UNITED STATES 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):
June 17, 2003
Golf Trust of America, Inc.
(Exact name of registrant as specified in its charter)
| Maryland (State or Other Jurisdiction of Incorporation) |
000-22091 (Commission File Number) |
33-0724736 (I.R.S. Employer Identification Number) |
14 North Adger's Wharf, Charleston, SC 29401
(Address of principal executive offices) (Zip Code)
(843) 723-4653
(Registrant's telephone number, including area code)
not
applicable
(Former name or former address, if changed since last report.)
Item 2. Disposition of Assets.
On June 17, 2003, GTA and its operating partnership, Golf Trust of America, L.P. (collectively, the "Company"), consummated the sale of the Company's wholly-owned subsidiary, Sandpiper—Golf Trust, LLC, to Sandpiper BB Property, LLC for a purchase price of $25.0 million, plus routine operating prorations, which was paid in cash at the closing. Sandpiper-Golf Trust, LLC owns the Sandpiper Golf Course, an 18-hole golf course located near Santa Barbara, California.
A copy of the press release announcing the sale of Sandpiper—Golf Trust, LLC is being filed herewith as Exhibit 99.1.
Item 5. Other Events and Required FD Disclosure.
The Company received net proceeds of approximately $25,147,000 from the above-mentioned sale, of which $25,052,000 was used to make a principal payment and $95,000 was used to pay accrued interest and lender legal fees under the Company's credit facility with its lender. With this payment, all remaining obligations under the credit facility were paid in full and the Company's debt was retired on June 19, 2003.
The Company's repayment in full of its credit facility satisfied the conditions necessary for the payment of the milestones under the employment agreements of each of W. Bradley Blair, II and Scott D. Peters, both of whom are executive officers and directors of the Company. On June 19, 2003, the Company paid the first of two milestone payments payable to each of Messrs. Blair and Peters, in the amounts of $1,815,523 and $972,453, respectively, including interest (which, under the employment agreements, accrues on the milestone amounts from the date of stockholder approval of the Plan of Liquidation until the date of payment). The Company intends to pay the final milestone payments to each of Messrs. Blair and Peters, in the amounts of $1,233,907 and $660,921, respectively, plus accrued interest, in due course.
A copy of the press release announcing the payoff of our credit agreement is being filed herewith as Exhibit 99.2.
2
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
Not applicable.
Pro forma financial information is included herein pursuant to Article 11 of Regulation S-X.
The following exhibits are filed with this current report on Form 8-K and are numbered in accordance with Item 601 of Regulation S-K.
| Exhibit No. |
Description |
|
|---|---|---|
| 99.1 | Press Release issued by our company on June 18, 2003 announcing the sale of Sandpiper — Golf Trust, LLC. | |
99.2 |
Press Release issued by our company on June 20, 2003 announcing the retirement of our credit agreement. |
|
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GOLF TRUST OF AMERICA, INC.
INTRODUCTION TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The accompanying unaudited pro forma condensed consolidated statement of net assets as of March 31, 2003 (Liquidation Basis) gives effect to sale of Sandpiper—Golf Trust, LLC, as described in Item 2, as if it had occurred on March 31, 2003.
The accompanying unaudited pro forma condensed consolidated statement of changes in net assets (liquidation basis) for the three months ended March 31, 2003 and for the year ended December 31, 2002 gives effect to the sale of Sandpiper—Golf Trust, LLC, as described in Item 2, as if it had occurred on January 1, 2002.
The unaudited pro forma condensed consolidated financial statements are subject to a number of estimates, assumptions and other uncertainties, and do not purport to be indicative of the actual financial position or results of operations or changes in net assets that would have occurred had the transaction reflected therein in fact occurred on the dates specified, nor do such financial statements purport to be indicative of the results of operations or financial condition that may be achieved in the future. These unaudited pro forma condensed consolidated financial statements should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and all of the financial statements and notes thereto contained in the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2003, and the Company's Annual Report on Form 10-K for the year ended December 31, 2002.
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GOLF TRUST OF AMERICA, INC.
UNAUDITED PRO-FORMA CONDENSED CONSOLIDATED
STATEMENT OF NET ASSETS (LIQUIDATION BASIS)
AS OF MARCH 31, 2003
(in thousands)
| |
Historical |
Adjustments |
|
Pro forma |
||||||
|---|---|---|---|---|---|---|---|---|---|---|
| ASSETS | ||||||||||
| Real estate and mortgage note receivable—held for sale | $ | 101,807 | $ | (24,953) | (1) | $ | 76,854 | |||
| Cash and cash equivalents | 6,806 | 25,000 | (1) | 6,806 | ||||||
| 245 | (1) | |||||||||
| (98) | (1) | |||||||||
| (25,052) | (2) | |||||||||
| (95) | (3) | |||||||||
| Restricted cash | 1,554 | 1,554 | ||||||||
| Receivables—net | 4,514 | (95) | (4) | 4,419 | ||||||
| Other assets | 508 | (214) | (4) | 294 | ||||||
| Total assets | 115,189 | (25,262) | 89,927 | |||||||
LIABILITIES |
||||||||||
| Debt | 29,564 | (25,052) | (2) | 4,512 | ||||||
| Accounts payable and other liabilities | 4,161 | (115) | (4) | 3,951 | ||||||
| (95) | (3) | |||||||||
| Dividends payable | 3,238 | 3,238 | ||||||||
| Reserve for estimated costs during the period of liquidation | 10,701 | 10,701 | ||||||||
| Total liabilities | 47,664 | (25,262) | 22,402 | |||||||
| Commitments and contingencies | ||||||||||
| Preferred stock, $.01 par value, 10,000,000 shares authorized, 800,000 shares issued and outstanding | 20,000 | 20,000 | ||||||||
| Total liabilities and preferred stock | 67,664 | (25,262) | 42,402 | |||||||
| NET ASSETS IN LIQUIDATION (available to holders of common stock and OP units) | $ | 47,525 | $ | — | $ | 47,402 | ||||
See accompanying introduction and notes to the unaudited pro forma condensed consolidated financial statements.
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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF CHANGES IN NET ASSETS
FOR THE THREE MONTHS ENDED MARCH 31, 2003 (LIQUIDATION BASIS)
(in thousands)
| |
Historical |
Adjustments |
|
Pro forma |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenues | |||||||||||||
| Rent | $ | 452 | $ | — | $ | 452 | |||||||
| Revenue from managed golf course operations | 2,434 | (885 | ) | (1 | ) | 1,549 | |||||||
| Total revenues | 2,886 | (885 | ) | 2,001 | |||||||||
Expenses: |
|||||||||||||
| General & administrative | 731 | — | 731 | ||||||||||
| Direct expenses from managed golf course operations | 2,305 | (561 | ) | (2 | ) | 1,744 | |||||||
| Total expenses | 3,036 | (561 | ) | 2,475 | |||||||||
| Operating loss | (150 | ) | (324 | ) | (474 | ) | |||||||
Other income (expense): |
|||||||||||||
| Interest income | 56 | — | 56 | ||||||||||
| Interest expense | (821 | ) | 455 | (3 | ) | (366 | ) | ||||||
| Total other income (expense) | (765 | ) | 455 | (310 | ) | ||||||||
| Net (loss) income | (915 | ) | 131 | (784 | ) | ||||||||
| Preferred dividends | (463 | ) | — | (463 | ) | ||||||||
Net change in net assets available to holders of common stock and OP units |
$ |
(1,378 |
) |
$ |
131 |
$ |
(1,247 |
) |
|||||
See accompanying introduction and notes to the unaudited pro forma condensed consolidated financial statements.
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GOLF TRUST OF AMERICA, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF
CHANGES IN NET ASSETS FOR THE YEAR ENDED DECEMBER 31, 2002
(LIQUIDATION BASIS)
(in thousands)
| |
Historical |
Adjustments |
|
Pro forma |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenues | |||||||||||||
| Rent | $ | 7,069 | $ | — | $ | 7,069 | |||||||
| Revenue from managed golf course operations | 13,360 | (2,514 | ) | (4 | ) | 10,846 | |||||||
| Total revenues | 20,429 | (2,514 | ) | 17,915 | |||||||||
Expenses: |
|||||||||||||
| General & administrative | 3,632 | — | 3,632 | ||||||||||
| Direct expenses from managed golf course operations | 12,861 | (1,355 | ) | (5 | ) | 11,506 | |||||||
| Total expenses | 16,493 | (1,355 | ) | 15,138 | |||||||||
| Operating income (loss) | 3,936 | (1,159 | ) | 2,777 | |||||||||
Other income (expense): |
|||||||||||||
| Interest income | 441 | — | 441 | ||||||||||
| Interest expense | (5,379 | ) | 1,634 | (6 | ) | (3,745 | ) | ||||||
| Total other income (expense) | (4,938 | ) | 1,634 | (3,304 | ) | ||||||||
| Income (loss) before adjustment for liquidation basis | (1,002 | ) | 475 | (527 | ) | ||||||||
| Adjustment for Liquidation Basis of Accounting | (8,557 | ) | — | (8,557 | ) | ||||||||
| Net (loss) income | (9,559 | ) | 475 | (9,084 | ) | ||||||||
| Dividends and distributions: | |||||||||||||
| Preferred dividends | (1,850 | ) | — | (1,850 | ) | ||||||||
| Value of OP units redeemed in sale of golf courses | (627 | ) | — | (627 | ) | ||||||||
| Total dividends and distributions | (2,477 | ) | — | (2,477 | ) | ||||||||
Net change in net assets available to holders of common stock and OP units |
$ |
(12,036 |
) |
$ |
475 |
$ |
(11,561 |
) |
|||||
See accompanying introduction and notes to the unaudited pro forma condensed consolidated financial statements.
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GOLF TRUST OF AMERICA, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Please refer to the Introduction on page 4.
Reflects the net cash proceeds of $25,000,000 received from the completed transaction.
Reflects the net cash proceeds paid to us by the buyer for normal operating prorations of approximately $147,000.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS FOR THE YEAR ENDED DECEMBER 31, 2002 (LIQUIDATION BASIS)
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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.
| GOLF TRUST OF AMERICA, INC. (Registrant) |
|||||
Date: June 30, 2003 |
By: |
/s/ W. BRADLEY BLAIR, II W. Bradley Blair, II President and Chief Executive Officer |
|||
Date: June 30, 2003 |
By: |
/s/ SCOTT D. PETERS Scott D. Peters Senior Vice President and Chief Financial Officer |
|||
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EXHIBIT INDEX
Pursuant to Item 601(a)(2) of Regulation S-K, this exhibit index immediately precedes the exhibits.
| Exhibit No. |
Description |
|
|---|---|---|
| 99.1 | Press Release issued by our company on June 18, 2003 announcing the sale of Sandpiper-Golf Trust, LLC. | |
99.2 |
Press Release issued by our company on June 20, 2003 announcing the retirement of our credit agreement. |
|
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