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 September 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 September 30, 1997 (Unaudited) and December 31, 1996
Schedule of Portfolio Investments as of September 30, 1997 (Unaudited)
Statements of Operations for the Three and Nine Months Ended September 30, 1997
and 1996 (Unaudited)
Statements of Cash Flows for the Nine Months Ended September 30, 1997 and 1996
(Unaudited)
Statement of Changes in Partners' Capital for the Nine Months Ended September
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>
September 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>
September 30, 1997 and $5,477,160 as of December 31, 1996) $ 7,547,710 $ 10,496,844
Short-term investments at amortized cost 1,496,562 498,737
Cash and cash equivalents 464,684 380,685
Receivable from securities sold - 50,528
--------------- ----------------
TOTAL ASSETS $ 9,508,956 $ 11,426,794
=============== ================
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Cash distribution payable $ 1,294,445 $ 517,576
Accounts payable 43,129 84,160
Due to Management Company 83,791 90,365
Due to Independent General Partners 15,000 15,500
--------------- ----------------
Total liabilities 1,436,365 707,601
--------------- ----------------
Partners' Capital:
Managing General Partner 45,882 57,186
Individual General Partners 1,776 2,213
Limited Partners (10,248 Units) 4,540,582 5,640,110
Unallocated net unrealized appreciation of investments 3,484,351 5,019,684
--------------- ----------------
Total partners' capital 8,072,591 10,719,193
--------------- ----------------
TOTAL LIABILITIES AND PARTNERS' CAPITAL $ 9,508,956 $ 11,426,794
=============== ================
</TABLE>
See notes to financial statements.
<PAGE>
ML OKLAHOMA VENTURE PARTNERS, LIMITED PARTNERSHIP
SCHEDULE OF PORTFOLIO INVESTMENTS (UNAUDITED)
September 30, 1997
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
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)(C)
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 413,000 383,500
- -------------------------------------------------------------------------------------------------------------------------------
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 529,900 694,655
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 3,911,001
Warrant to purchase 12,539 shares of Common Stock
at $4.30 per share, expiring 10/18/98 0 44,827
- -------------------------------------------------------------------------------------------------------------------------------
ZymeTx, Inc.(B) (D)
304,579 shares of Common Stock July 1994 1,411 480,000
- -------------------------------------------------------------------------------------------------------------------------------
Total from Active Portfolio Investments $ 4,063,359 $ 7,547,710
===================================
</TABLE>
Supplemental Information: Liquidated Portfolio Investments(E)
<TABLE>
Cost Realized Gain Return
<S> <C> <C> <C>
Totals from Liquidated Portfolio Investments $ 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 $ 4,502,402 $ 13,771,538
=========================================================
</TABLE>
ML OKLAHOMA VENTURE PARTNERS, LIMITED PARTNERSHIP
SCHEDULE OF PORTFOLIO INVESTMENTS (UNAUDITED), continued
September 30, 1997
(A) Public company
(B) Qualifies as an "Oklahoma business venture" under Oklahoma law.
(C) On October 6, 1997, the Partnership exercised its warrant to purchase
875,000 shares of Data Critical Corp. common stock at $.40 per share for a
total investment of $350,000.
(D) ZymeTx, Inc. effected a 4 for 1 reverse split of its outstanding stock on
July 31, 1997. As a result, the Partnership's 1,218,315 shares of common
stock were exchanged for 304,579 shares. Additionally, subsequent to the
end of the quarter, on October 29, 1997, the company completed its initial
public offering at $8.00 per share, which compares to the September 30,
1997 fair value of $1.58 per share.
(E) Amounts provided for "Supplemental Information: Liquidated Portfolio
Investments" are cumulative from inception through September 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 Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
------------- ------------ -------------- ---------
INVESTMENT INCOME AND EXPENSES
Income:
<S> <C> <C> <C> <C>
Interest from short-term investments $ 20,985 $ 11,737 $ 53,496 $ 24,594
Interest and other income from portfolio investments - - - 8,782
-------------- ------------ ------------- ---------------
Totals 20,985 11,737 53,496 33,376
-------------- ------------ ------------- ---------------
Expenses:
Management fee 50,000 50,000 150,000 150,000
Professional fees 12,339 15,350 29,538 60,848
Independent General Partners' fees 15,329 14,569 45,947 44,385
Mailing and printing 1,651 1,790 10,864 13,504
Custodial fees (3,245) 1,470 (1,788) 4,335
Miscellaneous 2,114 - 2,407 408
-------------- ------------ ------------- ---------------
Totals 78,188 83,179 236,968 273,480
-------------- ------------ ------------- ---------------
NET INVESTMENT LOSS (57,203) (71,442) (183,472) (240,104)
Net realized gain from portfolio investments - 3,949 884,626 370,161
-------------- ------------ ------------- ---------------
NET REALIZED (LOSS) GAIN FROM
OPERATIONS (allocable to Partners) (57,203) (67,493) 701,154 130,057
Net change in unrealized appreciation of investments (216,456) 547,989 (1,535,333) 2,809,103
-------------- ------------ ------------- ---------------
NET (DECREASE) INCREASE IN NET
ASSETS RESULTING FROM OPERATIONS $ (273,659) $ 480,496 $ (834,179) $ 2,939,160
============== ============ ============= ===============
</TABLE>
See notes to financial statements.
<PAGE>
ML OKLAHOMA VENTURE PARTNERS, LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Nine Months Ended September 30,
<TABLE>
1997 1996
-------------- --------
CASH FLOWS USED FOR OPERATING ACTIVITIES
<S> <C> <C>
Net investment loss $ (183,472) $ (240,104)
Adjustments to reconcile net investment loss to cash used for
operating activities:
Increase (decrease) in operating payables, net (48,105) 22,684
Increase in accrued interest on short-term investments (8,703) (719)
Increase in receivables - (7,585)
-------------- -------------
Cash used for operating activities (240,280) (225,724)
-------------- -------------
CASH FLOWS PROVIDED FROM INVESTING ACTIVITIES
Cost of portfolio investments purchased - (50,000)
Proceeds from the sale of portfolio investments 2,348,955 781,733
Net purchase of short-term investments (989,122) (497,948)
-------------- -------------
Cash provided from investing activities 1,359,833 233,785
-------------- -------------
CASH FLOWS USED FOR FINANCING ACTIVITIES
Cash distributions to Partners (1,035,554) -
-------------- -------------
Increase in cash and cash equivalents 83,999 8,061
Cash and cash equivalents at beginning of period 380,685 261,310
-------------- -------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 464,684 $ 269,371
============== =============
</TABLE>
See notes to financial statements.
<PAGE>
ML OKLAHOMA VENTURE PARTNERS, LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' CAPITAL (UNAUDITED)
For the Nine Months Ended September 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, paid 7/1/97 (5,370) (208) (512,400) - (517,978)
Cash distribution, accrued (12,945) (500) (1,281,000) - (1,294,445)
Net investment loss (1,835) (71) (181,566) - (183,472)
Net realized gain 8,846 342 875,438 - 884,626
Net change in unrealized
appreciation of investments - - - (1,535,333) (1,535,333)
---------- -------- ------------- ------------- ---------------
Balance at end of period $ 45,882 $ 1,776 $ 4,540,582(A) $ 3,484,351 $ 8,072,591
========== ======== ============= ============= ===============
</TABLE>
(A) The net asset value per unit of limited partnership interest, including an
assumed allocation of net unrealized appreciation of investments, was $780
as of September 30, 1997. Cumulative cash distributions paid or accrued to
Limited Partners as of September 30, 1997, totaled $475 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 $3.5 million as of September 30, 1997, which was recorded for
financial statement purposes, has not been recognized for tax purposes.
Additionally, from inception to September 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 September 30, 1997, the Partnership's portfolio investments were
categorized as follows:
<TABLE>
% of
Type of Investments Cost Fair Value Net Assets*
- ------------------- ---------------- --------------- -----------
<S> <C> <C> <C>
Common Stock $ 1,871,452 $ 5,867,319 72%
Preferred Stock 1,827,907 1,680,391 21%
Debt Securities 364,000 0 0%
---------------- --------------- -------
$ 4,063,359 $ 7,547,710 93%
================ =============== =======
Country/Geographic Region
Oklahoma $ 2,819,023 $ 6,696,874 83%
Non-Oklahoma 1,244,336 850,836 10%
---------------- --------------- -------
$ 4,063,359 $ 7,547,710 93%
================ =============== =======
Industry
Publishing $ 364,000 $ 0 0%
Food Manufacturing & Distribution 529,900 694,655 8%
Energy/Natural Gas 1,133,743 533,727 7%
Data Communications 700,000 1,500,000 18%
Environmental Technology 413,000 383,500 5%
Healthcare/Biotechnology 922,716 4,435,828 55%
---------------- --------------- -------
$ 4,063,359 $ 7,547,710 93%
================ =============== =======
</TABLE>
* Represents fair value as a percentage of net assets.
8. Subsequent Event - Cash Distribution
On October 22, 1997, the Partnership made a cash distribution to Partners
totaling $1,294,445. Limited Partners of record on September 30, 1997 received
$1,281,000, or $125 per Unit, and the General Partners received $13,445.
9. Interim Financial Statements
In the opinion of MLOK Co., Limited Partnership, the managing general partner of
the Partnership, the unaudited financial statements as of September 30, 1997,
and for the three and nine month periods 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
As of September 30, 1997, the Partnership held $1,961,200 in cash and short-term
investments comprised of $1,496,500 in short-term investments with maturities of
less than one year and $464,700 in an interest-bearing cash account. For the
three and nine months ended September 30, 1997, the Partnership earned interest
income from such investments totaling $21,000 and $53,500, 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 Partnership's cash balance at September 30, 1997 has been reduced by the
$1,294,445 cash distribution paid to Partners in October 1997. Limited partners
of record on September 30, 1997 received $1,281,000, or $125 per Unit, and the
General Partners received $13,445.
The Partnership will not purchase any new portfolio investments, however, it may
make additional follow-on investments in existing portfolio companies. In
general, after an adequate reserve for future operating expenses and follow-on
investments in existing companies is determined, the Partnership will distribute
to Partners the remaining proceeds received from the sale of its portfolio
investments as soon as practicable after receipt. 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 received and
proceeds from the sale of portfolio investments.
Results of Operations
For the three and nine months ended September 30, 1997, the Partnership had a
net realized loss from operations of $57,200 and a net realized gain from
operations of $701,200, respectively. For the three and nine months ended
September 30, 1996, the Partnership had a net realized loss from operations of
$67,500 and a net realized gain from operations of $130,100, 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 other income less operating expenses).
Realized Gains and Losses from Portfolio Investments - The Partnership had no
gains or losses from portfolio investments for the three months ended September
30, 1997, however, for the nine months ended September 30, 1997, the Partnership
had a realized gain from portfolio investments of $884,600. During the first six
months of 1997, the Partnership sold its entire position of 275,317 common
shares of C.R. Anthony Company in the public market for $2,184,300, realizing a
gain of $1,584,100. In June 1997, the Partnership sold its investment in
Diagnetics, Inc. for $92,300, realizing a loss of $721,300. Additionally, during
the period, 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"), as
discussed below.
For the three and nine months ended September 30, 1996, the Partnership had a
realized gain from portfolio investments of $3,900 and $370,200, respectively.
In September 1996, the Partnership sold 32,000 shares of Envirogen, Inc. in the
public market for $115,900, realizing a gain of $3,900. In May 1996, Enerpro
International, Inc. merged with EVI. In connection with the merger, the
Partnership received 24,500 shares of EVI common stock for its Enerpro holdings.
The Partnership sold such shares in the public market in May 1996 for $737,900.
Additionally, pursuant to the merger agreement, $72,200 of such proceeds were
held in escrow and released in May 1997, as discussed above. The Partnership
recorded a reserve of $21,700 relating to such contingencies and recognized a
$366,200 realized gain in connection with the merger during the three months
ended June 30, 1996. As discussed above, the full proceeds were released to the
Partnership in May 1997 and resulted in the recognition of and additional
realized gain of $21,700 in 1997.
Investment Income and Expenses - For the three months ended September 30, 1997
and 1996, the Partnership had a net investment loss of $57,200 and $71,400,
respectively. The decrease in net investment loss for the 1997 period compared
to the 1996 period primarily resulted from a $9,200 increase in interest from
short-term investments and a $5,000 decrease in operating expenses. The increase
in interest from short-term investments resulted from an increase in funds
available for investments in short-term securities during the 1997 period
compared to the same period in 1996. The increase in amounts invested in
short-term securities during the 1997 period resulted from proceeds received
from portfolio sales during the 1997 period. 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. Custodial fees
also declined primarily due to the reversal of excess accruals made in prior
periods.
For the nine months ended September 30, 1997 and 1996, the Partnership had a net
investment loss of $183,500 and $240,100, respectively. The decrease in net
investment loss resulted from a $20,100 increase in investment income, and a
$36,500 decline in operating expenses for the 1997 period compared to the same
period in 1996. The increase in investment income included a $28,900 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 an $8,800 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. The larger
professional fee expenses in 1996 includes certain adjustments for audit and tax
accruals relating to outside accounting fees.
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 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 fee of $200,000 annually. Such fee is determined and paid quarterly.
The management fee for the three months ended September 30, 1997 and 1996 was
$50,000 for each period and the management fee for the nine months ended
September 30, 1997 and 1996 was $150,000 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. Funds needed to cover future
operations will be obtained from the Partnership's existing cash reserves,
interest and other investment income received and proceeds from the sale of
portfolio investments.
Unrealized Gains and Losses and Changes in Unrealized Appreciation of Portfolio
Investments - During the nine months ended September 30, 1997, the Partnership
recorded a $1,259,500 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 $1,535,300 for the nine month period.
During the nine months ended September 30, 1996, the Partnership recorded a
$3,003,100 net unrealized gain from its portfolio investments, primarily due to
an upward revaluation of its investment in UroCor, Inc., resulting from the
company's initial public offering, completed in May 1996. Offsetting the
unrealized gain for the period was the transfer of $194,000 from unrealized gain
to realized gain resulting from the sale of the Partnership's Enerpro and
Envirogen securities, as discussed above. As a result, net unrealized
appreciation of investments increased $2,809,100 for the nine month period.
Net Assets - Changes to net assets resulting from operations are comprised of
(1) net realized gain or loss from operations and (2) changes to net unrealized
appreciation or depreciation of portfolio investments.
The Partnership had an $834,200 net decrease in net assets from operations for
the nine months ended September 30, 1997, comprised of the $701,100 net realized
gain from operations which was more than offset by the $1,535,300 decrease in
net unrealized appreciation of investments for the nine month period. As of
September 30, 1997, the Partnership's net assets were $8,072,600, representing a
decrease of $2,646,600 from $10,719,200 at December 31, 1996. The $2,646,600
decrease is the result of the $834,200 net decrease in net assets from
operations and the $1,812,400 cash distributions paid or accrued during the nine
month period.
For the nine months ended September 30, 1996, the Partnership had a $2,939,200
net increase in net assets resulting from operations, comprised of the $130,100
net realized gain from operations and the $2,809,100 increase in net unrealized
appreciation of investments for the nine month period. As a result, the
Partnership's net assets increased to $12,132,700 at September 30, 1996 from
$9,193,500 on December 31, 1995.
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 September 30, 1997 and December 31, 1996 was $780
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: November 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 SEPTEMBER 30, 1997 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-1-1997
<PERIOD-END> SEP-30-1997
<INVESTMENTS-AT-COST> 4,063,359
<INVESTMENTS-AT-VALUE> 7,547,710
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 1,961,246
<TOTAL-ASSETS> 9,508,956
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,436,365
<TOTAL-LIABILITIES> 1,436,365
<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> 3,484,351
<NET-ASSETS> 8,072,591
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 53,496
<OTHER-INCOME> 0
<EXPENSES-NET> 236,968
<NET-INVESTMENT-INCOME> (183,472)
<REALIZED-GAINS-CURRENT> 884,626
<APPREC-INCREASE-CURRENT> (1,535,333)
<NET-CHANGE-FROM-OPS> (834,179)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 1,812,423
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (2,646,602)
<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> 9,395,892
<PER-SHARE-NAV-BEGIN> 1,035
<PER-SHARE-NII> (17)
<PER-SHARE-GAIN-APPREC> (63)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (175)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 780
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
