-----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, OnKcuneaOOoYhNt8Dw6Rxe4GUPvt8BXn/6D8Lk7PeunrBVHUF7GS3VLne1giBBWP 8nCMnrWZ25CDKyV5Ss6CrA== 0001169232-02-002735.txt : 20021113 0001169232-02-002735.hdr.sgml : 20021113 20021113102307 ACCESSION NUMBER: 0001169232-02-002735 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20020930 FILED AS OF DATE: 20021113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KRUPP INSURED PLUS III LIMITED PARTNERSHIP CENTRAL INDEX KEY: 0000832091 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189] IRS NUMBER: 043007489 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-17691 FILM NUMBER: 02818684 BUSINESS ADDRESS: STREET 1: ONE BEACON ST CITY: BOSTON STATE: MA ZIP: 02108 BUSINESS PHONE: 6175230066 MAIL ADDRESS: STREET 1: ONE BEACON ST CITY: BOSTON STATE: MA ZIP: 02108 10-Q 1 d52502_10-q.txt QUARTERLY REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2002 OR |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to _________________ Commission file number 0-17691 Krupp Insured Plus-III Limited Partnership Massachusetts 04-3007489 (State or other jurisdiction of (IRS employer incorporation or organization) identification no.) One Beacon Street, Boston, Massachusetts 02108 (Address of principal executive offices) (Zip Code) (617) 523-0066 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes |X| No |_| Indicate by check mark whether the registrant is an accelerated filer (as defined by Rule 12b-2 of the Exchange Act). Yes |_| No |X| PART I. FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS This Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. When used in this Form 10-Q, the words "believes," "anticipates," "expects," "plans," "intends," "estimates," "continue," "may" or "will" (or the negative of such words) and similar expressions are intended to identify forward-looking statements. Such statements are subject to a number of risks and uncertainties, including but not limited to the following: federal, state or local regulations; adverse changes in general economic or local conditions; prepayments of mortgages; failure of borrowers to pay participation interests due to poor operating results of properties underlying the mortgages; uninsured losses and potential conflicts of interest between the Partnership and its Affiliates, including the General Partners. The Company's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2001, contain additional information concerning such risk factors. Actual results in the future could differ materially from those described in any forward-looking statements as a result of the risk factors set forth above, and the risk factors described in the Annual Report. -2- KRUPP INSURED PLUS-III LIMITED PARTNERSHIP BALANCE SHEETS ------- ASSETS
September 30, December 31, 2002 2001 ------------ ------------ Participating Insured Mortgages ("PIMs")(Note 2) $ 12,920,891 $ 27,762,795 Mortgage-Backed Securities and insured mortgage ("MBS")(Note 3) 10,498,500 11,407,452 ------------ ------------ Total mortgage investments 23,419,391 39,170,247 Cash and cash equivalents 1,380,705 1,900,744 Interest receivable and other assets 159,230 275,094 Prepaid acquisition fees and expenses, net of accumulated amortization of $955,545 -- 36,194 Prepaid participation servicing fees, net of accumulated amortization of $319,934 and $293,743, respectively 8,730 34,921 ------------ ------------ Total assets $ 24,968,056 $ 41,417,200 ============ ============ LIABILITIES AND PARTNERS' EQUITY Liabilities $ 15,939 $ 17,877 ------------ ------------ Partners' equity (deficit) (Note 4): Limited Partners (12,770,261 Limited Partner interests outstanding) 25,003,625 41,486,071 General Partners (199,061) (217,863) Accumulated comprehensive income 147,553 131,115 ------------ ------------ Total Partners' equity 24,952,117 41,399,323 ------------ ------------ Total liabilities and Partners' equity $ 24,968,056 $ 41,417,200 ============ ============
The accompanying notes are an integral part of the financial statements. -3- KRUPP INSURED PLUS-III LIMITED PARTNERSHIP STATEMENTS OF INCOME AND COMPREHENSIVE INCOME -------
For the Three Months For the Nine Months Ended September 30, Ended September 30, ------------------- ----------------------- 2002 2001 2002 2001 -------- -------- ---------- ---------- Revenues: Interest income - PIMs: Basic interest $258,595 $569,759 $ 880,393 $1,941,397 Participation interest -- -- 1,339,172 25,000 Interest income - MBS 197,883 221,734 609,225 679,593 Other interest income 7,492 28,960 49,464 87,858 -------- -------- ---------- ---------- Total revenues 463,970 820,453 2,878,254 2,733,848 -------- -------- ---------- ---------- Expenses: Asset management fee to an affiliate 44,279 74,621 142,563 244,092 Expense reimbursements to affiliates 26,817 24,987 72,898 71,332 Amortization of prepaid fees and expenses 8,730 39,188 62,385 174,823 General and administrative 29,095 68,217 108,252 119,951 -------- -------- ---------- ---------- Total expenses 108,921 207,013 386,098 610,198 -------- -------- ---------- ---------- Net income 355,049 613,440 2,492,156 2,123,650 Other comprehensive income: Net change in unrealized gain on MBS 1,001 61,029 16,438 58,584 -------- -------- ---------- ---------- Total comprehensive income $356,050 $674,469 $2,508,594 $2,182,234 ======== ======== ========== ========== Allocation of net income (Note 4): Limited Partners $344,397 $595,036 $2,417,391 $2,059,940 ======== ======== ========== ========== Average net income per Limited Partner interest (12,770,261 Limited Partner interests outstanding) $ .03 $ .05 $ .19 $ .16 ======== ======== ========== ========== General Partners $ 10,652 $ 18,404 $ 74,765 $ 63,710 ======== ======== ========== ==========
The accompanying notes are an integral part of the financial statements. -4- KRUPP INSURED PLUS-III LIMITED PARTNERSHIP STATEMENTS OF CASH FLOWS -------
For the Nine Months Ended September 30, --------------------------- 2002 2001 ------------ ----------- Operating activities: Net income $ 2,492,156 $ 2,123,650 Adjustments to reconcile net income to net cash provided by operating activities: Amortization of prepaid fees and expenses 62,385 174,823 Shared Appreciation Interest (1,004,379) (15,000) Changes in assets and liabilities: Decrease in interest receivable and other assets 115,864 52,914 Increase (decrease) in liabilities (1,938) 132,548 ------------ ----------- Net cash provided by operating activities 1,664,088 2,468,935 ------------ ----------- Investing activities: Principal collections on PIMs including Shared Appreciation Interest of $1,004,379 in 2002 and $15,000 in 2001 15,846,283 6,835,529 Principal collections on MBS 925,390 794,941 ------------ ----------- Net cash provided by investing activities 16,771,673 7,630,470 ------------ ----------- Financing activities: Quarterly distributions (3,120,800) (6,768,186) Special distributions (15,835,000) (3,140,502) ------------ ----------- Net cash used for financing activities (18,955,800) (9,908,688) ------------ ----------- Net increase (decrease) in cash and cash equivalents (520,039) 190,717 Cash and cash equivalents, beginning of period 1,900,744 1,910,212 ------------ ----------- Cash and cash equivalents, end of period $ 1,380,705 $ 2,100,929 ============ =========== Non cash activities: Increase in Fair Value of MBS $ 16,438 $ 58,584 ============ ===========
The accompanying notes are an integral part of the financial statements. -5- KRUPP INSURED PLUS-III LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS ------- 1. Accounting Policies Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted in this report on Form 10-Q pursuant to the Rules and Regulations of the Securities and Exchange Commission. However, in the opinion of the general partners, Krupp Plus Corporation and Mortgage Services Partners Limited Partnership, (collectively the "General Partners") of Krupp Insured Plus-III Limited Partnership (the "Partnership"), the disclosures contained in this report are adequate to make the information presented not misleading. See Notes to Financial Statements included in the Partnership's Form 10-K for the year ended December 31, 2001 for additional information relevant to significant accounting policies followed by the Partnership. In the opinion of the General Partners of the Partnership, the accompanying unaudited financial statements reflect all adjustments (consisting of only normal recurring accruals) necessary to present fairly the Partnership's financial position as of September 30, 2002, its results of operations for the three and nine months ended September 30, 2002 and 2001 and its cash flows for the nine months ended September 30, 2002 and 2001. The results of operations for the three and nine months ended September 30, 2002 are not necessarily indicative of the results which may be expected for the full year. See Management's Discussion and Analysis of Financial Condition and Results of Operations included in this report. 2. PIMs At September 30, 2002, the Partnership's remaining PIM had a fair market value of $13,849,645 and a gross unrealized gain of $928,754. Fair value assumes that the GNMA MBS portion of the PIM could be sold at prices that MBS with similar interest rates are currently being sold at. Fair value does not include any value for the participation features. The PIM matures in 2031. The Partnership received a prepayment of the Royal Palm Place PIM. On January 2, 2002, the Partnership received $1,004,379 of Shared Appreciation Interest and $334,793 of Minimum Additional Interest. On February 25, 2002, the Partnership received $14,764,062 representing the principal proceeds on the first mortgage. On March 19, 2002, the Partnership paid a special distribution of $1.24 per Limited Partner interest from the principal proceeds and Shared Appreciation Interest received. 3. MBS At September 30, 2002, the Partnership's MBS portfolio had an amortized cost of $2,458,784 and gross unrealized gains of $147,553. At September 30, 2002, the Partnership's insured mortgage loan had an amortized cost of $7,892,163 and a gross unrealized gain of $474,872. The portfolio has maturities ranging from 2016 to 2035. Continued -6- KRUPP INSURED PLUS-III LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS, Continued ------- 4. Changes in Partners' Equity A summary of changes in Partners' Equity for the nine months ended September 30, 2002 is as follows:
Accumulated Total Limited General Comprehensive Partners' Partners Partners Income Equity ------------ --------- -------- ------------ Balance at December 31, 2001 $ 41,486,071 $(217,863) $131,115 $ 41,399,323 Net income 2,417,391 74,765 -- 2,492,156 Special distribution (15,835,000) -- -- (15,835,000) Quarterly distributions (3,064,837) (55,963) -- (3,120,800) Change in unrealized gain on MBS -- -- 16,438 16,438 ------------ --------- -------- ------------ Balance at September 30, 2002 $ 25,003,625 $(199,061) $147,553 $ 24,952,117 ============ ========= ======== ============
-7- Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis should be read in conjunction with the financial statements and accompanying notes contained in the Partnership's 2001 Annual Report on Form 10-K and in this Form 10-Q. Certain statements in this Management's Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this Form 10-Q constitute "forward-looking statements" within the meaning of the Federal Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the Partnership's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. These factors include, among other things, federal, state or local regulations; adverse changes in general economic or local conditions; prepayments of mortgages; failure of borrowers to pay participation interests due to poor operating results at properties underlying the mortgages; uninsured losses and potential conflicts of interest between the Partnership and its Affiliates, including the General Partners. Liquidity and Capital Resources At September 30, 2002, the Partnership had liquidity consisting of cash and cash equivalents of approximately $1.4 million as well as the cash flow provided by its investments in the remaining PIM and MBS. The Partnership anticipates that these sources will be adequate to provide the Partnership with sufficient liquidity to meet its obligations as well as to provide distributions to its investors. The most significant demands on the Partnership's liquidity is the quarterly distributions paid to investors, which are approximately $1.0 million. Funds for quarterly distributions come from the monthly principal and basic interest payments received on the remaining PIM and MBS, the principal prepayments of MBS, interest earned on the Partnership's cash and cash equivalents and cash reserves. The portion of distributions attributable to the principal collections and cash reserves reduces the capital resources of the Partnership. As the capital resources decrease, the total cash flows to the Partnership also will decrease and over time will result in periodic adjustments to the distributions paid to investors. The General Partners periodically review the distribution rate to determine whether an adjustment is necessary based on projected future cash flows. In general, the General Partners try to set a distribution rate that provides for level quarterly distributions. To the extent that quarterly distributions do not fully utilize the cash available for distributions and cash balances increase, the General Partners may adjust the distribution rate or distribute such funds through a special distribution. Based on current projections, the General Partners have determined that the Partnership will reduce its distribution rate of $0.08 per Limited Partner interest per quarter to $0.04 per Limited Partner interest per quarter effective with the February 2003 distribution. The Partnership received a prepayment of the Royal Palm Place PIM. On January 2, 2002, the Partnership received $1,004,379 of Shared Appreciation Interest and $334,793 of Minimum Additional Interest. On February 25, 2002, the Partnership received $14,764,062 representing the principal proceeds on the first mortgage. On March 19, 2002, the Partnership paid a special distribution of $1.24 per Limited Partner interest from the principal proceeds and Shared Appreciation Interest received. In addition to providing insured and guaranteed monthly principal and basic interest payments from the GNMA MBS portion of the PIM, the Partnership's remaining PIM investment also may provide additional income through a participation interest in the underlying property. The Partnership may receive a share in any operating cash flow that exceeds debt service obligations and capital needs or a share in any appreciation in value when the property is sold or refinanced. However, this participation is neither guaranteed nor insured, and it is dependent upon whether property operations or its terminal value meet certain criteria. The Partnership's only remaining PIM investment is backed by the first mortgage loan on Harbor Club. Presently, the General Partners do not expect Harbor Club to pay the Partnership any participation interest or to be sold or refinanced during 2002. However, if favorable market conditions provide the borrower an opportunity to sell the property, there are no contractual obligations remaining that would prevent a -8- prepayment of the underlying first mortgage. Harbor Club operates in Ann Arbor, Michigan, which is a very competitive market with many newer apartment properties. Although Harbor Club has maintained occupancy rates in the mid 90% range for the past two years, most cash flow generated by the property is used for capital replacements and improvements that help it maintain its market position. For fiscal year 2001, the property generated surplus cash and the Partnership has billed the borrower approximately $83,000 in participation interest. The Partnership received a letter from the borrower proposing that the surplus cash be used for repairs and maintenance to the property. The Partnership has not agreed to this proposal. The Partnership intends to send a default notice to the borrower and is evaluating its options. The Partnership has the option to call its remaining PIM by accelerating the maturity of the loan. If the call feature is exercised then the insurance feature of the loan would be canceled. Therefore, the Partnership will determine the merits of exercising the call option as economic conditions warrant. Such factors as the condition of the asset, local market conditions, the interest rate environment and availability of financing will affect this decision. Critical Accounting Policy The Partnership's critical accounting policy relates primarily to revenue recognition related to the participation feature of the Partnership's PIM investments. The Partnership's policy is as follows: Basic interest on PIMs is recognized based on the stated coupon rate of the GNMA MBS. The Partnership recognizes interest related to the participation features when the amount becomes fixed and the transaction that gives rise to such amount is consummated. Consummation of a transaction could be the sale or refinancing of the underlying real estate, which results in a cash payment to the Partnership or a cash payment to the Partnership from Surplus Cash relative to the participation feature Results of Operations Net income decreased during the three months ended September 30, 2002 when compared to the same period in 2001 due primarily to decreases in basic interest income on PIMs, interest income on MBS and other interest income net of decreases in asset management fees, amortization expense and general and administrative expenses. Basic interest income on PIMs decreased due to the payoff of the Royal Palm Place PIM in the first quarter of 2002. Interest income on MBS decreased due to lower principal balances which resulted from on-going repayments and prepayments. Other interest income decreased due to lower average cash balances available for short-term investing and lower interest rates earned on those balances in the three month period when compared to the same period in 2001. Asset management fees decreased due to the decline in the Partnership's asset base as a result of principal collections and prepayments. Amortization expense decreased due to the full recognition of prepaid acquisition fees and expenses associated with the Harbor Club PIM in 2001. General and administrative expenses decreased due to a delay in the billing of the third quarter 2001 processing costs. Due to the delay, an estimate of these costs was recorded. This estimate was approximately $13,000 too high and was adjusted in the fourth quarter of 2001. Net income increased during the nine months ended September 30, 2002 when compared to the same period in 2001 primarily due to an increase in participation income. This was partially offset by a decrease in basic interest income on PIMs. Participation income increased due to the payoff of the Royal Palm Place PIM in the first quarter of 2002. Basic interest income on PIMs decreased due to the Royal Palm Place PIM payoff noted above and the Casa Marina PIM payoff in June of 2001. Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Assessment of Credit Risk The Partnership's investments in MBS are guaranteed and/or insured by the Government National Mortgage Association ("GNMA"), Fannie Mae, the Federal Home Loan Mortgage Corporation ("FHLMC") or the Department of Housing and Urban Development ("HUD") and therefore the certainty of their cash flows and the risk of material loss of the amounts invested depends on the creditworthiness of these entities. -9- Fannie Mae is a federally chartered private corporation that guarantees obligations originated under its programs. FHLMC is a federally chartered corporation that guarantees obligations originated under its. These obligations are not guaranteed by the U.S. Government or the Federal Home Loan Bank Board. However, Fannie Mae and FHLMC are two of the largest corporations in the United States with significant experience in mortgage securitizations. In addition, their MBS instruments carry the highest credit rating given to financial instruments. GNMA guarantees the full and timely payment of principal and basic interest on the securities it issues, which represent interests in pooled mortgages insured by HUD. Obligations insured by HUD, an agency of the U.S. Government, are backed by the full faith and credit of the U.S. Government. At September 30, 2002, the Partnership includes in cash and cash equivalents approximately $1.0 million of commercial paper, which is issued by entities with a credit rating equal to one of the top two rating categories of a nationally recognized statistical rating organization. Interest Rate Risk The Partnership's primary market risk exposure is to interest rate risk, which can be defined as the exposure of the Partnership's net income, comprehensive income or financial condition to adverse movements in interest rates. At September 30, 2002, the Partnership's remaining PIM and MBS comprise the majority of the Partnership's assets. Decreases in interest rates may accelerate the prepayment of the Partnership's investments. The Partnership does not utilize any derivatives or other instruments to manage this risk as the Partnership plans to hold its PIM investment to expected maturity while it is expected that substantially all of the MBS will prepay over the same time period thereby mitigating any potential interest rate risk to the disposition value of any remaining MBS The Partnership monitors prepayments and considers prepayment trends, as well as distribution requirements of the Partnership, when setting regular distribution policy. For MBS, the Partnership forecasts prepayments based on trends in similar securities as reported by statistical reporting entities such as Bloomberg. For its remaining PIM, the Partnership continues to monitor the borrower for any indication of a prepayment. Item 4. CONTROLS AND PROCEDURES (a) Evaluation of Disclosure Controls and Procedures Within the 90 days prior to the date of this Quarterly Report on Form 10-Q, the Principal Executive Officer and Chief Accounting Officer of Krupp Plus Corporation, a general partner of the Partnership, carried out an evaluation of the effectiveness of the design and operation of the Partnership's disclosure controls and procedures. Based upon that evaluation, the Principal Executive Officer and the Chief Accounting Officer concluded that the Partnership's disclosure controls and procedures were effective as of the date of their evaluation in timely alerting them to material information relating to the Partnership required to be included in this Quarterly Report on Form 10-Q. (b) Changes in Internal Controls There were no significant changes in the Partnership's internal controls or in other factors that could significantly affect such internal controls subsequent to the date of the evaluation described in paragraph(a) above. -10- KRUPP INSURED PLUS-III LIMITED PARTNERSHIP PART II - OTHER INFORMATION Item 1. Legal Proceedings None Item 2. Changes in Securities None Item 3. Defaults upon Senior Securities None Item 4. Submission of Matters to a Vote of Security Holders None Item 5. Other information None Item 6. Exhibits and Reports on Form 8-K (a) Exhibits (99.1) Principal Executive Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (99.2) Chief Accounting Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section906 of the Sarbanes-Oxley Act of 2002. (b) Reports on Form 8-K None -11- SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Krupp Insured Plus-III Limited Partnership (Registrant) BY: /s/ Robert A. Barrows ------------------------------------------ Robert A. Barrows Treasurer and Chief Accounting Officer of Krupp Plus Corporation, a General Partner. DATE: November 11, 2002 -12- Certifications I, Douglas Krupp, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Krupp Insured Plus - III 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 we 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 function): 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 officers 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: November 11, 2002 /s/ Douglas Krupp ---------------------------------- Douglas Krupp Principal Executive Officer -13- Certifications I, Robert A. Barrows, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Krupp Insured Plus - III 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 we 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 function): 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 officers 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: November 11, 2002 /s/ Robert A. Barrows ---------------------------------- Robert A. Barrows Chief Accounting Officer -14- EX-99.1 3 d52502_ex99-1.txt CERTIFICATION 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 Krupp Insured Plus III Limited Partnership (the "Partnership") on Form 10-Q for the period ending September 30, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Douglas Krupp, Co-Chariman (Principal Executive Officer), President and Director of Krupp Plus Corporation, a General Partner of the Partnership, certify, pursuant to U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that: (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 results of operations of the Partnership as of September 30, 2002 (the last date of the period covered by the Report). /s/ Douglas Krupp - ------------------------------ Douglas Krupp, Principal Executive Officer EX-99.2 4 d52502_ex99-2.txt CERTIFICATION 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 Krupp Insured Plus III Limited Partnership (the "Partnership") on Form 10-Q for the period ending September 30, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Robert A. Barrows, Chief Accounting Officer of Krupp Plus Corporation, a General Partner of the Partnership, certify, pursuant to U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that: (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 results of operations of the Partnership as of September 30, 2002 (the last date of the period covered by the Report). /s/ Robert A. Barrows - -------------------------------- Robert A. Barrows, Chief Accounting Officer -----END PRIVACY-ENHANCED MESSAGE-----