SEMI ANNUAL REPORT
COLORADO
DOUBLE TAX-EXEMPT
BOND FUND
June 30, 1999
[LOGO]
600 17th Street, Suite 2610 S. Tower, Denver, Colorado 80202
Statewide Call Toll Free 1-800-279-4426
From the Denver Area Call (303) 623-7500
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<CAPTION>
COLORADO DOUBLE TAX- EXEMPT BOND FUND, INC.
SCHEDULE OF INVESTMENTS
SHORT- INTERMEDIATE PORTFOLIO
June 30, 1999
(Unaudited)
Face Bond Rating
Amount Moody's/S&P Market Value
- - ------- ----------- ------------
CERTIFICATES OF PARTICIPATION 12.90%
<S> <C> <C> <C>
100,000 Adams & Arapahoe Counties, Joint School District,
6.25%, 06/15/07 Aaa/AAA $ 105,641
20,000 Aims Junior College District,
6.40%, 12/01/00 A3/NR 20,040
10,000 Conejos & Alamosa County, School District RE1J,
7.40%, 12/01/10 NR/AA- 10,718
100,000 El Paso County, School District 38,
6.25%, 12/01/01 A/A2 104,026
20,000 Weld County, Administration Building Lease,
6.40%, 08/01/00 Baa1/NR 20,537
------------
TOTAL CERTIFICATES OF
PARTICIPATION (Cost $261,511) 260,962
------------
ESCROWED IN U.S. GOVERNMENT SECURITIES 6.57%
30,000 Adams County, Single Family Mortgage Series A,
8.875%, 08/01/04 AAA/NR 35,679
5,000 Arapahoe County, Single Family Mortgage,
Zero Coupon, 09/01/10 NR/AAA 2,812
30,000 Arvada,
8.00%, 12/01/03 AAA/AA- 34,352
10,000 Castle Pines Metropolitan District,
7.625%, 12/01/15 Aaa/AAA 10,657
40,000 Pueblo County, Hospital Facilities Series B,
7.50%, 09/01/01 NR/NR 40,673
20,000 Thornton Capital Appreciation,
Zero Coupon, 12/01/10 Aaa/AAA 8,602
TOTAL ESCROWED IN U.S. ------------
GOVERNMENT SECURITIES (Cost $133,004) 132,775
------------
GENERAL OBLIGATION BONDS 24.16%
County/City/Special District/School District 22.91%
80,000 Adams County, School District #12,
6.20%, 12/15/09 Aaa/AAA 85,503
25,000 Adams County, School District #12,
6.20%, 12/15/10 Aaa/AAA 26,564
40,000 Arrowhead Metropolitan District,
4.85%, 12/01/10 NR/NR 37,714
85,000 Boulder Valley, School District RE-2,
6.25%, 10/15/08 Aa3/AA 88,763
The accompanying notes are an integral part of these financial statements.
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COLORADO DOUBLE TAX- EXEMPT BOND FUND, INC.
SCHEDULE OF INVESTMENTS
SHORT- INTERMEDIATE PORTFOLIO
June 30, 1999
(Unaudited)
(Continued)
<TABLE>
Face Bond Rating
Amount Moody's/S&P Market Value
- - ------- ----------- ------------
<S> <C> <C> <C>
GENERAL OBLIGATION BONDS 24.16%
County/City/Special District/School District 22.90%
40,000 Broomfield, Capital Appreciation Series B,
Zero Coupon, 12/01/09 A1/NR 21,416
50,000 El Paso County, School District #20,
5.15%, 12/15/03 Aa3/AA- 51,451
100,000 Highlands Ranch Metropolitan District #3,
5.00%, 12/01/09 NR/A 98,837
50,000 Thornton,
6.05%, 12/01/06 Aaa/AAA 53,005
------------
463,253
Special Tax 1.25% ------------
25,000 Boulder Open Space Acquisition,
7.20%, 08/15/13 Aa1/AA+ 25,365
------------
TOTAL GENERAL OBLIGATION BONDS (Cost $496,426) 488,618
------------
REVENUE BONDS 54.44%
Education 1.32%
25,000 Colorado State Board Agriculture, Fort Lewis College,
6.50%, 10/01/06 Aaa/AAA 26,604
Hospital 15.82% ------------
25,000 Colorado Health Facilities, Craig Hospital,
4.90%, 12/01/03 A2/NR 25,353
195,000 Colorado Health Facilities, National Benevolent
Association, 4.60%, 02/01/03 Baa1/NR 194,064
100,000 University Hospital Authority, Series A,
4.90%, 11/15/08 Aaa/NR 100,490
------------
319,907
Housing 7.79% ------------
100,000 Colorado Housing Finance Authority, Single
Family Series A, 6.20%, 11/01/99 Aa1/AA+ 100,506
20,000 Colorado Housing Finance Authority, Single
Family Series AA, 5.05%, 11/01/07 Aa1/AA+ 20,229
35,000 Pueblo County Single Family Mortgage,
GNMA/FNMA Backed Series A, 6.30%, 06/01/03 NR/AA- 36,899
------------
157,634
Industrial Development 9.47% ------------
120,000 Boulder County Industrial Development, May
Department Stores, 6.25%, 09/01/07 NR/A 125,800
65,000 Broomfield Industrial Development, Albertsons Inc.,
5.35%, 02/01/00 NR/A+ 65,677
------------
191,477
Sales Tax 0.63% ------------
10,000 Mesa County Sales Tax,
10.00%, 12/01/13 Aaa/AAA 12,831
------------
The accompanying notes are an integral part of these financial statements.
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COLORADO DOUBLE TAX- EXEMPT BOND FUND, INC.
SCHEDULE OF INVESTMENTS
SHORT- INTERMEDIATE PORTFOLIO
June 30, 1999
(Unaudited)
(Continued)
<TABLE>
Face Bond Rating
Amount Moody's/S&P Market Value
- - ------- ----------- ------------
<S> <C> <C> <C>
Special Tax 12.27%
100,000 Colorado State Fair Authority,
6.40%, 12/01/00 NR/NR 102,782
115,000 Denver, City & County Excise Tax Series A,
5.00%, 11/01/08 Aaa/AAA 114,875
30,000 Denver, City & County Excise Tax,
7.15%, 09/01/10 Aaa/AAA 30,488
------------
248,145
Utility 7.14% ------------
60,000 Colorado Water Reservoir Power Authority, Clean Water
7.00%, 09/01/12 Aaa/AAA 63,883
80,000 Platte River Power Authority Series DD,
5.00%, 06/01/08 Aaa/AAA 80,598
------------
144,481
------------
TOTAL REVENUE BONDS (Cost $1,111,295) 1,101,079
============
6,523 MUTUAL FUNDS 0.32%
Firstar Bank Tax Free Fund,
(Cost $6,523) 6,523
============
TOTAL INVESTMENTS
(Cost $2,008,759) 98.39% $ 1,989,957
Other assets in excess of liabilities 1.61% 32,591
------------- ------------
NET ASSETS 100.00% $ 2,022,548
============= ============
The accompanying notes are an integral part of these financial statements.
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COLORADO DOUBLE TAX- EXEMPT BOND FUND, INC.
SCHEDULE OF INVESTMENTS
INCOME PORTFOLIO
June 30, 1999
(Unaudited)
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<CAPTION>
Face Bond Rating
Amount Moody's/S&P Market Value
- - -------- ------------- ------------
CERTIFICATES OF PARTICIPATION 5.57%
$15,000 El Paso County, School District 38,
<S> <C> <C> <C>
6.90%, 12/01/13 Aaa/AAA $ 15,723
100,000 Englewood, Civic Center Project,
5.10%, 6/01/18 Aaa/AAA 95,588
100,000 Moffat County, Public Safety,
5.125%, 6/01/23 Aaa/AAA 96,652
TOTAL CERTIFICATES OF ------------
PARTICIPATION (Cost $214,662) 207,963
------------
GENERAL OBLIGATION 11.67%
50,000 El Paso County, School District 11,
7.10%, 12/01/18 Aa3/AA- 60,678
100,000 Highlands Ranch Metropolitan District 3, Series B,
5.125%, 12/01/12 NR/A 98,796
100,000 Highlands Ranch Metropolitan District 3,
5.30%, 12/01/19 NR/A 96,904
50,000 Interstate South Metropolitan District,
6.00%, 12/01/20 NR/A+ 51,575
125,000 Larimer County School District R-1, Poudre,
5.50%, 12/15/13 Aa3/AA- 127,911
------------
TOTAL GENERAL OBLIGATION (Cost $448,078) 435,864
------------
ESCROWED IN U.S. GOVERNMENT SECURITIES 4.46%
5,000 Adams County, Building Authority,
Zero Coupon, 08/15/12 NR/AAA 2,516
300,000 Aurora Single Family Mortgage,
Zero Coupon, 11/01/12 NR/AAA 148,557
15,000 Platte River Power Authority, Series AA,
5.75%, 06/01/18 AAA/A+ 15,538
TOTAL ESCROWED IN U.S. ------------
GOVERNMENT SECURITIES (Cost $177,155) 166,611
------------
REVENUE BONDS 73.88%
Airport 0.68%
25,000 Denver City & County Airport, Series A,
5.70%, 11/15/25 Aaa/AAA 25,439
Education 12.62% ------------
255,000 Colorado Postsecondary Educational Facilities,
6.00%, 03/01/16 A2/AAA 267,526
The accompanying notes are an integral part of these financial statements.
</TABLE>
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COLORADO DOUBLE TAX- EXEMPT BOND FUND, INC.
SCHEDULE OF INVESTMENTS
INCOME PORTFOLIO
June 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Face Bond Rating
Amount Moody's/S&P Market Value
- - -------- ------------- ------------
<S> <C> <C> <C>
Education 12.62%
100,000 Colorado State College Board, Adams State,
5.75%, 05/15/19 Aaa/AAA 102,540
100,000 University of Northern Colorado, Aux Facilities,
5.60%, 06/01/24 Aaa/AAA 101,366
------------
471,432
Hospitals 26.58% ------------
250,000 Colorado Health Facilities, Catholic Health,
5.00%, 12/01/28 Aa2/AA 229,540
400,000 Colorado Health Facilities, Catholic Health,
5.00%, 12/01/18 Aa2/AA 374,712
120,000 Colorado Health Facilities, Childrens Hospital,
5.25%, 10/01/26 Aaa/AAA 121,208
20,000 Colorado Health Facilities, Cleo Wallace,
7.00%, 08/01/15 NR/NR 20,586
100,000 Colorado Health Facilities, Vail Valley Medical
Center, Series A, 6.60%, 01/15/20 NR/BBB 107,388
150,000 University Colorado Hospital Authority, Series A,
5.00%, 11/15/29 Aaa/NR 139,625
------------
993,059
Housing 10.84% ------------
75,000 Adams County, Housing Authority Mortgage,
5.80%, 12/01/22 NR/A 77,666
30,000 Colorado Housing Finance Authority, Single
Family Housing, 5.60%, 11/01/16 Aa1/AA+ 30,389
50,000 Colorado Housing Finance Authority, Multi Series A,
5.90%, 10/01/29 Aa2/AA 51,367
105,000 Colorado Housing Finance Authority, Single Family,
Series A-1 8.00%, 08/01/17 NR/AA+ 107,411
25,000 El Paso County, Multi Mortgage, Cottonwood
Terrace, 5.875%, 09/20/28 Aaa/NR 25,539
50,000 San Miguel County, Housing Authority,
6.40%, 07/01/23 NR/NR 53,052
55,000 Snowmass Village Multifamily Housing, Series A,
8.00%, 09/01/14 NR/NR 59,533
------------
404,957
Industrial Development 1.53% ------------
25,000 Morgan County Pollution, Public Service,
5.50%, 06/01/12 Aaa/AAA 25,315
30,000 Otero County Industrial Development Citizens
Utility, 7.10%, 08/01/20 NR/AA+ 31,890
------------
57,205
Special Tax 2.52% ------------
90,000 Colorado State Fair Authority,
7.40%, 12/01/12 NR/NR 93,966
Utility 19.11% ------------
Colorado Springs Utilities,
25,000 6.50%, 11/15/15 Aa2/AA 26,655
130,000 6.125%, 11/15/20 Aa2/AA 136,310
230,000 6.00%, 11/15/18 Aa2/AA 240,569
The accompanying notes are an integral part of these financial statements.
</TABLE>
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COLORADO DOUBLE TAX- EXEMPT BOND FUND, INC.
SCHEDULE OF INVESTMENTS
INCOME PORTFOLIO
June 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Face Bond Rating
Amount Moody's/S&P Market Value
- - -------- ------------- ------------
<S> <C> <C> <C>
Utility 19.11%
60,000 Colorado Springs Utilities, Series A,
5.125%, 11/15/23 Aa2/AA 56,803
225,000 Colorado Springs Utilities, Sub Lien Series A,
4.75%, 11/15/26 Aa2/AA 199,080
50,000 Upper Eagle Regal Water Authority,
6.70%, 12/01/18 NR/NR 54,572
------------
713,989
------------
TOTAL REVENUE BONDS (Cost $2,833,811) 2,760,047
============
MUTUAL FUNDS 3.50%
130,800 Firstar Bank Tax Free Fund,
(Cost 130,800) 130,800
============
TOTAL INVESTMENTS
(Cost $3,804,506) 99.08% $ 3,701,285
Other assets in excess of liabilities 0.92% 34,243
------------ ------------
NET ASSETS 100.00% $ 3,735,528
============ ============
The accompanying notes are an integral part of these financial statements.
</TABLE>
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<CAPTION>
COLORADO DOUBLE TAX-EXEMPT BOND FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1999
(Unaudited)
Short/
Intermediate Income
Portfolio Portfolio
----------- -----------
ASSETS:
Investments in securities, at value (Cost $2,008,759
<S> <C> <C>
and $3,804,507, respectively) (Note 6) $ 1,989,957 $ 3,701,285
Receivable from advisor (Note 3) 20,379 19,077
Interest receivable 26,912 34,014
Prepaid insurance 3,425 3,551
Service deposit 3,000 3,000
----------- -----------
Total assets 2,043,673 3,760,927
----------- -----------
LIABILITIES:
Payable for dividends declared 3,723 7,556
Accrued expenses 17,402 17,843
----------- -----------
Total liabilities 21,125 25,399
----------- -----------
Net Assets $ 2,022,548 $ 3,735,528
=========== ===========
NET ASSETS CONSIST OF:
Capital stock, $.001 par value; limited
shares authorized; 201,769 and 381,412
shares outstanding, respectively (Note 5) $ 202 $ 381
Additional paid in capital 2,041,313 3,865,128
Accumulated undistributed net realized
gain (loss) from security transactions (165) (26,760)
Net unrealized appreciation (depreciation)
of investments (18,802) (103,221)
----------- -----------
Net Assets $ 2,022,548 $ 3,735,528
=========== ===========
Net asset value, redemption and offering price per share
($2,022,548/201,769 and $3,735,528/ 381,412 shares of capital
stock outstanding, respectively) (Note 5) $ 10.02 $ 9.79
=========== ===========
The accompanying notes are an integral part of the financial statements.
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<CAPTION>
COLORADO DOUBLE TAX EXEMPT BOND FUND, INC.
STATEMENT OF OPERATIONS
For the six months ended
June 30, 1999
(Unaudited)
Short
Intermediate Income
Portfolio Portfolio
------------ ----------
Investment Income:
<S> <C> <C>
Interest $ 48,039 $ 82,127
---------- ---------
Total income 48,039 82,127
---------- ---------
Expenses:
Investment advisory fee (Note 3) 2,164 3,629
Distribution fee (Note 4) 2,352 3,945
Administrative fee (Note 3) 15,056 14,967
Transfer agent fee (Note 3) 6,282 6,215
Audit fee 5,287 5,191
Custody fee 3,844 3,896
Printing fees 1,340 1,335
Directors fees and expenses 1,805 1,736
Registration 217 215
Legal fee 7,029 6,964
Insurance expense 3,934 3,851
Other 1,000 304
---------- ---------
Total expenses 50,310 52,248
---------- ---------
Less: Expense reimbursement from advisor (Note 3) (43,912) (41,518)
---------- ---------
Net expenses 6,398 10,730
---------- ---------
Net investment income 41,641 71,397
---------- ---------
Realized and Unrealized Gain (Loss) on Investments:
(Note 2)
Net realized (loss) on investments (91) (26,763)
Unrealized depreciation of investments
for the period (31,192) (113,453)
---------- ---------
Net loss on investments (31,283) (140,216)
---------- ---------
Net increase/(decrease) in net assets from operations $ 10,358 ($ 68,819)
========== =========
The accompanying notes are an integral part of these financial statements.
</TABLE>
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<TABLE>
<CAPTION>
Colorado Double Tax Exempt Bond Funds Inc., Statement of Changes
For the six For the year For the six For the year
Months ended ended Months ended ended
June 30, 1999 December 31, June 30, 1999 December 31,
(Unaudited) 1998 (Unaudited) 1998
----------- ----------- ----------- -----------
Short/Intermediate Portfolio Income Portfolio
Increase in Net Assets from Operations:
<S> <C> <C> <C> <C>
Net investment income $ 41,641 $ 51,404 $ 71,397 $ 73,955
Net realized gain (loss) on investments (91) 7,047 (26,763) 19,036
Unrealized appreciation (depreciation) for the period (31,192) 12,229 (113,453) 6,243
----------- ----------- ----------- -----------
Net increase (decrease) in net assets
from operations 10,358 70,680 (68,819) 99,234
----------- ----------- ----------- -----------
Distributions paid to shareholders:
From net investment income($.22, $.44 and $.23,
$.47 per share, respectively) (41,641) (51,404) (71,397) (73,955)
From net realized gains($.04 and $.09 per share
respectively) 0 (7,121) 0 (19,331)
Capital share transactions (Note 5) 183,679 1,807,091 1,663,690 1,885,856
----------- ----------- ----------- -----------
Total increase in net assets 152,396 1,819,246 1,523,474 1,891,804
----------- ----------- ----------- -----------
Net Assets:
Beginning of period 1,870,152 50,906 2,212,054 320,250
----------- ----------- ----------- -----------
End of period $ 2,022,548 $ 1,870,152 $ 3,735,528 $ 2,212,054
=========== =========== =========== ===========
The accompanying notes are an integral part of these financial statements.
</TABLE>
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<TABLE>
<CAPTION>
COLORADO DOUBLE TAX EXEMPT BOND FUND, INC.
SHORT INTERMEDIATE PORTFOLIO
FINANCIAL HIGHLIGHTS
(For a fund share outstanding throughout the period)
For the period
October 28, 1997
For the six For the year (Commencement of
Months ended ended operations) to
June 30, 1999 December 31, 1998 December 31, 1997
(Unaudited)
------------ ------------ ---------
<S> <C> <C> <C>
Net asset value, beginning of period $ 10.19 $ 10.03 $ 10.00
------------ ------------ ---------
Income from investment operations:
Net investment income 0.22 0.44 0.07
Net realized and unrealized gain (loss)
on investments (0.17) 0.20 0.03
------------ ------------ ---------
Total from investment operations 0.05 0.64 0.10
------------ ------------ ---------
Less distributions:
Dividends from net investment income (0.22) (0.44) (0.07)
Dividends from net realized gains 0.00 (0.04) 0.00
------------ ------------ ---------
Total distributions (0.22) (0.48) (0.07)
------------ ------------ ---------
Net asset value, end of period $ 10.02 $ 10.19 $ 10.03
============ ============ =========
Ratios/Supplemental Data:
Net assets, end of period (in 000's) ........... 2,023 1,870 51
Ratio of expenses to average net assets ........ 5.35% # 7.07% 84.89% **
Ratio of expenses to average net assets,
after reimbursement ....................... 0.68% # 0.68% 0.68% **
Ratio of net investment income (loss) to average
net assets ................................ (0.24)% # (2.22)% (80.44)% **
Ratio of net investment income (loss) to average
net assets, after reimbursement ........... 4.43% # 4.16% 3.77% **
Portfolio turnover rate ........................ 135.93% 172.71% 0.00%
Total return * ................................. 0.51% 6.53% 5.64% **
* Based on net asset value per share
# Annualized
** The Portfolio was capitalized on April 17, 1997, with $50,000 representing
5,000 shares at a net asset value per share of $10.00. The initial public
offering was made on November 3, 1997, at which time the net asset value per
share was $10.00. Ratios for this initial period of operations are annualized.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
COLORADO DOUBLE TAX EXEMPT BOND FUND, INC.
INCOME PORTFOLIO
FINANCIAL HIGHLIGHTS
(For a fund share outstanding throughout the period)
For the period
October 28, 1997
For the six For the year (Commencement of
Months ended ended operations) to
June 30, 1999 December 31, 1998 December 31, 1997
------------ ------------ ----------
(Unaudited)
<S> <C> <C> <C>
Net asset value, beginning of period $ 10.18 $ 10.12 $ 10.00
------------ ------------ ----------
Income from investment operations:
Net investment income 0.23 0.47 0.09
Net realized and unrealized gain (loss)
on investments (0.39) 0.15 0.12
------------ ------------ ----------
Total from investment operations (0.16) 0.62 0.21
------------ ------------ ----------
Less distributions:
Dividends from net investment income (0.23) (0.47) (0.09)
Dividends from net realized gains 0.00 (0.09) 0.00
------------ ------------ ----------
Total distributions (0.23) (0.56) (0.09)
------------ ------------ ----------
Net asset value, end of period $ 9.79 $ 10.18 $ 10.12
============ ============ ==========
Ratios/Supplemental Data:
Net assets, end of period (in 000's).............. 3,736 2,212 320
Ratio of expenses to average net assets........... 3.31% # 5.64% 24.20% **
Ratio of expenses to average net assets,
after reimbursement.......................... 0.68% # 0.68% 0.68% **
Ratio of net investment income (loss) to average
net assets................................... 1.89% # (0.38)% (18.48)% **
Ratio of net investment income (loss) to average
net assets, after reimbursement.............. 4.52% # 4.58% 5.03% **
Portfolio turnover rate........................... 173.87% 120.86% 25.64%
Total return *.................................... (1.65)% 6.33% 12.21% **
* Based on net asset value per share
# Annualized
** The Portfolio was capitalized on April 17, 1997, with $50,000 representing
5,000 shares at a net asset value per share of $10.00. The initial public
offering was made on November 3, 1997, at which time the net asset value per
share was $10.00. Ratios for this initial period of operations are annualized.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
COLORADO DOUBLE TAX EXEMPT BOND FUND, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 1999
(Unaudited)
NOTE 1. ORGANIZATION
The Colorado Double Tax Exempt Bond Fund (the "Fund") was organized as a
Maryland Corporation, on August 29, 1996, and commenced operations on October
28, 1997. The Corporation is registered under the Investment Company Act of
1940, as amended, as a non-diversified, open end management investment company.
The Fund is authorized to issue 100,000,000 shares of capital stock, par value
of $.001 per share, of which 40,000,000 shares are initially authorized as Class
A shares which constitute the Short-Intermediate Portfolio and 20,000,000 shares
are initially authorized as Class B Shares which constitute the Income
Portfolio. The Fund was formed to provide Colorado investors with as high a
level of tax exempt income exempt from Federal and Colorado state income taxes
as is consistent with the maturities of the portfolio selected, with a greater
degree of principal stability than is associated with funds or trusts invested
exclusively in long-term municipal bonds.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Fund in the preparation of its financial statements.
Securities Valuations- Portfolio securities are valued at the last
reported sale price on the securities exchange or national securities market on
which such securities primarily are traded. Securities not listed on an exchange
or national securities market, or securities in which there were no
transactions, are valued at the average of the most recent bid and asked prices.
Short-term investments are carried at amortized cost, which approximates value.
Any securities or other assets for which recent market quotations are not
readily available are valued at fair value as determined in good faith by the
Fund's Board of Directors. Expenses and fees, including the management fee and
distribution and service fees, are accrued daily and taken into account for the
purpose of determining the net asset value of the Fund's shares.
Federal Income Taxes- The Fund intends to qualify each year as a
"regulated investment company" under the Internal Revenue Code. By so
qualifying, the Fund will not be subject to federal income taxes to the extent
that it distributes substantially all of its net investment income and any
realized capital gains.
Dividends and Distributions- The Fund accrues dividends daily and
distributes monthly all of its net investment income. The Fund intends to
distribute its net long term capital gains and its net short term capital gains
at least once a year.
Organization Expenses- During its organization and initial registration
with the Securities and Exchange Commission (the "SEC"), the Fund incurred
organization expenses of $38,656. The Adviser has elected to incur these
expenses.
Other- The Fund follows industry practice and records security
transactions on the trade date. The specific identification method is used for
determining gains or losses for financial statements and income tax purposes.
Interest income is recorded on an accrual basis.
<PAGE>
COLORADO DOUBLE TAX EXEMPT BOND FUND, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 1999
(Unaudited)
Use of Estimates- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements, and the reported amounts of increases and decreases in
net assets from operations during the reporting period. Actual results could
differ from those estimates.
NOTE 3. INVESTMENT ADVISORY, ADMINISTRATION AND CUSTODIAL AGREEMENTS
The Board of Directors provides broad supervision over the affairs of the
Fund. Pursuant to a Management Agreement between the Fund and Funds Management
Corporation (the "Manager") and subject to the authority of the Board of
Directors, the Manager manages the investments of the Fund and is responsible
for the overall management of the business affairs of the Fund.
Under the terms of the Management Agreement, the Fund has agreed to pay the
manager a base monthly management fee at the annual rate of .23%, of the Fund's
average daily net assets.
All expenses incurred in the operation of the Fund will be borne by the
Fund, except to the extent specifically assumed by the Manager. The expenses to
be borne by the Fund will include: taxes, interest, brokerage fees and
commissions, fees of board members who are not officers, directors or employees
of the Manager or its affiliates, Securities and Exchange Commission fees, state
Blue Sky qualification fees, advisory, administrative and fund accounting fees,
charges of custodians, transfer and dividend disbursing agents' fees, insurance
premiums, industry association fees, outside auditing and legal expenses, costs
attributable to investor services (including, without limitation, telephone and
personnel expenses), costs of shareholders' reports and meetings, costs of
preparing and printing prospectuses and statements of additional information,
amounts payable under the Fund's Distribution and Shareholder Servicing Plan
(the "Plan") and any extraordinary expenses. The Manager has agreed to reimburse
the Fund for its expenses to the extent that they ever exceed .68% (including
the Advisor's fee) of the average annual net assets of the Fund. The Manager is
a wholly owned subsidiary of Isaak Bond Investments, Inc. ("The Principal
Underwriter"). The Principal Underwriter is owned by certain Officers and
Directors of the Fund.
For the six months ended June 30, 1999, the Manager earned advisory fees of
$5,793. The Manager earned $2,164 from the Short-Intermediate Portfolio, and
$3,629 from the Income Portfolio, respectively. The Manager reimbursed the Fund
$85,430 in expenses. The Manager reimbursed the Short-Intermediate Portfolio
$43,912, and reimbursed the Income Portfolio $41,518, respectively.
The Fund has agreements with American Data Services, Inc. (the
"Administrator") to provide shareholder servicing, fund accounting and
administrative services to the Fund. The services to be provided under the
agreements include day-to-day administration of matters related to the corporate
existence of the Fund (other than rendering investment advice), maintenance of
its records, preparation of reports, supervision of the Fund's arrangement with
its custodian and assistance in the preparation of the Fund's registration
statement under federal and state laws. Costs incurred totaled $42,520, $21,338
for the Short-Intermediate Portfolio, and $21,182 for the Income Portfolio
respectively, for the six months ended June 30, 1999. The agreements provide for
minimum fees of $3,000 per portfolio plus expenses and transactional charges.
The Fund is required to maintain a $3,000 per portfolio deposit with the
Administrator.
<PAGE>
COLORADO DOUBLE TAX EXEMPT BOND FUND, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 1999
(Unaudited)
NOTE 3. INVESTMENT ADVISORY, ADMINISTRATION AND CUSTODIAL AGREEMENTS (CONTINUED)
The Fund's custody agreements with a bank provides for fees on a
transactional basis plus expenses. The minimum monthly fee per portfolio is $400
per month.
NOTE 4. DISTRIBUTION AGREEMENT
Under a plan adopted by the Fund's Board of Directors pursuant to Rule
12b-1 under the 1940 Act (the "Plan"), the Fund pays the Manager for each of the
Fund's portfolios, a shareholder servicing and distribution fee at the annual
rate of .25% of the average daily net assets of the Fund. Such fee will be used
in it's entirety by the Manager to make payments to reimburse distributors or
others for all expenses incurred by distributors or others in the promotion and
distribution of the Fund's shares. Such expenses may include, but are not
limited to, the printing of prospectuses and reports used for sales purposes,
expenses of prepaying and distributing sales literature and related expenses,
including a prorated portion of distributors' overhead expenses attributable to
the distribution of Fund shares, as well as any distribution or service fees
paid to securities broker-dealers or their firms or others who have executed a
servicing agreement with the Fund, distributors or their affiliates. The fees
paid to the Manager under the Plan are in addition to the fees payable under the
Management Agreement and are payable without regard to actual expenses incurred.
For the six months ended June 30, 1999, the amount paid or accrued for such
expenses was $6,297. The breakdown per Fund was, $2,352 for the
Short-Intermediate Portfolio, and $3,945 for the Income Portfolio.
NOTE 5. CAPITAL SHARE TRANSACTIONS
As of June 30, 1999 there was an authorized number of $.001 par value
shares of capital stock authorized for the Fund. The Fund is authorized to issue
100,000,000 shares of capital stock, par value of $.001 per share, of which
40,000,000 shares were initially authorized as Class A Shares which constitute
the Short-Intermediate Portfolio and 20,000,000 shares were initially authorized
as Class B Shares which constitute the Income Portfolio. The Board of Directors
is authorized to assign any of the 40,000,000 unassigned shares of the Fund to a
portfolio. Transactions in capital stock were as follows:
<PAGE>
COLORADO DOUBLE TAX EXEMPT BOND FUND, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 1999
(Unaudited)
NOTE 5. CAPITAL SHARE TRANSACTIONS (CONTINUED)
Short-Intermediate Portfolio
<TABLE>
<CAPTION>
For the six months For the year
ended ended
June 30, 1999 December 31, 1998
Shares Amount Shares Amount
------- ----------- ------- -----------
<S> <C> <C> <C> <C>
Shares sold 46,528 $ 471,778 189,687 $ 1,920,879
Shares issued for reinvestment
of dividends and distribution 3,728 37,850 5,756 58,616
Shares redeemed (32,100) (325,949) (16,904) (172,404)
------- ----------- ------- -----------
Net increase 18,156 $ 183,679 178,539 $ 1,807,091
======= =========== ======= ===========
</TABLE>
<TABLE>
<CAPTION>
Income Portfolio
For the six months For the year
ended ended
June 30, 1999 December 31, 1998
Shares Amount Shares Amount
------- ----------- ------- -----------
<S> <C> <C> <C> <C>
Shares sold 178,135 $ 1,800,511 169,620 $ 1,722,647
Shares issued for reinvestment
of dividends and distribution 4,807 48,372 16,500 168,209
Shares redeemed (18,801) (185,193) (502) (5,000)
------- ----------- ------- -----------
Net increase 164,141 $ 1,663,690 185,618 $ 1,885,856
======= =========== ======= ===========
</TABLE>
<PAGE>
COLORADO DOUBLE TAX EXEMPT BOND FUND, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
NOTE 6. INVESTMENTS
Short-Intermediate Income
Portfolio Portfolio
----------- -----------
<S> <C> <C>
Purchases of investment securities $ 2,678,997 $ 6,406,613
=========== ===========
Sales of investment securities $ 2,520,064 $ 5,258,905
=========== ===========
Accumulated unrealized appreciation- January 1, 1999 $ 12,390 $ 10,232
Less: Gross unrealized depreciation (31,192) (113,453)
----------- -----------
Accumulated unrealized appreciation- June 30, 1999 $ (18,802) $ (103,221)
=========== ===========
Aggregate cost of securities, Federal income tax purposes $ 2,008,759 $ 3,804,507
=========== ===========
</TABLE>
