Attached files
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 September 30, 2013
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: 0-11909
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - II
(Exact name of registrant as specified in its charter)
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Delaware
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16-1212761
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(State of organization)
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(IRS Employer Identification No.)
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2350 North Forest Road, Getzville, New York 14068
(Address of principal executive offices)
(716) 636-9090
(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 has submitted electronically and posted on its corporate web site, if any, every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulations S-T (232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files) Yes [ ] No [X]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer (Do not check if a smaller reporting company) [ ] Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes [ ] No [X]
Condensed Balance Sheet
(Unaudited)
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||||||
September 30,
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December 31,
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|||||
Assets
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2013
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2012
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Property and equipment, at cost
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$ |
4,902,479
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$ |
4,870,606
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Less accumulated depreciation
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(3,893,970)
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(3,872,949)
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1,008,509
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997,657
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Equity interest in unconsolidated
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||||||
joint ventures
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1,148,515
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1,149,076
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Cash and equivalents
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64,890
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364,890
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Accounts receivable, net
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1,612
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1,381
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Receivable from affiliates, net
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170,113
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110
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Other assets
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71,290
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101,375
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Total assets
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$ |
2,464,929
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$ |
2,614,489
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Liabilities and Partners' Equity
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||||||
Accounts payable and accrued expenses
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30,898
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45,580
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Security deposits and prepaid rent
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30,701
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54,417
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Partners' equity
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2,403,330
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2,514,492
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Total liabilities and partners' equity
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$ |
2,464,929
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$ |
2,614,489
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See accompanying notes to the Financial Statements
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2
Condensed Statements of Operations
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(Unaudited)
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Three months ended September 30,
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Nine months ended September 30, | |||||||||||
2013
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2012
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2013 | 2012 | |||||||||
Rental income
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$
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116,664
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$
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126,703
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$
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388,536
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$ |
423,833
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Other income
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819
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791
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1817
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3,179
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Total income
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117,484
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127,494
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390,353
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427,012
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Property operating costs
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128,781
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141,231
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383,141
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383,911
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Administrative expense - affiliates
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20,500
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22,050
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67,648
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63,160
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Other administrative expenses
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6,456
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13,793
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29,143
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47,961
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Depreciation
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7,222
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7,222
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21,022
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21,756
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Total expenses
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162,959
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184,296
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500,954
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516,788
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Loss before equity in earnings of
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||||||||||||
unconsolidated joint ventures
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(45,476)
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(56,802)
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(110,601)
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(89,776)
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Equity in earnings of unconsolidated
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||||||||||||
joint ventures
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(23)
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(1,427)
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(562)
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19,582
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Net loss
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$
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(45,499)
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$
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(58,229)
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$
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(111,163)
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$
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(70,194)
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Net loss per limited partnership unit
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$
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(4.41)
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$
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(5.65)
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$
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(10.78)
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$ |
(6.81)
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Weighted average limited partnership
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||||||||||||
units outstanding
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10,000
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10,000
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10,000
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10,000
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See accompanying notes to the Financial Statements
3
Nine months ended September 30,
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|||||
2013
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2012
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Cash provided by (used in):
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|||||
Operating activities:
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Net loss
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$ |
(111,163)
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$ |
(70,194)
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Adjustments:
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Depreciation
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21,022
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21,756
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Equity in earnings of joint ventures
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562
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(19,582)
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Other, principally changes in other assets
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and liabilities
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(178,548)
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172,646
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Net cash provided (used in) operating activities
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(268,127)
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104,626
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Cash flows from investing activities:
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Additions to property and equipment
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(31,873)
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-
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Net increase (decrease) in cash and equivalents
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(300,000)
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104,626
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Cash and equivalents at beginning of period
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364,890
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272,461
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Cash and equivalents at end of period
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$ |
64,890
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$ |
377,087
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See accompanying notes to the Financial Statements
4
Nine months ended September 30, 2013 and 2012
(Unaudited)
Organization
Realmark Property Investors Limited Partnership - II (the Partnership), a Delaware Limited Partnership was formed on March 25, 1982, 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 stockholder 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 receive compensation for services rendered and reimbursement for expenses incurred on behalf of the Partnership.
Basis of Presentation
The accompanying unaudited interim 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, 2012 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, 2012 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
At September 30, 2013, the Partnership owned and operated an office complex in Michigan (Northwind Office Park), and was a partner in two joint ventures. It has a 50% interest in Research Triangle Industrial Park Joint Venture with the other 50% owned by Realmark Property Investors Limited Partnership - VI A (RPILP - VI A), an entity affiliated through common general partners.
Investment in Other Joint Ventures
At September 30, 2013, the Partnership also held an interest in a land joint venture with affiliated entities through common general partners. The investment in this joint ventures relates solely to land and its value is $21,181 and $21,181 as of September 30, 2013 and December 31, 2012, respectively.
Investment in Research Triangle Industrial Park Joint Venture
The Partnership has a 50% interest in Research Triangle Industrial Park Joint Venture (the Venture) with Realmark Property Investors Limited Partnership – VIA (RPILP – VIA), an entity affiliated through common general partners. The joint venture owned and operated the Research Triangle Industrial Park West, an office/warehouse facility in Durham, North Carolina, which was sold in December 2006. The joint venture agreement provides that any income, loss, gain, cash flow, or sale proceeds be allocated 50% to the Partnership and 50% to RPILP – VIA. Summary financial information of the Venture follows:
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Balance Sheet Information | ||
(Unaudited)
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September 30,
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December 31,
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2013
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2012 | ||||
Assets:
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Cash and equivalents
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$ |
1,427
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$ | 1,147 | |
Receivable from affiliates
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1,958,468
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1,789,868 | |||
Accrued interest receivable
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464,773
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464,773
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Total assets
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$ |
2,424,668
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$ |
2,255,788
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Liabilities - payables to affiliates
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170,000
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- | |||
Partners' equity:
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The Partnership
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1,127,334
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1,127,894 | |||
RPILP - VI A
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1,127,334
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1,127,894
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Total liabilities and partners' equity
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$ |
2,424,668
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$ |
2,255,788
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Operating Information | |||||
(Unaudited) | |||||
September 30, | September 30, | ||||
2013
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2012
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Income:
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Interest income
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$ |
-
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$ |
42,291
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Expenses:
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Interest
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-
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20
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Administrative
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1,121
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253
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Total expenses
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1,121
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273
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Net income loss
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$ |
(1,121)
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$ |
42,018
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Allocation of net income loss:
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The Partnership
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(561)
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21,009
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RPILP - VI A
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(560)
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21,009
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$ |
(1,121)
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$ |
42,018
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6
PART I - Item 2. Management’s Discussion and Analysis of Financial Condition and Resultof Operations
Liquidity and Capital Resources
Effective January 1, 2001, management began formally marketing all remaining properties in the Partnership for sale. The Partnership continues to maintain a cash position adequate to fund capital improvements. Cash decreased $300,000 and increased $104,626 during the nine month periods ended September 30, 2013 and 2012, respectively. The Partnership made no distributions to limited partners in the first nine months of 2013 and 2012. In accordance with the settlement of the lawsuit (Part II, Item 1), it is anticipated that with the sale of the remaining property and joint ventures, the Partnership may be in a position to make distributions to the limited partners.
Results of Operations
As compared to the first nine months of 2013, the Partnership's net loss, excluding equity in earnings from joint ventures, increased $40,969 from net loss of $70,194 in 2012 to a net loss of $111,163 in 2013. Total income for the nine months ended September 30, 2013 decreased approximately $36,700 when compared to the same period in 2012. Other administrative expense decreased approximately $18,800 due to a decrease in other professional expenses. Administrative expense to affiliates decreased approximately $4,500 due to a decrease in professional fees.
PART I - Item 3. Quantitative and Qualitative Disclosures About Market Risk
The Partnership’s cash equivalents are short-term, interest-bearing bank accounts.
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, Principal Executive Officer 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, Principal Executive Officer 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 significant changes in the Partnership’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities and 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. Management assessed the effectiveness of our internal control over financial reporting as of September 30, 2013. In making this assessment, our management used the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
7
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 was described in its Annual Report on Form 10-K for the year ended December 31, 2012.
Item 5. Other Information
Reports on Form 8-K
None.
Item 6. Exhibits
31. |
Certification Pursuant to Rule 13a-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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32. |
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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101.INS
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XBRL Instance Document*
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101.SCH
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XBRL Taxonomy Extension Schema Document*
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document*
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document*
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document*
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document*
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* In accordance with Regulation S-T, the XBRL-related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall be deemed to be “furnished” and not “filed.” |
8
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 – II
November 19, 2013
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/s/ Joseph M. Jayson
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Date
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Joseph M. Jayson
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Individual General Partner,
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Principal Executive Officer and
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Principal Financial Officer
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9