United States Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X Quarterly Report Pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934
For the Quarterly Period Ended June 30, 1996
or
Transition Report Pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934
For the Transition period from ______ to ______
Commission File Number: 33-17660
PRINCIPAL GROWTH MORTGAGE INVESTORS FUND, L.P., SERIES 1
Exact Name of Registrant as Specified in its Charter
Delaware 13-3466206
State or Other Jurisdiction of I.R.S. Employer Identification No.
Incorporation or Organization
3 World Financial Center, 29th Floor,
New York, NY Attn: Andre Anderson 10285
Address of Principal Executive Offices Zip Code
(212) 526-3237
Registrant's Telephone Number, Including Area Code
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 ____
At June 30, At December 31,
Balance Sheets 1996 1995
Assets
Cash and cash equivalents $ 143,370 $ 165,643
Total Assets $ 143,370 $ 165,643
Liabilities and Partners' Capital
Liabilities:
Accounts payable and accrued expenses $ 29,130 $ 32,468
Due to affiliates 58,791 51,236
Total Liabilities 87,921 83,704
Partners' Capital (Deficit):
General Partner (156,802) (156,537)
Limited Partners (Depositary units:
6,500,000 authorized; 1,657,500 issued) 212,251 238,476
Total Partners' Capital 55,449 81,939
Total Liabilities and Partners' Capital $ 143,370 $ 165,643
Statement of Partners' Capital (Deficit)
For the six months ended June 30, 1996
Limited General
Partners Partner Total
Balance at December 31, 1995 $ 238,476 $ (156,537) $ 81,939
Net loss (26,225) (265) (26,490)
Balance at June 30, 1996 $ 212,251 $ (156,802) $ 55,449
Statements of Operations
Three months ended Six months ended
June 30, June 30,
1996 1995 1996 1995
Income
Interest income $ 1,871 $ 2,026 $ 3,962 $ 5,077
Total Income 1,871 2,026 3,962 5,077
Expenses
General and administrative 10,184 13,260 22,952 25,842
Investment management fee 3,750 3,750 7,500 7,500
Total Expenses 13,934 17,010 30,452 33,342
Net Loss $(12,063) $(14,984) $(26,490) $(28,265)
Net Loss Allocated:
To the General Partner $ (121) $ (150) $ (265) $ (283)
To the Limited Partners (11,942) (14,834) (26,225) (27,982)
$(12,063) $(14,984) $(26,490) $(28,265)
Per limited partnership unit
(1,657,500 outstanding) $(.01) $(.01) $(.02) $(.02)
Statements of Cash Flows
For the six months ended June 30, 1996 1995
Cash Flows From Operating Activities:
Net loss $ (26,490) $ (28,265)
Increase (decrease) in cash arising from changes
in operating assets and liabilities:
Accounts payable and accrued expenses (3,338) 1,087
Due to affiliates 7,555 7,721
Net cash used for operating activities (22,273) (19,457)
Net decrease in cash and cash equivalents (22,273) (19,457)
Cash and cash equivalents, beginning of period 165,643 215,521
Cash and cash equivalents, end of period $ 143,370 $ 196,064
Notes to the Financial Statements
The unaudited interim financial statements should be read in
conjunction with the Partnership's annual 1995 audited financial
statements within Form 10-K.
The unaudited financial statements include all adjustments which
are, in the opinion of management, necessary to present a fair
statement of financial position as of June 30, 1996 and the
results of operations and cash flows for the six months ended
June 30, 1996 and 1995 and the statement of partner's capital
(deficit) for the six months ended June 30, 1996. Results of
operations for the period are not necessarily indicative of the
results to be expected for the full year.
No significant events have occurred subsequent to fiscal year
1995, and no material contingencies exist which would require
disclosure in this interim report per Regulation S-X, Rule 10-01,
Paragraph (a)(5).
Part I, Item 2 . Management's Discussion and Analysis of
Financial Condition and Results of Operations
Liquidity and Capital Resources
The Partnership's zero coupon second mortgage loan (the "Loan")
funded to Colonial Gold Limited Partnership, in the original
principal amount of $14,314,950, was secured by a second mortgage
on One Financial Plaza (the "Property"), a 26-story office
building and parking garage located in Hartford, Connecticut.
The Loan was subordinate to a non-recourse first mortgage held by
Principal Mutual Life Insurance Company (the "First Mortgagee")
in the original amount of $87,750,000. Several events occurred
which negatively impacted the operations of the Property and
resulted in defaults by the Borrower under the terms of its first
mortgage loan and the Partnership's second mortgage loan. On
December 2, 1993, the Property was transferred to the First
Mortgagee pursuant to a foreclosure. Reference is made to the
Partnership's 1995 Annual Report on Form 10-K for a comprehensive
discussion of the events leading up to the foreclosure.
In the absence of any viable alternatives, the General Partner
negotiated an agreement (the "Agreement") with the First
Mortgagee, the Borrower and the third mortgagee to obtain
compensation for permitting the First Mortgagee to achieve an
orderly foreclosure of the Property. The agreement called for
the First Mortgagee to pay the Partnership $350,000 following the
transfer of title to the First Mortgagee, which took place on
December 2, 1993. Pursuant to the terms of the Agreement, the
Partnership received $100,000 on March 7, 1994, and $250,000 on
December 7, 1994. The General Partner is currently winding up
the affairs of the Partnership and will utilize these funds, as
well as any funds remaining in its cash reserve, to satisfy the
Partnership's outstanding liabilities and will thereafter
liquidate the Partnership.
As of June 30, 1996, the Partnership's cash balance totaled
$143,370, compared with $165,643 at December 31, 1995.
The decrease is due to the payment of Partnership administrative
expenses.
Results of Operations
The Partnership reported net losses of $12,063 and $26,490 for
the three and six months ended June 30, 1996, respectively,
compared with net losses of $14,984 and $28,265 for the
corresponding periods in 1995. The slightly lower net losses
in the 1996 periods are primarily due to a decrease in general
and administrative expenses. General and administrative expenses
totaled $10,184 and $22,952 for the three and six months ended
June 30, 1996, respectively, compared with $13,260 and $25,842
for the corresponding periods in 1995. The decreases reflect
lower audit fees and a reduction in other administrative expenses.
Part II Other Information
Items 1-5 Not applicable.
Item 6 Exhibits and reports on Form 8-K.
(a) Exhibits -
(27) Financial Data Schedule
(b) Reports on Form 8-K - No reports on Form 8-K
were filed during the quarter ended June 30, 1996.
SIGNATURES
Pursuant to the requirements 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.
PRINCIPAL GROWTH MORTGAGE INVESTORS
FUND, L.P., SERIES 1
BY: PRINCIPAL GROWTH REALTY FUNDING,INC.
General Partner
Date: August 14, 1996 BY: /s/ Ken L. Zakin
Director and President
Date: August 14, 1996 BY: /s/ Daniel M. Palmier
Vice President and
Chief Financial Officer
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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