<PAGE>
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999 Commission file number 0-18042
----------------- -------
COMMUNITY INVESTMENT PARTNERS, L.P.
- ---------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
MISSOURI 43-1531582
- ---------------------------------------------------------------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
12555 Manchester Road
St. Louis, Missouri 63131
- ---------------------------------------------------------------------------
(Address and principal executive office) (Zip Code)
Registrant's telephone number, including area code (314) 515-2000
--------------
Securities registered pursuant to Section 12(b) of the Act: None.
Securities registered pursuant to Section 12(g) of the Act: None.
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 the past 90 days.
YES [X] NO [ ]
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in part III of this
Form 10-K or any amendment to this form 10-K. [ ]
As of March 15, 2000, 71,715 units of limited partnership interest
(Units), representing net assets of $150,058 were held by non-
affiliates. There is no established public market for such units.
1
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DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Prospectus of the Registrant dated March 12, 1990,
filed with the Securities and Exchange Commission and portions of the
Proxy Statements of the Registrant dated March 12, 1991 and September 7,
1999, and filed with the Securities and Exchange Commission are
incorporated by reference in Part I, Part II and Part III hereof.
2
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<TABLE>
COMMUNITY INVESTMENT PARTNERS, L.P.
TABLE OF CONTENTS
<CAPTION>
Page
----
<S> <C>
PART I
Item 1. Business 4
Item 2. Properties 5
Item 3. Legal Proceedings 5
Item 4. Submission of Matters to a Vote of Security Holders 6
PART II
Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters 7
Item 6. Selected Financial Data 8
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
Item 8. Index to Financial Statements and Supplementary Financial Data 11
Item 9. Change in and Disagreements with Accountants
on Accounting and Financial Disclosure 23
PART III
Item 10. Directors and Executive Officers of the Registrant 24
Item 11. Executive Compensation 25
Item 12. Security Ownership of Certain Beneficial Owners and
Management 25
Item 13. Certain Relationships and Related Transactions 25
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K 26
SIGNATURES 27
INDEX TO EXHIBITS 28
</TABLE>
3
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PART I
Item 1. BUSINESS
Community Investment Partners, L.P. (the "Partnership") was formed to
seek long-term capital appreciation by making investments in companies and
other special investment situations. The Partnership will not engage in
any other business or activity.
The Partnership has elected to be a business development company
under the Investment Company Act of 1940, as amended. As a business
development company, the Partnership is required to invest at least 70% of
its assets in qualifying investments as specified in the Investment Company
Act.
The Partnership was formed on October 10, 1989, under the Revised
Uniform Limited Partnership Act of Missouri. CIP Management, L.P., LLLP,
the Managing General Partner, is a Missouri limited liability limited
partnership formed on October 10, 1989 as a limited partnership and
registered as a limited liability limited partnership on July 23, 1997.
The general partner of CIP Management, L.P., LLLP is CIP Management, Inc.,
an indirect subsidiary of Edward D. Jones & Co., L.P.
The Partnership participated in a public offering of its limited
partnership interests in 1990. The Partnership sold 91,820 Units of
limited partnership interest for an aggregate price of $2,295,500. After
offering expenses of approximately $122,000, the Partnership received
approximately $2,173,500 in proceeds available for investment.
During 1999, the Limited Partners voted to sell Partnership assets
and thereby effect the dissolution of the Partnership pursuant to section
9.1.1 of the Partnership Agreement. As of December 31, 1999 all publicly
traded securities have been sold through the public market. The Securities
and Exchange Commission (SEC) is reviewing an application requesting
permission to sell the remaining assets to EDJ Ventures. Upon receipt of
approval from the SEC, the final dissolution processes will be completed.
The information set forth under the captions "Proposal 1", "Proposal
2" and "Other Factors to Consider" of the Proxy Statement dated September
7, 1999, filed with the SEC pursuant to Section 14(A) of the Securities
Exchange Act of 1934, is incorporated herein by reference.
The Partnership is no longer making investments. For information
regarding the Partnership's current portfolio investments and purchases and
sales during the year, see Item 8 of this Form 10-K.
The information set forth under the captions "Investment Objectives &
Policies" and "Regulation" in the Prospectus of the Partnership dated March
12, 1990, filed with the SEC pursuant to Rule 497(b) under the Securities
Act of 1933, is incorporated herein by reference.
RISKS OF UNIT OWNERSHIP
The purchase and ownership of Units involve a number of significant
risks and other important factors. The portfolio company investments of
the Partnership involve a high degree of business and financial risk that
can result in substantial losses. Among these are the risks associated
with investments in companies with little operating history, companies
operating at a loss or with substantial variations in operating results
from period to period, companies with the need for substantial additional
capital to support expansion or achieve or maintain a competitive position,
companies which may be highly leveraged, companies which may not be
diversified and companies in which the Partnership may be the sole or
primary lender. The Partnership invests in only a few companies.
Therefore, a loss or other problem with a single investment could have a
material adverse effect on the Partnership.
4
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Risks may arise due to the period of time (typically four to seven
years or longer) which will elapse before portfolio company investments
have reached a state of maturity such that disposition can be considered.
Portfolio companies may require additional funds and there can be no
assurance that the Partnership will have sufficient funds from reserves or
borrowing to make such follow-on investments which may have a substantial
negative impact on a portfolio company in need of additional funds.
All decisions with respect to the management of the Partnership,
including identifying and making portfolio investments, are made
exclusively by the General Partners. Limited Partners must rely on the
abilities of the General Partners. The key personnel of the Managing
General Partner have considerable prior experience in investment banking
and in structuring investments.
Ownership of the Units also entails risk because Limited Partners may
not be able to liquidate their investment in the event of an emergency or
for any other reason due to the substantial restrictions on transfers
contained in the Partnership Agreement and the lack of a market for the
resale of Units.
The information set forth under the captions "Risk and Other
Important Factors" (including the subsections "Risks of Investment," "Size
of Partnership," "Ability to Invest Funds," "Time Required to Maturity of
Investments; Illiquidity of Investments," "Need for Follow-on Investments,"
"Use of Leverage," "Unspecified Investment," "Reliance on Management," "New
Business," "No Market for Units" and "Federal Income Tax Considerations")
on pages 9 through 14 of the Prospectus of Partnership dated March 12,
1990, filed with the Securities and Exchange Commission pursuant to Rule
497(b) under the Securities Act of 1933 on March 12, 1990, is incorporated
herein by this reference. (This information has been restated herein
pursuant to section 64(b) of the Investment Company Act of 1940).
Partners should refer to the Partnership Agreement for more detailed
information.
EMPLOYEES
The Partnership has no employees. The Managing General Partner,
subject to the supervision of the Individual General Partners, manages the
Partnership's portfolio company investments and, pursuant to a Management
Agreement with the Partnership, performs or arranges for affiliates to
perform, the management and administrative services for the Partnership and
is responsible for managing the Partnership's money-market investments.
The Managing General Partner receives no fee under the Management Agreement
but is reimbursed by the Partnership for certain expenses.
Item 2. PROPERTIES
The Partnership does not own or lease any physical properties.
Item 3. LEGAL PROCEEDINGS
The Partnership is not a party to any material pending legal
proceedings.
5
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Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
A special meeting of Limited Partners was held on October 4, 1999,
during which two matters were submitted for vote.
The first matter requested authority to sell two assets to EDJ
Ventures, Ltd., L.P. (EDJ Ventures), an affiliate of CIP Management, L.P.,
LLLP, (the managing general partner of the Partnership). The assets consist
of a) the right to receive future payments totaling $96,750 from an escrow
account, contingent upon and subject to reduction by any indemnity claims
pursuant to a merger between Innovation Medical Technologies, Inc., and
Alcon Surgical, Inc., a company in which the Partnership had previously
invested; and b) the right to receive future payments totaling $24,057,
contingent upon and subject to reduction by any indemnity claims that
National Vision Associates, LTD., might successfully assert pursuant to its
purchase of Frame-n-Lens Optical, Inc., a company in which the Partnership
had previously invested. A total of 58,254 votes were cast for the
proposal, zero votes were cast against the proposal, and zero votes were
withheld.
The second matter requested authority to sell the remaining assets of
the Partnership, consisting of publicly traded securities, through the
public market and thereby effect the dissolution of the Partnership. A
total of 58,254 votes were cast for the proposal, zero votes were cast
against the proposal, and zero votes were withheld.
6
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PART II
Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
There is no established public trading market for the Limited
Partnership interests. As of March 15, 2000, the total number of holders
of units is 104. The number of limited partnership units outstanding is
87,820. The number of general partnership units outstanding is 20,000 as
of March 15, 2000.
Cash distributions of $7 per unit were made to its Partners during
the year ended December 31, 1999.
The information set forth under the captions "Partnership
Distributions and Allocations" and "Transferability of Units" in the
Prospectus of the Partnership dated March 12, 1990, filed with the
Securities and Exchange Commission pursuant to Rule 497(b) under the
Securities Act of 1933 is incorporated herein by reference.
7
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Item 6. SELECTED FINANCIAL DATA
<TABLE>
STATEMENTS OF FINANCIAL CONDITION:
<CAPTION>
As of
December 31,
---------------------------------------------------------------------
1999 1998 1997 1996 1995
--------- --------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Assets $ 225,605 $ 525,703 $ 2,143,937 $2,413,382 $3,577,659
Portfolio
Investments at
Fair Value 0 327,320 1,951,068 2,341,691 3,217,156
<CAPTION>
STATEMENTS OF INCOME:
For the Years Ended
December 31,
--------------------------------------------------------------------
1999 1998 1997 1996 1995
-------- ---------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Net (Loss) Income
before Net Realized Gains
and Net Unrealized
(Losses) Gains $(40,853) $ (19,757) $ 37,739 $ (2,416) $ (18,790)
Net Realized Gains 322,013 1,237,319 486,662 1,647,498 594,681
Net Unrealized
(Losses) Gains 173,482 (733,306) (254,746) (652,959) 318,870
Net Income 454,642 484,256 269,655 992,123 894,761
Per Unit of
Partnership Interest:
Net Asset Value 2.09 4.88 19.88 22.38 33.18
Net (Loss) Income
before Net Realized Gains
and Net Unrealized
(Losses) Gains (.38) (.18) .35 (.02) (.17)
Net Realized Gains 2.99 11.48 4.51 15.28 5.52
Net Unrealized
(Losses) Gains 1.61 (6.80) (2.36) (6.06) 2.96
Net Income 4.22 4.49 2.50 9.20 8.30
</TABLE>
8
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Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
(FISCAL YEAR 1999 VERSUS 1998)
Net income for the year ended December 31, 1999 was $454,642, a 6%
decrease from 1998 net income of $484,256. Net income decreased mainly due
to a $915,306 decrease in realized gains and a $13,859 increase in total
expenses offset by a $906,788 increase in unrealized gains, as discussed
below.
The sale of all publicly traded investments during the fourth quarter
of 1999 accounted for $231,991 of the $322,013 total realized gain. See
detail of investment sales in Note 6 to the financial statements. These
sales were made as a result of the October 4, 1999 Limited Partner vote
approving the sale of Partnership assets. The remaining 1999 realized gain
consisted of an $87,536 escrow payment received as a result of the 1998
liquidation of Innovation Medical Technologies Preferred stock and a $2,487
escrow payment received as a result of the 1998 liquidation of Vision
Partners L.P. limited partnership interests.
The $173,482 unrealized gain recorded in 1999 represents a reversal
of the $65,182 unrealized loss on investment securities at December 31,
1998, and a $108,300 unrealized gain on the remaining assets that will be
sold to EDJ Ventures, pending SEC approval. Previously, the assets were
carried at a zero basis.
The increase in expenses was caused by legal fees incurred related to
the planned Partnership dissolution, including preparation of the proxy
statement and request for approval from the SEC for the proposed sales of
assets to EDJ Ventures.
The Partnership made a distribution of $7 per unit during 1999,
representing $754,740.
(FISCAL YEAR 1998 VERSUS 1997)
Net income for the year ended December 31, 1998, was $484,256,
compared to net income of $269,655 in 1997, an increase of 80%. The
increase in net income is attributable to realized gains of $1,237,319
offset by net unrealized losses of $733,306.
Realized gains are due to significant gains recognized in 1998 from
the sale of stock in Intermedia Communications of Florida and Innovation
Medical Technologies, Inc., see Note 6 to the financial statements.
Innovation Medical Technologies, Inc. shares of Class A and B Preferred
stock and Intermedia Communications of Florida shares of Common stock were
sold resulting in gains of $1,170,602 and $527,207, respectively. The
realized gains were offset by a realized loss in Vision Partners, L.P.
limited partnership interests in the amount of $460,490. Unrealized losses
are due to a decrease in share prices of portfolio investments from the
prior year and to a reversal of previous unrealized gains on shares sold.
The Partnership made distributions of $7 and $12.50 per unit during
1998 representing amounts of $754,740 and $1,347,750, respectively.
Director's fees have been discontinued in 1998 due to the fact that initial
investments will no longer be made by the Partnership.
As of December 31, 1998, unrealized losses on investments totaled
$65,182. The future income or loss of the Partnership is contingent upon
the performance of the portfolio investments.
9
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SUBSEQUENT EVENTS
None
LIQUIDITY AND CAPITAL RESOURCES
Total capital for the Partnership as of December 31, 1999, was
$225,605. This consisted of $191,619 in Limited Partner capital and
$33,986 in General Partner capital.
Net income of $454,642 for 1999 was allocated in the amount of
$370,306 to the Limited Partners and in the amount of $84,336 to the
General Partners.
At December 31, 1999, the Partnership had $132,539 in cash and cash
equivalents.
10
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Item 8. INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTARY
FINANCIAL DATA
<TABLE>
<CAPTION>
Page
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<S> <C>
Report of Independent Accountants 12
Schedule of Portfolio Investments as of
December 31, 1998 13
Statements of Financial Condition as of December 31, 1999 and 1998 14
Statements of Income for the Years Ended
December 31, 1999, 1998 and 1997 15
Statements of Cash Flows for the Years Ended
December 31, 1999, 1998 and 1997 16
Statements of Changes in Partnership Capital for the
Years Ended December 31, 1999, 1998 and 1997 17
Notes to Financial Statements 18
</TABLE>
Financial Statement Schedules:
All financial statement schedules are omitted because they are not
applicable or the required information is shown in the financial statements
or notes thereto.
11
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REPORT OF INDEPENDENT ACCOUNTANTS
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of
Community Investment Partners, L.P.
In our opinion, the accompanying Statements of Financial Condition,
including the Schedule of Portfolio Investments, and the related Statements
of Income, of Cash Flows and of Changes in Partnership Capital present
fairly, in all material respects, the financial position of Community
Investment Partners, L.P. (the "Partnership") at December 31, 1999 and
1998, and the results of its operations, its cash flows and the changes in
Partnership Capital for each of the periods indicated, in conformity with
accounting principles generally accepted in the United States. These
financial statements are the responsibility of the Partnership's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with auditing standards generally accepted in the
United States, which require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included
confirmation of portfolio investments owned at December 31, 1999, by
correspondence with the custodian, provide a reasonable basis for the
opinion expressed above.
PricewaterhouseCoopers LLP
Kansas City, Missouri
March 3, 2000
12
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<TABLE>
COMMUNITY INVESTMENT PARTNERS, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS
As of December 31, 1998<F*>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Company Nature of Business Fair Value
Investment Date Investment Cost (Note 3)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SAZTEC INTERNATIONAL, INC. Provides services for database
(SAZZ) construction and information
conversion
June 7, 1990 27,100 shares Common
Stock $ 78,324 $ 5,929
INTERMEDIA Organized to install and provide
COMMUNICATIONS OF private, dedicated telecommunication
FLORIDA (ICIX) lines using fiber optic cable
May 31, 1991 13,070 shares Common Stock 18,397 225,458
CITATION COMPUTERS Provides clinical
(CITA) laboratory information
October 31, 1991 13,680 shares of Common
Stock 33,578 23,085
ISOLYSER COMPANY, INC. Makes healthcare disposables
(OREX) from hot-water soluble
polymer
August 30, 1996 68,563 shares of Common
Stock 262,203 72,848
-------- --------
TOTAL INVESTMENTS $392,502 $327,320
======== ========
<FN>
<F*>THERE WERE NO PORTFOLIO INVESTMENTS AS OF DECEMBER 31, 1999.
The accompanying notes are an integral
part of these financial statements.
</TABLE>
13
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<TABLE>
COMMUNITY INVESTMENT PARTNERS, L.P.
STATEMENTS OF FINANCIAL CONDITION
<CAPTION>
ASSETS
------
December 31,
--------------------------
1999 1998
-------- --------
<S> <C> <C>
Investments at Fair Value (Note 3)
(cost $0 and $392,502, respectively) $ 0 $327,320
Cash and Cash Equivalents 132,539 212,383
Other Receivable 108,300 -
-------- --------
TOTAL ASSETS $240,839 $539,703
======== ========
<CAPTION>
LIABILITIES AND PARTNERSHIP CAPITAL
-----------------------------------
December 31,
--------------------------
1999 1998
-------- --------
<S> <C> <C>
Liabilities:
Accrued Expenses $ 15,234 $ 14,000
-------- --------
TOTAL LIABILITIES 15,234 14,000
-------- --------
Partnership Capital:
Capital - Limited Partners 191,619 436,053
Capital - General Partners 33,986 89,650
-------- --------
TOTAL PARTNERSHIP CAPITAL 225,605 525,703
-------- --------
TOTAL LIABILITIES AND
PARTNERSHIP CAPITAL $240,839 $539,703
======== ========
The accompanying notes are an integral
part of these financial statements.
</TABLE>
14
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<TABLE>
COMMUNITY INVESTMENT PARTNERS, L.P.
STATEMENTS OF INCOME
<CAPTION>
For the Years Ended
December 31,
--------------------------------------------
1999 1998 1997
-------- ---------- ---------
INCOME
------
<S> <C> <C> <C>
Dividend and Interest Income $ 1,486 $ 8,723 $ 56,358
-------- ---------- ---------
TOTAL INCOME 1,486 8,723 56,358
-------- ---------- ---------
EXPENSES
--------
Professional Fees 42,339 24,956 17,633
Other - 3,524 986
-------- ---------- ---------
TOTAL EXPENSES 42,339 28,480 18,619
-------- ---------- ---------
Net (Loss) Income before Net Realized
Gains and Net Unrealized Gains (Losses) (40,853) (19,757) 37,739
Net Realized Gains on
Sale of Investments (Note 6) 322,013 1,237,319 486,662
Net Unrealized Gains (Losses)
on Investments 173,482 (733,306) (254,746)
-------- ---------- ---------
NET INCOME $454,642 $ 484,256 $ 269,655
======== ========== =========
The accompanying notes are an integral
part of these financial statements.
</TABLE>
15
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<PAGE>
<TABLE>
COMMUNITY INVESTMENT PARTNERS, L.P.
STATEMENTS OF CASH FLOWS
<CAPTION>
For the Years Ended
December 31,
---------------------------------------------
1999 1998 1997
--------- ----------- ---------
<S> <C> <C> <C>
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
Net income $ 454,642 $ 484,256 $ 269,655
Adjustments to reconcile net income
to net cash provided by operating activities:
Purchase of portfolio investments - - (1,197)
Proceeds from sale of portfolio investments 714,515 2,127,761 623,736
Unrealized (gains) losses on
portfolio investments (173,482) 733,306 254,746
Net realized gains on
sale of portfolio investments (322,013) (1,237,319) (486,662)
Decrease (increase) in accrued dividend
and interest receivable - 59,784 (56,358)
Increase in accrued expenses 1,234 1,000 900
--------- ----------- ---------
Net cash provided by
operating activities 674,896 2,168,788 604,820
--------- ----------- ---------
CASH FLOWS USED IN FINANCING ACTIVITIES:
Capital distributions (754,740) (2,102,490) (539,100)
--------- ----------- ---------
Net cash used in financing activities (754,740) (2,102,490) (539,100)
--------- ----------- ---------
Net (decrease) increase in cash and
cash equivalents (79,844) 66,298 65,720
CASH AND CASH EQUIVALENTS:
Beginning of year 212,383 146,085 80,365
--------- ----------- ---------
End of year $ 132,539 $ 212,383 $ 146,085
========= =========== =========
The accompanying notes are an integral
part of these financial statements.
</TABLE>
16
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<PAGE>
<TABLE>
COMMUNITY INVESTMENT PARTNERS, L.P.
STATEMENTS OF CHANGES IN PARTNERSHIP CAPITAL
For the Years Ended December 31, 1999, 1998 and 1997
<CAPTION>
-----------------------------------------
LIMITED GENERAL
PARTNERS PARTNERS TOTAL
----------- --------- -----------
<S> <C> <C> <C>
Balance, December 31, 1996 $ 1,973,575 $ 439,807 $ 2,413,382
Distribution (439,100) (100,000) (539,100)
Net Income 219,634 50,021 269,655
----------- --------- -----------
Balance, December 31, 1997 $ 1,754,109 $ 389,828 $ 2,143,937
Distribution (1,712,482) (390,008) (2,102,490)
Net Income 394,426 89,830 484,256
----------- --------- -----------
Balance, December 31, 1998 $ 436,053 $ 89,650 $ 525,703
Distribution (614,740) (140,000) (754,740)
Net Income 370,306 84,336 454,642
----------- --------- -----------
Balance, December 31, 1999 $ 191,619 $ 33,986 $ 225,605
=========== ========= ===========
The accompanying notes are an integral
part of these financial statements.
</TABLE>
17
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<PAGE>
COMMUNITY INVESTMENT PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS
1. GENERAL
Partnership Organization
------------------------
Community Investment Partners, L.P. (the "Partnership") was
formed on October 10, 1989, under the Revised Uniform Limited
Partnership Act of Missouri. CIP Management, L.P., LLLP, the
Managing General Partner, is a Missouri limited liability limited
partnership formed on October 10, 1989 as a limited partnership and
registered as a limited liability limited partnership on July 23,
1997. The general partner of CIP Management, L.P., LLLP is CIP
Management, Inc., an indirect subsidiary of Edward D. Jones & Co.,
L.P.
Partnership Dissolution
-----------------------
During 1999, the Limited Partners voted to sell Partnership
assets and thereby effect the dissolution of the Partnership pursuant
to section 9.1.1 of the Partnership Agreement.
As of December 31, 1999 all publicly traded securities have
been sold through the public market. The Securities and Exchange
Commission is currently reviewing an application requesting
permission to sell the remaining assets to EDJ Ventures. The
remaining assets consist of a) the right to receive future payments
totaling $96,750 from an escrow account, contingent upon and subject
to reduction by any indemnity claims pursuant to a merger between
Innovation Medical Technologies, Inc., and Alcon Surgical, Inc., a
company in which the Partnership had previously invested; and b) the
right to receive future payments totaling $24,057, contingent upon
and subject to reduction by any indemnity claims that National Vision
Associates, LTD., might successfully assert pursuant to its purchase
of Frame-n-Lens Optical, Inc., a company in which the Partership had
previously invested. Upon receipt of approval from the Securities and
Exchange Commission, the final dissolution processes will be
completed.
As a result of the Partnership dissolution process, a $65,182
unrealized gain was recorded for the year ended December 31, 1999.
This amount represents a reversal of the December 31, 1998 unrealized
loss on the publicly traded securities that were sold in 1999.
Business
--------
The Partnership elected to be a business development company
under the Investment Company Act of 1940, as amended. As a business
development company, the Partnership is required to invest at least
70% of its assets in qualifying investments as specified in the
Investment Company Act. The Managing General Partner is responsible
for making the Partnership's investment decisions.
The Partnership has sought and will continue to seek long-term
capital appreciation by making investments in companies and other
special investment situations. The Partnership is not permitted to
engage in any other business or activity.
Risk of Ownership
-----------------
The purchase and ownership of Partnership Units involve a
number of significant risks and other important factors. The
portfolio company investments of the Partnership involve a high
degree of business and financial risk that can result in substantial
losses. Among these are the risks associated with investments in
companies with little operating history, companies operating at a
loss or with substantial variations in operating results from period
to period, companies with the need for substantial additional capital
to support expansion or achieve or maintain a competitive position,
18
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<PAGE>
companies which may be highly leveraged, companies which may not be
diversified and companies in which the Partnership may be the sole or
primary lender. The Partnership intends to invest in only a few
companies; therefore, a loss or other problem with a single
investment could have a material adverse effect on the Partnership.
2. ALLOCATION OF PARTNERSHIP PROFITS AND LOSSES
The Partnership Agreement generally provides for the allocation
of profits and losses pro rata based on the Partners' capital
contributions. Refer to the Partnership Agreement for more detailed
information.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and Cash Equivalents
-------------------------
All short-term investments with original maturities of three
months or less are considered to be cash equivalents.
Investment Transactions
-----------------------
All portfolio investments are carried at cost until significant
developments affecting an investment provide a basis for revaluation.
Thereafter, portfolio investments are carried at fair value as
obtained from outside sources or at a value determined quarterly by
the Managing General Partner under the supervision of the Independent
General Partners. Due to the inherent uncertainty of valuation,
those estimated values for portfolio investments carried at cost may
differ significantly from the values that would have been used had a
ready market for the investment existed, and the differences could be
material to the financial statements. Investments in securities
traded on a national securities exchange are valued at the latest
reported sales price on the last business day of the period. If no
sale has taken place, the securities are valued at the last bid
price. If no bid price has been reported, or if no exchange
quotation is available, the securities are valued at the quotation
obtained from an outside broker. Investment transactions are
recorded on a trade date basis. Income is recorded on an accrual
basis.
Use of Estimates
----------------
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities
as of the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
Income Taxes
------------
Income taxes have not been provided for as the Partnership is a
limited partnership and each partner is liable for its own tax
payments. Allocation of Partnership profits and losses for tax
purposes is based upon taxable income which may differ from net
income for financial reporting purposes primarily due to differences
between book and tax accounting for portfolio investments.
Distributions
-------------
When excess cash, if any, becomes available, it is the
Partnership's intent to make distributions. All distributions are
subject to the sole discretion of the Managing General Partner and
the Independent General Partners.
19
<PAGE>
<PAGE>
4. PER UNIT INFORMATION
There is no market for the Limited Partnership interests. Per unit
information is as follows:
<TABLE>
<CAPTION>
For the Years Ended December 31,
--------------------------------------
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Number of unit holders 104 104 104
======== ======== ========
Limited partnership units 87,820 87,820 87,820
General partnership units 20,000 20,000 20,000
-------- -------- --------
Total units outstanding 107,820 107,820 107,820
======== ======== ========
Net asset value per unit $ 2.09 $ 4.88 $ 19.88
======== ======== ========
Net income per unit $ 4.22 $ 4.49 $ 2.50
======== ======== ========
</TABLE>
5. RELATED PARTY TRANSACTIONS
The Partnership is furnished with certain non-reimbursed
management and accounting services by affiliates, which are not
reflected in the accompanying financial statements.
Currently, the SEC is reviewing an application to sell the
assets remaining at December 31, 1999 to EDJ Ventures.
The Partnership may place its General Partners on Boards of
Directors of portfolio companies.
The Managing General Partner and the Independent General
Partners of the Partnership are also the managing general partner and
independent general partners, respectively, of Community Investment
Partners II, L.P., a business development company. Additionally, the
Managing General Partner is the managing general partner of Community
Investment Partners III L.P., LLLP, another business development
company.
20
<PAGE>
<PAGE>
6. INVESTMENT TRANSACTIONS
Following is a summary of portfolio investment transactions during
the years ended December 31, 1999, 1998 and 1997, respectively.
<TABLE>
<CAPTION>
For the year ended December 31, 1999
------------------------------------
Type of Realized
Company Investment Cost Proceeds Gain (Loss)
------- ------------ -------- -------- -----------
<S> <C> <C> <C> <C>
SALES:
Isolyser Company, Inc. Common Stock $262,203 $247,194 $ (15,009)
Citation Computers Common Stock 33,578 25,857 (7,721)
Intermedia Communications
of Florida Common Stock 18,397 341,326 322,929
Saztec International, Inc. Common Stock 78,324 10,115 (68,209)
Innovation Medial Escrow
Technologies, Inc. Disbursement - 87,536 87,536
Vision Partners, L.P. Escrow
Disbursement - 2,487 2,487
-------- -------- --------
TOTAL SALES $392,502 $714,515 $322,013
======== ======== ========
</TABLE>
21
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
For the year ended December 31, 1998
------------------------------------
Type of Realized
Company Investment Cost Proceeds Gain (Loss)
------- ------------ -------- ---------- -----------
<S> <C> <C> <C> <C>
SALES:
Innovation Medical Term Notes
Technologies, Inc. and Warrants $ 40,763 $ 40,763 $ -
Innovation Medical Term Notes
Technologies, Inc. and Warrants 15,008 15,008 -
Innovation Medical Liquidation of
Technologies, Inc. Preferred Stock 239,994 1,410,596 1,170,602
Intermedia Communications
of Florida Common Stock 19,712 546,919 527,207
Vision Partners, L.P. Liquidation of
Limited
Partnership
Interests 574,965 114,475 (460,490)
-------- ---------- ----------
TOTAL SALES $890,442 $2,127,761 $1,237,319
======== ========== ==========
</TABLE>
During 1998, there was a two-for-one stock split on Intermedia
Communications of Florida common stock. The Partnership's 6,535
remaining shares of common stock were converted into a total of
13,070 shares of common stock.
22
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
For the year ended December 31, 1997
------------------------------------
Type of Realized
Company Investment Cost Proceeds Gain (Loss)
------- ------------ -------- -------- -----------
<S> <C> <C> <C> <C>
PURCHASES:
Intermedia Communications Exercises of
of Florida Warrants $ 1,197
--------
TOTAL PURCHASES $ 1,197
========
SALES:
Intermedia Communications
of Florida Common Stock $ 33,088 $422,268 $389,180
Isolyser Company, Inc. Common Stock 87,860 76,622 (11,238)
PDT, Inc. Common Stock 9,294 101,047 91,753
Citation Computers Common Stock 6,832 23,799 16,967
-------- -------- --------
TOTAL SALES $137,074 $623,736 $486,662
======== ======== ========
</TABLE>
During 1997, there was a one-for-four reverse stock split on Saztec
International, Inc. common stock. The Partnership's 108,400 shares
of common stock were converted to 27,100 shares of common stock.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURES
None
23
<PAGE>
<PAGE>
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
There are two Independent General Partners and one Managing General
Partner of the Partnership. These Independent General Partners and the
Managing General Partner are responsible for the management and
administration of the Partnership. The General Partners are "interested
persons" of the Partnership as defined by the Investment Company Act of
1940, but the Partnership has obtained an exemptive order from the
Securities and Exchange Commission permitting them to be considered
disinterested persons. The Independent General Partners provide overall
guidance and supervision with respect to the operations of the Partnership
and perform the various duties imposed on the directors of a business
development company by the Investment Company Act. In addition to general
fiduciary duties, the Independent General Partners supervise the management
and underwriting arrangement of the Partnership, the custody arrangement
with respect to portfolio securities, the selection of accountants,
fidelity bonding and transactions with affiliates.
Specific Information regarding the Independent General Partners:
Tommy L. Gleason, Jr., 54, has been an Independent General Partner of
the Partnership since February 1990. He is also an independent general
partner of Community Investment Partners II, L.P., a business development
company. Mr. Gleason is the Chairman and Chief Executive Officer of Galaxy
Systems Management, Inc., the general Partner of Galaxy Telecom, L.P.,
which is involved in management of cable television systems located in
sixteen states and serving approximately 175,000 subscribers. Mr. Gleason
owns 4,000 Units.
E. Stanley Kroenke, 52, has served as an Independent General Partner
of the Partnership since February 1990. He is also an independent general
partner of Community Investment Partners II, L.P., a business development
company. Mr. Kroenke leads a company that is a national investor,
developer, and owner of commercial real estate. The company is a developer
and owner of numerous shopping centers, office buildings and apartment
projects around the country. Mr. Kroenke is co-owner of the St. Louis Rams
National Football League franchise. He serves as a member of the board of
directors of Wal-Mart Stores, Inc., Bentonville, Arkansas; Central
Bancompany, Jefferson City, Missouri; and Boone County National Bank,
Columbia, Missouri. He is a trustee of the College of the Ozarks in Point
Lookout, Missouri. He also serves on the boards of the Greater St. Louis
Area Council Boy Scouts of America and the St. Louis Art Museum. Mr.
Kroenke owns 4,000 Units.
CIP Management, L.P., LLLP, (the "Managing General Partner") is the
Managing General Partner of Community Investment Partners, L.P. The
Managing General Partner is also managing general partner of Community
Investment Partners II, L.P. and Community Investment Partners III L.P.,
LLLP, which are also business development companies. The General Partners
of the Managing General Partner are CIP Management, Inc., a Missouri
corporation and a wholly-owned subsidiary of Edward D. Jones & Co., L.P.,
and Daniel A. Burkhardt.
24
<PAGE>
<PAGE>
The Directors and Officers of CIP Management, Inc. are as follows:
Daniel A. Burkhardt, 52, President, Treasurer and Director of CIP
Management, Inc. since October 1989 and general partner of CIP Management,
L.P., LLLP since February 1990. He is a general partner of The Jones
Financial Companies, L.L.L.P., the parent company of Edward D. Jones & Co.,
L.P. where he has specialized in investment banking and structuring
investments since 1980. He is also a director of St. Joseph Light & Power
Co. and SEMCO Energy, Inc. Mr. Burkhardt is the beneficial owner of 2,105
Units.
Ray L. Robbins, Jr., 55, Vice President and Director of CIP
Management, Inc. since October 1989. He is a general partner of The Jones
Financial Companies, L.L.L.P., the parent company of Edward D. Jones & Co.,
L.P., where he has specialized in securities analysis since 1984, and where
he was responsible for municipal bond transactions from 1975 to 1983. Mr.
Robbins is Co-Chairman of the Edward D. Jones & Co., L.P. Investment Policy
Committee. Mr. Robbins is a beneficial owner of 2,000 Units.
Marilyn A. Gaffney, 41, Secretary of CIP Management, Inc. since
October 1989. She is a Limited Partner of The Jones Financial Companies,
L.L.L.P., the parent company of Edward D. Jones & Co., L.P., where she has
been a senior investment adviser in investment banking since 1980. Ms.
Gaffney is the beneficial owner of 200 Units.
Item 11. EXECUTIVE COMPENSATION
The information set forth under the caption "Partnership
Distributions and Allocations" in the Prospectus of the Partnership dated
March 12, 1990, filed with the Securities and Exchange Commission pursuant
to Rule 497(b) under the Securities Act of 1933, is incorporated herein by
reference.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The information concerning the security ownership of the General
Partner, Independent General Partners and the Officers and Directors of CIP
Management, Inc., described in Items 1 and 10, is herein incorporated by
reference.
As of March 15, 2000, the following parties are known by the
Partnership to be the beneficial owners of more than 5% of the Units.
<TABLE>
<CAPTION>
Amount of
Beneficial % of Limited % of General
Ownership Partnership Partnership
Name of Units Capital Capital
---- -----------------------------------------
<S> <C> <C> <C>
Mid-American Capital Co. 10,000 11.39% -
Richard P. Kiphart 4,590 5.23%
CIP Management L.P., LLLP 19,800 - 99%
</TABLE>
The Partnership is not aware of any arrangement which may, at a
subsequent date, result in a change of control of the Partnership.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Certain relationships and related transactions, described in Item 10,
are herein incorporated by reference.
25
<PAGE>
<PAGE>
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
a. The following documents are filed as part of this report:
1. Financial Statements:
--------------------
See Index to Financial Statements and Supplementary Data
contained in Item 8 of this Form 10-K.
2. Financial Statement Schedules:
-----------------------------
All financial statement schedules are omitted because they are
not applicable or the required information is included in
the balance sheet or notes thereto.
3. Exhibits:
--------
(3) Amended and Restated Certificate and Agreement of Limited
Partnership dated as of March 29, 1990.
(4) Form of Unit Certificate.<F*>
(10) Management Agreement dated March 28, 1990, between the
Partnership and CIP Management, L.P., LLLP<F**>
(28) Prospectus of the Partnership dated March 12, 1990, filed
with the Securities and Exchange Commission in
connection with Registration Statement No. 33-31649
on Form N-2 under the Securities Act of 1933.<F***>
[FN]
<F*> Incorporated by reference to Exhibit A of the Prospectus
of the Partnership dated March 12, 1990 filed with
the Securities and Exchange Commission pursuant to
Rule 497(b) under the Securities Act of 1933.
<F**> Incorporated by reference to the Partnership's Proxy
Statement filed with the Securities Exchange
Commission on March 11, 1991.
<F***>Incorporated by reference to the Partnership's
Registration Statement No. 33-31649 on Form N-2
under the Securities Act of 1933.
b. A report on Form 8-K was filed on December 10, 1999, reporting
the disposition of the publicly traded investments. No
financial statements were filed with the report.
c. Exhibits filed as part of this report are included in Item (14)
(a)(3) above.
d. All financial statement schedules are omitted because they are
not applicable or the required information is included in the
balance sheet or notes thereto.
26
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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, on this
24th day of March, 2000.
Community Investment Partners, L.P.
By: CIP Management, L.P., LLLP, its
Managing General Partner
By: CIP Management, Inc., its
Managing General Partner
/s/ Daniel A. Burkhardt, President
---------------------------------------
By: Daniel A. Burkhardt, President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated.
/s/ Daniel A. Burkhardt General Partner of CIP Management
- ----------------------------- L.P., LLLP, President, Treasurer and
Daniel A. Burkhardt Director of CIP Management, Inc.
/s/ Ray L. Robbins Vice President and Director of CIP
- ----------------------------- Management, Inc.
Ray L. Robbins
/s/ Tommy L. Gleason, Jr. Individual General Partner,
- ----------------------------- Community Investment Partners, L.P.
Tommy L. Gleason, Jr.
/s/ E. Stanley Kroenke Individual General Partner,
- ----------------------------- Community Investment Partners, L.P.
E. Stanley Kroenke
27
<PAGE>
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description of Exhibit Page
- ------- ---------------------- ----
(3) Amended and Restated Certificate and
Agreement of Limited Partnership dated
as of March 29, 1990 <F*>
(4) Form of Unit Certificate <F*>
(10) Management Agreement dated March 28, 1990,
between the Partnership and CIP Management,
L.P., LLLP <F*>
(28) Prospectus of the Partnership dated March 12,
1990, filed with the Securities and Exchange
Commission in connection with Registration
Statement No. 33-31649 on Form N-2 under the
Securities Act of 1933 <F*>
[FN]
- -------------
<F*>Incorporated by reference
28
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements for Community Investment Partners, L.P. for the
year ended December 31, 1999 and is qualified in its entirety by reference
to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 0
<RECEIVABLES> 108,300
<ASSETS-OTHER> 132,539
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 240,839
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 15,234
<TOTAL-LIABILITIES> 15,234
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 107,820
<SHARES-COMMON-PRIOR> 107,820
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 225,605
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 322,013
<APPREC-INCREASE-CURRENT> 173,482
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 42,339
<AVERAGE-NET-ASSETS> 375,654
<PER-SHARE-NAV-BEGIN> 4.87
<PER-SHARE-NII> 4.22
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 7
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 2.09
<EXPENSE-RATIO> 0
</TABLE>
