<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 December 31, 1998
---------------------------------------------
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 SE, 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 Section 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 December 31, 1998, the registrant had issued and outstanding
1,246,392 shares of common stock.
Page 1 of 17
Exhibit Index appears at page 13
<PAGE> 2
<TABLE>
<CAPTION>
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements Page
----
<S> <C> <C>
Condensed Consolidated Balance
Sheets (Unaudited) at December 31,
1998, and September 30, 1998............................................... 3
Condensed Consolidated Statements of
Operations (Unaudited) for the three
months ended December 31, 1998, and
the three months ended December 31, 1997................................... 4
Condensed Consolidated Statements of
Cash Flows (Unaudited) for the three
months ended December 31, 1998, and the
three months ended December 31, 1997....................................... 5
Notes to Condensed Consolidated
Financial Statements....................................................... 6
Item 2. Management's Discussion and Analysis
of Financial Condition and Results Of Operations........................... 7
Item 3. Quantitative and Qualitative
Disclosure About Market Risk............................................... 11
PART II. OTHER INFORMATION.......................................................... 12
Item 6. Exhibits and Reports on Form 8-K........................................... 12
Signatures................................................................. 13
EXHIBIT INDEX................................................................................ 14
</TABLE>
2
<PAGE> 3
PART 1 -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MACC PRIVATE EQUITIES INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1998 1998
(UNAUDITED)
--------------- ----------------
<S> <C> <C>
Assets
Loans and investments in portfolio securities at market
or fair value, cost of $26,746,905;
$26,902,232 in 1998 $ 27,442,484 27,201,277
U.S. treasury bills, at cost, which approximates market 0 1,023,715
Certificates of deposit 297,000 297,000
Cash 2,252,717 1,287,940
Other assets, net 809,559 983,592
Deferred income taxes 501,000 501,000
--------------- ----------------
Total assets $ 31,302,760 31,294,524
=============== ================
Liabilities and stockholders' equity
Liabilities:
Debentures payable, net of discount $ 11,255,788 11,253,421
Accrued interest 111,689 284,898
Accounts payable and other liabilities 153,473 228,327
--------------- ----------------
Total liabilities 11,520,950 11,766,646
---------------- ----------------
Stockholders' equity:
Common stock, $.01 par value per share;
4,000,000 shares authorized;
1,246,392 shares issued and outstanding 12,464 12,464
Additional paid-in-capital 15,312,381 15,312,381
Net investment income 276,153 372,538
Net realized gain on investments 3,485,233 3,531,450
Unrealized appreciation on investments 695,579 299,045
--------------- ----------------
Total stockholders' equity 19,781,810 19,527,878
--------------- ----------------
Total liabilities and stockholders' equity $ 31,302,760 31,294,524
=============== ================
Net assets per share $15.87 $15.67
====== ======
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
3
<PAGE> 4
MACC PRIVATE EQUITIES INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE FOR THE THREE
MONTHS ENDED MONTHS ENDED
DECEMBER 31, DECEMBER 31,
1998 1997
------------- -------------
<S> <C> <C>
Investment income:
Interest $ 458,398 429,046
Dividends 0 78,043
Other 22,010 52,161
------------- -------------
Total income 480,408 559,250
------------- -------------
Operating expenses:
Interest 240,283 223,891
Management fees 197,666 162,965
Professional fees 49,223 48,542
Other 89,621 55,868
------------- -------------
Total operating expenses 576,793 491,266
------------- -------------
Investment (expense) income,
net before income taxes (96,385) 67,984
Income taxes 0 (27,000)
------------- -------------
Investment (expense) income, net (96,385) 40,984
------------- -------------
Realized and unrealized gain on investments:
Net realized (loss) gain on investments (46,217) 330,504
Net change in unrealized appreciation/
depreciation on investments 396,534 (358,079)
------------- -------------
Net gain (loss) on investments
before income taxes 350,317 (27,575)
Income taxes 0 11,000
------------- -------------
Net gain (loss) on investments 350,317 (16,575)
------------- -------------
Net change in net assets
from operations $ 253,932 24,409
============= =============
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
4
<PAGE> 5
MACC PRIVATE EQUITIES INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE FOR THE THREE
MONTHS ENDED MONTHS ENDED
DECEMBER 31, DECEMBER 31,
1998 1997
--------------- ----------------
<S> <C> <C>
Cash flows from operating activities:
Increase in net assets from operations $ 253,932 24,409
--------------- ----------------
Adjustments to reconcile increase in net
assets from operations to net cash
(used in) provided by operating activities:
Change in provision for doubtful accounts (50) (3,060)
Net realized and unrealized (gain) loss on investments (350,317) 27,575
Other 17,516 6,017
Change in assets and liabilities:
Receivables and other assets 112,717 295,454
Deferred income taxes 0 16,000
Accrued interest, accounts payable,
and other liabilities (248,063) (166,926)
--------------- ----------------
Total adjustments (468,197) 175,060
--------------- ----------------
Net cash (used in) provided by operating activities (214,265) 199,469
--------------- ----------------
Cash flows from investing activities:
Proceeds from disposition of and payments on
loans and investments in portfolio securities 155,327 1,115,101
Purchases of loans and investments in
portfolio securities 0 (1,769,276)
Proceeds from disposition of other investments 721,670 1,947,073
Purchases of other investments 0 (1,795,940)
--------------- ----------------
Net cash provided by (used in) investing activities 876,997 (503,042)
--------------- ----------------
Cash flows from financing activities -
Proceeds from debt issuance 0 1,000,000
--------------- ----------------
Net increase in cash and cash equivalents 662,732 696,427
Cash and cash equivalents at beginning of period 1,886,985 2,902,406
--------------- ----------------
Cash and cash equivalents at end of period $ 2,549,717 3,598,833
=============== ================
Supplemental disclosures of cash flow information -
Cash paid during the period for interest $ 411,124 373,271
=============== ================
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
5
<PAGE> 6
MACC PRIVATE EQUITIES INC.
Notes to Unaudited Condensed Consolidated Financial Statements
(1) Basis of Presentation
The accompanying unaudited condensed consolidated financial statements
include the accounts of MACC Private Equities Inc. (MACC) and its wholly-owned
subsidiary MorAmerica Capital Corporation (MorAmerica Capital) have been
prepared in accordance with generally accepted accounting principles for
investment companies. All material intercompany accounts and transactions have
been eliminated in consolidation.
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 its
Subsidiary as of and for the year ended September 30, 1998. 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.
The balance sheet information as of September 30, 1998 has been derived from the
audited balance sheet as of that date.
SFAS 130, Reporting Comprehensive Income, establishes the standards for
the reporting and display of comprehensive income in the financial statements.
Comprehensive income represents net earnings and certain amounts reported
directly in stockholders' equity, such as the net unrealized gain or loss on
available-for-sale securities. MACC adopted SFAS 130 effective October 1, 1998.
Because net unrealized gains or losses on available-for-sale securities are
included in the Statement of Operations, SFAS 130 has no effect on MACC's
financial statements.
[Remainder of page intentionally left blank]
6
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
This section contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 (the "1995
Act"). Such statements are made in good faith by MACC pursuant to the
safe-harbor provisions of the 1995 Act, and are identified as including terms
such as "may," "will," "should," "expects," "anticipates," "estimates," "plans,"
or similar language. In connection with these safe-harbor provisions, MACC has
identified in its Annual Report to Shareholders for the fiscal year ended
September 30, 1998, important factors that could cause actual results to differ
materially from those contained in any forward-looking statement made by or on
behalf of MACC, including, without limitation, the high risk nature of MACC's
portfolio investments, any failure to achieve annual investment level
objectives, changes in prevailing market interest rates, and contractions in the
markets for corporate acquisitions and initial public offerings. MACC further
cautions that such factors are not exhaustive or exclusive. MACC does not
undertake to update any forward-looking statement which may be made from time to
time by or on behalf of MACC.
RESULTS OF OPERATIONS
Three Months Ended December 31, 1998, Compared to Three Months Ended
December 31, 1997
MACC's investment income includes income from interest, dividends and
fees. Net investment income/expense represents total investment income minus
operating and interest expenses, net of applicable income taxes. The main
objective of portfolio company investments is to achieve capital appreciation
and realized gains in the portfolio. These are not included in net investment
income. However, another one of MACC's long-term goals is to achieve net
investment income and increased earnings stability in future years. In this
regard, a significant proportion of new portfolio investments are structured so
as to provide a current yield through interest or dividends. MACC also earns
interest on short term investments of cash.
During the current year, first quarter total investment income of
$480,408 was approximately 14% less than total investment income of $559,250 for
the prior year first quarter. In the current year first quarter as compared to
the prior year first quarter, interest income increased $29,352, dividend income
decreased $78,043, and other income decreased $30,151. The increase in interest
income is attributable primarily to the significant percentage of new and
follow-on portfolio investments made by MACC in the prior three years that were
structured as subordinated debentures The decrease in dividend income is due to
no dividends received in the current year first quarter as compared to dividends
received on four portfolio companies in the prior year first quarter. The
decrease in other income is due to two new portfolio company investments made in
the prior year first quarter in which MACC received processing fees at the
closing compared to no processing fees received in the current year first
quarter and a settlement received on an other asset in the prior year first
quarter.
7
<PAGE> 8
Total operating expenses for the first quarter of the current year
total $576,793, an increase of approximately 17% as compared to total operating
expenses for the prior year first quarter of $491,266. Interest expense
increased by $16,392 due to additional borrowings from the Small Business
Administration in the prior year first quarter but were not outstanding the
entire first quarter of the prior year. Management fees increased from $162,965
to $197,666 in the current year first quarter as compared to the prior year
first quarter due to the increase of assets under management. The increase of
$33,753 in other expenses is due to the increase in administrative expenses and
fees paid on the additional borrowings from the Small Business Administration.
For the current year first quarter, MACC recorded net investment
expense of ($96,385) as compared to net investment income of $40,984 during the
prior year first quarter.
During the current year first quarter, MACC recorded net realized loss
on investments before income taxes of ($46,217), as compared with net realized
gain on investments before income taxes of $330,504 during the prior year
period. MACC previously announced that it anticipated a significant gain in
connection with the potential sale of one portfolio company investment, which
was expected to occur in or before the fourth quarter of fiscal 1998. Although
that transaction was not consummated as anticipated, MACC remains optimistic
that the portfolio company investment may be sold within the next twelve months.
At this time, MACC is unable to estimate the gain, if any, that MACC would earn
with respect to any such transaction. 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.
MACC recorded net change in unrealized appreciation/depreciation on
investments of $396,534 during the current year first quarter, as compared to
($358,079) during the prior year period. Net change in unrealized
appreciation/depreciation on investments represents the change for the period in
the unrealized appreciation on MACC's total investment portfolio net of
unrealized depreciation on MACC's total portfolio investment. Generally, when
MACC increases the fair value of a portfolio investment above its cost, the
unrealized appreciation item for the portfolio as a whole increases, and when
MACC decreases the fair value of a portfolio investment below its cost, the
unrealized depreciation item for the portfolio as a whole increases. When MACC
sells an appreciated portfolio investment for a gain, unrealized appreciation
for the portfolio as a whole decreases as the gain is realized. Similarly, when
MACC sells a depreciated portfolio investment for a loss, unrealized
depreciation for the portfolio as a whole decreases as the loss is realized.
The net change in unrealized appreciation/depreciation on investments
of $396,534 recorded during the current year first quarter is the effect of
increases in the fair value of two portfolio investments. Of this amount,
$396,173 represents the increase in fair value of one publicly traded equity
investment in the MACC consolidated investment portfolio, calculated in
accordance with MACC's valuation policies.
8
.
<PAGE> 9
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
To date, MACC has relied upon several sources to fund its investment
activities, including MACC's U.S. treasury bills, cash equivalents and cash, and
the Small Business Investment Company ("SBIC") capital program operated by the
Small Business Administration (the "SBA").
MACC, through its wholly-owned subsidiary, MorAmerica Capital, from
time to time may seek to procure additional capital through the SBIC capital
program to provide a portion of its future investment capital requirements. At
present, there is availability of capital for the next three years in commitment
periods of up to five years through the SBIC capital program and MACC
anticipates that there will be capital available in future periods.
As of December 31, 1998, MACC's certificates of deposit and cash
totaled $2,549,717. MACC borrowed $1,000,000 in new SBA Guaranteed Debentures in
December 1997, obtained a commitment for an additional $1,000,000 in March 1998
and obtained a commitment for an additional $17,290,000 in June 1998. The
additional commitments of $18,290,000 are 5 year commitments. MACC believes that
its existing certificates of deposit and cash, together with available proceeds
from the additional $18,290,000 in SBA guaranteed debentures and other
anticipated cash flows, will provide adequate funds for MACC's anticipated cash
requirements during the current fiscal year and the next five years, including
portfolio investment activities, principal and interest payments on outstanding
debentures payable and administrative expenses. MACC has planned $8,500,000 in
new and follow-on investment activities during the current fiscal year.
Liquidity for the next several years will be impacted by principal
payments on MACC's debentures payable. Debentures payable are composed of
$11,290,000 in principal amount of SBA-guaranteed debentures issued by MACC's
subsidiary, MorAmerica Capital, which mature as follows: $2,450,000 in 2000,
$5,690,000 in 2001, $2,150,000 in 2003 and $1,000,000 in 2007. It is anticipated
MorAmerica Capital would be able to roll over this debt with new ten year
debentures when it matures. MorAmerica Capital has obtained a 5 year commitment
of leverage from SBA which includes commitments to refinance these debentures
for another 10 year term. As indicated above, the total amount of MorAmerica
Capital's commitment from the SBA is $18,290,000.
MACC anticipates that it may seek additional capital, either in the
form of additional SBA-guaranteed debentures issued by MorAmerica Capital or in
the form of common stock of MACC, to fund growth of MACC, to meet principal
payments, if necessary, as the outstanding SBA-guaranteed debentures become due
and payable and for other corporate purposes.
9
<PAGE> 10
PORTFOLIO ACTIVITY
During the three months ended December 31, 1998, MACC made no
investments in portfolio companies. MACC's investment level objectives for
fiscal year 1999 call for total new and follow-on investments of $8,500,000.
MACC anticipates that it will achieve its investment level objectives for the
current fiscal year. However, management views investment level objectives for
any given year as secondary in importance to MACC's overriding concern of
investing in only those portfolio companies which satisfy MACC's investment
criteria.
DETERMINATION OF NET ASSET VALUE
The net asset value per share of MACC'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 close (or bid price 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. MACC's use of SBA valuation procedures did not
result in a material variance as of December 31, 1998, 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 and on such other interim periods as are
justified by material portfolio company events if the Board of Directors
determines in good faith that cost no longer represents fair value.
YEAR 2000 COMPLIANCE
MACC anticipates that it will incur internal staff costs as well as
consulting and other expenses related to the enhancements necessary to prepare
its systems for the year 2000, and expects to be complete with the year 2000
project by June 30, 1999. Based on MACC's current knowledge, the expense of the
year 2000 projects as well as the related potential effect on MACC's earnings is
not expected to have a material effect on MACC's financial position or results
of operations. MACC's current estimate for fiscal 1999 expenses of the year 2000
project are not expected to exceed $50,000. MACC is aware of potential year 2000
risks and the possible adverse impact resulting from failures by third parties
(such as banks and vendors) and portfolio companies to adequately address year
2000 problems. MACC could
10
<PAGE> 11
incur losses if portfolio companies incur business losses related to the year
2000. To date, MACC has not yet been advised by such parties that they do not
have plans in place to address and correct the issues associated with the year
2000; however, no assurance can be given as to the adequacy of such plans or to
the timeliness of their implementation. MACC's computer operations are not
complex and functions can be performed manually for some period of time.
ITEM 3. QUANTITATIVE AND QUALITAtIVE DISCLOSURE ABOUT MARKET RISK
MACC is exposed to market risk from changes in market prices of
publicly traded equity securities held in the MACC consolidated investment
portfolio. At December 31, 1998, publicly traded equity securities in the MACC
consolidated investment portfolio were recorded at a fair value of $977,227. In
accordance with MACC's valuation policies and SBA regulations, the fair value of
publicly traded equity securities is determined based upon the average of the
closing prices (or bid price in the case of over-the-counter equity securities)
for the valuation date and the preceding two days. The publicly traded equity
securities in the MACC consolidated investment portfolio thus have exposure to
price risk, which is estimated as the potential loss in fair value due to a
hypothetical 10% adverse change in quoted market prices, and would amount to a
decrease in the recorded value of such publicly traded equity securities of
approximately $97,723. Actual results may differ.
MACC is also exposed to market risk from changes in market interest
rates that affect the fair value of MorAmerica Capital's debentures payable
determined in accordance with Statement of Financial Accounting Standards No.
107, Disclosures About Fair Value of Financial Instruments. The estimated fair
value of MorAmerica Capital's outstanding debentures payable at December 31,
1998, was $11,540,000, with a cost of $11,290,000. Fair value of MorAmerica
Capital's outstanding debentures payable is calculated by discounting cash flows
through estimated maturity using the borrowing rate currently available to
MorAmerica Capital for debt of similar original maturity. None of MorAmerica
Capital's outstanding debentures payable are publicly traded. Market risk is
estimated as the potential increase in fair value resulting from a hypothetical
0.5% decrease in interest rates. Actual results may differ.
<TABLE>
<CAPTION>
------------------------------------------------------
1998
------------------------------------------------------
<S> <C>
Fair Value of Debentures Payable $11,540,000
Amount Over Cost $ 250,000
Additional Market Risk $ 165,000
------------------------------------------------------
</TABLE>
11
<PAGE> 12
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
There are no items to report.
ITEM 2. CHANGES IN SECURITIES
There are no items to report.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
There are no items to report.
ITEM 4. SUBMISSION OF MATTERS TO A 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.
(b) Reports on Form 8-K
The Company filed no reports on Form 8-K during the three months ended
December 31, 1998.
12
<PAGE> 13
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: 2/10/99 By: David Schroder
------------ ---------------------------
David Schroder, President
Date: 2/10/99 By: Robert A. Comey
------------ ---------------------------
Robert A. Comey, Treasurer
13
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 26,746,905
<INVESTMENTS-AT-VALUE> 27,442,484
<RECEIVABLES> 0
<ASSETS-OTHER> 809,559
<OTHER-ITEMS-ASSETS> 3,050,717
<TOTAL-ASSETS> 31,302,760
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 11,255,788
<OTHER-ITEMS-LIABILITIES> 265,162
<TOTAL-LIABILITIES> 12,464
<SENIOR-EQUITY> 11,520,950
<PAID-IN-CAPITAL-COMMON> 15,312,381
<SHARES-COMMON-STOCK> 1,246,392
<SHARES-COMMON-PRIOR> 1,039,615
<ACCUMULATED-NII-CURRENT> 276,153
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3,485,233
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 695,579
<NET-ASSETS> 19,781,810
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 458,398
<OTHER-INCOME> 22,010
<EXPENSES-NET> 576,793
<NET-INVESTMENT-INCOME> (93,385)
<REALIZED-GAINS-CURRENT> (46,217)
<APPREC-INCREASE-CURRENT> 396,534
<NET-CHANGE-FROM-OPS> 253,932
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 253,932
<NET-CHANGE-IN-ASSETS> 372,538
<ACCUMULATED-NII-PRIOR> 3,531,450
<ACCUMULATED-GAINS-PRIOR> 0
<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>
