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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) July 9, 1997
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CAPTEC FRANCHISE CAPITAL PARTNERS L.P. IV
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(Exact name of registrant as specified in its charter)
DELAWARE 333-9371 38-3304095
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(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
24 FRANK LLOYD WRIGHT DR., P.O. BOX 544, ANN ARBOR, MICHIGAN 48106
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (313) 994-5505 or
(800) 522-7832
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Not Applicable
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(Former name or former address, if changed since last report)
This document contains 4 pages. There are no exhibits attached hereto.
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Item 2. Acquisition of Assets
Capitalized terms not otherwise defined herein shall have the same meaning
as in the prospectus of Captec Franchise Capital Partners L.P. IV (the
"Partnership") dated December 23, 1996, as supplemented to date (the
"Prospectus").
On July 9, 1997, the Partnership purchased restaurant equipment to be used
in the operation of an Breckenridge Brewery & Pub, located at 600 South Main,
Breckenridge, Colorado (the "Breckenridge Equipment") for $791,000. The
Breckenridge Equipment was acquired from, and leased back to BBI Acquisition
Co., a Colorado corporation, dba Breckenridge Brewery & Pub ("BBI"). The
headquarter offices of BBI are located at 471 Kalamath Street, Denver,
Colorado. The purchase was made in cash from proceeds of the Partnership;
however, it is anticipated that the Breckenridge Equipment will subsequently be
leveraged as provided for in the Prospectus. The Partnership presently does
not have a financing commitment.
The Partnership and BBI entered into the Partnership's standard form of
equipment lease ("BBI Lease") commencing August 1, 1997. Under the terms of
the BBI Lease, BBI is responsible for all expenses related to the Breckenridge
Equipment including taxes, insurance, maintenance and repair costs. The lease
term is 84 months and the minimum annual rent is $163,622 payable in monthly
installments of $13,605.20 on the 1st day of each month. The annual rent
remains fixed for the entire BBI Lease term. All obligations under the BBI
Lease are unconditionally guaranteed by Breckenridge Holding Company, a
Colorado corporation.
At the end of the BBI Lease term, upon at least 90 days prior irrevocable
notice to the Partnership, BBI may purchase all of the Breckenridge Equipment
for $1.00. The General Partners believe that the amount of insurance carried
by BBI is adequate.
BBI paid the first and last month's rent of $27,210 and interim rent in
the amount of $10,094 to the Partnership. An affiliate of the Managing General
Partner received an acquisition fee from the Partnership in an amount equal to
$31,640, and expect to receive an additional fee of $7,910 from the Partnership
after leveraging the Breckenridge Equipment, as provided for in the Partnership
Agreement. In addition, BBI paid a commitment fee equal to $7,910 to the same
affiliate as provided for in the Partnership Agreement.
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Item 7. Financial Statements and Exhibits
(b) Pro forma financial information.
FORECASTED STATEMENT OF TAXABLE OPERATING RESULTS
FOR THE TWELVE MONTH PERIOD ENDING JULY 31, 1998
(unaudited)
12 Months
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Revenue:
Base rent $ 163,262
Expenses:
Asset management fee 16,326
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Operating Cash Flow 146,936
Less:
Depreciation 158,200
Net taxable operating Income ($11,264)
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NOTES TO FORECASTED STATEMENT OF TAXABLE OPERATING RESULTS
FOR THE TWELVE MONTH PERIOD ENDING JULY 31, 1998
1. Rental Revenue
Projected revenue is based upon monthly rent of $13,605.20 as stated in
the BBI Lease.
2. Equipment Operating Expense
The Breckenridge Equipment will be leased to BBI under an absolute net
leases whereby BBI is obligated to pay all expenses related to the
Breckenridge Equipment including taxes, insurance, maintenance and repair
costs. The Partnership will not be responsible for operating expenses
attendant to the ownership of the Breckenridge Equipment, except for
asset management fees.
3. Asset Management Fee Expense
An asset management fee is payable to an affiliate of the Managing
General Partner in an amount equal to 1% of rental revenue. Payment of
such fee is subordinated to receipt by the Limited Partners of their 10%
Current Preferred Return.
4. Depreciation
Generally, the method for depreciation of equipment used in restaurants
will be the 200% double-declining balance over a 5 year period, utilizing
the half-year convention.
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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.
By: Captec Franchise Capital Corporation L.P. IV
Managing General Partner of
Captec Franchise Capital Partners L.P. IV
By: /s/ W. Ross Martin
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W. Ross Martin
Chief Financial Officer and Vice President,
a duly authorized officer
Date: July 21, 1997
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