Common use of Independent Auditor’s Report Clause in Contracts

Independent Auditor’s Report. 93 REDWOOD MORTGAGE INVESTORS VIII (A California Limited Partnership) FINANCIAL STATEMENTS DECEMBER 31, 1995 (With Auditors Report Thereon) PXXXXX & CROPPER CERTIFIED PUBLIC ACCOUNTANTS 3000 Xxxxx Xxxxxx Xxxx., Xxxxx #000 Xxxxxxxxx XX 00000 (000) 000-0000 Fax (500-000-0000) INDEPENDENT AUDITORS REPORT THE PARTNERS REDWOOD MORTGAGE INVESTORS VIII We have audited the financial statements and related schedules of REDWOOD MORTGAGE INVESTORS VIII (A California Limited Partnership) listed in Item 8 on Form 10-K including balance sheets as of December 31, 1995, and 1994, and the statements of income, changes in partners capital and cash flows for the period from inception, April 14, 1993, to December 31, 1993, and the two years ended December 31, 1995, and 1994. These financial statements are the responsibility of the Partnerships management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits 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 audits provided 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 REDWOOD MORTGAGE INVESTORS VIII as of December 31, 1995, and 1994, and the results of its operations and cash flows for the two years and period then ended in conformity with generally accepted accounting principles. Further, it is our opinion that the schedules referred to above present fairly the information set forth therein in compliance with the applicable accounting regulations of the Securities and Exchange Commission. PXXXXX & CXXXXXX Lafayette, California February 28, 1996 REDWOOD MORTGAGE INVESTORS VIII (A California Limited Partnership) BALANCE SHEETS DECEMBER 31, 1995 AND 1994 ASSETS 1995 1994 -------------------- -------------------- Cash $ 380,318 $ 397,176 -------------------- -------------------- Accounts receivable: Mortgage loans, secured by deeds of trust 12,047,252 6,484,707 Accrued Interest on mortgage loans 113,301 75,345 Advances on mortgage loans 8,431 1,053 Accounts receivable, unsecured 71,316 0 -------------------- ------------------ 12,240,300 6,561,105 Less allowance for doubtful accounts 39,152 13,120 -------------------- -------------------- 12,201,148 6,547,985 -------------------- -------------------- Formation loan due from Redwood Home Loan Co. 775,229 525,256 Organization costs, net of accumulated amortization of $5,625 and $3,125 respectively 6,875 9,375 Due from related companies 3,049 0 Prepaid expense-deferred loan fee 17,718 0 -------------------- -------------------- $ 13,384,337 $ 7,479,792 ==================== ==================== LIABILITIES AND PARTNERS CAPITAL Liabilities: Accounts payable and accrued expenses $ 4,010 $ 0 Notes payable - Pacific Bank 1,910,000 0 Subscriptions to partnership in applicant status 0 189,300 -------------------- -------------------- 1,914,010 189,300 Partners Capital 11,470,327 7,290,492 -------------------- -------------------- $ 13,384,337 $ 7,479,792 ==================== ==================== See accompanying notes to financial statements. REDWOOD MORTGAGE INVESTORS VIII (A California Limited Partnership) STATEMENT OF INCOME FOR THE PERIOD FROM INCEPTION, APRIL 14, 1993, THROUGH DECEMBER 31, 1993 AND THE TWO YEARS ENDED DECEMBER 31, 1995 1995 1994 1993 --------------------- ---------------------- -------------------- Revenues: Interest on mortgage loans $ 945,573 $ 450,983 $ 107,129 Interest on bank deposits 13,120 15,739 5,690 Late charges 3,876 1,704 606 Miscellaneous 2,211 120 51 --------------------- ---------------------- -------------------- --------------------- ---------------------- -------------------- 964,780 468,546 113,476 --------------------- ---------------------- -------------------- Expenses: Interest on note payable 25,889 0 0 Amortization of loan origination fees 2,531 0 0 Provision for doubtful accounts 26,032 13,120 0 Asset management fee - General Partners 11,587 5,906 192 Amortization of organization costs 2,500 2,500 625 Clerical costs through Redwood Home Loan Co. 22,769 10,664 2,692 Professional fees 16,178 10,244 200 Printing, supplies and postage 92 917 34 Other 1,461 883 77 --------------------- ---------------------- -------------------- 109,039 44,234 3,820 --------------------- ---------------------- -------------------- Income before interest credited to partners in applicant status 855,741 424,312 109,656 Interest credited to partners in applicant status 18,908 14,443 4,641 --------------------- ---------------------- -------------------- Net Income $836,833 $ 409,869 $105,015 ===================== ====================== ==================== Net income: To General Partners(1%) $8,368 $ 4,099 $1,050 To Limited Partners (99%) 828,465 405,770 103,965 --------------------- ---------------------- -------------------- Total- net income $ 836,833 $409,869 $105,015 ===================== ====================== ==================== Net income per $1,000 invested by Limited Partners for entire period after admission to partnership: -Where income is reinvested and compounded $83 $81 $85 ===================== ====================== ==================== -Where partner receives income in monthly distributions $80 $79 $83 ===================== ====================== ==================== See accompanying notes to financial statements. REDWOOD MORTGAGE INVESTORS VIII (A California Limited Partnership) STATEMENT OF CHANGES IN PARTNERS CAPITAL FOR THE PERIOD FROM INCEPTION, APRIL 14, 1993, THROUGH DECEMBER 31, 1993 AND THE TWO YEARS ENDED DECEMBER 31, 1995 PARTNERS CAPITAL ------------------------------------------------------------------------ PARTNERS IN UNALLOCATED APPLICANT GENERAL LIMITED SYNDICATION STATUS PARTNERS PARTNERS COSTS TOTAL ------------------ --------------- ---------------- ----------------- ------------ Contributions on application $ 2,890,530 0 0 0 0 Upon admission to partnership: Interest withdrawn (1,956) 0 0 0 0 Transfers to Partners capital (2,764,443 2,887 2,761,556 0 2,764,443 Net income 0 1,050 103,965 0 105,015 Syndication costs incurred 0 0 0 ( 199,564) ( 199,564) Allocation of syndication costs 0 ( 92) ( 9,130) 9,222 0 Partners withdrawals 0 ( 958) ( 46,856) 0 ( 47,814) -------------- --------------- --------------- --------------- -------------- Balances at December 31, 1993 128,772 2,887 2,809,535 ( 190,342) 2,622,080 Upon admission to partnership: Interest withdrawn ( 0 0 0 0 5,774) Transfers to Partners capital (4,508,824) 4,542 4,504,282 0 4,508,824 Net income 0 4,099 405,770 0 409,869 Syndication costs incurred 0 0 0 ( 81,023) ( 81,023) Allocation of syndication costs 0 ( 347) ( 34,349) 34,696 0 Partners withdrawals 0 ( 3,444) ( 165,814) 0 ( 169,258) -------------- --------------- --------------- --------------- -------------- Balances at December 31, 1994 189,300 7,737 7,519,424 ( 236,669) 7,290,492 Contributions on application 3,634,264 0 0 0 0 Upon admission to Partnership: Interest withdrawn ( 7,673) 0 0 0 0 Transfers to Partners capital (3,834,799) 3,588 3,831,211 0 3,834,799 Net income 0 8,368 828,465 0 836,833 Syndication costs incurred 0 0 0 ( 175,334) ( 175,334) Allocation of syndication costs 0 ( 859) ( 85,045) 85,904 0 Partners withdrawals 0 ( 7,509) ( 308,554) 0 ( 316,063) Early withdrawal penalties 0 0 ( 564) 164 ( 400) -------------- --------------- --------------- --------------- -------------- Balances at December 31, 1995 $ 0 11,325 11,784,937 ( 325,935) 11,470,327 ============== =============== =============== =============== ============== See accompanying notes to Financial Statements REDWOOD MORTGAGE INVESTORS VIII (A California Limited Partnership) STATEMENT OF CASH FLOWS FOR THE PERIOD FROM INCEPTION, APRIL 14, 1993, THROUGH DECEMBER 31, 1993 AND THE TWO YEARS ENDED DECEMBER 31, 1995 1995 1994 1993 -------------------- --------------------- -------------------- Cash flows from operating activities: Net income $ 836,833 $ 409,869 $ 105,015 Adjustments to reconcile net income to net cash provided by operating activities: Amortization of organization costs 2,500 2,500 625 Increase in allowance for doubtful accounts 26,032 13,120 0 Increase in accounts payable 4,010 0 0 (Increase) in accrued interest and advances ( 45,334 ) ( 63,008 ) ( 13,390) (Increase) decrease in amount due from related companies ( 3,049 ) 2,493 ( 2,493) (Increase) in deferred loan fee ( 17,718 ) 0 0 Organization costs incurred 0 0 ( 12,500) -------------------- -------------------- --------------------- Net cash provided by operating activities 803,274 364,974 77,257 -------------------- --------------------- -------------------- Cash flows from investing activities: Net (increase) in: Mortgage loans ( 5,562,545 ) ( 4,148,033 ) ( 2,336,674) Formation loan ( 249,973 ) ( 319,302 ) ( 205,954) Accounts receivable, unsecured ( 71,316 ) 0 0 -------------------- --------------------- -------------------- Net cash used in investing activities ( 5,883,834 ) ( 4,467,335 ) ( 2,542,628) -------------------- --------------------- -------------------- Cash flows from financing activities: Increase in notes payable bank 1,910,000 0 0 Contributions by partner applicants 3,634,264 4,560,683 2,890,530 Interest credited to partners in applicant status 18,908 14,443 4,641 Interest withdrawn by partners in applicant status ( 7,673 ) ( 5,774 ) ( 1,956) Partners withdrawals ( 316,063 ) ( 169,258 ) ( 47,814) Early withdrawal penalties, net ( 400 ) 0 0 Syndication costs incurred ( 175,334 ) ( 81,023 ) ( 199,564) ------------ --------------------- -------------------- Net cash provided by financing activities 5,063,702 4,319,071 2,645,837 -------------------- --------------------- -------------------- Net increase in cash and cash equivalents ( 16,858 ) 216,710 180,466 Cash - beginning of period 397,176 180,466 0 -------------------- --------------------- -------------------- Cash - end of period $ 380,318 $ 397,176 $ 180,466 ==================== ===================== ==================== See accompanying notes to financial statements. REDWOOD MORTGAGE INVESTORS VIII (A California Limited Partnership) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1995 NOTE 1 - ORGANIZATION AND GENERAL Redwood Mortgage Investors VIII, (the Partnership) is a California Limited Partnership, of which the General Partners are D. Rxxxxxx Xxxxxxx, Mxxxxxx X. Xxxxxxx and Gymno Corporation, a California corporation owned and operated by the individual General Partners. The partnership was organized to engage in business as a mortgage lender for the primary purpose of making loans secured by Deeds of Trust on California real estate. Partnership loans are being arranged and serviced by Redwood Home Loan Co., dba Redwood Mortgage, an affiliate of the General Partners. At December 31, 1995, the Partnership was in the offering stage, wherein contributed capital totaled $11,074,460 in limited partner contributions of an approved $15,000,000 issue, in units of $100 each. All applicants had been admitted to the partnership at December 31, 1995. A minimum of 2,500 units ($250,000) and a maximum of 150,000 units ($15,000,000) were offered through qualified broker-dealers. As mortgage loans are identified, partners are transferred from applicant status to admitted partners participating in mortgage loan operations. Each months income is distributed to partners based upon their proportionate share of partners capital. Some partners have elected to withdraw income on a monthly, quarterly or annual basis.

Independent Auditor’s Report. 93 REDWOOD MORTGAGE INVESTORS VIII (A California Limited Partnership) FINANCIAL STATEMENTS DECEMBER 31, 1995 (With Auditors Report Thereon) PXXXXX & CROPPER CERTIFIED PUBLIC ACCOUNTANTS 3000 Xxxxx Xxxxxx Xxxx., Xxxxx #000 Xxxxxxxxx XX 00000 (000) 000-0000 Fax (500-000-0000) INDEPENDENT AUDITORS REPORT THE PARTNERS REDWOOD MORTGAGE INVESTORS VIII The Board of Directors and Shareholders USLIFE Corporation: We have audited the financial statements of the USLIFE Corporation Employee Savings and related schedules of REDWOOD MORTGAGE INVESTORS VIII (A California Limited Partnership) Investment Plan as listed in Item 8 on Form 10-K including balance sheets as of December 31, 1995, and 1994, and the statements of income, changes in partners capital and cash flows for the period from inception, April 14, 1993, to December 31, 1993, and the two years ended December 31, 1995, and 1994accompanying index. These financial statements are the responsibility of the Partnerships Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits 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 audits provided provide 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 REDWOOD MORTGAGE INVESTORS VIII the USLIFE Corporation Employee Savings and Investment Plan as of December 31, 1996 and 1995, and 1994the income and changes in its plan equity for each of the years in the three-year period ended December 31, and the results of its operations and cash flows for the two years and period then ended 1996, in conformity with generally accepted accounting principles. Further, it Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The Fund Information included in Notes 8 and 9 is our opinion that presented for purposes of additional analysis rather than to present the schedules referred allocation of plan assets and liabilities to above present fairly the information set forth therein in compliance with the applicable accounting regulations investment programs as of the Securities and Exchange Commission. PXXXXX & CXXXXXX Lafayette, California February 28, 1996 REDWOOD MORTGAGE INVESTORS VIII (A California Limited Partnership) BALANCE SHEETS DECEMBER 31, 1995 AND 1994 ASSETS 1995 1994 -------------------- -------------------- Cash $ 380,318 $ 397,176 -------------------- -------------------- Accounts receivable: Mortgage loans, secured by deeds of trust 12,047,252 6,484,707 Accrued Interest on mortgage loans 113,301 75,345 Advances on mortgage loans 8,431 1,053 Accounts receivable, unsecured 71,316 0 -------------------- ------------------ 12,240,300 6,561,105 Less allowance for doubtful accounts 39,152 13,120 -------------------- -------------------- 12,201,148 6,547,985 -------------------- -------------------- Formation loan due from Redwood Home Loan Co. 775,229 525,256 Organization costs, net of accumulated amortization of $5,625 and $3,125 respectively 6,875 9,375 Due from related companies 3,049 0 Prepaid expense-deferred loan fee 17,718 0 -------------------- -------------------- $ 13,384,337 $ 7,479,792 ==================== ==================== LIABILITIES AND PARTNERS CAPITAL Liabilities: Accounts payable and accrued expenses $ 4,010 $ 0 Notes payable - Pacific Bank 1,910,000 0 Subscriptions to partnership in applicant status 0 189,300 -------------------- -------------------- 1,914,010 189,300 Partners Capital 11,470,327 7,290,492 -------------------- -------------------- $ 13,384,337 $ 7,479,792 ==================== ==================== See accompanying notes to financial statements. REDWOOD MORTGAGE INVESTORS VIII (A California Limited Partnership) STATEMENT OF INCOME FOR THE PERIOD FROM INCEPTION, APRIL 14, 1993, THROUGH DECEMBER 31, 1993 AND THE TWO YEARS ENDED DECEMBER 31, 1995 1995 1994 1993 --------------------- ---------------------- -------------------- Revenues: Interest on mortgage loans $ 945,573 $ 450,983 $ 107,129 Interest on bank deposits 13,120 15,739 5,690 Late charges 3,876 1,704 606 Miscellaneous 2,211 120 51 --------------------- ---------------------- -------------------- --------------------- ---------------------- -------------------- 964,780 468,546 113,476 --------------------- ---------------------- -------------------- Expenses: Interest on note payable 25,889 0 0 Amortization of loan origination fees 2,531 0 0 Provision for doubtful accounts 26,032 13,120 0 Asset management fee - General Partners 11,587 5,906 192 Amortization of organization costs 2,500 2,500 625 Clerical costs through Redwood Home Loan Co. 22,769 10,664 2,692 Professional fees 16,178 10,244 200 Printing, supplies and postage 92 917 34 Other 1,461 883 77 --------------------- ---------------------- -------------------- 109,039 44,234 3,820 --------------------- ---------------------- -------------------- Income before interest credited to partners in applicant status 855,741 424,312 109,656 Interest credited to partners in applicant status 18,908 14,443 4,641 --------------------- ---------------------- -------------------- Net Income $836,833 $ 409,869 $105,015 ===================== ====================== ==================== Net income: To General Partners(1%) $8,368 $ 4,099 $1,050 To Limited Partners (99%) 828,465 405,770 103,965 --------------------- ---------------------- -------------------- Total- net income $ 836,833 $409,869 $105,015 ===================== ====================== ==================== Net income per $1,000 invested by Limited Partners for entire period after admission to partnership: -Where income is reinvested and compounded $83 $81 $85 ===================== ====================== ==================== -Where partner receives income in monthly distributions $80 $79 $83 ===================== ====================== ==================== See accompanying notes to financial statements. REDWOOD MORTGAGE INVESTORS VIII (A California Limited Partnership) STATEMENT OF CHANGES IN PARTNERS CAPITAL FOR THE PERIOD FROM INCEPTION, APRIL 14, 1993, THROUGH DECEMBER 31, 1993 AND THE TWO YEARS ENDED DECEMBER 31, 1995 PARTNERS CAPITAL ------------------------------------------------------------------------ PARTNERS IN UNALLOCATED APPLICANT GENERAL LIMITED SYNDICATION STATUS PARTNERS PARTNERS COSTS TOTAL ------------------ --------------- ---------------- ----------------- ------------ Contributions on application $ 2,890,530 0 0 0 0 Upon admission to partnership: Interest withdrawn (1,956) 0 0 0 0 Transfers to Partners capital (2,764,443 2,887 2,761,556 0 2,764,443 Net income 0 1,050 103,965 0 105,015 Syndication costs incurred 0 0 0 ( 199,564) ( 199,564) Allocation of syndication costs 0 ( 92) ( 9,130) 9,222 0 Partners withdrawals 0 ( 958) ( 46,856) 0 ( 47,814) -------------- --------------- --------------- --------------- -------------- Balances at December 31, 1993 128,772 2,887 2,809,535 ( 190,342) 2,622,080 Upon admission 1996 and 1995 and the allocation of plan income and changes in plan equity to partnership: Interest withdrawn ( 0 0 0 0 5,774) Transfers to Partners capital (4,508,824) 4,542 4,504,282 0 4,508,824 Net income 0 4,099 405,770 0 409,869 Syndication costs incurred 0 0 0 ( 81,023) ( 81,023) Allocation of syndication costs 0 ( 347) ( 34,349) 34,696 0 Partners withdrawals 0 ( 3,444) ( 165,814) 0 ( 169,258) -------------- --------------- --------------- --------------- -------------- Balances at investment programs for the three years ended December 31, 1994 189,300 7,737 7,519,424 ( 236,669) 7,290,492 Contributions on application 3,634,264 0 0 0 0 Upon admission 1996 of each fund. The Fund Information has been subjected to Partnership: Interest withdrawn ( 7,673) 0 0 0 0 Transfers the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to Partners capital (3,834,799) 3,588 3,831,211 0 3,834,799 Net income 0 8,368 828,465 0 836,833 Syndication costs incurred 0 0 0 ( 175,334) ( 175,334) Allocation the basic financial statements taken as a whole. /s/ KPMG Peat Marwick LLP KPMG Peat Marwick LLP New York, New York May 2, 1997 USLIFE Corporation Employee Savings and Investment Plan Statements of syndication costs 0 ( 859) ( 85,045) 85,904 0 Partners withdrawals 0 ( 7,509) ( 308,554) 0 ( 316,063) Early withdrawal penalties 0 0 ( 564) 164 ( 400) -------------- --------------- --------------- --------------- -------------- Balances at Financial Position December 31, 1996 and 1995 $ 0 11,325 11,784,937 ( 325,935(Amounts in Thousands) 11,470,327 ============== =============== =============== =============== ============== See accompanying notes to Financial Statements REDWOOD MORTGAGE INVESTORS VIII (A California Limited Partnership) STATEMENT OF CASH FLOWS FOR THE PERIOD FROM INCEPTIONDecember 31 _______________________ Assets 1996 1995 ______ ____ ____ Investments, APRIL 14, 1993, THROUGH DECEMBER 31, 1993 AND THE TWO YEARS ENDED DECEMBER 31, 1995 1995 1994 1993 -------------------- --------------------- -------------------- Cash flows from operating activitiesat fair value: Net income $ 836,833 $ 409,869 $ 105,015 Adjustments to reconcile net income to net cash provided by operating activities: Amortization of organization costs 2,500 2,500 625 Increase in allowance for doubtful accounts 26,032 13,120 0 Increase in accounts payable 4,010 0 0 (Increase) in accrued interest and advances ( 45,334 ) ( 63,008 ) ( 13,390) (Increase) decrease in amount due from related companies ( 3,049 ) 2,493 ( 2,493) (Increase) in deferred loan fee ( 17,718 ) 0 0 Organization costs incurred 0 0 ( 12,500) -------------------- -------------------- --------------------- Net cash provided by operating activities 803,274 364,974 77,257 -------------------- --------------------- -------------------- Cash flows from investing activities: Net (increase) Participations in: Mortgage loans ( 5,562,545 ) ( 4,148,033 ) ( 2,336,674) Formation loan ( 249,973 ) ( 319,302 ) ( 205,954) Accounts USLIFE Corporation Common Stock Fund........... $ 29,683 $ 26,044 Txxxxxxxx Foreign Fund......................... 1,042 333 IDS Growth Fund................................ 5,162 1,679 American Express Trust Research 150............ 14,132 11,747 IDS Mutual Fund................................ 1,199 555 IDS Selective Fund............................. 1,111 486 American Express Trust Income Fund II.......... 11,757 12,181 Loans to participants........................... 3,148 2,298 _________ _________ Total investments............................. 67,234 55,323 _________ _________ Investment income accrued........................... - 87 Accrued contributions receivable, unsecured ( 71,316 ) 0 0 -------------------- --------------------- -------------------- Net cash used in investing activities ( 5,883,834 ) ( 4,467,335 ) ( 2,542,628) -------------------- --------------------- -------------------- Cash flows from financing activities: Increase in notes payable bank 1,910,000 0 0 Contributions by partner applicants 3,634,264 4,560,683 2,890,530 Interest credited to partners in applicant status 18,908 14,443 4,641 Interest withdrawn by partners in applicant status ( 7,673 ) ( 5,774 ) ( 1,956) Partners withdrawals ( 316,063 ) ( 169,258 ) ( 47,814) Early withdrawal penalties, net ( 400 ) 0 0 Syndication costs incurred ( 175,334 ) ( 81,023 ) ( 199,564) ------------ --------------------- -------------------- Net cash provided by financing activities 5,063,702 4,319,071 2,645,837 -------------------- --------------------- -------------------- Net increase in cash and cash equivalents ( 16,858 ) 216,710 180,466 Cash Participant..................................... 129 - beginning of period 397,176 180,466 0 -------------------- --------------------- -------------------- Cash Employer........................................ 60 - end of period $ 380,318 $ 397,176 $ 180,466 ==================== ===================== ==================== See accompanying notes to financial statements. REDWOOD MORTGAGE INVESTORS VIII (A California Limited Partnership) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1995 NOTE 1 - ORGANIZATION AND GENERAL Redwood Mortgage Investors VIII, (the Partnership) is a California Limited Partnership, of which the General Partners are D. Rxxxxxx Xxxxxxx, Mxxxxxx X. Xxxxxxx and Gymno Corporation, a California corporation owned and operated by the individual General Partners. The partnership was organized to engage in business as a mortgage lender for the primary purpose of making loans secured by Deeds of Trust on California real estate. Partnership loans are being arranged and serviced by Redwood Home Loan Co., dba Redwood Mortgage, an affiliate of the General Partners. At December 31, 1995, the Partnership was in the offering stage, wherein contributed capital totaled $11,074,460 in limited partner contributions of an approved $15,000,000 issue, in units of $100 each. All applicants had been admitted to the partnership at December 31, 1995. A minimum of 2,500 units ($250,000) and a maximum of 150,000 units ($15,000,000) were offered through qualified broker-dealers. As mortgage loans are identified, partners are transferred from applicant status to admitted partners participating in mortgage loan operations. Each months income is distributed to partners based upon their proportionate share of partners capital. Some partners have elected to withdraw income on a monthly, quarterly or annual basis._________ _________