The registrant is filing restated 1994-1997 financial statements. These
restatements reflect changes discussed in Note 7 to the consolidated financial
statements.
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 September 30, 1996
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 [ ]
TMP LAND MORTGAGE FUND, LTD
INDEX
PART IFINANCIAL INFORMATION Page
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets as of September 30, 1996
(unaudited) and December 31, 1995 3
Consolidated Statements of Operations for the Three
and Nine Months ended September 30, 1996 and 1995 (unaudited) 4-5
Consolidated Statements of Cash Flows for the
Nine Months ended September 30, 1996 and 1995 (unaudited) 6
Notes to Consolidated Financial Statements (unaudited) 7-8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9-12
PART II OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 2. Changes in Securities 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
2
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
TMP Land Mortgage Fund, LTD.
A California Limited Partnership
Consolidated Balance Sheets
September,
1996 December 31,
(unaudited) 1995
----------- -----------
Assets
------
Cash $ 502,894 $ 162,491
Mortgage Loans on Real Estate 0 3,320,000
Investment in Unimproved Land (net of
valuation allowance of $3,972,607 and
$3,882,530, respectively) 10,240,980 7,481,697
Accounts Receivable 129,051 157,966
Due from Affiliates 60,348 0
Investment in Joint Venture 1,552,276 1,155,867
-------------- -----------
Total Assets $ 12,485,549 $ 12,278,021
============== ===========
Liabilities and Partners' Capital
---------------------------------
Accounts Payable $ 0 $ 33,422
Property Taxes Payable 2,960,867 2,026,071
Accrued Expenses 0 800
Due to Affiliates 9,715 166,875
-------------- -----------
Total Liabilities 2,970,582 2,227,168
-------------- -----------
Minority Interest 223,073 35,136
Partners' Capital
General Partners (64,284) (57,046)
Limited Partners, 20,000 equity units
authorized; 15,715 units outstandin
as of September 30, 1996 and December 31, 1995 9,356,178 10,072,763
-------------- -----------
Total Partners' Capital 9,291,894 10,015,717
-------------- -----------
Total Liabilities and Partners' Capital $ 12,485,549 $ 12,278,021
============== ===========
See Accompanying Notes to Consolidated Financial Statements
3
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
September 30, September 30,
1996 1995
-------------- --------------
Income
- ------
Interest Income $ 92,588 $ 34,828
Joint Venture Income 17,347 0
Loss on Investments (168,861)
Other Income 1,900 900
------------- -------------
Total Income (57,026) 35,728
------------- -------------
Expenses
- --------
Loss on Decline in Market Value of Property 31,395 0
General & Administrative 0 11,899
Joint Venture Expense 0 0
------------- -------------
Total Expenses 31,395 11,899
------------- -------------
Net Income (Loss) Before Minority Interest (88,421) 23,829
Minority Interest (332) 0
------------- -------------
Net Income (Loss) $ (88,753) $ 23,829
============= =============
Allocation of Net Income (Loss)
General Partners $ (888) $ 238
============= =============
Limited Partners $ (87,865) $ 23,591
============= =============
Limited Partners, per unit $ (5.59) $ 1.51
============= =============
See Accompanying Notes to Consolidated Financial Statements
4
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
TMP Land Mortgage Fund, LTD.
A California Limited Partnership
Consolidated Statements of Operations
(Unaudited)
Nine Months Ended
September 30, September 30,
1996 1995
------------- -------------
Income
- ------
Interest Income $ 160,423 $ 441,130
Joint Venture Income 81,131 0
Loss on Investments (193,845) 0
Other Income 3,700 2,700
----------- ------------
Total Income 51,409 443,830
----------- ------------
Expenses
- --------
Loss on Decline in Market Value of Property 90,077 30,007
General & Administrative 1,020 36,231
Interest Expense 1,082 0
Joint Venture Expense 151 0
----------- ------------
Total Expenses 92,330 66,238
----------- ------------
Net Income (Loss) Before Minority Investment (40,921) 377,592
Minority Interest (332) 0
----------- ------------
Net Income (Loss) $ (41,253) $ 377,592
=========== ============
Allocation of Net Income (Loss)
General Partners $ (413) $ 3,776
=========== ============
Limited Partners $ (40,840) $ 373,816
=========== ============
Limited Partners, per unit $ (2.60) $ 23.79
=========== ============
See Accompanying Notes to Consolidated Financial Statements
5
TMP Land Mortgage Fund, LTD.
A California Limited Partnership
Consolidated Statements of Cash Flows
(Unaudited)
Nine Months Ended
September 30, September 30,
1996 1995
------------- ------------
Cash Flows From Operating Activities
Net Income (Loss) $ (41,253) $ 377,592
Adjustments to Reconcile Net Income (Loss) to
Net Cash Provided by Operating Activities:
Loss on Decline in Market Value of Property 90,077 30,007
Loss on Investments 193,513 0
Minority Interest in Income of Subsidiary 332 0
Changes in assets and liabilities:
Increase (Decrease) in Accounts Payable &
Accrued Liabilities (191,382) 29,581
Decrease (Increase) in Mortgage Loans
on Real Estate 2,000,000 625,000
Decrease in Accounts Receivable 28,915 65,235
Increase in Due From Affiliates (60,348) 0
Increase in Investments (590,254) 0
------------- -----------
Net Cash Provided by Operating Activities 1,429,600 1,127,415
------------- -----------
Cash Flows From Investing Activities:
Increase in Land Development Costs (378,803) 0
Increase in Minority Interest in Investments 187,937 0
Increase in Capitalized Carrying Costs (215,761) (108,215)
------------ -----------
Net Cash Used in Investing Activities (406,627) (108,215)
------------- ----------
Cash Flows From Financing Activities:
Distributions to Partners (682,570) (317,141)
Capital Contributions from Partners 0 0
------------- -----------
Net Cash Used in Financing Activities (682,570) (317,141)
------------- -----------
Net Increase in Cash 340,403 702,059
Cash, Beginning of Period 162,491 443,587
------------- -----------
Cash, End of Period $ 502,894 $ 1,145,646
============= ===========
Supplemental Schedule of Non-Cash Investing and Financing Activities:
- ---------------------------------------------------------------------
Non-cash investing and financing activities during the nine months ended
September 30, 1996 consists of acquiring property through foreclosure
proceedings on one mortgage loan receivable. The outstanding loan balance of
$1,320,000 on the date of foreclosure was recorded as Investment in Unimproved
Land. In addition, the Partnership capitalized property taxes for this and other
foreclosed properties of $934,796 as well as carrying costs of $215,761. A
valuation allowance of $90,077 was recorded to reduce the net carrying value of
the properties to their fair market values.
See Accompanying Notes to Consolidated Financial Statements
6
TMP Land Mortgage
Fund, LTD.
A California Limited Partnership
Notes to Consolidated Financial Statements
(Unaudited)
NOTE 1 - Summary of Significant Accounting Policies
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.
Accounting Method- TMP Land Mortgage Fund, Ltd. (the Partnership) prepares its
- ------------------
financial statements on the accrual basis of accounting.
Allowance for Losses on Loans - No provision has been made for an allowance for
- ------------------------------
losses on loans.
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 - Mortgage Loans On Real Estate
As of September 30, 1996, the Partnership had made twelve land loans. Three of
them have been repaid in full, eight of the loans have defaulted, and one loan
has been partially repaid, with the Partnership receiving and equity position in
a Joint Venture to build out the property securing this loan. The Partnership
has acquired the property securing the loans on the eight loans that have
defaulted.
Note 4 - Restatements and reissuances of 1994 and 1995 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
7
TMP Land Mortgage Fund, LTD.
A California Limited Partnership
Notes to Consolidated Financial Statements
(Unaudited)
Note 4 - Restatements and reissuances of 1994 and 1995 Financial Statements,
Continued
date of foreclosure. The 1994-1995 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 and 1995 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 $1.3 million. 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 and 1996 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 year 1995 and 1996 to reflect the consolidation and related minority
interests of $35,000 for Remington and Sun City as of December 31, 1995 and
$223,000 at September 30, 1996.
8
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
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 on a current basis 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 September 30, 1996, the Partnership had received and accepted
subscriptions of 15,715 units, representing total subscription proceeds in the
amount of $15,715,000. As of such date, all of the subscription 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.
See restatement and resissuance of financial statements in Note 4 to the
Partnership's consolidated financial statements.
As a consequence of adverse changes in market conditions and other factors,
eight of the twelve loans have defaulted and the Partnership owns the property
securing the. loans The status of each of the properties which the Partnership
now owns as a result of the foreclosure proceedings, and other activities
engaged in by the Partnership are discussed on the following pages.
Loan #1 - PR Equities
Loan #2 - PR Equities
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 Mello-Roos tax assessment against the Partnership's lots taken back in
foreclosure is over $2,000,000. 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 1996. The low land values reflected in the appraisal
confirmed the General Partners' opinion that the bonds should be restructured,
and the overall bonded indebtedness and the annual debt service should be
reduced. A meeting was held in September with the property owners and the
bondholders, and as a result of this meeting, the City of Rancho San Jacinto has
hired an independent bond advisor to negotiate the restructuring terms with the
bondholders. The City Council of Rancho San Jacinto is attempting to include the
current homeowners with the landowners and developers in the negotiations for
the proposed bond reduction and restructuring. Based on the outcome of the
negotiations, the General Partners will make a definitive decision on whether to
proceed with a program to build homes on the property.
9
TMP Land Moimited Partnership
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations, Continued
Loan #3 - Frame Loan
Loan was repaid.
Loan #4 - Sunset Crossing
The Partnership acquired this 42 acre commercial site at the off-ramp of Sunset
Crossing and the I-10 Freeway through foreclosure on December 27, 1994. The
property is listed for sale.
Loan #5 - Fox Olson
The Partnership owns the property at the corner of Newport Avenue and Bradley
Road through foreclosure. CalTrans is in the process of widening Newport Avenue
from 215 to Murietta Avenue and installing sidewalks, curbs and gutters. An
offer was received for 30,000 sq. ft. (approximately 1 acre) in the amount of
$400,000, and infrastructure improvements to the property. A counter offer has
been made, and the Partnership is waiting for the response.
Loan #6 - Environmental Development
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. Improvement plans and the final sub-division map have
been submitted to the City of San Diego for plan check. The project is
proceeding on schedule and the General Partners will be ready to discuss
construction financing with potential lenders in early 1997 for the models and
the first phase of production homes.
Loan #7- Fox Olson #2
The property on Newport Avenue west of the Interstate 215 is now owned by the
Partnership. TMP Homes has received a construction loan commitment from Citizens
Business Bank to build single family homes on the 45 lots. The County of
Riverside is processing the final subdivision map.
Loan # 8 - Singletary
Loan was repaid in December of 1995 and the proceeds were distributed to the
limited partners as a return of capital.
10
TMP Land Mortgage Fund, LTD.
A California Limited Partnership
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations, Continued
Loan #9 - LaMonte
The Partnership acquired this 6.5 commercial property through foreclosure in
April 1996. The previous debtor is attempting, through litigation, to set aside
the foreclosure. The Judge has refused to dismiss petition filed by the General
Partners to remove the lis pendens and end the lawsuit. A cash offer to purchase
the property was received from Lucky's Food Stores in the amount of $1.6
million. Acceptance is delayed until clear title can be achieved.
Loan #10 - Lansing
This loan was repaid to the Partnership in September of 1995.
Loan #11 - Rockfield Development
The Partnership provided $100,000 of a total $250,000 loan in participation with
TMP Mortgage Income Plus, Ltd. In order to achieve orderly foreclosure, TMP
Mortgage Income Plus, Ltd. became owner of the note and owes the Partnership
$100,000, as well as other moneys which the Partnership advanced to TMP Mortgage
Income Plus, Ltd. to pursue the development of this property. TMP Mortgage
Income Plus, Ltd. has entered into a joint venture with TMP Homes to build homes
on the 29 lots that secured this loan.
Loan 12 - Peppertree
The Partnership received $1.5 million of the $2 million loan and will hold an
equity position in the joint venture to build out the property. The Partnership
received the $1.5 million principal, together with $138,000 in accrued interest
and charges on July 28, 1996. Infrastructure and grading is proceeding on
schedule and home construction could begin in the spring of 1997.
After receiving its full land base cost, the Partnership will also receive
interest and participation in profits generated from the sale of the houses.
ADDITIONAL INFORMATION
Total interest received on mortgage loans during the first nine months of 1996
was $158,015. In August of 1996, the Partnership made distributions to partners
in the amount of $682,570. The source for the distributions was the partial
repayment of the Peppertree loan and back interest. Distributions to investors
began August 1, 1992, and continued monthly through May 1, 1995. On September 1,
1995, the General Partners suspended distributions due to the default and
subsequent foreclosure on several of the mortgage loans.
11
TMP Land Mortgage Fund, LTD.
A California Limited Partnership
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations, Continued
The General Partners intend to meet currently anticipated cash requirements for
at least the next twelve months by first cash on hand, which is $502,894 as of
September 30, 1996. 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.
12
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.
13
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
14