U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10K
ANNUAL REPORT PURSUANT TO RULE 24F-2 UNDER THE INVESTMENT COMPANY
ACT OF 1940 for the period ended December 31, 1997.
Commission file number: 811-07956
HUDSON INVESTORS FUND INC
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(Name of Business Issuer in its charter)
NEW JERSEY 223270065
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(State of Incorporation) (I.R.S. Employer I.D. Number)
790 BLOOMFIELD AVENUE, CLIFTON, NEW JERSEY 07010
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (973) 458 8000
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Securities registered under Rule 24F-2 of the Act:
Title of each class Name of exchange on which
to be registered each class is be registered
Common Stock NASDAQ
Securities registered under Rule 24F-2 of the Act:
COMMON
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(Title of Class)
Check whether issuer (1) filed all reports to be filed by Rule 24F-2
of the Investment Company Act during the past 12 months (or such shorter
period that the registrant was required to filed such reports), and
(2) has been subject to filing requirements for the past 90 days.
(1). Yes: X No:
(2). Yes: X No:
The number of shares issued and outstanding of issuer's common stock,
$0.00 par value, as of December 31, 1997 was $25,803.7200.
INDEX
Item 1. Financial Statements. Page No.
Independent Auditors' Report 3
Statement Of Assets and Liabilities as
Of December 31, 1997 4
Portfolio of Investment at December 31, 1997 5
Statement of Operations Year Ended December 31, 1997 6
Statement of Cash Flows Year Ended December 31, 1997 7
Statement of Changes in Net Assets
Year Ended December 31, 1997 8
Selected Per Share Data and Ratio for
Year Ended December 31, 1997 9
Item 2. Notes to Financial Statements 10
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INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders
Hudson Investors Fund, Inc.
50 Mt. Prospect Ave., P.O. Box 2070
Clifton, New Jersey 07015
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of Hudson Investors Fund, Inc.,
as of December 31, 1997, and related statements of operations for the
year then ended and changes in net assets for the year ended, and the
financial highlights of the year. These financial statements and
financial highlights are the responsibility of the Fund's management.
Our responsibility is to express an opinion on these financial statements
and financial highlights based on our 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 financial statements and
financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting, the amounts
and disclosures in the financial statements. Our procedures include
confirmation of investments owned as of December 31, 1996, by
correspondence with the custodian and brokers. As audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly. in all material respect, the financial
position of Hudson Investors Fund, Inc. at December 31,1997, the results
of its operations for the year then ended, the changes in its net assets
for the period then ended, and the selected financial highlights for the
period then ended, in conformity with generally accepted accounting
principles.
/s/ Peter Demian
Peter Demian, CPA November 12, 1998
Demian & Co.
South Orange, N.J.
72 Academy Street, South Orange, New Jersey,
Phone (973)313-0039, Fax (973)763-9290
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HUDSON INVESTORS FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
AS OF DECEMBER 31,1997
Assets
Investments at value $ 50,586.30
(Cost $84,367.50)
Liquid Assets In Custodian Account $ 10,593.03
Cash $ 5,296.27
Other Assets - Organization Expense $125,000.00
less: amortization $(12,000.00) $113,000.00
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Total Assets $179,766.10
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Liabilities
Payable for:
Investor Funds Pending Instructions $ 10,436.16
Accounts Payable $ 4,000.00
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Total liabilities $ 14,436.16
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Net Assets $165,329.94
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Analysis of Net Assets
Capital Stock, no par value:
1,000,000 shares authorized,
25,803.7200 shares issued and outstanding $233,393.35
Retained Earnings $ 1,908.23
Net Unrealized Appreciation on Investments in Securities $(33,480.70)
Net Loss on Operations $(43,045.41)
Net Realized Gain on Sale of Investments $ 6,554.47
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Net Assets applicable to share outstanding $165,329.94
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HUDSON INVESTORS FUND, INC.
PORTFOLIO OF INVESTMENT AT DECEMBER 31,1997
Market Segment Number of Company Market Value Percent of
Shares Portfolio
Computers 400 Micron Electronics 3,650.00 7.17
Computer Peripherals 200 Applied Magnetics 2,200.00 4.32
200 Seagate Technology 3,837.40 7.54
Oil Services 200 Trico Marine Services 5,875.00 11.55
Diversified 15,800 Hightec, Inc. 4,439.30 9.73
Software 200 Adaptec 7,425.00 14.59
Telecom. Equipment 200 Ascend Communications 4,900.00 9.63
Entertainment 12,000 Classic Vision Entertainment 1,116.00 2.19
Semiconductors 200 Intel Warrants 9,893.60 19.44
200 Vitesse Semiconductor 7,550.00 14.84
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50,886.80 100.00
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HUDSON INVESTORS FUND, INC.
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31,1997
Income:
Dividends and interest $ 1,237.25
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Expenses:
Office expenses $ 1,060.18
Custodian and transfer agent fees $ 4,304.50
Regulatory fees and related expenses $ 7,860.00
Filing and quotation services $ 5,552.98
Professional fees $ 15,506.00
Amortization of organizational expenses $ 9,999.00
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Total expenses $ 44,282.66
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Net income/(Loss)from operations $ (43,045.41)
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Net realized and unrealized gain(loss)on investments
Net realized gain on sales of investments $ 6,554.47
Net unrealized appreciation (depreciation) on investments $ (33,480.70)
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Net Increase(decrease)in net assets resulting from operations $ (26,926.23)
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HUDSON INVESTORS FUND, INC.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31,1997
Cash Flows From Operating Activities:
Net Income $(43,045.41)
Adjustments to Reconcile Net Income to Net Cash
Flows From Operating Activities:
Change in Unrealized Appreciation on Investments in Securities $(33,490.70)
Amortization of Organization Expense $ (9,999.00)
Changes in Operating Assets and Liabilities:
Other Assets
Accounts Payable and Accrued Expenses $ 25,276.34
Net Cash Flows From Operating Activities $(61,248.77)
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Cash Flows From Investing Activities:
Capital Gains $ 6,554.47
Stock Transactions $ 9,419.91
Net Cash Flows From Financing Activities $ 15,974.38
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Net Increase (decrease) in Cash $(45,274.39)
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Cash-Beginning of Year $ 61,153.69
Cash-End of Year $ 15,879.30
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Supplemental Disclosures of Cash Flow Information:
Cash Paid During the Year for:
Interest $0.00
Income Taxes $0.00
See Notes to Financial Statements
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HUDSON INVESTORS FUND
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31, 1997
Year ended December 31,
1997 1996
Operations, dividends and capital share activity
Net investment income $ 1,237.25 $ 1,091.36
Net realized gain (loss) $ 6,554.47 $ 4,336.09
Changes in net unrealized depreciation $(33,490.70) $ 5,792.70
Net increase in net assets resulting
from operations $(43,045.41) $ 5,806.88
Net increase (decrease) from capital
share transactions $ (3,190.56) $ 30,800.14
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Total increase (decrease) in net assets $(71,924.95) $(13,773.11)
New Assets Beginning of Year $237,254.89 $251,028.00
End of year (including undistributed net
investment Income of $1,091.36 and
$2,424.00 respectively) $165,329.94 $237,254.89
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See Notes to Financial Statements
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HUDSON INVESTORS FUND, INC.
SELECTED PER SHARE DATA AND RATIO
FOR THE YEAR ENDED DECEMBER 31,1996
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.20
NET INVESTMENT INCOME (LOSS) AND DIVIDENDS DECLARED $ (2.79)
NET ASSET VALUE, END OF PERIOD $ 6.41
TOTAL RETURN Loss 30.33%
RATIOS TO AVERAGE NET ASSETS
EXPENSES 21.38%
NET INVESTMENT INCOME (LOSS) $ (26,926.23)
SUPPLEMENTAL DATA:
NET ASSETS AT END OF PERIOD $ 165,329.94
See Notes to Financial Statements
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HUDSON INVESTORS, FUND, INC.
NOTES TO THE FINANCIAL STATEMENTS
AS AT DECEMBER 31,1997
1. DESCRIPTION OF THE FUND
Hudson Investors Fund, Inc. ('The Company') is a registered 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 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:
l. 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 purchases. At December 31, 1996 the Fund had
no purchase commitments.
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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,
1996. There is no accumulated net realized loss on sales of investments
for federal income tax purposes at December 31, 1997.
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
Advisors, 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 date.
5. MARGIN LOAN
The Fund has no margin of loan accounts.
6. CAPITAL SHARE TRANSACTIONS
Transactions in capital stock for the year ended December 31, 1997 as
follows:
SHARES AMOUNT
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Balance as of December 31, 1996 25,771.4486 $232,383.81
Shares Sold 9,609.8769 102,031.25
Shares Redeemed (9,577.6055) (101,021.71)
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Net increased (decreases) 32.2714 1,099.54
Balance as of December 31, 1997 25,803.7200 $233,393.35
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7. INVESTMENT TRANSACTIONS
Purchases and sales of investment securities were $145,768.75 and
$142,173.18 respectively, for the year ended December 31, 1997.
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 rids 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. PENDING LITIGATION
Administrative and cease desist proceedings were instituted against the
Fund, along with its Advisor, its President and the President of an alleged
corporation by the name of Neuropro Inc., on August 26,1997. It was alleged
that Neuropro Inc., entered into undisclosed agreements with the Adviser
and that the Fund invested in stocks controlled and recommended by its
president. The charges have been denied by all parties concerned as
baseless. An Administrative Hearing was held in February, 1998. No
decision has been received as of the date of this report. The effect of any
decision on the fund is indeterminable.
11. LARGE SHAREHOLDERS
The Fund has two shareholder's with over a 10% interest in the Fund. They
are Akram Choudhry and First Trust Corp. for the account of Mariano Marquez.
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