SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1993
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from
_______________ to _________________
Commission file number 2-80216
LEASERVICE INCOME FUND-I
(Exact name of registrant as specified in its charter)
California 06-1085385
---------------------------- ------------------------------------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
25 East Spring Valley Avenue, Maywood, New Jersey 07607
- ------------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (201) 368-2515
Securities registered pursuant to Section 12(b) of the Act:
Title of each Class: None
Name of each exchange on which registered: None
Securities registered pursuant to Section 12(g) of the Act: None
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[ ]
As of December 31, 1993, 76,328 Units of Limited Partnership interest were
outstanding. No market exists for the Units of Limited Partnership interest and,
therefore, there exists no aggregate market value at December 31, 1993.
Documents Incorporated by Reference: None
-1-
<PAGE>
PART I
Item 1. Business
GENERAL
Leaservice Income Fund-I (the "Partnership") was organized as a
limited partnership under the Uniform Limited Partnership Law of the State of
California on April 22, 1983. During the period from June 23, 1983 to October 9,
1984, the Partnership sold an aggregate of 76,328 units of limited partnership
interests ("Units") in the Partnership at a purchase price of $100 per Unit
pursuant to a Registration Statement on Form S-1 (File No. 2-80216) declared
effective by the Securities and Exchange Commission on June 23, 1983. The
Partnership actively engaged in the equipment leasing business from 1983 until
June 1986 during which it purchased equipment subject to nineteen operating
leases having an aggregate purchase price of approximately $9,462,615. Since
June 1986 the Partnership has not purchased any equipment. Since May 24, 1991,
when the Partnership was dissolved by virtue of the dissolution of its sole
general partner, Leaservice Partners, a New York general partnership, the
Partnership has been in the process of winding up its business. By December 31,
1993, all operating leases to which the Partnership's equipment had been subject
had expired and all of its equipment, which by then had been fully depreciated,
was written off. A Certificate of Cancellation was filed with the Secretary of
State of the State of California on December 17, 1997
DISSOLUTION OF THE PARNERSHIP
The Partnership's sole general partner was Leaservice Partners,
a New York general partnership which initially consisted of three corporate
partners: (i) National Industrial Services Corp., a New York corporation (which
changed its name to Capital Market Services Corp and was merged with and into
Pittsburgh Annealing Box Company, a Pennsylvania corporation ("PAB")in October
1987), and which served as the managing partner of Leaservice Partners; (ii)
Mid-States Resources, Inc., a Missouri corporation which dissolved on March 1,
1996; and (iii) Mid-States Leasing, Inc., a Missouri corporation which on May
24, 1991 withdrew from Leaservice Partners causing the general partnership's
dissolution; Mid-States Leasing, Inc. was formally dissolved on June 29, 1991.
The dissolution of Leaservice Partners on May 24, 1991, caused
the dissolution of the Partnership pursuant to the terms of the Partnership's
Amended and Restated Agreement of Limited Partnership (the "Limited Partnership
Agreement") . The Partnership's limited partners were advised of the dissolution
of Leaservice Partners and its effect on the Partnership and were given the
opportunity, pursuant to the terms of the Limited Partnership Agreement to
continue the Partnership and elect a new general partner at a meeting of limited
partners scheduled for July 8, 1991. At this meeting, the requisite number of
limited partners failed to vote to continue the Partnership.
Accordingly, since May 1991, the Partnership has been in the
process of winding up its affairs. From May 1991 until January 1998, PAB, (as
the successor to the sole managing partner of Leaservice Partners, the general
partnership that served as the sole general partner of the Partnership) oversaw
the winding up of the business of Leaservice Partners and the Partnership. On
January 7, 1998, Capital Resource Group, L.L.C., a Pennsylvania limited
liability company ("CRG") assumed all of the rights and all of the obligations
of PAB in the Partnership and in Leaservice Partners. CRG is overseeing the
final stages of the winding up of the affairs of the Partnership.
-2-
<PAGE>
Item 2. Properties
During the year ended December 31, 1993 and thereafter, the
Partnership has not owned or leased any material property.
Item 3. Legal Proceedings
None.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders, through
the solicitation of proxies or otherwise, during the fourth quarter of the year
covered by this report or at anytime thereafter.
PART II
Item 5. Market for the Partnership's Common
Equity and Related Stockholder Matters
(a) The Partnership's Units have never been publicly traded.
Pursuant to the terms of the Partnership's Limited Partnership Agreement, a Unit
could be transferred only after certain requirements were satisfied and
transferees could become limited partners only with the consent of the general
partner, which consent could be granted or withheld at the sole discretion of
the general partner. There has never been a market for such Units and no public
trading market ever developed for the Units.
(b) As of December 31, 1993 and through the date of the filing
of this Annual Report on Form 10-K, there were approximately 800 holders of
record of the Partnership's Units and one holder of a general partnership
interest in the Partnership.
Item 6. Selected Financial Data
<TABLE>
<CAPTION>
Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year
Ended Ended Ended Ended Ended
12/31/93 12/31/92 12/31/91 12/31/90 12/31/89
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Total Income .............................. $ 81,637 $ 5,620 $ 46,490 $ 71,814 $ 311,275
Net Income (Loss) Allocable
to Limited Partners ....................... 69,391 (20,904) (34,274) (106,601) (23,109)
Net Income (Loss) Allocable to
General Partner ........................... 12,246 (211) (346) (1,077) (2,568)
Distributions to Limited Partners ......... -0- -0- -0- 381,640 1,526,560
Equipment Purchased for Rental ............ -0- -0- -0- -0- -0-
</TABLE>
-3-
<PAGE>
<TABLE>
<CAPTION>
December December December December December
31, 1993 31, 1992 31, 1991 31, 1990 31, 1989
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Total Assets .............................. $ 144,469 $ 173,479 $ 193,390 $ 208,762 $ 716,478
Total Liabilities ......................... 70,970 181,617 180,413 161,165 179,563
Total Partners' Equity (Deficiency) ....... 73,499 (8,138) 12,977 47,597 536,915
</TABLE>
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations
RESULTS OF OPERATIONS
The Partnership was dissolved in fiscal 1991 and continued to
wind up its affairs during the fiscal year ended December 31, 1993. See Item 1
"Business".
The Partnership ceased purchasing equipment subject to operating
leases in June 1986, because, in the opinion of the general partner, total
prospective returns attainable on such leases (taking into consideration
residual equipment value risks which the Partnership would be subject to) were
not been favorable to the Partnership.
During the fiscal year ended December 31, 1993, all operating
leases to which the Partnership's equipment had been subject expired or were
otherwise terminated and all equipment then owned by the Partnership (which had
an original cost of $104,197 and which had been fully depreciated) was written
off.
During the fiscal year ended December 31, 1993, customer
deposits totaling $81,212 which were to be applied to the final months rent upon
termination of the applicable operating leases were recognized as income. During
the fiscal year ended December 31, 1993 operating lease rentals were $300
compared to $0.00 and $34,884 for the years ended December 31, 1992 and December
31, 1991, respectively. The decreases in income from operating lease rentals
were due to the maturity of certain operating lease agreements, the sale of
equipment subject to leases, and the inability of the Partnership to acquire
additional leases. Operating expenses declined from $81,110 in 1991 to $26,735
in 1992 and to $4,450 in 1993 primarily as a result of decreases in marketing
and management fees.
Net income (loss) for the years ended December 31, 1993, 1992
and 1991 was $81,637, ($21,115) and ($34,620), respectively. Net income in 1993
and was allocated $69,381 (85%) to the limited partners and $12,246 (15%) to the
general partner. Net (loss) for the years December 31, 1992 and 1991 was
allocated ($20,904) and ($34,274) (99%), respectively, to the limited partners
and ($211) (1%) and ($346) (1%), respectively, to the general partner.
For the years ended December 31, 1993, 1992 and 1991, income
(loss) per Unit on a weighted average basis was $.91, ($.27) and ($.45),
respectively.
-4-
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Partnership had sufficient funds to cover its diminishing
expenses in 1994.
Item 8. Financial Statements and Supplementary Data
(Annexed hereto starting on page F-1)
Item 9. Changes in and Disagreements on Accounting and
Financial Disclosure
As reported in the Company's Annual Report on Form 10-K for the
year ended December 31, 1992, on May 14, 1993 the Company notified Deloitte &
Touche, which had previously been the independent accountant of the Company,
that it had been dismissed. On September 10, 1992 Capuano & Hartley CPAs was
selected to audit the Company's financial statements for the year ended December
31, 1991. Capuano & Hartley, CPAs served as the Partnership's independent
accountants from September 10, 1992 until they were formally dismissed on
December 31, 1997. As reported in the Company's Current Report on Form 8-K dated
February 5, 1998, on December 31, 1997, the Partnership formally dismissed
Capuano & Hartley, CPAs as its independent accountant because Capuano & Hartley,
CPAs had disbanded in 1996. On December 23, 1997, the Partnership engaged Wiss &
Co. to serve as its independent accountants to audit the Partnership's financial
statements for the years ended December 31, 1993, 1994, 1995, 1996 and 1997 as
part of the Partnership's effort to complete winding up its affairs following
the Partnership's dissolution on May 24, 1991. As reported in the Company's
Current Report on Form 8-K dated February 5, 1998, while serving as the
Partnership's independent accountants from September 10, 1992 until December 31,
1997, Capuano & Hartley, CPAs audited the Registrant's annual financial
statements for the years ended December 31, 1991 and 1992 and their reports on
these financial statements did not contain an adverse opinion or disclaimer of
opinion and were not qualified or modified as to uncertainty, scope or
accounting principals. Until December 23, 1997, the Partnership had not
requested Capuano & Hartley, CPAs or any other independent accountant to audit
the Partnership's financial statements for the years ended December 31, 1993,
1994, 1995, 1996 and 1997 because as more particularly described in Item 1
above, the Partnership has been in the process of winding up its affairs since
its dissolution during fiscal 1991, has engaged in no new business since June
1986 and believed that the cost of annual audits exceeded the value to be
derived from same in light of the Partnership's small and diminishing assets and
the lack of a public market for its Units of limited partnership interest.
PART III
Item 10. Directors and Executive Officers of the Registrant
The general partner of the Partnership was Leaservice Partners,
a New York general partnership which has dissolved on May 21, 1991. From May
1991 until January 1998, PAB, (as the successor to the sole managing partner of
Leaservice Partners, the general partnership that served as the sole general
partner of the Partnership) oversaw the winding up of the business of Leaservice
Partners and the Partnership. On January 7, 1998, CRG assumed all of the rights
and all of the obligations of PAB in the Partnership and in Leaservice Partners.
CRG is overseeing the final stages of the winding up of the affairs
-5-
<PAGE>
of the Partnership. The executive officers and directors of PAB during the year
ended December 31, 1993 were Sam Michaels, Chief Executive Officer, President
and Director, Edward J. Landau, Secretary and Director and John A. Kenna, Vice
President The executive officers and managers of CRG are Sam Michaels, Chairman
of the Board and Manager, Edward J. Landau, Secretary and Manager and Gary
Hitechew, President and Manager.
Item 11. Management Remuneration and Transactions
(Certain of the capitalized terms used in this section are
defined at the end of the section.)
The Partnership's Limited Partnership Agreement provides that
the general partner is compensated for services performed in connection with,
among other things, managing the operations of the Partnership. As compensation
for the management services it performs the general partner receives a
management fee payable quarterly in an amount equal to 3% of the Partnership's
gross revenues derived from full payout leases, 6% of the partnership's gross
revenues derived from operating leases and 3% of the Partnership's gross
revenues derived from the sale of equipment. If the Partnership does not
generate sufficient cash from operations to pay the management fee or even if it
does, at the discretion of the General Partner, such fees will be accrued as
debt of the Partnership payable out of cash available for distribution.
In addition to the management fee, the general partner is
allocated 1% of the Partnership's net losses and 15% of the Partnership's net
income. The general partner also is reimbursed for any direct expenses incurred
by it, its employees or agents in connection with the Partnership's business and
on behalf of the Partnership, except that the general partner is not reimbursed
for any general and administrative expenses or other overhead expenses of the
general partner and is not reimbursed for any organizational and offering
expenses in excess of 3% of the gross proceeds of the offering of Units.
During the fiscal year ended December 31, 1993, the Partnership
did not pay or accrue a management fee applicable to the general partner; the
general partner was allocated $12,246 (15%) of the net income of the Partnership
for such year.
Item 12. Security Ownership of Certain Beneficial
Owners and Management
(a) No person owns of record, or is known by the Partnership to
own beneficially, more than 5% of any class of the voting securities of the
Partnership
(b)The general partner's general partnership interest in the
Partnership represents a 15% interest in the Partnership's annual net income for
financial reporting purposes and tax allocations of 1% of net losses and 15% of
net income.
Item 13. Certain Relationships and Related Transactions
None.
-6-
<PAGE>
Item 14. Exhibits, Financial Statement
Schedules and Reports on Form 8-K
(a) Exhibits
(3) Restated and Amended Agreement of Limited
Partnership of the Partnership dated as of June 23, 1983. Incorporated by
reference to Exhibit A to the definitive Prospectus dated June 23, 1983 filed
with the Securities and Exchange Commission pursuant to Rule 424(b) under the
Securities Act of 1933.
(b) Financial Statements and Schedules
Financial Statements Page No.
-------------------- --------
Independent Auditors' Reports F-1
Balance Sheets as of December 31, 1993 and 1992 F-3
Statements of Operations for the years ended
December 31, 1993, 1992 and 1991 F-4
Statements of Changes in Partners' Equity
(Deficiency) for the years ended
December 31, 1993, 1992 and 1991 F-5
Statements of Cash Flows for the years
ended December 31, 1993, 1992 and 1991 F-6
Notes to Financial Statements F-7
Financial Statement Schedules
Schedule V - Property, Plant and Equipment
for the years ended
December 31, 1993, 1992 and 1991 F-10
Schedule VI - Accumulated Depreciation of
Property, Plant and Equipment for the years
ended December 31, 1993, 1992 and 1991 F-12
All other schedules are omitted because they are not
required or because the required information is presented in the
financial statements or related notes.
(c) Reports on Form 8-K
The Partnership did not file any Current Reports on Form
8-K during the last quarter of the fiscal year ended December 31, 1993.
-7-
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
LEASERVICE INCOME FUND - I (dissolved)
By: LEASERVICE PARTNERS (dissolved)
By: CAPITAL RESOURCE GROUP LLC (successor
to the managing partner of
Leaservice Partners)
Dated: September 29, 1998 By: /s/ Edward J. Landau
--------------------
Edward J. Landau
Secretary
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated:
Signature Title Date
- --------- ----- ----
/s/ Sam Michaels Chairman of the Board September 29, 1998
- ---------------- and Manager
Sam Michaels (Principal Executive Officer)
/s/ Patrick Costello Consultant September 29, 1998
- -------------------- Principal Accounting and
Patrick Costello Financial Officer
/s/ Edward J. Landau Secretary and Manager September 29, 1998
- --------------------
Edward J. Landau
-8-
<PAGE>
INDEPENDENT AUDITORS' REPORT
General Partner and Limited Partners
Leaservice Income Fund - I
We have audited the accompanying balance sheet of Leaservice Income Fund - I (A
California Limited Partnership) as of December 31, 1993 and the related
statements of operations, changes in partners' equity (deficiency), cash flows,
and Schedules V and VI of Item 13(b) of annual report on Form 10-K to Securities
and Exchange Commission for the year ended December 31, 1993. These financial
statements and schedules are the responsibility of the Partnership's management.
Our responsibility is to express an opinion on these financial statements and
schedules based on our audit. The financial statements of Leaservice Income Fund
- - I as of December 31, 1992 were audited by other auditors whose report dated
March 1, 1993 expressed an unqualified opinion on those statements including
Schedules V and VI of item 13(b) on annual report on Form 10-K to Securities and
Exchange Commission.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and schedules are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements and
schedules. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement and schedules presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements and schedules referred to above present
fairly, in all material respects, the financial position of Leaservice Income
Fund - I (A California Limited Partnership) as of December 31, 1993 and the
results of its operations and its cash flows for the year ended December 31,
1993 in conformity with generally accepted accounting principles.
As indicated in the Notes to the financial statements, the Partnership has not
purchased any new equipment for lease, has not entered into any new agreements
and does not have any equipment out on lease.
WISS & COMPANY, LLP
Livingston, New Jersey
January 3, 1998
F-1
<PAGE>
INDEPENDENT AUDITOR'S REPORT
General Partner and Limited Partners
Leaservice Income Fund - I
White Plains, New York
We have audited the accompanying balance sheet of Leaservice Income Fund - I (a
California limited partnership) as of December 31, 1992 and 1991 and the related
statements of operations, changes in partners' equity, cash flows, and Schedules
V and VI of Item 13(b) of annual report on Form 10-K to Securities and Exchange
Commission for the years ended December 31, 1992 and 1991. These financial
statements and schedules are the responsibility of the Partnership's management.
Our responsibility is to express an opinion on these financial statements and
schedules based on our audit. The financial statements of Leaservice Income Fund
- - I as of December 31,1990 were audited by other auditors whose report dated
January 29, 1991 expressed an unqualified opinion on those statements including
Schedules V and VI of item 13(b) on annual report on Form 10-K to Securities and
Exchange Commission.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and schedules are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements and
schedules. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement and schedules presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, such financial statements and schedules present fairly, in all
material respects, the financial position of Leaservice Income Fund - I (a
California limited partnership) as of December 31, 1992 and 1991 and the results
of its operations and its cash flows for the years ended December 31, 1992 and
1991 in conformity with generally accepted accounting principles.
As indicated in Note B to the financial statements, the Partnership has not
purchased any new equipment for lease and has not entered into any new
agreements.
CAPUANO & HARTLEY, CPAs
March 1,1993
F-2
<PAGE>
LEASERVICE INCOME FUND - I
(A CALIFORNIA LIMITED PARTNERSHIP)
BALANCE SHEETS
December 31,
------------
1993 1992
---------- ----------
ASSETS
CASH AND CASH EQUIVALENTS ............................ $ 144,469 $ 173,479
Computer equipment held for rental at cost,
net of accumulated depreciation and provision
for impairment in carrying value - $0 in 1993
and $104,197 in 1992 ............................... -- --
---------- ----------
$ 144,469 $ 173,479
LIABILITIES AND PARTNERS' EQUITY (DEFICIENCY)
LIABILITIES:
Customer deposits .................................. $ -- $ 81,212
Accrued expenses ................................... 3,239 22,674
Sales tax payable .................................. 44,216 54,216
Due to General Partner ............................. 23,515 23,515
--------- ---------
70,970 181,617
--------- ---------
PARTNERS' EQUITY (DEFICIENCY):
Limited Partners ................................ 81,594 12,203
General Partners ................................ (8,095) (20,341)
--------- ---------
Total Partners' Equity (Deficiency) 73,499 (8,138)
--------- ---------
$ 144,469 $ 173,479
See the accompanying notes to financial statements.
F-3
<PAGE>
LEASERVICE INCOME FUND - I
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
Year Ended December 31,
-----------------------
1993 1992 1991
-------- -------- --------
INCOME:
Operating lease rentals ................... $ 296 $ -- $ 34,884
Lease termination ......................... 81,212 -- --
Gain on sale of equipment ................. -- -- 2,000
Interest .................................. 4,579 5,620 9,606
-------- -------- --------
86,087 5,620 46,490
OPERATING EXPENSES .......................... 4,450 26,735 81,110
-------- -------- --------
NET INCOME (LOSS) ........................... $ 81,637 $(21,115) $(34,620)
======== ======== ========
ALLOCATION OF NET INCOME (LOSS):
Net income (loss) allocable
to General Partner ....................... $ 12,246 $ (211) $ (346)
======== ======== ========
Net income (loss) allocable
to Limited Partners ...................... $ 69,391 $(20,904) $(34,274)
======== ======== ========
Net income (loss) per weighted average
Limited Partnership Unit ................. $ 0.91 $ (0.27) $ (0.45)
======== ======== ========
See the accompanying notes to financial statements.
F-4
<PAGE>
<TABLE>
<CAPTION>
LEASERVICE INCOME FUND - I
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIENCY)
Total
Limited Partners Partners'
General -------------------------- Equity
Partner (Units) (Amounts) (Deficiency)
------- ------- --------- ------------
<S> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1991 ........................... $(19,784) $ 76,328 $ 67,381 $ 47,597
Year Ended December 31, 1991 -
Net loss ...................................... (346) -- (34,274) (34,620)
-------- -------- -------- --------
BALANCE, DECEMBER 31, 1991 .......................... (20,130) 76,328 33,107 12,977
Year Ended December 31, 1992 -
Net loss ....................................... (211) -- (20,904) (21,115)
-------- -------- -------- --------
BALANCE, DECEMBER 31, 1992 .......................... (20,341) 76,328 12,203 (8,138)
Year Ended December 31, 1993 -
Net Income ..................................... 12,246 -- 69,391 81,637
-------- -------- -------- --------
BALANCE, DECEMBER 31, 1993 .......................... $ (8,095) $ 76,328 $ 81,594 $ 73,499
======== ======== ======== ========
</TABLE>
See the accompanying notes to financial statements.
F-5
<PAGE>
<TABLE>
<CAPTION>
LEASERVICE INCOME FUND - I
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
Year Ended December 31,
-------------------------------------------------
1993 1992 1991
--------- --------- ---------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) ................................................. $ 81,637 $ (21,115) $ (34,620)
Adjustments to reconcile net income (loss)
to net cash flows from operating activities:
Gain on sale of equipment ...................................... -- -- (2,000)
Accounts receivable ............................................ -- -- 14,733
Customer deposits .............................................. (81,212) -- --
Accrued expenses and sales tax payable ......................... (29,435) 1,204 19,248
--------- --------- ---------
Net Cash Flows From Operating Activities ..................... (29,010) (19,911) (2,639)
CASH FLOWS FROM INVESTING ACTIVITIES -
Proceeds from sales of equipment .................................. -- -- 2,000
--------- --------- ---------
NET CHANGE IN CASH AND CASH EQUIVALENTS ................................ (29,010) (19,911) (639)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR ........................... $ 173,479 $ 193,390 $ 194,029
--------- --------- ---------
CASH AND CASH EQUIVALENTS, END OF YEAR ................................. $ 144,469 $ 73,479 $ 193,390
========= ========= =========
See the accompanying notes to financial statements.
F-6
</TABLE>
<PAGE>
LEASERVICE INCOME FUND - I
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
Note 1 - Nature of the Business and Summary of Significant Accounting Policies:
NATURE OF THE BUSINESS - Leaservice Income Fund - I ("the
Partnership") is a California Limited Partnership formed for the
purpose of acquiring various types of capital equipment and leasing
same to third parties primarily on a short-term basis. On August 18,
1983, the first limited partners were admitted to the Partnership. The
leasing of acquired equipment commenced on October 1, 1983.
Leaservice Partners ("Leaservice"), a New York General Partnership,
was the sole General Partner of the Partnership until May 24, 1991.
The Partnership was informed that effective as of such date,
Leaservice had been dissolved due to the withdrawal from that
partnership of one of its general partners. Section 14.1.1 of the
Amended and Restated Partnership Agreement of the Partnership provides
that the Partnership is dissolved upon the dissolution of a general
partner.
A meeting of limited partners was scheduled for the purposes of
considering whether the Partnership should be continued and a new
general partner elected. However, limited partners owning 50% or more
of the total outstanding Units of the Fund voting in person or by
proxy did not vote to continue the existence of the Partnership or to
elect a new general partner.
The sole remaining entity that once constituted Leaservice is winding
up the business of the Partnership.
USE OF ESTIMATES - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
ALLOCATION OF INCOME AND LOSSES - Net income is allocated 15% to the
General Partner, and 85% to the Limited Partners. Net losses incurred
as a result of operations are allocated 1% to the General Partner, and
99% to the Limited Partners.
DISTRIBUTIONS - To the extent that cash available for distribution
allows, distributions to limited partners will not be less than an
amount equal to 50% of the limited partners' share of the net income
of the Partnership.
F-7
<PAGE>
LEASERVICE INCOME FUND - I
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
FINANCIAL INSTRUMENTS - Financial instruments include cash and accrued
expenses. The amounts reported for financial instruments are
considered to be reasonable approximations of their fair values, based
on market information available to management.
CASH AND CASH EQUIVALENTS - Includes cash and interest bearing
deposits with original maturity dates of less than 90 days. The
Partnership maintains its cash balances in a financial institution
which is insured by the Federal Deposit Insurance Corporation for up
to $100,000. At December 31, 1993, the Partnership had uninsured
balances totalling approximately $121,000.
INCOME TAXES - Leaservice Income Fund - I is classified as a
partnership for Federal income tax purposes. Net income and losses are
allocated between the General and Limited Partners in the same ratio
as for financial reporting purposes.
RECLASSIFICATION - Certain amounts in the 1992 financial statements
have been reclassified for comparability.
Note 2 - Operations:
The Partnership has not purchased any equipment subject to operating
leases since June 1986 and no equipment was held for rental under
operating leases at December 31, 1993.
During 1993, fully depreciated equipment previously held for rental
under operating leases with a cost of $104,197 was written off as none
of the equipment was reclaimed from the lessees. Customer deposits
totalling $81,212 which were to be applied to the final month's rent
upon termination of the lease have been recognized as income during
the year ended December 31, 1993.
Note 3 - Partners' Equity (Deficiency):
From August 8, 1983 to October 9, 1984, the expiration date of the
offering, Limited Partners representing 76,328 units were admitted to
the Partnership. As a result thereof, the Partnership realized net
proceeds of $7,022,176 from the sale of such units.
Pursuant to the limited partnership agreement, Leaservice receives
from the Partnership as General Partner, a quarterly management fee
equal to 3% of the Partnership's gross revenues derived from full
payout leases, 6% of the Partnership's gross revenues derived from
operating leases and 3% of the Partnership's gross revenues derived
from the sale of equipment.
For the years ended December 31,1993, 1992 and 1991, terms of such
agreement amounted to $-0-, $-0- and $1,283, respectively. Net income
is allocated 15% to the General Partner and 85% to the Limited
Partners. In addition, the General Partner is entitled to receive an
annual cash distribution an amount equal to 15% of the Partnership's
net income subject to certain limitations. Net losses are allocated 1%
to the General Partner and 99% to the Limited Partners.
F-8
<PAGE>
LEASERVICE INCOME FUND - I
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
Organization and offering expenses up to a maximum of 3% of the gross
proceeds of the offering have been reimbursed to the General Partner
by the Partnership from the proceeds of the public offering.
Net income (loss) per weighted average limited partnership unit has
been computed based on the weighted average number of limited
partnership units outstanding as of the first day of each month during
the years ended December 31, 1993, 1992 and 1991.
F-9
<PAGE>
LEASERVICE INCOME FUND - I
(A CALIFORNIA LIMITED PARTNERSHIP)
PROPERTY, PLANT AND EQUIPMENT
COMPUTER EQUIPMENT HELD FOR RENTAL:
December 31, 1991:
Balance, Additions Balance,
Beginning of Period at Cost Disposals End of Period
------------------- ----------- ----------- -------------
$ 1,275,132 $ -- $(1,170,935) $ 104,197
----------- ----------- ----------- -----------
December 31, 1992:
Balance, Additions Balance,
Beginning of Period at Cost Disposals End of Period
------------------- ----------- ----------- -------------
$ 104,197 $ -- $ -- $ 104,197
----------- ----------- ----------- -----------
December 31, 1993:
Balance, Additions Balance,
Beginning of Period at Cost Disposals End of Period
------------------- ----------- ----------- -------------
$ 104,197 $ -- $ 104,197 $ --
----------- ----------- ----------- -----------
See the accompanying notes to financial statements.
F-10
<PAGE>
LEASERVICE INCOME FUND - I
(A CALIFORNIA LIMITED PARTNERSHIP)
ACCUMULATED DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT
COMPUTER EQUIPMENT HELD FOR RENTAL:
December 31, 1991:
Additions
Charged
Balance, to Costs Balance,
Beginning of Period and Expenses Retirements End of Period
------------------- ------------ ----------- -------------
$ 1,275,132 $ -- $(1,170,935) $ 104,197
----------- ----------- ----------- -----------
December 31, 1992:
Additions
Charged
Balance, to Costs Balance,
Beginning of Period and Expenses Retirements End of Period
------------------- ------------ ----------- -------------
$ 104,197 $ -- $ -- $ 104,197
----------- ----------- ----------- -----------
December 31, 1993:
Additions
Charged
Balance, to Costs Balance,
Beginning of Period and Expenses Retirements End of Period
------------------- ------------ ----------- -------------
$ 104,197 $ -- $ 104,197 $ --
----------- ----------- ----------- -----------
F-11
