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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 1998
Commission file number 000-23037
COMMUNITY INVESTMENT PARTNERS III, L.P., LLLP
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(Exact name of registrant as specified in its charter)
MISSOURI 43-1790352
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
12555 Manchester Road
St. Louis, Missouri 63131
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (314) 515-2000
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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
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<TABLE>
COMMUNITY INVESTMENT PARTNERS III, L.P., LLLP
INDEX
<CAPTION>
Page
Number
<S> <C>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheet 3
Schedule of Portfolio Investments 4
Income Statement 5
Statement of Cash Flows 6
Statement of Changes in Partnership Capital 7
Notes to Financial Statements 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
Part II. OTHER INFORMATION<F*>
Item 1. Legal Proceedings 13
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
<FN>
<F*> Items 2,3,4 and 5 are omitted as they are not applicable
</TABLE>
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Part. 1. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
COMMUNITY INVESTMENT PARTNERS III, L.P.,LLLP
BALANCE SHEET
(Unaudited)
<CAPTION>
March 31, December 31,
1998 1997
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ASSETS
------
<S> <C> <C>
Investments at Fair Value
(cost $100,000 and $0, respectively) $100,000 $ --
Cash and Cash Equivalents 574,559 1,100
Deferred Organizational Costs, net 80,990 8,532
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TOTAL ASSETS $755,549 $9,632
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<CAPTION>
LIABILITIES AND PARTNERSHIP CAPITAL
-----------------------------------
<S> <C> <C>
Liabilities:
Accounts Payable and Accrued Expenses $ 76,311 $ --
Payable to Affiliates -- 8,532
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TOTAL LIABILITIES 76,311 8,532
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Partnership Capital:
Capital - Limited Partners 672,446 100
Capital - General Partners 6,792 1,000
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TOTAL PARTNERSHIP CAPITAL 679,238 1,100
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TOTAL LIABILITIES AND
PARTNERSHIP CAPITAL $755,549 $9,632
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The accompanying notes are an integral part of these financial statements.
</TABLE>
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Part. 1. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
COMMUNITY INVESTMENT PARTNERS III, L.P., LLLP
SCHEDULE OF PORTFOLIO INVESTMENTS
<CAPTION>
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Company Nature of Business Fair Value
Initial Investment Date Investment Cost March 31, 1998
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<S> <C> <C> <C>
UNITED THERAPEUTICS Develops innovative pharmaceutical
CORPORATION and biotechnological therapies for the
treatment of life threatening diseases.
March 31, 1998 100,000 Shares of Common stock $100,000 $100,000
-------- --------
$100,000 $100,000
======== ========
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The accompanying notes are an integral part of these financial statements.
</TABLE>
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Part. 1. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
COMMUNITY INVESTMENT PARTNERS III, L.P., LLLP
INCOME STATEMENT
(Unaudited)
<CAPTION>
Three Months
Ended
March 31, 1998
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<S> <C>
INCOME
------
Interest and Dividend Income $ 0
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TOTAL INCOME 0
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EXPENSES
--------
Independent General Partners' Fees 3,000
Professional Fees 2,500
Amortization of Deferred Organizational Costs 1,373
-------
TOTAL EXPENSES 6,873
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NET LOSS $(6,873)
=======
Per Unit Information:
Net Loss (as of March 31, 1998) $ (.13)
=======
Net Asset Value (as of March 31, 1998) $ 12.37
=======
Units Outstanding:
Limited Partners 54,340
General Partners 549
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The accompanying notes are an integral part of these financial statements.
</TABLE>
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Part. 1. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
COMMUNITY INVESTMENT PARTNERS III, L.P., LLLP
STATEMENT OF CASH FLOWS
(Unaudited)
<CAPTION>
Three Months
Ended
March 31, 1998
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<S> <C>
CASH FLOWS USED BY OPERATING ACTIVITIES:
Net Loss $ (6,873)
Adjustments to reconcile Net Loss to Net
Cash Used by Operating Activities -
Amortization of Deferred Organization Costs 1,373
Increase in Deferred Organization Costs (73,831)
Increase in Accounts Payable and Accrued Expenses 76,311
Decrease in Payable to Affiliates (8,532)
Purchase of Portfolio Investments (100,000)
---------
Total Cash Used by Operating Activities (111,552)
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES:
Capital Contributions 685,011
---------
Total Cash Provided by Financing Activities 685,011
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Net Increase in Cash and Cash Equivalents 573,459
CASH AND EQUIVALENTS, beginning of year 1,100
---------
CASH AND EQUIVALENTS, end of year $ 574,559
=========
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The accompanying notes are an integral part of these financial statements.
</TABLE>
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Part. 1. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
COMMUNITY INVESTMENT PARTNERS III, L.P., LLLP
STATEMENT OF CHANGES IN PARTNERSHIP CAPITAL
(Unaudited)
<CAPTION>
Three Months Ended March 31, 1998
Limited Partners General Partners Total
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<S> <C> <C> <C>
Balance, December 31, 1997 $ 100 $1,000 $ 1,100
Contributions 679,150 5,861 685,011
Net Loss (6,804) (69) (6,873)
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Balance, March 31, 1998 $672,446 $6,792 $679,238
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The accompanying notes are an integral part of these financial statements.
</TABLE>
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Part. 1. FINANCIAL INFORMATION
Item 1. Financial Statements
COMMUNITY INVESTMENT PARTNERS III, L.P., LLLP
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
BASIS OF PRESENTATION
Community Investment Partners III, L.P., LLLP (CIP III) is a limited
liability limited partnership which has elected to be a business development
company under the Investment Company Act of 1940, as amended. As a business
development company, the partnership is required to invest at least 70% of
its total assets in qualifying investments as specified in the Investment
Company Act. CIP Management, L.P., LLLP (Management), a limited liability
limited partnership, is the Managing General Partner of CIP III. Management
is responsible for making all decisions regarding CIP III's investment
portfolio.
CIP III was formed July 23, 1997. The Partnership raised $686,111
through a public offering of its units during the first quarter of 1998.
All portfolio investments are carried at cost until significant
developments affecting an investment provide a basis for revaluation.
Thereafter, portfolio investments will be carried at fair value as obtained
from outside sources or at a value determined quarterly by the Managing
General Partner under the supervision of the Independent General Partners.
Due to the inherent uncertainty of valuation, those estimated values for
portfolio investments carried at cost may differ significantly from the
values that would have been used had a ready market for the investment
existed, and the differences could be material to the financial statements.
Investments in securities traded on a national securities exchange will be
valued at the latest reported sales price on the last business day of the
period. If no sale has taken place, the securities will be valued at the
last bid price. If no bid price has been reported, or if no exchange
quotation is available, the securities will be valued at the quotation
obtained from an outside broker. Investment transactions are recorded on a
trade date basis. Income is recorded on an accrual basis.
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Part. 1. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
COMMUNITY INVESTMENT PARTNERS III, L.P., LLLP
MANAGEMENT'S FINANCIAL DISCUSSION
LIQUIDITY AND CAPITAL RESOURCES
CIP III participated in a public offering of its limited partnership
interests ("Units") during the first quarter of 1998. The partnership sold
54,340 Units of limited partnership interest for an aggregate price of
$679,250. The sole general partner of CIP III is the Managing General Partner
which owns 1% of the aggregate capital contributions of all partners, or
$6,861 of general partner capital. The aggregate capital contributions of
both the limited partner and general partner capital was $686,111.
The Partnership may request an additional capital contribution from
each partner, in an amount up to the initial capital contribution, which
could result in a two-fold increase in the offering proceeds. The
contributions would be less if contributions are not made at the Capital Call
Date. CIP III's potential profitability could be affected by the amount of
funds at its disposal.
The $100 initial limited capital contribution was returned to the
related party.
As of March 31, 1998, the partnership's total capital of $679,238,
consisted of $672,446 in limited partner capital and $6,792 in general
partner capital. Net loss was allocated to the limited partners in the
amount of $6,804 and to the general partners in the amount of $69.
The Partnership is actively reviewing potential portfolio investments.
Until the Partnership invests in portfolio investments, it intends to invest
its cash balances in a money market account. Due to their short term nature,
such investments provide the Partnership with the liquidity necessary for
investments as opportunities arise.
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Part. 1. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
RESULTS OF OPERATIONS
Since the Partnership's registration became effective with the
Securities and Exchange Commission on January 9, 1998, there is a lack of
prior information to compare with the current quarter's results of
operations. Net loss for the quarter ended March 31, 1998 was $6,873. This
loss is attributable to $2,500 of expenses paid for professional fees, the
$3,000 quarterly fee paid to the Independent General Partners and $1,373
incurred for amortization of deferred organizational costs. There was no
income during the first quarter of 1998.
CIP III is responsible for paying organizational and offering expenses
up to 6% of the maximum gross offering proceeds, or $82,363. For purposes of
determining the amount of the offering and organizational expenses payable by
the Partnership, gross offering proceeds include the proceeds from an
additional Capital Contribution of $12.50 per Unit, or a maximum aggregate of
$5 million of gross offering proceeds (a maximum reimbursement of $300,000).
Since its inception, CIP III has paid $8,552 of deferred organizational
costs. After the end of the first quarter, the Partnership paid $73,811 of an
invoice totaling $170,000 for legal services rendered in connection with its
syndication and public offering. The Managing General Partner or one of its
affiliates is responsible for paying the $96,189 balance of the invoice plus
any future organizational and offering expenses. The Partnership's share of
total deferred organizational costs of $82,363 will be amortized over a
sixty-month period, beginning March 1, 1998.
The future income of loss of the Partnership is contingent upon the
performance of the portfolio investments and the ability to find suitable
investment alternatives.
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Part. 1. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
INVESTMENT TRANSACTIONS
Following is a summary of portfolio investment transactions during the
quarter ended March 31, 1998.
<TABLE>
<CAPTION>
Type of Realized
Company Transaction Cost Proceeds Gain (Loss)
- ------------------- ------------ -------- -------- -----------
<S> <C> <C>
United Therapeutics Purchase of
Corporation Common Stock $100,000
--------
Total $100,000
========
</TABLE>
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Part. 1. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
SUBSEQUENT EVENTS
The Partnership made two portfolio investments after the end of the
first quarter. On April 6, 1998, the Partnership invested $100,000 in
Implemed, Inc. and received 10,000 shares of Series D Convertible Preferred
Stock. Implemed, Inc. develops polymers that are used to coat medical and
other devices where infection is a serious problem. Also on April 6, 1998,
the Partnership invested $100,001 in Protein Delivery Inc. and received
44,445 shares of Series D Preferred Stock. Protein Delivery Inc. specializes
in the development of proprietary polymer-based systems for the delivery and
stabilization of protein and peptide drugs.
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Part. II. OTHER INFORMATION
COMMUNITY INVESTMENT PARTNERS III, L.P., LLLP
Item 1: Legal Proceedings
The partnership is not a party to any material pending legal
proceedings.
Item 6: Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
No reports were filed on Form 8-K for the quarter ended March 31, 1998.
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SIGNATURES
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.
COMMUNITY INVESTMENT PARTNERS III, L.P., LLLP
By: CIP Management, L.P., LLLP, its Managing General Partner
By: CIP Management, Inc., its Managing General Partner
/s/ Daniel A. Burkhardt
----------------------- President, Treasurer and Director May 15, 1998
Daniel A. Burkhardt
/s/ Ray L. Robbins, Jr
----------------------- Vice-President and Director May 15, 1998
Ray L. Robbins, Jr.
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<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from
the financial statements for Community Investment Partners III L.P.,
LLLP for the quarter ended March 31, 1998 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<INVESTMENTS-AT-COST> 100,000
<INVESTMENTS-AT-VALUE> 100,000
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 755,549
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 76,311
<TOTAL-LIABILITIES> 76,311
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 54,889
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 679,238
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 6,873
<AVERAGE-NET-ASSETS> 340,169
<PER-SHARE-NAV-BEGIN> 12.50
<PER-SHARE-NII> (.13)
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.37
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
