<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
Commission file number 0-18042
COMMUNITY INVESTMENT PARTNERS II, L.P.
______________________________________________________________________
(Exact name of registrant as specified in its charter)
MISSOURI 43-1609351
______________________________________________________________________
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
12555 Manchester
St. Louis, Missouri 63131
______________________________________________________________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (314) 515-2000
__________________
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.
(1) YES X NO (2) YES NO X
____ ____ ____ ____
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COMMUNITY INVESTMENT PARTNERS II, L.P.
INDEX
Page
Number
Part I.FINANCIAL INFORMATION
Item 1.Financial Statements
Balance Sheet ...........................................3
Schedule of Portfolio Investments .......................4
Income Statement ........................................6
Statement of Cash Flows .................................7
Statement of Changes in Partnership Capital .............8
Notes to Financial Statements ...........................9
Item 2.
Management's Discussion and Analysis of Financial
Condition and Results of Operations .....................10
Part II.OTHER INFORMATION *
Item 1.Legal Proceedings.......................................13
Item 6.Exhibits and Reports on Form 8-K........................13
Signatures ..............................................14
* Items 2,3,4 and 5 are omitted as they are not applicable
<PAGE>
COMMUNITY INVESTMENT PARTNERS II, L.P.
BALANCE SHEET
(Unaudited)
March 31, December 31,
1997 1996
ASSETS
Investments at Fair Market Value
(cost $1,540,015 and $1,412,628,
respectively) $ 1,498,654 $ 1,397,330
Cash and Cash Equivalents 330,008 540,528
Deferred Organizational Costs, net 27,512 36,683
Accrued Interest Receivable 14,880 17,835
Prepaid Expenses - 2,449
___________ ___________
TOTAL ASSETS $ 1,871,054 $ 1,994,825
=========== ===========
LIABILITIES AND PARTNERSHIP CAPITAL
Liabilities:
Accrued Expenses $ 7,140 $ 12,100
___________ __________
TOTAL LIABILITIES 7,140 12,100
___________ __________
Partnership Capital:
Capital - Limited Partners 1,845,156 1,962,730
Capital - General Partners 18,758 19,995
____________ __________
TOTAL PARTNERSHIP CAPITAL 1,863,914 1,982,725
____________ __________
TOTAL LIABILITIES AND
PARTNERSHIP CAPITAL $ 1,871,054 $ 1,994,825
=========== ==========
The accompanying notes are an integral part of these financial
statements.
<PAGE>
COMMUNITY INVESTMENT PARTNERS II, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS
AS OF MARCH 31, 1997
Company Fair Market
Initial Investment Nature of Business Value
Date Investment Cost March 31, 1997
Houghton Acquisition Organized for the purpose of
Corporation acquiring Hutchinson Foundry
Products, Inc.
January 2, 1997 8% Convertible Promissory
Note, due 1/2/99 77,400 77,400
Contingent EBITDA
Promissory Note 0 0
Global Surgical Formed to acquire the Urban
Corporation Microscope Division and the
Surgical Mechanical Research
subsidiary of Storz Medical
January 31, 19943,000 shares of Common
Stock 300,000 300,000
June 30, 1995 7% Promissory Note,
due 6/29/00 45,000 45,000
January 26, 19967% Promissory Note,
due 1/25/01 67,500 67,500
Computer Motion,
Inc. Develops and supplies
medical robotics
May 3, 1996 Prime +1% Term Note,
due 10/31/98 125,000 125,000
September 9, 1996 25,000 shares of
Series E Preferred
Stock 125,000 125,000
25,000 warrants 250 250
FCOA Acquisition A chain of greeting card/
Corporation party stores which offer
(d/b/a Factory Card a full line of products at
Outlet) everyday value prices
July 30, 1996 26,063 Common Shares 249,865 208,504
The accompanying notes are an integral
part of these financial statements.
<PAGE>
COMMUNITY INVESTMENT PARTNERS II, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS
Company Fair Market
Initial Investment Nature of Business Value
Date Investment Cost March 31, 1997
______________________________________________________________________
__
Permalok Corporation Develops and sells steel
pipe joining system to the
domestic underground
utility construction industry
September 24, 1996 25,000 shares of
Convertible Preferred
Stock 200,000 200,000
Stereotaxis, Inc. Develops and markets a system
by which surgery can be conducted
remotely using computer
controlled magnets
December 30, 1996 138,889 shares of
Preferred Stock 100,000 100,000
Medical Device
Alliance, Inc. Specializes in the development,
manufacture and marketing of
devices for ultrasound-assisted
lipoplasty
January 24, 199720,000 shares of Stock 100,000 100,000
Online Resources &
Communications
Corporation Provides a variety of inter-
active banking and financial
services to end-users and
corporate customers in the
banking and financial
services industry
March 17, 1997 8% Promissory Note, due
8/31/97 150,000 150,000
Warrants to purchase
20,000 shares of Common
Stock, expiring 1/31/04 0 0
_____________ _________
$1,540,015 $1,498,654
============= =========
The accompanying notes are an integral part of these financial
statements.
<PAGE>
COMMUNITY INVESTMENT PARTNERS II, L.P.
INCOME STATEMENT
(Unaudited)
Three Months Three Months
Ended Ended
March 31, March 31,
1997 1996
INCOME
Interest & Dividend Income $ 8,168 $ 16,646
Gain on Sale of Investment 490,766 -
______________ ______________
TOTAL INCOME 498,934 16,646
____________ ____________
EXPENSES
Amortization of Deferred Organizational Costs9,171 9,171
Independent General Partners' Fees 3,000 3,000
Management Fees 7,140 7,610
Professional Fees 9,721 783
______________ ______________
TOTAL EXPENSES 29,032 20,564
______________ ______________
Net Income (Loss) before
Unrealized Losses 469,902 (3,918)
Net Unrealized Losses
on Investments (26,063) -
___________ _____________
NET INCOME (LOSS) $ 443,839 $ (3,918)
============ =============
Per Unit Information:
Net Income (Loss) (as of March 31, 1997 and
March 31, 1996) $ 3.94 $ (.03)
============ =============
Net Asset Value (as of March 31, 1997 and
December 31, 1996) $ 16.56 $ 17.87
============ =============
Units Outstanding:
Limited Partners 111,395 111,395
General Partners 1,135 1,135
The accompanying notes are an integral part of these financial
statements.
<PAGE>
COMMUNITY INVESTMENT PARTNERS II, L.P.
STATEMENT OF CASH FLOWS
(Unaudited)
Three Months Three Months
Ended Ended
March 31, March 31,
1997 1996
CASH FLOWS PROVIDED (USED) BY OPERATING
ACTIVITIES:
Net Income (Loss) $ 443,839 $ (3,918)
Adjustments to reconcile Net Income
(Loss) to Net
Cash Provided by Operating Activities -
Amortization of Deferred Organization Costs9,171 9,171
(Decrease) Increase in Accrued Expenses (4,960) 10,610
Decrease in Accrued Interest Receivable 2,955 3,539
Decrease in Prepaid Expense 2,449 -
Purchase of Portfolio Investments (250,000) (67,500)
Sale of Portfolio Investments 613,379 -
Unrealized Losses on Portfolio
Investments 26,063 -
Net Realized Gains on Sale of Portfolio
Investments (490,766) -
______________ ______________
Total Cash Provided (Used) for
Operating Activities 352,130 (48,098)
CASH FLOWS USED BY FINANCING
ACTIVITIES:
Capital Distributions (562,650) -
______________ ______________
Total Cash Used by Financing Activities (562,650) -
______________ ______________
Net Decrease in Cash
and Cash Equivalents (210,520) (48,098)
CASH AND EQUIVALENTS, beginning of year 540,528 1,399,026
______________ ______________
CASH AND EQUIVALENTS, end of year $ 330,008 $ 1,350,928
============== ==============
The accompanying notes are an integral part of these financial
statements.
<PAGE>
COMMUNITY INVESTMENT PARTNERS II, L.P.
STATEMENT OF CHANGES IN PARTNERSHIP CAPITAL
(Unaudited)
Three Months Ended March 31, 1997 and 1996
Limited General
Partners Partners Totals
Balance, December 31, 1995$ 1,994,572 $ 20,317 $ 2,014,889
Net income (loss) (3,878) (40) (3,918)
__________ ________ __________
Balance March 31, 1996 $1,990,694 $ 20,277 $ 2,010,971
Balance, December 31, 1996 $1,962,730 $ 19,995 $ 1,982,725
Distribution (556,975) (5,675) (562,650)
Net income (loss) 439,401 4,438 443,839
__________ ________ ___________
Balance, March 31, 1997 $1,845,156 $ 18,758 $ 1,863,914
The accompanying notes are an integral part of these financial
statements.
<PAGE>
COMMUNITY INVESTMENT PARTNERS II, L.P.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
BASIS OF PRESENTATION
Community Investment Partners II, L.P. (CIP II) is a limited
partnership which has elected to be a business development company
under the Investment Company Act of 1940, as amended. As a business
development company, the partnership is required to invest at least
70% of its total assets in qualifying investments as specified in the
Investment Company Act. CIP Management, L.P. (Management), a limited
partnership, is the Managing General Partner of CIP II. Management is
responsible for making all decisions regarding CIP II's investment
portfolio and is not engaged in any other activities.
CIP II was formed May 8, 1992. The Partnership raised $1,406,625
through a public offering of its units during December, 1992. The
Partnership executed a call to each partner requesting the deposit of
an amount equal to the initial capital contribution on August 25,
1994.
All portfolio investments are carried at cost until significant
developments affecting an investment provide a basis for revaluation.
Thereafter, portfolio investments are carried at fair value as
obtained from outside sources or at a value determined quarterly by
the Managing General Partner under the supervision of the Independent
General Partners. Investments in securities traded on a national
securities exchange are valued at the latest reported sales price on
the last business day of the period. If no sale has taken place, the
securities are valued at the last bid price. If no bid price has been
reported, or if no exchange quotation is available, the securities are
valued at the quotation obtained from an outside broker.
<PAGE>
COMMUNITY INVESTMENT PARTNERS II, L.P.
MANAGEMENT'S FINANCIAL DISCUSSION
RESULTS OF OPERATIONS
Net income and loss for the three months ended March 31, 1997 and
1996, was $443,839 and ($3,918) respectively. Interest and dividend
income was derived from investments and cash balances. Expenses
incurred were related to amortization of deferred organization costs,
independent general partners' fees, management fees, trustee fees and
legal fees.
On January 2, 1997, the Partnership sold its investment in Houghton
Acquisition Corporation (HAC). In exchange for the 2,000 shares of
Class A cumulative redeemable Preferred Stock, the Partnership
received $613,379 in cash and a Convertible Promissory Note in the
principal amount of $77,400 due January 2, 1999 with interest payable
at 8%. A Promissory Note in the principal amount of $25,800 was also
received but is contingent upon the future income of HAC before
interest, taxes, depreciation, amortization and corporate charges. As
the Partnership's investment in HAC was recorded at original cost of
$200,013 as of December 31, 1996, the above transaction resulted in a
gain of approximately $490,000 during the first quarter of 1997. Due
to the contingent nature of the Promissory Note in the principal
amount of $25,800, a gain has not been recorded for this amount as of
the transaction date. This Note has been recorded at an original cost
of $0, and additional gain will be recorded if, or when, payments
become due under terms of the Note.
On January 6, 1997, the Partnership made a distribution of $5 per
unit.
On January 24, 1997, the Partnership invested $100,000 in Medical
Device Alliance, Inc. and received 20,000 shares of common stock.
Medical Device Alliance, Inc. specializes in the development,
<PAGE>
manufacture and marketing of devices for ultrasound-assisted
lipoplasty.
On March 17, 1997, the Partnership invested $150,000 in Online
Resources & Communication Corporation, and received an 8% Promissory
Note due August 31, 1997 and warrants to purchase 20,000 shares of
common stock, expiring January 31, 2004. The Promissory Note and
accrued interest will be converted into convertible preferred stock
once the company meets certain capitalization requirements. The
company provides a variety of interactive banking and financial
services to end users and corporate customers in the banking and
financial services industry.
During the period ended March 31, 1997, an unrealized loss of
$26,063 has been recorded for the FCOA Acquisition Corporation
investment. Cumulative unrealized losses related to this investment
total $41,361 as of March 31, 1997.
<PAGE>
INVESTMENT TRANSACTIONS
Following is a summary of portfolio investment transactions during the
quarter ended March 31, 1997.
For the quarter ended March 31, 1997
Realized
Investment Cost Proceeds Gain (Loss)
___________ __________ __________ ____________
Purchases:
Medical Device Alliance,
Inc. $ 100,000 $ - $ -
Online Resources &
Communications
Corporation 150,000 - -
__________ __________ _________
Total Purchases$ 250,000 $ - $ -
========== ========== =========
Sales:
Houghton
Acquisition
Corp. $ 200,013 $ 690,779 (a)$ 490,766
__________ __________ __________
Total Sales $ 200,013 $ 690,779 $ 490,766
========== ========== ==========
(a)Proceeds included $613,379 in cash, a $77,400 Convertible Promissory
Note and a $25,800 Promissory Note contingent upon the future income of
HAC before interest, taxes, depreciation, amortization and corporate
charges. Due to the contingent nature of the $25,800 Promissory Note,
a gain has not been recorded to this transaction. This note has been
recorded at an original cost of $0, and additional gain will be
recorded if, or when, payments become due under terms of the Note.
FINANCIAL CONDITION
See Schedule of Portfolio Investments, page 4.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The partnership's total capital of $1,863,914 as of March 31, 1997,
consisted of $1,845,156 in limited partner capital and $18,758 in
general partner capital. Net income was allocated to the limited
partners in the amount of $439,401 and to the general partners in the
amount of $4,438.
The Partnership is actively reviewing potential portfolio
investments. Until the Partnership invests in portfolio investments,
it intends to invest its cash balances in a money market account. At
March 31, 1997, $283,000 was invested in the money market account.
Such investments provide the Partnership with the liquidity necessary
for investments as opportunities arise.
SUBSEQUENT EVENTS
On April 7, 1997, the Partnership invested $100,000 in Advanced
UroScience, Inc. and received 25,000 shares of Series A Preferred
Stock. Advanced UroScience, Inc. is developing Acyst, an injectable
bulking agent, for the treatment of stress urinary incontinence.
<PAGE>
COMMUNITY INVESTMENT PARTNERS II, L.P.
Item 1: Legal Proceedings
The partnership is not a party to any material pending legal
proceedings.
Item 6: Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
No reports were filed on Form 8-K for the quarter ended March 31,
1997.
<PAGE>
SIGNATURES
Pursuant to the requirements 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.
COMMUNITY INVESTMENT PARTNERS II, L.P.
By: CIP Management, L.P., Managing General Partner
By: CIP Management, inc., Its Managing General Partner
/s/Daniel A. Burkhardt President, Treasurer
_______________________ and Director
Daniel A. Burkhardt May 8, 1997
/s/Ray L. Robbins Vice-President
_______________________ and Director May 8, 1997
Ray L. Robbins
<PAGE>
SIGNATURES
Pursuant to the requirements 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.
COMMUNITY INVESTMENT PARTNERS II, L.P.
By: CIP Management, L.P., Managing General Partner
By: CIP Management, inc., Its Managing General Partner
President, Treasurer
_______________________ and Director
Daniel A. Burkhardt May 8, 1997
Vice-President
_______________________ and Director May 8, 1997
Ray L. Robbins
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted fromt he
financial statements for Community Investment Partners II, L.P. for the quarter
ended March 31, 1997 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0000887499
<NAME> COMMUNITY INVESTMENT PARTNERS II, L.P.
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