UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[x] Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities and Exchange Act of 1934
For the quarterly period ended September 30, 2012
[ ] Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from ________________ to _______________
Commission File No. 2-68926.
DSI REALTY INCOME FUND X
a California Limited Partnership
| California | 33-0195079 | |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
6700 E. Pacific Coast Hwy., Long Beach, California 90803
(Address of principal executive offices)
Registrant’s telephone number, including area code (562) 493-8881
Indicate by check mark whether the issuer (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 [ ]
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes [X] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
The issuer is a limited partnership. All 31,783 limited partnership units originally sold for $500.00 per unit. There is no trading market for the limited partnership units.
Certain statements contained in this discussion or elsewhere in this report may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Words and phrases such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “seeks”, “estimates”, “designed to achieve”, variations of such words and similar expressions are intended to identify such forward-looking statements, which generally are not historical in nature. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future – including statements relating to rent and occupancy growth, general conditions in the geographic areas where we operate – are forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict.
Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance that our expectations will be attained and therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. Many of the factors that may affect outcomes and results are beyond our ability to control.
EXPLANATORY NOTE
The sole purpose of this amendment to the Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2012, originally filed by the Registrant with the Securities and Exchange Commission on November 14, 2012 (the “Original Form 10-Q”), is to furnish the exhibits required by Item 601(b)(101) (Interactive Data File) of Regulation S-K, which are being furnished within 30 days of the filing of the Original Form 10-Q, as permitted by Rule 405(a)(2)(ii) of Regulation S-T.
No other changes have been made to the Original Form 10-Q and the Original Form 10-Q has not been modified or updated to reflect events occurring subsequent to its original filing date.
ITEM 6. EXHIBITS
(a) Exhibits
31.1 Rule 13a-14(a)/15d-14(a)
Certification: Principal Executive Officer*
31.2 Rule 13a-14(a)/15d-14(a) Certification: Principal Financial Officer*
32.1 Section 1350 Certification: Principal Executive Officer*
32.2 Section 1350 Certification: Principal Financial Officer*
101.INS XBRL Instance Document**
101.SCH XBRL Taxonomy Extension Schema Document**
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document**
101.DEF XBRL Taxonomy Extension Definition Linkbase Document**
101.LAB XBRL Taxonomy Extension Label Linkbase Document**
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document**
| * | Previously filed or furnished as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2012. |
| ** | Furnished with this Amendment No. 1. Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections. |
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.
DSI REALTY INCOME FUND X,
a California Limited Partnership
by: DSI Properties, Inc., a California Corporation, as General Partner
By: /s/ ROBERT J. CONWAY
Dated: November 21, 2012
ROBERT J. CONWAY, President
(Chief Executive Officer and Director)
By: /s/ RICHARD P. CONWAY
Dated: November 21, 2012
RICHARD P. CONWAY, Executive Vice President
(Chief Financial Officer and Director)
|
Related Party Transactions
|
9 Months Ended |
|---|---|
|
Sep. 30, 2012
|
|
| Notes to Financial Statements | |
| Related Party Transactions |
The Partnership has entered into a management agreement with Dahn to operate its mini-storage facilities. The management agreement provides for a management fee equal to 5% of gross revenue from operations, which is defined as the entire amount of all receipts from the renting or leasing of storage compartments and sale of locks. The management agreement is renewable annually. Dahn earned management fees equal to $92,433 and $86,668, for the nine month periods ended September 30, 2012 and 2011, respectively. Amounts payable to Dahn at September 30, 2012 and December 31, 2011 were $312,247 and $312,906, respectively.
Beginning in July 2011, the General Partner, DSI Properties, Inc. performs all tax related work with respect to the Partnership. These services are paid monthly in the amount of $4,221. Tax fees paid to DSI Properties, Inc. for the nine month period ended September 30, 2012 and 2011 were $37,989 and $12,664, respectively. |
|
Property
|
9 Months Ended | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Sep. 30, 2012
|
||||||||||||||||||||||
| Notes to Financial Statements | ||||||||||||||||||||||
| Property |
Properties owned
by the Partnership are all mini-storage facilities. Depreciation is calculated using the straight-line method over the
estimated useful life of 20 years. Property under capital leases is amortized over the lives of the respective leases. The
total cost of property and accumulated depreciation at September 30, 2012 and December 31, 2011 were as follows:
|
|
Balance Sheets (Unaudited) (USD $)
|
Sep. 30, 2012
|
Dec. 31, 2011
|
|---|---|---|
| ASSETS: | ||
| Cash & Equivalents | $ 387,961 | $ 447,664 |
| Property Net | 2,143,333 | 2,175,429 |
| Uncollected Rental Revenue | 150,249 | 136,121 |
| Prepaid Advertising | 0 | 0 |
| Other Assets | 56,397 | 56,625 |
| TOTAL | 2,737,940 | 2,815,839 |
| LIABILITIES: | ||
| Distribution due to Partners | 200,650 | 200,650 |
| Incentive Management Fee Liability | 334,879 | 328,859 |
| Property Management Fee Liability | 312,247 | 312,906 |
| Deferred Income | 42,667 | 40,717 |
| Accrued Expenses | 26,891 | 18,234 |
| Other Liabilities | 151,973 | 218,799 |
| Total Liabilities | 1,069,307 | 1,120,165 |
| PARTNERS' EQUITY: | ||
| General Partners | (125,340) | (125,070) |
| Limited Partners | 1,793,973 | 1,820,744 |
| Total Partners' Equity | 1,668,633 | 1,695,674 |
| TOTAL | $ 2,737,940 | $ 2,815,839 |
|
General
|
9 Months Ended |
|---|---|
|
Sep. 30, 2012
|
|
| Notes to Financial Statements | |
| General |
Registrant, DSI Realty
Income Fund X (the "Partnership") is a publicly-held limited partnership organized under the California Uniform Limited
Partnership Act pursuant to a Certificate and Agreement of Limited Partnership (hereinafter referred to as "Agreement")
dated December 16, 1985 and restated to April 15, 1986. The General Partners are DSI Properties, Inc., a California corporation,
and RJC Capital Management, LLC and JWC Capital Management, LLC. The accompanying unaudited interim financial statements have been prepared by the Partnership's management in accordance with accounting principles generally accepted in the United States of America ("GAAP") and in conjunction with the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to SEC rules and regulations. Accordingly, the unaudited interim financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying unaudited interim financial statements reflect all adjustments of a normal and recurring nature which are considered necessary for a fair presentation of the results for the interim periods presented. However, the results of operations for the interim periods are not necessarily indicative of the results that may be expected for the year ending December 31, 2012. These unaudited interim financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Partnership's annual report on Form 10-K for the year ended December 31, 2011.
Reclassifications
Certain amounts previously reported have been reclassified to conform to the current period presentation. The reclassifications were made to change the income statement presentation. The reclassifications had no effect on net income or assets and liabilities.
Significant Accounting Policies The Partnership has adopted Accounting Standards Update 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income. For the six months ended September 30, 2012 and 2011 comprehensive income equaled net income, as the Partnership had no other comprehensive income. As of September 30, 2012 and December 31, 2011, accumulated other comprehensive income was $0. ASC 825-10 (formerly SFAS 107, “Disclosures about Fair Value of Financial Instruments”) defines financial instruments and requires disclosure of the fair value of financial instruments held by the Partnership. The Partnership considers the carrying amount of cash, accounts receivable, other receivables, accounts payable and accrued liabilities, to approximate their fair values because of the short period of time between the origination of such instruments and their expected realization.
Recent Accounting Pronouncements
In December 2011, the FASB issued Accounting Standards Update No. 2011-11, Balance Sheet (Topic 210), Disclosures about Offsetting Assets and Liabilities, which requires companies to disclose information about financial instruments that have been offset and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial statements. Companies will be required to provide both net (offset amounts) and gross information in the notes to the financial statements for relevant assets and liabilities that are offset. This standard will be effective for fiscal years, and interim periods within those years, beginning on or after January 1, 2013. The Partnership does not expect the adoption of the standard update to impact its financial position or results of operations, as it only requires additional disclosure in the Partner’s financial statements. In May 2011, the FASB issued Accounting Standards Update 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. The new guidance results in a consistent definition of fair value and common requirements for measurement of and disclosure about fair value between U.S. GAAP and International Financial Reporting Standards. While many of the amendments to U.S. GAAP are not expected to have a significant effect on practice, the new guidance changes some fair value measurement principles and disclosure requirements. This new guidance is effective for fiscal years and interim periods beginning after December 15, 2011. The adoption of the standard update does not have a significant impact on its financial position or results of operations. |
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|
Subsequent Events
|
9 Months Ended |
|---|---|
|
Sep. 30, 2012
|
|
| Notes to Financial Statements | |
| Subsequent Events |
Events subsequent to September 30, 2012, have been evaluated through the date these unaudited interim financial statements were issued to determine whether they should be disclosed to keep the unaudited interim financial statements from being misleading. Management found no subsequent events that should be disclosed. |
|
Statements of Income (Unaudited) (USD $)
|
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2012
|
Sep. 30, 2011
|
|
| REVENUES: | ||||
| Self-storage rental income | $ 544,816 | $ 564,162 | $ 1,666,434 | $ 1,598,199 |
| Ancillary operating revenue | 60,340 | 57,898 | 169,553 | 160,019 |
| Interest and other income | 0 | 38 | 5 | 114 |
| TOTAL | 605,156 | 622,098 | 1,835,992 | 1,758,332 |
| EXPENSES: | ||||
| Depreciation | 6,624 | 7,082 | 32,096 | 11,992 |
| Operating | 314,184 | 299,688 | 825,607 | 846,353 |
| General and administrative | 77,927 | 71,712 | 244,177 | 236,990 |
| General partners' incentive management fee | 18,060 | 18,060 | 54,176 | 54,176 |
| Property management fee | 30,566 | 28,099 | 92,433 | 86,668 |
| Total | 447,361 | 424,641 | 1,248,489 | 1,236,179 |
| NET INCOME | 157,795 | 197,457 | 587,503 | 522,153 |
| AGGREGATE INCOME ALLOCATED TO: | ||||
| General partners | 1,578 | 1,975 | 5,875 | 5,222 |
| Limited partners | 156,217 | 195,482 | 581,628 | 516,931 |
| TOTAL | $ 157,795 | $ 197,457 | $ 587,503 | $ 522,153 |
| Weighted average limited partnership units outstanding | 31,783 | 31,783 | 31,783 | 31,783 |
| NET INCOME ATTRIBUTABLE TO THE PARTNERSHIP PER LIMITED PARTNERSHIP UNIT | $ 4.92 | $ 6.15 | $ 18.30 | $ 16.26 |
|
Property - Summary of Property and Equipment (Details) (USD $)
|
Sep. 30, 2012
|
Dec. 31, 2011
|
|---|---|---|
| Property, net | ||
| Land | $ 2,076,627 | $ 2,076,627 |
| Buildings and improvements | 11,011,156 | 11,011,156 |
| Rental trucks under capital leases | 157,604 | 157,604 |
| Total | 13,245,387 | 13,245,387 |
| Less accumulated depreciation | 11,102,054 | 11,069,958 |
| Property - net | $ 2,143,333 | $ 2,175,429 |
|
Document and Entity Information (USD $)
|
9 Months Ended |
|---|---|
|
Sep. 30, 2012
|
|
| Document And Entity Information | |
| Entity Registrant Name | DSI Realty Income Fund X |
| Entity Central Index Key | 0000792989 |
| Document Type | 10-Q |
| Document Period End Date | Sep. 30, 2012 |
| Amendment Flag | false |
| Current Fiscal Year End Date | --12-31 |
| Is Entity a Well-known Seasoned Issuer? | No |
| Is Entity a Voluntary Filer? | No |
| Is Entity's Reporting Status Current? | No |
| Entity Filer Category | Smaller Reporting Company |
| Entity Public Float | $ 15,891,500 |
| Entity Common Stock, Shares Outstanding | 31,783 |
| Document Fiscal Period Focus | Q3 |
| Document Fiscal Year Focus | 2012 |
|
Statements of Changes in Partners' Equity (Deficit) (Unaudited) (USD $)
|
General Partners
|
Limited Partners
|
Total
|
|---|---|---|---|
| BALANCE, Beginning at Dec. 31, 2011 | $ (125,070) | $ 1,820,744 | $ 1,695,674 |
| Net Income Allocation | 5,875 | 581,628 | 587,503 |
| Distributions | 6,145 | 608,399 | |
| BALANCE, Ending at Sep. 30, 2012 | $ (125,340) | $ 1,793,973 | $ 1,668,633 |
|
General (Policies)
|
9 Months Ended |
|---|---|
|
Sep. 30, 2012
|
|
| Notes to Financial Statements | |
| Nature of Operations | Registrant, DSI Realty
Income Fund X (the "Partnership") is a publicly-held limited partnership organized under the California Uniform Limited
Partnership Act pursuant to a Certificate and Agreement of Limited Partnership (hereinafter referred to as "Agreement")
dated December 16, 1985 and restated to April 15, 1986. The General Partners are DSI Properties, Inc., a California corporation,
and RJC Capital Management, LLC and JWC Capital Management, LLC. |
| Comparability to Prior Year Data | The accompanying unaudited interim financial statements have been prepared by the Partnership's management in accordance with accounting principles generally accepted in the United States of America ("GAAP") and in conjunction with the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to SEC rules and regulations. Accordingly, the unaudited interim financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying unaudited interim financial statements reflect all adjustments of a normal and recurring nature which are considered necessary for a fair presentation of the results for the interim periods presented. However, the results of operations for the interim periods are not necessarily indicative of the results that may be expected for the year ending December 31, 2012. These unaudited interim financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Partnership's annual report on Form 10-K for the year ended December 31, 2011.
Reclassifications
Certain amounts previously reported have been reclassified to conform to the current period presentation. The reclassifications were made to change the income statement presentation. The reclassifications had no effect on net income or assets and liabilities.
|
| Comprehensive Income | The Partnership has adopted Accounting Standards Update 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income. For the six months ended June 30, 2012 and 2011 comprehensive income equaled net income, as the Partnership had no other comprehensive income. As of June 30, 2012 and December 31, 2011, accumulated other comprehensive income was $0. |
| Fair Value Disclosures | ASC 825-10 (formerly SFAS 107, “Disclosures about Fair Value of Financial Instruments”) defines financial instruments and requires disclosure of the fair value of financial instruments held by the Partnership. The Partnership considers the carrying amount of cash, accounts receivable, other receivables, accounts payable and accrued liabilities, to approximate their fair values because of the short period of time between the origination of such instruments and their expected realization.
Recent Accounting Pronouncements In May 2011, the FASB issued Accounting Standards Update 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. The new guidance results in a consistent definition of fair value and common requirements for measurement of and disclosure about fair value between U.S. GAAP and International Financial Reporting Standards. While many of the amendments to U.S. GAAP are not expected to have a significant effect on practice, the new guidance changes some fair value measurement principles and disclosure requirements. This new guidance is effective for fiscal years and interim periods beginning after December 15, 2011. The adoption of the standard update does not have a significant impact on its financial position or results of operations. |
| Balance Sheet Offsets | In December 2011, the FASB issued Accounting Standards Update No. 2011-11, Balance Sheet (Topic 210), Disclosures about Offsetting Assets and Liabilities, which requires companies to disclose information about financial instruments that have been offset and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial statements. Companies will be required to provide both net (offset amounts) and gross information in the notes to the financial statements for relevant assets and liabilities that are offset. This standard will be effective for fiscal years, and interim periods within those years, beginning on or after January 1, 2013. The Partnership does not expect the adoption of the standard update to impact its financial position or results of operations, as it only requires additional disclosure in the Partner’s financial statements. |
|
Net Income Per Limited Partnsership Unit
|
9 Months Ended |
|---|---|
|
Sep. 30, 2012
|
|
| Notes to Financial Statements | |
| Net Income Per Limited Partnsership Unit |
Net income per limited partnership unit is calculated by dividing the net income allocated to the limited partners by the number of limited partnership units outstanding during the period.
|
|
General (Details Narrative) (USD $)
|
9 Months Ended |
|---|---|
|
Sep. 30, 2012
|
|
| Notes to Financial Statements | |
| Limited Partnership Units Outstanding | 31,783 |
| Public Float | $ 15,891,500 |
| General Partner Percent Ownership Percentage | 1.00% |
|
Property (Tables)
|
9 Months Ended | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Sep. 30, 2012
|
||||||||||||||||||||||
| Notes to Financial Statements | ||||||||||||||||||||||
| Summary of Property and Equipment |
|
|
Allocations of Profits and Losses (Details Narrative)
|
9 Months Ended |
|---|---|
|
Sep. 30, 2012
|
|
| Notes to Financial Statements | |
| General Partner Percentage | 1.00% |
|
Related Party Transactions (Details Narrative) (USD $)
|
1 Months Ended | 3 Months Ended | 9 Months Ended | |||
|---|---|---|---|---|---|---|
|
Sep. 30, 2012
|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2012
|
Sep. 30, 2011
|
Dec. 31, 2011
|
|
| Notes to Financial Statements | ||||||
| Management Fee Percentage | 5.00% | 5.00% | 5.00% | |||
| Management Fee | $ 30,566 | $ 28,099 | $ 92,433 | $ 86,668 | ||
| Payable To Dahn | 312,247 | 312,247 | 312,247 | 312,906 | ||
| Tax Fee to General Partner | $ 4,221 | $ 37,989 | $ 12,664 | |||
|
Allocations of Profits and Losses
|
9 Months Ended |
|---|---|
|
Sep. 30, 2012
|
|
| Notes to Financial Statements | |
| Allocations of Profits and Losses |
Under the Agreement of Limited Partnership, the general partners are to be allocated 1% of the net profits or losses from operations, and the limited partners are to be allocated the balance of the net profits or losses from operations in proportion to their limited partnership interests. The general partners are also entitled to receive a percentage, based on a predetermined formula, of any cash distribution from the sale, other disposition, or refinancing of the project. In addition, the general partners are entitled to receive an incentive management fee for supervising the operations of the Partnership. The fee is to be paid in an amount equal to 9% per annum of the cash distributions to limited partners in the fund and the payment of such fee is subordinated to a cumulative return to the limited partners of 8.1% of the offering proceeds. |