SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
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HOST FUNDING, INC.
(Name of Subject Company)
Shares of Class A Common Stock
(Title of Class of Securities)
441072-10-5
(CUSIP Number)
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C.E. Patterson
MacKenzie Patterson Inc.
1640 School Street, Suite 100
Moraga, California 94556
(510) 631-9100
(Name, Address and Telephone Number
of Person Authorized to Receive
Notices and Communications)
December 22, 1999
(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [ ]. (A fee is
not required only if reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
SCHEDULE 13D
CUSIP NO. None
1. Name of Reporting Persons
CHARLES EVANS PATTERSON
MACKENZIE PATTERSON , INC.
MP VALUE FUND 5, LLC
ACCELERATED HIGH YIELD PENSION INVESTORS, LTD.
ACCELERATED HIGH YIELD INCOME FUND II, LTD
ACCELERATED HIGH YIELD INCOME FUND, LTD
2. Check the Appropriate Box if a Member of a Group
(See Instructions)
(a) [ X ]
(b) [ ]
3. SEC Use Only
4. Sources of Funds (See Instructions)
Person Source of Funds
CHARLES EVANS PATTERSON PF
MACKENZIE PATTERSON , INC. WC/AF
MP VALUE FUND 5, LLC WC
ACCELERATED HIGH YIELD PENSION INVESTORS, LTD. WC
ACCELERATED HIGH YIELD INCOME FUND II, LTD WC
ACCELERATED HIGH YIELD INCOME FUND, LTD WC
5. Check if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e) [ ]
6. Citizenship or Place of Organization:
Person Place of Organization
CHARLES EVANS PATTERSON U.S.
MACKENZIE PATTERSON , INC. CA
MP VALUE FUND 5, LLC CA
ACCELERATED HIGH YIELD PENSION INVESTORS, LTD. FLA
ACCELERATED HIGH YIELD INCOME FUND II, LTD FLA
ACCELERATED HIGH YIELD INCOME FUND, LTD FLA
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7. Number of Shares Beneficially Owned by Each Reporting Person With
Sole Voting Power:*
CHARLES EVANS PATTERSON 15,500
MACKENZIE PATTERSON , INC. 500,000
MP VALUE FUND 5, LLC 75,355
ACCELERATED HIGH YIELD PENSION INVESTORS, LTD. 5,583
ACCELERATED HIGH YIELD INCOME FUND II, LTD 20,000
ACCELERATED HIGH YIELD INCOME FUND, LTD 5,400
8. Shared Voting Power:*
CHARLES EVANS PATTERSON 15,500
MACKENZIE PATTERSON , INC. 500,000
MP VALUE FUND 5, LLC 75,355
ACCELERATED HIGH YIELD PENSION INVESTORS, LTD. 5,583
ACCELERATED HIGH YIELD INCOME FUND II, LTD 20,000
ACCELERATED HIGH YIELD INCOME FUND, LTD 5,400
9. Sole Dispositive Power*
CHARLES EVANS PATTERSON 15,500
MACKENZIE PATTERSON , INC. 500,000
MP VALUE FUND 5, LLC 75,355
ACCELERATED HIGH YIELD PENSION INVESTORS, LTD. 5,583
ACCELERATED HIGH YIELD INCOME FUND II, LTD 20,000
ACCELERATED HIGH YIELD INCOME FUND, LTD 5,400
10. Shared Dispositive Power*
CHARLES EVANS PATTERSON 15,500
MACKENZIE PATTERSON , INC. 500,000
MP VALUE FUND 5, LLC 75,355
ACCELERATED HIGH YIELD PENSION INVESTORS, LTD. 5,583
ACCELERATED HIGH YIELD INCOME FUND II, LTD 20,000
ACCELERATED HIGH YIELD INCOME FUND, LTD 5,400
* Voting and dispositive power are exercised on behalf of MP VALUE
FUND 5, LLC; ACCELERATED HIGH YIELD PENSION INVESTORS, LTD.;
ACCELERATED HIGH YIELD INCOME FUND II, LTD; and ACCELERATED HIGH
YIELD INCOME FUND, LTD by MacKenzie Patterson, Inc., the general
partner or manager of each such entity. C.E. Patterson is a
controlling person of MacKenzie Patterson, Inc.
11. Aggregate Amount Beneficially owned by Each Reporting Person:
CHARLES EVANS PATTERSON 15,500
MACKENZIE PATTERSON , INC. 500,000
MP VALUE FUND 5, LLC 75,355
ACCELERATED HIGH YIELD PENSION INVESTORS, LTD. 5,583
ACCELERATED HIGH YIELD INCOME FUND II, LTD 20,000
ACCELERATED HIGH YIELD INCOME FUND, LTD 5,400
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These amounts and the corresponding percentages set forth in Row
(13) below are based on shares which may be deemed to be
beneficially owned by each reporting person, including 500,000
shares issuable to MPI upon exercise of certain warrants described
in the Schedule. However, such persons by their affiliations may be
deemed to beneficially own an aggregate of 621,838 shares, which is
the total of all shares beneficially owned by all the reporting
persons.
12. Check if the Aggregate Amount of Row (11) Excludes Certain Shares
(See Instructions): [ ]
13. Percent of Class Represented by Amount in Row (11):
CHARLES EVANS PATTERSON 0.7%
MACKENZIE PATTERSON , INC. 22.5%
MP VALUE FUND 5, LLC 3.4%
ACCELERATED HIGH YIELD PENSION INVESTORS, LTD. 0.3%
ACCELERATED HIGH YIELD INCOME FUND II, LTD 0.9%
ACCELERATED HIGH YIELD INCOME FUND, LTD 0.2%
14. Type of Reporting Person (See Instructions):
Person Category
CHARLES EVANS PATTERSON IN
MACKENZIE PATTERSON , INC. CO
MP VALUE FUND 5, LLC OO
ACCELERATED HIGH YIELD PENSION INVESTORS, LTD. PN
ACCELERATED HIGH YIELD INCOME FUND II, LTD PN
ACCELERATED HIGH YIELD INCOME FUND, LTD PN
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Item 1. Security and Issuer.
This Schedule relates to shares of the Class A Common Stock (the
"Shares")of HOST FUNDING, INC., a Maryland corporation (the "Issuer"), the
subject company. The address of the Issuer's principal executive offices is 6116
N. Central Expressway, Suite 1313, Dallas, Texas 75206.
Item 2. Identity and Background.
(a)-(c) The persons filing this statement (collectively the
"Reporting Persons") are CHARLES EVANS PATTERSON ("Patterson"); MACKENZIE
PATTERSON, INC. ("MPI"); MP VALUE FUND 5, LLC ("MPV5"); ACCELERATED HIGH YIELD
PENSION INVESTORS, LTD. ("AHYPI"); ACCELERATED HIGH YIELD INCOME FUND II, LTD
("AHYIF2"); and ACCELERATED HIGH YIELD INCOME FUND, LTD. ("AHYIF"). MPV5, AHYPI,
AHYIF2, and AHYIFare sometimes collectively referred to herein as the "Funds"
and sometimes individually as a "Fund." Patterson, MPI and the Funds may be
deemed to beneficially own an aggregate of 621,838 Shares, including 121,838
outstanding Shares and warrants to purchase 500,000 Shares (in the aggregate
representing approximately 36% of the outstanding Shares or approximately 28% of
the outstanding Shares plus Shares issuable upon exercise of warrants). In
addition, MPI has acquired 500,000 of the Issuer's newly issued Series "A"
Preferred shares, each convertible into a Share on or after December 31, 2002.
MPI is the general partner or manager of each of the Funds. The
principal business of each of the Funds is to acquire and hold for investment
interests in real estate based limited partnerships, real estate investments
trusts or other real estate based investment entities which have invested
substantially all of their capital in real property, real estate ventures or
other real property based investments. The principal business address for each
of the filing persons is 1640 School Street, Suite 100, Moraga, California
94556.
MacKenzie Patterson, Inc.
MPI is a California corporation which engages, both directly and through its
affiliates, in the business of real estate investment, and the management and
administration of real estate investment portfolios.
C.E. Patterson is President and a director of MPI. He is the co-founder and
President of Patterson Financial Services, Inc., a registered investment
adviser. In 1981, Mr. Patterson founded PFS with his wife, Berniece A.
Patterson, as a financial planning firm. Mr. Patterson founded Patterson Real
Estate Services, a licensed California Real Estate Broker, in 1982. As President
of PFS, Mr. Patterson is responsible for all investment counseling activities.
He supervises the analysis of investment opportunities for the clients of the
firm. He is a trustee of Consolidated Capital Properties Trust, a liquidating
trust formed out of the bankruptcy court proceedings involving Consolidated
Capital Properties, Ltd. Mr. Patterson is also an officer and controlling
shareholder of Cal-Kan, Inc., an executive officer and controlling shareholder
of Moraga Partners, Inc., and trustee of the Pat Patterson Western Securities,
Inc. Profit Sharing Plan. Mr. Patterson, through his affiliates, manages a
number of investment and real estate partnerships. Mr. Patterson also holds a
10% equity interest in Sutter Opportunity Fund, LLC, owner of 233,238 Shares.
Berniece A. Patterson is a director of MPI. In 1981, Ms. Patterson and C.E.
Patterson established Patterson Financial Services, Inc. She serves as Chair of
the Board and Vice President of PFS. Her responsibilities with PFS include
oversight of administrative matters and monitoring of past projects underwritten
by PFS. Ms. Patterson is Chief Executive Officer of an affiliate, Pioneer Health
Care Services, Inc., and is responsible for the day-to-day operations of three
nursing homes and over 300 employees.
Christine Simpson is vice president of MPI and is responsible for the
day-to-day management of research, and securities purchases and sales on behalf
of the entities managed by MPI. Ms. Simpson has been employed by MPI. since
1990.
Glen W. Fuller is assistant vice president and a director of MPI. Mr. Fuller
joined MPI in 1998 and is responsible for, among other matters, new product
development. Prior to joining MPI, he was a registered options principal and
registered municipal securities principal at Morgan Fuller Capital Group, a
broker dealer in San Francisco, California.
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Mr. Fuller is the son of Berniece Patterson. Mrs. Patterson is also the
mother of the wife of Robert E. Dixon, a director of the Issuer and beneficial
owner of approximately 11.5% of the outstanding Shares.
During the last five years, none of the Funds, or, to the best
knowledge of the Funds, neither MacKenzie L.P. nor MPI (i) has been convicted in
a criminal proceeding (excluding traffic violations or similar misdemeanors), or
(ii) was a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
(d)-(e) During the last five years, to the best knowledge of the
Funds, none of the executive officers, directors or shareholders of MPI or any
of the Funds (i) has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors), or (ii) was a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction and as a result
of such proceeding was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with respect to
such laws.
(f) The citizenship pr state of organization of each of the filing
persons is set forth in item 6 of the cover page of this schedule. Each of the
executive officers, directors and shareholders of MPI is a United States
citizen.
Item 3. Source and Amounts of Funds or Other Consideration.
MPVF5 acquired a total of 30,000 Shares in February 1999 in an open
market transaction for a price of $2 5/8 per Share. The balance of 76,338 Shares
held by the Funds were acquired at a price of $3 per Share pursuant to a tender
offered completed April 4, 1999, which transaction was reported in the final
amendment to their Schedule 14D-1 filed as of that date. The purchase prices for
the Shares purchased by each Fund were paid from their respective working
capital.
Patterson acquired 15,500 Shares in September, 1999 at a price of
$21/2per Share. The purchase price was paid out of Patterson's personal funds.
On December 22, 1999, the Issuer sold to MPI 500,000 shares of the
Issuer's newly issued Series "A" Convertible Preferred Stock, $0.01 par value
per share (the Series "A" Preferred"), for a purchase price of $3.00 per share.
By purchasing the Series "A" Preferred Stock, MPI increased ownership of the
outstanding voting stock of the Issuer by MPI and certain of its affiliates from
approximately 7% to approximately 36.2%. MPI paid the Issuer $1,500,000 in cash
for the shares of Series "A" Preferred. The Issuer also issued to MPI warrants
to purchase 500,000 Shares for an exercise price of $3.00 per share, exercisable
at any time for a period of six years from the date of issuance (the
"Warrants"). Concurrently with the purchase of the shares of Series "A"
Preferred and the issuance of the Warrants, the Issuer and MPI entered into an
Advisory Agreement dated effective as of January 1, 2000 pursuant to which MPI
will assume the day-to-day operations of the Issuer and direct new investments.
MPI financed the transaction partially out of its working capital and partially
out of the proceeds of an unsecured demand loan from Cal Kan, Inc., a
corporation formed to make real estate and other investments owned 50% by C.E.
Patterson and 50% by Thomas A. Frame. Cal Kan, Inc. provided such funds from its
working capital.
Item 4. Purpose of Transaction.
The Funds and Patterson acquired the Shares for investment
purposes.
In conjunction with the purchase by MPI of the Series "A" Preferred
and Warrants from the Issuer, the Issuer and MPI agreed to certain management
and operating changes. Effective as of December 21, 1999, Michael S. McNulty
resigned as a director of the Issuer and was replaced by Mr. Glen W. Fuller, an
officer and director of MPI. Effective as of December 31, 1999, Mr. McNulty also
resigned as the President and Chief Executive Officer of the Issuer and was
replaced by Patterson. Pursuant to the terms of the Series "A" Preferred, MPI,
as the holder of all of the outstanding shares of the Series "A" Preferred, is
entitled to elect two (2) of the five (5) directors of the Issuer at each annual
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<PAGE>
meeting of the stockholders, and holders of the Series "A" Preferred
otherwise vote with the Shares on all matters subject to shareholder action.
In addition, the Issuer and MPI entered into an Advisory Agreement
(the "Advisory Agreement") to be effective as of January 1, 2000. Pursuant to
the terms and conditions of the Advisory Agreement, the Issuer engaged MPI as
the external advisor of the Issuer. Under the Advisory Agreement, the Issuer
appointed MPI as the Issuer's exclusive agent to supervise the day-to-day
operations of the Issuer, including, overseeing the current lessees of the
Issuer's existing hotel properties, serving as the Issuer's advisor and
consultant in connection with the administrative, policy and investment
decisions made by the Board of Directors of the Issuer, and performing or
supervising the various administrative and accounting functions necessary for
the management of the Issuer. The Issuer will pay MPI an advisory fee of
$350,000 per year for the advisory and administrative services provided to MPI
under the Advisory Agreement. In order to implement the responsibilities of MPI
under the Advisory Agreement, the Issuer's principal offices will be relocated
to Moraga, California.
Item 5. Interest in Securities of the Issuer.
(a) As of the date hereof, each of the Reporting Persons holds the
number of Shares set forth on the cover page of this schedule, with MPI deemed
to own beneficially the 500,000 authorized but unissued Shares issuable upon
exercise of the Warrants. The percentages reflected on the cover page also
represent the percentages based on the assumed issuance of the Shares subject to
the Warrants. Each Reporting Person by his or its affiliations may be deemed to
beneficially own an aggregate of 621,838 Shares, which is the total of all
Shares beneficially owned by all the Reporting Persons.
(b) Voting and dispositive power are exercised on behalf of the
Funds by MacKenzie Patterson, Inc., the general partner or manager of each such
entity. C.E. Patterson is a controlling person of MacKenzie Patterson, Inc.
(c) See the discussion under Items 3 and 4 above.
(d) Not applicable. However, the shareholders, limited partners or
members of each Fund and MPI have an interest in the assets of such entities,
and thus an indirect interest in the Shares.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
See the discussion under Item 3 above.
Item 7. Material to be Filed as Exhibits.
Stock Purchase Agreement dated effective as of December 21, 1999 by
and between Host Funding, Inc. and MacKenzie Patterson, Inc. (filed
as Exhibit 2.1 to the Current Report on Form 8-K filed by the
Issuer on January 6, 2000, and incorporated herein by this
reference)
Advisory Agreement dated effective as of January 1, 2000 by and
between Host Funding, Inc. and MacKenzie Patterson, Inc. (filed as
Exhibit 2.2 to the Current Report on Form 8-K filed by the Issuer
on January 6, 2000, and incorporated herein by this reference)
Articles Supplementary filed with the State Department of
Assessments and Taxation of the State of Maryland on December 20,
1999 (filed as Exhibit 2.3 o the Current Report on Form 8-K filed
by the Issuer on January 6, 2000, and incorporated herein by this
reference)
Warrant Agreement dated effective as of December 21, 1999 by and
between Host Funding, Inc. and MacKenzie Patterson, Inc. (filed as
Exhibit 2.4 to the Current Report on Form 8-K filed by the Issuer
on January 6, 2000, and incorporated herein by this reference)
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Registration Rights Agreement dated effective as of December 21,
1999 by and between Host Funding, Inc. and MacKenzie Patterson,
Inc. (filed as Exhibit 2.5 to the Current Report on Form 8-K filed
by the Issuer on January 6, 2000, and incorporated herein by this
reference)
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After reasonable inquiry and to the best of our knowledge and
belief, we certify that the information set forth in this statement is true,
complete and correct.
Dated: January 7, 2000
/s/ C.E. Patterson
Charles Evans Patterson
MACKENZIE PATTERSON , INC.
By: /s/ C.E. Patterson
C. E. Patterson, President
MP VALUE FUND 5, LLC
By MACKENZIE PATTERSON , INC., Manager
By: /s/ C.E. Patterson
C. E. Patterson, President
ACCELERATED HIGH YIELD PENSION INVESTORS, LTD.
By MACKENZIE PATTERSON , INC., General Partner
By: /s/ C.E. Patterson
C. E. Patterson, President
ACCELERATED HIGH YIELD INCOME FUND II, LTD
By MACKENZIE PATTERSON , INC., General Partner
By: /s/ C.E. Patterson
C. E. Patterson, President
ACCELERATED HIGH YIELD INCOME FUND, LTD
By MACKENZIE PATTERSON , INC., General Partner
By: /s/ C.E. Patterson
C. E. Patterson, President
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