<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC. 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 quarter period ended September 30, 1995
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or
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 1-10150
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ANGELES PARTICIPATING MORTGAGE TRUST
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(Exact Name of Registrant as Specified in Its Charter)
California 95-6881527
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
340 North Westlake Boulevard, Suite 230, Westlake Village, California 91362
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (805) 449-1335
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No Change
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Former Name, Former Address and Former Fiscal Year If Changed Since Last Report
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on
Which Registered
Class A Shares American Stock Exchange
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Securities Registered Pursuant to Section 12(g) of the Act:
NONE
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(Title of class)
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
Total Pages 10
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ANGELES PARTICIPATING MORTGAGE TRUST
INDEX
<TABLE>
<CAPTION>
Page No.
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<S> <C> <C>
Part I. Financial Information
Item I. Balance Sheets - September 30, 1995 and December 31, 1994 3
Statements of Operations - For the three and nine months ended
September 30, 1995 and 1994 4
Statements of Cash Flows - For the nine months ended
September 30, 1995 and 1994 5
Notes to the Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K 9
</TABLE>
2
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ANGELES PARTICIPATING MORTGAGE TRUST
BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1995 1994
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(UNAUDITED)
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 779,000 $ 872,000
Investments (at cost, market value approximates
$1,304,000 at 1995 and $1,355,000 at 1994) 1,303,000 1,371,000
Other receivables 8,000 16,000
Other assets 125,000 113,000
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Total assets $ 2,215,000 $ 2,372,000
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LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Accounts payable and accrued expenses $ 22,000 $ 82,000
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Total liabilities $ 22,000 $ 82,000
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Shareholders' equity:
Class A Shares (2,550,000 shares issued and
outstanding, $1.00 par value, unlimited
shares authorized) $ 2,550,000 $ 2,550,000
Class B Shares (1,275,000 shares issued and
outstanding, $.01 par value, unlimited
shares authorized) 13,000 13,000
Additional paid in capital 42,329,000 42,329,000
Accumulated undistributed net realized gain
from sale of mortgages 2,545,000 2,545,000
Accumulated distributions in excess of
cumulative net income other than gain from
sale of mortgages (45,244,000) (45,147,000)
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Total shareholders' equity $ 2,193,000 $ 2,290,000
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Total liabilties and shareholders'
equity $ 2,215,000 $ 2,372,000
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
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ANGELES PARTICIPATING MORTGAGE TRUST
STATEMENTS OF OPERATIONS - UNAUDITED
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
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1995 1994 1995 1994
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<S> <C> <C> <C> <C>
REVENUE:
Interest income from investments $41,000 $ 23,000 $110,000 $ 55,000
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Total revenue 41,000 23,000 110,000 55,000
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COSTS AND EXPENSES:
General and administrative expenses 49,000 52,000 207,000 291,000
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Total costs and expenses 49,000 52,000 207,000 291,000
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NET LOSS $(8,000) $(29,000) $(97,000) $(236,000)
======= ======== ======== =========
NET LOSS PER CLASS A SHARE $ (0.00) $ (0.01) $ (0.04) $ (0.09)
======= ======== ======== =========
CASH DISTRIBUTIONS PER CLASS A SHARE $ 0.00 $ 0.00 $ 0.00 $ 0.00
======= ======== ======== =========
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
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ANGELES PARTICIPATING MORTGAGE TRUST
STATEMENTS OF CASH FLOWS - UNAUDITED
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
-----------------------
1995 1994
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<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (97,000) $ (236,000)
Adjustments to reconcile net income (loss) to cash flows
from operating activities:
Decrease (increase) in other receivables 8,000 -
Decrease (increase) in other assets (12,000) 22,000
Increase (decrease) in accounts payable and accrued
expenses (60,000) 6,000
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Cash flows from operating activities (161,000) (208,000)
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Cash flows from investing activities:
Principal collections of investment securities 233,000 -
Investment in investment securities (165,000) -
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Cash flows from investing activities 68,000 0
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Increase (decrease) in cash and cash equivalents (93,000) (208,000)
Cash at beginning of period 872,000 2,539,000
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Cash at end of period $ 779,000 $2,331,000
========= ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
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PART I. FINANCIAL INFORMATION
ANGELES PARTICIPATING MORTGAGE TRUST
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - In the opinion of management, the accompanying financial statements
contain all of the adjustments necessary to present fairly the financial
position of Angeles Participating Mortgage Trust (the "Trust" or "APART") at
September 30, 1995 and the results of operations and its cash flows for the
three and nine months ended September 30, 1995 and 1994, in conformity with
generally accepted accounting principles applied on a consistent basis. All
adjustments included are of a normal and recurring nature. Certain prior years
amounts have been reclassified to conform to current year classifications.
NOTE 2 - The net income per Class A Share was based on 2,550,000 weighted
average shares outstanding during the three and nine months ended September 30,
1995 and 1994, after deduction of the 1% Class B Share interest.
NOTE 3 - Cash and cash equivalents include cash held in bank or invested in
money market funds with maturity terms of less than 90 days. Of the cash and
cash equivalents balance at September 30, 1995 and December 31, 1994, $754,000
and $579,000, respectively, is held by the APART Contingent Claim Trust for the
benefit of APART, and are unrestricted. Such Contingent Claim Trust was
established to provide for any contingent claims arising from the operations of
APART or any liability under APART's indemnification agreements for its
Trustees. The Contingent Claim Trust will terminate on the earlier of December
31, 1996 or the determination by its trustee that no contingent claims exist.
The Trust includes the assets of the Contingent Claim Trust in its balance
sheet as it has not received any claims and does not expect to receive any
claims. All of the assets of the Contingent Claim Trust are expected to be
returned to the Trust on or before December 31, 1996.
NOTE 4 - The APART Contingent Claim Trust holds investments in two securities of
the Federal Home Loan Mortgage Corporation. The investments have a cost of
$1,303,000 and $1,371,000 as of September 30, 1995 and December 31, 1994,
respectively, and a market value of $1,304,000 and $1,355,000 as of September
30, 1995 and December 31, 1994, respectively. The investments have an 8.5%
coupon and mature on January 1, 1996 and June 1, 1996. The Trust maintains
these investments at their original cost as it is its intention to hold these
investments till maturity.
6
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The Trust's primary source of cash is from interest earned on
investments and cash and cash equivalents. Of the Trust's approximately $2.1
million and $2.3 million of investments and cash as of June 30, 1995 and
December 31, 1994, respectively, approximately $2 million is held by the APART
Contingent Claim Trust for the benefit of APART. Such Contingent Claim Trust
was established to provide for any contingent claims arising from the operations
of APART or any liability under APART's indemnification agreements for its
Trustees. The Contingent Claim Trust will terminate on the earlier of December
31, 1996 or the determination by its trustee that no contingent claims exist.
During the quarter ended June 30, 1995, the APART Contingent Claim
Trust acquired a second investment in Federal Home Loan Mortgage Corporation
securities. The investment was made in June 1995 in the amount of $165,000.
This investment has an 8.5% coupon and matures on January 1, 1996. As
previously discussed in the December 31, 1994 Form 10-K this investment along
with those similar investments made in 1994 were made to preserve the Trust's
REIT status.
The Trust expects to maintain its REIT status throughout 1995 by
investing in securities of the Federal Home Loan Mortgage Corporation until it
invests directly in real estate or mortgage loan investments.
The Trust distributed the majority of its assets, $36,975,000 to Class
A shareholders of record on November 18, 1993 payable December 3, 1993.
Remaining funds, approximately $2.5 million, were retained by the Trust to
provide for potential liabilities or claims, minimal operating costs and the
possibility of obtaining further value for shareholders from potential strategic
alternatives with third parties who might wish to acquire an interest in the
remaining Trust. The amount and timing of any future cash dividends, if any, is
impossible to predict at this time. Since APART has no other assets,
shareholder equity approximates the amount of remaining cash.
On March 15, 1994, the Trust announced that it had entered into an
agreement with a SAHI affiliate, SAHI Partners, a Delaware general partnership,
for the sale of a Warrant for the right to purchase five million shares of the
Trust's Class A Shares at a price of $1 per share and 2,500,000 shares of Class
B Shares at a price of $0.01 per share. SAHI Partners purchased the Warrant for
$101,000, which amount will be applied against the purchase price for the first
Class A Shares purchased pursuant to the Warrant. The Warrant will not be
exercisable unless and until the issuance of the Class A and Class B Shares
issuable upon the exercise thereof has been approved by holders of a majority of
the Class A Shares and Class B Shares voting together as a single class. Upon
exercise of the entire Warrant for five million shares, SAHI would own 69% of
the outstanding Class A Shares and, with the voting interest of the Class B
Shares, would control 80% of the voting interest of the Trust. If these
warrants are exercised in their entirety, the Trust would increase its capital
by $5,025,000, and funds from such capitalization would be utilized to acquire
additional investments for the Trust based upon a defined business plan which
shall be approved by holders of a majority of the Class A and Class B shares.
Based upon the Trust's cash and cash equivalent balance at September
30, 1995, management believes it has sufficient cash to operate as a going
concern through the remainder of the 1995 fiscal year.
7
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RESULTS OF OPERATIONS
During the three and nine months ended September 30, 1995, total revenue
increased to $41,000 and $110,000 or 78% and 100%, respectively, as compared to
total revenue for the comparable periods in 1994. This increase is the result
of the APART Contingent Claim Trust investing its cash in higher yielding
investments from that of the prior years quarter and nine months ended September
30, 1994. As previously stated, the Trusts only source of income is from the
interest earned on its investments and cash and cash equivalents along with the
APART Contingent Claim Trust's similar investments.
The decrease in the Trust's total costs and expenses during the three and
six months ended June 30, 1995 compared to the comparable periods in 1994 is due
to decreased legal costs
8
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PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. EXHIBITS
None.
B. REPORTS ON FORM 8-K
None
Note: All items required under Part II of Form 10-Q which are applicable have
been reported herein.
9
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Trust has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
ANGELES PARTICIPATING MORTGAGE TRUST
By /s/Ronald J. Consiglio
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Ronald J. Consiglio
Trustee and President
Date: November 1, 1995
10
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> $779,000
<SECURITIES> 1,303,000
<RECEIVABLES> 8,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,090,000
<PP&E> 125,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,215,000
<CURRENT-LIABILITIES> 22,000
<BONDS> 0
<COMMON> 2,193,000
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 2,215,000
<SALES> 110,000
<TOTAL-REVENUES> 110,000
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 207,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (97,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (97,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (97,000)
<EPS-PRIMARY> (0.04)
<EPS-DILUTED> (0.04)
</TABLE>
