-----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, A1FeRYp/oTHDgmSAj4JPSu5Z9NLo6hmSOAIiZF9Mrz6ODwZ4ZeeydcAQplHbLs/x aaFyFMIsenZELSNS1QT6vw== 0000773911-96-000008.txt : 19960430 0000773911-96-000008.hdr.sgml : 19960430 ACCESSION NUMBER: 0000773911-96-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960429 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: LEASTEC INCOME FUND III CENTRAL INDEX KEY: 0000773911 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER RENTAL & LEASING [7377] IRS NUMBER: 680066209 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-15871 FILM NUMBER: 96552356 BUSINESS ADDRESS: STREET 1: 2855 MITCHELL DR STE 215 CITY: WALNUT CREEK STATE: CA ZIP: 94598 BUSINESS PHONE: 5109383443 MAIL ADDRESS: STREET 1: 2855 MITCHELL DR STREET 2: SUITE 215 CITY: WALNUT CREEK STATE: CA ZIP: 94598 10-Q 1 FORM 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For Quarter Ended March 31, 1996 Commission file number 299435 Leastec Income Fund III A California Limited Partnership (Exact name of registrant as specified in its charter) California 68-0066209 (State or other jurisdiction of (I.R.S. Employer Identification incorporation or organization) Number) 2855 Mitchell Drive, Suite 215, Walnut Creek, California 94598 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (510) 938-3443 _____________________________________________________________________ (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 for 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 __ APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: N/A Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15 (d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ___ No ___ APPLICABLE ONLY TO CORPORATE ISSUERS: N/A Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. 2 Part 1. Financial Information LEASTEC INCOME FUND III A California Limited Partnership CONDENSED BALANCE SHEETS (Unaudited) March 31 December 31 1996 1995 ASSETS: Cash $ 536,193 $ 706,443 Accounts receivable 78 87,417 Net investment in direct financing leases 354,556 541,980 Equipment on operating leases, net of accumulated depreciation of $6,166 in 1996 and $6,166 in 1995 0 0 Equipment held for sale or lease, net of accumulated depreciation of $-0- in 1996 and $-0- in 1995. 0 0 ________ _________ Total assets $ 890,827 $1,335,840 ======== ========= LIABILITIES AND PARTNERS' CAPITAL: Liabilities: Payables to affiliates $ 2,767 $ 2,767 Accounts payable 40,442 64,323 Deposits 34,285 43,818 Prepaid rental income 1,779 2,944 Distributions payable 263,158 368,421 Notes payable 0 0 _______ _______ Total liabilities 342,431 482,273 _______ _________ Partners' capital: Partners' capital 548,396 853,567 _______ _________ Total partners' capital 548,396 853,567 _______ _________ Total liabilities & partners' capital $890,827 $1,335,840 ======== ========= The accompanying notes are an integral part of these condensed financial statements. 3 LEASTEC INCOME FUND III A California Limited Partnership CONDENSED STATEMENTS OF INCOME (Unaudited) Three Months Ended March 31 1996 1995 ____ ____ Revenue: Rental income $ 78 $ 68,165 Direct financing lease income 10,176 87,548 Gain (loss) on sale of equipment 0 13,836 Interest income 2,977 4,776 Other income 6,601 2,987 ______ _______ Total revenues 19,832 177,312 ______ _______ Expenses: Management fees 14,519 35,885 General & administrative 40,528 47,104 Data processing 6,798 8,673 lnterest expense 0 2,020 ______ _______ Total expenses 61,845 93,682 ______ _______ Net Income (loss) $(42,013) $83,630 ====== ======= Net income (loss) per limited partnership unit $ (0.53) $ 1.06 ======= ======= The accompanying notes are an integral part of these condensed financial statements. 4 LEASTEC INCOME FUND III A California Limited Partnership STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended March 31 1996 1995 ____ ____ Cash flows from operating activities: Net income $ (42,013) 83,630 Adjustments to reconcile net income to net cash provided by operating activities: Loss on disposition of equipment 0 (13,836) Change in assets and liabilities: Decrease (increase) in accounts receivable 87,339 (31,064) Decrease in payable to affiliates 0 (14,735) Decrease in accounts payable (23,881) (55,630) Decrease in deposits (9,533) (8,888) Decrease) in prepaid rental income (1,165) (2,722) Decrease in distributions payable (105,263) (152,631) _______ _______ Net cash used by operating activities (94,516) (195,876) _______ _______ Cash flows from investing activities: Proceeds from disposition of equipment 0 13,836 Decrease in net investment in direct financing leases 187,424 356,876 _______ _______ Net cash provided by investing activities 187,424 370,712 _______ _______ Cash flows from financing activities: Repayment of notes payable 0 (17,654) Net distributions to partners (263,158) (315,789) _______ _______ Net cash used in financing activities (263,158) (333,443) _______ _______ Net decrease in cash (170,250) (158,607) Cash at beginning of period 706,443 645,072 _______ _______ Cash at end of period $ 536,193 $ 486,465 ======= ======= The accompanying notes are an integral part of these condensed financial statements. 5 LEASTEC INCOME FUND III A California Limited Partnership NOTES TO CONDENSED FINANCIAL STATEMENTS March 31, 1996, March 31, 1995 and December 31, 1995 (Unaudited) 1. Basis of Condensed Financial Statement Preparation __________________________________________________ In the opinion of the General Partner, the accompanying unaudited condensed financial statements contain all adjustments (consisting principally of normal, recurring accruals) necessary to present fairly the financial position of Leastec Income Fund III (the Partnership) as of March 31, 1996, March 31, 1995 and December 31, 1995. As provided for in the Partnership agreement and offering document, the Partnership engaged in leasing activities which intended to be completed in approximately eleven years from its inception at which time all remaining partnership assets will have been liquidated and cash proceeds distributed to the registrant's partners. The Partnership has presented its 1996 financial statements to reflect its leasing activities on a basis consistent with prior periods. 2. Wind Down Phase _______________ The Registrant has ceased acquisition of new capital equipment and is in the process of liquidating its lease portfolio. It is intended that the Registrant will be fully liquidated at the end of its eleventh full year of operation, December 1996. 6 LEASTEC INCOME FUND III A California Limited Partnership Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operation The Registrant has been winding down operations since 1993 by discontinuing new leasing activities and returning cash available from operations to the Registrant's Partners. Although the Registrant has until December 1997 to liquidate operations, the Registrant intends to be fully liquidated by December 1996. This is the Registrant's final year of operation. All of the Registrant's operating leases have terminated. As operating leases terminate, the equipment is sold. The remaining lease portfolio is invested in Direct Finance leases which terminate with the lessee's contractually required purchase of equipment. The income and expenses of the Registrant are steadily declining as the lease portfolio size declines. The cash balances and related interest income fluctuates according to the cash flow from rents and equipment and finance lease sales during each quarter. Cash is distributed to the Partners according to their respective tax basis capital accounts. The Partners will not receive a 100% return of their original investment because of shortfalls in portfolio performance during the life of the Partnerhsip. The Registrant reported a net loss of $42,013 or $0.53 per Limited Partnership Unit for the three months ended March 31, 1996 as compared to net income of $86,630 or $1.06 per Limited Partnership Unit for the three months ended March 31, 1995. Total revenues for the three months ended March 31, 1996, were $19,832 compared to $177,312 for the same period in the prior year. This decrease reflects a reduced rental income from both operating and finance leases due to the gradual liquidation of the Registrant's lease portfolio. Revenue derived from the Fund's equipment management activities comprised 85% of the total income for the period, with the remaining 15% being interest income. Direct financing lease income decreased from March 31, 1995, to March 31, 1996, ($84,548 to $10,176 respectively). The net investment in direct financing leases decreased from $541,980 at March 31, 1995, to $354,556 at March 31, 1996. Interest income decreased because the Registrant held lower cash balances due to distributions to Partners and lease termination's during the first three months of 1996 as compared to the same period in the prior year. All available cash is being paid out in distributions to the Fund's partners on a quarterly basis. 7 Total expenses for the three months ended March 31, 1996, were $61,845 compared to $93,682 for the same period in the prior year. Management fees, interest, and general and administrative costs comprised 89% of the total expenses. Interest expense decreased from March 31, 1995, to March 31, 1996, ($2,020 to $-0- respectively). General and administrative costs decreased from $47,104 for the first three months of 1995 to $40,528 for the same period in 1996. The variable expenses of the Registrant have been reduced steadily as the liquidation progressed. There are certain fixed expenses caused by to the Partnership Agreement's requirements for, Regulatory and Partner reporting which will continue at this level until the Registrant's final close of operations. Liquidity and Capital Resources _______________________________ Cash used by operating activities for the three months ended March 31, 1996, was $94,516 compared to $195,876 for the same period in the prior year. The decrease in cash from operating activities reflects the continued winding down of the operating lease portfolio. Cash provided by investing activities decreased from $ 370,712 in the first quarter of 1995 to $187,424 for the first quarter of 1996, reflecting lease termination and fluctuation of rental receipts from the direct finance lease portfolio. As rental payment on finance leases are received, the cash is broken up into income and return of principal. As a finance lease ages the income portion of the rental receipts decreases and the return of principal portion increases. Cash provided by investing activities was used to repay notes payable of $17,654 in the first three months of 1995 compared to $-0- for the same period in 1996. As of March 31,1996, the Fund's partners were allocated cash distributions of $263,158 payable on April 15, 1996. The size of investor distributions depend on the timing of lease termination's and collections of rents. As a result of the decreasing portfolio of leases, this amount can be expected to gradually decrease during 1996. The cash balance decreased from $645,072 at December 31, 1994, to $486,465 at March 31, 1995, and increased to $706,443 at December 31, 1995, then decreased to $536,193 at March 31, 1996. The cash position as of March 31, 1996, was $536,193. The General Partner anticipates that funds from operations will be adequate to cover all operating expenses of the Partnership during 1996. 8 PART II. OTHER INFORMATION Item 1. Legal Proceeding None. Item 2. Changes in Securities None. Item 3. Defaults Upon Senior Securities None. Item 4. Submission of Matters to a Vote of Security Holders None. Item 5. Other Information None. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits None. (b) Reports on Form 8-K None. 8 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. LEASTEC INCOME FUND III (Registrant) LEASTEC CORPORATION, General Partner Date: April 28, 1996 By: _____________________________ Ernest V. Lavagetto, President EX-27 2
5 3-MOS DEC-31-1995 JAN-01-1996 MAR-31-1996 536,193 0 354,634 0 0 890,827 0 0 890,827 342,431 0 0 0 0 548,396 890,827 19,832 19,832 0 0 61,845 0 0 (42,013) 0 0 0 0 0 (42,013) (.53) (.53)
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