- --------------------------------------------------------------------------------
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
(X) Quarterly Report Under Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Quarterly period ended March 31, 2000
( ) Transition Report Under Section 13 or 15(d) of the Exchange Act
For the Transition period from ____________ to _______________
Commission File Number: 0-17600
_______________________
Common Goal Health Care Participating Mortgage Fund L.P.
(Exact name of small business issuer as specified in its charter)
Delaware 52-1475268
- ---------------------------------- ------------------
(State or other Jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
215 Main Street
Penn Yan, New York, 14527
-------------------------------
(Address of principal executive offices)
(315) 536-5985
---------------------
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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
<PAGE>
PART 1 - Financial Information
Item 1. Financial Statements
COMMON GOAL HEALTH CARE PARTICIPATING MORTGAGE FUND L.P.
(A Delaware Limited Partnership)
<TABLE>
<CAPTION>
Balance Sheets
March 31, December 31,
2000 1999
----------- ----------
(Unaudited)
<S> <C> <C>
Assets
------
Cash and cash equivalents $ 998,831 $ 381,677
Accrued interest receivable 16,182 85,233
Mortgage loan receivable 1,353,255 1,795,309
---------- ----------
Total Assets $2,368,268 $2,262,219
========== ==========
Liabilities and Partners' Capital
---------------------------------
Liabilities
Accounts payable and accrued expenses $ -- $ --
Due to affiliates 183,398 110,509
Accrued Distribution 500,000 --
Deferred Revenue 227,645 227,645
---------- ----------
Total liabilities 911,043 338,154
Partners' capital:
General partners 71,205 70,542
Limited partners 1,386,020 1,853,523
---------- ----------
Total partners' capital 1,457,225 1,924,065
---------- ----------
Total Liabilities and Partners' Capital $2,368,268 $2,262,219
========== ==========
</TABLE>
See accompanying notes
2
<PAGE>
COMMON GOAL HEALTH CARE PARTICIPATING MORTGAGE FUND L.P.
(A Delaware Limited Partnership)
<TABLE>
<CAPTION>
Statements of Income
(Unaudited)
THREE MONTHS ENDED
March 31,
2000 1999
---------- ----------
<S> <C> <C>
Revenue
- -------
Interest Income $ 56,653 $ 49,621
---------- ----------
Total Revenue 56,653 49,621
Expenses
- --------
Professional fees 6,666 9,562
Fees to affiliates:
Management 5,401 5,401
Mortgage servicing 980 980
Other 10,446 1,460
---------- ----------
Total Expenses 23,493 17,403
---------- ----------
Net Income and
Comprehensive Income $ 33,160 $ 32,218
========== ==========
Net income allocated to
general partners - 2% $ 663 $ 644
Net income allocated to
limited partners - 98% 32,497 31,574
---------- ----------
$ 33,160 $ 32,218
========== ==========
Basic earnings per limited
partner unit $ .02 $ .02
========== ==========
Weighted average limited 1,911,411 1,911,411
partner units outstanding ========== ==========
</TABLE>
See accompanying notes.
3
<PAGE>
COMMON GOAL HEALTH CARE PARTICIPATING MORTGAGE FUND L.P.
(A Delaware Limited Partnership)
<TABLE>
<CAPTION>
Statements of Partners' Capital
(Unaudited)
THREE MONTHS ENDED
MARCH 31,
2000 1999
--------------------------------------- ----------------------------------------
TOTAL TOTAL
GENERAL LIMITED PARTNERS' GENERAL LIMITED PARTNERS'
PARTNERS PARTNERS CAPITAL PARTNERS PARTNERS CAPITAL
--------------------------------------- ----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at beginning of period $ 70,542 $ 1,853,523 $ 1,924,065 $ 67,204 $ 1,689,939 $ 1,757,143
Net income 663 32,497 33,160 644 31,574 32,218
Distributions to partners -- (500,000) (500,000) -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Balance at end of period $ 71,205 $ 1,386,020 $ 1,457,225 $ 67,848 $ 1,721,513 $ 1,789,361
=========== =========== =========== =========== =========== ===========
</TABLE>
See accompanying notes.
4
<PAGE>
COMMON GOAL HEALTH CARE PARTICIPATING MORTGAGE FUND L.P.
(A Delaware Limited Partnership)
<TABLE>
<CAPTION>
Statements of Cash Flows
(Unaudited)
THREE MONTHS ENDED
------------------
MARCH 31, MARCH 31,
2000 1999
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 33,160 $ 32,218
Adjustments to reconcile net income to net cash
provided by operating activities:
Decrease (increase) in interest receivable 69,051 (16,183)
Increase (decrease) in due to affiliates 72,889 167
Decrease (increase) in mortgage
loan receivable 442,054 442,054
--------- ---------
Net cash provided by operating activities 617,154 16,202
--------- ---------
Cash used in financing activities:
Distribution to limited partners -- --
--------- ---------
Net cash used in financing activities -- --
--------- ---------
Net increase in cash and cash equivalents: 617,154 16,202
Cash and cash equivalents, beginning of period 381,677 241,487
--------- ---------
Cash and cash equivalents, end of period $ 998,831 $ 257,689
========= =========
</TABLE>
See accompanying notes.
5
<PAGE>
COMMON GOAL HEALTH CARE
PARTICIPATING MORTGAGE FUND L.P.
(A Delaware Limited Partnership)
Notes to Financial Statements
(Unaudited)
March 31, 2000
(1) Organization and Summary of Significant Accounting, Policies
------------------------------------------------------------
Common Goal Health Care Participating Mortgage Fund L.P. (the
"Partnership") was formed on August 20, 1986 to invest in and make
mortgage loans to third-parties involved in health care. On February
20, 1987, the Partnership commenced a public offering of limited
partner units (the "Public Offering"). On July 21, 1987, the
Partnership commenced operations, having previously sold more than the
specified minimum of 116,000 units ($1,160,000). The Partnership's
offering terminated on February 20, 1989 with the Partnership having
sold the specified maximum of 1,912,911 units ($19,129,110). The
Partnership has one remaining mortgage loan in its portfolio. The loan
matures in January 2001 after which the General Partner will begin an
orderly liquidation and dissolution of the Partnership.
The general partners are Common Goal Capital Group, Inc. as the
managing general partner and Common Goal Limited Partnership I as the
minority general partner. Under the terms of the Partnership's
agreement of limited partnership, (the "Partnership Agreement") the
general partners are not required to make any additional capital
contributions except under certain limited circumstances upon
termination of the Partnership.
Under the terms of the Partnership Agreement, the Partnership is
required to pay a quarterly management fee to the managing general
partner equal to .75% per annum of adjusted contributions, as defined.
Additionally, a mortgage servicing fee equal to .25% per annum of the
Partnership's outstanding mortgage loan principal amount is to be paid
to Common Goal Mortgage Company, an affiliate of the general partners.
Additionally, under the terms of the Partnership Agreement, the
Partnership is required to reimburse the managing general partner for
certain operating expenses.
The Partnership classifies all short-term investments with maturities
at dates of purchase of three months or less as cash equivalents.
Management considers the necessity of reserving an allowance for loan
losses based upon an evaluation of known and inherent risks in the loan
portfolio. Management believed no allowance was necessary as of March
31, 2000.
6
<PAGE>
No provision for income taxes has been recorded as the liability for
such taxes is that of the partners rather than the Partnership.
Earnings per limited partner unit are computed based on the weighted
average limited partner units outstanding for the period.
The accompanying unaudited financial statements as of and for the three
months ended March 31, 2000 are the representation of management and
reflect all adjustments which are, in the opinion of management,
necessary to a fair presentation of the financial position and results
of operations of the Partnership. Such adjustments are normal and
recurring. The results are not necessarily indicative of the results
for the entire year.
These financial statements should be read in conjunction with the
Company's financial statements and notes included in the Annual Report
on Form 10-KSB filed by the Company with the Securities and Exchange
Commission on April 14, 2000.
(2) Mortgage Loan Receivable
------------------------
Information concerning mortgage loan receivable as of March 31, 2000 is
as follows:
Face and
Basic Carrying
Interest Maturity Amount of
Description Rate Date Mortgage
---- ---- --------
Honeybrook loan 10.5%(1) January 1, 2001 1,353,255
----------
$1,353,255
==========
(1) The interest rate was modified from 13.7% to 10.5% effective April
1, 2000. The loan is a second mortgage loan secured by healthcare
related real properties. Interest is payable monthly with the principal
balance generally due at maturity. The carrying value of the mortgage
loan for tax purposes is the same as that for financial reporting
purposes. As of March 31, 2000, the loan was current as to required
regular interest payments. In May 2000, a further principal reduction
payment of $200,000 was received.
Item 2. Management's Discussion and Analysis or Plan of 0perations
----------------------------------------------------------
General
Some statements in this Form 10-QSB are forward looking and actual
results may differ materially from those stated. As discussed herein,
among the factors that may affect
7
<PAGE>
actual results are changes in the financial condition of the borrower
and/or anticipated changes in expenses or capital expenditures.
Common Goal Health Care Participating Mortgage Fund L.P., a Delaware
limited partnership (the "Partnership"), was formed to make mortgage
loans secured by real property (the "Mortgage Loan") comprised of a mix
of first and junior Mortgage Loans, secured by health-care related
properties. The Public Offering commenced on February 20, 1987 and
continued through February 20, 1989, when the Public Offering
terminated. Total gross offering proceeds raised were $19,129,110.
Liquidity and Capital Resources
-------------------------------
Partnership assets increased from $2,262,219 at December 31, 1999 to
$2,368,268 at March 31, 2000. The increase of $106,049 resulted
primarily from net income for the period. As of March 31, 2000, the
Partnership's loan portfolio consisted of one mortgage loan, the
aggregate outstanding principal balance of which was $1,353,255.
The Partnership has structured its Mortgage Loans to provide for
payment of quarterly distributions from investment income. The interest
derived from the Mortgage Loans, repayments of Mortgage Loans and
interest earned on short-term investments contribute to the
Partnership's liquidity. These funds are used to make cash
distributions to Limited Partners, to pay normal operating expenses as
they arise.
The Partnership's balance of cash and cash equivalents at March 31,
2000 and December 31, 1999 was $998,831 and $381,677, respectively,
which consisted of operating cash and working capital reserves. The
increase in cash and cash equivalents of $617,154 from December 31,
1999 resulted from net income of $33,160, a decrease in interest
receivable of $69,051, an increase in due to affiliates of $72,889 and
a decrease in the mortgage loan receivable of $442,054. The Partnership
is required to maintain reserves not less than 1% of gross offering
proceeds (not less than $191,201), but currently maintains a reserve
significantly in excess of that amount. The amount of cash and cash
equivalents currently maintained by the Partnership is primarily the
result of proceeds from the payment of mortgage loans.
The Managing General Partner continues to monitor the level of working
capital reserves and may adjust the reserves as necessary to meet the
Partnership's reserve requirements. However, the General Partners
intend to commence an orderly liquidation and dissolution of the
Partnership after the Partnership's remaining mortgage loan matures in
January 2001.
The Partnership's success and the resultant rate of return to holders
of units of limited partnership interests is dependent upon, among
other things, the performance of the Partnership's last Mortgage Loan.
8
<PAGE>
Results of Operations
---------------------
As of March 31, 2000, the Partnership had one Mortgage Loan. The
Partnership invests all available funds (funds not invested in Mortgage
Loans) in short term, temporary investments pending application to
Partnership uses or distributions to limited partners. The interest
earned on these investments has been and is expected to continue to be
less than the interest rates achievable on Mortgage Loans made by the
Partnership. During the three months ended March 31, 2000, and 1999,
the Partnership had net earnings of $33,160 and $32,218 based on total
revenues of $56,653 and $49,621 and total expenses of $23,493 and
$17,403, respectively. For the three months ended March 31, 2000 and
1999, the net earnings per limited partner unit was $.02 and $.02
respectively.
The increase in net earnings for the three months ended March 31, 2000,
compared to the three months ended March 31, 1999, is due to an
increase in interest income of $7,032 and a decrease of $2,896 in
professional fees, and an increase of $8,986 in other expenses. The one
remaining Mortgage Loan was current as to regular interest as of March
31, 2000.
9
<PAGE>
PART II - Other Information
Items 1 through 5 are omitted because of the absence of conditions under which
they are required.
Item 6 Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 27, Financial Data Schedule
(b) Reports on Form 8-K
None
10
<PAGE>
SIGNATURES
----------
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Common Goal Health Care Participating Mortgage Fund L,P.
-------------------------------------------------------
(Registrant)
By: Common Goal Capital Group, Inc.,
Managing General Partner
DATED: May 12, 2000 /s/Albert E. Jenkins, III
-------------------------
Albert E. Jenkins, III
President, Chief Executive Officer
and Acting Chief Financial Officer
11
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<EXCHANGE-RATE> 1
<CASH> 998,831
<SECURITIES> 0
<RECEIVABLES> 1,369,437
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,368,268
<CURRENT-LIABILITIES> 911,043
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,457,225
<TOTAL-LIABILITY-AND-EQUITY> 2,368,268
<SALES> 0
<TOTAL-REVENUES> 56,653
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 23,493
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 33,160
<EPS-BASIC> .02
<EPS-DILUTED> .00
</TABLE>