UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-09261
---------------------------------
Foxby Corp.
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(Exact name of registrant as specified in charter)
11 Hanover Square, New York, NY 10005
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(Address of principal executive offices) (Zipcode)
Thomas B. Winmill, President
11 Hanover Square
New York, NY 10005
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(Name and address of agent for service)
Registrant's telephone number, including area code: 1-212-344-6310
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Date of fiscal year end: 12/31
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Date of reporting period: 1/1/05 - 06/30/05
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Form N-CSRS is to be used by management investment companies to file reports
with the Commission not later than 10 days after the transmission to
stockholders of any report that is required to be transmitted to stockholders
under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1).
The Commission may use the information provided on Form N-CSRS in its
regulatory, disclosure review, inspection, and policy making roles.
A registrant is required to disclose the information specified by Form
N-CSRS and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSRS
unless the Form displays a current valid Office of Management and Budget ("OMB")
control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under clearance requirements of 44 U.S.C. sec. 3507.
Item 1. Report to Shareholders.
FOXBY
CORP.
SEMI-ANNUAL REPORT
June 30, 2005
American Stock
Exchange Symbol:
FXX
www.foxbycorp.com
[GRAPHIC APPEARS HERE]
INVESTMENTS BY INDUSTRY*
Gold Ore Mining 16.99%
Department Stores 8.54%
Commercial Banking 6.57%
Metal Coating and Allied Services to Manufacturers 5.16%
Pharmacies and Drug Stores 4.07%
Veterinary Services 3.98%
Medical and Hospital Equipment 3.93%
Semiconductor and Related Device Manufacturing 3.74%
Real Estate Investment Trusts 3.67%
Direct Property and Casualty Insurance Carriers 3.59%
Insurance Agencies and Brokerages 3.46%
Trust, Fiduciary, and Custody Activities 3.43%
Cable and Other Pay TV Services 3.38%
Soap and Other Detergent Manufacturing 3.37%
Tobacco and Tobacco Products 3.31%
Credit Card Issuing 3.26%
Air Purification Equipment Manufacturing 3.26%
Miscellaneous Business Services 3.08%
Breweries 2.97%
All Other Miscellaneous Manufacturing 2.94%
Radio & TV Communications Equipment 2.75%
Natural Gas Transmission 1.85%
Copper Ore and Nickel Ore Mining 1.68%
Gold Ore Mining Warrants 0.97%
Copper Ore and Nickel Ore Mining Warrants 0.05%
------
100.00%
PORTFOLIO ANALYSIS*
U.S. Equities 80%
Foreign Equities 26%
* Investments by industry are shown as an approximate percentage of all
investments. Portfolio analysis shows all investments as an approximate
percentage of total net assets, and may not add up to 100% due to leverage,
other assets, rounding, and other factors.
[LETTERHEAD OF FOXBY CORP.]
August 16, 2005
Fellow Shareholders:
We are very pleased to submit this 2005 Semi-Annual Report for Foxby
Corp., and to welcome our new shareholders who find the Fund's flexible total
return investment approach attractive. As a non-diversified, closed-end fund
seeking total return, the Fund uses a flexible strategy in the selection of
securities, and is not limited by the issuer's location, size, or market
capitalization. The Fund may invest in equity and fixed income securities of
both new and seasoned U.S. and foreign issuers, including securities convertible
into common stock, debt securities, futures, options, derivatives, and other
instruments. The Fund also may employ aggressive and speculative investment
techniques, such as selling securities short and borrowing money for investment
purposes, an approach known as "leveraging," and may invest defensively in, for
example, high grade money market instruments.
At June 30, 2005, the Fund's top ten holdings comprised approximately
43% of total assets. As a percent of net assets, investments in U.S. equities
accounted for about 79.5% and foreign equities about 25.5%, reflecting leverage
of about 5%. Precious metals, our largest industry sector investment, accounted
for about 18% of net assets. As the Fund pursues its total return objective
through this flexible approach, these holdings and allocations are, of course,
subject to change at any time. By way of comparison, at December 31, the Fund's
top ten holdings comprised approximately 33% of total assets and as a percent of
net assets, investments in U.S. equities accounted for about 94% and foreign
equities about 21%, reflecting leverage of about 14%. Precious metals, our
largest industry sector investment at that time as well, accounted for about 14%
of net assets.
Market Review and Outlook
Importantly for financial markets, on June 30 the Federal Open Market
Committee (FOMC) raised its key overnight Federal funds target rate for the
ninth time in a year by a quarter of a percentage point to 3.25%. In addition,
the FOMC restated that it still expects to raise rates at a "measured" pace,
thus leaving unchanged the language they have previously used in prior quarter
point increases. Although the FOMC continues to embrace the view that
inflationary pressures remain elevated, most economic statistics reported
indicate that the inflation rate remains contained. The trend of the 10 year
Treasury bond benchmark to 4%, even in the face of record oil prices, will
continue to present a hurdle for the FOMC. For periods ended June 30, 2005, the
10 year Treasury bond has averaged 4.22% over the last six months, 4.15% over
the last three months and, surprisingly, 3.99% over the past month.
The Fund's strategy in the beginning of the year was to seek companies
with financial strength and growth prospects, or other special features, and
employ leverage. As short term rates increased, however, we became concerned
about new stresses on the economy and that such adverse conditions could lead to
market declines. Using its flexible investment strategy, Foxby reduced its
leveraged investment position in anticipation of any further interest rate
increases and potentially negative surprises in new economic data. Also, during
the six months, a number of Foxby's holdings were acquired or involved in
accretive mergers, such as Adolph Coors Company, MBNA Corporation, The Neiman
Marcus Group, Inc., and Prime Group Realty Trust.
Many of the companies whose shares the Fund does continue to own have attractive
financial characteristics, solid business franchises, or "hard assets," such as
real estate or gold. Over the course of future market fluctuations, the Fund
will seek opportunities to optimize its holdings of stocks, as well as
potentially use leverage, short sales, options and futures in seeking to enhance
performance for total return.
Looking ahead, we agree with recent comments by Federal Reserve Chairman
Alan Greenspan that the economy is "coping pretty well" with higher oil prices,
although we are less confident that current economic statistics do not portend a
weakening economy. The housing sector remains strong, however, perhaps due to
lower mortgage rates, and though "bubble" like activity appears in some markets,
housing generally does not appear to be becoming unaffordable. Non-farm
employment has grown recently and the unemployment rate continues to trend down,
reaching 5.0%, according to the Bureau of Labor Statistics of the U.S.
Department of Labor, with payroll employment growing in several industries, such
as professional and business services and health care.
Longer term, we remain optimistic about the future of the overall
markets. A recent release of the Conference Board U.S. Business Cycle Indicators
noted that its Composite Index of Leading Economic Indicators increased 0.9% in
June, the largest since December 2003. Although the growth of the current
economic expansion may be slowing, it appears broadly based, and that can result
in many new attractive opportunities for the Fund.
As announced previously, three "professional dissident" non-shareholders
and a purported shareholder filed a lawsuit in Maryland Circuit Court in October
2004 against Foxby and its directors, relating primarily to the Fund's bylaws
and the 2004 annual meeting. A motion for summary judgment has been filed to
dismiss the lawsuit with prejudice and is currently scheduled for a hearing on
September 2. This litigation has caused the Fund time and expense to defend, and
we look forward to putting this matter behind us.
Foxby's investment manager, CEF Advisers, Inc., currently owns
approximately 9.1% of the Fund's shares and is excited about the Fund's flexible
and dynamic approach to investing for total return. We appreciate your support
and look forward optimistically to serving your investment needs in the months
and years ahead.
Sincerely,
/s/ Thomas B. Winmill /s/ Marion E. Morris
------------------------ ------------------------
Thomas B. Winmill Marion E. Morris
President Senior Vice President
--------------------------------------------------------------------------------
TOP TEN HOLDINGS
(at June 30, 2005)
1. Bolivar Gold Corp. 6. Patterson Companies Inc.
2. SurModics, Inc. 7. Intel Corp.
3. The Neiman Marcus Group Inc. Class A 8. Prime Group Realty Trust
4. Walgreen Co. 9. PMA Capital Corp.
5. IDEXX Laboratories, Inc. 10. Target Corp.
Top ten holdings comprise approximately 43% of total assets. This portfolio
information should not be considered as a recommendation to purchase or sell a
particular security and there is no assurance that any securities will remain in
or out of the Fund.
FOXBY CORP. 2
Schedule of Portfolio Investments - June 30, 2005 (Unaudited)
Shares Market Value
-------- ------------
COMMON STOCKS (98.98%)
Air Purification Equipment Manufacturing (3.26%)
7,400 Donaldson Company, Inc. ............................... $ 224,442
------------
All Other Miscellaneous Manufacturing (2.94%)
2,800 3M Co. ................................................ 202,440
------------
Breweries (2.97%)
3,300 Molson Coors Company Class B .......................... 204,600
------------
Cable and Other Pay TV Services (3.38%)
7,600 Comcast Corp./(2)/ .................................... 233,320
------------
Commercial Banking (6.57%)
7,700 U.S. Bancorp .......................................... 224,840
3,700 Wells Fargo & Company ................................. 227,846
------------
452,686
------------
Copper Ore and Nickel Ore Mining (1.68%)
110,000 Peru Copper Inc./(2)/ ................................. 116,050
------------
Credit Card Issuing (3.26%)
8,600 MBNA Corporation ...................................... 224,976
Department Stores (8.54%)
4,400 Target Corporation .................................... 239,404
3,600 The Neiman Marcus Group, Inc. Class A ................. 348,912
------------
588,316
------------
Direct Property and Casualty Insurance
Carriers (3.59%)
28,000 PMA Capital Corporation/(2)/ .......................... 247,240
------------
Gold Ore Mining (16.99%)
200,000 Bolivar Gold Corp./(2)/ ............................... 442,521
37,500 Desert Sun Mining Corp./(2)/ .......................... 60,375
29,000 Dundee Precious Metals Inc./(2)/ ...................... 190,603
35,000 Gammon Lake Resources Inc./(2)/ ....................... 235,550
127,500 Guinor Gold Corporation/(2))/ ......................... 98,894
50,000 Jaguar Mining Inc./(2)/ ............................... 142,880
------------
1,170,823
------------
Insurance Agencies and Brokerages (3.46%)
5,300 Brown & Brown, Inc. ................................... 238,182
------------
Medical and Hospital Equipment (3.93%)
6,000 Patterson Companies Inc./(2)/ ......................... 270,480
------------
Metal Coating and Allied Services to
Manufacturers (5.16%)
8,200 SurModics, Inc./(2)/ .................................. 355,634
------------
Miscellaneous Business Services (3.08%)
75,000 Safety Intelligence Systems Corp./(1)//(2)/ ........... 212,145
------------
See accompanying notes to financial statements.
3 FOXBY CORP.
Schedule of Portfolio Investments - June 30, 2005 (Unaudited)
Shares Market Value
-------- ------------
COMMON STOCKS - continued
Natural Gas Transmission (1.85%)
29,000 MetroGAS S.A. ADR/(2)/ ................................ $ 127,310
------------
Pharmacies and Drug Stores (4.07%)
6,100 Walgreen Co. .......................................... 280,539
------------
Radio & TV Communications Equipment (2.75%)
12,800 NTT DoCoMo, Inc. ADR .................................. 189,568
------------
Real Estate Investment Trusts (3.67%)
35,000 Prime Group Realty Trust/(2)/ ......................... 252,700
------------
Semiconductor and Related Device
Manufacturing (3.74%)
9,900 Intel Corporation ..................................... 257,994
------------
Soap and Other Detergent Manufacturing (3.37%)
4,400 The Procter & Gamble Company .......................... 232,100
------------
Tobacco and Tobacco Products (3.31%)
38,000 Alliance One International, Inc ....................... 228,380
------------
Trust, Fiduciary, and Custody Activities (3.43%)
4,900 State Street Corporation .............................. 236,425
------------
Veterinary Services (3.98%)
4,400 IDEXX Laboratories, Inc./(2)/ ......................... 274,252
------------
Total Common Stocks (cost: $6,269,939) ............ 6,820,602
------------
WARRANTS (1.02%)
Copper Ore and Nickel Ore Mining (0.05%)
55,000 Peru Copper Inc. Warrants expiring 3/18/06/(2)/ ....... 3,300
------------
Gold Ore Mining (0.97%)
30,000 Bolivar Gold Corp. Warrants expiring 8/25/08/(2)/ ..... 33,557
20,000 Bolivar Gold Corp. Warrants expiring 11/20/09/(2)/ .... 13,390
9,375 Desert Sun Mining Corp. Warrants
expiring 11/20/08/(2)/ ............................... 4,439
25,000 Jaguar Mining Inc. Warrants expiring 12/31/07/(2)/ 15,309
------------
66,695
------------
Total Warrants (cost: $25,469) .................... 69,995
------------
Total Investments (cost: $6,295,408)
(100.00%) ................................... $ 6,890,597
============
/(1)/ Security is not publicly traded. This security is valued by the
Board of Directors and represents 3.08% of total investments.
/(2)/ Non-income producing security.
ADR means "American Depository Receipt".
FOXBY CORP. 4
See accompanying notes to financial statements.
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2005 (Unaudited)
ASSETS:
Investments at market value
(cost: $6,295,408) (note 2) ...................... $ 6,890,597
Dividend receivable .............................. 5,534
Other assets ..................................... 601
--------------
Total assets .................................. 6,896,732
--------------
LIABILITIES:
Note payable (note 7) .............................. 364,145
Accrued expenses ................................... 34,357
Management fees payable (note 4) ................... 5,333
Administrative services payable (note 4) ........... 3,433
--------------
Total liabilities ............................. 407,268
--------------
NET ASSETS: (applicable to 2,602,847
shares outstanding: 500,000,000
shares of $.01 par value authorized) ............... $ 6,489,464
==============
NET ASSET VALUE PER SHARE
($6,489,464 / 2,602,847
shares outstanding) ................................ $ 2.49
==============
At June 30, 2005, net assets consisted of:
Paid-in capital .................................... $ 22,906,909
Net unrealized appreciation
on investments ................................... 595,189
Accumulated net realized loss on
investments and futures .......................... (17,012,634)
--------------
$ 6,489,464
==============
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2005 (Unaudited)
INVESTMENT INCOME:
Dividends .......................................... $ 34,029
Interest ........................................... 97
--------------
Total investment income .......................... 34,126
--------------
EXPENSES:
Legal (note 9) ..................................... 296,300
Investment management (note 4) ..................... 32,355
Printing and postage ............................... 14,457
Bookkeeping and pricing ............................ 10,670
Administrative services (note 4) ................... 8,373
Audit .............................................. 7,240
Custodian .......................................... 6,120
Directors .......................................... 4,099
Transfer agent ..................................... 3,755
Exchange listing ................................... 3,213
--------------
Total operating expenses ......................... 386,582
Loan interest and fees (note 7) .................. 9,357
--------------
Total expenses ................................... 395,939
--------------
Net investment loss ........................... (361,813)
--------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized loss on investments ................... (4,146)
Unrealized appreciation on investments ............. 156,250
--------------
Net realized and unrealized gain
on investments ................................... 152,104
--------------
Net decrease in net assets resulting
from operations .................................. $ (209,709)
==============
--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
Six Months Ended June 30, 2005 (Unaudited) and Year Ended December 31, 2004
Six Months
Ended Year
6/30/05 Ended
(Unaudited) 12/31/04
----------- -----------
OPERATIONS:
Net investment loss ....................... $ (361,813) $ (291,759)
Net realized gain (loss) on
investment transactions .................. (4,146) 1,153,414
Change in unrealized appreciation
(depreciation) on investments ............ 156,250 (1,313,471)
----------- -----------
Net decrease in net assets resulting
from operations ........................ (209,709) (451,816)
----------- -----------
Total change in net assets ........... (209,709) (451,816)
NET ASSETS:
Beginning of period ....................... 6,699,173 7,150,989
----------- -----------
End of period ............................. $ 6,489,464 $ 6,699,173
=========== ===========
See accompanying notes to financial statements.
5 FOXBY CORP.
Notes to Financial Statements (Unaudited)
(1) Foxby Corp., a Maryland Corporation registered under the Investment Company
Act of 1940 as amended, is a non-diversified, closed-end management investment
company whose shares are listed on the American Stock Exchange.
(2) The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. With
respect to security valuation, securities traded on a national securities
exchange or the Nasdaq National Market System ("NMS") are valued at the last
reported sales price on the day the valuations are made. Such securities that
are not traded on a particular day and securities traded in the over-the-counter
market that are not on NMS are valued at the mean between the current bid and
asked prices. Certain of the securities in which the Fund invests are priced
through pricing services which may utilize a matrix pricing system which takes
into consideration factors such as yields, prices, maturities, call features and
ratings on comparable securities. Bonds may be valued according to prices quoted
by a dealer in bonds which offers pricing services. Debt obligations with
remaining maturities of 60 days or less are valued at cost adjusted for
amortization of premiums and accretion of discounts. Securities denominated in
foreign currencies are translated into U.S. dollars at prevailing exchange
rates. Securities for which quotations are not readily available or reliable and
other assets may be valued as determined in good faith by or under the direction
of the Board of Directors. Investment transactions are accounted for on the
trade date (the date the order to buy or sell is executed). Dividend income and
distributions to shareholders are recorded on the ex-dividend date and interest
income is recorded on the accrual basis. Withholding taxes on foreign dividends
have been provided for in accordance with the Fund's understanding of the
applicable country's tax rules and rates. In preparing financial statements in
conformity with accounting principles generally accepted in the United States of
America, management makes estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements, as
well as the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
(3) It is the Fund's current intention to meet the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute all
of its taxable net income to its shareholders. In addition, the Fund intends to
pay distributions as required to avoid imposition of excise tax. Therefore, no
federal income tax provision is required. At December 31, 2004, the Fund had a
capital loss carryforward of approximately $16,581,400 of which $8,986,200
expires in 2009, $6,757,800 expires in 2010, and $837,400 expires in 2011. No
capital gain will be distributed until the capital loss carryforwards have been
exhausted.
As of December 31, 2004, the components of distributable earnings on a tax basis
were as follows:
Capital loss carryforward $ (16,581,367)
Post-October loss* (427,121)
Unrealized appreciation 438,939
--------------
$ (16,569,549)
==============
* Under the current tax law, capital losses realized after October 31st and
prior to the Fund's fiscal year end are deferred as occurring on the first day
of the following year.
Accounting principles generally accepted in the United States of America require
certain components of net assets to be reclassified between financial and tax
reporting. These reclassifications have no effect on net assets or net asset
value per share. For the year ended December 31, 2004, the Fund reclassified
$291,759 from accumulated investment loss to paid-in capital.
(4) The Fund retains CEF Advisers, Inc. as its Investment Manager. Under the
terms of the Investment Management Agreement, the Investment Manager receives a
management fee, payable monthly, based on the average daily net assets of the
Fund at the annual rate of 1%. Certain officers and directors of the Fund are
officers and directors of the Investment Manager. The Fund reimbursed the
Investment Manager $8,373 for providing at cost certain administrative services
comprised of compliance and accounting services during the six months ended June
30, 2005.
FOXBY CORP. 6
Notes to Financial Statements (Unaudited) (concluded)
(5) The Fund has an arrangement with its custodian whereby interest earned on
uninvested cash balances was used to offset a portion of the Fund's expenses.
There were no credits during the six months ended June 30, 2005. Purchases and
sales of investment securities (excluding short-term investments) aggregated
$413,447 and $1,315,881, respectively, for the six months ended June 30, 2005.
At June 30, 2005, gross unrealized appreciation and depreciation of investments
for tax purposes were as follows:
Appreciation $ 738,171
Depreciation (142,982)
--------------
Net appreciation on investments $ 595,189
==============
At June 30, 2005, the cost of investments for federal income tax purposes was
$6,295,408.
(6) The Fund may engage in transactions in futures contracts. 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 change in the contract is included in
unrealized appreciation/depreciation on investments and futures contracts. The
Fund realizes a gain or loss when the contract is closed. Futures transactions
sometimes may reduce returns or increase volatility. In addition, futures can be
illiquid and highly sensitive to changes in their underlying security, interest
rate or index, and as a result can be highly volatile. A small investment in
certain futures could have a potentially large impact on a Fund's performance.
At June 30, 2005 the Fund had no open futures contracts.
(7) The Fund may borrow through a committed bank line of credit. At June 30,
2005, there was $364,145 outstanding and the interest rate was at the borrower's
option of (i) overnight federal funds or (ii) LIBOR (30, 60, 90 days), each as
in effect from time to time, plus 0.75% per annum, calculated on the basis of
actual days elapsed for a 360-day year. For the six months ended June 30, 2005,
the weighted average interest rate was 3.72% based on the balances outstanding
during the period and the weighted average amount outstanding was $548,078.
(8) Of the 2,602,847 shares of common stock outstanding at June 30, 2005,
Investor Service Center, Inc. ("ISC"), an affiliate of the Fund's Investment
Manager, owned 236,900 shares. Certain officers and directors of ISC are also
officers and directors of the Fund and the Investment Manager.
(9) In the Circuit Court for Baltimore City, Maryland, Civil Action No.
24-C-04-007613 filed on October 4, 2004, a group comprised of Richard J. Shaker,
Phillip Goldstein, Rajeev Das, and Andrew Dakos have sued the Fund and its
Directors, alleging various breaches by the Directors of fiduciary duty under
Maryland law and seeking declaratory and injunctive relief. This suit generally
arises out of the Fund's 2004 annual meeting of stockholders and the Fund's
Bylaws. The Fund has filed a motion for summary judgment. In connection with
these and other legal matters, legal expenses incurred by the Fund were $296,300
for the six months ended June 30, 2005.
7 FOXBY CORP.
FINANCIAL HIGHLIGHTS
Six Months
Ended Year Year Nine Months Year Year Period
6/30/05 Ended Ended Ended Ended Ended Ended
(Unaudited) 12/31/04 12/31/03 12/31/02 3/31/02 3/31/01 3/31/00*
----------- --------- -------- -------- ------- ------- --------
PER SHARE DATA
Net asset value at beginning
of period ........................... $ 2.57 $ 2.75 $ 2.59 $ 3.27 $ 3.77 $ 14.81 $ 9.35
--------- --------- ------- -------- ------- -------- --------
Income from investment operations:
Net investment loss (a) ........... (.14) (.11) (.10) (0.04) (0.08) (0.09) (0.05)
Net realized and unrealized gain
(loss) on investments ........... .06 (.07) .26 (0.64) (0.16) (10.45)/(b)/ 5.51
--------- --------- ------- -------- ------- -------- --------
Total from investment operations .. (.08) (.18) .16 (0.68) (0.24) (10.54) 5.46
--------- --------- ------- -------- ------- -------- --------
Less distributions:
Distributions to shareholders ..... -- -- -- -- (0.26) (0.50) --
--------- --------- ------- -------- ------- -------- --------
Net asset value at end of period ..... $ 2.49 $ 2.57 $ 2.75 $ 2.59 $ 3.27 $ 3.77 $ 14.81
========= ========= ======= ======== ======= ======== ========
Market value at end of period ........ $ 2.17 $ 2.22 $ 2.40 $ 2.07 $ 3.00 $ 3.33 $ 12.44
========= ========= ======= ======== ======= ======== ========
TOTAL RETURN ON NET ASSET
VALUE BASIS (c) ................... (3.11)% (6.55)% 6.18% (20.80)% (6.65)% (73.46)% 58.40%
========= ========= ======= ======== ======= ======== ========
TOTAL RETURN ON MARKET
VALUE BASIS (c) ................... (2.25)% (7.50)% 15.94% (31.00)% (2.06)% (71.89)% 24.38%
========= ========= ======= ======== ======= ======== ========
RATIOS/SUPPLEMENTAL DATA
Net assets at end of period
(000's omitted) ................... $ 6,489 6,699 $ 7,151 $ 6,731 $ 8,503 $ 9,735 $ 39,105
========= ========= ======= ======== ======= ======== ========
Ratio of expenses to average
net assets ........................ 12.14%/(d)/ 5.27% 4.39% 4.70%/(d)/ 3.17% 2.19% 1.78%/(d)/
========= ========= ======= ======== ======= ======== ========
Ratio of net investment loss to
average net assets ................ (11.09)%/(d)/ (4.31)% (3.91)% (3.30)%/(d)/ (2.41)% (0.93)% (0.94)%/(d)/
========= ========= ======= ======== ======= ======== ========
Portfolio turnover rate .............. 5.76% 164.08% 75.39% 267.87% 89.31% 550.56% 168.62%
========= ========= ======= ======== ======= ======== ========
* From commencement of operations on October 29, 1999.
(a) Computed using average shares outstanding throughout the period.
(b) Includes $0.06 of gains resulting from the buy back of treasury shares at a
discount to net asset value.
(c) Total return on market value basis is calculated assuming a purchase of
common stock on the opening of the first day and sale on the closing of the
last day of each period reported. Dividends and distributions, if any, are
assumed for purposes of this calculation, to be reinvested at prices
obtained under the Fund's dividend reinvestment plan. Generally, total
return on net asset value basis will be higher than total return on market
value basis in periods where there is an increase in the discount or a
decrease in the premium of the market value to the net asset value from the
beginning to the end of such periods. Conversely, total return on net asset
value basis will be lower than total return on market value basis in
periods where there is a decrease in the discount or an increase in the
premium of the market value to the net asset value from the beginning to
the end of such periods. Total return calculated for a period of less than
one year is not annualized. The calculation does not reflect brokerage
commissions, if any.
(d) Annualized.
FOXBY CORP. 8
The additional information below and on the following pages is supplemental and
not part of the financial statements of the Fund.
BOARD OF DIRECTORS' ANNUAL APPROVAL OF THE INVESTMENT MANAGEMENT AGREEMENT
The investment management agreement between the Fund and the Investment Manager
generally provides that the agreement shall continue automatically for
successive periods of twelve months each, provided that such continuance is
specifically approved at least annually (i) by a vote of a majority of the
Directors of the Fund who are not parties to the agreement, or interested
persons of any such party and (ii) by the Board of Directors of the Fund or by
the vote of the holders of a majority of the outstanding voting securities of
the Fund.
In considering the annual approval of the agreement between the Fund and the
Investment Manager, the Board of Directors considered information that had been
provided throughout the year at regular Board meetings, as well as information
furnished to the Board for a meeting held in March 2005 to specifically consider
the renewal of the agreement. Such information included, among other things, the
following: information comparing the management fee of the Fund with those of
comparable funds; information regarding Fund investment performance in
comparison to a relevant peer group of funds; the economic outlook and the
general investment outlook in relevant investment markets; the Investment
Manager's results and financial condition and the overall organization of the
Investment Manager; the allocation of brokerage and the benefits received by the
Investment manager as a result of brokerage allocation; the Investment Manager's
management of relationships with the custodian, transfer agent, and fund
accountant; the resources devoted to the Investment Manager's compliance efforts
undertaken on behalf of the funds it manages and the record of compliance with
the investment policies and restrictions and with policies on personal
securities transactions; the quality, nature, cost and character of the
administrative and other non-investment management services provided by the
Investment Manager and its affiliates; and the terms of the agreement and the
reasonableness and appropriateness of the particular fee paid by the Fund for
the services described therein.
The Board of Directors also considered the nature, extent and quality of the
management services provided by the Investment Manager. In so doing, the Board
considered the Investment Manager's management capabilities with respect to the
types of investments held by the Fund, including information relating to the
education, experience and number of investment professionals and other personnel
who provide services under the agreement. The Board also took into account the
time and attention to be devoted by management to the Fund and the other funds
in the complex. The Board evaluated the level of skill required to manage the
Fund and concluded that the human resources available at the Investment Manager
were appropriate to fulfill effectively its duties on behalf of the Fund.
The Board received information concerning the investment philosophy and
investment process applied by the Investment Manager in managing the Fund. In
this regard, the Board considered the Investment Manager's in-house research
capabilities as well as other resources available to the Investment Manager
personnel, including research services that may be available to the Investment
Manager as a result of securities transactions effected for the Fund and related
investment management clients. The Board concluded that the Investment Manager's
investment process, research capabilities and philosophy were well suited to the
Fund, given the Fund's investment objective and policies.
In its review of comparative information with respect to Fund investment
performance, the Board received comparative information, comparing the Fund's
performance to that of similar peer groups. After reviewing this information,
the Board concluded that the Fund has performed within a range that the Board
deemed competitive. With respect to its review of investment management fees,
the Board considered information comparing the Fund's management fee and expense
ratio to those of comparable funds with similar management fee characteristics.
This information assisted the Board in concluding that the fee paid by the Fund
is within the range of those paid by comparable funds within the fund industry.
In reviewing the information regarding
Additional Information 9 FOXBY CORP.
the expense ratio of the Fund, the Board concluded that although the Fund's
expense ratio is within a higher range, it is competitive with comparable funds
in light of the quality of services received.
In addition to the factors mentioned above, the Board reviewed the level of the
Investment Manager's profits in providing investment management and related
services for the Fund and for all the funds in the Investment Company Complex.
In addition, the Board considered the fiduciary duty assumed by the Investment
Manager in connection with the services rendered to the Fund and the business
reputation of the Investment Manager and its financial resources. The Board
concluded that in light of the services rendered, the profits realized by the
Investment Manager are not unreasonable.
The Board did not consider any single factor as controlling in determining
whether or not to renew the agreement. Nor are the items described herein all
the matters considered by the Board. In assessing the information provided by
the Investment Manager and its affiliates, the Board also took into
consideration the benefits to shareholders of investing in a fund that is part
of a family of funds which provides a large variety of shareholder services.
Based on its consideration of the foregoing factors and conclusions, and such
other factors and conclusions as it deemed relevant, and assisted by counsel,
the Board concluded that the approval of the agreement, including the fee
structure, is in the interests of shareholders.
PRIVACY POLICY
The Fund recognizes the importance of protecting the personal and financial
information of its shareholders. We consider each shareholder's personal
information to be private and confidential. This describes the practices
followed by us to protect our shareholders' privacy. We may obtain information
about you from the following sources: (1) information we receive from you on
forms and other information you provide to us whether in writing, by telephone,
electronically or by any other means; (2) information regarding your
transactions with us, our corporate affiliates, or others. We do not sell
shareholder personal information to third parties. We will collect and use
shareholder personal information only to service shareholder accounts. This
information may be used by us in connection with providing services or financial
products requested by shareholders. We will not disclose shareholder personal
information to any nonaffiliated third party except as permitted by law. We take
steps to safeguard shareholder information. We restrict access to nonpublic
personal information about you to those employees and service providers who need
to know that information to provide products or services to you. With our
service providers we maintain physical, electronic, and procedural safeguards to
guard your nonpublic personal information. Even if you are no longer a
shareholder, our Privacy Policy will continue to apply to you. We reserve the
right to modify, remove or add portions of this Privacy Policy at any time.
DIVIDEND REINVESTMENT PLAN
The Fund has adopted a Dividend Reinvestment Plan (the "Plan"). Under the Plan,
each dividend and capital gain distribution, if any, declared by the Fund on
outstanding shares will, unless elected otherwise by each shareholder by
notifying the Fund in writing at any time prior to the record date for a
particular dividend or distribution, be paid on the payment date fixed by the
Board of Directors or a committee thereof in additional shares. If the Market
Price (as defined below) per share is equal to or exceeds the net asset value
per share at the time shares are valued for the purpose of determining the
number of shares equivalent to the cash dividend or capital gain distribution
(the "Valuation Date"), participants will be issued additional shares equal to
the amount of such dividend divided by the greater of that net asset value per
share or 95% of that Market Price per share. If the Market Price per share is
less than such net asset value on the Valuation Date, participants will be
issued additional shares equal to the amount of such dividend divided by the
Market Price. The Valuation Date is the day before the dividend or distribution
payment date or, if that day is not an American Stock Exchange trading day, the
next trading day. For all purposes of the Plan: (a) the Market Price of the
shares on a particular date shall be the average closing market price on the
five trading days the shares traded ex-dividend on the Exchange prior to such
date or, if no sale occurred on any of these days, then the mean between the
closing bid and asked quotations, for the shares on the Exchange on such day,
and (b) net asset value per share on a particular date shall be as determined by
or on behalf of the Fund.
FOXBY CORP. 10 Additional Information
PROXY VOTING
The Fund's Proxy Voting Guidelines (the "Guidelines") as well as its voting
record for the 12 months ended December 31, 2004, are available without charge,
by calling the Fund collect at 1-212-344-6310 and on the SEC's website at
http://www.sec.gov. The Guidelines are also posted on the Fund's website at
http://www.foxbycorp.com.
QUARTERLY HOLDINGS
The Fund files its complete schedule of portfolio holdings with the SEC for the
first and third quarters of each fiscal year on Form N-Q. The Fund's Forms N-Q
are available on the SEC's Internet site at http://www.sec.gov and may be
reviewed and copied at the SEC's Public Reference Room. Copies of this
information can be obtained, after paying a duplicating fee, by e-mail request
to publicinfo@sec.gov, or by writing to the SEC's Public Reference Section,
Washington, DC 20549-0102. The Fund's Investment Company Act file number is
811-09261. The Fund makes the information on Form N-Q available to shareholders
upon request free of charge by e-mail request to info@foxbycorp.com or by
calling the Fund collect at 1-212-344-6310.
WWW.FOXBYCORP.COM
Visit us on the Internet at www.foxbycorp. The site provides information about
the Fund including market performance, net asset value (NAV), dividends, press
releases, and shareholder reports. For further information, you can email us at
info@foxbycorp.com. The Fund is a member of the Closed-End Fund Association
(CEFA). Its website address is www.cefa.com. CEFA is solely responsible for the
content of its website.
Additional Information 11 FOXBY CORP.
FUND INFORMATION
Investment Manager Custodian
CEF Advisers, Inc. State Street Bank & Trust Co.
11 Hanover Square 801 Pennsylvania Avenue
New York, NY 10005 Kansas City, MO 64105
Independent Registered Public Stock Transfer Agent and Registrar
Accounting Firm American Stock Transfer & Trust Co.
Tait, Weller & Baker 59 Maiden Lane
1818 Market St., Suite 2400 New York, NY 10038
Philadelphia, PA 19103 1-800-278-4353
www.amstock.com
Internet
www.foxbycorp.com
email: info@foxbycorp.com
This report, including the financial statements herein, is transmitted to the
shareholders of the Fund for their information. The financial information
included herein is taken from the records of the Fund. This is not a prospectus,
circular or representation intended for use in the purchase of shares of the
Fund or any securities mentioned in this report. Pursuant to Section 23 of the
Investment Company Act of 1940, notice is hereby given that the Fund may in the
future, purchase shares of its common stock in the open market. These purchases
may be made from time to time, at such times, and in such amounts, as may be
deemed advantageous to the Fund, although nothing herein shall be considered a
commitment to purchase such shares.
FOXBY CORP. 12 Additional Information
FOXBY CORP.
11 Hanover Square
New York, NY 10005
Printed on recycled paper
FXX-SAR 6/05
Item 2. Code of Ethics.
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Schedule of Investments.
Included as part of the report to shareholders filed under Item 1 of this
Form.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 11. Controls and Procedures.
(a) The registrant's principal executive officer and principal financial
officer have concluded that the registrant's disclosure controls and
procedures (as defined in Rule 30a- 3(c) under the Investment Company Act
of 1940, as amended (the "1940 Act")) are effective as of a date within 90
days of the filing date of this report that includes the disclosure
required by this paragraph, based on their evaluation of the disclosure
controls and procedures required by Rule 30a-3(b) under the 1940 Act and
15d-15(b) under the Securities Exchange Act of 1934.
(b) There were no changes in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred
during the registrant's last fiscal half-year (the registrant's second
fiscal half-year in the case of an annual report) that have materially
affected, or are likely to materially affect the registrant's internal
control over financial reporting.
Item 12. Exhibits.
(a)(1) The Code of Ethics - not applicable for filing of Semi-Annual
Reports to Shareholders.
(a)(2) The certifications required by Rule 30a-2 of the Investment Company
Act of 1940, as amended, and Sections 302 and 906 of the
Sarbanes-Oxley Act of 2002 are attached as exhibits hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Foxby Corp.
By: /s/ Thomas B. Winmill
---------------------------------------------
Thomas B. Winmill, President
Date: September 7, 2005
By: /s/ Thomas O'Malley
---------------------------------------------
Thomas O'Malley, Chief Financial Officer
Date: September 7, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.
By: /s/ Thomas B. Winmill
---------------------------------------------
Thomas B. Winmill, President
Date: September 7, 2005
By: /s/ Thomas O'Malley
---------------------------------------------
Thomas O'Malley, Chief Financial Officer
Date: September 7, 2005