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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
|X| QUARTERLY REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the quarterly period ended September 30, 2003.
or
|_| TRANSACTION REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ________________ to ________________
Commission file number:
333-91322
ABIC REALTY FUND I, L.P.
(Exact name of registrant as specified in its charter)
Texas 81-0554775
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
9520 North May Avenue Suite 330
Oklahoma City Oklahoma 73120
405-302-6434
(Address and telephone number of registrant's principal executive offices)
Check whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports, or
(2) has been subject to such filing requirements for the past 90 days.
Yes |X| No |_|
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ABIC REALTY FUND I, L.P.
(a Texas Limited Partnership and development stage enterprise)
INDEX
Part 1 - FINANCIAL INFORMATION Page
Item 1. Financial Statements 2
Item 2. Management's Discussion and Analysis and Plan of Operations 2
Part 2 - OTHER INFORMATION
Item 1. Legal Proceedings 3
Item 2. Changes in Securities 3
Item 3. Defaults Upon Senior Securities 3
Item 4. Submission of Matters to a Vote of Security Holders 3
Item 5. Other Information 3
Item 6. Exhibits and Reports on Form 8-K 3
Signature 4
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements.
See pages F-1 through F-4.
Item 2. Management's Discussion and Analysis and Plan of Operations
ABIC Realty Fund I, L.P. (the "Partnership") was formed on May 17, 2002 as a
Texas Limited Partnership to purchase on an all cash basis and operate a
portfolio of income producing real estate properties that: (i) pay quarterly
cash distributions to its investors at an increasing rate over time, that for
taxable investors may be partially free from current taxation; and (ii) increase
in value over time. (the "Properties") No assurance can be given that these
business objectives will be attained. The General Partner of the Partnership is
ABIC Realty Corporation, a Texas corporation. The Partnership has completed a
Registration Statement with the Securities and Exchange Commission and various
state security boards with respect to its offering of up to $40,000,000 of
Limited Partnership Units (the "Units") (4,000,000 units at $10 per unit).
During 2003 the Partnership activities related only to pre-offering planning.
The partnership expects to began to actively offering Limited Partnership units
to the public in the first quarter of year 2004. Thereafter, the Partnership
will initiate its principal business operations only after a minimum of $100,000
in Unit subscriptions is received. The Partnership's fiscal year will end on
December 31.
The Partnership is considered to be in the "developmental stage" as
substantially all of its efforts have been expended in establishing the new
business and planned principal operations have not commenced. The Partnership
has received no revenues and incurred no expenses in the years 2002 or 2003
except for write-off of organization costs in the amount of $800 in the year
2002. Accordingly, statements of income and cash flows are not material and are
not included in the financial statements.
The Partnership plans to offer beginning in the first quarter of 2004 on a "best
efforts basis" up to $40,000,000 of Limited Partnership Units. The Units will be
offered though licensed broker-dealers. The broker-dealers will be paid
commissions equaling 7.5% of the proceeds of the Unit sale and up to 1% of the
gross offering proceeds for non-accountable expenses. The Partnership will pay
to the General Partner 6% of the Unit proceeds to reimburse registration, legal,
accounting, printing, marketing and other out-of-pocket expenses as well as
general, administrative and overhead expenses borne by the General Partner in
connection with the offering and organization of the Partnership. The remainder
of the Limited Partner Unit sale proceeds will be used to purchase commercial
real estate properties, acquired on an all-cash basis. ABIC Realty Fund I, L.P.
will conduct its business pursuant to a limited partnership agreement. Investor
subscription funds are to be held in an escrow bank account until $100,000 in
subscriptions have been received by the Partnership.
The total General Partner Initial Capital Contribution is $1,000. Additionally,
as of December 31, 2002 the General Partner has advanced cash to the Partnership
of $10,000 which may be used in the future to pay incidental expenses of the
partnership. All offering and organization costs have been paid by the General
Partner and if the offering is successfully completed, the Partnership will pay
6% of the proceeds of the offering to the General Partner as described in Note
B. Offering costs have been recorded as a liability and capitalized as an asset
on the balance sheet of the Partnership. Organization costs of $800 have been
expensed in 2002. The Partnership and its Properties will be managed and
administrated on behalf of the Partnership by the General Partner. Fees to be
paid to the General Partner have not been negotiated on an arms length basis.
The General Partner intends to contract a portion of its duties to qualified
third-party property managers and real estate brokers.
2
Limited Partnership Investors will incur various risks and uncertainties
including, but not limited to, all market risks generally associated with real
estate investments and concentration of assets since the Partnership will invest
only in commercial real estate properties and all Properties are expected to be
located in urban and suburban areas of southern, southwestern and southeastern
United States. Limited Partners have limited voting rights and must rely on the
General Partner, who will have full responsibility for the management of the
Partnership. The number of properties that the Partnership will acquire and
diversification of its investments will be reduced to the extent that less than
the maximum offering amount is raised. Additionally, due to certain federal
income tax considerations, liquidity of the Limited Partnership Units will be
restricted.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
There are no legal proceedings pending against the Partnership and no legal
proceedings filed against any other parties by the Partnership.
Item 2. Changes in Securities.
None
Item 3. Defaults Upon Senior Securities.
None
Item 4. Submission of Matters to a Vote of Security Holders.
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K.
a) Exhibits
Exhibit
Number Exhibit
------ -------
3.1 - Form of Agreement of Limited Partnership of ABIC Realty Fund I,
L.P. (1)
31 - Certification (Chief Executive Officer)
32 - Certification (Chief Executive Officer)
b) Reports on Form 8-K
No reports on Form 8-K were filed.
- ----------
(1) Incorporated by reference to the Partnership's Form S-11 Registration
Statement
3
SIGNATURES
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.
ABIC Realty Fund I, L.P.
Dated December 22, 2003 By: /s/ Michael R. Marshall
------------------------------------
Michael R. Marshall, President and
Chief Financial Officer of ABIC
Realty Corporation, General Partner
4
ABIC REALTY FUND I, L.P.
(a Texas Limited Partnership)
BALANCE SHEET
As of December 31, 2002 and September 30, 2003
ASSETS
December 31, September 30,
2002 2003
------------ -------------
CURRENT ASSETS
Cash and cash equivalents $ 11,100 $ 11,100
Capitalized offering costs 71,000 182,300
--------- ---------
TOTAL ASSETS $ 82,100 $ 193,400
========= =========
LIABILITIES AND PARTNERSHIP CAPITAL
LIABILITIES
Due to General Partner, ABIC Realty Corporation $ 81,800 $ 193,100
PARTNERSHIP CAPITAL
Initial General Partner Contribution 1,000 1,000
Initial Limited Partner Contribution 100 100
Loss resulting from write-off of organization costs (800) (800)
--------- ---------
Total Partnership Captial 300 300
--------- ---------
TOTAL LIABILITIES AND PARTNERSHIP CAPITAL $ 82,100 $ 193,400
========= =========
See accompanying notes to financial statements
F-1
ABIC REALTY FUND I, L.P.
(a Texas Limited Partnership)
STATEMENT OF CHANGES IN PARTNER'S CAPITAL For the period from
formation through December 31, 2002
and for the nine months ended September 30, 2003
Initial
Initial Limited
General Partner Current
Partner Capital Year
Capital (10 Units) Loss Total
------- ------- ------- -------
Balance Prior to Formantion on May 17, 2002 $ -- $ -- $ -- $ --
June 2002, Initial Capital 1,000 100 -- 1,100
Write-off of organization cost -- -- (800) (800)
------- ------- ------- -------
Balances, December 31, 2002 $ 1,000 $ 100 $ (800) $ 300
Capital Changes during year 2003 -- -- -- --
------- ------- ------- -------
Balances at September 30, 2003 $ 1,000 $ 100 $ (800) $ 300
======= ======= ======= =======
See accompanying notes to financial statements
F-2
ABIC REALTY FUND I, L.P.
(a Texas Limited Partnership and developmental stage enterprise)
NOTES TO FINANCIAL STATEMENTS
NOTE A - DESCRIPTION OF BUSINESS
I. General
ABIC Realty Fund I, L.P. (the "Partnership") was formed on May 17, 2002 as
a Texas Limited Partnership to purchase and operate a portfolio of income
producing real estate properties that: (i) pay quarterly cash
distributions to its investors at an increasing rate over time, that for
taxable investors may be partially free from current taxation; and (ii)
increase in value over time. (the "Properties") No assurance can be given
that these business objectives will be attained. The General Partner of
the Partnership is ABIC Realty Corporation, a Texas corporation. The
Partnership has completed a Registration Statement with the Securities and
Exchange Commission and various state security boards with respect to its
offering of up to $40,000,000 of Limited Partnership Units (the "Units")
(4,000,000 units at $10 per unit). During 2003 the Partnership activities
related only to pre-offering planning. The partnership expects to began to
actively offering Limited Partnership units to the public in the first
quarter of year 2004. Thereafter, the Partnership will initiate its
principal business operations only after a minimum of $100,000 in Unit
subscriptions is received.
The Partnership's fiscal year will end on December 31.
Developmental Stage Enterprise
The Partnership is considered to be in the "developmental stage" as
substantially all of its efforts have been expended in establishing the
new business and planned principal operations have not commenced. The
Partnership has received no revenues and incurred no expenses in the years
2002 or 2003 except for write-off of organization costs in the amount of
$800 in the year 2002. Accordingly, statements of income and cash flows
are not material and are not included herein.
NOTE B - SALE OF LIMITED PARTNERSHIP UNITS
The Partnership plans to offer on a "best efforts basis" up to $40,000,000
of Limited Partnership Units. The Units will be offered though licensed
broker-dealers. The broker-dealers will be paid commissions equaling 7.5%
of the proceeds of the Unit sale and up to 1% of the gross offering
proceeds for non-accountable expenses. The Partnership will pay to the
General Partner 6% of the Unit proceeds to reimburse registration, legal,
accounting, printing, marketing and other out-of-pocket expenses as well
as general, administrative and overhead expenses borne by the General
Partner in connection with the offering and organization of the
Partnership. The remainder of the Limited Partner Unit sale proceeds will
be used to purchase commercial real estate properties, acquired on an
all-cash basis. ABIC Realty Fund I, L.P. will conduct its business
pursuant to a limited partnership agreement. Investor subscription funds
are to be held in an escrow bank account until $100,000 in subscriptions
have been received by the Partnership.
F-3
NOTE C - RISKS AND UNCERTAINTIES
Limited Partnership Investors will incur various risks and uncertainties
including, but not limited to, all market risks generally associated with
real estate investments and concentration of assets since the Partnership
will invest only in commercial real estate properties and all Properties
are expected to be located in urban and suburban areas of southern,
southwestern and southeastern United States. Limited Partners have limited
voting rights and must rely on the General Partner, who will have full
responsibility for the management of the Partnership. The number of
properties that the Partnership will acquire and diversification of its
investments will be reduced to the extent that less than the maximum
offering amount is raised. Additionally, due to certain federal income tax
considerations, liquidity of the Limited Partnership Units will be
restricted.
NOTE D - RELATED PARTY TRANSACTIONS
The total General Partner Initial Capital Contribution is $1,000.
Additionally, as of December 31, 2002 the General Partner has advanced
cash to the Partnership of $10,000 which may be used in the future to pay
incidental expenses of the partnership. All offering and organization
costs have been paid by the General Partner and if the offering is
successfully completed, the Partnership will pay 6% of the proceeds of the
offering to the General Partner as described in Note B. Total Partnership
offering and organization costs paid by the General Partner at December
31, 2002 and September 30, 2003 of approximately $72,000 and $193,100
respectively. Offering costs have been recorded as a liability and
capitalized as an asset on the balance sheet of the Partnership.
Organization costs of $800 have been expensed in 2002. The Partnership and
its Properties will be managed and administrated on behalf of the
Partnership by the General Partner. Fees to be paid to the General Partner
have not been negotiated on an arms length basis. The General Partner
intends to contract a portion of its duties to qualified third-party
property managers and real estate brokers.
F-4