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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
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, 1999
Commission file number 000-23037
COMMUNITY INVESTMENT PARTNERS III, L.P., LLLP
_______________________________________________________________________
(Exact name of registrant as specified in its charter)
MISSOURI 43-1790352
________________________________________________________________________
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
12555 Manchester Road
St. Louis, Missouri 63131
_______________________________________________________________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (314) 515-2000
__________________
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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COMMUNITY INVESTMENT PARTNERS III, L.P., LLLP
INDEX
Page
Number
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Schedule of Portfolio Investments . . . . . . . . . . . . . . 3
Statement of Financial Condition. . . . . . . . . . . . . . . 5
Statement of Income . . . . . . . . . . . . . . . . . . . . . 6
Statement of Cash Flows . . . . . . . . . . . . . . . . . . . 7
Statement of Changes in Partnership Capital . . . . . . . . . 8
Notes to Financial Statements . . . . . . . . . . . . . . . . 9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . .10
Part II. OTHER INFORMATION <F*>
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . .11
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . .11
Signatures. . . . . . . . . . . . . . . . . . . . . . . . . .12
[FN]
<F*> Items 2,3,4 and 5 are omitted as they are not applicable
2
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Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
COMMUNITY INVESTMENT PARTNERS III, L.P., LLLP
SCHEDULE OF PORTFOLIO INVESTMENTS
As of March 31, 1999
<CAPTION>
________________________________________________________________________________________________________
Company Nature of Business
Investment Date Investment Cost Fair Value
________________________________________________________________________________________________________
<C> <S> <C> <C>
IMPLEMED, INC. Develops polymers that are
used to coat medical and other
devices where infection is a
serious problem
April 6, 1998 10,000 shares of Series D
Convertible Preferred Stock $100,000 $100,000
LIPOMED, INC. A diagnostic testing and
analytical company that is
pioneering new medical applications
of nuclear magnetic resonance
(NMR) spectroscopy.
June 16, 1998 16,667 shares of Series B
Convertible Preferred Stock 100,002 100,002
OPTIMARK TECHNOLOGIES, INC. Developed and patented a
computer-based method for structuring
auction markets that significantly
improves liquidity and efficiency,
lowering transaction costs in the process.
September 23, 1998 10,000 shares of Series B
Convertible Participating
Preferred Stock 100,000 100,000
PROTEIN DELIVERY INC. Drug delivery company specializing
in proprietary polymer-based systems
for the delivery and stabilization of
protein and peptide drugs.
April 6, 1998 44,445 shares of Series D
Preferred Stock 100,001 100,001
December 23, 1998 10% Bridge Note, due 4/1/99
and a Warrant to purchase
shares of Common Stock,
expiring 12/31/04 12,000 12,000
________________________________________________________________________________________________________
The accompanying notes are an integral part of these financial statements.
</TABLE>
3
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Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
COMMUNITY INVESTMENT PARTNERS III, L.P., LLLP
SCHEDULE OF PORTFOLIO INVESTMENTS (CONT'D)
As of March 31, 1999
<CAPTION>
________________________________________________________________________________________________________
Company Nature of Business
Investment Date Investment Cost Fair Value
________________________________________________________________________________________________________
<C> <S> <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
-------- --------
TOTAL INVESTMENTS $512,003 $512,003
======== ========
________________________________________________________________________________________________________
The accompanying notes are an integral part of these financial statements.
</TABLE>
4
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Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
COMMUNITY INVESTMENT PARTNERS III, L.P., LLLP
STATEMENT OF FINANCIAL CONDITION
(UNAUDITED)
<CAPTION>
March 31, December 31,
1999 1998
____________________________________________________________________________________________
ASSETS
------
<S> <C> <C>
Investments at Fair Value
(cost $512,003 and $512,003, respectively) $ 512,003 $ 512,003
Cash and Cash Equivalents 741,155 742,439
---------- ----------
TOTAL ASSETS $1,253,158 $1,254,442
========== ==========
<CAPTION>
LIABILITIES AND PARTNERSHIP CAPITAL
-----------------------------------
<S> <C> <C>
Liabilities:
Accounts Payable and Accrued Expenses $25,159 $14,000
---------- ----------
TOTAL LIABILITIES 25,129 14,000
---------- ----------
Partnership Capital:
Capital - Limited Partners 1,215,719 1,228,038
Capital - General Partners 12,280 12,404
---------- ----------
TOTAL PARTNERSHIP CAPITAL 1,227,999 1,240,442
---------- ----------
TOTAL LIABILITIES AND
PARTNERSHIP CAPITAL $1,253,158 $1,254,442
========== ==========
____________________________________________________________________________________________
The accompanying notes are an integral part of these financial statements.
</TABLE>
5
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Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
COMMUNITY INVESTMENT PARTNERS III, L.P., LLLP
STATEMENT OF INCOME
(UNAUDITED)
<CAPTION>
Three Months Three Months
Ended Ended
March 31, 1999 March 31, 1998
______________________________________________________________________________________________
INCOME
------
<S> <C> <C>
Interest Income $ - $ -
-------- -------
TOTAL INCOME - -
-------- -------
EXPENSES
--------
Management Fees 4,704 -
Organization Costs - 1,373
Professional Fees 4,739 2,500
Independent General Partners' Fees 3,000 3,000
-------- -------
TOTAL EXPENSES 12,443 6,873
-------- -------
NET LOSS $(12,443) $(6,873)
======== =======
Per Unit Information:
Net Loss $ (.23) $ (.13)
======== =======
Net Asset Value $ 22.37 $ 12.37
======== =======
Units Outstanding:
Limited Partners 54,340 54,340
General Partners 549 549
______________________________________________________________________________________________
The accompanying notes are an integral part of these financial statements.
</TABLE>
6
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Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
COMMUNITY INVESTMENT PARTNERS III, L.P., LLLP
STATEMENT OF CASH FLOWS
(UNAUDITED)
<CAPTION>
Three Months Three Months
Ended Ended
March 31, 1999 March 31, 1998
_____________________________________________________________________________________________
<S> <C> <C>
CASH FLOWS USED IN OPERATING ACTIVITIES:
Net loss $(12,443) $ (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 11,159 76,331
Decrease in payable to affiliates - (8,532)
Purchase of portfolio investments - (100,000)
-------- ---------
Net cash used in operating activities (1,284) (111,552)
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES:
Capital contributions - 685,011
-------- ---------
Net cash provided by financing activities - 685,011
-------- ---------
Net (decrease) increase in cash and cash equivalents (1,284) 573,459
CASH AND CASH EQUIVALENTS, beginning of period 742,439 1,100
-------- ---------
CASH AND CASH EQUIVALENTS, end of period 741,155 $ 574,559
======== =========
_____________________________________________________________________________________________
The accompanying notes are an integral part of these financial statements.
</TABLE>
7
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Part I. 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, 1999 and March 31, 1998
Limited Partners General Partners Total
_____________________________________________________________________________________________________________
<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)
---------- ------- ----------
Balance March 31, 1998 $ 672,446 $ 6,792 $ 679,238
========== ======= ==========
Balance, December 31, 1998 $1,228,038 $12,404 $1,240,442
Net Loss (12,319) (124) (12,443)
---------- ------- ----------
Balance March 31, 1999 $1,215,719 $12,280 $1,227,999
========== ======= ==========
_____________________________________________________________________________________________________________
The accompanying notes are an integral part of these financial statements.
</TABLE>
8
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Part I. 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.
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.
9
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Part I. 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
RESULTS OF OPERATIONS
Net loss for the first quarter of 1999 was $12,443, compared to a
net loss of $6,873 for the first quarter of 1998. The difference is
attributable to a $4,704 management fee that was not applicable for the
first quarter of 1998, its first quarter of operations. No gains or
losses have been realized nor are they expected to be realized in the
near future due to the recent acquisition of investments within the past
year.
Additional investments have not been made during the first quarter
of 1999. Currently, funds are being invested in a money market account
until appropriate investment opportunities become available. The future
income or loss of the Partnership is contingent upon the performance of
the portfolio investments and the ability to find suitable investment
alternatives.
INVESTMENT TRANSACTIONS
The Partnership did not participate in any portfolio investment
transactions during the period ended March 31, 1999.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 1999, the partnership's total capital of
$1,227,999, consisted of $1,215,719 in limited partner capital and
$12,280 in general partner capital. Net loss was allocated to the
limited partners in the amount of $12,319 and to the general partners in
the amount of $124.
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.
SUBSEQUENT EVENTS
None
YEAR 2000 ISSUE
Although the Partnership has no Year 2000 issues that would result
from its own information systems, the Partnership has investments in
publicly and privately placed securities and loans. The Partnership may
be exposed to credit risk to the extent that the related borrowers are
materially adversely impacted by the Year 2000 issue.
10
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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 June 30,
1998.
11
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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 10, 1999
Daniel A. Burkhardt
/s/ Ray L. Robbins
--------------------- Vice-President and Director May 10, 1999
Ray L. Robbins
12
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements for Community Investment Partners III, L.P., L.L.L.P.
for the quarter ended March 31, 1999 and is qualified in its entirety
by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<INVESTMENTS-AT-COST> 512,003
<INVESTMENTS-AT-VALUE> 512,003
<RECEIVABLES> 0
<ASSETS-OTHER> 741,155
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,253,158
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 25,159
<TOTAL-LIABILITIES> 25,159
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 54,889
<SHARES-COMMON-PRIOR> 54,889
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 1,227,999
<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> 12,443
<AVERAGE-NET-ASSETS> 1,234,221
<PER-SHARE-NAV-BEGIN> 22.60
<PER-SHARE-NII> (0.23)
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 22.37
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
