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UNITED STATES
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, 2000
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 [ ]
1
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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
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
Item 1. Legal Proceedings 12
Item 6. Exhibits and Reports on Form 8-K 12
Signatures 13
</TABLE>
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, 2000
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Company Nature of Business
Investment Date Investment Cost Fair Value
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ATHEROGENICS, INC. Pharmaceutical company
focused on the discovery and
development of therapeutics
for the treatments and prevention
of cardiovascular disease.
May 11, 1999 33,333 shares of Series C
Convertible Preferred Stock $ 99,999 $ 99,999
ENDICOR MEDICAL, INC. Develops devices for the
removal of blood clots and
occlusive tissue from arteries.
June 18, 1999 46,801 shares of Series C
Preferred Stock 100,000 100,000
March 14, 2000 4,730 shares of common stock 4,021 4,021
March 23, 2000 1,110 shares of common stock 1,388 1,388
INTELLIWORXX, INC. A Florida technology corporation
that creates, designs and delivers
products worldwide that offer
specific solutions for individual
customer needs
December 31, 1999 28,769 shares of
common stock and 100,694 100,694
1,678 warrants to purchase
common stock, exercisable
at $3.00 per share, through
March 3, 3005
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
- ---------------------------------------------------------------------------------------------------
<CAPTION>
The accompanying notes are an integral part of these financial statements.
3
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Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
COMMUNITY INVESTMENT PARTNERS III, L.P., LLLP
SCHEDULE OF PORTFOLIO INVESTMENTS (CONT'D)
As of March 31, 2000
- ---------------------------------------------------------------------------------------------------
Company Nature of Business
Investment Date Investment Cost Fair Value
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
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 4,976 shares of Series E
Preferred Stock and a warrant
to purchase 2,400 shares of
common stock 12,440 12,440
RENALTECH INTERNATIONAL Develops technology
for treating blood during
kidney dialysis
March 7, 2000 21,053 units of ownership 100,000 100,000
UNITED THERAPEUTICS Develops innovative
CORPORATION pharmaceutical and
biotechnological therapies
for the treatment of life
threatening diseases.
March 31, 1998 7,833 shares of
Common Stock 23,499 606,078
-------- ----------
TOTAL INVESTMENTS $742,044 $1,324,623
======== ==========
- ---------------------------------------------------------------------------------------------------
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,
2000 1999
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
------
Investments at Fair Value
(cost $742,044 and $688,442, respectively) $1,324,623 $1,777,760
Cash and Cash Equivalents 393,592 692,986
Accrued Interest Receivable 2,000 2,000
---------- ----------
TOTAL ASSETS $1,720,215 $2,472,746
========== ==========
LIABILITIES AND PARTNERSHIP CAPITAL
-----------------------------------
Liabilities:
Accounts Payable and Accrued Expenses $ 21,000 $ 21,386
---------- ----------
TOTAL LIABILITIES 21,000 21,386
---------- ----------
Partnership Capital:
Capital - Limited Partners 1,652,796 2,426,847
Capital - General Partners 46,419 24,513
---------- ----------
TOTAL PARTNERSHIP CAPITAL 1,699,215 2,451,360
---------- ----------
TOTAL LIABILITIES AND
PARTNERSHIP CAPITAL $1,720,215 $2,472,746
========== ==========
- ---------------------------------------------------------------------------------------------------
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, 2000 March 31, 1999
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
INCOME
------
Interest Income $ 9,708 $ -
---------- --------
TOTAL INCOME 9,708 -
---------- --------
EXPENSES
--------
Management Fees 9,273 4,704
Professional Fees 3,760 4,739
Independent General Partners' Fees 3,000 3,000
Other 566 -
---------- --------
TOTAL EXPENSES 16,599 12,443
---------- --------
Net Loss before Realized Gains
Net Unrealized Losses $ (6,891) $(12,443)
Realized Gains on Sales of Investments 1,133,710 -
Net Unrealized Losses on Investments (506,739) -
---------- --------
NET INCOME (LOSS) $ 620,080 $(12,443)
========== ========
Per Unit Information:
Net Income (Loss) $ 11.29 $ (.23)
========== ========
Net Asset Value $ 30.95 $ 22.37
========== ========
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, 2000 March 31, 1999
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS USED IN OPERATING ACTIVITIES:
Net income (loss) $ 620,080 $(12,443)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Purchase of portfolio investments (106,103) -
Proceeds from sales of portfolio investments 1,186,211 -
Unrealized losses on portfolio investments 506,739 -
Net realized gains on sale/liquidation of
portfolio investments (1,133,710) -
(Decrease) increase in accounts payable
and accrued expenses (386) 11,159
----------- --------
Net cash provided by (used in) operating activities 1,072,831 (1,284)
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES:
Capital distributions (1,372,225) -
----------- --------
Net cash used in financing activities (1,372,225) -
----------- --------
Net decrease in cash and cash equivalents (299,394) (1,284)
CASH AND CASH EQUIVALENTS, beginning of period 692,986 742,439
----------- --------
CASH AND CASH EQUIVALENTS, end of period $ 393,592 $741,155
=========== ========
- ---------------------------------------------------------------------------------------------------
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, 2000 AND MARCH 31, 1999
Limited Partners General Partners Total
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
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
=========== ======== ===========
Balance, December 31, 1999 $ 2,426,847 $ 24,513 $ 2,451,360
Net Income 584,449 35,631 620,080
Distributions (1,358,500) (13,725) (1,372,225)
----------- -------- -----------
Balance March 31, 1999 $ 1,652,796 $ 46,419 $ 1,699,215
=========== ======== ===========
- ---------------------------------------------------------------------------------------------------
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 income for the quarter ended March 31, 2000 was $620,080,
compared to a net loss of $12,443 for the quarter ended March 31, 1999.
The increase was primarily driven by realized gains from the sales of
investments.
Interest income of $9,708 represents interest received on funds
held in a money market account. The account was opened during the second
quarter of 1999 to hold funds until suitable investments are found.
The $1,133,710 realized gain for the three months ended March 31,
2000 consists of a gain from the sale of United Therapeutics (UTHR)
common stock. Net unrealized losses of $506,739 are the result of a
$752,499 reversal of the December 31, 1999 unrealized gain on the 17,500
shares of UTHR sold in 2000, netted against a $245,760 unrealized gain
on the remaining 7,833 shares of UTHR. There were no realized or
unrealized gains and losses for the three months ended March 31, 1999.
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.
Total expenses of $16,599 for the first quarter of 2000 increased
$4,156 (33%) from total expenses of $12,443 for the first quarter of
1999. Within total expenses, management fees increased $4,569 (97%) due
to an increase in the value of total assets between December 31, 1998
and December 31, 1999. Professional fees were slightly lower in 2000 and
other expense increased $566 due to banking fees in the money market
account.
A distribution to unitholders in the amount of $1,372,325,
representing a return of initial capital contributions, was made during
the first quarter of 2000.
10
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Part I. 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
period ended March 31, 2000.
<TABLE>
<CAPTION>
Type of Realized
Company Transaction Cost Proceeds Gain
- ----------------------------- --------------------------- -------- ---------- ----------
<S> <C> <C> <C> <C>
PURCHASES:
- ----------
Quarter 1 ended:
- ----------------
RenalTech International Purchase of Units
of Ownership $100,000
EndiCOR Medical, Inc. Purchase 5,841
shares of
Common Stock 5,409
Intelleworxx, Inc. Conversion of
accrued interest to
common stock 694
--------
TOTAL PURCHASES $106,103
========
SALES:
- ------
Quarter 1 ended:
- ----------------
United Therapeutics Sold 17,500 shares
of common stock $ 52,501 $1,186,211 $1,133,710
-------- ---------- ----------
TOTAL SALES $ 52,501 $1,186,211 $1,133,710
======== ========== ==========
</TABLE>
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 2000, the partnership's total capital of
$1,699,215 consisted of $1,652,796 in limited partner capital and
$46,419 in general partner capital. Net income was allocated to the
limited partners in the amount of $584,449 and to the general partners
in the amount of $35,631. During the first quarter of 2000, Partnership
capital accounts became equal to two times the original contributions.
As such, the Partnership Agreement required that a portion of the net
income be allocated 90% to the limited partners and 10% to the general
partner. In the future, profits will be allocated 90% to limited
partners and 10% to the general partner.
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.
11
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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 during the quarter ended
March 31, 2000.
12
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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
<TABLE>
<S> <C> <C>
/s/ Daniel A. Burkhardt
_______________________ President, Treasurer and Director May 11, 2000
Daniel A. Burkhardt
/s/ Ray L. Robbins
_______________________ Vice-President and Director May 11, 2000
Ray L. Robbins
</TABLE>
13
<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, 2000 and is qualified in its entirety
by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> DEC-31-2000
<INVESTMENTS-AT-COST> 742,044
<INVESTMENTS-AT-VALUE> 1,324,623
<RECEIVABLES> 2,000
<ASSETS-OTHER> 393,592
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,720,215
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 21,000
<TOTAL-LIABILITIES> 21,000
<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> 1,699,215
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 9,708
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 1,133,710
<APPREC-INCREASE-CURRENT> (506,739)
<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> 16,599
<AVERAGE-NET-ASSETS> 2,075,288
<PER-SHARE-NAV-BEGIN> 44.66
<PER-SHARE-NII> 11.29
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 25
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 30.95
<EXPENSE-RATIO> 0
</TABLE>
