<PAGE>
AH&H PARTNERS FUND LIMITED PARTNERSHIP
Report on Financial Statements
For three months ending September 30, 1996
(Unaudited)
<PAGE>
AH&H PARTNERS FUND LIMITED PARTNERSHIP
Report on Financial Statements
For three months ending September 30, 1996
(Unaudited)
CONTENTS
PAGE
Investment Portfolio
as of September 30, 1996 (Unaudited) 3-4
Statement of Assets and Liabilities
as of September 30, 1996 (Unaudited) 5
Statement of Operations
for three months ended September 30, 1996
(Unaudited) 6
Statement of Changes in Net Assets
for three months ended September 30, 1996
(Unaudited) 7
Notes to Financial Statements 8-9
<PAGE>
AH&H PARTNERS FUND LIMITED PARTNERSHIP
Investment Portfolio
As of September 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
INDUSTRY & COMPANY Shares Value
<S> <C> <C>
EQUITY SECURITIES - COMMON STOCK 77.9%
COMMUNICATIONS 5.5%
Natural Microsystems Corp. 40,000 $1,925,000
CONSUMER 15.8%
A.T. Cross 50,000 $568,750
CompUSA, Inc. 40,000 $2,160,000
One Price Clothing Stores 75,625 $255,234
Opta Food Ingredients, Inc. 150,000 $1,350,000
Softkey International, Inc. 62,150 $1,204,156
CONTRACT MANUFACTURING 9.5%
ACT Manufacturing Co. 185,000 $3,330,000
DIVERSIFIED INDUSTRIES 5.9%
Nashua Corp. 155,000 $2,073,125
ELECTRONIC COMPONENTS 9.7%
C.P. Clare Corp. 110,000 $1,024,375
Cerion Technologies, Inc. 213,500 $1,174,250
PCD, Inc. 100,000 $1,200,000
ENERGY 4.0%
Energy Research Corp. 110,000 $1,402,500
FACTORY AUTOMATION 7.7%
Parametric Technology Corp. 54,600 $2,695,875
INTERNET 2.5%
CMG Information Services 60,000 $870,000
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
AH&H PARTNERS FUND LIMITED PARTNERSHIP
Investment Portfolio
As of September 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
INDUSTRY & COMPANY Shares Value
<S> <C> <C>
MEDICAL 3.1%
IMNET Systems 56,396 $1,099,722
SEMICONDUCTORS 8.1%
Aseco Corp. 139,820 $1,275,858
Asyst Technologies, Inc. 80,000 $1,540,000
SOFTWARE 6.1%
Datawatch Corp. 135,000 $1,130,625
Softdesk, Inc. 27,500 $189,062
Symantec Corp. 75,000 $815,625
Total Common Stock (Cost $24,983,173) $27,284,157
PRIVATE HOLDINGS 9.0%
Advanced UroScience, Inc. 15,000 $600,000
Aimtech Corp. 188,887 $566,661
Ascent Pharmaceuticals 153,846 $999,999
Auburn Farms 100,000 $100,000
Cerulean Technology 255,546 $250,001
Marathon Technologies 31,250 $250,000
Sys-Tech Solutions (Conv. Note) 900 $89,986
Sys-Tech Solutions (Com. Stock) 49,965 $14,996
Sys-Tech Solutions (Pfd. Stock) 2,777 $277,700
Total Private Holdings (Cost $3,021,573) $3,149,343
CASH & EQUIVALENTS 15.4%
Fidelity Daily Money Market Fund $1,533,053
Fidelity US Treasury Income Fund $1,397,188
State Street Repos $2,463,872
Total Cash & Equivalents (Cost $5,394,113) $5,394,113
SECURITIES SOLD SHORT -2.3%
Bay Networks (30,000) ($817,500)
Total Securities Sold Short (Cost -$867,571) ($817,500)
TOTAL INVESTMENT PORTFOLIO 100% $35,010,113
(Cost $32,517,288)
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
AH&H PARTNERS FUND LIMITED PARTNERSHIP
Statement of Assets and Liabilities
As of September 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Quarter Ending
Sept. 30, 1996
--------------
ASSETS
<S> <C>
Investments at value (Cost Basis $33,384,859) $35,822,113
Cash $100
Note & Interest Receivable $20,190
Short Sale Proceeds Receivable $867,571
Receivable for Investments Sold $77,483
-------------
Total Assets $36,787,457
-------------
-------------
LIABILITIES
Accrued management fees $89,926
Accrued capital withdrawals $1,089,336
Accrued BOD Fees $2,500
Securities sold short at value $817,500
(Proceeds receivable $867,600) -------------
Total Liabilities $1,979,072
-------------
NET ASSETS $34,788,195
-------------
-------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
AH&H PARTNERS FUND LIMITED PARTNERSHIP
Statement of Operations
For three months ending September 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Quarter Ending
Sept. 30, 1996
----------------
INVESTMENT INCOME
<S> <C>
Income:
Dividends $50,947
Interest $13,790
----------------
Total Income $64,737
Expenses:
Management Fees $89,926
Other expenses $2,500
---------------
Total expenses $92,426
Net investment loss ($27,689)
---------------
---------------
NET REALIZED & UNREALIZED GAIN(LOSS)
Net realized loss ($2,090,551)
Net unrealized depreciation ($531,702)
Net loss on investments ($2,622,253)
---------------
NET DECREASE IN NET ASSETS ($2,649,942)
---------------
---------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
AH&H PARTNERS FUND LIMITED PARTNERSHIP
Statement of Changes in Net Assets
For three months ending September 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Quarter Ending
Sept. 30, 1996
------------------
DECREASE IN NET ASSETS
<S> <C>
Operations:
Net investment loss ($27,689)
Net realized loss ($2,090,551)
Net unrealized depreciation ($531,702)
----------------
Net decrease in net assets from operations ($2,649,942)
Contributions to capital $2,431,112
Withdrawals from capital ($1,089,336)
-----------------
DECREASE IN NET ASSETS ($1,308,166)
Net assets at beginning of period $36,096,361
NET ASSETS AT END OF PERIOD $34,788,195
-----------------
-----------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
AH&H PARTNERS FUND LIMITED PARTNERSHIP
Notes to Financial Statements
For three months ending September 30, 1996
(Unaudited)
1 - SIGNIFICANT ACCOUNTING POLICIES
The AH&H Partners Fund Limited Partnership(the "Partnership")was
organized June 8,1990 as a Massachusetts limited partnership and
is registered with the Securities and Exchange Commission as a
closed-end, non-diversified management investment company. The
Agreement of Limited Partnership was amended and restated on
September 13,1990, April 1,1992 and January 1,1996. The Partner-
ship operates under the Investment Company Act of 1940(the "1940 Act")
as an interval fund. The Partnership's interests are not registered
under the Securities Act of 1933.
Adams, Harkness & Hill, Inc., a Massachusetts Corporation, serves as
Managing General Partner. The Managing General Partner must maintain
a capital account balance equal to the lesser of 1% of the sum of all
the positive capital account balances of all the Partners or the
greater of $500,000 or 0.2% of the sum of the positive capital account
balances of all the Partners.
The policies described below are followed consistently by the Partner-
ship in preparation of its financial statements in conformity with
generally accepted accounting principles.
Security Valuation
Portfolio securities which are traded on U.S. stock exchanges are
valued at the most recent sale price reported on the exchange on
which the security is traded most extensively. If no sale occurred,
the security is valued at the mean between the closing bid and asked
prices. Securities for which market quotations are not readily
available are valued at "fair value" as determined in good faith by
the general partner.
Securities Sold Short
The Partnership is engaged in selling securities short, which
obligates the Partnership to replace a security borrowed by purchas-
ing the same security at current market value. The Partnership would
incur a loss if the price of the security increases between the date
of the short sale and the date on which the Partnership replaces the
borrowed security. The Partnership would realize a gain if the price
of the security declines between those dates.
Securities Transactions and Investment Income
Securities transactions are recorded on a trade-date basis. Securities
gains or losses are determined on the identified cost basis. Dividend
income is recorded on the ex-dividend date. Interest income, includ-
ing original issue discount, where applicable, is recorded on an accrual
basis, except for bonds trading "flat", in which case interest is recorded
when received.
8
<PAGE>
AH&H PARTNERS FUND LIMITED PARTNERSHIP
Notes to Financial Statements
For three months ending September 30, 1996
(Unaudited)
1 - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Federal and State Income Taxes
No federal or state income tax is imposed on the Partnership
as an entity. The Partnership's income, gains, losses, deductions
and credits flow through to the Partners. Each partner must
include his or her share of partnership income in his or her
tax returns.
2 - INVESTMENT ADVISORY AGREEMENTS & TRANSACTIONS WITH AFFILIATED PERSONS
The Partnership has an investment advisory agreement with the
Managing General Partner. Certain individuals who are executive
officers and directors of the Managing General Partner are also
Limited Partners of the Partnership.
For the three months ended September 30, 1996, the Managing
General Partner received fees of $89,926 for investment and
advisory services under the agreement. The fee is paid quarterly
with an annual fee basis of 1%. In addition, the Partnership
Agreement provides for a performance allocation from the Limited
Partners to the General Partner, equal to 15% of the return which
exceeds a cumulative 6% annual return. The performance allocation,
if there is one, is determined after the close of the calendar year.
3 - INVESTMENT TRANSACTIONS
Purchases and proceeds from sales of investment securities (excluding
short term investments) for the three months ended September 30,1996
aggregated $2,555,808 and $5,220,393, respectively.
4 - SIGNIFICANT SUBSEQUENT EVENT
The Partnership agreement provides for a Partnership termination
date of December 31, 2050.
9
