June 30, 2000
-------------------------------
Special Situations Second
Fund III, L.P. Quarter
Report
SPECIAL SITUATIONS FUND III, L.P
INDEX TO SECOND QUARTER REPORT
JUNE 30, 2000
-----------------------------------------------------------------
PAGE
Statement of Financial Condition 1
Portfolio of Investments 2
Statement of Operations 10
Statements of Changes in Partners' Capital 11
Notes to the Financial Statements 12
SPECIAL SITUATIONS FUND III, L.P.
(A Limited Partnership)
STATEMENT OF FINANCIAL CONDITION
JUNE 30, 2000
(Unaudited)
ASSETS - NOTE 2
Investments, at fair value (cost $161,216,637) $ 212,017,496
Cash and cash equivalents 51,193,867
Receivable for investments sold 4,419,156
Other 5,000
Total Assets $ 267,630,519
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Payable for units repurchased - Note 4 $ 7,938,503
Securities sold short, at fair value
(proceeds $4,144,254) - Note 10 2,045,829
Payable for investments purchased - Note 2 5,779,152
Administrator's fee payable - Note 7 459,345
Accrued expenses 133,100
Total Liabilities 16,355,929
Partners' Capital - Notes 1, 3 and 4
Limited Partners 223,103,305
Corporate General Partner 23,875,853
Individual General Partners 4,295,432
Total Partners' Capital 251,274,590
Total Liabilities and Partners' Capital $ 267,630,519
See the accompanying Notes to the Financial Statements.
1
SPECIAL SITUATIONS FUND III, L.P.
(A Limited Partnership)
PORTFOLIO OF INVESTMENTS
JUNE 30, 2000
(Unaudited)
Fair
Shares Commmon Stocks Value
-----------------------------------------------------------------
Aerospace 1.56%
871,600 SPACEHAB, Incorporated (a) $ 3,922,200
Automotive 0.18%
94,300 Lund International Holdings, Inc. 447,925
289,000 Steel City Products, Inc. 11,560
---------
459,485
Beverages - Alcohol 1.54%
285,900 Ravenswood Winery, Inc. 3,859,650
Biotechnology 2.60%
216,300 ArQule, Inc. 4,190,813
83,700 Diacrin, Inc. 659,137
383,700 La Jolla Pharmaceutical Company 1,582,763
30,000 Trega Biosciences, Inc. 95,625
----------
6,528,338
Broadcasting 0.08%
208,800 Film Roman, Inc. 208,800
Capital Equipment 1.04%
174,500 Quixote Corporation 2,617,500
Communications Products 1.59%
139,300 Corsair Communications, Inc. 4,004,875
Computer Equipment 1.81%
469,900 ION Networks, Inc. 1,439,069
107,550 SeaChange International, Inc. 3,105,506
----------
4,544,575
Computer Services - Software 13.79%
256,600 Ansoft Corporation 2,566,000
297,300 ANSYS, Inc. 3,381,787
375,000 Burst.com, Inc. (Restricted) 1,500,000
106,600 CryptoLogic, Inc. 2,251,925
550,538 CUseeMe Networks, Inc. 5,023,659
347,100 eCollege.com 1,518,563
376,340 Fourth Shift Corporation 1,129,020
483,900 Gensym Corporation (a) 1,754,137
29,900 Interplay Entertainment Corp. 78,488
See the accompanying Notes to the Financial Statements.
2
SPECIAL SITUATIONS FUND III, L.P.
(A Limited Partnership)
PORTFOLIO OF INVESTMENTS
JUNE 30, 2000
(Unaudited)
Fair
Shares Common Stocks (Continued) Value
-----------------------------------------------------------------
Computer Services-Software 13.79% (Continued)
290,500 Landacorp, Inc. $ 1,307,250
235,400 LivePerson, Inc. 2,074,462
284,500 Mechanical Dynamics, Inc. 1,449,172
693,700 Peerless Systems Corporation 1,344,044
186,700 Pomeroy Computer Resources, Inc. 2,753,825
72,200 Prime Response, Inc. 496,375
223,500 Silicon Valley Research, Inc. (a) 53,640
945,900 Spatial Technology, Inc. 3,724,481
613,917 Towne Services, Inc. 575,547
37,500 Wave Systems Corporation-Cl A (Rest) 592,969
200,100 Xcare.Net, Inc. 1,075,538
-----------
34,650,882
Electronic Components 5.38%
797,007 Barringer Technologies, Inc. (a) 5,479,400
181,800 Frequency Electronics, Inc. 5,204,025
231,500 Panja, Inc. 2,835,875
----------
13,519,300
Electronic Equipment 1.45%
144,300 Information Resource Engneering, Inc. 3,643,575
Electronic Instruments 0.77%
165,000 Metretek Technologies, Inc. (a) 1,113,750
50,600 Nova Measuring Instruments Ltd. 812,763
----------
1,926,513
Energy - Miscellaneous 0.00%
600,000 Boots & Coots International Well Control(Rest) -
2,900 TGC Industries, Inc. 3,444
------
3,444
Energy - Oil & Gas 1.07%
207,000 3TEC Energy Corporation 2,070,000
210,000 Edge Petroleum Corporation (a) 616,875
---------
2,686,875
Entertainment 0.39%
162,000 Cinar Corporaton 992,250
See the accompanying Notes to the Financial Statements.
3
SPECIAL SITUATIONS FUND III, L.P.
(A Limited Partnership)
PORTFOLIO OF INVESTMENTS
JUNE 30, 2000
(Unaudited)
Fair
Shares Common Stocks (Continued) Value
-----------------------------------------------------------------
Environmental Services 0.72%
900,000 ATG, Inc. (Restricted) $ 1,800,000
Financial Services - Miscellaneous 0.74%
185,500 MicroFinancial Incorporated 1,855,000
Food 0.11%
106,100 Opta Food Ingredients, Inc. 271,881
Gold Mining 0.88%
2,238,500 MK Gold Company (a) 2,203,523
Healthcare Management 0.59%
897,500 Apache Medical Systems, Inc. (a) 1,177,969
118,233 MedNet International Ltd. 301,495
----------
1,479,464
Healthcare - Specialized Products & Services 0.01%
122,800 Accuhealth, Inc. (a) 15,350
100,729 Accuhealth, Inc. (a) (Restricted) 12,591
--------
27,941
Internet Commerce 1.54%
190,597 Cyberian Outpost, Inc. 917,248
486,700 Garden.com, Inc. 1,155,913
68,300 Launch Media, Inc. 631,775
346,500 Salon.com, Inc. 443,953
187,800 The Knot, Inc. 715,987
---------
3,864,876
Manufacturer-Consumer Products 0.34%
281,200 Zindart Limited 843,600
Medical - Drugs 4.55%
436,580 CIMA Labs Inc. 8,840,745
175,100 EPIX Medical, Inc. 2,604,613
----------
11,445,358
See the accompanying Notes to the Financial Statements.
4
SPECIAL SITUATIONS FUND III, L.P.
(A Limited Partnership)
PORTFOLIO OF INVESTMENTS
JUNE 30, 2000
(Unaudited)
Fair
Shares Common Stocks (Continued) Value
-----------------------------------------------------------------
Medical Devices & Equipment 18.75%
684,400 Aksys, Ltd. $ 5,860,175
1,050,900 Applied Imaging Corporation (a) 2,364,525
204,000 Axys Pharmaceutical, Inc. 1,211,250
770,833 Cardima, Inc. 915,364
55,700 EP MedSystems, Inc. 271,537
375,000 EP MedSystems, Inc. (Restricted) 1,828,125
416,700 Image Guided Technologies, Inc. (a) 781,312
497,700 IRIDEX Corporation (a) 6,345,675
104,400 Invivo Corporation 1,148,400
124,864 Laser Photonics, Inc. 1,982,216
364,200 Laserscope, Inc. 557,681
726,800 Optical Sensors Incorporated (a) 522,388
142,144 Possis Medical, Inc. 890,621
350,000 Precision Optics Corporation, Inc. (a) 4,960,625
250,300 Protocol Systems, Inc. 3,989,156
645,100 Somnus Medical Technologies, Inc. 2,419,125
778,000 The Spectranetics Corporation 3,841,375
446,400 Thoratec Laboratories Corporation 7,226,100
----------
47,115,650
Medical Instruments 1.69%
450,000 Intuitive Surgical, Inc. 4,246,875
Paper - Packaging 0.00%
593,749 Chase Packaging Corporation -
Pharmaceutical Products 1.16%
416,667 Axcan Phama, Inc. 2,916,669
Restaurant 2.03%
490,200 Avado Brands, Inc. 735,300
757,100 Famous Dave's of America, Inc. (a) 3,359,631
94,500 Uno Restaurant Corporation 1,009,969
----------
5,104,900
See the accompanying Notes to the Financial Statements.
5
SPECIAL SITUATIONS FUND III, L.P.
(A Limited Partnership)
PORTFOLIO OF INVESTMENTS
JUNE 30, 2000
(Unaudited)
Fair
Shares Common Stock (Continued) Value
-----------------------------------------------------------------
Retail 10.89%
223,200 1-800 CONTACTS, INC. $ 10,490,400
340,700 EZCORP, Inc. 596,225
114,600 GAIAM, Inc. 2,120,100
218,800 iGo Corporation 847,850
706,300 J. Jill Group, Inc. (a) 4,590,950
419,025 Movado Group, Inc. 5,028,300
147,286 SkyMall, Inc. 349,804
150,000 SkyMall, Inc. (Restricted) 300,000
178,000 Steven Madden Ltd. 1,168,125
155,900 Travis Boats & Motors, Inc. 857,450
150,800 West Marine, Inc. 1,013,188
-----------
27,362,392
Services 1.00%
855,500 Collectors Universe, Inc. 2,513,031
Specialized Services 0.44%
183,333 RateXchange Corporation (Restricted) 1,111,456
Specialty Financial 2.10%
201,000 Medallion Financial Corporation 3,102,938
288,900 MFC Bancorp Ltd. 2,166,750
---------
5,269,688
Telecommunications- Hardware 0.00%
4 Netrix Corporation 49
Transportation 0.92%
228,800 Aramex International Limited 2,288,000
800,000 Country Wide Transport Services, Inc.(a) 16,000
----------
2,304,000
Total Common Stocks 81.71% 205,304,615
See the accompanying Notes to the Financial Statements.
6
SPECIAL SITUATIONS FUND III, L.P.
(A Limited Partnership)
PORTFOLIO OF INVESTMENTS
JUNE 30, 2000
(Unaudited)
Fair
Shares Preferred Stocks Value
-----------------------------------------------------------------
Electronic Instruments 0.37%
825 Metretek Technologies, Inc. 8% (a) $ 938,561
Energy - Services 0.14%
148,300 TGC Industries, Inc. (a) 352,213
Healthcare - Specialized Products & Services 0.04%
425,000 Accuhealth, Inc. convertible preferred (a) 106,250
Medical Devices 1.04%
13,125 PharmaNetics, Inc. 6% 2,608,594
Total Preferred Stocks 1.59% 4,005,618
Principal Fair
Amount Corporate Bonds Value
-----------------------------------------------------------------
Medical Devices 0.28%
700,000 Optical Sensors Incorporated,due 3/10/01 $ 700,000
Fair
Warrants Warrants Value
-----------------------------------------------------------------
Biotechnology 0.07%
271,000 Diacrin, Inc. 12/31/00 $ 169,375
Broadcasting 0.00%
43,125 Children's Broadcasting Corporation 1/8/01 -
Computer Services-Software 0.00%
375,000 Burst.com, Inc. 1/27/05 (Restricted) -
422,410 Silicon Valley Research, Inc. 12/29/02 (a) -
------
-
Electronic Components 0.42%
105,800 Energy Conversion Devices, Inc. 7/31/01 1,058,000
See the accompanying Notes to the Financial Statements.
7
SPECIAL SITUATIONS FUND III, L.P.
(A Limited Partnership)
PORTFOLIO OF INVESTMENTS
JUNE 30, 2000
(Unaudited)
Fair
Warrants Warrants (Continued) Value
-----------------------------------------------------------------
Electronic Instruments 0.01%
82,500 Metretek Technologies, Inc. 12/9/04 (a) $ 41,250
Energy - Miscellaneous 0.00%
300,000 Boots & Coots International Well Control -
5/14/02 (Restricted)
180,000 Boots & Coots International Well Control -
5/14/04 (Restricted) -----
-
Energy - Oil & Gas 0.00%
72,414 Edge Petroleum Corporation 5/5/04 (a) 7,241
Medical Devices & Equipment 0.22%
5,771 Cambridge Heart, Inc. 6/9/03 2,886
154,167 Cardima, Inc. 2/14/05 15,417
248,700 Hemagen Diagnostics, Inc. 2/28/01 93,262
26,250 PharmaNetics, Inc. 2/25/05 262,500
13,252 Possis Medical, Inc. 6/2/03 1,325
10,760 Possis Medical, Inc. 3/6/04 (Restricted) 1,076
11,100 Precision Optics Corporation 8/5/04 (a) 172,744
--------
549,210
Medical Information Systems 0.00%
1,100,000 LifeRate Systems, Inc. 9/14/07 (a) -
1,100,000 LifeRate Systems, Inc. 9/14/07 (a) (Restricted) -
--------
-
Retail 0.02%
95,000 PawnMart, Inc. A 3/11/03 17,813
90,000 PawnMart, Inc. B 3/11/04 5,625
96,450 SkyMall, Inc. A 11/02/04 (Restricted) 12,056
47,143 SkyMall, Inc. B 12/21/05 5,893
-------
41,387
Specialized Services 0.00%
91,667 RateXchange Corporaton (Restricted) 3/21/03 -
Total Warrants 0.74% 1,866,463
----------
See the accompanying Notes to the Financial Statements.
8
SPECIAL SITUATIONS FUND III, L.P.
(A Limited Partnership)
PORTFOLIO OF INVESTMENTS
JUNE 30, 2000
(Unaudited)
Fair
Units Units Value
-----------------------------------------------------------------
Housing-Construction 0.06%
281,600 Boulevard Investment Group $ 140,800
TOTAL INVESTMENTS 84.38% $ 212,017,496
--------------
Fair
Shares Securities Sold Short Value
-----------------------------------------------------------------
Auto Parts - After Market 0.14%
47,500 BOLDER Technologies Corporation 362,136
Biotechnology 0.07%
18,500 Allos Therapeutics, Inc. 180,375
Computer Services - Software 0.24%
37,800 Wave Systems Corporation - Class A 597,712
Medical Devices & Equipment 0.35%
1,000 Hemagen Diagnostics, Inc. 1,750
140,800 Possis Medical, Inc. 882,200
---------
883,950
Retail 0.01%
4,500 Cyberian Outpost, Inc. 21,656
TOTAL SECURITIES SOLD SHORT 0.81% $ 2,045,829
------------
(a) Affiliated issuer under the Investment Company Act of
1940, inasmuch as the Fund owns more than 5% of the
voting securities of the issuer.
All percentages are relative to Partners' Capital.
See the accompanying Notes to the Financial Statements.
9
SPECIAL SITUATIONS FUND III, L.P.
(A Limited Partnership)
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2000
(Unaudited)
-----------------------------------------------------------------
INCOME
Net realized gain on investments $ 61,343,041
Net change in unrealized appreciation (17,017,525)
Net gain on investment portfolio 44,325,516
Interest 1,560,969
Dividends 115,530
Total 46,002,015
EXPENSES
Administrator's fee - Note 7 973,096
Professional fees 100,982
Independent General Partners' fees 15,000
Other 48,141
Total 1,137,219
Net Income $ 44,864,796
See the accompanying Notes to the Financial Statements.
10
SPECIAL SITUATIONS FUND III, L.P.
(A Limited Partnership)
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
(Information Subsequent to December 31, 1999 is Unaudited)
Per Limited Corporate Individual
Partners' Limited General General
Unit Partners Partner Partners Total
YEAR ENDED
DECEMBER 31, 1999:
BALANCE,
DECEMBER 31, 1998 $122,658,907 $6,473,686 $5,711,704 $134,844,297
Capital contributions 2,298,240 - - 2,298,240
Transfers - (776,763) 776,763 -
Allocation of net income:
Corporate General Partner -
Performance - 16,893,584 - 16,893,584
Partners 80,286,895 3,775,527 3,231,643 87,294,065
Repurchases (10,531,889) (11,500,000)(6,000,000)(28,031,889)
------------ ------------ --------- ------------
BALANCE,
DECEMBER 31, 1999
$25,000 194,712,153 14,866,034 3,720,110 213,298,297
SIX MONTHS ENDED
JUNE 30, 2000:
Capital contributions 1,050,000 - - 1,050,000
Transfers - (2,100,656) 2,100,656 -
Allocation of net income:
Corporate General Partner -
Performance - 8,972,959 - 8,972,959
Partners $ 4,186 32,779,655 2,137,516 974,666 35,891,837
Repurchases (5,438,503) - (2,500,000)(7,938,503)
BALANCE,
JUNE 30, 2000
$25,000 $223,103,305 $23,875,853 $4,295,432 $251,274,590
See Note 4 for changes in Units outstanding.
See the accompanying Notes to the Financial Statements.
11
SPECIAL SITUATIONS FUND III, L.P.
(A Limited Partnership)
NOTES TO THE FINANCIAL STATEMENTS
(Information Subsequent to December 31, 1999 is Unaudited)
NOTE 1- GENERAL:
Special Situations Fund III, L.P. (the "Fund") was organized under
the Delaware Revised Uniform Limited Partnership Act on October
18, 1993, and commenced investment operations on January 1, 1994.
The Fund is a closed-end interval fund registered under the
Investment Company Act of 1940. The Fund will continue until December
31, 2010 unless further extended or sooner terminated as provided for
in the Agreement of Limited Partnership(the "Agreement").
The Agreement provides for not less than three "Individual General
Partners" and a "Corporate General Partner". The General Partners,
as a group, must own not less than one percent (1%) of the Fund's
outstanding Units.
The Corporate General Partner and Investment Adviser is MGP
Advisers Limited Partnership ("MGP"), of which the General Partner
is AWM Investment Company, Inc. ("AWM"). Austin W. Marxe, an
Individual General Partner of the Fund and a limited partner of MGP
owns directly and indirectly a majority of MGP and AWM. Mr. Marxe
is primarily responsible for managing the Fund's investments and
performing certain administrative services on its behalf.
The Fund seeks long-term capital appreciation by investing
primarily in equity securities and securities with equity features
of publicly traded companies which possess a technological, market
or product niche, which may be, for various reasons, undervalued,
or with prospects of going private or being acquired.
NOTE 2- ACCOUNTING POLICIES:
Securities traded on a securities exchange or on the NASDAQ System
are valued at the last reported sales price on the last business day
of the reporting period. Securities for which no sale occurred on
such day are valued at the average of the highest bid and lowest asked
prices on the last trading day. Securities for which market
quotations are not available are valued at fair value as determined in
good faith by the Individual General Partners. Securities
transactions are recorded on trade date. Realized gains and losses on
sales of securities are determined using the specific identification
cost method. Dividend income is recorded on the ex-dividend date, and
interest income is recorded on the accrual basis.
12
SPECIAL SITUATIONS FUND III, L.P.
(A Limited Partnership)
NOTES TO THE FINANCIAL STATEMENTS
(Information Subsequent to December 31, 1999 is Unaudited)
NOTE 2- ACCOUNTING POLICIES (CONTINUED):
Cash and cash equivalents consist principally of cash balances in a
brokerage account.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
NOTE 3- ALLOCATION OF ACCOUNTING PROFITS AND LOSSES:
Net income is allocated; first, to MGP to the extent of any
previous net losses allocated to MGP in excess of the other
partners' capital balances; next, to the partners in proportion to
the number of Units held by each to the extent of net losses
previously allocated to them; and, thereafter, 80% to the partners
in proportion to the number of Units held by each and 20%
performance allocation to MGP. If there is a loss for an
accounting period, the performance allocation to MGP will not apply
to future periods until the loss has been recovered. For purposes
of the performance allocation, net income for the year ended
December 31, 1999 was reduced by a loss carryover from December 31,
1998 of $19,719,728.
Net Losses are allocated to the partners in proportion to the
number of Units Held by each, provided, however, that losses in
excess of an Individual General Partner's or a Limited Partner's
capital balance will be allocated to MGP.
NOTE 4- PARTNER CAPITAL ACCOUNT TRANSACTIONS:
All net income allocated to partners will be reinvested. In order
to maintain a $25,000 price per Unit, the number of Units held by
each partner at the close of each fiscal period (generally June 30
and December 31, commencing December 31, 1994), is adjusted to
equal the Partner's capital account divided by $25,000.
As of each fiscal period, the Fund will offer to repurchase at
least 10% and no more than 25% of the outstanding Units. The
repurchase request deadline will generally be June 16, and December
17, of each year.
13
SPECIAL SITUATIONS FUND III, L.P.
(A Limited Partnership)
NOTES TO THE FINANCIAL STATEMENTS
(Information Subsequent to December 31, 1999 is Unaudited)
NOTE 4- PARTNER CAPITAL ACCOUNT TRANSACTIONS (CONTINUED):
In May 2000, the Fund offered to repurchase up to 1,036.8524 Units
(10% of its outstanding Units at June 30, 2000 after the semi-
annual adjustments of Units). 317.5401 Units were tendered for
repurchase.
The Fund also has the right to sell additional Units at the
beginning of each fiscal period.
Changes in Units outstanding are as follows:
Corporate Individual
Limited General General
Partners Partner Partner Total
__________ __________ ____________ _______
Balance, December 31, 1998 4,906.3563 258.9474 228.4682 5,393.7719
Additional Units sold 91.9296 - - 91.9296
Transfers - (31.0705) 31.0705 -
Semi-annual adjustment
of Units 3,211.4758 826.7644 129.2657 4,167.5059
Repurchases (421.2756) (460.0000)(240.00)(1,121.2756)
----------- --------- --------- ---------
Balance, December 31, 1999 7,788.4861 594.6413 148.8044 8,531.9318
Additional Units sold 42.0000 - - 42.0000
Transfer - (84.0262) 84.0262 -
Semi-annual adjustment
of Units 1,311.1862 444.4190 38.9867 1,794.5919
Repurchases (217.5401) - (100.0000)(317.5401)
----------- ---------- --------- --------
Balance, June 30, 2000 8,924.1322 955.0341 171.8173 10,050.9836
----------- --------- -------- ---------
NOTE 5- PURCHASES AND SALES OF SECURITIES:
Purchases and sales of securities for the six months ended June 30,
2000 aggregated $ 105,991,871 and $ 118,626,463, respectively.
14
SPECIAL SITUATIONS FUND III, L.P.
(A Limited Partnership)
NOTES TO THE FINANCIAL STATEMENTS
(Information Subsequent to December 31, 1999 is Unaudited)
NOTE 6- INCOME TAXES:
No provision for income taxes has been made in the accompanying
financial statements as each partner is individually responsible
for reporting income or loss based upon the partner's respective
share of the Fund's income and expenses reported for income tax
purposes.
NOTE 7- RELATED PARTY TRANSACTIONS:
AWM is the administrator of the Fund. The administrator's fee is
computed monthly at an annual rate of .75% of the average net
assets.
The Fund pays each Independent General Partner an annual fee of
$10,000.
NOTE 8- SUPPLEMENTARY FINANCIAL INFORMATION:
Six Months
Ended
June 30,
----------------------------------------------------------
2000 1999 1998 1997 1996 1995
---- ---- ---- ---- ---- ----
Ratio of total 0.89% 1.03% 1.02% .98% 1.00% 1.18%
expenses to
average net
assets
Ratio of net 35.06% 68.01% (12.73)% 21.84% 39.58% 38.09%
income (loss)
to average net
assets
Portfolio 53.38% 140.88% 114.61% 139.70% 228.0% 245.2%
turnover rate
*Annualized
15
SPECIAL SITUATIONS FUND III, L.P.
(A Limited Partnership)
NOTES TO THE FINANCIAL STATEMENTS
(Information Subsequent to December 31, 1999 is Unaudited)
NOTE 9- RETURN ON PARTNER INVESTMENT:
At June 30, 1999, the value of a $25,000 investment made at each
respective subscription date is as follows:
Subscription Date Value
----------------- -----
January 1, 1994 $105,332
January 1, 1995 96,296
July 1, 1995 85,266
January 1, 1996 71,107
July 1, 1996 53,679
January 1, 1997 50,803
July 1, 1997 48,122
January 1, 1998 42,693
July 1, 1998 43,775
January 1, 1999 48,529
July 1, 1999 44,778
January 1, 2000 29,186
NOTE 10- SECURITIES SOLD SHORT:
The Fund is subject to certain inherent risks arising from its
activities of selling securities short. The ultimate cost to
the Fund to acquire these securities may exceed the liability
reflected in the financial statements. In addition, the Fund is
required to maintain collateral with the broker to secure these
short positions.
16
