UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period ended ______________to________________
Commission file number 333-35063
Baron Capital Trust
(Exact name of small business issuer as specified in its charter)
Delaware 31-1574856
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
Cooper Road, Cincinnati, Ohio 45242
(Address of principal executive offices)
(513) 984-5001
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 [_]
As of the date of this Report, the Registrant has outstanding 699,076 common
shares of beneficial interest ("Common Shares"), its only class of common
equity.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
See the following pages.
<PAGE>
BARON CAPITAL TRUST
INDEX TO FINANCIAL STATEMENTS
PAGE
----
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Balance Sheets F-2
Statements of Operations F-3
Statements of Cash Flows F-4-F-5
Notes to Financial Statements F-6-F-15
F-1
<PAGE>
BARON CAPITAL TRUST
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
----------- ------------
(Unaudited)
ASSETS
<S> <C> <C>
Rental Apartments:
Land $ 1,178,693 $ 1,178,693
Depreciable property 6,189,095 6,189,095
----------- -----------
7,367,788 7,367,788
Less accumulated depreciation 1,488,141 1,453,177
----------- -----------
5,879,647 5,914,611
Investments in Partnerships 893,130 930,970
Cash and Cash Equivalents 50,439 33,774
Restricted Cash 80,786 52,089
Reimbursed Administrative Expenses Receivable, Affiliates 35,284 36,997
Due From Managing Shareholder -- 14,783
Other Receivables 3,724 3,724
Advances to Affiliates -- 5,141
Other Property and Equipment 137,055 134,981
Other Assets 163,086 209,128
----------- -----------
$ 7,243,151 $ 7,336,198
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Mortgages payable $ 4,263,480 $ 4,278,117
Accounts payable and accrued liabilities 1,238,492 1,295,092
Note payable 100,000 100,000
Notes payable, affiliates 52,000 50,000
Capital lease obligation 42,369 42,369
Security deposits 43,066 40,308
----------- -----------
Total liabilities 5,739,407 5,805,886
----------- -----------
Shareholders' Equity:
Common shares of beneficial interest, no par value; 2,500,000
shares authorized; 694,156 and 675,086 shares issued and outstanding 6,846,720 6,616,806
Deficit (5,000,469) (4,743,987)
Distributions (342,507) (342,507)
----------- -----------
Total shareholders' equity 1,503,744 1,530,312
----------- -----------
$ 7,243,151 $ 7,336,198
=========== ===========
</TABLE>
See notes to condensed consolidated financial statements.
F-2
<PAGE>
BARON CAPITAL TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Three
Months Months
Ended Ended
March 31, March 31,
2000 1999
--------- ---------
(Unaudited) (Unaudited)
<S> <C> <C>
Revenues:
Property:
Rental $ 267,668 $ 257,350
Equity in net loss of unconsolidated partnership (37,840) (3,426)
Interest and other income 25,540 5,227
--------- ---------
255,368 259,151
--------- ---------
Real Estate Expenses:
Depreciation 40,825 36,453
Interest 85,459 73,186
Repairs and maintenance 25,809 17,476
Personnel 16,672 29,040
Property taxes 19,904 20,596
Property insurance 5,360 7,206
Utilities 13,374 11,551
Other 5,860 9,214
--------- ---------
213,263 204,722
--------- ---------
Administrative Expenses:
Personnel, including officer's compensation 159,618 227,161
Professional services 161,120 152,583
Other (22,151) 129,323
--------- ---------
298,587 509,067
--------- ---------
Total expenses 511,850 713,789
--------- ---------
Net Loss $(256,482) $(454,638)
========= =========
Net Loss Per Share $ (0.37) $ (0.87)
========= =========
</TABLE>
See notes to condensed consolidated financial statements.
F-3
<PAGE>
BARON CAPITAL TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three Three
Months Months
Ended Ended
March 31, March 31,
2000 1999
--------- ---------
<S> <C> <C>
(Unaudited) (Unaudited)
Cash Flows from Operating Activities:
Net loss $(256,482) $(454,638)
Adjustments to reconcile net loss to
net cash used by operating activities:
Equity in net loss of unconsolidated partnership 37,840 3,426
Credit for estimated fair value of services performed by officer 54,270 --
Depreciation 40,825 41,267
Changes in operating assets and liabilities:
(Increase) decrease in operating assets:
Other receivables 14,783 (19,642)
Reimbursed administrative expenses receivable 1,713 --
Other assets 46,042 15,437
Increase (decrease) in operating liabilities:
Accounts payable and accrued liabilities (56,600) (95,963)
Security deposits 2,758 2,529
--------- ---------
Net cash used by operating activities (114,851) (507,584)
--------- ---------
Cash Flows from Investing Activities:
Investments in partnerships -- (675,000)
Purchases of other property and equipment (7,935) (30,421)
Repayment of advances to affiliates 5,141 --
Increase in restricted cash (28,697) (2,345)
--------- ---------
Net cash used in investing activities (31,491) (707,766)
--------- ---------
</TABLE>
See notes to condensed consolidated financial statements.
F-4
<PAGE>
BARON CAPITAL TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Continued)
<TABLE>
<CAPTION>
Three Three
Months Months
Ended Ended
March 31, March 31,
2000 1999
----------- -----------
(Unaudited) (Unaudited)
<S> <C> <C>
Cash Flows from Financing Activities:
Proceeds from sale of common shares of beneficial interest 175,644 1,132,402
Distributions paid -- (74,182)
Proceeds from notes payable, affiliates 2,000 --
Payments on mortgages payable (14,637) (9,908)
----------- -----------
163,007 1,048,312
----------- -----------
Net Decrease in Cash and Cash Equivalents 16,665 (167,038)
Cash and Cash Equivalents, Beginning 33,774 177,299
----------- -----------
Cash and Cash Equivalents, Ending $ 50,439 $ 10,261
=========== ===========
Supplemental Disclosure of Cash Flow Information:
Cash paid for mortgage and other interest $ 85,459 $ 73,186
=========== ===========
</TABLE>
See notes to condensed consolidated financial statements.
F-5
<PAGE>
BARON CAPITAL TRUST
NOTES TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
MARCH 31, 2000
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The condensed consolidated balance sheet as of March 31, 2000,
the condensed consolidated statements of operations for the three
months ended March 31, 2000 and 1999 and the condensed
consolidated statements of cash flows for the three months ended
March 31, 2000 and 1999 have been prepared by the Trust. In the
opinion of management, all adjustments (which include
reclassifications and normal recurring adjustments) necessary to
present fairly the financial position, results of operations and
cash flows at March 31, 2000 and for the period presented, have
been made.
Certain information and footnote disclosures normally included in
the financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted. It
is suggested that these condensed consolidated financial
statements be read in conjunction with the Trust's financial
statements and notes thereto included in the Trust's December 31,
1999 Form 10-KSB. The results of operations for the three months
ended March 31, 2000 are not necessarily indicative of the
operating results for the full year.
Organization and Capitalization
Baron Capital Trust (the "Trust") was organized as a business
trust in Delaware on July 31, 1997. The Trust and its affiliate,
Baron Capital Properties, L.P. (the "Operating Partnership" or
the "Partnership"), a Delaware limited partnership, have been
organized to acquire equity interests in residential apartment
properties located in the United States and to provide or acquire
debt mortgage loans secured by such types of property.
The Managing Shareholder of the Trust is Baron Advisors, Inc., a
Delaware corporation which will manage the operations of the
Trust and the Operating Partnership subject to the supervisory
authority of the Board of the Trust over the activities of the
Trust and the Operating Partnership and the Board's prior
approval authority in respect of certain actions of the Trust and
the Operating Partnership specified in the Declaration of Trust
of the Trust.
The Trust's Declaration authorizes it to issue up to 25,000,000
shares of beneficial interest, no par value per share, consisting
of common shares and of preferred shares of such classes with
such preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends, qualifications, or
terms or conditions of redemption as the Managing Shareholder may
create and authorize from time to time in accordance with
Delaware law and the Declaration.
The Trust commenced operations on February 3, 1998, at which time
it received its initial capital contribution.
F-6
<PAGE>
BARON CAPITAL TRUST
NOTES TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
MARCH 31, 2000
NOTE 2. BASIS OF PRESENTATION
The accompanying consolidated financial statements have been
prepared in conformity with generally accepted accounting
principles which assume that the Trust will continue on a going
concern basis, including the realization of assets and
liquidation of liabilities in the ordinary course of business.
However, for 1999 and 1998, the Trust incurred net losses of
$3,166,937 and $1,577,060 and negative cash flows from operations
of $1,022,587 and $1,408,715, respectively, and for the three
months ended March 31, 2000 had a net loss of $ 256,482, and has
limited liquid resources as of March 31, 2000. The auditors'
report for the year ended December 31, 1999 was modified to
express a substantial doubt about the Trust's ability to continue
as a going concern.
Management's plans to continue its operations and become
profitable encompass the following:
o The Trust plans to continue to raise capital through its
Cash Offering, which has been extended to May 31, 2000 and
also intends to make additional public or private offerings
of common shares and/or Operating Partnership units within
the 12 month period following the commencement of the
proposed Exchange Offering, whose registration became
effective on November 9, 1999.
o The Trust, through its Operating Partnership, intends to
continue to acquire rental properties using proceeds from
the Trust's Cash Offering and in the Exchange Offering
described in Note 5. The operating results of the Trust and
the Operating Partnership will depend primarily upon income
from the residential apartment properties in which they
directly or indirectly acquire an equity or subordinate
mortgage interest. Operating results in respect of equity
interests will be substantially influenced by the demand and
supply of residential apartment units in their primary
market and sub-markets, and operating expense levels.
Operating results in respect of mortgage and other debt
interests will depend upon interest income, including, in
certain cases, participation interest, whose payment will
depend upon the operating performance, sale or refinancing
of the underlying properties. The operating results of the
Trust and Operating Partnership will also depend upon the
pace and price at which they can acquire and improve
additional property interests.
o See Note 7 regarding the completion of the Exchange Offering
on April 7, 2000 under which the Trust, through the
Operating Partnership, acquired additional interests in
residential apartment properties.
In view of these matters, realization of a major portion of the
assets in the accompanying consolidated balance sheet is
dependent upon the continued operations of the Trust, which in
turn is dependent upon the Trust's ability to meet its capital
and financing requirements, and the success of its future
operations. Management believes that the actions presently being
taken by the Trust provide the opportunity for the Trust to
continue as a going concern. However, there can be no assurance
that management will be successful in the implementation of its
plans to raise adequate amounts of capital or that future
operations will become profitable. The accompanying consolidated
financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
F-7
<PAGE>
BARON CAPITAL TRUST
NOTES TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
NOTE 3. COMMITMENTS AND CONTINGENCIES
Contract to Purchase Additional Properties
In September 1998, the Trust entered in an agreement with three
real estate development companies to acquire two luxury
residential apartment properties in the development stage upon
the completion of construction. The development companies
(Brentwood at Southgate, Ltd., Burlington Residential, Ltd. and
The Shoppes at Burlington, Ltd.) are controlled by one of the
Trust's founders and chief executive officer. The properties are
scheduled to have a total of 652 units, comprised of one, two and
three bedroom/one or two bathroom apartments. Construction of one
of the properties, located in Louisville, Kentucky, is expected
to be completed prior to the end of 2000, and construction of the
other property, located in Burlington, Kentucky (part of the
Cincinnati metropolitan area), is expected to be completed by the
end of 2001. The aggregate purchase price for the two properties
is in the range of approximately $41,000,000 to $43,000,000. The
closing of each acquisition, which is expected to occur shortly
following the completion of construction, is conditioned on,
among other things, the completion of the respective apartment
property, the availability of first mortgage financing and the
Trust's raising the balance of the funds necessary for the
acquisition in its ongoing Cash Offering or otherwise having
funds available to make the acquisition.
In connection with the transaction and in exchange for certain
benefits described below, the Trust agreed to co-guarantee (along
with the chief executive officer), up to 35% (or approximately
$12,500,000) of the development portion of long-term construction
loans with an aggregate principal amount of up to $36,000,000 to
be provided by a bank to the development companies. As of March
31, 2000, approximately $6,150,000 of such loans had been drawn
down, resulting in outstanding guarantees of approximately
$2,150,000. Subject to the fulfillment of certain closing and
funding conditions, the construction loans will be made to the
development companies in connection with the development and
construction of the two apartment properties and of an 111,000
square foot shopping center being developed in Burlington,
Kentucky. The interest rates on the construction loans range from
7.36% to 7.52%. The Trust also agreed that, if the loans were not
repaid prior to the expiration of the guarantee, it would either
buy out the bank's position on the entire amount of the
construction loans or arrange for a third party to do so. The
construction loans are expected to be replaced by a long-term
credit facility.
The Trust expects to receive significant benefits from the
transaction in addition to the acquisition of two large luxury
apartment properties located in attractive communities. In
exchange for the guarantee of the development portion of the
construction loans, the Trust will receive a discount of
approximately $212,500 (representing a one-half of one percent
reduction) on the purchase price of the properties. The Trust and
the development companies are negotiating a further price
reduction, which would apply if the development portion of the
loans is not repaid prior to the expiration of the guarantee
period and the Trust is required to buy out or arrange for the
buyout of the lender's position on the loans.
F-8
<PAGE>
BARON CAPITAL TRUST
NOTES TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
NOTE 3. COMMITMENTS AND CONTINGENCIES (Continued)
Officers' Compensation
A founder of the Trust and the Operating Partnership serves as
Chief Executive Officer of the Trust, the Operating Partnership
and the Managing Shareholder. He has agreed to serve a Chief
Executive Officer for the first year in exchange for compensation
in the form of common shares of the Trust or units of the
Operating Partnership in an amount not to exceed 25,000 shares or
units, as applicable, to be determined by the Executive
Compensation Committee based upon his performance, in addition to
benefits and eligibility for participation in any option plan and
bonus incentive compensation plan which may be implemented by the
Trust. During 1999 and 1998, no common shares of the Trust or
units of the Operating Partnership were issued to the Chief
Executive Officer as compensation. However, in order to reflect
all appropriate administrative expenses of the Partnership, a
provision of $54,250 has been made in the accompanying financial
statements for the estimated fair value of the services rendered
by the Chief Executive Officer for the first quarters of 1999 and
2000. This amount has been charged to compensation expense, with
corresponding credits to partners' capital. This estimate of the
fair value of such services was determined by management based
upon an analysis of compensation paid to chief executive officers
of a number of comparable real estate investment trusts.
Compensation and benefits for the Chief Executive Officer are
determined annually by the Executive Compensation Committee of
the Board of the Trust.
The other founder of the Trust and Operating Partnership serves
as the Chief Operating Officer of the Trust, the Operating
Partnership and the Managing Shareholder. His initial annual
salary has been set at $100,000, in addition to benefits, and
eligibility for participation in any common share option plan and
bonus incentive compensation plan which may be implemented by the
Trust.
Underwriting Agreement
In connection with the Cash Offering, the Trust issued to Sigma
Financial Corporation (the Underwriter), warrants to purchase an
amount equal to 8.5% of the number of Common Shares sold on a
best effort basis, by the Underwriter and participating
broker-dealers selected by the Underwriter and the Trust. The
warrants may be purchased at any time and from time to time
through May 15, 2003 at an exercise price of $13 per warrant
share. The Trust has reserved 212,500 shares under the
Underwriting Agreement, which represents 8.5% of the 2,500,000
shares offered in the Cash Offering. As of March 31, 2000, the
Underwriter has the option to purchase up to 57,613 shares at $13
per share.
F-9
<PAGE>
BARON CAPITAL TRUST
NOTES TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
NOTE 4. RELATED PARTY TRANSACTIONS
Trust Management Agreement
The Trust has entered into a Trust Management Agreement with the
Managing Shareholder under which the Managing Shareholder is
obligated to provide management, administrative and investment
advisory services to the Trust. The services to be rendered
include, among other things, communicating with and reporting to
investors, administering accounts, providing to the Trust of
office space, equipment and facilities and other services
necessary for the Trust's operation, and representing the Trust
in its relations with custodians, depositories, accountants,
attorneys, brokers and dealers, corporate fiduciaries, insurers,
banks and others, as required. The Managing Shareholder is also
responsible for determining which real estate investments and
non-real estate investments (including the temporary investment
of the Trust's available funds prior to their commitment to
particular real estate investments) the Trust will make and for
making divestment decisions, subject to the provisions of the
Declaration. The Trust Management Agreement has an initial term
of one year and may be extended on a year-to-year basis on
approval of the Board or a majority of the stockholders entitled
to vote on such matter or a majority of the Independent Trustees.
The Trust will reimburse the Managing Shareholder for all Trust
expenses in an amount not to exceed 2% of gross proceeds from the
sale by the Trust of common shares in the Trust's initial
offering. Under the Trust Management Agreement, the Trust will
reimburse the Managing Shareholder, on a monthly basis during the
term of the agreement, for its operating expenses relating to the
business of the Trust and the Operating Partnership in an amount
up to the sum of 1% of the gross proceeds from the sale by the
Trust of common shares in the Trust's initial offering, and 1% of
the initial assigned value for each unit of limited partnership
interest ("Unit") in the Operating Partnership issued in
connection with a proposed Exchange Offering of Units as
contemplated in the Trust's Prospectus. The Managing Shareholder
in its sole discretion may elect to receive payment for its
service in the form of common shares with an equivalent value.
The Trust will also reimburse the Managing Shareholders for
expenses incurred prior to and during the Cash Offering in
investigating and evaluating investment opportunities and
assisting the Trust in consummating its investments in an amount
not to exceed 4% of the gross proceeds from the sale by the Trust
of common shares in the Trust's initial offering for the Managing
Shareholder's services.
Reimbursed Administrative Expenses
The Partnership shares certain administrative expenses with a
number of other partnerships that are related to the Partnership
by means of a common person who is the sole stockholder and
officer of the general partner of these partnerships and an
officer of the general partner of the Partnership. These
administrative expenses are allocated as described below, and the
allocated expenses are reimbursed to the Partnership by these
other partnerships. The allocation of the costs was determined
based upon an analysis of those administrative costs directly
associated with or reasonably allocated to the activities of each
entity. Personnel costs were allocated based upon estimates of
the time devoted by individual employees to each entity's
activities on a monthly basis. Other administrative costs were
allocated on a direct basis to the extent practicable, and the
balance on a pro rata basis. In the
F-10
<PAGE>
BARON CAPITAL TRUST
NOTES TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
NOTE 4. RELATED PARTY TRANSACTIONS (Continued)
opinion of management, the method used to allocate costs to all
of the entities was considered to be reasonable under the
circumstances.
During the three months ended March 31, 2000 and 1999, the
Partnership was reimbursed approximately $206,174 and $196,000,
respectively, for administrative expenses, which have been
presented as a reduction of the specific related category of
administrative expenses in the accompanying financial statements.
NOTE 5. SHAREHOLDERS' EQUITY
Cash Offering
On May 15, 1998, pursuant to a registration statement on Form
SB-2, the Trust commenced an initial public offering of a maximum
of 2,500,000 common shares of beneficial interest in the Trust at
$10 per common share, which is payable in full upon subscription,
for proposed total gross proceeds of $25,000,000 (the Cash
Offering). All of the common shares to be issued or sold by the
Trust in the offering will be tradable without restriction under
the Securities Act, but will be subject to certain restrictions
designed to permit the Trust to qualify and maintain its status
as a Real Estate Investment Trust under the Internal Revenue
Code. The Cash Offering, as amended, will terminate no later than
May 31, 2000.
Exchange Offering
The Operating Partnership has filed a registration statement on
Form S-4 with the Securities and Exchange Commission (the
"Commission") covering up to 2,500,000 units of limited
partnership interest ("Units") to be registered under the
Securities Act of 1933, as amended (the "Act") ("Exchange
Offering").
It is proposed that these units would be exchanged for units of
limited partnership interest in 23 limited partnerships (the
"Exchange Partnerships"), which directly or indirectly own equity
and/or mortgage interests in one or more residential apartment
properties. The Exchange Partnerships are managed by corporate
general partners who are affiliated with one of the founders of
the Operating Partnership, who is the sole stockholder and
director of the Managing Shareholder of the Trust. This
registration statement was declared effective on November 9,
1999, and the Exchange Offering commenced shortly thereafter.
The number of Units being offered in exchange for the limited
partnership interests in the Exchange Partnerships will be based
on appraisals prepared by qualified and licensed independent
appraisal firms for each underlying residential apartment
property. For purposes of the Exchange Offering, each Unit has
been arbitrarily assigned an initial value of $10, which
corresponds to the offering price of each Trust Common Share
currently being offered to the public pursuant to the Cash
Offering. The value of each Unit and Common Share outstanding
will be substantially identical since Unit holders, including
recipients of Units in the Exchange Offering, will be entitled to
exchange all or a portion of their Units at any time and from
time to time for an equivalent number of Trust Common Shares, so
long as the exchange would not cause the exchanging party to own
(taking into account certain ownership
F-11
<PAGE>
BARON CAPITAL TRUST
NOTES TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
NOTE 5. SHAREHOLDERS' EQUITY (Continued)
Exchange Offering (Continued)
attribution rules) in excess of 5% of the then outstanding shares
in the Trust, subject to the Trust's right to cash out any holder
of Units who requests an exchange and subject to certain other
exceptions. To facilitate such exchanges of Units into Common
Shares, 2,500,000 Common Shares (in addition to the 2,500,000
Common Shares being offered by the Trust in the Cash Offering)
have been registered with the Commission.
As its initial investment targets in the Exchange Offering, the
Operating Partnership is offering to acquire equity and/or
subordinated mortgage interests in 26 properties (the "Exchange
Properties") directly or indirectly owned by the 23 Exchange
Partnerships. The Operating Partnership will acquire interests in
a particular property and/or mortgages by acquiring from limited
partners their units of limited partnership interest in the
respective Exchange Partnership. Each of the Exchange
Partnerships directly or indirectly owns equity and/or mortgage
interests in one or more properties. Certain of the Exchange
Partnerships directly or indirectly own equity interests in 16
properties, which consist of an aggregate of 1,012 residential
units (comprised of studio, one, two, three and four bedroom
units). Certain of the Exchange Partnerships directly or
indirectly own mortgage interests in 10 properties, which consist
of an aggregate of 813 existing residential units (studio and one
and two bedroom units) and 168 units (two and three bedroom
units) under development. Of the Exchange Properties, 21
properties are located in Florida, three properties in Ohio and
one property each in Georgia and Indiana.
See Note 7 regarding the completion of the Exchange Offering on
April 7, 2000 under which the Trust, through the Operating
Partnership, acquired additional interests in residential
apartment properties.
Operating Partnership Limited Partnership Units
In connection with the formation of the Trust and the Operating
Partnership, the Original Investors each subscribed for 601,080
limited partnership units of the Operating Partnership (a total
of 1,202,160 units). In consideration for the units subscribed
for by them, the Original Investors made a $100,000 capital
contribution to the Operating Partnership. If the Cash Offering
and the Exchange Offering are fully subscribed, those Units would
represent 19% of the total Common Shares outstanding after
completion of the Cash Offering and exchange by the Operating
Partnership of 2,500,000 of its Units for units of limited
partnership interest in real estate limited partnerships
(including any exchange pursuant to the Exchange Offering),
calculated on a fully diluted basis assuming all then outstanding
Units (other than those acquired by the Trust) have been
exchanged into an equivalent number of Common Shares. If,
however, as of May 31, 2000, the Cash Offering and/or the
Exchange Offering has been completed and the number of Units
subscribed for by each Original Investment represents a
percentage greater than 19% of the then outstanding Common
Shares, calculated on a fully diluted basis assuming that all
then outstanding Units (other than those acquired by the Trust)
F-12
<PAGE>
BARON CAPITAL TRUST
NOTES TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
NOTE 5. SHAREHOLDERS' EQUITY (Continued)
Operating Partnership Limited Partnership Units (Continued)
have been exchanged into an equivalent number of Common Shares,
each Original Investor has agreed to return any excess Units to
the Operating Partnership for cancellation. The Original
Investors have deposited Units subscribed for by them into a
security escrow account for six to nine years, subject to earlier
release under certain conditions.
The fair value of the units issued to the Original Investors
amounted to $100,000, based upon a determination made by the
Independent Trustees of the Trust as of the date of subscription
for these units (February 3, 1998). The determination of the fair
value took into consideration that at the time of the
subscription for the units, the Trust and the Partnership were
development stage companies, with no cash or other significant
tangible assets, operating history or revenue and no certainty of
successful offerings or future operations; the founders had at
risk their initial capital contributions plus certain additional
unreimbursed advances to cover certain offering and operating
expenses; the founders have significant experience and developed
know-how critical to the success of the Trust and the
Partnership; and the founders' units are subject to significant
transfer restrictions. The Partnership has accounted for the
units as being issued and outstanding, but subject to escrow
restrictions, in the accompanying consolidated financial
statements, and has included the units as outstanding in
determining the weighted average shares outstanding for purposes
of calculating net loss per partnership unit in the accompanying
consolidated financial statements. Because the release of the
units from escrow is not dependent upon the achievement of any
specified level of profits, the release of the units from escrow
is not considered to be compensatory and, accordingly, no
accounting measurement will be given to the release of the units
from escrow.
Under the subscription agreement, the Original Investors agreed
to waive future administrative fees for managing participating
Exchange Partnerships; agreed to assign to the Operating
Partnership the right to receive all residual economic rights
attributable to the general partner interests in participating
Exchange Partnerships; and, in order to permit management of the
Exchange Properties by the Operating Partnership, caused the
Exchange Partnerships to cancel the partnerships' prior property
management agreements and agreed to forego the right to have a
property management firm controlled by the Original Investors
assume the property management role in respect of properties in
which the Trust or the Operating Partnership invest.
After the exchange with the limited partners and assignment of
economic rights of the general partner, the Operating Partnership
will control the participating Exchange Partnerships by virtue of
its ownership of at least 90% of the limited partnership
interests therein, which will provide the Operating Partnership
the ability to remove the general partner under the provisions of
the limited partnership agreements that limited partners holding
over 50% of total partnership interest have the right to remove
the general partner.
Distributions
There were no distributions in the three months ended March 31,
2000.
F-13
<PAGE>
BARON CAPITAL TRUST
NOTES TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
NOTE 6. NET LOSS PER SHARE
The Trust computes per share data in accordance with Statement of
Financial Accounting Standards No. 128 (SFAS 128), "Earnings Per
Share". SFAS 128 requires dual presentation of basic and diluted
earnings per share on the face of the income statement.
Basic net loss per share equals net loss divided by the weighted
average shares outstanding during the year. The computation of
diluted net loss per share that includes dilutive common stock
equivalents in the weighted average shares outstanding has not
been presented, as it is anti-dilutive for both the three months
ended March 31, 2000 and 1999.
The components used in calculating basic net loss per share are
as follows:
Weighted
Average Loss
Net Loss Shares Per Share
--------- --------- ---------
Three Months Ended March 31, 2000 $(256,482) 694,156 $(.37)
========= ========= =====
Three Months Ended March 31, 1999 $(454,638) 522,495 $(.87)
========= ========= =====
NOTE 7. COMPLETION OF EXCHANGE OFFERING
In April 2000, pursuant to a registration statement on Form S-4,
the Operating Partnership completed an exchange offering (the
"Exchange Offering") under which it acquired additional interests
in residential apartment properties. In the Exchange Offering,
the Operating Partnership issued 2,434,274 registered Operating
Partnership Units (with an initial assigned value of $24,342,740)
in exchange for substantially all outstanding units of limited
partnership interest owned by individual limited partners
("Exchange Limited Partners") in 23 limited partnerships (the
"Exchange Partnerships"), which directly or indirectly own equity
and/or debt interests in one or more of 26 residential apartment
properties located in the southeast and mid-west United States.
Prior to the completion of the Exchange Offering, the Exchange
Partnerships were managed by corporate general partners (the
"Corporate General Partners"), which were controlled by Gregory
K. McGrath, who is the Chief Executive, sole stockholder and
director of the Managing Shareholder of the Trust.
Following the completion of the Exchange Offering, the Exchange
Partnerships continue to own the same property interests they
owned prior to the offering; substantially all of the limited
partnership interests in the 23 Exchange Partnership are owned by
the Operating Partnership; Mr. McGrath, for nominal
consideration, assigned to the Trust all of the equity stock in
18 of the Corporate General Partners and granted to the Board of
the Trust a management proxy coupled with an interest to vote the
shares of the remaining five Corporate General Partners; the
Corporate General Partner of each of the Exchange Partnerships
has assigned to the Operating Partnership all of its economic
interest in the partnership; and Mr. McGrath has caused each
Corporate General Partner to waive its right to receive from its
Exchange Partnership any ongoing fees, effective upon completion
of the exchange. As a result of the foregoing, the Operating
Partnership (and indirectly the Trust) own substantially all of
the economic interest represented by the equity and debt
interests owned by the Exchange Partnerships and control
management of such partnerships.
F-14
<PAGE>
BARON CAPITAL TRUST
NOTES TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
NOTE 7. COMPLETION OF EXCHANGE OFFERING (Continued)
The Exchange Offering expired on April 7, 2000. Under the terms
of the Exchange Offering, Exchange Limited Partners in a
particular Exchange Partnership were entitled to participate in
the offering only if limited partners holding at least 90% of the
units of limited partnership interest in that partnership
affirmatively elected to accept the offering. Exchange Limited
Partners holding approximately 97.4% of the outstanding units of
limited partnership in such partnerships accepted the offering,
and each of the Exchange Partnerships exceeded the 90%
requirement. As a result, following the completion of the
Exchange Offering, the limited partnership interests of nine
Exchange Partnerships are owned entirely by the Operating
Partnership (in the case of nine Exchange Partnership in which
all Exchange Limited Partners accepted the offering) and
substantially all of the limited partnership interests in the
other 14 Exchange Partnerships are owned by the Operating
Partnership, with the remaining limited partnership interests
being retained by Exchange Limited Partners who elected not to
accept the offering or failed to respond to the offering.
F-15
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation
The following discussion should be read in conjunction with the
Consolidated Financial Statements of Baron Capital Trust (the
"Registrant" or the "Trust") and the Notes thereto. (See ITEM 1 -
FINANCIAL STATEMENTS.)
Forward-looking Statements
This Management's Discussion and Analysis or Plan of Operation and
other sections of this Report contain certain forward-looking
statements within the meaning of the Securities Litigation Reform Act
of 1995 that are based on current expectations, estimates and
projections about the Trust's business, management's beliefs and
assumptions made by management. Words such as "expects",
"anticipates", "intends", "plans", "believes", "seeks", "estimates",
and variations of such words and similar expressions are intended to
identify such forward-looking statements. These statements are not
guarantees of future performance and involve certain risks,
uncertainties and assumptions that are difficult to predict.
Therefore, actual outcomes and results may differ materially from what
is expressed or forecasted in such forward-looking statements due to
numerous factors, including, but not limited to those discussed in
this Management's Discussion and Analysis or Plan of Operation section
of this Report, as well as those discussed elsewhere in this Report
and from time to time in the Trust's other Securities and Exchange
Commission filings and reports. In addition, such statements could be
affected by general domestic and international economic conditions.
The forward-looking statements contained in this Report speak only as
of the date on which they are made, and the Trust does not undertake
any obligation to update any forward-looking statement to reflect
events or circumstances after the date of this Report.
Results of Operations
The Trust commenced operations in the first half of 1998. The Trust
and its affiliate, Baron Capital Properties, L.P. (the "Operating
Partnership"), a Delaware limited partnership, constitute an
affiliated real estate company which has been organized to acquire
equity interests in residential apartment properties located in the
United States and/or to provide or acquire mortgage loans secured by
such types of property. The Operating Partnership conducts all of the
Trust's real estate operations and holds all direct or indirect
property interests acquired. The Trust is the sole general partner of
the Operating Partnership, and, in such capacity, the Trust controls
the activities of the Operating Partnership. As of May 12, 2000, the
Trust owned 699,076 Operating Partnership Units, representing
approximately 37% of the then outstanding Units.
As described below in this Report, in May 1998, the Trust commenced an
offering of up to 2,500,000 shares of beneficial interest in the Trust
at a purchase price of $10.00 per share (maximum proceeds of
$25,000,000). The offering is scheduled to be terminated on May 31,
2000. As of May 12, 2000, the Trust had sold and/or issued to
3
<PAGE>
the public 699,066 Common Shares for an aggregate purchase price of $
6,990,663, and the Trust intends to continue to sell Common Shares
through the termination of the Cash Offering.
Through the Operating Partnership, the Trust started acquiring
interests in properties including the entire limited partnership
interests in Heatherwood I Apartments (67 studio, one bedroom and two
bedroom units located in Kissimmee, Florida) in June 1998; Crystal
Court II Apartments (80 studio, one bedroom and two bedroom units
located in Lakeland, Florida) in July 1998; and Riverwalk Apartments
(50 two bedroom units located in New Smyrna, Florida) in September
1998. In July 1998 it acquired a limited partnership interest in 13
real estate limited partnerships managed by affiliates of Gregory K.
McGrath (a founder and Chief Executive Officer of the Trust and the
Operating Partnership). During 1998 and 1999, the Trust acquired
limited partnership interests in Alexandria Apartments which totaled
40% as of December 31, 1999 and remained unchanged as of March 31,
2000. The Alexandria Apartments are a 168-unit residential apartment
property under construction in Alexandria, Kentucky. Ninety-six of the
168 residential units (approximately 57%) have been completed as of
March 31, 2000 and are in the rent-up stage. Eighty-seven of the
completed units have been rented. The Trust has also entered into an
agreement under which, subject to certain conditions, it will acquire
two residential apartment properties (totaling 652 units) under
development in Burlington and Louisville, Kentucky upon completion of
construction.
In addition, in April 2000, pursuant to a registration statement on
Form S-4, the Operating Partnership completed an exchange offering
(the "Exchange Offering") under which it acquired additional interests
in residential apartment properties. In the Exchange Offering, the
Operating Partnership issued 2,434,274 registered units of limited
partnership interest in the Operating Partnership (the "Operating
Partnership Units") (with an initial assigned value of $24,342,740) in
exchange for substantially all outstanding units of limited
partnership interest owned by individual limited partners ("Exchange
Limited Partners") in 23 limited partnerships (the "Exchange
Partnerships"). The Exchange Partnerships directly or indirectly own
equity and/or debt interests in one or more of 26 residential
apartment properties (the "Exchange Properties") located in the
southeast and mid-west United States. Holders of Operating Partnership
Units (other than the Trust) are entitled to exchange all or a portion
of their Units at any time and from time to time for an equivalent
number of Common Shares of the Trust, so long as the exchange would
not cause the exchanging party to own (taking into account certain
ownership attribution rules) in excess of 5% of the then outstanding
Common Shares, subject to the Trust's right to cash out any holder of
Units who requests an exchange and subject to certain other
exceptions.
Certain of the Exchange Partnerships own direct or indirect equity
interests in 16 Exchange Properties which consist of an aggregate of
1,012 residential units (comprised of studio and one, two, three and
four-bedroom units). Certain of the
4
<PAGE>
Exchange Partnerships own direct or indirect mortgage interests in 10
Exchange Properties, which consist of an aggregate of 813 existing
residential units (studio and one and two bedroom) and 168 units (two
and three bedroom) under development. Of the Exchange Properties, 21
properties are located in Florida, three properties in Ohio and one
property each in Georgia and Indiana.
Operations for the Quarter Ended March 31, 2000 Compared to Quarter
Ended March 31, 1999 and Consolidated Balance Sheets as of March 31,
2000 Compared to December 31, 1999
Total Assets for the Trust at March 31, 2000 were $7,243,151,
representing a 1% decrease in Total Assets of $ 93,047 compared to
December 31, 1999. The decrease was principally due to depreciation
and reductions in other assets. Total Liabilities for the Trust at
March 31, 2000 were $ 5,739,407, representing a 1% decrease in Total
Liabilities of $ 66,479 compared to December 31, 1999. This decrease
resulted principally from reductions of accounts payable.
Shareholders' Equity for the Trust at March 31, 2000 was $1,503,744,
representing a 2% decrease in Shareholders' Equity of $26,568 compared
to December 31, 1999. The decrease was principally due to the first
quarter 2000 net loss of $256,482.
Revenues for the Trust in the quarter ended March 31, 2000 were
$255,368, representing a 1% decrease in Revenues of $3,783 compared to
the quarter ended March 31, 1999. Real Estate Expenses for the
properties owned by the Trust in the quarter ended March 31, 2000 were
$213,263, representing a 4% increase in Real Estate Expenses of $8,541
compared to the quarter ended March 31, 1999. The increase in Revenues
and Real Estate Expenses was principally due to increased repairs and
maintenance. Administrative Expenses in the quarter ended March 31,
2000 were $298,587, representing a 41% decrease in Administrative
Expenses of $210,480 compared to the quarter ended March 31, 1999. The
decrease in Administrative Expenses was principally due to reduced
personnel costs and other office expenses.
Liquidity and Capital Resources
Net Cash Used by Operating Activities in the quarter ended March 31,
2000 was $114,851 representing a 77% decrease in Net Cash Used by
Operating Activities of $392,733 compared to the quarter ended March
31, 1999. The decrease in Net Cash Used by Operating Activities was
principally due to the reduction in net loss for the quarter. Net Cash
Used in Investing Activities in the quarter ended March 31, 2000 was
$31,491, representing a 96% decrease in Net Cash Used by Investing
Activities of $676,275 compared to the quarter ended March 31, 1999.
The decrease in Net Cash Used by Investing Activities was principally
due to investments made in the Alexandria Apartments during the first
quarter of 1999 which were not repeated in the first quarter of 2000.
Cash Flow from Financing Activities in the quarter ended March 31,
2000 was $163,007, representing a 84% decrease in Cash Flow from
5
<PAGE>
Financing Activities of $885,305 compared to the quarter ended March
31, 1999. The decrease in Cash Flow from Financing Activities was
principally due to reduced sales of common shares in the Trust's Cash
Offering.
The Trust plans to continue raising equity in its Cash Offering under
its current prospectus dated June 11, 1999, as it may be amended or
supplemented, through May 31, 2000. The net cash proceeds from the
issuance of Common Shares in connection with the offering have been,
and the net cash proceeds of any subsequent issuance of Common Shares
will be, contributed by the Trust to the Operating Partnership in
exchange for an equivalent number of Units in the Operating
Partnership. The Trust is the sole general partner of the Operating
Partnership and, as of May 12, 2000, owned 699,076 Operating
Partnership Units, representing approximately 37% of the then
outstanding Units.
The Operating Partnership will use the future net cash proceeds of the
Cash Offering, unissued units of limited partnership interest in the
Operating Partnership or a combination of net cash proceeds and
unissued units to acquire interests in residential apartment
properties or interests in other partnerships substantially all of
whose assets consist of residential apartment property interests, and
payment of applicable fees and expenses.
Because of the net losses of $3,166,927 and $1,577,060 in 1999 and
1998, respectively; the $975,305 in accounts payable owed to
professionals in connection with the Exchange Offering as of December
31, 1999, and the limited liquid resources as of December 31, 1999,
the Company's independent auditors included an explanatory paragraph
in their auditors' report to reflect a going concern contingency. The
completion in April 2000 of the Exchange Offering described above has,
in the opinion of management, provided the critical mass necessary for
profitable operations. The Company is negotiating with the firms who
are owed accounts payable, and expects to receive extended payment
terms and possible reductions of the amounts due. Distributions will
be made by the Trust as cash flow allows, but will be negatively
impacted as the open accounts payable are reduced.
The Trust and the Operating Partnership intend to continue to acquire
similar property interests using proceeds from the Trust's Cash
Offering, securities of the Trust and the Operating Partnership,
including Common Shares and Units, and available operating cash flow
and financing from other sources.
The operating results of the Trust and the Operating Partnership will
depend primarily upon income from the residential apartment properties
in which they directly or indirectly own or acquire an equity or
subordinated mortgage interest. Operating results in respect of equity
interests will be substantially influenced by the demand for and
supply of residential apartment units in their primary market and
sub-markets, and operating expense levels. Operating results in
respect of mortgage and other debt interests will depend upon interest
income, including, in certain cases, participation
6
<PAGE>
interest, whose payment will depend upon the operating performance,
sale or refinancing of the underlying properties. The operating
results of the Trust and the Operating Partnership will also depend
upon the pace and price at which they can acquire and improve
additional property interests.
The target metropolitan markets and sub-markets have benefited in
recent periods from demographic trends (including population and job
growth) which increase the demand for residential apartment units,
while financing constraints (specifically, reduced availability of
development capital) have limited new construction to levels
significantly below construction activity in prior years.
Consequently, rental rates for residential apartment units have
increased at or above the inflation rate for the last two years and
are expected to continue to experience such increases for the next 18
months based on market statistics made available to management of the
Trust in terms of occupancy rates, supply, demographic factors, job
growth rates and recent rental trends. Expense levels also influence
operating results, and rental expenses (other than real estate taxes)
for residential apartment properties have generally increased at
approximately the rate of inflation for the past three years and are
expected to increase at the rate of inflation for the next 18 months.
Changes in interest rates are not expected to materially impact
operations, because the majority of the real estate mortgages have
fixed interest rates, as do all of the inter-company loans.
The Trust believes that known trends, events or uncertainties which
will or are reasonably likely to affect the short-term and long-term
liquidity and current and future prospects of the Trust and the
Operating Partnership include the performance of the economy and the
building of new apartment communities. Although the Trust cannot
reliably predict the effects of these trends, events and uncertainties
on the property investments of the Trust and the Operating Partnership
as a whole, some of the reasonably anticipated effects might include
downward pressure on rental rates and occupancy levels.
Generally, there are no seasonal aspects of the operations of the
Trust or the Operating Partnership which might have a material effect
on their financial conditions or results of operation. However, for
the last 36 months, one 60-unit student housing property owned by one
of the Exchange Partnerships involved in the Exchange Offering has had
an average occupancy rate of 88% for nine months of the year and 61%
for the remaining three months of the year.
Subject to the foregoing discussion, management believes that the
Trust and the Operating Partnership have the ability to satisfy their
cash requirements for the foreseeable future. However, the Trust will
continue the Cash Offering through May 31, 2000, subject to extension,
and it will also be necessary to raise additional capital during the
12-month period following the completion of the Cash Offering to make
acquisitions and to meet management's revenue and cash flow goals. The
Trust and the Operating Partnership intend to investigate making an
additional public or private
7
<PAGE>
offering of Common Shares and/or Units within the 12-month period
following the completion of the Cash Offering.
The Trust and the Operating Partnership expect no material change in
the number of employees over the next 12 months.
Year 2000
The computer systems of the Trust and the Operating Partnership have
been tested for year 2000 problems and the Trust and the Operating
Partnership believe that such systems are year 2000 compatible. The
Trust and the Operating Partnership have not experienced any material
year 2000 problems so far in 2000. It is possible, however, that the
computer systems of the Trust and the Operating Partnership and
certain computer systems or software products of their suppliers could
experience year 2000 problems and that such problems could adversely
affect them. With respect to their own computer systems, the Trust and
the Operating Partnership have upgraded their principal operating
computer software to the most recent available revision sold by their
software supplier, which the supplier has represented to be year 2000
compliant. The Trust and the Operating Partnership believe that such
upgrade will solve any year 2000 problems that could affect their
operating software. The failure to identify and solve all year 2000
problems affecting their business could have an adverse effect on the
business, financial condition and results of operations of the Trust
and the Operating Partnership.
8
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Registrant is a claimant in the Georgia Pacific class action
lawsuit. It is not a party to any other legal proceeding.
Item 2. Changes in Securities and Use of Proceeds
The Registrant's Form SB-2 Registration Statement (the "Registration
Statement") (Commission file number 333-35063) was declared effective
by the Commission on May 15, 1998. On May 18, 1998, the Registrant
commenced its public offering (the "Offering") of common shares of
beneficial interest in the Registrant ("Common Shares"), the class of
securities registered. On June 2, 1999, the Registrant filed
Post-Effective Amendment No. 1 (the "Amendment") to the Registration
Statement, which the Commission declared effective on June 11, 1999.
The Registrant's Offering is currently ongoing and is scheduled to
terminate on May 31, 2000.
The name of the managing underwriter of the Offering is Sigma
Financial Corporation. The amount of Common Shares registered is
2,500,000 shares. The offering price per Common Share is $10.00, and
the aggregate price of the offering amount registered is $25,000,000.
As of the date of this Report, 699,076 Common Shares have been sold in
the Offering, for an aggregate offering price of $6,990,763.
From the effective date of the Registration Statement through March
31, 2000, the following expenses have been incurred for the
Registrant's account in connection with the issuance and distribution
of the registered Common Shares:
<TABLE>
<CAPTION>
<S> <C>
Underwriting discounts and commissions: $ 555,325 (plus five-year warrants to
acquire 59,241 Common Shares at an
exercise price of $13.00 per share)
Finder's Fees: $0
Expenses Paid to or for Underwriter: $0
Other Expenses (reimbursement for advisory
and investment expenses): $ 416,158
Total Expenses: $ 971,483
</TABLE>
Of such expense payments, $ 416,158 were made directly to Baron
Advisors, Inc., the Managing Shareholder of the Registrant. The
remaining payments of $555,325 were made directly or indirectly to
others. The net offering proceeds to the Registrant after deducting
the foregoing total expenses were $ 5,969,744.
9
<PAGE>
From the effective date of the Registration Statement through March
31, 2000, the net offering proceeds to the Registrant were used for
the following purposes:
Improvements to buildings and facilities: $0
Purchase and installation of equipment: $0
Repayment of indebtedness: $0
Working capital: $ 569,204
Temporary investments: $0
Investment in Baron Capital Properties, L.P. (the
Operating Partnership) $ 5,400,540
Other purposes for which 5% or more of net
offering proceeds or $100,000 (whichever is less)
have been used: $0
Of such net proceeds, $ 5,400,540 was directly contributed to the
Operating Partnership in exchange for Units of limited partnership
interest therein. The Operating Partnership will conduct all of the
real estate operations of the Registrant and hold all of its real
property assets.
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 27--Financial Data Schedule.
(b) The Registrant did not file any Current Reports on Form 8-K
during the quarter for which this Report is filed.
10
<PAGE>
In accordance with the requirements of the Exchange Act, the Registrant
caused this Report to be signed on its behalf by the undersigned, thereunto duly
authorized.
May 19, 2000
BARON CAPITAL TRUST
By: /s/ Gregory K. McGrath
------------------------------
Gregory K. McGrath
Chief Executive Officer
By: /s/ Mark L. Wilson
------------------------------
Mark L. Wilson
Chief Financial Officer
11
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial information extracted from Baron
Capital Trust's financial statements for the three months ended March 31, 2000
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 131,225
<SECURITIES> 0
<RECEIVABLES> 39,008
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 170,233
<PP&E> 7,504,843
<DEPRECIATION> (1,488,141)
<TOTAL-ASSETS> 7,243,151
<CURRENT-LIABILITIES> 1,381,558
<BONDS> 4,357,849
0
0
<COMMON> 6,846,720
<OTHER-SE> (5,342,976)
<TOTAL-LIABILITY-AND-EQUITY> 7,243,151
<SALES> 0
<TOTAL-REVENUES> 255,368
<CGS> 0
<TOTAL-COSTS> 213,263
<OTHER-EXPENSES> 298,587
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (256,482)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (256,482)
<EPS-BASIC> (.37)
<EPS-DILUTED> (.37)
</TABLE>
