<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 1997
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to
Commission file number 0-12444
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 CORPORATE ISSUERS:
As of March 31, 1997, 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 March 31, 1997
(unaudited) and December 31, 1996 (audited)
Schedule of Investments and Restricted Securities (unaudited)
Statement of Operations for the Three Months Ended March 31,
1997 and March 31, 1996 (unaudited)
Statements of Stockholders' Equity for the Three Months Ended
March 31, 1997 (unaudited), and Years Ended December 31, 1996
and 1995 (audited)
Statement of Changes in Net Assets as of March 31, 1997 and
March 31, 1996 (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 interim unaudited financial statements have been prepared by the
Rockies Fund, Inc. (the "Company") and, in the opinion of management, reflect
all material adjustments which are necessary to a fair statement of results of
the interim periods presented. Such adjustments consisted only of normal
recurring items (except as discussed in Note 3). Certain information and
footnote disclosure made in the last annual report on Form 10-K have been
condensed or omitted for the interim statements. These statements should be
read in conjunction with the financial statements and notes thereto included in
Form 10-K for the year ended December 31, 1996. The results of the interim
periods are not necessarily indicative of results which may be expected for any
other interim period or for the full years.
<PAGE>
<PAGE>
<TABLE>
THE ROCKIES FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1997 AND DECEMBER 31, 1996
<CAPTION>
March 31, December 31,
1997 1996
(unaudited) (audited)
------------- ------------
<S> <C> <C>
ASSETS
Investments at value
(See accompanying schedule):
Restricted and unrestricted securities $ 2,044,683 $ 1,841,093
Notes receivable 231,671 138,404
------------ ------------
2,276,354 1,979,497
Cash:
Held by related party 599,924 391,698
Held by others 14,233 107,706
Accrued interest receivable held by others 17,623 12,789
Receivables from investees 548 23,072
Other assets 11,136 15,809
------------ ------------
Total Current Assets 2,919,818 2,530,571
------------ ------------
Property & Equipment:
Land 0 102,775
Building 0 633,496
Leasehold improvements 0 86,614
Equipment 1,484 1,484
Furniture and fixtures 12,461 12,461
------------ ------------
13,945 836,830
Less Accumulated Depreciation (5,258) (72,309)
------------ ------------
8,687 764,521
------------ ------------
Investment in long term note receivable
related party 175,000 175,000
TOTAL ASSETS 3,103,505 3,470,092
------------ ------------
</TABLE>
(Continued)
<PAGE>
<PAGE>
<TABLE>
THE ROCKIES FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1997 AND DECEMBER 31, 1996
(Continued)
<CAPTION>
March 31, December 31,
1997 1996
(unaudited) (audited)
------------ -------------
<S> <C> <C>
LIABILITIES
Payables:
Trade $ 48,225 $ 23,152
Related parties 153,566
Investment securities purchased 100,000 116,882
Accrued liabilities 40,807 82,408
Accrued income taxes 118,000 118,000
Accrued interest payable 4,106 7,428
Notes payable
Related parties 6,500 6,500
Mortgage note, current portion 43,087
Other 98,873 38,734
Borrowings under lines of credit 74,500 174,500
------------ ------------
Total Current Liabilities: 491,011 764,257
Security deposits 7,254
Other liabilities 52,500
Mortgage note, less current portion 315,349
------------ ------------
Total Liabilities 491,011 1,139,360
NET ASSETS and STOCKHOLDER'S EQUITY $ 2,612,494 $ 2,330,732
(Equivalent to $4.08 per share at March 31, ============ ============
1997 and $3.64 per share at Dec. 31, 1996)
COMPONENTS OF NET ASSETS
Common Stock, $.01 par value, Authorized
5,000,000 shares; 640,256 issued and
outstanding $ 6,403 $ 6,403
------------ ------------
Additional paid-in capital 2,901,243 2,901,243
------------ ------------
Accumulated (deficit):
Accumulated net investment loss (1,973,453) (1,893,303)
Accumulated net realized gain (losses)
from sales and permanent write-downs
of securities 1,815,252 1,336,711
Unrealized net (depreciation) of investments (136,951) (20,322)
------------ ------------
Total accumulated deficit (295,152) (576,914)
------------ ------------
NET ASSETS $ 2,612,494 $ 2,330,732
============ ============
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
THE ROCKIES FUND, INC.
Schedules of Investments
March 31, 1997 and December 31, 1996
- --------------------------------------------------------------------------------------------------------------
FAIR FAIR
INITIAL ** COST AT VALUE AT VALUE AT
INVESTMENT MARCH 31, MARCH 31, DECEMBER 31,
COMPANY POSITION DATE 1997 1997 1996
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
RESTRICTED SECURITIES:
- ---------------------
American Educational 200,000 common stock Sep-96 200,000.00 125,000.00 187,500.00
Products, Inc.* *** 200,000 warrants Sep-96 0.00 0.00 0.00
------------ ------------ ------------
200,000.00 125,000.00 187,500.00
Bear Star, LLC* 5% partnership interest Nov-94 0.00 0.00 0.00
COVA Technologies* 917 common stock Jul-96 20,035.00 20,035.00 20,035.00
Global Casinos, Inc.* 3,800 common stock Nov-93 76,000.00 13,775.00 16,150.00
4,331 common stock Jan-94 50,068.21 15,699.88 18,406.75
1,724 common stock Jan-94 19,931.79 6,249.50 7,327.00
1,250 common stock Feb-94 25,000.00 4,531.25 5,312.50
75 common stock Mar-94 0.00 271.88 318.75
500 common stock Oct-94 10,000.00 1,812.50 2,125.00
5,000 common stock Feb-96 17,207.50 18,125.00 21,250.00
1,000 common stock Mar-96 3,125.00 3,625.00 4,250.00
105,000 warrants Nov-96 0.00 0.00 0.00
------------ ------------ ------------
201,332.50 64,090.01 75,140.00
Guardian Technologies,
Inc.* 25,000 common stock Feb-97 8,750.00 17,968.75
271,000 common stock Mar-97 126,450.00 195,212.50
411,000 warrants Mar-97 26,255.00 25,687.50
------------ ------------ ------------
161,455.00 238,868.75 0.00
Kinetiks.com* 10,000 common stock Sep-96 38,125.00 3,750.00 6,250.00
11,000 common stock Oct-96 24,312.50 4,125.00 6,875.00
20,000 common stock Nov-96 12,187.50 7,500.00 12,500.00
62,500 common stock Dec-96 44,851.88 23,437.50 39,062.50
50,000 warrants Feb-97 0.00 6,250.00
50,000 warrants Mar-97 0.00 6,250.00
------------ ------------ ------------
119,476.88 51,312.50 64,687.50
Land Resource
Corporation* 10,000 common stock Mar-97 10,000.00 10,000.00 10,000.00
Lone Oak Vineyards,
Inc. 35,000 common stock Feb-97 35,000.00 35,000.00
Navidec 1,811 common stock Feb-97 7,705.20 9,281.38 7,456.43
4,261 common stock Feb-97 17,543.57
6,072 warrants Feb-97 0.00 3,795.00
------------ ------------ ------------
7,705.20 13,076.38 25,000.00
Optimax Industries,
Inc.* 135,191 common stock Jun-94 162,229.20 371,775.25 337,977.50
12,500 warrants Sep-93 0.00 9,375.00 9,375.00
------------ ------------ ------------
162,229.20 381,150.25 347,352.50
Southshore
Corporation*** 7,400 common stock Mar-94 11,770.44 3,700.00 3,700.00
10,000 common stock Dec-95 3,200.00 5,000.00 5,000.00
------------ ------------ ------------
14,970.44 8,700.00 8,700.00
Training Devices, Inc. 20,000 common stock Feb-97 25,000.00 25,000.00
Usasurance Group* 15,000 common stock Jul-96 94,550.00 45,000.00 60,000.00
10,000 common stock Sep-96 62,750.00 30,000.00 40,000.00
2,500 common stock Oct-96 12,375.00 7,500.00 10,000.00
31,500 common stock Dec-96 73,777.00 94,500.00 126,000.00
1,500 common stock Dec-96 6,000.00
2,500 common stock Jan-97 8,750.00 7,500.00
------------ ------------ ------------
252,202.00 184,500.00 242,000.00
Total Restricted Securities 1,209,406.22 1,156,732.89 980,415.00
------------ ------------ ------------
UNRESTRICTED SECURITIES:
- -----------------------
Alouette Cosmetics 2,500 common stock Nov-96 7,500.00
Astea International 5,000 common stock Sep-96 27,625.00 20,000.00 28,437.50
5,000 common stock Nov-96 24,575.00 20,000.00 28,437.50
10,000 common stock Feb-97 54,875.00 40,000.00
------------ ------------ ------------
107,075.00 80,000.00 56,875.00
Brassie Golf 35,000 common stock Aug-96 8,750.00
20,000 common stock Sep-96 5,000.00
85,000 common stock Oct-96 21,250.00
75,000 common stock Dec-96 18,750.00
------------ ------------ ------------
0.00 0.00 53,750.00
Cable & Company
Worldwide 5,000 common stock Sep-96 4,062.50
15,000 common stock Oct-96 12,187.50
5,000 common stock Nov-96 4,062.50
53,000 common stock Dec-96 43,062.50
100,000 common stock Jan-97 68,002.35 40,625.00
10,000 common stock Mar-97 5,165.00 4,062.50
------------ ------------ ------------
73,167.35 44,687.50 63,375.00
Cell Robotics
International, Inc. 20,000 common stock Oct-96 40,000.00
15,000 common stock Nov-96 30,000.00
------------ ------------ ------------
0.00 0.00 70,000.00
Corfacts, Inc. 200,000 common stock Jul-96 12,500.00 20,000.00 10,000.00
Enhanced Services 2,500 common stock Dec-96 9,162.50 11,250.00 8,125.00
6,000 common stock Jan-97 20,212.50 27,000.00
------------ ------------ ------------
29,375.00 38,250.00 8,125.00
Exploration Company,
The 7,500 common stock Aug-96 41,250.00
3,000 common stock Sep-96 16,500.00
7,500 common stock Oct-96 21,712.50 45,000.00 41,250.00
50,000 common stock Mar-97 250,000.00 300,000.00
------------ ------------ ------------
271,712.50 345,000.00 99,000.00
Healthwatch, Inc. 34,400 common stock Oct-96 68,800.00
45,000 common stock Dec-96 90,000.00
------------ ------------ ------------
0.00 0.00 158,800.00
Image Matrix 10,000 units (1com/1wrnt)Jun-96 57,500.00 28,125.00 33,750.00
J T's Restaurants 1,500 common stock Dec-96 3,187.50
Laser Recording
Systems, Inc. 100,000 common stock Jun-95 5,050.00 2,000.00 2,000.00
Organic Solutions, Inc. 50,000 common stock Feb-97 50,402.35 43,750.00
Pacific Biometrics, Inc. 7,500 common stock Oct-96 36,252.00 15,000.00 23,437.50
5,000 common stock Feb-97 17,343.75 10,000.00
7,500 warrants Oct-96 1,406.25
------------ ------------ ------------
53,595.75 25,000.00 24,843.75
Poore Brothers 4,000 common stock Dec-96 14,000.00 12,000.00 14,250.00
Progress Software 1,000 common stock Dec-96 19,750.00
Racom Systems, Inc. 10,000 common stock Mar-97
10,000 warrants Mar-97 0.00
------------ ------------ ------------
0.00
Redwood Broadcasting,
Inc. 5,000 common stock Feb-97 0.00
S&P 500 10 puts Dec '97 550 Jul-96 10,530.54 1,500.00 5,875.00
10 puts Dec '97 550 Aug-96 11,291.41 1,500.00 5,875.00
20 puts Dec '97 550 Sep-96 16,852.35 3,000.00 11,750.00
40 puts Dec '97 600 Dec-96 40,120.00 17,000.00 33,000.00
------------ ------------ ------------
78,794.30 23,000.00 56,500.00
S2 Golf, Inc. 20,825 common stock Jul-96 19,523.44
Shiva Corporation 2,630 common stock Dec-96 0.00 23,012.50 91,098.38
Shopsmith 10,000 common stock Sep-96 23,750.00 24,375.00 25,000.00
10,000 common stock Oct-96 23,750.00 24,375.00 25,000.00
------------ ------------ ------------
47,500.00 48,750.00 50,000.00
Tampa Bay Corporation 10,000 common stock Sep-96 13,750.00
5,000 common stock Dec-96 10,156.00 3,750.00 6,785.00
10,000 common stock Jan-97 9,525.00 7,500.00
------------ ------------ ------------
19,681.00 11,250.00 20,535.00
TELS Corporation 20,000 common stock Aug-96 12,812.50 10,625.00 9,376.00
10,000 common stock Sep-96 5,937.50 5,312.50 4,688.00
------------ ------------ ------------
18,750.00 15,937.50 14,064.00
Topro, Inc. 2,500 common stock Sep-96 0.00 3,281.00 6,250.00
2,500 common stock Nov-96 0.00 3,281.00 6,250.00
2,500 common stock Dec-96 0.00 3,281.00 6,250.00
2,500 common stock Jan-97 0.00 3,281.00
5,000 common stock Feb-97 0.00 6,562.50
35,000 common stock Mar-97 52,743.85 45,937.50
5,000 common stock Mar-97 7,343.75 6,562.50
------------ ------------ ------------
60,087.60 72,186.50 68,750.00
Whitewing Labs 20,000 common stock Jan-97 31,350.00 15,000.00
Total Unrestricted Securities 978,040.85 887,949.00 945,677.07
------------ ------------ ------------
NOTES RECEIVABLE:
- ----------------
Columbine Home
Sales, LLC* Note Receivable, 10% Dec-95 0.00 5,814.06 5,814.06
Damach, Inc. Note Receivable, 12%,
due 3/31/97 Oct-96 32,500.00 32,500.00 32,500.00
Phil Georgeson Note Receivable, 12%,
due on demand Aug-96 9,962.78 9,962.78 15,091.25
Global Casinos, Inc.* Note Receivable, 8%,
due 11/1/98 Nov-96 175,000.00 175,000.00 175,000.00
Note Receivable, 9%,
due on demand Mar-97 40,843.70 40,843.70
------------ ------------ ------------
215,843.70 215,843.70 175,000.00
Kinetiks.com* Note Receivable, 10%,
due 3/30/97 Feb-97 25,000.00 25,000.00
NS Properties Note Receivable, 8%,
due 1/2/98 Jan-97 20,000.00 20,000.00
Marco Foods, Inc.* Note Receivable, 12%,
due on demand Jan-97 97,550.00 97,550.00
Total Other Securities 400,856.48 406,670.54 228,405.31
------------ ------------ ------------
TOTAL INVESTMENTS 2,588,303.55 2,451,352.43 2,154,497.38
- ----------------- ============ ============ ============
* These entities are considered to be affiliated companies as a result of the Company's investment and/or
position on entity's Board of Directors at December 31, 1996. Securities may be subject to some resale
restrictions due to the Company being an affiliate.
** 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 held by the Company.
</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
March 31, 1997 March 31, 1996
(Unaudited) (Unaudited)
------------------ ------------------
<S> <C> <C>
INVESTMENT INCOME:
Rental income $ 51,247 $ 37,916
Consulting and other services 152 5,700
Interest and dividends 12,565 181
------------ ------------
Total Income/Revenue 63,963 43,797
------------ ------------
Expenses:
Wages and salaries 36,171 43,066
Professional fees 4,293 15,166
Custodian fees 3,559 -0-
Directors fees 2,000 -0-
Interest 11,253 12,968
Travel and entertainment 10,720 4,181
Office 32,111 11,904
Building expenses 33,481 23,273
Investment expenses 8,103 594
Donations 2,422 15
------------ ------------
144,113 111,167
Net investment loss $ 80,150) $ (67,370)
Net realized gain from investments 90,065 97,190
Net realized gain from sale of building 388,476
------------ ------------
478,541 97,190
------------ ------------
Net unrealized appreciation
(depreciation) of investments:
Beginning of year (20,322) 77,017
End of period (136,951) (106,134)
------------ ------------
Net unrealized depreciation of
investments (116,629) (183,151)
Net gain (loss) from investments $ 361,912 $ (85,961)
============ ============
Net increase (decrease) in net assets
resulting from operations $ 281,762 $ (153,331)
============ ============
Per share amounts:
Net investment loss $(0.12) $(0.10)
Net realized gain from investments 0.74 0.15
Net unrealized depreciation of
investments (0.18) (0.28)
------------ ------------
$ 0.44 $ (0.23)
============ ============
</TABLE>
<PAGE>
<PAGE>
<TABLE>
THE ROCKIES FUND, INC.
Statements of Stockholders' Equity
Three Months Ended March 31, 1997 and
Years Ended December 31, 1996 and 1995
<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, 1995 $6,403 $2,901,243 $(1,464,614) $(212,485) $ 77,017 $1,307,564
====== ========== ============ ========== ========== ===========
Net investment loss -- -- (428,689) -- -- (428,689)
Net realized gain on
sale of investments -- -- -- 1,549,196 -- 1,549,196
Unrealized net depreciation
of investments -- -- -- -- (97,339) (97,339)
------ ---------- ------------ ---------- ---------- -----------
BALANCES AT
DECEMBER 31, 1996 $6,403 $2,901,243 $(1,893,303) $1,336,711 $ (20,322) $2,330,732
====== ========== ============ ========== ========== ===========
Net investment loss -- -- (80,150) -- -- (80,150)
Net realized gain
on sale of investments -- -- -- 478,541 - 478,541
Unrealized net depreciation
of investments -- -- -- -- (116,629) (116,629)
------ ---------- ------------ ---------- ---------- -----------
BALANCES AT
MARCH 31, 1997 $6,403 $2,901,243 $(1,973,453) $1,815,252 $(136,951) $2,612,494
====== ========== ============ ========== ========== ===========
</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
March 31, 1997 March 31, 1996
(Unaudited) (Unaudited)
------------------ -----------------
<S> <C> <C>
Increase (decrease) in net assets
from investment activities:
Net investment loss $ (80,150) $ (67,370)
Net realized gain from investments 90,065 97,190
Net realized gain from building 388,476
Net unrealized depreciation of
investments (116,629) (183,149)
------------ ------------
Net increase (decrease) in net
assets from investment activities 281,762 (153,329)
Net assets at beginning of year 2,330,732 1,307,564
------------ ------------
Net asset at end of year $ 2,612,494 $ 1,154,235
============ ============
</TABLE>
<PAGE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
-----------------------------------------------------------
(a) Organization and Basis of Presentation.
--------------------------------------
The Rockies Fund, Inc. (the "Fund" or 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 Fund is registered under the
Investment Fund Act of 1940 as a business development company.
The interim unaudited financial statements have been prepared by the
Rockies Fund, Inc. and, in the opinion of management, reflect all material
adjustments which are necessary to a fair statement of results of the interim
periods presented. Such adjustments consisted only of normal recurring items
(except as discussed in Note 3). Certain information and footnote disclosure
made in the last annual report on Form 10-K have been condensed or omitted for
the interim statements. These statements should be read in conjunction with
the financial statements and notes thereto included in Form 10-K for the year
ended December 31, 1996. The results of the interim periods are not
necessarily indicative of results which may be expected for any other interim
period or for the full years.
(b) Investment Valuation and Transactions.
-------------------------------------
Securities listed or traded on an exchange are valued at their last
sales price on the exchange where the securities are principally traded.
Securities reported on the NASDAQ National Market System are valued at the last
sales price on the valuation date or, absent a last sales price, at the closing
bid price on the valuation date. Securities traded in the over-the-counter
market are valued at the last bid price, based upon quotes furnished by
independent market makers for such securities. Investments in notes receivable
are valued at net realizable value. The Fund performs on-going evaluations
regarding collectability of receivables and provides allowances for potential
losses.
In the absence of readily ascertainable market values, investments in
restricted securities without quoted market prices are carried at estimated
fair value as determined by the Fund's Board of Directors (the "Board"). 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 for
the investments existed, and the differences could be material.
Securities transactions are accounted for on a trade date basis.
Where possible, realized gains and losses on the sales of investments are
determined using the specific identification method. If the specific
identification method cannot be utilized, realized gains and losses are
determined using the first in-first out method. Substantially all of the
Fund's investments are non-income producing.
(c) Income Taxes.
------------
As a business development Fund, the Fund 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.
Income tax payable consists of approximately $100,000 of federal and
$18,000 of state taxes resulting from the 1996 net realized gain from sale of
investments.
2. PORTFOLIO SECURITIES
--------------------
AMERICAN EDUCATIONAL PRODUCTS, INC.
-----------------------------------
The Fund, at March 31, 1997, held 200,000 shares of American Educational
Products, Inc. common stock, which shares are restricted as to sale, non-
income producing and have been valued by the Board of Directors at their quoted
market value of $.625 per share or $125,000. The Fund also held at March 31,
1997 common stock purchase warrants exercisable to purchase an additional
200,000 shares of common stock of American Educational Products, Inc. at an
exercise price of $1.00 per share. The Fund valued these warrants at $0. The
Fund does have certain registration rights relating to these shares and
warrants.
ASTEA INTERNATIONAL
-------------------
The Fund, at March 31, 1997, held 20,000 shares of Astea International
common stock, which shares are unrestricted as to sale, non-income producing,
and have been valued at their quoted market price of $4.00 per share or
$80,000.
BEAR STAR (fka COLUMBINE HOME SALES, LLC.)
------------------------------------------
The Fund 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. The Fund also holds a note receivable from Columbine Homes with
remaining amounts due of $5,814. The note accrues interest at the rate of 10%
per year, and is due on demand.
CABLE AND COMPANY WORLDWIDE
---------------------------
The Fund, at March 31, 1997, held 110,000 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 $.40625 per share
or $44,687.50.
CORFACTS, INC.
--------------
The Fund, at March 31, 1997, held 200,000 shares of Corfacts, Inc. common
stock, which shares are unrestricted as to sale, non-income producing, and have
been valued at their quoted market price of $.10 per share or $20,000.
COVA TECHNOLOGIES
-----------------
The Fund at March 31, 1997 held 917 shares of Cova Technologies common
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.
DAMACH
------
The Fund, at March 31, 1997 held a note receivable from Damach in the
amount of $32,500 which accrues interest at the rate of 12% per year and was
originally due on March 31, 1997. An extension agreement was signed on March
4, 1997 to extend this promissory note receivable to a month to month basis or
until the Fund makes a written request for payment.
ENHANCED SERVICES, INC.
-----------------------
The Fund, at March 31, 1997, held 8,500 shares of Enhanced Services, Inc.
common stock which shares are unrestricted as to sale, non-income producing and
have been valued at their quoted market price of $4.50 per share or $38,250.
EXPLORATION COMPANY, THE
------------------------
The Fund, at March 31, 1997, held 57,500 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 $6.00 per share or
$345,000.
GEORGESON, PHIL
---------------
The Fund, at March 31, 1997 held a note receivable from Phil Georgeson in
the amount of $9,962.78. The note is secured by 10,500 shares of National
Equities Holdings, Inc. common stock, accrues interest at the rate of 12% per
year and is due on demand.
GLOBAL CASINOS, INC.
--------------------
The Fund, at March 31, 1997, held 17,680 shares of Global Casinos, Inc.
common stock, after giving effect to a 1-for-10 reverse split. The 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 $3.625 per share, or $64,090.01. The Fund, at March 31, 1997,
also held a note receivable from Global Casinos, Inc. in the amount of
$175,000, which note is unsecured, accrues interest at the rate of 8% per year,
and is due November 1, 1998. Said note is convertible into shares of Global
Casinos, Inc. common stock at a conversion price of $5.00 per share anytime
after November 1, 1997. The Fund holds a second note receivable from Global
Casinos in the amount of $40,843.70, which note is unsecured, accrues interest
at the rate of 9% per year, is due on demand, and is convertible into Global
Casinos common stock at $5.00 per share. The Fund also owns 35,000 Global
warrants exercisable at $6.00, 35,000 warrants exercisable at $7.00 and 35,000
warrants exercisable at $8.00 per share, all of which expire as of February 1,
1998 and are valued at $0.
GUARDIAN TECHNOLOGIES, INC.
---------------------------
The Fund, at March 31, 1997 held 296,600 shares of Guardian Technologies
common stock, which shares are restricted due to the Company being an
affiliate, non-income producing, and have been valued at their quoted market
price of $.71875 per share or $213,181.25. The Fund also held warrants
exercisable to purchase an additional 411,000 shares of Guardian Technologies
common stock, which warrants are also restricted due to the Company being an
affiliate, non-income producing, and have been valued at their quoted market
price of $.0625 each or $25,687.
IMAGE MATRIX CORPORATION
------------------------
The Fund, at March 31, 1997 held 10,000 units of Image Matrix Corporation,
which units are unrestricted as to sale, non-income producing, and have been
valued at their quoted market price of $2.8125 per unit or $28,125.
KINETIKS.COM
------------
The Fund, at March 31, 1997 held 103,500 shares of Kinetiks.com common
stock, which shares are restricted as to sale due to the Company being an
affiliate, non-income producing, and have been valued at their quoted market
price of $.375 per share or $38,812.50. The Fund also held warrants to
purchase and additional 100,000 shares of Kinetics.com common stock at an
exercise price of $.25 per share. The warrants have been valued by the Board
of Directors at $.125 or $12,500 which represents the difference between the
exercise price of the warrants and the market price of the common stock. The
Fund also held a note receivable in the amount of $25,000 which note is
unsecured, accrues interest at the rate of 10% per year, and was due on March
30, 1997. The note provides for a default interest rate of 18% and an
additional 50,000 warrants for each 30-day period that it goes unpaid.
LAND RESOURCE CORPORATION
-------------------------
The fund, at March 31, 1997 held 10,000 shares of Land Resource
Corporation common stock, which shares are restricted as to sale, non-income
producing, and have been valued by the Board of Directors at their cost of
$1.00 each or $10,000.
LASER RECORDING SYSTEMS, INC.
-----------------------------
The Fund, at March 31, 1997, held 100,000 shares of Laser Recording
Systems, Inc. common stock, which shares are unrestricted as to sale, non-
income producing and have been valued at their quoted market price of $.02 per
share or $2,000.
LOAN OAK VINEYARDS, INC.
------------------------
The Fund, at March 31, 1997 held 35,000 share of Loan Oak Vineyards common
stock, which shares are restricted as to sale, non-income producing, and have
been valued by the Board of Directors at their cost of $1.00 each or $35,000.
MARCO FOODS, INC.
-----------------
The Fund, at March 31, 1997 held a note receivable from Marco Foods in the
amount of $97,550, which note is unsecured, accrues interest at the rate of 12%
per year and is due on demand.
NS PROPERTIES
-------------
The Fund, at March 31, 1997 held a note receivable from NS Properties in
the amount of $20,000, which note is unsecured, accrues interest at the rate of
8% per year and is due January 2, 1998.
NAVIDEC, INC.
-------------
The Fund, at March 31, 1997, held 1,811 shares of Navidec common stock,
which shares are unrestricted as to sale, non-income producing, and have been
valued at their quoted market price of $5.125 per share or $9,281.38. The Fund
also held warrants to purchase an additional 6,072 shares of common stock,
which warrants are unrestricted as to sale, non-income producing, and have been
valued at their quoted market price of $.625 per share or $3,795.
OPTIMAX INDUSTRIES, INC. (fka PLANTS FOR TOMORROW, INC.)
--------------------------------------------------------
At March 31, 1997, the Fund held 135,191 shares of Optimax Industries,
Inc. common stock, which shares are restricted as to sale due to a lock-up
agreement and the Company being an affiliate, are non-income producing, and
have been valued at their quoted market price of $2.75 per share or
$371,775.25. The Fund also held warrants to purchase an additional 12,500
shares of Optimax Industries, Inc. common stock, which warrants are valued at
their quoted market price of $.75 each or $9,375.
ORGANIC SOLUTIONS, INC.
-----------------------
The Fund, at March 31, 1997 held 50,000 share of Organic Solutions common
stock, which shares are unrestricted as to sale, non-income producing, and have
been valued at their quoted market price of $.875 per share or $$43,750.
PACIFIC BIOMETRICS, INC.
------------------------
The Fund, at March 31, 1997, held 12,500 shares of Pacific Biometrics,
Inc. common stock, which shares are unrestricted as to sale, non-income
producing and have been valued at their quoted market price of $1.875 or
$25,000.
POORE BROTHERS, INC.
--------------------
The Fund, at March 31, 1997, held 4,000 shares of Poore Brothers, Inc.
common stock, which shares are unrestricted as to sale, non-income producing
and have been valued at their quoted market price of $2.875 or $12,000.
RACOM SYSTEMS, INC.
-------------------
The Fund, at March 31, 1997 held 10,000 share of Racom Systems common
stock, which shares are unrestricted as to sale, non-income producing, and have
been valued at their quoted market price of $2.75 per share or $27,500. The
Fund also held warrants to purchase an additional 10,000 shares of common
stock, which warrants are unrestricted as to sale, non-income producing, and
have been valued at their quoted market price of $.50 each or $5,000.
REDWOOD BROADCASTING, INC.
--------------------------
The Fund, at March 31, 1997 held 5,000 shares of Redwood Broadcasting
common stock, which shares are unrestricted as to sale, non-income producing,
and have been valued by the Board of Directors at $1.50 per share or $7,500.
S&P 500
-------
The Fund, at March 31, 1997, held 4,000 puts against the S&P 500 at 550.
The puts are unrestricted as to sale and expire on December 20,1997. They have
been valued at their quoted market price of $1.50 or $6,000. The Fund, at March
31, 1997, also held 4,000 puts against the S&P 500 at 600. The puts are
unrestricted as to sale and expire on December 20,1997. They have been valued
at their quoted market price of $4.25 or $17,000.
SHIVA CORPORATION
-----------------
The Fund, at March 31, 1997, held 2,630 shares of Shiva Corporation common
stock, which shares are unrestricted as to sale, non-income producing and have
been valued at their quoted market price of $8.75 per share or $23,012.50. The
shares had previously been held in escrow pending the completion of certain
performance requirements by Airsoft, Inc.
SHOPSMITH
---------
The Fund, at March 31, 1997, held 20,000 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 $2.4375 per share or $48,750.
SOUTHSHORE CORPORATION
----------------------
At March 31, 1997, the Fund 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 $.50 per share or $8,700.
TAMPA BAY CORPORATION
---------------------
The Fund, at March 31, 1997, 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 $.75 per share or $11,250.
TELS CORPORATION
----------------
The Fund, at March 31, 1997, 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 $.53125 per share or $15,937.50.
TOPRO, INC.
-----------
The Fund, at March 31, 1997, held 55,000 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 $1.3125 per share or $72,186.50.
TRAINING DEVICES, INC.
----------------------
The Fund, at March 31, 1997 held 20,000 share of Training Devices common
stock, which shares are restricted as to sale, non-income producing, and have
been valued by the Board of Directors at their cost of $1.25 per share or
$25,000.
USASURANCE GROUP
----------------
The Fund, at March 31, 1997, held 61,500 shares of Usasurance Group common
stock, which shares are restricted as to sale due to the Company being an
affiliate, non-income producing, and have been valued at their quoted market
price of $3.00 or $184,500.
WHITEWING LABS
--------------
The Fund, at March 31, 1997 held 20,000 share of Whitewing Labs common
stock, which shares are unrestricted as to sale, non-income producing, and have
been valued at their quoted market price of $.75 per share or $15,000.
3. REAL ESTATE OPERATIONS
----------------------
Effective March 31, 1997, the Rockies Fund, Inc. consummated the sale of
its 26,000 square foot commercial office building located at 4465 Northpark
Drive, Colorado Springs, Colorado (the "Building"). The sale price for the
building was $1,080,000, which was paid in cash at closing. The proceeds
received were utilized in part to pay approximately $452,000 of mortgage and
other debt. This transaction resulted in a net gain of approximately $388,000.
In a concurrent transaction structured to qualify as a tax-free
reorganization under Section 1031 of the Internal Revenue Code of 1986, as
amended, the Fund, on April 1, 1997 consummated the purchase of 5 acres of
undeveloped commercial real estate located at 3210 Woodman Road, Colorado
Springs, Colorado (the "Property"). The Fund plans to undertake a phased
development of two commercial office buildings on the Property which will, upon
completion, consist of an aggregate of 55,000 square feet of commercial office
space. The purchase price for the Property was $390,000, which was paid in
cash on April 1, 1997 at the time of closing utilizing a portion of the
proceeds realized by the Fund from the sale of the Building. The Fund intends
to hold this new real estate as a wholly owned subsidiary called Strategic
Properties, Inc..
The Fund plans to occupy its current executive office space located in the
Building under a lease with the new owners, Northpark, L.L.C. for $900 a month
until the first phase of the commercial building development on the Property
located on Woodman Road is completed.
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 Fund.
4. CONTINGENCIES
-------------
Securities and Exchange Commission Investigation:
During 1996 and 1995, the Fund received requests for information from
the U.S. Securities and Exchange Commission ("SEC") related to an investigation
by the SEC which began in 1994 into various matters, including the
administrative and record keeping practices of the Fund, its securities trading
activities and those of one of its officers.
In September 1996, the Fund received notification from the SEC that
the SEC staff was planning to recommend that an enforcement action be brought
against the Fund, its president, and each of its directors due to certain
alleged violations of federal securities laws.
The SEC invited the Fund to make a submission setting forth the
Fund's position and arguments regarding the SEC staff's planned recommendation.
The Fund did so in October 1996, and, at the SEC's request, the Fund
supplemented its submission in December 1996. The SEC has not responded to the
Fund's submissions and has not advised the Fund of any timetable for the SEC
staff to make its final determination about whether to recommend an enforcement
action.
Management is unable to predict, with any certainty, the outcome of
the investigation, or the ultimate effect on the Fund.
<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 - MARCH 31, 1997 COMPARED TO DECEMBER 31, 1996
- -----------------------------------------------------------------------------
During the three months ended March 31, 1997, the Fund liquidated
certain securities, including 2,500 shares of Alouette Cosmetics, 215,000
shares of Brassie Golf, 78,000 shares of Cable & Co., 35,000 shares of Cell
Robotics International, 10,500 shares of The Exploration Co., 79,400 shares of
Healthwatch, 1,500 shares of JT's Restaurants, 7,500 warrants of Pacific
Biometric, 1,000 shares of Progress Software, 20,825 shares of S2 Golf and
10,000 shares of Tampa Bay. The Fund also purchased and subsequently sold
several securities within the three months ended March 31, 1997 for a total
realized gain of $7,253. The proceeds received from the liquidation of these
securities allowed the Fund to add a limited number of new investments to the
Fund's portfolio, including the following:
During the three months ended March 31, 1997, the Fund acquired
296,000 shares and 411,000 warrants of Guardian Technologies, Inc. for a total
investment of $161,455; 100,000 warrants of Kinetiks.com for a total investment
of $0.00; 10,000 shares of Land Resources Corporation for a total investment of
$10,000; 35,000 shares of Lone Oak Vineyards, Inc. for a total investment of
$35,000; 12,144 shares of Navidec for a total investment of $7,705; 20,000
shares of Training Devices, Inc. for a total investment of $25,000; 2,500
shares of Usassurance Group for a total investment of $8,750; 110,000 shares of
Cable & Company Worldwide for a total investment of $73,167; 6,000 shares of
Enhanced Services for a total investment of $20,213; 50,000 shares of The
Exploration Company for a total investment of $250,000; 50,000 shares of
Organic Solutions, Inc. for a total investment of $50,402; 5,000 shares of
Pacific Biometric, Inc. for a total investment of $17,344; 10,000 shares and
10,000 warrants of Racom Systems for a total investment of $47,500; 5,000
shares of Redwood Broadcasting for a total investment of $0.0; 10,000 shares of
Tampa Bay for a total investment of $9,525; 47,500 shares of Topro, Inc. for a
total investment of $60,088; and 20,000 shares of Whitewing Labs for a total
investment of $31,350.
The Fund has added 17 investments to its portfolio contributing to
the increased value of restricted and unrestricted securities from $1,841,093
as of December 31, 1996 to $2,044,683 as of March 31, 1997, an increase of
$203,590 or 11% .
Notes receivable, current, increased from $138,404 as of December
31, 1996 to $231,671 as of March 31, 1997, an increase of $93,267 or 67%, due
primarily to the Fund receiving payments or shares for $85,000 and subsequently
acquiring $183,393 in new notes. As a result accrued interest receivable
increased approximately 37% during the 1st Quarter 1997. Cash held by related
parties and other increased from $499,404 as of December 31, 1996 to $614,157
as of March 31, 1997, an increase of $114,753 or 22%, $390,000 of cash being
held by related parities was held in escrow as of March 31, 1997 for the
purchase of the undeveloped commercial real estate located at 3210 Woodman
Road, Colorado Springs, Colorado.
Total current assets therefor increased from $2,530,571 at December
31, 1996 to $2,919,818 at March 31, 1997, an increase of $389,247 or 15%.
During the quarter ended March 31, 1997, the Fund sold its office
building for a net gain. As a result, total property and equipment decreased
from $764,521 as of December 31, 1996 to $8,687 as of March 31, 1997, a
decrease of $755,834 or 98%.
The Fund, as of March 31, 1997 had a note receivable outstanding
with its affiliate, Global Casinos, for $175,000, accruing interest at 8% and
convertible to Global Casinos shares at $5.00 per share.
Based on the foregoing, total assets decreased from $3,470,092 on
December 31, 1996 to $3,103,505 on March 31, 1997, a decrease of $366,587 or
11%.
Total liabilities decreased significantly from $1,139,360 as of
December 31, 1996 to $491,011 as of March 31, 1997, a reduction of $648,349 or
57%. The reduction in liabilities were mainly contributable to the sale
proceeds of the Northpark office building and utilizing investment sale
proceeds to pay off debt. Payables to related parties were paid off by March
31, 1997 as had a balance of $153,566 as of December 31, 1996. Payables for
investment securities were reduced by $16,822 or 14%, accrued liabilities
reduced $41,601 or 51% and accrued interest payable reduced $3,322 or 45%.
Liabilities related to the sale of the Northpark office building were mortgage
note payable, current portion, security deposits, other liabilities (due to
lessee) and the State Bank and Trust line of credit secured by the Fund's
office building, reducing liabilities by $518,190.
The Fund still holds a $75,000 line of credit with a balance of
$74,500 as of March 31, 1997 that accrues interest at 9.5% secured by the
Fund's Optimax Industries security.
Offsetting against the reduction in liabilities was an increase in
account payable trade of $25,073 or 108% and notes payable other by $60,139 or
155%. Accrued income taxes remained outstanding as of March 31, 1997.
Based on the foregoing, Net Asset Value increased during the three
months ended March 31, 1997, from $2,330,732 at December 31, 1996, to
$2,612,494 at March 31, 1997, an increase of $281,762 or nearly 12%. Net
assets per common share increased from $3.64 per share at December 31, 1996, to
$4.08 per share on March 31, 1997, an increase of $0.44.
Management knows of no trends or demands, commitments, events or
uncertainties which will result in the Fund's liquidity or capital resources
materially increasing or decreasing.
RESULTS OF OPERATIONS THREE MONTHS ENDED MARCH 31, 1997 COMPARED TO THREE
MONTHS ENDED MARCH 31, 1996
- -----------------------------------------------------------------------------
The Fund's income/revenue for the three months ended March 31, 1997,
was $63,963, an increase of $20,166 or 46% compared with the same period in
1996. This increase in income/revenue was due to the Fund's office building
being fully leased and interest earned on the proceeds from the sale of
securities. Expenses increased from $111,167 as of March 31, 1996 to $144,116
as of March 31, 1997, an increase of $32,949 or 30%. Contributing to the
increase in expenses were an increase in custodian fees of $3,559, directors
fees of $2,000, travel and entertainment of 156%, office expenses of 170%,
building expenses of 44%, investment expense of 1,264% and donations of $2,410.
The increase in expense were mainly attributed to brokerage fees expensed in
the 1st quarter of 1997, a board of directors meeting held during the 1st
quarter of 1997, an increase in travel related to venture capital investments,
an increase in office expenses, mainly advertising, increased building expenses
due to the building being fully leased and closing costs related to the sale,
an increase in investment expenses due to investor relations expenses, and
donations made during quarter 1, 1997.
Based on the foregoing, the Fund reported a net investment loss for
the three months ended March 31, 1997, of $(80,153), an increase of 19% when
compared to the net investment loss of $(67,370) incurred during the same
period in 1996.
The Fund's net realized gain from sales of investments and the sale
of the Northpark office building was $478,541 as of March 31, 1997, an increase
of $381,351 or 392%, compared to a realized gain of $97,190 as of March 31,
1996. Net realized gain from sales of investments were mainly contributable to
the gain on The Exploration Co. of $43,069, the Healthwatch gain of $26,279 and
to the gain on Cable & Company of $15,903. The sale of the Northpark office
building provided the Fund with a net realized gain of $338,476. Unrealized net
depreciation relating to the current market value of securities being held by
the Fund increased $66,542 or 36% from an unrealized net loss of $(183,149) as
of March 31, 1996 to an unrealized net loss of $(116,607) as of March 31, 1997.
Management knows of no trends or demands, commitments, events or
uncertainties which will result in the Fund's liquidity or capital resources
materially increasing or decreasing.
<PAGE>
<PAGE>
PART 1. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
During the beginning of 1996, the Fund received requests for
information from the United States Securities and Exchange Commission ("SEC")
related to an investigation begun by the SEC during 1994 into various matters,
including the administrative and record keeping practices of the Fund, its
securities trading activities and those of its officers and directors. In
September 1996, the Fund was notified by the Commission's Staff that it intends
to request that the Commission commence an administrative proceeding against
the Fund and its directors based upon certain transactions in securities
formerly included in the Fund's securities portfolio. The Fund has responded
to Commission with a written submission which sets forth why there exists no
basis in fact or law for such a proceeding. It is impossible to predict whether
the staff will recommend a proceeding against the Fund or any of its directors,
and if such a recommendation is made, whether the Commission will authorize the
institution of a proceeding. There can be no assurance of the outcome of this
matter or the ultimate effect on the Fund's financial position.
Other than the foregoing, the Fund is not a party to any
material pending legal proceedings.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULT UPON SENIOR SECURITIES
There have been no defaults on any securities. The Fund has no
obligations with regard to dividends and no preferred stock is outstanding.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
EXHIBITS
--------
27.0 Financial Data Schedule for Investment Companies
REPORTS ON FORM 8-K
-------------------
On April 15, 1997, the Company filed a Current Report on Form-K
dated March 31, 1997, related to the sale by the Company of a 26,000 square
foot commercial office building located at 4465 Northpark Drive, Colorado
Springs, Colorado, and the acquisition, in a concurrent transaction structured
to qualify as a tax-free reorganization under Section 10315 of the Internal
Revenue Code of 1986, as amended, of 5 acres of undeveloped commercial real
estate located at 3210 Woodman Road, Colorado Springs, Colorado, upon which the
Company plans to develop two commercial office buildings.
That report included:
Item 2: Acquisition and Disposition of Assets
<PAGE>
Item 7: Financial Statements and Exhibits
(b) Proforma Financial Information
(c) Exhibits
10.1 Commercial Contract to Buy and Sell
Real Estate dated February 24, 1997
10.3 Seller's Closing Schedule
10.4 Buyer's Closing Schedule
<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: May 15, 1997 By: /s/ Stephen G. Calandrella
----------------------- ----------------------------------
Stephen G. Calandrella, President
Dated: May 15, 1997 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 AND LIABILITIES AND STATEMENT OF OPERATIONS FOUND ON PAGES
4, 5 AND 14 OF THE COMPANY'S FORM 10-Q FOR THE THREE MONTHS ENDED MARCH 31, 1997
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1997
<INVESTMENTS-AT-COST> 2,419,118
<INVESTMENTS-AT-VALUE> 2,276,354
<RECEIVABLES> 548
<ASSETS-OTHER> 11,136
<OTHER-ITEMS-ASSETS> 815,467
<TOTAL-ASSETS> 3,103,505
<PAYABLE-FOR-SECURITIES> 148,225
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 342,786
<TOTAL-LIABILITIES> 491,011
<SENIOR-EQUITY> 2,612,494
<PAID-IN-CAPITAL-COMMON> 2,901,243
<SHARES-COMMON-STOCK> 640,256
<SHARES-COMMON-PRIOR> 640,256
<ACCUMULATED-NII-CURRENT> (1,973,453)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1,815,252
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (136,951)
<NET-ASSETS> 2,612,494
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 12,565
<OTHER-INCOME> 152
<EXPENSES-NET> 144,113
<NET-INVESTMENT-INCOME> (80,150)
<REALIZED-GAINS-CURRENT> 478,541
<APPREC-INCREASE-CURRENT> (116,629)
<NET-CHANGE-FROM-OPS> 281,762
<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> 281,762
<ACCUMULATED-NII-PRIOR> (1,893,303)
<ACCUMULATED-GAINS-PRIOR> 1,336,711
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 11,253
<GROSS-EXPENSE> 144,113
<AVERAGE-NET-ASSETS> 2,471,613
<PER-SHARE-NAV-BEGIN> 3.64
<PER-SHARE-NII> (.12)
<PER-SHARE-GAIN-APPREC> .56
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 4.08
<EXPENSE-RATIO> .05
<AVG-DEBT-OUTSTANDING> 815,186
<AVG-DEBT-PER-SHARE> 1.27
</TABLE>
