XANTHUS FUND, L.L.C.
FINANCIAL STATEMENTS
PERIOD FROM MAY 4, 1999
(COMMENCEMENT OF OPERATIONS)
TO DECEMBER 31, 1999
<PAGE>
XANTHUS FUND, L.L.C.
FINANCIAL STATEMENTS
PERIOD FROM MAY 4, 1999
(COMMENCEMENT OF OPERATIONS)
TO DECEMBER 31, 1999
CONTENTS
Report of Independent Auditors............................................ 1
Statement of Assets, Liabilities and Members' Capital..................... 2
Statement of Operations................................................... 3
Statement of Changes in Members' Capital - Net Assets..................... 4
Statement of Cash Flows ................................................. 5
Notes to Financial Statements............................................. 6
Schedule of Portfolio Investments......................................... 13
Schedule of Securities Sold, Not Yet Purchased............................ 19
<PAGE>
Report of Independent Auditors
To the Members of
Xanthus Fund, L.L.C.
We have audited the accompanying statement of assets, liabilities and members'
capital of Xanthus Fund, L.L.C. (the "Company"), including the schedules of
portfolio investments and securities sold, not yet purchased as of December 31,
1999, and the related statements of operations and changes in members'
capital--net assets for the period from May 4, 1999 (commencement of operations)
to December 31, 1999. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements 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 December 31, 1999, by
correspondence with the custodian and broker. 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Xanthus Fund, L.L.C. at
December 31, 1999, and the results of its operations, and changes in its
members' capital--net assets for the period from May 4, 1999 to December 31,
1999, in conformity with accounting principles generally accepted in the United
States.
February 11, 2000
-1-
<PAGE>
XANTHUS FUND, L.L.C.
STATEMENT OF ASSETS, LIABILITIES AND MEMBERS' CAPITAL (IN THOUSANDS)
- --------------------------------------------------------------------------------
DECEMBER 31, 1999
ASSETS
Cash $ 6,415
Investments in securities, at market (cost - $155,402) 231,545
Due from broker 37,257
Interest receivable 153
Dividends receivable 8
Other assets 95
--------
TOTAL ASSETS 275,473
--------
LIABILITIES
Securities sold, not yet purchased, at market (proceeds - $27,321) 28,432
Withdrawals payable 3,179
Dividends payable on securities sold, not yet purchased 9
Syndication fees payable 17
Loan payable 55,479
Loan interest payable 270
Payable to affiliate 170
Management fee payable 127
Accrued expenses 115
--------
TOTAL LIABILITIES 87,798
--------
NET ASSETS $187,675
========
MEMBERS' CAPITAL
Represented by:
Capital contributions - (net of syndication costs of $50) $114,973
Capital withdrawals (3,179)
Accumulated net investment loss (1,686)
Accumulated net realized gain on investments 2,535
Accumulated net unrealized appreciation on investments 75,032
--------
MEMBERS' CAPITAL - NET ASSETS $187,675
========
The accompanying notes are an integral part of these financial statements.
-2-
<PAGE>
XANTHUS FUND, L.L.C.
STATEMENT OF OPERATIONS (IN THOUSANDS)
- --------------------------------------------------------------------------------
PERIOD FROM MAY 4, 1999
(COMMENCEMENT OF OPERATIONS)
TO DECEMBER 31, 1999
INVESTMENT INCOME
Interest $ 454
Dividends 76
-------
530
-------
EXPENSES
OPERATING EXPENSES:
Administration fee 605
Organizational expenses 177
Professional fees 147
Accounting and investor services fee 132
Insurance expense 75
Custodian fees 36
Board of Managers' fees and expenses 27
Miscellaneous 18
TOTAL OPERATING EXPENSES 1,217
-------
Interest expense 964
Dividends on securities sold, not yet purchased 35
-------
TOTAL EXPENSES 2,216
-------
NET INVESTMENT LOSS (1,686)
-------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
REALIZED GAIN (LOSS) ON INVESTMENTS:
Investment securities 33,074
Purchased options (21,195)
Securities sold, not yet purchased (9,344)
-------
NET REALIZED GAIN ON INVESTMENTS 2,535
NET CHANGE IN UNREALIZED APPRECIATION ON INVESTMENTS 75,032
-------
NET REALIZED AND UNREALIZED GAIN 77,567
-------
INCREASE IN MEMBERS' CAPITAL DERIVED FROM
INVESTMENT ACTIVITIES $75,881
=======
The accompanying notes are an integral part of these financial statements.
-3-
<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 DECEMBER 31, 1999
FROM INVESTMENT ACTIVITIES
Net investment loss $ (1,686)
Net realized gain on investments 2,535
Net change in unrealized appreciation on investments 75,032
--------
INCREASE IN MEMBERS' CAPITAL DERIVED
FROM INVESTMENT ACTIVITIES 75,881
MEMBERS' CAPITAL TRANSACTIONS
Capital contributions 115,023
Capital withdrawals (3,179)
Syndication costs (50)
--------
INCREASE IN MEMBERS' CAPITAL
DERIVED FROM CAPITAL TRANSACTIONS 111,794
MEMBERS' CAPITAL AT BEGINNING OF PERIOD -
MEMBERS' CAPITAL AT END OF PERIOD $187,675
========
The accompanying notes are an integral part of these financial statements.
-4-
<PAGE>
XANTHUS FUND, L.L.C.
STATEMENT OF CASH FLOWS (IN THOUSANDS)
- --------------------------------------------------------------------------------
PERIOD FROM MAY 4, 1999
(COMMENCEMENT OF OPERATIONS)
TO DECEMBER 31, 1999
CASH FLOWS FROM OPERATING ACTIVITIES
Increase in Members' capital derived from investment activities $ 75,881
Adjustments to reconcile net increase in Members' capital derived
from investment activities to net cash used in operating activities:
Increase in due from broker (37,257)
Increase in investments in securities (155,402)
Increase in dividends receivable (8)
Increase in interest receivable (153)
Increase in other assets (95)
Increase in securities sold, not yet purchased 27,321
Increase in withdrawals payable 3,179
Increase in dividends payable on securities sold, not yet purchased 9
Increase in syndication fees payable 17
Increase in payable to affiliate 170
Increase in management fee payable 127
Increase in accrued expenses 115
Net increase in unrealized gains (75,032)
--------
NET CASH USED IN OPERATING ACTIVITIES (161,128)
CASH FLOWS FROM FINANCING ACTIVITIES
Capital contributions - (net of syndication costs of $50) 114,973
Capital withdrawals (3,179)
--------
NET CASH PROVIDED BY FINANCING ACTIVITIES 111,794
CASH FLOWS FROM INVESTING ACTIVITIES
Increase in loan payable 55,479
Increase in loan interest payable 270
--------
NET CASH PROVIDED BY INVESTING ACTIVITIES 55,749
NET CHANGE IN CASH 6,415
Cash at beginning of period -
Cash at end of period $ 6,415
========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
CASH PAID DURING THE PERIOD FOR INTEREST $ 694
========
The accompanying notes are an integral part of these financial statements.
-5-
<PAGE>
XANTHUS FUND, L.L.C.
NOTES TO FINANCIAL STATEMENTS - DECEMBER 31, 1999
- --------------------------------------------------------------------------------
1. ORGANIZATION
Xanthus Fund, L.L.C. (the "Company") was organized as a limited
liability company under the laws of Delaware in January 1999. The
Company is registered under the Investment Company Act of 1940 (the
"Act") as a closed-end, non-diversified management investment company.
The Company's term is perpetual unless the Company is otherwise
terminated under the terms of the Limited Liability Company Agreement
dated as of February 10, 1999. The Company'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 Company'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.
Responsibility for the overall management and supervision of the
operations of the Company is vested in the individuals who serve as the
Board of Managers of the Company ("Board of Managers"). There are four
members of the "Board of Managers" and an "Adviser." CIBC Oppenheimer
Advisors, L.L.C. (the "Adviser"), a Delaware limited liability company,
serves as the investment adviser to the Company and is responsible for
managing the Company's investment activities pursuant to an investment
advisory agreement. CIBC World Markets Corp. ("CIBC WM") (formerly CIBC
Oppenheimer Corp.) is the managing member and controlling person of the
Adviser.
The acceptance of initial and additional capital contributions from
Members is subject to approval by the Board of Managers. The Company
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 generally
it will recommend to the Board of Managers that the Company 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 Company's financial statements are
reasonable and prudent; however, actual results could differ from these
estimates.
-6-
<PAGE>
XANTHUS FUND, L.L.C.
NOTES TO FINANCIAL STATEMENTS - DECEMBER 31, 1999 (CONTINUED)
- --------------------------------------------------------------------------------
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
A. PORTFOLIO VALUATION
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 sold 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 sold short) as reported by such
exchange. Listed options will be valued at their bid prices (or asked
prices in the case of listed options sold 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 sold 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 Company is determined. When such events materially affect the
values of securities held by the Company 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.
-7-
<PAGE>
XANTHUS FUND, L.L.C.
NOTES TO FINANCIAL STATEMENTS - DECEMBER 31, 1999 (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 Company have been made. The Members are individually
liable for their share of the Company's income.
3. ADMINISTRATION FEE, RELATED PARTY TRANSACTIONS AND OTHER
CIBC WM provides certain administrative services to the Company
including, among other things, providing office space and other support
services. In exchange for such services, the Company pays CIBC WM a
monthly administration fee of .08333% (1% on an annualized basis) of
the Company's net assets determined as of the beginning of the month.
Payable to affiliate represents insurance premiums paid in the amount
of $170,060 paid on behalf of the Company by CIBC WM.
During the period ended December 31, 1999, CIBC WM earned $2,173 in
brokerage commissions from portfolio transactions executed on behalf of
the Company.
The Adviser will serve as the Special Advisory Member of the Company.
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. During the
period ended December 31, 1999, the Incentive Allocation to the Adviser
was $15,166,237.
Each member of the Board of Managers ("Manager") who is not an
"interested person" of the Company, as defined by the Act, receives an
annual retainer of $5,000 plus a fee for each meeting attended.
Currently, no Manager is an "interested person" of the Company. All
Managers are reimbursed by the Company for all reasonable out-of-pocket
expenses incurred by them in performing their duties. For the period
ended December 31, 1999, fees (including meeting fees and a pro-rata
annual retainer) and expense paid to the Managers totaled $26,538.
The Chase Manhattan Bank serves as custodian of the Company's assets.
PFPC Inc. serves as Investor Services and Accounting Agent to the
Company, and, in that capacity, provides certain accounting,
recordkeeping, tax and investor related services.
-8-
<PAGE>
XANTHUS FUND, L.L.C.
NOTES TO FINANCIAL STATEMENTS - DECEMBER 31, 1999 (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 December 31, 1999, amounted to $279,496,788 and
$166,931,380, respectively.
At December 31, 1999, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes. At December 31, 1999, accumulated net unrealized appreciation
on investments was $75,031,693, consisting of $77,773,105 gross
unrealized appreciation and $2,741,412 gross unrealized depreciation.
Due from broker represents receivables and payables from unsettled
security trades and proceeds from securities sold, not yet purchased.
5. SHORT-TERM BORROWINGS
The Company 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
Company to satisfy an asset coverage requirement of 300% of its
indebtedness, including amounts borrowed, measured at the time the
Company incurs the indebtedness. The Company pays interest on
outstanding margin borrowings at an annualized rate of LIBOR plus
0.875%. The Company pledges securities as collateral for the margin
borrowings, which are maintained in a segregated account held by the
Custodian. As of December 31, 1999, the Company had outstanding margin
borrowings of $55,479,476. For the period ended December 31, 1999, the
average daily amount of such borrowings was $21,427,015.
6. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK OR
CONCENTRATIONS OF CREDIT RISK
In the normal course of business, the Company 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 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.
-9-
<PAGE>
XANTHUS FUND, L.L.C.
NOTES TO FINANCIAL STATEMENTS - DECEMBER 31, 1999 (CONTINUED)
- --------------------------------------------------------------------------------
6. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK OR
CONCENTRATIONS OF CREDIT RISK (CONTINUED)
The Company maintains cash in bank deposit accounts, which at times may
exceed federally insured limits. The Company 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 Company
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
Company'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 Company pays
a premium whether or not the option is exercised. Additionally, the
Company 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 - $ -
Options purchased 4,635 38,442,578
Options closed (2,553) (25,454,619)
Options split 86 -
Options expired (1,738) (3,225,669)
------ -----------
Options outstanding at December 31, 1999 430 $ 9,762,290
====== ===========
There were no transactions in written options during the period ended
December 31, 1999.
-10-
<PAGE>
XANTHUS FUND, L.L.C.
NOTES TO FINANCIAL STATEMENTS - DECEMBER 31, 1999 (CONTINUED)
- --------------------------------------------------------------------------------
7. FINANCIAL INSTRUMENTS HELD OR ISSUED FOR TRADING PURPOSES
The Company 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/(LOSSES)
FOR THE PERIOD ENDED
DECEMBER 31, 1999
Equity securities $ 98,691,002
Equity options (1,388,402)
Equity index options (19,735,205)
------------
$ 77,567,395
============
The following table presents the market values of derivative financial
instruments and the average market values of those instruments:
AVERAGE MARKET VALUE
MARKET VALUE AT FOR THE PERIOD ENDED
DECEMBER 31, 1999 DECEMBER 31, 1999
----------------- -----------------
ASSETS:
Equity options $ - $ 192,811
Equity Index options 9,833,025 4,641,871
Average market values presented above are based upon month-end market
values during the period ended December 31, 1999.
-11-
<PAGE>
XANTHUS FUND, L.L.C.
NOTES TO FINANCIAL STATEMENTS - DECEMBER 31, 1999 (CONTINUED)
- --------------------------------------------------------------------------------
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
DECEMBER 31, 1999
Ratio of net investment loss to average net assets (2.67%)*
Ratio of operating expenses to average net assets 1.92%*
Ratio of interest expense to average net assets 1.52%*
Ratio of dividends on securities sold, not yet
purchased to average net assets 0.06%*
Portfolio turnover 143.30%
Total return ** 79.07%
Average debt ratio 22.46%
* Annualized.
** Total return assumes a purchase of an interest in the Company
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. SUBSEQUENT EVENT
On January 1, 2000 the Company received initial and additional capital
contributions from Members of approximately $56,010,000.
-12-
<PAGE>
XANTHUS FUND, L.L.C.
SCHEDULE OF PORTFOLIO INVESTMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1999
SHARES MARKET VALUE
COMMON STOCK - 118.14%
APPLICATIONS SOFTWARE - 1.94%
1,000 Intertrust Technologies Corp.* $ 117,625
58,656 Intuit, Inc.* 3,515,723
----------
3,633,348
----------
BROADCASTING SERVICES/PROGRAMMING - 2.85%
94,000 AT&T Corp. - Liberty Media Group, Class A* 5,340,422
----------
CABLE TV - 0.63%
23,500 Comcast Corp., Special Class A* 1,188,230
----------
CELLULAR TELECOMMUNICATIONS - 2.76%
30,796 Nextel Communications, Inc., Class A * (a) 3,175,838
14,100 VoiceStream Wireless Corp.* 2,006,606
----------
5,182,444
----------
CIRCUITS - 3.61%
72,800 Analog Devices, Inc.* (a) 6,770,400
----------
COMMERCIAL SERVICES - 0.02%
1,000 Wireless Facilities, Inc.* 43,625
----------
COMPUTER SERVICES - 1.09%
30,684 Electronic Data Systems Corp. (a) 2,053,926
----------
COMPUTER SOFTWARE - 8.37%
14,100 Business Objects SA, Sponsored ADR* 1,884,112
39,300 Computer Associates International, Inc. (a) 2,748,563
645 Micromuse, Inc.* 109,650
64,852 Microsoft Corp.* (a) 7,571,471
5,000 Mission Critical Software, Inc.* 350,000
1,000 NetIQ Corp.* 52,063
66,500 Parametric Technology Corp.* (a) 1,799,690
1,000 VA Linux Systems, Inc.* 206,625
27,000 Wind River Systems, Inc.* 988,875
----------
15,711,049
----------
The accompanying notes are an integral part of these financial statements.
-13-
<PAGE>
XANTHUS FUND, L.L.C.
SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
DECEMBER 31, 1999
MARKET VALUE
SHARES
COMMON STOCK - (CONTINUED)
COMPUTERS - INTEGRATED SYSTEMS - 1.11%
11,700 Redback Networks, Inc.* $ 2,076,750
-----------
COMPUTERS - MEMORY DEVICES - 5.75%
36,372 EMC Corp.* 3,973,641
1,290 SanDisk Corp.* 124,162
58,176 Seagate Technology, Inc.* (a) 2,708,849
27,860 VERITAS Software Corp.* (a) 3,987,463
-----------
10,794,115
-----------
COMPUTERS - MICRO - 5.08%
59,702 Dell Computer Corp.* (a) 3,044,802
1 Hewlett-Packard Co. 114
83,784 Sun Microsystems, Inc.* (a) 6,488,065
-----------
9,532,981
-----------
CONSULTING SERVICES - 0.93%
47,000 Comdisco, Inc. 1,750,750
-----------
DISTRIBUTION - WHOLESALE - 0.06%
4,316 Tech Data Corp.* 117,071
-----------
DIVERSIFIED MANUFACTURING OPERATIONS - 3.23%
47,000 Corning, Inc. (a) 6,060,086
-----------
ELECTRONIC COMPONENTS - MISCELLANEOUS - 1.27%
24,966 Solectron Corp.* (a) 2,374,891
-----------
ELECTRONIC COMPONENTS - SEMICONDUCTORS - 22.68%
25,494 Applied Materials, Inc.* 3,229,784
8,600 ASM International, N.V.* 197,800
56,400 Atmel Corp.* (a) 1,667,353
17,150 Broadcom Corp., Class A (a) 4,671,231
56,852 Conexant Systems, Inc.* (a) 3,773,552
The accompanying notes are an integral part of these financial statements.
-14-
<PAGE>
XANTHUS FUND, L.L.C.
SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
DECEMBER 31, 1999
MARKET VALUE
SHARES
COMMON STOCK - (CONTINUED)
ELECTRONIC COMPONENTS
- SEMICONDUCTORS (CONTINUED)
13,700 Cree Research, Inc.* $ 1,169,637
14,100 EMCORE Corp.* 479,400
61,630 Intel Corp. (a) 5,072,950
38,052 Micron Technology, Inc. 2,958,543
14,100 Novellus Systems, Inc. 1,727,687
17,200 SDL, Inc.* (a) 3,749,600
8,600 Silicon Valley Group, Inc.* 152,650
24,712 STMicroelectronics, N.V. (a) 3,742,336
37,750 Texas Instruments, Inc. (a) 3,647,594
25,420 TriQuint Semiconductor, Inc.* 2,827,975
77,168 Xilinx, Inc.* (a) 3,508,752
-----------
42,576,844
-----------
ENTERPRISE SOFTWARE/SERVICES - 8.20%
39,000 BEA Systems, Inc.* 2,727,582
22,700 Compuware Corp.* 845,575
16,500 i2 Technologies, Inc.* (a) 3,217,500
65,408 Oracle Corp.* (a) 7,329,817
59,500 PeopleSoft, Inc.* 1,268,123
-----------
15,388,597
-----------
ENTERTAINMENT SOFTWARE - 1.59%
35,568 Electronic Arts, Inc.* (a) 2,987,712
-----------
FIBER OPTICS - 4.90%
32,900 Harmonic, Inc.* (a) 3,123,460
24,520 JDS Uniphase Corp.* (a) 3,955,395
17,600 Ortel Corp.* (a) 2,112,000
-----------
9,190,855
-----------
INSURANCE BROKERS - 0.03%
2,500 InsWeb Corp.* 63,908
-----------
The accompanying notes are an integral part of these financial statements.
-15-
<PAGE>
XANTHUS FUND, L.L.C.
SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
DECEMBER 31, 1999
MARKET VALUE
SHARES
COMMON STOCK - (CONTINUED)
INTERNET CONTENT - 7.22%
11,000 CMGI, Inc.* (a) $3,045,625
23,500 Critical Path, Inc.* 2,217,813
2,000 Digital Insight Corp.* 72,750
9,400 DoubleClick, Inc.* 2,378,787
860 S1 Corp.* 67,188
13,326 Yahoo!, Inc.* (a) 5,766,000
----------
13,548,163
----------
INTERNET SOFTWARE - 10.75%
1,000 AGENCY.COM, Inc., Ltd.* 51,000
22,300 Allaire Corp.* (a) 3,262,780
1,000 Alteon Websystems, Inc.* 87,750
64,992 America Online, Inc.* (a) 4,931,268
14,060 Art Technology Group, Inc.* 1,801,438
18,992 At Home Corp., Series A* (a) 814,282
15,200 BroadVision, Inc.* (a) 2,584,958
860 Commtouch Software, Ltd.* 41,764
7,099 Digital Island, Inc.* 675,292
1,000 Engage Technologies, Inc.* 60,000
15,600 Inktomi Corp.* (a) 1,384,500
7,000 Liberate Technologies, Inc.* 1,799,000
1,500 Retek, Inc.* 112,875
535 U.S. Interactive, Inc.* 23,005
15,600 Vignette Corp.* (a) 2,542,800
----------
20,172,712
----------
NETWORKING PRODUCTS - 5.25%
17,846 3Com Corp.* 838,762
63,530 Cisco Systems, Inc.* (a) 6,805,651
26,500 Network Appliance, Inc.* (a) 2,201,170
----------
9,845,583
----------
The accompanying notes are an integral part of these financial statements.
-16-
<PAGE>
XANTHUS FUND, L.L.C.
SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
DECEMBER 31, 1999
MARKET VALUE
SHARES
COMMON STOCK - (CONTINUED)
RETAIL - INTERNET - 0.70%
16,652 Amazon.com, Inc.* $ 1,267,633
2,500 Webvan Group, Inc.* 41,250
-----------
1,308,883
-----------
SATELLITE TELECOMMUNICATIONS - 2.16%
24,454 Gilat Satellite Networks, Ltd.* 2,903,913
47,000 Loral Space & Communications, Ltd.* 1,142,711
-----------
4,046,624
-----------
TELECOMMUNICATIONS EQUIPMENT - 11.39%
31,650 ADC Telecommunications, Inc.* 2,296,619
27,945 Lucent Technologies, Inc. 2,095,875
28,200 Nokia Oyj, Sponsored ADR (a) 5,387,976
50,684 Nortel Networks Corp. (a) 5,119,084
16,400 QUALCOMM, Inc.* 2,888,450
56,016 Tellabs, Inc.* (a) 3,595,555
-----------
21,383,559
-----------
TELECOMMUNICATIONS SERVICES - 1.29%
12,390 Illuminet Holdings, Inc.* 681,450
24,400 Inet Technologies, Inc.* (a) 1,704,950
1,208 Pac-West Telecomm, Inc.* 32,012
-----------
2,418,412
-----------
WIRELESS EQUIPMENT - 3.28%
41,766 Motorola, Inc. (a) 6,150,044
-----------
TOTAL COMMON STOCK (COST $145,639,564) 221,711,984
===========
The accompanying notes are an integral part of these financial statements.
-17-
<PAGE>
XANTHUS FUND, L.L.C.
SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
DECEMBER 31, 1999
MARKET VALUE
NUMBERS OF
CONTRACTS
PUT OPTIONS - 5.24%
INDEX - 5.24%
172 Nasdaq-100 Index, 03/18/00, $3,580.00 $ 3,682,950
258 Nasdaq-100 Index, 03/18/00, $3,640.00 6,150,075
------------
9,833,025
------------
TOTAL PUT OPTIONS (COST $9,762,290) 9,833,025
============
TOTAL INVESTMENTS (COST $155,401,854) - 123.38% 231,545,009
OTHER ASSETS, LESS LIABILITIES - (23.38%) (43,870,186)
------------
NET ASSETS - 100.00% $187,674,823
------------
(a) Partially or wholly-held in a pledged account by the Custodian as collateral
for securities sold, not yet purchased and loan payable.
* Non-income producing security.
The accompanying notes are an integral part of these financial statements.
-18-
<PAGE>
XANTHUS FUND, L.L.C.
SCHEDULE OF SECURITIES SOLD, NOT YET PURCHASED
- --------------------------------------------------------------------------------
DECEMBER 31, 1999
MARKET VALUE
SHARES
SECURITIES SOLD, NOT YET PURCHASED - (15.15%)
AEROSPACE/DEFENSE - (0.70%)
13,050 Boeing Co. $ (540,766)
13,300 Honeywell International, Inc. (767,250)
-----------
(1,308,016)
-----------
AEROSPACE/DEFENSE-EQUIPMENT - (0.77%)
13,300 General Dynamics Corp. (701,575)
11,300 United Technologies Corp. (734,500)
-----------
(1,436,075)
-----------
APPLICATIONS SOFTWARE - (0.24%)
8,600 Keane, Inc. (276,275)
7,095 Policy Management Systems Corp. (181,369)
2 Siebel Systems, Inc. (168)
-----------
(457,812)
-----------
COMMERCIAL SERVICES - FINANCES - (0.52%)
15,552 Equifax, Inc. (366,452)
15,252 Paychex, Inc. (610,080)
-----------
(976,532)
-----------
COMPUTER GRAPHICS - (0.04%)
7,899 3Dfx Interactive, Inc. (77,513)
1 Visio Corp. (47)
-----------
(77,560)
-----------
COMPUTER SERVICES - (0.49%)
16,788 Ceridian Corp. (361,999)
2 Sapient Corp. (282)
17,600 Unisys Corp. (562,109)
-----------
(924,390)
-----------
COMPUTER SOFTWARE - (0.22%)
14,461 Transaction Systems Architects, Inc., Class A (404,908)
-----------
The accompanying notes are an integral part of these financial statements.
-19-
<PAGE>
XANTHUS FUND, L.L.C.
SCHEDULE OF SECURITIES SOLD, NOT YET PURCHASED (CONTINUED)
- --------------------------------------------------------------------------------
DECEMBER 31, 1999
MARKET VALUE
SHARES
SECURITIES SOLD, NOT YET PURCHASED - (CONTINUED)
COMPUTERS - MICRO - (0.76%)
13,300 International Business Machines Corp. $(1,434,737)
-----------
CONSULTING SERVICES - (0.28%)
11,700 USWeb Corp. (519,925)
-----------
DATA PROCESSING/MANAGEMENT - (0.57%)
10,716 Fiserv, Inc. (410,562)
13,300 LHS Group, Inc. (326,688)
10,016 Sterling Commerce, Inc. (340,544)
-----------
(1,077,794)
-----------
DISTRIBUTION - WHOLESALE - (0.10%)
6,102 Ingram Micro, Inc., Class A (80,089)
4,316 Tech Data Corp. (117,071)
-----------
(197,160)
-----------
DIVERSIFIED MANUFACTURING OPERATIONS - (0.14%)
8,600 Teleflex, Inc. (269,292)
-----------
ELECTRIC PRODUCTS - MISCELLANEOUS - (0.41%)
13,300 Emerson Electric Co. (763,087)
-----------
ELECTRONIC COMPONENTS - MISCELLANEOUS - (0.62%)
13,145 Kent Electronics, Inc. (299,049)
6,450 Koninklijke (Royal) Philips Electronics, N.V. (870,750)
-----------
(1,169,799)
-----------
ELECTRONIC COMPONENTS - SEMICONDUCTORS - (0.42%)
5,430 Dallas Semiconductor Corp. (349,898)
9,400 Lattice Semiconductor Corp. (442,975)
-----------
(792,873)
-----------
ELECTRONIC PARTS DISTRIBUTION - (0.45%)
13,932 Avnet, Inc. (842,886)
-----------
The accompanying notes are an integral part of these financial statements.
-20-
<PAGE>
XANTHUS FUND, L.L.C.
SCHEDULE OF SECURITIES SOLD, NOT YET PURCHASED (CONTINUED)
- --------------------------------------------------------------------------------
DECEMBER 31, 1999
MARKET VALUE
SHARES
SECURITIES SOLD NOT, YET PURCHASED - (CONTINUED)
HEALTHCARE COST CONTAINMENT - (0.38%)
8,530 Medical Manager Corp. $ (718,653)
-----------
INTERNET CONTENT - (0.02%)
903 MarketWatch.com, Inc. (32,960)
430 Women.com Networks, Inc. (6,128)
-----------
(39,088)
-----------
INTERNET SOFTWARE - (0.34%)
11,700 NorthPoint Communications Group, Inc. (280,800)
11,300 Rhythms NetConnections, Inc. (350,300)
-----------
(631,100)
-----------
MEDICAL - DRUGS - (0.25%)
11,150 Schering-Plough Corp. (472,481)
-----------
MEDICAL - GENERIC DRUGS - (0.22%)
11,300 Watson Pharmaceuticals, Inc. (404,687)
-----------
MEDICAL - WHOLESALE DRUG DISTRIBUTION - (0.36%)
14,216 Cardinal Health, Inc. (680,591)
-----------
MEDICAL INFORMATION SYSTEMS - (0.42%)
15,623 Shared Medical Systems Corp. (795,804)
-----------
MEDICAL INSTRUMENTS - (0.56%)
10,900 Guidant Corp. (512,300)
17,400 St. Jude Medical, Inc. (533,971)
-----------
(1,046,271)
-----------
MEDICAL LASER SYSTEMS - (0.09%)
3,280 VISX, Inc. (169,740)
-----------
The accompanying notes are an integral part of these financial statements.
-21-
<PAGE>
XANTHUS FUND, L.L.C.
SCHEDULE OF SECURITIES SOLD, NOT YET PURCHASED (CONTINUED)
- --------------------------------------------------------------------------------
DECEMBER 31, 1999
MARKET VALUE
SHARES
SECURITIES SOLD, NOT YET PURCHASED- (CONTINUED)
MEDICAL PRODUCTS - (1.37%)
13,050 Baxter International, Inc. $ (819,710)
18,800 Johnson & Johnson (1,753,100)
-----------
(2,572,810)
-----------
MULTIMEDIA - (0.45%)
13,100 CBS Corp. (837,588)
-----------
OFFICE AUTOMATION & EQUIPMENT - (0.41%)
13,330 Pitney Bowes, Inc. (644,012)
5,388 Xerox Corp. (122,243)
------------
(766,255)
-----------
PHOTO EQUIPMENT & SUPPLIES - (0.33%)
9,400 Eastman Kodak Co. (622,750)
-----------
PRINTERS & RELATED PRODUCTS - (0.41%)
8,400 Lexmark International Group, Inc., Class A (760,200)
-----------
PRINTING - COMMERCIAL - (0.27%)
20,400 R.R. Donnelley & Sons Co. (506,185)
-----------
RETAIL - CONSUMER ELECTRONICS - (0.91%)
13,250 Best Buy Co., Inc. (665,813)
13,450 Circuit City Stores - Circuit City Group (606,097)
8,750 Tandy Corp. (430,395)
-----------
(1,702,305)
-----------
RETAIL OFFICE SUPPLIES - (0.14%)
13,000 Staples, Inc. (269,750)
-----------
The accompanying notes are an integral part of these financial statements.
-22-
<PAGE>
XANTHUS FUND, L.L.C.
SCHEDULE OF SECURITIES SOLD, NOT YET PURCHASED (CONTINUED)
- --------------------------------------------------------------------------------
DECEMBER 31, 1999
MARKET VALUE
SHARES
SECURITIES SOLD, NOT YET PURCHASED- (CONTINUED)
TELECOMMUNICATIONS EQUIPMENT - (0.82%)
3,559 Lucent Technologies, Inc. $ (266,900)
13,766 Plantronics, Inc. (985,136)
4,302 Telefonaktiebolaget LM Ericsson, Sponsored ADR (282,590)
------------
(1,534,626)
------------
TELEPHONE - INTEGRATED - (0.49%)
13,150 CenturyTel, Inc. (622,981)
4,100 Deutsche Telekom AG, Sponsored ADR (291,100)
------------
(914,081)
------------
TRAVEL SERVICES - (0.18%)
11,100 Galileo International, Inc. (334,388)
------------
SECURITIES SOLD, NOT YET PURCHASED
(PROCEEDS $27,320,737) $(28,432,199)
============
The accompanying notes are an integral part of these financial statements.
-23-
