<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 1997
/ / 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 0-21464
PRUTECH RESEARCH AND DEVELOPMENT PARTNERSHIP II
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
California 13-3268435
- --------------------------------------------------------------------------------
(State or other jurisdiction
of incorporation or organization) (I.R.S. Employer Identification No.)
440 Mission Court, Suite 250, Fremont, California
94539
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (510) 656-1855
N/A
- --------------------------------------------------------------------------------
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 CK No _
<PAGE>
Part I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PRUTECH RESEARCH AND DEVELOPMENT PARTNERSHIP II
(a limited partnership)
STATEMENTS OF NET ASSETS
(in process of liquidation)
(unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------
Assets
Cash and cash equivalents $ 2,340,107 $ 4,718,876
Investments in equity securities 2,224,156 20,078,870
------------- -------------
Total assets 4,564,263 24,797,746
------------- -------------
Liabilities
Estimated liquidation costs 1,585,252 1,593,996
Accrued expenses and other liabilities 44,649 101,801
Accrued management fee -- 500,000
------------- -------------
Total liabilities 1,629,901 2,195,797
------------- -------------
Contingencies
Net assets in liquidation $ 2,934,362 $22,601,949
------------- -------------
------------- -------------
Net assets in liquidation
Limited partners (100,000 units issued and outstanding) $ 2,572,426 $20,273,254
General partner 361,936 2,328,695
------------- -------------
Total net assets in liquidation $ 2,934,362 $22,601,949
------------- -------------
------------- -------------
- -----------------------------------------------------------------------------------------------------
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
(in process of liquidation)
(unaudited)
<TABLE>
<CAPTION>
LIMITED GENERAL
PARTNERS PARTNERS TOTAL
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
Net assets in liquidation--December 31, 1996 $ 20,273,254 $ 2,328,695 $ 22,601,949
Changes in estimated liquidation values of assets and
liabilities 1,299,172 144,352 1,443,524
Distributions (19,000,000) (2,111,111) (21,111,111)
------------ ----------- ------------
Net assets in liquidation--March 31, 1997 $ 2,572,426 $ 361,936 $ 2,934,362
------------ ----------- ------------
------------ ----------- ------------
- -----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these statements
</TABLE>
2
<PAGE>
PRUTECH RESEARCH AND DEVELOPMENT PARTNERSHIP II
(a limited partnership)
STATEMENT OF OPERATIONS
(going concern basis)
Three Months Ended March 31, 1996
(unaudited)
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------------------------
REVENUES
Termination of royalty rights $3,472,000
Gain on sale of investments in equity securities 808,050
Royalty income 184,415
Interest and other income 151,320
----------
4,615,785
----------
EXPENSES
Management fee 500,000
General and administrative 76,282
----------
576,282
----------
Net income $4,039,503
----------
----------
ALLOCATION OF NET INCOME
Limited partners $3,635,553
----------
----------
General partner $ 403,950
----------
----------
Net income per limited partnership unit $ 36.36
----------
----------
- -------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of this statement
</TABLE>
3
<PAGE>
PRUTECH RESEARCH AND DEVELOPMENT PARTNERSHIP II
(a limited partnership)
STATEMENT OF CASH FLOWS
(going concern basis)
Three Months Ended March 31, 1996
(unaudited)
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Royalty income received $ 331,975
Interest and other income received 148,770
General and administrative expenses paid (47,977)
Evaluation and monitoring expenses paid (9,061)
Management fee paid (500,000)
Cash received from other assets 462,586
-----------
Net cash provided by operating activities 386,293
-----------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from the termination of royalty rights 3,472,000
Proceeds from the sale of investments in equity securities 1,160,428
Collection of note receivable 19,031
Purchase of U.S. Treasury bills held in escrow (1,169,490)
Redemption of U.S. Treasury bills held in escrow 1,171,800
-----------
Net cash provided by investing activities 4,653,769
-----------
Net increase in cash and cash equivalents 5,040,062
Cash and cash equivalents at beginning of period 2,936,616
-----------
Cash and cash equivalents at end of period $ 7,976,678
-----------
-----------
- -------------------------------------------------------------------------------------------------
RECONCILIATION OF NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES
Net income $ 4,039,503
-----------
Adjustments to reconcile net income to net cash
provided by operating activities:
Gain on sale of investments in equity securities (808,050)
Termination of royalty rights (3,472,000)
Changes in:
Due from affiliate 462,586
Royalties receivable 147,560
Interest receivable (2,549)
Accrued expenses and other liabilities 19,243
-----------
Total adjustments (3,653,210)
-----------
Net cash provided by operating activities $ 386,293
-----------
-----------
- -------------------------------------------------------------------------------------------------
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING ACTIVITIES
Ecogen Inc. completed a 1:5 reverse stock split which resulted in the receipt of 102,165 shares
of common stock in exchange for 510,827 shares of common stock.
Silicon Valley Research, Inc. completed a 1:2 reverse stock split which resulted in the receipt
of 146,806 shares of common stock in exchange for 293,612 shares of common stock.
- -------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of this statement
</TABLE>
4
<PAGE>
PRUTECH RESEARCH AND DEVELOPMENT PARTNERSHIP II
(a limited partnership)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1997
(unaudited)
A. General
These financial statements have been prepared without audit. In the opinion
of management, the financial statements contain all adjustments (consisting of
only normal recurring adjustments) necessary to fairly present the financial
statements of PruTech Research and Development Partnership II (the
'Partnership') as of March 31, 1997, subject to the effects of any further
liquidation accounting adjustments that would have been required had the
realizable values of certain assets been known when the Partnership first
adopted the liquidation basis of accounting. (See discussion below.)
Certain information and footnote disclosures normally included in annual
financial statements prepared in accordance with generally accepted accounting
principles have been omitted. It is suggested that these financial statements be
read in conjunction with the financial statements and notes thereto included in
the Partnership's Annual Report on Form 10-K filed with the Securities and
Exchange Commission for the year ended December 31, 1996.
In September 1996, R&D Funding Corp (the 'General Partner') mailed to all
limited partners a Consent Solicitation Statement (the 'Statement') asking for
their written consent to approve a plan of dissolution and liquidation of the
Partnership (the 'Plan'), as more fully described in the Statement. On October
30, 1996, holders of 68.4% of the limited partnership units approved the Plan.
Accordingly, the Plan has been adopted.
In accordance with the terms of the Plan, the General Partner is proceeding
to sell or otherwise dispose of the Partnership's remaining investments and
distribute the resulting proceeds (reduced by a working capital reserve to
satisfy any liabilities or contingencies of the Partnership) to the partners in
accordance with the terms of the Agreement of Limited Partnership, as amended
(the 'Partnership Agreement'). Due to the nature of certain remaining
investments of the Partnership, the General Partner is not able to predict with
any degree of certainty the timing of sales, the proceeds that will be received
or the cash amounts that may ultimately be available for distribution by the
Partnership, except as otherwise disclosed herein. It is not expected that the
Partnership's eventual total distributions will equal the partners' initial
investment.
As a result of the adoption of the Plan, the Partnership adopted the
liquidation basis of accounting effective December 31, 1996, whereby assets are
valued at their estimated net realizable values and liabilities stated at their
estimated settlement amounts. However, due to the nature of certain of the
Partnership's remaining investments, the General Partner is not able to predict
with any degree of certainty the amounts which will be realized from these
investments and therefore, such assets continue to be carried at cost.
Accruals totaling approximately $1,594,000 were recorded as of December 31,
1996 for the estimated costs of liquidating the Partnership which include, but
are not limited to, costs of selling or otherwise disposing of the Partnership's
remaining investments and general and administrative costs through the estimated
conclusion of liquidation. The General Partner estimates that the final
liquidation of the Partnership's remaining investments will occur by December
31, 1997; however, due to the nature of the remaining investments, liquidation
may take longer.
During the three months ended March 31, 1997, the Partnership reflected an
increase of $1,444,000 in the estimated net liquidation values of its assets and
liabilities. Approximately $1,282,000 of the increase is attributed to the
valuation as of March 31, 1997 of certain of the Partnership's remaining
investments which were previously carried at cost (see Notes B and C for
additional discussion). The remainder of the increase is principally attributed
to market fluctuations in the Partnership's remaining investments in equity
securities as well as interest earned on the Partnership's cash and cash
equivalents. No significant adjustments to previously recorded liability amounts
were required.
5
<PAGE>
B. Royalties
Pursuant to an agreement dated as of March 31, 1997 between the Partnership
and Ecogen Inc. ('Ecogen'), the Partnership assigned to Ecogen its right, title
and interest in and to certain technologies, products and property licensed to
Ecogen and agreed to terminate all license agreements with Ecogen in exchange
for 136,000 shares of Ecogen common stock. Ecogen agreed to register such shares
of common stock with the Securities and Exchange Commission by May 15, 1997,
which will allow the Partnership to sell such shares after the Commission has
declared the registration statement effective. No further royalty payments will
be received by the Partnership from Ecogen as a result of this agreement.
C. Investments in Equity Securities
Investments in equity securities include the following:
<TABLE>
<CAPTION>
March 31, 1997 December 31, 1996
----------------------------- -----------------------------
Estimated Estimated
net realizable net realizable
Shares value Shares value
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Ecogen Inc.--Common Stock 231,665 $ 818,277 102,165 $ 264,352
Synbiotics Corporation--Common Stock 125,503 468,074 293,003 1,042,291
Silicon Valley Research, Inc.--Common Stock 84,614 94,816 84,614 169,229
Optical Specialties, Inc.--Common Stock* 291,988 -- 291,988 --
Optical Specialties, Inc.--Preferred Stock* 144,666 43,400 144,666 43,400
Biocompatibles International plc--Common Stock -- -- 942,045 18,557,380
Navigation Technologies
Corporation--Common Stock** 2,284,541 799,589 2,284,541 2,218
-------------- --------------
$2,224,156 $ 20,078,870
-------------- --------------
-------------- --------------
</TABLE>
* Position carried at cost as of March 31, 1997 and December 31, 1996.
** Position carried at cost as of December 31, 1996.
As more fully discussed in Note F, the Partnership has realized approximately
$1,075,000 of the March 31, 1997 $2,224,000 value from sales of these securities
during April 1997. The remaining amount of approximately $1,149,000 reflects the
March 31, 1997 prices for securities which are marketable and, as of May 12,
1997, fluctuations in share prices from the March 31, 1997 prices would not have
a significant impact on the estimated net realizable values of the Partnership's
assets. However, there is no assurance that the Partnership would receive these
amounts in the event of the sale of its position in these securities.
Ecogen Inc.
During the first quarter of 1997, the Partnership sold 6,500 shares of Ecogen
common stock for approximately $25,000. The December 31, 1996 carrying amount
for Ecogen common stock reflected the net amount realized on these sales.
Additionally, pursuant to an agreement which closed March 31, 1997, the
Partnership received 136,000 shares of Ecogen common stock as more fully
discussed in Note B. Subsequent to March 31, 1997, the Partnership sold 11,500
shares of Ecogen common stock for approximately $34,000 as discussed in Note F.
Synbiotics Corporation
During the first quarter of 1997, the Partnership sold 167,500 shares of
Synbiotics Corporation common stock for approximately $655,000. The December 31,
1996 carrying amount for Synbiotics Corporation common stock reflected the net
amount of approximately $594,000 realized on the sales of 152,500 of such shares
through March 14, 1997. Subsequent to March 31, 1997, the Partnership sold
55,000 shares of Synbiotics Corporation common stock for approximately $195,000
as discussed in Note F.
Silicon Valley Research, Inc.
The Partnership sold 41,000 shares of Silicon Valley Research, Inc. common
stock during April 1997 for approximately $46,000 as discussed in Note F.
6
<PAGE>
Biocompatibles International plc
On February 7, 1997, the Partnership sold its remaining 942,045 shares of
Biocompatibles International plc common stock for approximately $18,557,000
representing the liquidation of the most significant remaining asset of the
Partnership. The December 31, 1996 carrying amount of this investment reflected
the net amount realized on this sale.
Navigation Technologies Corporation
The Partnership sold its remaining 2,284,541 shares of Navigation
Technologies Corporation ('Navigation Technologies') common stock during April
1997 for approximately $800,000 as discussed in Note F.
D. Related Parties
The General Partner and its affiliates perform certain services for the
Partnership (for which they are reimbursed through the management fee) which
include but are not limited to: accounting and financial management; registrar,
transfer and assignment functions; asset management; investor communications and
other administrative services. The Partnership also reimburses an affiliate of
the General Partner for printing services. These costs and expenses were
approximately $504,000 for the three months ended March 31, 1996. Printing costs
payable to an affiliate of the General Partner (included within accrued expenses
and other liabilities) were approximately $5,000 as of March 31, 1997 and
December 31, 1996.
Additionally, in conjunction with the adoption of the liquidation basis of
accounting, the Partnership recorded an accrual for the estimated future costs
expected to be incurred to liquidate the Partnership. Included in these
liquidation cost estimates as of March 31, 1997 and December 31, 1996 are
approximately $1,507,000 expected to be charged by the General Partner and its
affiliates during the anticipated liquidation period. The actual charges will
depend primarily upon the length of the time required to liquidate the
Partnership and may differ from the amount accrued.
Prudential Securities Incorporated, an affiliate of the General Partner,
owned 340 limited partnership units at March 31, 1997.
The Partnership maintains an account with the Prudential Institutional
Liquidity Portfolio Fund, an affiliate of the General Partner, for investment of
its available cash in short-term instruments pursuant to the guidelines
established by the Partnership Agreement.
The Partnership has engaged in research and development co-investment
projects with PruTech Research and Development Partnership, PruTech Research and
Development Partnership III, and PruTech Project Development Partnership
(collectively, the 'PruTech R&D Partnerships'), for which R&D Funding Corp
serves as the general partner. The allocation of the co-investment projects'
profits or losses among the PruTech R&D Partnerships is consistent with the
costs incurred to fund the research and development projects.
E. Contingencies
On April 15, 1994 a multiparty petition captioned Mack et al. v. Prudential
Securities Incorporated et al. (Cause No. 94-17695) was filed in the 80th
Judicial District Court of Harris County, Texas, purportedly on behalf of
investors in the Partnership against the Partnership, the General Partner,
Prudential Securities Incorporated, The Prudential Insurance Company of America
and a number of other defendants. The petition alleges common law fraud, fraud
in the inducement and negligent misrepresentation in connection with the
offering of the Partnership units; negligence and breach of fiduciary duty in
connection with the operation of the Partnership; civil conspiracy; and
violations of the federal Securities Act of 1933 (sections 11 and 12), as
amended, and of the Texas Securities and Deceptive Trade Practices statutes. The
suit seeks, among other things, compensatory and punitive damages, costs and
attorneys' fees. The ultimate outcome of this litigation as well as the impact
on the Partnership cannot presently be determined.
The General Partner, Prudential Securities Incorporated and the Partnership
believe they have meritorious defenses to the complaint and intend to vigorously
defend themselves against this action. Additionally, the General Partner
believes that the litigation discussed above will not have an adverse impact on
its ability to liquidate the Partnership in accordance with the Plan and in the
time frame currently contemplated by the General Partner.
7
<PAGE>
F. Subsequent Events
During April 1997, the Partnership sold all of its remaining shares of
Navigation Technologies common stock, 11,500 shares of Ecogen common stock,
41,000 shares of Silicon Valley Research, Inc. common stock, and 55,000 shares
of Synbiotics Corporation common stock for approximately $800,000, $34,000,
$46,000 and $195,000, respectively. The March 31, 1997 carrying amounts of these
investments reflect the net amounts realized from these sales.
8
<PAGE>
PRUTECH RESEARCH AND DEVELOPMENT PARTNERSHIP II
(a limited partnership)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
At March 31, 1997, the Partnership had cash and cash equivalents of
approximately $2,340,000 which is approximately $2,379,000 less than the
Partnership's cash balance at December 31, 1996. This decrease in cash was
primarily due to distributions made in excess of proceeds from the sales of
certain investments in equity securities as further discussed below, in addition
to the payment of the fourth quarter 1996 management fee.
In September 1996, R&D Funding Corp (the 'General Partner') mailed to all
limited partners a Consent Solicitation Statement (the 'Statement') asking for
their written consent to approve a plan of dissolution and liquidation of the
Partnership (the 'Plan'), as more fully described in the Statement. Holders of
68.4% of the limited partnership units approved the Plan on October 30, 1996 and
accordingly, the Plan has been adopted. In accordance with the terms of the
Plan, the General Partner is proceeding to sell or otherwise dispose of the
Partnership's remaining investments and distribute the resulting proceeds
(reduced by a working capital reserve to satisfy any liabilities or
contingencies of the Partnership) to the partners in accordance with the terms
of the Partnership Agreement. Due to the nature of certain remaining investments
of the Partnership, the General Partner is not able to predict with any degree
of certainty the timing of sales, the proceeds that will be received or the cash
amounts that may ultimately be available for distribution by the Partnership
except as otherwise disclosed herein. It is not expected that the Partnership's
eventual total distributions will equal the partners' initial investment. The
General Partner estimates that the final liquidation of the remaining
investments will occur by December 31, 1997, however, due to the nature of the
remaining investments, liquidation may take longer.
During the three months ended March 31, 1997, the Partnership reflected an
increase of $1,444,000 in the estimated net liquidation values of its assets and
liabilities. Approximately $1,282,000 of the increase is attributed to the
valuation as of March 31, 1997 of the Partnership's remaining investments in
Ecogen and Navigation Technologies which were previously carried at cost as
further discussed below. The remainder of the increase is principally attributed
to market fluctuations in the Partnership's remaining investments in equity
securities as well as interest earned on the Partnership's cash and cash
equivalents. No significant adjustments to previously recorded liability amounts
were required.
As of March 31, 1997, the Partnership had investments in equity securities
with an estimated net realizable value of approximately $2,224,000, of which
approximately $1,075,000 has been realized from sales of these securities in
April 1997 as discussed below. Certain of the Partnership's remaining
investments are in development stage companies which are more speculative and
higher in risk than other equity investments. The realization of the estimated
net realizable value of these remaining equity securities is further impacted by
certain sale restrictions and market volume capacity. The Partnership also holds
royalty positions whose values are not readily determinable and, as such, these
assets are carried at zero. As discussed in the Statement, the amount to be
distributed by the Partnership in future quarters will be based on the extent to
which the value of its remaining equity securities can be realized, the sale
proceeds or revenue stream from royalties, and, to a lesser extent, interest
income.
Pursuant to an agreement dated as of March 31, 1997 between the Partnership
and Ecogen, the Partnership assigned to Ecogen its right, title and interest in
and to certain technologies, products and property licensed to Ecogen and agreed
to terminate all license agreements with Ecogen in exchange for 136,000 shares
of Ecogen common stock. Ecogen agreed to register such shares of common stock
with the Securities and Exchange Commission by May 15, 1997, which will allow
the Partnership to sell such shares after the Commission has declared the
registration statement effective. No further royalty payments will be received
by the Partnership from Ecogen as a result of this agreement.
In February 1997, the Partnership sold its remaining 942,045 shares of
Biocompatibles International plc common stock for approximately $18,557,000
representing the liquidation of the most significant remaining asset of the
Partnership.
9
<PAGE>
During the first quarter of 1997, the Partnership sold 6,500 shares of Ecogen
common stock and 167,500 shares of Synbiotics Corporation common stock for
approximately $25,000 and $655,000, respectively.
In February 1997, the Partnership made distributions of $16,666,667 and
$4,444,444 of which $15,000,000 ($150 per unit) and $4,000,000 ($40 per unit),
respectively, were paid to the limited partners and the remainder to the General
Partner.
During April 1997, the Partnership sold all of its remaining shares of
Navigation Technologies common stock, 11,500 shares of Ecogen common stock,
41,000 shares of Silicon Valley Research, Inc. common stock, and 55,000 shares
of Synbiotics Corporation common stock for approximately $800,000, $34,000,
$46,000, and $195,000, respectively. The March 31, 1997 carrying amounts of
these investments reflect the net amounts realized from these sales.
Results of Operations
The Partnership adopted the liquidation basis of accounting as of December
31, 1996 in accordance with generally accepted accounting principles and no
longer reports results of operations. As such, there is no management's
discussion comparing the corresponding 1997 and 1996 periods.
10
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings--This information is incorporated by reference to Note
E to the financial statements filed herewith in Item 1 of Part I of the
Registrant's Quarterly Report.
Item 2. Changes in Securities--None
Item 3. Defaults Upon Senior Securities--None
Item 4. Submission of Matters to a Vote of Security Holders--None
Item 5. Other Information--Thomas F. Lynch, III ceased to serve as Chief
Executive Officer, Chairman of the Board of Directors and Director of
R&D Funding Corp effective May 2, 1997. Effective May 2, 1997, Brian J.
Martin was elected Chief Executive Officer, Chairman of the Board of
Directors and Director of R&D Funding Corp.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits--
PruTech Research and Development Partnership II Agreement of Limited
Partnership (incorporated by reference to Exhibit 3.1 included with
Registrant's Form S-1 Registration Statement, File No. 2-94273, dated
November 9, 1984)
First Amendment to the Agreement of Limited Partnership of PruTech
Research and Development Partnership II (incorporated by reference to
Exhibit 3 included with Registrant's Annual Report on Form 10-K for
the year ended December 31, 1991)
Financial Data Schedule (filed herewith)
b. Reports on Form 8-K--
Registrant's Current Report on Form 8-K dated February 7, 1997, as
filed with the Securities and Exchange Commission on February 24,
1997, relating to Item 2 regarding the sale of Registrant's
remaining 942,045 shares of Biocompatibles International plc
common stock.
11
<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.
PruTech Research and Development Partnership II
By: R&D Funding Corp
A Delaware corporation, General Partner
By: /s/ Michael S. Hasley Date: May 14, 1997
----------------------------------------
Michael S. Hasley
President for the Registrant
By: R&D Funding Corp
A Delaware corporation, General Partner
By: /s/ Steven Carlino Date: May 14, 1997
----------------------------------------
Steven Carlino
Vice President
Chief Accounting Officer for the Registrant
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
The Schedule contains summary financial
information extracted from the financial
statements for PruTech Research and
Development Partnership II and is qualified in its
entirety by reference to such financial statements
</LEGEND>
<RESTATED>
<CIK> 0000774560
<NAME> PruTech Research and Development Partnership II
<MULTIPLIER> 1
<FISCAL-YEAR-END> Dec-31-1997
<PERIOD-START> Jan-1-1997
<PERIOD-END> Mar-31-1997
<PERIOD-TYPE> 3-Mos
<CASH> 2,340,107
<SECURITIES> 2,224,156
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,564,263
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 4,564,263
<CURRENT-LIABILITIES> 1,629,901
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,934,362
<TOTAL-LIABILITY-AND-EQUITY> 4,564,263
<SALES> 0
<TOTAL-REVENUES> 0<F1>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0<F1>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0<F1>
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0<F1>
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>
Registrant adopted the liquidation basis of accounting
on December 31, 1996, and, accordingly, does not
reflect operations subsequent to 1996. See Note A to
the financial statements for further details.
</FN>
</TABLE>
