COMMISSION FILE NUMBER: 2-71136
DETONICS SMALL ARMS LIMITED
(Exact name of registrant as specified in it's charter)
Washington 91-1150122
(State Or Other Jurisdiction Of (Irs Employer Id No.)
incorporation or organization)
14508 SE 51ST, BELLEVUE, WA 98006
(Address and zip code of principal executive offices)
Registrant's telephone number, including area code: (425) 746-6761
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:
DOCUMENTS INCORPORATED BY REFERENCE
Form S-1, Detonics Small Arms Limited, Commission File No. 2- 71136, but
excluding the balance sheet of Detonics Small Arms Limited together with
the report of independent certified public accountants, is incorporated by
reference.
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PART I - FINANCIAL INFORMATION
Item 1: Financial Statements
See Appendix A
Item 2: Management's Discussion and Analysis of the Financial Condition
and Results of Operations
No royalties or other income were booked in the third quarter of 2000.
The partnership originally had licensed the manufacturing and sale of its
products to Detonics Manufacturing Corporation (DMC) a subsidiary of Energy
Sciences Corporation, (ESC). DMC, ESC and the Partnership entered Chapter
11 bankruptcy proceedings on April 29, 1986. In late 1987, the Bankruptcy
Court approved a sale of all of DMC's assets to a new entity, formed by
outside third parties, called New Detonics Manufacturing Corporation,
(NDMC). By subsequent majority vote of the limited partners of the
Partnership, a new license was entered into between the Partnership and
NDMC, which called for royalties to begin in late 1991 at the rate of 4% of
gross sales. No partnership income was expected before that time.
On May 13, 1988, ESC's bankruptcy was dismissed and all remaining assets
were repossessed by the sole secured creditor of ESC, the firm of Murphy &
Elgot. These assets are primarily amounts owed to ESC by the partnerships
and the rights to produce products owned by the partnerships. The general
partners have begun discussions with Mr. Murphy, (who was also counsel for
ESC and the partnerships), on the elimination of most or all the debt owed
by the Partnership to ESC, (and now, therefor to Murphy & Elgot).
As previously reported, the general partners learned in late 1991 that
production of firearms at NDMC was suspended in 1991. The general partners
have subsequently been advised that Murphy & Elgot, the sole secured
creditirs of the original DMC, have moved to have the "soft" assets (the
name "Detonics" and the right to manufacture the Detonics designs) which
were assigned to NDMC by the Bankruptcy Court be returned to Murphy &
Elgot. This occured in September 1992. Mr. Murphy passed away in 1997. The
general partners have had discussions with Mr. Elgot regarding future
attempts to recommercialize the products and he indicated he would likely
approve any recommercialization plan that the general partners would be
able to obtain. The general partners have been discussing such plans with a
third party, but, no royalty amounts have been discussed as of October 18,
2000. There can be no guarantee that it will be possible to arrange for
production of any of the Partnership's products and no royalties are
expected for 2000.
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PART II - OTHER INFORMATION
Item 1: Legal Proceedings
The staff of the Securities and Exchange Commission's Division of
Enforcement recommended to the Commission that it authorize the staff to
file a civil injunction action against the Partnership and Messrs. Maes and
Steffey to require timely filing of reports with the commission. Such an
injunction was entered on June 25, 1986. All subsequent reports have been
timely filed.
On October 16, 1989 the U.S. Bankruptcy Court ordered the conversion of the
partnership's Chapter 11 to a Chapter 7. On May 11, 1990, the partnership
filed an amended motion to dismiss the Chapter 7. The motion was granted on
June 21, 1990 and the partnership is no longer in bankruptcy.
In March 1993, the partnership received a "Notice of Beginning of
Administrative Proceeding" from the Internal Revenue Service. The issue was
a possible finding that the partnership "burned out" and is subject to
recapture. The general partners are of the position that the products and
the partnership remain viable. In July, 1993, the general partners received
notification from the IRS that they did not intend to make any changes as a
result of that Administrave Proceeding. The IRS has the right to bring the
subject up again.
Item 2: Changes In Securities: None
Item 3: Defaults Upon Senior Securities: None
Item 4: Submission Of Matters To A Vote Of Security Holders: None
Item 5: Other Information: None
Item 6: Exhibits, Financial Statement Schedules, and Reports
on Form 8-K
a) Documents filed as part of this Report: Unaudited
financial statement.
b) Reports on Form 8-K: None.
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APPENDIX A
DETONICS SMALL ARMS LIMITED
BALANCE SHEET
SEPTEMBER 30, 2000
(UNAUDITED)
ASSETS
Cash $ 0
Royalties Receivable 0
---------
TOTAL CURRENT ASSETS $ 0
Intangible Assets Less Amortization 0
Receivable from Affiliates Less Allowance 0
---------
TOTAL ASSETS $ 0
LIABILITIES AND PARTNERS' EQUITY
Accounts Payable $ 0
Taxes Payable 0
---------
TOTAL CURRENT LIABILITIES 0
Payable to Affiliates 672,769
---------
TOTAL LIABILITIES 672,769
Partners' Capital
(672,769)
---------
TOTAL LIABILITIES
AND PARTNER'S EQUITY 0
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DETONICS SMALL ARMS LIMITED
STATEMENT OF INCOME
FOR THE QUARTER ENDING
SEPTEMBER 30, 2000
(UNAUDITED)
Royalty Revenue $ 0
Expenses 0
--------
Net Income (Loss) $ 0
NOTE: The products owned by the Partnership were licensed to New Detonics
Manufacturing Corporation (NDMC). Under the terms of that license,
royalties were not scheduled to be paid to the Partnership until late 1991.
NDMC suspended production of all firearms and the license with NDMC has
been terminated. As of October 2000, there are no new license agreements in
existance.
DETONICS SMALL ARMS LIMITED
STATEMENT OF CASH FLOWS
FOR THE QUARTER ENDING
SEPTEMBER 30, 2000
(UNAUDITED)
Net Cash Provided By Operating Activities $ 0
Net Cash Used By Investing Activities 0
Net Cash Provided By Financing Activities 0
--------
Net Increase In Cash $ 0
Cash At Beginning Of Period $ 0
--------
Cash At End Of Period $ 0
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SIGNATURES
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.
DETONICS SMALL ARMS LIMITED
(Registrant)
10/18/00 Michel E. Maes, General Partner
Date (Signature)
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