UNITED STATES
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 quarterly period ended September 30, 2000
[ ] 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: 018581
RENAISSANCE CAPITAL PARTNERS, LTD.
_____________________________________________________________________________
(Exact name of registrant as specified in its charter)
Texas 75-2296301
_____________________________________________________________________________
(State or other jurisdiction (I.R.S. Employer I.D. No.)
of incorporation or organization)
8080 North Central Expressway, Dallas, Texas 75206-1857
_____________________________________________________________________________
(Address of principal executive offices) (Zip Code)
214/891-8294
_____________________________________________________________________________
(Registrant's 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.
Yes X No
______ ______
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
RENAISSANCE CAPITAL PARTNERS, LTD.
Statements of Assets, Liabilities and
Partners' Equity
<TABLE>
<S> <S>
Assets December 31, 1999 September 30, 2000
----------------- ------------------
(Unaudited)
<C> <C>
Cash and cash equivalents $ 377,803 $ 78,458
Accounts receivable - Perlmutter 100,000 -0-
Investments at fair value, cost of
$6,045,517 and $3,454,465 at
December 31, 1999 and September 30,
2000 respectively 2,113,347 721,117
Interest and fees receivable 18,835 -0-
Other assets 22,729 14,518
---------- --------
$2,632,714 $814,093
========== ========
Liabilities and Partners' Equity
Accounts payable $ 380 $ 675
Accounts payable -affiliate 42,147 40,157
---------- --------
Total liabilities 42,527 40,832
---------- --------
Partners' equity:
General partner -0- -0-
Limited partners: 128.36 units
outstanding 2,590,187 773,261
---------- --------
Total partners' equity 2,590,187 773,261
---------- --------
$2,632,714 $814,093
========== ========
Limited partners' equity per limited
partnership unit $ 20,179 $ 6,024
========== ========
<FN>
See accompanying notes to financial statements. </FN> </TABLE> <PAGE>
RENAISSANCE CAPITAL PARTNERS, LTD.
Statements of Operations
(Unaudited)
<TABLE> <S> <S>
Three Months Nine Months
Ended September 30, Ended September 30,
<S> <S> <S> <S>
1999 2000 1999 2000
---- ---- ---- ----
Income: <C> <C> <C> <C>
Interest $ (7,924) $ (1,337) $ 4,044 $ (233)
Dividends 5,136 923 14,810 7,007
Other invest-
ment income -0- -0- -0- -0-
--------- ----------- ---------- ----------
Total income (2,788) (414) 18,854 6,774
--------- ----------- ---------- ----------
Expenses:
General and
administrative 18,179 36,938 77,778 98,022
Management fees 15,373 -0- 52,236 23,173
--------- ----------- ---------- ----------
Total expenses 33,552 36,938 130,014 121,195
--------- ----------- ---------- ----------
Investment loss net (36,340) (37,352) (111,160) (114,421)
Loss from investment
in Sunrise Media LLC 3,664 -0- (111,272) -0-
Net realized gain
(loss) on investments -0- (1,870,740) -0- (2,402,327)
Net unrealized gain
(loss) on invest-
ments (320,312) 1,434,150 (404,716) 1,199,822
--------- ----------- ---------- -----------
Net income (loss)
resulting from
operations $(352,988) $ (473,942) $(627,148) $(1,316,926)
========= ========== ========= ===========
Net income (loss)
per limited
partnership unit $ (2,750) $ (3,692) $ (4,886) $ (10,260)
========= ========== ========= ===========
Weighted average
limited partnership
units 128.36 128.36 128.36 128.36
====== ====== ====== ======
<FN>
See accompanying notes to financial statements. </FN> </TABLE> <PAGE>
RENAISSANCE CAPITAL PARTNERS, LTD.
Statement of Partners' Equity
<TABLE> <S> <S> <S>
General Limited
Partner Partners Total
------- -------- -----
<C> <C> <C>
Balance, December 31, 1999 $ -0- $2,590,187 $2,590,187
Net income (unaudited) -0- (1,316,926) (1,316,926)
Return of partners' capital -0- (500,000) (500,000)
----- ---------- ----------
Balance, September 30, 2000 (unaudited) $ -0- $ 773,261 $ 773,261
===== ========== ==========
<FN>
See accompanying notes to financial statements. </FN> </TABLE> <PAGE>
RENAISSANCE CAPITAL PARTNERS, LTD.
Statement of Cash Flows
(Unaudited)
<TABLE> <S> <S>
Three Months Nine Months
Ended September 30, Ended September 30,
<S> <S> <S> <S>
1999 2000 1999 2000
---- ---- ---- ----
Cash flows from operating
activities: <C> <C> <C> <C>
Net income (loss) $(352,988) $(473,942) $(627,148) $(1,316,926)
Adjustments to reconcile
net income (loss) to net
cash used in operating
activities:
Loss from Sunrise Media
LLC (3,664) -0- 111,272 -0-
Unrealized (gain) loss on
investments 320,312 (1,434,150) 404,716 (1,199,822)
Realized loss on invest-
ments -0- 1,870,740 -0- 2,402,327
(Increase) decrease in:
Accounts receivable 8,161 18,549 13,488 118,835
Other assets (22,309) 4,085 (20,131) 8,211
Increase (decrease) in:
Accounts payable 823 3,107 (29,839) (1,695)
--------- --------- --------- -----------
Net cash flows from
operating activities (49,665) (11,611) (147,642) 10,930
--------- --------- --------- -----------
Cash flows from investing
activities:
Purchase of investments (100,000) -0- (342,532) (37,000)
Proceeds from sale of
securities -0- -0- -0- 226,725
--------- --------- --------- -----------
Net cash used by
investing activities (100,000) -0- (342,532) 189,725
--------- --------- --------- -----------
Cash flows from financing
activities:
Return of partners capital -0- (500,000) -0- (500,000)
--------- --------- --------- -----------
Net increase (decrease) in
cash (149,665) (511,611) (490,174) (299,345)
Cash and cash equivalents at
beginning of period 584,277 590,069 924,786 377,803
--------- --------- --------- -----------
Cash and cash equivalents at
end of period $ 434,612 $ 78,458 $ 434,612 $ 78,458
========= ========= ========= ===========
<FN>
See accompanying notes to financial statements. </FN> </TABLE> <PAGE>
RENAISSANCE CAPITAL PARTNERS, LTD.
Notes to Financial Statements
September 30, 2000
1. Organization and Business Purpose
Pursuant to the Partnership Agreement (the "Agreement"), the term of the
Partnership expired June 30, 2000. The Managing General Partner ("MGP") is
now winding up the affairs of the Partnership pursuant to Article 9 of the
Agreement, and the MGP will no longer accrue management fees during the
wind-up period.
2. Summary of Significant Accounting Policies
A. Contributed Capital - Proceeds from the sale of the limited partnership
interests, net of related selling commissions and syndication costs, are
recorded as contributed capital.
B. Statement of Cash Flows - The Partnership considers all highly liquid debt
instruments with original maturities of three months or less to be cash
equivalents. No interest or income taxes were paid during the periods.
C. Valuation of Investments - The valuation of investments in debt
instruments which are convertible into unregistered securities is based
upon the bid price of the underlying securities obtained through normal
market systems less a discount for selling and registration costs. For
those investments not having an established market, the valuation is at
the Partnership's costs for the first six months after closing and will be
redetermined by the General Partners subsequent to that time period.
D. Management Estimates - The financial statements have been prepared in
conformity with generally accepted accounting principles. The preparation
of the accompanying financial statements requires estimates and
assumptions made by management of the Partnership that affect the reported
amounts of assets and liabilities as of the date of the statements of
assets, liabilities and partners' equity and income and expenses for the
period. Actual results could differ significantly from those estimates.
E. Interest Income - Interest income is accrued on all debt securities owned
by the Partnership on a quarterly basis. The Partnership has written off
its investment in the Convertible Promissory Notes of Feminique.
Accordingly, there was no interest accrued in the third quarter nor will
there be any interest income in the future.
F. Financial Instruments - In accordance with the reporting requirements of
Statement of Financial Accounting Standards No. 107, "Disclosures about
Fair Value of Financial Instruments," the Company calculates the fair
value of its financial instruments and includes this additional
information in the notes to the financial statements when the fair value
is different than the carrying value of those financial instruments. When
the fair value reasonably approximates the carrying value, no additional
disclosure is made. The valuation of common stock positions is based on
the public market for those securities less appropriate reserves for
selling restricted securities.
3. Basis of Presentation
The accompanying financial statements have been prepared without audit, in
accordance with the rules and regulations of the Securities and Exchange
Commission and do not include all disclosures normally required by generally
accepted accounting principles or those normally made in annual reports on
Form 10-K. All material adjustments, consisting only of those of a normal
recurring nature, which, in the opinion of management, were necessary for a
fair presentation of the results for the interim periods have been made.
<PAGE>
RENAISSANCE CAPITAL PARTNERS, LTD.
Notes to Financial Statements (Continued)
September 30, 2000
4. Partnership Agreement
Pursuant to the terms of the Agreement, all items of income, gain, loss and
deduction of the Partnership, other than any Capital Transaction, as defined,
will be allocated 1% to Renaissance and 99% to the Limited Partners. All
items of gain of the Partnership resulting from a Capital Transaction shall
be allocated such that the Limited Partners receive a cumulative simple
annual return of 10% on their capital contributions and any remaining gains
shall be allocated 20% to Renaissance and 80% to the Limited Partners. All
items of loss resulting from Capital Transactions shall be allocated 1% to
Renaissance and 99% to the Limited Partners. To the extent that allocation
of losses create a negative capital balance in either the Managing General
Partner's or the Limited Partners' capital accounts, losses shall be
allocated as described herein until such capital account is $0. The
remaining loss is allocated to the capital account with a positive capital
balance.
5. Investments
Investments of the Partnership are carried in the statements of assets,
liabilities and partners' equity at quoted market or fair value, as
determined in good faith by the MGP and approved by the Independent General
Partners.
For securities that are publicly traded and for which quotations are
available, the Partnership will value the investments based on the closing
sale as of the last day of the fiscal quarter, or in the event of an interim
valuation, as of the date of the valuation. If no sale is reported on such
date, the securities will be valued at the average of the closing bid and
asked prices.
The MGP, subject to the approval and supervision of the Independent General
Partners, will be responsible for determining fair value.
The financial statements include investments valued at $2,113,347 (80% of
total assets) and $721,117 (89% of total assets) as of December 31, 1999 and
September 30, 2000, respectively. Because of the inherent uncertainty of
valuation, those estimated values may differ significantly from the values
that might ultimately be realized in the liquidation and wind-up process, and
the differences could be material. <PAGE>
RENAISSANCE CAPITAL PARTNERS, LTD.
Notes to Financial Statements (Continued)
September 30, 2000
<TABLE> <S> <S> <S>
CONVERSION
or
COST FACE VALUE FAIR VALUE
<C> <C> <C>
Danzer Corporation $2,678,480 $820,337 $721,117
Common Stock
BigHub.com
Common Stock 775,985 15,122 -0-
---------- -------- --------
Total: $3,454,465 $835,459 $721,117
========== ======== ========
<FN>
The fair value of debt securities convertible into common stock is the sum of
(a) the value of such securities without regard to the conversion feature, and
(b) the value, if any, of the conversion feature. The fair value of debt
securities without regard to conversion features is determined on the basis of
the terms of the debt security, the interest yield and the financial condition
of the issuer. The fair value of the conversion features of a security, if any,
are based on fair values as of this date less an allowance, as appropriate, for
costs of registration, if any, and selling expenses. Publicly traded
securities, or securities that are convertible into publicly traded securities
are valued at the last sale price, or at the average closing bid and asked
price, as of the valuation date. While these valuations are believed to
represent fair value, these values do not necessarily reflect amounts which may
be ultimately realized upon disposition of such securities. </FN> </TABLE>
<PAGE>
RENAISSANCE CAPITAL PARTNERS, LTD.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
(1) Material Changes in Financial Condition
The following portfolio transactions are noted for the quarter ended
September 30, 2000 (portfolio companies are herein referred to as the
"Company"):
Danzer Corporation (DNZR) Subsequent to September 30, 2000, the Company
announced that it had received a proposal from Canron Corporation to enter into
an agreement pursuant to which Danzer would acquire all of the issued and
outstanding equity securities of Canron in exchange for convertible preferred
stock of Danzer representing not less than 91% of the issued and outstanding
equity interests of the Company on a fully diluted and as converted basis.
Canron, headquartered in Oak Brook, Illinois, is a leading steel fabrication and
erection company with approximately $220,000,000 in gross revenues. At this
time, the deal is expected to close sometime in the fourth quarter of 2000.
However, no definitive documentation has yet to be agreed upon.
(2) Material Changes in Operations
During the quarter ended September 30, 2000, the Partnership experienced a
net loss of $473,942. This loss resulted from a net investment loss of $37,352,
an unrealized gain on investments of $1,434,150, and a net realized loss on
investments of 1,870,740, resulting from a writeoff of the Partnership's
investment in Feminique Corp. The unrealized gain of $1,434,150 primarily
resulted from realizing a previously reserved loss in Feminique. Holdings
remaining in the portfolio had an unrealized loss of $389,362 for the quarter
ended September 30, 2000. Due to the writeoff of the Feminique investments, no
interest income will be accrued in the future as the Partnership no longer holds
any debt securities.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 2000, the Partnership had $78,458 in cash. On July 28,
2000, $500,000 was distributed to the Limited Partners. The Partnership's
ability to make future distributions will depend upon the Partnership's success
in realizing a return of investment cost and the realization of any capital
gains from selling its remaining positions in Danzer Corp. and BigHub.com.
Because the Partnership's portfolio investments are being wound down and the
Partnership is being liquidated, no new or follow-on investments will be made.
Moreover, cash will only be generated when investment positions are sold.
<PAGE>
RENAISSANCE CAPITAL PARTNERS, LTD.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Partnership has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RENAISSANCE CAPITAL PARTNERS, LTD.
By RENAISSANCE CAPITAL GROUP, INC.
Managing General Partner
November 15, 2000 By /S/
-------------------------------------------
Russell Cleveland, President
November 15, 2000 By /S/
-------------------------------------------
Barbe Butschek, Chief Financial Officer
<PAGE>
