<PAGE> 1
1
November 15, 2000
DEAR FELLOW SHAREHOLDERS:
The market experienced a dramatic rise from the August 1998 lows to the March
2000 highs, followed by a correction in April and May this year that brought
technology investors back to earth. After the spring retreat, stocks rallied
through the summer, only to correct again in the fall. Corrections are never
fun -- in fact, they are downright painful. But it helps to keep things in
perspective. After all the ups and downs so far this year, the Fund is up
calendar year-to-date. In addition, the Fund has significantly outperformed the
indexes. For the Fund's fiscal year-end at September 30, 2000, the performance
of the Fund and the major indexes are listed below:
<TABLE>
<CAPTION>
Kopp Emerging S&P Dow Russell
Growth Fund(1) 500(2) Jones(2) 2000(2)
-------------- ------ -------- -------
<S> <C> <C> <C> <C> <C>
1-Year Trailing Annualized
Rates of Return (09/30/99 -
09/30/00) 149.84% 13.28% 4.60% 23.39%
3-Year Trailing Annualized
Rates of Return (10/01/97 -
09/30/00) 43.71% 16.43% 12.09% 5.96%
Trailing Annualized Rates of Return
Since Inception (10/01/97 -
09/30/00) 43.71% 16.43% 12.09% 5.96%
</TABLE>
----------------------------------------------------
(1) Performance shown is for Class A shares and includes the maximum 3.5% sales
charge. Returns in calendar 1999 were achieved during a period favorable for
technology stocks, which may not be repeated. Performance reflects expense
subsidies and waivers, without which the results would have been slightly
lower. Performance also reflects Advisor fee waiver recovery, without which
the results would have been slightly higher. Past performance is no
guarantee of future results. Investment return and principal value will
fluctuate, and shares, when redeemed, may be worth more or less than their
original cost. For an update on the Fund's performance, in view of
significant market volatility, please call us at 1-888-533-KOPP.
Please remember that small-cap investing carries more risk than investing in
larger, more well-established companies because small companies have a
higher risk of failure, experience greater price volatility, have more
limited financial resources, and trade in lower volumes. As a result, the
value of this investment will fluctuate more dramatically than an investment
in a mutual fund that invests mostly in larger companies. This is a non-
diversified fund and may invest a greater share of its assets in a
particular company or companies.
(2) The S&P 500 Index is a commonly used measure of U.S. common stock total
return performance. The Dow Jones Industrial Average is an index of 30 U.S.
"blue-chip" stocks. The overall Russell Index represents the 3,000 largest
U.S. companies based on total market cap -- representing 98% of the
investable U.S. equity market. The Russell 2000 measures the performance of
the 2,000 smallest companies in the Russell Index, approximately 11% of the
investable U.S. market. Indexes are not managed. It is not possible to
invest directly in an index.
<PAGE> 2
2
IN THE EARLY INNINGS
Technology stocks have been particularly volatile this year. In fact, over half
of technology companies have experienced a single-day drop of at least 20% in
the last twelve months. The Fund has had a significant stake in the technology
sector since it opened three years ago. In the current unsettled environment, it
is helpful to review the long-term reasons that we have invested in technology.
The reasons that attracted us are still in place, plus they are expanding. We
still believe that the benefits of technology spending, namely increased
productivity and rapid payback on investment, remain and will ensure
technology's status as one of the fastest growing areas in the economy. Consider
the following items:
S Donaldson, Lufkin & Jenrette compares today's technology companies to the
capital goods and machinery companies of fifty years ago. Those companies
put in place the infrastructure for the industrial economy - today's
technology companies are putting in place the infrastructure for the
information age. This implies that significant capital spending may still
lie ahead.
S Federal Reserve Board Chairman Alan Greenspan has commented that, at some
point in the future, we may look back at these days and conclude that,
"at the turn of the millennium, the American economy was experiencing a
once-in-a-century acceleration in innovation, which propelled forward
productivity, output, corporate profits, and stock prices at a pace not
seen in generations, if ever."
S Wit SoundView predicts that, eventually, statistics will stop measuring
the household penetration of PCs and instead measure Internet access
devices per capita - and, at some point, that statistic is likely to
exceed 1.0. In other words, we may be accessing the Internet via our PC,
our television, our videophone, etc. The securities firm draws a
similarity to the proliferation of radios and cars. Whereas these new
"luxuries" were once measured by the number of households who owned a
radio or car, they now are measured by the number of radios or
automobiles per household.
S Consumers are adopting new technologies at a faster rate than ever
before. Consider the rapid rate of penetration for the Internet -- no
product before has achieved so much penetration so fast. The Internet
achieved 26% penetration in seven years - it took the PC seventeen years
to reach that level of ownership, the television 25 years, and the
telephone 35 years. There is no indication that we as consumers are
likely to slow down our need for, dare we say our "passion" for,
technological innovations.
INVESTING IN THE INTERNET
Over the past three years, shareholders have often asked us why we weren't
buying the hot Internet stocks that were moving up with no end in sight. Our
response then was the same as it is now - we are investing in the Internet
theme, but not in the obvious names. We are not downplaying the importance of
the Internet - it is certainly the most defining economic development of the
past decade. However, we saw problems with investing in the content providers
and the service providers. We saw better opportunities in the companies building
the infrastructure necessary for the Internet to function. Content and service
don't do anyone any good unless the infrastructure is in place. Therefore, our
Internet investments have been focused on the equipment companies, the
networking companies, and the software companies that play into the Internet.
<PAGE> 3
3
There is no question that a lot of people made a lot of money on the pure
Internet stocks.(3) However, many Internet stocks came crashing down from their
March highs as suddenly the "dot-com" designation had negative connotations. We
believe that our avoidance of "Internet stocks" has been one of the reasons for
our relative out-performance so far in 2000. We may have given up a few
percentage points in 1999, but have held up far better in 2000.
BEYOND TECHNOLOGY
While much of this letter has focused on the technology sector, the Fund has
always had stocks in the health care area. The health care stocks in which the
Fund invests fall into three broad categories. First, the Fund has exposure to
the medical device area. Small companies develop many of the technological
advances in devices, so this is a natural fit with our small-to-mid-cap
investment style. Often these companies never grow to be large-cap companies,
however, because they are bought by larger players. Second, we believe
point-of-care diagnostics companies offer attractive growth as a result of their
products' implications for quality of care (important to the patient) and cost
of care (important to the provider). Third, companies that provide products or
instruments that help to improve the efficiency of the drug discovery process
may offer exciting growth potential. It is this third area -- drug discovery --
where we have expanded our focus. We see parallels between our successful
technology theme of investing in the "enablers" of the communications
revolution (the communication infrastructure companies) rather than investing in
the service providers themselves. In a sense, we have invested in the arms
merchants rather than the combatants in the revolution. In the Fund, we are
applying this same theme to the biotechnology revolution and investing in the
"enablers" of the therapeutic process rather than the front-line biotechnology
therapeutic companies or pharmaceutical companies which are dependent on the
success or failure of one particular therapeutic compound.
IN THE END
The issues that caused investors to be nervous earlier this year were closely
tied to inflation fears. The recent nervousness has been blamed on a slowing
economy, concerns about third-quarter earnings, higher oil prices and weakness
in the euro currency. These are all very legitimate concerns, but there will
always be something to worry about. It is important to differentiate between the
short-term, more cyclical factors and the long-term secular trends that we
believe are still in place. We remain optimistic about the long-term potential
for investments in the technology and health care sectors. Thank you for
investing with us.
Sincerely,
/s/ L.C. Kopp
LEE KOPP
President
----------------------------------------------------
(3) From the September 1998 low to the March 2000 high, the Morgan Stanley Dean
Witter Internet Index was up 700%, far outpacing the NASDAQ's 224% advance.
According to USA Today, the average Internet stock is off over 70%, with
many off 90% or more.
<PAGE> 4
4
TOP ten HOLDINGS
------------------------------------------------------
<TABLE>
<C> <S>
1. SDL, INC. (SDLI)
2. RATIONAL SOFTWARE CORPORATION (RATL)
3. MACROVISION CORPORATION (MVSN)
4. ADC TELECOMMUNICATIONS, INC. (ADCT)
5. ZYGO CORPORATION (ZIGO)
6. MMC NETWORKS, INC. (MMCN)
7. DMC STRATEX NETWORKS, INC. (STXN)
8. VITESSE SEMICONDUCTOR CORPORATION (VTSS)
9. TECHNE CORPORATION (TECH)
10. PMC-SIERRA, INC. (PMCS)
</TABLE>
TOP ten INDUSTRIES
------------------------------------------------------
[PIE CHART]
<TABLE>
<CAPTION>
LASER-
BASED
COMPONENTS APPLICATION
& DEVELOPMENT TELECOMMUNICATION INFORMATION
SUBSYSTEMS TOOLS SEMICONDUCTOR EQUIPMENT SECURITY NETWORKING
---------- ----------- ------------- ----------------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Top ten Industries 14.7% 11.2% 8.9% 8.0% 7.2% 6.9%
<CAPTION>
OTHER
RESEARCH SOFTWARE MACHINE COMMON CASH &
REAGENTS/INSTRUMENTATION WIRELESS APPLICATIONS VISION/INSPECTION STOCKS EQUIVALENTS
------------------------ -------- ------------ ----------------- ------ -----------
<S> <C> <C> <C> <C> <C> <C>
Top ten Industries 6.6% 5.1% 4.9% 4.2% 18.6% 3.7%
</TABLE>
Percentages represent market value as a percentage of total investments.
--------------------------------------------------------------------------------
It should not be assumed that our stock selections or investment
philosophy will be profitable or will equal past performance.
Small-cap stocks involve greater risks and volatility than those
of larger, more established companies. Potential for profit
involves possibility of loss. The President's letter is for
general information only and is not intended to provide specific
advice or stock recommendations to any individual. Future
investment decisions and commentary may be made under different
economic, market, and industry conditions from those existing at
the time these comments were prepared.
This report and the financial statements contained herein are
submitted for the general information of the shareholders of the
Fund. This report is not authorized for distribution to
prospective investors in the Fund unless preceded or accompanied
by a prospectus. For more information on the Kopp Emerging Growth
Fund, including charges and expenses, call 1-888-533-KOPP for a
free prospectus. Read it carefully before you invest or send
money.
The opinions in this letter are those of Kopp Investment Advisors,
are subject to change without notice, and may not come to pass.
The Fund should be used in a program of diversified investing and
not as a complete investment program.
<PAGE> 5
5
$10,000 INITIAL INVESTMENT MADE 10/01/97 THROUGH 09/30/00
[LINE GRAPH]
<TABLE>
<CAPTION>
KOPP EMERGING KOPP EMERGING KOPP EMERGING KOPP EMERGING
GROWTH FUND - CLASS GROWTH FUND - CLASS GROWTH FUND - CLASS GROWTH FUND - CLASS
A (NO LOAD) A (LOAD) C (NO LOAD) I
------------------- ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
10/01/1997 10000.00 9650.00 10000.00
12/31/1997 8030.00 7749.00 8040.00
03/31/1998 8400.00 8106.00 8430.00
06/30/1998 7640.00 7373.00 7670.00
09/30/1998 5810.00 5607.00 5840.00
12/31/1998 8050.00 7770.00 10000.00 8100.00
03/31/1999 8550.00 8252.00 10569.00 8610.00
06/30/1999 10950.00 10569.00 13511.00 11040.00
09/30/1999 11889.00 11476.00 14649.00 12001.00
12/31/1999 19978.00 19284.00 24588.00 20182.00
03/31/2000 28437.00 27448.00 34948.00 28753.00
06/30/2000 30698.00 29631.00 37656.00 31062.00
09/30/2000 30778.00 29708.00 37694.00 31170.00
<CAPTION>
RUSSELL 2000 INDEX
------------------
<S> <C>
10/01/1997 10000.00
12/31/1997 9665.00
03/31/1998 10637.00
06/30/1998 10142.00
09/30/1998 8098.00
12/31/1998 9419.00
03/31/1999 8908.00
06/30/1999 10294.00
09/30/1999 9643.00
12/31/1999 11421.00
03/31/2000 12230.00
06/30/2000 11767.00
09/30/2000 11898.00
</TABLE>
AVERAGE ANNUAL RATE OF RETURN*
FOR THE PERIOD ENDED SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
SINCE
1 YEAR INCEPTION*
------- ----------
<S> <C> <C>
Kopp Emerging Growth Fund -- Class A (load) 149.84% 43.71%
Kopp Emerging Growth Fund -- Class A (no load) 158.87% 45.41%
Kopp Emerging Growth Fund -- Class C (no load) 157.30% 127.23%
Kopp Emerging Growth Fund -- Class C (load) 156.30% 127.23%
Kopp Emerging Growth Fund -- Class I 159.75% 46.03%
Russell 2000 Index 23.39% 5.96%
</TABLE>
* Class A and Class I, October 1, 1997; Class C, February 19, 1999.
This chart assumes an initial gross investment of $10,000 made on October 1,
1997 (commencement of operations). Returns shown include the reinvestment of
dividends. For Class A Shares, a maximum 3.50% sales load is in effect. For
Class C Shares, a maximum contingent deferred sales charge of 1.00% is in effect
for redemptions less than one year from the purchase date. Class A Shares are
sold with a 0.35% 12b-1 fee. Class C Shares are sold with a 1.00% 12b-1 fee.
Performance reflects expense reimbursements, fee waivers and Advisor fee waiver
recovery. Absent expense reimbursements and fee waivers, total returns would be
reduced. Absent Advisor fee waiver recovery, total returns would be increased.
Past performance is not predictive of future performance. Investment return and
principal value will fluctuate, so that your shares, when redeemed, may be worth
more or less than the original cost.
Russell 2000 Index -- A stock market index comprising the 2,000 smallest U.S.
domiciled publicly traded common stocks that are included in the Russell 3000
Index. The Russell 2000 Index represents approximately 11% of the U.S. publicly
traded equity market. The Russell 3000 Index comprises the 3,000 largest U.S.
domiciled publicly traded common stocks by market capitalization representing
approximately 98% of the U.S. equity market.
<PAGE> 6
6
KOPP EMERGING GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
September 30, 2000
<TABLE>
<S> <C>
-------------------------------------------------------
ASSETS
Investments in securities, at value:
Investments in securities of
unaffiliated issuers (cost
$545,039,256) $1,320,097,943
Investments in securities of
affiliated issuers (cost
$111,291,728) 131,149,375
-------------------------------------------------------
Total investments in securities
(cost $656,330,984) 1,451,247,318
Receivable from capital shares sold 4,650,718
Income receivable 272,097
Deferred organization expenses, net
of accumulated amortization 38,748
Prepaid expenses 86,153
-------------------------------------------------------
Total Assets 1,456,295,034
-------------------------------------------------------
LIABILITIES
Payable for securities purchased 3,278,437
Payable for capital shares redeemed 4,175,618
Payable to bank 11,292
Payable to Investment Advisor 1,238,965
Payable for service fees 582,438
Payable for distribution fees 263,445
Payable to Affiliated Distributor 232,568
Accrued other expenses 530,821
-------------------------------------------------------
Total Liabilities 10,313,584
-------------------------------------------------------
NET ASSETS $1,445,981,450
-------------------------------------------------------
-------------------------------------------------------
NET ASSETS CONSIST OF
Capital stock $ 469,120
Paid-in-capital in excess of par 552,243,854
Accumulated net realized gain on
securities 98,352,142
Unrealized net appreciation on
securities 794,916,334
-------------------------------------------------------
Total Net Assets $1,445,981,450
-------------------------------------------------------
CLASS A
Net Assets $1,201,523,828
Shares authorized ($0.01 par value) 3,000,000,000
Shares issued and outstanding 39,037,385
Net asset value and redemption price
per share $ 30.78
-------------------------------------------------------
Maximum offering price per share
(note 1) $ 31.90
-------------------------------------------------------
CLASS C
Net Assets $ 44,110,994
Shares authorized ($0.01 par value) 3,000,000,000
Shares issued and outstanding 1,446,821
Net asset value and offering
price per share (note 1) $ 30.49
-------------------------------------------------------
CLASS I
Net Assets $ 200,346,628
Shares authorized ($0.01 par value) 3,000,000,000
Shares issued and outstanding 6,427,793
Net asset value, redemption price and
offering price per share $ 31.17
-------------------------------------------------------
</TABLE>
See Notes to the Financial Statements.
<PAGE> 7
7
KOPP EMERGING GROWTH FUND
STATEMENT OF OPERATIONS
For the year ended September 30, 2000
<TABLE>
<S> <C>
-------------------------------------------------------
INVESTMENT INCOME
Interest $ 1,307,088
Dividends 53,000
-------------------------------------------------------
Total investment income 1,360,088
-------------------------------------------------------
EXPENSES
Investment advisory fee 10,430,361
Service fees -- Class A 2,222,081
Service fees -- Class C 43,741
12b-1 fees -- Class A 888,832
12b-1 fees -- Class C 131,224
Transfer agent fees and expenses 593,788
Fund administration fees 524,680
Custody fees 226,842
Fund accounting fees 167,882
Federal and state registration fees 98,772
Reports to shareholders 49,958
Professional fees 43,178
Directors' fees and expenses 29,996
Amortization of deferred organization
expenses 19,431
Other expenses 44,158
-------------------------------------------------------
Expenses before recovery 15,514,924
Plus: Advisor fee waiver recovery, net 1,594,775
-------------------------------------------------------
Total expenses 17,109,699
-------------------------------------------------------
NET INVESTMENT LOSS (15,749,611)
-------------------------------------------------------
REALIZED AND UNREALIZED GAIN
Net realized gain on investment
transactions:
Net realized gain on investment
transactions of unaffiliated
issuers 111,201,670
Net realized gain on investment
transactions of affiliated issuers 2,784,499
Change in unrealized appreciation on
investments 677,728,474
-------------------------------------------------------
Net gain on investments 791,714,643
-------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $775,965,032
-------------------------------------------------------
</TABLE>
KOPP EMERGING GROWTH FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
September 30, 2000 September 30, 1999
<S> <C> <C>
---------------------------------------------------------------
OPERATIONS
Net investment loss $ (15,749,611) $ (5,130,171)
Net realized gain on
investments 113,986,169 11,715,286
Change in unrealized
appreciation on
investments 677,728,474 244,501,309
---------------------------------------------------------------
Net increase in net
assets resulting
from operations 775,965,032 251,086,424
---------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Class A:
Proceeds from
shares sold 424,722,780 102,526,599
Cost of shares
redeemed (290,148,800) (134,797,837)
Class C:
Proceeds from
shares sold 37,093,587 1,633,971
Cost of shares
redeemed (2,737,928) (5,713)
Class I:
Proceeds from
shares sold 62,842,847 6,747,721
Cost of shares
redeemed (32,929,972) (127,518)
---------------------------------------------------------------
Net increase
(decrease)
resulting from
capital share
transactions 198,842,514 (24,022,777)
---------------------------------------------------------------
TOTAL INCREASE IN NET
ASSETS 974,807,546 227,063,647
---------------------------------------------------------------
NET ASSETS
Beginning of year 471,173,904 244,110,257
---------------------------------------------------------------
End of year $1,445,981,450 $ 471,173,904
---------------------------------------------------------------
</TABLE>
See Notes to the Financial Statements.
<PAGE> 8
8
KOPP EMERGING GROWTH FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Year Ended
Sept. 30, 2000 Sept. 30, 1999 Sept. 30, 1998 Sept. 30, 2000
-------------- -------------- -------------- --------------
Class A Class A Class A Class I
<S> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net asset value, beginning of period $11.89 $ 5.81 $10.00 $12.00
----------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (0.38)(2) (0.14)(3) (0.09)(3) (0.30)(2)
Net realized and unrealized gain
(loss) on investments 19.27 6.22 (4.10) 19.47
----------------------------------------------------------------------------------------------------------------------------
Total from investment operations 18.89 6.08 (4.19) 19.17
----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $30.78 $11.89 $5.81 $31.17
----------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000's) $1,201,524 $404,630 $216,533 $200,347
Ratio of expenses to average net
assets 1.68%(4)(9) 1.50%(4) 1.50%(4) 1.33%(4)(9)
Ratio of net investment loss to
average net assets (1.55)%(6)(9) (1.44)%(6) (1.30)%(6) (1.20)%(6)(9)
Portfolio turnover rate(10) 21.9% 41.3% 19.7% 21.9%
Total return(11) 158.87% 104.65% (41.90)% 159.75%
----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
February 19, 1999(1)
Year Ended Year Ended Year Ended through
Sept. 30, 1999 Sept. 30, 1998 Sept 30, 2000 Sept. 30, 1999
-------------- -------------- ------------- --------------------
Class I Class I Class C Class C
<S> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net asset value, beginning of period $ 5.84 $10.00 $11.85 $ 8.09
----------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (0.09)(3) (0.06)(3) (0.60)(2) (0.07)(3)
Net realized and unrealized gain
(loss) on investments 6.25 (4.10) 19.24 3.83
----------------------------------------------------------------------------------------------------------------------------
Total from investment operations 6.16 (4.16) 18.64 3.76
----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.00 $5.84 $30.49 $11.85
----------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000's) $64,653 $27,577 $44,111 $1,891
Ratio of expenses to average net
assets 1.15%(4) 1.15%(4) 2.33%(9) 2.15%(5)(8)
Ratio of net investment loss to
average net assets (1.09)%(6) (0.95)%(6) (2.20)%(9) (2.09)%(7)(8)
Portfolio turnover rate(10) 41.3% 19.7% 21.9% 41.3%
Total return(11) 105.48% (41.60)% 157.30% 46.48%(12)
----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Commencement of operations for Class C.
(2) Net investment loss per share represents net investment loss divided by the
average shares outstanding throughout the year.
(3) Net investment loss per share is calculated using the ending balance of
undistributed net investment loss prior to consideration of adjustments for
permanent book and tax differences.
(4) Absent voluntary fee waivers for the years ended September 30, 2000, 1999
and 1998, respectively, the ratio of expenses to average net assets would
have been 1.69%, 1.79% and 1.96% for Class A and 1.34%, 1.40%, and 1.65%
for Class I. Included in these fee waivers, for the years ended September
30, 2000, 1999 and 1998, respectively, were 12b-1 fee waivers of 0.01%,
0.09% and 0.15% for Class A and 0.01%, 0.05%, and 0.19% for Class I.
(5) Absent voluntary fee waivers for the period February 19, 1999 through
September 30, 1999, the annualized ratio of expenses to average net assets
would have been 2.31% for Class C. No 12b-1 fee waivers are included in
these fee waivers since Class C had already incurred its maximum 12b-1 and
shareholder servicing fees.
(6) Absent voluntary fee waivers for the years ended September 30, 2000, 1999
and 1998, respectively, the ratio of net investment loss to average net
assets would have been (1.56)%, (1.73)% and (1.76)% for Class A and
(1.21)%, (1.34)% and (1.45)% for Class I.
(7) Absent voluntary fee waivers for the period February 19, 1999 through
September 30, 1999, the annualized ratio of net investment loss to average
net assets would have been (2.25)% for Class C.
(8) Annualized.
(9) For the year ended September 30, 2000, the ratio includes Advisor fee
waiver recovery (net) of 0.15% for Class A, Class I and Class C.
(10) Calculated on the basis of the Fund as a whole without distinguishing
between the classes of shares issued.
(11) Total return excludes sales charges.
(12) Not annualized.
See Notes to the Financial Statements.
<PAGE> 9
9
KOPP EMERGING GROWTH FUND
SCHEDULE OF INVESTMENTS
September 30, 2000
<TABLE>
<CAPTION>
Number of Market
Shares Value
<C> <S> <C>
----------------------------------------------------------------
COMMON STOCK -- 96.7%
----------------------------------------------------------------
APPLICATION DEVELOPMENT TOOLS -- 11.2%
2,340,000 Rational Software Corporation $ 162,337,500
----------------------------------------------------------------
COMMUNICATIONS SOFTWARE -- 0.3%
400,000 Inter-Tel, Inc.* 4,550,000
----------------------------------------------------------------
COMPUTERS/PERIPHERAL EQUIPMENT -- 0.2%
200,000 S3, Inc. 2,062,500
----------------------------------------------------------------
DATA WAREHOUSING -- 0.6%
200,000 Cognos, Inc.(f) 8,150,000
----------------------------------------------------------------
DIAGNOSTICS -- 1.4%
420,000 Biosite Diagnostics, Inc. 16,747,500
400,000 Cholestech Corporation 2,875,000
----------------------------------------------------------------
19,622,500
----------------------------------------------------------------
E-COMMERCE -- 0.4%
200,000 ValueVision International, Inc. 5,025,000
----------------------------------------------------------------
ELECTRONIC COMPONENTS -- 0.9%
450,000 Artesyn Technologies, Inc. 13,106,250
----------------------------------------------------------------
ELECTRONIC DESIGN AUTOMATION -- 0.8%
295,000 ANSYS, Inc. 3,540,000
440,000 Applied Microsystems
Corporation(#) 4,400,000
310,000 Artisan Components, Inc. 3,991,250
----------------------------------------------------------------
11,931,250
</TABLE>
<TABLE>
<CAPTION>
Number of Market
Shares Value
<C> <S> <C>
----------------------------------------------------------------
GENOMICS -- 2.5%
220,000 CuraGen Corporation $ 11,721,875
600,000 Gene Logic, Inc. 13,800,000
285,000 Sangamo BioSciences, Inc. 11,043,750
----------------------------------------------------------------
36,565,625
----------------------------------------------------------------
INDUSTRIAL AUTOMATION -- 2.3%
640,000 Adept Technology, Inc.(#) 33,640,000
----------------------------------------------------------------
INFORMATION SECURITY -- 7.3%
2,750,000 Cylink Corporation(#) 28,703,125
275,000 Digimarc Corporation 5,121,875
880,000 Macrovision Corporation 71,280,000
----------------------------------------------------------------
105,105,000
----------------------------------------------------------------
INFORMATION TECHNOLOGY SERVICES -- 0.7%
260,000 eLoyalty Corporation 3,315,000
530,000 Lightbridge, Inc. 6,161,250
100,000 Norstan, Inc. 300,000
265,000 Technology Solutions Company 662,500
----------------------------------------------------------------
10,438,750
----------------------------------------------------------------
LASER-BASED COMPONENTS & SUBSYSTEMS -- 14.8%
690,000 SDL, Inc. 213,425,625
----------------------------------------------------------------
MACHINE VISION/INSPECTION -- 4.2%
300,000 CyberOptics Corporation 5,493,750
640,000 Zygo Corporation 55,680,000
----------------------------------------------------------------
61,173,750
</TABLE>
See Notes to the Financial Statements.
<PAGE> 10
KOPP EMERGING GROWTH FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
September 30, 2000
10
<TABLE>
<CAPTION>
Number of Market
Shares Value
<C> <S> <C>
----------------------------------------------------------------
MEDICAL INSTRUMENTS -- 0.3%
200,000 ArthroCare Corporation $ 3,887,500
----------------------------------------------------------------
MEDICAL PRODUCTS -- 0.3%
100,000 Zoll Medical Corporation 4,875,000
----------------------------------------------------------------
NETWORKING -- 7.0%
90,000 Cisco Systems, Inc. 4,972,500
1,000,000 Computer Network Technology
Corporation 34,375,000
230,000 Concord Communications, Inc. 6,095,000
287,500 Ezenia!, Inc. 700,781
600,000 Larscom Incorporated -- Class A(#) 5,700,000
385,000 MMC Networks, Inc. 48,702,500
----------------------------------------------------------------
100,545,781
----------------------------------------------------------------
ONCOLOGY -- 1.2%
150,000 ImClone Systems Incorporated 17,559,375
----------------------------------------------------------------
ORTHOPEDICS -- 0.2%
430,000 Interpore International, Inc. 3,225,000
----------------------------------------------------------------
RESEARCH REAGENTS/INSTRUMENTATION -- 6.6%
400,000 Molecular Devices Corporation 39,300,000
400,000 Techne Corporation 44,800,000
465,000 Ventana Medical Systems, Inc. 11,799,375
----------------------------------------------------------------
95,899,375
----------------------------------------------------------------
SEMICAP EQUIPMENT -- 2.2%
260,000 Applied Science and Technology,
Inc. 3,835,000
150,000 Brooks Automation, Inc. 4,968,750
100,000 Trikon Technologies, Inc. 1,412,500
200,000 Veeco Instruments Inc. 21,253,125
----------------------------------------------------------------
31,469,375
</TABLE>
<TABLE>
<CAPTION>
Number of Market
Shares Value
<C> <S> <C>
----------------------------------------------------------------
SEMICONDUCTOR -- 8.9%
700,000 ANADIGICS, Inc. $ 15,487,500
100,000 Conexant Systems, Inc. 4,187,500
200,000 EMCORE Corporation 8,315,625
200,000 PMC-Sierra, Inc.(f) 43,050,000
700,000 QuickLogic Corporation 11,550,000
520,000 Vitesse Semiconductor Corporation 46,247,500
----------------------------------------------------------------
128,838,125
----------------------------------------------------------------
SOFTWARE APPLICATIONS -- 4.9%
180,000 Documentum, Inc. 14,613,750
475,000 Epicor Software Corporation 1,662,500
400,000 HNC Software, Inc. 32,725,000
170,000 Hyperion Software Corporation 4,398,750
375,000 PLATO Learning, Inc. 7,728,516
650,000 Project Software & Development,
Inc. 10,105,469
----------------------------------------------------------------
71,233,985
----------------------------------------------------------------
SPECIALTY PHARMACEUTICALS -- 0.5%
143,750 Galen Holdings PLC ADR(f) 6,935,938
----------------------------------------------------------------
TELECOMMUNICATION EQUIPMENT -- 8.0%
2,400,000 ADC Telecommunications, Inc. 64,537,500
400,000 Advanced Fibre Communications,
Inc. 15,150,000
510,000 Tekelec 16,766,250
100,000 Tellabs, Inc. 4,775,000
170,000 Tut Systems, Inc. 14,673,125
----------------------------------------------------------------
115,901,875
</TABLE>
See Notes to the Financial Statements.
<PAGE> 11
KOPP EMERGING GROWTH FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
September 30, 2000
11
<TABLE>
<CAPTION>
Number of Market
Shares Value
<C> <S> <C>
----------------------------------------------------------------
TEST AND MEASUREMENT -- 0.9%
750,000 LeCroy Corporation(#) $ 13,218,750
----------------------------------------------------------------
THERAPEUTICS -- 2.4%
700,000 Neose Technologies, Inc.(#) 33,862,500
----------------------------------------------------------------
VOICE PROCESSING -- 0.6%
800,000 AVT Corporation 4,450,000
475,000 Davox Corporation 4,779,687
----------------------------------------------------------------
9,229,687
----------------------------------------------------------------
WIRELESS -- 5.1%
3,000,000 DMC Stratex Networks, Inc. 48,187,500
180,000 EMS Technologies, Inc. 2,700,000
670,000 Itron, Inc. 4,103,750
140,000 Proxim, Inc. 6,230,000
200,000 RF Monolithics, Inc. 1,175,000
750,000 Spectrian Corporation(#) 11,625,000
----------------------------------------------------------------
74,021,250
----------------------------------------------------------------
Total Common Stock (cost $602,920,932) 1,397,837,266
<CAPTION>
Number of Market
Shares Value
<C> <S> <C>
----------------------------------------------------------------
SHORT-TERM INVESTMENT -- 3.7%
----------------------------------------------------------------
INVESTMENT COMPANY -- 3.7%
53,410,052 Firstar Institutional Money Market
Fund (*) $ 53,410,052
----------------------------------------------------------------
Total Short-Term Investment (cost $53,410,052) 53,410,052
----------------------------------------------------------------
Total Investments -- 100.4% (cost $656,330,984) 1,451,247,318
----------------------------------------------------------------
Liabilities, less Other Assets -- (0.4%) (5,265,868)
----------------------------------------------------------------
NET ASSETS -- 100.0% $1,445,981,450
----------------------------------------------------------------
</TABLE>
* Income producing security.
f Foreign security.
# Affiliated company; the Fund owns 5% or more of the outstanding voting
securities of the issuer.
PLC -- Public Limited Company
ADR -- American Depository Receipt
See Notes to the Financial Statements.
<PAGE> 12
12
KOPP EMERGING GROWTH FUND
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2000
1. ORGANIZATION
Kopp Funds, Inc. (the "Company") was incorporated on June 12, 1997, as a
Minnesota corporation, and is registered as an open-end, investment management
company under the Investment Company Act of 1940, as amended (the "1940 Act").
The Kopp Emerging Growth Fund (the "Fund") is a non-diversified series of the
Company. The Fund's investment objective is to seek long-term capital
appreciation by investing primarily in common stocks of companies that Kopp
Investment Advisors, Inc. (the "Advisor") believes to have the potential for
superior growth. The Company's registration statement was declared effective on
September 16, 1997. The Fund commenced operations on October 1, 1997.
The costs incurred in connection with the organization, initial registration and
public offering of shares aggregated $96,935. The Fund is amortizing these costs
over the period of benefit, but not to exceed sixty months from the Fund's
commencement of operations. The proceeds of any redemption of the initial shares
by the original shareholder or any transferee will be reduced by a pro rata
portion of any then unamortized organizational expenses in the same proportion
as the number of initial shares being redeemed bears to the number of initial
shares outstanding at the time of such redemption.
The Fund has issued three classes of shares: Class A, Class C, and Class I. Each
class of shares has identical rights and privileges except that each class bears
its own expenses and exclusive voting rights on matters pertaining to the
distribution plan for that class. Class A shares are subject to an initial sales
charge imposed at the time of purchase, in accordance with the Fund's
prospectus. The maximum sales charge on Class A shares is 3.50% of the offering
price or 3.63% of the net asset value. The Class C shares are subject to a
contingent deferred sales charge at the time of redemption, in accordance with
the Fund's prospectus. The maximum sales charge is 1% for redemptions in the
first year and 0% thereafter.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATION
Common stocks and other equity-type securities are valued at the last sales
price on the national securities exchange or NASDAQ on which such securities are
primarily traded; however, securities traded on a national securities exchange
or NASDAQ for which there were no transactions on a given day, and securities
not listed on a national securities exchange or NASDAQ, are valued at the
average of the most recent bid and asked prices. Any securities or other assets
for which market quotations are not readily available are valued at fair value
as determined in good faith by the Board of Directors of the Company or its
delegate. The Board of Directors has approved the use of pricing services to
assist the Fund in the determination of net asset value. Instruments with a
remaining maturity of 60 days or less are valued on an amortized cost basis.
FEDERAL INCOME TAXES
The Fund intends to qualify for treatment as a "Regulated Investment Company"
under Subchapter M of the Internal Revenue Code, and the Fund intends to
distribute investment company net taxable income and net capital gains to
shareholders. Therefore, no federal tax provision is required.
<PAGE> 13
13
INCOME AND EXPENSES
Net investment income (loss), other than class specific expenses, and realized
and unrealized gains and losses are allocated daily to each class of shares
based upon the relative net asset value of outstanding shares of each class of
shares at the beginning of the day (after adjusting for the current day's
capital share activity of the respective class).
DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income and distributions of net realized gains, if
any, will be declared and paid at least annually.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
FOREIGN SECURITIES
Investing in securities of foreign companies and foreign governments involves
special risks and considerations not typically associated with investing in U.S.
companies and the U.S. government. These risks include revaluation of currencies
and future adverse political and economic developments. Moreover, securities of
many foreign companies and foreign governments and their markets may be less
liquid and their prices more volatile than those of securities of comparable
U.S. companies and the U.S. government.
OTHER
Investment and shareholder transactions are recorded on the trade date. The Fund
determines the gain or loss realized from investment transactions by comparing
the original cost of the security lot sold with the net sales proceeds (specific
identification). Dividend income is recognized on the ex-dividend date or as
soon as this information is available to the Fund, and interest income is
recognized on an accrual basis. Generally accepted accounting principles require
that permanent financial reporting and tax differences be reclassified to more
closely present capital balances on a tax basis. On the Statement of Assets and
Liabilities, as a result of permanent book to tax differences, a
reclassification adjustment has been made to decrease accumulated net investment
loss by $15,749,611, decrease accumulated net realized gain on securities by
$15,529,023, and decrease paid-in-capital in excess of par by $220,588.
3. CAPITAL SHARE TRANSACTIONS
Transactions in shares of the Fund were as follows:
<TABLE>
<CAPTION>
Class A Class A
Year Ended Year Ended
September 30, 2000 September 30, 1999
------------------ ------------------
<S> <C> <C>
Shares sold 16,867,114 11,629,693
Shares redeemed (11,849,281) (14,905,059)
-----------------------------------------------------------------
Net increase
(decrease) 5,017,833 (3,275,366)
</TABLE>
<TABLE>
<CAPTION>
Class C
Class C February 19, 1999*
Year Ended through
September 30, 2000 September 30, 1999
------------------ ------------------
<S> <C> <C>
Shares sold 1,388,531 159,988
Shares redeemed (101,188) (510)
-----------------------------------------------------------------
Net increase 1,287,343 159,478
</TABLE>
<TABLE>
<CAPTION>
Class I Class I
Year Ended Year Ended
September 30, 2000 September 30, 1999
------------------ ------------------
<S> <C> <C>
Shares sold 2,232,921 681,046
Shares redeemed (1,191,868) (18,120)
-----------------------------------------------------------------
Net increase 1,041,053 662,926
</TABLE>
* Commencement of operations for Class C.
4. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of securities, excluding short-term
investments, for the Fund for
<PAGE> 14
14
the year ended September 30, 2000, were $363,250,836 and $223,703,385,
respectively. There were no purchases or sales of long-term U.S. government
securities.
At September 30, 2000, gross unrealized appreciation and depreciation of
investments for federal income tax purposes were as follows:
<TABLE>
<S> <C>
Appreciation $872,132,489
Depreciation (77,461,726)
----------------------------------------------------------
Net unrealized appreciation on
investments $794,670,763
</TABLE>
At September 30, 2000, the cost of investments for federal income tax purposes
was $656,576,555.
5. INVESTMENT ADVISORY AND OTHER AGREEMENTS
Pursuant to its investment advisory agreement with the Fund, the Advisor is
entitled to receive a fee, calculated daily and payable monthly, at an annual
rate of 1.00% applied to the daily net assets of the Fund.
Through January 31, 2000, the Advisor had voluntarily agreed to waive its
management fee to the extent necessary to ensure that (i) the total annual
operating expenses for Class A shares would not exceed 1.50%, (ii) the total
annual operating expenses for Class C shares would not exceed 2.15%, and (iii)
the total annual operating expenses for Class I shares would not exceed 1.15%.
Pursuant to this agreement, the Advisor waived management fees of $109,326.
Effective January 31, 2000, the Advisor has voluntarily agreed to waive its
management fee to the extent necessary to ensure that (i) the total annual
operating expenses for Class A shares would not exceed 1.75%, (ii) the total
annual operating expenses for Class C shares would not exceed 2.40%, and (iii)
the total annual operating expenses for Class I shares would not exceed 1.40%.
The Advisor may recover previously waived management fees. As of September 30,
2000, the Advisor had recovered all previously waived management fees in the
amount of $1,704,101.
Firstar Mutual Fund Services, LLC, serves as accounting services agent,
administrator, and transfer agent for the Fund. Firstar Bank, N.A. serves as
custodian for the Fund.
The Fund has adopted a plan pursuant to Rule 12b-1 under the 1940 Act (the
"Plan") with respect to each class of shares pursuant to which certain
distribution and shareholder servicing fees may be paid to Centennial Lakes
Capital, Inc. (the "Distributor"). The Distributor is an affiliate of the
Advisor. Under the terms of the Plan, each class of shares may be required to
pay the Distributor (i) a distribution fee for the promotion and distribution of
shares of up to 0.25% of the average daily net assets of the Fund attributable
to Class A and Class I and up to 0.75% of the average daily net assets of the
Fund attributable to Class C (computed on an annual basis) and (ii) a
shareholder servicing fee for personal service provided to shareholders of up to
0.25% of the average daily net assets of the Fund attributable to all three
classes (computed on an annual basis). Payments under the Plan with respect to
Class A shares are currently limited to 0.35%, which represents a 0.10%
distribution fee and a 0.25% shareholder servicing fee. Class C shares are
currently incurring 1.00%, which represents a 0.75% distribution fee and a 0.25%
shareholder servicing fee. The Distributor currently has no intention of
charging any Rule 12b-1 fees in connection with the Class I shares. The
Distributor is authorized to, in turn, pay all or a portion of these fees to any
registered securities dealer, financial institution, or other person who renders
assistance in distributing or promoting the sale of Fund shares, or who provides
certain shareholder services to Fund shareholders, pursuant to a written
agreement. To the extent such fee is not paid to such persons, the Distributor
may use the fee for its own distribution
<PAGE> 15
15
expenses incurred in connection with the sale of Fund shares, or for any of its
shareholder servicing expenses.
The Plan is a "reimbursement" plan, which means that the fees paid by the Fund
under the Plan are intended to reimburse the Distributor for services rendered
and commission fees borne up to the maximum allowable distribution and
shareholder servicing fees. If the Distributor is due more money for its
services rendered and commission fees borne than are immediately payable because
of the expense limitation under the Plan, the unpaid amount is carried forward
from period to period while the Plan is in effect until such time as it may be
paid. As of September 30, 2000, there were $828,728 of unreimbursed distribution
and shareholder servicing related expenses to be carried forward to future plan
years. Distribution and shareholder servicing fees incurred by Class A shares
for the year ended September 30, 2000 were $888,832 and $2,222,081, respectively
(net of voluntary waiver). The distribution and shareholder servicing fees
retained by the Distributor, related to Class A, for the year ended September
30, 2000 were $142,382 and $355,966, respectively. The Fund was advised that the
Distributor advanced $354,800 of distribution and shareholder servicing fees
related to Class C shares for the year ended September 30, 2000. Distribution
and shareholder servicing fees incurred by Class C shares for the year ended
September 30, 2000 were $131,224 and $43,741, respectively. The distribution and
shareholder servicing fees retained by the Distributor, related to Class C, for
the year ended September 30, 2000 were $131,191 and $43,730, respectively.
The Fund was advised that the Distributor retained front-end sales charges on
Class A shares of $1,155,899 and contingent deferred sales charges on Class C
shares of $30,245 for the year ended September 30, 2000.
<PAGE> 16
16
6. OTHER AFFILIATES*
Investments representing 5% or more of the outstanding voting securities of a
portfolio company result in that company being considered an affiliated company,
as defined in the 1940 Act. The aggregate market value of all securities of
affiliated companies as of September 30, 2000 amounted to $131,149,375
representing 9.07% of net assets. Transactions during the year ended September
30, 2000 in which the issuer was an "affiliated person" are as follows:
<TABLE>
<CAPTION>
Adept Applied Centigram Larscom
Technology, Microsystems Communications Cylink Incorporated LeCroy
Inc. Corporation Corporation** Corporation Class A Corporation
----------- ------------ -------------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
September 30, 1999 Balance
Shares 637,000 430,000 335,000 1,238,498 240,000 732,000
Cost $8,535,471 $2,850,837 $4,449,398 $ 8,715,977 $2,693,126 $19,430,478
Gross Additions
Shares 10,000 40,000 -- 1,521,502 360,000 20,000
Cost $ 66,875 $ 198,439 $ -- $21,587,682 $3,640,777 $ 302,188
Gross Deductions
Shares 7,000 30,000 335,000 10,000 -- 2,000
Cost $ 110,687 $ 361,797 $4,449,398 $ 196,563 $ -- $ 85,750
September 30, 2000 Balance
Shares 640,000 440,000 -- 2,750,000 600,000 750,000
Cost $8,491,659 $2,687,479 $ -- $30,107,096 $6,333,903 $19,646,916
----------------------------------------------------------------------------------------------------------------------
Realized gain (loss) $ (68,907) $ 3,816 $3,042,097 $ (59,067) $ 0 $ (55,001)
----------------------------------------------------------------------------------------------------------------------
Investment income $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
----------------------------------------------------------------------------------------------------------------------
<CAPTION>
Neose
Technologies, Spectrian Zygo
Inc. Corporation Corporation** Total
------------- ----------- ------------- -----
<S> <C> <C> <C> <C>
September 30, 1999 Balance
Shares -- 700,000 500,000 4,812,498
Cost $ -- $16,987,632 $ 7,384,932 $ 71,047,851
Gross Additions
Shares 700,000 52,500 140,000 2,844,002
Cost $26,216,574 $ 956,406 $ 4,063,189 $ 57,032,130
Gross Deductions
Shares -- 2,500 -- 386,500
Cost $ -- $ 135,937 $ -- $ 5,340,132
September 30, 2000 Balance
Shares 700,000 750,000 640,000 7,270,000
Cost $26,216,574 $17,808,101 $11,448,121 $122,739,849
------------------------------------------------------------------------------------------
Realized gain (loss) $ 0 $ (78,439) $ 0 $ 2,784,499
------------------------------------------------------------------------------------------
Investment income $ 0 $ 0 $ 0 $ 0
------------------------------------------------------------------------------------------
</TABLE>
* As a result of the Fund's beneficial ownership of the common stock of these
companies, regulators require that the Fund state that it may be deemed an
affiliate of the respective issuer. The Fund disclaims that the listing of
these companies is an admission that the "affiliated persons" are affiliates
of the Distributor, Advisor, Fund, Company, or any other client of the
Advisor.
** Security that was affiliated during the year ended September 30, 2000, but
not at September 30, 2000.
7. BANK BORROWING
The Fund has a $50,000,000 secured line of credit with Firstar Bank, N.A. The
interest rate on any borrowings is the Bank's announced prime rate and
borrowings would be for liquidity purposes. The Fund pays a commitment fee equal
to the amount of the line at a rate of 0.12% per annum. During the year ended
September 30, 2000, the Fund did not draw upon the line of credit.
<PAGE> 17
17
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
Kopp Funds, Inc.:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of Kopp Emerging Growth Fund (a portfolio within
Kopp Funds, Inc.) as of September 30, 2000, and the related statement of
operations for the year then ended, the statements of changes in net assets for
each of the years in the two-year period then ended and the financial highlights
for each of the years in the three-year period then ended. These financial
statements and the financial highlights are the responsibility of the fund's
management. Our responsibility is to express an opinion on these financial
statements and the financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and the financial highlights are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of September 30, 2000, by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial position of
Kopp Emerging Growth Fund as of September 30, 2000, and the results of its
operations for the year then ended, the changes in its net assets for each of
the years in the two-year period then ended and the financial highlights for
each of the years in the three-year period then ended, in conformity with
accounting principles generally accepted in the United States of America.
KPMG LLP
Minneapolis, Minnesota
October 20, 2000
<PAGE> 18
18
(This page is intentionally left blank.)
<PAGE> 19
19
(This page is intentionally left blank.)
<PAGE> 20
[KOPP LOGO]
(C)2000 Kopp Investment Advisors, Inc.
DIRECTORS
LeRoy C. Kopp
Robert L. Stehlik
Thomas R. Stuart
OFFICERS
LeRoy C. Kopp, Chief Executive Officer and President
John P. Flakne, Chief Financial Officer and Treasurer
Kathleen S. Tillotson, Executive Vice President and Secretary
Gregory S. Kulka, First Vice President
INVESTMENT ADVISER
KOPP INVESTMENT ADVISORS, INC.
7701 France Avenue South, Suite 500
Edina, MN 55435
EMERGING GROWTH FUND
ADMINISTRATOR AND TRANSFER AGENT ANNUAL REPORT 2000
FIRSTAR MUTUAL FUND SERVICES, LLC
<TABLE>
<S> <C>
For Overnight deliveries, For regular mail deliveries,
use: use:
Kopp Funds, Inc. Kopp Funds, Inc.
c/o Firstar Mutual Fund c/o Firstar Mutual Fund
Services, LLC Services, LLC
Third Floor P.O. Box 701
615 E. Michigan Street Milwaukee, WI 53201-0701
Milwaukee, WI 53202
</TABLE>
CUSTODIAN
FIRSTAR BANK, N.A.
425 Walnut Street
Cincinnati, OH 45202
DISTRIBUTOR
CENTENNIAL LAKES CAPITAL, INC.
7701 France Avenue South, Suite 500
Edina, MN 55435
INDEPENDENT AUDITORS
KPMG LLP
4200 Norwest Center
90 South Seventh Street
Minneapolis, MN 55402
LEGAL COUNSEL
GODFREY & KAHN, S.C.
780 N. Water Street
Milwaukee, WI 53202
Kopp Funds is distributed by Centennial Lakes Capital, Inc., a member of
the NASD and an affiliate of Kopp Investment Advisors, Inc. and the Fund.
