-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FRrrKCCS66ZDKauswNFTeQaUZEsE31L1oo1CbLhzN5fjJieNPIB7ug/yso7Fu+Lr c7F61QPC8sb+7YzsdwSkrg== 0001061095-98-000041.txt : 19980820 0001061095-98-000041.hdr.sgml : 19980820 ACCESSION NUMBER: 0001061095-98-000041 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980819 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: TMP INLAND EMPIRE IV LTD CENTRAL INDEX KEY: 0000885051 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 330341829 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: SEC FILE NUMBER: 001-14409 FILM NUMBER: 98694079 BUSINESS ADDRESS: STREET 1: 801 N PARKCENTER DR STREET 2: STE 235 CITY: SANTA ANA STATE: CA ZIP: 92705 BUSINESS PHONE: 7148365503 10-K/A 1 AMENDED FORM 10-K/A FOR DECEMBER 31, 1997 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------ FORM 10-K/A (Mark One) [X] Annual report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 (Fee Required) For the fiscal year ended December 31, 1997 [ ] Transition report pursuant to Section 13 or 15 (d) of the Securities Exchange act of 1934 (No Fee Required). For the transition from _________to____________ ----------------- COMMISSION FILE NO. 0-19933 TMP INLAND EMPIRE IV, LTD., A CALIFORNIA LIMITED PARTNERSHIP (Exact name of registrant as specified in its charter) CALIFORNIA 33-0341829 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 801 N. PARKCENTER DRIVE, SUITE 235 92705 SANTA ANA, CALIFORNIA (Zip Code) (Address of principal executive office) (714) 836-5503 (Registrant's telephone number, including area code) -------------------- Securities to be registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which to be so registered each class is to be registered - ------------------- ------------------------------ N/A N/A Securities to be registered pursuant to Section 12 (g) of the Act: UNITS OF LIMITED PARTNERSHIP INTEREST (Title of Class) 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 [ ] Table of Contents Independent Auditor's Report............................................ 1 Balance Sheet........................................................... 2 Statement of Income..................................................... 3 Statement of Partners' Capital.......................................... 4 Statement of Cash Flows................................................. 5 Notes to Financial Statements........................................... 6-9 Supplementary Information............................................... 10-12 Independent Auditor's Report To the Partners TMP Inland Empire IV, Ltd. (A California Limited Partnership) We have audited the accompanying balance sheet of TMP Inland Empire IV, Ltd. (A California Limited Partnership) as of December 31, 1997 and the related statements of income, partners' capital, and cash flows for the year then ended. 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 generally accepted auditing standards. 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 TMP Inland Empire IV, Ltd. (A California Limited Partnership) as of December 31, 1997 and the results of its operations and its cash flows for the year then ended, in conformity with generally accepted accounting principles. Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplementary information contained in Schedule I is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is stated fairly in all material respects in relation to the basic financial statements taken as a whole. Balser, Horowitz, Frank & Wakeling BALSER, HOROWITZ, FRANK & WAKELING An Accountancy Corporation Santa Ana, California January 26, 1998 except for Note 6, as to which the date is August 3, 1998 TMP INLAND EMPIRE IV, LTD. (A California Limited Partnership) Balance Sheet December 31, 1997
Assets ------ 1997 ---- Cash $ 75,651 Investment in unimproved land, at lower of cost or fair value 2,350,715 Total assets $2,426,366 ========== Liabilities and Partners' Capital --------------------------------- Commissions payable $ 70,560 Interest Payable 1,900 Property taxes payable 124,047 Due to affiliates 963 Franchise tax payable 800 Note payable 190,000 ----------- Total liabilities 388,270 =========== Partners' capital (deficit) General partners (55,334) Limited partners; 8,500 equity units authorized and outstanding 2,093,430 --------- Total partners' capital 2,038,096 --------- Total liabilities and partners' capital $2,426,366 ========== See Accompanying Notes and Independent Auditor's Report
TMP INLAND EMPIRE IV, LTD. (A California Limited Partnership) Statement of Income For the Year Ended December 31, 1997
1997 ---- Income - ------ Sale of property $ 127,000 Cost of sales (196,491) -------- Loss on sale of property (69,491) Interest income 2,325 Other 49 -------- Total income or (loss) (67,117) -------- Expenses Accounting 7,780 Expense reimbursements 15,751 General partner fees 12,245 ------- Total expenses 35,776 ------- Income or (loss) before income taxes (102,893) State Franchise tax 800 ------- Net income or (loss) $(103,693) ========== Allocation of net income or (loss): General partners, in the aggregate $ (1,036) ========== Limited partners, in the aggregate $ (102,657) ========== Limited partners, per equity $ (12.08) ========== See Accompanying Notes and Independent Auditor's Report -3-
TMP INLAND EMPIRE IV, LTD. (A California Limited Partnership) Statement of Partners' Capital For the Year Ended December 31, 1997
General Limited Partners Partners Total Partners' capital (deficit) December 31, 1996 (54,298) 2,196,087 2,141,789 Net (loss) for 1997 (1,036) (102,657) (103,693) ----------- ---------- ---------- Partners' capital (deficit) December 31, 1997 $ (55,334) $2,093,430 $ 2,038,096 ========== ========= ========== See Accompanying Notes and Independent Auditor's Report
TMP INLAND EMPIRE IV, LTD. (A California Limited Partnership) Statement of Cash Flows For the Year Ended December 31, 1997
1997 ---- Cash flow from operating activities Net income or (loss) $ (111,473) Adjustments to reconcile net income or (loss) to net cash used in operating activities: Increase in carrying costs of property (99,425) Loss on sale of property 69,491 Increase in interest payable 1,900 Increase or (decrease) in property taxes payable 54,630 Increase or (decrease) in due to affiliates 557 ----------- Net cash (used in) operating activities (84,320) ----------- Cash flows from investing activities Proceeds from sale of properties 127,000 ---------- Net cash provided by investing activities 127,000 ---------- Cash flows from financing activities Proceeds from notes payable 0 ---------- Net cash provided by financing activities 0 ---------- Net increase or (decrease) in cash 42,680 Cash, beginning of year 32,971 ---------- Cash, end of year $ 75,651 =========== Supplemental disclosures of cash flow information Income taxes paid $ 800 ============= Interest paid $ 20,900 ============= Other disclosures For the year ended December 31, 1997 the Partnership did not enter into any non-cash investing or financing activities, nor did it have any short-term, highly liquid investments. See Accompanying Notes and Independent Auditor's Report
TMP INLAND EMPIRE IV, LTD. (A California Limited Partnership) Notes to Financial Statements December 31, 1997 Note 1 - Summary of significant accounting policies Accounting Method - The Partnership's policy is to prepare its financial statements on the accrual basis of accounting. Organization Costs - Organization costs include expenses incurred in the formation of the Partnership that have been capitalized and are being amortized over a period of 40 years prior to 1992 and 5 years beginning in 1992. Investment in Unimproved Land - Investment in unimproved land is stated at lower of cost or fair value. All costs associated with the acquisition of a property are capitalized. Additionally, the Partnership capitalizes direct carrying costs (such as interest expense and property taxes). These costs are added to the cost of the properties and are deducted from the sales prices to determine gains when properties are sold. Syndication Costs - Syndication costs (such as commissions, printing, and legal fees) totaling $928,614 represent costs incurred to raise capital and, accordingly, are recorded as a reduction in partners' capital (see Note 3). Income Taxes - The entity is treated as a partnership for income tax purposes and any income or loss is passed through and taxable to the individual partners. Accordingly, there is no provision for federal income taxes in the accompanying financial statements. However, the minimum California Franchise tax due by the Partnership was $800 for the year ended December 31, 1997. Cash and Cash Equivalents - For purposes of the statements of cash flows, the Partnership considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. Estimates - In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting period. Actual results could differ from these estimates. Concentration - All unimproved land parcels held for investment are located in the Inland Empire area of Southern California. The eventual sales price of all parcels is highly dependent on the real estate market condition. The Partnership attempts to mitigate any potential risk by monitoring the market condition and holding the land parcels until the real estate market recovers. TMP INLAND EMPIRE IV, LTD. (A California Limited Partnership) Notes to Financial Statements December 31, 1997 Note 2 - Organization of the Partnership On June 7, 1989, the Partnership was formed with TMP Properties (A California General Partnership) and TMP Investments, Inc. (A California Corporation) as the general partners. The partners of TMP Properties are William O. Passo, Anthony W. Thompson and Scott E. McDaniel. William O. Passo and Anthony W. Thompson were the shareholders of TMP Investments, Inc. until October 1, 1995, when they sold their shares to TMP Group, Inc., and then became the shareholders of TMP Group, Inc. The Partnership originally acquired ten separate parcels of unimproved real property in Riverside and San Bernardino Counties, California. The properties were to be held for investment, appreciation, and ultimate sale and/or improvement of all or a portion thereof, either alone or in conjunction with a joint venture partner. One parcel was sold in 1989, another parcel was sold in 1990, a third parcel was sold in 1995, and a fourth parcel was sold in 1997. The partnership agreement provides for two types of investments: Individual Retirement Accounts (IRA) and others. The IRA minimum purchase requirement was $2,000 and all others were a minimum purchase requirement of $5,000. The maximum liability of the limited partners is the amount of their capital contribution. Note 3 - Partners' contributions The Partnership offered for sale 8,500 units at $1,000 each to qualified investors. As of December 31, 1989, all 8,500 units had been sold for total limited partner contributions of $8,500,000. There have been no contributions made by the general partners. As described in Note 1, syndication costs have been recorded as a reduction in partners' capital. Note 4 - Allocation of profits, losses and cash distributions Profits, losses and cash distributions are allocated 99% to the limited partners and 1% to the general partners until the limited partners have received an amount equal to their capital contributions plus a cumulative, non-compounded return of 6% per annum on their adjusted capital contributions. At that point, the limited partners are allocated 85% and the general partners 15% of profits, losses and cash distributions. There were no distributions in 1997. TMP INLAND EMPIRE IV, LTD. (A California Limited Partnership) Notes to Financial Statements December 31, 1997 Note 5 - Related party transactions Syndication costs (see Note 1) netted against partners' capital contributions include $850,000 in selling commissions paid in prior years to TMP Capital Corp. for the sale of partnership units of which a portion was then paid to unrelated registered representatives. William O. Passo and Anthony W. Thompson were the shareholders of TMP Capital Corp. until October 1, 1995, when they sold their shares to TMP Group, Inc. Investment in unimproved land includes acquisition fees of approximately $365,000 paid in prior years to TMP Properties and TMP Investments, Inc., the general partners, for services rendered in connection with the acquisition of the properties. The Partnership paid $12,245 in partnership management fees to the general partners for the year ended December 31, 1997. The Partnership was also charged $9,876 during the year ended December 31, 1997 by the general partner and an affiliated company of the general partner for office, secretarial and advertising expenses. At December 31, 1997 the Partnership had a payable of $963 to the general partner and the affiliated company. At December 31, 1997, $70,560 in sales commissions was payable to Regal Realty, a company wholly owned by Scott E. McDaniel, for services rendered relating to sales of properties in 1990 and 1989. Mr. McDaniel is a partner of TMP Properties and he was a shareholder of TMP Investments, Inc. until September 1993 when he sold his shares to Mr. Passo and Mr. Thompson. Ultimate payment of such sales commissions is contingent on the limited partners receiving an amount equal to their capital contributions plus a cumulative, non-compounded return of 6% per annum on their adjusted capital contribution. Note 6 - Re-statement and re-issuance of 1997 financial statements In compliance with Statement of Financial Accounting Standards No. 121 Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of (SFAS 121), the 1995 and 1996 financial statements reported expenses for the decline in fair value of unimproved land totaling $3,816,439. The 1997 financial statements originally issued with the auditor's report dated January 28, 1998 reported $1,741,509 of income due to appreciation in fair value of land. Current clarification reveals that SFAS 121 does not provide for recording appreciation in fair value of an asset even in view of previously recording a decline in value. Therefore, these financial statements have been re-stated to remove the appreciation in fair value of land. In addition, certain carrying costs of land that were previously capitalized have been re-stated as current expenses in the amount of $35,776. TMP INLAND EMPIRE IV, LTD. (A California Limited Partnership) Notes to Financial Statements December 31, 1997
Note 7 - Sale and related cost of property sold The following summarizes properties sold in 1997. 1997 Victorville 10 acres Sale Price $ 127,000 --------- Cost of parcel 410,000 Decline in fair value of land (319,494) Acquisition fees 33,383 Development costs 9,810 Carrying costs 62,792 --------- Total costs 196,491 --------- Loss on sale of property $ (69,491) ==========
Note 8 - Notes payable During February 1996, the Partnership borrowed $190,000 from a private party. The note is secured by a deed of trust on a parcel of land owned by the Partnership in Beaumont, California. The note is due on February 1, 1999. Interest accrues at 12% per annum payable in monthly installments of $1,900 starting March 1, 1997. As of December 31, 1997, $41,737 of interest had been paid and capitalized to land carrying cost. Note 9 - Property taxes payable Property taxes payable at December 31, 1997 are as follows:
1995 $ 6,310 1996 27,784 1997 89,953 -------- $124,047 ========
If the property taxes remain delinquent for five years, then the County can foreclose on the property. Management plans to take the necessary action to prevent foreclosures.
SUPPLEMENTARY INFORMATION TMP INLAND EMPIRE IV, LTD. (A California Limited Partnership) Schedule I - Real Estate and Accumulated Depreciation (Schedule XI, Rule 12-28, For SEC Reporting Purposes) For the Year Ended December 31, 1996 COSTS CAPITALIZED SUBSEQUENT Gross TO ACQUISITION amount -------------------- at which Estimated Initial Carrying Carried at Accumulated Date of Date Depreciable Description of Assets Encumbrances Costs Improvements Costs Year-End Depreciation Construction Acquired Life --------------------- ------------ ----- ------------ ----- -------- ----------- ------------ ---------- --------- Unimproved land - Perris, CA -0- $1,001,160 -0- $118,809 $1,119,969 -0- n/a 6/23/89 n/a Unimproved land - Riverside, CA -0- 331,768 -0- 111,106 442,874 -0- n/a 8/9/89 n/a Unimproved land - Beaumont, CA -0- 732,567 $1,772 112,308 846,647 -0- n/a 9/14/89 n/a Unimproved land - Beaumont, CA -0- 821,842 3,577 109,197 934,616 -0- n/a 6/19/89 n/a Unimproved land - Victorville, CA -0- 451,297 -0- 59,115 510,412 -0- n/a 8/17/89 n/a Unimproved land - Victorville, CA -0- 769,718 -0- 121,121 890,839 -0- n/a 7/14/89 n/a Unimproved land - Victorville, CA -0- 1,322,099 -0- 188,983 1,511,082 -0- n/a 8/10/89 n/a -0- $5,430,451 $5,349 $820,639 $6,256,439 -0- === ========== ====== ======== ========== === Reconciliation of carrying amount Beginning balance $6,103,305 Additions Acquisitions $ -0- Carrying costs 153,134 ------- Total additions 153,134 ---------- 6,256,439 Less allowance for decline in fair value (3,816,439) ---------- Ending balance $2,440,000 See Accompanying Notes and Independent Auditor's Report
TMP INLAND EMPIRE IV, LTD. (A California Limited Partnership) Schedule I - Real Estate and Accumulated Depreciation (Schedule XI, Rule 12-28, For SEC Reporting Purposes) For the Year Ended December 31, 1995 COSTS CAPITALIZED SUBSEQUENT Gross TO ACQUISITION amount -------------- at which Estimated Initial Carrying Carried at Accumulated Date of Date Depreciable Description of Assets Encumbrances Costs Improvements Costs Year-End Depreciation Construction Acquired Life - --------------------- ------------ ----- ------------ ----- -------- ------------ ------------ -------- ---------- Unimproved land - Perris, CA -0- $1,001,160 -0- $ 98,535 $1,099,695 -0- n/a 6/23/89 n/a Unimproved land - Riverside, CA -0- 331,768 -0- 87,858 419,626 -0- n/a 8/9/89 n/a Unimproved land - Beaumont, CA -0- 732,567 $1,772 89,058 823,397 -0- n/a 9/14/89 n/a Unimproved land - Beaumont, CA -0- 821,842 3,577 87,796 913,215 -0- n/a 6/19/89 n/a Unimproved land - Victorville, CA -0- 451,297 -0- 49,935 501,232 -0- n/a 8/17/89 n/a Unimproved land - Victorville, CA -0- 769,718 -0- 102,420 872,138 -0- n/a 7/14/89 n/a Unimproved land - Victorville, CA -0- 1,322,099 -0- 151,903 1,474,002 -0- n/a 8/10/89 n/a --- --------- ----- ------- --------- --- ------- -0- $5,430,451 $5,349 $667,505 $6,103,305 -0- Reconciliation of carrying amount Beginning balance $6,033,962 Additions Carrying costs 98,228 ------ Total additions 98,228 ---------- Deductions Initial costs (24,435) Carrying costs (4,372) Reduction in development costs (78) ------- (28,885) ------- 6,103,305 Less allowance for decline in fair value ( 562,244) --------- Ending balance $5,541,061 ========== See Accompanying Notes and Independent Auditor's Report
TMP INLAND EMPIRE IV, LTD. (A California Limited Partnership) Schedule I - Real Estate and Accumulated Depreciation (Schedule XI, Rule 12-28, For SEC Reporting Purposes) For the Year Ended December 31, 1997
COSTS CAPITALIZED SUBSEQUENT Gross TO ACQUISITION amount ---------------- at which Estimated Initial Carrying Carried at Accumulated Date of Date Depreciable Description of Assets Encumbrances Costs Improvements Costs Year-End Depreciation Construction aquired Life Unimproved land - Perris, CA -0- $1,001,160 -0- $128,790 $1,129,950 -0- n/a 6/23/89 n/a Unimproved land - Riverside, CA -0- 331,768 -0- 132,260 464,028 -0- n/a 8/9/89 n/a Unimproved land - Beaumont, CA -0- 732,567 $1,772 125,496 859,835 -0- n/a 9/14/89 n/a Unimproved land - Beaumont, CA -0- 821,842 3,577 121,117 946,536 -0- n/a 6/19/89 n/a Unimproved land - Victorville, CA -0- 769,718 -0- 135,115 904,833 -0- n/a 7/14/89 n/a Unimproved land - Victorville, CA -0- 1,322,099 -0- 220,405 1,542,504 -0- n/a 8/10/89 n/a - --------- --- ------- --------- --- - -- -- -0- $4,979,154 $5,349 $863,183 $5,847,686 -0- = ========== ====== ======== ========== === Reconciliation of carrying amount Beginning balance $6,256,439 Additions Development costs $ 0 Carrying costs 105,336 ------- Total additions 105,336 ------- Deductions Initial costs (451,297) Carrying costs (62,792) -------- Total deductions (514,089) -------- 5,847,686 Less allowance for decline in fair value (3,496,971) ---------- Ending balance $2,350,715 See Accompanying Notes and Independent Auditor's Report
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