10-Q 1 wtvq303.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended September 30, 2003 Or [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission file number 0-16208 WESTFORD TECHNOLOGY VENTURES, L.P. -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 13-3423417 -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 17 Academy Street, 5th Floor Newark, New Jersey 07102-2905 -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (973) 624-2131 Not applicable -------------------------------------------------------------------------------- Former name, former address and former fiscal year, if changed since last report 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 ____ WESTFORD TECHNOLOGY VENTURES, L.P. INDEX PART I. FINANCIAL INFORMATION Item 1. Financial Statements. Balance Sheets as of September 30, 2003 (Unaudited) and December 31, 2002 Schedule of Portfolio Investments as of September 30, 2003 (Unaudited) Statements of Operations for the Three and Nine Months Ended September 30, 2003 and 2002 (Unaudited) Statements of Cash Flows for the Nine Months Ended September 30, 2003 and 2002 (Unaudited) Statement of Changes in Partners' Capital for the Nine Months Ended September 30, 2003 (Unaudited) Notes to Financial Statements (Unaudited) Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Item 3. Quantitative and Qualitative Disclosure about Market Risk. Item 4. Controls and Procedures. PART II. OTHER INFORMATION Item 1. Legal Proceedings. Item 2. Changes in Securities. Item 3. Defaults upon Senior Securities. Item 4. Submission of Matters to a Vote of Security Holders. Item 5. Other Information. Item 6. Exhibits and Reports on Form 8-K. Signatures PART I - FINANCIAL INFORMATION Item 1. Financial Statements. WESTFORD TECHNOLOGY VENTURES, L.P. BALANCE SHEETS September 30, 2003 December 31, (Unaudited) 2002 ASSETS Portfolio investments at fair value (cost of $1,409,565 as of September 30, 2003 and $7,798,952 as of December 31, 2002) $ 288,314 1,061,035 Cash and cash equivalents 8,914 47,031 Accrued interest receivable 4 92,100 --------------- ---------------- TOTAL ASSETS $ 297,232 $ 1,200,166 =============== ================ LIABILITIES AND PARTNERS' CAPITAL Liabilities: Accounts payable and accrued expenses $ 42,625 $ 34,587 Due to Management Company 76,304 76,304 Due to Independent General Partners 3,750 3,750 --------------- ---------------- Total liabilities 122,679 114,641 --------------- ---------------- Partners' Capital: Managing General Partner 12,825 240,564 Individual General Partners 457 2,659 Limited Partners (11,217 Units) 1,282,522 7,580,219 Unallocated net unrealized depreciation of investments (1,121,251) (6,737,917) --------------- ---------------- Total partners' capital 174,553 1,085,525 --------------- ---------------- TOTAL LIABILITIES AND PARTNERS' CAPITAL $ 297,232 $ 1,200,166 =============== ================ See notes to financial statements.

WESTFORD TECHNOLOGY VENTURES, L.P. SCHEDULE OF PORTFOLIO INVESTMENTS (Unaudited) September 30, 2003 Initial Investment Investment Description Date Cost Fair Value Spectrix Corporation* (a) Infrared data transfer technology for networks 2,216,626 shares of Series B Preferred Stock Nov. 1989 $ 435,000 $ 35,000 8% Demand Notes 65,000 65,000 --------- ----------- 500,000 100,000 -------------------------------------------------------------------------------------------------------------------------------- Thunderbird Technologies, Inc.* (b) Designer of high performance, low power integrated circuit products 788,796 shares of Series A Preferred Stock Oct. 1992 788,796 2,324 Convertible Demand Notes at Prime 120,769 185,990 --------- ----------- 909,565 188,314 -------------------------------------------------------------------------------------------------------------------------------- TOTAL PORTFOLIO INVESTMENTS (c) $ 1,409,565 $ 288,314 =========== ===========

(a) On September 30, 2003, the Partnership wrote-off $4,966,098 of the $5,466,098 cost of its investment in Spectrix Corporation, realizing a net loss of $4,966,098. (b) Subsequent to the end of the quarter, in November 2003, the Management Company made a $7,500 non-interest bearing advance to the Partnership and the Partnership completed a follow-on financing in Thunderbird Technologies, Inc., acquiring 20,926,339 shares of the company's Series C preferred stock. In connection with the financing, face value of the Partnership's demand notes due from the company were exchanged for shares of Series B preferred stock and the related interest on such notes was waived. As a result, the Partnership wrote-off the accrued interest on such notes of $30,560 as of September 30, 2003. (c) In September 2003, the Partnership sold its holdings of Inn-Room Systems, Inc. for $15,000, realizing a loss of $1,408,289. * May be deemed an affiliated person of the Partnership as defined by the Investment Company Act of 1940. See notes to financial statements. WESTFORD TECHNOLOGY VENTURES, L.P. STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2003 2002 2003 2002 -------------- ------------- -------------- ------------ INVESTMENT INCOME AND EXPENSES Income: Interest from short-term investments $ 8 $ 514 $ 101 $ 2,531 Interest income from portfolio investments - 2,915 - 8,871 Reversal of interest income from portfolio investments (30,560) - (92,064) - -------------- --------------- ------------- --------------- Total investment (loss) income (30,552) 3,429 (91,963) 11,402 -------------- --------------- ------------- --------------- Expenses: Management fee - 37,500 - 112,500 Professional fees 8,186 15,182 45,100 46,976 Mailing and printing 1,192 15,404 10,720 24,604 Independent General Partners' fees - 2,500 - 10,000 Other expenses 1,800 1,927 5,468 5,017 -------------- --------------- ------------- --------------- Total expenses 11,178 72,513 61,288 199,097 -------------- --------------- ------------- --------------- NET INVESTMENT LOSS (41,730) (69,084) (153,251) (187,695) Realized loss from portfolio investments (6,374,387) - (6,374,387) - -------------- --------------- ------------- --------------- NET REALIZED LOSS FROM OPERATIONS (6,416,117) - (6,527,638) - Change in unrealized depreciation of investments 5,653,136 (2,976,430) 5,616,666 (2,976,430) -------------- --------------- ------------- --------------- NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (762,981) $ (3,045,514) $ (910,972) $ (3,164,125) ============== =============== ============= ===============

See notes to financial statements. WESTFORD TECHNOLOGY VENTURES, L.P. STATEMENTS OF CASH FLOWS (Unaudited) For the Nine Months Ended September 30, 2003 2002 ---------------- -------------- CASH FLOWS FROM OPERATING ACTIVITIES Net decrease in net assets from operations $ (910,972) $ (3,164,125) Adjustments to reconcile net decrease in net assets from operations to cash used for operating activities: Realized loss from portfolio investments 6,374,387 - Change in unrealized depreciation of investments (5,616,666) 2,976,430 Decrease (increase) in accrued interest receivable 92,096 (8,526) Increase (decrease) in payables, net 8,038 (77,614) -------------- ---------------- Cash used for operating activities (53,117) (273,835) -------------- ---------------- CASH FLOWS FROM INVESTING ACTIVITIES Cost of portfolio investments purchased - (60,000) Net proceeds from the sale of portfolio investments 15,000 - -------------- ---------------- Cash provided from (used for) investing activities 15,000 (60,000) -------------- ---------------- Decrease in cash and cash equivalents (38,117) (333,835) Cash and cash equivalents at beginning of period 47,031 489,710 -------------- ---------------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 8,914 $ 155,875 ============== ================

See notes to financial statements. WESTFORD TECHNOLOGY VENTURES, L.P. STATEMENT OF CHANGES IN PARTNERS' CAPITAL (Unaudited) For the Nine Months Ended September 30, 2003 Unallocated Managing Individual Net Unrealized General General Limited Depreciation of Partner Partners Partners Investments Total Balance at beginning of period $ 240,564 $ 2,659 $ 7,580,219 $ (6,737,917) $ 1,085,525 Net investment loss (19,748) (48) (133,455) - (153,251) Net realized loss from portfolio investments (207,991) (2,154) (6,164,242) - (6,374,387) Change in net unrealized depreciation of investments - - - 5,616,666 5,616,666 ------------ --------- --------------- --------------- --------------- Balance at end of period $ 12,825 $ 457 $ 1,282,522(A) $ (1,121,251) $ 174,553 ============ ========= =============== =============== =============== (A) The net asset value per unit of limited partnership interest, including an assumed allocation of net unrealized depreciation of investments, is approximately $15 as of September 30, 2003.

See notes to financial statements. WESTFORD TECHNOLOGY VENTURES, L.P. NOTES TO FINANCIAL STATEMENTS (Unaudited) 1. Organization and Purpose Westford Technology Ventures, L.P. (the "Partnership") is a Delaware limited partnership formed on September 3, 1987. WTVI Co., L.P., the managing general partner of the Partnership (the "Managing General Partner") and two individuals (the "Individual General Partners") are the general partners of the Partnership. Hamilton Capital Management Inc. (the "Management Company") is the general partner of the Managing General Partner and the management company of the Partnership. The Partnership began its principal operations on December 1, 1988. The Partnership's objective is to achieve long-term capital appreciation by making venture capital investments in new and developing companies and other special investment situations. The Partnership will not engage in any other business or activity. The Partnership dissolved on December 31, 2002, as a result of the completion of the final extension of its term allowable by the Partnership Agreement. However, pursuant to the Partnership Agreement and Delaware Law, the Managing General Partner will continue to manage the Partnership though its date of liquidation (the "Liquidation Period"), which will occur when it has satisfied all liabilities and obligations to creditors and has sold, distributed or otherwise disposed of its investments in portfolio companies. 2. Significant Accounting Policies Valuation of Investments - Short-term investments are carried at amortized cost, which approximates market. Portfolio investments are carried at fair value, as determined quarterly by the Managing General Partner under the supervision of the Individual General Partners. Publicly held portfolio securities are valued at the closing public market price on the valuation date discounted by a factor ranging from 0% to 50% for sales restrictions. Factors considered in the determination of an appropriate discount include, underwriter lock-up or Rule 144 trading restrictions, insider status where the Partnership either has a representative serving on the Board of Directors or is greater than a 10% shareholder, and other liquidity factors such as the size of the Partnership's position in a given company compared to the trading history of the public security. Privately held portfolio securities are valued at cost until significant developments affecting the portfolio company provide a basis for change in valuation. The fair value of private securities is adjusted to reflect 1) meaningful third-party transactions in the private market or 2) significant progress or slippage in the development of the company's business such that cost is no longer reflective of fair value. As a venture capital investment fund, the Partnership's portfolio investments involve a high degree of business and financial risk that can result in substantial losses. The Managing General Partner considers such risks in determining the fair value of the Partnership's portfolio investments. All investments are shown at fair value, which have been estimated by the Managing General Partner in the absence of readily ascertainable market values and are no different than their estimated liquidation basis. Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") 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. WESTFORD TECHNOLOGY VENTURES, L.P. NOTES TO FINANCIAL STATEMENTS (Unaudited), continued Investment Transactions - Investment transactions are recorded on the accrual method. Portfolio investments are recorded on the trade date, the date the Partnership obtains an enforceable right to demand the securities or payment therefore. Realized gains and losses on investments sold are computed on a specific identification basis. Income Taxes - No provision for income taxes has been made since all income and losses are allocable to the Partners for inclusion in their respective income tax returns. The Partnership's net assets for financial reporting purposes differ from its net assets for tax purposes. As of September 30, 2003, net unrealized depreciation of approximately $1.1 million and realized losses from portfolio investments of approximately $6.4 million were recorded for financial statement purposes but have not been recognized for tax purposes. Additionally, as of September 30, 2003, other timing differences relating to the sale of Units totaling $1.2 million were charged to partners' capital on the financial statements but have not been deducted or charged against partners' capital for tax purposes. Cash Equivalents - The Partnership considers all highly liquid debt instruments (primarily money market funds) to be cash equivalents. 3. Allocation of Partnership Profits and Losses The Partnership Agreement provides that the Managing General Partner will be allocated, on a cumulative basis over the life of the Partnership, 20% of the Partnership's aggregate investment income and net realized gains from venture capital investments, provided that such amount is positive. All other gains and losses of the Partnership are allocated among all the Partners, including the Managing General Partner, in proportion to their respective capital contributions to the Partnership. 4. Related Party Transactions The Management Company is responsible for the management and administrative services necessary for the operation of the Partnership. For these services, the Management Company received a management fee through December 31, 1999 at an annual rate of 2.5% of the gross capital contributions to the Partnership (net of selling commissions and organizational expenses paid by the Partnership), reduced by capital distributed and realized losses, with a minimum fee of $200,000 per annum. The Management Company voluntarily agreed to reduce the minimum management fee payable by the Partnership to $150,000 per annum, effective January 1, 2000, and received such fee through the Partnership's dissolution effective December 31, 2002. As a result of the Partnership's dissolution, the Management Company will receive no additional management fees other than amounts accrued and unpaid as of September 30, 2003 totaling $76,304. From inception of the Partnership to December 31, 1998, each of the Independent General Partners received an annual fee of $10,000 and $1,000 for each meeting of the Independent General Partners attended, plus out-of-pocket expenses. Effective January 1, 1999, the annual fee paid to each Independent General Partner was reduced to $5,000 and, effective January 1, 2000, the Independent General Partners voluntarily waived all future meeting fees. As a result of the death of two of the Independent General Partners in 2002, the Partnership has only one Independent General Partner. As a result of the Partnership's dissolution, the remaining Independent General Partner will receive no additional fees other than amounts accrued and unpaid as of September 30, 2003 totaling $3,750. WESTFORD TECHNOLOGY VENTURES, L.P. NOTES TO FINANCIAL STATEMENTS (Unaudited), continued 5. Classification of Portfolio Investments As of September 30, 2003, the Partnership's portfolio investments were categorized as follows: Percentage of Investment Type Cost Fair Value Net Assets* --------------- --------------- --------------- ------------- Preferred Stock $ 1,344,065 $ 37,324 21.38% Debt Securities 65,000 250,990 143.79% ---------------- -------------- -------- Total $ 1,409,565 $ 288,314 165.17% ================ ============== ======== Country/Geographic Region Midwestern U.S. $ 500,000 $ 100,000 57.29% Eastern U.S. 909,565 188,314 107.88% ---------------- -------------- -------- Total $ 1,409,565 $ 288,314 165.17% ================ ============== ======== Industry Wireless Communications $ 500,000 $ 100,000 57.29% Semiconductors 909,565 188,314 107.88% ---------------- -------------- -------- Total $ 1,409,565 $ 288,314 165.17% ================ ============== ======== * Represents fair value as a percentage of net assets.

6. Interim Financial Statements The interim financial data as of September 30, 2003 and for the nine months ended September 30, 2003 is unaudited and prepared in accordance with GAAP for interim financial information and in accordance with the requirements of Form 10-Q. In the opinion of Partnership, the interim data includes all adjustments consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods. Reference should be made to the annual financial statements, including footnotes thereto, included in our annual report on Form 10-K for the year ended December 31, 2002. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. ------------------------------------------------------------------ Liquidity and Capital Resources The Partnership dissolved on December 31, 2002, as a result of the completion of the final extension of its term allowable by the Partnership Agreement. However, pursuant to the Partnership Agreement and Delaware Law, the Managing General Partner will continue to manage the Partnership though its date of liquidation (the "Liquidation Period"), which will occur when it has satisfied all liabilities and obligations to creditors and has sold, distributed or otherwise disposed of its investments in portfolio companies. The Partnership is pursuing the liquidation of its remaining portfolio investments as soon as practicable. In this regard, during the quarter ended September 30, 2003, the Partnership sold its investment in Inn-Room Systems, Inc. back to the company for $15,000, resulting in a net realized loss of $1,408,289. As of September 30, 2003, the Partnership held $8,914 in an interest-bearing cash account. The Partnership earned $8 and $101 of interest from such cash account for the three and nine months ended September 30, 2003. Interest earned from the Partnership's cash balances and short-term investments, if any, in future periods is subject to fluctuations in short-term interest rates and changes in amounts available for investment in such securities. Subsequent to the end of the quarter, in November 2003, the Management Company made a $7,500 non-interest bearing advance to the Partnership and the Partnership completed a follow-on financing in Thunderbird Technologies, Inc., acquiring 20,926,339 shares of the company's Series C preferred stock. In connection with the financing, face value of the Partnership's demand notes due from the company were exchanged for shares of Series B preferred stock and the related interest on such notes was waived. As a result, the Partnership wrote-off the accrued interest on such notes of $30,560 as of September 30, 2003. As of September 30, 2003, the Partnership's current liabilities of $122,679, including $76,304 due to the Management Company and $3,750 due to the Independent General Partner, exceeded the current cash balance of $8,914. Funds needed to cover the Partnership's current liabilities, and future operating expenses are expected to be obtained from existing cash balances and proceeds from the sale of the Partnership's remaining portfolio investments. As of September 30, 2003, the Partnership had two remaining portfolio investments with an estimated fair value of $288,314. Critical Accounting Policies and Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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. The most significant accounting estimate affecting the Partnership's net asset value and results of operations is the determination of the estimated fair value of each of the Partnership's portfolio investments as of the end of each accounting period. The Partnership has adopted a valuation policy that has been approved by the Independent General Partners and has been consistently applied by the Managing General Partner since the inception of the Partnership. In particular, the valuation of the Partnership's privately-held securities requires estimates that could result in material differences to the fair value of such securities and the net asset value of the Partnership, if a market for such privately-held securities existed. The Partnership's valuation policy is more fully described in Note 2 of Notes to Financial Statements, included in Part I, Item 1 of this report. As of September 30, 2003, the financial statements include investments valued at $288,314, respectively, representing 165.17% of partners' capital. Such values have been estimated by the Managing General Partner, as described above, and do not necessarily represent the amounts that might ultimately be realized, since such amounts depend on future circumstances and cannot be determined until the individual investments are actually liquidated. Results of Operations Investment Income and Expenses - Net investment loss for the three months ended September 30, 2003 and 2002 was $41,730 and $69,084, respectively. The favorable change in net investment loss for the 2003 period as compared to the same period in 2002 resulted from a $61,335 reduction in operating expenses offset by a $33,981 decrease in investment income. The decrease in operating expenses for the 2003 period compared to the same period in 2002 includes a $40,000 reduction from the elimination of the management fee and fees paid to the Independent General Partner, as discussed below. Additionally, in order to conserve cash during 2003, the independent public accountants for the Partnership did not review the Partnership's quarterly reports on Form 10-Q and the Partnership has not issued reports to limited partners for the quarterly periods ended June 30, 2003 and September 30, 2003. The decrease in investment income for the period primarily resulted from the reversal of accrued interest receivable during the quarter ended September 30, 2003 on demand notes due from Thunderbird Technologies, Inc. totaling $30,560. The principal balance of such demand notes was exchanged for shares of Series B preferred stock of Thunderbird Technologies and the related interest was waived in connection with a restructuring and new financing of the company completed in November 2003. Net investment loss for the nine months ended September 30, 2003 and 2002 was $153,251 and $187,695, respectively. The favorable change in net investment loss for the 2003 period as compared to the same period in 2002 is comprised of a $137,809 decrease in operating expenses offset by a $103,365 decrease in investment income. The decrease in operating expenses for the 2003 period compared to the same period in 2002 includes a $122,500 reduction from the elimination of the management fee and fees paid to the Independent General Partner, as discussed below. Additionally, in order to conserve cash during 2003, the independent public accountants for the Partnership did not review the Partnership's quarterly reports on Form 10-Q and the Partnership has not issued reports to limited partners for the quarterly periods ended June 30, 2003 and September 30, 2003. The decrease in investment income for the period primarily resulted from the reversal of accrued interest receivable of $27,994 and $64,070 relating to the demand notes due from Thunderbird Technologies and Inn-Room Systems, Inc., respectively. The accrued interest due from Thunderbird Technologies was written-off on September 30, 2003 in connection with a refinancing of the company completed in November 2003, as discussed above. The accrued interest due from Inn-Room Systems was written-off on March 31, 2003 resulting from the sale of the Partnership's investment back to the company, which was completed in September 2003. The Management Company is responsible for the management and administrative services necessary for the operation of the Partnership. For these services, the Management Company received a management fee through December 31, 1999 at an annual rate of 2.5% of the gross capital contributions to the Partnership (net of selling commissions and organizational expenses paid by the Partnership), reduced by capital distributed and realized losses, with a minimum fee of $200,000 per annum. However, the Management Company voluntarily agreed to reduce the minimum management fee payable by the Partnership to $150,000 per annum, effective January 1, 2000, and received such fee through the Partnership's dissolution effective December 31, 2002. Additionally, as a result of the Partnership's dissolution, the Management Company will receive no additional management fees other than amounts accrued and unpaid as of September 30, 2003 totaling $76,304. As a result, the management fee was $0 and $37,500 for the three months ended September 30, 2003 and 2002, respectively. The management fee was $0 and $112,500 for the nine months ended September 30, 2003 and 2002, respectively. From inception of the Partnership to December 31, 1998, each of the Independent General Partners received an annual fee of $10,000 and $1,000 for each meeting of the Independent General Partners attended, plus out-of-pocket expenses. Effective January 1, 1999, the annual fee paid to each Independent General Partner was reduced to $5,000 and, effective January 1, 2000, the Independent General Partners voluntarily waived all future meeting fees. As a result of the death of two of the Independent General Partners in 2002, the Partnership has only one Independent General Partner. As a result of the Partnership's dissolution, the remaining Independent General Partner will receive no additional fees other than amounts accrued and unpaid as of September 30, 2003 totaling $3,750. To the extent possible, the management fee and other expenses incurred directly by the Partnership are paid with funds provided from operations. Funds provided from operations primarily are obtained from interest received from short-term investments, income earned from portfolio investments and proceeds received from the sale of portfolio investments. Realized Gains and Losses from Portfolio Investments - For the three and nine months ended September 30, 2003, the Partnership had a net realized loss from its portfolio investments of $6,374,387. During the quarter ended September 30, 2003, the Partnership sold its investment in Inn-Room Systems, Inc. back to the company for $15,000, resulting in a net realized loss of $1,408,289. Additionally, during the quarter ended September 30, 2003, the Partnership wrote-off $4,966,098 of the $5,466,098 cost of its investment in Spectrix Corporation, realizing a net loss of $4,966,098, reflecting the General Partner's assessment of the permanent impairment to the cost of its investment in Spectrix. Unrealized Gains and Losses and Changes in Unrealized Depreciation of Portfolio Investments - For the nine months ended September 30, 2003, the Partnership had a $5,616,666 reduction in net unrealized depreciation of investments. This change included the reversal of $6,374,387 of unrealized depreciation relating to the sale its investment in Inn-Room Systems and the partial write-off of the cost of its investment in Spectrix Corporation, as discussed above. This amount was partially offset by a $36,470 downward revaluation of the Partnership's investment in Inn-Room Systems, Inc. on March 31, 2003 and a $721,251 downward revaluation of the Partnership's investment in Thunderbird Technologies, Inc. as of September 30, 2003. The downward revaluation of the Partnership's investment in Thunderbird Technologies resulted from a capital restructuring and new financing of the company completed in November 2003 at a significantly reduced valuation. Net Assets - As of September 30, 2003, the Partnership's net assets were $174,553 as compared to net assets of $1,085,525 as of December 31, 2002. This decrease in net assets reflects the decrease in net assets from operations for the nine month period of $910,972, comprised of the $6,527,638 net realized loss from operations exceeding the $5,616,666 favorable change in net unrealized depreciation of investments for the nine months ended September 30, 2003. As of September 30, 2002, the Partnership's net assets were $2,715,403 as compared to net assets of $5,879,528 as of December 31, 2001. This decrease in net assets reflects the decrease in net assets from operations for the nine month period of $3,164,125, comprised of the $2,976,430 unfavorable change in net unrealized depreciation of investments and the $187,695 net investment loss for the nine months ended September 30, 2002. Gains and losses from investments are allocated to the Partners' capital accounts when realized in accordance with the Partnership Agreement (see Note 3 of Notes to Financial Statements). However, for purposes of calculating the net asset value per unit of limited partnership interest ("Unit"), net unrealized appreciation or depreciation of investments has been included as if it had been realized and allocated to the Limited Partners in accordance with the Partnership Agreement. Pursuant to such calculation, the net asset value per $1,000 Unit as of September 30, 2003 and December 31, 2002 was approximately $15 and $96, respectively. Item 3. Quantitative and Qualitative Disclosures about Market Risk. ----------------------------------------------------------- The Partnership is subject to market risk arising from changes in the value of its portfolio investments, short-term investments and interest-bearing cash equivalents, which may result from fluctuations in interest rates and equity prices. The Partnership has calculated its market risk related to its holdings of these investments based on changes in interest rates and equity prices utilizing a sensitivity analysis. The sensitivity analysis estimates the hypothetical change in fair values, cash flows and earnings based on an assumed 10% change (increase or decrease) in interest rates and equity prices. To perform the sensitivity analysis, the assumed 10% change is applied to market rates and prices on investments held by the Partnership at the end of the accounting period. The Partnership's portfolio investments had an aggregate fair value of $288,314 as of September 30, 2003. An assumed 10% decline from this fair value, including an assumed 10% decline of the per share market prices of the Partnership's publicly-traded securities, would result in a reduction to the fair value of such investments and a corresponding unrealized loss of $28,831. The Partnership had no short-term investments as of September 30, 2003. Market risk relating to the Partnership's interest-bearing cash equivalents held as of September 30, 2003 is considered to be immaterial. Item 4. Controls and Procedures. The Registrant has established disclosure controls and procedures to ensure that material information is made known to Jeffrey Hamilton, the Chief Executive Officer and the Chief Financial Officer of the Registrant, by others involved with the activities of the Registrant during the preparation of the Registrant's periodic reports. The Registrant maintains disclosure controls and procedures designed to ensure that information required to be disclosed in the Registrant's filings under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. The Registrant's Chief Executive Officer and Chief Financial Officer have evaluated, with the participation of the Registrant's management, the effectiveness of the Registrant's disclosure controls and procedures as of the end of the period covered by this report. Based on such evaluation, the Registrant's Chief Executive Officer and Chief Financial Officer concluded that the Registrant's disclosure controls and procedures are effective. Additionally, no changes have been made to the controls and procedures of the Registrant subsequent to the date of the most recent evaluation made by Mr. Hamilton that could have a significant affect on the Registrant's internal controls. PART II - OTHER INFORMATION Item 1. Legal Proceedings. The Partnership is not a party to any material pending legal proceedings. Item 2. Changes in Securities. None. Item 3. Defaults Upon Senior Securities. None. Item 4. Submission of Matters to a Vote of Security Holders. --------------------------------------------------- None. Item 5. Other Information. None. Item 6. Exhibits and Reports on Form 8-K. 1. Exhibits: a) 31.1 Certification of chief executive officer and chief financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 c) 32.1 Certification of chief executive officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 d) 32.2 Certification of chief financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 2. Reports on Form 8-K: None SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant, in the capacities, and on the date indicated. WESTFORD TECHNOLOGY VENTURES, L.P. By: WTVI Co., L.P. its managing general partner By: Hamilton Capital Management Inc. its general partner By: /s/ Jeffrey T. Hamilton ------------------------------------------------ Jeffrey T. Hamilton President, Secretary and Director (Principal Executive Officer and Principal Financial and Accounting Officer) of Hamilton Capital Management Inc. and Individual General Partner of Westford Technology Ventures, L.P. Date: November 19, 2003

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