UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period ended June 30, 1998
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 2-95449
NATIONAL PROPERTIES INVESTMENT TRUST
Formerly Richard Roberts Real Estate Growth
Trust I (Exact name of registrant as specified in
its charter)
Massachusetts 06-6290322
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
P.O. Box 148 Canton Center, CT 06020
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (860) 693-9624
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 12,13 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
filing requirements for the past 90 days. Yes X No
<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
NATIONAL PROPERTIES INVESTMENT TRUST
INDEX
Accountants' Review Report
Comparative Balance Sheet as of June 30, 1998 and December 31, 1997
Comparative Statement of Operations for the Quarters Ended June 30, 1998
and 1997
Comparative Statement of Changes in Shareholders' Equity for the Quarters
Ended June 30, 1998 and 1997
Comparative Statement of Cash Flows for the Quarters Ended June 30, 1998
and 1997
Notes to the Financial Statements
<PAGE>
[Letterhead of Bernardi, Alfin & Koos, L.L.C.]
August 3, 1998
Trustees
National Properties Investment Trust
P.O. Box 148
Canton Center, Connecticut 06020
We have reviewed the accompanying balance sheet of National Properties
Investment Trust as of June 30, 1998 and the related statements of operations,
changes in shareholders' equity and cash flows for the quarters ended June 30,
1998 and 1997, included in the accompanying Securities and Exchange Commission
Form 10-Q for the period ended June 30, 1998 in accordance with Statements on
Standards for Accounting and Review Services issued by the American Institute of
Certified Public Accountants. All information included in these financial
statements is the representation of the management of National Properties
Investment Trust.
A review of interim financial information consists principally of inquiries
of company personnel and analytical procedures applied to financial data. It is
substantially less in scope than an audit conducted in accordance with generally
accepted auditing standards, the objective of which is the expression of an
opinion regarding the financial statements taken as a whole. Accordingly, we do
not express such an opinion.
Based on our reviews, we are not aware of any material modifications that
should be made to the accompanying financial statements for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the balance sheet as of December 31, 1997, and the related statements
of operations, shareholders' equity and cash flows for the year then ended (not
presented herein). In our report dated March 4, 1998, we expressed an
unqualified opinion on those financial statements. In our opinion, the
information set forth in the accompanying balance sheet as of December 31, 1997,
is fairly stated in all material respects in relation to the balance sheet from
which it has been derived.
<PAGE>
The accompanying financial statements have been prepared assuming that the
Trust will continue as a going concern. As discussed in Note 7 to the financial
statements, the Trust has sold its real property and its sole remaining
substantial asset is an interest in Philips International Realty Corp. The Trust
does not currently own any operating assets. These factors raise substantial
doubt about the Trust's ability to continue as a going concern. Management's
plans in regard to these matters are also discussed in Note 7. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
Respectfully submitted,
/s/ Bernardi, Alfin & Koos, L.L.C.
BERNARDI, ALFIN & KOOS, L.L.C.
Certified Public Accountants
<PAGE>
NATIONAL PROPERTIES INVESTMENT TRUST
CANTON CENTER, CONNECTICUT
COMPARATIVE BALANCE SHEET
See Accountants' Review Report
<TABLE>
<CAPTION>
(Reviewed) (Audited)
June 30, December 31,
1998 1997
ASSETS:
<S> <C> <C>
Investments in personal property $ 3,723 $ 4,287
Cash and cash equivalents 1,224 32,171
Receivables - 1,314
Investments 119,592 1,412,800
Other assets - 1,543
----------- -----------
$ 124,539 $ 1,452,115
=========== ===========
LIABILITIES:
Accounts payable, accrued expenses and
checkbook overdraft $ 4,125 $ 31,755
Prepaid rent 8,575 8,575
Due to shareholders 635 -
Note payable - 89,821
----------- -----------
Total Liabilities 13,335 130,151
----------- -----------
SHAREHOLDERS' EQUITY:
Shares of beneficial interest, no par value, unlimited
authorization, shares issued and outstanding were
745,317 in 1998 and 749,276 in 1997 11,790,408 11,791,190
Accumulated deficit (11,586,369)(10,469,226)
Accumulated other comprehensive income (92,835) -
----------- -----------
Total Shareholders' Equity 111,204 1,321,964
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 124,539 $ 1,452,115
- ------------------------------------------ =========== ===========
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
NATIONAL PROPERTIES INVESTMENT TRUST
CANTON CENTER, CONNECTICUT
COMPARATIVE STATEMENT OF OPERATIONS
See Accountants' Review Report
<TABLE>
<CAPTION>
For the Quarter Ended
June 30,
1998 1997
INCOME (LOSS) FROM OPERATIONS OF DISCONTINUED
LAKE MARY REAL ESTATE:
<S> <C> <C>
Gross rental income $ - $ 88,671
Rental expenses - (57,485)
General and administrative expenses (17,019) (22,391)
-------- --------
Net Income (Loss) from Discontinued
Property Operations (17,019) 8,795
-------- --------
OTHER INCOME (LOSS):
Interest income 1 288
Loss on sale of investments (76,599) -
-------- --------
Total Other Income (Loss) (76,598) 288
-------- --------
NET INCOME (LOSS) (93,617) 9,083
OTHER COMPREHENSIVE INCOME, NET OF TAX:
Unrealized losses on securities (92,835) -
-------- --------
COMPREHENSIVE INCOME (LOSS) $(186,452) $ 9,083
======== ========
INCOME (LOSS) PER SHARE OF BENEFICIAL INTEREST $ (0.13) $ 0.01
======== ========
COMPREHENSIVE INCOME (LOSS) PER SHARE OF
BENEFICIAL INTEREST $ (0.25) $ 0.01
======== ========
AVERAGE NUMBER OF SHARES OF BENEFICIAL
INTEREST 747,553 738,915
======== ========
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
NATIONAL PROPERTIES INVESTMENT TRUST
CANTON CENTER, CONNECTICUT
COMPARATIVE STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
See Accountants' Review Report
<TABLE>
<CAPTION>
For the Quarter Ended For the Quarter Ended
June 30, June 30,
1998 1997
Shares Amount Shares Amount
SHARES OF BENEFICIAL INTEREST
<S> <C> <C> <C> <C>
Balance - Beginning of the Period 747,553 $ 11,791,190 718,860 $ 11,735,447
Shares issued (redemed) (2,236) (782) 30,416 36,900
------- ------------ ------- ------------
Balance - End of the Period 745,317 $ 11,790,408 749,276 $ 11,772,347
======= ============ ======= ============
ACCUMULATED DEFICIT
Balance - Beginning of the Period $(11,492,752) $(11,328,666)
Net income (loss) (93,617) 9,083
------------ -------------
Balance - End of the Period $(11,586,369) $ (11,319,583)
============ =============
ACCUMULATED OTHER COMPREHENSIVE INCOME
Balance - Beginning of the Period $ - $ -
Unrealized loss on marketable securities (92,835) -
------------- -------------
Balance - End of the Period $ (92,835) $ -
============ =============
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
CANTON CENTER, CONNECTICUT
COMPARATIVE STATEMENT OF CASH FLOWS
Increase (Decrease) in Cash and Cash Equivalents
See Accountants' Review Report
<TABLE>
<CAPTION>
For the Quarter Ended
June 30,
1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income (loss) $(93,617) $ 9,083
-------- --------
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities
Loss on sale of marketable securities 76,599 -
Depreciation and amortization 282 14,060
Changes in Assets and Liabilities:
Receivables - (4,696)
Other assets - 2,469
Accounts payable and accrued expenses (2,411) 13,404
Security deposits held and prepaid rent - 1,488
-------- --------
Total Adjustments 74,470 26,725
-------- --------
Net Cash Provided By (Used In) Operating Activities (19,147) 35,808
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of personal property - (42,343)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on debt (104,821) (7,205)
Payments for redemption of shares (2,436) -
Proceeds from the issuance of shares 1,654 -
Proceeds from loan receivable 15,000 -
Proceeds from the sale of marketable securites 110,974 -
-------- --------
Net Cash Provided By (Used In)
Financing Activities 20,371 (7,205)
-------- --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,224 (13,740)
CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD - 24,356
-------- --------
CASH AND CASH EQUIVALENTS, END OF THE PERIOD $ 1,224 $ 10,616
======== ========
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
NATIONAL PROPERTIES INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - Organization and Summary of Accounting Policies:
A. Organization:
National Properties Investment Trust (formerly Richard Roberts
Real Estate Growth Trust I) (the "Trust") was organized on January
16, 1985 as a Massachusetts Business Trust. The Trust invests
directly in equity interests in commercial, industrial and/or
residential properties in the United States which have
income-producing capabilities and intends to hold its properties
for long-term investment.
On December 31, 1997, National Properties Investment Trust,
sold its sole real estate asset (the "Property") to a newly
formed real estate investment trust company, the Philips
International Realty Corp., a Maryland corporation ("New REIT"),
in exchange for 32,000 shares of the Common Stock of New REIT
pursuant to a Contribution and Exchange Agreement, dated August
11, 1997, as amended, among the Trust, the Board of Trustees of
the Trust, New REIT and certain affiliated partnerships or
limited liability companies associated with a private real estate
firm controlled by Philip Pilevsky and certain partners and
members thereof (the "Contribution and Exchange Agreement"). Soon
after the issuance of the New REIT stock, the stock split 1.706
to 1 and the shares were issued on May 8, 1998. The New REIT will
indirectly own ten shopping center properties in the New England,
Mid-Atlantic and Southeast regions of the United States. New REIT
is not affiliated with the Trust or the Trustees of the Trust and
the sale price for the Property was determined by arm's-length
negotiations between the parties. The Property is an
approximately 38,125 square foot shopping center located in Lake
Mary, Florida and, as of the date of sale, was 100% occupied. The
consummation of the transactions contemplated by the Contribution
and Exchange Agreement, including the sale of the Property, was
approved by a majority of the shareholders of the Trust at its
special meeting held on December 30, 1997. 499,097 of the 747,522
shares entitled to vote at such meeting approved the transaction
proposal, with 13,219 opposed and 10,624 abstaining.
3,744 shares of the New REIT Common Stock were distributed
to the Trust shareholders on December 31, 1997 and additional
20,256 of such shares were distributed to the Trust shareholders
on January 7, 1998 (representing in the aggregate not less than
75% of the Common Stock received by the Trust). The remaining
8,000 shares are to be retained by the Trust and any
distributions on the shares or net proceeds from the sale of the
shares will be available to the Trust for working capital
purposes. The New REIT stock split 1.706 to 1 and the Trust was
issued a total of 13,348 on May 8, 1998.
B. Method of Accounting:
The financial statements of the Trust have been prepared on
the accrual basis of accounting.
C. Cash Equivalents:
For financial statement purposes, the Trust considers all
highly liquid investments with original maturities of three months
or less to be cash equivalents.
<PAGE>
NOTE 1 - Organization and Summary of Accounting Policies: (Continued)
D. Income Taxes:
The Trust has made for prior years, and intends to make for
1998, an election to file as a real estate investment trust
(REIT) for federal tax purposes, and if so qualified, will not be
taxed on earnings distributed to shareholders. Accordingly, no
provision for federal income taxes has been made for the periods
ended June 30, 1998 and June 30, 1997. However, the Trust is
subject to state income taxes, where applicable.
E. Depreciation:
Depreciation was computed using the straight-line method over
an estimated depreciable life of 7 years for personal property.
F. Accumulated Deficit:
The accumulated deficit, reported as a reduction of
Shareholders' Equity, includes net losses recognized and
distributions made to Shareholders as a return of capital
invested.
G. Use of Estimates:
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect certain reported
amounts and disclosures. Accordingly, actual results could differ
from those estimates.
NOTE 2 - Related Party Transactions:
The Trust offices are located at premises owned by the
Managing Trustee. No rent was charged to the Trust in the quarter
ended June 30, 1998, however, the Trust paid utility bills for
the office of $169 in the quarter ended June 30, 1998.
NOTE 3 - Earnings Per Share:
Earnings per Share of Beneficial Interest are computed on the
weighted average number of Shares of Beneficial Interest
outstanding during the period.
NOTE 4 - Investments:
The Companies' marketable securities consist of equity
securities that have a readily determinable fair market value.
Management determines the appropriate classification of its
investments at the time of purchase and re-evaluates such
determinations at each balance sheet date. Since the Companies do
not intend to sell these securities in the near term, they are
classified as "available for sale" and accordingly, are carried
at fair value, with unrealized gains and losses, net of tax,
reported as a separate component within the stockholders' equity
section of the balance sheet. Realized gains and losses on all
marketable securities are determined by specific identification
and are charged or credited to current earnings.
NOTE 5 - Investment in Personal Property:
All of the Trust's property is recorded at historical cost.
The Trust's property and equipment are as follows:
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
---- ----
<S> <C> <C>
Furnishings and Equipment .................. $6,545 $6,545
Less: Accumulated Depreciation ............. ( 2,822) ( 2,258)
------ ------
Net Investment in Personal Property ...... $3,723 $4,287
====== ======
</TABLE>
NOTE 6- Receivables:
Receivables consist of the following:
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
---- ----
<S> <C> <C>
Tenant Receivables ............................... $ -- $1,314
Allowance for Doubtful Accounts .................. -- --
-------- ------
Tenant Receivables net of Allowance .............. $ -- $1,314
======== ======
</TABLE>
NOTE 7 - Note Payable:
As part of the sale of the Lake Mary property, the Trust
entered into a secured non-recourse note agreement for settlement
adjustments in favor of the purchaser. The note balance as of
June 30, 1998 and December 31, 1997 was $0 and $89,821. The note
was secured by 4,000 shares of Phillips International Realty
Corp. stock.
NOTE 8- Going Concern:
The Trusts sole remaining substantial asset is an interest
in Philips International Realty Corp. The Trust does not
currently own any operating assets. The Trust is contractually
bound to operate for one year until December 31, 1998. The
Trustees of the Trust plan to investigate new properties as
possible acquisitions for the Trust. Potential properties are
currently under investigation, although the talks are in the
preliminary stages. Should the Trust be unable to acquire a new
property(ies) by the end of 1998, the Trustees will evaluate
their options as to the best course of action for the Trust.
NOTE 9- Sale of Lake Mary Property:
The Trust exchanged its sole real estate holding for 32,000
shares of the Common Stock of New REIT, valued at $1,600,000 plus
the assumption of its first mortgage. The total selling price was
$2,161,940, resulting in a gain of $1,106,368. The Trust remains
contingently liable on the first mortgage.
The value of the Philips International Realty Corp. stock
and the value of the Lake Mary real property were determined
based upon the opinions of each of the parties financial
advisors. The relative valuations of the Partnership Properties,
and the Trust's Property, were considered independently by the
Philips Group and the Trust, and negotiated on an arm's-length
basis. The Trust and the Philips Group are not related parties
and retained separate legal counsel and financial advisors. The
terms of the Contribution and Exchange Agreement were the result
of lengthy negotiations. However, no third-party appraisals of
the Properties or any other assets were used to value such
property for purposes of the Transaction.
Accordingly, no assurance can be given that the valuation of
Philips International Realty Corp. implied by the market
capitalization of Philips International Realty Corp. does not
exceed the aggregate value of the Properties that might have been
obtained from an independent appraisal, or that the common stock
received by the Trust in the Transactions reflects the fair value
of the Trust's Property.
<PAGE>
NOTE 10- Contingencies:
Salvatore R. Carabetta, an Independent Trustee, resigned on
June 30, 1996. A successor Trustee was not appointed until June
16, 1997, which is greater than the 60 day period required by the
Declaration of Trust for the appointment of a successor Trustee.
The Declaration of the Trust requires a new Trustee to be
appointed within 60 days. On June 16, 1997 Robert Reibstein was
appointed as Trustee of the Trust.
On January 6, 1996 the Managing Trustee, Peter Stein, declared
a dividend without the express approval of Mr. Carabetta. Mr.
Stein believes that the request for a vote sent to Mr. Carabetta
twice by certified mail and not responded to, constitutes a
presence at a vote and abstention from the vote. Additionally
until June 25, 1996 when Jay Goldman was elected as Trustee of the
Trust, Peter Stein, the Managing Trustee, had been acting on
behalf of the Trust without the express approval of the majority
of the Trustees. Peter Stein and Salvatore Carabetta were the sole
remaining Trustees and since a majority of Trustees need to be
present to have a vote, both Trustees needed to be present to hold
a vote. On June 16, 1997, a Trustee meeting was held and the
Trustees acknowledged that the Trust was operating without the
full complement of Trustees and approved and ratified all actions
carried out by the officers of the Trust.
On June 16, 1997, the Trustees adopted an Amended and Restated
Declaration of Trust, which provides that the Trust may choose to
elect officers, including a President who shall act as Managing
Trustee, and which further defines the powers and limitations of
the officers of the Trust. As of September 30, 1997, no officers
of the Trust have been appointed to oversee the management of the
Trust.
In July 1993, the then trustees of Trust amended the
Declaration of Trust, without seeking or obtaining shareholder
approval, to, among other things, create an open-end trust such
that National would have an infinite life. Since the date of such
amendment, National and its trustees have been acting at all times
in a manner consistent with such infinite life status. Although
the current Trustees believe that such trustees acted within their
discretionary authority under the original Declaration of Trusts
in effecting such amendment without seeking shareholder approval
and that such amendment was properly adopted, there can be no
assurance that one or more shareholders of the Trust will not
challenge the validity of such amendment premised upon the need
for such shareholder approval under the terms of the original
Declaration of Trust or seek damages for breach of the contractual
provisions of the original Declaration of Trust. If such a
challenge was successfully brought, Trust may be required to
obtain shareholder approval of such amendment in order to maintain
its infinite life status (as opposed to liquidating one year after
the completion of the Formation Transactions), and there can be no
assurances that such shareholder approval, if required, would be
obtained.
<PAGE>
NOTE 10- Contingencies: (Continued)
On May 29, 1998 the shareholders of the Trust amended the
Trusts Declaration of Trust, to the following: (i) to confirm
self-management of the Trust by the Trustees, and the Managing
Trustee and such officers as the Trustees may appoint acting
under their direction, (ii) to substitute for provisions
contemplating a finite life of the Trust and self-liquidation
upon sale of the Trusts last real estate asset, a provision for
perpetual life of the Trust until terminated by action of a
majority in interest of the Shareholders, and (iii) to broaden
the Trusts investment guidelines and remove certain investment
restrictions in order to give the Trustees greater flexibility in
managing the Trusts remaining assets for maximum realization of
value in the Trust, subject always to the purpose of the Trust to
operate so as to qualify as a real estate investment trust within
the meaning of the Internal Revenue Code.
A lawsuit has been brought by a successor of the former
Advisor (Former Advisor) in the State of Connecticut against
the Trust, Peter Stein (the Managing Trustee of the Trust)
individually, and First Investment Properties, Inc. (a former
Advisor of the Trust) for $105,000 plus interest, costs and
attorneys fees. The suit contends that the Trust assumed and
ratified the contract between First Investment Properties, Inc.,
which succeeded the Former Advisor as Advisor. The Trust contends
it was never party to the contract and intends to vigorously
defend these actions which it considers groundless. The ultimate
resolution of these matters is not ascertainable at this time. No
provision has been made in the financial statements related to
these claims. A similar lawsuit that had been filed in Florida
has been dropped and the 2,100 shares of Phillips International
Realty Corp. stock owned by Peter Stein, the Managing Trustee,
which had been held in escrow has been released.
Management is unable to determine the effects the above events
will have on the financial condition of the Trust, if any.
NOTE 11- Supplemental Disclosure of Cash Flow Information:
<TABLE>
<CAPTION>
June 30, June 30,
1998 1997
Cash paid during the year -
<S> <C> <C>
Income taxes .......... $ -- $ --
Interest .............. $ -- $ 14,397
</TABLE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
NATIONAL PROPERTIES INVESTMENT TRUST (the "Trust") was organized on January
16, 1985, as a Massachusetts Business Trust. On July 23, 1993, the Trust changed
its name from Richard Roberts Real Estate Growth Trust I to its current name.
The Trust has made for 1997 and prior years, and intends to make for 1998, an
election to file as a real estate investment trust "REIT" under the provisions
of the Internal Revenue Code and intends to maintain this status as long as it
will benefit the Trust's shareholders. The Trust considers its business to be
operating in one industry segment, investment in real property.
On December 31, 1997, the Trust sold its sole real estate asset (the "Property")
to a newly formed real estate investment trust company, Philips International
Realty Corp., a Maryland corporation ("New REIT"), in exchange for 32,000 shares
of the common stock of the New REIT pursuant to a Contribution and Exchange
Agreement, dated August 11, 1997, as amended, among the Trust, the Board of
Trustees of the Trust, New REIT and certain affiliated partnerships or limited
liability companies associated with a private real estate firm controlled by
Philip Pilevsky and certain partners and members thereof (the "Contribution and
Exchange Agreement"). Soon after the issuance of the New REIT stock, the stock
split 1.706 to 1 and the shares were issued on May 8, 1998. The New REIT will
indirectly own ten shopping center properties in the New England, Mid-Atlantic
and Southeast regions of the United States. New REIT is not affiliated with the
Trust or the Trustees of the Trust and the sale price for the Property was
determined by arm's-length negotiations between the parties. The Property is an
approximately 38,125 square foot shopping center located in Lake Mary, Florida
and, as of the date of sale, was 100% occupied. The consummation of the
transactions contemplated by the Contribution and Exchange Agreement, including
the sale of the Property, was approved by a majority of the shareholders of the
Trust at its special meeting held on December 30, 1997. 499,097 of the 747,522
shares entitled to vote at such meeting approved the transaction proposal, with
13,219 opposed and 10,624 abstaining.
The Trust exchanged its sole real estate holding for 32,000 shares of the Common
Stock of New REIT plus the assumption of its first mortgage. The total selling
price was $2,161,940, resulting in a gain of $1,106,368. 3,744 shares of the New
REIT Common Stock were distributed to the Trust shareholders on December 31,
1997 and approximately 20,256 of such shares were distributed to the Trust
shareholders on January 7, 1998 (representing in the aggregate not less than 75%
of the Common Stock received by the Trust). The remaining 8,000 shares are to be
retained by the Trust and any distributions on the shares or net proceeds from
the sale of the shares will be available to the Trust for working capital
purposes. The New REIT stock split 1.706 to 1 and the Trust was issued a total
of 13,348 on May 8, 1998. The Trust is contingently liable on the first
mortgage.
The Trust's sole remaining substantial asset is an interest in Philips
International Realty Corp. The Trust does not currently own any operating
assets. The Trust is contractually bound to operate for one year until December
31, 1998. The Trustees of the Trust plan to investigate new properties as
possible acquisitions for the Trust. Potential properties are currently under
investigation, although the talks are in the preliminary stages. Should the
Trust be unable to acquire a new property(ies) by the end of 1998, the Trustees
will evaluate their options as to the best course of action for the Trust.
Liquidity and Capital Resources
The Trust's primary cash requirements are for operating expenses relating
to continuing the existence of the Trust.
At June 30, 1998 the Trust had $1,224 in cash. Current liabilities and future
expenses are expected to be funded from the proceeds from the sale of Philips
International Realty Corp. stock. On May 26, 1998, the Trust sold 6,400 shares
of the New REIT stock for $111,200. The proceeds were used to pay off the note
payable to the New REIT.
The Trust is currently searching for potential new properties for
acquisition. When a new property is identified, the Trust plans to raise new
capital or exchange shares of beneficial interest to finance the purchase of the
property. In exchange for capital raised, the Trust intends to issue stock to
the new investors. This stock will be in addition to the stock now outstanding
for the Trust. Currently no new properties have been contracted for purchase and
no new capital has been raised.
The principal asset of the Trust consists of an investment in the common
stock of Philips International Realty Corp.
Inflation
Not applicable
Competition
Not applicable
Results of Operations
Not applicable. The Trust has no current operations and has incurred $17,019 of
expenses and realized losses on investments of $76,599 for expenses necessary
for the continued existence of the Trust.
<PAGE>
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
A lawsuit has been brought by a successor of the former
Advisor ("Former Advisor") in the State of Connecticut against
the Trust, Peter Stein (the Managing Trustee of the Trust)
individually, and First Investment Properties, Inc. (a former
Advisor of the Trust) for $105,000 plus interest, costs and
attorney's fees. The suit contends that the Trust assumed and
ratified the contract between First Investment Properties, Inc.,
which succeeded the Former Advisor as Advisor. The Trust contends
it was never party to the contract and intends to vigorously
defend these actions which it considers groundless. The ultimate
resolution of these matters is not ascertainable at this time. No
provision has been made in the financial statements related to
these claims. A similar lawsuit that had been filed in Florida
has been dropped and the 2,100 shares of Phillips International
Realty Corp. stock owned by Peter Stein, the Managing Trustee,
which had been held in escrow has been released.
ITEM 2. CHANGES IN SECURITIES.
NONE
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
NOT APPLICABLE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF HOLDERS OF BENEFICIAL INTEREST
The annual meeting of shareholders was held May 29,
1998 and the shareholders of the Trust reelected the Trustees
of the Trust and voted to amend the Declaration of Trust and
ratify the following: In accordance with the Declaration of
Trust, the Trustees have approved amending the Trusts
Declaration of Trust, to the following effect, and recommend
that the Shareholders approve and ratify the same: (i) to
confirm self-management of the Trust by the Trustees, and the
Managing Trustee and such officers as the Trustees may appoint
acting under their direction, (ii) to substitute for
provisions contemplating a finite life of the Trust and
self-liquidation upon sale of the Trust's last real estate
asset, provision for perpetual life of the Trust until
terminated by action of a majority in interest of the
Shareholders, and (iii) to broaden the Trust's investment
guidelines and remove certain investment restrictions in order
to give the Trustees greater flexibility in managing the
Trust's remaining assets for maximum realization of value in
the Trust, subject always to the purpose of the Trust to
operate so as to qualify as a real estate investment trust
within the meaning of the Internal Revenue Code.
ITEM 5. OTHER INFORMATION.
NONE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
NONE
<PAGE>
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 thereunto duly authorized.
NATIONAL PROPERTIES INVESTMENT TRUST
Date: By: \s\ Peter M. Stein
Peter M. Stein
Managing Trustee
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 date indicated:
Signature Title Date
/s/ Peter M. Stein Managing Trustee 8/13/98
Peter M. Stein
/s/ Jay Goldman Trustee 8/13/98
Jay W. Goldman
/s/ Robert Reibstein Trustee 8/13/98
Robert Reibstein
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<NAME> NATIONAL PROPERTIES INVESTMENT TRUST
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