Commission File Number: 0-9773
TASA PRODUCTS LIMITED
(Exact name of registrant as specified in it's charter)
Washington 91-1121874
(State or other Jurisdiction of (IRS Employer ID No.)
incorporation or organization)
14508 SE 51st, Bellevue, WA 98006
(Address and zip code of principal executive offices)
Registrant's telephone number, including area code: (425) 746-6761
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:
DOCUMENTS INCORPORATED BY REFERENCE
Form S-1, TASA Products Limited, Commission File No. 0-9773, but excluding the
balance sheet of TASA Products Limited together with the report of independent
certified public accountants, is incorporated by reference.
PART I - FINANCIAL INFORMATION
Item 1: Financial Statements
See Appendix A
Item 2: Management's Discussion and Analysis of the Financial
Condition and Results of Operations
The partnership originally licensed the manufacturing and sale of its products
to Communications Research Corporation, (CRC) a subsidiary of Energy Sciences
Corporation, (ESC). ESC and the Partnership entered Chapter 11 bankruptcy
proceedings on April 29, 1986. On May 13, 1988, ESC's bankruptcy was dismissed
and all remaining assets, primarily amounts owed to ESC by the partnerships and
the rights to produce electronic products at CRC, were repossessed by the sole
secured creditor of ESC, Mr. Thomas Murphy. A new company was formed in
September 1988, called LINC Technology Corporation. The company ownership was
restructured recently and is now owned by Messrs. Maes and Steffey in the amount
of 41% each; the balance of 18% onwership is held by Mr. Murphy's heirs, Mr.
Nichols, a founder, and by outside investors. Mr. Nichols resigned from LINC in
August 1991, but remains a stockholder. LINC has been initially privately
financed with $49,000 of cash to pursue a variety of opportunities in
electronics and data communications. LINC believes that a market remains for
some of the partnerships' products. Initial emphasis is on LCM and DOVE. A
license has been entered into between the partnership and LINC, similar in terms
to that which existed with CRC, with the exception that in return for
elimination of most of the debt owed by the partnerships to ESC, (and now,
therefore, Mr. Murphy), and in recognition of the need to attract more capital
for LINC, the royalty to be paid the partnerships is set at 5% of gross sales,
(compared to the prior formula, ranging from 10% down to 6%). The new royalty is
divided between partnerships in the case of joint ownership of rights, such as
the case with DOVE, for example. All royalties were deferred for three years
from September 1988 in order to allow LINC to build its working capital.
Starting in September 1991, royalties are 1% of gross sales for twelve months,
3% of gross sales for the next twelve months and 5% thereafter.
In 1995, a new royalty agreement was put into effect in order to reduce
administrative expenses. Under the new plan, no royalties will accrue to the
partnership until a total of $300,000.00 of sales on products licensed to LINC
Technology Corporation have been generated and collected. At that point, a lump
sum royalty payment of $15,000.00 will be paid to the patrnership group of TASA
Products Limited (the Partnership), Energy Sciences Limited Partnership,
Telemetric Controls Limited Partnership, and Communications Link Limited
Partnership. After such payment, again no royalty will accrue or be owed until
another $300,000.00 in sales has occured, after which a second lump sum of
$15,000.00 is due, and so forth. LINC Technology Corporation will be responsible
for periodic mailings to the partnership at its expense. Bases on IRS
regulations, no partnership 1065 tax returns and K-1s will have to be filed or
issued until the royalty accrues. Royalties of $12,118 were paid to the
Partnership in December 1999 and a total disbursement of $10,906 was made to the
limited partners in February 2000. $1,212 was paid to historical creditors of
the partnership. The general partners did not receive any payments from the
partnership.
As described above, in 1995, the General Partners put in place an arrangement
under which royalties would not be payable to the partnerships and profit would
not accrue until a total of $300,000 in sales had occured. In 2003, as the
amount of sales was approaching $300,000 again, the General Partners reviewed
the costs associated with preparing the partnership tax returns (Form 1065) and
the preparation and mailing of both the K-1s and distribution checks. Based on
our experience in 2000, the General Partners estimated the cost to be
approximately $5000.00. In addition, the General Partners heard from many
Limited Partners that the trouble involved in providing the tax information to
their accountants was not worth the money that they received. The General
Partners therefore increased the level of sales required before a royalty
payment is due from $300,000 to $600,000, which would result in a royalty
payment totalling $30,000, instead of $15,000 to be divided among all individual
limited partners. As a result, a smaller percentage of the royalty would go to
tax form and check preparation costs. As a result of this new arrangement, no
royalties accrued in this fiscal period.
Only a small portion of the LINC Technology Corporation's sales were for
products which the Partnership licenses to LINC Technology Corporation.
Accounting of the amount of sales on products subject to partnership royalty
will not be done until the end of the calender year.
LINC filed a registration statement with the State of Washington, under the ULOR
provision, for sale of up to $450,000 worth of its common stock, which became
effective May 9, 1989. No stock was sold under the offering and it was withdrawn
on May 10, 1990. Thus far LINC has supported its growth from its own cash flow.
LINC Technology Corporation's new address is 3535 Factoria Blvd. S.E., Bellevue,
WA 98006 and telephone 425-882-2206. Modest sales of the partnership's products
continue to be made but are still irregular quarter to quarter. The company
concentrates on industrial data communications. There can be no guarantee that
LINC will be successful, or that sufficient sales of the partnership's products
will result so that any significant royalties will be paid to the partnership.
PART II - OTHER INFORMATION
Item 1: Legal Proceedings
The staff of the Securities and Exchange Commission's Division of Enforcement
recommended to the Commission that it authorize the staff to file a civil
injunction action against the Partnership and Messrs. Maes and Steffey to
require timely filing of reports with the commission. Such an injunction was
entered on June 25, 1986. All subsequent reports have been timely filed.
On October 16, 1989 the U.S. Bankruptcy Court ordered the conversion of the
partnership's Chapter 11 to a Chapter 7. On May 11, 1990, the partnership filed
an amended motion to dismiss the Chapter 7. The motion was granted on June 21,
1990 and the partnership is no longer in bankruptcy.
Item 2: Changes In Securities: 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, Financial Statement Schedules, and Reports
on Form 8-K
a) Documents filed as part of this Report: Unaudited
financial statement.
b) Reports on Form 8-K: None.
Appendix A
TASA PRODUCTS LIMITED
BALANCE SHEET
MARCH 31, 2004
(UNAUDITED)
ASSETS
Cash $ 0
Royalties Receivable 0
------------
TOTAL CURRENT ASSETS $ 0
Intangible Assets Less Amortization 0
Receivable from Affiliates Less Allowance 0
------------
TOTAL ASSETS $ 0
LIABILITIES AND PARTNERS' EQUITY
Accounts Payable $ 0
Taxes Payable 0
------------
TOTAL CURRENT LIABILITIES 0
Payable to Creditors (Non-Recourse) 2,383,607
------------
TOTAL LIABILITIES 2,383,607
Partners' Capital (2,383,607)
------------
TOTAL LIABILITIES
AND PARTNER'S EQUITY 0
TASA PRODUCTS LIMITED
STATEMENT OF INCOME
FOR THE QUARTER ENDING
MARCH 31, 2004
(UNAUDITED)
Royalty Revenue $ 0
------------
Expenses 0
------------
Net Income (Loss) $ 0
------------
TASA PRODUCTS LIMITED
STATEMENT OF CASH FLOWS
FOR THE QUARTER ENDING
MARCH 31, 2004
(UNAUDITED)
Net Cash Provided By Operating Activities $ 0
Net Cash Distribution to Partners 0
Net Cash Distribution to Creditors 0
Net Cash Used By Investing Activities 0
Net Cash Provided By Financing Activities 0
------------
Net Increase In Cash 0
Cash At Beginning Of Period 0
------------
Cash At End Of Period $ 0
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.
TASA PRODUCTS LIMITED
(Registrant)
4-21-04 /S/ Michel E. Maes, General Partner
(Date) (Signature)