HUDSON INVESTORS FUND, INC.
Unaudited Financial Statements and
Investment Performance Review for the
Six Month Period Ended June 30, 1999
August 29, 1999
Dear Shareholders:
This semiannual report for Hudson Investors Fund for the six months ended
June 30, 1999 is being sent for your information. I am thankful that we
have survived the period of inactivity brought upon us by SEC Proceedings.
This was reported in our Annual Financial Statements for the year ended
December31, 1999. Now the management is taking steps to revive the Fund's
activities and start a marketing effort.
Hudson Advisers, Inc. and Hudson Investment Management Inc., the Fund's
advisor and administrator, have indicated that as in previous years they
will waive their fees for the year 1999 as well.
We have filed a new Prospectus with SEC for approval. Its approval will be
followed with a marketing effort to raise funds to revive investment
activity as soon as possible.
The year-by-year returns on investment in the Fund have been as follows:
1995 -6.97%
1996 7.98%
1997 -30.33%
1998 -39.63%
1999 -22.22%(first 6 months)
Sincerely,
Javed Latef
President
HUDSON INVESTORS FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
AS OF JUNE 30, 1999
Assets
Investments at value $ 5,317
(Cost $22,257)
Liquid Assets in Custodian Account $ (219)
Cash $ (337)
Other Assets- Organization Expense $ 125,000.00
less: amortization $ (28,000.00) $ 97,000
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Total Assets $ 101,761
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Liabilities
Payable for:
Investor Funds Pending Instructions $ 18,836
Accounts Payable $ 11,490
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Total liabilities $ 30,326
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Net Assets $ 71,435
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Analysis of Net Assets
Capital Stock, par value $0.001:
200,000,000 shares authorized,
23,674.8854 shares outstanding. $ 222,767
Retained Earnings $ (111,110)
Net Unrealized Loss on Investments in Securities $ (16,659)
Net Loss on Operations $ (24,238)
Net Realized GainSale of Investments $ 675
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Net Assets applicable to shares outstanding $ 71,435
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See Notes to Financial Statements
HUDSON INVESTORS FUND, INC.
PORTFOLIO OF INVESTMENTS AT JUNE 30, 1999
Market Segment Number of Company Market Percent of
Shares Value Portfolio
Computer Peripherals 200 Applied Magnetics 625.00 12
Diversified 15,800 Hightec Inc. 4,692.00 88
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5,317.00 100
See Notes to Financial Statements
HUDSON INVESTORS FUND, INC.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1999
Income:
Dividends and interest $ 35
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Expenses:
Office expenses $ 1,333
Custodian and transfer agent fees $ 3,075
Regulatory fees and related expenses $ 1,063
Filing and quotation services $ 4,212
Professional fees $ 8,590
Amortization of organizational expenses $ 6,000
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Total expenses $ 24,273
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Net Income / (Loss) from operations $ (24,238)
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Net realized and unrealized gain (loss) on investments
Net realized gain on sales of investments $ 675
Net unrealized appreciation (depreciation) on investments $ (16,659)
--------------
Net Increase (decrease) in net assets resulting from
operations $ (15,984)
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See Notes to Financial Statements.
HUDSON INVESTORS FUND, INC.
SELECTED PER SHARE DATA AND RATIO
FOR THE SIX MONTHS ENDED JUNE 30, 1999
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD $ 3.87
NET INVESTMENT INCOME (LOSS) AND DIVIDENDS DECLARED $ (0.86)
NET ASSET VALUE, END OF PERIOD $ 3.01
TOTAL RETURN Loss 22.2%
RATIOS TO AVERAGE NET ASSETS
EXPENSES 33.93%
NET INVESTMENT INCOME (LOSS) $(24,238)
SUPPLEMENTAL DATA:
NET ASSETS AT END OF PERIOD $ 71,435
See Notes to Financial Statements
HUDSON INVESTORS FUND, INC.
NOTES TO THE FINANCIAL STATEMENTS
AS AT JUNE 30, 1999
1. DESCRIPTION OF THE FUND
Hudson Investors Fund, Inc. (" the Company") is a registered investment
company following guidelines for investing ethically. The Company does not
invest in securities of companies in the tobacco, banking, gambling or
brewery industries or companies that pollute the environment or condone
apartheid, ethic cleansing or other inhuman behavior.
2. SIGNIFICANT ACCOUNTING POLICIES
Investment valuation
Investments are stated at value. Fixed income securities are valued by
using market quotations, or independent pricing services that use prices
provided by market makers or estimates of market values obtained from yield
data relating to instruments or securities with similar characteristics.
Portfolio securities that are traded on a domestic securities exchange are
valued at the last sale price (currently 4:00 p.m. New York time) on the
exchange where primarily traded or, if there is no recent sale, at the last
current bid quotation.
Portfolio securities are valued as follows:
1. Securities listed or admitted to trading on any national securities
exchange are valued at their last sale price at the exchange where the
securities are principally traded.
2. Securities traded in the over-the-counter market are valued at the
last sale prices, if carried by NASDAQ; other over-the-counter securities
are valued at the mean between the closing bid and asked prices obtained
from a principal reporting agency.
3. All other securities and assets are valued at their fair value as
determined in good faith by the Board of Directors of the Fund, which may
include the amortized cost method of securities maturing in sixty days or
less and other cash equivalent investments.
3. INVESTMENT TRANSACTION AND INVESTMENT INCOME
Investment transactions are accounted for on the trade date (date the order
to buy or sell is executed). Dividend income is recorded on the ex-
dividend date and interest income is recorded on the accrual basis.
Interest income includes premium and discounts amortization on money market
instruments; it also includes original issue and market discount
amortization on long-term fixed income securities. Realized gains and
losses from investment transactions are reported on an identified cost
basis.
The fund may purchase securities with delivery or payments to occur at a
later date. At the time the Fund enters into a commitment to purchase a
security, the transaction is recorded and the value of the security is
reflected in the net asset value. The value of the security may vary with
market fluctuations. No interest accrues to the Fund until payment takes
place. At the time the Fund enters into this type of transaction it is
required to designate cash or other liquid assets equal to the value of the
securities purchased. At June 30, 1999 the Fund had no purchase
commitments.
Fund Share Valuation
Fund shares are sold and redeemed on a continuous basis at net asset value.
On each day the New York Stock Exchange is open for trading, the net asset
value per share is determined as of the earlier of 4:00 p.m. New York time
or the close of the Exchange. The net asset value per share is determined
separately for the one class of stock by dividing the Fund's net assets
attributable to the class by the number of shares of the stock outstanding.
Federal income taxes and dividends to shareholders.
The Fund has complied with the special provisions of the Internal Revenue
Code available to investment companies for the year ended December 31,
1998. There in no accumulated net realized loss on sales of investments
for federal income tax purposes at December 31, 1998.
Dividends are determined in accordance with income tax principles which may
treat certain transactions differently than generally accepted accounting
principles.
4. TRANSACTIONS WITH AFFILIATES
Management agreement.
The Fund has management advisory and administration agreements with Hudson
Advisers, Inc. and Hudson Investment Management, Inc. who are contracted to
exact the following fees:
1.00% Management fee
0.25% Administrative fee
These fees have been waived to the end of 1999. Fees will be charged for
the year 2000 and subsequent years.
5. MARGIN LOAN
The Fund has no margin or loan accounts.
6. CAPITAL SHARE TRANSACTIONS
Transactions in capital stock for the six months ended June 30, 1999 are as
follows:
SHARES AMOUNT
-------------- ------------
Balance as of December 31, 1998 24,789.1305 $227,241.01
Shares issued 0.0000 0.00
Shares redeemed (1,114.2451) (4,353.86)
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Net Increases ( decreases) (1,114.2451) (4,353.86)
Balance as of June 30, 1999 23,674.8854 $222,887.15
-------------- -------------
7. INVESTMENT TRANSACTIONS
Sales of investment securities were $4,725 for the six months ended June
30, 1999.
8. THE FUND HAS NO LEASE OR OTHER FINANCIAL COMMITMENTS
9. CONCENTRATION OF CREDIT RISK
Financial instruments which potentially subject the Fund to a concentration
of credit risk consist principally of investments in securities. At times,
such investments may be concentrated in a particular industry, but it is
not the Fund's intention to concentrate its investments in any particular
industry on a permanent basis.
10. LITIGATION
On March 30, 1999, an Administrative Law Judge of the SEC ordered the Fund,
its Adviser and its President to "cease and desist from committing or
causing a violation or any future violation of Section 17(a) of the
Securities Act, Section 10(b) of the Exchange Act, and Rule 10b-5
thereunder, Section 34(b) of the Company Act". The Adviser was
additionally required to cease and desist from the violation of "Section
204 and 207 of the Adviser Act and Rule 204-1(b) thereunder". Mr. Latef was
additionally required to cease and desist from violations of Section 207 of
the Adviser Act. The order also suspended Mr. Latef from "being associated
with an investment adviser or an investment company for a period of three
months". Mr. Latef filed a petition for review of this initial decision
with regard to him personally, whereas the Fund and the Adviser decided not
file such a petition.
11. LARGE SHAREHOLDERS
The Fund has two shareholders' with over a 10% interest in the fund. They
are Akram Choudhry and First Trust Corp. for the account of Mariano Marquez.
12. YEAR 2000 DISCLOSURE
The year 2000 issue is the result of computer programs being written using
two digits rather than four digits to define the applicable year. Computer
programs that have time sensitive software may recognize a date using "00"
as the year 1900 rather than the year 2000. This could result in a system
failure or miscalculations causing disruption of normal business
activities.
Based on a recent and ongoing assessment, the Fund's adviser has determined
that it will require only off-the-shelf software utilizing a Microsoft
Windows platform for all of its computer requirements. The Fund's adviser
presently believes that with the modifications to existing off-the-shelf
software or conversion to new software, the year 2000 issue will not pose a
significant operational problem and will not materially affect future
financial results.
The Fund's adviser believes all its software to be y2k compliant.
