<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 quarterly period ended June 30, 1997
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)
June 30, December 31,
1997 1996
---- ----
<S> <C> <C>
ASSETS
Investments:
Equity investments (cost basis
of $15,579,107 and $18,522,217 for
1997 and 1996, respectively) $19,685,825 35,527,098
Secured notes receivable, net 161,374 29,137
---------- ----------
Total investments 19,847,199 35,556,235
Cash and cash equivalents 5,989,487 1,402,668
Other assets 10,296 66,285
---------- ----------
Total $25,846,982 37,025,188
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable and accrued expenses $ 21,940 38,429
Due to related parties 33,300 90,890
Promissory notes -- 1,363,332
Interest payable -- 28,350
Other liabilities 16,601 21,455
---------- ----------
Total liabilities 71,841 1,542,456
Commitments and contingencies
(Notes 2 and 6)
Partners' capital:
Limited Partners
(Units outstanding of 400,000
for both 1997 and 1996) 19,855,627 17,224,580
Managing General Partners 1,812,796 1,253,271
Net unrealized fair value increase
from cost of equity investments 4,106,718 17,004,881
---------- ----------
Total partners' capital 25,775,141 35,482,732
---------- ----------
Total $25,846,982 37,025,188
========== ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
STATEMENTS OF OPERATIONS (unaudited)
- -----------------------------------
<TABLE>
<CAPTION>
For the Three For the Six
Months Ended Months Ended
June 30, June 30,
-------------------------- ----------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Income:
Secured notes receivable interest $ 6,604 20,872 15,345 49,756
Short-term investment interest 29,928 966 45,909 2,078
--------- --------- --------- ----------
Total income 36,532 21,838 61,254 51,834
Costs and expenses:
Management fees 78,801 101,515 171,364 209,179
Individual General Partners'
compensation 15,243 15,186 24,901 22,995
Operating expenses 257,817 360,190 536,590 590,871
--------- --------- --------- ----------
Total costs and expenses 351,861 476,891 732,855 823,045
--------- --------- --------- ----------
Net operating loss (315,329) (455,053) (671,601) (771,211)
Net realized gain from
sales of equity investments 1,804,280 1,521,645 3,448,542 2,944,936
Net realized gain from venture
capital limited partnership
investments -- -- 413,631 --
Realized losses from
investment write-downs -- (1,000,000) -- (1,077,091)
--------- --------- --------- ----------
Net realized income 1,488,951 66,592 3,190,572 1,096,634
Change in net unrealized
fair value:
Equity investments (7,136,453) 3,696,991 (12,898,163) 2,435,653
Secured notes receivable -- 372,000 -- --
--------- --------- --------- ----------
Net (loss) income $(5,647,502) 4,135,583 (9,707,591) 3,532,287
========= ========= ========= ==========
Net realized income per Unit $ 3 -- 7 2
========= ========= ========= ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
STATEMENTS OF CASH FLOWS (unaudited)
- -----------------------------------
<TABLE>
<CAPTION>
For the Six Months Ended June 30,
---------------------------------
1997 1996
---- ----
<S> <C> <C>
Cash flows from operating activities:
Interest received $ 57,263 16,697
Interest expense (42,976) (158,001)
Cash paid to vendors (174,129) (74,093)
Cash paid to related parties (627,263) (1,362,851)
--------- ---------
Net cash used by operating activities (787,105) (1,578,248)
--------- ---------
Cash flows from investing activities:
Secured notes receivable issued (150,500) (640,000)
Purchase of equity investments (1,389,501) (1,444,276)
Repayments of secured notes receivable 10,157 19,419
Repayments of equity investments -- 58,000
Proceeds from sales of equity
investments 8,267,100 5,727,476
Distributions from venture capital
limited partnerships -- 17,688
--------- ---------
Net cash provided by
investing activities 6,737,256 3,738,307
--------- ---------
Cash flows from financing activities:
Repayments of short-term
borrowings, net (1,363,332) (2,393,987)
--------- ---------
Net cash used by financing
activities (1,363,332) (2,393,987)
--------- ---------
Net increase (decrease) in cash
and cash equivalents 4,586,819 (233,928)
Cash and cash equivalents at
beginning of year 1,402,668 274,980
--------- ---------
Cash and cash equivalents at June 30 $ 5,989,487 41,052
========= =========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
STATEMENTS OF CASH FLOWS (unaudited)(continued)
- -----------------------------------------------
<TABLE>
<CAPTION> For the Six Months Ended June 30,
---------------------------------
1997 1996
---- ----
<S> <C> <C>
Reconciliation of net (loss) income to
net cash used by operating activities:
Net (loss) income $(9,707,591) 3,532,287
Adjustments to reconcile net (loss)
income to net cash used by
operating activities:
Realized losses from investment
write-downs -- 1,077,091
Net realized gain from sales
of equity investments (3,448,542) (2,944,936)
Net realized gain from venture
capital limited partnership
investments (413,631) --
Change in net unrealized fair value
of equity investments 12,898,163 (2,435,653)
Changes in:
Accrued interest on secured and
convertible notes receivable (3,991) (35,137)
Due to related parties (57,590) (764,978)
Other changes, net (53,923) (6,922)
--------- ---------
Net cash used by operating activities $ (787,105) (1,578,248)
========= =========
Non-cash investing activities:
Reclassification of secured notes to
equity investments (subordinated
notes) $ -- 640,000
========== =========
</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 June 30, 1997, and December 31, 1996, and the related Statements of
Operations for the three and six months ended June 30, 1997 and 1996,
and Statements of Cash Flows for the six months ended June 30, 1997 and
1996, 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,
1996. The following notes to financial statements for activity through
June 30, 1997, supplement those included in the Annual Report on Form
10-K. 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. Related Party Transactions
--------------------------
Related party costs are included in costs and expenses shown on the
Statements of Operations. Related party costs for the six months ended
June 30, 1997 and 1996, were as follows:
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Management fees $171,364 209,179
Individual General Partners' compensation 24,901 22,995
Reimbursable operating expenses 373,408 365,699
</TABLE>
Certain reimbursable expenses have been accrued based upon interim
estimates prepared by the Managing General Partners and are adjusted to
actual periodically. There were $11,621 and $60,463 due to related
parties at June 30, 1997, and December 31, 1996, respectively, related
to such expenses.
Amounts payable for management fees were $21,679 and $30,427 at June 30,
1997, and December 31, 1996, respectively. Pursuant to the Partnership
Agreement, quarterly management fees are equal to one quarter of one
percent of the fair value of Partnership assets.
3. Equity Investments
------------------
A full listing of the Partnership's equity investments at December 31,
1996, is in the 1996 Annual Report. Activity from January 1 through
June 30, 1997, consisted of:
<TABLE>
<CAPTION>
January 1 -
June 30, 1997
--------------
Principal
Investment Amount or Cost Fair
Industry/Company Position Date Shares Basis Value
- ---------------- -------- ---------- -------- ----- -----
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1997 $18,522,217 35,527,098
---------- ----------
Significant changes:
Communications
- --------------
NetChannel, Inc. Series B
Preferred
shares warrant
at $1.10;
exercised
01/97 10/96 136,363 (1,500) (1,500)
NetChannel, Inc. Series B
Preferred shares 01/97 284,044 68,863 149,999
NetChannel, Inc. Series B
Preferred shares 03/97 340,852 82,636 179,999
NetChannel, Inc. Convertible
note (1) 05/97 $67,671 68,454 68,454
NetChannel, Inc. Series B
Preferred shares 05/97 191,817 84,400 101,296
UT Starcom, Inc. Common
share
warrant
at $0.6875;
expiring
05/99 05/94 145,456 0 200,730
UT Starcom, Inc. Series A
Preferred shares 03/95 187,500 0 258,750
VOIS, Inc. Series A 08/96-
Preferred shares 02/97 312,500 62,500 531,250
VOIS, Inc. Series B
Preferred shares 05/97 120,000 300,000 300,000
Computer Systems and Software
- -----------------------------
Multiport, Inc. Series A 05/93-
Preferred shares 08/93 2,440,000 0 462,215
Quintar Series A
Corporation Convertible
Preferred shares 11/89 1,200,000 (1,200,000) (1,800,000)
Quintar Common share
Corporation warrant at
$1.00;
expiring 10/98 10/93 145,000 0 (72,500)
Quintar Series A
Corporation Preferred shares 05/95 384,178 (576,267) (576,267)
Reflection Technology, Series F
Inc. Preferred shares 01/94 28,572 0 (58,573)
Reflection Technology, Common
Inc. shares 05/94 19,567 0 (40,112)
Reflection Technology, Series D
Inc. Preferred shares 11/94 869,565 0 (1,782,608)
Reflection Technology, Series G
Inc. Preferred shares 11/94 172,877 0 (377,788)
Reflection Technology, Series D
Inc. Preferred shares 11/94 163,043 0 (334,238)
Reflection Technology, Series J
Inc. Preferred shares 04/96 547,918 0 (1,123,232)
Reflection Technology, Common share
Inc. warrant at $.50;
expiring 04/01 04/96 359,750 0 (557,613)
Reflection Technology, Convertible 01/97-
Inc. notes (1) 04/97 $416,708 418,989 418,989
Environmental
- -------------
Thermatrix, Inc. Common shares 06/96 1,105,847 0 (5,419,658)
Information Technology
- ----------------------
WorldRes, Inc. Series B
Preferred shares 01/97 66,568 225,000 225,000
Medical/Biotechnology
- ---------------------
Biex, Inc. Series D
Preferred shares 03/97 44,446 66,669 66,669
CV Therapeutics, Inc. Common shares 11/96 37,693 0 98,971
Endocare, Inc. Convertible
note (1) 08/96 $18,750 (19,817) (19,817)
Endocare, Inc. Common shares 01/97 1,750 6,125 6,388
Endocare, Inc. Common shares 01/97 8,300 20,750 28,832
Inhale Therapeutic Common
Systems, Inc. shares various 28,952 365,607 549,904
Penederm, Inc. Common shares 02/97 2,784 48,024 35,357
Physiometrix, Common
Inc. shares 04/96 270,791 0 (292,404)
RedCell, Inc. Series B
Preferred shares 12/94 132,979 0 (125,000)
SyStemix, Inc. Common shares 1991-1992 115,173 (771,504) (1,761,801)
Systemix, Inc. Common shares 06/96 660 (10,352) (10,096)
Systemix, Inc. Common shares 10/96 6,665 (106,779) (101,955)
Pharmaceuticals
- ---------------
Shaman Pharmaceuticals, Common
Inc. shares 01/93 409,167 (751,401) (2,434,544)
Shaman Pharmaceuticals, Common
Inc. shares 02/95 135,000 (1,363,332) (2,027,956)
Retail/Consumer Products
- ------------------------
Yes! Entertainment Common
Corporation shares 06/95 66,666 0 (79,183)
Venture Capital Limited Partnership Investments
- -----------------------------------------------
Various Limited Partnership
Interests various $2,216,264 12,500 (600,688)
---------- ----------
Total significant changes during the six
months ended June 30, 1997 (2,970,435)(15,914,730)
Other changes, net 27,325 73,457
---------- ----------
Total equity investments at June 30, 1997 $15,579,107 19,685,825
========== ==========
(1) Convertible notes include accrued interest. The interest rates on convertible notes
issued during 1997 ranged from 8% to 10%.
</TABLE>
Marketable Equity Securities
- ----------------------------
At June 30, 1997, and December 31, 1996, marketable equity securities
had aggregate costs of $2,685,656 and $5,552,176, respectively, and
aggregate market values of $3,021,699 and $11,161,489, respectively.
The net unrealized gains at June 30, 1997, and December 31, 1996,
included gross gains of $804,515 and $6,140,674, respectively.
Biex, Inc.
- ----------
In March of 1997, the Partnership made an additional investment in the
company by purchasing 44,446 Series D Preferred shares for $66,669.
Endocare, Inc.
- --------------
In January of 1997, the Partnership made an additional investment in the
company by purchasing 1,750 common shares for $6,125. In addition, the
Partnership converted its $18,750 note receivable, including accrued
interest of $2,000, into 8,300 common shares at a total cost of $20,750.
At June 30, 1997, the Partnership recorded an increase in the change in
fair value of $8,975 to reflect the publicly-traded market price for its
Endocare investments; a portion of the fair value was adjusted to
reflect a discount for restricted securities.
Multiport, Inc.
- ---------------
Based upon the fair value of Multiport's underlying net assets June 30,
1997, the Partnership recorded a fair value increase of $462,215 for its
investments. Multiport's assets consist of remaining net proceeds to be
received from a 1994 asset sale agreement, cash and notes receivable.
NetChannel, Inc.
- ----------------
In January of 1997, the Partnership cash exercised its Series B
Preferred share warrant for $149,999 and received 136,363 Series B
Preferred shares. In March of 1997, the Partnership issued a $150,000
convertible note receivable to the company. The Partnership also
received an additional 163,635 Series B Preferred shares as a result of
an adjustment to the warrant exercise price.
In May of 1997, the company effected a 1-to-2.083 stock split. As a
result, the Partnership received an additional 472,579 Series B
Preferred shares. The Partnership also purchased 191,817 Series B
Preferred shares by converting $82,329 of the notes receivable discussed
above including accrued interest of $2,071 for a total cost of $84,400.
The remaining note principal of $67,671 was reissued as a new note. At
June 30, 1997, the Partnership recorded an increase in the change in
fair value of $196,895 for the above transactions.
Quintar Corporation
- -------------------
In May of 1997, Splash Technology Holding Inc., acquired Quintar
Corporation for cash. The Partnership received total proceeds of
$2,147,372 for its Preferred share and warrant investments and realized
a gain of $371,105.
RedCell, Inc.
- -------------
During the second quarter of 1997, the company had a new round of
financing in which the Partnership did not participate. The pricing of
this round indicated a decrease in fair value of $125,000 for the
Partnership's existing investment.
Reflection Technology, Inc.
- ---------------------------
During the first half of 1997, the Partnership issued $416,708 in
convertible notes receivable to the company. In addition, based on the
Managing General Partners' opinion, the Partnership recorded a decrease
in fair value of $4,274,164 for its existing investments.
Shaman Pharmaceuticals, Inc.
- ----------------------------
During the first half of 1997, the Partnership sold its entire
investment in the company for total proceeds of $3,702,853 and realized
a gain of $1,588,120.
SyStemix Inc.
- -------------
In January of 1997, the Partnership sold its entire investment in the
company for total proceeds of $2,356,657 and realized a gain of
$1,468,022.
UT Starcom, Inc.
- ----------------
During the first quarter of 1997, the company closed a Series C
Preferred share round of financing in which the Partnership did not
participate. The pricing of this round indicated a fair value increase
of $459,480 for the Partnership's existing investment.
VOIS, Inc.
- ----------
In February of 1997, the Partnership made an additional investment in
the company by purchasing 62,500 Series A Preferred shares for $62,500.
Then in May of 1997, the Partnership purchased 120,000 Series B
Preferred shares for $300,000. The pricing of this round, in which
third parties participated, indicated a fair value increase of $468,750
for the Partnership's existing investment.
WorldRes, Inc.
- --------------
In January of 1997, the Partnership invested in the company by
purchasing 66,568 Series B Preferred shares for $225,000.
Venture Capital Limited Partnership Investments
- -----------------------------------------------
The Partnership made an additional investment of $12,500 in venture
capital limited partnership investments during the six months ended June
30, 1997. The Partnership recorded a fair value decrease of $600,688 as
a result of stock distributions from a venture capital limited
partnership investment and a net decrease in fair value of the
underlying investments.
During the first half of 1997, the Partnership received common stock
distributions of Inhale Therapeutics Systems, Inc., and Penederm, Inc.,
with fair values of $365,607 and $48,024, respectively; these
distributions were from profits and were recorded as realized gains from
venture capital limited partnership investments.
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. Portions of the
Partnership's Physiometrix, Inc., and Thermatrix, Inc., shares are
restricted.
Subsequent to quarter end, the fair value of the Partnership's
Thermatrix, Inc. investment decreased by $922,571 as a result of a
decrease in the publicly-traded market price at August 7, 1997.
4. Secured Notes Receivable, Net
-----------------------------
Activity from January 1, 1997, through June 30, 1997, consisted of:
<TABLE>
<S> <C>
Balance at January 1, 1997 $ 29,137
1997 activity:
Secured notes receivable issued 150,500
Repayments of secured notes receivable (10,157)
Decrease in accrued interest (8,106)
-------
Total secured notes receivable, net, at June 30, 1997 $161,374
=======
</TABLE>
The Partnership had accrued interest of $7,068 and $15,174 at June 30,
1997, and December 31, 1996, respectively.
5. Promissory Notes
----------------
At December 31, 1996, the Partnership had a promissory note to an
unaffiliated third party of $1,363,332. The note was fully repaid in
February, 1997, upon maturity. Interest expense for this note was
$14,626 during the six months ended June 30, 1997.
6. Commitments and Contingencies
-----------------------------
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 June 30, 1997, the Partnership had unfunded
commitments as follows:
<TABLE>
<S> <C>
Type
- ----
Equity investments $ 84,375
Term notes 190,775
Venture capital limited partnership investments 143,650
-------
Total $418,800
=======
</TABLE>
In 1996, the Partnership jointly guaranteed with two affiliated
partnerships a $1,000,000 line of credit between a financial institution
and a portfolio company in the computer systems and software industry.
If the affiliated partnerships are unable to finance their portion of
the guarantee, the Partnership may be liable up to $1,000,000.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
- -------------------------------
During the six months ended June 30, 1997, net cash used by operating
activities totaled $787,105. The Partnership paid management fees of
$180,112 to the Managing General Partners and reimbursed related parties
for operating expenses of $422,250. In addition, $24,901 was paid to
the Individual General Partners as compensation for their services.
Other operating expenses of $174,129 were paid and interest income of
$57,263 was received. The Partnership also paid interest of $42,976 on
borrowings and in February 1997, repaid its promissory note of
$1,363,332.
During the six months ended June 30, 1997, the Partnership issued
$150,500 in secured notes receivable to a portfolio company in the
computer systems and software industry and funded equity investments of
$1,389,501 mainly to portfolio companies in the communications and
computer systems and software industries. Repayments of secured notes
receivable provided cash of $10,157. Proceeds from the sales of equity
investments were $8,267,100. At June 30, 1997, the Partnership was
committed to fund $418,800 in additional investments and has outstanding
guarantees up to $1,000,000 as disclosed in Note 6 to the financial
statements.
Cash and cash equivalents at June 30, 1997, were $5,989,487. Future
interest income earned on notes receivable and proceeds from investment
sales 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 loss was $5,647,502 for the quarter ended June 30, 1997, compared to
net income of $4,135,583 during the same period in 1996. The change was
primarily due to decreases of $10,833,444 and $372,000 in the change in
net unrealized fair values of equity investments and secured notes
receivable, respectively. These changes were was partially offset by a
$1,000,000 decrease in realized losses from investment write-downs and a
$282,635 increase in net realized gain from sales of equity investments.
During the quarter ended June 30, 1997, the decrease in equity
investment fair value of $7,136,453 was primarily attributable to
portfolio companies in the environmental, computer systems and software,
and pharmaceuticals industries. During the same period in 1996, the
increase of $3,696,991 was primarily attributable to a portfolio company
in the environmental industry.
The Partnership recorded an increase in the fair value of secured notes
receivable of $372,000 for the quarter ended June 30, 1996, based upon
the level of loan loss reserves deemed adequate by the Managing General
Partners at quarter end. No such reserve was recorded for the same
period in 1997.
The Partnership recorded $1,000,000 in realized losses from investment
write-downs for the quarter ended June 30, 1996, related to a portfolio
company in the computer systems and software industry. No such loss was
recorded for the same period in 1997.
During the quarter ended June 30, 1997, net realized gain from sales of
equity investments of $1,804,280 was mainly due to the common stock sale
of Shaman Pharmaceuticals, Inc. For the same period in 1996, net
realized gain of $1,521,645 was also mostly due to a Shaman common stock
sale.
Total operating expenses were $257,817 and $360,190 for the quarters
ended June 30, 1997 and 1996, respectively. The decrease in operating
expenses in the current quarter over the comparative period in 1996 was
primarily due to a higher level of activity required for portfolio
management in 1996.
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 six months compared to corresponding six months in the preceding
- ------------------------------------------------------------------------
year
- ----
Net loss was $9,707,591 for the six months ended June 30, 1997, compared
to a net income of $3,532,287 during the same period in 1996. The
change was primarily due to a $15,333,816 decrease in the change in net
unrealized fair value of equity investments. This decrease was
partially offset by a $1,077,091 decrease in realized losses from
investment write-downs, a $503,606 increase in net realized gain from
sales of equity investments, and a $413,631 increase in net realized
gain from venture capital limited partnership investments.
During the six months ended June 30, 1997, the decrease in equity
investment fair value of $12,898,163 was mainly attributable to
portfolio companies in the environmental, computer systems and software,
and pharmaceuticals industries, partially offset by increases in
portfolio companies in the communications industries. During the same
period in 1996, the increase of $2,435,653 was primarily attributable to
portfolio companies in the environmental and retail/consumer products
industries as well as venture capital limited partnership investments,
partially offset by decreases in portfolio companies in the computer
systems and software and pharmaceuticals industries.
The Partnership recorded $1,077,091 in realized losses from investment
write-downs for the six months ended June 30, 1996, mostly related to a
portfolio company in the computer systems and software industry. There
was no such realized loss for the same period in 1997.
During the six months ended June 30, 1997, net realized gain from sales
of equity investments of $3,448,542 was mostly due to the common stock
sales of SyStemix, Inc., and Shaman Pharmaceuticals, Inc. A $2,944,936
net realized gain recorded for the same period in 1996 was mostly due to
the common stock sale of Shaman Pharmaceuticals, Inc.
Net realized gain from venture capital limited partnership investments
was $413,631 for the six months ended June 30, 1997. The gain
represented distributions from profits of a venture capital limited
partnership. There was no such gain realized during the same period in
1996.
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 June 30, 1997.
(b) Financial Data Schedule for the six months ended and as of June 30,
1997 (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: August 12, 1997 By: /s/Michael R. Brenner
-------------------------------------------
Michael R. Brenner
Controller
<TABLE> <S> <C>
<ARTICLE>6
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE FORM 10-Q AS OF JUNE 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
<MULTIPLIER>1
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<PERIOD-TYPE> 6-MOS
<INVESTMENTS-AT-COST> 15,740,481
<INVESTMENTS-AT-VALUE> 19,847,199
<RECEIVABLES> 0
<ASSETS-OTHER> 10,296
<OTHER-ITEMS-ASSETS> 5,989,487
<TOTAL-ASSETS> 25,846,982
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 71,841
<TOTAL-LIABILITIES> 71,841
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 21,668,423
<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> 4,106,718
<NET-ASSETS> 25,775,141
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 61,254
<OTHER-INCOME> 0
<EXPENSES-NET> (732,855)
<NET-INVESTMENT-INCOME> (671,601)
<REALIZED-GAINS-CURRENT> 3,862,173
<APPREC-INCREASE-CURRENT> (12,898,163)
<NET-CHANGE-FROM-OPS> (9,707,591)
<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> (9,707,591)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 171,364
<INTEREST-EXPENSE> 14,626
<GROSS-EXPENSE> 734,915
<AVERAGE-NET-ASSETS> 30,628,937
<PER-SHARE-NAV-BEGIN> 43
<PER-SHARE-NII> 7
<PER-SHARE-GAIN-APPREC> 0 <F1>
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 50
<EXPENSE-RATIO> 2.4
<AVG-DEBT-OUTSTANDING> 681,666
<AVG-DEBT-PER-SHARE> 1.7
<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>
