<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 September 30, 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
- --------------------------------------------------------------------------------
(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
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>
PART I. Financial Information
Item 1. Financial Statements (unaudited)
Statements of Assets & Liabilities 3
September 30, 1998 and December 31, 1997
Schedule of Portfolio Investments 4
September 30, 1998
Statements of Operations 5
Three and nine months ended September 30, 1998 and 1997
Statement of Partners' Capital 6
Nine months ended September 30, 1998
Statements of Cash Flows 7
Nine months ended September 30, 1998 and 1997
Statements of Changes in Net Assets 8
Nine months ended September 30, 1998 and 1997
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>
September 30,
1998 December 31,
(unaudited) 1997
------------- ------------
<S> <C> <C>
ASSETS:
Cash $ 2,300 $ 13,770
Portfolio investments, at estimated fair value
(cost $899,205 and $821,584, respectively) 899,205 821,584
Short-term investments at cost, which
approximates market value 1,235,520 1,217,544
Other receivables - 13,156
---------- ----------
Total Assets 2,137,025 2,066,054
---------- ----------
LIABILITIES:
Payable to Managing General Partner 20,683 47,840
Accounts Payable 2,502 4,675
---------- ----------
Total Liabilities 23,185 52,515
---------- ----------
Net Assets $2,113,840 $2,013,539
========== ==========
Partners' Capital:
Managing General Partner $ 425,602 $ 409,976
Individual General Partners 1,409 1,377
Limited partners 1,686,829 1,602,186
---------- ----------
Total partners' capital applicable to outstanding
partnership interests ($197.66 and $188.29,
respectively, per limited partnership unit) $2,113,840 $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
September 30, 1998
(unaudited)
<TABLE>
<CAPTION>
Original
Investment Estimated
Company Position Date Cost Fair Value
- ------------------------------ ----------------------- ------------- -------- ----------
<S> <C> <C> <C> <C>
Coleman Natural Products, Inc. 616,989 shares of
Series A Preferred
Stock March 1989 $616,989 $616,989
191,961 shares of
Common Stock March 1989 282,215 282,215
Warrants to purchase
32,412 shares of Common
Stock November 1990 1 1
-------- --------
Total $899,205 $899,205
======== ========
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
STATEMENTS OF OPERATIONS
Three and nine months ended September 30, 1998 and 1997
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------- ---------------------
1998 1997 1998 1997
--------- ---------- --------- ----------
<S> <C> <C> <C> <C>
Investment Income:
Interest and dividends from
short-term and portfolio
investments $45,016 $ 27,031 $109,941 $ 81,295
------- --------- -------- ---------
Expenses:
Administrative fee - 35,303 - 105,908
Professional fees 1,350 885 17,868 16,813
Independent General Partners'
fees and expenses - 3,375 - 11,025
Other expenses (905) 2,406 4,272 8,680
------- --------- -------- ---------
Total expenses 445 41,969 22,140 142,426
------- --------- -------- ---------
Net investment gain (loss) 44,571 (14,938) 87,801 (61,131)
Realized gain on sale of portfolio
investments - 336,543 12,500 450,202
------- --------- -------- ---------
Net investment loss and realized gain
allocable to partners 44,571 321,605 100,301 389,071
Net change in unrealized appreciation
of portfolio investments - (265,751) - (565,812)
------- --------- -------- ---------
Net increase (decrease) in net assets $44,571 $ 55,854 $100,301 $(176,741)
======= ========= ======== =========
Net investment gain (loss) per unit of
Limited partner interest $ 4.17 $ (1.40) $ 9.38 $ (5.72)
======= ========= ======== =========
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
Nine months ended September 30, 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 nine months ended
September 30, 1998 15,626 32 84,643 100,301
-------- ------ ---------- ----------
Balances at September 30, 1998 $425,602 $1,409 $1,686,829 $2,113,840
======== ====== ========== ==========
</TABLE>
See accompanying notes to financial statements.
6
<PAGE>
BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
Nine months ended September 30, 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 $100,301 $ 389,071
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) (450,202)
Paid in kind dividends (77,621) (24,081)
Change in operating assets and liabilities
Increase (decrease) in other receivables 13,156 (540)
Decrease in other assets - 5,359
Increase (decrease) in payable to Managing
General Partner (27,157) 8,429
Increase (decrease) in accounts payable (2,173) (958)
-------- ----------
Net cash used in operating activities (5,994) (72,922)
-------- ----------
Cash flows from investing activities:
Exercise of options included in portfolio investments - (9,929)
Investment in short-term investments (20,492) (987,500)
Proceeds from the disposition of portfolio investments 12,500 1,034,518
Proceeds from maturities of short-term investments 2,516 929,829
-------- ----------
Net cash provided (used) by investing activities (5,476) 966,918
-------- ----------
Cash flows used by financing activities-distributions
to partners - (898,580)
-------- ----------
Net decrease in cash (11,470) (4,584)
Cash at beginning of period 13,770 17,211
-------- ----------
Cash at end of period $ 2,300 $ 12,627
======== ==========
</TABLE>
See accompanying notes to financial statements.
7
<PAGE>
BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
STATEMENTS OF CHANGES IN NET ASSETS
Nine months ended September 30, 1998 and 1997
(unaudited)
<TABLE>
<CAPTION>
1998 1997
---------- -----------
<S> <C> <C>
From investment activities:
Net investment gain (loss) $ 87,801 $ (61,131)
Realized gain on sale of portfolio investments 12,500 450,202
Net change in unrealized appreciation
of portfolio investments - (565,812)
---------- -----------
Net increase (decrease) in net assets resulting from
operations 100,301 (176,741)
From financing activities-distributions to partners - (898,580)
---------- -----------
Net increase (decrease) in net assets 100,301 (1,075,321)
Net assets at beginning of period 2,013,539 3,070,910
---------- -----------
Net assets at end of period $2,113,840 $ 1,995,589
========== ===========
</TABLE>
See accompanying notes to financial statements.
8
<PAGE>
BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
Notes to Financial Statements
September 30, 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
September 30, 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 $899,205 and $821,584 (42% and 40% of
total assets, respectively) at September 30, 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
September 30, 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 September 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>
No Administrative Fees were paid for the periods ended September 30, 1998, due
to the Partnership's termination as of December 31, 1997, more fully discussed
in Note 4.
Through September 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>
11
<PAGE>
BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
Notes to Financial Statements
September 30, 1998
(unaudited)
No annual fees and reimbursements to the Individual General Partners were paid
for the periods ended September 30, 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 September 30, 1998, the Managing General Partner remains in the process of
finalizing a plan of distribution of the remaining Partnership assets and paying
its remaining liabilities. After lengthy attempts to convert the Partnership's
remaining portfolio investment, Coleman Natural Products, Inc., ("Coleman") to
cash, the Managing General Partner gave notice to Coleman of its intent to
distribute its holdings in kind as part of the final distribution to partners.
The Managing General Partner intends to complete the final distribution prior to
year-end 1998.
12
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
For the three and nine months ended September 30, 1998, the Partnership had
a net investment gain of $44,571 and $87,801, respectively, representing
improvements of $59,509 and of $148,932 when compared to the losses of $14,938
and $61,131 reported in the respective periods of 1997. The net investment loss
and realized gain allocable to partners for the nine months ended September 30,
1998 was a gain of $100,301, compared to a gain of $389,071 in the comparable
period of 1997. 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. The Partnership sold an additional 110,000 shares
of its INTERLINQ stock resulting in a gain of $336,543 in the third quarter of
1997. These transactions resulted in a net realized gain on the sale of
portfolio investments of $450,202. In the first quarter of 1998, the Partnership
had a net realized gain of $12,500, resulting from the final bankruptcy
settlement of the Partnership's former portfolio investment in PST Enterprises,
Inc.
Interest and dividend income increased $17,985 (66%) and $28,646 (35%) to
$45,016 and $109,941 for the three and nine months ended September 30, 1998 from
$27,031 and $81,295 for the three and nine months ended September 30, 1997.
These increases are the result of higher dividends paid in kind and the
maintenance of larger cash balances in the current year when compared to the
1997 periods.
Total expenses were $445 and $22,140 for the three and nine months ended
September 30, 1998, representing decreases of $41,524 (99%) and $120,286 (84%)
when compared to the corresponding periods in 1997. No fees were paid to the
Managing General Partner and the Individual General Partners in 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 $1,055 or (6%) for the nine months ended September 30,
1998 when compared to 1997, primarily the result of increased legal costs
related to the dissolution of the Partnership in the current year.
Liquidity and Capital Resources
Cash for the nine months ended September 30, 1998 was $2,300, a decrease of
$11,470 when compared to the 1997 fiscal year-end balance. This decrease is the
net result of the Partnership's net cash used in operations of $5,994 and net
cash used by investing activities of $5,476. The payable to Managing General
Partner decreased $27,157 due to the termination of the payment of management
fees by the Partnership in its wind-down phase.
Net cash used by investing amounted to $5,476, 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.
The Partnership's increase in net assets for the nine months ended
September 30, 1998 amounted to $100,301, and is comprised of its net investment
gain of $87,801 and a 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: November 13, 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
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 2300
<SECURITIES> 899205
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2137025
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2137025
<CURRENT-LIABILITIES> 23185
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2113840
<TOTAL-LIABILITY-AND-EQUITY> 2113840
<SALES> 0
<TOTAL-REVENUES> 109941
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 22140
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 87801
<INCOME-TAX> 0
<INCOME-CONTINUING> 87801
<DISCONTINUED> 0
<EXTRAORDINARY> 12500
<CHANGES> 0
<NET-INCOME> 100301
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
