XANTHUS FUND, L.L.C.
FINANCIAL STATEMENTS
PERIOD FROM MAY 4, 1999
(COMMENCEMENT OF OPERATIONS)
TO JUNE 30, 1999
(UNAUDITED)
<PAGE>
XANTHUS FUND, L.L.C.
FINANCIAL STATEMENTS
PERIOD FROM MAY 4, 1999
(COMMENCEMENT OF OPERATIONS)
TO JUNE 30, 1999
(UNAUDITED)
CONTENTS
Statement of Assets, Liabilities and Members' Capital........................ 1
Statement of Operations...................................................... 2
Statement of Changes in Members' Capital - Net Assets........................ 3
Notes to Financial Statements................................................ 4
Schedule of Portfolio Investments............................................11
Schedule of Securities Sold, Not Yet Purchased...............................15
<PAGE>
XANTHUS FUND, L.L.C.
STATEMENT OF ASSETS, LIABILITIES AND MEMBERS' CAPITAL (IN THOUSANDS)
- --------------------------------------------------------------------------------
JUNE 30, 1999
ASSETS (UNAUDITED)
Investments in securities, at market (identified cost - $78,271) $85,389
Due from broker 8,366
Dividends receivable 18
Interest receivable 23
Other assets 14
-------
TOTAL ASSETS 93,810
-------
LIABILITIES
Securities sold, not yet purchased,
at market (proceeds of sales - $6,285) 6,957
Dividends payable on securities sold,
not yet purchased 2
Syndication fees payable 50
Loan payable 13,135
Loan interest payable 56
Payable to affiliate 183
Management fee payable 56
Accrued expenses 73
-------
TOTAL LIABILITIES 20,512
-------
NET ASSETS $73,298
=======
MEMBERS' CAPITAL - NET ASSETS
Represented by:
Capital contributions
(net of syndication costs of $50) $67,910
Accumulated net investment loss (382)
Accumulated net realized loss on investments (676)
Accumulated net unrealized appreciation on
investments 6,446
-------
MEMBERS' CAPITAL - NET ASSETS $73,298
=======
The accompanying notes are an integral part of the financial statements.
-1-
<PAGE>
XANTHUS FUND, L.L.C.
STATEMENT OF OPERATIONS (IN THOUSANDS)
- --------------------------------------------------------------------------------
PERIOD FROM MAY 4, 1999
(COMMENCEMENT OF OPERATIONS)
TO JUNE 30, 1999
(UNAUDITED)
INVESTMENT INCOME
Interest $ 55
Dividends 30
------
85
------
EXPENSES
OPERATING EXPENSES:
Organizational expense 177
Administration fee 98
Professional fees 38
Investor servicing and accounting fees 27
Insurance expense 14
Custodian fees 6
Board of Managers' fees 6
Miscellaneous 4
------
TOTAL OPERATING EXPENSES 370
Interest expense 94
Dividends on securities sold, not yet purchased 3
------
TOTAL EXPENSES 467
------
NET INVESTMENT LOSS (382)
------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
REALIZED GAIN (LOSS) ON INVESTMENTS:
Investment securities 528
Purchased options (948)
Securities sold, not yet purchased (256)
------
NET REALIZED LOSS ON INVESTMENTS (676)
------
NET CHANGE IN UNREALIZED APPRECIATION ON INVESTMENTS 6,446
------
NET REALIZED AND UNREALIZED GAIN 5,770
------
INCREASE IN MEMBERS' CAPITAL DERIVED
FROM INVESTMENT ACTIVITIES $5,388
======
The accompanying notes are an integral part of the financial statements.
-2-
<PAGE>
XANTHUS FUND, L.L.C.
STATEMENT OF CHANGES IN MEMBERS' CAPITAL - NET ASSETS (IN THOUSANDS)
- --------------------------------------------------------------------------------
PERIOD FROM MAY 4, 1999
(COMMENCEMENT OF OPERATIONS)
TO JUNE 30, 1999
(UNAUDITED)
FROM INVESTMENT ACTIVITIES
Net investment loss $ (382)
Net realized loss on investments (676)
Net change in unrealized appreciation
on investments 6,446
-------
INCREASE IN MEMBERS' CAPITAL
DERIVED FROM INVESTMENT ACTIVITIES 5,388
MEMBERS' CAPITAL TRANSACTIONS
Capital contributions 67,960
Syndication costs (50)
-------
INCREASE IN MEMBERS' CAPITAL DERIVED
FROM CAPITAL TRANSACTIONS 67,910
MEMBERS' CAPITAL AT BEGINNING OF PERIOD 0
-------
MEMBERS' CAPITAL AT END OF PERIOD $73,298
=======
The accompanying notes are an integral part of the financial statements.
-3-
<PAGE>
XANTHUS FUND, L.L.C.
NOTES TO FINANCIAL STATEMENTS - JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
1. ORGANIZATION
Xanthus Fund, L.L.C. (the "Fund") was organized as a limited liability
company under the laws of Delaware in January 1999. The Fund is
registered under the Investment Company act of 1940 (the "Act") as a
closed-end, non-diversified management investment company. CIBC
Oppenheimer Advisors, L.L.C. (the "Adviser"), a Delaware limited
liability company, serves as the investment adviser to the Fund and is
responsible for the Fund's investment activities pursuant to an
investment advisory agreement. Responsibility for the overall
management and supervision of the operations of the Fund is vested in
the individuals who serve as the Board of Managers of the Fund (the
"Board of Managers").
The Fund's investment objective is to achieve maximum capital
appreciation. It pursues this objective by actively investing in a
portfolio consisting primarily of equity securities of technology
companies and of companies which derive a major portion of their
revenue directly or indirectly from technological events and advances.
The Fund's portfolio of securities in the technology area is expected
to include long and short positions primarily in equity securities of
U.S. and non-U.S. companies. Equity securities include common and
preferred stock and other securities having equity characteristics,
including convertible debt securities, stock options, warrants and
rights.
There are four members of the "Board of Managers" and an "Adviser."
CIBC Oppenheimer Advisers, L.L.C. serves as the investment adviser of
the Fund and is responsible for managing the Fund's investment
portfolio. CIBC World Markets Corp. (formerly CIBC Oppenheimer Corp.)
is the managing member and controlling person of the adviser.
The acceptance of initial and additional contributions is subject to
approval by the Board of Managers. The Fund may from time to time offer
to repurchase interests pursuant to written tenders by Members. Such
repurchases will be made at such times and on such terms as may be
determined by the Board of Managers, in their complete and exclusive
discretion. The Adviser expects that it will recommend to the Board of
Managers that the Fund offer to repurchase interests from Members at
the end of 1999. Thereafter, the Adviser expects that generally it will
recommend to the Board of Managers that the Fund offer to repurchase
interests from Members twice each year, effective at the end of the
second fiscal quarter and again at the end of the year.
2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in conformity with generally
accepted accounting principles requires the Adviser to make estimates
and assumptions that affect the amounts reported in the financial
statements and accompanying notes. The Adviser believes that the
estimates utilized in preparing the Fund's financial statements are
reasonable and prudent; however, actual results could differ from these
estimates.
-4-
<PAGE>
XANTHUS FUND, L.L.C.
NOTES TO FINANCIAL STATEMENTS - JUNE 30, 1999 (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
A. PORTFOLIO VALUATION (CONTINUED)
Securities transactions, including related revenue and expenses, are
recorded on a trade-date basis and dividends are recorded on an
ex-dividend date basis. Interest income is recorded on the accrual
basis.
Domestic exchange traded or NASDAQ listed equity securities will be
valued at their last composite sale prices as reported on the exchanges
where such securities are traded. If no sales of such securities are
reported on a particular day, the securities will be valued based upon
their composite bid prices for securities held long, or their composite
asked prices for securities held short, as reported by such exchanges.
Securities traded on a foreign securities exchange will be valued at
their last sale prices on the exchange where such securities are
primarily traded, or in the absence of a reported sale on a particular
day, at their bid prices (in the case of securities held long) or asked
prices (in the case of securities held short) as reported by such
exchange. Listed options will be valued at their bid prices (or asked
prices in the case of listed options held short) as reported by the
exchange with the highest volume on the last day a trade was reported.
Other securities for which market quotations are readily available will
be valued at their bid prices (or asked prices in the case of
securities held short) as obtained from one or more dealers making
markets for those securities. If market quotations are not readily
available, securities and other assets will be valued at fair value as
determined in good faith by, or under the supervision of, the Board of
Managers.
Debt securities (other than convertible debt securities) will be valued
in accordance with the procedures described above, which with respect
to such securities may include the use of valuations furnished by a
pricing service which employs a matrix to determine valuation for
normal institutional size trading units. The Board of Managers will
periodically monitor the reasonableness of valuations provided by any
such pricing service. Debt securities with remaining maturities of 60
days or less will, absent unusual circumstances, be valued at amortized
cost, so long as such valuation is determined by the Board of Managers
to represent fair value.
All assets and liabilities initially expressed in foreign currencies
will be converted into U.S. dollars using foreign exchange rates
provided by a pricing service compiled as of 4:00 p.m. London time.
Trading in foreign securities generally is completed, and the values of
such securities are determined, prior to the close of securities
markets in the U.S. Foreign exchange rates are also determined prior to
such close. On occasion, the values of such securities and exchange
rates may be affected by events occurring between the time such values
or exchange rates are determined and the time that the net asset value
of the Fund is determined. When such events materially affect the
values of securities held by the Fund or its liabilities, such
securities and liabilities will be valued at fair value as determined
in good faith by, or under the supervision of, the Board of Managers.
-5-
<PAGE>
XANTHUS FUND, L.L.C.
NOTES TO FINANCIAL STATEMENTS - JUNE 30, 1999 (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
B. INCOME TAXES
No provision for the payment of Federal, state or local income taxes on
the profits of the Partnership will be made. The Members are
individually liable for the income taxes on their share of the Fund's
income.
3. ADMINISTRATION FEE, RELATED PARTY TRANSACTIONS AND OTHER
CIBC World Markets Corp. ("CIBC WM") provides certain administrative
services to the Fund including, among other things, providing office
space and other support services to the Fund. In exchange for such
services, the Fund pays CIBC WM a monthly administration fee of .08333%
(1% on an annualized basis) of the Fund's net assets determined as of
the beginning of the month.
Payable to affiliate represents organizational expense and insurance
expense in the amounts of $168,104 and $14,476, respectively, paid on
behalf of the Fund by CIBC WM.
During the period ended June 30, 1999, CIBC WM earned $320 in brokerage
commissions from portfolio transactions executed on behalf of the Fund.
The Adviser of the Fund will serve as the Special Advisory Member of
the Fund. In such capacity, the Adviser will be entitled to receive an
incentive allocation (the "Incentive Allocation"), charged to the
capital account of each Member as of the last day of each allocation
period, of 20% of the amount by which net profits, if any, exceed the
positive balance in the Member's "loss recovery account." The Incentive
Allocation will be credited to the Special Advisory Account of the
Adviser.
Each Manager receives an annual retainer of $5,000 plus a fee for each
meeting attended. None of the Managers is or will be an "interested
person" of the Fund (as defined in the Act). All Managers are
reimbursed by the Fund for all reasonable out-of-pocket expenses
incurred by them in performing their duties. For the period ended June
30, 1999, fees (including meeting fees and a pro-rata annual retainer)
and expenses paid to the Managers totaled $20,638.
Chase Manhattan Bank serves as Custodian of the Fund's assets.
PFPC Inc. serves as Investor Services and Accounting Agent to the Fund,
and in that capacity provides certain accounting, recordkeeping, tax
and investor related services.
-6-
<PAGE>
XANTHUS FUND, L.L.C.
NOTES TO FINANCIAL STATEMENTS - JUNE 30, 1999 (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
4. SECURITIES TRANSACTIONS
Aggregate purchases and sales of investment securities, excluding
short-term securities, for the period from May 4, 1999 (commencement of
operations) to June 30, 1999, amounted to $82,629,469 and $7,995,739,
respectively.
At June 30, 1999, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes. At June 30, 1999, accumulated net unrealized appreciation on
investments was $6,446,271, consisting of $10,006,693 gross unrealized
appreciation and $3,560,422 gross unrealized depreciation.
Due from broker represents receivables and payables from unsettled
security trades and short sales.
5. SHORT-TERM BORROWINGS
The Fund has the ability to trade on margin and, in that connection,
borrow funds from brokers and banks for investment purposes. Trading in
equity securities on margin involves an initial cash requirement
representing at least 50% of the underlying security's value with
respect to transactions in U.S. markets and varying percentages with
respect to transactions in foreign markets. The Act requires the Fund
to satisfy an asset coverage requirement of 300% of its indebtedness,
including amounts borrowed, measured at the time the Fund incurs the
indebtedness. The Fund pays interest on outstanding margin borrowings
at an annualized rate of LIBOR plus .875%. The Fund pledges securities
as collateral for the margin borrowings, which are maintained in a
segregated account held by the Custodian. As of June 30, 1999, the Fund
had outstanding margin borrowings of $13,134,911. For the period ended
June 30, 1999, the average daily amount of such borrowings was
$9,481,158.
6. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK OR
CONCENTRATIONS OF CREDIT RISK
In the normal course of business, the Fund may trade various financial
instruments and enter into various investment activities with
off-balance sheet risk. These financial instruments include forward
contracts, options and securities sold, not yet purchased. Generally,
these financial instruments represent future commitments to purchase or
sell other financial instruments at specific terms at specified future
dates. Each of these financial instruments contains varying degrees of
off-balance sheet risk whereby changes in the market value of the
securities underlying the financial instruments may be in excess of the
amounts recognized in the Statement of Assets, Liabilities and Members'
capital.
-7-
<PAGE>
XANTHUS FUND, L.L.C.
NOTES TO FINANCIAL STATEMENTS - JUNE 30, 1999 (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
6. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK OR
CONCENTRATIONS OF CREDIT RISK (CONTINUED)
The Fund maintains cash in bank deposit accounts, which at times may
exceed federally insured limits. The Fund has not experienced any
losses in such accounts and does not believe it is exposed to any
significant credit risk on cash.
Securities sold, not yet purchased represent obligations of the Fund to
deliver specified securities and thereby creates a liability to
purchase such securities in the market at prevailing prices.
Accordingly, these transactions result in off-balance sheet risk as the
Fund's ultimate obligation to satisfy the sale of securities sold, not
yet purchased may exceed the amount indicated in the Statement of
Assets, Liabilities and Members' capital.
The risk associated with purchasing an option is that the Fund pays a
premium whether or not the option is exercised. Additionally, the Fund
bears the risk of loss of premium and change in market value should the
counterparty not perform under the contract. Put and call options
purchased are accounted for in the same manner as investment
securities.
Transactions in purchased options were as follows:
PUT OPTIONS
---------------------------
NUMBER
OF CONTRACTS COST
------------ -----------
Beginning balance 0 $ 0
Options purchased 878 5,364,234
Options closed (295) (1,750,435)
Expired options (200) ( 504,350)
----- -----------
Options outstanding at June 30, 1999 383 $ 3,109,449
===== ===========
7. FINANCIAL INSTRUMENTS HELD OR ISSUED FOR TRADING PURPOSES
The Fund maintains positions in a variety of financial instruments. The
following table summarizes the components of net realized and unrealized
gains from investment transactions:
NET GAINS
FOR THE PERIOD ENDED
JUNE 30, 1999
--------------------
Equity securities $ 8,104,846
Equity options ( 14,811)
Index options ( 2,319,803)
---------------
Total $ 5,770,232
===============
-8-
<PAGE>
XANTHUS FUND, L.L.C.
NOTES TO FINANCIAL STATEMENTS - JUNE 30, 1999 (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
7. FINANCIAL INSTRUMENTS HELD OR ISSUED FOR TRADING PURPOSES (CONTINUED)
The following table presents the market values of derivative financial
instruments and the average market values of those instruments:
AVERAGE MARKET VALUE
FOR THE PERIOD ENDED
JUNE 30, 1999
--------------------
ASSETS:
Index options $1,511,300
Average market values presented above are based upon month-end market
values during the period ended June 30, 1999.
8. SELECTED FINANCIAL RATIOS AND OTHER SUPPLEMENTAL INFORMATION
The following represents the ratios to average net assets and other
supplemental information for the period indicated:
MAY 4, 1999
(COMMENCEMENT OF
OPERATIONS) TO
JUNE 30, 1999
----------------
Ratio of net investment loss to average net assets (3.94%)*
Ratio of operating expenses to average net assets 3.82% *
Ratio of interest expense to average net assets 0.97% *
Ratio of dividends on securities sold, not yet
purchased to average net assets 0.03% *
Portfolio turnover rate 11%
Average commission rate paid $0.0591**
Total return 7.73% ***
* Annualized.
** Average commission rate paid on purchases and sales of
investment securities held long.
*** Total return assumes a purchase of an interest in the Fund on
the first day and a sale of the interest
on the last day of the period noted, before incentive
allocation to the Special Advisory Member, if any. Total
returns for a period of less than a full year are not
annualized.
-9-
<PAGE>
XANTHUS FUND, L.L.C.
NOTES TO FINANCIAL STATEMENTS - JUNE 30, 1999 (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
9. YEAR 2000
Like other investment companies and financial and business
organizations around the world, the Fund could be adversely affected if
the computer systems it uses and those used by the Fund's brokers and
other major service providers do not properly process and calculate
date-related information and data from and after January 1, 2000. This
is commonly known as the "Year 2000 Issue."
The Fund has assessed its computer systems and the systems compliance
issues of its brokers and other major service providers. The Fund has
taken steps that it believes are reasonably designed to address the
Year 2000 Issue with respect to the computer systems it uses and has
obtained satisfactory assurances that comparable steps are being taken
by its brokers and other major service providers. At this time,
however, there can be no assurance that these steps will be sufficient
to address all Year 2000 Issues.
The inability of the Fund or its third party providers to timely
complete all necessary procedures to address the Year 2000 Issue could
have a material adverse effect on the Fund's operations. Management
will continue to monitor the status of and its exposure to this issue.
For the period ended June 30, 1999, the Fund incurred no Year 2000
related expenses, and it does not expect to incur significant Year 2000
expenses in the future.
The Fund intends to develop contingency plans designed to ensure that
third party non-compliance will not materially affect the Fund's
operations.
-10-
<PAGE>
XANTHUS FUND, L.L.C.
SCHEDULE OF PORTFOLIO INVESTMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
JUNE 30, 1999
SHARES MARKET VALUE
COMMON STOCKS - 114.14%
APPLICATIONS SOFTWARE - 4.47%
23,200 Intuit, Inc.* $2,090,900
68,900 PeopleSoft, Inc.* 1,188,525
----------
3,279,425
----------
BROADCASTING SERVICES/PROGRAMMING - 3.76%
35,580 AT&T Corp. - Liberty Media Group, Class A* (a) 1,271,550
7,600 Fox Entertainment Group, Inc., Class A* 204,729
18,900 United International Holdings, Inc., Class A* 1,278,113
----------
2,754,392
----------
CABLE TV - 2.69%
40,400 Comcast Corp., Special Class A* (a) 1,552,895
8,500 Jones Intercable, Inc., Class A* 416,500
----------
1,969,395
----------
CATALOG AND MAIL ORDER HOUSES - 1.27%
23,200 USA Networks, Inc.* 930,900
----------
CELLULAR TELECOMMUNICATIONS - 2.37%
23,600 Nextel Communications, Inc., Class A * 1,184,437
11,400 WinStar Communications, Inc.* 555,750
----------
1,740,187
----------
COMPUTER SERVICES - 5.18%
20,000 Computer Sciences Corp.* 1,383,760
30,700 Electronic Data Systems Corp. (a) 1,738,387
10,700 Safeguard Scientifics, Inc.* 674,100
----------
3,796,247
----------
COMPUTER SOFTWARE - 11.75%
27,288 Computer Associates International, Inc. (a) 1,494,018
11,400 Compuware Corp.* 362,663
37,300 Microsoft Corp.* (a) 3,364,012
62,800 Oracle Corp.* (a) 2,331,450
76,400 Parametric Technology Corp.* 1,060,050
----------
8,612,193
----------
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
XANTHUS FUND, L.L.C.
SCHEDULE OF PORTFOLIO INVESTMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
JUNE 30, 1999
SHARES MARKET VALUE
COMMON STOCKS - (CONTINUED)
COMPUTERS - MEMORY DEVICES - 4.09%
33,600 EMC Corp.* (a) $1,848,000
44,900 Seagate Technology, Inc.* (a) 1,150,562
----------
2,998,562
----------
COMPUTERS - MICRO - 11.97%
35,600 Compaq Computers Corp. 843,293
29,600 Dell Computer Corp.* (a) 1,095,200
21,700 Hewlett-Packard Co. 2,180,850
17,400 International Business Machines Corp. 2,248,950
34,900 Sun Microsystems, Inc.* (a) 2,403,738
----------
8,772,031
----------
DATA PROCESSING/MANAGEMENT - 5.14%
37,000 Automatic Data Processing, Inc. 1,628,000
43,700 First Data Corp.* (a) 2,138,591
----------
3,766,591
----------
ELECTRONIC COMPONENTS - MISCELLANEOUS - 2.46%
27,000 Solectron Corp.* (a) 1,800,576
----------
ELECTRONIC COMPONENTS - SEMICONDUCTORS - 16.67%
31,100 Intel Corp. (a) 1,850,450
26,700 Micron Technology, Inc. 1,081,350
21,600 Motorola, Inc. 2,046,600
25,800 STMicroelectronics N.V. (a) 1,788,275
17,800 Texas Instruments, Inc. 2,563,200
7,600 TranSwitch Corp.* 360,050
44,200 Xilinx, Inc.* (a) 2,530,450
----------
12,220,375
----------
ENTERTAINMENT SOFTWARE - 2.39%
32,300 Electronic Arts, Inc.* (a) 1,752,275
----------
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
XANTHUS FUND, L.L.C.
SCHEDULE OF PORTFOLIO INVESTMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
JUNE 30, 1999
SHARES MARKET VALUE
COMMON STOCKS - (CONTINUED)
INTERNET CONTENT - 3.36%
3,800 At Home Corp., Series A* $ 204,964
13,100 Yahoo!, Inc.* 2,256,475
----------
2,461,439
----------
INTERNET SOFTWARE - 3.84%
25,600 America Online, Inc.* (a) 2,816,000
----------
MACHINERY - GENERAL INDUSTRIAL - 2.32%
23,000 Applied Materials, Inc.* (a) 1,699,125
----------
MULTIMEDIA - 1.59%
16,000 Time Warner, Inc. 1,162,000
----------
NETWORKING PRODUCTS - 5.39%
48,800 Cisco Systems, Inc.* (a) 3,144,574
30,200 3Com Corp.* 805,978
----------
3,950,552
----------
PIPELINES - 0.52%
9,000 Williams Companies, Inc. 383,067
----------
RETAIL - INTERNET - 2.39%
14,000 Amazon.com, Inc.* (a) 1,751,750
----------
SATELLITE TELECOMMUNICATIONS - 0.69%
9,000 General Motors Corp., Class H 506,817
----------
TELECOMMUNICATIONS EQUIPMENT - 13.15%
11,900 ADC Telecommunications, Inc.* 542,200
13,300 ANTEC Corp.* 426,438
5,700 General Instrument Corp.* 242,250
32,145 Lucent Technologies, Inc. (a) 2,167,794
8,900 Nokia Corp. - Sponsored ADR 814,911
30,700 Nortel Networks Corp. (a) 2,665,159
41,200 Tellabs, Inc.* (a) 2,783,596
----------
9,642,348
----------
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
XANTHUS FUND, L.L.C.
SCHEDULE OF PORTFOLIO INVESTMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
JUNE 30, 1999
SHARES MARKET VALUE
COMMON STOCKS - (CONTINUED)
TELECOMMUNICATIONS SERVICES - 2.12%
5,500 Global TeleSystems Group, Inc.* $ 445,500
19,600 Inet Technologies, Inc.* 470,400
7,400 NTL, Inc.* 637,791
-----------
1,553,691
-----------
TELEPHONE - INTEGRATED - 2.02%
26,560 AT&T Corp. (a) 1,482,393
-----------
TELEPHONE - LONG DISTANCE - 2.54%
15,000 MCI WorldCom, Inc.* 1,290,945
10,200 Viatel, Inc.* 572,475
-----------
1,863,420
-----------
TOTAL COMMON STOCKS (COST $75,161,493) 83,665,751
===========
NUMBER OF
CONTRACTS
PUT OPTIONS - 2.35%
INDEX - 2.35%
250 Morgan Stanley High Tech Index, 07/17/99, $980.00 47,299
133 Nasdaq-100 Index, 09/18/99, $2,280.00 1,675,800
-----------
1,723,099
-----------
TOTAL PUT OPTIONS (COST $3,109,449) 1,723,099
===========
TOTAL INVESTMENTS (COST $78,270,942) - 116.49% 85,388,850
-----------
OTHER ASSETS, LESS LIABILITIES - (16.49%) (12,090,714)
-----------
NET ASSETS - 100.00% $73,298,136
===========
* Non-income producing security.
(a) Partially or wholly held in a pledged account by the custodian for
securities sold, not yet purchased.
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
XANTHUS FUND, L.L.C.
SCHEDULE OF SECURITIES SOLD, NOT YET PURCHASED (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
JUNE 30, 1999
SHARES MARKET VALUE
SHORT COMMON STOCK - (9.49%)
APPLICATIONS SOFTWARE - (0.94%)
5,000 Great Plains Software, Inc. $(235,940)
6,500 Peregrine Systems, Inc. (166,972)
4,300 Siebel Systems, Inc. (285,146)
---------
(688,058)
---------
CIRCUIT BOARDS - (0.47%)
4,500 Sanmina Corp. (341,437)
---------
COMMERCIAL SERVICES - FINANCE - (0.33%)
7,650 Paychex, Inc. (243,844)
---------
COMPUTER DATA SECURITY - (0.31%)
6,000 ISS Group, Inc. (226,500)
---------
COMPUTER GRAPHICS - (0.39%)
5,000 Visio Corp. (190,315)
6,100 3Dfx Interactive, Inc. (95,313)
---------
(285,628)
---------
COMPUTER SERVICES - (0.50%)
5,000 Ceridian Corp. (163,440)
3,600 Sapient Corp. (203,850)
---------
(367,290)
---------
COMPUTER SOFTWARE - (0.43%)
2,500 SCM Microsystems, Inc. (115,937)
5,100 Transaction Systems Architects, Inc., Class A (198,900)
---------
(314,837)
---------
DATA PROCESSING/MANAGEMENT - (0.66%)
5,500 Acxiom Corp. (137,159)
5,500 Fiserv, Inc. (172,222)
4,800 Sterling Commerce, Inc. (176,400)
---------
(485,781)
---------
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
XANTHUS FUND, L.L.C.
SCHEDULE OF SECURITIES SOLD, NOT YET PURCHASED(UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
JUNE 30, 1999
SHARES MARKET VALUE
SHORT COMMON STOCK - (CONTINUED)
DISTRIBUTION - WHOLESALE - (0.39%)
5,500 Ingram Micro, Inc., Class A $(141,625)
3,800 Tech Data Corp. (145,350)
----------
(286,975)
----------
ELECTRONIC COMPONENTS - SEMICONDUCTORS - (0 .79%)
5,000 Dallas Semiconductor Corp. (253,750)
5,200 Lattice Semiconductor Corp. (323,700)
----------
(577,450)
----------
ELECTRONIC PARTS DISTRIBUTION - (0.26%)
4,180 Avnet, Inc. (194,370)
----------
INSTRUMENTS - SCIENTIFIC - (0.38%)
2,400 PE Corp - PE Biosystems Group (275,400)
----------
INTERNET SOFTWARE - (0.13%)
3,800 Prodigy Communications Corp. (98,325)
----------
LINEN SUPPLY & RELATED ITEMS - (0.36%)
3,900 Cintas Corp. (262,033)
----------
MEDICAL INFORMATION SYSTEMS - (0.36%)
4,000 Shared Medical Systems Corp. (261,000)
----------
MEDICAL INSTRUMENTS - (0.24%)
4,000 Boston Scientific Corp. (175,752)
----------
MEDICAL - BIOMEDICAL/GENE - (0.03%)
1,200 Celera Genomics (19,426)
----------
MEDICAL - WHOLESALE DRUG DISTRIBUTION - (0.41%)
4,700 Cardinal Health, Inc. (301,387)
----------
NETWORKING PRODUCTS - (0.23%)
4,200 International Network Services (169,575)
----------
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
XANTHUS FUND, L.L.C.
SCHEDULE OF SECURITIES SOLD, NOT YET PURCHASED(UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
JUNE 30, 1999
SHARES MARKET VALUE
SHORT COMMON STOCK - (CONTINUED)
OFFICE AUTOMATION & EQUIPMENT - (0.34%)
3,900 Pitney Bowes, Inc. $ (250,575)
-----------
RETAIL - BUILDING PRODUCTS - (0.23%)
3,200 Fastenal Co. (167,802)
-----------
RETAIL - CONSUMER ELECTRONICS - (0.95%)
5,600 Best Buy Co., Inc. (378,000)
3,420 Circuit City Stores-Circuit City Group (318,060)
-----------
(696,060)
-----------
TELECOMMUNICATIONS EQUIPMENT - (0.36%)
4,100 Plantronics, Inc. (267,012)
-----------
TOTAL SHORT COMMON STOCK (PROCEEDS $6,284,880) $(6,956,517)
===========
The accompanying notes are an integral part of the financial statements.
17
