The Apex Mid Cap Growth Fund
Soundview Plaza, 1266 E. Main Street
Stamford, CT 06902 Telephone 800 446 2987
SEMI-ANNUAL REPORT
JANUARY 31, 1998
March 16, 1998
Enclosed is the semi-annual report of the Apex Mid Cap Growth Fund for
the 6 months ending January 31st, 1998.
Suresh L. Bhirud
Chairman of the Board
<TABLE>
THE APEX MID CAP GROWTH FUND
SCHEDULE OF INVESTMENTS REPORT DATE 31-Jan-98
<CAPTION>
CO. NAME Shares % MV Cost Market
Value Value
<S> <C> <C> <C> <C>
COMMON STOCKS
NOVEN PHARMACEUTICAL * 2,000 36,120 16,125
VIVUS INC * 1,000 29,820 14,813
TOTAL Chemical Prdcts. 1.84 65,940 30,938
TELEVIDEO SYS INC * 10,000 12,050 4,688
BAY NETWORKS INC * 2,000 53,265 54,375
TOTAL Industrial Mach. 3.52 65,315 59,063
ZENITH ELECTRS CORP * 2,000 39,890 13,250
ASCEND COMMUNICATION * 2,000 88,505 59,125
NOISE CANCELLATION T * 3,000 4,305 3,188
TOTAL Electronic Prdcts 4.5 132,700 75,563
TRIMEDYNE INC * 5,000 38,750 13,125
IMATRON INC * 2,000 9,125 4,940
UNITED STATES SURGIC 1,700 64,024 48,556
TOTAL Measurmt. Devices 3.97 111,899 66,621
AIRTRAN HOLDINGS INC * 2,000 15,140 8,250
TOTAL Air Transport 0.49 15,140 8,250
CAI WIRELESS SYS INC * 5,000 62,375 2,500
TOTAL Communications 0.15 62,375 2,500
HANOVER DIRECT INC * 5,000 9,213 16,875
TOTAL Misc. Stores 1 9,213 16,875
PARAMETRIC 433 55,350 21,975
NETSCAPE COMMUNICATI * 300 12,284 4,819
APPLIX INC * 3,000 107,960 18,375
INTUIT INC * 1,000 52,250 37,375
SPYGLASS INC. * 2,000 18,390 11,625
CAMELOT CORP * 625 110,313 1,797
TOTAL Business Services 5.71 356,546 95,965
SANCTUARY WOODS * 400 54,990 128
VISTA 2000 INC * 4,000 44,280 250
TOTAL Other 0.02 99,270 378
TOTAL ASSETS 21.2 918,398 356,160
COMMON STOCKS - SHORT SELLS
BRIGGS & STRATTON CO -600 -29,302 -26,438
ULTRATECH STEPPER IN * -1,000 -24,929 -20,500
DELL COMPUTER CORP * -400 -31,474 -39,775
CISCO SYS INC * -600 -31,236 -37,838
TOTAL Industrial Mach. -7.41 -116,941 -124,550
LATTICE SEMICONDUCTO * -300 -14,043 -13,838
LINEAR TECHNOLOGY CO -300 -15,768 -19,875
TOTAL Electronic Prdcts -2.01 -29,811 -33,713
OEA INC -1,000 -31,054 -27,813
TOTAL Transport Equip. -1.66 -31,054 -27,813
AIRBORNE FGHT CORP -400 -27,721 -28,450
TOTAL Air Transport -1.69 -27,721 -28,450
GADZOOKS INC * -1,000 -25,742 -20,000
TOTAL Apparel Stores -1.19 -25,742 -20,000
AMAZON COM. INC. * -600 -28,270 -35,400
TOTAL Misc. Stores -2.11 -28,270 -35,400
MORGAN J P & CO INC -300 -32,688 -30,356
MORGAN ST DEAN WITTER -600 -30,744 -35,025
TOTAL Deposit Inst. -3.89 -63,432 -65,381
E TRADE GROUP INC * -300 -6,705 -6,543
E TRADE GROUP INC * -1,100 -29,622 -23,994
TOTAL Brokers/Dealers -1.82 -36,327 -30,537
AMERICA ONLINE INC. * -400 -31,159 -38,275
YAHOO INC * -600 -27,674 -38,025
TOTAL Business Services -4.54 -58,833 -76,300
TOTAL ASSETS -26.32 -418,131 -442,144
STAR BANK REPO'S 109,100 64.95 1,091,000 1,091,000
TOTAL INVESTMENTS 1,591,267 1,005,016
OTHER ASSETS (LESS LIABILITIES) 674,779 674,779
NET ASSETS 100 1,679,795
NET ASSETS VALUE PER SHARE 7.34
OFFERING PRICE PER SHARE 7.79
<FN>
* Non - income producing securities
</FN>
</TABLE>
THE APEX MID CAP GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES January 31, 1998 (UNAUDITED)
ASSETS
Investment Securities at Value $1,005,016
(Identified cost - $1,591,267) (Note 1)
Cash 938
Receivable From Advisor (Note 4) 17,798
Interest receivable 284
Prepaid Items 532
Due from broker - Short sales 703,706
Total Assets $1,728,274
LIABILITIES
Payables:
Payable for Securities Purchased $ 26,163
Accrued expenses 22,316
Total Liabilities ($48,479)
NET ASSETS (Equivalent to $7.34 per share based on 228,974
shares outstanding) $ 1,679,795
COMPOSITION OF NET ASSETS:
Paid in Capital $ 2,749,016
Distribution in excess of accumulated Net
Realized gain (482,969)
Accumulated Net Investment Income --
Net Unrealized Depreciation of Investments (586,252)
Total Net Assets $1,679,795
STATEMENT OF OPERATIONS (UNAUDITED) FOR THE 6 MONTHS ENDED
JANUARY 31, 1998
INVESTMENT INCOME
Dividends $ 1,526
Interest 16,131
EXPENSES
Audit $ 4,000
Fund Accounting 5,400
Transfer Agent (Note 6) 4,800
Legal 3,585
Miscellaneous 0
Shareholder Report 2,790
Directors 0
Registration 4,540
Organization (Note 5) 9,889
Insurance 1,458
Fund Administration (Note 4) 1,675
Custodian 3,300
Investment Advisor (Note 4) 8,378
Dividends on Short Sales 633
12b-1 Fees 2,084
Total Expenses ( 52,532)
Expense Reimbursement/ waived by Advisor (Note 4) 10,053
Expense net of Reimbursement/ waiver (42,479)
NET INVESTMENT LOSS $ ( 24,822)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net Realized Gain (Loss) on Investments $ 388,899
Change in Unrealized Appreciation (Depreciation) of
Investments (263,493)
NET REALIZED/UNREALIZED GAIN (LOSS) ON INVESTMENTS $125,406
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $100,584
See accompanying Notes to Financial Statements PAGE: 4
<TABLE>
THE APEX MID CAP GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS JANUARY 31,1998 (UNAUDITED)
<CAPTION>
For the six For ther
Months Year
Ended Ended
January 31,1998 July 31, 1997
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Net Investment Income/ (loss) $ (24,822) $(75,923)
Net Realized Gain / (loss) on investment
Securities Sold 388,899 (198,579)
Net unrealized appreciation/(depreciation) of
Investments (263,493) 300,684
Net Increase (Decrease) in Net Assets Resulting
from Operations $ 100,584 $ 26,182
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Dividend distributions paid 0 83,993
Capital Gains 0 00
Total Distributions 0 83,993
CAPITAL SHARE TRANSACTIONS
Shares Sold 101,384 708,471
Shares issued in lieu of Cash Distributions 0 (83,993)
Cost of shares Redeemed (214,996) (896,690)
Increase (Decrease) in Net Assets Due to
Capital Share Transactions (113,612) (272,212)
TOTAL INCREASE (DECREASE) IN NET ASSETS ( 13,028) (162,037)
NET ASSETS BEGINNING OF PERIOD 1,692,823 1,854,860
NET ASSETS END OF PERIOD $ 1,679,795 $ 1,692,823
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING THROUGHOUT EACH
PERIOD (UNAUDITED)
<CAPTION>
For the For the For the
6 Months Year Ended Year Ended
Ended
January 31, July 31, July 31,
1998 1997 1996
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $6.93 $7.18 $9.71
Income/(Loss) from Investment Operations:
Net Investment Income/(Loss) (0.10) (0.33) (0.35)
Net Gain/(Loss) on Securities
(Both Realized and Unrealized) 0.51 0.44 (2.63)
Total from Investment Operations 0.41 0.11 (2.98)
Distributions:
Dividend Distributions Paid 0.00 (0.36) 0.45
Distributions from Capital Gains 0.00 0.00 0.00
Total Distributions 0.00 (0.36) 0.45
NET ASSET VALUE, END OF PERIOD $ 7.34 $ 6.93 $ 7.18
Total Return (Not Reflecting Sales Load) 5.91%** (3.48)% (26.05)%
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $1,679 $1,693 $1,855
Ratios to Average Net Assets:
Expenses 2.52%** 5.25% 2.52%
Net Investment Income/(Loss) (1.47)%** (4.73)% (2.11)%
Effect of Reimbursements/Waivers on
Above Ratios 0.60%** 1.21% 1.28%
Portfolio Turnover Rate 41.16%** 275.55% 320.89%
Average Commission Rate Paid $/Share $ 0.069 $ 0.06 $0.0413
<FN>
* Based on weighted average shares outstanding
** Not annualized
See accompanying Notes to Financial Statements PAGE: 5
</FN>
</TABLE>
THE APEX MID CAP GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JANUARY 31, 1998
1. SIGNIFICANT ACCOUNTING POLICIES
Bhirud Funds, Inc. (the "Fund") is a diversified open-end
management investment company currently consisting of The Apex
Mid Cap Growth Fund portfolio (the "Portfolio"). The Fund was
incorporated in Maryland on May 27, 1992. Prior to November 4,
1992 (commencement of operations), the Fund had no operations
other than the sale of 10,000 shares of stock on August 4, 1992
at a cost of $100,000 to Thomas James MidCap Partners
representing the initial capital. The following is a summary of
significant accounting policies followed by the Fund:
SECURITY VALUATION
Readily marketable portfolio securities listed on the New York
Stock Exchange are valued at the last sale price reflected at
the close of the regular trading session of the New York Stock
Exchange on the business day as of which such value is being
determined. If there has been no sale on such day, the
securities are valued at the mean of the closing bid and asked
prices on such day. If no bid or asked prices are quoted on
such day, then the security is valued by such method as the
Board of Directors shall determine in good faith to reflect its
fair value. Readily marketable securities not listed on the New
York Stock Exchange but listed on other national securities
exchanges or admitted to trading on the National Association of
Securities Dealers Automated Quotations, Inc. ("NASDAQ")
National List are valued in like manner. Portfolio securities
traded on more than one national securities exchange are valued
at the last price on the business day as of which such value is
being determined as reflected on the tape at the close of the
exchange representing the principal market for such securities.
Readily marketable securities traded in the over-the-counter
market, including listed securities whose primary market is
believed by the Advisor to be over-the-counter but excluding
securities admitted to trading on the NASDAQ National List, are
valued at the mean of the current bid and asked prices as
reported by NASDAQ or, in the case of securities not quoted by
NASDAQ, the National Quotation Bureau or such other comparable
sources as the Board of Directors deem appropriate to reflect
their fair value.
United States Government obligations and other debt instruments
having sixty days or less remaining until maturity are stated at
amortized cost. Debt instruments having a greater remaining
maturity will be valued at the highest bid price obtained from a
dealer maintaining an active market in that security or on the
basis of prices obtained from a pricing service approved as
reliable by the Board of Directors.
SECURITY TRANSACTIONS AND INVESTMENT INCOME
Security transactions are accounted for on the dates the
securities are purchased or sold (the trade dates), with
realized gain and loss on investments determined by using
specific identification as the cost method. Interest income
(including amortization of premium and discount, when
appropriate) is recorded as earned. Dividend income and
dividends and capital gain distributions to shareholders are
recorded on the ex-dividend date.
FEDERAL INCOME TAXES
The Fund intends to qualify as a "regulated investment company"
under Subchapter M of the Internal Revenue Code and distribute
all of its taxable income to its shareholders. Therefore, no
federal income tax provision is required.
2. CAPITAL STOCK TRANSACTIONS
The Articles of Incorporation, dated May 27, 1992, permit the
Fund to issue twenty billion shares (par value $0.001).
Transactions in shares of common stock for the year ended
January 31, 1998 were as follows:
Shares Amount
Beginning Balance 244,425 $ 2,938,551
Shares Sold 13,825 101,384
Shares Issued in Reinvestment of
Dividends 0 0
Shares Redeemed ( 29,276) ( 214,996)
Net Increase (Decrease) ( 15,451) ( 113,612)
Ending Balance 228,974 $2,824,939
3. INVESTMENTS
Purchases and sales of securities for the six months ended
January 31st, 1998 other than short-term securities, aggregated
$274,141 and $1,681,574, respectively. There were short sale
transactions for the six months ended January 31, 1998 which
aggregate $274,702 of purchases and $575,587 of sales. The cost
of securities is substantially the same for Federal income tax
purposes.
For Federal income tax purposes:
Aggregate Cost $1,591,267
Gross Unrealized Appreciation 33,376
Gross Unrealized Depreciation (619,628)
Net Unrealized Depreciation ($586,252)
Short-Selling. The Fund is engaged in short selling which
obligates the Fund to replace the security borrowed by
purchasing the security at current market value. The Fund would
incur a loss if the price of the security increases between the
date of the short sale and the date on which the Fund replaces
the borrowed security. The Fund would realize a gain if the
price of the security declines between those dates. Until the
Fund replaces the borrowed security, the Fund will deposit
collateral with the broker-dealer, usually cash, U.S. government
securities, or other highly liquid securities, sufficient to
cover its short position. Securities sold short at January 31st,
1998 and their related market values and proceeds are set forth
in the Schedule of Securities Sold Short.
4. INVESTMENT ADVISORY CONTRACT
The Fund employs Bhirud Associates, Incorporated (the "Advisor")
to provide a continuous investment program for the Fund's
portfolio, provide all facilities and personnel, including
Officers required for its administrative management, and to pay
the compensation of all Officers and Directors of the Fund who
are affiliated with the Advisor. As compensation for the
services rendered and related expenses borne by the Advisor, the
Fund pays the Advisor a fee, computed and accrued daily and
payable monthly, equal to 1.00% of the first $250 million of the
average net assets of the Portfolio; 0.75% of the average net
assets of the Portfolio between $250 and $500 million; and 0.65%
of the average net assets of the Portfolio over $500 million.
The Advisor has voluntarily agreed to reimburse the Fund in the
event the Fund's expenses exceed certain prescribed limits.
During the six months ended January 31, 1998 the Advisor elected
to defer the payment of Advisor fees payable in amount of $
8,378. Total reimbursements in the amount of $17,798 have been
accrued for the fiscal year 1997. The Advisor has voluntarily
agreed to waive these fees, considering the small assets of the
Fund. The Advisory and Administrative Services Contracts provide
that if, in any fiscal year, the aggregate expenses of a Fund,
excluding interest, taxes, brokerage and extraordinary expenses,
but including the Advisory and Administrative Services fees,
exceed the expense limitation of any state in which the Trust is
registered for sale, the Funds may deduct from fees paid to the
Advisor and Administrator their proportionate share of such
excess expenses to the extent of the fees payable. Currently,
the most restrictive state limitation is 2.5% of the first $30
million, 2% of the next $70 million and 1.5% of the excess over
$100 million of the average value of the Fund's net assets.
The Fund retained Bhirud Associates, Inc. ("BAI") to act as
Administrator for the Fund from November 1, 1994. BAI provided
administrative services for the Fund. During the six months
ended January 31, 1998 the Administrator elected to defer the
payment of Administrative service fees payable in amount of
$1,675.
From December 1, 1996, the Star Bank, N.A. has been providing
custodian services and fund accounting, and transfer agency
functions are provided by American Data Services for the Fund
until January 31st, 1998. From February 1st, 1998, the Mutual
Shareholders Services, Inc. has been providing fund accounting,
and transfer agency functions.
6. DISTRIBUTION PLAN
The Fund's Board of Directors has adopted a distribution plan
(the "Plan") under Section 12(b) of the Investment Company Act
of 1940 and Rule 12b-1 thereunder. The Plan provides that the
Portfolio may bear certain expenses and costs which in the
aggregate are subject to a maximum of 0.25% per annum of the
Portfolio's average daily net assets. For the six months ended
January 31st, 1998, the Fund has incurred distribution costs of
$1,213 payable to payable to Bhirud Associates, Inc.
7. TRANSACTIONS WITH AFFILIATES
During the six months ended January 31st, 1998 the Fund paid $
1,974 brokerage commissions to Bhirud Associates, Inc.
8. RECLASSIFICATION OF CAPITAL ACCOUNTS
In accordance with generally accepted accounting principals, the
Fund recorded reclassifications in the capital accounts. The
Fund recorded a permanent book/tax difference of $(75,923) as of
July 31, 1997, from undistributed net investment income to paid
in capital. These reclassifications have no impact on net asset
value of the Fund and are designed generally to present
undistributed income and realized gains on a tax basis which is
considered to be more informative to the shareholder.
THE APEX MID CAP GROWTH FUND
SOUNDVIEW PLAZA
1266 EAST MAIN STREET
STAMFORD, CT 06902
(800) 446-2987
BOARD OF DIRECTORS
Suresh L. Bhirud* Chairman of the Board; President of
Bhirud Associates, Inc.
Alexander N. Crowder, III Management Consultant
Harish L. Bhirud* Bhirud Funds Inc..
M. John Sterba, Jr. Chairman of Investment Management
Advisors, Inc.
Tim Fenton Partner, Fenton & Zelenetz, Inc.
* "Interested person" as defined in the Investment Company Act
of 1940.
OFFICERS
Suresh L. Bhirud* Chairman of the Board & Treasurer
Harish L. Bhirud* Vice-President
Investment Advisor & Distributor Bhirud Associates, Inc.
Administrator Bhirud Associates, Inc.
Custodian Star Bank, N.A.
Legal Counsel Battle Fowler
Independent Auditors Van Buren & Hauke, LLC
