FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2002
OR
o 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: 333-76435
WNC HOUSING TAX CREDIT FUND VI, L.P., Series 9
WNC HOUSING TAX CREDIT FUND VI, L.P., Series 10
California 33-0316953
California 33-0974362
(State or other jurisdiction of I.R.S. Employer
incorporation or organization) Identification No.)
3158 Redhill Avenue, Suite 120, Costa Mesa, CA 92626
(714) 662-5565
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to section 12(g) of the Act:
UNITS OF LIMITED PARTNERSHIP INTEREST
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 if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. |X|
1
State the aggregate market value of the voting and non-voting common equity held
by non-affiliates of the registrant.
INAPPLICABLE
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference and the Part
of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is
incorporated: (1) Any annual report to security holders; (2) Any proxy or
information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or
(c) under the Securities Act of 1933. The listed documents should be clearly
described for identification purposes (e.g., annual report to security holders
for fiscal year ended December 24, 1980).
2
PART 1.
Item 1. Business
Organization
WNC Housing Tax Credit Fund, VI, L.P., Series 9 (the "Partnership") was formed
under the California Revised Limited Partnership Act on July 17, 2001 and
commenced operations on August 3, 2001, the effective date of its public
offering pursuant to the Securities and Exchange Commission's approval of the
Partnership's Pre-Effective Amendment No. 1 to Form S-11 initially filed on
August 16, 2001. The Partnership was formed to invest primarily in other limited
partnerships or limited liability companies which will own and operate
multifamily housing complexes that are eligible for low-income housing federal
and, in certain cases, California income tax credits ("Low Income Housing
Credit").
WNC Housing Tax Credit Fund, VI, L.P., Series 10 ("Series 10") currently has no
assets or liabilities and has had no operations. Accordingly, no financial
information is included herein for Series 10.
The general partner of the Partnership is WNC & Associates, Inc. ("Associates"
or the "General Partner".) Wilfred N. Cooper, Sr., through the Cooper Revocable
Trust, owns 93.65% of the outstanding stock of WNC. Wilfred N. Cooper, Jr.,
President of WNC, owns 3.01% of the outstanding stock of WNC. The business of
the Partnership is conducted primarily through Associates, as the Partnership
has no employees of its own.
Pursuant to a registration statement filed with the Securities and Exchange
Commission on August 16, 2001, the Partnership commenced a public offering of
25,000 units of Limited Partnership Interest ("Units"), at a price of $1,000 per
Unit. As of March 31, 2002, the Partnership had received and accepted
subscriptions for 1,933 Units in the amount of $1,933,000, of which $151,500 was
represented by promissory notes of the subscribers. Holders of Units are
referred to herein as "Limited Partners."
Description of Business
The Partnership's principal business objective is to provide its Limited
Partners with Low Income Housing Credits. The Partnership's principal business
therefore consists of investing as a limited partner or non-managing member in
Local Limited Partnerships each of which will own and operate a multi-family
housing complex (the "Housing Complex") which will qualify for the Low Income
Housing Credit. In general, under Section 42 of the Internal Revenue Code, an
owner of low-income housing can receive the Low Income Housing Credit to be used
to reduce Federal taxes otherwise due in each year of a ten-year period. In
general, under Section 17058 of the California Revenue and Taxation Code, an
owner of low-income housing can receive the Low Income Housing Credit to be used
against California taxes otherwise due in each year of a four-year period. The
Housing Complex is subject to a fifteen-year compliance period (the "Compliance
Period"), and under state law may have to be maintained as low income housing
for 30 or more years.
In general, in order to avoid recapture of Low Income Housing Credits, the
Partnership does not expect that it will dispose of its interests in Local
Limited Partnerships ("Local Limited Partnership Interests") or approve the sale
by any Local Limited Partnership of its Housing Complex prior to the end of the
applicable Compliance Period. Because of (i) the nature of the Housing
Complexes, (ii) the difficulty of predicting the resale market for low-income
housing 15 or more years in the future, and (iii) the ability of government
lenders to disapprove of transfer, it is not possible at this time to predict
whether the liquidation of the Partnership's assets and the disposition of the
proceeds, if any, in accordance with the Partnership's Agreement of Limited
Partnership, as amended "by Supplements thereto" (the "Partnership Agreement"),
will be able to be accomplished promptly at the end of the 15-year period. If a
Local Limited Partnership is unable to sell its Housing Complex, it is
anticipated that the local general partner ("Local General Partner") will either
continue to operate such Housing Complex or take such other actions as the Local
General Partner believes to be in the best interest of the Local Limited
Partnership. Notwithstanding the preceding, circumstances beyond the control of
the General Partner or the Local General Partners may occur during the
Compliance Period, which would require the Partnership to approve the
disposition of a Housing Complex prior to the end thereof, possibly resulting in
recapture of Low Income Housing Credits.
3
As of March 31, 2002, the Partnership had not made any investments in Local
Limited Partnerships.
The Partnership's investments in Local Limited Partnerships are subject to the
risks incident to the management and ownership of low-income housing and to the
management and ownership of multi-unit residential real estate. Some of these
risks are that the Low Income Housing Credit could be recaptured and that
neither the Partnership's investments nor the Housing Complexes owned by the
Local Limited Partnerships will be readily marketable. To the extent the Housing
Complexes receive government financing or operating subsidies, they may be
subject to one or more of the following risks: difficulties in obtaining tenants
for the Housing Complexes; difficulties in obtaining rent increases; limitations
on cash distributions; limitations on sales or refinancing of Housing Complexes;
limitations on transfers of Local Limited Partnership Interests; limitations on
removal of Local General Partners; limitations on subsidy programs; and possible
changes in applicable regulations. The Housing Complexes are subject to mortgage
indebtedness. If a Local Limited Partnership does not make its mortgage
payments, the lender could foreclose resulting in a loss of the Housing Complex
and Low Income Housing Credits. As a limited partner or non-managing member of
the Local Limited Partnerships, the Partnership will have very limited rights
with respect to management of the Local Limited Partnerships, and will rely
totally on the general partners or managing members of the Local Limited
Partnerships for management of the Local Limited Partnerships. The value of the
Partnership's investments will be subject to changes in national and local
economic conditions, including unemployment conditions, which could adversely
impact vacancy levels, rental payment defaults and operating expenses. This, in
turn, could substantially increase the risk of operating losses for the Housing
Complexes and the Partnership. In addition, each Local Limited Partnership is
subject to risks relating to environmental hazards and natural disasters, which
might be uninsurable. Because the Partnership's operations will depend on these
and other factors beyond the control of the General Partner and the Local
General Partners, there can be no assurance that the anticipated Low Income
Housing Credits will be available to Limited Partners.
In addition, Limited Partners are subject to risks in that the rules governing
the Low Income Housing Credit are complicated, and the use of credits can be
limited. The only material benefit from an investment in Units may be the Low
Income Housing Credits. There are limits on the transferability of Units, and it
is unlikely that a market for Units will develop. All Partnership management
decisions are made by the General Partner.
As a limited partner or non-managing member, the Partnership's liability for
obligations of each Local Limited Partnership is limited to its investment. The
Local General Partners of each Local Limited Partnership retain responsibility
for developing, constructing, maintaining, operating and managing the Housing
Complexes.
Item 2. Properties
None
4
Item 3. Legal Proceedings
NONE
Item 4. Submission of Matters to a Vote of Security Holders
NONE
PART II.
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
Item 5a.
(a) The Units are not traded on a public exchange but are being sold through
a public offering. It is not anticipated that any public market will
develop for the purchase and sale of any Unit. Units can be assigned only
if certain requirements in the Partnership Agreement are satisfied.
(b) At March 31, 2002, there were 113 Limited Partners.
(c) The Partnership was not designed to provide cash distributions to Limited
Partners in circumstances other than refinancing or disposition of its
investments in Local Limited Partnerships.
(d) No unregistered securities were sold by the Partnership during the year
ended March 31, 2002.
Item 5b.
The Partnership conducted an offering pursuant to a registration statement
(Commission File No. 333-67670) which was declared effective on November 14,
2001. As of March 31, 2002, the Partnership had received subscriptions for 1,933
Units, for an aggregate amount of capital contributions of $1,933,000. At March
31, 2002, the above capital contributions consisted of cash of $1,417,500,
subscriptions receivable of $364,000 and notes receivable of $151,500. At March
31, 2002, approximately $251,290 was paid or due to Associates or WNC Capital
Corporation, the dealer-manager for the offering, for selling commissions,
wholesaling activities and in reimbursement of other organization and offering
expenses. Included therein are selling commissions of approximately $135,000
which were paid or were to be paid to non-affiliates. At March 31, 2002,
approximately $1,681,710 is invested or available to be invested in Local
Limited Partnership Interests or Reserves as follows:
Paid or to be
Paid to Paid or to be
Affiliates Paid to Others Total
--------------- --------------- ---------------
Acquisition Fees through 3/31/2002 $ 135,310 $ - $ 135,310
Acquisition Costs through 3/31/2002 38,660 - 38,660
Reserves or cash available to be invested - 1,507,740 1,507,740
--------------- --------------- ---------------
Total $ 173,970 $ 1,507,740 $ 1,681,710
=============== =============== ===============
5
Item 6. Selected Financial Data
Selected balance sheet information for the Partnership is as follows:
March 31
---------------
2002
---------------
ASSETS
Cash and cash equivalents $ 1,221,805
Subscriptions and notes
receivable 364,026
Acquisition fees and costs, net 173,781
---------------
$ 1,759,612
===============
LIABILITIES
Accrued fees and expenses due to
general partner and affiliates $ 228,940
Other liabilities 6,900
PARTNERS' EQUITY 1,523,772
---------------
$ 1,759,612
===============
Selected results of operations, cash flows, and other information for the
Partnership for the following periods:
For the period
from August 3,
2001 (date
operations
commenced) to
March 31, 2002
----------------
Net loss $ (7,538)
================
Net loss allocated to:
General partner $ (8)
================
Limited partners $ (7,530)
================
Net loss per limited partner
unit $ (188.25)
================
Outstanding weighted limited
partner units 40
================
6
For the period
from August 3,
2001 (date
operation
commenced) to
March 31, 2002
----------------
Net cash provided by (used in):
Operating activities $ 415
Investing activities (136,530)
Financing activities 1,357,920
----------------
Net change in cash and cash
equivalents 1,221,805
Cash and cash equivalents,
beginning of period -
----------------
Cash and cash equivalents, end
of period $ 1,221,805
================
Low Income Housing Credit per Unit was as follows for the period ended December
31, 2001:
2001
----------------
Federal $ -
State -
----------------
Total $ -
================
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Forward Looking Statements
With the exception of the discussion regarding historical information,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and other discussions elsewhere in this Form 10-K contain forward
looking statements. Such statements are based on current expectations subject to
uncertainties and other factors which may involve known and unknown risks that
could cause actual results of operations to differ materially from those
projected or implied. Further, certain forward-looking statements are based upon
assumptions about future events which may not prove to be accurate.
Risks and uncertainties inherent in forward looking statements include, but are
not limited to, our future cash flows and ability to obtain sufficient
financing, level of operating expenses, conditions in the low income housing tax
credit property market and the economy in general, as well as legal proceedings.
Historical results are not necessarily indicative of the operating results for
any future period.
Subsequent written and oral forward looking statements attributable to us or
persons acting on our behalf are expressly qualified in their entirety by
cautionary statements in this Form 10-K and in other reports we filed with the
Securities and Exchange Commission. The following discussion should be read in
conjunction with the Consolidated Financial Statements and the Notes thereto
included elsewhere in this filing.
7
Financial Condition
The Partnership's assets at March 31, 2002 consisted primarily of $1,222,000 in
cash, $364,000 in subscriptions receivable, prepaid acquisition fees and costs
of $174,000. Liabilities at March 31, 2002 consisted of $229,000 in advances and
other payables due to the General Partner or affiliates and $7,000 in other
liabilities.
The Partnership will offer Units for sale to the public until approximately
August 2002, at which time total limited partner capital is expected to be
approximately $10,000,000 ($1,933,000 raised at March 31, 2002).
Results of Operations
The Partnership commenced operations on August 3, 2001. As a result, there are
no comparative results of operations or financial condition from prior periods
to report. Net income for the period ended March 31, 2002 was principally
composed of interest income, offset by amortization and other operating
expenses. Accordingly, there were no Low Income Housing Credits available for
allocation to the partners.
The two periods are not comparable as minimal operations occurred during the
period ended March 31, 2002.
Cash Flows
Cash flows provided by operating activities for the period ended March 31, 2002
included interest income from cash investments less miscellaneous costs of
operations. Cash flows provided by financing activities for the period ended
March 31, 2002, primarily consisted of proceeds from the sale of Units of
$1,419,000, net of promissory notes of $151,000, subscriptions receivable of
$364,000, and offering expenses paid of $61,000.
Cash flows used in investing activities for the period ended March 31, 2002
consisted of capitalized acquisition fees and costs totaling $137,000.
Since March 31, 2002, the Partnership has raised equity capital sufficient to
satisfy all of its identified obligations. In this regard, the Partnership
expects its future cash flows, together with its net available assets at March
31, 2002, to be sufficient to meet all currently foreseeable future cash
requirements.
Impact of Accounting Pronouncement
In October 2001, the FASB issued Statement of Financial Accounting Standards No.
144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS
144"), which addresses accounting and financial reporting for the impairment or
disposal of long-lived assets. SFAS 144 is effective for fiscal years beginning
after December 15, 2001, and generally, is to be applied prospectively. We have
not yet completed our evaluation of the impact of SFAS 144 on our financial
position or results of operations.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
NONE.
Item 8. Financial Statements and Supplementary Data
8
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
--------------------------------------------------
To the Partners
WNC Housing Tax Credit Fund VI, L.P., Series 9
We have audited the accompanying balance sheet of WNC Housing Tax Credit Fund
VI, L.P., Series 9 (a California Limited Partnership) (the "Partnership") as of
March 31, 2002, and the related statements of operations, partners' equity and
cash flows for the period August 3, 2001 (date operations commenced) through
March 31, 2002. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly in all
material respects, the financial position of WNC Housing Tax Credit Fund VI,
L.P., Series 9 (a California Limited Partnership) as of March 31, 2002, and the
results of its operations and its cash flows for the period August 3, 2001 (date
operations commenced) through March 31, 2002 in conformity with accounting
principles generally accepted in the United States of America.
/s/ BDO SEIDMAN, LLP
Orange County, California
May 2, 2002
9
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 9
(A California Limited Partnership)
BALANCE SHEET
March 31,
2002
-------------
ASSETS
Cash and cash equivalents $ 1,221,805
Subscriptions and notes receivable (Note 4) 364,026
Acquisition fees and costs (Note 2) 173,781
-------------
$ 1,759,612
=============
LIABILITIES AND PARTNERS' EQUITY
Liabilities:
Accrued fees and expenses due to General
Partner and affiliates (Note 2) $ 228,940
Other liabilities 6,900
-------------
Total liabilities 235,840
-------------
Commitments and contingencies (Note 5)
Partners' equity (Notes 4 and 6)
General partner 92
Limited partners (25,000 units authorized, and 1,933 units
outstanding at March 31, 2002) 1,523,680
-------------
Total partners' equity 1,523,772
-------------
$ 1,759,612
=============
See accompanying notes to financial statements
10
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 9
(A California Limited Partnership)
STATEMENT OF OPERATIONS
For The Period
August 3,
2001 (Date
Operations
Commenced)
through
March 31, 2002
---------------------
Interest income $ 441
------------------
Operating expenses:
Amortization (Note 2) 189
Legal and accounting 7,635
Other 155
------------------
Total operating expenses 7,979
------------------
Loss from operations (7,538)
------------------
Net loss $ (7,538)
==================
Net loss allocated to:
General partner $ (8)
==================
Limited partners $ (7,530)
==================
Net loss per limited partner unit $ (188.25)
==================
Outstanding weighted limited partner units 40
==================
See accompanying notes to financial statements
11
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 9
(A California Limited Partnership)
STATEMENT OF PARTNERS' EQUITY
For The Period August 3, 2001 (Date Operations Commenced)
through March 31, 2002
General Limited
Partner Partners Total
--------------- --------------- ---------------
Contribution from General Partner and initial limited
partner on August 3, 2001 $ 100 $ 1,000 $ 1,100
Sale of limited partnership units - 1,933,000 1,933,000
Sale of limited partnership units issued for
promissory notes receivable (Note 4) - (151,500) (151,500)
Offering expenses - (251,290) (251,290)
Net loss (8) (7,530) (7,538)
--------------- --------------- ---------------
Partners' equity at March 31, 2002 $ 92 $ 1,523,680 $ 1,523,772
=============== =============== ===============
See accompanying notes to financial statements
12
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 9
(A California Limited Partnership)
STATEMENT OF CASH FLOWS
For The Period
August 3, 2001
(Date Operations
Commenced)
through
March 31, 2002
------------------
Cash flows from operating activities:
Net loss $ (7,538)
Adjustments to reconcile net income to
net cash provided by operating activities:
Amortization 189
Change in notes receivable (26)
Change in due to general partner and affiliates 890
Change in other liabilities 6,900
------------------
Net cash provided by operating
activities 415
------------------
Cash flows from investing activities:
Capitalized acquisition costs and fees (136,530)
------------------
Net cash used in investing activities (136,530)
------------------
Cash flows from financing activities:
Capital contributions 1,418,600
Offering expenses (60,680)
------------------
Net cash provided by financing activities 1,357,920
------------------
Net increase in cash and cash
equivalents 1,221,805
Cash and cash equivalents, beginning of period -
------------------
Cash and cash equivalents, end of period $ 1,221,805
==================
See accompanying notes to financial statements
13
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 9
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For The Period August 3, 2001 (Date Operations Commenced)
through March 31, 2002
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- ---------------------------------------------------
Organization
- ------------
WNC Housing Tax Credit Fund VI, L.P., Series 9, a California Limited Partnership
(the "Partnership"), was formed on July 17, 2001 under the laws of the state of
California, and commenced operations on August 3, 2001, the effective date of
its public offering pursuant to the Securities and Exchange Commission's
approval of the Partnership's Pre-Effective Amendment No. 1 to Form S-11
initially filed on August 16, 2001. Prior to August 3, 2001, the Partnership was
considered a development-stage enterprise. The Partnership was formed to invest
primarily in other limited partnerships and limited liability companies (the
"Local Limited Partnerships") which own and operate multi-family housing
complexes (the "Housing Complex") that are eligible for low income housing tax
credits. The local general partners (the "Local General Partners") of each Local
Limited Partnership retain responsibility for maintaining, operating and
managing the Housing Complex.
The general partner is WNC & Associates, Inc. ("WNC") (the "General Partner"), a
California limited partnership. Wilfred N. Cooper, Sr., through the Cooper
Revocable Trust, owns 93.65% of the outstanding stock of WNC. Wilfred N. Cooper,
Jr., President of WNC, owns 3.01% of the outstanding stock of WNC. The business
of the Partnership is conducted primarily through WNC as the Partnership has no
employees of its own.
The Partnership shall continue in full force and effect until December 31, 2062,
unless terminated prior to that date, pursuant to the partnership agreement or
law.
The financial statements include only activity relating to the business of the
Partnership, and do not give effect to any assets that the partners may have
outside of their interests in the Partnership, or to any obligations, including
income taxes, of the partners.
The Partnership agreement authorized the sale of up to 25,000 units at $1,000
per Unit ("Units"). As of March 31, 2002, 1,933 Units, representing
subscriptions in the amount of $1,933,000 had been accepted. The General Partner
has a 0.1% interest in operating profits and losses, taxable income and losses,
in cash available for distribution from the Partnership and tax credits. The
limited partners will be allocated the remaining 99.9% interest in proportion to
their respective investments.
After the limited partners have received proceeds from a sale or refinancing
equal to their capital contributions and their return on investment (as defined
in the Partnership Agreement) and the General Partner has received proceeds
equal to its capital contribution and a subordinated disposition fee (as
described in Note 3) from the remainder, any additional sale or refinancing
proceeds will be distributed 90% to the limited partners (in proportion to their
respective investments) and 10% to the General Partner.
14
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 9
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Period August 3, 2001 (Date Operations Commenced)
through March 31, 2002
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
- --------------------------------------------------------------
Risks and Uncertainties
- -----------------------
The Partnership's investments in Local Limited Partnerships are subject to the
risks incident to the management and ownership of low-income housing and to the
management and ownership of multi-unit residential real estate. Some of these
risks are that the low income housing credit could be recaptured and that
neither the Partnership's investments nor the Housing Complexes owned by the
Local Limited Partnerships will be readily marketable. To the extent the Housing
Complexes receive government financing or operating subsidies, they may be
subject to one or more of the following risks: difficulties in obtaining tenants
for the Housing Complexes; difficulties in obtaining rent increases; limitations
on cash distributions; limitations on sales or refinancing of Housing Complexes;
limitations on transfers of Local Limited Partnership Interests; limitations on
removal of Local General Partners; limitations on subsidy programs; and possible
changes in applicable regulations. The Housing Complexes are or will be subject
to mortgage indebtedness. If a Local Limited Partnership does not make its
mortgage payments, the lender could foreclose resulting in a loss of the Housing
Complex and low-income housing credits. As a limited partner of the Local
Limited Partnerships, the Partnership will have very limited rights with respect
to management of the Local Limited Partnerships, and will rely totally on the
Local General Partners of the Local Limited Partnerships for management of the
Local Limited Partnerships. The value of the Partnership's investments will be
subject to changes in national and local economic conditions, including
unemployment conditions, which could adversely impact vacancy levels, rental
payment defaults and operating expenses. This, in turn, could substantially
increase the risk of operating losses for the Housing Complexes and the
Partnership. In addition, each Local Limited Partnership is subject to risks
relating to environmental hazards and natural disasters, which might be
uninsurable. Because the Partnership's operations will depend on these and other
factors beyond the control of the General Partner and the Local General
Partners, there can be no assurance that the anticipated low income housing
credits will be available to Limited Partners.
In addition, Limited Partners are subject to risks in that the rules governing
the low income housing credit are complicated, and the use of credits can be
limited. The only material benefit from an investment in Units may be the low
income housing credits. There are limits on the transferability of Units, and it
is unlikely that a market for Units will develop. All management decisions will
be made by the General Partner.
Method of Accounting for Investments in Limited Partnerships
- ------------------------------------------------------------
The Partnership intends to account for its investments in limited partnerships
using the equity method of accounting, whereby the Partnership adjusts its
investment balance for its share of the Local Limited Partnership's results of
operations and for any distributions received. The accounting policies of the
Local Limited Partnership's are consistent with those of the Partnership. Costs
incurred by the Partnership in acquiring the investments are capitalized as part
of the investment account and are being amortized over 30 years.
Offering Expenses
- -----------------
Offering expenses consist of underwriting commissions, legal fees, printing,
filing and recordation fees, and other costs incurred in connection with selling
limited partnership interests in the Partnership. The General Partner is
obligated to pay all offering and organization costs in excess of 13% (excluding
sales commissions and the dealer manager fee) of the total offering proceeds.
Offering expenses are reflected as a reduction of partners' capital and amounted
to $251,290 as of March 31, 2002.
15
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 9
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Period August 3, 2001 (Date Operations Commenced)
through March 31, 2002
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
- --------------------------------------------------------------
Use of Estimates
- ----------------
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America 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 materially differ from those
estimates.
Cash and Cash Equivalents
- -------------------------
The Partnership considers all highly liquid investments with remaining
maturities of three months or less when purchased to be cash equivalents. As of
March 31, 2002, the Partnership had no cash equivalents.
Concentration of Credit Risk
- ----------------------------
At March 31, 2002, the Partnership maintained cash balances at certain financial
institutions in excess of the federally insured maximum.
Net Income Per Limited Partner Unit
- -----------------------------------
Net income per limited partner unit is calculated pursuant to Statement of
Financial Accounting Standards No. 128, Earnings Per Share. Net income per unit
includes no dilution and is computed by dividing income available to limited
partners by the weighted average number of units outstanding during the period.
Calculation of diluted net income per unit is not required.
Reporting Comprehensive Income
- ------------------------------
The Statement of Financial Accounting Standards ("SFAS") No. 130, Reporting
Comprehensive Income established standards for the reporting and display of
comprehensive income (loss) and its components in a full set of general-purpose
financial statements. The Partnership had no items of other comprehensive income
during the years ended December 31, 2001 and 2000, as defined by SFAS No. 130.
New Accounting Pronouncement
- ----------------------------
In October 2001, the FASB issued Statement of Financial Accounting Standards No.
144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS
144"), which addresses accounting and financial reporting for the impairment or
disposal of long-lived assets. SFAS 144 is effective for fiscal years beginning
after December 15, 2001, and generally, is to be applied prospectively. The
Partnership has not yet completed its evaluation of the impact of SFAS 144 on
its financial position or results of operations.
16
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 9
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Period August 3, 2001 (Date Operations Commenced)
through March 31, 2002
NOTE 2 - RELATED PARTY TRANSACTIONS
- -----------------------------------
Under the terms of the Partnership Agreement, the Partnership has paid or is
obligated to the General Partner or their affiliates for the following items:
Acquisition fees of 7% of the gross proceeds from the sale of Units as
compensation for services rendered in connection with the acquisition of
Local Limited Partnerships. As of March 31, 2002, the Partnership
incurred acquisition fees of $135,310 which will be included in
investments in limited partnerships. Accumulated amortization of these
capitalized costs was $147, as of March 31, 2002.
Acquisition costs of 2% of the gross proceeds from the sale of Units as
full reimbursement of costs incurred by the General Partner in connection
with the acquisition of Local Limited Partnerships. As of March 31, 2002,
the Partnership incurred acquisition costs of $38,660, which will be
included in investments in limited partnerships. Accumulated amortization
was $42 as of March 31, 2002.
An annual asset management fee not to exceed 0.5% of the invested assets
(defined as the sum of the series' investment in local limited
partnerships and the series' allocable share of the amount of the
mortgage loans on, and other debts related to, the apartment complexes)
of the Local Limited Partnerships. There were no management fees incurred
during the period ended March 31, 2002.
A subordinated disposition fee in an amount equal to 1% of the sales
price of real estate sold. Payment of this fee is subordinated to the
limited partners receiving a return on investment (as defined in the
Partnership Agreement) and is payable only if the General Partner or its
affiliates render services in the sales effort.
The accrued fees and expenses due to General Partner and affiliates consist of
the following at March 31, 2002:
March 31
---------------
2002
---------------
Acquisition fees payable $ 29,120
Acquisition expenses payable 8,320
Organizational, offering and selling costs payable 16,640
Commissions payable 173,970
Reimbursements for expenses paid by the General Partner or an affiliate 890
---------------
Total $ 228,940
===============
NOTE 3 - INCOME TAXES
No provision for income taxes has been recorded in the accompanying financial
statements, as any liability for income taxes is the obligation of the partners
of the Partnership.
17
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 9
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Period August 3, 2001 (Date Operations Commenced)
through March 31, 2002
NOTE 4 - SUBSCRIPTIONS AND NOTES RECEIVABLE
- -------------------------------------------
As of March 31, 2002, the Partnership had received subscriptions for 1,933 units
which included subscriptions receivable of $364,000 and promissory notes of
$151,500, of which all of the subscription receivables were collected and $0 of
the promissory notes were collected after March 31, 2002 and prior to the
issuance of these financial statements, leaving an unpaid balance of $151,500.
Limited partners who subscribed for ten or more units of limited partnerships
interest ($10,000) could elect to pay 50% of the purchase price in cash upon
subscription and the remaining 50% by the delivery of a promissory note payable,
together with interest at a rate equal to the three month treasury bill rate as
of the date of execution of the promissory note, due no later than 13 months
after the subscription date.
NOTE 5 - COMMITMENTS AND CONTINGENCIES
- --------------------------------------
From April 1, 2002 to May 2, 2002, the Partnership acquired three Local Limited
Partnership interests which required capital contributions of $1,151,847. Of
this amount, $410,137 has been contributed to the Local Limited Partnerships
during the period from April 1, 2002 to May 2, 2002.
NOTE 6 - SUBSEQUENT EVENT
- -------------------------
From April 1, 2002 to May 2, 2002, the Partnership received subscriptions for an
additional 929 Units, for which it has received $740,000.
18
Item 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure
NOT APPLICABLE
PART III
Item 10. Directors and Executive Officers of the Registrant
The Partnership has no directors or executive officers of its own. The following
biographical information is presented for the directors and executive officers
of Associates which has principal responsibility for the Partnership's affairs.
Directors and Executive Officers of WNC & Associates, Inc.
The directors of WNC & Associates, Inc. are Wilfred N. Cooper, Sr., who serves
as Chairman of the Board, David N. Shafer, Wilfred N. Cooper, Jr. and Kay L.
Cooper. The principal shareholders of WNC & Associates, Inc. is a trust
established by Wilfred N. Cooper, Sr.
Wilfred N. Cooper, Sr., age 71, is the founder, Chairman, Chief Executive
Officer and a Director of WNC & Associates, Inc., a Director of WNC Capital
Corporation, and a general partner in some of the programs previously sponsored
by the Sponsor. Mr. Cooper has been involved in real estate investment and
acquisition activities since 1968. Previously, during 1970 and 1971, he was
founder and principal of Creative Equity Development Corporation, a predecessor
of WNC & Associates, Inc., and of Creative Equity Corporation, a real estate
investment firm. For 12 years prior to that, Mr. Cooper was employed by Rockwell
International Corporation, last serving as its manager of housing and urban
developments where he had responsibility for factory-built housing evaluation
and project management in urban planning and development. Mr. Cooper is a
Director of the National Association of Home Builders (NAHB) and a National
Trustee for NAHB's Political Action Committee, a Director of the National
Housing Conference (NHC) and a member of NHC's Executive Committee and a
Director of the National Multi-Housing Council (NMHC). Mr. Cooper graduated from
Pomona College in 1956 with a Bachelor of Arts degree.
Wilfred N. Cooper, Jr., age 39, is President, Chief Operating Officer, a
Director and a member of the Acquisition Committee of WNC & Associates, Inc. He
is President of, and a registered principal with, WNC Capital Corporation, a
member firm of the NASD, and is a Director of WNC Management, Inc. He has been
involved in investment and acquisition activities with respect to real estate
since he joined the Sponsor in 1988. Prior to this, he served as Government
Affairs Assistant with Honda North America in Washington, D.C. Mr. Cooper is a
member of the Advisory Board for LIHC Monthly Report, a Director of NMHC and an
Alternate Director of NAHB. He graduated from The American University in 1985
with a Bachelor of Arts degree.
David N. Shafer, age 50, is Executive Vice President, a Director, General
Counsel, and a member of the Acquisition Committee of WNC & Associates, Inc.,
and a Director and Secretary of WNC Management, Inc. Mr. Shafer has been
involved in real estate investment and acquisition activities since 1984. Prior
to joining the Sponsor in 1990, he was practicing law with a specialty in real
estate and taxation. Mr. Shafer is a Director and President of the California
Council of Affordable Housing and a member of the State Bar of California. Mr.
Shafer graduated from the University of California at Santa Barbara in 1978 with
a Bachelor of Arts degree, from the New England School of Law in 1983 with a
Juris Doctor degree (cum laude) and from the University of San Diego in 1986
with a Master of Law degree in Taxation.
19
Thomas J. Riha, age 47, became Chief Financial Officer effective January 2001.
Prior to his appointment as Chief Financial Officer he was Vice President -
Asset Management and a member of the Acquisition Committee of WNC & Associates,
Inc. and a Director and Chief Executive Officer of WNC Management, Inc. Mr. Riha
has been involved in acquisition and investment activities with respect to real
estate since 1979. Prior to joining the Sponsor in 1994, Mr. Riha was employed
by Trust Realty Advisor, a real estate acquisition and management company, last
serving as Vice President - Operations. Mr. Riha graduated from the California
State University, Fullerton in 1977 with a Bachelor of Arts degree (cum laude)
in Business Administration with a concentration in Accounting and is a Certified
Public Accountant and a member of the American Institute of Certified Public
Accountants.
Sy P. Garban, age 56, is Vice President - National Sales of WNC & Associates,
Inc. and has been employed by the Sponsor since 1989. Mr. Garban has been
involved in real estate investment activities since 1978. Prior to joining the
Sponsor he served as Executive Vice President of MRW, Inc., a real estate
development and management firm. Mr. Garban is a member of the International
Association of Financial Planners. He graduated from Michigan State University
in 1967 with a Bachelor of Science degree in Business Administration.
Michael J. Gaber, age 36, is Vice President - Acquisitions and a member of the
Acquisitions Committee of WNC & Associates, Inc. Mr. Gaber has been involved in
real estate acquisition, valuation and investment activities since 1989 and has
been employed with WNC since 1997. Prior to joining WNC & Associates, Inc., he
was involved in the valuation and classification of major assets, restructuring
of debt and analysis of real estate taxes with the H.F. Ahmanson company, parent
to Home Savings of America. Mr. Gaber graduated from the California State
University, Fullerton in 1991 with a Bachelor of Science degree in Business
Administration - Finance.
David Turek, age 47, is Vice President - Originations of WNC & Associates, Inc.
He has been involved with real estate investment and finance activities since
1976 and has been employed by WNC & Associates, Inc. since 1996. From 1995 to
1996, Mr. Turek served as a consultant for a national Tax Credit sponsor where
he was responsible for on-site feasibility studies and due diligence analyses of
Tax Credit properties. From 1990 to 1995, he was involved in the development of
conventional and tax credit multi-family housing. He is a Director with the
Texas Council for Affordable Rural Housing and graduated from Southern Methodist
University in 1976 with a Bachelor of Business Administration degree.
Kay L. Cooper, age 65, is a Director of WNC & Associates, Inc. Mrs. Cooper was
the founder and sole proprietor of Agate 108, a manufacturer and retailer of
home accessory products, from 1975 until 1998. She is the wife of Wilfred N.
Cooper, Sr. and the mother of Wilfred N. Cooper, Jr. and the sister of John B.
Lester, Jr. Ms. Cooper graduated from the University of Southern California in
1958 with a Bachelor of Science degree.
Item 11. Executive Compensation
The Partnership has no officers, employees, or directors. However, under the
terms of the Partnership Agreement the Partnership is obligated to the General
Partner or its affiliates for the following fees:
(a) Organization and Offering Expenses. The Partnership accrued or paid the
General Partner or its affiliates as of March 31, 2002 approximately
$251,000 for selling commissions and other fees and expenses of the
Partnership's offering of Units. Of the total accrued or paid,
approximately $135,000 as of March 31, 2002 was paid or to be paid to
unaffiliated persons participating in the Partnership's offering.
(b) Acquisition Fees. Acquisition fees in an amount equal to 7.0% of the
gross proceeds of the Partnership's Offering ("Gross Proceeds"). As of
March 31, 2002 the aggregate amount of acquisition fees paid or accrued
was approximately $135,000.
(c) Acquisition Expense. The Partnership reimbursed the General Partner for
acquisition expenses in an amount equal to 2% of the Gross Proceeds,
pursuant to the terms of the partnership agreement. As of March 31, 2002,
the aggregate amount of acquisition fees paid or accrued was
approximately $39,000.
(d) Annual Asset Management Fee. An annual asset management fee in an amount
equal to 0.2% of the Invested Assets of the Partnership. "Invested
Assets" is defined as the sum of the Partnership's Investment in Local
Limited Partnerships and the Partnership's allocable share of the amount
of the mortgage loans and other debts related to the Housing Complexes
owned by such Local Limited Partnerships. There were no fees incurred for
the period August 3, 2001 (date of operations commenced) through March
31, 2002.
20
(e) Operating Expenses. The Partnership reimbursed the General Partner or its
affiliates for operating expenses of approximately $12,500 for the period
August 3, 2001 (date operations commenced) through March 31, 2002,
expended by such persons on behalf of the Partnership.
(f) Subordinated Disposition Fee. A subordinated disposition fee in an amount
equal to 1% of the sale price received in connection with the sale or
disposition of an Apartment Complex or Local Limited Partnership
Interest. Subordinated disposition fees will be subordinated to the prior
return of the Limited Partners' capital contributions and payment of the
Return on Investment to the Limited Partners. "Return on Investment"
means an annual, cumulative but not compounded, "return" to the Limited
Partners (including Low Income Housing Credits) as a class on their
adjusted capital contributions commencing for each Limited Partner on the
last day of the calendar quarter during which the Limited Partner's
capital contribution is received by the Partnership, calculated at the
following rates: (i) 11% through December 31, 2010, and (ii) 6% for the
balance of the Partnerships term. No disposition fees have been paid.
(g) Interest in Partnership. The General Partner will receive 0.1% of the Low
Income Housing Credits. No Low Income Housing Credits were allocated for
the period ended December 31, 2000. The General Partners are also
entitled to receive 0.1% of cash distributions. There were no
distributions of cash to the General Partner during the period August 3,
2001 (date operations commenced) through March 31, 2002.
Item 12. Security Ownership of Certain Beneficial Owners and Management
(a) Security Ownership of Certain Beneficial Owners
-----------------------------------------------
No person is known to own beneficially in excess of 5% of the outstanding
Units.
(b) Security Ownership of Management
---------------------------------
Neither the General Partner, its affiliates, nor any of the officers or
directors of the General Partner or its affiliates own directly or
beneficially any Units in the Partnership.
(c) Changes in Control
The management and control of the General Partner may be changed at any
time in accordance with its organizational documents, without the consent
or approval of the Limited Partners. In addition, the Partnership
Agreement provides for the admission of one or more additional and
successor General Partners in certain circumstances.
First, with the consent of any other General Partners and a
majority-in-interest of the Limited Partners, any General Partner may
designate one or more persons to be successor or additional General
Partners. In addition, any General Partner may, without the consent of
any other General Partner or the Limited Partners, (i) substitute in its
stead as General Partner any entity which has, by merger, consolidation
or otherwise, acquired substantially all of its assets, stock or other
evidence of equity interest and continued its business, or (ii) cause to
be admitted to the Partnership an additional General Partner or Partners
if it deems such admission to be necessary or desirable so that the
Partnership will be classified a partnership for Federal income tax
purposes. Finally, a majority-in-interest of the Limited Partners may at
any time remove the General Partner of the Partnership and elect a
successor General Partner.
Item 13. Certain Relationships and Related Transactions
The General Partner manages all of the Partnership's affairs. The transactions
with the General Partner are primarily in the form of fees paid by the
Partnership for services rendered to the Partnership and the General Partner's
interest in the Partnership, as discussed in Item 11 and in the notes to the
Partnership's financial statements.
21
PART IV.
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a)(1) Financial statements included in Part II hereof:
-----------------------------------------------
Report of Independent Certified Public Accountants
Independent Auditors' Report
Balance Sheet, March 31, 2002
Statement of Operations for the period August 3, 2001 (Date Operations
Commenced) through March 31, 2002
Statement of Partners' Equity for the period August 3, 2001 (Date
Operations Commenced) through March 31, 2002
Statement of Cash Flows for the period August 3, 2001 (Date Operations
Commenced) through March 31, 2002
Notes to Financial Statements
(a)(2) Financial statement schedules:
------------------------------
NONE.
(b) Reports on Form 8-K.
-------------------
A Form 8-K was filed on April 23, 2002 reporting the acquisitions of
Local Limited Partnership Interests under Item 2. No financial
statements were included.
(c) Exhibits.
--------
3.1 First Amended and Restated Agreement of Limited Partnership of WNC
Housing Tax Credit Fund VI, L.P., Series 9 dated as of July 17, 2001
filed as Exhibit 3.1 to Post-Effective Amendment No. 1 to the
Registration Statement on Form S-11 filed on August 18, 2001 is hereby
incorporated herein by reference as Exhibit 3.1.
10.1 First amendment to the Amended and Restated Limited Partnership
Agreement of Parker Estates Limited Partnership filed as exhibit 10.1
to the current report on Form 8-K dated April 23, 2002 is herein
incorporated by reference as Exhibit 10.1.
10.2 First amendment to the Amended and Restated Operating Agreement of
Byhalia Estates, L.P. filed as Exhibit 10.2 to the current report on
Form 8-K dated April 23, 2002 is herein incorporated by reference as
Exhibit 10.2.
10.3 Amended and Restated agreement of Limited Partnership of Preservation
Partners III L.P. filed as exhibit 10.3 to the current report on Form
8-K dated April 23, 2002 is herein incorporated by reference as exhibit
10.3.
22
Pursuant to the requirements of Section 13 or 15(d) 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.
WNC HOUSING TAX CREDIT FUND VI, L.P., Series 9
WNC HOUSING TAX CREDIT FUND VI, L.P., Series 10
By: WNC & Associates, Inc. General Partner
By: /s/ Wilfred N. Cooper, Jr.
-------------------------
Wilfred N. Cooper, Jr. President - Chief Operating Officer of
WNC & Associates, Inc.
Date: July 23, 2002
By: /s/ Thomas J. Riha
--------------------
Thomas J. Riha Vice-President - Chief Financial Officer of
WNC & Associates, Inc.
Date: July 23, 2002
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
By /s/ Wilfred N. Cooper, Sr.
--------------------------
Wilfred N. Cooper, Sr. Chairman of the Board of WNC & Associates, Inc.
Date: July 23, 2002
By: /s/ David N. Shafer
-------------------
David N Shafer Director of WNC & Associates, Inc.
Date: July 23, 2002