-----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, FOalWZKzSPiKUH8LNdNDQ9GnVISjWXdDDFblVY5lJYpxXqbyUjhsUks/BgdCwZ4A TBXhSID1QWnPC99eswwLhA== 0000799179-96-000013.txt : 19961106 0000799179-96-000013.hdr.sgml : 19961106 ACCESSION NUMBER: 0000799179-96-000013 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961105 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: LEASTEC INCOME FUND IV CENTRAL INDEX KEY: 0000799179 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER RENTAL & LEASING [7377] IRS NUMBER: 680100223 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 033-08115 FILM NUMBER: 96654253 BUSINESS ADDRESS: STREET 1: 2855 MITCHELL DR STE 215 CITY: WALNUT CREEK STATE: CA ZIP: 94598 BUSINESS PHONE: 4159383443 MAIL ADDRESS: STREET 1: 2855 MITCHELL DRIVE SUITE 215 STREET 2: 2855 MITCHELL DRIVE SUITE 215 CITY: WALNUT CREEK STATE: CA ZIP: 94598 10-Q 1 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 September 30, 1996 Commission file number 338115 Leastec Income Fund IV A California Limited Partnership (Exact name of registrant as specified in its charter) California 68-0100223 (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 IV A California Limited Partnership CONDENSED BALANCE SHEETS (Unaudited)
September 30 December 31 1996 1995 ------ -------- ASSETS: Cash $ 584,270 $ 1,129,581 Accounts receivable 0 61,845 Net investment in direct financing leases 85,435 733,873 -------- ---------- Total assets $ 669,705 $ 1,925,299 ======== ========== LIABILITIES AND PARTNERS' CAPITAL: Liabilities: Payables to affiliates $ 0 $ 2,872 Accounts payable 63,702 69,823 Deposits 11,792 150,246 Prepaid rental income 0 33,801 Distributions payable 105,263 631,580 -------- --------- Total liabilities 180,757 888,322 -------- --------- Partners' capital: Partners' capital 488,948 1,036,977 -------- ---------- Total partners' capital 488,948 1,036,977 -------- ---------- Total liabilities & partners' capital $ 669,705 $1,925,299 ======== ========= The accompanying notes are an integral part of these condensed financial statements.
3 LEASTEC INCOME FUND IV A California Limited Partnership CONDENSED STATEMENTS OF INCOME (Unaudited)
Nine Months Quarter Ended Ended September 30 September 30 1996 1995 1996 1995 ------ ----- ------ ------ Revenue: Rental income $ 173,875 267,341 116,057 110,844 Direct financing lease income 55,110 336,386 35,745 33,962 Gain (loss) on sale of equipment 63,408 54,313 63,408 0 Interest income 8,665 20,332 6,577 6,807 Other income 42,472 641,486 42,472 45,457 -------- --------- ------- ------- Total revenues 343,530 1,319,858 264,259 197,070 -------- --------- ------- ------- Expenses: Management fees 53,994 230,408 35,932 37,616 General & administrative 136,019 151,168 149,399 49,740 Data processing 17,759 25,246 11,407 6,487 lnterest expense 2,153 30,192 1,552 1,080 ------- -------- ------- ------- Total expenses 209,925 437,014 198,290 94,923 -------- -------- ------- ------- Net Income $ 133,605 882,844 65,969 102,147 ======== ======== ======= ======= Net income per limited partnership unit $ 1.24 $ 8.23 $ 0.61 $ .95 ======== ======== ======= ======= The accompanying notes are an integral part of these condensed financial statements.
4 LEASTEC INCOME FUND IV A California Limited Partnership STATEMENTS OF CASH FLOWS (Unaudited)
Nine Months Ended September 30 1996 1995 ____ ____ Cash flows from operating activities: Net income $ 133,605 882,844 Adjustments to reconcile net income to net cash provided by operating activities: Gain on disposition of equipment (63,408) (54,313) Change in assets and liabilities: Decrease in accounts receivable 61,845 28,219 Decrease in payable to affiliates (2,872) (23,476) Decrease in accounts payable (6,121) (83,446) Decrease in deposits (138,454) (200,012) (Decrease) increase in prepaid rental income (33,801) 8,336 (Decrease) increase in distributions payable (526,317) 5,268 --------- -------- Net cash (used) provided by operating activities (575,523) 563,420 --------- -------- Cash flows from investing activities: Proceeds from disposition of equipment 63,408 51,445 Proceeds from sale of direct financing leases 0 155,620 Decrease in net investment in direct financing leases 640,488 2,105,406 --------- ---------- Net cash provided by investing activities 703,896 2,312,471 --------- ---------- Cash flows from financing activities: Repayment of notes payable 0 (305,610) Net distributions to partners (673,684) (2,500,000) --------- ---------- Net cash used in financing activities (673,684) (2,805,610) --------- ---------- Net (decrease) increase in cash (545,311) 70,281 Cash at beginning of period 1,129,581 928,298 --------- ---------- Cash at end of period $ 584,270 $ 998,579 ========= ========== The accompanying notes are an integral part of these condensed financial statements.
5 LEASTEC INCOME FUND IV A California Limited Partnership NOTES TO CONDENSED FINANCIAL STATEMENTS September 30, 1996, September 30, 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 IV (the Partnership) as of September 30, 1996, September 30, 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 ten 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 tenth full year of operation, December 1996. 6 LEASTEC INCOME FUND IV 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 will be fully liquidated by December 31, 1996. In order to complete the liquidation of all assets by the end of 1996, it is the General Partner's policy to allow the early termination of leases when requested, as well as to seek the sale of leased assets in which the lease may extend beyond December 1996. This is the Registrant's final year of operation. The majority of the Registrant's operating leases have terminated. The remaining leases were fully depreciated in the first half of 1995. 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 of the Registrant is rapidly declining as the lease portfolio size declines. The cash balances and related interest income fluctuates according to the cash flow from rents and finance lease termination payments during each quarter. Cash is distributed to the Partners according to their respective tax basis capital accounts. The Partners will have a loss of capital because of shortfalls in portfolio performance and a difficult economic environment during the life of the Partnership. The previous filing anticipated a return of original investment of approximately 70%. The percentage of capital returned will vary according to the following factors: a) the timing of the original investment and b) the decision of the Partner to receive or reinvest distributions during the Partnership's operating phase. Those Partner's that chose to reinvest acquired a larger percentage basis ownership in the Partnership and thereby, a larger share of the loss and lower return of original investment. With the close of the Partnership all of the Partner's taxable losses may be applied against their taxable income. The Registrant reported a net income of $133,605 or $1.24 per Limited Partnership Unit for the nine months ended September 30, 1996 as compared to net income of $882,844 or $8.23 per Limited Partnership Unit for the nine months ended September 30, 1995. This reflects a gain on the sale of the final operating lease equipment of $63,408. Total revenues for the nine months ended September 30, 1996, were $343,530 compared to $1,319,858 for the same period in the prior year. This decrease reflects a reduced rental income from both operating and finance leases due to the rapid liquidation of the Registrant's lease portfolio. Revenue derived from the Fund's equipment management activities comprised 97% of the total income for the period, with the remaining 3% being interest income. Direct financing lease income decreased from September 30, 1995, to September 30, 1996, ($336,386 to $55,110 respectively). The net investment in direct financing leases decreased from $1,453,233 at September 30, 1995, to $85,435 at September 30, 1996. Interest income decreased because the Registrant held lower cash balances due to distributions to Partners and lease termination's during the first nine 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 nine months ended September 30, 1996, were $209,925 compared to $437,014 for the same period in the prior year. Management fees, interest, and general and administrative costs comprised 92% of the total expenses. Interest expense decreased from September 30, 1995, to September 30, 1996, ($30,192 to $2,153 respectively). General and administrative costs decreased from $151,168 for the first nine months of 1995 to $136,019 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 the Partnership Agreement's requirements for Regulatory and Partner reporting which will continue at their current level until the Registrant's final close of operations. Liquidity and Capital Resources _______________________________ Cash used by operating activities for the nine months ended September 30, 1996, was $575,523 compared to cash provided of $563,420 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 and decreases in distributions payable to Partners. Cash provided by investing activities decreased from $2,312,471 in the first three quarters of 1995 to $703,896 for the first three quarters of 1996, reflecting the lack of sales from the remaining operating lease equipment in the first three quarters of 1996, lease terminations 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 $305,610 in the first nine months of 1995 compared to $-0- for the same period in 1996. As of September 30, 1996, the Fund's partners were allocated cash distributions of $105,263 payable on October 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 decrease during the remainder 1996. The cash balance increased from $928,298 at December 31, 1994, to $998,579 at September 30, 1995, and decreased from $1,129,581 at December 31, 1995, to $584,270 at September 30, 1996. The cash position as of September 30, 1996, was $584,270. 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 IV (Registrant) LEASTEC CORPORATION, General Partner Date: November 4, 1996 By: _____________________________ Ernest V. Lavagetto, President EX-27 2 ARTICLE 5 FINANCIAL DATA SCHEDULE FOR 3RD QTR 10-Q
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 9-MOS DEC-31-1996 JAN-01-1996 SEP-30-1996 584,270 0 85,435 0 0 669,705 0 0 669,705 180,757 0 0 0 0 488,948 669,705 343,530 343,530 0 0 207,772 0 2,153 133,605 0 0 0 0 0 133,605 1.24 1.24 -----END PRIVACY-ENHANCED MESSAGE-----