10-Q 1 realmarkiv_10q-030.txt QUARTERLY REPORT FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 2001 Commission File Number: 0-14386 REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP IV -------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 16-1245153 ----------------------- --------------------------------- (State of organization) (IRS Employer Identification No.) 2350 North Forest Road, Suite 12A,Getzville, New York 14068 ----------------------------------------------------------- (Address of principal executive offices) (716) 636-0280 -------------- (Registrant's telephone number) Indicate by a check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Part I - FINANCIAL INFORMATION ------------------------------ Item 1. Financial Statements

Notes to Financial Statements June 30, 2001 and 2000 Organization ------------ Realmark Property Investors Limited Partnership - IV (the Partnership), a Delaware limited partnership, was formed on February 12, 1985, to invest in a diversified portfolio of income producing real estate investments. The general partners are Realmark Properties, Inc. (the corporate general partner) and Joseph M. Jayson (the individual general partner). Joseph M. Jayson is the sole stockholder of J.M. Jayson & Company Inc. Realmark Properties, Inc. is a wholly-owned subsidiary of J.M. Jayson & Company, Inc. Under the partnership agreement, the general partners and their affiliates can receive compensation for services rendered and reimbursement for expenses incurred on behalf of the Partnership. Basis of Presentation --------------------- The accompanying interim financial statements have been prepared in accordance with generally accepted accounting principles and, in the opinion of management, contain all necessary adjustments for a fair presentation, on a going concern basis. The Partnership has sustained recurring losses from operations and has experienced operating cash flow difficulties. While efforts to improve operating results continue, the plan to sell the Partnership's remaining property also continues. The financial statements do not include any adjustments that might result from the outcome of the sale and the subsequent dissolution of the Partnership. The Partnership's significant accounting policies are set forth in its December 31, 2000 Form 10-K. The interim financial statements should be read in conjunction with the financial statements included therein. The interim results should not be considered indicative of the annual results. Certain reclassifications of prior period numbers may have been made to conform to the current period presentation. 3 Property and Equipment ---------------------- Since 1998, the Partnership's only property, the Andover Park apartment complex, has been actively marketed for sale. At June 30, 2001, the property is the subject of a contingent $5,200,000 sales agreement that, if closed, will result in a gain in the range of $2.2 to $2.4 million and net proceeds of approximately $1 million, which will not be sufficient to satisfy all of the Partnership's liabilities. Depreciation expense not recorded in each of the 2001 and 2000 three and six month periods was approximately $44,000 and $88,000. Contingency ----------- The Partnership, as a nominal defendant, the General Partners of the Partnership and the officers and directors of the Corporate General Partner, as defendants, were served with a Summons and Complaint on April 7, 2000 in a class and derivative lawsuit instituted by Ira Gaines and on August 8, 2000 in a class and derivative lawsuit instituted by Sean O'Reilly and Louise Homburger, each in Supreme Court, County of Erie, State of New York. In September 2000, the Court signed an order consolidating these lawsuits. The consolidated lawsuit alleges claims of mismanagement and improper use of partnership funds relating to the Realmark Partnerships. The consolidated lawsuit seeks declaratory relief, unspecified damages, a receiver, an order liquidating the partnership, punitive damages, attorneys' fees and related relief. The defendants deny any liability and intend to vigorously defend this lawsuit. Because of the early stage of this lawsuit and because there has been no discovery to date, legal counsel cannot render an opinion as to the likely outcome of this case. The possible effect of this contingency is not presently determinable and, therefore, the consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Current Accounting Pronouncements --------------------------------- Statements of Financial Accounting Standards Nos. 138 and 133, which concern accounting for derivative instruments and hedging activities, became effective for the Partnership on January 1, 2001 and did not have any effect on the Partnership's financial statements. PART I - Item 2. Management's Discussion and Analysis of Financial Condition ----------------------------------------------------------- and Results of Operations ------------------------- Liquidity and Capital Resources ------------------------------- The Partnership continues to incur losses and operating cash flow deficits and relies on its corporate general partner and its affiliates to cover cash shortages. It is unlikely that the net proceeds from the eventual sale of the Andover Park property will be sufficient to repay the entire amount of advances from affiliates and, therefore, no distributions to partners are anticipated. During 1999, the Partnership sold Woodbridge Manor Apartments for $6,400,000. The sale resulted in a $1,131,370 gain for financial statement purposes. In the first quarter of 2000, a portion of the sale proceeds was used to reduce the Partnership's liability to affiliated parties. Results of Operations --------------------- For the three and six months ended June 30, 2001, the Partnership's operations, which exclude depreciation charges, resulted in net losses of $38,000 and $127,000, respectively, as compared to net losses before depreciation in the same 2000 periods of $121,000 and $210,000. The principal reason for the improvement was lower property operating costs that were $55,000 less than the 2000 second quarter and $52,000 less for the half year. Administrative expenses were lower in the 2001 periods, primarily because of decreases in fees and taxes. Interest expense on the debt payable to affiliates increased in the second quarter as the amount of that debt grew. The decrease in mortgage loan interest in the quarter and half year is primarily due to completion of the amortization of deferred mortgage acquisition costs in 2000. 4 During most of the first half and second quarter of 2001, occupancy at Andover Park continued at a relatively low rate of approximately 80%, the occupancy rate at December 31, 2000. Toward the end of the second quarter the rate rose. Therefore, rental income decreased compared to rental income in the 2000 periods when occupancy was higher at approximately 88%. Other income was constant in the 2001 quarter, but was lower in the six months ended June 30, 2001 because in the 2000 period, interest income was earned on the temporary investment of the net proceeds from the Woodbridge Manor sale. No such funds were available for investment in 2001. PART I - Item 3. Quantitative and Qualitative Disclosures About Market Risk ---------------------------------------------------------- The Partnership's cash equivalents are short-term, interest-bearing bank accounts and its mortgage loan is fixed-rate. It has not entered into any derivative contracts. Therefore, it has no market risk exposure. 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, thereunto duly authorized. REALMARK PROPERTY INVESTORS LIMITED PARTNERHIP IV August 14, 2001 /s/ Joseph M. Jayson --------------- -------------------- Date Joseph M. Jayson, Individual General Partner and Principal Financial Officer 5

REALMARK PROPERTY INVESTORS LTD PARTNERSHIP-IV 10-Q