<PAGE>
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, 1999
Commission File No. 0-19933
TMP INLAND EMPIRE IV, LTD.
A CALIFORNIA LIMITED PARTNERSHIP
(Name of small business issuer as specified in its charter)
CALIFORNIA 33-0341829
(State or other jurisdiction (I.R.S.Employer Identification No.)
of 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
<PAGE>
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, 1999 and December 31, 1998, Statements of
Income for the three and nine months ended September 30, 1999 and 1998,
Statements of Cash Flows for the nine months ended September 30, 1999 and 1998.
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, 1999 and 1998 (b)
the financial position at September 30, 1999 and (c) the cash flows for the nine
months ended September 30, 1999 and 1998. Interim results are not necessarily
indicative of results for a full year.
The balance sheet presented as of December 31, 1998 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.
<PAGE>
<TABLE>
<CAPTION>
TMP INLAND EMPIRE IV, LTD.
A California Limited Partnership
Balance Sheets
September 30, December 31,
1999 1998
(unaudited) __________
----------
Assets
<S> <C> <C>
Cash $ 1,914 $ 982
Prepaid Expenses 0 3,374
Investment in Unimproved Land, net (Note 1) 2,556,501 2,433,419
------------ ------------
Total Assets $ 2,558,415 $ 2,437,775
============ ============
Liabilities and Partners Capital
Accounts Payable $ 512 $ 0
Due to Affiliates (Note 5and 6) 406,306 218,645
Property Taxes Payable (Note 8) 42,834 29,264
Franchise Tax Payable 800 800
Commission Payable to Affiliate (Note 6) 70,560 70,560
Note Payable (Note 7) 190,000 190,000
------------ ------------
Total Liabilities 711,012 509,269
General Partners (57,241) (56,430)
Limited Partners; 8,500 Equity
Units Authorized and Outstanding 1,904,644 1,984,936
------------ ------------
Total Partners' Capital 1,847,403 1,928,506
------------ ------------
Total Liabilities and Partners' Capital $ 2,558,415 $ 2,437,775
============ ============
</TABLE>
See Accompanying Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
TMP INLAND EMPIRE IV, LTD.
A California Limited Partnership
Statements of Income
(Unaudited)
Three Months Ended
September 30 September 30
1999 1998
------------ ------------
<S> <C> <C>
Income
Interest $ 0 $ 0
------------ ------------
Total Interest Income 0 0
Expenses
Accounting & Financial Reporting 3,692 10,508
Outside Professional Services 6,225 12,612
General & Administrative 3,170 20,009
Interest 10,725 985
------------ ------------
Total Expenses 23,812 44,114
------------ ------------
Loss Before Taxes (23,812) (44,114)
State Franchise Tax 0 0
------------ ------------
Net Loss $ (23,812) $ (44,114)
============ ============
Allocation of Net Loss (Note 4):
General Partners, in the Aggregate: $ (238) $ (441)
============ ============
Limited Partners, in the Aggregate: $ (23,574) $ (43,673)
============ ============
Limited Partners, per Equity Unit: $ (2.80) $ (5.14)
============ ============
</TABLE>
See Accompanying Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
TMP INLAND EMPIRE IV, LTD.
A California Limited Partnership
Statements of Income
(Unaudited)
Nine months ended
September 30 September 30
1999 1998
------------ ------------
<S> <C> <C>
Income
Interest $ 0 $ 392
------------ ------------
Total Interest Income 0 392
Expenses
Accounting & Financial Reporting 17,735 22,133
Outside Professional Services 20,018 26,989
General & Administrative 9,697 29,842
Interest 32,853 1,758
------------ ------------
Total Expenses 80,303 80,722
------------ ------------
Loss Before Taxes (80,303) (80,330)
State Franchise Tax 800 800
------------ ------------
Net Loss $ (81,103) $ (81,130)
============ ============
Allocation of Net Loss (Note 4):
General Partners, in the Aggregate: $ (811) $ (811)
============ ============
Limited Partners, in the Aggregate: $ (80,292) $ (80,319)
============ ============
Limited Partners, per Equity Unit: $ (9.45) $ (9.45)
============ ============
</TABLE>
See Accompanying Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
TMP INLAND EMPIRE IV, LTD
A California Limited Partnership
Statement of Cash Flows
(unaudited)
Nine months ended
September 30 September 30
1999 1998
------------ ------------
<S> <C> <C>
Cash Flows from Operating Activities:
Net Loss $ (81,103) $ (81,130)
Adjustments to Reconcile Net Loss to net cash
Provided By (Used In) Operating Activities:
Increase in Due to Affiliates 187,662 100,969
Decrease (Increase) in Prepaid Expenses 3,374 (8,923)
Decrease in Property Taxes Payable 13,570 (26,344)
Increase in Accounts Payable 512 4,618
------------ ------------
Net Cash Provided By (Used In)
Operating Activities 124,015 (10,810)
Cash Flows from Investing Activities:
Increase in Investment in Unimproved Land (123,082) (60,069)
------------ ------------
Net Cash Used in Investing Activities (123,082) (60,069)
------------ ------------
Increase (Decrease) in Cash 932 (70,879)
Cash, Beginning of Period 982 75,651
------------ ------------
Cash, End of Period $ 1,914 $ 4,772
============ ============
Supplemental Disclosure of Cash Flow
Information:
Cash Paid for Taxes $ 800 $ 800
============ ============
Cash Paid for Interest $ 5,700 $ 5,700
============ ============
</TABLE>
See Accompanying Notes to Financial Statements
<PAGE>
TMP INLAND EMPIRE IV, LTD
a California Limited Partnership
Notes to the Financial Statements
For the Nine months ended September 30, 1999
(Unaudited)
Note 1 - General and Summary of Significant Accounting Policies
General - TMP Inland Empire IV, 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 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).
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 Partnership is treated as a general and limited 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.
<PAGE>
TMP INLAND EMPIRE IV, LTD
a California Limited Partnership
Notes to the Financial Statements
For the Nine months ended September 30, 1999
(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. 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 nine 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. 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 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 1999 or 1998.
Note 5 - Agreements with PacWest
In March 1998, the general partners of the Partnership entered into an agreement
(the Financing Agreement) with PacWest Inland Empire, LLC (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 the TMP Land Partnerships in
exchange for the rights to the general partners' distributions; referred to as a
"distribution fee" as defined by the Financing Agreement. Pursuant to a
management, administrative, and consulting agreement (the Management Agreement),
PacWest has acquired the general partners' unsubordinated 1% interest in the
Partnership
<PAGE>
TMP INLAND EMPIRE IV, LTD
a California Limited Partnership
Notes to the Financial Statements
For the Nine months ended September 30, 1999
(Unaudited )
and assumed responsibility for all partnership administration while not
replacing any of the general partners.
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
over a 24-month period 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.
PacWest, can, at their option, make additional advances with the agreement of
the general partners; however, the aggregate amount of cash loaned to the TMP
Land Partnerships is limited to a maximum of $2,500,000.
In April 1998, PacWest entered into the Management Agreement with the general
partners of the Partnership 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 not to exceed the average
reimbursements to the general partners for such services over the past five
years. As of September 30, 1999, the Partnership has an amount due of
approximately $406,000 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 $850,000 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 $365,000 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.
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 partners and an
affiliated company of the general partner for office, secretarial and
advertising expenses. At September 30, 1999 the Partnership had a payable of
$203 to the general partner and the affiliated company.
At September 30, 1999, $70,560 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
<PAGE>
TMP INLAND EMPIRE IV, LTD
a California Limited Partnership
Notes to the Financial Statements
For the Nine months ended September 30, 1999
(Unaudited )
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, 1999 the limited partners
had not received and do not expect to receive such a return and therefore this
amount is not currently due.
See Note 5 regarding information on management of the Partnership during 1999.
Note 7 - Note Payable
On March 1, 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 was due on February 1, 1999, but was extended
until June 1, 2001. Fees for the refinance of the note were paid by the
Partnership in the amount of approximately $10,000. Interest accrues at 12
percent per annum payable in monthly installments of $1,900 starting March 1,
1996. As of September 30, 1999, $81,827 of interest has been capitalized to
investment in unimproved land.
Note 8 - Property Taxes Payable
A portion of the property taxes payable of $42,834 relates to property taxes due
for various periods from 1994 to 1997 for which the Partnership has entered into
a payment plan. The plan calls for payment of 25% of the balance due to be paid
in April 2000, and 33%, 50% and 100% in subsequent years. The additional
liability relates to current property taxes that will be paid in December 1999.
Approximate amounts due on the payment plan are as follows:
April 10, 2000 $7,321
April 10, 2001 7,321
April 10, 2002 7,321
April 10, 2003 7,301
-----
$29,264
These amounts will increase annually as interest accrues at a rate of 1.5% on
the remaining balance.
Note 9 - Year 2000 Issue (unaudited)
Like other organizations and individuals around the world, the Partnership could
be adversely affected if the computer systems it uses and those used by the
Partnership's major customers and vendors do not properly process and calculate
date-related information and data from and after January 1, 2000. This is
commonly known as the "Year 2000 Issue." Management is assessing its computer
systems and the systems compliance issues of its major service providers. Based
on information available to management, the Partnership's major customers and
vendors are taking steps that they believe are reasonably designed to address
the Year 2000 Issue with respect to computer systems that they use. At this
time, however, there can be no assurance that these steps will be sufficient,
and the failure of a timely completion of all necessary procedures could have a
material adverse effect on the Partnership's operations. Management will
continue to monitor the status of, and its exposure to, this issue.
<PAGE>
TMP INLAND EMPIRE IV, LTD.
A California Limited Partnership
For the nine months ended September 30, 1999
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. Such statements are subject to
certain risks and uncertainties, including without limitation those discussed in
"Risk Factors" sections of this report. 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,
1998.
During the period from inception (June 7, 1989) through December 31, 1989, the
Partnership was engaged primarily in the sale of Units of Limited Partnership
Interest and the investment of the subscription proceeds to purchase parcels of
unimproved real property. The Partnership sold one Property during 1989 for a
gross profit, net of all acquisition, carrying and selling costs, of $272,129,
and one Property in 1990 for a gross profit, net of all acquisition, carrying
and selling costs, of $315,081. Other revenues received during the fiscal years
ended December 31, 1994-1998, consisted primarily of interest income and income
from the forfeiture by potential buyers of non-refundable escrow deposits. In
1996 the Partnership experienced a loss 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.
In compliance with Statement of Financial Accounting Standards No. 121
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Disposed of (SFAS 121), the 1996 financial statements reported an expense for
the decline in fair value of unimproved land of $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.
Pursuant to additional review by management and the predecessor accounting firm,
it was determined that SFAS 121 does not provide for recording appreciation in
fair value of a real estate asset. Therefore, the predecessor independent
accounting firm restated the 1997 financial statements on August 3, 1998 to
remove the appreciation in fair value of land.
<PAGE>
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, 1999 and 1998
There was no revenue of the Partnership during the three and nine-month periods
ended September 30, 1999 or the three-month period ended September 30, 1998.
Partnership revenues during the nine-month period ended September 30, 1998
consisted of interest income.
No properties were sold during the periods presented.
Investing Activities used approximately $123,000 for the nine months ended
September 30, 1999 and $60,000 for the nine months ended September 30, 1998,
most of which was used to pay development and carrying costs of the unimproved
land held for investment.
Total expenses for the three months ended September 30, 1999 compared with the
three months ended September 30, 1998, decreased by approximately $20,000, or
85%, due primarily to the decrease in Accounting and Financial Reporting,
Outside Professional Services and General & Administrative Expenses. These
decreases were partially offset by an increase in Interest Expense. Continuity
and experience with the internal accounting staff and external accountant
reviews is the explanation for the decrease in Accounting and Financial
Reporting of approximately $6,800. Outside Professional Services decrease is
primarily related to certain insurance expenses incurred during 1998 yet not in
1999. General and Administrative costs decreased during the period by $16,839
due to certain services provided during the period ended September 30, 1998 by
PacWest pursuant to the Management Agreement that were not necessary during the
same period in 1999. Interest Expense increased by approximately $9,700 or 91%
pursuant to the Financing Agreement with PacWest entered into April 1, 1998.
Total expenses for the nine months ended September 30, 1999 compared with the
nine months ended September 30, 1998, decreased by approximately $400, or less
than 1%, due primarily to the decrease in Accounting and Financial Reporting,
Outside Professional Services and General & Administrative Expenses. These
decreases were partially offset by an increase in Interest Expense. Continuity
and experience with the internal accounting staff and external accountant
reviews is the explanation for the decrease in Accounting and Financial
Reporting of approximately $4,400. Outside Professional Services decrease is
primarily related to certain insurance expenses incurred during 1998 yet not in
1999. General and Administrative costs decreased during the period by $20,145
due to certain services provided during the period ended September 30, 1998 by
PacWest pursuant to the Management Agreement that were not necessary during the
same period in 1999. Interest Expense increased by approximately $31,100 or 95%
pursuant to the Financing Agreement with PacWest entered into April 1, 1998and
therefore only three months of interest expense was incurred during the period
ended September 30, 1998.
A decrease of $3,374 or 100% was incurred relating to Prepaid Expenses due to
the requirement of certain vendors requesting prepayment of their fees during
1998 for 1999 services. No such request was made during the period ended
September 30, 1999.
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.
The Partnership had five properties as of September 30, 1999 that are being held
for appreciation and resale. Upon the sale of each property, the Partnership
intends to distribute the sales proceeds, less any reserves needed for
operations, to the partners.
<PAGE>
Liquidity and Capital Resources
The Partnership has raised a total of $7,571,386, net of syndication costs, from
the sale of limited partnership units. During the period from inception through
December 31, 1995, the Partnership acquired a total of nine Properties for all
cash at a total expenditure of $7,172,389. 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 five 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.
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.
On March 1, 1996, the Partnership procured a loan in the amount of $190,000,
secured by one of the properties. The note was due on February 1, 1999 and
management extended the note due date until June 2001.
In March 1998, the general partners of the Partnership entered into an agreement
(the Financing Agreement) with PacWest Inland Empire, LLC (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). 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
over a 24-month period 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 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.
PacWest, can, at their option, make additional advances with the agreement of
the general partners. However, the aggregate amount of cash loaned to the TMP
Land Partnerships is limited to a maximum of $2,500,000.
In April 1998, PacWest entered into a management, administrative and consulting
agreement (the Management Agreement) with the general partners of the
Partnership 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 $18,960
for its administrative services.
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.
RISK FACTORS
Year 2000 Compliance. Many currently installed computer systems and software
products are coded to accept only two digit entries in the date code field.
Beginning in the year 2000, these date code fields will need to accept four
<PAGE>
digit entries to distinguish 21st century dates. As a result, computer systems
and/or software used by organizations may need to be upgraded to comply with the
"Y2K" requirements. There is significant uncertainty in the software and
information services industries concerning the potential effects associated with
such compliance. While the Partnership believes that its systems are compatible
with Y2K applications, there can be no assurance that all partnership systems
will function properly in all operating environments and on all platforms. The
failure to comply with Y2K requirements by systems not designed by the
Partnership may also have a material adverse effect on the Partnership's
business, financial condition and results of operations. The Partnership has
developed and implemented a plan to identify and address potential difficulties
associated with Y2K issues and does not expect to expend any significant funds
as a result of these issues.
The Partnership utilizes a number of computer software programs and operating
systems across its organization including applications used in financial
business systems and various administrative functions. The Partnership has
established an action plan for addressing Year 2000 issues. As a general matter,
the Partnership is vulnerable to failures by third parties to address their own
Year 2000 issues. The Partnership relies heavily upon third parties for
financial services. There can be no assurance that the Partnership's suppliers
and other third parties will adequately address their Year 2000 issues, and any
such issues could have a material adverse affect upon the Partnership's
financial condition and results of operation.
The Partnership has not spent a material amount of financial resources to
remediate Year 2000 problems and does not anticipate that it will spend a
material amount of financial resources to remediate Year 2000 problems in the
future. The costs of such remediation will be part of the Partnership's general
and administrative expenses.
<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: October 15, 1999
TMP INLAND EMPIRE IV, LTD.
A California Limited Partnership
By: TMP Investments, Inc., a California Corporation as Co-General Partner
\s\ William O. Passo
By:___________________________________
William O. Passo, President
\s\ Anthony W. Thompson
By:__________________________________
Anthony W. Thompson, Exec. VP
By: TMP Properties, a California General Partnership as Co-General Partner
\s\ William O. Passo
By:___________________________________
William O. Passo, general Partner
\s\ Anthony W. Thompson
By:___________________________________
Anthony W. Thompson, general Partner
\s\ Scott E. McDaniel
By ____________________________________
Scott E. McDaniel
By: JAFCO, Inc., A California Corporation as Chief Accounting Officer
\s\ John A. Fonseca
By ____________________________________
John A. Fonseca, President
