SELIGMAN
----------------------------------------
NEW TECHNOLOGIES FUND, INC.
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ANNUAL REPORT
DECEMBER 31, 1999
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SEEKING LONG-TERM
CAPITAL APPRECIATION BY
INVESTING IN COMPANIES
THAT HAVE THE POTENTIAL
TO PRODUCE TOMORROW'S
TECHNOLOGIES
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J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
<PAGE>
SELIGMAN -- TIMES CHANGE...VALUES ENDURE
J. & W. SELIGMAN & CO. INCORPORATED IS A FIRM WITH A LONG TRADITION OF
INVESTMENT EXPERTISE, OFFERING A BROAD ARRAY OF INVESTMENT CHOICES TO HELP
TODAY'S INVESTORS SEEK THEIR LONG-TERM FINANCIAL GOALS.
[Graphic Omitted]
JAMES, JESSE, AND JOSEPH SELIGMAN, 1870
TIMES CHANGE...
Established in 1864, Seligman has a history of providing financial services
marked not by fanfare, but rather by a quiet and firm adherence to financial
prudence. While the world has changed dramatically in the 136 years since
Seligman first opened its doors, the firm has continued to offer its clients
high-quality investment solutions through changing times.
In the late 19th century, as the country grew, Seligman helped finance the
westward expansion of the railroads, the construction of the Panama Canal, and
the launching of urban transit systems. In the first part of the 20th century,
as America became an industrial power, the firm helped fund the growing capital
needs of the nascent automobile and steel industries.
With the formation of Tri-Continental Corporation in 1929 -- today, the nation's
largest diversified publicly-traded closed-end investment company -- Seligman
began shifting its emphasis from investment banking to investment management.
Despite the stock market crash and ensuing depression, Seligman was convinced of
the importance that investment companies could have in building wealth for
individual investors and began managing its first mutual fund in 1930.
In the decades that followed, Seligman has continued to offer forward-looking
investment solutions, including equity funds that specialize in small companies,
technology, or international securities, and bond funds that focus on high-yield
issuers, US government bonds, or municipal securities.
...VALUES ENDURE
Seligman is proud of its distinctive past and of the traditional values that
continue to shape the firm's business decisions and investment judgment. While
much has changed over the years, the firm's commitment to providing prudent
investment management that seeks to build wealth for clients over time is an
enduring value that will guide Seligman in the new millennium.
TABLE OF CONTENTS
To the Shareholders ........................................................ 1
Interview With Your Portfolio Managers ..................................... 2
Performance Overview ....................................................... 5
Portfolio Overview ......................................................... 6
Portfolio of Investments ................................................... 8
Statement of Assets and Liabilities ........................................ 14
Statement of Operations .................................................... 15
Statement of Changes in Net Assets ......................................... 16
Notes to Financial Statements .............................................. 17
Financial Highlights ....................................................... 21
Report of Independent Auditors ............................................. 22
Federal Tax Status of 1999
Gain Distribution for Taxable Accounts
AND For More Information .................................................. 23
Board of Directors AND Executive Officers .................................. 24
Glossary of Financial Terms ................................................ 25
<PAGE>
To the Shareholders
We are pleased to present Seligman New Technologies Fund's first annual
shareholder report. Since the Fund's inception on July 27, 1999, through its
fiscal year end on December 31, 1999, the Fund delivered a total return of
60.65% based on net asset value. While the Fund has the ability to invest up to
35% of its assets in venture capital, most of the Fund's performance since
inception is attributable to its investments in public companies. The impact of
the Fund's venture capital investment has yet to be felt. The Fund benefited
from an exceptionally strong market for the technology sector during the period
and from the Fund's skilled stock selection. Since inception, the Fund's manager
welcomed four new members to the investment team: Matthew Alfano, Gregory M.
Cote, Michael J. Guthrie, and Steven Werber.
As the Fund's first fiscal reporting period came to a close on December 31,
1999, all major US stock indices -- the Dow Jones Industrial Average, the S&P
500, and the NASDAQ -- stood at record highs. The broad-based S&P 500 had
achieved a fifth consecutive year of greater than 20% returns -- a
record-breaking run. Supporting these impressive markets was the US economic
expansion -- now the longest in US history. Throughout 1999, unemployment stood
at a near 30-year low, inflation remained tame, and consumer confidence soared.
In addition, the global economy -- which just over one year ago threatened US
growth -- rebounded strongly.
While 1999 will certainly be remembered as a positive year for equity investors,
it was also a year of sharp contrasts. Despite stellar performances by the
popular indices, the market was extraordinarily narrow. Just over half of the
stocks in the S&P 500 had positive returns. Large-capitalization growth and
technology companies continued to outpace the broader market. Further, in
response to concerns regarding inflation, the Federal Reserve Board increased
the federal funds rate three times, completely reversing its 1998 rate cuts.
As we look into the 21st century, we are optimistic, and believe that there are
several long-term factors that may support equity prices for many years. First,
new technology has allowed the economy to become vastly more productive, and the
sector now accounts for approximately 25% of gross domestic product growth and
approximately 40% of capital spending. Technology has been, and will continue to
be, responsible for substantial changes in business activity, both
business-to-business and business-to-consumer. While we are highly enthusiastic
about technology, we have taken a conservative approach since we believe that
investment behavior in this area has become increasingly speculative. As we seek
opportunities in this exciting sector, we will remain committed to finding solid
investment value and to considering company fundamentals.
Second are global demographic trends. The fastest-growing segment of the
population in the US and other developed countries is 45- to 64-year-olds, which
is likely to increase its savings rate as its members mature. We believe that
this will produce a groundswell of savings, which will be a significant support
for equity prices in the coming years.
Third, despite the uptick in rates during 1999, we believe that the long-term
trend is one of continued benign inflation and low interest rates, a positive
environment for the stock market. Finally, the global economy has rebounded
strongly since the 1998 financial crisis. We believe that this will continue,
allowing investors to benefit from attractive overseas investment opportunities.
We are optimistic regarding the prospects for the technology industry and for
Seligman New Technologies Fund. The increased use of the Internet, the
ever-growing demand for bandwidth, and the growth of wireless communications and
digital consumer electronics bodes well for the technology industry in the year
2000, and we believe that Seligman New Technologies is well positioned to
benefit.
Thank you for your support of Seligman New Technologies Fund. A discussion with
your Portfolio Managers, as well as the Fund's investments results, and
financial statements, including a portfolio of investments, follows this letter.
We look forward to serving your investment needs for many years to come.
By order of the Board of Directors,
/S/ WILLIAM C. MORRIS
- ---------------------
William C. Morris
Chairman
/S/ BRIAN T. ZINO
-----------------
Brian T. Zino
President
February 11, 2000
1
<PAGE>
INTERVIEW WITH YOUR PORTFOLIO MANAGERS,
PAUL H. WICK AND STORM BOSWICK
Q: HOW DID SELIGMAN NEW TECHNOLOGIES FUND PERFORM SINCE ITS INCEPTION ON JULY
27, 1999?
A: During its first five months of operations, Seligman New Technologies Fund
posted a total return of 60.65% based on net asset value. This return
outpaced the 50.86% total return delivered by the Goldman Sachs Technology
Index, a market-capitalization weighted index of 190 stocks designed to
measure the performance of companies in the technology sector. The Fund's
return also outpaced the 10.43% total return delivered by the Lipper Sector
Equity Funds Average, which is an average of closed-end funds with various
investment objectives.
Q: WHAT FACTORS CONTRIBUTED TO THE FUND'S PERFORMANCE DURING THE PAST FIVE
MONTHS?
A: The past five months were a particularly strong period for the technology
sector in general. We believe, however, that the Fund's performance
significantly benefited from our selection of superior stocks. In fact, a
significant number of the Fund's investments have more than doubled in price
since we purchased them for the Fund. We are optimistic regarding the futures
of the Fund's venture capital investments. Thus far, only two of these
private companies went public during the past five months, making only a
small contribution to Fund performance. Several more may emerge as public
entities this year, although there can be no assurances that this will
happen.
Nineteen ninety-nine was a record year for new public issues, driven by
investor enthusiasm for all Internet-related offerings. The Fund participated
in numerous initial public offerings, which have so far made a significant
positive impact on performance.
Q: WHAT IS YOUR ASSESSMENT OF THE HIGH-TECH INDUSTRY'S FUNDAMENTALS?
A: We believe that the fundamentals underlying the global technology industry
have never been brighter than they are today. In particular, the Internet is
emerging as the main engine of growth for the entire industry and is
improving business productivity in myriad ways: enabling telecommuting,
aiding in gathering cost information, improving communications within
organizations, and generally reducing transaction costs.
The Internet is also the catalyst for the explosion in bandwidth taking place
throughout the world's wire networks. Technological advances such as wave
division multiplexing, optical switches, terabit routers, and cable modems
should serve to accelerate the usefulness of the Internet in the years ahead.
[Picture Omitted]
WEST COAST TECHNOLOGY TEAM: (FROM LEFT) MARIANNE HURLOW (ADMINISTRATIVE
ASSISTANT), PAUL WICK (PORTFOLIO MANAGER), (SEATED) PATRICK RENDA; (NOT SHOWN)
MATT ALFANO, MICHAEL J. GUTHRIE
[Picture Omitted]
EAST COAST TECHNOLOGY TEAM: (STANDING FROM LEFT) LAWRENCE RUSSO, KEI YAMAMOTO,
SHANEAN AUSTIN (ADMINISTRATIVE ASSISTANT), (SEATED) STORM BOSWICK (CO-PORTFOLIO
MANAGER); (NOT SHOWN) GREGORY M. COTE, STEVEN WERBER
2
<PAGE>
INTERVIEW WITH YOUR PORTFOLIO MANAGERS,
PAUL H. WICK AND STORM BOSWICK
Other major growth drivers for the technology industry are wireless
communications and digital consumer electronics. In 1999, the wireless
handset market grew from 150 million to 250 million units -- an increase of
more than 60%. That figure is expected to grow to 400 million in 2000. In the
realm of consumer electronics, new products based on digital technology are
just starting to emerge. They include digital cameras, digital versatile disk
(DVD) players, personal digital assistants, personal video recorders, global
positioning systems, and digital set-top boxes for cable and satellite
television.
All of the above technologies -- wireless telephones, broadband networking
gear, and digital consumer electronics -- consume vast amounts of electronic
components. It is therefore not surprising that the outlook for the
semiconductor industry is, in our view, the best it has been since 1995.
Q: WHAT WAS THE FUND'S STRATEGY DURING THE PERIOD UNDER REVIEW?
A: The Fund's strategy has been, and will remain, fundamentally consistent. We
use a bottom-up stock selection process, which simply means that we place a
great deal of emphasis on researching individual companies. We look for
companies that display -- or are expected to display -- robust growth
prospects, high profit margins or return on capital, attractive valuations
relative to expected earnings or cash flow, quality management, and unique
competitive advantages.
Technology has been an area of extraordinarily rapid growth, with
exceptionally innovative companies. However, it is also an area of intense
competition, and we believe that many of today's "hot" technology companies
will not survive. In today's momentum-driven market, speculative investors
often buy technology stocks simply because their stock prices appear to be on
an upward trend. We do not believe that this approach will work over the long
term. In our opinion, the technology sector, in particular, requires the
sound fundamental research and analysis that a professional manager can
provide.
Q: WHAT AREAS OF VENTURE CAPITAL PROVIDED THE MOST OPPORTUNITIES FOR INVESTMENT
DURING THE FIVE-MONTH PERIOD?
A: During this time, companies that provide Internet services were very active
in seeking venture capital. We are optimistic about opportunities in this
area and believe that the Internet has the potential to revolutionize the way
people and businesses communicate and interact. While the Internet is now
widely used only in the United States and western Europe, we believe that it
will continue to expand to become a truly global phenomenon.
Broadband/fiber optics was another area of venture capital that provided a
variety of attractive opportunities for the Fund. Computer processing power
currently exceeds the transmission capacity of the networks that connect
computers. We believe that broadband and fiber optic technology will be in
great demand as companies seek to improve data-transmission capacity and
speed. Fiber optics is likely to remain an area of rapid growth for many
years to come.
Q: HAVE THERE BEEN ANY CHANGES TO THE FUND'S MANAGEMENT TEAM SINCE THE FUND'S
INCEPTION IN JULY?
A: We have added four new members to our investment team since the Fund's
inception. They are Matthew Alfano, Gregory M. Cote, Michael J. Guthrie, and
Steven Werber. We believe these additions will provide the Fund with the
personnel and expertise needed to find the most attractive opportunities in
this challenging sector of the market.
A TEAM APPROACH
Seligman New Technologies Fund is managed by the Seligman Global Technology
Team, headed by Paul H. Wick. Mr. Wick and Storm Boswick, the Fund's
Co-Portfolio Manager, are assisted in the management of the Fund by a Team of
seasoned research professionals who develop relationships with technology
industry executives, investment banks, and venture capital firms to identify
opportunities that they believe offer the greatest potential for growth.
3
<PAGE>
INTERVIEW WITH YOUR PORTFOLIO MANAGERS,
PAUL H. WICK AND STORM BOSWICK
Q: WHAT IS YOUR OUTLOOK FOR THE FUND IN 2000?
A: While industry fundamentals are outstanding, valuations are extremely high by
historical standards. Hence, we have become more vigilant in evaluating the
risk of the companies held by the Fund, and we have begun to pare back or
eliminate some of the most expensive public securities. Fortunately, activity
in the venture capital area remains robust, and we are presented with many
opportunities to invest in private technology companies at prices
considerably more reasonable than their public counterparts. We are
cautiously optimistic that several of the private companies in the Fund's
venture capital portfolio will become public in the first half of 2000. Of
course, the Fund's investments in private companies involve more risk than
investments in publicly traded companies, and there can be no assurance that
any of them will successfully complete an initial public offering.
We believe that technology as a whole will continue to perform well in 2000,
and that the Fund offers investors a unique way to participate in technology
companies that have passed their initial start-up phase, but that have not
yet offered shares to the public. We believe that this risky, but possibly
very rewarding, portion of the portfolio is well balanced with the portion of
the portfolio that invests in public companies.
In spite of high valuations in many publicly traded technology stocks, we
continue to find attractive values, particularly in the semiconductor and
software sectors. Within the high-growth Internet sector, we anticipate
finding the most attractive opportunities in business-to-business Internet.
We don't expect to find as many suitable investments in business-to-consumer
Internet, but believe that there will be selective opportunities in this
area. We also believe that as the Internet grows in acceptance and usage
worldwide, companies that supply the software and equipment that support this
growth will continue to benefit.
4
<PAGE>
PERFORMANCE OVERVIEW
INVESTMENT RESULTS PER COMMON SHARE
TOTAL RETURNS*
FOR PERIODS ENDED DECEMBER 31, 1999
THREE SINCE INCEPTION
MONTHS 7/27/99
------------ -----------------
With Sales Charge** 43.70% 55.83%
Without Sales Charge** 48.13 60.65
Goldman Sachs Technology Index+ 41.97 50.86++
Lipper Sector Equity Funds Average+ 8.63 10.43++
NET ASSET VALUE
December 31, 1999 $37.34
September 30, 1999 26.30
July 27, 1999*** 24.25
CAPITAL GAIN INFORMATION
FOR THE PERIOD ENDED DECEMBER 31, 1999
Paid $1.427
Undistributed Realized 4.419@
Unrealized 8.370@@
The rates of return will vary and the principal value of an investment will
fluctuate. Shares, if redeemed, may be worth more or less than their original
cost. Past performance is not indicative of future investment results. The
Fund's returns were achieved during a market favorable to companies in the
technology sector. There can be no assurances that the Fund will continue to
consistently achieve, by investing in IPOs or otherwise, substantially similar
performance that the Fund had previously experienced.
Investments in one economic sector, such as technology, may be subject to
greater price fluctuations than owning a portfolio of diversified investments.
In addition, the securities in which Seligman New Technologies Fund invests may
be subject to greater government regulation, greater price fluctuation, and
limited liquidity. The stocks of smaller companies may be subject to
above-average risk. The Fund may invest in global technology stocks which may be
subject to additional risks, including currency fluctuations, foreign taxation,
differences in financial reporting practices, and rapid changes in political and
economic conditions. Venture capital companies represent highly speculative
investments by the Fund. There can be no assurances that any of the venture
capital companies in which the Fund invests will complete public offerings or be
sold, or, if such events occur, with respect to the timing or values of such
offerings or sales.
- ------------------
* Returns for periods of less than one year are not annualized.
** Return figures reflect any change in price per share and assume the
investment of capital gain distributions.
*** Commencement of operations.
+ The Goldman Sachs Technology Index and the Lipper Sector Equity Funds
Average are unmanaged benchmarks that assume investment of dividends. The
Lipper Sector Equity Funds Average excludes the effect of sales charges.
The monthly performance of the Lipper Sector Equity Funds Average is used
in the Performance Overview. The Goldman Sachs Technology Index excludes
the effect of fees and sales charges. Investors cannot invest directly in
an index or an average.
++ From 7/31/99.
@ Represents net gain realized in November and December 1999, payable in
2000.
@@ Represents the per share amount of net unrealized appreciation of portfolio
securities as of December 31, 1999.
5
<PAGE>
PORTFOLIO OVERVIEW
DIVERSIFICATION OF NET ASSETS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
PERCENT
OF NET
ISSUES COST VALUE ASSETS
------ -------------- -------------- -------
COMMON STOCKS:
<S> <C> <C> <C> <C>
Communications Infrastructure ......... 5 $ 19,091,950 $ 42,746,245 4.7
Communications Services ............... 4 22,012,264 33,834,538 3.7
Computer and Business Services ........ 5 28,785,991 34,217,581 3.8
Computer Hardware/Peripherals ......... 6 55,377,194 74,809,338 8.3
Computer Software ..................... 23 118,682,019 196,105,430 21.7
Electronics Capital Equipment ......... 2 15,324,525 29,183,982 3.2
Internet/On-Line ...................... 21 111,614,052 113,943,709 12.6
Media ................................. 9 57,965,471 82,349,771 9.1
Semiconductors ........................ 5 44,553,864 69,277,553 7.6
--- ------------ ------------ -----
80 473,407,330 676,468,147 74.7
--- ------------ ------------ -----
CONVERTIBLE PREFERRED STOCKS:
Communications Infrastructure 1 1,579,999 1,579,999 0.2
Computer Software 3 8,158,404 8,154,754 0.9
Internet/On-Line 40 145,008,787 144,912,482 16.0
Telecommunications 3 16,044,342 16,040,000 1.8
--- ------------ ------------ -----
47 170,791,532 170,687,235 18.9
--- ------------ ------------ -----
LIMITED PARTNERSHIPS:
MISCELLANEOUS 2 1,146,849 1,134,289 0.1
--- ------------ ------------ -----
CONVERTIBLE PROMISSORY NOTE 1 670,000 670,000 0.1
--- ------------ ------------ -----
SHORT-TERM HOLDINGS AND
OTHER ASSETS LESS LIABILITIES 2 56,327,240 56,327,240 6.2
--- ------------ ------------ -----
NET ASSETS 132 $702,342,951 $905,286,911 100.0
=== ============ ============ =====
</TABLE>
LARGEST INDUSTRIES
DECEMBER 31, 1999
[Bar Chart Omitted]
Bar chart represented below in print form.
28.8% 22.9% 9.1% 8.3% 7.7%
$258,856,191 $204,260,184 $82,349,771 $74,809,338 $69,277,553
INTERNET/ COMPUTER MEDIA COMPUTER SEMI-
ON-LINE SOFTWARE HARDWARE/ CONDUCTORS
PERIPHERALS
6
<PAGE>
PORTFOLIO OVERVIEW
ALLOCATION OF INVESTMENTS
DECEMBER 31, 1999
[Pie Chart Omitted]
Pie chart represented below in print form.
23.4% 6.2% 70.4%
VENTURE CAPITAL NET CASH AND PUBLICLY TRADED
SHORT-TERM COMPANIES
HOLDINGS
LARGEST PORTFOLIO HOLDINGS
DECEMBER 31, 1999
SECURITY VALUE
- ----------- --------------------
Electronics for Imaging.................................. $23,649,325
Applied Micro Circuits................................... 23,080,350
C-Cube Microsystems...................................... 20,770,750
Orbotech................................................. 18,143,916
Adelphia Communications.................................. 17,684,075
SECURITY VALUE
- ----------- --------------------
Rational Software........................................ $16,872,187
Parametric Technology.................................... 15,537,562
Lexmark International Group.............................. 14,932,500
Cablevision Systems (Class A)............................ 13,892,000
Check Point Software Technologies........................ 12,918,750
7
<PAGE>
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
SHARES VALUE
----------- -----------
COMMON STOCKS 74.7%
COMMUNICATIONS
INFRASTRUCTURE 4.7%
ASPECT COMMUNICATIONS*
Provider of call center
systems and software .................... 265,400 $10,383,775
CROSSROADS SYSTEMS#
Provider of networking
products that store and
manage data integrity ................... 100,800 6,798,960
DIGITAL MICROWAVE*
Provider of wireless communi-
cations equipment ....................... 382,500 8,976,797
FINISAR*
Provider of fiber optic systems
for the data communications
industry ................................ 78,100 6,989,950
GILAT SATELLITE NETWORKS (ISRAEL)*
Provider of telecommun-
ications equipment ...................... 80,900 9,596,763
-----------
42,746,245
-----------
COMMUNICATIONS SERVICES 3.7%
CROWN CASTLE INTERNATIONAL*
Provider of telecommu-
nications services ...................... 382,300 12,257,494
LCC INTERNATIONAL
Provider of wireless telecom-
munications services .................... 389,000 7,828,625
PANAMSAT*
International provider of
satellite-based communications
services ................................ 85,800 5,080,969
ROGERS COMMUNICATIONS*
Provider of telecommuni-
cations services .................... 350,200 8,667,450
-----------
33,834,538
-----------
COMPUTER AND BUSINESS
SERVICES 3.8%
AMDOCS*
Provider of software solutions
for the telecommunications
industry ................................ 309,700 10,684,650
ANSWERTHINK CONSULTING GROUP*
Provider of computer services,
including business process
transformation and decision
support technology ...................... 140,900 4,869,856
COMDISCO
A leading computer
hardware leasing company ................ 136,900 5,099,525
- ------------------------
See footnotes on page 13.
SHARES VALUE
----------- -----------
COMPUTER AND BUSINESS
SERVICES (CONTINUED)
iXL ENTERPRISES*
Provider of Internet strategy
consulting services ..................... 109,000 6,035,875
NAVIGANT CONSULTING*
Provider of management
consulting services ..................... 692,200 7,527,675
-----------
34,217,581
-----------
COMPUTER HARDWARE/
PERIPHERALS 8.3%
ADAPTEC*
Manufacturer of computer
input-output systems .................... 170,000 8,473,438
AMERICAN POWER CONVERSION*
Provider of back-up power
supply equipment for
computers ............................... 325,300 8,569,622
APEX*
Manufacturer of switching
systems for computer network
administrators .......................... 324,800 10,515,400
CREATIVE TECHNOLOGY (SINGAPORE)
Provider of PC audio and
graphics products ....................... 505,300 8,669,053
ELECTRONICS FOR IMAGING*
Manufacturer of peripherals
for color printers and copiers .......... 403,400 23,649,325
LEXMARK INTERNATIONAL GROUP*
Manufacturer of laser and
inkjet printers and cartridges .......... 165,000 14,932,500
-----------
74,809,338
-----------
COMPUTER SOFTWARE 21.7%
ACCLAIM ENTERTAINMENT*
Developer of entertainment
software ................................ 657,100 3,388,172
AUTODESK
Developer of software for
architectural and
mechanical design, data
management, and mapping ................. 304,600 10,270,731
BINDVIEW DEVELOPMENT*
Provider of computer software ........... 148,100 7,354,091
CHECK POINT SOFTWARE
TECHNOLOGIES* (ISRAEL)
Developer of network
"firewall" security systems ............. 65,000 12,918,750
CONCORD COMMUNICATIONS*
Provider of performance
analysis for computer network
operations .............................. 87,900 3,925,284
8
<PAGE>
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
SHARES VALUE
----------- -----------
COMPUTER SOFTWARE (CONTINUED)
DOCUMENTUM*
Provider of computer
software products ....................... 150,400 $ 9,009,900
ELECTRONIC ARTS*
Developer, marketer, and
distributor of entertainment
software ................................ 54,700 4,598,219
HNC SOFTWARE*
Developer and vendor of
software for mission-critical
decision applications ................... 92,600 9,812,706
INTUIT*
Provider of financial
software products ....................... 215,200 12,891,825
ISS GROUP*
Provider of computer network
security monitoring, detection,
and response software ................... 174,500 12,400,406
JDA SOFTWARE GROUP*
Provider of software products
for data analysis ....................... 401,400 6,522,750
MACROMEDIA*
Developer of software for
web page creation ....................... 105,700 7,729,313
MANUGISTICS GROUP*
Provider of software products
for the operational areas of
supply chain planning ................... 200,300 6,503,491
MOBIUS MANAGEMENT SYSTEMS*
Provider of enterprise software
products used to store and
retrieve large volumes of
information for diversified
industries .............................. 322,200 2,572,566
NETIQ*
Provider of computer software
products ................................ 85,000 4,489,063
NEW ERA NETWORKS*
Provider of computer
software and services ................... 244,300 11,665,325
PARAMETRIC TECHNOLOGY*
Developer of mechanical
design software ......................... 574,800 15,537,562
RATIONAL SOFTWARE*
Provider of applications devel-
opment and test software ................ 342,800 16,872,187
SYMANTEC*
Developer, marketer, and
supporter of application
development tools and
systems software products ............... 154,800 9,089,663
- ------------------------
See footnotes on page 13.
SHARES VALUE
----------- -----------
COMPUTER SOFTWARE (CONTINUED)
TELEMATE.NET SOFTWARE
Provider of software that allows
companies to monitor and
analyze the use of their
Internet and voice networks ............. 379,000 $ 6,229,813
TSI INTERNATIONAL SOFTWARE*
Worldwide provider of
software for enterprise appli-
cation integration ...................... 87,900 4,971,844
VISIO*
Provider of business diagram-
ming and technical drawing
software ................................ 200,000 9,500,000
WIND RIVER SYSTEMS*
Provider of consulting services
for software operating systems .......... 214,200 7,851,769
-----------
196,105,430
-----------
ELECTRONICS CAPITAL
EQUIPMENT 3.2%
NOVELLUS SYSTEMS*
Manufacturer of wafer fabrica-
tion systems for the disposition
of thin films ........................... 90,100 11,040,066
ORBOTECH* (ISRAEL)
Manufacturer of automated
optical inspection systems for
circuit boards and flat panel
displays ................................ 233,550 18,143,916
------------
29,183,982
------------
INTERNET/ONLINE 12.6%
APPNET*
Provider of Internet software ........... 103,700 4,533,634
AUTOBYTEL.COM*
Internet website that offers
automotive information .................. 586,700 8,910,506
BEYOND.COM*
Internet retailer of
computer software ....................... 1,059,000 8,240,344
COVAD COMMUNICATIONS GROUP*
Provider of high-speed digital
communications services ................. 118,600 6,615,656
EGREETINGS NETWORK*
Operator of Internet website
that offers the ability to
compose personalized digital
greetings using graphics,
animations, and music ................... 24,000 243,750
9
<PAGE>
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
SHARES VALUE
----------- -----------
INTERNET/ONLINE (CONTINUED)
EMUSIC.COM*
Internet retailer of music
using the MP3 format .................... 663,100 $ 6,755,331
E-STAMP*
Internet website that offers
postage purchasing,
downloading, and printing ............... 127,100 2,812,088
E-STAMP# .................................... 152,765 2,703,941
E-TOYS
Internet retailer of children's
products such as toys
and video games ......................... 214,300 5,638,769
LETSBUYIT.COM# (NETHERLANDS)
Internet retailer that offers
diversified consumer products ........... 907,332 3,153,773
MEDSCAPE*
Provider of online health
and medical information ................. 306,000 3,079,125
MICROCAST#
Producer of aluminum products
for the aeronautics, automotive,
and electronics industries .............. 701,461 3,359,998
NETRADIO
Provider of online
audio broadcasts ........................ 340,000 2,836,875
PRICELINE.COM*
Internet website that allows
customers to name their
own price on products and
services ................................ 240,600 11,413,463
SHOPFAST# (AUSTRALIA)
Operator of OLB.com (On-Line
Business), a website that
provides companies the
opportunity to develop
their businesses via the
Internet ................................ 87,971 490,134
SOURCINGLINK.NET#
Provider of Internet software
that allows retailers to organize
and reduce the cost of mer-
chandise activities with their
suppliers ............................... 421,875 11,021,484
USWEB*
Provider of consulting
services, including Internet
technology solutions .................... 174,900 7,777,584
- ------------------------
See footnotes on page 13.
SHARES VALUE
----------- -----------
INTERNET/ONLINE (CONTINUED)
VERIO*
Provider of Internet services
to small- and mid-sized
businesses .............................. 181,800 $ 8,402,569
WEBVAN GROUP*
Internet retailer that offers
a variety of fresh foods ................ 255,000 4,151,719
XPEDIOR*
Provider of software for
emerging Internet businesses ............ 9,300 267,666
ZIFF-DAVIS (ZD NET)*
Integrated media company
focused on computer and
Internet-related technology ............. 549,300 11,535,300
-------------
113,943,709
-------------
MEDIA 9.1%
ADELPHIA COMMUNICATIONS*
Cable television operator ............... 269,600 17,684,075
CABLEVISION SYSTEMS (CLASS A)*
Owner and operator of
cable television systems ................ 184,000 13,892,000
DOW JONES
International provider of
business news and information ........... 51,700 3,515,600
MARTHA STEWART LIVING*
Provider of how-to information
for homemakers such as
cooking, crafts, and gardening .......... 122,000 2,928,000
METRO-GOLDWYN-MAYER*
Provider of entertainment
products, including motion
pictures, television programs,
and home video .......................... 183,900 4,333,144
NETWORK EVENT THEATER#
Provider of offline and online
media and marketing services ............ 439,024 11,717,814
TV GUIDE (CLASS A)*
Developer and distributor
of cable satellite television
channels; publisher of weekly
television guides ....................... 278,400 11,927,700
WESTWOOD ONE
Radio network operator .................. 135,400 10,290,400
XM SATELLITE RADIO HOLDINGS*
Provider of audio entertainment
and information programming ............. 158,200 6,061,038
------------
82,349,771
------------
SEMICONDUCTORS 7.6%
APPLIED MICRO CIRCUITS*
Manufacturer of silicon
products for the communica-
tions industry .......................... 181,200 23,080,350
10
<PAGE>
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
SHARES VALUE
----------- -----------
SEMICONDUCTORS (CONTINUED)
C-CUBE MICROSYSTEMS*
Provider of digital video
compression and
decompression circuits
and systems ............................. 332,000 $20,770,750
DALLAS SEMICONDUCTOR*
Manufacturer of mixed-signal
integrated circuits ..................... 100,000 6,443,750
LATTICE SEMICONDUCTOR*
Designer and manufacturer of
programmable logic devices .............. 200,000 9,468,750
MICROCHIP TECHNOLOGY*
Supplier of field-programmable
microcontrollers ........................ 138,700 9,513,953
------------
69,277,553
------------
TOTAL COMMON STOCKS
(Cost $473,407,330) ..................... 676,468,147
------------
CONVERTIBLE PREFERRED
STOCKS 18.9%
COMMUNICATIONS
INFRASTRUCTURE 0.2%
CORVIS (SERIES H)#
Provider of telecommunications
equipment ............................... 19,620 1,579,999
------------
COMPUTER SOFTWARE 0.9%
BLAZE SOFTWARE (SERIES BB)#
Provider of Internet software ........... 885,154 3,160,000
MARKETFIRST SOFTWARE (SERIES D)#
Provider of software services
that allow companies to market
themselves online ....................... 1,534,980 1,634,754
VUENT (SERIES D)#
Developer of software for
visual information on the
Internet ................................ 3,360,000 3,360,000
------------
8,154,754
------------
INTERNET/ONLINE 16.0%
ART ADVANCED RECOGNITION
TECHNOLOGY (SERIES D)#
Developer of speech and
handwriting recognition
software products ....................... 1,312,000 3,280,000
AENEID (SERIES D)#0
Provider of a network of
vertical products ....................... 2,271,028 4,860,000
ALLADVANTAGE.COM (SERIES C)#
Provider of Internet
monitoring .............................. 2,677,552 3,280,001
- ------------------------
See footnotes on page 13.
SHARES VALUE
----------- -----------
INTERNET/ONLINE (CONTINUED)
APB ONLINE (SERIES B)#
Provider of information on
the Internet relating to crime
and law enforcement ..................... 307,575 $ 2,675,902
BERNARD TECHNOLOGIES (SERIES D)#0
Provider of food safety services ........ 1,436,364 3,950,001
BILL GROSS' IDEALAB! (SERIES D)#
Provider of services for
identifying, creating, and
operating Internet business ............. 63,200 6,320,000
BUILDNET (SERIES C)#
Provider of Internet services
for the building industry ............... 1,077,273 4,740,000
CHORUM TECHNOLOGIES (SERIES D)#
Provider of optical components
for data networks ....................... 231,664 3,240,979
COLLEGECLUB.COM (SERIES C)#
Provider of Internet services
for college students .................... 1,503,892+ 5,203,466
COLO.COM (SERIES C)#
Provider of high-tech
office space ............................ 644,898 6,320,000
ENTERWORKS (SERIES A)#
Provider of foundation
solutions for e-businesses .............. 2,747,826 3,160,000
FLASHPOINT TECHNOLOGIES (SERIES E)#
Developer of software for
digital photography and
imaging devices ......................... 1,037,037 4,200,000
GLOBAL MEDICAL PRODUCTS (SERIES A)#
Provider of assistance to
promising medical
technologies ............................ 1,092,000 5,460,000
HOMEGAIN.COM (SERIES C)#
Internet website designed to
bring real estate agents and
home sellers together ................... 711,000 7,110,000
HOMEPAGE.COM (SERIES C)#
Internet website that allows
customers to design their
own web pages ........................... 798,530 1,600,000
IMPRESSE (SERIES C)#
Provider of online services
such as simplifying the print
and production process
between companies and
their printers .......................... 255,044 3,159,995
KOZMO.COM (SERIES D)#
Internet website that offers
movie rentals, music,
and food products ....................... 1,400,000 2,520,000
MAINSPRING COMMUNICATIONS
(SERIES E)#
Provider of consulting services
for e-businesses ........................ 210,667 1,580,003
11
<PAGE>
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
SHARES VALUE
----------- -----------
INTERNET/ONLINE (CONTINUED)
MAMAMEDIA (SERIES D)#
Provider of Internet website
geared for children ..................... 622,222 $ 3,359,999
MICROTUNE (SERIES D)#
Developer of broadband
products used in cable modems
and televisions ......................... 202,500 2,430,000
MORE.COM (SERIES D)#
Internet retailer offering health
and beauty products ..................... 672,200 3,240,004
MULTITUDE (SERIES E)#0
Provider of Internet
technology used for PC voice
conferencing ............................ 2,953,271 6,320,000
NEUVIS (SERIES B)#0
Developer of electronic
commerce systems ........................ 2,304,246 3,240,000
NEW FOCUS (SERIES G)#
Manufacturer of optical
components for tele-
communications equipment ................ 267,385 1,738,002
OPTICAL NETWORKS (SERIES G)#
Provider of optical components
for data networks ....................... 250,099 3,160,000
POINTSHARE (SERIES C)#
Provider of Internet services
to medical professionals ................ 1,221,818 3,360,000
RC NETWORKS (SERIES C)#
Provider of network and
consulting services ..................... 210,667 790,001
REALESTATE.COM (SERIES C)#
Provider of Internet services
to the real estate industry ............. 13,500 4,050,000
REALNAMES (SERIES C)#
Provider of global naming
to simplify online navigation ........... 130,667 588,001
RECIPROCAL (SERIES H)#
Provider of digital rights to
management services ..................... 7,125 3,239,998
SCREAMING MEDIA.NET (SERIES B)#
Provider of distribution
services for commercial
websites ................................ 291,440 3,264,128
SILICON WAVE (SERIES C)#
Provider of tele-
communications equipment ................ 1,283,750 5,135,000
SNOWBALL.COM (SERIES C)#
Internet website designed
for the I-generation, which
includes a demographic
of 12- to 29-year olds .................. 316,000 3,160,000
- ------------------------
See footnotes on page 13.
SHARES, UNITS, OR
PRIN. AMT. VALUE
----------- -----------
INTERNET/ONLINE (CONTINUED)
SOFTCOM (SERIES B)#0
Provider of interactive
video services .......................... 2,334,091shs. $ 5,135,000
UGO NETWORKS (SERIES D)#
Internet website designed
for young adults ........................ 554,386 3,160,000
UNIVERSAL ACCESS (SERIES E)#
Provider of network
connections for the
computer industry ....................... 154,918 2,834,999
V STORE (SERIES B)#
Provider of services to
customers that wish to create
their own Internet websites ............. 994,837 3,160,000
WINE.COM (SERIES F)#
Internet wine retailer .................. 432,000 2,592,000
YOUNOLOGY (SERIES A)#0
Provider of business solutions .......... 769,481 3,555,002
YUPI INTERNET (SERIES C)#
Internet website geared
for Spanish speaking users .............. 412,174 4,740,001
-------------
144,912,482
-------------
TELECOMMUNICATIONS 1.8%
CIELO COMMUNICATIONS (SERIES C)#
Provider of optical network
components for computer
networks ................................ 902,857 3,160,000
GEOGRAPHIC NETWORK AFFILIATES#@
Real estate venture consisting
of "carrier hotels" with a
fiber optic conduit network
overlay ................................. 6,320 units+ 6,320,000
POINTONE TELECOMMUNICATIONS
(SERIES B)#@
Provider of telecommuni-
cations services ........................ 1,166,015 shs.+ 6,560,000
------------
16,040,000
------------
TOTAL CONVERTIBLE
PREFERRED STOCKS
(Cost $170,791,532) ..................... 170,687,235
------------
LIMITED PARTNERSHIPS 0.1%
MISCELLANEOUS 0.1%
COMPASS VENTURE PARTNERS L.P.#
Private investment fund that
invests in capital ventures ............. $ 89,999 89,999
EDISON VENTURE FUND IV#
Private investment fund that
invests in capital ventures ............. 1,044,290 1,044,290
-------------
Total Limited Partnerships
(Cost $1,146,849) ....................... 1,134,289
-------------
12
<PAGE>
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
PRIN. AMT. VALUE
------------ -----------
CONVERTIBLE PROMISSORY
NOTE 0.1%
(Cost $670,000)
MICROCAST, 0%-10%,
DUE 12/16/2000# ......................... $ 670,000 $ 670,000
------------
SHORT-TERM
HOLDINGS 6.2%
CREDIT COMMUNAL DE BELGIQUE,
GRAND CAYMAN FIXED TIME
DEPOSIT 43/4%, DUE 1/3/2000 ............. 28,000,000 28,000,000
HSBC BANK, GRAND CAYMAN
FIXED TIME DEPOSIT 43/4%,
DUE 1/3/2000 ............................ 28,000,000 28,000,000
------------
TOTAL SHORT-TERM
HOLDINGS
(Cost $56,000,000) ...................... 56,000,000
------------
TOTAL INVESTMENTS 100.0%
(Cost $702,015,711) ..................... 904,959,671
OTHER ASSETS
LESS LIABILITIES .......................... 327,240
-------------
NET ASSETS 100.0% .......................... $ 905,286,911
=============
- ------------------
* Non-income producing security.
# Restricted and non-income producing security.
@ Affiliated issuers (Fund's holdings representing 5% or more of the
outstanding voting securities).
+ Warrants attached.
Descriptions of companies have not been audited by Deloitte & Touche LLP.
See Notes to Financial Statements.
13
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
<TABLE>
<CAPTION>
ASSETS:
Investments, at value:
<S> <C> <C>
Common stocks (cost $473,407,330) ............................. $676,468,147
Convertible preferred stocks and other* (cost $171,938,381) ... 171,821,524
Convertible promissory note (cost $670,000) ................... 670,000
Short-term holdings (cost $56,000,000) ........................ 56,000,000 $904,959,671
--------------
Cash ............................................................................... 7,809,334
Receivable for dividends and interest .............................................. 7,389
Other .............................................................................. 60,039
----------------
TOTAL ASSETS ....................................................................... 912,836,433
----------------
LIABILITIES:
Payable for securities purchased ................................................... 4,900,825
Management fee payable ............................................................. 1,468,523
Accrued expenses and other ......................................................... 1,180,174
----------------
TOTAL LIABILITIES .................................................................. 7,549,522
----------------
NET ASSETS ......................................................................... $905,286,911
================
COMPOSITION OF NET ASSETS:
Common Stock, at par ($0.01 par value; 100,000,000 shares authorized;
24,246,577 shares outstanding): ................................................. $ 242,466
Additional paid-in capital ......................................................... 594,951,376
Accumulated net investment loss .................................................... (3,655)
Undistributed net realized gain .................................................... 107,152,764
Net unrealized appreciation of investments ......................................... 202,936,543
Net unrealized appreciation on translation of
assets denominated in foreign currencies ........................................ 7,417
----------------
NET ASSETS ......................................................................... $905,286,911
================
NET ASSET VALUE PER SHARE .......................................................... $37.34
=========
</TABLE>
- ------------------
* Includes affiliated issuers (issuers in which the Fund's holdings represent
5% or more of the outstanding voting securities) with a cost of $39,956,110
and a value of $39,940,003.
See Notes to Financial Statements.
14
<PAGE>
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM JULY 27, 1999 (COMMENCEMENT OF OPERATIONS)
TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
INVESTMENT INCOME:
<S> <C> <C>
Interest ............................................................. $ 4,894,099
Dividends ............................................................ 164,760
-------------
TOTAL INVESTMENT INCOME .................................................................. $ 5,058,859
EXPENSES:
Management fee ....................................................... 5,851,264
Stockholder servicing fees ........................................... 1,458,849
Stockholder account services ......................................... 644,264
Shareholder reports and communications ............................... 88,098
Auditing and legal fees .............................................. 76,000
Organization expenses ................................................ 32,500
Directors' fees and expenses ......................................... 18,212
Miscellaneous ........................................................ 16,372
-------------
TOTAL EXPENSES ........................................................................... 8,185,559
--------------
NET INVESTMENT LOSS ...................................................................... (3,126,700)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain on investments ..................................... 143,533,499
Net realized loss from foreign currency transactions ................. (28,338)
Net unrealized appreciation of investments ........................... 202,936,543
Net unrealized appreciation on translation of assets denominated
in foreign currencies ............................................ 7,417
-------------
NET GAIN ON INVESTMENTS .................................................................. 346,449,121
--------------
INCREASE IN NET ASSETS FROM OPERATIONS ................................................... $343,322,421
==============
</TABLE>
- -------------------
See Notes to Financial Statements.
15
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
JULY 27, 1999* TO
DECEMBER 31, 1999
----------------------
OPERATIONS:
<S> <C>
Net investment loss ............................................................ $ (3,126,700)
Net realized gain on investments ............................................... 143,533,499
Net realized loss from foreign currency transactions ........................... (28,338)
Net unrealized appreciation of investments ..................................... 202,936,543
Net unrealized appreciation on translation of assets
denominated in foreign currencies .............................................. 7,417
--------------
INCREASE IN NET ASSETS FROM OPERATIONS ......................................... 343,322,421
--------------
DISTRIBUTION TO SHAREHOLDERS:
Net realized gain on investments ............................................... (33,229,352)
--------------
DECREASE IN NET ASSETS FROM DISTRIBUTION ....................................... (33,229,352)
--------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
--------------------
JULY 27, 1999* TO
DECEMBER 31, 1999
--------------------
CAPITAL SHARE TRANSACTIONS:
<S> <C> <C>
Net proceeds from issuance of Common Stock ................ 23,269,963 563,059,814
Shares issued in payment of gain distribution ............. 972,490 32,034,021
-------------- --------------
INCREASE IN NET ASSETS FROM CAPITAL SHARE TRANSACTIONS .... 24,242,453 595,093,835
============== ==============
INCREASE IN NET ASSETS ......................................................... 905,186,904
NET ASSETS:
Beginning of period ............................................................ 100,007
--------------
END OF PERIOD (including accumulated net investment loss of $3,655) ............ $905,286,911
==============
</TABLE>
- -----------
* Commencement of operations.
See Notes to Financial Statements.
16
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION -- Seligman New Technologies Fund, Inc. (the "Fund") was
incorporated in Maryland on May 19, 1999 and subsequently was organized and
registered under the Investment Company Act of 1940 and the Securities Act of
1933 as a non-diversified, closed-end management investment company. The Fund
had no operations prior to July 27, 1999 (commencement of operations) other than
those relating to organizational matters and the sale to Seligman Advisors, Inc.
of 4,124 shares of Common Stock.
2. SIGNIFICANT ACCOUNTING POLICIES -- The financial statements have been
prepared in conformity with generally accepted accounting principles which
require management to make certain estimates and assumptions at the date of the
financial statements. The following summarizes the significant accounting
policies of the Fund:
a. SECURITY VALUATION -- Investments in convertible securities and common stocks
are valued at current market values or, in their absence, at fair values
determined in good faith in accordance with procedures approved by the Board
of Directors. Securities traded on an exchange are valued at last sales
prices or, in their absence and in the case of over-the-counter securities,
at the mean of bid and asked prices. Short-term holdings maturing in 60 days
or less are valued at amortized cost.
The Fund may invest in equity securities of privately-owned technology
companies that plan to conduct an initial public offering within a period of
several months to three years from the time the Fund makes its investment.
These are referred to as venture capital companies. Such investments will be
valued at fair value, which is expected to be cost unless the manager
determines, pursuant to the Fund's valuation procedures, that such a
valuation is no longer fair or appropriate. Examples of cases where cost may
no longer be appropriate include sales of similar securities to third parties
at different prices, or if a venture capital company in which the Fund
invests undertakes an initial public offering. In such situations, the Fund's
investment will be revalued in a manner that the manager, following
procedures approved by the Board of Directors, determines best reflects its
fair value. In addition, the Fund may hold restricted securities of a class
that have been sold to the public. The fair valuation of these restricted
securities will often be the market value of the publicly traded shares less
a discount to reflect contractual or legal restrictions limiting resale.
At December 31, 1999, market quotations were not readily available for
securities valued at $179,495,429 (19.8% of net assets). Because of the
inherent uncertainty of valuation, the estimated values may differ
significantly from the values that would have been used had a ready market
for the securities existed.
b. FEDERAL TAXES-- There is no provision for federal income tax. The Fund will
elect to be taxed as a regula-ted investment company and intends to
distribute substantially all taxable net income and net gain realized.
c. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME -- Investment
transactions are recorded on trade dates. Identified cost of investments sold
is used for both financial statement and federal income tax purposes.
Dividends receivable and payable are recorded on ex-dividend dates. Interest
income is recorded on an accrual basis.
d. DISTRIBUTIONS TO STOCKHOLDERS -- The treatment for financial statement
purposes of distributions made to stockholders during the period from net
investment income or net realized gains may differ from their ultimate
treatment for federal income tax purposes. These differences are caused
primarily by differences in the timing of the recognition of certain
components of income, expense, or realized capital gain for federal income
tax purposes. Where such differences are permanent in nature, they are
reclassified in the components of net assets based on their ultimate
characterization for federal income tax purposes. Any such reclassification
will have no effect on net investment assets, results of operations, or net
asset value per share of the Fund.
e. ORGANIZATION AND OFFERING EXPENSES -- Expenses incurred to establish the Fund
have been expensed as organization expenses. Expenses relating to the public
offering of the Fund's Common shares were charged to capital at the time of
issuance of shares. Organization expenses and offering expenses amounted to
$32,500 and $1,265,055, respectively.
3. PURCHASES AND SALES OF SECURITIES -- Purchases and sales of portfolio
securities, excluding short-term investments, for the period July 27, 1999 to
December 31, 1999 amounted to $937,019,572 and $435,207,360, respectively. The
cost of investments for federal income tax purposes was substantially the same
as the cost for financial reporting purposes, and the tax basis gross unrealized
appreciation and depreciation of portfolio securities amounted to $221,678,839
and $18,734,879, respectively.
4. REPURCHASE OFFERS -- To provide investors with a limited degree of liquidity,
the Fund will make quarterly offers to repurchase its shares. Repurchase offers
will be limited to 5% of the number of the Fund's outstanding shares on the date
the repurchase requests are due. The Fund may offer to repurchase more than 5%
(but not more than 25%) of its shares in any quarter with the approval of the
Fund's Board of Directors. In the event the repurchase offer is oversubscribed,
the Fund may, but is not required to, repurchase additional shares, but only up
to a maximum of 2% of the outstanding shares of the Fund. If the Fund determines
not to repurchase additional shares, it will repurchase shares on a pro rata
basis. The repurchase price will be equal to the share's net asset value on the
date specified in the notice of repurchase. The repurchase pricing date may be
as much as fourteen days after the date that the repurchase requests are due.
The Fund expects that
17
<PAGE>
NOTES TO FINANCIAL STATEMENTS
payment of the repurchase price will be made on the third business day after the
repurchase pricing date, but the payment may be made as much as seven dates
after such pricing date.
The Fund's first repurchase offer commenced in December 1999. Subsequent
repurchase offers will commence each March, June, September and December, and
each such repurchase offer will be completed in the following month, ordinarily
on the second Friday of that month. The Fund's first repurchase offer for 5% of
its outstanding shares was completed on January 14, 2000, with 1.2% of the
Fund's shares repurchased for proceeds of $10,824,020.
5. MANAGEMENT FEE, STOCKHOLDER SERVICING FEE, AND OTHER TRANSACTIONS-- J. & W.
Seligman & Co. Incorporated (the "Manager") manages the affairs of the Fund and
provides the necessary personnel and facilities. Compensation of all officers of
the Fund, all directors of the Fund who are employees or consultants of the
Manager, and all personnel of the fund and the Manager is paid by the Manager.
The Manager receives a fee, calculated daily and payable monthly, equal to 2.00%
per annum of the Fund's average daily net assets.
Brokers or dealers that sold shares of the Fund can enter into agreements
with the Fund and receive a continuing fee of up to 0.50% on an annual basis,
payable quarterly, of the average daily net assets of Fund shares attributable
to the particular broker or dealer for providing personal services and/or the
maintenance of shareholder accounts. For the period ended December 31, 1999,
such fees aggregated $1,458,849 or 0.50% per annum of the Fund's average daily
net assets.
Seligman Data Corp., which is owned by certain associated investment
companies, charged the Fund at cost $644,264 for stockholder account services.
Certain officers and directors of the fund are officers or directors of the
Manager, the Distributor, Seligman Services, Inc., and/or Seligman Data Corp.
The Fund has a compensation arrangement under which directors who receive
fees may elect to defer receiving such fees. Directors may elect to have their
deferred fees accrue interest or earn a return based on the performance of
certain other funds in the Seligman Group of Investment Companies. The cost of
such fees and earnings accrued thereon is included in directors' fees and
expenses, and the accumulated balance thereof at December 31, 1999, of $3,655 is
included in other liabilities. Deferred fees and related accrued earnings are
not deductible for federal income tax purposes until such amounts are paid.
6. RESTRICTED SECURITIES -- At December 31, 1999, the Fund owned private
placement investments that were purchased through private offerings and cannot
be sold without prior registration under the Securities Act of 1933 or pursuant
to an exemption therefrom. In addition, the Fund has agreed to further
restrictions on the disposition of these holdings as set forth in various
agreements entered into in connection with the purchase of these investments.
These investments are valued at fair value as determined in accordance with
procedures approved by the Board of Directors of the Fund. The acquisition dates
of these investments, along with their costs and values at December 31, 1999,
are as follows:
<TABLE>
<CAPTION>
INVESTMENTS ACQUISITION DATE COST VALUE
- ------------- ---------------- --------- ----------
LIMITED PARTNERSHIPS:
<S> <C> <C> <C>
Edison Venture Fund IV 10/18/99 $1,048,762 $1,044,290
Compass Venture Partners 11/22/99 98,087 89,999
---------- ---------
1,146,849 1,134,289
---------- ---------
CONVERTIBLE PROMISSORY NOTE:
Microcast, 0%-10%, due 12/16/2000 12/16/99 670,000 670,000
---------- ---------
CONVERTIBLE PREFERRED STOCKS:
Advanced Recognition Technologies (Series D) 12/6/99 3,285,655 3,280,000
Aeneid (Series D) 10/15/99 4,863,737 4,860,000
AllAdvantage.com (Series C) 9/22/99 3,287,004 3,280,001
APB Online (Series B) (formerly APB Multimedia) 8/4/99 2,676,163 2,675,902
Bernard Technologies (Series D) 11/8/99 3,957,011 3,950,001
Bill Gross' idealab! (Series D) 12/22/99 6,320,000 6,320,000
Blaze Software (Series BB) 12/31/99 3,160,000 3,160,000
Buildnet (Series C) 10/29/99 4,747,388 4,740,000
Chorum Technologies (Series D) 11/10/99 3,244,092 3,240,979
Cielo Communications (Series C) 11/17/99 3,164,342 3,160,000
CollegeClub.com (Series C) 10/28/99 5,203,467 5,203,466
Colo.com (Series C) 12/17/99 6,320,000 6,320,000
Corvis (Series H) 12/16/99 1,579,999 1,579,999
Enterworks (Series A) 12/30/99 3,160,000 3,160,000
</TABLE>
18
<PAGE>
NOTES TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
INVESTMENTS ACQUISITION DATE COST VALUE
- ------------- ---------------- --------- ----------
<S> <C> <C> <C>
FlashPoint Technology (Series E) 9/10/99 $4,200,000 $4,200,000
Geographic Network Affiliates
International (Series A) 12/29/99 6,320,000 6,320,000
Global Medical Products (Series A) 9/15/99 5,471,035 5,460,000
Homegain.com (Series C) 12/29/99 7,110,000 7,110,000
HomePage.com (Series C) 10/20/99 1,600,000 1,600,000
Impresse (Series C) 11/15/99 3,165,525 3,159,995
Kozmo.com (Series D) 8/3/99 2,526,860 2,520,000
Mainspring Communications (Series E) 11/22/99 1,580,003 1,580,003
MaMaMedia (Series D) 8/6/99 3,365,302 3,359,999
MarketFirst Software (Series D) 9/10/99 1,636,357 1,634,754
Microtune (Series D) 10/15/99 2,436,280 2,430,000
More.com (Series D) 10/22/99 3,240,004 3,240,004
Multitude (Series E) 12/10/99 6,320,000 6,320,000
NeuVis (Series B) 10/6/99 3,245,360 3,240,000
New Focus (Series G) 12/23/99 1,738,003 1,738,002
Optical Networks (Series G) 12/30/99 3,160,001 3,160,000
PointOne Telecommunications (Series B) 9/24/99 6,560,000 6,560,000
Pointshare (Series C) 9/9/99 3,360,000 3,360,000
RC Networks (Series C) 12/10/99 790,001 790,001
RealEstate.com (Series C) 10/6/99 4,056,694 4,050,000
RealNames (Series C) 8/5/99 588,002 588,001
Reciprocal (Series H) 11/12/99 3,239,999 3,239,998
Screaming Media.net (Series B 10/5/99 3,268,876 3,264,128
Silicon Wave (Series C) 12/6/99 5,135,000 5,135,000
Snowball.com (Series C) 12/20/99 3,160,000 3,160,000
Softcom (Series B) 12/23/99 5,135,000 5,135,000
UGO Networks (Series D) 11/12/99 3,162,333 3,160,000
Universal Access (Series E) 11/11/99 2,834,999 2,834,999
V store (Series B) 11/2/99 3,166,436 3,160,000
Vuent (Series D) (formerly Adaptive Media) 8/12/99 3,362,041 3,360,000
Wine.com (Series F) 11/9/99 2,593,560 2,592,000
Younology (Series A) 11/24/99 3,555,002 3,555,002
Yupi Internet (Series C) 11/5/99 4,740,001 4,740,001
----------- -----------
170,791,532 170,687,235
----------- -----------
COMMON STOCKS:
CrossRoads Systems 8/10/99 1,008,000 6,798,960
E-Stamp 8/4/99 1,260,000 2,703,941
LetsBuyIt.com 12/22/99 3,157,215 3,153,773
Microcast 9/15/99 3,366,177 3,359,998
Network Event Theater 8/13/99 9,004,016 11,717,814
Shopfast 12/20/99 479,273 490,134
SourcingLink.net 8/9/99 2,705,093 11,021,484
----------- -----------
20,979,774 39,246,104
----------- -----------
$193,588,155 $211,737,628
============ ============
</TABLE>
19
<PAGE>
NOTES TO FINANCIAL STATEMENTS
7. AFFILIATED ISSUERS -- As defined under the Investment Company Act of 1940, as
amended, affiliated issuers are those issuers in which the Fund's holdings
represent 5% or more of the outstanding voting securities of the issuer. A
summary of the Fund's transactions in the securities of the issuers during the
year ended December 31, 1999, is as follows:
<TABLE>
<CAPTION>
ENDING
SHARES/ REALIZED DIVIDEND ENDING
AFFILIATE UNITS GAIN INCOME VALUE
- -------- --------- --------- -------- --------
<S> <C> <C>
Aeneid 2,271,028 shs. $4,860,000
Bernard Technologies 1,436,364 3,950,001
Geographic Network Affiliates 6,320 units 6,320,000
Multitude 2,953,271 shs. 6,320,000
NeuVis 2,304,246 3,240,000
PointOne Telecommunications 1,166,015 6,560,000
Softcom 2,334,091 5,135,000
Younology 769,481 3,555,002
------------
TOTAL $39,940,003
============
</TABLE>
20
<PAGE>
FINANCIAL HIGHLIGHTS
The table below is intended to help you understand the Fund's financial
performance from its inception. Certain information reflects financial results
for a single share that was held throughout the period shown. Per share amounts
are calculated using average shares outstanding. "Total return" shows the rate
that you would have earned (or lost) on an investment in the Fund, assuming you
reinvested your capital gain distribution. Total return does not reflect any
sales charges and is not annualized.
7/27/99*
TO
12/31/99
---------
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD $24.25
------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (0.13)
Net realized and unrealized gain on investments 14.70
------
INCREASE FROM INVESTMENT OPERATIONS 14.57
Distributions from net realized capital gains (1.43)
Offering costs (0.05)
------
NET INCREASE IN NET ASSET VALUE 13.09
------
NET ASSET VALUE, END OF PERIOD $37.34
======
TOTAL RETURN: 60.65%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) $905,287
Ratio of expenses to average net assets 2.78%+
Ratio of net investment loss to average net assets (1.06)%+
Portfolio turnover rate 112.41%
- ---------------------
* Commencement of operations.
+ Annualized.
See Notes to Financial Statements.
21
<PAGE>
REPORT OF INDEPENDENT AUDITORS
THE BOARD OF DIRECTORS AND SHAREHOLDERS,
SELIGMAN NEW TECHNOLOGIES FUND, INC.
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Seligman New Technologies Fund, Inc. as of
December 31, 1999, the related statements of operations and of changes in net
assets, and the financial highlights for the period from July 27, 1999
(commencement of operations) to December 31, 1999. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and 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 December 31, 1999, by
correspondence with the Fund's custodian and brokers; where replies were not
received from brokers we performed other auditing procedures. 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, such financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Seligman New Technologies Fund, Inc. as of December 31, 1999, the results of its
operations, the changes in its net assets, and the financial highlights for the
period from July 27, 1999 to December 31, 1999, in conformity with generally
accepted accounting principles.
DELOITTE & TOUCHE LLP
New York, New York
February 11, 2000
22
<PAGE>
FEDERAL TAX STATUS OF 1999
GAIN DISTRIBUTION FOR TAXABLE ACCOUNTS
A short-term capital gain distribution of $1.427 per share, from gain realized
on investments during the period July 27, 1999 to October 31, 1999, was paid on
November 23, 1999. Net short-term gain is taxable as ordinary income whether
paid to you in cash or shares.
If the distribution was received in shares, the per share cost basis for federal
income tax purposes is $32.94.
A 1999 year-end statement of account activity and a 1999 tax package, which may
include a Form 1099-DIV, have been mailed to each shareholder. Form 1099-DIV
shows the distributions paid to the shareholder during the year. The information
shown on Forms 1099-DIV is reported to the Internal Revenue Service as required
by federal regulations.
FOR MORE INFORMATION
MANAGER
J. & W. Seligman & Co. Incorporated
100 Park Avenue
New York, NY 10017
GENERAL COUNSEL
Sullivan & Cromwell
INDEPENDENT AUDITORS
Deloitte & Touche LLP
GENERAL DISTRIBUTOR
Seligman Advisors, Inc.
100 Park Avenue
New York, NY 10017
SHAREHOLDER SERVICE AGENT
Seligman Data Corp.
100 Park Avenue
New York, NY 10017
24-HOUR AUTOMATED
TELEPHONE ACCESS
SERVICE
(800) 622-4597
23
<PAGE>
BOARD OF DIRECTORS
JOHN R. GALVIN 2, 4
DEAN, Fletcher School of Law and Diplomacy
at Tufts University
DIRECTOR, Raytheon Company
ALICE S. ILCHMAN 3, 4
TRUSTEE, Committee for Economic Development
CHAIRMAN, The Rockefeller Foundation
FRANK A. MCPHERSON 2, 4
DIRECTOR, Kimberly-Clark Corporation
DIRECTOR, Baptist Medical Center
DIRECTOR, Conoco Inc.
JOHN E. MEROW 2, 4
RETIRED CHAIRMAN AND SENIOR PARTNER,
Sullivan & Cromwell, Law Firm
DIRECTOR, Commonwealth Industries, Inc.
DIRECTOR, New York Presbyterian Hospital
BETSY S. MICHEL 2, 4
TRUSTEE, The Geraldine R. Dodge Foundation
WILLIAM C. MORRIS 1
CHAIRMAN
CHAIRMAN OF THE BOARD,
J. & W. Seligman & Co. Incorporated
CHAIRMAN, Carbo Ceramics Inc.
DIRECTOR, Kerr-McGee Corporation
JAMES C. PITNEY 3, 4
RETIRED PARTNEr, Pitney, Hardin, Kipp & Szuch, Law Firm
JAMES Q. RIORDAN 3, 4
DIRECTOR, KeySpan Energy Corporation
TRUSTEE, Committee for Economic Development
DIRECTOR, Public Broadcasting Service
RICHARD R. SCHMALTZ 1
MANAGING DIRECTOR, DIRECTOR OF INVESTMENTS,
J. & W. Seligman & Co. Incorporated
TRUSTEE EMERITUS, Colby College
ROBERT L. SHAFER 3, 4
RETIRED VICE PRESIDENT, Pfizer Inc.
JAMES N. WHITSON 2, 4
DIRECTOR AND CONSULTANT, Sammons Enterprises, Inc.
DIRECTOR, C-SPAN
DIRECTOR, CommScope, Inc.
Brian T. Zino 1
PRESIDENT
PRESIDENT, J. & W. Seligman & Co. Incorporated
CHAIRMAN, Seligman Data Corp.
DIRECTOR, ICI Mutual Insurance Company
MEMBER OF THE BOARD OF GOVERNORS,
Investment Company Institute
DIRECTOR EMERITUS
FRED E. BROWN
DIRECTOR AND CONSULTANT,
J. & W. Seligman & Co. Incorporated
- ----------------
Member: 1 Executive Committee
2 Audit Committee
3 Director Nominating Committee
4 Board Operations Committee
EXECUTIVE OFFICERS
WILLIAM C. MORRIS
CHAIRMAN
BRIAN T. ZINO
PRESIDENT
LAWRENCE P. VOGEL
VICE PRESIDENT
STORM BOSWICK
VICE PRESIDENT
PAUL H. WICK
VICE PRESIDENT
THOMAS G. ROSE
TREASURER
FRANK J. NASTA
SECRETARY
24
<PAGE>
GLOSSARY OF FINANCIAL TERMS
CAPITAL GAIN DISTRIBUTION -- A payment to mutual fund shareholders of profits
realized on the sale of securities in a fund's portfolio.
CAPITAL APPRECIATION/DEPRECIATION -- An increase or decrease in the market value
of a mutual fund's portfolio securities, which is reflected in the net asset
value of the fund's shares. Capital appreciation/depreciation of an individual
security is in relation to the original purchase price.
COMPOUNDING -- The change in the value of an investment as shareholders receive
earnings on their investment's earnings. For example, if $1,000 is invested at a
fixed rate of 7% a year, the initial investment is worth $1,070 after one year.
If the return is compounded, second year earnings will not be based on the
original $1,000, but on the $1,070, which includes the first year's earnings.
CONTINGENT DEFERRED SALES CHARGE (CDSC) -- Depending on the class of shares
owned, a fee charged by a mutual fund when shares are sold back to the fund. The
CDSC expires after a fixed time period.
DIVIDEND -- A payment by a mutual fund, usually derived from the fund's net
investment income (dividends and interest less expenses).
DIVIDEND YIELD -- A measurement of a fund's dividend as a percentage of the
maximum offering price or net asset value.
EXPENSE RATIO -- The cost of doing business for a mutual fund, expressed as a
percent of the fund's net assets.
INVESTMENT OBJECTIVE -- The shared investment goal of a fund and its
shareholders.
MANAGEMENT FEE -- The amount paid by a mutual fund to its investment advisor(s).
MULTIPLE CLASSES OF SHARES -- Although an individual mutual fund invests in only
one portfolio of securities, it may offer investors several purchase options
which are "classes" of shares. Multiple classes permit shareholders to choose
the fee structure that best meets their needs and goals. Generally, each class
will differ in terms of how and when sales charges and certain fees are
assessed.
NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. (NASD) -- A self-regulatory
body with authority over firms that distribute mutual funds.
NET ASSET VALUE (NAV) PER SHARE -- The market worth of one fund share, obtained
by adding a mutual fund's total assets (securities, cash, and any accrued
earnings), subtracting liabilities, and dividing the resulting net assets by the
number of shares outstanding.
OFFERING PRICE -- The price at which a mutual fund's share can be purchased. The
offering price per share is the current net asset value plus any sales charge.
PORTFOLIO TURNOVER -- A measure of the trading activity in a mutual fund's
investment portfolio that reflects how often securities are bought and sold.
PROSPECTUS -- The legal document describing a mutual fund to all prospective
shareholders. It contains information required by the Securities and Exchange
Commission (SEC), such as a fund's investment objective and policies, services,
investment restrictions, how shares are bought and sold, fund fees and other
charges, and the fund's financial highlights.
SEC YIELD -- SEC Yield refers to the net income earned by a fund during a recent
30-day period. This income is annualized and then divided by the maximum
offering price per share on the last day of the 30-day period. The SEC Yield
formula reflects semiannual compounding.
SECURITIES AND EXCHANGE COMMISSION -- The primary US federal agency that
regulates the registration and distribution of mutual fund shares.
STATEMENT OF ADDITIONAL INFORMATION -- A document that contains more detailed
information about an investment company and that supplements the prospectus. It
is available at no charge upon request.
TOTAL RETURN -- A measure of a fund's performance encompassing all elements of
return. Reflects the change in share price over a given period and assumes all
distributions are taken in additional fund shares. The AVERAGE ANNUAL TOTAL
RETURN represents the average annual compounded rate of return for the periods
presented.
YIELD ON SECURITIES -- For bonds, the current yield is the coupon rate of
interest, divided by the purchase price. For stocks, the yield is measured by
dividing dividends paid by the market price of the stock.
- -----------
Adapted from the Investment Company Institute's 1999 MUTUAL FUND FACT BOOK.
25
<PAGE>
THIS REPORT IS INTENDED ONLY FOR THE INFORMATION OF SHAREHOLDERS OR THOSE WHO
HAVE RECEIVED THE OFFERING PROSPECTUS COVERING SHARES OF COMMON STOCK OF
SELIGMAN NEW TECHNOLOGIES FUND, INC., WHICH CONTAINS INFORMATION ABOUT THE SALES
CHARGES, MANAGEMENT FEE, AND OTHER COSTS. PLEASE READ THE PROSPECTUS CAREFULLY
BEFORE INVESTING OR SENDING MONEY.
SELIGMAN ADVISORS, INC.
AN AFFILIATE OF
[LOGO]
J.W.SELIGMAN & CO.
INCORPORATION
100 PARK AVENUE, NEW YORK, NY 10017
CENT2 12/99 [GRAPHIC] Printed on Recycled Paper
