FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period to
Commission File Number 33-24235
SECURED INVESTMENT RESOURCES FUND, L.P. III
(Exact name of registrant as specified in its charter)
Missouri 48-6291172
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5453 W. 61st Place, Mission, Kansas 66205
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, (913) 384-5700
including area code
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Interests ("Units")
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 such shorter periods 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
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III
Index
PART I. FINANCIAL INFORMATION Page
Item 1. Financial Statements (Unaudited):
Consolidated Balance Sheets -- March 31, 1996
and December 31, 1995 3-4
Consolidated Statements of Operations -- Three
Months Ended March, 1996 and 1995 5
Consolidated Statements of Partnership Capital --
Three Months Ended March 31, 1996 and
the Years Ended December 31, 1995 and 1994 6
Consolidated Statements of Cash Flows -- Three
Months Ended March 31, 1996 and 1995 7
Notes to Consolidated Financial Statements 8-10
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 11-12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 2. Changes in Securities 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of
Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
SECURED INVESTMENT RESOURCES FUND, L.P. III
CONSOLIDATED BALANCE SHEETS
March 31,
1996 December 31,
(Unaudited) 1995
ASSETS
INVESTMENT PROPERTIES
Land and buildings $ 14,562,393 $ 14,561,536
Furniture, fixtures, and equipment 1,403,917 1,377,961
15,966,310 15,939,497
Less accumulated depreciation 4,332,874 4,202,665
11,633,436 11,736,832
RESTRICTED DEPOSIT
Certificate of Accrual on
Treasury Security 845,137 827,509
OTHER ASSETS
Cash 477,682 486,886
Rents and other receivables, less
allowance of $6,900 in 1996 and
$7,150 in 1995 3,301 3,785
Prepaid expenses, deposits and other 17,182 27,169
Due from related parties--Note D
Note Receivable 72,203 74,643
Syndication Costs 21,751 21,751
Debt issuance costs, net of
accumulated amortization of
$32,292 in 1996 and $31,042
in 1995 100,443 44,193
692,562 658,427
TOTAL ASSETS $ 13,171,135 $ 13,222,768
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III
CONSOLIDATED BALANCE SHEETS--CONT'D.
March 31,
1996 December 31,
(Unaudited) 1995
LIABILITIES AND PARTNERSHIP DEFICIT
Mortgage debt--Note B $ 12,851,382 $ 12,851,382
Accounts payable and
accrued expenses 582,872 583,739
Accrued interest 370,041 385,380
Unearned revenue 21,799 27,479
Tenant security deposits 83,695 82,210
TOTAL LIABILITIES 13,909,789 13,930,190
PARTNERSHIP DEFICIT
General Partners
Capital contributions 2,000 2,000
Partnership deficit (46,541) (46,229)
(44,541) (44,229)
Limited Partners
Capital contributions 3,915,084 3,915,084
Partnership deficit (4,609,197) (4,578,277)
(694,113) (663,193)
TOTAL PARTNERSHIP DEFICIT (738,654) (707,422)
$ 13,171,135 $ 13,222,768
See notes to consolidated financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended
March 31,
1996 1995
REVENUES
Rents $ 681,634 $ 618,075
Interest 24,259 30,310
705,893 648,385
OPERATING AND
ADMINISTRATIVE EXPENSES
Property operating
expenses 284,376 296,341
General and
administrative
expenses 14,929 16,845
Professional services 39,525 9,764
Management Fees 33,581 30,612
372,411 353,562
NET OPERATING INCOME 333,482 294,823
NON-OPERATING EXPENSES
Interest 233,255 236,472
Depreciation and
amortization 131,459 124,884
364,714 361,356
PARTNERSHIP LOSS $ (31,232) $ (66,533)
Allocation of loss:
General Partners (312) (665)
Limited Partners (30,920) (65,868)
$ (31,232) $ (66,533)
Partnership loss per
limited partnership
unit $ (3.19) $ (6.80)
See notes to consolidated financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III
CONSOLIDATED STATEMENTS OF PARTNERSHIP DEFICIT
Three Months Ended March 31, 1996 (Unaudited)
and the Years Ended December 31, 1995 and 1994
General Limited
Partners Partners Total
Balances at January 1, 1994 (36,230) 128,741 92,511
Partnership loss (6,284) (622,090) (628,374)
Balances at December 31, 1994 (42,514) (493,349) (535,863)
Partnership loss (1,715) (169,844) (171,559)
Balances at December 31, 1995 (44,229) (663,193) (707,422)
Partnership loss (312) (30,920) (31,232)
Balances at March 31, 1996 $ (44,541) $ (694,113) $ (738,654)
See notes to consolidated financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended
March 31,
1996 1995
OPERATING ACTIVITIES
Partnership loss $ (31,232) $ (66,533)
Adjustments to reconcile
partnership loss to net
cash provided by (used in)
operating activities:
Depreciation and
amortization 131,459 124,884
Provision for losses on rents
and other receivables (250) 2,911
Changes in assets and liabilities:
Rent and other receivables 735 (16,110)
Prepaid expenses, deposits, and other 9,989 20,241
Accounts payable and
accrued expenses (868) (16,578)
Accrued interest (15,339) 80,089
Unearned revenue (5,680) 1,699
Tenant security deposits 1,484 3,724
NET CASH PROVIDED BY OPERATING ACTIVITIES 90,298 134,327
INVESTING ACTIVITIES
Purchase of and improvements to
investment properties (26,813) (28,256)
Interest earned on certificate
of accrual on Treasury Security (17,629) (16,245)
NET CASH (USED IN) INVESTING ACTIVITIES (44,442) (44,501)
FINANCING ACTIVITIES
Principal payments on
long-term borrowings -0- (3,631)
Note Receivable from Related Party 2,440 -0-
Debt issuance costs (57,500) -0-
NET CASH (USED IN) FINANCING ACTIVITIES (55,060) (3,631)
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (9,204) 86,195
CASH AND CASH EQUIVALENTS BEGINNING
OF PERIOD 486,886 144,737
CASH AND CASH EQUIVALENTS END
OF PERIOD $ 477,682 $ 230,932
See notes to consolidated financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III
NOTES TO FINANCIAL STATEMENTS (Unaudited)
March 31, 1996
NOTE A--BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions for 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 three month period ended March
31, 1996 are not necessarily indicative of the results that may be
expected for the year ended December 31, 1996. For further
information, refer to the financial statements and footnotes thereto
included in the Partnership's annual report on Form 10-K for the year
ended December 31, 1995.
NOTE B--MORTGAGE DEBT
Mortgage debt consists of the following:
March 31, December 31,
1996 1995
Collateralized by Investment
Property
Greenhills Bicycle Club
Apartments $ 8,400,000 $ 8,400,000
KC Club Apartments 4,451,382 4,451,382
$12,851,382 $12,851,382
Interest expense totaled $233,255 and $236,472 during the first
quarter of 1996 and 1995, respectively.
NOTE C--SYNDICATION COSTS, MISC. RECEIVABLES AND OTHER RELATED
PARTY TRANSACTIONS
Through December 31, 1994, property management services were provided
by The Hoyt Group, a Kansas Corporation in which the individual
General Partner had a majority interest. As of January 1, 1995,
SPECS, Inc., a Kansas Corporation in which the individual General
Partner has a minority interest, receives property management fees for
providing property management services. SPECS, Inc. also performs
various professional services for the Partnership, primarily tax
accounting, audit preparation, SEC 10Q and 10K preparation, and
investor services. Amounts paid by the Partnership to The Hoyt Group
and SPECS, Inc. are as follows:
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III
NOTES TO FINANCIAL STATEMENTS (Unaudited)--CONT'D.
NOTE C--SYNDICATION COSTS, MISC. RECEIVABLES AND OTHER RELATED
PARTY TRANSACTIONS--CONT'D.
March 31,
1996 1995
Property management fees $ 33,581 $ 30,612
Professional fees 2,500 -0-
$ 36,068 $ 30,612
NOTE D--RELATED PARTY--RECEIVABLES
Amounts due from related parties consist of the following:
March 31, December 31,
1996 1995
Excess Syndication Costs $ 21,751 $ 21,751
Secured Investment Resources
Fund, L.P. 72,203 74,643
$ 93,954 $ 96,394
Funds advanced to Secured Investment Resources Fund, L.P. is being
repaid at the rate of $3,000 per month beginning May 1, 1995 including
9% interest.
NOTE E--CASH DISTRIBUTIONS
No distributions have been made since July 1990. Future distributions
will only be made from excess cash flow not needed for working capital
reserves.
(The remainder of this page intentionally left blank.)
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations
Total revenues for the first three months increased $57,500
(8.97%) when compared to the same period in 1995. This increase
is due to a stronger rental market, which allowed the Partnership
to increase rental rates upon lease renewals. These higher
market rates are being achieved, with fewer rent concessions, and
should continue through the remainder of 1996.
General and administrative expenses decreased $1,900 (1.1%) when
comparing first three months' results with the same period of
1995. Property operating expenses decreased $12,000 (4.0%).
Professional services increased $30,000 (307.25%) when compared
to the first three months of last year because of negotiations
for new financing.
Interest expense decreased $3,200 (1.4%) primarily due to the
increase in the interest rates. Depreciation and amortization
increased $6,600 (5.3%) from the first three months of last year.
The Partnership anticipates that the operating results for the
first three months will be representative of the results for the
remaining portion of the year.
Liquidity and Capital Resources
During the first three months of 1996, $90,000 of working capital
was provided by operations, $44,500 was consumed in investing
activities and $55,000 was used for financing activities.
The Partnership is currently past due on the mortgage secured by
K C Club Apartments. Cash generated by increased occupancy will
be used to service this mortgage.
Based upon the above, the General Partners feel that adequate
working capital is available to maintain the solvency of this
entity. In addition, the General Partners also anticipate that
1996 cash flow from operations will continue to improve because
of strong occupancy, rental rate increases, and stabilized
expenses.
The General Partners have determined it prudent to discontinue
cash distributions until such time that adequate working capital
and capital improvements reserves are in place.
(The remainder of this page intentionally left blank.)
<PAGE>
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
None.
Item 2. CHANGES IN SECURITIES
Inapplicable.
Item 3. DEFAULTS UPON SENIOR SECURITIES
None.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
Inapplicable.
Item 5. OTHER INFORMATION
Inapplicable.
Item 6. EXHIBIT AND REPORTS ON FORM 8-K
(a) Exhibits
None.
(b) Reports on Form 8-K
The Partnership filed no report on Form 8-K
during the quarter ended March 31, 1996.
<PAGE>
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.
SECURED INVESTMENT RESOURCES FUND, L.P. III
A Missouri Limited Partnership
(Registrant)
By:
James R. Hoyt
as Individual General Partner
Date: May 15, 1996
By: Hoyt Partners III, L.P.
as General Partner
By:
James R. Hoyt
as Individual General Partner
Date: May 15, 1996
<PAGE>
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.
SECURED INVESTMENT RESOURCES FUND, L.P. III
A Missouri Limited Partnership
(Registrant)
By: /s/ James R. Hoyt
James R. Hoyt
as Individual General Partner
Date: May 15, 1996
By: Hoyt Partners III, L.P.
as General Partner
By: /s/ James R. Hoyt
James R. Hoyt
as Individual General Partner
Date: May 15, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Unaudited.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 477,682
<SECURITIES> 845,137
<RECEIVABLES> 10,201
<ALLOWANCES> 6,900
<INVENTORY> 0
<CURRENT-ASSETS> 692,562
<PP&E> 15,996,310
<DEPRECIATION> 4,332,874
<TOTAL-ASSETS> 13,171,135
<CURRENT-LIABILITIES> 1,058,407
<BONDS> 12,851,382
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 13,171,135
<SALES> 0
<TOTAL-REVENUES> 705,893
<CGS> 0
<TOTAL-COSTS> 372,411
<OTHER-EXPENSES> 131,459
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 233,255
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (31,232)
<EPS-PRIMARY> (3.19)
<EPS-DILUTED> 0
</TABLE>
