FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 2002
Commission File Number: 33-17579
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
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(Exact name of registrant as specified in its charter)
Delaware 16-1309988
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(State of organization) (IRS Employer Identification No.)
2350 North Forest Road, Suite 12A,Getzville, New York 14068
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(Address of principal executive offices)
(716) 636-0280
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(Registrant's telephone number)
Indicate by a 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 [ ]
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statement of Net Assets in Liquidation
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(Liquidation Basis)
June 30, 2002
Assets:
Cash $ 2,252,367
Notes receivable 276,950
Receivable from affiliated party 94,249
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Total assets 2,623,566
Liabilities - accounts payable and accrued expenses 4,062
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Net assets in liquidation $ 2,619,504
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Consolidated Statement of Changes in Net Assets in Liquidation
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(Liquidation Basis)
For the period June 1, 2002 to June 30, 2002
Partners' equity at June 1, 2002 $ 2,883,271
Adjustment to Liquidation Basis - loss on settlement of lawsuit (257,929)
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Net assets in liquidation at June 1, 2002 2,625,342
Operating loss (5,838)
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Net assets in liquidation at June 30, 2002 $ 2,619,504
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2
Condensed Consolidated Balance Sheets
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December 31,
Assets 2001
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Cost of property and equipment, all held for sale $ 3,228,531
Less accumulated depreciation 1,164,899
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2,063,632
Cash and equivalents 340,444
Note receivable 326,950
Other assets 282,806
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Total assets $ 3,013,832
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Liabilities and Partners' Equity
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Mortgage loan payable 2,620,735
Accounts payable and accrued expenses 91,660
Other liabilities 56,911
Partners' equity 244,526
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Total liabilities and partners' equity $ 3,013,832
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Condensed Consolidated Statements of Operations
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Period from April Three months Period from
1, 2002 to May ended January 1, 2002 Six months ended
31, 2002 June 30, 2001 to May 31, 2002 June 30, 2001
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Rental income $ 163,639 471,163 405,338 943,434
Other income 29,020 37,629 49,844 69,972
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Total income 192,659 508,792 455,182 1,013,406
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Property operating costs 151,172 284,129 302,086 543,681
Administrative expense - affiliates 17,020 47,520 40,941 91,417
Other administrative expense 24,732 16,669 65,308 54,013
Interest 33,884 113,053 91,036 224,932
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Total expenses 226,808 461,371 499,371 914,043
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Income (loss) before equity in earnings of
joint venture and gain on sale of property (34,149) 47,421 (44,189) 99,363
Equity in earnings of joint venture -- -- -- 546,261
Gain on sale of property 2,682,934 -- 2,682,934 --
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Net income $ 2,648,785 47,421 2,638,745 645,624
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Net income per limited partnership unit $ 32.68 .59 32.55 7.97
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Weighted average limited partnership units 78,625 78,625 78,625 78,625
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Condensed Consolidated Statements of Cash Flows
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Period from
January 1, 2002 Six months ended
to May 31, June 30,
2002 2001
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Cash provided (used) by:
Operating activities:
Net income $ 2,638,745 645,624
Adjustments:
Equity in earnings of joint venture -- (546,261)
Gain on sale of property (2,682,934) --
Other, principally changes in other assets and liabilities (429,941) 32,309
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Net cash provided (used) by operating activities (474,130) 131,672
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Investing activities:
Proceeds from sale of property 5,273,215 --
Distributions from joint ventures -- 117,540
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Net cash provided by investing activities 5,273,215 117,540
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Financing activities - principal payments on mortgage loans (2,620,735) (23,619)
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Net increase in cash and equivalents 2,178,350 225,593
Cash and equivalents at beginning of period 340,444 708,683
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Cash and equivalents at end of period $ 2,518,794 934,276
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Notes to Consolidated Financial Statements
Six months ended June 30, 2001 and 2000
Liquidation of the Partnership
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On May 30, 2002 the Partnership sold its remaining property investment, Player's
Club, at which time the Partnership adopted a plan of termination and
liquidation under which liabilities will be paid and net proceeds will be
distributed to the Partners.
Organization
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Realmark Property Investors Limited Partnership - VI B (the Partnership), a
Delaware limited partnership, was formed on September 21, 1987, to invest in a
diversified portfolio of income-producing real estate investments. The general
partners are Realmark Properties, Inc. (the corporate general partner) and
Joseph M. Jayson (the individual general partner). Joseph M. Jayson is the sole
stockholder of J.M. Jayson & Company Inc. Realmark Properties, Inc. is a
wholly-owned subsidiary of J.M. Jayson & Company, Inc. Under the partnership
agreement, the general partners and their affiliates can receive compensation
for services rendered and reimbursement for expenses incurred on behalf of the
Partnership.
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Basis of Presentation
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As a result of the plan termination and liquidation, the Partnership changed its
basis of accounting to the liquidation basis effective June 1, 2002. Under the
liquidation basis of accounting, assets are stated at their estimated net
realizable values and liabilities are stated at their estimated settlement
amounts.
The accompanying interim financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America
and, in the opinion of management, contain all necessary adjustments for a fair
presentation. The Partnership's significant accounting policies are set forth in
its December 31, 2001 Form 10-K. The interim financial statements should be read
in conjunction with the financial statements included therein. The interim
results should not be considered indicative of the annual results.
Property and Equipment
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On May 30, 2002, the Partnership closed on the sale of its remaining property,
Player's Club, resulting in a gain of approximately $2,680,000. During 2002 and
2001, the Partnership's properties were being actively marketed for sale and,
therefore, were not being depreciated. Depreciation not recorded for the period
from April 1, 2002 to May 31, 2002 and for the period from January 1, 2002 to
May 31, 2002 was approximately $22,000 and $56,000, respectively. Depreciation
not recorded in the three and six month periods ended June 30, 2001 was
approximately $58,000 and $116,000, respectively. As of June 30, 2002, the
Partnership does not have an interest in any property or equipment.
Investment in Joint Venture
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The Partnership had a 11.5% interest in a join venture with Realmark Property
Investors Limited Partnership - II (RPILP - II), an entity affiliated through
common general partners, owning 88.5%. The Joint Venture was formed to own and
operate the Foxhunt Apartments, located in Dayton, Ohio. The Foxhunt property
had been the subject of a plan of disposal since July 1999 and was sold March 1,
2001 to an unaffiliated entity, for $7,600,000. After satisfaction of the
$5,942,000 mortgage loan on the property and payment of closing costs, the net
proceeds were approximately $1.1 million. The Partnership's equity in the net
income of the joint venture included its share of the net gain of approximately
$4,700,000
PART I - Item 2. Management's Discussion and Analysis of Financial Condition
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and Results of Operations
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Liquidity and Capital Resources
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Since January 1, 2001, the Partnership's only remaining property, Player's Club,
had been actively marketed for sale. On May 30, 2002, the Partnership sold
Player's Club to an unaffiliated entity for cash of $5,548,000. After
satisfaction of the $3,031,000 mortgage loan, including a prepayment penalty, on
the property and payment of closing costs, the net proceeds available amounted
to approximately $2,180,000, before satisfaction of any remaining obligations
related to the property.
5
Prior to the sale of Player's Club, the Partnership maintained a cash position
adequate to fund capital improvements and scheduled debt payments. The
Partnership's cash position and the proceeds from the sale of Fairway Club
Apartments (sold August 16, 2001) enabled the Partnership to make a $2,600,000
distribution to the Limited Partners in the last quarter of 2001.
Results of Operations
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As a result of the sale of the sole remaining property, Player's Club, and the
establishment of a plan of liquidation, the Partnership began reporting on the
liquidation basis of accounting effective June 1, 2002. Therefore, operations
for the period June 1, 2002 to June 30, 2002 are reported on the consolidated
statement of changes in net assets in liquidation while the operations for the
period January 1, 2002 to May 31, 2002, for the period April 1, 2002 to May 31,
2002 and for the three and six months ended June 30, 2001 are reported on the
condensed consolidated statement of operations.
As discussed above, the Partnership began reporting on the liquidation basis of
accounting June 1, 2002. The only significant changes as of June 30, 2002 as
compared to the same period in 2001, excluding the operations of Fairway Club
Apartments, is the sale of the remaining property, Player's Club.
PART I - Item 3. Quantitative and Qualitative Disclosures About Market Risk
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The Partnership's cash equivalents are short-term, interest-bearing bank
accounts and its mortgage loans are fixed-rate. It has not entered into any
derivative contracts. Therefore, it has no market risk exposure.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
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As previously reported, the Partnership, as a nominal defendant, the General
Partners of the Partnership and of affiliated public partnerships (the "Realmark
Partnerships") and the officers and directors of the Corporate General Partner,
as defendants, had been involved in a class action litigation in New York State
court. The Partnership's settlement of this litigation is described in its
Annual Report on Form 10-K for the year ended December 31, 2001.
Item 5. Other Information
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The Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 is attached as an exhibit in this
report.
Item 6. Exhibits and Reports on Form 8-K
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On June 14, 2002, the Partnership filed a Form 8-K, reporting the sale of
Players Club under item 2 thereof.
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SIGNATURES
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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.
REALMARK PROPERTY INVESTORS LIMITED PARTNERHIP - VI-B
August 14, 2002 /s/ Joseph M. Jayson
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Date Joseph M. Jayson,
Individual General Partner and
Principal Financial Officer
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Exhibit
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY
ACT OF 2002.
In connection with the Quarterly Report of Realmark Property Investors
Limited Partnership - VI B (the "Partnership") on Form 10-Q for the period
ending June 30, 2002 as filed with the Securities and Exchange Commission on the
date hereof (the "Report"), I, Joseph M. Jayson, Individual General Partner and
Principal Financial Officer, certify, pursuant to 18 U.S.C. ss. 1350, as adopted
pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that to the best of my
knowledge:
(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 result of the operations of the
Partnership.
August 14, 2002 /s/ Joseph M. Jayson
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Date Joseph M. Jayson,
Individual General Partner and
Principal Financial Officer