UNITED STATES
Securities and Exchange Commission
Washington, DC. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
Post-effective Amendment No. 1
and
THE INVESTMENT COMPANY ACT OF 1940 X
Post-effective Amendment No. 1
The O'Higgins Fund (Exact Name of Registrant as Specified in Charter)
1375 Anthony Wayne Dr, Wayne PA. 19087 (Address of Principal Executive Offices)
610-688-6839 (Registrants Telephone Number)
Bernard B. Klawans 1375 Anthony Wayne Dr Wayne PA. 19087
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of this registration.
It is proposed that this filing will become effective
[x] On June 30, 1998
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Cross Reference Sheet
INFORMATION REQUIRED CAPTIONS IN FILING
Part A: IN A PROSPECTUS
Item 1. Cover Page Cover Page
Item 2. Synopsis Fund Expenses
Item 3. Condensed Financial Information Fund Expenses
Item 4. General Description of Registrant The Fund
Item 5. Management of the Fund Management of the Fund
Item 6. Capital Stock and other Securities Capitalization
Item 7. Purchase of Securities being Offered Share Purchase - Reinvestments
Item 8. Redemption or Repurchase Redemption of Shares
Item 9. Legal Proceedings Litigation
Part B: STATEMENT OF ADDITIONAL INFORMATION
Item 10. Cover Page Cover Page
Item 11. Table of Contents Table of Contents
Item 12. General Information and History The Fund
Item 13. Investment Objectives and Policies Objective and Policies
Item 14. Management of the Registrant Officers & Directors of the Fund
Item 15. Control Persons & Principal Holders Not Applicable
of Securities
Item 16. Investment Advisory and Other Ser- Investment Adviser
vices
Item 17. Brokerage Allocation Brokerage
Item 18. Capital Stock & Other Securities Capitalization
Item 19. Purchase, Redemption & Pricing of Purchase of Shares
Securities Being Offered
Item 19. Purchase, Redemption & Pricing of Redemption of Shares
Securities Being Offered
Item 19. Purchase, Redemption & Pricing of Pricing of Shares
Securities Being Offered
Item 20. Tax Status Tax Status
Item 21. Underwriters Not Applicable
Item 22. Calculation of Yield Quotations of Not Applicable
Money Market Funds
Item 23. Financial Statements Financial Statements
Part C: OTHER INFORMATION
Item 24. Financial Statements & Exhibits Financial Statements & Exhibits
Item 25. Persons Controlled by/or under Control Persons
Common Control
Item 26. Number of Holders of Securities Number of Shareholders
Item 27. Indemnifications Indemnification
Item 28. Business & Other Connections of Activities of Investment Advisor
Advisor
Item 29 Principal Underwriters Principal Underwriter
Item 30. Location of Accounts & Records Location of Accounts & Records
Item 31. Management Services Not Applicable
Item 32. Undertakings Not Applicable
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PROSPECTUS
The O'HIGGINS FUND
1375 ANTHONY WAYNE DR.
WAYNE, PA. 19087
610-688-6839
800-548-1942
January 30, 1998
THE FUND AND INVESTMENT OBJECTIVES
The O'Higgins Fund (the Fund) is an open-end non-diversified management
investment company that seeks capital appreciation through application of a
proprietary 28 year back-tested asset allocation model. Use of this model
results in almost 100% commitments either to selected securities in the S&P 100
list or a mix of short-term US Treasury Notes and/or long-term US Zero Coupon
Bonds. Current income from investments is a subordinate consideration.
FUND SHARE PURCHASE
Capital shares of the Fund may only be purchased directly from the Fund at net
asset value as next determined after receipt of order. The Board of Directors
has established $1,000 as the minimum initial purchase and $100 for subsequent
purchases.
ADDITIONAL INFORMATION
This Prospectus, which should be held for future reference, is designed to set
forth concisely the information that you should know before you invest. A
"Statement of Additional Information" containing more information about the Fund
has been filed with the Securities and Exchange Commission. Such Statement is
dated January 30, 1998 and has been incorporated by reference into the Prospec-
tus. A copy of the Statement may be obtained without charge, by writing to the
Fund or by calling the telephone numbers shown above.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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FUND EXPENSES
This table illustrates all expenses and fees that a shareholder of The
O'Higgins Fund is expected to incur for the startup year 1998.
Shareholder Transaction Expenses:
Sales Load Imposed on Purchases None
Sales Load Imposed on Reinvested Dividends None
Redemption Fees None
Exchange Fees None
IRA Trustee Fees None
Annualized Fund Operating Expenses:
Management Fees 1.0%
12b-1 Fees None
Other Expenses (Estimated) 0.5%
Total Operating Expenses 1.5%
The following table is given to assist investors in understanding the various
costs and expenses that an investor in the Fund will bear directly and in-
directly. It illustrates the expenses paid on a $1,000 investment over vari-
ous time periods assuming a) 5% annual rate of return and b) redemption at the
end of each time period. This example should not be considered a representa-
tion of future expenses or performance. Actual expenses may be greater or less
than those shown.
1 Year 3 Years 5 Years 10 Years
$15 $48 $84 $189
Note: Operational experience with the Valley Forge Fund suggests that the exp-
ense ratio of 1.5% will not be exceeded. The Fund Adviser may waive
management fees and if this should occur, the Fund will disclose the
amounts involved.
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THE FUND
The O'Higgins Fund, Inc. (also referred to as the "Fund") was incorporated in
Pennsylvania on January 1, 1998. The Fund's registered office is in Wayne, PA.
Mail may be addressed to 1375 Anthony Wayne Dr. Wayne, PA. 19087.
OBJECTIVE AND POLICIES
Objective: The O'Higgins Fund is an open-end non-diversified investment manage-
ment company that seeks capital appreciation through application of a proprie-
tary 28 year back-tested allocation model. Use of this model results in almost
100% investments either to selected securities in the S&P 100 list or a mix of
short-term US Treasury Notes and/or long-term US Zero Coupon Bonds. Current
income from investments is a subordinate consideration.
Risk Assessment: Risks associated with the Fund's performance will be those due
to broad market declines and business risks from difficulties which occur to
particular companies while in the Fund's portfolio or the effect of interest
rates on our debt security holdings. The Fund's approach of either being in
stocks or US Treasury Notes and/or US Zero Coupons could impact total returns or
principal by being in the wrong type of security at the wrong time. Also, the
methodology to be used that has worked well in theory in past markets is untried
in future markets. It therefore must be realized that there is no assurance the
method will approximate past calculated favorable performance.
Security Selection Criteria: Criteria used by the Adviser in purchases of sec-
urities will be based on a previously determined number of the securities in the
Standard and Poors 100 list that had the highest yields the previous year or
short-term US Treasury Bills and/or long-term US Zero Coupon Bonds depending
upon periodic reviews of a publicly available indicator which will be describ-
ed in depth in a forthcoming book by Michael B. O'Higgins, author of "Beating
the Dow." All securities including stocks, US Treasury Notes and/or US Zero
Coupon Bonds will be selected in the pursuit of capital appreciation.
Portfolio Turnover Policy: Portfolio turnover depends upon the indications of
the publicly available indicator we will use. Accordingly, the turnover rate
should not exceed 200% wherein turnover is computed by dividing the lesser of
the Fund's total purchases or sales of securities within the period by the av-
erage monthly portfolio value of the Fund during such period. If this occurs,
brokerage expenses and the effect of capital gains taxes on shareholder divi-
dends could be expected to be higher than those expected from the average mutual
fund with lower turnover.
Non-diversification Policy: The Fund is classified as being non-diversified
which means that it may invest a relatively high percentage of its assets in the
obligations of a limited number of issues. The Fund, therefore, may be more
susceptible than a more widely diversified fund to any single economic, politi-
cal, or regulatory occurrence. The policy of the Fund, in the hope of achiev-
ing its objective as stated above, is, therefore, one of selective investments
rather than broad diversification. The Fund seeks only enough diversification
to maintain its federal non-taxable status under Sub-Chapter M of the Internal
Revenue Code.
INVESTMENT RESTRICTIONS
By-laws of the Fund provide the following fundamental investment restrictions;
The Fund may not, except by the approval of a majority of the outstanding
shares; i.e. A) 67% or more of the voting securities present at a duly called
meeting, if the holders of more than 50% of the outstanding voting securities
are present or represented by proxy, or B) of more than 50% of the outstanding
voting securities, whichever is less:
a) Act as underwriter for securities of other issuers except insofar as the
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Fund may be deemed an underwriter in selling its own portfolio securities.
b) Borrow money or purchase securities on margin, but may obtain such short
term credit as may be necessary for clearance of purchases and sales of se-
curities for temporary or emergency purposes in an amount not exceeding 5%
of the value of its total assets.
c) Sell securities short.
d) Invest in securities of other investment companies except as part of a mer-
ger, consolidation , or purchase of assets approved by the Fund's share-
holders.
e) Invest over 25% of its assets at the time of purchase in any one industry.
f) Make investments in commodities, commodity contracts or real estate although
the Fund may purchase and sell securities of companies which deal in real
estate or interests therein.
g) Make loans. The purchase of a portion of a readily marketable issue of pub-
licly distributed bonds, debentures or other debt securities will not be
considered the making of a loan.
h) Acquire more than 10% of the securities of any class of another issuer,
treating all preferred securities of an issuer as a single class and all
debt securities as a single class, or acquire more than 10% of the voting
securities of another issuer.
i) Invest in companies for the purpose of acquiring control.
j) The Fund may not purchase or retain securities of any issuer if those offi-
cers and directors of the Fund or its Investment Adviser owning individual-
ly more than 1/2 of 1% of any class of security or collectively own more
than 5% of such class of securities of such issuer.
k) Pledge, mortgage or hypothecate any of its assets.
l) Invest in securities which may be subject to registration under the Securi-
ties Act of 1933 prior to sale to the public or which are not at the time of
purchase readily salable.
m) Invest more than 5% of the total Fund assets, taken at market value at the
time of purchase, in securities of companies with less than three years'
continuous operation, including the operations of any predecessor.
n) Issue senior securities.
INVESTMENT ADVISER
The Valley Forge Management Corp. (VFMC) is a Pennsylvania corporation that acts
as an Investment Adviser to the Fund. Mr. Bernard B. Klawans is the sole owner,
director and officer of the Investment Adviser and is also President of the
Fund. He has had over 26 years of day to day operational experience in running
a federally registered mutual fund, the Valley Forge Fund, Inc.
On January 1, 1998 the shareholders of the Fund approved a management and ad-
visory contract with VFMC. This Agreement will continue on a year to year basis
provided that approval is voted on at least annually by specific approval of the
Board of Directors of the Fund or by vote of the holders of a majority of the
outstanding voting securities of the Fund. In either event, it must also be
approved by a majority of Directors of the Fund who are neither parties to the
agreement or interested persons as defined in the Investment Company Act of 1940
at a meeting called for the purpose of voting on such approval.
Under the Agreement, the Valley Forge Management Corp. will furnish investment
direction on the basis of an ongoing review using the new methodology to deter-
mine when and what securities will be purchased or disposed by designated Fund
personnel. The Agreement may be terminated at any time, without payment of pen-
alty, by the Board of Directors or by vote of a majority of the outstanding
voting securities of the Fund on not more than 60 days written notice to the
Valley Forge Management Corp. In the event of its assignment, the Agreement
will terminate automatically. For these services, the Fund has agreed to pay to
the Valley Forge Management Corp. a fee of 1% per year on the net assets of the
Fund. All fees are computed on the average daily closing net asset value of the
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Fund and are payable monthly. This fee is higher than the fee paid most other
funds. Not withstanding, the Investment Adviser may elect to forgo fees during
the first year of operation.
The Investment Adviser is required, by contract, to render research, statistical
and advisory services to the Fund; to make specific recommendations based on the
Fund's investment requirements; and to pay salaries of the Fund's employees who
may be officers or directors or employees of the Investment Adviser. Excepting
these items, the Fund pays all other fees and expenses incurred in conducting
its business affairs. The Investment Adviser paid the initial organizational
costs of the Fund and will reimburse the Fund for any and all losses incurred
because of purchase reneges.
A contract agreement has been agreed upon between the Valley Forge Management
Corp. and the FTC Limited a company wholly owned by Mr. O'Higgins for use of his
methodology to establish and maintain the portfolio. The contract gives FTC
Limited 50% of all management fees paid by the Fund in the form of a royalty and
may be terminated only by mutual agreement of both parties. Neither O'Higgins
nor FTC Limited will be associated with the Fund or the Investment Adviser in
any way except through promotional marketing efforts. He is in the process of
patenting this methodology which will be described in detail in a new book to be
published by the end of 1998.
CAPITALIZATION
Description of Common Stock: The authorized capitalization of the Fund consists
of 100,000,000 shares of common stock of $0.01 par value per share. Each share
has equal dividend, distribution and liquidation rights with no conversion or
pre-emptive rights. All shares issued are fully paid and non-accessible.
Voting Rights: Each shareholder has one vote for each share held. Voting
rights are non-cumulative, which means that holders of a majority of shares can
elect all directors of the Fund if they so choose.
Major Shareholders: Bernard B. Klawans, as of the date of this Prospectus, owns
all outstanding shares of the Fund.
SHARE PURCHASE - REINVESTMENTS
The offering price of the shares offered by the Fund is at the net asset value
per share next determined after receipt of the purchase order by the Fund and is
computed in the manner described under the caption "PRICING OF SHARES" in this
Prospectus. The Fund reserves the right at its sole discretion to terminate the
offering of its shares made by this Prospectus at any time and to reject pur-
chase applications when, in the judgment of management such termination or re-
jection is in the best interests of the Fund.
Initial Investments: Initial purchase of shares of the Fund may be made only by
application submitted to the Fund. For the convenience of investors, a Share
Purchase Application form is provided with this Prospectus. The minimum initial
purchase of shares is $1,000 which is due and payable 3 business days after the
purchase date. The Fund will be registered in Pennsylvania and therefore re-
stricted to Pennsylvania residents at the time of purchase. There will be no
solicitation of out of the state of Pennsylvania potential shareholders until
registration under the Blue Sky laws of the state of residence have been met.
Any losses incurred because of purchase reneges will be reimbursed by the In-
vestment Adviser.
Subsequent Purchases: Subsequent purchases may be made by mail or by phone and
are due and payable three business days after the purchase date. The minimum is
$100. No account will be allowed to exceed $500,000 at the time of purchase.
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Reinvestments: The Fund will automatically retain and reinvest dividends & cap-
ital gains distributions and use same for the purchase of additional shares for
the shareholder at net asset value as of the close of business on the distribu-
tion date. A shareholder may at any time by letter or forms supplied by the
Fund direct the Fund to pay dividends and/or capital gains distributions, if
any, to such shareholders in cash or request any other information they desire
about the Fund either by US mail or by phone.
REDEMPTION OF SHARES
The Fund will redeem all or any part of the shares of any shareholder who ten-
ders a request for redemption (if certificates have not been issued) or certifi-
cates with respect to shares for which certificates have been issued. In either
case, proper endorsements guaranteed either by a national bank or a member firm
of the New York Stock Exchange will be required unless the shareholder is known
to management. The redemption price is the net asset value per share next de-
termined after notice is received by the Fund for redemption of shares. The
proceeds received by the shareholder may be more or less than his cost of such
shares, depending upon the net asset value per share at the time of redemption
and the difference should be treated by the shareholder as a capital gain or
loss for federal income tax purposes.
Payment by the Fund will ordinarily be made within three business days after
tender. The Fund may suspend the right of redemption or postpone the date of
payment if: The New York Stock Exchange is closed for other than customary week-
end or holiday closings, or when trading on the New York Stock Exchange is re-
stricted as determined by the Securities and Exchange Commission or when the
Securities and Exchange Commission has determined that an emergency exists, mak-
ing disposal of fund securities or valuation of net assets not reasonably prac-
ticable. The Fund intends to make payments in cash, however, the Fund reserves
the right to make payments in kind.
PRICING OF SHARES
The net asset value of the Fund's shares is determined as of the close of busi-
ness of the New York Stock Exchange on each business day of which that Exchange
is open (presently 4:00 p.m.) Monday through Friday exclusive of Washington's
Birthday, Good Friday, Memorial Day, July 4th, Labor Day, Thanksgiving, Christ-
mas & New Year's Day. The price is determined by dividing the value of its se-
curities, plus any cash and other assets less all liabilities, excluding capital
surplus, by the number of shares outstanding. The market value of securities
listed on a national exchange is determined to be the last recent sales price on
such exchange. Listed securities that have not recently traded and over-the-
counter securities are valued at the last bid price in such market.
Short term paper (debt obligations that mature in less than 60 days) are valued
at amortized cost which approximates market value. Other assets are valued at
fair value as determined in good faith by the Board of Directors.
fair value as determined in good faith by the Board of Directors.
RETIREMENT PLANS - IRA
People who earn compensation and are not active participants (and who don't have
a spouse who is an active participant) in an employee maintained retirement plan
may establish IRA's using Fund shares. Annual contributions, limited to the
lesser of $2,000 or 100% of compensation, are tax deductible from gross income.
This IRA deduction is also retained for individual taxpayers and married couples
with adjusted gross incomes within certain specified limits. All individuals
may make nondeductible IRA contributions to separate accounts to the extent that
they are not eligible for a deductible contribution.
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<PAGE>
Earnings under the IRA are reinvested and are tax-deferred until withdrawals be-
gin. The maximum annual contribution may be increased to $4,000 if you have a
spouse who earns no compensation during the taxable year. A separate and inde-
pendent Spousal IRA must be maintained.
You may begin to make non-penalty withdrawals as early as age 59 1/2 or as late
as age 70 1/2. In the event of death or disability, withdrawals may be made be-
fore age 59 1/2 without penalty.
A Disclosure Statement is required by U.S. Treasury Regulations. This Statement
describes the general provisions of the IRA and is forwarded to all prospective
IRA's. There is no charge to open and maintain an O'Higgins Fund IRA. This
policy may be changed by the Board of Directors if they deem it to be in the
best interests of all shareholders. All IRA's may be revoked within 7 days of
their establishment with no penalty.
MMANAGEMENT OF THE FUND
Shareholders meet annualy to elect all members of the Board of Directors, se-
lect an independent auditor, and vote on any other items deemed pertinent by the
incumbent Board. The Directors are in turn responsible for determining that the
Fund operates in accordance with its stated objectives, policies, and investment
restrictions. They also appoint officers to run the Fund and select an Invest-
ment Adviser to provide investment advice. The Board meets six times a year to
review Fund progress and status.
CUSTODIAN & TRANSFER AGENT
The Fund acts as its own custodian and transfer agent.
REPORTS TO SHAREHOLDERS
The Fund sends all shareholders annual reports containing certified financial
statements and other periodic reports, at least semi-annually, containing unau-
dited financial statements.
AUDITORS
Landsburg, Platt, Raschiatore & Dalton, Certified Public Accountants, Philadel-
phia, PA. have been selected as the independent accountant and auditor of the
Fund. Landsburg, Platt, Raschiatore and Dalton has no direct or indirect finan-
cial interest in the Fund or the Adviser.
LITIGATION
As of the date of this prospectus, there was no pending or threatened litigation
involving the Fund in any capacity whatsoever.
ADDITIONAL INFORMATION
This Prospectus omits certain information contained in the registration state-
ment on file with the Securities & Exchange Commission. The registration state-
ment may be inspected without charge at the principal office of the Commission
in Washington, D.C. and copies of all or part thereof may be obtained upon pay-
ment of the fee prescribed by the Commission. Shareholders may also direct in-
quiries to the Fund by phone or at the address given on pg 1 of this Prospectus.
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<PAGE>
SHARE PURCHASE APPLICATION
A) Please fill out one of the following four types of accounts:
1) *** Individual Accounts
______________________ __ ___________________ ______________________
First Name MI Last Name Social Security Number
2) *** Joint Accounts
______________________ __ ___________________ ______________________
First Name MI Last Name Social Security Number
______________________ __ ___________________ ______________________
First Name MI Last Name Social Security Number
3) *** Custodial Accounts
______________________ __ ___________________
Custodian's First Name MI Custo Last Name
______________________ __ ____________________ ______________________
Minor's First Name MI Minor's Last Name Minor's Soc Sec #
4) *** All Other Accounts
_______________________________________________ ______________________
Name of Account Tax Identification #
_______________________________________________
(Use this second line if you need it)
B) Biographical and other information about the new account:
Number & Street _________________________________________________________
City________________________________ St_____ Zip_____________________
Citizen of__________________ Home Phone____________ Bus Phone____________
Signature of Owner, Trustee or Custodian: ____________________________
Signature of Joint Owner (if joint account): ____________________________
Amount of Investment $____________ Please make payment to The O'Higgins Fund
Dividend Direction: Reinvest all distributions I__I Pay in Cash I__I
All applications are accepted in Pennsylvania and under Pennsylvania Laws
C) Payer's request for Taxpayer identification number: ( Also, sign below.)
Part 1.- Taxpayer Identification Number Part II - Backup Withholding:
Check if you are NOT subject to
Social Security # ____________________ backup withholding under the
or provisions of section 3406(a)
(1) (C) of the Internal
Employer ID # ____________________ Revenue Code I__I
Certification - Under the penality of perjury, I certify that the information
provided on this form is true, correct and complete.
Signature ___________________________________ Date _______________________
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INVESTMENT ADVISER PROSPECTUS
VALLEY FORGE MANAGEMENT CORP. The O'HIGGINS FUND, INC.
1375 Anthony Wayne Drive 1375 Anthony Wayne Drive
Wayne, Pa. 19087 Wayne, Pa. 19087
610-688-6839
800-548-1942
January 30, 1998
TABLE OF CONTENTS
FUND EXPENSES ...................... 2 The Fund seeks capital apprecia-
THE FUND ........................... 3 tion through application of a pro-
OBJECTIVE & POLICIES prietary 28 year back tested allo-
Objective ........................ 3 cation model developed by Michael
Risk Assessment ...................3 O'Higgins. Application of this
Security Selection Criteria ...... 3 model results in almost 100% com-
Portfolio Turnover Policy ........ 3 mitments either to selected secur-
Nondiversification Policy ........ 3 in the S&P 100 list or a mix of
INVESTMENT RESTRICTIONS ............ 3 short-term US Treasury Notes and
INVESTMENT ADVISER ................. 4 long-term Zero Coupon Bonds. Cur-
CAPITALIZATION rent income from investments is a
Description of Common Stock ...... 5 subordinate consideration.
Voting Rights .................... 5
Major Shareholders ............... 5
SHARE PURCHASE - REINVESTMENTS
Initial Investments .............. 5
Subsequent Purchases ............. 5
Reinvestments .................... 5
REDEMPTION OF SHARES ............... 6
PRICING OF SHARES .................. 6
RETIREMENT ACCOUNT - IRA ........... 6
MANAGEMENT OF THE FUND ............. 7
CUSTODIAN & TRANSFER AGENT ......... 7
REPORTS TO SHAREHOLDERS ............ 7
AUDITORS ........................... 7
LITIGATION ......................... 7
ADDITIONAL INFORMATION ............. 7
SHARE PURCHASE APPLICATION ......... 8
TAX ID APPLICATION FORM .............8
<PAGE>
The O'HIGGINS FUND, INC.
1375 Anthony Wayne Drive
Wayne, PA 19087
610-688-6839
800-548-1942
Part B
STATEMENT OF ADDITIONAL INFORMATION
January 30, 1998
This Statement is not a prospectus, but should be read in conjunction with the
Fund's current prospectus dated January 30, 1998. To obtain the Prospectus,
please write the Fund or call either of the telephone numbers that are shown
above.
TABLE OF CONTENTS
THE FUND ................................. 2
OBJECTIVE & POLICIES
Objective ........................... 2
Risk Assessment ..................... 2
Security Selection Criteria ......... 2
Portfolio Turnover Policy ........... 2
Nondiversification Policy ........... 2
INVESTMENT RESTRICTIONS .................. 2
INVESTMENT ADVISER ....................... 3
CAPITALIZATION
Description of Common Stock ......... 4
Voting Rights ....................... 4
Major Shareholders .................. 4
SHARE PURCHASE - REINVESTMENT
Initial Investments ................. 4
Subsequent Purchases ................ 4
Reinvestments ....................... 5
REDEMPTION OF SHARES ..................... 5
PRICING OF SHARES ........................ 5
TAX STATUS ............................... 5
OFFICERS AND DIRECTORS OF THE FUND ....... 6
BROKERAGE ................................ 7
AUDITOR'S REPORT ......................... 8
STATEMENT OF ASSETS & LIABILITIES ........ 9
NOTES TO FINANCIAL STATEMENTS ............ 10
UNAUDITED FINANCIAL STATEMENTS 06/30/98 .. 11
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THE FUND
The O'Higgins Fund, Inc. (also referred to as the "Fund") was incorporated in
Pennsylvania on January 1, 1998. The Fund's registered office is in Wayne, PA.
Mail may be addressed to 1375 Anthony Wayne Dr. Wayne, PA. 19087.
OBJECTIVE AND POLICIES
Objective: The O'Higgins Fund is an open-end non-diversified investment manage-
ment company that seeks capital appreciation through application of a proprie-
tary 28 year back-tested allocation model. Use of this model results in almost
100% investments either to selected securities in the S&P 100 list or a mix of
short-term US Treasury Notes and/or long-term US Zero Coupon Bonds. Current
income from investments is a subordinate consideration.
Risk Assessment: Risks associated with the Fund's performance will be those due
to broad market declines and business risks from difficulties which occur to
particular companies while in the Fund's portfolio or the effect of interest
rates on our debt security holdings. The Fund's approach of either being in
stocks or US Treasury Notes and/or US Zero Coupons could impact total returns or
principal by being in the wrong type of security at the wrong time. Also, the
methodology to be used that has worked well in theory in past markets is untried
in future markets. It therefore must be realized that there is no assurance the
method will approximate past calculated favorable performance.
Security Selection Criteria: Criteria used by the Adviser in purchases of sec-
urities will be based on a previously determined number of the securities in the
Standard and Poors 100 list that had the highest yields the previous year or
short-term US Treasury Bills and/or long-term US Zero Coupon Bonds depending
upon periodic reviews of a publicly available indicator which will be describ-
ed in depth in a forthcoming book by Michael B. O'Higgins, author of "Beating
the Dow." All securities including stocks, US Treasury Notes and/or US Zero
Coupon Bonds will be selected in the pursuit of capital appreciation.
Portfolio Turnover Policy: Portfolio turnover depends upon the indications of
the publicly available indicator we will use. Accordingly, the turnover rate
should not exceed 200% wherein turnover is computed by dividing the lesser of
the Fund's total purchases or sales of securities within the period by the av-
erage monthly portfolio value of the Fund during such period. If this occurs,
brokerage expenses and the effect of capital gains taxes on shareholder divi-
dends could be expected to be higher than those expected from the average mutual
fund with lower turnover.
Non-diversification Policy: The Fund is classified as being non-diversified
which means that it may invest a relatively high percentage of its assets in the
obligations of a limited number of issues. The Fund, therefore, may be more
susceptible than a more widely diversified fund to any single economic, politi-
cal, or regulatory occurrence. The policy of the Fund, in the hope of achiev-
ing its objective as stated above, is, therefore, one of selective investments
rather than broad diversification. The Fund seeks only enough diversification
to maintain its federal non-taxable status under Sub-Chapter M of the Internal
Revenue Code.
INVESTMENT RESTRICTIONS
By-laws of the Fund provide the following fundamental investment restrictions;
The Fund may not, except by the approval of a majority of the outstanding
shares; i.e. A) 67% or more of the voting securities present at a duly called
meeting, if the holders of more than 50% of the outstanding voting securities
are present or represented by proxy, or B) of more than 50% of the outstanding
- 2 -
<PAGE>
voting securities, whichever is less:
a) Act as underwriter for securities of other issuers except insofar as the
Fund may be deemed an underwriter in selling its own portfolio securities.
b) Borrow money or purchase securities on margin, but may obtain such short
term credit as may be necessary for clearance of purchases and sales of se-
curities for temporary or emergency purposes in an amount not exceeding 5%
of the value of its total assets.
c) Sell securities short.
d) Invest in securities of other investment companies except as part of a mer-
ger, consolidation , or purchase of assets approved by the Fund's share-
holders.
e) Invest over 25% of its assets at the time of purchase in any one industry.
f) Make investments in commodities, commodity contracts or real estate although
the Fund may purchase and sell securities of companies which deal in real
estate or interests therein.
g) Make loans. The purchase of a portion of a readily marketable issue of pub-
licly distributed bonds, debentures or other debt securities will not be
considered the making of a loan.
h) Acquire more than 10% of the securities of any class of another issuer,
treating all preferred securities of an issuer as a single class and all
debt securities as a single class, or acquire more than 10% of the voting
securities of another issuer.
i) Invest in companies for the purpose of acquiring control.
j) The Fund may not purchase or retain securities of any issuer if those offi-
cers and directors of the Fund or its Investment Adviser owning individual-
ly more than 1/2 of 1% of any class of security or collectively own more
than 5% of such class of securities of such issuer.
k) Pledge, mortgage or hypothecate any of its assets.
l) Invest in securities which may be subject to registration under the Securi-
ties Act of 1933 prior to sale to the public or which are not at the time of
purchase readily salable.
m) Invest more than 5% of the total Fund assets, taken at market value at the
time of purchase, in securities of companies with less than three years'
continuous operation, including the operations of any predecessor.
n) Issue senior securities.
INVESTMENT ADVISER
The Valley Forge Management Corp. (VFMC) is a Pennsylvania corporation that acts
as an Investment Adviser to the Fund. Mr. Bernard B. Klawans is the sole owner,
director and officer of the Investment Adviser and is also President of the
Fund. He has had over 26 years of day to day operational experience in running
a federally registered mutual fund, the Valley Forge Fund, Inc.
On January 1, 1998 the shareholders of the Fund approved a management and ad-
visory contract with VFMC. This Agreement will continue on a year to year basis
provided that approval is voted on at least annually by specific approval of the
Board of Directors of the Fund or by vote of the holders of a majority of the
outstanding voting securities of the Fund. In either event, it must also be
approved by a majority of Directors of the Fund who are neither parties to the
agreement or interested persons as defined in the Investment Company Act of 1940
at a meeting called for the purpose of voting on such approval.
Under the Agreement, the Valley Forge Management Corp. will furnish investment
direction on the basis of an ongoing review using the new methodology to deter-
mine when and what securities will be purchased or disposed by designated Fund
personnel. The Agreement may be terminated at any time, without payment of pen-
alty, by the Board of Directors or by vote of a majority of the outstanding
voting securities of the Fund on not more than 60 days written notice to the
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<PAGE>
Valley Forge Management Corp. In the event of its assignment, the Agreement
will terminate automatically. For these services, the Fund has agreed to pay to
the Valley Forge Management Corp. a fee of 1% per year on the net assets of the
Fund. All fees are computed on the average daily closing net asset value of the
Fund and are payable monthly. This fee is higher than the fee paid most other
funds. Not withstanding, the Investment Adviser may elect to forgo fees during
the first year of operation.
The Investment Adviser is required, by contract, to render research, statistical
and advisory services to the Fund; to make specific recommendations based on the
Fund's investment requirements; and to pay salaries of the Fund's employees who
may be officers or directors or employees of the Investment Adviser. Excepting
these items, the Fund pays all other fees and expenses incurred in conducting
its business affairs. The Investment Adviser paid the initial organizational
costs of the Fund and will reimburse the Fund for any and all losses incurred
because of purchase reneges.
A contract agreement has been agreed upon between the Valley Forge Management
Corp. and the FTC Limited a company wholly owned by Mr. O'Higgins for use of his
methodology to establish and maintain the portfolio. The contract gives FTC
Limited 50% of all management fees paid by the Fund in the form of a royalty and
may be terminated only by mutual agreement of both parties. Neither O'Higgins
nor FTC Limited will be associated with the Fund or the Investment Adviser in
any way except through promotional marketing efforts. He is in the process of
patenting this methodology which will be described in detail in a new book to be
published by the end of 1998.
CAPITALIZATION
Description of Common Stock: The authorized capitalization of the Fund consists
of 100,000,000 shares of common stock of $0.01 par value per share. Each share
has equal dividend, distribution and liquidation rights with no conversion or
pre-emptive rights. All shares issued are fully paid and non-accessible.
Voting Rights: Each shareholder has one vote for each share held. Voting
rights are non-cumulative, which means that holders of a majority of shares can
elect all directors of the Fund if they so choose.
Major Shareholders: Bernard B. Klawans, as of the date of this Prospectus, owns
all outstanding shares of the Fund.
SHARE PURCHASE - REINVESTMENTS
The offering price of the shares offered by the Fund is at the net asset value
per share next determined after receipt of the purchase order by the Fund and is
computed in the manner described under the caption "PRICING OF SHARES" in this
Prospectus. The Fund reserves the right at its sole discretion to terminate the
offering of its shares made by this Prospectus at any time and to reject pur-
chase applications when, in the judgment of management such termination or re-
jection is in the best interests of the Fund.
Initial Investments: Initial purchase of shares of the Fund may be made only by
application submitted to the Fund. For the convenience of investors, a Share
Purchase Application form is provided with this Prospectus. The minimum initial
purchase of shares is $1,000 which is due and payable 3 business days after the
purchase date. The Fund will be registered in Pennsylvania and therefore re-
stricted to Pennsylvania residents at the time of purchase. There will be no
solicitation of out of the state of Pennsylvania potential shareholders until
registration under the Blue Sky laws of the state of residence have been met.
- 4 -
<PAGE>
Any losses incurred because of purchase reneges will be reimbursed by the In-
vestment Adviser.
Subsequent Purchases: Subsequent purchases may be made by mail or by phone and
are due and payable three business days after the purchase date. The minimum is
$100. No account will be allowed to exceed $500,000 at the time of purchase.
Reinvestments: The Fund will automatically retain and reinvest dividends & cap-
ital gains distributions and use same for the purchase of additional shares for
the shareholder at net asset value as of the close of business on the distribu-
tion date. A shareholder may at any time by letter or forms supplied by the
Fund direct the Fund to pay dividends and/or capital gains distributions, if
any, to such shareholders in cash or request any other information they desire
about the Fund either by US mail or by phone.
REDEMPTION OF SHARES
The Fund will redeem all or any part of the shares of any shareholder who ten-
ders a request for redemption (if certificates have not been issued) or certifi-
cates with respect to shares for which certificates have been issued. In either
case, proper endorsements guaranteed either by a national bank or a member firm
of the New York Stock Exchange will be required unless the shareholder is known
to management. The redemption price is the net asset value per share next de-
termined after notice is received by the Fund for redemption of shares. The
proceeds received by the shareholder may be more or less than his cost of such
shares, depending upon the net asset value per share at the time of redemption
and the difference should be treated by the shareholder as a capital gain or
loss for federal income tax purposes.
Payment by the Fund will ordinarily be made within three business days after
tender. The Fund may suspend the right of redemption or postpone the date of
payment if: The New York Stock Exchange is closed for other than customary week-
end or holiday closings, or when trading on the New York Stock Exchange is re-
stricted as determined by the Securities and Exchange Commission or when the
Securities and Exchange Commission has determined that an emergency exists, mak-
ing disposal of fund securities or valuation of net assets not reasonably prac-
ticable. The Fund intends to make payments in cash, however, the Fund reserves
the right to make payments in kind.
PRICING OF SHARES
The net asset value of the Fund's shares is determined as of the close of busi-
ness of the New York Stock Exchange on each business day of which that Exchange
is open (presently 4:00 p.m.) Monday through Friday exclusive of Washington's
Birthday, Good Friday, Memorial Day, July 4th, Labor Day, Thanksgiving, Christ-
mas & New Year's Day. The price is determined by dividing the value of its se-
curities, plus any cash and other assets less all liabilities, excluding capital
surplus, by the number of shares outstanding. The market value of securities
listed on a national exchange is determined to be the last recent sales price on
such exchange. Listed securities that have not recently traded and over-the-
counter securities are valued at the last bid price in such market.
Short term paper (debt obligations that mature in less than 60 days) are valued
at amortized cost which approximates market value. Other assets are valued at
fair value as determined in good faith by the Board of Directors.
fair value as determined in good faith by the Board of Directors.
TAX STATUS
Under the provisions of Sub-Chapter M of the Internal Revenue Code of 1954 as
- 5 -
<PAGE>
amended, the Fund, intends to pay out substantially all of its investment income
and realized capital gains, and intends to be relieved of federal income tax on
the amounts distributed to shareholders. In order to qualify as a "regulated
investment company" under Sub-Chapter M, at least 90% of the Fund's income must
be derived from dividends, interest, and gains from securities transactions and
no more than 50% of the Fund assets may be held in security holdings that exceed
5% of the total assets of the Fund at time of purchase.
Distribution of any net long-term capital gains realized by the Fund in 1998
will be taxable to the shareholder as long-term capital gains, regardless of the
length of time Fund shares have been held by the investor. The Taxpayer Relief
Act of 1997 (the Act) increased the asset holding period requirement for long-
term capital gains from 12 to 18 months and set the maximun tax rate at 20%. It
also created a new type, mid-term gains which are held for less than 18 months
but more than 12 and set this tax rate at 28%. In addition, the maximun capital
gains tax rates for long-term gains are reduced from 20% to 10% for taxpayers
whose marginal rate is 15%. All other income realized by the Fund, including
short-term capital gains, will be taxable to the shareholder as ordinary income.
Dividends from net income will be made annually or more frequently at the dis-
cretion of the Fund's Board of Directors. Dividends received shortly after pur-
chase of shares by an investor will have the effect of reducing the per share
net asset value of his shares by the amount of such dividends or distributions
&, although in effect a return of capital, are subject to federal income taxes.
The Fund is required by federal law to withhold 31% of reportable payments
(which may include dividends, capital gains, distributions and redemptions) paid
to shareholders who have not complied with IRS regulations. In order to avoid
this withholding requirement, you must certify on a W-9 tax form supplied by
the Fund that your Social Security or Taxpayer Identification Number provided is
correct and that you are not currently subject to back-up withholding, or that
you are exempt from back-up withholding.
Use of the allication model may result in turnover rates on the order of 200%
per year. Such turnover rates preclude long term capital gains in any dividend
payouts causing all dividends to be charged at ordinary income tax rates.
OFFICERS AND DIRECTORS OF THE FUND
Officers and Directors of the Fund, together with their addresses, age, princi-
pal occupations and percent of shares outstanding held during the past five
years are:
Occupation Percent
Name and Address Age Position Past 5 Years of Class
Bernard B. Klawans* 76 President President 100.00%
1375 Anthony Wayne Dr. Interested Valley Forge Fund
Wayne, PA Director
Dr. Gerd H. Dahl* 65 Secretary Secretary 0.00%
679 Jefferson Rd. Interested Valley Forge Fund
Bryn Mawr, PA Director
Victor J. Belanger 46 Non-Interested V. P. Linearizer 0.00%
Box #96 Director Technologies
Princeton Jct. NJ
Dr. Thomas A. Fosnocht 58 Non-Interested Dr.of Dental 0.00%
737 Hillview Rd. Director Surgery
Malvern, PA
- 6 -
<PAGE>
Dr. James P. King 62 Non-Interested Pres. Desilube 0.00%
904 Breezewood Ln. Director Technology Inc.
Lansdale, PA
Donald A. Peterson 57 Non-Interested Program Manager 0.00%
3741 Worthington Road Lockheed Martin
Collegeville, PA
William A. Texter 51 Non-Interested Mgr, Nuclear Quality 0.00%
9 Charter Oak Dr. Director PECO Energy
Newtown Square, PA
Nancy W. Klawans 76 Treasurer Treasurer 0.00%
1375 Anthony Wayne Dr Valley Forge Fund
Wayne, PA
* Directors of the Fund who are considered "Interested Directors" as defined by
the Investment Company act of 1940. Mr. Klawans is President and owner of the
Fund's Investment Adviser and Dr. Dahl is secretary of the Fund.
A total of $5,000 is estimated to be paid to Officers and Directors of the Fund
for travel expenses associated with their Fund duties in 1998. the Fund does
not compensate its officers and directors affiliated with the Investment Adviser
except as they may benefit through payment of the Advisory fee.
BROKERAGE
The Fund requires all brokers to effect transactions in portfolio securities in
such a manner as to get prompt execution of the orders at the most favorable
price. The Fund will place all orders for purchases and sales of its portfolio
securities through the Fund's President who is answerable to the Fund's Board of
Directors. The Fund's President will select brokers who meet the primary re-
quirements of execution and price, and also may have furnished publicly avail-
able statistical or other factual information which appear helpful or necessary
to the Fund's normal operations. No effort will be made in any given circum-
stance to determine the value of this information or the amount it might have
reduced Adviser expenses.
Other than as set forth above, the Fund has no fixed policy, formula, method or
criteria which it uses in allocating brokerage business to firms furnishing
these materials and executions . Thee Board of Directors will evaluate and re-
view the reasonableness of brokerage commissions paid to brokers every two
months initially and, after the first year of operation at least semiannually.
Use of the allocation model may result in turnover rates on the order of 200%
per year. Such turnover rates would generate commission rates on the order of
four times that of the average fund and thereby reduce the total return on in-
vestments.
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<PAGE>
LANDSBURG PLATT RASCHIATORE & DALTON
Certified Public Accountants
117 South 17th Street 13th Floor
Philadelphia, PA 19103
215-561-6633
Fax 215-561-2070
Independent Auditor's Report
To the Shareholders and Board of Directors of The O'Higgins Fund
We have audited the accompanying statement of assets and liabilities of The
O'Higgins Fund as of January 5, 1998. This statement of assets and liabilities
is the responsibility of the Fund's Management. Our responsibility is to ex-
press an opinion on this statement of assets and liabilities based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of assets and liabilities is free of ma-
terial misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statement of assets and liabili-
ties. An audit also includes assessing the accounting principles used and sig-
nificant estimates made by management, as well as evaluating the overall finan-
cial statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
In our opinion, the statement of assets and liabilities referred to above pre-
sents fairly, in all material respects, the financial position of The O'Higgins
Fund as of January 5, 1998, in conformity with generally accepted accounting
principles.
Landsburg Platt Raschiatore & Dalton
Landsburg Platt Raschiatore & Dalton
Philadelphia, Pennsylvania
January 23, 1998
- 8 -
<PAGE>
The O'Higgins Fund
Statement of Assets and Liabilities
January 5, 1998
ASSETS
Cash $100,000
========
LIABILITIES
Net assets (equivalent to $10.00 per share based
on 10,000 shares of capital stock outstanding.
100,000,000 shares authorized, $.01 par value) $100,000
========
COMPOSITION OF NET ASSETS
Shares of common stock $ 100
Paid in capital 99,900
--------
Net assets January 5, 1998 $100,000
========
The accompanying notes are an integral part of these financial statements.
- 9 -
<PAGE>
The O'Higgins Fund
Notes to the Statement of Assets and Liabilities
January 5, 1998
NOTE 1 ORGANIZATION
The O'Higgins Fund (the "Fund") was organized as a corporation in Pennsylvania
on January 1, 1998. The Fund had no operations since that date other than
matters relating to its organization and registration as an open-end non-diver-
sified management investment company under the Investment Company Act of 1940
and its securities under the Securities Act of 1933, the sale and issuance of
10,000 shares of common stock ("initial shares") to its initial investor on
January 2, 1998.
NOTE 2 ORGANIZATION COSTS
Organizational costs will be borne by the Fund's Investment Adviser.
NOTE 3 REGISTRATION FEES
Registration fees will be borne by the Fund's Investment Adviser.
- 10 -
<PAGE>
********** UNAUDITED FINANCIALS AS OF JUNE 30, 1998 **********
The O'Higgins Fund
Portfolio of Investments-In Securities June 30,1998
Bonds: 92.70 % Principal Amount Value
US Treasury Strips Princ PMTs02/15/27 $3,364,000 $680,773
--------
Total Bonds (Cost $621,908) $680,773
--------
Short -Term Investment: 7.28%
Royal Bank Gold Money Market 4.46s 07/01/98 $53,502
Total Short -Term Investment (Cost S53,502) $53,502
-------
Total Securities (Cost $675,410) $734,275
========
The accompanying notes are an integral part of this financial statement.
This is an unaudited report.
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<PAGE>
The O'Higgins Fund
Statement of Assets & Liabilities - June 30, 1998
ASSETS:
-------
Investment in securities at value (cost $ 675,410) $734,275
Receivables from interest 141
Total assets $734,416
--------
LIABILITIES:
------------
Management fee payable 0
Total liabilities 0
-------
NET ASSETS:
-----------
(Equivalent to $10.61 per share base on 69,218.542
shares of capital stock outstanding. 100,000,000 shares
authorized. $.001 par value) $734,416
========
COMPOSITION OF NET ASSETS:
--------------------------
Shares of common stock 69
Paid in capital less par 674,656
Undistributed net income 826
Net unrealized appreciation of investments 58,865
--------
Net assets June 30,1998 $734,416
========
STATEMENT OF OPERATIONS - FIVE MONTHS ENDED JUNE 30, 1998
INVESTMENT INCOME:
-----------------
Interest, received & accured $ 1450
Miscellaneous (36)
--------
Total investment income $ 1414
EXPENSES: All expenses were paid and the management fee waived by VFMC.
See note 4 for details.
Total expenses 0
--------
INVESTMENT INCOME - NET $1414
NET REALIZED GAIN ON SECURITY TRANSACTIONS: (588)
NET CHANGE IN UNREALIZED APPRECIATION OF INVESTMENTS: 58,865
--------
NET GAIN ON INVESTMENTS: 58,277
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS: $ 59,691
The accompanying notes are an integral part of this financial statement.
This is an unaudited statement.
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<PAGE>
THE O'HIGGINS FUND
STATEMENT OF CHANGES IN NET ASSETS
5 Months Ended
June 30, 1998
INC IN NET ASSETS FROM OPERATIONS:
- ----------------------------------
Investment income - net $ 1,414
Net realized loss on securities transactions (588)
Net change in unrealized appreciation of investments 58,865
----------
Net increase in net assets resulting from operations 59,691
Distributions to shareholders from investment income - net (0)
Distributions to shareholders from net realized gains on investments (0)
Net capital share transactions 674,725
Net change in net assets 734,416
NET ASSETS:
- -----------
Beginning of period 0
---------
End of period $734,416
=========
NOTES TO FINANCIAL STATEMENTS - JUNE 30, 1998
Note 1. Organization and Significant Accounting Policies: The O'Higgins Fund
(the "Fund") is registered under the Investment Company Act of 1940, as
amended, as a non-diversified open-end management investment company. All
significant accounting policies consistently followed by the Fund in the
preparation of its financial statements are in conformity with generally
accepted accounting principals. The Fund values listed securities at their
last sale price on a national securities exchange. Over the Counter securities
are valued at their last bid price. Short-term investments are valued at cost
approximating market value. The Fund's policy is to comply with the Interval
Revenue Code applicable to regulated investment companies which requires no
federal income tax provision because substantially all net investment income
is distributed to shareholders at year end.
Note 2. Capital Share Transactions: Period ended June 30, 1998
Shares Amount
Shares sold 69,218.542 $674,725
Shares issued in reinvestment of dividend 0.000 0
Shares redeemed 0.000 0
---------- --------
Net increase 69,218.542 $674,725
Note 3. Investments: Purchases and sales of investment securities other than
short-term investments aggregated $721,268 and $98,772 respectively in the
five months ending June 30, 1998. The net unrealized appreciation for all
securities totaled $58,865. The aggregate cost of securities for federal
income tax purposes at June 30, 1998 was $675,410.
Note 4. Investment Advisory Agreement & Other Related Transactions: The Fund
has an investment advisory agreement with Valley Forge Management Corp. (VFMC)
to receive investment advice. The cost of this service for the five months
ending June 30, 1998 would have been $2,308 based on 1% per year of the
averaged net assets of the Fund. This fee is computed daily and is payable
monthly. To date, VFMC has incurred $9,165 in office expenses, registrations,
filing fees and franchise taxes. VFMC has waived the management fee, and is
absorbing all Fund expenses until there is $2,500,000 is assets in the Fund.
Note 5. Distribution to Shareholders: There has been none since the Fund's
inception, January 30, 1998.
This is an unaudited report.
- 13 -
<PAGE>
FORM N-1A
PART C - OTHER INFORMATION
Contents Page #
1. Financial Statements & Exhibits 1
2. Control Persons 1
3. Number of Shareholders 1
4. Indemnification 1
5. Activities of Investment Adviser 1
6. Principal Underwriters 1
7. Location of Accounts & Records 1
8. Management Services 1
9. Distribution Expenses 1
10. Undertakings 1
11. Auditor's Consent 2
12. Signatures 3
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<PAGE>
1. a. Financial Statements - Audited condensed financial information on a per
share basis is presented in Part A. All other audited financial state-
ments are presented in Part B. These include:
Statement of Assets & Liabilities January 5, 1998
Notes to Statement of Assets and Liabilities January 5, 1998
Unaudited financial statements as of June 30, 1998 are also included.
b. Exhibits - The following exhibits are incorporated by reference to The
O'Higgins Fund pre-effective amendment number 2 of the Securities Act of
1933.
(3.i) Articles of Incorporation
(3.ii) By-Laws
(10.1) Investment Advisory Contract
(10.2) Reimbursement Agreements with Officers and/or Directors
2. Control Persons - Not applicable.
3. Number of Shareholders - There are fourteen shareholder of The O'Higgins
Fund as of the date of this filing.
4. Indemnification - Insofar as indemnification for liability arising under
the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant, the registrant has been advised
that, in the opinion of the Securities and Exchange Commission, such in-
demnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of ex-
penses incurred or paid by a director, officer or controlling person of
the registrant in the successful defense of any action, suit or proceed-
ing) is asserted by such director, officer or controlling person in con-
nection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whe-
ther such indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such issue.
5. Activities of Investment Adviser - The Valley Forge Management Corpora-
tion's activity at the present time is performance on its Investment Ad-
visory Contract currently effective with the Valley Forge Fund, Inc. Mr.
Bernard B, Klawans - owner, officer and director of the Valley Forge Man-
agement Corp. is also President of the Bookkeeper Corporation.
6. Principal Underwriter - The Fund acts as its own underwriter.
7. Location of Accounts & Records - All Fund records are held at corporate
headquarters - 1375 Anthony Wayne Drive, Wayne, Pa. 19087 - with the ex-
ception of security certifications which are in a safe deposit box at the
Royal Bank of Pennsylvania, DeKalb Pike, King of Prussia, PA.
8. Management services - Not applicable
9. Distribution Expenses - The Fund currently bears no distribution expenses.
10. Undertakings - The Fund is filing this post-effective amendment no. 1 to
its initial filing within six months of the effective date of Registrant's
1933 Act Registration Statement. Financial statements are presented that
are not certified in addition to the certified audit that accompanied the
original filing.
- 1 -
<PAGE>
Landsburg Platt Raschiatore & Dalton
Certified Public Accountants
117 S. 17th St. 13th Fl.
Philadelphia, PA. 19103
215-561-6633
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the inclusion by reference to the initial Registration Statement
on Form N-1A of The O'Higgins Fund of our report dated January 23, 1998 on our
examination of the Statement of Assets and Liabilities on such Company. We also
consent to the reference to our firm in such Initial Registration Statement.
Landsburg Platt Raschatore & Dalton
January 28, 1998
- 2 -
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Invest-
ment Company Act of 1940, The O'Higgins Fund certifies that it meets all of
the requirements for effectiveness of this Registration Statement and has
duly caused this amendment to the Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Wayne and State of Pennsylvania, on the 25th day of January, 1998.
The O'Higgins Fund
Bernard B. Klawans
President
Pursuant to the requirements of the Securities Act of 1933, this Amendment to
the Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signatures Title Date
Bernard B. Klawans President, CEO and Director 06/30/98
Gerd H. Dahl Secretary and Director 06/30/98
Nancy W. Klawans Treasurer 06/30/98
Victor J. Belanger Director 06/30/98
Dr. Thomas A. Fosnocht Director 06/30/98
Dr. James P. King Director 06/30/98
Donald A. Peterson Director 06/30/98
William A. Texter Director 06/30/98
- 3 -
