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<S> <C> <C>
Total # of Pages: 16
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 MARCH 31,
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
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BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
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DELAWARE 84-0958632
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(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
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</TABLE>
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
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INDEX
<TABLE>
Page No.
PART I. Financial Information
<S> <C> <C>
Item 1. Financial Statements (unaudited)
Statements of Assets & Liabilities 3
March 31, 1996 and December 31, 1995
Schedule of Portfolio Investments 4
March 31, 1996
Statements of Operations 5
Three months ended March 31, 1996 and
1995
Statement of Partners' Capital 6
Three months ended March 31, 1996
Statements of Cash Flows 7
Three months ended March 31, 1996
and 1995
Statements of Changes in Net Assets 8
Three months ended March 31, 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
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Part I.Financial Information
Item 1.Financial Statements
BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
STATEMENTS OF ASSETS AND LIABILITIES
(unaudited)
<TABLE>
<S> <C>
March 31, December 31,
1996 1995
------------- -------------
ASSETS:
Cash $ 15,757 23,368
Portfolio investments, at estimated fair value
(cost $1,634,089 and $1,631,681, respectively) 2,483,751 2,528,257
Short-term investments at cost, which
approximates market value 46,969 73,421
Other receivables 12,040 19,897
----------- -----------
Total Assets 2,558,517 2,644,943
----------- ---------
LIABILITIES:
Payable to Managing General Partner 35,303 35,303
Accounts Payable 30,197 25,913
----------- -----------
Total Liabilities 65,500 61,216
----------- -----------
Net Assets $2,493,017 2,583,727
=========== ===========
Partners' Capital:
Managing General Partner $ 263,815 261,965
Individual General Partners 1,013 1,030
Limited partners 1,378,527 1,424,156
Unallocated net unrealized appreciation of investments 849,662 896,576
---------- ----------
Total partners' capital applicable to outstanding partnership
interests ($233.12 and $241.61, respectively,
per limited partnership unit) $2,493,017 2,583,727
========== =========
See accompanying notes to financial statements.
</TABLE>
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BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
SCHEDULE OF PORTFOLIO INVESTMENTS
(Unaudited)
March 31, 1996
<TABLE>
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. 542,340 shares of
Series A Preferred
Stock March 1989 542,340 542,340
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
----------- ----------
771,013 771,013
----------- ----------
INTERLINQ Software 417,012 shares of August and
Corporation Common Stock November 1986 417,012 1,266,674**
----------- ----------
Total $1,634,089 $ 2,483,751
=========== ==========
*This entity is considered to be an affiliated company as a result of the Partnership's investment.
**March 31, 1996 closing bid price less 10% (stock freely tradeable).
</TABLE>
See accompanying notes to financial statements.
4
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BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
STATEMENTS OF OPERATIONS
Three Months Ended March 31, 1996 and 1995
(Unaudited)
<TABLE>
1996 1995
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<S> <C> <C>
Investment Income:
Interest and dividends from short-term and
portfolio investments $ 15,139 14,532
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Expenses:
Administrative fee 35,303 39,225
Professional fees 15,168 21,879
Independent General Partners
fees and expenses 4,275 4,750
Other expenses 4,189 4,386
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Total expenses 58,935 70,240
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Net investment loss allocable to partners (43,796) (55,708)
----------- ------------
Net change in unrealized appreciation (depreciation)
of portfolio investments (46,914) (187,655)
----------- ------------
Net increase (decrease) in net
assets resulting from operations $(90,710) (243,363)
========== ===========
</TABLE>
See accompanying notes to financial statements.
5
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BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
STATEMENT OF PARTNERS' CAPITAL
Three months ended March 31, 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 three months
ended March 31, 1996 1,850 (17) (45,629) - (43,796)
Net change in unrealized depreciation
of portfolio investments - - - (46,914) (46,914)
--------- ------ ---------- --------- --------
Balances at March 31, 1996 $263,815 1,013 1,378,527 849,662 2,493,017
========= ===== ========= ========= ========
</TABLE>
See accompanying notes to financial statements.
6
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BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
Three months ended March 31, 1996 and 1995
(unaudited)
<TABLE>
1996 1995
---------- ----------
<S> <C> <C>
Cash Flows from operating activities:
Net investment loss
allocable to partners $ (43,796) $ (55,708)
Change in operating assets and liabilities
(Increase) decrease in other receivables 7,857 (12,040)
Increase in accounts payable 4,284 461
-------------- -------------
Net cash used in operating activities (31,655) (67,287)
Cash flows from investing activities:
Increase in portfolio investments, payment-in-kind
dividends (2,408) -
Proceeds from maturities of short-term investments, net 26,452 60,507
------------ -------------
Net cash provided by investing activities 24,044 60,507
------------ -------------
Net decrease in cash (7,611) (6,780)
------------ -------------
Cash at beginning of period 23,368 7,112
------------ --------------
Cash at end of period $ 15,757 $ 332
=========== ==============
</TABLE>
See accompanying notes to financial statements.
7
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BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
STATEMENTS OF CHANGES IN NET ASSETS
Three months ended March 31, 1996 and 1995
(unaudited)
<TABLE>
<CAPTION>
1996 1995
------------ ------------
<S> <C> <C>
From investment activities:
Net investment loss allocable to partners $ (43,796) (55,708)
Net change in unrealized appreciation
(depreciation) of portfolio investments (46,914) (187,655)
----------- ----------
Net decrease in net assets resulting from
operations (90,710) (243,363)
Net assets:
Beginning of Period 2,583,727 2,963,811
----------- ---------
End of Period $2,493,017 2,720,448
========== =========
</TABLE>
See accompanying notes to financial statements.
8
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BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
Notes to Financial Statements
March 31, 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
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<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>
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BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
Notes to Financial Statements
March 31, 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 $2,483,751 and
$2,582,257 (97% and 98% of total assets, respectively) at March 31,
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
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BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
Notes to Financial Statements
March 31, 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 $35,303 for the quarter ended March 31,
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 $4,275 for the quarter ended March 31, 1996.
11
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BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
Notes to Financial Statements
March 31, 1996
(unaudited)
(4) Valuation Adjustments
The change in the unallocated unrealized net appreciation
(depreciation) of investments for the three months ended March 31,
1996 is comprised entirely of a decrease of $46,914 in the valuation
of the Partnership's investment in INTERLINQ Software Corporation.
12
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Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
For the three months ended March 31, 1996, the Partnership had a net
investment loss allocable to partners of $43,796, representing an improvement
of $11,912 (21%) when compared to the loss of $55,708 reported in the
corresponding period in 1995. The Partnership had no realized gain or loss on
sales of portfolio investments in the first quarter of 1996.
Interest and dividend income remained relatively constant for the three
months ended March 31, 1996 when compared to the corresponding period in 1995,
primarily due to the continuation of dividend accruals on the Partnership's
preferred stock investment in Coleman Natural Products, Inc.
Total expenses were $58,935 for the three months ended March 31, 1996,
representing a decrease of $11,305 (16%) when compared to the corresponding
period in 1995. The administrative fee paid to the Managing General Partner
decreased $3,922 (10%) for the three months ended March 31, 1996 when compared
to the corresponding period in 1995, primarily the result of 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 reduction in the
administrative fee previously discussed. As such, the IGP fees decreased $475
(10%) for the three months ended March 31, 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.
Professional fees decreased $6,711 (31%) for the three months ended March 31,
1996 when compared to 1995, primarily the result of increased legal costs in
fiscal 1995 related to various administrative issues of the Partnership and the
Proxima lawsuit which was resolved in the first quarter of 1995.
Liquidity and Capital Resources
Cash as of March 31, 1996 was $15,757, a decrease of $7,611 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 $7,857 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
$4,284 due to the accrual of fees related to the 1995 annual report and proxy
solicitation in the first quarter of 1996.
The Partnership's decrease in net assets for the three months ended March
31, 1996 amounted to $90,710, and is comprised of its net investment loss of
$43,796 and a net decrease in the unrealized appreciation of portfolio
investments of $46,914. This change in unrealized appreciation was due solely
to a decline in the market value of the Partnership's investment in INTERLINQ
Software Corporation.
It is the Partnership's intent to liquidate its remaining investments as
promptly as market conditions allow and subsequently dissolve.
13
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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
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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: May 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
<CIK> 0000729209
<NAME> BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 15,757
<SECURITIES> 2,530,720
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,558,517
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,558,517
<CURRENT-LIABILITIES> 65,500
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 2,558,517
<SALES> 0
<TOTAL-REVENUES> 15,139
<CGS> 0
<TOTAL-COSTS> 58,935
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 46,914
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (90,710)
<INCOME-TAX> 0
<INCOME-CONTINUING> (90,710)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (90,710)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
