[GRAPHIC OMITTED]
Global
Entertainment
Media
Gabelli
Global Interactive
Couch Potato(R) Fund
ANNUAL REPORT
DECEMBER 31, 1997
<PAGE>
Global
Entertainment [PHOTO OMITTED]
Media Marc J. Gabelli
Annual Report, December 31, 1997
The Gabelli Global Interactive Couch Potato(R) Fund
#1 Global Fund!
(as ranked by Lipper Analytical Services based on one year
performance through 12/31/97 among 188 global funds).
To Our Shareholders,
Driven by low inflation, low interest rates, good corporate earnings
gains, deals, stock repurchase programs and liquidity (the continuing strong
flow of cash into U.S. equity funds), stocks posted strong gains in 1997. Until
correcting in late December, large cap growth stocks continued to lead the
market parade. However, large cap value and mid and small cap indices also
posted solid gains. 1997 was a particularly good year for global multimedia
stocks as evidenced by the Gabelli Global Interactive Couch Potato(R) Fund's
number one rating in the Lipper Analytical Services Global Fund universe.
Investment Performance
For the fourth quarter ended December 31, 1997, The Gabelli Global
Interactive Couch Potato(R) Fund's total return was 10.9%. The Lipper Analytical
Services Global Fund Average had a return of (5.0)% over the same period. The
average is an unmanaged indicator of investment performance. The Fund was up
41.7% for 1997. The Lipper Global Fund Average rose 13.0% over the same twelve
month period. Since inception on February 7, 1994 through December 31, 1997, the
Fund has a total return of 92.6%, which equates to an average annual return of
18.3%.
<PAGE>
- --------------------------------------------------------------------------------
Interactive Couch Potato(R)
Interactive (in'ter ak' tiv) Having the capacity for communication flow in
each direction.*
Couch (kouch) An appellation for the heavy user of television,
depicted in the metaphor as plopped before the
Potato (po ta'to) television set like a vegetable with eyes. The
term was coined in the early 1980s by a group of
(pe ta'to) Baby Boomers in the San Francisco area who
playfully glorified their addiction to the tube.
Calling themselves The Couch Potatoes, they formed
a national club and published a hilarious
newsletter in the couch potato lifestyle
containing bizarre recipes for that vital
companion to the TV set, the toaster oven. After a
burst of enlistments, the club quietly
disappeared. All that remains today is the
metaphor, and its current use tends to be more
pejorative than self-mocking or affectionate.*
*Source: NTC Mass Media Directory.
- --------------------------------------------------------------------------------
INVESTMENT RESULTS (a)
- --------------------------------------------------------------------------------
Quarter
--------------------------------------
1st 2nd 3rd 4th Year
--- --- --- --- ----
1997: Net Asset Value ..... $11.79 $13.72 $15.02 $14.28 $14.28
Total Return ........ 0.3% 16.4% 9.5% 10.9% 41.7%
- --------------------------------------------------------------------------------
1996: Net Asset Value ..... $12.57 $13.40 $13.22 $11.75 $11.75
Total Return ........ 7.3% 6.6% (1.3)% (0.3)% 12.5%
- --------------------------------------------------------------------------------
1995: Net Asset Value ..... $10.62 $11.28 $12.30 $11.72 $11.72
Total Return ........ 3.6% 6.2% 9.0% (1.8)% 17.9%
- --------------------------------------------------------------------------------
1994: Net Asset Value ..... $9.90 $9.97 $10.54 $10.25 $10.25
Total Return ........ (1.0)%(b) 0.7% 5.7% (2.8)% 2.5%(b)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Average Annual Returns - December 31, 1997 (a)
1 Year................................................. 41.7%
3 Year................................................. 23.4%
Life of Fund (b)....................................... 18.3%
- --------------------------------------------------------------------------------
Dividend History
- ------------------------------------------------------------------
Payment (ex) Date Rate Per Share Reinvestment Price
- ----------------- -------------- ------------------
December 31, 1997 $2.370 $14.28
December 31, 1996 $1.436 $11.75
December 29, 1995 $0.363 $11.72
(a) Total returns and average annual returns reflect changes in share price and
reinvestment of dividends and are net of expenses. The net asset value of the
Fund is reduced on the ex-dividend (payment) date by the amount of the dividend
paid. Of course, returns represent past performance and do not guarantee future
results. Investment returns and the principal value of an investment will
fluctuate. When shares are redeemed they may be worth more or less than their
original cost. (b) From commencement of operations on February 7, 1994. Note:
Investing in foreign securities involves risks not ordinarily associated with
investments in domestic issues, including currency fluctuation, economic and
political risks.
- --------------------------------------------------------------------------------
2
<PAGE>
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN
THE GABELLI GLOBAL INTERACTIVE COUCH POTATO(R) FUND,
THE LIPPER GLOBAL FUND AVERAGE AND THE S&P 500 INDEX
[The following table was depicted as a line graph in the printed material]
Gabelli Global Interactive Lipper Global
Couch Potato Fund* Fund Average S&P 500 Index
-------------------------- ------------- -------------
2/7/94 10000 10000 10000
12/94 10250 9835 9810
12/95 12080 11214 13499
12/96 13590 13042 16604
12/97 19257 14743 22141
- ----------
* Past Performance is not predictive of future performance.
Global Allocation
The accompanying chart presents the Fund's holdings by geographic region
as of December 31, 1997. The geographic allocation will change based on current
global market conditions. Countries and/or regions represented in the chart and
below may or may not be included in the Fund's future portfolio.
Portfolio Structure
As we have indicated in past discussions, the Interactive Couch
Potato's(R) investment premise falls within the context of two main investment
universes: 1) companies involved in creativity, as it relates to the
development of intellectual property rights (copyrights); and 2) companies
involved in distribution, as it relates to the delivery of these copyrights.
Additionally, this includes the broad scope of communications-related services
such as basic voice and data.
HOLDINGS BY GEOGRAPHIC REGION - 12/31/97
[The following table was depicted as a pie chart in the printed material]
United States 64.9%
Europe 21.6%
Canada 7.4%
Asia/ Pacific Rim 5.9%
South America 0.2%
[The following table was depicted as a pie chart in the printed material]
Distribution 58.2%
Copyright/Creativity 41.8%
The accompanying chart depicts our equity mix of the copyright/creativity
and distribution companies in our portfolio as of December 31, 1997.
3
<PAGE>
COMMENTARY
1997 Revisited
Year ends are always time for reflection. We look back over the last
twelve months and assess what went right and what went wrong. To borrow from
Joseph Heller's classic novel Catch 22, we tally the "feathers in our cap" and
"black eyes". In 1997, the former vastly outnumber the latter. Heading our
"feathers in the cap" list is deals. During the year, the Fund bid a cheerful
farewell to several portfolio holdings which found new homes under other
corporate roofs. Also prominent on our list are cable television stocks,
Cablevision Systems (CVC - $95.75 - ASE), Tele-Communications Inc. (TCOMA -
$14.875 - Nasdaq) and Comcast (CMCSA - $31.875 - Nasdaq), which gained 212.7%,
113.9% and 80.9%, respectively, over the course of the year, thanks to better
than generally expected cash flow growth and Bill Gates' decision that coaxial
cable will be the most effective digital highway into the home. Cable network
stocks, BET Holdings (BTV - $54.625 - NYSE), Liberty Media Group (LBTYA - $36.25
- -Nasdaq) and Home Shopping Network (HSNI - $51.50 - Nasdaq), also soared as
investors acknowledged the escalating value of these entrenched distribution
channels. Telecommunications equipment stocks including Lucent Technologies (LU
- - $79.875 - NYSE) and Northern Telecom (NT - $88.75 - NYSE) buoyed returns.
Broadcasters such as CBS Corp. (CBS - $29.4375 - NYSE), Media General (MEG'A -
$41.8125 - ASE) and Ackerley Group (AK - $16.9375 -NYSE) were also high on our
leader board.
Our "black eyes" list had a distinct Asian accent, with Asian companies in
virtually every multimedia category suffering all the severe symptoms of the
Asian Flu.
1998: Will it be Another Good Year for Multimedia Stocks
After several years of underperformance relative to other market sectors,
telecommunications, cable television, cable networks, broadcast and filmed
entertainment producers were among 1997's best performing industry groups. There
are a number of reasons why these sleeping giants awoke. Cable television
operators did a good job protecting market share from satellite broadcasters and
received strong strategic and financial backing from leading technology
companies committed to making CATV companies' coaxial connections into American
homes the primary internet transmission highway. We think the cable television
industry is in terrific shape. The systems are built out. Strong financial
partners are providing the capital for technological upgrades. Cash flows from
traditional cable TV services are trending up and new services are finally
coming on stream. This industry, which Wall Street had written off a year ago,
has a very promising future.
The same can be said for cable networks. Until cable television operators
fully upgrade systems to provide more channel capacity, the existing network
slots will be coveted by programmers and advertisers. We expect to see
continuing consolidation in the industry and strategic partners that can help
maximize cash flow and profits.
Telecommunications stocks probably offer the greatest long term upside
potential. The global deregulation of the telecommunications industry is finally
unfolding. Giant mergers will take place as the big players jockey for domestic
and global market share. WorldCom's acquisition of MCI will not be the last
mega-deal in the industry. We think AT&T will go after someone -- possibly Cable
& Wireless (CWP - $27.1875 - NYSE). Smaller companies like Southern New England
Telecommunications (SNG - $50.3125 - NYSE), which has agreed to be acquired by
SBC Communications, must also be viewed as potential targets.
Filmed entertainment producers like Time Warner (TWX - $62.00 - NYSE)
(Warner Brothers), Viacom (VIA - $40.875 - ASE) (Paramount), and Seagram (VO -
$32.3125 - NYSE) (MCA) will be able to premium price entertainment products as
the global expansion in entertainment distribution systems
4
<PAGE>
heightens already strong demand. Broadcasters should also do well as
deregulation continues to spawn consolidation in the industry.
So, we think the short, intermediate and long term prospects for global
multimedia stocks are exciting and continue to believe these industry groups
will be market leaders in 1998 and beyond.
Let's Talk Stocks
The following are stock specifics on selected holdings of our Fund.
Favorable earnings prospects do not necessarily translate into higher stock
prices, but they do express a positive trend which we believe will develop over
time. The share prices of foreign holdings are stated in U.S. dollar equivalent
terms as of December 31, 1997.
Cablevision Systems Corp. (CVC - $95.75 - ASE), based in Woodbury, NY, is a
major cable TV operator serving 2.9 million subscribers, including managed
systems. CVC's revenue per subscriber is the highest in the cable industry. CVC
has exercised its option to purchase ITT's 50% stake in MSG (Madison Square
Garden) Properties, including the NY Knicks and NY Rangers. Cablevision is also
purchasing Tele-Communications Inc.'s ten New York area cable properties with
roughly 820,000 subscribers by issuing over 12 million shares (a one-third
interest in the company) and assuming about $670 million of TCI's debt. The
company's new, vigorous activity includes the sale of a 40% stake in Rainbow
Sports to a News Corp./TCI joint venture with the proceeds used to pay down a
significant portion of MSG's debt. With its upgraded cable systems, CVC is
well-positioned to offer telephony, high speed data and enhanced video services.
Canal + (CNPL.P - $186.01 - Paris Stock Exchange), founded in 1984, is Europe's
leading pay television company, with world-class expertise in programming for
premium and theme channels. The company is a distribution powerhouse with
superior marketing capabilities, subscriber management systems and scrambling
and access control technology. Canal Satellite, Europe's first commercial
digital TV service, was launched in 1996. The 1997 merger with the Dutch media
group Nethold marks a major strategic milestone, further consolidating the
group's international position with a portfolio of approximately 10 million
subscribers across Europe.
HSN Inc. (HSNI - $51.50 - Nasdaq) is the name for the parent company comprised
of Silver King Communications, Home Shopping Network and SF Broadcasting. Silver
King operates 12 wholly-owned UHF stations and one satellite station through
SKTV Inc. Home Shopping's major business is electronic retailing. The six SF
Broadcasting stations, four VHF stations and two satellites are 50%-owned with
Fox. The combined companies are guided by Barry Diller. HSNI is buying the
television assets of Universal Studios from Seagram's for $4.075 billion. Under
the proposal, Universal (a subsidiary of the Seagram Company) receives a 45%
interest in HSN and $1.2 billion in cash. HSN gets control of the USA Network,
the Sci-Fi Channel and Universal's U.S. television production and distribution
operations. HSNI has also acquired a 50.1% stake in Ticketmaster Group (TKTM -
$23.00 - Nasdaq).
Seagram Company Ltd. (VO - $32.3125- NYSE), with its 1995 purchase of an 80%
interest in MCA from Matsushita Electric Industrial Co. for $5.7 billion,
operates two global businesses: beverages and entertainment. Seagram is a
leading global producer and marketer of distilled spirits, wines, fruit juices
and mixers. Major beverage brands include Chivas Regal, Absolut, Martell, Mumm,
Crown Royal, Seagram's Gin and Tropicana and Dole fruit juices. MCA's film and
entertainment activities feature Universal Studios. MCA also has music and
recreation operations. Seagram owns about 14.7% of Time Warner common stock. We
estimate that Seagram's PMV exceeds $50 per share.
5
<PAGE>
Tele-Communications Inc. (TCOMA - $27.9375 - Nasdaq), one of the largest cable
TV operators in the U.S., is guided by Dr. John C. Malone - one of the most
shareholder sensitive managers we have found. Regulation has historically played
an important role in the valuation of cable properties. Passage of The
Telecommunications Reform Act of 1996, combined with the current deregulatory
climate in Congress, is providing a significant catalyst for cable stocks. TCOMA
is a well-positioned industry leader, from its wireless telephony PCS venture
with Sprint, Comcast and Cox Communications to its innovative Internet access
business, dubbed "@Home", and its 80% stake in Tele-Communications International
Inc. (TINTA - $18.00 - Nasdaq). An important strategic shift for the company is
underway as some cable properties are being sold or transferred to
allianced-partners, shifting debt and strengthening the company's balance sheet.
So far, deals shaving over 3 million subscribers and shifting over $4 billion in
debt have been announced. Cost reduction programs, including overhead reduction,
are showing substantial progress and increasing operating cash flow.
Tele-Communications Inc./Liberty Media Group (LBTYA - $36.25 - Nasdaq) owns a
collection of interests in some of the most powerful programming entities in the
world. Liberty Media is the second largest investor in Time Warner, the world's
largest media company. Liberty Media, News Corp. and Tele-Communications
International Inc. (TINTA - $18.00 - Nasdaq) have created a global sports joint
venture, Fox Sports, that offers an integrated package of sports programming
across network broadcast, national cable, and regional cable channels. Liberty's
49%-owned Discovery Communications is a major advertiser-supported basic cable
network that includes the flagship Discovery Channel, The Learning Channel and
developing businesses such as Discovery Europe and Animal Planet. We consider
Liberty Media to be ideally positioned to benefit from expanding distribution
channels, including direct broadcast satellite ventures like DirecTV and the
Internet.
Telefonica de Espana (TEF - $91.0625 - NYSE) is a diversified telecommunications
service provider offering services to more than 15 million lines. The company
also services a fast growing cellular subscriber base which now exceeds two
million subscribers. We consider TEF to be an attractive way to invest in Latin
America, with a diversified portfolio of telecommunication operations in the
region. Its portfolio of publicly traded Latin American companies includes:
Compania de Telecomunicaciones de Chile SA, Telefonica de Argentina SA and
Compania Peruana de Telefonos SA. TEF also holds interests in non-public Latin
American telecom operations in Mexico, Colombia, Puerto Rico, Uruguay and
Venezuela. The company's long term strategy is to create a Pan American network,
leveraging the Spanish speaking world. TEF jump started this effort with its
decision to form a global alliance with British Telecom and MCI's Concert plc,
which is gaining momentum in the race to become the dominant provider of one
stop shopping for full-service, global telecommunications products.
Viacom Inc. (VIA - $40.875 - ASE; VIA'B - $41.4375 - ASE), long a major provider
of entertainment "content", has evolved into one of the world's dominant media
companies. Following its acquisitions of Paramount Communications and
Blockbuster Entertainment, the company is now divesting non-core assets to
reduce its debt of approximately $10 billion and is focusing on the global
expansion of its media franchises. The company divested its cable systems
subsidiary in a transaction with Tele-Communications Inc. which reduced Viacom's
debt by $1.7 billion and the number of common shares outstanding by about four
percent. Its radio group, Evergreen Media, is being sold for $1.1 billion in
cash. Its publishing business, Simon & Schuster, has been put up for sale.
Viacom is well-positioned in music (notably MTV) and cable networks such as
Nickelodeon.
Minimum Initial Investment - $1,000
The Fund's minimum initial investment for both regular and retirement
accounts is $1,000. There are no subsequent investment minimums. No initial
minimum is required for those establishing an Automatic Investment Plan.
Additionally, The Gabelli Global Interactive Couch Potato(R) Fund and other
Gabelli Funds are available through the no-transaction fee programs at many
major discount brokerage firms.
6
<PAGE>
The Roth IRA
The Taxpayer Relief Act of 1997 included new tax incentives and more
opportunities to save for retirement and other major expenditures. The Roth IRA
is just one of these new opportunities now available at Gabelli Funds. Our
investor representatives are available at 1-800-GABELLI (1-800-422-3554) to
speak with you about establishing a new Roth IRA and to discuss your investment
choices.
Internet
You can now visit us on the Internet. Our home page at
http://www.gabelli.com contains information about Gabelli Funds, Inc., the
Gabelli Mutual Funds, IRAs, 401(k)s, quarterly reports, closing prices and other
current news. You can send us e-mail at [email protected].
In Conclusion
Multimedia stocks reigned in 1997. We believe they continue to offer a
wealth of opportunity for investors. Global barriers are finally coming down.
The mating game will be intense as suitors compete for the most attractive
partners. We are in the midst of an exciting party that could last well into the
next decade.
The Fund's daily net asset value is available in the financial press and
each evening after 6:00 PM (Eastern Time) by calling 1-800-GABELLI
(1-800-422-3554). The Fund's Nasdaq symbol is GICPX. Please call us during the
business day for further information.
Sincerely,
Marc J. Gabelli
Portfolio Manager
February 1, 1998
------------------------------------------------------------
Top Ten Holdings
December 31, 1997
-----------------
Viacom Inc. Seagram Co.
Cablevision Systems Corp. Canal +
HSN Inc. Pathe SA
TCI/Liberty Media Group Time Warner Inc.
Tele-Communications Inc. Telefonica de Espana
------------------------------------------------------------
NOTE: The views expressed in this report reflect those of the portfolio manager
only through the end of the period of this report as stated on the cover. The
manager's views are subject to change at any time based on market and other
conditions.
7
<PAGE>
The Gabelli Global Interactive Couch Potato(R) Fund
Portfolio of Investments -- December 31, 1997
================================================================================
Market
Shares Cost Value
------ ---- ------
COMMON STOCKS -- 92.4%
BROADCASTING -- 11.8%
35,000 Ackerley Group Inc. .......... $ 103,983 $ 592,813
12,500 Audiofina .................... 503,099 509,448
4,635 Chris-Craft Industries Inc.+ . 149,561 242,468
2,000 Fisher Companies Inc. ........ 109,500 240,000
40,000 Flextech plc+ ................ 264,035 346,851
12,500 Granite Broadcasting Corp.+ .. 143,013 113,281
5,000 LIN Television Corp.+ ........ 156,484 272,500
55,000 Mediaset SpA ................. 259,119 270,334
250 Nippon Television Broadcasting 68,339 73,642
4,086 NRJ SA ....................... 572,487 569,173
5,000 Pathe SA ..................... 945,999 970,767
65,000 Paxson Communications Corp.+ . 605,085 479,375
5,000 Tokyo Broadcasting System Inc. 83,029 63,451
500 TV Francaise.................. 50,824 51,115
----------- -----------
4,014,557 4,795,218
----------- -----------
BUSINESS SERVICES -- 0.9%
8,000 Berlitz International Inc.+ .. 109,750 213,000
10,000 Trans-Lux Corp. .............. 102,875 147,500
----------- -----------
212,625 360,500
----------- -----------
CABLE DISTRIBUTION -- 12.9%
25,000 Cablevision Systems Corp.,
Cl. A+ ..................... 847,167 2,393,749
20,000 Comcast Corp., Cl. A ......... 332,675 637,500
10,000 Comcast UK Cable Partners Ltd.,
Cl. A....................... 106,250 94,375
25,000 Tele-Communications Inc.,
Cl. A+...................... 443,968 698,438
20,000 Tele-Communications
International Inc., Cl. A+ . 304,682 360,000
30,000 TCI Ventures Group ........... 591,781 849,375
20,000 United International Holdings
Inc., Cl. A+................ 265,788 230,000
----------- -----------
2,892,311 5,263,437
----------- -----------
CABLE PROGRAMMERS -- 10.1%
12,500 BET Holdings Inc.+ ........... 250,300 682,813
6,000 Canal+ ....................... 1,118,091 1,116,050
5,000 Canal+, Sponsored, ADR ....... 148,613 186,008
7,000 Gaylord Entertainment Co. .... 172,143 223,563
52,000 Tele-Communications Inc./
Liberty Media Group, Cl. A+ 903,317 1,884,999
----------- -----------
2,592,464 4,093,433
----------- -----------
COMMUNICATIONS EQUIPMENT -- 2.6%
5,000 Lucent Technologies Inc. ..... 135,000 399,375
25,000 NextLevel Systems Inc.+ ...... 354,888 446,875
2,500 Northern Telecom Ltd. ........ 93,281 222,500
----------- -----------
583,169 1,068,750
----------- -----------
CONSUMER SERVICES -- 2.5%
20,000 HSN Inc.+ .................... 446,253 $ 1,030,000
----------- -----------
ENTERTAINMENT -- 1.8%
50,332 Ascent Entertainment Group
Inc.+....................... 504,882 522,194
2,329 EMI Group plc ................ 18,219 20,088
10,800 EMI Group plc,
Sponsored ADR............... 163,971 186,322
----------- -----------
687,072 728,604
----------- -----------
ENTERTAINMENT DISTRIBUTION -- 1.8%
15,000 GC Companies Inc.+ ........... 467,520 710,625
----------- -----------
FINANCIAL SERVICES -- 1.2%
10,000 Scripps Bank ................. 441,356 484,375
----------- -----------
GLOBAL MEDIA and ENTERTAINMENT -- 17.5%
12,500 Havas SA ..................... 866,267 899,705
25,000 Havas, ADR ................... 460,000 449,850
15,000 News Corp. Ltd., ADR ......... 320,938 334,688
16,000 News Corp. Ltd., Preference
Shares ADR.................. 243,603 318,000
1,500 PolyGram NV, ADR ............. 60,313 71,531
35,000 Seagram Co. Ltd. ............. 1,206,700 1,130,937
1,200 Sony Corp., ADR .............. 66,299 108,900
15,000 Time Warner Inc. ............. 776,950 930,000
45,000 Viacom Inc., Cl. A+ .......... 1,354,481 1,839,374
25,000 Viacom Inc., Cl. B+ .......... 694,957 1,035,938
----------- -----------
6,050,508 7,118,923
----------- -----------
INTERNATIONAL TELECOMMUNICATIONS -- 8.2%
18,000 BC Telecom Inc. .............. 341,827 559,741
20,000 BCE Inc. ..................... 375,983 666,250
5,500 Cable & Wireless plc, ADR .... 138,365 149,531
200 DDI Corp...................... 797,037 530,683
100,000 Telecom Italia SpA+ .......... 405,164 441,177
500 Telecomunicacoes Brasileiras SA
(Telebras), Sponsored ADR .. 12,250 58,219
10,000 Telefonica de Espana, ADR .... 433,683 910,625
----------- -----------
2,504,309 3,316,226
----------- -----------
PUBLISHING -- 9.2%
60,000 Arnoldo Mondadori Editore
SpA+........................ 441,697 471,719
1,000 Central Newspapers Inc.,
Cl. A....................... 38,550 73,938
45,000 Editoriale L'Espresso SpA+ ... 216,058 216,347
1,000 Filipacchi Medias ............ 178,514 207,784
10,000 Golden Books Family
Entertainment Inc.+......... 102,335 103,125
37,500 Independent Newspapers Ltd. .. 114,689 203,110
6,000 Knight-Ridder Inc. ........... 187,554 312,000
5,000 Lagardere Groupe SCA+ ........ 167,228 165,396
7,500 McGraw-Hill Companies Inc. ... 341,795 554,999
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
The Gabelli Global Interactive Couch Potato(R) Fund
Portfolio of Investments (Continued) -- December 31, 1997
================================================================================
Market
Shares Cost Value
------ ---- ------
COMMON STOCKS (continued)
PUBLISHING (continued)
5,000 Meredith Corp. ............... $ 56,931 $ 178,438
5,000 New York Times Co., Cl. A .... 124,000 330,625
5,000 Pulitzer Publishing Co. ...... 155,220 314,063
3,000 Scripps (E. W.) Co. .......... 87,097 145,313
3,500 Times Mirror Co., Cl. A ...... 68,374 215,250
10,000 United Newspapers plc, ADR ... 162,250 232,500
----------- -----------
2,442,292 3,724,607
----------- -----------
SATELLITE -- 1.6%
15,000 COMSAT Corp. ................. 287,964 363,750
7,500 General Motors Corp., Cl. H .. 202,969 277,031
12 Raytheon Co., Cl. A........... 517 581
----------- -----------
491,450 641,362
----------- -----------
TELECOMMUNICATIONS -- 6.8%
40,000 Citizens Utilities Co., Cl. B+ 357,465 385,000
20,000 Frontier Corp. ............... 345,063 481,250
15,000 GTE Corp. .................... 620,250 783,751
75,000 Rogers Communications Inc.,
Cl. B+...................... 392,741 361,630
10,000 Southern New England
Telecommunications Corp. ... 427,188 503,125
45,000 Viatel Inc.+ ................. 267,718 225,000
----------- -----------
2,410,425 2,739,756
----------- -----------
WIRELESS COMMUNICATIONS -- 3.5%
17,500 AirTouch Communications Inc.+ 480,688 727,344
12,500 NEXTEL Communications Inc.,
Cl. A+...................... 159,289 325,000
5,000 Vodafone Group plc, ADR ...... 145,705 362,500
----------- -----------
785,682 1,414,844
----------- -----------
TOTAL COMMON STOCKS........... 27,021,993 37,490,660
----------- -----------
CONVERTIBLE PREFERRED STOCKS -- 0.1%
PUBLISHING -- 0.1%
500 Golden Books Family
Entertainment Inc. 8.75%
Cv. Pfd. (a)................ 25,000 26,500
----------- -----------
TOTAL CONVERTIBLE
PREFERRED STOCKS............ 25,000 26,500
----------- -----------
PREFERRED STOCKS -- 0.8%
BROADCASTING -- 0.8%
150,000 Village Roadshow Ltd. Pfd. ... 292,306 308,452
----------- -----------
COMMUNICATIONS EQUIPMENT -- 0.0%
200 Nokia Group AB Preference Pfd. 5,718 14,000
----------- -----------
TOTAL PREFERRED STOCKS........ 298,024 322,452
----------- -----------
Principal Market
Amount Cost Value
------ ---- -----
CONVERTIBLE CORPORATE BONDS -- 3.0%
CONSUMER SERVICES -- 2.4%
$500,000 HSN Inc. Sub. Deb. Cv.
5.875%, 03/01/06 (a)........ $ 500,000 $ 966,250
----------- -----------
ENTERTAINMENT -- 0.6%
50,000 Savoy Pictures Entertainment Inc.
7.00%, 07/01/03 ............ 41,739 46,750
200,000 Viacom Inc. Sub. Deb. Cv.
8.00%, 07/07/06............. 139,718 202,750
----------- -----------
181,457 249,500
----------- -----------
TOTAL CONVERTIBLE
CORPORATE BONDS............. 681,457 1,215,750
----------- -----------
U.S. GOVERNMENT OBLIGATIONS -- 2.3%
943,000 U.S. Treasury Bills, 4.978% to
5.393%, due 01/02/98 to
02/19/98.................... 939,235 939,210
----------- -----------
TOTAL U.S. GOVERNMENT
OBLIGATIONS................. 939,235 939,210
----------- -----------
TOTAL INVESTMENTS
-- 98.6% ................... $28,965,709 39,994,572
----------- -----------
Other Assets and Liabilities
(Net) -- 1.4%............... 563,093
-----------
NET ASSETS -- 100.0%
(2,839,932 shares outstanding) $40,557,665
===========
NET ASSET VALUE, Offering
and Redemption Price
Per Share .................. $ 14.28
======
Number of
Contracts
- ---------
FUTURES CONTRACTS-SHORT POSITION
(5) S&P 500 03/98................. $(1,199,375) $(1,223,875)
(5) S&P 500 03/98................. (1,180,625) (1,223,875)
(5) S&P 500 03/98................. (1,183,875) (1,223,875)
----------- -----------
TOTAL FUTURES
CONTRACTS................... $(3,563,875) $(3,671,625)
=========== ===========
- ----------
For Federal income tax purposes:
Aggregate cost................... $29,079,401
===========
Gross unrealized appreciation ... 11,684,857
Gross unrealized depreciation ... (769,686)
-----------
Net unrealized appreciation. .... $10,915,171
===========
- ----------
(a) Security exempt from registration under Rule 144A of the Securities Act of
1933, as amended. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At December
31, 1997, the market value of Rule 144A securities amounted to $992,750 or
2.4% of net assets.
+ -- Non-income producing security
ADR -- American Depositary Receipt
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
The Gabelli Global Interactive Couch Potato(R) Fund
Statement of Assets and Liabilities
December 31, 1997
==================================================================
Assets:
Investments, at value (cost $28,965,709) .... $39,994,572
Foreign cash, at value (cost $98,292)........ 98,879
Receivable for Fund shares sold.............. 1,608,761
Receivable for investments sold.............. 1,490,538
Dividends and interest receivable............ 59,921
Deferred organizational expenses............. 12,835
Other assets................................. 5,227
-----------
Total Assets............................... 43,270,733
-----------
Liabilities:
Payable to custodian......................... 540,154
Payable for investments purchased............ 1,983,364
Payable for Fund shares redeemed............. 16,978
Payable for investment advisory fees......... 32,216
Payable for distribution fees................ 22,519
Other liabilities............................ 117,837
-----------
Total Liabilities.......................... 2,713,068
-----------
Net Assets (applicable to 2,839,932
shares outstanding)...................... $40,557,665
===========
Net Asset Value, offering and redemption
price per share.......................... $ 14.28
=======
Net Assets consist of:
Capital stock, at par value.................. $ 2,840
Additional paid-in capital................... 29,638,367
Accumulated net investment loss.............. 5,621
Accumulated undistributed net realized
gain on investments, futures contracts and
foreign currency transactions.............. (14,062)
Net unrealized appreciation on investments,
futures contracts and assets and liabilities
denominated in foreign currencies.......... 10,924,899
-----------
Total Net Assets.......................... $40,557,665
===========
Statement of Operations
For the Year Ended December 31, 1997
==================================================================
Investment Income:
Dividends (net of foreign taxes of $24,899) $ 315,624
Interest..................................... 64,508
-----------
Total Investment Income.................... 380,132
-----------
Expenses:
Investment advisory fees..................... 324,399
Distribution fees............................ 81,089
Shareholder services fees.................... 50,274
Interest expense............................. 46,534
Amortization of organizational expenses ..... 13,748
Miscellaneous expenses....................... 62,607
-----------
Total Expenses............................. 578,651
-----------
Net Investment Loss............................ (198,519)
-----------
Net Realized and Unrealized Gain on
Investments :
Net realized gain on investments, futures
contracts and foreign currency
transactions............................... 6,026,722
Net change in unrealized appreciation on
investments, futures contracts and assets
and liabilities denominated in foreign
currencies................................. 5,681,915
-----------
Net realized and unrealized gain on
investments and foreign
currency transactions ..................... 11,708,637
-----------
Net increase in net assets resulting from
operations .................................. $11,510,118
===========
Statement of Changes in Net Assets
================================================================================
Year Ended December 31,
-----------------------
1997 1996
---- ----
Operations:
Net investment loss............................ $ (198,519) $ (247,451)
Net realized gain on investments, futures
contracts and foreign currency transactions.. 6,026,722 3,431,462
Net change in unrealized appreciation on
investments, futures contracts and assets and
liabilities denominated in foreign currencies 5,681,915 850,290
----------- -----------
Net increase in net assets resulting from
operations................................. 11,510,118 4,034,301
----------- -----------
Distributions to shareholders:
From net realized gain on investments.......... (5,839,077) (3,479,394)
----------- -----------
Share transactions:
Net increase in net assets from Fund share
transactions................................. 3,107,627 (214,945)
----------- -----------
Net increase in net assets................... 8,778,668 339,962
Net Assets:
Beginning of period............................ 31,778,997 31,439,035
----------- -----------
End of period.................................. $40,557,665 $31,778,997
=========== ===========
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
The Gabelli Global Interactive Couch Potato(R) Fund
Notes to Financial Statements
================================================================================
1. Significant Accounting Policies. The Gabelli Global Interactive Couch Potato
Fund (the "Fund"), a series of Gabelli Global Series Funds, Inc. (the
"Corporation"), was organized on July 16, 1993 as a Maryland corporation. The
Fund is a non-diversified, open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "Act"), and one of
five separately managed portfolios of the Corporation, whose primary objective
is capital appreciation. The Fund commenced operations on February 7, 1994. The
preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies followed by the Fund in the preparation of its
financial statements. Security Valuation. Portfolio securities listed or traded
on a nationally recognized securities exchange, quoted by the National
Association of Securities Dealers Automated Quotations, Inc. ("Nasdaq") or
traded on foreign exchanges are valued at the last sale price on that exchange
(if there were no sales that day, the security is valued at the average of the
bid and asked prices). All other portfolio securities for which over-the-counter
market quotations are readily available are valued at the latest average of the
bid and asked prices. When market quotations are not readily available,
portfolio securities are valued at their fair value as determined in good faith
under procedures established by and under the general supervision of the
Corporation's Directors. Short term debt securities with remaining maturities of
60 days or less are valued at amortized cost, unless the Directors determine
such does not reflect the securities' fair value, in which case these securities
will be valued at their fair value as determined by the Directors. Options are
valued at the last sale price on the exchange on which they are listed. If no
sales of such options have taken place that day, they will be valued at the mean
between their closing bid and asked prices.
Repurchase Agreements. The Fund may enter into repurchase agreements with
government securities dealers recognized by the Federal Reserve Board, with
member banks of the Federal Reserve System or with other brokers or dealers that
meet credit guidelines established by the Directors. Under the terms of a
typical repurchase agreement, the Fund takes possession of an underlying debt
obligation subject to an obligation of the seller to repurchase, and the Fund to
resell, the obligation at an agreed-upon price and time, thereby determining the
yield during the Fund's holding period. The Fund will always receive and
maintain securities as collateral whose market value, including accrued
interest, will be at least equal to 100% of the dollar amount invested by the
Fund in each agreement. The Fund will make payment for such securities only upon
physical delivery or upon evidence of book entry transfer of the collateral to
the account of the custodian. To the extent that any repurchase transaction
exceeds one business day, the value of the collateral is marked-to-market on a
daily basis to maintain the adequacy of the collateral. If the seller defaults
and the value of the collateral declines or if bankruptcy proceedings are
commenced with respect to the seller of the security, realization of the
collateral by the Fund may be delayed or limited.
Futures Contracts. The Fund may engage in futures contracts for the purpose of
hedging against changes in the value of its portfolio securities and in the
value of securities it intends to purchase. Upon entering into a futures
contract, the Fund is required to deposit with the broker an amount of cash or
cash equivalents equal to a certain percentage of the contract amount. This is
known as the "initial margin". Subsequent payments ("variation margin") are made
or received by the Fund each day, depending on the daily fluctuation of the
value of the contract. The daily changes in the contract are recorded as
unrealized gains or losses. The Fund recognizes a realized gain or loss when the
contract is closed.
11
<PAGE>
The Gabelli Global Interactive Couch Potato(R) Fund
Notes to Financial Statements (Unaudited) (Continued)
================================================================================
Foreign Currency Translations. The books and records of the Fund are maintained
in U.S. dollars as follows:
(i) market value of investment securities and other assets and liabilities are
recorded at the exchange rate on the valuation date.
(ii) purchases and sales of investment securities, income and expenses are
recorded at the exchange rate prevailing on the respective date of such
transactions.
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Forward Foreign Currency Contracts. The Fund may engage in forward foreign
exchange contracts for hedging a specific transaction with respect to either the
currency in which the transaction is denominated or another currency as deemed
appropriate by the Adviser. Forward foreign currency contracts are valued at the
forward rate and are marked-to-market daily. The change in market value is
recorded by the Fund as an unrealized gain or loss. When the contract is closed,
the Fund records a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and the value at the time it was
closed.
The use of forward foreign currency contracts does not eliminate fluctuations in
the underlying prices of the Fund's portfolio securities, but it does establish
a rate of exchange that can be achieved in the future. Although forward foreign
currency contracts limit the risk of loss due to a decline in the value of the
hedged currency, they also limit any potential gain that might result should the
value of the currency increase. In addition, the Fund could be exposed to risks
if the counterparties to the contracts are unable to meet the terms of their
contracts.
At December 31, 1997, the Fund had open positions in the following forward
foreign currency purchase contracts:
<TABLE>
<CAPTION>
Amount/Currency Settlement Date Proceeds Value Unrealized Gain (Loss)
--------------- --------------- ---------- ---------- ---------------------
<S> <C> <C> <C> <C>
7,475,087 Belgian Francs 01/14/98 $ 202,775 $ 201,757 $ (1,018)
9,048,275 Belgian Francs 01/14/98 245,211 244,219 (992)
4,217 French Francs 01/29/98 712 702 (10)
282,699 French Francs 01/29/98 47,758 47,061 (697)
6,004,384 French Francs 01/29/98 1,005,086 999,548 (5,538)
694,701,400 Italian Lire 01/06/98 395,211 392,931 (2,280)
---------- ---------- --------
$1,896,753 $1,886,218 $(10,535)
========== ========== ========
</TABLE>
Securities Transactions and Investment Income. Securities transactions are
accounted for on the trade date, with realized gain or loss on the sale of
investments determined by using the identified cost method. Interest income
(including amortization of premium and accretion of discount) is recorded as
earned. Dividend income is recorded on the ex-dividend date.
Dividends and Distributions to Shareholders. Dividends and distributions to
shareholders are recorded on the ex-dividend date. Income distributions and
capital gain distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments of income and gains
on various investment securities held by the Fund, timing differences and
differing characterization of distributions made by the Fund.
12
<PAGE>
The Gabelli Global Interactive Couch Potato(R) Fund
Notes to Financial Statements (Unaudited) (Continued)
================================================================================
As of December 31, 1997, the following reclassifications have been made to
increase (decrease) such accounts with offsetting adjustments made to additional
paid-in-capital:
Accumulated Undistributed Net
Accumulated Net Realized Gain on Investments
Investment (Loss) and Foreign Currency Transactions
----------------- ---------------------------------
$204,140 $(54,685)
Provision for Income Taxes. The Fund has qualified and intends to continue to
qualify as a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended. As a result, a Federal income tax provision is
not required.
Dividends and interest from non-U.S. sources received by the Fund are generally
subject to non-U.S. withholding taxes at rates ranging up to 30%. Such
withholding taxes may be reduced or eliminated under the terms of applicable
U.S. income tax treaties, and the Fund intends to undertake any procedural steps
required to claim the benefits of such treaties. If the value of more than 50%
of the Fund's total assets at the close of any taxable year consists of stocks
or securities of non-U.S. corporations, the Fund is permitted and may elect to
treat any non-U.S. taxes paid by it as paid by its shareholders.
2. Investment Advisory Agreement. The Fund has entered into an investment
advisory agreement (the "Advisory Agreement") with the Adviser which provides
that the Fund will pay the Adviser a fee, computed daily and paid monthly, at
the annual rate of 1.00% of the value of the Fund's average daily net assets. In
accordance with the Advisory Agreement, the Adviser provides a continuous
investment program for the Fund's portfolio, oversees the administration of all
aspects of the Fund's business and affairs and pays the compensation of all
Officers and Directors of the Fund who are its affiliates.
3. Organizational Expenses. The organizational expenses of the Fund are being
amortized on a straight-line basis over a period of 60 months.
4. Distribution Plan. The Fund's Board of Directors has adopted a distribution
plan (the "Plan") pursuant to Rule 12b-1 under the Investment Company Act of
1940. For the year ended December 31, 1997, the Fund incurred distribution costs
payable to Gabelli & Company, Inc., an indirect wholly-owned subsidiary of the
Adviser, of $81,089, or 0.25% of average net assets, the annual limitation under
the Plan.
5. Portfolio Securities. Purchases and sales of securities for the year ended
December 31, 1997, other than short term securities, aggregated $22,434,348 and
$27,680,202, respectively.
6. Transactions with Affiliates. During the year ended December 31, 1997, the
Fund paid brokerage commissions of $15,256 to Gabelli & Company, Inc. and other
affiliates of the Adviser.
7. Bank Loan. The Fund has access to an unsecured line of credit from the
custodian for temporary purposes. Borrowings under this arrangement bear
interest at 0.75% above the Federal Funds rate on outstanding balances. There
were no borrowings outstanding at December 31, 1997.
The average daily amount of borrowings outstanding during the year ended
December 31, 1997 was $565,863, with a related weighted average interest rate of
6.19%. The maximum amount borrowed at any time during the year ended December
31, 1997 was $2,810,000.
13
<PAGE>
The Gabelli Global Interactive Couch Potato(R) Fund
Notes to Financial Statements (Unaudited) (Continued)
================================================================================
8. Capital Stock Transactions. Transactions in shares of common stock were as
follows:
<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, 1997 December 31, 1996
------------------------- ---------------------------
Shares Amount Shares Amount
---------- ----------- --------- ------------
<S> <C> <C> <C> <C>
Shares sold ................................... 865,772 $12,613,053 978,249 $ 12,250,079
Shares issued upon reinvestment of dividends .. 376,239 5,372,567 284,978 3,348,488
Shares redeemed ............................... (1,106,550) (14,877,993) (1,240,740) (15,813,512)
---------- ----------- ---------- ------------
Net share transactions ...................... 135,461 $ 3,107,627 22,487 $ (214,945)
========== =========== ========== ============
</TABLE>
Financial Highlights
================================================================================
Selected data for a share of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------
1997 1996 1995 1994+
---- ---- ---- -----
<S> <C> <C> <C> <C>
Operating performance:
Net asset value, beginning of period......... $ 11.75 $ 11.72 $ 10.25 $ 10.00
------- ------- ------- -------
Net investment loss.......................... (0.07) (0.09) (0.01) (0.01)
Net realized and unrealized gain
on investments............................. 4.97 1.56 1.84 0.26
------- ------- ------- -------
Total from investment operations............. 4.90 1.47 1.83 0.25
------- ------- ------- -------
Distributions to shareholders:
In excess of net investment income........... -- (1.44) (0.36) --
From net realized gain on investments........ (2.37) -- -- --
------- ------- ------- -------
Net asset value, end of period................. $ 14.28 $ 11.75 $ 11.72 $ 10.25
------- ------- ------- -------
Total return(a).............................. 41.7% 12.5% 17.9% 2.5%
======= ======= ======= =======
Ratios to average net assets and supplemental data:
Net assets, end of period (in 000's)......... $40,558 $37,779 $31,439 $24,831
Ratio of net investment (loss) to
average net assets......................... (0.61)% (0.70)% (0.07)% (0.13)%(c)
Ratio of operating expenses to
average net assets(b)...................... 1.78% 2.06% 2.47% 2.47%(c)
Portfolio turnover rate...................... 68% 47% 33% 14%
Average commission rate per share (d)........ $0.0336 $0.0226 -- --
</TABLE>
- ----------
+ From commencement of operations on February 7, 1994.
(a) Total return represents aggregate total return of a hypothetical $1,000
investment at the beginning of the period and sold at the end of the period
including reinvestment of dividends. Total return for the period of less
than one year is not annualized.
(b) The Fund incurred interest expense during the year ended December 31, 1997.
If interest expense had not been incurred, the ratio of operating expenses
to average net assets would have been 1.64%.
(c) Annualized.
(d) For fiscal years beginning on or after September 1, 1995, the SEC requires
a fund to disclose its average commission rate paid per share.
14
<PAGE>
The Gabelli Global Interactive Couch Potato(R) Fund
Report of Grant Thornton LLP, Independent Auditors
================================================================================
Shareholders and Board of Directors
The Gabelli Global Interactive Couch Potato(R) Fund
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments of The Gabelli Global Interactive Couch
Potato(R) Fund (one of the Funds constituting Gabelli Global Series Funds,
Inc.), as of December 31, 1997, the related statement of operations for the year
then ended, the statement of changes in net assets for each of the two years in
the period then ended and financial highlights for each of the periods
presented. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform our audits to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1997 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of The
Gabelli Global Interactive Couch Potato(R) Fund of Gabelli Global Series Funds,
Inc. as of December 31, 1997, and the results of its operations, the changes in
its net assets and the financial highlights for the respective stated periods,
presented in conformity with generally accepted accounting principles.
/s/ Grant Thornton LLP
New York, New York
February 26, 1998
- --------------------------------------------------------------------------------
1997 TAX NOTICE TO SHAREHOLDERS (Unaudited)
For the year ended December 31, 1997, the Fund paid to shareholders, on December
31, 1997, an ordinary income dividend (comprised of short-term capital gains)
totaling $0.37 per share and long-term capital gains totaling $2.00 per share.
None of this distribution qualifies for the dividend received deduction
available to corporations or includes income from U.S. Treasury securities.
- --------------------------------------------------------------------------------
15
<PAGE>
Gabelli Global Series Funds, Inc.
The Gabelli Global Interactive Couch Potato(R) Fund
One Corporate Center
Rye, New York 10580-1434
1-800-GABELLI
[1-800-422-3554]
fax: 1-914-921-5118
http://www.gabelli.com
e-mail: [email protected]
(Net Asset Value may be obtained daily by calling
1-800-GABELLI after 6:00 P.M.)
Board of Directors
Mario J. Gabelli, CFA
Chairman and Chief
Investment Officer
Gabelli Funds, Inc.
Felix J. Christiana
Former Senior Vice President
Dollar Dry Dock Savings Bank
Anthony J. Colavita
Attorney-at-Law
Anthony J. Colavita, P.C.
John D. Gabelli
Vice President
Gabelli & Company,Inc.
Karl Otto Pohl
Former President
Deutsche Bundesbank
Werner J. Roeder, MD
Director of Surgery
Lawrence Hospital
Anthonie C. van Ekris
Managing Director
BALMAC International, Inc.
Officers and Portfolio Managers
Mario J. Gabelli, CFA
President and Chief
Investment Officer
Bruce N. Alpert
Vice President and Treasurer
Marc J. Gabelli
Portfolio Manager
James E. McKee
Secretary
Distributor
Gabelli & Company, Inc.
Custodian, Transfer Agent and Dividend Agent
State Street Bank and Trust Company
Legal Counsel
Skadden, Arps, Slate, Meagher & Flom LLP
- --------------------------------------------------------------------------------
This report is submitted for the general information of the shareholders of The
Gabelli Global Interactive Couch Potato(R) Fund. It is not authorized for
distribution to prospective investors unless preceded or accompanied by an
effective prospectus.
- --------------------------------------------------------------------------------
