10-Q/A 1 p5q105amend.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q/A [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2005 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from N/A to N/A --- --- Commission File No. 814-82 TECHNOLOGY FUNDING VENTURE PARTNERS V, AN AGGRESSIVE GROWTH FUND, L.P. ---------------------------------------------------------------------- (Exact name of Registrant as specified in its charter) Delaware 94-3094910 ------------------------------- ---------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 1107 Investment Blvd., Suite 180 El Dorado Hills, California 95762 --------------------------------------- -------- (Address of principal executive offices) (Zip Code) (916) 941-1400 ------------------------------- (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 whether the registrant is an accelerated filer (as defined in Rule 12B-2 of the Act). Yes No X --- --- No active market for the units of limited partnership interests ("Units") exists, and therefore the market value of such Units cannot be determined. Introduction ------------ This First Amended Form 10Q is being filed because 316,624 shares converted from previously held debt during the first quarter were not reflected in the equity investment balance contained on the Balance Sheet and Statement of Investments included in the Partnership's March 31, 2005, Form 10-Q. This error also resulted in inaccurate reported increases in unrealized depreciation of equity investments and a net decrease in partners' capital resulting from operations of $126,649 contained in the Statement of Operations. The correction is reflected in the accompanying financial statements. Forward-Looking Statements -------------------------- The Private Securities Litigation Reform Act of 1995 (the Act) provides a safe harbor for forward-looking statements made by or on behalf of the Partnership. The Partnership and its representatives may from time to time make written or oral statements that are "forward-looking," including statements contained in this report and other filings with the Securities and Exchange Commission, and reports to the Partnership's shareholders and news releases. All statements that express expectations, estimates, forecasts and projections are forward-looking statements within the meaning of the Act. In addition, other written or oral statements, which constitute forward-looking statements, may be made by or on behalf of the Partnership. Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "projects," "forecasts," "may," "should," variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in or suggested by such forward-looking statements. The Partnership undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. I. FINANCIAL INFORMATION Item 1. Financial Statements BALANCE SHEETS --------------

See accompanying notes are an integral part of these financial statements. STATEMENTS OF INVESTMENTS -------------------------

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 03/31/05 and 12/31/04. The accompanying notes are an integral part of these financial statements. STATEMENTS OF OPERATIONS (unaudited) -----------------------------------

See accompanying notes are an integral part of these financial statements. STATEMENTS OF CASH FLOWS (unaudited) -----------------------------------

See accompanying notes are an integral part of these financial statements. NOTES TO FINANCIAL STATEMENTS (unaudited) ---------------------------------------- 1. Interim Financial Statements ---------------------------- The accompanying unaudited financial statements included herein have been prepared in accordance with the requirements of Form 10-Q and, therefore, do not include all information and footnotes, which would be presented, were such financial statements prepared in accordance with generally accepted accounting principles in the United States of America. These statements should be read in conjunction with the Annual Report on Form 10- K for the year ended December 31, 2004. In the opinion of the Managing General Partners, the accompanying interim financial statements reflect all adjustments necessary for the fair presentation of the financial position, results of operations, and cash flows for the interim periods presented. Allocation of income and loss to Limited and General Partners is based on cumulative income and loss. Adjustments, if any, are reflected in the current quarter balances. The results of operations for such interim periods are not necessarily indicative of results of operations to be expected for the full year or other interim periods. 2. Uncertain Future of the Partnership ----------------------------------- The uncertainties arising from the timing of future liquidation events raise substantial doubt about the Partnership's ability to continue as a going concern. The accompanying interim financial statements do not include any adjustments that might result from the outcome of these uncertainties. As a result, the Independent General Partners have tasked the Managing General Partners with examining a number of different options, including the possible early sale of some of the Partnership's private holdings. 3. 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 of America, which may not equate to tax basis accounting. The cost of investments on a tax basis at March 31, 2005, and December 31, 2004, was $15,261,585 and $15,894,365, respectively. At March 31, 2005, and December 31, 2004, gross unrealized depreciation on investments based on cost for federal income tax purposes was as follows:

4. Related Party Transactions -------------------------- Related party costs are included in investment expenses shown on the Statements of Operations. Related party costs for the three months ended March 31, 2005 and 2004, were as follows:

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. Certain reimbursable expenses have been accrued based upon interim estimates prepared by the Managing General Partners and are adjusted to actual cost periodically. There was $758,703 and $611,317 due to related parties and included in due to related parties, net at March 31, 2005, and December 31, 2004, respectively, for such reimbursable expenses. Management fees due to the Managing General Partners were $6,730 and $3,597 at March 31, 2005, and December 31, 2004, respectively, which are included in due to related parties. 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 upon their proportionate investments in the portfolio company. At March 31, 2005, the Partnership and affiliated partnerships had an indirect interest in non-transferable Sanarus Medical, Inc. and Physiometrix, Inc. options with a fair value of $264. Retention bonuses were offered to and accepted by key employees of the Managing General Partners in late 2002. The bonuses, incremented by annual salary increases, will be paid to those individuals who are still full-time employees of the Managing General Partners in April 2007. The expense for the bonus is recognized ratably over the beneficial period, October 2002 to April 2007. As of March 31, 2005, the Partnership has recognized expense of $177,243. Upon the resignation of personnel, no adjustment to the retention bonus amount previously paid by the Partnership to the Managing General Partners shall occur until a replacement person is hired. As of March 31, 2005, and December 31, 2004, the Partnership has a due from related party receivable of $743,169 and $557,337, respectively, related to its investment in Dakota Holdings, LLC and Dakota Arms, Inc. The Partnership has advanced funds to the company for operations. It is the Managing General Partners' expectation that all or a portion of this receivable will be converted into additional equity investments in Dakota Holdings or otherwise paid in cash. 5. Equity Investments ------------------ All investments are valued at fair value as determined in good faith by the Managing General Partners and in conjunction with Note 1 of the Form 10-K for the year ended December 31, 2004. Marketable Equity Securities ---------------------------- At March 31, 2005, and December 31, 2004, marketable equity securities had aggregate costs of $374,717 and $953,141, respectively, and aggregate market values of $180,324 and $507,913, respectively. The net unrealized losses at March 31, 2005, and December 31, 2004, included gross gains of $10,765 and $17,549, respectively. Restricted Securities --------------------- At March 31, 2005, and December 31, 2004, restricted securities had aggregate costs of $12,406,862 and $12,819,296, respectively, and aggregate fair values of $5,527,632 and $6,089,557, respectively, representing 91.3 percent and 84.1 percent, respectively, of the net assets of the Partnership. Significant purchases, sales and write-offs of equity investments during the quarter ended March 31, 2005, are as follows: Celera Genomics Group --------------------- In March 2005, the Partnership sold its entire holdings in the company for proceeds of $41,551 and recorded a realized loss of $99,449. iVillage Inc. ------------- In March 2005, the Partnership sold its entire holdings in the company for proceeds of $151,732 and recorded a realized loss of $669. Physiometrix, Inc. ----------------- In March 2005, the Partnership sold its entire holdings in the company for proceeds of $93,049 and recorded a loss of $191,975. OW&W Pacrim Investments Limited ------------------------------- In March 2005, the Partnership received notice that the venture capital limited partnership was terminating. The Partnership wrote off its entire investment in the venture capital limited partnership and realized a loss of $1,005. Spectrum Equity Investors, L.P. ------------------------------- In March 2005, the Partnership wrote off its investment in the venture capital limited partnership for a realized a loss of $398,080. The venture capital limited partnership terminated at December 31, 2004. The Partnership expects no return on its investment. Vencore Solutions, LLC ---------------------- In January 2005, the company converted the Partnership's three notes receivable, including accrued interest, at a cost of $444,124 and received 444,124 Series A Units. 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 included in the Partnership's December 31, 2004, Form 10-K. 6. Cash and Cash Equivalents ------------------------- Cash and cash equivalents at March 31, 2005, and December 31, 2004, consisted of:

7. Commitments and Contingencies ----------------------------- From time to time, the Partnership is a party to financial instruments with off-balance-sheet risk in the normal course of its business. Generally, these instruments are commitments for future equity fundings, venture capital limited partnership investments, equipment financing commitments, or accounts receivable lines of credit that are outstanding but not currently fully utilized. As they do not represent current outstanding balances, these unfunded commitments are not recognized in the financial statements. At March 31, 2005, the Partnership had no unfunded equity commitments. From time to time, the Partnership is subject to routine litigation incidental to the business of the Partnership. Although there can be no assurances as to the ultimate disposition of these matters and the commitments disclosed above, it is the opinion of the Managing General Partners, based upon the information available at this time and advice from legal counsel, that the expected outcome of these matters, individually or in the aggregate, will not have a material adverse effect on the results of operations and financial condition of the Partnership. 8. Financial Highlights --------------------

Pursuant to the Partnership Agreement, net profit shall be allocated first to those Partners with deficit capital account balances until such deficits have been eliminated. The net asset values shown above assume the Partnership is in liquidation. Upon liquidation, the General Partners would contribute capital equal to the amount of the General Partners' deficit. As of March 31, 2005 and December 31, 2004, the General Partners had a negative capital balance of $2,730,011 and $2,719,019, respectively. Net asset value has been calculated in accordance with the provisions of the Partnership Agreement. Item 2. 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 included in the Partnership's December 31, 2004, Form 10-K. 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 continues to experience decreases in partners' capital resulting from overall market declines and from operations. For the three months ended March 31, 2005, the Partnership incurred a net decrease in partners' capital of $1,099,237. In addition, the Partnership's liquid assets, including unrestricted marketable equity investments, are not adequate to fund ongoing operations of the Partnership for 2005. These factors, among others, raise substantial doubt about the Partnership's ability to continue as a going concern. As a result, the Independent General Partners have tasked the Managing General Partners with examining a number of different options, including the possible early sale of some of the Partnership's private holdings. The accompanying financial statements do not include any adjustments that might result from the outcome of these uncertainties. During the three months ended March 31, 2005, net cash used by operating activities totaled $530,999. The Partnership paid management fees of $9,864 to the Managing General Partners and reimbursed related parties for other investment expenses of $494,937. In addition, $15,000 was paid to the Individual General Partners as compensation for their services. The Partnership paid other investment expenses of $28,127. The Partnership received interest income of $16,929. During the three months ended March 31, 2005, the Partnership funded no equity investments. At March 31, 2005, the Partnership had no commitments to fund additional investments. Results of Operations --------------------- Current quarter compared to corresponding quarter in the preceding year ----------------------------------------------------------------------- Net decrease in partners' capital resulting from operations was $1,099,237 for the three months ended March 31, 2005, compared to a net decrease in partners' capital resulting from operations of $169,601 for the same period in 2004. During the quarter ended March 31, 2005, there were two venture capital limited partnership investment write-offs totaling $399,085. In March 2004, there were no write-offs. Net unrealized depreciation on equity investments was $7,073,623 and $7,174,967 at March 31, 2005, and December 31, 2004, respectively. During the quarter ended March 31, 2005, the Partnership recorded a decrease in net unrealized depreciation on equity investments of $101,344, compared to a decrease in unrealized depreciation of $85,461 during 2004. The decrease in depreciation in 2005 was primarily attributable to the write-off of Spectrum Equity Investors, L.P. The change in 2004 was primarily attributable to the publicly traded price of Acusphere, Inc. Total investment expenses were $522,024 for the quarter ended March 31, 2005, compared to $739,563 for the same period in 2004. The decrease was primarily due to decreased administrative and investor monitoring, which was partially offset by increased professional fees and computer service costs. There was no net unrealized depreciation on notes receivable at March 31, 2005, and December 31, 2004, respectively. During the quarter ended March 31, 2005, there was no unrealized depreciation of notes receivable. During the same period in 2004, the Partnership recorded an increase in unrealized depreciation of $645. Given the inherent risk associated with the business of the Partnership, the future performance of the portfolio company investments may significantly impact future operations. Item 4. Controls and Procedures The undersigned is responsible for establishing and maintaining disclosure controls and procedures for Technology Funding Venture Partners V, An Aggressive Growth Fund, L.P. Such officer has concluded (based upon his evaluation of these controls and procedures as of a date within 90 days of the filing of this report) that Technology Funding Venture Partners V, An Aggressive Growth Fund, L.P.'s disclosure controls and procedures are effective to ensure that information required to be disclosed by Technology Funding Venture Partners V, An Aggressive Growth Fund, L.P. in this report is accumulated and communicated to Technology Funding Venture Partners V, An Aggressive Growth Fund, L.P.'s management, including its principal executive officers as appropriate, to allow timely decisions regarding required disclosure. The certifying officer also has indicated that there were no significant changes in Technology Funding Venture Partners V, An Aggressive Growth Fund, L.P.'s internal controls or other factors that could significantly affect such controls subsequent to the date of their evaluation other than changes needed to maintain adequate separation of duties and responsibilities of personnel in the ordinary course of business, and there were no corrective actions with regard to significant deficiencies and material weaknesses. SIGNATURES ---------- Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. TECHNOLOGY FUNDING VENTURE PARTNERS V, AN AGGRESSIVE GROWTH FUND, L.P. By: TECHNOLOGY FUNDING INC. TECHNOLOGY FUNDING LTD. Managing General Partners Date: August --, 2005 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. Technology Funding Venture Partners V, An Aggressive Growth Fund, L.P. (a Delaware limited partnership) 8/16/2005 4:40 PM Page 8 of 22

TECHNOLOGY FUNDING VENTURE PARTNERS V 10-Q/A