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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, 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
(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,
2003 2002
------------------------------
(unaudited)
Assets
Cash and cash equivalents $ 12,196 $ 497
Lease income receivable, net of allowance
for doubtful accounts reserve of $28,100
as of June 30, 2003 and December 31, 2002 17,682 14,161
----------- -----------
29,878 14,658
----------- -----------
Computer equipment, at cost 2,610,102 2,840,949
Accumulated depreciation (2,131,016) (2,108,544)
----------- -----------
479,086 732,405
----------- -----------
Equipment acquisition costs and deferred expenses, net 11,686 19,170
----------- -----------
Total assets $ 520,650 $ 766,233
=========== ===========
Liabilities and Partners' Capital
Liabilities
Accounts payable $ 36,860 $ 31,149
Accounts payable - Other Affiliated Limited Partnerships 17,440 2,173
Accounts payable - General Partner 113,742 59,116
Accounts payable - Commonwealth Capital Corp. 128,849 54,451
Unearned lease income 3,111 37,262
Notes payable 160,321 253,767
----------- -----------
Total liabilities 460,323 437,918
----------- -----------
Partners' Capital
General partner 1,000 1,000
Limited partners 59,327 327,315
----------- -----------
Total partners' capital 60,327 328,315
----------- -----------
Total liabilities and partners' capital $ 520,650 $ 766,233
=========== ===========
see accompanying notes to financial statements
Commonwealth Income & Growth Fund III
Statements of Operations
Three Months Ended Six Months Ended
June 30 June 30
2003 2002 2003 2002
------------------------ --------------------------
(unaudited) (unaudited)
Income
Lease $107,468 $182,343 $ 246,975 $ 456,843
Interest and other 25 116 35 250
Gain on sale of computer equipment 6,299 4,123 3,317 9,117
-------- -------- --------- ---------
Total income 113,792 186,582 250,327 466,210
-------- -------- --------- ---------
Expenses
Operating, excluding depreciation 53,676 64,933 113,519 126,929
Equipment management fee - General Partner 5,374 9,117 12,349 22,842
Interest 3,362 5,287 7,514 10,848
Depreciation 87,875 170,110 218,699 373,804
Amortization of equipment
acquisition costs and deferred expenses 3,586 5,865 7,484 16,610
Uncollectible accounts receivable - 15,976 - 23,976
-------- -------- --------- ---------
Total expenses 153,873 271,288 359,565 575,009
-------- -------- --------- ---------
Net (loss) $(40,081) $(84,706) $(109,238) $(108,799)
======== ======== ========= =========
Net (loss) per equivalent limited
partnership unit $ (0.27) $ (0.56) $ (0.72) $ (0.72)
======== ======== ========= =========
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, 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) 1,567 (110,805) (109,238)
Distributions (1,567) (157,183) (158,750)
------- ------- ------ --------- ---------
Partners' capital - June 30, 2003 50 151,178 $ 1,000 $ 59,327 $ 60,327
======= ======= ======= ========= =========
see accompanying notes to financial statements
Commonwealth Income & Growth Fund III
Statements of Cash Flow
For the Six Months Ended June 30, 2003 and 2002
2003 2002
--------- ---------
Operating activities (unaudited)
Net (loss) $(109,238) $(108,799)
Adjustments to reconcile net (loss) to net cash
provided by operating activities
Depreciation and amortization 226,183 390,414
Allowance for bad debt - 23,976
(Gain) on sale of computer equipment (3,317) (9,117)
Other noncash activities included in
determination of net (loss) (93,446) (198,211)
Changes in assets and liabilities
(Increase) in assets
Lease income receivable (3,521) (38,025)
Other receivables - Other LP's - (6,960)
Prepaid Items - (3,000)
Increase (decrease) in liabilities
Accounts payable 5,711 1,409
Accounts payable, Common Capital Corp. 74,398 (22,191)
Accounts payable, affiliated limited partnerships 15,267 -
Accounts payable, General Partner 54,626 (107,902)
Unearned lease income (34,151) 84,258
--------- ---------
Net cash provided by operating activities 132,512 5,852
--------- ---------
Investing activities:
Capital Expenditures - (64,989)
Net proceeds from the sale of computer equipment 37,937 192,400
Equipment acquisition fees paid to General Partner - (11,416)
--------- ---------
Net cash provided by investing activities 37,937 115,995
--------- ---------
Financing activities:
Distributions to partners (158,750) (88,865)
Debt Placement fee paid to the General Partner - (2,204)
--------- ---------
Net cash (used in) financing activities (158,750) (91,069)
--------- ---------
Net increase in cash and equivalents 11,699 30,778
Cash and cash equivalents, beginning of period 497 5,105
--------- ---------
Cash and cash equivalents, end of period $ 12,196 $ 35,883
========= =========
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
("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
Policies date other 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 six-month
period ended June 30, 2003 are not
necessarily indicative of financial results
that may be expected for the full year ended
December 31, 2003.
Revenue Recognition
Through June 30, 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 June 30,
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
Equipment under operating 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 June 30, 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 June 30, 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 June 30, 2003 and December 31,
2002 was approximately $84,000 and $129,000,
respectively, which is included in the
Partnership's liabilities on the balance
sheet, and the total outstanding debt at June
30, 2003 and December 31, 2002 related to the
equipment shared by the Partnership was
approximately $859,000 and $1,197,000,
respectively.
The following is a schedule of future minimum
rentals on noncancellable operating leases at
June 30, 2003:
Amount
------------------------------------------------------------- --------
Six Months ended December 31, 2003 $134,000
Year Ended December 31, 2004 109,000
Year Ended December 31, 2005 14,000
--------
$257,000
--------------------------------------------------------------------------
4. Notes Payable Notes payable consisted of the following:
June 30, December 31,
2003 2002
-------------------------------------------------------------------------------
Installment notes were payable to banks; interest
ranging from 7.35% to 8.10%; due in monthly
installments ranging from $1,162 to $3,465
including interest through June 2003. $ - $ 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. 86,643 133,292
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. 73,678 93,507
-------- --------
$160,321 $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 June 30, 2003 are as follows:
Amount
---------------------------------------------------------------------------
Six months ended December 31, 2003 $ 68,884
Year ended December 31, 2004 81,135
Year ended December 31, 2005 10,302
--------
$160,321
========
5. Supplemental Other noncash activities included in the
Cash Flow determination of net loss are as follows:
Information
Six months ended June 30, 2003 2002
- ----------------------------------------------------------------------------
Lease income, net of interest expense on
notes payable realized as a result of
direct payment of principal by lessee to
bank $93,446 $198,211
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, 2003 2002
- ----------------------------------------------------------------------------
Debt assumed in connection with purchase
of computer equipment $ - $220,413
- ----------------------------------------------------------------------------
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 June 30, 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 six months ended June 30,
2003 and 2002 were cash from operations of $133,000 and $6,000, respectively.
Net proceeds received from sales of equipment were approximately $38,000 and
$193,000, respectively. The primary uses of cash for the six months ended June
30, 2003 and 2002 was for payments of preferred distributions to partners of
approximately $159,000 and $89,000, respectively, and for the purchase of new
computer equipment of approximately $65,000 for the period ending June 30, 2002.
There was no new equipment purchased in 2003.
For the period ending June 30, 2003, the Partnership generated cash flow from
operating activities of $133,000, which includes net loss of $109,000 and
depreciation and amortization expenses of $226,000. Other noncash activities
included in the determination of net income include direct payments of lease
income by lessees to banks of $93,000.
For the six month period ended June 30, 2002, the Partnership generated cash
flows from operating activities of $6,000, 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.
The Partnership sold computer equipment for the six months ending June 30, 2003
with a net book value of approximately $35,000 for a net gain on sale of
equipment of approximately $3,000. For the period ended June 30, 2002, the
Partnership sold computer equipment with a net book value of approximately
$183,000 for a gain on sale of equipment of approximately $9,000.
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 June 30, 2003, the Partnership had future minimum rentals on non-cancelable
operating leases of $134,000 for the balance of the year ending December 31,
2003 and $123,000 thereafter. At June 30, 2003, the outstanding debt was
$160,000, with interest rates ranging from 6.25% to 8.00%, 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, 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 June 30, 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 June 30, 2003 and December
31, 2002 was approximately $84,000 and $129,000, respectively, which is included
in the Partnership's liabilities on the balance sheet, and the total outstanding
debt at June 30, 2003 and December 31, 2002 related to the equipment shared by
the Partnership was approximately $859,000 and $1,197,000, respectively.
Results of Operations
Three Months Ended June 30, 2003 compared to Three Months Ended June 30, 2002
- -----------------------------------------------------------------------------
For the quarter ended June 30, 2003, the Partnership recognized income of
$114,000 and expenses of $154,000, resulting in a net loss of $40,000. 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.
Lease income decreased by 41% to $107,000 for the quarter ended June 30, 2003,
from $182,000 for the quarter ended June 30, 2002, primarily due to the fact
that more lease agreements ended than new lease agreements acquired since the
quarter ended June 30, 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 17% to
approximately $54,000 for the quarter ended June 30, 2003, from $65,000 for the
quarter ended June 30, 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 $1,000, a decrease in accounting
fees of approximately $6,000, a decrease in insurance of approximately $4,000
and a decrease in miscellaneous outside office services of approximately $2,000.
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 41% to approximately $5,000 for the quarter ended June
30, 2003, from $9,000 for the quarter ended June 30, 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
48% to approximately $91,000 for the quarter ended June 30, 2003, from $176,000
for the quarter ended June 30, 2002 due to equipment and acquisition fees being
fully depreciated/amortized and not being replaced with as many new purchases.
The partnership did not record bad debt expenses for the quarter ended June 30,
2003. 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 a net book value of $30,000 for the
quarter ended June 30, 2003, for a net gain of $6,000. The Partnership sold
computer equipment with no net book value for the quarter ended June 30, 2002,
for a net gain of $4,000.
Interest expense decreased 36% to $3,000 for the quarter ended June 30, 2003
from $5,000 for the quarter ended June 30, 2002, primarily due to the decrease
in debt relating to the purchase of computer equipment.
Six Months Ended June 30, 2003 compared to Six Months Ended June 30, 2002
- -------------------------------------------------------------------------
For the six months ended June 30, 2003, the Partnership recognized income of
$250,000 and expenses of $359,000, resulting in a net loss of $109,000. 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.
Lease income decreased by 46% to $247,000 for the six months ended June 30,
2003, from $457,000 for the six months ended June 30, 2002, primarily due to the
fact that more lease agreements ended than new lease agreements acquired since
the six months ended June 30, 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 11% to
approximately $114,000 for the six months ended June 30, 2003, from $127,000 for
the six months ended June 30, 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 $8,000, an increase in
licenses and filing fees of approximately $4,000, a decrease in conventions of
approximately $4,000 and a decrease in accounting fees of approximately $20,000.
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 46% to approximately $12,000 for the six months ended
June 30, 2003, from $22,000 for the six months ended June 30, 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
42% to approximately $226,000 for the six months ended June 30, 2003, from
$390,000 for the six months ended June 30, 2002 due to equipment and acquisition
fees being fully depreciated/amortized and not being replaced with as many new
purchases.
The partnership did not record bad debt expenses for the quarter ended June 30,
2003. The Partnership recorded bad debt expenses of approximately $24,000
related to disputed accounts receivables balances for the quarter ended June 30,
2002.
The Partnership sold computer equipment with a net book value of $35,000 for the
six months ended June 30, 2003, for a net gain of $3,000. 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.
Interest expense decreased 31% to $8,000 for the six months ended June 30, 2003
from $11,000 for the six months ended June 30, 2002, primarily due to the
decrease in debt relating to the purchase of computer equipment.
RECENT ACCOUNTING PRONOUNCEMENTS
SFAS 150
In May 2003, the FASB issued FASB Statement No. 150, Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity, which
establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of liabilities and equity. It
requires that an issuer classify a financial instrument that is within its scope
as a liability (or an asset in some circumstances). Many of those instruments
were previously classified as equity. SFAS is applicable immediately for
financial instruments entered into or modified after May 31, 2003 and otherwise
shall be effective at the beginning of the first interim period beginning after
June 15, 2003. The Partnership believes that the adoption of SFAS 150 will not
have an impact on its financial position and results of operations.
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
June 30, 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:
31.1 THE RULE 15d-14(a)
31.2 THE RULE 15d-14(a)
32.1 SECTION 1350 CERTIFICATION OF CEO
32.2 SECTION 1350 CERTIFICATION OF CFO
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 12, 2003 By: /s/ George S. Springsteen
- --------------- --------------------------------
Date George S. Springsteen
President