10-Q 1 realmarkiii_10q.txt QUARTERLY REPORT 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, 2004 or [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from __________ to __________ Commission File Number: 0-13331 REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - III ----------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 16-1234990 ----------------------- --------------------------------- (State of organization) (IRS Employer Identification No.) 2350 North Forest Road, Suite 35B, Getzville, New York 14068 ------------------------------------------------------------ (Address of principal executive offices) (716) 636-0280 -------------- (Registrant's telephone number) Indicate by check mark whether the registrant (1) 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 (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X] Part I - FINANCIAL INFORMATION Item 1. Financial Statements --------------------

Notes to Consolidated Financial Statements Six months ended June 30, 2004 and 2003 (Unaudited) Liquidation of the Partnership ------------------------------ On May 20, 2004 the Partnership sold its remaining property investment, Perrymont, at which time the Partnership adopted a plan of termination and liquidation under which liabilities will be paid and net proceeds will be distributed to the Partners. Organization ------------ Realmark Property Investors Limited Partnership - III (the Partnership), a Delaware limited partnership, was formed on November 18, 1983, to invest in a diversified portfolio of income-producing real estate investments. The general partners are Realmark Properties, Inc. (the corporate general partner) and Joseph M. Jayson (the individual general partner). Joseph M. Jayson is the sole shareholder of J.M. Jayson & Company, Inc. Realmark Properties, Inc. is a wholly owned subsidiary of J.M. Jayson & Company, Inc. Under the partnership agreement, the general partners and their affiliates can receive compensation for services rendered and reimbursement for expenses incurred on behalf of the Partnership. 4 Basis of Presentation --------------------- As a result of the plan termination and liquidation, the Partnership changed its basis of accounting to the liquidation basis effective May 21, 2004. Under the liquidation basis of accounting, assets are stated at their estimated net realizable values and liabilities are stated at their estimated settlement amounts. The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the instructions to Form 10-Q. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America for complete financial statements. The balance sheet at December 31, 2003 has been derived from the audited financial statements at that date. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation, have been included. The Partnership's significant accounting policies are set forth in its December 31, 2003 Form 10-K. The interim financial statements should be read in conjunction with the financial statements included therein. The interim results should not be considered indicative of the annual results. Property and Equipment ---------------------- On April 5, 2004, the Partnership closed on the sale of Inducon Amherst, resulting in a gain of $19,501. On May 20, 2004, the Partnership closed on the sale of its remaining property, Perrymont, resulting in a gain of $144,785. During 2004 and 2003, the Partnership's properties were being actively marketed for sale and, therefore, were not being depreciated. Depreciation not recorded for the period from April 1, 2004 to May 20, 2004 and for the period from January 1, 2004 to May 20, 2004 was approximately $29,000 and $94,000, respectively. Depreciation not recorded in the three and six month periods ended June 30, 2003 was approximately $66,000 and $129,000, respectively. As of June 30, 2004, the Partnership does not have an interest in any property or equipment. PART I - Item 2. Management's Discussion and Analysis of Financial Condition ----------------------------------------------------------- and Results of Operations ------------------------- Liquidity and Capital Resources ------------------------------- Since January 1, 2001, the Partnership's remaining properties, Perrymont and Inducon Amherst, had been actively marketed for sale. On April 5, 2004, the Partnership sold Inducon Amherst to an unaffiliated entity for cash of $2,045,000. After satisfaction of the $1,700,000 mortgage loan on the property, including a prepayment penalty, and payment of closing costs, the net proceeds available amounted to approximately $425,000, before satisfaction of any remaining obligations related to the property. On May 20, 2004, the Partnership sold Perrymont to an unaffiliated entity for cash of $2,450,000, less a $600,000 credit for work that the buyer has determined is necessary on the property. The net proceeds available amounted to approximately $1,658,000, before satisfaction of any remaining obligations related to the property. Prior to the sale of Inducon Amherst and Perrymont, the Partnership maintained a cash position adequate to fund capital improvements and scheduled debt payments. 5 Results of Operations --------------------- As a result of the sale of the remaining properties, Inducon Amherst and Perrymont, and the establishment of a plan of liquidation, the Partnership began reporting on the liquidation basis of accounting effective May 21, 2004. Therefore, operations for the period May 21, 2004 to June 30, 2004 are reported on the statement of changes in net assets in liquidation while the operations for the period January 1, 2004 to May 20, 2004, for the period April 1, 2004 to May 20, 2004 and for the three and six months ended June 30, 2003 are reported on the condensed consolidated statement of operations. As discussed above, the Partnership began reporting on the liquidation basis of accounting effective May 21, 2004. The only significant changes as of June 30, 2004 as compared to the same period in 2003 is the sale of the remaining properties, Inducon Amherst and Perrymont. PART I - Item 3. Quantitative and Qualitative Disclosures About Market Risk ---------------------------------------------------------- The Partnership's cash equivalents are short-term, interest-bearing bank accounts. It has not entered into any derivative contracts. Therefore, it has no market risk exposure. PART I - Item 4. Controls and Procedures ----------------------- Disclosure Controls and Procedures: The Partnership's management, with the participation of the Partnership's Individual General Partner and Principal Financial Officer, has evaluated the effectiveness of the Partnership's disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based on such evaluation, the Partnership's Individual General Partner and Principal Financial Officer have concluded that, as of the end of such period, the Partnership's disclosure controls and procedures are effective. Internal Control Over Financial Reporting: There have been no changes in the Partnership's internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Partnership's internal control over financial reporting. PART II - OTHER INFORMATION Item 1. Legal Proceedings ----------------- As previously reported, the Partnership, as a nominal defendant, the General Partners of the Partnership and of affiliated public partnerships (the "Realmark Partnerships") and the officers and directors of the Corporate General Partner, as defendants, had been involved in a class action litigation in New York State court. The Partnership's settlement of this litigation is described in its Annual Report on Form 10-K for the year ended December 31, 2003. 6 Item 6. Exhibits and Reports on Form 8-K -------------------------------- (a) Exhibits 31. Certification Pursuant to Rule 13a-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32. Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (b) Reports on Form 8-K 1. The Partnership reported the sale of Inducon Amherst on April 5, 2004, under item 2 of Form 8-K, filed on April 16, 2004. 2. The Partnership reported the sale of Inducon Amherst on May 20, 2004, under item 2 of Form 8-K, filed on June 4, 2004. SIGNATURES ---------- 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. REALMARK PROPERTY INVESTORS LIMITED PARTNERHIP - III August 16, 2004 /s/ Joseph M. Jayson --------------- ------------------------------ Date Joseph M. Jayson, Individual General Partner and Principal Financial Officer 7

REALMARK PROPERTY INVESTORS LTD PARTNERSHIP III 10-Q