<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d) of
the Securities Exchange Act of 1934
For Quarter Ended March 31, 1997 Commission file number 0-16508
USA REAL ESTATE INVESTMENT TRUST
(Exact Name of Registrant as specified in its Charter)
California 68-0109347
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
One Scripps Drive, Suite 201, Sacramento, California 95825
(Address of registrant's principal executive offices) (Zip Code)
(916) 564-4532
(Registrant's telephone number, including area code)
COMMONWEALTH EQUITY TRUST USA
(Former name)
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.
/ X/ Yes / / No
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the close of the latest practical date.
Certificates of Beneficial Interest Outstanding at March 31, 1997
par value one dollar per share 4,031,150
<PAGE> 2
USA REAL ESTATE INVESTMENT TRUST
Index
Part I. Financial Information
Balance Sheets - March 31, 1997 and
December 31, 1996 ................................. 3
Statements of Income - For the Three Months
Ended March 31, 1997 and 1996 ..................... 4
Statements of Cash Flows - For the Three
Months Ended March 31, 1997 and 1996 .............. 5
Notes to Financial Statements ....................... 6
Management's Discussion and Analysis of the
Financial Condition and Results of Operations ..... 7
Part II. Other Information ................................... 8
<PAGE> 3
PART I. FINANCIAL INFORMATION
USA REAL ESTATE INVESTMENT TRUST
Balance Sheets
March 31, December 31,
1997 1996
(Unaudited) (Audited)
----------- -----------
Assets
Investments:
Rental properties, less accumulated
depreciation of $2,421,650 at March 31,
1997 and $2,271,650 at December 31, 1996
and valuation allowances of $5,060,000
at March 31, 1997 and December 31, 1996 $ 17,910,898 $ 17,939,415
Notes receivable 726,000 726,000
---------- -----------
18,636,898 18,665,415
Cash and cash equivalents 3,654,259 3,909,665
Other assets 316,265 268,013
----------- -----------
Total assets $ 22,607,422 $ 22,843,093
=========== ===========
Liabilities and Shareholders' Equity
Liabilities:
Long-term notes payable $ 2,033,885 $ 2,047,333
Accounts payable 33,689 40,638
Lease deposits 59,845 59,845
----------- -----------
Total liabilities 2,127,419 2,147,816
----------- -----------
Shareholders' Equity:
Shares of beneficial interest, par value
$1 a share; authorized 7,500,000 shares;
4,031,150 shares outstanding at March 31,
1997 and 4,042,904 shares outstanding at
December 31, 1996 $ 4,031,150 $ 4,042,904
Additional paid-in capital 30,172,754 30,202,139
Distributions in excess of cumulative
net income (13,723,901) (13,549,766)
----------- -----------
Total shareholders' equity 20,480,003 20,695,277
----------- -----------
Total liabilities and shareholders' equity $ 22,607,422 $ 22,843,093
=========== ===========
See notes to financial statements.
<PAGE> 4
USA REAL ESTATE INVESTMENT TRUST
Statements of Income
(Unaudited)
Three Months Ended
March 31,
1997 1996
---------- ----------
Revenues:
Rent $ 593,534 $ 646,859
Interest 61,788 34,444
---------- ----------
655,322 681,303
---------- ----------
Expenses:
Operating expenses 77,470 71,178
Property taxes 52,803 65,712
Property management fees 12,000 12,000
Interest 40,295 41,003
Depreciation and amortization 150,000 156,000
General and administative 92,897 130,973
---------- ----------
425,465 476,866
---------- ----------
Net income $ 229,857 $ 204,437
========== ==========
Net income per share of beneficial interest $ 0.06 $ 0.05
========== ==========
See notes to financial statements.
<PAGE> 5
USA REAL ESTATE INVESTMENT TRUST
Statements of Cash Flows
(Unaudited)
Three Months Ended
March 31,
1997 1996
---------- ----------
OPERATING ACTIVITIES:
Net income $ 229,857 204,437
---------- ----------
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 150,000 156,000
Changes in other assets and liabilities:
Increase in other assets (48,252) (122,928)
(Decrease) Increase in accounts payable (6,949) 275
---------- ----------
Total adjustments to income 94,799 33,347
---------- ----------
Net cash provided by
operating activities 324,656 237,784
INVESTING ACTIVITIES:
Improvements to properties (121,483) (110,261)
Collections on notes receivable 0 39,143
---------- ----------
Net cash used by investing activities (121,483) (71,118)
FINANCING ACTIVITIES:
Redemption of shares (41,139) (14,992)
Payments on long-term notes payable (13,448) (12,538)
Distributions paid (403,992) (370,778)
---------- ----------
Net cash used by financing activities (458,579) (398,308)
---------- ----------
Net decrease in cash (255,406) (231,642)
Cash and cash equivalents at beginning
of period 3,909,665 1,487,661
---------- ----------
Cash and cash equivalents at end of period $ 3,654,259 $ 1,256,019
========== ==========
See notes to financial statements.
<PAGE> 6
USA REAL ESTATE INVESTMENT TRUST
Notes to Financial Statements
1. In the opinion of the Trust, the accompanying unaudited financial
statements contain all adjustments necessary to present fairly
the Trust's financial position as of March 31, 1997, and the
results of its operations and cash flows for the three months
ended March 31, 1997 and 1996.
The accounting policies followed by the Trust are set forth in
Note 1 to the Trust's financial statements in the 1996 Form 10-K,
which are incorporated herein by reference.
2. In 1987, the Trust elected to be taxed as a real estate investment
trust and, as such, will not be taxed on that portion of its
taxable income which is distributed to shareholders provided that
at least 95% of its real estate investment trust taxable income
is distributed.
The Trust intends to continue to qualify as a real estate
investment trust and, accordingly, no provision for income taxes
has been made in the financial statements.
<PAGE> 7
USA REAL ESTATE INVESTMENT TRUST
Management's Discussion and Analysis of
Financial Condition and Results of Operations
RESULTS OF OPERATIONS
Rent decreased $53,325 for the three months ended March 31, 1997
compared to the same period in 1996 primarily due to the sale of
Keystone Square in Reno, Nevada in August, 1996.
General and administrative expense decreased $38,076 for the
three months ended March 31, 1997, compared to the same period
in 1996, as a result of decreases in almost all expense catagories.
LIQUIDITY AND CAPITAL RESOURCES
The Trust expects that operating income, cash in the bank,
collections on notes receivable, proceeds from the sale of
properties, and borrowings collateralized by properties will
adequately meet its liquidity and capital resource requirements
in the future.
<PAGE> 8
PART 11. OTHER INFORMATION
USA REAL ESTATE INVESTMENT TRUST
ITEM 6: REPORTS ON FORM 8-K
None.
<PAGE> 9
USA REAL ESTATE INVESTMENT TRUST
Signatures
Pursuant to the requirement 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.
USA Real Estate Investment Trust
----------------------------------------
May 6, 1997 Gregory Crissman
-------------------- ----------------------------------------
Date Gregory Crissman,
Chairman
May 6, 1997 Benjamin Diaz
-------------------- ----------------------------------------
Date Benjamin Diaz
Trustee
<PAGE> 10
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Statement of Financial Condition at March 31, 1997 (Unaudited) and the
Statement of Income for the Three Months Ended March 31, 1997 (Unaudited)
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 3,654,259
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,654,259
<PP&E> 25,392,548
<DEPRECIATION> 2,421,500
<TOTAL-ASSETS> 22,607,422
<CURRENT-LIABILITIES> 93,534
<BONDS> 0
<COMMON> 4,031,150
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 22,607,422
<SALES> 655,322
<TOTAL-REVENUES> 655,322
<CGS> 0
<TOTAL-COSTS> 425,465
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 40,295
<INCOME-PRETAX> 229,857
<INCOME-TAX> 0
<INCOME-CONTINUING> 229,857
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 229,857
<EPS-PRIMARY> 0.06
<EPS-DILUTED> 0.06
</TABLE>
