-----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, HIS3C1hOamVCIJ1QKTLLC7LBOr5tnFuMx7jffvbUe9Ixm/XCVLMDP3Hjr8no7jUD cOX5niQW/Kzx0LxcSSkEdA== 0000892569-97-003222.txt : 19971117 0000892569-97-003222.hdr.sgml : 19971117 ACCESSION NUMBER: 0000892569-97-003222 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971114 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: 97719585 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 FORM 10-QSB FOR QUARTER ENDED SEPTEMBER 30, 1997 1 FORM 10-QSB [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly period ended September 30, 1997 [ ] 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] 2 PERFORMANCE ASSET MANAGEMENT FUND III, LTD., A CALIFORNIA LIMITED PARTNERSHIP INDEX TO FORM 10-QSB PART I Item 1. Financial Statements 3 Item 2. Management's Discussion and Analysis or Plan of Operation 10 PART II Item 1. Legal Proceedings 14 Item 2. Exhibits and Reports 15 Signatures 15 2 3 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, September 30, 1997 and December 31, 1996.......................4 Statements of Operations, For the Three and Nine Months Ended September 30, 1997 and September 30, 1996....................................................5 Statements of Partnership Capital, For the Nine Months Ended September 30, 1997 and Year Ended December 31, 1996............................6 Statements of Cash Flows, For the Nine Months Ended September 30, 1997 and September 30, 1996....................................................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, 1996. 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 4 PERFORMANCE ASSET MANAGEMENT FUND III, LTD., A CALIFORNIA LIMITED PARTNERSHIP BALANCE SHEETS SEPTEMBER 30, 1997 AND DECEMBER 31, 1996 (UNAUDITED) ---------------- ASSETS
1997 1996 ---------- ---------- Cash and equivalents $ 919,419 $ 775,755 Cash held in trust 2,115,824 2,656,338 Investments in distressed loan portfolios, net 1,865,361 2,566,546 Due from affiliate 13,463 56,039 Other assets 64,480 64,477 Organization costs, net 0 923 ---------- ---------- Total assets $4,978,547 $6,120,078 ========== ========== LIABILITIES AND PARTNERS' CAPITAL Accounts payable $ 4,500 $ 715 Due to affiliates, net 290,344 492,800 ---------- ---------- Total liabilities 294,844 493,515 ---------- ---------- Commitments and contingencies Partners' capital 4,683,703 5,626,563 ---------- ---------- Total liabilities and partners' capital $4,978,547 $6,120,078 ========== ==========
The accompanying notes are an integral part of the financial statements. 4 5 PERFORMANCE ASSET MANAGEMENT FUND III, LTD., A CALIFORNIA LIMITED PARTNERSHIP STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE FOR THE NINE MONTHS ENDED SEPT 30 MONTHS ENDED SEPT 30 ----------------------------- ----------------------------- 1997 1996 1997 1996 ---------- ---------- ---------- ---------- Portfolio collections $ 194,043 $ 33,651 $ 726,660 $4,493,483 Less: portfolio basis recovery 194,043 33,651 726,660 3,572,565 ---------- ---------- ---------- ---------- Net investment income -- -- -- 920,918 ---------- ---------- ---------- ---------- Cost of operations: Collection expense 8,615 15,039 37,890 51,810 Management fee expense 11,974 6,541 40,875 38,794 Professional fees 6,801 64,774 78,559 137,671 Amortization 290 289 923 867 General and administrative expense 667 1,930 7,155 5,363 ---------- ---------- ---------- ---------- Total operating expenses 28,347 88,573 165,402 234,505 ---------- ---------- ---------- ---------- Income (loss) from operations (28,347) (88,573) (165,402) 686,413 Other income: Interest 36,054 42,159 111,658 79,728 Other income -- -- 84 -- ---------- ---------- ---------- ---------- Net income (loss) $ 7,707 ($ 46,414) ($ 53,660) $ 766,141 ========== ========== ========== ==========
The accompanying notes are an integral part of the financial statements. 5 6 PERFORMANCE ASSET MANAGEMENT FUND III, LTD., A CALIFORNIA LIMITED PARTNERSHIP STATEMENTS OF PARTNERS' CAPITAL (DEFICIT) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND YEAR ENDED DECEMBER 31, 1996 (UNAUDITED) ----------------
General Limited Partner Partners Total ----------- ----------- ----------- Balance, December 31, 1995 ($ 322,499) $ 5,597,599 $ 5,275,100 Distributions (35,775) (295,925) (331,700) Net income 68,315 614,848 683,163 ----------- ----------- ----------- Balance, December 31, 1996 (289,959) 5,916,522 5,626,563 Distributions (88,800) (800,400) (889,200) Net income (5,366) (48,294) (53,660) =========== =========== =========== Balance, September 30, 1997 ($ 384,125) $ 5,067,828 $ 4,683,703 =========== =========== ===========
The accompanying notes are an integral part of the financial statements. 6 7 PERFORMANCE ASSET MANAGEMENT FUND III, LTD., A CALIFORNIA LIMITED PARTNERSHIP STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996 (UNAUDITED) --------------
1997 1996 ----------- ----------- Cash flows from operating activities: Net income (loss) ($ 53,660) $ 766,141 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Amortization 923 867 Decrease (increase) in assets: Other assets (3) 165,815 Due from affiliates 42,576 -- Increase (decrease) in liabilities: Accounts payable 3,785 (2,523) Due to affiliates (202,456) 57,898 ----------- ----------- Net cash provided by (used in) operating activities (208,835) 988,198 ----------- ----------- Cash flows provided by (used in) investing activities: Recovery of portfolio basis 726,660 3,572,565 Receivable from West Capital -- 927,540 Cash held in trust 540,514 (1,951,561) Purchase of investments in distressed loan portfolios (25,475) (1,438,295) ----------- ----------- Net cash provided by investing activities 1,241,699 1,110,249 ----------- ----------- Cash flows provided by (used in) financing activities: Distributions to partners (889,200) -- ----------- ----------- Net cash used in financing activities (889,200) 0 ----------- ----------- Net (decrease) increase in cash 143,664 2,098,447 Cash at beginning of period 775,755 210,140 ----------- ----------- Cash at end of period $ 919,419 $ 2,308,587 =========== ===========
The accompanying notes are an integral part of the financial statements. 7 8 PERFORMANCE ASSET MANAGEMENT FUND III, LTD., A CALIFORNIA LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS 1. 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 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 ("General Partner"). 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 been returned 100% of their initial capital contributions to the Partnership. Thereafter, Partnership profits, losses and cash distributions are 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 a maturity of three months or less when purchased. 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 swept daily into a master account and invested in high quality, short-term securities. 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 fact that the Partnership has not experienced any past losses with cash and equivalent investments. 8 9 Cash Held in Trust The General Partner anticipates that the Partnership and the other similar California limited Partnerships for which the General Partner serves as general partner ("PAM Funds") may, in the future, be reorganized and merged with and into one corporation. In an effort to accomplish that reorganization and merger on terms and conditions consistent with the intent of the General Partner, on December 12, 1995, the General Partner, on behalf of the Partnership and the PAM Funds, and the State of California Department of Corporations entered into an agreement pursuant to the provisions of which the Performance Asset Management Fund Trust ("Trust") was created. These funds are subject to the terms of the Trust's agreement. The Trust was the recipient of a portion of the funds resulting from a settlement of certain litigation between the Partnership and its affiliates and West Capital Financial Services Corp. ("WCFSC") and its affiliates. Investments in Distressed Loan Portfolios and Revenue Recognition Investments in distressed loan portfolios are carried at the lower of cost, market, 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. Accordingly, income is not recognized until 100% recovery of the original cost 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 principal balances will ultimately be collected. Any adjustments to the carrying value of the individual portfolios are recorded in the results of operations. Organization Costs, Net Organization costs include legal and other professional fees incurred which are related to the organization of the Partnership. These costs are capitalized and amortized using the straight-line method over five years. Accumulated amortization at September 30, 1997 and December 31, 1996 totaled $5,786 and $4,863, respectively. Income Taxes No provision for income taxes has been made in the financial statements, except for the Partnership's minimum state franchise tax liability of $800. All partners are taxed individually on their share of the Partnership's earnings and losses. 9 10 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 estimate. 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 within 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 and 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 the General Partner's, 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", "could", "continue", or similar terms, variations of those terms or the negative of those 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, dated on March 31, 1997, can cause actual results and developments to be materially different from those expressed or implied by such forward-looking statements 10 11 RESULTS OF OPERATIONS. The Partnership did not record net investment revenue for the nine months ended September 30, 1997, compared to $920,918 for the similar period in 1996. The decrease resulted from an 84% reduction in portfolio collections for the nine months ended September 30, 1997 to $726,660, from $4,493,483 for the comparable period ended 1996. This decrease in collections was due primarily to the receipt of proceeds resulting from a settlement agreement with WCFSC in 1996. The settlement agreement terminated all servicing relations with WCFSC and assigned and transferred certain distressed loan portfolios to WCFSC in exchange for the payment of certain funds owed the Partnership and affiliated entities. As a result of the settlement agreement, the Partnership recorded revenue of $920,918 from twelve portfolios, most of which recovered 100% of its investment bases during the first half of 1996. All collections received for the nine months ended 1997 were reflected as portfolio recoveries and, accordingly, no investment revenue was recorded for this period. In comparison, approximately 21% of portfolio collections received for the similar period in 1996 were reflected as revenue. The Partnership acquired one portfolio during the third quarter of 1997, which offset the reduction of net assets as a result of portfolio collections recognized as portfolio bases reduction. Portfolio collections proceeds on the newly acquired portfolio and the existing four portfolios were $726,660 for the nine months ended September 1997, reducing the book value of total investments in distressed loan portfolios 27% to $1,865,361, as of September 30, 1997, from $2,566,546 at December 31, 1996. Collections for the months ended July 31, August 31, and September 30 totaled $73,745, $66,617, and $53,681, respectively. The Partnership received proceeds from portfolio sales of $2,709, which were recorded as recoveries of investment bases and reflected in portfolio collections for the three months ended September 30 1997. No such proceeds were received for the comparable period ended September 30, 1996. The Partnership's management continues to believe that proceeds from both collection proceeds and portfolio account sales will increase in subsequent periods and estimates that proceeds from portfolio sales accounts should exceed those amounts recorded in the fiscal year ended 1996. Total operating expenses decreased 29% to $165,402 for the nine months ended September 30, 1997, from $234,505 for the comparable period in 1996. Collection expenses decreased 27% to $37,890 from $51,810 due to a reduction in purchases of new portfolio acquisitions which directly impacts the costs associated with the identification of Partnership debtors for the nine months ended September 30, 1997, compared to the same period ended 1996. The Partnership also realized a reduction in professional fees by 43% to $78,559 for the nine months ended September 30, 1997, attributed to the reduction in legal fees associated with the settlement agreement with WCFSC for the comparable period ended September 30, 1996. Operating expenses as a percentage of portfolio collections totaled approximately 23% as compared to 5% for the comparable period in 1996. The increase is due primarily from the proceeds received from the settlement agreement with WCFSC in 1996. 11 12 Total operating expenses decreased 68% to $28,347 for the third quarter of 1997, compared to $88,573 for the comparable period in 1996. The decrease is primarily attributed to a reduction of 91% in professional fees, caused by a decrease in legal fees associated with the settlement agreement with WCFSC. Collection expenses decreased 43% to $8,615 for the three months ended September 30, 1997, compared to $15,039 for the three months ended September 30, 1996. This decrease is attributed to the reduction of new portfolio purchases for the three months ended September 30, 1997. Management fees increased 83% for the quarter ended September 30, 1997 to $11,974 from $6,541 for the comparable period in 1996. This was attributed to the addition in net assets under management caused by the purchase of new investments in distressed loan portfolios. The decrease in professional fees of 90% during the third quarter of 1997 to $6,801, from $64,774 for the comparable quarter of 1996 was primarily due to the reduction of legal fees also associated with the settlement agreement in 1996. Total operating expenses as a percentage of portfolio collections increased 18% to 23% for the nine months ended September 30, 1997, from 5% in the comparable period in 1996. This increase is attributed to collection proceeds received from the settlement agreement during the second quarter of 1996. Comparatively, operating expenses as a percentage of portfolio collections decreased 248%, to 15% for the three months ended September 30, 1997, compared to 263% for the same period ended September 30, 1996. This decrease is due to the increase in portfolio collections for the third quarter of 1997 as compared to the same period in 1996 and the reduction of professional fees related to the settlement agreement with WCFSC for 1996. FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES. The Partnership's total assets decreased approximately 19% to $4,978,547 as of September 30, 1997, from $6,120,078 at December 31, 1996. The decrease was primarily attributed to portfolio proceeds of $726,660 of which 100% were recorded as reduction of investment portfolio assets. The decrease in due from affiliates of 76% to $13,463 from $56,039 was primarily the result of the receipt of prior period portfolio collections and portfolio sales. The decrease in due to affiliates during the third quarter of 1997 was due primarily to the payment of collection expenses, management fees, and declared distributions to the General Partner. The Partnership acquired one new distressed portfolio asset during the three months ended September 30, 1997 from a third party financial institution specializing in credit card origination. 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 Partnership continues to believe it will acquire low-end-priced distressed portfolios; however, the General Partner will continue to evaluate assets with 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. 12 13 The Partnership has made no future commitments with credit card originators and other financial institutions to acquire portfolio assets. The General Partner plans to use its present contacts and relationships to identify and acquire additional assets at optimal prices, and believes that it will have no difficulties in identifying and acquiring such assets. The General Partner suspended distributions in the third quarter of 1997 in anticipation of the reorganization of the Partnership with other affiliated partnerships and Performance Capital Management, Inc., a California corporation and an affiliate of the General Partner ("PCM"). Management also believes current cash reserves and future portfolio collection proceeds will be sufficient to acquire anticipated 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, which will result from increased portfolio collections and sales. The General Partner continues to believe that PCM, which serves as the servicer of the Partnership's portfolios of indebtedness, must continue to increase the amount of its collection representatives and human resources in order to supplement such growth to the Partnership. The General Partner, in conjunction with PCM and other affiliated companies and partnerships is seeking office space in which PCM and the Partnership plan to move their facilities. The General Partner believes that this move provides the Partnership with the adequate operating facilities for the future growth of the Partnership. The General Partner, on behalf of the Partnership, has filed the necessary documents, dated November 4, 1997, with the Securities and Exchange Commission to merge the Partnership, other affiliated Partnerships ("Affiliated Partnerships"), and PCM with Performance Asset Management Company, a Delaware corporation ("Company"), whereby the Company shall acquire, by merger, all of the assets of PCM, the assets of the Partnership and the assets of the Affiliated Partnerships. The proposed merger transaction contemplates that the Partnership and the Affiliated Partnerships shall receive shares of common stock of the Company in exchange for the assets. The Partnership shall cease to exist by operation of law upon completion of their winding up and dissolution. On the winding up and dissolution of the partnership and the Affiliated Partnerships, these shares of that common stock shall be distributed to the non dissenting limited partners in exchange for their units. Additionally, the shares of common stock of the Company that are received shall be registered for trading or other resale transactions. 13 14 PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. Reference is made to the Partnership's Form 10-KSB dated March 31, 1997, in which such legal proceedings were reported in Part I, Item 3, "Legal Proceedings". The Partnership, by this reference, makes that disclosure a part of this Form 10-QSB. On or about October 31, 1997, SunAmerica, Inc., a Maryland corporation; SunAmerica Life Insurance Company, an Arizona corporation; WCFSC; and WCFSC Special Purpose Corporation, a California corporation, as Plaintiffs, filed a Complaint in United States District Court for the Central District of California alleging (i) violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated pursuant thereto; (ii) fraud and deceit, and (iii) gross negligence. Specified in that Complaint as Defendants are Vincent E. Galewick, President of the General Partner; the Partnership; the Affiliated Partnerships; and the General Partner ("Performance Defendants"). That Complaint, in essence, alleges that Michael A. Joplin, the then President of WCFSC, engaged in wrongful, deceptive and fraudulent conduct in connection with the purchase and sale of certain securities. Additionally, that Complaint alleges that the Performance Defendants participated in that conduct. None of the Performance Defendants participated, either directly or indirectly, in any wrongful, deceptive and fraudulent conduct in connection with the purchase and sale of those securities. As part of their settlement of various disputes with WCFSC, the Performance Defendants entered into a thorough and comprehensive Mutual General Release ("Release"). Pursuant to the provisions of the Release, WCFSC, for itself and its shareholders, officers, directors, affiliates, agents, successors, and assigns, forever and unequivocally released, acquitted and discharged the Performance Defendants and their officers, directors, employees, shareholders, partnerships, affiliates, agents, successors, and assigns. Therefore, it is the opinion of counsel for the Performance Defendants that the Performance Defendants have been completely and unconditionally released from any liability resulting from their relationships and transactions with WCFSC. The Performance Defendants deny each and every allegation in that litigation matter and shall defend that litigation matter vigorously. It is the opinion of counsel for the Performance Defendants that any resolution of that litigation matter should be resolved favorably for the Performance Defendants and, therefore, the resolution of that litigation matter should not (i) affect the ability of the General Partner to function as the General Partner and manage operations of the Partnership or (ii) materially and adversely affect the General Partner, the Partnership or the Affiliated Partnerships. 14 15 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) ** 27 Financial Data Schedule * 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. 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: November 13, 1997 Performance Asset Management Fund III, Ltd., A California Limited Partnership (Registrant) By: /s/ VINCENT E. GALEWICK --------------------------------- Vincent E. Galewick President of the General Partner, Performance Development, Inc. 15 16 EXHIBIT INDEX
Exhibit No. Description - ----------- ----------- 27 Financial Data Schedule
EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BALANCE SHEET AS OF SEPTEMBER 30, 1997 AND THE STATEMENT OF OPERATIONS FOR THE QUARTER ENDING SEPTEMBER 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH 10QS FOR THE QUARTER ENDING SEPTEMBER 30, 1997 3-MOS DEC-31-1997 JUL-01-1997 SEP-30-1997 3,035,243 0 77,943 0 1,865,361 0 0 0 4,978,547 294,844 0 0 0 0 4,683,703 4,978,547 0 230,097 194,043 194,043 28,347 0 0 7,707 0 0 0 0 0 7,707 0 0
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