-----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, ADTfj5mAoCnnoLrfjGEXtkD5lMQe0kzZpaFAJHoUivnIU14nLUvV9EJXx6WlqjoC HZ+ozeAOy/Fgayx47iXpiw== 0000745481-99-000009.txt : 19990616 0000745481-99-000009.hdr.sgml : 19990616 ACCESSION NUMBER: 0000745481-99-000009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19990614 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: 99646226 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 September 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 -- September 30, 1998 and December 31, 1997 3-4 Consolidated Statements of Operations -- Three and Nine Months Ended September 30, 1998 and 1997 5 Consolidated Statements of Partnership Capital -- Nine Months Ended September 30, 1998 and the Years Ended December 31, 1997, and 1996 6 Consolidated Statements of Cash Flows -- Nine Months Ended September 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 September 30, 1998 December 31, (Unaudited) 1997 ASSETS INVESTMENT PROPERTIES Land and buildings $ 11,757,224 $ 11,750,152 Furniture, fixtures and equipment 958,903 910,967 12,716,127 12,661,119 Less accumulated depreciation and allowance for losses 5,489,315 5,191,706 7,226,812 7,469,413 OTHER ASSETS Cash 226,458 217,424 Rents and other receivables, less allowance of $37,000 in 1998 $36,950 in 1997 44,187 15,424 Prepaid expenses 7,165 Debt issuance costs, net of accumulated amortization of $101,432 in 1998 and $95,733 in 1997 118,586 124,284 Commercial commissions, deposits and other 17,708 7,415 Restricted deposits 44,476 20,626 458,580 385,174 TOTAL ASSETS $ 7,685,392 $ 7,854,587 SECURED INVESTMENT RESOURCES FUND, L.P. CONSOLIDATED BALANCE SHEETS--CONT'D. September 30, 1998 December 31, (Unaudited) 1997 LIABILITIES AND PARTNERSHIP CAPITAL Mortgage debt (Note B) $ 8,146,404 $ 8,246,117 Accrued interest 114,632 93,187 Accounts payable and accrued expenses 262,565 157,071 Due to related parties (Note C) 64,959 62,630 Unearned revenue 7,704 9,561 Tenant security deposits 56,790 56,924 TOTAL LIABILITIES 8,653,054 8,625,490 PARTNERSHIP CAPITAL General Partners Capital contribution 1,000 1,000 Partnership deficit (65,775) (63,806) (64,775) (62,806) Limited Partners Capital contributions 5,608,838 5,608,838 Partnership deficit (6,511,724) (6,316,934) (902,886) (708,095) TOTAL PARTNERSHIP CAPITAL (967,661) (770,902) $ 7,685,392 $ 7,854,587 See notes to consolidated financial statements. SECURED INVESTMENT RESOURCES FUND, L.P. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Nine months Ended Three Months Ended September 30, September 30, 1998 1997 1998 1997 REVENUES Rents $ 1,266,093 $ 1,645,415 $ 402,273 $ 542,996 Interest 3,035 2,581 1,052 843 Maintenance escalations 44,406 50,454 9,303 8,415 1,313,535 1,698,450 412,628 552,254 OPERATING AND ADMINISTRATIVE EXPENSES Property operating expenses 470,561 573,268 174,603 192,884 General and administrative expenses 25,790 40,450 8,620 96 Professional services 69,814 56,129 33,730 25,470 Management Fees 63,518 81,835 19,152 25,162 629,683 751,682 236,105 243,613 NET OPERATING INCOME 683,851 946,768 176,524 308,641 NON-OPERATING EXPENSES Interest 577,303 813,404 188,607 254,241 Depreciation and amortization 303,307 440,880 101,102 144,391 880,610 1,254,284 289,709 398,632 Partnership Loss before extraordinary item $ (196,759) $ (307,516) $ (113,186) $ (89,991) Extraordinary Gain on foreclosure 89,719 89,719 PARTNERSHIP LOSS $ (196,759) $ (217,797) $ (113,186) $ (272) Allocation of loss: General Partners (1,968) (2,178) (1,132) (3) Limited Partners (194,791) (215,619) (112,054) (269) $ (196,759) (217,797)$ (113,186) $ (272) Partnership loss per limited partnership unit $ (7.83) $ (8.60) $ (4.47) $ (.09) See notes to consolidated financial statements. SECURED INVESTMENT RESOURCES FUND, L.P. CONSOLIDATED STATEMENTS OF PARTNERSHIP CAPITAL Nine months Ended September 30, 1998 (Unaudited) and the Years Ended December 31, 1997 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 (1,969) (194,791) (196,760) Balances at September 30, 1998 $ (64,775) $ (902,886) $ (967,661) See notes to consolidated financial statements. SECURED INVESTMENT RESOURCES FUND, L.P. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Nine Months Ended September 30, 1998 1997 OPERATING ACTIVITIES Partnership loss $ (196,759) $ (217,979) Adjustments to reconcile partnership loss to net cash provided by (used in) operating activities: Gain on Foreclosure (89,719) Depreciation and amortization 303,307 (440,880) Provision for losses on rents and other receivables 50 (257) Changes in assets and liabilities: Rents and other receivables (28,813) 7,037 Prepaid expenses (7,165) (22,280) Commercial commission, deposits and other (10,293) (10,990) Account payable and accrued expenses 105,494 97,042 Accrued interest 21,445 58,071 Unearned revenue (1,857) (13,543) Tenant security deposits (134) (21,051) NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 185,276 249,380 INVESTING ACTIVITIES Purchase of and improvements to investment property (55,008) (57,904) Restricted deposits (23,850) (37,818) NET CASH USED IN INVESTING ACTIVITIES (78,858) (95,722) SECURED INVESTMENT RESOURCES FUND, L.P. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)--CONT'D. Nine Months Ended September 30, 1998 1997 FINANCING ACTIVITIES Mortgage Proceeds $ 0 $ 0 Due To (From) Related Partie 2,329 3,849 Principal payments on long-term debt (99,712) (125,898) Debt Issuance Cost 0 (30,632) NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (97,384) (152,681) INCREASE IN CASH AND CASH EQUIVALENTS 9,034 977 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 217,424 206,974 CASH AND CASH EQUIVALENTS, END OF PERIOD $ 226,458 $ 207,951 See notes to consolidated financial statements. SECURED INVESTMENT RESOURCES FUND, L.P. NOTES TO FINANCIAL STATEMENTS (Unaudited) September 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 nine month period ended September 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: September 30, December 31, 1998 1997 Collateralized by Investment Property: First Mortgages: The Colony Apartments $ 3,585,577 $ 3,619,623 Cascade Apartments 1,796,006 1,831,609 The Market S.C./Hidden Valley Exchange S.C. 1,553,631 1,577,536 Hidden Valley Exchange S.C. 801,190 807,348 Second Mortgages: The Market S.C./Hidden Valley Exchange S.C. 410,000 410,000 $ 8,146,404 $ 8,246,116 Interest expense totaled $577,303 and $813,404 for the nine months ending September 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: Nine Months Ended September 30, 1998 1997 Property management fees $ 63,518 $ 81,835 Amounts due (to) from related parties consist of the following: September 30, December 31, 1998 1997 Secured Investment Resources Fund, L.P. III $ (85,693) Secured Investment Resources Fund, L.P. II (94,623) (5,000) SIR, Inc. 51,664 28,063 Colony Apartments 20,000 Cascade Apartments (42,000) $ (64,959) $ (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 nine months of 1998 decreased by $384,915 (22.7%) compared with the same period last year. Residential revenues increased $2,649, commercial revenues decreased $362,987, and miscellaneous revenues decreased $24,578 during the same nine-month period. Total operating and administrative expenses decreased $121,999 (16.3%) when comparing the first nine months of 1998 to the first nine months of 1997. The Partnership anticipates that operating results for the year ending December 31, 1998 will show an improving trend in revenues due to new leases signed on the commercial properties and improving residential rentals. Liquidity and Capital Resources During the first nine months of 1998 $185,276 of cash was provided by operating activities, $78,858 was used for investing activities and $97,384 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 General Partners are negotiating to extend such mortgage. 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 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 September 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: June 8, 1999 By: Secured Investment Resources, Inc. as Corporate General Partner By: James R. Hoyt, President Date: June 8, 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: June 8, 1999 By: Secured Investment Resources, Inc. as Corporate General Partner By: /s/ James R. Hoyt James R. Hoyt, President Date: June 8, 1999 EX-27 2
5 1 9-MOS DEC-31-1998 JAN-01-1998 SEP-30-1998 226,458 0 81,187 (37,000) 0 458,580 12,716,127 5,489,315 7,685,392 506,650 8,146,404 0 0 0 0 7,685,392 0 1,313,535 0 629,684 303,307 0 577,303 (196,759) 0 0 0 0 0 (196,759) (7.83) 0
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