-----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, Jzc7jugHzbFDXLpgInB4hflRZ2r20mNCsohnLyy6VVW4CcKsPgww0h4tw31KrFNK Fm3VJZdvJo30zh73GvrcKA== 0001013816-03-000193.txt : 20030814 0001013816-03-000193.hdr.sgml : 20030814 20030814171826 ACCESSION NUMBER: 0001013816-03-000193 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20030630 FILED AS OF DATE: 20030814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHRISKEN PARTNERS CASH INCOME FUND L P CENTRAL INDEX KEY: 0000815278 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 363521124 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-17602 FILM NUMBER: 03848831 BUSINESS ADDRESS: STREET 1: 345 N CANAL ST CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3124541626 10QSB 1 form10qsb_63003.txt FORM 10-QSB UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2003 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ------------------- ----------------- Commission File Number 0-17602 ChrisKen Partners Cash Income Fund L.P. (Exact name of small business issuer as Specified in its certificate of Limited partnership) Delaware 36-3521124 - --------------------------------- -------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 345 North Canal Street, Chicago, Illinois 60606 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (312) 454-1626 - -------------------------------------------------------------------------------- (Issuer's telephone number) (Former name, former address and formal fiscal year, if changed since last report) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities 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 [ ] --- --- CHRISKEN PARTNERS CASH INCOME FUND L.P. INDEX Page PART I Financial Information Item 1. Condensed Consolidated Financial Statements (Unaudited) Condensed Consolidated Balance Sheet at June 30, 2003 2 Condensed Consolidated Statements of Income for the Three and Six Months Ended June 30, 2003 and 2002 3 Condensed Consolidated Statement of Partners' Capital for the Six Months Ended June 30, 2003 4 Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2003 and 2002 5 Notes to Condensed Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis or Plan of Operation 7 Item 3. Controls and Procedures 11 PART II. Other Information Item 1. Legal Proceedings 13 Item 2. Changes in Securities 13 Item 3. Defaults Upon Senior Securities 13 Item 4. Submissions of Matters to a Vote of Security Holders 13 Item 5. Other Information 13 Item 6. Exhibits and Reports on Form 8-K 13 SIGNATURE 14 CERTIFICATIONS 15 i ChrisKen Partners Cash Income Fund, L.P. (A Delaware Limited Partnership) Condensed Consolidated Balance Sheet June 30, 2003 (Unaudited) Assets Cash and cash equivalents $ 589,898 Restricted cash 377,320 Accounts receivable 29,076 Prepaid expenses 10,477 ------------------- 1,006,771 Investment in real estate, at cost: Land 2,413,710 Buildings and improvements 11,479,574 Personal property 760,945 ------------------- 14,654,229 Accumulated depreciation (4,669,986) ------------------- 9,984,243 ------------------- Total assets $ 10,991,014 =================== Liabilities and partners' capital Accounts payable $ 138,719 Tenants' security deposits 94,869 Deferred income and prepaid rent 156,111 Accrued real estate taxes 228,854 ------------------- Total liabilities 618,553 Partners' capital, 35,977 limited partnership units issued and outstanding 10,372,461 ------------------- Total liabilities and partners' capital $ 10,991,014 =================== See accompanying notes. ChrisKen Partners Cash Income Fund, L.P. (A Delaware Limited Partnership) Condensed Consolidated Statements of Income (Unaudited)
Three Months Ended Six Months Ended June 30 June 30 2003 2002 2003 2002 ----------------------------------------------------------------- Revenue Rental $ 659,868 $ 677,751 $1,309,784 $1,365,583 Interest - 948 - 2,586 Other 26,426 29,368 54,263 53,094 ----------------------------------------------------------------- Total revenue 686,294 708,067 1,364,047 1,421,263 Expenses Property operations 161,434 153,964 351,780 319,346 Depreciation 156,309 154,529 313,150 304,149 General and administrative 243,497 254,169 508,169 465,855 Management fees - Affiliate 35,970 38,470 70,680 77,350 ----------------------------------------------------------------- Total expenses 597,210 601,132 1,243,779 1,166,700 ----------------------------------------------------------------- Net income $ 89,084 $ 106,935 $ 120,268 $ 254,563 ================================================================= Net income allocated to general partners $ 8,908 $ 10,694 $ 12,027 $ 25,456 ================================================================= Net income allocated to limited partners $ 80,176 $ 96,241 $ 108,241 $ 229,107 ================================================================= Net income allocated to limited partners per limited partnership unit outstanding $ 2.23 $ 2.68 $ 3.01 $ 6.37 ================================================================= Limited partnership units outstanding 35,977 35,977 35,977 35,977 =================================================================
See accompanying notes. ChrisKen Partners Cash Income Fund, L.P. (A Delaware Limited Partnership) Condensed Consolidated Statement of Partners' Capital Six months ended June 30, 2003 (Unaudited) Partners' Capital Accounts ----------------------------------------------------- General Partners Limited Partners Total ----------------------------------------------------- Balance at January 1, 2003 $436,230 $10,170,696 $10,606,926 Distributions (A) 0 (354,733) (354,733) Net income 12,027 108,241 120,268 ----------------------------------------------------- Balance at June 30, 2003 $448,257 $9,924,204 $10,372,461 ===================================================== (A) Summary of 2003 quarterly cash distributions paid per limited partnership unit: First quarter $0.00 Second quarter $9.86 See accompanying notes. ChrisKen Partners Cash Income Fund, L.P. (A Delaware Limited Partnership) Condensed Consolidated Statements of Cash Flows (Unaudited)
Six Months Ended June 30 2003 2002 -------------------------------- Cash flows from operating activities Net income $120,268 $254,563 Adjustments to reconcile net income to net cash flows provided by operating activities: Depreciation 313,150 304,149 Net changes in operating assets and liabilities: Decrease in accounts receivable 3,914 4,133 Decrease in prepaid expenses 17,095 11,822 Decrease in accounts payable and accrued expenses (108,961) (144,791) Increase in deferred income and prepaid rent 8,830 12,236 (Decrease) in tenants' security deposits (377) (4,691) -------------------------------- Net cash flows provided by operating activities 353,919 437,421 Cash flows from investing activities Additions to investment in real estate (162,328) (167,661) -------------------------------- Cash flows used in investing activities (162,328) (167,661) Cash flows from financing activities Distributions to partners (354,733) (314,331) -------------------------------- Cash flows used in financing activities (354,733) (314,331) -------------------------------- Net decrease in cash and cash equivalents (163,142) (44,571) Cash and cash equivalents, beginning of period 753,040 301,355 -------------------------------- Cash and cash equivalents, end of period $589,898 $256,784 ================================
See accompanying notes. ChrisKen Partners Cash Income Fund, L.P. (A Delaware Limited Partnership) Notes to Condensed Consolidated Financial Statements (Unaudited) 1. Interim Accounting Policies The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-QSB and 310(b) of Regulations of S-B. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. The condensed consolidated financial statements are the representation of the General Partners and reflect all adjustments which are, in the opinion of the General Partners, necessary for a fair presentation of the financial position and results of operations of the Partnership. The General Partners believe that all such adjustments are normal and recurring. For further information, refer to the consolidated financial statements and notes thereto included in the ChrisKen Partners Cash Income Fund L.P.'s (the "Partnership") Annual Report on Form 10-KSB for the year ended December 31, 2002. 2. Segment Information
Three months Ended June 30, 2003 2002 -------------------------------------------------------------- Residential Self Residential Self Apartment Storage Apartment Storage Complex Facility Complex Facility -------------------------------------------------------------- Property operating revenues $ 426,892 $ 259,402 $ 440,088 $ 265,620 Operating income 83,078 28,385 98,165 34,547 Total assets 5,821,301 4,371,218 6,257,416 4,480,934 Six months Ended June 30, 2003 2002 -------------------------------------------------------------- Residential Self Residential Self Apartment Storage Apartment Storage Complex Facility Complex Facility -------------------------------------------------------------- Property operating revenues $ 842,094 $ 521,953 $ 867,095 $ 553,198 Operating income 146,891 48,365 192,431 106,552
A reconciliation of combined operating income for the residential apartment complex segment and the self storage facility segment to net income is as follows:
Three Months Ended Six Months Ended June 30 June 30 ----------------------------- --------------------------- 2003 2002 2003 2002 Total operating income for reportable segments $111,463 $132,712 $195,256 $298,983 General and administrative expense (22,379) (26,136) (74,988) (45,390) Interest income - 359 - 970 ----------------------------- --------------------------- Operating income $ 89,084 $106,935 $120,268 $254,563 ============================= ===========================
Item 2. Management's Discussion and Analysis or Plan of Operation ChrisKen Partners Cash Income Fund L.P. ("CPCIF" or the "Partnership") is a Delaware limited partnership organized on May 4, 1987, with ChrisKen Income Properties, Inc. ("Managing General Partner") and ChrisKen Limited Partnership I as General Partners. Pursuant to a public offering (the "Offering"), CPCIF sold 37,732 limited partnership units. CPCIF has 99.99% ownership interests in Springdale Associates Limited Partnership and Chicago I Self-Storage Limited Partnership. Springdale Associates Limited Partnership owns a 199-unit residential complex located in Waukesha, Wisconsin ("Springdale Apartments"), and Chicago I Self-Storage Limited Partnership owns a 155,997 square foot self-storage facility located in Chicago, Illinois ("Gold Coast Storage"). Liquidity and Capital Resources The Partnership had cash and cash equivalents of $589,898 and $753,040 as of June 30, 2003, and December 31, 2002, respectively. The reduction in cash and cash equivalents is primarily due to additions to investment in real estate and other assets, a distribution to the Limited Partners in the second quarter, and reductions in accrued real estate taxes and accounts payable and other liabilities, partially offset by cash flow from operations for the first six months of 2003, a decrease in prepaid expenses and an increase in deferred rental income. Restricted cash represents operating and contingency reserves (the "Reserve") equal to approximately 2% of the gross proceeds of the Offering ($377,320 at June 30, 2003, and December 31, 2002) as required by the Limited Partnership Agreement. The Reserve is available for unanticipated contingencies and repairs at Springdale Apartments and Gold Coast Storage (collectively the "Specified Properties"). The Partnership holds the Specified Properties described above on an unencumbered or all cash basis. In the first quarter of 2003, CMG Partners, L.L.C., which is not affiliated with the Partnership or its General Partners, acquired 130.8398 outstanding Limited Partnership Units of the Partnership as a result of previously submitted unsolicited offers to the Partnership's Limited Partners. In February 2003, CMG Partners, L.L.C., which is not affiliated with the Partnership or its General Partners, submitted an unsolicited offer to the Partnership's Limited Partners to purchase up to 4.9%, or approximately 1,762, of the outstanding Limited Partnership Units of the Partnership at $292 per Unit. The offer expired on April 15, 2003. The Partnership's records indicate that as of August 11, 2003, 424 Limited Partnership Units were sold by Limited Partners to CMG Partners L.L.C. as a result of this offer. In April 2003, CMG Partners, L.L.C., which is not affiliated with the Partnership or its General Partners, submitted an unsolicited offer to the Partnership's Limited Partners to purchase up to 4.9%, or approximately 1,762, of the outstanding Limited Partnership Units of the Partnership at $292 per Unit. The offer expires on August 15, 2003. The Partnership's records indicate that as of August 11, 2003, 260 Limited Partnership Units were sold by Limited Partners to CMG Partners L.L.C. as a result of this offer. Management believes that the Limited Partnership Unit sales to CMG Partners L.L.C. will not adversely affect the management or the liquidity of the Partnership. Additional unsolicited offers to purchase Limited Partnership Units may occur in the future. From time to time, the Partnership receives requests to furnish the names, addresses and number of Limited Partnership Units owned by the Limited Partners. The Partnership complies with such requests as required by the terms of the Partnership Agreement and/or applicable law. In 2001, at Gold Coast Storage, the City of Chicago Fire Department determined that, in the event of a fire, individuals using exterior fire escapes might be injured by broken glass from window openings within ten feet of a fire escape. In conjunction with the Fire Department, the Partnership has developed a plan to encase identified windows with UL fire rated materials. The Partnership has received the necessary approval and building permit by the City of Chicago Building Department. Work on this project began in the second quarter and completion is expected in the third quarter of 2003. The Managing General Partner does not expect the cost of this project to exceed $175,000. In 2001, the Partnership agreed with the City of Chicago that it would complete repairs and tuck pointing with respect to the exterior walls at Gold Coast Storage property. Such work began in 2001 and was completed in November 2002, as required. The total cost for this project, $280,267, was funded from 2001 and 2002 operations. In performing the tuck-pointing work in 2002, additional structural improvements were identified. The additional capital expenditures were completed in the first quarter of 2003 at a cost of $68,500. In the fall of 2000, in the course of repairing the damage caused by a fire at one of the apartment units at Springdale Apartments, a structural defect in the construction of the fire-damaged unit was discovered. The Managing General Partner of the Partnership retained a structural engineer to perform an examination of Springdale Apartments. As of August 8, 2003, the structural engineer had completed an examination of 128 of the 199 apartments units and will continue to perform testing on the remaining apartment units as residents vacate those units. Based on the structural engineer's reports, the Managing General Partner believes that the remediation costs at Springdale Apartments can be funded out of the Partnership's cash flow. However, if further examination reveals that more extensive defects requiring remedial repairs exist with respect to the remaining units, it could have a material adverse impact on the Partnership's financial condition. In 2001, structural enhancements and repairs to the Specified Properties that the Managing General Partner deemed necessary and advisable were undertaken. As a result, 2001 major expenditures exceeded expenditures for such items for the few years preceding 2001. The increased level of expenditures for major repairs and improvements continued in 2002. All such expenditures were funded from operating cash flow. The Managing General Partner anticipates that major repairs and improvement expenditures in 2003 will exceed those incurred in 2001 and 2002 and such expenditures will remain substantial in near term fiscal periods due to competitive market conditions and overall maintenance of the Specified Properties. The level of future distributions to the Limited Partners is dependent on the overall performance of the Specified Properties, including capital expenditures and repairs. In 2002, the Managing General Partner engaged third party real estate firms to review the feasibility of converting the Springdale Apartments to condominiums through the sale of the individual apartment units rather than selling the property as an apartment community. Because the reports by such third party real estate firms were significantly less positive with respect to condominimization of the Springdale Apartments than the Managing General Partner anticipated, the Managing General Partner commissioned a more thorough feasibility report which recently was completed. As that later report also did not provide strong support for condominiumization, the Managing General Partner decided to engage one or more third party brokers to solicit offers for sale of the Springdale Apartments. The Managing General Partner also decided to engage one or more third party brokers to solicit offers for sale of the Gold Coast Storage. As of the date hereof, a broker has been engaged to solicit offers for sale of the Springdale Apartments, however, a broker or brokers is not expected to be engaged to solicit offers on Gold Coast Storage for approximately 60 to 90 days. If the Managing General Partner receives offers for sale of the Springdale Apartments and/or Gold Coast Storage that it believes are reasonable, a vote of the Limited Partners will be solicited. On May 12, 2003, the Managing General Partner received a copy of a letter, dated May 9, 2003, from Mackenzie Patterson, Inc. and Robert J. Korslin to all of the Partnership's Limited Partners. Mackenzie Patterson, Inc. and Mr. Korslin indicate in their joint letter that they own 1,475 Units (approximately 4.1% of total Units outstanding). The Mackenzie/Korslin letter indicates that they are seeking a consent to "...cause the General Partners to market the properties". The Managing General Partner believes that it already has begun taking steps necessary to market the Springdale Apartments and Gold Coast Storage. Results of Operations Occupancy at the Springdale Apartments was 92% at June 30, 2003, 91% at December 31, 2002, and 97% at June 30, 2002. Rental revenue decreased during the six months ended June 30, 2003, as compared to the same period one year earlier, due primarily to a $37,225 increase in vacancy loss and a $10,423 increase in rent concessions, partially offset by a $20,664 increase in rental rates. The General Partners believe that occupancy at Springdale Apartments will remain between 89 - 94% for the remainder of 2003. Occupancy at Gold Coast Storage was 77.5% at June 30, 2003, 74.1% at December 31, 2002, and 73.5% at June 30, 2002. Rental revenue decreased during the six months ended June 30, 2003, as compared to the same period one year earlier, primarily due to a $60,611 increase in vacancy loss, partially offset by a $32,629 increase in rental rates. The General Partners do not anticipate that rental revenue at Gold Coast Storage will improve during 2003 due to lower occupancy resulting primarily from overall weakened economic conditions and increased competition. The General Partners believe that occupancy at Gold Coast will remain between 72 - 80% for the remainder of 2003. Management continues to aggressively market both apartment units at Springdale Apartments and space at Gold Coast Storage in order to improve occupancy percentages and increase rental rates at both locations. There can be no assurance, however, that increases will occur. Total revenue of $842,094 for Springdale Apartments for the six months ended June 30, 2003, decreased approximately 2.9% from total revenue of $867,095 for the six months ended June 30, 2002. The decrease in revenue resulted primarily from increased vacancy loss and rent concessions, partially offset by increased rental rates, as mentioned above. Total revenue at Gold Coast Storage decreased by approximately 5.7% from $553,198 for the six months ended June 30, 2002, to $521,953 for the six months ended June 30, 2003, due to a net decrease in rental revenue of approximately 5.9%. Overall total revenue for the Specified Properties for the six months ended June 30, 2003, of $1,364,047 decreased by 4% from the total revenue of $1,420,293 for the six months ended June 30, 2002, due to the factors detailed above. Expenses for the six months ended June 30, 2003, attributable to Springdale Apartments of $695,203 were approximately 3% higher than expenses for the six months ended June 30, 2002, of $674,664, due to higher property operating, depreciation, and general and administrative expenses, partially offset by decreased repair and maintenance expenses. Property operating expenses are higher due primarily a $25,626 increase in gas and fuel expense, partially offset by a $9,133 decrease in non-recurring painting and decorating expense. Gas and fuel expense increased due to an increase in rates and usage. Painting and decorating decreased primarily due to non-recurring expenses incurred in 2002 related to the painting of common hallways. Depreciation expense is higher in 2003 due to fixed asset additions. General and administrative expenses are higher due to the following increases in expense: data processing, $1,049, property insurance expense, $5,717, office and administrative salaries and commission, $6,376, payroll taxes, $2,932, legal and eviction fees, $2,370, and advertising expense, $10,809, partially offset by the following decreases in expense: bad debt expense, $6,467, professional fees, $5,418, and miscellaneous expense, $3,930. Office and administrative salaries increased due to the hiring of an additional leasing person in 2003. Advertising was increased to help improve occupancy. Repair and maintenance expenses are lower due to the following decreases in expense: grounds maintenance and supplies, $2,270, plumbing repairs and supplies, $2,037, painting and decorating, $4,691, electrical repairs and supplies, $3,558, and structural repairs and supplies, $9,486, partially offset by a $2,599 increase in maintenance salaries. Structural repairs decreased in 2003 primarily due to a reduction in expenses, compared to 2002, related to joist reinforcements and tub surround replacements, and chimney cap replacement costs of $5,318 incurred in 2002. Management fee expense in 2003 is comparable to 2002 expense. Expenses attributable to Gold Coast Storage for the six months ended June 30, 2003, of $473,588 are 6% higher compared to expenses for the six months ended June 30, 2002, of $446,646 due to higher property operating, and depreciation expense, partially offset by lower repair and maintenance and general and administrative expenses. Property operating expenses are higher in 2003, as compared to the first six months of 2002, due to a $31,713 increase in gas and fuel costs, and a $3,078 increase in nonrecoverable insurance loss. Gas and fuel expense increased due to higher rates and usage. Depreciation expense is higher due to fixed asset additions. Repairs and maintenance are lower in 2003 due to a $10,045 decrease is nonrecurring structural repairs, partially offset by the following increases in expense: janitorial supplies and contracts, $3,383, maintenance salaries, $2,994, and recurring elevator maintenance, $1,748. Structural repairs decreased primarily due to 2002 non-recurring elevator repairs costing $10,482. General and administrative expenses during 2003 are lower than 2002, due to the following decreases in expense: professional fees, $10,576, and office and administrative expenses, $2,547, partially offset by the following increases in expense: legal and eviction fees, $3,323, office and administrative salaries and commission, $1,146, bad debt expense, $1,317, property insurance, $1,596. Professional fees are lower in 2003 primarily due to valuation expenses of $10,924 incurred in 2002. Management fees are lower due to reduced income. Overall expenses incurred by the Specified Properties for the six months ended June 30, 2003, of $1,168,791 increased approximately 4.2% from the six months ended June 30, 2002, of $1,121,310 primarily as a result of a combination of the foregoing factors affecting the Specified Properties. Management anticipates that operational expenses in 2003, excluding utilities, will be similar to those experienced in 2002. Operating income for the six months ended June 30, 2003, of $146,891 from Springdale Apartments decreased 23.7% from the six months ended June 30, 2002, of $192,431 primarily due to decreased revenue, and increased property operations, advertising and marketing, depreciation and general and administrative expenses, partially offset by decreased repair and maintenance costs. Operating income for the six months ended June 30, 2003, of $48,365 from Gold Coast Storage decreased 54.6% as compared to net income for the six months ended June 30, 2002, of $106,552 due primarily to decreased revenue, and increased property operations expense, partially offset by decreased general and administrative and management fee expenses. Neither the Partnership nor the Specified Properties earned interest income for the six months ended June 30, 2003. The Partnership and Springdale Apartments earned $970 and $1,616 respectively during the six months ended one year earlier. Interest income has steadily diminished due not only to declining interest rates but also due to increased bank fees that require higher offsetting compensating cash balances. The Partnership will be exploring new banking technology that should reduce service fees thereby lowering required offsetting cash balances, which in turn will restore interest earnings. Administrative expenses incurred by the Partnership for the six months ended June 30, 2003, of $74,988 increased by approximately 65.2% from the six months ended one year earlier of $45,390. General and administrative expenses increased $15,036 in the first six months of 2003, compared to the first six months of 2002, due primarily to the timing of payments made in the first and second quarters of 2003 for printing and postage expenses. Comparable expenses for 2002 were paid in the third quarter of 2002. Accounting and tax service fees increased $7,316. Professional fees increased $7,106 in the first six months of 2003, compared to the first six months of 2002, due, in part, to the timing of payments made in the first and second quarters of 2003 for professional fees. Comparable expenses for 2002 were paid in the third quarter of 2002. Overall net income for the six months ended June 30, 2003, of $120,268 decreased 52.8% from the six months ended June 30, 2002, of $254,563 due to increased expenses and decreased rental revenue as discussed above. Net cash flows provided by operations for the six months ended June 30, 2003, was $353,919 compared to net cash flows provided by operations of $437,421 for the six months ended June 30, 2002. The decrease was primarily the result of decreased net income before depreciation expense, partially offset by a lesser reduction in accounts payable and other liabilities. Expenditures on investment in real estate at the Specified Properties decreased to $162,328 for the six months ended June 30, 2003, compared to $167,661 for the same period one year ago. Additions to investment in real estate at Springdale Apartments for the six months ended June 30, 2003, included the renovation of six apartments, replacement of the water heater in one building and continued carpet, and appliance replacement as necessary. Additions to investment in real estate at Gold Coast Storage for the six months ended June 30, 2003 included exterior structural improvements, and fire window installation. Distributions to Limited Partners during the six months ended June 30, 2003 totaled $354,733 compared to distributions of $314,331 during the six months ended June 30, 2002. As discussed in "-Liquidity and Capital Resources" above, the Managing General Partner anticipates that 2003 expenditures on major repairs and improvements at the Specified Properties will exceed those incurred in 2001 and 2002. The level of distributions to the Limited Partners is dependent on the overall performance of the Specified Properties and on expenditures for major repairs and improvements. While the General Partners hope to increase net income generated by the Specified Properties in 2003 as compared to 2002 by increasing occupancy and rental rates, current economic conditions generally may limit their ability to do so. The General Partners believe that in certain markets, current economic conditions will continue to have a negative effect on the multifamily housing markets in part because of decreased home mortgage rates that have encouraged first time home purchases. Although a report issued by Fannie Mae in 2002 indicated that mortgage rates were expected to rise in 2002, such rates reached forty-year record low levels during the first half of 2003 and only slightly increased during the third quarter. The Managing General Partner cannot predict how or when such increases will impact demand for apartment properties like those at the Springdale Apartments or demand for storage. Future distributions to Limited Partners are dependent upon the Partnership achieving its budgeted goals during 2003 and other unknown factors. Some statements in this Form 10-QSB are forward looking and actual results may differ materially from those stated. As discussed herein, among the factors that may affect actual results are changes in rental rates, occupancy levels in the market place in which the Springdale Apartments and Gold Coast Storage compete and/or unanticipated changes in expenses or capital expenditures Item 3. Controls and Procedures. Evaluation of Disclosure Controls and Procedures The principal executive officer of our managing general partner, John F. Kennedy, and the principal financial officer of our managing general partner, Robert Mayer, evaluated on August 11, 2003 the effectiveness of the design and operation of our controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. As a result of this evaluation, these executive officers have concluded that, as of such date, the design and operation of our disclosure controls and procedures were adequate and designed to ensure that material information relating to us would be made known to them. Changes in Internal Controls Since the date of the evaluation of our disclosure controls and procedures by Mr. Kennedy and Mr. Mayer described above, there have been no significant changes in our internal controls or in other factors that could significantly affect our disclosure controls and procedures. PART II CHRISKEN PARTNERS CASH INCOME FUND L.P. (a Delaware Limited Partnership) Item 1. Legal Proceedings. The Partnership is not a party to any litigation other than litigation that the Managing General Partner believes is routine litigation incidental to the Partnership's business. In December 2001, John S. Marten, a former officer and trustee of ChrisKen Residential Trust ("CRT"), which controls CREMCO, L.L.C., the Partnership's management agent, sued CRT, CRT's three independent trustees, John F. Kennedy (a trustee of CRT and an officer of the Partnership's Managing General Partner) and CREMCO, L.L.C. (see MARTEN V. CHRISKEN RESIDENTIAL TRUST, ET AL., No. 01 CH 21979). Neither the Partnership nor the General Partners are parties to that litigation. The litigation is pending in the Circuit Court of Cook County, Illinois, County Department, Chancery Division. Items 2 through 5 are omitted because of the absence of conditions under which they are required. Item 6. Exhibits and Reports on Form 8-K. (A) Exhibits. 99.1 Certification of CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 99.2 Certification of CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (B) Reports on Form 8 - K. A Report Form 8-K was filed on June 6, 2003. No other reports on Form 8-K were filed during the quarter ended June 30, 2003. Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned thereto duly authorized. ChrisKen Partners Cash Income Fund L.P. (Registrant) By: ChrisKen Income Properties Inc., Managing General Partner Date: August 14, 2003 By: /s/John F. Kennedy ------------------------- John F. Kennedy Director and President CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, John F. Kennedy, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of ChrisKen Partners Cash Income Fund L.P., a Delaware limited partnership; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: August 14, 2003 /s/John F. Kennedy - ----------------------- John F. Kennedy Chief Executive Officer ChrisKen Income Properties, Inc., Managing General Partner ChrisKen Partners Cash Income Fund L.P. CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Robert Mayer, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of ChrisKen Partners Cash Income Fund L.P., a Delaware limited partnership; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: August 14, 2003 /s/Robert Mayer - ----------------------- Robert Mayer Chief Financial Officer ChrisKen Income Properties, Inc., Managing General Partner ChrisKen Partners Cash Income Fund L.P. EX-99 3 form10qsb_63003ex991.txt EXH. 99.1 KENNEDY Exhibit 99.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of ChrisKen Partners Cash Income Fund L.P., a Delaware limited partnership (the "Company"), on Form 10-QSB for the period ending June 30, 2003, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, John F. Kennedy, Chief Executive Officer of ChrisKen Income Properties, Inc., the managing general partner of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge and based on my review of the Report: 1. the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. By: ChrisKen Income Properties, Inc. Managing General Partner By: /s/ John F. Kennedy ----------------------------------- John F. Kennedy Chief Executive Officer August 14, 2003 A signed original of this written statement required by Section 906 has been provided to ChrisKen Partners Cash Income Fund L.P. and will be retained by ChrisKen Partners Cash Income Fund L.P. and furnished to the Securities and Exchange commission or its staff upon request. EX-99 4 form10qsb_63003ex992.txt EXH. 99.2 MAYER Exhibit 99.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of ChrisKen Partners Cash Income Fund L.P., a Delaware limited partnership (the "Company"), on Form 10-QSB for the period ending June 30, 2003, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Robert Mayer, Chief Financial Officer of ChrisKen Income Properties, Inc., the managing general partner of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge and based on my review of the Report: 1. the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. By: ChrisKen Income Properties, Inc. Managing General Partner By: /s/ Robert Mayer ----------------------------------- Robert Mayer Chief Financial Officer August 14, 2003 A signed original of this written statement required by Section 906 has been provided to ChrisKen Partners Cash Income Fund L.P. and will be retained by ChrisKen Partners Cash Income Fund L.P. and furnished to the Securities and Exchange commission or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----