<PAGE>
PRESIDENT'S LETTER
Dear Oberweis Funds Shareholder:
As you know, our funds invest in extraordinarily rapidly growing companies. The
average sales growth rates for the last year and for the most recently reported
quarter were in excess of 80% for each of our three portfolios. Earnings growth
rates exceeded 70% for the most recently reported quarter in each of the three
portfolios. Contrast that to the S&P 500 where sales growth was approximately
14% for the last 12 months and approximately 25% for the Russell 2000, companies
according to William O'Neil & Co. Earnings growth rates for the most recently
reported quarter were approximately 17% and 23% for the S&P 500 and Russell
2000, respectively, according to the same source. During most periods in the
past, investors have been willing to pay a substantial P/E premium for such
extraordinary growth. But the current market environment has been characterized
by a search for liquidity, focusing on the largest, most liquid (and generally
slower growing) companies. Although this "irrational exuberance" for big company
stocks appears to have begun to broaden in May and June, the relative P/E ratios
of the three Oberweis Funds portfolios appear to still be quite attractive. The
P/E, based on next year's earnings estimates, for the Mid-Cap Portfolio was 24,
a very modest premium to the 17 P/E for the S&P 500 and Russell 2000 when the
difference in growth rates is considered. The P/E for the Emerging Growth
Portfolio was an even lower 21 and the P/E for the Micro-Cap Portfolio was an
astoundingly low 16, the first time in my memory that the average P/E for one of
our portfolios was actually lower than the market.
As I mentioned, May seemed to represent a turnaround in market interest in
rapidly growing companies. The second quarter produced a 13.4% gain for the
Micro-Cap Portfolio, resulting in a 5.2% gain for the first half of the year.
The Mid-Cap Portfolio gained 15.4% during the second quarter, producing a 1.3%
gain for the first half. The Emerging Growth Portfolio had the strongest second
quarter gain at 19.8%, but it had the most ground to gain due to the very
difficult first quarter. All in all, while the first half of this year was very
difficult, it appears that market interest is again beginning to focus on
exactly the type of stocks we own. While there are no guarantees, we expect
rapidly growing companies to outperform the broad market during the second half
of the year, as they have frequently done in the past.
Finally, I would again like to sincerely thank you for investing with me in our
funds. I realize that the short term share volatility can be frustrating; but
over the long run, accepting that volatility--or even taking advantage of it by
buying on dips--should produce reasonable rewards. Just a reminder on our Micro-
Cap portfolio--we do intend to close the portfolio when it hits $60 million in
assets. We believe that we can only invest a very limited sum in such small
companies (the average market cap is only $100 million). We have to limit the
amount of money we manage in this area or limit the performance of the fund. We
choose to limit the amount of money. It is currently approaching $40 million. If
you have any questions about your account, please call shareholder services at
800-245-7311. We have a new automated service to help provide NAVs quickly and
efficiently. If you have any questions about the fund's investment policies,
please feel free to call me or any of our three portfolio managers, Martin
Yokosawa, Jim Oberweis Jr., or Jane Snorek, C.F.A. We're normally available
from 7:30 AM until 6:00 PM central time and from 9:30 until noon on Saturday at
800-323-6166 or at 630-801-6000 in the Chicago area.
Sincerely,
/s/ James D. Oberweis
James D. Oberweis
President
1
<PAGE>
OBERWEIS EMERGING GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 1997 (value in thousands)
Equity Securities - 96.5%
<TABLE>
<CAPTION>
Shares Company (Closing Price) Value
- --------------------------------------------------------------------------------
<S> <C> <C>
Building - Residential/Commercial - 0.6%
32,000 Monoco Coach Corp. @ 24.250 $ 776
20,000 Pacific Greystone Corp. @ 16.062 321
1,097
Chemicals - 2.1%
100,000 ** Zoltek Companies, Inc. @ 38.250 3,825
Commercial Services - 3.6%
18,500 Abacus Direct Corp. @ 32.500 601
25,000 Apac Teleservices, Inc. @ 19.437 486
15,000 Forrester Research, Inc. @ 29.437 442
5,000 Lason, Inc. @ 28.125 141
35,000 * Merrill Corp. @ 36.375 1,273
50,000 NCO Group, Inc. @ 29.375 1,469
30,000 Personnel Group of America @ 28.812 864
32,000 Precision Response Corp. @ 16.500 528
49,100 Viisage Technologies, Inc. @ 17.375 853
6,657
Computer - Graphics - 2.1%
135,000 3D Labs, Inc. Ltd. @ 29.000 3,915
Computer - Integrated Systems - 0.9%
60,000 Apex PC Solutions, Inc. @ 19.750 1,185
40,000 Peerless Systems Corp. @ 13.750 550
1,735
Computer - Local Networks - 2.4%
190,000 Ace Comm Corp. @ 19.625 3,729
70,000 Larscom, Inc. CL A @ 10.750 753
4,482
Computer - Memory Devices - 1.1%
86,000 ATL Products, Inc. @ 9.000 774
20,000 ** Network Appliance, Inc. @ 38.000 760
50,000 Procom Technology, Inc. @ 10.750 538
2,072
Computer Peripherals - 2.9%
110,000 Eltron International, Inc. @ 29.750 3,273
60,000 Splash Tech Holdings, Inc. @ 36.125 2,168
5,441
Computer Services - 3.1%
20,000 Ciber, Inc. @ 34.187 684
30,000 Data Dimensions, Inc. @ 22.000 660
19,000 Harbinger Corp. @ 28.000 532
50,000 Information Management Resources @ 45.500 2,275
25,000 Renaissance Solutions, Inc. @ 37.000 925
30,000 Staffmark, Inc. @ 22.375 671
5,747
Computer Software - 10.9%
60,000 Aspen Technology, Inc. @ 37.625 2,258
40,000 Eagle River Interactive, Inc. @ 8.000 320
51,000 ** Electronics for Imaging @ 47.250 2,410
4,000 Engineering Animation, Inc. @ 33.750 135
10,000 Genesys Telecomm Labs, Inc. @ 27.750 278
60,000 Impath, Inc. @ 27.250 1,635
26,000 Industri-Matematik International @ 16.250 423
20,000 Iona Technologies PLC-AD @ 19.750 395
20,000 McAffee Associates, Inc. @ 63.125 1,263
2,000 MDSI Mobile Data Solutions, Inc. @ 26.000 52
20,000 Memco Software, Ltd. @ 18.250 365
17,000 Natural Microsystems Corp. @ 36.000 612
52,500 Remedy Corp. @ 40.000 2,100
55,000 ** Scopus Technology, Inc. @ 22.375 1,231
25,000 Seachange International, Inc. @ 28.250 706
20,000 Select Software Tools @ 13.250 265
92,000 Simulation Sciences, Inc. @ 15.250 1,403
30,000 Summit Design, Inc. @ 8.125 244
85,000 Technomatix Technologies @ 32.500 2,762
30,000 ** Veritas Software Corp. @ 50.250 1,508
20,365
Drugs - 0.9%
40,000 ** Dura Pharmaceuticals, Inc. @ 39.875 1,595
Electrical & Electronic Equipment - 2.2%
40,000 Encore Wire Corp. @ 30.500 1,220
82,000 Harmonic Lightwaves, Inc. @ 17.125 1,404
47,500 Proxim, Inc. @ 24.250 1,152
25,000 Thermedics Detection, Inc. @ 12.000 300
4,076
Electronics - Components/Semiconductors - 7.4%
130,000 ** Anadigics, Inc. @ 31.000 4,030
130,000 ** IKOS Systems @ 21.375 2,779
35,400 Micrel, Inc. @ 51.000 1,805
50,000 PRI Automation, Inc. @ 37.937 1,897
40,000 R F Micro Devices, Inc. @ 19.125 765
20,000 Semtech Corporation @ 36.500 730
50,000 ** Speedfam International, Inc. @ 35.875 1,794
13,800
Electronics - Laser System/Components - 1.6%
40,000 * American Precision Industry @ 19.375 775
15,000 Chicago Miniature Lamp, Inc. @ 24.875 373
37,000 Cymer, Inc. @ 48.750 1,804
2,952
Electronics - Miscellaneous Components - 3.5%
25,000 Radisys Corp. @ 39.750 994
50,000 ** Sawtech, Inc. @ 33.750 1,687
60,000 * Technitrol, Inc. @ 27.375 1,642
260,000 WPI Group, Inc. @ 8.750 2,275
6,598
</TABLE>
See notes to Portfolio of Investments. 2
<PAGE>
Equity Securities - continued
<TABLE>
<CAPTION>
Shares Company (Closing Price) Value
<S> <C> <C>
Financial - Business Services - 1.5%
125,000 Advance Paradigm, Inc. @ 18.500 $ 2,312
50,000 Intelligroup, Inc. @ 9.625 481
2,793
Financial - Consumer Loans - 0.5%
15,000 Southern Pacific Funding @ 16.625 249
15,000 * Texas Regional Bancshare @ 42.000 630
879
Food - Miscellaneous - 1.7%
10,000 Jutzrenka @ 20.082 201
20,000 Morningstar Group, Inc. @ 29.375 587
30,000 Suiza Foods Corp. @ 41.000 1,230
150,000 Unimark Group, Inc. @ 8.000 1,200
3,218
Leisure & Recreation Products - 2.7%
101,250 Regal Cinemas, Inc. @ 33.000 3,341
32,500 Rockshox, Inc. @ 17.250 561
50,000 Suburban Lodges of America @ 21.000 1,050
4,952
Machinery - 3.8%
50,000 * Chart Industries, Inc. @ 27.375 1,369
20,000 * D.T. Industries, Inc. @ 35.750 715
200,000 * JLG Industries @ 13.625 2,725
100,000 Omniquip International, Inc. @ 23.125 2,312
7,121
Medical - Equipment & Supplies - 1.8%
60,000 ** ESC Medical Systems, Ltd. @ 25.500 1,530
50,000 ** Spine-Tech, Inc. @ 37.125 1,856
3,386
Medical - Nursing Homes/
Outpatient Care - 1.7%
30,000 Assisted Living Concepts @ 27.625 829
30,000 National Surgery Centers @ 35.375 1,061
120,000 Prime Medical Services, Inc. @ 10.812 1,297
3,187
Medical - Research - 3.9%
250,000 Bio-Technology General @ 13.500 3,375
45,000 Parexel International Corp. @ 31.750 1,429
51,500 Qiagen NA @ 48.187 2,482
7,286
Metal Products/Fabrication - 2.4%
40,000 Kaynar Technologies, Inc. @ 18.125 725
20,000 Lone Star Technologies, Inc. @ 28.625 572
110,000 Oregon Metallurgical, Inc. @ 28.125 3,094
4,391
Miscellaneous - 0.7%
30,000 MPP Certificates @ 42.598 1,278
Oil & Gas - 2.4%
40,000 Hvide Marine, Inc. CL A @ 22.125 885
100,000 Marine Drilling Company, Inc. @ 19.625 1,962
30,000 * Noble Affiliates, Inc. @ 38.687 1,161
40,000 * USX Delhi Group @ 13.125 525
4,533
Restaurants - 7.7%
30,000 Dave & Buster's, Inc. @ 26.750 802
80,000 Einstein/Noah Bagel Corp. @ 11.937 955
295,000 Logan's Roadhouse, Inc. @ 23.750 7,006
120,000 Lone Star Steakhouse & Saloon, Inc. @ 26.000 3,120
45,000 Papa John's International, Inc. @ 36.750 1,654
30,000 Rainforest Cafe, Inc. @ 25.375 761
14,298
Retail - Apparel - 2.0%
40,000 Delia's, Inc. @ 18.500 740
50,000 ** Gadzook's, Inc. @ 19.500 975
45,000 Just for Feet, Inc. @ 17.437 785
40,000 Pacific Sunwear of CA, Inc. @ 32.250 1,290
3,790
Retail/Wholesale - Computers - 1.0%
60,000 CHS Electronics, Inc. @ 26.500 1,590
10,000 Computerland @ 24.646 246
1,836
Retail - Supermarkets - 0.4%
27,500 Wild Oats Market, Inc. @ 25.500 701
Telecommunications - Equipment - 14.5%
20,000 Boston Technology, Inc. @ 29.562 591
200,000 Datum, Inc. @ 31.000 6,200
150,000 ** Mastec, Inc. @ 47.312 7,097
180,000 ** MRV Communications, Inc. @ 29.500 5,310
53,000 ** P-Com, Inc. @ 33.000 1,749
40,000 ** Premiere Technologies, Inc. @ 26.000 1,040
60,000 Remec, Inc. @ 23.500 1,410
55,000 Teledata Communications @ 34.375 1,891
100,000 Yurie Systems, Inc. @ 17.062 1,706
26,994
Telecommunications - Services - 2.2%
40,000 Brightpoint, Inc. @ 32.562 1,302
30,000 International Telecomm Data Systems @ 24.500 735
47,400 Star Telecommunications @ 13.250 628
40,000 Vimple Communications @ 38.000 1,520
4,185
Trucking - 0.3%
25,000 Knight Transportation, Inc. @ 25.375 634
Total Equity Securities
(Cost: $128,144,000) $179,819
</TABLE>
See notes to Portfolio of Investments.
3
<PAGE>
<TABLE>
<CAPTION>
Convertible Debt Obligations - 1.9%
Face Amount Value
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Finance - Consumer Loans - 0.4%
$ 800,000 * Cityscape Financial, Inc.
6.00% due 05-01-06 @ 89.000 $ 712
Medical - Management Services - 0.8%
1,500,000 * Complete Management, Inc.
8.00% due 12-15-03 @ 100.500 1,507
Pollution Control - 0.0%
428,000(a) Growth Environmental, Inc.
(b) 9.00 % due 4-30-97 @0.00 --
Restaurants - 0.7%
1,250,000 * Hometown Buffet, Inc.
7.00% due 12-01-02 @101.750 1,272
Retail - 0.0%
600,000 (a) Zam's, Inc.
7.50% due 10-03-00 @ 0.000 --
Total Convertible Debt Obligations
(Cost: $4,788,000) 3,491
Long Put Options 0.1%
Contracts Value
- ------------------------------------------------------------------------------------------------------------
15 S&P 100 Stock Index, July $850 165
Total Put Options
(Cost: $256,000) 165
Commercial Paper - 1.1%
Face Amount Value
- ------------------------------------------------------------------------------------------------------------
$1,400,000 Cigna Corporation
5.50% due 07-01-97 1,400
540,000 Cigna Corporation
5.52% due 07-02-97 540
Total Commercial Paper
(Cost: $1,940,000) 1,940
Repurchase Agreements - 0.0%
Face Amount Value
- ------------------------------------------------------------------------------------------------------------
$ 74,000 State Street Bank and Trust Co.
Dated 6/30/97, Collateralized by
U.S. Treasury Notes
4.25%, 7/01/97 74
Total Repurchase Agreements
(Cost: $74,000) 74
Total Investments - 99.6% -------
(Cost: $135,202,000) 185,489
Covered Call Options - (0.3%)
Contracts Value
- ------------------------------------------------------------------------------------------------------------
30 ESC Medical Systems, Inc., July $40 $ --
300 Anadigics, Inc., July $35 (17)
200 Dura Pharmaceuticals, July $45 (3)
60 Dura Pharmaceuticals, July $50 --
200 Electronics For Imaging, July $47.5 (68)
300 Gadzooks, Inc., July $40 --
200 Gadzooks, Inc., September $40 (1)
150 Ikos Systems, Inc., September $30 (6)
200 MRV Communications, Inc., July $35 (1)
350 Mastec, Inc., July $40 (254)
15 Mastec, Inc., July $46.62 (4)
400 Mastec, Inc., July $50 (55)
20 Network Appliance, Inc., July $45 --
130 P-Com, Inc., July $40 (2)
200 P-Com, Inc., August $45 (1)
50 Premeire Technologies, Inc., July $35 --
100 Sawtek, Inc., September $40 (24)
150 Scopus Technology, Inc., July $36.62 --
170 Speedfam International, July $40 (15)
255 Speedfam International, July $45 (5)
100 Spine-Tech, Inc., July $40 (10)
50 Veritas Software Corporation, July $55 (7)
125 Veritas Software Corporation, July $45 (98)
50 Veritas Software Corporation, August $45 (19)
75 Veritas Software Corporation, August $60 (12)
75 Zoltek Companies, Inc., July $40 (8)
--------
Total Covered Call Options
(Premiums received: $684,000) (610)
Other Assets less Liabilities - 0.7% 1,381
--------
NET ASSETS - 100% $186,260
========
</TABLE>
Notes to Portfolio of Investments
* Income producing security during the period ended June 30, 1997.
**All or a portion of these stocks were held in escrow at June 30, 1997 to
cover call options written. The aggregate market value was $14,152,000.
Based on the cost of investments of $135,202,000 for federal income tax
purposes at June 30, 1997, the aggregate gross unrealized appreciation was
$58,024,000 the aggregate gross unrealized depreciation was $7,737,000 and the
net unrealized appreciation of investments was $50,287,000.
(a) The following securities are subject to legal or contractual restrictions
on sale. They were valued at cost on the dates of acquisition and at fair value
as determined by the board of trustees of the Fund as of June 30, 1997. The
aggregate value of restricted securities was $0 at June 30, 1997.
Zam's, Inc. $600,000 face amount convertible debt purchased in
November, 1993 at a cost of $600,000.
Growth Environmental, Inc. $580,000 face amount convertible
debt purchased in May, 1994 at a cost of $580,000.
(b) Issuer has defaulted on the payment of principal or interest or has filed
bankruptcy.
4
<PAGE>
OBERWEIS MICRO-CAP PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 1997 (value in thousands)
Equity Securities - 101.5%
<TABLE>
Shares Company (Closing Price) Value
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Aerospace - 1.2%
24,000 Kellstrom Industries, Inc. @ 15.750 $ 378
Building - Materials & Components - 1.0%
15,000 Miller Building Systems, Inc. @ 8.000 120
2,000 Modtech, Inc. @ 12.875 26
19,000 Tower Technology, Inc. @ 8.750 166
312
Chemicals - Plastics - 2.2%
15,000 Brunswick Technologies, Inc. @ 9.375 141
26,000 * Deswell Industries, Inc. @ 21.750 566
707
Commercial Services - 7.0%
25,000 American Medical Technologies, Inc. @ 2.687 67
22,900 Analytical Surveys, Inc. @ 13.750 315
7,300 ASI Solutions, Inc. @ 9.875 72
30,000 Detection Systems, Inc. @ 18.250 548
100,000 Interstate National Dealer SVC @ 7.000 700
45,000 RCM Technologies, Inc. @ 10.625 478
6,700 Xeta Corp. @ 12.750 85
2,265
Computer - Integrated Systems - 0.6%
40,000 Dynamic Healthcare Technologies, Inc. @ 5.000 200
Computer - Local Networks - 1.2%
40,000 Data Systems Network Corp. @ 9.375 375
Computer - Memory Devices - 4.6%
70,000 Advanced Digital Information Corp. @ 16.125 1,129
30,000 Intevac, Inc. @ 12.000 360
1,489
Computer Services - 5.3%
15,000 Alphanet Solutions, Inc. @ 14.750 221
35,000 Ontrack Data International, Inc. @ 23.000 805
60,000 PSW Technologies, Inc. @ 11.750 705
1,731
Computer Software - 6.3%
32,000 Phoenix International, Ltd. @ 23.000 736
95,500 Qualix Group, Inc. @ 6.000 573
47,000 Tripos, Inc. @ 15.625 734
2,043
Consumer Products - 0.5%
21,800 Platinum Entertainment, Inc. @ 6.750 147
Cosmetics - Personal Care - 1.4%
50,000 French Fragrances, Inc. @ 9.250 463
Electrical - Equipment/Components - 11.2%
40,000 JPM Company @ 35.625 $ 1,425
40,000 KVH Industries, Inc. @ 8.500 340
25,000 Nice Systems LTD @ 30.000 750
6,000 Proxim, Inc. @ 24.250 145
5,000 RF Monolithics, Inc. @ 20.250 101
100,000 WPI Group, Inc. @ 8.750 875
3,636
Electrical - Instruments - 2.4%
15,000 American Science & Engineering, Inc. @ 9.625 144
65,000 Orbit - FR, Inc. @ 9.750 634
778
Electronics - Semi-Conductors/
Components - 0.1%
25,000 Hytek Microsystems, Inc. @ 1.437 36
Energy Development - 1.2%
50,000 York Research @ 7.750 388
Finance - Consumer Loans - 1.1%
30,000 Best Trading @ 12.171 365
Financial Services - Miscellaneous - 1.9%
25,000 Healthcare Financial Partners @ 20.375 509
13,500 Rockford Industries, Inc. @ 8.125 110
619
Food - Miscellaneous - 1.5%
60,000 Unimark Group, Inc. @ 8.000 480
Household - Appliances - 2.1%
65,000 Fantom Technologies, Inc. @ 10.375 674
Leisure - 1.7%
20,000 Action Performance COS, Inc. @ 24.250 485
12,900 Jakks Pacific, Inc. @ 6.062 78
563
Machinery - 5.4%
31,500 ASV, Inc. @ 26.500 835
100,000 Raster Graphics, Inc. @ 7.250 725
22,000 Schmitt Industries, Inc. @ 8.375 184
1,744
Medical/Dental Supplies - 2.6%
90,000 Endogen, Inc. @ 4.312 388
20,000 Graham Field Health Products, Inc. @ 13.625 273
20,000 Urocor, Inc. @ 9.375 188
849
Medical Instruments - 3.2%
37,500 Dynatronics Corp. @ 0.812 30
58,100 Exactech, Inc. @ 6.687 389
30,000 Seamed Corporation @ 20.250 607
1,026
</TABLE>
See notes to Portfolio of Investments. 5
<PAGE>
Equity Securities - continued
<TABLE>
Shares Company (Closing Price) Value
- ----------------------------------------------------------------------------------
<S> <C> <C>
Medical - Outpatient/Homecare - 1.1%
40,000 Diagnostic Health Services, Inc. @ 9.125 $ 365
Medical Products - 1.0%
50,000 Quidel Corp. @ 3.250 162
10,000 Thermo Bioanalysis Corp. @ 15.250 153
315
Metal Products/Fabrication - 2.0%
4,000 * Chicago Rivet & Machine, Inc. @ 45.250 181
40,000 Dynamic Material Corporation @ 11.625 465
646
Metal - Steel - 4.6%
40,000 ** Maverick Tube Corporation @ 37.500 1,500
Oil & Gas - 2.2%
40,000 Key Energy Group, Inc. @ 17.812 712
Pollution Control - 0.1%
53,000 Waste Technology Corporation @ 0.781 41
Restaurants - 4.0%
55,000 Logan's Roadhouse, Inc. @ 23.750 1,306
Retail - Apparel - 4.2%
60,000 Hot Topic, Inc. @ 22.500 1,350
Retail - Home Furnishings - 1.4%
30,000 Rent-Way, Inc. @ 14.750 443
Retail - Mail Order - 1.6%
20,000 Coldwater Creek, Inc. @ 26.000 520
Retail/Wholesale - Computers - 1.5%
55,000 En Pointe Technologies, Inc. @ 9.109 501
Steel - Production - 0.7%
13,500 Atchison Casting Corp. @ 16.625 224
Telecommunications - 5.1%
10,000 Geotel Communications, Inc. @ 13.375 134
15,000 Mas Technology Ltd. @ 14.875 223
25,000 Nact Telecommunications, Inc. @ 8.750 219
40,000 Tech Service WT @ 0.187 8
8,000 Tollgrade Communications, Inc. @ 22.875 183
60,000 Viasat, Inc. @ 14.500 870
1,637
Textile - Manufacturing - 5.1%
50,000 Cutter & Buck, Inc. @ 16.250 813
25,000 Frenchtex, Inc. @ 2.875 72
45,000 Sport-Haley, Inc. @ 16.750 754
1,639
Transportation - Trucking - 1.2%
20,000 Simon Transportation Services @ 19.875 $ 397
Total Equity Securities
(Cost: $28,346,000) $32,864
Covered Call Options - (0.0)%
Contracts Value
- ----------------------------------------------------------------------------------
<S> <C> <C>
100 Maverick Tube Corporation, August $40 (15)
-------
Total Covered Call Options
(Premium received: $8,000) (15)
Liabilities less Other Assets - (1.5)% (471)
-------
Net Assets - 100% $32,378
=======
</TABLE>
Notes to Portfolio of Investments
* Income producing security during the period ended June 30, 1997.
** All or a portion of these stocks were held in escrow at June 30, 1997 to
cover call options written. The aggregate market value was $10,000.
Based on the cost of investments of $28,346,000 for federal income tax purposes
at June 30, 1997 the aggregate gross unrealized appreciation was $6,961,000 the
aggregate gross unrealized depreciation was $2,443,000 and the net unrealized
appreciation of investments was $4,518,000.
6
<PAGE>
OBERWEIS MID-CAP PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 1997 (value in thousands)
Equity Securities - 101.6%
<TABLE>
<CAPTION>
Shares Company (Closing Price) Value
- ------------------------------------------------------------------------
<S> <C> <C>
Apparel - 3.0%
3,000 ** Gucci Group @ 64.375 $ 193
Commercial Services - 6.5%
3,000 Carbiner International, Inc. @ 32.625 98
2,000 Pediatrix Medical Group @ 45.812 92
2,000 Robert Half International, Inc. @ 47.062 94
5,000 Teletech Holdings, Inc. @ 26.062 130
414
Computer - Local Networks - 1.9%
3,000 ** Ascend Communications, Inc. @ 39.375 118
Computer - Memory Devices - 5.9%
6,000 ** Quantum Corp @ 20.312 122
8,000 ** Western Digital Corporation @ 31.625 253
375
Computer Peripherals - 2.0%
4,000 ** Gateway 2000, Inc. @ 32.437 130
Computer Services - 3.9%
4,000 ** Technology Solutions Co. @ 39.500 158
2,000 * National Data Corporation @ 43.312 87
245
Computer Software - 14.1%
5,000 Check Point Software Technologies Ltd. @ 23.375 117
2,000 Compuware Corporation @ 47.750 96
4,000 McAfee Associates, Inc. @ 63.125 252
2,500 Saville Systems Ireland @ 52.000 130
3,500 ** Scopus Technology, Inc. @ 22.375 78
3,100 Visio Corporation @ 70.500 219
892
Electronics - Components/Semiconductors - 5.8%
2,000 Hadco Corp. @ 65.500 131
1,500 Uniphase Corp @ 58.250 87
4,500 Vitesse Semiconductor Corp. @ 32.687 147
365
Electronics - Laser Systems/Components - 2.3%
3,000 ** Cymer, Inc. @ 48.750 146
Energy - 1.2%
2,000 Calenergy Co., Inc. @ 38.000 76
Financial - Consumer Loans - 3.3%
10,000 Americredit Corporation @ 21.000 210
Health Maintenance Organization - 3.4%
3,000 Oxford Health Plans Corp. @ 71.750 215
Medical - Ethical Drugs - 1.5%
2,000 * Jones Medical @ 47.500 95
Medical - Hospitals - 1.2%
2,000 Universal Health Services @ 38.500 77
Medical - Outpatient/Homecare - 2.5%
4,000 Total Renal Care Holdings @ 40.187 161
Oil & Gas - Machinery/Equipment - 9.0%
6,000 Energy Ventures, Inc. @ 42.000 252
1,500 Falcon Drilling Co., Inc. @ 57.625 86
10,000 Global Marine, Inc. @ 23.250 233
571
Pollution Control - 1.3%
2,000 United Waste Systems, Inc. @ 41.000 82
Retail - 3.3%
5,000 Abercrombie & Fitch Co. @ 18.500 93
5,000 Eagle Hardware & Garden @ 22.875 114
207
Retail/Wholesale - Computers - 2.3%
6,000 Ingram Micro, Inc. @ 24.125 145
Steel - 4.0%
8,000 Titanium Metals Corporation @ 31.625 253
Telecommunications - Equipment - 9.1%
10,000 ** Ciena Corporation @ 47.125 471
2,000 Comverse Technology, Inc. @ 52.000 104
575
Telecommunications - Services - 12.6%
2,000 * Asia Satellite Telecommunications, Inc. @ 30.125 60
4,000 Brightpoint, Inc. @ 32.562 130
10,500 ** Mastec, Inc. @ 47.312 497
4,000 Pacific Gateway Exchange @ 28.250 113
800
Textiles - 1.5%
2,000 Jones Apparel Group, Inc. @ 47.750 96
Total Equity Securities
(Cost: $5,303,000) $6,441
</TABLE>
See notes to Portfolio of Investments.
7
<PAGE>
Covered Call Options - (2.0%)
Contracts Value
- -------------------------------------------------------
30 Ascend Communications, September $80 $ --
100 Ciena Corporation, October $50 (69)
30 Cymer, Inc., August $55 (5)
40 Gateway 2000, Inc., July $40 (1)
10 Gucci Group, July $80 --
25 Mastec, Inc., July $35 (30)
80 Mastec, Inc., July $50 (11)
60 Quantum, August $25 (4)
35 Scopus Technology, Inc., July $35 --
20 Technology Solutions, Inc., July $40 (5)
80 Western Digital Corporation, July $40 (2)
------
Total Covered Call Options
(Premium received: $148,000) (127)
Other Assets less Liabilities - 0.4% 22
------
Net Assets - 100% $6,336
======
Notes to Portfolio of Investments
* Income producing security during the year ended June 30, 1997.
** All or a portion of these stocks were held in escrow at June 30, 1997 to
cover call options written. The aggregate market value was $1,920,000.
Based on the cost of investments of $5,303,000 for federal income tax purposes
at June 30, 1997, the aggregate gross unrealized appreciation was $1,289,000 the
aggregate gross unrealized depreciation was $151,000 and the net unrealized
appreciation of investments was $1,138,000.
8
<PAGE>
THE OBERWEIS FUNDS
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1997
(in thousands)
<TABLE>
<CAPTION>
Emerging Growth Micro-Cap Mid-Cap
Portfolio Portfolio Portfolio
----------- ----------- -----------
<S> <C> <C> <C>
Assets:
Investments securities at market value $185,324 $32,864 $6,441
(Cost: $134,946, $28,346 and $5,303 respectively)
Options purchased at value (Cost: $256) 165 -- --
Receivable from fund shares sold 1,171 18 2
Receivable from securities sold 3,533 738 163
Dividends and interest receivable 26 -- --
Deferred organizational expense -- 43 48
Prepaid expenses 34 14 4
-------- ------- ------
Total Assets $190,253 $33,677 $6,658
Liabilities:
Cash overdraft 94 554 87
Options written at value (Premiums received: $684,
$8 and $148 respectively) 610 15 127
Payable for fund shares repurchased 2,674 378 14
Payable for securities purchased 252 303 65
Payable to advisor 122 27 4
Payable to distributor 38 7 1
Accrued expenses 203 15 24
-------- ------- ------
Total Liabilities 3,993 1,299 322
-------- ------- ------
Net Assets $186,260 $32,378 $6,336
======== ======= ======
Analysis of net assets:
Aggregate paid in capital $126,380 $31,785 $6,048
Accumulated net realized gain (loss) from
investment transactions 9,519 (3,918) (870)
Net unrealized appreciation of investments 50,361 4,511 1,158
-------- ------- ------
Net Assets $186,260 $32,378 $6,336
======== ======= ======
The Pricing of Shares:
Net asset value and offering price per share
Emerging Growth Portfolio:
($186,259,743 divided by 5,795,971 shares outstanding) $ 32.14
========
Micro-Cap Portfolio:
($32,377,925 divided by 2,506,395 shares outstanding) $ 12.92
=======
Mid-Cap Portfolio:
($6,336,458 divided by 607,854 shares outstanding) $10.42
======
</TABLE>
See accompanying notes to financial statements.
9
<PAGE>
THE OBERWEIS FUNDS
STATEMENT OF OPERATIONS
Six months ended June 30, 1997
(in thousands)
<TABLE>
<CAPTION>
Emerging Growth Micro-Cap Mid-Cap
Portfolio Portfolio Portfolio
----------- ----------- -----------
<S> <C> <C> <C>
Investment Income:
Dividends $ 31 $ 13 $ 6
Interest 251 26 3
------- ------- -----
Total Investment Income 282 39 9
Expenses:
Advisory fees 344 100 13
Management fees 332 67 13
Distribution fees 208 42 8
Transfer agent fees 193 27 17
Custodian fees 89 35 14
Professional fees 45 13 7
Shareholder reports 45 5 1
Registration fees 18 10 3
Insurance 7 1 --
Organizational expenses -- 6 6
Trustees fees 4 1 1
Other 4 -- --
------- ------- -----
Total Expenses 1,289 307 83
Net Investment Loss Before Expense Reimbursement (1,007) (268) (74)
Expense Reimbursement -- -- 19
------- ------- -----
Net Investment Loss (1,007) (268) (55)
Net Realized and Unrealized Gain (Loss) on Investments:
Net realized gain (loss) from investment transactions 3,169 (2,520) (759)
Net realized gain (loss) from covered call options written 1,178 5 (48)
------- ------- -----
Total net realized gain (loss) 4,347 (2,515) (807)
Increase (decrease) in unrealized appreciation of investments (6,757) 4,072 923
------- ------- -----
Net realized and unrealized gain (loss) on investments (2,410) 1,557 116
------- ------- -----
Net increase (decrease) in net assets resulting from
operations $(3,417) $ 1,289 $ 61
======= ======= =====
</TABLE>
See accompanying notes to financial statements.
10
<PAGE>
THE OBERWEIS FUNDS
STATEMENT OF CHANGES IN NET ASSETS
(in thousands)
<TABLE>
<CAPTION>
Emerging Growth Portfolio
-------------------------------------
Six Months Ended Year Ended
June 30, 1997 December 31, 1996
---------------- -----------------
<S> <C> <C>
From Operations:
Net investment loss $ (1,007) $ (1,747)
Net realized gain from investment transactions 4,347 13,266
Increase (decrease) in unrealized appreciation of investments (6,757) 14,469
-------- ---------
Net increase (decrease) in net assets resulting from operations (3,417) 25,988
-------- ---------
From Distributions:
Distributions from net realized gains on investments -- (14,255)
-------- ---------
From Capital Share Transactions:
Net proceeds from sale of shares 70,040 178,552
Shares issued in reinvestment of distribution -- 13,043
Redemption of shares (65,958) (152,396)
-------- ---------
Net increase from capital share transactions 4,082 39,199
-------- ---------
Total increase in net assets 665 50,932
Net Assets:
Beginning of period 185,595 134,663
-------- ---------
End of period $186,260 $ 185,595
======== =========
==============================================================================================================
<CAPTION>
Micro-Cap Portfolio
-------------------------------------
Six Months Ended January 1, 1996*-
June 30, 1997 December 31, 1996
---------------- -----------------
<S> <C> <C>
From Operations:
Net investment loss $ (268) $ (337)
Net realized loss from investment transactions (2,515) (1,403)
Increase in unrealized appreciation of investments 4,072 439
-------- ---------
Net increase (decrease) in net assets resulting from operations 1,289 (1,301)
-------- ---------
From Capital Share Transactions:
Net proceeds from sale of shares 13,494 55,859
Redemption of shares (13,138) (23,925)
-------- ---------
Net increase from capital share transactions 356 31,934
-------- ---------
Total increase in net assets 1,645 30,633
Net Assets:
Beginning of period 30,733 100
-------- ---------
End of period $ 32,378 $ 30,733
======== =========
</TABLE>
*Commencement of operations
See accompanying notes to financial statements.
11
<PAGE>
THE OBERWEIS FUNDS
STATEMENT OF CHANGES IN NET ASSETS
(in thousands)
<TABLE>
<CAPTION>
Mid-Cap Portfolio
----------------------------------------
Six Months Ended September 15, 1996*-
June 30, 1997 December 31, 1996
---------------- --------------------
<S> <C> <C>
From Operations:
Net investment loss $ (55) $ (34)
Net realized loss from investment transactions (807) (63)
Increase in unrealized appreciation of investments 923 235
------- -------
Net increase in net assets resulting from operations 61 138
------- -------
From Capital Share Transactions:
Net proceeds from sale of shares 1,756 8,325
Redemption of shares (2,776) (1,178)
------- -------
Net increase (decrease) from capital share transactions (1,020) 7,147
------- -------
Total increase (decrease) in net assets (959) 7,285
Net Assets:
Beginning of period 7,295 10
------- -------
End of period $ 6,336 $ 7,295
======= =======
</TABLE>
*Commencement of operations
See accompanying notes to financial statements.
12
<PAGE>
NOTES TO FINANCIAL STATEMENTS
June 30, 1997
1. Significant Accounting Policies
Description of Business. The Oberweis Funds (the "Trust") is registered under
the Investment Company Act of 1940 as a diversified open-end management
investment company. The Trust is authorized to operate numerous portfolios under
various trading strategies. The Trust consists of three portfolios: the Oberweis
Emerging Growth Portfolio, which prior to January 1, 1996 was known as the
Oberweis Emerging Growth Fund, the Oberweis Micro-Cap Portfolio, and the
Oberweis Mid-Cap Portfolio (collectively, the Funds).
Use of Estimates. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results may differ from those estimates.
Investment valuation. Investments are stated at value. Each listed and unlisted
security for which last sale information is regularly reported is valued at the
last reported sales price on that day. If there has been no sale on such day,
then such security is valued at the current day's bid price. Any unlisted
security for which last sale information is not regularly reported and any
listed debt security which has an inactive listed market for which over-the-
counter market quotations are readily available is valued at the highest closing
bid price determined on the basis of reasonable inquiry. Restricted securities
and any other securities or other assets for which market quotations are not
readily available are valued by appraisal at their fair value as determined in
good faith under procedures established by and under the general supervision and
responsibility of the Board of Trustees. Short-term debt obligations, commercial
paper and repurchase agreements are valued on the basis of quoted yields for
securities of comparable maturity, quality and type or on the basis of amortized
costs.
Fund share valuation. Fund shares are sold and redeemed on a continuous basis
at net asset value. On each day the New York Stock Exchange is open for trading,
the net asset value per share is determined as of the later of the close of the
New York Stock Exchange or the Chicago Board Options Exchange by dividing the
total value of the Fund's investments and other assets, less liabilities, by the
number of each Fund's shares outstanding.
Investment transactions and investment income. Investment transactions are
accounted for on the trade date (date the order to buy or sell is executed).
Dividend income is recorded on the ex-dividend date, and interest income is
recorded on the accrual basis and includes amortization of premium and discount.
Realized gains and losses from investment transactions are reported on an
identified cost basis. Gains and losses on premiums from expired options are
recognized on date of expiration.
Repurchase agreements. Repurchase agreements are fully collateralized by U.S.
Treasury and Government agency securities. All collateral is held through the
Fund's custodian bank and is monitored daily by the Fund so that its market
value exceeds the carrying value of the repurchase agreement.
Federal income taxes and dividends to shareholders. The Funds have complied
with the special provisions of the Internal Revenue Code available to investment
companies and therefore no federal income tax provision is required. Dividends
payable to its shareholders are recorded by each Fund on the ex-dividend date.
The Oberweis Emerging Growth Portfolio paid a dividend consisting of net long
term realized gains from the sale of securities of $14,255,000 in 1996 to
shareholders of record on November 13, 1996. The Micro-Cap Portfolio and Mid-Cap
Portfolio have capital loss carryforwards of $1,403,000 and $63,000,
respectively, which if not used to offset future net realized capital gains will
expire in 2004.
Organizational Costs. Organizational costs of the Micro-Cap Portfolio and Mid-
Cap Portfolio have been capitalized and are being amortized on a daily basis
using the straight line method over five years.
2. Transactions with affiliates
The Funds have written agreements with Oberweis Asset Management, Inc. ("OAM")
as the Fund's investment adviser and manager. Effective January 1, 1997 Oberweis
Brokerage, Inc. ("OBI"), an affiliate of OAM, became the Fund's principal
distributor. Prior to January 1, 1997 The Chicago Corporation ("TCC") acted as
the Fund's distributor and shareholder service agent.
13
<PAGE>
Advisory agreement. For investment advisory services, the Emerging Growth
Portfolio paid monthly investment advisory fees at an annual rate equal to .45%
of the first $50,000,000 of average daily net assets and .40% of average daily
net assets in excess of $50,000,000. The Micro-Cap Portfolio paid monthly
investment advisory fees at an annual rate equal to .60% of average daily net
assets on all assets. The Mid-Cap Portfolio paid monthly investment advisory
fees at an annual rate equal to .40% of average daily net assets on all assets.
For the period ended June 30, 1997, the Emerging Growth Portfolio, Micro-Cap
Portfolio, and Mid-Cap Portfolio incurred advisory fees totaling $344,000,
$100,000, and $13,000 respectively.
Management agreement. For management services and facilities furnished, the
Emerging Growth Portfolio, Micro-Cap Portfolio, and Mid-Cap Portfolio each paid
a monthly fee at an annual rate equal to .40% of average daily net assets. For
the period ended June 30, 1997, the Emerging Growth Portfolio, Micro-Cap
Portfolio, and Mid-Cap Portfolio incurred management fees totaling $332,000,
$67,000 and $13,000 respectively.
Expense Reimbursement. OAM is obligated to reduce its management fees or
reimburse the Funds to the extent that total ordinary operating expense, as
defined, exceed in any one year the following amounts expressed as a percentage
of each Fund's average daily net assets: 2% of the first $25,000,000; plus 1.8%
of the next $25,000,000; plus 1.6% of average daily net assets in excess of
$50,000,000; or such lower percentage as may be required by any state where the
Fund's shares are registered. OAM reimbursed the Mid-Cap Portfolio $19,000 for
the period ended June 30, 1997.
Officers and trustees. Certain officers or trustees of the Funds are also
officers or directors of OAM and OBI. During the period ended June 30, 1997, the
fund made no direct payments to its officers and paid $6,000 to its unaffiliated
trustees, James D. Oberweis, the Fund's portfolio manager, is employed by OAM
and OBI.
Distribution and shareholder service expense. The Funds have a distribution and
shareholder services agreement with OBI. For services under the distribution and
shareholder servicing agreement, the Funds pay OBI a fee at the annual rate of
.25% of the average daily net assets and reimbursement for certain out-of-pocket
expenses. For the period ended June 30, 1997, the Emerging Growth Portfolio,
Micro-Cap Portfolio, and Mid-Cap Portfolio incurred distribution fees totaling
$208,000, $42,000 and $8,000 respectively.
Commissions. The Funds pay OBI for executing some of each Fund's agency
security transactions at competitive rates, typically $.035 per share. For the
period ended June 30, 1997, the Emerging Growth Portfolio, Micro-Cap Portfolio,
and Mid-Cap Portfolio paid commissions of $12,165, $1,500 and $300, respectively
to OBI.
3. Investment transactions
The cost of securities purchased and proceeds from securities sold during the
period ended June 30, 1997, other than options written and money market
investments, aggregated $68,507,000 and $70,966, 000, respectively for the
Emerging Growth Portfolio, $15,345,000 and $14,179,000 respectively for the
Micro-Cap Portfolio, and $3,052,000 and $4,031,000 respectively for the Mid-Cap
Portfolio.
Transactions in options written for the period ended June 30, 1997 were as
follows:
<TABLE>
<CAPTION>
Emerging Growth Portfolio Micro-Cap Portfolio Mid-Cap Portfolio
------------------------- --------------------- ---------------------
Number of Premiums Number of Premiums Number of Premiums
Contracts Received Contracts Received Contracts Received
--------- ------------ --------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Options outstanding at beginning of period 4,100 $ 872,000 50 $ 5,000 30 $ 6,000
Options written 12,704 1,956,000 100 8,000 1,620 312,000
Options expired (11,094) (1,648,000) (50) (5,000) (590) (89,000)
Options closed (930) (277,000) -- -- (470) (71,000)
Options assigned (825) (219,000) -- -- (80) (10,000)
------- ----------- --- ------- ----- --------
Options outstanding at end of period 3,955 $ 684,000 100 $ 8,000 510 $148,000
</TABLE>
The premiums received provide a partial hedge (protection) against declining
price and enables each Fund to generate a higher return during periods when OAM
does not expect the underlying security to make any major price moves in the
near future but still deems the underlying security to be, over the long term,
an attractive investment for each Fund.
14
<PAGE>
4. Capital share transactions
The following table summarizes the activity in capital shares of each Fund:
<TABLE>
<CAPTION>
Emerging Growth Portfolio Emerging Growth Portfolio
Six Months Ended June 30, 1997 Year Ended December 31, 1996
------------------------------ ----------------------------
Shares Amount Shares Amount
-------------- -------------- ------------ ------------
<S> <C> <C> <C> <C>
Shares sold 3,951,000 $ 70,040,000 5,132,000 $ 178,552,000
Shares issued in reinvestment of dividends - - 415,000 13,043,000
Less shares redeemed (2,147,000) (65,958,000) (4,528,000) (152,396,000)
---------- ------------ ---------- -------------
Net increase from capital share transactions 1,804,000 $ 4,082,000 1,019,000 $ 39,199,000
Micro-Cap Portfolio Micro-Cap Portfolio
Six Months Ended June 30, 1997 January 1, 1996 - December 31,1996
------------------------------ ----------------------------------
Shares Amount Shares Amount
-------------- -------------- ------------ ------------
<S> <C> <C> <C> <C>
Shares sold 1,048,000 $ 13,494,000 4,315,000 $ 55,859,000
Shares issued in reinvestment of dividends - - - -
Less shares redeemed (1,044,000) (13,138,000) (1,823,000) (23,925,000)
-------------- -------------- ------------ ------------
Net increase from capital share transactions 4,000 $ 356,000 2,492,000 $ 31,934,000
Mid-Cap Portfolio Mid-Cap Portfolio
Six Months Ended June 30, 1997 September 15, 1996 - December 31, 1996
------------------------------ --------------------------------------
Shares Amount Shares Amount
-------------- -------------- ------------ ------------
<S> <C> <C> <C> <C>
Shares sold 176,000 $ 1,756,000 821,000 $ 8,325,000
Less shares redeemed (278,000) (2,776,000) (113,000) (1,178,000)
---------- ------------ ---------- ------------
Net increase (decrease) from capital
share transactions (102,000) $ (1,020,000) 708,000 $ 7,147,000
</TABLE>
5. Redemption fee
A .25% redemption fee is charged on redemptions from the Micro-Cap and Mid-Cap
Portfolios. The redemption fee is retained by the Funds and is intended to
reimburse the Funds for the expense they incur in connection with shareholder
redemptions. Redemption fees received by the Micro-Cap and Mid-Cap Portfolios
were $34,000 and $7,000 respectively, for the period ended June 30, 1997, and
were recorded as a reduction of shares redeemed in the statement of changes in
net assets.
15
<PAGE>
FINANCIAL HIGHLIGHTS
Per share income and capital changes for a share outstanding throughout the
period is as follows:
<TABLE>
<CAPTION>
Emerging Growth Portfolio
Six Months Ended Years ended December 31,
June 30, 1997 1996 1995 1994 1993
---------------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period $ 32.86 $ 29.09 $ 21.41 $ 22.19 $ 20.90
Income from investment operations:
Net investment loss (a) (.18) (.32) (.33) (.22) (.22)
Net realized and unrealized gain (loss) on investments (.54) 6.73 9.43 (.56) 2.25
------- ------- ------- ------- -------
Total from investment operations (.72) 6.41 9.10 (.78) 2.03
Less Distributions:
Distribution from net realized gains on investments _ (2.64) (1.42) - (.74)
------- ------- ------- -------- -------
Net asset value at end of period $ 32.14 $ 32.86 $ 29.09 $ 21.41 $ 22.19
======= ======= ======= ======== =======
Total Return (%) (2.2)(d) 22.5 42.6 (3.5) 9.7
Ratio/Supplemental Data
Net Assets at end of period (in thousands) $186,260 $185,595 $134,663 $90,014 $104,324
Ratio of expenses to average daily net assets (%) 1.55(c) 1.48 1.73(b) 1.78 1.80(b)
Ratio of net investment loss to average net assets (%) (1.21)(c) (0.97) (1.24) (1.06) (1.04)
Portfolio turnover rate (%) 41 64 79 66 70
Average commission rate paid $ .0352 $ .0413 - - -
</TABLE>
- -------------------------
Notes:
(a) The net investment loss per share data was determined using average shares
outstanding during the period.
(b) Net of expense reimbursement from related parties. Expense ratios would have
been 1.77% and 1.82%, for 1995 and 1993, respectively before expense
reimbursement.
(c) Annualized.
(d) Not annualized.
16
<PAGE>
FINANCIAL HIGHLIGHTS
Per share income and capital changes for a share outstanding throughout the
period is as follows:
<TABLE>
<CAPTION>
Micro-Cap Portfolio
Six Months Ended January 1, 1996*-
June 30, 1997 December 31, 1996
------------- -----------------
<S> <C> <C>
Net asset value at beginning of period $ 12.28 $ 10.00
Income from investment operations:
Net investment loss (a) (.10) (.15)
Net realized and unrealized gain (loss) on investments .74 2.43
------- -------
Total from investment operations .64 2.28
------- -------
Net asset value at end of period $ 12.92 $ 12.28
======= =======
Total Return (%) 5.2(c) 22.8
Ratio/Supplemental Data
Net Assets at end of period (in thousands) $32,378 $30,733
Ratio of expenses to average daily net assets (%) 1.83(b) 1.94
Ratio of net investment loss to average net assets (%) (1.60)(b) (1.15)
Portfolio turnover rate (%) 44 70
Average commission rate paid $ .0351 $ .0371
</TABLE>
- --------------------
Notes:
(a) The net investment loss per share data was determined using average shares
outstanding during the period.
(b) Annualized.
(c) Not annualized.
* Commencement of operations.
================================================================================
<TABLE>
<CAPTION>
Mid-Cap Portfolio
Six Months Ended September 15, 1996*-
June 30, 1997 December 31, 1996
------------- -----------------
<S> <C> <C>
Net asset value at beginning of period $10.29 $10.00
Income from investment operations:
Net investment loss (a) (.08) (.05)
Net realized and unrealized gain (loss) on investments .21 .34
------ ------
Total from investment operations .13 .29
------ ------
Net asset value at end of period $10.42 $10.29
====== ======
Total Return (%) 1.3(d) 2.9(d)
Ratio/Supplemental Data
Net Assets at end of period (in thousands) $6,336 $7,295
Ratio of expenses to average daily net assets (%) 2.00(b)(c) 2.00(b)(c)
Ratio of net investment loss to average net assets (%) (1.71)(c) (1.62)(c)
Portfolio turnover rate (%) 48 21(c)
Average commission rate paid $.0331 $.0371
</TABLE>
- --------------------
Notes:
(a) The net investment loss per share data was determined using average shares
outstanding during the period.
(b) Net of expense reimbursement from related parties. Expense ratios would have
been 2.58% and 3.42%, for the period ended June 30, 1997 and December 31, 1996,
respectively before expense reimbursement.
(c) Annualized.
(d) Not annualized.
* Commencement of operations.
17
<PAGE>
[lOGO] The
Oberweis
Funds
- --------------------------------------------------------------------------------
James D. Oberweis Thomas J. Burke
Trustee and President Trustee
Douglas P. Hoffmeyer Edward F. Streit
Trustee Trustee
Patrick B. Joyce Martin L. Yokosawa
Executive Vice President Vice President
Treasurer
James W. Oberweis Sally A. Jordan
Vice President Secretary
Margaret W. Unsworth
Assistant Secretary
Manager and Investment Advisor
Oberweis Asset Management, Inc.
951 Ice Cream Dr., North Aurora, IL 60542
1-800-323-6166
Distributor
Oberweis Brokerage, Inc.
951 Ice Cream Dr., North Aurora, IL 60542
1-630-801-6000
Custodian and Transfer Agent
Investors Fiduciary Trust Company
P.O. Box 419042, Kansas City, Missouri 64141
1-800-245-7311
Counsel
Vedder, Price, Kaufman & Kammholz
222 North LaSalle Street, Chicago, Illinois 60601
[LOGO]
The Oberweis Funds
Emerging Growth Portfolio
Micro-Cap Portfolio
Mid-Cap Portfolio
SEMI-ANNUAL REPORT
------------------------
UNAUDITED
June 30, 1997
