-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, T/XpnuFJjKh2iIyt+cr7FApDQmf1lQuJb/nfKSYL/k5tXTOWkzF/idOYHxelrXWn BFBIFBGfvkR7kQa5YBNIwQ== 0000700607-95-000007.txt : 19951226 0000700607-95-000007.hdr.sgml : 19951226 ACCESSION NUMBER: 0000700607-95-000007 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951222 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ML VENTURE PARTNERS I L P /DE/ CENTRAL INDEX KEY: 0000700607 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 133115686 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-10179 FILM NUMBER: 95603717 BUSINESS ADDRESS: STREET 1: WORLD FINANCIAL CTR STREET 2: NORTH TOWER CITY: NEW YORK STATE: NY ZIP: 10281-1330 BUSINESS PHONE: 2124491000 MAIL ADDRESS: STREET 1: WORLD FINANCIAL CENTER STREET 2: NORTH TOWER CITY: NEW YORK STATE: NY ZIP: 10281-1330 10-K 1 FORM 10-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended September 30, 1995 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 0-10179 ML VENTURE PARTNERS I, L.P. ================================================================================ (Exact name of registrant as specified in its charter) Delaware 13-3115686 ================================================================================ (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) World Financial Center, North Tower New York, New York 10281-1326 ================================================================================ (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (212) 449-1000 Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered None None Securities registered pursuant to Section 12(g) of the Act: Units of Limited Partnership Interest ================================================================================ (Title of class) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] At December 15, 1995, 11,989 units of limited partnership interest ("Units") were held by non-affiliates of the Registrant. There is no established public trading market for such Units. DOCUMENTS INCORPORATED BY REFERENCE Portions of the Prospectus of the Registrant dated June 18, 1982, as supplemented by supplements thereto dated July 13, 1982 and September 28, 1982, are incorporated by reference in Part I and Part II hereof. PART I Item 1. Business. Formation ML Venture Partners I, L.P. (the "Partnership" or the "Registrant") is a Delaware limited partnership organized on February 12, 1982. Merrill Lynch Venture Capital Co., L.P. (the "Managing General Partner") and four individuals (the "Individual General Partners") are the General Partners of the Partnership. The Managing General Partner is a New York limited partnership in which Merrill Lynch Venture Capital Inc. (the "Management Company") is the general partner. The Management Company is an indirect subsidiary of Merrill Lynch & Co., Inc. and an affiliate of Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S"). On February 17, 1982, the Partnership elected to operate as a business development company under the Investment Company Act of 1940. The Partnership's investment objective is to seek long-term capital appreciation by making venture capital investments in new and developing companies and other special investment situations. The Partnership considers this activity to constitute the single industry segment of venture capital investing. The Partnership publicly offered, through MLPF&S, 12,000 units of limited partnership interest ("Units") at $5,000 per Unit. The Units were registered under the Securities Act of 1933 pursuant to a Registration Statement on Form N-2 (File No. 2-76113) which was declared effective on June 18, 1982. The offering of the 12,000 Units was completed on October 15, 1982. Gross capital contributions to the Partnership totaled $60,610,102; $60,000,000 from the Limited Partners, $606,102 from the Managing General Partner and $4,000 from the Individual General Partners. Net proceeds from the offering available for investment, after the payment of selling commissions and offering expenses, totaled $54,680,135. The information set forth under the captions "Risk and Other Important Factors", "Investment Objective and Policies" and "Venture Capital Operations" on pages 8 through 16 of the prospectus of the Partnership dated June 18, 1982 filed with the Securities and Exchange Commission pursuant to Rule 424(b) under the Securities Act of 1933, as supplemented by supplements thereto dated July 13, 1982 and September 28, 1982 filed pursuant to Rule 424(c) under the Securities Act of 1933 (the "Prospectus"), is incorporated herein by reference. The Venture Capital Investments During its first four years of operations, from 1982 through 1986, the Partnership selected its portfolio of venture capital investments in 34 companies. Through 1986, the Partnership had invested approximately $47 million in the equity or debt securities of these 34 companies. From 1987 to 1993, the Partnership's investment activity was limited to follow-on investments in certain of its existing portfolio companies. As the Partnership's investment portfolio matured, the rate of follow-on investments declined. The Partnership did not make any investments in 1994 or 1995. The Partnership will not make investments in new portfolio companies and does not expect to make additional follow-on investments in its remaining portfolio companies. As of September 30, 1995, 33 of the Partnership's 34 portfolio investments had been fully liquidated. Investments liquidated through September 30, 1995 had a cost of $52.8 million and returned $73.1 million for a net realized gain of $20.2 million. At September 30, 1995, the Partnership's remaining investment portfolio has a cost basis of $1.8 million and a fair value of $3.5 million. Termination The Partnership will terminate no later than December 31, 1996. Employees The Partnership has no employees. The Managing General Partner, subject to the supervision of the Individual General Partners, manages and controls the Partnership's venture capital investments. The Management Company performs, or arranges for others to perform, the management and administrative services necessary for the operation of the Partnership and is responsible for managing the Partnership's short-term investments. Item 2. Properties. The Partnership does not own or lease physical properties. Item 3. Legal Proceedings. The Partnership is not a party to any material pending legal proceedings. Item 4. Submission of Matters to a Vote of Security Holders. No matter was submitted to a vote of security holders during the fourth quarter of the fiscal year covered by this report. PART II Item 5. Market for Registrant's Common Equity and Related Stockholder Matters. The information with respect to the market for the Units set forth under the subcaption "Substituted Limited Partners" on page 26 of the Prospectus is incorporated herein by reference. There is no established public trading market for the Units as of December 15, 1995. At December 15, 1995, there were approximately 6,700 holders of Units. The Managing General Partner and the four Individual General Partners of the Partnership also hold interests in the Partnership. Cash distributions paid or approved during the fiscal years ended September 30, 1995, 1994 and 1993 and cumulative distributions paid or approved through September 30, 1995 are listed below. General Limited Per Date of Distribution Partners Partners $5,000 Unit - -------------------- -------------- --------------- ----------- Inception to September 30, 1992 $ 3,607,506 $ 60,300,000 $ 5,025 January 26, 1993 0 3,300,000 275 April 12, 1993 0 4,200,000 350 January 20, 1994 352,300 1,200,000 100 October 12, 1995* 375,000 600,000 50 -------------- --------------- -------- Cumulative totals at September 30, 1995 $ 4,334,806 $ 69,600,000 $ 5,800 ============== =============== ========
* Distribution approved in July 1995 and accrued at September 30, 1995. Item 6. Selected Financial Data. ($ In Thousands, Except For Per Unit Information) Fiscal Years Ended September 30, 1995 1994 1993 1992 1991 ----------- ----------- ----------- ----------- ------- Cash Distributions to Partners $ 975 $ 1,552 $ 7,500 $ 9,996 $ 2,400 Cumulative Cash Distributions to Partners 73,935 72,960 71,408 63,908 53,912 Net Assets 3,869 2,948 4,537 9,006 11,895 Net Realized Gain (Loss) from Operations 82 (762) 4,493 5,839 (711) Cumulative Net Realized Gain from Operations 21,454 21,372 22,134 17,641 11,802 Net Realized Gain (Loss) from Investments 271 (573) 4,673 6,228 (341) Cumulative Net Realized Gain from Investments 20,226 19,955 20,528 15,855 9,627 PER UNIT OF LIMITED PARTNERSHIP INTEREST: Cash Distributions $ 50 $ 100 $ 625 $ 833 $ 200 Cumulative Cash Distributions 5,800 5,750 5,650 5,025 4,192 Net Asset Value, including Net Unrealized Appreciation (Depreciation) of Investments 257 185 291 719 1,089 Net Realized Gain (Loss) from Operations 2 (53) 294 379 (53) Cumulative Net Realized Gain from Operations 1,437 1,435 1,488 1,194 815
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. Liquidity and Capital Resources At September 30, 1995, the Partnership held $1.1 million in short-term securities with maturities of less than one year and $82,000 in an interest bearing cash account. Interest earned from such investments for the fiscal year ended September 30, 1995 ("fiscal 1995") was $62,000. During fiscal 1995, the Partnership received $804,000 from the sale of certain portfolio investments. From its inception to September 30, 1995, the Partnership had received aggregate proceeds totaling $73.1 million from liquidated portfolio investments. Generally, all cash received from the sale of portfolio investments, after an adequate reserve for operating expenses, is distributed to Partners as soon as practicable after receipt. On July 27, 1995, the General Partners declared a cash distribution to Partners totaling $975,000; $600,000, or $50 per Unit, to the Limited Partners and $375,000 to the Managing General Partner. The distribution was paid on October 12, 1995 to Limited Partners of record on September 30, 1995. From its inception through September 30, 1995, the Partnership had paid or approved cash distributions to Partners totaling $73.9 million, primarily representing proceeds received from the sale of portfolio investments. Results of Operations For the fiscal years ended September 30, 1995 and 1993, the Partnership had a net realized gain from operations of $82,000 and $4.5 million, respectively. For the fiscal year ended September 30, 1994, the Partnership had a net realized loss from operations of $762,000. 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. Realized Gains and Losses from Portfolio Investments - For fiscal 1995, the Partnership had a $271,000 net realized gain from portfolio investments. The Partnership's promissory note due from Alpharel, Inc. matured in September 1995. In October 1995, the Partnership received $213,000 which was net of certain contingency payments deducted from the principal amount of the note, resulting in a realized gain of $66,000. During fiscal 1995, the Partnership sold its 85,311 common shares of Acuity Imaging, Inc. for $714,000, realizing a gain of $114,000 and sold its 620,000 shares of DTC Data Technology Corporation (formerly Qume Corporation) for $90,000. The sale of the Partnership's DTC shares resulted in a $90,000 realized gain for fiscal 1995 since the cost basis of such shares had been written-off in prior years. For fiscal 1994, the Partnership had a $573,000 net realized loss from portfolio investments. During fiscal 1994, the Partnership sold its 284,608 common shares of Alpharel, Inc. in the public market for $421,000, realizing a gain of $47,000. On March 31, 1994, the Partnership wrote-off its remaining $620,000 investment in DTC Data Technology Corporation due to the continued depressed public market price and limited trading volume of the company's common stock. For fiscal 1993, the Partnership had a $4.7 million net realized gain from portfolio investments. During fiscal 1993, the Partnership sold its remaining 423,082 common shares of Viewlogic Systems, Inc. for $6.7 million, realizing a gain of $6 million. In June 1993, the Partnership sold its investment in BehaviorTech, Inc. for $95,000, resulting in a $126,000 realized loss and in July 1993, sold its investment in Private Satellite Network, Inc. for $204,000, resulting in a $46,000 realized loss. In September 1993, Optigraphics Corporation was acquired by Alpharel. In connection with the acquisition, the Partnership sold its preferred shares of Optigraphics for $333,000 in cash, a $226,000 promissory note and 284,608 shares of Alpharel common stock. The Partnership realized a loss of $847,000 from this transaction. Also during fiscal 1993, the Partnership wrote-off $310,000 of its investment in DTC Data Technology. Investment Income and Expenses - Net investment loss (investment income less operating expenses) for the fiscal years ended September 30, 1995 and 1994 was $188,000 and $189,000, respectively. Although there was no significant change in net investment loss for fiscal 1995 compared to fiscal 1994, operating expenses increased by $25,000 from $225,000 in fiscal 1994 to $250,000 in fiscal 1995. This increase in operating expenses was offset by a $26,000 increase in interest and dividend income from $36,000 in fiscal 1994 to $62,000 in fiscal 1995. The increase in operating expenses for fiscal 1995 compared to fiscal 1994 primarily was due to an increase in legal fees incurred by the Partnership during fiscal 1995 relating to the termination of the Partnership. The increase in interest and dividend income for fiscal 1995 compared to fiscal 1994 resulted from an increase in amounts available for investment in short-term securities during fiscal 1995. Net investment loss increased to $189,000 for fiscal 1994 from $180,000 for fiscal 1993. Although net investment loss increased $9,000 for fiscal 1994 compared to fiscal 1993, the management fee and other operating expenses declined $92,000 from $317,000 for fiscal 1993 to $225,000 for fiscal 1994. However, the reduction in operating expenses was more than offset by a $101,000 decline in interest and dividend income from $137,000 for fiscal 1993 to $36,000 for fiscal 1994. The decrease in interest and dividend income for fiscal 1994 compared to fiscal 1993 resulted from a decrease in amounts available for investment in short-term securities during fiscal 1994. The Management Company receives compensation at the annual rate of 2% of the net assets of the Partnership. Such fee is determined and payable on the basis of the Partnership's net assets at the end of each calendar quarter. The management fee for fiscal 1995, 1994 and 1993 was $69,000, $61,000 and $110,000, respectively. Changes in the management fee are due to fluctuations in the Partnership's net assets. The reduced management fee for fiscal 1994 compared to fiscal 1993 reflects the portfolio liquidations and subsequent cash distributions that reduced the Partnership's net asset value during 1994. The increased management fee for fiscal 1995 compared to fiscal 1994 primarily reflects the increased fair value of the Partnership's investment in Inference Corporation, which completed its initial public offering on June 30, 1995. The management fee and other expenses incurred directly by the Partnership are paid with funds provided from operations. Funds provided from operations are obtained from interest earned from short-term investments and proceeds received from the sale of certain portfolio investments. Unrealized Gains and Losses and Changes in Unrealized Appreciation or Depreciation of Portfolio Investments - For fiscal 1995, the Partnership had a $1.8 million net unrealized gain from its portfolio investments. This unrealized gain primarily resulted from the upward revaluation of the Partnership's investment in Inference Corporation, reflecting the company's increased valuation due to the completion of its initial public offering in June 1995. Additionally for fiscal 1995, the Partnership reversed $9,000 of unrealized losses due to the sale of Acuity shares which were sold at a gain during the year. As a result, net unrealized appreciation of investments increased $1.8 million for fiscal 1995. For fiscal 1994, the Partnership had a $199,000 net unrealized gain from its portfolio investments, primarily resulting from the upward revaluation of its investment in Acuity Imaging. Additionally for fiscal 1994, $525,000 was transferred from unrealized loss to realized loss due to the write-off of the Partnership's remaining investment in DTC Data Technology and the sale of its Alpharel shares, as discussed above. The $199,000 unrealized gain and the $525,000 transfer to realized loss resulted in a $724,000 increase in net unrealized appreciation of investments for fiscal 1994. For fiscal 1993, the Partnership had an $810,000 net unrealized gain from its portfolio investments, primarily resulting from the upward revaluation of its investment in Inference Corporation. Additionally for fiscal 1993, $2.3 million was transferred from unrealized gain to realized gain due to the sale or write-off of certain portfolio investments, as discussed above. The $2.3 million transfer to realized gain offset by the additional $810,000 unrealized gain, resulted in a $1.5 million decline in net unrealized appreciation of investments for fiscal 1993. Net Assets - For fiscal 1995, the Partnership had a $1.9 million net increase in net assets resulting from operations, comprised of the $1.8 million increase in net unrealized appreciation of investments and the $82,000 net realized gain from operations for the fiscal year. At September 30, 1995, the Partnership's net assets were $3.9 million, up $921,000 from $2.9 million at September 30, 1994. The $921,000 increase resulted from the $1.9 million net increase in net assets from operations for the fiscal year partially offset by the $975,000 accrued cash distribution paid to Partners in October 1995. For fiscal 1994, the Partnership had a $37,000 net decrease in net assets resulting from operations, comprised of the $762,000 net realized loss from operations partially offset by the $724,000 increase in net unrealized appreciation of investments for the fiscal year. At September 30, 1994, the Partnership's net assets were $2.9 million, down $1.6 million from $4.5 million at September 30, 1993. The $1.6 million decrease resulted from the $1.55 million cash distribution paid to Partners in January 1994 and the $37,000 net decrease in net assets resulting from operations for fiscal 1994. Gains and 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, net unrealized appreciation or depreciation of investments has been included as if it had been realized and allocated to the Limited Partners in accordance with the Partnership Agreement. Pursuant to such calculation, the net asset value per $5,000 Unit at September 30, 1995, 1994 and 1993 was $257, $185 and $291, respectively. Item 8. Financial Statements and Supplementary Data. ML VENTURE PARTNERS I, L.P. INDEX Independent Auditors' Report Balance Sheets as of September 30, 1995 and 1994 Schedule of Portfolio Investments as of September 30, 1995 Schedule of Portfolio Investments as of September 30, 1994 Statements of Operations for the Years Ended September 30, 1995, 1994 and 1993 Statements of Cash Flows for the Years Ended September 30, 1995, 1994 and 1993 Statements of Changes in Partners' Capital for the Years Ended September 30, 1995, 1994 and 1993 Notes to Financial Statements NOTE - All other schedules are omitted because of the absence of conditions under which they are required or because the required information is included in the financial statements or the notes thereto. INDEPENDENT AUDITORS' REPORT ML Venture Partners I, L.P.: We have audited the accompanying balance sheets of ML Venture Partners I, L.P., including the schedules of portfolio investments, as of September 30, 1995 and 1994, and the related statements of operations, cash flows, and changes in partners' capital for each of the three years in the period ended September 30, 1995. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned at September 30, 1995 and 1994 by correspondence with the custodian; where confirmation was not possible, we performed other audit procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements present fairly, in all material respects, the financial position of ML Venture Partners I, L.P. at September 30, 1995 and 1994, and the results of its operations and its cash flows for each of the three years in the period ended September 30, 1995 in conformity with generally accepted accounting principles. As explained in Note 2, the financial statements include securities valued at $3,493,542 and $2,426,548 at September 30, 1995 and 1994, respectively, representing 90% and 82% of net assets, respectively, whose values have been estimated by the Managing General Partner in the absence of readily ascertainable market values. We have reviewed the procedures used by the Managing General Partner in arriving at its estimate of value of such securities and have inspected underlying documentation, and, in the circumstances, we believe the procedures are reasonable and the documentation appropriate. However, because of the inherent uncertainty of valuation, those estimated values may differ significantly from the values that would have been used had a ready market for the securities existed, and the differences could be material. Deloitte & Touche LLP New York, New York November 18, 1995 ML VENTURE PARTNERS I, L.P. BALANCE SHEETS September 30, 1995 1994 -------------- --------- ASSETS Investments - Note 2 Portfolio investments, at fair value (cost $1,825,917 at September 30, 1995 and $2,572,769 at September 30, 1994) $ 3,493,542 $ 2,426,548 Short-term investments, at amortized cost - Note 7 1,099,650 - Cash and cash equivalents 81,887 564,048 Note receivable 213,084 - Accrued interest receivable 1,355 1,131 -------------- --------------- TOTAL ASSETS $ 4,889,518 $ 2,991,727 ============== =============== LIABILITIES AND PARTNERS' CAPITAL Liabilities: Cash distribution payable - Note 6 $ 975,000 Accounts payable 9,104 $ 12,071 Due to Management Company - Note 4 19,441 14,812 Due to Independent General Partners - Note 5 17,250 17,250 -------------- --------------- Total liabilities 1,020,795 44,133 -------------- --------------- Partners' Capital: Managing General Partner 435,850 756,459 Individual General Partners 190 188 Limited Partners (12,000 Units) 1,765,058 2,337,168 Unallocated net unrealized appreciation (depreciation) of investments - Note 2 1,667,625 (146,221) -------------- --------------- Total partners' capital 3,868,723 2,947,594 -------------- --------------- TOTAL LIABILITIES AND PARTNERS' CAPITAL $ 4,889,518 $ 2,991,727 ============== ===============
See notes to financial statements. ML VENTURE PARTNERS I, L.P. SCHEDULE OF PORTFOLIO INVESTMENTS September 30, 1995 Active Portfolio Investments: Initial Investment Company / Position Date Cost Fair Value Inference Corporation*(A)(B) 332,157 shares of common stock Feb. 1984 $ 1,729,934 $ 3,265,519 Warrants to purchase 6,000 shares of common stock at $5.25 per share, expiring on 12/16/97 0 27,488 Warrants to purchase 8,391 shares of common stock at $5.00 per share, expiring on 4/19/99 4,687 40,535 Brightware, Inc.(B) 332,157 shares of common stock 91,049 160,000 Warrants to purchase 6,000 shares of common stock at $5.25 per share, expiring on 12/16/97 0 0 Warrants to purchase 8,391 shares of common stock at $5.00 per share, expiring on 4/19/99 247 0 - ------------------------------------------------------------------------------------------------------------------------------- Totals From Active Portfolio Investments $ 1,825,917 $ 3,493,542 =================================
Supplemental Information: Liquidated Portfolio Investments(F) Liquidation Realized Company Date Cost Gain (Loss) Return - ------------------------------------------------------------------------------------------------------------------------------- Auragen Systems Corp. 1985 $ 1,624,200 $ (1,614,725) $ 9,475 Automatix Incorporated 1990 1,012,913 (999,543) 13,370 BehaviorTech, Inc. 1991-1993 920,352 (825,807) 94,545 Bytel Corporation 1990 750,120 (750,020) 100 California Devices, Inc. 1987 1,957,701 (1,957,701) 0 Cimflex Teknowledge Corporation 1990/1991 1,679,576 (1,599,825) 79,751 Contemporary Communications Corporation 1990 1,040,856 70,644 1,111,500 Cygnet Technologies, Inc. 1986-1992 3,754,289 (2,670,691) 1,083,598 Dallas Semiconductor Corporation 1988/1989 1,690,417 4,914,317 6,604,734 Data Recording Systems, Inc. 1988 3,402,026 (3,271,714) 130,312 DTC Data Technology Corporation(C) 1992-1994 1,552,550 (1,462,650) 89,900
ML VENTURE PARTNERS I, L.P. SCHEDULE OF PORTFOLIO INVESTMENTS - continued September 30, 1995 Supplemental Information: Liquidated Portfolio Investments - continued(F) Liquidation Realized Company Date Cost Gain (Loss) Return - ------------------------------------------------------------------------------------------------------------------------------- Envision Technology Inc. 1985 $ 812,235 $ (805,309) $ 6,926 Everex Systems, Inc. 1991/1992 750,000 236,055 986,055 Higher Order Software, Inc. 1987 632,857 (632,857) 0 IDEXX Laboratories, Inc. 1991/1992 1,032,903 2,357,935 3,390,838 ImagiTex, Inc. 1990 1,500,018 164,323 1,664,341 Intek Diagnostics, Inc. 1989 3,846,203 (3,846,202) 1 International Power Technology, Inc. 1990/1992 1,000,035 (692,659) 307,376 Itran Corp. / Acuity Imaging, Inc.(D) 1994-1995 600,000 114,414 714,414 Mentor Graphics Corporation 1990/1991 1,794,445 3,509,547 5,303,992 Network Equipment Technologies, Inc. 1987 1,000,000 3,199,678 4,199,678 Optigraphics Corporation / Alpharel, Inc.(E) 1992-1995 2,700,890 (1,734,182) 966,708 Private Satellite Network, Inc. 1991-1993 1,060,785 (856,166) 204,619 Qubix Graphic Systems Incorporated 1989 4,626,335 (4,605,353) 20,982 Signode Industries Inc. 1986 1,710,891 16,375,860 18,086,751 Systems Center, Inc. 1989 500,000 476,865 976,865 Twyford International, Inc. 1991 720,398 (548,155) 172,243 United AgriSeeds, Inc. 1987 1,995,826 1,639,900 3,635,726 Valid Logic Systems Incorporated 1985/1986 1,803,884 3,088,241 4,892,125 Viewlogic Systems, Inc. 1991/1992 1,500,000 11,558,456 13,058,456 Visic, Inc. 1986-1991 750,000 (705,723) 44,277 Visidata Corp. 1985 601,333 (601,333) 0 Xidex Corporation 1986/1987 2,524,974 2,710,711 5,235,685 Totals from Liquidated Portfolio Investments $ 52,849,012 $ 20,236,331 $ 73,085,343 --------------------------------------------------------
Combined Net Combined Unrealized and Fair Value Cost Realized Gain and Return Totals from Active and Liquidated Portfolio Investments $ 54,674,929 $ 21,903,956 $ 76,578,885 ========================================================
ML VENTURE PARTNERS I, L.P. SCHEDULE OF PORTFOLIO INVESTMENTS - continued September 30, 1995 Supplemental Information: Liquidated Portfolio Investments(F) (A) Public company (B) Effective in May 1995, Inference Corporation completed a spin-off of certain of its assets and liabilities, in a tax free transaction, to Brightware, Inc. and all of the shares of Brightware were issued to the Inference shareholders. The Partnership's ownership of Brightware coincided with its ownership of Inference prior to the spin-off. On June 30, 1995, Inference completed its initial public offering. As a result of a conversion of preferred stock into common stock and a one-for-five reverse split effected in connection with the offering, the Partnership exchanged its 951,671 shares of preferred stock and warrants to purchase 71,959 shares of preferred stock of Inference for 332,157 shares of common stock and warrants to purchase 14,391 shares of common stock. The Partnership's Inference and Brightware securities are non-income producing. Additionally, the Partnership's Inference securities are restricted from sale. (C) During the fiscal year, the Partnership sold its 620,000 common shares of DTC Data Technology Corporation, for $90,000. The Partnership's investment in DTC Technology (formerly Qume Corporation) had been written-off in prior periods. (D) During the fiscal year, the Partnership sold its 85,311 shares of Acuity Imaging, Inc. common stock for $714,000, realizing a gain of $114,000. (E) During September 1995, the Partnership's $226,137 promissory note due from Alpharel, Inc. was redeemed for approximately 95% of the face value of the note reflecting a reduction to cover certain taxes and other contingent payments allowed under the terms of the note agreement. In October 1995, the Partnership received $213,084 as payment in full for its $226,137 promissory note. (F) Amounts provided for "Supplemental Information: Liquidated Portfolio Investments" are cumulative from inception through September 30, 1995. * May be deemed an affiliated person of the Partnership as defined in the Investment Company Act of 1940. See notes to financial statements. ML VENTURE PARTNERS I, L.P. SCHEDULE OF PORTFOLIO INVESTMENTS September 30, 1994 Active Portfolio Investments: Initial Investment Company / Position Date Cost Fair Value Acuity Imaging, Inc.(A) 85,311 shares of Common Stock Aug. 1985 $ 600,000 $ 464,092 - ------------------------------------------------------------------------------------------------------------------------------- Alpharel, Inc.(A) 6% Promissory Note due 9/24/95 Apr. 1984 146,852 146,852 - ------------------------------------------------------------------------------------------------------------------------------- Inference Corporation* 951,671 shares of Preferred Stock Feb. 1984 1,820,983 1,808,670 Warrants to purchase 30,000 shares of Preferred Stock at $1.05 per share expiring on 12/16/97 0 2,000 Warrants to purchase 41,959 shares of Preferred Stock at $1.00 per share expiring on 4/19/99 4,934 4,934 - ------------------------------------------------------------------------------------------------------------------------------- Totals From Active Portfolio Investments $ 2,572,769 $ 2,426,548 ================================
Supplemental Information: Liquidated Portfolio Investments(B) Net Cost Realized Gain Return Totals From Liquidated Portfolio Investments $ 52,102,160 $ 19,965,785 $ 72,067,945 ========================================================= Combined Net Combined Unrealized and Fair Value Cost Realized Gain and Return Totals From Active and Liquidated Portfolio Investments $ 54,674,929 $ 19,819,564 $ 74,494,493 =========================================================
(A) Public company (B) Amounts provided for "Supplemental Information: Liquidated Portfolio Investments" are cumulative from inception through September 30, 1994. * May be deemed an affiliated person of the Partnership as defined in the Investment Company Act of 1940. See notes to financial statements. ML VENTURE PARTNERS I, L.P. STATEMENTS OF OPERATIONS For The Years Ended September 30, 1995 1994 1993 -------------- ------------ --------- INVESTMENT INCOME AND EXPENSES Interest and dividends $ 61,893 $ 36,467 $ 137,052 -------------- ------------ --------------- Expenses: Management fee - Note 4 69,449 60,561 110,353 Professional fees 78,961 60,161 71,510 Mailing and printing 35,567 39,226 65,371 Independent General Partners' fees - Note 5 63,000 63,000 66,000 Custodial fees 2,305 1,958 4,118 Miscellaneous 874 435 - -------------- ------------ --------------- Total expenses 250,156 225,341 317,352 -------------- ------------ --------------- NET INVESTMENT LOSS (188,263) (188,874) (180,300) Net realized gain (loss) from portfolio investments 270,546 (572,794) 4,673,251 -------------- ------------ --------------- NET REALIZED GAIN (LOSS) FROM OPERATIONS (allocable to Partners) - Note 3 82,283 (761,668) 4,492,951 Net change in unrealized appreciation or depreciation of investments 1,813,846 724,206 (1,461,303) -------------- ------------ --------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 1,896,129 $ (37,462) $ 3,031,648 ============== ============ ===============
See notes to financial statements. ML VENTURE PARTNERS I, L.P. STATEMENTS OF CASH FLOWS For The Years Ended September 30, 1995 1994 1993 ------------- -------------- ----------- CASH FLOWS PROVIDED FROM (USED FOR) OPERATING ACTIVITIES Net investment loss $ (188,263) $ (188,874) $ (180,300) Adjustments to reconcile net investment loss to cash provided from (used for) operating activities: (Increase) decrease in receivables (224) (1,131) 503,472 (Increase) decrease in accrued interest on short-term investments (10,311) 5,131 29,444 Increase (decrease) in payables 1,662 (27,615) (38,228) ------------- -------------- ---------------- Cash provided from (used for) operating activities (197,136) (212,489) 314,388 ------------- -------------- ---------------- CASH FLOWS PROVIDED FROM (USED FOR) INVESTING ACTIVITIES Net proceeds from the sale of portfolio investments 804,314 800,897 7,003,609 Cost of portfolio investments purchased - - (175,004) Net return (purchase) of short-term investments (1,089,339) 948,776 3,502,495 ------------- -------------- ---------------- Cash provided from (used for) investing activities (285,025) 1,749,673 10,331,100 ------------- -------------- ---------------- CASH FLOWS USED FOR FINANCING ACTIVITIES Cash distributions to Partners - (1,552,300) (10,500,000) ------------- -------------- ---------------- Increase (decrease) in cash and cash equivalents (482,161) (15,116) 145,488 Cash and cash equivalents at beginning of period 564,048 579,164 433,676 ------------- -------------- ---------------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 81,887 $ 564,048 $ 579,164 ============= ============== ================
See notes to financial statements. ML VENTURE PARTNERS I, L.P. STATEMENT OF CHANGES IN PARTNERS' CAPITAL For The Years Ended September 30, 1993, 1994 and 1995 Managing Individual Net Unrealized General General Limited Appreciation Partner Partners Partners (Depreciation) Total Balance at September 30, 1992 $ 257,256 $ 2,295 $ 8,155,281 $ 590,876 $ 9,005,708 Cash distribution paid January 26, 1993 - Note 6 - - (3,300,000) - (3,300,000) Cash distribution paid April 12, 1993 - Note 6 - - (4,200,000) - (4,200,000) Allocation of net investment loss - Note 3 (1,803) (12) (178,485) - (180,300) Allocation of net realized gain on investments - Note 3 972,036 247 3,700,968 - 4,673,251 Net change in unrealized depreciation of investments - - - (1,461,303) (1,461,303) ------------- ------- ------------- ------------- --------------- Balance at September 30, 1993 $ 1,227,489 $ 2,530 $ 4,177,764(A) $ (870,427) $ 4,537,356 Cash distribution paid January 20, 1994 - Note 6 (350,000) (2,300) (1,200,000) - (1,552,300) Allocation of net investment loss - Note 3 (1,889) (12) (186,973) - (188,874) Allocation of net realized loss on investments - Note 3 (119,141) (30) (453,623) - (572,794) Net change in unrealized depreciation of investments - - - 724,206 724,206 ------------- ------- ------------- ------------- --------------- Balance at September 30, 1994 $ 756,459 $ 188 $ 2,337,168(A) $ (146,221) $ 2,947,594 Accrued cash distribution paid October 12, 1995 - Note 6 (375,000) - (600,000) - (975,000) Allocation of net investment loss - Note 3 (1,883) (12) (186,368) - (188,263) Allocation of net realized gain on investments - Note 3 56,274 14 214,258 - 270,546 Net change in unrealized depreciation of investments - - - 1,813,846 1,813,846 ------------- ------- ------------- ------------- --------------- Balance at September 30, 1995 $ 435,850 $ 190 $ 1,765,058(A) $ 1,667,625 $ 3,868,723 ============= ======= ============= ============= ===============
(A) The net asset value per Unit of limited partnership interest, including an assumed allocation of net unrealized appreciation (depreciation) of investments, was $257, $185 and $291 for the fiscal years ended September 30, 1995, 1994 and 1993, respectively. Cumulative cash distributions, paid or accrued, to Limited Partners from inception to September 30, 1995, 1994 and 1993 totaled $5,800, $5,750 and $5,650, respectively. See notes to financial statements. ML VENTURE PARTNERS I, L.P. NOTES TO FINANCIAL STATEMENTS 1. Organization and Purpose ML Venture Partners I, L.P. (the "Partnership") is a Delaware limited partnership formed on February 12, 1982. The Partnership's operations commenced on October 15, 1982. Merrill Lynch Venture Capital Co., L.P., the managing general partner of the Partnership (the "Managing General Partner"), is a New York limited partnership formed on February 12, 1982, 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 realize long-term capital appreciation from its portfolio of venture capital investments. From 1982 to 1986, the Partnership assembled a portfolio of 34 venture capital investments in new and developing companies and other special investment situations. The Partnership does not engage in any other business or activity. At September 30, 1995, 33 of the 34 investments had been fully liquidated. The Partnership will not make investments in new companies and will not reinvest the proceeds from the sale of its remaining investments, except to make follow-on investments in existing companies, if necessary. At a meeting held in October 1994, the Individual General Partners voted to extend the Partnership's termination date for an additional two-year period. As a result of this extension, the Partnership must terminate no later than December 31, 1996. 2. Significant Accounting Policies Valuation of Investments - Short-term investments are carried at amortized cost which approximates market. Portfolio investments are carried at cost until significant developments affecting an investment provide a basis for valuation. Thereafter, portfolio investments are carried at fair value as determined quarterly by the Managing General Partner under the supervision of the Individual General Partners. The venture capital portfolio investments held by the Partnership 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 valuation of the Partnership's portfolio investments. Investment Transactions - Investment transactions are recorded on the accrual method. Portfolio investments are recorded on the trade date, the date on which the Partnership obtains an enforceable right to demand the securities or payment therefor. Realized gains and losses on investments sold are computed on a specific identification basis. Income Taxes - No provision for income taxes has been made since all income and losses are allocable to the Partners for inclusion in their respective tax returns. The Partnership's net assets for financial reporting ML VENTURE PARTNERS I, L.P. NOTES TO FINANCIAL STATEMENTS purposes differ from its net assets for tax purposes. Net unrealized appreciation of $1.7 million at September 30, 1995, which was recorded for financial statement purposes, was not recognized for tax purposes. Additionally, from inception to September 30, 1995, other timing differences relating to realized losses totaling $1.3 million have been recorded on the Partnership's financial statements but have not yet been reflected as realized losses for tax purposes. Statements of Cash Flows -The Partnership considers its interest-bearing cash account to be cash equivalents. 3. Allocation of Partnership Profits and Losses The Partnership Agreement provides that the Managing General Partner will be allocated, on a cumulative basis over the life of the Partnership, 20% of net realized capital gains or 10% of net realized capital losses. The Partnership's net realized gains or losses in excess of this allocation to the Managing General Partner, as well as all other income, losses, deductions and credits, if any, will be allocated among all the Partners, including the Managing General Partner, in the proportion of their capital contributions to the Partnership. For the period from October 15, 1982 (commencement of operations) to September 30, 1995, the Partnership had a cumulative net realized gain of $20.2 million. 4. Related Party Transactions The Management Company performs, or arranges for others to perform, the management and administrative services necessary for the operation of the Partnership. The Management Company receives compensation at the annual rate of 2% of the net assets of the Partnership. Such fee is determined and payable quarterly. 5. Independent General Partners' Fees As compensation for services rendered to the Partnership, each of the three Independent General Partners receives $15,000 annually in quarterly installments, $1,000 for each meeting of the General Partners attended or for each other meeting, conference or engagement in connection with Partnership activities at which attendance by an Independent General Partner is required and $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). 6. Cash Distributions On October 12, 1995, the Partnership made a cash distribution to Partners totaling $975,000; $600,000, or $50 per Unit, to Limited Partners of record on September 30, 1995, and $375,000 to the Managing General Partner. The distribution primarily represents proceeds received from the sale of portfolio investments. ML VENTURE PARTNERS I, L.P. NOTES TO FINANCIAL STATEMENTS Cash distributions paid during the periods presented and cumulative cash distributions paid or accrued from inception through September 30, 1995 are listed below: General Limited Per Date of Distribution Partners Partners $5,000 Unit - -------------------- -------------- --------------- ----------- Inception to September 30, 1992 $ 3,607,506 $ 60,300,000 $ 5,025 January 26, 1993 0 3,300,000 275 April 12, 1993 0 4,200,000 350 January 20, 1994 352,300 1,200,000 100 October 12, 1995 (accrued) 375,000 600,000 50 -------------- --------------- -------- Cumulative totals at September 30, 1995 $ 4,334,806 $ 69,600,000 $ 5,800 ============== =============== ========
7. Short-Term Investments At September 30, 1995, the Partnership held investments in short-term securities as detailed below (no short-term securities were held at September 30, 1994). Maturity Purchase Amortized Issuer Yield Date Price Cost Face Value B.M.W. U.S. Capital Corp. 5.72% 10/2/95 $ 1,089,339 $ 1,099,650 $ 1,100,000 ============== ============== ===============
Item 9. Disagreements on Accounting and Financial Disclosure. None PART III Item 10. Directors and Executive Officers of the Registrant. The Partnership GENERAL PARTNERS The five General Partners of the Partnership are responsible for the management and administration of the Partnership. The General Partners consist of four Individual General Partners and the Managing General Partner. As required by the Investment Company Act of 1940 (the "Investment Company Act"), a majority of the General Partners must be individuals who are not "interested persons" of the Partnership as defined in the Investment Company Act. In 1982, the Securities and Exchange Commission ("SEC") issued an order declaring that the three independent General Partners of the Partnership, Cornelius H. Borman, Jr., Eric M. Javits and William M. Kelly (the "Independent General Partners"), are not "interested persons" of the Partnership as defined in the Investment Company Act solely by reason of their being general partners of the Partnership. The Managing General Partner and the four Individual General Partners will serve as General Partners until successors have been elected or until their earlier resignation or removal. The Individual General Partners have full authority over the management of the Partnership and provide overall guidance and supervision with respect to the operations of the Partnership and perform the various duties imposed on the directors of business development companies by the Investment Company Act. In addition to general fiduciary duties, the Individual General Partners, among other things, supervise the management arrangements of the Partnership and supervise the activities of the Managing General Partner. The Managing General Partner, subject to the supervision of the Individual General Partners, has exclusive power and authority to manage and control the Partnership's venture capital investments. Subject to the supervision of the Individual General Partners, the Managing General Partner is authorized to make all decisions regarding the Partnership's venture capital investment portfolio including, among other things, authority to find, evaluate, structure, monitor and liquidate such investments and to provide, or arrange for the provision of, managerial assistance to the portfolio companies in which the Partnership invests. Individual General Partners Cornelius H. Borman, Jr. (1) 23 Smith Street Chappaqua, New York 10514 Age 80 Individual General Partner since 1982 Units of the Partnership beneficially owned at December 15, 1995 - None (3) Investment Adviser with Rockefeller Family & Associates from 1952 to 1980; General Partner of Venrock Associates, a venture capital partnership formed by the Rockefeller family, from 1969 to 1980. Eric M. Javits (1) 1345 Avenue of the Americas New York, New York 10105 Age 64 Individual General Partner since 1982 Units of the Partnership beneficially owned at December 15, 1995 - None (3) Senior counsel to Robinson, Brog, Leinwand, Reich, Genovese & Gluck, P.C. since 1994; Consultant to the United States Department of State from 1989 to 1990; Member of the law firm of Robinson, Brog, Leinwand, Reich, Genovese & Gluck, P.C. and its predecessor firms from 1958 to 1989 and a senior partner of such firm from 1964 to 1989. William M. Kelly (1) 40 Wall Street New York, New York 10005 Age 51 Individual General Partner since 1982 Units of the Partnership beneficially owned at December 15, 1995 - One (3) Associate of William T. Golden, Corporate Director and Trustee, since 1980; Vice President of National Aviation and Technology Company, a registered investment company, from 1977 to 1980; Individual General Partner of ML Venture Partners II, L.P. Kevin K. Albert (2) World Financial Center North Tower New York, New York 10281-1326 Age 43 Individual General Partner since 1991 Units of the Partnership beneficially owned at December 15, 1995 - None (3) President of the Management Company; Managing Director of Merrill Lynch & Co. Investment Banking Division ("MLIBK") since 1988; Vice President of MLIBK from 1983 to 1988. (1) Member of Audit Committee of the Individual General Partners. (2) Interested person, as defined in the Investment Company Act. (3) Messrs. Borman, Javits and Kelly have each contributed $1,000 to the capital of the Partnership. Mr. Albert succeeded to the interest of a former Individual General Partner who contributed $1,000 to the capital of the Partnership. The Managing General Partner Merrill Lynch Venture Capital Co., L.P. (the "Managing General Partner") is a limited partnership organized on February 12, 1982 under the laws of the State of New York. The Managing General Partner maintains its principal office at North Tower, World Financial Center, New York, New York 10281-1326. The Managing General Partner has acted as the managing general partner of the Partnership since the Partnership commenced operations on October 15, 1982. The Managing General Partner is engaged in no other activities at the date hereof. The general partner of the Managing General Partner is Merrill Lynch Venture Capital Inc. (the "Management Company"). Information concerning the Management Company is set forth below under the Management Company. The Partnership Agreement obligates the Managing General Partner to contribute cash to the capital of the Partnership so that the Managing General Partner's capital contribution at all times will be equal to one percent (1%) of the aggregate capital contributions of all Partners of the Partnership. The Managing General Partner has contributed $606,102 to the capital of the Partnership. The Management Company Merrill Lynch Venture Capital Inc. (the "Management Company") has served as the management company for the Partnership since the Partnership commenced operations. The Management Company performs, or arranges for others to perform, the management and administrative services necessary for the operation of the partnership pursuant to a Management Agreement, dated as of July 12, 1982, between the Partnership and the Management Company. The Management Company is an indirect subsidiary of Merrill Lynch & Co., Inc. The Management Company, which was incorporated under Delaware law on January 25, 1982, maintains its principal office at North Tower, World Financial Center, New York, New York 10281-1326. Set forth below is information concerning the directors and officers of the Management Company. Unless otherwise noted, the address of each such person is in North Tower, World Financial Center, New York, New York, 10281-1326. Kevin K. Albert Director, President Age 43 Officer or Director since 1990 Managing Director of MLIBK since 1988; Vice President of MLIBK from 1983 to 1988. Robert F. Aufenanger Director, Executive Vice President Age 42 Officer or Director since 1990 Vice President of Merrill Lynch & Co. Corporate Strategy, Credit and Research and Director of the Partnership Management Group since 1991; Director of MLIBK from 1990 to 1991; Vice President of MLIBK from 1984 to 1990. Robert W. Seitz Director, Vice President Age 49 Officer or Director since 1993 First Vice President of Merrill Lynch & Co. Corporate Strategy, Credit and Research and a Managing Director within the Corporate Credit Division of Merrill Lynch since 1987. Diane T. Herte Vice President and Treasurer Age 35 Officer or Director since 1995 Assistant Vice President of Merrill Lynch & Co. Corporate Strategy, Credit and Research since 1992 and joined Merrill Lynch in 1984. Ms. Herte's responsibilities include controllership and financial management functions for certain partnerships for which subsidiaries of ML Leasing Equipment Corp., an affiliate of Merrill Lynch, are general partners. The directors of the Management Company will serve as directors until the next annual meeting of stockholders and until their successors are elected and qualify. The officers of the Management Company will hold office until the next annual meeting of the Board of Directors of the Management Company and until their successors are elected and qualify. There are no family relationships among any of the Individual General Partners of the Partnership and the officers and directors of the Management Company. Item 11. Executive Compensation. Compensation - The Partnership pays each Independent General Partner an annual fee of $15,000 in quarterly installments, $1,000 per meeting of the General Partners attended ($500 if a committee meeting is held on the same day as a meeting of the General Partners) and pays all non-interested Individual General Partners' actual out-of-pocket expenses relating to attendance at meetings. The Independent General Partners receive $1,000 for each meeting of the audit committee attended ($500 if the audit committee meeting is held on the same day as a meeting of the General Partners). The aggregate fees and expenses paid by the Partnership to the Independent General Partners for the fiscal years ended September 30, 1995, 1994 and 1993 totaled $63,000, $63,000 and $66,000, respectively. Allocations and Distributions - The profits and losses of the Partnership are determined and allocated as of the end of and within sixty days after the end of each fiscal year. The Managing General Partner is allocated the Partnership's net realized capital gains or losses, as the case may be, for such year so that it receives (i) 20% of the Partnership's net capital gains calculated on a cumulative basis over the life of the Partnership through such year, if the Partnership has generated net realized capital gains on such cumulative basis through such year or (ii) 10% of the Partnership's net capital losses calculated on a cumulative basis over the life of the Partnership through such year, if the Partnership has generated net realized capital losses on such cumulative basis through such year. Such allocation is referred to herein as the "Managing General Partner's Allocation". The Partnership's net realized capital gains or losses in excess of the Managing General Partner's Allocation and all other profits and losses, including interest or other income on funds not invested in venture capital investments are allocated among all the Partners of the Partnership (including the Managing General Partner) in proportion to their capital contributions. Distributions to the Managing General Partner are not made to the extent that the net realized gains allocated to the Managing General Partner are offset by an amount equal to 20% of the net unrealized losses of the Partnership determined as of the end of the fiscal year for which such distributions were made. For its fiscal year ended September 30, 1995, the Partnership had a net realized gain from its portfolio investments of $270,546. In accordance with the allocation procedure described above, the Managing General Partner was allocated $56,274 of such realized gain. For its fiscal year ended September 30, 1994, the Partnership had a net realized loss from its portfolio investments of $572,794. In accordance with the allocation procedure described above, the Managing General Partner was allocated $119,141 of such realized loss. For its fiscal year ended September 30, 1993, the Partnership had a net realized gain from its portfolio investments of $4,673,251. In accordance with the allocation procedure described above, the Managing General Partner was allocated $972,036 of such realized capital gain. The General Partners declared a cash distribution totaling $975,000; $600,000 payable to Limited Partners of record during the fiscal year ended September 30, 1995 and $375,000 to the General Partner. The General Partners declared a cash distribution totaling $1.2 million payable to Limited Partners of record during the fiscal year ended September 30, 1994. The General Partners also received a distribution totaling $352,300 during fiscal 1994. The General Partners declared two cash distributions totaling $7.5 million payable to Limited Partners of record during the fiscal year ended September 30, 1993. Management Fee - The Management Agreement provides that as compensation for its services to the Partnership, the Management Company will receive a fee at the annual rate of 2% of the amount of the net assets of the Partnership. Such fee is determined and payable quarterly on the basis of the net assets of the Partnership at the end of each calendar quarter. For the fiscal years ended September 30, 1995, 1994 and 1993, management fees earned by the Management Company aggregated $69,000, $61,000 and $110,000, respectively. Item 12. Security Ownership of Certain Beneficial Owners and Management. The information concerning the security ownership of the Individual General Partners set forth in Item 10 under the subcaption "Individual General Partners" is incorporated herein by reference. As of December 15, 1995, no person or group is known by the Partnership to be the beneficial owner of more than 5 percent of the Units. Mr. Kelly, an Individual General Partner of the Partnership, owns one Unit or less than one percent of the total Units outstanding. The Individual General Partners and the directors and officers of the Management Company own as a group one Unit or less than one percent of the total Units outstanding. The Partnership is not aware of any arrangement which may result, at a subsequent date, in a change of control of the Partnership. Item 13. Certain Relationships and Related Transactions. Kevin K. Albert, a Director and President of the Management Company and a Managing Director of MLIBK, joined Merrill Lynch in 1981. Robert F. Aufenanger, a Director and Executive Vice President of the Management Company, a Vice President of Merrill Lynch & Co. Corporate Strategy, Credit and Research and a Director of the Partnership Management Department, joined Merrill Lynch in 1980. Robert W. Seitz, a Director and Vice President of the Management Company, a First Vice President of Merrill Lynch & Co. Corporate Strategy, Credit and Research and a Managing Director within the Corporate Credit Division of Merrill Lynch, joined Merrill Lynch in 1981. Diane T. Herte, a Vice President and Treasurer of the Management Company and an Assistant Vice President of Merrill Lynch & Co. Corporate Strategy, Credit and Research, joined Merrill Lynch in 1984. Item 14. Exhibits, Financial Statements, Schedules and Reports on Form 8-K. (a) 1. Financial Statements Balance Sheets as of September 30, 1995 and 1994 Schedule of Portfolio Investments as of September 30, 1995 Schedule of Portfolio Investments as of September 30, 1994 Statements of Operations for the Years Ended September 30, 1995, 1994 and 1993 Statements of Cash Flows for the Years Ended September 30, 1995, 1994 and 1993 Statement of Changes in Partners' Capital for the Year Ended September 30, 1995 Statement of Changes in Partners' Capital for the Year Ended September 30, 1994 Statement of Changes in Partners' Capital for the Year Ended September 30, 1993 Notes to Financial Statements 2. All other schedules are omitted because of the absence of conditions under which they are required or because the required information is included in the financial statements or the notes thereto. 3. Exhibits (3) Amended and Restated Certificate and Agreement of Limited Partnership of the Partnership, dated as of February 12, 1982 and amended through October 6, 1982.* (10) Management Agreement dated as of July 12, 1982 between the Partnership and the Management Company.* (27) Financial Data Schedule. (28) (a) Prospectus of the Partnership dated June 18, 1982 filed with the Securities and Exchange Commission pursuant to Rule 424(b) under the Securities Act of 1933, as supplemented by supplements thereto dated July 13, 1982 and September 28, 1982, filed pursuant to Rule 424(c) under the Securities Act of 1933.* (28) (b) Custody Agreement dated May 31, 1983 between the Partnership and Chemical Bank.** (b) No reports on Form 8-K have been filed during the fourth quarter of the fiscal year covered by this report. - ----------------------------- * Incorporated by reference to the Partnership's Annual Report on Form 10-K for the fiscal year ended September 30, 1982 filed with the Securities and Exchange Commission on December 29, 1982. ** Incorporated by reference to the Partnership's Quarterly Report on Form 10-Q for the quarter ended June 30, 1983 filed with the Securities and Exchange Commission on August 15, 1983. 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 on the 15th day of December. ML VENTURE PARTNERS I, L.P. By: /s/ Kevin K. Albert Kevin K. Albert General Partner Pursuant to the requirements of the Securities and Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrants and in the capacities indicated on the 15th day of December. By: Merrill Lynch Venture Capital Co., L.P. By: /s/ Eric M. Javits its Managing General Partner Eric M. Javits Individual General Partner By: Merrill Lynch Venture Capital Inc. ML Venture Partners I, L.P. its General Partner By: /s/ Kevin K. Albert By: /s/ William M. Kelly ------------------------------------------------- ------------------------ Kevin K. Albert William M. Kelly President Individual General Partner (Principal Executive Officer) ML Venture Partners I, L.P. By: /s/ Diane T. Herte By: /s/ Cornelius H. Borman, Jr. Diane T. Herte Cornelius H. Borman, Jr. Vice President and Treasurer Individual General Partner (Principal Financial and Accounting Officer) ML Venture Partners I, L.P.
EX-27 2 EXHIBIT 27 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
6 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ML VENTURE PARTNERS I, L.P.'S FOURTH QUARTER ANNUAL REPORT ON FORM 10-K FOR THE PERIOD ENDED SEPTEMBER 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. SEP-30-1995 SEP-30-1995 YEAR 1,825,917 3,493,542 214,439 0 81,887 4,889,518 0 0 1,020,795 1,020,795 0 0 12,000 12,000 0 0 0 0 1,667,625 3,868,723 0 61,893 0 250,156 (188,263) 270,546 1,813,846 1,896,129 0 0 0 975,000 0 0 0 1,897,791 0 0 0 0 0 0 0 3,408,159 185 (16) 138 0 50 0 257 0 0 0
-----END PRIVACY-ENHANCED MESSAGE-----