SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 23)
INCOME OPPORTUNITY REALTY INVESTORS, INC.
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(Name of Issuer)
Common Stock, par value $0.01 per share
--------------------------------------------------------------------------------
(Title of Class of Securities)
452926-10-8
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(CUSIP Number)
Robert A. Waldman
1800 Valley View Lane, Suite 300
Dallas, Texas 75234
(469) 522-4366
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(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
March 18, 2003
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(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 Rules 13d-1(b)(3) or (4), check the following box [ ].
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 persons'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).
CUSIP No. 452926-10-8
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1) Names of Reporting Persons I.R.S. Identification Nos. of Above Persons
(entities only)
American Realty Investors, Inc., FEI No. 75-2847135
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2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a)
(b)
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3) SEC Use Only
--------------------------------------------------------------------------------
WC
4) Source of Funds (See Instructions)
--------------------------------------------------------------------------------
5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)
--------------------------------------------------------------------------------
Nevada
6) Citizenship or Place of Organization
--------------------------------------------------------------------------------
-0-
7) Sole Voting Power
Number of
Shares Bene- --------------------------------------------------------------
ficially -0-
Owned by 8) Shared Voting Power
Each Report-
ing Person --------------------------------------------------------------
With -0-
9) Sole Dispositive Power
--------------------------------------------------------------
-0-
10) Shared Dispositive Power
--------------------------------------------------------------------------------
674,971
11) Aggregate Amount Beneficially Owned by Each Reporting Person
--------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
--------------------------------------------------------------------------------
46.91%
13) Percent of Class Represented by Amount in Row (11)
--------------------------------------------------------------------------------
CO
14) Type of Reporting Person (See Instructions)
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CUSIP No. 452926-10-8
--------------------------------------------------------------------------------
1) Names of Reporting Persons I.R.S. Identification Nos. of Above
Persons (entities only)
American Realty Trust, Inc., FEI No. 54-0697989
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2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a)
(b)
--------------------------------------------------------------------------------
3) SEC Use Only
--------------------------------------------------------------------------------
WC
4) Source of Funds (See Instructions)
--------------------------------------------------------------------------------
5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)
--------------------------------------------------------------------------------
Georgia
6) Citizenship or Place of Organization
--------------------------------------------------------------------------------
-0-
7) Sole Voting Power
--------------------------------------------------------------
Number of -0-
Shares Bene- 8) Shared Voting Power
ficially
Owned by --------------------------------------------------------------
Each Report- -0-
ing Person 9) Sole Dispositive Power
With
--------------------------------------------------------------
-0-
10) Shared Dispositive Power
--------------------------------------------------------------------------------
409,935
11) Aggregate Amount Beneficially Owned by Each Reporting Person
--------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
--------------------------------------------------------------------------------
28.5%
13) Percent of Class Represented by Amount in Row (11)
--------------------------------------------------------------------------------
CO
14) Type of Reporting Person (See Instructions)
--------------------------------------------------------------------------------
CUSIP No. 452926-10-8
--------------------------------------------------------------------------------
1) Names of Reporting Persons I.R.S. Identification Nos. of Above
Persons (entities only)
EQK Holdings, Inc., FEI No. 75-2931679
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2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a)
(b)
--------------------------------------------------------------------------------
3) SEC Use Only
--------------------------------------------------------------------------------
WC
4) Source of Funds (See Instructions)
--------------------------------------------------------------------------------
5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)
--------------------------------------------------------------------------------
Nevada
6) Citizenship or Place of Organization
--------------------------------------------------------------------------------
409,935
7) Sole Voting Power
Number of
Shares Bene- --------------------------------------------------------------
ficially -0-
Owned by 8) Shared Voting Power
Each Report-
ing Person --------------------------------------------------------------
With 409,935
9) Sole Dispositive Power
--------------------------------------------------------------
-0-
10) Shared Dispositive Power
--------------------------------------------------------------------------------
409,935
11) Aggregate Amount Beneficially Owned by Each Reporting Person
--------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
--------------------------------------------------------------------------------
28.5%
13) Percent of Class Represented by Amount in Row (11)
--------------------------------------------------------------------------------
CO
14) Type of Reporting Person (See Instructions)
--------------------------------------------------------------------------------
CUSIP No. 452926-10-8
--------------------------------------------------------------------------------
1) Names of Reporting Persons I.R.S. Identification Nos. of Above
Persons (entities only)
Basic Capital Management, Inc., FEI No. 75-2261065
--------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a)
(b)
--------------------------------------------------------------------------------
3) SEC Use Only
--------------------------------------------------------------------------------
WC
4) Source of Funds (See Instructions)
--------------------------------------------------------------------------------
5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)
--------------------------------------------------------------------------------
Nevada
6) Citizenship or Place of Organization
--------------------------------------------------------------------------------
106,802
7) Sole Voting Power
Number of
Shares Bene- --------------------------------------------------------------
ficially -0-
Owned by 8) Shared Voting Power
Each Report-
ing Person --------------------------------------------------------------
With 106,802
9) Sole Dispositive Power
--------------------------------------------------------------
-0-
10) Shared Dispositive Power
--------------------------------------------------------------------------------
106,802
11) Aggregate Amount Beneficially Owned by Each Reporting Person
--------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
--------------------------------------------------------------------------------
7.4%
13) Percent of Class Represented by Amount in Row (11)
--------------------------------------------------------------------------------
CO
14) Type of Reporting Person (See Instructions)
--------------------------------------------------------------------------------
CUSIP No. 452926-10-8
--------------------------------------------------------------------------------
1) Names of Reporting Persons I.R.S. Identification Nos. of Above
Persons (entities only)
Transcontinental Realty Investors, Inc., FEI No. 94-6565852
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2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a)
(b)
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3) SEC Use Only
--------------------------------------------------------------------------------
WC
4) Source of Funds (See Instructions)
--------------------------------------------------------------------------------
5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)
--------------------------------------------------------------------------------
Nevada
6) Citizenship or Place of Organization
--------------------------------------------------------------------------------
345,728
7) Sole Voting Power
Number of
Shares Bene- --------------------------------------------------------------
ficially -0-
Owned by 8) Shared Voting Power
Each Report-
ing Person --------------------------------------------------------------
With 345,728
9) Sole Dispositive Power
--------------------------------------------------------------
-0-
10) Shared Dispositive Power
--------------------------------------------------------------------------------
345,728
11) Aggregate Amount Beneficially Owned by Each Reporting Person
--------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
--------------------------------------------------------------------------------
24%
13) Percent of Class Represented by Amount in Row (11)
--------------------------------------------------------------------------------
CO
14) Type of Reporting Person (See Instructions)
--------------------------------------------------------------------------------
CUSIP No. 452926-10-8
--------------------------------------------------------------------------------
1) Names of Reporting Persons I.R.S. Identification Nos. of Above
Persons (entities only)
Income Opportunity Acquisition Corporation, FEI No. 75-4243609
--------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a)
(b)
--------------------------------------------------------------------------------
3) SEC Use Only
--------------------------------------------------------------------------------
WC
4) Source of Funds (See Instructions)
--------------------------------------------------------------------------------
5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)
--------------------------------------------------------------------------------
Nevada
6) Citizenship or Place of Organization
--------------------------------------------------------------------------------
265,036
7) Sole Voting Power
Number of
Shares Bene- --------------------------------------------------------------
ficially -0-
Owned by 8) Shared Voting Power
Each Report-
ing Person --------------------------------------------------------------
With 265,036
9) Sole Dispositive Power
--------------------------------------------------------------
-0-
10) Shared Dispositive Power
--------------------------------------------------------------------------------
265,036
11) Aggregate Amount Beneficially Owned by Each Reporting Person
--------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
--------------------------------------------------------------------------------
18.42%
13) Percent of Class Represented by Amount in Row (11)
--------------------------------------------------------------------------------
CO
14) Type of Reporting Person (See Instructions)
--------------------------------------------------------------------------------
ITEM 1. SECURITY AND ISSUER
This Amendment No. 23 to Statement on Schedule 13D relates to the
shares of Common Stock, par value $0.01 per share (the "Shares") of INCOME
OPPORTUNITY REALTY INVESTORS, INC., a Nevada corporation ("IOT" or the "Company"
or the "Issuer") and further amends the original Statement on Schedule 13D as
amended by Amendment Nos. 1 through 20 thereof (the "Amended Statement") filed
by and on behalf of the "Reporting Persons" described below. The principal
executive offices of the Company are located at 1800 Valley View Lane, Suite
300, Dallas, Texas 75234. The CUSIP number of the Shares is 452926-10-8.
This Amendment No. 23 to Schedule 13D is being filed to reflect various
changes in the information contained in the Amended Statement, including the
results of a cash tender offer for the Issuer's Shares. During the period ended
March 18, 2003, Income Opportunity Acquisition Corporation ("IOT AcqSub")
received, accepted and purchased 265,036 Shares of the Issuer pursuant to a cash
tender offer which resulted in the beneficial ownership of the Reporting Persons
increased by approximately 18.42% of the number of Shares of the Issuer
outstanding.
ITEM 2. IDENTITY AND BACKGROUND
Item 2 of the Amended Statement is hereby further amended as follows:
This Amendment is being filed on behalf of ARL, its wholly-owned
subsidiary, American Realty Trust, Inc., a Georgia corporation ("ART"), and its
wholly-owned subsidiary, EQK Holdings, Inc., a Nevada corporation ("EQK"), Basic
Capital Management, Inc., a Nevada corporation ("BCM"), IOT AcqSub and
Transcontinental Realty Investors, Inc., a Nevada corporation ("TCI"), each of
which have their principal executive offices located at 1800 Valley View Lane,
Suite 300, Dallas, Texas 75234. All of ARL, ART, EQK, BCM, TCI and IOT AcqSub
are collectively referred to as the "Reporting Persons." The Reporting Persons
may be deemed to constitute a "person" within the meaning of Section 13(d) of
the Securities Exchange Act of 1934, as amended, because (i) EQK is a
wholly-owned subsidiary of ART. ART and IOT AcqSub are each wholly-owned
subsidiaries of ARL, (ii) BCM owns approximately 55.2% of the outstanding
securities of ARL, and (iii) BCM serves as the Advisor to ARL and TCI.
IOT AcqSub is a corporation organized and existing under the laws of
the State of Nevada. IOT AcqSub is a subsidiary of ARL. The name, business
address and capacity with IOT AcqSub of each of the executive officers or
directors of IOT AcqSub are set forth on Schedule 6 attached hereto. Each of the
individuals listed on Schedule 6 is a citizen of the United States of America.
(d) During the last five years, none of ARL, ART, EQK, BCM, TCI, IOT
AcqSub, nor any of their respective executive officers or directors has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
-1-
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The consideration paid to purchase the Shares described in Item 5 below
is from working capital of each of the Reporting Persons and no part of the
purchase price is represented by funds or other consideration borrowed or
otherwise obtained for the purpose of acquiring, holding, trading or voting the
Shares. Each of the Reporting Persons have in the past and may in the future,
utilized margin accounts with various brokerage firms which accounts may, from
time to time, have debit balances and include certain of the Shares. Since other
securities are held in such accounts, it may be impracticable at any time to
determine the amounts, if any, borrowed with respect to the Shares and interest
costs vary with applicable costs and account balances. Prior to the purchase of
the Shares in the cash tender offer which expired March 18, 2003, ARL and its
subsidiaries sold parcels of land and other assets and generated funds in the
ordinary course of business which included refinancings of one or more
outstanding loans. However, none of such transactions involved funds or other
consideration borrowed or otherwise obtained for the direct purpose of acquiring
the Shares pursuant to the cash tender offer.
ITEM 4. PURPOSE OF TRANSACTION
Item 4 of the Amended Statement is hereby further amended as follows:
Except with respect to the tender offer described in Item 5 below, a
proposed merger transaction previously described, and any ancillary effect same
would have on the following items, the Reporting Persons do not have any plans
or proposals which relate to or would result in:
(a) The acquisition by any person of additional securities of
the Issuer or the disposition of securities of the Issuer;
(b) An extraordinary corporate transaction, such a merger,
reorganization or liquidation, involving the Issuer or any of its
subsidiaries;
(c) A sale or transfer of a material amount of assets of the
Issuer or any of its subsidiaries (except that as part of the proposed
merger transaction, certain real property assets owned by the Issuer
have been sold and may be sold in the future);
(d) Any change in the present Board of Directors or Management
of the Issuer, including any plans or proposals to change the number or
term of directors or to fill any existing vacancies on the Board;
(e) Any material change in the present capitalization or
dividend policy of the Issuer;
(f) Any other material change in the Issuer's business or
corporate structure;
-2-
(g) Changes in the Issuer's charter, bylaws or instruments
corresponding thereto or other actions which may impede the acquisition
of control of the Issuer by any person (except that the Reporting
Persons' collective ownership of over 78% of the outstanding Shares
would itself be an impediment to any potential change of control not
approved by the Reporting Persons);
(h) Causing a class of securities of the Issuer to be delisted
from a national securities exchange or to cease to be authorized to be
quoted in an inter-dealer quotation system of a registered national
securities association (except that if the merger of the Issuer with a
subsidiary of ARL is effectuated, the Issuer's Shares will no longer be
eligible for listing on a national securities exchange);
(i) A class of equity securities of the Issuer becoming
eligible for termination of registration pursuant to Section 12(g)(4)
of the Securities Exchange Act of 1934, as amended (except that if the
merger of the Issuer with a subsidiary of ARL is consummated, the
number of common stockholders of the Issuer will be reduced below 300,
and such Shares would then become eligible for termination of
registration); or
(j) Any actions similar to any of those enumerated above.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
Item 5 of the Amended Statement is hereby further amended as follows:
(a) According to the latest information available from the Issuer, as
of March 18, 2003, the total number of issued and outstanding Shares was
1,438,945 Shares. As of March 18, 2003, the following Shares were owned directly
and beneficially by the Reporting Persons set forth below:
Name No. of Shares Owned Approximate % Class
---------- ------------------- -------------------
EQK 409,935 28.5%
ART* 409,935 28.5%
ARL*+ 674,971 46.91%
BCM 106,802 7.5%
TCI 345,728 24.0%
IOT AcqSub 265,036 18.42%
--------- -----
Totals: 1,127,501** 78.4%
========= =====
----------
+Same Shares as owned by IOT AcqSub which is a subsidiary of ARL.
*Same Shares as owned by EQK; EQK is a wholly-owned subsidiary of ART which in
turn is a wholly-owned subsidiary of ARL; ARL is the indirect parent of EQK.
-3-
**If the merger of the Issuer with a subsidiary of ARL is consummated, the
106,802 Shares held by BCM will be converted into 106,802 shares of ARL Series H
Preferred Stock, and the 409,935 Shares held by EQK will be cancelled, and the
265,036 Shares held by IOT AcqSub will be cancelled. If the merger of TCI with a
subsidiary of ARL is consummated, the 345,728 Shares held by TCI will also be
cancelled; if the merger of TCI with a subsidiary of ARL is not consummated, the
345,728 Shares held by TCI will be converted into 345,728 shares of ARL Series H
Preferred Stock.
Pursuant to Rule 13d-3 under the Securities Exchange Act of 1934 (the
"Exchange Act"), each of the directors of ARL, ART and EQK may be deemed to
beneficially own the number of Shares owned by EQK described above; each of the
directors of ARL and IOT AcqSub may be deemed to beneficially own the Shares
held directly by IOT AcqSub; each of the directors of BCM may be deemed to
beneficially own the Shares held directly by BCM; and each of the directors of
TCI may be deemed to beneficially own the Shares held directly by TCI. Those
individuals and the number of Shares deemed beneficially owned pursuant to Rule
13d-3, and the approximate percent of the class, as well as the relationship,
are set forth in the following table:
No. of Shares Beneficially % of
Name of Director Entity Owned Class
---------------- ----------------------- -------------------------- ------
Earl D. Cecil ARL, IOT AcqSub and TCI 1,020,699 70.5%
Richard W. Humphrey ARL and IOT AcqSub 674,971 46.91%
Ted P. Stokley ARL, IOT AcqSub and TCI 1,020,699 70.5%
Joseph Mizrachi ARL and IOT AcqSub 674,971 46.91%
Ronald E. Kimbrough IOT AcqSub, EQK and 674,971 46.91%
ART**
Robert A. Waldman IOT AcqSub, EQK and 674,971 46.91%
ART**
Ryan T. Phillips BCM 106,802 7.5%
Mickey Ned Phillips BCM 106,802 7.5%
Henry A. Butler TCI 345,728 24.0%
Martin L. White TCI 345,728 24.0%
--------- -----
Total Shares beneficially owned by Reporting 1,127,501 78.4%
========= =====
Persons and individuals listed above:
(b) Each of the directors of ARL, ART and EQK may be deemed to share
voting and dispositive power over the 409,935 Shares held by EQK. Each of the
directors of ARL and IOT AcqSub may be deemed to share voting and dispositive
power over the 265,036 Shares held by IOT AcqSub. The directors of BCM have
shared voting and dispositive power over the 106,802 Shares held by BCM. Each of
the directors of TCI have shared voting and dispositive power over the 345,728
Shares held by TCI.
(c) During the 60 calendar days ended March 18, 2003, the Reporting
Persons and their respective executive officers and directors
-4-
did not engage in any transaction in the Shares or any other equity interests
derivative thereof except that IOT AcqSub purchased 265,036 Shares pursuant to a
cash tender offer at $19 per Share (a total of $5,035,684).
(d) No person other than the Reporting Person or its respective Board
of Directors is known to have the right to receive or the power to direct
receipt of dividends from, or the proceeds of sale of, the Shares held by each
of the Reporting Persons, subject to the matters set forth in Item 6 below.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER
Item 6 of the Amended Statement is hereby further amended to read as
follows:
EQK has pledged 250,000 Shares to a bank as additional collateral to
secure a loan to EQK. An additional 153,400 Shares owned by EQK, and 106,802
Shares owned by BCM may be deemed to be "collateral" for borrowings pursuant to
margin or other account arrangements with banks and brokerage firms relating to
accounts of EQK and BCM, respectively. Such arrangements are standard
arrangements involving margin securities of up to a specified percentage of the
market value of the shares and bear interest at varying rates and contain only
standard default and similar provisions, the operation of any of which should
not give any person immediate voting power or investment power over such
securities. Such arrangements exist with the Shares and other securities held in
such accounts and it is impracticable at any time to determine the amounts, if
any, with respect to the Shares and interest costs under such arrangements vary
with applicable costs and account balances.
All 345,728 Shares owned by TCI are located at a brokerage firm in a
cash account (not margin account), and do not serve as "collateral" for any
borrowings pursuant to any margin account arrangement or otherwise.
Except as set forth in the preceding paragraphs, the Reporting Persons
do not have any contracts, arrangements, understandings or relationships (legal
or otherwise) with any person with respect to any securities of the Issuer,
including, but not limited to, transfer or voting of any of the securities,
finder's fees, joint ventures, loan or option arrangements, puts or calls,
guaranties of profits, division of profits or losses, or the giving or
withholding of proxies.
-5-
SIGNATURES
After reasonable inquiry and to the best of their respective knowledge
and belief, the undersigned certify that the information set forth in this
Amendment No. 23 to Statement on Schedule 13D is true, complete and correct.
Dated: March 27, 2003.
AMERICAN REALTY INVESTORS, INC.
/s/ Ronald E. Kimbrough
By:
------------------------------------------------
Ronald E. Kimbrough
Executive Vice President
AMERICAN REALTY TRUST, INC.
/s/ Ronald E. Kimbrough
By:
------------------------------------------------
Ronald E. Kimbrough,
Executive Vice President
EQK HOLDINGS, INC.
/s/ Ronald E. Kimbrough
By:
------------------------------------------------
Ronald E. Kimbrough,
Vice President
BASIC CAPITAL MANAGEMENT, INC.
/s/ Ronald E. Kimbrough
By:
------------------------------------------------
Ronald E. Kimbrough,
Executive Vice President
TRANSCONTINENTAL REALTY INVESTORS,
INC.
/s/ Ronald E. Kimbrough
By:
------------------------------------------------
Ronald E. Kimbrough,
Executive Vice President
INCOME OPPORTUNITY ACQUISITION
CORPORATION
/s/ Ronald E. Kimbrough
By:
------------------------------------------------
Ronald E. Kimbrough, President
-6-
SCHEDULE 6
EXECUTIVE OFFICERS AND DIRECTORS OF
INCOME OPPORTUNITY ACQUISITION CORPORATION
PRESENT BUSINESS IN WHICH
NAME AND CAPACITY WITH EQK HOLDINGS, INC. BUSINESS ADDRESS EMPLOYMENT IS CONDUCTED
----------------------------------------- ---------------- -----------------------
Ronald E. Kimbrough, Director and President 1800 Valley View Lane Executive Vice President,
and Treasurer Suite 300 Basic Capital Management, Inc.
Dallas, Texas 75234
Robert A. Waldman, Director and Secretary 1800 Valley View Lane Senior Vice President, General
Suite 300 Counsel and Secretary, Basic
Dallas, Texas 75234 Capital Management, Inc.
Schedules - Page 1