<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 June 30, 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
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
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>
INDEX
-----
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
PART I. Financial Information
Item 1. Financial Statements (unaudited)
Statements of Assets & Liabilities 3
June 30, 1997 and December 31, 1996
Schedule of Portfolio Investments 4
June 30, 1997
Statements of Operations 5
Three and six months ended June 30, 1997
and 1996
Statement of Partners' Capital 6
Six months ended June 30, 1997
Statements of Cash Flows 7
Six months ended June 30, 1997 and 1996
Statements of Changes in Net Assets 8
Six months ended June 30, 1997 and 1996
Notes to Financial Statements 9
Item 2. Management's Discussion and Analysis of 13
Financial Condition and Results of Operations
PART II. Other Information 15
Item 1. Legal Proceedings 15
Item 2. Changes in Securities 15
Item 3. Defaults upon Senior Securities 15
Item 4. Submission of Matters to a Vote of
Security Holders 15
Item 5. Other Information 15
Item 6. Exhibits and Reports on Form 8-K 15
SIGNATURE 17
</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>
June 30,
1997 December 31,
(unaudited) 1996
----------- ------------
<S> <C> <C>
ASSETS:
Cash $ 11,605 $ 17,211
Portfolio investments, at estimated fair value
(cost $985,530 and $1,435,539, respectively) 1,433,280 2,183,351
Short-term investments at cost, which
approximates market value 522,429 892,810
Other receivables 12,800 12,437
Other assets 5,359 5,359
---------- ----------
Total Assets 1,985,473 3,111,168
---------- ----------
LIABILITIES:
Payable to Managing General Partner 39,639 34,625
Accounts Payable 6,101 5,633
---------- ----------
Total Liabilities 45,740 40,258
---------- ----------
Net Assets $1,939,733 $3,070,910
========== ==========
Partners' Capital:
Managing General Partner $ 296,010 $ 418,912
Individual General Partners 1,224 1,209
Limited partners 1,194,749 1,902,977
Unallocated net unrealized appreciation of investments 447,750 747,812
---------- ----------
Total partners' capital applicable to outstanding partnership
interests ($181.39 and $287.16, respectively,
per limited partnership unit) $1,939,733 $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
June 30, 1997
(unaudited)
<TABLE>
<CAPTION>
Original
Investment Estimated
Company Position Date Cost Fair Value
- ----------------------------- ----------------------- ----------------- --------- ----------
<S> <C> <C> <C> <C>
Coleman Natural Products, Inc. 576,857 shares of
Series A Preferred
Stock March 1989 576,857 576,857
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
--------- ----------
805,530 805,530
--------- ----------
INTERLINQ Software 180,000 shares of August and
Corporation Common Stock November 1986 180,000 627,750 *
--------- ----------
Total $985,530 $1,433,280
========= ==========
</TABLE>
* June 30, 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 and six months ended June 30, 1997 and 1996
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- ---------------------
1997 1996 1997 1996
-------- -------- --------- --------
<S> <C> <C> <C> <C>
Investment Income:
Interest and dividends from short-term and portfolio investments $ 22,828 $ 29,249 $ 54,264 $ 44,387
-------- -------- --------- --------
Expenses:
Administrative fee 35,302 35,303 70,605 70,605
Professional fees 3,002 6,838 15,928 22,006
Independent General Partners' fees and expenses 3,375 3,375 7,650 7,650
Other expenses 2,168 3,861 6,275 8,050
-------- -------- --------- --------
Total expenses 43,847 49,377 100,458 108,311
-------- -------- --------- --------
Net investment loss (21,019) (20,128) (46,194) (63,924)
Realized gain on sale of portfolio investments - - 113,659 -
-------- -------- --------- --------
Net investment loss and realized gain allocable to partners (21,019) (20,128) 67,465 (63,924)
Net change in unrealized appreciation (depreciation) of portfolio
investments - 422,225 (300,062) 375,311
-------- -------- --------- --------
Net increase (decrease) in net assets $(21,019) $402,097 $(232,597) $311,387
======== ======== ========= ========
Net investment loss per unit of limited partner interest $ (1.97) $ (1.89) $ (4.32) $ (5.98)
======== ======== ========= ========
Weighted average number of limited partnership units outstanding 10,694 10,694 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
Six months ended June 30, 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 six months ended June 30, 1997 27,098 15 40,352 - 67,465
Distributions to partners (150,000) (748,580) (898,580)
Net change in unrealized depreciation of portfolio
investments - - - (300,062) (300,062)
--------- ------ ---------- --------- ----------
Balances at June 30, 1997 $ 296,010 $1,224 $1,194,749 $ 447,750 $1,939,733
========= ====== ========== ========= ==========
</TABLE>
See accompanying notes to financial statements.
6
<PAGE>
BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
Six months ended June 30, 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 $ 67,465 $(63,924)
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 (363) 7,694
Increase in payable to Managing General Partner 5,014
Increase in accounts payable 468 9,232
--------- --------
Net cash used in operating activities (41,075) (46,998)
--------- --------
Cash flows from investing activities:
Exercise of options included in portfolio investments (9,929) -
Increase in portfolio investments, payment-in-kind dividends (16,055) (4,816)
Increase in short-term investments (107,500) -
Proceeds from the disposition of portfolio investments 589,652 -
Proceeds from maturities of short-term investments 477,881 44,208
--------- --------
Net cash provided by investing activities 934,049 39,392
--------- --------
Cash flows used by financing activities-distributions to partners (898,580) -
--------- --------
Net decrease in cash (5,606) (7,606)
Cash at beginning of period 17,211 23,368
--------- --------
Cash at end of period $ 11,605 $ 15,762
========= ========
</TABLE>
See accompanying notes to financial statements.
7
<PAGE>
BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
STATEMENTS OF CHANGES IN NET ASSETS
Six months ended June 30, 1997 and 1996
(unaudited)
<TABLE>
<CAPTION>
1997 1996
----------- ----------
<S> <C> <C>
From investment activities:
Net investment loss $ (46,194) $ (63,924)
Realized gain on sale of portfolio investments 113,659
Net change in unrealized appreciation (depreciation) of
portfolio investments (300,062) 375,311
----------- ----------
Net increase (decrease) in net assets resulting from operations (232,597) 311,387
From financing activities-distributions to partners (898,580) -
----------- ----------
Net increase (decrease) in net assets (1,131,177) 311,387
Net assets at beginning of period 3,070,910 2,583,727
----------- ----------
Net assets at end of period $ 1,939,733 $2,895,114
=========== ==========
</TABLE>
See accompanying notes to financial statements.
8
<PAGE>
BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
Notes to Financial Statements
June 30, 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
June 30, 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.
(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 $1,433,280 and $2,183,351 (64% and 70%
of total assets, respectively) at June 30, 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
June 30, 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 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, 1996 $141,210
</TABLE>
The actual Administrative Fees amounted to $70,605 for the period ended June 30,
1997.
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, 1996 $4,500 $450
</TABLE>
Actual annual fees and reimbursements to the Individual General Partners totaled
$7,650 for the period ended June 30, 1997.
11
<PAGE>
BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
Notes to Financial Statements
June 30, 1997
(unaudited)
(4) Valuation Adjustments
The change in the unallocated unrealized net appreciation of investments
for the six months ended June 30, 1997 is comprised entirely of a decrease
of $300,062 in the valuation of the Partnership's investment in INTERLINQ
Software Corporation.
(5) Subsequent Events
In July, 1997, the Partnership sold 25,000 shares of INTERLINQ Software
Corporation. The Partnership's realized gain on sale of investments will be
reflected in the third quarter 1997 financial statements.
12
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
For the three and six months ended June 30, 1997, the Partnership had a net
investment loss of $21,019 and $46,194, respectively, representing an increased
loss of $891 (4%) and an improvement of $17,730 (28%) when compared to the
losses of $20,128 and $63,924 reported in the respective periods of 1996. The
net investment loss and realized gain allocable to partners for the period ended
June 30, 1997 was a gain of $67,465, compared to a loss of $63,924 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 second quarter of 1997, or in the corresponding quarters in 1996.
Interest and dividend income decreased $6,421 (22%) and increased $9,877 (22%)
to $22,829 and $54,265 for the three and six months ended June 30, 1997 when
compared to the corresponding periods in 1996. The decrease in interest and
dividend income in the current quarter is due to a one-time collection of
interest on a former venture capital investment in the second quarter of 1996.
The increase in interest and dividend income for the six months ended June 30,
1997 is due primarily to an increase in 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 $43,847 and $100,458 for the three and six months ended
June 30, 1997, representing decreases of $5,530 (11%) and $7,853 (7%) when
compared to the corresponding periods in 1996. Fees paid to the Managing General
Partner and the Individual General Partners, were unchanged in the first half 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 $3,836 (56%) and $6,078
(28%) for the three and six months ended June 30, 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 for the six months ended June 30, 1997 was $11,605, a decrease of $5,606
when compared to the 1996 fiscal year-end balance. This decrease is the net
result of the Partnership's net cash used in operations of $41,075, net cash
provided by investing activities of $934,049, and a distribution to partners
totaling $898,580.
The Partnership's decrease in net assets for the six months ended June 30,
1997 amounted to $1,131,177, and is comprised of its net investment loss of
$46,194 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. In addition, distributions to the partners decreased net
assets by $898,580.
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>
During the second quarter, the Managing General Partner learned that Peachtree
Partners had initiated a tender offer for up to 4.9% of the outstanding units of
the Partnership for $110 per unit. The tender offer was scheduled to expire on
June 13, 1997. At the time the Managing General Partner learned of the tender
offer, it determined that it would not express an opinion as to whether $110 was
a fair price or whether any limited partner should tender its units to Peachtree
Partners. In a letter sent to all limited partners with the Partnership's first
quarter results, the Managing General Partner advised the limited partners of
the following information so that they could make an informed decision regarding
the tender offer:
. The Net Asset Value per $1,000 unit of limited partnership at March 31,
1997 was approximately $267.37. This value is determined based on total
partnership capital at March 31, 1997 divided by the total units
outstanding.
. As previously announced, the Individual General Partners have determined
that 1997 will be the final year of the Partnership's existence. We
anticipate that the portfolio assets in the Partnership will be fully
liquidated and a final cash distribution will be made to all Partners by
the end of 1997 according to the terms of the Partnership Agreement.
There is no guarantee that the liquidation value of each limited partner
unit will be equal to the March 31, 1997 Net Asset Value assessment.
However, if the liquidation of the Partnership was done at the March 31,
1997 Net Asset Value, the Partners would receive an amount that
approximates the March 31, 1997 Net Asset Value, less any costs of
dissolution, as a final cash distribution. At this time, we have no way
of knowing what the dissolution costs might be.
. The terms of the tender offer made by Peachtree Partners may not comply
with Federal securities laws and applicable regulations designed to
protect offerees. In addition to requiring the bidder to provide
meaningful information, the laws include provisions affording unit
holders additional protection features such as certain withdrawal rights
and proration of tenders if the offer is oversubscribed during the period
the offer is required to remain open. If you have already tendered your
units and desire to reconsider, you may be legally entitled to change
your decision prior to expiration of the offer.
On June 30, 1997, the Net Asset Value per $1,000 unit of limited partnership was
approximately $181.39. The reduction in Net Asset Value from March 31, 1997 to
June 30, 1997 is largely due to the cash distribution of $70.00 per Partnership
unit made to all of the limited partners during the second quarter.
Based on partnership unit transfers handled by the Managing General Partner, it
appears that approximately 5.4% of the outstanding Partnership units are now
held by Peachtree Partners or its affiliated entities.
14
<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.
15
<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: August 5, 1997 By: /s/ Daniel D. Williams
----------------------
Daniel D. Williams
Chief Financial Officer
(Principal Financial and Accounting Officer
of the Partnership)
16
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<CIK> 0000729209
<NAME> Boettcher Venture Capital Partners, L.P.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 11,605
<SECURITIES> 1,433,280
<RECEIVABLES> 12,800
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,985,473
<CURRENT-LIABILITIES> 45,740
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,939,733
<TOTAL-LIABILITY-AND-EQUITY> 1,939,733
<SALES> 0
<TOTAL-REVENUES> 54,264
<CGS> 0
<TOTAL-COSTS> 100,458
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (46,194)
<INCOME-TAX> 0
<INCOME-CONTINUING> (46,194)
<DISCONTINUED> 0
<EXTRAORDINARY> 113,659
<CHANGES> 0
<NET-INCOME> 67,465
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
