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 quarterly period ended September 29, 1999
OR
[ ] 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: 0-24600
American Tax Credit Trust, a Delaware statutory business trust
Series I
(Exact name of Registrant as specified in its charter)
Delaware 06-6385350
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Richman American Credit Corp.
599 West Putnam Avenue, 3rd Floor
Greenwich, Connecticut 06830
- --------------------------------------- ---------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 869-0900
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 filing requirements
for the past 90 days.
Yes X No .
<PAGE>
AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements
Table of Contents Page
Balance Sheets.................................................................3
Statements of Operations.......................................................4
Statements of Cash Flows.......................................................5
Notes to Financial Statements..................................................7
<PAGE>
<TABLE>
<CAPTION>
AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
BALANCE SHEETS
(UNAUDITED)
September 29, March 30,
Notes 1999 1999
------- -------------- ------------
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents $ 994,636 $ 937,143
Restricted cash 3 124,380 410,767
Investments in bonds available-for-sale 2 944,764 998,384
Investment in local partnerships 3 9,811,286 10,353,629
Interest receivable 15,533 15,726
-------------- ------------
$ 11,890,599 $ 12,715,649
============== ============
LIABILITIES AND OWNERS' EQUITY (DEFICIT)
Liabilities
Accounts payable and accrued expenses $ 12,600 $ 25,380
Payable to manager 519,966 473,920
Capital contributions payable 3 76,800 366,617
Interest payable 3 47,580 44,150
-------------- ------------
656,946 910,067
-------------- ------------
Commitments and contingencies 3
Owners' equity (deficit)
Manager (51,101) (45,900)
Beneficial owners (18,654 units of beneficial ownership interest
outstanding) 11,329,197 11,844,092
Accumulated other comprehensive income (loss), net 2 (44,443) 7,390
-------------- ------------
11,233,653 11,805,582
-------------- ------------
$ 11,890,599 $ 12,715,64
============== ============
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Six Months Three Months Six Months
Ended Ended Ended Ended
September 29, September 29, September 29, September 29,
Notes 1999 1999 1998 1998
------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
REVENUE
Interest $ 28,477 $ 56,562 $ 35,143 $ 70,385
------------ ------------ ------------ -----------
TOTAL REVENUE 28,477 56,562 35,143 70,385
------------ ------------ ------------ -----------
EXPENSES
Management fee 48,035 96,046 48,060 96,120
Professional fees 6,758 12,178 6,553 13,075
Printing, postage and other 3,388 6,903 2,120 7,766
Amortization 3,750 7,500
------------ ----------- ----------- -----------
TOTAL EXPENSES 58,181 115,127 60,483 124,461
------------ ----------- ----------- -----------
Loss from operations (29,704) (58,565) (25,340) (54,076)
Equity in loss of investment in local
partnerships 3 (263,967) (461,531) (188,942) (445,517)
------------ ----------- ----------- -----------
NET LOSS (293,671) (520,096) (214,282) (499,593)
Other comprehensive income (loss) 2 (34,757) (51,833) 25,645 32,571
------------ ----------- ----------- -----------
COMPREHENSIVE LOSS $ (328,428) $ (571,929) $ (188,637) $ (467,022)
============ =========== =========== ===========
NET LOSS ATTRIBUTABLE TO
Manager $ (2,937) $ (5,201) $ (2,143) $ (4,996)
Beneficial owners (290,734) (514,895) (212,139) (494,597)
------------ ----------- ------------ -----------
$ (293,671) $ (520,096) $ (214,282) $ (499,593)
============ =========== ============ ===========
NET LOSS per unit of beneficial
ownership interest (18,654 units of
beneficial ownership interest) $ (15.58) $ (27.60) $ (11.37) $ (26.51)
============ =========== ============ ===========
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED SEPTEMBER 29, 1999 AND 1998
(UNAUDITED)
1999 1998
----------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Interest received $ 61,972 $ 76,050
Cash paid for
management fee (50,000) (50,000)
professional fees (23,458) (23,635)
printing, postage and other expenses (8,403) (7,266)
----------- ----------
Net cash used in operating activities (19,889) (4,851)
----------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Cash distributions from local partnerships 61,635 99,497
Transfer from restricted cash 286,387 149,529
Investment in local partnerships (270,640) (153,216)
----------- ----------
Net cash provided by investing activities 77,382 95,810
----------- ----------
Net increase in cash and cash equivalents 57,493 90,959
Cash and cash equivalents at beginning of period 937,143 837,174
----------- ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 994,636 $ 928,133
=========== ==========
SIGNIFICANT NON-CASH INVESTING ACTIVITIES
Unrealized gain (loss) on investments in bonds available-for-sale, net $ (51,833) $ 32,571
=========== ==========
Reduction in capital contributions payable $ (19,177)
===========
See reconciliation of net loss to net cash used in operating activities on
page 6.
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
STATEMENTS OF CASH FLOWS - (Continued)
SIX MONTHS ENDED SEPTEMBER 29, 1999 AND 1998
(UNAUDITED)
1999 1998
---------- ----------
<S> <C> <C>
RECONCILIATION OF NET LOSS TO NET CASH USED IN OPERATING ACTIVITIES
Net loss $ (520,096) $ (499,593)
Adjustments to reconcile net loss to net cash used in operating activities
Equity in loss of investment in local partnerships 461,531 445,517
Amortization expense 7,500
Amortization of net premium on investments in bonds 1,787 1,787
Decrease in interest receivable 193 191
Decrease in accounts payable and accrued expenses (12,780) (10,060)
Increase in payable to manager 46,046 46,120
Increase in interest payable 3,430 3,687
---------- ----------
NET CASH USED IN OPERATING ACTIVITIES $ (19,889) $ (4,851)
========== ==========
</TABLE>
See Notes to Financial Statements.
<PAGE>
AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 29, 1999
(UNAUDITED)
1. Basis of Presentation
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information. They do not include all information and footnotes required by
generally accepted accounting principles for complete financial statements. The
results of operations are impacted significantly by the combined results of
operations of the Local Partnerships, which are provided by the Local
Partnerships on an unaudited basis during interim periods. Accordingly, the
accompanying financial statements are dependent on such unaudited information.
In the opinion of the Manager, the financial statements include all adjustments
necessary to present fairly the financial position as of September 29, 1999 and
the results of operations and cash flows for the interim periods presented. All
adjustments are of a normal recurring nature. The results of operations for the
three and six months ended September 29, 1999 are not necessarily indicative of
the results that may be expected for the entire year.
2. Investments in Bonds Available-For-Sale
As of September 29, 1999, certain information concerning investments in
bonds available-for-sale is as follows:
<TABLE>
<CAPTION>
Gross Gross
Amortized unrealized unrealized Estimated
Description and maturity cost gains losses fair value
------------------------ --------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
Corporate debt securities
After one year through five years $ 98,956 $ 483 $ -- $ 99,439
After five years through ten years 688,121 -- (30,085) 658,036
After ten years 202,130 -- (14,841) 187,289
--------- ----------- ------------ -----------
$ 989,207 $ 483 $ (44,926) $ 944,764
========= =========== ============ ===========
</TABLE>
<PAGE>
AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
NOTES TO FINANCIAL STATEMENTS - (Continued)
SEPTEMBER 29, 1999
(UNAUDITED)
3. Investment in Local Partnerships
The Trust owns a 98.9%-99% limited partnership interest in ten Local
Partnerships and has committed to make capital contribution payments in the
aggregate amount of $14,741,864, of which the Trust has paid $14,665,064
and $76,800 is outstanding as of September 29, 1999. Restricted cash in the
accompanying balance sheet as of September 29, 1999 represents such
outstanding capital contribution along with accrued interest of $47,580 on
an outstanding capital contribution. The outstanding capital contribution
is payable upon a certain Local Partnership's satisfaction of specified
conditions related to operations. As of June 30, 1999, the Local
Partnerships have outstanding mortgage loans payable totaling approximately
$22,540,000 and accrued interest payable on such loans totaling
approximately $1,103,000, which are secured by security interests and liens
common to mortgage loans on the Local Partnerships' real property and other
assets.
For the six months ended September 29, 1999, the investment in local
partnerships activity consists of the following:
<TABLE>
<S> <C>
Investment in local partnerships as of March 30, 1999 $ 10,353,629
Reduction in capital contributions payable (19,177)
Equity in loss of investment in local partnerships (461,531)
Cash distributions received from Local Partnerships (61,635)
-------------
Investment in local partnerships as of September 29, 1999 $ 9,811,286
=============
</TABLE>
The combined unaudited balance sheets of the Local Partnerships as of June
30, 1999 and December 31, 1998 and the combined unaudited statements of
operations of the Local Partnerships for the three and six month periods
ended June 30, 1999 and 1998 are reflected on pages 9 and 10, respectively.
<PAGE>
<TABLE>
<CAPTION>
AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
NOTES TO FINANCIAL STATEMENTS - (Continued)
SEPTEMBER 29, 1999
(UNAUDITED)
3. Investment in Local Partnerships (continued)
The combined balance sheets of the Local Partnerships as of June 30, 1999
and December 31, 1998 are as follows:
June 30, December 31,
1999 1998
--------------- ----------------
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 789,769 $ 487,409
Rents receivable 126,816 35,870
Capital contributions receivable 76,800 366,617
Escrow deposits and reserves 1,536,649 1,538,075
Land 1,267,153 1,267,153
Buildings and improvements (net of accumulated depreciation of $6,211,556
and $5,525,125) 30,787,980 31,464,189
Intangible assets (net of accumulated amortization of $155,541
and $140,093) 338,099 353,547
Other 276,785 257,139
--------------- ----------------
$ 35,200,051 $ 35,769,999
=============== ================
LIABILITIES AND PARTNERS' EQUITY
Liabilities
Accounts payable and accrued expenses $ 359,234 $ 311,095
Due to related parties 999,300 1,078,506
Mortgage loans 22,540,306 22,720,227
Notes payable 100,000 100,000
Accrued interest 1,102,732 979,948
Other 155,332 147,844
--------------- ---------------
25,256,904 25,337,620
Partners' equity
American Tax Credit Trust, Series I
Capital contributions, net of distributions (includes receivable of
$76,800 and $366,617) 14,511,279 14,534,206
Cumulative loss (4,639,108) (4,177,577)
--------------- ---------------
9,872,171 10,356,629
General partners and other limited partners --------------- ---------------
Capital contributions, net of distributions 341,718 341,718
Cumulative loss (270,742) (265,968)
--------------- ---------------
70,976 75,750
--------------- ---------------
9,943,147 10,432,379
--------------- ---------------
$ 35,200,051 $ 35,769,999
=============== ===============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
NOTES TO FINANCIAL STATEMENTS - (Continued)
SEPTEMBER 29, 1999
(UNAUDITED)
3. Investment in Local Partnerships (continued)
The combined statements of operations of the Local Partnerships for the
three and six month periods ended June 30, 1999 and 1998 are as follows:
Three Months Six Months Three Months Six Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
1999 1999 1998 1998
-------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
REVENUE
Rental $ 950,563 $ 1,909,531 $ 928,061 $ 1,864,897
Interest and other 35,154 69,686 27,411 66,214
-------------- ------------ ------------- ------------
TOTAL REVENUE 985,717 1,979,217 955,472 1,931,111
-------------- ------------ ------------- ------------
EXPENSES
Administrative 181,795 340,015 162,383 327,955
Utilities 132,969 258,077 117,095 230,449
Operating, maintenance and other 224,831 426,153 191,446 379,575
Taxes and insurance 124,114 246,733 100,695 234,469
Financial (including amortization of
$7,525, $15,448, $8,839 and $17,679) 244,677 488,113 226,763 512,822
Depreciation 344,021 686,431 347,968 695,940
-------------- ------------ ------------- ------------
TOTAL EXPENSES 1,252,407 2,445,522 1,146,350 2,381,210
-------------- ------------ ------------- ------------
NET LOSS $ (266,690) $ (466,305) $ (190,878) $ (450,099)
============== ============ ============= ============
NET LOSS ATTRIBUTABLE TO
American Tax Credit Trust, Series I $ (263,967) $ (461,531) $ (188,942) $ (445,517)
General partners and other limited
partners (2,723) (4,774) (1,936) (4,582)
-------------- ------------ ------------- ------------
$ (266,690) $ (466,305) $ (190,878) $ (450,099)
============== ============ ============= =============
</TABLE>
The combined results of operations of the Local Partnerships for the three
and six month periods ended June 30, 1999 are not necessarily indicative of
the results that may be expected for an entire operating period.
4. Additional Information
Additional information, including the audited March 30, 1999 Financial
Statements and the Organization, Purpose and Summary of Significant
Accounting Policies, is included in the Trust's Annual Report on Form 10-K
for the fiscal year ended March 30, 1999 on file with the Securities and
Exchange Commission.
<PAGE>
AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Material Changes in Financial Condition
As of September 29, 1999, American Tax Credit Trust (the "Registrant") has
not experienced a significant change in financial condition as compared to March
30, 1999. Principal changes in assets are comprised of periodic transactions and
adjustments and anticipated equity in loss from operations of the local
partnerships (the "Local Partnerships") which own low-income multifamily
residential complexes (the "Properties") which qualify for the low-income tax
credit in accordance with Section 42 of the Internal Revenue Code (the
"Low-income Tax Credit"). During the six months ended September 29, 1999,
Registrant received cash from interest revenue and distributions from Local
Partnerships and utilized cash for operating expenses and investments in Local
Partnerships. Cash and cash equivalents and investments in bonds
available-for-sale increased, in the aggregate, by approximately $4,000 during
the six months ended September 29, 1999 (which is net of a net unrealized loss
on investments in bonds of approximately $52,000 and the amortization of net
premium on investments in bonds of approximately $2,000), and restricted cash
decreased by approximately $286,000 primarily as a result of a capital
contribution paid to a Local Partnership. Notwithstanding circumstances that may
arise in connection with the Properties, Registrant does not expect to realize
significant gains or losses on its investments in bonds, if any. During the six
months ended September 29, 1999, the investment in local partnerships decreased
as a result of Registrant's equity in the Local Partnerships' net loss for the
six months ended June 30, 1999 of $461,531, a downward adjustment to a capital
contribution obligation of $19,177 and cash distributions received from Local
Partnerships of $61,635. Payable to manager in the accompanying balance sheet as
of September 29, 1999 represents deferred management fees.
Results of Operations
Registrant's operating results are dependent upon the operating results of the
Local Partnerships and are significantly impacted by the Local Partnerships'
policies. In addition, the operating results herein are not necessarily the same
for tax reporting. Registrant accounts for its investment in local partnerships
in accordance with the equity method of accounting. Accordingly, the investment
is carried at cost, which includes capital contributions payable, and is
adjusted for Registrant's share of each Local Partnership's results of
operations and by cash distributions received. Equity in loss of each investment
in Local Partnership allocated to Registrant is recognized to the extent of
Registrant's investment balance in each Local Partnership. Equity in loss in
excess of Registrant's investment balance in a Local Partnership is allocated to
other partners' capital in any such Local Partnership. As a result, the reported
equity in loss of investment in local partnerships is expected to decrease as
Registrant's investment balances in the respective Local Partnerships become
zero. As of September 29, 1999, no investment in any Local Partnership has
reached a zero balance.
Registrant's operations for the three months ended September 29, 1999 and 1998
resulted in net losses of $293,671 and $214,282, respectively. The increase in
net loss is primarily attributable to an increase in equity in loss of
investment in local partnerships of approximately $75,000. Other comprehensive
income (loss) for the three months ended September 29, 1999 and 1998 resulted
from a net unrealized gain (loss) on investments in bonds available-for-sale of
($34,757) and $25,645, respectively.
The Local Partnerships' net loss of approximately $267,000 for the three months
ended June 30, 1999 was attributable to rental and other revenue of
approximately $986,000, exceeded by operating and interest expense (including
interest on non-mandatory debt) of approximately $901,000 and approximately
$352,000 of depreciation and amortization expense. The Local Partnerships' net
loss of approximately $191,000 for the three months ended June 30, 1998 was
attributable to rental and other revenue of approximately $955,000, exceeded by
operating and interest expense (including interest on non-mandatory debt) of
approximately $789,000 and approximately $357,000 of depreciation and
amortization expense. The results of operations of the Local Partnerships for
the three months ended June 30, 1999 are not necessarily indicative of the
results that may be expected in future periods.
Registrant's operations for the six months ended September 29, 1999 and 1998
resulted in net losses of $520,096 and $499,593, respectively. The increase in
net loss is primarily attributable to an increase in equity in loss of
investment in local partnerships of approximately $16,000 and a decrease in
interest income of approximately $14,000, partially offset by a
<PAGE>
AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)
decrease in amortization expense of approximately $8,000. Other comprehensive
income (loss) for the six months ended September 29, 1999 and 1998 resulted from
a net unrealized gain (loss) on investments in bonds available-for-sale of
($51,833) and $32,571, respectively.
The Local Partnerships' net loss of approximately $466,000 for the six months
ended June 30, 1999 was attributable to rental and other revenue of
approximately $1,979,000, exceeded by operating and interest expense (including
interest on non-mandatory debt) of approximately $1,743,000 and approximately
$702,000 of depreciation and amortization expense. The Local Partnerships' net
loss of approximately $450,000 for the six months ended June 30, 1998 was
attributable to rental and other revenue of approximately $1,931,000, exceeded
by operating and interest expense (including interest on non-mandatory debt) of
approximately $1,667,000 and approximately $714,000 of depreciation and
amortization expense. The results of operations of the Local Partnerships for
the six months ended June 30, 1999 are not necessarily indicative of the results
that may be expected in future periods.
Local Partnership Matters
Registrant's primary objective is to provide Low-income Tax Credits to
Beneficial Owners generally over a ten year period. The required holding period
of each Property, in order to avoid Low-income Tax Credit recapture, is fifteen
years from the year in which the Low-income Tax Credits commence on the last
building of the Property (the "Compliance Period"). In addition, certain of the
Local Partnerships have entered into agreements with the relevant state tax
credit agencies whereby the Local Partnerships must maintain the low-income
nature of the Properties for a period which exceeds the Compliance Period,
regardless of any sale of the Properties by the Local Partnerships after the
Compliance Period. The Properties must satisfy various requirements including
rent restrictions and tenant income limitations (the "Low-income Tax Credit
Requirements") in order to maintain eligibility for the recognition of the
Low-income Tax Credit at all times during the Compliance Period. Once a Local
Partnership has become eligible for the Low-income Tax Credit, it may lose such
eligibility and suffer an event of recapture if its Property fails to remain in
compliance with the Low-income Tax Credit Requirements. Through December 31,
1998, none of the Local Partnerships have suffered an event of recapture of
Low-income Tax Credits.
The Properties are principally comprised of subsidized and leveraged low-income
multifamily residential complexes located throughout the United States. Certain
of the Local Partnerships receive rental subsidy payments, including payments
under Section 8 of Title II of the Housing and Community Development Act of 1974
("Section 8"). The subsidy agreements expire at various times during and after
the Compliance Periods of the Local Partnerships. In October 1997, Congress
passed the Multifamily Assisted Housing and Reform and Affordability Act,
whereby the United States Department of Housing and Urban Development ("HUD")
was given the authority to renew certain project based Section 8 contracts
expiring during HUD's fiscal year 1998, where requested by an owner, for an
additional one year term generally at or below existing rent levels, subject to
certain guidelines. In October 1998, HUD issued a directive related to project
based Section 8 contracts expiring during HUD's fiscal year 1999 which defines
owners' notification responsibilities, advises owners of project based Section 8
properties of what their options are regarding the renewal of Section 8
contracts, provides guidance and procedures to owners, management agents,
contract administrators and HUD staff on renewing Section 8 contracts, provides
guidance on setting renewal rents and handling renewal rent increases and
provides the requirements and procedures for opting-out of a Section 8 project
based contract. Registrant cannot reasonably predict legislative initiatives and
governmental budget negotiations, the outcome of which could result in a
reduction in funds available for the various federal and state administered
housing programs including the Section 8 program. Such changes could adversely
affect the future net operating income and debt structure of any or all Local
Partnerships currently receiving such subsidy or similar subsidies. Three Local
Partnerships' Section 8 contracts are currently subject to annual year-to-year
renewals.
The Local Partnerships have various financing structures which include (i)
required debt service payments ("Mandatory Debt Service") and (ii) debt service
payments which are payable only from available cash flow subject to the terms
and conditions of the notes, which may be subject to specific laws, regulations
and agreements with appropriate federal and state agencies ("Non-Mandatory Debt
Service or Interest"). In the event rents are not sufficient to cover operating
expenses, Mandatory Debt Service requirements and other charges, certain general
partners of the Local Partnerships (the "Local General Partners") are
<PAGE>
AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)
obligated to provide advances to cover deficits for a certain period of time up
to certain amounts (the "Deficit Guarantee"). A Local General Partner's funding
of such Deficit Guarantee is dependent on its liquidity or ability to borrow the
required funds. During the six months ended June 30, 1999, revenue from
operations of the Local Partnerships have generally been sufficient to cover
operating expenses and Mandatory Debt Service. All of the Local Partnerships are
effectively operating at or near break even levels, although certain Local
Partnerships' operating information reflects operating deficits that do not
represent cash deficits due to their mortgage and financing structure and the
required deferral of property management fees.
Year 2000 Compliance
The inability of computers, software and other equipment utilizing
microprocessors to recognize and properly process data fields containing a two
digit year is commonly referred to as the year 2000 compliance ("Y2K") issue. As
the year 2000 approaches, such systems may be unable to accurately process
certain data-based information. Many businesses may need to upgrade existing
systems or purchase new ones to correct the Y2K issue. Registrant has performed
an assessment of its computer software and hardware and believes it has made the
necessary upgrades in an effort to ensure compliance. However, there can be no
assurance that the systems of other entities on which Registrant relies,
including the Local Partnerships which report to Registrant on a periodic basis
for the purpose of Registrant's reporting to its investors, will be timely
converted. Registrant has corresponded with the Local Partnerships to ensure
their awareness of the Y2K issue and has requested details regarding their
efforts to ensure compliance. The total cost associated with Y2K implementation
is not expected to materially impact Registrant's financial position or results
of operations in any given year. However, there can be no assurance that a
failure to convert by Registrant or another entity would not have a material
adverse impact on Registrant.
Item 3. Quantitative and Qualitative Disclosure About Market Risk
Registrant has invested a significant portion of its working capital
reserves in corporate bonds. The market value of such investments is subject to
fluctuation based upon changes in interest rates relative to each investment's
maturity date. Since Registrant's investments in bonds have various maturity
dates through 2016, the value of such investments may be adversely impacted in
an environment of rising interest rates in the event Registrant decides to
liquidate any such investment prior to its maturity. Although Registrant may
utilize reserves to assist an underperforming Property, it otherwise intends to
hold such investments to their respective maturities. Therefore, Registrant does
not anticipate any material adverse impact in connection with such investments.
The Properties are generally located where there is a demand for low-income
housing. Accordingly, there is a significant likelihood that new low-income
properties could be built in the general vicinity of the respective Properties.
As a result, the respective Properties' ability to operate at high occupancy
levels is subject to competition from newly built low-income housing.
<PAGE>
AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
None
<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.
AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
By: Richman American Credit Corp.,
The Manager
Dated: November 15, 1999 /s/ Richard Paul Richman
by: Richard Paul Richman
President, Chief Executive
Officer and Director of the Manager
Dated: November 15, 1999 /s/ Neal Ludeke
by: Neal Ludeke
Vice President and
Treasurer of the Manager
(Principal Financial and Accounting
Officer of The Trust)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information extracted from
the quarter ended September 29, 1999 Form 10Q Balance Sheets and
Statements of Operations and is qualified in its entirety by reference
to such financial statements.
</LEGEND>
<CIK> 0000897315
<NAME> American Tax Credit Trust
<MULTIPLIER> 1,000
<CURRENCY> US Dollars
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-30-2000
<PERIOD-START> MAR-30-1999
<PERIOD-END> SEP-29-1999
<EXCHANGE-RATE> 1.00
<CASH> 995
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<TOTAL-ASSETS> 11,891
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<BONDS> 0
0
0
<COMMON> 0
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<TOTAL-LIABILITY-AND-EQUITY> 11,891
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<CGS> 0
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<INCOME-PRETAX> (520)
<INCOME-TAX> 0
<INCOME-CONTINUING> (520)
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<NET-INCOME> (520)
<EPS-BASIC> (27.60)
<EPS-DILUTED> 0
</TABLE>
