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U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-QSB ----------- Quarterly Report under Section 13 or 15 (d) of The Securities Exchange Act of 1934 For the Quarterly Period Ended September 30, 2000 Commission File No. 0-19916 TMP INLAND EMPIRE V, LTD A CALIFORNIA LIMITED PARTNERSHIP (Name of small business issuer as specified in its charter) CALIFORNIA 33-0368324 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 801 North Parkcenter Drive, Suite 235 Santa Ana, California 92705 (Address of principal executive offices, including Zip Code) (714) 836-5503 (Issuer's telephone number, including area code) Check whether the issuer [1] filed all reports required to be filed by Section 13 or 15 (d) of the Exchange Act during the past 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 [ ] Transitional Small Business Disclosure Format:____Yes__X__No
PART I - FINANCIAL INFORMATION Item 1. Financial Statements The following financial statements are filed as a part of this form 10-QSB: Balance Sheets as of September 30, 2000 and December 31, 1999, Statements of Operations for the three and nine months ended September 30, 2000 and 1999, and Statements of Cash Flows for the nine months ended September 30, 2000 and 1999. The interim financial statements presented have been prepared by the Partnership without audit and in the opinion of the management, reflect all adjustments of a normal recurring nature necessary for a fair statement of (a) the results of operations for the three and nine months ended September 30, 2000 and 1999 (b) the financial position at of September 30, 2000 and (c) the cash flows for the nine months ended September 30, 2000 and 1999. Interim results are not necessarily indicative of results for a full year. The balance sheet presented as of December 31, 1999 has been derived from the financial statements that have been audited by the Partnership's independent public accountants. The financial statements and notes are condensed as permitted by Form 10-QSB and do not contain certain information included in the annual financial statements and notes of the Partnership. The financial statements and notes included herein should be read in conjunction with the financial statements and notes included in the Partnership's Form 10-KSB. 2
TMP INLAND EMPIRE V, LTD. A California Limited Partnership Balance Sheets September 30, December 31, 2000 1999 (unaudited) -------------- -------------- Assets Cash ......................................... $ 227,257 $ 2,552 Note Receivable (Note 8) ..................... 1,131 27,303 Prepaid & Other Expenses ...................... 28,955 730 Investment in Unimproved Land, net (Note 1) ... 5,037,079 4,931,409 ----------- ------------ Total Assets ................................ $ 5,294,422 $ 4,961,994 =========== ============ Liabilities and Partners' Capital Accounts Payable & Accrued Expenses ........... $ 4,685 $ 1,985 Due to Affiliates (Note 5 and 6) ............... 585,599 418,118 Property Taxes Payable (Note 9) ................ 107,896 148,135 Franchise Tax Payable .......................... 800 800 Commission Payable to Affiliate (Note 6) ....... 5,400 5,400 Notes Payable (Note 7) ......................... 440,000 125,000 ----------- ------------ Total Liabilities ......................... 1,144,380 699,438 ----------- ------------ General Partners ............................... (47,680) (46,555) Limited Partners: 10,000 Equity Units Authorized and Outstanding ................... 4,197,722 4,309,111 ----------- ------------ Total Partners' Capital .................... 4,150,042 4,262,556 ----------- ------------ Total Liabilities and Partners' Capital .... $ 5,294,422 $ 4,961,994 =========== ============ See Accompanying Notes to Financial Statements 3
TMP INLAND EMPIRE V, LTD. A California Limited Partnership Statements of Operations (Unaudited) Three Months Ended September 30, September 30, 2000 1999 ------------ ------------ Income Interest .................................... $ 1,220 $ 722 -------- --------- Total Income ..................................... 1,220 722 -------- --------- Expenses Accounting & Financial Reporting ............ 7,626 4,626 Outside Professional Services ............... 11,328 5,418 General & Administrative ................... 2,323 4,273 Interest .................................... 17,030 9,518 -------- --------- Total Expenses ................................... 38,307 23,835 -------- --------- Net Loss ......................................... $(37,087) $(23,113) ======== ========= Allocation of Net Loss (Note 4): General Partners, in the Aggregate: ......... $ (371) $ (231) ======== ========= Limited Partners, in the Aggregate: ......... $(36,716) $(22,882) ======== ========= Limited Partners, per Equity Unit: .......... $ (3.67) $ (2.29) ======== ========= See Accompanying Notes to Financial Statements 4
TMP INLAND EMPIRE V, LTD. A California Limited Partnership Statements of Operations (Unaudited) Nine months Ended September 30, September 30, 2000 1999 ------------ ------------ Income Interest .................................... $ 1,925 $ 2,593 --------- ---------- Total Income ..................................... 1,925 2,593 --------- ---------- Expenses Accounting & Financial Reporting ............ 31,549 23,747 Outside Professional Services ............... 29,634 18,041 General & Administrative ................... 8,440 12,437 Interest .................................... 44,016 27,017 --------- ---------- Total Expenses ................................... 113,639 81,242 Loss Before Taxes ................................ (111,714) (78,649) State Franchise Tax ......................... (800) (800) --------- ---------- Net Loss ......................................... $(112,514) $ (79,449) ========= ========== Allocation of Net Loss (Note 4): General Partners, in the Aggregate: ......... $ (1,125) $ (795) ========= ========== Limited Partners, in the Aggregate: ......... $(111,389) $ (78,654) ========= ========== Limited Partners, per Equity Unit: .......... $ (11.14) $ (7.87) ========= ========== See Accompanying Notes to Financial Statements 5
TMP INLAND EMPIRE V, LTD A California Limited Partnership Statement of Cash Flows (unaudited) Nine months Ended September 30, September 30, 2000 1999 ------------ ------------ Cash Flows from Operating Activities: Net Loss ............................................. $(112,514) $ (79,449) Adjustments to Reconcile Net Loss to Net Cash (Used in) Provided By Operating Activities: Increase in Due to Affiliates ................... 167,481 131,223 (Increase) Decrease in Prepaid & Other Expenses . (28,225) 2,538 Increase (Decrease) in A/P & Accrued Expenses ... 2,700 (38) (Decrease) Increase in Property Taxes Payable ... (40,239) 13,120 --------- ---------- Net Cash (Used In) Provided By Operating Activities ........... (10,797) 67,394 --------- ---------- Cash Flows from Investing Activities: Increase in Investment in Unimproved Land ....... (105,670) (87,587) --------- ---------- Net Cash Used In Investing Activities ......... (105,670) (87,587) --------- ---------- Cash Flows from Financing Activities: Proceeds received from Notes Payable ............ 315,000 0 Payments received from Note Receivable .......... 26,172 24,407 --------- ---------- Net Cash Provided By financing activities .... 341,172 24,407 --------- ---------- Net Increase in Cash ................................. 224,705 4,214 Cash, Beginning of Period ............................ 2,552 445 --------- ---------- Cash, End of Period .................................. $ 227,257 $ 4,659 ========= ========== Supplemental Disclosure of Cash Flow Information: Cash Paid for Taxes .................................. $ 800 $ 800 ========= ========== Cash Paid for Interest ............................... $ 118,630 $ 3,854 ========= ========== See Accompanying Notes to Financial Statements 6
TMP INLAND EMPIRE V, LTD. A California Limited Partnership Notes to the Financial Statements September 30, 2000 (Unaudited) Note 1 - General and Summary of Significant Accounting Policies General - TMP Inland Empire V, Ltd. (the Partnership) was organized in 1989 in ------- accordance with the provisions of the California Uniform Limited Partnership Act for the purpose of acquiring, developing and operating real property in the Inland Empire area of Southern California. Accounting Method - The Partnership's policy is to prepare its financial ---------- ------ statements on the accrual basis of accounting. Investment in Unimproved Land - Investment in unimproved land is stated at the ---------- -- ---------- ---- lower of cost or fair value. All costs associated with the acquisition of a property are capitalized. Additionally, the Partnership capitalizes all 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, if any, when properties are sold. Syndication Costs - Syndication costs (such as commissions, printing, and legal ----------- ----- fees) totaling $1,081,818 represent costs incurred to raise capital and, accordingly, are recorded as a reduction in partners' capital (see Note 3). Use of Estimates - The preparation of financial statements in conformity with --- -- --------- generally accepted accounting principles requires management 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 the reported amounts of 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 in that geographical area. The Partnership attempts to mitigate any potential risk by continually monitoring the market conditions and holding the land parcels through any periods of declining market conditions. Income Taxes - The entity is treated as a partnership for income tax purposes ------ ----- and accordingly 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 payable annually by the Partnership is $800. 7
TMP INLAND EMPIRE V, LTD. A California Limited Partnership Notes to the Financial Statements September 30, 2000 (Unaudited) Note 2 - Organization of the Partnership The Partnership was originally formed with TMP Properties (A California General partnership) and TMP Investments, Inc. (A California Corporation) as the general partners ("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 portion thereof, either alone or in conjunction with a joint venture partner. A portion of one parcel was sold in 1992 and the proceeds were retained for working capital. During 1993, the Partnership foreclosed on property underlying a note receivable and subsequently sold the property. During 1995, the Partnership sold a portion of one parcel and received a note for $141,000. 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 10,000 units at $1,000 each to qualified investors. As of December 31, 1990, all 10,000 units had been sold for total limited partner contributions of $10,000,000. There have been no contributions made by the General Partners since its formation. 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 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 six percent per annum based on their adjusted capital account balances. At that point, remaining profits, losses and cash distributions are allocated 85 percent to the limited partners and 15 percent to the General Partners. There were no distributions in 2000 or 1999. 8
TMP INLAND EMPIRE V, LTD. A California Limited Partnership Notes to the Financial Statements September 30, 2000 (Unaudited) Note 5 - Agreements with PacWest Inland Empire, LLC (PacWest) In March 1998, the General Partners entered into an agreement (the Financing Agreement) with PacWest, a Delaware Limited Liability Company, whereby PacWest paid a total of $300,000 to the General Partners of the Partnership and ten other related partnerships (the TMP Land Partnerships). In addition, PacWest agreed to pay up to an additional $300,000 for any deficit capital accounts for these 11 partnerships in exchange for the rights to the General Partners' distributions; referred to as a "distribution fee" as defined by the Financing Agreement. In addition, PacWest has agreed to loan and/or secure a loan for the TMP Land Partnerships in the amount of $2,500,000. Loan proceeds will be allocated among the TMP Land Partnerships, based on partnership needs, from recommendations made by PacWest, and under the approval and/or direction of the general partners. A portion of these funds will be loaned to the Partnership at 12% simple interest beginning April 1, 1998. The borrowings are secured by the Partnership's properties, and funds will be loaned, as needed, in the opinion of the General Partners. These funds are not to exceed 50% of the 1997 appraised value of the properties, and will primarily be used to pay for on-going property maintenance, pay down existing debt, back property taxes and appropriate entitlement costs. As of September 30, 2000 the TMP Land Partnerships have been funded approximately $3,080,000 by PacWest. An addendum to the Financing Agreement which states PacWest shall be entitled to increase the aggregate amount of the loan by written agreement is currently being approved by both the General Partners and PacWest. Upon signing of this addendum, PacWest, can, at their option and with the written agreement of the General Partners, make additional advances and the aggregate amount of cash loaned to the TMP Land Partnerships is not limited to a maximum of $2,500,000. In April 1998, PacWest entered into the Management Agreement with the General Partners to provide the Partnership with overall management, administrative and consulting services. PacWest currently contracts with third party service providers to perform certain of the financial, accounting, and investor relations' services for the Partnership. PacWest will charge a fee for its administrative services equal to an amount 9
TMP INLAND EMPIRE V, LTD. A California Limited Partnership Notes to the Financial Statements September 30, 2000 (Unaudited) Note 5 - Agreements with PacWest Inland Empire, LLC (PacWest) (continued) not to exceed the average reimbursements to the General Partners for such services over the past five years. As of September 30, 2000 and December 31, 1999, the Partnership has a payable of approximately $585,599 and $418,118, respectively, including interest, due to PacWest related to the aforementioned agreements. Note 6 - Related Party Transactions Syndication costs (see Notes 1 and 3) netted against partners' capital contributions include $1,000,000 of 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 $617,562 paid in prior years to TMP Properties, TMP Investments, Inc., and the general partners, for services rendered in connection with the acquisition of the properties. At September 30, 2000, $5,400 is payable to Regal Realty, a company wholly owned by Scott E. McDaniel, for services rendered relating to sales of properties prior to 1990. 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 this amount 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 contributions. As of September 30, 2000 the limited partners had not received and do not expect to receive such a return and therefore this amount is not currently due. Approximately $7,000 of property service fees were paid by an affiliated partnership, TMP Inland Empire VI, Ltd. on behalf of the Partnership during the nine-month period ended September 30, 1999. This amount was reimbursed by the Partnership in August 1999. See Note 5 regarding information on management of the Partnership during 2000. 10
TMP INLAND EMPIRE V, LTD. A California Limited Partnership Notes to the Financial Statements September 30, 2000 (Unaudited) Note 7 - Note Payable On July 22, 1996, the Partnership borrowed $125,000 from a private mortgage company. The note is secured by a deed of trust on a parcel of land owned by the Partnership in Victorville, California. The note was originally due on August 1, 1999. The Partnership paid an extension fee of approximately $5,400 to extend the due date of the note until August 1, 2002. The interest rate was reduced from 13% to 12% per annum and is payable in monthly installments of $1,250. As of September 30, 2000, $72,239 of interest has been paid and capitalized to investment in unimproved land. On July 11, 2000, the Partnership borrowed $140,000 from a private party. The note is secured by a deed of trust on a parcel of land owned by the Partnership in Victorville, California. The note is due on August 8, 2003. Fees for the origination of the note were paid by the Partnership in the amount of approximately $4,260. Interest accrues at 12 percent per annum payable in monthly installments of $1,400 starting September 8, 2000. As of September 30, 2000, $2,800 of interest has been capitalized to investment in unimproved land. On August 10, 2000, the Partnership borrowed $175,000 from a private party. The note is secured by a deed of trust on a parcel of land owned by the Partnership in Victorville, California. The note is due on October 1, 2003. Fees for the origination of the note were paid by the Partnership in the amount of approximately $11,660. Interest accrues at 13.5 percent per annum payable in monthly installments of $1,969 starting November 1, 2000. As of September 30, 2000, $1,575 of interest has been capitalized to investment in unimproved land. Note 8 - Note Receivable The Partnership sold a parcel of land in 1995 and as part of the sale proceeds received a note for $141,000. The note is secured by a deed of trust and is due in September 2000. Interest accrues at 7 percent per annum, and monthly payments of principal and interest of $3,000 began in August 1996. During the nine-month period ended September 30, 2000, approximately $829 of interest was received on this note receivable. 11
TMP INLAND EMPIRE V, LTD. A California Limited Partnership Notes to the Financial Statements September 30, 2000 (Unaudited) Note 9 - Property Taxes Payable A portion of the property taxes payable of $107,896 relates to property taxes due for various periods from 1994 to 1997 for which the Partnership has entered into a payment plan. The plan called for a payment in April 2000 and for three payments in April in subsequent years. The April 2000 payment of approximately $63,000 was paid by the Partnership. The additional liability relates to current property taxes that were due in April 2000, not yet paid. Approximate amounts due on the payment plan are as follows: April 10, 2001 $ 49,480 April 10, 2002 24,740 April 10, 2003 24,740 ------- $98,960 ===================================================== These amounts will increase as interest accrues at a monthly rate of 1.5% on the remaining balance. 12
TMP INLAND EMPIRE V, LTD. A California Limited Partnership September 30, 2000 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. The following discussion and analysis provides information that the Partnership's management believes is relevant to an assessment and understanding of the Partnership's results of operations and financial condition. This discussion should be read in conjunction with the financial statements and footnotes, which appear elsewhere in this report. This Quarterly Report on Form 10-QSB contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which are subject to the "safe harbor" created by that section. Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates" and similar expressions or variations of such words are intended to identify forward-looking statements, but are not the exclusive means of identifying forward-looking statements in this report. Additionally, statements concerning future matters such as the features, benefits and advantages of the Partnership's property regarding matters that are not historical are forward-looking statements. The Partnership's actual future results could differ materially from those projected in the forward-looking statements. The Partnership assumes no obligation to update the forward-looking statements. Readers are urged to review and consider carefully the various disclosures made by the Partnership in this report, which attempts to advise interested parties of the risks and factors that may affect the Partnership's business, financial condition and results of operations. Results of Operations --------------------- The following discussion should be read in conjunction with the attached financial statements and notes thereto and with the Partnership's audited financial statements and notes thereto for the fiscal year ended December 31, 1999. During the period from inception (November 16, 1989) through December 31, 1990, the Partnership was engaged primarily in the sale of Units of Limited Partnership Interest ("Units") and the investment of the subscription proceeds to purchase parcels of unimproved real property. 13
TMP INLAND EMPIRE V, LTD. A California Limited Partnership September 30, 2000 The Partnership revenues during the fiscal years ended December 31, 1996-1999; consisted primarily of interest income earned on funds held, note receivable interest payments and interest income from the forfeiture by potential buyers of non-refundable escrow deposits. In 1995, the Partnership sold 29 acres of the "Victorville 40" property for a loss of $561,841. The sale generated cash of $69,327 and a note for $141,000. In addition, a nominal amount of interest income was earned on funds held during 1995. The Partnership recognized a loss in 1996 due to the write-down in value of the Partnership land. The decline in land value was due mainly to the downturn in Southern California's real estate market. The Partnership's management believes that inflation has not had a material effect on the Partnership's results of operations or financial condition. Fiscal Quarters Ended September 30, 2000 and 1999 ------------------------------------------------- Partnership revenues during the three and nine-month periods ended September 30, 2000 and 1999 consisted primarily of interest income. No properties were sold during the periods presented. Investing activities for the nine months ended September 30, 2000 and 1999 used approximately $106,000 and $88,000 of cash, respectively; mainly to pay development and carrying costs of the land held for investment. Financing activities for the nine months ended September 30, 2000 and 1999 provided approximately $341,000 and $24,000, respectively from the payments received on the note receivable and proceeds received on the notes payable. Total expenses for the three months ended September 30, 2000 compared with the three months ended September 30, 1999, increased by approximately $14,500 due primarily to increases in Outside Professional Services and Interest Expense. Interest Expense increased by $7,512 pursuant to the Financing Agreement with PacWest entered into April 1, 1998. PacWest contracted with a consultant to provide the Partnership with certain expertise. The addition of this consultant is the primary explanation for the increase in Outside Professional Services for the three-month period ended September 30, 2000. These increases were partially offset by a decrease in General & Administrative Expenses of approximately $1,950 due to reductions in Office Supplies and Postage & Copies. Total expenses for the nine months ended September 30, 2000 compared with the nine months ended September 30, 1999, increased by approximately $32,400 due primarily to increases in Accounting & Financial Reporting, Outside Professional Services & Interest. 14
TMP INLAND EMPIRE V, LTD. A California Limited Partnership September 30, 2000 Interest Expense increased by $16,999 pursuant to the Financing Agreement with PacWest entered into April 1, 1998. Accounting & Financial Reporting increases are directly related to the timing and the costs incurred to prepare, review and file the appropriate financial information for the Partnership. During the nine-month period ended September 30, 2000 PacWest contracted with a consultant to provide the Partnership with certain expertise. The addition of this consultant is the primary explanation for the increase in Outside Professional Services for the nine-month period ended September 30, 2000. These increases were partially offset by a decrease in General & Administrative Expenses of approximately $4,000 due to reductions in Office Supplies and Postage & Copies. Due to Affiliates increases as the Partnership pays its' operating costs. As discussed above, and pursuant to the Financing Agreement, all funds required to pay for operating costs are received from PacWest. Property Taxes Payable decreased by approximately $40,000 primarily due to the payment of approximately $63,000 due on the installment plan discussed in Note 9. The decrease was partially offset by an increase due to current property taxes that were due in April 2000 not yet paid and the accrual of the 1.5% monthly interest on the remaining balance of the installment plan taxes. The Partnership had nine properties as of September 30, 2000 that are being held for appreciation and resale. Upon the sale of each property, the Partnership intends to payback PacWest loans, including interest, and then distribute the sales proceeds, less any reserves needed for operations, to the partners. As of September 30, 2000, seven of the Partnerships' properties were listed for sale. Sales prices range from $44,000 to $500,000. Liquidity and Capital Resources ------------------------------- The Partnership has raised a total of $8,918,182, net of syndication costs, from the sale of Units. During the period from inception through December 31, 1995, the Partnership acquired a total of fourteen properties for all cash at a total expenditure of $8,891,712. The Partnership capitalized the acquisition costs of the property and direct carrying costs, such as interest and property taxes. The Partnership does not intend to acquire any additional properties. The remaining nine properties are being held for resale. Upon sale, if any, the Partnership intends to distribute the sales proceeds, less any reserves needed for operations, to the partners. 15
TMP INLAND EMPIRE V, LTD. A California Limited Partnership September 30, 2000 On July 22, 1996, the Partnership borrowed $125,000 from a private mortgage company. The note is secured by a deed of trust on a parcel of land owned by the Partnership in Victorville, California. The note was originally due on August 1, 1999. The Partnership paid an extension fee of approximately $5,400 to extend the due date of the note until August 1, 2002. The interest rate was reduced from 13% to 12% per annum and is payable in monthly installments of $1,250. As of September 30, 2000, $72,239 of interest has been paid and capitalized to investment in unimproved land. On July 11, 2000, the Partnership borrowed $140,000 from a private party. The note is secured by a deed of trust on a parcel of land owned by the Partnership in Victorville, California. The note is due on August 8, 2003. Fees for the origination of the note were paid by the Partnership in the amount of approximately $4,260. Interest accrues at 12 percent per annum payable in monthly installments of $1,400 starting September 8, 2000. As of September 30, 2000, $2,800 of interest has been capitalized to investment in unimproved land. On August 10, 2000, the Partnership borrowed $175,000 from a private party. The note is secured by a deed of trust on a parcel of land owned by the Partnership in Victorville, California. The note is due on October 1, 2003. Fees for the origination of the note were paid by the Partnership in the amount of approximately $11,660. Interest accrues at 13.5 percent per annum payable in monthly installments of $1,969 starting November 1, 2000. As of September 30, 2000, $1,575 of interest has been capitalized to investment in unimproved land. The Partnership owns land in the Riverside and San Bernardino counties. That region of Southern California experienced a significant economic recession that has substantially eroded the value of real estate in that area. The region is beginning to show some signs of recovery; however, the recovery has been very slow. In March 1998, the General Partners entered into the Financing Agreement with PacWest, whereby PacWest paid a total of $300,000 to the General Partners of the Partnership and the TMP Land Partnerships. PacWest agreed to pay up to an additional $300,000 for any deficit capital accounts for these 11 partnerships in exchange for the rights to distributions from the general partners; referred to as a "distribution fee" as defined by the Financing Agreement. In addition, PacWest has agreed to loan and/or secure a loan for the TMP Land Partnerships in the amount of $2,500,000. Loan proceeds will be allocated among the TMP Land Partnerships, based on partnership needs, from recommendations made by PacWest, and under the approval and/or direction of the general partners. A portion of these funds will be loaned to the Partnership at 12% simple interest beginning April 1, 1998. The borrowings are secured by the Partnership's properties, and the funds will be loaned, as needed, in the opinion of the general partners. These funds are not to exceed 16
TMP INLAND EMPIRE V, LTD. A California Limited Partnership September 30, 2000 50% of the 1997 appraised value of the properties, and will primarily be used to pay for on-going property maintenance, reduction of existing debt, property taxes in arrears, appropriate entitlement costs and Partnership operations. As of September 30, 2000 the TMP Land Partnerships have been funded approximately $3,080,000 by PacWest. An addendum to the Financing Agreement which states PacWest shall be entitled to increase the aggregate amount of the loan by written agreement is currently being approved by both the General Partners and PacWest. Upon signing of this addendum, PacWest, can, at their option and with the written agreement of the General Partners, make additional advances and the aggregate amount of cash loaned to the TMP Land Partnerships is not limited to a maximum of $2,500,000. Pursuant to the Financing Agreement, PacWest has acquired the General Partners' unsubordinated 1% interest in the Partnership and assumed responsibility for all partnership administration while not replacing any of the General Partners. In April 1998, PacWest entered into the Management Agreement with the General Partners to provide the Partnership with overall management, administrative and consulting services. PacWest currently contracts with third party service providers to perform certain of the financial, accounting, and investor relations' services for the Partnership. PacWest is paid an annual fee of $11,520 for its administrative services. 17
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: November 15, 2000 TMP INLAND EMPIRE V, LTD. A California Limited Partnership By: TMP Investments, Inc., A California Corporation as Co-General Partner By: \s\ William O. Passo ------------------------------------- William O. Passo, President By: \s\ Anthony W. Thompson ------------------------------------- Anthony W. Thompson, Exec. Vice President By: TMP Properties, A California General Partnership as Co-General Partner By: \s\ William O. Passo ------------------------------------- William O. Passo, Partner By: \s\ Anthony W. Thompson ------------------------------------- Anthony W. Thompson, Partner By: \s\ Scott E. McDaniel ------------------------------------- Scott E. McDaniel Partner By: JAFCO, Inc., A California Corporation as Chief Accounting Officer By: \s\ John A. Fonseca ------------------------------------- John A. Fonseca, President 18
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