UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For The Quarter Ended June 30, 1996 Commission File Number
0-20768
IDM Participating Mortgage Income Fund
A California Limited Partnership
--------------------------------
(Exact name of registrant as specified in its charter)
California 33-00430729
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One World Trade Center, Suite 1000, Long Beach, California 90831-1000
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (310) 498-0141
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 [ ] No [ X ]
Number of limited partnership interests outstanding as of June 30, 1996: 345,792
1
IDM PARTICIPATING MORTGAGE INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
Index
-----
Page No.
--------
Part I. Financial Information
Item 1. Financial Statements
Balance Sheets 3
Statements of Income 4
Statements of Cash Flows 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 7 - 8
Part II. Other Information
Item 5. Other Information 9
Item 6. Exhibits and Reports on Form 8-K 9
Signatures 9
2
IDM PARTICIPATING MORTGAGE INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
Part I. Financial Information
-----------------------------
Item 1. Financial Statements
Balance Sheets
June 30, 1996 December 31, 1995
------------- -----------------
Assets
------
Cash $ - $ -
Loans to affiliates (note 2):
Interest - -
Principal, less reserve for possible
losses of $7,896,000 at June
30, 1996 and December 31,
1995, respectively 3,800,000 3,800,000
---------- ----------
$ 3,800,000 $ 3,800,000
---------- ----------
Partners' Capital
-----------------
General partner $ 14,000 $ 14,000
Limited partners 3,786,000 3,786,000
----------- ----------
$ 3,800,000 $ 3,800,000
---------- ----------
See accompanying notes to financial statements.
3
<TABLE>
<CAPTION>
IDM PARTICIPATING MORTGAGE INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
Statements of Income
Six Months Ended Three Months Ended
JUNE 30 JUNE 30
----------------------------- ------------------------
<S> <C> <C> <C> <C>
1996 1995 1996 1995
----------- ----------- ------------ --------
Net Income (loss) - interest income $ - $ - $ - -
Provision for possible losses - - - -
Net income (loss) $ - $ - $ - $ -
=========== ========= ========= ========
Net income (loss) allocable to
limited partners $ - $ - $ - $ -
=========== ========= ========= ========
Average number of limited
partnership interests outstanding 345,792 345,792 345,792 345,792
=========== ========= ======== ========
Net income (loss) per limited
partnership interest $ - $ - $ - $ -
=========== ========= ========= ========
Distibutions per limited
partneship interest $ - $ - $ - $ -
=========== ========= ========= ========
</TABLE>
See accompanying notes to financial statements.
4
IDM PARTICIPATING MORTGAGE INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
Six Months Ended
June 30
--------------------------------
1996 1995
--------------- --------------
Cash flows from operating activities:
Net income (loss) ..................... $ -- $ --
Item not providing cash -
(Increase) decrease
in interest receivable .............. -- --
Provisions for possible losses ........ -- --
--------------- --------------
Net cash flow from operating activities -- --
--------------- --------------
Cash flows from investing activities:
Collections of loans from affiliates .. -- --
Loans made to affiliates .............. -- --
--------------- --------------
Net cash flow from investing activities -- --
--------------- --------------
Cash flow from financing activities:
Partner contributions ................. -- --
Distributions to partners ............. -- --
--------------- --------------
Net cash flow from financing activities -- --
--------------- --------------
Net cash flow ............................... $ -- $ --
--------------- --------------
See accompanying notes to financial statements.
5
IDM PARTICIPATING MORTGAGE INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
Note to Financial Statements
NOTE 1 - BASIS OF PRESENTATION
The accompanying financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Rule 10-01 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 considered necessary for a fair presentation have been
included.
6
IDM PARTICIPATING MORTGAGE INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
Item 2. Management's Discussion and Analysis Of Financial Condition and
Results of Operations
RESULTS OF OPERATIONS
IDM Participating Mortgage Income Fund, a California Limited Partnership (the
"Partnership" or "Registrant"), is a California limited partnership formed in
1990 under the California Revised Limited Partnership Act to make participating
loans to affiliated companies and to other parties ("Borrowers") as determined
by IDM Participating Mortgage Income Fund General Partners' Co. (the "General
Partner"). The Partnership commenced its offering of Limited Partnership
Interests to the public on November 28, 1990, and as of July 10, 1991 (the date
the offering was completed) the offering had sold 345,792. The Partnership is an
affiliate of IDM Corporation ("IDM"), a California corporation, together with
certain affiliates, reorganized under Chapter 11 of the United States Bankruptcy
Code effective on March 22, 1993.
The maximum amount of the offering was $80,000,000 for the intended 800,000
Units of limited partnership interests (with option to increase to
$100,000,000). The Units were offered on a "best efforts" basis by IDM
Securities Corporation, an affiliate of the General Partner and other National
Association of Securities Dealers, Inc. broker-dealer members. The 345,792 Units
of limited partnership Interests sold for cash resulted in proceeds of
$35,012,237.
IDM and each of its affiliates have been impacted by the current economic
recession, especially the decline in real estate values, the state of disarray
in the savings and loan industry and the limited availability of commercial real
estate loans from domestic and international banks. These conditions limited
IDM's access to funding for various projects and subsequently, IDM and certain
of its affiliates, including the Partnership, suspended distributions to
investors. Thereafter, specifically on July 10, 1992, IDM and certain affiliated
entities filed for protection under Chapter 11 of the United States Bankruptcy
Code. The Chapter 11 filing allowed IDM as debtor in possession to continue its
business operations without interruption under the supervision of the bankruptcy
court. On March 10, 1993, an order confirming the Reorganization Plan of IDM and
certain affiliated debtors (the "Plan") was entered by the United States
Bankruptcy Court for the Central District of California, Northern Division. The
Plan became effective on March 22, 1993.
The Chapter 11 proceedings stayed the Borrowers' payment of interest that would
otherwise have been received by the Partnership. Therefore, interest income,
which is earned on funds loaned and bank deposits, decreased in 1992 due to the
fact that no interest was accrued on the loans after July 10, 1992, the date on
which IDM and affiliates filed for protection under Chapter 11 of the United
States Bankruptcy Code.
7
IDM PARTICIPATING MORTGAGE INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
Item 2. Management's Discussion and Analysis Of Financial Condition and
Results of Operations (Cont.)
LIQUIDITY AND CAPITAL RESOURCES
As restructured, collection of the notes held by the Partnership is dependent
upon both the value of the property securing the loans and the continuing credit
of the applicable Borrowers. As was the case prior to the bankruptcy of IDM and
its affiliated debtor entities, any remaining secured loan is non-recourse, and
if there is a default on the loan, the Partnership will only have recourse
against the property and not any Borrower. Further, to the extent there is any
senior secured debt on the property, and in a foreclosure in the event of a
default to the senior debt, there is a risk that the Partnership might not
recover the amount owing or any portion thereof.
LOANS TO AFFILIATES
The reserve for possible losses is established by provisions charged to expense.
The reserve is based on management's assessment of the loans outstanding, as
well as on prevailing and anticipated economic conditions. The valuation of the
loans outstanding depends on the valuation of the properties securing such
loans. The estimation process involved in the determination of net realizable
value is inherently uncertain since it requires estimates as to future events
and conditions. Such estimation process assumes the Borrowers' ability to
complete development and dispose of its real estate in the ordinary course of
business based on management's plans and intentions. Accordingly, the ultimate
net realizable values of the real estate is dependent upon future economic and
market conditions, the availability of financing, as well as other unpredictable
influences which may cause the ultimate realizations to be materially different
from the amounts presently estimated.
The Partnership has total secured debt of approximately $3,800,000 consisting of
loans to IDM for the Gramercy Villa project for $3,000,000 and for the Rancho
Valencia project for $800,000 and unsecured claims of $4,200,000. The unsecured
claims of $4,200,000 is the unsecured portion of the loan on the Gramercy
project.
8
IDM PARTICIPATING MORTGAGE INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
PART II. OTHER INFORMATION
Item 5. Other Information
The Partnership has effectively ceased active business operations and
will hold other assets -- specifically, the unsecured notes, if any,
and the secured notes, if any, received with respect to the various
projects in which the Partnership maintains a security interest --
solely for the purpose of the ultimate distribution to the partners.
Item 6. Exhibits and Report on Form 8-K
a. Exhibits
The following Exhibits are filed herewith pursuant to Rule 601 of
Regulation S-K.
Exhibit Number 27 - Financial Data Schedule
b. Report on Form 8-K - There were no reports filed on Form 8-K during
the quarter ended June 30, 1996.
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 as a duly
authorized officer of the registrant.
IDM Participating Mortgage Income Fund
A CALIFORNIA LIMITED PARTNERSHIP
(Registrant)
IDM Participating Mortgage Income Fund
General Partners Co.
general partner of the general partner
Date 8/5/96 by: /s/ MORRIS S. COHEN
Morris S. Cohen
President
9
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM IDM PARTICIPATING MORTGAGE INCOME FUND JUNE 30, 1996, FINANCIAL STATEMENTS
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,800,000
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 3,800,000
<TOTAL-LIABILITY-AND-EQUITY> 3,800,000
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
