<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d) of
the Securities Exchange Act of 1934
For Quarter Ended September 30, 1995 Commission file number 0-15363
COMMONWEALTH GROWTH FUND II
(Exact Name of Registrant as Specified in its Charter)
California 68-0088748
- --------------------------------- ------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
705 University Avenue, Suite A, Sacramento, California 95825
(Address of registrant's principal executive offices) (Zip Code)
(916) 929-5433
(Registrants telephone number, including area code)
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.
X Yes No
---- ----
<PAGE> 2
COMMONWEALTH GROWTH FUND II
INDEX
<TABLE>
<S> <C> <C>
Part I. Financial Information
Balance Sheets - September 30, 1995 and December 31, 1994 3
Statements of Operations - For the Three Months and
Nine Months Ended September 30, 1995 and 1994 4
Statements of Cash Flows - For the Nine Months
Ended September 30, 1995 and 1994 5
Statement of Partners' Equity - For the Nine Months
Ended September 30, 1995 6
Notes to Financial Statements 7
Management's Discussion and Analysis of the
Results of Operations 8
Part II. Other Information 9
</TABLE>
<PAGE> 3
COMMONWEALTH GROWTH FUND II
(A Limited Partnership)
Balance Sheets
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
(Unaudited) (Audited)
----------- ---------
<S> <C> <C>
Assets
Land $ 160,000 160,000
Notes receivable 3,054,869 3,054,869
Cash 560,205 430,596
Other assets 47,886 59,814
---------- ---------
Total assets $3,822,960 3,705,279
========== =========
Liabilities and Partners' Equity
Liabilities:
Accounts payable and accrued expenses $ 569 --
Deferred gain 69,739 69,739
---------- ---------
Total liabilities 70,308 69,739
---------- ---------
Partners' Equity:
General partners' equity (31,230) (37,086)
Limited partners' equity; authorized 1,000,000 units;
issued and outstanding 459,698 in 1995 and 1994 3,783,882 3,672,626
---------- ---------
Total partners' equity 3,752,652 3,635,540
---------- ---------
Total liabilities and partners' equity $3,822,960 3,705,279
========== =========
</TABLE>
See accompanying notes to financial statements. 3
<PAGE> 4
COMMONWEALTH GROWTH FUND II
(A Limited Partnership)
Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
------- -------- ------- -------
<S> <C> <C> <C> <C>
Rental income $ -- 66,519 3,095 201,844
Expenses:
Operating expenses 4,715 35,038 18,205 116,352
Depreciation and amortization -- 13,088 -- 38,069
------- -------- ------- -------
(Loss) income from rental operations (4,715) 18,393 (15,110) 47,423
Interest income 77,348 76,660 229,012 312,791
General and administrative expenses 39,939 26,274 96,790 78,294
------- -------- ------- -------
Income before loss on disposal of
note receivable 32,694 68,779 117,112 281,920
Loss on disposal of note receivable -- 199,297 -- 199,297
------- -------- ------- -------
Net income (loss) 32,694 (130,518) 117,112 82,623
Allocated to general partners 1,635 1,446 5,856 12,103
------- -------- ------- -------
Allocated to limited partners $31,059 (131,964) 111,256 70,520
======= ======== ======= =======
Net income per limited
partnership unit $ 0.07 (0.29) 0.24 0.15
======= ======== ======= =======
Weighted average number of
units outstanding 459,698 459,698 459,698 459,698
======= ======== ======= =======
</TABLE>
See accompanying notes to financial statements. 4
<PAGE> 5
COMMONWEALTH GROWTH FUND II
(A Limited Partnership)
Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1995 1994
-------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income $117,112 82,623
-------- ---------
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization -- 38,070
Loss on disposal of note receivable and rental property -- 199,297
Changes in other assets and liabilities:
Decrease in other assets 11,928 3,252
Increase in accounts payable
and accrued expenses 569 5,272
Increase in other liabilities -- 3,625
-------- ---------
Total adjustments to net income 12,497 249,516
-------- ---------
Net cash provided by operating activities 129,609 332,139
-------- ---------
Cash flows from investing activities:
Improvements to rental properties -- (131,007)
Collections on notes receivable -- 2,294,887
-------- ---------
Net cash provided by investing activities 0 2,163,880
-------- ---------
Cash flows from financing activities:
Distributions to partners -- (483,893)
-------- ---------
Net cash used by financing activities 0 (483,893)
-------- ---------
Net increase in cash 129,609 2,012,126
Cash, beginning of year 430,596 895,713
-------- ---------
Cash, end of year $560,205 2,907,839
======== =========
</TABLE>
See accompanying notes to financial statements. 5
<PAGE> 6
COMMONWEALTH GROWTH FUND II
(A Limited Partnership)
Statement of Partners' Equity
For the Nine Months Ended September 30, 1995
(Unaudited)
<TABLE>
<CAPTION>
General Limited
Partners Partners Total
-------- --------- ---------
<S> <C> <C> <C>
Balance at December 31, 1994 $(37,086) 3,672,626 3,635,540
Net income 5,856 111,256 117,112
-------- --------- ---------
Balance at September 30, 1995 $(31,230) 3,783,882 3,752,652
======== ========= =========
</TABLE>
See accompanying notes to financial statements. 6
<PAGE> 7
COMMONWEALTH GROWTH FUND II
NOTES TO FINANCIAL STATEMENTS
(1) In the opinion of the General Partners, the accompanying
unaudited financial statements contain all adjustments
necessary to present fairly the financial position as of
September 30, 1995, and the results of its operations for the
three months and nine months ended September 30, 1995 and cash
flows for the nine months ended September 30, 1995.
(2) The other accounting policies followed by the Partnership are
set forth in Note 1 to the Partnership's financial statements
in the 1994 Form 10-K which is incorporated herein by
reference.
7
<PAGE> 8
COMMONWEALTH GROWTH FUND II
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Rental income decreased $66,519 and $198,749 for the three months and
nine months ended September 30, 1995, respectively, compared to the
same periods in the prior year, due to the sale of the Southland Park
property in October 1994.
Operating expenses decreased $30,323 and $98,147 for the three months
and nine months ended September 30, 1995, respectively, compared to
the same periods in the prior year, due to the sale of the Southland
Park property in October 1994.
Depreciation and amortization were zero for the three months and nine
months ended September 30, 1995, due to the sale of the Southland Park
property (the remaining rental property) in October 1994.
Interest income decreased $83,779 for the nine months ended September
30, 1995, compared to the same period in the prior year, due to the
payoff of a note receivable in August 1994.
General and administrative expenses increased $13,665 and $18,496 for
the three months and nine months ended September 30, 1995,
respectively, compared to the same periods in the prior year, due to
increased accounting, legal, and registrar expenses which were offset
in part by decreased shareholder relations expenses.
Loss on disposal of note receivable of $199,297 for the three months
and nine months ended September 30, 1994 represents an 8% discount
given in exchange for the early payoff in August 1994 of a note
receivable acquired through the sale of the Goethe Road property.
LIQUIDITY AND CAPITAL RESOURCES
The Partnership has met its liquidity needs through cash reserves and
operating income. The Partnership currently has no material
commitments and anticipates that these sources will continue to be
adequate to meet the Partnership's future liquidity needs.
8
<PAGE> 9
PART II. OTHER INFORMATION
ITEM 5: OTHER INFORMATION
On August 29, 1995, the Partnership instituted judicial foreclosure
proceedings against W & F Building Maintenance ("W & F"), who was in
possession of the property located at 4350 Warehouse Court in
Sacramento, California. W & F had defaulted on the Note in favor of
the Partnership, and the Partnership sought to enforce the terms of
the Deed of Trust also in its favor. On August 31, 1995, the Court
appointed a Receiver to operate and manage the property during the
pendency of the foreclosure. That appointment was subsequently
confirmed by the Court on September 11, 1995. Thus far, the
receivership has been in possession of the property, has been
collecting rents, and has reported to the court periodically. A
Notice of Default was recorded on November 3, 1995. Currently, the
parties are attempting to resolve all issues by way of some sort of
global settlement involving a potential tenant for the premises.
ITEM 6: REPORTS ON FORM 8-K
The Partnership filed no reports on Form 8-K during the quarter
ended September 30, 1995.
9
<PAGE> 10
SIGNATURES
Pursuant to the requirement 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.
COMMONWEALTH GROWTH FUND II
-----------------------------------------
(Registrant)
11/6/95 /S/ JEFFREY BERGER
- ---------------- -----------------------------------------
Date Jeffrey Berger
Individual General Partner
11/6/95 /S/ JEFFREY BERGER
- ---------------- -----------------------------------------
Date Jeffrey Berger
President, Managing General Partner
10
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AT SEPTEMBER 30, 1995 (UNAUDITED) AND THE STATEMENT OF OPERATIONS FOR THE
NINE MONTHS ENDED SEPTEMBER 30, 1995 (UNAUDITED) AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH 3RD QUARTER 1995 10-Q.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<EXCHANGE-RATE> 1
<CASH> 560,205
<SECURITIES> 0
<RECEIVABLES> 3,054,869
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,662,960
<PP&E> 160,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,822,960
<CURRENT-LIABILITIES> 70,308
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 3,752,652
<TOTAL-LIABILITY-AND-EQUITY> 3,822,960
<SALES> 0
<TOTAL-REVENUES> 232,107
<CGS> 0
<TOTAL-COSTS> 18,205
<OTHER-EXPENSES> 96,790
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 117,112
<INCOME-TAX> 0
<INCOME-CONTINUING> 117,112
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 117,112
<EPS-PRIMARY> .24
<EPS-DILUTED> .24
</TABLE>
