UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
/X/ Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934.
For the quarterly period ended: March 31, 2008.
________________
/__/ 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: 2-68926
________
DSI REALTY INCOME FUND VI, A California Limited Partnership
__________________________________________________________________
(Exact name of registrant as specified in its charter)
California 95-3633566
__________________________________________________________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6700 E. Pacific Coast Hwy, Long Beach, California 90803
__________________________________________________________________
(Address of principal executive offices) (Zip Code)
(562)493-8881
__________________________________________________________________
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes [X] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer, a non-accelerated filer, or a smaller reporting company.
See the definitions of "large accelerated filer," "accelerated filer" and
"smaller reporting company in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act).
Yes [ ] No [X]
The issuer is a limited partnership. All 23,753 limited partnership units
originally sold for $500 per unit. There is no trading market for the limited
partnership units.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
DSI REALTY INCOME FUND VI
(A Limited Partnership)
BALANCE SHEETS(UNAUDITED), MARCH 31, 2008 AND DECEMBER 31, 2007
March 31, December 31,
2008 2007
ASSETS
CASH AND CASH EQUIVALENTS $ 708,868 $ 670,913
PROPERTY,NET 1,559,225 1,570,680
OTHER ASSETS 279,781 223,588
---------- ----------
TOTAL $2,547,874 $2,465,181
========== ==========
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES
Distribution to Partners $209,938 $209,938
Incentive management fee
payable to general partners 15,324 0
Property management
fee payable 13,518 13,264
Customer deposits and
other liabilities 96,520 104,241
Capital lease obligation 30,481 41,076
-------- --------
Total liabilities 365,781 368,519
-------- --------
PARTNERS' EQUITY (DEFICIT):
General Partners (69,365) (70,220)
Limited Partners (23,753
limited partnership
units outstanding at
March 31, 2008 and
December 31, 2007) 2,251,458 2,166,882
--------- ---------
Total partners' equity 2,182,093 2,096,662
--------- ---------
TOTAL $2,547,874 $2,465,181
========= =========
See accompanying notes to financial statements (unaudited).
STATEMENTS OF INCOME (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007
March 31, March 31,
2008 2007
REVENUES:
Rental revenue $597,001 $626,364
Ancilary operating revenue 56,510 60,163
Interest and other income 25,170 193
-------- --------
Total expenses 678,681 686,720
-------- --------
EXPENSES:
Operating 304,735 295,905
General and administrative 78,577 86,765
-------- --------
Total expenses $383,312 $382,670
======== ========
NET INCOME $295,369 $304,050
======== ========
AGGREGATE NET INCOME ALLOCATED TO :
Limited partners $292,415 $301,010
General partners 2,954 3,040
-------- --------
TOTAL $295,369 $304,050
======== ========
NET INCOME PER
LIMITED PARTNERSHIP UNIT $12.31 $12.67
====== ======
LIMITED PARTNERSHIP
UNITS USED IN PER
UNIT CALCULATION 23,753 23,753
====== ======
See accompanying notes to financial statements (unaudited).
STATEMENT OF CHANGES IN PARTNERS' EQUITY (DEFICIT)(UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 2008
GENERAL LIMITED
PARTNERS PARTNERS TOTAL
BALANCE AT JANUARY 1, 2008 ($70,220) $2,166,882 $2,096,662
NET INCOME 2,954 292,415 295,369
DISTRIBUTIONS (2,099) (207,839) (209,938)
-------- ---------- ----------
BALANCE AT MARCH 31, 2008 ($69,365) $2,251,458 $2,182,093
======== ========== ==========
See accompanying notes to financial statements (unaudited).
STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007
March 31, March 31,
2008 2007
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $ 295,369 $ 304,050
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation 11,455 11,945
Changes in assets and liabilities:
Increase in other assets (56,193) (8,758)
Decrease in liabilities 7,857 (1,260)
--------- --------
Net cash provided by operating
activities 258,488 305,977
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES-
Distributions to partners (209,938) (209,938)
Payments on capital
lease obligations (10,595) (9,563)
--------- ---------
Net cash used in
financing obligations (220,533) (219,501)
--------- ---------
NET INCREASE IN CASH AND
CASH EQUIVALENTS 37,955 86,476
CASH EQUIVALENTS:
At beginning of period 670,913 622,755
--------- ---------
At end of period $ 708,868 $ 709,231
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION -
Cash paid for interest $ 655 $ 1,171
========= =========
NONCASH FINANCING ACTIVITIES -
Distribution due partners
included in partners' equity $ 209,938 $ 209,938
========= =========
See accompanying notes to financial statements (unaudited).
DSI REALTY INCOME FUND VI
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. GENERAL
DSI Realty Income Fund VI (the "Partnership"), a limited partnership, has two
general partners (DSI Properties, Inc., and Diversified Investors Agency)
and limited partners owning 23,753 limited partnership units. The Partnership
was formed under the California Uniform Limited Partnership Act for the
primary purpose of acquiring and operating real estate.
The accompanying financial information as of March 31, 2008, and for the periods
ended March 31, 2008 and 2007, is unaudited. Such financial information
includes all adjustments which are considered necessary by the Partnership's
management for a fair presentation of the results for the periods indicated.
2. PROPERTY
Properties owned by the Partnership are all mini-storage facilities.
Depreciation is calculated using the straight-line method over the estimated
useful life of 20 years. Property under capital leases is amortized over
the lives of the respective leases. The total cost of property and accumulated
depreciation at March 31, 2008, is as follows:
March 31, December 31,
2008 2007
Land $ 1,512,000 $ 1,512,000
Buildings and improvements 7,515,006 7,515,006
Rental trucks
under capital leases 161,181 161,181
----------- -----------
Total 9,188,187 9,188,187
Less: Accumulated Depreciation ( 7,628,962) ( 7,617,507)
----------- -----------
Property - Net $ 1,559,225 $ 1,570,680
=========== ===========
3. NET INCOME PER LIMITED PARTNERSHIP UNIT
Net income per limited partnership unit is calculated by dividing the
net income allocated to the limited partners by the number of limited
partnership units outstanding during the period.
4. ALLOCATION OF PROFITS AND LOSSES AND GENERAL PARTNERS' INCENTIVE
MANAGEMENT FEE
Under the Agreement of limited Partnership, the general partners are to
be allocated 1% of the net profits or losses from operations, and the
limited partners are to be allocated the balance of the net profits or
losses from operations in proportion to their limited partnership
interests.
The General Partners are also entitled to receive a percentage, based on
a predetermined formula, of any cash distribution from the sale, other
disposition or refinancing of the project.
In addition, the General Partners are entitled to receive an incentive
management fee for supervising the operations of the Partnership. The
fee is to be paid in an amount equal to 9% per annum of the cash available
for distribution on a cumulative basis, calculated as cash generated from
operations less capital expenditures.
5. RELATED-PARTY TRANSACTIONS
The Partnership has entered into a management agreement with Dahn to
operate its mini-storage facilities. The management agreement provides
for a management fee equal to 6% of gross revenue from operations, which
is defined as the entire amount of all receipts from the renting or
leasing of storage compartments and sale of locks. The management
agreement is renewable annually. Dahn earned management fees equal to
$40,717 and $41,210, for the three month periods ended March 31, 2008
and 2007, respectively. Amounts payable to Dahn at March 31, 2008 and
December 31, 2007, were $13,518 and $13,264, respectively.
In 2004, the Partnership entered into truck lease agreements with KMD
Trucks, LLC ("KMD"). The president of Dahn, Brian Dahn, is also a
member of KMD. Trucks are leased under 48-month leases with total
monthly payments in the amount of $3,457.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
We are pleased to enclose the Partnership's unaudited financial statements
for the period ended March 31, 2008. The following is Management's discussion
and analysis of the Partnership's financial condition and results of its
operations.
For the three-month periods ended March 31, 2008 and 2007, revenues decreased
1.2% from $686,720 to $678,681, total expenses increased 0.2% from $382,670 to
$383,312, resulting in a decrease in net income of 2.9% from $304,050 for the
three-month period ended March 31, 2007, to $295,369 for the same period in
2008. Rental revenues decreased primarily as a result of lower occupancy
and unit rental rates. Occupancy levels for the Partnership's six mini-storage
facilities averaged 80.8% for the three-month period ended March 31, 2008,
compared to 82.9% for the same period in 2007. The Partnership is continuing
its marketing efforts to attract and keep new tenants in its various mini-
storage facilities. Operating expenses increased approximately $8,800
(3.0%) primarily due to increases in advertising, real estate tax and salaries
and wages expense, partially offset by a decrease in repair and maintenance
expense. General and administrative expenses decreased approximately $8,200
(9.5%) primarily as a result of a decrease in incentive management fee expense.
In August 2007, the Partnership received a $25,000 non-refundable payment from
Industrial Waste and Debris Box Rental, Inc. for a six-month option to
purchase the Partnership's property in Santa Rosa, California. On January 28,
2008, the Partnership received notification that the option would not be
exercised and therefore the payment has been recorded as other income in the
current period.
The General Partners plan to continue their policy of funding the continuing
improvement and maintenance of Partnership properties with cash generated
from operations. The Partnership's resources appear to be adequate to meet
its needs for the next twelve months and beyond. The General Partners anti-
cipate distributions to the Limited Partners to remain at the current level
for the foreseeable future.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
NONE
Item 4. CONTROLS AND PROCEDURES
The Partnership evaluated the effectiveness of its disclosure controls and
procedures. This evaluation was performed by the Partnership's Controller
with the assistance of the Partnership's President and the Chief Executive
Officer. These disclosure controls and procedures are designed to ensure
that the information required to be disclosed by the Partnership in its
periodic reports filed with the Securities and Exchange Commission (the
Commission) is recorded, processed, summarized and reported, within the time
periods specified by the Commission's rules and forms, and that the inform-
ation is communicated to the certifying officers on a timely basis. Based on
this evaluation, the Partnership concluded that its disclosure controls and
procedures were effective. There have been no significant changes in the
Partnership's internal controls or in other factors that could significantly
affect the internal controls subsequent to the date of their evaluation.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Registrant is not a party to any material pending legal proceedings.
Item 1A. Risk Factors
Please refer to the risk factors disclosed by the partnership in
response to Item 1A, part I of the Form 10-KSB filed on April 15,
2008. There has been no material change to the risk factors
disclosed therein.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
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
(a) Exhibits
31.1 Rule 13a-14(a)/15d-14(a) Certifications of Chief Executive Officer
31.2 Rule 13a-14(a)/15d-14(a) Certifications of Principal Financial
Officer
32.1 Section 1350 Certifications by Principal Executive Officer and
Principal Financial Officer
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.
DSI REALTY INCOME FUND VI,
a California Limited Partnership
by: DSI Properties, Inc., a By: Diversified Investors Agency
California corporation, a general partnership,
as General Partner as General Partner
/s/ ROBERT J. CONWAY /s/ ROBERT J. CONWAY
By_____________________________ By_____________________________
Dated: May 15, 2008 Dated: May 15, 2008
ROBERT J. CONWAY, President, ROBERT J. CONWAY,
Chief Executive Officer, Chief General Partner
Financial Officer, and Director
/s/ JOSEPH W. CONWAY /s/ JOSEPH W. CONWAY
By_____________________________ By_____________________________
Dated: May 15, 2008 Dated: May 15, 2008
JOSEPH W. CONWAY, Executive JOSEPH W. CONWAY,
Vice President and Director General Partner
EXHIBIT 31.1
RULE 13A-14(A)/15D-14(A) CERTIFICATION
BY CHIEF EXECUTIVE OFFICER
I, Robert J. Conway, certify that:
1. I have reviewed this quarterly report on Form 10-Q of DSI Realty
Income Fund VI;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period cover-
ed by this report.
3. Based on my knowledge, the financial statements and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15e and 15d-15e) for the registrant and have:
a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our super-
vision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which this
annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures as of the end
of the period covered by this report based on such evaluation; and
c) disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal quarter (the registrant's fourth fiscal quarter in
the case of our annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting; and
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation of internal control over financial reporting,
to the registrant's auditors and general partners (or persons performing
the equivalent functions):
a) all significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's in-
ternal controls over financial reporting.
Date: May 15, 2008
/s/ ROBERT J. CONWAY
By_____________________________
ROBERT J. CONWAY, President,
Chief Executive Officer, Chief
Financial Officer, and Director
EXHIBIT 31.2
RULE 13A-14(A)/15D-14(A) CERTIFICATION
BY PRINCIPAL FINANCIAL OFFICER
I, Richard P. Conway, certify that:
1. I have reviewed this quarterly report on Form 10-Q of DSI Realty
Income Fund VI;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period cover-
ed by this report.
3. Based on my knowledge, the financial statements and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15e and 15d-15e) for the registrant and have:
a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our super-
vision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which this
annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures as of the end
of the period covered by this report based on such evaluation; and
c) disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal quarter (the registrant's fourth fiscal quarter in
the case of our annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting; and
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation of internal control over financial reporting,
to the registrant's auditors and general partners (or persons performing
the equivalent functions):
a) all significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's in-
ternal controls over financial reporting.
Date: May 15, 2008
/s/ RICHARD P. CONWAY
By_____________________________
RICHARD P. CONWAY, SR. VICE PRESIDENT
(PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER)
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of DSI Realty Income Fund VI (the
"Partnership") on Form 10-Q for the period ending March 31, 2008 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Robert J. Conway, Chief Executive Officer of the Corporate General Partner,
certify,pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the
Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Partnership.
/s/ ROBERT J. CONWAY
By_____________________________
ROBERT J. CONWAY,
Chief Executive Officer
May 15, 2008
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of DSI Realty Income Fund VI (the
"Partnership") on Form 10-Q for the period ending March 31, 2008 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Richard P. Conway, Senior Vice President of the Corporate General Partner,
certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the
Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Partnership.
/s/ RICHARD P. CONWAY
By_____________________________
Richard P. Conway
Senior Vice President
(Principal Financial and Accounting Officer)
May 15, 2008