-----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, IpH3ZAhV12M6P5xrjGIheJaexK5aI5/H03Y39ExDlEdt9yqFhCkUQ9ekO6fmoqRg /W9Ff4RssPhnh4VNsiCggQ== 0000702313-98-000011.txt : 19981123 0000702313-98-000011.hdr.sgml : 19981123 ACCESSION NUMBER: 0000702313-98-000011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19981116 DATE AS OF CHANGE: 19981120 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PROPERTY RESOURCES FUND VI CENTRAL INDEX KEY: 0000702313 STANDARD INDUSTRIAL CLASSIFICATION: 6500 IRS NUMBER: 942838890 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-11798 FILM NUMBER: 98753117 BUSINESS ADDRESS: STREET 1: 1800 GATEWAY DR CITY: SAN MATEO STATE: CA ZIP: 94404 BUSINESS PHONE: 4153125824 MAIL ADDRESS: STREET 1: PO BOX 7777 CITY: SAN MATEO STATE: CA ZIP: 944047777 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) (x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended SEPTEMBER 30, 1998 ------------------------------------------------- OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from TO -------------------------------------------------- Commission file number 2-77330 ---------------------------------------------------------- PROPERTY RESOURCES FUND VI - - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) CALIFORNIA 94-2838890 - - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) P. O. BOX 7777, SAN MATEO, CALIFORNIA 94403-7777 - - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (650) 312-2000 ------------------------------ N/A - - -------------------------------------------------------------------------------- Former name, former address and former fiscal year, if changed since last report Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Limited Partnership Units Outstanding as of September 30, 1998: 21,585 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS PROPERTY RESOURCES FUND VI (A CALIFORNIA LIMITED PARTNERSHIP) BALANCE SHEETS SEPTEMBER 30, 1998 AND DECEMBER 31, 1997 (Unaudited) (Dollars in thousands) 1998 1997 - - ------------------------------------------------------------------------------- ASSETS: Real estate: Land $999 $2,239 Land improvements 179 781 Buildings and improvements 2,286 7,347 Furnishings and equipment 416 1,050 ------------------------------- 3,880 11,417 Less: accumulated depreciation 1,890 4,708 ------------------------------- Total real estate, net 1,990 6,709 Cash and cash equivalents 908 407 Note receivable 172 237 Other assets, net 279 308 ------------------------------- Total assets $3,349 $7,661 =============================== LIABILITIES AND STOCKHOLDERS' EQUITY: Notes payable $2,127 $6,559 Accrued interest due to General Partner 527 527 Deposits and other liabilities 177 249 ------------------------------- Total liabilities 2,831 7,335 ------------------------------- Partners' capital (deficit): Limited partners, 21,585 units issued and 925 766 outstanding General Partner (407) (440) ------------------------------- Total partners' capital 518 326 ------------------------------- Total liabilities and partners' capital (deficit) $3,349 $7,661 =============================== The accompanying notes are an integral part of these financial statements. PROPERTY RESOURCES FUND VI (A CALIFORNIA LIMITED PARTNERSHIP) CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Unaudited) THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER SEPTEMBER SEPTEMBER SEPTEMBER 30, 30, 30, 30, (Dollars in thousands, except per 1998 1997 1998 1997 unit amounts) - - -------------------------------------------------------------------------------- REVENUE: Rent $238 $528 $1,273 $1,564 Interest and dividends 22 5 41 23 ----------------------------------------- Total revenue 260 533 1,314 1,587 ----------------------------------------- EXPENSES: Interest, other than related party 50 55 152 157 Depreciation 21 72 165 217 Operating 163 253 693 744 Related party 17 30 80 95 General and administrative 2 4 48 17 ----------------------------------------- Total expenses 253 414 1,138 1,230 ----------------------------------------- Operating Income before sale of 7 119 176 357 property Gain on sale of property - - 2,498 - NET INCOME $7 $119 $2,674 $357 ========================================= Net income allocable to limited $7 $113 $2,641 $339 partners ========================================= Net income allocable to General $- $6 $33 $18 Partner ========================================= Net income per $500 limited partnership unit- $0.32 $5.24 $122.35 $15.71 based on 21,585 units outstanding ========================================= The accompanying notes are an integral part of these financial statements. PROPERTY RESOURCES FUND VI (A CALIFORNIA LIMITED PARTNERSHIP) STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (Unaudited) (Dollars in thousands) 1998 1997 ------------------------------- Cash flows from operating activities: Net income $2,674 $357 ------------------------------- Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 175 226 (Increase) decrease in other assets 19 66 Increase in accrued Interest - 3 Gain on sale of property (2,498) - Decrease in deposits and other liabilities (72) (31) ------------------------------- (2,376) 264 ------------------------------- Net cash provided by operating activities 298 621 ------------------------------- Cash flow from investing activities: Improvements to rental property (20) (181) Proceeds from sale of property 6,625 - Principal received on note receivable 65 59 ------------------------------- Net cash provided by (used in) investing 6,670 (122) activities ------------------------------- Principal payments on notes payable (3,985) (320) Distribution to Limited Partners (2,482) - Principal payments to General Partner - (153) ------------------------------- Net cash used in financing activities (6,467) (473) ------------------------------- Net increase in cash and cash equivalents 501 26 Cash and cash equivalents, beginning of period 407 279 ------------------------------- Cash and cash equivalents, end of period $908 $305 =============================== The accompanying notes are an integral part of these financial statements. PROPERTY RESOURCES FUND VI (A CALIFORNIA LIMITED PARTNERSHIP) NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1998 NOTE 1 - BASIS OF PRESENTATION The accompanying unaudited interim financial statements of Property Resources Fund VI (the "Partnership") have been prepared in accordance with the instructions to Form 10-Q 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. In the opinion of management, all appropriate adjustments necessary to a fair presentation of the results of operations have been made for the periods shown. All adjustments are of a normal recurring nature. Certain prior year amounts have been reclassified to conform to current year presentations. These financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Management have decided to sell the Partnership's remaining property and dissolve the Partnership. A proxy statement announcing this intention was sent to members in April 1998 and has since been approved. No sale of the remaining Property had occurred at September 30, 1998, however management is currently actively seeking a buyer of the Property. Accordingly it is possible that the Partnership will not continue as a going concern for a reasonable period of time. The financial statements do not include any adjustments relating to the recoverability and classification of liabilities that might be necessary if the Partnership will not continue as a going concern. Management believes that the market value of the Partnership's remaining property is at least equal to its book value. Accordingly management does not expect any material losses to be undertaken in the event of the liquidation of the Partnership. However, there can be no assurance that the eventual sales price of the property will not result in a loss or that a sale will be consummated. These financial statements should be read in conjunction with the Partnership's audited financial statements for the year ended December 31, 1997. NOTE 2 - SALE OF RENTAL PROPERTY On June 30, 1998, the Partnership sold the Grouse Run Apartments property to an unaffiliated buyer for a total sales price of $6,902,500 resulting in net cash proceeds to the Partnership of $6,625,750. In connection with the sale, the Partnership recognized a gain of $2,498,000. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS INTRODUCTION Management's discussion and analysis of financial condition and results of operations should be read in conjunction with the Financial Statements and Notes thereto. RESULTS OF OPERATIONS COMPARISON OF THE THREE AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 1998 AND 1997 Total revenue for the three- and nine-month periods ended September 30, 1998 decreased $273,000, or 51%, and $273,000, or 17% respectively, when compared to the same periods in 1997. This was due primarily to the sale of the Grouse Run Apartments property on June 30 1998. Total expenses for the three and nine-month period ended September 30, 1998 decreased $161,000, or 39%, and $92,000, or 7%, respectively, when compared to the same periods in 1997. The decrease was primarily caused by reduced administrative, payroll, utility and depreciation expenses following the sale of the Grouse Run Apartments property on June 30 1998. The increase in net income for the nine-month period ended September 30, 1998 was primarily due to the gain recorded on the sale of the Grouse Run Apartments property in June 1998 as discussed in note 2 to the financial statements. The decrease in net income for the three months ended September 30, 1998 was due to the changes in revenues and expenses as discussed above. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) LIQUIDITY AND CAPITAL RESOURCES In July 1983, the Partnership completed a public offering of its limited partnership units with total proceeds of $10,795,500 from the sale of 21,585 limited partnership units. The Partnership acquired five properties with an aggregate cost of $23,526,000. As of September 30, 1998 the Partnership had one operating property named Clearlake Village Apartments. The buildings and the land upon which the buildings are located are owned directly by the Partnership or the Subsidiary, as herein after defined, in fee. As described in note 1 to the financial statements Management estimates that the net realizable value of the property approximates its carrying value. As of September 30, 1998, cash and cash equivalents totaled $908,000. As of September 30, 1998, accrued interest due to General Partner amounted to $527,000. The General Partner presently intends to continue to make such advances to the Partnership as necessary. Consequently, management believes that the Partnership's current sources of funds will be adequate to meet both its short-term and long-term capital commitments and operating requirements. The Partnership presently believes that funds available from operations and from its note receivable due in 1999 will permit it to repay interest owed to the General Partner. The Partnership successfully eliminated $4,246,000 of notes payable during June 1998. This was financed by the proceeds from the sale of Grouse Run Apartments as referred to in note 2 to the financial statements. Net cash provided by operating activities for the nine-month period ended September 30, 1998 was $298,000 which was $323,000 less than the same period in 1997. This was primarily due to the results of operations as discussed above. The changes in net cash provided by investing and financing activities during the nine-month period ended September 30, 1998 primarily resulted from the sale of the Grouse Run Apartments property in June 1998, as reduced by the repayment of the related note payable and distribution to the Limited partners. Management believes that the Company's sources of capital as described under Liquidity and Capital Resources are adequate to meet its liquidity needs in the foreseeable future. As disclosed in note 1 to the financial statements management is currently seeking to dissolve the Partnership. IMPACT OF INFLATION The Partnership's management believes that inflation may have a positive effect on the Partnership's property portfolio, but this effect generally will not be fully realized until such properties are sold or exchanged. YEAR 2000 Management is in the process of assessing the impact of Year 2000 issues on its computer systems and applications. At this time, management believes that the costs associated with resolving these issues will not have a material effect on the Company's financial statements. PROPERTY RESOURCES FUND VI (A CALIFORNIA LIMITED PARTNERSHIP) PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Not applicable (b) Reports on Form 8-K The Partnership filed 2 reports on form 8-K during the three months ended September 30, 1998 both of which related to the sale of the Grouse Run Apartments property. Form 8-K was filed on July 15 1998 and form 8-K/A was filed on September 16, 1998. SIGNATURE 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. PROPERTY RESOURCES FUND VI By: /s/ David P. Goss David P. Goss Chief Executive Officer Date: 11/16/98 -----END PRIVACY-ENHANCED MESSAGE-----