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FORM 10-Q.-QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the period ended September 30, 1999
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from _______to _______
Commission File Number: 33-26327
RAINES LENDERS, L.P.
(Exact name of Registrant as specified in its charter)
Delaware 62-1375240
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification)
4400 Harding Road, Suite 500, Nashville, Tennessee 37205
(Address of principal executive office) (Zip Code)
(615) 292-1040
(Registrant's telephone number, including area code)
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 at least the past 90 days.
YES X NO
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PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
RAINES LENDERS, L.P.
(A Delaware Limited Partnership)
FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
INDEX
Financial Statements
Balance Sheets 3
Statements of Operations 4
Statements of Cash Flows 5
Notes to Financial Statements 6
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<TABLE>
RAINES LENDERS, L.P.
(A Limited Partnership)
BALANCE SHEETS
(Unaudited)
<CAPTION>
ASSETS
September 30, December 31,
1999 1998
<S> <C> <C>
CASH $ 887 $ 362
NOTE RECEIVABLE FROM AFFILIATE 4,700,000 4,700,000
INTEREST RECEIVABLE
FROM AFFILIATE-net of allowance
for impairment of $1,580,711 927,923 927,923
ADVANCE TO AFFILIATE 7,300 -
LOAN COSTS, less accumulated
amortization of $184,155 in
1999 and $170,814 in 1998 47,095 60,436
Total Assets $5,683,205 $5,688,721
========== =========
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES:
Loan Payable To
Affiliate $ 25,000 $ -
PARTNERS' EQUITY:
Limited Partners (5,625 units
outstanding) 5,658,205 5,688,721
General Partners - -
Total Partners' equity 5,658,205 5,688,721
TOTAL LIABILITIES AND
PARTNERS' EQUITY $5,683,205 $5,688,721
========= =========
<FN>
See notes to financial statements.
</TABLE>
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<TABLE>
RAINES LENDERS, L.P.
(A Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
September 30,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
REVENUES:
Interest $ - $141,000 $ - $423,340
EXPENSES:
Legal & Accounting 400 400 10,146 11,148
Mortgage Servicing
Fee 2,250 2,250 6,750 6,750
General and
Administrative - - 279 272
Amortization 4,447 4,447 13,341 13,341
----- ----- ----- ------
Total Expenses 7,097 7,097 30,516 31,511
NET (LOSS) INCOME $ (7,097) $133,903 $ (30,516)$391,829
Net (Loss) Income per limited
partner unit $ (1.26) $ 23.80 $ (5.43) $ 69.66
See Notes to Financial Statements
</TABLE>
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<TABLE>
RAINES LENDERS, L.P.
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Nine Months Ended
September 30,
1999 1998
<S> <C> <C>
Cash flows from Operating Activities:
Net (Loss) Income $ (30,516) $391,829
Adjustments to reconcile
Net (Loss) Income to Net Cash
provided by (used in)
Operating Activities:
Amortization 13,341 13,341
(Increase) decrease in
Interest Receivable from
affiliate - (414,200)
-------- -------
Net cash used in Operating
Activities (17,175) (9,030)
Cash flows from Financing Activities:
Increase in Loan Payable to
affiliate 25,000 -
Advance to affiliate (7,300) -
Net cash provided by Financing
Activities 17,700 -
NET INCREASE (DECREASE)
IN CASH 525 (9,030)
CASH AT JANUARY 1, 362 9,092
CASH AT SEPTEMBER 30, $ 887 $ 62
====== ======
<FN>
See notes to financial statements.
</TABLE>
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RAINES LENDERS, L.P.
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For the Three and Nine Months Ended September 30,1999 and 1998
(Unaudited)
A. ACCOUNTING POLICIES
The unaudited financial statements presented herein have been
prepared in accordance with the instructions to Form 10-Q and do
not include all of the information and note disclosures required by
generally accepted accounting principles. These statements should
be read in conjunction with the financial statements and notes
thereto included in the Partnership's Form 10-K for the year ended
December 31, 1999. In the opinion of management such financial
statements include all adjustments, consisting only of normal
recurring adjustments, necessary to summarize fairly the
Partnership's financial position and results of operations. The
results of operations for the nine month period ended September 30,
1999 may not be indicative of the results that may be expected for
the year ending December 31, 1998.
B. RELATED PARTY TRANSACTIONS
The General Partner and its affiliates have been actively
involved in managing the Partnership, and complying with the terms
of the Lender Financing as described in the Prospectus dated April
3, 1989. Compensation earned for these services were as follows:
1999 1998
Mortgage Servicing Fee $ 6,750 $6,750
Accounting Fees $ 2,200 $2,400
C. COMPREHENSIVE INCOME
During the three and nine month periods ended September 30,
1999, and 1998, the Partnership had no components of other
comprehensive income. Accordingly, comprehensive income (Loss) for
each of the periods was the same as net income (Loss).
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Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Results of Operations for the Quarter Ended September 30,
1999.
The Partnership's primary business is to lend monies to Raines
Road, L.P. ("the Borrower"). The Registrant continues its policy
implemented in 1998 of not recognizing interest income for
financial reporting purposes on the Lender Financing. The Lender
financing has been placed on non-accrual status in accordance with
the Registrant's policy for impaired notes. Interest income
continues to be recognized for tax and loan payment purposes.
There are no interest or principal payments due to the Partnership
until the Property securing the Partnership's loan or portions
thereof are sold, or December 31, 2001, whichever is earlier.
Due to the nature of the Registrant, all activity is a result of
transactions in Raines Road, L.P., the borrower. The Borrower had
no property sales during the first nine months of 1999. The
cumulative applicable principal balance unpaid as of September 30,
1999 is $1,677,707 and is payable from future sales proceeds after
all accrued interest is paid.
Except for the decrease in interest income, operations of the
Registrant are minimal and have remained comparable to prior
quarters.
Financial Condition and Liquidity
As of September 30, 1999,the Registrant had $887 in cash
reserves. This balance is not sufficient to meet the operating
needs of the Registrant. Unless the Borrower makes a payment from
sale proceeds or released cash reserves on the Lender Financing to
provide the Registrant with sufficient operating funds, the General
Partner will assist the Registrant in meeting operational needs
through affiliated loans. As of September 30, 1999 these
affiliated loans totalled $25,000.
Year 2000
In 1998, the Partnership initiated a plan ("Plan") to identify, and
remediate "Year 2000" issues within each of its significant
computer programs and certain equipment which contain
microprocessors. The Plan is addressing the issue of computer
programs and embedded computer chips being unable to distinguish
between the year 1900 and the year 2000, if a program or chip uses
only two digits rather than four to define the applicable year.
The Partnership has divided the Plan into five major
phases-assessment, planning, conversion, implementation and
testing. After completing the assessment and planning phases
earlier year, the Partnership is currently in the conversion,
implementation, and testing phases. Systems which have been
determined not to be Year 2000 compliant are being either replaced
or reprogrammed, and thereafter tested for Year 2000 compliance.
Contingency plans are being developed in the event that any
critical system is not compliant.
The failure to correct a material Year 2000 problem could result in
an interruption in, or failure of, certain normal business
activities or operations. Such failures could materially and
adversely affect the Partnership's operations, liquidity and
financial condition. Due to the general uncertainty inherent in
the Year 2000 problem, resulting in part from the uncertainty of
the Year 2000 readiness of third-party suppliers and customers, the
Partnership is unable to determine at this time whether the
consequences of Year 2000 failures will have a material impact on
the Partnership's operations, liquidity or financial condition.
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Part II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 27 - Financial Data Schedule
(b) No 8-K's have been filed during this quarter.
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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.
RAINES LENDERS, L.P.
By: 222 RAINES LTD.
General Partner
Date: November 11, 1999 By: /s/ Steven D. Ezell
General Partner
By: 222 PARTNERS, INC.
General Partners
Date: November 11, 1999 By: /s/ Michael A. Hartley
Secretary/Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1999
<CASH> 887
<SECURITIES> 0
<RECEIVABLES> 4,700,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 5,683,205
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 5,568,205
<TOTAL-LIABILITY-AND-EQUITY> 5,568,205
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 30,516
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (30,516)
<INCOME-TAX> 0
<INCOME-CONTINUING> (30,516)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (30,516)
<EPS-BASIC> (5.43)
<EPS-DILUTED> (5.43)
</TABLE>
