<PAGE> 1
ANNUAL REPORT AUGUST 31, 1997
OPPENHEIMER
ENTERPRISE
FUND
[PHOTO]
[OPPENHEIMERFUNDS LOGO]
THE RIGHT WAY TO INVEST
<PAGE> 2
CONTENTS
3 President's Letter
4 Fund Performance
6 An Interview
with the Fund's
Managers
10 Statement of
Investments
14 Statement of
Assets &
Liabilities
16 Statement of
Operations
17 Statements of
Changes in
Net Assets
18 Financial Highlights
20 Notes to Financial
Statements
27 Independent
Auditors' Report
28 Federal Income
Tax Information
29 Officers & Trustees
32 Information &
Services
REPORT HIGHLIGHTS
- --------------------------------------------------------------------------------
- - DURING MUCH OF THE PERIOD, investors have shown a preference for larger,
blue-chip multinational companies, which hurt our overall performance.
- - DIVERSIFICATION in a variety of companies and industries has helped lower the
volatility of small and micro-cap investments.
- - ENERGY STOCKS have shown positive gains in the U.S. and abroad, due to
strengthening economies in many parts of the world.
AVG. ANNUAL TOTAL RETURNS
For the Period Ended 8/31/97(1)
<TABLE>
<S> <C>
CLASS A
1 year Since inception
17.88% 39.25%
CLASS B
1 year Since inception
17.03% 38.25%
CLASS C
1 year Since inception
16.97% 38.21%
</TABLE>
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
IN REVIEWING PERFORMANCE AND RANKINGS, PLEASE REMEMBER THAT PAST PERFORMANCE
DOES NOT GUARANTEE FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST.
1. Includes changes in net asset value per share without deducting any sales
charges. Such performance would have been lower if sales charges were taken
into account.
2 Oppenheimer Enterprise Fund
<PAGE> 3
[PHOTO]
BRIDGET A. MACASKILL
President
Oppenheimer
Enterprise Fund
DEAR SHAREHOLDER,
- --------------------------------------------------------------------------------
I'd like to welcome you to the premier issue of our newly redesigned
shareholder reports. As you can see, we've changed the format to allow easier
access to the information you need to monitor your investments. Some notable
additions are "at-a-glance" report highlights and charts that let you quickly
assess how your Fund has performed. On the following pages, your portfolio team
discuss their current investment thinking, your Fund's strategies, and
performance. Before these commentaries, I'd like to share a few global
observations.
As we consider the world's financial markets over the past six months,
some global trends emerge. For example, inflation has hit its lowest level in
three decades worldwide, which has helped spur many bullish financial markets.
The United States has been a beneficiary of this low-inflation environment, as
well as of a strong dollar, robust corporate earnings and a healthy economy.
However, many financial analysts are now concerned that the United States has
reached a point in the business cycle where earnings could decline because
companies are unable to further reduce costs.
On the other hand, a wave of corporate restructuring throughout Europe
has resulted in some exciting changes and opportunities. Because a similar
restructuring took place in the United States ten years ago, European companies
have been able to enjoy the benefit of hindsight by following our footsteps.
Latin America, too, has begun to shift its economies more toward the U.S.
capitalist model and has reported positive earnings growth along the way.
With major changes occurring in today's economies around the globe,
it's more important than ever to maintain a diversified portfolio across
different countries and market sectors. Now is the time to speak to your
financial adviser to ensure that your assets are allocated properly, so you
have the opportunity to benefit from investments in both domestic and
international funds. It's important to remember that investing abroad can
involve greater risk and expenses--including political and economic
uncertainties--and should be undertaken with a long-term approach in mind.
To keep in touch with our views on the markets, visit our website,
WWW.OPPENHEIMERFUNDS.COM, where you can access your account information and
fund performance data, 24 hours a day. The site also features prospectuses,
timely market updates and insightful commentaries. Our new shareholder reports
and presence on the Internet are just two examples of our commitment to keeping
you well informed.
Thank you for your confidence in OppenheimerFunds, The Right Way to
Invest. We look forward to helping you reach your investment goals in the
future.
Sincerely,
/s/ Bridget A. Macaskill
Bridget A. Macaskill September 22, 1997
3 Oppenheimer Enterprise Fund
<PAGE> 4
AVG ANNUAL TOTAL RETURNS
For the Period Ended 9/30/97(1)
<TABLE>
<S> <C>
CLASS A
1 year Since inception
16.21% 39.35%
CLASS B
1 year Since inception
17.34% 41.17%
CLASS C
1 year Since inception
21.35% 42.67%
</TABLE>
PERFORMANCE UPDATE
- --------------------------------------------------------------------------------
Oppenheimer Enterprise Fund's Class A shares produced a total rate of return,
before sales charges, of 17.88% for the fiscal year ended 8/31/97.2 This past
year was a difficult time for small-cap funds in general, primarily because
investors showed a preference for larger blue-chip companies during the first
eight of the 12 months. However, since late April, small-cap stocks have
experienced a significant rebound. We expect that over time, the stocks in this
Fund may produce superior growth.
<TABLE>
<CAPTION>
LARGEST INDUSTRIES(3)
.........................................................................
<S> <C> <C> <C>
Industrial Services 15.7% Leisure & Entertainment 5.4%
.........................................................................
Healthcare/Supplies & Services 15.2 Diversified Financial 5.3
.........................................................................
Computer Software 11.0 Retail-Specialty 5.3
.........................................................................
Oil-Integrated 7.1 Energy Services
& Producers 4.9
.........................................................................
Healthcare/Drugs 5.9 Electronics 4.3
.........................................................................
</TABLE>
1. Total returns include changes in share price and reinvestment of dividends
and capital gains distributions in a hypothetical investment for the periods
shown. Class A returns include the current maximum initial sales charge of
5.75%. Class A shares were first publicly offered on 11/7/95. Class B returns
include the applicable contingent deferred sales charge of 5% (1-year) and 4%
(since inception on 11/7/95). Class C returns for the 1-year period include the
contingent deferred sales charge of 1% and have been available since 11/7/95.
An explanation of the different performance calculations is in the Fund's
prospectus. Class B and C shares are subject to an annual 0.25% service fee and
0.75% asset-based sales charge, and Class A shares are subject to an annual
service fee not to exceed 0.25%.
4 Oppenheimer Enterprise Fund
<PAGE> 5
SECTOR WEIGHTINGS(3)
<TABLE>
<S> <C>
- - Technology 22.6%
- - Consumer
Non-Cyclical 21.8
- - Consumer Cyclical 17.8
- - Industrial 17.7
- - Energy 12.0
- - Financial 5.3
- - Basic Materials 2.8
</TABLE>
PORTFOLIO REVIEW
- --------------------------------------------------------------------------------
Oppenheimer Enterprise Fund is for investors aggressively seeking long-term
growth from high potential stocks.
WHAT WE LOOK FOR
- - MAXIMUM GROWTH POTENTIAL from small and micro-cap companies.
- - Current emphasis is on companies with MARKET CAPITALIZATION OF UP TO $200
MILLION.
- - Companies that are BETWEEN THEIR START-UP AND EMERGING GROWTH PHASES and
poised for rapid growth.
- - DIVERSIFICATION in a variety of companies and industries to help lower the
volatility of small and micro-cap investments.
<TABLE>
<CAPTION>
TOP 10 HOLDINGS
(Percentage of net assets)(3)
.........................................................................
<S> <C> <C> <C>
Cal Dive International 2.9% Brunswick Technologies 1.7%
.........................................................................
Patterson Energy, Inc. 2.3 AEHR Test Systems 1.6
.........................................................................
Investors Financial Services 2.3 New ERA of Networks, Inc. 1.6
.........................................................................
Schlotzky's, Inc. 2.2 National RV Holdings 1.5
.........................................................................
Sabratek Corp. 1.8 Benchmarq Microelectronics 1.5
.........................................................................
</TABLE>
2. Includes changes in net asset value per share without deducting any sales
charges. Such performance would have been lower if sales charges were taken
into account.
3. Portfolio is subject to change. Percentages are as of August 31, 1997 and
are based on total market value of investments.
5 Oppenheimer Enterprise Fund
<PAGE> 6
"SINCE LATE APRIL, SMALL-CAP STOCKS HAVE EXPERIENCED A SIGNIFICANT REBOUND."
AN INTERVIEW WITH YOUR FUND'S MANAGERS
- --------------------------------------------------------------------------------
HOW DID THE FUND PERFORM?
For the one-year period ended August 31, 1997, Oppenheimer Enterprise Fund's
Class A shares had a total rate of return, before sales charges, of 17.88%(1).
As you know, the Fund emphasizes investments in "micro-cap" companies, that is,
companies whose market capitalization is under $200 million. Market
capitalization equals a company's stock price multiplied by the number of
shares outstanding. We are trying to buy early-stage companies that represent
sizable growth opportunities.
WHAT FACTORS AFFECTED YOUR PERFORMANCE?
From August 1996 through April 1997, and to a lesser extent since then,
investors have shown a preference for larger, blue-chip multinational
corporations. If you analyzed companies in terms of size, the top tier
outperformed the second tier, which outperformed the third tier, and on down
the list. So, the Fund was adversely affected by its concentration in a sector
of the marketplace that was generally out of favor for the first eight of the
last 12 months. However, the downside pressure on small and micro-cap stocks
reached a climax in late April, and since then we've experienced a significant
rebound.
This past year was also characterized by another macro trend: the
market's preference for "value stocks" as opposed to "growth stocks."
Oppenheimer Enterprise Fund is a growth-oriented fund, which means we seek
companies for the portfolio that are achieving strong sales and earnings gains;
in contrast, value-oriented funds emphasize stocks considered by their managers
to be underpriced.
6 Oppenheimer Enterprise Fund
<PAGE> 7
[PHOTO]
PORTFOLIO MANAGEMENT
TEAM (L TO R)
Jay Tracey (Fund Manager)
Paul LaRocco
The market goes through cycles in which one style is favored over another. Over
the past 12 months, value stocks outperformed growth stocks, which hindered our
performance until recently. However, since May, growth stocks have shown
renewed vigor, which is an encouraging sign going forward.
WHAT STOCKS DID WELL DURING THE YEAR?
One of the strongest groups over the past 12 months has been energy. We owned
stock in Cal Dive International, an oil services company. Cal Dive is a
provider of subsea construction and completion services. One of the strongest
segments of the economy lately has been offshore drilling. A great deal of
money is being spent by major oil companies to explore and produce oil from
under water--whether it's the North Sea or the Gulf of Mexico. Typically, it
takes a while to identify prospects, perform seismic analysis and then drill.
Once drilling has taken place and oil and gas discovered, the wells need to be
"completed." That's when companies like Cal Dive provide their underwater
robots and other equipment needed to complete these wells, by tying them to
production lines so that oil can be distributed.
1. Includes changes in net asset value per share without deducting any sales
charges. Such performance would have been lower if sales charges were taken
into account.
7 Oppenheimer Enterprise Fund
<PAGE> 8
"ONE OF THE STRONGEST GROUPS OVER THE PAST 12 MONTHS HAS BEEN ENERGY..."
AN INTERVIEW WITH YOUR FUND'S MANAGERS
- --------------------------------------------------------------------------------
Another solid performer for the Fund was Patterson Energy, Inc. Patterson is a
drilling company, operating primarily in Texas and New Mexico, that provides
onshore contract drilling to oil and gas customers. Patterson owns 27 drilling
rigs and can drill to depths of 22,000 feet below the land surface. Drilling
activity has been strong lately and the supply of rigs has been constrained.
Beginning about two years ago, owners of everything from drill pipe to drilling
rigs to other oil service equipment have been able to charge much more for the
services they provide. In addition, energy demand has been expanding at home
and abroad due to strengthening economies in many parts of the world.
WHAT OTHER COMPANIES PERFORMED WELL FOR THE FUND?
Advanced Technology Materials has been a very good holding. This company serves
the semiconductor industry, producing "point of use" environmental equipment.
At various points along a semiconductor production line, equipment is needed
that will vent the toxic airborne material in an environmentally acceptable way
because the chemicals used in processing semiconductor chips are highly toxic.
Advanced Technology Materials' semiconductor industry customers are doing very
well, and, as a result, the suppliers to that customer base have experienced
the same dramatic growth in sales and earnings.
CAN YOU GIVE ME ANOTHER EXAMPLE OF A HOLDING THAT OUTPERFORMED?
Schlotzsky's, Inc. has also been a very positive holding. They're a franchiser
of quick-service restaurants, operating 445 franchise stores in 37 states. The
company, known for its high-quality bread, continues to surprise Wall Street
analysts with stronger-than-expected sales and earnings.
8 Oppenheimer Enterprise Fund
<PAGE> 9
"...PARTICULARLY EXPLORATION AND OFFSHORE DRILLING."
WHAT AREAS WERE DISAPPOINTING DURING THE YEAR?
Healthcare has been a difficult industry in the past year, primarily due to
concern over Medicare/Medicaid reimbursement. Those concerns are still with us
today. As the government searches for ways to cut expenditures, Medicare is
vulnerable, and this puts a cloud over all healthcare service providers.
Another area of disappointment was retailing, which suffered from lackluster
consumer spending for several months. Recently, however, the outlook for
retailers has improved with forecasts of a strong upcoming Christmas season.
WHAT IS YOUR OUTLOOK?
Oppenheimer Enterprise Fund's holdings reached a level of relative valuation
that is very attractive compared to the rest of the market. On the average, the
Fund's companies are currently selling at a price-to-earnings ratio only
modestly above that of the S&P 500 Index, but with earnings growth far above
that of the index. And, the earnings of the companies in our portfolio are
expected to grow at a much higher rate than the S&P 500. Over time, we believe
that the performance of the stocks in the Fund will reflect that superior
growth.
9 Oppenheimer Enterprise Fund
<PAGE> 10
STATEMENT OF INVESTMENTS August 31, 1997
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
===============================================================================================================
<S> <C> <C>
COMMON STOCKS--97.4%
- ---------------------------------------------------------------------------------------------------------------
BASIC MATERIALS--1.7%
- ---------------------------------------------------------------------------------------------------------------
Brunswick Technologies, Inc.(1) 80,000 $ 1,410,000
- ---------------------------------------------------------------------------------------------------------------
CONSUMER CYCLICALS--17.4%
- ---------------------------------------------------------------------------------------------------------------
AUTOS & HOUSING--3.6%
Keystone Automotive Industries, Inc.(1) 45,000 849,375
- ---------------------------------------------------------------------------------------------------------------
National R.V. Holdings, Inc.(1)(2) 70,000 1,246,875
- ---------------------------------------------------------------------------------------------------------------
Trendwest Resorts, Inc.(1) 50,000 912,500
-----------
3,008,750
- ---------------------------------------------------------------------------------------------------------------
LEISURE & ENTERTAINMENT--6.8%
Casa Ole Restaurants, Inc.(1) 76,500 683,719
- ---------------------------------------------------------------------------------------------------------------
Cinar Films, Inc., Cl. B(1) 30,000 952,500
- ---------------------------------------------------------------------------------------------------------------
DSI Toys, Inc.(1) 60,000 547,500
- ---------------------------------------------------------------------------------------------------------------
Equity Marketing, Inc.(1) 30,000 712,500
- ---------------------------------------------------------------------------------------------------------------
PJ America, Inc.(1) 40,000 640,000
- ---------------------------------------------------------------------------------------------------------------
Schlotzsky's, Inc.(1) 100,000 1,812,500
- ---------------------------------------------------------------------------------------------------------------
Silver Diner, Inc.(1) 80,000 210,000
- ---------------------------------------------------------------------------------------------------------------
Silver Diner, Inc.(1)(2) 50,000 124,687
-----------
5,683,406
- ---------------------------------------------------------------------------------------------------------------
RETAIL: GENERAL--1.8%
North Face, Inc. (The)(1) 24,000 532,500
- ---------------------------------------------------------------------------------------------------------------
Sport-Haley, Inc.(1) 60,000 960,000
-----------
1,492,500
- ---------------------------------------------------------------------------------------------------------------
RETAIL: SPECIALTY--5.2%
Coldwater Creek, Inc.(1) 35,000 822,500
- ---------------------------------------------------------------------------------------------------------------
Marks Bros. Jewelers, Inc.(1) 50,000 550,000
- ---------------------------------------------------------------------------------------------------------------
Mazel Stores, Inc.(1) 30,000 637,500
- ---------------------------------------------------------------------------------------------------------------
Party City Corp.(1) 50,000 1,200,000
- ---------------------------------------------------------------------------------------------------------------
RDO Equipment Co., Cl. A(1) 50,000 1,143,750
-----------
4,353,750
- ---------------------------------------------------------------------------------------------------------------
CONSUMER NON-CYCLICALS--20.8%
- ---------------------------------------------------------------------------------------------------------------
BEVERAGES--0.6%
Puro Water Group, Inc.(1) 110,000 550,000
</TABLE>
10 Oppenheimer Enterprise Fund
<PAGE> 11
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
HEALTHCARE/DRUGS--5.6%
ArQule, Inc.(1) 50,000 $ 912,500
- ---------------------------------------------------------------------------------------------------------------
Ascent Pediatrics, Inc.(1) 60,000 427,500
- ---------------------------------------------------------------------------------------------------------------
Global Pharmaceutical Corp.(1) 39,200 235,200
- ---------------------------------------------------------------------------------------------------------------
International Isotopes, Inc.(1) 100,000 943,750
- ---------------------------------------------------------------------------------------------------------------
Kos Pharmaceuticals, Inc.(1) 20,000 690,000
- ---------------------------------------------------------------------------------------------------------------
Onyx Pharmaceuticals, Inc.(1) 60,000 585,000
- ---------------------------------------------------------------------------------------------------------------
PMR Corp.(1) 40,000 935,000
-----------
4,728,950
- ---------------------------------------------------------------------------------------------------------------
HEALTHCARE/SUPPLIES & SERVICES--14.6%
Advance Paradigm, Inc.(1) 40,000 835,000
- ---------------------------------------------------------------------------------------------------------------
Autonomous Technologies Corp.(1)(2) 200,000 570,000
- ---------------------------------------------------------------------------------------------------------------
Calypte Biomedical Corp.(1) 80,000 440,000
- ---------------------------------------------------------------------------------------------------------------
Carriage Services, Inc.(1) 30,000 645,000
- ---------------------------------------------------------------------------------------------------------------
EP MedSystems, Inc.(1) 100,000 275,000
- ---------------------------------------------------------------------------------------------------------------
HumaScan, Inc.(1) 116,000 667,000
- ---------------------------------------------------------------------------------------------------------------
Intelligent Medical Imaging, Inc.(1) 140,000 831,250
- ---------------------------------------------------------------------------------------------------------------
Medical Manager Corp.(1) 60,000 1,050,000
- ---------------------------------------------------------------------------------------------------------------
Monarch Dental Corp.(1) 29,000 525,625
- ---------------------------------------------------------------------------------------------------------------
Nitinol Medical Technologies, Inc.(1) 61,000 777,750
- ---------------------------------------------------------------------------------------------------------------
Norland Medical Systems, Inc.(1) 40,000 450,000
- ---------------------------------------------------------------------------------------------------------------
Ortivus AB, A Shares(1) 13,700 558,402
- ---------------------------------------------------------------------------------------------------------------
Ortivus AB, B Shares(1) 7,000 294,231
- ---------------------------------------------------------------------------------------------------------------
Photoelectron Corp.(1) 70,000 446,250
- ---------------------------------------------------------------------------------------------------------------
Sabratek Corp.(1) 40,000 1,450,000
- ---------------------------------------------------------------------------------------------------------------
Somanetics Corp.(1) 60,000 187,500
- ---------------------------------------------------------------------------------------------------------------
Superior Consultant Holdings Corp.(1) 35,000 997,500
- ---------------------------------------------------------------------------------------------------------------
Ventana Medical Systems, Inc.(1) 50,000 806,250
- ---------------------------------------------------------------------------------------------------------------
Vision Twenty-One, Inc.(1) 40,000 460,000
-----------
12,266,758
- ---------------------------------------------------------------------------------------------------------------
ENERGY--11.7%
- ---------------------------------------------------------------------------------------------------------------
Basin Exploration, Inc.(1) 80,000 820,000
- ---------------------------------------------------------------------------------------------------------------
Cal Dive International, Inc.(1) 70,000 2,380,000
- ---------------------------------------------------------------------------------------------------------------
Carrizo Oil & Gas, Inc.(1) 75,000 834,375
- ---------------------------------------------------------------------------------------------------------------
Edge Petroleum Corp.(1) 40,000 640,000
- ---------------------------------------------------------------------------------------------------------------
FX Energy, Inc.(1) 100,000 912,500
- ---------------------------------------------------------------------------------------------------------------
Gulf Island Fabrication, Inc.(1) 30,000 1,215,000
- ---------------------------------------------------------------------------------------------------------------
Patterson Energy, Inc.(1) 50,000 1,912,500
- ---------------------------------------------------------------------------------------------------------------
Superior Energy Services, Inc.(1) 130,000 1,080,625
-----------
9,795,000
</TABLE>
11 Oppenheimer Enterprise Fund
<PAGE> 12
STATEMENT OF INVESTMENTS (Continued)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FINANCIAL--5.2%
- ---------------------------------------------------------------------------------------------------------------
American Capital Strategies Ltd.(1) 50,000 $ 981,250
- ---------------------------------------------------------------------------------------------------------------
Granite Financial, Inc.(1) 100,000 1,175,000
- ---------------------------------------------------------------------------------------------------------------
Investors Financial Services Corp. 42,200 1,872,625
- ---------------------------------------------------------------------------------------------------------------
Rockford Industries, Inc.(1) 38,400 326,400
-----------
4,355,275
- ---------------------------------------------------------------------------------------------------------------
INDUSTRIAL--18.6%
- ---------------------------------------------------------------------------------------------------------------
INDUSTRIAL SERVICES--16.6%
A Consulting Team, Inc.(1) 70,000 927,500
- ---------------------------------------------------------------------------------------------------------------
Coinstar, Inc.(1) 60,000 712,500
- ---------------------------------------------------------------------------------------------------------------
Cornell Corrections, Inc.(1) 80,000 1,170,000
- ---------------------------------------------------------------------------------------------------------------
Dynamex, Inc.(1) 5,000 34,375
- ---------------------------------------------------------------------------------------------------------------
Eagle Geophysical, Inc.(1) 40,000 820,000
- ---------------------------------------------------------------------------------------------------------------
Farr Co.(1) 60,000 967,500
- ---------------------------------------------------------------------------------------------------------------
Hub Group, Inc., Cl. A(1) 30,000 1,020,000
- ---------------------------------------------------------------------------------------------------------------
ICTS International NV(1) 60,000 577,500
- ---------------------------------------------------------------------------------------------------------------
Leap Group, Inc. (The)(1) 97,100 194,200
- ---------------------------------------------------------------------------------------------------------------
Mansur Industries, Inc.(1) 27,500 608,438
- ---------------------------------------------------------------------------------------------------------------
NCO Group, Inc.(1) 25,000 937,500
- ---------------------------------------------------------------------------------------------------------------
ONTRACK Data International, Inc.(1) 45,000 776,250
- ---------------------------------------------------------------------------------------------------------------
Rent-Way, Inc.(1) 50,000 906,250
- ---------------------------------------------------------------------------------------------------------------
RWD Technologies, Inc.(1) 40,000 770,000
- ---------------------------------------------------------------------------------------------------------------
Service Experts, Inc.(1) 15,000 387,188
- ---------------------------------------------------------------------------------------------------------------
Stericycle, Inc.(1) 100,000 1,000,000
- ---------------------------------------------------------------------------------------------------------------
U.S. Liquids, Inc.(1) 60,000 907,500
- ---------------------------------------------------------------------------------------------------------------
Unidigital, Inc.(1) 100,000 775,000
- ---------------------------------------------------------------------------------------------------------------
Waste Industries, Inc.(1) 25,000 456,250
-----------
13,947,951
- ---------------------------------------------------------------------------------------------------------------
MANUFACTURING--2.0%
Ballantyne of Omaha, Inc.(1) 50,000 975,000
- ---------------------------------------------------------------------------------------------------------------
ITEQ, Inc.(1) 60,000 742,500
-----------
1,717,500
- ---------------------------------------------------------------------------------------------------------------
TECHNOLOGY--22.0%
- ---------------------------------------------------------------------------------------------------------------
COMPUTER HARDWARE--3.4%
Aehr Test Systems(1) 75,000 1,312,500
- ---------------------------------------------------------------------------------------------------------------
MicroTouch Systems, Inc.(1) 30,000 945,000
- ---------------------------------------------------------------------------------------------------------------
Planar Systems, Inc.(1) 50,000 618,750
-----------
2,876,250
</TABLE>
12 Oppenheimer Enterprise Fund
<PAGE> 13
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMPUTER SOFTWARE--10.7%
Advent Software, Inc.(1) 30,000 $ 795,000
- ---------------------------------------------------------------------------------------------------------------
Aware, Inc.(1) 50,000 587,500
- ---------------------------------------------------------------------------------------------------------------
Engineering Animation, Inc.(1) 30,000 1,147,500
- ---------------------------------------------------------------------------------------------------------------
Genesys Telecomm Labs, Inc.(1) 25,000 700,000
- ---------------------------------------------------------------------------------------------------------------
H.T.E., Inc.(1) 60,000 930,000
- ---------------------------------------------------------------------------------------------------------------
Integrated Measurement Systems, Inc.(1) 30,000 465,000
- ---------------------------------------------------------------------------------------------------------------
Jetfax, Inc.(1) 100,000 987,500
- ---------------------------------------------------------------------------------------------------------------
New Era of Networks, Inc.(1) 95,000 1,306,250
- ---------------------------------------------------------------------------------------------------------------
QAD, Inc.(1) 50,000 1,093,750
- ---------------------------------------------------------------------------------------------------------------
Rogue Wave Software, Inc.(1) 30,000 438,750
- ---------------------------------------------------------------------------------------------------------------
SPSS, Inc.(1) 20,000 557,500
-----------
9,008,750
- ---------------------------------------------------------------------------------------------------------------
ELECTRONICS--4.2%
Advanced Technology Materials, Inc.(1) 40,000 1,180,000
- ---------------------------------------------------------------------------------------------------------------
BENCHMARQ Microelectronics, Inc.(1) 40,000 1,240,000
- ---------------------------------------------------------------------------------------------------------------
Galileo Technology Ltd.(1) 20,000 622,500
- ---------------------------------------------------------------------------------------------------------------
TelCom Semiconductor, Inc.(1) 30,000 478,125
-----------
3,520,625
- ---------------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS-TECHNOLOGY--3.7%
Innova Corp.(1) 20,000 440,000
- ---------------------------------------------------------------------------------------------------------------
Lightbridge, Inc.(1) 75,000 928,125
- ---------------------------------------------------------------------------------------------------------------
Microwave Power Devices, Inc.(1) 70,000 682,500
- ---------------------------------------------------------------------------------------------------------------
PhoneTel Technologies, Inc.(1) 350,000 1,028,125
-----------
3,078,750
-----------
Total Common Stocks (Cost $63,276,663) 81,794,215
<CAPTION>
FACE
AMOUNT
===============================================================================================================
<S> <C> <C>
REPURCHASE AGREEMENTS--4.9%
- ---------------------------------------------------------------------------------------------------------------
Repurchase agreement with J.P. Morgan Securities, Inc., 5.55%,
dated 8/29/97, to be repurchased at $4,102,528 on 9/2/97,
collateralized by U.S. Treasury Bonds, 7.25%-11.25%,
2/15/03-8/15/19, with a value of $3,911,886 and U.S. Treasury
Nts., 5.875%, 10/31/98, with a value of $274,110 (Cost $4,100,000) $4,100,000 4,100,000
- ---------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $67,376,663) 102.3% 85,894,215
- ---------------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (2.3) (1,930,031)
---------- -----------
NET ASSETS 100.0% $83,964,184
========== ===========
</TABLE>
1. Non-income producing security.
2. Identifies issues considered to be illiquid or restricted--See Note 5 of
Notes to Financial Statements.
See accompanying Notes to Financial Statements.
13 Oppenheimer Enterprise Fund
<PAGE> 14
STATEMENT OF ASSETS AND LIABILITIES August 31, 1997
<TABLE>
===============================================================================================================
<S> <C>
ASSETS
Investments, at value (cost $67,376,663)--see accompanying statement $85,894,215
- ---------------------------------------------------------------------------------------------------------------
Cash 41,407
- ---------------------------------------------------------------------------------------------------------------
Receivables:
Investments sold 433,367
Shares of beneficial interest sold 407,879
Interest and dividends 2,103
- ---------------------------------------------------------------------------------------------------------------
Other 11,193
-----------
Total assets 86,790,164
===============================================================================================================
LIABILITIES
Payables and other liabilities:
Investments purchased 2,572,500
Shares of beneficial interest redeemed 101,380
Trustees' fees--Note 1 69,702
Distribution and service plan fees 29,684
Transfer and shareholder servicing agent fees 9,452
Other 43,262
-----------
Total liabilities 2,825,980
===============================================================================================================
NET ASSETS $83,964,184
===========
===============================================================================================================
COMPOSITION OF NET ASSETS
Paid-in capital $63,696,902
- ---------------------------------------------------------------------------------------------------------------
Accumulated net investment loss (32,928)
- ---------------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and
foreign currency transactions 1,782,658
- ---------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of
assets and liabilities denominated in foreign currencies 18,517,552
-----------
Net assets $83,964,184
===========
</TABLE>
14 Oppenheimer Enterprise Fund
<PAGE> 15
<TABLE>
==================================================================================================================
<S> <C>
NET ASSET VALUE PER SHARE
Class A Shares:
Net asset value and redemption price per share (based on
net assets of $52,454,822 and 3,089,162 shares of beneficial interest outstanding) $16.98
Maximum offering price per share (net asset value plus sales charge
of 5.75% of offering price) $18.02
- ------------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $25,856,429 and
1,544,041 shares of beneficial interest outstanding) $16.75
- ------------------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $5,652,933 and
337,716 shares of beneficial interest outstanding) $16.74
</TABLE>
See accompanying Notes to Financial Statements.
15 Oppenheimer Enterprise Fund
<PAGE> 16
STATEMENT OF OPERATIONS For the Year Ended August 31, 1997
<TABLE>
===============================================================================================================
<S> <C>
INVESTMENT INCOME
Interest $ 195,334
- ---------------------------------------------------------------------------------------------------------------
Dividends 20,044
-----------
Total income 215,378
===============================================================================================================
EXPENSES
Management fees--Note 4 508,062
- ---------------------------------------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A 91,498
Class B 203,769
Class C 45,325
- ---------------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 160,009
- ---------------------------------------------------------------------------------------------------------------
Shareholder reports 114,845
- ---------------------------------------------------------------------------------------------------------------
Trustees' fees and expenses--Note 1 41,539
- ---------------------------------------------------------------------------------------------------------------
Legal and auditing fees 15,184
- ---------------------------------------------------------------------------------------------------------------
Custodian fees and expenses 10,497
- ---------------------------------------------------------------------------------------------------------------
Deferred organization expenses 5,867
- ---------------------------------------------------------------------------------------------------------------
Insurance expenses 2,857
- ---------------------------------------------------------------------------------------------------------------
Registration and filing fees:
Class A 1,050
Class B 959
Class C 111
- ---------------------------------------------------------------------------------------------------------------
Other 6,771
-----------
Total expenses 1,208,343
===============================================================================================================
NET INVESTMENT LOSS (992,965)
===============================================================================================================
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investments 5,157,150
Foreign currency transactions (4,077)
-----------
Net realized gain 5,153,073
- ---------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments 7,630,383
Translation of assets and liabilities denominated in foreign currencies (24,763)
-----------
Net change 7,605,620
-----------
Net realized and unrealized gain 12,758,693
===============================================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $11,765,728
===========
</TABLE>
See accompanying Notes to Financial Statements.
16 Oppenheimer Enterprise Fund
<PAGE> 17
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
PERIOD ENDED
YEAR ENDED AUGUST 31,
AUGUST 31, 1997 1996(1)
===============================================================================================================
<S> <C> <C>
OPERATIONS
Net investment loss $ (992,965) $ (343,149)
- ---------------------------------------------------------------------------------------------------------------
Net realized gain 5,153,073 2,595,623
- ---------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 7,605,620 10,911,932
----------- -----------
Net increase in net assets resulting from operations 11,765,728 13,164,406
===============================================================================================================
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Distributions from net realized gain:
Class A (2,947,210) --
Class B (1,406,497) --
Class C (317,008) --
===============================================================================================================
BENEFICIAL INTEREST TRANSACTIONS
Net increase in net assets resulting from beneficial interest
transactions--Note 2:
Class A 3,467,955 35,949,485
Class B 3,163,980 16,853,753
Class C 364,697 3,904,895
===============================================================================================================
NET ASSETS
Total increase 14,091,645 69,872,539
- ---------------------------------------------------------------------------------------------------------------
Beginning of period 69,872,539 --
----------- -----------
End of period (including accumulated net investment
loss of $32,928 and $2,168, respectively) $83,964,184 $69,872,539
=========== ===========
</TABLE>
1. For the period from November 7, 1995 (commencement of operations) to August
31, 1996.
See accompanying Notes to Financial Statements.
17 Oppenheimer Enterprise Fund
<PAGE> 18
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A
----------------------------------
YEAR ENDED AUGUST 31,
1997 1996(1)
========================================================================================
<S> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $15.48 $10.00
- ----------------------------------------------------------------------------------------
Income from investment operations:
Net investment loss (.09) (.05)
Net realized and unrealized gain 2.66 5.53
------- -------
Total income from investment operations 2.57 5.48
- ----------------------------------------------------------------------------------------
Distributions from net realized gain (1.07) --
------- -------
Total dividends and distributions to shareholders (1.07) --
- ----------------------------------------------------------------------------------------
Net asset value, end of period $16.98 $15.48
======= =======
========================================================================================
TOTAL RETURN, AT NET ASSET VALUE(2) 17.88% 54.80%
========================================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $52,455 $44,421
- ----------------------------------------------------------------------------------------
Average net assets (in thousands) $42,895 $30,655
- ----------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment loss (1.18)% (0.59)%(3)
Expenses 1.50% 1.66%(3)
- ----------------------------------------------------------------------------------------
Portfolio turnover rate(4) 142.4% 155.6%
Average brokerage commission rate(5) $0.0642 $0.0579
</TABLE>
1. For the period from November 7, 1995 (commencement of operations) to August
31, 1996.
2. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period (or commencement of operations), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
3. Annualized.
18 Oppenheimer Enterprise Fund
<PAGE> 19
<TABLE>
<CAPTION>
CLASS B CLASS C
- ----------------------------------- -------------------------------
YEAR ENDED AUGUST 31, YEAR ENDED AUGUST 31,
1997 1996(1) 1997 1996(1)
==========================================================================
<C> <C> <C> <C>
$15.39 $10.00 $15.39 $10.00
- --------------------------------------------------------------------------
(.18) (.14) (.18) (.14)
2.61 5.53 2.60 5.53
------- ------- ------- -------
2.43 5.39 2.42 5.39
- --------------------------------------------------------------------------
(1.07) -- (1.07) --
------- ------- ------- -------
(1.07) -- (1.07) --
- --------------------------------------------------------------------------
$16.75 $15.39 $16.74 $15.39
======= ======= ======= =======
==========================================================================
17.03% 53.90% 16.97% 53.90%
==========================================================================
$25,856 $20,606 $5,653 $4,846
- --------------------------------------------------------------------------
$20,410 $14,123 $4,539 $3,472
- --------------------------------------------------------------------------
(1.96)% (1.37)%(3) (1.96)% (1.35)%(3)
2.27% 2.44%(3) 2.27% 2.43%(3)
- --------------------------------------------------------------------------
142.4% 155.6% 142.4% 155.6%
$0.0642 $0.0579 $0.0642 $0.0579
</TABLE>
4. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at the
time of acquisition of one year or less are excluded from the calculation.
Purchases and sales of investment securities (excluding short-term securities)
for the period ended August 31, 1997 were $93,709,660 and $92,116,340,
respectively.
5. Total brokerage commissions paid on applicable purchases and sales of
portfolio securities for the period, divided by the total number of related
shares purchased and sold. Generally, non-U.S. commissions are lower than U.S.
commissions when expressed as cents per share but higher when expressed as a
percentage of transactions because of the lower per-share prices of many
non-U.S. securities.
See accompanying Notes to Financial Statements.
19 Oppenheimer Enterprise Fund
<PAGE> 20
NOTES TO FINANCIAL STATEMENTS
================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Enterprise Fund (the Fund) is registered under the Investment
Company Act of 1940, as amended, as a diversified, open-end management
investment company. The Fund's investment objective is to seek capital
appreciation, primarily through investment in equity securities. The Fund's
investment adviser is OppenheimerFunds, Inc. (the Manager). The Fund offers
Class A, Class B and Class C shares. Class B and Class C shares may be subject
to a contingent deferred sales charge. All three classes of shares have
identical rights to earnings, assets and voting privileges, except that each
class has its own distribution and/or service plan, expenses directly
attributable to that class and exclusive voting rights with respect to matters
affecting that class. Class B shares will automatically convert to Class A
shares six years after the date of purchase. The following is a summary of
significant accounting policies consistently followed by the Fund.
- --------------------------------------------------------------------------------
INVESTMENT VALUATION. Portfolio securities are valued at the close of the New
York Stock Exchange on each trading day. Listed and unlisted securities for
which such information is regularly reported are valued at the last sale price
of the day or, in the absence of sales, at values based on the closing bid or
the last sale price on the prior trading day. Long-term and short-term
"non-money market" debt securities are valued by a portfolio pricing service
approved by the Board of Trustees. Such securities which cannot be valued by an
approved portfolio pricing service are valued using dealer-supplied valuations
provided the Manager is satisfied that the firm rendering the quotes is
reliable and that the quotes reflect current market value, or are valued under
consistently applied procedures established by the Board of Trustees to
determine fair value in good faith. Short-term "money market type" debt
securities having a remaining maturity of 60 days or less are valued at cost
(or last determined market value) adjusted for amortization to maturity of any
premium or discount.
- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The accounting records of the Fund are maintained
in U.S. dollars. Prices of securities denominated in foreign currencies are
translated into U.S. dollars at the closing rates of exchange. Amounts related
to the purchase and sale of foreign securities and investment income are
translated at the rates of exchange prevailing on the respective dates of such
transactions.
The effect of changes in foreign currency exchange rates on
investments is separately identified from the fluctuations arising from changes
in market values of securities held and reported with all other foreign
currency gains and losses in the Fund's Statement of Operations.
20 Oppenheimer Enterprise Fund
<PAGE> 21
================================================================================
REPURCHASE AGREEMENTS. The Fund requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is
required to be at least 102% of the resale price at the time of purchase. If
the seller of the agreement defaults and the value of the collateral declines,
or if the seller enters an insolvency proceeding, realization of the value of
the collateral by the Fund may be delayed or limited.
- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, AND GAINS AND LOSSES. Income, expenses (other
than those attributable to a specific class) and gains and losses are allocated
daily to each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income or excise tax provision is required.
- --------------------------------------------------------------------------------
TRUSTEES' FEES AND EXPENSES. The Fund has adopted a nonfunded retirement plan
for the Fund's independent trustees. Benefits are based on years of service and
fees paid to each trustee during the years of service. During the year ended
August 31, 1997, a provision of $32,270 was made for the Fund's projected
benefit obligations and payments of $1,509 were made to retired trustees,
resulting in an accumulated liability of $32,929, at August 31, 1997.
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders are
recorded on the ex-dividend date.
- --------------------------------------------------------------------------------
ORGANIZATION COSTS. The Manager advanced $13,000 for organization and start-up
costs of the Fund. Such expenses are being amortized over a five-year period
from the date operations commenced. In the event that all or part of the
Manager's initial investment in shares of the Fund is withdrawn during the
amortization period, the redemption proceeds will be reduced to reimburse the
Fund for any unamortized expenses, in the same ratio as the number of shares
redeemed bears to the number of initial shares outstanding at the time of such
redemption.
21 Oppenheimer Enterprise Fund
<PAGE> 22
NOTES TO FINANCIAL STATEMENTS (Continued)
================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax
purposes primarily because of the recognition of certain foreign currency gains
(losses) as ordinary income (loss) for tax purposes. The character of the
distributions made during the year from net investment income or net realized
gains may differ from its ultimate characterization for federal income tax
purposes. Also, due to timing of dividend distributions, the fiscal year in
which amounts are distributed may differ from the fiscal year in which the
income or realized gain was recorded by the Fund.
During the period ended August 31, 1997, the Fund adjusted the
classification of distributions to shareholders to reflect the differences
between financial statement amounts and distributions determined in accordance
with income tax regulations. Accordingly, during the period ended August 31,
1997, amounts have been reclassified to reflect a decrease in accumulated net
investment loss of $962,205. Accumulated net realized gain on investments was
decreased by the same amount.
- --------------------------------------------------------------------------------
OTHER. Investment transactions are accounted for on the date the investments
are purchased or sold (trade date) and dividend income is recorded on the
ex-dividend date. Discount on securities purchased is amortized over the life
of the respective securities, in accordance with federal income tax
requirements. Realized gains and losses on investments and options written and
unrealized appreciation and depreciation are determined on an identified cost
basis, which is the same basis used for federal income tax purposes.
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 income and expenses during the reporting
period. Actual results could differ from those estimates.
22 Oppenheimer Enterprise Fund
<PAGE> 23
================================================================================
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of no par value shares of
beneficial interest of each class. Transactions in shares of beneficial
interest were as follows:
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31, 1997 PERIOD ENDED AUGUST 31, 1996(1)
--------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 852,726 $ 12,879,046 3,497,248 $45,306,140
Dividends and
distributions reinvested 193,503 2,765,162 -- --
Redeemed (827,440) (12,176,253) (626,875) (9,356,655)
-------- ------------ --------- -----------
Net increase 218,789 $ 3,467,955 2,870,373 $35,949,485
======== ============ ========= ===========
- -------------------------------------------------------------------------------------------------------------------------
Class B:
Sold 388,682 $ 5,860,950 1,532,771 $19,742,737
Dividends and
distributions reinvested 93,212 1,320,815 -- --
Redeemed (276,877) (4,017,785) (193,747) (2,888,984)
-------- ------------ --------- -----------
Net increase 205,017 $ 3,163,980 1,339,024 $16,853,753
======== ============ ========= ===========
- -------------------------------------------------------------------------------------------------------------------------
Class C:
Sold 93,376 $ 1,411,388 395,954 $ 5,114,214
Dividends and
distributions reinvested 20,665 292,614 -- --
Redeemed (91,264) (1,339,305) (81,015) (1,209,319)
-------- ------------ --------- -----------
Net increase 22,777 $ 364,697 314,939 $ 3,904,895
======== ============ ========= ===========
</TABLE>
1. For the period from November 7, 1995 (commencement of operations) to August
31, 1996.
23 Oppenheimer Enterprise Fund
<PAGE> 24
NOTES TO FINANCIAL STATEMENTS (Continued)
================================================================================
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
At August 31, 1997, net unrealized appreciation on investments of $18,517,552
was composed of gross appreciation of $21,866,150, and gross depreciation of
$3,348,598.
================================================================================
4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund which provides for an annual fee of 0.75% of
the first $200 million of average annual net assets, 0.72% of the next $200
million, 0.69% of the next $200 million, 0.66% of the next $200 million, and
0.60% of average annual net assets in excess of $800 million.
For the year ended August 31, 1997, commissions (sales charges
paid by investors) on sales of Class A shares totaled $160,348, of which
$39,980 was retained by OppenheimerFunds Distributor, Inc. (OFDI), a subsidiary
of the Manager, as general distributor, and by an affiliated broker/dealer.
Sales charges advanced to broker/dealers by OFDI on sales of the Fund's Class B
and Class C shares totaled $164,270 and $9,473, respectively, of which $9,198
was paid to an affiliated broker/dealer for Class B. During the year ended
August 31, 1997, OFDI received contingent deferred sales charges of $52,498 and
$3,292, respectively, upon redemption of Class B and Class C shares as
reimbursement for sales commissions advanced by OFDI at the time of sale of
such shares.
OppenheimerFunds Services (OFS), a division of the Manager, is
the transfer and shareholder servicing agent for the Fund and for other
registered investment companies. OFS's total costs of providing such services
are allocated ratably to these companies.
24 Oppenheimer Enterprise Fund
<PAGE> 25
================================================================================
The Fund has adopted a Service Plan for Class A shares to reimburse OFDI for a
portion of its costs incurred in connection with the personal service and
maintenance of shareholder accounts that hold Class A shares. Reimbursement is
made quarterly at an annual rate that may not exceed 0.25% of the average
annual net assets of Class A shares of the Fund. OFDI uses the service fee to
reimburse brokers, dealers, banks and other financial institutions quarterly
for providing personal service and maintenance of accounts of their customers
that hold Class A shares. During the year ended August 31, 1997, OFDI paid
$2,345 to an affiliated broker/dealer as reimbursement for Class A personal
service and maintenance expenses.
The Fund has adopted Distribution and Service Plans for Class B
and Class C shares to compensate OFDI for its services and costs in
distributing Class B and Class C shares and servicing accounts. Under the
Plans, the Fund pays OFDI an annual asset-based sales charge of 0.75% per year
on Class B shares and Class C shares, as compensation for sales commissions
paid from its own resources at the time of sale and associated financing costs.
OFDI also receives a service fee of 0.25% per year as compensation for costs
incurred in connection with the personal service and maintenance of accounts
that hold shares of the Fund, including amounts paid to brokers, dealers, banks
and other financial institutions. Both fees are computed on the average annual
net assets of Class B and Class C shares, determined as of the close of each
regular business day. During the year ended August 31, 1997, OFDI retained
$174,549 and $23,136, respectively, as compensation for Class B and Class C
sales commissions and service fee advances, as well as financing costs. If
either Plan is terminated by the Fund, the Board of Trustees may allow the Fund
to continue payments of the asset-based sales charge to OFDI for distributing
shares before the Plan was terminated. At August 31, 1997, OFDI had incurred
unreimbursed expenses of $544,471 for Class B and $44,775 for Class C.
25 Oppenheimer Enterprise Fund
<PAGE> 26
NOTES TO FINANCIAL STATEMENTS (Continued)
================================================================================
5. ILLIQUID AND RESTRICTED SECURITIES
At August 31, 1997, investments in securities included issues that are illiquid
or restricted. Restricted securities are often purchased in private placement
transactions, are not registered under the Securities Act of 1933, may have
contractual restrictions on resale, and are valued under methods approved by
the Board of Trustees as reflecting fair value. A security may be considered
illiquid if it lacks a readily-available market or if its valuation has not
changed for a certain period of time. The Fund intends to invest no more than
10% of its net assets (determined at the time of purchase and reviewed
periodically) in illiquid or restricted securities. Certain restricted
securities, eligible for resale to qualified institutional investors, are not
subject to that limit. The aggregate value of illiquid or restricted securities
subject to this limitation at August 31, 1997 was $1,941,562, which represents
2.31% of the Fund's net assets. Information concerning restricted securities is
as follows:
<TABLE>
<CAPTION>
VALUATION
PER UNIT AS OF
SECURITY ACQUISITION DATE COST PER UNIT AUGUST 31, 1997
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Autonomous Technologies Corp. 6/12/97 $ 3.00 $ 2.85
- -------------------------------------------------------------------------------------------------------------------------
National R.V. Holdings, Inc. 11/26/96 13.25 17.81
- -------------------------------------------------------------------------------------------------------------------------
Silver Diner, Inc. 7/10/96 5.50 2.49
</TABLE>
26 Oppenheimer Enterprise Fund
<PAGE> 27
INDEPENDENT AUDITORS' REPORT
================================================================================
The Board of Trustees and Shareholders of
Oppenheimer Enterprise Fund:
We have audited the accompanying statements of investments and assets and
liabilities of Oppenheimer Enterprise Fund as of August 31, 1997, and the
related statement of operations for the year then ended, the statements of
changes in net assets for the year then ended and the period ended August 31,
1996, and the financial highlights for the year ended August 31, 1997 and the
period from November 7, 1995 (commencement of operations) to August 31, 1996.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of August 31, 1997 by correspondence with the custodian and brokers;
and where confirmations were not received from brokers, we performed other
auditing procedures. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Oppenheimer Enterprise Fund as of August 31, 1997, the results of
its operations for the year then ended, the changes in its net assets for the
year ended August 31, 1997 and the period ended August 31, 1996, and the
financial highlights for the year ended August 31, 1997 and the period from
November 7, 1995 (commencement of operations) to August 31, 1996, in conformity
with generally accepted accounting principles.
KPMG PEAT MARWICK LLP
Denver, Colorado
September 22, 1997
27 Oppenheimer Enterprise Fund
<PAGE> 28
FEDERAL INCOME TAX INFORMATION (Unaudited)
================================================================================
In early 1998 shareholders will receive information regarding all dividends and
distributions paid to them by the Fund during calendar year 1997. Regulations
of the U.S. Treasury Department require the Fund to report this information to
the Internal Revenue Service.
Dividends paid by the Fund during the year ended August 31, 1997
which are not designated as capital gain distributions should be multiplied by
4.72% to arrive at the net amount eligible for the corporate dividend-received
deduction.
The foregoing information is presented to assist shareholders in
reporting distributions received from the Fund to the Internal Revenue Service.
Because of the complexity of the federal regulations which may affect your
individual tax return and the many variations in state and local tax
regulations, we recommend that you consult your tax adviser for specific
guidance.
28 Oppenheimer Enterprise Fund
<PAGE> 29
OPPENHEIMER ENTERPRISE FUND
================================================================================
OFFICERS AND TRUSTEES Leon Levy, Chairman of the Board of Trustees
Donald W. Spiro, Vice Chairman of the Board of
Trustees
Bridget A. Macaskill, Trustee and President
Robert G. Galli, Trustee
Benjamin Lipstein, Trustee
Elizabeth B. Moynihan, Trustee
Kenneth A. Randall, Trustee
Edward V. Regan, Trustee
Russell S. Reynolds, Jr., Trustee
Pauline Trigere, Trustee
Clayton K. Yeutter, Trustee
Jay W. Tracey, Vice President
George C. Bowen, Treasurer
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Andrew J. Donohue, Secretary
Robert G. Zack, Assistant Secretary
================================================================================
INVESTMENT ADVISER OppenheimerFunds, Inc.
================================================================================
DISTRIBUTOR OppenheimerFunds Distributor, Inc.
================================================================================
TRANSFER AND SHAREHOLDER OppenheimerFunds Services
SERVICING AGENT
================================================================================
CUSTODIAN OF The Bank of New York
PORTFOLIO SECURITIES
================================================================================
INDEPENDENT AUDITORS KPMG Peat Marwick LLP
================================================================================
LEGAL COUNSEL Gordon Altman Butowsky Weitzen Shalov & Wein
This is a copy of a report to shareholders of
Oppenheimer Enterprise Fund. This report must be
preceded or accompanied by a Prospectus of
Oppenheimer Enterprise Fund. For material
information concerning the Fund, see the
Prospectus.
Shares of Oppenheimer funds are not deposits or
obligations of any bank, are not guaranteed by any
bank, and are not insured by the FDIC or any other
agency, and involve investment risks, including
possible loss of the principal amount invested.
29 Oppenheimer Enterprise Fund
<PAGE> 30
OPPENHEIMERFUNDS FAMILY
<TABLE>
<S> <C> <C>
=======================================================================================================================
REAL ASSET FUNDS
- -----------------------------------------------------------------------------------------------------------------------
Real Asset Fund Gold & Special Minerals Fund
=======================================================================================================================
STOCK FUNDS
- -----------------------------------------------------------------------------------------------------------------------
Developing Markets Fund Quest Small Cap Value Fund Global Fund
Enterprise Fund Capital Appreciation Fund(1) Quest Global Value Fund
International Growth Fund Quest Capital Value Fund Disciplined Value Fund
Discovery Fund Growth Fund Quest Value Fund
=======================================================================================================================
STOCK & BOND FUNDS
- -----------------------------------------------------------------------------------------------------------------------
Main Street Income & Quest Growth &Income Disciplined Allocation Fund
Growth Fund Value Fund Multiple Strategies Fund(2)
Quest Opportunity Value Fund Global Growth &Income Fund Bond Fund for Growth
Total Return Fund Equity Income Fund
=======================================================================================================================
BOND FUNDS
- -----------------------------------------------------------------------------------------------------------------------
International Bond Fund Champion Income Fund U.S. Government Trust
High Yield Fund Strategic Income Fund Limited-Term Government Fund
Bond Fund
=======================================================================================================================
MUNICIPAL FUNDS
- -----------------------------------------------------------------------------------------------------------------------
California Municipal Fund(3) Pennsylvania Municipal Fund(3) Rochester Division:
Florida Municipal Fund(3) Municipal Bond Fund Rochester Fund Municipals
New Jersey Municipal Fund(3) Insured Municipal Fund Limited Term New York
New York Municipal Fund(3) Intermediate Municipal Fund Municipal Fund
=======================================================================================================================
MONEY MARKET FUNDS(4)
- -----------------------------------------------------------------------------------------------------------------------
Money Market Fund Cash Reserves
=======================================================================================================================
LIFESPAN
- -----------------------------------------------------------------------------------------------------------------------
Growth Fund Balanced Fund Income Fund
</TABLE>
1. On 12/18/96, the Fund's name was changed from "Target Fund."
2. On 3/16/97, the Fund's name was changed from "Asset Allocation Fund."
3. Available only to investors in certain states.
4. An investment in money market funds is neither insured nor guaranteed by the
U.S. government and there can be no assurance that a money market fund will be
able to maintain a stable net asset value of $1.00 per share. Oppenheimer funds
are distributed by OppenheimerFunds Distributor, Inc., Two World Trade Center,
New York, NY 10048-0203.
(C) Copyright 1997 OppenheimerFunds, Inc. All rights reserved.
30 Oppenheimer Enterprise Fund
<PAGE> 31
INTERNET
24-hr access to account
information
WWW.OPPENHEIMERFUNDS.COM
GENERAL INFORMATION
Mon-Fri 8:30am-9pm ET
Sat 10am-4pm ET
1-800-525-7048
ACCOUNT TRANSACTIONS
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Sat 10am-4pm ET
1-800-852-8457
PHONELINK
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insightful messages on the
economy and issues that
affect your investments
1-800-835-3104
INFORMATION AND SERVICES
- --------------------------------------------------------------------------------
As an Oppenheimer fund shareholder, you have some special privileges. Whether
it's automatic investment plans, informative newsletters and hotlines, or ready
account access, you can benefit from services designed to make investing
simple.
And when you need help, our Customer Service Representatives are only
a toll-free phone call away. They can provide information about your account
and handle administrative requests. You can reach them at our General
Information number.
When you want to make a transaction, you can do it easily by calling
our toll-free Telephone Transactions number. And, by enrolling in AccountLink,
a convenient service that "links" your Oppenheimer funds accounts and your bank
checking or savings account, you can use the Telephone Transactions number to
make investments.
For added convenience, you can get automated information with
OppenheimerFunds PhoneLink service, available 24 hours a day, 7 days a week.
PhoneLink gives you access to a variety of fund, account, and market
information. Of course, you can always speak with a Customer Service
Representative during the General Information hours shown at the left.
You can count on us whenever you need assistance. That's why the
International Customer Service Association, an independent, nonprofit
organization made up of over 3,200 customer service management professionals
from around the country, honored the Oppenheimer funds' transfer agent,
OppenheimerFunds Services, with their Award of Excellence in 1993.
So call us today, or visit us at our website at
www.oppenheimerfunds.com--we're here to help.
[OPPENHEIMERFUNDS LOGO]
RA0885.001.0897 October 30, 1997
