-----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, KO7NiEx5ZtiGEgS6LuCOKOOoaXHeziN+aRKC25US0XGSdeJYdlKJo6mgIbxBoozQ Cyzmli4hiqgTrFCZ76FyJA== 0000745481-99-000007.txt : 19990603 0000745481-99-000007.hdr.sgml : 19990603 ACCESSION NUMBER: 0000745481-99-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 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: 99638828 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 June 30, 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 -- June 30, 1998 and December 31, 1997 3-4 Consolidated Statements of Operations -- Three and Six Months Ended June 30, 1998 and 1997 5 Consolidated Statements of Partnership Capital -- Six Months Ended June 30, 1998 and the Years Ended December 31, 1997, and 1996 6 Consolidated Statements of Cash Flows -- Six Months Ended June 30, 1998 and 1997 7-8 Notes to Consolidated Financial Statements 9-10 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations 11-12 PART II. OTHER INFORMATION Item 1. Legal Proceedings 13 Item 2. Changes in Securities 13 Item 3. Defaults Upon Senior Securities 13 Item 4. Submission of Matters to a Vote of Security Holders 13 Item 5. Other Information 13 Item 6. Exhibits and Reports on Form 8-K 13 SIGNATURES 14 PART I. FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS SECURED INVESTMENT RESOURCES FUND, L.P. CONSOLIDATED BALANCE SHEETS June 30, 1998 December 31, (Unaudited) 1997 ASSETS INVESTMENT PROPERTIES Land and buildings $ 11,756,659 $ 11,750,152 Furniture, fixtures and equipment 945,566 910,967 12,702,226 12,661,119 Less accumulated depreciation and allowance for losses 5,390,112 5,191,706 7,312,114 7,469,413 OTHER ASSETS Cash 252,087 217,424 Rents and other receivables, less allowance of $37,000 in 1998 $36,950 in 1997 (6,969) 15,425 Prepaid expenses 14,331 Debt issuance costs, net of accumulated amortization of $99,532 in 1998 and $95,733 in 1997 120,485 124,284 Commercial commissions, deposits and other 9,863 7,415 Restricted deposits 36,526 20,626 426,321 385,174 TOTAL ASSETS $ 7,738,435 $ 7,854,587 SECURED INVESTMENT RESOURCES FUND, L.P. CONSOLIDATED BALANCE SHEETS--CONT'D. June 30, 1998 December 31, (Unaudited) 1997 LIABILITIES AND PARTNERSHIP CAPITAL Mortgage debt (Note B) $ 8,177,292 $ 8,246,117 Accrued interest 128,422 93,187 Accounts payable and accrued expenses 196,503 157,071 Due to related parties (Note C) 30,492 62,630 Unearned revenue 6,027 9,561 Tenant security deposits 54,173 56,924 TOTAL LIABILITIES 8,592,909 8,625,489 PARTNERSHIP CAPITAL General Partners Capital contribution 1,000 1,000 Partnership deficit (64,642) (63,806) (63,642) (62,806) Limited Partners Capital contributions 5,608,838 5,608,838 Partnership deficit (6,399,670) (6,316,934) (790,832) (708,096) TOTAL PARTNERSHIP CAPITAL (854,474) (770,902) $ 7,738,435 $ 7,854,587 See notes to consolidated financial statements. SECURED INVESTMENT RESOURCES FUND, L.P. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Six months Ended Three Months Ended June 30, June 30, 1998 1997 1998 1997 REVENUES Rents $ 878,854 $1,109,730 $ 441,103 $ 571,929 Interest 1,983 1,738 1,015 901 Maintenance escalations 20,070 34,728 6,174 17,031 900,907 1,146,196 448,292 589,861 OPERATING AND ADMINISTRATIVE EXPENSES Property operating expenses 295,958 383,543 151,843 201,890 General and administrative expenses 17,170 22,326 8,232 11,621 Professional services 36,084 45,527 21,995 22,550 Management Fees 44,366 56,673 21,672 29,524 393,578 508,069 203,742 265,585 NET OPERATING INCOME 507,327 638,127 244,549 324,276 NON-OPERATING EXPENSES Interest 388,696 559,163 197,612 282,576 Depreciation and amortization 202,205 296,489 101,103 148,245 590,901 855,652 298,715 430,821 PARTNERSHIP LOSS $ (83,572) $ (217,525) $ (54,166) $(106,545) Allocation of loss: General Partners (836) (2,175) (542) (1,065) Limited Partners (82,736) (215,350) (53,624) (105,480) $ (83,572) $(217,525) $ (54,166) $ (106,545) Partnership loss per limited partnership unit $ (3.36) $ (8.66) $ (2.19) $ (4.24) See notes to consolidated financial statements. SECURED INVESTMENT RESOURCES FUND, L.P. CONSOLIDATED STATEMENTS OF PARTNERSHIP CAPITAL Six months Ended June 30, 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) (298,731) (301,748) Balances at December 31, 1997 (62,806) (708,096) (770,902) Partnership loss (836) (82,736) (83,572) Balances at June 30, 1998 (63,642) $ (790,832) $ (854,474) See notes to consolidated financial statements. SECURED INVESTMENT RESOURCES FUND, L.P. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Six Months Ended June 30, 1998 1997 OPERATING ACTIVITIES Partnership loss $ (83,572) $ (217,525) Adjustments to reconcile partnership loss to net cash provided by (used in) operating activities: Depreciation and amortization 202,205 303,015 Provision for losses on rents and other receivables 50 (8,500) Changes in assets and liabilities: Rents and other receivables 22,344 3,785 Prepaid expenses (14,331) (34,244) Commercial commission, deposits and other (2,448) (10,291) Account payable and accrued expenses 39,433 97,357 Accrued interest 35,236 46,563 Unearned revenue (3,534) (7,129) Tenant security deposits (2,750) 3,937 NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 192,631 176,968 INVESTING ACTIVITIES Purchase of and improvements to investment property (41,107) (32,818) Restricted deposits (15,900) (4,482) NET CASH USED IN INVESTING ACTIVITIES (57,007) (37,300) SECURED INVESTMENT RESOURCES FUND, L.P. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)--CONT'D. Six Months Ended June 30, 1998 1997 FINANCING ACTIVITIES Mortgage Proceeds $ 0 $ 0 Due To (From) Related Parties (32,138) 2,525 Principal payments on long-term debt (68,824) (85,923) Debt Issuance Cost 0 (5,632) NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (100,962) (89,030) INCREASE IN CASH AND CASH EQUIVALENTS 34,662 50,638 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 217,424 206,974 CASH AND CASH EQUIVALENTS, END OF PERIOD $ 252,086 $ 257,612 See notes to consolidated financial statements. SECURED INVESTMENT RESOURCES FUND, L.P. NOTES TO FINANCIAL STATEMENTS (Unaudited) June 30, 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 six month period ended June 30, 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: June 30, December 31, 1998 1997 Collateralized by Investment Property: First Mortgages: The Colony Apartments $ 3,597,148 $ 3,619,623 Cascade Apartments 1,808,167 1,831,609 The Market S.C./Hidden Valley Exchange S.C. 1,558,635 1,577,536 Hidden Valley Exchange S.C. 803,342 807,348 Second Mortgages: The Market S.C./Hidden Valley Exchange S.C. 410,000 410,000 $ 8,177,292 $ 8,246,116 Interest expense totaled $388,696 and $559,163 for the six months ending June 30, 1998 and 1997, respectively. SECURED INVESTMENT RESOURCES FUND, L.P. NOTES TO FINANCIAL STATEMENTS--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: Six Months Ended June 30, 1998 1997 Property management fees $ 44,366 $ 56,673 Amounts due (to) from related parties consist of the following: June 30, Dec. 31, 1998 1997 Secured Investment Resources Fund, L.P. III $ (89,623) (85,693) Secured Investment Resources Fund, L.P. II (5,000) (5,000) SIR, Inc. 29,131 28,063 The Colony Apartments 40,000 Cascade Apartments (5,000) $ 30,492 $ (62,630) SECURED INVESTMENT RESOURCES FUND, L.P. NOTE D--CASH DISTRIBUTIONS No distributions have been made since January 1990. Future distributions will be made only 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 six months of 1998 decreased by $245,289 (21.4%) compared with the same period last year. Residential rentals increased $38,408, commercial properties decreased $263,060, and miscellaneous revenues decreased $20,637 during that same period. The residential market has not allowed the Partnership to increase rental rates. Several smaller leases have been negotiated at Foothills Shopping Center which has raised occupancy. Total operating and administrative expenses decreased $114,491 (22.6%) when comparing the first six months of 1998 to the first six months of 1997. The Partnership anticipates that operating results for the year ending December 31, 1998 will show a continued increase in revenues due to new leases signed on the commercial properties. Liquidity and Capital Resources During the first six months of 1998 $ 192,631 of cash was provided by operating activities, $57,007 was used for investing activities and $100,962 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 1998 cash flow from operations will continue to improve because of strong occupancy, rental rate increases, stabilized expenses, and new leases signed on commercial properties. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.--Cont'd. 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 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. (The remainder of this page intentionally left blank.) 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 June 30, 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: James R. Hoyt as Individual General Partner Date: May 28, 1999 By: Secured Investment Resources, Inc. as Corporate General Partner By: James R. Hoyt, President Date: May 28, 1999 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 6-MOS DEC-31-1998 JAN-01-1998 JUN-30-1998 252,087 0 30,031 (37,000) 0 426,321 12,702,226 5,390,112 7,738,435 415,617 8,177,292 0 0 0 0 7,738,435 0 900,907 0 393,578 202,205 0 388,696 (83,572) 0 0 0 0 0 (83,572) (3.36) 0
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