<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1996
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to
Commission file number 0-1244
THE ROCKIES FUND, INC.
------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Nevada 84-0928022
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4465 Northpark Drive, Colorado Springs, Colorado 80907
- ------------------------------------------------ ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (719) 590-4900
--------------
N/A
- --------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [ X ] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:
Indicate by check mark whether the Registrant has filed all documents and
reports requested to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of September 30, 1996, the Company had 640,256 shares of its $.01 par value
common stock outstanding. <PAGE>
<PAGE>
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Statement of Assets and Liabilities at September 30, 1996
(unaudited) and December 31, 1995 (audited)
Schedule of Investments and Restricted Securities (unaudited)
Statement of Operations for the Three Months Ended September
30, 1996 and September 30, 1995 (unaudited)
Statement of Operations for the Nine Months Ended September 30,
1996 and September 30, 1995 (unaudited)
Statements of Stockholders' Equity for the Nine Months Ended
September 30, 1996 (unaudited), and Years Ended December 31,
1995 and 1994 (audited)
Statement of Changes in Net Assets as of September 30, 1996 and
September 30, 1995 (unaudited)
Notes to Unaudited Financial Statements
Item 2. Management's Discussion and Analysis of Financial
Conditions and Results of Operations
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
<PAGE>
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The accompanying Statements of Assets and Liabilities as of
September 30, 1996; Schedule of Investments as of September 30, 1996; Statement
of Operations for the three month period ended September 30, 1996 and September
30, 1995; Statement of Operations for the nine month period ended September 30,
1996 and 1995; Statements of Stockholders' Equity for nine months ended
September 30, 1996; and Statement of Changes in Net Assets for the nine month
period ended September 30, 1996 and September 30, 1995 are unaudited but
reflect all adjustments which are, in the opinion of management, necessary to a
fair statement of the financial position and results of operations for the
interim period presented.
<PAGE>
<PAGE>
<TABLE>
THE ROCKIES FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1996 AND DECEMBER 31, 1995
<CAPTION>
September 30, December 31,
1996 1995
(unaudited) (audited)
------------- ------------
<S> <C> <C>
ASSETS
Investments in restricted and unrestricted
securities, at fair value (See accompanying
schedule): $ 1,852,518 $ 1,400,374
Cash:
Cash & cash equivalents 459,940 1,193
Accrued interest receivable 3,789 2,130
Prepaid expenses and other assets 56,175 6,654
Accounts receivable from investees 41,494 61,518
Notes Receivable 170,000 -0-
------------ ------------
Total Current Assets 2,583,916 1,471,869
------------ ------------
Property & Equipment:
Land 102,775 102,775
Building 633,497 558,959
Leasehold improvements 86,614 83,200
Equipment 1,484 1,484
Furniture and fixtures 12,461 13,461
------------ ------------
Less Accumulated Depreciation (64,552) (44,961)
Property & Equipment - Net 772,279 714,918
------------ ------------
TOTAL ASSETS $ 3,356,195 $ 2,186,787
=========== ===========
(Continued)
</TABLE>
<PAGE>
<PAGE>
<TABLE>
THE ROCKIES FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1996 AND DECEMBER 31, 1995
(Continued)
<CAPTION>
September 30, December 31,
1996 1995
(unaudited) (audited)
------------ ------------
<S> <C> <C>
CURRENT LIABILITIES
Cash overdraft -0- 8,653
Accounts payable 45,054 55,994
Accrued interest payable 3,990 19,588
Other accrued liabilities 49,500 39,697
Notes payable
Related parties 24,125 71,278
Other 31,724 120,349
------------ ------------
55,849 191,627
Current portion of long-term debt 42,237 39,785
Borrowings under line of credit 174,500 103,086
------------ ------------
Total Current Liabilities 371,130 458,430
Long-term debt, less current portion: 319,840 351,831
Other Liabilities
Security deposits 8,987 6,462
Other liabilities 55,000 62,500
Total Liabilities 754,957 879,223
------------ ------------
NET ASSETS and STOCKHOLDER'S EQUITY 2,601,239 1,307,564
(Equivalent to $4.06 per share at September 30, ========= =========
1996 and $2.04 per share at Dec. 31, 1995)
COMPONENTS OF NET ASSETS:
Common Stock, $.01 par value, Authorized
5,000,000 shares; 640,256 issued and
outstanding on Dec. 31, 1995 and
September, 1996: 6,403 6,403
Additional paid-in capital 2,901,243 2,901,243
Accumulated appreciation (deficit):
Accumulated net investment loss (1,785,195) (1,464,614)
Accumulated net realized gain (losses) from
sales and permanent write-downs of securities 1,725,172 (212,485)
Unrealized net (depreciation)/appreciation of
investments (246,384) 77,017
------------ ------------
TOTAL ACCUMULATED APPRECIATION (DEFICIT): 1,478,788 (1,600,082)
------------ ------------
NET ASSETS $ 2,601,239 $ 1,307,564
=========== ===========
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
THE ROCKIES FUND, INC.
Schedules of Investments
September 30, 1996 and June 30, 1996
- --------------------------------------------------------------------------------------------------------------
FAIR FAIR
INITIAL ** COST AT VALUE AT VALUE AT
INVESTMENT SEPTEMBER 30, SEPTEMBER 30, JUNE 30,
COMPANY POSITION DATE 1996 1996 1996
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Restricted Securities:
American Educational
Prod.**** 40,000 common stock Aug-96 37,114.85 40,000.00 -
200,000 common stock Sep-96 200,000.00 200,000.00 -
200,000 warrants Sep-96 0.00 0.00 -
------------ ------------ ------------
237,114.85 240,000.00 0.00
Bear Star, LLC* 5% partnership interest Nov-94 0.00 0.00 30,000.00
BMPI Liquidating Trust 166,680 common stock Mar-85 57,782.00 19,514.89 19,514.89
333,360 common stock Nov-85 115,563.00 38,905.78 38,905.78
------------ ------------ ------------
173,345.00 58,420.67 58,420.67
Capital 2000, Inc. 20,000 common stock Feb-93 5,000.00 10,000.00 5,000.00
6,000 common stock Feb-95 1,500.00 3,000.00 1,500.00
24,000 common stock Apr-95 6,000.00 12,000.00 6,000.00
------------ ------------ ------------
12,500.00 25,000.00 12,500.00
Colorado Venture 5,000 units of a Mar-84 0.00 10,000.00 10,000.00
Management Equity limited partnership
Fund I, Ltd.
Cova Technologies 917 common stock Jul-96 20,035.00 20,035.00 -
Global Casinos, Inc.* 38,000 common stock Nov-93 76,000.00 17,860.00 28,500.00
43,309 common stock Jan-94 50,068.21 20,355.23 32,481.75
17,241 common stock Jan-94 19,931.79 8,103.27 12,930.75
12,500 common stock Feb-94 25,000.00 5,875.00 9,375.00
750 common stock Mar-94 0.00 352.50 562.50
5,000 common stock Oct-94 10,000.00 2,350.00 3,750.00
50,000 common stock Feb-96 17,207.50 23,500.00 37,500.00
10,000 common stock Mar-96 3,125.00 4,700.00 7,500.00
17,500 warrants Nov-93 0.00 0.00 0.00
------------ ------------ ------------
201,332.50 83,096.00 132,600.00
Newport Firstfax, Ltd. 3.55% limited part- May-85 - - 20,000.00
nership interest
Optimax Industries, 135,191 common stock Jun-94 162,229.20 282,549.19 244,966.09
Inc.* 12,500 warrants Sep-93 0.00 7,812.50 7,812.50
------------ ------------ ------------
162,229.20 290,361.69 252,778.59
Premier Concepts, 188 common stock May-93 0.00 117.50 94.00
Inc.*** 112,500 common stock Mar-94 112,500.00 70,312.50 56,250.00
25,000 common stock Jun-94 27,500.00 15,625.00 12,500.00
60,000 common stock Oct-94 60,000.00 37,500.00 30,000.00
25,000 common stock Dec-94 25,000.00 15,625.00 12,500.00
8,500 common stock Sep-95 6,375.00 5,312.50 4,250.00
200,000 common stock Sep-95 50,000.00 125,000.00 100,000.00
5,000 common stock Jan-96 3,517.50 3,125.00 2,500.00
10,000 common stock Feb-96 4,687.50 6,250.00 5,000.00
15,000 common stock Apr-96 7,971.10 9,375.00 7,500.00
------------ ------------ ------------
297,551.10 288,242.50 230,594.00
Shiva Corporation 23,679 common stock Jun-96 - - 1,792,476.62
Southshore Corporation 7,400 common stock Mar-94 11,770.44 2,775.00 2,775.00
10,000 common stock Dec-95 3,200.00 3,750.00 3,750.00
------------ ------------ ------------
14,970.44 6,525.00 6,525.00
Topro, Inc.*** 2,500 common stock Sep-96 0.00 5,625.00 -
TOTAL RESTRICTED SECURITIES 1,119,078.09 1,027,305.86 2,545,894.88
------------ ------------ ------------
UNRESTRICTED SECURITIES:
- -----------------------
ABT Global
Pharmaceutical 2,500 common stock Aug-96 12,500.00 12,100.00 -
Astea International 10,000 common stock Sep-96 81,850.00 57,500.00 -
Bearehaven Reclamation 10,000 common stock Sep-96 35,407.00 30,000.00 -
Brassie Golf 85,000 common stock Sep-96 46,127.38 39,950.00 -
Cable & Co. Worldwide 5,000 common stock Sep-96 15,312.50 12,800.00 -
Corfacts, Inc. 200,000 common stock Jul-96 12,500.00 12,500.00 -
Cornucopia Resources 20,000 common stock Aug-96 33,044.70 22,180.00 -
Creative Programming 26,500 common stock Dec-95 - - 5,803.50
and Technology
Ventures
Discovery Technologies, 1,000 common stock Sep-93 - - 1,063.00
Inc.* 10,000 common stock Mar-94 - - 10,630.00
1,500 common stock Apr-94 - - 1,594.50
3,000 common stock Jun-94 - - 3,189.00
5,000 common stock Feb-96 - - 5,300.00
------------ ------------ ------------
0.00 0.00 21,776.50
Exploration Company 7,500 common stock Aug-96 17,580.48 22,500.00 -
3,000 common stock Sep-96 7,500.00 9,000.00 -
------------ ------------ ------------
25,080.48 31,500.00 0.00
Good Times Restaurants, 12,500 warrants Mar-94 - - 775.00
Inc.
Harlyn Products, Inc. 500 common stock Jan-96 - - 469.00
400 common stock Feb-96 - - 375.20
2,100 common stock Feb-96 - - 1,969.80
------------ ------------ ------------
0.00 0.00 2,814.00
Healthwatch, Inc. 2,500 common stock Jul-96 10,078.13 8,437.50 -
10,000 common stock Aug-96 33,750.00 33,750.00 -
115,000 warrants Jun-95 0.00 0.00 0.00
------------ ------------ ------------
43,828.13 42,187.50 0.00
Image Matrix 10,000 units Jun-96 57,500.00 45,620.00 50,000.00
Kinetics.com 10,000 common stock Sep-96 38,125.00 30,600.00 -
Laser Recording 100,000 common stock Jun-95 5,050.00 4,000.00 2,000.00
Systems, Inc.
North American Resorts 15,000 common stock May-96 - - 1,800.00
215,000 common stock Jul-96 29,725.00 19,350.00 -
20,000 common stock Sep-96 1,400.00 1,800.00 -
------------ ------------ ------------
31,125.00 21,150.00 1,800.00
Nutrition for Life, 1,000 common stock Apr-96 - - 14,750.00
Inc. 2,000 common stock Sep-96 22,125.00 23,000.00 -
------------ ------------ ------------
22,125.00 23,000.00 14,750.00
Reno Air 15,000 common stock Sep-96 130,002.35 116,250.00 -
S&P 500 1,000 puts (expire Jul-96 10,530.54 7,750.00 -
12/20/97)
1,000 puts (expire Aug-96 11,291.41 7,750.00 -
12/20/97)
2,000 puts (expire Sep-96 16,852.35 15,500.00 -
12/20/97)
------------ ------------ ------------
38,674.30 31,000.00 0.00
S2 Golf, Inc. 5,000 common stock May-96 - - 6,250.00
25,825 common stock Aug-96 23,061.88 25,825.00 -
------------ ------------ ------------
23,061.88 25,825.00 6,250.00
Shopsmith 10,000 common stock Sep-96 23,750.00 23,750.00 -
Tampa Bay Corporation 2,000 common stock May-96 - - 5,000.00
15,000 common stock Sep-96 37,928.00 31,875.00 -
------------ ------------ ------------
37,928.00 31,875.00 5,000.00
TELS Corporation 20,000 common stock Aug-96 12,812.50 13,800.00 -
10,000 common stock Sep-96 5,937.50 6,900.00 -
------------ ------------ ------------
18,750.00 20,700.00 0.00
TVG Technologies, Ltd. 1,000 A warrants Aug-93 0.00 375.00 875.00
21,600 A warrants Oct-93 57,212.50 8,100.00 18,900.00
5,000 A warrants Oct-93 - - 4,375.00
4,000 A warrants Mar-94 6,800.00 1,500.00 3,500.00
2,000 A warrants Jun-94 2,580.50 750.00 1,750.00
------------ ------------ ------------
66,593.00 10,725.00 29,400.00
Usasurance 15,000 common stock Jul-96 94,550.00 101,250.00 -
10,000 common stock Aug-96 62,750.00 67,500.00 -
------------ ------------ ------------
157,300.00 168,750.00 0.00
Virtual Technology 10,000 common stock Sep-96 30,365.00 11,250.00 -
<PAGE>
TOTAL UNRESTRICTED
SECURITIES 985,999.72 825,212.50 140,369.00
------------ ------------ ------------
OTHER SECURITIES:
- ----------------
Columbine Home Sales, Note Receivable, 10% Dec-95 0.00 6,175.00 6,175.00
LLC
Topro, Inc. Note Receivable, 12% Sep-96 50,000.00 50,000.00 -
due 11/96
TOTAL OTHER SECURITIES 50,000.00 56,175.00 6,175.00
------------ ------------ ------------
TOTAL INVESTMENTS 2,155,077.81 1,908,693.36 2,692,438.88
- ----------------- ============ ============ ============
<FN>
* These entities are considered to be affiliated companies as a result of the Company's investment and/or
position on the entity's Board of Directors during 1996.
** After permanent write-downs.
*** Certain shares are free trading either under Rule 144 of the Securities Act of 1933 or as a result of
demand registration rights held by the Company.
</FN>
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<PAGE>
<TABLE>
THE ROCKIES FUND, INC.
STATEMENT OF OPERATIONS
<CAPTION>
For the For the
Three Months Ended Three Months Ended
September 30, 1996 September 30, 1995
(Unaudited) (Unaudited)
------------------ ------------------
<S> <C> <C>
INVESTMENT INCOME:
Rental income 42,131 26,851
Interest income & dividends 13,671 89
Other 3,737 8,027
------------ ------------
Total Income/Revenue 59,539 34,967
Expenses:
Legal and professional fees 41,185 6,460
Wages and salaries 52,340 37,903
Interest 8,351 11,876
Travel and entertainment 4,335 8,933
Office 26,319 14,524
Building expenses and costs 39,961 18,996
Investment expenses 44,057 70
------------ ------------
Total Expenses 216,549 98,762
NET INVESTMENT (LOSS) (157,010) (63,795)
------------ ------------
NET REALIZED GAIN (LOSS) FROM
SALES AND PERMANENT WRITE-DOWNS
OF INVESTMENTS 1,803,872 13,257
------------ ------------
UNREALIZED APPRECIATION
(DEPRECIATION) IN VALUE OF
INVESTMENTS
Beginning of Period
June 30, 1996 and 1995 1,390,067 24,713
End of Period
September 30, 1996 and 1995 (246,384) 186,249
UNREALIZED NET APPRECIATION
(DEPRECIATION) OF INVESTMENTS $(1,636,451) $ 161,536
============ ===========
</TABLE>
<PAGE>
<PAGE>
<TABLE>
THE ROCKIES FUND, INC.
STATEMENT OF OPERATIONS
<CAPTION>
For the For the
Nine Months Ended Nine Months Ended
September 30, 1996 September 30, 1995
(Unaudited) (Unaudited)
------------------ ------------------
<S> <C> <C>
INVESTMENT INCOME:
Rental income 118,960 102,024
Interest income & dividends 14,000 592
Other 4,980 23,356
------------ ------------
Total Income/Revenue 137,940 125,972
Expenses:
Legal and professional fees 75,849 34,997
Wages and salaries 136,862 115,244
Interest 35,313 32,495
Travel and entertainment 11,230 5,091
Office 58,954 41,466
Bad Debt 7,997 -0-
Building expenses and costs 84,523 60,838
Investment expenses 47,793 5,223
------------ ------------
Total Expenses 458,521 295,354
NET INVESTMENT (LOSS) (320,581) (169,382)
------------ ------------
NET REALIZED GAIN (LOSS) FROM
SALES AND PERMANENT WRITE-DOWNS
OF INVESTMENTS 1,937,655 (16,473)
------------ ------------
UNREALIZED APPRECIATION
(DEPRECIATION) IN VALUE OF
INVESTMENTS
Beginning of Period
December 31, 1995 and 1994 77,017 249,439
End of Period
September 30, 1996 and 1995 (246,384) 186,249
UNREALIZED NET APPRECIATION
(DEPRECIATION) OF INVESTMENTS $ (323,401) $ (63,190)
============ ============
</TABLE>
<PAGE>
<PAGE>
<TABLE>
THE ROCKIES FUND, INC.
Statements of Stockholders' Equity
Nine Months Ended September 30, 1996 and
Years Ended December 31, 1995 and 1994
<CAPTION>
Accumulated
Net Realized
Gain (Losses)
From Unrealized Net
Accumulated Sales And Appreciation
Additional Net Permanent (Depreciation)
Common Paid-In Investment Write-Downs of Net
Stock Capital (Loss) Of Securities Investments Assets
------ ---------- ------------ ------------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
BALANCES AT
DECEMBER 31, 1994 $6,403 $2,901,243 $(1,205,672) $ (244,374) $ 249,439 $1,707,039
====== ========== ============ =========== ========== ==========
Net Investment Loss -- -- (258,942) -- -- (258,942)
Net Realized Gain on
Sale of Investments -- -- -- 31,889 -- 31,889
Unrealized Appreciation
of Investments -- -- -- -- (172,422) (172,422)
------ ---------- ------------ ----------- ----------- -----------
BALANCES AT
DECEMBER 31, 1995 $6,403 $2,901,243 $(1,464,614) $ (212,485) $ 77,017 $1,307,564
====== ========== ============ =========== ========= ==========
Net Investment Loss -- -- (67,370) -- -- (67,370)
Net Realized Gain
on Sale of Investments -- -- -- 97,190 -- 97,190
Unrealized Appreciation
of Investments -- -- -- -- (183,149) (183,149)
------ ---------- ------------ ----------- ----------- -----------
BALANCES AT
MARCH 31, 1996 $6,403 $2,901,243 $(1,531,984) $ (115,293) $(106,134) $1,154,235
====== ========== ============ =========== ========== ==========
Net Investment Loss -- -- (96,201) -- -- (96,201)
Net Realized Gain
on Sale of Investments -- -- -- 36,593 -- 36,593
Unrealized Appreciation
of Investments -- -- -- -- 1,496,201 1,496,201
------ ---------- ------------ ----------- ----------- -----------
<PAGE>
BALANCES AT
JUNE 30, 1996 $6,403 $2,901,243 $(1,628,185) $ (78,700) $1,390,067 $2,590,828
====== ========== ============ =========== ========== ==========
Net Investment Loss -- -- (157,010) -- -- (157,010)
Net Realized Gain
on Sale of Investments -- -- -- 1,803,872 -- 1,803,872
Unrealized Appreciation
(Depreciation) of
Investments -- -- -- -- (1,636,451) (1,636,451)
------ ---------- ------------ ----------- ----------- -----------
BALANCES AT
SEPTEMBER 30, 1996 $6,403 $2,901,243 $(1,785,195) $1,725,172 $ (246,384) $2,601,239
====== ========== ============ ========== =========== ==========
</TABLE>
<PAGE>
<PAGE>
<TABLE>
THE ROCKIES FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
<CAPTION>
For the For the
Three Months Ended Three Months Ended
September 30, 1996 September 30, 1995
(Unaudited) (Unaudited)
------------------ ------------------
<S> <C> <C>
From Investment Activities:
Net investment gain (loss): (157,010) (63,795)
Net realized gain from sales
and permanent write-downs
of investments: 1,803,872 13,257
Unrealized net appreciation
(depreciation): (1,636,451) 161,536
----------- -----------
Net increase (decrease) in
net assets resulting
from operations: 10,411 110,998
Net Assets:
Beginning of period
December 31, 1995 and 1994: 1,307,564 1,707,039
End of period
September 30, 1996 and 1995: 2,601,239 1,457,994
/TABLE
<PAGE>
<PAGE>
<TABLE>
THE ROCKIES FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
<CAPTION>
For the For the
Nine Months Ended Nine Months Ended
September 30, 1996 September 30, 1995
(Unaudited) (Unaudited)
------------------ ------------------
<S> <C> <C>
From Investment Activities:
Net investment gain (loss): (320,581) (169,382)
Net realized gain (loss) from
sales and permanent write-downs
of investments: 1,937,655 (16,473)
Unrealized net appreciation
(depreciation): (323,401) (63,190)
----------- -----------
Net increase (decrease) in
net assets resulting
from operations: 1,293,673 (249,045)
Net Assets:
Beginning of period
December 31, 1995 and 1994: 1,307,564 1,707,039
End of period
September 30, 1996 and 1995: 2,601,239 1,457,994
</TABLE>
<PAGE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
-----------------------------------------------------------
(a) Organization.
------------
The Rockies Fund, Inc. (the "Company") was incorporated in Nevada on
August 2, 1983, for the principal purpose of making venture capital investments
in developing companies located primarily in the Rocky Mountain Region of the
United States. The Company is registered under the Investment Company Act of
1940 as a business development company.
(b) Valuation of Investments.
------------------------
In the absence of readily ascertainable market values, investments in
restricted securities without quoted market prices are carried at estimated
fair value as determined in good faith by the Board of Directors. Due to the
inherent uncertainty of valuation, those estimated values may differ
significantly from the values that would have been used had a ready market of
the investments existed, and the differences could be material. Investments in
unrestricted securities and restricted securities with quoted market prices are
valued at closing bid price.
(c) Income Taxes.
------------
As a business development company, the Company is subject to Federal
and State income taxes at the applicable corporate rates. Deferred income
taxes are provided for timing differences between the reporting of income for
financial statement and tax return purposes, principally realized and
unrealized gains on investments. For Federal and State income tax purposes,
the investments have the same cost basis as shown in the financial statements.
2. PORTFOLIO SECURITIES
--------------------
ABT GLOBAL PHARMACEUTICAL
-------------------------
The Company, at September 30, 1996 held 2,500 shares of ABT Global
Pharmaceutical, which shares are unrestricted as to sale, non-income producing,
and have been valued at their quoted market price of $4.84 per share or
$12,100.
AMERICAN EDUCATIONAL PRODUCTS, INC.
-----------------------------------
The Company, at September 30, 1996, held 240,000 shares of American
Educational Products, Inc. which shares are non-income producing and have been
valued by the Board of Directors at their cost of $1.00 per share. The Company
does have certain registration rights relating to these shares.
ASTEA INTERNATIONAL
-------------------
The Company, at September 30, 1996, held 10,000 shares of Astea
International, which shares are unrestricted as to sale, non-income producing,
and have been valued at their quoted market price of $5.75 per share or
$57,500.
<PAGE>
BEAR STAR (fka COLUMBINE HOME SALES, LLC.)
------------------------------------------
The Company has invested in Bear Star, which investment is restricted as
to sale, non-income producing, and has been valued by the Board of Directors at
$0.00 based on FASB 123 Impairment of Long Term Assets. The Company also holds
a note receivable from Columbine Homes in the amount of $6,175 which note
accrues interest at the rate of 10% per annum.
BEAREHAVEN RECLAMATION
----------------------
The Company, at September 30, 1996, held 10,000 shares of Bearehaven
Reclamation common stock, which shares are unrestricted as to sale, non-income
producing, and have been valued at their quoted market price of $3.00 per share
or $30,000.
BMPI LIQUIDATING TRUST
----------------------
At September 30, 1996, the Company held 500,040 shares of BMPI Liquidating
Trust, which stock is restricted as to sale, non-income producing, and has been
valued by the Board of Directors at $.1168 per share or $58,421.
BRASSIE GOLF
------------
The Company, at September 30, 1996, held 85,000 shares of Brassie Golf,
which shares are unrestricted as to sale, non-income producing, and have been
valued at their quoted market price of $.47 per share or $39,950.
CABLE AND COMPANY WORLDWIDE
---------------------------
The Company, at September 30, 1996, held 5,000 shares of Cable and Company
Worldwide common stock, which stock is unrestricted as to sale, non-income
producing, and has been valued at its quoted market price of $2.56 per share or
$12,800.
CAPITAL 2000, INC. (fka OTC CAPITAL CORPORATION)
------------------------------------------------
The Company, at September 30, 1996, held 50,000 shares of Capital 2000,
Inc. (fka OTC Capital Corporation) common stock, which stock is restricted as
to sale, non-income producing, and has been valued by the Board of Directors at
$.50 per share or $25,000 due to subsequent sales at that price.
CORFACTS, INC.
--------------
The Company, at September 30, 1996, held 200,000 shares of Corfacts, Inc.
which shares are unrestricted as to sale, non-income producing, and have been
valued at their quoted market price of $.0625 or $12,500.
CORNUCOPIA RESOURCES
--------------------
The Company, at September 30, 1996, held 20,000 shares of Cornucopia
Resources common stock, which stock is unrestricted as to sale, non-income
producing, and has been valued at its quoted market price of $1.1090 per share
or $22,180.
COLORADO VENTURE MANAGEMENT EQUITY FUND I, LTD. ("CVM I")
---------------------------------------------------------
As of September 30, 1996, the Company held a 2.29% interest in CVM I,
which was valued by the Board of Directors at $10,000. CVM I is a venture
partnership which represents a broad spectrum of investments in Rocky Mountain
based venture capital companies.
COVA TECHNOLOGIES
-----------------
The Company, at September 30, 1996, held 917 shares of Cova Technologies
stock, which stock is restricted as to sale, non-income producing, and has been
valued by the Board of Directors at its cost of $20,035.
THE EXPLORATION COMPANY
-----------------------
The Company, at September 30, 1996, held 10,500 shares of The Exploration
Company common stock, which shares are unrestricted as to sale, non-income
producing, and have been valued at their quoted market price of $3.00 per share
or $31,500.
GLOBAL CASINOS, INC.
--------------------
The Company, at September 30, 1996, held 176,800 shares of Global Casinos,
Inc. common stock, which shares are restricted as to sale due to the Company
being an affiliate, non-income producing, and have been valued by the Board of
Directors at their quoted market price of $.47 per share, or $83,096. The
Company also holds common stock purchase warrants exercisable to purchase up to
17,500 shares of common stock of Global Casinos, Inc., at an exercise price of
$2.00 per share, which warrants are also restricted as to sale, non-income
producing, and have been valued by the Board of Directors at $0.00, based on
the fact that the exercise price of the warrants exceeds the current market
price of the underlying common stock. Global Casinos, Inc. is engaged in the
operation of gaming properties, both domestically and internationally. Global
Casinos, Inc. has a revolving line of credit with the Rockies Fund, Inc. for a
maximum of $250,000 at 12% interest, the outstanding balance of which, at
September 30, 1996, was $170,000.
HEALTHWATCH, INC.
-----------------
The Company, at September 30, 1996, held 12,500 shares of Healthwatch
common stock, which shares are unrestricted as to sale, non-income producing,
and have been valued at their quoted market price of $3.3750 per share or
$42,187.50. Additionally the Company holds warrants to purchase additional
shares of Healthwatch which warrants are valued at $0.00 due to the fact that
their exercise price exceeds the market price of the stock.
IMAGE MATRIX
------------
The Company, at September 30, 1996, held 10,000 units of Image Matrix
Corporation which shares are unrestricted as to sale, non-income producing, and
have been valued at their quoted market price of $4.56 per share or $45,620.
KINETICS.COM
------------
The Company, at September 30, 1996, held 10,000 shares of Kinetics.com
common stock, which shares are unrestricted as to sale, non-income producing,
and have been valued at their quoted market price of $3.06 per share or
$30,600.
NORTH AMERICAN RESORTS, INC.
----------------------------
The Company, at September 30, 1996, held 235,000 shares of North American
Resorts, Inc. common stock, which shares are unrestricted as to sale, non-
income producing, and have been valued at their quoted market price of $.09 per
share or $21,150.
NUTRITION FOR LIFE, INC.
------------------------
The Company, at September 30, 1996, held 2,000 shares of Nutrition For
Life, Inc. common stock, which shares are unrestricted as to sale, non-income
producing, and have been valued at their quoted market price of $11.50 per
share or $23,000.
OPTIMAX INDUSTRIES, INC. (fka PLANTS FOR TOMORROW, INC.)
--------------------------------------------------------
At September 30, 1996, the Company held 135,191 shares of Optimax
Industries, Inc. common stock, which shares are restricted as to sale, are non-
income producing, and have been valued at their quoted market price of $2.09
per share or $282,549.19. The Company also holds warrants to purchase an
additional 12,500 shares of Optimax Industries, Inc. common stock, which
warrants are valued at their quoted market price of $.625 each or $7,812.50.
PREMIER CONCEPTS, INC.
----------------------
The Company, at September 30, 1996, held 461,188 shares of Premier
Concepts, Inc. common stock, which shares are restricted as to sale, non-income
producing, and have been valued at their quoted market price of $.625 per
share, or $288,242.50.
RENO AIR
--------
The Company, at September 30, 1996, held 15,000 shares of Reno Air common
stock, which shares are unrestricted as to sale, non-income producing, and have
been valued at their quoted price of $7.75 per share or $116,250.
S2 GOLF, INC.
-------------
The Company, at September 30, 1996, held 25,825 shares of S2 Golf,
Inc.(Square Two Golf), which shares are unrestricted as to sale, non-income
producing and have been valued at their quoted market price of $1.00 per share
or $25,825.
S&P 500
-------
The Company, at September 30, 1996, held 4,000 puts against the S&P 500.
Said puts are unrestricted as to sale and expire on December 20, 1997. They
have been valued at their quoted market value of $7.75 or $31,000.
SHOPSMITH
---------
The Company, at September 30, 1996, held 10,000 shares of Shopsmith common
stock, which shares are unrestricted as to sale, non-income producing, and have
been valued at their quoted market price of $2.375 per share or $23,750.
SOUTHSHORE CORPORATION
----------------------
At September 30, 1996, the Company held 17,400 shares of Southshore
Corporation common stock, which shares are restricted as to sale, non-income
producing, and have been valued at their quoted market price of $.375 per share
or $6,525.
TAMPA BAY CORPORATION
---------------------
The Company, at September 30, 1996, held 15,000 shares of Tampa Bay
Corporation common stock, which shares are unrestricted as to sale, non-income
producing, and have been valued at their quoted market price of $2.13 per share
or $31,875.
TELS CORPORATION
----------------
The Company, at September 30, 1996, held 30,000 shares of TELS Corporation
common stock, which shares are unrestricted as to sale, non-income producing,
and have been valued at their quoted market price of $.69 per share or $20,700.
TOPRO, INC.
-----------
The Company, at September 30, 1996, held 2,500 shares of Topro, Inc.
common stock, which shares are restricted as to sale, non-income producing, and
have been valued at their quoted market price of $2.25 per share or $5,625.
The Company also held a $50,000 note receivable from Topro, Inc. which note
accrues interest at 12% per annum and is due November 8, 1996.
TVG TECHNOLOGIES, INC.
----------------------
The Company, at September 30, 1996, held common stock purchase warrants
exercisable to acquire up to 28,600 shares of TVG Technologies common stock,
which warrants are unrestricted as to sale, non-income producing, and have been
valued at their quoted market price of $.38 per share or $10,725.
USASURANCE
----------
The Company, at September 30, 1996, held 25,000 shares of Usasurance
common stock, which shares are unrestricted as to sale, non-income producing,
and have been valued at their quoted market price of $6.75 or $168,750.
VIRTUAL TECHNOLOGIES
--------------------
The Company, at September 30, 1996, held 10,000 shares of Virtual
Technologies common stock, which shares are unrestricted as to sale, non-income
producing, and have been valued at their quoted market price of $1.13 per share
or $11,250.
REAL ESTATE OPERATIONS
----------------------
During the third quarter of fiscal 1993 the Company purchased a
26,500 square foot office building located in Colorado Springs, Colorado
(the "Building"). The Building was acquired primarily to provide office
space for the Company and as a potential source of income. The Company
currently occupies approximately eight percent (8%) of the Building and
leases the remaining space to thirteen (13) other unrelated parties under
varying, noncancelable, operating leases expiring in various years through
2002. The Building is currently 110% occupied, including a one year lease
for the Building roof for placement of Antenna Facilities, effective
September 16, 1996.
The Company's employees are responsible for management and
leasing of the Building, and currently spend between 10% and 15% of their
time attending to such activities. The balance of their time is devoted
to the Company's other investment and venture capital activities.
Aside from ownership and operation of the Building, it is not
the intention of the Company to actively participate in the commercial
real estate industry. The company is considering however, purchasing or
building new office space and subsequently selling its existing Building
sometime in the near future, depending upon the marketability. In making
this decision, the Board will consider the prospects of capital
appreciation, cash flow from rental operations and reinvestment thereof,
the risks of the particular property and the rental market conditions
existing at the time of purchase. Additional investments in rental real
estate must also be made in compliance with the provisions of the Act and
must not jeopardize the Company's status as a business development company
under the Act.
The commercial real estate market in Colorado Springs, Colorado,
although steadily improving over the last several years, still remains
very competitive. While the Board does not believe that a single firm or
group dominates the commercial real estate industry in Colorado Springs,
many of the participants are well-established and possess far greater
financial and market resources than the Company.
3. INCOME TAXES
------------
For federal income tax purposes, the Company has net operating loss and
capital loss carry-forwards and for financial statement purposes, the Company
has loss carry-forwards. The net operating losses expire through the year 2006
and the capital loss carry-forwards expire through the end of this year.
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
- -------------------------------------------------------------------------
The following discussion and analysis should be read in conjunction
with the Financial Statements and Notes thereto appearing elsewhere in this
report.
LIQUIDITY AND CAPITAL RESOURCES - SEPTEMBER 30, 1996 COMPARED TO DECEMBER 31,
1995
- -----------------------------------------------------------------------------
During the three months ended September 30, 1996, the Company
liquidated certain securities, including Newport Firstfax, Ltd., 23,679 shares
of Shiva Corporation, 26,500 shares of Creative Programming and Technical
Ventures, 20,500 shares of Discovery Technology, 12,500 Warrants of Good Times
Restaurant, 3,000 shares of Harlyn Products, Inc., 15,000 shares of North
American Resorts, 1,000 shares of Nutrition for Life Inc., 5,000 shares of S2
Golf, Inc., 2,000 shares of Tampa Bay Corporation and 5,000 shares of TVG
Technologies, Ltd. The Company also purchased and subsequently sold several
securities within the three months ended September 30, 1996 for a total
realized gain of $72,049. The funds received from the liquidation of these
securities allowed the Company to add a limited number of new investments to
the Company's portfolio, including the following:
During the three months ended September 30, 1996, the Company
acquired 240,000 shares and 200,000 warrants of American Educational Products,
for a total investment of $237,115; 2,500 shares of Topro, Inc., for a total
investment of $0.00; 2,500 shares of ABT Global Pharmaceutical, for a total
investment of $12,500; 10,000 shares of Astea International, for a total
investment of $81,850; 10,000 shares of Bearehaven Reclamation, for a total
investment of $35,407; 85,000 shares of Brassie Golf , for a total investment
of $46,127; 5,000 shares of Cable & Co. Worldwide, for a total investment of
$15,313; 200,000 shares of Corfacts, Inc., for a total investment of $12,500;
20,000 shares of Cornucopia Resources, for a total investment of $33,048;
10,500 shares of Exploration Company, for a total investment of $25,081; 12,500
shares and 115,000 warrants of Healthwatch, Inc., for a total investment of
$43,828; 10,000 shares of Kinetics.com, for a total investment of $38,125;
250,000 shares of North American Resorts, for a total investment of $31,125;
2,000 shares of Nutrition For Life, Inc., for a total investment of $22,125;
15,000 shares of Reno Air, for a total investment of $130,002; 4,000 puts of
S&P 500, for a total investment of $38,674; 25,825 shares of S2 Golf, Inc., for
a total investment of $23,750; 10,000 shares of Shopsmith, for a total
investment of $23,750; 30,000 shares of Tels Corporation, for a total
investment of $18,750; 25,000 shares of Usasurance, for a total investment of
$157,300; and 10,000 shares of Virtual Technology, for a total investment of
$30,365.
Primarily due to the proceeds from the sale of 23,679 shares of
Shiva Corp. (fka Airsoft) common stock during the three months ended September
30, 1996, the Company has added 22 investments to its portfolio contributing to
the increased value of restricted and unrestricted securities from $1,400,374
as of December 31, 1995 to $1,852,518 as of September 30, 1996, an increase of
$452,144 or 32% .
Cash and cash equivalents increased significantly from $1,193 as of
December 31, 1995 to $459,940 as of September 30, 1996, again, due primarily to
the sale of Shiva Corp. common stock. There was a decrease in accounts
receivable of $17,024 or 28% from $61,518 as of December 31, 1995 to 41,494 as
of September 30, 1996. During the three months ended September 30, 1996, the
Company agreed to provide a revolving line of credit to its affiliate, Global
Casinos Inc., for a maximum of $250,000 at 12% interest. As of September 30,
1996, Global Casino's line of credit balance was $170,000.
Total current assets increased from $1,471,864 at December 31, 1995
to $2,583,916 on September 30, 1996, an increase of $1,112,052 or 76% due to
the value of investments in restricted and unrestricted securities and the cash
proceeds from the sale of Shiva Corp. common stock.
During the quarter ended September 30, 1996, the Company sold a
promissory note to a party entitled to a one-half interest in the Company's
Colorado Springs Office Building and to certain real property and improvements
of the Company's Building. In addition, Leasehold Improvements increased by 4%
due to certain Building improvements to accommodate a new lease tenant.
Based on the foregoing, total assets increased significantly from
$2,186,787 on December 31, 1995 to $3,356,195 on September 30, 1996, an
increase of $1,169,317 or 54%.
Proceeds from the sale of Shiva Corp. common stock during the
quarter ended September 30, 1996, were used to reduce the Company's current
liability by $87,300. Specifically, the Company's cash overdraft of $18,653
was eliminated, accounts payable were decreased by $10,940 or 20%, and Notes
Payable was reduced by $135,778 or 71%. As a result of the foregoing
reductions, accrued interest payable decreased from $19,588 at December 31,
1995, to $3,990 at September 30, 1996, a decrease of $15,598 or nearly 80%.
Offset against the foregoing reductions were increases in borrowings under the
Company's lines of credit of $71,414 or 69% from $103,086 on December 31, 1995
to $174,500 as of September 30, 1996. The Company has two lines of credit
which include a fully drawn $100,000 line that accrues interest at prime plus
2% (currently 10.25%) secured by the Company's Building; and an outstanding
$75,000 line with a balance of $74,500 as of September 30, 1996 that accrues
interest at 9.5% secured by the Company's Optimax Industries, Inc. holdings.
Other liabilities decreased by 12% due to the amortization of tenant leasehold
improvements and will continue to decrease $2,500 per quarter until fully
utilized.
As a result, total liabilities decreased during the nine months
ended September 30, 1996, from $879,223 at December 31, 1995, to $754,957, a
decrease of $124,266, or 14%.
Based on the foregoing, Net Asset Value increased during the nine
months ended September 30, 1996, from $1,307,564 at December 31, 1995, to
$2,601,239 at September 30, 1996, an increase of $1,293,675 or nearly 99%. Net
assets per common share increased from $2.04 per share at December 31, 1995, to
$4.06 per share on September 30, 1996, an increase of $2.02.
The Company is currently considering the acquisition or construction
of a new office building. In making this decision, the Board will consider the
prospects of capital appreciation, cash flow from rental operations and the
reinvestment thereof, the risks associated with a particular property, and the
rental market for office space existing at the time of purchase or
construction. The purchase or construction of a new office building would,
most likely, be undertaken in conjunction with the sale of the Company's
existing office building.
Any additional investments in rental real estate must be made in
compliance with the provisions of the Investment Company Act of 1940 (the
"Act"), and cannot jeopardize the Company's status as a business development
company registered under the Act.
Other than the possible sale of the Company's office building,
Management knows of no trends or demands, commitments, events or uncertainties
which will result in the Company's liquidity or capital resources materially
increasing or decreasing.
RESULTS OF OPERATIONS THREE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO THREE
MONTHS ENDED SEPTEMBER 30, 1995.
- -----------------------------------------------------------------------------
The Company's income/revenue for the three months ended September
30, 1996, was $59,539, an increase of $24,572 or 70% compared with the same
period in 1995. This increase in income/revenue is due to the Company's office
building being fully leased and interest earned on the proceeds from the sale
of Shiva Corp. common stock. Expenses increased from $98,762 in 1995 to
$216,549 as of September 30, 1996, an increase of $117,787 or 119%.
Contributing to the increase in expenses were an increase in legal and
professional expenses of 538%, wages and salaries of 38%, office expenses of
81%, building expenses of 110% and a $44,000 investment expenses as of
September 30, 1996. The increase in expenses are mainly attributable to legal
fees associated with an ongoing SEC investigation, the conversion of a part-
time position to full-time employee, salary increases, purchases of tangible
personal property in conjunction with the Company's rental activities, and
needed building repairs and brokerage fees from investments sales and
purchases.
Based on the foregoing, the Company reported a net investment loss
for the three months ended September 30, 1996, of $(157,010), an increase of
146% when compared to the net investment loss of $(63,795) incurred during the
same period in 1995.
For the three months ended September 30, 1996, the Company's net
realized gain from sales of investments was $1,803,872, compared to a net
realize gain of $13,257 during September 30, 1995, an increase of $1,790,615.
This dramatic increase is primarily due to the sale of Shiva Corp. common stock
during the quarter ended September 30, 1996. During the three months ended
September 30, 1996, the unrealized depreciation in the value of the Company's
investments was $(1,636,451) compared to unrealized appreciation of $161,536
for the three months ended September 30, 1995 and represents an unrealized loss
of $1,797,987. This change is primarily due to the fact that the market value
of the Company's investments at the beginning of the period included the value
of the Company's Shiva Corp. holdings which were transferred from unrealized to
realized gain during the three months ended September 30, 1996.
RESULTS OF OPERATIONS NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO NINE
MONTHS ENDED SEPTEMBER 30, 1995.
- ---------------------------------------------------------------------------
The Company's income/revenue for the nine months ended September 30,
1996 was $137,940, an increase of 9.5% over total income for the same period in
1995. Expenses increased a total of 55% from the same period in 1995.
Contributing to the increase in expenses were increases in legal and
professional fees of 116%, office expenses of 42%, building operating expenses
of 39% and an investment expense of 813%. The expense increases are mainly
attributable to legal services associated with an ongoing SEC investigation,
purchases of tangible personal property, building maintenance and broker fees
from investment sales and purchases.
Based on the foregoing, the Company experienced a net investment
loss of $(320,581), an 89% increase compared to the $(169,382) loss experienced
in the same period in 1995.
For the nine months ended September 30, 1996, the Company's net
realized gain from the sale of investments was $1,937,655, compared to a net
realized loss of $(16,473) for the same period in 1995. During the nine months
ended September 30, 1996, the unrealized depreciation in the value of the
Company's investments was $(323,401) compared to unrealized depreciation of
$(63,190) as of September 30, 1995, a loss of $260,211.
Other than the possible sale of the Company's office building
described above, Management knows of no trends or demands, commitments, events
or uncertainties which will materially affect the Company's operations.
<PAGE>
<PAGE>
PART 1. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
During 1995, the Company received requests for information from the United
States Securities and Exchange Commission ("Commission") related to an
investigation begun by the Commission during 1994 into various matters,
including the administrative and record keeping practices of the Company, its
securities trading activities and those of one of its officers. The Company
has received a letter indicating that the Staff intends to recommend to the
Commission that an action be brought against the Company and members of its
Board of Directors for various violations of federal securities laws. In
response to the letter, the Company has made a Wells Submission setting forth
the basis of the Company's belief that such an action should not be brought.
There can be no assurance of the outcome of this matter or the ultimate effect
on the Company's financial position.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULT UPON SENIOR SECURITIES
There have been no defaults on any securities. The Company has no
obligations with regard to dividends and no preferred stock is outstanding.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On September 6, 1996, the Company held its regular Annual Meeting
of Shareholders (the "Meeting"). At the Meeting, the following matters were
voted upon and approved:
1) The following persons were elected to serve as Directors of
the Company until the next regular Annual Meeting of Shareholders and
until their successors have been duly elected and qualified:
<TABLE>
<CAPTION>
DIRECTOR VOTES FOR VOTES AGAINST
---------------------- --------- -------------
<S> <C> <C> <C>
Clifford C. Thygesen 576,413 10
Stephen G. Calandrella 576,413 10
Charles Powell 576,413 10
</TABLE>
2) The selection by the Board of Directors of the firm of GELFOND
HOCHSTADT PANGBURN & CO., a Professional Corporation, as the independent
accountants for the Fund for the fiscal year ending December 31, 1996, was
ratified and approved:
<TABLE>
<CAPTION>
VOTES FOR VOTES AGAINST ABSTAIN
--------- ------------- -------
<S> <C> <C> <C>
576,336 77 10
</TABLE>
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
None.
<PAGE>
<PAGE>
SIGNATURE
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 hereunto duly authorized.
THE ROCKIES FUND, INC.
Dated: November 14, 1996 By: /s/ Stephen G. Calandrella
----------------------- ----------------------------------
Stephen G. Calandrella, President
Dated: November 14, 1996 By: /s/Barbara A. Hamstad
----------------------- ----------------------------------
Barbara A. Hamstad
Principal Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE STATEMENT
OF ASSETS & LIABILITIES, STMNT OF OPERATIONS, SCHEDULE OF INVESTMENTS, STMNT OF
CHANGES IN NET ASSETS AND STATEMENT OF STOCKHOLDERS EQUITY ON PG 4-16 OF THE
COMPANY'S QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED SEPT. 30, 1996 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<INVESTMENTS-AT-COST> 2,155,078
<INVESTMENTS-AT-VALUE> 1,852,518
<RECEIVABLES> 215,283
<ASSETS-OTHER> 1,223,842
<OTHER-ITEMS-ASSETS> (64,552)
<TOTAL-ASSETS> 3,356,195
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 362,077
<OTHER-ITEMS-LIABILITIES> 392,880
<TOTAL-LIABILITIES> 754,957
<SENIOR-EQUITY> 6,403
<PAID-IN-CAPITAL-COMMON> 2,901,243
<SHARES-COMMON-STOCK> 640,256
<SHARES-COMMON-PRIOR> 640,256
<ACCUMULATED-NII-CURRENT> (1,785,195)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1,725,172
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (246,384)
<NET-ASSETS> 2,601,239
<DIVIDEND-INCOME> 21
<INTEREST-INCOME> 13,979
<OTHER-INCOME> 123,940
<EXPENSES-NET> 458,521
<NET-INVESTMENT-INCOME> (320,581)
<REALIZED-GAINS-CURRENT> 1,937,655
<APPREC-INCREASE-CURRENT> (323,401)
<NET-CHANGE-FROM-OPS> 1,293,673
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 1,293,673
<ACCUMULATED-NII-PRIOR> (1,628,185)
<ACCUMULATED-GAINS-PRIOR> (78,700)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 35,313
<GROSS-EXPENSE> 458,521
<AVERAGE-NET-ASSETS> 2,115,434
<PER-SHARE-NAV-BEGIN> 2.042
<PER-SHARE-NII> .215
<PER-SHARE-GAIN-APPREC> 2.021
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 4.06
<EXPENSE-RATIO> .29
<AVG-DEBT-OUTSTANDING> 835,353
<AVG-DEBT-PER-SHARE> 1.30
</TABLE>
