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, 2004
-------------
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 033-89506
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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 Identification No.)
incorporation or organization)
701 Tama Street, Marion, Iowa 52302
-----------------------------------
(Address of principal executive offices) (Zip Code)
(319) 447-5700
--------------
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
------ --------
Indicate by check mark whether registrant is an accelerated filer (as defined in
Rule 12b-2 of the Securities Exchange Act of 1934).
Yes No X
------- ------
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 - 10,541 shares as of July 14, 2004
BERTHEL GROWTH & INCOME TRUST I
INDEX
Part I. FINANCIAL INFORMATION PAGE
- ----------------------------- ----
Item 1. Financial Statements (unaudited)
Consolidated Statements of Assets and Liabilities -
June 30, 2004 and December 31, 2003 3
Consolidated Statements of Operations -
three months ended June 30, 2004 and 2003 4
Consolidated Statements of Operations -
six months ended June 30, 2004 and 2003 5
Consolidated Statements of Changes in Net Liabilities -
six months ended June 30, 2004 and 2003 6
Consolidated Statements of Cash Flows -
six months ended June 30, 2004 and 2003 7
Notes to Consolidated Financial Statements 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 12
Item 3. Quantitative and Qualitative Disclosures About Market Risk 14
Item 4. Controls and Procedures 15
Part II. OTHER INFORMATION
- --------------------------
Item 6. Exhibits 15
Signatures 16
2
BERTHEL GROWTH & INCOME TRUST I
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)
June 30, 2004 December 31, 2003
------------- -----------------
ASSETS
Loans and investments (Note B) $ 9,030,361 $ 8,654,855
Cash and cash equivalents 250,421 248,286
Interest and dividends receivable 62,799 65,559
------------ ------------
TOTAL ASSETS $ 9,343,581 $ 8,968,700
============ ============
LIABILITIES AND NET ASSETS (LIABILITIES)
Accrued interest payable $ 32,836 $ 70,176
Accounts payable and other accrued expenses 43,319 66,319
Due to affiliate 267,277 87,717
Deferred income 3,333 5,833
Distributions payable to shareholders 5,245,583 4,825,099
Debentures (Note C) 7,655,130 7,709,172
------------ ------------
TOTAL LIABILITIES 13,247,478 12,764,316
------------ ------------
COMMITMENTS AND CONTINGENCIES
NET ASSETS (LIABILITIES), equivalent to ($387.10)
per share at June 30, 2004
and ($360.08) per share at December 31, 2003:
Shares of beneficial interest (25,000 shares authorized;
10,541 shares issued and outstanding) (319,813) 406,845
Accumulated net realized losses (5,221,040) (5,221,040)
Accumulated net unrealized gains 1,636,956 1,018,579
------------ ------------
TOTAL NET ASSETS (LIABILITIES) (3,903,897) (3,795,616)
------------ ------------
TOTAL LIABILITIES AND NET ASSETS (LIABILITIES) $ 9,343,581 $ 8,968,700
============ ============
See notes to consolidated financial statements.
3
BERTHEL GROWTH & INCOME TRUST I
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended
June 30, 2004 June 30, 2003
------------- -------------
REVENUES:
Interest income $ 69,338 $ 103,144
Dividend income 21,033 31,331
Application, closing, and other fees 1,250 2,028
--------- ---------
Total revenues 91,621 136,503
--------- ---------
EXPENSES:
Management fees 55,972 56,042
Administrative services 965 1,549
Trustee fees 6,000 6,000
Professional fees 37,582 21,473
Interest expense 143,659 199,401
Other general and administrative expenses 13,215 13,491
--------- ---------
Total expenses 257,393 297,956
--------- ---------
Net investment loss (165,772) (161,453)
Unrealized gain on investments 589,003 136,523
Realized gain on investments -0- 35,924
--------- ---------
Net increase in net assets $ 423,231 $ 10,994
========= =========
Per beneficial share amounts:
Net increase in net assets $ 40.15 $ 1.04
========= =========
Weighted average shares 10,541 10,541
========= =========
See notes to consolidated financial statements.
4
BERTHEL GROWTH & INCOME TRUST I
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Six Months Ended
June 30, 2004 June 30, 2003
------------- -------------
REVENUES:
Interest income $ 141,811 $ 223,862
Dividend income 41,604 94,197
Application, closing, and other fees 2,500 4,056
--------- ---------
Total revenues 185,915 322,115
--------- ---------
EXPENSES:
Management fees 111,570 114,076
Administrative services 2,153 7,949
Trustee fees 12,000 12,000
Professional fees 56,300 27,216
Interest expense 287,618 396,610
Other general and administrative expenses 22,448 218,939
--------- ---------
Total expenses 492,089 776,790
--------- ---------
Net investment loss (306,174) (454,675)
Unrealized gain on investments 618,377 147,892
Realized gain on investments -0- 35,924
--------- ---------
Net increase (decrease) in net assets $ 312,203 $(270,859)
========= =========
Per beneficial share amounts:
Net increase (decrease) in net assets $ 29.62 $ (25.70)
========= =========
Weighted average shares 10,541 10,541
========= =========
See notes to consolidated financial statements.
5
BERTHEL GROWTH & INCOME TRUST I
CONSOLIDATED STATEMENTS OF CHANGES IN NET LIABILITIES
(UNAUDITED)
Six Months Ended Six Months Ended
June 30, 2004 June 30, 2003
------------- -------------
Shares of Shares of
Beneficial Beneficial
Interest Amount Interest Amount
-------- ------ -------- ------
Net investment loss -- $ (306,174) -- $ (454,675)
Unrealized gain on investments -- 618,377 -- 147,892
Realized gain on investments -- -0- -- 35,924
Distributions payable to shareholders -- (420,484) -- (418,175)
Net liabilities at beginning of period 10,541 (3,795,616) 10,541 (4,254,797)
----------- ----------- ----------- -----------
Net liabilities at end of period 10,541 $(3,903,897) 10,541 $(4,943,831)
=========== =========== =========== ===========
See notes to consolidated financial statements.
6
BERTHEL GROWTH & INCOME TRUST I
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Six Months Ended
June 30, 2004 June 30, 2003
------------- -------------
OPERATING ACTIVITIES:
Net increase (decrease) in net assets $ 312,203 $ (270,859)
Adjustments to reconcile change in net assets
to net cash flows from operating activities:
Amortization -0- 194,987
Accretion of discount on debt securities (10,529) (19,084)
Unrealized gain on investments (618,377) (147,892)
Realized gain on investments -0- (35,924)
Changes in operating assets and liabilities
Loans and investments 253,400 1,071,432
Interest and dividends receivable 2,760 9,671
Other assets -0- (12,675)
Accrued interest payable (37,340) -0-
Accounts payable and other accrued expenses (23,000) (23,004)
Due to affiliate 179,560 (2,619)
Deferred income (2,500) (4,056)
----------- -----------
Net cash flows from operating activities 56,177 759,977
----------- -----------
FINANCING ACTIVITIES:
Payment of debentures (54,042) -0-
----------- -----------
Net cash flows from financing activities (54,042) -0-
----------- -----------
NET INCREASE IN CASH 2,135 759,977
CASH AT BEGINNING OF PERIOD 248,286 1,125,133
----------- -----------
CASH AT END OF PERIOD $ 250,421 $ 1,885,110
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest $ 324,958 $ 396,610
Noncash financing activities:
Distributions payable to shareholders 420,484 418,175
See notes to consolidated financial statements
7
BERTHEL GROWTH & INCOME TRUST I
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America
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 Trust's Form
10-K filed with the Securities and Exchange Commission for the year ended
December 31, 2003. 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, 2004 are not
necessarily indicative of the results that may be expected for the year ended
December 31, 2004.
The preparation of the Trust's financial statements in conformity with
accounting principles generally accepted in the United States of America
necessarily requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
The Trust continues to have a deficiency in net assets, as well as net losses
and negative cash flow from operations. In addition, Berthel SBIC, LLC ("SBIC"),
a wholly owned subsidiary of the Trust, was in violation of the maximum capital
impairment percentage permitted by the SBA. The SBIC received notice of default
from the Small Business Administration advising that the SBIC must cure its
default on the outstanding debentures prior to March 22, 2002. Since that time,
the capital impairment violation has not been cured.
In August 2002, the SBA notified the SBIC that all debentures, accrued interest
and fees were immediately due and payable. The SBIC was transferred into the
Liquidation Office of the SBA at that time. On September 1, 2003, management
signed a loan agreement with the SBA for $8,100,000 (after paying $1,400,000 on
the $9,500,000 debentures) with a term of 48 months at an interest rate of
7.49%. The Agreement requires principal payments on the debt to the extent the
SBIC receives cash proceeds exceeding $250,000 for the sale or liquidation of
investments. As of June 30, 2004, $7,655,130 is outstanding under the loan
agreement, which is secured by substantially all assets of the SBIC. The loan
agreement contains various covenants, including limits on the amounts of
expenses, other than interest expense, that can be incurred and paid. The loan
agreement also contains various events of default, including a decrease in the
aggregate value of the SBIC's assets of 10% or greater.
As of June 30, 2004, total assets and liabilities of the Trust are $9,343,581
and $13,247,478, respectively. These factors raise substantial doubt about the
ability of the Trust to continue as a going concern. No assurance can be given
that the Trust will have sufficient cash flow to repay the debt or that the
Trust will be financially viable.
8
NOTE B -LOANS AND INVESTMENTS
June 30, 2004 December 31, 2003
Cost Valuation Cost Valuation
---- --------- ---- ---------
Communications and Software:
EDmin.com, Inc.
- ---------------
238,962 and 228,562 shares of 9%,
Series A cumulative convertible preferred
stock as of June 30, 2004 and December 31, 2003,
respectively $ 883,848 $1,493,513 $ 842,248 $1,428,513
Warrants to purchase 20,000 shares of common stock
at $4.00 per share -- 45,000 -- 45,000
Media Sciences International, Inc.
- ----------------------------------
1,112,797 shares of common stock, and 30,000
(25,000 at December 31, 2003) options and 323,000
warrants to purchase shares of common stock at
various prices 1,012,777 1,589,074 1,012,777 994,098
---------- ----------
Total Communications and Software (34.6% and 28.5%
of total loans and investments as of June 30, 2004
and December 31, 2003, respectively) 3,127,587 2,467,611
---------- ----------
Healthcare Products and Services:
Physicians Total Care, Inc.
- ---------------------------
10% promissory note due September, 2004 and
warrants to purchase 350,000 shares of common
stock for at various prices 807,795 -- 807,795 --
700 shares of common stock 4,000 -- 4,000 --
Inter-Med, Inc.
- ---------------
2,491.3031 shares of common stock 672,279 672,279 672,279 672,279
12% promissory note due July, 2005-June, 2006 194,562 194,562 192,333 192,333
Futuremed Interventional, Inc.
- ------------------------------
Warrants to purchase 6% of the company
at $.01 per share 102,640 2,460,000 102,640 2,460,000
1,899,783 shares of common stock of IMED Devices, Inc.
(an affiliate of Futuremed Interventional, Inc.) -- 265,970 -- 265,970
--------- ---------
Total Healthcare Products and Services (39.8% and
41.5% of total loans and investments as of
June 30, 2004 and December 31, 2003, respectively) 3,592,811 3,590,582
---------- ----------
9
June 30, 2004 December 31, 2003
Cost Valuation Cost Valuation
---- --------- ---- ---------
Manufacturing:
Childs & Albert
- ---------------
12.5% promissory note due October, 2005 781,985 781,985 774,778 774,778
Warrants to purchase 833.334 shares of
common stock at $10 per share 72,065 72,065 72,065 72,065
Feed Management Systems, Inc. (formerly Easy Systems, Inc.)
- -----------------------------------------------------------
435,590 shares of common stock 1,077,422 304,913 1,077,422 304,913
The Schebler Company
- --------------------
13% promissory note due March, 2005 165,021 165,021 163,927 163,927
Warrants to purchase 1.66% of common stock at
$.01 per share 11,504 11,504 11,504 11,504
166,666 shares of 10% convertible cumulative
preferred stock 166,667 166,667 166,667 166,667
166,666 shares of common stock 166,667 166,667 166,667 166,667
---------- ----------
Total Manufacturing (18.5% and 19.2% of total
loans and investments as of June 30, 2004 and
December 31, 2003, respectively) 1,668,822 1,660,521
---------- ----------
Other Service Industries:
International Pacific Seafoods, Inc.
- ------------------------------------
12% subordinated note due June 2003 through June 2005 390,000 390,000 685,000 685,000
1,501 shares of common stock 1,141 1,141 1,141 1,141
Kinseth Hospitality Company, Inc.
- ---------------------------------
14% note due August, 2004 250,000 250,000 250,000 250,000
Pickerman's Development Company
- -------------------------------
12% promissory notes due April, 2005 through March, 2006 547,663 -- 547,663 --
12% promissory note due on demand 12,520 -- 12,520 --
Warrants to purchase 2,406,250 shares of common stock
at $0.01 per share 72,849 -- 72,849 --
---------- ----------
Total Other Service Industries (7.1% and 10.8% of
total loans and investments as of June 30, 2004
and December 31, 2003, respectively) 641,141 936,141
---------- ----------
TOTAL LOANS AND INVESTMENTS $9,030,361 $8,654,855
========== ==========
10
NOTE C - DEBENTURES
The SBIC issued debentures payable to the SBA totalling $9,500,000 since
inception. The original debenture terms required semiannual payments of interest
at annual interest rates ranging from 6.353% to 7.64%. In addition to interest
payments, the SBIC was required to pay an annual 1% SBA loan fee on the
outstanding debentures balance.
In August 2002, the SBA notified the SBIC that all debentures, accrued interest
and fees were immediately due and payable. The SBIC was transferred into the
Liquidation Office of the SBA at that time. On September 1, 2003, management
signed a loan agreement with the SBA for $8,100,000 (after paying $1,400,000 on
the $9,500,000 debentures) with a term of 48 months at an interest rate of
7.49%. The Agreement requires principal payments on the debt to the extent the
SBIC receives cash proceeds exceeding $250,000 for the sale or liquidation of
investments. As of June 30, 2004, $7,655,130 is outstanding under the loan
agreement, which is secured by substantially all assets of the SBIC. The loan
agreement contains various covenants, including limits on the amounts of
expenses, other than interest expense, that can be incurred and paid. The loan
agreement also contains various events of default, including a decrease in the
aggregate value of the SBIC's assets of 10% or greater.
11
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
---------------------------------------------------------------
Results of Operations
Net investment income (loss) reflects the Trust's revenues and expenses
excluding realized and unrealized gains and losses on portfolio investments.
Interest income consists of the following:
Three Months Ending June 30 Six Months Ending June 30
2004 2003 2004 2003
---- ---- ---- ----
Portfolio investments $ 68,591 $ 97,677 $ 140,337 $ 213,805
Money market 747 5,467 1,474 10,057
----------- ----------- ----------- -----------
Interest income $ 69,338 $ 103,144 $ 141,811 $ 223,862
=========== =========== =========== ===========
Dividend income $ 21,033 $ 31,331 $ 41,604 $ 94,197
=========== =========== =========== ===========
Changes in interest earned on portfolio investments reflect the level of
investment in interest earning debt securities and loans. Money market interest
reflects cash resources that are invested in highly liquid money market savings
funds, the level of which varies depending on uses of cash to purchase new
investments and finance operations and sources of cash from loan payoffs.
Dividend income reflects dividends earned on preferred stock investments.
Management fees, calculated as 2.5% of the combined temporary investment in
money market securities and loans and investments balances, were $111,570 for
the first six months of 2004 and $114,076 the same period a year ago. These fees
are currently accrued as payable to the Trust Advisor but are not paid, in
accordance with the loan agreement with the SBA.
Professional fees increased from $27,216 for the first six months of 2003 to
$56,300 for the same period of 2004. This increase is due primarily to the
accrual of fees, which have been paid by Berthel Fisher & Company Planning, Inc.
(Trust Advisor), for a recently hired independent investment banking firm to
assist in the process of liquidating the SBIC's portfolio, with the goal of
maximizing values through mergers, sales, etc. of the portfolio companies.
Other general and administrative expenses decreased from $218,939 for the first
six months of 2003 to $22,448 for the first six months of 2004. This decrease is
primarily the result of amortization expense of $194,987 in 2003 to write off
the remaining deferred financing costs.
The Trust continues to have a deficiency in net assets, as well as net
investment losses. In addition, the SBIC is in violation of the maximum capital
impairment percentage permitted by the SBA. In August, 2002, the SBA notified
the SBIC that all debentures, accrued interest and fees were immediately due and
payable. The SBIC was transferred into the Liquidation Office of the SBA at that
time. On September 1, 2003, management signed a loan agreement with the SBA for
$8,100,000 (after paying $1,400,000 on the $9,500,000 debentures) with a term of
48 months at an interest rate of 7.49%. The loan is secured by substantially all
assets of the SBIC. The loan agreement contains various covenants including
establishment of a reserve account in the amount of $250,000 with excess cash
paid to the SBA, limits on the amounts of expenses, other than interest expense,
that can be incurred and paid. The loan agreement also contains various events
of default, including a decrease in the aggregate value of the SBIC's assets of
10% or greater.
As of June 30, 2004, total assets and liabilities of the Trust are $9,343,581
and $13,247,478, respectively. These factors raise substantial doubt about the
ability of the Trust to continue as a going concern. No assurance can be given
that the Trust will have sufficient cash flow to repay the debt or that the
Trust will be financially viable.
12
The change in unrealized and realized gains and losses is summarized in the
following table:
Three Months Ending June 30 Six Months Ending June 30
2004 2003 2004 2003
---- ---- ---- ----
EDmin.com $ 11,832 $ 10,823 $ 23,401 $ 21,407
Hicklin Engineering, L.C. -0- 137,431 -0- 137,431
Media Sciences International 577,171 (11,731) 594,976 (10,946)
------------- ------------- ------------- -------------
Unrealized gain $ 589,003 $ 136,523 $ 618,377 $ 147,892
============= ============= ============= =============
Futuremed Interventional $ -0- $ 35,924 $ -0- $ 35,924
------------- ------------- ------------- -------------
Realized gain $ -0- $ 35,924 $ -0- $ 35,924
============= ============= ============= =============
The change in the unrealized gains and losses are the result of carrying the
Trust's portfolio of loans and investments at fair value. The fair value of the
loans and investments are approved by the Independent Trustees, and in the case
of the SBIC, are in accordance with SBA regulations. The Trust recognizes
realized gains and losses when investments have been either sold or written off
as deemed to be worthless. Securities that are traded publicly are valued at the
market price less any appropriate discount for reasons of liquidity or
restrictions.
During the second quarter of 2004, management decreased the liquidity discount
taken on Media Sciences International. Management decreased this discount from
20% to 10% due to the fact that the shares owned by the SBIC were included in a
registration statement filed by Media Sciences.
Liquidity and Capital Resources
The Trust continues to have a deficiency in net assets, as well as net
investment losses. In addition, the SBIC is in violation of the maximum capital
impairment percentage permitted by the SBA. In August, 2002, the SBA notified
the SBIC that all debentures, accrued interest and fees were immediately due and
payable. The SBIC was transferred into the Liquidation Office of the SBA at that
time. On September 1, 2003, management signed a loan agreement with the SBA for
$8,100,000 (after paying $1,400,000 on the $9,500,000 debentures) with a term of
48 months at an interest rate of 7.49%. The loan is secured by substantially all
assets of the SBIC. The loan agreement contains various covenants including
establishment of a reserve account in the amount of $250,000 with excess cash
paid to the SBA, limits on the amounts of expenses, other than interest expense,
that can be incurred and paid. The loan agreement also contains various events
of default, including a decrease in the aggregate value of the SBIC's assets of
10% or greater.
The loan agreement with the SBA is due as follows:
Maturity Date Amount
------------- ------
2007 $7,655,130
As of June 30, 2004, total assets and liabilities of the Trust are $9,343,581
and $13,247,478, respectively. These factors raise substantial doubt about the
ability of the Trust to continue as a going concern. No assurance can be given
that the Trust will have sufficient cash flow to repay the debt or that the
Trust will be financially viable.
The effect of interest rate fluctuations and inflation on the current Trust
investments is negligible.
13
Item 3. Quantitative and Qualitative Disclosures About Market Risk
----------------------------------------------------------
The Trust's investment objective is to achieve capital appreciation in the value
of its net assets and to achieve current income principally by making
investments through private placements in securities of small and medium sized
privately and publicly owned companies. Securities consist of subordinated debt,
preferred stock, or common stock combined with equity participation in common
stock or rights to acquire common stock. Investments are not held for trading
purposes.
The primary risk of the portfolio is derived from the underlying ability of
investee companies to satisfy debt obligations and their ability to maintain or
improve common equity values. Levels of interest rates are not expected to
impact the Trust's valuations, but could impact the capability of investee
companies to repay debt or create and maintain shareholder value.
As of June 30, 2004, the portfolio is valued at fair value, as determined by the
Independent Trustees ("Trustees"). In determining fair value, investments are
initially stated at cost until significant subsequent events and operating
trends require a change in valuation. Among the factors considered by the
Trustees in determining fair value of investments are the cost of the
investment, terms and liquidity of warrants, developments since the acquisition
of the investment, the sales price of recently issued securities, the financial
condition and operating results of the issuer, earnings trends and consistency
of operating cash flows, the long-term business potential of the issuer, the
quoted market price of securities with similar quality and yield that are
publicly traded, and other factors generally pertinent to the valuation of
investments. The Trustees relied on financial data of the portfolio companies
provided by the management of the portfolio companies. The Trust Advisor
maintains ongoing contact with management of the portfolio companies including
participation on their Boards of Directors and review of financial information.
There is no assurance that any investment made by the Trust will be repaid or
re-marketed. Accordingly, there is a risk of total loss of any investment made
by the Trust. At June 30, 2004, the amount at risk was $9,030,361 and consisted
of the following:
Cost Valuation
---- ---------
Debt securities and loans $ 3,149,546 $ 1,781,568
Preferred stocks 1,050,515 1,705,180
Common stocks 2,934,286 3,000,044
Warrants and options to purchase
common stock 259,058 2,543,569
------------- -------------
Total loans and investments $ 7,393,405 $ 9,030,361
============= =============
On September 1, 2003, the SBIC signed a loan agreement with the SBA. As interest
rates have not changed substantially since that time, the carrying value
approximates the fair value of the loan to the SBA.
14
Item 4. Controls and Procedures
------------------------
Evaluation of Disclosure Controls and Procedures
An evaluation was performed under the supervision and with the participation of
the Trust's management, including the Chief Executive Officer (CEO) and Chief
Financial Officer (CFO), of the effectiveness of our disclosure controls and
procedures. Based on that evaluation, the CEO and CFO concluded that as of the
end of the period covered by this report, our disclosure controls and procedures
are effective to provide reasonable assurance that information required to be
disclosed by us in reports that we file or submit under the Securities Exchange
of 1934 is recorded, processed, summarized, and timely reported as provided in
the SEC's rules and forms.
Changes in Internal Controls
No changes occurred since the quarter ended March 31, 2004 in our internal
controls over financial reporting that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.
PART II
OTHER INFORMATION
Item 6. Exhibits
Exhibit 31.1 Certification of Chief Executive Officer
Exhibit 31.2 Certification of Chief Financial Officer
Exhibit 32.1 Certification of Chief Executive Officer Pursuant to
18 U.S.C. Section 1350
Exhibit 32.2 Certification of Chief Financial Officer Pursuant to
18 U.S.C. Section 1350
15
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: August 3, 2004 /s/ Ronald O. Brendengen
-------------- ----------------------------------------------
Ronald O. Brendengen, Chief Financial Officer,
Treasurer
Date: August 3, 2004 /s/ Daniel P. Wegmann
-------------- ----------------------------------------------
Daniel P. Wegmann, Controller
Date: August 3, 2004 /s/ Henry Royer
-------------- ----------------------------------------------
Henry Royer, Executive Vice President
16