UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------ FORM 10-QSB/A (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, 2006 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 000-16757 CONCORD MILESTONE PLUS, L.P. ---------------------------------------------- (Exact Name of Small Business Issuer as Specified in its Charter) Delaware 52-1494615 - --------------------------------- ------------------ (State or Other Jurisdiction of (I.R.S. Employer Identification No.) Incorporation or Organization) 200 CONGRESS PARK DRIVE SUITE 205 DELRAY BEACH, FLORIDA 33445 - ---------------------------------------- ---------------- (Address of Principal Executive Offices) (Zip Code) (561) 394-9260 --------------------------- Issuer's Telephone Number Check whether the issuer (1) has filed all reports to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X] As of November 14, 2006, 1,518,800 Class A interests and 2,111,072 Class B interests were outstanding. Transitional small business disclosure format. Yes [ ] No [X] EXPLANATORY NOTE This amendment to our quarterly report on Form 10-QSB for the quarter ended September 30, 2006 is being filed solely to correct the Section 906 certification filed as Exhibit 32.2 to the Form 10-QSB, which inadvertently contained incorrect dates. This Form 10-QSB/A does not amend or update the information in such quarterly report in any other way. PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS CONCORD MILESTONE PLUS, L.P. (A LIMITED PARTNERSHIP) BALANCE SHEETS SEPTEMBER 30, 2006 (UNAUDITED) AND DECEMBER 31, 2005 Assets: September 30, 2006 December 31, 2005 ------------------ ----------------- Property: Building and improvements, at cost $ 17,211,573 $ 17,111,777 Less: accumulated depreciation 11,065,882 10,544,901 -------------- -------------- Building and improvements, net 6,145,691 6,566,876 Land, at cost 10,987,034 10,987,034 -------------- -------------- Property, net 17,132,725 17,553,910 Cash and cash equivalents 1,795,626 1,707,023 Accounts receivable, net 138,276 168,632 Restricted cash 135,217 88,797 Debt financing costs, net 31,334 54,834 Prepaid expenses and other assets, net 314,264 49,688 -------------- -------------- Total assets $ 19,547,442 $ 19,622,884 ============== ============== Liabilities: Mortgage loans payable $ 14,597,190 $ 14,840,503 Accrued interest 99,349 104,359 Deposits 118,531 152,859 Accrued expenses and other liabilities 332,363 245,324 Accrued expenses payable to affiliates 430 2,712 -------------- -------------- Total liabilities 15,147,863 15,345,757 -------------- -------------- Commitments and Contingencies Partners' capital: General partner (78,568) (79,793) Limited partners: Class A Interests, 1,518,800 4,478,147 4,356,920 Class B Interests, 2,111,072 -- -- -------------- -------------- Total partners' capital 4,399,579 4,277,127 -------------- -------------- Total liabilities and partners' capital $ 19,547,442 $ 19,622,884 ============== ============== See Accompanying Notes to Financial Statements 2 CONCORD MILESTONE PLUS, L.P. (A LIMITED PARTNERSHIP) STATEMENTS OF REVENUES AND EXPENSES (UNAUDITED) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005 September 30, 2006 September 30, 2005 ------------------ ------------------ Revenues: Rent $ 2,240,618 $ 2,150,697 Reimbursed expenses 498,098 614,075 Interest and other income 63,558 32,710 -------------- -------------- Total revenues 2,802,274 2,797,482 -------------- -------------- Expenses: Interest expense 910,624 930,021 Depreciation and amortization 547,255 570,148 Management and property expenses 804,486 844,325 Administrative and management fees to related party 177,700 176,461 Professional fees and other expenses 89,777 117,789 -------------- -------------- Total expenses 2,529,842 2,638,744 -------------- -------------- Net income $ 272,432 $ 158,738 ============== ============== Net income attributable to: Limited partners $ 269,708 $ 157,150 General partner 2,724 1,588 -------------- -------------- Net income $ 272,432 $ 158,738 ============== ============== Income per weighted average Limited Partnership 100 Class A Interests outstanding $ 17.94 $ 10.45 ============== ============== Distribution per weighted average Limited Partnership 100 Class A Interests outstanding $ 9.88 $ 9.77 ============== ============== Weighted average number of 100 Class A Interests outstanding 15,188 15,188 ============== ============== See Accompanying Notes to Financial Statements 3 CONCORD MILESTONE PLUS, L.P. (A LIMITED PARTNERSHIP) STATEMENTS OF REVENUES AND EXPENSES (UNAUDITED) FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005 September 30, 2006 September 30, 2005 ------------------ ------------------ Revenues: Rent $ 751,682 $ 739,143 Reimbursed expenses 166,179 179,206 Interest and other income 24,894 14,501 -------------- -------------- Total revenues 942,755 932,850 -------------- -------------- Expenses: Interest expense 305,183 311,854 Depreciation and amortization 179,558 190,806 Management and property expenses 320,591 261,620 Administrative and management fees to related party 59,505 59,680 Professional fees and other expenses 33,279 55,759 -------------- -------------- Total expenses 898,116 879,719 -------------- -------------- Net income $ 44,639 $ 53,131 ============== ============== Net income attributable to: Limited partners $ 44,193 $ 52,599 General partner 446 532 -------------- -------------- Net income $ 44,639 $ 53,131 ============== ============== Income per weighted average Limited Partnership 100 Class A Interests outstanding $ 2.94 $ 3.50 ============== ============== Distribution per weighted average Limited Partnership 100 Class A Interests outstanding $ 3.27 $ 3.26 ============== ============== Weighted average number of 100 Class A Interests outstanding 15,188 15,188 ============== ============== See Accompanying Notes to Financial Statements 4 CONCORD MILESTONE PLUS, L.P. (A LIMITED PARTNERSHIP) STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (UNAUDITED) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2006 GENERAL CLASS A CLASS B TOTAL PARTNER INTERESTS INTERESTS ----------- ----------- ----------- ----------- PARTNERS' CAPITAL (DEFICIT) January 1, 2006 $ 4,277,127 $ (79,793) $ 4,356,920 $ -- ----------- ----------- ----------- ----------- 1st Quarter 2006 Distribution (50,000) (500) (49,500) -- 2nd Quarter 2006 Distribution (50,362) (504) (49,858) 3rd Quarter 2006 Distribution (49,618) (495) (49,123) Net Income 272,432 2,724 269,708 -- ----------- ----------- ----------- ----------- PARTNERS' CAPITAL (DEFICIT) September 30, 2006 $ 4,399,579 $ (78,568) $ 4,478,147 $ -- =========== =========== =========== =========== See Accompanying Notes to Financial Statements 5 CONCORD MILESTONE PLUS, L.P. (A LIMITED PARTNERSHIP) STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005 September 30, 2006 September 30, 2005 ------------------ ------------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 272,432 $ 158,738 Adjustments to reconcile net income to net Cash provided by operating activities: Depreciation and amortization 547,255 570,148 Change in operating assets and liabilities: Decrease (increase) in accounts receivable, net 30,356 (9,993) Increase in prepaid expenses and other assets, net (267,350) (22,576) Decrease in accrued interest (5,010) (4,958) Increase in accrued expenses and other liabilities 52,711 37,181 (Decrease) increase in accrued expenses payable to affiliates (2,282) 6,477 ----------- ----------- Net cash provided by operating activities 628,112 735,017 ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITY: Property improvements (99,796) (217,354) ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Increase in restricted cash (46,420) (71,514) Principal repayments on mortgage loans payable (243,313) (223,979) Cash distributions to partners (149,980) (148,438) ----------- ----------- Net cash used in financing activities (439,713) (443,931) ----------- ----------- NET INCREASE IN CASH AND CASH EQUIVALENTS 88,603 73,732 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 1,707,023 1,468,442 ----------- ----------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 1,795,626 $ 1,542,174 =========== =========== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for interest $ 915,634 $ 934,979 =========== =========== See Accompanying Notes to Financial Statements 6 CONCORD MILESTONE PLUS, L.P. (A LIMITED PARTNERSHIP) NOTES TO FINANCIAL STATEMENTS (UNAUDITED) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2006 The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-QSB and Item 310 of Regulation S-B. 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 (consisting of normal recurring accruals) considered necessary for a fair presentation of these quarterly periods have been included. The financial statements as of and for the periods ended September 30, 2006 and 2005 are unaudited. The results of operations for the interim periods shown in this report are not necessarily indicative of the results of operations that may be expected for any other interim period or for the full fiscal year. These interim financial statements should be read in conjunction with the annual financial statements and footnotes included in the Partnership's financial statements filed on Form 10-KSB for the year ended December 31, 2005. SUBSEQUENT EVENT The General Partner has resolved to make a cash distribution equal to $0.0326 per Class A Interest to be paid to the holders of Class A Interests as of September 30, 2006 in November 2006. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS GENERAL This Form 10-QSB and the documents incorporated herein by reference, if any, contain forward-looking statements that have been made within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements are based on current expectations, estimates and projections about the Partnership's (as defined below) industry, management beliefs, and certain assumptions made by the Partnership's management and involve known and unknown risks, uncertainties and other factors. Such factors include the following: general economic and business conditions, which will, among other things, affect the demand for retail space or retail goods, availability and creditworthiness of prospective tenants, lease rents and the terms and availability of financing; risks of real estate development and acquisition; governmental actions and initiatives; and environmental and safety requirements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict; therefore, actual results may differ materially from those expressed or forecasted in any such forward-looking statements. Forward-looking statements that were true at the time made may ultimately prove to be incorrect or false. Readers are cautioned to not place undue reliance on forward-looking statements, which reflect our management's view only as of the date of this report. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results. ORGANIZATION AND CAPITALIZATION Concord Milestone Plus, L.P., a Delaware limited partnership (the "Partnership"), was formed on December 12, 1986, for the purpose of investing in existing income-producing commercial and industrial real estate. The general partner is CM Plus Corporation. The Partnership began operations on August 20, 1987, and currently owns and operates three shopping centers located in Searcy, Arkansas; Valencia, California; and Green Valley, Arizona. The Partnership commenced a public offering on April 8, 1987 in order to fund the Partnership's real property 7 acquisitions. The Partnership terminated its public offering on April 2, 1988 and was fully subscribed to with a total of 16,452 Bond Units and 15,188 Equity Units issued. Each Bond Unit consisted of $1,000 principal amount of Bonds and 36 Class B Interests. The Partnership redeemed all of the outstanding Bonds as of September 30, 1997 with the proceeds of three fixed rate mortgage loans. Each Equity Unit consists of 100 Class A Interests and 100 Class B Interests. Capital contributions to the Partnership consisted of $15,187,840 from the sale of the Equity Units and $592,272 which represent the Class B Interests from the sale of the Bond Units. RESULTS OF OPERATIONS COMPARISON OF THREE MONTHS ENDED SEPTEMBER 30, 2006 TO THREE MONTHS ENDED SEPTEMBER 30, 2005 The Partnership recognized net income of $44,639 for the three months ended September 30, 2006, as compared to net income of $53,131 for the same period in 2005. The decrease is primarily due to the following factors: An increase in expenses of $18,397 or 2.10%, to $898,116 for the three months ended September 30, 2006, as compared to $879,719 for the three months ended September 30, 2005. The increase is primarily due to increases in management and property expenses of $58,958 for escalating insurance premiums, offset by a decrease of $22,480 in professional fees due to decreases in legal and filing fees, and further offset by assets fully depreciated in previous quarters. The increase in expenses was partially offset by an increase in revenues of $9,905 or 1.06%, to $942,755 for the three months ended September 30, 2006, as compared to $932,850 for the three months ended September 30, 2005. The increase in revenues was due to an increase in base rent at the Green Valley and Valencia properties in the aggregate amount of $12,539, and an increase of $10,393 in interest income due to higher interest rates, offset by a decrease in reimbursed expenses of $13,027 due to parking lot repairs at Valencia in the three months ended September 30, 2005, with no comparable expenses in same period of 2006. COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 2006 TO NINE MONTHS ENDED SEPTEMBER 30, 2005 The Partnership recognized net income of $272,432 for the nine months ended September 30, 2006, as compared to net income of $158,738 for the same period in 2005. The increase is primarily due to the following factors: An increase in revenues of $4,792 or 0.18%, to $2,802,274 for the nine months ended September 30, 2006, as compared to $2,797,482 for the nine months ended September 30, 2005 due to an increase in base rent at the Green Valley and Valencia properties in the aggregate amount of $89,921 and an increase of $30,848 in interest income due to higher interest rates, offset by decreases in reimbursed common area expenses of $75,000 for parking lot repairs at the Valencia property and $25,000 for other common area expenses reimbursed in the nine months ended September 30, 2005 with no comparable expenses in same period of 2006, a decrease in real estate tax reimbursed expenses of $29,301 in the Green Valley and Valencia properties due to a decrease in occupancy in the Valencia property and credits given for a decrease in taxes expense at the Green Valley and Valencia properties. A decrease in expenses of $108,902 or 4.13%, to $2,529,842 for the nine months ended September 30, 2006, as compared to $2,638,744 for the nine months ended September 30, 2005. The net decrease is primarily due to decreases in management and property expenses of $39,839 due to major parking lot repairs completed at the Valencia Property of $ 90,083 in the nine months ended September 30, 2005 with no comparable expenses in same period of 2006 offset by increases in insurance premiums of $45,275 and leasing costs of $ 10,192 associated with new leases in 2006 , assets fully depreciated in previous quarters in the aggregate amount of $22,892, and a decrease of professional fees and other expenses in the amount of $28,012 due to decreases in legal and filing fees. LIQUIDITY AND CAPITAL RESOURCES The General Partner believes that the Partnership's expected revenue and working capital are sufficient to meet the Partnership's current and foreseeable future regular operating requirements, not including obligations to make lump sum payments on the maturing mortgages described below. Nevertheless, because the cash revenues and expenses of the Partnership will depend on future facts and circumstances relating to the Partnership's properties, as well as market 8 and other conditions beyond the control of the Partnership, a possibility exists that cash flow deficiencies may occur. In December 2005, a lease was executed with Vallarta Food Enterprises for the space previously leased by Albertson's. Vallarta Food Enterprises received possession of the premises on July 12, 2006 and in accordance with the lease, paid the Partnership $100,000 which will be realized over the term of the lease as well as leasing costs associated with the lease. Pursuant to the lease, which has an initial term of 20 years expiring January 2027, rental payments of $26,535 per month will commence in January 2007, with escalations of 10% every 5 years through January 2027. Following the expiration of the initial term of the lease, the lease may be renewed by Vallarta at its option up to four times for additional 5-year periods, with 12% escalations for each additional 5-year renewal period. The Partnership has made distributions to its partners in the past. Distributions were suspended after the second quarter of 1999 and resumed in the first quarter of 2005. A distribution of $50,000 was paid during January 2006 and a distribution of $50,362 was paid during May 2006. A third distribution of $49,618 was paid in August 2006 and the fourth distribution is intended to be paid in November 2006. The Partnership will evaluate the amount of future distributions, if any, on a quarter by quarter basis. No assurances can be given as to the timing or amount of any future distributions by the Partnership. The mortgages for all three properties are due and payable on September 30, 2007. The anticipated outstanding principal balances of the respective mortgages at September 30, 2007 are as follows: Property Mortgage Payable -------------- --------------------------- Green Valley $4,738,095 Old Orchard $7,003,227 Town & Country $2,505,980 The Partnership will seek to refinance one or more of the mortgages and/or sell one or more of the properties to provide it with cash to meet these obligations. The General Partner of the Partnership believes that the Partnerhisp will be able to satisfy its mortagage loans payable obligations through these actions, but no assurance can be made as to whether the Partnership will be able to refinance the mortgages or sell its properties or in the event the Partnership is able to do so, whether any such refinancing and/or sale would be on terms favorable to the Partnership. Management is not aware of any other significant trends, events, commitments for capital expenditures or uncertainties that will or are likely to materially impact the Partnership's liquidity. The cash on hand at September 30, 2006 may be used for (a) the capital improvement requirements of the Partnership's properties, (b) the anticipated November 2006 distribution to its partners of $50,000 and future distributions, and (c) for other general Partnership purposes, including the costs of leasing vacant or soon to be vacant space, and costs of compliance with Section 404 of the Sarbanes-Oxley Act of 2002, and other regulatory and public company costs. Net cash provided by operating activities of $628,112 for the nine months ended September 30, 2006 included (i) net income of $272,432 (ii) non-cash adjustments of $547,255 for depreciation and amortization expense, and (iii) a net change in operating assets and liabilities of $191,575 which is partially atributable to an increase in prepaid insurance of $ 183,252 offset by an increase in accrued expenses for leasing costs of $ 64,802. Net cash provided by operating activities of $735,017 for the nine months ended September 30, 2005 included (i) net income of $158,738, (ii) non cash adjustments of $570,148 for depreciation and amortization expense, and (iii) a net change in operating assets and liabilities of $6,131. Net cash used in investing activities of $99,796 for the nine months ended September 30, 2006 was for capital expenditures for property improvements. Net cash used in investing activities of $217,354 for the nine months ended September 30, 2005 was for capital expenditures for property improvements. 9 Net cash used in financing activities of $439,713 for the nine months ended September 30, 2006 included (i) principal repayments on mortgage loans payable of $243,313, (ii) an increase in restricted cash of $46,420 and (iii) cash distributions to partners of $149,980. Net cash used in financing activities of $443,931 for the nine months ended September 30, 2005 included (i) principal repayments on mortgage loans payable of $223,979, (ii) an increase in restricted cash of $71,514, and (iii) cash distributions to partners of $148,438. OFF-BALANCE SHEET ARRANGEMENTS The Partnership has no off-balance sheet arrangements as contemplated by Item 303(c) of Rule S-B. ITEM 3. CONTROLS AND PROCEDURES. The President and Treasurer of CM Plus Corporation, the general partner of the Partnership, are the principal executive officer and principal financial officer of the Partnership and have evaluated, in accordance with Rules 13a-15 and 15d-15 of the Securities Exchange Act of 1934, as amended (the "Act"), the effectiveness of the Partnership's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-(e) of the Act) as of the end of the period covered by this report. Based on that evaluation, the President and the Treasurer of CM Plus Corporation have concluded that as of the end of the period covered by this report the Partnership's disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed by the Partnership and its subsidiaries in the reports it files or submits under the Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. There were no changes in the Partnership's internal control over financial reporting identified in connection with the required evaluation performed by the President and Treasurer of CM Plus Corporation that occurred during the Partnership's last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Partnership's internal control over financial reporting. PART II - OTHER INFORMATION ITEM 6. EXHIBITS Number Description of Document ------ -------------------------- 3.1 Amended and Restated Agreement of Limited Partnership of Concord Milestone Plus, L.P. Incorporated herein by reference to Exhibit A to the Registrant's Prospectus included as Part I of the Registrant's Post-Effective Amendment No. 3 to the Registrant's Registration Statement on Form S-11 (the "Registration Statement") which was declared effective on April 3, 1987. 3.2 Amendment No. 1 to Amended and Restated Agreement of Limited Partnership of Concord Milestone Plus, L.P., included as Exhibit 3.2 to Registrant's Form 10-K for the fiscal year ended December 31, 1987 ("1987 Form 10-K"), which is incorporated herein by reference. 3.3 Amendment No. 2 to Amended and Restated Agreement of Limited Partnership of Concord Milestone Plus, L.P. included as Exhibit 3.3 to the 1987 form 10-K, which is incorporated herein by reference. 3.4 Amendment No. 3 to Amended and Restated Agreement of Limited Partnership of Concord Milestone Plus, L.P. included as Exhibit 3.4 to the 1987 Form 10-K, which is incorporated herein by reference. 3.5 Amendment No. 4 to Amended and Restated Agreement of Limited Partnership of Concord Milestone Plus, L.P. included as Exhibit 3.5 to the 1987 Form 10-K, which is incorporated herein by reference. 10 3.6 Amendment No. 5 to Amended and Restated Agreement of Limited Partnership of Concord Milestone Plus, L.P. included as Exhibit 3.6 to Registrant's Form 10-K for the fiscal year ended December 31, 1988, which is incorporated herein by reference. 31.1 Certification of the principal executive officer, pursuant to Rules 13a-14(a) or 15(d)-14(a) of the Securities Exchange Act of 1934, as amended. 31.2 Certification of the principal financial officer, pursuant to Rules 13a-14(a) or 15(d)-14(a) of the Securities Exchange Act of 1934, as amended. 32.1 Certifications of the principal executive officer, pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2 Certifications of the principal financial officer, pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 11 SIGNATURE 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. DATE: November 14, 2006 CONCORD MILESTONE PLUS, L.P. -------------------- ---------------------------- (Registrant) BY: CM PLUS CORPORATION ---------------------------------- General Partner By: /s/ Leonard Mandor ---------------------------------- Leonard Mandor President 12
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10QSB/A Filing
Concord Milestone Plus L P Inactive 10QSB/A2006 Q3 Quarterly report (small business) (amended)
Filed: 28 Nov 06, 12:00am