SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the Quarterly Period Ended March 31, 1996
Or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
Commission file number 2-91941
ML TECHNOLOGY VENTURES, L.P.
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(Exact name of registrant as specified in its charter)
Delaware 13-3213176
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
World Financial Center, North Tower
New York, New York 10281-1326
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 449-1000
Not applicable
================================================================================
Former name, former address and former fiscal year, if changed since last report
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for 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>
ML TECHNOLOGY VENTURES, L.P.
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Balance Sheets as of March 31, 1996 (Unaudited) and December 31, 1995
Statements of Operations for the Three Months Ended March 31, 1996 and 1995
(Unaudited)
Statements of Cash Flows for the Three Months Ended March 31, 1996 and 1995
(Unaudited)
Statement of Changes in Partners' Capital for the Three Months Ended March 31,
1996 (Unaudited)
Notes to Financial Statements (Unaudited)
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
Item 2. Changes in Securities.
Item 3. Defaults upon Senior Securities.
Item 4. Submission of Matters to a Vote of Security Holders.
Item 5. Other Information.
Item 6. Exhibits and Reports on Form 8-K.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
ML TECHNOLOGY VENTURES, L.P.
BALANCE SHEETS
<TABLE>
March 31, 1996 December 31,
(Unaudited) 1995
ASSETS
<S> <C> <C>
Cash and cash equivalents $ 234,598 $ 243,366
Investments - Notes 2 and 6
U.S. Government securities, at amortized cost 3,515,517 4,594,416
Publicly traded securities (cost $1,125,000 at March 31, 1996
and $1,770,581 at December 31, 1995) 1,860,714 1,409,795
Other equity investments, at cost 73,043 73,043
Subordinated Promissory Note - Note 8 150,000 250,000
Accounts receivable (less unamortized discount of $133,270
at December 31, 1995) - Note 7 - 2,266,730
Other receivables 39,977 137,062
-------------- ---------------
TOTAL ASSETS $ 5,873,849 $ 8,974,412
============== ===============
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Accounts payable $ 113,931 $ 37,464
Due to Management Company - Note 5 50,000 174,656
Deferred gain on sale of technology - Note 7 - 535,289
-------------- ---------------
Total liabilities 163,931 747,409
-------------- ---------------
Partners' Capital:
General Partner 54,714 94,464
Limited Partners (69,094 Units) 4,919,490 8,493,325
Unallocated net unrealized appreciation (depreciation) of
investments - Note 2 735,714 (360,786)
-------------- ---------------
Total partners' capital 5,709,918 8,227,003
-------------- ---------------
TOTAL LIABILITIES AND PARTNERS' CAPITAL $ 5,873,849 $ 8,974,412
============== ===============
</TABLE>
See notes to financial statements.
<PAGE>
ML TECHNOLOGY VENTURES, L.P.
STATEMENTS OF OPERATIONS (UNAUDITED)
For the Three Months Ended March 31,
<TABLE>
1996 1995
------------ --------
INCOME
<S> <C> <C>
Royalty and licensing income $ 36,004 $ 366,978
Interest on accounts receivable 49,716 85,828
Other interest income 22,195 25,676
------------ -------------
Total income 107,915 478,482
------------ -------------
EXPENSES
Management fee - Note 5 50,000 174,656
Professional fees 108,349 74,863
Mailing and printing 14,814 14,432
Miscellaneous 1,050 371
------------ -------------
Total expenses 174,213 264,322
------------ -------------
NET OPERATING INCOME (LOSS) (66,298) 214,160
------------ -------------
Net realized gain from research and development ventures - Note 7 618,843 -
Net realized loss from investments - Note 6 (323,693) (221,681)
------------ -------------
NET REALIZED GAIN (LOSS) 295,150 (221,681)
------------ -------------
NET INCOME (LOSS) (allocable to Partners) - Note 3 $ 228,852 $ (7,521)
============ =============
Net income (loss) per unit of limited partnership interest $ 3.28 $ (.11)
====== =======
</TABLE>
See notes to financial statements.
<PAGE>
ML TECHNOLOGY VENTURES, L.P.
STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Three Months Ended March 31,
<TABLE>
1996 1995
------------- -------
CASH FLOWS PROVIDED FROM (USED FOR) OPERATING
ACTIVITIES
<S> <C> <C>
Interest and other income received $ 117,109 $ 372,006
Other operating expenses paid (221,559) (217,249)
------------- ------------
Cash provided from (used for) operating activities (104,450) 154,757
------------- ------------
CASH FLOWS PROVIDED FROM INVESTING ACTIVITIES
Net return (purchase) of investments in U.S. Treasury Bills 1,066,927 (262,447)
Proceeds from the sale or termination of research and development
ventures 2,350,284 -
Proceeds from the repayment of subordinated note 100,000 -
Proceeds from the sale of investments in equity securities 420,908 349,047
------------- ------------
Cash provided from investing activities 3,938,119 86,600
------------- ------------
CASH FLOWS FOR FINANCING ACTIVITIES
Cash distributions:
General Partner (42,267) -
Limited Partners (3,800,170) -
------------- ------------
Cash used for financing activities (3,842,437) -
------------- ------------
Increase (decrease) in cash and cash equivalents (8,768) 241,357
Cash and cash equivalents at beginning of period 243,366 359,001
------------- ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 234,598 $ 600,358
============= ============
Reconciliation of net income (loss) to cash provided from (used for) operating
activities:
Net income (loss) $ 228,852 $ (7,521)
------------- ------------
Adjustments to reconcile net income (loss) to cash provided from
(used for) operating activities:
Net realized (gain) loss (295,150) 221,681
(Increase) decrease in receivables 10,037 (108,309)
Increase (decrease) in payables, net (48,189) 48,906
------------- ------------
Total adjustments (333,302) 162,278
------------- ------------
Cash provided from (used for) operating activities $ (104,450) $ 154,757
============= ============
</TABLE>
See notes to financial statements.
<PAGE>
ML TECHNOLOGY VENTURES, L.P.
STATEMENT OF CHANGES IN PARTNERS' CAPITAL (UNAUDITED)
For the Three Months Ended March 31, 1996
<TABLE>
Unallocated
Net Unrealized
Appreciation
General Limited (Depreciation)
Partner Partners of Investments Total
<S> <C> <C> <C> <C>
Balance at beginning of period $ 94,464 $ 8,493,325 $ (360,786) $ 8,227,003
Cash distribution paid
January 19, 1996 - Note 9 (42,267) (3,800,170) - (3,842,437)
Allocation of net income - Note 3 2,517 226,335 - 228,852
Change in net unrealized appreciation
(depreciation) of investments - - 1,096,500 1,096,500
----------- -------------- -------------- ---------------
Balance at end of period $ 54,714 $ 4,919,490 $ 735,714 $ 5,709,918
=========== ============== ============== ===============
</TABLE>
See notes to financial statements.
<PAGE>
ML TECHNOLOGY VENTURES, L.P.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Organization and Purpose
ML Technology Ventures, L.P. (the "Partnership") is a Delaware limited
partnership formed in April 1984. ML R&D Co., L.P., the general partner of the
Partnership (the "General Partner"), is also a Delaware limited partnership
formed in April 1984, the general partner of which is Merrill Lynch R&D
Management Inc. (the "Management Company"), an indirect subsidiary of Merrill
Lynch & Co., Inc. DLJ Capital Management Corporation (the "Sub-Manager"), an
indirect subsidiary of Donaldson, Lufkin & Jenrette, Inc., is the sub-manager of
the Partnership, pursuant to a sub-management agreement among the Partnership,
the Management Company, the General Partner and the Sub-Manager.
The objective of the Partnership is to achieve cash flow from the
commercialization of a broad range of technologies developed and owned by, or on
behalf of, the Partnership. The Partnership engages in research and development
activities for the development of new technology through contracts, joint
ventures and investments in other partnerships. The Partnership will terminate
no later than January 31, 2005.
2. Significant Accounting Policies
Research and Development Costs - In prior periods, the Partnership incurred
costs in connection with its research and development ventures, including patent
application costs, which were expensed in the period incurred. Research and
development expenses were shown net of value received for the granting of
options to purchase technology being developed. Valuation of Investments - In
accordance with Statement of Financial Accounting Standards No. 115, investments
in available-for-sale securities (publicly traded securities) are accounted for
at market value based on the closing public market price on the last day of the
accounting period. Non-publicly traded securities are accounted for at cost. The
cost of an investment is written down to its fair value when the investment is
determined to be other than temporarily impaired. Use of Estimates - The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. Investment Transactions -
Investment transactions are recorded on the accrual method. Realized gains and
losses on investments sold are computed on a specific identification basis.
Income Taxes - No provision for income taxes has been made since all income and
losses are allocable to the Partners for inclusion in their respective tax
returns. Statements of Cash Flows - The Partnership considers cash held in its
interest-bearing cash account to be cash equivalents. Reclassifications -
Certain reclassifications were made to the prior period financial statements in
order to conform to the current period presentation.
<PAGE>
ML TECHNOLOGY VENTURES, L.P.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
3. Allocation of Partnership Profits and Losses
The Partnership Agreement provides that profits shall be allocated to all
Partners in proportion to their capital contributions until there have been
distributions to the Limited Partners equal to their capital contributions,
after which time 90% will be allocated to the Limited Partners and 10% to the
General Partner until there has been distributed to the Limited Partners an
aggregate amount, since the inception of the Partnership, equal to twice their
capital contributions and thereafter 80% will be allocated to the Limited
Partners and 20% to the General Partner. Losses shall be allocated to all
Partners in proportion to their capital contributions provided, however, that to
the extent profits have been credited in the 90-10 or 80-20 ratio, losses shall
be charged in such ratios in reverse order in which profits were credited.
4. Commitment
The Partnership has an outstanding commitment of $388,957 payable on demand,
when and if called for by MLMS Cancer Research, Inc. The Partnership has a 36.5%
ownership interest in MLMS Cancer Research which is the general partner of ML/MS
Associates, L.P., formerly a research and development joint venture with IDEC
Pharmaceuticals Corporation. The Partnership also owns a 36.2% limited
partnership interest in ML/MS Associates.
5. Related Party Transactions
The Management Company is responsible for the management and administrative
services necessary for the operation of the Partnership. Effective with the
management fee payment due for the quarter ended March 31, 1996, the General
Partner and the Management Company agreed to reduce the management fee payable
by the Partnership to $200,000 per annum from the previous fee payable of 1% of
the aggregate capital contributions to the Partnership, or $698,624 per annum.
6. Investments in Equity Securities as of March 31, 1996
In accordance with the Statement of Financial Accounting Standards No. 115 ("FAS
115"), "Accounting for Certain Investments in Debt and Equity Securities",
unrealized gain or loss from securities available for sale (publicly traded
securities) is reflected as a separate component of partners' capital.
Additionally, debt and equity securities which do not have readily determinable
market values are not marked to market and the market values of these securities
are not reflected in the balance sheet.
<TABLE>
Common Unrealized Market
Shares Cost Gain Value
Publicly Traded Securities:
<S> <C> <C> <C> <C>
Photon Technology International, Inc. 1,190,476 $ 1,125,000 $ 735,714 $ 1,860,714
============== ============ ===============
</TABLE>
<PAGE>
ML TECHNOLOGY VENTURES, L.P.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
During the quarter ended March 31, 1996, the Partnership sold its remaining
common shares of Ecogen Inc. for $321,889, realizing a loss of $323,692.
During March 1995, in a non-cash transaction, the Partnership exchanged its
warrant to purchase 275,000 shares of Interleaf, Inc. common stock at $3.50 per
share for 72,368 shares of Interleaf common stock. Such shares were sold during
March 1995 in the public market for $373,000, resulting in a realized loss of
$222,000.
At March 31, 1996, the Partnership owns a 36.2% limited partnership interest in
ML/MS Associates, L.P. and 420,000 shares of MLMS Cancer Research, Inc. ("CRI")
common stock, the general partner of ML/MS Associates, representing a 36.5%
ownership of CRI. CRI has a 1% ownership interest in ML/MS Associates. On March
16, 1995, the research and development joint venture between IDEC
Pharmaceuticals Corporation and ML/MS Associates was terminated. In connection
with the termination and cancellation of all future rights to receive royalties
from the sale of commercialized products, ML/MS Associates received 1,000,000
shares of unregistered IDEC common stock and 69,375 shares of 10% dividend
accumulating preferred stock of IDEC. The preferred stock is not convertible
until March 15, 1997. On March 15, 1997, assuming the conversion price of the
preferred stock is $3.75 or above at the time of conversion, ML/MS Associates'
preferred stock will convert into $8,325,000 of IDEC common stock, representing
$120 worth of common stock per share of preferred stock. On March 16, 1995 and
March 29, 1996 (the last trading day of the fiscal quarter), the closing public
market price per share of IDEC's common stock on the NASDAQ National Market was
$4.50 and $22.25, respectively.
7. Accounts Receivable
In June 1988, the Partnership terminated its research and development joint
venture with United AgriSeeds, Inc. Pursuant to the termination agreement,
accounted for as an installment sale, the Partnership received $10 million over
an eight-year period which began in January 1989. In March 1996, the Partnership
received the final installment payment of $2.4 million from United AgriSeeds
which was due in September 1996. The $2.4 million payment resulted in a
$1,731,441 return of capital, $49,716 of interest income and a $618,843 realized
gain. The $618,843 realized gain included the recognition of an additional
$83,554 realized gain due to the early receipt of the payment from the company.
8. Subordinated Promissory Note
In December 1995, Photon Technology International, Inc. agreed to pay the
Partnership $770,761 to satisfy its $500,000 subordinated note obligation and
related accrued interest. The $770,761 will be paid in 24 monthly installments
of $20,000 with a $291,761 final payment due in December 1997. The Partnership
had
<PAGE>
ML TECHNOLOGY VENTURES, L.P.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
written-off $250,000 of the principal amount of such note in 1994. As a result,
the first $250,000 paid under the new arrangement will be recorded as a return
of principal on the note. As of March 31, 1996, the Partnership had received 5
installment payments totaling $100,000 from Photon Technology.
9. Cash Distributions
Cash distributions paid to Partners during the periods presented and cumulative
cash distributions paid from inception of the Partnership through March 31, 1996
are listed below:
<TABLE>
General Limited Per $1,000
Distribution Date Partner Partners Unit
<S> <C> <C> <C> <C> <C>
Inception to December 31, 1995 $ 590,969 $ 53,133,286 $ 769
January 19, 1996 42,267 3,800,170 55
------------- ---------------- ------
Cumulative totals at March 31, 1996 $ 633,236 $ 56,933,456 $ 824
============= ================ ======
</TABLE>
In May 1996, the General Partner approved an additional cash distribution to
Partners totaling $3,493,124; $3,454,700, or $50 per Unit, to the Limited
Partners and $38,424 to the General Partner. This distribution is scheduled to
be paid in July 1996 to Limited Partners of record on July 1, 1996.
10. Interim Financial Statements
In the opinion of ML R&D Co., L.P., the managing general partner of the
Partnership, the unaudited financial statements as of March 31, 1996, and for
the three month period then ended, reflect all adjustments necessary for the
fair presentation of the results of the interim period.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Liquidity and Capital Resources
From 1985 to 1991, the Partnership funded $59.6 million of research and
development commitments to 16 individual research and development ventures (the
"R&D Ventures"). This amount represents 95% of the original $62.5 million of net
proceeds to the Partnership. The Partnership has no unfunded research and
development commitments and will not enter into new R&D Ventures in the future.
On January 19, 1996, the Partnership made a cash distribution to Partners
totaling $3,842,437; $3,800,170, or $55 per Unit, to Limited Partners of record
on January 1, 1996, and $42,267 to the General Partner. As of March 31, 1996,
cumulative cash distributions to Partners totaled $57,566,692; $56,933,456, or
$824 per Unit, to the Limited Partners and $633,236 to the General Partner.
During March 1996, the Partnership received the final $2.4 million installment
payment due from United AgriSeeds, Inc. relating to the 1988 termination of the
joint venture between the Partnership and United AgriSeeds. Additionally, during
the three months ended March 31, 1996, the Partnership received proceeds
totaling $421,000 from the sale of its remaining investment in Ecogen Inc.
(including $99,000 from shares sold in December 1995), and also received
payments totaling $100,000 relating to its subordinated note agreement with
Photon Technology International, Inc.
As of March 31, 1996, the Partnership had $3.5 million invested in Permitted
Temporary Investments ("PTIs"), as such term is defined in the Partnership
Agreement, with maturities of less than one year and $235,000 in an interest
bearing cash account. For the three months ended March 31, 1996, the Partnership
earned $13,000 from its PTIs. Interest earned from PTIs in future years is
subject to fluctuations in short-term interest rates and amounts available for
investment in PTIs. It is anticipated that funds needed to cover future
operating expenses will be obtained from the Partnership's existing cash
reserves, future royalty and licensing income, interest income from PTIs and
proceeds received by the Partnership from the sale of its remaining assets.
In May 1996, the General Partner approved a cash distribution to Partners
totaling $3,493,124; $3,454,700, or $50 per Unit, to Limited Partners of record
on July 1, 1996, and $38,424 to the General Partner. The distribution is
scheduled to be paid in July 1996.
The Partnership is working toward a final liquidation of its assets and
termination of the Partnership in 1998 or earlier, if possible. The timing of
such liquidation of the Partnership's assets and termination of the Partnership
is contingent upon, among other things, market conditions and contractual and
securities laws restrictions and no assurances can be given that the Partnership
will be able to complete all steps necessary to liquidate its assets and
terminate in such time-frame.
As was provided in the Partnership's prospectus delivered to Limited Partners in
connection with their investment, and as disclosed in subsequent filings and
reports, the Partnership is obligated to pay, and has paid accordingly, an
annual management fee equal to 2% of aggregate capital contributions during the
four years subsequent to its closing ($1,397,250 annually) and, thereafter, 1%
of aggregate capital contributions ($698,624 annually). The original objectives
of the Partnership anticipated that the bulk of the Partnership's revenues would
be earned between 1988 and 1996. Therefore, in consideration of the
Partnership's originally contemplated objectives, the reduction of assets under
management and the anticipated termination of the Partnership, the General
Partner and the Management Company, while not required to do so, have reduced
the annual management fee payable by the Partnership from $698,624 to $200,000,
commencing with the management fee payment due for the first quarter of 1996.
Results of Operations
For the three months ended March 31, 1996 and 1995, the Partnership had net
income of $229,000 and a net loss of $8,000, respectively. Net income or loss is
comprised of 1) net operating income or loss and 2) net realized gain or loss.
Net Operating Income or Loss - For the three months ended March 31, 1996 and
1995, the Partnership had a net operating loss of $66,000 and net operating
income of $214,000, respectively. The decrease in net operating income for the
1996 period compared to the 1995 period primarily was the result of a $370,000
decrease in total income, partially offset by a $90,000 decrease in operating
expenses. The decrease in total income primarily resulted from a decrease in
royalty and licensing income relating to the expiration of the first research
and development venture with Gen-Probe Incorporated (R&D Venture 1). During the
June 1995 quarter, the Partnership reached the maximum cumulative royalties to
be paid under the royalty agreement relating to Gen-Probe R&D Venture 1 and,
therefore, will not receive future royalties from Gen-Probe relating to this
venture. Also contributing to the decline in total income was a $36,000
reduction in interest earned from the reduced receivable balance due from United
AgriSeeds. As stated above, the Partnership received the final payment due from
United AgriSeeds in March 1996.
Operating expenses declined by $90,000 for the 1996 period compared to the 1995
period due to a $125,000 decrease in the management fee, as discussed above,
offset by a $34,000 increase in professional fees. The increase in professional
fees resulted from an increase in legal fees incurred by the Partnership during
the 1996 period.
Realized Gains and Losses - For the three months ended March 31, 1996, the
Partnership had a net realized gain totaling $295,000. During March 1996, the
Partnership received the final $2.4 million installment payment from United
AgriSeeds, as discussed above, resulting in the recognition of a $619,000
realized gain during the quarter. Additionally, the Partnership sold its
remaining common shares of Ecogen for $322,000, realizing a loss of $324,000.
For the three months ended March 31, 1995, the Partnership had a net realized
loss of $222,000. During March 1995, in a non-cash transaction, the Partnership
exchanged its warrant to purchase 275,000 shares of Interleaf, Inc. common stock
at $3.50 per share for 72,368 shares of Interleaf common stock. Such shares were
sold in March 1995 in the public market for $373,000, resulting in a realized
loss of $222,000.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
The Partnership is not a party to any material pending legal proceedings.
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.
None.
<PAGE>
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
(4) (A) Amended and Restated Certificate and
Agreement of Limited Partnership of the
Partnership dated as of April 23, 1984, as
amended through February 22, 1985, included
as Exhibit A to the Prospectus of the
Partnership dated March 11, 1985.*
(B) (i) Amendment dated August 20, 1985 to the
Amended and Restated Certificate and
Agreement of Limited Partnership of the
Partnership.**
(B) (ii) Amendment dated August 28, 1985 to the
Amended and Restated Certificate and
Agreement of Limited Partnership of the
Partnership.***
(10) (a) Management Agreement dated as of May 23, 1991 among
the Partnership, Management Company and the Managing
General Partner.****
(10) (b) Sub-Management Agreement dated as of May 23, 1991
among the Partnership, Management Company, the Managing
General Partner and the Sub-Manager.****
(10) (c) Amendment dated March 27, 1996 to the
Management Agreement among the Partnership,
Management Company and the Managing General
Partner.
(10) (d) Amendment dated March 27, 1996 to the
Sub-Management Agreement among the
Partnership, Management Company, the
Managing General Partner and the
Sub-Manager.
(27) Financial Data Schedule.
(b) No reports on Form 8-K have been filed since the beginning of
the period covered by this report.
- ------------------------------
* Incorporated by reference to the Partnership's Annual Report on Form
10-K for the fiscal year ended December 31, 1984 filed with the
Securities and Exchange Commission on August 12, 1985.
** Incorporated by reference to the Partnership's Quarterly Report on Form
10-Q for the quarter ended September 30, 1985 filed with the Securities
and Exchange Commission on November 12, 1985.
*** Incorporated by reference to the Partnership's Quarterly Report on Form
10-Q for the quarter ended March 31, 1986 filed with the Securities and
Exchange Commission on May 14, 1986.
**** Incorporated by reference to the Partnership's Annual Report on Form
10-K for the fiscal year ended December 31, 1991 filed with the
Securities and Exchange Commission on March 30, 1992.
<PAGE>
SIGNATURES
Pursuant to the requirements 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.
ML TECHNOLOGY VENTURES, L.P.
By: ML R&D Co., L.P.
its General Partner
By: Merrill Lynch R&D Management Inc.
its General Partner
By: /s/ Kevin K. Albert
Kevin K. Albert
President
(Principal Executive Officer)
By: /s/ Diane T. Herte
Diane T. Herte
Vice President and Treasurer
(Principal Financial and Accounting Officer)
Date: May 14, 1996
AMENDMENT TO MANAGEMENT AGREEMENT
Amendment dated March 27, 1996 (the "Amendment") to Management Agreement
made as of October 15, 1984 (the "Management Agreement") between ML Technology
Ventures, L.P. (the "Partnership") and Merrill Lynch R&D Management Inc. (the
"Management Company").
W I T N E S S E T H:
WHEREAS, the Partnership and the Management Company have previously
entered into the Management Agreement, pursuant to which the Management Company
agreed to furnish certain services to the Partnership; and
WHEREAS, the Partnership and the Management Company desire to reduce
the compensation to be paid to the Management Company under the Management
Agreement;
NOW, THEREFORE, the parties to the Agreement hereby agree as follows:
1. Article III of the Management Agreement is hereby revised to provide in
its entirety as follows:
ARTICLE III
Compensation of the Management Company
For the services rendered, the facilities furnished and the
expenses assumed by the Management Company, the Partnership shall pay
to the Management Company an annual fee of $200,000.00. Such fee is
payable quarterly in arrears.
<PAGE>
2. This Amendment is effective with respect to fees accruing beginning on
January 1, 1996.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment as of the date first above written.
ML TECHNOLOGY VENTURES, L.P.
By ML R&D CO., L.P.
General Partner
By MERRILL LYNCH R&D MANAGEMENT INC.
General Partner
By: /s/ Robert F. Aufenanger
Robert F. Aufenanger
Executive Vice-President
MERRILL LYNCH R&D MANAGEMENT INC.
By: /s/ Robert F. Aufenanger
Robert F. Aufenanger
Executive Vice-President
AMENDMENT TO SUB-MANAGEMENT AGREEMENT
Amendment dated March 27, 1996 (the "Amendment") to Sub-Management
Agreement made May 23, 1991 (the "Sub-Management Agreement") between Merrill
Lynch R&D Management Inc. (the "Management Company") and DLJ Capital Management
Corporation (the "Sub-Manager").
W I T N E S S E T H:
WHEREAS, the Management Company acts as the management company to ML
Technology Ventures, L.P. (the "Partnership") pursuant to a Management Agreement
dated May 15, 1984 (the "Management Agreement");
WHEREAS, the Sub-Manager provides services to the Management Company
pursuant to the Sub-Management Agreement for compensation which is based on
compensation received by the Management Company pursuant to Article III of the
Management Agreement; and
WHEREAS, based upon a change to be adopted in Article III of the
Management Agreement in accordance with an amendment to that agreement, a form
of which is attached hereto as Exhibit A, the Management Company and the
Sub-Manager have determined to amend Article III of the Sub-Management
Agreement;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Paragraph (a) of Article III of the Sub-Management Agreement is hereby
revised to provide in its entirety as follows:
(a) For the services rendered under this Agreement, the
Management Company shall pay to the Sub-Manager 95% of the compensation
received by the Management Company pursuant to Article III of the
Management Agreement, as amended. In addition, the Management Company
shall pay to the Sub-Manager an annual fee of $225,000. Both fees are
payable quarterly in arrears to the Sub-Manager as promptly as possible
after the payment to the Management Company of the compensation
received under Article III of the Management Agreement, as amended. If
the Sub-Manager shall serve for less than the whole of any period
specified in this Article, the compensation payable to the Sub-Manager
shall be prorated.
<PAGE>
2. This Amendment is effective with respect to fees accruing beginning on
January 1, 1996.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first above written.
MERRILL LYNCH R&D MANAGEMENT INC.
By: /s/ Robert F. Aufenanger
Robert F. Aufenanger
Executive Vice-President
DLJ CAPITAL MANAGEMENT CORPORATION
By: /s/ Robert E. Curry
Robert E. Curry
Vice-President
<PAGE>
EXHIBIT A
AMENDMENT TO MANAGEMENT AGREEMENT
Amendment dated March 27, 1996 (the "Amendment") to Management Agreement
made as of October 15, 1984 (the "Management Agreement") between ML Technology
Ventures, L.P. (the "Partnership") and Merrill Lynch R&D Management Inc. (the
"Management Company").
W I T N E S S E T H:
WHEREAS, the Partnership and the Management Company have previously
entered into the Management Agreement, pursuant to which the Management Company
agreed to furnish certain services to the Partnership; and
WHEREAS, the Partnership and the Management Company desire to reduce
the compensation to be paid to the Management Company under the Management
Agreement;
NOW, THEREFORE, the parties to the Agreement hereby agree as follows:
1. Article III of the Management Agreement is hereby revised to provide in
its entirety as follows:
ARTICLE III
Compensation of the Management Company
For the services rendered, the facilities furnished and the
expenses assumed by the Management Company, the Partnership shall pay
to the Management Company an annual fee of $200,000.00. Such fee is
payable quarterly in arrears.
<PAGE>
2. This Amendment is effective with respect to fees accruing beginning on
January 1, 1996.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment as of the date first above written.
ML TECHNOLOGY VENTURES, L.P.
By ML R&D CO., L.P.
General Partner
By MERRILL LYNCH R&D MANAGEMENT INC.
General Partner
By: /s/ Robert F. Aufenanger
Robert F. Aufenanger
Executive Vice-President
MERRILL LYNCH R&D MANAGEMENT INC.
By: /s/ Robert F. Aufenanger
Robert F. Aufenanger
Executive Vice-President
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ML
TECHNOLOGY VENTURES, L.P.'S QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD ENDED
MARCH 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-1-1996
<PERIOD-END> MAR-31-1996
<CASH> 234,598
<SECURITIES> 5,599,274
<RECEIVABLES> 39,977
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 5,873,849
<CURRENT-LIABILITIES> 163,931
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 5,709,918
<TOTAL-LIABILITY-AND-EQUITY> 5,873,849
<SALES> 0
<TOTAL-REVENUES> 107,915
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 174,213
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 228,852
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
