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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For The Fiscal Year Ended December 31, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from N/A to N/A
--- ---
Commission File No. 814-124
TECHNOLOGY FUNDING MEDICAL PARTNERS I, L.P.
-------------------------------------------
(Exact name of Registrant as specified in its charter)
DELAWARE 94-3166762
- ------------------------------- ------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1035 Suncast Lane, Suite 122
El Dorado Hills, California 95762
- --------------------------------------- --------
(Address of principal executive offices) (Zip Code)
(916) 941-7550
--------------------------------------------------
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Limited
Partnership Units
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the Registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrants 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. [ ]
No active market for the Units of limited partnership interests (Units)
exists, and therefore the market value of such Units cannot be
determined.
Documents incorporated by reference: Portions of the Registrant's
Proxy Statement relating to the Registrant's Meeting of Limited
Partners held on December 8, 2000 are incorporated by reference into
Part III of this Form 10-K where indicated.
PART I
Item 1. BUSINESS
- ------ --------
Technology Funding Medical Partners I, L.P. (the Partnership or
the Registrant) is a limited partnership organized under the
laws of the State of Delaware on September 3, 1992. For the
period from September 3, 1992, through May 3, 1993, the
Partnership was inactive. The Partnership's registration
statement was declared effective by the Securities and Exchange
Commission on May 3, 1993, and the Partnership began selling
Units of limited partnership interest (Units) in May 1993. On
October 8, 1993, the minimum number of Units required to
commence Partnership operations (12,000) had been sold. The
offering terminated with 79,716 Units sold on May 3, 1995. The
Partnership's original contributed capital was $7,937,676,
consisting of $7,929,744 from Limited Partners for 79,716 Units
and $7,932 from the General Partners, Technology Funding Ltd.
(TFL) and Technology Funding Inc. (TFI). The General Partners
do not own any Units.
The principal investment objectives of the Partnership are long-
term capital appreciation from venture capital investments in
new and developing companies and preservation of Limited Partner
capital through risk management and active involvement with such
companies (portfolio companies). The Partnership's investments
in portfolio companies primarily consist of equity securities
such as common and preferred shares, but also include debt
convertible into equity securities and warrants and options to
acquire equity securities. Although venture capital investments
offer the opportunity for significant gains, such investments
involve a high degree of business and financial risk that can
result in substantial losses. Among these are the risks
associated with investment in companies in an early stage of
development or with little or no operating history, companies
operating at a loss or with substantial variations in operating
results from period to period, and companies with the need for
substantial additional capital to support expansion or to
achieve or maintain a competitive position. Such companies may
face intense competition, including competition from companies
with greater financial resources, more extensive development,
manufacturing, marketing and service capabilities, and a larger
number of qualified managerial and technical personnel. There
is no ready market for many of the Partnership's investments.
The Partnership's investments in portfolio companies are
generally subject to restrictions on sale because they were
acquired from the issuer in private placement transactions or
because the Partnership is an affiliate of the issuer.
The Partnership has elected to be a business development company
under the Investment Company Act of 1940, as amended (the Act),
and operates as a non-diversified investment company, as defined
in the Act. The Partnership Agreement provides that the
Partnership will terminate December 31, 2002, subject to the
right of the Individual General Partners to extend the term for
up to two additional two-year periods.
Item 2. PROPERTIES
- ------ ----------
The Registrant has no material physical properties.
Item 3. LEGAL PROCEEDINGS
- ------ -----------------
There are no material pending legal proceedings to which the
Registrant is party or of which any of its property is the
subject, other than routine litigation incidental to the
business of the Partnership.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------ ---------------------------------------------------
There were no matters submitted to a vote of the limited
partners during 2001.
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
- ------ -------------------------------------------------
STOCKHOLDER MATTERS
-------------------
(a) There is no established public trading market for the
Units.
(b) At December 31, 2001, there were 841 record holders
of Units.
(c) The Registrant, being a partnership, does not pay
dividends. Distributions of cash and securities,
however, may be made to the partners in the
Partnership pursuant to the Registrant's Partnership
Agreement.
Item 6. SELECTED FINANCIAL DATA
- ------ -----------------------
For the Years Ended and As of December 31,
-------------------------------------------------------
2001 2000 1999 1998 1997
------ ------ ------ ------ ------
Interest income $ 3,538 $ 114 $ 3 $ 693 $ 73,349
Dividend income 198 8,093 15,953 15,967 136
Net investment loss (598,897) (690,329) (539,268) (599,338) (480,820)
Net realized gain (loss) from
sales of equity investments 2,642,536 17,364 94,817 (331,660) 1,168
Realized losses from
impairment write-downs (162,925) (300,000) -- (299,280) --
Recoveries from investments
previously written off 87,223 -- -- -- --
Net (decrease) increase in
unrealized appreciation of
equity investments (794,482) (1,818,021) 716,138 (7,477) 1,101,284
Net increase (decrease)
in partners' capital resulting
from operations 1,173,455 (2,790,986) 271,687 (1,237,755) 621,632
Net increase (decrease) in
partners' capital resulting from
operations per Unit (1) 14.26 (34.66) 3.30 (15.37) (7.66)
Total assets 4,046,194 3,514,513 5,693,057 5,672,957 6,646,391
(1) See Notes 1 and 4 to the Financial Statements for a description of the method of calculation
of net increase (decrease) in partners' capital resulting from operations per Unit.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
- ------ -------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS
- -----------------------------------
Liquidity and Capital Resources
- -------------------------------
The Partnership operates as a business development company under
the Investment Company Act of 1940 and makes venture capital
investments in new and developing companies. The Partnership's
financial condition is dependent upon the success of the portfolio
companies. There is no ready market for many of the Partnership's
investments. It is possible that some of its venture capital
investments may be a complete loss or may be unprofitable and that
others will appear likely to become successful, but may never
realize their potential. The valuation of the Partnership's
investments in securities for which there are no available market
quotes is subject to the estimate of the Managing General Partners
in accordance with the valuation guidance described in Note 1 to
the financial statements. In the absence of readily obtainable
market values, the estimated fair value of the Partnership's
investments may differ significantly from the values that would
have been used had a ready market existed.
The Partnership Agreement provides that the Partnership will
terminate December 31, 2002, unless extended for two additional
two-year periods by the Individual General Partners. In September
2001, the Individual General Partners directed the Managing
General Partners to proceed with the earliest reasonable
termination of the Partnership after assessing the potential
return on the Partnership's investments in relation to the costs
of continued operation. The Managing General Partners are
currently exploring alternatives for termination of the
Partnership and the liquidation of its investments.
During the year ended December 31, 2001, net cash used by
operating activities totaled $1,243,100. The Partnership paid
management fees of $255,077 to the Managing General Partners and
reimbursed related parties for operating expenses of $761,784. In
addition, $38,096 was paid to the Individual General Partners as
compensation for their services. The Partnership paid other
operating expenses of $157,133 and interest on borrowings of
$32,159 and received $1,149 in interest and dividend income.
During the year ended December 31, 2001, proceeds from sales of
equity investments totaled $3,497,732 and recoveries from
investments previously written off provided cash of $87,223.
Cash and cash equivalents at December 31, 2001 were $2,378,800.
Cash reserves, and future proceeds from investment sales are
expected to be adequate to fund Partnership operations through the
next twelve months.
Results of Operations
- ---------------------
2001 compared to 2000
- ---------------------
The net increase in partners' capital resulting from operations
was $1,173,455 for the year ended December 31, 2001, as compared
to a net decrease in partners' capital resulting from operations
of $2,790,986 for the year ended December 31, 2000. The change
was primarily due to an increase in net gains from sales of equity
investments, a decrease in unrealized depreciation on equity
investments, a decrease in realized losses from impairment write-
downs on investments, decreased operating expenses and an increase
in recoveries from investments previously written off.
Net realized gains from sales of equity investments totaled
$2,642,536 and $17,364 for the years ended December 31, 2001 and
2000, respectively. The 2001 gain is attributable to the sale of
the Partnership's entire investments in Endocare, Inc.,
CareCentric Solutions, Inc. and other smaller holdings in
accordance with the directive of the Individual General Partners
in September 2001 to proceed with the earliest reasonable
termination of the Partnership.
Unrealized depreciation on equity investments was $433,074 at
December 31, 2001 and unrealized appreciation on equity
investments was $361,408 at December 31, 2000. During the year
ended December 31, 2001, the Partnership recorded a decrease in
net unrealized appreciation on equity investments of $794,482
compared to a decrease of $1,818,021 during 2000. The 2001
decrease was primarily due to the sale of the Partnership's entire
investment in Endocare, Inc. and unfavorable events and market
conditions for a portfolio company in the biotechnology industry.
The 2000 decrease was primarily attributable to decreases in the
value of the Partnership's marketable equity securities and the
fair value of the Partnership's investments in restricted
securities.
During the years ended December 31, 2001 and 2000, the Partnership
recorded realized losses from impairment write-downs of $162,925
and $300,000, respectively. The loss in 2001 represents the
Partnership's total investment in Adesso Healthcare Technology,
Inc. Adesso ceased operations in the third quarter of 2001. The
loss in 2000 represents the Partnership's total investment in
Biex, Inc. Biex, Inc. suspended operations in November 2000 after
it was unable to obtain additional funding.
Investment expenses were $602,633 and $698,536 for the years ended
December 31, 2001 and 2000, respectively. In 2000, the Managing
General Partners billed the Partnership $158,179 for operating
expenses relating to prior years that had not been fully recovered
as permitted by the Partnership Agreement. If these expenses had
been billed in prior years, investment expenses for 2000 would
have been $540,357. The increase is primarily due to increased
interest expense and increased administrative and investor
services.
Given the inherent risk associated with the business of the
Partnership, the future performance of the portfolio company
investments may significantly impact future operations.
2000 compared to 1999
- ---------------------
The net decrease in partners' capital resulting from operations
was $2,790,986 for the year ended December 31, 2000, compared to a
net increase in partners' capital resulting from operations of
$271,687 for the year ended December 31, 1999. The change was
primarily due to a decrease in unrealized appreciation on equity
investments, an increase in realized losses from impairment write-
downs on investments, increased operating expenses and a decrease
in net gains from sales of equity investments.
Unrealized appreciation on equity investments was $361,408 and
$2,179,429 at December 31, 2000 and 1999, respectively. During
the year ended December 31, 2000, the Partnership recorded a
decrease in net unrealized appreciation on equity investments of
$1,818,021 compared to an increase of $716,138 during 1999. The
2000 decrease was primarily due to decreases in the value of the
Partnership's marketable equity securities and the fair value of
the Partnership's investments in restricted securities.
During the year ended 2000, the Partnership recorded realized
losses from impairment write-downs on investments of $300,000,
which represents the Partnership's total investment in Biex, Inc.
Biex, Inc. suspended operations in November 2000 after it was
unable to obtain additional funding. There were no impairment
write-downs in 1999.
Investment expenses were $698,536 and $555,224 for the years ended
December 31, 2000 and 1999, respectively. At a meeting on
December 8, 2000, the Limited Partners approved an amendment to
the Partnership Agreement which removed the limit on reimbursement
of operational costs effective January 1, 2000. If the amendment
had not been approved, expenses in excess of the limitation would
have been $163,344 in 2000. In 2000, the Managing General
Partners billed the Partnership an additional $158,179 for
operating expenses relating to prior years that had not been fully
recovered as permitted by the Partnership Agreement. If these
expenses had been billed in prior years, investment expenses for
2000 and 1999 would have been $540,357 and $598,001, respectively.
On December 8, 2000, the Limited Partners of the Partnership
approved an amendment to the Partnership Agreement so that the
salary and benefits of a controlling person of a Managing General
Partner directly involved in carrying out the business of the
Partnership are expenses of the Partnership. This resulted in
additional operating expenses in 2000 of $6,193.
Net realized gains from sales of equity investments totaled
$17,364 and $94,817 for the years ended December 31, 2000 and
1999, respectively. The 1999 gain was primarily attributable to
the sale of Valentis, Inc., partially offset by losses on the
sales of Naiad Technologies, Inc. and CareCentric Solutions, Inc.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
- ------- ---------------------------------------------------------
The Partnership is subject to financial market risks, including
changes in interest rates with respect to its investments in debt
securities and interest bearing cash equivalents as well as
changes in marketable equity security prices. The Partnership
does not use derivative financial instruments to mitigate any of
these risks. The return on the Partnership's investments is
generally not affected by foreign currency fluctuations.
The Partnership does not have a significant exposure to modest
public market price fluctuations as the Partnership primarily
invests in private business enterprises. However, should
significant changes in market equity prices occur, there could be
a longer-term effect on valuations of private companies, which
could affect the carrying value and the amount and timing of gains
realized on these investments. Since there is typically no public
market for the Partnership's investments in private companies, the
valuation of the investments is subject to the estimate of the
Partnership's Managing General Partners. In the absence of a
readily ascertainable market value, the estimated value of the
Partnership's investments in private companies may differ
significantly from the values that would be placed on the
portfolio if a ready market existed. The Partnership's portfolio
also includes common stocks in publicly traded companies. These
investments are directly exposed to equity price risk, in that a
hypothetical ten percent change in these equity prices would
result in a similar percentage change in the fair value of these
securities. The Partnership 's investments also include some debt
securities. Since the debt securities are generally priced at a
fixed rate, changes in interest rates do not directly impact
interest income. The Partnership 's debt securities are generally
held to maturity or converted into equity securities of private
companies.
Item 8. FINANCIAL STATEMENTS
- ------ --------------------
The financial statements of the Registrant are set forth in Item
14.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
- ------ -----------------------------------------------------------
AND FINANCIAL DISCLOSURE
------------------------
None
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
- ------- --------------------------------------------------
As a partnership, the Registrant has no directors or executive
officers. The Individual General Partners are responsible for the
management and administration of the Partnership. The Individual
General Partners consist of three Independent General Partners and
a representative from each of Technology Funding Ltd., a
California limited partnership (TFL), and its wholly owned
subsidiary, Technology Funding Inc., a California corporation
(TFI). TFL and TFI are the Managing General Partners. Reference
is made to the information regarding Individual General Partners
and the Managing General Partners in the Registrant's Proxy
Statement related to the Meeting of Limited Partners held on
December 8, 2000, which information is incorporated herein by
reference.
Item 11. EXECUTIVE COMPENSATION
- ------- ----------------------
As a partnership, the Registrant has no officers or directors. In
2001, the Partnership incurred $148,024 in management fees. The
fees are designed to compensate the Managing General Partners for
general partner overhead incurred in performing management duties
for the Partnership. General partner overhead (as defined in the
Partnership Agreement) includes the General Partners' share of
rent, utilities, property taxes and the cost of capital equipment
and the general and administrative expenses paid by the Managing
General Partners in performing their obligations to the
Partnership. As compensation for their services, the Individual
General Partners each receive $6,000 annually, plus $1,000 and
related expenses for each attended meeting of the Individual
General Partners or committees thereof. For the year ended
December 31, 2001, $38,096 of such fees were paid.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
- ------- ---------------------------------------------------
MANAGEMENT
- ----------
Not applicable. No Limited Partner beneficially holds more than 5
percent of the aggregate number of Units held by all Limited
Partners, and neither the General Partners nor any of their
officers, directors or partners own any Units. The three
Individual General Partners each own 20 Units. The Individual
General Partners control the affairs of the Partnership pursuant
to the Partnership Agreement.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- ------- ----------------------------------------------
The Registrant, or its investee companies, have engaged in no
transactions with the General Partners or their officers and
partners other than as described above, in the notes to the
financial statements, or in the Partnership Agreement.
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
- ------- ------------------------------------------------------
FORM 8-K
--------
(a) List of Documents filed as part of this Annual Report on Form
10-K
(1) Financial Statements - the following financial
statements are filed as a part of this Report:
Report of Independent Public Accountants as of and
for the years ended December 31, 2001 and 2000
Independent Auditors' Report
for the year ended December 31, 1999
Balance Sheets as of December 31, 2001 and 2000
Statements of Investments as of
December 31, 2001 and 2000
Statements of Operations for the years ended
December 31, 2001, 2000 and 1999
Statements of Partners' Capital for the years ended
December 31, 2001, 2000 and 1999
Statements of Cash Flows for the years ended
December 31, 2001, 2000 and 1999
Notes to Financial Statements
(2) Financial Statement Schedules
All schedules have been omitted because they are
not applicable or the required information is
included in the financial statements or the notes
thereto.
(3) Exhibits
None
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Registrant during
the year ended December 31, 2001.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- ----------------------------------------
To the Partners of
Technology Funding Medical Partners I, L.P.:
We have audited the accompanying balance sheets of Technology Funding
Medical Partners I, L.P. (a Delaware limited partnership) (the Fund),
including the statements of investments, as of December 31, 2001 and
2000, and the related statements of operations, partners' capital, and
cash flows for the years then ended. These financial statements are the
responsibility of the Fund's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included
physical inspection of securities owned as of December 31, 2001 and 2000.
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 Technology
Funding Medical Partners I, L.P. as of December 31, 2001 and 2000, and
the results of its operations, changes in partners' capital, and its cash
flows for the years then ended in conformity with accounting principles
generally accepted in the United States.
Los Angeles, California /S/ARTHUR ANDERSEN LLP
March 15, 2002
INDEPENDENT AUDITORS' REPORT
----------------------------
The Partners
Technology Funding Medical Partners I, L.P.:
We have audited the accompanying statements of operations, partners'
capital, and cash flows of Technology Funding Medical Partners I, L.P. (a
Delaware limited partnership) for the year ended December 31, 1999.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these
financial statements based on our 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. 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 results of operations and cash
flows of Technology Funding Medical Partners I, L.P. for the year ended
December 31, 1999, in conformity with accounting principles generally
accepted in the United States of America.
Albuquerque, New Mexico /S/KPMG LLP
March 29, 2000
BALANCE SHEETS
- --------------
December 31,
-------------------
2001 2000
------ ------
ASSETS
Equity investments (cost basis of
$2,099,412 and $3,114,946 in 2001
and 2000, respectively) $1,666,338 $3,476,354
Cash and cash equivalents 2,378,800 36,945
Other assets 1,056 1,214
--------- ---------
Total assets $4,046,194 $3,514,513
========= =========
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable and accrued expenses $ 40,801 $ 46,855
Due to related parties 3,772 639,492
--------- ---------
Total liabilities 44,573 686,347
Commitments and contingencies
Partners' capital
(79,716 Limited Partner Units
outstanding) 4,001,621 2,828,166
--------- ---------
Total liabilities and partners'
capital $4,046,194 $3,514,513
========= =========
The accompanying notes are an integral part of these financial
statements
STATEMENTS OF INVESTMENTS
- -------------------------
Principal
amount or December 31, 2001 December 31, 2000
Industry shares at ----------------- -----------------
(1) Investment December 31, Cost Fair Cost Fair
Company Position Date 2001 Basis Value Basis Value
- ------------- -------- ------ ------------ ----- ----- ----- -----
Equity Investments
- ------------------
Medical/Biotechnology
- ---------------------
26.8% and 57.4% at December 31, 2001 and 2000, respectively
- -----------------------------------------------------------
Acusphere, Inc. Preferred 1995-
(a) shares 1997 340,635 $ 706,251 $ 970,810 $ 706,251 $ 970,810
Curis, Inc. Common
shares 2000 -- -- -- 27,033 20,528
Prolinx, Inc. Preferred
(a) (b) shares 2001 30,417 27,355 13,688 688,461 621,924
Prolinx, Inc. Common 1995-
(a) (b) shares 1998 197,436 688,461 88,846 -- --
Prolinx, Inc. Convertible
(a) (b) note 2000 -- -- -- 26,809 9,383
Prolinx, Inc. Preferred
(a) (b) share
warrants
at $.90;
expiring
2010) 2001 7,416 293 0 -- --
--------- --------- --------- ---------
1,422,360 1,073,344 1,448,554 1,622,645
--------- --------- --------- ---------
STATEMENTS OF INVESTMENTS (continued)
- ------------------------------------
Medical/Diagnostic Equipment
- ----------------------------
10.7% and 51.4% at December 31, 2001 and 2000, respectively
- -----------------------------------------------------------
Endocare, Inc. Common 1996-
shares 2000 -- -- -- 556,000 1,162,800
LifeCell Preferred 1996-
Corporation shares (2) 2001 2,867 247,500 229,967 247,500 141,137
LifeCell Common
Corporation share
warrant at
$4.13;
expired
2001 1996 -- -- -- 2,500 0
R2 Technology, Preferred 1994-
Inc. (a) shares 1996 117,134 134,268 197,820 134,268 148,364
--------- --------- --------- ---------
381,768 427,787 940,268 1,452,301
--------- --------- --------- ---------
Health Information Systems
- --------------------------
0.0% and 1.4% at December 31, 2001 and 2000, respectively
- ---------------------------------------------------------
Adesso Healthcare
Technology
Services, Inc. Preferred 1997-
(a) (b) shares 2000 -- -- -- 131,048 0
Adesso Healthcare
Technology
Services, Inc. Convertible
(a) (b) note 2000 -- -- -- 30,128 22,596
STATEMENTS OF INVESTMENTS (continued)
- ------------------------------------
CareCentric Common
Solutions, Inc. shares 1999 -- -- -- 94,899 15,898
--------- --------- --------- ---------
-- -- 256,075 38,494
--------- --------- --------- ---------
Pharmaceuticals
- ---------------
0.0% and 3.2% at December 31, 2001 and 2000, respectively
- ---------------------------------------------------------
Axys
Pharmaceuticals, Common
Inc. shares 2000 -- -- -- 47,000 56,250
Periodontix, Preferred 1993-
Inc. (a) shares 1996 167,000 234,000 0 234,000 35,100
--------- --------- --------- ---------
234,000 0 281,000 91,350
--------- --------- --------- ---------
Environmental
- -------------
0.0% and 0.1% at December 31, 2001 and 2000, respectively
- ---------------------------------------------------------
Triangle
Biomedical
Sciences, Common
Inc. (a) shares 1999 366 10,248 1,025 10,248 3,587
Triangle Common
Biomedical share
Sciences, warrant
Inc. (a) at $28.00;
expiring
2009 1999 366 366 37 366 128
--------- --------- --------- ---------
10,614 1,062 10,614 3,715
--------- --------- --------- ---------
STATEMENTS OF INVESTMENTS (continued)
- ------------------------------------
Venture Capital Limited Partnership Investments
- -----------------------------------------------
4.1% and 9.5% at December 31, 2001 and 2000, respectively
- ---------------------------------------------------------
Medical Science Limited
Partners II, L.P. Partnership
(a) Interests various $250,000 50,670 164,145 178,435 267,849
--------- --------- --------- ---------
50,670 164,145 178,435 267,849
--------- --------- --------- ---------
Total equity investments-41.6% and 123.0%
at December 31, 2001 and 2000, respectively $2,099,412 $1,666,338 $3,114,946 $3,476,354
========= ========= ========= =========
Legend and footnotes:
-- No investment held at end of period.
0 Investment active with a carrying value or fair value of zero.
(a) Equity security acquired in a private placement transaction; resale may be subject to
certain selling restrictions.
(b) Portfolio company is an affiliate of the Partnership; resale may be subject to certain
selling restrictions.
(1) Represents the total fair value of a particular industry segment as a percentage of
partners' capital at December 31, 2001 and 2000.
(2) The Partnership has no income-producing equity investments except for LifeCell Corporation
Preferred shares.
The accompanying notes are an integral part of these financial statements.
STATEMENTS OF OPERATIONS
- ------------------------
For the Years Ended December 31,
------------------------------------
2001 2000 1999
------ ------ ------
Investment income:
Interest income $ 3,538 $ 114 $ 3
Dividend income 198 8,093 15,953
--------- --------- -------
Total investment income 3,736 8,207 15,956
Investment expenses:
Management fees 148,024 158,597 158,597
Individual General
Partners' compensation 38,096 35,817 38,323
Administrative and
investor services 208,476 171,568 223,119
Investment operations 34,583 199,446 28,756
Computer services 54,461 39,158 40,720
Professional fees 86,834 89,712 43,071
Interest expense 32,159 4,238 22,638
--------- --------- -------
Total investment expenses 602,633 698,536 555,224
--------- --------- -------
Net investment loss (598,897) (690,329) (539,268)
--------- --------- -------
Net realized gain from
sale of equity investments 2,642,536 17,364 94,817
Realized losses from
impairment write-downs (162,925) (300,000) --
Recoveries from investments
previously written off 87,223 -- --
--------- --------- -------
Net realized income (loss) 2,566,834 (282,636) 94,817
--------- --------- -------
Net (decrease) increase in
unrealized appreciation
of equity investments (794,482) (1,818,021) 716,138
--------- --------- -------
Net increase (decrease) in
partners' capital
resulting from
operations $1,173,455 $(2,790,986) $271,687
========= ========= =======
Net increase (decrease) in
partners' capital
resulting from
operations per Unit $ 14.26 $ (34.66) $ 3.30
========= ========= =======
The accompanying notes are an integral part of these financial statements.
STATEMENTS OF PARTNERS' CAPITAL
- -------------------------------
For the years ended December 31, 2001, 2000 and 1999:
Limited General
Partners Partners Total
-------- -------- -----
Partners' capital,
January 1, 1999 $5,353,676 $(6,211) $5,347,465
Net investment loss (520,302) (18,966) (539,268)
Net realized income 91,482 3,335 94,817
Net increase in unrealized
appreciation 691,641 24,497 716,138
--------- ------ ---------
Partners' capital,
December 31, 1999 5,616,497 2,655 5,619,152
Net investment loss (683,425) (6,904) (690,329)
Net realized loss (279,810) (2,826) (282,636)
Net decrease in unrealized
appreciation (1,799,841) (18,180) (1,818,021)
--------- ------ ---------
Partners' capital,
December 31, 2000 2,853,421 (25,255) 2,828,166
Net investment loss (579,880) (19,017) (598,897)
Net realized income 2,485,330 81,504 2,566,834
Net decrease in unrealized
appreciation (768,732) (25,750) (794,482)
--------- ------ ---------
Partners' capital,
December 31, 2001 $3,990,139 $11,482 $4,001,621
========= ====== =========
The accompanying notes are an integral part of these financial statements.
STATEMENTS OF CASH FLOWS
- ------------------------
For the Years Ended December 31,
-----------------------------------
2001 2000 1999
------ ------ ------
Net increase (decrease) in
partners' capital resulting
from operations $1,173,455 $(2,790,986) $ 271,687
Adjustments to reconcile net
increase (decrease) in
partners' capital resulting
from operations to net cash
used by operating activities:
Net decrease (increase) in
unrealized appreciation
of equity investments 794,482 1,818,021 (716,138)
Net realized gain from
sales of equity investments (2,642,536) (17,364) (94,817)
Realized losses from
impairment write-downs 162,925 300,000 --
Recoveries from investments
previously written off (87,223) -- --
(Decrease) increase in accounts
payable and accrued expenses (6,054) 11,328 (3,371)
(Decrease) increase in due to
related parties (635,720) 603,761 (48,426)
Other changes, net (2,429) (280) (123)
--------- --------- -------
Net cash used by
operating activities (1,243,100) (75,520) (591,188)
--------- --------- -------
Cash flows from investing
activities:
Proceeds from sales of
equity investments 3,497,732 143,131 966,581
Purchases of equity
investments -- (224,874) --
Recoveries from investments
previously written off 87,223 -- --
Distribution from venture
capital limited partnership
investment -- 20,864 --
--------- --------- -------
Net cash provided (used)
by investing activities 3,584,955 (60,879) 966,581
--------- --------- -------
STATEMENTS OF CASH FLOWS (continued)
- -----------------------------------
For the Years Ended December 31,
-----------------------------------
2001 2000 1999
------ ------ ------
Cash flows from financing
activities:
Repayment of short-term
borrowings -- (2,646) (199,790)
--------- --------- -------
Net cash used by
financing activities -- (2,646) (199,790)
--------- --------- -------
Net increase (decrease) in
cash and cash equivalents 2,341,855 (139,045) 175,603
Cash and cash equivalents
at beginning of year 36,945 175,990 387
--------- --------- -------
Cash and cash equivalents
at end of year $2,378,800 $ 36,945 $ 175,990
========= ========= =======
The accompanying notes are an integral part of these financial statements.
NOTES TO FINANCIAL STATEMENTS
- -----------------------------
1. Summary of Significant Accounting Policies
------------------------------------------
Organization
- ------------
Technology Funding Medical Partners I, L.P. (the Partnership or the
Registrant) is a limited partnership organized under the laws of the State
of Delaware on September 3, 1992. The purpose of the Partnership is to
make venture capital investments in emerging growth companies. The
Partnership elected to be treated as a business development company under
the Investment Company Act of 1940, as amended (the Act), and operates as a
non-diversified investment company, as defined in the Act. The Managing
General Partners are Technology Funding Ltd. (TFL), and Technology Funding
Inc. (TFI), a wholly owned subsidiary of TFL. There are also three
Individual General Partners.
For the period from September 3, 1992, through May 3, 1993, the Partnership
was inactive. The Partnership's registration statement was declared
effective by the Securities and Exchange Commission on May 3, 1993, and the
Partnership began selling Units of limited partnership interest (Units) in
May 1993. On October 8, 1993, the minimum number of Units required to
commence Partnership operations (12,000) had been sold. The offering
terminated with 79,716 Units sold on May 3, 1995. The Partnership's
original contributed capital was $7,937,676, consisting of $7,929,744 from
Limited Partners for 79,716 Units and $7,932 from General Partners. The
General Partners do not own any Units. The Partnership Agreement provides
that the Partnership will continue until December 31, 2002, unless further
extended for up to two additional two-year periods from such date if the
Individual General Partners so determine or unless sooner dissolved. In
September 2001, the Individual General Partners directed the Managing
General Partners to proceed with the earliest reasonable termination of the
Partnership after assessing the potential return on the Partnership's
investments in relation to the costs of continued operation. The Managing
General Partners are currently exploring alternatives for termination of
the Partnership and the liquidation of its investments.
Preparation of Financial Statements and Use of Estimates
- --------------------------------------------------------
The accompanying financial statements have been prepared on the accrual
basis of accounting. The preparation of financial statements in conformity
with accounting principles generally accepted in the United States 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 income and expenses during the reporting period. Actual results
could differ from those estimates. Significant estimates include the
estimate of fair value of investments, liabilities and contingencies.
Because of the inherent uncertainty of valuation, the estimated fair value
of investments may differ significantly from the values that would have
been used had a ready market for investments existed, and the differences
could be material.
Equity Investments
- ------------------
Investments are carried at fair value.
Under the direction and control of the Individual General Partners, the
Managing General Partners are delegated the authority to establish
valuation procedures and periodically apply such procedures to the
Partnership's investment portfolio. In fulfilling this responsibility, the
Managing General Partners periodically update and revise the valuation
procedures used to determine fair value in order to reflect new events,
changing market conditions, more experience with investee companies or
additional information, any of which may require the revision of previous
estimating procedures.
Unrestricted publicly traded securities are valued at the closing sales
price or bid price that is available on a national securities exchange or
over-the-counter market. Valuation discounts of 5 percent to 50 percent
are applied to publicly traded securities subject to resale restrictions
resulting from Rule 144 or contractual lock-ups, such as those commonly
associated with underwriting agreements or knowledge of material non-public
information.
The fair value of all other investments is determined in good faith by the
Managing General Partners under the delegated authority of the Individual
General Partners after consideration of available relevant information.
There is no ready market for the Partnership's investments in private
companies or unregistered securities of public companies. Fair value is
generally defined as the amount the Partnership could reasonably expect to
receive for an investment in an orderly disposition based on a current
sale. Significant factors considered in the estimation of fair value
include the inherent illiquidity of and lack of marketability associated
with venture capital investments in private companies or unregistered
securities, the investee company's enterprise value established in the last
round of venture financing, changes in market conditions since the last
round of venture financing or since the last reporting period, the value of
a minority interest in the investee company, contractual restrictions on
resale typical of venture financing instruments, the investee company's
financial position and ability to obtain any necessary additional
financing, the investee company's performance as compared to its business
plan, and the investee company's progress towards initial public offering.
The values determined for the Partnership's investments in these securities
are based upon available information at the time the good faith valuations
are made and do not necessarily represent the amount which might ultimately
be realized, which could be higher or lower than the reported fair value.
At December 31, 2001 and 2000, the investment portfolio included
investments totaling $1,272,222 and $1,811,892, respectively, whose fair
values were established in good faith by the Managing General in the
absence of readily ascertainable market values. In addition, investments
in publicly traded securities which have been subjected to a discount for
legal or contractual restrictions as determined by the Managing General
Partners amounted to $0 and $1,163,312 at December 31, 2001 and 2000,
respectively. Because of the inherent uncertainty in the valuation, the
values may differ significantly from the values that would have been used
had a ready market for the securities existed, and the differences could be
material.
Venture capital limited partnership investments are valued based on the
fair value of the underlying investments. Limited partnership
distributions that are a return of capital reduce the cost basis of the
Partnership's investment. Distributions from limited partnership
cumulative earnings are reflected as realized gains by the Partnership.
In the case of an other-than-temporary decline in value below cost basis,
an appropriate reduction in the cost basis is recognized as a realized loss
with the new cost basis being adjusted to equal the fair value of the
investment. Cost basis adjustments are reflected as "Realized losses from
impairment write-downs" on the Statements of Operations.
Sales of equity investments are recorded on the trade date. The basis on
which cost is determined in computing realized gains or losses is specific
identification.
Cash and Cash Equivalents
- -------------------------
Cash and cash equivalents are principally comprised of cash invested in
demand accounts and money market instruments and are stated at cost plus
accrued interest. The Partnership considers all money market and short-
term investments with an original maturity of three months or less to be
cash equivalents.
Net Increase (Decrease) in Partners' Capital Resulting from Operations
- ----------------------------------------------------------------------
Per Unit
- --------
Net increase (decrease) in partners' capital resulting from operations per
Unit is calculated by dividing the weighted average number of Units
outstanding of 79,716 for the years ended December 31, 2001, 2000 and 1999,
into the total net increase (decrease) in partners' capital resulting from
operations allocated to the Limited Partners. The Managing General
Partners contributed 0.1 percent of total Limited Partner capital
contributions and did not receive any Partnership Units.
Provision for Income Taxes
- --------------------------
No provision for income taxes has been made by the Partnership as the
Partnership is not directly subject to taxation. The partners are to
report their respective shares of Partnership income or loss on their
individual tax returns.
The accompanying financial statements are prepared using accounting
principles generally accepted in the United States which may not equate to
tax accounting. The cost of investments on a tax basis at December 31,
2001 and 2000, was $2,290,848 and $3,187,729, respectively. At December
31, 2001 and 2000, gross unrealized depreciation and appreciation on
investments based on cost for federal income tax purposes were as follows:
December 31, December 31,
2001 2000
------------ ------------
Unrealized appreciation $ 386,084 $1,068,550
Unrealized depreciation (1,010,594) (779,925)
--------- ---------
Net unrealized (depreciation)
appreciation $ (624,510) $ 288,625
========= =========
2. Financing of Partnership Operations
-----------------------------------
The Managing General Partners expect cash received from the future
liquidation of Partnership investments and short-term borrowings will
provide the necessary liquidity to fund Partnership operations. The
Partnership may be dependent upon the financial support of the Managing
General Partners to fund operations if future proceeds are not received
timely. The Managing General Partners have committed to support the
Partnership's working capital requirements through short-term advances as
necessary.
3. Related Party Transactions
--------------------------
Included in costs and expenses are related party costs as follows:
For the Years Ended December 31,
-------------------------------
2001 2000 1999
------ ------ ------
Management fees $148,024 $158,597 $158,597
Individual General Partners'
compensation 38,096 35,817 38,323
Reimbursable operating expenses:
Administrative and investor
services 150,075 98,363 140,015
Investment operations 28,581 193,778 24,050
Computer services 54,461 39,158 40,720
Management fees are equal to 2 percent of the total Limited Partner capital
contributions for the first year of Partnership operations through the
sixth year. Beginning in the seventh year (May 2001), management fees
declined by 10 percent per year from the initial 2 percent. Management
fees compensate the Managing General Partners solely for general partner
overhead (as defined in the Partnership Agreement) incurred in supervising
the operation and management of the Partnership and the Partnership's
investments. Management fees due to the Managing General Partners were
$11,895 and $118,948 and were included in due to related parties at
December 31, 2001 and 2000, respectively.
The Partnership reimburses the Managing General Partners for certain
operating expenses incurred in connection with the business of the
Partnership. Reimbursable operating expenses paid by the Managing General
Partners include expenses (other than organizational and offering expenses
and general partner overhead) such as administrative and investor services,
investment operations, and computer services. Prior to 2000, the
Partnership Agreement stated that the Partnership could not reimburse the
Managing General Partners for certain operational costs that aggregate more
than 3 percent of total Limited Partner capital contributions. On December
8, 2000, the Limited Partners approved an amendment to the Partnership
Agreement which removed the limit on reimbursement of operational costs
effective January 1, 2000. Amounts due from related parties were $8,123 at
December 31, 2001 and amounts due to related parties were $520,544 at
December 31, 2000.
The Managing General Partners allocate operating expenses incurred in
connection with the business of the Partnership based on employee hours
incurred. In 2000, the Managing General Partners billed the Partnership an
additional $158,179 for investment management expenses consisting of
$42,777 and $115,402 for 1999 and prior years, respectively, that were
incurred by the General Partners but not previously billed to the
Partnership. Had the additional expenses been billed in prior years,
investment expenses would have been $540,357 and $598,001 for 2000 and
1999, respectively.
As compensation for their services, the Individual General Partners each
receive $6,000 annually beginning on the Commencement Date, plus $1,000 and
related expenses for each attended meeting of the Individual General
Partners or committee thereof. The three Individual General Partners each
own twenty Units.
Under the terms of a computer service agreement, Technology Administrative
Management, a division of TFL, charges the Partnership for its share of
computer support costs. These amounts are included in computer services
expenses.
Officers of the Managing General Partners occasionally receive stock
options as compensation for serving on the Boards of Directors of portfolio
companies. It is the Managing General Partners' policy that all such
compensation be transferred to the investing partnerships. If the options
are non-transferable, they are not recorded as an asset of the Partnership.
Any profit from the exercise of such options will be transferred if and
when the options are exercised and the underlying stock is sold by the
officers. Any such profit is allocated amongst the Partnership and
affiliated partnerships based on their proportionate investments in the
portfolio company. At December 31, 2001, the Partnership and affiliated
partnerships had an indirect interest in non-transferable Endocare, Inc.
options with a fair value of $213,169.
4. Allocation of Profits and Losses
--------------------------------
In accordance with the Partnership Agreement (see Note 1), net profits and
losses of the Partnership are allocated based on the beginning-of-the-year
partners' capital balances as follows:
(a) Profits:
(i) first, to those partners with deficit capital account
balances in proportion to such deficits until the deficits
have been eliminated; then
(ii) second, to the partners as necessary to offset net decrease
in partners' capital resulting from operations and sales
commissions previously allocated to such partners; then
(iii) third, 75 percent to the Limited Partners as a group in
proportion to the number of Units, 5 percent to the Limited
Partners in proportion to the Unit months of each Limited
Partner, and 20 percent to the Managing General Partners.
Unit months are the number of half months a Unit would be
outstanding if held from the date the original holder of such
Unit was deemed admitted into the Partnership until the
termination of the offering of Units.
(b) Losses:
(i) first, to the partners as necessary to offset net profit
previously allocated to the partners under (a)(iii) above
plus losses from unaffiliated venture capital limited
partnership investments; then
(ii) 99 percent to the Limited Partners as a group and 1 percent
to the Managing General Partners.
Losses allocable to Limited Partners in excess of their capital account
balances will be allocated to the Managing General Partners. Net profit
thereafter, otherwise allocable to those Limited Partners, would be
allocated to the Managing General Partners to the extent of such losses.
As indicated above, losses from unaffiliated venture capital limited
partnership investments are allocated pursuant to section (b). Gains are
allocated 99 percent to Limited Partners and 1 percent to the Managing
General Partners.
In no event shall the General Partners' interest in profits and losses be
less than 1 percent.
5. Equity Investments
------------------
All investments are valued at fair value as determined in good faith by the
Managing General Partners. See Note 1--Equity Investments.
Marketable Equity Securities
- ----------------------------
At December 31, 2001 and 2000, marketable equity securities had an
aggregate cost of $247,504 and $395,208, respectively, and an aggregate
fair value of $229,971 and $233,301, respectively. The unrealized loss at
December 31, 2001 and 2000, included gross gains of $0 and $9,250,
respectively.
Restricted Securities
- ---------------------
At December 31, 2001 and 2000, restricted securities had aggregate fair
values of $1,436,367 and $3,243,053, respectively, representing 35.9
percent and 114.7 percent, respectively, of the net assets of the
Partnership.
Significant purchases and sales of investments during the year ended
December 31, 2001 are as follows:
Adesso Healthcare Technology Services, Inc.
- -------------------------------------------
The company ceased operations during the third quarter of 2001 and the
Partnership is not expecting any returns on its investments. Preferred
shares and convertible notes totaling $162,925 were written off as of
September 30, 2001.
Axys Pharmaceuticals, Inc.
- --------------------------
In September 2001, the Partnership sold 10,000 common shares in the company
for proceeds of $34,394 and realized a loss of $12,606.
CareCentric Solutions, Inc.
- ---------------------------
In November 2001, the Partnership sold 11,839 common shares in the company
for proceeds of $12,444 and realized a loss of $82,455.
Curis, Inc.
- -----------
In September 2001, the Partnership sold 2,313 common shares in the company
for proceeds of $13,762 and realized a loss of $13,271.
deCODE Genetics, Inc.
- ---------------------
In September 2001, the Partnership sold 4,887 common shares in the company
for proceeds of $35,039 and realized a loss of $8,944.
Endocare, Inc.
- --------------
In December 2001, the Partnership sold 182,400 common shares for proceeds
of $3,299,902 and realized a gain of $2,743,902.
Inspire Pharmaceuticals, Inc.
- -----------------------------
In September 2001, the Partnership sold 9,309 common shares in the company
for proceeds of $102,191 and realized a gain of $18,410.
Periodontix, Inc.
- -----------------
The assets of the company have been acquired by Demegen, Inc. effective
July 16, 2001; the purchase price is payable in stock over an extended
period of time. Based on the December 31, 2001 closing stock price of
Demegen, the current fair value of the Partnership's investment in the
company is $0.
Prolinx, Inc.
- -------------
In May 2001, the company recapitalized and the Partnership's Preferred
shares were converted into 197,436 common shares. The Partnership also
converted a note, together with interest, totaling $27,355 into 30,417
Series A Preferred shares in conjunction with the recapitalization.
R2 Technology, Inc.
- -------------------
The company filed an S-1 Registration Statement in December 2001.
Venture Capital Limited Partnership Investments
- -----------------------------------------------
During 2001, the Partnership received stock distributions of deCODE
Genetics, Inc. and Inspire Pharmaceuticals, Inc. with fair market values
totaling $127,765. These distributions were recorded as a return of
capital.
In the year ended December 31, 2001, the Partnership recorded a $24,061
increase in fair value as a result of a net increase in the fair value of
the underlying investments of the partnership, partially offset by
decreases due to the above distributions.
Other Equity Investments
- ------------------------
Other significant changes reflected in the Statements of Investments relate
to market value fluctuations for publicly-traded portfolio companies or
changes in the fair value of private companies as determined in accordance
with the policy described in Note 1 to the financial statements.
6. Net (Decrease) Increase in Unrealized Appreciation of Equity
------------------------------------------------------------
Investments
-----------
In accordance with the accounting policy as stated in Note 1, the
Statements of Operations include a line item entitled "Net (decrease)
increase in unrealized appreciation of equity investments." The table
below discloses details of the changes:
For the Years Ended December 31,
------------------------------------
2001 2000 1999
-------- -------- --------
Unrealized (depreciation)
appreciation from cost
of marketable equity
securities $ (17,533) $ (161,907) $1,134,112
Unrealized (depreciation)
appreciation from cost of
non-marketable equity
securities (415,541) 523,315 1,045,317
--------- --------- ---------
Unrealized (depreciation)
appreciation from cost at
end of year (433,074) 361,408 2,179,429
Unrealized appreciation from
cost at beginning of year 361,408 2,179,429 1,463,291
--------- --------- ---------
Net (decrease) increase in
unrealized appreciation
of equity investments $ (794,482) $(1,818,021) $ 716,138
========= ========= =========
7. Cash and Cash Equivalents
-------------------------
Cash and cash equivalents at December 31, 2001 and 2000,
consisted of:
2001 2000
------ ------
Demand accounts $ 13,501 $36,873
Money-market accounts 2,365,299 72
--------- ------
Total $2,378,800 $36,945
========= ======
8. Short-Term Borrowings
---------------------
The Partnership had a borrowing account with a financial institution which
was secured by the Partnership's Endocare shares. The outstanding balance
of $932,778 was repaid upon the sale of these shares in December 2001. The
weighted-average interest rate for the year ended December 31, 2001 was
6.29 percent. Interest expense totaled $32,159 for the year ended December
31, 2001.
9. Commitments and Contingencies
-----------------------------
The Partnership is a party to financial instruments with off-balance-sheet
risk in the normal course of its business. Generally, these instruments
are commitments for future equity investment fundings, equipment financing
commitments, or accounts receivable lines of credit that are outstanding
but not currently fully utilized by a borrowing company. As they do not
represent current outstanding balances, these unfunded commitments are
properly not recognized in the financial statements. At December 31, 2001,
there were no unfunded investment commitments to portfolio companies and
venture capital limited partnerships.
The Partnership is involved in various claims and legal actions incident to
its operations, which in the opinion of the Managing General Partners,
based upon advice of counsel, will not materially affect the financial
position or results of operations of the Partnership.
10. Financial Highlights
--------------------
For The Years Ended December 31,
-----------------------------------
2001 2000 1999
------ ------ ------
(all amounts on a per Unit basis)
Net asset value,
beginning of period $35.79 $70.45 $67.15
Income (loss) from investment
operations:
Net investment loss (7.27) (8.57) (6.52)
Net realized and unrealized
gain (loss) on investments 21.53 (26.09) 9.82
------ ------ ------
Total from investment
operations 14.26 (34.66) 3.30
------ ------ ------
Net asset value, end of period $50.05 $35.79 $70.45
====== ====== ======
Total Return 39.84% (49.20)% 4.91%
Ratios to average net assets:
Net investment income (loss) (16.95)% (16.14)% (9.49)%
Expenses 17.61% 16.49% 10.12%
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
TECHNOLOGY FUNDING MEDICAL PARTNERS I, L.P.
By: TECHNOLOGY FUNDING INC.
TECHNOLOGY FUNDING LTD.
Managing General Partners
Date: March 20, 2002 By: /s/Charles R. Kokesh
---------------------
Charles R. Kokesh
President, Chief Executive Officer,
Chief Financial Officer and Chairman of
Technology Funding Inc. and
Managing General Partner of
Technology Funding Ltd.
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report on Form 10-K has been signed by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated:
Signature Capacity Date
--------- -------- ----
/s/Charles R. Kokesh President, Chief March 20, 2002
- ------------------------ Executive Officer,
Charles R. Kokesh Chief Financial
Officer and Chairman of
Technology Funding Inc.
and Managing General
Partner of Technology
Funding Ltd.
The above represents a majority of the Board of Directors of Technology
Funding Inc. and the General Partners of Technology Funding Ltd.