-----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, MD6Ns7X3fw55kisesGep6WM+8PL2mDjnAuj2zt2cSCT7I6gDMG+cIoVjZ3O3+okD MDcMZK6gygR9XiZA2898jQ== 0000854092-97-000014.txt : 19971110 0000854092-97-000014.hdr.sgml : 19971110 ACCESSION NUMBER: 0000854092-97-000014 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971107 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: REDWOOD MORTGAGE INVESTORS VII CENTRAL INDEX KEY: 0000854092 STANDARD INDUSTRIAL CLASSIFICATION: MORTGAGE BANKERS & LOAN CORRESPONDENTS [6162] IRS NUMBER: 943094928 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-19992 FILM NUMBER: 97709908 BUSINESS ADDRESS: STREET 1: 650 EL CAMINO STE G CITY: REDWOOD CITY STATE: CA ZIP: 94063 BUSINESS PHONE: 4153670121 MAIL ADDRESS: STREET 1: 650 EL CAMINO REAL STE K CITY: REDWOOD CITY STATE: CA ZIP: 94063 10-Q 1 10Q FORM 10-Q SECURITIES & EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Quarterly Report Under Section 13 or 15 (d) of the Securities Exchange Act of 1934 For Period Ended September 30, 1997 - ---------------------------- ----------------------- -------------------------- Commission file number 33-30427 - ---------------------------- ----------------------- -------------------------- REDWOOD MORTGAGE INVESTORS VII - -------------------------------------------------------------------------------- (exact name of registrant as specified in its charter) California 94-3094928 - -------------------------- ----------------------------------------------------- (State or other jurisdiction of I.R.S. Employer incorporation of organization) Identification No. 650 El Camino Real, Suite G, Redwood City, CA. 94063 - -------------------------------------------------------------------------------- (address of principal executive office) (415) 365-5341 - -------------------------------------------------------------------------------- (Registrants telephone number, including area code) NOT APPLICABLE - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file reports), and (2) has been subject to such filing requirements for the past 90 days. YES XX NO -------- ------ APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15 (d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. YES NO NOT APPLICABLE X ------------- ------------- ------------ APPLICABLE ONLY TO CORPORATE ISSUERS Indicate the number of shares outstanding of each of the issuers class of common stock, as of the latest date. NOT APPLICABLE REDWOOD MORTGAGE INVESTORS VII (A California Limited Partnership) BALANCE SHEETS DECEMBER 31, 1996 (audited) and SEPTEMBER 30, 1997 (unaudited) ASSETS
Sept 30, 1997 (unaudited) 1996 --------------- -------------- Cash $185,165 $755,089 --------------- -------------- Accounts receivable: Mortgage Investments, secured by deeds of trust 14,097,623 12,036,293 Accrued Interest on Mortgage Investments 373,069 264,495 Advances on Mortgage Investments 42,914 41,203 Accounts receivables, unsecured 107,817 337,242 --------------- -------------- 14,621,423 12,679,233 Less allowance for doubtful accounts 264,720 228,647 --------------- -------------- 14,356,703 12,450,586 --------------- -------------- Real estate owned, acquired through foreclosure, held for sale 856,577 1,468,345 Investment in partnership 298,237 242,394 --------------- -------------- $15,696,682 $14,916,414 =============== ============== LIABILITIES AND PARTNERS CAPITAL Liabilities: Notes payable - bank line of credit $2,591,816 $1,175,000 Accounts payable and accrued expenses 1,845 1,472 Deferred Interest 0 154,598 -------------- -------------- 2,593,661 1,331,070 -------------- -------------- Partners Capital Limited partners capital, subject to redemption (Note 4E): Net of formation loan receivable of $357,794 and $429,163 for September 30, 1997, and December 31, 1996, respectively 13,091,043 13,573,366 General partners capital 11,978 11,978 -------------- -------------- Total Partners Capital 13,103,021 13,585,344 -------------- -------------- Total Liabilities and Partners Capital $15,696,682 $14,916,414 ============== ============== See accompanying notes to financial statements.
REDWOOD MORTGAGE INVESTORS VII (A California Limited Partnership) STATEMENTS OF INCOME FOR THE NINE AND THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996 (unaudited) 9 months ended 9 months ended 3 months ended 3 months ended Sept. 30, 1997 Sept. 30, 1996 Sept. 30, 1997 Sept. 30, 1996 (unaudited) (unaudited) (unaudited) (unaudited)
Revenues: Interest on mortgage investments $1,184,702 $1,180,937 $418,203 $402,259 Interest on bank deposits 5,266 4,461 1,673 1,610 Late Charges 3,946 13,817 1,020 5,451 Miscellaneous 12,122 20,779 3,166 14,614 ------------ ------------- ------------ ------------- 1,206,036 1,219,994 424,062 423,934 ------------ ------------- ------------ ------------- Expenses: Interest on note payable-bank 142,691 127,066 59,877 38,407 Mortgage Servicing Fees 51,621 97,268 19,993 32,733 Amortization of organization costs 0 368 0 0 Clerical costs through Redwood Mortgage 28,621 30,758 9,285 10,464 Professional Fees 22,882 17,637 3,156 473 Provision for doubtful accounts and losses on real estate acquired through 324,027 285,591 122,705 127,930 foreclosure Printing, Supplies and Postage 8,123 0 2,643 0 Other 5,576 13,647 1,807 2,543 ------------ ------------- ------------ ------------- 583,541 572,335 219,466 212,550 ------------ ------------- ------------ ------------- Net income $622,495 $647,659 $204,596 $211,384 ============ ============= ============ ============= Net income: to General Partners (1%) $6,225 $6,476 $2,046 $2,113 Net income: to Limited Partners (99%) $616,270 $641,183 $202,550 $209,271 ============ ============= ============ ============= $622,495 $647,659 $204,596 $211,384 ============ ============= ============ ============= Net income per $1000 invested by Limited Partners for entire period: - where income is reinvested and $45.27 $44.78 $14.87 $14.71 compounded ------------ ------------- ------------ ------------- - where partner receives income in monthly distributions $44.39 $43.92 $14.80 $14.63 ------------ ------------- ------------ ------------- See accompanying notes to Financial Statements
REDWOOD MORTGAGE INVESTORS VII (A California Limited Partnership) STATEMENTS OF CHANGES IN PARTNERS CAPITAL FOR THE THREE YEARS ENDED DECEMBER 31, 1996 (audited) and NINE MONTHS ENDED SEPTEMBER 30, 1997 (unaudited)
PARTNERS CAPITAL ----------------------------------------------------------------------- LIMITED PARTNERS CAPITAL ----------------------------------------------------------------------- Capital Account Unallocated Formation Limited Syndication Loan Partners Costs Receivable Total -------------- --------------- --------------- -------------- Balances at December 31, 1993 $13,596,915 $(187,807) $(693,471) $12,715,637 Formation loan collections 0 0 65,166 65,166 Net income 918,018 0 0 918,018 Allocation of syndication costs (80,190) 80,190 0 0 Early withdrawal penalties (34,001) 10,529 23,366 (106) Partners withdrawals (560,753) 0 0 (560,753) -------------- --------------- --------------- -------------- Balances at December 31, 1994 13,839,989 (97,088) (604,939 13,137,962 Formation loan collections 0 0 80,542 80,542 Net income 902,840 0 0 902,840 Allocation of syndication costs (80,190) 80,190 0 0 Early withdrawal penalties (10,690) 3,310 7,346 (34) Partners withdrawals (435,917) 0 0 (435,917) -------------- --------------- --------------- -------------- Balances at December 31, 1995 14,216,032 (13,588) (517,051) 13,685,393 Formation loan collections 0 0 62,225 62,225 Net income 850,508 0 0 850,508 Allocation of syndication costs (13,588) 13,588 0 0 Early withdrawal penalties (37,345) 0 25,663 (11,682) Partners withdrawals (1,013,078) 0 0 (1,013,078) -------------- --------------- --------------- -------------- Balances at December 31, 1996 14,002,529 0 (429,163) 13,573,366 Formation loan collections 0 0 48,447 48,447 Net income 616,270 0 0 616,270 Early withdrawal penalties (33,356) 0 22,922 (10,434) Partners withdrawals (1,136,606) 0 0 (1,136,606) -------------- --------------- --------------- -------------- Balances at September 30, 1997 $13,448,837 $0 $(357,794) $13,091,043 ============== =============== =============== ============== See accompanying notes to financial statements
REDWOOD MORTGAGE INVESTORS VII (A California Limited Partnership) STATEMENTS OF CHANGES IN PARTNERS CAPITAL FOR THE THREE YEARS ENDED DECEMBER 31, 1996 (audited) and NINE MONTHS ENDED SEPTEMBER 30, 1997 (unaudited)
PARTNERS CAPITAL ------------------------------------------------------------------------------ GENERAL PARTNERS CAPITAL ---------------------------------------------------------- Capital Account Unallocated Total General Partners Syndication Costs Partners Total Capital ------------------ ------------------- ------------ ---------------- Balances at December 31, 1993 $11,978 $(1,897) $10,081 $12,725,718 Formation loan collections 0 0 0 65,166 Net income 9,273 0 9,273 927,291 Allocation of syndication costs (810) 810 0 0 Early withdrawal penalties 0 106 106 0 Partners withdrawals (8,463) 0 (8,463) (569,216) ------------------ ------------------- ------------ ---------------- Balances at December 31, 1994 11,978 (981) 10,997 13,148,959 Formation loan collections 0 0 0 80,542 Net income 9,120 0 9,120 911,960 Allocation of syndication costs (810) 810 0 0 Early withdrawal penalties 0 34 34 0 Partners withdrawals (8,310) 0 (8,310) (444,227) ------------------ ------------------- ------------ ---------------- Balances at December 31, 1995 11,978 (137) 11,841 13,697,234 Formation loan collections 0 0 0 62,225 Net income 8,591 0 8,591 859,099 Allocation of syndication costs (137) 137 0 0 Early withdrawal penalties 0 0 0 (11,682) Partners withdrawals (8,454) 0 (8,454) (1,021,532) ------------------ ------------------- ------------ ---------------- Balances at December 31, 1996 11,978 0 11,978 13,585,344 Formation loan collections 0 0 0 48,447 Net income 6,225 0 6,225 622,495 Early withdrawal penalties 0 0 0 (10,434) Partners withdrawals (6,225) 0 (6,225) (1,142,831) ------------------ ------------------- ------------ ---------------- Balances at September 30, 1997 $11,978 $0 $11,978 $13,103,021 ================== =================== ============ ================ See accompanying notes to financial statements
REDWOOD MORTGAGE INVESTORS VII (A Califonira Limited Partnership) STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
Sept 30, 1997 Sept 30, 1996 (unaudited) (unaudited) ---------------- ---------------- Cash flows from operating activities: Net income $622,495 $647,659 Adjustments to reconcile net income to net cash provided by operating activities: Amortization of organization costs 0 368 Provision for doubtful accounts and for losses on real estate held for 324,027 285,591 sale Early withdrawal penalty credited to income (10,434) (7,212) (Increase) decrease in accrued interest & advances (110,285) 879,720 Increase (decrease) in accounts payable and accrued expenses 373 0 (Increase) decrease in amount due from or to Redwood Mortgage 0 0 Increase (decrease) in deferred interest on Mortgage Investments (154,598) 0 ---------------- ---------------- Net cash provided by operating activities 671,578 1,806,126 ---------------- ---------------- Cash flows from investing activities: Principal collected on mortgage investments 4,145,994 8,206,061 Mortgage Investments made (6,207,324) (7,112,114) Additions to Real Estate held for sale (131,707) (480,921) Dispositions of real estate held for sale 684,946 379,163 Investment in partnership (55,843) (684) ---------------- ---------------- Net cash provided by (used in) investing activities (1,563,934) 991,505 ---------------- ---------------- Cash flows from financing activities: Net increase (decrease) in note payable-bank 1,416,816 (2,000,000) Formation loan collections 48,447 65,916 Partners withdrawals (1,142,831) (649,905) ---------------- ---------------- Net cash provided by (used in) financing activities 322,432 (2,583,989) ---------------- ---------------- Net increase (decrease) in cash (569,924) 213,642 Cash - beginning of period 755,089 514,840 ---------------- ---------------- Cash - end of period $185,165 $728,482 ================ ================ See accompanying notes to financial statements.
REDWOOD MORTGAGE INVESTORS VII (A California Limited Partnership) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 (audited) and SEPTEMBER 30, 1997 (unaudited) NOTE 1 - ORGANIZATION AND GENERAL Redwood Mortgage Investors VII, (the Partnership) is a California Limited Partnership, of which the General Partners are D. Russell Burwell, Michael R. Burwell and Gymno Corporation, a California corporation owned and operated by the individual General Partners. The Partnership was organized to engage in business as a mortgage lender for the primary purpose of making Mortgage Investments secured by Deeds of Trust on California real estate. Mortgage Investments are being arranged and serviced by Redwood Home Loan Co., dba Redwood Mortgage, an affiliate of the General Partners. At September 30, 1992, the offering had been closed with contributed capital totaling $11,998,359 for limited partners. A minimum of 2,500 units ($250,000) and a maximum of 120,000 units ($12,000,000) were offered through qualified broker-dealers. As Mortgage Investments were identified, partners were transferred from applicant status to admitted partners participating in Mortgage Investment operations. Each months income is allocated to partners based upon their proportionate share of partners capital. Some partners have elected to withdraw income on a monthly, quarterly or annual basis. A. Sales Commissions - Formation Loan Sales commissions ranging from 0% (Units sold by General Partners) to 10% of the gross proceeds were paid by Redwood Mortgage, an affiliate of the General Partners that arranges and services the Mortgage Investments. To finance the sales commissions, the Partnership was authorized to loan to Redwood Mortgage an amount not to exceed 8.3% of the gross proceeds provided that the Formation Loan for the minimum offering period could be 10% of the gross proceeds for that period. The Formation Loan is unsecured and is being repaid, without interest, in ten installments of principal, over a ten year period commencing January 1, 1992. At December 31, 1992, Redwood Mortgage had borrowed $914,369 from the Partnership to cover sales commissions relating to $11,998,359 limited partner contributions (7.62%). Through September 30, 1997, $556,575 including $98,400 in early withdrawal penalties, had been repaid leaving a balance of $357,794. The formation loan, which is due from an affiliate of the General Partners, has been deducted from Limited Partners capital in the balance sheet. As amounts are collected from Redwood Mortgage, the deduction from capital will be reduced. B. Other Organizational and Offering Expenses Organizational and offering expenses, other than sales commissions, (including printing costs, attorney and accountant fees, and other costs), were paid by the Partnership. Such costs were limited to 10% of the gross proceeds of the offering or $500,000 whichever was less. The General Partners were to pay any amount of such expenses in excess of 10% of the gross proceeds or $500,000. Organization costs of $10,102 and syndication costs of $415,692 were incurred by the Partnership. The sum of organization and syndication costs, $425,794, approximated 3.55% of the gross proceeds contributed by the Partners. Both the Organization and Syndication Costs have been fully amortized and allocated to the Partners. REDWOOD MORTGAGE INVESTORS VII (A California Limited Partnership) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 (audited) and SEPTEMBER 30, 1997 (unaudited) NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Accrual Basis Revenues and expenses are accounted for on the accrual basis of accounting wherein income is recognized as earned and expenses are recognized as incurred. Once a loan is categorized as impaired, interest is no longer accrued thereon. B. Management Estimates In preparing the financial statements, management is required to make estimates based on the information available that affect the reported amounts of assets and liabilities as of the balance sheet date and revenues and expenses for the related periods. Such estimates relate principally to the determination of the allowance for doubtful accounts, including the valuation of impaired mortgage investments, and the valuation of real estate acquired through foreclosure. Actual results could differ significantly from these estimates. C. Mortgage Investments, Secured by Deeds of Trust The Partnership has both the intent and ability to hold the mortgage investments to maturity, i.e., held for long-term investment. They are therefore valued at cost for financial statement purposes with interest thereon being accrued by the simple interest method. Financial Accounting Standards Board Statements (SFAS) 114 and 118 (effective January 1, 1995) provide that if the probable ultimate recovery of the carrying amount of a mortgage investment, with due consideration for the fair value of collateral, is less than the recorded investment, and related amount due and the impairment is considered to be other than temporary, the carrying amount of the investment (cost) shall be reduced to the present value of future cash flows. The adoption of these statements did not have a material effect on the financial statements of the Partnership because that was the valuation method previously used on impaired loans. At September 30, 1997, December 31, 1996, 1995 and 1994, reductions in the cost of loans categorized as impaired by the Partnership totalled $9,595, $9,595, $0 and $10,000 respectively. The reduction in stated value was accomplished by increasing the allowance for doubtful accounts. As presented in Note 10 to the financial statements as of September 30, 1997, the average mortgage investment to appraised value of security at the time the loans were consummated was 62.73%. When a loan is valued for impairment purposes, an updating is made in the valuation of collateral security. However, such a low loan to value ratio tends to minimize reductions for impairment. D. Cash and Cash Equivalents For purposes of the statements of cash flows, cash and cash equivalents include interest bearing and non-interest bearing bank deposits. E. Real Estate Owned, Held for Sale Real estate owned, held for sale, includes real estate acquired through foreclosure, and is stated at the lower of the recorded investment in the property, net of any senior indebtedness, or at the propertys estimated fair value, less estimated costs to sell. REDWOOD MORTGAGE INVESTORS VII (A California Limited Partnership) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 (audited) and SEPTEMBER 30, 1997 (unaudited) The following schedule reflects the costs of real estate acquired through foreclosure and the recorded reductions to estimated fair values, less estimated costs to sell as of September 30, 1997, December 31, 1996 and 1995: Sept, 30, December 31, --------------- --------------------------------- 1997 1996 1995 --------------- ------------- -------------- Costs of properties $1,066,280 $1,655,786 $1,410,571 Reduction in value 209,703 187,441 62,574 --------------- ------------- -------------- Fair value reflected in financial statements $856,577 $1,468,345 $1,347,997 =============== ============= ==============
Effective January 1, 1996, the Partnership adopted the provisions of statement No 121 (SFAS 121) of the Financial Accounting Standards Board, Accounting for the Impairment of Long Lived Assets and for Long Lived Assets to be disposed of. The adoption of SFAS 121 did not have a material impact on the Partnerships financial position because the methods indicated were essentially those previously used by the Partnership. F. Investment in Partnership (see note 5) The Partnership accounts for its investment in a partnership as an investment in real estate, which is at the lower of costs or fair value, less estimated costs to sell. At September 30, 1997, cost is considered less than fair value and the investment is stated at cost in the financial statements. G. Income Taxes No provision for Federal and State income taxes is made in the financial statements since income taxes are the obligation of the partners if and when income taxes apply. H. Organization and Syndication Costs The Partnership bears its own organization and syndication costs (other than certain sales commissions and fees described above) including legal and accounting expenses, printing costs, selling expenses, a 1% wholesale brokerage fee and filing fees. Organizational costs of $10,102 were capitalized and were amortized over a five year period. Syndication costs of $415,692 were charged against partners capital and were allocated to individual partners consistent with the Partnership Agreement. REDWOOD MORTGAGE INVESTORS VII (A California Limited Partnership) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 (audited) and SEPTEMBER 30, 1997 (unaudited) I. Allowance for Doubtful Accounts Mortgage Investments and the related accrued interest, fees and advances are analyzed on a continuous basis for recoverability. Delinquencies are identified and followed as part of the Mortgage Investment system. A provision is made for doubtful accounts to adjust the allowance for doubtful accounts to an amount considered by management to be adequate, with due consideration to collateral value, to provide for unrecoverable accounts receivable, including impaired mortgage investments, unspecified mortgage investments, accrued interest and advances on mortgage investments, and other accounts receivable (unsecured). The composition of the allowance for doubtful accounts as of September 30, 1997, December 31, 1996 and 1995 was as follows: Sept, 30, December 31, --------------- --------------------------------- 1997 1996 1995 --------------- ------------- -------------- Impaired mortgage investments $9,595 $9,595 $0 Unspecified mortgage investments 163,839 19,052 50,000 Accounts receivable, unsecured 91,286 200,000 150,000 --------------- ------------- -------------- $264,720 $228,647 $200,000 =============== ============= ==============
J. Net Income Per $1,000 Invested Amounts reflected in the statements of income as net income per $1,000 invested by Limited Partners for the entire period are actual amounts allocated to Limited Partners who have their investment throughout the period and have elected to either leave their earnings to compound or have elected to receive monthly distributions of their net income. Individual income is allocated each month based on the Limited partners pro rata share of Partners Capital. Because the net income percentage varies from month to month, amounts per $1,000 will vary for those individuals who made or withdrew investments during the period, or select other options. However, the net income per $1,000 average invested has approximated those reflected for those whose investments and options have remained constant. K. Reclassifications and Changes in Presentation Certain reclassifications not affecting net income have been made to prior year amounts to conform to the current year presentation. In addition, the formation loan which was previously categorized as an asset, has been deducted from Limited Partners capital until collected from Redwood Mortgage, an affiliate of the General Partners. NOTE 3 - GENERAL PARTNERS AND RELATED PARTIES The following are commissions and/or fees which will be paid to the General Partners and/or related parties. A. Mortgage Brokerage Commissions For services in connection with the review, selection, evaluation, negotiation and extension of Mortgage Investments in an amount up to 12% of the principal through the period ending 6 months after the termination date of the offering. Thereafter, mortgage brokerage commissions are limited to an amount not to exceed 4% of the total Partnership assets per year. The mortgage brokerage commissions are paid by the borrowers, and thus, not an expense of the Partnership. REDWOOD MORTGAGE INVESTORS VII (A California Limited Partnership) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 (audited) and SEPTEMBER 30, 1997 (unaudited) B. Mortgage Servicing Fees Monthly mortgage servicing fees of up to 1/8 of 1% (1.5% annual) of the unpaid principal, or such lesser amount as is reasonable and customary in the geographic area where the property securing the Mortgage Investment is located. Mortgage servicing fees of $51,621, $97,267, $33,394 and $0 were incurred for nine months period ended September 30, 1997, and for years 1996, 1995 and 1994, respectively. C. Asset Management Fee The General Partners receive a monthly fee for managing the Partnerships Mortgage Investment portfolio and operations equal to 1/32 of 1% of the net asset value (3/8 of 1% annual). Management fees of $0, $0, $0 and $10,008 were incurred for nine months period ended September 30, 1997, and for years 1996, 1995 and 1994, respectively. D. Other Fees The Partnership Agreement provides for other fees such as reconveyance, Mortgage assumption and Mortgage extension fees. Such fees are incurred by the borrowers and are paid to parties related to the General Partners. E. Income and Losses All income is credited or charged to partners in relation to their respective partnership interests. The partnership interest of the General Partners (combined) is a total of 1%. F. Operating Expenses The General Partners or their affiliate (Redwood Mortgage) are reimbursed by the Partnership for all operating expenses actually incurred by them on behalf of the Partnership, including without limitation, out-of-pocket general and administration expenses of the Partnership, accounting and audit fees, legal fees and expenses, postage and preparation of reports to Limited Partners. Such reimbursements are reflected as expenses in the Statements of Income. G. General Partners Contributions The General Partners collectively or severally were to contribute 1/10 of 1% in cash contributions as proceeds from the offering were admitted to limited Partner capital. As of December 31, 1992 a General Partner, GYMNO Corporation, had contributed $11,998, 1/10 of 1% of limited partner contributions in accordance with Section 4.02(a) of the Partnership Agreement. NOTE 4 - OTHER PARTNERSHIP PROVISIONS A. Applicant Status Subscription funds received from purchasers of units were not admitted to the Partnership until appropriate lending opportunities were available. During the period prior to the time of admission, which ranged between 1-120 days, purchasers subscriptions remained irrevocable and earned interest at money market rates, which were lower than the return on the Partnerships Mortgage Investment portfolio. REDWOOD MORTGAGE INVESTORS VII (A California Limited Partnership) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 (audited) and SEPTEMBER 30, 1997 (unaudited) Interest earned prior to admission was credited to partners in applicant status. As Mortgage Investments were made and partners were transferred to regular status to begin sharing in income from Mortgage Investments secured by deeds of trust, the interest credited was either paid to the investors or transferred to Partners Capital along with the original investment. B. Term of the Partnership The term of the Partnership is approximately 40 years, unless sooner terminated as provided. The provisions provide for no capital withdrawal for the first five years, subject to the penalty provision set forth in (E) below. Thereafter, investors have the right to withdraw over a five-year period, or longer. C. Election to Receive Monthly, Quarterly or Annual Distributions Upon subscriptions, investors elected either to receive monthly, quarterly or annual distributions of earnings allocations, or to allow earnings to compound for at least a period of 5 years. D. Profits and Losses Profits and losses are allocated among the Limited Partners according to their respective capital accounts after 1% is allocated to the General Partners. E. Liquidity, Capital Withdrawals and Early Withdrawals There are substantial restrictions on transferability of Units and accordingly an investment in the Partnership is illiquid. Limited Partners have no right to withdraw from the partnership or to obtain the return of their capital account for at least one year from the date of purchase of Units. In order to provide a certain degree of liquidity to the Limited Partners after the one-year period, Limited Partners may withdraw all or part of their Capital Accounts from the Partnership in four quarterly installments beginning on the last day of the calendar quarter following the quarter in which the notice of withdrawal is given, subject to a 10% early withdrawal penalty. The 10% penalty is applicable to the amount withdrawn as stated in the Notice of Withdrawal and will be deducted from the Capital Account and the balance distributed in four quarterly installments. Withdrawal after the one-year holding period and before the five-year holding period will be permitted only upon the terms set forth above. Limited Partners also have the right after five years from the date of purchase of the Units to withdraw from the partnership on an installment basis, generally over a five year period in twenty (20) quarterly installments or longer. Once this five year period expires, no penalty will be imposed if withdrawal is made in twenty (20) quarterly installments or longer. Notwithstanding the five-year (or longer) withdrawal period, the General Partners will liquidate all or part of a Limited Partners capital account in four quarterly installments beginning on the last day of the calendar quarter following the quarter in which the notice of withdrawal is given, subject to a 10% early withdrawal penalty applicable to any sums withdrawn prior to the time when such sums could have been withdrawn pursuant to the five-year (or longer) withdrawal period. The Partnership will not establish a reserve from which to fund withdrawals and, accordingly, the Partnerships capacity to return a Limited Partners capital account is restricted to the availability of Partnership cash flow. REDWOOD MORTGAGE INVESTORS VII (A California Limited Partnership) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 (audited) and SEPTEMBER 30, 1997 (unaudited) F. Guaranteed Interest Rate For Offering Period During the period commencing with the day a Limited Partner was admitted to the Partnership and ending 3 months after the offering termination date, the General partners guaranteed an interest rate equal to the greater of actual earnings from mortgage operations or 2% above The Weighted Average cost of Funds Index for the Eleventh District Savings Institutions (Savings & Loan & Thrift Institutions) as computed by the Federal Home Loan Bank of San Francisco monthly, up to a maximum interest rate of 12%. The guarantee amounted to $12,855 and $5,195 in 1990 and 1991, respectively. In 1992 and 1993, actual realization exceeded the guaranteed amount each month. None thereafter was subject to the guarantee. This guarantee is now no longer applicable. NOTE 5 - INVESTMENT IN PARTNERSHIP The Partnerships interest in land, acquired through foreclosure, located in East Palo Alto with costs totalling $298,237 has been invested with that of two other Partnerships (total cost to date, primarily land, of $1,258,649) in a partnership which is in the process of obtaining approval for constructing approximately 63 single family homes for sale. Redwood Mortgage Investors V, VI and VII have first priority on return of investment plus interest thereon, in addition to a share of profits realized. NOTE 6 - LEGAL PROCEEDINGS The Partnership is not a defendant in any legal actions. However, legal actions against borrowers and other involved parties have been initiated by the Partnership to help assure payments against unsecured accounts receivable totalling $107,817 at September 30, 1997. Management anticipates that the ultimate results of these cases will not have a material adverse effect on the net assets of the Partnership, with due consideration having been given in arriving at the allowance for doubtful accounts. NOTE 7 - NOTE PAYABLE BANK - LINE OF CREDIT The Partnership has a bank line of credit secured by its Mortgage Investment portfolio of up to $3,000,000 at .50% over prime. The balances outstanding as of December 31, 1995, 1996 and September 30, 1997, were $2,000,000, $1,175,000 and $2,591,816 respectively, and the interest rate at September 30, 1997 was 9.00%% (8.50% prime + .50%). NOTE 8 - INCOME TAXES The following reflects a reconciliation from net assets (Partners Capital) reflected in the financial statements to the tax basis of those net assets: Sept, 30, December 31, --------------- ----------------------------------- 1997 1996 1995 --------------- -------------- --------------- Net assets - Partners Capital per financial $13,103,021 $13,585,344 $13,697,234 statements Formation loan receivable 357,794 429,163 517,051 Allowance for doubtful accounts 264,720 228,647 200,000 -------------- --------------- =============== Net assets tax basis $13,725,535 $14,243,154 $14,414,285 =============== ============== ===============
REDWOOD MORTGAGE INVESTORS VII (A California Limited Partnership) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 (audited) and SEPTEMBER 30, 1997 (unaudited) In 1996, approximately 69% of taxable income was allocated to tax exempt organizations i.e., retirement plans. Such plans do not have to file income tax returns unless their unrelated business income exceeds $1,000. Applicable amounts become taxable when distribution is made to participants. NOTE 9 - FAIR VALUE OF FINANCIAL INSTRUMENTS The following methods and assumptions were used to estimate the fair value of financial instruments: (a) Cash and Cash Equivalents - The carrying amount equals fair value. All amounts, including interest bearing, are subject to immediate withdrawal. (b) The Carrying Value of Mortgage Investments - (see note 2 (c)) is $14,097,623. The September 30, 1997, fair value of these investments of $14,337,814 is estimated based upon projected cash flows discounted at the estimated current interest rates at which similar loans would be made. The applicable amount of the allowance for doubtful accounts along with accrued interest and advances related thereto should also be considered in evaluating the fair value versus the carrying value. NOTE 10 - ASSET CONCENTRATIONS AND CHARACTERISTICS The Mortgage Investments are secured by recorded deeds of trust. At September 30, 1997, there were 66 Mortgage Investments outstanding with the following characteristics: Number of Mortgage Investments outstanding 66 Total Mortgage Investments outstanding $14,097,623 Average Mortgage Investment outstanding $213,600 Average Mortgage Investment as percent of total 1.52% Average Mortgage Investment as percent of Partners Capital 1.63% Largest Mortgage Investment outstanding $1,400,000 Largest Mortgage Investment as percent of total 9.93% Largest Mortgage Investment as percent of Partners Capital 10.68% Number of counties where security is located(all California) 15 Largest percentage of Mortgage Investments in one county 21.00% Average Mortgage Investment to appraised value of security at time loan was consummated 62.73% Number of Mortgage Investments in foreclosure 3 REDWOOD MORTGAGE INVESTORS VII (A California Limited Partnership) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 (audited) and SEPTEMBER 30, 1997 (unaudited) The following categories of mortgage investments are pertinent at September 30, 1997, December 31, 1996 and 1995: Sept. 30, December 31, ---------------- ------------------------------------- 1997 1996 1995 ---------------- --------------- --------------- First Trust Deeds $6,153,820 $4,199,552 $3,922,120 Second Trust Deeds 7,022,857 6,913,853 7,377,189 Third Trust Deeds 720,945 722,887 896,188 Fourth Trust Deeds 200,001 200,001 187,144 ---------------- --------------- --------------- Total mortgage investments 14,097,623 12,036,293 12,382,641 Prior liens due other lenders 21,487,463 22,069,554 30,575,850 ---------------- --------------- --------------- Total debt $35,585,086 $34,105,847 $42,958,491 ================ =============== =============== Appraised property value at time of loan $56,723,074 $51,863,991 $68,888,224 ================ =============== =============== Total investments as a percent of appraisals 62.73% 65.76% 62.36% ================ =============== =============== Investments by Type of Property Owner occupied homes $1,220,817 $1,742,767 $2,621,800 Non-Owner occupied homes 968,493 1,112,274 651,528 Apartments 1,961,990 1,325,872 1,828,877 Commercial 9,946,323 7,855,380 7,280,436 ================ =============== =============== $14,097,623 $12,036,293 $12,382,641 ================ =============== ===============
Scheduled maturity dates of mortgage investments as of December 31, 1996 are as follows: Year Ending December 31, ------------------- 1997 $2,234,127 1998 2,581,163 1999 2,339,825 2000 1,508,571 2001 1,093,216 Thereafter 4,340,721 =========== $14,097,623 =========== The scheduled maturities for 1997 include approximately $1,744,999 in loans which are past maturity at September 30, 1997. Interest payment on most of these loans are current. $841,895 of those loans were categorized as delinquent over 90 days. Three loans with principal outstanding of $841,895 had interest payments overdue in excess of 90 days. Two loans had impaired provisions totalling $9,595 at September 30, 1997. The cash balance at September 30, 1997 of $185,165 was in one bank with an interest bearing balance totalling $173,171. The balances exceeded FDIC insurance limits (up to $100,000 per bank) by $85,165. REDWOOD MORTGAGE INVESTORS VII (A California Limited Partnership) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 (audited) and SEPTEMBER 30, 1997 (unaudited) NOTE 11 - CHANGE IN PRESENTATION The formation loan receivable from Redwood Mortgage, an affiliate of the General Partners, has been categorized as a reduction in Limited Partners Capital, the source of the funds. It was previously reflected as an asset. As payments are received, or early withdrawal penalties realized, the formation loan balance will be reduced and restored to Limited Partners Capital. The total of the formation loan outstanding was $357,794, $429,163 and $517,051 at September 30, 1997, December 31, 1996 and 1995, respectively. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS On September 30, 1992, the Partnership had sold 119,983.59 units and its contributed capital totaled $11,998,359 of the approved $12,000,000 issue, in units of $100 each. As of that date, the offering was formally closed. At September 30, 1997, Partners Capital totaled $13,103,021. The Partnership began funding Mortgage Investments on December 27, 1989 and as of September 30, 1997 had credited the Partners accounts with income at an average annualized (compounded) yield of 8.14%. Currently, mortgage interest rates are lower than those prevalent at the inception of the Partnership. New Mortgage Investments are being originated at these lower interest rates. The result is a reduction of the average return across the entire portfolio held by the Partnership. In the future, interest rates likely will change from their current levels. The General Partners cannot at this time predict at what levels interest rates will be in the future. The General Partners believe the rates charged by the Partnership to its borrowers will not change significantly in the immediate future. Based upon the rates payable in connection with the existing Mortgage Investments, the current and anticipated interest rates to be charged by the Partnership, and current reserve requirements, the General Partners anticipate that the annualized yield next year will range only slightly higher from its current rate. The Partnership has a line of credit with a commercial bank secured by its Mortgage Investments to a limit of $3,000,000, at a variable interest rate set at one half percent above the prime rate. Currently, it has borrowed $2,591,816. This facility could increase as the Partnership capital increases. This added source of funds helped in maximizing the Partnership yield by allowing the Partnership to minimize the amount of funds in lower yield investment accounts when appropriate Mortgage Investments are not currently available. Since most of the Mortgage Investments made by the Partnership bear interest at a rate in excess of the rate payable to the bank which extended the line of credit, once the required principal and interest payments on the line of credit are paid to the bank, the Mortgage Investments funded using the line of credit generate revenue for the Partnership. As of September 30, 1997, the Partnership is current with its interest payments on the line of credit. In 1994, the Partnership incurred $135,790 of interest on note payables. The interest rate on the line of credit was Prime + 3/4% and the Partnership was able to maintain a positive spread between the cost of borrowing the funds and interest earned on lending the funds. In 1995, the Partnership incurred $163,361 of interest on note payables reflecting a small increase in the overall average credit balance outstanding. The Partnership still maintained a positive spread between the cost of borrowing the funds and the interest earned in lending the funds. In 1996, interest payments decreased to $127,454 reflecting the Partnerships overall smaller average outstanding credit line balance due primarily to a large number of Mortgage Investment payoffs. For the nine months through September 30, 1997, interest paid was $142,691 reflecting an overall greater utilization of the credit line from the previous three years. The Partnerships income and expenses, accruals and delinquencies are within the normal range of the General Partners expectations, based upon their experience in managing similar Partnerships over the last twenty years. Professional services were higher in 1993 and into 1994 as a result of a lawsuit initiated to collect an outstanding debt. The debt was collected in 1994. Borrower foreclosures, as set forth under Results of Operations, are a normal aspect of partnership operations and the General Partners anticipate that they will not have a material effect on liquidity. Cash is constantly being generated from interest earnings, late charges, pre-payment penalties, amortization of Mortgage Investments and pay-off on notes. Currently, cash flow exceeds Partnership expenses and earnings payout requirements. As Mortgage Investment opportunities become available, excess cash and available funds are invested in new Mortgage Investments. The General Partners regularly review the Mortgage Investment portfolio, examining the status of delinquencies, the underlying collateral securing these properties, the REO expenses and sales activities, borrowers payment records, etc. Data on the local real estate market and on the national and local economy are studied. Based upon this information and other data, loss reserves are increased or decreased. Because of the number of variables involved, the magnitude of the possible swings and the General Partners inability to control many of these factors, actual results may and do sometimes differ significantly from estimates made by the General Partners. Management provided $335,955 and $306,779 as provision for doubtful accounts for the years ended December 31, 1994 and December 31, 1995. The decrease in the provision reflects the decrease in the amount of REO, unsecured receivables and the decreasing levels of delinquency within the portfolio. Additionally, the General Partners felt that the bottom of the real estate cycle had been reached, reflecting a decreasing need to set aside reserves for continuously declining real estate values as had been the case in the early 1990s in the California real estate market. The Northern California recession reached bottom in 1993. Since then, the California economy has been improving, slowly at first, but now, more vigorously. A wide variety of indicators suggest that the economy in California is strong in 1997, and the State is well - positioned for fast growth. This improvement is reflective in increasing property values, in job growth, personal income growth, etc., which all translates into more loan activity, which of course, is healthy for the Partnerships lending activity. At the time of subscription to the Partnership, Limited Partners made an irrevocable decision to either take distributions of earnings monthly, quarterly or annually or to compound earnings in their capital account. For the years ended December 31, 1995, December 31, 1996 and nine months period to September 30, 1997, the Partnership made distributions of earnings to Limited Partners after allocation of syndication costs of, $262,450, $327,887 and $284,956 respectively. Distribution of Earnings to Limited Partners after allocation of syndication costs for the years ended December 31, 1995, December 31, 1996 and nine months period ended September 30, 1997, to Limited Partners capital accounts and not withdrawn was $640,390, $522,621, and $331,314 respectively. As of December 31, 1995, December 31, 1996 and September 30, 1997, Limited Partners electing to withdraw earnings represented 36.00%, 44.00% and 53% of the Limited Partners outstanding capital accounts. The Partnership also allows the Limited Partners to withdraw their capital account subject to certain limitations (see liquidation provisions of Partnership Agreement). For the years ended December 31, 1995, December 31, 1996, and nine months to September 30, 1997, $106,901, $412,798 and $423,351 were liquidated subject to the 10% penalty for early withdrawal. These withdrawals are within the normally anticipated range that the General Partners would expect in their experience in this and other Partnerships. The General Partners expect that a small percentage of Limited Partners will elect to liquidate their capital accounts over one year with a 10% early withdrawal penalty. In originally conceiving the Partnership, the General Partners wanted to provide Limited Partners needing their capital returned a degree of liquidity. Generally, Limited Partners electing to withdraw over one year need to liquidate investment to raise cash. The trend we are experiencing in withdrawals by Limited Partners electing a one year liquidation program represents a small percentage of Limited Partner capital as of December 31, 1995, December 31, 1996 and September 30, 1997, respectively and is expected by the General Partners to commonly occur at these levels. Additionally, for the years ended December 31, 1995, December 31, 1996 and nine months to September 30, 1997, $97,801, $318,902 and $461,656 were liquidated by Limited Partners who have elected a liquidation program over a period of five years or longer. Once the initial five year hold period has passed the General Partners expect to see an increase in liquidations due to the ability of Limited Partners to withdraw without penalty. This ability to withdraw after five years by Limited Partners has the effect of providing Limited Partner liquidity which the General Partners then expect a portion of the Limited Partners to avail themselves of. This has the anticipated effect of the partnership growing, primarily through reinvestment of earnings in years one through five. The General Partners expect to see increasing numbers of Limited Partner withdrawals in years five through eleven, at which time the bulk of those Limited Partners who have sought withdrawal will have been liquidated. After year eleven, the gross figures generally should subside and the Partnership capital again tends to increase. I. COMPENSATION OF THE GENERAL PARTNERS AND AFFILIATES BY PARTNERSHIP The following compensation has been paid to the General Partners and Affiliates for services rendered during the nine months ending September 30, 1997. All such compensation is in compliance with the guidelines and limitations set forth in the Prospectus: ENTITY RECEIVING DESCRIPTION OF COMPENSATION AMOUNT COMPENSATION and SERVICES RENDERED - ----------------------------------------------------------------- ------------- Redwood Mortgage Mortgage servicing fees for servicing Mortgage Investments $51,621 General Partners Asset Management Fee for managing assets $0 &/or Affiliates General Partners 1% interest in profits, losses and distributions of cash available for distribution $6,225 II. FEES PAID BY BORROWERS ON MORTGAGE INVESTMENTS PLACED BY COMPANIES RELATED TO THE GENERAL PARTNERS WITH THE PARTNERSHIP (EXPENSES OF BORROWERS, NOT OF THE PARTNERSHIP): Redwood Mortgage Mortgage Brokerage Commissions for services in connection with the review, selection, evaluation, negotiation, and extension of the Mortgage Investment paid by the borrower and not by the Partnership. $278,636 Redwood Mortgage Processing and Escrow Fees for services in connection with notary, document preparation, credit investigation, and escrow fees payable by the borrower and not by the Partnership $4,908 III. IN ADDITION, THE GENERAL PARTNERS AND/OR RELATED COMPANIES PAY CERTAIN EXPENSES ON BEHALF OF THE PARTNERSHIP FOR WHICH IT IS REIMBURSED AS NOTED IN THE STATEMENT OF INCOME. MORTGAGE INVESTMENT PORTFOLIO SUMMARY AS OF SEPTEMBER 30, 1997 Partnership Highlights Mortgage Investment to Value Ratios First Trust Deeds $6,153,820.20 Appraised Value of Properties * 13,327,913.00 Total Investment as a % of Appraisal 46.17% First Trust Deed Mortgage Investments 6,153,820.20 Second Trust Deed Mortgage Investments 7,022,856.77 Third Trust Deed Mortgage Investments 720,945.11 Fourth Trust Deed Mortgage Investments ** 200,001.20 ----------------- $14,097,623.28 First Trust Deeds due other Lenders 20,365,203.00 Second Trust Deeds due other Lenders 979,402.00 Third Trust Deeds due other Lenders 142,858.00 ----------------- Total Debt $35,585,086.28 Appraised Property Value * 56,723,074.00 Total Investment as a % of Appraisal 62.73% Number of Mortgage Investments Outstanding 66 Average Investment $213,600.35 Average Investment as a % of Net Assets 1.63% Largest Investment Outstanding $1,400,000.00 Largest Investment as a % of Net Assets 10.68% Loans as a Percentage of Total Mortgage Investments First Trust Deed Mortgage Investments 43.65% Second Trust Deed Mortgage Investments 49.82% Third Trust Deed Mortgage Investments 5.11% Fourth Trust Deed Mortgage Investments 1.42% ---------------- Total 100.00% Mortgage Investments by Type of Property Amount Percent Owner Occupied Homes $1,220,817.34 8.66% Non Owner Occupied Homes 968,493.37 6.87% Apartments 1,961,989.64 13.92% Commercial 9,946,322.93 70.55% ---------------- ------------------ Total $14,097,623.28 100.00% Statement of Conditions of Mortgage Investments Number of Mortgage Investments in Foreclosure 3 *Values used are the appraisal values utilized at the time the mortgage investment was consummated. Diversification by County County Total Loans Percent Alameda $2,960,083.12 21.00% Santa Clara 2,495,411.23 17.70% San Francisco 2,123,416.02 15.06% Stanislaus 1,665,745.47 11.82% San Mateo 1,314,969.73 9.33% Contra Costa 1,289,095.68 9.14% Solano 584,503.88 4.15% Sonoma 370,045.84 2.62% Monterey 357,134.44 2.53% El Dorado 274,178.59 1.94% Sacramento 264,487.53 1.88% Santa Barbara 121,748.32 0.86% Santa Cruz 103,882.60 0.74% Ventura 91,000.00 0.65% Shasta 81,920.83 0.58% ------------------- ----------- Total $14,097,623.28 100.00% ** Redwood Mortgage Investors VII, together with other Redwood Partnerships, holds a second and a fourth trust deed against the secured property. In addition, the principals behind the borrower corporation have given personal guarantees as collateral. The overall loan to value ratio on this loan is 76.52%. Besides the borrower paying a fixed interest rate of 12.25%, the partnership and other lenders will also be entitled to share in profits generated by the corporation with respect to the secured property. The affiliates of the Partnership had entered into previous loan transactions with this borrower which had been concluded successfully, resulting in additional revenue beyond interest payments for the affiliates involved. PART 2 OTHER INFORMATION Item 1. Legal Proceedings None, where the Partnership is a defendant. Please refer to Note 6 of Notes to Financial Statements. Item 2. Changes in the Securities Not Applicable Item 3. Defaults upon Senior Securities Not Applicable Item 4. Submission of Matters to a Vote of Security Holders Not Applicable Item 5. Other Information Not Applicable Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Not Applicable (b) Form 8-K The registrant has not filed any reports on Form 8-K during the nine month period ending September 30, 1997 SIGNATURES Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934 the registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized on the 12th day of November, 1997. REDWOOD MORTGAGE INVESTORS VII By: /s/ D. Russell Burwell --------------------------------------------- D. Russell Burwell, General Partner By: /s/ Michael R. Burwell --------------------------------------------- Michael R. Burwell, General Partner By: Gymno Corporation, General Partner By: /s/ D. Russell Burwell --------------------------------------------- D. Russell Burwell, President By: /s/ Michael R. Burwell --------------------------------------------- Michael R. Burwell, Secretary/Treasurer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the registrant and in the capacity indicated on the 6th day of November, 1997. Signature Title Date /s/ D. Russell Burwell - ----------------------- D. Russell Burwell General Partner November 6, 1997 /s/ Michael R. Burwell - ----------------------- Michael R. Burwell General Partner November 6, 1997 /s/ D. Russell Burwell - ----------------------- D. Russell Burwell President of Gymno Corporation, November 6, 1997 (Principal Executive Officer); Director of Gymno Corporation /s/ Michael R. Burwell - ----------------------- Michael R. Burwell Secretary/Treasurer of Gymno November 6, 1997 Corporation (Principal Financial and Accounting Officer); Director of Gymno Corporation EX-27 2 FDS --
5 9-MOS DEC-31-1997 JAN-01-1997 DEC-31-1997 185165 0 14621423 264720 0 0 0 0 15696682 0 0 2593661 0 0 13103021 15696682 0 1206036 0 116823 0 324027 142691 622495 0 622495 0 0 0 622495 .00 .00
-----END PRIVACY-ENHANCED MESSAGE-----