10QSB 1 tcpq205.txt TCP 10QSB Q2 05 August 15, 2005 Securities and Exchange Commission 450 Fifth Street, NW Washington, DC 20549 Re: Boston Financial Tax Credit Fund Plus, A Limited Partnership Report on Form 10-QSB for the Quarter Ended June 30, 2005 File Number 0-22104 Dear Sir/Madam: Pursuant to the requirements of Section 15(d) of the Securities Exchange Act of 1934, filed herewith is one copy of subject report. Very truly yours, /s/Stephen Guilmette Stephen Guilmette Assistant Controller TCP-10Q1.DOC UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (Mark One) [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2005 --------------------------- 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 0-22104 Boston Financial Tax Credit Fund Plus, A Limited Partnership ---------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Massachusetts 04-3105699 -------------------------------------- --------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 101 Arch Street, Boston, Massachusetts 02110-1106 ---------------------------------------------- ---------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (617) 439-3911 ----------------------- 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 . BOSTON FINANCIAL TAX CREDIT FUND PLUS, A Limited Partnership TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION Page No. ------------------------------ -------- Item 1. Financial Statements Balance Sheet (Unaudited) - June 30, 2005 1 Statements of Operations (Unaudited) - For the Three Months Ended June 30, 2005 and 2004 2 Statement of Changes in Partners' Equity (Deficiency) (Unaudited) - For the Three Months Ended June 30, 2005 3 Statements of Cash Flows (Unaudited) - For the Three Months Ended June 30, 2005 and 2004 4 Notes to the Financial Statements (Unaudited) 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 Item 3. Controls and Procedures 13 PART II - OTHER INFORMATION Items 1-6 14 SIGNATURE 15 CERTIFICATIONS 16
BOSTON FINANCIAL TAX CREDIT FUND PLUS, A Limited Partnership BALANCE SHEET June 30, 2005 (Unaudited)
Assets Cash and cash equivalents $ 268,750 Marketable securities, at fair value 634 Investment securities, at fair value (Note 1) 199,334 Investments in Local Limited Partnerships (Note 2) 5,300,079 Other investments (Note 3) 2,511,469 Other assets 2,638 --------------- Total Assets $ 8,282,904 =============== Liabilities and Partners' Equity Due to affiliate $ 128,755 Accrued expenses 24,800 --------------- Total Liabilities 153,555 General, Initial and Investor Limited Partners' Equity 8,129,364 Net unrealized losses on marketable securities (15) --------------- Total Partners' Equity 8,129,349 --------------- Total Liabilities and Partners' Equity $ 8,282,904 ===============
The accompanying notes are an integral part of these financial statements. BOSTON FINANCIAL TAX CREDIT FUND PLUS, A Limited Partnership STATEMENTS OF OPERATIONS For the Three Months Ended June 30, 2005 and 2004 (Unaudited)
2005 2004 ---------------- --------- Revenue: Investment $ 3,082 $ 1,804 Accretion of Original Issue Discount (Note 3) 48,012 44,430 Other 4,907 5,592 ---------------- -------------- Total Revenue 56,001 51,826 ---------------- -------------- Expense: Asset management fees, affiliate 43,239 44,125 General and administrative (includes reimbursements to an affiliate in the amount of $41,390 and $81,261 in 2005 and 2004, respectively) 85,429 103,557 Amortization 2,805 3,794 ---------------- -------------- Total Expense 131,473 151,476 ---------------- -------------- Loss before equity in losses of Local Limited Partnerships (75,472) (99,650) Equity in losses of Local Limited Partnerships (Note 2) (10,593) (93,136) ---------------- -------------- Net Loss $ (86,065) $ (192,786) ================ ============== Net Loss allocated: General Partners $ (1,341) $ (2,372) Class A Limited Partners (124,241) (219,814) Class B Limited Partners 39,517 29,400 ---------------- -------------- $ (86,065) $ (192,786) ================ ============== Net Income (Loss) per Limited Partner Unit Class A Unit (34,643 Units) $ (3.59) $ (6.35) ================ ============== Class B Unit (3,290 Units) $ 12.01 $ 8.94 ================ ==============
The accompanying notes are an integral part of these financial statements. BOSTON FINANCIAL TAX CREDIT FUND PLUS, A Limited Partnership STATEMENT OF CHANGES IN PARTNERS' EQUITY (DEFICIENCY) For the Three Months Ended June 30, 2005 (Unaudited)
Investor Investor Initial Limited Limited Net General Limited Partners, Partners, Unrealized Partners Partner Class A Class B Losses Totals ----------- ----------- -------------- ------------- ------------ ---------- Balance at March 31, 2005 $ (259,376) $ 5,000 $ 5,622,979 $ 2,846,826 $ (18) $ 8,215,411 ----------- ----------- -------------- -------------- ------------- -------------- Comprehensive Income (Loss): Change in net unrealized losses on marketable securities available for sale - - - - 3 3 Net Income (Loss) (1,341) - (124,241) 39,517 - (86,065) ----------- ----------- -------------- ------------- ------------ -------------- Comprehensive Income (Loss) (1,341) - (124,241) 39,517 3 (86,062) ----------- ----------- -------------- ------------- ------------ -------------- Balance at June 30, 2005 $ (260,717) $ 5,000 $ 5,498,738 $ 2,886,343 $ (15) $ 8,129,349 =========== =========== ============== ============= ============ =============
The accompanying notes are an integral part of these financial statements. BOSTON FINANCIAL TAX CREDIT FUND PLUS, A Limited Partnership STATEMENTS OF CASH FLOWS For the Three Months Ended June 30, 2005 and 2004 (Unaudited)
2005 2004 ---------------- ---------- Net cash used for operating activities $ (37,156) $ (101,790) Net cash provided by (used for) investing activities (65,306) 166,772 ---------------- --------------- Net increase (decrease) in cash and cash equivalents (102,462) 64,982 Cash and cash equivalents, beginning 371,212 768,959 ---------------- --------------- Cash and cash equivalents, ending $ 268,750 $ 833,941 ================ ===============
The accompanying notes are an integral part of these financial statements. BOSTON FINANCIAL TAX CREDIT FUND PLUS, A Limited Partnership NOTES TO THE FINANCIAL STATEMENTS (Unaudited) The unaudited financial statements presented herein have been prepared in accordance with the instructions to Form 10-QSB and do not include all of the information and note disclosures required by accounting principles generally accepted in the United States of America. These statements should be read in conjunction with the financial statements and notes thereto included with the Fund's Form 10-KSB for the year ended March 31, 2005. In the opinion of the Managing General Partner, these financial statements include all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the Fund's financial position and results of operations. The results of operations for the periods may not be indicative of the results to be expected for the year. The Managing General Partner has elected to report results of the Local Limited Partnerships on a 90 day lag basis because the Local Limited Partnerships report their results on a calendar year basis. Accordingly, the financial information of the Local Limited Partnerships that is included in the accompanying financial statements is as of March 31, 2005 and 2004. 1. Investment Securities The Fund's investment securities may be classified as "Available for Sale" or "Held to Maturity". Those classified as "Available for Sale" are carried at fair value (as reported by the brokerage firms at which they are held), with unrealized gains or losses excluded from earnings and reported as a separate component of partner's equity. Those classified as "Held to Maturity", with maturity dates ranging from 2006 to 2007, are reported at amortized cost. For securities held-to-maturity, the fair value at June 30, 2005 is approximately $199,000. For securities classified as available for sale, the fair value at June 30, 2005 is $721. Proceeds from the maturities of available for sale securities were $135 during the quarter ended June 30, 2005, resulting in gross losses of $5. 2. Investments in Local Limited Partnerships The Fund has limited partnership interests in twenty-three Local Limited Partnerships which were organized for the purpose of owning and operating multi-family housing complexes, all of which are government-assisted. The Fund's ownership interest in each Local Limited Partnership is 99%, except for Livingston Arms, Phoenix Housing, Metropolitan, New Garden Place and Findley Place, where the Fund's ownership interests are 82%, 0.2%, 98.75%, 97.9% and 98%, respectively, and Primrose and Sycamore, where the Fund's ownership is 49.5%. The Fund may have negotiated or may negotiate options with the Local General Partners to purchase or sell the Fund's interests in the Local Limited Partnership at the end of the Compliance Period at nominal prices. In the event that Properties are sold to a third party, or upon dissolution of the Local Limited Partnerships, proceeds will be distributed according to the terms of each Local Limited Partnership agreement. The following is a summary of investments in Local Limited Partnerships at June 30, 2005:
Capital contributions and advances paid to Local Limited Partnerships and purchase price paid to withdrawing partners of Local Limited Partnerships $ 26,025,500 Cumulative equity in losses of Local Limited Partnerships (excluding cumulative unrecognized losses of $2,934,533) (15,000,587) Cumulative cash distributions received from Local Limited Partnerships (3,659,565) --------------- Investments in Local Limited Partnerships before adjustments 7,365,348 Excess investment costs over the underlying assets acquired: Acquisition fees and expenses 1,088,352 Cumulative amortization of acquisition fees and expenses (298,163) --------------- Investments in Local Limited Partnerships before impairment allowance 8,155,537 Impairment allowance on investments in Local Limited Partnerships (2,855,458) --------------- Investments in Local Limited Partnerships $ 5,300,079 ===============
BOSTON FINANCIAL TAX CREDIT FUND PLUS, A Limited Partnership NOTES TO THE FINANCIAL STATEMENTS (continued) (Unaudited) 2. Investments in Local Limited Partnerships (continued) The Fund has recorded an impairment allowance for its investments in certain Local Limited Partnerships in order to appropriately reflect the estimated net realizable value of these investments. The Fund's share of the net losses of the Local Limited Partnerships for the three months ended June 30, 2005 is $177,271. For the three months ended June 30, 2005, the Fund has not recognized $189,547 of equity in losses relating to certain Local Limited Partnerships in which cumulative equity in losses and cumulative distributions exceeded its total investment in these Local Limited Partnerships. The Fund recognized $22,869 of previously unrecognized losses in the three months ended June 30, 2005. 3. Other Investments Other investments consists of the aggregate cost of the Treasury STRIPS purchased by the Fund for the benefit of the Class B Limited Partners. The amortized cost at June 30, 2005 is composed of the following: Aggregate cost of Treasury STRIPS $ 918,397 Accumulated accretion of Original Issue Discount 1,593,072 ------------- $ 2,511,469 ============== The fair value of these securities at June 30, 2005 is $2,895,956. Maturity dates for the STRIPS range from February 15, 2007 to May 15, 2010 with a final maturity value of $3,290,000. 4. Significant Equity Investee Six Local Limited Partnerships invested in by the Fund represent more than 20% of the Fund's consolidated assets, equity or net losses. The following financial information represents the Local Limited Partnership's performance for the quarters ended March 31, 2005 and 2004:
Cottage Homestead of Aspen Limited Partnership 2005 2004 ------------------- ------------- ------------- Revenue $ 268,300 $ 265,000 Net Loss $ (19,600) $ (12,000) Meadow Wood Townhomes, A Limited Partnership 2005 2004 --------------------- ------------- ------------- Revenue $ 167,200 $ 163,000 Net Loss $ (22,200) $ (38,000) Hudson Square Apartments (A Limited Partnership) 2005 2004 ----------------------- ------------- ------------- Revenue $ 148,200 $ 144,000 Net Income $ 30,100 $ 17,000 Metropolitan Apartments Limited Partnership 2005 2004 ------------------- ------------- ------------- Revenue $ 158,600 $ 160,000 Net Loss $ (21,100) $ (6,000) Linden Square Limited Dividend Housing Association Limited Partnership 2005 2004 --------------------------------------- ------------- ------------- Revenue $ 188,100 $ 184,000 Net Income $ 20,200 $ 10,000 New Garden Associates, Limited Partnership 2005 2004 ------------------- ------------- ------------- Revenue $ 87,000 $ 88,000 Net Loss $ (28,800) $ (31,000)
BOSTON FINANCIAL TAX CREDIT FUND PLUS, A Limited Partnership MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Certain matters discussed herein constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Fund intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements and is including this statement for purposes of complying with these safe harbor provisions. Although the Fund believes the forward-looking statements are based on reasonable assumptions, the Fund can give no assurance that its expectations will be attained. Actual results and timing of certain events could differ materially from those projected in or contemplated by the forward-looking statements due to a number of factors, including, without limitation, general economic and real estate conditions and interest rates. Critical Accounting Policies The Fund's accounting policies include those that relate to its recognition of investments in Local Limited Partnerships using the equity method of accounting. The Fund's policy is as follows: The Fund accounts for its investments in Local Limited Partnerships using the equity method of accounting. Under the equity method, the investment is carried at cost, adjusted for the Fund's share of net income or loss and for cash distributions from the Local Limited Partnerships; equity in income or loss of the Local Limited Partnerships is included currently in the Fund's operations. Under the equity method, a Local Limited Partnership investment will not be carried below zero. To the extent that equity in losses are incurred when the Fund's carrying value of the respective Local Limited Partnership has been reduced to a zero balance, the losses will be suspended and offset against future income. Income from Local Limited Partnerships, where cumulative equity in losses plus cumulative distributions have exceeded the total investment in Local Limited Partnerships, will not be recorded until all of the related unrecorded losses have been offset. To the extent that a Local Limited Partnership with a carrying value of zero distributes cash to the Fund, that distribution is recorded as income on the books of the Fund and is included in "Other Revenue" in the accompanying financial statements. The Fund has implemented policies and practices for assessing potential impairment of its investments in Local Limited Partnerships. The investments are reviewed for impairment whenever events or changes in circumstances indicate that the Fund may not be able to recover its carrying value. If an other than temporary impairment in carrying value exists, a provision to reduce the asset to fair value will be recorded in the Fund's financial statements. In January 2003, the FASB issued Interpretation No. 46 ("Interpretation"), "Consolidation of Variable Interest Entities", which provides new criteria for determining whether or not consolidation accounting is required. The Interpretation, which was modified in December 2003 in order to address certain technical and implementation issues, requires the Fund to consider consolidation or provide additional disclosures of financial information for Local Limited Partnerships meeting the definition of a Variable Interest Entity ("VIE"). The Fund is required to apply the Interpretation to the Local Limited Partnerships meeting the definition of a VIE. This Interpretation requires consolidation by the Fund of the Local Limited Partnerships' assets and liabilities and results of operations if the Fund determined that the Local Limited Partnerships were VIEs and that the Fund was the "Primary Beneficiary". Minority interests may be recorded for the Local Limited Partnerships' ownership share attributable to other investors. Where consolidation of Local Limited Partnerships is not required, additional financial information disclosures of Local Limited Partnerships may be required. The Fund has assessed the Interpretation and concluded that it is not the Primary Beneficiary of any of the Local Limited Partnerships that meet the definition of a VIE. The Fund is involved with those VIEs as a non-controlling limited partner equity holder. The Fund is required to disclose its maximum exposure to economic and financial statement losses as a result of its involvement with the VIEs. The Fund's exposure to economic and financial statement losses from the VIEs is limited to its investment in the VIEs ($5,300,079 at June 30, 2005). The Fund may be subject to additional losses to the extent of any financial support that the Fund voluntarily provides in the future. BOSTON FINANCIAL TAX CREDIT FUND PLUS, A Limited Partnership MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) Liquidity and Capital Resources At June 30, 2005, the Fund had cash and cash equivalents of $268,750 as compared with $371,212 at March 31, 2005. The decrease is primarily attributable to purchases of marketable securities and cash used for operating activities, partially offset by cash distributions received from Local Limited Partnerships. The Managing General Partner initially designated 4% of the Adjusted Gross Proceeds (which generally means Gross Proceeds minus the amounts committed to the acquisition of Treasury STRIPS) as Reserves as defined in the Partnership Agreement. The Reserves were established to be used for working capital of the Fund and contingencies related to the ownership of Local Limited Partnership interests. The Managing General Partner may increase or decrease such Reserves from time to time, as it deems appropriate. At June 30, 2005, $468,718 of cash, cash equivalents, marketable securities and investment securities has been designated as Reserves. To date, professional fees relating to various Property issues totaling approximately $452,000 have been paid from Reserves. In the event a Local Limited Partnership encounters operating difficulties requiring additional funds, the Fund's management might deem it in its best interest to voluntarily provide such funds in order to protect its investment. As of June 30, 2005, the Fund has advanced approximately $261,000 to Local Limited Partnerships to fund operating deficits. The Managing General Partner believes that the investment income earned on the Reserves, along with cash distributions received from Local Limited Partnerships, to the extent available, will be sufficient to fund the Fund's on-going operations. Reserves may be used to fund operating deficits, if the Managing General Partner deems funding appropriate. If Reserves are not adequate to cover the Fund's operations, the Fund will seek other financing sources including, but not limited to, the deferral of Asset Management Fees paid to an affiliate of the Managing General Partner or working with Local Limited Partnerships to increase cash distributions. To date, the Fund has used approximately $298,000 of operating funds to replenish Reserves. Since the Fund invests as a limited partner, the Fund has no contractual duty to provide additional funds to Local Limited Partnerships beyond its specified investment. Thus, as of June 30, 2005, the Fund had no contractual or other obligation to any Local Limited Partnership which had not been paid or provided for. Cash Distributions No cash distributions were made during the three months ended June 30, 2005. Results of Operations For the three months ended June 30, 2005, the Fund's operations resulted in a net loss of $86,065 as compared to a net loss of $192,786 for the same period in 2004. The decrease in net loss is primarily attributable to a decrease in equity in losses of Local Limited Partnerships and a decrease in general and administrative expenses. The decrease in equity in losses of Local Limited Partnerships is primarily due to an increase in unrecognized losses by the Fund of Local Limited Partnerships with carrying values of zero. The decrease in general and administrative expenses decreased is primarily due to decreased charges from an affiliate of the General Partner for operations and administrative expenses necessary for the operation of the Fund. BOSTON FINANCIAL TAX CREDIT FUND PLUS, A Limited Partnership MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) Portfolio Update The Fund's investment portfolio consists of limited partnership interests in twenty-three Local Limited Partnerships, each of which owns and operates a multi-family apartment complex and each of which has generated Tax Credits. Since inception, the Fund has generated Tax Credits, net of recapture, of approximately $1,467 per Class A Unit, with immaterial amounts expected from 2005 through 2010. Class B Unit investors have received Tax Credits, net of recapture, of approximately $1,055 per Limited Partner Unit, with immaterial amounts expected from 2005 through 2010. Properties that receive low income housing Tax Credits must remain in compliance with rent restriction and set-aside requirements for at least 15 years from the date the Property is completed. Failure to do so would result in the recapture of a portion of the Property's Tax Credits. Between 2006 and continuing through 2010, the Compliance Period of the twenty-three Properties in which the Fund has an interest will expire. The Managing General Partner has negotiated agreements that will ultimately dispose of the Fund's interest in five Local Limited Partnerships. It is unlikely that the disposition of any of these Local Limited Partnership interests will generate any material cash distributions to the Fund. The Managing General Partner will continue to closely monitor the operations of the Properties during the Compliance Period and will formulate disposition strategies with respect to the Fund's remaining Local Limited Partnership interests. It is unlikely that the Managing General Partner's efforts will result in the Fund disposing of all of its remaining Local Limited Partnership interests concurrently with the expiration of each Property's Compliance Period. The Fund shall dissolve and its affairs shall be wound up upon the disposition of the final Local Limited Partnership interest and other assets of the Fund. Investors will continue to be Limited Partners, receiving K-1s and quarterly and annual reports, until the Fund is dissolved. On or about July 13, 2004, Park G.P., Inc. ("Park") commenced litigation against Boston Financial Qualified Housing Tax Credits L.P. IV and its purported general partners (collectively, the "Defendants") in Clay County, Missouri, claiming that the Defendants breached the relevant partnership agreement and their fiduciary duties owed to Park by, among other things, failing to permit inspection of certain alleged "books and records" of the Fund. On or about October 7, 2004, Park sought leave of the court to amend its petition to include claims for inspection of the alleged "books and records" against the Fund, Boston Financial Qualified Housing Limited Partnership, Boston Financial Qualified Housing Tax Credits L.P. II, Boston Financial Qualified Housing Tax Credits L.P. III, Boston Financial Qualified Housing Tax Credits L.P. IV, Boston Financial Qualified Housing Tax Credits L.P. V, Boston Financial Tax Credit Fund VII, A Limited Partnership, and their purported general partners (collectively, the "New Defendants"). The court granted the amendment on November 15, 2004, and the New Defendants subsequently moved to dismiss the amended complaint in its entirety. That motion is currently pending (along with a concurrently filed motion for entry of a blanket protective order), and oral arguments on the motion took place on February 16, 2005. On or about October 8, 2004, Park moved the court for entry of a temporary restraining order compelling the Defendants and the New Defendants to turn over the alleged "books and records" in conjunction with a transaction Park was proposing entering into. On October 12, 2004, the court denied Park's request. After Park served a deposition notice duces tecum that requested the production of confidential non-public documents, the New Defendants filed a Motion for a Protective Order on March 23, 2005. After a short hearing on April 21, 2005, the Court "overrruled" the Motion in a brief docket entry on May 16, 2005 without any findings of fact, conclusions of law, or other explanation. On or about June 9, 2005, the New Defendants petitioned the Missouri Court of Appeals for a writ ordering the Circuit Court to set aside the prior order and grant the New Defendants' request for a protective order. BOSTON FINANCIAL TAX CREDIT FUND PLUS, A Limited Partnership MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) Portfolio Update (continued) The New Defendants maintain that Park is not entitled to review the materials requested and/or use the materials in secondary market transactions because, among other things: (i) they are not "books and records" of the New Defendants; (ii) Park does not seek to review them for a proper purpose; and (iii) that selective disclosure of the information to Park would give it an unfair informational advantage in secondary market transactions and may violate federal and/or state securities laws. The New Defendants accordingly intend on defending against the claims vigorously. The New Defendants have not formed an opinion that an unfavorable outcome is either probable or remote. Therefore, the New Defendants' counsel refrains from expressing an opinion as to the likely outcome of the case or the range of any loss. On August 24, 2004, the Fund, Boston Financial Qualified Housing Limited Partnership, Boston Financial Qualified Housing Tax Credits L.P. II, Boston Financial Qualified Housing Tax Credits L.P. III, Boston Financial Qualified Housing Tax Credits L.P. IV, Boston Financial Qualified Housing Tax Credits L.P. V, A Limited Partnership, Boston Financial Tax Credit Fund VII, A Limited Partnership, and Boston Financial Tax Credit Fund VIII, A Limited Partnership (collectively, the "Partnerships"), and their general partners commenced litigation against Everest Housing Investors 2, LLC ("Everest 2") and three other Everest-related entities (collectively , the "Everest Entities") in Massachusetts state court, seeking a declaratory judgment that certain materials the Everest Entities sought to inspect are not "books and records" of the Partnerships and that the Everest Entities are in any case not entitled to inspect said information under applicable partnership agreements, partnership law or otherwise. On October 7, 2004, the Everest Entities filed an answer and counterclaim against the Partnerships and their purported general partners, claiming that they breached applicable partnership agreements, partnership law and their fiduciary duties to the Everest Entities by failing to make the purported "books and records" available. On January 12, 2005, the Partnerships served a motion to amend their complaint to, among other things, add a claim based on Everest 2's breach of a November 24, 2003 letter agreement which compelled Everest 2 to keep confidential certain information contemporaneously disseminated by four of the Partnerships to Everest 2. Having received no opposition within the specified time, the Partnerships filed the motion to amend with the proposed first amended complaint on January 31, 2005. The Court has granted this Motion. The Partnerships maintain that the Everest Entities are not entitled to review the materials requested and/or use the materials in secondary market transactions because, among other things: (i) they are not "books and records" of the Partnerships; (ii) the Everest Entities do not seek to review them for a proper purpose; and (iii) that selective disclosure of the information to the Everest Entities would give them an unfair informational advantage in secondary market transactions and may violate federal and/or state securities laws. The Partnerships have not formed an opinion that an unfavorable outcome is either probable or remote. Therefore, the Partnerships' counsel refrains from expressing an opinion as to the likely outcome of the case or the range of any loss. Property Discussions A majority of the Properties in which the Fund has an interest have stabilized operations and operate above breakeven. A few Properties generate cash flow deficits that the Local General Partners of those Properties fund through project expense loans, subordinated loans or operating escrows. However, some Properties have had persistent operating difficulties that could either: i) have an adverse impact on the Fund's liquidity; ii) result in their foreclosure; or iii) result in the Managing General Partner deeming it appropriate for the Fund to dispose of its interest in the Local Limited Partnership prior to the expiration of the Compliance Period. Also, the Managing General Partner, in the normal course of the Fund's business, may arrange for the future disposition of its interest in certain Local Limited Partnerships. The following Property discussions focus only on such Properties. BOSTON FINANCIAL TAX CREDIT FUND PLUS, A Limited Partnership MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) Property Discussions (continued) As previously reported, although the Chicago, Illinois neighborhood in which 45th & Vincennes is located has improved in the last few years, potential tenants are reluctant to occupy the Property due to its location and curb appeal. As a result, maintaining occupancy, and therefore revenues, continues to be an issue, although occupancy has improved in recent quarters, debt service coverage and working capital is below appropriate levels. A site visit by the Managing General Partner found the Property in need of some minor improvements but in overall fair condition. Even though advances from the Local General Partner have enabled the Property to remain current on its loan obligations, the Managing General Partner believes that the Local General Partner and its affiliated management company are not adequately performing their responsibilities with respect to the Property. The Managing General Partner has expressed these concerns to the Local General Partner and will continue to closely monitor the Property's operations. As previously reported, due to concerns over the long-term financial health of Primrose, Phoenix Housing and Sycamore, located in Grand Forks, North Dakota, Moorhead, Minnesota and Sioux Falls, South Dakota, respectively, the Managing General Partner developed a plan that will ultimately result in the transfer of the Fund's interest in each Local Limited Partnership. All three Local Limited Partnerships have the same Local General Partner. In 1997, in an effort to reduce possible future risk, the Managing General Partner consummated the transfer of 50% of the Fund's interest in capital and profits in the three Local Limited Partnerships to an affiliate of the Local General Partner. Effective June 17, 1999, the Local General Partner transferred both its general partner interest and 48.5% of its interest in capital and profits in the three Local Limited Partnerships to a non-affiliated, non-profit general partner. Effective August 31, 2000, the former Local General Partner withdrew its remaining interest in each of the Local Limited Partnerships. The Managing General Partner had the right to transfer the Fund's remaining interests after December 1, 2001. As previously reported, with regard to Sycamore and Primrose, the Fund will retain its full share of Tax Credits until such time as the remaining interest is put to the Local General Partner. In addition, the Local General Partner has the right to call the remaining interest subsequent to the Compliance Period, which expires on December 31, 2007. With regard to Phoenix Housing, the Fund approved the admission of an additional limited partner to the Local Limited Partnership effective February 1, 2000. As a result, the Fund's interest in the Local Limited Partnership was diluted to an immaterial amount. Because of its diluted interest in the Local Limited Partnership, the Fund will not receive a material amount of the Property's Tax Credits subsequent to February 1, 2000. Instead, the Fund will receive cash from the Local Limited Partnership in the approximate amount of the Property's Tax Credits that it would have received had its interest in the Property not been diluted. The compliance period expires on December 31, 2005 for Phoenix Housing. As previously reported, as a result of concerns regarding the then existing operating deficits and capital requirements of Findley Place, located in Minneapolis, Minnesota, in 1999 the Managing General Partner developed a plan that will ultimately result in the transfer of the Fund's interest in the Local Limited Partnership. On March 1, 2000, the Managing General Partner consummated the transfer of 1% of the Fund's interest in losses, 48.5% of its interest in profits and 30% of its capital account to the Local General Partner. The Managing General Partner has the right to put the Fund's remaining interest to the Local General Partner any time after one year from the March 1, 2000 effective date. In addition, the Local General Partner has the right to call the remaining interest after the Compliance Period has expired, which will occur on December 31, 2008. Currently, the Property is experiencing stabilized operations. As previously reported, New Garden Place, located in Gilmer, North Carolina, has enjoyed strong operations for the past several years. In early 2004, the Local General Partner requested and the Fund provided its approval to a refinancing of the Property's first mortgage. The new first mortgage, which closed in April 2004, had a lower interest rate and lower annual debt service payments than the original mortgage, thereby increasing the Property's cash flow. In connection with the Fund's approval of this refinancing, the Fund and the Local General Partner entered into a put agreement whereby the Fund can transfer its interest in the Local Partnership to the Local General Partner for a nominal amount any time after the Property's Compliance Period ends on December 31, 2008. BOSTON FINANCIAL TAX CREDIT FUND PLUS, A Limited Partnership MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) Property Discussions (continued) As previously reported, Preston Place, located in Winchester, Virginia has historically operated extremely well. The Property finished 2004 with 98% occupancy and high levels of debt service coverage and working capital. In late 2003, the Local General Partner requested and the Managing General Partner approved a refinancing of the Property with net cash proceeds available for distribution to the Fund. On November 14, 2003, the Property closed on the refinancing, and the Fund received $750,000 of proceeds. The Managing General Partner, in accordance with and as permitted by the Partnership Agreement, retained the entire amount of net proceeds in Reserves. As previously reported, Chestnut Plains, located in Winston-Salem, North Carolina had experienced very low occupancy, inadequate levels of working capital and operating deficits for the last several quarters. The Local General Partner had been funding operating deficits but stopped such funding in May 2004. This resulted in the Property's inability to continue making debt service payments and a default on the Property's first mortgage. The Local General Partner failed to inform the Managing General Partner of the default. The Property's management agent informed the Managing General Partner of impending foreclosure by the first mortgage lender, but with inadequate time to formulate a workout plan. On October 22, 2004, the first mortgage lender foreclosed on the Property. This foreclosure will result in Tax Credit recapture projected to be approximately $4 per Unit, including interest. In addition, the foreclosure will result in taxable income projected to be approximately $98,000, or $3 per Unit. BOSTON FINANCIAL TAX CREDIT FUND PLUS, A Limited Partnership CONTROLS AND PROCEDURES Controls and Procedures Based on the Fund's evaluation as of the end of the period covered by this report, the Fund's officer has concluded that the Fund's disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports that the Fund files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. There have been no significant changes in the Fund's internal controls or in other factors that could significantly affect those controls subsequent to the date of their evaluation. PART II OTHER INFORMATION Items 1-5 Not applicable Item 6 Exhibits and reports on Form 8-K (a) Exhibits 31.1 Certification of Principal Executive Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002 31.2 Certification of Principal Financial Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002 32.1 Certification of Principal Executive Officer and Principal Financial Officer pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (b) Reports on Form 8-K - No reports on Form 8-K were filed during the quarter ended June 30, 2005. BOSTON FINANCIAL TAX CREDIT FUND PLUS, A Limited Partnership SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. DATED: August 15, 2005 BOSTON FINANCIAL TAX CREDIT FUND PLUS, A LIMITED PARTNERSHIP By: Arch Street VIII, Inc., its Managing General Partner /s/Jenny Netzer Jenny Netzer Executive Vice President MMA Financial, LLC