FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(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 30, 1996
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: 33-91136
WNC HOUSING TAX CREDIT FUND V, L.P., Series 3 and Series 4
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
California 33-6163848 and 33-0701612
WNC HOUSING TAX CREDIT FUND V, L.P., Series 3 and Series 4
3158 Redhill Avenue, Suite 120, Costa Mesa, CA 92626
(714) 662-5565
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 ____
<PAGE>
Part I. Financial Information
Item 1. Financial Statements
Index
WNC HOUSING TAX CREDIT FUND V, L.P., Series 3 and Series 4
(A California Limited Partnership)
INDEX TO FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 1996
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements-Series 3
Balance Sheet, September 30, 1996 and
December 31, 1995 3
Statement of Operations For the Nine
Months Ended September 30, 1996 4
Statement of Partners' Equity For the
Nine Months Ended September 30, 1996 5
Statement of Cash Flows For the Nine
Months Ended September 30, 1996 6
Notes to Financial Statements 8
Item 1. Financial Statements-Series 4
Balance Sheet, September 30, 1996 13
Statement of Operations For the Period July 1, 1996
(date operations commenced) to September 30, 1996 14
Statement of Partners' Equity For the Period July 1, 1996
(date operations commenced) to September 30, 1996 15
Statement of Cash Flows For the Period July 1, 1996
(date operations commenced) to September 30, 1996 16
Notes to Financial Statements 18
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 23
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 28
Signatures 29
<PAGE>
Financial Statements-Series 3
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
BALANCE SHEETS
September 30, 1996 and December 31, 1995
1996 1995
---- ----
ASSETS
Cash and cash equivalents $ 3,492,424 $ 660,999
Cash in escrow 1,873,262
-
Subscriptions receivable - Note 7 484,000
-
Loans Receivable - Note 2 520,950 661,306
Investment in limited
partnerships - Note 3 12,869,575 1,046,532
Other assets 82,925 73
------ ------
$ 16,965,874 $ 4,726,172
=========== =========
LIABILITIES AND PARTNERS' EQUITY
Liabilities:
Payable to limited partnerships - Note 5 $ 3,694,365 $ 309,852
Accrued fees and expenses due to
general partner and affiliates - Note 4 124,939 570,137
-------- -------
3,819,304 879,989
---------- -------
Commitments and contingencies - Note 8
Partners equity (deficit):
General partner (21,475) (6,029)
Limited partners (25,000 units
authorized, 18,000 units issued
and outstanding) 13,168,045 3,852,212
----------- ---------
Total partners' equity 13,146,570 3,846,183
----------- ---------
$ 16,965,874 $ 4,726,172
=========== =========
UNAUDITED
See Accompanying Notes to Financial Statements
3
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
STATEMENT OF OPERATIONS
For the Three and Nine Months Ended September 30, 1996
Three Nine
Months Months
------ ------
Interest income $ 103,100 $ 139,604
Operating expenses:
Amortization 6,701 14,856
Asset management fees (Note 4) 12,375 37,125
Legal and accounting 3,492 5,356
Other 3,247
----------- -----
Total operating expenses 22,568 60,584
------- ------
Income (loss) from operations 80,532 79,020
Equity in loss from
limited partnerships (62,300) (107,500)
-------- ---------
Net income (loss) $ 18,232 $ (28,480)
======= ========
Net loss allocated to:
General partner $ 182 $ (285)
======== ========
Limited partners $ 18,050 (28,195)
======= ========
Net income (loss) per weighted limited
partner unit (17,998 and 12,006) $ 1.00 $ (2.35)
======== ======
UNAUDITED
See Accompanying Notes to Financial Statements
4
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
STATEMENT OF PARTNERS' EQUITY
For the Nine Months Ended September 30, 1996
General Limited
Partner Partner Total
------- ------- -----
Equity (deficit), December 31, 1995 $ (6,029) $3,852,212 $ 3,846,183
Capital contributions 13,064,985 13,064,985
Offering expenses (15,161) (1,500,957) (1,516,118)
Capital issued for notes receivable (2,220,000) (2,220,000)
Net loss for the nine months ended
September 30, 1996 (285) (28,195) (28,480)
----- -------- --------
Equity (deficit), September 30, 1996 $ (21,475) 13,168,045 13,146,570
========== ========== ==========
UNAUDITED
See Accompanying Notes to Financial Statements
5
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
STATEMENT OF CASH FLOWS
For the Nine Months Ended September 30, 1996
Cash flows used by operating activities:
Net loss $ (28,480)
Adjustments to reconcile net loss to net
cash used in operating activities:
Equity in loss of limited partnerships 107,500
Amortization 14,856
Asset management fee 37,125
Change in other assets (76,852)
Accrued fees and expense due to
general partner and affiliates (11,364)
--------
Net cash provided by operating activities 42,785
--------
Cash flows used by investing activities:
Investment in limited partnerships (5,797,296)
Acquisition fees (1,017,913)
Net cash used by investing activities (6,815,209)
-----------------
Cash flows provide by financing activities:
Capital contributions 11,328,985
Offering costs (1,725,136)
-----------------
Net cash provided by financing activities 9,603,849
---------
Net increase in cash and cash equivalents 2,831,425
Cash and cash equivalents, beginning of period 660,999
-------
Cash and cash equivalent, end of period $ 3,492,424
=========
UNAUDITED
See Accompanying Notes to Financial Statements
6
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., Series 3
(A California Limited Partnership)
STATEMENT OF CASH FLOWS(CONTINUED)
For the Nine Months Ended September 30, 1996
SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING AND INVESTING ACTIVITIES:
During the nine months ended September 30, 1996, the Partnership's payables to
limited partnerships; (in connection with its investments in limited
partnerships) (see Note 3) had non-cash transactions as follows:
Increases due to acquisition of limited partnership interests $11,292,434
Application of loans receivable to acquisitions (661,306)
Decreases due to various price adjuster provisions in the
respective limited partnership agreements (36,551)
Application of cash in escrow (1,873,262)
Application of advance from affiliate (60,456)
--------
Net non-cash adjustments to the Partnership's
payable to limited partnerships $8,660,858
==========
During the nine months ended September 30, 1996, the Partnership incurred, but
did not pay, $37,125 in management fees. (see Note 4 ).
UNAUDITED
See Accompanying Notes to Financial Statements
7
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., Series 3
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
- ------------
WNC Housing Tax Credit Fund, V, L.P., Series 3 (the "Partnership") was formed
under the California Revised Limited Partnership Act on March 28, 1995 and
commenced operations on October 23, 1995. The Partnership was formed to invest
primarily in other limited partnerships which will own and operate multi-family
housing complexes that will qualify for low income housing credits.
The information contained in the following notes to the financial statements is
condensed from that which would appear in the annual financial statements;
accordingly, the financial statements included herein should be reviewed in
conjunction with the financial statements and related notes thereto contained in
the Partnership's Annual Report for the year ended December 31, 1995.
In the opinion of the Partnership, the accompanying unaudited financial
statements contain all adjustments (consisting of only normal recurring
accruals) necessary to present fairly the financial position as of September 30,
1996 and changes in cash flows for the three months then ended. Accounting
measurements at interim dates inherently involve greater reliance on estimates
than at year end. The results of operations for the interim period presented are
not necessarily indicative of the results for the entire year.
The general partner of the Partnership is WNC Tax Credit Partners V, L.P. (the
"General Partner"), a California limited partnership. WNC & Associates, Inc. is
the general partner of the General Partner. Wilfred N. Cooper, Sr., through the
Cooper Revocable Trust, owns 70% of the outstanding stock of WNC & Associates,
Inc. John B. Lester, Jr. is the original limited partner of the Partnership and
owns, through the Lester Family Trust, 30% of the outstanding stock of WNC &
Associates, Inc.
Allocations Under the Terms of the Partnership Agreement
- --------------------------------------------------------
The General Partner has a 1% interest in operating profits and losses, taxable
income and loss and in cash available for distribution from the Partnership. The
limited partners will be allocated the remaining 99% of these items in
proportion to their respective investments.
After the limited partners have received sale or refinancing proceeds equal to
their capital contributions and their preferred return (as defined in the
Partnership's Agreement of Limited Partnership) and the general partner has
received a subordinated disposition fee any additional sale or refinancing
proceeds will be distributed 90% to the limited partners (in proportion to their
respective investments) and 10% to the General Partner.
8
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., Series 3
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS-CONTINUED
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Method of Accounting For Investment in Limited Partnerships
The Partnership accounts for its investments in limited partnerships using the
equity method of accounting, whereby the Partnership adjusts its investment
balance for its share of each limited partnership's results of operations and
for any distributions received. Costs incurred by the Partnership in acquiring
the investments in limited partnerships are capitalized as part of the
investment.
Losses from the limited partnerships will not be recognized to the extent that
the individual investment balance would be adjusted below zero.
Cash and Cash Equivalents
The Partnership considers all bank certificates of deposit with a maturity of
less than three months to be cash equivalents.
Offering Expenses
Offering expenses consist of underwriting commissions, legal fees, printing,
filing and recordation fees, and other costs incurred with selling limited
partnership interests in the Partnership. The General Partner is obligated to
pay all offering and organization costs in excess of 15% (including sales
commissions) of the total offering proceeds. Offering expenses are reflected as
a reduction of partners' capital.
Organization Costs
Organization costs will be amortized on the straight-line method over 60 months.
NOTE 2 - LOANS RECEIVABLE
Loans receivable represent amounts loaned by the Partnership to certain limited
partnerships in which the Partnership may invest. These loans will be applied
against the first capital contribution due if the Partnership ultimately
acquires a limited partnership interest. In the event that the Partnership does
not acquire a limited partnership interest, the loans are to be repaid with
interest with at a rate of prime plus 1% per annum (10.5 % at September
30,1996). Loans receivable of $661,306 at December 31, 1995 were applied to
capital contributions due for limited partnership interests acquired in February
1996. The $520,950 is due at September 30, 1996.
9
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., Series 3
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS-CONTINUED
NOTE 3 - INVESTMENT IN LIMITED PARTNERSHIPS
As of September 30, 1996, the Partnership had acquired limited partnership
interests in sixteen limited partnerships each of which owns one apartment
complex. As of September 30, 1996, construction and rehabilitation of seven of
the apartment complexes had been completed. The remaining nine have started
construction. The Partnership, as a limited partner, is a 99% owner and is
entitled to 99% of the operating profits and losses of the limited partnerships.
The following is a summary of the investment in limited partnerships and
reconciliation to the limited partnership accounts as of September 30, 1996 and
December 31, 1995:
1996 1995
---- ----
Investment Balance - Beginning $ 1,046,532 $ 0
Capital contributions to limited partnerships 7,561,518 397,395
Capital contributions payable to limited
partnerships 3,694,365 309,852
Capitalized acquisition fees and costs 689,516 340,082
Equity in loss of limited partnerships (107,500) (343)
Amortization of capitalized acquisition fees and costs (14,856) (454)
------- ----
Investment Balance - end of period $ 12,869,575 $ 1,046,532
========== =========
Selected financial information for the nine months ended September 30, 1996 from
the combined financial statements of the limited partnerships in which the
partnership has invested is as follows:
Total revenue $ 466,000
--------
Interest expense 130,000
Depreciation 136,000
Operating expenses 308,000
-------
Total expenses 574,000
-------
Net Loss $ (108,000)
============
Net loss allocable to the Partnership $ (107,500)
=========
10
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., Series 3
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS-CONTINUED
NOTE 4 - RELATED PARTY TRANSACTIONS
Under the terms of its Agreement of Limited Partnership, the Partnership is
obligated to the General Partner or its affiliates for the following items:
Acquisition fees up to 7.5% of the gross proceeds from the sale of
Partnership units. Acquisition fees of $638,002 were incurred for the nine
months ended September 30, 1996.
Reimbursement for organizational, offering and selling expenses
advanced by the General Partner or affiliates on behalf of the Partnership.
These reimbursements plus all other organizational and offering expenses
inclusive of sales commissions will not exceed 14.5% of the gross proceeds.
During the nine months ended September 30, 1996 the Partnership incurred
organizational, offering and selling expenses of $0, $792,193, and
$729,325, respectively.
An annual management fee equal to the greater of (i) $2,000 for each apartment
complex or (ii) .275% of the gross proceeds, in either case increased or
decreased based on annual changes in the Consumer Price Index. However, the
maximum fee may not exceed .2% of the invested assets (defined as the
Partnership's capital contributions plus its allocable percentage of the
permanent financing) of the local limited partnerships. The Partnership has
incurred fees of $37,125 for the nine months ended September 30, 1996.
A subordinated disposition fee in an amount equal to 1% of the sales
price of real estate sold. Payment of this fee is subordinated to the
limited partners receiving a return on investment (as defined in the
Partnership's Agreement of Limited Partnership) and is payable only if
services are rendered in the sales effort.
Accrued fees and advances due to affiliates of the General Partner included in
the accompanying balance sheet consists of the following at September 30, 1996
and December 31, 1995:
1996 1995
---- ----
Acquisition fees $ 0 $327,997
Advances made for acquisition costs,
organizational, offering and selling expenses 14,991 229,773
Asset management fees 49,492 12,367
Due to an affiliate 60,456 0
------ --------
$124,939 $570,137
======== ========
11
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., Series 3
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS-CONTINUED
NOTE 5 - PAYABLE TO LIMITED PARTNERSHIPS
Payable to limited partnerships at September 30, 1996 represents amounts which
are due at various times based on conditions specified in the respective local
limited partnership agreements. These contributions are payable in installments,
generally due upon the local limited partnership achieving certain operating
benchmarks, and are generally expected to be paid within two years of the
Partnership's initial investment.
NOTE 6 - INCOME TAXES
The Partnership will not make a provision for income taxes since all income and
losses will be allocated to the Partners for inclusion in their respective
returns.
NOTE 7 - SUBSCRIPTION AND INVESTOR NOTES RECEIVABLE
During the nine months ended September 30, 1996, the Partnership accepted
$2,290,000 in promissory notes from limited partners and collected payments of
$35,000 for those promissory notes previously issued. Limited partners who
subscribe for ten or more units of limited partnership interest ($10,000) may
elect to pay 50% of such purchase price in cash upon subscription and the
remaining 50% by the delivery of a promissory note payable bearing interest at
the rate of 8% per annum. Principal and interest are due (i) January 31, 1997 if
the investor subscribes between January 1, 1996 and June 1, 1996 or (ii) the
later of the date of subscription or September 30,1997 if the investor
subscribes after June 1, 1996. This amount is presented as a reduction in
partners' equity.
NOTE 8 - COMMITMENTS AND CONTINGENCIES
The Partnership is negotiating to acquire two additional limited partnership
interest which would commit the Partnership to additional capital contributions
of approximately $2,165,000 less loans receivable of $520,950.
12
<PAGE>
Financial Statements-Series 4
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
(A Development-Stage Enterprise)
BALANCE SHEETS
September 30, 1996
1996
ASSETS
Cash and cash equivalents $ 766,107
Subscriptions receivable - Note 5 450,000
Investment in limited
partnerships - Note 3 3,973,325
Other assets
702
---
$ 5,190,134
============
LIABILITIES AND PARTNERS' EQUITY
Liabilities:
Payable to limited partnerships - Note 2 $ 2,482,421
Accrued fees and expenses due to
general partner and affiliates - Note 3 83,373
------
2,565,794
---------
Commitments and contingencies - Note 7 Partners' equity (deficit):
General partner
(3,578)
Limited partners (25,000 units
authorized, 3075 units issued
and outstanding) 2,627,918
Total partners' equity 2,624,340
---------
$ 5,190,134
============
UNAUDITED
See Accompanying Notes to Financial Statements
13
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
(A Development-Stage Enterprise)
STATEMENT OF OPERATIONS
For the Period July 1, 1996 (date operations commenced)
to September 30, 1996
Interest income $ 2,427
---------
Operating expenses:
Amortization 418
Legal and accounting 44
--
Total operating expenses 462
---
Income (loss) from operations 1,965
Equity in loss from
limited partnerships (2,040)
------
Net loss $ (75)
========
Net loss allocated to:
General partner $ (1)
=======
Limited partners $ (74)
===
Net loss per weighted limited
partner unit (1,446) $ (0.05)
=====
UNAUDITED
See Accompanying Notes to Financial Statements
14
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
(A Development-Stage Enterprise)
STATEMENT OF PARTNERS' EQUITY
For the Period July 1, 1996 (date operations commenced)
to September 30, 1996
<TABLE>
<CAPTION>
` Original
General Limited Limited
Partner Partner Partner Total
------- ------- ------- -------
<S> <C> <C> <C> <C>
Equity (deficit), December 31, 1995 $ - $ - $ - $ -
Capital contributions 100 900 3,073,980 3,074,980
Offering expenses (3,677) (363,988) (367,665)
Capital issued for notes receivable (82,000) (82,000)
Withdrawals (900) (900)
Net loss (1) - (74) (75)
------- ------ --------- ----
Equity (deficit), September 30, 1996 $(3,578) $ 0 $2,627,918 $ 2,624,340
======== ======= ========== =========
</TABLE>
UNAUDITED
See Accompanying Notes to Financial Statements
15
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
(A California Limited Partnership)
(A Development-Stage Enterprise)
STATEMENT OF CASH FLOWS For the
Period July 1, 1996 (date operations commenced)
to September 30, 1996
Cash flows used by operating activities:
Net loss $ (75)
Adjustments to reconcile net loss to net cash used in
operating activities:
Equity in loss of limited partnerships 2,040
Amortization 418
Change in other assets (702)
Accrued fees and expense due to
general partner and affiliates 7,631
-----
Net cash provided by operating activities 9,312
---------
Cash flows used by investing activities:
Investment in limited partnerships (1,289,643)
Acquisition fees (185,100)
--------
Net cash used by investing activities (1,474,743)
-----------
Cash flows provide by financing activities:
Capital contributions 2,542,080
Offering costs (310,542)
---------
Net cash provided by financing activities 2,231,538
---------
Net increase in cash and cash equivalents 766,107
Cash and cash equivalents, beginning of period -
---------
Cash and cash equivalent, end of period $ 766,107
=======
UNAUDITED
See Accompanying Notes to Financial Statements
16
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., Series 4
(A California Limited Partnership)
(A Development-Stage Enterprise)
STATEMENT OF CASH FLOWS(CONTINUED)
For the Period July 1, 1996 (date operations commenced)
to September 30, 1996
SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING AND INVESTING ACTIVITIES:
During the period July 1, 1996 (date operations commenced) to September 30,
1996, the Partnership incurred, but did not pay, $82,473 of payables to
affiliates for acquisitions costs and offering expenses (see Note 3).
During the period July 1, 1996 (date operations commenced) to September 30,
1996, the Partnership incurred, but did not pay, $2,482,421 of payables to
limited partnerships; the Partnership (in connection with its investments in
limited partnerships) (see Note 4)
During the period July 1, 1996 (date operations commenced) to September 30,
1996, $450,000 of capital contributions were recorded as subscriptions
receivable.
UNAUDITED
See Accompanying Notes to Financial Statements
17
<PAGE>
- -------------------------------------------------------------------------------
WNC HOUSING TAX CREDIT FUND V, L.P., Series 4
(A California Limited Partnership)
(A Development-Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
- ------------
WNC Housing Tax Credit Fund, V, L.P., Series 4 (the "Partnership") was formed
under the California Revised Limited Partnership Act on March 28, 1995 and
commenced operations on July 1, 1996. The Partnership was formed to invest
primarily in other limited partnerships which will own and operate multi-family
housing complexes that will qualify for low income housing credits.
The information contained in the following notes to the financial statements is
condensed from that which would appear in the annual financial statements;
accordingly, the financial statements included herein should be reviewed in
conjunction with the financial statements and related notes thereto contained in
the Partnership's Annual Report. The Partnership commenced operations July 1,
1996, consequently their is no Annual Report for prior years.
In the opinion of the Partnership, the accompanying unaudited financial
statements contain all adjustments (consisting of only normal recurring
accruals) necessary to present fairly the financial position as of September
30,1996 and the results of operations and changes in cash flows for the period
July 1, 1996 (date operations commenced) to September 30, 1996. Accounting
measurements at interim dates inherently involve greater reliance on estimates
than at year end. The results of operations for the interim period presented are
not necessarily indicative of the results for the entire year.
The general partner of the Partnership is WNC Tax Credit Partners V, L.P. (the
"General Partner"), a California limited partnership. WNC & Associates, Inc. is
the general partner of the General Partner. Wilfred N. Cooper, Sr., through the
Cooper Revocable Trust, owns 70% of the outstanding stock of WNC & Associates,
Inc. John B. Lester, Jr. is the original limited partner of the Partnership and
owns, through the Lester Family Trust, 30% of the outstanding stock of WNC &
Associates, Inc.
Allocations Under the Terms of the Partnership Agreement
- --------------------------------------------------------
The General Partner has a 1% interest in operating profits and losses, taxable
income and loss and in cash available for distribution from the Partnership. The
limited partners will be allocated the remaining 99% of these items in
proportion to their respective investments.
After the limited partners have received sale or refinancing proceeds equal to
their capital contributions and their preferred return (as defined in the
Partnership's Agreement of Limited Partnership) and the general partner has
received a subordinated disposition fee any additional sale or refinancing
proceeds.
18
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., Series 4
(A California Limited Partnership)
(A Development-Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS-CONTINUED
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Allocations Under the Terms of the Partnership Agreement (Continued)
- ------------------------------------------------------------------------
will be distributed 90% to the limited partners (in proportion to their
respective investments) and 10% to the General Partner
Method of Accounting For Investment in Limited Partnerships
- -----------------------------------------------------------
The Partnership accounts for its investments in limited partnerships using the
equity method of accounting, whereby the Partnership adjusts its investment
balance for its share of each limited partnership's results of operations and
for any distributions received. Costs incurred by the Partnership in acquiring
the investments in limited partnerships are capitalized as part of the
investment.
Losses from the limited partnerships will not be recognized to the extent that
the individual investment balance would be adjusted below zero.
Cash and Cash Equivalents
- -------------------------
The Partnership considers all bank certificates of deposit with a maturity of
less than three months to be cash equivalents.
Offering Expenses
- -----------------
Offering expenses consist of underwriting commissions, legal fees, printing,
filing and recordation fees, and other costs incurred with selling limited
partnership interests in the Partnership. The General Partner is obligated to
pay all offering and organization costs in excess of 15% (including sales
commissions) of the total offering proceeds. Offering expenses are reflected as
a reduction of partners' capital.
Organization Costs
- ------------------
Organization costs will be amortized on the straight-line method over 60 months.
19
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., Series 4
(A California Limited Partnership)
(A Development-Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS-CONTINUED
NOTE 2 - INVESTMENT IN LIMITED PARTNERSHIPS
As of September 30, 1996, the Partnership had acquired limited partnership
interests in two limited partnerships each of which owns one apartment complex.
As of September 30, 1996, construction and rehabilitation of one of the
apartment complexes has completed construction. The Partnership, as a limited
partner, is a 99% owner and is entitled to 99% of the operating profits and
losses of the limited partnerships.
The following is a summary of the investment in limited partnerships and
reconciliation to the limited partnership accounts as of September 30, 1996:
1996
----
Capital contributions to limited partnership $3,772,964
Capitalized acquisition fees and costs 202,819
Equity in loss of limited partnership (2,040)
Amortization of capitalized acquisition costs (418)
----
Investment Balance - end of period $3,973,325
==========
Selected financial information for the period July 1, 1996 (date operations
commenced) to September 30, 1996 from the combined financial statements of the
limited partnerships in which the partnership has invested is as follows:
Total revenue $ 12,900
------
Interest expense 5,500
Depreciation 1,500
Operating expenses 8,000
-----
Total expenses 15,000
------
Net Loss $ (2,100)
==========
Net loss allocable to the Partnership $ (2,040)
=======
20
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., Series 4
(A California Limited Partnership)
(A Development-Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS-CONTINUED
NOTE 3- RELATED PARTY TRANSACTIONS
Under the terms of its Agreement of Limited Partnership, the Partnership is
obligated to the General Partner or its affiliates for the following items:
Acquisition fees up to 7.5% of the gross proceeds from the sale of
Partnership units. Acquisition fees of $186,282 were incurred for the
period July 1, 1996 (date operations commenced) to September 30, 1996.
Reimbursement for organizational, offering and selling expenses
advanced by the General Partner or affiliates on behalf of the Partnership.
These reimbursements plus all other organizational and offering expenses
inclusive of sales commissions will not exceed 14.5% of the gross proceeds.
During the period July 1, 1996 (date operations commenced) to September 30,
1996, the Partnership incurred organizational, offering and selling
expenses of $0, $138,060, and $229,605, respectively.
An annual management fee equal to the greater of (i) $2,000 for each
apartment complex or (ii) .275% of the gross proceeds, in either case
increased or decreased based on annual changes in the Consumer Price Index.
However, the maximum fee may not exceed .2% of the invested assets (defined
as the Partnership's capital contributions plus its allocable percentage of
the permanent financing) of the local limited partnerships. The Partnership
has incurred no fees for the period July 1, 1996 (date operations
commenced) to September 30, 1996.
A subordinated disposition fee in an amount equal to 1% of the sales
price of real estate sold. Payment of this fee is subordinated to the
limited partners receiving a return on investment (as defined in the
Partnership's Agreement of Limited Partnership) and is payable only if
services are rendered in the sales effort.
Accrued fees and advances due to affiliates of the General Partner included in
the accompanying balance sheet consists of the following at September 30, 1996:
Acquisition fees $17,719
Advances made for acquisition costs,
organizational, offering and selling expense 64,754
Due to original limited partner 900
------
Total accrued fees and advances $83,373
=======
21
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., Series 4
(A California Limited Partnership)
(A Development-Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS-CONTINUED
NOTE 4 - PAYABLE TO LIMITED PARTNERSHIPS
Payable to limited partnerships at September 30, 1996 represents amounts which
are due at various times based on conditions specified in the respective local
limited partnership agreements. These contributions are payable in installments,
generally due upon the local limited partnership achieving certain operating
benchmarks, and are generally expected to be paid within two years of the
Partnership's initial investment.
NOTE 5 - SUBSCRIPTION AND INVESTOR NOTES RECEIVABLE
During the period July 1, 1996 (date operations commenced) to September 30,
1996, the Partnership accepted $82,000 in promissory notes from limited
partners. Limited partners who subscribe for ten or more units of limited
partnership interest ($10,000) may elect to pay 50% of such purchase price in
cash upon subscription and the remaining 50% by the delivery of a promissory
note payable bearing interest at the rate of 8% per annum. Principal and
interest are due (i) January 31, 1997 if the investor subscribes between January
1, 1996 and June 1, 1996 or (ii) the later of the date of subscription or
September 30, 1997 if the investor subscribes after June 1, 1996. This amount is
presented as a reduction in partners' equity.
Subscriptions receivable of $450,000 has been received subsequent to September
30,1996 and accordingly has been classified as an asset.
NOTE 6 - INCOME TAXES
The Partnership will not make a provision for income taxes since all income and
losses will be allocated to the Partners for inclusion in their respective
returns.
NOTE 7 - COMMITMENTS AND CONTINGENCIES
Subsequent to September 30, 1996, the Partnership acquired a limited partnership
interest in two limited partnerships totaling approximately $488,250.
22
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operation
WNC Housing Tax Credit Fund V, L.P., Series 3 ( Series 3) is a California
Limited Partnership formed under the laws of the State of California on March
28, 1995, and commenced operations on October 24, 1995 to acquire limited
partnership interests in limited partnerships ("Limited Partnerships") which own
multifamily apartment complexes that are eligible for low-income housing federal
income tax credits (the "Housing Tax Credit").
As of September 30, 1996, Series 3 had received subscriptions for 18,000 Units
consisting of cash, notes receivable and subscriptions receivable of $15,310,135
and $2,255,000, and $0, respectively.
Liquidity and Capital Resources - Series 3
- -------------------------------------------
Overall, as reflected in its Statement of Cash Flows, Series 3 had a net
increase in cash and cash equivalents of approximately $2,831,000 for the nine
months ended September 30, 1996. This increase in cash was provided by Series
3's financing activities, including the proceeds from the offering. Cash from
financing activities for the period ended September 30, 1996 of approximately
$9,604,000 was sufficient to fund the investing activities of Series 3 during
such period in the aggregate amount of approximately $6,815,000, which consisted
primarily of capital contributions to Limited Partnerships. Cash provided and
used by the operating activities of Series 3 was minimal compared to its other
activities. Cash provided from operations consisted primarily of interest
received on cash deposits, and cash used in operations consisted primarily of
payments for operating fees and expenses. The major components of all these
activities are discussed in greater detail below.
As of December 31, 1995 and September 30, 1996 Series 3 was indebted to WNC &
Associates, Inc. in the amount of approximately $570,000 and $125,000,
respectively. The component items of such indebtedness were as follows: accrued
acquisition fees of approximately $328,000 and $0, respectively, advances to pay
front-end fees of approximately $230,000 and $0, respectively, accrued asset
management fees of approximately $12,000 and $49,000, respectively and due to an
affiliate of the general partner approximately $0 and $60,000, respectively.
As of September 30, 1996, Series 3 has received and accepted subscriptions funds
in the amount of $17,565,000, of which $2,255,000 currently is represented by
Promissory Notes. As of November 14, 1996, as of September 30, 1996 and as of
December 31, 1995, Series 3 had made capital contributions to Limited
Partnerships in the amount of approximately $8,794,000, $8,422,000 and $397,000,
respectively, and had commitments for additional capital contributions of
approximately $3,322,000, $3,694,000 and $3,277,000, respectively. Further,
Series 3 had loans outstanding to Limited Partnerships as of November 14, 1996,
as of September 30, 1996 and as of December 31, 1995, of approximately $521,000,
$521,000 and $661,000, respectively. Of the amount outstanding as of December
31, 1995, approximately $172,000 was loaned to TALLEDEGA and was applied to
Series 3's purchase price upon acquisition of that Limited Partnership Interest
in February 1996. The balance of $489,000 was loaned to ALLIANCE and was applied
to Series 3's purchase price upon acquisition of that Limited Partnership
Interest in February 1996. Of the amount outstanding as of September 30 and
November 14, 1996 the amount of approximately $345,000 was loaned to BROADWAY
APARTMENTS and approximately $176,000 to ESCATAWA.
23
<PAGE>
Liquidity and Capital Resources - Series 4
- ------------------------------------------
Overall, as reflected in its Statement of Cash Flows, Series 4 had a net
increase in cash and cash equivalents of approximately $766,000 for the period
July 1, 1996 (date operations commenced) to September 30, 1996. This increase in
cash was provided by Series 4's financing activities, including the proceeds
from the offering. Cash from financing activities for July 1, 1996 (date
operations commenced) to September 30, 1996 of approximately $2,232,000 was
sufficient to fund the investing activities of Series 4 during such period in
the aggregate amount of approximately $1,475,000, which consisted primarily of
capital contributions to Limited Partnerships. Cash provided and used by the
operating activities of Series 4 was minimal compared to its other activities.
Cash provided from operations consisted primarily of interest received on cash
deposits, and cash used in operations consisted primarily of payments for
operating fees and expenses. The major components of all these activities are
discussed in greater detail below.
As of May 15, 1996 and September 30, 1996, Series 4 had not yet commenced
operations and the capital anticipated to be raised through its public Offering
of Units had not yet become available. As of August 23, 1996, Series 4 had
received cash subscriptions funds of $1,400,000, thereby satisfying the minimum
Offering condition. As of September 30, 1996 and November 14, 1996, Series 4 had
received and accepted subscription funds in the amount of $3,074,000 (3,075
Units) and $4,673,900 (4,675 Units), respectively, of which $82,000 and
$184,500, respectively.
was represented by Promissory Notes.
All of the proceeds from the sale of units have been committed to the purchase
price and acquisition fees and costs of four Local Limited Partnership
Interests, Reserves and expenses of this Offering. Series 4 requires a total of
approximately $4,915,000 in this regard.
As of the date hereof, Series 4 has made capital contributions to Local Limited
Partnerships in the amount of approximately $1,391,000, and has no earnest money
deposits. Series 4 does not make earnest money deposits in connection with all
the Local Limited Partnerships it investigates; however, certain Local Limited
Partnerships require such deposits a evidence of the sincerity of Series 4 in
pursuing the investigation. If as a result of its due diligence and other
investigative activities Series 4 determines that acquisition of a Local Limited
partnership Interest as to which a deposit has been made is not appropriate for
Series 4 (e.g., the investment would not satisfy the minimum investment
parameters set forth in the Prospectus), Series 4 would reject the investment
and the Local Limited Partnership would be required to return the deposit. If
Series 4 determines that acquisition of a Local Limited Partnership Interest is
appropriate, the investment is made and the deposit is credited to Series 4's
capital obligation to the Local Limited Partnership: if the investment is not
consummated, the deposit is forfeited.
As September 30, 1996 Series 4 was indebted to WNC & Associates, Inc. in the
amount of approximately $83,000. The component items of such indebtedness were
as follows: accrued acquisition fees of approximately $18,000, advances to pay
front-end fees of approximately $65,000.
Series 3 and Series 4
- ---------------------
Prior to sale of the Apartment Complexes, it is not expected that any of the
Limited Partnerships in which the Series 3 and Series 4 (the Partnerships) have
invested or will invest will generate cash from operations sufficient to provide
distributions to the Limited Partners in any material amount. Such cash from
operations, if any, would first be used to meet operating expenses of Series 4,
including payment of the asset management fee to the General Partner. As a
result, it is not anticipated that the Partnerships will provide distributions
to the Limited Partners prior to the sale of the Apartment Complexes.
24
<PAGE>
The Partnerships' investments will not be readily marketable and may be affected
by adverse general economic conditions which, in turn, could substantially
increase the risk of operating losses for the Apartment Complexes, the Limited
Partnerships and The Partnerships. These problems may result from a number of
factors, many of which cannot be controlled by the General Partner.
Nevertheless, the General Partner anticipates that capital raised from the sale
of the Units will be sufficient to fund the Partnerships' investment commitments
and proposed operations.
The Partnerships will establish working capital reserves of at least 3% of
capital contributions, an amount which is anticipated to be sufficient to
satisfy general working capital and administrative expense requirements of the
Partnerships excluding payment of the asset management fee as well as expenses
attendant to the preparation of tax returns and reports to the Limited Partners
and other investor servicing obligations of the Partnerships. Liquidity would,
however, be adversely affected by unanticipated or greater than anticipated
operating costs. The Partnerships' liquidity could also be affected by defaults
or delays in payment of the Limited Partners' promissory notes, from which a
portion of the working capital reserves is expected to be funded. To the extent
that working capital reserves are insufficient to satisfy the cash requirements
of the Partnerships, it is anticipated that additional funds would be sought
through bank loans or other institutional financing. The General Partner may
also apply any cash distributions received from the Limited Partnerships for
such purposes or to replenish or increase working capital reserves.
Under Series 4 Agreements the Partnerships do not have the ability to assess the
Limited Partners for additional capital contributions to provide capital if
needed by the Partnerships or Limited Partnerships. Accordingly, if
circumstances arise that cause the Limited Partnerships to require capital in
addition to that contributed by the Partnerships and any equity contributed by
the general partners of the Limited Partnerships, the only sources from which
such capital needs will be able to be satisfied (other than the limited reserves
available at The Partnerships level) will be (i) third-party debt financing
(which may not be available, if, as expected, the Apartment Complexes owned by
the Limited Partnerships are already substantially leveraged), (ii) additional
equity contributions or advances of the general partners of the Limited
Partnerships (in this regard, each local general partner is required to fund
operating deficits, but only for a period of two years following construction
completion), (iii) other equity sources (which could adversely affect the
Partnerships' interest in Housing Tax Credits, cash flow and/or proceeds of sale
or refinancing of the Apartment Complexes and result in adverse tax consequences
to the Limited Partners), or (iv) the sale or disposition of the Apartment
Complexes (which could have the same adverse effects as discussed in (iii)
above). There can be no assurance that funds from any of such sources would be
readily available in sufficient amounts to fund the capital requirement of the
Limited Partnerships in question. If such funds are not available, the Limited
Partnerships would risk foreclosure on their Apartment Complexes if they were
unable to re-negotiate the terms of their first mortgages and any other debt
secured by the Apartment Complexes to the extent the capital requirements of the
Limited Partnerships relate to such debt.
The Partnerships' capital needs and resources are expected to undergo major
changes during their first several years of operations as a result of the
completion of their offerings of Units and their acquisition of investments.
Thereafter, the Partnerships' capital needs and resources are expected to be
relatively stable over the holding periods of the investments except to the
extent of proceeds received in payment of promissory notes and disbursed to fund
the deferred obligations of the Partnerships.
Results of Operations Series 3
- ------------------------------
As of December 31, 1995 and September 30, 1996 Series 3 had acquired 2 and 16
Limited Partnership Interests, respectively. Each of the 16 Limited Partnerships
receives or is expected to receive government assistance and each of them has
received a reservation for Housing Tax Credits. As of September 30,
25
<PAGE>
1996, seven of the Apartment Complexes in Series 3 had commenced operations,
none of them for a full year. Accordingly, the "Equity in losses from limited
partnerships" for the periods ended December 31, 1995 and September 30, 1996
reflected in the Statement of Operations of Series 3 is not indicative of the
amounts to be reported in future years.
As reflected on its Statements of Operations, Series 3 had a loss of
approximately $47,000 for the nine months ended September 30, 1996. The
component items of revenue and expense are discussed below.
Revenue. Series 3's revenues consisted entirely of interest earned on promissory
notes and cash deposits held in financial institutions (i) as reserves, or (ii)
pending investment in Limited Partnerships. Interest revenue in future years
will be a function of prevailing interest rates and the amount of cash balances.
It is anticipated that Series 3 will maintain cash Reserves in an amount not
materially in excess of the minimum amount required by its Partnership
Agreement, which is 3% of capital contributions.
Expenses. The most significant component of operating expenses was and is
expected to be the Asset Management Fee. The Asset Management Fee is equal to
the greater of (i) $2,000 for each Apartment Complex or (ii) 0.275% of gross
proceeds, and will be decreased or increased annually based on changes to the
Consumer Price Index.
Amortization expense consist of the amortization over a period of 30 years of
the Acquisition Fee and other expenses attributable to the acquisition of
Limited Partnership Interests.
Because of the amounts of the Asset Management Fee and amortization expense
primarily are determined by the gross proceeds from the offering, the number and
size of Apartment Complexes and the number of investors, until termination of
the Offering and investment of the net proceeds therefrom Series 3 cannot
predict with any accuracy what these amounts will be.
Equity in Losses from Limited Partnership. Series 3's equity in losses from
Limited Partnerships is equal to 99% of the aggregate net losses of each Limited
Partnership incurred after admission of Series 3 as a limited partner thereof.
After rent-up all Limited Partnerships are expected to generate losses during
each year of operations; this is so because, although rental income is expected
to exceed cash operating expenses, depreciation and amortization deductions
claimed by the Limited Partnerships are expected to exceed net rental income.
Series 3 accounts for its investments in Local Partnerships using the equity
method of accounting, whereby Series 3 reduces its investment balance for its
share of Local Partnerships' losses and distributions. Losses are not recognized
to the extent that the investment balance would be adjusted below zero.
Results of Operations - Series 4
- --------------------------------
As of November 14 and September 30, 1996 Series 4 had acquired four and two
Limited Partnership Interests, respectively. Each of the four Limited
Partnerships receives or is expected to receive government assistance and each
of them has received a reservation for Housing Tax Credits. As of September 30,
1996, one of the Apartment Complexes in Series 4 had commenced operations in
August 1996 and acquired by Series 4 in September 1996. Accordingly, the "Equity
in losses from limited partnerships" for the period July 1, 1996 (date
operations commenced) to September 30, 1996 reflected in the Statement of
Operations of Series 4 is not indicative of the amounts to be reported in future
years.
Series 4 was formed in March 1995 and commenced operations in July 1996.
Consequently, there are no operations for the period ended September 30, 1995.
26
<PAGE>
As reflected on its Statements of Operations, Series 4 had a loss of
approximately $75 for the period July 1, 1996 (date operations commenced) to
September 30, 1996. The component items of revenue and expense are discussed
below.
Revenue. Series 4's revenues consisted entirely of interest earned on promissory
notes and cash deposits held in financial institutions (i) as reserves, or (ii)
pending investment in Limited Partnerships. Interest revenue in future years
will be a function of prevailing interest rates and the amount of cash balances.
It is anticipated that Series 4 will maintain cash Reserves in an amount not
materially in excess of the minimum amount required by its Partnership
Agreement, which is 3% of capital contributions.
Expenses. The most significant component of operating expenses was and is
expected to be the Asset Management Fee. The Asset Management Fee is equal to
the greater of (i) $2,000 for each Apartment Complex or (ii) 0.275% of gross
proceeds, and will be decreased or increased annually based on changes to the
Consumer Price Index.
Amortization expense consist of the amortization over a period of 30 years of
the Acquisition Fee and other expenses attributable to the acquisition of
Limited Partnership Interests.
Because of the amounts of the Asset Management Fee and amortization expense
primarily are determined by the gross proceeds from the offering, the number and
size of Apartment Complexes and the number of investors, until termination of
the Offering and investment of the net proceeds therefrom Series 4 cannot
predict with any accuracy what these amounts will be.
Equity in Losses from Limited Partnership. Series 4's equity in losses from
Limited Partnerships is equal to 99% of the aggregate net losses of each Limited
Partnership incurred after admission of Series 4 as a limited partner thereof.
After rent-up all Limited Partnerships are expected to generate losses during
each year of operations; this is so because, although rental income is expected
to exceed cash operating expenses, depreciation and amortization deductions
claimed by the Limited Partnerships are expected to exceed net rental income.
27
<PAGE>
Part II. Other Information
Item 1. Legal Proceedings
None.
Item 6. Exhibits and Reports on Form 8-K
1. None..
b.
A current report on Form 8-K dated September 17, 1996 was filed during
the quarter ended September 30, 1996. The current report set forth information
pertaining to the acquisition by the Series 3 of one Limited Partnership
interests under Item 2 thereof and proforma financial information required by
Article 11 of Regulation S-X were provided by the current report.
A current report on Form 8-K dated September 17, 1996 was filed during the
quarter ended September 30, 1996. The current report set forth information
pertaining to the acquisition by the Series 4 of one Limited Partnership
interests under Item 2 thereof and proforma financial information required by
Article 11 of Regulation S-X were provided by the current report.
28
<PAGE>
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.
WNC HOUSING TAX CREDIT FUND V, L.P., Series 3 and Series 4
By WNC & ASSOCIATES, INC. General Partner
By: /s/ John B. Lester, Jr
- ---------------------------
John B. Lester, Jr. President
Date: November 15, 1996
By: /s/ Theodore M. Paul
- -------------------------
Theodore M. Paul Vice President - Finance
Date: November 15, 1996
29
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000943904
<NAME> WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
<MULTIPLIER> 1
<CURRENCY> US CURRENCY
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1
<CASH> 3,492,424
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,492,424
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 16,965,874
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 13,146,570
<TOTAL-LIABILITY-AND-EQUITY> 16,965,874
<SALES> 0
<TOTAL-REVENUES> 139,604
<CGS> 0
<TOTAL-COSTS> 60,584
<OTHER-EXPENSES> (107,500)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (28,480)
<INCOME-TAX> 0
<INCOME-CONTINUING> (28,480)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (28,480)
<EPS-PRIMARY> (2)
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000943906
<NAME> WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 4
<MULTIPLIER> 1
<CURRENCY> US CURRENCY
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1
<CASH> 766,107
<SECURITIES> 0
<RECEIVABLES> 0
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<CURRENT-ASSETS> 766,107
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 5,190,134
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,624,340
<TOTAL-LIABILITY-AND-EQUITY> 5,190,134
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<TOTAL-REVENUES> 2,427
<CGS> 0
<TOTAL-COSTS> 462
<OTHER-EXPENSES> 2,040
<LOSS-PROVISION> 0
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<INCOME-PRETAX> (75)
<INCOME-TAX> 0
<INCOME-CONTINUING> (75)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (75)
<EPS-PRIMARY> (.05)
<EPS-DILUTED> 0
</TABLE>
