UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For quarterly period ended June 30, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________ to _________________
Commission File Number: 0-20671
RENAISSANCE CAPITAL GROWTH & INCOME FUND III, INC.
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(Exact name of registrant as specified in its charter)
Texas 75-2533518
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(State or other jurisdiction (I.R.S. Employer I.D. No.)
of incorporation or organization)
8080 North Central Expressway, Dallas, Texas 75206-1857
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(Address of principal executive offices)(Zip Code)
214/891-8294
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
4,142,942 shares of common stock outstanding at June 30, 1999.
The Registrant's Registration Statement on Form N-2 was declared effective by
the Securities and Exchange Commission on May 6, 1994.
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
RENAISSANCE CAPITAL GROWTH & INCOME FUND III, INC.
Statement of Assets and Liabilities
(Unaudited)
<TABLE> Assets
<S> <S>
December 31, 1998 June 30, 1999
----------------- -------------
<C> <C>
Cash $ 2,573,144 $ 3,098,825
Accounts receivable 361,374 386,593
Accounts receivable-brokerage -0- 5,281
Temporary investments at cost -0- 1,996,114
Investments, at market value, cost of
$36,828,731 and $35,917,709 39,251,507 45,615,382
Organizational costs, net of accumulated
amortization 83,820 -0-
Other assets 52,880 39,760
----------- -----------
$42,322,725 $51,141,955
=========== ===========
Liabilities and Net Assets
Liabilities:
Accounts payable - related parties $ 218,079 $ 1,239,680
Accounts payable - trade 214,100 53,108
Dividends payable 414,845 302,896
----------- -----------
847,024 1,595,684
----------- -----------
Net Assets:
Common stock, $1 par value; 20,000,000
shares authorized; 4,342,942 issued,
4,143,448 and 4,142,942 outstanding 4,342,942 4,342,942
Additional paid-in capital 36,258,896 36,258,896
Treasury stock at cost, 199,494 shares
at December 31, 1998 and 200,000 shares
at June 30, 1999 (1,661,439) (1,665,219)
Undistributed net investment income 2,535,302 10,609,652
----------- -----------
Net assets 41,475,701 49,546,271
----------- -----------
$42,322,725 $51,141,955
=========== ===========
Net asset value per share $10.01 $11.96
====== ======
<FN>
See accompanying notes to financial statements.</FN> </TABLE> <PAGE>
RENAISSANCE CAPITAL GROWTH & INCOME FUND III, INC.
Statement of Operations
(Unaudited)
<TABLE> <S> <S>
Three Months Ended June 30, Six Months Ended June 30,
1998 1999 1998 1999
----------- ----------- ----------- -----------
<C> <C> <C> <C>
Investment Income:
Interest $ 572,596 $ 320,943 $1,184,777 $ 815,488
Dividends -0- 78,733 -0- 314,897
Other investment income 96,500 9,625 390,988 297
----------- ---------- ---------- -----------
Total investment income 669,096 409,301 1,575,765 1,130,682
----------- ---------- ---------- -----------
Expenses:
Amortization 31,092 -0- 61,842 83,820
Bank charges 5,502 5,361 9,774 10,691
Directors' fees 16,000 14,000 38,500 28,000
Legal and professional 29,745 22,761 57,662 51,076
Management fees 295,102 235,390 457,718 445,852
Taxes 7,330 27,840 7,890 27,840
Other 53,246 70,231 92,865 110,620
----------- ---------- ---------- -----------
Total expenses 438,017 375,583 726,251 757,899
----------- ---------- ---------- -----------
Net investment income 231,079 33,718 849,514 372,783
Realized gain on
investments 2,504,596 3,824,391 2,504,596 3,824,391
Unrealized gain (loss)
on investments (2,829,090) 1,190,168 4,499,723 7,274,888
----------- ---------- ---------- -----------
Net increase (decrease)
in net assets resulting
from operations $ (93,415) $5,048,277 $7,853,833 $11,472,062
============ ========== ========== ===========
<FN>
See accompanying notes to financial statements.</FN> </TABLE> <PAGE>
RENAISSANCE CAPITAL GROWTH & INCOME FUND III, INC.
Statement of Changes in Net Assets
(Unaudited)
<TABLE> <S> <S>
Three Months Ended June 30, Six Months Ended June 30,
1998 1999 1998 1999
----------- ----------- ----------- -----------
<C> <C> <C> <C>
Increase (decrease) in
net assets resulting
from operations
Investment income - net $ 231,079 $ 33,718 $ 849,514 $ 372,783
Realized gain on
investment 2,504,596 3,824,391 2,504,596 3,824,391
Unrealized gain (loss)
on investments (2,829,090) 1,190,168 4,499,723 7,274,888
----------- ----------- ----------- -----------
Net increase (decrease)
in net assets
resulting from
operations (93,415) 5,048,277 7,853,833 11,472,062
Distributions to
shareholders (2,932,935) (3,065,777) (3,314,615) (3,397,712)
Cost of shares
repurchased (842,455) -0- (842,455) (3,780)
----------- ----------- ----------- -----------
Total increase (decrease) (3,868,805) 1,982,500 3,696,763 8,070,570
Net assets
Beginning of period 52,062,928 47,563,771 44,497,360 41,475,701
----------- ----------- ----------- -----------
End of period $48,194,123 $49,546,271 $48,194,123 $49,546,271
=========== =========== =========== ===========
<FN>
See accompanying notes to financial statements.</FN> </TABLE> <PAGE>
RENAISSANCE CAPITAL GROWTH & INCOME FUND III, INC.
Notes to Financial Statements
June 30, 1999
1. Organization and Business Purpose
Renaissance Capital Growth & Income Fund III, Inc. (the "Fund"), a Texas
Corporation, was incorporated on January 20, 1994, and had no operations
prior to June 24, 1994. The Fund seeks to achieve current income and
capital appreciation potential by investing primarily in convertible
debenture and convertible preferred stock investments of small and medium
size companies which are in need of capital and which the Fund believes
offer the opportunity for growth. The Fund has elected to be treated as a
business development company under the Investment Company Act of 1940, as
amended ("1940 Act").
2. Significant Accounting Policies
A. Federal Income Taxes - The Fund intends to elect the special income tax
treatment available to "regulated investment companies" under Subchapter
M of the Internal Revenue Code in order to be relieved of federal income
tax on that part of its net investment income and realized capital gains
that it pays out to its shareholders. The Fund's policy is to comply
with the requirements of the Internal Revenue Code that are applicable
to regulated investment companies and to distribute all its taxable
income to its shareholders. Therefore, no federal income tax provision
is required.
B. Distributions to Shareholders - Dividends to shareholders are recorded
on the ex-dividend date. The Fund declared and paid a $0.74 capital
gain dividend in the quarter ended June 30, 1999, and has also declared
a $1.25 capital gain dividend which will be payable August 31, 1999 to
shareholders of record as of August 10, 1999. The ex-dividend date is
August 6, 1999. This dividend is from gains made on the sale of part
of the Fund's common stock position in JAKKS Pacific, Inc. and the
closing of the purchase of TAVA Technologies, Inc. by Real Software,
Inc. for $8.00 per share.
C. Management Estimates - The financial statements have been prepared in
conformity with generally accepted accounting principles. The
preparation of the accompanying financial statements requires estimates
and assumptions made by management of the Fund that affect the reported
amounts of assets and liabilities as of the date of the statements of
financial condition and income and expenses for the period. Actual
results could differ significantly from those estimates.
D. Financial Instruments - In accordance with the reporting requirements of
Statement of Financial Accounting Standards No. 107, "Disclosures about
Fair Value of Financial Instruments," the Company calculates the fair
value of its financial instruments and includes this additional
information in the notes to the financial statements when the fair value
is different than the carrying value of those financial instruments.
When the fair value reasonably approximates the carrying value, no
additional disclosure is made.
3. Organization Expenses
In connection with the offering of its shares, the Fund paid Renaissance
Capital Group, Inc. (the "Investment Adviser") organizational expenses of
$623,544. Such expenses were deferred and amortized on a straight-line
basis over a five-year period. These expenses were fully amortized in a
prior period. <PAGE>
RENAISSANCE CAPITAL GROWTH & INCOME FUND III, INC.
Notes to Financial Statements (Continued)
June 30, 1999
4. Investment Advisory Agreement
The Investment Adviser for the Fund is registered as an investment adviser
under the Investment Advisers Act of 1940. Pursuant to an Investment
Advisory Agreement, the Investment Adviser performs certain services,
including certain management, investment advisory and administrative
services necessary for the operation of the Fund. The Investment Adviser
receives a fee equal to .4375% (1.75% annually) of the Net Assets each
quarter. The Fund accrued a liability of $235,390 for such operational
management fees performed during the quarter ended June 30, 1999.
In addition, the Fund has agreed to pay the Investment Adviser an incentive
fee equal to 20% of any net realized capital gains after allowance for any
unrealized capital loss of the Fund. This management incentive fee is
calculated on a quarterly basis. The Fund realized a capital gain of
$4,780,489 on the sale of 303,370 shares of JAKKS Pacific, Inc. common
stock. The gain is shown on the accompanying statement of operations net
of the $956, 098 management incentive fee payable to the Investment Adviser.
5. Capital Share Transactions
As of June 30, 1999 there were 20,000,000 shares of $1 par value capital
stock authorized, 4,342,942 shares issued, 4,142,942 shares outstanding,
and additional paid-in capital aggregating $38,936,619.
Year-to-date transactions in capital stock are as follows:
<TABLE> <S> <S>
Shares Amount
--------- -----------
<C> <C>
Balance December 31, 1998 4,143,448 $38,940,399
Shares repurchased (506) (3,780)
--------- -----------
Balance June 30, 1999 4,142,942 $38,936,619
</TABLE>
6. Related Party Transactions
The Investment Adviser is reimbursed by the Fund for certain administrative
expenses under the Investment Advisory Agreement. Such expenses were
$3,636 for the quarter ended June 30, 1999.
7. Temporary Investments
Temporary investments are currently held in a money market fund made up of
U.S. Treasury obligations. As additional cash is realized from the
liquidation of investments, temporary investments will also be comprised
of U. S. Government and Agency obligations having slightly higher yields
and maturity dates of three months or less. These investments qualify for
investment as permitted in Section 55(a) (1) through (5) of the 1940 Act.
<PAGE>
RENAISSANCE CAPITAL GROWTH & INCOME FUND III, INC.
Notes to Financial Statements (Continued)
June 30, 1999
8. Investments
The Fund invests primarily in convertible securities and equity investments
of companies that qualify as Eligible Portfolio Companies as defined in
Section 2(a) (46) of the 1940 Act or in securities that otherwise qualify
for investment as permitted in Section 55(a) (1) through (5). Under the
provisions of the 1940 Act at least 70% of the Fund's assets must be
invested in Eligible Portfolio Companies. These stocks are carried on the
Statement of Assets and Liabilities as of June 30, 1999 at fair value, as
determined in good faith by the Investment Adviser. The securities held by
the Fund are unregistered and their value does not necessarily represent
the amounts that may be realized from their immediate sale or disposition.
The investments held by the Fund are convertible into the common stock of
the issuer at a set conversion price. The common stock acquired upon
exercise of the conversion feature is generally unregistered and is thinly
to moderately traded but is not otherwise restricted. The Fund generally
may register and sell such securities at any time with the Fund paying the
costs of registration, although the Fund may be entitled to demand
registrations and other registration rights which vary from investment to
investment. The preferred stock positions often have call options, usually
commencing three years subsequent to issuance, at prices specified in the
stock purchase agreements, and typically have a dividend right.
INVESTMENT VALUATION SUMMARY
<TABLE> <S> <S> <S>
CONVERSION FAIR
COST OR FACE VALUE VALUE
<C> <C> <C>
Bentley Pharmaceuticals, Inc.
12% Convertible Debenture 744,800 1,000,000 990,000
Common Stock 791,229 1,635,300 1,618,947
Dexterity Surgical, Inc.
9% Convertible Debenture 1,500,000 1,523,438 1,508,204
8% Convertible Preferred Stock 1,000,000 1,015,626 1,005,470
Common Stock 500,000 203,125 201,094
Display Technologies, Inc.
8.75% Convertible Debenture 1,750,000 1,750,000 1,750,000
Common Stock 878,189 845,492 837,037
Warrants to purchase 105,000 shares -0- -0- -0-
The Dwyer Group, Inc.
Common Stock 1,966,632 1,307,813 1,294,735
eOriginal, Inc. (formerly Document
Authentication Systems)
Bridge Loan 219,250 219,250 219,250
5% Convertible Preferred Stock 1,500,000 1,500,000 1,500,000
Warrants to purchase 659 shares 165 165 165
Fortune Natural Resources Corp.
12% Convertible Debenture 350,000 350,000 350,000
Integrated Security Systems, Inc.
Demand Promissory Notes 375,000 405,601 381,265
9% Convertible Debenture 2,084,101 2,254,170 2,133,955
Common Stock 215,899 233,517 231,182
Warrants to purchase 689,299 shares 3,750 20,071 19,092
<PAGE>
RENAISSANCE CAPITAL GROWTH & INCOME FUND III, INC.
Notes to Financial Statements (Continued)
June 30, 1999
8. Investments (continued)
INVESTMENT VALUATION SUMMARY
</TABLE>
<TABLE> <S> <S> <S>
CONVERSION FAIR
COST OR FACE VALUE VALUE
<C> <C> <C>
Interscience Computer Corporation
Common Stock 4,000,000 820,400 812,196
Warrants -0- -0- -0-
Intile Designs, Inc.
Common Stock 500,000 78,150 50,000
JAKKS Pacific, Inc.
Common Stock 4,255,625 16,490,296 16,325,393
NewCare Health Corporation
8.5% Convertible Debenture 2,500,000 2,500,000 1,150,000
Options -0- -0- -0-
Optical Security Group, Inc.
8% Convertible Debenture 500,000 500,000 500,000
Play by Play Toys & Novelties, Inc.
8% Convertible Debenture 2,500,000 2,500,000 2,500,000
Poore Brothers, Inc.
9% Convertible Debenture 1,718,094 1,932,856 1,816,885
Common Stock 154,628 206,171 143,801
Warrants to purchase 25,000 shares -0- 3,125 2,938
Simtek Corporation
9% Convertible Debenture 750,000 750,000 750,000
TAVA Technologies, Inc.
Common Stock 1,163,947 5,477,480 5,422,705
ThermoView Industries, Inc.
10% Convertible Preferred Stock 250,000 250,000 250,000
Common Stock 250,000 308,594 240,078
Voice It Worldwide, Inc.
8% Convertible Debenture 2,450,000 2,450,000 1,470,000
Common Stock 1,046,400 411,250 141,000
Warrants to purchase 500,000 shares -0- -0- -0-
---------- ---------- ----------
35,917,709 48,941,890 45,615,392
========== ========== ==========
<FN>
The fair value of debt securities convertible into common stock is the sum of
(a) the value of such securities without regard to the conversion feature, and
(b) the value, if any, of the conversion feature. The fair value of debt
of debt securities without regard to conversion features is determined on the
basis of the terms of the debt security, the interest yield and the financial
condition of the issuer. The fair value of the conversion features of a
security, if any, are based on fair values as of this date less an allowance,
as appropriate, for costs of registration, if any, and selling expenses.
Publicly traded securities, or securities that are convertible into publicly
traded securities, are valued at the last sale price, or at the average closing
bid and asked price, as of the valuation date. While these valuations are
believed to represent fair value, these values do not necessarily reflect
amounts which may be ultimately realized upon disposition of such securities.
</FN> </TABLE> <PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
(1) Material Changes in Financial Condition
The following portfolio transactions are noted for the quarter ended June 30,
1999 (portfolio companies are herein referred to as the "Company"):
Bentley Pharmaceuticals, Inc. (BNT) In the second quarter, the Fund
purchased an additional 145,100 shares of the Company's common stock on the
open market for $291,222, a cost basis of $2.01 per share.
Dexterity Surgical, Inc. (DEXT) In the second quarter, the conversion
prices on the Fund's convertible debenture and convertible preferred stock
investments were reduced to $1.60 per share according to the automatic reset
provisions of the respective investment agreements.
In addition to the Fund's conversion price resets, Renaissance U.S. Growth
and Income Trust PLC ("RUSGIT") also had the conversion prices on its
convertible debenture and convertible preferred stock investments reset to
$1.60 per share pursuant to the automatic reset provisions of the respective
investment agreements.
Display Technologies, Inc. (DTEK) In the second quarter of 1999, the Fund
purchased an additional 93,200 shares of the Company's common stock on the open
market for $378,189, a cost basis of $4.06 per share.
Fortune Natural Resources Corporation (FPX) In the second quarter of 1999,
the conversion price on the Fund's convertible debentures was reset to $0.3297
per share according to the provisions of the Convertible Debenture Agreements.
In addition to the Fund's conversion price reset, RUSGIT also had the
conversion price on its convertible debentures reset to $0.3297 per share
pursuant to the provisions of the Convertible Debenture Agreement.
Integrated Security Systems, Inc. (IZZI) In June 1999, the Company
completed the sale of its Golston subsidiary for $4.7 million. The Golston
subsidiary represented part of the collateral securing the Fund's convertible
debentures and convertible notes. The Company used $322,601 to repay the Fund
for its March 8, 1999 bridge loan of $200,000 plus $122,601 in accrued interest
and overdue advisory fees owed to the Fund.
RUSGIT also had its bridge loan, accrued interest thereon, and overdue
advisory fees repaid out of the Golston sale proceeds.
Intile Designs, Inc. (IDESQ) In the second quarter of 1999, the Fund was
advised that the Company had filed for bankruptcy protection pursuant to Chapter
11 of the Bankruptcy Code.
JAKKS Pacific, Inc. (JAKK) In the second quarter of 1999, the Fund
converted its entire convertible debenture investment into common stock of the
Company at a rate of $5.75 per share. Also in the second quarter, the Fund
sold 303,370 shares of the Company's common stock for total proceeds of
$6,524,864.08, for a gain of $4,780,489.12. The average price on the second
quarter sales of the Company's common stock was $21.51 per share. On July 1,
1999, the Fund converted its entire convertible preferred stock investment into
shares of the Company's common stock at a rate of $8.95 per share.
Subsequent to June 30, 1999, the Fund sold an additional 70,000 shares of
the Company's common stock for total proceeds of $2,112,976.15, representing a
gain of $1,710,476.22. The average sales price of shares sold after June 30,
1999 was $30.19 per share. Following the 70,000 share sale, the Fund owned
483,565 shares of the Company's common stock.
NewCare Health Corp. (NWCA) In the second quarter, the Fund reset the
conversion price on its convertible debentures to $0.8363 per share according to
the automatic reset provisions of the Convertible Debenture Agreement.
Following the reset, the Company filed for bankruptcy. The Manager immediately
placed a $1,350,000 reserve on the Fund's convertible debenture position in the
Company which has been approved by the Board of Directors as of June 30, 1999.
The reserves have been placed because the Company is in bankruptcy. This asset
value may change as the bankruptcy proceeding progresses. <PAGE>
In addition to the Fund's conversion price reset, RUSGIT also had the
conversion price on its convertible debentures reset to $0.8363 per share
pursuant to the automatic reset provisions of the Convertible Debenture
Agreement. Additionally, RUSGIT placed a $1,350,000 reserve on its convertible
debenture investment.
Simtek Corporation (SRAM) In the quarter ended June 30, 1999, the Fund had
the conversion price on its convertible debenture reset from $0.35 per share to
$0.195 per share according to the automatic reset provisions of the Convertible
Debenture Agreement.
RUSGIT also had its convertible debenture conversion price reset to $0.195
according to the automatic reset provisions of its Convertible Debenture
Agreement.
TAVA Technologies, Inc. (TAVA) In the second quarter, the Fund exercised
its warrants, enabling the Fund to purchase 25,000 shares of the Company's
common stock at $1.50 per share. In addition, the Fund exercised option rights
on 20,851 shares, which shares were purchased for a total of $l26,447, or $6.06
per share.
On July 20, 1999, the Company announced the closing of the sale of the
Company to Real Software for $8.00 per share. The total proceeds to the Fund
as a result of the transaction were $5,700,144, representing a gain of
$4,536,197.
(2) Material Changes in Operations
Net investment income of $33,718 for the quarter ended June 30, 1999, as
compared to June 30, 1998, reflects a decrease of $197,361. This reported
decrease is primarily attributable to a reserve taken of prior accrued income
on the Voice It, Inc. portfolio investment along with a conversion of debt
investments to common stock resulting in a decrease of current income. During
the second quarter, the Fund experienced $1,190,168 of unrealized gains
resulting from an increase in the fair value of its investments.
Pending investment in portfolio investments, funds are invested in temporary
cash accounts and in government securities. At June 30, 1999, all of these
funds were held in a money market fund made up of U.S. Treasury obligations and
temporary investments comprised of U.S. Government and Agency obligations having
slightly higher yields and maturity dates of three months or less.
During the quarter ended June 30, 1999, the Registrant paid dividend
distributions of income and capital gains to shareholders in the amount of
$3,131,380, and accrued dividends payable to shareholders in the amount of
$3,065,777.
(2) Year 2000
Many computer software systems in use today cannot process date-related
information from and after January 1, 2000. The Investment Advisor has taken
steps to review and modify its computer systems as necessary and is prepared
for the Year 2000. In addition, the Fund has inquired of its major service
providers as well as its portfolio companies to determine if they are in the
process of reviewing their systems with the same goals. The majority of all
providers and portfolio companies have represented that they are either taking
the necessary steps to be prepared or are currently prepared for the Year 2000.
Should any of the computer systems employed by the major service providers, or
companies in which the Fund has an investment, fail to process this type of
information properly, that could have a negative impact on the Fund's
operations and the services provided to the Fund's stockholders. It is
anticipated that the Fund will incur no material expenses related to the Year
2000 issues.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Fund has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
RENAISSANCE CAPITAL GROWTH & INCOME FUND III, INC.
August 12, 1999 /S/
--------------------------------------------------
Russell Cleveland, President and Chairman
August 12, 1999 /S/
--------------------------------------------------
Barbe Butschek, Corp. Secretary and Treasurer
<PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<INVESTMENTS-AT-COST> 37,913,823
<INVESTMENTS-AT-VALUE> 47,611,496
<RECEIVABLES> 391,874
<ASSETS-OTHER> 39,760
<OTHER-ITEMS-ASSETS> 3,098,825
<TOTAL-ASSETS> 51,141,955
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,595,684
<TOTAL-LIABILITIES> 1,595,684
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 38,936,619
<SHARES-COMMON-STOCK> 4,142,942
<SHARES-COMMON-PRIOR> 4,143,448
<ACCUMULATED-NII-CURRENT> 153,364
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 758,615
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 9,697,673
<NET-ASSETS> 49,546,271
<DIVIDEND-INCOME> 314,897
<INTEREST-INCOME> 815,488
<OTHER-INCOME> 297
<EXPENSES-NET> 757,899
<NET-INVESTMENT-INCOME> 372,783
<REALIZED-GAINS-CURRENT> 3,824,391
<APPREC-INCREASE-CURRENT> 7,274,888
<NET-CHANGE-FROM-OPS> 11,472,062
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 331,935
<DISTRIBUTIONS-OF-GAINS> 3,065,777
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 8,070,570
<ACCUMULATED-NII-PRIOR> 112,526
<ACCUMULATED-GAINS-PRIOR> 2,422,776
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 445,852
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 757,899
<AVERAGE-NET-ASSETS> 45,510,986
<PER-SHARE-NAV-BEGIN> 10.01
<PER-SHARE-NII> 0.09
<PER-SHARE-GAIN-APPREC> 2.68
<PER-SHARE-DIVIDEND> 0.82
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 11.96
<EXPENSE-RATIO> 0.02
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
