<PAGE>
The registrant is filing restated 1994-1997 financial statements. These
restatements reflect changes discussed in Note 7 to the consolidated financial
statements.
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A
Quarterly Report Pursuant to Section 13 or 15(d)
of
The Securities Exchange Act of 1934
For the Quarterly Period ended March 31, 1998
Commission File No. 0-19963
TMP LAND MORTGAGE FUND, LTD.
A CALIFORNIA LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
CALIFORNIA 33-0451040
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
801 North Parkcenter Drive, Suite 235
Santa Ana, California 92705
(Address of principal executive office) (Zip Code)
(714) 836-5503
(Registrant's telephone number, including area code)
------------------------------
Indicate by check mark whether Registrant has [1] 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 such shorter period that the registrant was required
to file such reports) and [2] has been subject to such filing requirement for
the past 90 days.
Yes [X ] No [ ]
<PAGE>
TMP LAND MORTGAGE FUND, LTD
INDEX
PART IFINANCIAL INFORMATION Page
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets as of March 31, 1998 (unaudited)
and December 31, 1997 3
Consolidated Statements of Operations for the
Three Months ended March 31, 1998 and 1997 (unaudited) 4
Consolidated Statements of Cash Flows for the
Three Months ended March 31, 1998 and 1997 (unaudited) 5
Notes to Consolidated Financial Statements (unaudited) 6-7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8-9
PART II OTHER INFORMATION
Item 1. Legal Proceedings 10
Item 2. Changes in Securities 10
Item 3. Defaults Upon Senior Securities 10
Item 4. Submission of Matters to a Vote of Security Holders 10
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 10
SIGNATURES 11
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<PAGE>
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
TMP Land Mortgage Fund, LTD.
A California Limited Partnership
Consolidated Balance Sheets
March 31,
1998 December 31,
(unaudited) 1997
----------- ------------
Assets
------
<S> <C> <C>
Cash $ 736,061 $ 960,479
Prepaid Expenses 42,330 0
Investment in Unimproved Land (net of
valuation allowance of $3,992,548 and
$3,983,798 respectively) 11,118,709 10,687,386
Accounts Receivable 184,862 125,337
Due from Affiliates (net of unamortized
discount of $97,603 and $103,136,
respectively) 188,136 182,603
Investment in Joint Venture 608,639 607,590
------------- ------------
Total Assets $ 12,878,737 $ 12,563,395
============== =============
Liabilities and Partners' Capital
---------------------------------
Accounts Payable $ 130,625 $ 74,594
Accrued Expenses 0 800
Property Taxes Payable 4,476,801 4,206,068
Due to Affiliates 956 29,294
------------- ------------
Total Liabilities 4,608,382 4,310,756
------------- ------------
Minority Interest 319,788 309,533
Partners' Capital
General Partners (77,697) (77,771)
Limited Partners, 20,000 equity units
authorized; 15,715 units outstanding as
of March 31, 1998 and December 31, 1997 8,028,264 8,020,877
------------- ------------
Total Partners' Capital 7,950,567 7,943,106
------------- ------------
Total Liabilities and Partners' Capital $ 12,878,737 $ 12,563,395
============== =============
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
-3-
<PAGE>
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
TMP Land Mortgage Fund, LTD.
A California Limited Partnership
Consolidated Statements of Operations
(Unaudited)
Three Months Ended
March 31, March 31,
--------- ---------
1998 1997
Income
- ------
<S> <C> <C>
Interest Income $ 14,508 $ 8,670
Joint Venture Income 50,000 504,924
Loss on Investments (26,482) (11,086)
Other Income 1,200 900
------------- -------------
Total Income 39,226 503,408
------------- ------------
Expenses
- --------
Loss on Decline in Market Value of Property 8,750 0
Outside Services 13,969 9,980
California Franchise Tax 1,600 1,600
Administrative Expense 7,531 5,669
Total Expenses 31,850 17,249
------------- ------------
Net Income before Minority Interest 7,376 486,159
Minority Interest 85 (213)
------------- ------------
Net Income $ 7,461 $ 485,946
============== ==============
Allocation of Net Income
General Partners $ 75 $ 4,859
============== ==============
Limited Partners $ 7,386 $ 481,087
============== ==============
Limited Partners, per unit $ 0.47 $ 30.61
============== ==============
See Accompanying Notes to Consolidated Financial Statements
-4-
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
TMP Land Mortgage Fund, LTD.
A California Limited Partnership
Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended
March 31, March 31,
1998 1997
---- ----
<S> <C> <C>
Cash Flows From Operating Activities
Net Income $ 7,461 $ 485,946
Adjustments to Reconcile Net Income to
Net Cash Used in Operating Activities:
Loss on Decline in Market Value of
Property 8,750 0
Gain on Sale of Investment 0 (504,924)
Loss on Investments 26,482 11,086
Amortization of discount on Due
from Affiliates (5,533) (4,910)
Minority Interest in Income or
(Loss) of Subsidiary 85 213
Changes in assets and liabilities:
Increase in Accounts Payable 56,031 8,746
Increase in Prepaid Assets (42,330) 0
Decrease in Accrued Expenses (29,138) (8,294)
Increase in Accounts Receivable (59,525) (101,894)
---------- ------------
Net Cash Used in Operatin
Activities (37,717) (114,031)
---------- ------------
Cash Flows From Investing Activities:
Proceeds from Sale of Investment 0 1,708,910
Increase in Minority Interest 10,170 10,245
Increase in Development Costs (160,591) (57,700)
Increase in Carrying Cost of Properties (8,750) (35,915)
Increase in Investment in Joint Ventures (27,530) (208,864)
---------- ------------
Net Cash Provided by (Used in)
Investing Activities (186,701) 1,416,676
---------- ------------
Cash Flows From Financing Activities:
Distributions to Partners 0 (1,000,045)
---------- ------------
Net Increase (Decrease) in Cash (224,418) 302,600
Cash, Beginning of Period 960,479 361,515
---------- ------------
Cash, End of Period $ 736,061 $ 664,115
=========== ================
</TABLE>
Supplemental Schedule of Non-Cash Investing and Financing Activities:
- ---------------------------------------------------------------------
Non-cash investing and financing activities during the three months ended March
31, 1998 consists of the Partnership capitalizing property taxes for foreclosed
properties of $270,733 as well as carrying costs of $9,550. A valuation
allowance of $9,550 was recorded to reduce the net carrying value of the
properties to their fair market values.
See Accompanying Notes to Consolidated Financial Statements
-5-
<PAGE>
TMP Land Mortgage Fund, LTD.
A California Limited Partnership
Notes to Consolidated Financial Statements
(Unaudited)
The accompanying unaudited interim financial statements include all adjustments
(consisting solely of normal recurring adjustments) which are, in the opinion of
management, necessary to present fairly the financial position of the
Partnership as of June 30, 1998 and the results of its operations, and cash
flows for the period then ended in accordance with generally accepted accounting
principles for interim financial information.
NOTE 1 - Summary of Significant Accounting Policies
Accounting Method- TMP Land Mortgage Fund, Ltd. (the Partnership) prepares its
- ------------------
financial statements on the accrual basis of accounting. Principles of
Consolidation - The consolidated financial statements include the accounts of
the Partnership and its majority-owned investments, TMP Homes Remington, LLC
(Remington) and TMP Homes Flowerfield-Sun City, LLC (Sun City). All significant
intercompany accounts and transactions have been eliminated in consolidation.
Income Taxes - The entity is treated as a partnership for income tax purposes
- -------------
and any income or loss is passed through and taxable at the partner level.
Accordingly, no provision for federal income taxes is provided.
NOTE 2 - Allocation of Profits, Losses and Cash Distributions
Profit, losses, and cash distributions are allocated ninety-nine percent to the
limited partners and one percent to the general partners until the limited
partners have received an amount equal to their capital contributions plus a
cumulative, non-compounded return of eight percent per annum based on their
adjusted capital account balances, at which time, remaining profits, losses and
cash distributions are allocated seventy-six percent to the limited partners and
twenty-four percent to the general partners. Distributions of cash from
operations, if any, are made monthly within 30 days after the end of the month.
Note 3 - Investment in Unimproved Land
The Partnership had made twelve land loans as of March 31, 1998. Three of the
loans had been repaid in full, and nine of the loans had defaulted. On all the
defaults which had occurred, the Partnership foreclosed on the properties
securing the loans.
-6-
<PAGE>
TMP Land
Mortgage Fund, LTD.
A California Limited Partnership
Notes to Consolidated Financial Statements
(Unaudited)
NOTE 4 - Property Taxes Payable
As of March 31, 1998, the Partnership owed approximately $4,200,000 in property
taxes payable on the PR Equities properties. This includes approximately
$3,700,000 of Mello-Roos tax. In addition, the Partnership owed approximately
$300,000 in property taxes on the other Partnership properties. If the property
taxes remain delinquent for five years, the County can foreclose on the
property.
NOTE 5 - Restatements and reissuances of 1994 - 1997 Financial Statements
In 1992, the Partnership made two loans totaling $3,500,000 to PR Equities,
Ltd., a California Limited Partnership. The loans were secured by first trust
deeds on residential property located in San Jacinto, California. In 1994, the
Partnership foreclosed on the properties securing these loans and continues to
own these properties. In accordance with generally accepted accounting
principles, assets acquired through foreclosure should be recorded at the lower
of cost or fair value less costs of disposal at the date of foreclosure. The
1994-1997 financial statements originally issued reported this property at the
amount of the outstanding mortgage balances due on these loans at the time of
foreclosure, which did not represent their fair value less costs of disposal.
Management has subsequently determined that a valuation allowance for these
properties should have been established for approximately $3.8 million at the
date of foreclosure in 1994. The valuation allowance should have been adjusted
each year thereafter such that the only value for these properties is the
capitalized direct carrying costs that represent the total accumulated property
taxes and Mello-Roos bond assessments. Therefore, the consolidated financial
statements for 1994 through 1997 have been restated to record the valuation
allowance and to adjust these properties to their fair value for those years.
In addition, management has determined that the amount of property taxes payable
as recorded in June, 1994, and subsequent periods, were understated by
approximately $368,000. Accordingly, the consolidated financial statements for
those periods have been restated for this understatement by adjusting the
carrying value of the land and the property taxes payable in the appropriate
fiscal years.
In accordance with generally accepted accounting principles, the financial
statements of majority-owned investments are required to be consolidated. The
1995, 1996, and 1997 financial statements originally issued did not properly
account for the consolidation of all significant majority-owned investments.
Therefore, the financial statements of these majority owned entities have been
consolidated with the financial statements of the Partnership's and have been
restated for fiscal years 1995, 1996, and 1997 to reflect the consolidation and
related minority interests of $310,000 for Remington and Sun City as of December
31, 1997 and $320,000 at March 31, 1998.
-7-
<PAGE>
TMP Land Mortgage Fund, LTD.
A California Limited Partnership
Notes to Consolidated Financial Statements
(Unaudited)
NOTE 5 - Restatements and reissuances of 1994 - 1997 Financial Statements
In November, 1996, the Partnership entered into a non-interest bearing note for
$286,000. In accordance with generally accepted accounting principles, the note
should have been discounted at the date of execution and interest accreted over
the period of the note for $127,000. The consolidated financial statements have
been restated for this discount and accretion of interest.
-8-
<PAGE>
TMP Land Mortgage Fund, LTD.
A California Limited Partnership
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
TMP Land Mortgage Fund, Ltd., is a California Limited Partnership formed in
April 1992, of which TMP Investments, Inc., a California corporation, and TMP
Properties, a California general partnership, are the General Partners (the
"General Partners"). The Partnership was formed principally to make short-term
loans to unaffiliated parties secured by first trust deeds on unimproved
properties, primarily in the Inland Empire area of Southern California and in
some instances, in other areas of Southern California, and to provide cash
distributions to the Limited Partners, primarily from interest earned on the
mortgage loans. The Partnership is not a mutual fund or any other type of
investment company within the meaning of, and is not subject to regulations
under, the Investment Company Act of 1940.
As of March 31, 1998, the Partnership had received and accepted subscriptions of
15,715 units, representing total subscription proceeds in the amount of
$15,715,000. All proceeds had been committed to the twelve mortgage loan
investments made by the Partnership and to working capital reserves. During
1992, the Partnership funded five mortgage loans. Four loans were funded in 1993
and three loans were funded in 1994.
As a consequence of adverse changes in market conditions and other factors,
three of the loans were repaid and nine of the loans were foreclosed upon. As of
March 31, 1998, the following activity occurred on the properties that the
Partnership owns:
See restatement and resissuance of financial statements in Note 5 to the
Partnership's consolidated financial statements.
PR Equities Loan #1 and #2
The Partnership foreclosed on the property that secured these loans during 1994
and now owns the property. The current outstanding payments due as a result of
the regular tax and Mello-Roos tax assessments against the Partnership's lots
taken back in foreclosure is over $4,000,000. This debt, plus the continuing tax
accrual makes the property unsaleable in the current real estate market. The
City of San Jacinto received the overall appraisal of the properties in the CFD
during the first week of July. The low land values reflected in the appraisal
confirmed the General Partners opinion that the bonds should be restructured,
with the overall bonded indebtedness and the annual debt service reduced.
The city was forced by the terms of the bonds to schedule a sale of the property
for delinquent bond assessments. The buyer would be required to pay the full
unpaid assessment, penalties, interest as well as assume the full amount of the
remaining assessment. The sale occurred in April 1997 but there was no buyer for
the properties; therefore, the Partnership continues to own these parcels.
During the third quarter of 1997, the bonds were purchased at a deep discount
and the General Partners believe that the land will ultimately be foreclosed
upon by the new bondholder(s).
-9-
<PAGE>
TMP Land Mortgage Fund, LTD.
A California Limited Partnership
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations, Continued
Environmental Development Loan
The Partnership accepted a deed in lieu of foreclosure and now owns the
property. A joint venture with TMP Homes has been formed to build single family
homes on the 181 lots. The final map and the improvement plans for Phase I and
II have been approved by the city.
Tokai Bank has issued a letter of intent to provide a construction loan.
Fox Olson Loan #2
Property on Newport Avenue west of the Interstate 215 is now owned by the
Partnership. A joint venture with TMP Homes has been formed to build 45
single-family homes. The final map has been approved by the city and First Bank
& Trust has expressed an interest in providing a construction loan.
LaMonte Loan
The Partnership acquired this 6.5 acre commercial property through foreclosure
in April 1996. During September 1997, the property was sold for a profit of
approximately $500,000.
Distributions to investors began August 1, 1992, and continued monthly through
May 1, 1995. On June 1, 1995, the General Partners suspended distributions due
to the default and subsequent foreclosure on several of the mortgage loans.
During 1997, the Partnership made two distributions from the proceeds of the two
1997 property sales.
During the year ended December 31, 1997, the Partnership generated approximately
$3,000,000 of cash from the sale of the Hollywood Studio Club Apartments and the
`LaMonte' land. There was no interest received on mortgage loans. Approximately
$2,200,000 was distributed to investors from the proceeds of these two sales.
Management believes there is sufficient cash to meet anticipated Partnership
cash needs for the next 12 months. However, management does not plan to pay the
Mello-Roos taxes on the PR Equities properties unless the bonds can be
restructured under more favorable terms.
The Partnership will maintain reserves for working capital and contingency
reserves in an amount as the General Partners deem necessary for the operation
of the business of the Partnership. In addition, the Partnership may incur
indebtedness as necessary for development or other expenses incurred in holding
the properties and/or developing the property in conjunction with an affiliated
development company. The Partnership is making every effort to develop and/or
sell all of the properties that it holds.
-10-
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities and Use of Proceeds
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 and Reports on Form 8-K
None.
-11-
<PAGE>
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.
Date: JUNE 11, 1999
TMP Land Mortgage Fund, Ltd.
A California Limited Partnership
By: TMP Investments, Inc., as General Partner
By: /S/ WILLIAM O PASSO
-------------------------------------------
William O. Passo, President
By: /S/ ANTHONY W THOMPSON
-------------------------------------------
Anthony W. Thompson, Exec. VP
By: /S/ RICHARD HUTTON JR
-------------------------------------------
Richard Hutton, Jr., Controller
By: TMP Properties, a California General
Partnership as General Partner
By: /S/ WILLIAM O PASSO
-------------------------------------------
William O. Passo, General Partner
By: /S/ ANTHONY W THOMPSON
-------------------------------------------
Anthony W. Thompson, General Partner
By: /S/ SCOTT E MCDANIEL
------------------------------------------
Scott E. McDaniel, General Partner
12
