DRAFT: 6.8.02




                                GMULOT DELTA FUND, L.P.


                            INTERIM FINANCIAL ...
ERNST &
                                                        Kost Forer & Gabbay                  Phone: 972-3-6232525
...
GMULOT DELTA FUND, L.P.

BALANCE SHEETS
U.S. dollars in thousands


                                                      ...
GMULOT DELTA FUND, L.P.

STATEMENTS OF OPERATIONS
U.S. dollars in thousands


                                           S...
GMULOT DELTA FUND, L.P.

STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL ACCOUNTS
U.S. dollars in thousands


                 ...
GMULOT DELTA FUND, L.P.

 STATEMENTS OF CASH FLOWS
 U.S. dollars in thousands


                                          ...
GMULOT DELTA FUND, L.P.

NOTES TO FINANCIAL STATEMENTS


NOTE 1:- GENERAL

        a.   Gmulot Delta Fund L.P. ("the Partn...
GMULOT DELTA FUND, L.P.

NOTES TO FINANCIAL STATEMENTS


NOTE 3:- VENTURE CAPITAL INVESTMENTS

        a.   The venture ca...
GMULOT DELTA FUND, L.P.
NOTES TO FINANCIAL STATEMENTS

NOTE 3:- VENTURE CAPITAL INVESTMENTS (cont.)

        b.   Below ar...
GMULOT DELTA FUND, L.P.
NOTES TO FINANCIAL STATEMENTS


NOTE 3:- VENTURE CAPITAL INVESTMENTS (cont.)

                    ...
Upcoming SlideShare
Loading in...5
×

808a62602054b74d0aa7..

271

Published on

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
271
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
2
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

808a62602054b74d0aa7..

  1. 1. DRAFT: 6.8.02 GMULOT DELTA FUND, L.P. INTERIM FINANCIAL STATEMENTS AS OF JUNE 30, 2002 U.S. DOLLARS IN THOUSANDS UNAUDITED INDEX Page Review Report of Unaudited Interim Financial Statements 2 Balance Sheets 3 Statements of Operations 4 Statements of Changes in Partners’ Capital Accounts 5 Statements of Cash Flows 6 Notes to Financial Statements 7 - 10 ----------
  2. 2. ERNST & Kost Forer & Gabbay Phone: 972-3-6232525 3 Aminadav St. Fax: Tel-Aviv 67067, 972-3-5622555 Israel YOUNG The Partners Gmulot Delta Fund, L.P. Re: Review report of unaudited interim financial statements as of and for the six months and three months ended June 30, 2002 At your request, we have reviewed the accompanying interim balance sheets of Gmulot Delta Fund, L.P. as of June 30, 2002, and the related interim statements of operations, changes in the Partner's capital accounts and cash flows for the six months and three months then ended. Our review was made in accordance with the procedures prescribed by the Institute of Certified Public Accountants in Israel, and included, inter-alia, reading the aforementioned interim financial statements, reading the minutes of meetings of the partners and their committees and making inquiries of certain officers responsible for financial and accounting matters. The foregoing procedures do not constitute an examination made in accordance with generally accepted auditing standards, and are limited in scope. Therefore, we do not express an opinion on the interim financial statements. In the course of our review, nothing came to our attention as a result of our review that would indicate that material changes of the interim financial statements are required in order that they may be considered prepared in accordance with generally accepted accounting principles. Tel-Aviv, Israel KOST FORER & GABBAY August 7, 2002 A Member of Ernst & Young Global -2-
  3. 3. GMULOT DELTA FUND, L.P. BALANCE SHEETS U.S. dollars in thousands June 30, December 31, 2002 2001 2001 Unaudited Audited ASSETS CURRENT ASSETS: Cash and cash equivalents 766 666 908 Accounts receivable - 3 - 766 669 908 VENTURE CAPITAL INVESTMENTS 1,914 1,149 1,150 OTHER ASSETS: Deferred expenses 46 52 49 2,726 1,870 2,107 LIABILITIES AND PARTNERS’ CAPITAL ACCOUNTS CURRENT LIABILITIES: Accounts payable 133 158 13 PARTNERS' CAPITAL ACCOUNTS 2,593 1,712 2,094 2,726 1,870 2,107 The accompanying notes are an integral part of the financial statements. August 7, 2002 Date of approval of the financial statements Ben Harel Director -3-
  4. 4. GMULOT DELTA FUND, L.P. STATEMENTS OF OPERATIONS U.S. dollars in thousands Six months ended Three months ended Year ended June 30, June 30, December 31, 2002 2001 2002 2001 2001 Unaudited Audited Gain (loss) on venture capital investments - (33) - 4 (33) Interest from venture capital investments 4 - 4 - 6 Impairment in value of investments - - - - (125) General and administrative expenses *) (90) (90) (45) (45) (181) Financial income (expenses), net (20) 2 (3) 17 (11) Loss for the period (106) (121) (44) (24) (344) *) Mainly management fees of $ 83 to Delta Ventures Ltd. (December 31, 2001 - $ 167 and June 30, 2001 - $ 83). The accompanying notes are an integral part of the financial statements. -4-
  5. 5. GMULOT DELTA FUND, L.P. STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL ACCOUNTS U.S. dollars in thousands General Limited partner partners Total Balance as of January 1, 2001 (audited) 18 1,819 1,837 Capital contributions 6 600 606 Tax withholdings - (5) (5) Loss for the period (3) (341) (344) Balance as of December 31, 2001 (audited) 21 2,073 2,094 Capital contributions 6 600 606 Tax withholdings - (1) (1) Loss for the period (1) (105) (106) Balance as of June 30, 2002 (unaudited) 26 2,567 2,593 Balance as of January 1, 2001 (audited) 18 1,819 1,837 Tax withholdings - (4) (4) Loss for the period (1) (120) (121) Balance as of June 30, 2001 (unaudited) 17 1,695 1,712 Balance as of April 1, 2002 (unaudited) 20 2,012 2,032 Capital contributions 6 600 606 Tax withholdings - (1) (1) Loss for the period - (44) (44) Balance as of June 30, 2002 (unaudited) 26 2,567 2,593 Balance as of April 1, 2001 (unaudited) 17 1,723 1,740 Tax withholdings - (4) (4) Loss for the period - (24) (24) Balance as of June 30, 2001 (unaudited) 17 1,695 1,712 The accompanying notes are an integral part of the financial statements. -5-
  6. 6. GMULOT DELTA FUND, L.P. STATEMENTS OF CASH FLOWS U.S. dollars in thousands Six months ended Three months ended Year ended June 30, June 30, December 31, 2002 2001 2002 2001 2001 Unaudited Audited Cash flows from operating activities: Loss for the period (106) (121) (44) (24) (344) Adjustments to reconcile loss to net cash used in operating activities: Interest from venture capital investments (4) - (4) - (6) Amortization of deferred expenses 3 3 1 1 6 Realized loss (gain) on venture capital investments - 33 - (4) 33 Impairment in value of investments - - - - 125 Decrease in accounts receivable - 4 - 4 3 Increase (decrease) in accounts payable (2) 4 (4) 2 3 Net cash used in operating activities (109) (77) (51) (21) (180) Cash flows from investing activities: Venture capital investments (638) (246) (343) (196) (510) Proceeds from venture capital investments - - - - 4 Net cash used in investing activities (638) (246) (343) (196) (506) Cash flows from financing activities: Capital contributions 606 - 606 - 606 Tax withholdings (1) (4) (1) (4) (5) Net cash provided by (used in) financing activities 605 (4) 605 (4) 601 Increase (decrease) in cash and cash equivalents (142) (327) 211 (221) (85) Cash and cash equivalents at the beginning of the period 908 993 555 887 993 Cash and cash equivalents at the end of the period 766 666 766 666 908 Significant non-cash activities: Venture capital investments 122 144 73 119 - Proceeds from sale of investments - 4 - 4 - The accompanying notes are an integral part of the financial statements. -6-
  7. 7. GMULOT DELTA FUND, L.P. NOTES TO FINANCIAL STATEMENTS NOTE 1:- GENERAL a. Gmulot Delta Fund L.P. ("the Partnership") was established and commenced its operations in January 2000. The Partnership is one of the four partnerships that comprise the Delta Ventures Fund ("The Fund"). The four partnerships are as specified below: 1. Gmulot Delta Fund L.P. - an Israeli Partnership (9.80%); 2. Delta Fund I (Israel) L.P. - an Israeli Partnerships (4.39%); 3. Poalim Delta Fund L.P. - an Israeli Partnerships (4.90%); 4. Delta Fund I, L.P. - a Cayman Islands Partnership (80.91%). b. The Fund held its final closing on October 6, 2000, with a total capital commitment of $ 62 million. The total capital of the partnership amounts to $ 6 million. According to the limited partnership agreement, the partners will generally make investments in portfolio companies on a pro-rata basis, in proportion to their respective aggregate commitments. As of balance sheet date, the General Partner has called 55% of the total capital commitments. c. These financial statements have been prepared as of June 30, 2002 and for the six months and three months periods then ended. NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES a. Interim financial statements: The interim financial statements as of June 30, 2002 and for the six months and three months periods then ended ("the interim statements") were prepared in a condensed form, in accordance with generally accepted accounting principles applicable to interim statements. The interim statements do not include all the information and explanation required for annual financial statements. b. Data regarding the changes in the exchange rate of the dollar during the reported period: Exchange rate Period ended of U.S. $ 1 June 30, 2002 NIS 4.769 June 30, 2001 NIS 4.165 December 31, 2001 NIS 4.416 Increase during the six months ended: June 30, 2002 8.0% June 30, 2001 3.1% Increase during the year ended: December 31, 2001 9.3% -7-
  8. 8. GMULOT DELTA FUND, L.P. NOTES TO FINANCIAL STATEMENTS NOTE 3:- VENTURE CAPITAL INVESTMENTS a. The venture capital investments are composed as follows (as of June 30, 2002, the Partnership’s share in the Fund's investments is 9.80%): December 31, June 30, 2002 (unaudited) 2001 (audited) The The Partnership The Fund Partnership Share in Shares Share rights Cost of Cost of Fair Number of issuable to in rights fully diluted Cost of investment investment value shares held (1) the Fund Voting and earnings investment U.S. dollars Number of U.S. dollars in thousands shares % in thousands TDNet Ltd. 192 1,959 1,959 3,762 - 32.18 31.26 189 Buyerforce Inc. (2) 104 1,059 1,059 2,811,946 - 28.77 20.80 103 ABN Global Inc. (3) - - - - - - - - Cast-Up Inc. (4) 74 750 750 1,071 189 31.80 29.03 74 Optun Inc. 268 2,732 3,677 422,900 - 28.57 21.63 268 Broadlight Inc. 225 2,300 2,300 2,862,475 - 16.94 14.29 225 49 500 500 Convertible - - - - loan E4X Inc. 115 1,175 1,175 821,673 67,918 22.54 17.91 98 Appilog Inc. 193 1,970 1,970 197,000 - 23.73 19.13 193 Chiaro Networks Ltd. 294 3,000 3,000 3,750,001 - 1.75 1.46 - Redux Inc. 196 2,000 2,000 485,437 - 11.43 10.53 - Provigent Inc. 204 2,082 2,082 1,452,693 - 11.96 10.10 - 1,914 19,527 20,472 1,150 (1) Most of the shares held by the Fund are Preferred and convertible to Ordinary shares. The Preferred shares confer on the Fund special rights, mainly veto rights on certain decisions and priority rights upon liquidation. (2) After write-down of $ 51 thousand (the Fund - $ 524), 33% provision for impairment in value of the investment. (3) After write-down of $ 163 thousand (the Fund - $ 1,667), provision for impairment in value of the investment. (4) After write-down of $ 74 thousand (the Fund - $ 750), 50% provision for impairment in value of the investment. -8-
  9. 9. GMULOT DELTA FUND, L.P. NOTES TO FINANCIAL STATEMENTS NOTE 3:- VENTURE CAPITAL INVESTMENTS (cont.) b. Below are details pertaining to the principles used by the Company in determining the fair value of the investments: Non-marketable investments: Non-marketable investments are valued by the Fund manager and are based, among other things, on the last capital activity made in the companies in which the Fund invested in issuance of shares, conversion of debentures into shares and issuance of rights or same activity effected close to the date the financial statements were prepared, as well as an updated follow-up of the partnership's development by the Fund manager. Preferred shares are valued by the Fund manager on the basis of their conversion ratio into Ordinary shares, excluding the added value in respect of preference in voting or upon liquidation. Non-marketable options which are held by the Fund and others are valued based on their cost adjusted to the changes in the exchange rate of the U.S. dollar. The valuation does not include the tax effect resulting from the increase or the decrease in the value of the investments. It should not be concluded from the valuation principles set above that the transactions on which the estimate of the Fund manager is based are identical in all terms to transactions that the Fund was a party to and which are the subject of the investments which were valued. Further, it should not be concluded that the estimated amount as determined reflects a price that is expected to be received upon the realization of the investments. c. Changes in the investments in companies until June 30, 2002 are as follows: 1. Buyerforce Inc. ("Buyerforce") In February 2002, the Fund has converted the $ 500 thousand convertible loan (plus the accrued interest) granted to Buyerforce into 951,069 series A Preferred shares. Following the conversion of the convertible loan, the Fund's holding in Buyerforce is 20.80%, on a fully diluted basis. 2. Broadlight Inc. ("Broadlight") In March 2002, the Fund has granted a $ 500 thousand convertible loan bearing annual interest equal to six months LIBOR + 2%. The loan is convertible into equity in Broadlight within 12 months. 3. TDNet Ltd. ("TDNet") In June 2002, the Fund has converted the $ 1,000 thousand convertible loan (plus the accrued interest) granted to TDNet into 2,034 series A Preferred shares. Following the conversion of the convertible loan, the Fund's holding in TDNet is 31.26%, on a fully diluted basis. -9-
  10. 10. GMULOT DELTA FUND, L.P. NOTES TO FINANCIAL STATEMENTS NOTE 3:- VENTURE CAPITAL INVESTMENTS (cont.) 4. E4X Inc. ("E4X") In June 2002, the Fund has purchased 550,000 Common stock of E4X from certain stockholders at a purchase price of $ 175 thousand. The acquisition was not involving new investors. The General Partner in the opinion that the price per share of the acquisition do not reflect devaluation on the company value. Following the Common stock purchase, the Fund's holding in E4X is 17.91% on a fully diluted basis. 5. Chiaro Networks Ltd. ("Chiaro") Chiaro has developed optical packet switching technology to address the high-end router market. In February 2002, the Fund invested $ 3,000 thousand in 3,750,001 series D Preferred shares of Chiaro, which represent 1.46% of the issued and outstanding share capital of Chiaro, on a fully diluted basis. 6. Redux Inc. ("Redux") Redux develops, markets and sells single-chip IP and Ethernet traffic processing solutions for the broadband subscriber premises (Broadband Access). In June 2002, the Fund invested $ 2,000 thousand in 485,437 series C Preferred shares of Redux, which represent 10.53% of the issued and outstanding share capital of Redux, on a fully diluted basis. 7. Provigent Inc. (Provigent") Provigent is a fables semiconductor company developing a line of cost-effective "system-on-a-chip" solutions, addressing both the Point to Point (PTP) and Point to Multipoint (PMP) applications used in wireless Backhand and Access markets. In June 2002, the Fund invested $ 2,082 thousand in 1,452,693 series B Preferred shares of Provigent, which represent 10.10% of the issued and outstanding share capital of Provigent, on a fully diluted basis. NOTE 4:- SUBSEQUENT EVENTS In July 2002, the Fund undertook to invest $ 2,000 thousand in 14,112,291 Preferred B shares of Broadlight (including the conversion of the convertible loan plus accrued interest). The Fund was also granted 705,615 warrants to purchase Preferred shares. Following the Preferred B investment the Fund’s holding in Broadlight Inc. is 33.82% on a fully diluted basis. ---------- /home/pptfactory/temp/20100610083442/808a62602054b74d0aa72955.doc - 10 -

×