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, 2003
( ) 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
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(Exact name of registrant as specified in its charter)
Pennsylvania 23-2895714
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
470 John Young Way Suite 300
Exton, PA 19341
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(Address, including zip code, of principal executive offices)
(610) 594-9600
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(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
March 31 December 31,
2003 2002
----------------------------------------
(unaudited)
Assets
Cash and cash equivalents $ 50,994 $ 497
Lease income receivable, net of allowance for doubtful
accounts reserve of $28,100 as of March 31, 2003
and December 31, 2002 17,090 14,161
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68,084 14,658
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Computer equipment, at cost 2,819,234 2,840,949
Accumulated depreciation (2,222,629) (2,108,544)
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596,605 732,405
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Equipment acquisition costs and deferred expenses, net 15,272 19,170
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Total assets $ 679,961 $ 766,233
========================================
Liabilities and Partners' Capital
Liabilities
Accounts payable $ 104,010 $ 31,149
Accounts payable - Commonwealth Capital Corp. 77,583 54,451
Accounts payable - General Partner 90,037 59,116
Accounts payable - Other LP Affiliates 13,019 2,173
Unearned lease income 11,479 37,262
Notes payable 204,049 253,767
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Total liabilities 500,177 437,918
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Partners' Capital
General partner 1,000 1,000
Limited partners 178,784 327,315
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Total partners' capital 179,784 328,315
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Total liabilities and partners' capital $ 679,961 $ 766,233
========================================
see accompanying notes to financial statements
Commonwealth Income & Growth Fund III
Statements of Operations
Three Months Ended
March 31
2003 2002
------------------------------------------
(unaudited)
Income
Lease $ 139,507 $ 274,500
Interest and other 10 134
Gain on sale of computer equipment - 4,994
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Total Income 139,517 279,628
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Expenses
Operating, excluding depreciation 59,843 61,996
Equipment management fee - General Partner 6,975 13,725
Interest 4,152 5,561
Depreciation 130,824 203,694
Amortization of equipment
acquisition costs and deferred expenses 3,898 10,745
Uncollectible accounts receivable 8,000
Loss on sale of computer equipment 2,982 -
-----------------------------------------
Total expenses 208,674 303,721
-----------------------------------------
Net (loss) $ (69,157) $ (24,093)
=========================================
Net (loss) per equivalent limited
partnership unit $ (0.46) $ (0.16)
=========================================
Weighted Average number of equivalent limited
partnership units outstanding during the period 151,178 151,178
=========================================
see accompanying notes to financial statements
Commonwealth Income & Growth Fund III
Statements of Partners' Capital
For the Three Months ended March 31, 2003
(unaudited)
General Limited
Partner Partner General Limited
Units Units Partner Partner Total
--------------------------------------------------------------------------------------
Partners' capital - December 31, 2002 50 151,178 $ 1,000 $ 327,315 $328,315
Net income (loss) 783 (69,940) (69,157)
Distributions (783) (78,591) (79,374)
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Partners' capital - March 31, 2003 50 151,178 $ 1,000 $ 178,784 $179,784
======================================================================================
see accompanying notes to financial statements
Commonwealth Income & Growth Fund III
Statements of Cash Flow
For the Three Months Ended March 31, 2003 and 2002
2003 2002
---------------- -----------------
(unaudited)
Operating activities
Net (loss) $ (69,157) $ (24,093)
Adjustments to reconcile net (loss) to net cash
provided by (used in) operating activities
Depreciation and amortization 134,722 214,439
Allowance for bad debt - 8,000
Loss (gain) on sale of computer equipment 2,982 (4,994)
Other noncash activities included in
determination of net income (49,718) (147,113)
Changes in assets and liabilities
(Increase) decrease in assets
Lease income receivable (2,929) (13,431)
Prepaid Items - (3,000)
Increase (decrease) in liabilities
Accounts payable 72,861 9,266
Accounts payable, Common Capital Corp. 23,132 (25,723)
Accounts payable, affiliated limited partnerships 10,846 (1,843)
Accounts payable, General Partner 30,921 (90,985)
Unearned lease income (25,783) 1,018
---------------- ---------------
Net cash provided by (used in) operating activities 127,877 (78,459)
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Investing activities:
Net proceeds from the sale of computer equipment 1,994 188,277
---------------- ---------------
Financing activities:
Distributions to partners (79,374) (79,374)
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Net increase in cash and equivalents 50,497 30,444
Cash and cash equivalents, beginning of period 497 5,105
---------------- ---------------
Cash and cash equivalents, end of period $ 50,994 $ 35,549
================ ===============
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 uses 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
("CCC"), on behalf of the Partnership and other affiliated
partnerships, acquires computer equipment subject to
associated debt obligations and lease agreements 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 that is an indirect wholly owned
subsidiary of CCC. 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
Policies than 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, 2002. Operating
results for the three-month period ended March 31, 2003
are not necessarily indicative of financial results that
may be expected for the full year ended December 31, 2003.
Revenue Recognition
Through March 31, 2003, 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.
The Partnership reviews a customer's credit history before
extending credit and establishes a provision for
uncollectible accounts receivable based upon the credit
risk of specific customers, historical trends and other
information.
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 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 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. As of March 31, 2003, 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 and deferred expenses
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 three months or less to be cash equivalents.
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
were 7% of the partners' contributed capital and dealer
manager fees were 2% of partners' contributed capital.
These costs were 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.
Reimbursable Expenses
Reimbursable expenses, which are charged to the
Partnership by CCC in connection with the administration
and operation of the Partnership, are allocated to the
Partnership based upon several factors including, but not
limited to, the number of investors, compliance issues,
and the number of existing leases.
3. Computer The Partnership is the lessor of equipment under operating
Equipment leases with periods ranging from 24 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 March 31, 2003
and December 31, 2002 was approximately $277,000 for both
periods, 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 March 31, 2003 and December 31, 2002 was
approximately $2,156,000 for both periods. The
Partnership's share of the outstanding debt associated
with this equipment at March 31, 2003 and December 31,
2002 was approximately $107,000 and $129,000,
respectively, which is included in the Partnership's
liabilities on the balance sheet, and the total
outstanding debt at March 31, 2003 and December 31, 2002
related to the equipment shared by the Partnership was
approximately $1,030,000 and $1,197,000, respectively.
The following is a schedule of future minimum rentals on
noncancellable operating leases at March 31, 2003:
Amount
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Nine Months ended December 31, 2003 $ 210,000
Year Ended December 31, 2004 102,000
Year Ended December 31, 2005 14,000
----------
$ 326,000
========================================================
4. Notes Payable Notes payable consisted of the following:
March 31, December 31,
2003 2002
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Installment note payable to
a bank; interest at 8.10%;
due in monthly installments
of $3,465 including interest
through June 2003. $ 10,194 $ 26,968
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. 110,185 133,292
Installment notes payable to
banks; interest ranging from
6.25% to 6.75%, due in
monthly installments ranging
from $123 to $1,735,
including interest, with
final payments due from
February through April 2005. 83,670 93,507
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$ 204,049 $ 253,767
============ ===========
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 March 31, 2003 are as follows:
Amount
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Nine Months ended December 31, 2003 $ 112,612
Year Ended December 31, 2004 81,135
Year Ended December 31, 2005 10,302
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$ 204,049
==========
5. Supplemental Other noncash activities included in the determination of
Cash Flow net loss are as follows:
Information
Three months ended March 31, 2003 2002
- --------------------------------------------------------------------------------
Lease income, net of interest expense on
notes payable realized as a result of
direct payment of principal by lessee to
bank $49,718 $147,113
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.
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
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
CCC, on behalf of the Partnership and other affiliated partnerships, acquires
computer equipment subject to associated debt obligations and lease agreements
and allocates a participation in the cost, debt and lease revenue to the various
partnerships based on certain risk factors.
REVENUE RECOGNITION
Through March 31, 2003, 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.
The Partnership reviews a customer's credit history extending credit and
establishes provisions for uncollectible accounts based upon the credit risk of
specific customers, historical trends and other information.
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 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 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 three months ended March
31, 2003 and 2002 were cash from operations of $128,000 for 2003, and the net
proceeds received from sale of equipment of approximately $2,000 and $188,000,
respectively. The primary use of cash for the three months ended March 31, 2003
and 2002 was for payments of preferred distributions to partners of
approximately $79,000 for both quarters, and for operations of approximately
$78,000 for the three months ended March 31, 2002.
For the period ending March 31, 2003, the Partnership generated cash flow from
operating activities of $128,000, which includes net loss of $69,000 reduced by
depreciation and amortization expenses of $135,000. Other noncash activities
included in the determination of net income include direct payments of lease
income by lessees to banks of $50,000.
For the three month period ended March 31, 2002, the Partnership used cash for
operating activities of $78,000, which includes a net loss of $24,000, a gain on
sale of equipment totaling $5,000, repayment of payables to Commonwealth Capital
Corp. of approximately $26,000, payment of payables to the General Partner of
approximately $91,000, and depreciation and amortization expenses of $214,000.
Other noncash activities included in the determination of net loss include
direct payments of lease income by lessees to banks of $147,000.
The Partnership sold computer equipment for the period ending March 31, 2003
with a net book value of approximately $5,000 for a net loss on sale of
equipment of approximately $3,000. For the period ended March 31, 2002, the
Partnership sold computer equipment with a net book value of approximately
$183,000 for a gain on sale of equipment of approximately $5,000.
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 March 31, 2003, the Partnership had future minimum rentals on non-cancelable
operating leases of $210,000 for the balance of the year ending December 31,
2003 and $116,000 thereafter. At March 31, 2003, the outstanding debt was
$204,000, 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 March 31, 2003 and December 31, 2002 was approximately
$277,000 for both periods, 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 March 31, 2003 and December 31, 2002 was
approximately $2,156,000 for both periods. The Partnership's share of the
outstanding debt associated with this equipment at March 31, 2003 and December
31, 2002 was approximately $107,000 and $129,000, respectively, which is
included in the Partnership's liabilities on the balance sheet, and the total
outstanding debt at March 31, 2003 and December 31, 2002 related to the
equipment shared by the Partnership was approximately $1,030,000 and $1,197,000,
respectively.
Results of Operations
Three Months Ended March 31, 2003 compared to Three Months Ended March 31, 2002
- -------------------------------------------------------------------------------
For the quarter ended March 31, 2003, the Partnership recognized income of
$140,000 and expenses of $209,000, resulting in a net loss of $69,000. For the
quarter ended March 31, 2002, the Partnership recognized income of $280,000 and
expenses of $304,000, resulting in a net loss of $24,000.
Lease income decreased by 49% to $140,000 for the quarter ended March 31, 2003,
from $275,000 for the quarter ended March 31, 2002, primarily due to the fact
that more lease agreements ended than new lease agreements acquired since the
quarter ended March 31, 2002.
Operating expenses, excluding depreciation, primarily consist of accounting,
legal, outside service fees and reimbursement of expenses to CCC for
administration and operation of the Partnership. The expenses decreased 3% to
approximately $60,000 for the quarter ended March 31, 2003, from $62,000 for the
quarter ended March 31, 2002, which is primarily attributable to an increase in
the amount charged by CCC, a related party, to the Partnership for the
administration and operation of approximately $7,000, an increase in
communications of approximately $2,000, a decrease in conventions of
approximately $5,000 and a decrease in miscellaneous office expenses of
approximately $7,000.
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 50% to approximately $7,000 for the quarter ended March
31, 2003, from $14,000 for the quarter ended March 31, 2002, 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
37% to approximately $135,000 for the quarter ended March 31, 2003, from
$214,000 for the quarter ended March 31, 2002 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 $8,000 related to
disputed accounts receivables balances for the quarter ended March 31, 2002. The
Partnership did not record any bad debt expenses for the quarter ended March 31,
2003.
The Partnership sold computer equipment with a net book value of $5,000 for the
quarter ended March 31, 2003, for a net loss of $3,000. The Partnership sold
computer equipment with a net book value of $183,000 for the quarter ended March
31, 2002, for a net gain of $5,000.
Interest expense decreased 33% to $4,000 for the quarter ended March 31, 2003
from $6,000 for the quarter ended March 31, 2002, primarily due to the decrease
in debt relating to the purchase of computer equipment.
RECENT ACCOUNTING PRONOUNCEMENTS
Interpretation No. 46
In January 2003, FASB issued Interpretation No. 46, "Consolidation of Variable
Interest Entities" ("Interpretation No. 46"), which clarifies the application of
Accounting Research Bulletin No. 51, "Consolidated Financial Statements," to
certain entities in which equity investors do not have the characteristics of a
controlling financial interest or do not have sufficient equity at risk for the
entity to finance its activities without additional subordinated financial
support from the other parties. Interpretation No. 46 is applicable immediately
for variable interest entities created after January 31, 2003. For variable
interest entities created prior to January 31, 2003, the provisions of
Interpretation No. 46 are applicable no later than July 1, 2003. The Partnership
does not expect Interpretation No. 46 to have an effect on the financial
statements.
Item 3. 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 and its associated fixed revenue
streams.
Item 4. Controls and Procedures
The Chief Executive Officer and a Financial Officer of the Partnership have
conducted a review of the Partnership's disclosure controls and procedures as of
March 31, 2003.
The Company's disclosure controls and procedures include the Partnership's
controls and other procedures designed to ensure that information required to be
disclosed in this and other reports filed under the Securities Exchange Act of
1934, as amended (the "Exchange Act") is accumulated and communicated to the
Partnership's management, including its chief executive officer and a financial
officer, to allow timely decisions regarding required disclosure and to ensure
that such information is recorded, processed, summarized and reported with the
required time periods.
Based upon this review, the Partnership's Chief Executive Officer and the a
Financial Officer have concluded that the Partnership's disclosure controls (as
defined in pursuant to Rule 13a-14 c promulgated under the Exchange Act) are
sufficiently effective to ensure that the information required to be disclosed
by the Partnership in the reports it files under the Exchange Act is recorded,
processed, summarized and reported with adequate timeliness.
Part II: 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:
99.1 SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
99.2 SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
b) Report on Form 8-K: None
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
May 15, 2003 By: George S. Springsteen
- ------------ --------------------------------
Date George S. Springsteen
President
CERTIFICATIONS
I, George Springsteen certify that:
1. I have reviewed this quarterly report on Form 10-Q of Commonwealth Income &
Growth Fund III (the Registrant);
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
the 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 the
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
the Registrant's board of directors ( or persons performing the equivalent
function):
a) all significant deficiencies in the design or the operation
of internal controls which could adversely affect the
Registrant's ability to record, process, summarize and report
financial data we have identified for the Registrant's
auditors any material weakness 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.
George S. Springsteen
- ----------------------------
George S. Springsteen
Chief Executive Officer
May 15, 2003
I, Kimberly A. Springsteen, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Commonwealth Income &
Growth Fund III (the Registrant);
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
the 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 the
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
the Registrant's board of directors ( or persons performing the equivalent
function):
a) all significant deficiencies in the design or the operation
of internal controls which could adversely affect the
Registrant's ability to record, process, summarize and report
financial data we have identified for the Registrant's
auditors any material weakness 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.
Kimberly A. Springsteen
- ---------------------------------
Kimberly A. Springsteen
Principal Financial Officer
May 15, 2003