UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For quarterly period ended June 30, 2001
[ ] TRANSITION REPORT PURSUANT TO SECTION 12 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 of (I.R.S. Employer I.D. No.)
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 _____
4,361,618 shares of common stock were outstanding at August 15, 2001.
The Registrant's Registration Statement on Form N-2 was declared effective by
the Securities and Exchange Commission on May 6, 1994.
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
RENAISSANCE CAPITAL GROWTH & INCOME FUND III, INC.
Statement of Assets and Liabilities
(Unaudited)
Assets
December 31, 2000 June 30, 2001
Cash and cash equivalents $ 18,206,540 $ 21,564,187
Investments at fair value, cost of
$39,985,786 and $35,318,588 45,367,138 46,176,697
Accounts receivable 464,110 246,040
Due from brokers -0- 1,777,599
Other assets 39,812 26,944
------------ ------------
$ 64,077,600 $ 69,791,467
============ ============
Liabilities and Net Assets
Liabilities:
Securities sold under agreements
to repurchase $ 16,482,024 $ 14,907,749
Accounts payable 14,082 25,975
Incentive fee and administrative
fee due to Investment Adv. 235,427 1,252,840
------------ ------------
16,731,533 16,186,564
------------ ------------
Net Assets:
Common stock, $1 par value;
20,000,000 shares authorized;
4,561,618 issued, and 4,361,618
outstanding 4,561,618 4,561,618
Additional paid-in capital 38,799,907 38,799,907
Treasury stock at cost, 200,000 shares
at December 31, 2000, and at
June 30, 2001 ( 1,665,220) ( 1,665,220)
Undistributed net investment income 5,649,762 11,908,598
---------- ----------
Net assets 47,346,067 53,604,903
---------- ----------
$64,077,600 $69,791,467
=========== ===========
Net asset value per share $ 10.86 $ 12.29
=========== ===========
See accompanying notes to financial statements.
RENAISSANCE CAPITAL GROWTH & INCOME FUND III, INC.
Statement of Operations
(Unaudited)
Three Months Ended June 30,
2000 2001
Investment Income:
Interest $ 393,628 $ 19,829
Dividends 31,213 32,063
Other investment income 8,625 ( 1,820)
----------- -----------
Total investment income 433,466 50,072
=========== ===========
Expenses:
Bank charges 9,446 6,679
Directors' fees 19,000 15,750
Incentive fees -0- 911,857
Legal and professional 53,016 71,015
Management fees 242,467 239,559
Franchise Taxes 25,763 32,011
Other 76,539 92,442
---------- ----------
Total expenses 426,231 1,369,313
---------- ---------
Net investment income (loss) 7,235 ( 1,319,241)
Realized gain on investments -0- 4,559,287
Unrealized gain (loss) on investments ( 18,679,683) 2,619,010
------------- -----------
Net increase (decrease) in net assets
resulting from operations $( 18,672,488) $ 5,859,056
============= ===========
See accompanying notes to financial statements.
RENAISSANCE CAPITAL GROWTH & INCOME FUND III, INC.
Statement of Operations
(Unaudited)
Six Months Ended June 30,
2000 2001
Investment Income:
Interest $ 759,158 $ 314,565
Dividends 61,087 55,392
Other investment income 84,875 4,600
----------- ----------
Total investment income 905,120 374,557
----------- ----------
Expenses:
Bank charges 18,180 12,128
Directors' fees 33,000 31,500
Incentive fees 1,611,135 911,857
Legal and professional 116,909 112,052
Management fees 589,973 449,365
Franchise Taxes 24,884 32,011
Other 126,833 135,179
---------- ----------
Total expenses 2,520,914 1,684,092
---------- ----------
Net investment income (loss) (1,615,794) (1,309,535)
Realized gain on investments 8,055,675 2,091,629
Unrealized gain (loss) on investments 6,424,738 5,476,742
---------- ----------
Net increase (decrease) in net assets
resulting from operations $ 12,864,619 $ 6,258,836
============ ===========
See accompanying notes to financial statements.
RENAISSANCE CAPITAL GROWTH & INCOME FUND III, INC.
Statements of Changes in Net Assets
(Unaudited)
Three Months Ended June 30,
2000 2001
Increase (decrease) in net assets
resulting from operations:
Investment income - net $ 7,235 $(1,319,241)
Realized gain on investment -0- 4,559,287
Unrealized gain (loss) on investments (18,679,683) 2,619,010
----------- -----------
Net increase (decrease in net assets
resulting from operations (18,672,448) 5,859,056
Distributions to shareholders ( 6,380,130) -0-
Proceeds from shares issued 2,759,688 -0-
------------ -----------
Total increase (decrease) (22,292,890) 5,859,056
Net assets:
Beginning of period 77,471,373 47,745,847
End of period $ 55,178,483 $ 53,604,903
Six Months Ended June 30,
2000 2001
Increase (decrease) in net assets
resulting from operations:
Investment income - net $(1,615,794) $( 1,309,535)
Realized gain on investment 8,055,675 2,091,629
Unrealized gain (loss) on investments 6,424,738 5,476,742
----------- -----------
Net increase (decrease in net assets
resulting from operations 12,864,619 6,258,836
Distributions to shareholders ( 6,380,130) -0-
Cost of shares repurchased 2,759,688 -0-
------------ -----------
Total increase (decrease) 9,244,177 6,258,836
Net assets:
Beginning of period 45,934,306 47,346,067
---------- ----------
End of period $55,178,483 $ 53,604,903
See accompanying notes to financial statements.
RENAISSANCE CAPITAL GROWTH & INCOME FUND III, INC.
Notes to Financial Statements
June 30, 2001
1. Organization and Business Purpose
Renaissance Capital Growth & Income Fund III, Inc. (the "Fund"), a Texas
corporation formed in 1994, is a non-diversified closed-end investment
company and has elected to be treated as a business development company
("BDC") under the Investment Company Act of 1940, as amended ("1940 Act").
The Fund seeks to achieve current income and capital appreciation by
investing primarily in unregistered convertible securities of emerging
growth size companies.
2. Significant Accounting Policies
A. Federal Income Taxes - The Fund has elected the special income tax
treatment available to a regulated investment company ("RIC") 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. If a RIC meets certain
diversification and distribution requirements under the Code, it qualifies
for pass-through tax treatment. The Fund would cease to qualify for
pass-through tax treatment if it were unable to comply with these
requirements. Failure to qualify as a RIC would subject the Fund to federal
income tax as if the Fund were an ordinary corporation, which could result
in a substantial reduction in both the Fund's net assets and the amount of
income available for distribution to shareholders.
B. Distributions to Shareholders - Dividends paid to shareholders are
recorded on the ex- dividend date. The Fund announced a dividend of $0.54
per share on July 16, 2001. The ex- dividend date was July 20, 2001, and
the dividend will be payable August 16, 2001, to shareholders of record
July 24, 2001. With this dividend, the Fund has paid shareholders a total
of $7.56 per share in cash distributions since inception.
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 Financials 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
from the carrying value of those financial instruments. When the fair value
reasonably approximates the carrying value, no additional disclosure is
made.
RENAISSANCE CAPITAL GROWTH & INCOME FUND III, INC.
Notes to Financial Statements
June 30, 2001
3. Investment Advisory Agreement
The Investment Adviser for the Fund, Renaissance Capital Group, Inc.
("RCG"), is registered as an investment adviser under the Investment
Advisers Act of 1940, as amended. 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
Fund accrued a liability of $239,559 for such operational management fees
performed during the quarter ended June 30, 2001.
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
depreciation of the Fund. This management incentive fee is calculated on a
quarterly basis. For the three-month period ended June 30, 2001, the
Investment Adviser earned incentive fees of $911,857.
Finally, the Investment Adviser is reimbursed for administrative expenses
paid by the Investment Adviser on behalf of the Fund. The Fund accrued a
liability of $60,656 for these reimbursable administrative expenses in the
quarter ended June 30, 2001, which accrual is included in general and
administrative expenses in the accompanying statement of operations.
4. Capital Share Transactions
As of June 30, 2001, there were 20,000,000 shares of $1 par value capital
stock authorized, 4,561,617 shares issued, 4,361,617 shares outstanding,
and additional paid-in capital aggregating $41,696,306.
Year-to-date transactions in capital stock are as follows:
Shares Amount
Balance December 31, 2000 4,361,617 $41,696,306
Shares repurchased - -
--------- ----------
Balance June 30, 2001 4,361,617 $41,696,306
========= ===========
5. Temporary Investments
At June 30, 2001, temporary investments were held in a money market fund
made up of U.S. Treasury obligations and a U.S. Treasury bill. These
investments qualify for investment as permitted in Section 55(a)(1) of the
1940 Act.
RENAISSANCE CAPITAL GROWTH & INCOME FUND III, INC.
Notes to Financial Statements
June 30, 2001
6. Functions and Activities of Business Development Companies
Pursuant to Section 55(a) of the 1940 Act, a BDC is required to have at
least 70% of the value of its total assets invested in 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 (6) of the 1940 Act. In the event a BDC has less than 70% of its
assets in eligible or other qualified portfolio investments, then it will
be prohibited from making non-eligible investments until such time as the
percentage of eligible or other qualified investments again exceeds the 70%
threshold. At June 30, 2001, the Fund had more than 70% of its assets in
eligible and other qualified portfolio investments.
7. Investments
The Fund's investments are carried in the statements of assets and
liabilities as of June 30, 2001, at fair value as determined 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 the discretion of the Fund at a set
conversion price. The common stock underlying these securities is generally
unregistered and thinly to moderately traded. In certain instances, the
Fund has registration rights. In addition, the Fund may sell restricted
securities pursuant to Rule 144 of the Securities Act of 1933.
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.
INVESTMENT VALUATION SUMMARY
CONVERSION
COST OR FACE FAIR
VALUE VALUE
Active Link Communications, Inc.
8% Subordinated Convertible
Promissory Notes $ 375,000 $ 375,000 $ 375,000
Bentley Pharmaceuticals, Inc.
Common Stock 1,947,140 5,457,339 5,402,766
RENAISSANCE CAPITAL GROWTH & INCOME FUND III, INC.
Notes to Financial Statements
June 30, 2001
CONVERSION
COST OR FACE FAIR
VALUE VALUE
CaminoSoft Corp.
Common Stock 4,625,000 2,970,000 2,857,300
CareerEngine Network, Inc.
12% Convertible Debenture 250,000 250,000 250,000
Dexterity Surgical, Inc.
9% Convertible Debenture 1,412,220 1,412,220 1,412,220
8% Convertible Preferred Stock 1,000,000 146,154 146,154
Common Stock 635,000 49,400 -0-
Display Technologies, Inc.
8.75% Convertible Debenture 1,750,000 1,750,000 1,750,000
5.25% Convertible Preferred Stock 500,000 31,500 31,500
Common Stock 1,049,741 27,973 27,693
The Dwyer Group, Inc.
Common Stock 1,966,632 1,687,500 1,670,625
eOriginal, Inc.
5% Convertible Preferred Stock 4,000,030 8,997,250 8,577,418
Senior Secured Promissory Note 500,000 500,000 500,000
Fortune Natural Resources Corp.
Common Stock 545,500 912,452 903,327
Grand Adventures Tour & Travel
Publishing Corp.
10% Convertible Debenture 350,000 350,000 350,000
8% Convertible Debenture 1,000,000 1,000,000 1,000,000
Common Stock 130,089 13,650 13,513
Integrated Security Systems, Inc.
Series D Preferred 150,000 150,000 -0-
Series F Convertible Preferred 517,989 906,481 852,092
Series G Convertible Preferred 3,591,951 6,285,914 5,709,952
Common Stock 215,899 215,899 -0-
JAKKS Pacific, Inc.
Common Stock 521,172 1,633,389 1,617,055
RENAISSANCE CAPITAL GROWTH & INCOME FUND III, INC.
Notes to Financial Statements
June 30, 2001
CONVERSION
COST OR FACE FAIR
VALUE VALUE
Laserscope
8% Convertible Debenture 1,500,000 2,040,000 1,867,600
Medical Action Industries, Inc.
Common Stock 555,392 1,331,200 1,317,888
Northwest Steel & Wire Corp.
Bonds 127,500 127,500 127,500
Play by Play Toys & Novelties, Inc.
8% Convertible Debenture 2,425,748 2,425,748 1,925,748
Poore Brothers, Inc.
Common Stock 1,963,170 6,161,029 5,741,367
RailAmerica, Inc.
6% Convertible Debenture 500,000 500,000 500,000
Simtek Corporation
Common Stock 195,000 535,000 452,900
ThermoView Industries, Inc.
Common Stock 500,000 -0- -0-
Verso Technologies, Inc.
Common Stock 512,500 152,469 93,321
Miscellaneous Securities 5,915 805,492 703,758
----------- ----------- -----------
Total $35,318,588 $49,200,559 $46,176,697
=========== =========== ===========
RENAISSANCE CAPITAL GROWTH & INCOME FUND III, INC.
Notes to Financial Statements
June 30, 2001
Pursuant to procedures established by the Investment Adviser, the fair value of
each investment is based upon its cost to the Fund. Costs are 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 would be
required to liquidate the position, 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 an over-the-counter security
has no closing price, then the security is valued 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.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Material Changes in Portfolio Investments
The following portfolio transactions are noted for the quarter ended June
30, 2001 (portfolio companies are herein referred to as the "Company"):
Dexterity Surgical, Inc. (DEXT) In the quarter ended June 30, 2001,
the Company made principal repayments on the Fund's convertible debentures
of $28,674, reducing the outstanding principal balance on the debentures to
$1,412,220.
Renaissance US Growth & Income Trust PLC ("RUSGIT") also received
$28,674 in principal repayments on its debentures in the second quarter,
reducing the outstanding balance on the RUSGIT debentures to $1,412,220.
eOriginal, Inc. (Private) In the second quarter of 2001, the Fund
advanced $500,000 to the Company in exchange for Senior Secured Promissory
Notes bearing interest at 12%, payable at maturity on June 30, 2002, and
are secured by all intellectual property and software owned by the company.
RUSGIT declined to participate in the follow-on investment into
eOriginal. BFS US Special Opportunities Trust PLC ("BFS"), a fund that RCG
sub-advises, also invested $500,000 to purchase the Senior Secured
Promissory Notes of the Company. The investment by BFS was made under the
same terms and conditions as the Fund's investment.
Integrated Security Systems, Inc. (IZZI) In April 2001, the Fund
advanced the Company $150,000 pursuant to an 8% convertible promissory
note, convertible into the Company's common shares at a rate of $0.20 per
share. On May 10, 2001, the Company held its annual meeting of shareholders
who approved a recapitalization of the Company. Pursuant to the
recapitalization, the Fund exchanged all of its debt instruments together
with accrued and unpaid interest owed on that debt for two different
classes of preferred stock of the Company. The Fund exchanged principal and
interest in the amount of $3,441,951 for 137,678 shares of Series G
Cumulative Convertible Preferred Stock having a liquidation preference of
$25 per share and convertible into shares of the Company's common stock at
a rate of $0.20 per share. Additionally, the Fund exchanged principal and
interest equaling $517,989 for 20,720 shares of Series Cumulative
Convertible Preferred Stock having a liquidation preference of $25 per
share and convertible into shares of the Company's common stock at a rate
of $0.20 per share. Both the Series F and the Series G Preferred Stock
accrue cumulative dividends payable annually in cash at the rate of $1.25
per share per year, with the first payment coming due on March 31, 2003.
Both series of Preferred stock are also entitled to voting rights as a
single class on all matters on which stockholders are entitled to vote, and
additionally are entitled to elect two directors to the Company's Board of
Directors. The Series F Preferred is not redeemable, but the Series G
Preferred is required to be redeemed upon the earlier of the sale of the
Company's wholly-owned subsidiary, B&B Eltromatic, Inc. (to the extent of
the net proceeds to the Company from such sale) or two years after
issuance. In the event B&B is not sold prior to the two-year period, then
the redemption will occur in installments, with a redemption schedule of $1
million in the third year, $2 million in the fourth year, and the balance
in quarterly installments beginning in the fifth year. The redemption price
for the Series G Preferred is $25 per share plus accrued and unpaid
dividends.
RUSGIT also exchanged all its debt instruments together with accrued
and unpaid interest owed on that debt for Series F and Series G Preferred
Stock of the Company. The terms of the exchange, as well as the terms of
the preferred stock held by RUSGIT, are identical to that of the Fund.
JAKKS Pacific, Inc. (JAKK) In the second quarter of 2001, the Fund
sold 450,000 shares of the Company's common stock realizing proceeds of
$7,520,576 representing a gain of $4,909,287. After the sales, the Fund
still owns 87,347 shares of common stock having a basis of $521,172.
RUSGIT also sold shares of the Company's common stock during the
second quarter. In total, RUSGIT sold 100,000 shares of the Company's
common stock realizing proceeds of $1,680,648 representing a gain of
$1,297,314.
Northwestern Steel and Wire Corp. (Bankruptcy) In the second quarter
of 2001, the Fund purchased unsecured bonds of the company in a market
transaction. In total, the Fund obtained $3 million in unsecured
obligations of the Company for $127,500. The bonds are not paying interest
as the Company is in bankruptcy.
SiVault, Inc. In the second quarter of 2001, the Fund wrote off its
entire investment in the Company as it is no longer operating. The total
amount written off represented the Fund's entire $350,000 investment in the
Company.
RUSGIT also wrote off its entire investment in SiVault, Inc., in the
second quarter of 2001.
Pending investment in portfolio investments, funds are invested in
temporary cash accounts and in government securities. Government securities
used as cash equivalents will typically consist of U. S. Treasury
securities or other 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.
Results of Operations for the Quarter Ended June 30, 2001
For the quarter ended June 30, 2001, the Fund had a net investment
loss of $1,319,241, compared to net investment income of $7,235 for the
three months ended June 30, 2000. The loss for the period was a result of
lower investment income from interest on debt instruments and from
incentive fees taken in the quarter on realized gains of the Fund's
portfolio. Interest income declined from $393,628 in the second quarter of
2000 to $19,829 in the second quarter of 2001. Interest income has
decreased due to the conversion of debt instruments into equity and from
additional reserves being taken on certain instruments in the portfolio.
Expenses rose 220% over the comparable quarter of 2000 due to incentive
fees accrued from realized gains being taken on portfolio positions.
Without the incentive fee, total expenses rose 7.3% versus the comparable
period of 2000 driven primarily by increases in legal and professional
fees, taxes, and other expenses, and slightly offset by a decline in
management fees for the quarter based upon lower values for the assets held
in the portfolio.
For the three months ended June 30, 2001, the Fund realized net gains
of $4,559,287 from the sale of a portion of its JAKKS Pacific common stock,
offset by its realized loss of $350,000 on the write off of SiVault, Inc.
The Fund did not realize any gains on investments for the three months
ended June 30, 2000. For the three months ended June 30, 2001, the Fund had
unrealized gains on its investment portfolio in the amount of $2,619,010
versus an unrealized loss on investments of $18,679,683 in the second
quarter of 2000, and net assets increased $5,859,056 in the current period
versus a decrease in net assets of $18,672,488 for the comparable period a
year ago.
For the six months ended June 30, 2001, total investment income
declined 59 % from $905,120 in the six months ended June 30, 2000, to
$374,557 for the six month period ended June 30, 2001. The reduction in
total investment income is primarily a result of lower interest and
dividend income on portfolio investments due to a combination of
conversions of debt instruments into equity and as a result of impairments
on certain instruments held in the portfolio.
For the six months ended June 30, 2001, the Fund realized net
investment loss of $1,309,535 versus a net investment loss of $1,615,794 in
the comparable period of 2000. The reduction in net investment loss was a
result of lower incentive fees on realized gains taken by the portfolio
together with lower management fees as a result of lower valuations for
portfolio assets. In the first six months of 2001, the Fund had realized
gains on investments of $2,091,629, which is a result of the Fund's sale of
shares of JAKKS Pacific common stock, net of realized losses taken in the
first six months on investments in Voice It Worldwide, Inc., and SiVault,
Inc. This net realized gain on investments compares to an $8,055,675
realized gain for the comparable period of 2000. In addition, for the first
six months of 2001, the Fund had an unrealized gain on investments in the
amount of $5,476,742, a 14.8% decrease from the comparable period of a year
ago when the Fund's unrealized gain on investments totaled $6,424,738. The
total net increase in net assets for the first six months of 2001 for the
Fund is $6,258,836, a 51% reduction in comparison to the first six months
of 2000 when the increase in net assets totaled $12,864,619.
PART II
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 Fund
has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
RENAISSANCE CAPITAL GROWTH & INCOME FUND III, INC.
August 14, 2001 __/S/___________________________________________________
Russell Cleveland, Chairman and President
(Principal Executive Officer)
August 14, 2001 ___/S/__________________________________________________
Barbe Butschek, Chief Financial Officer
(Principal Financial Officer)