________________________________________________________
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 December 31, 2002; 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.)
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(Exact name of registrant as specified in its charter)
TEXAS 75-6590369
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(State of incorporation or organization) (I.R.S. Employer
Identification No.)
5646 Milton Street, Suite 900
Dallas, Texas 75206
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(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, 2002, there were 20,054 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, 2002, was
$12,031,302. Aggregate value of the Liquidating Trust Interests held by
affiliates as of December 31, 2002, was $15,694.
PART I
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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 fluctuations in the market price for the Trust's
remaining portfolio investment. 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 was
to terminate no later than November 17, 2002.
On November 4, 2002, the Trustee Amended the Trust to extend the term for one
year to November 17, 2003. Beneficiaries were given the option to elect out of
the Trust and receive their proportionate interests in the Trust's single
remaining portfolio investment, shares of common stock of Tutogen Medical,
Inc. ("Tutogen"). 120 beneficiaries elected to withdraw prior to the deadline
of December 19, 2002. The Trust distributed 4,230,847 shares of Tutogen
common stock to the withdrawing beneficiaries. 1,718 beneficiaries remained in
the Trust.
As of December 31, 2002, the Trustee transferred the remaining cash out of the
partnership into the Trust. As the Partnership has no remaining assets, it
dissolved as of December 31, 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.
The Partnership distributed $1,000,000 to the Limited Partners in 1998.
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 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
AMEX stock market under the symbol TTG. 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 Centerpulse USA Holding Co. (formerly
known as 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.
Following the distribution of common stock to the withdrawing beneficiaries in
December 2002, the Trust was the beneficial owner of 3,674,061 shares,
representing approximately 24.4% of the outstanding shares of Tutogen.
As of December 31, 2002, the closing price of the Tutogen stock was $3.30 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, 2002, the closing price of the GDI stock was $0.066 per
share. The Trustee has permanently written down to zero the value of the
investment due to the investment's equity risk.
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.
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, 2002.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of the Beneficiaries in 2002.
PART II
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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 Centerpulse USA Holding Co. ("Centerpulse"), formerly known as
Sulzer Medica USA Holding Co., whereby Centerpulse 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 Centerpulse, of which 21,627 units were accepted by Centerpulse on a
pro rata basis.
In the fourth quarter of 2002, the beneficiaries were given the option to
withdraw from the Trust. 120 beneficiaries elected to withdraw, representing
23,200 units. Centerpulse, who held 21,627 units of the Trust, elected to
withdraw in 2002. The remaining beneficiaries hold 20,054 units.
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, 2002, there were approximately 1,720 beneficial holders of
Trust interests.
ITEM 6. SELECTED FINANCIAL DATA
The following selected financial data for the five year period ended December
31, 2002, 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, 2002.
LIQUIDATING TRUST
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Year Ended Year Ended Period from Year Ended Year Ended
Dec 31, Dec 31, Nov 17, 2000 Dec 31, Dec 31,
2002 2001 to Dec 31, 2000 1999 1998
<s> <c> <c> <c> <c> <c>
$ $ $ $ $
Net Operating
Income (Loss) (243,389) (210,662) (1,873) -0- -0-
Net Realized Loss on
distribution of
investments (8,673,236) -0- -0- -0- -0-
Net Unrealized
appreciation
(depreciation)
on investments 6,801,823 (8,509,569) (3,466,727) -0- -0-
Net Income (loss) (2,114,802) (8,720,231) (3,468,600) -0- -0-
Income (loss) per
Trust unit (51.18) (201) (80) -0- -0-
Total Assets 12,175,602 24,169,488 32,659,416 -0- -0-
Distributions to
beneficiaries 10,154,033 -0- -0- -0- -0-
Distributions per
Trust unit 246 -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.
2002 Compared to 2001
During 2002, the Trust made no additional portfolio investments. As a result
of prior investments, the Trust incurred a net loss of $2,114,802 during the
year ended December 31, 2002, consisting of the following: (i) interest
expense of $18,963; (ii) net realized losses of $8,673,236 offset by net
unrealized appreciation of $6,801,823; (iii) Trustee fees of $72,000; and (iv)
general and administrative expenses of $152,441.
Total expenses incurred by the Trust were $243,404 in 2002, compared to
$210,662 for 2001. The Trustee has created a reserve of $50,000 along with
accruing anticipated expenses relating to final tax preparation and
termination of the Partnership.
The Trust incurred obligations to the Trustee of $72,000 for 2002.
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.
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
Not applicable.
PART III
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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 one Supervising Trustee, Robert Farone. 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.
Subsequent to Centerpulse's election to withdraw from the Trust, which ended
their ownership of any units of the Trust, David S. Wise, an officer of
Centerpulse, resigned his position as a Supervisory Trustee.
ITEM 11. EXECUTIVE COMPENSATION
Pursuant to the Liquidating Trust Agreement, the Trustee was 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, 2001 and 2002. Beginning in 2003, in connection with the one-year
extension of the term of the Trust, the Trustee agreed to defer his
compensation and will be paid only if the value of Tutogen stock has increased
by 50% or more above the closing price of $2.65, based on the market price
when the Trust is terminated or the price realized by the Trust from a sale of
Tutogen common stock, if such sale occurs before the termination of the Trust.
In that case, the Trustee will receive his regular compensation of $6,000 per
month. 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, 2002, Thomas W. Pauken, Trustee, did not directly own any
Units of the Trust. Henderson-Willis, Ltd. has ownership of 12.125 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, 2002,
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
______________________________________________________________________________
<s> <c> <c>
Thomas W. Pauken 12.125 *
Liquidation Trustee
5646 Milton St., Ste. 900
Dallas, Texas 75206
Robert C. Farone 14 *
11067 Petal St.
Dallas, TX 75238
_______
*All directors and executive 26.125 *
officers as a group (2 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
On December 19, 2002, the Trust entered into a Loan Agreement with Garvon,
Inc. Profit Sharing Plan ("Garvon"). Garvon is the holder of 9 Trust units.
Garvon agreed to fund the Trust $100,000 payable to the Trust in two
instalments of $50,000. The interest rate is 10%, with accrued interest
payable on a quarterly basis. The loan is due on December 19, 2003. The first
instalment to the Trust was funded on December 19, 2002. The Loan is secured
by 250,000 shares of common stock of Tutogen Medical, Inc. The proceeds of
the loan were used to provide additional working capital for the Trust. On
December 31, 2002, the principal and interest owed was $50,178.
PART IV
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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
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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).
3.3 Declaration of Amendment to Capital Partners II, Ltd.
Liquidating Trust Agreement (incorporated by reference to
Exhibit 99.4 to the Schedule 13D/A (Amendment No. 3) filed by
the Trust on November 15, 2002).
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 Centerpulse USA
Holding Co., formerly Sulzer Medica USA Holding Co. and
Liquidating Trustee (incorporated by reference to Exhibit
(d)(1) to the Schedule TO filed by Centerpulse USA Holding
Co. with respect to the Trust on November 28, 2000).
10.3 Loan Agreement dated December 20, 2000, among Centerpulse USA
Holding Co., formerly 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
Centerpulse USA Holding Co. on January 5, 2001).
10.4 Pledge Agreement dated December 20, 2000, among Centerpulse
USA Holding Co., formerly 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
Centerpulse USA Holding Co. on January 5, 2001).
10.5 Loan Agreement dated December 19, 2002, among Garvon, Inc.
Profit Sharing Plan and Capital Partners II, Ltd. Liquidating
Trust.
21 List of portfolio investments (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 28, 2003 RENAISSANCE CAPITAL PARTNERS II, LTD.
CAPITAL PARTNERS II, LTD. LIQUIDATING TRUST
(Registrant)
By: ________/s/_________________
Thomas W. Pauken
Liquidating Trustee
CERTIFICATION REQUIRED BY RULES 13a-14 AND 15d-14
UNDER THE SECURITIES EXCHANGE ACT OF 1934
I, Thomas W. Pauken, certify that:
1. I have reviewed this annual report on Form 10-K of Capital Partners II,
Ltd. Liquidating Trust;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, is made known to us, particularly
during the period in which this annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. I have disclosed, based on our most recent evaluation, to the registrant's
auditors and the board of trustees (or persons performing the equivalent
function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls;
and
6. I have indicated in this annual report whether or not there were
significant changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of our most
recent evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.
Dated: March 28, 2003 _____/s/________________
Thomas W. Pauken
Liquidating Trustee
CERTIFICATION OF PERIODIC REPORT
I, Thomas W. Pauken, Liquidating Trustee of Capital Partners II, Ltd.
Liquidating Trust (the "Trust"), certify, pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:
(1) the Annual Report on Form 10-K of the Trust for the year ended December
31, 2002 (the "Report") fully complies with the requirements of Section 13(a)
or 15(d) of the Securities Exchange Act of 1934; and
(2) the information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Trust.
Dated: March 28, 2003 ________/s/_____________
Thomas W. Pauken
Liquidating Trustee
EXHIBIT 10.5
PROMISSORY NOTE WITH COLLATERAL AGREEMENT
$50,000 December 19,
2002
FOR VALUE RECEIVED, the undersigned, THOMAS W. PAUKEN, Trustee for the
CAPITAL PARTNERS II, LTD. Liquidating Trust, hereby promises and agrees to pay
to the order of GARVON, INC., Profit Sharing Plan, at 5646 Milton Street,
Suite 900, Dallas County, Texas, or such other place as the holder hereof may
at any time or from time to time designate in writing, the principal sum of
FIFTY THOUSAND and NO/100 DOLLARS ($50,000) with interest on the unpaid
balance of said principal sum from the date hereof to maturity at the rate of
Ten percent (10%) per annum.
This note is payable as follows: Interest shall be due and payable
quarterly as it accrues, with the first installment due and payable on March
19, 2003, and an additional installment of interest due and payable on the
19th day of June, September, and December 2003, when the entire amount hereof,
principal and interest then remaining unpaid, shall be then due and payable.
Any past due amounts shall bear interest at the rate of Fifteen percent (15%)
per annum. Notwithstanding the foregoing term and installments of interest,
the Holder has the option to declare the Note due and payable in full at any
time after December 19, 2003, by giving the Maker thirty (30) days prior
written notice.
The undersigned reserves the right to prepay part or all of the principal
of this Note prior to maturity, with interest to date of prepayment, without
penalty. Any and all amounts prepaid shall be applied first to unpaid accrued
interest to the date of such prepayment and then to the reduction of the
principal of this Note in the inverse order of maturity.
For the purposes of securing the holder in the payment of this Note, when
due, the undersigned hereby pledges, transfers, and delivers to said Holder
the following property:
TWO HUNDRED FIFTY THOUSAND (250,000) shares of common stock of Tutogen
Medical, Inc. in the name of Capital Partners II, Ltd. Liquidating
Trust, Thomas W. Pauken, Trustee.
The undersigned further agrees with said Holder as follows:
(1) That this pledge shall be in no way affected by any indulgence,
extension, change in the form, evidence, maturity, rate of interest or
otherwise of any of the debts or obligations secured under this instrument,
not by want of presentment, notice, protest, suit or indulgence upon any of
such obligations secured under by this instrument.
(2) That, upon failure of the undersigned to keep and perform any
agreement herein contained or in case of the involvency of the undersigned,
said Holder may, at Holder's option, at once mature all debts and liabilities
hereby secured.
(3) That, upon failure to keep and perform any agreement herein
contained, said Holder is authorized and empowered, without either demand,
advertisement, or notice of any kind, to sell at public or private sale, the
whole or any part of the securities held by said Holder in pledge hereunder,
and transfer and deliver same to the purchaser or purchasers thereof, and
receive the proceeds of sale. Said Holder to have the same right to purchase
at said sale as a stranger. Sale of part of securities held in pledge
hereunder shall not exhaust the power of sale, but sales may be made from time
to time until all securities are sold, or debts and liabilities hereby secured
paid in full. Said Holder shall receive the proceeds of such sale or sales,
which shall be paid and credited on said debts and liabilities then secured
hereby, said Holder to have option of application thereof. Any surplus after
payment in full of said debts and liabilities shall be paid to the
undersigned.
Maker warrants that the Trust Agreement contains no provision which would
prohibit this Loan or which would restrict the Holder in any way in the
collection of the indebtedness evidenced by this Note.
This instrument and all rights and powers hereunder, together with the
securities held in pledge hereunder, may be transferred and assigned by Holder
at such time and upon such terms as Holder may deem advisable, and such
assignee shall succeed to all the rights and powers of Holder hereunder.
The Holder of the Note may extend time of payment, either before or after
maturity, accept partial payment, accept security, exchange, or release
security, or accept additional security, without hereby changing or releasing
the liability of the undersigned or any other parties now or hereafter liable
hereon, all of whom hereby waive presentment, diligence in collecting or
bringing suit against any party hereto.
Notwithstanding any provision of this Note, the total liability for
payment of interest shall not exceed the applicable limits of the statutes of
the State of Texas, and all such provisions of this Note shall be deemed to be
hereby modified accordingly. In the event this Note is placed in the hands of
an attorney for collection or suit is filed hereon or if proceedings are had
in bankruptcy, receivership, reorganization or other legal or judicial
proceedings for the collection hereof, the undersigned hereby agrees to pay
the reasonable and actual attorney's fees of the Holder.
EXECUTED this 19th day of December, 2002.
______/s/_______________
Thomas W. Pauken, Trustee
Capital Partners II, Ltd.
Liquidating Trust
EXHIBIT 21
Name of Portfolio Investment 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
December 31, 2002 and 2001 F-1.2
Statements of Investments
December 31, 2002 and 2001 F-1.3 through F-1.4
Statements of Operations
For the Years Ended December 31, 2002 and 2001
For the Period from November 17, 2000
(inception) to December 31, 2000 F-1.5
Statements of Changes in Net Assets in Liquidation
For the Years Ended December 31, 2002 and 2001
For the Period from November 17, 2000
(inception) to December 31, 2000 F-1.6
Statements of Cash Flows
For the Years Ended December 31, 2002 and 2001
For the Period from November 17, 2000
(inception) to December 31, 2000 F-1.7
Notes to Financial Statements
December 31, 2002, 2001 and 2000 F-1.8 through F-1.11
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, 2002 and 2001, including the statements of investments, as of
December 31, 2002 and 2001, and the related statements of operations, changes
in net assets in liquidation, and cash flows for the years ended December 31,
2002 and 2001 and for 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, 2002 and 2001, by
examination of securities held in safekeeping for the Trust and correspondence
with the custodians. 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, 2002 and 2001, and the results of its
operations and its cash flows for the years ended December 31, 2002 and 2001
and for 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 22, 2003
CAPITAL PARTNERS II, LTD. LIQUIDATING TRUST
(Successor to Renaissance Capital Partners II, Ltd.)
Statements of Assets and Liabilities
December 31, 2002 and 2001
2002 2001
-------- --------
<s> <c> <c>
Assets
Cash and cash equivalents $ 51,201 $ 19,641
Investments at fair value, cost of
$16,348,874 in 2002, and $35,176,143
in 2001 12,124,401 21,149,847
------------ ------------
Total Assets $ 12,175,602 $ 24,169,488
============ ============
Liabilities
Liabilities
Accounts payable and accrued expenses $ 78,606 $ 20,436
Notes payable (Note 5) 50,000 800,000
------------ ------------
Total Liabilities 128,606 820,436
------------ ------------
Contingency (Note 3)
Net assets in liquidation 12,046,996 23,349,052
------------ ------------
$ 12,175,602 $ 24,169,488
============ ============
Net assets in liquidation per unit
of beneficial interest $ 601 $ 540
============ ============
Number of units of beneficial
interest outstanding 20,054 43,254
============ ============
See accompanying notes to financial statements.
CAPITAL PARTNERS II, LTD. LIQUIDATING TRUST
(Successor to Renaissance Capital Partners II, Ltd.)
Statement of Investments
December 31, 2002
2002
-----------------------------------------------
Shares Cost Fair Value
-----------------------------------------------
<s> <c> <c> <c>
Eligible Portfolio Investments -
Common Stock (1)
Tutogen Medical, Inc. 3,674,061 $ 16,348,874 $ 12,124,041
GDI Global Data, Inc. 155,166 -0- -0-
------------ ------------
Total Investments (2) $ 16,348,874 $ 12,124,401
============ ============
(1) Valued at fair value as determined by the Trustee.
(2) All portfolio securities held are non-income producing.
See accompanying note to financial statements.
CAPITAL PARTNERS II, LTD. LIQUIDATING TRUST
(Successor to Renaissance Capital Partners II, Ltd.)
Statement of Investments
December 31, 2001
2001
-----------------------------------------------
Shares Cost Fair Value
-----------------------------------------------
<s> <c> <c> <c>
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 note to financial statements.
CAPITAL PARTNERS II, LTD. LIQUIDATING TRUST
(Successor to Renaissance Capital Partners II, Ltd.)
Statements of Operations
For the Years Ended December 31, 2002 and 2001
and
For the Period from November 17, 2000 (inception) to December 31, 2000
2002 2001 2000
----------- ----------- -----------
<s> <c> <c> <c>
Income -
Interest Income $ 15 $ -0- $ -0-
Investment expenses -
Interest expense 18,963 54,813 1,873
General and administrative 152,441 83,849 -0-
Trustee fees 72,000 72,000 -0-
------------ ------------ ------------
243,404 210,662 1,873
------------ ------------ ------------
Net operating loss (243,389) (210,622) (1,873)
Net realized loss on distribution
of investments (8,673,236) -0- -0-
Net unrealized appreciation
(depreciation) on investments 6,801,823 (8,509,569) (3,466,727)
------------ ------------ ------------
Net decrease in net assets
from operations $ (2,114,802) $ (8,720,231) $ (3,468,600)
============ ============ ============
See accompanying notes to financial statements.
CAPITAL PARTNERS II, LTD. LIQUIDATING TRUST
(Successor to Renaissance Capital Partners II, Ltd.)
Statements of Changes in Net Assets in Liquidation
For the Years Ended December 31, 2002 and 2001
and
For the Period from November 17, 2000 (inception) to December 31, 2000
2002 2001 2000
----------- ----------- -----------
<s> <c> <c> <c>
Change in net assets resulting
from operations:
Net operating loss $ (243,389) $ (210,662) $ (1,873)
Change in net assets resulting
from net realized loss on
distribution of investment (8,376,236) -0- -0-
Change in net unrealized
appreciation (depreciation) of
portfolio investments 6,801,823 (8,509,569) (3,466,727)
------------ ------------ ------------
Net decrease in net assets
resulting from operations (2,114,802) (8,720,231) (3,468,600)
Change in net assets resulting
from distribution of
investments to withdrawing
beneficiaries (10,154,033) -0- -0-
Change in net assets resulting
from contribution of capital
from Centerpulse 512,738 -0- -0-
Change in net assets resulting
from transfer of cash assets
from Partnership 454,043 361,740 35,176,143
------------ ------------ ------------
Net increase (decrease) in
net assets for the period (11,302,054) (8,358,491) 31,707,543
Net assets in liquidation at
beginning of period 23,349,052 31,707,543 -0-
------------ ------------ ------------
Net assets in liquidation at
end of period $ 12,046,998 $ 23,349,052 $ 31,707,543
============ ============ ============
See accompanying notes to financial statements.
CAPITAL PARTNERS II, LTD. LIQUIDATING TRUST
(Successor to Renaissance Capital Partners II, Ltd.)
Statements of Cash Flows
For the Years Ended December 31, 2002 and 2001
and
For the Period from November 17, 2000 (inception) to December 31, 2000
2002 2001 2000
----------- ----------- -----------
<s> <c> <c> <c>
Cash flows from operating
activities
Net decrease in net assets
from operations $ (2,114,802) $ (8,720,231) $ (3,468,600)
Adjustments to reconcile net assets
from operations to net cash used
in operating activities:
Net realized loss on
distribution of investment 8,673,236 -0- -0-
Net unrealized (appreciation)
depreciation on investments (6,801,823) 8,509,569 3,466,727
Increase in accounts payable
accrued liabilities 70,906 18,563 1,873
------------ ------------ ------------
Net cash used in operating
activities (172,483) (192,099) -0-
Cash flows from financing activities
Proceeds from note payable 50,000 -0- -0-
Payment made on note payable (300,000) (150,000) -0-
Transfer of cash assets from
Partnership 454,043 361,740 -0-
------------ ------------ ------------
Net cash provided from financing
activities 204,043 211,740 -0-
------------ ------------ ------------
Net increase (decrease) in cash
and cash equivalents 31,560 19,641 -0-
Cash and cash equivalents at
beginning of period 19,641 -0- -0-
------------ ------------ ------------
Cash and cash equivalents at
end of period $ 51,201 $ 19,641 $ -0-
============ ============ ============
Supplemental disclosure of cash flow information:
Interest paid $ 12,007 $ 50,728 $ -0-
============ ============ ============
Supplemental disclosure of noncash investing transactions:
Transfer of investments at
fair value from Partnership $ -0- $ -0- $ 35,176,143
============ ============ ============
Purchase of investments funded
by note payable $ -0- $ -0- $ 950,000
============ ============ ============
Contribution of capital from
Centerpulse $ 512,738 $ -0- $ -0-
============ ============ ============
Distribution of investments to
Beneficiaries $(10,154,033) $ -0- $ -0-
============ ============ ============
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, 2002, 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, 2003, as amended. 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"). The Partnership was
dissolved on December 31, 2002.
2. Significant Accounting Policies
(a) 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.
The cost of investments and net realized gains or losses from investment
transactions are determined on the specific identification method.
(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. Effective January 1, 2003, the Trustee will defer
his compensation of $6,000 per month and will be paid only if the value of
Tutogen stock has increased by 50% or more above the closing price of $2.65,
based on the market price when the Trust is terminated or the price realized
by the Trust from a sale of Tutogen common stock, if such sale occurs before
the termination 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 140,000 shares of common stock.
4. Notes Payable
(a) Tender Offer and Note Payable to Centerpulse USA Holding Co.
Centerpulse USA Holding Co. ("Centerpulse") (formerly known as Sulzer Medica
USA Holding Co.) 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, Centerpulse 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 Centerpulse. The loan was 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 was secured by 700,000 shares of common stock of Tutogen Medical, Inc.
During 2002, the Trust paid $300,000 and Centerpulse contributed the remaining
loan balance of $500,000 to capital in connection with an agreement to
contribute $512,738 to the Trust for working capital purposes.
(b) Note Payable with Garvon, Inc. Profit Sharing Plan
On December 19, 2002, the Trust entered into a Loan Agreement with Garvon,
Inc. Profit Sharing Plan ("Garvon"). Garvon is the holder of 9 units of
beneficial interest in the Trust. Garvon agreed to loan the Trust up to
$100,000 in two instalments of $50,000 with collateral up to 500,000 shares of
Tutogen common stock. The loan bears interest at the rate of 10%, payable
quarterly and is due on December 19, 2003. At December 31, 2002, the Trust had
borrowed $50,000, collateralized with 250,000 shares of Tutogen common stock.
The proceeds of the loan were used to provide working capital for the Trust.
5. Distributions to Beneficiaries
On November 4, 2002, the Trustee amended the Trust to extend the term of the
Trust to November 17, 2003. The Beneficiaries were given the option to
withdraw from the Trust and receive shares of common stock of Tutogen Medical,
Inc. in proportion to their interest in the Trust. 120 Beneficiaries elected
to withdraw.
The Trust distributed 4,230,847 shares of common stock of Tutogen Medical,
Inc. to withdrawing beneficiaries at a price of $2.40 per share, aggregating
$10,154,033. The valuation of the distribution resulted in a net realized
loss of $8,673,236.
6. Transactions with Renaissance Capital Partners II, Ltd.
The Partnership transferred to the Trust cash assets of $454,043 and $361,740
in 2002 and 2001, respectively, 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. The Partnership
was dissolved on December 31, 2002.
A condensed summary of financial information of the Partnership as of December
31, 2002 and 2001, and for the years ended December 31, 2002, 2001 and 2000,
is as follows:
Condensed Statement of Operations
2002 2001 2000
---- ---- ----
<s> <c> <c> <c>
Income $ 7,356 $ 426,585 $ 67,214
Expenses 5,765 37,961 331,185
------------ ----------- -----------
Operating (loss) income $ 1,591 $ 388,624 $ (263,971)
------------ ----------- -----------
Net unrealized appreciation
on investments $ -0- $ -0- $18,245,037
Net realized gain
on investments -0- -0- 923,046
Investment gain -0- -0- 19,168,083
------------ ----------- -----------
Net income $ 1,591 $ 388,624 $18,904,111
============ =========== ===========
Condensed Statement of Assets and Liabilities
2002 2001
---- ----
<s> <c> <c>
Cash and cash equivalents $ -0- $ 428,711
Accounts Receivable -0- 44,125
------------- -----------
-0- 472,836
Accounts payable and
accrued liabilities -0- 20,385
------------- -----------
Partners' equity $ -0- $ 452,452
============= ===========