<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED March 31, 1997 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
receding 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>
INDEX
-----
<TABLE>
<CAPTION>
Page No.
--------
<S> <C> <C>
PART I. Financial Information
Item 1. Financial Statements (unaudited)
Statements of Assets & Liabilities 3
March 31, 1997 and December 31, 1996
Schedule of Portfolio Investments 4
March 31, 1997
Statements of Operations 5
Three months ended March 31, 1997 and 1996
Statement of Partners' Capital 6
Three months ended March 31, 1997
Statements of Cash Flows 7
Three months ended March 31, 1997 and 1996
Statements of Changes in Net Assets 8
Three months ended March 31, 1997 and 1996
Notes to Financial Statements 9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 13
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>
Part I. Financial Information
Item 1. Financial Statements
BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
STATEMENTS OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
March 31,
1997 December 31,
(unaudited) 1996
----------- ------------
<S> <C> <C>
ASSETS:
Cash $ 12,165 $ 17,211
Portfolio investments, at estimated fair value
(cost $1,423,566 and $1,435,539, respectively) 1,871,316 2,183,351
Short-term investments at cost, which
approximates market value 964,125 892,810
Other receivables 62,619 12,437
Other assets 5,359 5,359
---------- ------------
Total Assets 2,915,584 3,111,168
---------- ------------
LIABILITIES:
Payable to Managing General Partner 49,151 34,625
Accounts Payable 7,101 5,633
---------- ------------
Total Liabilities 56,252 40,258
---------- ------------
Net Assets $2,859,332 $3,070,910
========== ============
Partners' Capital:
Managing General Partner $ 443,789 $ 418,912
Individual General Partners 1,233 1,209
Limited partners 1,966,560 1,902,977
Unallocated net unrealized appreciation of investments 447,750 747,812
---------- ----------
Total partners' capital applicable to outstanding partnership
interests ($267.37 and $287.16, respectively,
per limited partnership unit) $2,859,332 $3,070,910
========== ==========
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
SCHEDULE OF PORTFOLIO INVESTMENTS
March 31, 1997
(unaudited)
<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 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. 568,829 shares of
Series A Preferred
Stock March 1989 568,829 568,829
178,362 shares of
Common Stock March 1989 228,672 228,672
Warrants to purchase
32,412 shares of Common
Stock November 1990 1 1
---------- ----------
797,502 797,502
---------- ----------
INTERLINQ Software 180,000 shares of August and
Corporation Common Stock November 1986 180,000 627,750 **
---------- ----------
Total $1,423,566 $1,871,316
========== ==========
</TABLE>
*This entity is considered to be an affiliated company as a result of the
Partnership's investment.
**March 31, 1997 closing bid price less 10% (stock freely tradeable).
See accompanying notes to financial statements.
4
<PAGE>
BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
STATEMENTS OF OPERATIONS
Three Months Ended March 31, 1997 and 1996
(unaudited)
<TABLE>
<CAPTION>
1997 1996
--------- --------
<S> <C> <C>
Investment Income:
Interest and dividends from short-term and
portfolio investments $ 31,436 $ 15,139
--------- --------
Expenses:
Administrative fee 35,303 35,303
Professional fees 12,926 15,168
Independent General Partners'
fees and expenses 4,275 4,275
Other expenses 4,107 4,189
--------- --------
Total expenses 56,611 58,935
--------- --------
Net investment loss (25,175) (43,796)
Realized gain on sale of portfolio investments 113,659 -
--------- --------
Net investment loss and realized gain allocable
to partners 88,484 (43,796)
Net change in unrealized appreciation of portfolio
investments (300,062) (46,914)
--------- --------
Net decrease in net assets $(211,578) $(90,710)
========= ========
Net investment loss per unit of limited partner
interest $(2.35) $(4.09)
========= ========
Weighted average number of limited partnership
units outstanding 10,694 10,694
========= ========
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
STATEMENT OF PARTNERS' CAPITAL
Three months ended March 31, 1997
(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, 1996 $418,912 $1,209 $1,902,977 $ 747,812 $3,070,910
Net investment losses and realized gains allocable to
partners for the three months ended March 31,
1997 24,877 24 63,583 - 88,484
Net change in unrealized appreciation
of portfolio investments - - - (300,062) (300,062)
--------- ---------- ---------- -------------- ----------
Balances at March 31, 1997 $443,789 $1,233 $1,966,560 $ 447,750 $2,859,332
========= ========== ========== ============== ==========
</TABLE>
See accompanying notes to financial statements.
6
<PAGE>
BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
Three months ended March 31, 1997 and 1996
(unaudited)
<TABLE>
<CAPTION>
1997 1996
---------- --------
<S> <C> <C>
Cash flows from operating activities:
Net investment loss and realized gain
allocable to partners $ 88,484 $(43,796)
Adjustment to reconcile net investment loss and
realized gain allocable to partners to net cash
used in operating activities:
Gain on sale of portfolio investments (113,659) -
Change in operating assets and liabilities
(Increase) decrease in other receivables (50,182) 7,857
Increase in payable to Managing General Partner 14,526 -
Increase in accounts payable 1,468 4,284
--------- --------
Net cash used in operating activities (59,363) (31,655)
--------- --------
Cash flows from investing activities:
Exercise of options included in portfolio investments (9,929) -
Increase in portfolio investments, payment-in-kind
dividends (8,027) (2,408)
Investment in short-term investments (107,500) -
Proceeds from the disposition of portfolio investments 143,588 -
Proceeds from maturities of short-term investments 36,185 26,452
--------- --------
Net cash provided by investing activities 54,317 24,044
--------- --------
Net decrease in cash (5,046) (7,611)
Cash at beginning of period 17,211 23,368
--------- --------
Cash at end of period $ 12,165 $ 15,757
========= ========
</TABLE>
See accompanying notes to financial statements.
7
<PAGE>
BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
STATEMENTS OF CHANGES IN NET ASSETS
Three months ended March 31, 1997 and 1996
(unaudited)
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
From investment activities:
Net investment loss $ (25,175) $ (43,796)
Realized gain on sale of portfolio investments 113,659 -
Net change in unrealized appreciation of portfolio
investments (300,062) (46,914)
---------- ----------
Net decrease in net assets (211,578) (90,710)
Net assets:
Beginning of Period 3,070,910 2,583,727
---------- ----------
End of Period $2,859,332 $2,493,017
========== ==========
</TABLE>
See accompanying notes to financial statements.
8
<PAGE>
BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
Notes to Financial Statements
March 31, 1997
(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, 1996 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.
("EVEREN Securities"). The Individual General Partners are three individuals who
are independent of EVEREN Securities and its affiliates; and the President and
Chief Operating Officer of EVEREN Securities.
It is the Partnership's intent to liquidate its remaining investments as
promptly as market conditions allow and subsequently dissolve in 1997.
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>
BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
Notes to Financial Statements
March 31, 1997
(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.
(a) 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 $1,871,316 and $2,183,351 (64% and
70% of total assets, respectively) at March 31, 1997 and December 31, 1996,
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>
BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
Notes to Financial Statements
March 31, 1997
(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 March 31, 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, 1996 $141,210
</TABLE>
The actual Administrative Fees amounted to $35,303 for the quarter ended March
31, 1997.
Through March 31, 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, 1996 $4,500 $450
</TABLE>
Actual annual fees and reimbursements to the Individual General Partners
totaled $4,275 for the quarter ended March 31, 1997.
11
<PAGE>
BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
Notes to Financial Statements
March 31, 1997
(unaudited)
(4) Valuation Adjustments
The change in the unallocated unrealized net appreciation of investments
for the three months ended March 31, 1997 is comprised entirely of a
decrease of $300,062 in the valuation of the Partnership's investment in
INTERLINQ Software Corporation.
12
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
For the three months ended March 31, 1997, the Partnership had a net
investment loss of $25,175, representing an improvement of $18,621 (43%) when
compared to the loss of $43,796 reported in the first quarter of 1996. The net
investment loss and realized gain allocable to partners for the quarter ended
March 31, 1997 was a gain of $88,484, compared to a loss of $43,796 in the
comparable quarter of 1996. In the first quarter of 1997 the Partnership sold
20,000 shares of its INTERLINQ stock resulting in a gain of $73,587 and
converted a portion of its Coleman Natural Products, Inc. warrants to common
stock, selling it and realizing a gain of $40,072. These transactions resulted
in a net realized gain on the sale of portfolio investments of $113,659. The
Partnership had no realized gains or losses on sales of portfolio investments in
the first quarter of 1996.
Interest and dividend income increased $16,297 to $31,436 for the three
months ended March 31, 1997 when compared to the corresponding period in 1996,
due to the continuation of dividend accruals on the Partnership's preferred
stock investment in Coleman Natural Products, Inc. and the maintenance of larger
cash balances in its money market account in the current year.
Total expenses were $56,611 for the three months ended March 31, 1997,
representing a decrease of $2,324 (4%) when compared to the corresponding period
in 1996. Fees paid to the Managing General Partner and the Individual General
Partners, were unchanged in the first quarter of 1997 when compared to the same
period in 1996. 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 $2,242 (15%) for the three months ended March 31, 1997 when compared
to 1996, primarily the result of increased legal costs in fiscal 1996 related to
various administrative issues of the Partnership.
Liquidity and Capital Resources
- --------------------------------
Cash as of March 31, 1997 was $12,165, a decrease of $5,046 when compared
to the 1996 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 increased $50,182 from the year-end 1996 balance
due to the sale of a portion of the investment in Coleman Natural Holdings,
Inc., the proceeds of which were receivable at March 31, 1997. The payable to
Managing General Partner increased $14,526 due to the accrual of professional
fees related to the 1996 audit and annual report.
The Partnership's decrease in net assets for the three months ended March
31, 1997 amounted to $211,578, and is comprised of its net investment loss of
$25,175 and a net decrease in the unrealized appreciation of portfolio
investments of $300,062 combined with the realized gain on sale of portfolio
investments of $113,659. 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 the partnership
itself.
13
<PAGE>
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>
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 1, 1997 By: /s/ Daniel D. Williams
----------------------
Daniel D. Williams
Chief Financial Officer
(Principal Financial and Accounting
Officer of the Partnership
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<CIK> 0000729209
<NAME> Boettcher Venture Capital Partners, L.P.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 12,165
<SECURITIES> 1,871,316
<RECEIVABLES> 62,619
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,915,584
<CURRENT-LIABILITIES> 56,252
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,859,332
<TOTAL-LIABILITY-AND-EQUITY> 2,859,332
<SALES> 0
<TOTAL-REVENUES> 31,436
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 56,611
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (25,175)
<INCOME-TAX> 0
<INCOME-CONTINUING> (25,175)
<DISCONTINUED> 0
<EXTRAORDINARY> 113,659
<CHANGES> 0
<NET-INCOME> 88,484
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
