<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported) July 2, 1999
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N'TANDEM TRUST
--------------
(Exact Name of Registrant as Specified in Charter)
CALIFORNIA 0-21470 33-610944499
- -------------------------------------------------------------------------
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
6160 SOUTH SYRACUSE WAY, GREENWOOD VILLAGE, COLORADO 80111
- -------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (303) 741-3707
--------------
<PAGE>
Item 2: Acquisition or Disposition of Assets
------------------------------------
On July 2, 1999, N'Tandem Trust, a California business trust (the
"Trust"), through its limited partnership subsidiary, N'Tandem Properties, L.P.,
acquired Longview Mobile Home Community, a manufactured home community
containing 93 homesites located in Albuquerque, New Mexico (the "Acquired
Property"), from Longview Investors LLC, a New Mexico limited liability company,
and Michael J. Voris pursuant to a Real Property Purchase Agreement. The terms
of the Real Property Purchase Agreement were determined through arms-length
negotiations between the seller and Chateau Communities, Inc. ("Chateau"), a
publicly-held real estate investment trust which currently holds 9.8% of the
Trust's outstanding common shares of beneficial interest. Pursuant to the Real
Property Purchase Agreement, N'Tandem Properties, L.P. was assigned Chateau's
right to purchase the Acquired Property.
The purchase price for the Acquired Property was $1,800,000, of which
$1,767,300 was borrowed from Chateau pursuant to a note entered into between
Chateau and the Trust and the remainder of the purchase price was paid in cash.
The note bears interest at 1% per annum above the prime rate established by Bank
One, N.A.
In determining the purchase price paid for the Acquired Property, the
purchaser considered, among other things, the historical and expected cash flow
from the Acquired Property, the nature of the occupancy trends and terms of the
leases in place, current operating costs and taxes, the physical condition of
the Acquired Property, the potential to increase its cash flow and other
factors. The Trust also considered the capitalization rates of recently sold
manufactured home communities in the same geographic area as the Acquired
Property. No independent appraisals were performed in connection with the
acquisition of the Acquired Property.
In its Current Report on Form 8-K, dated May 20, 1999, the Trust
announced the acquisition of the Southpointe Village manufactured home
community. In addition to the financial statements for the Acquired Property,
set forth below are certain financial statements relating to Southpointe Village
and pro forma financial information for the Trust.
Item 7: Financial Statements, Pro Forma Financial Information and
---------------------------------------------------------
Exhibits
--------
(a) Financial Statements:
Historical Summary of Revenues and Direct Operating Expenses for
Southpointe Village Manufactured Home Community for the year
ended December 31, 1998 (Audited) and three months ended March
31, 1999 (Unaudited).
Historical Summary of Revenues and Direct Operating Expenses for
Longview Mobile Home Community for the year ended December 31,
1998 (Audited) and three months ended March 31, 1999
(Unaudited).
(b) Pro Forma Financial Information:
Pro Forma Condensed Statements of Operations of the Trust for
the three months ended March 31, 1999 and for the year ended
December 31, 1998 (Unaudited).
Pro Forma Condensed Balance Sheet of the Trust as of March 31,
1999 (Unaudited).
(c) Exhibits
None
2
<PAGE>
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: July 15, 1999 N'TANDEM TRUST
By: /s/ Gary P. McDaniel
--------------------
Gary P. McDaniel
Trustee
3
<PAGE>
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 Southpointe Village
Manufactured Home Community (the "Property") for the year ended December 31,
1998. The Historical Summary is the responsibility of the Property's
management. 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
accounting principles used and significant estimates made by management, 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 the 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 as described in
Note 2 of the Property for the year ended December 31, 1998, in conformity with
generally accepted accounting principles.
PricewaterhouseCoopers LLP
Denver, Colorado
July 9, 1999
4
<PAGE>
SOUTHPOINTE VILLAGE MANUFACTURED HOME COMMUNITY
HISTORICAL SUMMARY OF REVENUES AND
DIRECT OPERATING EXPENSES
_______
For the Three Months For the Year Ended
Ended March 31, 1999 December 31,1998
-------------------- ------------------
(Unaudited)
Revenues:
Rental and utilities $254,900 $941,100
Other 2,600 10,400
-------- --------
257,500 951,500
-------- --------
Direct Operating Expenses:
On-site operating 37,100 150,300
Real estate taxes 8,900 35,600
Utilities 43,700 125,100
-------- --------
89,700 311,000
-------- --------
Revenues in excess of direct operating expenses $167,800 $640,500
======== ========
The accompanying notes are an integral part of this financial statement.
5
<PAGE>
SOUTHPOINTE VILLAGE 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 Southpointe Village Manufactured Home Community. The
property is located in the state of New Mexico. The property was acquired
by N'Tandem Trust in May 1999 and includes 282 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.
INTERIM UNAUDITED FINANCIAL INFORMATION
The accompanying interim unaudited Historical Summary of Revenues and Direct
Operating Expenses has been prepared pursuant to the rules and regulations
of the Securities and Exchange Commission and was prepared on the same basis
as the Historical Summary of Revenues and Direct Operating Expenses for the
year ended December 31, 1998. In the opinion of management, all material
adjustments, consisting only of normal recurring adjustments, necessary for
a fair presentation of the information for this interim period have been
made. The excess of revenues over direct operating expenses for such
interim period is not necessarily indicative of the excess of revenues over
direct operating expenses for the full year.
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.
6
<PAGE>
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 Longview Mobile Home Community
(the "Property") for the year ended December 31, 1998. The Historical Summary
is the responsibility of the Property's management. 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
accounting principles used and significant estimates made by management, 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 the 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 as described in
Note 2 of the Property for the year ended December 31, 1998, in conformity with
generally accepted accounting principles.
PricewaterhouseCoopers LLP
Denver, Colorado
July 9, 1999
7
<PAGE>
LONGVIEW MOBILE HOME COMMUNITY
HISTORICAL SUMMARY OF REVENUES
AND DIRECT OPERATING EXPENSES
_______
For the Three Months For the Year Ended
Ended March 31, 1999 December 31, 1998
-------------------- ------------------
(Unaudited)
Revenues:
Rental and utilities $73,300 $277,000
Other 1,400 4,500
------- --------
74,700 281,500
------- --------
Direct Operating Expenses:
On-site operating 6,900 47,800
Utilities 19,600 61,600
Real estate taxes 600 2,500
------- --------
27,100 111,900
------- --------
Revenues in excess of direct operating expenses $47,600 $169,600
======= ========
The accompanying notes are an integral part of this financial statement.
8
<PAGE>
LONGVIEW 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 Longview Mobile Home Community. The property is located
in the state of New Mexico. The property was acquired by N'Tandem Trust in
July 1999 and includes 93 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.
INTERIM UNAUDITED FINANCIAL INFORMATION
The accompanying interim unaudited Historical Summary of Revenues and
Direct Operating Expenses has been prepared pursuant to the rules and
regulations of the Securities and Exchange Commission and was prepared on
the same basis as the Historical Summary of Revenues and Direct Operating
Expenses for the year ended December 31, 1998. In the opinion of
management, all material adjustments, consisting only of normal recurring
adjustments, necessary for a fair presentation of the information for this
interim period have been made. The excess of revenues over direct operating
expenses for such interim period is not necessarily indicative of the
excess of revenues over direct operating expenses for the full year.
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.
9
<PAGE>
N' TANDEM TRUST
Pro Forma Condensed Statements of Operations
For the three months ended March 31, 1999 and the year ended December 31, 1998
The following unaudited pro forma condensed statements of operations have been
presented as if the acquisitions of the Southpointe Village and Longview
communities and the related financing had been completed as of January 1, 1998.
The unaudited pro forma condensed statements of operations and related notes
should be read in conjunction with N' Tandem Trust's ("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, 1998 nor does it
represent the results of operations of the Trust for future periods.
10
<PAGE>
N'TANDEM TRUST
Pro Forma Condensed Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended March 31,1999
----------------------------------------
N'Tandem Southpointe Longview Pro Forma N'Tandem
Historical Acquisition Acquisition Adjustments Pro Forma
---------- ----------- ----------- ----------- ---------
(Note 1) (Note 2) (Note 2) (Note 3)
Revenues:
<S> <C> <C> <C> <C> <C>
Rent and utilities $ 734,600 $254,900 $73,300 $1,062,800
Equity losses on joint
ventures and limited
partnerships (8,300) (8,300)
Interest 100 100
Other 38,200 2,600 1,400 42,200
---------------------------------------------------------------------------------------------
764,600 257,500 74,700 1,096,800
---------------------------------------------------------------------------------------------
Expenses:
Property operating 396,900 89,700 27,100 $ 22,200 c 535,900
Interest 301,500 170,900 a 472,400
Depreciation 159,200 88,600 b 247,800
Advisory fee 49,100 49,100
General and administrative:
Related parties 7,900 7,900
Other 13,100 13,100
---------------------------------------------------------------------------------------------
927,700 89,700 27,100 281,700 1,326,200
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
Net income (loss) $(163,100) $167,800 $47,600 $(281,700) $ (229,400)
=============================================================================================
Preferred dividends paid (36,800) (36,800)
Net income (loss) attributable ---------------------------------------------------------------------------------------------
to common shares $(199,900) $167,800 $47,600 $(281,700) $ (266,200)
=============================================================================================
Basic and diluted loss per
common share $(1.83) $(2.44)
================ ===================
Dividends per common share $0.38 $0.38
================ ===================
</TABLE>
The accompanying notes are an integral part of the pro forma condensed financial
statements.
11
<PAGE>
N'TANDEM TRUST
Pro Forma Condensed Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
For the Year Ended December 31, 1998
------------------------------------
N'Tandem Southpointe Longview Pro Forma N'Tandem
Historical Acquisition Acquisition Adjustments Pro Forma
---------- ----------- ----------- ----------- ---------
(Note 1) (Note 2) (Note 2) (Note 3)
Revenues:
<S> <C> <C> <C> <C> <C>
Rent and utilities $1,703,300 $941,100 $277,000 $2,921,400
Equity losses on joint
ventures and limited
partnerships (27,800) (27,800)
Interest 1,500 1,500
Other 22,900 10,400 4,500 37,800
--------------------------------------------------------------------------------------------
1,699,900 951,500 281,500 2,932,900
--------------------------------------------------------------------------------------------
Expenses:
Property operating 822,700 311,000 111,900 $ 84,200 c 1,329,800
Interest 652,000 683,600 a 1,335,600
Depreciation 349,300 354,300 b 703,600
Advisory fee 147,100 147,100
General and administrative:
Related parties 28,800 28,800
Other 64,000 64,000
--------------------------------------------------------------------------------------------
2,063,900 311,000 111,900 1,122,100 3,608,900
--------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
Net income (loss) $ (364,000) $640,500 $169,600 $(1,122,100) $ (676,000)
============================================================================================
Preferred dividends paid (147,100) (147,100)
--------------------------------------------------------------------------------------------
Net income (loss) attributable to
common shares $ (511,100) $640,500 $169,600 $(1,122,100) $ (823,100)
============================================================================================
Basic and diluted loss per
common share $(4.88) $(7.86)
================== ===================
Dividends per common share $1.50 $1.50
================== ===================
</TABLE>
The accompanying notes are an integral part of the pro forma condensed financial
statements.
12
<PAGE>
N'TANDEM TRUST
Pro Forma Condensed Balance Sheet
As of March 31, 1999
The following unaudited pro forma condensed balance sheet has been presented as
if the acquisition of the Southpointe and Longview communities and the related
financing had been completed on March 31, 1999. 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 March 31, 1999 nor does it represent the future
financial position of the Trust.
13
<PAGE>
N'TANDEM TRUST
Pro Forma Condensed Balance Sheet
(Unaudited)
<TABLE>
<CAPTION>
As of March 31, 1999
--------------------
Southpointe &
N'Tandem Longview N'Tandem
Historical Acquisitions Pro Forma
-----------------------------------------------------------------
ASSETS (Note 1) (Note 4)
Property held for investment:
<S> <C> <C> <C>
Land $ 4,737,800 $1,158,800 $ 5,896,600
Buildings and improvements 12,707,900 7,085,800 19,793,700
Fixtures and equipment 74,600 74,600
-----------------------------------------------------------------
17,520,300 8,244,600 25,764,900
Less accumulated depreciation (1,173,200) (1,173,200)
-----------------------------------------------------------------
16,347,100 8,244,600 24,591,700
Investments in joint ventures and limited 795,900 795,900
partnerships
Cash and cash equivalents 151,600 (75,000) 76,600
Deferred financing costs, net 39,100 39,100
Other assets 473,400 6,100 479,500
-----------------------------------------------------------------
Total Assets $17,807,100 $8,175,700 $25,982,800
=================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Mortgage note payable $ 2,050,000 $ 2,050,000
Note payable to affiliate 10,651,500 $7,812,100 18,463,600
Accrued expenses 888,100 59,400 947,500
Tenant deposits and other liabilities 1,020,400 64,200 1,084,600
Due to Advisor and affiliates 824,600 240,000 1,064,600
-----------------------------------------------------------------
Total Liabilities 15,434,600 8,175,700 23,610,300
Shareholders' equity:
Preferred shares of beneficial interest, $.01
par value;
500,000,000 shares authorized; 98,073 shares
issued and outstanding 2,121,700 2,121,700
Common shares of beneficial interest, $.01 par
value, 100,000,000 shares authorized; 109,308 shares
issued and outstanding 2,401,400 2,401,400
Dividends in excess of accumulated earnings (2,150,600) (2,150,600)
-----------------------------------------------------------------
2,372,500 2,372,500
-----------------------------------------------------------------
Total Liabilities and Shareholders' Equity $17,807,100 $8,175,700 $25,982,800
=================================================================
</TABLE>
The accompanying notes are an integral part of the pro forma condensed financial
statements.
14
<PAGE>
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 three months ended March 31, 1999 and the year ended December 31, 1998,
respectively.
2. ACQUISITIONS - STATEMENTS OF OPERATIONS
The revenues and expenses of the Southpointe and Longview acquisitions
included in the Trust's condensed pro forma financial statements for the
three months ended March 31, 1999 and the year ended December 31, 1998
reflect the historical summary of revenues and direct operating expenses.
3. PRO FORMA ADJUSTMENTS - STATEMENTS OF OPERATIONS
The pro forma adjustments for the pro forma condensed statements of
operations are as follows:
<TABLE>
<CAPTION>
Three Months
Ended Year Ended
March 31, December 31,
1999 1998
----------- ------------
<S> <C> <C>
a. Interest on $7,812,100 of indebtedness payable to Chateau
Communities, Inc., incurred at a weighted average rate of 8.75%
for the period beginning January 1, 1998 $170,900 $683,600
b. Depreciation of acquired properties based on an
average 20 year life $ 88,600 $354,300
c. Adjustment for related party management fees,
calculated as 5% of gross rental revenues and an
annual overhead reimbursement of $60 per site
pursuant to the asset management agreement with
Chateau Communities, Inc. $ 22,200 $ 84,200
</TABLE>
4. ACQUISITIONS - BALANCE SHEET
Amounts presented reflect the acquisition of the Southpointe Village and
Longview communities. The acquisitions were financed through related party
debt of $7,812,100 and cash of $75,000. As part of the acquisition, an
acquisition fee of $240,000 is due to N'Tandem's advisor and was capitalized
as part of the purchase price as of March 31, 1999.
15
