The partnership does not conduct any operations. Income is booked when royalties
or fees only at such time are paid to the partnership.
No royalties or other income were booked in the first quarter of 2014.
The partnership originally had licensed the manufacturing and sale of its
products to Detonics Manufacturing Corporation (DMC) a subsidiary of Energy
Sciences Corporation, (ESC). DMC, ESC and the Partnership entered Chapter 11
bankruptcy proceedings on April 29, 1986. In late 1987, the Bankruptcy Court
approved a sale of all of DMC's assets to a new entity, formed by outside third
parties, called New Detonics Manufacturing Corporation, (NDMC). By subsequent
majority vote of the limited partners of the Partnership, a new license was
entered into between the Partnership and NDMC, which called for royalties to
begin in late 1991 at the rate of 4% of gross sales. No partnership income was
expected before that time.
On May 13, 1988, ESC's bankruptcy was dismissed and all remaining assets were
repossessed by the sole secured creditor of ESC, the firm of Murphy & Elgot.
These assets are primarily amounts owed to ESC by the partnership and the rights
to produce products owned by the partnership. The general partners had
discussions with Mr. Murphy, (who was also counsel for ESC and the
partnerships), on the elimination of most or all the debt owed by the
Partnership to ESC, (and, therefor to Murphy & Elgot).
As previously reported, the general partners learned in late 1991 that
production of firearms at NDMC was suspended in 1991. The general partners have
subsequently been advised that Murphy& Elgot, the sole secured creditors of the
original DMC, have moved to have the "soft" assets (the name "Detonics" and the
right to manufacture the Detonics designs) which were assigned to NDMC by the
Bankruptcy Court be returned to Murphy & Elgot and Moore. This occured in
September 1992. Mr. Murphy passed away in 1997. The general partners have had
discussions with Mr. Elgot regarding future attempts to recommercialize the
products and he indicated he would approve any recommercialization plan that the
general partners would be able to obtain. The general partners had been
discussing such plans with a third party, Mr.Jerry Ahern. Royalty amounts of 5%
of gross sales had been verbally agreed to, but no written agreement had been
prepared or signed as of December 31, 2002. It was learned in April 2003 that
this plan would not take place. Mr. Ahern continued to explore other financing
sources and the partnership signed a three year agreement with Mr. Ahern giving
him the exclusive right to seek funding or a partner to reestablish production.
Mr. Ahern was successful in finding a backer and a new company named Detonics
USA LLC was formed (not owned by the partnership) The partnership signed a
license agreement with Detonics USA LLC which involves a royalty of about 5% of
gross sales of each of the partnership's products manufactured and sold,
appropriately divided among all the firearms partnerships and shared with Mark
Elgot and Richard Moore in the ratio of 35% to Elgot and Moore combined and 65%
to the partnership(s) whose products have been sold.
Detonics USA was subsequently purchased by Double Nickel LLC in late 2007 and
operates as a division of that company and has been renamed Detonics Defence
Technologies. The partnership payments have been changed to a flat $25.00 per
Detonics/1911 style gun sold and $5.00 per non-Detonics gun sold. The split
between the partnership and Mark Elgot and Richard Moore remains the same
65%/35%. There can be no assurance that Double Nickel will succeed and that
royalties/fees will be paid.
Parts are being manufactured by Detonics Defense Technologies and some firearms
assembly has been started.
Sid Woodcock, the co-General Partner of the partnership, who was involved solely
in early stage technical design and production matters, passed away in June 2011
at age 87. Michel Maes is now sole General Partner of the partnership. He is a
co-owner of an electronics company and is not a stock holder and does not play
any role in the Double Nickel, dba Detonics Defense Technologies.