<PAGE>
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998
-----------------
Commission file number 0-20213
-------
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 Road
St. Louis, Missouri 63131
______________________________________________________________________
(Address and principal executive office) (Zip Code)
Registrant's telephone number, including area code (314) 515-2000
______________
Securities registered pursuant to Section 12(b) of the Act: None.
Securities registered pursuant to Section 12(g) of the Act: None.
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 [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of Registrant's knowledge in definitive proxy or
information statements incorporated by reference in part III of this
Form 10-K or any amendment to this form 10-K. YES [ ] NO [ X ]
As of March 15, 1999, 90,404 units of limited partnership interest
(Units), representing net assets of $1,373,301 were held by non-
affiliates. There is no established public market for such Units.
<PAGE>
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Prospectus of the Registrant dated November 4, 1992,
filed with the Securities and Exchange Commission are incorporated by
reference in Part I, Part II and Part III hereof.
<PAGE>
<PAGE>
<TABLE>
COMMUNITY INVESTMENT PARTNERS II, L.P.
TABLE OF CONTENTS
<CAPTION>
PART I Page
----
<S> <C>
Item 1. Business 4
Item 2. Properties 6
Item 3. Legal Proceedings 6
Item 4. Submission of Matters to a Vote of Security Holders 6
PART II
Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters 7
Item 6. Selected Financial Data 8
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
Item 8. Index to Financial Statements and Supplementary Financial Data 11
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosures 29
PART III
Item 10. Directors and Executive Officers of the Registrant 30
Item 11. Executive Compensation 31
Item 12. Security Ownership of Certain Beneficial Owners and
Management 31
Item 13. Certain Relationships and Related Transactions 32
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K 33
SIGNATURES 34
INDEX TO EXHIBITS 35
</TABLE>
<PAGE>
<PAGE>
PART I
ITEM 1. BUSINESS
Community Investment Partners II, L.P. (the "Partnership") was
formed to seek long-term capital appreciation by making investments in
companies and other special investment situations. The Partnership will
not engage in any other business or activity. The Partnership will
dissolve on December 31, 2007, subject to the right of the Individual
General Partners to extend the term for up to two additional two-year
periods.
The Partnership 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 assets in qualifying investments as specified in the Investment
Company Act.
The Partnership was formed on May 8, 1992, under the Revised
Uniform Limited Partnership Act of Missouri. CIP Management, L.P.,
LLLP, the Managing General Partner, is a Missouri limited liability
limited partnership formed on October 10, 1989 as a limited partnership
and registered as a limited liability limited partnership on July 23,
1997. The general partner of CIP Management, L.P., LLLP is CIP
Management, Inc., an indirect subsidiary of Edward D. Jones & Co., L.P.
The Partnership participated in a public offering of its limited
partnership interests in 1992. The Partnership sold 111,410 Units of
limited partnership interest and 1,120 units of general partnership
interest for an aggregate price of $1,406,625. After offering expenses,
the Partnership received approximately $1,224,000 in proceeds available
for investment. The Partnership executed a call to each partner
requesting the deposit of an amount equal to the initial capital
contribution on August 25, 1994.
The information set forth under the captions "Investment
Objectives & Policies" and "Regulation" in the Prospectus of the
Partnership dated November 4, 1992, filed with the Securities and
Exchange Commission pursuant to Rule 497(b) under the Securities Act of
1933, is incorporated herein by reference.
RISKS OF UNIT OWNERSHIP
The purchase and ownership of Units involve a number of
significant risks and other important factors. The portfolio company
investments of the Partnership involve a high degree of business and
financial risk that can result in substantial losses. Among these are
the risks associated with investment in companies with little operating
history, companies operating at a loss or with substantial variations in
operating results from period to period, companies with the need for
substantial additional capital to support expansion or achieve or
maintain a competitive position, companies which may be highly
leveraged, companies which may not be diversified and companies in which
the Partnership may be the sole or primary lender. The Partnership
intends to invest in only a few companies. Therefore, a loss or other
problem with a single investment would have a material adverse effect on
the Partnership.
<PAGE>
<PAGE>
Other risks include the Partnership's ability to find suitable
investments for its funds because of competition from other entities
having similar investment objectives. Risks may arise due to the
significant period of time that may elapse before the Partnership has
completed the selection of its portfolio company investments and the
significant period of time (typically four to seven years or longer)
which will elapse before portfolio company investments have reached a
state of maturity such that disposition can be considered. It is
unlikely that any significant distributions of the proceeds from the
disposition of investments will be made until the later years of the
term of the Partnership.
Portfolio companies may require additional funds. There can be no
assurance that the Partnership will have sufficient funds from reserves
or borrowing to make such follow-on investments which may have a
substantial negative impact on a portfolio company in need of additional
funds.
All decisions with respect to the management of the Partnership,
including identifying and making portfolio investments, are made
exclusively by the General Partners. Limited Partners must rely on the
abilities of the General Partners. The key personnel of the Managing
General Partner have considerable prior experience in investment banking
and in structuring investments. In addition, they have prior experience
in the operation of Community Investment Partners, L.P., a business
development company with a similar investment strategy.
Ownership of the Units also entails risk because Limited Partners
may not be able to liquidate their investment in the event of an
emergency or for any other reason due to the substantial restrictions on
transfers contained in the Partnership Agreement and the lack of a
market for the resale of Units.
The information set forth under the captions "Risk and Other
Important Factors" (including the subsections "Risks of Investment,"
"Size of Partnership," "Ability to Invest Funds," "Time Required to
Maturity of Investments; Illiquidity of Investments," "Need for Follow-
on Investments," "Use of Leverage," "Unspecified Investments," "Reliance
on Management," "New Business," "No Market for Units" and "Federal
Income Tax Considerations") on pages 9 through 14 of the Prospectus of
Partnership dated November 4, 1992, filed with the Securities and
Exchange Commission pursuant to Rule 497(b) under the Securities Act of
1933 on November 4, 1992, is incorporated herein by this reference.
(This information has been restated herein pursuant to section 64(b) of
the Investment Company Act of 1940).
Partners should refer to the Partnership Agreement for more
detailed information.
EMPLOYEES
The Partnership has no employees. The Managing General Partner
performs management and administrative services for the operation of the
Partnership. The Management Agreement was amended to waive the annual
management fee of 1.5% of total assets to the Managing General Partner.
This payment was terminated after the second quarter of 1998. The
Managing General Partner is reimbursed by the Partnership for out of
pocket expenses in connection with finding, evaluating, structuring,
approving, monitoring and liquidating the Partnership's portfolio
investments.
<PAGE>
<PAGE>
ITEM 2. PROPERTIES
The Partnership does not own or lease any physical properties.
ITEM 3. LEGAL PROCEEDINGS
The Partnership is not a party to any material pending legal
proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the
period covered by this report.
<PAGE>
<PAGE>
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
There is no established public trading market for the Limited
Partnership interests. As of March 15, 1999, the total number of
holders of units is 131. The number of limited partnership units
outstanding is 111,395. The number of general partnership units
outstanding is 1,135 as of March 15, 1999.
The information set forth under the captions "Partnership
Distributions and Allocations" and "Transferability of Units" in the
Prospectus of the Partnership dated November 4, 1992, filed with the
Securities and Exchange Commission pursuant to Rule 497(b) under the
Securities Act of 1933 is incorporated herein by reference.
<PAGE>
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
STATEMENTS OF FINANCIAL CONDITION:
<CAPTION>
As of
December 31,
----------------------------------------------------------------------------------
1998 1997 1996 1995 1994
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Assets $1,709,411 $1,848,895 $1,982,725 $2,014,889 $2,645,511
Portfolio
Investments at
Fair Value 1,671,491 1,733,229 1,397,330 545,013 1,000,013
<CAPTION>
STATEMENTS OF INCOME:
For the Years Ended
December 31,
----------------------------------------------------------------------------------
1998 1997 1996 1995 1994
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Loss before
Realized Gains
(Losses) and
Unrealized Losses $ (26,925) $ (74,589) $ (16,866) $ (30,622) $ (86,345)
Realized Gains (Losses) - 511,973 - (600,000) -
Unrealized Losses (112,559) (8,564) (15,298) - -
Net (Loss) Income (139,484) 428,820 (32,164) (630,622) (86,345)
Per Unit of
Partnership Interest:
Net Asset Value 15.19 16.43 17.62 17.91 23.50
Net Loss before
Realized Gains
(Losses) and
Unrealized Losses (.24) (.66) (.15) (.27) (.77)
Realized Gains (Losses) - 4.55 - (5.33) -
Unrealized Losses (1.00) (.08) (.14) - -
Net (Loss) Income (1.24) 3.81 (.29) (5.60) (.77)
/TABLE
<PAGE>
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATION
(FISCAL YEAR 1998 VERSUS 1997)
Net loss for the year ended December 31, 1998, was $139,484,
compared to net income of $428,820 in 1997. The net loss is attributable
to net unrealized losses of $112,559 and no realized gains from sales of
investments. Net unrealized losses consist primarily of an unrealized
loss of $214,028 due to a decrease in share price of FCOA Acquisition
Corporation. This unrealized loss was partially offset by an unrealized
gain of $77,607 due to an increase in Computer Motion Inc. stock price.
The Partnership made no distributions during 1998. Director's fees
have been discontinued in 1998 due to the fact that initial investments
will no longer be made by the Partnership. Furthermore, the Management
Agreement was amended to waive the annual management fee of 1.5% of
total assets to the Managing General Partner. This payment was
terminated after the second quarter of 1998; fees for 1998 totaled
$14,325 compared to $28,851 for the full year 1997.
As of December 31, 1998, unrealized losses on investments totaled
$136,421. The future income or loss of the Partnership is contingent
upon the performance of the portfolio investments.
(FISCAL YEAR 1997 VERSUS 1996)
Net income for the year ended December 31, 1997, was $428,820,
compared to a net loss of $32,164 in 1996. The increase in net income
is mainly attributable to realized gains of $511,973 from the sale of
2,000 shares of Class A Cumulative Redeemable Preferred Stock of
Houghton Acquisition Corporation as outlined in Note 6 to the financial
statements. For 1997, there was a net unrealized loss on investments of
$8,564 due to the unrealized loss recorded for FOCI Acquisition
Corporation when the share price decreased. This unrealized loss was
offset by unrealized gains recorded for Computer Motion, Inc., which
participated in an initial public offering during the year. Income also
was derived from dividends and interest. However, dividend and interest
income decreased approximately $48,600, or 58%, from the prior year, due
to a smaller amount of cash funds invested in certificates of deposit
and money market funds. The cash was used to make several investments
which are outlined in the Schedule of Portfolio Investments and the
schedule of investment transactions included in Note 6 to the financial
statements. Expenses increased approximately $9,200, or 9%, from the
prior year due to higher legal and trustee fees.
The Partnership made a distribution of $5 per unit during 1997.
As of December 31, 1997, unrealized losses on investments totaled
$23,862. The future income or loss of the Partnership is contingent
upon the performance of the portfolio investments.
SUBSEQUENT EVENTS
The Partnership received a principal payment of $24,887 due
January 2, 1999, for the 8% Convertible Promissory Note from Hawk
Corporation. This related to the prior sale of the Partnership's
investment in Houghton Acquisition Corporation on January 2, 1997. In
addition, $527 was received for interest accrued for the fourth quarter
of 1998 on this Note.
<PAGE>
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Total capital for the Partnership as of December 31, 1998, was
$1,709,411 This consisted of $1,692,198 in Limited Partner capital and
$17,213 in General Partner capital.
Net loss of $139,484 for 1998 was allocated in the amount of
$138,089 to the Limited Partners and in the amount of $1,395 to the
General Partners .
At December 31, 1998, the Partnership had $26,598 in cash and cash
equivalents.
YEAR 2000 ISSUE
Although the Partnership has no Year 2000 issues that would result
from its own information systems, the Partnership has investments in
publicly and privately placed securities and loans. The Partnership may
be exposed to credit risk to the extent that the related borrowers are
materially adversely impacted by the Year 2000 issue.
<PAGE>
<PAGE>
ITEM 8. INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTARY
FINANCIAL DATA
<TABLE>
<CAPTION>
Page
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<S> <C>
Report of Independent Accountants 12
Schedule of Portfolio Investments as of
December 31, 1998 and 1997 13
Statements of Financial Condition as of December 31,
1998 and 1997 19
Statements of Income for the Years Ended
December 31, 1998, 1997 and 1996. 20
Statements of Cash Flows for the Years Ended
December 31, 1998, 1997 and 1996. 21
Statements of Changes in Partnership Capital for the
Years Ended December 31, 1998, 1997 and 1996. 22
Notes to Financial Statements. 23
</TABLE>
Financial Statement Schedules:
All financial statement schedules are omitted because they are not
applicable or the required information is shown in the financial
statements or notes thereto.
<PAGE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of
Community Investment Partners II, L.P.
In our opinion, the accompanying Statements of Financial Condition,
including the Schedule of Portfolio Investments, and the related
Statements of Income, of Cash Flows and of Changes in Partnership
Capital present fairly, in all material respects, the financial position
of Community Investment Partners II, L.P. (the "Partnership") at
December 31, 1998 and 1997, and the results of its operations, its cash
flows and the changes in its Partnership Capital for each of the three
years in the period ended December 31, 1998, in conformity with
generally accepted accounting principles. These financial statements
are the responsibility of the Partnership's management; our
responsibility is to express an opinion on these financial statements
based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made
by management, and evaluating the overall financial statement
presentation. We believe that our audits, which included confirmation
of portfolio investments owned at December 31, 1998, provide a
reasonable basis for the opinion expressed above.
As explained in Note 3, the financial statements include securities
valued at $1,433,054 (84 percent of net assets), whose values have been
estimated by the Managing General Partner in the absence of readily
ascertainable market values. Those estimated values may differ
significantly from the values that would have been used had a ready
market for the investments existed, and the differences could be
material.
PRICEWATERHOUSECOOPERS LLP
St. Louis, Missouri
March 12, 1999
<PAGE>
<PAGE>
<TABLE>
COMMUNITY INVESTMENT PARTNERS II, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS
As of December 31, 1998
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Company Nature of Business Fair Value
Investment Date Investment Cost (Note 3)
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
HAWK CORPORATION Designs, engineers, manufactures,
(Houghton Acquisition and markets friction products and precision
Corporation) engineered components
January 2, 1997 8% Convertible Promissory Note,
due 1/2/99 $ 25,800 $ 25,800
8% Contingent EBITDA
Promissory Note, due 4/30/00 - -
GLOBAL SURGICAL Formed to acquire the Urban
CORPORATION Microscope Division and the
Surgical Mechanical Research
subsidiary of Storz Medical
January 31, 1994 3,000 shares of Common Stock 300,000 300,000
June 30, 1995 7% Promissory Note, due 6/29/00 45,000 45,000
January 26, 1996 7% Promissory Note, due 1/25/01 67,500 67,500
COMPUTER MOTION, INC. Develops and supplies medical robotics
September 6, 1996 40,948 warrants to purchase
common stock, exercisable
at $4.569 per warrant through
5/2/03 8 8
September 6, 1996 16,208 shares of Common Stock 124,993 202,600
16,209 warrants to purchase
common stock, exercisable
at $7.712 per warrant,
through 12/31/03 250 250
FOCI 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 35,837
The accompanying notes are an integral
part of these financial statements.
<PAGE>
<PAGE>
<CAPTION>
COMMUNITY INVESTMENT PARTNERS II, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS (CONT'D.)
As of December 31, 1998
- ----------------------------------------------------------------------------------------------------------------
Company Nature of Business Fair Value
Investment Date Investment Cost (Note 3)
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
PERMALOK CORPORATION Develops and sells steel
pipe joining system to the
domestic underground
utility construction industry
Sept. 24, 1996 25,000 shares of Convertible
Preferred Stock and 25,000
Warrants to purchase convertible
Preferred Stock, exercisable
at $9.60 per share, through 7/31/03 $ 200,000 $ 200,000
STEREOTAXIS, INC. Develops and markets a system
by which surgery can be conducted
remotely using computer
controlled magnets
Dec. 30, 1996 138,889 shares of Preferred Stock 100,000 100,000
Nov. 12, 1997 28,019 shares of Series C Preferred
Stocks and 5,281 Warrants to purchase
Preferred Stock, exercisable at
$1.50 per share, through 10/31/02. 42,029 42,029
June, 26, 1998 66,667 shares of Series C
Preferred Stock 100,001 100,001
MEDICAL DEVICE Specializes in the development,
ALLIANCE, INC, manufacture and marketing of devices
for ultrasound-assisted lipoplasty
January 24, 1997 20,000 shares of Common Stock 100,000 100,000
ONLINE RESOURCES & Provides a variety of inter-active
COMMUNICATIONS banking and financial services to end-
CORPORATION users and corporate customers in the
banking and financial services industry
March 17, 1997 1,525 shares of Series C
Convertible Preferred Stock 152,466 152,466
Warrants to purchase
20,327 shares of Common
Stock at $3.00 per warrant,
expiring 6/1/02 - -
The accompanying notes are an integral
part of these financial statements.
<PAGE>
<PAGE>
<CAPTION>
COMMUNITY INVESTMENT PARTNERS II, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS (CONT'D.)
As of December 31, 1998
- ----------------------------------------------------------------------------------------------------------------
Company Nature of Business Fair Value
Investment Date Investment Cost (Note 3)
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
ADVANCED UROSCIENCE, Developing Acyst, an injectable
INC. bulking agent, for the treatment
of stress urinary incontinence.
April 7, 1997 25,000 shares of Series A
Preferred Stock $ 100,000 $ 100,000
NEOCRIN COMPANY Research and development
of minimally invasive,
encapsulated cellular transplants
for the treatment of diabetes.
Sept. 3, 1997 50,000 shares of Series E
Preferred Stock 100,000 100,000
BIOSEPARATIONS, INC. Develops automated
instrumentation that can
isolate and process cells for
use in biotechnology,
diagnostic, therapeutic, and
clinical research applications
October 14, 1997 50,000 shares of Series B
Preferred Stock 100,000 100,000
Warrant to purchase 9,091
shares of Common Stock
at $1.10 per share, through
10/15/02 - -
Warrant to purchase 50,000
shares of Series B Preferred Stock
at $0.20 per share, through 1/31/01 - -
---------- ----------
TOTAL INVESTMENTS $1,807,912 $1,671,491
========== ==========
The accompanying notes are an integral
part of these financial statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
COMMUNITY INVESTMENT PARTNERS II, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS
As of December 31, 1997
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Company Nature of Business Fair Value
Investment Date Investment Cost (Note 3)
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
HAWK CORPORATION Designs, engineers, manufactures,
(Houghton Acquisition and markets friction products and
Corporation) precision engineered components
January 2, 1997 8% Convertible Promissory Note,
due 1/2/99 $ 77,400 $ 77,400
8% Contingent EBITDA
Promissory Note, due 4/30/00 - -
GLOBAL SURGICAL Formed to acquire the Urban
CORPORATION Microscope Division and the
Surgical Mechanical Research
subsidiary of Storz Medical
January 31, 1994 3,000 shares of Common Stock 300,000 300,000
June 30, 1995 7% Promissory Note, due 6/29/00 45,000 45,000
January 26, 1996 7% Promissory Note, due 1/25/01 67,500 67,500
COMPUTER MOTION, INC. Develops and supplies medical robotics
June 26, 1997 40,948 warrants to purchase
common stock, exercisable
at $4.569 per warrant through
5/2/03 8 8
August 12, 1997 16,208 shares of Common Stock 124,993 170,184
16,209 warrants to purchase
common stock, exercisable
at $7.712 per warrant,
through 12/31/03 250 250
FOCI 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 249,865 180,812
The accompanying notes are an integral
part of these financial statements.
<PAGE>
<PAGE>
<CAPTION>
COMMUNITY INVESTMENT PARTNERS II, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS (CONT'D.)
As of December 31, 1997
- ----------------------------------------------------------------------------------------------------------------
Company Nature of Business Fair Value
Investment Date Investment Cost (Note 3)
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
PERMALOK CORPORATION Develops and sells steel
pipe joining system to the
domestic underground
utility construction industry
Sept. 24, 1996 25,000 shares of Convertible
Preferred Stock and 25,000 Warrants
to purchase convertible Preferred Stock,
exercisable at $9.60 per share,
through 7/31/03 $ 200,000 $ 200,000
STEREOTAXIS, INC. Develops and markets a system
by which surgery can be conducted
remotely using computer
controlled magnets
Dec. 30, 1996 138,889 shares of Preferred Stock 100,000 100,000
Nov. 12, 1997 10% Convertible Promissory Note,
due 10/31/02 39,609 39,609
MEDICAL DEVICE Specializes in the development,
ALLIANCE, INC, manufacture and marketing of devices
for ultrasound-assisted lipoplasty
January 24, 1997 20,000 shares of Common Stock 100,000 100,000
ONLINE RESOURCES & Provides a variety of inter-
COMMUNICATIONS active banking and financial
CORPORATION services to end-users and
corporate customers in the
banking and financial
services industry
March 17, 1997 1,525 shares of Series C
Convertible Preferred Stock 152,466 152,466
Warrants to purchase
20,327 shares of Common
Stock at $3.00 per warrant,
expiring 6/1/02 - -
The accompanying notes are an integral
part of these financial statements.
<PAGE>
<PAGE>
<CAPTION>
COMMUNITY INVESTMENT PARTNERS II, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS (CONT'D.)
As of December 31, 1997
- ----------------------------------------------------------------------------------------------------------------
Company Nature of Business Fair Value
Investment Date Investment Cost (Note 3)
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
ADVANCED UROSCIENCE, Developing Acyst, an injectable
INC. bulking agent, for the treatment
of stress urinary incontinence.
April 7, 1997 25,000 shares of Series A
Preferred Stock $ 100,000 $ 100,000
NEOCRIN COMPANY Research and development
of minimally invasive,
encapsulated cellular transplants
for the treatment of diabetes.
Sept. 3, 1997 50,000 shares of Series E
Preferred Stock 100,000 100,000
BIOSEPARATIONS, INC. Develops automated
instrumentation that can
isolate and process cells for
use in biotechnology,
diagnostic, therapeutic, and
clinical research applications
October 14, 1997 50,000 shares of Series B
Preferred Stock 100,000 100,000
Warrant to purchase 9,091
shares of Common Stock
at $1.10 per share, through
10/15/02 - -
Warrant to purchase 50,000
shares of Series B Preferred Stock
at $0.20 per share, through 1/31/01 - -
---------- ----------
TOTAL INVESTMENTS $1,757,091 $1,733,229
========== ==========
The accompanying notes are an integral
part of these financial statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
COMMUNITY INVESTMENT PARTNERS II, L.P.
STATEMENTS OF FINANCIAL CONDITION
ASSETS
------
<CAPTION>
December 31,
----------------------------
1998 1997
---------- ----------
<S> <C> <C>
Investments at Fair Value (Note 3)
(cost $1,807,912 and $1,757,091, respectively) $1,671,491 $1,733,229
Cash and Cash Equivalents 26,598 112,496
Accrued Interest and Dividends Receivable 25,322 18,974
---------- ----------
TOTAL ASSETS $1,723,411 $1,864,699
========== ==========
<CAPTION>
LIABILITIES AND PARTNERSHIP CAPITAL
-----------------------------------
December 31,
----------------------------
1998 1997
---------- ----------
<S> <C> <C>
Liabilities:
Accounts Payable and Accrued Expenses $ 14,000 $ 15,804
---------- ----------
TOTAL LIABILITIES 14,000 15,804
---------- ----------
Partnership Capital:
Capital - Limited Partners 1,692,198 1,830,287
Capital - General Partners 17,213 18,608
---------- ----------
TOTAL PARTNERSHIP CAPITAL 1,709,411 1,848,895
---------- ----------
TOTAL LIABILITIES AND
PARTNERSHIP CAPITAL $1,723,411 $1,864,699
========== ==========
The accompanying notes are an integral
part of these financial statements.
</TABLE> <PAGE>
<PAGE>
<TABLE>
COMMUNITY INVESTMENT PARTNERS II, L.P.
STATEMENTS OF INCOME
<CAPTION>
For the Years Ended
December 31,
---------------------------------------------
1998 1997 1996
--------- -------- --------
INCOME
------
<S> <C> <C> <C>
Dividend and Interest Income $ 12,302 $ 35,075 $ 83,635
--------- -------- --------
TOTAL INCOME 12,302 35,075 83,635
--------- -------- --------
EXPENSES
--------
Management Fees (Note 5) 14,325 28,851 30,496
Amortization of Deferred
Organization Costs (Note 3) - 36,683 36,684
Professional Fees 22,108 31,106 19,898
Independent General Partners' Fees 2,000 12,000 12,000
Other 794 1,024 1,423
--------- -------- --------
TOTAL EXPENSES 39,227 109,664 100,501
--------- -------- --------
Net Loss before Net Realized Gains
and Net Unrealized Losses (26,925) (74,589) (16,866)
Net Realized Gain on Sale of
Investments (Note 6) - 511,973 -
Net Unrealized Losses
on Investments (112,559) (8,564) (15,298)
--------- -------- --------
NET (LOSS) INCOME $(139,484) $428,820 $(32,164)
========= ======== ========
The accompanying notes are an integral
part of these financial statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
COMMUNITY INVESTMENT PARTNERS II, L.P.
STATEMENTS OF CASH FLOWS
<CAPTION>
For the Years Ended
December 31,
---------------------------------------------
1998 1997 1996
--------- --------- ----------
<S> <C> <C> <C>
CASH FLOWS (USED) PROVIDED BY OPERATING
ACTIVITIES:
Net (loss) income $(139,484) $ 428,820 $ (32,164)
Adjustments to reconcile net (loss) income
to net cash provided by
operating activities:
Amortization of deferred
organization costs - 36,683 36,683
Purchase of portfolio investments (102,421) (592,083) (867,615)
Net realized loss on sale/
liquidation of portfolio investment - (511,973) -
Unrealized losses on
portfolio investments 112,559 8,564 15,298
Increase in accrued interest and
dividends receivable (6,348) (1,139) (8,251)
(Decrease) increase in accounts
payable and accrued expenses (1,804) 3,704 -
Decrease (increase) in prepaid expense - 2,449 (2,449)
Sale of portfolio investments 51,600 759,593 -
--------- --------- ----------
Net cash (used) provided by
operating activities (85,898) 134,618 (858,498)
CASH FLOWS USED IN FINANCING ACTIVITIES:
Capital distributions - (562,650) -
--------- --------- ----------
Net cash used in financing activities - (562,650) -
--------- --------- ----------
Net decrease in cash and
cash equivalents (85,898) (428,032) (858,498)
CASH AND CASH EQUIVALENTS:
Beginning of year 112,496 540,528 1,399,026
--------- --------- ----------
End of year $26,598 $ 112,496 $ 540,528
========= ========= ==========
The accompanying notes are an integral
part of these financial statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
COMMUNITY INVESTMENT PARTNERS II, L.P.
STATEMENTS OF CHANGES IN PARTNERSHIP CAPITAL
For the Years Ended December 31, 1998, 1997 and 1996
<CAPTION>
LIMITED GENERAL
PARTNERS PARTNERS TOTAL
---------- -------- ----------
<S> <C> <C> <C>
Balance, December 31, 1995 $1,994,572 $20,317 $2,014,889
Net Loss (31,842) (322) (32,164)
---------- ------- ----------
Balance, December 31, 1996 $1,962,730 $19,995 $1,982,725
Distribution (556,975) (5,675) (562,650)
Net Income 424,532 4,288 428,820
---------- ------- ----------
Balance, December 31, 1997 $1,830,287 $18,608 $1,848,895
Net Loss (138,089) (1,395) (139,484)
---------- ------- ----------
Balance, December 31, 1998 $1,692,198 $17,213 $1,709,411
========== ======= ==========
The accompanying notes are an integral
part of these financial statements.
</TABLE>
<PAGE>
<PAGE>
COMMUNITY INVESTMENT PARTNERS II, L.P.
NOTES TO FINANCIAL STATEMENTS
1. GENERAL
Partnership Organization
------------------------
Community Investment Partners II, L.P. (the "Partnership")
was formed on May 8, 1992, under the Revised Uniform Limited
Partnership Act of Missouri. CIP Management, L.P., LLLP, the
Managing General Partner, is a Missouri limited liability limited
partnership formed on October 10, 1989 as a limited partnership
and registered as a limited liability limited partnership on July
23, 1997. The general partner of CIP Management, L.P., LLLP is
CIP Management, Inc., an indirect subsidiary of Edward D. Jones &
Co., L.P.
Business
--------
The Partnership 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 assets in qualifying investments as
specified in the Investment Company Act. The Managing General
Partner is responsible for making the Partnership's investment
decisions.
The Partnership will seek long-term capital appreciation by
making investments in companies and other special investment
situations. The Partnership is not permitted to engage in any
other business or activity. The Partnership will dissolve on
December 31, 2007, subject to the right of the Individual General
Partners to extend the term for up to two additional two-year
periods.
Risk of Ownership
-----------------
The purchase and ownership of Partnership Units involve a
number of significant risks and other important factors. The
portfolio company investments of the Partnership involve a high
degree of business and financial risk that can result in
substantial losses. Among these are the risks associated with
investment in companies with little operating history, companies
operating at a loss or with substantial variations in operating
results from period to period, companies with the need for
substantial additional capital to support expansion or achieve or
maintain a competitive position, companies which may be highly
leveraged, companies which may not be diversified and companies in
which the Partnership may be the sole or primary lender. The
Partnership intends to invest in only a few companies; therefore,
a loss or other problem with a single investment would have a
material adverse effect on the Partnership.
2. ALLOCATION OF PARTNERSHIP PROFITS AND LOSSES
Generally, profits will be allocated 99% to the Limited
Partners and 1% to the General Partners until the Partners'
Capital Accounts equal their undistributed Capital Contributions.
Thereafter, profits will be allocated 90% to the Limited Partners
and 10% to the General Partners in an amount sufficient to cause
their Capital Accounts to equal an amount equal to (i) two times
their Capital Contributions less (ii) cumulative distributions
pursuant to paragraph 4.1 and paragraph 9.2.2 of the Partnership
Agreement, at which time profits will be allocated 80% to the
Limited Partners and 20% to the General Partners.
<PAGE>
<PAGE>
Generally, losses will be allocated 99% to the Limited
Partners and 1% to the General Partners; provided, however, that
losses will be allocated 80% to the Limited Partners and 20% to
the General Partners to the extent of any prior allocation of
profits which were made to the Partners on an 80%/20% basis.
Next, losses will be allocated 90% to the Limited Partners and 10%
to the General Partners to the extent any prior allocations of
profits were made to the Partners on an 90%/10% basis.
Thereafter, losses, if any, will be allocated to those Partners
who bear the economic risk of loss.
Partners should refer to the partnership agreement for more
specific information.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and Cash Equivalents
-------------------------
All short-term investments with original maturities of three
months or less are considered to be cash equivalents.
Investment Transactions
-----------------------
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. Due to the
inherent uncertainty of valuation, those estimated values for
portfolio investments carried at cost may differ significantly
from the values that would have been used had a ready market for
the investments existed, and the differences could be material to
the financial statements. Investment 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. Investment transactions are recorded on a
trade date basis. Income is recorded on an accrual basis.
Use of Estimates
----------------
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities as of the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Organizational Costs
--------------------
Organizational costs were amortized over a sixty-month
period. As of December 31, 1997, the organizational costs were
fully amortized.
Income Taxes
------------
Income taxes have not been provided for as the Partnership
is a limited partnership and each partner is liable for its own
tax payments. Allocation of Partnership profits and losses for
tax purposes is based upon taxable income which may differ from
net income for financial reporting primarily due to differences
between book and tax accounting for portfolio investments.
<PAGE>
<PAGE>
Distributions
-------------
When excess cash, if any, becomes available, it is the
Partnership's intent to make distributions. All distributions are
subject to the sole discretion of the Managing General Partner and
the Independent General Partners.
4. PER UNIT INFORMATION
There is no market for the Limited Partnership interests.
Per Unit Information is as follows:
<TABLE>
<CAPTION>
For the Years Ended December 31,
--------------------------------------------
1998 1997 1996
-------- -------- --------
<S> <C> <C> <C>
Number of unit holders 131 131 131
======== ======== ========
Limited partnership units 111,395 111,395 111,395
General partnership units 1,135 1,135 1,135
-------- -------- --------
Total units outstanding 112,530 112,530 112,530
======== ======== ========
Net asset value per unit $ 15.19 $ 16.43 $ 17.62
======== ======== ========
Net income (loss) per unit $ (1.24) $ 3.81 $ (.29)
======== ======== ========
</TABLE>
<PAGE>
<PAGE>
5. RELATED PARTY TRANSACTIONS
The Partnership is furnished with certain non-reimbursed
management and accounting services by affiliates, which are not
reflected in the accompanying financial statements.
The Managing General Partner performs management and
administrative services for the operation of the Partnership. The
Management Agreement was amended to waive the annual management
fee of 1.5% of total assets to the Managing General Partner. This
payment was terminated after the second quarter of 1998; fees for
1998 totaled $14,325 compared to $28,851 for the full year 1997.
The Partnership may place its General Partners on Boards of
Directors of portfolio companies.
The Managing General Partner and the Independent General
Partners of the Partnership are also the managing general partner
and independent general partners, respectively, of Community
Investment Partners, L.P., a business development company.
Additionally, the Managing General Partner is the managing
general partner of Community Investment Partners III L.P., LLLP,
another business development company.
<PAGE>
<PAGE>
6. INVESTMENT TRANSACTIONS
Following is a summary of portfolio investment transactions during the
years ended December 31, 1998, 1997 and 1996, respectively.
<TABLE>
For the year ended December 31, 1998
- ------------------------------------
<CAPTION>
Type of Realized
Company Investment Cost Proceeds Gain (Loss)
- ------- ---------- ---- -------- -----------
<S> <C> <C> <C> <C>
PURCHASES:
Stereotaxis, Inc. Purchase of Series C
Convertible
Preferred Stock $100,001
Conversion of accrued
interest on Note into
Series C Convertible
Preferred Stock 2,420<Fa>
--------
TOTAL PURCHASES $102,421
========
SALES:
Hawk Corp. (Houghton
Payment of Acquisition
Corp.) Term Note $51,600 $51,600 -
-------- ------- -----
TOTAL SALES $51,600 $51,600 -
======== ======= =====
<FN>
<Fa> On June 26,1998, the Stereotaxis, Inc. 10% Convertible Promissory
Note, due October 31, 2002 converted into 26,406 shares of Series C
Preferred Stock. The outstanding interest on this 10% Convertible
Promissory Note ($2,420 as of 6/26/98) was converted into 1,613 shares
of Series C Preferred Stock. Additionally, the Partnership received
5,281 warrants to purchase Preferred Stock at $1.50 per share,
exercisable through October 31, 2002.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
For the year ended December 31, 1997
- ------------------------------------
<CAPTION>
Type of Realized
Company Investment Cost Proceeds Gain (Loss)
- ------- ---------- ---- -------- -----------
<S> <C> <C> <C> <C>
PURCHASES:
Medical Device
Alliance, Inc. Common Stock $100,000
Online Resources &
Communications Promissory Note
Corporation & Warrants 152,466
Advanced Series A
UroScience, Inc. Preferred Stock 100,000
Computer Motion, Inc. Warrants 8
Neocrin Company Series E
Preferred Stock 100,000
BioSeparations, Inc. Series B
Preferred Stock
& Warrants 100,000
Stereotaxis, Inc. Convertible
Promissory Note 39,609
--------
TOTAL PURCHASES $592,083
========
SALES:
Houghton Class A Cumulative
Acquisition Corp. Redeemable
Preferred Stock $200,013 $711,986<Fa> $511,973
Computer Motion, Inc. Term Note 125,000 125,000 -
Computer Motion, Inc. Fractional Shares
Common Stock 7 7 -
-------- -------- --------
TOTAL SALES $325,020 $836,993 $511,973
======== ======== ========
<FN>
<Fa> Proceeds included $634,586 in cash and a $77,400 8% Convertible
Promissory Note due 1/2/99. A $25,800 Promissory Note contingent upon
the future income of HAC before interest, taxes, depreciation,
amortization and corporate charges was also received as consideration.
Due to the contingent nature of the $25,800 Promissory Note, a gain has
not been recorded. 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.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
For the year ended December 31, 1996
- ------------------------------------
<CAPTION>
Type of Realized
Company Investment Cost Proceeds Gain (Loss)
- ------- ---------- ---- -------- -----------
<S> <C> <C> <C> <C>
PURCHASES:
Global Surgical Promissory Note $ 67,500
Corporation
Computer Motion, Inc. Term Note,
Preferred Stock
& Warrants 250,250
Factory Card Outlet Common Stock 249,865
Permalok Corporation Convertible
Preferred Stock 200,000
Stereotaxis, Inc. Preferred Stock 100,000
--------
TOTAL PURCHASES $867,615
========
</TABLE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURES
None
<PAGE>
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
There are two Independent General Partners and one Managing General
Partner of the Partnership. These Independent General Partners and the
Managing General Partner are responsible for the management and
administration of the Partnership. The General Partners are "interested
persons" of the Partnership as defined by the Investment Company Act of
1940, but the Partnership has obtained an exemptive order from the
Securities and Exchange Commission permitting them to be considered
disinterested persons. The Independent General Partners provide overall
guidance and supervision with respect to the operation of the Partnership
and perform the various duties imposed on the directors of a business
development company by the Investment Company Act of 1940. In addition to
general fiduciary duties, the Independent General Partners supervise the
management and underwriting arrangement of the Partnership, the custody
arrangement with respect to portfolio securities, the selection of
accountants, fidelity bonding and transactions with affiliates.
Specific Information regarding the Independent General Partners:
Tommy L. Gleason, Jr., 53, has been an Independent General Partner of
the Partnership since May 1992. He is also an independent general partner
of Community Investment Partners, L.P., a business development company.
Mr. Gleason is the Chairman and Chief Executive Officer of Galaxy Systems
Management, Inc., the general Partner of Galaxy Telecom, L.P., which is
involved in management of cable television systems located in sixteen
states and serving approximately 175,000 subscribers. Mr. Gleason owns
2,026 Units.
E. Stanley Kroenke, 51, has served as an Independent General Partner
of the Partnership since May 1992. He is also an independent general
partner of Community Investment Partners, L.P., a business development
company. Mr. Kroenke leads a company that is a national investor,
developer, and owner of commercial real estate. The company is a developer
and owner of numerous shopping centers, office buildings and apartment
projects around the country. Mr. Kroenke is co-owner of the St. Louis Rams
National Football League franchise. He serves as a member of the board of
directors of Wal-Mart Stores, Inc., Bentonville, Arkansas; Central
Bancompany, Jefferson City, Missouri; and Boone County National Bank,
Columbia, Missouri. He is a trustee of the College of the Ozarks in Point
Lookout, Missouri. He also serves on the boards of the Greater St. Louis
Area Council Boy Scouts of America and the St. Louis Art Museum. Mr.
Kroenke owns 5,633 Units.
CIP Management, L.P., LLLP (the "Managing General Partner") is the
Managing General Partner of Community Investment Partners II, L.P. The
Managing General Partner is also managing general partner of Community
Investment Partners, L.P. and Community Investment Partners III L.P., LLLP,
business development companies. The General Partners of the Managing
General Partner are CIP Management, Inc., a Missouri corporation and a
wholly-owned subsidiary of Edward D. Jones & Co., L.P., and Daniel A.
Burkhardt.
<PAGE>
<PAGE>
The Directors and Officers of CIP Management, Inc. are as follows:
Daniel A. Burkhardt, 51, President, Treasurer and Director of CIP
Management, Inc. since October 1989 and general partner of CIP Management,
L.P., LLLP since February 1990. He is a general partner of The Jones
Financial Companies, L.L.L.P., the parent company of Edward D. Jones & Co.,
L.P., where he has specialized in investment banking and structuring
investments since 1980. He is also a director of St. Joseph Light & Power
Co. and SEMCO Energy, Inc. Mr. Burkhardt is the beneficial owner of 4,052
Units.
Ray L. Robbins, Jr., 54, Vice President and Director of CIP
Management, Inc. since October 1989. He is a general partner of The Jones
Financial Companies, L.L.L.P., the parent company of Edward D. Jones & Co.,
L.P., where he has specialized in securities analysis since 1984, and where
he was responsible for municipal bond transactions from 1975 to 1983. Mr.
Robbins is Co-Chairman of the Edward D. Jones & Co., L.P. Investment Policy
Committee. Mr. Robbins is a beneficial owner of 3,242 Units.
Marilyn A. Gaffney, 40, Secretary of CIP Management, Inc. since
October 1989. She is a Limited Partner of The Jones Financial Companies,
L.L.L.P., the parent company of Edward D. Jones & Co., L.P., where she has
been a senior investment adviser in investment banking since 1980. Ms.
Gaffney is the beneficial owner of 405 Units.
ITEM 11. EXECUTIVE COMPENSATION
The information set forth under the caption "Partnership
Distributions and Allocations" in the Prospectus of the Partnership dated
November 4, 1992, filed with the Securities and Exchange Commission
pursuant to Rule 497(b) under the Securities Act of 1933, is incorporated
herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The information concerning the security ownership of the Independent
General Partners and the Officers and Directors of CIP Managements, Inc.,
described in Item 10, is herein incorporated by reference.
<PAGE>
<PAGE>
As of March 15, 1999, the following parties are known by the
Partnership to be the beneficial owners of more than 5% of the Units.
<TABLE>
<CAPTION>
Amount of
Beneficial % of Limited
Name Ownership of Units Partnership Capital
---- ------------------ -------------------
<S> <C> <C>
Richard P. Kiphart 10,131 9.09%
EDJ Ventures Ltd. 5,633 5.06%
E. Stanley Kroenke 5,633 5.06%
</TABLE>
The Partnership is not aware of any arrangement which may, at a
subsequent date, result in a change of control of the Partnership.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Certain relationships and related transactions, described in Item 10,
are herein incorporated by reference.
<PAGE>
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K
a. The following documents are filed as part of this report:
1. Financial Statements:
--------------------
See Index to Financial Statements and Supplementary Data
contained in Item 8 of this Form 10-K.
2. Financial Statement Schedules:
-----------------------------
All financial statement schedules are omitted because
they are not applicable, or the required information is
included in the balance sheet or notes thereto.
3. Exhibits:
(3) Amended and Restated Certificate and Agreement of
Limited Partnership dated as of November 4, 1992.
(4) Form of Unit Certificate. <F*>
(10) Management Agreement dated November 4, 1992,
between the Partnership and CIP Management, L.P.,
LLLP. <F**>
(28) Prospectus of the Partnership dated November 4,
1992, filed with the Securities and Exchange
Commission in connection with Registration
Statement No. 33-47917 on Form N-2 under the
Securities Act of 1933. <F**>
[FN]
<F*> Incorporated by reference to Exhibit A of the
Prospectus of the Partnership dated November 4,
1992 filed with the Securities and Exchange
Commission pursuant to Rule 497(b) under the
Securities Act of 1933.
<F**>Incorporated by reference to the Partnership's
Registration Statement No. 33-47917 on Form N-2
under the Securities Act of 1933.
b. No reports on Form 8-K were filed during the quarter ended
December 31, 1998.
c. Exhibits filed as part of this report are included in Item (14)
(a)(3) above.
d. All financial statement schedules are omitted because they are
not applicable, or the required information is included in the
balance sheet or notes thereto.
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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, on this
22nd day of March, 1999.
Community Investment Partners II, L.P.
By: CIP Management, L.P., LLLP, its
Managing General Partner
By: CIP Management, Inc., its
Managing General Partner
/s/ Daniel A. Burkhardt, President
-----------------------------------
By: Daniel A. Burkhardt, President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated.
/s/ Daniel A. Burkhardt
- ------------------------------ General Partner of CIP Management
Daniel A. Burkhardt L.P., LLLP, President, Treasurer and
Director of CIP Management, Inc.
/s/ Ray L. Robbins
- ------------------------------ Vice President and Director of CIP
Ray L. Robbins Management, Inc.
/s/ Tommy L. Gleason, Jr.
- ------------------------------ Individual General Partner,
Tommy L. Gleason, Jr. Community Investment Partners, II, L.P.
/s/ E. Stanley Kroenke
- ------------------------------ Individual General Partner,
E. Stanley Kroenke Community Investment Partners, II, L.P.
<PAGE>
<PAGE>
<TABLE>
INDEX TO EXHIBITS
<CAPTION>
Exhibit
Number Description of Exhibit Page
- ------ ---------------------- ----
<C> <S> <C>
(3) Amended and Restated Certificate and
Agreement of Limited Partnership dated
as of November 4, 1992 <F*>
(4) Form of Unit Certificate <F*>
(10) Management Agreement dated November 4, 1992,
between the Partnership and CIP Management,
L.P., LLLP <F*>
(28) Prospectus of the Partnership dated November 4,
1992, filed with the Securities and Exchange
Commission in connection with Registration
Statement No. 33-47917 on Form N-2 under the
Securities Act of 1933 <F*>
<FN>
______________________
<F*>Incorporated by reference
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements for Community Investment Partners II, L.P. for the
year ended December 31, 1998 and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 1,807,912
<INVESTMENTS-AT-VALUE> 1,671,491
<RECEIVABLES> 25,322
<ASSETS-OTHER> 26,598
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,723,411
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 14,000
<TOTAL-LIABILITIES> 14,000
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 112,530
<SHARES-COMMON-PRIOR> 112,530
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 1,709,411
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 12,302
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> (112,559)
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 39,227
<AVERAGE-NET-ASSETS> 1,779,153
<PER-SHARE-NAV-BEGIN> 16.43
<PER-SHARE-NII> (1.24)
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 15.19
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
