<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
-------------------------------------
OR
[ ] 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 0-24412
--------------------------------------------
MACC Private Equities Inc.
---------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 42-1421406
- - ----------------------------------------------- -------------------------
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization ) Identification No.)
101 Second Street S.E., Suite 800, Cedar Rapids, Iowa 52401
------------------------------------------------------------
(Address of principal executive offices)
(Zip Code)
(319) 363-8249
-------------------------------------------------
(Registrant's telephone number, including area code)
- - --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Please 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
--- ---
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes X No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
At June 30, 1996, the registrant had issued and outstanding 1,014,813
shares of common stock.
Page 1 of 16
Exhibit Index appears at page 13
<PAGE> 2
Index
<TABLE>
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements Page
------- -------------------- ----
Condensed Consolidated Balance
Sheets (Unaudited) at June 30,
1996, and September 30, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Condensed Consolidated Statements of
Operations (Unaudited) for the three
months ended June 30, 1996, the
nine months ended June 30, 1996, the
three months ended June 30, 1995,
the four and one-half months ended
June 30, 1995, and the four and one-
half months ended February 15, 1995 . . . . . . . . . . . . . . . . . . . . . 4
Condensed Consolidated Statements
of Cash Flows (Unaudited) for the nine
months ended June 30, 1996, the four and
one-half months ended June 30, 1995,
and the four and one-half months ended
February 15, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Notes to Condensed Consolidated
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Item 2. Management's Discussion and Analysis
of Financial Condition and Results Of Operations . . . . . . . . . . . . . . . . 7
PART II. OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Item 2. Changes in Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . . . . . . . . . . 10
Signatures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
EXHIBIT INDEX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
</TABLE>
2
<PAGE> 3
PART 1 -- FINANCIAL INFORMATION
Item 1. Financial Statements.
MACC PRIVATE EQUITIES INC.
Condensed Consolidated Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
June 30, September 30,
1996 1995
--------------- ---------------
<S> <C> <C>
Assets
Loans and investments in portfolio securities at market
or fair value, cost of $13,528,214 $13,478,226 12,315,330
U.S. treasury bills, at cost which approximates market 10,541,758 10,047,197
Cash and cash equivalents 1,983,107 1,808,430
Receivables:
Dividends and interest 195,346 264,526
Investments securities sold 219,392 1,858,436
Other assets, net 635,748 700,466
Deferred income tax 1,115,000 1,012,000
----------- ----------
Total assets $28,168,577 28,006,385
=========== ==========
Liabilities and stockholders' equity
Liabilities:
Debentures payable net of discount $10,234,237 10,228,647
Accrued interest 104,574 259,662
Accounts payable and other liabilities 105,810 335,955
----------- ----------
Total liabilities 10,444,621 10,824,264
Stockholders' equity:
Common stock, $.01 par value;
2,000,000 shares authorized;
1,014,813 shares issued and
outstanding; 996,539 issued and
outstanding in 1995 (Note 2) 10,148 9,965
Additional paid-in-capital 16,438,148 15,379,348
Net investment (loss) income (150,665) 103,653
Net realized gain on investments 1,485,642 1,102,697
Unrealized (depreciation) appreciation on
investments (59,317) 586,458
----------- ----------
Total stockholders' equity $17,723,956 17,182,121
----------- ----------
Total liabilities and stockholders' equity $28,168,577 28,006,385
=========== ==========
Net assets per share $17.47 $17.24
====== ======
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
<PAGE> 4
MACC PRIVATE EQUITIES INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
MACC Private MACC Private MACC Private MACC Private MorAmerica
Equities Inc. Equities Inc. Equities Inc. Equities Inc. Financial Corp.
(Successor Co. (Successor Co. (Successor Co. (Successor Co. (Predecessor Co.
See Note 1) See Note 1) See Note 1) See Note 1) See Note 1)
For the three For the nine For the three For the four For the four
months ended months ended months ended and one-half and one-half
June 30, June 30, June 30, months ended months ended
1996 1996 1995 June 30, 1995 February 15, 1995
---------------- ---------------- --------------- ------------- ----------------
<S> <C> <C> <C> <C> <C>
Investment income:
Interest $358,980 999,984 293,178 432,563 253,737
Dividends 26,635 97,216 159,622 168,156 195,205
Earnings of liquidating
trust 0 0 79,907 79,907 0
Gain on sale of assets 0 0 (3,916) 0 0
Other 147,999 158,206 2,881 3,249 7,303
---------------- ---------------- --------------- ------------- ----------------
Total Income 533,614 1,255,406 531,672 683,875 456,245
---------------- ---------------- --------------- ------------- ----------------
Operating expenses:
Interest 222,685 664,490 220,795 331,188 328,532
Management fees 143,119 457,076 152,392 228,589 217,844
Professional fees 28,255 200,695 38,921 72,193 106,742
Other operating expenses 126,094 203,679 69,173 87,183 74,811
Change in provision for
doubtful accounts (9,961) (16,216) (59,397) (59,397) 0
---------------- ---------------- --------------- ------------- ----------------
Total operating expenses 510,172 1,509,724 421,884 659,756 727,929
---------------- ---------------- --------------- ------------- ----------------
Investment income
(expense) net 23,442 (254,318) 109,788 24,119 (271,684)
---------------- ---------------- --------------- ------------- ----------------
Realized and unrealized (loss)
gain on investments:
Net realized gain
on investments 326,541 984,945 71,169 71,169 4,514,338
Net change in
unrealized
appreciation on
investments (588,799) (645,775) 9,560 (184,395) (948,191)
---------------- ---------------- --------------- ------------- ----------------
Net (loss) gain on
investments before
income taxes (262,258) 339,170 80,729 (113,226) 3,566,147
Income taxes (345,000) (602,000) 0 0 0
---------------- ---------------- --------------- ------------- ----------------
Net (loss) gain on
investments (607,258) (262,830) 80,729 (113,226) 3,566,147
Net change in net assets
from operations before
reorganization items (583,816) (517,148) 190,517 (89,107) 3,294,463
Reorganization items:
Professional fees 0 0 0 0 97,946
Adjustment to allowance
on notes receivable 0 0 0 0 (286,006)
Fresh-start adjustment to
debentures payable 0 0 0 0 (65,848)
---------------- ---------------- --------------- ------------- ----------------
Total reorganization items 0 0 0 0 (253,908)
---------------- ---------------- --------------- ------------- ----------------
Net change in net assets
from operations $(583,816) (517,148) 190,517 (89,107) 3,548,371
================ ================ =============== ============= ================
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE> 5
MACC PRIVATE EQUITIES INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
MACC Private MACC Private MorAmerica
Equities Inc. Equities Inc. Financial Corp.
(Successor Co. See (Successor Co. See (Predecessor Co. See
Note 1) Note 1) Note 1) For the
For the nine months For the four and four
ended one-half months and one-half months
June 30, 1996 ended ended
June 30, 1995 February 15, 1995
-------------------- ------------------- --------------------
<S> <C> <C> <C>
Cash flows from operating activities:
(Decrease) increase in net assets
from operations $ (517,148) (89,107) 3,548,371
-------------------- ------------------- --------------------
Adjustments to reconcile the (decrease)
increase in net assets from operations to
net cash provided by (used in) operating
activities:
Fresh-start adjustment to debentures
payable 0 0 (65,848)
Change in provision for doubtful accounts (17,072) (59,397) (286,006)
Net realized and unrealized
(gain) loss on investments (339,170) 113,226 (3,566,147)
Deferred income taxes 602,000 0 0
Other 16,233 7,976 5,321
Change in assets and liabilities:
Decrease in receivables 1,698,895 0 0
Increase in other assets (139,629) (299,862) (342,083)
(Decrease) increase in accrued interest,
accounts payable, and other liabilities (385,250) (695,911) 405,387
-------------------- ------------------- --------------------
Total adjustments 1,436,007 (933,968) (3,849,376)
-------------------- ------------------- --------------------
Net cash provided by (used in) operating
activities: 918,859 (1,023,075) (301,005)
-------------------- ------------------- --------------------
Cash flows from investing activities:
Proceeds from disposition of and payments on
loans and investments in portfolio securities 4,333,082 354,906 10,375,352
Purchases of loans and investments in
portfolio securities (4,936,703) (2,117,529) (1,186,542)
Proceeds from disposition of other investments 12,658,207 1,011,782 100,000
Purchases of other investments (11,368,467) (3,746,242) (4,940,974)
-------------------- ------------------- --------------------
Net cash provided by (used in)
investing activities 686,119 (4,497,083) 4,347,836
-------------------- ------------------- --------------------
Cash flows from financial activities:
Principal payments on long-term debt 0 0 (607,669)
Proceeds from issuance of common stock 354,000 0 0
-------------------- ------------------- --------------------
Net cash provided by (used in)
investing activities 354,000 0 (607,669)
-------------------- ------------------- --------------------
Net increase (decrease) in cash and cash
equivalents 1,958,978 (5,520,158) 3,439,162
Cash and cash equivalents at
beginning of period 6,255,803 9,937,308 6,498,146
==================== =================== ====================
Cash and cash equivalents at
end of period $ 8,214,781 4,417,150 9,937,308
==================== =================== ====================
Supplemental disclosures of cash flow information:
Cash paid during the period for interest $ 812,151 439,136 373,271
==================== =================== ====================
Cash paid during the period for
income taxes $ 0 20,000 0
==================== =================== ====================
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
<PAGE> 6
MACC PRIVATE EQUITIES INC.
Notes to Condensed Consolidated Financial Statements
June 30, 1996, September 30, 1995, June 30, 1995, and February 15, 1995
(1) Basis of Presentation
The accompanying condensed consolidated financial statements, which
include the accounts of MACC Private Equities Inc. and its wholly-owned
subsidiaries MorAmerica Capital Corporation and MorAmerica Realty Services,
Inc. (the "Company"), after February 15, 1995 (the "Successor Company"), and
MorAmerica Financial Corporation and subsidiaries prior to February 15, 1995
(the "Predecessor Company"), have been prepared in accordance with generally
accepted accounting principles for investment companies. All significant
intercompany accounts and transactions have been eliminated in consolidation.
On February 15, 1995, the Company consummated a Plan of Reorganization
(the "Plan") as confirmed by the United States Bankruptcy Court for the
Northern District of Iowa on December 28, 1993. Under terms of the Plan,
MorAmerica Financial Corporation and its subsidiaries, exclusive of MorAmerica
Capital Corporation and MorAmerica Realty Services, Inc., merged into the
Company, a business development company regulated by the Securities and
Exchange Commission. As of February 15, 1995, the Company adopted fresh-start
reporting in accordance with the American Institute of Certified Public
Accountants Statement of Position 90-7, Financial Reporting by Entities in
Reorganization under the Bankruptcy Code. Since the financial statements on a
fresh-start basis are not comparable with those of the Predecessor Company, the
Company has presented the financial statements required for Form 10-Q reporting
on a predecessor-successor company basis.
The financial statements included herein have been prepared in
accordance with generally accepted accounting principles for interim financial
information and instructions to Form 10-Q and Article 6 of Regulation S-X. The
financial statements should be read in conjunction with the consolidated
financial statements and notes thereto of MACC Private Equities Inc. and
Subsidiaries (Successor Company) as of and for the year ended September 30,
1995. The information reflects all adjustments consisting of normal recurring
adjustments which are, in the opinion of management, necessary for a fair
presentation of the results of operations for the interim periods. The results
of the interim period reported are not necessarily indicative of results to be
expected for the year.
(2) Common Stock
During the quarter ended June 30, 1996, the Company issued 20,000
shares of common stock to Zions Bancorporation at a per share price of $17.70,
representing net asset value per share as of March 31, 1996.
6
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
RESULTS OF OPERATIONS
Third Quarter and Nine Months Ended June 30, 1996, Compared to Third
Quarter and Nine Months Ended June 30, 1995.
The results of operations for the four and one-half months ended June
30, 1995, have been combined with the results of operations for the four and
one-half months ended February 15, 1995, for purposes of discussing the results
of operations for the prior year nine-month period.
During the current year, third quarter total income of $533,614 was
approximately equal to total income of $531,672 for the prior year third
quarter. In the current year as compared to the prior year quarter period
interest income increased $65,802, dividend income decreased $132,987, and
other income increased $145,118. Interest increased due to increased
investment activity and interest on short term investments. Dividends
decreased due to the extraordinary dividends received on a portfolio company's
stock prior to that issuer's public offering in July 1995. Other income
increased primarily as a result of processing fees earned on new equity
investments to offset costs associated with those investments of $61,241, and
adjustment of the accrual for a lawsuit against a subsidiary in the amount of
$12,500 to reflect the final settlement, and $65,502 representing the estimated
initial recovery under the subsidiary's insurance policy.
For the current year nine-month period, total income of $1,255,406
increased 10% over total income of $1,140,120 in the prior year nine-month
period. For the current year nine-month period as compared to the prior year
nine-month period, interest income increased substantially while dividend
income decreased due to extraordinary distributions received in the second and
third quarters of fiscal year 1995.
Total operating expenses for the third quarter and nine-month period
of the current year total $510,172 and $1,509,724, respectively, an increase of
approximately 21% and 9%, respectively, as compared to total operating expenses
for the prior year third quarter of $421,884 and nine-month period of
$1,387,685. The major reasons for the increase in operating expenses for the
third quarter and the nine-month period are an increase in other operating
expenses associated with public company reporting requirements and
communication with shareholders and reduction of the provision for doubtful
accounts.
During the current year third quarter, the Company recorded a net loss
on investments before income taxes of ($262,258), as compared with a net gain
on investments of $80,729 during the prior year period. Net gain on
investments of $339,170 for the current year nine-month period as
7
<PAGE> 8
compared to net gains on investments of $3,452,921 in the prior year period
represent a decrease of 90%. Management does not attempt to maintain a
comparable level of realized gains from year to year or quarter to quarter but
instead attempts to maximize total investment portfolio appreciation through
realizing gains in the disposition of securities and investing in new portfolio
investments.
INCOME TAXES
During the current year third quarter and nine-month period the
Company utilized a portion of its deferred tax assets relating to net operating
loss carryforwards at the fresh-start date. Under fresh-start reporting, such
utilization resulted in charges to operations of $345,000 and $602,000 in the
current year third quarter and nine-month period, respectively, for the
reduction in deferred tax assets. During the current year third quarter and
nine-month period, respectively, the Company recorded increases of $345,000 and
$705,000 in deferred tax assets based upon its projection of future taxable
income. The $345,000 and $705,000 increases in deferred tax assets resulted in
corresponding increases in paid-in capital for the current year third quarter
and nine-month period, respectively, under fresh-start reporting.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 1996, the Company's U.S. treasury bills, cash and cash
equivalents totaled $12,524,865.
The Company, through its wholly-owned subsidiary, MorAmerica Capital
Corporation, from time to time may seek to procure additional capital through
the Small Business Investment Company ("SBIC") capital program to provide a
portion of its future investment requirements. At present there is
availability of capital through the SBIC program and the Company anticipates
there will be capital available in future periods. The Company does not now
need additional capital to meet its investment goals.
The Company believes that its liquid assets as of June 30, 1996, will
provide adequate funds for the Company's anticipated cash requirements over the
next twelve months, including investment activities, operating expenses and the
repurchase of up to five percent of the outstanding shares of the Company's
common stock from holders of fewer than 100 shares each. It is anticipated
that this repurchase will be completed prior to the end of the current fiscal
year on September 30, 1996.
PORTFOLIO ACTIVITY
During the three months ended June 30, 1996, the Company invested
$2,859,762 in seven portfolio companies, consisting of $2,325,844 invested in
three new portfolio companies and $533,918 invested in follow-on investments in
four existing portfolio companies. For the nine months ended June 30, 1996,
the Company made total investments of $4,936,704 in 11 portfolio companies,
consisting of $4,069,814 invested in four new portfolio companies and $866,890
invested in follow-on investments in seven existing portfolio companies. The
Company's investment
8
<PAGE> 9
level objectives for the current fiscal year call for total new and follow-on
investments of $7,000,000. Based upon the total amount of new and follow-on
investments made during the nine months ended June 30, 1996, the Company
anticipates that it should be close to meeting its investment level objectives
for the current fiscal year.
DETERMINATION OF NET ASSET VALUE
The net asset value per share of the Company's outstanding common
stock is determined quarterly, as soon as practicable after and as of the end
of each calendar quarter, by dividing the value of total assets minus total
liabilities by the total number of shares outstanding at the date as of which
the determination is made.
In calculating the value of total assets, securities that are traded
in the over-the-counter market or on a stock exchange are valued in accordance
with the current valuation policies of the Small Business Administration
("SBA"). Under SBA regulations, publicly traded equity securities are valued
by taking the average of the closing prices (or bid prices in the case of
over-the-counter equity securities) for the valuation date and the preceding
two days. This policy differs from the Securities and Exchange Commission's
guidelines which utilize only a one day price measurement. The Company's use
of SBA valuation procedures did not result in a material variance as of June
30, 1996, from valuations using the Securities and Exchange Commission's
guidelines.
All other investments are valued at fair value as determined in good
faith by the Board of Directors. The Board of Directors has determined that
all other investments will be valued initially at cost, but such valuation will
be subject to semi-annual adjustments if the Board of Directors determines in
good faith that cost no longer represents fair value.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The Company's wholly-owned subsidiary MorAmerica Realty Services, Inc.
("MRS") had been the defendant in a lawsuit filed in the Circuit Court of
Tippecanoe County, Indiana, Seabolt v. MorAmerica Realty Services, Inc. d/b/a
University Inn and University Inn. On June 13, 1996, the lawsuit was
dismissed, with prejudice, in connection with the payment of $187,500 by MRS
pursuant to a written stipulated settlement between MRS and the plaintiff with
regard to all of the plaintiff's claims against MRS. A provision for estimated
loss of $200,000 had been recorded at September 30, 1995.
MRS is insured by Beverage Retailers Insurance Company ("BRICO") under
a Liquor Liability Insurance Policy; BRICO is in Vermont statutory liquidation
proceedings. By letter dated May 17, 1996, the BRICO liquidation estate
indicated that it had applied for an initial disbursement of assets at the rate
of 35% of claims. Accordingly, it is anticipated that at least
9
<PAGE> 10
35% of the $187,500 paid by MRS pursuant to the settlement and of certain legal
expenses paid by MRS will be recovered from the BRICO liquidation estate.
ITEM 2. CHANGES IN SECURITIES.
On April 30, 1996, the Company entered into an Agreement (the
"Agreement") with Zions Bancorporation ("Zions"), a bank holding company
organized under the laws of the State of Utah. Prior to the closing of the
Agreement, Zions and its affiliates had purchased approximately 4.9% of the
issued and outstanding shares of the Company's common stock on the open market.
On May 15, 1996, the Company issued 20,000 shares of the Company's
common stock to Zions pursuant to the Agreement, at a per share price of
$17.70, equal to net asset value per share as of March 31, 1996. No
underwriting discounts or commissions were incurred in connection with the
offer or sale, and the Company received aggregate offering proceeds of
approximately $354,000. Based upon the Company's compliance with all terms and
conditions of Rule 506 under the Securities Act of 1933 (the "Securities Act"),
as amended, the offer and sale of the common stock were exempt from
registration under the Securities Act by Section 4(2) and/or Rule 506
thereunder. Further discussion of other material provisions of the Agreement
may be found at ITEM 2 -- CHANGES IN SECURITIES of the Company's Form 10-Q for
the Quarterly Period ended March 31, 1996.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
There are no items to report.
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
There are no items to report.
ITEM 5. OTHER INFORMATION.
There are no items to report.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
(27) Financial Data Schedule
No other exhibits are applicable.
10
<PAGE> 11
(b) Reports on Form 8-K
On May 15, 1996, the Company filed a Report on Form 8-K with respect
to Item 5 thereof, disclosing that the Company had entered into an
Agreement (the "Agreement") with Zions Bancorporation, dated May 13,
1996, and describing the material terms of the Agreement.
[Remainder of this page intentionally left blank]
11
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MACC PRIVATE EQUITIES INC.
Date: August 12, 1996 By: /s/ David R. Schroder
---------------------------
David R. Schroder, President
Date: August 12, 1996 By: /s/ Robert A. Comey
---------------------------
Robert A. Comey, Treasurer
12
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 13,528,214
<INVESTMENTS-AT-VALUE> 10,541,758
<RECEIVABLES> 414,738
<ASSETS-OTHER> 635,748
<OTHER-ITEMS-ASSETS> 3,048,119
<TOTAL-ASSETS> 28,168,577
<PAYABLE-FOR-SECURITIES> 104,574
<SENIOR-LONG-TERM-DEBT> 10,234,237
<OTHER-ITEMS-LIABILITIES> 105,810
<TOTAL-LIABILITIES> 10,444,621
<SENIOR-EQUITY> 10,148
<PAID-IN-CAPITAL-COMMON> 16,438,148
<SHARES-COMMON-STOCK> 1,014,813
<SHARES-COMMON-PRIOR> 996,539
<ACCUMULATED-NII-CURRENT> (150,665)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1,485,642
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (59,317)
<NET-ASSETS> 17,723,956
<DIVIDEND-INCOME> 97,216
<INTEREST-INCOME> 999,984
<OTHER-INCOME> 158,206
<EXPENSES-NET> 1,509,724
<NET-INVESTMENT-INCOME> (254,318)
<REALIZED-GAINS-CURRENT> 382,945
<APPREC-INCREASE-CURRENT> (645,775)
<NET-CHANGE-FROM-OPS> (517,148)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 20,000
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 541,835
<ACCUMULATED-NII-PRIOR> 103,653
<ACCUMULATED-GAINS-PRIOR> 1,102,697
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
