SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1993
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-17198
ML OKLAHOMA VENTURE PARTNERS, LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Oklahoma 73-1329487
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Meridian Tower, Suite 1060
5100 East Skelly Drive
Tulsa, Oklahoma 74135
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (918) 663-2500
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
None None
Securities registered pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interest
(Title of class)
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
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
At March 18, 1994, 10,248 units of limited partnership interest ("Units")
were held by non-affiliates of the Registrant. There is no established
public trading market for such Units.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Prospectus of the Registrant dated December 1, 1988, filed
with the Securities and Exchange Commission, as supplemented by a
supplement dated April 25, 1989, are incorporated by reference in Part I,
Part II and Part III hereof.
Portions of the Registrant's Form 10-Q for the quarter ended March 31,
1993, filed with the Securities and Exchange Commission on May 14, 1993,
are incorporated by reference in Part I hereof.
Portions of the Registrant's Form 10-Q for the quarter ended June 30, 1993,
filed with the Securities and Exchange Commission on August 13, 1993, are
incorporated by reference in Part I hereof.
Portions of the Registrant's Form 10-Q for the quarter ended September 30,
1993, filed with the Securities and Exchange Commission on November 15,
1993, are incorporated by reference in Part I hereof.
PART I
Item 1. Business.
Formation
ML Oklahoma Venture Partners, Limited Partnership (the "Partnership" or the
"Registrant") was organized under the Revised Uniform Limited Partnership
Act of the State of Oklahoma on July 15, 1988. MLOK Co., Limited
Partnership (the "Managing General Partner") and four individuals (the
"Individual General Partners") are the general partners of the Partnership.
The Managing General Partner is an Oklahoma limited partnership in which
Merrill Lynch Venture Capital Inc. (the "Management Company") acts as the
general partner. The Management Company is an indirect subsidiary of
Merrill Lynch & Co., Inc. and an affiliate of Merrill Lynch, Pierce, Fenner
& Smith Incorporated ("MLPF&S").
On September 23, 1988, the Partnership elected to operate as a business
development company under the Investment Company Act of 1940. The
Partnership's investment objective is to seek long-term capital
appreciation by making venture capital investments in new and developing
companies which the management of the Partnership believes offer
significant long-term growth potential. The Partnership considers this
activity to constitute the single industry segment of venture capital
investing.
The Partnership was organized to qualify as a "qualified venture capital
company" under Oklahoma law and intends to invest at least 55% of its
capitalization in companies which constitute "Oklahoma business ventures",
as that term is defined under Oklahoma law. Accordingly, the Partnership's
limited partners (the "Limited Partners") were entitled to a credit against
their Oklahoma state income tax equal to 20% of the amount of their
original investment in the Partnership. From its inception through
December 31, 1993, the Partnership invested $7.8 million in 16 portfolio
investments of which 61% represents investments in Oklahoma business
ventures.
The Partnership publicly offered, through MLPF&S, 25,000 units of limited
partnership interest at $1,000 per unit (the "Units"). The Units were
registered under the Securities Act of 1933 pursuant to a Registration
Statement on Form N-2 (File No. 33-24547), which was declared effective on
December 1, 1988. The Partnership completed its offering on August 14,
1989. A total of 10,248 Units were sold and the Limited Partners were
admitted to the Partnership. Gross capital contributions to the
Partnership total $10,355,556; $10,248,000 from the Limited Partners,
$103,556 from the Managing General Partner and $4,000 from the Individual
General Partners.
The information set forth under the captions "Risk and Other Important
Factors" (pages 11 through 18), "Investment Objective and Policies" (pages
21 through 26) and "Oklahoma Considerations" (pages 26 through 28) in the
Prospectus of the Partnership dated December 1, 1988 filed with the
Securities and Exchange Commission pursuant to Rule 497(b) under the
Securities Act of 1933, as supplemented by a supplement dated April 25,
1989 filed pursuant to Rule 497(d) under the Securities Act of 1933 (the
"Prospectus"), is incorporated herein by reference.
The Venture Capital Investments
During the year ended December 31, 1993, the Partnership invested $1.3
million in four new portfolio companies and $1.2 million in seven existing
portfolio companies. From August 14, 1989 (commencement of operations) to
December 31, 1993, the Partnership has invested $7.8 million in 16
portfolio companies. Additionally, at December 31, 1993, approximately
$1.4 million of the original net proceeds of $9.2 million remained
available for investment in venture situations.
The descriptions of the Partnership's follow-on investments in Silverado
Foods, Inc., Sports Tactics International, Inc., Symex Corp. and C.R.
Anthony Company set forth in Item 5 of Part II of the Partnership's
quarterly report on Form 10-Q for the quarter ended March 31, 1993 are
incorporated herein by reference.
The descriptions of the Partnership's investments in Data Critical Corp.
and Independent Gas Company Holdings, Inc. and the Partnership's follow-on
investments in Symex Corp. and Silverado Foods, Inc. set forth in Item 5 of
Part II of the Partnership's quarterly report on Form 10-Q for the quarter
ended June 30, 1993 are incorporated herein by reference.
The descriptions of the Partnership's investment in Enerpro International,
Inc. and the Partnership's follow-on investments in Symex Corp. set forth
in Item 5 of Part II of the Partnership's quarterly report on Form 10-Q for
the quarter ended September 30, 1993 are incorporated herein by reference.
On October 4, 1993, the Partnership purchased a 10% promissory note from
Symex Corp. for $3,500. This investment is in addition to the $142,500 of
10% promissory notes previously owned by the Partnership.
On October 15, 1993, the Partnership purchased a 9% debenture and 17,336
common shares of Excel Energy Technologies, Ltd. for $402,500. Excel,
located in Tulsa, Oklahoma, provides energy management systems to
commercial building owners.
On October 15, 1993, the Partnership purchased a prime plus 1.75%
convertible subordinated promissory note from Diagnetics, Inc. for
$200,000. This investment is in addition to the 100,000 preferred shares,
10,006 common shares and 418,000 common stock warrants previously owned by
the Partnership.
On October 19, 1993, the Partnership purchased an 8% convertible note from
CytoDiagnostics, Inc. for $100,000. This investment is in addition to the
449,915 preferred shares previously owned by the Partnership.
On November 24, 1993, the Partnership purchased an 8% promissory note from
Great Outdoors Publishing, Inc. for $20,000. This investment is in
addition to the 275,000 preferred shares previously owned by the
Partnership.
Competition
The Partnership encounters competition from other entities having similar
investment objectives, including other entities affiliated with Merrill
Lynch & Co., Inc. Primary competition for venture capital investments has
been from venture capital partnerships, venture capital affiliates of large
industrial and financial companies, small business investment companies and
wealthy individuals.
Employees
The Partnership has no employees. The Managing General Partner, subject to
the supervision of the Individual General Partners, manages and controls
the Partnership's venture capital investments. The Management Company
performs, or arranges for others to perform, the management and
administrative services necessary for the operation of the Partnership and
is responsible for managing the Partnership's short-term investments.
Item 2. Properties.
The Partnership does not own or lease physical properties.
Item 3. Legal Proceedings.
The Partnership is not a party to any material pending legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted during the fourth quarter of the fiscal year
covered by this report to a vote of security holders.
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters.
The information with respect to the market for the Units set forth under
the subcaption "Substituted Limited Partners" on page 40 of the Prospectus,
is incorporated herein by reference. There is no established public
trading market for the Units as of March 18, 1994. The approximate number
of holders of Units as of March 18, 1994 is 1,150. The Managing General
Partner and the four Individual General Partners of the Partnership also
hold interests in the Partnership.
Effective November 9, 1992, the Registrant was advised that Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("Merrill Lynch" or "MLPF&S")
introduced a new limited partnership secondary service through Merrill
Lynch's Limited Partnership Secondary Transaction Department ("LPSTD").
This service will assist Merrill Lynch clients wishing to buy or sell
Registrant Units. The LPSTD has replaced the Merrill Lynch Investor
Service, a service which was designed to match interested buyers and
sellers of partnership interests, but which had been suspended since
September 1991 for transactions involving the Registrant's Units.
The Partnership has not made any cash distributions to its Partners during
the period from August 14, 1989 (commencement of operations) to December
31, 1993. The information under the heading "Distributions" contained in
the section entitled "Partnership Distributions and Allocations" on pages
35 and 36 of the Prospectus is incorporated herein by reference.
Item 6. Selected Financial Data.
($ In Thousands, Except Per Unit Information)
For the Period
from 8/14/89
(commencement
Years Ended December 31, of operations) to
1993 1992 1991 1990 12/31/89
Net Assets $ 8,361 $ 9,950 $ 8,893 $ 8,918 $ 9,384
Cost of Portfolio
Investments 2,543 2,400 1,654 477 710
Cumulative Cost
of Portfolio
Investments 7,784 5,241 2,841 1,187 710
Net Investment
Income (Loss) (159) (110) 55 307 159
Realized Loss on
Investments (1,043) - (63) (510) -
PER UNIT OF LIMITED
PARTNERSHIP INTEREST:
Net Asset Value,
including Net Unrealized
Appreciation (Depreciation)
of Investments $ 807 $ 961 $ 859 $ 861 $ 906
Net Investment
Income (Loss) (15) (11) 5 30 15
Realized Loss on
Investments (101) - (6) (49) -
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Liquidity and Capital Resources
During the year ended December 31, 1993, the Partnership invested $2.5
million in portfolio companies; $1.3 million in four new portfolio
companies and $1.2 million in seven existing portfolio companies. From
August 14, 1989 (commencement of operations) to December 31, 1993, the
Partnership has invested $7.8 million in 16 portfolio companies.
Approximately $1.4 million of the original net proceeds of $9.2 million
remained available for investment.
At December 31, 1993, the Partnership held $1.9 million in cash and short-
term investments; $998,000 in short-term investments with maturities of
less than one year and $881,000 in an interest-bearing cash account. Such
investments provide the Partnership with the liquidity necessary to make
investments in venture situations as opportunities for investment arise.
Interest earned on such investments for the year ended December 31, 1993
was $93,000. Interest earned from short-term investments in future periods
is subject to fluctuations in short-term interest rates and changes in
amounts available for investment in such securities.
Results of Operations
Net realized loss from operations is comprised of 1) net realized losses
from portfolio investments written-off and 2) net investment income or
loss. For the years ended December 31, 1993, 1992 and 1991, the
Partnership had a net realized loss from operations of $1.2 million,
$110,000 and $7,000, respectively.
Realized Losses from Investments Written-Off - For the year ended December
31, 1993, the Partnership had a $1 million realized loss from investments
written-off. During the year, the Partnership wrote-off its $693,000
equity investment in Symex Corp. as the company ceased operations in 1993.
Additionally, the Partnership wrote-off $350,000 of its equity investment
in Sports Tactics International, Inc. due to financial difficulties at the
company.
The Partnership had no realized gains or losses from portfolio investments
during the year ended December 31, 1992.
For the year ended December 31, 1991, the Partnership realized a loss of
$63,000 from the write-off of the principal amount of its promissory note
due from Tricon America Corporation as a result of the company ceasing
operations.
Investment Income and Expenses - Net investment loss (investment income
less operating expenses) for the years ended December 31, 1993 and 1992 was
$159,000 and $110,000, respectively. Net investment income for the year
ended December 31, 1991 was $55,000. The decrease in net investment income
for each consecutive period primarily resulted from a decrease in interest
income earned from short-term investments partially offset by an increase
in interest and other income from portfolio investments, as discussed
below. Interest income earned from short-term investments for the years
ended December 31, 1993, 1992 and 1991 was $93,000, $201,000 and $458,000,
respectively. These decreases are due to reductions in amounts available
for investment in short-term securities and declining interest rates for
each consecutive period. Funds available for investment in short-term
securities at December 31, 1993, 1992 and 1991 were $1.9 million, $4.5
million and $6.5 million, respectively. Amounts available for investment
in short-term securities declined during these periods as funds were used
for investments in new and existing portfolio companies. Amounts available
for investment in short-term securities will continue to decline in future
periods as cash is used to make additional portfolio investments.
The Partnership receives interest and dividend income from certain of its
portfolio investments. For the years ended December 31, 1993 and 1992, the
Partnership had interest and other income from its portfolio investments of
$126,000 and $85,000, respectively. For 1991, the Partnership had a net
loss of $27,000 from its portfolio investments. The increase for the 1993
period compared to the 1992 period primarily resulted from an increase in
preferred stock dividends received from Diagnetics, Inc. The increase for
the 1992 period compared to the 1991 period primarily resulted from an
increase in preferred stock dividends received from BACE Manufacturing,
Inc. in 1992 and the write-off of dividends receivable from Symex in the
1991 period.
The Management Company performs, or arranges for others to perform, the
management and administrative services necessary for the operation of the
Partnership. The Management Company receives compensation at the annual
rate of 2.5% of the gross capital contributions to the Partnership, reduced
by selling commissions and organizational and offering expenses paid by the
Partnership, capital distributed and realized losses, with a minimum annual
fee of $200,000. Such fee is determined and paid quarterly. The
management fee for the years ended December 31, 1993, 1992 and 1991 was
$204,000, $215,000 and $216,000, respectively. The management fee and
other expenses incurred directly by the Partnership are paid with funds
provided from operations. For the years ended December 31, 1993, 1992 and
1991, funds provided from operations primarily were obtained from interest
received from short-term investments and interest and other income received
from portfolio investments.
Unrealized Gains and Losses from Portfolio Investments - For the year ended
December 31, 1993, the Partnership had a net unrealized loss of $928,000,
resulting from the net downward revaluation of certain portfolio
investments. Additionally, during 1993, the Partnership transferred
$540,000 from unrealized loss to realized loss relating to the write-off of
a portion of its investment in Symex and Sports Tactics, as discussed
above. The $928,000 unrealized loss, partially offset by the $540,000
transfer from unrealized loss to realized loss, resulted in a $388,000
reduction to the Partnership's net unrealized appreciation for 1993.
For the year ended December 31, 1992, the Partnership had a net unrealized
gain of $1.2 million, primarily resulting from the net upward revaluation
of certain portfolio investments during 1992. For the year ended December
31, 1991, the Partnership had a net unrealized loss of $85,000 due to the
net downward revaluation of certain portfolio investments. Additionally,
during 1991, the Partnership transferred $62,500 from unrealized loss to
realized loss relating to the write-off of its remaining investment in
Tricon. The $85,000 unrealized loss, partially offset by the $62,500
transfer from unrealized loss to realized loss, resulted in an $18,000
increase to the Partnership's net unrealized depreciation for 1991.
Net Assets - Changes in net assets resulting from operations are comprised
of 1) net realized gains and losses from operations and 2) changes in
unrealized appreciation or depreciation of portfolio investments. For the
year ended December 31, 1993, 1992 and 1991, net assets from operations
decreased $1.6 million, increased $1.1 million and decreased $25,000,
respectively.
At December 31, 1993, the Partnership's net assets were $8.4 million, a
decrease of $1.6 million from $10 million at December 31, 1992. This
decrease resulted from the $1.2 million net realized loss from operations
and a $388,000 decrease in net unrealized appreciation of investments for
1993.
At December 31, 1992, the Partnership's net assets were $10 million, an
increase of $1.1 million from $8.9 million at December 31, 1991. This
increase resulted from the $1.2 million net unrealized gain from the
Partnership's portfolio investments exceeding the $110,000 net realized
loss from operations for 1992.
At December 31, 1991, the Partnership's net assets were $8,893,000, a
decrease of $25,000 from $8,918,000 at December 31, 1990. This decrease
resulted from the $18,000 increase in net unrealized depreciation of
investments and a $7,000 net realized loss from operations for 1991.
Gains and losses from portfolio investments are allocated to the Partners'
capital accounts when realized in accordance with the Partnership Agreement
(see Note 3 of Notes to Financial Statements). However, for purposes of
calculating the net asset value per unit of limited partnership interest,
net unrealized appreciation or depreciation of investments has been
included as if the net appreciation or depreciation had been realized and
allocated to the Limited Partners in accordance with the Partnership
Agreement. Pursuant to such calculation, the net asset value per $1,000
Unit at December 31, 1993, 1992 and 1991 was $807, $961 and $859,
respectively.
Item 8. Financial Statements and Supplementary Data.
ML OKLAHOMA VENTURE PARTNERS, LIMITED PARTNERSHIP
INDEX
Independent Auditors' Report
Balance Sheets as of December 31, 1993 and 1992
Schedule of Portfolio Investments as of December 31, 1993
Schedule of Portfolio Investments as of December 31, 1992
Statements of Operations for the years ended December 31, 1993, 1992 and
1991
Statements of Cash Flows for the years ended December 31, 1993, 1992 and
1991
Statements of Changes in Partners' Capital for the years ended December 31,
1991, 1992 and 1993
Notes to Financial Statements
Schedule I - Money Market Investments as of December 31, 1993 and 1992
NOTE - All schedules, other than Schedule I, are omitted because of the
absence of conditions under which they are required or because the required
information is included in the financial statements or the notes thereto.
DELOITTE & TOUCHE
1633 Broadway
New York, NY 10019-6754
INDEPENDENT AUDITORS' REPORT
ML Oklahoma Venture Partners, Limited Partnership:
We have audited the accompanying balance sheets of ML
Oklahoma Venture Partners, Limited Partnership as of
December 31, 1993 and 1992, including the schedules of
portfolio investments, and the related statements of
operations, cash flows, and changes in partners' capital
for each of the three years in the period ended December
31, 1993. Our audits also included the financial statement
schedules listed in the Index at Item 8 of Form 10-K.
These financial statements and financial statement
schedules are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that
we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures
included confirmation of securities owned at December 31,
1993 and 1992 by correspondence with the custodian; where
confirmation was not possible, we performed other audit
procedures. An audit also includes assessing the
accounting principles used and significant estimates made
by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, such financial statements present fairly,
in all material respects, the financial position of ML
Oklahoma Venture Partners, Limited Partnership at December
31, 1993 and 1992, and the results of its operations and
its cash flows for each of the three years in the period
ended December 31, 1993 in conformity with generally
accepted accounting principles. Also, in our opinion, such
financial statement schedules, when considered in relation
to the basic financial statements taken as a whole, present
fairly in all material respects the information set forth
therein.
As explained in Note 2, the financial statements include
securities valued at $6,563,579 and $5,456,975 at December
31, 1993 and 1992, respectively, representing 79% and 55%
of net assets, respectively, whose values have been
estimated by the Managing General Partner in the absence of
readily ascertainable market values. We have reviewed the
procedures used by the Managing General Partner in arriving
at its estimate of value of such securities and have
inspected underlying documentation, and, in the
circumstances, we believe the procedures are reasonable and
the documentation appropriate. However, because of the
inherent uncertainty of valuation, those estimated values
may differ significantly from the values that would have
been used had a ready market for the securities existed,
and the differences could be material.
Deloitte & Touche
February 14, 1994
ML OKLAHOMA VENTURE PARTNERS, LIMITED PARTNERSHIP
BALANCE SHEETS
DECEMBER 31,
1993 1992
ASSETS
Investments - Note 2
Portfolio investments, at fair value
(cost $6,063,931 at December 31, 1993 and
$4,569,333 at December 31, 1992) $ 6,563,579 $ 5,456,975
Money market investments, at amortized cost 997,743 3,981,903
Cash and cash equivalents 880,833 524,431
Deposits in escrow - 70,295
Dividends and other receivables 34,781 14,110
Deferred organizational costs, net of accumulated
amortization of $41,754 at December 31, 1993
and $32,210 at December 31, 1992 - Note 2 5,964 15,508
TOTAL ASSETS $ 8,482,900 $ 10,063,222
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Accounts payable $ 60,264 $ 48,455
Due to Management Company - Note 4 46,704 53,776
Due to Independent General Partners - Note 6 15,000 10,500
Total liabilities 121,968 112,731
Partners' Capital:
Managing General Partner 78,613 90,629
Individual General Partners 3,038 3,502
Limited Partners (10,248 Units) 7,779,633 8,968,718
Unallocated net unrealized appreciation
of investments - Note 2 499,648 887,642
Total partners' capital 8,360,932 9,950,491
TOTAL LIABILITIES AND PARTNERS' CAPITAL $ 8,482,900 $ 10,063,222
See notes to financial statements.
ML OKLAHOMA VENTURE PARTNERS, LIMITED PARTNERSHIP
SCHEDULE OF PORTFOLIO INVESTMENTS
DECEMBER 31, 1993
Initial
Investment Fair
Company / Position Date Cost Value
BACE Manufacturing, Inc.*
1,078 shares of Preferred Stock Feb. 1992 $539,000 $898,000
C.R. Anthony Company
275,317 shares of Common Stock Oct. 1992 600,191 600,191
Warrants to purchase 48,045 shares of Common Stock
at $3.75 per share, expiring 6/3/94 2,175 2,175
CytoDiagnostics, Inc.*(A)(B)
449,915 shares of Preferred Stock May 1991 817,709 1,279,805
8% Convertible Subordinated Note due 10/18/94 100,000 100,000
Data Critical Corp.*(A)
75,000 shares of Preferred Stock April 1993 150,000 150,000
Diagnetics, Inc.*(A)
100,000 shares of Preferred Stock April 1991 500,000 500,000
10,006 shares of Common Stock 13,028 13,028
Warrant to purchase 25,000 shares of Common Stock
at $5 per share, expiring 4/11/95 1,000 1,000
Warrant to purchase 393,000 shares of Common Stock
at $0.01 per share, expiring 12/31/96 1,000 1,000
Convertible Subordinated Promissory Note
due 6/30/94, Prime + 1.75% 200,000 200,000
Eckerd Corporation*+(C)
15,491 shares of Common Stock July 1992 142,992 248,166
Enerpro International, Inc.
35,000 shares of Preferred Stock Aug. 1993 350,000 350,000
Envirogen, Inc.+
150,000 shares of Common Stock Sept. 1991 525,000 385,313
Warrants to purchase 50,000 shares of Common Stock
at $5.20 per share, expiring 10/12/98 0 14,063
Excel Energy Technologies, Ltd.(A)
9% Debenture due 10/14/94 Oct. 1993 400,000 400,000
17,336 shares of Common Stock 2,500 2,500
Great Outdoors Publishing, Inc.*(A)
275,000 shares of Preferred Stock Aug. 1992 275,000 275,000
8% Promissory Note due 6/30/94 20,000 20,000
Independent Gas Company Holdings, Inc.*
400 shares of Preferred Stock June 1993 400,000 400,000
3,336 shares of Common Stock 3,336 3,336
QuanTem Laboratories, Inc.*(A)
42,589 shares of Preferred Stock Jan. 1990 75,000 20,000
ML OKLAHOMA VENTURE PARTNERS, LIMITED PARTNERSHIP
SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED)
DECEMBER 31, 1993
Initial
Investment Fair
Company / Position Date Cost Value
Silverado Foods, Inc.*(A)(D)
267,144 shares of Preferred Stock June 1992 500,000 500,000
9% Senior Note 180,000 180,000
9% Convertible Subordinated Note 20,000 20,000
Warrant to purchase 10,000 shares of Common Stock
at $7 per share, expiring 1/19/98 0 0
Sports Tactics International, Inc.*(E)
10,000 shares of Preferred Stock Mar. 1992 100,000 1
Symex Corp.*(A)(F)
10% Promissory Notes Oct. 1989 146,000 1
TOTALS $6,063,931 $6,563,579
(A) Qualifies as an "Oklahoma business venture" under Oklahoma law.
(B) During the year, CytoDiagnostics, Inc. effected a five-for-one reverse
stock split. As a result, the Partnership exchanged its 2,249,576
preferred shares for 449,915 preferred shares of the company.
(C) On August 5, 1993, Eckerd Corporation completed its initial public
offering. In connection with the offering, the Partnership exchanged
its 11,916 common shares of EDS Holdings, Inc. for 15,491 common
shares of Eckerd Corporation.
(D) During the year, the Partnership converted promissory notes of
Silverado Foods, Inc. totaling $340,000 into 123,636 shares of
preferred stock of the company.
(E) At December 31, 1993, the Partnership realized a loss of $350,000 of
its $450,000 investment in Sports Tactics International, Inc.
(F) At September 30, 1993, the Partnership realized a loss of $692,899 of
its $839,000 investment in Symex Corp.
+ Public company
* These companies may be deemed affiliated persons of the Partnership as
defined in the Investment Company Act of 1940.
See notes to financial statements.
ML OKLAHOMA VENTURE PARTNERS, LIMITED PARTNERSHIP
SCHEDULE OF PORTFOLIO INVESTMENTS
DECEMBER 31, 1992
Initial
Investment Fair
Company / Position Date Cost Value
BACE Plastics Group, Inc.*
1,078 shares of Preferred Stock Feb. 1992 $539,000 $898,000
C.R. Anthony Company
116,363 shares of Common Stock Oct. 1992 231,705 231,705
CytoDiagnostics, Inc.*(A)
1,200,000 shares of Series A Preferred Stock May 1991 300,000 650,000
483,870 shares of Series B Preferred Stock 150,000 262,096
565,706 shares of Series C Preferred Stock 367,709 367,709
Diagnetics, Inc.*(A)
100,000 shares of Preferred Stock April 1991 500,000 500,000
10,006 shares of Common Stock 13,028 13,028
Warrant to purchase 25,000 shares of Common Stock
at $5 per share, expiring 4/11/95 1,000 1,000
Warrant to purchase 393,000 shares of Common Stock
at $0.01 per share, expiring 12/31/96 1,000 1,000
EDS Holdings Inc.
11,916 shares of Class A Common Stock July 1992 142,992 357,480
Envirogen, Inc.+
150,000 shares of Common Stock Sept. 1991 525,000 810,000
Great Outdoors Publishing, Inc.*(A)
275,000 shares of Series A Preferred Stock Aug. 1992 275,000 275,000
QuanTem Laboratories, Inc.*(A)
42,589 shares of Preferred Stock Jan. 1990 75,000 0
15% Promissory Note 5,000 0
Silverado Foods, Inc.*(A)
12% Senior Subordinated Note June 1992 240,000 240,000
143,508 shares of Series A Preferred Stock 160,000 160,000
Sports Tactics International, Inc.*
35,000 shares of Preferred Stock Mar. 1992 350,000 350,000
Symex Corp.*(A)
711,084 shares of Common Stock Oct. 1989 692,780 339,838
119,000 shares of non-voting Preferred Stock 119 119
Warrant to purchase 16,289 shares of Common Stock
at $0.66 per share, expiring 8/6/97 0 0
TOTALS $4,569,333 $5,456,975
(A)Qualifies as an "Oklahoma business venture" under Oklahoma law.
+ Public company
* May be deemed affiliated persons of the Partnership as defined in the
Investment Act of 1940.
See notes to financial statements.
ML OKLAHOMA VENTURE PARTNERS, LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31,
1993 1992 1991
INVESTMENT INCOME
Interest from money market investments $ 93,067 $ 201,368 $ 458,271
Interest and other income (loss) from
portfolio investments 125,616 84,856 (26,626)
Total investment income 218,683 286,224 431,645
Expenses:
Management fee - Note 4 204,256 215,104 215,940
Professional fees 78,123 71,406 73,973
Independent General Partners' fees - Note 6 57,230 55,364 57,863
Mailing and printing 21,311 17,602 11,093
Amortization of deferred organizational
costs - Note 2 9,544 9,544 9,544
Custodial fees 5,967 5,704 5,920
Miscellaneous 918 3,693 2,012
Interest expense - Note 4 - 17,804 -
Total expenses 377,349 396,221 376,345
NET INVESTMENT INCOME (LOSS) (158,666) (109,997) 55,300
REALIZED LOSS FROM INVESTMENTS
WRITTEN-OFF (1,042,899) - (62,500)
NET REALIZED LOSS FROM OPERATIONS
(allocable to Partners) - Note 3 (1,201,565) (109,997) (7,200)
NET CHANGE IN UNREALIZED APPRECIATION
OR DEPRECIATION (387,994) 1,167,277 (18,064)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ (1,589,559) $ 1,057,280 $ (25,264)
See notes to financial statements.
ML OKLAHOMA VENTURE PARTNERS, LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31,
1993 1992 1991
CASH FLOWS PROVIDED FROM (USED FOR)
OPERATING ACTIVITIES
Net investment income (loss) $ (158,666)$ (109,997) $ 55,300
Adjustments to reconcile net investment
income (loss) to cash provided from
(used for) operating activities:
Amortization of deferred organizational costs 9,544 9,544 9,544
Increase in payables 9,237 20,063 134
Decrease in accrued interest on
money market investments 4,796 31,612 46,130
(Increase) decrease in receivables and other
assets (20,671) 1,651 26,447
Total (155,760) (47,127) 137,555
Purchase of portfolio investments (2,542,497) (2,399,994) (1,653,750)
Net deposits released from (placed in)
escrow 70,295 469,960 (540,500)
Net return (purchase) of money market
investments 2,979,364 962,964 3,204,202
Proceeds from the redemption of short-
term notes 5,000 - 9,000
Cash provided from (used for) operating
activities 356,402 (1,014,197) 1,156,507
Cash and cash equivalents at beginning of
period 524,431 1,538,628 382,121
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 880,833 $ 524,431 $ 1,538,628
See notes to financial statements.
ML OKLAHOMA VENTURE PARTNERS, LIMITED PARTNERSHIP
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
FOR THE YEARS ENDED DECEMBER 31, 1991, 1992 AND 1993
Unallocated
Net Unrealized
Managing Individual Appreciation
General General Limited (Depreciation)
Partner Partners Partners of Investments Total
Balance at
December 31, 1990 $ 91,801 $ 3,547 $ 9,084,698 $ (261,571) $ 8,918,475
Allocation of net
investment income
- - Note 3 553 21 54,726 - 55,300
Allocation of realized
loss on investments
- - Note 3 (625) (24) (61,851) - (62,500)
Net change in unrealized
appreciation or depreciation
of investments - - - (18,064) (18,064)
Balance at
December 31, 1991 91,729 3,544 9,077,573(A) (279,635) 8,893,211
Allocation of net
investment loss
- - Note 3 (1,100) (42) (108,855) - (109,997)
Net change in unrealized
appreciation or depreciation
of investments - - - 1,167,277 1,167,277
Balance at
December 31, 1992 90,629 3,502 8,968,718(A) 887,642 9,950,491
Allocation of net
investment loss
- - Note 3 (1,587) (61) (157,018) - (158,666)
Allocation of realized
loss on investments
- - Note 3 (10,429) (403) (1,032,067) - (1,042,899)
Net change in unrealized
appreciation or depreciation
of investments - - - (387,994) (387,994)
Balance at
December 31, 1993 $ 78,613 $ 3,038$ 7,779,633(A) $ 499,648 $ 8,360,932
(A)The net asset value per unit of limited partnership interest, including
an assumed allocation of net unrealized appreciation or depreciation of
investments, was $859, $961 and $807 at December 31, 1991, 1992 and
1993, respectively.
See notes to financial statements.
ML OKLAHOMA VENTURE PARTNERS, LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
1. Organization and Purpose
ML Oklahoma Venture Partners, Limited Partnership (the "Partnership") was
formed on July 15, 1988 under the Revised Uniform Limited Partnership Act
of the State of Oklahoma. The Partnership's operations commenced on August
14, 1989. MLOK Co., Limited Partnership, the managing general partner of
the Partnership (the "Managing General Partner"), is an Oklahoma limited
partnership formed on July 15, 1988, the general partner of which is
Merrill Lynch Venture Capital Inc. (the "Management Company"), an indirect
subsidiary of Merrill Lynch & Co., Inc.
The Partnership's objective is to achieve long-term capital appreciation by
making venture capital investments in new or developing companies,
primarily Oklahoma companies, and other special investment situations. The
Partnership shall not engage in any other business or activity. The
Partnership will terminate on December 31, 1998, subject to the right of
the Individual General Partners to extend the term for up to two additional
two-year periods.
2. Significant Accounting Policies
Valuation of Investments - Money market investments are carried at
amortized cost which approximates market. Portfolio investments are
carried at fair value as determined quarterly by the Managing General
Partner under the supervision of the Individual General Partners. The
Managing General Partner determines the fair value of its portfolio
investments by applying consistent guidelines. The fair value of public
securities is adjusted to the average closing public market price for the
last five trading days of the quarter less an appropriate discount for
sales restrictions, the size of the Partnership's holdings and the public
market trading volume. Private securities are carried at cost until
significant developments affecting a portfolio investment provide a basis
for change in valuation. The fair value of private securities is adjusted
1) to reflect meaningful third-party transactions in the private market or
2) to reflect significant progress or slippage in the development of the
company's business such that cost is clearly no longer reflective of fair
value. As a venture capital investment fund, the Partnership's portfolio
investments involve a high degree of business and financial risk that can
result in substantial losses. The Managing General Partner considers such
risks in determining the fair value of the Partnership's portfolio
investments.
Investment Transactions - Investment transactions are recorded on the
accrual method. Portfolio investments are recorded on the trade date, the
date the Partnership obtains an enforceable right to demand the securities
or payment therefor. Realized gains and losses on investments sold are
computed on a specific identification basis.
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 $500,000 at December 31, 1993, which was recorded for financial
statement purposes, was not recognized for tax purposes. Additionally,
from inception to December 31, 1993, other timing differences relating to
realized losses totaling $350,000 have been recorded on the Partnership's
financial statements but have not yet been reflected as realized losses for
tax purposes.
Statements of Cash Flows - The Partnership considers its interest-bearing
cash account to be cash equivalents.
Organizational Costs - Organizational costs of $47,718 are being amortized
over a sixty-month period which commenced August 14, 1989.
3. Allocation of Partnership Profits and Losses
Pursuant to the Partnership Agreement, profits from venture capital
investments are allocated to all Partners in proportion to their capital
contributions until all Partners have been allocated a 10% Priority Return
from liquidated investments. Profits in excess of this amount are
allocated 30% to the Managing General Partner and 70% to all Partners in
proportion to their capital contributions until the Managing General
Partner has been allocated 20% of the total profits from venture capital
investments. Thereafter, profits from venture capital investments are
allocated 20% to the Managing General Partner and 80% to all Partners in
proportion to their capital contributions. Profits from other sources are
allocated to all Partners in proportion to their capital contributions.
Losses are allocated to all Partners in proportion to their capital
contributions. However, if profits had been previously allocated in the 70-
30 or 80-20 ratios as discussed above, then losses will be allocated in the
reverse order in which profits were allocated.
ML OKLAHOMA VENTURE PARTNERS, LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
4. Related Party Transactions
The Management Company performs, or arranges for others to perform, the
management and administrative services necessary for the operation of the
Partnership. The Management Company receives compensation at the annual
rate of 2.5% of the gross capital contributions to the Partnership, reduced
by selling commissions and organizational and offering expenses paid by the
Partnership, capital distributed and realized losses, with a minimum annual
fee of $200,000. Such fee is determined and paid quarterly.
On May 29, 1992, the SEC issued an exemptive order permitting the
Partnership to acquire 11,916 shares of class A common stock of EDS
Holdings Inc. from an affiliate of the Management Company subject to
certain conditions and approval by the Independent General Partners. On
July 22, 1992, the Partnership purchased these shares for $160,796,
representing original cost of $142,992 plus interest expense of $17,804.
5. Limitation on Operating Expenses
The Management Company has undertaken to the Partnership that it will
reduce its management fee or otherwise reimburse the Partnership in order
to limit the annual operating expenses of the Partnership, exclusive of the
management fee, to an amount equal to $203,720.
6. Independent General Partners' Fees
As compensation for services rendered to the Partnership, each of the three
Independent General Partners receives $12,000 annually in quarterly
installments, $1,000 for each meeting of the General Partners attended,
$1,000 for each committee meeting attended ($500 if a committee meeting is
held on the same day as a meeting of the General Partners) and $500 for
meetings held by telephone conference.
ML OKLAHOMA VENTURE PARTNERS, LIMITED PARTNERSHIP
MONEY MARKET INVESTMENTS
DECEMBER 31, 1993 AND 1992
SCHEDULE I
Principal Amortized
Amount Cost Cost
COMMERCIAL PAPER AT DECEMBER 31, 1993
Iowa Student Loan Liquidity Corp. $ 1,000,000 $ 996,840 $ 997,743
COMMERCIAL PAPER
N.N.W. Leasing $ 1,000,000 $ 996,979 $ 998,437
Golden Managers Acceptance Corporation1,500,000 1,492,760 1,494,872
Dunlop Tire Corporation 1,500,000 1,486,465 1,488,594
TOTAL AT DECEMBER 31, 1992 $ 4,000,000 $ 3,976,204 $ 3,981,903
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
None
PART III
Item 10. Directors and Executive Officers of the Registrant.
The Partnership
GENERAL PARTNERS
The five General Partners of the Partnership are responsible for the
management and administration of the Partnership. The General Partners
consist of the four Individual General Partners and the Managing General
Partner. As required by the Investment Company Act of 1940 (the
"Investment Company Act"), a majority of the General Partners must be
individuals who are not "interested persons" of the Partnership as defined
in the Investment Company Act. In 1989, the Securities and Exchange
Commission issued an order declaring that the independent general partners
of the Partnership (the "Independent General Partners") are not "interested
persons" of the Partnership as defined in the Investment Company Act solely
by reason of their being general partners of the Partnership. The Managing
General Partner and the four Individual General Partners will serve as the
General Partners until successors have been elected or until their earlier
resignation or removal.
The Individual General Partners have full authority over the management of
the Partnership and provide overall guidance and supervision with respect
to the operations of the Partnership and perform the various duties imposed
on the directors of business development companies by the Investment
Company Act. In addition to general fiduciary duties, the Individual
General Partners, among other things, supervise the management arrangements
of the Partnership and supervise the activities of the Managing General
Partner.
The Managing General Partner has exclusive power and authority to manage
and control the Partnership's venture capital investments subject to the
supervision of the Individual General Partners. Additionally, subject to
the supervision of the Individual General Partners, the Managing General
Partner is authorized to make all decisions regarding the Partnership's
venture capital investment portfolio including, among other things, find,
evaluate, structure, monitor and liquidate such investments and to provide,
or arrange for the provision of, managerial assistance to the portfolio
companies in which the Partnership invests.
Individual General Partners
William C. Liedtke, III (1)
P.O. Box 54369
Oklahoma City, OK 73154
Age 42
Individual General Partner since 1988
0 Units of the Partnership beneficially owned at March 18, 1994 (3)
Energy consultant since 1991; Assistant to the Governor of the State of
Oklahoma from 1989 to 1991; an independent natural gas marketing
consultant since 1984; an oil and gas marketing manager for Trigg
Drilling Company, Inc.; a member of the State Bar of Texas; a trustee of
the Casady School.
Richard P. Miller (1)
7500 N. Mockingbird Lane
Paradise Valley, AZ 85253
Age 66
Individual General Partner since 1988
0 Units of the Partnership beneficially owned at March 18, 1994 (3)
Since 1988 Director and Chief Financial Officer of Techlaw, Inc.; from 1983
to 1990, Executive Vice President of Private Sector Counsel; in 1983 and
1984, Vice President, Corporate Finance, Union Bank of California; from
1968 to 1983, founder and Chief Executive Officer of Systems Control
Inc.
Martin E. Fate, Jr. (1)
7014 East 60th Street
Tulsa, OK 74145-9214
Age 61
Individual General Partner since 1993
0 Units of the Partnership beneficially owned at March 18, 1994 (3)
President and Chief Executive Officer of Public Service Co. of Oklahoma
from 1982 to 1992; Director and Vice Chairman of First State Securities,
Inc.; a Trustee of the Phillips Graduate Seminary; a member of the
National Society of Professional Engineers.
Bruce W. Shewmaker (2)
12 Briarwood Drive
Short Hills, NJ 07078
Age 47
Individual General Partner since 1988
0 Units of the Partnership beneficially owned at March 18, 1994 (3)
Since 1990 President of New Century Management Inc., a venture capital
management and advisory firm; from 1981 to February 1990, Vice President
of Merrill Lynch Venture Capital Inc. and President and Director of
Merrill Lynch R&D Management Inc.; from 1978 to 1981, Investment
Director of Time Incorporated; from 1976 to 1977, management consultant
to Diebold Advisors Inc. and the portfolio manager for Diebold Venture
Capital Corp., a publicly held venture capital investment company; prior
to 1976, Vice President of Chase Manhattan Capital Corporation, a small
business investment company and a subsidiary of The Chase Manhattan
Bank, N.A.
(1) Member of Audit Committee.
(2) Interested person, as defined in the Investment Company Act, of the
Partnership.
(3) Each Individual General Partner has contributed $1,000 to the
capital of the Partnership. Mr. Shewmaker is a limited partner of the
Managing General Partner of the Partnership. The Managing General
Partner contributed $103,556 to the capital of the Partnership. Martin
E. Fate, Jr. succeeded to the interest of a prior Independent General
Partner who contributed $1,000 to the capital of the Partnership.
The Managing General Partner
MLOK Co., Limited Partnership (the "Managing General Partner") is a limited
partnership organized on July 15, 1988 under the laws of the State of
Oklahoma. The Managing General Partner maintains its principal office at
Meridian Tower, 5100 East Skelly Drive, Suite 1060, Tulsa, OK 74135. The
Managing General Partner has acted as the managing general partner of the
Partnership since the Partnership commenced operations on August 14, 1989.
The Managing General Partner is engaged in no other activities at the date
hereof. The Managing General Partner has contributed $103,556 to the
capital of the Partnership, equal to 1% of the aggregate capital
contributions of all Partners of the Partnership.
The general partner of the Managing General Partner is Merrill Lynch
Venture Capital Inc. (the "Management Company") and the limited partners of
the Managing General Partner include Joe D. Tippens and C. James Bode, Vice
Presidents of the Management Company. Information concerning the
Management Company and Messrs. Tippens and Bode is set forth below.
The Management Company
Merrill Lynch Venture Capital Inc. (the "Management Company") has served as
the management company for the Partnership since the Partnership commenced
operations. The Management Company performs, or arranges for others to
perform, the management and administrative services necessary for the
operation of the Partnership pursuant to a Management Agreement between the
Partnership and the Management Company.
The Management Company is an indirect subsidiary of Merrill Lynch & Co.,
Inc. The Management Company, which was incorporated under Delaware law on
January 25, 1982, maintains its principal office at North Tower, World
Financial Center, New York, New York 10281-1327. Listed below is
information concerning the directors and officers of the Management
Company. Unless otherwise noted, the address of each such person is in
North Tower, World Financial Center, New York, New York 10281.
Kevin K. Albert, Age 41, Director, President
Officer or Director since 1990
Managing Director of Merrill Lynch & Co. Investment Banking Division
("MLIBK") since 1988; Vice President of MLIBK from 1983 to 1988.
Robert F. Aufenanger, Age 40, Director and Executive Vice President
Officer or Director since 1990
Vice President of Merrill Lynch & Co. Corporate Strategy, Credit and
Research and Director of the Partnership Management Group since 1991;
Director of MLIBK from 1990 to 1991; Vice President of MLIBK from 1984
to 1990.
Robert W. Seitz, Age 47, Director, Vice President
Officer or Director since 1993
First Vice President of Merrill Lynch & Co. Corporate Strategy, Credit and
Research and a Managing Director within the Corporate Credit Division of
Merrill Lynch since 1987.
Joseph W. Sullivan, Age 36, Treasurer
Officer or Director since 1993
Assistant Vice President of MLIBK since 1993; Controller in the Partnership
Analysis and Management Department of MLIBK from 1990 to 1993; Assistant
Vice President of Standard & Poors Corporation from 1988 to 1990.
Joe D. Tippens, Age 36, Vice President
Meridian Tower
5100 East Skelly Drive, Suite 1060
Tulsa, OK 74135
Officer or Director since 1988
Associated with the Management Company since 1988 and Vice President since
1990; independent venture capital consultant to venture-backed portfolio
companies from 1985 to 1988.
C. James Bode, Age 37, Vice President
Meridian Tower
5100 East Skelly Drive, Suite 1060
Tulsa, OK 74135
Officer or Director since 1990
Senior Vice President/Chief Financial Officer of The OP Club, an office
products retailer, from 1989 to 1990; Senior Vice President of Boettcher
& Co., Inc. from 1983 to 1989.
The directors of the Management Company will serve as directors until the
next annual meeting of stockholders and until their successors are elected
and qualify. The officers of the Management Company will hold office until
the next annual meeting of the Board of Directors of the Management Company
and until their successors are elected and qualify.
There are no family relationships among any of the Individual General
Partners of the Partnership and the officers and directors of the
Management Company.
Item 11. Executive Compensation.
Compensation - The Partnership pays each Independent General Partner an
annual fee of $12,000 in quarterly installments, $1,000 per meeting of the
Individual General Partners attended and $500 for participating in each
special meeting of the Individual General Partners conducted by telephone
conference call and pays all non-interested Individual General Partners'
actual out-of-pocket expenses relating to attendance at meetings. The
Independent General Partners receive $1,000 for each meeting of the Audit
Committee attended unless such committee meeting is held on the same day as
a meeting of the Individual General Partners. In such case, the
Independent General Partners receive $500 for each meeting of the Audit
Committee attended. The aggregate fees and expenses paid by the
Partnership to the Independent General Partners for the years ended
December 31, 1993, 1992 and 1991, totaled $57,230, $55,364 and $57,863,
respectively.
Allocations and Distributions - The information with respect to the
allocation and distribution of the Partnership's profits and losses to the
Managing General Partner set forth under the caption "Partnership
Distributions and Allocations" on pages 35 - 37 of the Prospectus is
incorporated herein by reference.
For the year ended December 31, 1993, the Partnership had a net realized
loss from operations of $1,201,565. In accordance with the Partnership's
allocation procedure, the Managing General Partner was allocated $12,016 of
such loss. For the year ended December 31, 1992, the Partnership had a net
realized loss from operations of $109,997. In accordance with the
Partnership's allocation procedure, the Managing General Partner was
allocated $1,100 of such loss. For the year ended December 31, 1991, the
Partnership had a net realized loss from operations of $7,200. In
accordance with the Partnership's allocation procedure, the Managing
General Partner was allocated $72 of such loss. Since the inception of the
Partnership, there have been no cash distributions paid to Partners.
Management Fee - The Management Agreement provides that as compensation for
its services to the Partnership, the Management Company will receive a fee
at the annual rate of 2.5% of the amount of the partners' gross capital
contributions (net of selling commissions and organizational and offering
expenses paid by the Partnership), reduced by capital distributed and
realized capital losses, with a minimum annual fee of $200,000. Such fee
is determined and payable quarterly on the basis of the amount of the
partners' capital contributions at the end of the preceding calendar
quarter. For the years ended December 31, 1993, 1992 and 1991, the
management fee was $204,256, $215,104 and $215,940, respectively.
Limitation on Operating Expenses - The Management Company has undertaken to
the Partnership that it will reduce its management fee or otherwise
reimburse the Partnership in order to limit the annual operating expenses
of the Partnership, exclusive of the management fee, to an amount equal to
$203,720.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The information concerning the security ownership of the Individual General
Partners set forth in Item 10 under the subcaption "Individual General
Partners" is incorporated herein by reference. As of March 18, 1994, no
person or group is known by the Partnership to be the beneficial owner of
more than 5 percent of the Units.
The Partnership is not aware of any arrangement which may, at a subsequent
date, result in a change of control of the Partnership.
Item 13. Certain Relationships and Related Transactions.
Kevin K. Albert, a Director and President of the Management Company and a
Managing Director of Merrill Lynch Investment Banking Group ("ML Investment
Banking"), joined Merrill Lynch in 1981. Robert F. Aufenanger, a Director
and Executive Vice President of the Management Company, a Vice President of
Merrill Lynch & Co. Corporate Strategy, Credit and Research and a Director
of the Partnership Management Department, joined Merrill Lynch in 1980.
Robert W. Seitz, a Director and Vice President of the Management Company, a
First Vice President of Merrill Lynch & Co. Corporate Strategy, Credit and
Research and a Managing Director within the Corporate Credit Division of
Merrill Lynch, joined Merrill Lynch in 1981. Joseph W. Sullivan, a
Treasurer of the Management Company and a Controller in the Partnership
Analysis and Management Department, joined Merrill Lynch in 1990. From
1988 to 1990, Mr. Sullivan was an Assistant Vice President with Standard &
Poor's Debt Rating Group.
Item 14. Exhibits, Financial Statements, Schedules and Reports on Form 8-
K.
(a) 1. Financial Statements
Independent Auditors' Report
Balance Sheets as of December 31, 1993 and 1992
Schedule of Portfolio Investments as of December 31, 1993
Schedule of Portfolio Investments as of December 31, 1992
Statements of Operations for the years ended December 31,
1993, 1992 and 1991
Statements of Cash Flows for the years ended December 31,
1993, 1992 and 1991
Statements of Changes in Partners' Capital for the years
ended December 31, 1991, 1992 and 1993
Notes to Financial Statements
2. Schedule I - Money Market Investments as of December 31,
1993 and 1992
3. (a) Exhibits
(3) (a) Amended and Restated Certificate of Limited
Partnership of the Partnership dated as of November
29, 1988.*
(b) Amended and Restated Agreement of Limited
Partnership of the Partnership dated as of November
29, 1988.*
(c) Amended and Restated Agreement of Limited
Partnership of the Partnership dated as of August
14, 1989.**
(10) Management Agreement dated as of November 29, 1988
between the Partnership and the Management
Company.*
(13) (a) Page 14 of the Quarterly Report on Form 10-Q
for the quarter ended March 31, 1993.
(13) (b) Page 14 of the Quarterly Report on Form 10-Q
for the quarter ended June 30, 1993.
(13) (c) Page 14 of the Quarterly Report on Form 10-Q
for the quarter ended September 30, 1993.
(28) (a) Prospectus of the Partnership dated December
1, 1988 filed with the Securities and Exchange
Commission pursuant to Rule 497 (b) under the
Securities Act of 1933, as supplemented by a
supplement dated April 25, 1989 filed pursuant to
Rule 497 (d) under the Securities Act of 1933.***
(b) No reports on Form 8-K have been filed during the
quarter for which this report is filed.
* Incorporated by reference to the Partnership's Annual Report on Form 10-
K for the fiscal year ended December 31, 1988 filed with the Securities
and Exchange Commission on April 3, 1989.
** Incorporated by reference to the Partnership's Quarterly Report on Form
10-Q for the quarter ended September 30, 1989 filed with the Securities
and Exchange Commission on November 14, 1989.
***Incorporated by reference to the Partnership's Quarterly Report on Form
10-Q for the quarter ended March 31, 1989 filed with the Securities and
Exchange Commission on May 15, 1989.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 on the 25th day of
March, 1994.
ML OKLAHOMA VENTURE PARTNERS, LIMITED PARTNERSHIP
By: MLOK Co. Limited Partnership
its Managing General Partner
By: Merrill Lynch Venture Capital Inc.
its General Partner
By: /s/ Kevin K. Albert
Kevin K. Albert
President
(Principal Executive Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated on the 25th day of March 1994.
By: MLOK Co., Limited Partnership
its Managing General Partner
By: Merrill Lynch Venture Capital Inc.
its General Partner
By: /s/ Kevin K. Albert
Kevin K. Albert
President
(Principal Executive Officer)
By: /s/ Joseph W. Sullivan
Joseph W. Sullivan
Treasurer
(Principal Financial and Accounting Officer)
By: /s/ William C. Liedtke, III
William C. Liedtke, III
General Partner
ML Oklahoma Venture Partners, Limited Partnership
By: /s/ Richard P. Miller
Richard P. Miller
General Partner
ML Oklahoma Venture Partners, Limited Partnership
By: /s/ Martin E. Fate, Jr.
Martin E. Fate, Jr.
General Partner
ML Oklahoma Venture Partners, Limited Partnership
By: /s/ Bruce W. Shewmaker
Bruce W. Shewmaker
General Partner
ML Oklahoma Venture Partners, Limited Partnership
Exhibit Index
Exhibits Page
(3) (a) Amended and Restated Certificate of Limited
Partnership of the Partnership dated as of
November 29, 1988.*
(b) Amended and Restated Agreement of Limited
Partnership of the Partnership dated as of
November 29, 1988.**
(c) Amended and Restated Agreement of Limited
Partnership of the Partnership dated as of
August 14, 1989.**
(10) Management Agreement dated as of November
29, 1988 between the Partnership and the
Management Company.*
(13) (a) Page 14 of the Quarterly Report on Form 10-
Q for the quarter ended March 31, 1993.
(13) (b) Page 14 of the Quarterly Report on Form 10-
Q for the quarter ended June 30, 1993.
(13) (c) Page 14 of the Quarterly Report on Form 10-
Q for the quarter ended September 30, 1993.
(28) (a) Prospectus of the Partnership dated
December 1, 1988 filed with the Securities and
Exchange Commission pursuant to Rule 497 (b)
under the Securities Act of 1933, as
supplemented by a supplement dated April 25,
1989 filed pursuant to Rule 497 (d) under the
Securities Act of 1933.***
* Incorporated by reference to the Partnership's Annual Report on Form
10-K for the fiscal year ended December 31, 1988 filed with the
Securities and Exchange Commission on April 3, 1989.
** Incorporated by reference to the Partnership's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1989 filed with the
Securities and Exchange Commission on November 14, 1989.
*** Incorporated by reference to the Partnership's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1989 filed with the
Securities and Exchange Commission on May 15, 1989.
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.
On January 20, 1993, the Partnership purchased a $100,000 12%
promissory note and warrants to purchase 10,000 shares of common
stock of Silverado Foods, Inc. for $100,000. This investment is in
addition to the $240,000 promissory note and 143,508 shares of
preferred stock previously owned by the Partnership.
On February 24, 1993, the Partnership purchased 10,000 shares of
preferred stock of Sports Tactics International, Inc. for $100,000.
This investment is in addition to the 35,000 shares of preferred
stock previously owned by the Partnership.
During the quarter, the Partnership purchased 10% promissory notes
aggregating $71,000 in face value and warrants to purchase 16,384
shares of common stock of Symex Corp. for $71,000. This investment
is in addition to the 711,084 shares of common stock, 16,289 common
stock warrants and 119,000 shares of non-voting preferred stock
previously owned by the Partnership.
During the quarter, the Partnership purchased 158,954 common shares
and warrants to purchase 52,745 shares of common stock of C.R.
Anthony Company for $370,661. This is in addition to the 116,363
shares of common stock previously owned by the Partnership.
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.
On April 27, 1993, the Partnership purchased 75,000 preferred
shares of Data Critical Corp. for $150,000. The company, located
in Oklahoma City, Oklahoma, is a developer of wireless transmission
products.
On May 17, 1993, the Partnership purchased 9% promissory notes of
Silverado Foods, Inc. aggregating $200,000 in face value. This
investment is in addition to the $340,000 in promissory notes,
143,508 preferred shares and 10,000 common stock warrants
previously owned by the Partnership.
During the quarter, the Partnership purchased 10% promissory notes
aggregating $36,500 in face value and 10,961 common stock warrants
of Symex Corp. for $36,500. This investment is in addition to the
711,084 common shares, 119,000 non-voting preferred shares, $71,000
of promissory notes and warrants to purchase 30,135 common shares
previously owned by the Partnership.
On June 16, 1993, the Partnership purchased 400 preferred shares
and 3,336 common shares of Independent Gas Company Holdings, Inc.
for $403,336. The company, located in Ft. Worth, Texas, was formed
to acquire other small propane dealers.
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.
On August 16, 1993, the Partnership purchased 35,000 preferred
shares of Enerpro International, Inc. for $350,000. The
company, located in Houston, Texas, is a manufacturer of premium
threaded connectors and cementing products for the oil and gas
industry.
During the quarter, the Partnership purchased 10% promissory
notes of Symex Corp. aggregating $35,000. At September 30,
1993, the Partnership wrote-off $692,899 of its $835,399 equity
interest in the company.
