UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 2004
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( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934.
Commission File Number 0-14386
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 Formation) (IRS Employer Identification No.)
2350 North Forest Road
Getzville, New York 14068
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(Address of Principal Executive Office)
Registrant's Telephone Number: (716) 636-9090
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Units of Limited
Partnership Interest
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 [ ]
Indicate by a check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in part III of this Form 10-K or any
amendment to this Form 10-K.[X]
Indicate by a check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes [ ] No [X]
DOCUMENTS INCORPORATED BY REFERENCE
See Item 15 for a list of all documents incorporated by reference
PART I
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ITEM 1: BUSINESS
- ------- --------
The Registrant, Realmark Property Investors Limited Partnership - VI B
(the "Partnership"), is a Delaware limited partnership organized in 1987
pursuant to an Amended and Restated Certificate and Agreement of Limited
Partnership (the "Partnership Agreement"), under the Revised Delaware Uniform
Limited Partnership Act. The Partnership's general partners are Realmark
Properties, Inc. (the "Corporate General Partner"), a Delaware corporation, and
Joseph M. Jayson (the "Individual General Partner").
The Registrant commenced the public offering of its limited partnership
units, registered with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, on November 11, 1988. The first interim
closing took place on February 2, 1989, and the initial $2,134,300 of
contributed capital was released to the Partnership at which time it began
operations. The offering was concluded February 28, 1990 at which time the
Partnership had raised $7,862,510, before deducting sales commissions and
syndication costs.
The Partnership's primary business is to own and operate
income-producing real property for the benefit of its partners. As of December
31, 2004, the Partnership has disposed of its last property, Players Club North
Apartments which was sold on May 30, 2002, for $5,548,000, resulting in a net
gain of approximately $2,680,000 to the Partnership for tax purposes.
Accordingly, the Partnership has been in the process of liquidating.
On December 30, 2004, the Partnership filed a Certificate of
Cancellation in the office of the Secretary of State of Delaware to cancel the
Certificate of Limited Partnership of Realmark Investors Limited Partnership -
VI B. The reason for filing of this Certification of Cancellation is that the
Partnership has been dissolved and the winding up of the partnership has been
completed.
The business of the Partnership is not seasonal. As of December 31,
2004, the Partnership did not directly employ any persons in a full-time
position. All persons who regularly rendered services on behalf of the
Partnership through December 31, 2004 were employees of the Corporate General
Partner or its affiliates.
This annual report contains certain forward-looking statements
concerning the Partnership's current expectations as to future results. Words
such as "believes", "forecasts", "intends", "possible", "expects", "estimates",
"anticipates" or "plans" and similar expressions are intended to identify
forward-looking statements. Such statements may not ultimately turn out to be
accurate due to, among other things, economic or market conditions.
ITEM 2: PROPERTIES
- ------ ----------
As of December 31, 2004, the Partnership did not own any property
investments.
ITEM 3: 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 at the
state court level regarding the payment of fees and other management issues.
2
On August 29, 2001, the parties entered into a Stipulation of
Settlement (the "Settlement"). On October 4, 2001, the Court issued an "Order
Preliminary Approving Settlement" (the "Hearing Order") and on November 29,
2001, the court issued an "Order and Final Judgment Approving Settlement and
Awarding Fees and Expenses" and dismissing the complaints with prejudice. The
Settlement provided, among other things, that all of the Realmark Partnerships'
properties be disposed of. The general partners will continue to
have primary authority to dispose of the Partnerships' properties. If either (i)
the general partners have not sold or contracted to sell 50% of the
Partnerships' properties (by value) by April 2, 2002 or (ii) the general
partners have not sold or contracted to sell 100% of the Partnerships'
properties by September 29, 2002, then the primary authority to dispose of the
Partnerships' properties will pass to a sales agent designated by plaintiffs'
counsel and approved by the Court. On October 4, 2002, the Court appointed a
sales agent to work with the general partners to continue to sell the
Partnership's remaining properties.
The settlement also provided for the payment by the Partnerships of
fees to the plaintiffs' attorneys. These payments are payable out of the
proceeds from the sale of all of the properties owned by all of the Realmark
Partnerships, following the sale of the last of these properties in each
partnership. Plaintiffs' counsel will receive 15% of the amount by which the
sales proceeds distributable to limited partners in each partnership exceeds the
value of the limited partnership units in each partnership (based on the
weighted average of the units' trading prices on the secondary market as
reported by Partnership Spectrum for the period May through June 2001). In no
event may the increase on which the fees are calculated exceed 100% of the
market value of the units as calculated above. On May 30, 2002, the Partnership
sold its remaining property, and in June 2002, a payment of $257,929 was made to
the plaintiffs' attorneys.
ITEM 4: SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------- ----------------------------------------------------
None.
PART II
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ITEM 5: MARKET FOR REGISTRANT'S UNITS OF LIMITED PARTNERSHIP INTEREST
- ------- -------------------------------------------------------------
There is currently no active trading market for the units of limited
partnership interest of the Partnership and it is not anticipated that any will
develop in the future. Accordingly, information as to the market value of a unit
at any given date is not available. As of December 31, 2004, there were 988
record holders of units of limited partnership interest. In December 2004, the
Partnership, through its Corporate General Partner (Realmark Properties, Inc.)
made a final distribution. A total of $281,217 was distributed to the limited
partners. Additionally, in June and November 2002, the Partnership made
distributions of its previously undistributed net cash from sales proceeds.
These distributions were made in accordance with the settlement of the lawsuit
(Item 3). A total of $2,257,929 was distributed on behalf of the limited
partners. Of this amount, $257,929 was paid in June 2002 to legal counsel in
accordance with the settlement of the lawsuit and $2,000,000 was distributed in
November 2002 directly to record holders of units of limited partnership
interest.
3
ITEM 6: SELECTED FINANCIAL DATA
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At or for the years ended December 31,
-----------------------------------------------------------------------------------
2004 (1) 2003(1) 2002(1) 2001 2000
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Balance sheet data
Net rental property $ - - - 2,063,632 4,748,429
Total assets - 533,025 628,635 3,012,832 5,986,548
Mortgage loans payable - - - 2,620,735 5,227,302
Partners' equity - 351,178 351,178 244,526 543,775
===================================================================================
Operating data
Rental income - - 405,141 1,497,317 1,863,378
Other income - - 95,242 113,521 109,956
-----------------------------------------------------------------------------------
Total revenue - - 500,383 1,610,838 1,973,334
-----------------------------------------------------------------------------------
Property operating costs - - 320,267 909,920 1,151,282
Depreciation - - - - 233,113
Interest expense - - 86,663 492,158 458,931
Administrative expenses - - 281,806 304,555 368,139
-----------------------------------------------------------------------------------
Total expenses - - 668,736 1,706,633 2,211,465
-----------------------------------------------------------------------------------
Operating loss - - (168,353) (95,795) (238,131)
Equity in earnings of
joint venture - - - 545,015 3,469
Gain on property sales - - 2,682,934 1,851,531 -
Extraordinary losses - - (357,929) - -
-----------------------------------------------------------------------------------
Net income (loss) $ - - 2,156,652 2,300,751 (234,662)
===================================================================================
Cash flow data
Net cash provided (used) by:
Operating activities (82,166) (35,728) (4,327) 66,024 151,055
Investing activities - - 5,011,619 4,772,304 (8,640)
Financing activities (450,859) (59,637) (4,878,664) (5,206,567) (231,754)
-----------------------------------------------------------------------------------
Net increase (decrease) in
cash and equivalents $ (533,025) (95,365) 128,628 (368,239) (89,339)
===================================================================================
Per limited partnership unit
Net income (loss) $ - - 26.96 29.09 (2.90)
Distributions $ 3.58 - 28.72 33.07 2.34
===================================================================================
(1) The Partnership began reporting on the liquidation basis of accounting
effective June 1, 2002. Therefore, operations for the years ended December
31, 2004, 2003 and 2002 are reported on the consolidated statement of
changes in net assets in liquidation for the years ended December 31, 2004
and 2003 and the period from June 1, 2002 to December 31, 2002, while
operations for the period from January 1, 2002 to May 31, 2002 and for the
years ended December 31, 2001, and 2000, are reported on the going concern
basis in the consolidated statements of operations. Balance sheet data at
December 31, 2004 and 2003 represents the total assets and net assets in
liquidation as reported in the consolidated statement of net assets in
liquidation (liquidation basis) at December 31, 2004 and 2003 (page F-2).
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
- ------- -----------------------------------------------------------------------
OF OPERATIONS
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Liquidity and Capital Resources:
- --------------------------------
Since January 1, 2001, the Partnership's only remaining property,
4
Players Club, had been actively marketed for sale. On May 30, 2002, the
Partnership sold Players Club to an unaffiliated entity for cash of $5,548,000.
After satisfaction of the $3,091,000 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. Those proceeds enabled the
partnership to make a distribution to limited partners in the last quarter of
2002 of $2,000,000 after a payment of $257,929 in June 2002 to the plaintiff's
counsel in accordance with the settlement of the lawsuit (Item 3). The remaining
proceeds, less those amounts that are required to pay the estimated payables
during liquidation, were distributed to the limited partners in December 2004 in
the amount of $281,217. In December 2004, in connection with the termination of
the Partnership, $69,961 of cash was transferred to the Corporate General
Partner to pay the remaining payables during liquidation. Additionally, a cash
transfer of $83,008 was also made to the Corporate General Partner. The cash
transfer of $83,008 represents uncashed investor checks for distributions for
the years 2000 through 2002.
Limited partners should be aware that it is possible that they received
an allocation of income from the gain on sale of the Partnerships' properties on
which they will be required to pay income taxes and there is no assurance that
the distributions detailed above will be sufficient to satisfy these
obligations.
Except as described above and in the consolidated financial statements,
the General Partner is not aware of any trends or events, commitments or
uncertainties that may impact liquidity in a material way.
Results of Operations:
- ----------------------
As a result of the sale of the sole remaining property, Players 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 years ended December 31, 2004, and 2003 and the period June
1, 2002 to December 31, 2002 are reported in the consolidated statement of
changes in net assets in liquidation while the operations for the period January
1, 2002 to May 31, 2002 are reported on the going concern basis in the
consolidated statements of operations.
Inflation has been consistently low during the periods presented in the
consolidated financial statements and, as a result, has not had a significant
effect on the operations of the Partnership or its properties.
2004 as compared to 2003
- ------------------------
As discussed above, the Partnership began reporting on a liquidation
basis of accounting on June 1, 2002. Operating activity for 2004 consisted of
the payment of liabilities recorded at December 31, 2002.
2003 as compared to 2002
- ------------------------
As discussed above, the Partnership began reporting on a liquidation
basis of accounting on June 1, 2002. Operating activity for 2003 consisted of
the payment of liabilities recorded at December 31, 2002.
ITEM 7A: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
- -------- ----------------------------------------------------------
Not applicable.
5
ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
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Listed under Item 15 of this report.
ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
- ------- ---------------------------------------------------------------
FINANCIAL DISCLOSURE
--------------------
None.
ITEM 9A: CONTROLS AND PROCEDURES
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The Partnership maintains a set of disclosure controls and procedures
designed to ensure that information required to be disclosed by the Partnership
in reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in
Securities and Exchange Commission rules and forms. Within the 90-day period
prior to the filing of this report, an evaluation was carried out under the
supervision and with the participation of the Partnership's management,
including the Partnership's Individual General Partner and Principal Financial
Officer, of the effectiveness of the Partnership's disclosure controls and
procedures. Based on that evaluation, the Partnership's Individual General
Partner and Principal Financial Officer concluded that the Partnership's
disclosure controls and procedures are effective.
Subsequent to the date of their most recent evaluation, there have been
no significant changes in the Partnership's internal control over financial
reporting or in other factors that could significantly affect the internal
control over financial reporting.
PART III
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ITEM 10: DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
- -------- --------------------------------------------------
The Partnership, as an entity, does not have any directors or officers.
The Individual General Partner of the Partnership is Joseph M. Jayson. The
directors and executive officers of Realmark Properties, Inc., the Partnership's
Corporate General Partner, as of December 31, 2004, are listed below. Each
director is subject to election on an annual basis.
Title of All Positions Held with Year First Elected
Name the Corporate General Partner to Position
- ---- ----------------------------- ------------------
Joseph M. Jayson Chairman of the Board, President 1979
and Treasurer
Judith P. Jayson Vice President and Director 1979
Joseph M. Jayson and Judith P. Jayson are married to each other.
The Directors and Executive Officers of the Corporate General Partner
and their principal occupations and affiliations during the last five years or
more are as follows:
Joseph M. Jayson, age 66, is Chairman, Director and sole stockholder of
J. M. Jayson and Company, Inc. and certain of its affiliated companies: U.S.
6
Apartments LLC, Westmoreland Capital Corporation, Oilmark Corporation and U.S.
Energy Development Corporation. In addition, Mr. Jayson is Chairman of Realmark
Corporation, Chairman, President and Treasurer of Realmark Properties, Inc.,
wholly-owned subsidiaries of J. M. Jayson and Company, Inc. and co-general
partner of Realmark Property Investors Limited Partnership, Realmark Property
Investors Limited Partnership-II, Realmark Property Investors Limited
Partnership-III, Realmark Property Investors Limited Partnership-IV, Realmark
Property Investors Limited Partnership-V, Realmark Property Investors Limited
Partnership-VI A, and Realmark Property Investors Limited Partnership-VI B. Mr.
Jayson has been in the real estate business for the last 42 years and is a
Certified Property Manager as designated by the Institute of Real Estate
Management ("I.R.E.M."). Mr. Jayson received a B.S. Degree in Education in 1961
from Indiana University, a Masters Degree from the University of Buffalo in
1963, and has served on the Educational Faculty of the Institute of Real Estate
Management. Mr. Jayson has for the last 42 years been engaged in various aspects
of real estate brokerage and investment. He brokered residential properties from
1962 to 1964, commercial investment properties from 1964 to 1967, and in 1967
left commercial real estate to form his own investment firm. Since that time,
Mr. Jayson and J. M. Jayson & Company, Inc. have formed or participated in
various ways with forming over 30 real estate related limited partnerships. For
the past 23 years, Mr. Jayson and an affiliate have also engaged in
developmental drilling for gas and oil.
Judith P. Jayson, age 64, is currently Vice President and a Director of
Realmark Properties, Inc. She is also a Director of the property management
affiliate, Realmark Corporation. Mrs. Jayson has been involved in property
management for the last 33 years and has extensive experience in the hiring and
training of property management personnel and in directing, developing and
implementing property management systems and programs. Mrs. Jayson, prior to
joining the firm in 1973, taught business in the Buffalo, New York High School
System. Mrs. Jayson graduated from St. Mary of the Woods College in Terre Haute,
Indiana, with a degree in Business Administration.
Audit Committee
- ---------------
The Partnership has a separately-designated standing audit committee
established in accordance with Section 3(a)(58)(A) of the Exchange Act. The
members of the audit committee are Joseph M. Jayson and Bryant E. Zilke.
Audit Committee Financial Expert
- --------------------------------
The Directors and Executive Officers of the Corporate General Partner
have determined that Bryant E. Zilke is an audit committee financial expert as
defined by Item 401(h) of Regulation S-K of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). Mr. Zilke is not independent within the meaning
of Item 7(d)(3)(iv) of Schedule 14A of the Exchange Act due to limited
circumstances, namely that the Partnership is small in size and there is limited
personnel. Mr. Zilke is not independent as a result of being an employee of an
affiliate of the Corporate General Partner.
Code of Ethics
- --------------
The Partnership has adopted a code of ethics for the partners,
principal financial officer, and employees of the Corporate General Partner or
its affiliates who render services on behalf of the Partnership. The Partnership
7
will provide to any person without charge, upon request, a copy of the code of
ethics which is available from:
Realmark Property Investors Limited Partnership - VI B
Attention: Investor Relations
2350 North Forest Road
Getzville, New York 14068
ITEM 11: EXECUTIVE COMPENSATION
- -------- ----------------------
No direct remuneration was paid or payable by the Partnership to
directors and officers (since it has no directors or officers), nor was any
direct remuneration paid or payable by the Partnership to directors or officers
of Realmark Properties, Inc., the Corporate General Partner and sponsor, for the
year ended December 31, 2004. The Corporate General Partner and its affiliate,
Realmark Corporation, are entitled to fees and to certain expense reimbursements
with respect to Partnership operations, as set forth in item 13 hereof and in
the notes to the consolidated financial statements.
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- -------- --------------------------------------------------------------
No person is known to the Partnership to own of record or beneficially,
more than 5% of the units of limited partnership interests of the Partnership,
except for affiliates of the General Partners that own 4046.2 units of limited
partnership interest amounting to approximately 5.2% of the Partnership interest
at December 31, 2004. The general partners, and the executive officers of the
Corporate General Partner, as of December 31, 2004, owned 21 units of limited
partnership interest. The general partners and affiliates received their
proportionate share, as limited partners, of the distribution paid in the last
quarter of 2004.
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- -------- ----------------------------------------------
The properties of the Partnership's subsidiaries were managed by
Realmark Corporation, an affiliate of the Partnership's Corporate General
Partner, for a fee of generally 5% of annual net rental income of the
properties. Realmark Corporation and the Corporate General Partner were also
reimbursed for disbursements made on behalf of the Partnership. Those
transactions are further described, and quantified, in the note to the
consolidated financial statements entitled "Related Party Transactions".
ITEM 14: PRINCIPAL ACCOUNTING FEES AND SERVICES
- -------- --------------------------------------
Audit Engagement: Toski, Schaefer & Co., P.C. was engaged as the Partnership's
independent auditor for years 2004 and 2003. All fees incurred in the years
ended December 31, 2004 and 2003 were approved by the Audit Committee.
Audit Fees: Audit fees for the audit of the Partnership's annual financial
statements included in the Partnership's annual report on Form 10-K and those
financial statements included in the Partnership's quarterly reports on Form
10-Q by Toski, Schaefer & Co., P.C. for the years ended December 31, 2004 and
2003 totaled $26,000 and $24,150, respectively.
Audit-Related Fees: None.
8
Tax Fees: The Partnership engaged Toski, Schaefer & Co., P.C. to provide tax
filing and compliance services during the years ended December 31, 2004 and
2003. The fees for these services amounted to $3,610 and $3,558, respectively.
All Other Fees: None.
The Audit Committee has set a policy that all fees incurred by the
Partnership for services performed by its independent auditors must be
pre-approved by the Audit Committee. All fees related to 2004 and 2003 were
pre-approved by the Audit Committee.
The Audit Committee oversees the Partnership's financial reporting
process. Management has the primary responsibility for the financial statements
and the financial reporting process, including the systems of internal controls.
In fulfilling its oversight responsibilities, the Audit Committee reviewed the
audited financial statements with management, including a discussion of the
quality, not just the acceptability, of the accounting principles, the
reasonableness of significant judgments and the clarity of disclosures in the
financial statements.
The Audit Committee has the sole authority to retain and terminate the
Partnership's independent auditors and approves all fees paid to the independent
auditors. During 2004 and 2003, the Audit Committee reviewed with the
independent auditors, who are responsible for expressing an opinion on the
conformity of those audited financial statements with generally accepted
accounting principles, their judgments as to the quality, not just the
acceptability, of the Partnership's accounting principles and such other matters
as are required to be discussed with the Audit Committee under generally
accepted auditing standards. In addition, the Audit Committee has discussed with
the independent auditors the auditors' independence from management and the
Partnership, including the matters in the written disclosures required by the
Independence Standards Board, and considered the scope and type of non-audit
services provided by the auditor when reviewing the compatibility of those
non-audit services with the auditors' independence.
The Audit Committee discussed with the Partnership's independent
auditors the overall scope and plans for their audit. The Audit Committee meets
with the independent auditors to discuss the results of their examination, their
evaluations of the Partnership's internal controls, and the overall quality of
the Partnership's financial reporting.
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the General Partners (and the General Partners have
approved) that the audited financial statements be included in the annual report
on Form 10-K for the year ended December 31, 2004.
9
PART IV
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ITEM 15: EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES, AND REPORTS ON FORM 8-K
- -------- ------------------------------------------------------------------
(a) Consolidated Financial Statements Page
--------------------------------- ----
Independent Auditor's Report F-1
Consolidated Statements of Net Assets in Liquidation as of
December 31, 2004 and 2003 F-2
Consolidated Statements of Changes in Net Assets in Liquidation F-3
for the years ended December 31, 2004 and 2003
Consolidated Statements of Operations for the period
January 1, 2002 to May 31, 2002 F-4
Consolidated Statements of Partners' Equity for the period
January 1, 2002 to May 31, 2002 F-5
Consolidated Statements of Cash Flows for the period
January 1, 2002 to May 31, 2002 F-6
Notes to Consolidated Financial Statements F-7
FINANCIAL STATEMENT SCHEDULE
----------------------------
(i) Schedule III - Real Estate and Accumulated Depreciation F-13
All other schedules are omitted because they are not applicable or the
required information is shown in the consolidated financial statements
or the notes thereto.
(b) Reports on Form 8-K
-------------------
On January 12, 2005, the Partnership filed Form 8-K with the United
States Securities and Exchange Commission which under item 2.01
reported that the Registrant filed a Certificate of Cancellation in the
office of the Secretary of the State of Delaware, on December 30, 2004,
to cancel the Certificate of Limited Partnership of Realmark Property
Investors Limited Partnership - VI B. The reason for filing of this
Certificate of Cancellation was that the Partnership had been dissolved
and the winding up of the Partnership had been completed.
(c) Exhibits
--------
2. Plan of acquisition, reorganization, arrangement, liquidation, or
succession
(a) Stipulation of Settlement Agreement dated August 29, 2001 is
incorporated herein by reference.
(b) Order and Final Judgment Approving Settlement and Awarding
Fees and Expenses dated November 29, 2001 is incorporated
herein by reference.
10
4. Instruments defining the rights of security holders, including
indentures.
(a) Amended and Restated Agreement and Certificate of Limited
Partnership filed with the Registration Statement of the
Registrant Form S-11, filed September 30, 1987, and
subsequently amended, is incorporated herein by reference.
10. Material contracts.
(a) Property Management Agreement with Realmark Corporation
included with the Registration Statement of the Registrant as
filed and amended to date is incorporated herein by reference.
14. Code of Ethics filed December 31, 2003, is incorporated herein by
reference.
21. Subsidiaries of the Partnership is filed herewith.
31. Certification Pursuant to Rule 13a-14(a), as Adopted Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002, is filed herewith.
32. Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, is filed
herewith.
11
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15(d) 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 PARTNERSHIP - VI B
By: /s/Joseph M. Jayson March 31, 2005
------------------- --------------
JOSEPH M. JAYSON, Date
Individual General Partner
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
By: REALMARK PROPERTIES, INC.
Corporate General Partner
/s/ Joseph M. Jayson March 31, 2005
------------------- --------------
JOSEPH M. JAYSON, Date
President, Treasurer and Director
/s/ Judith P. Jayson March 31, 2005
------------------- --------------
JUDITH P. JAYSON, Date
Director
12
INDEPENDENT AUDITOR'S REPORT
----------------------------
The Partners
Realmark Property Investors Limited
Partnership - VI B:
We have audited the accompanying consolidated statements of net assets in
liquidation of Realmark Property Investors Limited Partnership - VI B and
Subsidiaries as of December 31, 2004 and 2003, and the related consolidated
statements of changes in net assets in liquidation for the years ended December
31, 2004 and 2003 and for the period June 1, 2002 to December 31, 2002. In
addition, we have audited the consolidated statements of operations, partners'
equity, and cash flows for the period January 1, 2002 to May 31, 2002. Our
audits also included the financial statement schedule listed in the index at
Item 15. These consolidated financial statements and the financial statement
schedule are the responsibility of the General Partners. Our responsibility is
to express an opinion on the consolidated financial statements and the financial
statement schedule based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Partnership is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances but not for the purpose of expressing an
opinion on the effectiveness of the Partnership's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
As discussed in note 1 to the consolidated financial statements, on May 30,
2002, the Partnership adopted a plan of termination and liquidation. As a
result, the Partnership has changed its basis of accounting from the going
concern to the liquidation basis effective June 1, 2002.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the net assets in liquidation of Realmark
Property Investors Limited Partnership - VI B and Subsidiaries as of December
31, 2004 and 2003, and the related changes in net assets in liquidation for the
years ended December 31, 2004 and 2003 and for the period June 1, 2002 to
December 31, 2002 and the results of their operations and their cash flows for
the period January 1, 2002 to May 31, 2002 in conformity with accounting
principles generally accepted in the United States of America. Also, in our
opinion, the financial statement schedule, when considered in relation to the
basic financial statements taken as a whole, presents fairly in all material
respects the information set forth therein.
Williamsville, New York /s/ TOSKI, SCHAEFER & CO., P.C.
March 29, 2005 ------------------------------
TOSKI, SCHAEFER & CO., P.C.
F-1
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
AND SUBSIDIARIES
Consolidated Statements of Net Assets in Liquidation
(Liquidation Basis)
December 31, 2004 and 2003
2004 2003
------- -------
Assets - cash $ - 533,025
------- -------
Liabilities:
Accounts payable and accrued expenses - 13,421
Distributions payable - 99,681
Estimated costs during the period of liquidation - 68,745
------- -------
Total liabilities - 181,847
------- -------
Net assets in liquidation $ - 351,178
======= =======
See accompanying notes to consolidated financial statements.
F-2
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
AND SUBSIDIARIES
Consolidated Statements of Changes in Net Assets in Liquidation
(Liquidation Basis)
For the years ended December 31, 2004 and 2003 and
for the period June 1, 2002 to December 31, 2002
2004 2003 2002
---------- ----------- ----------
Partners' equity at June 1, 2002 (going concern basis) $ -- -- 2,883,271
Adjustment to Liquidation Basis - loss on settlement
of lawsuit -- -- (257,929)
----------
Net assets in liquidation at beginning of period 351,178 351,178 2,625,342
Interest on note receivable -- -- 28,380
Reduction of note receivable -- -- (100,000)
Operating loss -- -- (102,544)
Estimated costs during the period of liquidation -- -- (100,000)
Transfer to the Corporate General Partner (69,961)(1) -- --
Distributions to limited partners (281,217)(2) -- (2,000,000)
---------- ------- ----------
Net assets in liquidation at end of period $ -- 351,178 351,178
========== ======= ==========
(1) In addition to the transfer to the Corporate General Partner of $69,961,
which will be used to pay remaining payables during liquidation, a cash
transfer of $83,008 was also made to the Corporate General Partner. The
cash transfer of $83,008 represents uncashed investor checks for
distributions for the years 2000 through 2002.
(2) The distributions to the limited partners was made by the Corporate
General Partner (Realmark Properties, Inc.) in accordance with the
assignment and assumption agreement dated December 17, 2004.
See accompanying notes to consolidated financial statements.
F-3
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
AND SUBSIDIARIES
Consolidated Statement of Operations
Period January 1, 2002 to May 31, 2002
Income:
Rental $ 405,338
Interest and other 49,844
-----------
Total income 455,182
-----------
Expenses:
Property operations 302,086
Interest 91,036
Administrative:
Affiliated parties 40,941
Other 65,308
-----------
Total expenses 499,371
-----------
Loss before gain on sale of property (44,189)
Gain on sale of property 2,682,934
-----------
Net income $ 2,638,745
===========
Net income per limited partnership unit $ 32.55
===========
Distributions per limited partnership unit $ --
===========
Weighted average number of limited partnership
units outstanding 78,625.1
===========
See accompanying notes to consolidated financial statements.
F-4
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
AND SUBSIDIARIES
Consolidated Statement of Partners' Equity
Period January 1, 2002 to May 31, 2002
Limited Partners
General ----------------
Partners Units Amount
------------ -------- ---------
Balances at December 31, 2001 $ (154,738) 78,625.1 399,264
Net income 53,925 - 2,584,820
------------ -------- ---------
Balances at May 31, 2002 $ (100,813) 78,625.1 2,984,084
============ ======== =========
See accompanying notes to consolidated financial statements.
F-5
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
AND SUBSIDIARIES
Consolidated Statement of Cash Flows
Period January 1, 2002 to May 31, 2002
Cash flows from operating activities:
Net income $ 2,638,745
Adjustments to reconcile net income to net
cash by used in operating activities:
Depreciation and amortization 2,657
Gain on sale of property (2,682,934)
Changes in:
Receivables from affiliated parties (6,678)
Escrow deposits 11,707
Other assets 21,743
Accounts payable and accrued expenses (19,776)
Security deposits and prepaid rents (1,048)
-----------
Net cash used in operating activities (35,584)
-----------
Cash flows from investing activities:
Proceeds from sale of property 4,784,669
Payments received on note receivable 50,000
-----------
Net cash provided by investing activities 4,834,669
-----------
Cash flows from financing activities - principal
payments on mortgage loans (2,620,735)
-----------
Net increase in cash and equivalents 2,178,350
Cash and equivalents at beginning of period 340,444
-----------
Cash and equivalents at end of period $ 2,518,794
===========
Supplemental disclosure of cash flow information -
cash paid for interest $ 105,784
===========
See accompanying notes to consolidated financial statements.
F-6
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2004, 2003 and 2002
(1) Liquidation of the Partnership
- -----------------------------------
On May 30, 2002, the Partnership sold its remaining property investment,
Players Club North Apartments, and adopted a plan of termination and
liquidation under which obligations to non-affiliates will be paid and net
proceeds will be distributed to the limited partners.
On December 30, 2004, the Partnership filed a Certificate of Cancellation
in the office of the Secretary of State of Delaware to cancel the
Certificate of Limited Partnership of Realmark Property Investors Limited
Partnership - VI B. The reason for filing of this Certification of
Cancellation is that the Partnership has been dissolved and the winding up
of the Partnership has been completed.
(2) Formation and Operation of Partnership
- -------------------------------------------
Realmark Property Investors Limited Partnership - VI B (the Partnership) is
a Delaware limited partnership formed on September 21, 1987, to invest in a
diversified portfolio of income producing real estate investments.
In 1989 and 1990, the Partnership sold, through a public offering, 78,625.1
units of limited partnership interest for $7,862,510. The general partners
are Realmark Properties, Inc. (the Corporate General Partner) and Joseph M.
Jayson (the Individual General Partner) who 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 (note 6).
(3) Summary of Significant Accounting Policies
- -----------------------------------------------
(a) Basis of Accounting and Consolidation
-----------------------------------------
As a result of the plan of termination and liquidation, the Partnership
changed its basis of accounting from the going concern basis 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.
In estimating liquidation values, fees paid to the plaintiffs' legal
counsel, amounting to $257,929, were recorded as a loss on settlement
of the lawsuit.
F-7
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(3) Summary of Significant Accounting Policies, Continued
- ----------------------------------------------------------
(a) Basis of Accounting and Consolidation, Continued
----------------------------------------------------
The accompanying consolidated financial statements have been prepared
on the accrual basis of accounting in accordance with accounting
principles generally accepted in the United States of America and
include the accounts of the Partnership and its two subsidiaries, that
are wholly-owned:
(1) Realmark-Players, LLC that owned Players Club North, a 144 unit
apartment complex located in Lutz, Florida, acquired in 1991. On
May 30, 2002, Players Club North was sold.
(2) Realmark-Villa, LLC that owned Fairway Club, a 192 unit apartment
complex located in Greenville, South Carolina, acquired in 1991
for $3,100,000. On August 16, 2001, Fairway Club was sold.
In consolidation, all intercompany accounts and transactions have been
eliminated.
(b) Estimates
-------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
(c) Cash and Equivalents
------------------------
Cash and equivalents include money market accounts and any highly
liquid debt instruments purchased with a maturity of three months or
less.
(d) Deferred Mortgage Costs
---------------------------
Costs incurred in obtaining mortgage financing are deferred and
amortized using the straight-line method over the life of the
respective mortgage.
(e) Joint Ventures
------------------
The Partnership's minority interests in joint ventures are accounted
for on the equity method.
(f) Rental Income
-----------------
Rental income is recognized as earned according to the terms of the
leases that are generally for periods of one year or less, payable
monthly. Delinquent rents are not recorded.
F-8
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(3) Summary of Significant Accounting Policies, Continued
- ----------------------------------------------------------
(g) Per Unit Data
-----------------
Per limited partnership unit data is based on the weighted average
number of limited partnership units outstanding for the period.
(h) Income Allocation and Distributable Cash Flows
--------------------------------------------------
The partnership agreement provides that income not arising from sale
and refinancing activities and all partnership losses are to be
allocated 97% to the limited partners and 3% to the general partners.
Partnership income arising from sale or refinancing activities is
allocated in the same proportion as distributions of distributable cash
from sales proceeds. In the event there is no distributable cash from
sales proceeds, taxable income will be allocated 87% to the limited
partners and 13% to the general partners. The above is subject to tax
laws that were applicable at the time of the formation of the
Partnership and may be adjusted due to subsequent changes in the
Internal Revenue Code.
The partnership agreement also provides for the distribution to the
partners of net cash flow from operations. As a result of the sale of
the Partnership's last property, there will be no future distributions
of net cash flow from operations. Sale or refinancing proceeds are
distributable to the extent available, 100% to the limited partners
until there has been a return of the limited partner's capital
contribution plus an amount sufficient to provide a 7%, not compounded,
return on their adjusted capital contributions for all years following
the termination of the offering of the units. It is anticipated that
there will not be sufficient cash flow from the sale of the
Partnership's remaining property to provide this return to the limited
partners.
(i) Income Taxes
----------------
No income taxes are included in the consolidated financial statements
since the taxable income or loss of the Partnership is reportable by
the partners on their income tax returns. At December 31, 2004, net
assets for financial reporting purposes were equal to the tax bases of
the net assets.
(j) Segment Information
-----------------------
The Partnership's operating segments all involve the ownership and
operation of income-producing real property, and are aggregated into
one reporting segment.
F-9
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(4) Investments in Real Estate
- -------------------------------
On January 1, 2002, the Partnership adopted SFAS No. 144, "Accounting for
the Impairment or Disposal of Long-Lived Assets." SFAS No. 144 superseded
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of." SFAS No. 144 establishes the
accounting and reporting standards for the impairment or disposal of
long-lived assets by requiring those assets to be measured at the lower of
depreciated cost or fair value less selling costs, whether reported on
continuing operations or in discontinued operations. This standard does not
change the fundamental provisions of SFAS No. 121; however, it resolves
various implementation issues of SFAS No. 121. The adoption of this
standard did not have a material effect on the Partnership's consolidated
financial position or results of operations for the year ended December 31,
2002.
Players Club North Apartments was classified as property held for sale
prior to the adoption of SFAS No. 144 and, accordingly, its results of
operations and gain on sale have been recorded in continuing operations. On
May 30, 2002, the Partnership sold Players Club North Apartments to an
unaffiliated entity for cash of $5,548,000 and recognized a related gain on
the sale amounting to $2,682,934.
(5) Estimated Costs During the Period of Liquidation
- -----------------------------------------------------
Under the liquidation basis of accounting, the Partnership is required to
estimate and record the costs associated with executing the plan of
liquidation as a liability. These amounts can vary significantly due to,
among other things, the costs of retaining personnel, the costs of
insurance, the timing and amounts associated with discharging known and
contingent liabilities and the costs associated with cessation of the
Partnership's operations. These costs are estimates and are expected to be
paid out over the liquidation period. The Partnership's estimated costs
during the period of liquidation as of December 31, 2004, 2003 and 2002 are
as follows:
2004 2003 2002
---- ---- ----
Professional fees $ 8,177 44,941 70,000
Office and administrative expense 18,910 23,804 30,000
---------- -------- ----------
Total 27,087 68,745 100,000
Transfer to Corporate General partner (27,087) - -
---------- -------- ----------
Total $ - 68,745 100,000
========== ======== ==========
F-10
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(6) Related Party Transactions
- -------------------------------
The Corporate General Partner and its affiliates earn fees, principally for
property and partnership management and are reimbursed for services
rendered to the Partnership, as provided for in the partnership agreement.
A summary of those items follows:
Liquidation
period
Year ended Year ended June 1 to January 1 to
December 31, December, 31 December 31 May 31,
2004 2003 2002 2002
------------ ------------- ----------- ------------
Property management fees
based on a percentage
(generally 5%) of rental
income $ - - - 22,158
Liquidation
period
Year ended Year ended June 1 to January 1 to
December 31, December, 31 December 31 May 31,
2004 2003 2002 2002
---- ---- ---- ----
Reimbursement for cost of services to
the Partnership that include investor
relations, marketing of properties,
professional fees, communications,
supplies, accounting, printing, postage
and other items 4,894 6,196 3,562 18,783
--------- ------- ------ --------
$ 4,894 6,196 3,562 40,941
========= ======= ====== ========
In addition to the above, other property specific expenses such as payroll,
benefits, etc. are charged to property operations on the Partnership's
consolidated statements of operations.
Property Disposition Fee
------------------------
According to the terms of the partnership agreement, the general partners
are also allowed to collect a property disposition fee upon sale of
acquired properties. This fee is not to exceed the lesser of 50% of amounts
customarily charged in arm's-length transactions by others rendering
similar services for comparable properties or 3% of the sales price. The
property disposition fee is subordinate to payments to the limited partners
of a cumulative annual return (not compounded) equal to 7% of their average
adjusted capital balances and to repayment to the limited partners of an
amount equal to their original capital contributions. Since these
conditions described above have not been met, no disposition fees have been
paid or accrued on properties sold in prior years.
F-11
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(6) Related Party Transactions, Continued
- ------------------------------------------
Distributions
-------------
U.S.Apartments, LLC, is an affiliated company in which the Individual
General Partner is the Chairman, Director, and sole stockholder. U.S.
Apartments, LLC owns 4,046.2 units of limited partnership interest and
received its proportionate share of distributable proceeds amounting to
$102,989 in November 2002 from the sale of Players Club North Apartments
and $14,481 in December 2004 in connection with the liquidation of the
partnership.
(7) Settlement of Lawsuit
- -------------------------
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 at the state court level regarding the payment of fees
and other management issues.
On August 29, 2001, the parties entered into a Stipulation of Settlement
(the "Settlement"). On October 4, 2001, the Court issued an "Order
Preliminary Approving Settlement' (the "Hearing Order") and on November 29,
2001, the court issued an "Order and Final Judgment Approving Settlement
and Awarding Fees and Expenses" and dismissing the complaints with
prejudice. The Settlement provided, among other things, that all of the
Realmark Partnerships' properties be disposed of. The general partners will
continue to have primary authority to dispose of Partnerships' properties.
If either (i) the general partners have not sold or contracted to sell 50%
of the Partnerships' properties (by value) by April 2, 2002 or (ii) the
general partners have not sold or contracted to sell 100% of the
Partnerships' properties by September 29, 2002, then the primary authority
to dispose of the Partnerships' properties will pass to a sales agent
designated by plaintiffs' counsel and approved by the Court. On October 4,
2002, the court appointed a sales agent to work with the general partners
to continue to sell the Partnerships' remaining properties.
The settlement also provided for the payment by the Partnerships of fees to
the plaintiffs' attorneys. These payments are payable out of the proceeds
from the sale of all of the properties owned by all of the Realmark
Partnerships, following the sale of the last of these properties in each
partnership. Plaintiffs' counsel will receive 15% of the amount by which
the sales proceeds distributable to limited partners in each partnership
exceeds the value of the limited partnership units in each partnership
(based on the weighted average of the units' trading prices on the
secondary market as reported by Partnership Spectrum for the period May
through June 2001). In no event may the increase on which the fees are
calculated exceed 100% of the market value of the units as calculated
above. On May 30, 2002, the Partnership sold its remaining property, and in
June 2002, a payment of $257,929 was made to the plaintiffs' attorneys.
F-12
Schedule III
------------
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
AND SUBSIDIARIES
Real Estate and Accumulated Depreciation
December 31, 2002
(1) Cost for Federal income tax purposes - none.
(2) A reconciliation of the carrying amount of land and buildings as of December
31, 2002 is as follows:
Balance at January 1, 2002 $ 3,097,879
Disposition (4) (3,097,879)
---------------
Balance at December 31, 2002 $ -
===============
(3) A reconciliation of accumulated depreciation for building and improvements
for the year ended December 31, 2002 is as follows:
Balance at January 1, 2002 $ 1,032,199
Disposition (4) (1,032,199)
---------------
Balance at December 31, 2002 $ -
===============
(4) Sale of Players Club North Apartments in 2002.
F-13