UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB/A
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended September 30, 2002
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from _________to _________
Commission file number 0-15758
JACQUES-MILLER INCOME FUND, L.P. - II
(Exact name of small business issuer as specified in its charter)
Delaware 62-1244325
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
55 Beattie Place, PO Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
(Issuer's telephone number)
The issuer recently discovered that it had inadvertently omitted conformed
signatures on certain certifications included in its 10-QSB filing made November
14, 2002. Original signatures were complete and on file with the issuer at the
time the 10-QSB filing was made in November; however, due to a clerical error,
conformed signatures were not included in the electronic filing. This amendment
is being filed solely to correct this inadvertent clerical error.
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JACQUES-MILLER INCOME FUND, L.P. - II
BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
September 30, 2002
Assets
Cash and cash equivalents $ 51
Notes receivable from affiliated parties (net of
allowance of approximately $1,640) --
$ 51
Liabilities and Partners' (Deficit) Capital
Liabilities
Other liabilities $ 27
Partners' (Deficit) Capital
General partner $ (114)
Limited partners (12,400 units issued and
outstanding) 138 24
$ 51
See Accompanying Notes to Financial Statements
JACQUES-MILLER INCOME FUND, L.P. - II
STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per unit data)
Three Months Ended Nine Months Ended
September 30, September 30,
2002 2001 2002 2001
Revenues:
Recovery of bad debt $ -- $ -- $ -- $ 310
Interest income -- -- -- 18
Total revenues -- -- -- 328
Expenses:
General and administrative 15 14 66 54
Net (loss) income $ (15) $ (14) $ (66) $ 274
Net (loss) income allocated to
general partner (1%) $ (1) $ -- $ (1) $ 3
Net (loss) income allocated to
limited partners (99%) (14) (14) (65) 271
$ (15) $ (14) $ (66) $ 274
Net (loss) income per limited
partnership unit $(1.13) $(1.13) $(5.24) $21.85
Distributions per limited
partnership unit $ -- $ -- $ 6.69 $78.79
See Accompanying Notes to Financial Statements
JACQUES-MILLER INCOME FUND, L.P. - II
STATEMENT OF CHANGES IN PARTNERS' (DEFICIT) CAPITAL
(Unaudited)
(in thousands, except unit data)
Limited
Partnership General Limited
Units Partner Partners Total
Partners' (deficit) capital at
December 31, 2001 12,400 $ (112) $ 286 $ 174
Distributions to partners -- (1) (83) (84)
Net loss for the nine months
ended September 30, 2002 -- (1) (65) (66)
Partners' (deficit) capital
at September 30, 2002 12,400 $ (114) $ 138 $ 24
See Accompanying Notes to Financial Statements
JACQUES-MILLER INCOME FUND, L.P. - II
STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Nine Months Ended
September 30,
2002 2001
Cash flows from operating activities:
Net (loss) income $ (66) $ 274
Adjustments to reconcile net (loss) income to net cash
(used in) provided by operating activities:
Change in accounts:
Other assets 21 --
Other liabilities 20 6
Net cash (used in) provided by operating activities (25) 280
Cash flow used in financing activity:
Distribution to partners (84) (987)
Net decrease in cash and cash equivalents (109) (707)
Cash and cash equivalents at beginning of period 160 779
Cash and cash equivalents at end of period $ 51 $ 72
See Accompanying Notes to Financial Statements
JACQUES-MILLER INCOME FUND, L.P. - II
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited financial statements of Jacques-Miller Income Fund,
L.P. - II ("Partnership" or "Registrant") have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with the instructions to Form 10-QSB and Item 310(b) 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 Jacques-Miller, Inc. (the "Corporate General Partner"), all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. Operating results for the three and nine
month periods ended September 30, 2002, are not necessarily indicative of the
results that may be expected for the fiscal year ending December 31, 2002. For
further information, refer to the financial statements and footnotes thereto
included in the Partnership's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 2001. The Corporate General Partner is an affiliate of
Apartment Investment and Management Company ("AIMCO"), a publicly traded real
estate investment trust.
Note B - Notes Receivable from Affiliated Parties
Notes receivable consist of the following (in thousands):
September 30,
2002
Notes receivable $ 867
Accrued interest receivable 773
1,640
Provision for uncollectible notes
receivable (including
approximately $773 of
deferred interest revenue) (1,640)
$ --
The Partnership holds two notes receivable at September 30, 2002, totaling
approximately $867,000 with approximately $773,000 of related accrued interest,
all of which are fully reserved. Additionally, these two notes are past due from
related partnerships. These two promissory notes bear interest at 12.5%, and are
unsecured by the related partnerships and are subordinated to the underlying
mortgages of the respective partnerships.
One note in the amount of approximately $413,000 with accrued interest due in
the amount of approximately $512,000 (the "Catawba Club Note") matured November
1, 1997. During 2000, the first and second mortgages encumbering Catawba Club
were replaced with a new first mortgage. However, after payment of transaction
costs and establishing a repair escrow, as required by the lender, there were no
proceeds available for a payment on the Catawba Club Note. A second note in the
amount of approximately $454,000 with accrued interest due at September 30, 2002
in the amount of approximately $261,000 (the "Quail Run Note") matured June 1,
1997. Both of these notes were in default at September 30, 2002. The Partnership
recently obtained a default judgment with respect to these notes. The Corporate
General Partner is currently evaluating its options to collect upon this
judgment. Payments on these notes are restricted to excess cash flow after
payments of the first and second mortgages of the affiliated partnerships and
are dependent on excess cash flow from the properties or sales proceeds. No
payments on these two notes were received in the nine month period ended
September 30, 2002. During the nine months ended September 30, 2001, the
Partnership received a $310,000 payment for outstanding interest on the note
from Quail Run. Both notes are fully reserved.
During the nine months ended September 30, 2002, the Partnership forgave the
remaining debt of approximately $635,000 on the Highridge note. Highridge
Associates sold all of its investment properties during 2001 and was unable to
fully repay its debt to the Partnership. The Partnership received a payment of
approximately $125,000 on the Highridge note in December 2001.
Note C - Transactions with Affiliated Parties
Other than the notes receivable, as previously disclosed, the Partnership had
the following transactions:
An affiliate of the Corporate General Partner received reimbursements of
accountable administrative expenses amounting to approximately $37,000 and
$19,000 for the nine months ended September 30, 2002 and 2001, respectively,
which is included in general and administrative expenses. During 2002, an
affiliate of the Corporate General Partner determined that the Partnership
should be charged for reimbursements of accountable administrative expenses for
the year ended December 31, 2001. Approximately $21,000 for 2001 has been
included in the operating results for the nine months ended September 30, 2002.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for forward-looking statements in certain circumstances. The matters discussed
in this report contain certain forward-looking statements, including, without
limitation, statements regarding future financial performance and the effect of
government regulations. The discussions of the Registrant's business and results
of operations, including forward-looking statements pertaining to such matters,
do not take into account the effects of any changes to the Registrant's business
and results of operations. Actual results may differ materially from those
described in the forward-looking statements and will be affected by a variety of
risks and factors including, without limitation: national and local economic
conditions; the terms of governmental regulations that affect the Registrant and
interpretations of those regulations; the competitive environment in which the
Registrant operates; financing risks, including the risk that cash flows from
operations may be insufficient to meet required payments of principal and
interest; real estate risks, including variations of real estate values and the
general economic climate in local markets and competition for tenants in such
markets; and possible environmental liabilities. Readers should carefully review
the Registrant's financial statements and the notes thereto, as well as the risk
factors described in the documents the Registrant files from time to time with
the Securities and Exchange Commission.
Results of Operations
The Partnership's net loss for the three and nine months ended September 30,
2002 was approximately $15,000 and $66,000 compared to a net loss of
approximately $14,000 and net income of approximately $274,000 for the three and
nine months ended September 30, 2001. The increase in net loss for the nine
months ended September 30, 2002, is attributable to a decrease in total revenues
and an increase in total expenses. The increase in net loss for the three months
ended September 30, 2002, is attributable to a slight increase in total expenses
while total revenues remained relatively constant. The decrease in total
revenues for the nine months ended September 30, 2002 is attributable to an
interest payment received on Quail Run's fully reserved note during the nine
months ended September 30, 2001 and a decrease in interest income as a result of
lower average cash balances held in interest bearing accounts. The increase in
total expenses for the three and nine months ended September 30, 2002 is
attributable to an increase in administrative expenses. During 2002, an
affiliate of the Corporate General Partner determined that the Partnership
should be charged for reimbursements of accountable administrative expenses for
the year ended December 31, 2001. Approximately $21,000 for 2001 has been
included in the operating results for the nine months ended September 30, 2002.
The Partnership currently holds two notes from affiliated partnerships, which
require payments from excess cash flow after payments of first and second
mortgages of the affiliated partnerships (see discussion below).
Liquidity and Capital Resources
At September 30, 2002, the Partnership held cash and cash equivalents of
approximately $51,000 as compared to approximately $72,000 at September 30,
2001. The decrease in cash and cash equivalents of approximately $109,000 from
the Partnership's year ended December 31, 2001, is due to approximately $84,000
of cash used in financing activities and approximately $25,000 of cash used in
operating activities. Cash used in financing activities consisted of
distributions to the partners. The Partnership invests its working capital
reserves in interest bearing accounts.
The Corporate General Partner monitors developments in the area of legal and
regulatory compliance and is studying new federal laws, including the
Sarbanes-Oxley Act of 2002. The Sarbanes-Oxley Act of 2002 mandates or suggests
additional compliance measures with regard to governance, disclosure, audit and
other areas. In light of these changes, the Partnership expects that it will
incur higher expenses related to compliance, including increased legal and audit
fees.
The Partnership holds two notes receivable at September 30, 2002, totaling
approximately $867,000 with approximately $773,000 of related accrued interest,
all of which is fully reserved. Included in the provision for uncollectible
notes receivable is approximately $773,000 of deferred interest revenue.
Additionally, these two notes are past due from related partnerships. These two
promissory notes are unsecured by the related partnerships and are subordinated
to the underlying mortgages of the respective partnerships.
One note in the amount of approximately $413,000 with accrued interest due in
the amount of approximately $512,000 (the "Catawba Club Note") matured November
1, 1997. During 2000, the first and second mortgages encumbering Catawba Club
were replaced with a new first mortgage. However, after payment of transaction
costs and establishing a repair escrow, as required by the lender, there were no
proceeds available for a payment on the Catawba Club Note. A second note in the
amount of approximately $454,000 with accrued interest due at September 30, 2002
in the amount of approximately $261,000 (the "Quail Run Note") matured June 1,
1997. Both of these notes were in default at September 30, 2002. The Partnership
recently obtained a default judgment with respect to these notes. The Corporate
General Partner is currently evaluating its options to collect upon this
judgment. Payments on these notes are restricted to excess cash flow after
payments of the first and second mortgages of the affiliated partnerships and
are dependent on excess cash flow from the properties or sales proceeds. No
payments on these two notes were received in the nine month period ended
September 30, 2002. During the nine months ended September 30, 2001, the
Partnership received a $310,000 payment for outstanding interest on the note
from Quail Run. Both notes are fully reserved.
During the nine months ended September 30, 2002, the Partnership forgave the
remaining debt of approximately $635,000 on the Highridge note. Highridge
Associates sold all of its investment properties during 2001 and was unable to
fully repay its debt to the Partnership. The Partnership received a payment of
approximately $125,000 on the Highridge note in December 2001.
Nine Months Per Nine Months Per
Ended Limited Ended Limited
September 30, Partnership September 30, Partnership
2002 Unit 2001 Unit
Note
Repayments (1) $ 84 $ 6.69 $ 376 $30.00
Sale (2) -- -- 611 48.79
$ 84 $ 6.69 $ 987 $78.79
(1) From note repayments from Highridge Associates and from note repayments
from Quail Run during 2001 and Woodlawn Village during 2000,
respectively.
(2) From the sale of La Plaza.
Future cash distributions will depend on the levels of net cash generated from
the collection of notes receivable and the availability of cash reserves. The
Partnership's cash available for distribution is reviewed on a monthly basis.
There can be no assurance, however, that the Partnership will generate
sufficient funds from collections of notes receivable to permit further
distributions to its partners during the remainder of 2002 or subsequent
periods.
Other
In addition to its indirect ownership of the general partner interests in the
Partnership, AIMCO and its affiliates owned 4,059.01 limited partnership units
(the "Units") in the Partnership representing 32.74% of the outstanding Units at
September 30, 2002. A number of these Units were acquired pursuant to tender
offers made by AIMCO or its affiliates. It is possible that AIMCO or its
affiliates will acquire additional units of limited partnership interest in the
Partnership in exchange for cash or a combination of cash and units in the
operating partnership of AIMCO either through private purchases or tender
offers. Under the Partnership Agreement, unitholders holding a majority of the
Units are entitled to take action with respect to a variety of matters which
would include voting on certain amendments to the Partnership Agreement and
voting to remove the Corporate General Partner. Although the Corporate General
Partner owes fiduciary duties to the limited partners of the Partnership, the
Corporate General Partner also owes fiduciary duties to AIMCO as its sole
stockholder. As a result, the duties of the Corporate General Partner, as
corporate general partner, to the Partnership and its limited partners may come
into conflict with the duties of the Corporate General Partner to AIMCO, as its
sole stockholder.
ITEM 3. CONTROLS AND PROCEDURES
The principal executive officer and principal financial officer of the Corporate
General Partner, who are the equivalent of the Partnership's principal executive
officer and principal financial officer, respectively, have, within 90 days of
the filing date of this quarterly report, evaluated the effectiveness of the
Partnership's disclosure controls and procedures (as defined in Exchange Act
Rules (13a-14(c) and (15d-14(c)) and have determined that such disclosure
controls and procedures are adequate. There have been no significant changes in
the Partnership's internal controls or in other factors that could significantly
affect the Partnership's internal controls since the date of evaluation. The
Partnership does not believe any significant deficiencies or material weaknesses
exist in the Partnership's internal controls. Accordingly, no corrective actions
have been taken.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
3.1 Partnership Agreement, incorporated herein by reference
to the Partnership's Registration Statement, dated
October 16, 1985 (2-99745), as filed pursuant to Rule
424(b)(the "Registration Statement")
4 Form of Certificate representing interests in the
Partnership, incorporated herein by reference to Exhibit
4 to the Registration Statement on Form S-11 dated
October 16, 1985, Registration Number 2-99745 is
incorporated herein by reference.
99 Certificate of Chief Executive Officer and Chief Financial
Officer.
b) Reports on Form 8-K:
None filed during the quarter ended September 30, 2002.
SIGNATURE
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
JACQUES-MILLER INCOME FUND, L.P. - II
By: Jacques-Miller, Inc
Corporate General Partner
By: /s/Patrick J. Foye
Patrick J. Foye
President and Treasurer
By: /s/Thomas C. Novosel
Thomas C. Novosel
Senior Vice President
and Chief Accounting Officer
Date: January 9, 2003
CERTIFICATION
I, Patrick J. Foye, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Jacques-Miller Income
Fund, L.P.-II;
2. Based on my knowledge, this quarterly 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 covered by this quarterly
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-14 and 15d-14) for the registrant and we have:
a) Designed such disclosure controls and procedures 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 quarterly report is
being prepared;
b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
a) All significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: November 13, 2002
/s/Patrick J. Foye
Patrick J. Foye
President and Treasurer of Jacques-Miller,
Inc., equivalent of the chief executive officer
of the Partnership
CERTIFICATION
I, Paul J. McAuliffe, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Jacques-Miller Income
Fund, L.P.-II;
2. Based on my knowledge, this quarterly 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 covered by this quarterly
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-14 and 15d-14) for the registrant and we have:
a) Designed such disclosure controls and procedures 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 quarterly report is
being prepared;
b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
a) All significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: November 13, 2002
/s/Paul J. McAuliffe
Paul J. McAuliffe
Executive Vice President, Chief Financial
Officer and Secretary of Jacques-Miller, Inc.,
equivalent of the chief financial officer of
the Partnership
Exhibit 99
Certification of CEO and CFO
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 on Form 10-QSB of Jacques Miller Income
Fund, L.P. II (the "Partnership"), for the quarterly period ended September 30,
2002 as filed with the Securities and Exchange Commission on the date hereof
(the "Report"), Patrick J. Foye, as the equivalent of the chief executive
officer of the Partnership, and Paul J. McAuliffe, as the equivalent of the
chief financial officer of the Partnership, each hereby certifies, pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that, to the best of his knowledge:
(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 results of operations
of the Partnership.
/s/Patrick J. Foye
Name: Patrick J. Foye
Date: November 13, 2002
/s/Paul J. McAuliffe
Name: Paul J. McAuliffe
Date: November 13, 2002
This certification accompanies the Report pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the
Sarbanes-Oxley Act of 2002, be deemed filed by the Partnership for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended.