U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-QSB
(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, 2000
( ) Transition Report Under Section 13 or 15(d) of the Exchange
Act For the Transition period from __________ to _________
Commission File Number: 0-17600
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Common Goal Health Care Participating Mortgage Fund L.P.
(Exact name of small business issuer as specified in its charter)
Delaware 52-1475268
- ---------------------------------- ------------------
(State or other Jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
215 Main Street
Penn Yan, New York, 14527
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(Address of principal executive offices)
(315) 536-5985
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(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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
PART 1 - Financial Information
Item 1. Financial Statements
COMMON GOAL HEALTH CARE PARTICIPATING MORTGAGE FUND L.P.
(A Delaware Limited Partnership)
Balance Sheets
Septermber 30, December 31,
2000 1999
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(Unaudited)
Assets
------
Cash and cash equivalents $ 718,424 $ 381,677
Accrued interest receivable 3,662 85,233
Mortgage loan receivable 1,153,254 1,795,309
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Total Assets $1,875,340 $2,262,219
========== ==========
Liabilities and Partners' Capital
---------------------------------
Liabilities
Accounts payable and accrued expenses $ -- $ --
Due to affiliates 181,780 110,509
Deferred Revenue 227,645 227,645
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Total liabilities 409,425 338,154
Partners' capital:
General partners 71,379 70,542
Limited partners 1,394,536 1,853,523
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Total partners' capital 1,465,915 1,924,065
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Total Liabilities and Partners' Capital $1,875,340 $2,262,219
========== ==========
See accompanying notes
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COMMON GOAL HEALTH CARE PARTICIPATING MORTGAGE FUND L.P.
(A Delaware Limited Partnership)
Statements of Operations
(Unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED
Sept 30, Sept 30, Sept 30, Sept 30,
2000 1999 2000 1999
---- ---- ---- ----
Revenue
- -------
Interest Income $ 20,506 $ 50,624 133,852 150,296
----------- ----------- ----------- -----------
Total Revenue 20,506 50,624 133,852 150,296
Expenses
- --------
Professional fees 16,296 25,151 72,541 56,206
Fees to affiliates:
Management 4,463 5,401 14,327 16,202
Mortgage servicing 503 979 2,463 2,939
Other 355 569 2,671 3,009
----------- ----------- ----------- -----------
Total Expenses 21,617 32,100 92,002 78,356
Net Loss and
Comprehensive Income $ (1,111) $ 18,524 $ 41,850 $ 71,940
----------- ----------- ----------- -----------
Net Loss allocated to
general partners - 2% $ (22) $ 371 $ 837 $ 1,439
Net Loss allocated to
limited partners - 98% (1,089) 18,153 41,013 70,501
----------- ----------- ----------- -----------
$ (1,111) $ 18,524 $ 41,850 $ 71,940
=========== =========== =========== ===========
Basic earnings per limited
partner unit $ .00 $ .01 $ .02 $ .04
=========== =========== =========== ===========
Weighted average limited 1,911,411 1,911,411 1,911,411 1,911,411
partner units outstanding =========== =========== =========== ===========
See accompanying notes.
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COMMON GOAL HEALTH CARE PARTICIPATING MORTGAGE FUND L.P.
(A Delaware Limited Partnership)
Statements of Partners' Capital
(Unaudited)
NINE MONTHS ENDED
SEPTEMBER 30,
2000 1999
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TOTAL TOTAL
GENERAL LIMITED PARTNERS' GENERAL LIMITED PARTNERS'
PARTNERS PARTNERS CAPITAL PARTNERS PARTNERS CAPITAL
---------------------------------------- ---------------------------------------
Balance at beginning of period $ 70,542 $ 1,853,523 $ 1,924,065 $ 67,204 $ 1,689,939 $ 1,757,143
Net income 837 41,013 41,850 1,439 70,501 71,940
Distributions to partners -- (500,000) (500,000) -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Balance at end of period $ 71,379 $ 1,394,536 $ 1,465,915 $ 68,643 $ 1,760,440 $ 1,829,083
=========== =========== =========== =========== =========== ===========
See accompanying notes.
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COMMON GOAL HEALTH CARE PARTICIPATING MORTGAGE FUND L.P.
(A Delaware Limited Partnership)
Statements of Cash Flows
(Unaudited)
NINE MONTHS ENDED
-----------------
SEPTEMBER 30, SEPTEMBER 30,
2000 1999
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Cash flows from operating activities:
Net income $ 41,850 $ 71,940
Adjustments to reconcile net income to net cash
provided by operating activities:
Decrease (increase) in interest receivable 81,571 (16,183)
Increase (decrease) in due to affiliates 71,271 15,397
Decrease (increase) in mortgage
loan receivable 642,055 --
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Net cash provided by operating activities 836,747 71,154
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Cash used in financing activities:
Distribution to limited partners (500,000) --
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Net cash used in financing activities (500,000) --
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Net increase in cash and cash equivalents: 336,747 71,154
Cash and cash equivalents, beginning of period 381,677 241,487
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Cash and cash equivalents, end of period $ 718,424 $ 312,641
========= =========
See accompanying notes.
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COMMON GOAL HEALTH CARE
PARTICIPATING MORTGAGE FUND L.P.
(A Delaware Limited Partnership)
Notes to Financial Statements
(Unaudited)
September 30, 2000
(1) Organization and Summary of Significant Accounting, Policies
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Common Goal Health Care Participating Mortgage Fund L.P. (the
"Partnership") was formed on August 20, 1986 to invest in and make
mortgage loans to third parties involved in health care. On February
20, 1987, the Partnership commenced a public offering of limited
partner units (the "Public Offering"). On July 21, 1987, the
Partnership commenced operations, having previously sold more than the
specified minimum of 116,000 units ($1,160,000). The Partnership's
offering terminated on February 20, 1989 with the Partnership having
sold the specified maximum of 1,912,911 units ($19,129,110). The
Partnership has one remaining mortgage loan in its portfolio. The loan
matures in January 2001 after which the General Partner expects to
begin an orderly liquidation and dissolution of the Partnership.
The general partners are Common Goal Capital Group, Inc. as the
managing general partner and Common Goal Limited Partnership I as the
minority general partner. Under the terms of the Partnership's
agreement of limited partnership, (the "Partnership Agreement") the
general partners are not required to make any additional capital
contributions except under certain limited circumstances upon
termination of the Partnership.
Under the terms of the Partnership Agreement, the Partnership is
required to pay a quarterly management fee to the managing general
partner equal to .75% per annum of adjusted contributions, as defined.
Additionally, a mortgage servicing fee equal to .25% per annum of the
Partnership's outstanding mortgage loan principal amount is to be paid
to Common Goal Mortgage Company, an affiliate of the general partners.
Additionally, under the terms of the Partnership Agreement, the
Partnership is required to reimburse the managing general partner for
certain operating expenses.
The Partnership classifies all short-term investments with maturities
at dates of purchase of three months or less as cash equivalents.
Mortgage loans that have virtually the same risk and potential rewards
as joint ventures are accounted for and classified as investments in
operating properties. Cash received related to investments in
operating properties is recognized as interest income to the extent
that such properties have earnings prior to the recognition of the
distribution of cash to the Partnership; otherwise, such cash is
recorded as a reduction of the related investments.
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Management considers the necessity of reserving an allowance for loan
losses based upon an evaluation of known and inherent risks in the
loan portfolio. Management believed no allowance was necessary as of
September 30, 2000.
No provision for income taxes has been recorded, as the liability for
such taxes is that of the partners rather than the Partnership.
Earnings per limited partner unit are computed based on the weighted
average limited partner units outstanding for the period.
The accompanying unaudited financial statements as of and for the
three and nine months ended September 30, 2000, and 1999 are the
representation of management and reflect all adjustments which are, in
the opinion of management, necessary for a fair presentation of the
financial position and results of operations of the Partnership. Such
adjustments are normal and recurring. The results are not necessarily
indicative of the results for the entire year.
These financial statements should be read in conjunction with the
Company's financial statements and notes included in the Annual Report
on Form 10-KSB filed by the Company with the Securities and Exchange
Commission on April 14, 2000.
(2) Mortgage Loan Receivable
------------------------
Information concerning mortgage loan receivable as of September 30,
2000, is as follows:
Face and
Basic Carrying
Interest Maturity Amount of
Description Rate Date Mortgage
---- ---- --------
Honeybrook loan 10.5%(1) January 1, 2001 1,153,254
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$ 1,153,254
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(1) The interest rate was modified from 13.7% to 10.5% effective April
1, 2000. The loan is a second mortgage loan secured by healthcare
related real properties. Interest is payable monthly with the
principal balance generally due at maturity. The carrying value of the
mortgage loan for tax purposes is the same as that for financial
reporting purposes. As of September 30, 2000, the loan was current
as to required regular interest payments. On February 14, 2000,
the Borrowers repaid $500,000 of the outstanding balance of the
Joint Venture Loan ($57,945 of which was used to pay down the Common
Goal II portion of the Joint Venture Loan, including $7,355 of
participation.
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interest). On April 11, 2000, the Lender and Borrower agreed to pay
Additional Interest of $235,000, of which $200,000 was paid on May 5,
2000 and $35,000 will be paid when the loan matures on January 1,
2001. The Partnership received all but $7,355 of the Additional
Interest, which amount was paid to Common Goal II on May 5, 2000.
Item 2. Management's Discussion and Analysis or Plan of 0perations
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General
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Some statements in this Form 10-QSB are forward looking and actual
results may differ materially from those stated. As discussed herein,
among the factors that may affect actual results are changes in the
financial condition of the borrower and/or anticipated changes in
expenses or capital expenditures.
Common Goal Health Care Participating Mortgage Fund L.P., a Delaware
limited partnership (the "Partnership"), was formed to make mortgage
loans secured by real property (the "Mortgage Loan") comprised of a
mix of first and junior Mortgage Loans, secured by health-care related
properties.
Liquidity and Capital Resources
-------------------------------
The Partnership has structured its Mortgage Loans to provide for
payment of quarterly distributions from investment income. The
interest derived from the Mortgage Loans, repayments of Mortgage Loans
and interest earned on short-term investments contribute to the
Partnership's liquidity. These funds are used to make cash
distributions to Limited Partners, to pay normal operating expenses as
they arise.
Partnership assets decreased from $2,262,219 at December 31, 1999 to
$1,875,340 at September 30, 2000. The decrease of $ 386,879 resulted
primarily from cash distributions made to limited partners during the
period. As of September 30, 2000, the Partnership's loan portfolio
consisted of one mortgage loan, the aggregate outstanding principal
balance of which was $1,153,254.
The Partnership's balance of cash and cash equivalents at September
30, 2000 and December 31, 1999 was $718,424 and $381,677,
respectively, which consisted of operating cash and working capital
reserves. The increase in cash and cash equivalents of $336,747 from
December 31, 1999 resulted from net income of $41,850, a decrease in
interest receivable of $81,571, an increase in due to affiliates of
$71,271, and a decrease in the mortgage loan receivable of $642,055.
The Partnership is required to maintain reserves not less than 1% of
gross offering proceeds (not less than $191,201), but currently
maintains a reserve significantly in excess of that amount, pending
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distribution to the Limited Partners. The Managing General Partner
expects to make a cash distribution of a significant portion of the
excess over required reserves during the fourth quarter.
The Managing General Partner continues to monitor the level of working
capital reserves and may adjust the reserves as necessary to meet the
Partnership's reserve requirements. However, the General Partner
intends to commence an orderly liquidation and dissolution of the
Partnership after the Partnership's remaining mortgage loan matures in
January 2001.
The Partnership's success and the resultant rate of return to holders
of units of limited partnership interests are dependent upon, among
other things, the performance of the Partnership's last Mortgage Loan.
Results of Operations
---------------------
As of September 30, 2000, the Partnership had one Mortgage Loan. The
Partnership invests all available funds (funds not invested in
Mortgage Loans) in short term, temporary investments pending
application to Partnership uses or distributions to limited partners.
The interest earned on these investments has been and is expected to
continue to be less than the interest rates achievable on Mortgage
Loans made by the Partnership. During the nine months ended September
30, 2000, and 1999, the Partnership had net earnings of $41,850 and
$71,940 based on total revenues of $133,852 and $150,296 and total
expenses of $92,002 and $78,356, respectively. For the nine months
ended September 30, 2000 and 1999, the net earnings per limited
partner unit was $.02 and,. $04, respectively. For the three months
ended September 30, 2000 and 1999, the Partnership net (loss) earnings
of $(1,111) and $18,524 based on total revenue of $20,506 and $50,624
and total expenses of $21,617 and $32,100, respectively. For the three
months ended September 30, 2000 and 1999, the net (loss) earnings per
limited partner unit was $.00 and $.01 respectively.
The decrease in net earnings of $30,090 for the nine months ended
September 30, 2000, compared to the nine months ended September 30,
1999, is primarily due to a decrease in interest income of $16,444
combined with an increase of $16,335 in professional fees. The
one remaining Mortgage Loan was current as to regular interest as of
September 30, 2000.
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PART II - Other Information
Items 1 through 5 are omitted because of the absence of conditions under which
they are required.
Item 6 Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 27, Financial Data Schedule
(b) Reports on Form 8-K
None
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SIGNATURES
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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.
Common Goal Health Care Participating Mortgage Fund L.P.
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(Registrant)
By: Common Goal Capital Group, Inc.,
Managing General Partner
DATED: November 14, 2000 /s/Albert E. Jenkins, III
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Albert E. Jenkins, III
President, Chief Executive Officer
and Acting Chief Financial Officer
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