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 JUNE 30, 2002
( ) TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
Commission File Number: 33-69996
COMMONWEALTH INCOME & GROWTH FUND III
(Exact name of registrant as specified in its charter)
Pennsylvania 23-2895714
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
470 John Young Way Suite 300
Exton, PA 19341
(Address, including zip code, of principal executive offices)
(610) 594-9600
(Registrant's telephone number including area code)
Indicate by check mark whether the registrant (i) 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, and (III) has been subject to such filing
requirements for the past 90 days:
YES [X] NO [ ]
Commonwealth Income & Growth Fund III
Balance Sheets
June 30 December 31,
2002 2001
---------------------------------------------
(unaudited)
Assets
Cash and cash equivalents $ 35,883 $ 5,105
Lease income receivable, net of allowance for doubtful 56,346 42,297
accounts reserve of $23,976 as of June 30, 2002
and $0 at December 31, 2001
Other receivables - General Partner 16,456 -
Other receivables - affiliated limited partnerships 4,847 -
Prepaid fees 3,000 -
---------------------------------------------
116,532 47,402
---------------------------------------------
Computer equipment, at cost 2,911,255 3,538,347
Accumulated depreciation (1,835,692) (2,191,099)
---------------------------------------------
1,075,563 1,347,248
---------------------------------------------
Equipment acquisition costs and deferred expenses, net 29,969 32,959
---------------------------------------------
Total assets $ 1,222,064 $ 1,427,609
=============================================
Liabilities and Partners' Capital
Liabilities
Accounts payable 28,338 26,929
Accounts payable - affiliated limited partnerships - 2,113
Accounts payable - General Partner - 91,446
Accounts payable - Commonwealth Capital Corp. 2,949 25,140
Distributions Payable 69,884 -
Unearned lease income 84,258 -
Notes payable 366,526 344,324
---------------------------------------------
Total liabilities 551,955 489,952
---------------------------------------------
Partners' Capital
General partner 1,000 1,000
Limited partners 669,109 936,657
---------------------------------------------
Total partners' capital 670,109 937,657
---------------------------------------------
Total Liabilities and partners' capital $ 1,222,064 $ 1,427,609
=============================================
see accompanying notes to financial statements
Commonwealth Income & Growth Fund III
Statements of Income
Three Months Ended Six Months Ended
June 30 June 30
2002 2001 2002 2001
-----------------------------------------------------------------------
(unaudited) (unaudited)
Income
Lease $ 182,343 $ 252,920 $ 456,843 $ 571,524
Interest and other 116 1,407 250 3,857
Gain on sale of computer equipment 4,123 - 9,117 -
-----------------------------------------------------------------------
Total Income 186,582 254,327 466,210 575,381
-----------------------------------------------------------------------
Expenses
Operating, excluding depreciation 64,933 41,516 126,929 121,565
Equipment management fee - General Partner 9,117 12,454 22,842 28,385
Interest 5,287 13,108 10,848 26,539
Depreciation 170,110 241,926 373,804 480,043
Amortization of equipment
acquisition costs and deferred expenses 5,865 11,391 16,610 24,208
Bad debt expense 15,976 - 23,976 -
-----------------------------------------------------------------------
Total expenses 271,288 320,395 575,009 680,740
-----------------------------------------------------------------------
Net (loss) $ (84,706) $ (66,068) $ (108,799) $ (105,359)
=======================================================================
Net (loss) per equivalent limited
partnership unit $ (0.56) $ (0.44) $ (0.72) $ (0.70)
=======================================================================
Weighted Average number of equivalent limited
partnership units outstanding during the period 151,178 151,178 151,178 151,178
=======================================================================
see accompanying notes to financial statements
Commonwealth Income & Growth Fund III
Statements of Partners' Capital
For the Six Months ended June 30, 2002
(unaudited)
General Limited
Partner Partner General Limited
Units Units Partner Partner Total
----------------------------------------------------------------------------------------
Partners' capital - December 31, 2001 50 151,178 $ 1,000 $936,657 $937,657
Net income (loss) 1,567 (110,366) (108,799)
Distributions (1,567) (157,182) (158,749)
----------------------------------------------------------------------------------------
Partners' capital - June 30, 2002 50 151,178 $ 1,000 $ 669,109 $670,109
========================================================================================
see accompanying notes to financial statements
Commonwealth Income & Growth Fund III
Statements of Cash Flow
For the Six Months Ended June 30, 2002 and 2001
2002 2001
--------------------------------------
Operating activities (unaudited)
Net (loss) $ (108,799) $ (105,359)
Adjustments to reconcile net (loss) to net cash
provided by operating activities
Depreciation and amortization 390,414 504,251
Allowance for bad debt 23,976 -
(Gain) on sale of computer equipment (9,117) -
Other noncash activities included in
determination of net income (198,211) (287,659)
Changes in assets and liabilities
(Increase) decrease in assets
Lease income receivable (38,025) 58,800
Other receivable, General Partner (16,456) 28,764
Other receivables - Affiliated limited partnerships (6,960) -
Prepaid fees (3,000) 10,000
Increase (decrease) in liabilities
Accounts payable 1,409 13,239
Accounts payable, Common Capital Corp. (22,191) 16,662
Accounts payable, General Partner (91,446) -
Unearned lease income 84,258 -
---------------------------------
Net cash provided by operating activities 5,852 238,698
---------------------------------
Investing activities:
Capital Expenditures (64,989) (147,553)
Net proceeds from the sale of computer equipment 192,400 -
Equipment acquisition fees paid to General Partner (11,416) (10,970)
---------------------------------
Net cash provided by (used in) investing activities 115,995 (158,523)
---------------------------------
Financing activities:
Distributions to partners (88,865) (158,749)
Debt Placement fee paid to the General Partner (2,204) (1,202)
---------------------------------
Net cash (used in) financing activities (91,069) (159,951)
---------------------------------
Net increase (decrease) in cash and equivalents 30,778 (79,776)
Cash and cash equivalents, beginning of period 5,105 110,730
---------------------------------
Cash and cash equivalents, end of period $ 35,883 $ 30,954
=================================
see accompanying notes to financial statements
NOTES TO FINANCIAL STATEMENTS
1. Business Commonwealth Income & Growth Fund III (the "Partnership") is a
limited partnership organized in the Commonwealth of
Pennsylvania. The Partnership offered for sale up to 750,000
Units of the limited partnership at the purchase price of $20
per unit (the "Offering"). The Offering was terminated at the
close of business on July 31, 2000 by the General Partner. The
Partnership used the proceeds of the Offering to acquire, own
and lease various types of computer peripheral equipment and
other similar capital equipment, which will be leased
primarily to U.S. corporations and institutions. Commonwealth
Capital Corp, on behalf of the Partnership and other
affiliated partnerships, acquires computer equipment subject
to associated debt obligations and lease revenue and allocates
a participation in the cost, debt and lease revenue to the
various partnerships based on certain risk factors. The
Partnership's General Partner is Commonwealth Income & Growth
Fund, Inc. (the "General Partner"), a Pennsylvania corporation
which is an indirect wholly owned subsidiary of Commonwealth
Capital Corp. Approximately ten years after the commencement
of operations, the Partnership intends to sell or otherwise
dispose of all of its computer equipment, make final
distributions to partners, and to dissolve. Unless sooner
terminated, the Partnership will continue until December 31,
2009.
2. Summary of Basis of Presentation
Significant
Accounting The financial information presented as of any date other than
Policies December 31 has been prepared from the books and records
without audit. Financial information as of December 31 has
been derived from the audited financial statements of the
Partnership, but does not include all disclosures required by
generally accepted accounting principles. In the opinion of
management, all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of
the financial information for the periods indicated have been
included. For further information regarding the Partnership's
accounting policies, refer to the financial statements and
related notes included in the Partnership's annual report on
Form 10-K for the year ended December 31, 2001. Operating
results for the six-month period ended June 30, 2002 are not
necessarily indicative of financial results that may be
expected for the full year ended December 31, 2002.
Revenue Recognition
Through June 30, 2002, the Partnership has only entered into
operating leases. Lease revenue is recognized on a monthly
basis in accordance with the terms of the operating lease
agreements.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those
estimates.
Long-Lived Assets
The Partnership evaluates its long-lived assets when events or
circumstances indicate that the value of the asset may not be
recoverable. The Partnership determines whether an impairment
exists by estimating the undiscounted cash flows to be
generated by each asset. If the estimated undiscounted cash
flows are less than the carrying value of the asset then an
impairment exists. The amount of the impairment is determined
based on the difference between the carrying value and the
fair value. The fair value is determined based on estimated
discounted cash flows to be generated by the asset. As of June
30, 2002, there is no impairment.
Depreciation on computer equipment for financial statement
purposes is based on the straight-line method over estimated
useful lives of four years.
Intangible Assets
Equipment acquisition costs and deferred expenses are
amortized on a straight-line basis over two- to-four year
lives. Unamortized acquisition fees are charged to
amortization expense when the associated leased equipment is
sold.
Cash and Cash Equivalents
The Company considers all highly liquid investments with a
maturity of six months or less to be cash equivalents. At June
30, 2002, cash equivalents were invested in a money market
fund investing directly in Treasury obligations.
Income Taxes
The Partnership is not subject to federal income taxes;
instead, any taxable income (loss) is passed through to the
partners and included on their respective income tax returns.
Taxable income differs from financial statement net income as
a result of reporting certain income and expense items for tax
purposes in periods other than those used for financial
statement purposes, principally relating to depreciation,
amortization, and lease income.
Offering Costs
Offering costs are payments for selling commissions, dealer
manager fees, professional fees and other offering expenses
relating to the syndication. Selling commissions are 7% of the
partners' contributed capital and dealer manager fees are 2%
of the partners' contributed capital. These costs have been
deducted from partnership capital in the accompanying
financial statements.
Net Income (Loss) Per Equivalent Limited Partnership Unit
The net income (loss) per equivalent limited partnership unit
is computed based upon net income (loss) allocated to the
limited partners and the weighted average number of equivalent
units outstanding during the period.
3. Computer The Partnership is the lessor of equipment under operating
Equipment leases with periods ranging from 12 to 36 months. In general,
the lessee pays associated costs such as repairs and
maintenance, insurance and property taxes.
The Partnership's share of the computer equipment in which
they participate with other partnerships at June 30, 2002 and
December 31, 2001 was approximately $993,000 and $878,000,
respectively, which is included in the Partnership's fixed
assets on their balance sheet, and the total cost of the
equipment shared by the Partnership with other partnerships at
June 30, 2002 and December 31, 2001 was approximately
$3,855,000 and $3,226,000, respectively. The Partnership's
share of the outstanding debt associated with this equipment
at June 30, 2002 and December 31, 2001 was approximately
$213,000 and $181,000, respectively, which is included in the
Partnership's liabilities on the balance sheet, and the total
outstanding debt at June 30, 2002 and December 31, 2001
related to the equipment shared by the Partnership was
approximately $1,637,000 and $1,462,000, respectively.
The following is a schedule of future minimum rentals on
noncancellable operating leases at June 30, 2002:
Amount
--------------------------------------------------------
Six Months ended December 31, 2002 $ 285,000
Year Ended December 31, 2003 350,000
Year Ended December 31, 2004 103,000
Year Ended December 31, 2005 14,000
---------
$ 752,000
=======================================================
4. Notes Payable Notes payable consisted of the following:
June 30, December 31,
2002 2001
----------------------------------------------------------------------------------
Installment notes payable to banks; interest
ranging from 7.42% to 8.10%, due in monthly
installments ranging from $515 to $1,845,
including interest, with final payments due from
April through December 2002. $ 6,026 $ 126,426
Installment notes payable to banks; interest
ranging from 7.35% to 7.60%, due in monthly
installments ranging from $1,162 to $3,465,
including interest, with final payments due from
January through June 2003. 69,544 110,503
Installment notes payable to banks; interest
ranging from 6.75% to 8.00%, due in monthly
installments ranging from $382 to $3,831,
including interest, with final payments due from
January through November 2004. 178,234 107,395
Installment notes payable to banks;
interest ranging from 6.25% to 6.75%,
due in monthly installments ranging
from $123 to $1,735, including
interest, with final payments due
from February through April 2005. 112,722 -
--------- ---------
$ 366,526 $ 344,324
=================================================================================
These notes are secured by specific computer equipment and are
nonrecourse liabilities of the Partnership. Aggregate
maturities of notes payable for each of the periods subsequent
to June 30, 2002 are as follows:
Amount
--------------------------------------------------------------
Six months ended December 31, 2002 $ 112,758
Year ended December 31, 2003 162,331
Year ended December 31, 2004 81,135
Year ended December 31, 2005 10,302
----------
$ 366,526
===========
6. Supplemental Other noncash activities included in the determination of net
Cash Flow loss are as follows:
Information
Six months ended June 30, 2002 2001
- --------------------------------------------------------------------------------
Lease income, net of interest expense on
notes payable realized as a result of
direct payment of principal by lessee to bank $ 198,211 $ 287,659
No interest or principal on notes payable was paid by the
Partnership because direct payment was made by lessee to the
bank in lieu of collection of lease income and payment of
interest and principal by the Partnership.
Noncash investing and financing activities include the
following:
Six months ended June 30, 2002 2001
- --------------------------------------------------------------------------------
Debt assumed in connection with purchase
of computer equipment $ 220,413 $ 120,201
- --------------------------------------------------------------------------------
Item 2: Management's Discussion and Analysis of Financial Condition and
Results of Operations
CRITICAL ACCOUNTING POLICIES
Financial Reporting Release No. 60, which was released by the Securities and
Exchange Commission, requires all companies to include a discussion of critical
accounting policies or methods used in the preparation of financial statements.
Our significant accounting policies are described in Note 1 of the Notes to the
Consolidated Financial Statements. The significant accounting policies that we
believe are the most critical to aid in fully understanding our reported
financial results include the following:
COMPUTER EQUIPMENT
Commonwealth Capital Corp, on behalf of the Partnership and other affiliated
partnerships, acquires computer equipment subject to associated debt obligations
and lease revenue and allocates a participation in the cost, debt and lease
revenue to the various partnerships based on certain risk factors.
REVENUE RECOGNITION
Through June 30, 2002, the Partnership has only entered into operating leases.
Lease revenue is recognized on a monthly basis in accordance with the terms of
the operating lease agreements.
LONG-LIVED ASSETS
The Partnership evaluates its long-lived assets when events or circumstances
indicate that the value of the asset may not be recoverable. The Partnership
determines whether an impairment exists by estimating the undiscounted cash
flows to be generated by each asset. If the estimated undiscounted cash flows
are less than the carrying value of the asset then an impairment exists. The
amount of the impairment is determined based on the difference between the
carrying value and the fair value. Fair value is determined based on estimated
discounted cash flows to be generated by the asset.
Depreciation on computer equipment for financial statement purposes is based on
the straight-line method over estimated useful lives of four years.
Liquidity and Capital Resources
The Partnership's primary sources of capital for the six months ended June 30,
2002 and 2001 were cash from operations of $6,000 and 239,000, respectively. Net
proceeds received from sale of equipment for the six months ended June 30, 2002
totaled $192,000. There were no sales of equipment for the six months ended June
30, 2001. The primary use of cash for the six months ended June 30, 2002 and
2001 was for capital expenditures of new equipment totaling $65,000 and
$148,000, respectively and payments of preferred distributions to partners of
approximately $159,000 for the six months ended June 30, 2002 and 2001.
For the six month period ended June 30, 2002, the Partnership generated cash
flows from operating activities of $66,000, which includes a net loss of
$109,000, a gain on sale of equipment totaling $9,000, and depreciation and
amortization expenses of $390,000. Other noncash activities included in the
determination of net loss include direct payments of lease income by lessees to
banks of $198,000.
For the six month period ended June 30, 2001, the Partnership generated cash
flows from operating activities of $239,000, which includes a net loss of
$105,000, and depreciation and amortization expenses of $504,000. Other noncash
activities included in the determination of net (loss) include direct payments
of lease income by lessees to banks of $288,000.
Cash is invested in money market accounts that invest directly in treasury
obligations pending the Partnership's use of such funds to purchase additional
computer equipment, to pay Partnership expenses or to make distributions to the
Partners. At June 30, 2002, the Partnership had approximately $30,000 invested
in these money market accounts.
The Partnership's investment strategy of acquiring computer equipment and
generally leasing it under "triple-net leases" to operators who generally meet
specified financial standards minimizes the Partnership's operating expenses. As
of June 30, 2002, the Partnership had future minimum rentals on non-cancelable
operating leases of $285,000 for the balance of the year ending December 31,
2002 and $467,000 thereafter. At June 30, 2002, the outstanding debt was
$367,000, with interest rates ranging from 6.25% to 8.10%, and will be payable
through April 2005.
The Partnership's cash from operations is expected to continue to be adequate to
cover all operating expenses, liabilities, and preferred distributions to
Partners during the next 12-month period. If available Cash Flow or Net
Disposition Proceeds are insufficient to cover the Partnership expenses and
liabilities on a short and long term basis, the Partnership will attempt to
obtain additional funds by disposing of or refinancing Equipment, or by
borrowing within its permissible limits. The Partnership may, from time to time,
reduce the distributions to its Partners if it deems necessary. Since the
Partnership's leases are on a "triple-net" basis, no reserve for maintenance and
repairs are deemed necessary.
The Partnership's share of the computer equipment in which they participate with
other partnerships at June 30, 2002 and December 31, 2001 was approximately
$993,000 and $878,000, respectively, which is included in the Partnership's
fixed assets on their balance sheet, and the total cost of the equipment shared
by the Partnership with other partnerships at June 30, 2002 and December 31,
2001 was approximately $3,855,000 and $3,226,000, respectively. The
Partnership's share of the outstanding debt associated with this equipment at
June 30, 2002 and December 31, 2001 was approximately $213,000 and $181,000,
respectively, which is included in the Partnership's liabilities on the balance
sheet, and the total outstanding debt at June 30, 2002 and December 31, 2001
related to the equipment shared by the Partnership was approximately $1,637,000
and $1,462,000, respectively.
Results of Operations
Three Months Ended June 30, 2002 compared to Three Months Ended June 30, 2001
- -----------------------------------------------------------------------------
For the quarter ended June 30, 2002, the Partnership recognized income of
$186,000 and expenses of $271,000, resulting in a net loss of $85,000. For the
quarter ended June 30, 2001, the Partnership recognized income of $254,000 and
expenses of $320,000, resulting in a net loss of $66,000.
Lease income decreased by 28% to $182,000 for the quarter ended June 30, 2002,
from $253,000 for the quarter ended June 30, 2001, primarily due to the fact
that more lease agreements ended than new lease agreements acquired since the
quarter ended June 30, 2001.
Operating expenses, excluding depreciation, primarily consist of accounting,
legal, and outside service fees. The expenses increased 56% to approximately
$65,000 for the quarter ended June 30, 2002, from $42,000 for the quarter ended
June 30, 2001, which is primarily attributable to an increase in insurances of
approximately $5,000, an increase in due diligence of approximately $8,000, an
increase in outside services of approximately $7,000, and an increase in
remarketing fees of approximately $3,000.
The equipment management fee is approximately 5% of the gross lease revenue
attributable to equipment that is subject to operating leases. The equipment
management fee decreased 27% to approximately $9,000 for the quarter ended June
30, 2002, from $12,000 for the quarter ended June 30, 2001, which is consistent
with the decrease in lease income.
Depreciation and amortization expenses consist of depreciation on computer
equipment and amortization of equipment acquisition fees. The expenses decreased
31% to approximately $176,000 for the quarter ended June 30, 2002, from $253,000
for the quarter ended June 30, 2001 due to equipment and acquisition fees being
fully depreciated/amortized and not being replaced with as many new purchases.
The partnership recorded bad debt expenses of approximately $16,000 related to
disputed accounts receivables balances for the quarter ended June 30, 2002.
The Partnership sold computer equipment with no net book value for the quarter
ended June 30, 2002, for a net gain of $4,000. The Partnership did not sell
computer equipment for the quarter ended June 30, 2001.
Interest expense decreased 60% to $5,000 for the quarter ended June 30, 2002
from $13,000 for the quarter ended June 30, 2001, primarily due to the decrease
in debt relating to the purchase of computer equipment.
Six Months Ended June 30, 2002 compared to Six Months Ended June 30, 2001
- -------------------------------------------------------------------------
For the six months ended June 30, 2002, the Partnership recognized income of
$466,000 and expenses of $575,000, resulting in a net loss of $109,000. For the
six months ended June 30, 2001, the Partnership recognized income of $576,000
and expenses of $681,000, resulting in a net loss of 105,000.
Lease income decreased by 20% to $457,000 for the six months ended June 30,
2002, from $572,000 for the six months ended June 30, 2001, primarily due to the
fact that more lease agreements ended than new lease agreements acquired since
the six months ended June 30, 2001.
Operating expenses, excluding depreciation, primarily consist of accounting,
legal, and outside service fees. The expenses increased 4% to approximately
$127,000 for the six months ended June 30, 2002, from $122,000 for the six
months ended June 30, 2001, which is primarily attributable a decrease in
accounting fees of approximately $8,000, a decrease in marketing of
approximately $8,000, an increase in due diligence of approximately $14,000, an
increase in postage of approximately $1,000, an increase in office supplies of
approximately $2,000, an increase in remarketing fees of approximately $1,000,
and an increase in office expenses of approximately $3,000.
The equipment management fee is approximately 5% of the gross lease revenue
attributable to equipment that is subject to operating leases. The equipment
management fee decreased 20% to approximately $23,000 for the six months ended
June 30, 2002, from $28,000 for the six months ended June 30, 2001, which is
consistent with the decrease in lease income.
Depreciation and amortization expenses consist of depreciation on computer
equipment and amortization of equipment acquisition fees. The expenses decreased
23% to approximately $390,000 for the six months ended June 30, 2002, from
$504,000 for the six months ended June 30, 2001 due to equipment and acquisition
fees being fully depreciated/amortized and not being replaced with as many new
purchases.
The partnership recorded bad debt expenses of approximately $24,000 related to
disputed accounts receivables balances for the six months ended June 30, 2002.
The Partnership sold computer equipment with a net book value of $183,000 for
the six months ended June 30, 2002, for a net gain of $9,000. The Partnership
did not sell computer equipment for the six months ended June 30, 2001.
Interest expense decreased 59% to $11,000 for the six months ended June 30, 2002
from $26,000 for the six months ended June 30, 2001, primarily due to the
decrease in debt relating to the purchase of computer equipment.
RECENT ACCOUNTING PRONOUNCEMENTS
SFAS 145
In April 2002, the FASB issued SFAS No. 145, "Recission of FASB statements No.
4, 44 and 64, Amendment of FASB statement No. 13, and Technical Corrections"
("SFAS 145"). FASB No. 4 required that gains and losses from extinguishments of
debt that were included in the determination of net income be aggregated and, if
material, be classified as an extraordinary item, net of related income tax.
Effective January 1, 2003, pursuant to SFAS 145, the treatment of debt is to be
included in "Other Income" in the Financial Statements. SFAS 145 has no affect
on our financial statements at this time.
Part III: OTHER INFORMATION
Commonwealth Income & Growth Fund III
Item 1. Legal Proceedings.
Inapplicable
Item 2. Changes in Securities.
Inapplicable
Item 3. Defaults Upon Senior Securities.
Inapplicable
Item 4. Submission of Matters to a Vote of Securities Holders.
Inapplicable
Item 5. Other Information.
Inapplicable
Item 6. Exhibits and Reports on Form 8-K.
a) Exhibits:
1. SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
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 Commonwealth Income & Growth Fund
III, (the "Company") on Form 10-Q for the period ending June 30, 2002, as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, George S. Springsteen, Chief Executive Officer of the Company, certify,
pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 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
Company.
/s/ George S. Springsteen
- ------------------------------------
George S. Springsteen
Chief Executive Officer
August 19, 2002
In connection with the Quarterly Report of Commonwealth Income & Growth Fund I,
(the "Company") on Form 10-Q for the period ending June 30, 2002, as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
Salvatore R. Barila, Controller of the Company, certify, pursuant to 18 U.S.C.
ss. 1350, as adopted pursuant to ss. 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 Company.
/s/ Salvatore R. Barila
- ------------------------------------
Salvatore R. Barila
Controller
August 19, 2002
b) Report on Form 8-K: None
Item 7.A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Partnership believes its exposure to market risk
is not material due to the fixed interest rate of its
long-term debt.
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.
COMMONWEALTH INCOME & GROWTH
FUND III
BY: COMMONWEALTH INCOME &
GROWTH FUND, INC. General Partner
August 19, 2002 By: /s/ George S. Springsteen
- --------------- ------------------------------------
Date George S. Springsteen
President