Filed with the SEC on June 5, 1998
File Numbers: 333-46479 and 811-08659
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
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REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
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Pre-Effective Amendment No. 2 X
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Post-Effective Amendment No.
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REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
(Check appropriate box or boxes) -
Amendment No. 2
THE HENSSLER FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
1281 KENNESTONE CIRCLE, SUITE 100, MARIETTA, GEORGIA 30066
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(Address of Principal Executive Offices)
(770) 429-9166
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(Registrant's Telephone Number, including Area Code)
GENE W. HENSSLER
1281 KENNESTONE CIRCLE, SUITE 100, MARIETTA, GEORGIA 30066
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(Name and Address of Agent of Service)
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: As soon as
practicable after the effective date of the Registration
Statement
TITLE OF SECURITIES BEING REGISTERED: Common Stock, par value
$0.0001 per share
Registrant hereby registers an indefinite number of securities
pursuant to Section 24(f) of the Investment Act of 1940.
The Registrant hereby amends this registration statement on such
date or dates as may be necessary to delay its effective date
until the Registrant shall file a further amendment which
specifically states that this registration statement shall
thereafter become effective in accordance with section 8(a) of
the Securities Act of 1933 or until the registration statement
shall become effective on such date as the Commission, acting
pursuant to said section 8(a), may determine.
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Please send copies of communications to:
Reinaldo Pascual, Esq.
Kilpatrick Stockton LLP
1100 Peachtree Street, Suite 2800
Atlanta, Georgia 30309-4530
<PAGE>
THE HENSSLER EQUITY FUND
OF
THE HENSSLER FUNDS
The Henssler Equity Fund is a portfolio of The Henssler
Funds, Inc. ("Henssler"), a no-load, open-end diversified
management investment company. The investment objective is to
seek growth of capital. Henssler Asset Management, LLC (the
"Adviser") serves as the Fund's investment adviser.
This Prospectus concisely describes the information which
investors should know before investing. Please read this
Prospectus carefully and keep it for future reference. A
Statement of Additional Information dated June 8, 1998, is
available free of charge by writing to The Henssler Funds, Inc.,
c/o Declaration Service Company, P.O. Box 844, 555 North Lane,
Suite 6160, Conshohocken, PA 19428-0844, or by telephoning
1-800-936-3863. The Statement of Additional Information, which
contains more detailed information about the Fund, has been filed
with the Securities and Exchange Commission and is incorporated
by reference in this Prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED ON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
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The Date of this Prospectus is June 8, 1998
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PROSPECTUS SUMMARY
The Fund The Henssler Equity Fund (the "Fund")
is a portfolio of The Henssler Funds,
Inc., a no-load, open-end diversified
management investment company.
Investment Objective and The Fund's investment objective is to
Policies seek growth of capital. The Fund will
attempt to achieve its objective by
investing substantially all of its
assets (under normal circumstances, 90%
or more) in equity securities listed on
a national or foreign securities
exchange, or quoted in the National
Association of Securities Dealers
Automated Quotation ("NASDAQ") National
Market System. There can be no
assurance that the Fund will achieve
its investment objective (see page 5).
Investment Adviser The Fund's investment adviser is
Henssler Asset Management, LLC (the
"Adviser"). The Adviser is a newly
organized affiliate of G.W. Henssler &
Associates, Ltd., an investment
management firm with approximately $325
million under private account management
(see page 9), with an additional $210
million under advisement.
Minimum Purchase The minimum initial investment in the Fund
is generally $2,000 and the minimum subsequent
investment is $200. The minimum initial
investment for an Individual Retirement
Account ("IRA"), other tax-deferred
retirement account, including accounts
with plans administered under Sections
401(k) and 403(b) of the Internal
Revenue Code, or an account under the
Uniform Gift to Minors Act is $1,000,
with minimum subsequent investments of
$100. The Fund will waive minimum
investment requirements for any
automatic investment plan of $100 or
more per month (see page 12).
Dividends & The Fund currently intends to make one
Distributions distribution of any income and
capital gains during each calendar year
(see page 14).
Redemption and Exchanges Shares of the Fund ordinarily may be
redeemed at the next determined net
asset value, without charge; however,
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with certain exceptions, shareholders
will be charged a 1% redemption fee as
a percentage of the amount redeemed
upon the redemption of shares where the
redemption occurs within a six-month
period following the issuance of such
shares (see page 15).
Investment Risk Because the Fund invests primarily in
common stocks, shares of the Fund will
be subject to market risk, i.e., the
possibility that stock prices could
decline over short or even extended
periods. The stock market tends to be
cyclical, with periods when the prices
of stocks generally rise and periods
when they generally decline.
Historically, the market has been
characterized by volatility in the
short run and growth in the long run
(see pages 6-9).
Administration Declaration Service Company is the
Fund's Transfer Agent (see page 12) and
Declaration Distributors, Inc. is the
Fund's Distributor (see page 15). Star
Bank, N.A. is the Custodian of the
Fund's assets (see page 19).
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FEE TABLE
SHAREHOLDER TRANSACTION EXPENSES:
Redemption Fees (as a percentage of amount redeemed) 1.00%<F1>
ANNUAL FUND OPERATING EXPENSES (as a percentage of average net assets):
Management Fees 0.50%
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Other Expenses <F2><F3> 0.70%
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Total Operating Expenses<F4><F5> 1.20%
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The Fund does not assess any 12b-1 Fees. The following example
is designed to assist prospective shareholders in understanding
the various costs and expenses of the Fund that reduce the amount
of income available for distribution to shareholders:
EXAMPLE:
1 Year 3 Years
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You would pay the following expenses on a
$1,000 investment assuming (1) 5% annual
return, and (2) redemption at the end of
each time period: $12 $38
NOTE: The figures shown in the example are entirely hypothetical.
They are not necessarily indicative of past or future performance
or expenses. Actual performance and/or expenses may be greater
or less than the example.
____________________
[FN]
<F1> The redemption fee is charged upon any redemption of Fund shares
occurring within a six-month period following the issuance of such shares.
For complete information about the redemption fee, see "How to Redeem."
<F2> Based on estimates for the current fiscal year. See "Management
of the Fund" for additional information regarding fees.
<F3> Redemption proceeds wired to a designated account at a shareholder's
request for amounts less than $10,000 will be reduced by a wire redemption
fee (currently $10.00). Certain institutional clients will not be charged
this wire redemption fee.
<F4> If you purchase or sell Fund shares through a discount brokerage firm
or other financial institution, there may be fees or commissions charged by
them for shareholder transactions.
<F5> The Adviser has voluntarily agreed to limit Total Operating Expenses
of the Fund to ensure that the Fund's expenses do not exceed the designated
maximum amount shown above. See "Management of the Fund."
</FN>
4<PAGE>
INVESTMENT OBJECTIVES, POLICIES, AND RISKS
The Fund is a portfolio of The Henssler Funds, Inc.
("Henssler"), a no load, open-end diversified management
investment company incorporated under the laws of the State of
Maryland on February 12, 1998. The Fund's investment objective
is to seek growth of capital. The Fund seeks to achieve its
objective by investing substantially all of its assets in
securities listed on a national or foreign securities exchange or
quoted in the National Association of Securities Dealers
Automated Quotation ("NASDAQ") National Market System.
Set forth below is further information regarding the Fund's
investment strategy. The investment objective may not be changed
without shareholder approval. No assurance can be given that the
Fund will achieve its objective.
THE FUND'S INVESTMENT STRATEGY. The Fund's investment strategy
is to emphasize long term capital appreciation and safety of
principal. The Fund does not attempt to "time" the market, but
rather purchases securities in the best companies the Fund's
investment adviser, Henssler Asset Management, LLC (the
"Adviser"), can identify, and holds these securities until the
fundamentals of the business change or other opportunities
present themselves. The Fund believes that its focus on the
fundamentals of the businesses it invests in results in the
purchase of above-average, high-quality securities with strong
growth potential.
The Fund seeks to invest in companies with undervalued
assets, strong balance sheet characteristics and financial
foundations, high earnings expectations, quality management and
potential for future growth. Factors deemed important by the
Adviser in selecting securities of such companies include, but
are not limited to, price, price history, and price-to-earnings
ratio. The Fund's investments may include small, medium, or large
capitalization companies, and a typical initial purchase of an
issuer's securities may involve one to five percent (1-5%) of the
Fund's total assets.
Under normal circumstances, the Fund anticipates that over
90% of its assets will be invested in a portfolio of common
stocks. Any assets not invested in equity securities will be
invested in cash and cash equivalents, U.S. Government
securities, money market instruments, and certain other fixed
income securities to meet the Fund's liquidity needs and may be so
invested, in extraordinary circumstances, to attempt to protect
against significant down cycles in the stock market. The Fund
may invest in securities of other investment companies,
subject to the limits and restrictions contained in, and the
rules and regulations promulgated under, the Investment Company
Act of 1940. In the event that the Fund invests in other investment
companies, such investments would be for cash management purposes.
The Fund is diversified, which means that the Fund may not, as
to 75% of its assets, purchase securities of any one issuer, other
than securities issued or guaranteed by the United States government,
if immediately after such purchase more than 5% of the Fund's total
assets would be invested in securities of such issuer or the Fund would
own 10% or more of the outstanding voting securities of such issuer.
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The Fund will not invest more than 25% of its assets in a
particular industry sector. The Fund will not purchase
securities on margin, but it may obtain such short-term
credit from banks as may be necessary for the clearance of
purchases and sales of securities.
INVESTMENTS IN COMMON STOCK. Because the Fund invests primarily
in common stocks, shares of the Fund will be subject to market
risk, i.e., the possibility that stock prices could decline over
short or even extended periods. The stock market tends to be
cyclical, with periods when the prices of stocks generally rise
and periods when they generally decline. Historically, the
market has been characterized by volatility in the short run and
growth in the long run. The Fund is intended to be a long-term
investment vehicle and should not be used to meet short-term needs.
INVESTMENTS IN SMALL COMPANIES. Although the Fund invests in
companies of all sizes, there may be times when the Fund is
invested in small companies. Smaller growth companies may offer
greater potential for capital appreciation than larger companies,
particularly because they often have new products, methods or
technologies, or may respond to changes in industry conditions
due to regulatory or other developments more rapidly than their
larger competitors. In addition, because they may be followed by
fewer stock analysts and less information may be available on
which to base stock price evaluations, the market may overlook
favorable trends in particular smaller growth companies, and then
adjust its valuation more quickly once investor interest
increases. Smaller growth companies may also be more subject to
a valuation catalyst (such as acquisition or disposition efforts
or changes in management) than larger companies.
On the other hand, the smaller companies in which the Fund
may invest may have relatively small revenues or market share for
their products or services, their businesses may be limited to
regional markets, or they may provide goods or services for a
limited market. For example, they may be developing or marketing
new products or services for which markets are not yet
established and may never become established or may have or
develop only a regional market for product or services and thus
be affected by local or regional market conditions. In addition,
small companies may lack depth of management or they may be
unable to generate funds necessary for growth or potential
development, either internally or through external financing on
favorable terms. Such companies may also be insignificant in
their industries and become subject to intense competition from
larger companies.
Due to these and other factors, small companies may suffer
significant losses or realize substantial growth; therefore,
investments in such companies tend to be volatile and are more
speculative.
INVESTMENTS IN SECTORS. Although the Fund anticipates that,
under normal circumstances, its investments will be diversified
across all equity market sectors, the Fund is permitted to invest
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up to 25% of its assets in a particular industry sector.
Sector markets, like the national economy as a whole, tend to
be cyclical. Significant product development or regulatory
change in a particular sector may rapidly result in a
substantial upswing in that sector's sales and profits and
corresponding increases in the stock prices of the sector's
companies. By investing a substantial percentage of the Fund's
assets in a particular sector, the Adviser attempts to capitalize
on the strength of that sector and the growth of that industry in
relation to other sectors of the overall economy.
On the other hand, investments in a particular sector are
also volatile in response to unanticipated negative changes in
the sector's economy. For example, unexpected declines in
demand, regulatory changes, or shortages of materials, skilled
employees or growth capital may negatively affect an industry
sector without affecting the overall economy. If the Fund is
substantially invested in a particular sector which experiences
an unanticipated decline, the Fund's performance may suffer
accordingly.
INVESTMENTS IN FOREIGN SECURITIES. The Fund may invest up to 20%
of its assets in equity securities that are issued by foreign
issuers and are traded in the United States. These securities
must be issued by foreign companies that comply with U.S.
standards. The Fund may also invest in American Depository
Receipts ("ADRs"). ADRs are receipts typically issued by a U.S.
bank or trust company which show ownership of underlying
securities of foreign corporations. By investing in these
securities the Adviser would attempt to take advantage of differences
between economic trends and the performance of securities markets
in various countries.
Investing in foreign securities involves risks and
opportunities not typically associated with investing in U.S.
securities. The following considerations must be taken into
account: fluctuations in exchange rates of foreign currency;
possible implementation of exchange control regulations or
currency restrictions that would prevent cash from being brought
back to the U.S.; lack of uniform accounting, auditing and
financial reporting standards; lack of uniform settlement periods
and trading practices; less liquidity and frequently greater
price volatility in foreign markets than in the U.S.; possible
expropriation or nationalization of assets; and a possible
imposition of foreign taxes. Furthermore, the U.S. government
has from time to time in the past imposed restrictions on foreign
investments by U.S. investors.
PORTFOLIO TURNOVER. Due to the Fund's long-term investment
style, the Fund anticipates that portfolio turnover will not
exceed 100% per year. Portfolio turnover results from a change
of the securities held by the Fund and involves expenses to the
Fund in the form of brokerage commissions and other transaction
costs. Portfolio turnover may also have an impact on the amount
of taxable distributions to shareholders. Although the rate of
portfolio turnover will not be a limiting factor when the Adviser
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<PAGE>
deems change appropriate and in the best interest of the Fund's
shareholders, the relatively low turnover rate anticipated in the
Fund may benefit the Fund and its shareholders in the form of lower
capital expenses and lower taxable distributions.
INVESTMENT IN FIXED INCOME SECURITIES. Under normal
circumstances, the Fund anticipates that substantially all of its
assets (ordinarily 90% or more) will be invested in equity
securities. Any assets not invested in equity securities will be
invested in cash and certain cash equivalents, money market
instruments, U.S. Government securities and certain other fixed
income securities for liquidity needs or may be so invested, in
extraordinary circumstances, as a defensive position due to
uncertainties in the stock market. The Fund will limit its
investments in corporate bonds and notes to those which are considered
investment grade (generally, bonds and notes that have received a
rating from Standard & Poor's Corporation of "BBB" or better or
from Moody's Investors Service, Inc. of "Baa" or better) at the
time of their purchase. For further information regarding the
Fund's fixed income investments, see "Investment Objectives,
Policies, and Risks - Investment in Fixed Income Securities" in
the Statement of Additional Information. For further information
regarding Standard & Poor's and Moody's ratings for corporate
bonds and notes, see Appendix A to the Statement of Additional
Information.
INVESTMENT EXPERIENCE OF THE ADVISER. The Adviser is an affiliate
of G.W. Henssler & Associates, Ltd., a federally-registered investment
adviser that has provided investment advisory services to corporations,
individual investors, and institutional investors since its inception
in 1987 and currently has approximately $325 million under private account
management, with an additional $210 million under advisement. However,
the Adviser has no previous experience in advising a mutual fund. For
further information regarding the Fund's management, see "Management of
the Fund" below.
MANAGEMENT OF THE FUND
BOARD OF DIRECTORS. The Fund is governed by a Board of Directors
which is responsible for protecting the interests of the Fund's
shareholders. The members of the Board of Directors are
experienced executives who meet throughout the year to oversee
the Fund's activities, review the Fund's contractual
relationships with service providers, and review the performance
of the Fund. A majority of the Fund's directors are not
affiliated with the Adviser. For information regarding the
individual members of the Fund's Board of Directors, see
"Management of the Fund" in the Statement of Additional
Information.
MANAGEMENT AGREEMENTS. Henssler Asset Management, LLC (the
"Adviser") has entered into an Investment Advisory Agreement (the
"Advisory Agreement") with the Fund to provide investment
management services to the Fund. In addition, the Adviser has
entered into an Operating Services Agreement (the "Services
Agreement") with the Fund to provide virtually all day-to-day
operational services to the Fund. As is further explained below,
the combined effect of the Advisory Agreement and the Services
Agreement is to place a cap or ceiling on the Fund's ordinary
operating expenses at 1.20% of daily net asset value of the Fund,
excepting brokerage, interest, taxes, litigation, and other
extraordinary expenses.
8
<PAGE>
The Adviser was organized in February 1998 by its only
owners, Gene W. Henssler, Ph.D., and Patricia T. Henssler.
The Adviser is an affiliate of G.W. Henssler & Associates, Ltd.
("Henssler & Associates"), an investment manager wholly-owned by
Dr. Henssler which has provided investment advisory services to
corporations, individual investors, and institutional investors
since its inception in 1987. Henssler & Associates has
approximately $325 million under private account management, with
an additional $210 million under advisement. The Adviser's offices
are located at 1281 Kennestone Circle, Suite 100, Marietta,
Georgia 30066.
INVESTMENT ADVISORY AGREEMENT. Under the terms of the Advisory
Agreement, the Adviser, subject to the supervision of the Board
of Directors, will manage the investment operations of the Fund
in accordance with the Fund's investment policies. In
consideration of the Adviser's investment advisory services, the
Fund will pay to the Adviser on the last day of each month an annualized
fee equal to 0.50% of average net asset value of the Fund, such fee
to be computed daily based upon the net asset value of the Fund.
Portfolio Managers.
- ------------------
Management of the Fund will be conducted by a team of portfolio
managers including Dr. Henssler, and Ted L. Parrish (the
"Management Team"). The Fund's Management Team is supported
by a group of research analysts and other members of the Fund's
investment staff.
Dr. Henssler has worked in investment management and financial
analysis for over 25 years, the last 11 years as the sole
shareholder and a principal of Henssler & Associates. Before
organizing Henssler & Associates, Dr. Henssler was a Professor of
Finance at Kennesaw State University for 10 years. Dr. Henssler
earned his MBA and Ph.D. in Finance from the University of
Michigan in 1965 and 1971, respectively.
Mr. Parrish has worked in investment management and financial
analysis for 3 years. He earned his BBA from Kennesaw State
University in 1995, and holds a Series 7 license. Mr. Parrish is
a Level I Chartered Financial Analyst candidate.
OPERATING SERVICES AGREEMENT. Under the terms of the Services
Agreement, the Adviser, subject to the supervision of the Board
of Directors, will provide day-to-day operational services to the
Fund including, but not limited to, providing or arranging to
provide accounting, administrative, legal (except litigation),
dividend disbursing, transfer agent, registrar, custodial,
distribution, shareholder reporting, sub-accounting and
recordkeeping services. The Services Agreement provides that the
Adviser pays all fees and expenses associated with these and
other functions, including, but not limited to, expenses of legal
compliance, shareholder communications, and meetings of the
shareholders and the Board of Directors. In consideration of the
Adviser's services under the Services Agreement, the Fund will
pay to the Adviser on the last day of each month an annualized fee
equal to 0.70% of average net asset value of the Fund, such fee to
be computed daily based upon the net asset value of the Fund.
9<PAGE>
PERFORMANCE INFORMATION
From time to time, the Fund may make available certain
information about its performance. This information may include
calculations regarding the total return on an investment in the
Fund ("Total Return"). Total Return is measured by comparing the
value of an investment in the Fund at the beginning of the
relevant period to the redemption value of the investment at the
end of the period (assuming reinvestment of any dividends or
capital gains distributions). When the Fund makes available its
Total Return, it will be calculated on an annualized basis for
specified periods of time, and may be calculated for the period
since the start of the Fund's operations. Any performance
information made available by the Fund, including Total Return,
is based on the Fund's historical record and is not intended to
indicate future performance.
HOW TO BUY SHARES
Shares of the Fund are continuously offered at net asset
value, and the Fund does not impose any sales charges on
purchases of Fund shares. The minimum initial investment in
the Fund is generally $2,000 and the minimum subsequent investment
is $200. The minimum initial investment for an Individual
Retirement Account ("IRA"), other tax-deferred retirement
account, including accounts with plans administered under
Sections 401(k) and 403(b) of the Internal Revenue Code, or
an account under the Uniform Gift to Minors Act is $1,000,
with minimum subsequent investments of $100. The Fund will waive
minimum investment requirements for any automatic investment plan
of $100 or more per month.
Orders for the purchase of shares of the Fund placed directly
to the Fund's transfer agent, Declaration Service Company (the
"Transfer Agent"), by an investor are executed at their next
determined net asset value after receipt by the Transfer Agent.
Orders for the purchase of shares of the Fund placed through brokers
are executed at their next determined net asset value after receipt
by the broker. Shares are eligible to receive dividends the
day they are purchased. For further information regarding net
asset value, see "Additional Information-Determination of Net
Asset Value." The Fund reserves the right to reject any order
for the purchase of its shares in whole or in part.
For initial and subsequent investments, shares of the Fund
may be purchased by sending a check payable to "The Henssler
Equity Fund," together with a completed Application to:
Regular Mail: For Overnight Delivery:
The Henssler Equity Fund The Henssler Equity Fund
c/o Declaration Service Company c/o Declaration Service Company
P.O. Box 844 555 North Lane, Suite 6160
Conshohocken, PA 19428-0844 Conshohocken, PA 19428-0844
10
<PAGE>
Shareholders should be aware that purchases and redemptions
mailed to the Fund at its address in Georgia will not be effected
until received by the Transfer Agent at the address listed above.
Investments in the Fund may also be made through brokerage firms
and institutions. However, investors who place their orders
through a broker-dealer may be charged a fee for the broker-
dealer's services. No such charge will be paid by an investor
who purchases Fund shares directly from the Fund as described
above.
INDIVIDUAL RETIREMENT ACCOUNTS. If you are interested in investing
your Individual Retirement Account ("IRA") or Roth IRA in the Fund,
you may establish an IRA, IRA Rollover Account, Roth IRA, or Roth
IRA Rollover Account in the Fund. Please call the Fund at 1-800-
936-3863 to request an IRA investment package. You may also call
a broker-dealer for more information regarding the establishment
of an IRA account in the Fund.
AUTOMATIC INVESTMENT PLANS. If you are interested in setting up
an Automatic Investment Plan to invest a specific amount of money
in the Fund on a regular basis, you may complete the appropriate
section of the Account Application to authorize the Transfer
Agent to automatically debit your bank account accordingly.
Debits must be made in amounts of $100 or more and may be made
once per month on the 15th or last business day of the month. If
the 15th falls on a weekend or holiday, the account will be
debited on the previous business day. Requests to modify or
discontinue an Automatic Investment Plan must be received in
writing fifteen (15) days prior to the next scheduled debit date.
Please call the Fund at 1-800-936-3863 to inquire about the
Automatic Investment Plan.
TELEPHONE PURCHASERS BY SECURITIES FIRMS. Member firms of the
NASD may telephone Declaration Service Company at 1-800-936-3863
and place purchase orders on behalf of investors who carry their
Fund investments through the member's account with the Fund. By
electing telephone purchase privileges, NASD member firms, on
behalf of themselves and their clients, agree that neither the
Fund, the Distributor nor the Transfer Agent shall be liable for
following instructions communicated by telephone and reasonably
believed to be genuine. The Fund and its agents provide written
confirmations of transactions initiated by telephone as a
procedure designed to confirm that telephone instructions are
genuine. In addition, all telephone transactions with the
Transfer Agent are recorded. As a result of these and other
policies, the NASD member firms may bear the risk of any loss in
the event of such a transaction. However, if the Transfer Agent
or the Fund fails to employ this and other established
procedures, the Transfer Agent or the Fund may be liable. The
Fund reserves the right to modify or terminate these telephone
privileges at any time.
WRITTEN SHAREHOLDER INQUIRIES. Written shareholder
inquiries may be directed to the Fund's Transfer Agent at The
Henssler Equity Fund, c/o Declaration Service Company, P.O.
Box 844, Conshohocken, PA 19428-0844, or by telephone by
calling 1-800-936-3863.
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DIVIDENDS, DISTRIBUTIONS AND TAXES
DIVIDENDS AND DISTRIBUTIONS. The Fund intends to distribute all
of its net investment income and net realized long and short-term
capital gains to its shareholders at least annually. Generally,
the Fund makes one distribution of net investment income dividend
payments and capital gains distributions during May of each year.
Unless specific instructions are noted in the Application or
given to the Distributor, all dividend and capital gain
distributions will automatically be reinvested in additional
shares of the Fund. Shareholders may elect on the Application to
receive dividend or capital gain distributions in cash. In
either case, dividend and capital gain distributions are taxable
as discussed below.
TAXES. Dividends paid by the Fund from its ordinary income and
distributions of the Fund's net realized short-term capital gains
are taxable to non-tax-exempt investors as ordinary income.
Distributions made from the Fund's net realized long-term capital
gains are taxable to shareholders as long-term capital gains
regardless of how long the shareholder has owned Fund shares.
The Fund will provide its shareholders with a written notice as
to the amounts of any dividends or capital gains distributions no
later than 30 days after December 31 of each year. If you redeem
your Fund shares you will have a short or long-term capital gain
or loss depending upon the amount of time you owned the shares.
Shareholders are urged to consult their tax Advisers as to
the particular tax consequences of the acquisition, ownership and
disposition of shares of the Fund, including the application of
state, local, and foreign tax laws and possible future changes in
federal tax laws. Foreign investors should consider applicable
foreign taxes in their evaluation of an investment in the Fund.
THE DISTRIBUTOR
The Adviser has entered into a Distribution Agreement on
behalf of the Fund with Declaration Distributors, Inc. (the
"Distributor"). The Distributor acts as the Fund's agent once
the orders are received from investors. The Distributor's main
office is located at 555 North Lane, Suite 6160, Conshohocken, PA
19428.
For further information regarding the Distribution
Agreement, see "Distribution Agreement" in the Statement of
Additional Information.
12
<PAGE>
HOW TO REDEEM
REDEMPTION FEES. Shareholders may request redemption of their
shares at any time by mail or telephone as provided below. In
order to discourage short-term trading, shareholders will be
charged a 1% redemption fee upon the redemption of Fund shares
where the redemption occurs within a six-month period following
the issuance of such shares. The redemption fee will be deducted
from redemption proceeds and retained by the Fund for the benefit
of the Fund's remaining shareholders. The redemption fee will
not be paid to the Adviser.
No redemption fee will be charged upon the redemption of
Fund shares acquired through reinvestment of dividends or
distributions, and the Fund reserves the right to waive the
redemption fee for omnibus accounts and investments by the Fund's
employees, certain financial planners, plans administered under
Section 401(k) and 403(b) of the Internal Revenue Code and
certain other investors in the Fund. In determining whether the
redemption fee is payable and, if so, the amount of such fee, it
will be assumed that shares held the longest period of time by a
shareholder will be the first to be redeemed. This redemption
fee may be waived, modified or discontinued at any time or from
time to time.
Shareholders who redeem their shares through a broker-dealer
may be charged a fee for the broker-dealer's services.
REDEMPTION BY MAIL OR TELEPHONE. Shares may be redeemed in
writing or by telephone. If the shareholder is a corporation,
partnership, agent, fiduciary or surviving joint owner,
additional documentation of a customary nature may be required.
Shares are redeemed at their next determined net asset value
after a redemption request in good order has been received by the
Transfer Agent or, for redemptions through a broker, after the request
has been received by the broker. A request is deemed to be in good
order if it has been signed by the account holder and is accompanied,
where necessary, by a signature guarantee. Redemption proceeds will
be mailed or wired to the redeeming shareholder within seven
days, except where those shares have recently been purchased by
personal check. In those cases, redemption proceeds may be
withheld until the check has been collected, which may take up to
fifteen days. To avoid such withholding, investors should
purchase shares by certified or bank check.
To redeem shares in writing, submit a written redemption
request directly to the Transfer Agent at the following address:
Regular Mail: For Overnight Delivery:
The Henssler Equity Fund The Henssler Equity Fund
c/o Declaration Service Company c/o Declaration Service Company
P.O. Box 844 555 North Lane, Suite 6160
Conshohocken, PA 19428-0844 Conshohocken, PA 19428-0844
13
<PAGE>
Shares may also be redeemed by telephone by calling toll-free 1-
800-936-3863. The Fund, through the Transfer Agent, has
established procedures designed to confirm the authenticity of
telephonic instructions, which procedures include requiring
callers to establish their personal identity and limiting the
mailing of telephone redemption proceeds to the address or bank
account set forth on the Account Application. Investors should
understand that neither the Fund nor the Transfer Agent will be
liable for acting upon instructions communicated by telephone
that it reasonably believes to be genuine.
Redemption proceeds wired to a designated account at a
shareholder's request for amounts less than $10,000 will be
reduced by a wire transfer fee (currently $10.00). Certain
institutional clients will not be charged this wire redemption
fee. Changes to the designated address or bank account must be
made in writing and may be required to be accompanied by a
signature guarantee from an eligible guarantor.
The Fund reserves the right to redeem, at net asset value,
the shares of any shareholder if, because of redemptions by the
shareholder, the account of such shareholder has a value of less
than $1,000. Before the Fund exercises its right to redeem such
shares, the shareholder will be given written notice of the
proposed redemption and will be allowed 90 days to make an
additional investment in an amount which will increase the value
of the account to at least $1,000.
ADDITIONAL INFORMATION
DETERMINATION OF NET ASSET VALUE. The net asset value of the
shares of the Fund is determined once daily as of 4:00 p.m.
(Eastern Standard Time) every day the New York Stock Exchange is
open for trading. The Fund will also determine its net asset
value once daily every day there is sufficient trading in its
portfolio of securities that the net asset value might be
materially affected.
The price of each holding in the Fund's portfolio is based
on the closing price. However, if a holding did not trade that
day, the last bid price is used for a value instead. The net
asset value per share is computed by dividing the sum of the
value of the securities held by the Fund plus any cash or other
assets (including interest and dividends accrued but not yet
received) minus all liabilities (including accrued expenses) by
the total number of shares outstanding at such time, rounded to
the nearest cent. Expenses, including the management fee payable
to the Adviser, are accrued daily.
Equity securities listed or traded on a national securities
exchange or quoted on the over-the-counter market are valued at
the last sale price on the day of valuation or, if no sale is
reported, at the last bid price. Valuations of fixed income
securities are supplied by independent pricing services (such as
Interactive Data Corporation) approved by the Fund's Board of
Directors. Money market securities with a remaining maturity of
sixty (60) days or less are valued on an amortized cost basis if
their original term to maturity from the date of purchase was
sixty (60) days or less, or by amortizing their value on the 61st
day prior to maturity, if their term to maturity for the date of
purchase exceeded 60 days, unless the Board of Directors determines
14
<PAGE>
that such valuation does not represent fair value. Other assets
and securities for which market quotations are not readily available
are valued at fair value as determined in good faith by or under
the direction of the Fund's Board of Directors.
INVESTMENT ACCOUNT. Each shareholder has an investment account
and will receive quarterly statements from the Transfer Agent as
well as confirmation statements after each transaction showing
the cumulative activity in the account since the beginning of the
year. After the end of each year, shareholders will receive
Federal income tax information regarding dividends and capital
gains distributions. Shareholder inquiries should be made to the
Fund at the address on the front of this Prospectus.
On a semi-annual basis, the Adviser will send investors a
performance summary detailing percentages of security positions
in the Fund as well as a letter regarding the Fund's results.
THE FUND
The Fund is the only portfolio of The Henssler Funds, Inc.
("Henssler"), an open-end diversified management investment
company incorporated under the laws of the State of Maryland on
February 12, 1998.
The Fund's address 1281 Kennestone Circle, Suite 100,
Marietta, Georgia 30066, and its telephone number is (770) 429-
9166.
DESCRIPTION OF SHARES. Henssler has an authorized capital of
500,000,000 shares of Common Stock, par value $.0001 per share,
100,000,000 of which have been classified as shares of the Fund.
The Board of Directors may authorize and issue additional classes
of stock by classifying or reclassifying unissued stock without
stockholder approval. If liquidated, each share of Common Stock
is entitled to a pro rata portion of the particular Fund's assets
after payment of debts and expenses. Shareholders of the Fund
are entitled to one vote for each share held and fractional votes
for a fractional share held on any matter submitted to a
shareholder vote. The Company does not intend to hold a meeting
of shareholders in any year in which the Investment Company Act
of 1940 does not require shareholders to act upon one or more of
the following matters (a) election of Directors; (b) approval of
an investment Advisory agreement; (c) approval of a distribution
agreement; or (d) ratification of selection of independent
accountants. Voting rights for Directors are not cumulative.
Shares issued are fully paid and non-assessable, and have no
preemptive or conversion rights.
INDEMNIFICATION OF OFFICERS AND DIRECTORS. Henssler has elected
to indemnify its directors and officers to the maximum extent
permitted under the Maryland General Corporation Law and the
Investment Company Act of 1940. Accordingly, a director or
officer of Henssler will not be liable to the Fund or its
shareholders for monetary damages, except in the case of willful
misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of his office. See the
Articles of Incorporation and Bylaws on file with the Securities
and Exchange Commission for the full text of these provisions.
15
<PAGE>
Adviser
- -------
Henssler Asset Management, LLC
1281 Kennestone Circle, Suite 100
Marietta, Georgia 30066
Distributor
- -----------
Declaration Distributors, Inc.
555 North Lane, Suite 6160
Conshohocken, PA 19428
Custodian
- ---------
Star Bank, N.A.
Star Bank Center
425 Walnut Street
Cincinnati, Ohio 45202
Transfer, Redemption, and Dividend Disbursing Agent
- ---------------------------------------------------
Declaration Service Company
555 North Lane, Suite 6160
Conshohocken, PA 19428
Independent Accountants
- -----------------------
McCurdy & Associates CPA's, Inc.
27955 Clemens Road
Westlake, Ohio 44145
Legal Counsel
- -------------
Kilpatrick Stockton LLP
1100 Peachtree Street
Suite 2800
Atlanta, Georgia 30309
16
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
June 8, 1998
THE HENSSLER EQUITY FUND
OF
THE HENSSLER FUNDS, INC.
1281 Kennestone Circle, Suite 100
Marietta, Georgia 30066
Telephone No. (770) 429-9166
_______________
The Henssler Equity Fund is a portfolio of The Henssler
Funds, Inc. ("Henssler"), a no-load, open-end diversified
management investment company. The investment objective is to
seek growth of capital. The Fund seeks to achieve its objective
by investing in securities listed on a national or foreign
securities exchange or quoted in the National Association of
Securities Dealers Automated Quotation ("NASDAQ") National Market
System.
This Statement of Additional Information of Henssler is not
a prospectus and should be read in conjunction with Henssler's
Prospectus, dated June 8, 1998 (the "Prospectus"), which has
been filed with the Securities and Exchange Commission and is
available free of charge by writing to The Henssler Funds, Inc.
c/o Declaration Service Company, P.O. Box 844, Conshohocken, PA
19428-0844, or by telephoning 1-800-936-3863. This Statement of
Additional Information has been incorporated by reference into
the Prospectus.
B-1
<PAGE>
TABLE OF CONTENTS
Page No.
--------
THE FUND . . . . . . . . . . . . . . . . . . . . . . . . . . 4
INVESTMENT OBJECTIVES, POLICIES AND RISK CONSIDERATIONS . . . 4
Investments in Common Stock. . . . . . . . . . . . . . . 4
Investments in Small Companies . . . . . . . . . . . . . 4
Investments in Sectors . . . . . . . . . . . . . . . . . 5
Investments in Foreign Securities. . . . . . . . . . . . 5
Low Portfolio Turnover . . . . . . . . . . . . . . . . . 6
Investment in Fixed Income Securities. . . . . . . . . . 7
Repurchase Agreements. . . . . . . . . . . . . . . . . . 7
INVESTMENT RESTRICTIONS . . . . . . . . . . . . . . . . . . . 8
MANAGEMENT OF THE FUND . . . . . . . . . . . . . . . . . . .10
ADVISORY AND ADMINISTRATION ARRANGEMENTS . . . . . . . . . . 12
Advisory and Operational Service Agreements . . . . . . 12
Duration and Termination. . . . . . . . . . . . . . . . 12
PORTFOLIO TRANSACTIONS AND BROKERAGE ALLOCATION. . . . . . . 13
General . . . . . . . . . . . . . . . . . . . . . . . . 13
Research Services . . . . . . . . . . . . . . . . . . . 13
Over-the-Counter Transactions . . . . . . . . . . . . . 13
Political Conflicts . . . . . . . . . . . . . . . . . . 14
DETERMINATION OF NET ASSET VALUE . . . . . . . . . . . . . . 14
PURCHASE OF SHARES . . . . . . . . . . . . . . . . . . . . . 15
Purchase by Exchange of Securities. . . . . . . . . . . 15
THE DISTRIBUTOR. . . . . . . . . . . . . . . . . . . . . . . 15
REDEMPTION OF SHARES . . . . . . . . . . . . . . . . . . . . 16
SHAREHOLDER SERVICES . . . . . . . . . . . . . . . . . . . . 17
Investment Account . . . . . . . . . . . . . . . . . . 17
Reinvestment of Dividends and Capital
Gains Distribution . . . . . . . . . . . . . . . . . 17
B-2
<PAGE>
DIVIDENDS, DISTRIBUTIONS AND TAXES . . . . . . . . . . . . . 17
Dividends and Distributions . . . . . . . . . . . . . . 17
Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 18
PERFORMANCE INFORMATION. . . . . . . . . . . . . . . . . . . 19
GENERAL INFORMATION. . . . . . . . . . . . . . . . . . . . . 21
Description of Shares . . . . . . . . . . . . . . . . . 21
Principal Shareholders . . . . . . . . . . . . . . . . 21
Independent Accountants . . . . . . . . . . . . . . . . 21
Custodian . . . . . . . . . . . . . . . . . . . . . . . 21
Transfer, Redemption, And Dividend Disbursing Agent . . 21
Legal Counsel . . . . . . . . . . . . . . . . . . . . . 22
Reports To Shareholders . . . . . . . . . . . . . . . . 22
Additional Information . . . . . . . . . . . . . . . . 22
B-3
<PAGE>
THE FUND
The Henssler Equity Fund (the "Fund") is the only portfolio of The
Henssler Funds, Inc. ("Henssler"), a newly organized no-load, open-end
diversified management investment company incorporated under the laws of
the State of Maryland on February 12, 1998.
Henssler's address is 1281 Kennestone Circle, Suite 100, Marietta,
Georgia 30066, and its telephone number is (770) 429-9166.
INVESTMENT OBJECTIVES, POLICIES AND RISK CONSIDERATIONS
Reference is made to "Investment Objectives, Policies and Risks" in
the Prospectus for a discussion of the investment strategy, objectives,
policies and risks of the Fund. Set forth below is certain further
information relating to the Fund generally.
INVESTMENTS IN COMMON STOCK. Because the Fund invests primarily in
common stocks, shares of the Fund will be subject to market risk, i.e.,
the possibility that stock prices could decline over short or even
extended periods. The stock market tends to be cyclical, with periods
when the prices of stocks generally rise and periods when they generally
decline. Historically, the market has been characterized by volatility
in the short run and growth in the long run.
The Fund is intended to be a long-term investment vehicle and should
not be used to meet short-term needs.
INVESTMENTS IN SMALL COMPANIES. Although the Fund invests in companies
of all sizes, i.e., large (annual revenues generally over $5 billion),
medium (annual revenues generally between $1 billion and $5 billion), and
small (annual revenues generally under $1 billion), there may be times when
the Fund is significantly invested in small companies. Smaller growth
companies may offer greater potential for capital appreciation than larger
companies, particularly because they often have new products, methods or
technologies, or may respond to changes in industry conditions due to
regulatory or other developments more rapidly than their larger competitors.
In addition, because they may be followed by fewer stock analysts and
less information may be available on which to base stock price evaluations,
the market may overlook favorable trends in particular smaller growth
companies, and then adjust its valuation more quickly once investor interest
increases. Smaller growth companies may also be more subject to a valuation
catalyst (such as acquisition or disposition efforts or changes in management)
than larger companies.
On the other hand, the smaller companies in which the Fund may
invest may have relatively small revenues or market share for their
products or services, their businesses may be limited to regional
markets, or they may provide goods or services for a limited market. For
example, they may be developing or marketing new products or services for
which markets are not yet established and may never become established or
may have or develop only a regional market for product or services and
thus be affected by local or regional market conditions. In addition,
small companies may lack depth of management or they may be unable to
B-4<PAGE>
generate funds necessary for growth or potential development, either
internally or through external financing on favorable terms. Such
companies may also be insignificant in their industries and become
subject to intense competition from larger companies.
Due to these and other factors, small companies may suffer
significant losses or realize substantial growth; therefore, investments
in such companies tend to be volatile and are more speculative.
INVESTMENTS IN SECTORS. Although the Fund anticipates that, under normal
circumstances, its investments will be diversified across all equity
market sectors, the Fund is permitted to invest up to 25% of its assets
in a particular industry sector. Sector markets, like the national
economy as a whole, tend to be cyclical. Significant product
development or regulatory change in a particular sector may rapidly
result in a substantial upswing in that sector's sales and profits
and corresponding increases in the stock prices of the sector's
companies. By investing a substantial percentage of the Fund's assets in
a particular sector, the Adviser will attempt to capitalize on the strength
of that sector and the growth of that industry in relation to other
sectors of the overall economy.
On the other hand, investments in a particular sector are also
volatile in response to unanticipated negative changes in the sector's
economy. For example, unexpected declines in demand, regulatory changes,
or shortages of materials, skilled employees or growth capital may
negatively affect an industry sector without affecting the overall
economy. If the Fund is substantially invested in a particular sector
which experiences an unanticipated decline, the Fund's performance may
suffer accordingly.
INVESTMENTS IN FOREIGN SECURITIES. The Adviser may invest up to 20% of
the Fund's assets in equity securities that are issued by foreign issuers
and are traded in the United States and in American Depository Receipts of
foreign companies. By doing so, the Adviser attempts to take advantage
of differences between economic trends and the performance of securities
markets in various countries. The Adviser believes that it may be
possible to obtain significant appreciation from a portfolio consisting,
in part, of foreign investments and also achieve increased
diversification. Increased diversification is gained by combining
securities from various countries that offer different investment
opportunities and are affected by different economic trends.
Generally, investments in securities of foreign companies, except
Canadian companies, involve greater risks than are present in domestic
investments. Canadian securities are not considered by the Adviser to
have the same risks as other nations' securities because Canadian and
U.S. companies are generally subject to similar auditing and accounting
procedures and similar governmental supervision and regulation. Also,
Canadian securities are normally more liquid than other non-U.S.
securities. Compared to U.S. and Canadian companies, there is generally
less publicly available information about foreign companies and there may
B-5
<PAGE>
be less governmental regulation and supervision of foreign stock
exchanges, brokers and listed companies.
In addition, investing in foreign securities also involves the
following considerations comprising both risks and opportunities not
typically associated with investing in U.S. securities: fluctuations in
exchange rates of foreign currencies; possible imposition of exchange
control regulation or currency restrictions that would prevent cash from
being brought back to the U.S.; lack of uniform accounting, auditing, and
financial reporting standards; lack of uniform settlement periods and
trading practices; less liquidity and frequently greater price volatility
in foreign markets than in the U.S.; possible expropriation or
nationalization of assets; and possible imposition of foreign taxes.
Furthermore, the U.S. government has from time to time in the past
imposed restrictions, through taxation and otherwise, on foreign
investments by U.S. investors such as the Fund.
To the extent portfolio securities are denominated in foreign
currencies, the value of the assets of the Fund as measured in U.S.
dollars may be affected favorably or unfavorably by changes in foreign
currency exchange rates and exchange control regulations. Although the
Fund values its assets daily in terms of U.S. dollars, it does not intend
to convert its holdings of foreign securities into U.S. dollars on a
daily basis.
As one way of managing foreign currency exchange rate risk, the
fund may enter into forward foreign currency exchange contracts (i.e.,
purchasing or selling foreign currencies at a future date). These contracts
are usually entered into in order to fix the U.S. dollar currencies at a
future date). These contracts are usually entered into in order to fix
the U.S. dollar value of a security which the fund has agreed to buy or sell,
but which will not settle until some time in the future. These contracts may
also be used to hedge the U.S. dollar value of a security already owned by the
Fund (position hedging), particularly if a decrease in the value of the
currency in which the foreign security is denominated is expected. This
method of protecting the value of the Fund's securities against a decline in
the value of a currency does not eliminate fluctuations in the underlying
prices of the securities, but it does establish a rate of exchange which
the fund may rely upon at a predetermined future point in time.
The adviser seeks to benefit the Fund when using forward contracts,
although the Adviser may not be able to project precisely the future exchange
rates between foreign currencies and the U.S. dollar. The Fund may therefore,
incur a gain or a loss on a forward contract. A forward contract may help
reduce the Fund's losses on a security when a foreign currency's value
decreases but it may likewise reduce the potential gain on a security if the
foreign currency's value increases.
PORTFOLIO TURNOVER. Due to the Fund's long-term investment style,
the Fund anticipates that portfolio turnover will not exceed 100% per
year. Portfolio turnover results from a change of the securities held by
the Fund and involves expenses to the Fund in the form of brokerage
commissions and other transaction costs. Portfolio turnover may also
have an impact on the amount of taxable distributions to shareholders.
Although the rate of portfolio turnover will not be a limiting factor
B-6<PAGE>
when the Adviser deems change appropriate and in the best interest of the
Fund's shareholders, the relatively low turnover rate anticipated in the
Fund may benefit the Fund and its shareholders in the form of lower capital
expenses and lower taxable distributions.
INVESTMENT IN FIXED INCOME SECURITIES. Under normal circumstances, the
Fund anticipates that substantially all of its assets (ordinarily 90% or
more) will be invested in equity securities. Any assets not invested in
equity securities will be invested in cash and certain cash equivalents,
money market instruments, U.S. Government securities and certain other
fixed income securities for liquidity needs or may be so invested, in
extraordinary circumstances, as a defensive position due to uncertainties
in the stock market. The Fund will limit its investments in corporate
bonds and notes to those which are considered investment grade (generally,
bonds and notes that have received a rating from Standard & Poor's Corporation
of "BBB" or better or from Moody's Investors Service, Inc. of "Baa" or
better) at the time of their purchase. For further information regarding
Standard & Poor's and Moody's ratings for corporate bonds and notes, see
Appendix A to this Statement of Additional Information.
The Fund's investments in fixed income securities will generally be
subject to both credit risk and market risk. Credit risk relates to the
ability of the issuer to meet interest or principal payments as they
become due. Market risk relates to the fact that market values of fixed
income securities generally will be affected by changes in the level of
interest rates. Generally, as interest rates rise, the market value of
fixed income securities will fall. Conversely, as interest rates fall,
the market value of fixed income securities will rise. In addition,
yields and market values of lower-rated securities tend to fluctuate more
than highly-rated securities. The risks of greater fluctuations in yield
and value occur because investors generally perceive issuers of lower
rated securities to be less creditworthy. Fluctuations in market value
do not affect the interest income from the securities, but are reflected
in the Fund's net asset value.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements
with "primary dealers" in U.S. government securities and member banks of
the Federal Reserve System which furnish collateral equal in value or
market price to at least 102% of the amount of their repurchase
obligation. In a repurchase agreement, the Fund purchases a security
from a seller which undertakes to repurchase the security at a specified
resale price on an agreed future date (ordinarily a week or less). The
resale price generally exceeds the purchase price by an amount which
reflects an agreed-upon market interest rate for the term of the
repurchase agreement. The principal risk is that, if the seller
defaults, the Fund might suffer a loss to the extent that the proceeds
from the sale of the underlying securities and other collateral held by
the Fund in connection with the related repurchase agreement are less
than the repurchase price. Repurchase agreements maturing in more than
seven days are considered by the Fund to be illiquid.
B-7
<PAGE>
INVESTMENT RESTRICTIONS
The Fund has adopted the following restrictions and policies
relating to the investment of its assets and its activities, which are
fundamental policies and may not be changed without the approval of the
holders of a majority of the Fund's outstanding voting securities (which
for this purpose and under the Investment Company Act of 1940 means the
lesser of (i) 67% of the shares represented at a meeting at which more
than 50% of the outstanding shares are represented or (ii) more than 50%
of the outstanding shares).
Any investment restriction which involves a maximum percentage of
securities or assets shall not be considered to be violated unless an
excess over the percentage occurs immediately after, and is caused by, an
acquisition of securities or assets of, or borrowings by, the Fund.
The Fund may not:
1. As to 75% of its total assets, purchase securities of any one
issuer, other than those issued or guaranteed by the United States
government, if immediately after such purchase more than 5% of the
Fund's total assets would be invested in securities of such issuer
or the Fund would own 10% or more of the outstanding voting securities
of such issuer.
2. Invest 25% or more of its total assets in the securities of
issuers in any particular Standard & Poor's 500 industry sector.
3. The Fund may not issue senior securities, except as permitted
under the Investment Company Act of 1940.
4. Make investments for the purpose of exercising control or
management.
5. Purchase or sell real estate or interests in real estate,
including real estate limited partnerships; provided, however, that the
Fund may invest in securities secured by real estate or interests therein
or issued by companies, including real estate investment trusts, which
invest in real estate or interests therein.
6. Purchase or sell commodities or commodity contracts, including
future contracts.
7. Purchase any securities on margin, except that the Fund may
obtain such short-term credit as may be necessary for the clearance of
purchases and sales of portfolio securities.
8. Make loans to other persons; provided, however, that, for
purposes of this restriction, the term "loan" does not include the
purchase of an issue of publicly distributed bonds or debentures,
B-8
<PAGE>
government obligations, certificates of deposit, bankers' acceptances or
repurchase agreements.
9. Borrow amounts in excess of 10% of its total assets, taken at
market value, and then only from banks as a temporary measure for
extraordinary or emergency purposes such as the redemption of Fund
shares.
10. Mortgage, pledge, hypothecate or in any manner transfer, as
security for indebtedness, any securities owned or held by the Fund
except as may be necessary in connection with borrowings mentioned in
(10) above, and then such mortgaging, pledging or hypothecating may not
exceed 10% of the Fund's total assets, taken at market value.
11. Invest more than 10% of the Fund's total assets in securities
for which there are legal or contractual restrictions on resale,
securities which are not readily marketable, securities of foreign
issuers which are not listed on a recognized domestic or foreign
securities exchange, or other illiquid securities.
12. Underwrite securities of other issuers except insofar as the
Fund may be deemed an underwriter under the Securities Act of 1933 in
selling portfolio securities.
13. Write, purchase or sell puts, calls or combinations thereof.
14. Purchase or sell interests in oil, gas or other mineral
exploration or development programs or leases; provided, however, that
the Fund may purchase or sell securities of entities which invest in such
programs.
B-9<PAGE>
MANAGEMENT OF THE FUND
Reference is made to "Management of the Fund" in the Prospectus.
Set forth below is further information about the Fund's management.
The Board of Directors is responsible for the overall management of
the Fund, including general supervision of its investment activities.
The officers, who administer the Fund's daily operations, are appointed
by the Board of Directors. The current Directors and principal officers
of the Fund, their addresses, and their principal occupations for the
past five years are set forth below. "Interested" directors, as defined
by the 1940 Act, are designated by an asterisk.
B-10<PAGE>
Positions Principal Occupations
Name and Address (Age) with During the Past 5 Years
Registrant
-------------------------------------------------------------------
*Gene W. Henssler (57) Director, President, G.W. Henssler
1281 Kennestone Circle President & Associates, Ltd.
Suite 100
Marietta, Georgia
30066
*Patricia T. Henssler Director, Treasurer, G.W. Henssler
(43) Executive & Associates, Ltd.;
1281 Kennestone Circle Vice Patricia T. Henssler,
Suite 100 President, CPA
Marietta, GA 30066 Treasurer,
Secretary
Kenneth M. Davies (58) Director Principal, Kenneth M.
1675 Penobscot Davies, P.C.
Building
Detroit, MI 48226
Dr. Ladd M. Kochmann Director Professor of Finance -
(53) Kennesaw State
Kennesaw State University
University
1000 Chastain Road
Kennesaw, GA 30144-
5591
Mr. James L. Brookover Director Portfolio Manager, Reams
(47) Asset Management
4725 Stonebridge Court
Columbus, IN 47201
Mr. Ted L. Parrish Vice Senior Associate, G.W.
(25) President Henssler & Associates,
1281 Kennestone Circle Ltd.
Suite 100
Marietta, GA 30066
Mr. William G. Lako, Vice Senior Associate, G.W.
Jr. (27) President Henssler & Associates,
1281 Kennestone Circle Ltd.
Suite 100
Marietta, GA 30066
Mr. Scott L. Keller Vice Associate, G.W. Henssler
(31) President & Associates, Ltd.; Vice
1281 Kennestone Circle President, The Fuji
Suite 100 Bank, Ltd.
Marietta, GA 30066
B-11<PAGE>
The Fund pays each Director who is not affiliated with the Adviser
an annual fee of $2,500 per year plus $100 per meeting attended, together
with such directors' actual out-of-pocket expenses relating to attendance
at meetings. The $2,500 annual fee is payable in four equal quarterly
installments and is paid as of the date of each quarterly Board meeting.
ADVISORY AND ADMINISTRATION ARRANGEMENTS
Reference is made to "Management of the Fund--Management
Arrangements" in the Prospectus for certain information concerning the
management and Advisory arrangements of the Fund.
ADVISORY AND OPERATIONAL SERVICE AGREEMENTS. Henssler Asset Management,
LLC (the "Adviser") has entered into an Investment Advisory Agreement
(the "Advisory Agreement") with the Fund to provide investment management
services to the Fund. In addition to the Advisory Agreement, the Adviser
has entered into an Administrative Services Agreement (the "Services
Agreement") with the Fund to provide, or make arrangements for the
provision of, virtually all day-to-day operational services to the Fund.
The Adviser is a newly organized affiliate of G.W. Henssler &
Associates, Ltd. ("Henssler & Associates"), an investment manager with
over $325 million currently under private account management, with an
additional $210 million under advisement. Henssler & Associates and
the Adviser are under the common control of Gene W. Henssler, Ph.D. a
financial analyst with over 25 years of experience in investment
management. Henssler & Associates has served as investment adviser to
numerous individual, corporate and institutional investors since its
inception in 1987. Some of the Adviser's officers also serve as officers
of Henssler & Associates.
As explained in the Prospectus, the terms of the Advisory Agreement
and the Services Agreement empower the Adviser, subject to the Board of
Directors of the Fund, to manage the Fund's assets and provide or arrange
for the provision of operational and other administrative services for
the day-to-day operation of the Fund. The combined effect of the
Advisory Agreement and the Services Agreement is to place a cap or
ceiling on the total expenses of the Fund, excepting brokerage interest,
taxes, litigation, and other extraordinary expenses, at an annual rate of
1.20% of the daily net asset value of the Fund.
The Adviser has entered into several agreements with third party
providers to provide, among other services, accounting, administrative,
dividend disbursing, transfer agent, registrar, custodial, distribution,
shareholder reporting, sub-accounting and recordkeeping services to the
Fund.
DURATION AND TERMINATION. Unless earlier terminated as described above,
the Advisory Agreement will remain in effect until May 1, 2000, and
thereafter from year to year if approved annually (a) by the Board of
Directors of the Fund or by a majority of the outstanding shares of
B-12
<PAGE>
the Fund; and (b) by a majority of the Directors who are not parties
to such contract or interested persons (as defined in the Investment
Company Act of 1940) of any such party. Such contract terminates
automatically upon assignment and may be terminated without penalty
on 60 days written notice at the option of either party thereto or
by the vote of the shareholders of the Fund.
PORTFOLIO TRANSACTIONS AND BROKERAGE ALLOCATION
Subject to the policies established by the Board of Directors of the
Fund, the Adviser is responsible for the Fund's portfolio decisions, the
placing of the Fund's portfolio transactions and the negotiation of the
commissions to be paid on such transactions. In executing such
transactions, the Adviser will use its best efforts to obtain the
execution of portfolio transactions at prices which are advantageous to
the Fund and involving commission rates which are reasonable in relation
to the value of the transaction.
GENERAL. The Fund has no obligation to deal with any broker or dealer in
the execution of transactions for its portfolio securities. The Adviser
will select brokers or dealers taking into account such factors as price
(including the commission or spread), size of order, difficulty of
execution and operational facilities of the firm involved and the firm's
risk in positioning a block of securities. The Adviser will also
consider the research services which the broker or dealer has provided to
the Adviser relating to the security involved in the transaction and/or
to other securities. Consistent with the Code of Conduct of the NASD and
such other policies as the Board of Directors may determine, the Fund may
consider sales of shares of the Fund as a factor in the selection of
brokers or dealers to execute portfolio transactions for the Fund.
RESEARCH SERVICES. Under Section 28(e) of the Securities Exchange Act of
1934 and its Advisory Agreement with the Fund, the Adviser is authorized
to pay a brokerage commission in excess of that which another broker
might have charged for effecting the same transaction, in recognition of
the value of brokerage and/or research services provided by the broker.
These research and investment information services make available to the
Adviser for its analysis and consideration the views and information of
individuals and research staffs of other securities firms. These services
may be useful to the Adviser in connection with Advisory clients other
than the Fund and not all such services may be useful to the Adviser in
connection with the Fund. Although such information may be a useful
supplement to the Adviser's own investment information in rendering
services to the Fund, the value of such research and services is not
expected to reduce materially the expenses of the Adviser in the
performance of its services under the Advisory Agreement and will not
reduce the management fees payable to the Adviser by the Fund.
OVER-THE-COUNTER TRANSACTIONS. The Fund may invest in securities traded
in the over-the-counter market. Transactions in the over-the-counter
market are generally principal transactions with dealers and the costs of
such transactions involve dealer spreads rather than brokerage
commissions. The Fund, where possible, deals directly with the dealers
who make a market in the securities involved except in those
circumstances where better prices and execution are available elsewhere.
B-13<PAGE>
When a transaction involves exchange listed securities, the Adviser
considers the advisability of effecting the transaction with a broker
which is not a member of the securities exchange on which the security to
be purchased is listed (i.e., a third market transaction) or effecting
the transaction in the institutional or fourth market.
POTENTIAL CONFLICTS. The Fund may have investment objectives and
strategies similar to those of other clients of the Adviser.
Accordingly, securities held by the Fund may also be held by other
clients of the Adviser and the Adviser may find it desirable to purchase
or sell the same security for the Fund and another client of the Adviser
at the same time. Similarly, due to differing investment objectives or
strategies, the Adviser may find it desirable to purchase a security for
the Fund at the same time that the Adviser wishes to sell the security
for another of the Adviser's clients, or vice versa. In either of the
foregoing circumstances, transactions in the securities will be made,
insofar as feasible, for the Fund and the Adviser's other clients in a
manner deemed equitable to all.
DETERMINATION OF NET ASSET VALUE
The net asset value of the shares of the Fund is determined as of
4:00 P.M. on each day during which The New York Stock Exchange is open
for trading. The New York Stock Exchange is not open on New Year's Day,
Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day. The Fund
will also determine its net asset value once daily on each day (other
than a day during which no shares were tendered for redemption and no
order to purchase or sell shares was received by the Fund) in which there
is sufficient trading in its portfolio securities that the net asset
value might be materially affected. The net asset value per share is
computed by dividing the sum of the value of the securities held by the
Fund plus any cash or other assets (including interest and dividends
accrued but not yet received) minus all liabilities (including accrued
expenses) by the total number of shares outstanding at such time, rounded
to the nearest cent. Expenses, including the management fee payable to
the Adviser, are accrued daily.
Equity securities listed or traded on a national securities exchange
or quoted on the over-the-counter market are valued at the last sale
price on the day the valuation is made or, if no sale is reported, at the
last bid price. Valuations of fixed income securities are supplied by
independent pricing services approved by Henssler's Board of Directors.
Money market securities with a remaining maturity of 60 days or less are
valued on an amortized cost basis if their original term to maturity from
the date of purchase was 60 days or less, or by amortizing their value on
the 61st day prior to maturity, if their term to maturity from the date
of purchase exceeded 60 days, unless the Board of Directors determines
that such valuation does not represent fair value. Other assets and
securities for which market quotations are not readily available are
valued at fair value as determined in good faith by or under the
direction of Henssler's Board of Directors.
B-14<PAGE>
PURCHASE OF SHARES
Reference is made to "Purchase of Shares" in the Prospectus. Set
forth below is further information about the purchase of shares of the
Fund.
PURCHASE BY EXCHANGE OF SECURITIES. The Board of Directors of Henssler
has determined that it is in the best interest of the Fund to offer its
shares, in lieu of cash payment, for securities approved by the Adviser
to be purchased by the Fund. This will enable an investor to purchase
shares of the Fund by exchanging securities owned by the investor for
shares of the Fund. The Directors believe that such a transaction can
benefit the Fund by allowing it to acquire securities for its portfolio
without paying brokerage commissions. For the same reason, the
transaction may also be beneficial to investors. Securities will be
exchanged for shares of the Fund all in the absolute discretion
of the Adviser. Cash equivalent securities may be contributed to the
Fund in accordance with the wishes of the investor and the consent of the
Adviser. The exchange of securities in an investor's portfolio for
shares of the Fund is treated for federal income tax purposes as
a sale of such securities and the investor may, therefore, realize a
taxable gain or loss.
The Fund shall not enter into such transactions, however, unless the
securities to be exchanged for Fund shares are securities whose values
are readily ascertainable and are readily marketable, comply with the
investment policies of the Fund, are of the type and quality which would
normally be purchased for the Fund's portfolio, are securities which the
Fund would otherwise purchase, and are acquired for investment and not
for immediate resale. The value of the Fund's shares used to purchase
portfolio securities as stated herein will be determined at such time as
the Fund next determines its net asset value. Such securities will be
valued in accordance with the same procedure used in valuing the Fund's
portfolio securities. See "Additional Information - Determination of Net
Asset Value." If you wish to acquire the Fund's shares in exchange for
securities you should contact Declaration Service Company at the address
or telephone number shown on the back page of the Prospectus. The Board
of Directors of Henssler reserves the right to terminate this privilege
at any time.
THE DISTRIBUTOR
Reference is made to "The Distributor" in the Prospectus. Set forth
below is further information about the Distributor and the Distribution
Agreement.
The Adviser has entered into a Distribution Agreement on the Fund's
behalf with Declaration Distributors, Inc. (the "Distributor"). Under
the Agreement, the Distributor will provide distribution and distribution
services to the Fund in exchange for a fee to be paid by the Adviser and
reimbursement by the Adviser of the Distributor's out of pocket expenses
incurred in connection with the provision of the foregoing.
B-15
<PAGE>
The Distribution Agreement has an initial term of one year and will
remain in effect from year to year thereafter, but only so long as such
continuance is approved at least annually by a vote of Henssler's Board
of Directors or by vote of a majority of the outstanding voting
securities of the Fund and of the Directors who, except for their
positions as Directors, are not "interested persons" of Henssler (as
defined in the Investment Company Act). In addition, in the Distribution
Agreement, either party may terminate the Distribution Agreement upon 60
days written notice to the other party. The Distribution Agreement
terminates automatically if "assigned" (as defined in the Investment
Company Act). The Distribution Agreement is subject to the same renewal
requirements and termination provisions as the Advisory Agreement
described under "Management of the Fund - Management Arrangements."
REDEMPTION OF SHARES
Reference is made to "Redemption of Shares" in the Prospectus for
certain information as to the redemption of shares of the Fund.
The right to redeem shares or to receive payment with respect to any
such redemptions may be suspended for more than seven days only for
periods during which trading on the New York Stock Exchange is restricted
as determined by the Securities and Exchange Commission or such Exchange
is closed (other than customary weekend and holiday closings), or any
period during which an emergency exists, as defined by the Securities and
Exchange Commission, as a result of which disposal of portfolio
securities or determination of the net asset value of the Fund is not
reasonably practicable, and for such other periods as the Securities and
Exchange Commission may by order permit for the protection of
shareholders of the Fund.
The Fund has made an election with the Securities and Exchange
Commission to pay in cash all redemptions requested by any shareholder of
record limited in amount during any 90-day period to the lesser of
$250,000 or 1% of the net assets of the Fund at the beginning of such
period. Such commitment is irrevocable without the prior approval of the
Securities and Exchange Commission. Redemptions in excess of the above
limits may be paid in whole or in part, in investment securities or in
cash, as the Board of Directors may deem advisable; however, payment will
be made wholly in cash unless the Board of Directors believes that
economic or market conditions exist which would make such a practice
detrimental to the best interests of the Fund. If redemptions are paid
in investment securities, such securities will be valued as set forth in
the Prospectus under "Additional Information - Determination of Net Asset
Value" and a redeeming shareholder would normally incur brokerage
expenses if he converted these securities to cash.
The Fund will generally first sell any cash equivalent securities it
holds to meet redemptions and, to the extent these proceeds are
insufficient to meet redemptions, the Fund will sell other portfolio
B-16
<PAGE>
securities at the discretion of the Adviser. See "Redemption of Shares"
in the Prospectus.
The value of shares at the time of redemption may be more or less
than the shareholder's cost, depending on the market value of the
securities held by the Fund at such time.
SHAREHOLDER SERVICES
The Fund offers the following shareholder services designed to
facilitate investment in its shares.
INVESTMENT ACCOUNT. Each shareholder has an Investment Account and will
receive statements from the Fund's Transfer Agent after each transaction
showing the cumulative activity in the account since the beginning of the
year. After the end of each year, shareholders will receive federal
income tax information regarding dividends and capital gains
distributions.
REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS DISTRIBUTION. Unless
specific instructions are given as to the method of payment of dividends
and capital gains distributions, dividends and distributions will
automatically be reinvested in additional shares of the Fund. Such
reinvestment will be at the net asset value of shares of the Fund,
without sales charge, as of the close of business on the ex-dividend date
of the dividend or distribution. Shareholders may elect in writing to
receive either their income dividends or capital gains distributions, or
both, in cash, in which event payment will be mailed on the payment date.
Shareholders may, at any time, notify the Transfer Agent in writing
that they no longer wish to have their dividends and/or distributions
reinvested in shares of the Funds or vice versa and, commencing ten days
after the receipt by the Transfer Agent of such notice, those
instructions will be effected.
DIVIDENDS, DISTRIBUTIONS AND TAXES
DIVIDENDS AND DISTRIBUTIONS. The Fund intends to distribute all of its
net investment income and net realized long- or short-term capital gains,
if any, to its shareholders annually after the close of the Fund's fiscal
year. See "Shareholder Services - Reinvestment of Dividends and Capital
Gains Distributions" for information concerning the manner in which
dividends and distributions may be automatically reinvested in shares of
the Fund. Shareholders may elect in writing to receive any such
dividends or distributions, or both, in cash. Dividends and
distributions are taxable to shareholders as discussed below whether they
are reinvested in shares of the Fund or received in cash.
B-17<PAGE>
TAXES. The Fund intends to elect to qualify for the special tax
treatment afforded regulated investment companies under the Internal
Revenue Code of 1986, as amended (the "Code"). If it so qualifies, the
Fund will not be subject to federal income tax on the part of its net
ordinary income and net realized capital gains which it distributes to
shareholders.
B-17
<PAGE>
Dividends paid by the Fund from its ordinary income, and
distributions of the Fund's net realized short-term capital gains,
are taxable to no-tax-exempt investors as ordinary income. Ordinary
income dividends may be eligible for the 70% dividends received
deduction allowed to corporations under the Code, if certain
requirements are met.
Distributions made from the Fund's net realized long-term capital
gains are taxable to shareholders as long-term capital gains regardless
of the length of time the shareholder has owned Fund shares. Pursuant to
the Taxpayer Relief Act of 1977, different maximum rates of tax are
imposed on individuals, estates or trusts on various transactions giving
rise to long-term capital gain. For this purpose, long-term capital
gains are divided into three tax-rate groups: a 20% group (for capital
gains from assets held for more than 18 months), a 25% group (for certain
recaptured real property depreciation) and a 28% group (for all other
long-term capital gain). The Fund will supply information to its
shareholders to determine the appropriate tax-rate group of its long-term
capital gain distributions.
Upon redemption of Fund shares held by a non-tax-exempt investor,
such investor, generally, will realize a capital gain or loss equal to
the difference between the redemption price received by the investor and
the adjusted basis of the shares redeemed. If the redemption by the Fund
is in-kind, capital gain or loss will be measured by the difference
between the fair market value of securities received and the adjusted
basis of the shares redeemed. Such capital gain or loss, generally, will
constitute a short-term capital gain or loss if the redeemed Fund shares
were held for twelve months or less, and long-term capital gain or loss
if the redeemed Fund shares were held for more than twelve months. If,
however, Fund shares were redeemed within six months of their purchase by
an investor, and if a capital gain dividend was paid with respect to the
Fund's shares while they were held by the investor, then any loss
realized by the investor will be treated as long-term capital loss to the
extent of the capital gain dividend.
Under certain provisions of the Code, some shareholders may be
subject to 31% withholding on reportable dividends, capital gains
distributions and redemption payments ("back-up withholding").
Generally, shareholders subject to back-up withholding will be those for
whom a taxpayer identification number is not on file with the Fund or
who, to such Fund's knowledge, have furnished an incorrect number. When
establishing an account, an investor must certify under penalty of
perjury that such number is correct and that he is not otherwise subject
to back-up withholding.
Dividends paid by the Fund from its ordinary income and
distributions of the Fund's net realized short-term capital gains paid to
shareholders who are non-resident aliens will be subject to a 30% United
B-18
<PAGE>
States withholding tax under existing provisions of the Code applicable
to foreign individuals and entities unless a reduced rate of withholding
or a withholding exemption is provided under applicable treaty law. Non-
resident shareholders are urged to consult their own tax advisers
concerning the applicability of the United States withholding tax.
The Code requires each regulated investment company to pay a
nondeductible 4% excise tax to the extent the company does not
distribute, during each calendar year, 98% of its ordinary income,
determined on a calendar year basis, and 98% of its capital gains,
determined, in general, on an October 31 year-end, plus any undistributed
amount from prior years. The Fund anticipates that it will make
sufficient timely distributions to avoid imposition of the excise tax. If
the Fund pays a dividend in May which was declared in the previous
October, November or December to shareholders of record on a date in
those months, then such dividend or distribution will be treated for tax
purposes as being paid on December 31 and will be taxable to shareholders
as if received on December 31.
The foregoing is a general and abbreviated summary of the applicable
provisions of the Code and Treasury regulations presently in effect. For
the complete provisions, reference should be made to the pertinent Code
sections and the Treasury regulations promulgated thereunder. The Code
and these Treasury regulations are subject to change by legislative or
administrative action.
Dividends and capital gains distributions may also be subject to
state and local taxes.
The federal income tax consequences set forth above do not address
any particular tax considerations a shareholder of the Fund might have.
Shareholders are urged to consult their tax Advisers as to the particular
tax consequences of the acquisition, ownership and disposition of shares
of the Fund, including the application of state, local and foreign tax
laws and possible future changes in federal tax laws. Foreign investors
should consider applicable foreign taxes in their evaluation of an
investment in the Fund.
PERFORMANCE INFORMATION
Reference is made to "Performance Information" in the Prospectus.
Set forth below is further information regarding performance of the Fund.
As stated in the Prospectus, from time to time the Fund may provide
its total return in advertisements, sales literature or reports, and
other communications to shareholders. The Fund's total return is
calculated based on the Fund's change in net asset value per share
between the beginning and end of the period shown and assumes
reinvestment of the Fund's dividend and capital gains distributions
during the period.
B-19<PAGE>
Total return figures will be computed according to a formula
prescribed by the Securities and Exchange Commission. The formula can be
expressed as follows:
P(1+T) n = ERV
Where P = a hypothetical initial payment of $10,000
T = average annual total return
N = number of years
ERV = Ending Redeemable Value of a hypothetical $10,000 payment
made at the beginning of the 1, 5, or 10 years (or other)
periods at the end of the 1, 5, or 10 (or other) periods (or
fractional portion thereof).
NOTE: The ERV assumes complete redemption of the hypothetical investment
at the end of the measuring period. The Fund's net investment income
changes in response to fluctuations in interest rates, dividends declared
and the expenses of the Funds.
There may be a time when the Fund advertises its "yield." Yield
figures are based on historical earnings and, like the rate of return,
are not intended to indicate future performance. The yield of the Fund
refers to the income generated by an investment in the Fund over a
thirty-day (or one month) period (which period will be stated in the
advertisement). The yield for any period is computed by dividing the net
investment income per share earned during such period by the maximum
public offering price per share on the last day of the period, and then
annualizing such 30-day (or one month) yield in accordance with a formula
prescribed by the Securities and Exchange Commission. The Fund may also
advertise in terms of sales literature an "actual distribution" which is
computed in the same manner as yield except that actual income dividends
declared per share during the period in question is substituted for net
investment income per share. The Fund's yield will only be advertised
when accompanied by the Fund's total return.
The Fund's performance will vary from time to time depending upon
market conditions, the composition of its portfolio and its operating
expenses. Consequently, any given performance quotation should not be
considered representative of the Fund's performance for any specified
period in the future. In addition, because performance will fluctuate,
it may not provide a basis for comparing an investment in the Fund with
certain bank deposits or other investments that pay a fixed yield for a
stated period of time.
B-20<PAGE>
FINANCIAL STATEMENTS
The Fund's Statement of Assets and Liabilities as of June 8,
1998, which has been audited by McCurdy & Associates CPA's, Inc., is attached
to this Statement of Additional Information.
GENERAL INFORMATION
DESCRIPTION OF SHARES. The Henssler Funds, Inc. ("Henssler") was
incorporated under Maryland law on February 12, 1998. It has an
authorized capital of 500,000,000 shares of Common Stock, par value
$.0001 per share, 100,000,000 shares of which have been classified as
shares of common stock of The Henssler Equity Fund (the "Fund"). The
Board of Directors has the power to authorize and issue additional
classes of stock, without stockholder approval, by classifying or
reclassifying unissued stock, subject to the requirements of the Act. In
the event of liquidation, each share of Common Stock is entitled to a pro
rata portion of the particular portfolio's assets after payment of debts
and expenses. Shareholders of the Fund are entitled to one vote for each
share held and fractional votes for fractional shares held and will vote
on the election of Directors and any other matter submitted to a
shareholder vote. In addition, shareholders have the right to remove
Directors. Henssler does not intend to hold meetings of shareholders in
any year in which the Act does not require shareholders to act upon any
of the following matters: (i) election of Directors; (ii) approval of an
investment advisory agreement; (iii) approval of a distribution
agreement; and (iv) ratification of selection of independent auditors.
Voting rights for Directors are not cumulative. Shares issued are fully
paid and non-assessable and have no preemptive or conversion rights.
PRINCIPAL SHAREHOLDERS. As a newly organized fund, the Fund currently
has only one shareholder, Gene W. Henssler, Ph.D. who has purchased
10,000 shares of the Fund to provide initial capitalization of $100,000
to the Fund. Dr. Henssler is a Director of Henssler, and serves as
President of the Fund. No other officers or directors currently own
shares in the Fund.
INDEPENDENT ACCOUNTANTS. McCurdy & Associates CPA's, Inc., 27955 Clemens
Road, Westlake, Ohio 44145 has been selected as the independent
accountants of the Fund. The independent accountants are responsible for
auditing the financial statements of the Fund.
CUSTODIAN. Star Bank, N.A., Star Bank Center, 425 Walnut Street,
Cincinnati, Ohio 45202, acts as Custodian of the Fund's assets. The
Custodian is responsible for safeguarding and controlling the Fund's cash
and securities, handling the delivery of securities and collecting
interest on the Fund's investments.
TRANSFER, REDEMPTION, AND DIVIDEND DISBURSING AGENT. Declaration Service
Company, 555 North Lane, Suite 6160, Conshohocken, PA 19428, acts as the
Fund's Transfer, Redemption, and Dividend Disbursing Agent. The
Transfer, Redemption, and Dividend Disbursing Agent is responsible for
B-21
<PAGE>
the issuance, transfer and redemption of shares and the operating,
maintenance and servicing of shareholder accounts.
LEGAL COUNSEL. Kilpatrick Stockton LLP, 1100 Peachtree Street, Suite
2800, Atlanta, Georgia 30309, has been selected as counsel for the Fund.
Kilpatrick Stockton LLP will pass on legal matters for the Fund in
connection with the offering of its shares. Kilpatrick Stockton LLP also
represents the Adviser in regard to Fund-related matters and will pass on
legal matters for them in connection with the offering of the Fund's
shares.
REPORTS TO SHAREHOLDERS. The fiscal year of the Fund ends on April 30 of
each year. The Fund sends to its shareholders at least semi-annually
reports showing the Fund's portfolio and other information. An annual
report, containing financial statements audited by independent auditors,
is sent to shareholders each year.
ADDITIONAL INFORMATION. The Prospectus and this Statement of Additional
Information do not contain all the information set forth in the
Registration Statement and the exhibits relating thereto which Henssler
has filed with the Securities and Exchange Commission, Washington, D.C.,
under the Securities Act of 1933 and the Investment Company Act of 1940,
to which reference is hereby made.
THE HENSSLER FUNDS
STATEMENT OF ASSETS AND LIABILITIES
June 5, 1998
The Henssler
Equity Fund
------------
ASSETS:
Cash in Bank $100,000
--------
Total Assets 100,000
--------
NET ASSETS $100,000
--------
NET ASSETS CONSIST OF:
Capital Paid In $100,000
--------
OUTSTANDING SHARES:
100,000,000 Shares Authorized
at $.0001 Par Value 10,000
NET ASSET VALUE PER SHARE $10
OFFERING PRICE PER SHARE $10
B-22
<PAGE>
The Henssler Funds
NOTES TO FINANCIAL STATEMENTS
June 5, 1998
1. ORGANIZATION
The Henssler Funds are an open-end diversified management
investment company incorporated under the laws of the State
of Maryland on February 12, 1998. The Fund's investment
objective is to seek growth of capital. The Fund seeks to
achieve its objective by investing substantially all of its
assets in securities listed on a national or foreign
securities exchange or quoted in the NASDAQ National Market
System.
The Funds have an authorized capital of 500,000,000 shares of
common stock, par value $.0001 per share, of which
100,000,000 has been classified as one series of shares of
the Henssler Equity Fund.
The Fund uses an independent custodian and transfer agent.
No transactions other than those relating to organizational
matters and the sale of 10,000 shares of the Henssler Equity
Fund have taken place to date.
2. RELATED PARTY TRANSACTIONS
As of June 5, 1998, all of the outstanding shares of the Fund
were owned by Gene Willie Henssler, Ph.D. A shareholder who
beneficially owns, directly or indirectly, more than 25% of
the Fund's voting securities may be deemed a "control person"
(as defined in the 1940 Act) of the Fund. Henssler Asset
Management, LLC is controlled by Gene Willie Henssler Ph.D.,
the Chairman of the Fund.
Henssler Asset Management, LLC, the Fund's investment
adviser, is registered as an investment adviser under the
Investment Advisers Act of 1940.
As compensation for Henssler Asset Management, LLC's services
rendered to the Fund, such Fund pays a fee, computed and paid
monthly, at an annual rate of .50% of the Fund's daily net
assets. Henssler Asset Masnagement, LLLC is also paid an
operating services fee of .70% of the Fund's daily net assets.
The adviser has voluntarily agreed to limit total operating
expenses of the Fund (excepting brokerage fees, interest, taxes,
litigation, and other extraordinary expenses) to 1.20% of the
daily net asset value of the Fund.
3. CAPITAL STOCK AND DISTRIBUTION
At June 5, 1998, an unlimited number of shares were authorized
and paid in capital amounted to $100,000 for The Henssler
Equity Fund. Transactions in capital stock were as follows:
Shares Sold:
The Henssler Equity Fund 10,000
Shares Redeemed:
The Henssler Equity Fund 0
------
Net Increase:
The Henssler Equity Fund 10,000
Shares Outstanding:
The Henssler Equity Fund 10,000
<PAGE>
To The Shareholders and Trustees
The Henssler Funds
We have audited the accompanying statement of assets and liabilities of The
Henssler Funds (comprised of The Henssler Equity Fund) as of June 5, 1998.
This financial statement is the responsibility of the Company's management.
Our responsibility is to express an opinion on this financial statement 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 material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
statement of assets and liabilities. An audit also includes assessing the
accounting principles used and significant estimates made by management,
as well as evaluating the overall statement of assets and liabilities
presentation. Our procedures included confirmation of cash held by the
custodian as of June 5, 1998, by correspondence with the custodian. We
believe that our audit provides a reasonable basis for our opinion.
In our opinion, the statement of assets and liabilities referred to above
presents fairly, in all material respects, the financial position of The
Henssler Equity Fund as of June 5, 1998, in conformity with generally
accepted accounting principles.
/s/ McCurdy & Associates CPA's, Inc.
McCurdy & Associates CPA's, Inc.
Westlake, Ohio 44145
June 5, 1998
<PAGE>
APPENDIX A
Ratings of Corporate Debt Obligations
The characteristics of debt obligations rated by Moody's are
generally as follows:
Aaa - Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and are
generally referred to as "gilt edge." Interest payments are protected by
a large or by an exceptionally stable margin and principal is secure.
While the various protective elements are likely to change, such changes
as can be visualized are most unlikely to impair the fundamentally strong
position of such issues.
Aa - Bonds which are rated Aa are judged to be of high quality by
all standards. Together with the Aaa group they comprise what are
generally known as high grade bonds. They are rated lower than the best
bonds because margins of protection may not be as large as in Aaa
securities of fluctuation of protective elements may be of greater
amplitude or there may be other elements present which make the long-term
risks appear somewhat larger than in Aaa securities.
A - Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper medium grade obligations.
Factors giving security to principal and interest are considered adequate
but elements may be present which suggest a susceptibility to impairment
sometime in the future.
Baa - bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present
but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such bonds
lack outstanding investment characteristics and in fact have speculative
characteristics as well.
Ba - Bonds which are rated Ba are judged to have speculative
elements; their future cannot be considered as well assured. Often the
protection of interest and principal payments may be very moderate and
thereby not well safeguarded during other good and bad times over the
future. Uncertainty of position characterizes bonds in this class.
B - Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time
may be small.
Caa - Bonds which are rated Caa are of poor standing. Such issues
may be in default or there may be present elements of danger with respect
to principal or interest.
B-23<PAGE>
Ca - Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or have
other marked shortcomings.
The characteristics of debt obligations rated by Standard & Poor's
are generally as follows:
AAA - This is the highest rating assigned by Standard & Poor's to a
debt obligation and indicates an extremely strong capacity to pay
principal and interest.
AA - Bonds rated AA also qualify as high quality debt obligations.
Capacity to pay principal and interest is very strong, and in the
majority of instances they differ from AAA issues only in small degree.
A - Debt rated A has a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse effects
of changes in circumstances and economic conditions than debt in higher
rated categories.
BBB - Debt rated BBB is regarded as having an adequate capacity to
pay interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher
rated categories.
BB, B, CCC, CC - Debt rated BB, B, CCC or CC is regarded, on
balance, as predominantly speculative with respect to capacity to pay
interest and repay principal in accordance with the terms of the
obligation. BB indicates the lowest degree of speculation among
obligations rated lower than BBB and CC the highest degree of
speculation. While such debt will likely have some quality and
protective characteristics, these are outweighed by large uncertainties
or major risk exposures to adverse conditions.
C - This rating is reserved for income bonds on which no interest is
being paid.
A bond rating is not a recommendation to purchase, sell or hold a
security, inasmuch as it does not comment as to market price or
suitability for a particular investor.
RATINGS OF COMMERCIAL PAPER
The Funds' purchases of commercial paper are limited to those
instruments rated A-1 or A-2 by Standard & Poor's or Prime-1 or Prime-2
by Moody's.
Commercial paper rated A-1 or A-2 by Standard & Poor's has the
following characteristics: liquidity ratios are adequate to meet cash
requirements; the issuer's long-term debt is rated "A" or better; the
issuer has access to at least two additional channels of borrowing; and
basic earnings and cash flow have an up and down trend with allowances
made for unusual circumstances. Typically, the issuer's industry is
B-24
<PAGE>
well-established and the issuer has a strong position within the
industry. Relative strength or weakness of the above factors determines
whether an insurer's commercial paper is rated A-1 or A-2, with the
relative degree of safety of commercial paper rated A-2 not being as high
as for commercial paper rated A-1.
Commercial paper rated Prime-1 or Prime-2 by Moody's is the highest
commercial paper rating assigned by Moody's. Among the factors
considered by Moody's in assigning ratings are the following: (1)
evaluation of management of the issuer; (2) economic evaluation of the
issuer's industry or industries and an appraisal of speculative-type
risks which may be inherent in certain areas; (3) evaluation of the
issuer's products in relation to competition and consumer acceptance; (4)
liquidity; (5) amount and quality of long-term debt; (6) trend of
earnings over a period of ten years; (7) financial strength of a parent
company and the relationships which exist with the issuer; and (8)
recognition by the management of obligations which may be present or may
arise as a result of public interest questions and preparations to meet
such obligations. Relative strength or weakness of the above factors
determine how the issuer's commercial paper is rated within various
categories.
A commercial paper rating is not a recommendation to purchase, sell
or hold a particular instrument, inasmuch as it does not comment as to
market price or suitability for a particular investment.
B-25<PAGE>
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits.
---------------------------------
A. Financial Statements of the Fund. *
(i) Financial Statements included in Part A:
None
(ii) Financial Statements included in Part B:
Statement of Assets and Liabilities, June 5, 1998
Notes to Financial Statements
Independent Auditor's Report
B. Exhibits:
Exhibit
Number:
- ------
1. Articles of Incorporation of Registrant, incorporated.
by reference from Registrant's Registration Statement
filed February 18, 1998.
2. By-laws of Registrant, incorporated by reference from
Registrant's Registration Statement filed February 18,
1998.
3. Inapplicable.
4. Inapplicable.
5. Form of Advisory Agreement by and between the Registrant
and the Adviser, incorporated by reference from Registrant's
Registration Statement filed February 18, 1998.
6. Form of Distribution Agreement by and among the
Adviser, Registrant and Declaration Distributors,
Inc., incorporated by reference from Registrant's
Registration Statement filed February 18, 1998.
C-1<PAGE>
7. Inapplicable.
8. Form of Custody Agreement by and among the Adviser,
Registrant And Star Bank, N.A. incorporated by reference
from Registrant's Registration Statement filed February
18, 1998.
9.1 Form of Operating Services Agreement by and between the
Registrant and the Adviser incorporated by reference from
Registrant's Registration Statement filed February 18, 1998.
9.2 Form of Investment Services Agreement by and among the
Adviser, Registrant and Declaration Service Company
incorporated by reference from Registrant's Registration
Statement filed February 18, 1998.
10. Opinion of Kilpatrick Stockton LLP as to legality
of the shares incorporated by reference from Registrant's
Registration Statement filed May 26, 1998.
11. Consent of Independent Auditors.*
12. Inapplicable.
13. Agreement concerning initial capital of the Fund, incorporated
by reference from Registrant's Registration Statement filed
May 26, 1998.
14. Inapplicable.
15. Inapplicable.
16. Inapplicable.
* Filed herewith
Item 25. Persons Controlled by or under Common Control with Registrant.
-------------------------------------------------------------
C-2
<PAGE>
Henssler Asset Management, LLC, the Fund's Adviser, is a newly-
formed Georgia limited liability company 51% owned by Gene W. Henssler,
Ph.D. and 49% owned by Patricia T. Henssler. The Fund's Adviser is an
affiliate of G.W. Henssler & Associates, Ltd., an investment manager
wholly owned by Dr. Henssler with approximately $325 million under private
account management, with an additional $210 million under advisement.
Item 26. Number of Holders of Securities.
-------------------------------
As a newly organized Fund, the Fund currently has only one
shareholder, Dr. Henssler, who has purchased 10,000 shares of the Fund to
provide initial capitalization of $100,000 to the Fund.
Item 27. Indemnification.
---------------
Section 2-418 of the General Corporation Law of the State of
Maryland, Article VI of Registrant's Charter filed as Exhibit 1,
Article VII of Registrant's By-Laws filed as Exhibit 2, and the
Distribution Agreement filed as Exhibit 6 provide, or will provide, for
indemnification.
Registrant's Articles of Incorporation (Article VI) provide
that Registrant shall indemnify its directors and officers to the fullest
extent permitted by law.
Registrant's By-laws (Article VII, Section 1) provide that
Registrant shall indemnify any director and/or officer who was or is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was a director or
officer of Registrant, or is or was serving at the request of Registrant
as a director or officer of another corporation, partnership, joint
venture, trust or other enterprise, against all expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action,
suit or proceeding to the maximum extent permitted by law.
With respect to indemnification of officers and directors,
Section 2-418 of the Maryland General Corporation Law provides that a
corporation may indemnify any director who is made a party to any
threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by
or in the right of Registrant) by reason of service in that capacity, or
is or was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement and expenses
actually and reasonably incurred by him in connection with such action,
suit or proceeding unless (1) it is established that the act or omission
of the director was material to the matter giving rise to the proceeding,
and (a) was committed in bad faith or (b) was the result of active and
deliberate dishonesty; or (2) the director actually received an improper
personal benefit of money, property, or services; or (3) in the case of
any criminal action or proceeding, had reasonable cause to believe that
the act or omission was unlawful. A court of appropriate jurisdiction
C-3<PAGE>
may, however, except in proceedings by or in the right of Registrant or
in which liability has been adjudged by reason of the person receiving an
improper personal benefit, order such indemnification as the court shall
deem proper if it determines that the director is fairly and reasonably
entitled to indemnification in view of all the relevant circumstances,
whether or not the director has met the requisite standard of conduct.
Under Section 2-418, Registrant may also indemnify officers,
employees and agents of Registrant who are not Directors to the same
extent that it shall indemnify directors and officers, and to such
further extent, consistent with law, as may be provided by general or
specific action of the Board of Directors or contract. Pursuant to
Section 2-418 of the Maryland General Corporation Law, the termination of
any proceeding by judgment, order or settlement does not create a
presumption that the person did not meet the requisite standard of
conduct required by Section 2-418. The termination of any proceeding by
conviction, or a plea of nolo contendere or its equivalent, or an entry
of an order of probation prior to judgment, creates a rebuttable
presumption that the person did not meet the requisite standard of
conduct.
Reference is also made to Section 12 of the Distribution
Agreement filed as Exhibit 6 to this Registration Statement. Section 12
of the Distribution Agreement provides that Registrant, subject to
certain conditions and limitations, shall indemnify, defend and hold
harmless the Underwriter, its officers and directors and any person who
controls the Underwriter within the meaning of the Securities Act of 1933
from and against any and all claims, demands, liabilities and expenses
which they may incur under the Federal securities laws, the common law or
otherwise, arising out of or based upon any alleged untrue statement of a
material fact contained in the Registration Statement or any related
Prospectus and/or Statement of Additional Information or arising out of
or based upon any alleged omission to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading.
Reference is also made to Section 6 of the Advisory Agreement
filed as Exhibit 5 to this Registration Statement. Section 6 provides
that the Adviser shall not be liable for any error of judgment or mistake
of law or for any loss arising out of any investment or for any act or
omission in the management of the Registrant, except for willful
misfeasance, bad faith or from negligence in the performance of its
duties, or by reason of reckless disregard of its obligations and duties
under the Advisory Agreement.
The Registrant may purchase insurance on behalf of an officer
or director protecting such person to the full extent permitted under the
General Laws of the State of Maryland, from liability arising from his
activities as officer or director of the Registrant. The Registrant,
however, may not purchase insurance on behalf of any officer or director
of the Registrant that protects or purports to protect such person from
liability to the Registrant or to its shareholders to which such officer
would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence, reckless disregard of the duties involved in the
conduct of his office, active or deliberate dishonesty, receipt of an
improper personal benefit, or in the case of a criminal proceeding that
such person had reasonable cause to believe the act or omission was
unlawful. The corporation may provide similar protection, including a
C-4
<PAGE>
trust fund, letter of credit, or surety bond, not inconsistent with this
section. Insurance or similar protection may also be provided by a
subsidiary or affiliate of the corporation.
Item 28. Business and Other Connections of Investment Adviser
----------------------------------------------------
None.
Item 29. Principal Underwriters.
----------------------
1. The Fund's Distributor, Declaration Distributors, Inc.,
also serves as the distributor for the Declaration Trust Fund, the
Pauze Funds, the JWB Aggressive Growth Fund, and the Noah Fund.
2. Set forth below is information concerning each director
and officer of the Distributor. The principal business address
of the Distributor and each such person is 555 North Lane, Suite 6160,
Conshohocken, PA 19428.
(1) (2) (3)
Position and Offices Positions and Offices
Name with Underwriter With Registrant
---- ---------------- ---------------
Terence P. Smith President None
David F. Ganley Compliance Officer None
Item 30. Location of Accounts and Records.
--------------------------------
Registrant maintains the records required to be maintained by
it under Rules 31a-1(a), 31a-1(b) and 31a-2(a) under the Investment
Company Act of 1940 at its principal executive offices at 1281 Kennestone
Circle, Suite 100, Marietta, Georgia 30066. Certain records, including
records relating to Registrant's stockholders and the physical possession
of its securities, may be maintained pursuant to Rule 31a-3 at the
offices of Registrant's Custodian, Star Bank, N.A., Star Bank Center, 425
Walnut Street, Cincinnati, Ohio 45202, and Transfer Agent, Declaration
Distributors, Inc., 555 North Lane, Suite 6160, Conshohocken, PA 19428.
Item 31. Management Services.
-------------------
None.
C-5<PAGE>
Item 32. Undertakings.
------------
The Registrant undertakes to file a post-effective amendment,
using Financial Statements for the Fund which need not be certified,
within four to six months from the effective date of Registrant's
registration statement under the Securities Act of 1933.
The Directors will call a meeting of shareholders to vote
on the removal of a Director upon the written request of the record
holders of 10% of its outstanding shares. In addition, if the Directors
receive a request from at least 10 shareholders (who have been shareholders
for at least six months) holding shares of the Fund valued at $25,000 or
more or holding at least 1% of the Fund's outstanding shares, whichever
is less, stating that they wish to communicate with other shareholders
to request a meeting to remove a Director, the Directors will then either
make the Fund's shareholder list available to the applicants or mail
their communications to all other shareholders at the applicants'
expense, or the Directors may take such other action as set forth under
Section 16(c) of the Investment Company Act.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant and the principal underwriter
pursuant to the foregoing provisions or otherwise, the Registrant has
been advised that in the opinion of the Securities and Exchange
Commission such indemnification 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 expenses incurred or paid by a director, officer, or
controlling person of the Registrant and the principal underwriter in
connection with the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person or the
principal underwriter in connection with the shares 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 whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
C-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Amendment to its Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Marietta, and
State of Georgia, on the 5th day of June, 1998.
THE HENSSLER FUNDS, INC.
(Registrant)
By: /s/ Gene W. Henssler
--------------------------------------
Gene W. Henssler
President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities indicated
as of June 5, 1998:
Patricia T. Hennsler* Kenneth M. Davies*
- ---------------------------------- ---------------------------------
Patricia T. Henssler, Director and Kenneth M. Davies, Director
Treasurer (Principal Accounting
Officer)
Ladd M. Kochman* James L. Brookover
- --------------------------------- ---------------------------------
Ladd M. Kochman, D.B.A., Director James L. Brookover, Director
/s/ Gene W. Henssler
---------------------------------
Gene W. Henssler, Ph.D., Director
*By: /s/ Gene W. Henssler
------------------------------
Gene W. Henssler, Ph.D.
as Attorney in Fact
<PAGE>
Sequentially
Exhibit Numbered
Number Description Page
- ------- ----------- ------------
1. Articles of Incorporation of Registrant, incorporated.
by reference from Registrant's Registration Statement
filed February 18, 1998.
2. By-laws of Registrant, incorporated by reference from
Registrant's Registration Statement filed February 18,
1998.
3. Inapplicable.
4. Inapplicable.
5. Form of Advisory Agreement by and between the Registrant
and the Adviser, incorporated by reference from
Registrant's Registration Statement filed February 18,
1998.
6. Form of Distribution Agreement by and among the
Adviser, Registrant and Declaration Distributors,
Inc., incorporated by reference from Registrant's
Registration Statement filed February 18, 1998.
7. Inapplicable.
8. Form of Custody Agreement by and among the Adviser,
Registrant And Star Bank, N.A. incorporated by reference
from Registrant's Registration Statement filed February
18, 1998.
9.1 Form of Operating Services Agreement by and between the
Registrant and the Adviser incorporated by reference
from Registrant's Registration Statement filed February
18, 1998.
9.2 Form of Investment Services Agreement by and among the
Adviser, Registrant and Declaration Service Company
incorporated by reference from Registrant's Registration
Statement filed February 18, 1998.
10. Opinion of Kilpatrick Stockton LLP as to legality of the
shares, incorporated by reference from Registrant's
Registration Statement filed May 26, 1998.
11. Consent of Independent Auditors.*
12. Inapplicable.
13. Agreement concerning initial capital of the Fund,
incorporated by reference from Registrant's Registration
Statement filed May 26, 1998.
14. Inapplicable.
15. Inapplicable.
16. Inapplicable
* Filed herewith
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use in
this Pre-effective Amendment No. 2 to the Registration Statement for
The Henssler Funds of all references to our firm included in or
made a part of this Amendment.
/s/ McCurdy & Associates CPA's, Inc.
McCurdy & Associates CPA's, Inc.
June 5, 1998
