-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, M0naaHQ+IYG/i1wnZEfeH0zYuF/pMKK4glbmGd82v4/iUrb2qOBySrYXvScjCAMH NPYeZlcnb8wPoNtSJqii3A== 0000950134-98-000221.txt : 19981116 0000950134-98-000221.hdr.sgml : 19981116 ACCESSION NUMBER: 0000950134-98-000221 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971119 ITEM INFORMATION: FILED AS OF DATE: 19980114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INCOME OPPORTUNITY REALTY INVESTORS INC /TX/ CENTRAL INDEX KEY: 0000949961 STANDARD INDUSTRIAL CLASSIFICATION: 6798 IRS NUMBER: 752615944 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 001-14784 FILM NUMBER: 98506643 BUSINESS ADDRESS: STREET 1: 10670 N CENTRAL EXPRSWY STE 300 CITY: DALLAS STATE: TX ZIP: 75231 BUSINESS PHONE: 2146924700 MAIL ADDRESS: STREET 1: 10670 NORTH CENTRAL EXPRESSWAY STREET 2: SUITE 600 CITY: DALLAS STATE: TX ZIP: 75231 8-K/A 1 AMENDMENT TO FORM 8-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K/A CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 November 19, 1997 ----------------------------------------------- Date of Report (Date of Earliest Event Reported) INCOME OPPORTUNITY REALTY INVESTORS, INC. ---------------------------------------------------- (Exact Name of Registrant as Specified in its Charter) Nevada 1-9525 75-2615944 - - ------------------------------------------------------------------------------- (State of Incorporation) (Commission (IRS Employer File No.) Identification No.) 10670 North Central Expressway, Suite 300, Dallas, TX 75231 - - ------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, Including Area Code: (214) 692-4700 --------------- Not Applicable ----------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) 1 2 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS This Form 8-K/A amends a Form 8-K Current Report, dated November 19, 1997 and filed December 3, 1997 by Income Opportunity Realty Investors, Inc. (the "Company") and provides required financial statements that were not available at the date of the original filing. (a) Pro forma financial information: Pro forma statements of operations are presented for the year ended December 31, 1996 and the nine months ended September 30, 1997. A pro forma balance sheet as of September 30, 1997 is also presented. A summary of the pro forma transactions follows: On November 19, 1997, the Company purchased the Westlake Village Office Building in Westlake Village, California, for $3.9 million exclusive of commissions and closing costs. The Company acquired the property from RBP #5 Limited. The Company paid $1.0 million in cash and obtained new mortgage financing for the remaining $2.9 million of the purchase price. The mortgage bears interest at a variable rate, currently 9.75%, requires monthly payments of principal and interest of $26,258 and matures in October 2002. In addition to the Westlake Village Office Building acquisition discussed above, the Company has purchased two office buildings, one in La Mesa, California, in May 1997, and the other in Chantilly, Virginia, in January 1997 and two apartment complexes, one in Houston, Texas, in June 1997 and the other in Dallas, Texas, also in June 1997. The properties were purchased for a total of $32.6 million. The Company paid a total of $7.5 million in cash and financed the remainder of the purchase prices. The mortgages secured by the properties bear interest at variable rates ranging from 8.375% to 10.75% per annum and mature in 1999 and 2007. As these acquisitions occurred prior to September 30, 1997 they are already included in the Company's September 30, 1997 Consolidated Balance Sheet, as presented. In 1997, the Company has also sold two apartment complexes, the Plumtree Apartments in March 1997 and the Porticos Apartments in June 1997. In connection with the sales, the Company received net cash totaling $6.8 million. As these sales occurred prior to September 30, 1997 they are already excluded from the Company's September 30, 1997 Consolidated Balance Sheet, as presented. These pro forma statements of operations present the Company's operations as if the purchase and sale transactions described above had occurred at the beginning of each of the periods presented. [THIS SPACE INTENTIONALLY LEFT BLANK.] 2 3 INCOME OPPORTUNITY REALTY INVESTORS, INC. PRO FORMA CONSOLIDATED BALANCE SHEET SEPTEMBER 30, 1997
Westlake Village Office Assets Actual(1) Building(2) Pro forma ------ --------- ---------- --------- (dollars in thousands) Notes and interest receivable Performing ...................... $ 2,007 $ -- $ 2,007 -------- -------- -------- 2,007 -- 2,007 Less - allowance for estimated losses .......................... -- -- -- -------- -------- -------- 2,007 -- 2,007 Foreclosed real estate held for sale, net of accumulated depreciation .................... 1,029 -- 1,029 Less - allowance for estimated losses .......................... -- -- -- -------- -------- -------- 1,029 -- 1,029 Real estate held for investment, net of accumulated depreciation ........ 67,873 4,155 72,028 Investments in partnerships ........ 1,729 -- 1,729 Cash and cash equivalents .......... 1,077 (945) 132 Other assets ....................... 2,550 (211) 2,339 -------- -------- -------- $ 76,265 $ 2,999 $ 79,264 ======== ======== ======== Liabilities and Shareholders' Equity - - ------------------------------------ Liabilities Notes and interest payable ......... $ 48,537 $ 2,925 $ 51,462 Other liabilities .................. 2,923 74 2,997 -------- -------- -------- 51,460 2,999 54,459 Commitments and contingencies Shareholders' equity Common Stock, $.01 par value; 10,000,000 shares; issued and outstanding, 1,519,888 shares .......................... 15 -- 15 Paid-in capital .................... 64,804 -- 64,804 Accumulated distributions in excess of accumulated earnings ........................ (40,014) -- (40,014) -------- -------- -------- 24,805 -- 24,805 -------- -------- -------- $ 76,265 $ 2,999 $ 79,264 ======== ======== ========
- - ------------------------------------ (1) Includes the Chuck Yeager Building which was acquired in January 1997, La Mesa Village Plaza which was acquired in May 1997 and La Monte Park and Renaissance Parc Apartments which were acquired in June 1997 and excludes the Plumtree Apartments that were sold in March 1997 and the Porticos Apartments which were sold in June 1997. (2) Assumes acquisition by the Company on September 30, 1997. 3 4 INCOME OPPORTUNITY REALTY INVESTORS, INC. PRO FORMA STATEMENT OF OPERATIONS NINE MONTHS ENDED SEPTEMBER 30, 1997
Westlake La Mesa Other Village Village Apartment Office Actual (1) Plaza (2) Complexes(2)(3) Building(2) Sales(2) Pro forma ---------- ------------- --------------- -------------- ----------- ---------- (dollars in thousands) Income Rents ..................... $ 8,759 $ 785 $ 1,832 $ 380 $ (1,969) $ 9,787 Interest .................. 203 -- -- -- (7) 196 ---------- ---------- ---------- -------- ---------- ---------- 8,962 785 1,832 380 (1,976) 9,983 Expenses Property operations ....... 4,083 173 652 150 (1,305) 3,753 Interest .................. 2,859 305 805 213 (443) 3,739 Depreciation .............. 1,131 87 248 62 (160) 1,368 Advisory fee to affiliate . 379 -- -- -- -- 379 Net income fee to affiliate 218 -- -- -- -- 218 General and administrative 755 -- -- -- -- 755 --------- ---------- ---------- -------- ---------- ---------- 9,425 565 1,705 425 (1,908) 10,212 Net income (loss) from operations ................ (463) 220 127 (45) (68) (229) Equity in income of investees .. 21 -- -- -- -- 21 Gain on sale of real estate .... 3,322 -- -- -- -- 3,322 ---------- ---------- ---------- -------- ---------- ---------- Net income (loss) .............. $ 2,880 $ 220 $ 127 $ (45) $ (68) $ 3,114 ========== ========== ========== ======== ========== ========== Earnings per share Net (loss) ................ $ 1.89 $ 2.05 ========== ========== Weighted average shares of Common Stock used in computing earnings per share .............. 1,519,888 1,519,888 ========== ==========
- - ------------------------- (1) Includes the Chuck Yeager Building acquired January 8, 1997. (2) Assumes purchase or sale by the Company on January 1, 1997. Pro forma amounts for other property acquisitions are from January 1 through respective dates of acquisition. Results subsequent to the date of acquisition are included in the "Actual" column. (3) Includes the Renaissance Parc and La Monte Park Apartments whose results of operations are separately presented in the Company's Current Report on Form 8-K/A, dated June 11, 1997. 4 5 INCOME OPPORTUNITY REALTY INVESTORS, INC. PRO FORMA STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1996
Westlake Other Other Village Commercial Apartment Office Actual Properties(1)(2) Complexes(1)(3) Building(1) Sales(1) Pro forma ---------- ---------------- --------------- ----------- ------------ --------- (dollars in thousands) Income Rents .......................... $ 8,666 $ 2,312 $ 3,164 $ 507 $ (4,341) $ 10,308 Interest ....................... 339 -- -- -- (15) 324 -------- ------- -------- -------- -------- -------- 9,005 2,312 3,164 507 (4,356) 10,632 Expenses Property operations ............ 4,358 552 1,156 200 (2,515) 3,751 Interest ....................... 2,629 897 1,346 284 (1,291) 3,865 Depreciation ................... 1,128 272 405 83 (454) 1,434 Advisory fee to affiliate ...... 227 -- -- -- -- 227 General and administrative ..... 1,316 -- -- -- -- 1,316 -------- ------- -------- -------- -------- -------- 9,658 1,721 2,907 567 (4,260) 10,593 Income (loss) from operations ....... (653) 591 257 (60) (96) 39 Equity in losses of investees ....... 85 -- -- -- -- 85 -------- ------- -------- -------- -------- -------- Net income (loss) ................... $ (568) $ 591 $ 257 $ (60) $ (96) $ 124 ======== ======== ======== ======== ======== ======== Earnings per share Net income (loss).......... $ (.37) $ .08 ======== ======== Weighted average shares of Common Stock used in computing earnings per share...................... 1,530,008 1,530,008 ========= =========
- - --------------- (1) Assumes purchase or sale by the Company on January 1, 1996. (2) Includes the Chuck Yeager Office Building and La Mesa Village Plaza whose results of operations are separately presented in the Company's Current Report on Form 8-K, dated May 14, 1997. (3) Includes the Renaissance Parc and La Monte Park Apartments whose results of operations are separately presented in the Company's Current Report on Form 8-K/A, dated June 11, 1997. 5 6 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (b) Financial statements of property acquired:
Exhibit Number Description - - ------- --------------------------------------------------------------- 99.0 La Mesa Village Plaza, Audited Statement of Revenue and Direct Operating Expenses for the year ended December 31, 1996 (incorporated by reference to Exhibit No. 99.0 of the Registrant's Current Report on Form 8-K, dated May 14, 1997). 99.1 Chuck Yeager Building, Audited Statement of Revenue and Direct Operating Expenses for the year ended December 31, 1996 (incorporated by reference to Exhibit No. 99.1 of the Registrant's Current Report on Form 8-K, dated May 14, 1997). 99.2 Renaissance Parc Apartments, Audited Statement of Revenue and Direct Operating Expenses for the year ended December 31, 1996 (incorporated by reference to Exhibit No. 99.2 of the Registrant's Current Report on Form 8-K, dated June 11, 1997). 99.3 La Monte Park Apartments, Audited Statement of Revenue and Direct Operating Expenses for the year ended December 31, 1996 (incorporated by reference to Exhibit 99.3 of the Registrant's Current Report on Form 8-K/A, dated June 11, 1997). 99.4 Westlake Village Office Building, Audited Statement of Revenue and Direct Operating Expenses for the year ended December 31, 1996, filed herewith.
------------------------------------ SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereto duly authorized. INCOME OPPORTUNITY REALTY INVESTORS, INC. Date: January 14, 1998 By: /s/ Thomas A. Holland ------------------------ ------------------------------- Thomas A. Holland Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) 6 7 INCOME OPPORTUNITY REALTY INVESTORS, INC. EXHIBITS TO CURRENT REPORT ON FORM 8-K Dated November 19, 1997
Exhibit Page Number Description Number 99.4 Westlake Village Office Building, Audited State- 8 ment of Revenue and Direct Operating Expenses for the year ended December 31, 1996.
7 EX-99.4 2 AUDITED STATEMENT OF REVENUE - WESTLAKE VILLAGE 1 EXHIBIT 99.4 WESTLAKE VILLAGE OFFICE BUILDING STATEMENT OF REVENUES AND DIRECT OPERATING EXPENSES YEAR ENDED DECEMBER 31, 1996 8 2 Independent Auditors' Report To the Board of Trustees Income Opportunity Realty Investors, Inc. We have audited the accompanying statement of revenues and direct operating expenses of Westlake Village Office Building for the year ended December 31, 1996. This statement of revenues and direct operating expenses is the responsibility of the Property's management. Our responsibility is to express an opinion on this statement of revenues and direct operating expenses 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 statement of revenues and direct operating expenses is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the statement of revenues and direct operating expenses. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall statement of revenues and direct operating expenses presentation. We believe that our audit provides a reasonable basis for our opinion. The accompanying financial statement is prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission (for inclusion in Form 8-K of Income Opportunity Realty Investors, Inc.) and, as described in Note 1, is not intended to be a complete presentation of the results of operations. In our opinion, the statement of revenues and direct operating expenses referred to above presents fairly, in all material respects, the revenues and direct operating expenses of Westlake Village Office Building for the year ended December 31, 1996, in conformity with generally accepted accounting principles. FARMER, FUQUA, HUNT & MUNSELLE, P.C. Dallas, Texas January 6, 1998 9 3 WESTLAKE VILLAGE OFFICE BUILDING STATEMENT OF REVENUES AND DIRECT OPERATING EXPENSES Year Ended December 31, 1996 REVENUES Net rental revenues $ 504,330 Late fees 3,002 -------------- Total revenues 507,332 OPERATING EXPENSES Repairs and maintenance 94,746 Utilities 58,527 Property taxes 37,832 Insurance 8,519 -------------- Total direct operating expenses 199,624 REVENUES IN EXCESS OF DIRECT OPERATING EXPENSES $ 307,708 ==============
The accompanying notes are an integral part of this statement. 10 4 WESTLAKE VILLAGE OFFICE BUILDING NOTES TO STATEMENT OF REVENUES AND DIRECT OPERATING EXPENSES December 31, 1996 NOTE 1: ORGANIZATION AND BASIS OF PRESENTATION Westlake Village Office Building is a 45,500 square foot office building located in Westlake Village, California. During 1996, the property was owned by RBP #5 Limited. The accompanying financial statement does not include a provision for depreciation and amortization, bad debt expense, interest expense or income taxes. Accordingly, this statement is not intended to be a complete presentation of the results of operations. NOTE 2: ACCOUNTING ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. NOTE 3: SUBSEQUENT EVENT The property was sold to Income Opportunity Realty Investors, Inc., a Nevada corporation, on November 19, 1997. 11 -----END PRIVACY-ENHANCED MESSAGE-----