<PAGE> 1
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 June 30, 1997
[ ] 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: 038593
RENAISSANCE CAPITAL PARTNERS II, LTD.
_____________________________________________________________________________
(Exact name of registrant as specified in its charter)
Texas 75-2407159
_____________________________________________________________________________
(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>
<PAGE> 2
PART I - FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
--------------------
RENAISSANCE CAPITAL PARTNERS II, LTD.
STATEMENT OF ASSETS, LIABILITIES,
AND PARTNERS' EQUITY
June 30, 1997
(Unaudited)
ASSETS
December 31, June 30,
1996 1997
------------ -------------
Cash and cash equivalents $ 2,673,170 $ 3,369,877
Investments at market value,
cost of $23,363,737 and $20,698,284 24,042,843 18,346,694
Interest receivable 114,157 99,953
Other assets 103,252 84,650
---------- ----------
$26,933,422 $21,901,174
========== ==========
LIABILITIES AND PARTNERS' EQUITY
Liabilities:
Accounts payable - related parties $ 203,362 $ 161,037
Accounts payable 57,217 -
---------- ----------
Total liabilities 260,579 161,037
---------- ----------
Partners' equity (deficit):
General partner (56,010) (94,543)
Limited partners (43,304.01 units) 26,728,853 21,834,680
Total partners' equity 26,672,843 21,740,137
---------- ----------
$26,933,422 $21,901,174
========== ==========
See accompanying notes to financial statements.
<PAGE>
<PAGE> 3
RENAISSANCE CAPITAL PARTNERS, II, LTD.
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
1996 1997 1996 1997
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Income:
Interest $ 169,286 $ 484,555 $ 364,735 $ 553,501
Dividends 4,290 6,460 8,697 28,910
Other income 6,000 - 15,607 -
--------- --------- --------- ---------
Total income 179,576 491,015 389,039 582,411
--------- --------- --------- ---------
Expenses:
General and administrative 101,200 66,412 198,244 112,473
Management fees 145,493 109,247 278,747 231,096
--------- --------- --------- ---------
Total expenses 246,693 175,659 476,991 343,569
--------- --------- --------- ---------
Net income (loss) from operations (67,117) 315,356 (87,952) 238,842
Net realized and unrealized gain (loss)
on investments 2,502,616 (2,349,038) (631,966) (4,092,172)
--------- --------- --------- ---------
Net increase (decrease) in assets from
operations $2,435,499 ($2,033,682) $ (719,918) ($3,853,330)
========= ========= ========= ==========
Income per weighted average limited
partnership unit $ 55.51 $ (46.49) $ (16.41) $ (88.09)
========= ========= ========= ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<PAGE> 4
RENAISSANCE CAPITAL PARTNERS II, LTD.
STATEMENT OF PARTNERS' EQUITY (DEFICIT)
Six Months Ended June 30, 1997
(Unaudited)
General Limited
Partner Partners Total
Balance at December 31, 1996 $ (56,010) $26,728,853 $26,672,843
Net income (loss) (38,533) (3,814,797) (3,853,330)
Distributions to limited partners - 1,000,000 1,000,000
Limited Partner withdrawal - (79,376) (79,376)
-------- ---------- ----------
Balance at June 30, 1997 $ (94,543) $21,834,680 $21,740,137
======== ========== ==========
See accompanying notes to financial statements.
<PAGE>
<PAGE> 5
RENAISSANCE CAPITAL PARTNERS II, LTD.
STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
1996 1997 1996 1997
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net increase (decrease) in net assets
resulting from operations $2,435,499 ($2,033,682) $ (719,918) ($3,853,330)
--------- --------- --------- ---------
Adjustments to reconcile net income to net
cash flows from operating activities:
Unrealized (gain) loss on investments (2,502,616) 352,929 631,966 3,030,696
Realized loss on investments - 1,996,109 - 1,061,476
(Increase) decrease in accounts receivable (1,713) 35,489 36,424 14,204
(Decrease) increase in accounts payable 34,248 (18,582) (50,991) (99,542)
--------- --------- --------- ---------
Total adjustments (2,470,081) 2,365,945 617,399 4,006,834
--------- --------- --------- ---------
Net cash flows from operating activities (34,582) 332,263 (102,519) 153,504
--------- --------- --------- ---------
Cash flows from investing activities:
Principal payments of notes receivable - 1,000 - 1,000
Purchase of investments (100,000) (1,406,487) (284,933) (1,422,487)
Proceeds from sale of securities 12,886 1,619,677 651,540 3,025,464
(Increase) decrease in other assets - (16,969) - 18,602
--------- --------- --------- ---------
Net cash flows from investing activities (87,114) 197,221 366,607 1,622,579
--------- --------- --------- ---------
Cash flows from financing activities:
Limited partner withdrawal - - - (79,376)
Distributions to limited partners - (1,000,000) - (1,000,000)
--------- --------- --------- ---------
Net cash flows from financing activities - (1,000,000) - (1,079,376)
--------- --------- --------- ---------
Net increase (decrease) in cash (121,696) (470,516) 264,088 696,707
Cash and cash equivalents at beginning of period 853,700 3,840,393 467,916 2,673,170
--------- --------- --------- ---------
Cash and cash equivalents at end of period $ 732,004 $3,369,877 $ 732,004 $3,369,877
========= ========= ========= =========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<PAGE> 6
RENAISSANCE CAPITAL PARTNERS II, LTD.
Notes to Financial Statements
June 30, 1997
(Unaudited)
1. ORGANIZATION AND BUSINESS PURPOSE
---------------------------------
Renaissance Capital Partners II, Ltd. (the "Partnership"), a Texas
limited partnership, was formed on January 14, 1991. The Partnership
Agreement required minimum aggregate capital contributions by limited
partners of not less than $2,500,000 and allowed for maximum limited
partnership contributions of $50,000,000. The final closing occurred on June
30, 1993 with total subscriptions for limited partnership interests of
$42,873,900. The Partnership seeks to achieve current income and capital
appreciation principally by making direct investments primarily in private
placement convertible debt securities of small to medium size public
companies.
The Partnership elected to be treated as a business development company
under the Investment Company Act of 1940, as amended. The Partnership will
terminate upon liquidation of all of its investments, but no later than eight
years from the final closing of the sale of units, subject to the right of
the Independent General Partners to extend the term for up to two additional
one-year periods if they determine that such extension is in the best
interest of the Partnership.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
A. CASH AND CASH EQUIVALENTS - for purposes of the statement of cash
flows, cash and cash equivalents include cash in checking and savings
accounts and all instruments on hand with original maturities of three months
or less. The Partnership paid no interest for the period ended June 30,
1997.
B. FEDERAL INCOME TAXES - no provision has been made for federal
income taxes as any liability for such taxes is that of the partners rather
than the Partnership.
C. INCOME PER LIMITED PARTNERSHIP UNIT - income per limited
partnership unit is based on the weighted average of the limited partnership
units outstanding during the period and net income allocated to the limited
partners.
D. ORGANIZATION EXPENSES - all organizational expenses were paid by
the Managing General Partner and the Partnership will not include those
amounts on its financial statements - see Note 4.
<PAGE>
<PAGE> 7
RENAISSANCE CAPITAL PARTNERS II, LTD.
Notes to Financial Statements
June 30, 1997
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
------------------------------------------
E. 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.
F. INTEREST INCOME - interest income is accrued on all debt
securities owned by the partnership on a quarterly basis. When it is
determined that the interest accrued will not be collected, the income for
that quarter is reduced to reflect the net interest earned during the period.
Interest accrued for the current quarter was $574,133 and the amount
determined to be uncollectible and charged against the income was $89,578.
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.
4. MANAGEMENT AGREEMENT AND FEES
-----------------------------
The Partnership has one general partner, Renaissance Capital Group,
Inc., a Texas Corporation (the "Managing General Partner"), and two
independent, individual general partners (the "Independent General
Partners"). The Independent General Partners receive a quarterly fee as
defined in the Partnership Agreement and reimbursement for certain out-of-
pocket expenses relating to performance of duties as Independent General
Partners.
<PAGE>
<PAGE> 8
RENAISSANCE CAPITAL PARTNERS II, LTD.
Notes to Financial Statements
June 30, 1997
4. MANAGEMENT AGREEMENT AND FEES (continued)
-----------------------------
The Partnership has entered into a management agreement with the
Managing General Partner. Pursuant to such agreement, the Managing General
Partner performs certain services, including certain management and
administrative services necessary for the operation of the Partnership. The
Managing General Partner is entitled to receive a management fee equal to
2.0% of the Partnership's net assets (.5% quarterly), payable in arrears. On
April 21, 1994, at the Annual Meeting of Limited Partners, a proposal to
amend the Advisory Agreement was ratified by the Limited Partners. The
agreement now dictates that to the extent any portion of such fee is based on
an increase in net assets value attributable to non-realized appreciation of
securities or other assets that exceed capital contributions, such portion of
the fee shall be deferred and not earned or payable until such time as
appreciation or any portion thereof is in fact realized and then such
deferred fees shall be earned and paid in proportion to the gains in fact
realized. Fees accrued to the Managing General Partner during the three
months ended June 30, 1997 were $109,247.
In addition, the Managing General Partner is entitled to an incentive
fee equal to 20% of the amount of distributions in excess of distributions
representing returns of capital, subject to payment of the "Priority Return"
of the limited partners as defined. The Managing General Partner will also
receive compensation for providing certain administrative services to the
Partnership on terms determined by the Independent General Partners to be no
less favorable to the Partnership than those obtainable from competent
unaffiliated parties.
5. RELATED PARTY TRANSACTIONS
--------------------------
Pursuant to the Partnership Agreement, an initial partnership
contribution of $10,000 was made by the Initial Limited Partner. Upon
admission of additional limited partners at the closings, the Initial Limited
Partner withdrew from the Partnership.
Pursuant to the Management Agreement as descirbed in Note 4 above, the
Partnership owed the Managing General Partner $144,609 at June 30, 1997,
which includes the second quarter management fee.
At June 30, 1997, the Partnership owed the two Independent General
Partners $8,214 each for the second quarter Independent General Partner fee
as defined in the Partnership Agreement.
<PAGE>
<PAGE> 9
RENAISSANCE CAPITAL PARTNERS II, LTD.
Notes to Financial Statements
June 30, 1997
6. 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 Managing General Partner 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.
Generally, debt securities will be valued at their face value. However,
if the debt is impaired, an appropriate valuation reserve will be established
or the investment discounted to estimated realizable value. Conversely, if
the underlying stock has appreciated in value and the conversion feature
justifies a premium value, such premium will of necessity be recognized.
The Managing General Partner, subject to the approval and supervision of
the Independent General Partners, will be responsible for determining fair
value.
During the quarter ended June 30, 1997, the Partnership realized a gain
of $1,073,184 on the sale of 153,375 shares of Industrial Holdings, Inc. A
loss of $40,845 was realized on the sale of 170,000 shares of Coded
Communications, Inc.
The Partnership advanced Biodynamics International, Inc. an additional
$1,000,000 during the current quarter. This was combined with $10,027 of
accrued interest receivable under terms of a promissory note.
Effective June 18, 1997, the Partnership and Amerishop, Inc. entered
into a surrender agreement and a bill of sale and omnibus assignment whereby
Amerishop voluntarily surrendered possession of all assets subject to
security interests and liens to the Partnership. The Partnership has
assigned the assets surrendered to Total Choice, Inc., a private Texas
Corporation for 60% of that company's common stock. The estimated fair value
of the assets transferred is $700,000. In addition, the Partnership has
agreed to purchase $300,000 of preferred stock in Total Choice. On July 2,
1997, $75,000 was advanced on this purchase.
<PAGE>
<PAGE> 10
RENAISSANCE CAPITAL PARTNERS II, LTD.
Notes to Financial Statements
June 30, 1997
6. INVESTMENTS (continued)
-----------
INVESTMENT VALUATION SUMMARY
<TABLE>
<CAPTION>
CONVERSION FAIR
COST OR FACE VALUE VALUE
<S> <C> <C> <C>
TOTAL CHOICE, INC.
Common Stock $ 700,000 $ 700,000 $ 700,000
BIODYNAMICS INTERNATIONAL, INC.
Preferred stock 4,164,826 4,164,826 4,164,826
Promissory Notes 1,384,091 1,384,091 1,384,091
CODED COMMUNICATIONS, INC.
Preferred Stock 4,654,588 4,654,588 4,654,588
Common Stock 517,025 294,230 226,576
Promissory Note 311,060 311,060 311,060
CONSOLIDATED HEALTH CARE ASSOCIATES, INC.
Preferred Stock 1,695,984 896,485 842,696
Common Stock 2,500,000 1,128,531 1,010,819
Promissory Notes 264,000 264,000 264,000
INDUSTRIAL HOLDINGS, INC.
12% Convertible Debentures, Conversion
price $3.26, maturity 10/1/99 200,000 682,515 675,690
SCIENTIFIC SOFTWARE, INC.
Convertible Debentures,
Conversion price $3.33, maturity 10/1/99 1,500,000 1,500,000 1,500,000
Common Stock 305,610 178,748 250,247
<PAGE>
<PAGE> 11
RENAISSANCE CAPITAL PARTNERS II, LTD.
Notes to Financial Statements
June 30, 1997
6. INVESTMENTS (continued)
-----------
INVESTMENT VALUATION SUMMARY (continued)
CONVERSION FAIR
COST OR FACE VALUE VALUE
<S> <C> <C> <C>
STARCOM COMMUNICATIONS
Common Stock 30,000 30,000 30,000
TRICOM CORPORATION
12% Convertible Debenture,
Conversion price $.50, maturity 11/1/99 1,500,000 1,500,000 1,500,000
Promissory Notes 484,000 484,000 484,000
Common Stock 16,000 16,000 16,000
PROTECH, INC.
Promissory Notes 67,500 67,500 -
---------- ----------- -----------
$22,908,583 $22,301,283 $20,909,922
=========== =========== ===========
</TABLE>
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.
7. SUBSEQUENT EVENTS
-----------------
Subsequent to the end of the quarter, the Partnership advanced $100,000
to Amerishop, Inc. This indebtedness is evidenced by a 10% promissory note
due October 5, 1997.
The Partnership foreclosed on the assets of Prism Group, Inc. on October
10, 1996 and is currently in the process of selling the remaining assets. It
is anticipated that recovery will be nominal.
<PAGE>
<PAGE> 12
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
(1) MATERIAL CHANGES IN FINANCIAL CONDITION
---------------------------------------
Discuss material changes from end of preceding fiscal year to date of
most recent interim balance sheet provided. If necessary for an
understanding, discuss seasonal fluctuations.
For the quarter ending June 30, 1997, the Partnership's net assets
resulting from operations decreased approximately $2,033,682, and the total
partners' equity account also declined. These declines reflect a lower
overall valuation for those investments held in the portfolio, and result
primarily from the loss recognized in connection with the Partnership s
transfer of assets from Amerishop Corp. to Total Choice, Inc., in which the
Partnership recognized a loss on its investment in Amerishop, Corp. (see
related discussions below). These losses were partially mitigated by capital
gains realized on the sale of shares of Industrial Holdings, Inc.
The following portfolio transactions are noted for the quarter ended
June 30, 1997 (portfolio companies are herein referred to as the "Company"):
AMERISHOP CORP. Effective June 18, 1997, the Partnership and Amerishop
Corp. entered into a "Surrender Agreement" and "Bill of Sale and Omnibus
Assignment" whereby the Partnership received all of the assets of the
business, except receivables pledged on senior debt and any proceeds, for
cancellation of all Convertible Debentures and Notes held by the Partnership.
The new assets surrendered, which were valued at $700,000, were
transferred directly into Total Choice, Inc., a newly formed Texas
Corporation. (See Total Choice, Inc. below.) The Partnership recognized a
$3,028,448 loss on the transaction.
BIODYNAMICS INTERNATIONAL, INC. On April 29, 1997, the Partnership
advanced $500,000 to Biodynamics, Inc. under terms of a 12% Promissory Note
due on June 30, 1997. Effective June 30, 1997, the Partnership advanced an
additional $500,000 upon execution of a "New Note and Security Agreement"
which modified, extended and substituted for the April 29, 1997 Promissory
Note of $500,000 and accrued interest thereon of $10,027.40. This new note
for $1,010,027.40 bears interest at 12% per annum, with principal and
interest due September 30, 1997, and is secured by a lien on substantially
all of the Company s assets.
CODED COMMUNICATIONS, INC. During the quarter ended June 30, 1997, the
Partnership sold 170,000 shares of common stock of the Company for $53,633
resulting in a loss of $40,815. Total sales for the six month period have
been 370,006 shares of common stock for a cumulative sale price of $129,810
which represents a loss of $75,752.
<PAGE>
<PAGE> 13
CONSOLIDATED HEALTH CARE ASSOCIATES, INC. Effective May 1, 1997, the
Partnership and the Company entered into a new loan agreement which cancelled
the $265,000 multiple advance Promissory Note due on April 17, 1999 and
replaced it with a new installment note. The new 10% Installment Promissory
Note and Security Agreement which was executed calls for 23 monthly payments
of $5,609.22 beginning June 15, 1997 and a final installment of $173,836.63
due June 15, 1999.
Subsequent to June 30, 1997, the Partnership and the Company entered
into a bridge loan agreement in the amount of $300,000. This agreement is in
the form of a Promissory Note bearing interest at 8% per annum, with all
principal and interest due on the outstanding balance of the note payable in
full on or before November 30, 1997. As of this writing, the Partnership has
advanced $50,000 to the Company in connection with the note.
In exchange for the bridge loan, the Company has agreed to modify and
amend the Preferred Stock Series A and B held by the Partnership. Pursuant
to the modification, the conversion price for the Series A Preferred Stock
shall be reduced from $.57 per share to $.38 per share, any and all
accumulated dividends which have accrued on the Series A Preferred Stock
shall be paid to the Partnership in common stock of the Company at $.38 per
share, and any and all accumulated dividends which have accrued on the Series
B Preferred Stock shall be paid to the Partnership in common stock of the
Company at $.25 per share.
INDUSTRIAL HOLDINGS, INC. During the three months ended June 30, 1997,
the Partnership converted $500,000 of its convertible debentures into 153,375
shares of common stock of the Company which were sold for $1,573,184. These
sales, when added to the sales of the first quarter, result in total proceeds
of $2,978,543 and a resulting gain of $2,042,890 for the six month period
ended June 30, 1997.
Subsequent to June 30, 1997, the Partnership converted the remaining
$200,000 of its Convertible Debentures into 61,350 shares of common stock of
the Company. At this writing, 3,000 shares of the common stock have been
sold resulting in net proceeds to the Partnership of $35,625, of which
$25,845 represents capital gains.
TOTAL CHOICE, INC. The assets obtained from the "Surrender Agreement"
and "Bill of Sale and Omnibus Assignment" between the Partnership and
Amerishop, Inc., valued at $700,000, were exchanged for a 60% interest in the
common stock of Total Choice, Inc., a Texas Company created to utilize the
assets obtained from Amerishop. In addition to the common stock investment,
the Partnership invested $300,000 in preferred stock of the Company, which
will be issued during the third quarter.
TRICOM, INC. In accordance with a plan of reorganization, the
Partnership exchanged its 12%, $1,000,000 Convertible Debenture dated
November 19, 1992, its $500,000 Convertible Debenture dated March 26, 1993,
its $200,000 12.5% Promissory Note dated July 1, 1994, its $50,000 12.5%
Promissory Note dated December 29, 1994, and the unpaid interest on all of
its debt totaling $403,600, for 21,536 shares of Tricom Convertible Preferred
Stock, par value $100 per share ($2,153,600). The Preferred Stock is
convertible at the option of the holder into common stock at $4.00 per share.
<PAGE>
<PAGE> 14
A one time adjustment to $2.00 per share will be made if the Company has not
raised $2,000,000 of new equity capital by December 31, 1998.
The Partnership also exchanged its $54,000 and $30,000 notes along with
its $150,000 bridge loan for 520,000 shares of common stock. In addition,
the Partnership received a warrant to purchase 250,000 shares of the
Company's common stock at $2.00 per share.
No additional investments were made during the quarter ended June 30,
1997, except as outlined above.
(2) MATERIAL CHANGES IN OPERATIONS
------------------------------
Discuss material changes with respect to the most recent year-to-date
period and corresponding period for prior year, if most recent quarter
included also covers changes for quarterly period.
In the three month period ended June 30, 1997, the Partnership recorded
net income from operations of $315,356, which results from a rise in interest
income. Interest income for the quarter rose primarily because of the
recapitalization of Tricom, Inc., in which the Partnership agreed to
capitalize $403,600 in interest owed to the Partnership in exchange for
common stock of Tricom, Inc.
Income received is primarily from interest income on a portfolio of
Convertible Debenture investments and upon the sale of common stock. In
prior quarters, as investments were committed or closed, income from closing
fees and commitment fees were also recorded. Because the Partnership is not
currently considering additional portfolio investments, no further amount of
income from closing and commitment fees is expected. This source of income
could arise again in the event funds become available for new investments.
Portfolio investments still held as debentures require interest payments
generally on either a monthly or quarterly basis. As of June 30, 1997,
Biodynamics International, Inc. is in arrears in interest payments to the
Partnership in the aggregate amount of $73,939.54. Consolidated Health Care
Associates, Inc. is in arrears in interest payments to the Partnership in the
aggregate amount of $3,373.33.
On April 15, 1997, the Partnership made a $1,000,000 distribution of
income to partners.
<PAGE>
<PAGE> 15
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 II, LTD.
August 12, 1997 /s/ Russell Cleveland
----------------------------------------
Renaissance Capital Group, Inc.,
Managing General Partner
Russell Cleveland, President
August 12, 1997 /s/ Barbe Butschek
---------------------------------------
Renaissance Capital Group, Inc.,
Managing General Partner
Barbe Butschek, Chief Financial Officer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 20,698,284
<INVESTMENTS-AT-VALUE> 18,346,694
<RECEIVABLES> 99,953
<ASSETS-OTHER> 84,650
<OTHER-ITEMS-ASSETS> 3,369,877
<TOTAL-ASSETS> 21,901,174
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 161,037
<TOTAL-LIABILITIES> 161,037
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 38,983,804
<SHARES-COMMON-STOCK> 43,304
<SHARES-COMMON-PRIOR> 43,434
<ACCUMULATED-NII-CURRENT> (73,360)
<OVERDISTRIBUTION-NII> 2,412,955
<ACCUMULATED-NET-GAINS> (12,405,762)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (2,351,590)
<NET-ASSETS> 21,740,137
<DIVIDEND-INCOME> 28,910
<INTEREST-INCOME> 553,501
<OTHER-INCOME> 0
<EXPENSES-NET> 343,569
<NET-INVESTMENT-INCOME> 238,842
<REALIZED-GAINS-CURRENT> (1,061,476)
<APPREC-INCREASE-CURRENT> (3,030,696)
<NET-CHANGE-FROM-OPS> (3,853,330)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 312,202
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 687,798
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 130
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (4,932,706)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (11,344,286)
<OVERDISTRIB-NII-PRIOR> 1,725,157
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 231,096
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 343,569
<AVERAGE-NET-ASSETS> 24,206,490
<PER-SHARE-NAV-BEGIN> 615.39
<PER-SHARE-NII> 5.45
<PER-SHARE-GAIN-APPREC> (93.41)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 23.21
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 504.22
<EXPENSE-RATIO> .014
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
