SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
FORM 8-K/A
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) November 30, 1998
N'TANDEM TRUST
(Exact Name of Registrant as Specified in Charter)
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CALIFORNIA 0-21470 33-610944499
(State of Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
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6430 SOUTH QUEBEC STREET, ENGLEWOOD, COLORADO 80111
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (303) 741-3707
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In its Current Report on Form 8-K filed on December 14, 1998, N'Tandem
Trust ("N'Tandem" or the "Trust") announced the acquisition of three
manufactured home communities, the Suburban Manufactured Home Community, the
Southern Mobile Home Community and the Lexington Manufactured Home Community.
Set forth below are certain financial statements relating to the acquired mobile
home communities and pro forma financial information for the Trust.
Item 7: Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements:
The Audited Historical Summary of Revenues and Direct
Operating Expenses for Lexington Manufactured Home Community
and Suburban Manufactured Home Community for the year ended
December 31, 1997.
The Audited Historical Summary of Revenues and Direct
Operating Expenses for Southern Mobile Home Community for the
year ended December 31, 1997.
(b) Pro Forma Financial Information:
Pro Forma Condensed Statements of Operations of the Trust for
the nine months ended September 30, 1998 and for the year
ended December 31, 1997 (Unaudited).
Pro Forma Condensed Balance Sheet of the Trust as of September 30, 1998
(Unaudited).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: April 30, 1999 N'TANDEM TRUST
By: /s/ Gary P. McDaniel
Gary P. McDaniel
Trustee
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REPORT OF INDEPENDENT ACCOUNTANTS
Board of Trustees
N'Tandem Trust
We have audited the accompanying Historical Summary of Revenues and Direct
Operating Expenses (the "Historical Summary") of Lexington Estates and Suburban
Estates (the "Properties") for the year ended December 31, 1997. The Historical
Summary is the responsibility of the Properties' owners. Our responsibility is
to express an opinion on the Historical Summary based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the Historical Summary is free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the Historical Summary. An audit also includes assessing the
basis of accounting used and significant estimates made by the owners, as well
as evaluating the overall presentation of the Historical Summary. We believe
that our audit provides a reasonable basis for our opinion.
The accompanying Historical Summary was prepared for the purpose of complying
with rules and regulations of the Securities and Exchange Commission, as
described in Note 2, and is not intended to be a complete presentation of the
Properties' revenues and expenses.
In our opinion, the Historical Summary referred to above presents fairly, in all
material respects, the revenues and direct operating expenses described in Note
2 of the Properties for the year ended December 31, 1997, in conformity with
generally accepted accounting principles.
PricewaterhouseCoopers LLP
Denver, Colorado
February 8, 1999
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LEXINGTON MANUFACTURED HOME COMMUNITY AND SUBURBAN MANUFACTURED HOME COMMUNITY
HISTORICAL SUMMARY OF REVENUES AND
DIRECT OPERATING EXPENSES
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For the Year Ended
December 31,1997
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Revenues:
Rental and utilities $657,351
Other 22,338
679,689
Direct Operating Expenses:
On-site operating 42,593
Real estate taxes 23,204
Utilities 85,794
Repairs and maintenance 74,032
Other 67,342
----------
292,965
Revenues in excess of direct operating expenses $386,724
========
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The accompanying notes are an integral part of this financial statement.
4
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LEXINGTON MANUFACTURED HOME COMMUNITY AND SUBURBAN MANUFACTURED HOME COMMUNITY
NOTES TO HISTORICAL SUMMARY OF REVENUES
AND DIRECT OPERATING EXPENSES
-------
1. BUSINESS:
The Historical Summary of Revenues and Direct Operating Expenses includes
the operations of Lexington Estates and Suburban Estates. The properties
are located in the state of Maryland. These properties were acquired by
N'Tandem Trust in December 1998. Lexington Estates and Suburban Estates
include a combined total of 211 sites.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
BASIS OF PRESENTATION
The accounts of Lexington Estates and Suburban Estates are combined in
the statement of revenues and direct operating expenses. The financial
statement is not representative of the actual operations for the year
presented as certain expenses that may not be comparable to the expenses
expected to be incurred in the future operations of the acquired
properties have been excluded in accordance with Rule 3-14 of Regulation
S-X of the Securities and Exchange Commission. Expenses excluded consist
of interest, depreciation, amortization, and other costs not directly
related to the future operations of the properties.
REVENUE RECOGNITION
Rental income attributable to residential leases is recorded when due
from tenants.
ESTIMATES
The preparation of the financial statement requires management to make
estimates and assumptions. Actual results could differ from the
estimates included in the financial statement.
3. RELATED PARTY:
Certain owners and members of the management of Pascal-Turner LTD., the
manager of Lexington Estates and Suburban Estates, also had ownership
interests in Lexington Estates and Suburban Estates or had loaned money
to those entities prior to the acquisition by N'Tandem. An affiliate of
one of the owners of Pascal-Turner LTD. also had an outstanding loan at
December 31, 1997. Pursuant to a management agreement with N'Tandem,
Pascal-Turner LTD. will receive 5% of gross rental revenues as a
management fee for services to be performed for Lexington Estates,
Suburban Estates, and Southern Mobile Home Park.
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REPORT OF INDEPENDENT ACCOUNTANTS
Board of Trustees
N'Tandem Trust
We have audited the accompanying Historical Summary of Revenues and Direct
Operating Expenses (the "Historical Summary") of Southern Mobile Home Community
(the "Property") for the year ended December 31, 1997. The Historical Summary is
the responsibility of the Property's owners. Our responsibility is to express an
opinion on the Historical Summary based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the Historical Summary is free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the Historical Summary. An audit also includes assessing the
basis of accounting used and significant estimates made by the owners, as well
as evaluating the overall presentation of the Historical Summary. We believe
that our audit provides a reasonable basis for our opinion.
The accompanying Historical Summary was prepared for the purpose of complying
with rules and regulations of the Securities and Exchange Commission, as
described in Note 2, and is not intended to be a complete presentation of the
Property's revenues and expenses.
In our opinion, the Historical Summary referred to above presents fairly, in all
material respects, the revenues and direct operating expenses described in Note
2 of the Property for the year ended December 31, 1997, in conformity with
generally accepted accounting principles.
PricewaterhouseCoopers LLP
Denver, Colorado
February 8, 1999
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SOUTHERN MOBILE HOME COMMUNITY
HISTORICAL SUMMARY OF REVENUES
AND DIRECT OPERATING EXPENSES
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For the Year Ended
December 31, 1997
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Revenues:
Rental and utilities $431,957
Other 12,304
444,261
Direct Operating Expenses:
On-site operating 39,833
Utilities 97,141
Real estate taxes 27,713
Repairs and maintenance 33,584
Other 38,907
--------
237,178
Revenues in excess of direct operating expenses $207,083
========
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The accompanying notes are an integral part of this financial statement.
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SOUTHERN MOBILE HOME COMMUNITY
NOTES TO HISTORICAL SUMMARY OF REVENUES
AND DIRECT OPERATING EXPENSES
-------
1. BUSINESS:
The Historical Summary of Revenues and Direct Operating Expenses includes
the operations of Southern Mobile Home Park. The property is located in
the state of Maryland. The property was acquired by N'Tandem Trust in
November 1998. Southern Mobile Home Park includes 201 sites.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
BASIS OF PRESENTATION
The financial statement is not representative of the actual operations
for the year presented as certain expenses that may not be comparable to
the expenses expected to be incurred in the future operations of the
acquired property have been excluded in accordance with Rule 3-14 of
Regulation S-X of the Securities and Exchange Commission. Expenses
excluded consist of interest, depreciation, amortization, and other
costs not directly related to the future operations of the property.
REVENUE RECOGNITION
Rental income attributable to residential leases is recorded when due
from tenants.
ESTIMATES
The preparation of the financial statement requires management to make
estimates and assumptions. Actual results could differ from the
estimates included in the financial statement.
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N' TANDEM TRUST
Pro Forma Condensed Statements of Operations
For the nine months ended September 30, 1998 and the year ended December 31,1997
The following unaudited pro forma condensed statements of operations
have been presented as if the acquisitions of the Suburban and Southern
portfolios and the related financing had been completed as of January 1,
1997. The unaudited pro forma condensed statements of operations and
related notes should be read in conjunction with N' Tandem Trust's,
formerly known as Windsor Real Estate Investment Trust 8, ("N'Tandem" or
the "Trust") audited financial statements that are included in the
Trust's Annual Report on Form 10-KSB as filed with the Securities and
Exchange Commission (the "Commission"). The unaudited pro forma
condensed statements of operations are not necessarily indicative of
what actual results of operations of the Trust would have been had the
acquisitions occurred on January 1, 1997 nor does it represent the
results of operations of the Trust for future periods.
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N'Tandem Trust
Pro Forma Condensed Statement of Operations
(Unaudited)
For the Nine Months Ended September 30,1998
N'Tandem Suburban Southern Pro Forma N'Tandem
Historical Acquisition Acquisition Adjustments Pro Forma
(Note 1) (Note 2) (Note 2) (Note 3)
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Revenues:
Rent and utilities $1,146,000 $511,971 $321,619 $1,979,590
Equity losses on joint
venturesand limited partnerships (22,100) (22,100)
Interest 1,400 1,400
Other 14,814 9,296 37,410
13,300
------------------ ----------------- --------------- -------------------- ------------
1,138,600 526,785 330,915 1,996,300
------------------ ----------------- --------------- -------------------- ------------
Expenses:
Property operating 552,700 220,490 191,188 $ 50,016 d, e 1,014,394
Interest 387,000 359,300 a 746,300
Depreciation 259,900 208,000 b 467,900
Advisory fee 102,900 45,750 c 148,650
General and administrative:
Related parties 19,000 19,000
Other 48,200 48,200
------------------ ----------------- --------------- -------------------- ------------
1,369,700 220,490 191,188 663,066 2,444,444
------------------ ----------------- --------------- -------------------- ------------
================== ================= =============== ==================== ============
Net income (loss) $ (231,100) $306,295 $139,727 $(663,066) $ (448,144)
================== ================= =============== ==================== ============
Preferred dividends paid (110,400) (110,400)
================== ================= =============== ==================== ============
Net income (loss) attributed to
common shares $ (341,500) $306,295 $139,727 $(663,066) $ (558,544)
================== ================= =============== ==================== ============
Basic and diluted loss per
common share $ (3.31) $ (5.41)
================== ============
Dividends per common share $ 0.93 $ 0.93
================== ============
The accompanying notes are an integral part of the pro forma condensed financial statements.
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N'Tandem Trust
Pro Forma Condensed Statement of Operations
(Unaudited)
For the Year Ended December 31, 1997
N'Tandem Suburban Southern Pro Forma N'Tandem
Historical Acquisition Acquisition Adjustments Pro Forma
(Note 1) (Note 2) (Note 2) (Note 3) (Note 3)
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Revenues:
Rent and utilities $956,100 $657,351 $431,957 $2,045,408
Equity losses on joint ventures
and limited partnerships (30,600) (30,600)
Interest
5,000 5,000
Other 22,338 12,304
11,700 46,342
------------------ ----------------- --------------- ------------------- -------------
942,200 679,689 444,261 2,066,150
------------------ ----------------- --------------- ------------------- -------------
Expenses:
Property operating 456,800 292,965 237,178 $ 65,358 d, e 1,052,301
Interest 227,700 479,100 a 706,800
Depreciation 163,100 277,300 b 440,400
Advisory fee 54,500 61,000 c 115,500
General and administrative:
Related parties 29,800
29,800
Other 32,700
32,700
------------------ ----------------- --------------- ------------------- -------------
964,600 292,965 237,178 882,758 2,377,501
------------------ ----------------- --------------- ------------------- -------------
================== ================= =============== =================== =============
Net income (loss)
$ (22,400) $386,724 $207,083 $ (882,758) $(311,351)
================== ================= =============== =================== =============
Preferred dividends paid (147,100) (147,100)
================== ================= =============== =================== =============
Net income (loss) attributed to
common shares $(169,500) $386,724 $207,083 $ (882,758) $(458,451)
================== ================= =============== =================== =============
Basic and diluted loss per
common share $ (1.88) $ (5.08)
================== =============
Dividends per common share $ 1.50 $1.50
================== =============
The accompanying notes are an integral part of the pro forma condensed financialstatements.
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N' TANDEM TRUST
Pro Forma Condensed Balance Sheet
as of September 30, 1998
The following unaudited pro forma condensed balance has been presented as if
the acquisition of the Suburban Portfolio and the Southern Portfolio and the
related financing had been completed on September 30, 1998. The unaudited pro
forma condensed balance sheet should be read in conjunction with the Trust's
Annual Report on Form 10-KSB as filed with the Securities and Exchange
Commission. The unaudited pro forma condensed balance sheet is not necessarily
indicative of what the actual financial position of the Trust would have been
had the acquisitions occurred on September 30, 1998 nor does it represent the
future financial position of the Trust.
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N'Tandem Trust
Pro Forma Condensed Balance Sheet
(Unaudited)
As of September 30, 1998
N'Tandem Suburban &
Historical September Southern N'Tandem
30, 1998 Acquisitions Pro
Forma
------------------------ ------------------ ---------------
ASSETS (Note 1) (Note 4)
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Property held for investment:
Land $3,501,300 $1,236,000 $ 4,737,300
Buildings and improvements 6,869,000 5,547,000 12,416,000
Fixtures and equipment 70,300 70,300
------------------------ ------------------ ---------------
10,440,600 6,783,000 17,223,600
Less accumulated depreciation (924,600) (924,600)
------------------------ ------------------ ---------------
9,516,000 6,783,000 16,299,000
Investments in joint ventures and limited partnerships 816,400 816,400
Cash and cash equivalents 95,300 95,300
Deferred financing costs, net 45,100 45,100
Other assets 317,400 317,400
======================== ================== ===============
Total Assets $10,790,200 $ 6,783,000 $17,573,200
======================== ================== ===============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Debt $7,051,500 $5,475,000 $12,526,500
Accounts payable 15,300 15,300
Accrued expenses 442,700 442,700
Tenant deposits and other liabilities 44,100 850,000 894,100
Due to Advisor and affiliates 408,400 458,000 866,400
------------------ ---------------
------------------------
Total Liabilities 7,962,000 6,783,000 14,745,000
Shareholders' equity:
Preferred shares of beneficial interest, no par value;
unlimited shares authorized; 98,073 shares issued
and outstanding 2,121,700 2,121,700
Common shares of beneficial interest, no par value,
unlimited shares authorized; 109,308 shares issued
and outstanding 2,401,400 2,401,400
Cumulative net loss (296,100) (296,100)
Cumulative distributions (1,398,800) (1,398,800)
------------------------
2,828,200 2,828,200
======================== ================== ===============
Total Liabilities and Shareholders' Equity $10,790,200 $6,783,000 $ 17,573,200
======================== ================== ===============
The accompanying notes are an integral part of the pro forma condensed balance sheet.
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N'Tandem Trust
Notes to CONDENSED Pro Forma FINANCIAL statements
1. HISTORICAL FINANCIAL STATEMENTS:
The historical financial statements, which are included in the Trust's
Quarterly Report on Form 10-QSB and its Annual Report on Form 10-KSB as
filed with the Commission, include the accounts of the Trust as of and
for the nine months ended September 30, 1998 and the year ended December
31, 1997, respectively.
2. ACQUISITIONS - STATEMENTS OF OPERATIONS
The revenues and expenses of the Suburban and Southern acquisitions
included in the Trust's condensed pro forma financial statements for the
nine months ended September 30, 1998 and the year ended December 31, 1997
reflect historical results for the two communities in the Suburban
portfolio and the one community in the Southern portfolio for the period
beginning January 1, 1997.
3. PRO FORMA ADJUSTMENTS - STATEMENTS OF OPERATIONS
The pro forma adjustments for the pro forma condensed statements of
operations are as follows:
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Nine Months Ended
September 30, 1998 Year Ended
December 31, 1997
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a. Interest on $5,475,000 of mortgage indebtedness payable to Chateau
Communities, Inc., incurred at a weighted average rate of 8.75% for
the period beginning January 1, 1997
$359,300 $479,100
b. Depreciation of acquired properties based on an
average 20 year life $208,000 $277,300
c. An advisory fee representing 1% of the total purchase price of
$6,100,000 payable to the Trust's advisor pursuant to the N'
Tandem
advisory agreement $ 45,750 $61,000
d. Adjustment for related party management fees, calculated as 1%
of gross rental revenues pursuant to the asset management
agreement with Chateau
Communities, Inc. $8,336 $10,893
e. Adjustment for management fees to a non-affiliated management
company, Pascal-Turner LTD.,
calculated as 5% of gross rental revenues pursuant to the
management contract. $41,680 $54,465
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4. ACQUISITIONS - BALANCE SHEET
Amounts presented reflect the acquisition of two communities in the
Suburban portfolio, occurring on December 2, 1998. The acquisition was
financed through related party debt of $3,500,000, $500,000 in deferred
acquisition payments and cash of $250,000. On November 30, 1998 the Trust
acquired the Southern community through related party debt of $1,975,000,
$350,000 in deferred acquisition payments and cash of $25,000. The
$275,000 cash payments for the Suburban portfolio and the Southern
community were financed through short-term borrowings from N'Tandem's
Advisor and are reflected in the "Due to Advisor and affiliates" portion
of the pro forma balance sheet as of September 30, 1998. As part of the
acquisition, an acquisition fee of $183,000 was due to N'Tandem's Advisor
and was capitalized as part of the purchase price as of September 30,
1998.
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