<PAGE> PAGE 1
000 B000000 09/30/99
000 C000000 0000731266
000 D000000 N
000 E000000 NF
000 F000000 Y
000 G000000 Y
000 H000000 N
000 I000000 3.0
000 J000000 U
001 A000000 COMBINED PENNY STOCK FUND, INC.
001 B000000 811-03888
001 C000000 7195932111
002 A000000 6180 LEHMAN DRIVE, SUITE 103
002 B000000 COLORADO SPRINGS
002 C000000 CO
002 D010000 80918
003 000000 N
004 000000 N
005 000000 N
006 000000 N
007 A000000 N
062 A000000 N
062 B000000 0.0
062 C000000 0.0
062 D000000 0.0
062 E000000 0.0
062 F000000 0.0
062 G000000 0.0
062 H000000 0.0
062 I000000 0.0
062 J000000 0.0
062 K000000 0.0
062 L000000 0.0
062 M000000 0.0
062 N000000 0.0
062 O000000 0.0
062 P000000 0.0
062 Q000000 0.0
062 R000000 0.0
071 A000000 215
071 B000000 1288
071 C000000 652
071 D000000 33
072 A000000 12
074 N000000 1328
074 T000000 1327
075 A000000 0
075 B000000 1242
077 A000000 Y
080 A000000 NATIONAL UNION FIRE INSURANCE COMPANY
080 C000000 425
<PAGE> PAGE 2
081 A000000 Y
081 B000000 1
082 A000000 N
082 B000000 0
083 A000000 N
083 B000000 0
084 A000000 N
084 B000000 0
085 A000000 N
SIGNATURE STAN PITTMAN
TITLE CHIEF FINANCIAL OFF.
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<CIK> 0000731266
<NAME> COMBINED PENNY STOCK FUND, INC.
<SERIES>
<NUMBER> 01
<NAME> COMBINED PENNY STOCK FUND, INC.
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-START> OCT-01-1998
<PERIOD-END> SEP-30-1999
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 1165874
<INVESTMENTS-AT-VALUE> 375204
<RECEIVABLES> 8357
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 944299
<TOTAL-ASSETS> 1327860
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 972
<TOTAL-LIABILITIES> 972
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 6014421
<SHARES-COMMON-STOCK> 51921000
<SHARES-COMMON-PRIOR> 54561000
<ACCUMULATED-NII-CURRENT> (3023302)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (873561)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (790670)
<NET-ASSETS> 1326888
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 46046
<OTHER-INCOME> 0
<EXPENSES-NET> 133392
<NET-INVESTMENT-INCOME> (87346)
<REALIZED-GAINS-CURRENT> 269007
<APPREC-INCREASE-CURRENT> 84360
<NET-CHANGE-FROM-OPS> 266021
<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> 266021
<ACCUMULATED-NII-PRIOR> (2935955)
<ACCUMULATED-GAINS-PRIOR> (1142569)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 133392
<AVERAGE-NET-ASSETS> 1242474
<PER-SHARE-NAV-BEGIN> .020
<PER-SHARE-NII> (.002)
<PER-SHARE-GAIN-APPREC> .008
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> .026
<EXPENSE-RATIO> 10.74
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
lEGAL PROCEEDINGS EX-99
Pursuant to an examination of the Fund by the Securities and Exchange Commission
("SEC"), the SEC has issued a letter to the Fund identifying various asserted
deficiencies and violations of rules and regulations. The Fund has reviewed the
asserted deficiencies and violations and is currently formulating its response.
The Fund's management does not believe that the outcome of these matters will
have a material impact on the Fund's financial condition or operations. However,
the ultimate outcome of these matters is not determinable at this time.
AUDITOR'S REPORT ON INTERNAL CONTROL EX-99.C1
To the Board of Directors and Shareholders,
Combined Penny Stock Fund, Inc.
In planning and performing our audit of the financial statements of Combined
Penny Stock Fund, Inc. (the Fund) for the year ended September 30, 1999 (on
which we have issued our report dated October 19, 1999), we considered its
internal control structure, including procedures for safeguarding securities, in
order to determine our auditing procedures for the purpose of expressing our
opinion on the financial statements and to comply with requirements of Form
N-SAR, not to provide assurance on the internal control structure.
The management of the Fund is responsible for establishing and maintaining an
internal control structure. In fulfilling this responsibility, estimates and
judgements by management are required to assess the expected benefits and
related costs of internal control structure policies and procedures. Two of the
objectives of an internal control structure are to provide management with
reasonable, but not absolute, assurance that assets are safeguarded against loss
from unauthorized use or disposition and that transactions are executed in
accordance with management's authorization and recorded properly to permit
preparation of financial statements in conformity with generally accepted
accounting principles.
Because of inherent limitations in any internal control structure, errors or
irregularities may occur and not be detected. Also, projection of any evaluation
of the structure to future periods is subject to the risk that it may become
inadequate because of changes in conditions or that the effectiveness of the
design and operation may deteriorate.
Our consideration of the internal control structure would not necessarily
disclose all matters in the internal control structure that might be material
weaknesses under standards established by the American Institute of Certified
Public Accountants. A material weakness is a condition in which the design or
operation of the specific internal control structure elements does not reduce to
a relatively low level the risk that errors or irregularities in amounts that
would be material in relation to the financial statements being audited may
occur and not be detected within a timely period by employees in the normal
course of performing their assigned functions. However, we noted no matters
involving the internal control structure, including procedures for safeguarding
securities, that we consider to be material weaknesses as defined above as of
September 30, 1999.
This report is intended solely for the information and use of management and the
Securities and Exchange Commission.
/s/Stockman Kast Ryan & Company, LLP
Stockman Kast Ryan & Company, LLP
Colorado Springs, Colorado
October 19, 1999
