-----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, Ka5E0dGEGJO2mq567muaakKfGQNbtBGpwtc748RPgr0d5NI1ABXsWxi6i6OupmAC MLf03yJw7Q38S8N4UKBrjw== 0000812187-96-000001.txt : 19960318 0000812187-96-000001.hdr.sgml : 19960318 ACCESSION NUMBER: 0000812187-96-000001 CONFORMED SUBMISSION TYPE: 10KSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960315 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ANGELES PARTNERS 16 CENTRAL INDEX KEY: 0000812187 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 954106417 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10KSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-16209 FILM NUMBER: 96535053 BUSINESS ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLZ STREET 2: PO BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 BUSINESS PHONE: 8032391000 MAIL ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLAZA STREET 2: P.O. BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 10KSB 1 U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-KSB (Mark One) X ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 [FEE REQUIRED] For the fiscal year ended December 31, 1995 TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the transition period from to Commission file number 0-16209 ANGELES PARTNERS 16 California 95-4106417 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) One Insignia Financial Plaza, P.O. Box 1089 Greenville, South Carolina 29602 (Address of principal executive offices) (Zip Code) Issuer's telephone number (864) 239-1000 Securities registered under Section 12(b) of the Exchange Act: None Securities registered under Section 12(g) of the Exchange Act: Limited Partnership Units (Title of class) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be contained, to the best of Registrant's knowledge in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. X State issuer's revenues for its most recent fiscal year. $2,929,190 State the aggregate market value of the voting stock held by nonaffiliates of the Registrant. The aggregate market value shall be computed by reference to the price at which the stock was sold, or the average bid and asked prices of such stock, as of a specified date within the past 60 days. Market value information for Registrant's Partnership Interests is not available. Should a trading market develop for these Interests, it is the General Partner's belief that such trading would not exceed $25 million. DOCUMENTS INCORPORATED BY REFERENCE None PART I Item 1. Description of Business Angeles Partners 16 (the "Partnership" or "Registrant") is a publicly-held limited partnership organized under the California Uniform Limited Partnership Act pursuant to the Certificate and Restated Agreement of Limited Partnership - (the "Agreement") dated March 24, 1987. The Partnership's General Partner is Angeles Realty Corporation II, a California corporation ("General Partner" or "ARC II"). The Partnership, through its public offering of Limited Partnership Units, sold 14,050 units aggregating $14,050,000. The General Partner contributed capital in the amount of $1,000 for a 1% interest in the Partnership. The Partnership was formed for the purpose of acquiring fee interests in various types of real property. The Partnership presently owns two investment properties. The General Partner of the Partnership intends to maximize the operating results and, ultimately, the net realizable value of each of the Partnership's properties in order to achieve the best possible return for the investors. Such results may best be achieved through property sales, refinancings, debt restructurings or relinquishment of the assets. The Partnership intends to evaluate each of its holdings periodically to determine the most appropriate strategy for each of the assets. The Partnership has no full time employees. The General Partner is vested with full authority as to the general management and supervision of the business and affairs of the Partnership. Limited Partners have no right to participate in the management or conduct of such business and affairs. Insignia Management Group, L.P. provides day-to-day property management services to all of the Partnership's investment properties. The business in which the Partnership is engaged is highly competitive, and the Partnership is not a significant factor in its industry. Each investment property is located in or near a major urban area and, accordingly, competes for rentals not only with similar properties in its immediate area but with hundreds of similar properties throughout the urban area. Such competition is primarily on the basis of location, rents, services and amenities. In addition, the Partnership competes with significant numbers of individuals and organizations (including similar partnerships, real estate investment trusts and financial institutions) with respect to the sale of improved real properties, primarily on the basis of the prices and terms of such transactions. Item 2. Description of Properties: The following table sets forth the Registrant's investment in properties:
Date of Property Purchase Type of Ownership Use Whispering Pines Apartments 06/30/89 Fee ownership subject Residential to first trust deed Rental 136 units Silver Ridge Apartments 12/29/87 Fee ownership subject Residential to first mortgage Rental bond payable and 186 units second trust deed
On June 12, 1995, the Partnership sold one of its investment properties, North Prior Industrial Park, to an unrelated third party (See "Item 6. Management's Discussion and Analysis or Plan of Operation" for further details). Schedule of Properties:
Gross Carrying Accumulated Federal Property Value Depreciation Rate Method Tax Basis Whispering Pines $ 5,421,316 $ 1,167,540 5-40 yrs S/L $ 5,086,656 Apartments Silver Ridge 6,263,460 1,838,655 5-40 yrs S/L 5,416,108 Apartments Total $11,684,776 $ 3,006,195 $10,502,764
See "Note B" of the financial statements included in "Item 7." for a description of the Partnership's depreciation policy. Schedule of Mortgages:
Principal Principal Balance At Stated Balance December 31, Interest Period Maturity Due At Property/Partnership 1995 Rate Amortized Date Maturity Whispering Pines Apartments 1st trust deed $ 4,394,232 (2) 30 yrs Jan. 1997 $ 4,310,612 Silver Ridge Apartments 1st mortgage bond payable 4,525,000 (3) (1) July 2023 4,525,000 2nd trust deed 375,000 10.00% (1) Dec. 1997 375,000 Angeles Partners 16 Note payable, in default (5) 859,527 12.50% (1) June 1997 859,527 Note payable, in default (5) 1,205,624 12.25% (1) June 1996 1,205,624 Working capital loan (6) 1,516,789 (4) (1) Nov. 1997 1,516,789 Total $12,876,172 $12,792,552 (1) Interest payments only. (2) 11th District Federal Home Loan Bank Board base rate plus 2.25%. (3) Variable rate not to exceed 12%. (4) Prime rate plus 2%, payable only from available cash flow, as defined. (5) Payable to Angeles Mortgage Investment Trust. (6) Payable to Angeles Acceptance Pool, L.P.
Average annual rental rate and occupancy for 1995 and 1994 for each property: Average Annual Average Annual Rental Rates Occupancy Property 1995 1994 1995 1994 Whispering Pines Apartments $7,727/unit $7,481/unit 92% 98% Silver Ridge Apartments $7,625/unit $7,630/unit 95% 92% The occupancy at Whispering Pines Apartments decreased due to increased home sales in the area. New home construction and low interest rates for home buyers has made renting less appealing and thereby decreased occupancy. As noted under "Item 1. Description of Business," the real estate industry is highly competitive. All of the properties of the Partnership are subject to competition from other residential apartment complexes in the area. The General Partner believes that all of the properties are adequately insured. The multi- family residential properties' lease terms are for one year or less. No residential tenant leases 10% or more of the available rental space. Real estate taxes and rates in 1995 for each property were: 1995 1995 Billing Rate Whispering Pines $166,903 3.15% Silver Ridge 265,195* 5.30% *Amount per 1994 billings; tax bills for 1995 not yet received. Item 3. Legal Proceedings In January 1993, a local fuel oil distributor pumped fuel oil into a testing well instead of into the storage tank at North Prior Industrial Park. The Partnership notified the necessary authorities and engaged an environmental engineering firm to develop a plan of action to clean up the site. The cost of the clean up, which is not covered by insurance, is estimated to be approximately $900,000 over a five year period. A liability has been recorded to cover the estimated costs to clean-up the site and the funds have been set aside in an escrow account. The Partnership entered into an Environmental Undertaking and Indemnity Agreement with the buyer of the property limiting the Partnership's liability with regard to the clean up of this site to the balance of the escrow account. This agreement will terminate when the Partnership receives a "Site Closure Letter" from the Minnesota Pollution and Control Agency. Upon receipt of this letter, any remaining funds in the escrow account will be used to pay down Partnership debt to Angeles Mortgage Investment Trust ("AMIT"). In January 1995, the holder of the first mortgage, along with the former receiver, initiated two separate lawsuits against the Partnership, among others, for damages sustained as a result of the above. In June 1995 the suit with the former holder of the first mortgage was dismissed. During November 1995, the Partnership was removed as the defendant and became the Plaintiff in the lawsuit initiated by the former receiver in a suit filed against the fuel distributor, among others. The former receiver was removed as Plaintiff in the suit due to it no longer being a party-in-interest. AMIT, a real estate investment trust, made a loan to the Partnership in October 1992 in the amount of $1,879,804, secured by the Partnership's real property known as North Prior Industrial Park, on a non-recourse basis. The current principal balance as of December 31, 1995, is $1,205,624. The Partnership believed that the loan was a non-recourse obligation. AMIT has asserted that the loan is recourse by virtue of a certain amendment purportedly entered into as of November 1, 1992, but which the Partnership has been informed and believes was actually executed in December 1992 ("Note Modification"). The Partnership has been further informed and believes that the amendment may have been executed at the direction of Angeles Corporation ("Angeles") by an individual in his purported capacity as an officer of the General Partner of the Partnership at a time when such person was not in fact an officer of such entity. Accordingly, the Partnership filed a Proof of Claim in the Angeles bankruptcy proceeding with respect to such purported amendment. Additionally, the Partnership filed a Proof of Claim in the Angeles Funding Corporation and Angeles Real Estate Corporation bankruptcy proceedings on similar grounds. Both Angeles Funding Corporation and Angeles Real Estate Corporation are affiliates of Angeles. Subsequently, the Partnership determined that the original note agreement was in fact recourse and, therefore, the Partnership's Proofs of Claim were withdrawn. MAE GP Corporation ("MAE GP"), an affiliate of the General Partner, owns 1,675,113 Class B Shares of AMIT. MAE GP has the option to convert these Class B Shares, in whole or in part, into Class A Shares on the basis of 1 Class A Share for every 49 Class B Shares. These Class B Shares entitle MAE GP to receive 1.2% of the distributions of net cash distributed by AMIT. These Class B Shares also entitle MAE GP to vote on the same basis as Class A Shares which allows MAE GP to vote approximately 37% of the total shares (unless and until converted to Class A Shares at which time the percentage of the vote controlled represented by the shares held by MAE GP would approximate 1.2% of the vote). Between the date of acquisition of these shares (November 24, 1992) and March 31, 1995, MAE GP declined to vote these shares. Since that date, MAE GP voted its shares at the 1995 annual meeting in connection with the election of trustees and other matters. MAE GP has not exerted, and continues to decline to exert, any management control over or participate in the management of AMIT. MAE GP may choose to vote these shares as it deems appropriate in the future. In addition, Liquidity Assistance, LLC, ("LAC"), an affiliate of the General Partner and an affiliate of Insignia Financial Group, Inc., which provides property management and partnership administration services to the Partnership, owns 63,200 Class A Shares of AMIT. These Class A Shares entitle LAC to vote approximately 1.5% of the total shares. As part of a settlement of certain disputes with AMIT, MAE GP granted to AMIT an option to acquire the Class B Shares owned by it. This option can be exercised at the end of 10 years or when all loans made by AMIT to partnerships affiliated with MAE GP as of November 9, 1994, (which is the date of execution of a definitive Settlement Agreement) have been paid in full, but in no event prior to November 9, 1997. AMIT delivered to MAE GP cash in the sum of $250,000 at closing, which occurred April 14, 1995, as payment for the option. Upon exercise of the option, AMIT would remit to MAE GP an additional $94,000. Simultaneously with the execution of the option, MAE GP executed an irrevocable proxy in favor of AMIT the result of which is MAE GP will be able to vote the Class B Shares on all matters except those involving transactions between AMIT and MAE GP affiliated borrowers or the election of any MAE GP affiliate as an officer or trustee of AMIT. On those matters, MAE GP granted to the AMIT trustees, in their capacity as trustees of AMIT, proxies with regard to the Class B Shares instructing such trustees to vote said Class B Shares in accordance with the vote of the majority of the Class A Shares voting to be determined without consideration of the votes of "Excess Class A Shares" as defined in Section 6.13 of the Declaration of Trust of AMIT. The Registrant is unaware of any other pending or outstanding litigation that is not of a routine nature. The General Partner of the Registrant believes that all such pending or outstanding litigation will be resolved without a material adverse effect upon the business, financial condition, or operations of the Partnership. Item 4. Submission of Matters to a Vote of Security Holders The Unit holders of the Registrant did not vote on any matter during the fiscal year covered by this report. PART II Item 5. Market for the Partnership's Common Equity and Related Security Holder Matters The Partnership, a publicly-held limited partnership, sold 14,050 Limited Partnership Units aggregating $14,050,000 during its offering period through December 30, 1988, and currently has 14,033 Limited Partnership Units outstanding and 1,471 Limited Partners of record. There is no intention to sell additional Limited Partnership Units nor is there an established market for these units. The Partnership has discontinued making cash distributions from operations until and unless the financial condition and other relevant factors warrant resumption of distributions. Item 6. Management's Discussion and Analysis or Plan of Operation This item should be read in conjunction with the consolidated financial statements and other items contained elsewhere in this report. Results of Operations The Partnership realized a net loss of $694,457 for the year ended December 31, 1995, versus a net loss of $393,769 for the year ended December 31, 1994. The increase in the net loss for the year ended December 31, 1995, as compared to the year ended December 31, 1994, is due to the accrual of $746,488 in 1995 for additional estimated costs associated with the environmental clean up of North Prior Industrial Park (See Note G for additional information). Partially offsetting this expense is the gain recognized on the sale of North Prior Industrial Park on June 12, 1995 (See discussion below). Rental income decreased for the year ended December 31, 1995, as compared to the year ended December 31, 1994, due to the sale of North Prior Industrial Park on June 12, 1995, resulting in the loss of rental revenue relating to this property. Also contributing to the decrease in rental income was the decrease in occupancy at Whispering Pines Apartments. Other income increased due to an increase in corporate units revenue at Silver Ridge Apartments. Operating expenses for the year ended December 31, 1995, versus the year ended December 31, 1994, increased due to the additional estimated clean up costs at North Prior Industrial Park, as discussed above, along with increased advertising at Whispering Pines Apartments in an effort to increase occupancy. This increase was partially offset by the overall decrease in operating expenses due to the sale of North Prior Industrial Park during 1995 (See discussion below). General and administrative expenses decreased for the year ended December 31, 1995, as compared to the year ended December 31, 1994, primarily due to decreased cost reimbursements for partnership accounting, asset management and investor services. The decrease in property management fees for the year ended December 31, 1995, as compared to the year ended December 31, 1994, is attributable to the decrease in rental income, as such fees are based on revenue. Depreciation expense decreased for the year ended December 31, 1995, versus the year ended December 31, 1994, primarily due to the sale of North Prior Industrial Park. Interest expense also decreased for the year ended December 31, 1995, as compared to the year ended December 31, 1994, due to the sale of North Prior Industrial Park. This decrease was partially offset by increases in interest expense at Whispering Pines Apartments and Silver Ridge Apartments due to rising interest rates on the variable rate mortgages secured by these properties. Property tax expense decreased for the year ended December 31, 1995, as compared to the year ended December 31, 1994, due to lower property taxes at North Prior Industrial Park along with the sale of the property. The bad debt recovery for the year ended December 31, 1995, and December 31, 1994, relates to past due amounts received from tenants of the North Prior Industrial Park that had previously been reserved. The bad debt expense for the year ended December 31, 1994, can be attributed to reserving accounts receivable at North Prior Industrial Park that were considered uncollectible. Tenant reimbursements decreased for the year ended December 31, 1995, versus the year ended December 31, 1994, due to the sale of North Prior Industrial Park. On June 12, 1995, the Partnership sold one of its investment properties, North Prior Industrial Park, for $10,324,699, net of closing costs, to an unrelated third party. The net proceeds were used to pay the first mortgage and related accrued interest. Accrued interest of $56,203 related to the first mortgage was forgiven and is included as an extraordinary gain, and a gain of $1,009,521 was realized on the sale. As part of the ongoing business plan of the Partnership, the General Partner monitors the rental market environment of each of its investment properties to assess the feasibility of increasing rents, maintaining or increasing occupancy levels and protecting the Partnership from increases in expenses. As part of this plan, the General Partner attempts to protect the Partnership from the burden of inflation-related increases in expenses by increasing rents and maintaining a high overall occupancy level. However, due to changing market conditions, which can result in the use of rental concessions and rental reductions to offset softening market conditions, there is no guarantee that the General Partner will be able to sustain such a plan. Liquidity and Capital Resources The Partnership's primary source of cash is from the operations of its properties and from financing placed on such properties. Cash from these sources is utilized for property operations, capital improvements, and/or repayment of debt. At December 31, 1995, the Partnership had unrestricted cash of $405,772 as compared to $1,773,256 at December 31, 1994. Net cash used in operating activities increased primarily due to the increased net loss, and a decrease in accrued interest. Net cash provided by investing activities increased due to proceeds from the sale of North Prior Industrial Park. Net cash used in financing activities increased due to the repayment of notes payable relating to North Prior Industrial Park upon the sale of the property. The financial statements have been prepared assuming the Partnership will continue as a going concern. The Partnership has incurred recurring operating losses and continues to suffer from inadequate liquidity. In addition, there are limited identified capital resources available to the Partnership. As a result, the Partnership has not had cash available to perform the substantial rehabilitation necessary at each of the investment properties. The Partnership is in default on $2,065,151 of its indebtedness due to its inability to make interest and principal payments when due. The debt is unsecured debt of the Partnership payable to AMIT. The Partnership is presently paying non-debt related expenses of the properties, is current on its mortgages secured by its two remaining investment properties and is negotiating forbearance agreements with AMIT on the debt in default. As a result of the above conditions, there is substantial doubt about the Partnership's ability to continue as a going concern. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability or classification of assets or amounts or classification of liabilities that may result from these uncertainties. The sufficiency of existing liquid assets to meet future liquidity and capital expenditure requirements is directly related to the level of capital expenditures required at the properties to adequately maintain the physical assets and other operating needs of the Partnership. Such assets are currently thought to be sufficient for any near-term needs of the Partnership. The mortgage indebtedness of $12,876,172 consists of a first mortgage of $4,394,232, which is being amortized over 30 years and is due January 1997, a second trust deed and a working capital loan with principal balances of $375,000 and $1,516,789, respectively, (interest only) with maturity dates in November and December 1997, and a first mortgage bond payable in the principal amount of $4,525,000 (interest only) due July 2023. This Partnership also has unsecured debt to AMIT in the amount of $859,527 and $1,205,624 (interest only) with maturity dates of June 1997 and June 1996, respectively, which is in default. Future cash distributions will depend on the levels of net cash generated from operations, refinancings and property sales. At this time, the General Partner does not anticipate making a cash distribution during fiscal 1996. Item 7. Financial Statements ANGELES PARTNERS 16 LIST OF FINANCIAL STATEMENTS Independent Auditors' Report Balance Sheet - December 31, 1995 Statements of Operations - Years ended December 31, 1995 and 1994 Statements of Changes in Partners' Deficit - Years ended December 31, 1995 and 1994 Statements of Cash Flows - Years ended December 31, 1995 and 1994 Notes to Financial Statements Report of Ernst & Young LLP, Independent Auditors The Partners Angeles Partners 16 We have audited the accompanying balance sheet of Angeles Partners 16 as of December 31, 1995, and the related statements of operations, changes in partners' deficit and cash flows for each of the two years in the period ended December 31, 1995. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the Partnership's management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Angeles Partners 16 as of December 31, 1995, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 1995, in conformity with generally accepted accounting principles. The accompanying financial statements have been prepared assuming that Angeles Partners 16 will continue as a going concern. As more fully described in Note A, the Partnership has incurred recurring operating losses, is in default on certain loans and does not generate sufficient cash flows to meet current operating requirements. These conditions raise substantial doubt about the Partnership's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note A. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty. /S/ ERNST & YOUNG LLP Greenville, South Carolina March 8, 1996 ANGELES PARTNERS 16 BALANCE SHEET
December 31, 1995 Assets Cash and cash equivalents: Unrestricted $ 405,772 Restricted--tenant security deposits 63,369 Accounts receivable 139,499 Escrow for taxes 223,819 Restricted escrows (Note G) 1,372,675 Other assets 223,166 Investment properties (Notes C and F): Land $ 1,075,589 Buildings and related personal property 10,609,187 11,684,776 Less accumulated depreciation (3,006,195) 8,678,581 $11,106,881 Liabilities and Partners' Deficit Liabilities Accounts payable $ 39,608 Tenant security deposits 62,661 Accrued taxes 441,557 Accrued interest 1,625,944 Other liabilities (Note G) 1,191,877 Notes payable, including $2,065,151 in default (Notes C, E and F) 12,876,172 Partners' Deficit General partner $ (169,111) Limited partners (14,033 units issued and outstanding) (4,961,827) (5,130,938) $11,106,881 See Accompanying Notes to Financial Statements
ANGELES PARTNERS 16 STATEMENTS OF OPERATIONS Years Ended December 31, 1995 1994 Revenues: Rental income $ 2,719,634 $ 3,487,237 Other income 209,556 194,975 Total revenues 2,929,190 3,682,212 Expenses: Operating 1,621,640 1,039,487 General and administrative 183,030 199,571 Property management fees 140,280 190,528 Maintenance 274,672 264,145 Depreciation 472,626 664,279 Amortization 11,833 12,614 Interest 1,507,448 1,760,321 Property taxes 784,612 1,253,438 Bad debt expense -- 8,768 Bad debt recovery (4,226) (254,807) Tenant reimbursements (302,544) (1,062,363) Total expenses 4,689,371 4,075,981 Loss before gain on sale of investment property and extraordinary item (1,760,181) (393,769) Gain on sale of investment property (Note G) 1,009,521 -- Loss before extraordinary item (750,660) (393,769) Extraordinary item - gain on extinguishment of debt (Note G) 56,203 -- Net loss $ (694,457) $ (393,769) Net loss allocated to general partner (1%) $ (6,945) $ (3,938) Net loss allocated to limited partners (99%) (687,512) (389,831) Net loss $ (694,457) $ (393,769) Per limited partnership unit: Loss before extraordinary item $ (52.96) $ (27.78) Extraordinary item 3.97 -- Net loss $ (48.99) $ (27.78) See Accompanying Notes to Financial Statements ANGELES PARTNERS 16 STATEMENT OF CHANGES IN PARTNERS' DEFICIT
Limited Partnership General Limited Units Partner Partners Total Original capital contributions 14,050 $ 1,000 $14,050,000 $14,051,000 Partners' deficit at December 31, 1993 14,050 $(158,228) $(3,884,484) $(4,042,712) Abandoned Limited Partnership Units (Note H) (17) -- -- -- Net loss for the year ended December 31, 1994 -- (3,938) (389,831) (393,769) Partners' deficit at December 31, 1994 14,033 (162,166) (4,274,315) (4,436,481) Net loss for the year ended December 31, 1995 -- (6,945) (687,512) (694,457) Partners' deficit at December 31, 1995 14,033 $(169,111) $(4,961,827) $(5,130,938) See Accompanying Notes to Financial Statements
ANGELES PARTNERS 16 STATEMENTS OF CASH FLOWS
Years Ended December 31, 1995 1994 Cash flows from operating activities: Net loss $ (694,457) $ (393,769) Adjustments to reconcile net loss to net cash (used in) provided by operating activities: Depreciation 472,626 664,279 Amortization of loan costs and leasing commissions 29,550 41,300 Gain on sale of investment property (1,009,521) -- Bad debt expense -- 8,768 Extraordinary item - gain on extinguishment of debt (56,203) -- Change in accounts: Restricted cash 6,367 (6,298) Accounts receivable (143,532) (11,247) Escrows for taxes 84,387 (31,240) Other assets (50,240) (121,629) Accounts payable 11,775 (52,755) Tenant security deposit liabilities 4,675 (640) Accrued taxes 98,058 (276,969) Accrued interest (690,502) 1,260,870 Other liabilities 652,907 (82,119) Net cash (used in) provided by operating activities (1,284,110) 998,551 Cash flows from investing activities: Property improvements and replacements (312,100) (65,508) Proceeds from sale of investment property 10,324,699 -- Deposits to restricted escrows (1,496,210) (178,529) Withdrawals from restricted escrows 257,698 110,407 Net cash provided by (used in) investing activities 8,774,087 (133,630) Cash flows from financing activities: Repayment of notes payable (8,417,323) -- Payments on notes payable (440,138) (74,784) Net cash used in financing activities (8,857,461) (74,784) Net (decrease) increase in cash (1,367,484) 790,137 Cash and cash equivalents at beginning of period 1,773,256 983,119 Cash and cash equivalents at end of period $ 405,772 $1,773,256 Supplemental disclosure of cash flow information: Cash paid for interest $ 2,180,234 $ 470,765 See Accompanying Notes to Financial Statements
ANGELES PARTNERS 16 Notes to Financial Statements December 31, 1995 Note A - Going Concern The financial statements have been prepared assuming the Partnership will continue as a going concern. The Partnership has incurred recurring operating losses and continues to suffer from inadequate liquidity. In addition, there are limited identified capital resources available to the Partnership. As a result, the Partnership has not had cash available to perform the substantial rehabilitation necessary at each of the investment properties. The Partnership is in default on $2,065,151 of its indebtedness, plus related accrued interest of $1,147,854, due to its inability to make interest and principal payments when due. The debt is unsecured debt of the Partnership payable to Angeles Mortgage Investment Trust ("AMIT") (See Note E). The Partnership is presently paying non-debt related expenses of the properties, is current on its mortgages secured by the remaining two investment properties and is negotiating forbearance agreements with AMIT on the debt in default. As a result of the above conditions, there is substantial doubt about the Partnership's ability to continue as a going concern. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability or classification of assets or amounts or classification of liabilities that may result from these uncertainties. Note B Organization and Significant Accounting Policies Organization: Angeles Partners 16 (the "Partnership" or "Registrant") a California limited partnership was organized on March 24, 1987, to acquire fee or other equity interests in, or long-term leasehold interests in, improved residential, commercial or industrial real properties. The Partnership's General Partner is Angeles Realty Corporation II ("ARC II"), an affiliate of Insignia Financial Group, Inc. As of December 31, 1995, the Partnership operates two residential properties located in Fitchburg, Wisconsin and Maplewood, Minnesota. Allocations to Partners: In accordance with the Partnership Agreement, any gain from the sale or other disposition of Partnership assets will be allocated first to the General Partner to the extent of the amount of any Incentive Interests (as defined below) to which the General Partner is entitled. Any gain remaining after said allocation will be allocated to the General Partner and Limited Partners in proportion to their interests in the Partnership; provided that the gain shall first be allocated to Partners with negative account balances, in proportion to such balances, in an amount equal to the sum of such negative capital account balances. The Partnership will allocate other profits and losses 1% to the General Partner and 99% to the Limited Partners. Note B Organization and Significant Accounting Policies (continued) Except as discussed below, the Partnership will allocate distributions 1% to the General Partner and 99% to the Limited Partners. Upon the sale or other disposition, or refinancing of any asset of the Partnership, the Distributable Net Proceeds shall be distributed as follows: (i) First, to the Partners in proportion to their interests until the Limited Partners have received proceeds equal to their Original Capital Investment applicable to the property; (ii) Second, to the Partners until the Limited Partners have received distributions from all sources equal to their 6% Cumulative Distribution; (iii) Third, to the General Partner until it has received an amount equal to 3% of the aggregate disposition price of all properties ("Initial Incentive Interest") and (iv) Fourth, to the Partners according to their Interests in the Partnership until the Limited Partners have received distributions from all sources equal to their 10% Cumulative Distribution and, thereafter, until certain of the Limited Partners receive additional priority returns ranging from 1.5% to 4.5% per annum on their Adjusted Capital Investment (not compounded) as set forth in the Partnership Agreement and (v) thereafter, 85% to the Partners in proportion to their interests and 15% ("Final Incentive Interest") to the General Partner. Depreciation: Depreciation is calculated by the straight-line method over the estimated lives of the investment properties and related personal property. For Federal income tax purposes, the accelerated cost recovery method is used (1) for real property over 18 years for additions after March 15, 1984, and before May 9, 1985, and 19 years for additions after May 8, 1985, and before January 1, 1987, and (2) for personal property over 5 years for additions prior to January 1, 1987. As a result of the Tax Reform Act of 1986, for additions after December 31, 1986, the alternative depreciation system is used for depreciation of (1) real property additions over 40 years, and (2) personal property additions over 6-20 years. Cash and Cash Equivalents: The Partnership considers all highly liquid investments with a maturity when purchased of three months or less to be cash equivalents. At certain times, the amount of cash deposited at a bank may exceed the limit on insured deposits. Loan Costs: Loan costs of $250,618, included in "Other assets", are being amortized on a straight line basis over the lives of the related loans. Accumulated amortization totals $28,376 at December 31, 1995. Leases: The Partnership generally leases apartment units for twelve-month terms or less. Tenant Security Deposits: The Partnership requires security deposits which are refunded when the tenant departs if there has been no damage to the unit. Note B - Organization and Significant Accounting Policies (continued) Advertising Costs: Advertising costs, $46,584 in 1995 and $50,478 in 1994, are charged to expense as they are incurred and are included in operating expenses. Investment Properties: Prior to the fourth quarter of 1995, investment properties were carried at the lower of cost or estimated fair value, which was determined using the higher of the property's non-recourse debt amount, when applicable, or the net operating income of the investment property capitalized at a rate deemed reasonable for the type of property. During the fourth quarter of 1995 the Partnership adopted FASB Statement No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, which requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amount. The impairment loss is measured by comparing the fair value of the asset to its carrying amount. The effect of adoption was not material. Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Reclassifications: Certain reclassifications have been made to the 1994 balances to conform to the 1995 presentation. Fair Value: In 1995, the Partnership implemented Statement of Financial Accounting Standards No. 107, "Disclosure about Fair Value of Financial Instruments," which requires disclosure of fair value information about financial instruments for which it is practicable to estimate that value. The carrying amount of the Partnership's cash and cash equivalents approximates fair value due to short-term maturities. The Partnership estimates the fair value of its fixed rate mortgages by discounted cash flow analysis, based on estimated borrowing rates currently available to the Partnership (Note C). Note C - Notes Payable
Monthly Principal Payment Stated Balance Balance at Including Interest Maturity Due at December 31, Property Interest Rate Date Maturity 1995 Whispering Pines Apts. First trust deed $ 32,715 (1) (1) Jan. 1997 $ 4,310,612 $ 4,394,232 Silver Ridge Apts. First mortgage bond payable 38,651 (3) (3) July 2023 4,525,000 4,525,000 Second trust deed 3,125 10.00% Dec. 1997 375,000 375,000 Angeles Partners 16 Note payable, in default 8,953 12.50% June 1997 859,527 859,527 Note payable, in default 12,307 12.25% June 1996 1,205,624 1,205,624 Working capital loan (2) (2) Nov. 1997 1,516,789 1,516,789 $95,751 $12,792,552 $12,876,172 (1) 11th District Federal Home Loan Bank Board base rate plus 2.25%, monthly payment varies with interest rate (9.62% at December 31, 1995). (2) Interest only payments at the prime rate plus 2% payable from available cash flow, as defined (10.5% at December 31, 1995). (3) Interest only payments based on a variable rate not to exceed 12%. The carrying value of the Partnership's aggregate first mortgages approximates its estimated fair value. The General Partner believes that it is not appropriate to use the Partnership's incremental borrowing rate for its other indebtedness as there is currently no market in which the Partnership could obtain similar financing. Therefore, the General Partner considers estimation of fair value to be impracticable. The first mortgage notes payable are nonrecourse and are secured by pledge of certain of the Partnership's investment properties and by pledge of revenues from the respective investment properties. Certain of the notes include prepayment penalties if repaid prior to maturity. The Partnership is in default on $2,065,151 of its indebtedness, plus related accrued interest of $1,147,854, due to its inability to make interest and principal payments when due. The debt is unsecured debt of the Partnership payable to AMIT. Note C - Notes Payable (continued) Scheduled principal payments of notes payable subsequent to December 31, 1995, are as follows: 1996 $ 2,128,848 1997 6,222,324 1998 -- 1999 -- 2000 -- Thereafter 4,525,000 $12,876,172 Note D - Income Taxes Taxable income or loss of the Partnership is reported in the income tax returns of its partners. Accordingly, no provision for income taxes is made in the financial statements of the Partnership. Differences between the net loss as reported and Federal taxable loss result primarily from (1) depreciation over different methods and lives and on differing cost bases of the investment properties, (2) gain or loss on disposal of properties, (3) accrual of future environmental clean-up costs, and (4) bad debt allowances. The following is a reconciliation of reported net loss and Federal taxable loss: 1995 1994 Net loss as reported $(694,457) $(393,769) Add (deduct): Environmental clean-up costs 780,428 (46,487) Depreciation differences (15,889) 34,718 Unearned income 23,771 (14,360) Difference in gain on sale of investment property (2,600,109) -- Bad debt -- (160,784) Miscellaneous 22,451 (12,651) Federal taxable loss $(2,483,805) $(593,333) Federal taxable loss per limited partnership unit $ (175.23) $ (41.86) Note D - Income Taxes (continued) The following is a reconciliation between the Partnership's reported amounts and Federal tax basis of net liabilities: Net liabilities as reported $(5,130,938) Land and buildings 1,417,768 Accumulated depreciation 406,415 Syndication and distribution costs 2,042,650 Accrued environmental clean-up costs 1,091,083 Prepaid rent 20,593 Other (75,195) Net liabilities - Federal tax basis $ (227,624) Note E - Transactions with Affiliated Parties The Partnership has no employees and is dependent on the General Partner and its affiliates for the management and administration of all Partnership activities. The Partnership Agreement provides for payments to affiliates for services and as reimbursement of certain expenses incurred by affiliates on behalf of the Partnership. The following payments were paid to the General Partner and affiliates in 1995 and in 1994: 1995 1994 Property management fees $123,393 $190,528 Reimbursements for services of affiliates 88,331 121,288 Marketing services 1,263 633 The Partnership insures its properties under a master policy through an agency and insurer unaffiliated with the General Partner. An affiliate of the General Partner acquired, in the acquisition of a business, certain financial obligations from an insurance agency which were later acquired by the agent who placed the current year's master policy. The current agent assumed the financial obligations to the affiliate of the General Partner, who receives payment on these obligations from the agent. The amount of the Partnership's insurance premiums accruing to the benefit of the affiliate of the General Partner by virtue of the agent's obligations is not significant. Note E - Transactions with Affiliated Parties (continued) In November 1992, Angeles Acceptance Pool, L.P. ("AAP"), a Delaware limited partnership was organized to acquire and hold the obligations evidencing the working capital loan previously provided to the Partnership by Angeles Capital Investments, Inc. ("ACII"). Angeles Corporation ("Angeles") is the 99% limited partner of AAP and Angeles Acceptance Directives, Inc. ("AAD"), an affiliate of the General Partner, was, until April 14, 1995, the 1% general partner of AAP. On April 14, 1995, as part of a settlement of claims between affiliates of the General Partner and Angeles, AAD resigned as general partner of AAP and simultaneously received a 1/2% limited partner interest in AAP. An affiliate of Angeles now serves as the general partner of AAP. The AAP working capital loan funded the Partnership's operating deficits in prior years. Total indebtedness, including accrued interest of $434,005, was $1,950,794 at December 31, 1995, with monthly interest only payments at the prime rate plus 2% from available cash flow. Principal is to be paid the earlier of i) the availability of funds, ii) the sale of one or more properties owned by the Partnership generating excess proceeds, or iii) November 25, 1997. Total interest expense for this loan was $164,319 and $130,191 for the years ended December 31, 1995 and 1994, respectively. AMIT currently holds two unsecured note receivables from the Partnership. Total indebtedness of $2,065,151 was in default at December 31, 1995 due to non- payment. Total interest expense on this financing was $428,916 and $390,820 for the years ended December 31, 1995 and 1994, respectively. Accrued interest was $1,147,854 at December 31, 1995. MAE GP Corporation ("MAE GP"), an affiliate of the General Partner, owns 1,675,113 Class B Shares of AMIT. MAE GP has the option to convert these Class B Shares, in whole or in part, into Class A Shares on the basis of 1 Class A Share for every 49 Class B Shares. These Class B Shares entitle MAE GP to receive 1.2% of the distributions of net cash distributed by AMIT. These Class B Shares also entitle MAE GP to vote on the same basis as Class A Shares which allows MAE GP to vote approximately 37% of the total shares (unless and until converted to Class A Shares at which time the percentage of the vote controlled represented by the shares held by MAE GP would approximate 1.2% of the vote). Between the date of acquisition of these shares (November 24, 1992) and March 31, 1995, MAE GP declined to vote these shares. Since that date, MAE GP voted its shares at the 1995 annual meeting in connection with the election of trustees and other matters. MAE GP has not exerted, and continues to decline to exert, any management control over or participate in the management of AMIT. MAE GP may choose to vote these shares as it deems appropriate in the future. In addition, Liquidity Assistance, LLC, ("LAC"), an affiliate of the General Partner and an affiliate of Insignia Financial Group, Inc., which provides property management and partnership administration services to the Partnership, owns 63,200 Class A Shares of AMIT. These Class A Shares entitle LAC to vote approximately 1.5% of the total shares. Note E - Transactions with Affiliated Parties (continued) As part of a settlement of certain disputes with AMIT, MAE GP granted to AMIT an option to acquire the Class B Shares owned by it. This option can be exercised at the end of 10 years or when all loans made by AMIT to partnerships affiliated with MAE GP as of November 9, 1994, (which is the date of execution of a definitive Settlement Agreement) have been paid in full, but in no event prior to November 9, 1997. AMIT delivered to MAE GP cash in the sum of $250,000 at closing, which occurred April 14, 1995, as payment for the option. Upon exercise of the option, AMIT would remit to MAE GP an additional $94,000. Simultaneously with the execution of the option, MAE GP executed an irrevocable proxy in favor of AMIT the result of which is MAE GP will be able to vote the Class B Shares on all matters except those involving transactions between AMIT and MAE GP affiliated borrowers or the election of any MAE GP affiliate as an officer or trustee of AMIT. On those matters, MAE GP granted to the AMIT trustees, in their capacity as trustees of AMIT, proxies with regard to the Class B Shares instructing such trustees to vote said Class B Shares in accordance with the vote of the majority of the Class A Shares voting to be determined without consideration of the votes of "Excess Class A Shares" as defined in Section 6.13 of the Declaration of Trust of AMIT. Note F - Investment Properties and Accumulated Depreciation
Initial Cost To Partnership Cost Buildings Capitalized and Related (Removed) Personal Subsequent to Description Encumbrances Land Property Acquisition Whispering Pines Apartments $ 4,394,232 $ 579,327 $ 5,210,673 $ (368,684) Silver Ridge Apartments 4,900,000 641,974 6,244,026 (622,540) Angeles Partners 16 3,581,940 -- -- -- Totals $12,876,172 $1,221,301 $11,454,699 $ (991,224)
Note F - Investment Properties and Accumulated Depreciation (continued)
Gross Amount At Which Carried At December 31, 1995 Buildings And Related Personal Accumulated Date Depreciable Description Land Property Total Depreciated Acquired Life-Years Whispering Pines Apartments $ 509,115 $ 4,912,201 $ 5,421,316 $1,167,540 06/30/89 5-40 Silver Ridge Apartments 566,474 5,696,986 6,263,460 1,838,655 12/29/87 5-40 Totals $1,075,589 $10,609,187 $11,684,776 $3,006,195
The depreciable lives included above are for the buildings and components. The depreciable lives for related personal property are for 5 to 10 yrs. Reconciliation of Investment Properties and Accumulated Depreciation : Years Ended December 31, 1995 1994 Investment Properties Balance at beginning of year $22,355,656 $22,290,148 Property improvements 312,100 65,508 Property write-down -- -- Dispositions (10,982,980) -- Balance at end of Year $11,684,776 $22,355,656 Accumulated Depreciation Balance at beginning of year $ 4,771,718 $ 4,107,439 Additions charged to expense 472,626 664,279 Dispositions (2,238,149) -- Balance at End of Year $ 3,006,195 $ 4,771,718 The aggregate cost of the real estate for Federal income tax purposes at December 31, 1995 and 1994, is $13,102,544 and $25,830,208. The accumulated depreciation taken for Federal income tax purposes at December 31, 1995 and 1994, is $2,599,780 and $3,766,274. Note G - Sale of Investment Property On June 12, 1995, the Partnership sold the North Prior Industrial Park to an unrelated party, recognizing a gain on the sale of $1,009,521. The net proceeds of $10,324,699, were used to pay the first mortgage and related accrued interest, to pay AMIT in partial satisfaction of a recourse second mortgage, and to fund restricted escrows. The holder of the first mortgage forgave $56,203, which the Partnership recognized as an extraordinary gain on extinguishment of debt. The unpaid balance of the note payable to AMIT is now unsecured Partnership debt (see Note E). As required by the sales agreement, the Partnership established three escrows as described below: Tenant Improvements Escrow - This escrow is being held pending completion of tenant improvements that were begun by the receiver prior to the sale. As the improvement projects are completed the funds will be disbursed. At December 31, 1995, the escrow balance was $74,513. All funds are expected to be used in the improvement projects; however, any remaining funds will be used to reduce the AMIT debt. Environmental Escrow -This escrow was established for costs associated with fuel oil contamination at the property. In January 1993, a local fuel oil distributor pumped fuel oil into a testing well instead of into the storage tank at North Prior Industrial Park. The Partnership notified the necessary authorities and engaged an environmental engineering firm to develop a plan of action to clean up the site. The cost of the clean up, which is not covered by insurance, is estimated to be approximately $900,000 over a five year period. A liability has been recorded to cover the estimated costs to clean-up the site and is included in "Other Liabilities", and the funds have been set aside in an escrow account. The Partnership entered into an agreement with the buyer of the property limiting the Partnership's liability with regard to the clean up of this site to the balance of the escrow account. This agreement will terminate when the Partnership receives a "Site Closure Letter" from the Minnesota Pollution and Control Agency. Upon receipt of this letter, any remaining funds in the escrow account will be used to pay down the AMIT debt discussed above. Attorney Fee Escrow: This escrow is being held for attorney fees relating to the Environmental issue described above. At December 31, 1995, the balance in this account is $129,464. All funds are expected to be used for attorney fees; however, any remaining funds will be used to reduce the AMIT debt. Note H - Other Items In January 1995, the former holder of the first mortgage secured by the North Prior Industrial Park, along with the former receiver, initiated two separate lawsuits against the Partnership and other parties for damages sustained as a result of the oil spill at the property. In June 1995 the suit with the former holder of the first mortgage was dismissed. In November 1995, the Partnership was removed as the defendant and became the Plaintiff in the suit brought by the former receiver as the receiver is no longer an interested party. In 1994, the number of Limited Partnership Units decreased by 17 units due to limited partners abandoning their units. In abandoning his or her Limited Partnership Units, a limited partner relinquishes all right, title and interest in the Partnership as of the date of abandonment. However, during the year of abandonment, the Limited Partner will still be allocated his or her share of the income or loss for that entire year. The loss per limited partnership unit in the accompanying statement of operations is calculated based on the number of units outstanding at the beginning of the year. Item 8. Changes in and Disagreements with Accountant on Accounting and Financial Disclosures There were no disagreements with Ernst & Young LLP regarding the 1995 or 1994 audits of the Partnership's financial statements. PART III Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act The name of the directors and executive officers of Angeles Realty Corporation II ("ARC II"), the Partnership's General Partner as of December 31, 1995, their age and the nature of all positions with ARC II presently held by them are as follows: Name Age Position Carroll D. Vinson 55 President Robert D. Long, Jr. 28 Controller and Principal Accounting Officer William H. Jarrard, Jr. 49 Vice President John K. Lines 36 Secretary Kelley M. Buechler 38 Assistant Secretary Carroll D. Vinson has been President of Metropolitan Asset Enhancement, L.P., and subsidiaries since August of 1994. Prior to that, during 1993 to August 1994, Mr. Vinson was affiliated with Crisp, Hughes & Co. (regional CPA firm) and engaged in various other investment and consulting activities. Briefly, in early 1993, Mr. Vinson served as President and Chief Executive Officer of Angeles Corporation, a real estate investment firm. From 1991 to 1993, Mr. Vinson was employed by Insignia in various capacities including Managing Director-President during 1991. From 1986 to 1990, Mr. Vinson was President and a Director of U.S. Shelter Corporation, a real estate services company, which sold substantially all of its assets to Insignia in December 1990. Robert D. Long, Jr. is Controller and Principal Accounting Officer. Prior to joining Metropolitan Asset Enhancement, L.P., and subsidiaries, he was an auditor for the State of Tennessee and was associated with the accounting firm of Harshman Lewis and Associates. He is a graduate of the University of Memphis. William H. Jarrard, Jr. is Managing Director - Partnership Administration of Insignia Financial Group, Inc. ("Insignia"). During the five years prior to joining Insignia in 1991, he served in a similar capacity for U.S. Shelter. He was previously associated with the accounting firm, Ernst & Whinney, for eleven years. Mr. Jarrard is a graduate of the University of South Carolina and a certified public accountant. John K. Lines has been General Counsel and Secretary of Insignia since June 1994. From May 1993 until June 1994, Mr. Lines was the Assistant General Counsel and Vice President of Ocwen Financial Corporation in West Palm Beach, Florida. From October 1991 until April 1993, Mr. Lines was a Senior Attorney with Banc One Corporation in Columbus, Ohio. From May 1984 until October 1991, Mr. Lines was employed as an Associate Attorney with Squire Sanders & Dempsey in Columbus, Ohio. Kelley M. Buechler is Assistant Secretary of Insignia. During the five years prior to joining Insignia in 1991, she served in a similar capacity for U.S. Shelter. Ms. Buechler is a graduate of the University of North Carolina. Item 10. Executive Compensation No direct form of compensation or remuneration was paid by the Partnership to any officer or director of ARC II. The Partnership has no plan, nor does the Partnership presently propose a plan, which will result in any remuneration being paid to any officer or director upon termination of employment. However, fees and other payments have been made to the Partnership's General Partner and its affiliates, as described in Note E of the Financial Statements included under Item 7, which is incorporated herein by reference. Item 11. Security Ownership of Certain Beneficial Owners and Management As of January 1, 1996, no person owned of record more than 5% of Limited Partnership Units of the Partnership nor was any person known by the Partnership to own of record and beneficially, or beneficially only, more than 5% of such securities. The Partnership knows of no contractual arrangements, the operation of the terms of which may at a subsequent date result in a change in control of the Partnership, except as follows: Article 12.1 of the Agreement, which provides that upon a vote of the Limited Partners holding more than 50% of the then outstanding Limited Partnership Units the General Partner may be expelled from the Partnership upon 90 days written notice. In the event that a successor general partner has been elected by Limited Partners holding more than 50% of the then outstanding Limited Partnership Units and if said Limited Partners elect to continue the business of the Partnership, the Partnership is required to pay in cash to the expelled General Partner an amount equal to the accrued and unpaid management fee described in Article 10 of the Agreement and to purchase the General Partner's interest in the Partnership on the effective date of the expulsion, which shall be an amount equal to the difference between i) the balance of the General Partner's capital account and ii) the fair market value of the share of Distributable Net Proceeds to which the General Partner would be entitled. Determination of the fair market value of the share of Distributable Net Proceeds is defined in Article 12.2 (b) of the Agreement. Item 12. Certain Relationships and Related Transactions No transactions have occurred between the Partnership and any officer or director of ARC II. During the years ended December 31, 1995, and December 31, 1994, the transactions that occurred between the Partnership and ARC II or affiliates of ARC II pursuant to the terms of the Agreement are disclosed under Note E of the Partnership's Financial Statements included under Item 7, which is hereby incorporated by reference. Item 13. Exhibits and Reports on Form 8-K (a) See Exhibit Index contained herein. (b) No reports on Form 8-K were filed during the fourth quarter of 1995. SIGNATURES In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ANGELES PARTNERS 16 (A California Limited Partnership) (Registrant) By: Angeles Realty Corporation II By: /s/Carroll D. Vinson Carroll D. Vinson President Date: March 15, 1996 In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the Registrant and in the capacities on the date indicated. /s/Carroll D. Vinson President March 15, 1996 Carroll D. Vinson /s/Robert D. Long, Jr. Controller March 15, 1996 Robert D. Long, Jr. (Principal Accounting Officer) ANGELES PARTNERS 16 (A Limited Partnership) Exhibit Index Exhibit Number Description of Exhibit 3.1 Amended Certificate and Agreement of the Limited Partnership's filed in the Partnership's prospectus dated June 15, 1987 which is incorporated herein by reference. 10.1 Agreement of Purchase and Sale of Property with Exhibits - Angola Beach, filed in Form 8K dated December 29, 1987, which is incorporated herein by reference. 10.2 Amendment of Contract - Angola Beach filed in Form 8K dated December 29, 1987, which is incorporated herein by reference. 10.3 Agreement of Purchase and Sale of Property - Silver Ridge filed in Form 8K dated December 29, 1987, which is incorporated herein by reference. 10.4 Contract of Sale with Exhibits - Angola Estates, file in Form 8K dated January 12, 1988, which is incorporated herein by reference. 10.5 First Trust Deed - Angola Beach, filed in Form 10Q dated September 30, 1988, which is incorporated herein by reference. 10.6 Agreement of Purchase and Sale of Property - North Prior filed in Form 8K dated January 18, 1989, which is incorporated herein by reference. 10.7 Agreement of Purchase and Sale of Property - Whispering Pines filed in Form 8K dated July 19, 1989, which is incorporated herein by reference. 10.8 Stock Purchase Agreement dated November 24, 1992 showing the purchase of 100% of the outstanding stock of Angeles Realty Corporation II by IAP GP Corporation, a subsidiary of MAE GP Corporation, filed in Form 8-K dated December 31, 1992, which is incorporated herein by reference. 10.9 Agreement of Purchase and Sale of Property - Angola Beach and Angola Estates Mobile Home Park filed in Form 8K dated May 20, 1993, which is incorporated herein by reference. 10.10 Letter from the Registrant's former independent accountant regarding its concurrence with the statements made by the Registrant is incorporated by reference to the exhibit filed with Form 8K dated September 1, 1993. Exhibit Number Description of Exhibit 10.11 Purchase Agreement with Exhibits between Angeles Partners 16 and North Prior, L.L.C. dated March 3, 1993, documenting the sale of North Prior Industrial Park. 10.12 First Amendment to Purchase Agreement with Exhibits between Angeles Partners 16 and North Prior, L.L.C. dated June 12, 1995, documenting the sale of North Prior Industrial Park. 10.13 Assignment and Assumption of Leases with Exhibits between Angeles Partners 16 and North Prior, L.L.C. dated June 12, 1995. 10.14 Assignment and Assumption of Service Contracts with Exhibits between Angeles Partners 16 and North Prior Industrial, L.L.C. dated June 12, 1995. 10.15 Assignment of Permits and Warranties with Exhibits between Angeles Partners 16 and North Prior, L.L.C. dated June 12, 1995. 10.16 Assignment of Rents and Leases with Exhibits between Angeles Partners 16 and Towle Real Estate Company dated June 12, 1995. 10.17 Assignment of Service Contracts with Exhibits between Angeles Partners 16 and Towle Real Estate Company dated June 12, 1995. 10.18 Assignment of Permits and Warranties with Exhibits between Angeles Partners 16 and Towle Real Estate Company dated June 12, 1995. 27 Financial Data Schedule, is filed as an exhibit to this report. EX-27 2
5 This schedule contains summary financial information extracted from Angeles Partners 16 1995 Year-End 10-KSB and is qualified in its entirety by reference to such 10-KSB filing. 0000812187 ANGELES PARTNERS 16 1 12-MOS DEC-31-1995 DEC-31-1995 405,772 0 139,499 0 0 0 11,684,776 (3,006,195) 11,106,881 0 12,876,172 0 0 0 (5,130,938) 11,106,881 0 2,929,190 0 0 4,689,371 0 1,507,448 (694,457) 0 (694,457) 0 0 0 (694,457) (48.99) 0 The Partnership has an unclassified balance sheet.
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