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 June 30, 1995
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 0-14217
ML VENTURE PARTNERS II, L.P.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Delaware 13-3324232
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
World Financial Center, North Tower
New York, New York 10281-1327
(Address of principal executive offices) (Zip Code)
</TABLE>
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 VENTURE PARTNERS II, L.P.
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Balance Sheets as of June 30, 1995 (Unaudited) and December 31, 1994
Schedule of Portfolio Investments as of June 30, 1995 (Unaudited)
Statements of Operations for the Three and Six Months Ended June 30, 1995 and
1994 (Unaudited)
Statements of Cash Flows for the Six Months Ended June 30, 1995 and 1994
(Unaudited)
Statement of Changes in Partners' Capital for the Six Months Ended June 30, 1995
(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 VENTURE PARTNERS II, L.P.
BALANCE SHEETS
<TABLE>
<S> <C> <C> <C>
June 30, 1995 December 31,
(Unaudited) 1994
ASSETS
Investments - Note 2
Portfolio investments, at fair value (cost $45,189,279 at
June 30, 1995 and $52,936,366 at December 31, 1994) $ 79,736,254 $ 75,400,208
Short-term investments, at amortized cost 12,166,957 6,935,099
Cash and cash equivalents 6,217,253 638,868
Deposit in escrow 218,233 -
Accrued interest receivable 712,753 563,815
Notes receivable (net of unamortized discount of $208 at
June 30, 1995 and $0 at December 31, 1994) 149,792 250,656
Receivable from securities sold 2,826,714 7,655
--------- -----
TOTAL ASSETS $ 102,027,956 $ 83,796,301
= =========== = ==========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Accounts payable $ 48,935 $ 43,472
Due to Management Company - Note 4 295,890 325,000
Due to Independent General Partners - Note 5 27,600 25,350
------ ------
Total liabilities 372,425 393,822
------- -------
Partners' Capital:
Managing General Partner 3,703,082 2,191,479
Individual General Partners 2,112 3,917
Limited Partners (120,000 Units) 63,403,362 58,743,241
Unallocated net unrealized appreciation of investments - Note 2 34,546,975 22,463,842
---------- ----------
Total partners' capital 101,655,531 83,402,479
----------- ----------
TOTAL LIABILITIES AND PARTNERS' CAPITAL $ 102,027,956 $ 83,796,301
= =========== = ==========
</TABLE>
See notes to financial statements.
<PAGE>
ML VENTURE PARTNERS II, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS (UNAUDITED)
June 30, 1995
Active Portfolio Investments:
<TABLE>
Initial Investment
Company / Position Date Cost Fair Value
Biocircuits Corporation*(A)
<C> <C> <C> <C>
515,269 shares of Common Stock May 1991 $ 1,422,501 $ 369,087
2,000,000 shares of Preferred Stock 1,000,000 1,000,000
Warrants to purchase 1,207,062 shares of Preferred Stock at
$.60 per share, exercisable after 12/1/95 and expiring 12/18/96 0 0
--------------------------------------------------------------- - -
Borg-Warner Automotive, Inc.*(A)
444,664 shares of Common Stock Sept. 1988 2,223,320 9,396,306
------------------------------ ---------- --------- ---------
Borg-Warner Security Corporation*(A)
500,000 shares of Common Stock Sept. 1988 2,500,000 3,337,500
------------------------------ ---------- --------- ---------
CellPro, Incorporated(A)(B)
316,333 shares of Common Stock Mar. 1989 587,953 3,403,619
------------------------------ --------- ------- ---------
Clarus Medical Systems, Inc.*
824,950 shares of Preferred Stock Jan. 1991 2,318,966 824,950
Warrants to purchase 20,238 shares of Common Stock
at $3.75 per share, expiring on 7/31/97 0 0
Warrants to purchase 46,802 shares of Common Stock
at $.01 per share, expiring between 3/7/00 and 5/3/00 0 0
Warrants to purchase 14,127 shares of Preferred Stock
at $1.00 per share, expiring on 3/7/00 0 0
-------------------------------------- - -
Corporate Express, Inc.*(A)(C)
862,699 shares of Common Stock May 1992 2,552,512 13,357,884
------------------------------ -------- --------- ----------
Diatech, Inc.*
1,349,508 shares of Preferred Stock Dec. 1991 2,986,023 3,511,023
----------------------------------- --------- --------- ---------
Eckerd Corporation*(A)(D)
92,843 shares of Common Stock July 1992 857,004 2,876,276
----------------------------- --------- ------- ---------
Elantec, Inc.
2,889,947 shares of Preferred Stock Aug. 1988 1,069,569 1,069,569
852,273 shares of Common Stock 340,909 340,909
------------------------------ ------- -------
Home Express, Inc.*
486,067 shares of Preferred Stock June 1992 1,822,751 2,303,957
--------------------------------- --------- --------- ---------
Horizon Cellular Telephone Company, L.P.:
HCTC Investment, L.P.
10% Promissory Note due 3/26/98 May 1992 2,587,500 2,587,500
SPTHOR Corporation
10% Promissory Note due 3/26/98 May 1992 646,875 646,875
34.5 shares of Common Stock 215,625 215,625
--------------------------- ------- -------
</TABLE>
<PAGE>
ML VENTURE PARTNERS II, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS (UNAUDITED) - continued
June 30, 1995
<TABLE>
Initial Investment
Company / Position Date Cost Fair Value
I.D.E. Corporation*
<C> <C> <C> <C>
493,391 shares of Preferred Stock Mar. 1988 $ 1,110,909 $ 555,455
--------------------------------- --------- - --------- - -------
IDEC Pharmaceuticals Corporation(A)*:
ML/MS Associates, L.P.*
34.4% Limited Partnership interest June 1989 3,960,000 3,299,369
MLMS Cancer Research, Inc.*
400,000 shares of Common Stock July 1989 46,957 33,327
------------------------------ --------- ------ ------
Inference Corporation(A)(E)
140,485 shares of Common Stock Apr. 1993 685,032 992,175
Warrants to purchase 38,736 shares of Common Stock
at $5 per share, expiring on 4/19/99 22,777 79,894
Warrants to purchase 4,846 shares of Common Stock
at $5.25 per share, expiring on 12/16/97 6,531 8,783
Warrants to purchase 59,165 shares of Common Stock
at $5 per share, expiring on 6/10/98 79,725 122,028
Brightware, Inc.
140,485 shares of Common Stock Apr. 1993 100,000 100,000
Warrants to purchase 38,736 shares of Common Stock
at $5 per share, expiring on 4/19/99 0 0
Warrants to purchase 4,846 shares of Common Stock
at $5.25 per share, expiring on 12/16/97 0 0
Warrants to purchase 59,165 shares of Common Stock
at $5 per share, expiring on 6/10/98 0 0
------------------------------------ - -
Ligand Pharmaceuticals Inc.*(A)
499,858 shares of Common Stock Apr. 1989 1,216,466 2,647,998
Warrants to purchase 5,584 shares of Common Stock at
$3.61 per share to $9.60 per share, expiring between
1/18/96 and 7/31/97 0 2,085
------------------- - -----
Neocrin Company
447,418 shares of Preferred Stock June 1991 4,019,306 2,237,090
Warrants to purchase 13,005 shares of Preferred Stock
at $5.00 per share, expiring on 1/20/96 130 130
--------------------------------------- --- ---
OccuSystems, Inc.(A)(F)
504,830 shares of Common Stock June 1993 2,524,150 4,234,262
------------------------------ --------- --------- ---------
Photon Dynamics, Inc.*
1,222,828 shares of Preferred Stock Sept. 1988 2,452,226 1,435,181
----------------------------------- ---------- --------- ---------
Raytel Medical Corporation*
1,250,000 shares of Preferred Stock Feb. 1990 1,483,278 2,483,278
Options to purchase 55,938 shares of Preferred Stock
at $.71 per share, expiring on 10/31/01 0 72,160
--------------------------------------- - ------
</TABLE>
<PAGE>
ML VENTURE PARTNERS II, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS (UNAUDITED) - continued
June 30, 1995
<TABLE>
Initial Investment
Company / Position Date Cost Fair Value
Regeneron Pharmaceuticals, Inc.(A)(G)
<C> <C> <C> <C>
516,895 shares of Common Stock Jan. 1988 $ 606,498 $ 4,057,867
------------------------------ --------- - ------- - ---------
Sanderling Biomedical, L.P.*(H)
80% Limited Partnership interest May 1988 2,000,000 2,292,560
-------------------------------- -------- --------- ---------
SDL, Inc.*(A)(I)
419,155 shares of Common Stock July 1992 1,019,603 7,469,342
------------------------------ --------- --------- ---------
Viasoft, Inc.(A)(J)
227,295 shares of Common Stock Dec. 1987 724,183 2,372,190
------------------------------ --------- ------- ---------
Totals from Active Portfolio Investments $ 45,189,279 $ 79,736,254
- ---------- - ----------
</TABLE>
Supplemental Information: Liquidated Portfolio Investments(L)
<TABLE>
Cost Realized Gain Return
<S> <C> <C> <C>
Totals from Liquidated Portfolio Investments(K) $ 70,015,404 $ 27,274,197 $ 97,289,601
= ========== = ========== = ==========
Combined Net Combined
Unrealized and Fair Value
Cost Realized Gain and Return
Totals from Active & Liquidated Portfolio Investments $ 115,204,683 $ 61,821,172 $ 177,025,855
= =========== = ========== = ===========
</TABLE>
(A) Public company
(B) In May and June 1995, the Partnership sold 95,000 common shares of CellPro,
Incorporated for $1.2 million, realizing a gain of $1.0 million. Subsequent
to the end of the quarter, in July 1995, the Partnership sold an additional
78,500 shares of CellPro for $1.1 million, realizing a gain of $954,000.
(C) In June 1995, Corporate Express, Inc. effected a 3-for-2 split of its
outstanding stock. As a result, the Partnership received an additional
295,900 shares of the company's common stock. In June 1995, subsequent to
the stock split, the Partnership sold 25,000 common shares of Corporate
Express for $531,000, realizing a gain of $474,000. Subsequent to the end
of the quarter, in July 1995, the Partnership sold an additional 131,653
shares of Corporate Express for $2.9 million, realizing a gain of $2.6
million.
<PAGE>
ML VENTURE PARTNERS II, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS (UNAUDITED) - continued
June 30, 1995
(D) Subsequent to the end of the quarter, in July 1995, the Partnership sold
its 92,843 shares of Eckerd Corporation for $2.9 million, realizing a gain
of $2 million.
(E) Effective in May 1995, Inference completed a spin-off of certain of its
assets and liabilities, in a tax free transaction, to Brightware, Inc., and
all of the shares of Brightware were issued to the Inference shareholders.
The Partnership's ownership of Brightware coincided with its ownership of
Inference at the time of the spin-off. On June 30, 1995, Inference
Corporation completed its initial public offering. In connection with the
offering, the company effected a one-for-five reverse split of its
outstanding stock. As a result, the Partnership exchanged its 702,427
shares of preferred stock and warrants to purchase 513,742 shares of common
and preferred stock for 140,485 shares of common stock and warrants to
purchase 102,747 shares of common stock.
(F) On May 9 1995, OccuSystems, Inc. completed its initial public offering. As
a result, the Partnership exchanged its 504,830 preferred shares for
504,830 common shares of the company.
(G) In June 1995, the Partnership sold 341,000 common shares of Regeneron
Pharmaceuticals, Inc. for $2.8 million, realizing a gain of $2.4 million.
Subsequent to the end of the quarter, in July 1995, the Partnership sold
325,000 common shares of Regeneron for $3.7 million, realizing a gain of
$3.3 million.
(H) Indirectly, the Partnership has an additional investment in Regeneron
Pharmaceuticals, Inc. through its 80% limited partnership interest in
Sanderling Biomedical, L.P.
(I) Subsequent to the end of the quarter, on August 1, 1995, the Partnership
sold 40,000 shares of SDL, Inc. common stock for $1.4 million, realizing a
gain of $1.4 million.
(J) Subsequent to the end of the quarter, in July 1995, the Partnership sold
113,500 common shares of Viasoft, Inc. for $1.5 million, realizing a gain
of $1.2 million.
(K) During the quarter, the Partnership sold its 204,291 common shares of
Mobile Telecommunications Technologies Corporation for $5.0 million,
realizing a gain of $3.4 million and sold its 213,419 shares of Micro
Linear Corporation for $3.2 million, realizing a gain of $2.4 million.
Additionally, the Partnership sold its investment in Target Vision, Inc.
for $100,000 in cash and a $150,000 promissory note which was paid in full
subsequent to the end of the quarter.
(L) Amounts provided for "Supplemental Information: Liquidated Portfolio
Investments" are cumulative from inception through June 30, 1995.
* Company may be deemed an affiliated person of the Partnership as such term is
defined in the Investment Company Act of 1940.
See notes to financial statements.
<PAGE>
ML VENTURE PARTNERS II, L.P.
STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
Three Months Ended Six Months Ended
June 30, June 30,
<S> <C> <C> <C> <C>
1995 1994 1995 1994
---- ---- ---- ----
INVESTMENT INCOME AND EXPENSES
Income:
Interest from short-term investments $ 183,066 $ 134,524 $ 358,095 $ 236,811
Interest and other income from portfolio
investments 85,178 134,503 212,247 474,890
Dividend income 66,700 - 133,400 62,500
------ - ------- ------
Totals 334,944 269,027 703,742 774,201
------- ------- ------- -------
Expenses:
Management fee - Note 4 294,809 328,705 617,427 681,322
Professional fees 46,342 112,881 136,243 219,064
Mailing and printing 7,901 31,668 165,378 160,539
Independent General Partners' fees - Note 5 27,963 21,816 55,146 44,081
Custodial fees 3,514 3,574 7,042 7,438
Miscellaneous - 100 485 1,275
- --- --- -----
Totals 380,529 498,744 981,721 1,113,719
------- ------- ------- ---------
NET INVESTMENT LOSS (45,585) (229,717) (277,979) (339,518)
Net realized gain from portfolio investments 9,736,575 50,262 17,682,087 14,395,334
--------- ------ ---------- ----------
NET REALIZED GAIN (LOSS) FROM
OPERATIONS (allocable to Partners)
- Note 3 9,690,990 (179,455) 17,404,108 14,055,816
Net change in unrealized appreciation of
investments 8,307,788 (9,816,191) 12,083,133 (31,101,979)
--------- ---------- ---------- -----------
NET INCREASE (DECREASE) IN
NET ASSETS RESULTING FROM
OPERATIONS $ 17,998,778 $ (9,995,646) $ 29,487,241 $ (17,046,163)
= ========== = ========== = ========== = ===========
</TABLE>
See notes to financial statements.
<PAGE>
ML VENTURE PARTNERS II, L.P.
STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Six Months Ended June 30,
<TABLE>
<S> <C> <C>
1995 1994
---- ----
CASH FLOWS USED FOR OPERATING ACTIVITIES
Net investment loss $ (277,979) $ (339,518)
Adjustments to reconcile net investment loss to cash used for operating
activities:
Amortization of discount on receivable (3,542) -
(Increase) decrease in receivables and other assets 101,718 (265,990)
Increase in accrued interest on short-term investments (97,100) (10,242)
Increase (decrease) in payables (21,397) 209,192
------- -------
Cash used for operating activities (298,300) (406,558)
-------- --------
CASH FLOWS PROVIDED FROM INVESTING ACTIVITIES
Net purchase of short-term investments (5,134,758) (30,361)
Cost of portfolio investments purchased (2,094,303) (804,776)
Deposit placed in escrow (218,233) -
Net proceeds from the sale of portfolio investments 22,538,447 16,862,737
Proceeds from repayment of note 2,019,721 -
--------- -
Cash provided from investing activities 17,110,874 16,027,600
---------- ----------
CASH FLOWS USED FOR FINANCING ACTIVITIES
Cash distributions to Limited Partners (9,000,000) (16,200,000)
Cash distributions to General Partners (2,234,189) -
---------- -
Cash used for financing activities (11,234,189) (16,200,000)
----------- -----------
Increase (decrease) in cash and cash equivalents 5,578,385 (578,958)
Cash and cash equivalents at beginning of period 638,868 1,412,882
------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 6,217,253 $ 833,924
= ========= = =======
</TABLE>
See notes to financial statements.
<PAGE>
ML VENTURE PARTNERS II, L.P.
STATEMENT OF CHANGES IN PARTNERS' CAPITAL (UNAUDITED)
For the Six Months Ended June 30, 1995
<TABLE>
Unallocated
Managing Individual Net Unrealized
General General Limited Appreciation of
Partner Partners Partners Investments Total
<S> <C> <C> <C> <C> <C>
Balance at beginning of period $ 2,191,479 $ 3,917 $ 58,743,241 $ 22,463,842 $ 83,402,479
Cash distribution, paid
April 11, 1995 (2,231,929) (2,260) (9,000,000) - (11,234,189)
Net investment loss 65,658 (11) (343,626) - (277,979)
Net realized gain from portfolio
investments 3,677,874 466 14,003,747 - 17,682,087
Net change in unrealized
appreciation of investments - - - 12,083,133 12,083,133
- - - ---------- ----------
Balance at end of period $ 3,703,082 $ 2,112 $ 63,403,362(A) $ 34,546,975 $ 101,655,531
= ========= = ===== = ========== = ========== = ===========
</TABLE>
(A) The net asset value per unit of limited partnership interest, including an
assumed allocation of net unrealized appreciation of investments, was $756
at June 30, 1995. Cumulative cash distributions paid to Limited Partners
from inception to June 30, 1995 totaled $565 per Unit.
See notes to financial statements.
<PAGE>
ML VENTURE PARTNERS II, L.P.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Organization and Purpose
ML Venture Partners II, L.P. (the "Partnership") is a Delaware limited
partnership formed on February 4, 1986. MLVPII Co., L.P., the managing general
partner of the Partnership (the "Managing General Partner") and four individuals
(the "Individual General Partners") are the general partners of the Partnership.
The general partner of MLVPII Co., L.P. is Merrill Lynch Venture Capital Inc.
(the "Management Company"), an indirect subsidiary of Merrill Lynch & Co., Inc.
The Partnership's objective is to achieve long-term capital appreciation from
its portfolio of venture capital investments in new and developing companies and
other special investment situations. The Partnership does not engage in any
other business or activity. The Partnership is scheduled to terminate on
December 31, 1997. However, pursuant to the Partnership Agreement, the
Individual General Partners can extend the termination date for up to two
additional two-year periods if they determine that such extensions would be in
the best interest of the Partnership.
2. Significant Accounting Policies
Valuation of Investments - Short-term investments are carried at amortized cost
which approximates market. Portfolio investments are carried at fair value as
determined quarterly by the Managing General Partner under the supervision of
the Individual General Partners. The fair value of publicly-held portfolio
securities is adjusted to the average closing public market price for the last
five trading days of each quarter discounted by a factor of 0% to 50% for sales
restrictions. Factors considered in the determination of an appropriate discount
include, underwriter lock-up or Rule 144 trading restrictions, insider status
where the Partnership either has a representative serving on the company's Board
of Directors or is greater than a 10% shareholder, and other liquidity factors
such as the size of the Partnership's position in a given company compared to
the trading history of the public security. Privately-held portfolio securities
are carried at cost until significant developments affecting the portfolio
company provide a basis for change in valuation. The fair value of private
securities is adjusted 1) to reflect meaningful third-party transactions in the
private market or 2) to reflect significant progress or slippage in the
development of the company's business such that cost is no longer reflective of
fair value. As a venture capital investment fund, the Partnership's portfolio
investments involve a high degree of business and financial risk that can result
in substantial losses. The Managing General Partner considers such risks in
determining the fair value of the Partnership's portfolio investments.
Investment Transactions - Investment transactions are recorded on the accrual
method. Portfolio investments are recorded on the trade date, the date the
Partnership obtains an enforceable right to demand the securities or payment
therefor. Realized gains and losses on investments sold are computed on a
specific identification basis.
<PAGE>
ML VENTURE PARTNERS II, L.P.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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. The Partnership's net assets for financial reporting purposes differ
from its net assets for tax purposes. Net unrealized appreciation of investments
of $34.5 million at June 30, 1995, which was recorded for financial statement
purposes, was not recognized for tax purposes. Additionally, from inception to
June 30, 1995, timing differences relating to realized losses totaling $1.7
million have been deducted on the Partnership's financial statements and
syndication costs relating to the selling of Units totaling $11.3 million were
charged to partners' capital on the financial statements. These amounts have not
been deducted or charged against partners' capital for tax purposes.
Statements of Cash Flows - The Partnership considers its interest-bearing cash
account to be cash equivalents.
3. Allocation of Partnership Profits and Losses
The Partnership Agreement provides that the Managing General Partner will be
allocated, on a cumulative basis over the life of the Partnership, 20% of the
Partnership's aggregate investment income and net realized gains and losses from
venture capital investments, provided that such amount is positive. All other
gains and losses of the Partnership are allocated among all the Partners
(including the Managing General Partner) in proportion to their respective
capital contributions to the Partnership. From its inception to June 30, 1995,
the Partnership had a $30.0 million net gain from its venture capital
investments, which includes interest and other income from portfolio investments
totaling $2.8 million.
4. Related Party Transactions
The Management Company performs, or arranges for others to perform, the
management and administrative services necessary for the operation of the
Partnership and receives a management fee at the annual rate of 2.5% of the
gross capital contributions to the Partnership, reduced by selling commissions,
organizational and offering expenses paid by the Partnership, capital
distributed and realized capital losses with a minimum annual fee of $200,000.
Such fee is determined and payable quarterly.
On November 9, 1994, the Securities and Exchange Commission (the "SEC") issued
an exemptive order permitting the Partnership to acquire 97,273 shares of
Corporate Express, Inc. common stock from the Management Company subject to
certain conditions, including review and approval by the Independent General
Partners. On December 13, 1994, the Partnership purchased such shares for
$1,111,685, representing original cost of $1,069,998 plus interest expense of
$41,687.
<PAGE>
ML VENTURE PARTNERS II, L.P.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
5. Independent General Partners' Fees
As compensation for services rendered to the Partnership, each of the three
Independent General Partners receives $20,000 annually in quarterly
installments, $1,400 for each meeting of the General Partners attended or for
each other meeting, conference or engagement in connection with Partnership
activities at which attendance by an Independent General Partner is required and
$1,400 for each committee meeting attended ($500 if a committee meeting is held
on the same day as a meeting of the General Partners).
6. Commitments
The Partnership has a $393,043 commitment to fund MLMS Cancer Research, Inc. The
Partnership is a shareholder of 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.
7. Cash Distributions
On April 11, 1995, the Partnership made a cash distribution to Partners totaling
$11,234,189; $9 million, or $75 per Unit, to Limited Partners of record on March
31, 1995 and $2,234,189 to the General Partners. Cash distributions paid during
the periods presented and cumulative cash distributions paid to Partners from
inception of the Partnership to June 30, 1995 are listed below.
<TABLE>
General Limited Per $1,000
Distribution Date Partners Partners Unit
----------------- -------- -------- ----
<S> <C> <C> <C> <C> <C>
April 11, 1995 $ 2,234,189 $ 9,000,000 $ 75
September 1, 1994 1,400,000 0 0
May 26, 1994 0 16,200,000 135
Inception to December 31, 1993 0 42,600,000 355
- ---------- ---
Cumulative totals at June 30, 1995 $ 3,634,189 $ 67,800,000 $ 565
= ========= = ========== = ===
</TABLE>
8. Pending Litigation
The Partnership has been named as a defendant, along with other entities and
individuals, in an action involving In-Store Advertising, Inc. ("ISA"). The
action is a purported class action suit wherein the plaintiffs, who purchased
shares of ISA in its July 19, 1990 initial public offering through November 8,
1990, allege violations under certain sections of the Securities Act of 1933,
the Securities Exchange Act of 1934 and common law. The plaintiffs seek
rescission of their purchases of ISA common stock together with damages and
certain costs and expenses. The Partnership believes it has meritorious defenses
to the allegations and that the cost of resolution of the litigation will not
have a material impact on the financial condition and results of operations of
the Partnership. As of June 30, 1995, the Partnership has incurred cumulative
legal expenses totaling $166,000 related to the litigation.
<PAGE>
ML VENTURE PARTNERS II, L.P.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
9. Subsequent Events
Subsequent to the end of the quarter, through August 4, 1995, the Partnership
sold common stock of certain portfolio investments for $13.4 million. These
shares were valued at $11.4 million at June 30, 1995, reflecting the
Partnership's standard valuation policy for publicly traded securities. Had
these securities been valued at their final liquidation values, the
Partnership's net assets would have increased $2 million, or $13 per Unit, at
June 30, 1995.
In August 1995, the General Partners approved a cash distribution to Partners
totaling $32 million; $27 million, or $225 per Unit, to the Limited Partners and
$5 million to the General Partners. The distribution will be paid in October
1995 to Limited Partners of record on September 30, 1995.
10. Interim Financial Statements
In the opinion of MLVPII Co., L.P., the managing general partner of the
Partnership, the unaudited financial statements as of June 30, 1995, and for the
three and six month periods then ended, reflect all adjustments necessary for
the fair presentation of the results of the interim periods.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Liquidity and Capital Resources
During the three months ended June 30, 1995, the Partnership made follow-on
investments totaling $1.4 million in three existing portfolio companies. From
its inception to June 30, 1995, the Partnership had invested $115.2 million in
58 portfolio companies. At June 30, 1995, the Partnership had fully liquidated
35 of its portfolio company investments and partially liquidated an additional
10 investments. Liquidated investments at June 30, 1995 had an aggregate cost of
$70 million and had returned $97.3 million to the Partnership, resulting in a
cumulative net realized gain of $27.3 million.
Generally, cash received from the sale of portfolio investments, after an
adequate reserve for operating expenses and follow-on investments in existing
portfolio companies, is distributed to Partners as soon as practicable after
receipt. The Partnership does not intend to make investments in new portfolio
companies, however, it may make follow-on investments in certain existing
portfolio companies.
On April 11, 1995, the Partnership made a cash distribution to its Partners
totaling $11.2 million; $9 million, or $75 per Unit, to the Limited Partners and
$2.2 million to the General Partners. The distribution primarily represented
proceeds from investments sold in 1994.
At June 30, 1995, the Partnership held $18.4 million in cash and short-term
investments; $12.2 million in short-term securities with maturities of less than
one year and $6.2 million in an interest-bearing cash account. Interest earned
from such investments totaled $183,000 and $358,000 for the three and six months
ended June 30, 1995, respectively. Funds needed to cover future operating
expenses and follow-on investments will be obtained from the Partnership's
existing cash reserves, from interest and other investment income and from
proceeds received from the sale of portfolio investments.
In August 1995, the General Partners approved a cash distribution to Partners
totaling $32 million; $27 million, or $225 per Unit, to Limited Partners and $5
million to the General Partners. This distribution will be paid in October 1995
and is primarily composed of proceeds from portfolio investments sold during the
seven months ended July 31, 1995. This distribution will bring cumulative cash
distributions paid to Partners to $103.4 million; $94.8 million, or $790 per
Unit, to the Limited Partners and $8.6 million to the General Partners.
Results of Operations
For the three and six months ended June 30, 1995, the Partnership had a net
realized gain from operations of $9.7 million and $17.4 million, respectively.
For the three and six months ended June 30, 1994, the Partnership had a net
realized loss from operations of $179,000 and a net realized gain from
operations of $14.0 million, respectively. Net realized gain or loss from
operations is comprised of 1) net realized gain or loss from portfolio
investments and 2) net investment income or loss (interest and dividend income
less operating expenses).
Realized Gains and Losses from Portfolio Investments - For the three and six
months ended June 30, 1995, the Partnership had a net realized gain from
portfolio investments of $9.7 million and $17.7 million, respectively. During
the three months ended June 30, 1995, the Partnership sold shares of common
stock in the public market of five of its portfolio companies for $12.7 million,
realizing a gain of $9.7 million. The public securities liquidated during the
three month period were: 213,419 shares of Micro Linear Corporation, 95,000
shares of CellPro, Incorporated, 204,291 shares of Mobile Telecommunications
Technologies Corporation, 341,000 shares of Regeneron Pharmaceuticals, Inc. and
25,000 shares of Corporate Express, Inc. Additionally, during the three months
ended March 31, 1995, the Partnership sold shares of common stock in the public
market of five of its portfolio companies for $12.6 million, realizing a gain of
$8.1 million. The public securities liquidated during the three month period
were: 115,267 shares of Children's Discovery Centers of America, Inc., 104,435
shares of Corporate Express, 144,486 shares of Komag, Incorporated, 520,000
shares of Regeneron Pharmaceuticals and 60,000 shares of Viasoft, Inc.
Additionally, on March 31, 1995, the Partnership wrote-off $145,000 of its
$395,000 remaining investment in Target Vision which was sold in April 1995 for
$100,000 in cash and a $150,000 promissory note.
For the three and six months ended June 30, 1994, the Partnership had a $50,000
and a $14.4 million net realized gain from portfolio investments, respectively.
In June 1994, the Partnership sold 26,570 shares of OccuSystems, Inc. in a
private transaction for $173,000, realizing a gain of $40,000. Also during the
three months ended June 30, 1994, the Partnership realized a gain of $10,000
from the final escrow payment relating to the sale of its investment in R-Byte
Inc. During the three months ended March 31, 1994, the Partnership sold common
stock of certain of its portfolio investments in the public market realizing a
gain of $14.4 million. The public securities liquidated during the three month
period were: 370,000 shares of CellPro, 140,000 shares of Regeneron, 90,000
shares of Komag and 78,271 shares of Ringer Corporation. Also during the three
months ended March 31, 1994, the Partnership realized gains totaling $44,000
from the receipt of R-Byte escrow payments. Additionally, the Partnership
wrote-off its $100,000 investment in Research Applications, Inc.
Investment Income and Expenses - For the three months ended June 30, 1995 and
1994, the Partnership had a net investment loss of $46,000 and $230,000,
respectively. The lower net investment loss for the 1995 period compared to the
1994 period, primarily was attributable to a $118,000 decrease in operating
expenses, primarily professional fees and mailing and printing expenses, for the
1995 period. Professional fees were $46,000 and $113,000 for the three months
ended June 30, 1995 and 1994, respectively, primarily reflecting a decrease in
legal fees relating to the In-Store Advertising, Inc. ("ISA") litigation during
the 1995 period. Additionally, a $49,000 increase in interest from short-term
investments for the 1995 period contributed to the decrease in net investment
loss. This decrease was due to an increase in the average amount of funds
invested in short-term securities and higher short-term interest rates during
the 1995 period compared to the 1994 period.
Net investment loss for the six months ended June 30, 1995 and 1994 was $278,000
and $340,000, respectively. The decrease in net investment loss was the result
of a $132,000 decrease in operating expenses offset by a $70,000 decline in
investment income for the 1995 period compared to the 1994 period. The decrease
in operating expenses primarily resulted from a reduction in legal fees incurred
during the 1995 period relating to the ISA litigation. The decrease in
investment income included a $192,000 decrease in interest and dividend income
from portfolio investments for the 1995 period, which was due to a decrease in
the amount of debt securities of portfolio companies held by the Partnership
during the 1995 period compared to the same period in 1994. The decrease in
interest and dividend income from portfolio investments was partially offset by
a $121,000 increase in interest from short-term investments during the 1995
period, due to an increase in the average amount of funds available for
investment in such securities and higher interest rates for the 1995 period.
The Management Company performs, or arranges for others to perform, the
management and administrative services necessary for the operation of the
Partnership. The Management Company receives a management fee at an annual rate
of 2.5% of the gross capital contributions to the Partnership, reduced by
selling commissions, organizational and offering expenses paid by the
Partnership, return of capital and realized capital losses, with a minimum
annual fee of $200,000. Such fee is determined and payable quarterly. The
management fee for the three months ended June 30, 1995 and 1994, was $295,000
and $329,000, respectively. The management fee for the six months ended June 30,
1995 and 1994, was $617,000 and $681,000, respectively. The management fee will
continue to decline in future periods as the Partnership's investment portfolio
continues to mature and cash distributions are made to Partners. The management
fee and other operating expenses are paid with funds provided from operations.
Funds provided from operations for the period were obtained from interest
received on short-term investments, interest and dividend income from portfolio
investments and proceeds from the sale of portfolio investments.
Unrealized Gains and Losses and Changes in Unrealized Appreciation or
Depreciation of Portfolio Investments - For the six months ended June 30, 1995,
the Partnership had a $21 million net unrealized gain from its portfolio
investments, primarily resulting from the net upward revaluation of its publicly
traded securities. Additionally, during the six month period, $8.9 million of
unrealized gain was transferred to realized gain relating to portfolio
investments sold during the period, as discussed above. The $21 million
unrealized gain offset by the $8.9 million transfer from unrealized gain to
realized gain resulted in a $12.1 million increase to net unrealized
appreciation of investments for the six month period.
For the six months ended June 30, 1994, the Partnership had a net unrealized
loss from its portfolio investments of $19.0 million, primarily resulting from
the net downward revaluation of the Partnership's publicly traded securities.
Additionally, during the six month period, $12.1 million of unrealized gain was
transferred to realized gain relating to portfolio investments sold during the
period, as discussed above. The $19.0 million unrealized loss and the $12.1
million net transfer from unrealized gain to realized gain resulted in a $31.1
million reduction to net unrealized appreciation of investments for the six
month period.
Net Assets - Changes to net assets resulting from operations are comprised of 1)
net realized gain or loss from operations and 2) changes to net unrealized
appreciation or depreciation of portfolio investments.
For the six months ended June 30, 1995, the Partnership had a $29.5 million net
increase in net assets resulting from operations, comprised of the $12.1 million
increase in unrealized appreciation and the $17.4 million net realized gain from
operations for the six month period. At June 30, 1995, the Partnership's net
assets were $101.7 million, up $18.3 million from $83.4 million at December 31,
1994. This increase resulted from the $29.5 million net increase in net assets
for the six month period offset by the $11.2 million cash distribution paid to
Partners in April 1995.
For the six months ended June 30, 1994, the Partnership had a $17.1 million net
decrease in net assets resulting from operations, comprised of the $31.1 million
decrease in net unrealized appreciation offset by the $14.0 million net realized
gain from operations for the six month period. At June 30, 1994, the
Partnership's net assets were $79.4 million, a decrease of $33.3 million from
$112.7 million at December 31, 1993. This decrease resulted from the $17.1
million net decrease in net assets resulting from operations for the six month
period and the $16.2 million cash distribution paid to Limited Partners in May
1994.
Gains and losses from investments are allocated to Partners' capital accounts
when realized, in accordance with the Partnership Agreement (see Note 3 of Notes
to Financial Statements). However, for purposes of calculating the net asset
value per unit of limited partnership interest, net unrealized appreciation of
investments has been included as if the net appreciation had been realized and
allocated to the Limited Partners in accordance with the Partnership Agreement.
Pursuant to such calculation, the net asset value per $1,000 Unit was $756 and
$638 at June 30, 1995 and December 31, 1994, respectively.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
The Partnership has been named as a defendant in an action relating to its
ownership of securities of In-Store Advertising, Inc. ("In-Store Advertising").
On or about July 16, 1993, a Second Amended Consolidated Class Action Complaint
(the "Amended Complaint") was filed in the United States District Court for the
Southern District of New York in the In Re In-Store Advertising Securities
Litigation. The action is a purported class action suit wherein the plaintiffs
(the "Plaintiffs") are persons who allegedly purchased shares of In-Store
Advertising common stock in the July 19, 1990 initial public offering (the
"Offering") and through November 8, 1990. The defendants named in the Amended
Complaint include present and former individual officers and directors of
In-Store Advertising, the underwriters involved in the Offering, KPMG Peat
Marwick (In-Store Advertising's auditors) and certain other defendants,
including the Partnership, who owned In-Store Advertising securities prior to
the Offering (the "Venture Capital Defendants"). Prior to the filing of the
Amended Complaint, In-Store Advertising filed a "prepackaged" plan in U.S.
Bankruptcy Court pursuant to Chapter XI of the U.S. Bankruptcy Code.
The Amended Complaint alleges violations under Sections 11, 12(2) and 15 of the
Securities Act of 1933, as amended (the "1933 Act"), Section 10(b) and 20 of the
Securities Exchange Act of 1934, as amended (the "1934 Act") and Rule 10b-5
promulgated thereunder, and common law claims of negligent misrepresentation,
fraud and deceit in connection with the sale of securities. The Plaintiffs seek
rescission of the purchases of In-Store Advertising's common stock to the extent
the members of the alleged classes still hold their shares, together with
damages and certain costs and expenses.
The Amended Complaint alleges that the Venture Capital Defendants are liable
under Section 10(b) of the 1934 Act and Rule 10b-5, and are also liable as
controlling persons of In-Store Advertising within the meaning of Section 15 of
the 1933 Act and Section 20(a) of the 1934 Act. The Venture Capital Defendants
are also being sued as alleged knowing and substantial aiders and abettors of
the other defendants' wrongful conduct and under common law fraud and negligence
theories. An individual director of In-Store Advertising, named as a defendant
in the action, was a Vice President of Merrill Lynch Venture Capital Inc., the
General Partner of the Managing General Partner of the Partnership. The
Partnership believes that it has meritorious defenses to the allegations in the
Amended Complaint (see Note 8 of Notes to Financial Statements).
Item 2. Changes in Securities.
Not applicable.
Item 3. Defaults Upon Senior Securities.
Not applicable.
<PAGE>
Item 4. Submission of Matters to a Vote of Security Holders.
The 1995 Annual Meeting of the Limited Partners was held on June 30, 1995 with
respect to 1) the election of the Individual General Partners, 2) the election
of the Managing General Partner, 3) the ratification of the independent auditors
and 4) the ratification of the Management Agreement. At the meeting, the four
Individual General Partners, Kevin K. Albert, Steward S. Flaschen, Jerome
Jacobson and William M. Kelly, were elected to continue to serve as Individual
General Partners and MLVPII Co., L.P. was elected to continue to serve as the
Managing General Partner. The proposal to amend Paragraph 11.4 of the Amended
and Restated Agreement of Limited Partnership with respect to the requirement to
hold Annual Meetings of Limited Partners was adjourned to a meeting held on July
27, 1995, at which time such proposal was approved.
<TABLE>
Affirmative Negative
Votes Votes Abstentions
Ratification of the selection of Deloitte & Touche LLP
as independent auditors of the Partnership for its fiscal
<S> <C> <C> <C> <C> <C>
year ending December 31, 1995. 69,907 1,823 2,962
Approval of the continuance of the Management Agreement among the Partnership,
the Management Company and the Managing General Partner and the continuance of
the Sub-Management Agreement among the Partnership, the Managing General
Partner, the
Management Company and the Sub-Manager. 65,391 4,976 4,325
Proposal to amend Paragraph 11.4 of the Amended and Restated Agreement of
Limited Partnership with respect to the requirement to hold Annual Meetings of
Limited
Partners. 60,428 10,406 5,721
</TABLE>
Item 5. Other Information.
On May 3, 1995, the Partnership purchased 70,202 shares of Clarus Medical
Systems, Inc. preferred stock and a warrant to purchase 23,401 common shares of
Clarus for $70,202.
On May 15, 1995, the Partnership purchased 91,502 shares of Diatech, Inc.
preferred stock for $366,008.
On June 19, 1995, the Partnership purchased 2,000,000 shares of Biocircuits
Corporation preferred stock and a warrant to purchase 1,207,062 shares of
Biocircuits preferred stock for $1,000,000.
<PAGE>
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
<TABLE>
<S> <C> <C> <C>
(3) (a) Amended and Restated Certificate of Limited Partnership of the Partnership, dated as of January
12, 1987. (1)
(3) (b) Amended and Restated Certificate of Limited Partnership of the Partnership, dated July 27, 1990.
(2)
(3) (c) Amended and Restated Certificate of Limited Partnership of the Partnership, dated March 25,
1991. (3)
(3) (d) Amended and Restated Agreement of Limited Partnership of the Partnership, dated as of May 4,
1987. (4)
(3) (e) Amendment No. 1 dated February 14, 1989 to Amended and Restated Agreement of Limited Partnership
of the Partnership. (5)
(3) (f) Amendment No. 2 dated July 27, 1990 to Amended and Restated Agreement of Limited Partnership of
the Partnership. (2)
(3) (g) Amendment No. 3 dated March 25, 1991 to Amended and Restated Agreement of Limited Partnership of
the Partnership. (3)
(3) (h) Amendment No. 4 dated May 23, 1991 to Amended and Restated Agreement of Limited Partnership of
the Partnership. (6)
(10) (a) Management Agreement dated as of May 23, 1991 among the Partnership, Management Company and the
Managing General Partner. (6)
(10) (b) Sub-Management Agreement dated as of May 23, 1991 among the Partnership, Management Company, the
Managing General Partner and the Sub-Manager. (8)
</TABLE>
(27) Financial Data Schedule.
(28) Prospectus of the Partnership dated February 10,
1987 filed with the Securities and Exchange
Commission pursuant to Rule 424(b) under the
Securities Act of 1933, as supplemented by a
supplement thereto dated April 21, 1987 filed
pursuant to Rule 424(c) under the Securities Act
of 1933. (7)
(b) No reports on Form 8-K have been filed during the
quarter for which this report is filed.
<PAGE>
(1) Incorporated by reference to the Partnership's Annual Report on Form 10-K
for the year ended December 31, 1988 filed with the Securities and Exchange
Commission on March 27, 1989.
(2) Incorporated by reference to the Partnership's Quarterly Report on Form
10-Q for the quarter ended September 30, 1990 filed with the Securities and
Exchange Commission on November 14, 1990.
(3) Incorporated by reference to the Partnership's Annual Report on Form 10-K
for the year ended December 31, 1990 filed with the Securities and Exchange
Commission on March 28, 1991.
(4) Incorporated by reference to the Partnership's Quarterly Report on Form
10-Q for the quarter ended June 30, 1987 filed with the Securities and
Exchange Commission on August 14, 1987.
(5) Incorporated by reference to the Partnership's Quarterly Report on Form
10-Q for the quarter ended March 31, 1989 filed with the Securities and
Exchange Commission on May 15, 1989.
(6) Incorporated by reference to the Partnership's Quarterly Report on Form
10-Q for the quarter ended June 30, 1991 filed with the Securities and
Exchange Commission on August 14, 1991.
(7) Incorporated by reference to the Partnership's Quarterly Report on Form
10-Q for the quarter ended March 31, 1987 filed with the Securities and
Exchange Commission on May 15, 1987.
(8) Incorporated by reference to the Partnership's Annual Report on Form 10-K
for the year ended December 31, 1992 filed with the Securities and Exchange
Commission on March 26, 1993.
<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 VENTURE PARTNERS II, L.P.
By: /s/ Kevin K. Albert
Kevin K. Albert
General Partner
By: MLVPII Co., L.P.
its Managing General Partner
By: Merrill Lynch Venture Capital 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: August 11, 1995
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ML VENTURE
PARTNERS II, L.P.'S QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD ENDED JUNE 30,
1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-1-1995
<PERIOD-END> JUN-30-1995
<INVESTMENTS-AT-COST> 45,189,279
<INVESTMENTS-AT-VALUE> 79,736,254
<RECEIVABLES> 3,689,259
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 18,602,443
<TOTAL-ASSETS> 102,027,956
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 372,425
<TOTAL-LIABILITIES> 372,425
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 34,546,975
<NET-ASSETS> 101,655,531
<DIVIDEND-INCOME> 133,400
<INTEREST-INCOME> 570,342
<OTHER-INCOME> 0
<EXPENSES-NET> 981,721
<NET-INVESTMENT-INCOME> (277,979)
<REALIZED-GAINS-CURRENT> 17,682,087
<APPREC-INCREASE-CURRENT> 12,083,133
<NET-CHANGE-FROM-OPS> 29,487,241
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 11,234,189
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 18,231,655
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 638
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 756
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
