-----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, D9MsvBoK9LVskhCtn/0Pucyy6xBkZdoNPN/b5gES6/3xX9oKEEBpBuday8dXwiPx hydSMDEM+DmYEu+BcD5m7g== 0000745481-99-000005.txt : 19990603 0000745481-99-000005.hdr.sgml : 19990603 ACCESSION NUMBER: 0000745481-99-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19990602 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SECURED INVESTMENT RESOURCES FUND LP CENTRAL INDEX KEY: 0000745481 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 480979566 STATE OF INCORPORATION: KS FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-14542 FILM NUMBER: 99638826 BUSINESS ADDRESS: STREET 1: 5453 W 61ST PL CITY: MISSION STATE: KS ZIP: 66205 BUSINESS PHONE: 9133845700 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended March 31, 1998 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period to Commission file number 0-14542 SECURED INVESTMENT RESOURCES FUND, L.P. (Exact name of registrant as specified in its charter) Kansas 48-0979566 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 5453 W. 61st Place, Mission, Kansas 66205 (Address of principal executive offices) (Zip Code) (Registrant's telephone number, including area code) (913) 384-5700 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Limited Partnership Interests ("Units") 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 periods 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 SECURED INVESTMENT RESOURCES FUND, L.P. INDEX PART I. FINANCIAL INFORMATION Page Item 1. Financial Statements (Unaudited): Consolidated Balance Sheets -- March 31, 1998 and December 31, 1997 3-4 Consolidated Statements of Operations -- Three Months Ended March 31, 1998 and 1997 5 Consolidated Statements of Partnership Capital -- Three Months Ended March 31, 1998 and the Years Ended December 31, 1997, and 1996 6 Consolidated Statements of Cash Flows -- Three Months Ended March 31, 1998 and 1997 7-8 Notes to Consolidated Financial Statements 9-10 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 11 PART II. OTHER INFORMATION Item 1. Legal Proceedings 12 Item 2. Changes in Securities 12 Item 3. Defaults Upon Senior Securities 12 Item 4. Submission of Matters to a Vote of Security Holders 12 Item 5. Other Information 12 Item 6. Exhibits and Reports on Form 8-K 12 SIGNATURES 13 PART I. FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS SECURED INVESTMENT RESOURCES FUND, L.P. CONSOLIDATED BALANCE SHEETS March 31, 1998 December 31, (Unaudited) 1997 ASSETS INVESTMENT PROPERTIES Land and buildings $ 11,754,515 $ 11,750,152 Furniture, fixtures and equipment 922,065 910,967 12,676,580 12,661,119 Less accumulated depreciation and allowance for losses 5,290,909 5,191,706 7,385,671 7,469,413 OTHER ASSETS Cash 255,521 217,424 Rents and other receivables, less allowance of $34,500 in 1998 and $54,900 in 1997 (3,907) 15,425 Prepaid expenses 21,496 Debt issuance costs, net of accumulated amortization of $97,633 in 1998 and $95,733 in 1997 122,385 124,284 Commercial commissions, deposits and other 6,849 7,415 Restricted deposits 28,576 20,626 430,920 385,174 TOTAL ASSETS $ 7,816,591 $ 7,854,587 SECURED INVESTMENT RESOURCES FUND, L.P. CONSOLIDATED BALANCE SHEETS--CONT'D. March 31, 1998 December 31, (Unaudited) 1997 LIABILITIES AND PARTNERSHIP CAPITAL Mortgage debt (Note B) $ 8,212,675 $ 8,246,116 Accrued interest 100,282 93,187 Accounts payable and accrued expenses 195,801 157,071 Due to related parties (Note C) 44,040 62,631 Unearned revenue 6,735 9,561 Tenant security deposits 57,366 56,924 TOTAL LIABILITIES 8,616,899 8,625,490 PARTNERSHIP CAPITAL General Partners Capital contribution 1,000 1,000 Partnership deficit (64,100) (63,806) (63,100) (62,806) Limited Partner Capital contributions 5,608,838 5,608,838 Partnership deficit (6,346,047) (6,316,934) (737,208) (708,095) TOTAL PARTNERSHIP CAPITAL (800,308) (770,902) $ 7,816,591 $ 7,854,587 See notes to consolidated financial statements. SECURED INVESTMENT RESOURCES FUND, L.P. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended March 31, 1998 1997 REVENUES Rents $ 437,751 $ 537,801 Interest 968 837 Maintenance escalations 13,896 17,697 452,615 556,335 OPERATING AND ADMINISTRATIVE EXPENSES Property operating expenses 144,115 181,653 General and administrative expenses 8,938 10,705 Professional services 14,089 22,977 Management fees 22,694 27,149 189,836 242,484 NET OPERATING INCOME 262,779 313,851 NON-OPERATING EXPENSES Interest 191,084 276,587 Depreciation and amortization 101,102 148,244 292,186 424,831 PARTNERSHIP LOSS $ (29,407) $ (110,980) Allocation of loss: General Partner (294) (1,109) Limited Partner (29,113) (109,871) $ (29,407) $ (110,980) Partnership loss per limited partnership unit $ (1.17) $ (4.42) See notes to consolidated financial statements. SECURED INVESTMENT RESOURCES FUND, L.P. CONSOLIDATED STATEMENTS OF PARTNERSHIP CAPITAL (Unaudited) Three Months Ended March 31, 1998 (Unaudited) and the Years Ended December 31, 1997 and 1996 General Limited Partners Partners Total Balances at January 1, 1996 (54,545) 109,818 55,273 Partnership loss (5,244) (519,183) (524,427) Balances at December 31, 1996 (59,789) (409,365) (469,154) Partnership loss (3,017) (298,730) (301,747) Balances at December 31, 1997 $ (62,806) $ (708,095) $ (770,902) Partnership loss (294) (29,113) (29,407) Balances at March 31, 1998 $ (63,100) $ (737,208) $ (800,309) See notes to consolidated financial statements. SECURED INVESTMENT RESOURCES FUND, L.P. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended March 31, 1998 1997 OPERATING ACTIVITIES Partnership income $ (29,407) $ (110,980) Adjustments to reconcile partnership loss to net cash provided by (used in) operating activities: Depreciation and amortization 101,102 151,728 Provision for losses on rents and other receivables (2,450) 12,550 Changes in assets and liabilities: Restricted deposits (7,950) 2,962 Rents and other receivables 21,782 (11,535) Prepaid expenses (21,496) (51,479) Debt issuance costs 0 (8,735) Commercial commissions, deposits and other 567 (10,291) Accounts payable and accrued expenses 38,730 78,666 Accrued interest 7,095 18,505 Unearned revenue (2,826) (8,706) Tenant security deposits 442 (303) NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 105,589 (71,063) INVESTING ACTIVITIES Purchases of and improvements to investment properties (15,460) (10,244) NET CASH USED IN INVESTING ACTIVITIES (15,460) (10,244) SECURED INVESTMENT RESOURCES FUND, L.P. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)--CONT'D. Three Months Ended March 31, 1998 1997 FINANCING ACTIVITIES Debt Issuance Costs 0 (9,977) Due To (From) Related Parties (18,591) 1,242 Principal payments on long term debt (33,441) (33,302) NET CASH PROVIDED BY FINANCING ACTIVITIES (52,032) (42,037) INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 38,097 18,782 CASH AND CASH EQUIVALENTS BEGINNING OF PERIOD 217,424 206,974 CASH AND CASH EQUIVALENTS END OF PERIOD $ 255,521 $ 225,756 See notes to consolidated financial statements. SECURED INVESTMENT RESOURCES FUND, L.P. NOTES TO FINANCIAL STATEMENTS (Unaudited) March 31, 1998 NOTE A--BASIS OF PRESENTATION The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended March 31, 1998 are not necessarily indicative of the results that may be expected for the year ended December 31, 1998. For further information, refer to the financial statements and footnotes thereto included in the Partnership's annual report on Form 10-K for the year ended December 31, 1997. NOTE B--MORTGAGE DEBT Mortgage debt consists of the following: March 31, December 31, 1998 1997 Collateralized by Investment Property First Mortgages: The Colony Apartments $ 3,608,495 3,619,623 Cascade Apartments 1,820,032 1,831,609 The Market S.C./Hidden Valley Exchange S.C. 1,569,457 1,577,536 Hidden Valley Exchange S.C. 804,691 807,348 Second Mortgages: The Market S.C./Hidden Valley Exchange S.C. 410,000 410,000 $ 8,212,675 $ 8,246,116 Interest expense totaled $191,084 and $276,587 for the three months ending March 31, 1998 and 1997, respectively. SECURED INVESTMENT RESOURCES FUND, L.P. NOTES TO FINANCIAL STATEMENTS (Unaudited)--CONT'D. NOTE B--MORTGAGE DEBT--CONT'D. The mortgage for Cascade Apartments matured March 1, 1995. The present mortgage holder has agreed to temporarily extend the mortgage on a month-to-month basis and the Partnership continues to make principal and interest payments of $18,900 to said mortgage holder. On May 28, 1996, the Partnership signed a note, collateralized by a second mortgage on The Market and Hidden Valley Exchange, in the amount of $410,000 at 7% interest. The Partnership will make consolidated monthly principal and interest payments on this and the first mortgage in the amount of $11,426 per month until June 25, 1998 when the entire amount becomes due and payable. The proceeds of this note were used to pay delinquent real estate taxes for The Market and Hidden Valley Exchange as well as accrued interest and related loan costs. NOTE C--RELATED PARTY TRANSACTIONS SPECS, Inc., a Kansas Corporation in which the individual General Partner has a minority interest, receives property management fees for providing property management services. SPECS, Inc. also performs various professional services for the Partnership, primarily tax accounting, audit preparation, SEC 10Q and 10K preparation, and investor services. Property management fees paid by the Partnership to SPECS, Inc. are as follows: Three Months Ended March 31, 1998 1997 Property Management Fees $ 22,694 $ 27,149 Amounts due (to) from related parties consist of the following: March 31, December 31, 1998 1997 Secured Investment Resources Fund, L.P. III $ (87,637) $ (85,694) Secured Investment Resources Fund, L.P. II (5,000) (5,000) SIR, Inc. 28,597 28,063 The Colony Apartments 20,000 $ (44,040) $ (62,631) NOTES TO FINANCIAL STATEMENTS (Unaudited)--CONT'D. NOTE D--CASH DISTRIBUTIONS No cash distributions have been made since January 1990. Future distributions will only be made from excess cash flow not needed for working capital reserves. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Results of Operations Revenues for the first three months of 1998 decreased by $103,720 (18.8%) compared with the same period of last year. During that period, residential revenues increased $27,639, while commercial revenues decreased $120,555 and miscellaneous revenues decreased $10,804. Total operating and administrative expenses decreased $52,648 (21.9%) when comparing the first three months of 1998 to the first three months of 1997. The Partnership anticipates that operating results for the year ending December 31, 1998 will show an increase in revenues due to new leases signed on the commercial properties, and increases in rental rates for the apartment rentals. Liquidity and Capital Reserves During the first three months of 1998 $105,390 of cash was provided by operating activities, $15,400 was used for investing activities and $52,000 was used in financing activities. In May 1996, a $410,000 note, collateralized by Hidden Valley and The Market, was signed. This loan matures June 25, 1998 and the interest rate is 7%. The mortgage for Cascade Apartments matured in March, 1995. The existing mortgage holder has agreed to extend this note on a month-to-month basis and the Partnership makes monthly principal and interest payments of $18,900. The General Partners also anticipate that cash flow from operations will continue to improve because of strong occupancy, stabilized rental rates, stabilized expenses, and new leases stabilized on commercial properties. The General Partners have the option of offering one or more properties for sale. Any net proceeds in excess of the outstanding mortgage balance could be used to generate additional working capital. The General Partners have determined it prudent to discontinue cash distributions until such time that adequate working capital and capital improvement reserves are in place. PART II. OTHER INFORMATION Item 1. LEGAL PROCEEDINGS None. Item 2. CHANGES IN SECURITIES Inapplicable. Item 3. DEFAULTS UPON SENIOR SECURITIES None. Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Inapplicable. Item 5. OTHER INFORMATION Inapplicable. Item 6. EXHIBIT AND REPORTS ON FORM 8-K (a) Exhibits None. (b) Reports on Form 8-K There were no reports on Form 8-K filed during the quarter ended March 31, 1997. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. SECURED INVESTMENT RESOURCES FUND, L.P. A Kansas Limited Partnership (Registrant) By: /s/ James R. Hoyt James R. Hoyt as Individual General Partner Date: May 28, 1999 By: Secured Investment Resources, Inc. as Corporate General Partner By: /s/ James R. Hoyt James R. Hoyt, President Date: May 28, 1999 EX-27 2
5 1 3-MOS DEC-31-1998 JAN-01-1998 MAR-31-1998 255,521 0 30,593 (34,500) 0 430,920 12,676,580 5,290,909 7,816,591 404,224 8,212,675 0 0 0 0 7,816,591 0 452,615 0 189,836 101,102 0 191,084 (29,407) 0 0 0 0 0 (29,407) (1.17) 0
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