<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from N/A to N/A
--- ---
Commission File No. 814-82
TECHNOLOGY FUNDING VENTURE PARTNERS V, AN AGGRESSIVE GROWTH FUND, L.P.
----------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 94-3094910
- ------------------------------- ----------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2000 Alameda de las Pulgas, Suite 250
San Mateo, California 94403
- --------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(415) 345-2200
----------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No
--- ---
No active market for the units of limited partnership interests
("Units") exists, and therefore the market value of such Units cannot be
determined.
<PAGE>
I. FINANCIAL INFORMATION
Item 1. Financial Statements
BALANCE SHEETS
- --------------
<TABLE>
<CAPTION>
(unaudited)
June 30, December 31,
1997 1996
---------- -----------
<S> <C> <C>
ASSETS
Investments:
Equity investments (cost basis
of $21,486,487 and $21,000,400 at
1997 and 1996, respectively) $31,492,782 26,701,934
Secured notes receivable, net 42,048 29,142
Other investments (cost basis
$664,299 for both 1997 and 1996) 664,299 664,299
---------- ----------
Total investments 32,199,129 27,395,375
Cash and cash equivalents 1,242,719 1,617,085
Other assets 5,371 65,019
---------- ----------
Total $33,447,219 29,077,479
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable and accrued expenses $ 22,922 37,117
Due to related parties 38,514 59,246
---------- ----------
Total liabilities 61,436 96,363
Commitments and contingencies
(Notes 3 and 7)
Partners' capital:
Limited Partners
(Units outstanding of
400,000 in both 1997 and 1996) 23,379,440 23,337,188
General Partners 48 (57,606)
Net unrealized fair value increase
from cost of equity investments 10,006,295 5,701,534
---------- ----------
Total partners' capital 33,385,783 28,981,116
---------- ----------
Total $33,447,219 29,077,479
========== ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
STATEMENTS OF OPERATIONS (unaudited)
- -----------------------------------
<TABLE>
<CAPTION>
For the Three For the Six
Months Ended Months Ended
June 30, June 30,
------------------------ ----------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Income:
Secured notes receivable interest $ 12,485 25,590 25,727 60,602
Short-term investment interest 9,769 16,914 18,916 59,708
Dividend income -- -- 280,010 --
--------- --------- --------- ---------
Total income 22,254 42,504 324,653 120,310
Costs and expenses:
Management fees 97,499 97,499 194,998 194,998
Individual General Partners'
compensation 13,111 12,936 18,594 17,549
Operating expenses:
Investment operations 92,575 174,831 156,780 319,546
Administrative and investor services 87,385 128,063 195,251 231,129
Professional fees 37,704 28,091 51,709 40,219
Computer services 23,291 59,600 52,518 81,775
Expenses absorbed by General Partners -- (115,443) -- (115,443)
Expenses previously absorbed by
General Partners -- 853,838 -- 853,838
--------- --------- --------- ---------
Total operating expenses 240,955 1,128,980 456,258 1,411,064
--------- --------- --------- ---------
Total costs and expenses 351,565 1,239,415 669,850 1,623,611
--------- --------- --------- ---------
Net operating loss (329,311) (1,196,911) (345,197) (1,503,301)
Net realized gain from
sales of equity investments 187,529 902,118 426,055 902,118
Realized losses from
investment write-downs -- (2,357,282) -- (2,434,373)
Net realized gain from venture capital
limited partnership investments 19,048 -- 19,048 --
--------- --------- --------- ---------
Net realized (loss) income (122,734) (2,652,075) 99,906 (3,035,556)
Change in net unrealized
fair value:
Equity investments 2,739,852 (1,305,160) 4,304,761 649,325
Secured notes receivable -- 755,000 -- 678,000
--------- --------- --------- ---------
Net income (loss) $ 2,617,118 (3,202,235) 4,404,667 (1,708,231)
========= ========= ========= =========
Net realized loss per Unit $ -- (7) -- (8)
========= ========= ========= =========
</TABLE>
See accompanying notes to financial statements
<PAGE>
STATEMENTS OF CASH FLOWS (unaudited)
- -----------------------------------
<TABLE>
<CAPTION>
For the Six Months Ended June 30,
---------------------------------
1997 1996
---- ----
<S> <C> <C>
Cash flows from operating activities:
Interest received $ 313,613 90,294
Cash paid to vendors (169,123) (128,322)
Cash paid to related parties (536,217) (504,488)
---------- ----------
Net cash used by
operating activities (391,727) (542,516)
---------- ----------
Cash flows from investing activities:
Secured notes receivable issued (33,902) (208,334)
Purchase of equity investments (560,215) (3,460,818)
Proceeds from sales of
equity investments 531,123 1,017,678
Repayments of convertible and
secured notes receivable 57,222 500,939
Distributions from venture capital
limited partnership investments 23,133 --
---------- ----------
Net cash provided (used) by
investing activities 17,361 (2,150,535)
---------- ----------
Net decrease in cash and
cash equivalents (374,366) (2,693,051)
Cash and cash equivalents at
beginning of year 1,617,085 4,396,042
---------- ----------
Cash and cash equivalents at June 30 $ 1,242,719 1,702,991
========== ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
STATEMENTS OF CASH FLOWS (unaudited) (continued)
- -----------------------------------------------
<TABLE>
<CAPTION>
For the Six Months Ended June 30,
---------------------------------
1997 1996
---- ----
<S> <C> <C>
Reconciliation of net income (loss) to net
cash used by operating activities:
Net income (loss) $ 4,404,667 (1,708,231)
Adjustments to reconcile net income
(loss) to net cash used by operating
activities:
Realized gains from sales of
equity investments (426,055) (902,118)
Realized losses from investment
write-downs -- 2,434,373
Net realized gain from venture capital
limited partnership investments (19,048) --
Change in net unrealized fair value:
Equity investments (4,304,761) (649,325)
Secured notes receivable -- (678,000)
Changes in:
Due to related parties (20,732) 991,757
Other changes, net (25,798) (30,972)
--------- ---------
Net cash used by operating activities $ (391,727) (542,516)
========= =========
Non-cash investing activities:
Reclassification of secured notes to
equity investments (subordinated
notes receivable) $ -- 1,275,000
========= =========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (unaudited)
- ----------------------------------------
1. General
-------
In the opinion of the Managing General Partners, the Balance Sheets as of
June 30, 1997, and December 31, 1996, and the related Statements of
Operations for the three and six months ended June 30, 1997 and 1996, and
Statements of Cash Flows for the six months ended June 30, 1997 and 1996,
reflect all adjustments which are necessary for a fair presentation of the
financial position, results of operations and cash flows for such periods.
These statements should be read in conjunction with the Annual Report on
Form 10-K for the year ended December 31, 1996. The following notes to
financial statements for activity through June 30, 1997, supplement those
included in the Annual Report on Form 10-K. Allocation of income and loss
to Limited and General Partners is based on cumulative income and loss.
Adjustments, if any, are reflected in the current quarter balances.
Certain 1996 balances have been reclassified to conform with the 1997
financial statement presentation.
2. Financing of Partnership Operations
-----------------------------------
The Managing General Partners expect cash received from the future
liquidation of Partnership investments and the collection of notes
receivable will provide the necessary liquidity to service Partnership debt
and fund Partnership operations. The Partnership may be dependent upon the
financial support of the Managing General Partners to fund operations if
future proceeds are not received timely. The Managing General Partners
have committed to support the Partnership's working capital requirements
through short-term advances as necessary.
3. Related Party Transactions
--------------------------
Related party costs are included in costs and expenses shown on the
Statements of Operations. Related party costs for the six months ended
June 30, 1997 and 1996, were as follows:
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Management fees $194,998 194,998
Reimbursable operating expenses 301,893 545,303
Individual General Partners' compensation 18,594 17,549
Expenses absorbed by General Partners -- (115,443)
Expenses previously absorbed by General
Partners -- 853,838
</TABLE>
Certain reimbursable expenses have been accrued based upon interim
estimates prepared by the Managing General Partners and are adjusted to
actual cost periodically. There were $6,014 and $26,746 due to related
parties at June 30, 1997, and December 31, 1996, respectively, for such
reimbursable expenses.
Amounts payable for management fees were $32,500 at both June 30, 1997, and
December 31, 1996.
Pursuant to the Partnership Agreement, the Partnership shall reimburse the
Managing General Partners for operational costs incurred by the Managing
General Partners in conjunction with the business of the Partnership. The
Partnership may not pay or reimburse the Managing General Partners for
operational costs that aggregate more than 1% of total Limited Partner
capital contributions. During 1996, it was determined that operational
costs paid directly by the Partnership are not subject to this limitation;
consequently, $853,838 was payable to related parties. For the six months
ended June 30, 1996, operating expenses incurred by the Managing General
Partners exceeded the limitation by $115,443, resulting in this amount
being absorbed by the Managing General Partners.
4. Equity Investments
------------------
A full listing of the Partnership's equity investments at December 31,
1996, is in the 1996 Annual Report. Activity from January 1 through June
30, 1997, consisted of:
<TABLE>
<CAPTION>
January 1 -
June 30, 1997
Principal ------------------
Investment Amount or Cost Fair
Industry/Company Position Date Shares Basis Value
- ---------------- -------- ---------- --------- ----- -----
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1997 $21,000,400 26,701,934
---------- ----------
Significant changes:
Biomedical
- ----------
Redcell, Inc. Series B
Preferred
shares 12/94 797,872 0 (750,000)
Biotechnology
- -------------
CV Therapeutics, Common
Inc. shares 11/96 68,900 0 174,834
Communications
- --------------
NetChannel, Inc. Series B
Preferred
share warrant
at $1.10;
expiring
10/99 10/96 22,727 (250) (250)
NetChannel, Inc. Series B
Preferred 10/96 -
shares 05/97 183,458 39,317 72,132
NetChannel, Inc. Convertible
note (1) 05/97 $11,279 11,412 11,412
UT Starcom, Inc. Common
share
warrant
at $.6875;
expiring
05/99 03/95 145,456 0 200,730
UT Starcom, Inc. Series A
Preferred
shares 03/95 187,500 0 258,750
Computer Systems and Software
- -----------------------------
Ascent Logic Common share
Corporation warrant at
$.94;
exercised
03/97 03/92 31,915 (2,500) 0
Ascent Logic Series C
Corporation Preferred
shares 10/92 425,532 0 107,532
Ascent Logic Common
Corporation shares 03/97 36,443 23,795 23,795
Industrial/Business Automation
- ------------------------------
Avalon Imaging, Inc. Convertible
notes (1) 03/97 $153,223 156,887 156,887
Bolder Common
Technologies shares
Corporation 05/96 24,000 (60,249) (633,381)
Portable Convertible
Energy note (1)
Products, Inc. 03/97 $ 98,398 100,563 100,563
Information Technology
- ----------------------
WorldRes, Inc. Series B
Preferred
shares 01/97 7,396 24,998 24,998
Medical
- -------
ADESSO Specialty Series A
Services Organization, Preferred
Inc. shares 07/95 400,000 0 1,180,000
ADESSO Specialty Series B
Services Organization, Preferred
Inc. shares 03/96 369,231 0 1,089,231
ADESSO Specialty Series A Preferred
Services Organization, share warrant at
Inc. $1.00; expiring
03/01 03/96 68,704 0 202,677
Biex, Inc. Series D
Preferred
shares 03/97 44,446 66,669 66,669
Endocare, Inc. Convertible
note (1) 08/96 $ 18,750 (19,817) (19,817)
Endocare, Inc. Common
shares 01/97 1,750 6,125 6,388
Endocare, Inc. Common
shares 01/97 8,300 20,750 28,832
Pharmadigm, Series A
Inc. Preferred
shares 04/93 322,581 0 241,936
Pharmadigm, Series A
Inc. Preferred
shares 12/94 215,054 0 161,291
Pharmadigm, Series B
Inc. Preferred
shares 05/96 137,778 0 103,334
Pharmadigm, Series C
Inc. Preferred
shares 06/97 13,746 37,423 37,423
Pharmadigm, Series C
Inc. Preferred
share warrant
at $2.75;
expiring
06/00 06/97 962 378 378
Physiometrix, Common
Inc. shares 04/96 287,021 0 (288,774)
Microelectronics
- ----------------
Tessera, Inc. Common
share
warrant
at $.73
exercised
04/97 04/92 72,754 (3,500) (82,940)
Tessera, Inc. Series B
Preferred
shares 05/92 666,666 0 2,086,665
Tessera, Inc. Common
shares 04/97 72,754 56,500 72,754
Retail/Consumer Products
- ------------------------
Yes! Entertainment Common
Corporation shares 06/95 55,555 0 (65,986)
Venture Capital Limited Partnership Investments
- -----------------------------------------------
Various Ltd.
Partnership
interests various $1,167,717 36,219 235,676
---------- ----------
Total significant changes during the six
months ended June 30, 1997 494,720 4,803,739
Other changes, net (8,633) (12,891)
---------- ----------
Total equity investments at June 30, 1997 $21,486,487 31,492,782
========== ==========
(1) Convertible notes include accrued interest. The interest rate on notes issued in 1997
was 8%.
</TABLE>
Marketable Equity Securities
- ----------------------------
At June 30, 1997, and December 31, 1996, marketable equity securities
had aggregate costs of $4,354,295 and $4,423,550, respectively, and
aggregate market values of $2,824,290 and $3,644,937, respectively. The
net unrealized losses at June 30, 1997, and December 31, 1996, included
gross gains of $532,236 and $1,428,442, respectively.
Ascent Logic Corporation
- ------------------------
In March of 1997, the Partnership exercised its common share warrant
without cash and received 36,443 shares of common stock and realized a
gain upon exercise of $21,295. The Partnership also recorded a $107,532
increase in fair value of its preferred share investment based upon the
valuation of the common share warrant exercised.
ADESSO Specialty Services Organization, Inc.
- --------------------------------------------
During the first quarter of 1997, the company closed a Series C
Preferred share round of financing in which the Partnership did not
participate. The pricing of this round indicated a fair value increase
of $2,471,908 for the Partnership's existing investment.
Avalon Imaging, Inc.
- --------------------
In March of 1997, the Partnership issued $153,223 in convertible notes
receivable to the company and received warrants to purchase Series C
Preferred shares.
Biex, Inc.
- ----------
In March of 1997, the Partnership made an additional investment in the
company by purchasing 44,446 Series D Preferred shares for $66,669.
Bolder Technologies Corporation
- -------------------------------
During the first half of 1997, the Partnership sold 33,499 common shares
of the company for total proceeds of $463,149 and realized a gain of
$402,900. At June 30, 1997, the Partnership recorded a decrease in the
change in fair value of $573,132 to reflect the publicly-traded market
price of its investments. The decrease included a decrease of $499,620
due to the sale mentioned above.
Endocare, Inc.
- --------------
In January of 1997, the Partnership made an additional investment in the
company by purchasing 1,750 common shares for $6,125. In addition, the
Partnership converted its $18,750 note receivable, including accrued
interest of $2,000, into 8,300 common shares at a total cost of $20,750.
At June 30, 1997, the Partnership recorded an increase in the change in
fair value of $8,975 to reflect the publicly-traded market price of its
investments above; a portion of the fair value of the Partnership's
investment was adjusted to reflect a discount for restricted securities.
NetChannel, Inc.
- ----------------
In January of 1997, the Partnership cash exercised its Series B
Preferred share warrant for $25,000 and received 22,727 Series B
Preferred shares. In March of 1997, the Partnership issued a $25,000
convertible note receivable to the company. The Partnership also
received an additional 27,272 Series B Preferred shares as a result of a
downward adjustment to the warrant exercise price.
In May of 1997, the company effected a 1-to-2.083 stock split. As a
result, the Partnership received an additional 78,762 Series B Preferred
shares. The Partnership also purchased 191,817 Series B Preferred
shares by converting $13,721 of the notes receivable discussed above
including accrued interest of $345 for a total cost of $14,066. The
remaining note principal of $11,279 was reissued as a new note. At June
30, 1997, the Partnership recorded an increase in the change in fair
value of $32,815 for the above transactions.
Pharmadigm, Inc.
- ----------------
In June of 1997, the Partnership made an additional investment in the
company by purchasing 13,746 Series C Preferred shares and received a
warrant to purchase 962 Series C Preferred shares for $37,801. The
pricing of this round, in which third parties participated, indicated a
fair value increase of $517,249 for the Partnership's existing
investment.
Portable Energy Products, Inc.
- ------------------------------
In March of 1997, the Partnership issued a $98,398 convertible note
receivable to the company and received a warrant to purchase 98,398
common shares.
Redcell, Inc.
- -------------
During the second quarter of 1997, the company had a new round of
financing in which the Partnership did not participate. The pricing of
this round indicated a decrease in fair value of $750,000 for the
Partnership's existing investment at June 30, 1997.
Tessera, Inc.
- -------------
In April of 1997, the Partnership exercised its warrant for common
shares and purchased 72,754 common shares of the company for $53,000.
In addition, the company completed a new round of financing in which the
Partnership did not participate. The pricing of this round indicated an
increase in the change in fair value of $2,023,479 for the Partnership's
existing investment.
UT Starcom, Inc.
- ----------------
During the first quarter of 1997, the company closed a Series C
Preferred share round of financing in which the Partnership did not
participate. The pricing of this round indicated a fair value increase
of $459,480 for the Partnership's existing investment.
WorldRes, Inc.
- --------------
In January of 1997, the Partnership invested in the company by
purchasing 7,396 Series B Preferred shares for $24,998.
Venture Capital Limited Partnership Investments
- -----------------------------------------------
The Partnership recorded a cost basis increase of $36,219 in venture
capital limited partnership investments during the six months ended June
30, 1997. The increase was a result of additional contributions of
$70,000, partially offset by a return of capital in the form of cash and
stock distributions of $23,133 and $10,648, respectively. The
Partnership recorded a fair value increase of $235,676 as a result of a
net increase in fair value of the underlying investments, partially
offset by stock distributions from one venture capital limited
partnership investment.
During the first half of 1997, the Partnership received common stock
distributions of Informix Software, Inc., with fair values totaling
$29,696 (of which $10,648 represented a distribution from returns of
capital). These distributions were from profits and were recorded as
realized gains from venture capital limited partnership investments.
Other Equity Investments
- ------------------------
Other significant changes reflected above relate to market value
fluctuations or the elimination of a discount relating to selling
restrictions for publicly-traded portfolio companies.
Included in the June 30, 1997, and December 31, 1996, equity investment
fair values was a $1,000,000 reserve for unrealized loss from a
contingent liability. See Note 7 to the financial statements for
additional disclosure.
5. Secured Notes Receivable, Net
-----------------------------
Activity from January 1, 1997, through June 30, 1997, consisted of:
<TABLE>
<S> <C>
Balance at January 1, 1997 $ 29,142
1997 activity:
Secured notes receivable issued 33,902
Repayments of secured notes receivable (10,157)
Change in interest receivable (10,839)
---------
Total secured notes receivable, net, at June 30, 1997 $ 42,048
=========
</TABLE>
The Partnership had accrued interest of $4,332 and $15,171 at June 30,
1997, and December 31, 1996, respectively.
6. Cash and Cash Equivalents
-------------------------
Cash and cash equivalents at June 30, 1997, and December 31, 1996,
consisted of:
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Demand accounts $ 3,495 2,764
Money-market accounts 1,239,224 1,614,321
---------- ----------
Total $ 1,242,719 1,617,085
========== ==========
</TABLE>
7. Commitments and Contingencies
-----------------------------
The Partnership is a party to financial instruments with off-balance-
sheet risk in the normal course of its business. Generally, these
instruments are commitments for future equity fundings, venture capital
limited partnership investments, equipment financing commitments, or
accounts receivable lines of credit that are outstanding but not
currently fully utilized. As they do not represent current outstanding
balances, these unfunded commitments are properly not recognized in the
financial statements. At June 30, 1997, the Partnership had unfunded
commitments as follows:
<TABLE>
<S> <C>
Type
- ----
Equity investments $ 51,375
Term notes 28,350
Venture capital limited partnership investments 187,283
---------
Total $ 267,008
=========
</TABLE>
In 1996, the Partnership jointly guaranteed with two affiliated
partnerships a line of credit between a financial institution and a
portfolio company in the computer systems and software industry of which
the Partnership's share is $1,000,000. If the portfolio company fails
to repay the line of credit, the Partnership may be liable up to the
guarantee amount. The Partnership has recorded a $1,000,000 reserve
included in Equity Investments on the Balance Sheet, in the event the
portfolio company fails to repay the line of credit.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
- -------------------------------
During the six months ended June 30, 1997, net cash used by operating
activities totaled $391,727. The Partnership paid management fees of
$194,998 to the Managing General Partners and reimbursed related parties
for operating expenses of $322,625. In addition, $18,594 was paid to
the Individual General Partners as compensation for their services.
Other operating expenses of $169,123 were paid and $313,613 in interest
income was received.
During the six months ended June 30, 1997, the Partnership funded
secured notes receivable totaling $33,902 to a portfolio company in the
industrial/business automation industry and equity investments of
$560,215 primarily to portfolio companies in the medical and
industrial/business automation industries. Proceeds from sales of
equity investments were $531,123, of which $60,211 related to sales
prior to December 31, 1996, which have been settled. Distributions of
$23,133 from venture capital limited partnership investments were
received. Repayments of convertible and secured notes receivable
provided cash of $47,065 and $10,157, respectively. As of June 30,
1997, the Partnership was committed to fund additional investments
totaling $267,008 and has outstanding guarantees up to $1,000,000 as
discussed in Note 7 to the financial statements.
Cash and cash equivalents at June 30, 1997, were $1,242,719. Future
interest income on short-term investments, proceeds from investment
sales, and Managing General Partners' support are expected to be
adequate to fund Partnership operations through the next twelve months.
Results of Operations
- ---------------------
Current quarter compared to corresponding quarter in the preceding year
- -----------------------------------------------------------------------
Net income was $2,617,118 for the three months ended June 30, 1997,
compared to a net loss $3,202,235 for the same period in 1996. The
change was primarily due to a $4,045,012 increase in the change in net
unrealized fair value of equity investments, a $2,357,282 decrease in
realized losses from investment write-downs, and a $888,025 decrease in
total operating expenses. These changes were partially offset by a
$755,000 decrease in the change in net unrealized fair value of secured
notes receivable and a $714,589 decrease in net realized gain from sales
of equity investments.
During the three months ended June 30, 1997, the increase in fair value
of equity investments of $2,739,852 was primarily due to increases in
portfolio companies in the medical and microelectronics industries.
During the same period in 1996, the decrease of $1,305,160 was primarily
due to decreases in portfolio companies in the computer systems and
software and environmental industries, partially offset by increases in
the industrial/business automation industry.
The Partnership did not record any realized losses from investment
write-downs for the quarter ended June 30, 1997. During the same period
in 1996, realized losses of $2,357,282 mostly related to equity
investments in the computer systems and software industry.
Total operating expenses were $240,955 and $1,128,980 for the quarters
ended June 30, 1997 and 1996, respectively. As explained in Note 3 to
the financial statements, the Managing General Partners absorbed
$115,443 during the quarter ended June 30, 1996, and was reimbursed
$853,838 of prior year expenses not subject to the limitation. Had this
amount not been recorded as an expense in 1996 and had the limitation
not been in effect, total operating expenses would have been $240,955
and $390,585 in the second quarters of 1997 and 1996, respectively. The
decrease in operating expenses in the current quarter over the
comparative period in 1996 was primarily due to a higher level of
activity required for portfolio management in 1996.
During the three months ended June 30, 1996, the Partnership recorded an
increase in fair value of secured notes receivable of $755,000 due to
the reclassification of secured notes receivable totaling $1,275,000 to
equity investments as these notes had been reflected with fair values
less than cost. There was no such reclassification for the same period
in 1997.
For the quarter ended June 30, 1997, realized gains of $187,529 mainly
related to the common stock sale of Bolder Technologies Corporation.
During the same period in 1996, realized gains of $902,118 primarily
related to the common stock sale of TheraTx, Incorporated.
Given the inherent risk associated with the business of the Partnership,
the future performance of the portfolio company investments may
significantly impact future operations.
Current six months compared to corresponding six months in the preceding
- ------------------------------------------------------------------------
year
- ----
Net income was $4,404,667 for the six months ended June 30, 1997,
compared to a net loss of $1,708,231 during the same period in 1996.
The change was primarily due to a $3,655,436 increase in the change in
net unrealized fair value of equity investments, a $2,434,373 decrease
in realized losses from investment write-downs, a $954,806 decrease in
total operating expenses, and a $204,343 increase in total income.
These changes were partially offset by a $678,000 decrease in the change
in net unrealized fair value of secured notes receivable and a $476,063
decrease net realized gain from sales of equity investments.
During the six months ended June 30, 1997, the increase in fair value of
equity investments of $4,304,761 was primarily due to increases in
portfolio companies in the medical, microelectronics and communications
industries, partially offset by decreases in the biomedical and
industrial/business automation industries. During the same period in
1996, the increase of $649,325 was primarily due to increases in
portfolio companies in the medical and industrial/business automation
industries, partially offset by decreases in the computer systems and
software and environmental industries.
The Partnership did not record any realized losses form investment
write-downs for the six months ended June 30, 1997. During the same
period in 1996, realized losses of $2,434,373 mostly related to equity
investments in the computer systems and software industry.
Total operating expenses were $456,258 and $1,411,064 for the six months
ended June 30, 1997 and 1996, respectively. As discussed in the above
section, the Managing General Partners absorbed $115,443 for the six
months ended June 30, 1996, and was reimbursed $853,838 of prior year
expenses not subject to the limitation. Had this amount not been
recorded as an expense in 1996 and had the limitation not been in
effect, total operating expenses would have been $456,258 and $672,669
during the six months ended June 30, 1997 and 1996, respectively. The
decrease was mainly due to lower investment operations from lower
overall portfolio activities.
Total income was $324,653 and $120,310 for the six months ended June 30,
1997 and 1996, respectively. The increase was substantially due to
$280,010 in dividend income from Tessera, Inc.
During the six months ended June 30, 1996, the Partnership recorded an
increase in fair value of secured notes receivable of $678,000 due to
the reclassification of secured notes receivable totaling $1,275,000 to
equity investments as these notes had been reflected with fair values
less than cost. There was no such reclassification for the same period
in 1997.
For the six months ended June 30, 1997, realized gains of $426,055
mainly related to the common stock sale of Bolder Technologies
Corporation. During the same period in 1996, realized gains of $902,118
mostly related to the common stock sale of TheraTx, Incorporated.
II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) No reports on Form 8-K were filed by the Partnership during the
quarter ended June 30, 1997.
(b) Financial Data Schedule for the six months ended and as of June 30,
1997 (Exhibit 27).
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be
signed on its behalf by the undersigned, thereunto duly authorized.
TECHNOLOGY FUNDING VENTURE PARTNERS V,
AN AGGRESSIVE GROWTH FUND, L.P.
By: TECHNOLOGY FUNDING INC.
Managing General Partner
Date: August 12, 1997 By: /s/Michael R. Brenner
------------------------------------
Michael R. Brenner
Controller
<TABLE> <S> <C>
<ARTICLE>6
<LEGEND>THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE FORM 10-Q AS OF JUNE 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
<MULTIPLIER>1
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<PERIOD-TYPE> 6-MOS
<INVESTMENTS-AT-COST> 22,192,834
<INVESTMENTS-AT-VALUE> 32,199,129
<RECEIVABLES> 0
<ASSETS-OTHER> 5,371
<OTHER-ITEMS-ASSETS> 1,242,719
<TOTAL-ASSETS> 33,447,219
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 61,436
<TOTAL-LIABILITIES> 61,436
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 23,379,488
<SHARES-COMMON-STOCK> 400,000
<SHARES-COMMON-PRIOR> 400,000
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 10,006,295
<NET-ASSETS> 33,385,783
<DIVIDEND-INCOME> 280,010
<INTEREST-INCOME> 44,643
<OTHER-INCOME> 0
<EXPENSES-NET> (669,850)
<NET-INVESTMENT-INCOME> (345,197)
<REALIZED-GAINS-CURRENT> 445,103
<APPREC-INCREASE-CURRENT> 4,304,761
<NET-CHANGE-FROM-OPS> 4,404,667
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 4,404,667
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 194,998
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 671,302
<AVERAGE-NET-ASSETS> 31,183,450
<PER-SHARE-NAV-BEGIN> 58
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0 <F1>
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 58
<EXPENSE-RATIO> 2.2
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>
A zero value is used since the change in net unrealized fair value is
not allocated to General Partners and Limited Partners as it is not
taxable. Only taxable gains or losses are allocated in accordance with
the Partnership Agreement.
</FN>
</TABLE>
