<PAGE>
Semi-Annual Report
February 29, 1996
The Rushmore Fund, Inc.
Nova Portfolio
<PAGE>
THE RUSHMORE FUND, INC.
NOVA PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
February 29, 1996
<TABLE>
<S> <C>
TOTAL ASSETS............................................................. $ 0
------
TOTAL LIABILITIES........................................................ 0
------
NET ASSETS............................................................... $ 0
------
Shares Outstanding....................................................... 0
======
Net Asset Value Per Share................................................ $ 0.0
------
</TABLE>
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
THE RUSHMORE FUND, INC.
NOVA PORTFOLIO
STATEMENT OF OPERATIONS
For the Six Months Ended February 29, 1996
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest (Note 1).................................................. $ 8,811
Dividends (Note 1)................................................. 1,369
---------
Total Investment Income.......................................... 10,180
---------
EXPENSES
Investment Advisory Fee (Note 2)................................... 1,641
Administrative Fee (Note 2)........................................ 1,126
---------
Total Expenses................................................... 2,767
---------
NET INVESTMENT INCOME................................................ 7,413
---------
Net Realized Gain on Investments................................... 34,335
Net Change in Unrealized Appreciation (Depreciation) of Investments (3,633)
---------
NET GAIN ON INVESTMENTS.............................................. 30,702
---------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................. $ 38,115
=========
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
2
<PAGE>
- --------------------------------------------------------------------------------
THE RUSHMORE FUND, INC.
NOVA PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the Six Months Ended
<TABLE>
<CAPTION>
February 29, 1996 February 28, 1995
----------------- -----------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES
Net Investment Income.................................................. $ 7,413 $ 3,160
Net Realized Gains on Investment Transactions.......................... 34,335 -
Net Change in Unrealized Appreciation (Depreciation) of Investments.... (3,633) 3,192
------------ ------------
Net Increase in Net Assets Resulting from Operations................... 38,115 6,352
DISTRIBUTIONS TO SHAREHOLDERS
From Net Investment Income (Note 1).................................... (20,173) -
From Net Realized Gains on Investments................................. - -
FROM SHARE TRANSACTIONS (Note 4)
Net Proceeds from Sales of Shares...................................... 56,369 625,000
Shares Issued in Reinvestment of Dividends............................. 12,407 -
Cost of Shares Redeemed................................................ (766,885) -
------------ ------------
Net Increase (Decrease) in Net Assets.................................. (680,167) 631,352
NET ASSETS - Beginning of Period......................................... 680,167 0
------------ ------------
NET ASSETS - End of Period............................................... $ 0 $ 631,352
============ ============
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
3
<PAGE>
THE RUSHMORE FUND, INC.
NOVA PORTFOLIO
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
For the Six
Months Ended For the Year Ended August 31,
February 29, -------------------------------------------
1996 1995 1994 1993 1992
------------ ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net Asset Value - Beginning of Period............................ $ 10.88 $ 0.00 $ 10.01 $ 9.46 $ 10.73
------- ------- ------- ------- -------
Net Investment Income............................................ 0.183 0.310 0.060 0.157 0.186
Net Realized and Unrealized Gains (Losses) on Securities......... 0.525 0.570 - 0.711 (1.170)
------- ------- ------- ------- -------
Net Increase (Decrease) in Net Asset Value Resulting
from Operations................................................ 0.708 0.880 0.060 0.868 (0.984)
Dividends to Shareholders........................................ (0.498) - - (0.318) (0.286)
Distributions to Shareholders from Net Realized Capital Gains.... - - - - -
Liquidation of Assets and Redemption of all Outstanding Shares... (11.090) - (10.070) - -
From Share Transactions*......................................... - 10.000 - - -
------- ------- ------- ------- -------
Net Increase (Decrease) in Net Asset Value....................... (10.88) 10.88 (10.01) 0.55 (1.27)
------- ------- ------- ------- -------
Net Asset Value - End of Period.................................. $ 0.00 $ 10.88 $ 0.00 $ 10.01 $ 9.46
======= ======= ======= ======= =======
Total Investment Return............................................ 7.05%/d/ 8.80%/b/ 0.90% 9.36% (7.79)%
Ratios to Average Net Assets:
Expenses......................................................... 1.22%/c/a/ 1.25%/c/ 0.90%/a/ 1.36% 1.12%
Net Investment Income............................................ 3.28%/c/ 2.97%/c/ 2.41% 1.56% 1.88%
Supplementary Data:
Portfolio Turnover Rate....,,,,,,,,,,,,,......................... 38.3% 224.4% 0.0% 1,288.9% 2,100.8%
Number of Shares Outstanding at End of Period (000's omitted).... 0 63 0 47 1,471
</TABLE>
* During the year ended August 31, 1995, 62,500 shares were sold at $10.00
per share when the net asset value of the portfolio was $0.00 thereby
resulting in Money Management Associates, the Portfolio's adviser, and other
affiliated persons of the Portfolio, owning 80% of the Portfolio's shares.
/a/ Reflects all fees paid for services provided during the period. Investment
advisory services were not provided for part of the period due to investment
activity having ceased.
/b/ Reflects the total return for the period January 3, 1995 through August 31,
1995. January 3, 1995 represents the first date during fiscal year 1995 that
the fund had net assets and shareholders.
/c/ Annualized.
/d/ Total returns for periods of less than one year are not annualized.
See Notes to Financial Statements.
4
<PAGE>
THE RUSHMORE FUND, INC.
NOVA PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
February 29, 1996
1. SIGNIFICANT ACCOUNTING POLICIES
The Rushmore Fund, Inc. ("Fund") is registered with the Securities and
Exchange Commission under the Investment Company Act of 1940 as an open-end,
diversified investment company. The Fund consists of three separate
portfolios which are designed to meet a variety of investment objectives. The
Nova Portfolio, which is one of the three portfolios of the Fund, is a
nondiversified investment company. The following is a summary of significant
accounting policies for the Nova Portfolio (the "Portfolio").
(a) Listed securities are valued at the last sales price. Options and
futures contracts are valued at the last sales price as of the close of
trading on the applicable exchanges. If market quotations are not
readily available, the Board of Directors will value the Portfolio's
securities in good faith.
(b) Security transactions are recorded on the trade date (the date the order
to buy or sell is executed). Interest income is accrued on a daily
basis. Dividend income is recorded on the ex-dividend date. Realized
gains and losses from securities are computed on an identified cost
basis.
(c) Income dividends are declared and paid annually in the Portfolio.
Dividends are reinvested in additional shares unless shareholders
request payment in cash. Generally, short-term capital gains are
distributed annually in the Nova Portfolio. Long-term capital gains, if
any, are distributed annually.
(d) The Fund complies with the provisions of the Internal Revenue Code
applicable to regulated investment companies and distributes all net
investment income to its shareholders. Therefore, no Federal income tax
provision is required.
(e) When the Portfolio writes (sells) an option, an amount equal to the
premium received is entered in the Portfolio's accounting records as an
asset and an equivalent liability. The amount of the liability is
subsequently marked-to-market to reflect the current value of the option
written. When an option expires, or if the Portfolio enters into a
closing purchase transaction, the Portfolio realizes a gain (or loss if
the cost of a closing purchase transaction exceeds the premium received
when the option was sold).
2. INVESTMENT ADVISORY AND SHAREHOLDER SERVICES
Investment advisory and management services are provided by Money Management
Associates, ("Adviser"). Under an agreement with the Adviser, the Portfolio
pays a fee for such services at an annual rate of 0.75% of the average daily
net assets of the Portfolio.
Rushmore Trust and Savings, FSB (Trust), a majority-owned subsidiary of the
Adviser, provides transfer agency, dividend-disbursing and shareholder
services to the Portfolio. In addition, the Trust serves as custodian of the
Portfolio's assets and pays the operating expenses of the Portfolio. For
these services, the Trust receives an annual fee of 0.50% of the average net
assets of the Portfolio.
5
<PAGE>
3. SECURITIES TRANSACTIONS
For the six months ended February 29, 1996, purchases and sales (including
maturities) of securities (excluding short-term securities) were as follows:
Purchases.................................................. $33,280
--------
Sales...................................................... $180,497
--------
4. SHARES TRANSACTIONS
On February 29, 1996, there were 1,000,000,000 shares of $.001 par value
capital stock authorized of the Fund. Transactions in shares of the Portfolio
were as follows:
For the Six Months Ended February 29, 1996:
Shares Dollars
------- ---------
Shares Sold................................... 4,855 $56,369
Shares Issued in Reinvestment
of Dividends................................ 1,123 12,407
------- ---------
5,978 68,776
Shares Redeemed............................... (68,478) (766,885)
------- ---------
(62,500) $(698,109)
======= =========
5. NET UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS
Unrealized appreciation (depreciation) as of February 29, 1996, cost for
Federal income tax purposes is as follows:
Gross Unrealized Appreciation.............................. $0
Gross Unrealized Depreciation.............................. 0
---------
Net Unrealized Appreciation................................ $0
=========
Cost of Investments for Federal Income Tax purposes........ $0
=========
6
<PAGE>
6. NET ASSETS
At February 29, 1996, net assets consisted of the following:
Paid-in Capital................................................ $0
Undistributed Net Investment Income............................ 0
Accumulated Net Realized Gain on Investments................... 0
Net Unrealized Appreciation on Investments..................... 0
------
Net Assets..................................................... $0
======
7. FEDERAL INCOME TAX
Each portfolio of the Fund has adopted Statement of Position 93-2;
Determination, Disclosure, and Financial Statement Presentation of Income,
Capital Gain, and Return of Capital Distributions by Investment Companies.
Adoption of this standard results in the reclassification to paid-in capital of
permanent differences between tax and financial reporting of net investment
income and realized gains/(losses). As of February 29, 1996, the effect of
permanent differences between tax and financial reporting of undistributed net
realized capital gains resulted in a reclassification of $73,109 of such gains
to paid-in-capital.
At February 29, 1996, for Federal income tax purposes, the Portfolio had
capital loss carryovers which may be applied against future net taxable
realized gains of each succeeding year until the earlier of its utilization
or its expiration.
Expires August 31, 2000................................. $1,893,074
==========
7
