As filed with the Securities and Exchange Commission on May 9, 2007
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-09447
Jacob Internet Fund Inc.
(Exact name of registrant as specified in charter)
C/O Jacob Asset Management of New York LLC
507 Paseo de la Playa
Redondo Beach, CA 90277
(Address of principal executive offices) (Zip code)
Ryan Jacob
C/O Jacob Asset Management of New York LLC
507 Paseo de la Playa
Redondo Beach, CA 90277
(Name and address of agent for service)
(310) 421-4943
Registrant's telephone number, including area code
Date of fiscal year end: AUGUST 31
Date of reporting period: FEBRUARY 28, 2007
ITEM 1. REPORT TO STOCKHOLDERS
JACOB INTERNET FUND INC.
SEMI-ANNUAL REPORT
FEBRUARY 28, 2007
The Jacob Internet Fund is a mutual fund with the primary investment
objective of long-term growth of capital with current income
as a secondary objective.
Investment Adviser
JACOB ASSET MANAGEMENT OF NEW YORK LLC
(JAM LOGO)
TABLE OF CONTENTS
<Table>
Letter From the Manager.............. 1
Industry Breakdown................... 3
Schedule of Investments.............. 4
Statement of Assets and Liabilities.. 8
Statement of Operations.............. 9
Statement of Changes in Net Assets... 10
Financial Highlights................. 11
Notes to the Financial Statements.... 12
Additional Information on Fund
Expenses........................... 18
Additional Information............... 20
</Table>
Dear Fellow Investors,
The past six months have been a buoyant period for the general market, and
for Internet stocks in particular. We are pleased to report that our Fund
returned a very solid 15.57% for the six-month period ended 2/28/07, handily
outperforming both the Nasdaq and the broader S&P 500 index, which returned
11.03% and 8.93%, respectively.
Our distinctive strategy of maintaining a balance between growth stocks and
value stocks within the Internet space has continued to serve us well. The
growth component of our portfolio, which includes some innovative Chinese
Internet companies, has enabled us to share in the overall market upswing.
Meanwhile, the value component--which helps limit our risk by affording extra
diversification and some downside protection--did not hinder us. While many of
our peers eschew "Internet value," we note that in this period fully half of our
top ten performers were value holdings.
Some of our favorite value picks are in business software, an area in which
the ongoing transition toward open-source and software-as-a-service applications
has caused upheaval, spurring consolidation among the smaller players. This in
turn has fueled something of an acquisition frenzy among the dominant players,
such as IBM and Oracle. We recently increased our exposure in this area, in
light of our belief that the Linux market will continue to grow as a percentage
of total IT spending. In the fall, we purchased shares of Red Hat when this
formerly expensive growth stock fell on the news that Oracle would offer a
competing product. We also built a position in Novell, the second largest player
in Linux. With close to $1 billion in both net cash and sales, Novell's
valuation was especially alluring to us as a classic value situation with future
growth potential. We plan to further increase our exposure to this attractive
space in the near future.
Another of our top value holdings is InfoSpace, the Internet search and
portal company that has been undergoing extensive restructuring. Last September,
the stock stumbled on news that the company would lay off a large number of
employees. Noting that the company has a strong balance sheet, which includes no
debt and about $400 million in cash, we took the opportunity to add
substantially to our position. We were pleased to enjoy a nearly 30% rise in the
stock price by the end of February.
On the growth side of the equation, we remain bullish in the Chinese
Internet. Our top two performers in the Fund this period were CDC Corp., the
Chinese enterprise software, mobile application and online game provider, and
Tencent Holdings, the dominant player in instant messaging. Both CDC Corp. and
Tencent rose over 60% during this period. China has the second highest number of
Internet users in the world, and the online advertising market there is
experiencing stellar growth--much stronger than here in the U.S. Extensive
investment in anticipation of the Olympic games in Beijing will further boost
near-term growth in the Chinese economy.
Stateside, we continue to believe in the Internet advertising market, and
some of our Fund's largest positions are in industry leaders including Google,
Yahoo and CNET.
Looking forward, our general approach to managing the fund remains
consistent: We continue to believe that having a mix of growth- and value-
oriented holdings is the best way to achieve strong returns while minimizing
volatility. We remain committed to diligently managing our positions, and taking
any potential
profits in a timely manner. Our ability to move freely between companies of
different market capitalizations as well as invest in international markets
should help us take advantage of attractive investment opportunities wherever
they develop.
Once again, we would like to take this opportunity to thank all of the
Fund's shareholders for their continued trust and confidence, and we look
forward to a bright future together.
Ryan Jacob
Portfolio Manager
THERE ARE SPECIFIC RISKS INHERENT IN INVESTING IN THE INTERNET AREA,
PARTICULARLY WITH RESPECT TO SMALLER CAPITALIZED COMPANIES AND THE HIGH
VOLATILITY OF INTERNET STOCKS.
The opinions expressed above are those of the portfolio manager and are subject
to change. Forecasts cannot be guaranteed.
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. MUTUAL FUND INVESTING
INVOLVES RISK; LOSS OF PRINCIPAL IS POSSIBLE. THE FUND INVESTS IN FOREIGN
SECURITIES WHICH INVOLVE GREATER VOLATILITY AND POLITICAL, ECONOMIC AND CURRENCY
RISKS AND DIFFERENCES IN ACCOUNTING METHODS.
Must be preceded or accompanied by a prospectus.
Fund holdings are subject to change and should not be construed as a
recommendation to buy or sell any security. Please refer to the schedule of
investments for additional fund holdings information.
Quasar Distributors, LLC. Distributor (4/07)
2
INDUSTRY BREAKDOWN AS OF FEBRUARY 28, 2007
(AS A % OF TOTAL INVESTMENTS)
Internet--Media Content 37.2%
Internet--Infrastructure 26.5%
Internet--Commerce 16.4%
Cash & Cash Equivalents 12.5%
Internet--Communications 7.4%
The Fund's Semi-Annual and Annual Reports include a complete schedule of
portfolio holdings for the second and fourth quarters of each fiscal year.
The Fund files its complete schedule of portfolio holdings with the SEC for the
first and third quarters of each fiscal year on Form N-Q. The Fund's Forms N-Q
are available on the SEC website at http://www.sec.gov and may be reviewed and
copied at the SEC's Public Reference Room in Washington, D.C. Information on the
operation of the Public Reference Room may be obtained by calling 1-800-SEC-
0330.
3
JACOB INTERNET FUND
SCHEDULE OF INVESTMENTS
FEBRUARY 28, 2007 (UNAUDITED)
- --------------------------------------------------------------------------------
<Table>
<Caption>
SHARES VALUE
------ -----
COMMON STOCKS 87.8%
- ------------------------------------------------------------------------------------------
INTERNET--COMMERCE 16.5%
998,573 Autobytel Inc.*(a) $ 3,894,435
21,000 Ctrip.com International Ltd.--ADR+(a) 1,239,210
24,821 Digital River, Inc.*(a) 1,374,835
100,000 E*TRADE Financial Corporation* 2,309,000
35,000 eBay Inc.* 1,122,100
47,100 Monster Worldwide Inc.*(a) 2,348,406
1,161,988 Napster Inc.*(a) 4,520,133
103,800 TD Ameritrade Holding Corporation*(a) 1,660,800
------------
18,468,919
- ------------------------------------------------------------------------------------------
INTERNET--COMMUNICATIONS 7.4%
617,900 Airspan Networks Inc.*(a) 2,805,266
253,400 Alvarion Limited*+(a) 1,971,452
537,240 deltathree, Inc.--Class A*(a) 848,839
331,653 Openwave Systems Inc.*(a) 2,706,289
------------
8,331,846
- ------------------------------------------------------------------------------------------
INTERNET--INFRASTRUCTURE 26.6%
1,000 Adobe Systems Incorporated* 39,250
419,351 Agile Software Corporation*(a) 2,688,040
1,700 Akamai Technologies, Inc.*(a) 87,669
40,000 Apple Computer, Inc.* 3,384,400
344,513 CDC Corporation--Class A*+ 3,166,074
63,900 Interwoven, Inc.* 972,558
98,474 Macrovision Corporation*(a) 2,429,354
400,000 Novell, Inc.*(a) 2,648,000
140,000 Red Hat, Inc.*(a) 3,143,000
80,000 SanDisk Corporation*(a) 2,913,600
306,088 SumTotal Systems, Inc.* 2,666,026
322,000 Sun Microsystems, Inc.*(a) 1,973,860
555,607 webMethods, Inc.*(a) 3,772,572
------------
29,884,403
- ------------------------------------------------------------------------------------------
INTERNET--MEDIA CONTENT 37.3%
18,000 Baidu.com, Inc.--ADR*+ 1,920,600
203,000 CNET Networks, Inc.*(a) 1,782,340
</Table>
The accompanying notes are an integral part of these financial statements.
4
JACOB INTERNET FUND
SCHEDULE OF INVESTMENTS
FEBRUARY 28, 2007 (UNAUDITED)
- --------------------------------------------------------------------------------
<Table>
<Caption>
SHARES VALUE
------ -----
COMMON STOCKS--(CONTINUED) 87.8%
----------------------------------------------------------------------------
INTERNET--MEDIA CONTENT--(CONTINUED) 37.3%
28,000 Electronic Arts Inc.* $ 1,411,760
12,000 Google Inc.*(a) 5,393,400
761,200 Hollywood Media Corp.* 3,387,340
148,790 InfoSpace, Inc.*(a) 3,392,412
117,255 Jupitermedia Corporation*(a) 1,003,703
1,473 Move, Inc.* 8,794
120,000 News Corporation--Class A(a) 2,703,600
78,500 SINA Corp*+(a) 2,710,605
227,500 Sohu.com Inc.*+ 5,246,150
149,368 Take-Two Interactive Software, Inc.*(a) 2,658,750
600,000 Tencent Holdings Limited (HK)*+ 2,063,996
108,449 TheStreet.com 1,209,206
58,143 THQ Inc.*(a) 1,872,786
164,274 Yahoo! Inc.*(a) 5,069,496
------------
41,834,938
------------
TOTAL COMMON STOCKS (COST $85,262,780) 98,520,106
------------
<Caption>
PRINCIPAL
AMOUNT
------
SHORT TERM INVESTMENTS 12.6%
- ------------------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS 11.8%
$13,217,000 Federal Home Loan Bank, 4.99%, 03/01/07 13,217,000
------------
Total U.S. Government Agency Obligations 13,217,000
------------
VARIABLE RATE DEMAND NOTES # 0.8%
639,215 American Family Financial Services, 4.93% 639,215
265,898 Wisconsin Corporate Central Credit Union,
4.99% 265,898
------------
Total Variable Rate Demand Notes 905,113
------------
TOTAL SHORT TERM INVESTMENTS (COST
$14,122,113) 14,122,113
------------
</Table>
The accompanying notes are an integral part of these financial statements.
5
JACOB INTERNET FUND
SCHEDULE OF INVESTMENTS
FEBRUARY 28, 2007 (UNAUDITED)
- --------------------------------------------------------------------------------
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
------ -----
INVESTMENTS PURCHASED WITH CASH PROCEEDS
FROM SECURITIES LENDING 36.6%
- ------------------------------------------------------------------------------------------
COMMERCIAL PAPER 12.4%
$ 700,000 Concord Minutemen Capital Co., 5.30%, Due
03/13/07 $ 700,000
1,000,000 Concord Minutemen Capital Co., 5.30%, Due
03/15/07 1,000,000
500,000 Duke Funding, 5.30%, Due 03/21/07 497,947
1,500,000 Duke Funding, 5.31%, Due 03/14/07 1,493,387
1,000,000 Fenway Funding LLC, 5.34%, Due 03/01/07 999,852
1,500,000 KKR Atlantic Funding, 5.32%, Due 03/23/07 1,493,817
1,000,000 Laguna ABS Ltd., 5.37%, Due 05/31/07 981,701
2,000,000 Ocala Funding LLC, 5.32%, Due 03/28/07 1,991,167
2,000,000 RAMS Funding, 5.32%, Due 03/27/07 1,991,756
1,000,000 Thornburg Mortgage Capital, 5.31%, Due
03/14/07 996,032
1,838,000 Valcour Bay Capital Co. LLC, 5.33%, Due
03/22/07 1,830,409
------------
Total Commercial Paper 13,976,068
------------
<Caption>
SHARES
------
- ------------------------------------------------------------------------------------------
MONEY MARKET MUTUAL FUNDS 0.2%
186,953 AIM Short-Term Liquid Assets
Portfolio--Institutional Class 186,953
------------
Total Money Market Mutual Funds 186,953
------------
</Table>
The accompanying notes are an integral part of these financial statements.
6
JACOB INTERNET FUND
SCHEDULE OF INVESTMENTS
FEBRUARY 28, 2007 (UNAUDITED)
- --------------------------------------------------------------------------------
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
------ -----
INVESTMENTS PURCHASED WITH CASH PROCEEDS FROM
SECURITIES LENDING--(CONTINUED)
----------------------------------------------------------------------------
36.6%
REPURCHASE AGREEMENTS 24.0%
$ 4,000,000 Credit Suisse, 5.36%, Dated 02/28/07, Due
03/01/07, (Collateralized by an IndyMac
Index Mortgage Loan Trust Collateralized
Mortgage Obligation. Repurchase Proceeds are
$4,000,596.) $ 4,000,000
4,900,000 Merrill Lynch, 5.32%, Dated 02/28/07, Due
03/01/07, (Collateralized by a U.S.
Government Agency Collateralized Mortgage
Obligation. Repurchase Proceeds are
$4,900,724.) 4,900,000
18,000,000 Morgan Stanley, 5.36%, Dated 02/28/07, Due
03/01/07, (Collateralized by Fannie Mae
Collateralized Mortgage Obligations.
Repurchase Proceeds are $18,002,680.) 18,000,000
------------
Total Repurchase Agreements 26,900,000
------------
TOTAL INVESTMENTS PURCHASED WITH CASH
PROCEEDS FROM SECURITIES LENDING (COST
$41,063,021) 41,063,021
------------
TOTAL INVESTMENTS (COST $140,447,914) 137.0% 153,705,240
LIABILITIES LESS OTHER ASSETS (37.0)% (41,520,785)
------------
TOTAL NET ASSETS 100.0% $112,184,455
============
</Table>
* Non Income Producing.
+ Foreign Security.
ADR American Depository Receipt.
(a) All or portion of shares are on loan.
HK Security denominated in Hong Kong dollars. Value translated into U.S.
dollars.
# Variable rate demand notes are considered short-term obligations and are
payable upon demand. Interest rates change periodically on specified
dates. The rates listed are as of February 28, 2007.
The accompanying notes are an integral part of these financial statements.
7
JACOB INTERNET FUND
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 28, 2007 (UNAUDITED)
- --------------------------------------------------------------------------------
<Table>
ASSETS:
Investments, at value (cost $113,547,914) $ 126,805,240
Repurchase Agreements (cost $26,900,000) 26,900,000
Cash 15,322
Receivable for capital shares sold 392,393
Interest receivable 2,921
Other assets 40,745
-------------
Total Assets 154,156,621
-------------
LIABILITIES:
Payable for collateral received for securities loaned 41,063,021
Payable to Adviser 109,103
Payable for distribution expenses 43,484
Payable for capital shares repurchased 542,237
Accrued expenses and other liabilities 214,321
-------------
Total Liabilities 41,972,166
-------------
NET ASSETS $ 112,184,455
=============
NET ASSETS CONSIST OF:
Capital Stock $ 235,443,142
Accumulated net realized loss on investments (136,516,013)
Net unrealized appreciation on investments 13,257,326
-------------
Total Net Assets $ 112,184,455
=============
Shares outstanding (20 billion shares of $0.001 par value
authorized) 39,798,145
-------------
Net asset value, redemption price and offering price per share $ 2.82
=============
</Table>
The accompanying notes are an integral part of these financial statements.
8
JACOB INTERNET FUND
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED FEBRUARY 28, 2007 (UNAUDITED)
- --------------------------------------------------------------------------------
<Table>
INVESTMENT INCOME
Dividend income $ 10,223
Interest income 200,920
Securities lending income 9,584
-----------
Total Investment Income 220,727
-----------
EXPENSES
Investment advisory fee 579,861
Distribution expenses 162,361
Administration fee 39,944
Shareholder servicing and accounting costs 136,096
Custody fees 15,600
Federal and state registration 22,679
Professional fees 47,202
Reports to shareholders 30,925
Directors' fees and expenses 55,038
Other 15,745
-----------
Total Expenses 1,105,451
Expense Waiver (See Note 7) (46,389)
-----------
Net expenses 1,059,062
-----------
NET INVESTMENT LOSS (838,335)
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments 5,106,970
Change in net unrealized appreciation/depreciation on
investments 8,313,641
-----------
Net realized and unrealized gain on investments 13,420,611
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $12,582,276
===========
</Table>
The accompanying notes are an integral part of these financial statements.
9
JACOB INTERNET FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<Table>
<Caption>
SIX MONTHS
ENDED YEAR ENDED
FEBRUARY 28, 2007 AUGUST 31, 2006
----------------- ---------------
(UNAUDITED)
OPERATIONS:
Net investment loss $ (838,335) $ (1,414,729)
Net realized gain on investments 5,106,970 13,686,206
Change in net unrealized appreciation/depreciation
on investments 8,313,641 (2,315,218)
------------ ------------
Net increase in net assets resulting from
operations 12,582,276 9,956,259
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (1,145,833) --
------------ ------------
CAPITAL SHARE TRANSACTIONS: (NOTE 3)
Proceeds from shares sold 42,737,437 77,510,722
Proceeds from reinvestment of distribution 1,074,155 --
Cost of shares redeemed (16,180,999) (80,241,480)
Redemption fees 11,056 60,847
------------ ------------
Net increase/decrease in net assets resulting
from capital share transactions 27,641,649 (2,669,911)
------------ ------------
NET INCREASE IN NET ASSETS 39,078,092 7,286,348
NET ASSETS:
Beginning of period 73,106,363 65,820,015
------------ ------------
End of period $112,184,455 $ 73,106,363
============ ============
</Table>
The accompanying notes are an integral part of these financial statements.
10
JACOB INTERNET FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<Table>
<Caption>
SIX MONTHS ENDED
FEBRUARY 28, 2007 YEAR ENDED YEAR ENDED
(UNAUDITED) AUGUST 31, 2006 AUGUST 31, 2005
----------- --------------- ---------------
PER SHARE DATA:
Net asset value, beginning
of period $ 2.47 $ 2.06 $ 1.51
------------ ----------- -----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment loss (0.02)(1) (0.03) (0.05)(1)
Net realized and
unrealized gains
(losses) on
investments 0.40 0.44 0.60
------------ ----------- -----------
Total from investment
operations 0.38 0.41 0.55
------------ ----------- -----------
Less distributions from
net investment income (0.03) -- --
------------ ----------- -----------
Redemption fees 0.00(2) 0.00(2) 0.00(2)
------------ ----------- -----------
Net asset value, end of
period $ 2.82 $ 2.47 $ 2.06
============ =========== ===========
Total return 15.57%(5) 19.90% 36.42%
SUPPLEMENTAL DATA AND
RATIOS:
Net assets, end of period $112,184,455 $73,106,363 $65,820,015
Ratio of gross operating
expenses (prior to
waiver or
reimbursements) to
average net assets 2.38%(6) 2.42% 2.64%
Ratio of net operating
expenses (after waiver
or reimbursements) to
average net assets 2.28%(4)(6) 2.35%(4) 2.64%
Ratio of net investment
loss (prior to waiver or
reimbursements) to average
net assets (1.91)%(6) (1.65)% (2.29)%
Ratio of net investment
loss (after waiver or
reimbursements) to average
net assets (1.81)%(6) (1.58)%(4) (2.29)%
Portfolio turnover rate 23.50%(5) 125.99% 127.13%
<Caption>
YEAR ENDED YEAR ENDED YEAR ENDED
AUGUST 31, 2004 AUGUST 31, 2003 AUGUST 31, 2002
--------------- --------------- ---------------
PER SHARE DATA:
Net asset value, beginning
of period $ 1.48 $ 0.60 $ 0.83
----------- ----------- -----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment loss (0.05)(1) (0.01)(1) (0.04)(1)
Net realized and
unrealized gains
(losses) on
investments 0.08 0.89 (0.19)
----------- ----------- -----------
Total from investment
operations 0.03 0.88 (0.23)
----------- ----------- -----------
Less distributions from
net investment income -- -- --
----------- ----------- -----------
Redemption fees -- -- --
----------- ----------- -----------
Net asset value, end of
period $ 1.51 $ 1.48 $ 0.60
=========== =========== ===========
Total return 2.03% 146.67% (27.71)%
SUPPLEMENTAL DATA AND
RATIOS:
Net assets, end of period $51,485,471 $92,507,052 $12,091,297
Ratio of gross operating
expenses (prior to
waiver or
reimbursements) to
average net assets 2.63% 2.85%(3) 5.29%(3)
Ratio of net operating
expenses (after waiver
or reimbursements) to
average net assets 2.63% 2.13%(3) 4.60%(3)
Ratio of net investment
loss (prior to waiver or
reimbursements) to average
net assets (2.44)% (2.60)%(3) (5.06)%(3)
Ratio of net investment
loss (after waiver or
reimbursements) to average
net assets (2.44)% (1.88)%(3) (4.37)%(3)
Portfolio turnover rate 154.63% 363.27% 1,080.63%
</Table>
- -------
(1) Net investment loss per share is calculated using ending balances prior to
consideration of adjustments for permanent book and tax differences.
(2) Less than $0.01 per share.
(3) The net operating expense ratio and the net investment loss ratio includes
expense reductions from fees paid indirectly with brokerage commissions.
(4) Reflects Adviser's waiver of 0.10% of the shareholder servicing fee
beginning December 29, 2005.
(5) Not annualized.
(6) Annualized.
The accompanying notes are an integral part of these financial statements.
11
JACOB INTERNET FUND
NOTES TO THE FINANCIAL STATEMENTS
FEBRUARY 28, 2007 (UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 1--DESCRIPTION OF FUND
Jacob Internet Fund Inc. (the "Corporation"), was organized as a Maryland
corporation on July 13, 1999 and is registered under the Investment Company Act
of 1940, as amended (the "1940 Act"), as an open-end management investment
company issuing its shares in series. The Corporation currently consists of one
"diversified" series, the Jacob Internet Fund (the "Fund") and the authorized
capital stock of the Fund consists of twenty billion shares of stock having a
par value of one-tenth of one cent ($0.001) per share. The primary investment
objective of the Fund is long-term growth of capital with current income as a
secondary objective. The Fund commenced operations on December 14, 1999.
NOTE 2--SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund.
(a) Investment Valuation -- Investment securities traded on a national
securities exchange are valued at their market value determined by their
last sales price in the principal market in which these securities are
normally traded (except those traded on the NASDAQ National Market and
Capital Market exchanges which are valued at the NASDAQ Official Closing
Price ("NOCP")), unless there are no transactions on the valuation date, in
which case they are valued at the mean between the closing bid and ask
prices. Securities traded over-the-counter are valued at the last reported
sales price unless there is no reported sales price, in which case the mean
between the closing bid and ask prices is used. Foreign securities,
currencies and other assets denominated in foreign currencies are
translated into U.S. dollars at the exchange rate of such currencies.
Foreign equity securities are valued at the last sale price at the close of
the exchange on which the security is principally traded. Debt securities
with maturities of sixty days or less are valued at amortized cost, which
approximates market value. Where market quotations are not readily
available, are unreliable or whose values have been materially affected by
events occurring before the close of U.S. markets but after the close of
the securities' primary markets, securities are valued at fair value using
procedures approved by the Board of Directors that are designed to
determine a security's fair value.
In September 2006, the Financial Accounting Standards Board ("FASB") issued
a Statement of Financial Accounting Standards ("SFAS") No. 157, "Fair Value
Measurements." SFAS No. 157 defines fair value, establishes a framework for
measuring fair value in accordance with GAAP and expands disclosure about
fair value measurements. SFAS No. 157 is effective for financial statements
issued for fiscal years beginning after November 15, 2007. Management is
currently evaluating the impact of the adoption of SFAS No. 157 on its
financial statements.
(b) Income Recognition--Interest income is accrued as earned. Dividend
income is recorded on the ex-dividend date. All discounts and premiums are
amortized using the effective interest method for tax and financial
reporting purposes.
12
JACOB INTERNET FUND
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FEBRUARY 28, 2007 (UNAUDITED)
- --------------------------------------------------------------------------------
(c) Securities Transactions--Security transactions are accounted for on
trade date. Realized gains and losses on securities sold are determined
using specific identification.
(d) Foreign Currency Transactions--The books and records are maintained in
U.S. dollars. Foreign currency denominated transactions (i.e. market value
of investment securities, assets and liabilities, purchases and sales of
investment securities, and income and expenses) are translated into U.S.
dollars at the current rate of exchange.
The Fund does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss
from investments.
(e) Distributions to Shareholders--The Fund records distributions to
shareholders on the ex-dividend date. Dividends from net investment income,
if any, are declared and paid annually. Distributions of net realized
capital gains, if any, will be declared and distributed at least annually.
The amounts of distributions from net investment income and net realized
capital gains are determined in accordance with federal income tax
regulations, which may differ from those amounts determined under U.S.
generally accepted accounting principles. These book/tax differences are
either temporary or permanent in nature. To the extent these differences
are permanent, reclassifications are made in the capital accounts in the
period that the differences arise. The reclassifications have no effect on
net assets or net asset value per share.
(f) Federal Income Taxes--The Fund complies with provisions of the Internal
Revenue Code applicable to regulated investment companies, including the
distribution of substantially all of the Fund's taxable income.
Accordingly, no provision for federal income taxes is considered necessary
in the financial statements.
(g) Use of Estimates--The preparation of financial statements in conformity
with accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the reported
amount of assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
(h) Repurchase Agreements--The Fund may enter into repurchase agreements
with member banks of the Federal Reserve System and with broker-dealers who
are recognized as primary dealers in U.S. government securities by the
Federal Reserve Bank of New York. Repurchase agreements involve an
agreement to purchase a security and to sell that security back to the
original seller at an agreed-upon price and an agreed-upon time. Because
the security purchased constitutes collateral for the repurchase
obligation, a repurchase agreement may be considered a loan that is
collateralized by the security purchased. Although the securities subject
to the repurchase agreement might bear maturities exceeding one year,
settlement for the repurchase would never be more than 397 days after the
Fund's acquisition of the securities and normally would be within a shorter
period of time. The resale price of the
13
JACOB INTERNET FUND
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FEBRUARY 28, 2007 (UNAUDITED)
- --------------------------------------------------------------------------------
security back to the original seller will be in excess of the purchase
price, reflecting an agreed upon market rate effective for the period of
time the Fund's money will be invested in the security, and will not be
related to the coupon rate of the purchased security. In the event that the
repurchase agreement is held for more than one day, the security serving as
collateral for the repurchase agreement will be marked-to-market daily to
ensure that the value of the collateral does not decrease below the
purchase price, plus accrued interest. If a decrease occurs, the seller
will provide additional collateral to add to the account to maintain
appropriate collateralization.
The use of repurchase agreements involves certain risks. One risk is the
seller's ability to pay the agreed upon repurchase price on the repurchase
date. If the seller defaults, the Fund may incur costs in disposing of the
collateral, which would reduced the amount realized thereon. If the seller
seeks relief under the bankruptcy laws, the disposition of the collateral
may be delayed or limited. Delays may result in possible decline in the
value of the underlying security while the Fund seeks its rights thereto,
possible lack of access to income on the underlying security during the
delayed period, and expenses in enforcing the Fund's rights.
(i) Uncertain Tax Positions--On July 13, 2006, FASB released FASB
Interpretation No. 48 ("FIN 48") "Accounting for Uncertainty in Income
Taxes". FIN 48 provides guidance for how uncertain tax positions should be
recognized, measured, presented and disclosed in the financial statements.
FIN 48 requires the evaluation of tax positions taken or expected to be
taken in the course of preparing the Fund's tax returns to determine
whether the tax positions are "more-likely-than-not" of being sustained by
the applicable tax authority. Tax positions not deemed to meet the more-
likely-than-not threshold would be recorded as a tax benefit or expense in
the current year. Adoption of FIN 48 is as of the date of the last NAV
calculation in the first required financial statement reporting period
required for fiscal years beginning after December 15, 2006 and is to be
applied to all open tax years as of the effective date. On December 22,
2006, the SEC granted a six-month delay in the required implementation of
FIN 48 for mutual funds. At this time, management is evaluating the
implications of FIN 48, and the impact of this standard on the Fund's
financial statements has not yet been determined.
14
JACOB INTERNET FUND
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FEBRUARY 28, 2007 (UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 3--CAPITAL SHARE TRANSACTIONS
At February 28, 2007, there were twenty billion shares, $0.001 par value,
authorized. Transactions in shares of the Fund were as follows:
<Table>
<Caption>
SIX MONTHS ENDED
FEBRUARY 28, 2007
------------------------
SHARES AMOUNT
------ ------
Sales 15,726,687 $ 42,737,437
Reinvestments 396,367 1,074,155
Redemption (5,982,187) (16,180,999)
Redemption Fees -- 11,056
---------- ------------
Net Increase 10,140,867 $ 27,641,649
---------- ============
SHARES OUTSTANDING:
Beginning of period 29,657,278
----------
End of period 39,798,145
==========
</Table>
<Table>
<Caption>
YEAR ENDED
AUGUST 31, 2006
-------------------------
SHARES AMOUNT
------ ------
Sales 31,346,094 $ 77,510,722
Redemptions (33,588,162) (80,241,480)
Redemption Fees -- 60,847
----------- ------------
Net Decrease (2,242,068) $ (2,669,911)
----------- ============
SHARES OUTSTANDING:
Beginning of period 31,899,346
-----------
End of period 29,657,278
===========
</Table>
NOTE 4--INVESTMENT TRANSACTIONS
During the six months ended February 28, 2007, purchases and sales of investment
securities (excluding short-term investments) were $32,924,633 and $20,098,015,
respectively. The Fund did not purchase U.S. Government securities as a part of
its investment strategy during the six months ended February 28, 2007.
15
JACOB INTERNET FUND
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FEBRUARY 28, 2007 (UNAUDITED)
- --------------------------------------------------------------------------------
At August 31, 2006, the components of accumulated earnings/(losses) on a tax
basis were as follows:
<Table>
Cost of Investments $ 102,513,292
=============
Gross unrealized appreciation 9,920,767
Gross unrealized depreciation (8,054,723)
-------------
Net unrealized appreciation $ 1,866,044
=============
Undistributed ordinary income 1,145,838
Undistributed long-term capital gain --
-------------
Total distributable earnings $ 1,145,838
=============
Other accumulated losses $(140,690,905)
-------------
Total accumulated losses $(137,679,023)
=============
</Table>
At August 31, 2006, the Fund had an accumulated net realized capital loss
carryover of $140,669,840, of which $50,793,480 expires in 2009, and $89,876,360
expires in 2010. To the extent the Fund realizes future net capital gains,
taxable distributions to its shareholders will be offset by any unused capital
loss carryover. For the year ended August 31, 2006 the Fund utilized $12,808,000
in capital loss carryover. At August 31, 2006, the Fund had net realized losses
from transactions between November 1, 2005 and August 31, 2006 of $21,065, which
is deferred for tax purposes and will be recognized on September 1, 2006.
The Fund paid $1,145,833 out of ordinary income during the six months ended
February 28, 2007 and paid no distributions during the fiscal year ended August
31, 2006.
NOTE 5--INVESTMENT ADVISORY AND OTHER AGREEMENTS
The Corporation has an Investment Advisory Agreement (the "Advisory Agreement")
with Jacob Asset Management of New York LLC (the "Adviser"), with whom certain
officers and Directors of the Board are affiliated, to furnish investment
advisory services to the Fund. Under the terms of the Advisory Agreement, the
Corporation, on behalf of the Fund, compensates the Adviser for its management
services based on an annual rate of 1.25% of the Fund's average daily net
assets.
U.S. Bancorp Fund Services, LLC serves as transfer agent, administrator and
accounting services agent for the Fund. U.S. Bank, N.A. serves as custodian for
the Fund. U.S. Bancorp Asset Management serves as the securities lending agent.
NOTE 6--SECURITIES LENDING
The Fund may lend portfolio securities up to 33% of its total assets (including
such loans) to borrowers under terms of participation in a securities lending
program administered by U.S. Bancorp Asset Management. The
16
JACOB INTERNET FUND
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FEBRUARY 28, 2007 (UNAUDITED)
- --------------------------------------------------------------------------------
Agreement requires that loans are collateralized at all times in an amount equal
to at least 102% of the market value of any loaned securities at the time of the
loan, plus accrued interest.
The Fund receives compensation in the form of fees and earns interest on the
cash collateral. The amount of fees depends on a number of factors including the
types of security, length of the loan and credit standing of the borrower. The
Fund continues to receive interest or dividends on the securities loaned during
the borrowing period. The Fund has the right under the terms of the securities
lending agreement to recover the securities from the borrower on demand. U.S.
Bancorp Asset Management received $19,422 from the Fund for its securities
lending administrative services during the six months ended February 28, 2007.
As of February 28, 2007, the Fund had loaned securities that were collateralized
by cash equivalents. The cash collateral is invested by the custodian with the
approval of the Adviser. Although risk is mitigated by the collateral, the Fund
could experience a delay in recovering its securities and possible loss of
income or value if the borrower fails to return the borrowed securities. As of
February 28, 2007, the value of the Fund's securities on loan was $38,540,323
and the value of the related collateral was $41,063,021.
NOTE 7--DISTRIBUTION AND SERVICE PLAN
The Corporation, on behalf of the Fund, has adopted a distribution and service
plan (the "Plan"), pursuant to Rule 12b-1 under the 1940 Act. The Plan provides
that the Fund will compensate the Adviser up to 0.25% per annum of the Fund's
average daily net assets for certain expenses and costs incurred in connection
with providing shareholder servicing and maintaining shareholder accounts and to
compensate parties with which it has written agreements and whose clients own
shares of the Fund for providing servicing to their clients ("Shareholder
Servicing Fee"). Effective December 31, 2006, the Adviser has contractually
agreed to waive 0.10% of the Shareholder Servicing Fee through December 31,
2007. For the six months ended February 28, 2007, expenses of $46,389 were
waived by the Adviser. The Plan also provides for a distribution fee equal to
0.10% of the Fund's average daily net assets on an annual basis ("Asset Based
Sales Charge"). The fee is used to compensate Quasar Distributors, LLC, the
Fund's distributor (the "Distributor") for basic distribution services, out of
pocket expenses incurred in connection with activities to sell Fund shares,
advertising, compliance reviews, and licensing of the Adviser's staff. The
Distributor may make payments from time to time from the Asset Based Sales
Charge to broker-dealers and other financial professionals whose clients are
Fund shareholders for providing distribution assistance and promotional support
to the Fund. Remaining amounts of the Asset Based Sales Charge may be used to
satisfy distribution costs as directed by the Adviser. The Fund incurred
$162,361 in expenses pursuant to the 12b-1 Plan for the six months ended
February 28, 2007. At February 28, 2007, $43,484 of the Shareholder Servicing
Fee was available for eligible 12b-1 expenses.
17
JACOB INTERNET FUND
ADDITIONAL INFORMATION ON FUND EXPENSES
- --------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FEBRUARY 28, 2007
As a shareholder of a mutual fund, you may incur two types of costs: (1)
transaction costs, including sales charges (loads) on purchase payments,
reinvested dividends, or other distributions; redemption fees; and exchange
fees; and (2) ongoing costs, including management fees; distribution and/or
service (12b-1) fees; and other fund expenses. The Fund does not currently
charge sales charges (loads) or exchange fees. The Fund assesses a redemption
fee of 2% on shares sold within 30 days following their purchase date. In
addition, you will be assessed fees for outgoing wire transfers, returned checks
and stop payment orders. The Fund charges management fees and distribution
and/or service (12b-1) fees. The Example reflects the 0.10% waiver of
distribution and/or service (12b-1) fees by the Adviser for the period from
9/1/06-2/28/07. The Expense Example is intended to help you understand your
ongoing costs (in dollars) of investing in the Fund and to compare these costs
with the ongoing costs of investing in other mutual funds. The Example is based
on an investment of $1,000 invested at the beginning of the period and held for
the entire period (9/1/06-2/28/07).
ACTUAL EXPENSES
The first line of the table below provides information about account values
based on actual returns and actual expenses. Although the Fund charges no sales
load, the Fund charges a redemption fee of 2% on shares sold within 30 days
following the purchase date. In addition, you will be assessed fees for outgoing
wire transfers, returned checks and stop payment orders at prevailing rates
charged by U.S. Bancorp Fund Services, LLC, the Fund's transfer agent. If you
request that a redemption be made by wire transfer, currently the Fund's
transfer agent charges a $15.00 fee. The Example does not reflect transactional
costs, such as redemption fees. You may use the information in the first line
below, together with the amount you invested, to estimate the expenses that you
paid over the period. Simply divide your account value by $1,000 (for example,
an $8,600 account value divided by $1,000 = 8.6), then multiply the result by
the number in the first line under the heading entitled "Expenses Paid During
the Period" to estimate the expenses you paid on your account during this
period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values based on a hypothetical return and hypothetical expenses based on
the Fund's actual expense ratio and an assumed rate of return of 5% per year
before expenses, which is not the Fund's actual return. The hypothetical account
values and expenses may not be used to estimate the actual ending account
balance or expenses you paid for the period. You may use this information to
compare the ongoing costs of investing in the Fund and other funds. To do so,
compare this 5% hypothetical example with the 5% hypothetical examples that
appear in the shareholder reports of the other funds. Please note that the
expenses shown in the table are meant to highlight your ongoing costs only and
do not reflect transactional costs, such as redemption fees. Therefore, the
second line of the table is useful in comparing ongoing costs only, and will not
help you determine the relative total costs of owning different funds. In
addition, if the transactional costs were included, your costs would have been
higher.
18
JACOB INTERNET FUND
ADDITIONAL INFORMATION ON FUND EXPENSES (CONTINUED)
- --------------------------------------------------------------------------------
<Table>
<Caption>
EXPENSES PAID
BEGINNING ACCOUNT ENDING ACCOUNT DURING THE PERIOD
VALUE 9/1/06 VALUE 2/28/07 9/1/06-2/28/07
----------------- -------------- -----------------
Actual $1,000.00 $1,155.70 $12.19
Hypothetical (5% annual return before $1,000.00 $1,013.49 $11.38
expenses)
</Table>
- --------
* Expenses are equal to the Fund's annualized expense ratio of 2.28%
multiplied by the average account value over the period multiplied by
181/365 (to reflect the one-half year period).
PROXY VOTING
A description of the policies and procedures that the Fund uses to determine how
to vote proxies relating to portfolio securities is available by calling toll-
free 1-888-Jacob-fx (522-6239) or on the SEC website at http://www.sec.gov.
PROXY VOTING RECORD
Information regarding how the Fund voted proxies relating to portfolio
securities during the most recent 12-month period ended June 30 is available
without charge by calling 1-888-Jacob-fx (522-6239) or on the SEC website at
http://www.sec.gov.
19
JACOB INTERNET FUND
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
APPROVAL OF THE INVESTMENT ADVISORY AGREEMENT
At an in-person meeting held October 20, 2006, the Board, including each of the
independent Directors, approved the renewal of the Advisory Agreement. In
reaching this decision, the Board took into account a combination of factors,
including the nature and quality of services provided by the Adviser, the Fund's
performance, and Fund expenses. The Board did not identify any single factor as
all-important or controlling, and this summary does not detail all the matters
considered.
In evaluating the Fund's performance, the Board discussed the Fund's performance
relative to the peers to which the Fund had been comparing itself at each Board
meeting for the past several years. The independent Directors noted that in the
past three years, the Fund had consistently outperformed those peers. The Board
also discussed the longer-term performance of the Fund, noting that for the
five-year period ending September 30, 2006 the Fund had above average
performance relative to its Morningstar peers. The independent Directors
continued to note the adaptation of the Adviser's investment strategy with
changing market conditions in addition to the overall improvement of the
Adviser's investment process. The Board also considered the Adviser's quarterly
commentary at the Board meetings and intermittent updates, which confirmed a
disciplined application of the investment process and the Adviser's adherence to
the objectives of the Fund.
The independent Directors then reviewed and compared expenses of the Fund to
expenses within the Lipper category of Science and Technology Funds, as well as
to the expenses of the individual funds within the Fund's peer group. They noted
that while the Fund's investment advisory fee was somewhat higher than these
Lipper peers, the fee was reasonable relative to the Adviser's expertise in the
Internet sector and the Fund's performance compared to other funds within the
Internet sector. The independent Directors also reviewed and considered
information presented at the meeting regarding the total expense ratio of the
Fund relative to peer mutual funds. They noted that the Fund's expenses were
within a reasonable range and that the total expense ratio for the Fund declined
over the last fiscal year and was now in the third quartile. The Board next
discussed inherent advantages of some of the peers that were part of large fund
families and the economies of scale that were afforded to those funds.
The Board also reviewed the Adviser's profitability, including gross fees paid
to the Adviser for investment advisory services to the Fund and profit
participation of the Adviser's partners. Based on the Adviser's profitability,
the Board accepted that the Adviser was not experiencing economies of scale at
the Fund's current asset levels. The Board and the Adviser discussed the
Adviser's financial statements. The Board considered the Adviser's contractual
waiver of ten basis points of the Shareholder Servicing Fee to reduce
shareholder expenses. The Board also discussed the possibility of fee
breakpoints and the Adviser was agreeable to fee breakpoints if economies of
scale were achieved.
The Board reviewed and considered the nature and quality of the services
provided to the Fund. The Board noted that they believed that the investment
team was experienced and capable of producing above average investment returns.
They also noted that they believed that the investment team was one of the most-
experienced with respect to the Internet sector and that the Fund and its
shareholders had benefited from the attention and expertise of these
individuals. The independent Directors also considered the other services to
20
JACOB INTERNET FUND
ADDITIONAL INFORMATION (CONTINUED)
- --------------------------------------------------------------------------------
the Fund provided by the Adviser including the compliance functions through the
Chief Compliance Officer and the oversight of the Fund's service providers. They
also noted that the Adviser performs much of the marketing functions for the
Fund and shareholder service.
In considering such material, the independent Board members received assistance
and advice from and met separately with independent counsel. Based upon its
review of such material and information together with such other information as
it deemed relevant, the Board, including a majority of independent Directors,
concluded that the fee payable under the Advisory Agreement was reasonable and
that continuance of the Advisory Agreement was appropriate and in the best
interest of Fund shareholders.
21
INVESTMENT ADVISOR
Jacob Asset Management of New York LLC
ADMINISTRATOR AND TRANSFER AGENT
AND DIVIDEND AGENT
U.S. Bancorp Fund Services, LLC
UNDERWRITER AND DISTRIBUTOR
Quasar Distributors, LLC
CUSTODIAN
U.S. Bank, N.A.
INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
Deloitte & Touche LLP
This report has been prepared for the information of shareholders of the
Jacob Internet Fund and is not authorized for distribution to
prospective investors unless preceded or accompanied by an effective
prospectus that includes information regarding the Fund's objectives,
policies, management, records and other information.
JACOB ASSET MANAGEMENT OF NEW YORK LLC
1-888-JACOB-FX (522-6239)
WWW.JACOBINTERNET.COM
JACOB INTERNET
FUND INC.
SEMI-ANNUAL
REPORT
---------------
February 28, 2007
(JACOB INTERNET FUND LOGO)
ITEM 2. CODE OF ETHICS.
Not applicable for semi-annual reports.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable for semi-annual reports.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable for semi-annual reports.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to registrants who are not listed issuers (as defined in Rule
10A-3 under the Securities Exchange Act of 1934).
ITEM 6. SCHEDULE OF INVESTMENTS.
The Schedule of Investments is included as part of the report to shareholders
filed under Item 1 of this Form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable to open-end investment companies.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable to open-end investment companies.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable to open-end investment companies.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not Applicable.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer/President and principal
financial officer/Treasurer have reviewed the registrant's disclosure
controls and procedures (as defined in Rule 30a-3(c) under the Investment
Company Act of 1940 (the "Act")) as of a date within 90 days of the filing
of this report, as required by Rule 30a-3(b) under the Act and Rules
13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934. Based on
their review, such officers have concluded that the disclosure controls and
procedures are effective in ensuring that information required to be
disclosed in this report is appropriately recorded, processed, summarized
and reported and made known to them by others within the registrant and by
the registrant's service provider.
(b) There were no changes in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Act) that occurred during
the second fiscal quarter of the period covered by this report that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a) (1) Any code of ethics or amendment thereto, that is subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy Item 2 requirements through filing an exhibit. Not Applicable.
(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of
2002. Filed herewith.
(3) Any written solicitation to purchase securities under Rule 23c-1 under
the Act sent or given during the period covered by the report by or on
behalf of the registrant to 10 or more persons. Not applicable to open-end
investment companies.
(b) Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Furnished herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Jacob Internet Fund Inc.
By (Signature and Title)
/s/ Ryan Jacob
- -------------------------------------
Ryan Jacob, President
Date 5/9/07
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)
/s/ Ryan Jacob
- -------------------------------------
Ryan Jacob, President
Date 5/9/07
By (Signature and Title)
/s/ Francis Alexander
- -------------------------------------
Francis Alexander, Treasurer
Date 5/8/07