<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For Quarterly Period Ended SEPTEMBER 30, 1997
Commission file number 33-22420-A
INTERSTATE LAND INVESTORS I LIMITED PARTNERSHIP
(Exact name of Registrant as specified in its charter)
NORTH CAROLINA 56-1610635
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
INTERSTATE TOWER P. O. BOX 1012
CHARLOTTE, NC 28201-1012
(Address of principal executive offices)
(Zip Code)
(704) 379-9164
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the Registrant has (1) filed all reports required
to be filed required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding twelve 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
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
5,100 limited partnership units outstanding at November 8, 1997
Page 1 of 10 Sequentially Numbered Pages
<PAGE> 2
INTERSTATE LAND INVESTORS I LIMITED PARTNERSHIP
CONDENSED BALANCE SHEETS
AS OF SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
<TABLE>
<CAPTION>
September 30,
1997 December 31,
(Unaudited) 1996
------------- ------------
<S> <C> <C>
ASSETS:
Land Held for Sale $ 4,261,551 $ 4,261,551
Cash and Cash Equivalents 2,307 234
Other Assets 1,059 1,059
----------- -----------
$ 4,264,917 $ 4,262,844
=========== ===========
LIABILITIES AND PARTNERS' EQUITY (DEFICIT):
Accrued Liabilities 99,543 89,045
Note Payable 37,137 23,637
----------- -----------
$ 136,680 112,682
----------- -----------
Class A Limited Partners' Interest 4,128,245 4,150,168
Subordinated Limited Partners' Interest 87 87
General Partners' Interest (95) (93)
----------- -----------
4,128,237 4,150,162
----------- -----------
$ 4,264,917 $ 4,262,844
=========== ===========
</TABLE>
See attached notes to the condensed financial statements
2
<PAGE> 3
INTERSTATE LAND INVESTORS I LIMITED PARTNERSHIP
CONDENSED STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Three Nine Nine
Months Ended Months Ended Months Ended Months Ended
September 30, September 30, September 30, September 30,
1997 1996 1997 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INCOME:
Interest Income $ 41 $ 7 $ 121 $ 48
-------- -------- -------- --------
41 7 121 48
EXPENSES:
Property Taxes 59 28 87 86
Insurance Expense 113 114 341 455
Professional and Legal Fees 3,458 3,283 17,503 16,696
Interest expense 992 523 2,650 1,456
General and Administrative Costs 385 1,230 1,465 2,050
-------- -------- -------- --------
Total Expenses 5,007 5,178 22,046 20,743
-------- -------- -------- --------
NET LOSS $ (4,966) $ (5,171) $(21,925) $(20,695)
======== ======== ======== ========
NET LOSS ALLOCATION:
General Partners $ (0) $ (1) $ (2) $ (2)
Class A Limited Partners (4,966) (5,170) (21,923) (20,693)
-------- -------- -------- --------
Total Net Loss
Allocated to Partners (4,966) (5,171) (21,925) (20,695)
======== ======== ======== ========
CLASS A LIMITED PARTNERSHIP
UNITS OUTSTANDING 5,100 5,100 5,100 5,100
======== ======== ======== ========
NET LOSS PER CLASS A
LIMITED PARTNERSHIP UNIT $ (0.97) $ (1.01) $ (4.30) $ (4.06)
======== ======== ======== ========
</TABLE>
See attached notes to the condensed financial statements
3
<PAGE> 4
INTERSTATE LAND INVESTORS I LIMITED PARTNERSHIP
Condensed Statement of Partners' Equity (Deficit)
For the Nine Months ended September 30, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
Subordinated
General Limited Limited Limited
Partners Partners Partner Total
----------- ----------- ------------ -----------
<S> <C> <C> <C> <C>
Partners' Equity (Deficit)
at December 31, 1995 $ (88) $ 4,199,114 $ 89 $ 4,199,115
Net Loss for the Nine Months
Ended September 30, 1996 (2) (20,693) 0 (20,695)
----------- ----------- ----------- -----------
PARTNERS' EQUITY (DEFICIT)
AT SEPTEMBER 30, 1996 $ (90) $ 4,178,421 $ 89 $ 4,178,420
=========== =========== =========== ===========
Partners' Equity (Deficit)
at December 31, 1996 $ (93) $ 4,150,168 $ 87 $ 4,150,162
Net Loss for the Nine Months
Ended September 30, 1997 (2) (21,923) 0 (21,925)
----------- ----------- ----------- -----------
PARTNERS' EQUITY (DEFICIT)
AT SEPTEMBER 30, 1997 $ (95) $ 4,128,245 $ 87 $ 4,128,237
=========== =========== =========== ===========
</TABLE>
See attached notes to the condensed financial statements
4
<PAGE> 5
INTERSTATE LAND INVESTORS I LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended
September 30, September 30,
1997 1996
(Unaudited) (Unaudited)
------------- -------------
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net Loss $(21,925) $(20,695)
Adjustments to reconcile net loss to
net cash used for operations:
Increase in Property Taxes Payable 86 86
Increase in Accrued Liabilities 10,412 9,332
-------- --------
10,498 9,418
Net Cash used for Operating Activities (11,427) (11,277)
-------- --------
CASH FLOW FROM FINANCING ACTIVITIES:
Increase in Note Payable 13,500 10,000
-------- --------
Net Cash Provided by Financing Activities 13,500 10,000
-------- --------
Decrease in Cash and Cash Equivalents 2,073 (1,277)
Cash and Cash Equivalents at Beginning
of Period 234 1,140
-------- --------
Cash and Cash Equivalents at End of Period $ 2,307 $ (137)
======== ========
</TABLE>
See attached notes to the condensed financial statements
5
<PAGE> 6
INTERSTATE LAND INVESTORS I LIMITED PARTNERSHIP
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
SEPTEMBER 30, 1997
1. BASIS OF PRESENTATION:
The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the nine month period ended September 30, 1997, are not
necessarily indicative of the results that may be expected for the year ending
December 31, 1997.
2. ORGANIZATION AND SUMMARY OF ACCOUNTING POLICIES:
Interstate Land Investors I Limited Partnership (the "Partnership" or
"Registrant") is a North Carolina limited partnership. The Partnership filed a
registration statement in 1988 and offered the sale of the limited partnership
interests to persons who were admitted as limited partners. The offering became
effective September 7, 1988, and was terminated September 30, 1988. Capital
Contributions of $100 were received from the general partners and $5,100,000
from the limited partners. The limited partnership interests were sold in $1,000
units. On October 31, 1997, there were 523 unit holders of record. The
Partnership's business now consists of holding for investment, disposing, and
otherwise dealing in 97 acres of undeveloped land (the "Property") located in
York County, South Carolina. As of October 31, 1997, the Partnership held all 97
acres of the Property.
Until January 1, 1992, the Managing General Partner was Performance Investments,
Inc. (PII), which is 100% owned by Mr. William Garith Allen and a family member.
Mr. Allen and ISC Realty Corporation (ISCR) are also General Partners in the
Partnership and effective January 1, 1993 assumed the role of co-managing
general partners. Interstate Development Associates (IDA) is holder of the
Subordinated Limited Partner interest, which may be assigned by IDA to any of
its affiliates at any time. Mr. Allen is a 50% general partner in IDA.
3. RELATED PARTY TRANSACTIONS:
The Partnership incurred expenses of $7,875 during the nine month periods ended
September 30, 1997 and 1996, for services rendered by ISCR in connection with
certain administrative functions of the Partnership. Since payment of these fees
is deferred, the fees are included in accrued liabilities in the accompanying
balance sheets.
6
<PAGE> 7
INTERSTATE LAND INVESTORS I LIMITED PARTNERSHIP
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
1. LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 1997, the Registrant had $2,307 on hand in the form of cash
and cash equivalents. On May 22, 1995, the Partnership entered into an agreement
with ISCR to advance funds to the Partnership up to $50,000. As of September 30,
1997, $37,137 had been advanced from ISCR to the Partnership. It is anticipated
that future deficits at the Partnership will be funded from ISCR in the same
manner. Under the Partnership Agreement, the General Partner shall lend funds to
the Partnership as and when necessary sufficient to pay expenses of the
Partnership where the Working Capital Reserve is inadequate to cover payment of
such expenses. Any such loans by the General Partners will be repaid out of the
first available funds of the Partnership with interest at the Prime Rate plus
2%. Until the Registrant disposes of its approximately 96.74 acre tract of land
located in York County, South Carolina, its only sources of additional capital
are loans and advances.
2. RESULTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1997, AS COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 1996
The Registrant reported a net loss for the nine months ended September 30, 1997,
of $21,925 as compared to a net loss of $20,695 for the same period in 1996.
The Registrant reported operating expenses of $22,046 for the nine months ended
September 30, 1997, as compared to $20,743 for the same period in 1996. The
increase in operating expenses is primarily the result of an increase in
interest expense and higher charges for investor processing services.
Administrative and insurance expense were slightly lower for the nine month
period ended September 30, 1997, as compared to the same period in 1996 as a
result of the timing of the payments in 1996.
THREE MONTHS ENDED SEPTEMBER 30, 1997, AS COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 1996
The Registrant reported a net loss of $4,966 for the three months ended
September 30, 1997, as compared to a net loss of $5,171 for the same period in
1996.
7
<PAGE> 8
General and administrative expense decreased approximately $845 for the three
months ended September 30, 1997, as compared to the same period in 1996 due to
lower administrative costs associated with the operation of the Partnership.
Interest expense increased $469 to $992 for the three month period in 1997
compared to 1996 due to greater amounts outstanding under the line of credit
with ISC Realty Corporation.
8
<PAGE> 9
INTERSTATE LAND INVESTORS I LIMITED PARTNERSHIP
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In May, 1996, the Partnership filed a Complaint in the General Court of
Justice, Superior Court Division against William Garith Allen, a General
Partner, seeking damages for Mr. Allen's failure to purchase the Property at the
Put Price. The Partnership is seeking damages equal to the difference between
the current value of the Property and the Put Price. The lawsuit is in the
preliminary discovery stage. Mr. Allen has not asserted any claims against the
Partnership and the Partnership believes that its claims against Mr. Allen have
merit. Mr. Allen has asserted that he is insolvent and will be unable to satisfy
any award that the Partnership may recover. The Partnership is investigating
that assertion and will continue to evaluate the claim and the likelihood of any
recovery based upon the information received from Mr. Allen.
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
EX-27 FINANCIAL DATA SCHEDULE (FOR SEC USE ONLY)
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the nine months ended September 30,
1997.
9
<PAGE> 10
INTERSTATE LAND INVESTORS I LIMITED PARTNERSHIP
SIGNATURE
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.
INTERSTATE LAND INVESTORS I
LIMITED PARTNERSHIP
By: ISC Realty Corporation,
As Principal Executive Officer,
Principal Financial Officer, and
Principal Accounting Officer of the
Registrant
By: /s/ J. CHRISTOPHER BOONE
-------------------------------
J. Christopher Boone
President
Dated: November 10, 1997
------------------------
10
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF INTERSTATE LAND INVESTORS I FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 1,713
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,713
<PP&E> 4,261,551
<DEPRECIATION> 0
<TOTAL-ASSETS> 4,264,917
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 4,128,237
<TOTAL-LIABILITY-AND-EQUITY> 4,264,917
<SALES> 0
<TOTAL-REVENUES> 121
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 19,396
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,650
<INCOME-PRETAX> (21,925)
<INCOME-TAX> 0
<INCOME-CONTINUING> (21,925)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (21,925)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
