8-K 1 eightk.txt 8-K Draft Dated: June 6, 2002 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------------------------------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) May 24, 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) Cedar Income Fund, Ltd. Item 2. Acquisition or Disposition of Assets 1) Sale of the Company's Interest in Southpoint Parkway Center (Jacksonville, Florida): On May 24, 2002, Cedar Income Fund Partnership, L.P. (the "Operating Partnership"), pursuant to a Contract of Sale dated as of February 1, 2002 and Addendum Number One thereto, dated March 20, 2002, sold its interest in Southpoint Parkway Center, Jacksonville, Florida, to Southpoint Parkway Center, L.C. for $4.7 million. The Operating Partnership incurred closing costs and adjustments of approximately $330,000, including brokers' commissions of $172,000 and legal and other closing adjustments of approximately $158,000. Other closing costs included a disposition fee paid to Cedar Bay Realty Advisors, Inc. ("CBRA"), in accordance with the terms of the Administrative and Advisory Agreement between CBRA and the Company, in the amount of $46,750, representing 1% of the sales price. The net sales proceeds of approximately $4,370,000 were used to pay-down the existing $6 million financing entered into with SWH Funding Corp. in connection with the purchase of three supermarket-anchored shopping centers (two in Philadelphia, and one in southern New Jersey) during the fourth quarter of 2001. In connection with the pay-down, approximately $450,000 of deferred financing costs were written off. (The write-off after limited partner's interest was approximately $130,000). The net cost basis of Southpoint Parkway Center on the books of the Operating Partnership as of the closing date was approximately $4,436,000. The net sales price after closing costs and adjustments was approximately $4,370,000, resulting in a capital loss of approximately $66,000. (The capital loss after limited partner's interest was approximately $19,000). It should be noted that the cost basis for the property had been reduced by $1,341,759 on the books of the Company during the fourth quarter of 2001, to adjust the value to fair market when the property was reclassified to "real estate held for sale". The Southpoint property was the only remaining office property of the Company and the last of the four properties acquired shortly after organization of the Company in 1985-1986. The Company's remaining portfolio consists primarily of supermarket-anchored shopping centers in Pennsylvania and New Jersey. Cedar Income Fund, Ltd. Item 7. Financial Statements and Exhibits ------- --------------------------------- Pro Forma Combined Balance Sheet as of March 31, 2002. Pro Forma Combined Statement of Operations for the three months ended March 31, 2002. Pro Forma Combined Statement of Operations for the twelve months ended December 31, 2001. Notes to Pro Forma Financial Statements. The following exhibits are included herein: (10.1) Real Estate Purchase and Sale Agreement between Cedar Income Fund Partnership, L.P. and Southpoint Parkway Center, L.C. dated as of February 1, 2002. (10.2) Addendum Number One to Real Estate Purchase and Sale Agreement between Cedar Income Fund Partnership, L.P. and Southpoint Parkway Center, L.C. dated March 20, 2002. (10.3) Exclusive Agreement to Sell between Weaver Realty Group, Inc./Grubb & Ellis/Phoenix Realty Group and Cedar Income Fund Partnership, L.P. dated July 30, 2001. (10.4) Agreement Regarding Commission between Weaver Realty Group, Inc./Grubb & Ellis/Phoenix Realty Group and Cedar Income Fund Partnership, L.P. dated March 7, 2002. (99) Press Release dated May 28, 2002, regarding sale of Southpoint Parkway Center. Cedar Income Fund, Ltd. SIGNATURES 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 thereunto duly authorized. CEDAR INCOME FUND, LTD. By: /s/ Leo S. Ullman ------------------------ Leo S. Ullman Chairman Dated: June 7, 2002 Cedar Income Fund, Ltd. 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 sold Southpoint Parkway Center on March 31, 2002. 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 sold Southpoint Parkway Center on March 31, 2002, nor does it purport to represent the future financial position of the Company.
Cedar Income Southpoint Repayment Fund Parkway Center of Loan Pro Forma Historical (a) Disposition (b) Payable (c) March 31, 2002 Assets Real estate, net $ 57,063,006 $ - $ - $ 57,063,006 Real estate held for sale 4,401,800 (4,401,800) - - Escrow - 4,372,296 (4,367,475) 4,821 Property deposits 150,000 - - 150,000 Cash and cash equivalents 2,290,404 (86,369) - 2,204,035 Restricted cash 889,757 - - 889,757 Rents and other receivables 423,432 (63,927) - 359,505 Deferred financing costs, net 1,372,477 - (449,534) 922,943 Deferred legal, net 178,936 - - 178,936 Prepaid expenses, net 519,647 (1,839) - 517,808 Deferred leasing commissions 606,565 - - 606,565 Deferred rental income 128,173 - - 128,173 Taxes held in escrow 241,958 - - 241,958 ------------------ --------------- ---------------- ---------------- Total assets $ 68,266,155 $ (181,639) $(4,817,009) $ 63,267,507 ================== =============== ================ ================ Liabilities and Shareholders' Equity Mortgage loans payable $ 46,042,006 $ - $ - $ 46,042,006 Loan payable 5,960,000 - (4,367,475) 1,592,525 Accounts payable and accrued expenses 1,501,386 (91,844) - 1,409,542 -------------------------------------------------------------------------- Total liabilities 53,503,392 (91,844) (4,367,475) 49,044,073 -------------------------------------------------------------------------- Minority interest 2,301,845 - - 2,301,845 Limited partner's interest in consolidated Operating Partnership 8,846,604 (63,853) (319,664) 8,463,087 Shareholders' Equity Common stock 6,921 - - 6,921 Additional paid in capital 3,607,393 (25,942) (129,870) 3,451,581 -------------------------------------------------------------------------- -------------------------------------------------------------------------- Total shareholders' equity 3,614,314 (25,942) (129,870) 3,458,502 -------------------------------------------------------------------------- Total liabilities and shareholders' equity $ 68,266,155 $ (181,639) $(4,817,009) $ 63,267,507 ========================================================================== Total shareholders' equity in the Company and limited partner's (equity) interest in Operating Partnership and minority interest $ 14,762,763 $ (89,795) $ (449,534) $ 14,223,434 ==========================================================================
See accompanying Notes to Pro Forma Financial Statements Cedar Income Fund, Ltd. 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 disposed of Southpoint Parkway Center as of January 1, 2002, 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 sold Southpoint Parkway Center as of January 1, 2002, nor does it purport to represent the operations of the Company for future periods.
Cedar Income Southpoint Pro Forma Fund, Ltd. Parkway Center Pro Forma 3 Months Ended Description Historical (d) Disposition (e) Adjustments (f) March 31, 2002 Revenues Base rent $ 1,877,353 $ (259,097) $ - $ 1,618,256 Tenant escalations 622,639 (26,569) - 596,070 Interest 10,325 (90) - 10,235 --------------- ----------------- ---------------- ----------------- Total revenues 2,510,317 (285,756) - 2,224,561 --------------------------------------------------------------------------- Expenses Operating expenses: Real estate taxes 288,674 (26,707) - 261,967 Property expenses 504,670 (138,776) - 365,894 Administrative 348,194 (18,021) - 330,173 --------------------------------------------------------------------------- Total operating expenses 1,141,538 (183,504) - 958,034 --------------------------------------------------------------------------- Interest 920,552 - (136,484) 784,068 Depreciation and amortization 552,255 - (186,421) 365,834 --------------------------------------------------------------------------- Total expenses 2,614,345 (183,504) (322,905) 2,107,936 --------------------------------------------------------------------------- Net (loss) income before minority interest and limited partner's interest in Operating Partnership (104,028) (102,252) 322,905 116,625 Minority interest (66,606) - - (66,606) Limited partner's interest 117,762 72,711 (229,618) (39,145) --------------------------------------------------------------------------- Net (loss) income $ (52,872) $ (29,541) $ 93,287 $ 10,874 =========================================================================== Basic and diluted net income per share $ (0.08) $ (0.04) $ 0.13 $ 0.02 ===========================================================================
See accompanying Notes to Pro Forma Financial Statements Cedar Income Fund, Ltd. 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 disposed of Southpoint Parkway Center as of January 1, 2001, 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 results would have been had the Company disposed of Southpoint Parkway Center as of January 1, 2001, nor does it purport to represent the operations of the Company for future periods.
Cedar Income Southpoint Pro Forma Fund Parkway Center Pro Forma Year Ended Historical (g) Disposition (h) Adjustments (i) December 31, 2001 Revenues Base rent $ 4,005,456 $ (1,008,148) $ - $ 2,997,308 Tenant escalations 811,412 (16,740) - 794,672 Interest 281,897 (403) - 281,494 ------------ ------------ ---------- ----------- Total revenues 5,098,765 (1,025,291) - 4,073,474 ---------------------------------------------------------------------------- Expenses Operating expenses: Property expenses 1,006,540 (323,644) - 682,896 Real estate taxes 494,348 (106,447) - 387,901 Administrative 815,599 (19,077) - 796,522 ------------ ------------ ---------- ----------- Total operating expenses 2,316,487 (449,168) - 1,867,319 ---------------------------------------------------------------------------- Interest 1,887,837 - (181,978) 1,705,859 Depreciation and amortization 991,334 (151,191) (149,203) 690,940 ---------------------------------------------------------------------------- Total expenses 5,195,658 (600,359) (331,181) 4,264,118 ---------------------------------------------------------------------------- Net (loss) income before minority interest, limited partner's interest, loss on impairment, and gain (loss) on sales (96,893) (424,932) 331,181 (190,644) ---------------------------------------------------------------------------- Minority interest (44,129) - - (44,129) Limited partner's interest 74,586 (651,956) (235,502) (812,872) Loss on impairment (1,341,759) 1,341,759 - - Gain on sale 1,638,416 - - 1,638,416 Loss on sale (295,610) - - (295,610) ---------------------------------------------------------------------------- Net (loss) income before cumulative effect adjustment (65,389) 264,871 95,679 295,161 Cumulative effect of change in accounting principles, net of limited partner's share of ($14,723) (6,014) - - (6,014) Net (loss) income before extraordinary items (71,403) 264,871 95,679 289,147 Extraordinary items Early extinguishment of debt (net of limited partner's share of $187,834) (76,312) - - (76,312) ---------------------------------------------------------------------------- Net (loss) income $ (147,715) $ 264,871 $ 95,679 $ 212,835 ============================================================================ Basic and diluted net income per share $ (0.21) $ 0.38 $ 0.14 $ 0.31 ============================================================================
See accompanying Notes to Pro Forma Financial Statements Cedar Income Fund, Ltd. Notes to Pro Forma Financial Statements Pro Forma Condensed Combined Balance Sheet a. Reflects the Company's historical balance sheet as of March 31, 2002. b. Reflects the disposition of Southpoint Parkway Center for $4.7 million. c. Reflects pay-down of the $6 million SWH financing by the net proceeds of approximately $4,370,000, the write-off of related deferred financing costs of approximately $450,000, and the limited partner's share of these costs. Pro Forma Condensed Combined Statements of Operations for the three months ended March 31, 2002 d. Reflects the historical operations of the Company for the three months ended March 31, 2002. e. Reflects the operations of Southpoint Parkway Center for the three months ended March 31, 2002. f. Reflects the interest expense associated with the pay-down of the $6 million SWH financing by the net proceeds of $4,370,000 and also reflects the reduced amortization expense related to the $450,000 write-off of deferred financing costs, shown net of limited partner's interest in the Operating Partnership. Pro forma Condensed Combined Statements of Operations for the Year Ended December 31, 2001 g. Reflects the historical operations of the Company for the year ended December 31, 2001. h. Reflects the operations of Southpoint Parkway Center for the year ended December 31, 2001. i. Reflects the interest expense associated with the pay-down of the $6 million SWH financing by the net proceeds of $4,370,000 and also reflects the reduced amortization expense related to the $450,000 write-off of deferred financing costs, shown net of limited partner's interest in the Operating Partnership.