<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 June 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 (Zip Code)
offices)
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 ______
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<PAGE>
<TABLE>
<CAPTION>
INDEX
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Page No.
--------
<S> <C>
PART I. Financial Information
Item 1. Financial Statements (unaudited)
Statements of Assets & Liabilities 3
June 30, 1998 and December 31, 1997
Schedule of Portfolio Investments 4
June 30, 1998
Statements of Operations 5
Three and six months ended June 30, 1998 and 1997
Statement of Partners' Capital 6
Six months ended June 30, 1998
Statements of Cash Flows 7
Six months ended June 30, 1998 and 1997
Statements of Changes in Net Assets 8
Six months ended June 30, 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
</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,
1998 December 31,
(unaudited) 1997
----------- ------------
<S> <C> <C>
ASSETS:
Cash $ 2,321 $ 13,770
Portfolio investments, at estimated fair value
(cost $869,630 and $821,584, respectively) 869,630 821,584
Short-term investments at cost, which
approximates market value 1,220,078 1,217,544
Other receivables -- 13,156
---------- ----------
Total Assets 2,092,029 2,066,054
---------- ----------
LIABILITIES:
Payable to Managing General Partner 18,260 47,840
Accounts Payable 4,500 4,675
---------- ----------
Total Liabilities 22,761 52,515
---------- ----------
Net Assets $2,069,269 $2,013,539
========== ==========
Partners' Capital:
Managing General Partner $ 419,538 $ 409,976
Individual General Partners 1,394 1,377
Limited partners 1,648,337 1,602,186
---------- ----------
Total partners' capital applicable to outstanding partnership
interests ($193.50 and $188.29, respectively,
per limited partnership unit) $2,069,269 $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
June 30, 1998
(unaudited)
<TABLE>
<CAPTION>
Original
Investment Estimated
Company Position Date Cost Fair Value
- -------------------------------- ----------------------- ------------- --------- ----------
<S> <C> <C> <C> <C>
Coleman Natural Products, Inc. 600,935 shares of
Series A Preferred
Stock March 1989 $ 600,935 $ 600,935
188,090 shares of
Common Stock March 1989 268,694 268,694
Warrants to purchase
32,412 shares of Common
Stock November 1990 1 1
--------- ---------
Total $ 869,630 $ 869,630
========= =========
</TABLE>
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, 1998 and 1997
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------ -------------------
1998 1997 1998 1997
-------- -------- -------- ---------
<S> <C> <C> <C> <C>
Investment Income:
Interest and dividends from
short-term and portfolio
investments $28,581 $ 22,828 $64,925 $ 54,264
------- -------- ------- ---------
Expenses:
Administrative fee - 35,302 - 70,605
Professional fees 3,401 3,002 16,518 15,928
Independent General Partners'
fees and expenses - 3,375 - 7,650
Other expenses 2,360 2,168 5,177 6,275
------- -------- ------- ---------
Total expenses 5,761 43,847 21,695 100,458
------- -------- ------- ---------
Net investment gain (loss) 22,820 (21,019) 43,230 (46,194)
Realized gain on sale of portfolio
investments - - 12,500 113,659
------- -------- ------- ---------
Net investment loss and realized gain
allocable to partners 22,820 (21,019) 55,730 67,465
Net change in unrealized appreciation
of portfolio investments - - - (300,062)
------- -------- ------- ---------
Net increase (decrease) in net assets $22,820 $(21,019) $55,730 $(232,597)
======= ======== ======= =========
Net investment gain (loss) per unit of
Limited partner interest $2.13 $(1.97) $5.21 $(4.32)
======= ======== ======= =========
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, 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 six months ended June 30, 1998 9,562 17 46,151 55,730
-------- ------ ---------- ----------
Balances at June 30, 1998 $419,538 $1,394 $1,648,337 $2,069,269
======== ====== ========== ==========
</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, 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 $ 55,730 $ 67,465
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)
Paid in kind dividends (48,046) (16,055)
Change in operating assets and liabilities
(Increase) decrease in other receivables 13,156 (363)
Increase (decrease) in payable to Managing
General Partner (29,580) 5,014
Increase (decrease) in accounts payable (175) 468
-------- ---------
Net cash used in operating activities (21,415) (57,130)
-------- ---------
Cash flows from investing activities:
Exercise of options included in portfolio investments - (9,929)
Investment in short-term investments (5,050) (107,500)
Proceeds from the disposition of portfolio investments 12,500 589,652
Proceeds from maturities of short-term investments 2,516 477,881
-------- ---------
Net cash provided by investing activities 9,966 950,104
-------- ---------
Cash flows used by financing activities-distributions
to partners - (898,580)
-------- ---------
Net decrease in cash (11,449) (5,606)
Cash at beginning of period 13,770 17,211
-------- ---------
Cash at end of period $ 2,321 $ 11,605
======== =========
</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, 1998 and 1997
(unaudited)
<TABLE>
<CAPTION>
1998 1997
----------- -------------
<S> <C> <C>
From investment activities:
Net investment gain (loss) $ 43,230 $ (46,194)
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 resulting from
operations 55,730 (232,597)
From financing activities-distributions to partners - (898,580)
---------- -----------
Net increase (decrease) in net assets 55,730 (1,131,177)
Net assets at beginning of period 2,013,539 3,070,910
---------- -----------
Net assets at end of period $ 2,069,269 $ 1,939,733
========== ===========
</TABLE>
See accompanying notes to financial statements.
8
<PAGE>
BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
Notes to Financial Statements
June 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
June 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 $869,630 and $821,584 (42% and 40% of
total assets, respectively) at June 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
June 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 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>
No Administrative Fees were paid for the periods ended June 30, 1998, due to the
Partnership's termination as of December 31, 1997, more fully discussed in Note
4.
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>
11
<PAGE>
BOETTCHER VENTURE CAPITAL PARTNERS, L.P.
(A Limited Partnership)
Notes to Financial Statements
June 30,1998
(unaudited)
No annual fees and reimbursements to the Individual General Partners were paid
for the periods ended June 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 June 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. 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 and six months ended June 30, 1998, the Partnership had a net
investment gain of $22,820 and $43,230, respectively, representing improvements
of $43,839 and of $89,424 when compared to the losses of $21,019
and $46,194 reported in the respective periods of 1997. The net investment loss
and realized gain allocable to partners for the six months ended June 30, 1998
was a gain of $55,730, compared to a gain of $67,465 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. These transactions resulted in a net realized gain
on the sale of portfolio investments of $113,659. 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 $5,753 (25%) and $10,661 (20%) to
$28,581 and $64,925 for the three and six months ended June 30, 1998 from
$22,828 and $54,264 for the three and six months ended June 30, 1997. These
increases in interest and dividend income in the current quarter are the result
of the maintenance of higher cash balances in the current year.
Total expenses were $5,761 and $21,695 for the three and six months ended June
30, 1998, representing decreases of $38,086 (87%) and $78,763 (78%) when
compared to the corresponding periods in 1997. No fees were paid to the
Managing General Partner and the Individual General Partners in the first half
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 $590 or (4%) for the six
months ended June 30, 1998 when compared to 1997, primarily the result of
increased legal costs related to the dissolution of the Partnership.
Liquidity and Capital Resources
- -------------------------------
Cash for the six months ended June 30, 1998 was $2,321, a decrease of $11,449
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 $21,415 and net cash
provided by investing activities of $9,966. The payable to Managing General
Partner decreased $29,580 due to the termination of the payment of management
fees by the Partnership in its wind down phase.
Net cash provided by investing amounted to $9,966, 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 six months ended June 30,
1998 amounted to $55,730, and is comprised of its net investment gain of $43,230
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: August 14, 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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 2,231
<SECURITIES> 842,944
<RECEIVABLES> 13,156
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,078,499
<CURRENT-LIABILITIES> 22,761
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,055,738
<TOTAL-LIABILITY-AND-EQUITY> 2,055,738
<SALES> 0
<TOTAL-REVENUES> 51,394
<CGS> 0
<TOTAL-COSTS> 21,695
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 29,699
<INCOME-TAX> 0
<INCOME-CONTINUING> 29,699
<DISCONTINUED> 0
<EXTRAORDINARY> 12,500
<CHANGES> 0
<NET-INCOME> 42,199
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
