SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-20514
CORPORATE RENAISSANCE GROUP, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 13-3701354
[State or other jurisdiction of (I.R.S. Employer
incorporation or organization] Identification Number)
1185 Avenue of the Americas
18th Floor
New York, New York 10036
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 730-2000
Former name, former address and fiscal year, if changed since last report
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 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 _____
The number of shares outstanding of the Registrant's common stock is 940,350 (as
of June 30, 1997).
<PAGE 1>
CORPORATE RENAISSANCE GROUP, INC.
INDEX
PART I - FINANCIAL INFORMATION
ITEM 1.
Statements of Assets and Liabilities as of June 30, 1997 and
September 30, 1996 <Page 3>
Statements of Operations and Changes in Net Assets for the Quarters ended
June 30, 1997 and June 30, 1996 and for the Nine Months ended June 30, 1997
and June 30, 1996 <Page 4>
Statements of Cash Flows for the Nine Months ended June 30, 1997 and
June 30, 1996 <Page 5>
Schedule of Investments, June 30, 1997 <Page 6>
Notes to Financial Statements <Page 7>
ITEM 2.
Management's Discussion and Analysis of Financial
Condition and Results of Operations <Page 11>
PART II - OTHER INFORMATION <Page 14>
<PAGE 2>
CORPORATE RENAISSANCE GROUP, INC.
STATEMENTS OF ASSETS AND LIABILITIES
(Unaudited)
<TABLE>
JUNE/30/97 SEP/30/96
<S> <C> <C>
ASSETS
Investments in securities, at market value
(cost $5,996,093 and $6,663,601 respectively) $6,034,915 $9,217,962
Cash and cash equivalents 1,214,738 509,257
Income taxes receivable 9,755 345,511
Accrued interest receivable 1,681 585
Other assets 15,747 6,247
____________ ___________
Total Assets 7,276,836 10,079,562
LIABILITIES
Call options written, at market value
(premiums received $41,827 at September 30, 1996) - 61,425
Accounts payable and accrued expenses 15,477 31,659
Deferred taxes payable - 749,609
_______________________
Total liabilities 15,477 842,693
_______________________
Net assets $7,261,359 $9,236,869
_______________________
COMMITMENTS AND CONTINGENCIES
(NOTE 8)
NET ASSETS
Common stock (par value $.01 per share
20,000,000 shares authorized;
956,100 shares issued and outstanding) $ 9,561 $ 9,561
Additional paid-in capital 7,815,260 7,815,260
Treasury stock, at cost (15,750 shares) (125,137) -
Accumulated income (losses):
Accumulated net operating loss
before security transactions (1,470,992) (1,292,990)
Accumulated net realized gains
from sale of investments 1,166,558 1,049,765
Net unrealized appreciation of
investments (133,891) 1,655,273
_______________________
(438,325) 1,412,048
_______________________
Net assets $7,261,359 $9,236,869
_______________________
Net asset value per share of
common stock outstanding $ 7.72 $ 9.66
____________ ___________
See notes to financial statements
</TABLE>
<PAGE 3>
CORPORATE RENAISSANCE GROUP, INC
STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS
(Unaudited)
<TABLE>
QUARTER QUARTER 9 MONTHS 9 MONTHS
ENDED ENDED ENDED ENDED
6/30/97 6/30/96 6/30/97 6/30/96
<S> <C> <C> <C> <C>
Income:
Interest Income $9,434 $ 525 $17,585 $18,198
____________________________________
Total investment income 9,434 525 17,585 18,198
____________________________________
Expenses:
Incentive fees - - - 224,128
Financial advisory fees 50,000 50,000 150,000 150,000
Investment banking fees - 25,000 8,333 75,000
Professional fees 12,300 13,200 36,900 40,800
Insurance expense 11,750 18,500 37,500 55,747
Board of directors fees 12,500 12,500 37,500 37,500
Other operating expenses 8,159 15,704 17,363 28,440
____________________________________
Total expenses 94,709 134,904 287,596 611,615
____________________________________
Operating loss before
income tax benefit (85,275) (134,379) (270,011)(593,417)
Income tax benefit 28,421 47,440 92,009 222,617
____________________________________
Net operating loss before
security transactions (56,854) (86,939)(178,002) (370,800)
____________________________________
NET REALIZED AND UNREALIZED
GAINS/(LOSSES) FROM INVESTMENTS:
Net realized gains/(losses)
from sales of investments 403,731 (1,123,784) 165,969 (1,249,776)
Change in net unrealized
(depreciation) of investments (775,980) 449,937 (2,495,940) (1,349,925)
Income tax (expense)/benefit
arising from net realized gains
/(losses) and net unrealized
(depreciation) of investments (16,272) 237,886 657,600 839,314
____________________________________
Net realized and unrealized
(losses) on investments (388,521) (435,961) (1,672,371) (1,760,387)
____________________________________
NET (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS $(445,375) $(522,900) $(1,850,370) $(2,131,187)
____________________________________
Net assets at beginning of period 7,706,734 10,204,315 9,236,869 11,812,602
Net decrease in net assets resulting
from treasury stock purchases - - (125,137) -
____________________________________
Net assets at end of period $7,261,359 $9,681,415 $7,261,359 $9,681,415
_________________________________________
Per Share Data:
Net operating loss before
security transactions $(.06) $(.09) $(.19) $(.39)
Net realized gains/(losses)
from sales of investments .28 (.76) (.12) (.88)
Net unrealized (depreciation)
of investments (.70) .31 (1.90) (.96)
Net gain on treasury stock
transactions - - .03 -
_________________________________________
Net (decrease) in net asset value
resulting from operations (.48) (.54) (1.94) (2.23)
Net asset value per common
share at beginning of period 8.20 10.67 9.66 12.36
_______________________________________
Net asset value per common
share at end of period $7.72 $10.13 $7.72 $10.13
_______________________________________
See notes to financial statements
</TABLE>
<PAGE 4>
CORPORATE RENAISSANCE GROUP, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
NINE MONTHS NINE MONTHS
ENDED 6/30/97 ENDED 6/30/96
<S> <C> <C>
Cash Flows from Operating Activities:
Net (decrease) in net assets
resulting from operations $(1,850,373) $(2,13
1,187)
Adjustments to reconcile net increase
in net assets resulting from operations
to net cash (used in) operating activiities:
Change in net unrealized depreciation
of investments 2,495,940 1,349,925
Realized (gains)/losses from sale
of investments (165,969) 1,249,776
Deferred income tax (benefit) (749,609) (541,020)
(Increase)/decrease in operating assets:
Income taxes receivable 335,756 (346,908)
Accrued interest receivable (1,096) 2,900
Other assets (9,500) (18,766)
Increase/(decrease) in operating liabilities:
Accrued incentive fee payable - (996,947)
Income taxes payable - (132,008)
Accounts payable and accrued expenses (16,182) 7,189
____________ ____________
Net cash flows provided by/
(used in) operating activities 38,967 (1,557,046)
____________ ____________
Cash Flows from Investing Activities:
Purchase of securities (238,729) (2,595,704)
Proceeds from sale of securities 1,030,380 3,026,288
Proceeds from securities sold short,
not yet Purchased - 36,951
____________ ____________
Net cash flows provided by investing
activities 791,651 467,535
____________ ___________
Cash Flows from Financing Activities:
Purchase of treasury stock (125,137) -
____________ ____________
Net cash flows (used in) financing activities (125,137) -
____________ ____________
Net increase/(decrease) in cash
and cash equivalents 705,481 (1,089,511)
Cash and Cash Equivalents, at the
beginning of the period 509,257 2,093,863
____________ ____________
Cash and Cash Equivalents, at the
end of the period 1,214,738 1,004,352
____________ ___________
Supplemental Disclosure:
Income taxes paid/(refunded) $(335,756) $367,806
____________ ___________
Interest paid $ - $8,824
____________ __________
See notes to financial statements
</TABLE>
<PAGE 5>
CORPORATE RENAISSANCE GROUP, INC.
SCHEDULE OF INVESTMENTS(1)
JUNE 30, 1997
(Unaudited)
<TABLE>
Shares
Or Type of Issue % Of
Face and Original Market Net
Value Name of Issuer Cost Value Assets
<C> <S> <C> <C> <C>
Reorganized Companies
Common Stock
607,400 Computervision Corp. New $3,179,089 $ 2,809,225 38.7%
Total Reorganized Companies 3,179,089 2,809,225
Other Investments
Common Stock
15,352 Tenet Healthcare Corp. (2) 140,313 453,843 6.3%
148,824 Seaman Furniture Co., Inc. 2,676,691 2,771,847 38.2%
Total Other Investments 2,817,004 3,225,690
Total Investments $ 5,996,093 $ 6,034,915
See notes to financial statements
____________________
Notes to Schedule of Investments
(1) The above investments are non-income producing. Equity investments that
have not paid dividends within the last twelve months are considered to be non-
income producing. See Note 1.
(2) Effective January 30, 1997, OrNda Healthcorp merged withTenet Healthcare
Corp., in which the Company received 1.35 shares of Tenet for each share of
OrNda.
</TABLE>
<PAGE 6>
CORPORATE RENAISSANCE GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997
(Unaudited)
1. Organization and Operation of the Company
Corporate Renaissance Group, Inc. (the "Company") was incorporated under
the laws of the State of Delaware on June 19, 1992. The Company is a non-
diversified, closed-end investment company which has elected to be treated as a
business development company ("BDC") under the Investment Company Act of 1940,
as amended by the Small Business Incentive Act of 1980. The Company offers
investors the opportunity to participate in investments in companies which the
Company believes have viable existing businesses generating substantial revenues
in established markets, and have recently completed or are in the process of
undergoing financial restructuring ("Reorganized Companies") and where, as a
result, the Company can ultimately obtain an equity position at a discount from
market value for comparable companies that are not financially troubled. The
Company's investments are generally not expected to produce meaningful levels of
investment income. It is the Company's objective to select investment
opportunities which the Company believes offer the potential for substantial
capital appreciation.
The Company completed its initial public offering and commenced operations
on November 1, 1994. The Company consummated the initial public offering (the
"Domestic Offering") and an overseas offering (the "Overseas Placement") of
956,000 shares at $10.00 per share. Pursuant to the Domestic Offering, 600,000
shares were sold; 356,000 shares were sold in the Overseas Placement (including
45,000 shares sold to Union d'Etudes et d'Investissments ("UI")). The net
proceeds to the Company of both the Domestic Offering and Overseas Placement
were $7,823,821 after deducting all costs associated with the registration and
offering, resulting in an initial net asset value per share of $8.18.
On November 25, 1996, the Company's Board of Directors authorized the
implementation of an open market share repurchase program, pursuant to which the
Company, from time to time, may purchase up to an aggregate of 175,000 shares of
its common stock in open market transactions. The purpose of the program is to
provide stockholders desiring to sell their shares with enhanced market
liquidity. At the same time, the Company believes that open-market purchases of
its shares at a discount from net asset value will enhance long-term shareholder
value. As of June 30, 1997, 15,750 shares have been repurchased at an average
cost of $7.93 per share.
2. Significant Accounting Policies
a. Valuation of Securities
The Company's securities which are subject to last-sale reporting are
valued by reference to the market price on a national securities exchange or as
reported on the National Association of Securities Dealers Automated Quotation
System. Other unlisted securities are valued at representative "bid" quotations
if held long by the Company and representative "asked" quotations if held short
by the Company. The value of securities for which market quotations are not
readily available and securities as to which the Company believes the method of
valuation set forth above does not fairly reflect market value are determined by
one or more independent third parties selected by the Investment Adviser.
<PAGE 7>
b. Recognition of Security Transactions and Related Investment
Income
Security transactions are recorded on the date the order to buy or sell is
executed (the trade date). Dividend income is recognized on the ex-dividend
date and interest income is recognized on an accrual basis. The net realized
gains and losses in sales of securites are determined on a first in, first out
or specific identification basis.
c. Accounting for Foreign Exchange Gains and Losses
Investments denominated in foreign currencies are translated into U.S.
dollars at the closing foreign exchange rate. Resulting foreign exchange gains
and losses are reflected in the change in net unrealized appreciation of
investments.
d. Income Taxes
The Company is not entitled to the special treatment available to regulated
investment companies and is taxed as a regular corporation for federal and state
income tax purposes. The Company has accounted for income taxes in accordance
with FASB Statement No. 109, "Accounting for Income Taxes." The aggregate cost
of securities at June 30, 1997 for federal income tax purposes and financial
reporting purposes was the same.
e. Cash and Cash Equivalents
For the purpose of reporting cash flows, cash and cash equivalents consist
of cash and short-term interest-bearing deposits.
3. Income Taxes
The components of income tax (benefit) on pre-tax book loss of $2,599,982
are as follows:
Federal:
Deferred $ (726,207)
__________
(726,207)
__________
State and Local:
Deferred (23,402)
___________
(23,402)
___________
Total $(749,609)
___________
<PAGE 8>
Deferred income taxes arise from temporary differences between the tax
basis of assets and liabilities and their reported amounts in the financial
statements. For example, unrealized gains or losses on investments are not
recognized for tax purposes until realized and therefore create a temporary
difference. The Company's deferred income tax liability is primarily
attributable to the net unrealized appreciation in its investments. The
components of the Company's deferred income tax liability are comprised of the
following:
Deferred tax liability:
Net unrealized appreciation on investment 12,939
Deferred tax asset:
Net operating loss carryforwards (12,939)
_______
Net deferred tax liability - 0 -
3. Income Taxes (continued)
The Company's effective income tax rate and the U.S. federal statutory rate
are substantially the same.
4. Financial Advisory and Investment Banking Fees and
Other Transactions with Affiliates and Related Parties
The Company has retained M.D. Sass Investors Services, Inc. (the
"Investment Adviser") as the Company's investment adviser. The Investment
Adviser is a registered investment adviser under the Investment Advisers Act of
1940, as amended. The Investment Adviser is part of a group of affiliated
investment advisers and other affiliated entities comprising the M.D. Sass
organization ("M.D. Sass"). Upon completion of the Company's offering of its
common shares, the Company entered into a Financial Advisory Agreement with the
Investment Adviser, pursuant to which the Investment Adviser receives a base fee
of $200,000 per annum, for furnishing the Company with administrative services,
including necessary executive, administrative, internal accounting and support
services. In addition to the base fee, the Investment Adviser receives an
incentive fee for its investment advisory services equal to 20% of the increase
in net asset value of the Company's shares, as defined in the Financial Advisory
Agreement. There were no incentive fees earned or payable at June 30, 1997.
The Company was party to an investment banking agreement with UI USA, Inc.
for a period of one year which ended on October 31, 1996. Pursuant to this
agreement, UI USA furnished investment banking services to the Company for a fee
of $100,000 per annum. Such services consisted of assisting the Company and
Investment Adviser in the evaluation, structuring and negotiation of investment
opportunities. The Company paid $8,333 for such services covering the period
from October 1, 1996, through the date of termination of the agreement.
5. Board of Directors Fees
The Company pays each of its five independent directors an annual fee of
$10,000 for the directors' services as such.
6. Investment Transactions
As of June 30, 1997, the accumulated unrealized appreciation of investments
was $38,822.
<PAGE 9>
7. Concentration of Credit Risk and Off-Balance Sheet Risk
The Company engages in security purchase and sale transactions with
regulated broker-dealers. In connection with these transactions, the Company
may be subject to credit risk in the event the counterpart or the Company's
regulated clearing brokers cannot fulfill their contractual obligations.
The Company's activities with off balance sheet risk include the writing of
traded stock market index options. The Company is subject to market risk
associated with changes in the value of the underlying stock index. As a writer
of options, the Company receives a premium at the outset and then bears the risk
of unfavorable changes in the price of the stock index underlying the option.
8. Other Information
In July 1997, the Investment Adviser and certain of its affiliates,
including the Company (collectively, the "Buyer"), purchased a majority interest
in the Open Service Solutions business unit of Computervision Corporation
("Computervision"), through CVSI, Inc., a newly formed corporation ("CVSI"). In
the transaction, the Buyer paid $7.6 million to Computervision for 76% of CVSI's
Class A Voting Stock (the "Class A Stock"). In addition, CVSI paid
Computervision $25.0 million in cash, issued Computervision a $10.0 million
subordinated note (the "Subordinated Note") and issued Computervision 24% of
CVSI's Class A Stock and 100% of CVSI's Class B Non-Voting Stock (the "Class B
Stock"). The Buyer also has options to purchase (i) the Class A Stock held by
Computervision should the Buyer retire the Subordinated Note within one year of
the transaction and (ii) the Class B Stock for $15.0 million. Moreover, if CVSI
does not achieve certain specified levels of product revenues and operating
margins from Computervision-initiated referrals, CVSI will have the option to
purchase, at a nominal price, some or all of the Class A Stock held by
Computervision. The Buyer is a principal stockholder of Computervision and
James B. Rubin, an executive officer and director of the Company, serves as a
director of Computervision.
<PAGE 10>
PART II - OTHER INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
This Report contains, in addition to historical information, forward-
looking statements regarding Corporate Renaissance Group, Inc. (the "Company"),
which represents the Company's expectations or beliefs including, but not
limited to, statements concerning the Company's operations, performance,
financial condition, business strategies and other information. For this
purpose, any statements contained in this Report that are not statements of
historical fact may be deemed to be forward-looking statements. Without
limiting the generality of the foregoing, words such as "may," "will," "expect,"
"believe," "anticipate," "intend," "could," "estimate," or "continue" or the
negative or other variations thereof or comparable terminology are intended to
identify forward-looking statements. The statements by their nature involve
substantial risk and uncertainties, certain of which are beyond the Company's
control, and actual results may differ materially depending on a variety of
important factors, including those described in this Report and the Company's
other filings with the Securities and Exchange Commission (the "Commission").
Liquidity and Capital Resources
The Company is a non-diversified, closed-end management investment company
which has elected to be treated as a special type of investment company known as
a business development company under the Investment Company Act of 1940 (the
"1940 Act") as amended by the Small Business Act of 1980. The Company's primary
investment objective is to achieve long-term capital appreciation through
investments in companies ("Portfolio Investments") which the Company believes
have viable existing businesses generating substantial revenues in established
markets, but which have recently completed, are in the process of undergoing or
are likely to undergo a financial restructuring pursuant to bankruptcy or
reorganization proceedings or on a negotiated basis outside of bankruptcy or
reorganization proceedings (a "Reorganized Company") and where, as a result, the
Company can ultimately obtain an equity position (either common or preferred
stock) at a discount from market value for comparable companies that are not
financially troubled. Such investments are not generally available to the
public because they require large financial commitments and, in some cases,
managerial assistance. The Company may make these investments either on its own
or, more likely, jointly with other investors, including investment partnerships
and other entities managed or advised by M.D. Sass Investors Services, Inc. (the
"Investment Adviser") and its affiliates. Any investments with affiliates of
the company will be subject to restrictions under the 1940 Act and conditions
set forth in an exemptive order granted by the Commission in November 1994. A
portion of the Company's portfolio is invested in other securities, including
securities of financially distressed companies, where the Company believes that
it can generate capital appreciation by engaging in portfolio trading.
The Company has retained the Investment Adviser as the Company's investment
adviser to identify, negotiate, manage and liquidate investments for the
Company. The Company invests only in transactions recommended by the Investment
Adviser. The activities of the Investment Adviser on behalf of the Company are
subject to supervision by the independent directors of the Company.
The Company's primary source of working capital is funds generated from
investment activities. At June 30, 1997, the Company had cash and cash
equivalents of $1,214,738, as compared to cash and cash equivalents of $509,257
at September 30, 1996. The increase in cash and cash equivalents was a result
of the liquidation of certain investments during the period.
<PAGE 11>
In addition, on November 25, 1996, the Company's Board of Directors
authorized the implementation of an open market share repurchase program,
pursuant to which the Company, from time to time, may purchase up to an
aggregate of 175,000 shares of its Common Stock in open market transactions. As
of June 30, 1997, the Company had purchased 15,750 shares pursuant to this
program at an average cost of $7.93 per share.
Results of Operations
Quarter ended June 30, 1997 as compared to quarter ended June 30, 1996
During the quarter ended June 30, 1997, the Company had interest income of
$9,434, as compared to interest income of $525 in the 1996 quarter. Operating
expenses during the 1997 quarter were $94,709, as compared to $134,904 in the
1996 quarter. This decrease is primarily attributable to fees payable to an
investment banking firm accrued during the 1996 quarter pursuant to an
Investment Banking Agreement which expired in October 1996. For the quarter
ended June 30, 1997, the Company had a pre-tax operating loss and a net
operating loss of $85,275 and $56,854, respectively, as compared to a pre-tax
loss and net operating loss for the 1996 quarter of $134,379 and $86,939,
respectively. Since the Company typically does not purchase securities with the
objective of generating investment income, net investment losses are expected to
routinely occur.
During the quarter ended June 30, 1997, the Company had net realized gains
from sale of investments of $403,731, as opposed to net realized losses from
sale of investments of $1,123,784 during the 1996 quarter. For the quarter
ended June 30, 1997, the Company had net unrealized depreciation of investments
of $775,980, as compared to net unrealized appreciation of investments of
$449,937 in the 1996 quarter. For the 1997 quarter, the Company had net
realized and unrealized losses on investments of $388,521, as compared to net
realized and unrealized losses on investments of $435,961 for the 1996 quarter
and, after giving effect to net operating losses, a decrease in net assets
resulting from operations of $445,375 in the 1997 quarter, as compared to a
decrease in net assets resulting from operations of $522,900 in the 1996
quarter.
Nine months ended June 30, 1997 as compared to nine months ended June 30,
1996
During the nine months ended June 30, 1997, the Company had interest income
of $17,585, as compared to interest income of $18,198 in the 1996 period.
Operating expenses during the 1997 period were $287,596, as compared to $611,615
in the 1996 period. This decrease is primarily attributable to $224,128 in
incentive fees payable to the Investment Adviser accrued during the 1996 period,
as compared to $0 in the 1997 period and a decrease payable pursuant to an
Investment Banking Agreement from $75,000 in the 1996 period to $8,333 in the
1997 period. For the nine months ended June 30, 1997, the Company had a pre-tax
operating loss and a net operating loss of $270,011 and $178,002, respectively,
as compared to a pre-tax loss and net operating loss for the 1996 period of
$593,417 and $370,800, respectively. Since the Company typically does not
purchase securities with the objective of generating investment income, net
investment losses are expected to routinely occur.
During the nine months ended June 30, 1997, the Company had net realized
gains from sale of investments of $165,969, as opposed to net realized losses
from sale of investments of $1,249,776 during the 1996 period. For the nine
months ended June 30, 1997, the Company had net unrealized depreciation of
investments of $2,495,940, as compared to net unrealized depreciation of
investments of $1,349,925 in the 1996 period. For the 1997 period, the Company
had net realized and unrealized losses on investments of $1,632,371, as compared
to net realized and unrealized losses on investments of $1,760,387 for the 1996
period and, after giving effect to net operating losses, a decrease in net
assets resulting from operations of $1,850,370 in the 1997 period, as compared
to a decrease in net assets resulting from operations of $2,131,187 in the 1996
period.
<PAGE 12>
Net Asset Value
At June 30, 1997, the Company had a net asset value of $7.72 per share of
Common Stock, a decrease of $1.94 per share from net asset value at September
30, 1996 of $9.66 per share.
<PAGE 13
PART II - OTHER INFORMATION
1. Legal Proceedings
Not applicable.
2. Changes in Securities
Not applicable.
3. Default Upon Senior Securities
Not applicable.
4. Submission of Matters to a Vote of Security Holders
Not applicable.
5. Other Information
(a) In July 1997, the Investment Adviser and certain of its
affiliates, including the Company (collectively, the "Buyer"),
purchased a majority interest in the Open Service Solutions business
unit of Computervision Corporation ("Computervision"), through CVSI,
Inc., a newly formed corporation ("CVSI"). In the transaction, the
Buyer paid $7.6 million to Computervision for 76% of CVSI's Class A
Voting Stock (the "Class A Stock"). In addition, CVSI paid
Computervision $25.0 million in cash, issued Computervision a $10.0
million subordinated note (the "Subordinated Note") and issued
Computervision 24% of CVSI's Class A Stock and 100% of CVSI's Class B
Non-Voting Stock (the "Class B Stock"). The Buyer also has options to
purchase (i) the Class A Stock held by Computervision should the Buyer
retire the Subordinated Note within one year of the transaction and
(ii) the Class B Stock for $15.0 million. Moreover, if CVSI does not
achieve certain specified levels of product revenues and operating
margins from Computervision-initiated referrals, CVSI will have the
option to purchase, at a nominal price, some or all of the Class A
Stock held by Computervision. The Buyer is a principal stockholder of
Computervision, and James B. Rubin, an executive officer and director
of the Company, serves as a director of Computervision.
(b) On July 9, 1997, a group of investors, including the Investment
Adviser and its affiliates, as well as T. Rowe Price Recovery Fund LP,
Carl Marks Management Co. and senior management, offered $24 a share
for the 20% of Seaman Furniture Company, Inc. Common Stock that they
do not already own.
6. Exhibits and Reports on Form 8-K
(a) Exhibit 27 - Financial Data Schedule (SEC use only)
(b) Reports on Form 8-K - None.
<PAGE 14>
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.
Date: August __, 1997 CORPORATE RENAISSANCE GROUP, INC.
By:/s/Martin D. Sass
Martin D. Sass, Chairman of the Board and
Chief Executive Officer
By:/s/Martin E. Winter
Martin E. Winter, Secretary-Treasurer
(Principal Financial and Accounting Officer)
<PAGE 15>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> JUN-30-1997
<CASH> 1,214,738
<SECURITIES> 6,034,915
<RECEIVABLES> 27,183
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 7,276,836
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 7,276,836
<CURRENT-LIABILITIES> 15,477
<BONDS> 0
0
0
<COMMON> 9,561
<OTHER-SE> 7,236,321
<TOTAL-LIABILITY-AND-EQUITY> 7,261,359
<SALES> 0
<TOTAL-REVENUES> (362,815)
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 94,709
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (457,524)
<INCOME-TAX> 12,149
<INCOME-CONTINUING> (445,375)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (445,375)
<EPS-PRIMARY> (.48)
<EPS-DILUTED> 0
</TABLE>
