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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 FOR THE TRANSITION PERIOD FROM JANUARY 1, 2003 TO
MARCH 31, 2003.
Commission File number: 0-18454 (formerly 33-26759)
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SOUTHEAST ACQUISITIONS III, L.P.
--------------------------------
(Exact name of registrant)
Delaware 23-2532708
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3011 Armory Drive, Suite 310
Nashville, Tennessee 37204
(Address of Principal Executive Offices)
Issuer's Telephone Number: 615-834-0872
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Indicate by check mark whether the registrant (a) 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 (or for such shorter period that the registrant was
required to file such reports) and (b) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
The unaudited financial statements of Southeast Acquisitions III, L.P.
(the "Partnership") at March 31, 2003 are attached hereto as Exhibit A.
Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Background
The Partnership was formed to acquire, own and realize appreciation in
the following properties by holding them for investment and eventual sale (each
a "Property", collectively the "Properties"): 208 acres of undeveloped land in
Fulton County, Georgia; 265 acres of undeveloped land in Henry County, Georgia;
24 acres of undeveloped land near Nashville, Tennessee; 48 acres of undeveloped
land near Fort Myers, Florida; and 51 acres of undeveloped land near Columbia,
South Carolina. There can be no assurance that the Partnership's objectives will
be realized. At March 31, 2003, there remained approximately 105 acres of the
Fulton County, Georgia property.
Results of Operations for First Quarter of 2003 Compared with
First Quarter of 2002
The Partnership activities for the first quarter of 2003 and the first
quarter of 2002 were focused on the sale of Partnership property. During the
first quarter of 2003 there were no land sales as compared to the first quarter
of 2002 when the Partnership sold all of the remaining land in Columbia, South
Carolina, approximately 33 acres, for a sales price of $500,000. The Partnership
recognized a loss of $1,850 from this sale. During the first quarter of 2003 the
Partnership earned $437 in interest income as compared to $1,141 in the first
quarter of 2002. The decrease in interest earned was a result of having a lower
average cash reserve during the quarter as compared to the same quarter of 2002.
The decrease in the average cash reserve resulted from a distribution to the
limited partners that had been made in March of 2002.
Expenses in the first quarter of 2003 included general and
administrative expenses of $6,578 versus $6,518 in the first quarter of 2002.
Real estate taxes in the first quarter of 2003 were $999 compared with $1,199 in
the first quarter of 2002. The 2002 taxes included greenbelt rollback taxes of
$270 related to the sale of Columbia, South Carolina property. There were no
rollback taxes in the first quarter of 2003. Insurance in the first quarter of
2003 was $54 as compared with $92 in the first quarter of 2002.
Inflation did not have any material impact on operations during the
first quarter of 2003 and it is not expected to materially impact future
operations.
Liquidity and Capital Resources
The Partnership had cash reserves of $47,865 at March 31, 2003, which
will be used to cover the following estimated annual costs: accounting fees of
$17,880, legal fees of $8,000, insurance costs of $216, property taxes of
$3,994, and other general and administrative expenses $12,000. In the General
Partner's opinion, the Partnership's reserves will be sufficient for an
additional year. However, if additional expenses
are incurred, then the reserves may be inadequate to cover the Partnership's
operating expenses. If the reserves are exhausted, the Partnership may have to
dispose of some or all of the Property or incur indebtedness on unfavorable
terms.
Item 3. Controls and Procedures
(a) Within the ninety day period prior to the date of this report, we
carried out an evaluation, under the supervision and with the participation of
our management, including our principal executive officer and our principal
financial officer, of the effectiveness of the design and operation of our
disclosure controls and procedures (as defined in Rules 13a-14(c) under the
Securities Exchange Act of 1934). Based upon that evaluation, our management,
including our principal executive officer and our principal financial officer,
concluded that the design and operation of these disclosure controls and
procedures were effective to timely alert them to any material information
relating to the company that must be included in our periodic SEC filings.
(b) There have been no significant changes in our internal controls or
in other factors that could significantly affect internal controls subsequent to
the date we carried out this evaluation.
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
None
Item 2 - Changes in Securities
There were no changes in the Partnership's securities during the first
quarter of 2003.
Item 3 - Defaults Upon Senior Securities
There was no default in the payment of principal, interest, a sinking
or purchase fund installment or any other default with respect to any
indebtedness of the Partnership. The Partnership has issued no preferred stock;
accordingly, there have been no arrearages or delinquencies with respect to any
such preferred stock.
Item 4 - Submission of Matters to a Vote of Security Holders
No matters were submitted to the Partners for a vote during the first
quarter of 2003.
Item 5 - Other Information
None
Item 6 - Exhibits and Reports on Form 8-K
Reports on Form 8-K
None
Exhibits (numbered in accordance with Item 601 of Regulation S-K)
Exhibit Numbers Description Page Number
- --------------- ----------- -----------
99.1 Certification Pursuant to 18 U.S.C.
Section 1350 as adopted pursuant to
Section 906 of the Sarbanes-Oxley
Act of 2002.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following person on behalf of the
Registrant and in the capacities and on the date indicated.
Signature Title Date
- --------- ----- ----
/s/ Richard W. Sorenson
- ----------------------- President, May 13, 2003
Richard W. Sorenson Southern Management
Group, LLC
Certification of Chief Executive Officer
Of Southeast Acquisitions III, L.P.
This certification is provided pursuant to Section 302 of the
Sarbanes-Oxely Act of 2002, and accompanies the quarterly report on form 10-Q
for the quarter ended March 31, 2003 of Southeast Acquisitions III, L. P.
I, Richard W. Sorenson, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Southeast
Acquisitions III, L. P.
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 registrants 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) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, is made known to
us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date:
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent function);
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
May 13, 2003 /s/ Richard W. Sorenson
- ------------ -------------------------------
Date Richard W. Sorenson
Richard W. Sorenson
Principal Executive Officer & Member
Southern Management Group, LLC
Certification of Chief Financial Officer
Of Southeast Acquisitions III, L.P.
This certification is provided pursuant to Section 302 of the
Sarbanes-Oxely Act of 2002, and accompanies the quarterly report on form 10-Q
for the quarter ended March 31, 2003 of Southeast Acquisitions III, L. P.
I, Laura E. Ristvedt, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Southeast
Acquisitions III, L. P.
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 registrants 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) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, is made known to
us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date:
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent function);
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
May 13, 2003 /s/ Laura E. Ristvedt
- ------------ --------------------------------
Date Laura E. Ristvedt
Laura E. Ristvedt
Principal Financial Officer
EXHIBIT A
SOUTHEAST ACQUISITIONS III, LP
BALANCE SHEETS
MARCH 31, DECEMBER 31,
2003 2002
(UNAUDITED)
----------- ------------
ASSETS
LAND HELD FOR SALE $ 699,677 $ 699,677
CASH AND CASH EQUIVALENTS 47,865 53,737
PREPAID EXPENSES 162 --
--------- ---------
$ 747,704 $ 753,414
========= =========
LIABILITIES AND PARTNERS' EQUITY
ACCOUNTS PAYABLE AND ACCRUED EXPENSES $ 18,093 $ 16,609
PAYABLE TO PREVIOUS GENERAL PARTNER 3,584 3,584
PARTNERS' EQUITY:
GENERAL PARTNER (20,001) (19,929)
LIMITED PARTNERS (12,400 UNITS OUTSTANDING) 746,028 753,150
--------- ---------
726,027 733,221
--------- ---------
$ 747,704 $ 753,414
========= =========
SEE NOTES TO FINANCIAL STATEMENTS.
EXHIBIT A
SOUTHEAST ACQUISITIONS III, LP
STATEMENTS OF OPERATIONS AND PARTNERS' EQUITY
(UNAUDITED)
FOR THE THREE MONTHS
ENDED MARCH 31
---------------------------------
2003 2002
--------- -----------
REVENUES:
LOSS ON SALE OF LAND $ -- $ (1,850)
INTEREST INCOME 437 1,141
--------- -----------
437 (709)
--------- -----------
EXPENSES:
GENERAL AND ADMINISTRATIVE 6,578 6,518
REAL ESTATE TAXES 999 1,199
INSURANCE 54 92
--------- -----------
7,631 7,809
--------- -----------
NET LOSS (7,194) (8,518)
PARTNERS' EQUITY,
BEGINNING OF PERIOD 733,221 1,137,255
CAPITAL DISTRIBUTION -- (372,000)
--------- -----------
PARTNERS' EQUITY,
END OF PERIOD $ 726,027 $ 756,737
========= ===========
WEIGHTED AVERAGE NUMBER
OF LIMITED PARTNERSHIP
UNITS OUTSTANDING 12,400 12,400
========= ===========
LOSS FROM OPERATIONS
PER LIMITED PARTNERSHIP
INTEREST $ (0.58) $ (0.69)
========= ===========
SEE NOTES TO FINANCIAL STATEMENTS.
EXHIBIT A
SOUTHEAST ACQUISITIONS III, LP
STATEMENTS OF CASH FLOWS
(UNAUDITED)
FOR THE THREE MONTHS
ENDED MARCH 31
--------------------------
2003 2002
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
PROCEEDS FROM SALE OF LAND $ -- $ 448,150
INTEREST INCOME RECEIVED 437 2,503
CASH PAID FOR OPERATING EXPENSES (6,309) (103,036)
--------- ---------
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES (5,872) 347,617
CASH FLOWS FROM FINANCING ACTIVITIES:
DISTRIBUTION TO LIMITED PARTNERS
DECREASE IN CASH -- (372,000)
--------- ---------
(5,872) (24,383)
CASH, BEGINNING OF PERIOD 53,737 83,860
--------- ---------
CASH, END OF PERIOD $ 47,865 $ 59,477
========= =========
RECONCILIATION OF NET LOSS TO NET CASH (USED IN) PROVIDED BY
OPERATING ACTIVITIES:
NET LOSS $ (7,194) $ (25,608)
ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH (USED IN) PROVIDED BY OPERATING
ACTIVITIES:
LOSS ON SALE OF LAND -- 1,850
NET PROCEEDS FROM SALE OF LAND -- 448,150
INCREASE (DECREASE) IN ACCOUNTS PAYABLE AND ACCRUED EXPENSES 1,484 (81,341)
INCREASE IN PREPAID EXPENSES (162) (55)
DECREASE IN ACCOUNTS RECEIVABLE -- 4,621
--------- ---------
NET CASH (USED IN) PROVIDED BY OPERATING
ACTIVITIES $ (5,872) $ 347,617
========= =========
SEE NOTES TO FINANCIAL STATEMENTS.
SOUTHEAST ACQUISITIONS III, LP
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For the Three Months Ended March 31, 2003
(Unaudited)
A. ACCOUNTING POLICIES
The unaudited financial statements presented herein have been prepared
in accordance with the instructions to Form 10-Q and do not include all of the
information and note disclosures required by accounting principles generally
accepted in the United States of America. These statements should be read in
conjunction with the financial statements and notes thereto included in the
Partnerships Form 10-K for the year ended December 31, 2002. In the opinion of
management, such financial statements include all adjustments, consisting only
of normal recurring adjustments, necessary to summarize fairly the Partnership's
financial position and results of operations. The results of operations for the
three-month period ended March 31, 2003 may not be indicative of the results
that may be expected for the year ending December 31, 2003.
B. RELATED PARTY TRANSACTIONS
The General Partner and its affiliates have been actively involved in
managing the Partnership's operations. Compensation earned for these
services in the first three months were as follows:
2003 2002
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Commissions $ -0- $25,000
Reimbursements $448 $ 1,014