SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the Quarterly Period Ended March 31, 1997
Commission file number 0-15681
WESTMED VENTURE PARTNERS, L.P.
===============================================================================
(Exact name of registrant as specified in its charter)
Delaware 13-3443230
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(State of organization) (I.R.S. Employer Identification No.)
Oppenheimer Tower, World Financial Center
New York, New York 10281
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 667-7000
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>
WESTMED VENTURE PARTNERS, L.P.
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Balance Sheets as of March 31, 1997 (Unaudited) and December 31, 1996
Schedule of Portfolio Investments at March 31, 1997 (Unaudited)
Statements of Operations for the Three Months Ended March 31, 1997 and 1996
(Unaudited)
Statements of Cash Flows for the Three Months Ended March 31, 1997 and 1996
(Unaudited)
Statement of Changes in Partners' Capital for the Three Months Ended March 31,
1997 (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.
WESTMED VENTURE PARTNERS, L.P.
BALANCE SHEETS
<TABLE>
March 31, 1997 December 31,
(UNAUDITED) 1996
ASSETS
Portfolio investments, at fair value (cost $8,665,069 at
<S> <C> <C> <C> <C> <C> <C> <C>
March 31, 1997 and $9,247,669 at December 31, 1996) $ 11,136,996 $ 11,533,351
Cash and cash equivalents 2,025,653 6,135,508
Prepaid assets 29,446 39,419
Receivable from securities sold 36,509 -
Accrued interest receivable 17,998 13,659
----------------- -----------------
TOTAL ASSETS $ 13,246,602 $ 17,721,937
================= =================
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Cash distribution payable $ - $ 4,529,538
Accounts payable and accrued expenses 115,047 120,823
Due to Managing General Partner 65,645 63,428
Due to Independent General Partners 2,500 10,000
----------------- -----------------
Total Liabilities 183,192 4,723,789
----------------- -----------------
Partners' Capital:
Managing General Partner 130,637 129,985
Limited Partners (66,929 Units) 12,932,773 12,868,163
----------------- -----------------
Total Partners' Capital 13,063,410 12,998,148
----------------- -----------------
TOTAL LIABILITIES AND PARTNERS' CAPITAL $ 13,246,602 $ 17,721,937
================= =================
</TABLE>
See notes to financial statements.
<PAGE>
WESTMED VENTURE PARTNERS, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS (UNAUDITED)
March 31, 1997
<TABLE>
Active Portfolio Investments:
Initial Investment
Company / Position Date Cost Fair Value
Aprogenex, Inc.(A)
<C> <C> <C> <C>
476,739 shares of Common Stock Jan. 1989 $ 1,471,807 $ 126,836
10% convertible promissory note due 5/29/98 ` 212,120 212,120
Warrant to purchase 21,450 shares of Common Stock
at $5.67 per share, expiring 10/15/98 0 0
Warrant to purchase 13,000 shares of Common Stock
at $1.10 per share, expiring 5/29/99 0 0
--------------- ---------------
1,683,927 338,956
- -------------------------------------------------------------------------------------------------------------------------------
Cortex Pharmaceuticals, Inc.(A)
140,833 shares of Common Stock May 1988 504,038 404,895
75,000 shares of Preferred Stock(C) 53,030 21,157
--------------- ---------------
557,068 426,052
- -------------------------------------------------------------------------------------------------------------------------------
Exocell, Inc.* (B)
598,083 shares of Preferred Stock Feb. 1988 714,266 464,265
Convertible note due 9/30/97 53,030 53,030
--------------- ---------------
767,296 517,295
- -------------------------------------------------------------------------------------------------------------------------------
MNI Group Inc.(A)
211,973 shares of Common Stock Sept. 1987 451,457 61,981
- -------------------------------------------------------------------------------------------------------------------------------
Argonaut Medical, Inc. (D)
200,709 shares of Common Stock Apr. 1988 30,107 30,107
Nimbus Medical, L.P. (D)
38,340 units of limited partnership interest 0 0
--------------- ---------------
30,107 30,107
- -------------------------------------------------------------------------------------------------------------------------------
Somatogen, Inc.(A)
125,404 shares of Common Stock Dec. 1988 657,194 768,100
- -------------------------------------------------------------------------------------------------------------------------------
Ultramed, Inc. (E)
1,886,704 shares of Common Stock Oct. 1987 500,000 157,500
- -------------------------------------------------------------------------------------------------------------------------------
UroCor, Inc.(A) (H)
374,982 shares of Common Stock May 1991 1,051,652 3,426,959
Warrant to purchase 8,000 shares of Common Stock
at $1.25 per share, expiring 2/13/01 0 64,000
Warrant to purchase 8,995 shares of Common Stock
at $4.30 per share, expiring 10/18/98 0 44,525
Warrant to purchase 9,000 shares of Common Stock
at $5.00 per share, expiring 6/2/00 0 29,925
--------------- ---------------
1,051,652 3,565,409
- -------------------------------------------------------------------------------------------------------------------------------
Watson Pharmaceuticals, Inc. (A) (F)
108,321 shares of Common Stock Jan. 1989 1,351,405 3,799,868
- -------------------------------------------------------------------------------------------------------------------------------
Xenova Group plc* (A)
304,403 Ordinary shares Aug. 1988 1,614,963 1,471,728
- -------------------------------------------------------------------------------------------------------------------------------
Totals From Active Portfolio Investments $ 8,665,069 $ 11,136,996
=================================
</TABLE>
<PAGE>
WESTMED VENTURE PARTNERS, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS (UNAUDITED) - continued
March 31, 1997
SUPPLEMENTAL INFORMATION: LIQUIDATED PORTFOLIO INVESTMENTS(G)
<TABLE>
Cost Realized Loss Return
<S> <C> <C> <C>
Totals From Liquidated Portfolio Investments(H) $ 19,953,845 $ (8,030,116) $ 11,923,729
=====================================================
Combined Combined
Unrealized and Fair Value
Cost Realized Net Loss and Return
Totals From Active and Liquidated Portfolio Investments $ 28,618,914 $ (5,558,189) $ 23,060,725
=====================================================
</TABLE>
(A) Public company
(B) In February 1997, the expiration date of the Partnership's convertible
promissory note due from Exocell, Inc. was extended from 3/31/97 to 9/30/97.
(C) The 75,000 preferred shares of Cortex Pharmaceuticals, Inc. held by the
Partnership are convertible into 7,359 shares of the company's common stock.
(D) In January 1997, the Partnership received a $120,425 cash distribution
from Argonaut Medical, Inc. and a $29,522 cash distribution from Nimbus
Medical, L.P.
(E) On February 1, 1997, the Partnership's warrant to purchase 7,500 common
shares of Ultramed, Inc. at $.05 per share expired unexercised.
(F)On February 27, 1997, Oclassen Pharmaceuticals, Inc. merged with Watson
Pharmaceuticals, Inc. As a result of the merger, the Partnership exchanged
its 292,955 preferred shares of Oclassen for 108,321 common shares of
Waston, of which 8,124 shares are to be held in escrow for a period of one
year pursuant to the merger agreement.
(G) Amounts provided for "Supplemental Information: Liquidated Portfolio
Investments" are cumulative from inception through March 31, 1997.
(H) During the quarter, the Partnership sold the following portfolio
investments:
3,926 common shares of HBO & Co. for $244,385, realizing a gain of $78,451.
294,953 ordinary shares of Pharmaction Holdings, Ltd. for $36,509,
realizing a loss of $213,491. 10,000 common shares of UroCor Inc. for
$109,994, realizing a gain of $64,388.
* May be deemed an affiliated person of the Partnership as defined in the
Investment Company Act of 1940.
See notes to financial statements.
<PAGE>
WESTMED VENTURE PARTNERS, L.P.
STATEMENTS OF OPERATIONS (UNAUDITED)
For the Three Months Ended March 31,
<TABLE>
1997 1996
------------- ---------
INVESTMENT INCOME AND EXPENSES
Income:
<S> <C> <C>
Interest from short-term investments $ 37,729 $ 26,449
Interest, dividend and other income from portfolio investments 5,090 79
----------- -------------
Total 42,819 26,528
----------- -------------
Expenses:
Management fee 65,645 78,403
Professional fees 13,851 22,983
Insurance expense 21,290 21,266
Mailing and printing 12,670 9,746
Independent General Partners' fees 2,500 3,750
Custodial fees 1,331 1,427
Miscellaneous 4,750 2,002
----------- -------------
Total 122,037 139,577
----------- -------------
NET INVESTMENT LOSS (79,218) (113,049)
Net realized loss from investments (41,765) -
------------ -------------
NET REALIZED LOSS FROM OPERATIONS (120,983) (113,049)
Net change in unrealized appreciation or depreciation
of investments 186,245 (140,182)
----------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS (allocable to Partners) $ 65,262 $ (253,231)
=========== =============
</TABLE>
See notes to financial statements.
<PAGE>
WESTMED VENTURE PARTNERS, L.P.
STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Three Months Ended March 31,
<TABLE>
1997 1996
-------------- ---------
CASH FLOWS USED FOR OPERATING ACTIVITIES
<S> <C> <C>
Net investment loss $ (79,218) $ (113,049)
Adjustments to reconcile net investment loss to cash used for operating
activities:
Decrease in accrued interest receivable and other assets 5,634 9,301
(Decrease) increase in payables (11,059) 2,712
-------------- ---------------
Cash used for operating activities (84,643) (101,036)
-------------- ---------------
CASH FLOWS PROVIDED FROM INVESTING ACTIVITIES
Proceeds from sale of portfolio investments 354,379 -
Cash distributions received 149,947 30,289
-------------- ---------------
Cash provided from investing activities 504,326 30,289
-------------- ---------------
CASH FLOWS USED FOR FINANCING ACTIVITIES
Cash distribution paid to Partners (4,529,538) -
-------------- ---------------
Decrease in cash and cash equivalents (4,109,855) (70,747)
Cash and cash equivalents at beginning of period 6,135,508 2,310,697
-------------- ---------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 2,025,653 $ 2,239,950
============== ===============
</TABLE>
See notes to financial statements.
<PAGE>
WESTMED VENTURE PARTNERS, L.P.
STATEMENT OF CHANGES IN PARTNERS' CAPITAL (UNAUDITED)
For the Three Months Ended March 31, 1996
<TABLE>
Managing
General Limited
Partner Partners Total
<S> <C> <C> <C>
Balance at beginning of period $ 129,985 $ 12,868,163 $ 12,998,148
Net increase in net assets resulting
from operations 652 64,610 65,262
------------- --------------- ----------------
Balance at end of period $ 130,637 $ 12,932,773(A) $ 13,063,410
============= =============== ================
</TABLE>
(A) The net asset value per unit of limited partnership interest, including
the allocation of net unrealized appreciation of investments, was $193 at
March 31, 1997. Such per unit amount is based on average allocations to
all limited partners and does not reflect specific limited partner
allocations, which are determined by the original closing date associated
with the units of limited partnership interest held by each limited
partner.
See notes to financial statements.
<PAGE>
WESTMED VENTURE PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Organization and Purpose
WestMed Venture Partners, L.P. (the "Partnership") was formed under Delaware law
on February 5, 1987. The Partnership operates as a business development company
under the Investment Company Act of 1940, as amended. The Partnership is a
closed-end investment fund and accordingly its units of limited partnership
interest ("Units") are not redeemable. A total of 66,929 Units were sold to
limited partners (the "Limited Partners" and together with the Managing General
Partner (as hereinafter defined), the "Partners") at $500 per Unit.
The general partners of the Partnership include two individuals (the
"Independent General Partners") and the managing general partner, WestMed
Venture Management, L.P., a Delaware limited partnership (the "Managing General
Partner" and collectively with the Independent General Partners, the
"General Partners"). The general partner of the Managing General Partner is
Medical Venture Holdings, Inc., a Delaware corporation affiliated with
Oppenheimer & Co., Inc. ("Opco"). The limited partners of the Managing General
Partner are Oppenheimer Holdings, Inc., MVP Holdings, Inc. and BSW, Inc., a
Delaware corporation owned by John A. Balkoski, Philippe L. Sommer and Howard
S. Wachtler. Alsacia Venture Management, Inc. (the "Sub-Manager"), a
corporation controlled by Philippe L. Sommer, is the sub-manager of the
Partnership pursuant to a sub-management agreement among the Partnership,
the Managing General Partner and the Sub-Manager. The Sub-Manager has been
retained by the Managing General Partner to assist the Managing General Partner
in the performance of its duties to the Partnership.
Opco, a member firm of the New York Stock Exchange, the National Association of
Securities Dealers, Inc., and all principal United States securities exchanges,
is a diversified investment banking and securities firm and registered
investment advisor, providing a broad range of services to individual,
corporate, and institutional clients. Opco operates in the capacity of broker
and dealer for its customers, as well as trader for its own account. The
services provided by Opco and its subsidiaries, and the activities in which it
is engaged, include securities brokerage, securities research, customer
financing, securities trading, corporate finance, mergers and acquisitions,
underwriting and investment advisory services.
The Partnership's objective is to achieve long-term capital appreciation from
its portfolio of venture capital investments, consisting of companies engaged in
the health care industry. The Partnership is scheduled to terminate on December
31, 1997, subject to the right of the General Partners to extend the term for up
to two additional two-year periods, if they determine that such extensions are
in the best interest of the Partnership.
2. Summary of Significant Accounting Policies
Valuation of Investments - Portfolio investments are carried at fair value as
determined quarterly by the Managing General Partner under the supervision of
the Independent General Partners. The fair value of publicly-held portfolio
securities is adjusted to the closing public market price for the last trading
day of the
<PAGE>
WESTMED VENTURE PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - continued
accounting period discounted 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 board of directors of the portfolio company under
consideration or is greater than a 5% shareholder thereof, 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 (i) to reflect meaningful third-party
transactions in the private market and (ii) to reflect significant progress or
slippage in the development of the company's business such that cost no longer
reflects 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.
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. For portfolio investments, transactions are recorded on the date which
the Partnership obtains an enforceable right to demand the securities or payment
thereof. Realized gains and losses on investments sold are computed on a
specific identification basis.
Statements of Cash Flows - Cash and cash equivalents include short-term
interest-bearing investments in commercial paper and other money market
investments. The Partnership considers its interest-bearing cash account to be
cash equivalents.
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 $2.5
million at March 31, 1997, which was recorded for financial statement purposes,
was not recognized for tax purposes. Additionally, from inception to March 31,
1997, other timing differences totaling $8.2 million, relating to net realized
losses, original sales commissions paid and other costs of selling the Units,
have been recorded on the Partnership's financial statements but have not yet
been deducted for tax purposes.
3. Allocations of Partnership Profits and Losses
Pursuant to the Partnership's agreement of limited partnership, as amended (the
"Partnership Agreement"), the Partnership's net income and net realized gains
from all sources are allocated to all Partners, in proportion to
<PAGE>
WESTMED VENTURE PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - continued
their capital contributions, until all Partners have been allocated an amount
equal to 6% per annum, simple interest, on their total Adjusted Invested
Capital; i.e., original capital contributions reduced by previous distributions
(the "Priority Return"). Thereafter, net income and net realized gains from
venture capital investments in excess of the amount used to cover the Priority
Return are allocated 20% to the Managing General Partner and 80% to all Partners
in proportion to their capital contributions. Any net income from non-venture
capital investments in excess of the amount used to cover the Priority Return is
allocated to all Partners in proportion to their capital contributions. Realized
losses are allocated to all Partners in proportion to their capital
contributions. However, if realized gains had been previously allocated in the
80-20 ratio, then losses are allocated in the reverse order in which profits
were allocated. From its inception to March 31, 1997, the Partnership had a $7.5
million net loss from its venture capital investments including interest and
other income from portfolio investments totaling $509,000.
4. Related Party Transactions
Pursuant to the Partnership Agreement, the Managing General Partner is entitled
to receive a one-time venture capital fee equal to 5% of the gross proceeds from
the sale of Units. Such fee is incurred as portfolio investments are made in the
proportion of the cost of each portfolio investment to the net proceeds from the
sale of Units. Venture capital fees incurred are recorded as a cost of acquiring
the portfolio investments. There were no venture capital fees incurred for the
three months ended March 31, 1997. Cumulative venture capital fees incurred from
inception to March 31, 1997 totaled $1.6 million.
Pursuant to a management agreement between the Partnership and the Managing
General Partner, the Managing General Partner is responsible for the management,
administrative and certain investment advisory services necessary for the
operation of the Partnership. For such services, the Managing General Partner
receives a management fee at the annual rate of 2% of the lesser of the net
assets of the Partnership or the net contributed capital of the Partnership;
i.e., gross capital contributions to the Partnership (net of selling commissions
and organizational expenses) reduced by capital distributed. Such fee is
determined and payable quarterly. The compensation of the Sub-Manager is paid
directly by the Managing General Partner.
For services rendered to the Partnership, each of the two Independent General
Partners receives a $5,000 annual fee and reimbursement for all out-of-pocket
expenses relating to attendance at meetings of the General Partners.
<PAGE>
WESTMED VENTURE PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - continued
5. Classification of Investments
As of March 31, 1997, the Partnership's investments were categorized as follows:
<TABLE>
Percentage of
Type of Investments Cost Fair Value of Net Assets*
- ------------------- ---------------- --------------- ---------------
<S> <C> <C> <C>
Common Stock $ 7,132,623 $ 10,228,924 78.30%
Preferred Stock 767,296 485,422 3.71%
Debt Securities 795,150 422,650 3.24%
Limited Partnerships 0 0 .00%
---------------- --------------- -------
$ 8,665,069 $ 11,136,996 85.25%
================ =============== ======
Country/Geographic Region
United States $ 7,050,106 $ 9,665,268 73.99%
United Kingdom 1,614,963 1,471,728 11.26%
---------------- --------------- -------
$ 8,665,069 $ 11,136,996 85.25%
================ =============== ======
Industry
Biotechnology $ 5,280,448 $ 3,522,131 26.96%
Medical Devices 530,107 187,607 1.44%
Medical Services 1,051,652 3,565,409 27.29%
Nutritional Products 451,457 61,981 .47%
Pharmaceuticals 1,351,405 3,799,868 29.09%
---------------- --------------- ------
$ 8,665,069 $ 11,136,996 85.25%
================ =============== ======
</TABLE>
* Percentage of net assets is based on fair value.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Liquidity and Capital Resources
During the first quarter of 1997, the Partnership realized a $504,326 return
from cash distributions received and proceeds from the sale of certain of its
publicly-traded investments. No new or follow-on investments were made during
the three months ended March 31, 1997.
At March 31, 1997, the Partnership held $2.0 million in cash and short-term
investments: $498,000 in short-term securities with maturities of less than one
year and $1.5 million in an interest-bearing cash account. For the three months
ended March 31, 1997, the Partnership earned $37,729 of interest from such
investments. Interest earned from short-term investments in future periods is
subject to fluctuations in short-term interest rates and changes in funds
available for investment.
It is anticipated that funds needed to cover the Partnership's future follow-on
investments and operating expenses will be obtained from existing cash reserves,
interest from short-term investments and proceeds received from the sale of
portfolio investments.
Results of Operations
For the three months ended March 31, 1997 and 1996, the Partnership had a net
realized loss from operations of $120,983 and $113,049, respectively. Net
realized gain or loss from operations is comprised of (i) net realized gains or
losses from portfolio investments and (ii) net investment income or loss
(interest and dividends less operating expenses).
Realized Gains and Losses from Portfolio Investments - For the three months
ended March 31, 1997, the Partnership had a net realized loss of $41,765 from
the sale of certain portfolio investments. In February 1997, the Partnership
sold its 3,926 shares of HBO & Co. common stock for $244,385, resulting in a
realized gain of $78,451. Also in February 1997, the Partnership sold 10,000
common shares of UroCor, Inc. for $109,994, resulting in a realized gain of
$64,388. In March 1997, the Partnership sold its 294,953 ordinary shares of
Pharmaction Holding, Ltd. for $36,509, resulting in a realized loss of $213,491.
In addition to these sales, the Partnership received cash distributions from
Argonaut Medical, Inc. and Nimbus Medical, L.P. totaling $149,947, resulting in
a realized gain of $28,887.
There were no realized gains and losses from portfolio investments for the three
months ended March 31, 1996.
Investment Income and Expenses - Net investment loss for the three months ended
March 31, 1997 and 1996 was $79,218 and $113,049, respectively. The decrease in
net investment loss for the 1997 period compared to the 1996 period was
partially due to an $11,280 increase in interest from short-term investments,
resulting from an increase in funds available for such investments. Interest and
dividend income from portfolio investments also increased by $5,011 for the
first three months of 1997 compared to the same period in 1996 due to accrued
interest from a promissory note due from Aprogenex, Inc., which was purchased in
June 1996. Operating expenses decreased by $17,540, resulting mainly from
reduced management fees as discussed below. Additionally, a decrease in
professional fees was mostly offset by an increase in other expenses for the
1997 period.
Pursuant to a management agreement between the Partnership and the Managing
General Partner, the Managing General Partner is responsible for the management,
administrative and certain investment advisory services necessary for the
operation of the Partnership. For such services, the Managing General Partner
receives a management fee at the annual rate of 2% of the lesser of the net
assets of the Partnership or the net contributed capital of the Partnership;
i.e., gross capital contributions to the Partnership (net of selling commissions
and organizational expenses) reduced by capital distributed. Such fee is
determined and payable quarterly. Additionally, the Managing General Partner has
agreed to reduce the management fee payable by the Partnership for any
director's fees earned by the Managing General Partner from any of the
Partnership's portfolio companies. For the three months ended March 31, 1997 and
1996, the management fee was $65,645 and $78,403, respectively. The reduced
management fee for the 1997 period reflects the reduced net asset value of the
Partnership, primarily resulting from the cash distribution accrued at December
31, 1996 and paid to Partners in January 1997.
To the extent possible, the management fee and other operating expenses are paid
with funds provided from operations. Funds provided from operations are obtained
from interest received from 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 three months ended March 31,
1997, the Partnership had an $82,000 net unrealized gain, resulting from the net
upward revaluation of its publicly-held portfolio investments for the quarter.
Unrealized appreciation was further increased by the transfer of $103,917 from
unrealized loss to realized loss relating to the securities sold during the
quarter, as discussed above. The $82,328 unrealized gain and the net $103,917
transfer to realized loss resulted in a $186,245 net increase to net unrealized
appreciation of investments for the three month period.
For the three months ended March 31, 1996, the Partnership had a $140,182
decrease to net unrealized appreciation of investments, primarily due to the net
downward revaluation of its publicly-held portfolio investments.
Net Assets - Changes to net assets resulting from operations are comprised of
(i) net realized gain or loss from operations and (ii) changes to net unrealized
appreciation or depreciation of portfolio investments.
At March 31, 1997, the Partnership's net assets were $13.1 million, reflecting
an increase of $65,262 from $13.0 million at December 31, 1996. This increase
was comprised of the $186,245 increase to net unrealized appreciation of
investments partially offset by the $121,983 net realized loss from operations
for the three month period.
At March 31, 1996, the Partnership's net assets were $15.6 million, reflecting a
decrease of $253,231 from $15.9 million at December 31, 1995. This decrease was
comprised of the $140,182 decrease to net unrealized appreciation of investments
and the $113,049 net realized loss from operations for the three month period.
The net asset value per $500 Unit, including an allocation of net unrealized
appreciation or depreciation of portfolio investments, at March 31, 1997 and
December 31, 1996 was $193 and $192, respectively. Such per Unit amounts are
based on average allocations to all Limited Partners and do not reflect specific
Limited Partner allocations, which are determined by the original closing date
associated with the Units held by each Limited Partner.
<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.
No matter was submitted to a vote of security holders during the quarter covered
by this report.
Item 5. Other Information.
Not applicable.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
(27) Financial Data Schedule.
(b) No reports on Form 8-K have been filed during the quarter for
which this report is filed.
<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.
WESTMED VENTURE PARTNERS, L.P.
By: WestMed Venture Management, L.P.
Managing General Partner
By: Medical Venture Holdings, Inc.
General Partner
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
By: /s/ Stephen McGrath Executive Vice President (principal executive officer) of Medical
Stephen McGrath Venture Holdings, Inc.
By: /s/ Ann Oliveri Fusco Vice President (principal financial and accounting officer) of Medical Ann
Oliveri Fusco Venture Holdings, Inc.
</TABLE>
Date: May 15, 1997
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM WESTMED
VENTURE PARTNERS, L.P.'S QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD ENDED
MARCH 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-1-1997
<PERIOD-END> MAR-31-1997
<INVESTMENTS-AT-COST> 8,665,069
<INVESTMENTS-AT-VALUE> 11,136,996
<RECEIVABLES> 54,507
<ASSETS-OTHER> 29,446
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 13,246,602
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 183,192
<TOTAL-LIABILITIES> 183,192
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 66,929
<SHARES-COMMON-PRIOR> 66,929
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2,471,927
<NET-ASSETS> 13,063,410
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 42,819
<OTHER-INCOME> 0
<EXPENSES-NET> 122,037
<NET-INVESTMENT-INCOME> (79,218)
<REALIZED-GAINS-CURRENT> (41,765)
<APPREC-INCREASE-CURRENT> 186,245
<NET-CHANGE-FROM-OPS> 65,262
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 65,262
<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> 13,030,779
<PER-SHARE-NAV-BEGIN> 192
<PER-SHARE-NII> (1)
<PER-SHARE-GAIN-APPREC> 2
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 193
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
