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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
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(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995.
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
ACT OF 1934
For the transition period from to .
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Commission file number 0-15571
CAROLINA INVESTMENT PARTNERS, LIMITED PARTNERSHIP
(Exact name or registrant as specified in its charter)
North Carolina 56-1494619
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
Suite 210, 4112 Blue Ridge Road
Raleigh, North Carolina 27612
(Address of principal executive office)
(Zip Code)
(919) 781-1700
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last
report)
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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The Exhibit Index is located on Page 10.
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PART I - FINANCIAL INFORMATION
Item 1. Financial Information
a) Income Statement
STATEMENTS OF INCOME (Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Interest income $ 273 $ 131 $ 809 $ 638
Other income 25 -0- 35,789 1,973
--------- -------- --------- ----------
Total 298 131 36,598 2,611
General and
administrative
expenses (11,600) (7,831) (35,349) (27,892)
--------- -------- --------- ----------
NET INCOME
(LOSS) $ (11,302) $ (7,700) $ 1,249 $ (25,281)
========= ======== ========= ==========
Allocation of net
income (loss) to:
General Partner $ (114) $ -0- $ 12 $ -0-
Limited Partners (11,188) (7,700) 1,237 (25,281)
--------- -------- --------- ----------
$ (11,302) $ (7,700) $ 1,249 $ (25,281)
========= ======== ========= ==========
Net income (loss)
per limited partner-
ship unit (based on
5,900 weighted
average limited
partnership units
outstanding) $ (1.90) $ (1.31) $ .21 $ (4.28)
========= ======== ========= ==========
</TABLE>
See notes to unaudited financial statements.
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b) Balance Sheets
BALANCE SHEETS
<TABLE>
<CAPTION>
September 30 December 31
1995 1994
(Unaudited)
<S> <C> <C>
ASSETS
Cash $ 235 $ 812
Short-term investment 34,562 3,253
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CASH AND CASH EQUIVALENTS 34,797 4,065
Land held for investment--Note B 4,822,183 4,822,183
Other assets 853 103
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TOTAL ASSETS $4,857,833 $4,826,351
========== ==========
LIABILITIES AND PARTNERS' EQUITY
Trade accounts payable and other
accrued liabilities $ 19,383 $ 5,486
Note payable to General Partner
-- Note C $ 16,336 $ -0-
---------- ----------
TOTAL LIABILITIES 35,719 5,486
PARTNERS' EQUITY
General partner's equity 12 -0-
Limited partners' equity; 5900
units authorized, issued,
and outstanding 4,822,102 4,820,865
---------- ----------
TOTAL LIABILITIES
AND PARTNERS' EQUITY $4,857,833 $4,826,351
========== ==========
</TABLE>
See notes to unaudited financial statements.
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c) Statements of Changes in Partners' Capital
STATEMENTS OF CHANGES IN PARTNERS' EQUITY (Unaudited)
<TABLE>
<CAPTION>
Limited General Limited
Partnership Partner's Partners'
Units Equity Equity Total
---------- --------- -------- -------
<S> <C> <C> <C> <C>
Balance at
January 1, 1995 5,900 $ -0- $4,820,865 $4,820,865
Net income for the
nine months ended
September 30, 1995 12 1,237 1,249
----- --------- ---------- ----------
BALANCE AT
SEPTEMBER 30, 1995 5,900 $ 12 $4,822,102 $4,822,114
===== ========= ========== ==========
Balance at
January 1, 1994 5,900 $ -0- $4,853,618 $4,853,618
Net loss for the
nine months ended
September 30, 1994 -0- (25,281) (25,281)
----- --------- ---------- ----------
BALANCE AT
SEPTEMBER 30, 1994 5,900 $ -0- $4,828,337 $4,828,337
===== ========= ========== ==========
</TABLE>
See notes to unaudited financial statements.
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d) Statements of Changes in Financial Position
STATEMENTS OF CASH FLOW (Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30
-------------------------------
1995 1994
---- ----
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $ 1,249 $ (25,281)
Increase in other assets (750) (750)
Increase (decrease) in trade accounts
payable 13,897 (9,515)
-------- ---------
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES 14,396 (35,546)
FINANCING ACTIVITIES
Loan from General Partner 55,000 -0-
Repayment of loan from General
Partner (38,664) -0-
-------- ---------
NET CASH PROVIDED (USED) BY
FINANCING ACTIVITIES 16,336 -0-
-------- ---------
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 30,732 (35,546)
Cash and cash equivalents at
beginning of period 4,065 56,607
-------- ---------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 34,797 $ 21,061
======== =========
</TABLE>
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest during the nine months ended
September 30 was $1,106 in 1995 and -0- in 1994.
See notes to unaudited financial statements.
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e) Notes to Financial Statements
NOTES TO UNAUDITED FINANCIAL STATEMENTS
September 30, 1995
NOTE A - SIGNIFICANT ACCOUNTING POLICIES AND PARTNERSHIP MATTERS
Carolina Investment Partners, Limited Partnership (the "Registrant"), was
organized in 1985 to invest in real property which it will sell or lease
undeveloped or develop into office or commercial projects. Walsmith Associates
Two, a North Carolina general partnership, is the general partner (the "General
Partner").
Basis of Presentation:
The accompanying September 30, 1995 financial statements of the Registrant are
unaudited. In the opinion of the General Partner, all adjustments (consisting
of normal accruals) considered necessary for a fair presentation have been
included. Operating results for the period presented are not necessarily
indicative of the results that may be expected for the entire year.
NOTE B - LAND HELD FOR INVESTMENT AND RELATED COMMITMENTS
In July, 1986, the Registrant purchased for $1,223,175 an undeveloped 16.3 acre
parcel of land in Cary, North Carolina, known as the Wellington Parcel, from
Wellington Park Associates ("WPA"), an affiliate of the General Partner. The
land is carried at the lower of (i) contract cost plus capitalized purchase and
closing costs or (ii) net realizable value. The Registrant may, at its option,
require WPA to repurchase the Wellington Parcel for approximately $3,669,000
(the "Put Option"). The contract provides that WPA will share with the
Registrant in any profits resulting from the sale of the Wellington Parcel.
More than 87.5% of the profits will be retained by the Registrant if the
Wellington Parcel is sold to a third party other than by exercise of the Put
Option by the Registrant. If the Put Option is exercised, the Registrant will
retain only 50% of the profit from sale of the Wellington Parcel.
In June, 1986 the Registrant purchased for approximately $3,080,200 an
undeveloped 26.7 acre parcel of land in Cary, North Carolina, known as the
Martin Parcel, from an affiliate of the General Partner. The land is carried
at the lower of (i) contract cost plus capitalized purchase and closing costs
or (ii) net realizable value.
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NOTE C - NOTE PAYABLE TO GENERAL PARTNER
On February 2, 1995 the Registrant borrowed $55,000 from its General Partner.
The note is payable upon the sale of any of the Registrant's properties or
other sources of funds that become available, but in no case later than June 1,
1996. The note bears interest at the rate of prime plus 1%, which is payable
quarterly.
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Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Operations
Significant changes affecting a comparison of operations for the
quarter ended and the nine months ended September 30, 1995 to the same periods
of 1994 include the following:
1. In the first quarter of 1995 the Registrant had timber removed from
one of its properties resulting in income of $35,664. Income from the
sale of timber was $1,648 in the first quarter of 1994 when trees were
thinned on the Martin East parcel.
2. Expenses in 1995 include:
o interest expense on a new note (see below),
o the cost of appraisals for the Registrant's properties,
o costs of filing the Registrant's reports with the SEC
electronically (which is now required), and
o legal, printing, and mailing costs relating to the contract to
sell the Wellington Parcel (see below) and a related 8-K
filing with the SEC.
The Registrant has sufficient funds for its present needs through May
1996. On June 1, 1996 a note payment will be due for which the Registrant will
not have funds available unless there is additional financing obtained or
properties are sold and closed. The Registrant maintains its excess funds in a
money market account at Triangle East Bank. The General Partner believes this
account is an appropriate investment of the Registrant's funds. Until either
of the properties is sold, placed into development and/or refinanced, the
Registrant anticipates deficits from operations and administrative expenses.
On February 2, 1995 the Registrant borrowed $55,000 from the General
Partner to replenish its cash balance which had been depleted by operating
expenses. The note is payable upon the sale of the Registrant's properties or
other sources of funds but must be paid no later than June 1, 1996. The note
bears interest at prime plus one percent. Interest is payable quarterly.
In February and March 1995, the Registrant had timber removed from its
properties generating income of $35,664, which was repaid against the loan from
the General Partner.
The Registrant, Churchill & Banks, Ltd. ("Churchill & Banks"), and ADA
Corporation of North Carolina ("ADA") have executed an agreement for Churchill
& Banks to purchase certain tracts of real property owned by the Registrant
(the Wellington Parcel) and ADA. The agreement was amended on August 9, 1995.
The purchase price for the land to be received by the Registrant is $5.25 per
net
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square foot. The Registrant believes the Wellington Parcel is approximately
16.3 acres, which would yield a sales price of $3,727,647. Square footage is
to be verified by survey. Closing for the sale of the property is to occur on
February 9, 1996, with possible extensions to April 9, 1996. The Purchase
Agreement and the Amendment contain a number of conditions to closing which
must be satisfied prior to closing. Consequently, there can be no assurance
this Agreement will result in a closing.
PART II
Item 6. Exhibits and Reports on Form 8-K
(a) Agreement for the Purchase and Sale of Real Estate dated April
20, 1995 between the Registrant, Churchill & Banks, Ltd., and
ADA Corporation of North Carolina.
First Amendment to the Agreement for the Purchase and Sale of
Real Estate dated August 9, 1995 between the Registrant,
Churchill & Banks, Ltd., and ADA Corporation of North
Carolina.
Exhibit 27 - Financial Data Schedule (for SEC use only)
(b) Report on 8-K dated August 9, 1995 reporting Item 2,
Acquisition or Disposition of Assets.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused the report to be signed on its behalf by the
undersigned thereunto duly authorized.
CAROLINA INVESTMENT PARTNERS
LIMITED PARTNERSHIP (Registrant)
BY: WALSMITH ASSOCIATES TWO,
General Partner
/s/ Donald F. Walston
----------------------------------
Donald F. Walston, General Partner
Date: November 9, 1995.
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
S-K Reference
and Exhibit Sequential
Number Description Page Number
- -------------- ----------- -----------
<S> <C> <C>
27 Financial Data Schedule (for SEC use only)
28.1 Offer to Purchase and Contract for The Quarterly
the Sale and Purchase of Real Report on Form
Estate dated as of January 24, 1986, 10-Q for the
between Wellington Park Associates Quarter ended
and the Registrant June 30, 1989.
Page 12.
28.2 Amendment to Offer to Purchase and Annual Report
Contract for Sale of Real Estate on Form 10-K
dated as of February 1, 1990 for the Year
between the Registrant and ended December
Wellington Park Associates 31, 1989.
Page 28.
28.3 Agreement for the Purchase and Sale Form 8-K dated
of Real Estate dated as of April 20, April 20, 1995.
1995 between the Registrant, Churchill Page 5.
& Banks, Ltd., and ADA Corporation of
North Carolina
28.4 First Amendment to the Agreement for Form 8-K dated
the Purchase and Sale of Real Estate August 9, 1995.
dated August 9, 1995 between the Page 4.
Registrant, Churchill & Banks, Ltd.,
and ADA Corporation of North Carolina
</TABLE>
10
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS FOR THE QUARTER ENDED SEPTEMBER 30, 1995 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-Q.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 34,797
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 853
<PP&E> 4,822,183
<DEPRECIATION> 0
<TOTAL-ASSETS> 4,857,853
<CURRENT-LIABILITIES> 35,719
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 4,822,114
<TOTAL-LIABILITY-AND-EQUITY> 4,857,833
<SALES> 0
<TOTAL-REVENUES> 36,598
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 35,349
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,249
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,249
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
