND (b) OF SECTION 1350, CHAPTER 63 OF TITLE 18,
UNITED STATES CODE)
In connection with the Quarterly Report of Del Taco Income Properties IV (the Company) on Form 10-Q for the period ended September 30, 2015 as filed with the Securities and Exchange Commission on the date hereof (the Report), each of the undersigned officers of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report 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 the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.
Date: November 12, 2015 | /s/ Paul J. B. Murphy, III | |
Paul J. B. Murphy, III | ||
Chief Executive Officer | ||
Date: November 12, 2015 | /s/ Steven L. Brake | |
Steven L. Brake | ||
Chief Financial Officer | ||
(Principal Financial Officer) |
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
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Transactions with Del Taco |
9 Months Ended |
---|---|
Sep. 30, 2015 | |
Related Party Transactions [Abstract] | |
Transactions with Del Taco | NOTE 4 – TRANSACTIONS WITH DEL TACO The receivable from Del Taco consists primarily of rent accrued for the month of September 2015. The September rent receivable was collected in October 2015. Del Taco serves in the capacity of general partner in other partnerships which are engaged in the business of operating restaurants, and three other partnerships which were formed for the purpose of acquiring real property in California for construction of Mexican-American restaurants for lease under long-term agreements to Del Taco for operation under the Del Taco trade name. In addition, see Note 5 with respect to certain distributions to the General Partner. |
Leasing Activities |
9 Months Ended |
---|---|
Sep. 30, 2015 | |
Leases [Abstract] | |
Leasing Activities | NOTE 3 – LEASING ACTIVITIES The Partnership leases three properties for operation of restaurants to Del Taco on a triple net basis. One of these properties has been subleased to a Del Taco franchisee. The leases are for terms of 32 years commencing with the completion of the restaurant facility located on each property and require monthly rentals equal to 12 percent of the gross sales of the restaurants. The leases expire in the years 2021 to 2022. Pursuant to the lease agreements, minimum rentals of $3,500 per month are due to the Partnership during the first six months of any non-operating period caused by an insured casualty loss. For the three months ended September 30, 2015, the two restaurants operated by Del Taco, for which the Partnership is the lessor, had combined, unaudited sales of $634,439 and unaudited net income of $28,415 as compared to unaudited sales of $616,717 and unaudited net income of $6,037, respectively, for the corresponding period in 2014. Net income or loss of each restaurant includes charges for general and administrative expenses incurred in connection with supervision of restaurant operations and interest expense and the increase in net income from the corresponding period of the prior year primarily relates to an increase in sales and reduced interest expense. For the three months ended September 30, 2015, the one restaurant operated by a Del Taco franchisee, for which the Partnership is the lessor, had unaudited sales of $396,735 as compared with $370,819 during the same period in 2014.
For the nine months ended September 30, 2015, the two restaurants operated by Del Taco, for which the Partnership is the lessor, had combined, unaudited sales of $1,870,976 and unaudited net income of $65,817 as compared to unaudited sales of $1,802,890 and unaudited net income of $8,807 for the corresponding period in 2014. Net income or loss of each restaurant includes charges for general and administrative expenses incurred in connection with supervision of restaurant operations and interest expense and the increase in net income from the corresponding period of the prior year primarily relates to an increase in sales and reduced interest expense. For the nine months ended September 30, 2015, the one restaurant operated by a Del Taco franchisee, for which the Partnership is the lessor, had unaudited sales of $1,155,380 as compared with unaudited sales of $1,062,658 during the same period in 2014. |
Basis of Presentation |
9 Months Ended |
---|---|
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | NOTE 1 – BASIS OF PRESENTATION The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements and should therefore be read in conjunction with the financial statements and notes thereto contained in the annual report on Form 10-K for the year ended December 31, 2014 for Del Taco Income Properties IV (the Partnership or the Company). In the opinion of management, all adjustments (consisting of normal recurring accruals) necessary to present fairly the Partnership’s financial position at September 30, 2015, the results of operations for the three and nine month periods ended September 30, 2015 and 2014 and cash flows for the nine month periods ended September 30, 2015 and 2014 have been included. Operating results for the three and nine months ended September 30, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015. Amounts related to disclosure of December 31, 2014 balances within these condensed financial statements were derived from the 2014 audited financial statements. Management has evaluated events subsequent to September 30, 2015 through the date that the accompanying condensed financial statements were filed with the Securities and Exchange Commission (“SEC”) for transactions and other events which may require adjustment of and/or disclosure in such financial statements. |
Net Income Per Limited Partnership Unit |
9 Months Ended |
---|---|
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Net Income Per Limited Partnership Unit | NOTE 2 – NET INCOME PER LIMITED PARTNERSHIP UNIT Net income per limited partnership unit is based on net income attributable to the limited partners (after one percent allocation to the general partner) using the weighted average number of units outstanding during the periods presented, which amounted to 165,375 in 2015 and 2014. Pursuant to the partnership agreement, annual partnership income or loss is allocated one percent to Del Taco LLC, formerly known as Del Taco Inc., (Del Taco or the General Partner) and 99 percent to the limited partners. Partnership gains from any sale or refinancing will be allocated to the limited partners until the limited partners receive their unrecovered portion of capital contributions as defined in the partnership agreement and then allocated one percent to the General Partner and 99 percent to the limited partners until the limited partners receive their priority return as defined in the partnership agreement. |
Condensed Balance Sheets (Parenthetical) - shares |
Sep. 30, 2015 |
Dec. 31, 2014 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Limited partners, units outstanding | 165,375 | 165,375 |
Transactions with Del Taco - Additional Information (Detail) |
9 Months Ended |
---|---|
Sep. 30, 2015
Acquisition
| |
Related Party Transactions [Abstract] | |
Number of other partnerships formed for acquisition | 3 |
Document and Entity Information |
9 Months Ended |
---|---|
Sep. 30, 2015
shares
| |
Document And Entity Information [Abstract] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Sep. 30, 2015 |
Document Fiscal Year Focus | 2015 |
Document Fiscal Period Focus | Q3 |
Trading Symbol | DTIPIV |
Entity Registrant Name | DEL TACO INCOME PROPERTIES IV |
Entity Central Index Key | 0000812630 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Non-accelerated Filer |
Entity Common Stock, Shares Outstanding | 165,375 |
Distributions - Additional Information (Detail) - USD ($) |
1 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Oct. 26, 2015 |
Nov. 30, 2015 |
Aug. 31, 2015 |
Jun. 30, 2015 |
Feb. 28, 2015 |
Sep. 30, 2015 |
|
Distribution Made to General and Limited Partner [Line Items] | ||||||
Total cash distributions declared and paid | $ 108,933 | $ 51,417 | $ 87,642 | |||
Distribution to limited partner, approved date | Oct. 26, 2015 | |||||
Distribution to limited partner, distribution date | Nov. 05, 2015 | |||||
Distribution to general partner, distribution date | Nov. 30, 2015 | |||||
Scenario, Forecast [Member] | ||||||
Distribution Made to General and Limited Partner [Line Items] | ||||||
Distributions to general partner | $ 764 | |||||
General partner, partnership interest percentage | 1.00% | |||||
Subsequent Events [Member] | ||||||
Distribution Made to General and Limited Partner [Line Items] | ||||||
Distribution to limited partners amount approved | $ 75,612 | |||||
Distribution to limited partner, per unit amount approved | $ 0.46 |
Condensed Statements of Income - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2015 |
Sep. 30, 2014 |
Sep. 30, 2015 |
Sep. 30, 2014 |
|
Income Statement [Abstract] | ||||
RENTAL REVENUES | $ 123,741 | $ 118,504 | $ 363,163 | $ 343,866 |
EXPENSES: | ||||
General and administrative | 38,050 | 22,158 | 128,507 | 72,162 |
Depreciation | 9,213 | 9,213 | 27,639 | 27,639 |
Total expenses | 47,263 | 31,371 | 156,146 | 99,801 |
Operating income | 76,478 | 87,133 | 207,017 | 244,065 |
OTHER INCOME: | ||||
Interest | 36 | 36 | 96 | 99 |
Other | 600 | 750 | 2,475 | 1,045 |
Net income | $ 77,114 | $ 87,919 | $ 209,588 | $ 245,209 |
Net income per limited partnership unit (Note 2) | $ 0.46 | $ 0.53 | $ 1.25 | $ 1.47 |
Number of units used in computing per unit amounts | 165,375 | 165,375 | 165,375 | 165,375 |
Concentration of Risk |
9 Months Ended |
---|---|
Sep. 30, 2015 | |
Risks and Uncertainties [Abstract] | |
Concentration of Risk | NOTE 7 – CONCENTRATION OF RISK The three restaurants leased to Del Taco make up all of the income producing assets of the Partnership and contributed all of the Partnership’s rental revenues during the three and nine months ended September 30, 2015 and 2014. Therefore, the business of the Partnership is entirely dependent on the success of the Del Taco trade name restaurants that lease the properties. The Partnership maintains substantially all of its cash and cash equivalents at one major commercial bank. Although the Partnership at times maintains balances that exceed the federally insured limit, it has not experienced any losses related to these balances and management believes the credit risk to be minimal. |
Payable to Limited Partners |
9 Months Ended |
---|---|
Sep. 30, 2015 | |
Other Liabilities Disclosure [Abstract] | |
Payable to Limited Partners | NOTE 6 – PAYABLE TO LIMITED PARTNERS Payable to limited partners represents a reclassification from cash for distribution checks made to limited partners that have remained outstanding for six months or longer. |
Payable to Limited Partners - Additional Information (Detail) |
9 Months Ended |
---|---|
Sep. 30, 2015 | |
Payables and Accruals [Abstract] | |
Period of payable outstanding to limited partners | Six months or longer |
Net Income Per Limited Partnership Unit - Additional Information (Detail) - shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2015 |
Sep. 30, 2014 |
Sep. 30, 2015 |
Sep. 30, 2014 |
|
Earnings Per Share [Line Items] | ||||
Percentage of net income allocated to general partner | 1.00% | |||
Weighted average number of units outstanding to limited partners | 165,375 | 165,375 | 165,375 | 165,375 |
General Partner [Member] | ||||
Earnings Per Share [Line Items] | ||||
Percentage of net income allocated to general partner | 1.00% | |||
Percentage of gain on sale and refinancing allocated to General Partner | 1.00% | |||
Limited Partners [Member] | ||||
Earnings Per Share [Line Items] | ||||
Percentage of net income attributable limited partners | 99.00% | |||
Percentage of gain on sale and refinancing allocated to limited partners | 99.00% |
Purchase and Sale Agreement |
9 Months Ended |
---|---|
Sep. 30, 2015 | |
Text Block [Abstract] | |
Purchase and Sale Agreement | NOTE 8 – PURCHASE AND SALE AGREEMENT On July 24, 2015, the Partnership entered into a purchase and sale agreement (the “Agreement”) with Orion Buying Corp. (“Orion”), an unrelated party, which is subject to approval as described below. Pursuant to the Agreement, and upon the terms and subject to the conditions described therein, Orion agreed to purchase all three properties owned by the Partnership (the “Properties”) on an “as is, where is” basis for a total purchase price of $6,945,000 in cash. Pursuant to the terms of the Agreement, Orion is obligated to deposit funds in escrow in an aggregate amount of $125,000. If the Partnership is in default, and Orion is not in default, in the performance of any of its representations, warranties or covenants under the Agreement, and Orion has satisfied all of its obligations, then Orion may either (i) terminate the Agreement and receive a refund of its deposits and also recover from the Partnership its reasonable out-of-pocket costs in connection with the Agreement (but not to exceed $50,000) as liquidated damages, or (ii) bring a suit for specific performance. If a contingency to the Partnership closing set forth in the Agreement is not satisfied by December 17, 2015, then the Partnership may terminate the Agreement and Orion will be refunded its deposits. However, if Orion is in default, and the Partnership is not in default, in the performance of any of its representations, warranties or covenants under the Agreement, and the Partnership has satisfied all of its obligations, then the Partnership may terminate the Agreement and receive Orion’s deposits as liquidated damages. Following completion of the transaction, the current leases on the Properties will be terminated and the General Partner will lease the Properties from Orion. The sale of the Properties pursuant to the terms and conditions of the Purchase and Sale Agreement is subject to approval of a majority interest of the limited partners of the Partnership and other customary closing conditions related to the sale of real property. A Special Meeting of the limited partners is scheduled for November 23, 2015 for the purpose of considering a proposal to sell all of the properties owned by the partnership. If the transaction is consummated, CBRE, Inc., the real estate broker for the sale of the properties by the Partnership, will receive a commission of 1.5% of the purchase price. If the sale is approved by the majority interest of limited partners of the Partnership, the sale is expected to close during the fourth quarter of 2015. On September 18, 2015, MacKenzie Realty Capital, Inc. (“MacKenzie”), a limited partner, filed a Schedule TO initiating a tender offer to purchase all units of the Partnership. This MacKenzie tender offer is unrelated to purchase and sale agreement with Orion. On September 25, 2015, the Partnership filed a Schedule 14D-9 solicitation/recommendation statements in response to the Schedule TO. On November 5, 2015, MacKenzie filed an amendment to its Schedule TO reporting that 4,784 units have been tendered and following purchase of all the tendered units, the purchasers will own an aggregate of approximately 13,613 units, or approximately 8.2% of the total outstanding units. |
Basis of Presentation (Policies) |
9 Months Ended |
---|---|
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements and should therefore be read in conjunction with the financial statements and notes thereto contained in the annual report on Form 10-K for the year ended December 31, 2014 for Del Taco Income Properties IV (the Partnership or the Company). In the opinion of management, all adjustments (consisting of normal recurring accruals) necessary to present fairly the Partnership’s financial position at September 30, 2015, the results of operations for the three and nine month periods ended September 30, 2015 and 2014 and cash flows for the nine month periods ended September 30, 2015 and 2014 have been included. Operating results for the three and nine months ended September 30, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015. Amounts related to disclosure of December 31, 2014 balances within these condensed financial statements were derived from the 2014 audited financial statements. Management has evaluated events subsequent to September 30, 2015 through the date that the accompanying condensed financial statements were filed with the Securities and Exchange Commission (“SEC”) for transactions and other events which may require adjustment of and/or disclosure in such financial statements. |
Net Income Per Limited Partnership Unit | NET INCOME PER LIMITED PARTNERSHIP UNIT Net income per limited partnership unit is based on net income attributable to the limited partners (after one percent allocation to the general partner) using the weighted average number of units outstanding during the periods presented, which amounted to 165,375 in 2015 and 2014. Pursuant to the partnership agreement, annual partnership income or loss is allocated one percent to Del Taco LLC, formerly known as Del Taco Inc., (Del Taco or the General Partner) and 99 percent to the limited partners. Partnership gains from any sale or refinancing will be allocated to the limited partners until the limited partners receive their unrecovered portion of capital contributions as defined in the partnership agreement and then allocated one percent to the General Partner and 99 percent to the limited partners until the limited partners receive their priority return as defined in the partnership agreement. |
Concentration of Risk | CONCENTRATION OF RISK The three restaurants leased to Del Taco make up all of the income producing assets of the Partnership and contributed all of the Partnership’s rental revenues during the three and nine months ended September 30, 2015 and 2014. Therefore, the business of the Partnership is entirely dependent on the success of the Del Taco trade name restaurants that lease the properties. The Partnership maintains substantially all of its cash and cash equivalents at one major commercial bank. Although the Partnership at times maintains balances that exceed the federally insured limit, it has not experienced any losses related to these balances and management believes the credit risk to be minimal. |
Leasing Activities - Additional Information (Detail) |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2015
USD ($)
Restaurants
|
Sep. 30, 2014
USD ($)
Restaurants
|
Sep. 30, 2015
USD ($)
Restaurants
|
Sep. 30, 2014
USD ($)
Restaurants
|
|
Operating Leased Assets [Line Items] | ||||
Number of restaurants leased to Del Taco | 3 | 3 | 3 | 3 |
Number of properties subleased to Del Taco franchisee | 1 | |||
Number of lease years | 32 years | |||
Percentage of gross sales of restaurants | 12.00% | |||
Leases expiration period | 2021 to 2022 | |||
Minimum rentals due to partnership | $ | $ 3,500 | |||
Number of restaurants operated | 2 | 2 | ||
Combined unaudited sales | $ | $ 634,439 | $ 616,717 | $ 1,870,976 | $ 1,802,890 |
Combined unaudited net income | $ | $ 28,415 | 6,037 | $ 65,817 | 8,807 |
Del Taco franchisee [Member] | ||||
Operating Leased Assets [Line Items] | ||||
Number of restaurants operated | 1 | 1 | ||
Combined unaudited sales | $ | $ 396,735 | $ 370,819 | $ 1,155,380 | $ 1,062,658 |
Purchase and Sale Agreement - Additional Information (Detail) - Purchase and Sale Agreement [Member] |
9 Months Ended | ||
---|---|---|---|
Nov. 05, 2015
shares
|
Jul. 24, 2015
USD ($)
Property
|
Sep. 30, 2015 |
|
Subsequent Events [Member] | |||
Purchase And Sale Agreement [Line Items] | |||
Number of units tendered | shares | 4,784 | ||
Purchase of aggregate number of units owned | shares | 13,613 | ||
Percentage of total units outstanding | 8.20% | ||
Orion Buying Corp [Member] | |||
Purchase And Sale Agreement [Line Items] | |||
Number of properties to be sold | Property | 3 | ||
Total purchase price | $ 6,945,000 | ||
Deposit funds in escrow | $ 125,000 | ||
Agreement termination description | If the Partnership is in default, and Orion is not in default, in the performance of any of its representations, warranties or covenants under the Agreement, and Orion has satisfied all of its obligations, then Orion may either (i) terminate the Agreement and receive a refund of its deposits and also recover from the Partnership its reasonable out-of-pocket costs in connection with the Agreement (but not to exceed $50,000) as liquidated damages, or (ii) bring a suit for specific performance. If a contingency to the Partnership closing set forth in the Agreement is not satisfied by December 17, 2015, then the Partnership may terminate the Agreement and Orion will be refunded its deposits. However, if Orion is in default, and the Partnership is not in default, in the performance of any of its representations, warranties or covenants under the Agreement, and the Partnership has satisfied all of its obligations, then the Partnership may terminate the Agreement and receive Orion’s deposits as liquidated damages. Following completion of the transaction, the current leases on the Properties will be terminated and the General Partner will lease the Properties from Orion. The sale of the Properties pursuant to the terms and conditions of the Purchase and Sale Agreement is subject to approval of a majority interest of the limited partners of the Partnership and other customary closing conditions related to the sale of real property. A Special Meeting of the limited partners is scheduled for November 23, 2015 for the purpose of considering a proposal to sell all of the properties owned by the partnership. If the transaction is consummated, CBRE, Inc., the real estate broker for the sale of the properties by the Partnership, will receive a commission of 1.5% of the purchase price. If the sale is approved by the majority interest of limited partners of the Partnership, the sale is expected to close during the fourth quarter of 2015. | ||
CBRE, Inc. [Member] | |||
Purchase And Sale Agreement [Line Items] | |||
Percentage of brokerage commission on total purchase price | 1.50% | ||
Maximum [Member] | Orion Buying Corp [Member] | |||
Purchase And Sale Agreement [Line Items] | |||
Liquidated damages | $ 50,000 |
Condensed Statements of Cash Flows - USD ($) |
9 Months Ended | |
---|---|---|
Sep. 30, 2015 |
Sep. 30, 2014 |
|
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 209,588 | $ 245,209 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 27,639 | 27,639 |
Changes in operating assets and liabilities: | ||
Receivable from Del Taco LLC | (996) | 174 |
Other current assets | 108 | 75 |
Payable to limited partners | 2,296 | (135) |
Accounts payable | 31,886 | 7,774 |
Net cash provided by operating activities | 270,521 | 280,736 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Cash distributions to partners | (247,992) | (287,567) |
Net cash used in financing activities | (247,992) | (287,567) |
Net change in cash | 22,529 | (6,831) |
Beginning cash balance | 118,794 | 126,862 |
Ending cash balance | $ 141,323 | $ 120,031 |
Distributions |
9 Months Ended |
---|---|
Sep. 30, 2015 | |
Equity [Abstract] | |
Distributions | NOTE 5 – DISTRIBUTIONS Total cash distributions declared and paid in February, June and August 2015 were $87,642, $51,417, and $108,933, respectively. On October 26, 2015, a distribution to the limited partners of $75,612, or approximately $0.46 per limited partnership unit, was approved. Such distribution was paid on November 5, 2015. The General Partner also received a distribution of $764 with respect to its one percent partnership interest in November 2015. |
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Concentration of Risk - Additional Information (Detail) |
Sep. 30, 2015
Restaurants
CommercialBank
|
Sep. 30, 2014
Restaurants
|
---|---|---|
Risks and Uncertainties [Abstract] | ||
Number of restaurants leased to Del Taco | Restaurants | 3 | 3 |
Commercial bank | 1 |