-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AHkqqxfQWBXuL3fV2hHY4RBDcxbXRlAfzsf7YuhnB4oPEI6EW6Mf0//Qq8BaW6xB kORVBoHJ+0oW3rQoxXgfig== 0000891554-98-000994.txt : 19980814 0000891554-98-000994.hdr.sgml : 19980814 ACCESSION NUMBER: 0000891554-98-000994 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980813 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PERFORMANCE ASSET MANAGEMENT FUND III LTD CENTRAL INDEX KEY: 0001022241 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189] IRS NUMBER: 330526128 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-28764 FILM NUMBER: 98686448 BUSINESS ADDRESS: STREET 1: 4100 NEWPORT PLACE STREET 2: STE 400 CITY: NEWPORT BEACH STATE: CA ZIP: 92660 BUSINESS PHONE: 7142612400 MAIL ADDRESS: STREET 1: 4100 NEWPORT PL STE 400 STREET 2: PERFORMANCE DEVELOPMENT INC CITY: PORT BEACH STATE: CA ZIP: 92660 10QSB 1 QUARTERLY REPORT Form 10-QSB [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly period ended June 30, 1998 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from _______________ to _______________ Commission file number 0-28764 (Exact name of small business issuer as specified in its charter) Performance Asset Management Fund III, Ltd., A California Limited Partnership (State or other jurisdiction (IRS Employer of incorporation or organization) Identification No.) California 33-0526128 (Address of principal executive offices) 4100 Newport Place, Suite 400, Newport Beach, California (Issuer's telephone number) (714) 261-2400 (Former name, former address and former fiscal year, if changed since last report) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such report(s), and (2) has been subject to such filing requirements for the past 90 days. Yes _X_ No ___ APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by court. Yes___ No ___. APPLICABLE ONLY TO CORPORATE ISSUERS State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: N/A Transitional Small Business Disclosure Format (check one): Yes ___ No _X_ 1 PERFORMANCE ASSET MANAGEMENT FUND III, LTD., A CALIFORNIA LIMITED PARTNERSHIP INDEX TO FORM 10-QSB PART I Item 1. Financial Statements Item 2. Management's Discussion and Analysis of Plan of Operation PART II Item 1. Legal Proceedings Item 2. Exhibits and Reports Signatures 2 PERFORMANCE ASSET MANAGEMENT FUND III, LTD., A CALIFORNIA LIMITED PARTNERSHIP PART I ITEM 1. FINANCIAL STATEMENTS Index to the Financial Statements for the Partnership: Balance Sheets as of June 30, 1998 and December 31,1997.......................4 Statements of Operations for the Three and Six Months Ended June 30, 1998 and June 30, 1997........................................................5 Statements of Partners' Capital (Deficit) for the Six Months Ended June 30, 1998 and Year Ended December 31, 1997................................6 Statements of Cash Flows for the Six Months Ended June 30, 1998 and June 30, 1997........................................................7 Notes to Financial Statements.................................................8 The financial statements have been prepared by Performance Asset Management Fund III, Ltd., A California Limited Partnership ("Partnership"), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The Partnership believes that the disclosures are adequate to make the information presented not misleading when read in conjunction with the Partnership's financial statements for the year ended December 31, 1997. The financial information presented reflects all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. 3 PERFORMANCE ASSET MANAGEMENT FUND III, LTD., A CALIFORNIA LIMITED PARTNERSHIP BALANCE SHEETS June 30, 1998 and December 31, 1997 (UNAUDITED) ASSETS 1998 1997 ----------- ----------- Cash and equivalents $ 660,395 $ 1,109,587 Cash held in trust 2,192,197 2,141,594 Investments in distressed loan portfolios, net 2,374,809 1,663,174 Due from affiliate -- 56,221 Other assets 64,480 64,480 =========== =========== Total assets $ 5,291,881 $ 5,035,056 =========== =========== LIABILITIES AND PARTNERS' CAPITAL Accounts payable $ 4,500 $ 5,219 Due to affiliates, net 750,795 464,128 ----------- ----------- Total liabilities 755,295 469,347 ----------- ----------- Commitments and contingencies General partner's deficit (no units outstanding) (398,835) (395,923) Limited partners' capital (2,000 units authorized; 1998 units issued and outstanding June 30,1998 and December 31, 1997) 4,935,421 4,961,632 ----------- ----------- Total partners' capital 4,536,586 4,565,709 =========== =========== Total liabilities and partners' capital $ 5,291,881 $ 5,035,056 =========== =========== The accompanying notes are an integral part of the financial statements. 4 PERFORMANCE ASSET MANAGEMENT FUND III, LTD., A CALIFORNIA LIMITED PARTNERSHIP STATEMENTS OF OPERATIONS (UNAUDITED)
For the Three For the Six Months Ended June 30 Months Ended June 30 ----------------------------- ------------------------------ 1998 1997 1998 1997 ---------- ----------- ----------- ----------- Portfolio collections $ 250,221 $ 317,249 $ 487,265 $ 532,617 Less: portfolio basis recovery 250,221 317,249 487,265 532,617 ---------- ----------- ----------- ----------- Net investment income -- -- -- -- ---------- ----------- ----------- ----------- Cost of operations: Collection expense 6,451 29,065 33,789 29,275 Management fee expense 14,588 13,626 30,488 28,901 Professional fees 9,410 37,353 27,745 71,758 Amortization -- 289 -- 633 General and administrative expense 1,041 5,548 1,198 6,488 ---------- ----------- ----------- ----------- Total operating expenses 31,490 85,881 93,220 137,055 ---------- ----------- ----------- ----------- Income (loss) from operations (31,490) (85,881) (93,220) (137,055) Other income: Interest 29,744 65,887 64,097 75,604 Other income -- -- -- 84 ========== =========== =========== =========== Net income (loss) ($1,746) ($19,994) ($29,123) ($61,367) ========== =========== =========== =========== Net income (loss) allocable to general partner ($174.60) ($1,999.40) ($2,912.30) ($6,136.70) ========== =========== =========== =========== Net income (loss) allocable to limited partners ($1,571.40) ($17,994.60) ($26,210.70) ($55,230.30) ========== =========== =========== =========== Net income (loss) per limited partnership unit ($0.79) ($9.01) ($13.12) ($27.64) ========== =========== =========== ===========
The accompanying notes are an integral part of the financial statements. 5 PERFORMANCE ASSET MANAGEMENT FUND III, LTD., A CALIFORNIA LIMITED PARTNERSHIP STATEMENTS OF PARTNERS' CAPITAL (DEFICIT) For the Six Months Ended June 30, 1998 and Year Ended December 31,1997 (UNAUDITED) General Limited Partner Partners Total ----------- ----------- ----------- Balance, December 31, 1996 (289,959) 5,916,522 5,626,563 Distributions (88,800) (800,400) (889,200) Net income (17,164) (154,490) (171,654) ----------- ----------- ----------- Balance, December 31, 1997 ($395,923) $4,961,632 $4,565,709 ----------- ----------- ----------- Net income (2,912) (26,211) (29,123) =========== =========== =========== Balance, June 30, 1998 ($398,835) $4,935,421 $4,536,586 =========== =========== =========== The accompanying notes are an integral part of the financial statements. 6 PERFORMANCE ASSET MANAGEMENT FUND III, LTD., A CALIFORNIA LIMITED PARTNERSHIP STATEMENTS OF CASH FLOWS For the Six Months Ended June 30, 1998 and 1997 (UNAUDITED)
1998 1997 ----------- ----------- Cash flows from operating activities: Net income (loss) ($29,123) ($61,367) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Amortization -- 633 Decrease (increase) in assets: Other assets -- (3) Due from affiliates 56,221 (157,313) Increase (decrease) in liabilities: Accounts payable (719) 7,754 Due to affiliates 286,667 (166,308) ----------- ----------- Net cash provided by (used in) operating activities 313,046 (376,604) ----------- ----------- Cash flows provided by (used in) investing activities: Recovery of portfolio basis 487,265 532,617 Purchase of investments in distressed loan portfolios (1,198,900) -- Cash held in trust (50,603) 564,778 ----------- ----------- Net cash provided by investing activities (762,238) 1,097,395 ----------- ----------- Cash flows provided by (used in) financing activities: Distributions to partners -- (667,200) ----------- ----------- Net cash used in financing activities -- (667,200) ----------- ----------- Net (decrease) increase in cash (449,192) 53,591 Cash at beginning of period 1,109,587 775,755 =========== =========== Cash at end of period $660,395 $829,346 =========== ===========
The accompanying notes are an integral part of the financial statements. 7 PERFORMANCE ASSET MANAGEMENT FUND III, LTD., A CALIFORNIA LIMITED PARTNERSHIP Notes to Financial Statements Organization and Description of Business Performance Asset Management Fund III, Ltd., A California Limited Partnership ("Partnership"), was formed in September 1992, for the purpose of acquiring investments in or direct ownership of distressed loan portfolios from financial institutions and other sources. Interests in the Partnership were sold in a private placement offering pursuant to Regulation D promulgated by the Securities and Exchange Commission on a "best efforts" basis; however, the Partnership did not begin its primary operations until October 1992. The general partner of the Partnership is Performance Development, Inc., a California corporation ("PDI") ("General Partner"). The Partnership terminates at December 31, 2005. At that time, the Partnership will distribute any remaining cash after payment of Partnership obligations following the sale or collection of all assets. Profits, losses, and cash distributions are allocated 90% to the limited partners and 10% to the General Partner until such time as the limited partners have received cash equal to 100% of their contributions to the Partnership. Thereafter, Partnership profits, losses and cash distributions will be allocated 70% to the limited partners and 30% to the General Partner. Cash and Equivalents The Partnership defines cash equivalents as all highly liquid investments with an original maturity of three months or less. The Partnership maintains its cash balances at one bank in accounts, which at times, may exceed federally insured limits. The Partnership uses a cash management system whereby idle cash balances are transferred daily into a master account and invested in high quality, short-term securities that do not enjoy the benefit of the federal insurance. The General Partner believes that these cash balances are not subject to any significant credit risk, due to the nature of the investments and the strength of the bank and has not experienced any past losses with cash and equivalent investments. The Partnership received interest income from these investments of $64,097 and $75,604 for the six months ended June 30, 1998 and June 30, 1997, respectively. 8 Cash Held in Trust The General Partner anticipates that the Partnership and Performance Asset Management Fund, Ltd., A California Limited Partnership; Performance Asset Management Fund II, Ltd., A California Limited Partnership; Performance Asset Management Fund IV, Ltd., A California Limited Partnership; Performance Asset Management Fund V, Ltd., A California Limited Partnership, all affiliates of the Partnership ("PAM Funds") may, in the future, be reorganized and merged into Performance Asset Management Company, a Delaware Corporation ("PAMCO") ("Rollup"). In an effort to accomplish the Rollup, the General Partner, on behalf of the Partnership and the PAM Funds, entered into an agreement on December 12, 1995, with the State of California Department of Corporations ("Department"), pursuant to the provisions of which the Performance Asset Management Fund Trust ("Trust") was created. Certain funds of the Partnership are held by the Trust and these funds held in trust are subject to the terms of the Trust agreement. The Trust was the recipient of those funds resulting from the settlement of certain then pending litigation between the Partnership and its affiliates and West Capital Financial Services Corp. and its affiliates. The funds held by the Trust, until Trust termination, must not be less than $5,000,000, which is comprised of funds from the Partnership and the PAM Funds. The Trust agreement specifies that the Trust will terminate and the trustee will distribute all of the remaining funds held by the trustee on August 16, 1998, if the Rollup is not completed by such date. The Department has indicated that it will oppose the termination of the Trust on August 16, 1998. The Partnership is attempting to reach an agreement with the Department regarding the termination of the Trust and the disposition of the Partnership's funds held by the Trust. The Partnership's share of the Trust's funds at June 30, 1998 and December 31, 1997 was $2,192,197 and $2,141,594, respectively. Investments in Distressed Loan Portfolios and Revenue Recognition Investments in distressed loan portfolios are carried at the lower of cost or estimated net realizable value. Amounts collected are treated as a reduction to the carrying basis of the related investment on an individual portfolio basis and are reported in the Statement of Operations as portfolio collections. Under the cost recovery method of revenue recognition used by the Partnership, net investment income is not recognized until 100% recovery of the carrying value of the investment in each portfolio occurs. Estimated net realizable value represents management's estimates, based on its present plans and intentions, of the present value of future collections. Due to the distressed nature of these investments, no interest is earned on outstanding balances, and there is no assurance that the unpaid balances of these investments will ultimately be collected. Any adjustments reducing the carrying value of the individual portfolios are recorded in the results of operations as general and administrative 9 expenses. Organization Costs, Net Organization costs include legal and other professional fees incurred related to the initial organization of the Partnership. These costs are capitalized and amortized using the straight-line method over five years. Organization costs were fully amortized at December 31, 1997. Professional Fees Professional fees are incurred in relation to ongoing accounting and legal assistance. Income Taxes No provision for income taxes has been provided for in the financial statements, except for the Partnership's minimum state franchise tax liability of $800. All partners report individually on their share of Partnership operating results. Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Actual results could differ from the estimates. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Disclosure Regarding Forward Looking Statements. The information contained in this report on Form 10-QSB, other than historical facts, contains "forward-looking statements" (as such term is defined with the meaning of the Private Securities Litigation Reform Act of 1995) including, without limitation, statements as to the Partnership's objective to grow through future portfolio acquisitions, portfolio account sales, the Partnership's ability to realize operating efficiencies in the integration of its acquisitions, trends in the Partnership's future operating performance, and statements as to the Partnership's or management's beliefs, expectations and opinions. Forward looking statements may be identified by the use of forward looking terminology, such as "may", "will", "expect", "estimate", "anticipate", "probable", "possible", "should", "continue", or similar terms, variations of those terms or the negative of those 10 terms. Forward-looking statements are subject to risks and uncertainties and may be affected by various factors which may cause actual results to differ materially from those in the forward-looking statements. In addition to the factors discussed in this Report, certain risks, uncertainties and other factors, including, without limitation, the risk that the Partnership will not be able to realize operating efficiencies in the integration of its acquisitions, risks associated with growth and future acquisitions, fluctuations in quarterly operating results, and the other risks detailed from time to time in the Partnership's filings with the Securities and Exchange Commission, including the Partnership's Annual Report on Form 10-KSB, filed on March 31, 1998, can cause actual results and developments to be materially different from those expressed or implied by such forward-looking statements. Results of Operations. Portfolio collections for the six months ended June 30, 1998 decreased approximately 9% to $487,265, from $532,617 for the comparable period ended 1997. All collections received for the six months ended June 30, 1998 were reflected as portfolio recoveries and, accordingly, no investment income was recorded for this period. The decrease in portfolio collections was due to the lack of portfolio sales for the six months ended June 30, 1998, compared to $52,002 for the same period of 1997. Portfolio collections of $487,265 were received on six portfolios in 1998. Four of these six portfolios comprised 91% of the total book value in investments in distressed loan portfolios, and accounted for 98% of the total portfolio collections, for the six months ended June 30, 1998. Collections for the months ended April 30, May 31, and June 30 totaled $106,735, $73,987, and $69,499, respectively. The Partnership acquired two new portfolios totaling $1,198,900 during the first six months of 1998. These acquisitions contributed to a 43% increase in the book value of total investments in distressed loan portfolio. Portfolio collections from these two portfolios represents 20% of total portfolio collections for the six months ended June 30, 1998. The Partnership did not receive proceeds from portfolio sales for the six months ended June 30, 1998. For the comparable period ended June 30, 1997, proceeds from portfolio sales of $52,002 were received and recorded as recoveries of investment basis. The General Partner believes that proceeds from both collection and portfolio account sales will continue in subsequent periods. Total operating expenses decreased 32% to $93,220 for the six months ended June 30, 1998, from $137,055 for the comparable period in 1997. The Partnership realized a reduction in professional fees of 61% to $27,745 from $71,758, 11 primarily related to a reduction in accounting fees associated with the Partnership's audit and a reduction in legal fees. General and administrative expenses decreased approximately 82% from $6,488 to $1,198. This is primarily attributed to printing expenses related to the annual audit, which the Partnership has yet to incur this year. Operating expenses as a percentage of portfolio collections totaled approximately 19% for the six months ended June 30, 1998, as compared to 26% for the comparable period in 1997. This decrease relates primarily to a reduction in professional fees. Total operating expenses decreased 63% to $31,490 for the three months ended June 30, 1998, compared to $85,881 for the three months ended June 30, 1997. This is primarily attributed to a decrease in collection expenses and professional fees. Collection expense decreased 78% to $6,451 for the three months ended June 30, 1998 from $29,065 for the comparable period ended June 30, 1997, due to a decrease in skip tracing used in that period. Professional fees decreased 74% in the second quarter of 1998 to $9,410, from $37,353 in the similar period ended 1997, due primarily to a reduction in accounting and legal expenses. General and administrative expenses decreased 81% to $1,041 for the three months ended June 30, 1998 from $5,548 for the comparable period 1997, due to printing expenses related to the annual audit that the Partnership has yet to incur for 1998. Management fees decreased 9% for the three months ended June 30, 1998 to $14,588 from $13,626 for the three months ended June 30, 1997, due to the reduction of net assets under management. Operating expenses as a percentage of portfolio collections decreased 14% to 13% for the three months ended June 30, 1998, from 27% for the three months ended June 30, 1997, because of decreased collection expenses. Financial Condition, Liquidity and Capital Resources. The Partnership's total assets increased approximately 5% to $5,291,881 as of June 30, 1998, from $5,035,056 at December 31, 1997. The increase was primarily attributed to the purchase of two new portfolios totaling $1,198,900, which offset the decrease in investments in distressed loan portfolios. The increase in due to affiliates of $286,667 was due primarily to unpaid management fees and the reimbursement of legal expenses to the General Partner recorded but not yet paid. The Partnership acquired two new distressed loan portfolio assets in the first half of 1998 from third party financial institutions, which specialize in credit card organizations. The General Partner anticipates that the Partnership will acquire additional portfolios in the near future. Future acquisitions will depend on the asset market, which continues to grow in size and diversity. The General Partner believes that the Partnership will continue to acquire low-end-priced distressed portfolios; however, the General Partner will continue to evaluate assets with 12 different pricing and debtor account structure in order to determine whether such portfolios can generate strong immediate cash flows and provide additional liquidity to the Partnership. The Partnership has made no future commitments with credit card originators and other financial institutions to acquire portfolio assets. The General Partner and Performance Capital Management, Inc., a California corporation and an affiliate of the General Partner ("PCM"), plan to use their present contacts and relationships to identify and acquire additional assets at optimal prices, and believe that they will have no difficulty in identifying and acquiring such assets. The General Partner suspended distributions in the third quarter of 1997 in order to improve the financial condition of the Partnership and position the Partnership for future portfolio acquisitions. The General Partner also believes current cash reserves and future portfolio collection proceeds will be sufficient to acquire portfolio assets in the next twelve months. Impact of Additional Partnership Acquisitions and Resources on Operations. The General Partner anticipates that additional future portfolio acquisitions and continued expansion will improve the Partnership's liquidity, profitability and financial condition, as a result of increased portfolio collections and sales. The General Partner believes that PCM must continue to increase the amount of its collection representatives and human resources in order to supplement such growth. PCM is seeking to lease office space in which PCM plans to move and expand its facility. The General Partner believes that this move provides the adequate operating facilities for the future growth of PCM, which will subsequently increase portfolio collections for the Partnership. A proposal is currently under consideration by the General Partner, pursuant to which the PAM Funds and the Partnership would merge with and into PAMCO. The result of the proposed merger would be that a series of interrelated changes to the current organizational form of PAMCO would be implemented, including (a) merging the Partnership and the PAM Funds with and into PAMCO, as a result of which PAMCO would be the sole surviving entity; (b) terminating the PAM Funds and the Partnership and (c) converting the Limited Partners interests in the Partnership into shares of common stock to be issued by PAMCO. 13 Year 2000 Compliance. The General Partner recognizes that the arrival of the Year 2000 poses a unique challenge to the ability of the computer systems of PCM used to service, manage and collect the portfolios in which the Partnership has an interest, to recognize properly and process date sensitive information related to the date change from December 31, 1999 to January 1, 2000. As the century date change occurs, date-sensitive systems may recognize the Year 2000 as 1900, or not at all. This inability to recognize or treat properly the Year 2000 may cause PCM's computer systems to process financial and operational information incorrectly, which could have a material adverse effect on the Partnership's results of operations. PCM has assessed and begun remedial work relating to PCM's computer software programs and business processes to provide for PCM's ability to continue to function effectively. In 1997, PCM began the process of identifying, evaluating and implementing changes to PCM's computer programs necessary to address the Year 2000 issue. The General Partner is currently addressing the Partnership's internal Year 2000 issue by coordinating with PCM in connection with PCM's modification of existing programs and conversions to new programs. The General Partner is also in communication with financial institutions and other entities with which PCM and the Partnership conduct business to help them identify and resolve the Year 2000 issue as it relates to the Partnership's business operations. An assessment of the readiness of those third party institutions and entities with which the Partnership does business is ongoing. While PCM and the General Partner are confident that PCM will complete assessment and remediation of PCM's computer software, there can be no assurance that the necessary modifications and conversions by those third party institutions and entities with which PCM and the Partnership conduct business will be completed in a timely manner, which could have a material adverse effect on the Partnership's results of operations. The total cost to the Partnership associated with the required modifications and conversions is not expected to be material to the Partnership's results of operations and financial position and is being expensed as incurred. 14 PART II Item 1. Legal Proceedings. No additional proceedings have occurred since May 10, 1998, the date of the latest report provided. In addition, no material developments are noted with respect to those matters described in the latest report dated May 10, 1998. Reference is made to the registrant's Form 10-KSB dated March 31,1998, in which such legal proceedings were reported in Part I, Item 3. Legal Proceedings. The registrant, by this reference, makes that disclosure a part of this Form 10-QSB. Item 2. Exhibits and Reports. (a) Exhibits Exhibit Number Exhibit - -------------- ------- 1 Certificate of Limited Partnership Form LP-1 (Charter Document)* 2 Agreement of Limited Partnership (Instrument defining the rights of Security Holders)** * Reference is made to the Partnership's Form 10-KSB, dated March 31, 1997, in which that Certificate of Limited Partnership was included as an exhibit. The Partnership, by this reference, makes that Certificate of Limited Partnership a part of this Form 10-QSB. ** Reference is made to the Partnership's Form 10-KSB, dated March 31, 1997, in which that Agreement of Limited Partnership was included as an exhibit. The Partnership, by this reference, makes that Agreement of Limited Partnership a part of this Form 10-QSB. 15 SIGNATURES In accordance with Section 13 or 15(d) of the Exchange Act, the Partnership caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Dated: August 12, 1998 Performance Asset Management Fund III, Ltd., A California Limited Partnership (Registrant) By: ----------------------------------- Vincent E. Galewick President of the General Partner, Performance Development, Inc. 16 -----END PRIVACY-ENHANCED MESSAGE-----