<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 the Quarter Ended March 31, 1998 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, Sacramento, California 95825
- --------------------------------------------------------------------------------
(Address or Registrant's Principal Executive Offices)
(916) 929-5433
- --------------------------------------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether the registrant (1) had filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve (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 ninety (90) days.
X Yes No
----- -----
<PAGE> 2
COMMONWEALTH GROWTH FUND II
INDEX
<TABLE>
Part I. Financial Information
<S> <C> <C>
Balance Sheets - March 31, 1998 and December 31, 1997 3
Statements of Operations - For the Three Months Ended
March 31, 1998 and 1997 4
Statements of Cash Flows - For the Three Months Ended
March 31, 1998 and 1997 5
Statement of Partners' Equity - For the Three Months Ended
March 31, 1998 6
Notes to Financial Statements 7
Management's Discussion and Analysis of the Results of Operations 8
Part II. Other Information 9
</TABLE>
2
<PAGE> 3
COMMONWEALTH GROWTH FUND II
(A Limited Partnership)
Balance Sheets
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
(Unaudited) (Audited)
----------- -----------
<S> <C> <C>
Assets
Land $ 160,000 $ 160,000
Notes Receivable 1,096,000 1,096,000
Cash 90,897 97,727
Other Assets 27,753 11,645
----------- -----------
Total Assets $ 1,374,651 $ 1,365,372
Liabilities and Partners' Equity
Liabilities:
Accounts Payable and Accrued Expenses $ 932 $ 5,002
Deferred Gain 69,739 69,739
----------- -----------
Total Liabilities 70,671 74,741
Partners' Equity:
General Partners' Equity (2,598) (3,265)
Limited Partners' Equity; Authorized 1,000,000 Units;
Issued and Outstanding 459,698 in 1998 and 1997 1,306,578 1,293,896
----------- -----------
Total Partners' Equity 1,303,980 1,290,631
----------- -----------
Total Liabilities and Partners' Equity $ 1,374,651 $ 1,365,372
</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,
1998 1997
-------- -------
<S> <C> <C>
Rental Income $ -0- -0-
Expenses:
Operating Expenses -0- -0-
Depreciation and Amortization -0- -0-
-------- -------
Income From Rental Operations $ -0- -0-
Interest Income 24,107 33,831
Gain (Loss) on Disposal of Note -0- -0-
General and Administrative Expenses 10,759 65,313
-------- -------
Net Income (Loss) $ 13,348 (31,482)
Allocated to General Partners 667 (1,574)
Allocated to Limited Partners $ 12,681 (29,908)
Net Income (Loss) per Limited
Partnership Unit $ 0.03 (0.07)
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,
1998 1997
--------- ---------
<S> <C> <C>
Cash Flows from Operating Activities
Net Income (Loss) $ 13,348 $ (31,482)
Adjustments to Reconcile Net Income (Loss) to Net
Cash Provided by Operating Activities:
Changes in Other Assets and Liabilities:
(Increase)/Decrease in Other Assets (16,108) (39,553)
Increase/(Decrease) in Accounts Payable
and Accrued Expenses (4,070) 36,464
--------- ---------
Total Adjustments to Net Income (20,178) (3,089)
--------- ---------
Net Cash Provided by Operating Activities $ (6,830) $ (34,571)
Cash Flows from Investing Activities:
Collections on Notes Receivable -- --
--------- ---------
Net Cash Provided by Investing Activities -- --
--------- ---------
Cash Flows from Financing Activities:
Contribution by Partners -- 39,553
Distributions to Partners -- (314,560)
--------- ---------
Net Cash Used by Financing Activities -- (275,007)
--------- ---------
Net Increase (Decrease) in Cash (6,830) (309,578)
Cash, Beginning of Year 97,727 364,874
--------- ---------
Cash, End of Period $ 90,897 $ 55,296
</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, 1998
(Unaudited)
<TABLE>
<CAPTION>
General Limited
Partners Partners Total
--------- --------- ---------
<S> <C> <C> <C>
Balance at December 31, 1997 $ (3,265) 1,293,896 1,290,631
Net Income (Loss) 667 12,681 13,348
Contributions -0- -0- -0-
Distributions -0- -0- -0-
--------- --------- ---------
Balance at March 31, 1998 $ (2,598) 1,306,577 1,303,979
</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, 1998, and the results of its
operations for the three months ended March 31, 1998 and cash flows for
the three months ended March 31, 1998.
(2) The other accounting policies followed by the Partnership are set forth in
Note 1 to the Partnership's financial statements in the 1997 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 or expenses for the three months ended March
31, 1998 as the Partnership had divested itself of all rental
properties by the end of 1995.
Interest income decreased $ 9,724 for the three months ended March 31,
1998, compared to the same period in the prior year, due to the sale of
a note receivable in February, 1997 and the collection of a second note
receivable in October, 1997.
General and administrative expenses decreased $54,554 for the three
months ended March 31, 1998, compared to the same period in the prior
year, due in part to an adjustment in the prior year to accrue
operating expenses incurred by the General Partners in prior years but
which at that point had not yet been repaid. Legal and accounting fees
decreased by $9,000 compared to the same period last year, due in part
to the receipt of an unused retainer paid in the fourth quarter of
1997.
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 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are being field as part of this report:
27 Financial Data Schedule
(b) The Partnership filed no reports on Form 8-K during the quarter
ended March 31, 1998.
9
<PAGE> 10
SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant has dually caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Commonwealth Growth Fund II
(Registrant)
Date: 5/1/98 /s/ JEFFREY BERGER
------------------ ---------------------------------------
Jeffrey Berger
Individual General Partner
Date: 5/1/98 /s/ JEFFREY BERGER
------------------ ---------------------------------------
Jeffrey Berger
President, Managing General Partner
10
<PAGE> 11
INDEX TO EXHIBITS
Exhibit
Number Description
- ------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AT MARCH 31, 1998 (UNAUDITED) AND THE STATEMENT OF OPERATIONS FOR THE
THREE MONTHS ENDED MARCH 31, 1998 (UNAUDITED) AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH 1ST QUARTER 1998 10-Q.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 90,897
<SECURITIES> 0
<RECEIVABLES> 1,096,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,214,651
<PP&E> 160,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,374,651
<CURRENT-LIABILITIES> 70,671
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,303,980
<TOTAL-LIABILITY-AND-EQUITY> 1,374,651
<SALES> 0
<TOTAL-REVENUES> 24,107
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 10,759
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 13,348
<INCOME-TAX> 0
<INCOME-CONTINUING> 13,348
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,348
<EPS-BASIC> 0.03
<EPS-DILUTED> 0.03
</TABLE>
