UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For quarterly period ended June 30, 2000
[ ] 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: 0-20671
RENAISSANCE CAPITAL GROWTH & INCOME FUND III, INC.
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(Exact name of registrant as specified in its charter)
Texas 75-2533518
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(State or other jurisdiction (I.R.S. Employer I.D. No.)
of incorporation or organization)
8080 North Central Expressway, Dallas, Texas 75206-1857
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(Address of principal executive offices)(Zip Code)
214/891-8294
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------ ------
4,361,617 shares of common stock were outstanding at August 15, 2000.
The Registrant's Registration Statement on Form N-2 was declared effective by
the Securities and Exchange Commission on May 6, 1994. <PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
RENAISSANCE CAPITAL GROWTH & INCOME FUND III, INC.
Statement of Assets and Liabilities
(Unaudited)
<TABLE>
Assets
<S> <S>
December 31, 1999 June 30, 2000
----------------- -------------
<C> <C>
Cash and cash equivalents $ 5,086,040 $ 6,034,266
Investments, at fair value, cost of
$34,457,935 and $36,112,573 in 1999
and 2000 respectively 41,346,302 49,425,688
Interest receivable 224,283 238,391
Other assets 68,497 54,225
----------- -----------
$46,725,122 $55,752,570
=========== ===========
Liabilities and Net Assets
Liabilities:
Accounts payable $ 111,708 $ 266,262
Accounts payable - affiliate 213,390 307,825
Dividends payable 465,718 -0-
----------- -----------
790,816 574,087
----------- -----------
Net Assets:
Common stock, $1 par value; 20,000,000
shares authorized; 4,561,618 issued,
4,142,942 and 4,361,617 outstanding 4,342,942 4,561,618
Additional paid-in capital 36,258,896 38,799,907
Treasury stock at cost, 200,000 shares at
December 31, 1999 and at June 30, 2000 (1,665,220) (1,665,220)
Undistributed net investment income 6,997,688 13,482,178
----------- -----------
Net assets 45,934,306 55,178,483
----------- -----------
$46,725,122 $55,752,570
=========== ===========
Net asset value per share $ 11.09 $ 12.65
=========== ===========
<FN>
See accompanying notes to financial statements. </FN> </TABLE> <PAGE>
RENAISSANCE CAPITAL GROWTH & INCOME FUND III, INC.
Statement of Operations
(Unaudited)
<TABLE> <S> <S>
Three Months Ended June 30, Six Months Ended June 30,
<S> <S> <S> <S>
1999 2000 1999 2000
---- ---- ---- ----
Investment Income: <C> <C> <C> <C>
Interest $ 320,943 $ 393,628 $ 815,488 $ 759,158
Dividends 78,733 31,213 314,897 61,087
Other investment
income 9,625 8,625 297 84,875
---------- ------------ ----------- -----------
Total investment
income 409,301 433,466 1,130,682 905,120
---------- ------------ ----------- -----------
Expenses:
Amortization -0- -0- 83,820 -0-
Bank charges 5,361 9,446 10,691 18,180
Directors' fees 14,000 19,000 28,000 33,000
Legal and
professional 22,761 53,016 51,076 116,909
Management fees 235,390 242,467 445,852 589,973
Taxes 27,840 25,763 27,840 24,884
Other 70,231 76,539 110,620 126,833
---------- ------------ ----------- -----------
Total expenses 375,583 426,231 757,899 909,779
---------- ------------ ----------- -----------
Net investment
income 33,718 7,235 372,783 (4,659)
Realized gain on
investments 3,824,391 -0- 3,824,391 6,444,540
Unrealized gain (loss)
on investments 1,190,168 (18,679,683) 7,274,888 6,424,738
---------- ------------ ----------- -----------
Net increase (decrease)
in net assets result-
ing from operations $5,048,277 $(18,672,448) $11,472,062 $12,864,619
========== ============ =========== ===========
<FN>
See accompanying notes to financial statements. </FN> </TABLE> <PAGE>
RENAISSANCE CAPITAL GROWTH & INCOME FUND III, INC.
Statement of Changes in Net Assets
(Unaudited)
<TABLE> <S> <S>
Three Months Ended June 30, Six Months Ended June 30,
<S> <S> <S> <S>
1999 2000 1999 2000
---- ---- ---- ----
<C> <C> <C> <C>
Increase (decrease) in
net assets resulting
from operations
Investment income -
net $ 33,718 $ 7,235 $ 372,783 $ (4,659)
Realized gain on
investment 3,824,391 -0- 3,824,391 6,444,540
Unrealized gain (loss)
on investments 1,190,168 (18,679,683) 7,274,888 6,424,738
----------- ----------- ----------- -----------
Net increase
(decrease) in net
assets resulting
from operations 5,048,277 (18,672,448) 11,472,062 12,864,619
Proceeds from shares
issued -0- 2,759,688 -0- 2,759,688
Distributions to
shareholders (3,065,777) (6,380,130) (3,397,712) (6,380,130)
Cost of shares
repurchased -0- -0- (3,780) -0-
----------- ----------- ----------- -----------
Total increase
(decrease) 1,982,500 (22,292,890) 8,070,570 9,244,177
Net assets
Beginning of period 47,563,771 77,471,373 41,475,701 45,934,306
----------- ----------- ----------- -----------
End of period $49,546,271 $55,178,483 $49,546,271 $55,178,483
=========== =========== =========== ===========
<FN>
See accompanying notes to financial statements. </FN> </TABLE> <PAGE>
RENAISSANCE CAPITAL GROWTH & INCOME FUND III, INC.
Notes to Financial Statements
June 30, 2000
1. Organization and Business Purpose
Renaissance Capital Growth & Income Fund III, Inc. (the "Fund"), a Texas
corporation, was formed on January 20, 1994. The Fund sold shares pursuant
to its initial offering throughout 1994, and the final closing of the initial
offering occurred on December 31, 1994. The Fund seeks to achieve current
income and capital appreciation potential by investing primarily in
unregistered equity investments and convertible issues of small and medium
size companies which are in need of capital and which Renaissance Capital
Group, Inc. ("Investment Advisor") believes offers the opportunity for
growth. The Fund is a non-diversified closed-end investment company and has
elected to be treated as a business development company under the Investment
Company Act of 1940, as amended ("1940 Act").
2. Significant Accounting Policies
A. Federal Income Taxes - The Fund intends to elect the special income tax
treatment available to "regulated investment companies" under Subchapter M
of the Internal Revenue Code in order to be relieved of federal income tax
on that part of its net investment income and realized capital gains that
it pays out to its shareholders. The Fund's policy is to comply with the
requirements of the Internal Revenue Code that are applicable to regulated
investment companies and to distribute all its taxable income to its
shareholders. Therefore, no federal income tax provision is required.
B. Distributions to Shareholders - Dividends to shareholders are recorded on
the ex-dividend date. The Fund paid a $1.54 per share dividend on June 9,
2000 to shareholders of record at May 26, 2000. This dividend resulted
from gains made in the first quarter of 2000 on the sale of a portion of
the Fund's investment in Simtek Corporation.
C. Management Estimates - The financial statements have been prepared in
conformity with generally accepted accounting principles. The preparation
of the accompanying financial statements requires estimates and
assumptions made by the Investment Adviser as to the valuation of
investments that effect the amounts and disclosures in the financial
statements. Actual results could differ significantly from those
estimates.
D. Financial Instruments - In accordance with the reporting requirements of
Statement of Financial Accounting Standards No. 107, "Disclosures about
Fair Value of Financial Instruments," the Company calculates the fair
value of its financial instruments and includes this additional
information in the notes to the financial statements when the fair value
is different than the carrying value of those financial instruments. When
the fair value reasonably approximates the carrying value, no additional
disclosure is made.
3. Investment Advisory Agreement
The Investment Adviser for the Fund is registered as an investment adviser
under the Investment Advisers Act of 1940. Pursuant to an Investment
Advisory Agreement, the Investment Adviser performs certain services,
including certain management, investment advisory and administrative services
necessary for the operation of the Fund. The Investment Adviser receives a
fee equal to .4375% (1.75% annually) of the Net Assets each quarter. The
<PAGE>
RENAISSANCE CAPITAL GROWTH & INCOME FUND III, INC.
Notes to Financial Statements (Continued)
June 30, 2000
3. Investment Advisory Agreement
Fund accrued a liability of $242,467 for such operational management fees
performed during the quarter ended June 30, 2000.
In addition to the management fee, the Investment Advisory Agreement entitles
the Investment Adviser to an incentive fee equal to 20% of any net realized
capital gains after allowance for any unrealized capital loss of the Fund.
This management incentive fee is calculated on a quarterly basis. There were
no incentive fees earned for the quarterly period that ended June 30, 2000.
Finally, the Investment Adviser is reimbursed for administrative expenses
paid by the Investment Adviser on behalf of the Fund. Such reimbursement was
$46,335 for the quarter ending June 30, 2000, and is included in general and
administrative expenses in the accompanying statement of operations.
4. Capital Share Transactions
As of June 30, 2000 there were 20,000,000 shares of $1 par value capital
stock authorized, 4,561,618 shares issued, 4,361,617 shares outstanding, and
additional paid-in capital aggregating $41,696,306. On June 9, 2000, the
Fund paid a dividend of $1.54 per share. At June 23, 2000, the Fund's stock
was trading at a premium to its $12.62 Net Asset Value ("NAV"), thereby
entitling those shareholders participating in the Dividend Reinvestment Plan
("DRIP") to have new shares issued by the Fund at NAV. As a result, 218,675
new shares were issued pursuant to the DRIP increasing the Fund's total
shares outstanding to 4,361,617.
Year-to-date transactions in capital stock are as follows:
<TABLE> <S> <S>
Shares Amount
------ ------
<C> <C>
Balance December 31, 1999 4,142,942 $38,936,618
Shares repurchased 218,675 2,759,688
--------- -----------
Balance June 30, 2000 4,361,617 $41,696,306
========= ===========
</TABLE>
5. Temporary Investments
At June 30, 2000, temporary investments were held in a money market fund made
up of U.S. Treasury obligations. As additional cash is realized from the
liquidation of investments, temporary investments will also be comprised of
U. S. Government and Agency obligations having slightly higher yields and
maturity dates of three months or less. These investments qualify for
investment as permitted in Section 55(a) (1) through (5) of the 1940 Act.
<PAGE>
RENAISSANCE CAPITAL GROWTH & INCOME FUND III, INC.
Notes to Financial Statements (Continued)
June 30, 2000
6. Investments
The Fund invests primarily in convertible securities and equity investments
of companies that qualify as Eligible Portfolio Companies as defined in
Section 2(a)(46) of the 1940 Act or in securities that otherwise qualify for
investment as permitted in Section 55(a)(1) through (5). Under the
provisions of the 1940 Act at least 70% of the Fund's assets, as defined
under the 1940 Act, must be invested in Eligible Portfolio Companies. In the
event the Fund has less than 70% of its assets in eligible portfolio
investments, then it will be prohibited from making non-eligible investments
until such time as the percentage of eligible investments again exceeds the
70% threshold.
The Fund's investments are carried in the statements of assets and
liabilities as of June 30, 2000 at fair value as determined in good faith by
the Investment Advisor. The convertible debt securities held by the Fund
generally have maturities between five and seven years and are convertible
into the common stock of the issuer at a set conversion price at the
discretion of the Fund. The common stock underlying these securities is
generally unregistered and thinly to moderately traded. The Fund may attempt
to register and sell unregistered securities at any time if the Fund pays the
costs of registration, or in the case of securities restricted by Rule 144 of
the Securities Act of 1933 (the "Act"), the Fund may exit from some or all of
a restricted position if certain holding periods, volume requirements, and
other conditions of the Act are met.
Interest on convertible debentures is generally payable monthly. The
convertible debt securities generally contain embedded call options giving
the issuer the right to call the underlying issue. In these instances, the
Fund has the right of redemption or conversion. The embedded call option
will generally not vest until certain conditions are achieved by the issuer.
Such conditions may require that minimum thresholds be met relating to
underlying market prices, liquidity, and other factors.
<TABLE> INVESTMENT VALUATION SUMMARY
<S> <S> <S>
CONVERSION FAIR
COST OR FACE VALUE VALUE
<C> <C> <C>
Bentley Pharmaceuticals, Inc.
Common Stock $ 1,536,029 $ 7,353,349 $ 7,279,816
Options -0- -0- -0-
CaminoSoft Corp.
Common Stock 4,625,000 8,015,626 7,796,408
Warrants to purchase 500,000 shares -0- 500,000 500,000
CareerEngine Network, Inc.
12% Convertible Debenture 250,000 250,000 250,000
Warrants to purchase 62,500 shares -0- -0- -0-
Warrants to purchase 62,500 shares -0- -0- -0-
CEREUS Technology Partners, Inc.
Common Stock 512,500 916,094 811,128
Warrants to purchase 102,500 shares -0- -0- -0-
</TABLE> <PAGE>
RENAISSANCE CAPITAL GROWTH & INCOME FUND III, INC.
Notes to Financial Statements (Continued)
June 30, 2000
6. Investments (continued)
<TABLE> INVESTMENT VALUATION SUMMARY
<S> <S> <S>
CONVERSION FAIR
COST OR FACE VALUE VALUE
Communications World Intl., Inc. <C> <C> <C>
8% Convertible Debenture 250,000 250,000 250,000
Warrants to purchase 100,000 shares 2,000 80,625 25,788
Dexterity Surgical, Inc.
9% Convertible Debenture 1,500,000 1,500,000 1,500,000
8% Convertible Preferred Stock 1,000,000 552,884 552,884
Common Stock 635,000 186,875 125,662
Display Technologies, Inc.
8.75% Convertible Debenture 1,750,000 1,750,000 1,750,000
5.25% Convertible Preferred Stock 500,000 500,000 500,000
Common Stock 1,049,741 782,591 774,765
Warrants to purchase 126,000 shares -0- -0- -0-
The Dwyer Group, Inc.
Common Stock 1,966,632 1,771,875 1,754,156
eOriginal, Inc.
5% Convertible Preferred Stock 1,999,980 1,999,980 1,999,980
Warrants to purchase 659 shares 165 165 165
Fortune Natural Resources Corp.
Common Stock 545,500 495,898 436,052
Warrants to purchase 200,000 shares -0- -0- -0-
Grand Adventures Tour & Travel
Publishing Corp.
10% Convertible Debenture 350,000 350,000 350,000
Common Stock 130,089 142,188 140,766
Integrated Security Systems, Inc.
Promissory Notes 265,000 265,000 265,000
Convertible Note 375,000 495,219 465,506
9% Convertible Debenture 2,084,101 2,752,228 2,616,499
9% Convertible Preferred Stock 150,000 150,000 150,000
Common Stock 215,899 285,113 282,262
Warrants to purchase 814,299 shares 3,750 67,867 64,020
JAKKS Pacific, Inc.
Common Stock 3,324,125 8,663,368 8,576,733
Laserscope
8% Convertible Debenture 1,500,000 1,837,500 1,677,250
Medical Action Industries, Inc.
Common Stock 555,392 560,000 554,400
Play by Play Toys & Novelties, Inc.
8% Convertible Debenture 2,500,000 2,500,000 2,500,000
</TABLE> <PAGE>
RENAISSANCE CAPITAL GROWTH & INCOME FUND III, INC.
Notes to Financial Statements (Continued)
June 30, 2000
6. Investments (continued)
<TABLE> INVESTMENT VALUATION SUMMARY
<S> <S> <S>
CONVERSION FAIR
COST OR FACE VALUE VALUE
<C> <C> <C>
Poore Brothers, Inc.
9% Convertible Debenture 859,047 1,422,797 1,337,429
Common Stock 1,104,123 1,776,013 1,619,452
Warrants to purchase 85,000 shares -0- 25,781 24,235
Options -0- 3,438 3,232
RailAmerica, Inc.
6% Convertible Debenture 500,000 500,000 500,000
Warrants to purchase 15,000 shares -0- -0- -0-
Simtek Corporation
Common Stock 195,000 1,500,000 1,360,000
SiVault, Inc.
Common Stock 350,000 350,000 350,000
ThermoView Industries, Inc.
Common Stock 500,000 -0- -0-
Voice It Worldwide, Inc.
Investment 3,028,500 3,028,500 282,100
----------- ----------- -----------
$36,112,573 $53,580,974 $49,425,688
<FN>
Pursuant to procedures established by the Investment Advisor, the fair value of
each investment will initially be based upon its original cost to the Fund.
Costs will be the primary factor used to determine fair value until significant
developments affecting the investee company provide a basis for use in an
appraisal valuation. The fair value of debt securities and preferred securities
convertible into common stock is the sum of (a) the value of such securities
without regard to the conversion feature, and (b) the value, if any, of the
conversion feature. The fair value of debt securities without regard to
conversion features is determined on the basis of the terms of the debt
security, the interest yield and the financial condition of the issuer. The
fair value of preferred securities without regard to conversion features is
determined on the basis of the terms of the preferred security, its dividend,
and its liquidation and redemption rights and absent special circumstances will
typically be equal to the lower of cost or 120% of the value of the underlying
common stock. The fair value of the conversion features of a security, if any,
are based on fair values as of the relevant date less an allowance, as
appropriate, for costs of registration, if any, and selling expenses. Publicly
traded securities, or securities that are convertible into publicly traded
securities, are valued at the last sale price, or in the event no closing price
exists at the average closing bid and asked price, as of the valuation date.
While these valuations are believed to represent fair value, these values do not
necessarily reflect amounts which may be ultimately realized upon disposition of
such securities. </FN> </TABLE> <PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
(1) Material Changes in Financial Condition
The following portfolio transactions are noted for the quarter ended June
30, 2000 (portfolio companies are herein referred to as the "Company"):
CareerEngine Network, Inc. (CNE) During the second quarter, the Fund
advanced the Company $250,000 pursuant to a 12% Convertible Subordinated
Debenture due May 2010. The debenture is subordinated to the Company's senior
lenders and is convertible into the Company's common stock at a rate of $2.00
per share. The debenture contains standard anti-dilution provisions and
entitles the Fund to demand and piggyback registration rights. The Company has
the right to redeem the debenture with at least thirty days' notice to the Fund
so long as the reported closing price of the common stock equals or exceeds
2.154 times the conversion price in effect for a period of twenty consecutive
trading days. In addition to the debenture, as consideration for making the
investment the Fund received 125,000 warrants to purchase the Company's common
stock. Half of the warrants are exercisable at $4.00 per share on or before
May 2003, and the remaining 62,500 warrants are exercisable at $6.00 per share
on or before May 2005.
In addition to the Fund's investment, Renaissance US Growth and Income
Trust PLC ("RUSGIT") also purchased $250,000 worth of the Company's Convertible
Subordinated Debentures and also received 125,000 warrants to purchase the
Company's common stock all of which were purchased pursuant to the same terms
and conditions as the Fund's investment.
Dexterity Surgical, Inc. (DEXT) In the second quarter, the conversion
price on the Fund's preferred stock investments was lowered from $1.60 per share
to $1.56 per share in consideration of the Fund's allowance of an investment
into the Company by third party investors.
RUSGIT also had the conversion prices on its preferred stock investments
lowered from $1.60 per share to $1.56 per share in an identical fashion to the
lowering of the Fund's conversion prices.
Grand Adventures Tour and Travel Publishing Corp. (GATT) Subsequent to
June 30, 2000, the Fund made a follow-on investment in the Company by purchasing
$500,000 in 8% Convertible Debentures. The debentures have a four year term,
accrue interest quarterly, and are convertible into the Company's common stock
at a rate of $3.10 per share. The debentures may be redeemed by the Company if
the per share bid price of the common stock at the close of trading on each of
the ten business days preceding the delivery date of the notice of redemption
equals or exceeds $8.50 per share and at least thirty days' notice is given to
the Fund of the redemption. As consideration for making the investment, the
Fund received piggyback registration rights for all of its investments.
RUSGIT also made a $500,000 follow-on investment in the 8% Convertible
Debentures of the Company subsequent to June 30, 2000. The investment by RUSGIT
was made pursuant to the same terms and conditions as the Fund's investment, and
also entitles RUSGIT to the same registration rights on all RUSGIT investments
as was obtained by the Fund.
Integrated Security Systems, Inc. (IZZI) On May 5, 2000, the Fund
advanced the Company $150,000 pursuant to a 9% Promissory Note in which all
accrued unpaid interest and principal on the note is due and payable on demand.
The note is secured by the parent and its four subsidiaries which own all or
substantially all the assets of the Company, and is also secured by a Stock
Pledge Agreement between the parent company and the Fund. Also on May 5, 2000,
the Fund renewed and extended its $115,000 Promissory Note and amended its
$375,000 Convertible Promissory Note so that both became secured by all or
substantially all the Company's assets.
RUSGIT also lent the Company $150,000 pursuant to a 9% Promissory Note on
May 5, 2000, and on that date also renewed and extended its $115,000 Promissory
Note and amended its $225,000 Convertible Promissory Note, all of which were
done under identical terms and conditions as the Fund's transactions.
Poore Brothers, Inc. (SNAK) Effective June 28, 2000, the Fund obtained
options to purchase the Company's common stock pursuant to the Company's 1995
Stock Option Plan. In total, the Fund received options to purchase 15,000
shares of Poore Brothers common stock at a price of $3.06 per share, which
<PAGE>
options were granted June 12, 1997, vested June 12, 1998, and must be exercised
on or before June 12, 2002. In addition, the Fund obtained options to purchase
10,000 shares of the Company's common stock at $1.31 per share, which options
were granted May 14, 1998, vested May 14, 1999, and must be exercised on or
before May 14, 2003. These options were obtained by assignment from Robert C.
Pearson, Senior Vice President of Renaissance Capital Group, Inc., who earned
the options as a member of the Board of Directors of the Company.
RUSGIT did not receive any of the above referenced options to purchase the
Company's common stock because RUSGIT had no investment in the Company at the
time the above referenced options were granted.
(2) Material Changes in Operations
For the quarter ended June 30, 2000, the Fund had net investment income of
$7,235, a decrease from the $33,718 in net investment income realized in the
second quarter of 1999. The decrease was primarily a result of increased legal
and professional fees, and increased management fees which resulted from an
increase in the value of the Fund's investment portfolio. For the quarter,
operating expenses increased 13.5% in comparison to the same quarter of last
year, which increase outweighed the 5.9% increase in investment income in the
period, which increase was attributable to higher interest earned on porfolio
assets.
For the six months ended June 30, 2000, the Fund had a net investment loss
of $(4,659) versus net investment income of $372,783 for the comparable period
of 1999. The decrease is attributable to a 19.9% decrease in investment income
which resulted from lower interest and dividend income to the Fund as a result
of converting debt and preferred stock instruments into non-income generating
common stock, together with a 20% increase in operating expenses for the period,
due to increased legal and professional fees and higher management fees
resulting from an increase in the value of the Fund's investment portfolio.
During the second quarter, the Fund experienced $18,679,683 of unrealized
losses as a result of lower market prices for securities held in the investment
portfolio. For the year to date, however, the Fund has experienced $6,424,738
in unrealized gains on its investments.
Pending investment in portfolio investments, funds are invested in
temporary cash accounts and in government securities. At June 30, 2000, all of
these funds were held in a money market fund made up of U.S. Treasury
obligations. As additional cash is realized from the liquidation of
investments, temporary investments will also be comprised of U. S. Government
and Agency obligations having slightly higher yields and maturity dates of three
months or less. These investments qualify for investment as permitted in
Section 55(a) (1) through (5) of the 1940 Act.
On June 9, 2000, the Registrant paid a dividend to shareholders in the
amount of $6,380,130 or $1.54 per share, bringing total distributions made over
the life of the Fund to $7.02. <PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Fund has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
RENAISSANCE CAPITAL GROWTH & INCOME FUND III, INC.
August 15, 2000 /S/
_________________________________________________
Russell Cleveland, Chairman and President
(Principal Executive Officer)
August 15, 2000 /S/
_________________________________________________
Barbe Butschek, Chief Financial Officer
(Principal Financial Officer)
<PAGE>
