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 June 30, 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 -- June 30, 1996
and December 31, 1995 3-4
Consolidated Statements of Operations -- Three
and Six Months Ended June 30, 1996 and 1995 5
Consolidated Statements of Partnership Capital --
Six Months Ended June 30, 1996 and
the Years Ended December 31, 1995 and 1994 6
Consolidated Statements of Cash Flows -- Six
Months Ended June 30, 1996 and 1995 7
Notes to Consolidated Financial Statements 8-9
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 2. Changes in Securities 11
Item 3. Defaults Upon Senior Securities 11
Item 4. Submission of Matters to a Vote of
Security Holders 11
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
SIGNATURES 12
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
SECURED INVESTMENT RESOURCES FUND, L.P. III
CONSOLIDATED BALANCE SHEETS
June 30,
1996 December 31,
(Unaudited) 1995
ASSETS
INVESTMENT PROPERTIES
Land and buildings $ 14,565,907 $ 14,561,536
Furniture, fixtures, and equipment 1,427,498 1,377,961
__________ __________
15,993,405 15,939,497
Less accumulated depreciation 4,462,921 4,202,665
__________ __________
11,530,484 11,736,832
__________ __________
RESTRICTED DEPOSIT
Certificate of Accrual on
Treasury Security 862,766 827,509
__________ __________
OTHER ASSETS
Cash 343,843 486,886
Rents and other receivables, less
allowance of $12,250 in 1996 and
$7,150 in 1995 6,048 3,785
Prepaid expenses, deposits and other 56,394 27,169
Due from related parties--Note C
Note Receivable 72,202 74,643
Syndication Costs 21,751 21,751
Debt issuance costs, net of
accumulated amortization of
$33,541 in 1996 and $31,042
in 1995 116,118 44,193
__________ __________
616,356 658,427
__________ __________
TOTAL ASSETS $ 13,009,606 $ 13,222,768
__________ __________
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III
CONSOLIDATED BALANCE SHEETS--CONT'D.
June 30,
1996 December 31,
(Unaudited) 1995
LIABILITIES AND PARTNERSHIP DEFICIT
Mortgage debt--Note B $ 12,851,382 $ 12,851,382
Accounts payable and
accrued expenses 495,399 583,739
Accrued interest 327,835 385,380
Unearned revenue 26,966 27,479
Tenant security deposits 96,289 82,210
__________ __________
TOTAL LIABILITIES 13,797,871 13,930,190
__________ __________
PARTNERSHIP DEFICIT
General Partners
Capital contributions 2,000 2,000
Partnership deficit (47,037) (46,229)
__________ __________
(45,037) (44,229)
__________ __________
Limited Partners
Capital contributions 3,915,084 3,915,084
Partnership deficit (4,658,312) (4,578,277)
__________ __________
(743,228) (663,193)
__________ __________
TOTAL PARTNERSHIP DEFICIT (788,265) (707,422)
__________ __________
$ 13,009,606 $ 13,222,768
__________ __________
See notes to consolidated financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Six Months Ended Three Months Ended
June 30, June 30,
1996 1995 1996 1995
REVENUES
Rents $ 1,355,789 $ 1,278,546 $ 674,155 $ 660,471
Interest 47,414 49,823 23,155 19,513
_________ _________ ________ ________
1,403,203 1,328,369 697,310 679,984
_________ _________ ________ ________
OPERATING AND
ADMINISTRATIVE EXPENSES
Property operating
expenses 595,754 622,033 311,378 325,692
General and
administrative
expenses 36,777 35,256 21,848 18,411
Professional services 73,397 21,246 33,872 11,482
Management Fees 67,437 63,791 33,856 33,180
_________ _________ ________ ________
773,365 742,326 400,954 388,765
_________ _________ ________ ________
NET OPERATING INCOME 629,838 586,043 296,356 291,219
NON-OPERATING EXPENSES
Interest 447,925 475,064 214,670 238,592
Depreciation and
amortization 262,756 249,770 131,297 124,886
_________ _________ ________ ________
710,681 724,834 345,967 363,478
_________ _________ ________ ________
PARTNERSHIP LOSS $ (80,843) $ (138,791) $ (49,611) $ (72,259)
_________ _________ ________ ________
Allocation of loss:
General Partners (808) (1,388) (496) (723)
Limited Partners (80,035) (137,403) (49,115) (71,536)
_________ _________ ________ ________
$ (80,843) $ (138,791) $ (49,611) $(72,259)
Partnership loss per
limited partnership
unit $ (8.26) $ (14.19) $ (5.07) $ (7.39)
_________ _________ ________ ________
See notes to consolidated financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III
CONSOLIDATED STATEMENTS OF PARTNERSHIP DEFICIT
Six Months Ended June 30, 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 (808) (80,035) (80,843)
________ _________ _________
Balances at June 30, 1996 $ (45,037) $ (743,228) $ (788,265)
________ _________ _________
See notes to consolidated financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Six Months Ended
June 30,
1996 1995
OPERATING ACTIVITIES
Partnership loss $ (80,843) $ (138,791)
Adjustments to reconcile partnership
loss to net cash provided by (used
in) operating activities:
Depreciation and amortization 262,756 249,770
Provision for losses on rents
and other receivables 5,100 3,136
Changes in assets and liabilities:
Rent and other receivables (7,362) (27,153)
Prepaid expenses, deposits, and other (29,223) 28,339
Note Payable-Insurance -0- (9,833)
Accounts payable and
accrued expenses (88,341) 230,287
Accrued interest (57,545) (55,927)
Unearned revenue (513) 7,014
Tenant security deposits 14,079 8,653
_________ _________
NET CASH PROVIDED BY OPERATING ACTIVITIES 18,108 295,495
_________ _________
INVESTING ACTIVITIES
Purchase of and improvements to
investment properties (53,908) (82,589)
Interest earned on certificate
of accrual on Treasury Security (35,257) (32,489)
_________ _________
NET CASH USED IN INVESTING ACTIVITIES (89,165) (115,078)
_________ _________
FINANCING ACTIVITIES
Note Receivable from Related Party 2,440 (32,076)
Debt issuance costs (74,425) 13,718
_________ _________
NET CASH USED IN FINANCING ACTIVITIES (71,985) (18,358)
_________ _________
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (143,042) 162,059
CASH AND CASH EQUIVALENTS BEGINNING
OF PERIOD 486,886 144,737
_________ _________
CASH AND CASH EQUIVALENTS END
OF PERIOD $ 343,844 $ 306,796
_________ _________
See notes to consolidated financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III
NOTES TO FINANCIAL STATEMENTS (Unaudited)
June 30, 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 six month period ended June 30, 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:
June 30, 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 $447,925 and $475,064 during the first quarter
of 1996 and 1995, respectively.
(The remainder of this page intentionally left blank.)
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III
NOTES TO FINANCIAL STATEMENTS (Unaudited)--CONT'D.
NOTE C--RELATED PARTY TRANSACTIONS
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. Property management fees paid by the Partnership to SPECS,
Inc. are as follows:
June 30,
1996 1995
Property management fees $ 67,437 $ 63,791
_________ _________
Amounts due from related parties consist of the following:
June 30, December 31,
1996 1995
SIR Partners III $ 21,751 $ 21,751
Secured Investment Resources
Fund, L.P. 72,203 74,643
_________ _________
$ 93,954 $ 96,394
NOTE D--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 six months increased $74,800 (5.6%)
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 increased $1,500 (4.3%) and
property operating expenses decreased $26,300 (4.2%) when compared
to the first six months of last year.
Interest expense decreased $27,100 (5.7%) and depreciation and
amortization increased $13,000 (5.2%) when compared to the first
six months of last year.
The Partnership anticipates that the operating results for the
first six months will be representative of the results for the
remaining portion of the year.
Liquidity and Capital Resources
During the first six months of 1996, $18,100 of working capital was
provided by operations, $89,200 was consumed in investing
activities and $72,000 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. The Partnership is engaged in
negotiations related to the restructure of this debt and it is
anticipated that a restructure will be completed in 1996.
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.
<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 June 30, 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: August 15, 1996
By: Hoyt Partners III, L.P.
as General Partner
By:
James R. Hoyt
as Individual General Partner
Date: August 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: August 15, 1996
By: Hoyt Partners III, L.P.
as General Partner
By: /s/ James R. Hoyt
James R. Hoyt
as Individual General Partner
Date: August 15, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Unaudited.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 343,843
<SECURITIES> 862,766
<RECEIVABLES> 18,298
<ALLOWANCES> 12,250
<INVENTORY> 0
<CURRENT-ASSETS> 616,356
<PP&E> 15,993,405
<DEPRECIATION> 4,462,922
<TOTAL-ASSETS> 13,009,606
<CURRENT-LIABILITIES> 946,489
<BONDS> 12,851,382
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 13,009,606
<SALES> 0
<TOTAL-REVENUES> 1,403,203
<CGS> 0
<TOTAL-COSTS> 773,365
<OTHER-EXPENSES> 262,756
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 447,925
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (80,843)
<EPS-PRIMARY> (8.26)
<EPS-DILUTED> 0
</TABLE>
