<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 March 31, 1996 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>
Part I. Financial Information
Balance Sheets - March 31, 1996 and December 31, 1995 3
Statements of Operations - For the Three Months
Ended March 31, 1996 and 1995 4
Statements of Cash Flows - For the Three Months
Ended March 31, 1996 and 1995 5
Statement of Partners' Equity - For the Three Months
Ended March 31, 1996 6
Notes to Financial Statements 7
Management's Discussion and Analysis of the
Results of Operations 8
Part II. Other Information 8
</TABLE>
<PAGE> 3
COMMONWEALTH GROWTH FUND II
(A Limited Partnership)
Balance Sheets
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1995
(UNAUDITED) (AUDITED)
----------- ---------
ASSETS
<S> <C> <C>
Land $ 160,000 160,000
Notes receivable 1,454,869 3,019,038
Cash 1,940,215 438,182
Other assets 7,148 85,724
---------- ---------
Total assets $3,562,232 3,702,944
========== =========
<CAPTION>
LIABILITIES AND PARTNERS' EQUITY
<S> <C> <C>
Liabilities:
Accounts payable and accrued expenses $ 1,883 6,049
Deferred gain 69,739 69,739
---------- ---------
Total liabilities 71,622 75,788
---------- ---------
Partners' Equity:
General partners' equity 0 (37,505)
Limited partners' equity; authorized 1,000,000 units;
issued and outstanding 459,698 in 1996 and 1995 3,490,610 3,664,661
---------- ---------
Total partners' equity 3,490,610 3,627,156
---------- ---------
Total liabilities and partners' equity $3,562,232 3,702,944
========== =========
</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
March 31,
1996 1995
--------- ------
<S> <C> <C>
Rental income $ -- --
Expenses:
Operating expenses 25,958 9,384
Depreciation and amortization -- --
--------- ------
Loss from operations (25,958) (9,384)
Interest income 64,296 74,302
General and administrative expenses 24,736 35,524
--------- ------
Net income before loss on disposal
of note receivable 13,602 29,394
Loss on disposal of note receivable 150,148 --
--------- ------
Net (loss) income (136,546) 29,394
Allocated to general partners (821) 1,470
--------- ------
Allocated to limited partners $(135,725) 27,924
========= ======
Net (loss) income per limited
partnership unit $ (0.30) 0.06
========= ========
Weighted average number of
units outstanding 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>
THREE MONTHS ENDED
MARCH 31,
1996 1995
---------- -------
<S> <C> <C>
Cash flows from operating activities:
Net (loss) income $ (136,546) 29,394
---------- -------
Adjustments to reconcile net (loss) income to
net cash provided by operating activities:
Loss on disposal of note receivable 150,148 --
Changes in other assets and liabilities:
Decrease in other assets 78,576 8,917
(Decrease) increase in accounts payable
and accrued expenses (4,166) 505
---------- -------
Total adjustments to net (loss) income 224,558 9,422
---------- -------
Net cash provided by operating activities 88,012 38,816
---------- -------
Cash flows from investing activities:
Collections on notes receivable 1,414,021 --
---------- -------
Net cash provided by investing activities 1,414,021 --
---------- -------
Cash flows from financing activities:
Distributions to partners -- --
---------- -------
Net cash used by financing activities -- --
---------- -------
Net increase in cash 1,502,033 38,816
Cash, beginning of year 438,182 430,596
---------- -------
Cash, end of year $1,940,215 469,412
========== =======
</TABLE>
See accompanying notes to financial statements.
5
<PAGE> 6
COMMONWEALTH GROWTH FUND II
(A Limited Partnership)
Statement of Partners' Equity
For the Three Months Ended March 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
GENERAL LIMITED
PARTNERS PARTNERS TOTAL
--------- --------- ---------
<S> <C> <C> <C>
Balance at December 31, 1995 $(37,505) 3,664,661 3,627,156
Contribution 38,326 (38,326) 0
Net income (821) (135,725) (136,546)
-------- --------- ---------
Balance at March 31, 1996 $ 0 3,490,610 3,490,610
======== ========= =========
</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 March 31, 1996, and the results of
its operations for the three months ended March 31, 1996 and cash
flows for the three months ended March 31, 1996.
(2) The other accounting policies followed by the Partnership are set
forth in Note 1 to the Partnership's financial statements in the 1995
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
There was no rental income for the three months ended March 31, 1996
due to the Partnership no longer owning any rental properties.
Operating expenses increased $16,574 for the three months ended March
31, 1996, compared to the same period in the prior year, due to bad
debt expense representing the write-off of uncollectible rent amounts
owed since April 1994.
Interest income decreased $10,006 for the three months ended March 31,
1996, compared to the same period in the prior year, due to the
collection of a delinquent note receivable in February 1996.
General and administrative expenses decreased $10,788 for the three
months ended March 31, 1996, compared to the same period in the prior
year. This change is primarily attributable to decreased accounting,
appraisal, and registrar expenses. However, this decrease was partially
offset by increased legal expenses related to the collection of the
delinquent note receivable.
Loss on disposal of note receivable of $150,148 is the result of the
collection of a delinquent note receivable for less than the total
principal and interest amounts owed.
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.
PART II. OTHER INFORMATION
ITEM 6: REPORTS ON FORM 8-K
The Partnership filed no reports on Form 8-K during the quarter
ended March 31, 1996.
8
<PAGE> 9
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)
5/15/96 /S/ JEFFREY BERGER
--------------- -----------------------------------
Date Jeffrey Berger
Individual General Partner
5/15/96 /S/ JEFFREY BERGER
--------------- -----------------------------------
Date Jeffrey Berger
President, Managing General Partner
9
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
BALANCE SHEET AT MARCH 31, 1996 (UNAUDITED) AND THE STATEMENT OF OPERATIONS FOR
THE THREE MONTHS ENDED MARCH 31, 1996 (UNAUDITED) AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FIRST QUARTER 1996 10-Q.
</LEGEND>
<CIK> 0000810387
<NAME> COMMONWEALTH
<MULTIPLIER> 1
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<EXCHANGE-RATE> 1
<CASH> 1,940,215
<SECURITIES> 0
<RECEIVABLES> 1,454,869
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,402,232
<PP&E> 160,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,562,232
<CURRENT-LIABILITIES> 71,622
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 3,490,610
<TOTAL-LIABILITY-AND-EQUITY> 3,562,232
<SALES> 0
<TOTAL-REVENUES> 64,296
<CGS> 0
<TOTAL-COSTS> 25,958
<OTHER-EXPENSES> 24,736
<LOSS-PROVISION> 150,148
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (136,546)
<INCOME-TAX> 0
<INCOME-CONTINUING> (136,546)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (136,546)
<EPS-PRIMARY> (.30)
<EPS-DILUTED> (.30)
</TABLE>
