-----------------------------
Annual Report August 31, 1998
-----------------------------
OPPENHEIMER
Enterprise
Fund
[GRAPHIC OMITTED]
[LOGO]
OppenheimerFunds(R)
THE RIGHT WAY TO INVEST
<PAGE>
Contents
3 President's Letter
4 An Interview
with Your Fund's Manager
8 Fund Performance
13 Financial
Statements
30 Independent
Auditors' Report
31 Federal
Income Tax
Information
32 Officers and
Trustees
36 Information and Services
Report highlights
- --------------------------------------------------------------------------------
o Top-quartile Performance: The Fund's Class A shares were ranked 1 out of 44
micro-cap funds as measured by Lipper Analytical Services, Inc. for the period
ended September 30, 1998.(1) In addition, the Fund outperformed its benchmark,
the Russell 2000 Index, which suffered a (19.4)% decline over the one-year
period that ended August 31, 1998.(2)
o Stock selection was the key ingredient to the Fund's success. Rather than
emphasizing entire industries, we were able to pick winning stocks across a wide
variety of market sectors.
- ------------------------------
Avg Annual Total Returns
- ------------------------------
For the 1-Year Period
Ended 8/31/98
Class A
Without With
Sales Chg.(3) Sales Chg.(4)
- ------------------------------
(5.65)% (11.08)%
- ------------------------------
Class B
Without With
Sales Chg.(3) Sales Chg.(4)
- ------------------------------
(6.43)% (10.72)%
- ------------------------------
Class C
Without With
Sales Chg.(3) Sales Chg.(4)
- ------------------------------
(6.38)% (7.24)%
- ------------------------------
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. Because of ongoing
market volatility, the Fund's performance may be subject to substantial
short-term changes. For updates on the Fund's performance, please contact your
financial advisor, call us at 1-800-525-7048 or visit our website,
www.oppenheimerfunds.com.
1. Source: Lipper Analytical Services, Inc., 9/30/98. Based on the comparisons
between changes in net asset value without considering sales charges, with
dividends and capital gains distributions of the Fund's Class A shares
reinvested. The Fund's Class A shares were ranked 1 out of 44 micro-cap funds
for the one-year period ended 9/30/98.
2. The Russell 2000 Index is a capitalization-weighted index of 2,000 U.S.
issuers with market values ranging from $25 million to $1 billion, and cannot be
purchased by investors.
3. 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.
4. Class A return includes the current maximum initial sales charge of 5.75%.
Class B return includes the applicable contingent deferred sales charge of 5%.
Class C return includes the contingent deferred sales charge of 1%. An
explanation of the different performance calculations is in the Fund's
prospectus. Class B and C shares are subject to a 0.75% asset-based sales
charge.
2 Oppenheimer Enterprise Fund
<PAGE>
[PHOTO]
Bridget A. Macaskill
President
Oppenheimer
Enterprise Fund
Dear shareholder,
- --------------------------------------------------------------------------------
The performance of the financial markets over the past several months could be
viewed as "A Tale of Two Markets." Until mid-July, the excitement surrounding
the stock market's continued ascent to new record highs overshadowed the
favorable economic environment that existed for bonds: low inflation and
declining interest rates. However, since that time, stocks have declined sharply
amid heightened volatility. Yet, the bond market remains poised to benefit from
the same positive economic conditions that existed earlier in the year.
Why have stocks faltered lately? The financial crises in Asia and Russia
have negatively affected the earnings of some large U.S. corporations and have
contributed to a slow-down in U.S. economic growth. Although slower economic
growth has been negative for stocks, it should not adversely impact bonds.
That's because slower economic growth generally means fewer inflationary
pressures and less likelihood that interest rates will rise.
What should you do during this period of relative uncertainty? If you have
well-defined long-term financial goals and an investment strategy designed to
achieve them, we encourage you to stay the course. However, if you feel your
financial plan is out-of-date or incomplete, now is the time to make
improvements. The best way to cope with short-term volatility is to adhere to a
long-term plan that contains proven strategies, such as diversification among
various financial markets, geographic regions, investment styles and individual
securities. A long-term plan will give you the focus and perspective you need to
put short-term volatility in its proper context.
As longstanding advocates of financial planning, we have been encouraged
by our shareholders' rational responses to the latest market events. Many of you
tell us that you have a long-term strategy in place, which includes diversifying
your investment portfolio among a number of different asset classes in
accordance with your tolerance for risk. At OppenheimerFunds, our portfolio
management teams include seasoned professionals who have encountered extreme
market volatility in the past, giving them the per spective required to address
risks and take advantage of opportunities in turbulent markets. In our view,
having a well-defined set of financial goals, a disciplined long-term strategy
and the help of experienced investment professionals are all fundamental parts
of The Right Way to Invest.
Sincerely,
/s/ Bridget A. Macaskill
Bridget A. Macaskill
September 22, 1998
3 Oppenheimer Enterprise Fund
<PAGE>
An interview with your Fund's manager
- --------------------------------------------------------------------------------
"...the profit outlook for small companies is brighter today, and stock prices
are currently attractive."
How did the Fund perform?
Oppenheimer Enterprise Fund performed quite well relative to the universe of
mutual funds that invest primarily in smaller size companies. In fact, for the
period ended September 30, 1998, the Fund's Class A shares were ranked 1 out of
44 micro-cap funds as measured by Lipper Analytical Services, Inc.(1)
What factors affected the Fund's performance?
Because of the continuing economic crisis in Asia, global investors favored the
perceived safety and liquidity of widely held stocks. As a result, large company
stocks continued to outperform small caps. For the fiscal year that ended August
31, 1998, Oppenheimer Enterprise Fund solidly outperformed the Russell 2000
Index, the Fund's benchmark, which suffered a (19.4)% decline.(2) The Fund
outperformed its benchmark because, unlike the index or even index funds, we can
be selective about which companies to hold in the portfolio. This affords us the
freedom to choose only those companies that we believe have superior
fundamentals.
Tell us about some of your winning stocks.
New Era of Networks, Inc. contributed significantly to the Fund's return during
the period. This company sells software that enables businesses with different
types of computers in various locations to work together. Such innovative
technology has allowed New Era of Networks to form strategic alliances with
major computer companies such as IBM, which has resulted in dramatic sales
growth.
1. Source: Lipper Analytical Services, Inc., 9/30/98. Based on the comparisons
between changes in net asset value without considering sales charges, with
dividends and capital gains distributions of the Fund's Class A shares
reinvested. The Fund's Class A shares were ranked 1 out of 44 micro-cap funds
for the one-year period ended 9/30/98.
4 Oppenheimer Enterprise Fund
<PAGE>
[PHOTO]
Portfolio Management
Team (l to r)
Bonnie Sherman
Alan Gilston
Jay Tracey (Portfolio Manager)
Susan Switzer
We also purchased shares in Cyberian Outpost, Inc., another technology company,
which went public in July. The company sells computer hardware and software
products over the Internet, and has experienced dramatic sales growth as a
result of the increasing amount of traffic on its website.
Let's discuss some winning companies outside of technology.
With the economy changing rapidly, there is a growing need for continuing
education and training. Career Education Corp. is an adult education company
that offers specialized degrees and training to roughly 13,000 students in areas
such as information technology. Also, Investors Financial Services Corp., which
provides custody, trustee and other services to the money management community,
performed well during the fiscal year. The company considers itself a "boutique"
firm that can offer a higher level of service at competitive prices. The stock
has also done well because of the exceptional growth of professional money
management during the 1990s.
Stericycle Inc., another winner in the portfolio, specializes in handling
medical waste disposal, an area that the big solid waste companies have
virtually abandoned. The company continues to win new contracts with hospitals,
and recently acquired the medical waste division of Waste Management, a Fortune
500 company.
2. The Russell 2000 Index is a capitalization-weighted index of 2,000 U.S.
issuers with market values ranging from $25 million to $1 billion, and cannot be
purchased by investors.
5 Oppenheimer Enterprise Fund
<PAGE>
An interview with your Fund's manager
- --------------------------------------------------------------------------------
- --------------------------------
Avg Annual Total Returns
- --------------------------------
For the Periods Ended 9/30/98(3)
Class A
Since
1 year Inception
- --------------------------------
(10.16)% (22.24)%
- --------------------------------
Class B
Since
1 year Inception
- --------------------------------
(9.74)% (23.14)%
- --------------------------------
Class C
Since
1 year Inception
- --------------------------------
(6.27)% (23.81)%
- --------------------------------
Which companies didn't perform as well as you'd expected?
An operator of cafeteria-style restaurants was a poor performer during the
period. We were originally attracted to the company because of management's
track record as well as our belief that the stock was very attractively priced.
Unfortunately, the company's earnings proved disappointing and there was
significant turnover in management.
After a period of excellent performance, small telecommunications
companies have performed poorly in recent months. These companies recently went
through a phase that required considerable investment in their back office
capabilities to catch up with dramatic customer growth. This hurt earnings
somewhat. In a market environment that has been negative for small company
stocks, any hint of earnings disappointment has resulted in downward stock
prices.
What is your outlook?
First, earnings growth for large companies is slowing--more so than for small
companies. Second, small company stock prices are relatively low compared to big
companies. True, all other things being equal, small companies are less
predictable and therefore may not merit as high a value as large companies.
However, the relative price of small companies is as low as it has been since
1990, at which time small companies proceeded to generally outperform large
companies for about three years. At some point, investors will see that small
com panies can offer better growth at lower prices.
In the meantime, we are going to continue to do what we have been doing,
which is to not worry extensively about whether small companies can out perform
large companies. We're not going to worry about over-emphasizing one industry
over another.
6 Oppenheimer Enterprise Fund
<PAGE>
Portfolio Allocation(4)
[The following table was depicted as a pie chart in the printed material.]
Common Stocks 70.5%
Cash Equivalents 29.5
Instead, we're going to continue to focus on maintaining a diversified
portfolio, and trying to find great companies at reasonable prices that we
believe have the potential for strong sales and earnings growth. Maintaining a
dis ciplined focus and emphasis on individual stock selection is part of what
makes Oppenheimer Enterprise Fund The Right Way To Invest.
Largest Industries(4)
- -----------------------------------------
Computer Software/Services 18.4%
- -----------------------------------------
Industrial Services 10.8
- -----------------------------------------
Retail: Specialty 10.1
- -----------------------------------------
Healthcare/Supplies & Services 8.8
- -----------------------------------------
Diversified Financial 3.1
- -----------------------------------------
Top 10 Stock Holdings(4)
- -----------------------------------------
New Era of Networks, Inc. 2.2%
- -----------------------------------------
Advance ParadigM, Inc. 2.1
- -----------------------------------------
Segue Software, Inc. 2.1
- -----------------------------------------
BindView Development Corp. 1.9
- -----------------------------------------
Career Education Corp. 1.8
- -----------------------------------------
Cyberian Outpost, Inc. 1.8
- -----------------------------------------
Stericycle, Inc. 1.8
- -----------------------------------------
TSI International Software Ltd. 1.6
- -----------------------------------------
School Specialty, Inc. 1.6
- -----------------------------------------
Kendle International, Inc. 1.5
3. Class A returns include the current maximum initial sales charge of 5.75%.
Class B returns include the applicable contingent deferred sales charge of 5%
(1-year) and 3% (since inception on 11/7/95). Class C returns include the
contingent deferred sales charge of 1% for the one-year period. An explanation
of the different performance calculations is in the Fund's prospectus. Class B
and C shares are subject to a 0.75% asset-based sales charge.
4. Portfolio is subject to change. Percentages are as of August 31, 1998, and
are based on total market value of investments.
7 Oppenheimer Enterprise Fund
<PAGE>
Fund performance
- --------------------------------------------------------------------------------
How Has the Fund Performed? Below is a discussion by the Manager of the Fund's
performance during its fiscal year ended August 31, 1998, followed by a
graphical comparison of the Fund's performance to an appropriate broad-based
market index and to a sector index.
o Management's Discussion of Performance. During Oppenheimer Enterprise
Fund's past fiscal year that ended August 31, 1998, the Fund realized gains in a
variety of different market sectors, including technology, education, waste
disposal and financial services. Because of concerns about the impact of the
Asian economic crisis on the U.S. economy, investors continued to generally
prefer large company stocks that they perceived would better weather a downturn.
Although this big company bias did not help the Fund's performance, the Fund
performed very well relative to its peer group by maintaining a diver sified
portfolio of com panies with the potential for strong sales and earnings growth.
The Fund's portfolio and its portfolio manager's strategies are subject to
change.
o Comparing the Fund's Performance to the Market. The graphs that follow
show the performance of a hypothetical $10,000 investment in each class of
shares of the Fund from inception date of November 7, 1995, held until its
fiscal year-end August 31, 1998. The graphs assume that all dividends and
capital gains distributions were reinvested in additional shares. The graphs
reflect the deduction of the 5.75% maximum initial sales charge on Class A
shares and the applicable contingent deferred sales charge on Class B and Class
C shares.
8 Oppenheimer Enterprise Fund
<PAGE>
The Fund's performance is compared to the performance of the Standard &
Poor's (S&P) 500 Index and the Russell 2000 Index. The S&P 500 Index is a
broad-based index of equity securities widely regarded as a general measure of
the performance of the U.S. equity securities market. The Russell 2000 Index is
a capitalization-weighted index of 2,000 U.S. issuers whose common stocks are
traded on the New York and American Stock Exchanges and NASDAQ, and is widely
recognized as a measure of the performance of "mid-capitalization" stocks.
Index performance reflects the reinvestment of dividends but does not
consider the effect of capital gains or transaction costs, and none of the data
in the graphs that follow shows the effect of taxes. The Fund's performance
reflects the effects of Fund business and operating expenses. While index
comparisons may be useful to provide a benchmark for the Fund's performance, it
must be noted that the Fund's investments are not limited to the securities in
the indices shown.
9 Oppenheimer Enterprise Fund
<PAGE>
Fund performance
- --------------------------------------------------------------------------------
Class A Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
Oppenheimer Enterprise Fund (Class A), S&P 500 and Russell 2000
[The following table was originally a line graph in the printed material.]
Oppenheimer Enterprise
Fund Cls A S&P 500 Russell 2000
---------------------- ------- ------------
11.7.95 9425 10000 10000
8.31.96 14590 11432 11398
8.31.97 17199 16077 14698
8.31.98 16227 17379 11847
Average Annual Total Return of Class A Shares of the Fund at 8/31/98(1)
1 Year -11.08% Life 18.75%
Class B Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
Oppenheimer Enterprise Fund (Class B), S&P 500 and Russell 2000
[The following table was originally a line graph in the printed material.]
Oppenheimer Enterprise
Fund Cls B S&P 500 Russell 2000
---------------------- ------- ------------
11.7.95 10000 10000 10000
8.31.96 15390 11432 11398
8.31.97 18011 16077 14698
8.31.98 16553 17379 11847
Average Annual Total Return of Class B Shares of the Fund at 8/31/98(2)
1 Year -10.72% Life 19.59%
10 Oppenheimer Enterprise Fund
<PAGE>
Class C Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
Oppenheimer Enterprise Fund (Class C), S&P 500 and Russell 2000
[The following table was originally a line graph in the printed material.]
Oppenheimer Enterprise
Fund Cls C S&P 500 Russell 2000
---------------------- ------- ------------
11.7.95 10000 10000 10000
8.31.96 15390 11432 11398
8.31.97 18001 16077 14698
8.31.98 16853 17379 11847
Average Annual Total Return of Class C Shares of the Fund at 8/31/98(3)
1 Year -7.24% Life 20.36%
The returns and the ending account values in the graphs show change in share
value and include reinvestment of all dividends and capital gains distributions.
The performance information for the S&P 500 Index and the Russell 2000 Index in
each of the graphs begins on 10/31/95.
1. The inception date of the Fund's Class A shares was 11/7/95. The average
annual total return is shown net of the applicable 5.75% maximum initial sales
charge.
2. Class B shares of the Fund were first publicly offered on 11/7/95. The
average annual total return is shown net of the applicable 5% and 3% contingent
deferred sales charge respectively, for the 1-year period and the life of the
class. The ending account value in the graph is net of the applicable 3%
contingent deferred sales charge.
3. Class C shares of the Fund were first publicly offered on 11/7/95. The
average annual total return is shown net of the applicable 1% contingent
deferred sales charge for the 1-year period. Past performance is not predictive
of future performance.
11 Oppenheimer Enterprise Fund
<PAGE>
Financials
- --------------------------------------------------------------------------------
12 Oppenheimer Enterprise Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments August 31, 1998
- --------------------------------------------------------------------------------
Market Value
Shares See Note 1
================================================================================
Common Stocks--72.7%
- --------------------------------------------------------------------------------
Basic Materials--0.3%
- --------------------------------------------------------------------------------
Chemicals--0.3%
Brunswick Technologies, Inc.(1) 50,000 $ 365,625
- --------------------------------------------------------------------------------
Consumer Cyclicals--15.3%
- --------------------------------------------------------------------------------
Autos & Housing--0.5%
Travis Boats & Motors, Inc.(1) 40,000 600,000
- --------------------------------------------------------------------------------
Leisure & Entertainment--2.7%
Global Vacation Group, Inc.(1) 149,000 1,490,000
- --------------------------------------------------------------------------------
ResortQuest International, Inc.(1) 100,000 1,150,000
- --------------------------------------------------------------------------------
Silver Diner, Inc.(1)(2) 80,000 80,000
- --------------------------------------------------------------------------------
Silver Diner, Inc.(1)(2)(3) 750,000 712,500
------------
3,432,500
- --------------------------------------------------------------------------------
Media--0.8%
Cumulus Media, Inc., Cl. A(1) 100,000 1,050,000
- --------------------------------------------------------------------------------
Retail: General--0.9%
Quicksilver, Inc.(1) 80,000 1,100,000
- --------------------------------------------------------------------------------
Retail: Specialty--10.4%
Blue Rhino Corp.(1) 135,000 1,417,500
- --------------------------------------------------------------------------------
Chico's Fas, Inc.(1) 100,000 1,275,000
- --------------------------------------------------------------------------------
Cutter & Buck, Inc.(1) 80,000 1,690,000
- --------------------------------------------------------------------------------
Cyberian Outpost, Inc.(1)(2) 375,000 2,346,094
- --------------------------------------------------------------------------------
DM Management Co.(1) 105,000 1,522,500
- --------------------------------------------------------------------------------
Handleman Co.(1) 300,000 1,931,250
- --------------------------------------------------------------------------------
J. Baker, Inc. 120,000 945,000
- --------------------------------------------------------------------------------
School Specialty, Inc.(1) 180,000 2,058,750
------------
13,186,094
- --------------------------------------------------------------------------------
Consumer Non-Cyclicals--16.0%
- --------------------------------------------------------------------------------
Education--3.0%
Bright Horizons Family Solutions, Inc.(1) 67,511 1,426,170
- --------------------------------------------------------------------------------
Career Education Corp.(1) 110,000 2,420,000
------------
3,846,170
- --------------------------------------------------------------------------------
Food--1.0%
Balance Bar Co.(1) 120,000 1,260,000
13 Oppenheimer Enterprise Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Continued)
- --------------------------------------------------------------------------------
Market Value
Shares See Note 1
- --------------------------------------------------------------------------------
Healthcare/Drugs--3.0%
Applied Analytical Industries, Inc.(1) 140,000 $ 1,347,500
- --------------------------------------------------------------------------------
Boron, LePore & Associates, Inc.(1) 60,000 1,800,000
- --------------------------------------------------------------------------------
Ethical Holdings plc, Sponsored ADR(1) 450,000 126,562
- --------------------------------------------------------------------------------
International Isotopes, Inc.(1) 50,000 490,625
------------
3,764,687
- --------------------------------------------------------------------------------
Healthcare/Supplies & Services--9.0%
Advance ParadigM, Inc.(1) 130,000 2,795,000
- --------------------------------------------------------------------------------
Autonomous Technologies Corp.(1) 200,000 688,750
- --------------------------------------------------------------------------------
Cornell Corrections, Inc.(1) 38,300 306,400
- --------------------------------------------------------------------------------
EP MedSystems, Inc.(1)(2) 538,500 1,750,125
- --------------------------------------------------------------------------------
Hanger Orthopedic Group, Inc.(1) 15,400 230,037
- --------------------------------------------------------------------------------
ICON plc, Sponsored ADR(1) 30,000 798,750
- --------------------------------------------------------------------------------
Ortivus AB, Cl. A(1) 27,400 338,760
- --------------------------------------------------------------------------------
Ortivus AB, Cl. B(1) 14,000 174,820
- --------------------------------------------------------------------------------
Polartechnics Ltd.(1) 500,000 743,917
- --------------------------------------------------------------------------------
Priority Healthcare Corp., Cl. B(1) 87,000 1,761,750
- --------------------------------------------------------------------------------
Superior Consultant Holdings Corp.(1) 35,000 1,069,688
- --------------------------------------------------------------------------------
Ventana Medical Systems, Inc.(1) 40,000 800,000
------------
11,457,997
- --------------------------------------------------------------------------------
Energy--0.3%
- --------------------------------------------------------------------------------
Energy Services & Producers--0.3%
FX Energy, Inc.(1) 60,000 360,000
- --------------------------------------------------------------------------------
Financial--5.1%
- --------------------------------------------------------------------------------
Banks--1.9%
First International Bancorp, Inc. 113,000 1,243,000
- --------------------------------------------------------------------------------
TeleBanc Financial Corp.(1) 90,000 1,113,750
------------
2,356,750
- --------------------------------------------------------------------------------
Diversified Financial--3.2%
American Capital Strategies Ltd. 40,000 475,000
- --------------------------------------------------------------------------------
Creditrust Corp.(1) 70,000 1,019,375
- --------------------------------------------------------------------------------
Investors Financial Services Corp. 33,800 1,753,375
- --------------------------------------------------------------------------------
Rock Financial Corp. 110,000 797,500
------------
4,045,250
14 Oppenheimer Enterprise Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Market Value
Shares See Note 1
- --------------------------------------------------------------------------------
Industrial--12.4%
- --------------------------------------------------------------------------------
Industrial Services--11.1%
A Consulting Team, Inc.(1) 100,000 $ 803,125
- --------------------------------------------------------------------------------
Condor Technology Solutions, Inc.(1) 90,000 765,000
- --------------------------------------------------------------------------------
Giga Information Group, Inc.(1) 45,000 281,250
- --------------------------------------------------------------------------------
Kendle International, Inc.(1) 80,000 1,945,000
- --------------------------------------------------------------------------------
Pentacon, Inc.(1) 100,000 800,000
- --------------------------------------------------------------------------------
Professional Detailing, Inc.(1) 70,000 1,190,000
- --------------------------------------------------------------------------------
Rainbow Rentals, Inc.(1) 140,000 1,295,000
- --------------------------------------------------------------------------------
Rent-Way, Inc.(1) 57,500 1,423,125
- --------------------------------------------------------------------------------
Stericycle, Inc.(1) 150,000 2,306,250
- --------------------------------------------------------------------------------
U.S. Liquids, Inc.(1) 67,200 1,016,400
- --------------------------------------------------------------------------------
Unidigital, Inc.(1) 100,000 600,000
- --------------------------------------------------------------------------------
Waste Connections, Inc.(1) 80,000 1,695,000
------------
14,120,150
- --------------------------------------------------------------------------------
Manufacturing--1.3%
AstroPower, Inc.(1) 100,000 662,500
- --------------------------------------------------------------------------------
Denali, Inc.(1) 95,000 1,045,000
------------
1,707,500
- --------------------------------------------------------------------------------
Technology--22.4%
- --------------------------------------------------------------------------------
Computer Hardware--0.8%
Com21, Inc.(1) 100,000 1,062,500
- --------------------------------------------------------------------------------
Computer Software/Services--19.0%
BindView Development Corp.(1) 250,000 2,437,500
- --------------------------------------------------------------------------------
Brio Technology, Inc.(1) 160,000 1,680,000
- --------------------------------------------------------------------------------
Concord Communications, Inc.(1) 50,000 1,337,500
- --------------------------------------------------------------------------------
DA Consulting Group, Inc.(1) 85,000 1,338,750
- --------------------------------------------------------------------------------
Digital River, Inc.(1) 50,000 256,250
- --------------------------------------------------------------------------------
Echelon Corp.(1) 210,000 1,050,000
- --------------------------------------------------------------------------------
Interplay Entertainment Corp.(1) 200,000 1,100,000
- --------------------------------------------------------------------------------
NetGravity, Inc.(1) 100,000 775,000
- --------------------------------------------------------------------------------
Network Solutions, Inc., Cl. A(1) 40,000 1,030,000
15 Oppenheimer Enterprise Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Continued)
- --------------------------------------------------------------------------------
Market Value
Shares See Note 1
- --------------------------------------------------------------------------------
Computer Software/Services (continued)
New Era of Networks, Inc.(1) 100,000 $ 2,862,500
- --------------------------------------------------------------------------------
Onhealth Network Co.(1) 200,000 850,000
- --------------------------------------------------------------------------------
Phoenix International Ltd.(1) 110,000 1,567,500
- --------------------------------------------------------------------------------
Segue Software, Inc.(1) 170,000 2,730,625
- --------------------------------------------------------------------------------
Software.net Corp.(1) 70,000 603,750
- --------------------------------------------------------------------------------
SOFTWORKS, Inc.(1) 200,000 850,000
- --------------------------------------------------------------------------------
Tier Technologies, Inc., Cl. B(1) 100,000 1,425,000
- --------------------------------------------------------------------------------
TSI International Software Ltd.(1) 80,000 2,150,000
------------
24,044,375
- --------------------------------------------------------------------------------
Electronics--1.3%
American Xtal Technology, Inc.(1) 140,000 1,330,000
- --------------------------------------------------------------------------------
Symphonix Devices, Inc.(1) 86,500 270,313
------------
1,600,313
- --------------------------------------------------------------------------------
Telecommunications/Technology--1.3%
Carrier Access Corp.(1) 20,000 287,500
- --------------------------------------------------------------------------------
Lightbridge, Inc.(1) 40,000 200,000
- --------------------------------------------------------------------------------
PhoneTel Technologies, Inc.(1) 350,000 393,750
- --------------------------------------------------------------------------------
SCC Communications Corp.(1) 120,000 810,000
------------
1,691,250
- --------------------------------------------------------------------------------
Utilities--0.9%
- --------------------------------------------------------------------------------
Telephone Utilities--0.9%
MGC Communications, Inc.(1) 135,000 1,164,375
------------
Total Common Stocks (Cost $98,163,355) 92,215,536
16 Oppenheimer Enterprise Fund
<PAGE>
- --------------------------------------------------------------------------------
Face Market Value
Amount See Note 1
===============================================================================
Repurchase Agreements--30.5%
- -------------------------------------------------------------------------------
Repurchase agreement with J.P. Morgan
Securities, Inc., 5.75%, dated 8/31/98, to be
repurchased at $19,603,131 on 9/1/98,
collateralized by U.S. Treasury Bonds,
7.50%-13.25%, 11/15/09-2/15/19, with
a value of $18,226,965, and U.S. Treasury
Nts., 6.375%, 7/15/99, with a value of
$1,827,782 $19,600,000 $ 19,600,000
- -------------------------------------------------------------------------------
Repurchase agreement with Salomon Smith
Barney Holdings, Inc., 5.75%, dated 8/31/98,
to be repurchased at $19,003,035 on 9/1/98,
collateralized by U.S. Treasury Nts.,
5.375%-8%, 10/31/98-2/15/05, with a value of
$19,503,750 19,000,000 19,000,000
------------
Total Repurchase Agreements
(Cost $38,600,000) 38,600,000
- --------------------------------------------------------------------------------
Total Investments, at Value
(Cost $136,763,355) 103.2% 130,815,536
- -------------------------------------------------------------------------------
Liabilities in Excess of Other Assets (3.2) (4,044,211)
----------- ------------
Net Assets 100.0% $126,771,325
=========== ============
1. Non-income producing security.
2. Affiliated company. Represents ownership of at least 5% of the voting
securities of the issuer and, is or was an affiliate as defined in the
Investment Company Act of 1940, at or during the period ended August 31, 1998.
The aggregate fair value of securities of affiliated companies held by the Fund
as of August 31, 1998, amounts to $4,888,719. Transactions during the period in
which the issuer was an affiliate are as follows:
Shares Gross Gross Shares
August 31, 1997 Additions Reductions August 31, 1998
- --------------------------------------------------------------------------------
Cyberian Outpost, Inc. -- 375,000 -- 375,000
- --------------------------------------------------------------------------------
EP MedSystems, Inc. 100,000 438,500 -- 538,500
- --------------------------------------------------------------------------------
Silver Diner, Inc. 130,000 700,000 -- 830,000
3. Identifies issues considered to be illiquid or restricted--See Note 5 of
Notes to Financial Statements.
See accompanying Notes to Financial Statements.
17 Oppenheimer Enterprise Fund
<PAGE>
- -------------------------------------------------------------------------------
Statement of Assets and Liabilities August 31, 1998
- -------------------------------------------------------------------------------
===============================================================================
Assets
Investments, at value (including repurchasement agreement
of $38,600,000)--see accompanying statement:
Unaffiliated companies (cost $133,033,417) $ 125,926,817
Affiliated companies (cost $3,729,938) 4,888,719
- -------------------------------------------------------------------------------
Receivables:
Investments sold 11,655,236
Shares of beneficial interest sold 703,247
Interest and dividends 8,765
- -------------------------------------------------------------------------------
Deferred organization costs--Note 1 15,288
- -------------------------------------------------------------------------------
Other 4,127
-------------
Total assets 143,202,199
===============================================================================
Liabilities
Bank overdraft 48,233
- -------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 15,558,696
Shares of beneficial interest redeemed 624,410
Trustees' fees--Note 1 69,613
Distribution and service plan fees 50,101
Shareholder reports 48,071
Custodian fees 1,716
Other 30,034
-------------
Total liabilities 16,430,874
===============================================================================
Net Assets $ 126,771,325
=============
===============================================================================
Composition of Net Assets
Paid-in capital $ 129,892,324
- -------------------------------------------------------------------------------
Accumulated net investment loss (67,426)
- -------------------------------------------------------------------------------
Accumulated net realized gain on investments 2,894,246
- -------------------------------------------------------------------------------
Net unrealized depreciation on investments and translation of
assets and liabilities denominated in foreign currencies (5,947,819)
-------------
Net assets $ 126,771,325
=============
18 Oppenheimer Enterprise Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share (based
on net assets of $74,456,084 and 5,059,274 shares of
beneficial interest outstanding) $14.72
Maximum offering price per share (net asset value plus
sales charge of 5.75% of offering price) $15.62
- --------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price
per share (based on net assets of $43,569,712 and
3,028,924 shares of beneficial interest outstanding) $14.38
- --------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price
per share (based on net assets of $8,745,529 and
608,156 shares of beneficial interest outstanding) $14.38
See accompanying Notes to Financial Statements.
19 Oppenheimer Enterprise Fund
<PAGE>
- -------------------------------------------------------------------------------
Statement of Operations For the Year Ended August 31, 1998
- -------------------------------------------------------------------------------
===============================================================================
Investment Income
Interest $ 720,367
- -------------------------------------------------------------------------------
Dividends 76,844
------------
Total income 797,211
===============================================================================
Expenses
Management fees--Note 4 891,384
- -------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A 157,212
Class B 389,547
Class C 78,991
- -------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 404,182
- -------------------------------------------------------------------------------
Shareholder reports 87,391
- -------------------------------------------------------------------------------
Trustees' fees and expenses 53,526
- -------------------------------------------------------------------------------
Legal, auditing and other professional fees 24,207
- -------------------------------------------------------------------------------
Registration and filing fees 19,869
- -------------------------------------------------------------------------------
Insurance expenses 5,517
- -------------------------------------------------------------------------------
Deferred organization amortization 5,142
- -------------------------------------------------------------------------------
Custodian fees and expenses 2,285
- -------------------------------------------------------------------------------
Other 4,613
------------
Total expenses 2,123,866
===============================================================================
Net Investment Loss (1,326,655)
===============================================================================
Realized and Unrealized Gain
Net realized gain on investments 10,331,533
- -------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments (24,609,660)
Translation of assets and liabilities denominated in
foreign currencies 144,289
------------
Net change (24,465,371)
------------
Net realized and unrealized loss (14,133,838)
===============================================================================
Net Decrease in Net Assets Resulting from Operations $(15,460,493)
============
See accompanying Notes to Financial Statements.
20 Oppenheimer Enterprise Fund
<PAGE>
- -------------------------------------------------------------------------------
Statements of Changes in Net Assets
- -------------------------------------------------------------------------------
Year Ended August 31,
1998 1997
===============================================================================
Operations
Net investment loss $ (1,326,655) $ (992,965)
- -------------------------------------------------------------------------------
Net realized gain 10,331,533 5,153,073
- -------------------------------------------------------------------------------
Net change in unrealized appreciation
or depreciation (24,465,371) 7,605,620
------------ ------------
Net increase (decrease) in net assets
resulting from operations (15,460,493) 11,765,728
===============================================================================
Distributions to Shareholders
Distributions from net realized gain:
Class A (4,786,108) (2,947,210)
Class B (2,599,048) (1,406,497)
Class C (542,632) (317,008)
===============================================================================
Beneficial Interest Transactions
Net increase in net assets resulting from
beneficial interest transactions--Note 2:
Class A 35,326,895 3,467,955
Class B 26,047,046 3,163,980
Class C 4,821,481 364,697
===============================================================================
Net Assets
Total increase 42,807,141 14,091,645
- -------------------------------------------------------------------------------
Beginning of period 83,964,184 69,872,539
------------ ------------
End of period (including accumulated
net investment losses of $67,426 and
$32,928, respectively) $126,771,325 $ 83,964,184
============ ============
See accompanying Notes to Financial Statements.
21 Oppenheimer Enterprise Fund
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A
-------------------------------------
Year Ended August 31,
1998 1997 1996(1)
=========================================================================================
<S> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $16.98 $15.48 $10.00
- -----------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.14) (.09) (.05)
Net realized and unrealized gain (loss) (.75) 2.66 5.53
------ ------ ------
Total income (loss) from investment operations (.89) 2.57 5.48
- -----------------------------------------------------------------------------------------
Distributions from net realized gain (1.37) (1.07) --
------ ------ ------
Total distributions to shareholders (1.37) (1.07) --
- -----------------------------------------------------------------------------------------
Net asset value, end of period $14.72 $16.98 $15.48
====== ====== ======
=========================================================================================
Total Return, at Net Asset Value(2) (5.65)% 17.88% 54.80%
=========================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $74,456 $52,455 $44,421
- -----------------------------------------------------------------------------------------
Average net assets (in thousands) $72,059 $42,895 $30,655
- -----------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment loss (0.81)% (1.18)% (0.59)%(3)
Expenses 1.48% 1.50% 1.66%(3)
- -----------------------------------------------------------------------------------------
Portfolio turnover rate(4) 181.7% 142.4% 155.6%
</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.
22 Oppenheimer Enterprise Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class B Class C
--------------------------------- --------------------------------
Year Ended August 31, Year Ended August 31,
1998 1997 1996(1) 1998 1997 1996(1)
=============================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $16.75 $15.39 $10.00 $16.74 $15.39 $10.00
- -----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.15) (.18) (.14) (.16) (.18) (.14)
Net realized and unrealized gain (loss) (.85) 2.61 5.53 (.83) 2.60 5.53
------ ------ ------ ------ ------ ------
Total income (loss) from investment operations (1.00) 2.43 5.39 (.99) 2.42 5.39
- -----------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain (1.37) (1.07) -- (1.37) (1.07) --
------ ------ ------ ------ ------ ------
Total distributions to shareholders (1.37) (1.07) -- (1.37) (1.07) --
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $14.38 $16.75 $15.39 $14.38 $16.74 $15.39
====== ====== ====== ====== ====== ======
=============================================================================================================================
Total Return, at Net Asset Value(2) (6.43)% 17.03% 53.90% (6.38)% 16.97% 53.90%
=============================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $43,570 $25,856 $20,606 $8,746 $5,653 $4,846
- -----------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $39,003 $20,410 $14,123 $7,908 $4,539 $3,472
- -----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment loss (1.58)% (1.96)% (1.37)%(3) (1.58)% (1.96)% (1.35)%(3)
Expenses 2.26% 2.27% 2.44%(3) 2.26% 2.27% 2.43%(3)
- -----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 181.7% 142.4% 155.6% 181.7% 142.4% 155.6%
</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, 1998, were $215,443,522 and $190,803,538, respectively.
See accompanying Notes to Financial Statements.
23 Oppenheimer Enterprise Fund
<PAGE>
- --------------------------------------------------------------------------------
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. The Fund primarily invests in equity securities of small U.S. and
foreign companies. The Fund's investment advisor is OppenheimerFunds, Inc. (the
Manager). The Fund offers Class A, Class B and Class C shares. Class A shares
are sold with a front-end sales charge. Class B and Class C shares may be
subject to a contingent deferred sales charge. All 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.
24 Oppenheimer Enterprise Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
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, Gains and Losses. Income, expenses (other than
those attributable to a specific class), 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, 1998, a provision of $37,515 was made for the Fund's projected
benefit obligations and payments of $3,017 were made to retired trustees,
resulting in an accumulated liability of $67,427, at August 31, 1998.
The Board of Trustees has adopted a deferred compensation plan for
independent Trustees that enables Trustees to elect to defer receipt of all or a
portion of annual fees they are entitled to receive from the Fund. Under the
plan, the compensation deferred is periodically adjusted as though an equivalent
amount had been invested for the Trustee in shares of one or more Oppenheimer
funds selected by the Trustee. The amount paid to the Trustee under the plan
will be determined based upon the performance of the selected funds. Deferral of
Trustees' fees under the plan will not affect the net assets of the Fund, and
will not materially affect the Fund's assets, liabilities or net income per
share.
- --------------------------------------------------------------------------------
Distributions to Shareholders. Dividends and distributions to shareholders are
recorded on the ex-dividend date.
25 Oppenheimer Enterprise Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
================================================================================
1. Significant Accounting Policies (continued)
Organization Costs. The Manager advanced $25,237 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, by any holder thereof, the redemption proceeds will be
reduced by the proportionate amount of the unamortized organization costs
represented by the ratio the number of shares redeemed bears to the number of
initial shares outstanding at the time of such redemption.
- --------------------------------------------------------------------------------
Classification of Distributions to Shareholders. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax purposes
primarily due to net operating losses. 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.
The Fund adjusts 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
year ended August 31, 1998, amounts have been reclassified to reflect a decrease
in accumulated net investment loss of $1,292,157. 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.
26 Oppenheimer Enterprise Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
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:
Year Ended August 31, 1998 Year Ended August 31, 1997
-------------------------- --------------------------
Shares Amount Shares Amount
- -----------------------------------------------------------------------------
Class A:
Sold 2,577,394 $ 46,616,420 852,726 $ 12,879,046
Distributions reinvested 295,161 4,571,937 193,503 2,765,162
Redeemed (902,443) (15,861,462) (827,440) (12,176,253)
--------- ------------ -------- ------------
Net increase 1,970,112 $ 35,326,895 218,789 $ 3,467,955
========= ============ ======== ============
- -----------------------------------------------------------------------------
Class B:
Sold 1,709,642 $ 30,191,456 388,682 $ 5,860,950
Distributions reinvested 159,530 2,428,045 93,212 1,320,815
Redeemed (384,289) (6,572,455) (276,877) (4,017,785)
--------- ------------ -------- ------------
Net increase 1,484,883 $ 26,047,046 205,017 $ 3,163,980
========= ============ ======== ============
- -----------------------------------------------------------------------------
Class C:
Sold 421,843 $ 7,464,131 93,376 $ 1,411,388
Distributions reinvested 33,204 505,369 20,665 292,614
Redeemed (184,608) (3,148,019) (91,264) (1,339,305)
--------- ------------ -------- ------------
Net increase 270,439 $ 4,821,481 22,777 $ 364,697
========= ============ ======== ============
================================================================================
3. Unrealized Gains and Losses on Investments
At August 31, 1998, net unrealized depreciation on investments of $5,947,819 was
composed of gross appreciation of $11,367,599, and gross depreciation of
$17,315,418.
================================================================================
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.
27 Oppenheimer Enterprise Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
================================================================================
4. Management Fees and Other Transactions with Affiliates (continued)
For the year ended August 31, 1998, commissions (sales charges paid by
investors) on sales of Class A shares totaled $609,401, of which $186,270 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 $846,587 and $44,585, respectively, of which $65,562 and
$1,228, respectively, was paid to an affiliated broker/dealer for Class B and
Class C. During the year ended August 31, 1998, OFDI received contingent
deferred sales charges of $77,221 and $1,872, 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 other Oppenheimer
funds. OFS's total costs of providing such services are allocated ratably to
these funds.
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, 1998, OFDI paid $7,124 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 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 and Class C shares
for its services rendered in distributing Class B and Class C shares. OFDI also
receives a service fee of 0.25% per year to compensate dealers for providing
personal services for accounts that hold Class B and Class C shares. Each fee is
computed on the average annual net assets of Class B or Class C shares,
determined as of the close of each regular business day. During the year ended
August 31, 1998, OFDI paid $1,819 to an affiliated broker/dealer as compensation
for Class B personal service and maintenance expenses and retained $323,772 and
$33,266, 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. As of August 31, 1998, OFDI had incurred excess
distribution and servicing costs of $1,227,770 for Class B and $104,974 for
Class C.
28 Oppenheimer Enterprise Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
5. Illiquid and Restricted Securities
At August 31, 1998, 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, 1998, was $712,500, which represents
0.56% of the Fund's net assets, all of which is considered restricted.
Information concerning restricted securities is as follows:
Valuation
Cost Per Unit as of
Security Acquisition Dates Per Unit August 31, 1998
- --------------------------------------------------------------------------------
Silver Diner, Inc. 7/10/96-1/14/98 $1.37-$5.50 $.95
================================================================================
6. Bank Borrowings
The Fund may borrow from a bank for temporary or emergency purposes including,
without limitation, funding of shareholder redemptions provided asset coverage
for borrowings exceeds 300%. The Fund has entered into an agreement which
enables it to participate with other Oppenheimer funds in an unsecured line of
credit with a bank, which permits borrowings up to $400 million, collectively.
Interest is charged to each fund, based on its borrowings, at a rate equal to
the Federal Funds Rate plus 0.35%. Borrowings are payable 30 days after such
loan is executed. The Fund also pays a commitment fee equal to its pro rata
share of the average unutilized amount of the credit facility at a rate of
0.0575% per annum.
The Fund had no borrowings outstanding during the year ended August
31, 1998.
29 Oppenheimer Enterprise Fund
<PAGE>
- --------------------------------------------------------------------------------
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, 1998, and the
related statement of operations for the year then ended, the statements of
changes in net assets for each of the years in the two-year period then ended,
and the financial highlights for each of the years in the two-year period then
ended, 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, 1998 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, 1998, the results of
its operations for the year then ended, the changes in its net assets for each
of the years in the two-year period then ended, and the financial highlights for
each of the years in the two-year period then ended, 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, 1998
30 Oppenheimer Enterprise Fund
<PAGE>
- --------------------------------------------------------------------------------
Federal Income Tax Information (Unaudited)
- --------------------------------------------------------------------------------
================================================================================
In early 1999 shareholders will receive information regarding all dividends and
distributions paid to them by the Fund during calendar year 1998. Regulations of
the U.S. Treasury Department require the Fund to report this information to the
Internal Revenue Service.
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 advisor for specific
guidance.
31 Oppenheimer Enterprise Fund
<PAGE>
- --------------------------------------------------------------------------------
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, III, 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 Advisor OppenheimerFunds, Inc.
================================================================================
Distributor OppenheimerFunds Distributor, Inc.
================================================================================
Transfer and OppenheimerFunds Services
Shareholder 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.
32 Oppenheimer Enterprise Fund
<PAGE>
- --------------------------------------------------------------------------------
OppenheimerFunds Family
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
==============================================================================================
Real Asset Funds
- ----------------------------------------------------------------------------------------------
Real Asset Fund Gold & Special Minerals Fund
==============================================================================================
Global Stock Funds
- ----------------------------------------------------------------------------------------------
Developing Markets Fund International Growth Fund Quest Global Value Fund
International Small Global Fund Global Growth & Income Fund
Company Fund
==============================================================================================
Stock Funds
- ----------------------------------------------------------------------------------------------
Enterprise Fund MidCap Fund Growth Fund
Discovery Fund Capital Appreciation Fund Disciplined Value Fund
Quest Small Cap Value Fund Quest Capital Value Fund Quest Value Fund
==============================================================================================
Stock & Bond Funds
- ----------------------------------------------------------------------------------------------
Main Street Income & Total Return Fund Disciplined Allocation Fund
Growth Fund Quest Balanced Multiple Strategies Fund
Quest Opportunity Value Fund(1) Convertible Securities Fund(2)
Value Fund Equity Income Fund
==============================================================================================
Taxable Bond Funds
- ----------------------------------------------------------------------------------------------
International Bond Fund Champion Income Fund U.S. Government Trust
World Bond Fund Strategic Income Fund Limited-Term Government Fund
High Yield Fund Bond Fund
==============================================================================================
Municipal Bond 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
</TABLE>
1. On 5/18/98, the Fund's name was changed from "Quest Growth & Income Value
Fund."
2. On 4/28/98, the Fund's name was changed from "Bond Fund for Growth."
3. Available only to investors in certain states.
4. An investment in money market funds is neither insured nor guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Although
these funds may seek to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in these funds.
Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc., Two
World Trade Center, New York, NY 10048-0203.
(C) Copyright 1998 OppenheimerFunds, Inc. All rights reserved.
33 Oppenheimer Enterprise Fund
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<PAGE>
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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 or by visiting our website. 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 or website 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.
Internet
24-hr access to account
information. Online
trans actions now available
- ---------------------------
www.oppenheimerfunds.com
- ---------------------------
General Information
Mon-Fri 8:30am-9pm ET
Sat 10am-4pm ET
- ---------------------------
1-800-525-7048
- ---------------------------
Account Transactions
Mon-Fri 8:30am-8pm ET
- ---------------------------
1-800-852-8457
- ---------------------------
PhoneLink
24-hr automated information
and automated transactions
- ---------------------------
1-800-533-3310
- ---------------------------
Telecommunication Device
for the Deaf (TDD)
Mon-Fri 8:30am-2pm ET
- ---------------------------
1-800-843-4461
- ---------------------------
OppenheimerFunds
Information Hotline
24 hours a day, timely and
insightful messages on the
economy and issues that
affect your investments
- ---------------------------
1-800-835-3104
- ---------------------------
[LOGO] OppenheimerFunds(R)
Distributor, Inc.
RA0885.001.0898 October 30, 1998
