<PAGE>
AH&H PARTNERS FUND LIMITED PARTNERSHIP
Report on Financial Statements
For the Year Ending December 31, 1999
(audited)
<PAGE>
AH&H PARTNERS FUND LIMITED PARTNERSHIP
Report on Financial Statements
For the Year Ending December 31, 1999
(audited)
CONTENTS
PAGE
Report of Independent Auditors 3
Investment Portfolio
as of December 31,1999 (audited) 4-5
Statement of Assets and Liabilities 6
as of December 31,1999 (audited)
Statement of Operations
for the year ended December 31, 1999 7
(audited)
Statement of Changes in Net Assets
for the years ended December 31, 1999 and 1998 8
(audited)
Notes to Financial Statements 9-10
<PAGE>
To the General Partner and Limited Partners of
AH&H Partners Fund Limited Partnership
Boston, Massachusetts
REPORT OF INDEPENDENT AUDITORS
In our opinion, the accompanying statement of assets and
liabilities, including the schedule of investments, and the related
statements of operations and of changes in net assets, present
fairly, in all material respects, the financial position of
AH&H Partners Fund Limited Partnership (the Partnership) at
December 31, 1999, the results of its operations and the changes in
its net assets for each of the periods indicated, in conformity
with generally accepted accounting principals. These financial
statements are the responsibility of the Partnership's management;
our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we
plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assesing
the accounting principles used and significant estimate made
by management, and evaluating the overall financial statement
presentation.
We believe that our audits, which included confirmation of
securities at December 31, 1999 by correspondence with the
custodian, provide a reasonable basis for the opinion expressed
above.
Creelman & Smith, P.C.
Certified Public Accountants
Boston, Massachusetts
February 14, 2000
3
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AH&H PARTNERS FUND LIMITED PARTNERSHIP
Investment Portfolio
As of December 31, 1999
(audited)
<TABLE>
<CAPTION>
INDUSTRY & COMPANY Shares Value
<S> <C> <C>
EQUITY SECURITIES - COMMON STOCK 75.5%
BUSINESS PRODUCTS AND SERVICES .6%
CompUSA Inc. 30,000 $151,875
COMMUNICATIONS 15.9 %
Netopix Corp 60,000 $4,005,000
CONSUMER- General 7.4%
Safety First 250,000 $1,875,000
ELECTRONIC COMPONENTS 2.8%
PCD, Inc. 106,500 $718,875
FINANCIAL 1.5%
First Finl FD, Inc. Com 50,000 $384,375
INFORMATION TECHNOLOGY 9.4%
Tier Technology 95,238 $803,571
Alpha Industries 20,000 $1,146,250
Rennaissance Worldwide, Inc. 60,000 $442,500
INTERNET 7.1%
Asymetrix Corp. 10,542 $117,280
Webhire Inc 100,000 $1,687,500
MEDICAL 15.3%
Ascent Pediarics 219,969 $274,961
Mecon Inc. 120,500 $1,302,906
Zoll Medical Corp. 60,000 $2,291,250
NATURE PRODUCTS 15.5%
AMBI 500,000 $1,234,375
Natrol Inc. 40,000 $280,000
NBTY Inc. 50,000 $578,125
Rexall Sundown Inc. 50,000 $515,625
Twinlab Corp. 40,000 $317,500
Weider Nutrition Inc. 70,000 $258,125
Opta Food Ingredients 239,000 $746,875
Total Common Stock (Cost $14,377,341) $19,131,968
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
AH&H PARTNERS FUND LIMITED PARTNERSHIP
Investment Portfolio
As of December 31, 1999
(audited)
<TABLE>
<CAPTION>
INDUSTRY & COMPANY Shares Value
<S> <C> <C>
PRIVATE HOLDINGS 15.2%
Advanced UroScience, Inc. 346,429 $1,818,752
Cerulean Technology-Series B Pfd. 255,546 $659,309
Cerulean Technology-Series C Pfd. 42,857 $110,571
Cerulean Technology-Series D Pfd. 13,430 $34,649
Marathon Technologies - Series B 31,250 $375,000
Marathon Technologies - Series D 20,833 $249,996
Molecular Geodesics 650,000 $216,645
Sys-Tech Solutions (Common Stock) 149,965 $14,997
Sys-Tech Solutions- Series A Pfd 2,777 $277,700
Sys-Tech Solutions- Series B Pfd 1,020 $102,000
Total Private Holdings (Cost $3,118,544) $3,859,619
CASH & EQUIVALENTS 9.3%
State Street Checking $3,711
Fidelity Daily Money Market Fund $1,686,016
Fidelity US Treasury Income Fund $679,500
Total Cash & Equivalents (Cost $2,369,227) $2,369,227
TOTAL INVESTMENT PORTFOLIO 100% $25,360,814
(Cost $19,865,112)
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
AH&H PARTNERS FUND LIMITED PARTNERSHIP
Statement of Assets and Liabilities
As of December 31, 1999
(Audited)
<TABLE>
<CAPTION>
Year Ended
Dec. 31, 1999
--------------
ASSETS
<S> <C>
Investments at market value (Cost Basis $19,865,112 $25,360,814
Total Assets $25,360,814
-------------
-------------
LIABILITIES
Accrued capita withdrawls $140,483
Accrued management fees $63,444
Accrued Board of Director fees $2,500
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Total Liabilities $206,427
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NET ASSETS $25,154,387
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</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
AH&H PARTNERS FUND LIMITED PARTNERSHIP
Statement of Operations
For the year ended December 31, 1999
(audited)
<TABLE>
<CAPTION>
Year Ended
Dec. 31, 1999
----------------
INVESTMENT INCOME
<S> <C>
Income:
Dividends $64,644
Interest $14,780
----------------
Total Income $79,424
Expenses:
Management Fees $208,591
Other expenses $10,012
---------------
Total expenses $218,603
Net investment loss ($139,179)
---------------
---------------
NET REALIZED & UNREALIZED GAIN(LOSS)
Net realized gain $388,943
Net unrealized appreciation $5,184,889
Net gain on investments $5,573,832
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NET INCREASE IN NET ASSETS FROM OPERATIONS $5,434,653
---------------
---------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
AH&H PARTNERS FUND LIMITED PARTNERSHIP
Statement of Changes in Net Assets
For year ended Dec. 31, 1999
(audited)
<TABLE>
<CAPTION>
Year Ended Year Ended
Dec. 31, 1999 Dec. 31, 1998
---------------- ----------------
INCREAE (DECREASE) IN NET ASSETS
<S> <C>
Operations:
Net investment loss ($139,179) $(193,885)
Net realized Gain from investment $388,943 $323,813
transactions
Net unrealized appreciation $5,184,889 ($4,531,370)
(depreciation) on investment transactions during the period
--------------- --------------
Net increase (decrease) in net assets $5,434,653 $4,401,442
resulting from operations
Contributions to capital $301,229 $450,000
Withdrawals from capital ($2,349,689) ($8,437,734)
--------------- ---------------
INCREASE (DECREASE) IN NET ASSETS $3,386,1 ($12,389,176)
Net assets at beginning of year $21,768,194 $34,157,370
NET ASSETS AT END OF PERIOD $25,154,387 $21,768,194
-------------- -------------
-------------- -------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
AH&H PARTNERS FUND LIMITED PARTNERSHIP
Notes to Financial Statements
For Year ended Dec. 31, 1999
(audited)
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 may at times, sell 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.
9
<PAGE>
AH&H PARTNERS FUND LIMITED PARTNERSHIP
Notes to Financial Statements
For year ended Dec. 31, 1999
(audited)
1 - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Securities Transactions and Invesment 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 onthe ex-dividend date. Interest income, including
original issue discount, where applicable, is recorded on an accrual
basis, except for bonds trading "flat", in which case interest is
recorded when received.
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 year ended December 31, 1999, the Managing
General Partner received fees of $208,591 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.
There was no performance allocation for the year ended December 31, 1999.
3 - INVESTMENT TRANSACTIONS
Purchases and proceeds from sales of investment securities (excluding
short term investments) for the year ended Dec. 31, 1999
aggregated $9,928,385 and $11,553,818 respectively.
4 - TERMINATION DATE
The Partnership agreement provides for a Partnership termination
date of December 31, 2050.
10
