FORM 10-QSB--QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Quarterly or Transitional Report
(As last amended by 34-32231, eff. 6/3/93.)
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(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
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period.........to.........
Commission file number 33-23463
CLOVER APPRECIATION PROPERTIES I, L.P.
(Exact name of small business issuer as specified in its charter)
Delaware 22-2898428
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
23 West Park Avenue
Merchantville, New Jersey 08109
(Address of principal executive offices)
(609) 662-1116
Issuer's phone number
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 .
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a) CLOVER APPRECIATION PROPERTIES I, L.P.
BALANCE SHEET
(Unaudited)
June 30,
1996
ASSETS
CURRENT ASSETS
Cash (including $36,999 of cash held
for security deposits) $ 228,335
Accounts receivable 7,686
Real estate tax escrow 65,866
Total current assets 301,887
INVESTMENT PROPERTY, at cost 10,158,780
Less - accumulated depreciation 1,944,963
Net investment property 8,213,817
OTHER ASSETS
Utilities deposits 770
TOTAL ASSETS $ 8,516,474
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES
Current maturities of mortgage payable $ 73,103
Accounts payable 70,113
Accrued interest 55,465
Accrued expenses 73,771
Tenants' security deposits 42,319
Prepaid rents 16,584
Total current liabilities 331,355
MORTGAGE PAYABLE,
Less current maturities 7,288,004
DUE TO AFFILIATES 808,896
Total liabilities 8,428,255
PARTNERS' CAPITAL
General partner (deficit) (35,575)
Limited partners (3,591 units
outstanding) 123,794
Total partners' capital 88,219
TOTAL LIABILITIES AND PARTNERS' CAPITAL $ 8,516,474
The accompanying notes are an integral part of these financial statements.
b) CLOVER APPRECIATION PROPERTIES I, L.P.
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
For the Six Months Ended,
June 30,1996 June 30, 1995
<S> <C> <C>
REVENUES
Rental income $ 809,051 $ 730,084
Interest income -- 353
Total revenues 809,051 730,437
EXPENSES
Professional services 7,538 8,649
Interest 332,152 334,848
Operating expenses
(Including affiliate transactions of $0
and $9,122 for the six months ended
6/30/96 and 6/30/95, respectively) 367,284 306,241
Depreciation 135,908 134,694
Total expenses 842,882 784,432
NET LOSS $ (33,831) $ (53,995)
NET LOSS PER LIMITED PARTNERSHIP UNIT $ (9.33) $ (14.89)
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
CLOVER APPRECIATION PROPERTIES I, L.P.
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended,
June 30, 1996 June 30, 1995
<S> <C> <C>
REVENUES
Rental income $ 400,544 $ 368,538
Interest income -- 67
Total revenues 400,544 368,605
EXPENSES
Professional services 5,241 4,515
Interest 166,011 167,209
Operating expenses
(Including affiliate transactions of
$0 for the three months ended 6/30/96 224,565 146,809
and 6/30/95, respectively)
Depreciation 68,154 67,347
Total expenses 463,971 385,880
NET LOSS $ (63,427) $ (17,275)
NET LOSS PER LIMITED PARTNERSHIP UNIT $ (17.49) $ (4.76)
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
c) CLOVER APPRECIATION PROPERTIES I, L.P.
STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
FOR THE SIX MONTHS ENDED JUNE 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
General Limited
Partner Partners Total
<S> <C> <C> <C>
Balance, at January 1, 1996 $ (35,237) $ 157,287 $ 122,050
Net loss for the six months
months ended June 30, 1996 (338) (33,493) (33,831)
Balance, June 30, 1996 $ (35,575) $ 123,794 $ 88,219
<FN>
The accompanying notes are an integral part of these financial statements
</TABLE>
d) CLOVER APPRECIATION PROPERTIES I, L.P.
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1996 1995
<S> <C> <C>
OPERATING ACTIVITIES
Cash received from rentals $ 823,741 $ 722,569
Cash paid for operating activities (332,143) (300,989)
Interest received -- 353
Interest paid (332,152) (334,848)
Net cash provided by operating activities 159,446 87,085
Investing Activities
Expenditures for property (38,726) --
FINANCING ACTIVITIES
Repayment of mortgage payable (34,166) (31,236)
Net increase in cash 86,554 55,849
Cash, beginning of period 141,781 118,590
Cash, end of period $ 228,335 $ 174,439
RECONCILIATION OF NET LOSS TO NET CASH
PROVIDED BY OPERATING ACTIVITIES
NET INCOME LOSS $ (33,831) $ (53,995)
Adjustments
Depreciation 135,908 134,694
Decrease (increase) in prepaid expenses 9,998 (8,198)
Decrease (increase) in accounts receivable 2,900 (4,221)
(Increase) in real estate tax escrow (52,437) (52,476)
Increase (decrease) in accounts payable 32,500 (5,922)
Increase in security deposits 1,905 4,267
Increase (decrease) in prepaid rents 11,790 (3,294)
Increase in accrued expenses 50,713 67,342
Increase in due to affiliate -- 9,122
(Decrease) in accrued interest -- (234)
Total adjustments 193,277 141,080
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 159,446 $ 87,085
<FN>
The accompanying notes are an integral part of these financial statements
</TABLE>
e) CLOVER APPRECIATION PROPERTIES I, L.P.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
(Unaudited)
Readers of this quarterly report should refer to the audited financial
statements of Clover Appreciation Properties I, L.P. (the "Partnership" or
"Registrant") as of December 31, 1995, as certain footnote disclosures which
would substantially duplicate those contained in such audited financial
statements have been omitted from this report.
1. Investment Property:
On January 25, 1989, the Partnership acquired the Royal Wood Apartments, a 256-
unit residential complex located in Stone Mountain, Georgia.
The Investment property at June 30, 1996, consists of:
Land $ 1,171,749
Apartment buildings 8,167,125
Furniture and fixtures 819,906
10,158,780
Less: accumulated depreciation 1,944,963
$ 8,213,817
2. Transactions with Affiliates:
Effective February 21, 1995, NPI-CL Management, L.P. ("NPI") which is
unaffiliated with Crown Management Corporation, (the "General Partner") replaced
an affiliate of the General Partner as Property Manager. Until this time, as
compensation for property management services performed by an affiliate of the
General Partner with respect to the Property, the affiliate was entitled to a
management fee in an amount not to exceed 5% of gross revenues. These fees were
accrued but cannot be paid until the mortgage payable is satisfied.
Per the loan modification agreement, only approved expenses, which are expenses
that relate to the operation, management or ownership of the property, are
permitted to be paid.
Approved expenses did not include management fees and payments to reimburse the
General Partner and its affiliates except for health insurance costs and
computer fees. Certain reimbursable costs due to the affiliate have also been
accrued as noted in the following table.
The General Partner and its affiliates have made certain advances to enable the
Partnership to avoid incurring late charges on the mortgage payable which is due
on the first day of each month, prior to the receipt of monthly rents from
residents. As of June 30, 1996, advances due to the General Partner and its
affiliates were $321,293.
<TABLE>
<CAPTION>
Reimbursable
Management Costs and
Fees Advances Total
<C> <C> <C> <C>
Due to affiliates, balance at
January 1, 1996 $ 385,049 $ 423,847 $808,896
Incurred during the six
months ended June 30, 1996 -- -- --
Paid during the six months ended
June 30, 1996 -- -- --
Due to affiliates, balance at
June 30, 1996 $ 385,049 $ 423,847 $808,896
</TABLE>
3. General:
The financial statements reflect all adjustments which are, in the opinion of
the General Partner, necessary for a fair statement of results for the interim
period presented. Such adjustments are of a normal recurring nature.
Certain reclassifications have been made to the 1995 information to conform to
the 1996 presentation.
Item 2. Management's Discussion and Analysis or Plan of Operation
Financial Condition; Liquidity and Capital Resources
The Partnership owns one residential apartment complex located in the Stone
Mountain area east of DeKalb County, Georgia. The Partnership acquired the
Royal Woods Apartments on January 25, 1989 from an unaffiliated third party.
The Partnership derives its revenues from rental income from its property and is
responsible for operating expenses, administrative expenses, capital
improvements and debt service payments.
At June 30, 1996, the Partnership had cash on hand of $228,335 including cash
reserves of $191,336 and $36,999 in security deposits. Total cash on hand at
December 31, 1995, was $141,781, including cash reserves of $104,782 and $36,999
in security deposits. While the Partnership is able to satisfy its current
obligations with cash flows from operations, the General Partner believes that
if there should be a reversal of the real estate market in the area where the
Royal Wood Apartments are located, then it would be likely that the
Partnership's current funds, together with cash flows from operations, would not
be sufficient to meet the Partnership's liquidity requirements. The
Partnership's working capital deficit was $29,468 on June 30, 1996, compared to
a working capital deficit of $55,448 on December 31, 1995. The decrease in the
working capital deficit is primarily attributable to an increase in cash and
real estate tax escrows, partially offset by an increase in accounts payable,
accrued expenses and prepaid rents.
The Partnership's net cash flow from operations was $159,446 for the six
months ended June 30, 1996, compared to $87,085 for the corresponding period of
1995. The increase in net cash flow from operations during the six months ended
June 30, 1996, is primarily attributable to an increase in cash received from
rentals, partially offset by an increase in cash paid for operating activities.
No distributions to partners were made during the six months ended June 30, 1996
or 1995, and it is unlikely that distributions will be made in the foreseeable
future.
At June 30, 1996, the Partnership owed a total of $808,896 to Clover and its
affiliates, including $385,049 in accrued property management fees and $423,847
in reimbursable costs and advances made to or on behalf of the Partnership. The
payment of such costs and advances will be made from the Partnership's cash flow
when available (subject to the restrictions imposed by the Partnership's
mortgage loan) and from the proceeds of any sales or refinancing of Partnership
assets.
Effective February 21, 1995, the General Partner and certain of its
affiliates entered into an agreement with NPI-CL Management L.P. ("NPI"), an
entity unaffiliated with the Partnership or its General Partner, pursuant to
which NPI began providing day-to-day asset management services for the
Partnership as well as property management services for the Partnership. NPI is
an affiliate of National Property Investors, Inc. On January 19, 1996, the
stockholders of National Property Investors, Inc. sold all of the issued and
outstanding stock to IFGP Corporation, an affiliate of Insignia Financial Group,
Inc.
Results of Operations
Total revenues for the six and three months ended June 30, 1996, were
$809,051 and $400,544, respectively, compared to $730,437 and $368,605 for the
corresponding period of 1995. The increase in total revenues for the six and
three months ended June 30, 1996 is primarily attributable to rental rate
increases at the Partnership's investment property.
The average effective rentals per unit for the six and three months ended
June 30, 1996, were $3,320 and $1,664, respectively, compared to $2,980 and
$1,494 for the corresponding periods of 1995. The average occupancy for the six
and three months ended June 30, 1996 was 95% and 94%, respectively, compared to
96% and 96% for the corresponding periods of 1995.
Operating expenses for the six and three months ended June 30, 1996, were
$367,284 and $224,565 respectively, compared to $306,241 and $146,809 for the
corresponding periods of 1995. The increase in operating expenses is primarily
attributable to an increase in repairs and maintenance expenses incurred in
efforts to increase the curb appeal of the Partnership's property.
The Partnership realized a net loss for the six and three months ended June
30, 1996, of $33,831 and $63,427, respectively, compared to $53,995 and $17,275
for the corresponding periods of 1995. The decrease in net loss for the six
months ended June 30, 1996, is primarily due to an increase in rental revenue.
The increase in net loss for the three months ended June 30, 1996, is primarily
due to increased repairs and maintenance expenses.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit 27, Financial Data Schedule, is filed as an exhibit to
this report.
(b) Reports on Form 8-K
None.
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.
CLOVER APPRECIATION PROPERTIES I, L.P.
By: CROWN MANAGEMENT CORPORATION,
/s/Donald N. Love
Donald N. Love
President
/s/Stanley Borucki
Stanley Borucki
Treasurer
Date: August 13, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Clover
Appreciation Properties I, L.P. 1996 Second Quarter 10-QSB and is qualified in
its entirety by reference to such 10-QSB filing.
</LEGEND>
<CIK> 0000837103
<NAME> CLOVER APPRECIATION PROPERTIES I LP
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 228,335
<SECURITIES> 0
<RECEIVABLES> 7,686
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 301,887
<PP&E> 10,158,780
<DEPRECIATION> 1,944,963
<TOTAL-ASSETS> 8,516,474
<CURRENT-LIABILITIES> 331,355
<BONDS> 7,288,004
0
0
<COMMON> 0
<OTHER-SE> 88,219
<TOTAL-LIABILITY-AND-EQUITY> 8,516,474
<SALES> 0
<TOTAL-REVENUES> 809,051
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 842,882
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 332,152
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (33,831)
<EPS-PRIMARY> (9.33)
<EPS-DILUTED> 0
</TABLE>
