Sunstone Financial Group, Inc.
207 East Buffalo Street
Suite 400
Milwaukee, WI 53202
(414) 271-5885
August 28, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D.C. 20549
Re: Van Wagoner Funds, Inc. Semi-Annual Report
Filing Pursuant to Rule 30b2-1 and Section 24(b)
under the Investment Company Act of 1940
File Nos. 811-9116; 33-98358
Dear Sir/Madam:
On behalf of Van Wagoner Funds, Inc. (the "Funds"), transmitted herewith for
filing pursuant to Rule 30b2-1 and Section 24(b) under the Investment Company
Act of 1940, as amended, is the Funds' Semi-Annual Report to Shareholders for
the six months ended June 30, 1996.
Questions regarding this filing should be directed to the undersigned.
Sincerely,
/s/ Amy J. Thorison
Amy J. Thorison
Client Services & Accounting Manager
AJT/kg
Encl.
c: Garrett Van Wagoner
SEMI-ANNUAL
REPORT
JUNE 30, 1996
FOR FUND INFORMATION
AND SHAREHOLDER SERVICES
CALL 1-800-228-2121.
This report is submitted for the general information of shareholders of Van
Wagoner Funds. It is not authorized for distribution to prospective investors
unless accompanied or preceded by an effective prospectus for the Funds. The
prospectus gives details about charges, investment objectives, risks and
operating policies of the Funds. Read the prospectus carefully.
VAN WAGONER FUNDS
P.O. BOX 1628
MILWAUKEE, WI 53201-1628
June 30, 1996
DEAR SHAREHOLDER:
The first half of 1996 will be remembered as a period in which all investment
viewpoints and styles were correct for a short period. Overall, the markets, as
discussed below, recorded double digit gains continuing their strong advance
from 1995.
The three Funds in the Van Wagoner family had an excellent start during the
first half ending June 30, 1996. The Emerging Growth Fund rose 49.7% versus a
return of 12.6% for the Nasdaq Composite Index and significantly ahead of the
Lipper Small Company Growth Funds Index return of 14.2%. The Micro-Cap Fund rose
35.8% versus a return of 10.4% for the Russell 2000 and a 14.2% return for the
Lipper Small Company Growth Funds Index. The Mid-Cap Fund rose 36% versus a
return of 9.2% for the S&P Midcap 400 Index and substantially ahead of the
Lipper Mid-Cap Funds Index return of 12.2%.
EMERGING
GROWTH FUND
- ----------- 12/31/95 3/31/96 6/30/96
-------- ------- -------
EMERGING GROWTH FUND $10,000 $13,030 $14,970
Nasdaq $10,000 $10,468 $11,263
Lipper Small Company $10,000 $10,564 $11,422
This chart assumes an initial investment of $10,000 made on 12/31/95. Returns
shown here and in the paragraph above are based on net change in NAV.
Performance figures represent past performance which is no guarantee of future
results. The investment return and principal value of an investment in Van
Wagoner Funds will fluctuate so that an investor's shares in the Funds, when
redeemed, may be worth more or less than their original cost.
The Nasdaq Composite Index is a broad-based, unmanaged index that represents the
general performance of the stocks of smaller companies. It does not include any
commissions or fees that would be paid by an investor purchasing the securities
it represents. The Index is adjusted to reflect reinvestment of dividends.
The Lipper Small Company Growth Funds Index includes the largest 30 funds in the
group that, by prospectus or portfolio practice, limit their investments to
companies on the basis of the size of the company.
MICRO-CAP FUND
- -------------- 12/31/95 3/31/96 6/30/96
-------- ------- -------
MICRO-CAP FUND $10,000 $12,130 $13,580
Russell 2000 $10,000 $10,510 $11,036
Lipper Small Company $10,000 $10,564 $11,422
This chart assumes an initial investment of $10,000 made on 12/31/95. Returns
shown here and in the paragraph above are based on net change in NAV.
Performance figures reflect fee waivers in effect and represent past performance
which is no guarantee of future results. In the absence of fee waivers, total
return would be reduced. The investment return and principal value of an
investment in Van Wagoner Funds will fluctuate so that an investor's shares in
the Funds, when redeemed, may be worth more or less than their original cost.
The Russell 2000 is an index of the smallest 2000 companies in the Russell 3000
Index, as ranked by total market capitalization. The Russell 2000 Index is
widely regarded in the industry to accurately capture the universe of small cap
stocks.
The Lipper Small Company Growth Funds Index includes the largest 30 funds in the
group that, by prospectus or portfolio practice, limit their investments to
companies on the basis of the size of the company.
MID-CAP FUND
- ------------ 12/31/95 3/31/96 6/30/96
-------- ------- -------
MID-CAP FUND $10,000 $12,010 $13,600
S&P 400 $10,000 $10,616 $10,921
Lipper Mid-Cap $10,000 $10,655 $11,217
This chart assumes an initial investment of $10,000 made on 12/31/95. Returns
shown here and in the paragraph above are based on net change in NAV.
Performance figures reflect fee waivers in effect and represent past performance
which is no guarantee of future results. In the absence of fee waivers, total
return would be reduced. The investment return and principal value of an
investment in Van Wagoner Funds will fluctuate so that an investor's shares in
the Funds, when redeemed, may be worth more or less than their original cost.
The S&P Midcap 400 Index is a capitalization weighted index that measures the
performance of the mid-range sector of the U.S. stock market where the median
market capitalization is approximately $700 million.
The Lipper Mid-Cap Funds Index includes the largest 30 funds in the group which,
by prospectus or portfolio practice, limit their investments to companies with
average market capitalizations between $800 million and the average market
capitalization of the Wilshire 4500 Index.
The economy showed conflicting signs through most of the first six months with a
particularly slow start due to weather and a government shutdown. The period
ended with the fear the Federal Reserve would raise rates to cool an overheating
economy. Inflation worries surrounded the labor market and most market
participants were anxiously awaiting rising interest rates.
The equity markets were also quite volatile. A sharp correction rang in the New
Year, followed by a dramatic rise in most markets with speculative excesses
appearing in several key indicators. The last several weeks of the period showed
a sharp correction that was similar to the decline during the second and third
quarters of 1990.
The relative performance advantage the Funds achieved in the first half can be
attributed to maintaining our discipline of finding growing, well-managed
businesses with a unique product or service. The Funds had three sectors
overweighted during the first half of 1996. The Health Care sector was the
largest area of emphasis. We believe two important trends are emerging in health
care. Health care providers and payers see a continued need for more and better
information about health care costs - this data can be used to more effectively
manage the cost of health care and provide better quality of service. The other
force that continues unabated is the trend toward more outpatient care. As
hospitals continue to lower their costs, patients are receiving more of their
care at home. This trend produces many growth opportunities for companies to
offer products and services to the outpatient at reduced cost.
The Technology sector also represented a substantial portion of the Funds'
investments. Again, we believe two themes have been driving the performance of
the portfolios. The software industry has matured from its initial growth phase
and has entered a new era. Computer software can now help perform many tasks
traditionally done through substantial man-hours of effort. These programs allow
other software programmers to write new codes more quickly and more efficiently,
or help an engineer draw a sophisticated electronic assembly in a fraction of
the time it took several years ago. The other technology trend the portfolios
are enjoying is the data communications revolution. Whether it is Internet
traffic or just using a personal computer through any standard telephone line,
the growth in data traffic over the phone system is growing dramatically. We
have attempted to position our portfolios to benefit from this trend, sometimes
referred to as the "Information Superhighway."
The last sector that was represented in any size in the portfolios is the Energy
Services sector. After a 14-year drought, technology now is encouraging
increased drilling for oil and gas. This increased activity appears to be
sustainable and the portfolios have excellent representation in this area.
I cannot close without mentioning that there are also many "special situation"
companies in the portfolios. Although these companies are seldom as glamorous as
some of our larger holdings, they have the potential to contribute substantially
to the return.
I hope that you have been able to enjoy some of the success the Funds have had
over the first six months. Although there are many challenges facing the markets
as we enter the second half of the year, the portfolios are positioned with the
potential for strong growth.
Sincerely,
/s/Garrett R. Van Wagoner
Garrett R. Van Wagoner
President
VAN WAGONER EMERGING GROWTH FUND
SCHEDULE OF INVESTMENTS
June 30, 1996
(Unaudited)
Number
of Shares Value
--------- -----
COMMON STOCKS 95.61%
CHEMICALS 1.14%
289,400 NuCo2, Inc.<F1> $ 8,899,050
-----------
COMMERCIAL SERVICES -
MISCELLANEOUS 2.76%
317,000 CRA Managed Care, Inc.<F1> 14,185,750
121,200 Pediatrix Medical Group, Inc.<F1> 5,878,200
48,000 RTW, Inc.<F1> 1,512,000
-----------
21,575,950
-----------
COMMERCIAL SERVICES -
SECURITY/SAFETY 0.06%
74,000 Video Sentry Corp.<F1> 481,000
-----------
COMPUTERS - INTEGRATED
SYSTEMS 1.43%
45,000 Cyberguard Corp.<F1> 776,250
300,750 Wind River Systems<F1> 10,375,875
-----------
11,152,125
-----------
COMPUTERS - LOCAL
NETWORKS 14.17%
227,100 3COM Corp.<F1> 10,389,825
201,000 ACT Networks, Inc.<F1> 6,532,500
176,200 Arbor Software Corp.<F1> 10,527,950
471,900 Ascend Communications, Inc.<F1> 26,544,375
188,400 Cisco Systems, Inc.<F1> 10,668,150
261,800 FORE Systems, Inc.<F1> 9,457,525
677,100 Vanstar Corp.<F1> 11,341,425
546,750 Xylan Corp.<F1> 25,423,875
-----------
110,885,625
-----------
COMPUTERS - PERIPHERALS 5.27%
587,200 Gandalf Technologies, Inc.<F1> 4,697,600
54,650 Security Dynamics
Technologies, Inc.<F1> 4,494,962
375,000 U.S. Robotics Corp.<F1> 32,062,500
-----------
41,255,062
-----------
COMPUTERS - RETAIL/
WHOLESALE 1.15%
227,700 CHS Electronics, Inc.<F1> 3,073,950
698,300 Intelligent Electronics, Inc. 5,935,550
-----------
9,009,500
-----------
Number
of Shares Value
--------- -----
COMPUTERS - SOFTWARE 15.69%
52,500 Atria Software, Inc.<F1> $ 2,625,000
613,250 Avant! Corp.<F1> 14,258,062
67,000 Baan Co., N.V.<F1> 2,278,000
101,300 CBT Group PLC ADR<F1> 4,685,125
212,000 Cooper & Chyan Technology, Inc.<F1> 4,637,500
29,000 Cybercash, Inc.<F1> 1,587,750
205,000 Datalogix International, Inc.<F1> 1,486,250
175,000 Forte Software, Inc.<F1> 9,143,750
51,600 HNC Software, Inc.<F1> 2,386,500
289,522 Integrated Systems, Inc.<F1> 11,598,975
252,787 McAfee Associates, Inc.<F1> 12,386,563
533,300 Meta-Software, Inc.<F1> 9,199,425
186,100 Netscape Communications Corp.<F1> 11,584,725
80,000 Objective Systems Integrators, Inc.<F1> 2,920,000
211,400 OrCAD, Inc.<F1> 2,959,600
117,000 Prism Solutions, Inc.<F1> 2,749,500
334,900 Pure Software, Inc.<F1> 11,386,600
11,400 Remedy Corp.<F1> 832,200
96,800 SQA, Inc.<F1> 2,710,400
11,550 Scopus Technology, Inc.<F1> 179,025
151,500 Sterling Commerce, Inc.<F1> 5,624,438
79,000 Verity, Inc.<F1> 2,271,250
131,500 Workgroup Technology Corp.<F1> 3,303,937
-----------
122,794,575
-----------
ELECTRONICS - SCIENTIFIC
INSTRUMENTS 0.69%
166,800 Input/Output, Inc.<F1> 5,400,150
-----------
ENERGY - SERVICES 2.75%
174,000 ENSCO International, Inc.<F1> 5,655,000
42,000 Energy Ventures, Inc.<F1> 1,365,000
339,600 Nabors Industries, Inc.<F1> 5,518,500
247,600 Rowan Cos., Inc.<F1> 3,652,100
178,700 Weatherford Enterra, Inc.<F1> 5,361,000
-----------
21,551,600
-----------
FINANCIAL SERVICES 1.75%
345,200 Medaphis Corp.<F1> 13,721,700
-----------
HOTEL/MOTEL 0.49%
55,000 HFS, Inc.<F1> 3,850,000
-----------
VAN WAGONER EMERGING GROWTH FUND
SCHEDULE OF INVESTMENTS (cont'd.)
Number
of Shares Value
--------- -----
INSURANCE 0.27%
117,000 RISCORP, Inc.<F1> $ 2,135,250
-----------
MACHINERY - MINING/
CONSTRUCTION 0.75%
78,700 JLG Industries, Inc. 5,843,475
-----------
MEDICAL - BIOMEDICAL/
GENETICS 0.39%
32,500 Celgene Corp.<F1> 373,750
134,200 SEQUUS Pharmaceuticals, Inc.<F1> 2,669,322
-----------
3,043,072
-----------
MEDICAL - INFORMATION
SERVICES 8.49%
29,100 CyCare Systems, Inc.<F1> 1,516,837
267,550 Enterprise Systems, Inc.<F1> 7,357,625
108,000 HBO & Co. 7,317,000
150,700 HCIA, Inc.<F1> 9,494,100
434,500 HPR, Inc.<F1> 9,233,125
159,000 Mecon, Inc.<F1> 3,597,375
157,800 Oacis Healthcare Holding Corp.<F1> 1,814,700
565,100 Summit Medical Systems, Inc.<F1> 11,019,450
528,000 Transition Systems, Inc.<F1> 15,048,000
-----------
66,398,212
-----------
MEDICAL - INSTRUMENTS 3.58%
343,100 Heartport, Inc.<F1> 10,378,775
78,200 Hologic, Inc.<F1> 3,460,350
195,000 IRIDEX Corp.<F1> 2,925,000
219,500 Sofamor Danek Group, Inc.<F1> 6,091,125
297,000 Vitalcom, Inc.<F1> 5,123,250
-----------
27,978,500
-----------
MEDICAL - NURSING HOMES 0.24%
69,800 Arbor Health Care Co.<F1> 1,902,050
-----------
MEDICAL - OUTPATIENT/
HOME 9.29%
61,800 American HomePatient, Inc.<F1> 2,734,650
385,100 Apria Healthcare Group, Inc.<F1> 12,082,513
336,150 Genesis Health Ventures, Inc.<F1> 10,546,706
61,200 OccuSystems, Inc.<F1> 2,287,350
148,800 Pediatric Services of America, Inc.<F1> 3,385,200
Number
of Shares Value
--------- -----
MEDICAL - OUTPATIENT/
HOME 9.29% (cont'd.)
421,700 Renal Treatment Centers, Inc.<F1> $12,123,875
390,311 TheraTx, Inc.<F1> 7,415,909
278,250 Total Renal Care Holdings, Inc.<F1> 11,756,062
316,000 Vivra, Inc.<F1> 10,388,500
-----------
72,720,765
-----------
MEDICAL - PRODUCTS 4.59%
213,200 ATS Medical, Inc.<F1> 2,158,650
303,500 Aksys, Ltd.<F1> 4,628,375
272,200 Angeion Corp.<F1> 2,109,550
146,100 CardioGenesis Corp.<F1> 1,972,350
63,000 Cytyc Corp.<F1> 1,630,125
228,500 Endosonics Corp.<F1> 4,084,438
94,500 Parexel International Corp.<F1> 4,559,625
137,300 Pharmaceutical Product
Development, Inc.<F1> 4,599,550
154,500 Quintiles Transnational Corp.<F1> 10,158,375
-----------
35,901,038
-----------
MEDICAL - SUPPLIES 3.56%
196,000 Gulf South Medical Supply, Inc.<F1> 7,644,000
420,000 Omnicare, Inc. 11,130,000
374,900 Physician Sales & Service, Inc.<F1> 9,091,325
-----------
27,865,325
-----------
MEDICAL - WHOLESALE/DRUG 3.03%
470,950 AmeriSource Health Corp.,
Class A<F1> 15,659,088
103,000 Express Scripts, Inc., Class A<F1> 4,738,000
110,400 NCS HealthCare, Inc.<F1> 3,339,600
-----------
23,736,688
-----------
OIL & GAS 4.91%
141,500 Coflexip SA ADR 2,458,563
98,000 Diamond Offshore Drilling, Inc.<F1> 5,610,500
209,100 Digicon, Inc.<F1> 3,502,425
398,000 Global Marine, Inc.<F1> 5,522,250
115,000 Petroleum Geo-Services A/S ADR<F1> 3,263,125
40,000 Smith International, Inc.<F1> 1,205,000
177,500 Sonat Offshore Drilling Co. 8,963,750
180,000 Tidewater, Inc. 7,897,500
-----------
38,423,113
-----------
VAN WAGONER EMERGING GROWTH FUND
SCHEDULE OF INVESTMENTS (cont'd.)
Number
of Shares Value
--------- -----
RETAIL/WHOLESALE -
JEWELRY 0.98%
276,500 Claire's Stores, Inc. $ 7,638,312
-----------
RETAIL/WHOLESALE -
OFFICE SUPPLIES 3.59%
225,900 Corporate Express, Inc.<F1> 9,036,000
453,500 U.S. Office Products Co.<F1> 19,047,000
-----------
28,083,000
-----------
TELECOMMUNICATIONS -
EQUIPMENT 4.34%
291,600 Cascade Communications Corp.<F1> 19,828,800
36,100 Pairgain Technologies, Inc.<F1> 2,238,200
125,000 Stratacom, Inc.<F1> 7,031,250
340,700 Sync Research, Inc.<F1> 4,854,975
-----------
33,953,225
-----------
TELECOMMUNICATIONS -
SERVICES 0.25%
153,050 Computer Telephone Corp.<F1> 1,989,650
-----------
Total Common Stocks
(cost $699,773,679) 748,188,012
-----------
WARRANTS 0.02%
196,000 ATS Medical, Inc. -
expires 3/2/97<F1> 147,000
-----------
Total Warrants
(cost $260,827) 147,000
-----------
Principal
Amount Value
--------- ------
REPURCHASE AGREEMENTS 3.70%
$28,930,000 UMB Bank, n.a., 4.80%, dated
6/28/96, repurchase price
$28,941,413, maturing 7/1/96
(collateralized by U.S. Treasury
Notes, 6.125%, 5/31/97) $ 28,930,000
-----------
Total Repurchase Agreements
(cost $28,930,000) 28,930,000
-----------
Total Investments 99.33%
(cost $728,964,506) 777,265,012
Cash and Other Assets less
Liabilities 0.67% 5,263,778
-----------
NET ASSETS 100.00% $782,528,790
===========
<F1> Non-income producing
See notes to financial statements.
VAN WAGONER MICRO-CAP FUND
SCHEDULE OF INVESTMENTS
June 30, 1996
(Unaudited)
Number
of Shares Value
--------- -----
COMMON STOCKS 74.21%
APPAREL/SHOES 0.11%
1,000 Designer Holdings Ltd.<F2> $ 26,625
5,800 Loehmann's Holdings, Inc.<F2> 133,400
-----------
160,025
-----------
BUILDINGS 0.41%
17,000 NCI Building Systems, Inc.<F2> 573,750
-----------
CHEMICALS 2.17%
98,600 NuCo2, Inc.<F2> 3,031,950
-----------
COMMERCIAL SERVICES -
MISCELLANEOUS 2.83%
50,500 CRA Managed Care, Inc.<F2> 2,259,875
27,800 ClinTrials Research, Inc.<F2> 1,153,700
17,200 RTW, Inc.<F2> 541,800
-----------
3,955,375
-----------
COMPUTERS - INTEGRATED
SYSTEMS 0.75%
800 Cyberguard Corp.<F2> 13,800
30,000 Wind River Systems<F2> 1,035,000
-----------
1,048,800
-----------
COMPUTERS - LOCAL
NETWORKS 3.23%
74,300 ACT Networks, Inc.<F2> 2,414,750
125,000 Vanstar Corp.<F2> 2,093,750
-----------
4,508,500
-----------
COMPUTERS - PERIPHERALS 1.19%
75,800 3D Systems Corp.<F2> 1,667,600
-----------
COMPUTERS - RETAIL/
WHOLESALE 2.18%
125,000 CHS Electronics, Inc.<F2> 1,687,500
159,900 Intelligent Electronics, Inc. 1,359,150
-----------
3,046,650
-----------
Number
of Shares Value
--------- -----
COMPUTERS - SOFTWARE 14.78%
147,000 ANSYS, Inc.<F2> $ 1,929,375
1,200 Aspect Development, Inc.<F2> 30,600
91,400 Avant! Corp.<F2> 2,125,050
31,450 Cooper & Chyan Technology, Inc.<F2> 687,969
18,400 Cybercash, Inc.<F2> 1,007,400
35,000 Datalogix International, Inc.<F2> 253,750
63,600 Datastream Systems, Inc.<F2> 2,241,900
1,000 Edify Corp.<F2> 26,500
179,750 Mechanical Dynamics, Inc.<F2> 2,718,719
105,000 Meta-Software, Inc.<F2> 1,811,250
56,000 ON Technology Corp.<F2> 574,000
15,000 Open Market, Inc.<F2> 365,625
128,000 OrCAD, Inc.<F2> 1,792,000
15,000 Prism Solutions, Inc.<F2> 352,500
71,100 SQA, Inc.<F2> 1,990,800
20,600 Scopus Technology, Inc.<F2> 319,300
64,000 Verity, Inc.<F2> 1,840,000
23,200 Workgroup Technology Corp.<F2> 582,900
-----------
20,649,638
-----------
CONSUMER PRODUCTS -
MISCELLANEOUS 0.53%
43,000 Koala Corp.<F2> 736,375
-----------
ELECTRICAL - CONNECTORS 0.77%
51,900 Sheldahl, Inc.<F2> 1,083,413
-----------
ELECTRONICS 0.03%
5,000 Affinity Technology Group<F2> 42,500
-----------
ELECTRONICS - SEMICONDUCTOR
MANUFACTURERS 0.62%
99,000 ELEXSYS International, Inc.<F2> 866,250
-----------
ENERGY - SERVICES 1.43%
26,700 Energy Ventures, Inc.<F2> 867,750
111,400 Marine Drilling Co., Inc.<F2> 1,127,925
-----------
1,995,675
-----------
HARDWARE 1.46%
67,700 Orchard Supply Hardware
Stores Corp.<F2> 2,039,463
-----------
VAN WAGONER MICRO-CAP FUND
SCHEDULE OF INVESTMENTS (cont'd.)
Number
of Shares Value
--------- -----
HOTEL/MOTEL 0.08%
5,000 Suburban Lodges of
America, Inc.<F2> $ 115,625
-----------
INFORMATION SERVICES 0.09%
3,500 Data Processing Resources Corp.<F2> 96,687
1,000 IntelliQuest Information
Group, Inc.<F2> 32,750
-----------
129,437
-----------
INSURANCE 1.09%
83,300 RISCORP, Inc.<F2> 1,520,225
-----------
MEDICAL - BIOMEDICAL/
GENETICS 2.77%
113,000 Cardiac Pathways Corp.<F2> 1,638,500
113,000 Cardiovascular Dynamics, Inc.<F2> 1,384,250
3,800 Millennium Pharmaceuticals, Inc.<F2> 58,900
40,000 SEQUUS Pharmaceuticals, Inc.<F2> 795,625
-----------
3,877,275
-----------
MEDICAL - INFORMATION
SERVICES 10.50%
16,200 Amisys Managed Care Systems<F2> 417,150
45,000 CyCare Systems, Inc.<F2> 2,345,625
60,050 Enterprise Systems, Inc.<F2> 1,651,375
97,900 HPR, Inc.<F2> 2,080,375
93,000 Mecon, Inc.<F2> 2,104,125
139,800 Oacis Healthcare Holding Corp.<F2> 1,607,700
96,100 Summit Medical Systems, Inc.<F2> 1,873,950
1,000 The Registry, Inc.<F2> 29,250
89,800 Transition Systems, Inc.<F2> 2,559,300
-----------
14,668,850
-----------
MEDICAL - INSTRUMENTS 2.93%
43,300 ArthroCare Corp.<F2> 779,400
15,000 Heartport, Inc.<F2> 453,750
20,200 Hologic, Inc.<F2> 893,850
46,000 IRIDEX Corp.<F2> 690,000
73,700 Vitalcom, Inc.<F2> 1,271,325
-----------
4,088,325
-----------
MEDICAL - NURSING HOMES 1.47%
75,500 Arbor Health Care Co.<F2> 2,057,375
-----------
Number
of Shares Value
--------- -----
MEDICAL - OUTPATIENT/
HOME 4.53%
40,100 American HomePatient, Inc.<F2> $ 1,774,425
17,100 OccuSystems, Inc.<F2> 639,112
48,900 Pediatric Services of America, Inc.<F2> 1,112,475
28,000 Renal Care Group, Inc.<F2> 903,000
100,000 TheraTx, Inc.<F2> 1,900,000
-----------
6,329,012
-----------
MEDICAL - PRODUCTS 9.48%
101,650 ATS Medical, Inc.<F2> 1,029,206
164,000 Aksys, Ltd.<F2> 2,501,000
138,500 Angeion Corp.<F2> 1,073,375
12,500 Biopsys Medical, Inc.<F2> 250,000
107,000 CardioGenesis Corp.<F2> 1,444,500
17,000 Cytyc Corp.<F2> 439,875
97,400 Endosonics Corp.<F2> 1,741,025
46,700 Parexel International Corp.<F2> 2,253,275
75,000 Pharmaceutical Product
Development, Inc.<F2> 2,512,500
-----------
13,244,756
-----------
MEDICAL - SUPPLIES 0.03%
1,000 Gulf South Medical Supply, Inc.<F2> 39,000
-----------
MEDICAL - WHOLESALE/DRUG 1.68%
71,000 NCS HealthCare, Inc.<F2> 2,147,750
5,100 Schein (Henry), Inc.<F2> 195,075
-----------
2,342,825
-----------
OIL & GAS 2.45%
105,000 Coflexip SA ADR 1,824,375
34,700 Digicon, Inc.<F2> 581,225
41,600 Rutherford-Moran Oil Corp.<F2> 1,014,000
-----------
3,419,600
-----------
PHARMACEUTICALS 1.36%
200,000 NABI, Inc.<F2> 1,900,000
-----------
RETAIL - HOME
FURNISHINGS 0.02%
1,000 Cost Plus, Inc.<F2> 27,750
-----------
VAN WAGONER MICRO-CAP FUND
SCHEDULE OF INVESTMENTS (cont'd.)
Number
of Shares Value
--------- -----
RETAIL - PERSONAL CARE 0.35%
22,000 Garden Botanika, Inc.<F2> $ 484,000
-----------
RETAIL/WHOLESALE -
OFFICE SUPPLIES 0.01%
500 U.S. Office Products Co.<F2> 21,000
-----------
TELECOMMUNICATIONS -
EQUIPMENT 0.85%
22,600 Galileo Electro-Optics Corp.<F2> 542,400
45,000 Sync Research, Inc.<F2> 641,250
-----------
1,183,650
-----------
TELECOMMUNICATIONS -
SERVICES 1.79%
99,500 Computer Telephone Corp.<F2> 1,293,500
100,000 MobileMedia Corp.<F2> 1,212,500
-----------
2,506,000
-----------
TRANSPORTATION 0.24%
15,000 Trico Marine Services, Inc.<F2> 333,750
-----------
Total Common Stocks
(cost $100,346,676) 103,694,419
-----------
WARRANTS 0.03%
60,500 ATS Medical, Inc. -
expires 3/2/97<F2> 45,375
-----------
Total Warrants
(cost $88,099) 45,375
-----------
Principal
Amount Value
--------- ------
U.S. TREASURY BILLS 13.95%
$19,500,000 U.S. Treasury Bill, 7/5/96 $ 19,495,667
-----------
Total U.S. Treasury Bills
(cost $19,495,667) 19,495,667
-----------
REPURCHASE AGREEMENTS 14.47%
20,217,000 UMB Bank, n.a., 4.80%, dated
6/28/96, repurchase price
$20,224,976, maturing
7/1/96 (collateralized by
U.S. Treasury Notes,
5.375%, 5/31/98) 20,217,000
-----------
Total Repurchase Agreements
(cost $20,217,000) 20,217,000
-----------
Total Investments 102.66%
(cost $140,147,442) 143,452,461
Liabilities less Other
Assets (2.66)% (3,712,804)
-----------
NET ASSETS 100.00% $139,739,657
===========
<F2> Non-income producing
See notes to financial statements.
VAN WAGONER MID-CAP FUND
SCHEDULE OF INVESTMENTS
June 30, 1996
(Unaudited)
Number
of Shares Value
--------- -----
COMMON STOCKS 79.25%
COMMERCIAL SERVICES -
MISCELLANEOUS 1.45%
27,900 Pediatrix Medical Group, Inc.<F3> $ 1,353,150
-----------
COMPUTERS - LOCAL
NETWORKS 11.56%
40,000 3COM Corp.<F3> 1,830,000
20,300 Arbor Software Corp.<F3> 1,212,925
53,500 Ascend Communications, Inc.<F3> 3,009,375
15,000 Cisco Systems, Inc.<F3> 849,375
30,800 FORE Systems, Inc.<F3> 1,112,650
59,700 Xylan Corp.<F3> 2,776,050
-----------
10,790,375
-----------
COMPUTERS - PERIPHERALS 4.72%
124,400 Gandalf Technologies, Inc.<F3> 995,200
5,100 Security Dynamics
Technologies, Inc.<F3> 419,475
35,000 U.S. Robotics Corp.<F3> 2,992,500
-----------
4,407,175
-----------
COMPUTERS - SOFTWARE 13.15%
12,900 Atria Software, Inc.<F3> 645,000
28,000 Baan Co., N.V.<F3> 952,000
24,000 CBT Group PLC ADR<F3> 1,110,000
1,900 Citrix Systems, Inc.<F3> 72,200
25,000 Forte Software, Inc.<F3> 1,306,250
18,000 HNC Software, Inc.<F3> 832,500
34,000 Integrated Systems, Inc.<F3> 1,362,125
27,000 McAfee Associates, Inc.<F3> 1,323,000
23,500 Netscape Communications Corp.<F3> 1,462,875
40,050 Pure Software, Inc.<F3> 1,361,700
13,000 Remedy Corp.<F3> 949,000
4,000 Scopus Technology, Inc.<F3> 62,000
50 Spyglass, Inc.<F3> 1,072
22,500 Sterling Commerce, Inc.<F3> 835,312
-----------
12,275,034
-----------
ELECTRONICS - SCIENTIFIC
INSTRUMENTS 0.77%
22,300 Input/Output, Inc.<F3> 721,963
-----------
Number
of Shares Value
--------- -----
ENERGY - SERVICES 3.46%
30,000 ENSCO International, Inc.<F3> $ 975,000
65,200 Nabors Industries, Inc.<F3> 1,059,500
45,300 Rowan Cos., Inc.<F3> 668,175
17,600 Weatherford Enterra, Inc.<F3> 528,000
-----------
3,230,675
-----------
FINANCIAL SERVICES 2.13%
50,000 Medaphis Corp.<F3> 1,987,500
-----------
HOTEL/MOTEL 1.50%
20,000 HFS, Inc.<F3> 1,400,000
-----------
MACHINERY - MINING/
CONSTRUCTION 1.18%
14,850 JLG Industries, Inc. 1,102,613
-----------
MEDICAL - BIOMEDICAL/
GENETICS 0.11%
5,000 SEQUUS Pharmaceuticals, Inc.<F3> 99,453
-----------
MEDICAL - INFORMATION
SERVICES 1.54%
2,000 HBO & Co. 135,500
17,000 HCIA, Inc.<F3> 1,071,000
6,000 IDX Systems Corp.<F3> 234,000
-----------
1,440,500
-----------
MEDICAL - INSTRUMENTS 2.48%
39,700 Heartport, Inc.<F3> 1,200,925
40,200 Sofamor Danek Group, Inc.<F3> 1,115,550
-----------
2,316,475
-----------
MEDICAL - OUTPATIENT/
HOME 11.06%
47,200 Apria Healthcare Group, Inc.<F3> 1,480,900
36,150 Genesis Health Ventures, Inc.<F3> 1,134,206
6,000 Lincare Holdings, Inc.<F3> 235,500
30,000 OccuSystems, Inc.<F3> 1,121,250
48,200 Renal Treatment Centers, Inc.<F3> 1,385,750
24,300 RoTech Medical Corp.<F3> 473,850
75,300 Total Renal Care Holdings, Inc.<F3> 3,181,425
40,000 Vivra, Inc.<F3> 1,315,000
-----------
10,327,881
-----------
MEDICAL - PRODUCTS 1.41%
20,000 Quintiles Transnational Corp.<F3> 1,315,000
-----------
VAN WAGONER MID-CAP FUND
SCHEDULE OF INVESTMENTS (cont'd.)
Number
of Shares Value
--------- -----
MEDICAL - SUPPLIES 5.00%
38,000 Gulf South Medical Supply, Inc.<F3> $ 1,482,000
66,300 Omnicare, Inc. 1,756,950
59,000 Physician Sales & Service, Inc.<F3> 1,430,750
-----------
4,669,700
-----------
MEDICAL - WHOLESALE/DRUG 3.37%
56,600 AmeriSource Health Corp.,
Class A<F3> 1,881,950
27,500 Express Scripts, Inc., Class A<F3> 1,265,000
-----------
3,146,950
-----------
OIL & GAS 6.41%
24,000 Diamond Offshore Drilling, Inc.<F3> 1,374,000
60,000 Global Marine, Inc.<F3> 832,500
15,000 Petroleum Geo-Services A/S ADR<F3> 425,625
27,500 Smith International, Inc.<F3> 828,437
25,000 Sonat Offshore Drilling Co. 1,262,500
28,700 Tidewater, Inc. 1,259,213
-----------
5,982,275
-----------
RETAIL - DEPARTMENT STORES 0.18%
5,000 Saks Holdings, Inc.<F3> 170,625
-----------
RETAIL/WHOLESALE - JEWELRY 1.48%
50,000 Claire's Stores, Inc. 1,381,250
-----------
RETAIL/WHOLESALE - OFFICE
SUPPLIES 3.09%
30,000 Corporate Express, Inc.<F3> 1,200,000
40,000 U.S. Office Products Co.<F3> 1,680,000
-----------
2,880,000
-----------
TELECOMMUNICATIONS -
EQUIPMENT 3.20%
30,800 Cascade Communications Corp.<F3> 2,094,400
4,300 Pairgain Technologies, Inc.<F3> 266,600
9,000 Stratacom, Inc.<F3> 506,250
3,000 Westell Technologies, Inc.<F3> 117,750
-----------
2,985,000
-----------
Total Common Stocks
(cost $69,961,431) 73,983,594
-----------
Principal
Amount Value
--------- ------
U.S. TREASURY BILLS 6.96%
$ 6,500,000 U.S. Treasury Bill, 7/5/96 $ 6,498,555
-----------
Total U.S. Treasury Bills
(cost $6,498,555) 6,498,555
-----------
REPURCHASE AGREEMENTS 14.16%
13,222,000 UMB Bank, n.a., 4.80%, dated
6/28/96, repurchase price
$13,227,217, maturing 7/1/96
(collateralized by U.S. Treasury
Notes, 5.375%, 5/31/98) 13,222,000
-----------
Total Repurchase Agreements
(cost $13,222,000) 13,222,000
-----------
Total Investments 100.37%
(cost $89,681,986) 93,704,149
Liabilities less Cash and Other
Assets (0.37)% (343,469)
-----------
NET ASSETS 100.00% $ 93,360,680
===========
<F3> Non-income producing
See notes to financial statements.
VAN WAGONER FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
June 30, 1996
(Unaudited)
EMERGING MICRO-CAP MID-CAP
GROWTH FUND FUND FUND
----------- --------- -------
ASSETS:
Investments, at value (cost
$700,034,506, $119,930,442
and $76,459,986, respectively) $748,335,012 $123,235,461 $80,482,149
Repurchase agreements, at
value (cost $28,930,000,
$20,217,000 and $13,222,000,
respectively) 28,930,000 20,217,000 13,222,000
Receivable for investments sold 14,550,073 84,318 366,525
Organizational expenses, net
of accumulated amortization 33,204 33,204 33,204
Receivable from investment adviser - 144,624 82,884
Interest and dividends receivable 17,470 13,667 7,935
Cash 126,206 - 5,385
Prepaid expenses and other assets 107,618 43,376 33,187
----------- ----------- -----------
Total Assets 792,099,583 143,771,650 94,233,269
----------- ----------- -----------
LIABILITIES:
Payable for investments purchased 8,466,685 3,704,935 659,430
Accrued investment advisory fee 851,643 252,335 111,941
Accrued distribution fee 86,493 16,115 10,313
Accrued expenses and other
liabilities 165,972 58,608 90,905
----------- ----------- -----------
Total Liabilities 9,570,793 4,031,993 872,589
----------- ----------- -----------
NET ASSETS $782,528,790 $139,739,657 $93,360,680
=========== =========== ===========
NET ASSETS CONSIST OF:
Capital stock 5,228 1,029 687
Paid-in-capital 742,691,540 135,801,788 90,283,773
Undistributed net investment
income -- 69,206 --
Accumulated net realized
gain (loss) on investments (8,468,484) 562,615 (945,943)
Net unrealized appreciation on
investments 48,300,506 3,305,019 4,022,163
----------- ----------- -----------
Net Assets $782,528,790 $139,739,657 $93,360,680
=========== =========== ===========
CAPITAL STOCK, $0.0001 par value
Authorized 100,000,000 100,000,000 100,000,000
Issued and outstanding 52,282,682 10,293,606 6,865,943
NET ASSET VALUE, REDEMPTION PRICE,
AND OFFERING PRICE PER SHARE
(NET ASSETS/SHARES OUTSTANDING) $14.97 $13.58 $13.60
====== ====== ======
See notes to financial statements.
VAN WAGONER FUNDS
STATEMENTS OF OPERATIONS
Six Months Ended June 30, 1996
(Unaudited)
EMERGING MICRO-CAP MID-CAP
GROWTH FUND FUND FUND
----------- --------- -------
INVESTMENT INCOME:
Interest $ 1,674,202 $ 540,129 $ 265,504
Dividends 37,933 135 5,499
----------- ----------- -----------
Total Investment Income 1,712,135 540,264 271,003
----------- ----------- -----------
EXPENSES:
Investment advisory fees 2,040,230 365,060 173,217
12b-1 fees 408,046 60,843 43,304
Transfer agent fees and expenses 265,928 77,831 95,385
Federal and state registration fees 141,175 41,393 49,004
Fund accounting and administration
fees 115,395 42,590 30,665
Printing and postage expenses 40,160 6,412 4,589
Custody fees 14,700 7,087 6,141
Professional fees 9,029 9,029 9,029
Amortization of organization costs 3,520 3,520 3,520
Directors' fees and expenses 2,083 2,083 2,083
Miscellaneous 7,989 3,354 2,851
----------- ----------- -----------
Total expenses before waiver 3,048,255 619,202 419,788
Less: Waiver of expenses -- (144,624) (82,016)
----------- ----------- -----------
Net Expenses 3,048,255 474,578 337,772
----------- ----------- -----------
NET INVESTMENT INCOME (LOSS) (1,336,120) 65,686 (66,769)
----------- ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on
investments (8,468,484) 562,615 (945,943)
Change in unrealized appreciation
on investments 48,300,506 3,305,019 4,022,163
----------- ----------- -----------
Net Gain on Investments 39,832,022 3,867,634 3,076,220
----------- ----------- -----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $38,495,902 $ 3,933,320 $ 3,009,451
=========== =========== ===========
See notes to financial statements.
VAN WAGONER FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
Six Months Ended June 30, 1996
(Unaudited)
EMERGING MICRO-CAP MID-CAP
GROWTH FUND FUND FUND
----------- --------- -------
OPERATIONS:
Net investment income (loss) $ (1,336,120) $ 65,686 $ (66,769)
Net realized gain (loss)
on investments (8,468,484) 562,615 (945,943)
Change in unrealized appreciation
on investments 48,300,506 3,305,019 4,022,163
----------- ----------- -----------
Net increase in net assets
resulting from operations 38,495,902 3,933,320 3,009,451
----------- ----------- -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of shares 951,590,685 159,995,437 117,107,749
Redemption of shares (207,591,131) (24,222,433) (26,789,853)
----------- ----------- -----------
Net increase from share
transactions 743,999,554 135,773,004 90,317,896
----------- ----------- -----------
TOTAL INCREASE IN NET ASSETS 782,495,456 139,706,324 93,327,347
NET ASSETS:
Beginning of period 33,334 33,333 33,333
----------- ----------- -----------
End of period (including
undistributed net investment
income of $0, $69,206 and $0,
respectively) $782,528,790 $139,739,657 $93,360,680
=========== =========== ===========
TRANSACTIONS IN SHARES:
Shares sold 66,245,553 12,055,117 8,851,868
Shares redeemed (13,966,204) (1,764,844) (1,989,258)
----------- ----------- -----------
Net increase 52,279,349 10,290,273 6,862,610
=========== =========== ===========
See notes to financial statements.
VAN WAGONER FUNDS
FINANCIAL HIGHLIGHTS
Six Months Ended June 30, 1996
(Unaudited)
EMERGING MICRO-CAP MID-CAP
GROWTH FUND<F4> FUND<F4> FUND<F4>
----------- --------- -------
Net Asset Value, Beginning
of Period $10.00 $10.00 $10.00
INCOME (LOSS) FROM
INVESTMENT OPERATIONS:
Net investment income (loss) (0.03) 0.01 (0.01)
Net realized and unrealized
gains on investments 5.00 3.57 3.61
------ ------ ------
Total from investment operations 4.97 3.58 3.60
------ ------ ------
Net Asset Value, End of Period $14.97 $13.58 $13.60
====== ====== ======
Total Return<F5> 49.70% 35.80% 36.00%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period (000s) $782,529 $139,740 $93,361
Ratio of net expenses to average
net assets<F6><F7> 1.87% 1.95% 1.95%
Ratio of net investment
income (loss) to average
net assets<F6><F7> (0.82)% 0.27% (0.39)%
Portfolio turnover rate 34% 27% 53%
Average commission rate paid
on portfolio investment
transactions $0.0578 $0.0550 $0.0572
<F4> Commenced operations on December 31, 1995
<F5> Not annualized
<F6> Annualized
<F7> Without fees waived, the ratio of net expenses to average net assets
would have been 2.54% for the Micro-Cap Fund and 2.42% for the Mid-Cap
Fund. The ratio of net investment income (loss) to average net assets
would have been (0.32)% for the Micro-Cap Fund and (0.86)% for the Mid-
Cap Fund. The annual expense ratio of each Fund is capped at 1.95%
through January 1, 1997.
See notes to financial statements.
VAN WAGONER FUNDS
NOTES TO FINANCIAL STATEMENTS
June 30, 1996
(Unaudited)
1. ORGANIZATION
Van Wagoner Funds, Inc. (the "Company") was organized on October 18, 1995
as a Maryland corporation and is registered under the Investment Company
Act of 1940 (the "1940 Act") as an open-end management investment
company. The Emerging Growth Fund, Micro-Cap Fund and Mid-Cap Fund
(collectively "the Funds") are separate, diversified investment
portfolios of Van Wagoner Funds, Inc.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. The
financial statements have been prepared in accordance with generally
accepted accounting principles ("GAAP") which permit management to make
certain estimates and assumptions at the date of the financial statements.
(a) INVESTMENT VALUATION - A security traded on a recognized stock exchange
is valued at the last sale price. If no sale is reported, the most current
bid price will be used. All other securities for which over-the-counter
market quotations are readily available are valued at the most current
closing price. Debt securities which will mature in more than 60 days are
valued at prices furnished by a pricing service. Securities which will
mature in 60 days or less are valued at amortized cost, which approximates
market value. Any securities for which market quotations are not readily
available are valued at their fair value as determined in good faith by the
Fund's investment adviser under the supervision of the Board of Directors.
(b) REPURCHASE AGREEMENTS - During the term of a repurchase agreement, the
market value of the underlying collateral, including accrued interest, is
required to equal or exceed the market value of the repurchase agreement.
The underlying collateral for all repurchase agreements is held by the
Funds' custodian.
NOTES TO FINANCIAL STATEMENTS (cont'd.)
(c) ORGANIZATION COSTS - Costs incurred by the Funds in connection with
their organization, registration and the initial public offering of shares
have been deferred and will be amortized over the period of benefit, but
not to exceed five years. If any of the original shares of a Fund are
redeemed by any holder thereof prior to the end of the amortization period,
the redemption proceeds will be reduced by the pro rata share of the
unamortized expenses as of the date of redemption. The pro rata share by
which the proceeds are reduced will be derived by dividing the number of
original shares of the Funds being redeemed by the total number of original
shares outstanding at the time of redemption.
(d) EXPENSES - The Funds are charged for those expenses that are directly
attributable to each portfolio, such as advisory and custodian fees.
Expenses that are not directly attributable to a portfolio are typically
allocated among the portfolios in proportion to their respective net
assets.
(e) FEDERAL INCOME TAXES - Each Fund intends to comply with the requirements
of the Internal Revenue Code necessary to qualify as a regulated investment
company and to make the requisite distributions of income to its
shareholders which will be sufficient to relieve it from all or
substantially all federal income taxes.
(f) DISTRIBUTIONS TO SHAREHOLDERS - Dividends from net investment income and
net realized capital gains, if any, will be declared and paid at least
annually. Distributions to shareholders are recorded on the ex-dividend
date. The Fund may periodically make reclassifications among certain of its
capital accounts as a result of the timing and characterization of certain
income and capital gains distributions determined in accordance with
federal tax regulations, which may differ from GAAP.
(g) OTHER - Investment transactions are accounted for on the trade date plus
one. Each Fund determines the gain or loss realized from the investment
transactions by comparing the original cost of the security lot sold with
the net sale proceeds. Dividend income is recognized on the ex-dividend
date and interest income is recognized on an accrual basis.
NOTES TO FINANCIAL STATEMENTS (cont'd.)
3. INVESTMENT ADVISORY AGREEMENT
The Funds have an agreement with Van Wagoner Capital Management, Inc. (the
"Adviser") to furnish investment advisory services to the Funds. Under
the terms of this agreement, the Adviser is compensated at the following
percentage of average daily net assets for each Fund: 1.25% for the
Emerging Growth Fund, 1.50% for the Micro-Cap Fund and 1.00% for the Mid-
Cap Fund. The Adviser has agreed to voluntarily reduce fees for expenses
(exclusive of brokerage, interest, taxes and extraordinary expenses) that
exceed the expense limitation of 1.95% for each Fund until January 1, 1997.
Expenses of $144,624 and $82,016 were waived in the Micro-Cap and Mid-Cap
Funds, respectively.
4. SERVICE AND DISTRIBUTION PLAN
The Funds have adopted a Service and Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the 1940 Act. The Plan authorizes payments by
the Funds in connection with the distribution of their shares at an annual
rate, as determined from time to time by the Board of Directors, of up to
0.25% of a Fund's average daily net assets.
5. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of securities, excluding short-term
investments, for the Funds for the six months ended June 30, 1996 were as
follows:
EMERGING MICRO-CAP MID-CAP
GROWTH FUND FUND FUND
----------- --------- ---------
Purchases $822,181,045 $109,542,184 $87,073,782
Sales 113,678,055 9,670,024 16,166,408
For the six months ended June 30, 1996, there were no purchases or sales of
long-term U.S. Government securities.
NOTES TO FINANCIAL STATEMENTS (cont'd.)
The cost of securities for the Emerging Growth Fund, Micro-Cap Fund and
Mid-Cap Fund is $732,515,236, $140,260,117 and $89,812,559, respectively.
At June 30, 1996, gross unrealized appreciation and depreciation on
investments for federal income tax purposes were as follows:
EMERGING MICRO-CAP MID-CAP
GROWTH FUND FUND FUND
----------- --------- ---------
Unrealized appreciation $84,812,101 $9,379,210 $7,427,734
(Unrealized depreciation) (40,062,325) (6,186,866) (3,536,144)
----------- ---------- ----------
Net unrealized appreciation
on investments $44,749,776 $3,192,344 $3,891,590
=========== ========== ==========
6. TRANSACTIONS WITH AFFILIATED COMPANIES
An affiliated company is a company in which a Fund has ownership of at
least 5% of the voting securities. Companies which are affiliates of the
Emerging Growth Fund are as follows:
SHARES HELD DIVIDEND
SECURITY NAME 6/30/96 INCOME
------------- ---------- -------
Iridex Corp. 195,000 -
Meta-Software, Inc. 533,300 -
Summit Medical Systems, Inc. 565,100 -
