<PAGE>
Total # of Pages: 15
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, 1998
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
incorporation or organization) Identification No.)
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
Page No.
--------
PART I. Financial Information
Item 1. Financial Statements (unaudited)
Statements of Assets & Liabilities 3
March 31, 1998 and December 31, 1997
Schedule of Portfolio Investments 4
March 31, 1998
Statements of Operations 5
Three months ended March 31, 1998 and 1997
Statement of Partners' Capital 6
Three months ended March 31, 1998
Statements of Cash Flows 7
Three months ended March 31, 1998 and 1997
Statements of Changes in Net Assets 8
Three months ended March 31, 1998 and 1997
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
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,
1998 December 31,
(unaudited) 1997
----------- ------------
<S> <C> <C>
ASSETS:
Cash $ 4,370 $ 13,770
Portfolio investments, at estimated fair value
(cost $829,611 and $821,584, respectively) 829,611 821,584
Short-term investments at cost, which
approximates market value 1,215,028 1,217,544
Other receivables 26,489 13,156
---------- ----------
Total assets 2,075,498 2,066,054
---------- ----------
LIABILITIES:
Payable to Managing General Partner 14,449 47,840
Accounts Payable 14,600 4,675
---------- ----------
Total liabilities 29,049 52,515
---------- ----------
Net assets $2,046,449 $2,013,539
========== ==========
Partners' Capital:
Managing General Partner $ 415,213 $ 409,976
Individual General Partners 1,387 1,377
Limited partners 1,629,849 1,602,186
---------- ----------
Total partners' capital applicable to
outstanding partnership interests ($192.73
and $188.29, respectively, per limited
partnership unit) $2,046,449 $2,013,539
========== ==========
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
SCHEDULE OF PORTFOLIO INVESTMENTS
March 31, 1998
(unaudited)
<TABLE>
<CAPTION>
Original
Investment Estimated
Company Position Date Cost Fair Value
- ------------------------------ ---------------------- ----------- -------- ----------
<S> <C> <C> <C> <C>
Coleman Natural Products, Inc. 600,937 shares of
Series A Preferred
Stock March 1989 $600,937 $600,937
178,362 shares of
Common Stock March 1989 228,673 228,673
Warrants to purchase
32,412 shares of Common
Stock November 1990 1 1
-------- --------
Total $829,611 $829,611
======== ========
</TABLE>
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, 1998 and 1997
(unaudited)
<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
Investment Income:
Interest and dividends from short-term and
portfolio investments $ 36,344 $ 31,436
-------- --------
Expenses:
Administrative fee - 35,303
Professional fees 13,117 12,926
Independent General Partners' fees and expenses - 4,275
Other expenses 2,817 4,107
-------- --------
Total expenses 15,934 56,611
-------- --------
Net investment gain (loss) 20,410 (25,175)
Realized gain on sale of portfolio investments 12,500 113,659
-------- --------
Net investment loss and realized gain allocable
to partners 32,910 88,484
Net change in unrealized appreciation of portfolio
investments - (300,062)
-------- --------
Net increase (decrease) in net assets $ 32,910 $(211,578)
======== ========
Net investment gain (loss) per unit of limited partner
interest $ 3.08 $ (2.35)
======== ========
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, 1998
(unaudited)
<TABLE>
<CAPTION>
Managing Individual Total
General General Limited Partners'
Partner Partners Partners capital
-------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Balances at December 31, 1997 $409,976 $1,377 $1,602,186 $2,013,539
Net investment losses and realized gains
allocable to partners for the three
months ended March 31, 1998 5,237 10 27,663 32,910
-------- ------ ---------- ----------
Balances at March 31, 1998 $415,213 $1,387 $1,629,849 $2,046,449
======== ====== ========== ==========
</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, 1998 and 1997
(unaudited)
<TABLE>
<CAPTION>
1998 1997
-------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net investment loss and realized gain
allocable to partners $ 32,910 $ 88,484
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 (12,500) (113,659)
Change in operating assets and liabilities
Increase in other receivables (13,333) (50,182)
Increase (decrease) in payable to Managing
General Partner (33,391) 14,526
Increase in accounts payable 9,925 1,468
-------- ---------
Net cash used in operating activities (16,389) (59,363)
-------- ---------
Cash flows from investing activities:
Exercise of options included in portfolio investments - (9,929)
Increase in portfolio investments, payment-in-kind
dividends (8,027) (8,027)
Investment in short-term investments - (107,500)
Proceeds from the disposition of portfolio investments 12,500 143,588
Proceeds from maturities of short-term investments 2,516 36,185
-------- ---------
Net cash provided by investing activities 6,989 54,317
-------- ---------
Net decrease in cash (9,400) (5,046)
Cash at beginning of period 13,770 17,211
-------- ---------
Cash at end of period $ 4,370 $ 12,165
======== =========
</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, 1998 and 1997
(unaudited)
<TABLE>
<CAPTION>
1998 1997
---------- -----------
<S> <C> <C>
From investment activities:
Net investment gain (loss) $ 20,410 $ (25,175)
Realized gain on sale of portfolio investments 12,500 113,659
Net change in unrealized appreciation of portfolio
investments - (300,062)
---------- ----------
Net increase (decrease) in net assets 32,910 (211,578)
Net assets:
Beginning of Period 2,013,539 3,070,910
---------- ----------
End of Period $2,046,449 $2,859,332
========== ==========
</TABLE>
See accompanying notes to financial statements.
8
<PAGE>
BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
Notes to Financial Statements
March 31, 1998
(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, 1997 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.
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, 1998
(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 $829,611 and $821,584 (40% and 40%
of total assets, respectively) at March 31, 1998 and December 31, 1997,
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, 1998
(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:
Effective Adjusted
Date Fee
------------- --------
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
No Administrative Fees were paid for the quarter ended March 31, 1998 due to
the Partnership's termination as of December 31, 1997, more fully discussed in
Note 4.
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:
Effective Adjusted Adjusted
Date Annual Fee Meeting Fee
------------- ---------- -----------
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
11
<PAGE>
BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
Notes to Financial Statements
March 31, 1998
(unaudited)
No annual fees and reimbursements to the Individual General Partners were paid
for the quarter ended March 31, 1998 due to the Partnership's termination as
of December 31, 1997, more fully discussed in Note 4.
(4) Partnership Liquidation
-----------------------
Pursuant to the Second Amended and Restated Agreement of limited partnership
of the Partnership, the Partnership terminated effective December 31, 1997.
However, in conjunction with Section 17- 801 of the Delaware Revised Uniform
Limited Partnership Act (the "Act"), the Partnership will be "dissolved" on
that date even though the Managing General Partner is permitted under Section
17- 803 of the Act to wind up the Partnership's affairs after December 31,
1997.
The Act provides that the Managing General Partner may gradually settle and
close the business of the Partnership, dispose of and convey the Partnership's
property, discharge or make reasonable provision for the Partnership's
liabilities and distribute to the Partnership's limited partners any remaining
assets of the Partnership.
After the dissolution of the Partnership, the Act states that the Partnership
will continue its existence as a separate legal entity until the cancellation
of the certificate of limited partnership. The filing will not be done until
the wind-up process is completed, this would include, without limitation, the
payment or making of reasonable provision for the payment of obligations and
liabilities and the distribution of assets to creditors and partners of the
Partnership.
As of March 31, 1998, the Managing General Partner is in the process of
implementing a plan of distribution of the remaining Partnership assets and
paying its remaining liabilities. The Partnership's remaining portfolio
investment, Coleman Natural Products, Inc., may be distributed in kind or in
cash as part of the final distribution to partners.
12
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
For the three months ended March 31, 1998, the Partnership had a net
investment gain of $20,410, representing an improvement of $45,585 (181%) when
compared to the loss of $25,175 reported in the first quarter of 1997. The
net investment loss and realized gain allocable to partners for the quarter
ended March 31, 1998 was a gain of $32,910, compared to a gain of $88,484 in
the comparable quarter of 1997. The current quarter gains come as a result of
the Partnership's termination and lack of "on-going" operations, more fully
disclosed in the Notes to the Financial Statements in Item 1 of this report.
Interest and dividend income increased $4,908 to $36,344 for the three
months ended March 31, 1998 when compared to the corresponding period in 1997,
primarily due to the continuation of dividend accruals on the Partnership's
preferred stock investment in Coleman Natural Products, Inc.
Total expenses were $15,934 for the three months ended March 31, 1998,
representing a decrease of $40,677 (72%) when compared to the corresponding
period in 1997. No fees were paid to the Managing General Partner and the
Individual General Partners in the first quarter of 1998 due to the wind-down
of operations. See Notes 3 and 4 of the Notes to Financial Statements as
contained in Item 1 of this report for further discussion. Professional fees
increased slightly by $191 or (1%) for the three months ended March 31, 1998
when compared to 1997 and consisted of legal costs related to the dissolution
of the Partnership and audit fees.
Liquidity and Capital Resources
- -------------------------------
Cash as of March 31, 1998 was $4,370, a decrease of $9,400 when compared
to the 1997 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 $13,333 from the year-end
1997 balance due to the accrual of dividends from the investment in Coleman
Natural Holdings, Inc. The payable to Managing General Partner decreased
$33,391 due to no accruals of management fees due to the dissolution of the
Partnership.
Net cash provided by investing amounted to $6,989, which consists
primarily of the net effect of proceeds from the final bankruptcy settlement
of the Partnership's former portfolio investment in PST Enterprises, Inc. of
$12,500, which was subsequently invested in a short-term money market account,
and preferred stock dividend accrual in Coleman Natural Products, Inc. of
$8,027.
The Partnership's increase in net assets for the three months ended March
31, 1998 amounted to $32,910, and is comprised of its net investment gain of
$20,410 and the realized gain on sale of portfolio investments of $12,500.
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 15, 1998 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-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 4,370
<SECURITIES> 829,611
<RECEIVABLES> 26,489
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,075,498
<CURRENT-LIABILITIES> 29,049
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,046,449
<TOTAL-LIABILITY-AND-EQUITY> 2,046,449
<SALES> 0
<TOTAL-REVENUES> 36,344
<CGS> 0
<TOTAL-COSTS> 15,934
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 20,410
<INCOME-TAX> 0
<INCOME-CONTINUING> 20,410
<DISCONTINUED> 0
<EXTRAORDINARY> 12,500
<CHANGES> 0
<NET-INCOME> 32,910
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
