<PAGE>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)
[ X ]     QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
          ACT OF 1934
For the quarterly period ended June 30, 1997

                                       OR

[   ]     TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from            to            

Commission file number 0-12444

                             THE ROCKIES FUND, INC.
             ------------------------------------------------------
             (Exact Name of Registrant as Specified in its Charter)


         Nevada                                                84-0928022    
-------------------------------                           -------------------
(State or other jurisdiction of                              (I.R.S. Employer
 incorporation or organization)                           Identification No.)

4465 Northpark Drive, Colorado Springs, Colorado                  80907  
------------------------------------------------               ----------
(Address of principal executive offices)                       (Zip Code)

Registrant's telephone number, including area code:      (719) 590-4900
                                                           --------------
                                       N/A
--------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)

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 CORPORATE ISSUERS:

As of June 30, 1997, the Company had 640,256 shares of its $.01 par value
common stock outstanding.  <PAGE>
<PAGE>
                                      INDEX


PART I.     FINANCIAL INFORMATION

            Item 1. Financial Statements

                    Statement of Assets and Liabilities at June 30, 1997
                    (unaudited) and December 31, 1996 (audited)

                    Schedule of Investments and Restricted Securities
                    (unaudited)

                    Statement of Operations for the Three Months Ended June 30,
                    1997 and June 30, 1996 (unaudited)

                    Statement of Operations for the Six Months Ended June 30,
                    1997 and June 30, 1996 (unaudited)

                    Statements of Stockholders' Equity  for the Three Months
                    Ended June 30, 1997 (unaudited), and Years Ended
                    December 31, 1996 and 1995 (audited)

                    Statement of Changes in Net Assets as of June 30, 1997 and
                    June 30, 1996 (unaudited)

                    Notes to Unaudited Financial Statements

            Item 2. Management's Discussion and Analysis of Financial
                    Conditions and Results of Operations


PART II.    OTHER INFORMATION

            Item 1. Legal Proceedings

            Item 2. Changes in Securities

            Item 3. Defaults Upon Senior Securities

            Item 4. Submission of Matters to a Vote of Security Holders

            Item 5. Other Information

            Item 6. Exhibits and Reports on Form 8-K
<PAGE>
<PAGE>
                         PART I.   FINANCIAL INFORMATION


ITEM 1.   FINANCIAL STATEMENTS

          The interim unaudited financial statements have been prepared by the
Rockies Fund, Inc. (the "Fund" or the "Company") and, in the opinion of
management, reflect all material adjustments which are necessary to a fair
statement of results of the interim periods presented.  Such adjustments
consisted only of normal recurring items (except as discussed in Note 3). 
Certain information and footnote disclosure made in the last annual report on
Form 10-K have been condensed or omitted for the interim statements.  These
statements should be read in conjunction with the financial statements and
notes thereto included in Form 10-K for the year ended December 31, 1996.  The
results of the interim periods are not necessarily indicative of results which
may be expected for any other interim period or for the full years.
<PAGE>
<PAGE>
<TABLE>
                             THE ROCKIES FUND, INC.
                       STATEMENT OF ASSETS AND LIABILITIES
                       JUNE 30, 1997 AND DECEMBER 31, 1996

<CAPTION>
                                                     June 30,        December 31,
                                                       1997              1996
                                                    (unaudited)        (audited) 
                                                   -------------     ------------
<S>                                                 <C>              <C>         
ASSETS
------
Investments at value 
 (See accompanying schedule):                                                    
  Restricted and unrestricted securities             $ 1,806,633     $ 1,841,093 
  Notes receivable                                       279,884         138,404 
                                                     ------------    ------------
                                                       2,086,517       1,979,497 

Cash:
  Held by related party                                  146,629         391,698 
  Held by others                                           2,520         107,706 
  Accrued interest receivable held by others              26,373          12,789 
  Receivables from investees                               1,332          23,072 
  Other assets                                             1,123          15,809 
                                                     ------------    ------------
    Total Current Assets                               2,264,494       2,530,571 
                                                     ------------    ------------
Property & Equipment:
  Land                                                   390,000         102,775 
  Land Development                                        62,582               0 
  Building                                                     0         633,496 
  Leasehold improvements                                       0          86,614 
  Equipment                                                1,484           1,484 
  Furniture and fixtures                                   7,255          12,461 
  Automobile                                              15,162               0 
                                                     ------------    ------------
                                                         476,483         836,830 

Less Accumulated Depreciation                             (4,023)        (72,309)
                                                     ------------    ------------
                                                         472,460         764,521 
                                                     ------------    ------------
Investment in long term note receivable                          
 related party                                           175,000         175,000 
                                                     ------------    ------------
TOTAL ASSETS                                           2,911,954       3,470,092 

</TABLE>


<PAGE>
<PAGE>
<TABLE>
                             THE ROCKIES FUND, INC.
                       STATEMENT OF ASSETS AND LIABILITIES
                       JUNE 30, 1997 AND DECEMBER 31, 1996
                                   (Continued)
<CAPTION>

                                                     June 30,       December 31,
                                                       1997             1996
                                                    (unaudited)       (audited)
                                                   ------------     -------------
<S>                                                   <C>            <C>         
LIABILITIES
-----------
Payables: 
  Trade                                               $    52,349    $    23,152 
  Related parties                                               0        153,566 
  Investment securities purchased                               0        116,882 
Accrued liabilities                                        43,457         82,408 
Accrued income taxes                                      118,000        118,000 
Accrued interest payable                                    8,574          7,428 
Notes payable                                                    
  Related parties                                         344,500          6,500 
  Mortgage note, current portion                            2,842         43,087 
  Other                                                    60,170         38,734 
Borrowings under lines of credit                           74,500        174,500 
                                                     ------------    ------------

    Total Current Liabilities:                            704,392        764,257 

Security deposits                                                          7,254 
Other liabilities                                                         52,500 
Mortgage note, less current portion                         9,718        315,349 
                                                     ------------    ------------
    Total Liabilities                                     714,110      1,139,360 

NET ASSETS and STOCKHOLDER'S EQUITY                   $ 2,197,845    $ 2,330,732 
-----------------------------------                   ===========    =========== 
(Equivalent to $3.43 per share at June 30, 
 1997 and $3.64 per share at Dec. 31, 1996)                      

COMPONENTS OF NET ASSETS
------------------------
Common Stock, $.01 par value, Authorized 
 5,000,000 shares; 640,256 issued and outstanding    $     6,403     $     6,403 
                                                     ------------    ------------
Additional paid-in capital                             2,901,243       2,901,243 
                                                     ------------    ------------
Accumulated (deficit):
  Accumulated net investment loss                     (2,067,541)     (1,893,303)
  Accumulated net realized gain (losses) from          1,756,242       1,336,711 
   sales and permanent write-downs of securities
  Unrealized net (depreciation) of investments          (398,502)        (20,322)
                                                     ------------    ------------
Total accumulated deficit                               (709,801)       (576,914)
                                                     ------------    ------------
NET ASSETS                                           $ 2,197,845     $ 2,330,732 
                                                     ============    ============
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
THE ROCKIES FUND, INC.
Schedules of Investments
June 30, 1997 and March 31, 1997
--------------------------------------------------------------------------------------------------------------
                                                                                        FAIR             FAIR 
                                                    INITIAL       ** COST AT          VALUE AT         VALUE AT
                                                  INVESTMENT       JUNE 30,           JUNE 30,         MARCH 31,
   COMPANY                    POSITION               DATE            1997               1997             1997
--------------------------------------------------------------------------------------------------------------
<S>                      <C>                             <C>       <C>               <C>            <C>          
RESTRICTED SECURITIES:
---------------------
American Educational     40,000 common stock             Sep-96      200,000.00        225,000.00      125,000.00
 Products, Inc.* ***     40,000 warrants (ex. @ $4.50)   Sep-96            0.00              0.00            0.00
                         40,000 warrants (ex. @ $10.00)                  Jun-97              0.00           0.00 
                           - 
                                                                  --------------    --------------    -----------
                                                                     200,000.00        225,000.00      125,000.00
                                                                                                  
Bear Star, LLC*          5% partnership interest         Nov-94            0.00              0.00            0.00
                                                                                                  
COVA Technologies*       917 common stock                Jul-96       20,035.00         20,035.00       20,035.00
                                                                                                  
Global Casinos, Inc.*    3,800 common stock              Nov-93       76,000.00         10,687.50       13,775.00
                         4,331 common stock              Jan-94       50,068.21         12,180.94       15,699.88
                         1,724 common stock              Jan-94       19,931.79          4,848.75        6,249.50
                         1,250 common stock              Feb-94       25,000.00          3,515.63        4,531.25
                         75 common stock                 Mar-94            0.00            210.94          271.88
                         500 common stock                Oct-94       10,000.00          1,406.25        1,812.50
                         5,000 common stock              Feb-96       17,207.50         14,062.50       18,125.00
                         1,000 common stock              Mar-96        3,125.00          2,812.50        3,625.00
                         105,000 warrants                Nov-96            0.00              0.00            0.00
                                                                  --------------    --------------    -----------
                                                                     201,332.50         49,725.01       64,090.01
                                                                                                  
Guardian Technologies, 
  Inc.*                  8,333 common stock              Feb-97        8,750.00         11,457.88       17,968.75
                         90,533 common stock             Mar-97      126,450.00        124,482.88      195,212.50
                         5,000 common stock              Jun-97        6,260.00          6,875.00              - 
                         137,000 warrants                Mar-97       26,255.00          8,562.50       25,687.50
                                                                  --------------    --------------    -----------
                                                                     167,715.00        151,378.26      238,868.75
                                                                                                  
Kinetiks.com*            10,000 common stock             Sep-96       38,125.00          3,125.00        3,750.00
                         11,000 common stock             Oct-96       24,312.50          3,437.50        4,125.00
                         20,000 common stock             Nov-96       12,187.50          6,250.00        7,500.00
                         62,500 common stock             Dec-96       44,851.88         19,531.25       23,437.50
                         50,000 warrants                 Feb-97            0.00          3,125.00        6,250.00
                         50,000 warrants                 Mar-97            0.00          3,125.00        6,250.00
                         50,000 warrants                 Apr-97            0.00          3,125.00              - 
                         50,000 warrants                 May-97            0.00          3,125.00              - 
                         50,000 warrants                 Jun-97            0.00          3,125.00              - 
                                                                  --------------    --------------    -----------
                                                                     119,476.88         47,968.75       51,312.50
                                                                                                  
Land Resource 
  Corporation*           10,000 common stock             Mar-97       10,000.00         10,000.00       10,000.00
                                                                                                  
Lone Oak Vineyards, 
  Inc.                   35,000 common stock             Feb-97       35,000.00         35,000.00       35,000.00
                                                                                                  
Navidec                  1,811 common stock              Feb-97        7,705.20         11,092.38        9,281.38
                         6,072 warrants                  Feb-97            0.00          4,744.05        3,795.00
                                                                  --------------    --------------    -----------
                                                                       7,705.20         15,836.43       13,076.38
                                                                                                  
Optek Music              175,000 preferred stock         Apr-97       35,000.00         35,000.00              - 
                                                                                                  
Optimax Industries, 
  Inc.*                  135,191 common stock            Jun-94      162,229.20         92,943.81      371,775.25
                         12,500 warrants                 Sep-93            0.00          3,125.00        9,375.00
                                                                  --------------    --------------    -----------
                                                                     162,229.20         96,068.81      381,150.25
                                                                                                  
Power Surge, Inc.        20 common stock                 May-97      300,000.00        300,000.00              - 
                                                                                                  
Southshore 
  Corporation***         7,400 common stock              Mar-94       11,770.44          3,700.00        3,700.00
                         10,000 common stock             Dec-95        3,200.00          5,000.00        5,000.00
                                                                  --------------    --------------    -----------
                                                                      14,970.44          8,700.00        8,700.00
                                                                                                  
Training Devices, Inc.   20,000 common stock             Feb-97       25,000.00         25,000.00       25,000.00
                                                                                                  
Usasurance Group*        15,000 common stock             Jul-96       94,550.00         37,500.00       45,000.00
                         10,000 common stock             Sep-96       62,750.00         25,000.00       30,000.00
                         2,500 common stock              Oct-96       12,375.00          6,250.00        7,500.00
                         31,500 common stock             Dec-96       73,777.00         78,750.00       94,500.00
                         2,500 common stock              Jan-97        8,750.00          6,250.00        7,500.00
                         2,500 common stock              Jun-97        2,066.25          6,250.00              - 
                                                                  --------------    --------------    -----------
                                                                     254,268.25        160,000.00      184,500.00
                                                                                                  
Total Restricted Securities                                        1,552,732.47      1,179,712.26    1,156,732.89

                                                                                                  
UNRESTRICTED SECURITIES:
-----------------------
Astea International      5,000 common stock              Sep-96               -                 -       20,000.00
                         5,000 common stock              Nov-96               -                 -       20,000.00
                         10,000 common stock             Feb-97       54,875.00         28,125.00       40,000.00
                         5,000 common stock              Jun-97       16,354.41         14,062.50              - 
                                                                  --------------    --------------    -----------
                                                                      71,229.41         42,187.50       80,000.00
                                                                                                  
Cable & Company 
  Worldwide              40,000 common stock             Jan-97       27,200.00         11,252.00       16,250.00
                         60,000 common stock             Jan-97               -                 -       24,375.00
                         10,000 common stock             Mar-97        5,165.00          2,813.00        4,062.50
                                                                  --------------    --------------    -----------
                                                                      32,365.00         14,065.00       44,687.50
                                                                                                  
Corfacts, Inc.           165,000 common stock            Jul-96       10,312.50         10,312.50       16,500.00
                         35,000 common stock             Jul-96               -                 -        3,500.00
                                                                  --------------    --------------    -----------
                                                                      10,312.50         10,312.50       20,000.00
                                                                                                  
Enhanced Services        1,000 common stock              Dec-96        3,665.00          3,250.00        4,500.00
                         1,500 common stock              Dec-96               -                 -        6,750.00
                         6,000 common stock              Jan-97       20,212.50         19,500.00       27,000.00
                                                                  --------------    --------------    -----------
                                                                      23,877.50         22,750.00       38,250.00
                                                                                                  
Exploration Company, 
  The                    5,000 common stock              Oct-96       14,475.00         36,250.00       30,000.00
                         2,500 common stock              Oct-96               -                 -       15,000.00
                         50,000 common stock             Mar-97      250,000.00        362,500.00      300,000.00
                                                                  --------------    --------------    -----------
                                                                     264,475.00        398,750.00      345,000.00
                                                                                                  
Image Matrix             10,000 units (1com/1wrnt)       Jun-96               -                 -       28,125.00
                                                                                                  
Jayark Corporation       20,000 common stock             Apr-97        5,625.00          3,750.00              - 
                                                                                                  
Laser Recording 
  Systems, Inc.          100,000 common stock            Jun-95        5,050.00          2,000.00        2,000.00
                                                                                                  
Organic Solutions, Inc.  42,500 common stock             Feb-97       42,842.35         31,875.00       37,187.50
                         7,500 common stock              Feb-97               -                 -        6,562.50
                                                                  --------------    --------------    -----------
                                                                      42,842.35         31,875.00       43,750.00
                                                                                                  
Pacific Biometrics, 
  Inc.                   7,500 common stock              Oct-96       36,252.00         12,656.25       15,000.00
                         5,000 common stock              Feb-97       17,343.75          8,437.50       10,000.00
                                                                  --------------    --------------    -----------
                                                                      53,595.75         21,093.75       25,000.00
                                                                                                  
Poore Brothers           4,000 common stock              Dec-96               -                 -       12,000.00
                                                                                                  
Racom Systems, Inc.      10,000 common stock             Mar-97               -                 -      27,500.00 
                         10,000 warrants                 Mar-97               -                 -       5,000.00 
                                                                  --------------    --------------    -----------
                                                                           0.00              0.00      32,500.00 
                                                                                                  
Redwood Broadcasting, 
  Inc.                   5,000 common stock              Feb-97            0.00          7,500.00       7,500.00 
                                                                                                  
S&P 500                  10 puts Dec '97 550             Jul-96       10,530.54             62.50       1,500.00 
                         10 puts Dec '97 550             Aug-96       11,291.41             62.50       1,500.00 
                         20 puts Dec '97 550             Sep-96       16,852.35            125.00       3,000.00 
                         40 puts Dec '97 600             Dec-96       40,120.00          2,750.00      17,000.00 
                                                                  --------------    --------------    -----------
                                                                      78,794.30          3,000.00      23,000.00 
                                                                                                  
Shiva Corporation        2,630 common stock              Dec-96            0.00         27,450.63      23,012.50 
                                                                                                  
Shopsmith                10,000 common stock             Sep-96               -                 -      24,375.00 
                         5,000 common stock              Oct-96       11,875.00         14,687.50      12,187.50 
                         5,000 common stock              Oct-96               -                 -      12,187.50 
                                                                  --------------    --------------    -----------
                                                                      11,875.00         14,687.50      48,750.00 
                                                                                                  
Tampa Bay Corporation    5,000 common stock              Dec-96               -                 -       3,750.00 
                         10,000 common stock             Jan-97               -                 -       7,500.00 
                         25,000 common stock             May-97        5,467.50         7,812.50              -  
                                                                  --------------    --------------    -----------
                                                                       5,467.50          7,812.50      11,250.00 
                                                                                                  
TELS Corporation         20,000 common stock             Aug-96       12,812.50          5,626.00      10,625.00 
                         10,000 common stock             Sep-96        5,937.50          2,810.00       5,312.50 
                                                                  --------------    --------------    -----------
                                                                      18,750.00          8,436.00      15,937.50 
                                                                                                  
Topro, Inc.              2,500 common stock              Sep-96               -                 -       3,281.00 
                         2,500 common stock              Nov-96               -                 -       3,281.00 
                         2,500 common stock              Dec-96               -                 -       3,281.00 
                         2,500 common stock              Jan-97               -                 -       3,281.00 
                         5,000 common stock              Feb-97               -                 -       6,562.50 
                         35,000 common stock             Mar-97               -                 -      45,937.50 
                         5,000 common stock              Mar-97               -                 -       6,562.50 
                                                                  --------------    --------------    -----------
                                                                           0.00              0.00      72,186.50 
                                                                                                  
Whitewing Labs           20,000 common stock             Jan-97       31,350.00         11,250.00      15,000.00 
                                                                  --------------    -------------- --------------

Total Unrestricted Securities                                        655,609.31        626,920.38     887,949.00 
                                                                                                  

OTHER SECURITIES:
----------------
Columbine Home Sales, 
  LLC*                   Note Receivable, 10%            Dec-95            0.00          5,814.06       5,814.06 
                                                                                                  
Damach                   Note Receivable,12%, 
                           due 3/31/97                   Oct-96       32,500.00         32,500.00      32,500.00 
                                                                                                  
Phil Georgeson           Note Receivable,12%, 
                           due on demand                 Aug-96        6,789.55          6,789.55       9,962.78 
                                                                                                  
Global Casinos, Inc.*    Note Receivable, 8%, 
                           due 11/1/98                   Nov-96      175,000.00        175,000.00     175,000.00 
                         Note Receivable, 9%,
                           due on demand                 Mar-97       40,843.70         40,843.70      40,843.70 
                                                                  --------------    --------------  -------------
                                                                     215,843.70        215,843.70     215,843.70 
                                                                                                  
Kinetiks.com*            Note Receivable, 10%, 
                           due 3/30/97                   Feb-97       25,000.00         25,000.00      25,000.00 
                                                                                                  
NS Properties            Note Receivable, 8%, 
                           due 1/2/98                    Jan-97       20,000.00         20,000.00      20,000.00 
                                                                                                  
Marco Foods, Inc.*       Note Receivable, 12% 
                           due on demand                 Jan-97      142,637.50        142,637.50      97,550.00 
                                                                  --------------    -------------- --------------

Total Other Securities                                               442,770.75        448,584.81     406,670.54 
                                                                  --------------    -------------- --------------
TOTAL INVESTMENTS                                                  2,651,112.53      2,255,217.45   2,451,352.43 

*    These entities are considered to be affiliated companies as a result of
     the Company's investment and/or position on the entity's Board of
     Directors during 1997.         
                         
**   After permanent write-downs.
                         
***  Certain shares are free trading either under Rule 144 of the Securities
     Act of 1933 or as a result of demand registration rights
</TABLE>
                 See accompanying notes to financial statements.<PAGE>
<PAGE>
<TABLE>
                             THE ROCKIES FUND, INC.
                             STATEMENT OF OPERATIONS
<CAPTION>
                                              For the              For the
                                        Three Months Ended   Three Months Ended
                                           June 30, 1997        June 30, 1996
                                            (Unaudited)          (Unaudited)
                                        ------------------   ------------------
<S>                                        <C>                   <C>         
INVESTMENT INCOME:
  Rental income                            $         0           $    38,913 
  Consulting and other services                  1,735                (4,457)
  Interest and dividends                        10,377                   148 
                                           ------------          ------------
      Total Income/Revenue                      12,112                34,605 
                                           ------------          ------------
Expenses:
  Wages and salaries                            38,656                41,456 
  Professional fees                             19,770                19,498 
  Directors fees                                 2,000                     0 
  Interest                                       6,960                 6,114 
  Travel and entertainment                       6,202                 2,714 
  Office                                        22,215                20,715 
  Building expenses                                 21                29,168 
  Investment expenses                            6,376                 3,143 
  Donations                                      4,000                     0 
    Bad Debt                                         0                 7,997 
                                           ------------          ------------
                                               106,200               130,806 

  Net investment loss                      $   (94,088)          $   (96,201)
                                           ============          ============
Net realized gain /loss from investments       (59,010)               36,593 
                                                                             
Net unrealized appreciation (depreciation)
of investments:
  Beginning of period                         (136,951)             (106,134)
  End of period                               (398,502)            1,390,067 
                                           ------------          ------------
  Net unrealized depreciation/
    appreciation of investments               (261,551)            1,496,201 

Net gain (loss) from investments           $  (320,561)          $ 1,532,794 
Net increase (decrease) in net assets      ============          ============
 resulting from operations                 $  (414,649)          $ 1,436,593 
                                           ============          ============
Per share amounts:                                     
  Net investment loss                           $(0.14)               $(0.15)
  Net realized gain /loss from investments       (0.09)                 0.05 
  Net unrealized depreciation of investments     (0.40)                 2.33 
                                           ------------          ------------
                                           $     (0.63)          $      2.23 
                                           ============          ============

</TABLE>
<PAGE>
<PAGE>
<TABLE>
                             THE ROCKIES FUND, INC.
                             STATEMENT OF OPERATIONS
<CAPTION>
                                             For the               For the
                                        Six Months Ended      Six Months Ended
                                          June 30, 1997         June 30, 1996
                                           (Unaudited)           (Unaudited)
                                       ------------------    ------------------
<S>                                       <C>                    <C>         
INVESTMENT INCOME:
  Rental income                           $    51,427            $    76,829 
  Consulting and other services                 1,886                  1,244 
  Interest and dividends                       22,941                    329 
                                          ------------           ------------
      Total Income/Revenue                     76,074                 78,402 
                                          ------------           ------------
Expenses:
  Wages and salaries                           74,827                 84,522 
  Professional fees                            24,063                 24,664 
  Directors fees                                4,000                      0 
  Interest                                     10,948                  9,432 
  Travel and entertainment                     17,594                  6,895 
  Office                                       53,654                 32,634 
  Building expenses                            40,742                 62,092 
  Investment expenses                          18,038                  3,736 
  Donations                                     6,425                      0 
  Bad Debt                                          0                  7,997 
                                          ------------           ------------
                                              250,291                241,972 

  Net investment loss                     $  (174,217)           $  (163,571)
                                          ============           ============

Net realized gain/loss from investments       419,531                133,783 
  Net unrealized appreciation 
  (depreciation) of investments:
    Beginning of period                       (20,322)                77,017 
    End of period                            (398,502)             1,390,067 
                                          ____________           ____________
  Net unrealized depreciation/
    appreciation of investments              (378,180)             1,313,050 

Net gain (loss) from investments          $    41,351            $ 1,446,833 
Net increase (decrease) in net 
  assets resulting from operations        $  (132,866)           $ 1,283,262 

Per share amounts:                                    
  Net investment loss                     $     (0.27)           $     (0.25)
  Net realized gain/loss from 
    investments                                  0.65                   0.20 
  Net unrealized depreciation of 
    investments                                 (.059)                 (2.05)
                                          ------------           ------------
                                          $       2.00           $     (0.21)
                                          ============           ============
/TABLE
<PAGE>
<PAGE>
<TABLE>
                                             THE ROCKIES FUND, INC.
                                       Statements of Stockholders' Equity
                                      Three Months Ended June 30, 1997 and
                                     Years Ended December 31, 1996 and 1995
<CAPTION>
                                                                        Accumulated
                                                                       Net Realized          
                                                                       Gain (Losses)         
                                                                           From       Unrealized Net 
                                                        Accumulated      Sales And     Appreciation
                                          Additional        Net          Permanent    (Depreciation)
                               Common       Paid-In     Investment     Write-Downs          of            Net
                                Stock       Capital       (Loss)       Of Securities    Investments     Assets
                               ------     ----------   ------------    -------------   ------------   -----------
<S>                            <C>        <C>          <C>               <C>           <C>            <C>        
BALANCES AT 
 DECEMBER 31, 1995             $6,403     $2,901,243   $(1,464,614)      $(212,485)    $  77,017      $1,307,564 
                               ======     ==========   ============      ==========    ==========     ===========
Net investment loss                --             --      (428,689)              --            --       (428,689)
Net realized gain on 
 sale of investments               --             --             --       1,549,196            --      1,549,196 
Unrealized net depreciation 
 of investments                    --             --             --              --      (97,339)        (97,339)
                               ------     ----------   ------------      ----------    ----------     -----------
BALANCES AT 
 DECEMBER 31, 1996             $6,403     $2,901,243   $(1,893,303)      $1,336,711    $ (20,322)     $2,330,732 
                               ======     ==========   ============      ==========    ==========     ===========
Net investment loss                --             --       (80,150)              --            --        (80,150)
Net realized gain on
 sale of investments               --             --             --         478,541             -        478,541 
Unrealized net depreciation 
 of investments                    --             --             --              --     (116,629)       (116,629)
                               ------     ----------   ------------      ----------    ----------     -----------
BALANCES AT 
 MARCH 31, 1997                $6,403     $2,901,243   $(1,973,453)      $1,815,252    $(136,951)     $2,612,494 
                               ======     ==========   ============      ==========    ==========     ===========
Net Investment Loss                --             --       (94,088)              --            --        (94,088)
Net realized gain on
 sale of investments              ---            ---            ---        (59,010)           ---        (59,010)
Unrealized net depreciation 
 of investment                    ---            ---            ---             ---     (261,551)       (261,551)

BALANCES AT JUNE 30, 1997     $6,404      $2,901,243   ($2,067,541)      $1,756,242    ($398,502)      $2,197,845
                              ======      ==========   ============      ==========    ==========      ==========
</TABLE>
<PAGE>
<PAGE>
<TABLE>
                             THE ROCKIES FUND, INC.
                       STATEMENT OF CHANGES IN NET ASSETS

<CAPTION>

                                                   For the            For the
                                              Six Months Ended   Six Months Ended
                                                June 30, 1997      June 30, 1996
                                                 (Unaudited)        (Unaudited)
                                              ----------------   ----------------
<S>                                             <C>                 <C>         
Increase (decrease) in net assets
 from investment activities:                                
  Net investment loss                           $  (174,217)        $  (163,571)
   
  Net realized gain/loss from investments           419,531             133,783 
                                                                                
  Net unrealized depreciation of investments       (378,180)          1,313,050 
                                                ____________        ____________
  Net increase (decrease) in net assets
    from investment activities                     (132,866)          1,283,262 

  Net assets at beginning of year                 2,330,732           1,307,564 
                                                ____________        ____________

  Net asset at end of period                    $ 2,197,845         $ 2,590,828 
                                                ============        ============
/TABLE
<PAGE>
<PAGE>
                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)
  


1.   ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
     -----------------------------------------------------------
     (a)  Organization and Basis of Presentation.
          --------------------------------------
          The Rockies Fund, Inc. (the "Fund" or the "Company") was incorporated
in Nevada on August 2, 1983, for the principal purpose of making venture
capital investments in developing companies located primarily in the Rocky
Mountain Region of the United States.  The Fund is registered under the
Investment Fund Act of 1940 as a business development company.

          The interim unaudited financial statements have been prepared by the
Rockies Fund, Inc. and, in the opinion of management, reflect all material
adjustments which are necessary to a fair statement of results of the interim
periods presented.  Such adjustments consisted only of normal recurring items
(except as discussed in Note 3).  Certain information and footnote disclosure
made in the last annual report on Form 10-K have been condensed or omitted for
the interim statements.  These statements should be read in conjunction with
the financial statements and notes thereto included in Form 10-K for the year
ended December 31, 1996.  The results of the interim periods are not
necessarily indicative of results which may be expected for any other interim
period or for the full years.


     (b)  Investment Valuation and Transactions.
          -------------------------------------
          Securities listed or traded on an exchange are valued at their last
sales price on the exchange where the securities are principally traded. 
Securities reported on the NASDAQ National Market System are valued , at the
closing bid price on the valuation date.  Securities traded in the over-the-
counter market are valued at the last bid price, based upon quotes furnished by
independent market makers for such securities.  Investments in notes receivable
are valued at net realizable value.  The Fund performs on-going evaluations
regarding collectability of receivables and provides allowances for potential
losses.

          In the absence of readily ascertainable market values, investments in
restricted securities without quoted market prices are carried at estimated
fair value as determined by the Fund's Board of Directors (the "Board").  Due
to the inherent uncertainty of valuation, those estimated values may differ
significantly from the values that would have been used had a ready market for
the investments existed, and the differences could be material.

          Securities transactions are accounted for on a trade date basis. 
Where possible, realized gains and losses on the sales of investments are
determined using the specific identification method.  If the specific
identification method cannot be utilized, realized gains and losses are
determined using the first in-first out method.  Substantially all of the
Fund's investments are non-income producing.

     (c)  Income Taxes.
          ------------
          As a business development company, the Fund is subject to Federal and
State income taxes at the applicable corporate rates.  Deferred income taxes
are provided for timing differences between the reporting of income for
financial statement and tax return purposes, principally realized and
unrealized gains on investments.  For Federal and State income tax purposes,
the investments have the same cost basis as shown in the financial statements.

          Income tax payable consists of approximately $100,000 of federal and
$18,000 of state taxes resulting from the 1996 net realized gain from sale of
investments.   


2.   PORTFOLIO SECURITIES
     --------------------

     AMERICAN EDUCATIONAL PRODUCTS, INC.
     -----------------------------------
     The Fund, at June 30, 1997, held 40,000 shares of American Educational
Products, Inc. common stock, after giving effect to a one-for-five (1:5)
reverse stock split, which shares are restricted as to sale,  non-income
producing and have been valued by the Board of Directors at their quoted market
price of $5.625 per share or $225,000.  The Fund also held at June 30, 1997
common stock purchase warrants exercisable to purchase an additional 40,000
shares of common stock of American Educational Products, Inc. at an exercise
price of $4.50 per share.  The Board of Directors valued these warrants at
$0.00 because they cannot be exercised until after September 23, 1997. The Fund
also held at June 30, 1997 common stock purchase warrants exercisable to
purchase an additional 40,000 shares at an exercise price of $10.00 per share. 
The Board of Directors valued these warrants at $0.00.  The Fund does have
certain registration rights relating to these shares and warrants.

     ASTEA INTERNATIONAL
     -------------------
     The Fund, at June 30, 1997, held 15,000 shares of Astea International
common stock, which shares are unrestricted as to sale, non-income producing,
and have been valued at their quoted market price of $2.8125 per share or
$42,187.50.

     BEAR STAR (fka COLUMBINE HOME SALES, LLC.)
     ------------------------------------------
     The Fund has invested in Bear Star, which investment is restricted as to
sale, non-income producing, and has been valued by the Board of Directors at
$0.00.  The Fund also holds a note receivable from Columbine Homes with
remaining amounts due of $5,814.  The note accrues interest at the rate of 10%
per year, and is due on demand.

     CABLE AND COMPANY WORLDWIDE
     ---------------------------
     The Fund, at June 30, 1997, held 50,000 shares of Cable and Company
Worldwide common stock, which stock is unrestricted as to sale, non-income
producing, and has been valued at its quoted market price of $.28125 per share
or $14,065.

     CORFACTS, INC.
     --------------
     The Fund, at June 30, 1997, held 165,000 shares of Corfacts, Inc. common
stock, which shares are unrestricted as to sale, non-income producing, and have
been valued at their quoted market price of $.06 per share or $10,312.50.

     COVA TECHNOLOGIES
     -----------------
     The Fund at June 30, 1997 held 917 shares of Cova Technologies common
stock, which stock is restricted as to sale, non-income producing, and has been
valued by the Board of Directors at its cost of $20,035.

     DAMACH
     ------
     The Fund, at June 30, 1997 held a note receivable from Damach in the
amount of $32,500 which accrues interest at the rate of 12% per year and was
originally due on June 30, 1997.  An extension agreement was signed on March 4,
1997 to extend this promissory note receivable to a month to month basis or
until the Fund makes a written request for payment.

     ENHANCED SERVICES, INC.
     -----------------------
     The Fund, at June 30, 1997, held 7,000 shares of Enhanced Services, Inc.
common stock which shares are unrestricted as to sale, non-income producing and
have been valued at their quoted market price of $3.25 per share or $22,750.

     EXPLORATION COMPANY, THE
     ------------------------
     The Fund, at June 30, 1997, held 55,000 shares of The Exploration Company
common stock, which shares are unrestricted as to sale, non-income producing,
and have been valued at their quoted market price of $7.25 per share or
$398,750.  These share have been pledged as collateral securing a $300,000 note
payable to Merit Broadcasting.

     GEORGESON, PHIL
     ---------------
     The Fund, at June 30, 1997 held a note receivable from Phil Georgeson in
the amount of $9,962.78.  The note is secured by 7,000 shares of National
Equities Holdings, Inc. common stock, accrues interest at the rate of 12% per
year and is due on demand.

     GLOBAL CASINOS, INC.
     --------------------
     The Fund, at June 30, 1997, held 17,680 shares of Global Casinos, Inc.
common stock, after giving effect to a 1-for-10 reverse split.  The shares are
restricted as to sale due to the company being an affiliate, non-income
producing, and have been valued by the Board of Directors at their quoted
market price of $2.8125 per share, or $49,725.  The Fund, at June 30, 1997,
also held a note receivable from Global Casinos, Inc. in the amount of
$175,000, which note is unsecured, accrues interest at the rate of 8% per year,
and is due November 1, 1998.  Said note is convertible into shares of Global
Casinos, Inc. common stock at a conversion price of $5.00 per share anytime
after November 1, 1997.  The Fund holds a second note receivable from Global
Casinos in the amount of $40,843.70, which note is unsecured, accrues interest
at the rate of 9% per year, is due on demand, and is convertible into Global
Casinos common stock at $5.00 per share.  The Fund also owns 35,000 Global
warrants exercisable at $6.00, 35,000 warrants exercisable at $7.00 and 35,000
warrants exercisable at $8.00 per share, all of which expire as of February 1,
1998 and have been valued at $0 by the Board of Directors.

     GUARDIAN TECHNOLOGIES, INC.
     ---------------------------
     The Fund, at June 30, 1997 held 103,867 shares of Guardian Technologies
common stock, after giving effect to a one-for-three (1:3) reverse split, which
shares are restricted due to the company being an affiliate, non-income
producing, and have been valued at their quoted market price of $1.375 per
share or $142,815.76.  The Fund also held warrants exercisable to purchase an
additional 137,000 shares of Guardian Technologies common stock, which warrants
are also restricted due to the company being an affiliate, non-income
producing, and have been valued at their quoted market price of $.0625 each or
$8,562.50.

     JAYARK CORPORATION
     ------------------
     The Fund, at June 30, 1997 held 20,000 shares of Jayark Corporation common
stock, which shares are unrestricted as to sale, non-income producing and have
been valued at their quoted market price of $.1875 per share or $3,750.

     KINETIKS.COM
     ------------
     The Fund, at June 30, 1997 held 103,500 shares of freely traded
Kinetiks.com common stock, which shares are restricted as to sale due to the
Company being an affiliate, non-income producing, and have been valued at their
quoted market price of $.3125 per share or $32,343.75.  The Fund also held
warrants to purchase and additional 250,000 shares of Kinetiks.com common stock
at an exercise price of $.25 per share.  The warrants have been valued by the
Board of Directors at $.0625 or $16,625 which represents the difference between
the exercise price of the warrants and the market price of the common stock. 
The Fund also held a note receivable in the amount of $25,000 which note is
unsecured, accrues interest at the rate of 10% per year, and was due on March
30, 1997.  The note provides for a default interest rate of 18% and an
additional 50,000 warrants for each 30-day period that it goes unpaid.

     LAND RESOURCE CORPORATION
     -------------------------
     The fund, at June 30, 1997 held 10,000 shares of Land Resource Corporation
common stock, which shares are restricted as to sale, non-income producing, and
have been valued by the Board of Directors at their cost of $1.00 each or
$10,000.

     LASER RECORDING SYSTEMS, INC.
     -----------------------------
     The Fund, at June 30, 1997, held 100,000 shares of Laser Recording
Systems, Inc. common stock, which shares are unrestricted as to sale, non-
income producing and have been valued at their quoted market price of $.02 per
share or $2,000.

     LOAN OAK VINEYARDS, INC.
     ------------------------
     The Fund, at June 30, 1997 held 35,000 share of Loan Oak Vineyards common
stock, which shares are restricted as to sale, non-income producing, and have
been valued by the Board of Directors at their cost of $1.00 each or $35,000.

     MARCO FOODS, INC.
     -----------------
     The Fund, at June 30, 1997 held a note receivable from Marco Foods in the
amount of $133,137.50, which note is unsecured, accrues interest at the rate of
12% per year and is due on demand.

     NS PROPERTIES
     -------------
     The Fund, at June 30, 1997 held a note receivable from NS Properties in
the amount of $20,000, which note is unsecured, accrues interest at the rate of
8% per year and is due January 2, 1998.

     NAVIDEC, INC.
     -------------
     The Fund, at June 30, 1997, held 1,811 shares of Navidec common stock,
which shares are unrestricted as to sale, non-income producing, and have been
valued at their quoted market price of $6.125 per share or $11,092.38.  The
Fund also held warrants to purchase an additional 6,072 shares of common stock,
which warrants are unrestricted as to sale, non-income producing, and have been
valued at their quoted market price of $.78125 per share or $4,744.05.

     OPTEK MUSIC, INC.
     -----------------
     At June 30, 1997, the Fund held 175,000 shares of Optek Music preferred
stock, which shares are restricted as to sale, non-income producing and have
been valued by the Board of Directors at their cost of $.20 per shares or
$35,000.
     
     OPTIMAX INDUSTRIES, INC. (fka PLANTS FOR TOMORROW, INC.)
     --------------------------------------------------------
     At June 30, 1997, the Fund held 135,191 shares of Optimax Industries, Inc.
common stock, which shares are restricted as to sale due to a lock-up agreement
and the company being an affiliate.  The shares have been valued at $.6875 per
share or $92,943.81.  The Fund also holds warrants to purchase an additional
12,500 shares of Optimax Industries, Inc. common stock, which warrants are
valued at their quoted market price of $.25 each or $3,125.  The shares of
Optimax are pledged as collateral securing the Fund's line of credit.

     ORGANIC SOLUTIONS, INC.
     -----------------------
     The Fund, at June 30, 1997 held 42,500 shares of Organic Solutions common
stock, which shares are unrestricted as to sale, non-income producing, and have
been valued at their quoted market price of $.75 per share or $$31,875.

     PACIFIC BIOMETRICS, INC.
     ------------------------
     The Fund, at June 30, 1997, held 12,500 shares of Pacific Biometrics, Inc.
common stock, which shares are unrestricted as to sale, non-income producing
and have been valued at their quoted market price of $1.6875 or $21,093.75.

     POWER SURGE, INC.
     -----------------
     The Fund, at June 30, 1997, held 20 shares of Power Surge, Inc. common
stock, which shares are restricted as to sale, non-income producing and have
been valued by the Board of Directors at their cost of $15,000 per share or
$300,000.  Said shares were purchased in exchange for assuming a $300,000 share
of a 10 year 8% promissory note between the seller of the shares and a third
party.

     REDWOOD BROADCASTING, INC.
     --------------------------
     The Fund, at June 30, 1997 held 5,000 shares of Redwood Broadcasting
common stock, which shares are unrestricted as to sale, non-income producing,
and have been valued by the Board of Directors at $1.50 per share or $7,500.

     S&P 500
     -------
     The Fund, at June 30, 1997, held 4,000 puts against the S&P 500 at 550. 
The puts are unrestricted as to sale and expire on December 20, 1997.  They
have been valued at their quoted market price of $.0625 or $250. The Fund, at
June 30, 1997, also held 4,000 puts against the S&P 500 at 600.  The puts are
unrestricted as to sale and expire on December 20, 1997.  They have been valued
at their quoted market price of $.6875 or $2,750.

     SHIVA CORPORATION
     -----------------
     The Fund, at June 30, 1997, held 2,630 shares of Shiva Corporation common
stock, which shares are unrestricted as to sale, non-income producing and have
been valued at their quoted market price of $10.4375 per share or $27,450.63. 
The shares had previously been held in escrow pending the completion of certain
performance requirements by Airsoft, Inc.

     SHOPSMITH
     ---------
     The Fund, at June 30, 1997, held 5,000 shares of Shopsmith common stock,
which shares are unrestricted as to sale, non-income producing, and have been
valued at their quoted market price of $2.9375 per share or $14,687.50.

     SOUTHSHORE CORPORATION
     ----------------------
     At June 30, 1997, the Fund held 17,400 shares of Southshore Corporation
common stock, which shares are restricted as to sale, non-income producing, and
have been valued at their quoted market price of $.50 per share or $8,700.  

     TAMPA BAY CORPORATION
     ---------------------
     The Fund, at June 30, 1997, held 25,000 shares of Tampa Bay Corporation
common stock, which shares are unrestricted as to sale, non-income producing,
and have been valued at their quoted market price of $.3125 per share or
$7,812.50.

     TELS CORPORATION
     ----------------
     The Fund, at June 30, 1997, held 30,000 shares of TELS Corporation common
stock, which shares are unrestricted as to sale, non-income producing, and have
been valued at their quoted market price of $.28125 per share or $8,436.

     TRAINING DEVICES, INC.
     ----------------------
     The Fund, at June 30, 1997 held 20,000 share of Training Devices common
stock, which shares are restricted as to sale, non-income producing, and have
been valued by the Board of Directors at their cost of $1.25 per share or
$25,000.

     USASURANCE GROUP
     ----------------
     The Fund, at June 30, 1997, held 64,000 shares of Usasurance Group common
stock, which shares are restricted as to sale due to the company being an
affiliate, non-income producing, and have been valued at their quoted market
price of $2.50 or $184,500.

     WHITEWING LABS
     --------------
     The Fund, at June 30, 1997 held 20,000 share of Whitewing Labs common
stock, which shares are unrestricted as to sale, non-income producing, and have
been valued at their quoted market price of $.5625 per share or $11,250.


3.   REAL ESTATE OPERATIONS
     ----------------------
     Effective March  31, 1997, the Rockies Fund, Inc. consummated the sale of
its 26,000 square foot commercial office building located at 4465 Northpark
Drive, Colorado Springs, Colorado  (the "Building").  The sale price for the
building was $1,080,000, which was paid in cash at closing.  The proceeds
received were utilized in part to pay approximately $452,000 of mortgage and
other debt.  This transaction resulted in a net gain of approximately $388,000.

     In a concurrent transaction structured to qualify as a tax-free exchange
under Section 1031 of the Internal Revenue Code of 1986, as amended, the Fund,
on April 1, 1997 consummated the purchase of 5 acres of undeveloped commercial
real estate located at 3210 Woodman Road, Colorado Springs, Colorado (the
"Property").  The Fund plans to undertake a phased development of two
commercial office buildings on the Property which will, upon completion,
consist of an aggregate of 55,000 square feet of commercial office space.  The
purchase price for the Property was $390,000, which was paid in cash on April
1, 1997 at the time of closing utilizing a portion of the proceeds realized by
the Fund from the sale of the Building.  The Fund intends to hold this new real
estate in a wholly owned subsidiary called Strategic Properties, Inc.

     The Fund plans to occupy its current executive office space located in the
Building under a lease with the new owners, Northpark, L.L.C. for $900 a month.

     The commercial real estate market in Colorado Springs, Colorado, although
steadily improving over the last several years, still remains very competitive. 
While the Board does not believe that a single firm or group dominates the
commercial real estate industry in Colorado Springs, many of the participants
are well-established and possess far greater financial and market resources
than the Fund.


4.   CONTINGENCIES
     -------------

     Securities and Exchange Commission Investigation:

          During 1996 and 1995, the Fund received requests for information from
the U.S. Securities and Exchange Commission ("SEC") related to an investigation
by the SEC which began in 1994 into various matters, including the
administrative and record keeping practices of the Fund, its securities trading
activities and those of one of its officers.

          In September 1996, the Fund received notification from the SEC that
the SEC staff was planning to recommend that an enforcement action be brought
against the Fund, its president, and each of its directors due to certain
alleged violations of federal securities laws.

          The SEC invited the Fund to make a submission setting forth the
Fund's position and arguments regarding the SEC staff's planned recommendation. 
The Fund did so in October 1996, and, at the SEC's request, the Fund
supplemented its submission in December 1996.  The SEC has not responded to the
Fund's submissions and has not advised the Fund of any timetable for the SEC
staff to make its final determination about whether to recommend an enforcement
action.

          Management is unable to predict, with any certainty, the outcome of
the investigation, or the ultimate effect on the Fund.
     


<PAGE>
<PAGE>
                           FORWARD-LOOKING STATEMENTS
                           --------------------------
     In addition to historical information, this Quarterly Report contains
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995, and are thus prospective.  The forward-looking
statements contained herein are subject to certain risks and uncertainties that
could cause actual results to differ materially from those reflected in the
forward-looking statements.  Factors that might cause such a difference
include, but are not limited to, competitive pressures, changing economic
conditions, those discussed in the Section entitled "Management's Discussion
and Analysis of Financial Condition and Results of Operations," and other
factors, some of which will be outside the control of the Company.  Readers are
cautioned not to place undue reliance on these forward-looking statements,
which reflect management's analysis only as of the date hereof.  The Company
undertakes no obligation to publicly revise these forward-looking statements to
reflect events or circumstances that arise after the date hereof.  Readers
should refer to and carefully review the information in future documents the
Company files with the Securities and Exchange Commission.

<PAGE>
<PAGE>

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS.
-------------------------------------------------------------------------

          The following discussion and analysis should be read in conjunction
with the Financial Statements and Notes thereto appearing elsewhere in this
report.


LIQUIDITY AND CAPITAL RESOURCES - JUNE 30, 1997 COMPARED TO DECEMBER 31, 1996
-----------------------------------------------------------------------------
          During the three months ended June 30, 1997, the Fund liquidated
certain securities, including 10,000 shares of Asteal International, 35,000
shares of Corfacts, 1,500 shares of Enhanced Services, 2,500 shares of The
Exploration Company, 10,000 shares of Image Matrix, 7,500 shares of Organic
Solutions, 20,000 shares of Racom Systems, 15,000 shares of Tampa Bay Corp.,
55,000 shares of Topro, and 4,000 shares of Poor Brothers.  The proceeds
received from the liquidation of these securities allowed the Fund to add a
limited number of new investments to the Fund's portfolio, including the
following:

          During the three months ended June 30, 1997, the Fund acquired
40,000 warrants of American Educational Products for a total investment of $0;
5,000 shares of Astea International for a total investment of $16,354; 5,000
shares of Guardian Technologies for a total investment of $13,125; 150,000
shares of Kinetiks for a total investment of $0.00; 175,000 shares of Optek
Music for a total investment of $35,000; 20 shares of Power Surge for the total
investment of $300,000; 25,000 shares of Tampa Bay for a total investment of
$5,468 and 2,500 shares of Usassurance for a total investment of $2,066.

          The Fund has sold several investments in its portfolio contributing
to the decreased value of restricted and unrestricted securities from
$1,841,093 as of December 31, 1996 to $1,806,633 as of June 30, 1997, a
decrease of $34,460 or 01%.

          Current notes receivable  increased from $138,404 as of December 31,
1996 to $279,884 as of June 30, 1997, an increase of $141,480 or 102%, due
primarily to a new note receivable of approximately $143,000 due from Marco
Foods.   As a result accrued interest receivable increased $13,584 or 106% at
June 30, 1997.  Cash held by related parties and others decreased from $499,404
as of December 31, 1996 to $149,149 as of June 30, 1997 utilized primarily to
purchase undeveloped commercial real estate located at 3210 Woodman Road,
Colorado Springs, Colorado and related development expenses.

          Total current assets, therefore decreased from $2,530,571 at
December 31, 1996 to $2,264,494 at June 30, 1997, a decrease of $266,077 or
approximately 10%.

          During the six months ended June 30, 1997, the Fund sold its office
building for a net gain  and subsequently acquired commercial real estate
property for $390,000, improvements for $62,582 and an automobile for $15,162. 
As a result, total property and equipment decreased from $764,521 as of
December 31, 1996 to $472,460 as of June 30, 1997, a decrease of 292,061 or
38%.

          The Fund, as of June 30, 1997 had a note receivable outstanding with
its affiliate, Global Casinos, for $175,000, accruing interest at  8% and
convertible to Global Casinos shares at $5.00 per share.

          Based on the foregoing, total assets decreased from $3,470,092 on
December 31, 1996 to $2,911,954 on June 30, 1997, a decrease of $558,138 or
16%.

          Total liabilities decreased significantly from $1,139,360 as of
December 31, 1996 to $714,110 as of June 30, 1997, a reduction of $425,250 or
37%.  The reduction in liabilities weas mainly attributable to the sale
proceeds of the Northpark office building and utilizing investment sale
proceeds to pay off debt.  Payables to related parties were paid off by June
30, 1997 and had a balance of $153,566 as of December 31, 1996.  Payables for
investment securities were paid and had a balance of $116,882 as of December
31, 1996 and accrued liabilities decreased $38,951 or 47%.  Liabilities related
to the sale of the Northpark office building were mortgage note payable,
current portion, security deposits, other liabilities (due to lessee) and the
State Bank and Trust line of credit secured by the Fund's office building,
reducing liabilities by $518,190.  

          The Fund acquired a new note payable to Merit Broadcasting for
$300,000 for the purchase of shares  of Power Surge, Inc. and a long term
liability of 9,718  for the purchase of a company automobile.

          The Fund still holds a $75,000 line of credit with a balance of
$74,500 as of June 30, 1997 that accrues interest at 10.5%  and is secured by
the Fund's  shares  of Optimax Industries security.

          Based on the foregoing, Net Asset Value decreased during the six
months ended June 30, 1997, from $2,330,732 at December 31, 1996, to $2,197,845
at June 30, 1997, a decrease of $132,887 or nearly 6%.  Net assets per common
share decreased from $3.64 per share at December 31, 1996, to $3.43 per share
on June 30, 1997, a decrease of $0.21.

          Management knows of no trends or demands, commitments, events or
uncertainties which will result in the Fund's liquidity or capital resources
materially increasing or decreasing.


RESULTS OF OPERATIONS THREE MONTHS ENDED JUNE 30, 1997 COMPARED TO THREE MONTHS
ENDED JUNE 30, 1996
-----------------------------------------------------------------------------
          The Fund's income/revenue for the three months ended June 30, 1997,
was $12,112 a decrease of $22,493 or 64% compared with the same period in 1996. 
This decrease in income/revenue was due to the Fund's office building being
sold and therefore producing no rental income during the 2nd quarter of 1997. 
Interest and dividend income increased however from $148 for the quarter ended
June 30, 1996 to $10,377 for the quarter ended June 30, 1997 due to the
increase of notes receivable.

Expenses decreased from $130,806 for the quarter ended  June 30, 1996 to
$106,200 for the quarter ended June 30, 1997, a decrease of $24,606 or 18%. 
Contributing to the decrease in expenses were a decrease in wages and salaries
of 6%, building expenses of approximately 99%, as the building incurred minimal
expenses due to the sale as of March 31, 1997, and no bad debts were incurred
during the quarter ended June 30, 1997.

          Based on the foregoing, the Fund reported a net investment loss for
the three months ended June 30, 1997, of $(94,088), a decrease of 2% when
compared to the net investment loss of $(96,201) incurred during the same
period in 1996.  

          The Fund's net realized loss from sales of investments was ($59,010)
for the quarter ended June 30, 1997, a decrease of $95,603 or 261%, compared to
a realized gain of $36,593 for the quarter ended June 30, 1996.  . Unrealized
net appreciation/depreciation relating to the current market value of
securities being held by the Fund decreased $1,757,752 from an unrealized net
gain of $1,496,201 for the quarter ended June 30, 1996 to an unrealized net
loss of $(261,551) for the quarter ended June 30, 1997, due to the unrealized
appreciation of the Shiva investment in 1996.

          Management knows of no trends or demands, commitments, events or
uncertainties which will result in the Fund's liquidity or capital resources
materially increasing or decreasing.  


RESULTS OF OPERATIONS SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO SIX MONTHS
ENDED JUNE 30, 1996
---------------------------------------------------------------------------
          The Fund's income/revenue for the six months ended June 30, 1997 was
$76,074 a  decrease of $2,328 from $78,402 for the six months ended June 30,
1996.  Rental  income decreased due to the building being sold as of March 31,
1997.  Interest income, however, increased due to interest earned on cash
balances and notes receivable during 1997.

Expenses increased slightly from $241,972 for the six months ended  June 30,
1996 to 250,291 for the six months ending June 1997.  The increases in expenses
were mainly attributable to the increase in directors fees, travel and
entertainment, office expenses, investment expenses and donations.

The Fund had a net realized loss of ($174,217) for the six months ending June
30, 1997 compared to ($163,571) for the six months ending June 30, 1996.  Net
realized gains increased from $133,783  for the six months ending June 30, 1996
to $419,531 for the six months  June 30, 1997 an increase of $285,748 or 214%. 
Net unrealized appreciation/depreciation of investments decreased significantly
from $1,313,050 for the six months ending June 30, 1996 to $(378,180) for the
six months ending June 30, 1997 a decrease of $1,691,230, due to the unrealized
appreciation of the Shiva investment in 1996.

Management knows of  no trends or demands, commitments, events or uncertainties
which will result in the Fund's liquidity or capital resources materially
increasing or decreasing.
<PAGE>
<PAGE>
                           PART 1.  OTHER INFORMATION


ITEM 1.   LEGAL PROCEEDINGS

          During the beginning of 1996, the Fund received requests for
information from the United States Securities and Exchange Commission ("SEC")
related to an investigation begun by the SEC during 1994 into various matters,
including the administrative and record keeping practices of the Fund, its
securities trading activities and those of its officers and directors.  In
September 1996, the Fund was notified by the Commission's Staff that it intends
to request that the Commission commence an administrative proceeding against
the Fund and its directors based upon certain transactions in securities
formerly included in the Fund's securities portfolio.  The Fund has responded
to Commission with a written submission which sets forth why there exists no
basis in fact or law for such a proceeding. It is impossible to predict whether
the staff will recommend a proceeding against the Fund or any of its directors,
and if such a recommendation is made, whether the Commission will authorize the
institution of a proceeding.  There can be no assurance of the outcome of this
matter or the ultimate effect on the Fund's financial position. 

          Other than the foregoing, the Fund is not a party to any material
pending legal proceedings.


ITEM 2.   CHANGES IN SECURITIES

          None.


ITEM 3.   DEFAULT UPON SENIOR SECURITIES

          There have been no defaults on any securities.  The Fund has no
obligations with regard to dividends and no preferred stock is outstanding.


ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

          On June 30, 1997, The Rockies Fund held the regular annual meeting of
shareholders.  The proxy results were as follows:

     Proposal #1, election of Fund's Directors:  

                                                     Votes 
                                    Votes For       Withheld
                                    ---------       --------
     Stephen G. Calandrella          599,862           77
     Charles Powell                  599,752           187
     Clifford C. Thygesen            599,862           77


     Proposal #2, approval of accountants:

                                      Votes      Votes    Absten-
                                       For      Against    tions
                                     -------    -------   -------
     Gelfond, Hochstadt, 
         Pangburn & Co.              589,011    10,378       550


ITEM 5.   OTHER INFORMATION

          None.

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

          EXHIBITS
          --------
          27.0      Financial Data Schedule for Investment Companies

          REPORTS ON FORM 8-K
          -------------------
          On April 15, 1997, the Company filed a Current Report on Form-K dated
March 31, 1997, related to the sale by the Company of a 26,000 square foot
commercial office building located at 4465 Northpark Drive, Colorado Springs,
Colorado, and the acquisition, in a concurrent transaction structured to
qualify as a tax-free reorganization under Section 10315 of the Internal
Revenue Code of 1986, as amended, of 5 acres of undeveloped commercial real
estate located at 3210 Woodman Road, Colorado Springs, Colorado, upon which the
Company plans to develop two commercial office buildings.  

          That report included:

               Item 2:   Acquisition and Disposition of Assets

               Item 7:   Financial Statements and Exhibits

                         (b)   Proforma Financial Information
                         (c)   Exhibits

                              10.1    Commercial Contract to Buy and Sell Real
                                      Estate dated February 24, 1997

                              10.3    Seller's Closing Schedule

                              10.4    Buyer's Closing Schedule

<PAGE>
<PAGE>
                                    SIGNATURE

     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 hereunto duly authorized.


                                    THE ROCKIES FUND, INC.



Dated:    August 19, 1997                By:  /s/ Stephen G. Calandrella
       -----------------------           ----------------------------------
                                         Stephen G. Calandrella, President



Dated:    August 19, 1997                By:  /s/Barbara A. Hamstad  
       -----------------------           ----------------------------------
                                         Barbara A. Hamstad
                                         Principal Accounting Officer