<PAGE>
UNITED STATES
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 period ended September 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from N/A to N/A
--- ---
Commission File No. 814-55
TECHNOLOGY FUNDING VENTURE PARTNERS IV, AN AGGRESSIVE GROWTH FUND, L.P.
- -----------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 94-3054600
------------------------------ ---------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2000 Alameda de las Pulgas, Suite 250
San Mateo, California 94403
- ------------------------------------- ---------
(Address of principal executive offices) (Zip Code)
(415) 345-2200
--------------------------------------------------
(Registrant's telephone number, including area code)
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
--- ---
No active market for the units of limited partnership interests
("Units") exists, and therefore the market value of such Units cannot be
determined.
<PAGE>
I. FINANCIAL INFORMATION
Item 1. Financial Statements
BALANCE SHEETS
- --------------
<TABLE>
<CAPTION>
(unaudited)
September 30, December 31,
1995 1994
---- ----
<S> <C> <C>
ASSETS
Investments:
Equity investments (cost basis
of $26,729,490 and $26,617,314 for
1995 and 1994, respectively) $45,732,115 40,329,977
Notes receivable, net
(cost basis of $71,393 and
$289,339 for 1995 and 1994,
respectively) 70,393 240,339
---------- ----------
Total investments 45,802,508 40,570,316
Cash and cash equivalents 191,618 10,501
Other assets 22,800 25,978
---------- ----------
Total $46,016,926 40,606,795
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable and accrued expenses $ 16,594 24,979
Due to related parties 33,087 29,635
Promissory note 1,363,332 --
Short-term borrowings 2,869,078 2,167,868
Interest payable 30,068 --
Other liabilities 70,864 94,822
---------- ----------
Total liabilities 4,383,023 2,317,304
Commitments (Notes 3 and 7)
Partners' capital:
Limited Partners
(Units outstanding of 400,000
for both 1995 and 1994) 20,246,644 21,841,484
Managing General Partners 2,385,634 2,784,344
Net unrealized fair value increase
(decrease) from cost:
Equity investments 19,002,625 13,712,663
Notes receivable (1,000) (49,000)
---------- ----------
Total partners' capital 41,633,903 38,289,491
---------- ----------
Total $46,016,926 40,606,795
========== ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
STATEMENTS OF OPERATIONS (unaudited)
- -----------------------------------
<TABLE>
<CAPTION>
For the Three For the Nine
Months Ended Months Ended
September 30, September 30,
------------------------- ----------------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Income:
Notes receivable interest $ 22,258 67,292 102,940 222,919
Short-term investment interest 2,757 1,627 8,615 24,617
--------- --------- --------- ----------
Total income 25,015 68,919 111,555 247,536
Costs and expenses:
Management fees 109,874 99,851 314,480 357,108
Individual general partners'
compensation 14,864 10,500 37,341 31,500
Amortization of organizational costs -- -- -- 1,167
Operating expenses 156,289 234,639 695,062 877,381
--------- --------- --------- ---------
Total costs and expenses 281,027 344,990 1,046,883 1,267,156
--------- --------- --------- ---------
Net operating loss (256,012) (276,071) (935,328) (1,019,620)
Net realized loss from sales of
equity investments -- -- (429,620) --
Recoveries from investments
previously written off 100,000 -- 142,582 --
Realized losses from
investment write-downs -- -- (771,184) (2,500)
--------- --------- --------- ---------
Net realized loss (156,012) (276,071) (1,993,550) (1,022,120)
Change in net unrealized
fair value:
Equity investments 2,125,483 (744,322) 5,289,962 (3,629,459)
Notes receivable 8,000 (24,000) 48,000 18,000
--------- --------- --------- ---------
Net income (loss) $1,977,471 (1,044,393) 3,344,412 (4,633,579)
========= ========= ========= =========
Net realized loss per Unit $ -- (1) (4) (2)
========= ========= ========= =========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
STATEMENTS OF CASH FLOWS (unaudited)
- -----------------------------------
<TABLE>
<CAPTION>
For the Nine Months Ended September 30,
--------------------------------------
1995 1994
---- ----
<S> <C> <C>
Cash flows from operating activities:
Interest received $ 89,619 101,811
Cash paid to vendors (173,091) (204,618)
Cash paid to related parties (734,896) (1,107,207)
Interest paid on short-term borrowings (224,256) (4,859)
Reimbursement of collection expenses
received from a portfolio company 89,715 --
--------- ---------
Net cash used by operating activities (952,909) (1,214,873)
--------- ---------
Cash flows from investing activities:
Notes receivable issued (62,500) --
Purchase of equity investments (900,834) (2,492,247)
Repayments of notes receivable 284,980 17,725
Repayments of equity investments 179,000 --
Recoveries from investments previously
written off 100,000 --
Proceeds from sales of
equity investments 775,842 --
Distributions from venture capital
limited partnerships 56,328 --
--------- ---------
Net cash provided (used) by
investing activities 432,816 (2,474,522)
--------- ---------
Cash flows from financing activities:
Short-term advances from Managing
General Partners 282,000 --
Repayments of short-term advances from
Managing General Partners (282,000) --
Proceeds from short-term
borrowings, net 701,210 737,841
--------- ---------
Net cash provided by
financing activities 701,210 737,841
--------- ---------
Net increase (decrease) in cash
and cash equivalents 181,117 (2,951,554)
Cash and cash equivalents at
beginning of year 10,501 3,072,847
--------- ---------
Cash and cash equivalents
at September 30 $ 191,618 121,293
========= =========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
STATEMENTS OF CASH FLOWS (unaudited) (continued)
- ------------------------------------------------
<TABLE>
<CAPTION>
For the Nine Months Ended September 30,
--------------------------------------
1995 1994
---- ----
<S> <C> <C>
Reconciliation of net income (loss) to
net cash used by operating activities:
Net income (loss) $ 3,344,412 (4,633,579)
Adjustments to reconcile net income
(loss) to net cash used by
operating activities:
Realized losses from investment
write-downs 771,184 2,500
Net realized loss from sales of
equity investments 429,620 --
Recoveries from investments
previously written off (142,582) --
Change in net unrealized fair value:
Equity investments (5,289,962) 3,629,459
Notes receivable (48,000) (18,000)
Changes in:
Accrued interest on notes receivable
and convertible notes receivable (20,644) (145,350)
Due to related parties 3,452 (62,435)
Other, net (389) 12,532
--------- ---------
Net cash used by operating activities $ (952,909) (1,214,873)
========= =========
Non-cash investing activities:
Purchase of equity investments financed
by a promissory note $ 1,363,332 --
========= =========
Common stock recovered from equity
investments previously written off $ 42,582 --
========= =========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (unaudited)
- ----------------------------------------
1. General
-------
In the opinion of the Managing General Partners, the Balance Sheets as
of September 30, 1995 and December 31, 1994, and the related Statements
of Operations for the three and nine months ended September 30, 1995 and
1994, and Statements of Cash Flows for the nine months ended September
30, 1995 and 1994, reflect all adjustments which are necessary for a
fair presentation of the financial position, results of operations and
cash flows for such periods. These statements should be read in
conjunction with the Annual Report on Form 10-K for the year ended
December 31, 1994. The following notes to financial statements for
activity through September 30, 1995 supplement those included in the
Annual Report on Form 10-K. Certain 1994 balances have been
reclassified to conform with the 1995 financial statement presentation.
Allocation of income and loss to Limited and General Partners is based
on cumulative income and loss. Adjustments, if any, are reflected in
the current quarter balances.
2. Financing of Partnership Operations
-----------------------------------
The Managing General Partners expect cash received from the liquidation
of Partnership investments and the collection of notes receivable will
provide the necessary liquidity to service Partnership debt and fund
Partnership operations. Until such future proceeds are received, the
Partnership is dependent upon the financial support of the Managing
General Partners to fund operations. The Managing General Partners have
committed to support the Partnership's working capital requirements
through advances as necessary.
3. Related Party Transactions
--------------------------
Related party costs are included in costs and expenses shown on the
Statements of Operations. Related party costs for the nine months ended
September 30, 1995 and 1994 were as follows:
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Management fees $314,480 357,108
Individual general partners' compensation 37,341 31,500
Amortization of organizational cost -- 1,167
Reimbursable operating expenses 296,812 656,164
</TABLE>
Certain reimbursable expenses have been accrued based upon interim
estimates prepared by the Managing General Partners and are adjusted to
actual costs periodically. There were $3,538 and $3,335 due from
related parties at September 30, 1995 and December 31, 1994,
respectively, related to such expenses.
Amounts payable for management fees were $36,625 and $32,970 at
September 30, 1995 and December 31, 1994, respectively. Pursuant to the
Partnership Agreement, beginning February 16, 1994, management fees
changed from two percent per annum of total Limited Partners' capital
contributions to a quarterly fee equal to one quarter of one percent of
the fair value of Partnership assets.
4. Equity Investments
------------------
A full listing of the Partnership's equity investments at December 31,
1994 is in the 1994 Annual Report. Activity from January 1 through
September 30, 1995 consisted of:
<TABLE>
<CAPTION>
January 1 -
September 30, 1995
Principal ------------------
Investment Amount or Cost Fair
Industry/Company Position Date Shares Basis Value
- ---------------- -------- --------- -------- ----- -----
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1995 $26,617,314 40,329,977
---------- ----------
Significant changes:
Communications
- --------------
Coded Communications Common
Corporation shares 04/93 145,454 (246,182) (21,963)
Coded Communications Common share
Corporation warrant at $3.16;
expired 04/95 04/93 145,454 (4,000) 0
Terrapin, Inc. Convertible 05/95 &
notes (1) 08/95 $250,000 254,339 254,339
Unitech Telecom, Inc. Convertible note (1) 05/94 $100,000 (106,040) (106,040)
Unitech Telecom, Inc. Series A
Preferred shares 03/95 46,875 375,000 375,000
Computer Systems and Software
- -----------------------------
Quintar Corporation Convertible
secured note (1) 10/93 $500,000 (554,201) (554,201)
Quintar Corporation Series A
Preferred
shares 05/95 384,178 576,267 576,267
Velocity Incorporated Convertible 08/95 &
notes (1) 09/95 $112,500 114,030 114,030
Medical/Biotechnology
- ---------------------
Biex, Inc. Series C
Preferred shares 06/95 83,334 83,334 83,334
Everest & Jennings
International Ltd. Common shares 01/94 592,720 0 238,274
Pharmos Corporation Common shares 04/95 56,776 42,582 147,618
SyStemix, Inc. Common shares 1991-1992 133,972 0 (505,744)
Microelectronics
- ----------------
Aprex Corporation Series D, E, & F 12/90-
Preferred shares 09/93 476,250 (120,000) (120,000)
KOR Electronics Convertible secured
note (1) 11/89 $348,000 (400,067) (400,067)
KOR Electronics Series D Preferred
shares 07/95 977,142 342,000 342,000
Pharmaceuticals
- ---------------
Shaman Pharmaceuticals, Common shares
Inc. 01/93 1,245,194 0 3,833,322
Shaman Pharmaceuticals, Common shares
Inc. 02/95 340,833 1,363,332 2,123,390
Retail/Consumer Products
- ------------------------
YES! Entertainment Series B
Corporation Preferred shares 01/93 900,000 (600,000) (450,000)
YES! Entertainment
Corporation Common shares 06/95 66,666 199,998 282,497
Semiconductor
- -------------
AG Associates, Inc. Common shares 12/91 85,976 (1,187,039) (790,984)
IBIS Technology Corp. Common shares 05/94 46,718 0 133,940
---------- ----------
Total significant changes during the nine
months ended September 30, 1995 133,353 5,555,012
Other changes, net (21,177) (152,874)
---------- ----------
Total equity investments at September 30, 1995 $26,729,490 45,732,115
========== ==========
(1) Convertible notes include accrued interest. The interest rate on convertible notes
issued during 1995 ranged from 8% to 12%.
</TABLE>
Marketable Equity Securities
- ----------------------------
At September 30, 1995 and December 31, 1994, marketable equity
securities had aggregate costs of $6,753,951 and $3,238,190,
respectively, and aggregate market values of $12,767,476 and $4,830,873,
respectively. The net unrealized gains at September 30, 1995 and
December 31, 1994 included gross gains of $6,093,887 and $2,153,132,
respectively.
AG Associates, Inc.(formerly AG Processing Technologies, Inc.)
- --------------------------------------------------------------
In March 1995, the company changed its name to AG Associates, Inc. and
effected a 1-for-4 reverse split of its common stock. Then in May 1995,
the company completed its initial public offering ("IPO"). In lieu of
entering into an underwriter lockup as a result of the IPO, the
Partnership sold its investment in the company to a private third-party
for total proceeds of $756,590 and realized a loss of $430,449.
Aprex Corporation
- -----------------
In June 1995, Aprex Corporation filed for Chapter 11 protection under
the U.S. Bankruptcy Code. In the third quarter of 1995, the company was
acquired by a third party; the purchase price was used to pay off senior
debt holders. As a result, the Partnership has written off the
remaining cost basis of its equity investment totaling $120,000.
Biex, Inc.
- ----------
In June 1995, the Partnership made an additional investment in Biex,
Inc. by purchasing 83,334 Series C Preferred shares at a total cost of
$83,334.
Coded Communications, Inc.
- --------------------------
During the second quarter of 1995, the Managing General Partners
determined that there has been a decline in value of the Partnership's
investments. As a result, the Partnership realized a loss of $250,182.
The Partnership also recorded a decrease in fair value of $21,963 to
reflect the publicly-traded market value at September 30, 1995.
KOR Electronics
- ---------------
In July 1995, the Partnership restructured its convertible secured note
with the company. Of the $715,000 principal balance, $342,000 was
converted into 977,142 Series D Preferred shares, $25,000 was repaid and
the maturity date of the remaining $348,000 was extended until July
1997. In addition, several warrants to purchase common shares were
canceled.
Pharmos Corporation/Oculon Corporation
- --------------------------------------
In March 1995, Oculon Corporation ("Oculon") was acquired by Pharmos
Corporation ("Pharmos"). The Partnership's Series II Senior Preferred
shares were canceled while the Series III Senior Preferred shares were
exchanged for 56,776 shares of marketable, unrestricted Pharmos common
stock. The Partnership recorded the $42,582 cost basis of the Pharmos
stock as a recovery from Oculon investments previously written off. An
increase in fair value of $147,618 reflected the market value of the
Pharmos stock at September 30, 1995.
Quintar Corporation
- -------------------
In May 1995, the Partnership converted its $500,000 convertible note
receivable including interest of $76,267 into 384,178 Series A Preferred
shares in accordance with the original convertible note agreement.
Shaman Pharmaceuticals, Inc.
- ----------------------------
In February 1995, the Partnership purchased 340,833 common shares of
Shaman Pharmaceuticals, Inc. at $4.00 per share from Eli Lilly and
Company ("Eli Lilly"). The purchase price of $1,363,332 was financed by
a two-year subordinated promissory note issued by Eli Lilly, secured by
the portfolio assets of the Partnership. The interest rate was 8.75% at
September 30, 1995; interest expense of $75,114 was recorded for the
nine months ended September 30, 1995. The Partnership also recorded an
increase in the change in fair value of $4,593,380 to reflect the value
at September 30, 1995 for its entire Shaman portfolio of marketable,
unrestricted securities.
Terrapin, Inc.
- --------------
During the first nine months of 1995, the Partnership issued convertible
notes totaling $250,000 to Terrapin, Inc., a wholly-owned subsidiary of
KOR Electronics.
Unitech Telecom, Inc.
- ---------------------
In March 1995, the Partnership purchased 46,875 Series A Preferred
shares from the company at a total cost of $375,000. The purchase price
consisted of $275,000 in cash and the conversion of a $100,000 note
issued in May 1994. Interest on the note was paid in cash.
Velocity Incorporated
- ---------------------
During the third quarter of 1995, the Partnership issued convertible
notes totaling $112,500 to the company.
YES! Entertainment Corporation
- ------------------------------
In June 1995, the company completed its IPO. Prior to the IPO, the
company effected a 1-for-15 reverse stock split. The Partnership's
Series B Preferred shares were converted into 66,666 common shares. The
Managing General Partners determined that there has been a decline in
value of the Partnership's investment; as a result, a realized loss of
$400,002 was recorded. The loss reflects the fact that the stock will
be restricted for two years.
Other Equity Investments
- ------------------------
Other significant changes reflected above relate to market value
fluctuations or the elimination of a discount relating to selling
restrictions for publicly-traded portfolio companies.
5. Notes Receivable, Net
---------------------
Activity from January 1, 1995 through September 30, 1995 consisted of:
<TABLE>
<S> <C>
Balance at January 1, 1995 $ 240,339
1995 activity:
Notes receivable issued 62,500
Repayments of notes receivable (284,980)
Decrease in allowance for loan losses 48,000
Other activity, net 4,534
-------
Total notes receivable, net, at September 30, 1995 $ 70,393
=======
</TABLE>
The Partnership had accrued interest of $16,955 and $13,713 at September
30, 1995 and December 31, 1994, respectively. The interest rate on note
issued in 1995 was 12%.
Activity in the allowance for loan losses was as follows:
<TABLE>
<S> <C>
Balance at January 1, 1995 $ 49,000
-------
Decrease in provision for loan losses (148,000)
Recoveries of previous write-offs:
Computer systems and software 100,000
-------
Change in net unrealized fair value of
notes receivable (48,000)
-------
Balance at September 30, 1995 $ 1,000
=======
</TABLE>
The allowance for loan losses is adjusted quarterly based upon changes
to the portfolio size and risk profile. Although the allowance is
established by evaluating individual debtor repayment ability, the
allowance represents the Managing General Partners' assessment of the
portfolio as a whole.
6. Short-Term Borrowings
---------------------
The Partnership has borrowing accounts with two financial institutions.
At September 30, 1995, the borrowing capacity of these two accounts,
which fluctuate based on collateral value, totaled $3,955,036;
subsequent to quarter end, as of November 3, 1995, the borrowing
capacity totaled $3,516,316. The outstanding balance at September 30,
1995 was $2,869,078. The weighted-average interest rates for the two
accounts were 8.37% and 9.37% for the nine months ended September 30,
1995. For the year ended December 31, 1994, the corresponding weighted-
average interest rates were 6.24% and 0%. Interest expense of $179,210
was recorded for the first nine months of 1995. The Partnership's
investments in Shaman Pharmaceuticals, Inc. and SyStemix, Inc. are
pledged as collateral.
7. Commitments
-----------
The Partnership is a party to financial instruments with off-balance-
sheet risk in the normal course of its business. Generally, these
instruments are commitments for future equity fundings, venture capital
limited partnership investments, equipment financing commitments, or
accounts receivable lines of credit that are outstanding but not
currently fully utilized. As they do not represent current outstanding
balances, these unfunded commitments are properly not recognized in the
financial statements. At September 30, 1995, the Partnership had
unfunded commitments as follows:
<TABLE>
<S> <C>
Type
- ----
Equity investments $291,666
Bridge note 262,500
Venture capital limited partnership investments 313,650
-------
Total $867,816
=======
</TABLE>
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
- -------------------------------
During the nine months ended September 30, 1995, net cash used by
operating activities totaled $952,909. The Partnership paid management
fees of $310,825 to the Managing General Partners and reimbursed related
parties for operating expenses of $386,730. In addition, $37,341 was
paid to the individual general partners as compensation for their
services. Other operating expenses of $173,091 were paid and $89,619 in
interest income was received. The Partnership also paid interest of
$224,256 on borrowings and received $89,715 in reimbursement from
portfolio companies for collection expenses.
During the nine months ended September 30, 1995, the Partnership issued
$62,500 in notes receivable to a portfolio company in the computer
systems and software industry and funded equity investments of $900,834
primarily to portfolio companies in the communications,
microelectronics, and computer systems and software industries.
Repayments of notes receivable and equity investments provided cash of
$284,980 and $179,000, respectively. Proceeds from sales of equity
investments were $775,842. The Partnership received $100,000 as
recoveries from equity investments previously written off and $56,328 in
distributions from venture capital limited partnership investments.
The Partnership had borrowing accounts with two financial institutions.
At September 30, 1995, the borrowing capacity, which fluctuates based on
collateral value, totaled $3,955,036. Subsequent to quarter end, as of
November 3, 1995, the borrowing capacity totaled $3,516,316. The
outstanding balance at September 30, 1995 was $2,869,078 of which
$701,210 was drawn during the first nine months of 1995. The
Partnership's investments in Systemix, Inc. and Shaman Pharmaceuticals,
Inc. are pledged as collateral.
During the first nine months of 1995, AG Associates, Inc. and YES!
Entertainment Corporation completed their IPO's. Although the
Partnership's holdings in YES! Entertainment Corporation are subject to
selling restrictions, the IPO indicates potential future liquidity for
this investment. The Partnership has already sold its holdings in AG
Associates, Inc.
Cash and cash equivalents at September 30, 1995 were $191,618. At
September 30, 1995, the Partnership was committed to fund $867,816 in
additional investments. Future interest income earned on notes
receivable, proceeds from investment sales, remaining borrowing capacity
on borrowing accounts and support from General Partners are expected to
be adequate to fund Partnership operations through the next twelve
months.
Results of Operations
- ---------------------
Current quarter compared to corresponding quarter in the preceding year
- -----------------------------------------------------------------------
Net income was $1,977,471 for the three months ended September 30, 1995
compared to a net loss of $1,044,393 during the same period in 1994.
The change was primarily due to a $2,869,805 increase in the change in
net unrealized fair value of equity investments, a $100,000 increase in
recoveries from investments previously written off, and a $78,350
decrease in total operating expenses.
During the quarter ended September 30, 1995, the increase in fair value
of equity investments of $2,125,483 was substantially attributable to
increases in a portfolio company in the pharmaceuticals industry.
During the same period in 1994, the decrease of $744,322 was mainly
related to the same portfolio company in the pharmaceuticals industry.
During the quarter ended September 30, 1995, the Partnership recorded a
$100,000 recovery from a note receivable investment in the computer
systems and software industry that was previously written off. There
was no such recoveries in the third quarter of 1994.
Total operating expenses were $156,289 for the three months ended
September 30, 1995 compared to $234,639 for the same period in 1994. In
August 1995, the Partnership received a reimbursement of $68,405 in
collection expenses from a portfolio company in the computer systems and
software industry. Investment operations expenses have been reduced by
this amount. Had there been no recovery of prior period costs, total
operating expenses would have been $224,694 for the quarter ended
September 30, 1995. The decrease from 1994 was primarily due to lower
investment operations and administrative and investor services expenses
as well as lower professional fees from lower overall portfolio
activities, partially offset by higher interest expense from short-term
borrowings.
Given the inherent risk associated with the business of the Partnership,
the future performance of the portfolio company investments may
significantly impact future operations.
Current nine months compared to corresponding nine months in the
- ----------------------------------------------------------------
preceding year
- --------------
Net income was $3,344,412 for the nine months ended September 30, 1995
compared to a net loss of $4,633,579 for the same period in 1994. The
change was primarily due to a $8,919,421 increase in the change in net
unrealized fair value of equity investments, a $182,319 decrease in
total operating expenses and a $142,582 increase in recoveries from
investments previously written off. These changes were partially offset
by a $768,684 increase in realized losses from investment write-downs, a
$429,620 increase in net realized loss from sales of equity investments
and a $135,981 decrease in total income.
During the nine months ended September 30, 1995, the increase in fair
value of equity investments of $5,289,962 was substantially attributable
to increases in a portfolio company in the pharmaceuticals industry.
During the same period in 1994, the decrease of $3,629,459 was primarily
attributable to portfolio companies in the pharmaceuticals and
retail/consumer products industries, partially offset by increases in
the medical and computer systems and software industries.
Total operating expenses were $695,062 for the nine months ended
September 30, 1995 compared to $877,381 for the same period in 1994. In
1995, the Partnership received reimbursements totaling $89,715 from
portfolio companies in the computer systems and software and
medical/biotechnology industries. Investment operations expenses have
been reduced by this amount. Had there been no recovery of prior period
costs, total operating expenses would have been $784,777 in 1995. The
decrease from 1994 was primarily due to lower investment operations and
administrative and investor services from decreased overall portfolio
activities, partially offset by higher interest expense.
The Partnership recorded recoveries of $142,582 from investments
previously written off for the nine months ended September 30, 1995.
These recoveries were attributable to portfolio companies in the
computer systems and software and medical/biotechnology industries.
There were no such recoveries during the same period in 1994.
During the nine months ended September 30, 1995, the Partnership
recorded realized losses from investment write-downs of $771,184 mainly
attributable to portfolio companies in the retail/consumer products and
communications industries. There was a $2,500 investment write-down for
the same period in 1994.
Net realized loss from sales of equity investments for the nine months
ended September 30, 1995 of $429,620 mainly related to the sale of AG
Associates, Inc. There were no investment sales during the same period
in 1994.
Total income was $111,555 and $247,536 for the nine months ended
September 30, 1995 and 1994, respectively. The decrease was primarily
due to lower outstanding convertible and secured notes receivable
balances.
II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) No reports on Form 8-K were filed by the Partnership during the
quarter ended September 30, 1995.
(b) Financial Data Schedule for the nine months ended and as of
September 30, 1995 (Exhibit 27).
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be
signed on its behalf by the undersigned, thereunto duly authorized.
TECHNOLOGY FUNDING VENTURE PARTNERS IV,
AN AGGRESSIVE GROWTH FUND, L.P.
By: TECHNOLOGY FUNDING INC.
Managing General Partner
Date: November 10, 1995 By: /s/Frank R. Pope
-------------------------------------------
Frank R. Pope
Executive Vice President and
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE>6
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE FORM 10-Q AS OF SEPTEMBER 30, 1995 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
<MULTIPLIER>1
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<PERIOD-TYPE> 9-MOS
<INVESTMENTS-AT-COST> 26,800,883
<INVESTMENTS-AT-VALUE> 45,802,508
<RECEIVABLES> 0
<ASSETS-OTHER> 22,800
<OTHER-ITEMS-ASSETS> 191,618
<TOTAL-ASSETS> 46,016,926
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,383,023
<TOTAL-LIABILITIES> 4,383,023
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 22,632,278
<SHARES-COMMON-STOCK> 400,000
<SHARES-COMMON-PRIOR> 400,000
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 19,001,625
<NET-ASSETS> 41,633,903
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 111,555
<OTHER-INCOME> 0
<EXPENSES-NET> (1,046,883)
<NET-INVESTMENT-INCOME> (935,328)
<REALIZED-GAINS-CURRENT> (1,058,222)
<APPREC-INCREASE-CURRENT> 5,337,962
<NET-CHANGE-FROM-OPS> 3,344,412
<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> 3,344,412
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 314,480
<INTEREST-EXPENSE> 254,324
<GROSS-EXPENSE> 1,139,548
<AVERAGE-NET-ASSETS> 39,961,697
<PER-SHARE-NAV-BEGIN> 55
<PER-SHARE-NII> (4)
<PER-SHARE-GAIN-APPREC> 0 <F1>
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 51
<EXPENSE-RATIO> 2.62
<AVG-DEBT-OUTSTANDING> 2,518,473
<AVG-DEBT-PER-SHARE> 6
<FN>
<F1>
A zero value is used since the change in net unrealized fair value is
not allocated to General Partners and Limited Partners as it is not
taxable. Only taxable gains or losses are allocated in accordance with
the Partnership Agreement.
</FN>
</TABLE>
