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SECURITIES AND EXCHANGE COMMISSION
Washington, DC. 20549
Amendment to
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 March 31, 1996
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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, 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.
[X] Yes [ ] No
Total Pages 9
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ANGELES PARTICIPATING MORTGAGE TRUST
INDEX
Page No.
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Part I. Financial Information
Item I. Balance Sheets - March 31, 1996 and December 31, 1995 3
Statements of Operations - For the three months ended
March 31, 1996 and 1995 4
Statements of Cash Flows - For the three months ended
March 31, 1996 and 1995 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 8
2
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ANGELES PARTICIPATING MORTGAGE TRUST
BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
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(Unaudited)
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 992,000 $ 863,000
Investment 988,000 1,196,000
Other receivables 5,000 10,000
Other assets 125,000 125,000
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Total assets $ 2,110,000 $ 2,194,000
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LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Accounts payable and accrued expenses $ 153,000 $ 39,000
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Total liabilities 153,000 39,000
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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 (45,480,000) (45,282,000)
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Total shareholders' equity 1,957,000 2,155,000
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Total liabilities and shareholders' equity $ 2,110,000 $ 2,194,000
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</TABLE>
The accompanying notes are an integral part of the financial statements.
3
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ANGELES PARTICIPATING MORTGAGE TRUST
STATEMENTS OF OPERATIONS - UNAIDUTED
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
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1996 1995
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<S> <C> <C>
REVENUE:
Interest income from investments $ 8,000 $ 33,000
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Total revenue 8,000 33,000
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COSTS AND EXPENSES:
General and administrative expenses 205,000 78,000
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Total costs and expenses 205,000 78,000
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NET LOSS $(197,000) $(45,000)
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NET LOSS PER CLASS A SHARE $ (0.08) $ (0.02)
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CASH DISTRIBUTIONS PER CLASS A SHARE $ - $ -
========= ========
</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>
THREE MONTHS ENDED
MARCH 31
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1996 1995
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<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (198,000) $ (45,000)
Adjustments to reconcile net income (loss) to cash flows from
operating activities:
Decrease in other receivable 5,000 7,000
Increase in deferred expenses and other assets - (15,000)
Increase (decrease) in accounts payable and accrued expenses 114,000 (52,000)
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Cash flows from operating activities (79,000) (105,000)
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Cash flows from investing activities:
Investments in securities (1,478,000) -
Principal collections of investment securities 209,000 77,000
Sale of investment securities 1,477,000 -
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Cash flows from investing activities 208,000 77,000
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Decrease in cash and cash equivalents 129,000 (28,000)
Cash at beginning of period 863,000 872,000
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Cash at end of period $ 992,000 $ 884,000
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</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
March 31, 1996 and the results of operations and its cash flows for the three
months ended March 31, 1996 and 1995, 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 months ended March 31, 1996 and
1995, 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 balances at March 31, 1996 and December 31, 1995, all of the
cash balance of $992,000 and $823,000, respectively, 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 was terminated on August 12, 1996 based on
the determination by its trustee that no contingent claims exist.
The sole beneficiary of the Contingent Claim Trust was the Trust and the
operations of the Contingent Claim Trust were under the control of the chief
executive officer of the Trust. The Contingent Claim Trust has been accounted
for by the Trust on the consolidated method of accounting, since its inception
in 1993, as it was deemed more appropriate for including the assets and
operations of the Contingent Claim Trust with those of the Trust. As the
Contingent Claim Trust is a single asset trust, the differences had it not been
accounted for under the consolidated method are minor. The net current assets,
the net current liabilities and shareholders equity would have been identical.
The only difference within the balance sheet is the caption of the asset which
in consolidation is shown as an investment in investment securities versus a
receivable from the Contingent Claim Trust. The only difference in the statement
of operations is the caption relating to the interest earned on the investment
in securities versus reporting such amount as other income.
Note 4 - As of March 31, 1996, the APART Contingent Claim Trust holds an
investment in U. S. Treasury Bills, due May 30, 1996. The Trust classifies its
investment in securities as "held to maturity."
As of December 31, 1995 the Contingent Claim Trust held two security
investments in the Federal Home Loan Mortgage Corporation (the "FHLMC"), having
an 8.5% coupon rate and maturing on January 1, 1996 and June 1, 1996. During the
quarter ended March 31, 1996, one of the FHLMC investments matured and the Trust
acquired a new investment in the FHLMC with a maturity date of December 1997 and
a coupon rate of 7.0%. In February 1996, the Contingent Claim Trust sold the two
FHLMC investments which had maturity dates of June 1, 1996 and December 1997 and
acquired an investment in U. S. Treasury Bills, which matures August 29, 1996.
The Trust's intent was to hold the FHLMC investments to maturity. However, legal
counsel determined that such investments may inadvertently bring the Trust
within the scope of the Investment Company Act of 1940 and based on the
implementation of the Trust's new business plan, such investments were no longer
required. The Trust recognized a loss upon the sale of the two security
investments of approximately $19,000. The Trust intends to hold its current
treasury investment until its maturity date of August 29, 1996.
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
million and $2.1 million of investments and cash as of March 31, 1996 and
December 31, 1995, 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 term of the Contingent Claim Trust expires automatically on
December 31, 1996 but may be terminated by the sole trustee based on a
determination that no contingent claims exist. Effective August 12, 1996 the
sole trustee of the Contingent Claim Trust, Ronald J. Consiglio, determined
that there were no pending or threatened claims existing and terminated the
Contingent Claim Trust thereby returning all assets of the Contingent Claim
Trust of approximately $1.8 million to the Trust on August 12, 1996.
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 and investments.
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 2,550,000 shares of the
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 and Class B 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
to 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 March 31,
1996, management believes it has sufficient cash to operate as a going concern
through the remainder of the 1996 fiscal year.
The Trust is currently in the process of preparing a proxy to be filed
with the Securities and Exchange Commission, which would provide the Trust along
with SAHI the ability to acquire positions in a diversified portfolio of real
estate related assets.
RESULTS OF OPERATIONS
During the three months ended March 31, 1996, total revenue decreased to
$8,000 or 76% as compared to total revenue for the three months ended March 31,
1995. This decrease is the result of the Trust selling its security investments
in the Federal Home Loan Mortgage Corporation.
The increase in the Trust's total costs and expenses during the three
months ended March 31, 1996 compared to the three months ended March 31, 1995 is
due to increased legal costs associated with the preparation of a proxy for an
annual shareholders meeting.
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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.
8
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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
President and Chief
Executive Officer
Date: August 28, 1996
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