-----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, Ssh1VzRYih9L1rmxeot5vawmyEw9upg4syrhwMlHGMSb8aUUGNtAZA1ddqI+oP+c 6beYGZF8Q4tDtCE32OlFBA== 0000912057-96-025625.txt : 19961113 0000912057-96-025625.hdr.sgml : 19961113 ACCESSION NUMBER: 0000912057-96-025625 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961112 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: KEYSTONE MORTGAGE FUND CENTRAL INDEX KEY: 0000793038 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189] IRS NUMBER: 953786580 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14562 FILM NUMBER: 96658990 BUSINESS ADDRESS: STREET 1: 11340 W OLYMPIC BLVD STREET 2: STE 300 CITY: LOS ANGELES STATE: CA ZIP: 90064 BUSINESS PHONE: 2134794121 MAIL ADDRESS: STREET 1: 11340 W OLYMPIC BLVD STREET 2: SUITE 300 CITY: LOS ANGELES STATE: CA ZIP: 90064 10-Q 1 FORM 10-Q - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ------------------------ FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR QUARTER ENDED COMMISSION FILE NUMBER SEPTEMBER 30, 1996 0-14562 -------------------------- KEYSTONE MORTGAGE FUND (Exact name of registrant as specified in its charter.) CALIFORNIA 95-3786580 (State of Incorporation) (I.R.S. Employer Identification No.) 11340 W. OLYMPIC BOULEVARD SUITE 300 LOS ANGELES, CALIFORNIA 90064-1661 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (310) 479-4121 ------------------------ Indicated by check mark whether the registrant (1) has filed all report required to be filed by Section 13 of 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 --- --- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- KEYSTONE MORTGAGE FUND INDEX
PAGE ------ PART I. FINANCIAL INFORMATION Item 1. Financial Statements. (a) Condensed Balance Sheets, December 31, 1995 and September 30, 1996. . . . . . . . . . . . . . . . . . . . . .3 (b) Condensed Statements of Income, three and nine months ended, September 30, 1996 and 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4 (c) Condensed Statements of Partners' Capital (Deficit) for the year ended December 31, 1995 and the nine months ended September 30, 1996. . . . . . . . . . . . . . . . . . . . . . . .5 (d) Condensed Statements of Cash Flows, nine months ended September 30, 1996 and 1995. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6 (e) Notes to condensed financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 & 8 Item 2. Management's discussion and analysis of financial condition and results of operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 PART II. OTHER INFORMATION Item 6. Exhibits and reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 & 11
2 KEYSTONE MORTGAGE FUND, A CALIFORNIA LIMITED PARTNERSHIP BALANCE SHEETS ASSETS
(UNAUDITED) *DECEMBER 31 SEPTEMBER 30 1995 1996 ------------------------------ Current assets: Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 157,848 $ 10,949 Short-term investments (market value of $1,775,183 in 1995 and $2,189,566 in 1996). . . . . . . . . . . . . . . . . . . . . . . . . . 1,772,598 2,153,171 Interest receivable on trust deed notes receivable . . . . . . . . . . . . . . 8,917 8,833 Other receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,000 35,000 Current portion of trust deed notes receivable (note B). . . . . . . . . . . . 11,894 11,986 ------------------------------ Total current assets. . . . . . . . . . . . . . . . . . . . . . . . . . . 1,986,257 2,219,939 Investment in real estate, net . . . . . . . . . . . . . . . . . . . . . . . . . . 1,102,804 932,971 Trust deed notes receivable, net (note B). . . . . . . . . . . . . . . . . . . . . 1,017,476 1,008,446 ------------------------------ $4,106,537 $4,161,356 ------------------------------ ------------------------------ LIABILITIES AND PARTNERS' CAPITAL Current Liabilities: Accounts payable and other liabilities . . . . . . . . . . . . . . . . . . . . $ 429 $ 424 Due general partner. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 270,000 277,500 ------------------------------ Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . 270,429 277,924 Partners' capital: General Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,031 24,890 Limited partners - authorized 20,000 units, outstanding 13,272 units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,813,077 3,858,542 ------------------------------ 3,836,108 3,883,432 ------------------------------ $4,106,537 $4,161,356 ------------------------------ ------------------------------
See accompanying notes to financial statements. *Extracted from audited December 31, 1995 financial statements. 3 KEYSTONE MORTGAGE FUND, A CALIFORNIA LIMITED PARTNERSHIP CONDENSED STATEMENTS OF INCOME (UNAUDITED)
Nine Months Ended Three Months Ended September 30 September 30 1995 1996 1995 1996 -------------------- -------------------- Revenue: Interest on mortgage loans . . . . . . . . . . . . . . . . . . . $118,419 $ 80,664 $ 40,901 $ 26,804 Interest on short-term investments . . . . . . . . . . . . . . . 78,068 55,751 14,274 3,472 Rental and other revenue from investment in real estate. . . . . 139,624 144,446 25,420 31,276 Gain on sale of real estate. . . . . . . . . . . . . . . . . . . 82,235 82,235 --------- -------- -------- -------- 336,111 363,096 80,595 143,787 Expenses: Servicing related expenses . . . . . . . . . . . . . . . . . . . 39,978 45,504 7,900 2,020 Administrative and general expenses. . . . . . . . . . . . . . . 275,661 11,863 5,139 5,483 Expenses related to real estate acquired in settlement of loans . . . . . . . . . . . . . . . . . . . . . . 109,303 119,871 19,032 35,533 --------- -------- -------- -------- 424,942 177,238 32,071 43,036 --------- -------- -------- -------- NET INCOME (LOSS). . . . . . . . . . . . . . . . . . . . $(88,831) $185,858 $ 48,524 $100,751 --------- -------- -------- -------- --------- -------- -------- -------- Weighted average number of limited partnership units outstanding . . . . . . . . . . . . . . 13,272 13,272 13,272 13,272 --------- -------- -------- -------- --------- -------- -------- -------- Net income per limited partnership unit. . . . . . . . . . . . . . . $ (6.69) $ 14.00 $ 3.66 $ 7.59 --------- -------- -------- -------- --------- -------- -------- --------
See notes to financial statements 4 KEYSTONE MORTGAGE FUND, A CALIFORNIA LIMITED PARTNERSHIP STATEMENTS OF PARTNER'S CAPITAL GENERAL LIMITED PARTNERS PARTNERS TOTAL -------- -------- ----- Balance at December 31, 1995............$ 23,031 $3,813,077 $3,836,108 Net income nine months ended September 30, 1996............. 1,859 183,999 185,858 Distributions........................... (138,534) (138,534) --------------------------------------- Balance as of September 30, 1996........$ 24,890 $3,858,542 $3,883,432 ---------- ---------- ---------- ---------- ---------- ---------- 5 KEYSTONE MORTGAGE FUND, A CALIFORNIA LIMITED PARTNERSHIP STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30 1996 1995 -------------------------- OPERATING ACTIVITIES: Net Income (loss). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 185,858 $ (88,831) Changes in operating assets & liabilities: Depreciation expense from investment in real estate . . . . . . . . . . . . . . 37,461 39,700 Amortization of net origination fees. . . . . . . . . . . . . . . . . . . . . . (825) (775) Decrease in interest and account receivable . . . . . . . . . . . . . . . . . . 84 5,227 Decrease in accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . (5) (1,296) Increase in due general partners. . . . . . . . . . . . . . . . . . . . . . . . 7,500 267,500 --------- --------- NET CASH PROVIDED BY OPERATING ACTIVITIES. . . . . . . . . . . . . . . 230,073 221,525 INVESTING ACTIVITIES: Decrease in trust deed receivable. . . . . . . . . . . . . . . . . . . . . . . . . . 9,763 29,032 Increase in short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . (380,573) (183,097) Decrease in investment in real estate. . . . . . . . . . . . . . . . . . . . . . . . 132,372 FINANCING ACTIVITIES: Distributions and withdrawals. . . . . . . . . . . . . . . . . . . . . . . . . . . . (138,534) (154,396) --------- --------- Decrease in cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . (146,899) (86,936) Cash and cash equivalents at beginning of year . . . . . . . . . . . . . . . . . . . 157,848 97,409 --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD . . . . . . . . . . . . . . $ 10,949 $ 10,473 --------- --------- --------- ---------
See notes to financial statements 6 KEYSTONE MORTGAGE FUND, A CALIFORNIA LIMITED PARTNERSHIP NOTES TO CONDENSED FINANCIAL STATEMENTS NOTE A - UNAUDITED BASIS OF PRESENTATION The accompanying unaudited condensed financial statements have been prepared by Keystone Mortgage Fund in accordance with generally accepted accounting principles, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the accompanying condensed financial statements contain all adjustments necessary, which were of normal recurring nature, for a fair statement of the results for the interim periods presented. It is suggested that these condensed financial statements be read in conjunction with the financial statements and the notes thereto included in Form 10-K for the year ended December 31, 1995 filed by the Company under the Securities Exchange Act of 1934. 7 KEYSTONE MORTGAGE FUND, A CALIFORNIA LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS (CONTINUED) (B) TRUST DEED NOTES RECEIVABLE
MONTHLY PAYMENT, INCLUDING DECEMBER 31 SEPTEMBER 30 INTEREST 1995 1996 -------- ---- ---- First trust deed on an office/warehouse/light industrial building, interest rate of 10.375%, due November 1, 1997..................... $9,965 $1,031,390 $1,021,627 -------- -------- Less net deferred loan origination fees........................................... 2,020 1,195 Less Current portion.............................................................. 11,894 11,986 ---------- ---------- $1,017,476 $1,008,446 ---------- ---------- ---------- ----------
8 KEYSTONE MORTGAGE FUND, A CALIFORNIA LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS (CONTINUED) ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Total revenues for the nine months ended September 30, 1996 increased $26,985 or 8.1% over the comparable 1995 period. Total revenues for the three months ended September 30, 1996 increased 78.1% compared to the same period ending September 30, 1995. During the quarter ending September 30, 1996 one of the real estate units owned by The Partnership was sold resulting in a gain of $82,235. Cash flow from principal payments have been distributed to the limited partners less required reserves. These amounts represent return of capital which has caused the decrease in income producing assets over the past few years. Servicing related expenses increased 13.8% for the nine months and decreased 74.4% for the three months ended September 30, 1996 over the comparable periods ended September 30, 1995. General and administrative expenses decreased $263,799 for the nine months and increased 6.7% for the three months ended September 30, 1996 over the comparable periods ended September 30, 1995. During the first quarter of 1995, a determination was made by the general partners to seek reimbursement for which they were otherwise entitled. The amount of general and administrative expenses were determined to be $265,000 at June 30, 1995. Expenses related to real estate acquired in settlement of loans increased 9.7% for the nine months ended September 30, 1996 and increased 86.7% for the three months ended September 30, 1996 over the comparable period ended September 30, 1995. Net income for the nine months and the three months ended September 30, 1996 increased $274,690 for the nine months and increased 107.6% for the three months over the same periods September 1995. The Partnership's working capital increased by $226,187 during the nine months ended September 30, 1995. The Partnership has adequate working capital and cash reserves to carry on its business. The Partnership continues to distribute to the Limited Partners principal repayments (less required reserves). 9 PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) The Registrant filed no reports on Form 8-K during the quarter ended September 30, 1996. 10 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. KEYSTONE MORTGAGE FUND a California Limited Partnership Date: November 12, 1996 /s/ JOHN P. SULLIVAN ---------------------------------- Keystone Mortgage Company By: John P. Sullivan, President Date: November 12, 1996 /s/ JOHN P. SULLIVAN ---------------------------------- John P. Sullivan General Partner Date: November 12, 1996 /s/ CHRISTOPHER E. TURNER ---------------------------------- Christopher E. Turner General Partner 11 EX-27 2 EXHIBIT 27
5 9-MOS DEC-31-1995 SEP-30-1996 SEP-30-1996 10,949 2,153,171 988,790 0 0 2,219,939 1,104,880 171,909 4,161,396 277,924 0 0 0 0 3,883,432 4,161,356 0 363,096 0 0 177,238 0 0 185,858 0 185,858 0 0 0 185,858 0 0
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