10QSB 1 0001.txt QH IV 12/00 10QSB February 14, 2001 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 Re: Boston Financial Qualified Housing Tax Credits L.P. IV Report on Form 10-QSB for the Quarter Ended December 31, 2000 File Number 0-19765 Dear Sir/Madam: Pursuant to the requirements of section 15(d) of the Securities Exchange Act of 1934, there is filed herewith a copy of subject report. Very truly yours, /s/Stephen Guilmette Stephen Guilmette Assistant Controller QH4-Q3.DOC UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (Mark One) [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2000 ------------------------------------------ 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 0-19765 Boston Financial Qualified Housing Tax Credits L.P. IV ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Massachusetts 04-3044617 ----------------------------- --------------------------- (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 101 Arch Street, Boston, Massachusetts 02110-1106 ----------------------------------------------- ---------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (617) 439-3911 ---------------------------- 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 . BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV (A Limited Partnership) TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION Page No. ------------------------------ -------- Item 1. Financial Statements Balance Sheet - December 31, 2000 (Unaudited) 1 Statements of Operations (Unaudited) - For the Three and Nine Months Ended December 31, 2000 and 1999 2 Statement of Changes in Partners' Equity (Deficiency) (Unaudited) - For the Nine Months Ended December 31, 2000 3 Statements of Cash Flows (Unaudited) - For the Nine Months Ended December 31, 2000 and 1999 4 Notes to the Financial Statements (Unaudited) 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 PART II - OTHER INFORMATION Items 1-6 11 SIGNATURE 12
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV (A Limited Partnership) BALANCE SHEET December 31, 2000 (Unaudited)
Assets Cash and cash equivalents $ 151,927 Marketable securities, at fair value 778,627 Investments in Local Limited Partnerships, net (Note 1) 16,497,880 Other assets 12,890 ------------- Total Assets $ 17,441,324 ============= Liabilities and Partners' Equity Accounts payable to affiliate $ 589,935 Accounts payable and accrued expenses 81,225 ------------- Total Liabilities 671,160 ------------- General, Initial and Investor Limited Partners' Equity 16,765,365 Net unrealized gains on marketable securities 4,799 ------------- Total Partners' Equity 16,770,164 ------------- Total Liabilities and Partners' Equity $ 17,441,324 =============
The accompanying notes are an integral part of these financial statements. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV (A Limited Partnership) STATEMENTS OF OPERATIONS For the Three and Nine Months Ended December 31, 2000 and 1999 (Unaudited)
Three Months Ended Nine Months Ended December 31, December 31, December 31, 1999 December 31, 1999 2000 (Restated) 2000 (Restated) ------------- ------------- -------------- ------------ Revenue: Investment $ 13,869 $ 13,414 $ 41,251 $ 39,996 Other 1,350 (33,971) 121,652 88,595 ------------- ------------- -------------- -------------- Total Revenue 15,219 (20,557) 162,903 128,591 ------------- ------------- -------------- -------------- Expenses: Asset management fee, related party 45,776 46,669 137,328 136,273 General and administrative, (includes reimbursements to an affiliate in the amounts of $163,714 and $80,468 in 2000 and 1999, respectively) 145,699 94,420 313,291 294,059 Provision for valuation of investments in Local Limited Partnerships 73,583 208,112 132,012 423,457 Amortization 16,400 16,297 49,202 49,202 ------------- ------------- -------------- -------------- Total Expenses 281,458 365,498 631,833 902,991 ------------- ------------- -------------- -------------- Loss before equity in income (loss) of Local Limited Partnerships and loss on liquidation of interest in Local Limited Partnership (266,239) (386,055) (468,930) (774,400) Equity in income (loss) of Local Limited Partnerships (Note 1) (115,435) 2,238,622 (186,554) 2,049,637 Loss on liquidation of interest in Local Limited Partnership (Note 2) - - - (6,486) ------------- ------------- -------------- -------------- Net Income (Loss) $ (381,674) $ 1,852,567 $ (655,484) $ 1,268,751 ============= ============= ============== ============== Net Income (Loss) allocated: To General Partners $ (3,817) $ 18,526 $ (6,555) $ 12,688 To Limited Partners (377,857) 1,834,041 (648,929) 1,256,063 ------------- ------------- -------------- -------------- $ (381,674) $ 1,852,567 $ (655,484) $ 1,268,751 ============= ============= ============== ============== Net Income (Loss) per Limited Partnership Unit (68,043 Units) $ (5.56) $ 26.95 $ (9.54) $ 18.46 ============= ============= ============= ==============
The accompanying notes are an integral part of these financial statements. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV (A Limited Partnership) STATEMENT OF CHANGES IN PARTNERS' EQUITY (Deficiency) For the Nine Months Ended December 31, 2000 (Unaudited)
Net Initial Investor Unrealized General Limited Limited Gains Partners Partner Partners (Losses) Total Balance at March 31, 2000 $ (416,878) $ 5,000 $ 17,832,727 $ (3,991) $ 17,416,858 ------------- ------------- ------------- ------------- ------------- Comprehensive Income (Loss): Change in net unrealized losses on marketable securities available for sale - - - 8,790 8,790 Net Loss (6,555) - (648,929) - (655,484) ------------- ------------- ------------- ------------- ------------- Comprehensive Income (Loss) (6,555) - (648,929) 8,790 (646,694) ------------- ------------- ------------- ------------- ------------- Balance at December 31, 2000 $ (423,433) $ 5,000 $ 17,183,798 $ 4,799 $ 16,770,164 ============= ============= ============= ============= =============
The accompanying notes are an integral part of these financial statements. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV (A Limited Partnership) STATEMENTS OF CASH FLOWS For the Nine Months Ended December 31, 2000 and 1999 (Unaudited)
1999 2000 (Restated) ------------- ------------ Net cash used for operating activities $ (102,583) $ (322,643) Net cash provided by investing activities 167,323 207,284 ------------- ------------- Net increase (decrease) in cash and cash equivalents 64,740 (115,359) Cash and cash equivalents, beginning 87,187 243,072 ------------- ------------- Cash and cash equivalents, ending $ 151,927 $ 127,713 ============= =============
The accompanying notes are an integral part of these financial statements. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV (A Limited Partnership) Notes to Financial Statements (Unaudited) The unaudited financial statements presented herein have been prepared in accordance with the instructions to Form 10-QSB and do not include all of the information and note disclosures required by generally accepted accounting principles. These statements should be read in conjunction with the financial statements and notes thereto included with the Partnership's Form 10-KSB for the year ended March 31, 2000. In the opinion of management, these financial statements include all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the Partnership's financial position and results of operations. The results of operations for the periods may not be indicative of the results to be expected for the year. The Managing General Partner has elected to report results of the Local Limited Partnerships on a 90 day lag basis, because the Local Limited Partnerships report their results on a calendar year basis. Accordingly, the financial information of the Local Limited Partnerships that is included in the accompanying financial statements is as of September 30, 2000 and 1999. 1. Investments in Local Limited Partnerships The Partnership uses the equity method to account for its limited partnership interests in twenty-three Local Limited Partnerships which own and operate multi-family housing complexes, most of which are government-assisted. The Partnership, as Investor Limited Partner pursuant to the various Local Limited Partnership Agreements, which contain certain operating and distribution restrictions, has acquired a 99% interest in the profits, losses, tax credits and cash flows from operations of each of the Local Limited Partnerships. Upon dissolution, proceeds will be distributed according to each respective partnership agreement. The following is a summary of investments in Local Limited Partnerships at December 31, 2000:
Capital contributions and advances paid to Local Limited Partnerships and purchase price paid to withdrawing partners of Local Limited Partnerships $ 47,037,952 Cumulative equity in losses of Local Limited Partnerships (excluding cumulative unrecognized losses of $8,877,798) (27,762,848) Cumulative cash distributions received from Local Limited Partnerships (2,881,580) ------------- Investments in Local Limited Partnerships before adjustment 16,393,524 Excess of investment cost over the underlying net assets acquired: Acquisition fees and expenses 3,669,346 Accumulated amortization of acquisition fees and expenses (966,282) ------------- Investments in Local Limited Partnerships before reserve for valuation 19,096,588 Reserve for valuation of investments in Local Limited Partnerships (2,598,708) ------------- Investments in Local Limited Partnerships $ 16,497,880 =============
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV (A Limited Partnership) Notes to the Financial Statements (continued) (Unaudited) 1. Investments in Local Limited Partnerships (continued) ---------------------------------------------------- The Partnership's share of the net losses of the Local Limited Partnerships for the nine months ended December 31, 2000 is $1,580,368. For the nine months ended December 31, 2000, the Partnership has not recognized $1,393,814 of equity in losses relating to certain Local Limited Partnerships where cumulative equity in losses and cumulative distributions exceeded its total investments in these Local Limited Partnerships. 2. Liquidation of Interest in Local Limited Partnership For financial reporting purposes, loss on liquidation of interest in Local Limited Partnership of $6,486 was recognized in the nine months ended December 31, 1999 as a result of the transfer of Gateway Village. 3. Litigation As previously reported, Bentley Court, located in Columbia, South Carolina, continues to generate deficits. The IRS has taken the position to disallow all of the tax credits for this project for 1993, 1994 and 1995. As a result of the former Local General Partner's disputes with the IRS, tax returns have not yet been filed for 1996, 1997, 1998 and 1999 for this local partnership. However, it is anticipated that the IRS will take a comparable complete disallowance position for those tax years, too. On behalf of the Partnership, the Managing General Partner retained counsel to vigorously appeal and contest the findings in the IRS report in order to minimize the loss of credits. The Local General Partner for this property was indicted on various criminal charges. The Local General Partner pled guilty to two of these counts. In the opinion of Management, there is a substantial risk that Bentley Court and, consequently, the Partnership will suffer substantial tax credit recapture and/or credit disallowance as a result of the problems at this property. However, it is not possible to quantify the risk until the appeal and litigation process with the IRS is completed. Additionally, the Managing General Partner replaced the Local General Partner with an affiliated entity and replaced the property management company with an unaffiliated entity. The Managing General Partner will continue to monitor property operations closely. As a result of the continuing tax issues at this property, Management has decided to fully reserve the Partnership's investment in Bentley Court. On April 28, 2000, the Managing General Partner, on behalf of the Partnership, filed suit against the former General Partners of Bentley Court alleging mismanagement of the Local Limited Partnership. The Partnership is not a party to any other pending legal or administrative proceeding, and to the best of its knowledge, no legal or administrative proceeding is threatened or contemplated against it. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV (A Limited Partnership) MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Certain matters discussed herein constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Partnership intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements and is including this statement for purposes of complying with these safe harbor provisions. Although the Partnership believes the forward-looking statements are based on reasonable assumptions, the Partnership can give no assurance that their expectations will be attained. Actual results and timing of certain events could differ materially from those projected in or contemplated by the forward-looking statements due to a number of factors, including, without limitation, general economic and real estate conditions and interest rates. Liquidity and Capital Resources At December 31, 2000 the Partnership had an increase in cash and cash equivalents of $64,740 from $87,187 at March 31, 2000 to $151,927 at December 31, 2000. The increase is mainly attributable to cash provided by proceeds from sales and maturities of marketable securities and cash distributions received from Local Limited Partnerships. These increases are partially offset by cash used for operating activities and cash used for purchases of marketable securities. The Managing General Partner initially designated 4% of the Gross Proceeds as Reserves, as defined in the Partnership Agreement. The Reserves were established to be used for working capital of the Partnership and contingencies related to the ownership of Local Limited Partnership interests. Funds totaling approximately $1,367,000 have been withdrawn from the Reserve account to pay legal fees relating to various property issues. To date, Reserve funds in the amount of approximately $304,000 have been used to make additional capital contributions to a Local Limited Partnership. To date, the Partnership has used approximately $943,000 of operating funds to replenish Reserves. At December 31, 2000, approximately $629,000 of cash, cash equivalents and marketable securities has been designated as Reserves. Management believes that the investment income earned on the Reserves, along with cash distributions received from Local Limited Partnerships, to the extent available, will be sufficient to fund the Partnership's ongoing operations. Reserves may be used to fund Partnership operating deficits, if the Managing General Partner deems funding appropriate. If Reserves are not adequate to cover the Partnership's operations, the Partnership will seek other financing sources including, but not limited to, the deferral of Asset Management Fees to an affiliate of the Managing General Partner or working with Local Limited Partnerships to increase cash distributions. In the event a Local Limited Partnership encounters operating difficulties requiring additional funds, the Partnership's management might deem it in its best interests to voluntarily provide such funds in order to protect its investment. In addition to the $1,367,000 noted above, the Partnership also advanced approximately $1,364,000 to Local Limited Partnerships to fund operating deficits. Since the Partnership invests as a limited partner, the Partnership has no contractual obligation to provide additional funds to Local Limited Partnerships beyond its specified investment. Thus, at December 31, 2000, the Partnership had no contractual or other obligation to any Local Limited Partnership which had not been paid or provided for. Cash Distributions No cash distributions were made during the nine months ended December 31, 2000. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV (A Limited Partnership) MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) Results of Operations The Partnership's results of operations for the three and nine months ended December 31, 2000 resulted in net losses of $381,674 and $655,484, respectively as compared to net income of $1,852,567 and $1,268,751, respectively for the same periods in 1999. The decreases in net income are primarily due to an increase in equity in losses of Local Limited Partnerships and an increase in general and administrative expenses. These expense increases are offset by a decrease in provision for valuation of investments in Local Limited Partnerships. Equity in losses of Local Limited Partnerships increased because of a $2,482,000 gain on cancellation of indebtedness recorded in the prior year. The provision for valuation of investments in Local Limited Partnerships was incurred during the nine months ended December 31, 1999 due to the write-off of advances to the Local Limited Partnerships. The increase in general and administrative expense is primarily due to increased charges from an affiliate of the General Partner for operational and administrative expenses necessary for the operation of the Partnership. The increased charges pertained to higher levels of staffing and salary levels at the affiliate in addition to changes in the affiliate's allocation of operational and administrative expenses to more accurately reflect the actual cost of services provided to the Partnership. Property Discussions As previously reported, Audobon Apartments (Boston, Massachusetts) and Brown Kaplan (Dorchester, Massachusetts), operate below break-even. Both properties receive a material amount of income subsidies through the State Housing Assistance Rental Program (SHARP). As originally conceived, the SHARP subsidy was scheduled to decline over time to match increases in net operating income. However, increases in net operating income failed to keep pace with the decline in the SHARP subsidy. Many of the SHARP properties (including Audobon Apartments and Brown Kaplan) sought restructuring workouts with the lender, Massachusetts Housing Finance Agency ("MHFA") that included additional subsidies in the form of Operating Deficit Loans ("ODL's"). In July 1997, MHFA refused to close the restructuring for Brown Kaplan. Effective October 1, 1997, MHFA, which provided the SHARP subsidies, withdrew funding of the ODL's from its portfolio of 77 subsidized properties. Properties unable to make full debt service payments were declared in default by MHFA. The Managing General Partner has joined a group of SHARP property owners called the Responsible SHARP Owners, Inc. (RSO) to find a solution to the problems that will result from the withdrawn subsidies. On September 16, 1998, the Partnership joined with the RSO and about 20 other SHARP property owners and filed suit against the MHFA (Mass. Sup. Court Civil Action #98-4720). Among other things, the suit seeks to enforce the MHFA's previous financial commitments to the SHARP properties. The lawsuit is complex and in its early stages, so no predictions can be made at this time as to the ultimate outcome. In the meantime, the Managing General Partner intends to continue to participate in the RSO's efforts to negotiate a resolution of this matter with MHFA. As a result of the existing operating deficits, Audobon was foreclosed on March 30, 2000. The foreclosure resulted in recapture of credits of approximately $30.60 per unit which will be on your 2000 Schedule K-1 that will be filed in April of 2001. In addition, the foreclosure will result in the allocation of taxable income to the Partnership and loss of future benefits associated with this property. Due to concerns regarding the long-term viability of Brown Kaplan, the Managing General Partner negotiated a plan with the Local General Partner that will ultimately transfer the Partnership's interest in the property to the Local General Partner. The plan includes provisions to minimize the risk of recapture. Effective November 30, 1999, the Managing General Partner consummated the transfer of 49.5% of the Partnership's capital and profits in the property to the Local General Partner. Effective December 5, 2000, the Managing General Partner exercised its right to transfer the Partnership's remaining interest in the property to the Local General Partner. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV (A Limited Partnership) MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) Property Discussions (continued) ------------------------------- The Local General Partner of Buena Vista, (Buena Vista, Georgia) and Greentree Village (Greenville, Georgia) expressed to the Managing General Partner some concerns over the long-term financial health of the properties. In response to these concerns and to reduce possible future risk, the Managing General Partner reached agreement with the Local General Partner on a plan that will ultimately transfer ownership of the properties to the Local General Partner. The plan includes provisions to minimize the risk of recapture. The Managing General Partner has yet to transfer any of the Partnership's interest in these properties. As previously reported, Bentley Court, located in Columbia, South Carolina, continues to generate deficits. Further, an IRS audit of the 1993 tax return for the project questioned the treatment of certain items and has findings of non-compliance in 1993. The Managing General Partner understands that the audit now also focuses on 1994 and 1995 tax credits. On behalf of the Partnership, the Managing General Partner retained counsel to appeal the findings in the IRS report in order to minimize the loss of credits. In June of 1998, the Managing General Partner was informed that the Local General Partner for this property was indicted on various criminal charges. The Local General Partner pled guilty to two of these counts. In the opinion of Management, there is a substantial risk that Bentley Court and, consequently, the Partnership will suffer significant tax credit recapture and/or credit disallowance as a result of the problems at this property. However, it is not possible to quantify the risk until the IRS completes its audits. Additionally, the Managing General Partner replaced the Local General Partner with an affiliated entity and replaced the property management company with an unaffiliated entity. The Managing General Partner will continue to monitor property operations closely. As a result of the continuing tax issues at this property, Management has decided to fully reserve the Partnership's investment in Bentley Court. On April 28, 2000, the Managing General Partner, on behalf of the Partnership, filed suit against the former General Partners of Bentley Court alleging mismanagement of the local limited partnership. On June 11, 2000, one of the buildings at Bentley Court caught on fire and was determined to be a total loss. Three out of the 16 units in that building were vacant, and the rest of the tenants were transferred to vacant units at the property. The insurance company has agreed to pay the limit of the policy coverage, however, estimates indicate that the insurance proceeds may not cover the costs to rebuild. It is possible that the Local Limited Partnership will not rebuild the building, which would decrease the property's future tax credits and cause recapture of tax credits previously taken with respect to such building. It also would likely cause a decrease in the property's cash flow. The Managing General Partner is currently evaluating the Local Limited Partnership's options with respect to the ruined building. On January 1, 2001, Bentley Court suffered a fire in another building which contained a total of 24 units. Preliminary indications are that the fire may have resulted from children playing with fireworks and that most of the units are a total loss. All but three of the tenants were relocated within the property. Subsequent to the June 11, 2000 fire, the Managing General Partner increased the insurance policy sub-limits on the property and is optimistic that insurance proceeds will cover the cost to rebuild both buildings. The Managing General Partner expects construction to commence by mid-March and that the units will be ready for occupancy by the fall. In the interim, the vacancy of the two buildings will cause the property to operate at a deficit. BK Apartments (Jamestown, North Dakota) continues to operate at a deficit. As previously reported, in November 1997, due to concerns about the property's long term viability, the Managing General Partner consummated a transfer of 50% of the Partnership's interest in capital and profits of BK Apartments Limited Partnership to the Local General Partner. Additionally, the Managing General Partner has the right to put the Partnership's remaining interest to the new Local General Partner any time after one year elapsed. Subsequently, the Local General Partner transferred its general partner interest and transferred 48.5% of its interest in capital and profits of BK Apartments Limited Partnership to a new, nonprofit general partner, effective June 17, 1999. As a result of this change, the date BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV (A Limited Partnership) MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) Property Discussions (continued) ------------------------------- when the Managing General Partner has the right to transfer the remaining interest to the new Local General Partner was amended to reflect the June 17, 1999 effective date. The Partnership will retain its full share of the property's tax credits, which expire in 2001, until such time as the remaining interest is put to the new Local General Partner. In addition, the new Local General Partner has the right to call the remaining interest after the tax credit period has expired. As previously reported, 46 & Vincennes (Chicago, Illinois) continues to operate below break-even due to occupancy problems. A new site manager with significant experience in managing properties in similar inner city Chicago neighborhoods was recently hired at the property. In addition, the neighborhood has seen significant improvement in the last few years, with several buildings in the area renovated for market rate use. Effective January 13, 2000, the Managing General Partner and Local General Partner succeeded in gaining HUD's approval for a refinancing, thereby reducing the interest rate and increasing the loan maturity to a new 40-year term. The Managing General Partner continues to work closely with the Local General Partner and will continue to closely monitor property operations. The Partnership has implemented policies and practices for assessing potential impairment of its investments in Local Limited Partnerships. Real estate experts analyze the investments to determine if impairment indicators exist. If so, the carrying value is compared to the undiscounted future cash flows expected to be derived from the asset. If a significant impairment in carrying value exists, a provision to write down the asset to fair value will be recorded in the Partnership's financial statements. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV (A Limited Partnership) PART II OTHER INFORMATION Items 1-5 Not applicable Item 6 Exhibits and reports on Form 8-K (a)Exhibits - None (b)Reports on Form 8-K - No reports on Form 8-K were filed during the quarter ended December 31, 2000. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV (A Limited Partnership) 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. DATED: February 14, 2001 BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV By: Arch Street IV, Inc., its Managing General Partner /s/Jenny Netzer --------------------------------- Jenny Netzer Managing Director and President