<PAGE> 1
Total # of Pages: 15
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996 OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
AND EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM____________________
TO_________________
Commission File Number 0-12935
------------------------------------------------------
BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
----------------------------------------
DELAWARE 84-0958632
- -------------------------------- -----------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
77 West Wacker Drive
Chicago Illinois 60601
- ----------------------------------------- ----------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (312) 574-6000
-----------------------------
Indicate by checkmark whether the registrant (1) has filed all reports 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 requirements for
the past 90 days. Yes X No
-- --
<PAGE> 2
INDEX
<TABLE>
<CAPTION>
Page No.
---------
<S> <C> <C>
PART I. Financial Information
Item 1. Financial Statements (unaudited)
Statements of Assets & Liabilities 3
June 30, 1996 and December 31, 1995
Schedule of Portfolio Investments 4
June 30, 1996
Statements of Operations 5
Three and six months ended June 30, 1996 and
1995
Statement of Partners' Capital 6
Six months ended June 30, 1996
Statements of Cash Flows 7
Six months ended June 30, 1996
and 1995
Statements of Changes in Net Assets 8
Six months ended June 30, 1996
and 1995
Notes to Financial Statements 9
Item 2. Management's Discussion and Analysis of 13
Financial Condition and Results of
Operations
Part II. Other Information 14
Item 1. Legal Proceedings 14
Item 2. Changes in Securities 14
Item 3. Defaults upon Senior Securities 14
Item 4. Submission of Matters to a Vote of
Security Holders 14
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14
SIGNATURE 15
</TABLE>
2
<PAGE> 3
Part I. Financial Information
Item 1. Financial Statements
BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
STATEMENTS OF ASSETS AND LIABILITIES
(unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
----------- -----------
<S> <C> <C>
ASSETS:
Cash $ 15,762 $ 23,368
Portfolio investments, at estimated fair value
(cost $1,636,497 and $1,631,681, respectively) 2,908,384 2,528,257
Short-term investments at cost, which
approximates market value 29,213 73,421
Other receivables 12,203 19,897
---------- ----------
Total Assets 2,965,562 2,644,943
---------- ----------
LIABILITIES:
Payable to Managing General Partner 35,303 35,303
Accounts Payable 35,145 25,913
---------- ----------
Total Liabilities 70,448 61,216
---------- ----------
Net Assets $2,895,114 $2,583,727
========== ==========
Partners' Capital:
Managing General Partner $ 265,952 $ 261,965
Individual General Partners 1,005 1,030
Limited partners 1,356,270 1,424,156
Unallocated net unrealized appreciation of investments 1,271,887 896,576
---------- ----------
Total partners' capital applicable to outstanding partnership
interests ($270.72 and $241.61, respectively,
per limited partnership unit) $2,895,114 $2,583,727
========= =========
</TABLE>
See accompanying notes to financial statements.
3
<PAGE> 4
BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
SCHEDULE OF PORTFOLIO INVESTMENTS
(Unaudited)
June 30, 1996
<TABLE>
<CAPTION>
Original
Investment Estimated
Company Position Date Cost Fair Value
- ------- -------- ---------- --------------- ----------
<S> <C> <C> <C> <C>
BBE Sound, Inc. 100,000 shares of
(formerly Barcus-Berry Series B Convertible
Electronics, Inc.)* Preferred Stock July 1985 $ 50,000 50,000
300,000 shares of
Series C Convertible
Preferred Stock September 1985 150,000 150,000
492,127 shares
(400,000 in 1987) of
Series D Convertible
Preferred Stock April 1987 246,031 246,031
Warrants to purchase
32,928 shares of
Series D Convertible
Preferred Stock April 1987 33 33
----------- -----------
446,064 446,064
-------- -------
Coleman Natural Products, Inc. 544,748 shares of
Series A Preferred
Stock March 1989 544,748 544,748
62,583 shares of
Common Stock March 1989 228,672 228,672
Warrants to purchase
13,879 shares of Common
Stock November 1990 1 1
----------- -------------
773,421 773,421
----------- -------------
INTERLINQ Software 417,012 shares of August and
Corporation Common Stock November 1986 417,012 1,688,899 **
------------ ------------
Total $ 1,636,497 $ 2,908,384
=========== ===========
</TABLE>
*This entity is considered to be an affiliated company as a result of the
Partnership's investment.
**June 30, 1996 closing bid price less 10% (stock freely tradable).
See accompanying notes to financial statements.
4
<PAGE> 5
BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
STATEMENTS OF OPERATIONS
Three Months and Six Months Ended June 30, 1996 and 1995
(Unaudited)
<TABLE>
<CAPTION>
Three Six
Months Months
Ended June 30, Ended June 30,
1996 1995 1996 1995
------ ------ ------ ------
<S> <C> <C> <C> <C>
Investment Income:
Interest and dividends from short-term and
portfolio investments $ 29,249 13,871 44,387 28,403
--------- ------ ------- -------
Expenses:
Administrative fee 35,303 35,303 70,605 74,528
Professional fees 6,838 991 22,006 22,870
Independent General Partners
fees and expenses 3,375 4,725 7,650 9,475
Other expenses 3,861 9,353 8,050 13,739
--------- ------ ------- ---------
Total expenses 49,377 50,372 108,311 120,612
--------- ------ ------- ---------
Net investment loss allocable to partners (20,128) (36,501) (63,924) (92,209)
Net change in unrealized appreciation(depreciation)
of portfolio investments 422,225 (46,914) 375,311 (234,569)
--------- ------ ------- ---------
Net increase (decrease) in net
assets resulting from operations $402,097 (83,415) 311,387 $(326,778)
======== ====== ======= =========
</TABLE>
See accompanying notes to financial statements.
5
<PAGE> 6
BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
STATEMENT OF PARTNERS' CAPITAL
Six months ended June 30, 1996
(unaudited)
<TABLE>
<CAPTION>
Unallocated
net unrealized
Managing Individual appreciation Total
General General Limited (depreciation) Partners'
Partner Partners Partners of investments capital
-------- ---------- -------- -------------- -------
<S> <C> <C> <C> <C> <C>
Balances at December 31, 1995 $261,965 $ 1,030 $1,424,156 $ 896,576 $2,583,727
Net investment loss for the six months ended
June 30, 1996 3,987 (25) (67,886) - (63,924)
Net change in unrealized appreciation
of portfolio investments - - - 375,311 375,311
---------- ------ --------- --------- ---------
Balances at June 30, 1996 $ 265,952 $ 1,005 $1,356,270 $1,271,887 $2,895,114
========= ===== ========= ========= =========
</TABLE>
See accompanying notes to financial statements.
6
<PAGE> 7
BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
Six months ended June 30, 1996 and 1995
(unaudited)
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Cash Flows from operating activities:
Net investment loss
allocable to partners $ (63,924) $ (92,209)
Change in operating assets and liabilities
(Increase) decrease in other receivables 7,694 (24,080)
Increase (decrease) in accounts payable 9,232 (442)
------------- ---------------
Net cash used in operating activities (46,998) (116,731)
----------- -----------
Cash flows from investing activities:
Payment-in-kind dividends received on investments (4,816) -
Proceeds from the disposition of portfolio investments - 8,714
Proceeds from maturities of short-term investments, net 44,208 111,017
----------- --------------
Net cash provided by investing activities 39,392 119,731
----------- --------------
Net decrease in cash (7,606) 3,000
Cash at beginning of period 23,368 7,112
----------- --------------
Cash at end of period $ 15,762 $ 10,112
=========== =============
</TABLE>
See accompanying notes to financial statements.
7
<PAGE> 8
BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
STATEMENTS OF CHANGES IN NET ASSETS
Six months ended June 30, 1996 and 1995
(unaudited)
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
From investment activities:
Net investment loss allocable to partners $ (63,924) (92,209)
Net change in unrealized appreciation
(depreciation) of portfolio investments 375,311 (234,569)
----------- ----------
Net increase (decrease) in net assets resulting from
operations 311,387 (326,778)
Net assets:
Beginning of Period 2,583,727 2,963,811
----------- ---------
End of Period $2,895,114 2,637,033
========== =========
</TABLE>
See accompanying notes to financial statements.
8
<PAGE> 9
BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
Notes to Financial Statements
June 30, 1996
(unaudited)
(1) Financial Statement Adjustments and Footnote Disclosure
The accompanying financial statements are unaudited. However, the Managing
General Partner of Boettcher Venture Capital Partners, L.P. believes all
material adjustments necessary for a fair presentation of the interim financial
statements have been made. Certain information and footnotes normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been omitted pursuant to Securities and Exchange
Commission rules and regulations. Management believes the disclosures made are
adequate to make the information not misleading and suggests that these
condensed financial statements be read in conjunction with the financial
statements and notes thereto included in the Boettcher Venture Capital
Partners, L.P. December 31, 1995 Annual Report.
(2) Significant Accounting Principles
Organization
Boettcher Venture Capital Partners, L.P. (the "Partnership"), a Delaware
limited partnership, was formed on September 22, 1983 for the primary purpose
of making venture capital investments. The Partnership sold 10,690 units of
limited partnership interests at $1,000 per unit in a public offering which
closed on September 27, 1984.
The Managing General Partner of the Partnership is EVEREN Securities, Inc.
("ESI"), which made an initial capital investment of $100. The Individual
General Partners are three individuals who are independent of ESI and its
affiliates; and the President and Chief Operating Officer of ESI. Each of the
Individual General Partners contributed $1,000 in cash. It is the
Partnership's intent to liquidate its remaining investments as promptly as
market conditions allow and subsequently dissolve.
Partnership Agreement
The Partnership Agreement (the "Agreement") provides for the allocation of
the following:
<TABLE>
<CAPTION>
Limited Managing General
Partners Partner
------------ ----------------
<S> <C> <C>
Administrative Fee (a) 99% 1%
Annual Realized Gains 80% 20%
Annual Losses (b) 80% 20%
General Income 80% 20%
General Expense 99% 1%
Income from Short-Term Investments 99% 1%
</TABLE>
9
<PAGE> 10
BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
Notes to Financial Statements
June 30, 1996
(unaudited)
(a) Administrative overhead (exclusive of General Expenses, as
defined in the Agreement) will be paid in its entirety by the
Managing General Partner, which will receive the Administrative Fee for
this purpose.
(b) Allocations of Annual Losses to the Managing General Partner in
any given year are limited to the sum of its share of any Annual Realized
Gains during that year plus any balance then remaining in its Capital
Account. Any additional losses will be allocated 1% to the Managing
General Partner. Allocations of costs, expenses, profits and losses to
and among the Limited Partners shall be deemed to include the Individual
General Partners to the extent of their initial contributions to the
capital of the Partnership, as defined in the Agreement.
Income Taxes
No provision has been made for federal income taxes in the
accompanying financial statements as the revenue and expenses of the
Partnership are reportable in the income tax returns of its partners.
Valuation of Investments
Short-term investments with maturities of 60 days or less are recorded
at amortized cost or cost plus accrued interest which approximates
market. Investments with maturities greater than 60 days are generally
recorded at current value based upon quoted market prices or prices
obtained from other independent sources.
The portfolio investments are valued at $2,908,384 and $2,528,257 (98%
and 96% of total assets, respectively) at June 30, 1996 and December 31,
1995, respectively. These values have been estimated by the Managing
General Partner under the supervision of the Individual General Partners
in the absence of readily ascertainable market values. The Managing
General Partner follows the guidelines listed below in valuing portfolio
investments:
- Portfolio investments are carried at cost until significant
developments affecting the investee occur that provide a different
basis for valuation.
- Any publicly traded securities not subject to
restrictions on free marketability are valued at a 10% discount
from the quoted bid or closing price on the valuation date.
- Increases or decreases in quoted market prices subsequent to the
balance sheet date are not reflected in the valuations until the
following period.
- In all cases, valuations are based on the judgment of the Managing
General Partner after consideration of the above and other factors
including, but not limited to, original cost, operating results, and
financial condition of the portfolio concerns.
10
<PAGE> 11
BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
Notes to Financial Statements
June 30, 1996
(unaudited)
Due to the inherent uncertainty of valuation, those estimated values may differ
significantly from the values that would have been used had a ready market for
the securities existed, and the differences could be material.
(3) Transactions with Related Parties
Pursuant to the Partnership Agreement the Managing General Partner is to
receive an annual management fee (the "Administrative Fee") for providing
ongoing management and administrative services to the Partnership, equal to no
more than 3% of the first $10,000,000 of limited partnership interests, plus 2%
of the excess over $10,000,000, payable quarterly in arrears. During the
period from commencement of operations through June 30, 1990, the
administrative fee equaled $300,000. The following reductions in the fee were
agreed to by the Managing General Partner:
<TABLE>
<CAPTION>
Effective Adjusted
Date Fee
------------ ---------
<S> <C>
July 1, 1990 $282,420
July 1, 1991 $251,040
July 1, 1993 $219,660
April 1, 1994 $156,900
April 1, 1995 $141,210
</TABLE>
Actual administrative fees amounted to $70,605 for the six months ended June
30, 1996.
Through June 30, 1990 each Individual General Partner received an annual fee of
$10,000, paid quarterly, from the Partnership, plus $1,000 for each day or part
thereof during which he attended meetings of the Partnership or related
committees, together with all reasonable out-of-pocket expenses relating to
attendance at these meetings. The following reductions were agreed to by the
Individual General Partners:
<TABLE>
<CAPTION>
Effective Adjusted Adjusted
Date Annual Fee Meeting Fee
--------- ---------- -----------
<S> <C> <C>
July 1, 1990 $9,000 $900
July 1, 1991 $8,000 $800
July 1, 1993 $7,000 $700
April 1, 1994 $5,000 $500
April 1, 1995 $4,500 $450
</TABLE>
Actual annual fees and reimbursements to the Individual General Partners
totaled $7,650 for the six months ended June 30, 1996.
11
<PAGE> 12
BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
Notes to Financial Statements
June 30, 1996
(unaudited)
(4) Valuation Adjustments
The change in the unallocated unrealized net appreciation
(depreciation) of investments for the six months ended June 30, 1996 is
comprised entirely of an increase of $375,311 in the valuation of the
Partnership's investment in INTERLINQ Software Corporation.
12
<PAGE> 13
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
For the three months and six months ended June 30, 1996, the Partnership
had net investment losses allocable to partners of $20,128 and $63,924,
respectively, representing improvements of $16,373 (45%) and $28,285 (31%) when
compared to the corresponding periods in 1995. The Partnership had no realized
gains or losses on sales of portfolio investments in the first six months of
1996 or 1995.
Interest and dividend income increased $15,378 and $15,985 for the three
and six months ended June 30, 1996 respectively, to $29,249 and $44,387, when
compared to the corresponding periods in 1995. These increases are due
primarily to the collection of $14,286 of interest income, previously
considered uncollectible, related to the Partnership's past investment in PTR&L
Holding Corp. The Partnership may receive additional interest payments in the
future. However at this time there are no indications of such, accordingly no
adjustments have been made to the financial statements contained in Item 1 of
this report.
Total expenses were $49,377 and $108,311 for the three and six months ended
June 30, 1996, representing decreases of $995 (2%) and $12,301 (10%),
respectively, when compared to the corresponding periods in 1995. The
administrative fee paid to the Managing General Partner decreased $3,923 (5%)
for the six months ended June 30, 1996 when compared to the corresponding
period in 1995, due to additional reductions in the annual fee agreed to by the
Managing General Partner in the second quarter of 1995. Similarly, fees paid
to the Individual General Partners, (IGP's) were also reduced in conjunction
with the most recent reduction in the administrative fee. As such, the IGP
fees decreased $1,825 (19%) for the six months ended June 30, 1996 when
compared to the corresponding period in 1995. See Note 3 of the Notes to
Financial Statements as contained in Item 1 of this report for further
discussion of these fees. Other expenses decreased $5,689 (41%) for the six
months ended June 30, 1996 when compared to 1995, primarily the result of
reduced costs related to the distribution and printing of the Partnership's
annual report and proxy solicitations.
Liquidity and Capital Resources
Cash as of June 30, 1996 was $15,762, a decrease of $7,606 when compared to
the 1995 fiscal year-end balance. This decrease is the net result of the
Partnership's net cash used in operations and the net cash provided by
investing activities. Other receivables decreased $7,694 from the year-end
1995 balance due to collection of accrued amounts receivable from PTR &L
Holdings, Inc. during the first quarter of 1996. Accounts payable increased
$9,232 due to the accrual of fees related to the 1995 annual report and proxy
solicitation in the second quarter of 1996.
The Partnership's increase in net assets for the six months ended June 30,
1996 amounted to $311,387, and is comprised of its net investment loss of
$63,924 and a net increase in the unrealized appreciation of portfolio
investments of $375,311. This change in unrealized appreciation was due solely
to an increase in the market value of the Partnership's investment in INTERLINQ
Software Corporation.
The Partnership believes that its current level of cash, combined with
funds anticipated to be generated from the sale of its investments will be
adequate to fund its operations for the foreseeable future. It is the
Partnership's intent to liquidate its remaining investments as promptly as
market conditions allow and subsequently dissolve.
13
<PAGE> 14
Part II. Other Information
Item 1. Legal Proceedings
Not Applicable.
Item 2. Changes in Securities
Not Applicable.
Item 3. Defaults upon Senior Securities
Not Applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Not Applicable.
Item 5. Other Information
Not Applicable.
Item 6. Exhibits and Reports on Form 8-K
No report on Form 8-K was filed for the period covered by this
report.
14
<PAGE> 15
SIGNATURE
Pursuant to the requirements of Section 13 or 15 (d) 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.
BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
By: EVEREN Securities, Inc. Its
Managing General Partner
Dated: August 14, 1996 By: /s/ Daniel D. Williams
--------------------------
Daniel D. Williams
Chief Financial Officer
(Principal Financial and
Accounting Officer
of the Partnership)
15
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 15,762
<SECURITIES> 2,937,597
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,965,562
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,965,562
<CURRENT-LIABILITIES> 70,448
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 2,965,562
<SALES> 0
<TOTAL-REVENUES> 44,387
<CGS> 0
<TOTAL-COSTS> 108,311
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 311,387
<INCOME-TAX> 0
<INCOME-CONTINUING> 311,387
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 311,387
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
