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FORM 10-Q.--QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(As last amended in Rel. No. 31326, eff. 10/22/92.)
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 June 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 SIX MONTHS ENDED June 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
June 30, December 31,
1999 1998
<S> <C> <C>
CASH $ 137 $ 362
NOTE RECEIVABLE FROM AFFILIATE 4,700,000 4,700,000
INTEREST RECEIVABLE FROM AFFILIATE,
net of allowance for impairment of
$1,580,711 930,123 927,923
OTHER RECEIVABLES FROM AFFILIATE 8,000 -
LOAN COSTS, less accumulated
amortization of $179,708 in 1999
and $170,814 in 1998 51,542 60,436
Total Assets $5,681,802 $ 5,688,721
========= ==========
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES:
ACCOUNTS PAYABLE $ 6,400 -
LOAN PAYABLE TO AFFILIATE 16,500 -
TOTAL LIABILITIES 22,900 -
PARTNERS' EQUITY:
Limited Partners (5,625
Units Outstanding) 5,665,302 5,688,721
General partner - -
Total Partners' Equity 5,665,302 5,688,721
Total Liabilities &
Partners' Equity $ 5,681,802 $5,688,721
========= ==========
<FN>
See accompanying notes to financial statements.
</TABLE>
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<TABLE>
RAINES LENDERS, L.P.
(A Limited Partnership)
STATEMENT OF OPERATIONS
(Unaudited)
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
June 30,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
REVENUES:
Interest income $ - 141,000 - $ 282,340
EXPENSES:
Legal & Accounting 8,471 4,448 9,746 10,748
Mortgage Servicing Fee 2,250 2,250 4,500 4,500
General and
Administrative 179 - 279 272
Amortization 4,447 4,447 8,894 8,894
----- ----- ----- ------
Total Expenses 15,347 11,145 23,419 24,414
NET (LOSS) INCOME $(15,347) 129,855 (23,419) 257,926
======= ======= ======= =======
Net (Loss) Income per limited
partner unit $ (2.73) 23.08 (4.16) 45.85
<FN>
See accompanying notes to financial statements
</TABLE>
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<TABLE>
RAINES LENDERS, L.P.
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
SIX MONTHS ENDED
June 30,
1999 1998
<S> <C> <C>
Cash flows from Operating Activities:
Net (Loss) Income $ (23,419) 257,926
Adjustments to reconcile Net (Loss) Income
to Net Cash used in Operating Activities:
Increase in Loan Payable
to affiliate 16,500 -
Amortization 8,894 8,894
Increase in Interest
Receivable from affiliate (2,200) (275,500)
Net cash used Operating Activities (225) (8,680)
NET DECREASE IN CASH (225) (8,680)
CASH AT JANUARY 1, 362 9,092
CASH AT JUNE 30, $ 137 412
<FN>
See accompanying notes to financial statements.
</TABLE>
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RAINES LENDERS, L.P.
(A Limited Partnership)
NOTES TO THE FINANCIAL STATEMENTS
For the Six Months Ended June 30, 1999
(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, 1998. 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 six month period ended June 30, 1999
may not be indicative of the results that may be expected for the
year ending December 31, 1999.
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. Compensation earned for these services
were as follows:
1999 1998
Mortgage Servicing Fee $ 4,500 $4,500
Accounting Fees $ 1,800 $2,000
C. COMPREHENSIVE INCOME
During the three and six month periods ended June 30, 1999,
and 1998, the Partnership had no components of other comprehensive
income. Accordingly, comprehensive income 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 June 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 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 six months of 1999. The
cumulative applicable principal balance unpaid as of June 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 June 30, 1999,the Registrant had $137 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 it has done in the recent past.
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. The Plan anticipates
that by mid-1999 the conversion, implementation and testing phases
will be completed. Management believes that the total remediation
costs for the Plan will not be material to the operations or
liquidity of the Partnership.
The Partnership is in the process of identifying and contacting
critical suppliers and other vendors whose computerized systems
interface with the Partnership's systems, regarding their plans and
progress in addressing their Year 2000 issues. The Partnership has
received varying information from such third parties on the state
of compliance or expected compliance. Contingency plans are being
developed in the event that any critical supplier or customer 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: August 13, 1999 By: /s/ Steven D. Ezell
General Partner
By: 222 PARTNERS, INC.
General Partners
Date: August 13, 1999 By: /s/ Michael A. Hartley
Secretary/Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1999
<CASH> 137
<SECURITIES> 0
<RECEIVABLES> 4700000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 5,681,802
<CURRENT-LIABILITIES> 16,500
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 5,665,302
<TOTAL-LIABILITY-AND-EQUITY> 5,651,802
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 23,419
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (23,419)
<INCOME-TAX> 0
<INCOME-CONTINUING> (23,419)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (23,419)
<EPS-BASIC> (4.16)
<EPS-DILUTED> (4.16)
</TABLE>
