SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the Quarterly Period Ended August 31, 1994
Or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
Commission file number 0-21160
COMMONWEALTH ASSOCIATES GROWTH FUND, INC.
(Exact Name of Registrant as Specified in its Charter)
Maryland 13-3698251
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
733 Third Avenue, 11th floor
New York, New York 10017
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (800) 888-6534
Not applicable
Former name, former address and former 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 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 the number of shares outstanding of each of the Registrant's
classes of common stock as of the latest practicable date. 2,204,000
shares of common stock.
INDEX
COMMONWEALTH ASSOCIATES GROWTH FUND, INC.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Statements of Assets and Liabilities as of August 31, 1994
(Unaudited) and February 28, 1994
Schedule of Portfolio Investments as of August 31, 1994 (Unaudited)
Statements of Operations for the Three Months Ended August 31, 1994
and 1993 (Unaudited)
Statements of Operations for the Six Months Ended August 31, 1994
(Unaudited) and for the Period from March 19, 1993 (commencement of
operations) to August 31, 1993 (Unaudited)
Statements of Changes in Net Assets for the Six Months ended August
31, 1994 (Unaudited) and for the Period from March 19, 1993
(commencement of operations) to August 31, 1993 (Unaudited)
Statements of Cash Flows for the Six Months ended August 31, 1994
(Unaudited) and for the Period from March 19, 1993 (commencement of
operations) to August 31, 1993 (Unaudited)
Notes to Financial Statements (Unaudited)
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
Item 2. Changes in Securities.
Item 3. Defaults upon Senior Securities.
Item 4. Submission of Matters to a Vote of Security Holders.
Item 5. Other Information.
Item 6. Exhibits and Reports on Form 8-K.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
COMMONWEALTH ASSOCIATES GROWTH FUND, INC.
STATEMENTS OF ASSETS AND LIABILITIES
August 31, 1994 February 28,
(Unaudited) 1994
ASSETS
Portfolio investments at fair value
(cost $7,895,962 at August 31, 1994
and $12,158,598 at February 28, 1994) $9,078,185 $11,645,538
Cash and cash equivalents 8,845,262 4,475,544
Receivable, net of unamortized discount of
$10,888 at August 31, 1994 and $45,088
at February 28, 1994 - Note 3 589,112 954,912
Accrued interest receivable 298,378 237,111
Deposit in escrow, Radiator King International, Inc.
- Note 4 240,000 255,000
Deferred organizational costs, net of accumulated
amortization of $57,199 at August 31, 1994
and $37,513 at February 28, 1994 139,666 159,352
Other assets 19,058 11,711
Total assets 19,209,661 17,739,168
LIABILITIES
Payable for securities purchased - 48,750
Accounts payable 53,626 38,431
Due to Administrator 138,935 103,765
Total liabilities 192,561 190,946
NET ASSETS
Preferred Stock, par value $.01; 2,000,000 shares authorized;
no shares issued or outstanding - -
Common Stock, par value $.01; 10,000,000 shares
authorized; 2,204,000 shares issued and
outstanding 22,040 22,040
Additional paid-in-capital 19,541,193 19,541,193
Net unrealized appreciation (depreciation)
of portfolio investments 1,182,223 (513,060)
Accumulated net investment income 248,223 55,079
Accumulated net realized loss from portfolio
investments (1,976,579) (1,557,030)
Net Assets $19,017,100 $17,548,222
Net assets per share of common stock $8.63 $ 7.96
See notes to financial statements.
COMMONWEALTH ASSOCIATES GROWTH FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS (UNAUDITED)
AUGUST 31, 1994
% of
Issuer / Position Cost Fair ValueNet Assets(1)
Alamar Biosciences, Inc. (A) (2)
150,000 shares of Common Stock $287,456 $253,125
Warrants to purchase 250,000 shares of Common Stock
at $5.00, expiring 10/14/97 20,906 112,500
308,362 365,625 1.92%
Bennett Environmental Inc.
8% Secured Promissory Note due 9/14/95 1,200,000 720,000
Warrants to purchase 900,000 shares of Common Stock
at $.60, expiring 9/1/98 900 900
1,200,900 720,900 3.79%
International Communication Technologies, Inc.
9% Convertible Promissory Note due 6/30/96 150,000 150,000 .79%
Loronix Information Systems, Inc. (A) (3)
Warrants to purchase 158,000 shares of Common Stock
at $4.88, expiring 6/28/97 0 236,210 1.24%
Oh-La-La! Inc.
9% Convertible Senior Note due 6/30/95 140,000 140,000
9% Convertible Senior Note due 11/30/95 100,000 100,000
240,000 240,000 1.26%
Optiva Corporation
150,000 shares of Common Stock 487,500 487,500 2.56%
Radiator King International, Inc.
9% Promissory Notes 60,000 60,000 .32%
Regency Holdings (Cayman), Inc.
10% Promissory Note due 1/20/95 2,000,000 2,000,000
Warrant to purchase 120,000 shares of Common Stock
at $9.00, expiring 7/20/98 0 0
2,000,000 2,000,000 10.52%
Shells Seafood Restaurants, Inc. *
9% Senior Secured Note due 10/30/95 1,310,000 1,310,000
300,000 shares of Common Stock 90,000 90,000
1,400,000 1,400,000 7.36%
Silverado Foods, Inc. * (A) (4)
337,500 shares of Common Stock 150,000 1,518,750 7.99%
COMMONWEALTH ASSOCIATES GROWTH FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS (UNAUDITED) - continued
AUGUST 31, 1994
% of
Issuer / Position Cost Fair ValueNet Assets(1)
SR Communications Corp.
250,000 shares of Preferred Stock $247,500 $247,500
250,000 shares of Common Stock 2,500 2,500
250,000 250,000 1.31%
Weir-Jones Marketing, Inc.
9% Convertible Subordinated Note
due 1/28/96 950,000 950,000 5.00%
YES! Entertainment Corporation
608,696 shares of Preferred Stock 699,200 699,200
Warrant to purchase 116,667 shares of Preferred Stock
at $1.50, expiring 7/16/98 0 0
699,200 699,200 3.68%
TOTAL PORTFOLIO INVESTMENTS(B) $7,895,962 $9,078,185 47.74%
* May be deemed an "affiliated person" of the Fund as such term is
defined in the Investment Company Act of 1940.
(A)Public company.
(B)During the quarter, the Fund sold its investments in marketable
securities. Equity investments in 14 publicly-traded companies with a
cost of $2.7 million were sold for $2.4 million.
(1)Represents fair value as a percentage of net assets.
(2)In June 1994, the Fund sold 50,000 shares of Alamar Biosciences, Inc.
for $104,000, realizing a gain of $8,000.
(3)On August 24, 1994, Loronix Information Systems, Inc. completed its
initial public offering. In connection with the offering, Loronix
completed a 1-for-2.5 reverse stock split. As a result, the Fund
exchanged its warrants to purchase 395,000 common shares at $1.95 per
share for warrants to purchase 158,000 common shares at $4.88 per
share. Additionally, the $1.37 million promissory note due from
Loronix was paid in full. Subsequent to the end of the quarter, in a
non-cash transaction, the Fund exchanged its warrants to purchase
158,000 common shares of Loronix for 47,852 common shares of Loronix.
Such shares were sold as part of the over-allotment option granted to
Commonwealth Associates, the underwriter of Loronix's initial public
offering, for an aggregate of $258,000.
(4)On August 4, 1994, Silverado Foods, Inc. completed its initial public
offering. In connection with the offering, the Fund converted its
$150,000 aggregate principal amount of subordinated notes into 337,500
common shares of Silverado. Additionally, the $1.35 million senior
notes due from Silverado were repaid with accrued interest thereon.
See notes to financial statements.
COMMONWEALTH ASSOCIATES GROWTH FUND, INC.
STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS ENDED AUGUST 31,
1994 1993
INVESTMENT INCOME AND EXPENSES
Income:
Interest from repurchase agreements $67,912 $110,266
Interest and dividends from portfolio investments 180,187 85,342
Loan origination fee 60,000 -
Total investment income 308,099 195,608
Expenses:
Administrative fee 47,773 49,608
Professional fees 22,791 38,757
Salary expense 43,220 43,139
Directors' fees and expenses 10,569 3,030
Amortization of deferred organizational costs 9,843 9,972
Performance fee - 27,944
Transfer agent and custodian fees 3,274 3,872
Mailing and printing 6,961 3,161
Insurance expense 8,686 1,567
Other operating expenses 4,301 15,384
Total expenses 157,418 196,434
Net investment income (loss) 150,681 (826)
NET REALIZED AND UNREALIZED GAIN FROM
PORTFOLIO INVESTMENTS
Net realized gain (loss) from portfolio investments (323,046) 54,375
Change in net unrealized appreciation or depreciation
of portfolio investments 1,562,186 139,928
Net realized and unrealized gain from portfolio
investments 1,239,140 194,303
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $1,389,821 $193,477
Per Share Net Increase in Net Assets Resulting
from Operations $ .63 $ .09
See notes to financial statements.
COMMONWEALTH ASSOCIATES GROWTH FUND, INC.
STATEMENTS OF OPERATIONS (UNAUDITED)
Period From
March 19, 1993
Six Months (Commencement
Ended of Operations) to
August 31, 1994 August 31, 1993
INVESTMENT INCOME AND EXPENSES
Income:
Interest from repurchase agreements $120,091 $192,189
Interest and dividends from portfolio
investments 340,099 96,009
Loan origination fee 60,000 -
Total investment income 520,190 288,198
Expenses:
Administrative fee 91,952 89,084
Professional fees 83,717 52,489
Salary expense 71,642 63,744
Directors' fees and expenses 15,069 5,030
Amortization of deferred organizational costs 19,686 17,827
Performance fee - 30,077
Transfer agent and custodian fees 6,066 8,544
Mailing and printing 8,352 5,161
Insurance expense 21,383 12,122
Other operating expenses 9,179 17,874
Total expenses 327,046 301,952
Net investment income (loss) 193,144 (13,754)
NET REALIZED AND UNREALIZED GAIN FROM
PORTFOLIO INVESTMENTS
Net realized gain (loss) from portfolio
investments (419,549) 54,375
Change in net unrealized appreciation or depreciation
of portfolio investments 1,695,283 228,678
Net realized and unrealized gain from portfolio
investments 1,275,734 283,053
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $1,468,878 $269,299
Per Share Net Increase in Net Assets Resulting
from Operations $ .67 $ .12
See notes to financial statements.
COMMONWEALTH ASSOCIATES GROWTH FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
Period From
March 19, 1993
Six Months (Commencement
Ended of Operations) to
August 31, 1994 August 31, 1993
Increase in net assets resulting from operations:
Net investment income (loss) $ 193,144 $(13,754)
Net realized gain (loss) from portfolio
investments (419,549) 54,375
Change in net unrealized appreciation or
depreciation of portfolio investments 1,695,283 228,678
Net increase in net assets resulting from
operations 1,468,878 269,299
Increase in net assets from capital stock transactions:
Gross proceeds from the sale of common stock - 21,940,000
Less:
Selling commissions - (1,535,800)
Expense allowance - (548,500)
Offering expenses - (392,467)
Net increase in net assets from capital stock
transactions - 19,463,233
Total increase in net assets for the period 1,468,878 19,732,532
Net assets at beginning of period 17,548,222 100,000
NET ASSETS AT END OF PERIOD $19,017,100 $19,832,532
See notes to financial statements.
COMMONWEALTH ASSOCIATES GROWTH FUND, INC.
STATEMENTS OF CASH FLOWS (UNAUDITED)
Period From
March 19, 1993
Six Months (Commencement
Ended of Operations) to
August 31, 1994 August 31, 1993
CASH FLOWS PROVIDED FROM OPERATING
ACTIVITIES
Net investment income (loss) $193,144 $(13,754)
Adjustments to reconcile net investment
income (loss) to cash provided from
operating activities:
Amortization of discounted receivable (34,200) -
Amortization of deferred organizational costs 19,686 17,827
Increase in payables 50,365 156,440
Increase in accrued interest receivable
and other assets (68,614) (153,700)
Cash flows provided from operating activities 160,381 6,813
CASH FLOWS PROVIDED FROM (USED FOR)
INVESTING ACTIVITIES
Purchase of portfolio investments (3,843,773) (8,037,247)
Net proceeds from the sale of portfolio
investments 5,318,110 318,750
Repayment of notes 2,720,000 -
Deposit released from escrow 15,000 -
Cash flows provided from (used for) investing
activities 4,209,337 (7,718,497)
CASH FLOWS PROVIDED FROM FINANCING
ACTIVITIES
Gross proceeds from the sale of common stock - 21,940,000
Cost of sale of common stock:
Selling commissions - (1,535,800)
Expense allowance - (548,500)
Offering expenses - (392,467)
Organizational expenses - (196,865)
Cash flows provided from financing activities - 19,266,368
Increase in cash and cash equivalents 4,369,718 11,554,684
Cash and cash equivalents at beginning
of period 4,475,544 100,000
CASH AND CASH EQUIVALENTS AT END OF PERIOD $8,845,262 $11,654,684
See notes to financial statements.
COMMONWEALTH ASSOCIATES GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Organization and Purpose
Commonwealth Associates Growth Fund, Inc. (the "Fund") is a non-
diversified, closed-end management investment company operating as a
business development company under the Investment Company Act of 1940.
The Fund was incorporated under the laws of the State of Maryland on
January 26, 1993. The Fund's investment objective is to achieve
intermediate to long-term capital appreciation of assets by investing in
securities of emerging and established companies that management believes
offer significant growth potential.
Reference is made to the Fund's February 28, 1994 annual report included
in Form 10-K as filed with the Securities and Exchange Commission for the
Notes to Financial Statements that remain unchanged. The following notes
are included as a result of changes during the current quarter or year to
date period.
2. Related Party Transactions
The Fund has completed investments in certain portfolio companies in which
Commonwealth Associates acted as a placement agent on behalf of the
portfolio companies. In July 1994, Commonwealth Associates received a
placement fee of $60,000 from Regency Holdings (Cayman), Inc.
In September 1994, as part of the over-allotment option granted to
Commonwealth Associates, the underwriter of Loronix Information Systems,
Inc.'s initial public offering, the Fund sold 47,852 common shares of
Loronix for an aggregate of $258,000. In connection with such sale,
Commonwealth Associates received underwriting discounts and commissions of
$29,000.
3. Receivable
In February 1994, the Fund's $1.2 million promissory note due from
Computer Integration Corporation was canceled in exchange for $1,000,000
to be paid in eleven installments, with the last installment due on
December 31, 1994. As of August 31, 1994, the Fund had received
installment payments from Computer Integration Corporation totaling
$400,000.
4. Deposit in Escrow, Radiator King International, Inc.
In December 1993, the Fund committed, subject to certain terms and
conditions, to invest $300,000 in Radiator King International, Inc., a
private company establishing a network of radiator repair shops. On
December 23, 1993, $45,000 was released from escrow to Radiator King for a
9% promissory note. An additional $15,000 was released from escrow in
March 1994 for an additional 9% promissory note. At August 31, 1994, the
Fund had $240,000 remaining in escrow relating to its original investment
commitment to Radiator King, which was returned to the Fund with interest
in September 1994.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Results of Operations
Realized and Unrealized Gains and Losses from Portfolio Investments
For the three months ended August 31, 1994 and 1993, the Fund had a net
realized and unrealized gain from portfolio investments of $1.2 million
and $194,000, respectively. For the six months ended August 31, 1994 and
for the period from March 19, 1993 (commencement of operations) to August
31, 1993 (the "commencement period"), the Fund had a net realized and
unrealized gain from portfolio investments of $1.3 million and $283,000,
respectively.
Realized Gains and Losses - For the three and six months ended August 31,
1994, the Fund had a net realized loss from its portfolio investments of
$323,000 and $420,000, respectively. During the three months ended August
31, 1994, the Fund sold 50,000 shares of Alamar Biosciences, Inc. in the
public market for $104,000, realizing a gain of $8,000. Additionally,
during the quarter, the Fund sold certain investments in publicly traded
marketable securities for $2.4 million, realizing a loss of $331,000.
During the three months ended May 31, 1994, the Fund sold 50,000 shares of
Alamar Biosciences in the public market for $107,000, realizing a gain of
$11,000. In March 1994, the Fund sold its $1.5 million investment in
EMARC, Inc. for $1.5 million, resulting in no gain or loss. Additionally
during the May quarter, the Fund sold certain marketable securities for
$820,000, realizing a loss of $108,000.
For the three months ended August 31, 1993 and for the commencement
period, the Fund had a $54,000 net realized gain from the sale of certain
marketable securities.
Unrealized Gains and Losses - For the three and six months ended August
31, 1994, the Fund had a $1.5 million and $1.6 million net unrealized gain
from its portfolio investments, respectively, primarily resulting from an
upward revaluation of the Fund's investment in Silverado Foods, Inc.,
which completed its initial public offering in August 1994. Additionally,
for the six months ended August 31, 1994, a net $74,000 was transferred
from unrealized loss to realized loss primarily relating to the portfolio
investments sold during the six month period, as discussed above. The
$1.6 million net unrealized gain and the $74,000 net transfer from
unrealized loss to realized loss resulted in a $1.7 million increase in
the Fund's net unrealized appreciation of portfolio investments for the
six months ended August 31, 1994.
For the three months ended August 31, 1993 and for the commencement
period, the Fund had a $140,000 and a $229,000 net unrealized gain,
respectively, resulting from the net upward revaluation of certain
portfolio investments.
Investment Income and Expenses
For the three months ended August 31, 1994 and 1993, the Fund had net
investment income of $151,000 and a net investment loss of $800,
respectively. For the six months ended August 31, 1994 and for the
commencement period, the Fund had net investment income of $193,000 and a
net investment loss of $14,000, respectively. The increase in net
investment income for the 1994 periods compared to the same periods in
1993, primarily was the result of an increase in interest and dividends
earned from portfolio investments. Also during the 1994 periods, net
investment income increased $60,000 from a loan origination fee related to
the Fund's investment in Regency Holdings (Cayman), Inc. ("Regency")
completed in July 1994. Interest and dividends earned from portfolio
investments for the three months ended August 31, 1994 and 1993 was
$180,000 and $85,000, respectively. Interest and dividends earned from
portfolio investments for the six months ended August 31, 1994 and the
commencement period was $340,000 and $96,000, respectively. The increase
in interest and dividends from portfolio investments resulted from an
increase in the amount invested in interest bearing debt securities of
certain portfolio investments held by the Fund during the 1994 periods
compared to the same periods in 1993. The increase in interest and
dividends from portfolio investments was partially offset by a decrease in
interest from repurchase agreements for the 1994 periods compared to the
same periods in 1993. The decline in interest earned from repurchase
agreements resulted from a decline in amounts invested in repurchase
agreements during the 1994 periods as idle cash was used for investments
in portfolio companies.
For the three months ended August 31, 1994 and 1993, the Fund's operating
expenses were $157,000 and $196,000, respectively. For the six months
ended August 31, 1994 and for the commencement period, the Fund's
operating expenses were $327,000 and $302,000, respectively.
The Fund has implemented an employee profit sharing plan that provides for
payment of a performance fee to certain officers of the Fund. The fee is
equal to 20% of interest, dividends and realized capital gains from
portfolio investments net of realized capital losses and net unrealized
capital depreciation. Such fee is calculated from the end of the fiscal
year for which fees were last paid. Accrued performance fees for the
three months ended August 31, 1993 and for the commencement period totaled
$28,000 and $30,000, respectively. These amounts were reversed during the
second half of the fiscal year ended February 28, 1994 as a result of
operating losses recorded during such period. Since its inception, the
Fund has made no performance fee payments. No performance fees were
accrued for the 1994 periods.
The Administrator is responsible for providing, or arranging for the
provision of, the administrative services necessary for the operation of
the Fund. As compensation for such services, the Administrator receives
an administrative fee at the annual rate of 1% of the net assets of the
Fund. Such fee is determined and payable quarterly. For the three months
ended August 31, 1994 and 1993, the administrative fee was $48,000 and
$50,000, respectively. For the six months ended August 31, 1994 and for
the commencement period, the administrative fee was $92,000 and $89,000,
respectively.
Net Assets
For the three months ended August 31, 1994, the Fund had a net increase in
net assets from operations of $1.4 million, or $.63 per share of common
stock, comprised of net investment income of $151,000 and net realized and
unrealized gain from portfolio investments of $1.2 million. For the six
months ended August 31, 1994, the Fund had a net increase in net assets
from operations of $1.5 million, or $.67 per share of common stock,
comprised of net investment income of $193,000 and net realized and
unrealized gain from portfolio investments of $1.3 million. At August 31,
1994, the Fund's net assets were $19 million, or $8.63 per share of common
stock.
For the three months ended August 31, 1993, the Fund had a $193,000 net
increase in net assets resulting from operations, or $.09 per share of
common stock, comprised of net investment loss of $800 and net realized
and unrealized gain from portfolio investments of $194,000. For the
commencement period, the Fund had a net increase in net assets from
operations of $269,000, or $0.12 per share of common stock, comprised of
net investment loss of $14,000 and net realized and unrealized gain from
portfolio investments of $283,000. The Fund's net assets were $19.8
million at August 31, 1993 and the net asset value per share of common
stock was $9.00, a decrease of $1.00 from the initial offering price of
$10.00 per share. The decrease from the initial public offering price
resulted from selling and offering expenses incurred in connection with
the Fund's initial public offering totaling $2.48 million, or $1.12 per
share, offset by the $.12 per share net increase in net assets resulting
from operations for the commencement period.
Liquidity and Capital Resources
In March and April 1993, the Fund commenced operations and completed its
initial public offering of common stock. The Fund sold a total of
2,194,000 shares of common stock at $10.00 per share in the offering.
Additionally, in 1993, Commonwealth Associates Asset Management, Inc. (the
"Administrator") purchased 10,000 shares of the Fund's common stock for
$100,000, or $10.00 per share. Gross proceeds received by the Fund from
the sale of its common stock during 1993 totaled $22,040,000 and net
proceeds after the payment of selling commissions, offering and
organizational expenses totaled $19,366,368.
During the three months ended August 31, 1994, the Fund invested $2
million in a new portfolio investment, Regency. In addition, during the
quarter, the Fund received repayment of its $1.35 million promissory note
due from Silverado Foods, Inc. and its $1.37 million promissory note due
from Loronix Information Systems, Inc. Subsequent to the end of the
quarter, the Fund sold 47,852 common shares of Loronix for $258,000.
Also, the Fund received payments totaling $150,000 relating to its
receivable due from Computer Integration Corporation. Additionally,
during the three months ended August 31, 1994, the Fund sold marketable
securities with an aggregate cost of $2.7 million, for $2.4 million.
The Fund invests its available cash in repurchase agreements
collateralized by U.S. Government securities. On August 31, 1994, the
Fund had $8.8 million invested in repurchase agreements. Such investments
provide the Fund with the liquidity necessary to allow continued
investment in portfolio companies as opportunities for investment arise.
Interest earned from repurchase agreements for the three and six months
ended August 31, 1994 totaled $68,000 and $120,000, respectively.
Interest earned in future periods is subject to fluctuations in short-term
interest rates and changes in amounts available for investment in
repurchase agreements.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
The Company is not party to any material pending legal proceedings.
Item 2. Changes in Securities.
Not applicable.
Item 3. Defaults Upon Senior Securities.
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted to a vote of security holders during the quarter
covered by this report.
Item 5. Other Information.
On July 20, 1994, the Fund invested $2 million in Regency, acquiring a 10%
promissory note and a warrant to purchase 120,000 shares of Regency common
stock at $9.00 per share. Regency is an operator of cruise ships.
During the three months ended August 31, 1994, the Fund made the following
investments in equity securities of public companies:
10,000 common shares of Celestial Seasonings, Inc. for $223,625, or
$22.36 per share,
15,000 common shares of Westcott Communications, Inc. for $172,000, or
an average price of $11.47 per share and
10,000 common shares of McLain Industries, Inc. for $114,250, or an
average price of $11.43 per share.
During the quarter, the Fund sold its investments in marketable
securities. Equity investments in 14 publicly-traded companies with a
cost of $2.7 million were sold for $2.4 million.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
None
(b) Reports on Form 8-K
None
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.
COMMONWEALTH ASSOCIATES GROWTH FUND, INC.
/s/ Kamal Mustafa
Kamal Mustafa
President, Chief Executive Officer and Director
(Principal Executive Officer)
/s/ Mark T. Behrman
Mark T. Behrman
Chief Financial Officer and Treasurer
(Principal Financial and Accounting Officer)
Date: October 14, 1994
