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 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 Identification No.)
incorporation or organization)
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
Not applicable
===============================================================================
Former name, former address and former fiscal year, if changed since last report
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
<PAGE>
ML OKLAHOMA VENTURE PARTNERS, LIMITED PARTNERSHIP
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Balance Sheets as of June 30, 1997 (Unaudited) and December 31, 1996
Schedule of Portfolio Investments as of June 30, 1997 (Unaudited)
Statements of Operations for the Three and Six Months Ended June 30, 1997 and
1996 (Unaudited)
Statements of Cash Flows for the Six Months Ended June 30, 1997 and 1996
(Unaudited)
Statement of Changes in Partners' Capital for the Six Months Ended June 30, 1997
(Unaudited)
Notes to Financial Statements (Unaudited)
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
Item 2. Changes in Securities.
Item 3. Defaults upon Senior Securities.
Item 4. Submission of Matters to a Vote of Security Holders.
Item 5. Other Information.
Item 6. Exhibits and Reports on Form 8-K.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
ML OKLAHOMA VENTURE PARTNERS, LIMITED PARTNERSHIP
BALANCE SHEETS
<TABLE>
June 30, 1997 December 31,
(Unaudited) 1996
ASSETS
Portfolio investments at fair value (cost $4,063,359 as of
<S> <C> <C> <C> <C> <C> <C> <C>
June 30, 1997 and $5,477,160 as of December 31, 1996) $ 7,764,166 $ 10,496,844
Short-term investments at amortized cost 249,415 498,737
Cash and cash equivalents 139,795 380,685
Receivable from securities sold 1,626,692 50,528
--------------- ----------------
TOTAL ASSETS $ 9,780,068 $ 11,426,794
=============== ================
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Cash distribution payable $ - $ 517,576
Accounts payable 57,822 84,160
Due to Management Company 66,343 90,365
Due to Independent General Partners 15,208 15,500
--------------- ----------------
Total liabilities 139,373 707,601
--------------- ----------------
Partners' Capital:
Managing General Partner 59,399 57,186
Individual General Partners 2,297 2,213
Limited Partners (10,248 Units) 5,878,192 5,640,110
Unallocated net unrealized appreciation of investments 3,700,807 5,019,684
--------------- ----------------
Total partners' capital 9,640,695 10,719,193
--------------- ----------------
TOTAL LIABILITIES AND PARTNERS' CAPITAL $ 9,780,068 $ 11,426,794
=============== ================
</TABLE>
See notes to financial statements.
<PAGE>
ML OKLAHOMA VENTURE PARTNERS, LIMITED PARTNERSHIP
SCHEDULE OF PORTFOLIO INVESTMENTS (UNAUDITED)
June 30, 1997
<TABLE>
Initial Investment
Company / Position Date Cost Fair Value
Americo Publishing, Inc.
<C> <C> <C> <C>
8%-10% Demand Promissory Notes Feb. 1994 $ 364,000 $ 0
- -------------------------------------------------------------------------------------------------------------------------------
Data Critical Corp.*(B)
762,500 shares of Preferred Stock April 1993 700,000 1,150,000
Warrant to purchase 875,000 shares of Common Stock
at $.40 per share, expiring 10/6/97 0 350,000
- -------------------------------------------------------------------------------------------------------------------------------
Envirogen, Inc.(A)
118,000 shares of Common Stock Sept. 1991 413,000 346,625
- -------------------------------------------------------------------------------------------------------------------------------
Excel Energy Technologies, Ltd.*(B)
3,492 shares of Preferred Stock Oct. 1993 663,907 66,391
17 shares of Common Stock 2,500 0
- -------------------------------------------------------------------------------------------------------------------------------
Independent Gas Company Holdings, Inc.
464 shares of Preferred Stock June 1993 464,000 464,000
5,192 shares of Common Stock 3,336 3,336
- -------------------------------------------------------------------------------------------------------------------------------
Silverado Foods, Inc.*(A)(B)
705,681 shares of Common Stock June 1992 529,900 661,576
Warrant to purchase 12,121 shares of Common Stock
at $8.25 per share, expiring 6/2/99 0 0
- -------------------------------------------------------------------------------------------------------------------------------
UroCor, Inc. *(A)(B)
496,635 shares of Common Stock May 1991 921,305 4,190,358
Warrant to purchase 12,539 shares of Common Stock
at $4.30 per share, expiring 10/18/98 0 51,880
- -------------------------------------------------------------------------------------------------------------------------------
ZymeTx, Inc.(B)
1,218,315 shares of Common Stock July 1994 1,411 480,000
- -------------------------------------------------------------------------------------------------------------------------------
Total from Active Portfolio Investments $ 4,063,359 $ 7,764,166
===================================
Supplemental Information: Liquidated Portfolio Investments(D)
Cost Realized Gain Return
Totals from Liquidated Portfolio Investments(C) $ 5,205,777 $ 1,018,051 $ 6,223,828
=========================================================
Combined Net Combined
Unrealized and Fair Value
Cost Realized Gain and Return
Totals from Active & Liquidated Portfolio Investments $ 9,269,136 $ 4,718,858 $ 13,987,994
=========================================================
</TABLE>
ML OKLAHOMA VENTURE PARTNERS, LIMITED PARTNERSHIP
SCHEDULE OF PORTFOLIO INVESTMENTS (UNAUDITED), continued
June 30, 1997
(A) Public company
(B) Qualifies as an "Oklahoma business venture" under Oklahoma law.
(C) During the quarter, the Partnership sold its remaining investment of
185,317 shares of C.R. Anthony Company for $1,534,382, realizing a gain of
$1,110,982. Additionally, in June 1997, the Partnership sold its investment
in Diagnetics, Inc. for $92,310, realizing a loss of $721,300.
(D) Amounts provided for "Supplemental Information: Liquidated Portfolio
Investments" are cumulative from inception through June 30, 1997.
* May be deemed an affiliated person of the Partnership as defined in the
Investment Company Act of 1940.
See notes to financial statements.
<PAGE>
ML OKLAHOMA VENTURE PARTNERS, LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
------------- -------------- -------------- --------
INVESTMENT INCOME AND EXPENSES
Income:
<S> <C> <C> <C> <C>
Interest from short-term investments $ 19,222 $ 6,800 $ 32,511 $ 12,857
Interest and other income from portfolio
investments - 629 - 8,782
------------- -------------- ------------- ---------------
Totals 19,222 7,429 32,511 21,639
------------- -------------- ------------- ---------------
Expenses:
Management fee 50,000 50,000 100,000 100,000
Professional fees 9,149 25,424 17,199 45,498
Independent General Partners' fees 15,390 14,363 30,618 29,816
Mailing and printing 5,584 6,894 9,213 11,714
Custodial fees - 1,340 1,457 2,865
Miscellaneous 43 14 293 408
------------- -------------- ------------- ---------------
Totals 80,166 98,035 158,780 190,301
------------- -------------- ------------- ---------------
NET INVESTMENT LOSS (60,944) (90,606) (126,269) (168,662)
Net realized gain from portfolio investments 411,337 366,212 884,626 366,212
------------- -------------- ------------- ---------------
NET REALIZED GAIN FROM
OPERATIONS (allocable to Partners) 350,393 275,606 758,357 197,550
Net change in unrealized appreciation of
investments (458,587) 2,091,777 (1,318,877) 2,261,114
------------- -------------- ------------- ---------------
NET (DECREASE) INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ (108,194) $ 2,367,383 $ (560,520) $ 2,458,664
============= ============== ============= ===============
</TABLE>
See notes to financial statements.
<PAGE>
ML OKLAHOMA VENTURE PARTNERS, LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Six Months Ended June 30,
<TABLE>
1997 1996
------------- --------
CASH FLOWS USED FOR OPERATING ACTIVITIES
<S> <C> <C>
Net investment loss $ (126,269) $ (168,662)
Adjustments to reconcile net investment loss to cash
used for operating activities:
(Decrease) increase in payables, net (50,652) 505
Decrease (increase) in accrued interest on short-term investments 2,973 (2,312)
(Increase) in other receivables - (7,551)
------------- -------------
Cash used for operating activities (173,948) (178,020)
------------- -------------
CASH FLOWS PROVIDED FROM INVESTING ACTIVITIES
Cost of portfolio investments purchased - (50,000)
Proceeds from the sale of portfolio investments 722,263 665,784
Net return (purchase) of short-term investments 246,349 (548,125)
------------- -------------
Cash provided from investing activities 968,612 67,659
------------- -------------
CASH FLOWS USED FOR FINANCING ACTIVITIES
Cash distributions to Partners (1,035,554) -
------------- -------------
Decrease in cash and cash equivalents (240,890) (110,361)
Cash and cash equivalents at beginning of period 380,685 261,310
------------- -------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 139,795 $ 150,949
============= =============
</TABLE>
See notes to financial statements.
<PAGE>
ML OKLAHOMA VENTURE PARTNERS, LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' CAPITAL (UNAUDITED)
For the Six Months Ended June 30, 1997
<TABLE>
Unallocated
Managing Individual Net Unrealized
General General Limited Appreciation
Partner Partners Partners of Investments Total
<S> <C> <C> <C> <C> <C>
Balance at beginning of period $ 57,186 $ 2,213 $ 5,640,110 $ 5,019,684 $ 10,719,193
Cash distribution (5,370) (208) (512,400) - (517,978)
Net investment loss (1,263) (49) (124,957) - (126,269)
Net realized gain 8,846 341 875,439 - 884,626
Net change in unrealized
appreciation of investments - - - (1,318,877) (1,318,877)
---------- -------- ------------- ------------- ---------------
Balance at end of period $ 59,399 $ 2,297 $ 5,878,192(A) $ 3,700,807 $ 9,640,695
========== ======== ============= ============= ===============
</TABLE>
(A) The net asset value per unit of limited partnership interest, including an
assumed allocation of net unrealized appreciation of investments, was $931
as of June 30, 1997. Cumulative cash distributions to Limited Partners, as
of June 30, 1997, totaled $350 per Unit.
See notes to financial statements.
<PAGE>
ML OKLAHOMA VENTURE PARTNERS, LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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
does 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 - Short-term investments are carried at amortized cost
which approximates market. Portfolio investments are carried at fair value as
determined quarterly by the Managing General Partner under the supervision of
the Individual General Partners. The 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 closing public market price
for the last trading day of the accounting period 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 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.
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Investment Transactions - Investment transactions are recorded on the accrual
method. Portfolio investments are recorded on the trade date, the date the
Partnership obtains an enforceable right to demand the securities or payment
therefor. Realized gains and losses on investments sold are computed on a
specific identification basis.
<PAGE>
ML OKLAHOMA VENTURE PARTNERS, LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (UNAUDITED), continued
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
approximately $3.7 million as of June 30, 1997, which was recorded for financial
statement purposes, has not been recognized for tax purposes. Additionally, from
inception to June 30, 1997, other timing differences totaling $1.0 million
relating to the original sales commissions paid and other costs of selling the
Units have been recorded on the Partnership's financial statements but have not
yet been deducted for tax purposes.
Statements of Cash Flows - The Partnership considers its interest-bearing cash
account to be cash equivalents.
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.
4. Related Party Transactions
The Management Company is responsible for the management and administrative
services necessary for the operation of the Partnership. The Management Company
receives a management fee at an annual rate of 2.5% of the gross capital
contributions to the Partnership, reduced by selling commissions 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.
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.
<PAGE>
ML OKLAHOMA VENTURE PARTNERS, LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (UNAUDITED), continued
6. Independent General Partners' Fees
As compensation for services rendered to the Partnership, each of the three
Independent General Partners receives $16,000 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.
7. Portfolio Investments
As of June 30, 1997, the Partnership's investments were categorized as follows:
<TABLE>
% of
Type of Investments Cost Fair Value Net Assets*
- ------------------- ---------------- --------------- -----------
<S> <C> <C> <C>
Common Stock $ 1,871,452 $ 6,083,775 62%
Preferred Stock 1,827,907 1,680,391 17%
Debt Securities 364,000 0 0%
---------------- --------------- -------
$ 4,063,359 $ 7,764,166 79%
================ =============== =======
Country/Geographic Region
Oklahoma $ 2,819,023 $ 6,950,205 71%
Non-Oklahoma 1,244,336 813,961 8%
---------------- --------------- -------
$ 4,063,359 $ 7,764,166 79%
================ =============== =======
Industry
Publishing $ 364,000 $ 0 0%
Food Manufacturing & Distribution 529,900 661,576 7%
Energy/Natural Gas 1,133,743 533,727 5%
Data Communications 700,000 1,500,000 15%
Environmental Technology 413,000 346,625 4%
Healthcare/Biotechnology 922,716 4,722,238 48%
---------------- --------------- -------
$ 4,063,359 $ 7,764,166 79%
================ =============== =======
</TABLE>
* Percentage of net assets is based on fair value.
8. Cash Distribution
On July 1, 1997, the Partnership made a cash distribution to Partners totaling
$517,978. Limited Partners of record on June 30, 1997 received $512,400, or $50
per Unit, and the General Partners received $5,578.
<PAGE>
ML OKLAHOMA VENTURE PARTNERS, LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (UNAUDITED), continued
9. Subsequent Event - Cash Distribution
In August 1997, the General Partners approved a cash distribution to Partners
totaling $1,294,445. Limited Partners of record on September 30, 1997 will
receive $1,281,000, or $125 per Unit, and the General Partners will receive
$13,445. The distribution will be paid in October 1997.
10. Interim Financial Statements
In the opinion of MLOK Co., Limited Partnership, the managing general partner of
the Partnership, the unaudited financial statements as of June 30, 1997, and for
the three and six month period then ended, reflect all adjustments necessary for
the fair presentation of the results of the interim periods.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Liquidity and Capital Resources
At June 30, 1997, the Partnership held cash and cash equivalents totaling
$389,200, consisting of $249,400 in short-term investments with maturities of
less than one year and $139,800 in an interest-bearing cash account. For the
three and six months ended June 30, 1997, the Partnership earned $19,200 and
$32,500 of interest income from such investments, respectively. Interest earned
from such investments in future periods is subject to fluctuations in short-term
interest rates and amounts available for investment in short-term securities.
The June 30, 1997 cash balance has been reduced by the $517,978 cash
distribution paid to Partners on July 1, 1997. Limited Partners of record on
June 30, 1997 received $512,400, or $50 per Unit, and the General Partners
received $5,578.
In June 1997 the Partnership sold its remaining 185,317 shares of C.R. Anthony
Company for $1.5 million, realizing a gain of $1.1 million. Also in June 1997,
the Partnership sold its investment in Diagnetics, Inc. for $92,300, realizing a
loss of $721,300. Proceeds from the sale of these investments, totaling $1.6
million, were received by the Partnership in July 1997.
In August 1997, the General Partners approved a cash distribution to Partners
totaling $1,294,445. Limited Partners of record on September 30, 1997 will
receive $1,281,000, or $125 per Unit, and the General Partners will receive
$13,445. The distribution will be paid in October 1997.
The Partnership will not purchase any new portfolio investments and, in general,
will distribute to Partners all proceeds received from the sale of its existing
portfolio investments as soon as practicable after receipt and after an adequate
reserve for future operating expenses and follow-on investments in existing
companies. Funds needed to cover future operating expenses and follow-on
investments is expected to be obtained from existing cash reserves, interest and
other investment income and proceeds from the sale of portfolio investments.
Results of Operations
For the three and six months ended June 30, 1997, the Partnership had a net
realized gain from operations of $350,400 and $758,400, respectively. For the
three and six months ended June 30, 1996, the Partnership had a net realized
gain from operations of $275,600 and $197,600, respectively. Net realized gain
or loss from operations is comprised of (1) net realized gain or loss from
portfolio investments and (2) net investment income or loss (interest and
dividend income less operating expenses).
Realized Gains and Losses from Portfolio Investments - For the three and six
months ended June 30, 1997, the Partnership had a net realized gain from
portfolio investments of $411,300 and $884,600, respectively. During the three
months ended June 30, 1997, the Partnership sold its remaining 185,317 shares of
C.R. Anthony Company for $1,534,400, realizing a gain of $1,111,000 and sold its
investment in Diagnetics, Inc. for $92,300, realizing a loss of $721,300.
Additionally during the quarter, the Partnership realized a gain of $21,700 from
the receipt of $72,200, representing the final escrow release in connection with
the 1996 acquisition of Enerpro International, Inc. by Energy Ventures, Inc.
("EVI"). During the three months ended March 31, 1997, the Partnership sold
90,000 shares of C.R. Anthony for $649,900, realizing a gain of $473,100.
For the three and six months ended June 30, 1996, the Partnership had a $366,200
realized gain from portfolio investments. In May 1996, EVI completed its
acquisition of Enerpro International. In connection therewith, the Partnership
received 24,500 shares of EVI common stock for its Enerpro holdings. The
Partnership sold such shares in the public market during May 1996 for $737,900,
of which $72,200 was placed in escrow and subsequently released in June 1997, as
discussed above. The Partnership had recorded a reserve of $21,700 against the
escrow holdings, which was recognized as a realized gain upon receipt in June
1997. The Partnership recorded a $366,200 realized gain in May 1996 in
connection with this transaction.
Investment Income and Expenses - For the three months ended June 30, 1997 and
1996, the Partnership had a net investment loss of $60,900 and $90,600,
respectively. The decrease in net investment loss for the 1997 period compared
to the 1996 period primarily resulted from a $12,400 increase in interest from
short-term investments and a $17,900 decrease in operating expenses. The
increase in interest from short-term investments primarily resulted from an
increase in funds available for investments in short-term securities during the
1997 period compared to the same period in 1996. Proceeds received from
portfolio sales during the 1997 period were invested in short-term securities.
Generally, proceeds from the sale of portfolio investments are invested in
short-term securities until such funds are distributed to Partners or used for
follow-on investments or operating expenses. The decrease in operating expenses
for the 1997 period compared to the 1996 period primarily resulted from reduced
professional fees recorded during the 1997 period. The larger professional fee
expense in 1996 includes certain adjustments for audit and tax accruals relating
to outside accounting fees.
For the six months ended June 30, 1997 and 1996, the Partnership had a net
investment loss of $126,300 and $168,700, respectively. The decrease in net
investment loss for the six months ended June 30, 1997 primarily resulted from a
$10,900 increase in investment income and a $31,500 decline in operating
expenses. The increase in investment income included a $20,000 increase in
interest earned from short-term investments resulting from an increase in funds
available for investment in such securities during the 1997 period. Partially
offsetting this increase was a decrease in interest and other income from
portfolio investments primarily resulting from a reduced amount of interest
income accrued on demand notes due from Americo Publishing, Inc., which were
fully reserved for in September 1996. The reduction in operating expenses was
primarily due to a decrease in professional fees for the 1997 period, as
described above.
The Management Company is responsible for the management and administrative
services necessary for the operation of the Partnership. Pursuant to the
Management Agreement, the Management Company receives a management fee of
$200,000 annually. Therefore, the management fee for the three months ended June
30, 1997 and 1996 was $50,000 for each period and the management fee for the six
months ended June 30, 1997 and 1996 was $100,000 for each period. To the extent
possible the management fee and other expenses incurred directly by the
Partnership are paid with funds provided from operations, which are primarily
derived from interest earned from short-term investments, interest and other
income from portfolio investments and proceeds received from the sale of
portfolio investments.
Unrealized Gains and Losses and Changes in Unrealized Appreciation of
Investments - For the six months ended June 30, 1997, the Partnership had a $1.0
million net unrealized loss, resulting from the net downward revaluation of
certain portfolio investments. Additionally, $275,800 was transferred from
unrealized gain to realized gain relating to the sale of C.R. Anthony and
Diagnetics, as discussed above. As a result, net unrealized appreciation of
investments decreased $1.3 million for the six month period.
For the six months ended June 30, 1996, the Partnership had a $2.5 million net
unrealized gain from its portfolio investments, primarily resulting from an
upward revaluation of the Partnership's investment in UroCor, Inc., resulting
from UroCor's initial public offering completed in May 1996. Offsetting the
unrealized gain for the period was the transfer of $200,000 from unrealized gain
to realized gain resulting from the sale of Enerpro, as discussed above. As a
result, net unrealized appreciation of investments increased by $2.3 million for
the six month period.
Net Assets - Changes to net assets resulting from operations are comprised of
(1) net realized gains and losses and (2) changes to net unrealized appreciation
or depreciation of portfolio investments.
For the six months ended June 30, 1997, the Partnership had a $560,500 decrease
in net assets resulting from operations, comprised of the $758,400 realized gain
from operations offset by the $1.3 million decrease in unrealized appreciation
for the six month period. At June 30, 1997, the Partnership's net assets were
$9.6 million, reflecting a decrease of $1.1 million from $10.7 million at
December 31, 1996. The $1.1 million decrease reflects the $560,500 net decrease
in net assets from operations and the $518,000 cash distribution paid to
Partners on July 1, 1997.
At June 30, 1996, the Partnership's net assets were $11.7 million, reflecting an
increase of $2.5 million from $9.2 million at December 31, 1995. The $2.5
million increase represents the increase in net assets resulting from operations
for the six month period and is comprised of the $197,600 net realized gain from
operations and the $2.3 million increase in unrealized appreciation of
investments for the six month period.
Gains or losses from 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 June 30, 1997 and December 31, 1996 was $941 and
$1,035, respectively.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
The Partnership is not a party to any material pending legal proceedings.
Item 2. Changes in Securities.
Not applicable.
Item 3. Defaults Upon Senior Securities.
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted to a vote of security holders during the period covered
by this report.
Item 5. Other Information.
None.
<PAGE>
Item 6. Exhibits and Reports on Form 8-K.
(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.*
(27) Financial Data Schedule.
(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 June 30, 1989 filed with the Securities and
Exchange Commission on May 15, 1989.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ML 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)
By: /s/ Diane T. Herte
Diane T. Herte
Vice President and Treasurer
(Principal Financial and Accounting Officer)
Date: August 14, 1997
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ML
OKLAHOMA VENTURE PARTNERS, LIMITED PARTNERSHIP'S QUARTERLY REPORT ON FORM
10-Q FOR THE PERIOD ENDED JUNE 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-1-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 4,063,359
<INVESTMENTS-AT-VALUE> 7,764,166
<RECEIVABLES> 1,626,692
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 389,210
<TOTAL-ASSETS> 9,780,068
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 139,373
<TOTAL-LIABILITIES> 139,373
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 10,248
<SHARES-COMMON-PRIOR> 10,248
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3,700,807
<NET-ASSETS> 9,640,695
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 32,511
<OTHER-INCOME> 0
<EXPENSES-NET> 158,780
<NET-INVESTMENT-INCOME> (126,269)
<REALIZED-GAINS-CURRENT> 758,357
<APPREC-INCREASE-CURRENT> (1,318,877)
<NET-CHANGE-FROM-OPS> (560,520)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (517,978)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 1,078,498
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 10,179,944
<PER-SHARE-NAV-BEGIN> 1,035
<PER-SHARE-NII> (12)
<PER-SHARE-GAIN-APPREC> (42)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (50)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 931
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
