________________________________________________________
Securities and Exchange Commission
Washington, DC 20549
________________________________________________________
FORM 10-K
MARK ONE:
[X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 for the Fiscal Year Ended Dec ember 31, 2001; or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
Commission File No. 038593
CAPITAL PARTNERS II, LTD. LIQUIDATING TRUST
(Successor to Renaissance Capital Partners II, Ltd.)
__________________________________________________
(Exact name of registrant as specified in its charter)
TEXAS 75-6590369
(State of incorporation or organization) (I.R.S. Employer
Identification No.)
5646 MILTON ST., SUITE 900
DALLAS, TEXAS 75206
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (214) 378-9340
Securities Registered Pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
NONE NONE
Securities Registered Pursuant to Section 12(g) of the Act:
TRUST INTERESTS
(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 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 by 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]
State the aggregate market value of the voting stock held by non affiliates of
the registrant:
As of December 31, 2001, there were 43,250 Trust Interests outstanding. There
is no market in the Interests. Based on values as reflected in the
Registrant's Financial Statements, the aggregate value of the Liquidating
Trust Interests held by non-affiliates as of December 31, 2001, was
$23,340,412. Aggregate value of the Liquidating Trust Interests held by
affiliates as of December 31, 2001, was $8,640.
PART I
The discussion set forth herein contains certain forward looking statements
with respect to the financial condition, results of operations and business of
the Liquidating Trust. These forward looking statements are subject to
certain risks and uncertainties, not all of which can be predicted or
anticipated. Factors that may cause actual results to differ materially from
those contemplated by the forward looking statements herein include, but are
not limited to, changes in economic conditions; competitive conditions in the
markets in which portfolio companies conduct their operations, including
competition from companies with substantially greater resources than those of
the portfolio companies; and the results of litigation, which cannot be
predicted with certainty. Readers of this Discussion should not place undue
reliance on forward looking statements.
Item 1. BUSINESS
GENERAL DEVELOPMENT OF BUSINESS
Capital Partners II, Ltd. Liquidating Trust (referred to herein as the
"Trust") is the successor to Renaissance Capital Partners II, Ltd. (the
"Partnership"). On November 17, 2000, following a meeting of the limited
partners of the Partnership, the Partnership transferred substantially all of
its assets, including all of its investments, to the Trust. The only assets
remaining in the Partnership were certain claims in litigation and cash
anticipated to be required to operate the Partnership.
Thomas W. Pauken acts both as the Liquidation Trustee of the Partnership and
as the Liquidating Trustee of the Trust.
The Partnership, which was a Texas limited partnership formed in 1991, elected
to operate as a business development company under the Investment Company Act
of 1940. The investment objective of the Partnership was to provide investors
with current income and long-term capital appreciation by investing primarily
in private placement convertible debt securities (the "Debentures") of small
and medium size public companies ("Portfolio Companies").
On January 23, 1991, the Partnership filed a registration statement on Form N-
2 for the sale of up to 50,000 Limited Partnership Units at an offering price
of $1,000 per Unit. The Partnership continued the offering until March 31,
1993, at which time the offering was closed.
Renaissance Capital Group, Inc. ("Renaissance Group"), a Texas corporation,
served as the managing general partner (the "Managing General Partner") and as
investment adviser to the Partnership until September 30, 1998. In those
capacities, Renaissance Group was primarily responsible for the selection,
evaluation, structure, and administration of the Partnership's investment
portfolio. Those activities were subject to the supervision of two Independent
General Partners of the Partnership, who provided guidance with respect to the
operations of the Partnership (See Partnership's Form 10-K for year ended
December 31, 1999; Item 10. Directors and Executive Officers of the
Registrant).
Effective October 1, 1998, Renaissance Group withdrew as Managing General
Partner of the Partnership as part of an agreement to begin to wind up and
liquidate the Partnership. Mr. Thomas W. Pauken, who had served as an
Independent General Partner, agreed to become the Liquidation Trustee (the
"Trustee") pursuant to the Liquidation Trustee's Agreement which was filed as
an Exhibit to Form 10-Q for the period ending September 30, 1998. The Trustee
assumed all responsibilities, and has the authority, of the Managing General
Partner. From and after October 1, 1998, the Partnership limited its
activities to liquidating its assets and winding up its affairs. Since the
date of transfer, the Trust has continued the liquidation of the Partnership's
assets.
On November 17, 2000, at a special meeting of the limited partners, a
resolution calling for the Partnership to withdraw its election to be
regulated as a business development company was adopted, and the Partnership
filed a statement with the Securities and Exchange Commission withdrawing its
election. The second resolution adopted at this meeting called for an
amendment to the Partnership Agreement authorizing the Trustee to transfer the
Partnership's investment assets to a liquidating Trust. On November 17, 2000,
the Trust was created and the investment assets of the Partnership were
transferred to the Trust. Pursuant to the Capital Partners II, Ltd.
Liquidating Trust Agreement (the "Liquidating Trust Agreement"), the Trust
will terminate no later than November 17, 2002.
NARRATIVE DESCRIPTION OF THE BUSINESS
The Partnership, as a business development company under the 1940 Act,
primarily made investments in convertible debentures of small and medium sized
public companies. The Trust does not intend to make any new investments in
additional companies.
LIQUIDATION POLICY
The investment objective of the Trustee is to wind up the Trust in an
expeditious manner while seeking to maximize the value of the remaining assets
and reduce the administrative and managerial costs to the Trust. Pursuant to
the Liquidating Trust Agreement the Trust will terminate no later than two
years after its formation date, November 17, 2000.
The Partnership distributed $1,000,000 to the Limited Partners in 1998 and has
made no further distributions except for the Units in the Trust.
PORTFOLIO INVESTMENTS
On November 17, 2000, the Partnership had investments in two (2) portfolio
companies with an aggregate cost of $10,312,729, and a fair value (based on
the closing prices of the securities owned by the Trust on that day) of
$35,176,143. These investments were transferred to the Trust at the close of
business on November 17, 2000.
TUTOGEN MEDICAL, INC. (formerly known as Biodynamics International, Inc.)
Tutogen Medical, Inc. ("Tutogen") processes bio implants for neurosurgical,
orthopedic, urological, reconstructive and general surgical indications,
utilizing its patented Tutoplast process of tissue preservation and viral
inactivation. Tutogen's products are distributed worldwide through operating
subsidiaries in the U.S. and Germany and through strategic alliances with such
companies as Sulzer Spine-Tech, Sulzer Dental, Mentor and I.O.P., Inc. Tutogen
stock trades on the NASDAQ stock market under the symbol TTGN. On March 29,
1993, the Partnership invested $2,500,000 in a 11% convertible debenture
issued by Tutogen. Subsequently, the Partnership made follow-on investments
in Tutogen.
Prior to the formation of the Trust, the following transactions involving
Tutogen occurred in 2000:
1. In the first quarter of 2000, the Partnership received a principal payment
in the amount of $9,950 on the $500,000 Debenture. The first quarter of
Tutogen's fiscal year 2000 reported earnings of $0.05 per share.
2. The Trustee was appointed Chairman of the Board of Tutogen Medical, Inc.
in late April, 2000, in New York. On August 17, 2000, the common stock was
listed for trading on the American Stock Exchange with the symbol TTG.
3. On June 23, 2000, in a private transaction, the Partnership sold common
stock purchase warrants to purchase 250,000 shares at an exercise price of
$1.25 per share to Sulzer Medica USA Holding Co. The Partnership received
proceeds in the amount of $937,500 from the transfer of those warrants.
4. On June 28, 2000 the Partnership exercised its right to convert the
outstanding principal on the $500,000 Debenture, resulting in the issuance to
the Partnership of 363,000 shares of common stock of Tutogen. On the same
date the Partnership also exercised common stock purchase warrants to
purchase 1,103,957 shares, at an exercise price of $1.25 per share.
At the close of business on November 17, 2000, the Partnership transferred all
of its interest in Tutogen consisting of 7,202,408 shares of common stock and
700,000 common stock purchase warrants, to the Trust. The Partnership also
exercised common stock options to purchase 2,500 shares, at an exercise price
of $2.22. Upon issue these shares of common stock were transferred to the
Trust.
The Trust exercised common stock purchase warrants to purchase 400,000 and
300,000 shares, at an exercise price of $1.25 and $1.50 per share,
respectively, on December 20, 2000. The Trust borrowed the funds required to
exercise the warrants ($950,000) from Sulzer Medica USA Holding Co. As of
December 31, 2000, the Trust was the beneficial owner of 7,904,908 shares
representing approximately 53.24% of the outstanding shares of Tutogen. As of
December 31, 2001, the remaining principal balance on the loan from Sulzer
Medica was $800,000.
As of December 31, 2001, the closing price of the Tutogen stock was $3.05 per
share.
GDI GLOBAL DATA, INC.
GDI Global Data, Inc. ("GDI") provides end-to-end remote communications
solutions for commercial and industrial markets. In the second quarter of
2000, the Partnership received 166,666 shares of common stock of GDI in
exchange for its 8,333.33 shares of StarComm Products, Inc. ("StarComm") as a
result of a merger between GDI and StarComm. During the second quarter, the
Partnership received proceeds in the amount of $10,925 from the sale of 11,500
shares of common stock of GDI, a stock traded on the Toronto Stock Exchange.
At the close of business on November 17, 2000, the Partnership transferred all
of its interest in GDI consisting of 155,166 shares of common stock, to the
Trust.
As of December 31, 2001, the closing price of the GDI stock was $0.257 per
share.
PERSONNEL
The Trust has two direct employees, the Trustee and an assistant to the
Trustee, who is employed to assist the Trustee in performing the duties and
functions required by the Trust. Outside personnel are retained by the
Trustee on an as needed basis. At the present time, a substantial portion of
the Trustee's staff time is devoted to activities of the Trust and
Partnership.
FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS
A substantial amount of business of Tutogen arises out of the operations of
its German subsidiary. Since there are no additional investments planned by
the Trust, there will be no additional investments in foreign operations.
Item 2. PROPERTIES
The Trust's business activities are conducted from the leased offices of the
Trustee in an office building in Dallas. Certain office expenses relating to
the Trust's activities are charged to the Partnership by the Trustee pursuant
to the Liquidation Trustee Agreement.
Item 3. LEGAL PROCEEDINGS
There are no legal proceedings pending with regard to the Trust or the
Partnership as of December 31, 2001, however the following matter was settled
by the Partnership:
The Trustee filed a lawsuit on behalf of the Partnership against the former
directors of Coded Communications Corporation and others alleging securities
fraud, fraud, negligent misrepresentation and other claims to the detriment of
the Partnership. This cause of action was styled "Thomas W. Pauken,
Liquidation Trustee for Renaissance Capital Partners II, Ltd. v. Hugo Camou,
et al.; Civil Action No. 3-98-CV-2758-G". This matter was resolved in the
fourth quarter of 2001. The Partnership received settlement proceeds in the
amount of $414,527, plus reimbursement of legal fees in the amount of $44,125.
The Partnership also appealed a decision of a Pennsylvania court in a
adversial action against the controlling shareholder of U.S. Fax, a former
portfolio company, in a case styled "Renaissance Capital Partners II, Ltd v.
US Fax, Inc. et al." That appeal was successfully concluded in 1999. The
outcome of that litigation is not expected to have a material effect on the
Partnership.
There are no other legal proceedings currently pending with regard to the
Partnership.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of the Beneficiaries in 2001.
PART II
Item 5. MARKET FOR THE REGISTRANT'S SECURITIES
Upon formation of the Trust and transfer of the Partnership assets to the
Trust, holders of the 43,254 units of the Partnership outstanding on November
17, 2000, were deemed to become the holders of the number of Units in the
Trust equal to the number of Partnership units which they held.
Immediately following the formation of the Trust, the Trust entered into an
Agreement with Sulzer Medica USA Holding Co. ("Sulzer"), whereby Sulzer made a
tender offer (the "Offer") to the beneficiaries of the Trust to acquire up to
21,627 Trust Units (one half of all of the Units) at a purchase price in cash
of $1,387 for each unit. The Offer expired on December 26, 2000.
Beneficiaries tendered 32,886 units to Sulzer, of which 21,627 units were
accepted by Sulzer on a pro rata basis.
TRADING
There is no trading in the Interests and no established market exists.
Interests are restricted from transfer except in the event of death or by
action of law or except with the prior approval of the Liquidating Trustee.
NUMBER OF HOLDERS
As of December 31, 2001, there were approximately 1,845 beneficial holders of
Trust interests.
Item 6. SELECTED FINANCIAL DATA
The following selected financial data for the five year period ended December
31, 2001, should be read in conjunction with the Trust's and the Partnership's
Financial Statements and notes thereto and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" included in Item 7
of this Annual Report on Form 10-K for the five years ended December 31, 2001.
LIQUIDATING TRUST
Year Ended Period from Year Ended Year Ended Year Ended
December 31, Nov 17, 2000 to December 31, December 31, December 31,
2001 Dec 31, 2000 1999 1998 1997
<s> <c> <c> <c> <c> <c>
$ $ $ $ $
Net Operating Income (Loss)
(including realized
losses) (210,662) (1,873) -0- -0- -0-
Net Unrealized appreciation
(depreciation)
on investments (8,509,569) (3,466,727) -0- -0- -0-
Net Income (loss) (8,720,231) (3,468,600) -0- -0- -0-
Income (loss) per
Trust unit (201) (80) -0- -0- -0-
Total Assets 24,169,488 32,659,416 -0- -0- -0-
Distributions
to beneficiaries -0- -0- -0- -0- -0-
Distributions per
Trust unit -0- -0- -0- -0- -0-
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Substantially all of the value of the Trust's assets are represented by the
common stock in Tutogen held by the Trust. As a result, the market value of
Tutogen's common stock, and fluctuations in that value, have a significant
impact on estimates of the fair value of the Trust's assets. In that regard,
beneficiaries of the Trust and other readers of this Report on Form 10-K and
other documents relating to the fair value of the Trust's assets should
recognize that Tutogen has limited capitalization and trading volume, and the
market prices for its common stock at any given time do not necessarily
reflect the price or prices at which a substantial block of Tutogen common
stock could be bought or sold. Accordingly, beneficiaries and other readers
of this Report should recognize that estimated values stated in this Report or
in subsequent documents are necessarily imprecise, and that the apparent value
of Units in the Trust is subject to potentially abrupt and unpredictable
changes, including overall market conditions and changes in the market for
Tutogen's stock. Because of the inherent uncertainty of such valuations, the
estimated fair value as determined by the Trustee is likely to vary
significantly from the value that could actually be realized in one or more
transactions.
2001 COMPARED TO 2000
During 2001, the Trust made no additional portfolio investments. As a result
of prior investments, the Trust incurred a net loss of $8,720,231 during the
year ended December 31, 2001, consisting of the following: (i) interest
expense of $54,813; (ii) unrealized depreciation on portfolio investments of
$8,509,569; (iii) Trustee fees of $72,000; and (iv) general and administrative
expenses of $83,849. The estimated value of Portfolio Investments, as
determined by the Trustee, indicates a decrease of $8,509,569 in fair value
during 2001.
Total expenses incurred by the Trust were $210,662 in 2001, compared to $1,873
for the period from November 17, 2000 to December 31, 2000. The only expense
incurred by the Trust in 2000 was interest expense of $1,873.
The Trust incurred obligations to the Trustee of $72,000 for 2001.
2000 COMPARED TO 1999
During 2000, the Trust made no additional portfolio investments, but made a
follow-on investment to Tutogen Medical, Inc. of approximately $950,000, for
the exercise of the 700,000 warrants. As a result of prior investments and
these follow-on investments, the Trust incurred a net loss of $3,468,600
during the period November 17, 2000 to December 31, 2000, consisting of the
following: (i) interest expense of $1,873 and (ii) unrealized depreciation on
investments of $3,466,727.
Item 7(a). QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
The Trust is subject to financial market risks such as changes in marketable
equity security prices. The Trust does not use derivative financial
instruments to mitigate any of these risks. The return on the Trust's
investments is generally not affected by foreign currency fluctuations.
A significant portion of the Trust's investment portfolio consists of common
stocks. These investments are directly exposed to equity price risk, in that
a percentage change in the prices of these equities would result in a similar
percentage change in the fair value of the Trust's investment in those
securities.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
For the Index to Financial Statements; see "Index to Financial Statements" on
page F-1.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None. The Trust has engaged the accounting firm of Smith, Gray, Boyer and
Daniell, PLLC (formerly Smith, Jackson, Cooper and Daniell, PLLC), which is
the same firm the Partnership engaged to audit the financial statements in
1999. On April 22, 1999, the Partnership engaged the accounting firm of
Smith, Gray, Boyer and Daniell, PLLC ("Smith Gray") to audit the Partnership's
financial statements for the fiscal year ended December 31, 1999, to replace
the firm of KPMG LLP ("KPMG"), which was the principal independent accountant
for the Partnership's certified financial statements since 1991.
On October 1, 1998, the Partnership began liquidation. It is the goal of the
liquidation Trustee to minimize the expenses of the Partnership. In order to
lower the accounting fees incurred by the Partnership the Trustee approved the
engagement of the firm of Smith Gray.
During fiscal 1998, prior to their appointment as certifying accountants, the
Partnership did not consult Smith Gray regarding any of the matters or events
set forth in Item 304(a)(2)(i) and (ii) of Regulation S-K.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
(1) INFORMATION REGARDING LIQUIDATING TRUSTEE
Thomas W. Pauken, age 59, has experience both as a corporate executive officer
and as the head of an independent federal agency. Professionally qualified as
an attorney, he currently is the President of TWP, Inc. From 1985 to 1991,
Mr. Pauken was Vice President and Corporate Counsel of Garvon, Inc., a Dallas-
based venture capital company. Mr. Pauken served on President Reagan's
transition team and on the White House legal counsel's staff. Later, he was
appointed by President Reagan as Director of ACTION, an independent federal
agency that encourages volunteerism, where he served from 1981 to 1985. He
also served as a White House staff assistant and as Associate Director of the
White House Fellowship program from 1970 to 1971. Mr. Pauken served from 1986
to 1991 as Director of 50-off Stores, Inc. He became a member of the Board of
Tutogen Medical, Inc. in January, 1999, and currently serves as Chairman of
the Board of Directors. He also is a member of the Board of TOR Minerals
International, Inc. He holds a BA in political science from Georgetown
University and a JD degree from Southern Methodist University School of Law.
(2) INFORMATION REGARDING SUPERVISING TRUSTEES
Pursuant to the Liquidating Trust Agreement, the Board of Trustees consists of
the Liquidating Trustee and two Supervising Trustees, Robert Farone and David
Wise. Robert Farone, age 59, has experience as a corporate executive officer.
He currently is the Vice President/General Manager of Samsonsite Stores. He
was President of Bag'n Baggage, Ltd., an 80-store retailer of luggage and
leather goods operating in eight states under the trade names Bag'n Baggage,
Biagio, Houston Trunk Factory, Malm and Roberto's, from June 1985 until 2001.
Mr. Farone also served as a director of Caribbean Marine, Inc. from June 1985
until 2001, and has been on the board of directors of Tutogen since April
1999. He is also a beneficiary of the Trust. David S. Wise, age 47, has
experience as a corporate executive officer, an attorney and general counsel.
He currently is Group Vice President and General Counsel of Sulzer Medica, a
diverse global manufacturer of medical devices. He was a founding partner in
the Texas-based intellectual property law firm of Conley, Rose & Tayon, P.C.
prior to joining Sulzer Medica in 1994. Between 1982 and 1991, Mr. Wise was
an associate and later partner at Butler and Binion, L.L.P.
Item 11. EXECUTIVE COMPENSATION
Pursuant to the Liquidating Trust Agreement, the Trustee shall be compensated
on the same terms as the compensation received by the Trustee pursuant to the
Liquidation Trustee's Agreement that governed the liquidation of the
Partnership. As of October 1, 1998, the Trustee was entitled to be
compensated at an amount of $6,000 per month for a total of $18,000 for his
services through December 31, 1998 and $72,000 annually for his services in
1999, 2000 and 2001. The Trustee also is entitled to full reimbursement of
all reasonable expenses relative to his service on behalf of the Trust; and he
may be entitled to additional compensation for his services subject to the
improvement in the value of the assets of the Trust during his tenure as
Liquidating Trustee from October 1, 1998, to the end of the Trust in 2001.
Mr. Pauken is Chairman of the Board of Tutogen and, in that capacity, he is
compensated by Tutogen along with other directors through the payment of
director's fees and the grant of stock options.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of December 31, 2001, Thomas W. Pauken, Trustee, did not directly own any
Units of the Trust. Henderson-Willis, Ltd. has ownership of 2 units of
beneficial interest in the Trust. Mr. Pauken is a limited partner of
Henderson-Willis, Ltd. The following table sets forth information concerning
the number of Units of the Trust beneficially owned as of December 31, 2001,
by (i) the persons who, to the knowledge of the Trustee, beneficially owned
more than 5% of the outstanding Units, (ii) each Supervising Trustee, and
(iii) the Supervising Trustees as a group:
Name and Address of Units Beneficially Percent of Total Units
Beneficial Owner Owned Outstanding
______________________________________________________________________________
Sulzer Medica USA Holding Co. 21,627 50%
3 E. Greenway Plaza #1600
Houston, TX 77046
Thomas W. Pauken 2 *
Liquidation Trustee
5646 Milton St., Ste. 900
Dallas, Texas 75206
Robert C. Farone 14 *
11067 Petal St.
Dallas, TX 75238
David S. Wise 0 *
3 E. Greenway Plaza #1600
Houston, TX 77046
_______
* All directors and executive 16
officers as a group (3 persons).
_______
* Less than 1%. To the Trustee's knowledge, no other person beneficially
owned 5% or more of the outstanding Units.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES, AND REPORTS ON FORM 8-K
Documents filed as part of this Form 10-K
FINANCIAL STATEMENTS:
The financial statements filed as part of this report are listed in "Index to
Financial Statements" on page F-1 hereof.
FINANCIAL STATEMENT SCHEDULES:
Not applicable.
REPORTS ON FORM 8-K:
None.
EXHIBITS:
INDEX OF EXHIBITS
Exhibit Number Description
3.1 Renaissance Capital Partners II, Ltd. Amended and Restated Agreement
and Articles of Limited Partnership dated as of September 30, 1991
(incorporated by reference to Partnership's Form N-2 as filed with
the Securities and Exchange Commission on October 21, 1991
(Registration No. 33-38593)).
3.2 Liquidating Trust Agreement - Capital Partners II, Ltd. Liquidating Trust
Agreement as of November 17, 2000, as amended and restated (incorporated
by reference to Exhibit 3.1 to Registrant's Form 8-K filed with the
Securities and Exchange Commission on November 21, 2000).
10.1 Liquidation Trustee Agreement - Agreement for Engaging the Services of
Thomas W. Pauken as Liquidation Trustee of Renaissance Capital Partners
II, Ltd. (incorporated by reference to Exhibit 6.1 to Partnership's
Form 10-Q for quarterly period ended September 30, 1998).
10.2 Agreement dated November 17, 2000, among Sulzer Medica USA Holding Co.
and Liquidating Trustee (incorporated by reference to Exhibit (d)(1)
to the Schedule TO filed by Sulzer Medica USA Holding Co. with respect
to the Trust on November 28, 2000).
10.3 Loan Agreement dated December 20, 2000, among Sulzer Medica USA Holding
Co. and Capital Partners II, Ltd. Liquidating Trust with respect to Tutogen
Medical, Inc. (incorporated by reference to Exhibit 99.3 to the Schedule
13D/A (Amendment No. 2) filed by Sulzer Medica USA, Inc. on
January 5, 2001).
10.4 Pledge Agreement dated December 20, 2000, among Sulzer Medica USA
Holding Co. and Capital Partners II, Ltd. Liquidating Trust with respect
to Tutogen Medical, Inc. (incorporated by reference to Exhibit 99.4 to
the Schedule 13D/A (Amendment No. 2) filed by Sulzer Medica USA, Inc.
on January 5, 2001).
21 List of subsidiaries (filed herewith).
SIGNATURES
Pursuant to the requirements of Section 13 of 15(d) of the Securities Exchange
Act of 1934, the Registrant had duly caused this report to be signed on its
behalf by the undersigned, there unto duly authorized.
Date: MARCH 15, 2002 RENAISSANCE CAPITAL PARTNERS II, LTD.
CAPITAL PARTNERS II, LTD. LIQUIDATING TRUST
(Registrant)
By: __________/s/__________________
Thomas W. Pauken
Liquidating Trustee
EXHIBIT 21
Name of Subsidiary Jurisdiction of Incorporation
____________________ ______________________________
Tutogen Medical, Inc. Florida
INDEX
CAPITAL PARTNERS II, LTD. LIQUIDATING TRUST
PAGE
Independent Auditors' Report F-1.1
Statements of Assets and Liabilities F-1.2
Statements of Investments F-1.3 through F-1.4
Statements of Operations F-1.5
Statements of Changes in Net Assets in Liquidation F-1.6
Statements of Cash Flows F-1.7
Notes to Financial Statements F-1.8 through F-1.10
SMITH, GRAY, BOYER & DANIELL, PLLC
Independent Auditors' Report
The Board of Trustees
Capital Partners II, Ltd. Liquidating Trust
We have audited the accompanying statements of assets and liabilities of
Capital Partners II, Ltd. Liquidating Trust (a Texas Liquidating Trust), as of
December 31, 2001 and 2000, including the statements of investments, as of
December 31, 2001 and 2000, and the related statements of operations, changes
in net assets in liquidation, and cash flows for the year ended December 31,
2001, and the period from November 17, 2000 (inception) to December 31, 2000.
These financial statements are the responsibility of the Trustees. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. 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 include verification and
confirmation of investments owned as of December 31, 2001 and 2000, by
examination of securities held in safekeeping for the Trust and correspondence
with the custodian. 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
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Capital Partners II, Ltd.
Liquidating Trust as of December 31, 2001 and 2000, and the results of its
operations and its cash flows for the year ended December 31, 2001, and the
period from November 17, 2000 (inception) to December 31, 2000, in conformity
with accounting principles generally accepted in the United States of America.
SMITH, GRAY, BOYER & DANIELL
A Professional Limited Liability Company
Dallas, Texas
January 24, 2002
CAPITAL PARTNERS II, LTD. LIQUIDATING TRUST
(Successor in Renaissance Capital Partners II, Ltd.)
Statements of Assets and Liabilities
December 31, 2001 and 2000
Assets 2001 2000
______ ______
Cash and cash equivalents $ 19,641 $ -0-
Investments at fair value,
cost of $35,176,143 24,149,847 32,659,416
____________ ____________
Total Assets $24,169,488 $32,659,416
============ ============
Liabilities
Liabilities:
Accounts Payable and
Accrued Expenses $ 20,436 $ 1,873
Note Payable (Note 4) 800,000 950,000
____________ ____________
Total Liabilities 820,436 951,873
____________ ____________
Net Assets in Liquidation 23,349,052 31,707,543
____________ ____________
$24,169,488 $32,659,416
============ ============
Net Assets in Liquidation per Unit of
Beneficial Interest $ 540 $ 733
============ ============
Number of Units of Beneficial
Interest Outstanding 43,250.01 43,254.01
============ ============
See accompanying notes to financial statements.
CAPITAL PARTNERS II, LTD. LIQUIDATING TRUST
(Successor in Renaissance Capital Partners II, Ltd.)
Statement of Investments
December 31, 2001
2001
__________________________________________________
Fair
Shares Cost Value
__________________________________________________
Eligible Portfolio Investments -
Common Stock(1)
Tutogen Medical, Inc. 7,904,908 $35,117,289 $24,109,969
GDI Global Data, Inc. 155,166 58,854 39,878
___________ ___________
Total Investments (2) $35,176,143 $24,149,847
=========== ===========
(1) Valued at fair value as determined by the Trustee.
(2) All portfolio securities held are non-income producing.
See accompanying notes to financial statements.
CAPITAL PARTNERS II, LTD. LIQUIDATING TRUST
(Successor in Renaissance Capital Partners II, Ltd.)
Statement of Investments
December 31, 2000
2000
__________________________________________________
Fair
Shares Cost Value
__________________________________________________
Eligible Portfolio Investments -
Common Stock(1)
Tutogen Medical, Inc. 7,904,908 $35,117,289 $32,607,746
GDI Global Data, Inc. 155,166 58,854 51,670
___________ ___________
Total Investments (2) $35,176,143 $32,659,416
=========== ===========
(1) Valued at fair value as determined by the Trustee.
(2) All portfolio securities held are non-income producing.
See accompanying notes to financial statements.
CAPITAL PARTNERS II, LTD. LIQUIDATING TRUST
(Successor in Renaissance Capital Partners II, Ltd.)
Statements of Operations
For the Year Ended December 31, 2001
and
For the Period from November 17, 2000
(inception) through December 31, 2000
2001 2000
__________________________________
Investment expenses -
Interest Expense $ 54,813 $ 1,873
General and Administrative 83,849 -0-
Trustee Fees 72,000 -0-
___________ ___________
210,662 1,873
___________ ___________
Net operating loss (210,662) (1,873)
Net unrealized depreciation
on investments (8,509,569) (3,466,727)
___________ ___________
Net decrease in net assets
from operations $(8,720,231) $(3,468,600)
============ ============
See accompanying notes to financial statements.
CAPITAL PARTNERS II, LTD. LIQUIDATING TRUST
(Successor in Renaissance Capital Partners II, Ltd.)
Statements of Changes in Net Assets in Liquidation
For the Year Ended December 31, 2001
and
For the Period from November 17, 2000
(inception) through December 31, 2000
2001 2000
__________________________________
Change in net assets resulting
from operations:
Net operating loss $ (210,662) $ (1,873)
Change in net unrealized depreciation
of portfolio investments (8,509,569) (3,466,727)
___________ ___________
Net decrease in net assets resulting
from operations (8,720,231) (3,468,600)
Change in net assets resulting from
transfer of cash assets
from Partnership 361,740 35,176,143
___________ ___________
Net increase (decrease) in net assets
for the period (8,358,491) 31,707,543
Net assets in liquidation at
beginning of period 31,707,543 -0-
___________ ___________
Net assets in liquidation at
end of period $23,349,052 $31,707,543
=========== ===========
See accompanying notes to financial statements.
CAPITAL PARTNERS II, LTD. LIQUIDATING TRUST
(Successor in Renaissance Capital Partners II, Ltd.)
Statements of Changes in Net Assets in Liquidation
For the Year Ended December 31, 2001
and
For the Period from November 17, 2000
(inception) through December 31, 2000
2001 2000
__________________________________
Cash flows from operating activities
Net decrease in net assets
from operations $(8,720,231) $(3,468,600)
Adjustments to reconcile net assets
from operations to net cash used
in operating activities:
Net unrealized (appreciation)
depreciation on investments 8,509,569 3,466,727
Increase in accounts payable and
accrued liabilities 18,563 1,873
___________ ___________
Net cash used in
operating activities (192,099) -0-
Cash flows from financing activities
Payment made on note payable (150,000) -0-
Transfer of cash assets from Partnership 361,740 -0-
___________ ___________
Net cash provided from
financing activities 211,740 -0-
___________ ___________
Net increase (decrease) in cash and
cash equivalents 19,641 -0-
Cash and cash equivalents at beginning
of period -0- -0-
___________ ___________
Cash and cash equivalents at
end of period $ 19,641 $ -0-
=========== ===========
Supplemental disclosure of cash flow
information:
Interest paid $ 50,728 $ -0-
=========== ===========
Supplemental disclosure of noncash investing transactions:
On December 17, 2000, the Partnership transferred portfolio investments at
fair market in the amount of $35,176,143 to the Trust.
On December 20, 2000, the Trust purchased 700,000 shares of common stock of
Tutogen Medical, Inc. in the amount of $950,000 through the exercise of
warrants and was funded by a note payable to Sulzer Medica USA Holding Co.
See accompanying notes to financial statements.
CAPITAL PARTNERS II, LTD. LIQUIDATING TRUST
(Successor to Renaissance Capital Partners II, Ltd.)
Notes to Financial Statements
December 31, 2001 and 2000
1. Organization and Purpose
Capital Partners II, Ltd. Liquidating Trust (the "Trust"), a liquidating trust
established under the laws of the State of Texas on November 17, 2000, is the
successor entity to Renaissance Capital Partners II, Ltd. (the "Partnership").
Pursuant to the Liquidating Trust Agreement, the Trust will terminate no later
than November 17, 2002. The Partnership, which was a Texas limited
partnership formed in 1991, was a diversified, closed-end management
investment partnership and operated as business development company under the
Investment Act of 1940. The Partnership's investment objective was to
achieve current income and capital appreciation potential by investing
primarily in private placement convertible debt investments of small and
medium size companies which the Managing General Partner believed offered the
opportunity for growth. On October 1, 1998 the Managing General Partner and
the Independent General Partners agreed to commence liquidation of the
Partnership. The Managing General Partner withdrew from the Partnership and
the Partnership appointed an independent general partner as Liquidation
Trustee (the "Trustee"). The Trustee, pursuant to a Liquidation Trustee
Agreement, assumed all responsibilities and has the authority of the Managing
General Partner.
On November 17, 2000, the limited partners of the Partnership authorized the
Trustee to transfer the investment assets of the Partnership to the Trust.
Upon formation of the Trust and transfer of investment assets to the Trust,
holders of the 43,254 limited partnership units of the Partnership,
outstanding on November 17, 2000, were deemed to become holders of 43,254
units of beneficial interest in the Trust ("Units").
2. Significant Accounting Policies
(a) Valuation of Investments
Portfolio investments are carried at fair value as determined quarterly by the
Trustee. The fair value of each publicly-held portfolio security is adjusted
to the closing public market price on the last day of the calendar quarter.
Most securities held by the Trust are thinly traded and their value does not
necessarily represent the amounts that may be realized from their immediate
sale or disposition.
(b) Federal Income Taxes
The Trust is a complete pass-through entity for federal income tax purposes
and, accordingly, is not subject to income tax. Instead, each beneficiary of
the Trust is required to take into account, in accordance with such
beneficiary's method of accounting, such beneficiary's pro rata share of the
Trust's income, gain, loss, deduction or expense, regardless of the amount or
timing of distributions to beneficiaries.
(c) Management Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
3. Trust and Management Fees
In 1998, the Partnership entered into an agreement with the Trustee, whereby
the Trustee provided management services to the Partnership in connection with
its liquidation and has continued to provide such services to the Trust during
its liquidation. For services rendered under the agreement, the Trustee
receives $6,000 per month plus up to $4,000 per month for reimbursement of
administrative personnel. Such fees have been paid in 2001 by the Partnership
on behalf of the Trust.
The Trustee serves as Chairman of the Board of Directors of Tutogen Medical,
Inc., a portfolio investment of the Trust, and the Trustee is beneficial owner
of 178,040 shares of common stock of Tutogen Medical, Inc. with stock options
to purchase an additional 130,000 shares of common stock.
4. Tender Offer and Note Payable
Sulzer Medica USA Holding Co. (the "Sulzer") entered into a tender offer
agreement (the "Tender Offer") on November 17, 2000, with the Trust to
purchase up to 21,627 units at a price of $1,387 per trust unit. Upon final
closing of the Tender Offer on December 26, 2000, Sulzer acquired 21,627 trust
units (representing 50% of the trust units outstanding at December 31, 2000)
from the beneficial owners.
In connection with the Tender Offer, the Trust purchased 700,000 shares of
common stock of Tutogen Medical, Inc. for $950,000 through the exercise of
warrants on December 20, 2000. The purchase of common stock was funded
through a loan agreement (the "loan") with Sulzer. The loan is due on
November 17, 2002 with accrued interest at the rate of one-year LIBOR as
reported in the Wall Street Journal on the date of the funding (2.3988% at
December 20, 2001) and thereafter on the anniversary date of funding. The
loan is secured by 700,000 shares of common stock of Tutogen Medical, Inc. On
November 9, 2001, principal and interest in the amount of $200,728 was paid by
the Trust. As of December 31, 2001, the remaining principal outstanding under
this loan was $800,000, plus accrued interest of $5,958.
5. Transactions with Renaissance Capital Partners II, Ltd.
The Partnership transferred to the Trust cash assets of $361,740 in 2001, and
portfolio investments at fair value of $35,176,143 in 2000.
The Partnership operating activities have been limited to pursuing claims in
litigation against parties involved in former portfolio investment positions.
During 2001, the Partnership received settlement proceeds in the amount of
$414,527, plus reimbursement of legal fees in the amount of $44,125 in
connection with a lawsuit filed on behalf of the Partnership.
A condensed summary of financial information of the Partnership as of December
31, 2001, and for the year ended December 31, 2001, is as follows:
CONDENSED STATEMENT OF OPERATIONS
Income $ 426,585
Expenses 37,961
___________
Net income (loss) $ 388,624
CONDENSED STATEMENT OF ASSETS AND LIABILITIES
Cash and cash equivalents $ 428,711
Accounts Receivable 44,125
___________
472,836
Accounts payable and
accrued liabilities 20,385
___________
Partners' equity $ 452,452