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 [ ]
<PAGE>
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
<PAGE>
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
<PAGE>
TMP INLAND EMPIRE IV, LTD.
(A California Limited Partnership)
Balance Sheet
December 31, 1997
<TABLE>
<CAPTION>
Assets
------
1997
----
<S> <C>
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
</TABLE>
<PAGE>
TMP INLAND EMPIRE IV, LTD.
(A California Limited Partnership)
Statement of Income
For the Year Ended December 31, 1997
<TABLE>
<CAPTION>
1997
----
<S> <C>
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-
</TABLE>
<PAGE>
TMP INLAND EMPIRE IV, LTD.
(A California Limited Partnership)
Statement of Partners' Capital
For the Year Ended December 31, 1997
<TABLE>
<CAPTION>
General Limited
Partners Partners Total
<S> <C> <C> <C>
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
</TABLE>
<PAGE>
<TABLE>
TMP INLAND EMPIRE IV, LTD.
(A California Limited Partnership)
Statement of Cash Flows
For the Year Ended December 31, 1997
<CAPTION>
1997
----
<S> <C>
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
</TABLE>
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
TMP INLAND EMPIRE IV, LTD.
(A California Limited Partnership)
Notes to Financial Statements
December 31, 1997
<TABLE>
<CAPTION>
Note 7 - Sale and related cost of property sold
The following summarizes properties sold in 1997.
1997
Victorville
10 acres
<S> <C>
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)
==========
</TABLE>
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:
<TABLE>
<CAPTION>
<S> <C> <C>
1995 $ 6,310
1996 27,784
1997 89,953
--------
$124,047
========
</TABLE>
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.
<PAGE>
<TABLE>
<CAPTION>
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
--------------------- ------------ ----- ------------ ----- -------- ----------- ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
</TABLE>
<TABLE>
<CAPTION>
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
- --------------------- ------------ ----- ------------ ----- -------- ------------ ------------ -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
</TABLE>
<TABLE>
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
<CAPTION>
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
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
</TABLE>
