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Previous: JHAVERI TRUST, 485BPOS, 1996-08-09 |
Next: BOISE CASCADE OFFICE PRODUCTS CORP, 10-Q, 1996-08-09 |
<PAGE> 1
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 the Period Ended June 30, 1996
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 33-89506
--------
BERTHEL GROWTH & INCOME TRUST I
----------------------------------------------------
(Exact name of Registrant as specified in its charter)
DELAWARE 52-1915821
------------------------------- ------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
100 Second Street SE, Cedar Rapids, Iowa 52401
------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(319) 365-2506
---------------------------------------------------
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
--- ---
Applicable Only to Corporate Issuers
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.
Shares of Beneficial Interest - 7,336 shares as of July 26, 1996.
-----
<PAGE> 2
Page 2
BERTHEL GROWTH & INCOME TRUST I
INDEX
PART I. FINANCIAL INFORMATION PAGE
- ------------------------------ ------
Item 1. Financial statements (unaudited):
Statement of assets and liabilities - June 30, 1996 and
December 31, 1995 3
Statements of operations - three months ended June 30,
1996 and three months ended June 30, 1995 4
Statements of operations - six months ended June 30,
1996 and period from February 10, 1995 (date of inception)
to June 30, 1995 5
Statement of changes in net assets - six months ended
June 30, 1996 6
Statements of cash flows - six months ended June 30,
1996 and for the period from February 10, 1995 (date
of inception) to June 30, 1995 7
Notes to financial statements 8
Item 2. Management's discussion and analysis of financial condition
and results of operations. 8
PART II. OTHER INFORMATION
- ----------------------------
Item 1. Legal proceedings - none
Item 2. Changes in securities - none
Item 3. Defaults upon senior securities - none
Item 4. Submission of matters to a vote of security holders - none
Item 5. Other information - none
Item 6. Exhibits and reports on Form 8-K
a. Exhibits - none
b. No report or Form 8-K was filed for the quarter ended
June 30, 1996.
SIGNATURES
<PAGE> 3
Page 3
BERTHEL GROWTH & INCOME TRUST I
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
<TABLE>
<CAPTION>
June 30, 1996 December 31,
1995
------------- ------------
<S> <C> <C> <C>
ASSETS
Cash $ 225,591 $ 102,269
Temporary investment in money
market securities at market value 2,613,608 4,272,549
Interest receivable 39,198 17,830
Other receivables 2,682 -0-
Organizational costs 3,667 4,167
Investments:
Notes receivable 2,180,000 -0-
Convertible subordinated debenture 1,000,000 3,180,000 -0-
--------- ----------- ----------
Total assets 6,064,746 4,396,815
----------- ----------
LIABILITIES
Accounts payable 6,944 -0-
Due to affiliate 35,854 27,214
Distributions payable to shareholders 421,933 126,787
----------- ----------
Total liabilities 464,731 154,001
----------- ----------
NET ASSETS (equivalent to $805.99 per share
in 1996 and $827.38 per share in 1995) $5,600,015 $4,242,814
========= =========
Net assets consist of:
Shares of beneficial interest (25,000 shares
authorized; 6,948 shares in 1996 and
5,128 shares in 1995, issued and outstanding) $5,525,217 $4,257,497
Undistributed net investment gain (loss) 74,798 (14,683)
----------- ----------
$5,600,015 $4,242,814
=========== ==========
</TABLE>
See notes to financial statements.
<PAGE> 4
BERTHEL GROWTH & INCOME TRUST I
STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
June 30, 1996 June 30, 1995
------------------ ------------------
<S> <C> <C>
INVESTMENT INCOME:
Interest income $106,459 $ 25
Commitment fee 63,600 -0-
-------- ------
Total investment income 170,059 25
EXPENSES:
Management fees 35,854 -0-
Administrative services 9,912 -0-
Trustee fees 22,000 -0-
Data processing 2,400 -0-
Audit and accounting fees 16,875 -0-
Other general and administrative
expenses 583 70
-------- ------
Total expenses 87,624 70
-------- ------
Net increase (decrease) in net assets
resulting from operations $82,435 $ (45)
======== ======
Net income (loss) per beneficial share $ 12.53 $(4.50)
======== =======
</TABLE>
See notes to financial statements.
<PAGE> 5
Page 5
BERTHEL GROWTH & INCOME TRUST I
STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
February 10, 1995
Six Months Ended (date of inception)
June 30, 1996 to June 30, 1995
---------------- -------------------
<S> <C> <C>
INVESTMENT INCOME:
Interest income $162,504 $ 25
Commitment fee 63,600 -0-
-------- -------
Total investment income 226,104 25
EXPENSES:
Management fees 66,144 -0-
Administrative services 19,824 -0-
Trustee fees 24,000 -0-
Data processing 4,200 -0-
Audit and accounting fees 20,250 -0-
Other general and administrative
expenses 2,205 328
-------- -------
Total expenses 136,623 328
-------- -------
Net increase (decrease) in net assets
resulting from operations $ 89,481 $ (303)
======== ========
Net income (loss) per beneficial share $ 14.72 $(30.30)
======== ========
</TABLE>
See notes to financial statements.
<PAGE> 6
Page 6
BERTHEL GROWTH & INCOME TRUST I
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
Six Months Ended June 30, 1996
<TABLE>
<CAPTION>
Shares of
Beneficial
Interest Amount
---------- -------
<S> <C> <C>
Net assets at December 31, 1995 5,128 $4,242,814
Net investment income for period --- 89,481
Proceeds from sales of shares of beneficial interest 1,820 1,820,000
Syndication costs incurred --- (257,135)
Distributions payable --- (295,145)
-------- ---------
Net assets at June 30, 1996 6,948 $5,600,015
======== ==========
</TABLE>
See notes to financial statements.
<PAGE> 7
Page 7
BERTHEL GROWTH & INCOME TRUST I
STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended February 10, 1995
June 30, 1996 (date of inception)
to June 30, 1995
---------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net investment income (loss) $ 89,481 $ (303)
Adjustments to reconcile net investment income
(loss) to net cash flows from operating activities
Amortization of organizational costs 500 -0-
Changes in operating assets and liabilities:
Temporary investment in money
market securities 1,658,942 -0-
Other receivable (2,682) -0-
Interest receivable (21,368) -0-
Due to affiliate 8,640 250
Accounts payable 6,944 -0-
---------- --------
Net cash flows from operating activities 1,740,457 (53)
---------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in: VisionComm, Inc. (2,180,000) -0-
Soil Recovery Systems, Inc. (1,000,000) -0-
---------- --------
Net cash flows from investing activities (3,180,000) -0-
---------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sales of shares of beneficial interest 1,820,000 10,000
Syndication costs incurred (257,135) -0-
---------- ---------
Net cash flows from financing activities 1,562,865 10,000
---------- ---------
NET INCREASE IN CASH 123,322 9,947
CASH AT BEGINNING OF PERIOD 102,269 -0-
---------- ---------
CASH AT END OF PERIOD $ 225,591 $ 9,947
========== =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Noncash financing activities:
Distributions to shareholders $ 295,145 $ -0-
</TABLE>
See notes to financial statements.
<PAGE> 8
Page 8
BERTHEL GROWTH & INCOME TRUST I
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE A -- BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all information and footnotes required
by generally accepted accounting principles for complete financial statements
and should be read in conjunction with the Company's Form 10-K filed with the
Securities and Exchange Commission on March 22, 1996. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair representation have been included. Operating
results for the six months ended June 30, 1996 are not necessarily indicative
of the results that may be expected for the year ended December 31, 1996.
NOTE B - NET INCOME (LOSS) PER BENEFICIAL SHARE
Net income (loss) per beneficial share is based on the weighted average of
shares outstanding which were 6,577 for the period from April 1, 1996 to June
30, 1996, 6,080 for the period from January 1, 1996 to June 30, 1996, and 10
shares for the corresponding periods in 1995.
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended Six Months Ended February 10, 1995
DESCRIPTION: June 30, 1996 June 30, 1995 June 30, 1996 (date of inception)
to June 30, 1995
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest income $106,459 $ 25 $162,504 $25
Commitment fee income $ 63,600 $ -0- $ 63,600 $-0-
Management fees $ 35,854 $ -0- $ 66,144 $-0-
Administrative services $ 9,912 $ -0- $ 19,824 $-0-
Trustee fees $ 22,000 $ -0- $ 24,000 $-0-
Audit and accounting fees $ 16,875 $ -0- $ 20,250 $-0-
</TABLE>
Berthel Growth & Income Trust I ("The Trust") was formed on February 10, 1995.
The Trust received approval from the Securities and Exchange Commission to
begin offering shares of beneficial interest ("shares") effective June 21,
1995.
The minimum offering of 1,500 shares sold was reached on August 30, 1995. As
of June 30, 1996, 6,948 shares were issued and outstanding.
<PAGE> 9
Page 9
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED).
INTEREST INCOME: The Trust has earned $41,828 of interest from short term
temporary investments for the three months ended June 30, 1996. On April 30,
1996, $2,180,000 of short term money market investments were liquidated to
acquire a 14% senior secured note with VisionComm, Inc. ("VCI"). The VCI
investment generated $51,715 of interest income during the current quarter. On
May 31, 1996, $1,000,000 of money market funds were liquidated to acquire a 15%
convertible subordinated debenture issued by Soil Recovery Systems, Inc.
("SRS"). The SRS investment has generated $12,917 of interest income during
the current quarter.
COMMITMENT FEE INCOME: The Trust received a 2% commitment fee from VCI and
SRS. This amounted to $43,600 from VCI and $20,000 from SRS.
MANAGEMENT FEES: Management Fees of $35,854 were incurred for the three months
ended June 30, 1996. The Trust pays the Trust Advisor an annual management fee
equal to 2.5% of the net asset value of the Trust.
ADMINISTRATIVE SERVICES: Administrative fees of $9,912 were paid to the Dealer
Manager for administration of shareholder accounts and other administrative
services.
TRUSTEE FEES: As compensation for services rendered to the Trust, each
Independent Trustee is paid $12,000 annually plus $1,000 per meeting of the
Board attended up to a maximum of $24,000 in meeting fees per year. The
Independent Trustees were paid $7,000 each in the current quarter for prior
unpaid fees.
AUDIT AND ACCOUNTING FEES: The Trust incurred $13,500 for audit and tax
preparation fees relating to the 1995 financials. The Trust is accruing $1,125
per month for the 1996 year.
SECURITIES AND EXCHANGE COMMISSION FILINGS: On June 14, 1996, the Trust filed,
with the Securities and Exchange Commission, a Cumulative Supplement No. 2
("Sup. 2") to the prospectus dated June 21, 1995. Sup. 2 provides for the
renewal of registration and extension of the offering period to June 21, 1997.
In addition to the extension of the offering period, the purpose of Sup. 2 was
to: a) report the status of the offering; b) provide information on the
status of investments in portfolio companies through May 31, 1996; c) provide
a description of additional information regarding the Trust and the Offering;
and d) show the financial statements of the Trust and Berthel Fisher & Company
Planning, Inc.
<PAGE> 10
Page 10
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED).
PORTFOLIO COMPANY INVESTMENTS: The Trust has invested $2,180,000 in a senior
secured note issued by VisionComm, Inc. The 5 year note carries a 14% annual
interest rate with interest only due the first year with no prepayment penalty.
Equal monthly payments on the basis of a five-year amortization are due
thereafter. The investment also includes warrants exercisable over a seven
year period for 125,000 shares of common stock of VCI. The note is secured by
all of the assets of VCI and is guaranteed by the principal stockholders of the
company.
Located in St. Charles, MO, VisionComm, Inc. is primarily engaged in
the telecommunications and private cable television business. VCI has a ten
year contract providing the right to install and operate private payphones in
all facilities controlled by Columbia/HCA HealthCare Corporation
("Columbia/HCA"). Columbia HCA is the nation's largest provider of health care
services. VCI also has a management contract with the right to buy contracts
for seven private cable installations and four cable franchises.
The Trust has also invested $1,000,000 in a convertible subordinated debenture
("debenture") issued by Soil Recovery Systems. The debenture is for a seven
year term with an annual interest rate of 15% with no prepayment penalty.
Interest only is due the first two years with equal principal payments due at
the end of years three through seven. The debenture can be converted at any
time to common stock which, if converted, would give the Trust 22.5% ownership
in SRS. Upon principal repayment the Trust may elect to convert the repayment
amount and receive stock or elect to receive the cash repayment. If the Trust
elects to receive the cash payment, the Trust will be issued warrants to
purchase common stock of SRS. A junior security interest in the assets of the
company and a personal guarantee by the Chairman, the major shareholder of SRS,
has been received by the Trust.
SRS provides bio-remediation and recycling of non-hazardous hydro-carbon
contaminated soils. The company's facilities are located throughout Southern
Texas and provide it with certain advantages, including freight savings and
access by truck, barge or rail. SRS has working relationships with regulatory
agencies, construction companies and environmental engineering firms.
Significant customers of SRS have included large oil companies, air force
bases, and state agencies.
The Trust continues to actively consider new investment opportunities. Since
inception, the Trust has received and considered approximately 200 written
business plans representing approximately $700 million in total potential
financings. The Trust has also received numerous other inquiries for
financing. As of June 30, 1996, the Trust had made total investments and
commitments of $3,180,000, as discussed herein. At June 30, 1996, the Trust
was actively investigating or had actually submitted term sheets regarding 5 to
6 new investment opportunities representing approximately $5 million in total
potential financings.
<PAGE> 11
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED).
LIQUIDITY AND CAPITAL RESOURCES
<TABLE>
<CAPTION>
February 10, 1995
Six Months Ended (date of inception)
June 30, 1996 to June 30, 1995
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Major Cash Source:
Proceeds from issuance of beneficial shares $1,820,000 $ 10,000
Major Cash Use:
Payments for syndication costs $ 257,135 $ -0-
Investments $3,180,000 $ -0-
- -----------------------------------------------------------------------------------------------
</TABLE>
Pending investment in Enhanced Yield Investments, the Trust invests funds not
invested in portfolio companies in a money market mutual fund. There was
$2,613,608 in money market investments as of June 30, 1996.
An underwriting return of $421,933 has been accrued as of June 30, 1996. The
Trust will continue to accrue the underwriting return based on 10% simple
annual interest computed on a daily basis from the initial closing (August 30,
1995) until the Final Closing. On July 3, 1996, the Trust made a distribution
of a portion of the investors underwriting return. This special distribution
amounted to $250,000 and was paid to investors of record as of June 30, 1996.
<PAGE> 12
Page 12
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.
BERTHEL GROWTH & INCOME TRUST I
-------------------------------
(Registrant)
Date 8-7-96 /s/ Ronald O. Brendengen
------------- ---------------------------------------------
Ronald O. Brendengen, Chief Financial Officer,
Treasurer
/s/ Daniel P. Wegmann
Date 8-7-96 ----------------------------------------------
------------- Daniel P. Wegmann, Controller
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
unaudited statements of assets and liabilities of Berthel Growth & Income Trust
I as of June 30, 1996, and the unaudited statement of operations of the trust
for the six months ended June 30, 1996, and is qualified in its entirety by
reference to such financial statements. </LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> APR-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 225,591
<SECURITIES> 2,613,608
<RECEIVABLES> 3,221,880
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 6,061,079
<PP&E> 3,667<F2>
<DEPRECIATION> 0
<TOTAL-ASSETS> 6,064,746
<CURRENT-LIABILITIES> 464,731
<BONDS> 0
<COMMON> 5,525,517
0
0
<OTHER-SE> 74,798<F3>
<TOTAL-LIABILITY-AND-EQUITY> 6,064,746
<SALES> 170,059
<TOTAL-REVENUES> 170,059
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 87,624
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 82,435
<INCOME-TAX> 0
<INCOME-CONTINUING> 82,435
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 82,435
<EPS-PRIMARY> 12.53<F1>
<EPS-DILUTED> 12.53
<FN>
<F1>Net Income per beneficial share is based on the weighted average of shares
outstanding which was 6,577 shares for the period ended June 30, 1996.
<F2>Organizational Costs - Net
<F3>Retained Earnings
</FN>
</TABLE>
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