The Trade Association of Paddlesports board of directors voted not to move forward with a merger with the Paddlesports Industry Association last week, marking the second time in two years that such talks have failed. “The deal is dead,” said Michael Pardy, executive director for TAPS. “Without some influx of cash this clearly made no sense. It would have required a doubling of membership fees and a reduction of services.”
The decision comes after an audit revealed that PIA is paying an interest rate of 30% on a significant portion of its $59,207 in credit card and line of credit debt.
The audit, performed by a C.P.A. hired and paid by TAPS, concluded that TAPS has a net asset value of $74,197, while PIA has a negative net asset value of $31,317. If combined, the surviving organization would have a positive cash flow in 2009 of just $3,450 after paying debt service of $18,000.
Pardy said late Wednesday that a merger could still occur if the boards of the two organizations can agree to cut services, raise dues, find a donor or some combination thereof to bolster the proposed organizations' finances.
In a statement released late Wednesday, TAPS said attempts by both boards to secure necessary funding from various industry members and advocacy groups have been unsuccessful so far. PIA's members voted this weekend to approve the merger after viewing the auditors recommendations.
