As filed with the Securities and Exchange Commission on July 30, 2001

1933 Act File No. 2-98229
1940 Act File No. 811-4316

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM N-14

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

[ ] Pre-Effective Amendment No. ___
[ ] Post-Effective Amendment No.___

MIDAS FUND, INC.
(Exact Name of Registrant as Specified in Charter)

11 Hanover Square
New York, New York 10005
(Address of Principal Executive Offices)

(212) 480-6432
(Registrant's Area Code and Telephone Number)

Monica Pelaez, Esq.
11 Hanover Square
New York, New York 10005
(Name and Address of Agent for Service)

Approximate Date of Proposed Public Offering: as soon as practicable after
this Registration Statement becomes effective under the Securities Act of 1933.

It is proposed that this filing will become effective on August 29, 2001
pursuant to Rule 488.

Title of securities being registered: Shares of capital stock, par value
$0.01 per share.

No filing fee is required because of reliance on Section 24(f) under the
Investment Company Act of 1940, as amended.

MIDAS FUND, INC.

CONTENTS OF REGISTRATION STATEMENT

This Registration Statement contains the following papers and documents:

Cover Sheet

Contents of Registration Statement

Letter to Shareholders

Notice of Special Meeting

Part A - Proxy Statement/Prospectus

Part B - Statement of Additional Information

Part C - Other Information

Signature Page

Exhibits

[GRAPHIC]
MIDAS FUNDS
Discovering Opportunities

[proxy date], 2001

Dear Shareholder:

The attached proxy materials describe proposals to merge Midas Investors
Ltd. ("Midas Investors") into Midas Fund, Inc. ("Midas Fund") and to merge Midas
U.S. and Overseas Fund Ltd. ("U.S. and Overseas") into Midas Special Equities
Fund, Inc. ("Special Equities"). If the proposals are approved and implemented,
each shareholder of Midas Investors will automatically become a shareholder of
Midas Fund and each shareholder of U.S. and Overseas will automatically become a
shareholder of Special Equities.

YOUR BOARD OF DIRECTORS UNANIMOUSLY APPROVED AND RECOMMENDS A VOTE "FOR"
THE PROPOSALS. The Board of Midas Investors and the Board of U.S. and Overseas
each believe that the proposed merger of its Fund will benefit shareholders by
providing them with a Fund with compatible investment objectives and policies
and lower operating expenses.

With respect to Midas Investors, which is proposed to merge into Midas
Fund, the Board noted that Midas Investors and Midas Fund both seek capital
appreciation and protection against inflation; income is each Fund's secondary
objective and Midas Investors also seeks to preserve the purchasing power of the
dollar. Midas Investors and Midas Fund also have substantially similar
investment policies, although Midas Fund has a slightly broader primary focus.
While generally both Midas Investors and Midas Fund invest primarily in
companies involved, either directly or indirectly, in mining, processing, or
otherwise dealing in gold, silver, platinum or other precious metals and in
gold, silver or platinum bullion, Midas Fund's primary focus can also include
other natural resources companies.

With respect to U.S. and Overseas, which is proposed to merge into Special
Equities, the Board noted that generally U.S. and Overseas and Special Equities
have similar investment objectives and different, although compatible,
investment policies. U.S. and Overseas seeks the highest possible total return
from a combination of long-term growth and income and Special Equities invests
aggressively for maximum capital appreciation. Both Funds invest primarily in
equity securities, yet their primary portfolio emphasis can be somewhat
different. Special Equities emphasizes special situations, i.e. companies that
are undergoing unusual or one-time developments, such as liquidations and
reorganizations, and in emerging growth companies. U.S. and Overseas emphasizes
foreign as well as domestic companies. Nevertheless, Special Equities may, and
does from time to time, invest in foreign as well as domestic companies, and
U.S. and Overseas may, and does from time to time, invest in special situations.

The attached Proxy Statement/Prospectus provides more information about the
proposed mergers and the Funds.

YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN.
Voting your shares early will help prevent costly follow-up mail and telephone
solicitation. After reviewing the attached materials, please complete, date and
sign your proxy card and mail it in the enclosed return envelope today or call
[1-888-_____________] to vote by telephone.

Very truly yours,

Thomas B. Winmill
President

MIDAS INVESTORS LTD.
MIDAS U.S. AND OVERSEAS FUND LTD.

NOTICE OF
SPECIAL MEETING OF SHAREHOLDERS ON
[meeting date]

To the Shareholders:

A special meeting of shareholders of Midas Investors Ltd. ("Midas
Investors") and Midas U.S. and Overseas Fund Ltd. ("U.S. and Overseas"), will be
held on [meeting date] at 10 a.m., Eastern time, at the offices of the Midas
Funds at 11 Hanover Square, New York, New York 10005, for the following
purposes:

1. For Shareholders of Midas Investors Only: To approve an Agreement and
Plan of Reorganization under which Midas Fund, Inc. ("Midas Fund") would acquire
all the assets of Midas Investors in exchange solely for shares of Midas Fund
and the assumption by Midas Fund of all of Midas Investors' liabilities,
followed by the distribution of those shares to the shareholders of Midas
Investors, all as described in the accompanying Proxy Statement/Prospectus; and

2. For Shareholders of U.S. and Overseas Only: To approve an Agreement and
Plan of Reorganization under which Midas Special Equities Fund, Inc. ("Special
Equities") would acquire all the assets of U.S. and Overseas in exchange solely
for shares of Special Equities and the assumption by Special Equities of all of
U.S. and Overseas' liabilities, followed by the distribution of those shares to
the shareholders of U.S. and Overseas, all as described in the accompanying
Proxy Statement/Prospectus.

You are entitled to vote at the meeting and any adjournment thereof if you
owned shares of Midas Investors or U.S. and Overseas at the close of business on
[record date]. IF YOU ATTEND THE MEETING, YOU MAY VOTE YOUR SHARES IN PERSON.
WHETHER OR NOT YOU INTEND TO ATTEND THE MEETING IN PERSON, YOU MAY VOTE IN
EITHER OF THE FOLLOWING WAYS:

1. VOTE, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD IN THE
ENCLOSED POSTAGE-PAID ENVELOPE; OR

2. VOTE BY TELEPHONE BY CALLING TOLL-FREE AT [1-888-___] FROM 9:00 A.M. TO
8:00 P.M. EASTERN TIME)(A CONFIRMATION OF YOUR TELEPHONE VOTE WILL BE
MAILED TO YOU).

By order of the Board of Directors,
Monica Pelaez
Secretary

[proxy date]

YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWN.

Please indicate your voting instructions on the enclosed proxy card, sign
and date the card, and return it in the envelope provided. IF YOU SIGN, DATE AND
RETURN THE PROXY CARD, BUT GIVE NO VOTING INSTRUCTIONS, YOUR SHARES WILL BE
VOTED "FOR" THE PROPOSAL DESCRIBED ABOVE AND WILL BE VOTED "FOR" OR "AGAINST"
ANY OTHER BUSINESS TRANSACTED AT THE MEETING, IN THE PROXIES' DISCRETION. In
order to avoid the additional expense of further solicitation, we ask your
cooperation in mailing your proxy card promptly. As an alternative to using the
paper proxy card to vote, you may vote by telephone (by calling [1-888-___-
_____]) or in person. If we do not receive your completed proxy card after
several weeks, we, or someone on our behalf, may contact you.

Unless proxy cards submitted by corporations and partnerships are signed by
the appropriate persons as indicated in the voting instructions on the proxy
card, they will not be voted.

MIDAS INVESTORS LTD.
MIDAS FUND, INC.

MIDAS U.S. AND OVERSEAS FUND LTD.
MIDAS SPECIAL EQUITIES FUND, INC.

11 HANOVER SQUARE
NEW YORK, NEW YORK 10005
1-800-400-MIDAS (6432)

PROXY STATEMENT/PROSPECTUS
DATED [proxy date] FOR A
SPECIAL MEETING OF SHAREHOLDERS ON
[meeting date]

This proxy statement/prospectus ("Proxy Statement/Prospectus") is being
furnished to shareholders of Midas Investors Ltd. ("Midas Investors") and Midas
U.S. and Overseas Fund Ltd. ("U.S. and Overseas") (collectively, the "Voting
Funds"), each a Maryland corporation, in connection with the solicitation of
proxies by each Fund's Board of Directors ("Board") for use at a special meeting
of each Fund's shareholders to be held on [meeting date], at 11 Hanover Square,
New York, New York 10005 at 10 a.m., Eastern time (such meeting and any
adjournment(s) thereof are referred to collectively as the "Meeting").

As more fully described in this Proxy Statement/Prospectus, the purpose of
the Meeting is to vote on the proposed reorganizations in which Midas Fund, Inc.
("Midas Fund") and Midas Special Equities Fund, Inc. ("Special Equities")
(collectively, the "Acquiring Funds") would acquire all the assets of Midas
Investors and U.S. and Overseas, respectively, in exchange solely for shares of
the respective Acquiring Fund and the assumption by the Acquiring Fund of all
the liabilities of the respective Voting Fund. Those shares of the Acquiring
Fund would then be distributed to the shareholders of the respective Voting
Fund, so that each shareholder would receive a number of full and fractional
shares of the respective Acquiring Fund having an aggregate value that, on the
effective date of the reorganization, would equal the aggregate net asset value
of the shareholder's shares of the Voting Fund. As soon as practicable following
the distribution of shares, each Voting Fund would be deregistered and
dissolved. These transactions are referred to collectively as the
"Reorganizations."

Midas Investors and Midas Fund. Both Midas Investors and Midas Fund seek
capital appreciation and protection against inflation; income is each Fund's
secondary objective. Midas Investors also seeks to preserve the purchasing power
of the dollar. Generally, each Fund invests primarily in companies involved,
either directly or indirectly, in mining, processing, or otherwise dealing in
gold, silver, platinum or other precious metals and in gold, silver or platinum
bullion. Midas Fund's primary focus can also include other natural resource
companies: Midas Investors may invest up to 35% of its total assets in natural
resource companies whereas Midas Fund may

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invest up to 100% of its total assets in such companies.

U.S. and Overseas and Special Equities. Generally, U.S. and Overseas and
Special Equities have similar investment objectives and different, although
compatible, investment policies. U.S. and Overseas seeks the highest possible
total return from a combination of long- term growth and income and Special
Equities invests aggressively for maximum capital appreciation. Both Funds
invest primarily in equity securities, yet their primary portfolio emphasis can
be somewhat different. Special Equities' portfolio may include special
situations, i.e. companies that are undergoing unusual or one-time developments,
such as liquidations and reorganizations, and in emerging growth companies. U.S.
and Overseas' portfolio may include domestic as well as foreign companies.
Nevertheless, Special Equities may, and does from time to time, invest in
domestic and foreign companies, and U.S. and Overseas may, and does from time to
time, invest in special situations.

This Proxy Statement/Prospectus, which should be retained for future
reference, sets forth information about the Reorganization and each Acquiring
Fund that a shareholder should know before voting on the Reorganization. A
Statement of Additional Information, dated [effective date], relating to the
Reorganization and including historical financial statements, has been filed
with the Securities and Exchange Commission ("SEC") and is incorporated herein
by this reference (that is, the Statement of Additional Information is legally a
part of this Proxy Statement/Prospectus). A Prospectus, dated, May 1, 2001 has
been filed with the SEC and is incorporated herein by this reference.
Management's discussion of the performance of Midas Fund and Special Equities,
which is included in its Annual Report to Shareholders for the fiscal year ended
December 31, 2000, is attached as Appendix D and Appendix E to this Proxy
Statement/Prospectus. Midas Management Corporation is the Investment Manager of
each of the Midas Funds.

A Statement of Additional Information for each Acquiring Fund and each
Voting Fund, dated May 1, 2001, and each Acquiring Fund and Voting Fund's Annual
Report to Shareholders for the fiscal year ended December 31, 2000 and
Semi-Annual Report to Shareholders for the fiscal period ended June 30, 2001,
have each been filed with the SEC and are incorporated herein by this reference.

Documents that are incorporated by reference herein and additional
information about the Funds have been filed with the SEC and may be obtained
without charge, and further inquiries may be made, by writing to Investor
Service Center, Inc., 11 Hanover Square, New York, NY 10005 or by calling
toll-free 1-800-400-MIDAS (6432). The SEC maintains a
website(http://www.sec.gov) that contains materials incorporated by reference,
together with other information regarding the Voting Funds and the Acquiring
Funds. Copies of such materials may also be obtained, after paying a duplicating
fee, from the Public Reference Branch, Office of Consumer Affairs and
Information Services, Securities and Exchange Commission, Washington, DC 20549,
or by electronic request at the following e-mail address: publicinfo@sec.gov.

THE SEC HAS NOT APPROVED OR DISAPPROVED THE SHARES OF MIDAS

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FUND AND SPECIAL EQUITIES BEING OFFERED IN THE REORGANIZATION OR DETERMINED
WHETHER THIS PROXY STATEMENT/PROSPECTUS IS ACCURATE OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

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TABLE OF CONTENTS

SECTION TITLE PAGE
- ------------- ----

VOTING INFORMATION .............................................................
THE REORGANIZATION..............................................................
SYNOPSIS........................................................................
THE PROPOSED REORGANIZATIONS........................................
SUMMARY COMPARISON OF THE FUNDS ....................................
INVESTMENT OBJECTIVES AND POLICIES..................................
PURCHASE, REDEMPTION AND EXCHANGE PROCEDURES .......................
COMPARISON OF PRINCIPAL RISK FACTORS ...............................
COMPARATIVE FEE TABLE...............................................
EXAMPLE OF EFFECT ON FUND EXPENSES .................................
OPERATIONS OF MIDAS FUND AND SPECIAL EQUITIES FUND FOLLOWING
THE REORGANIZATION......................................
PERFORMANCE ........................................................
MANAGEMENT .....................................................................
INVESTMENT MANAGER..................................................
DISTRIBUTOR.........................................................
OTHER FUND SERVICE PROVIDERS........................................
DIRECTORS AND OFFICERS..............................................
CERTIFICATES........................................................
PURCHASES, REDEMPTIONS AND EXCHANGES................................
EXCHANGES...........................................................
DIVIDENDS AND OTHER DISTRIBUTIONS ..................................
PRIVACY POLICY......................................................
FEDERAL INCOME TAX CONSEQUENCES OF THE REORGANIZATION ..............
THE PROPOSED TRANSACTION........................................................
REASONS FOR THE REORGANIZATION .....................................
REORGANIZATION PLANS................................................
DESCRIPTION OF SECURITIES TO BE ISSUED .............................
TEMPORARY WAIVER OF INVESTMENT RESTRICTIONS ........................
FEDERAL INCOME TAX CONSIDERATIONS...................................
FINANCIAL HIGHLIGHTS-- MIDAS FUND AND SPECIAL EQUITIES .............
CAPITALIZATION .....................................................
REQUIRED VOTE.......................................................
ORGANIZATION OF THE FUNDS.......................................................
LEGAL MATTERS...................................................................
INFORMATION FILED WITH THE SEC .................................................
EXPERTS.........................................................................
OTHER INFORMATION ..............................................................
SHAREHOLDER PROPOSALS ..............................................
OTHER BUSINESS .....................................................
APPENDIX A: Principal Shareholders...........................................A-1

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APPENDIX B: Form of Agreement and Plan of Reorganization ....................B-1
APPENDIX C: Management's Discussion of Fund Performance
(MIDAS FUND) .......................................C-1
APPENDIX D: Management's Discussion of Fund Performance
(SPECIAL EQUITIES)..................................D-1

VOTING INFORMATION

This Proxy Statement/Prospectus is being furnished to shareholders of Midas
Investors and U.S. and Overseas in connection with the solicitation of proxies
from each Fund's shareholders by each Fund's Board for use at the Meeting. This
Proxy Statement/Prospectus will first be mailed to shareholders on or about
[mailing date].

One third of Midas Investors' and one third of U.S. and Overseas' shares
outstanding and entitled to vote as of the close of business on [record date]
("Record Date"), represented in person or by proxy, shall constitute a quorum
and must be present for the transaction of business at the Meeting of such Fund.
In the absence of a quorum for that Fund, the shareholders present in person or
by proxy or, if no shareholder entitled to vote is present in person or by
proxy, any officer present entitled to preside or act as secretary of such
meeting may adjourn the meeting without determining the date of the new meeting
or from time to time without further notice to a date not more than 120 days
after the Record Date. Any business that might have been transacted at the
meeting originally called may be transacted at any such adjourned meeting at
which a quorum is present. If a quorum is present but sufficient votes to
approve a proposal are not received or for any other reason, the Meeting may be
adjourned one or more times to permit further solicitation of proxies. Any such
adjournment will require the affirmative vote of a majority of those shares
represented at the Meeting in person or by proxy. The persons named as proxies
will vote those proxies that they are entitled to vote "FOR" the proposal in
favor of such an adjournment and will vote those proxies required to be voted
"AGAINST" the proposal against such adjournment.

Broker non-votes represent proxies received for shares held in "street
name" for which the broker indicates that instructions have not been received
from the beneficial owners or other persons entitled to vote and for which the
broker does not have discretionary voting authority. Abstentions and broker
non-votes will be counted as shares present for purposes of determining whether
a quorum is present but will not be (i) considered votes cast at the Meeting or
(ii) voted for or against any adjournment or proposal. Abstentions and broker
non-votes are effectively votes against a proposal.

The individuals named as proxies on the enclosed proxy card will vote in
accordance with your directions as indicated on the proxy card, if your proxy
card is received properly executed by you or by your duly appointed agent or
attorney-in-fact. If you sign, date and return the proxy card, but give no
voting instructions, your shares will be voted "FOR" the proposal(s). In
addition, if you sign, date and return the proxy card, but give no voting
instructions, the duly appointed proxies may, in their discretion, vote upon any
other matters that come before the

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Meeting. The proxy card may be revoked by giving another proxy or by letter or
telegram revoking the initial proxy. To be effective, revocation must be
received by Midas Investors or U.S. and Overseas prior to the Meeting and must
indicate your name and account number. If you attend the Meeting in person you
may, if you wish, vote by ballot at the Meeting, thereby canceling any proxy
previously given. Proxies voted by telephone may be revoked at any time before
they are voted in the same manner that proxies voted by mail may be revoked.

As of the Record Date, Midas Investors had [___________] shares of common
stock outstanding and U.S. and Overseas had [___________] shares of common stock
outstanding. ___________________________ has been retained to aid in the
solicitation of proxies. The costs of retaining _______, which are anticipated
to be approximately $[______], and other expenses incurred in connection with
the solicitation of proxies and the holding of the Meeting, will be borne by the
Funds.

Except as set forth in Appendix A, as of the Record Date, to the knowledge
of each Fund, no shareholder owned of record or beneficially 5% or more of the
shares of any class of any of the Funds. As of that same date, the Directors and
officers of the Funds, as a group, owned less than 1% of any of the Funds'
outstanding shares.

REQUIRED VOTE. Approval of Proposal 1 requires the affirmative vote of a
majority of the outstanding voting securities of Midas Investors and approval of
Proposal 2 requires the affirmative vote of a majority of the outstanding voting
securities of U.S. and Overseas, each as of the Record Date. Each outstanding
full share of Midas Investors and U.S. and Overseas is entitled to one vote on
the respective proposal, and each outstanding fractional share thereof is
entitled to a proportionate fractional share of one vote. If Proposal 1 and/or
Proposal 2 are not approved by the requisite vote of shareholders, the
respective Board of Midas Investors and U.S. and Overseas will consider what
subsequent actions would be in the best interests of shareholders. Proposals 1
and 2 are not contingent upon each other; if shareholders approve one
Reorganization but not the other, the approved transaction will be consummated.

THE REORGANIZATION

PROPOSAL 1. FOR SHAREHOLDERS OF MIDAS INVESTORS ONLY: TO APPROVE
AN AGREEMENT AND PLAN OF REORGANIZATION UNDER WHICH MIDAS FUND,
INC. WOULD ACQUIRE ALL OF THE ASSETS OF MIDAS INVESTORS LTD. IN
EXCHANGE SOLELY FOR SHARES OF MIDAS FUND, INC. AND THE ASSUMPTION
BY MIDAS FUND, INC. OF ALL OF MIDAS INVESTORS LTD.'S LIABILITIES; AND

PROPOSAL 2. FOR SHAREHOLDERS OF U.S. AND OVERSEAS ONLY: TO APPROVE
AN AGREEMENT AND PLAN OF REORGANIZATION UNDER WHICH MIDAS SPECIAL
EQUITIES FUND, INC. WOULD ACQUIRE ALL OF THE ASSETS OF MIDAS U.S. AND
OVERSEAS FUND LTD. IN EXCHANGE SOLELY FOR SHARES OF MIDAS SPECIAL
EQUITIES FUND, INC. AND THE ASSUMPTION BY MIDAS FUND, INC. OF ALL OF
MIDAS INVESTORS LTD.'S LIABILITIES

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Each proposal refers to a "Reorganization Plan" (collectively, "Reorganization
Plans").

SYNOPSIS

The following is a summary of certain information contained elsewhere in
this Proxy Statement/Prospectus, the Prospectus and the Statement of Additional
Information of each Fund (which are incorporated herein by reference), and the
Reorganization Plans, which are substantially similar to each other. The form of
the Reorganization Plan for each Reorganization is attached as Appendix B to
this Proxy Statement/Prospectus. As discussed more fully below, the Board of
each Voting Fund believes that the Reorganization in which it is participating
will benefit the Fund's shareholders. Those Funds and their respective Acquiring
Funds are essentially similar or compatible in terms of their investment
objectives, policies, strategies and limitations.

THE PROPOSED REORGANIZATIONS

Each Board considered and unanimously approved the respective
Reorganization Plan at a meeting held on June 13, 2001. Each Reorganization Plan
provides for the acquisition of all the assets of the Voting Fund by the
respective Acquiring Fund, in exchange solely for shares of common stock of the
Acquiring Fund and the assumption by the Acquiring Fund of all the liabilities
of the Voting Fund. The Voting Fund then will distribute those shares of the
respective Acquiring Fund to its shareholders, so that each Voting Fund
shareholder will receive the number of full and fractional shares of the
respective Acquiring Fund equal in aggregate net asset value ("NAV") to the
aggregate NAV of the shares of the Voting Fund held by the shareholder at the
time of the Reorganization. These transactions are scheduled to occur as of 4:00
p.m., Eastern time, on or about [closing date], or on such later date as the
conditions to consummation of the Reorganizations are satisfied ("Closing
Date"). The Voting Funds will be deregistered and dissolved as soon as
practicable after the Closing Date.

If each Reorganization Plan is approved by Voting Fund shareholders,
shareholders of the Voting Funds will receive in the Reorganization shares of
the respective Acquiring Fund. Proposal 1 and Proposal 2 are not contingent upon
each other; if shareholders approve one Reorganization but not the other, the
approved transaction will be consummated.

Each Reorganization will constitute a tax-free reorganization within the
meaning of section 368(a)(1)(C) of the Internal Revenue Code of 1986, as amended
("Code"). Accordingly, no Fund or any of its shareholders will recognize any
gain or loss for federal income tax purposes as a direct result of either
Reorganization. To the extent Midas Investors or U.S. and Overseas sells
securities prior to the Closing Date, it may recognize net gains or losses. Any
net gains recognized by either Fund would increase the amount of any taxable
distribution made to its shareholders prior to the Closing Date.

For the reasons set forth below under "The Proposed Transaction - Reasons
for the Reorganization" the respective Boards, including those Directors who are
not "interested persons" as that term is defined in the Investment Company Act
of 1940, as amended ("1940

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Act"), of Midas Investors and U.S. and Overseas ("Independent Directors"), have
determined that the Reorganization in which its Fund is participating would be
in the best interests of that Fund and that the interests of that Fund's
shareholders will not be diluted as a result of that Reorganization.

ACCORDINGLY, EACH BOARD RECOMMENDS THAT SHAREHOLDERS APPROVE THE REORGANIZATION
BY VOTING "FOR" THE RESPECTIVE REORGANIZATION PLAN.

SUMMARY COMPARISON OF THE FUNDS

Midas Fund and Midas Investors:

INVESTMENT OBJECTIVES AND POLICIES. As noted above, the two Funds have
similar investment objectives in that each seeks capital appreciation and
protection against inflation and, secondarily, income. Midas Investors also
seeks to preserve the purchasing power of the dollar.

Generally, each Fund invests primarily in companies involved, either
directly or indirectly, in mining, processing, or otherwise dealing in gold,
silver, platinum or other precious metals and in gold, silver or platinum
bullion. Midas Fund's primary focus can also include other natural resource
companies and can invest up to 100% of its total assets in natural resource
companies; Midas Investors may invest up to 35% of its total assets in such
companies.

Midas Fund pursues its objective by investing primarily in domestic or
foreign companies involved with gold, silver, platinum, or other natural
resources and gold, silver and platinum bullion. The Fund will invest at least
65% of its total assets in (i) securities of companies involved, directly or
indirectly, in the business of mining, processing, fabricating, distributing or
otherwise dealing in gold, silver, platinum or other natural resources and (ii)
gold, silver and platinum bullion. Additionally, up to 35% of the Fund's total
assets may be invested in securities of companies that derive a portion of their
gross revenues, directly or indirectly, from the business of mining, processing,
fabricating, distributing or otherwise dealing in gold, silver, platinum or
other natural resources, in securities of selected growth companies, and in
securities issued by the U.S. Government, its agencies or instrumentalities.
Natural resources include ferrous and non-ferrous metals (such as iron, aluminum
and copper), strategic metals (such as uranium and titanium), hydrocarbons (such
as coal, oil and natural gases), chemicals, forest products, real estate, food
products and other basic commodities.

Midas Investors pursues its objective by investing primarily in gold,
platinum, and silver bullion and a global portfolio of securities of companies
involved directly or indirectly in mining processing, or dealing in gold or
other precious metals. Generally, at least 65% of the Fund's total assets will
be invested in (i) equity securities (including common stocks, covertible
securities and warrants) of companies involved directly or indirectly in mining,
processing, or dealing in gold or other precious metals, (ii) gold, platinum,
and silver bullion, and (iii) gold coins. Additionally, the Fund may invest up
to 35% of its total assets in securities of companies

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that own or develop natural resources and other basic commodities, securities of
selected growth companies, and securities issued by the U.S. Government, its
agencies or instrumentalities.

In selecting investments for each Fund, the Investment Manager's strategy
focuses on the potential for capital appreciation of each investment, although
it also may consider an investment's income generating capacity as well. When
seeking to achieve the Fund's secondary objective of income with fixed income
securities, the Fund will normally invest in issuers with investment grade
ratings. For each Fund, selected growth companies in which the Fund may invest
typically have earnings or tangible assets which are expected to grow faster
than the rate of inflation over time. For both Funds, a stock is typically sold
when, in the opinion of the Investment Manager, its potential to meet the Fund's
investment objective appears limited or exceeded by other investment
opportunities or when the Fund must meet redemptions.

Both Funds may invest in certain derivatives such as options, futures and
forward currency contracts. Derivatives are financial instruments that derive
their values from other securities or commodities or that are based on indices.
The Funds also may engage in leverage by borrowing money for investment purposes
and lend portfolio securities to other parties and engage in short selling.
Additionally, the Funds may invest in special situations, such as liquidations
and reorganizations.

Each Fund may, from time to time, under adverse market conditions, take
temporary defensive positions and invest some or all of its assets in cash and
cash equivalents, money market securities of U.S. and foreign issuers, short
term bonds, repurchase agreements, and convertible bonds. When a Fund takes a
temporary defensive position, it may not achieve its investment objective.

Each Fund may invest up to 15% of its net assets in illiquid securities,
including repurchase agreements providing for settlement in more than seven days
after notice. Each Fund may invest in foreign securities and securities of
issuers based in emerging markets. Each Fund may borrow up to 33 1/3% of the
value of its total assets and lend up to 1/3 of the Fund's total assets. Each
Fund may invest in U.S. government obligations, and lower-rated debt securities
and may sell short up to 100% of its total assets.

The similarities between each Fund's investment objectives and policies and
the Investment Manager's strategies for each Fund are reflected in the
similarities between each Fund's portfolios. As of December 31, 2000, both Funds
were 100% invested in equity securities and have similar holdings. Seventeen of
the twenty-four securities held by Midas Investors were also held by Midas Fund,
although the commonly held securities represented different percentages of each
Fund's portfolio. As of that date, five of the top ten holdings of Midas
Investors were also top ten holdings of Midas Fund. Midas Fund is significantly
larger than Midas Investors: as of December 31, 2000, Midas Investors had less
than ten percent of the assets of Midas Fund --Midas Fund had assets of close to
$35 million and Midas Investors had assets of just over $3 million.

Special Equities and U.S. and Overseas

-9-

INVESTMENT OBJECTIVES AND POLICIES. Special Equities invests aggressively
for maximum capital appreciation. U.S. and Overseas seeks to obtain the highest
possible total return on its assets from long term growth of capital and from
income.

Special Equities invests primarily in equity securities in special
situations and emerging growth companies. Risks of these securities often
include above-average share price volatility, difficulty in assessing the
issuer's financial condition, and limited operating history. In attempting to
achieve capital appreciation, the Fund also may employ aggressive and
speculative investment strategies.

U.S. and Overseas may invest substantially all of its assets in equity
and/or debt securities of issuers located in the United States and in foreign
countries with developed and/or emerging markets. Investing in foreign markets,
particularly emerging foreign markets, carries the risks of foreign currency
fluctuations, political or economic instability, trading and custody expense,
and illiquidity.

In selecting investments for each Fund, the Investment Manager considers
both growth and value valuation approaches. Although the investment objective of
each Fund is stated differently, the Funds' strategies are similar in that both
Funds seek to invest in companies that offer optimal combinations of growth in
earnings and other fundamental factors, while also offering reasonable
valuations in terms of price/earnings and similar ratios. Both Funds may invest
in domestic or foreign corporations which have small, medium or large
capitalizations. For both Funds, a stock is typically sold when, in the opinion
of the Investment Manager, its potential to meet the Fund's investment objective
appears limited or exceeded by other investment opportunities or when the Fund
must meet redemptions.

Each Fund may invest up to 15% of its net assets in illiquid securities,
including repurchase agreements providing for settlement in more than seven days
after notice. Each Fund may invest in foreign securities. Each Fund may borrow
up to 33 1/3% of the value of its total assets and lend up to 1/3 of the Fund's
total assets. Each Fund may invest in U.S. government obligations, and
lower-rated debt securities and may sell short up to 100% of its total assets.

-10-

Each Fund may also invest in foreign government securities, preferred
securities, and reverse repurchase agreements.

Each Fund's portfolio reflects similarities in the Investment Manager's
strategies for the Funds. As of December 31, 2000, approximately 83% of U.S. and
Overseas' portfolio and 94% of Special Equities' portfolio was invested in
equity securities of U.S. companies. Four of U.S. and Overseas' top ten holdings
were also top ten holdings of Special Equities and a total of seven of U.S. and
Overseas top ten holdings were also in Special Equities' portfolio. These
portfolio similarities are also reflected in the total composition of both
portfolios as of December 31, 2000. Fourteen of nineteen of U.S. and Overseas
portfolio investments were also held by Special Equities, although the
commonly-held securities represented different percentages of the respective
Fund's portfolios.

PURCHASE, REDEMPTION AND EXCHANGE PROCEDURES

The purchase and redemption procedures for the Acquiring Funds' shares
would be the same as those currently in effect for the shares of the Voting
Funds. Exchanges of shares of each of the Funds generally may be made for shares
of the other Funds.

COMPARISON OF PRINCIPAL RISK FACTORS

An investment in Midas Fund, Midas Investors, U.S. and Overseas and Special
Equities is subject to specific risks arising from the types of securities in
which the Funds invest and general risks arising from investing in any mutual
fund. There is no assurance that any Fund will meet its investment objective;
investors could lose money by investing in the Funds. As with all mutual funds,
an investment in any of these Funds is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government agency.

Except as noted below, the following principal risks apply to each of the
Funds:

Market. The market risks associated with investing in a Fund are those related
to fluctuations in the value of the Fund's portfolio. A risk of investing in
stocks is that their value will go up and down reflecting stock market movements
and shareholders could lose money. Also, investing in stocks involves a greater
risk of loss of income than bonds because stocks need not pay dividends.

Special Situations. Investments in emerging companies and special situations,
such as reorganizations and liquidations, may involve above-average market price
volatility and greater risk of loss than investments in securities of larger,
well-established companies with a history of consistent operating patterns. In
addition, it may be more difficult to obtain information as to the financial
condition of issuers and there is always a risk that the Investment Manager will
not properly assess the potential for an issuer's future growth, or that an
issuer will not realize that potential.

Small Capitalization. Each Fund may invest in companies that are small or thinly
capitalized,

-11-

and may have a limited operating history. Small-cap stocks are more vulnerable
than stocks of larger companies to adverse business or economic developments.
The securities of small companies generally are less liquid. During broad market
downturns, Fund values may fall further than those of funds investing in larger
companies. Full development of small cap- companies takes time, and for this
reason each Fund should be considered a long-term investment and not a vehicle
for seeking short-term profit.

Foreign Investment. U.S. and Overseas normally will be, and each of the other
Funds may be, subject to the unique risks of foreign investing. Political
turmoil and economic instability in the countries in which the Fund invests
could adversely affect the value of a shareholder's investment. Also, if the
value of any foreign currency in which a Fund's investment is denominated
declines relative to the U.S. dollar, the value and total return of an
investment in the Fund may decline as well. Foreign investments, particularly
investments in emerging markets, carry added risks due to the potential for
inadequate or inaccurate financial information about companies, political
disturbances, and wider fluctuations in currency exchange rates.

Non-Diversification. Each Fund is non-diversified, which means that the
proportion of the Fund's assets that may be invested in the securities of a
single issuer is not limited by the 1940 Act. A "diversified" investment company
is required by the 1940 Act, generally, with respect to 75% of its total assets,
to invest not more than 5% of its assets in the securities of a single issuer.
As a result, a Fund may hold a smaller number of issuers than if it were
diversified. If this situation occurs, investing in a Fund could involve more
risk than investing in a fund that holds a broader range of securities because
changes in the financial condition of a single issuer could cause greater
fluctuation in the Fund's total return.

Short-selling and Options and Futures Transactions. Each Fund may engage in
short-selling and options and futures transactions to increase returns. There is
a risk that these transactions may reduce returns or increase volatility. In
addition, derivatives, such as options and futures, can be illiquid and highly
sensitive to changes in their underlying security, interest rate or index, and
as a result, can be highly volatile. A small investment in certain derivatives
could have a potentially large impact on the Fund's performance. Each Fund will
incur a loss as a result of a short sale if the price of the borrowed security
increases between the date of the short sale and the date on which the Fund
terminates or closes out its short position by buying the same security. The
Fund will realize a gain if the security declines in price between those dates.
There can be no assurance that the Fund will be able to close out a short
position at any particular time or at an acceptable price. Possible losses from
short sales differ from losses that could be incurred from a purchase of
securities. Losses on securities sold short are theoretically unlimited because
a Fund's loss on a short sale arises from increases in the value of the security
sold short. Losses on long positions, which arise from decreases in the value of
the security, however, are limited by the fact that a security's value cannot
drop below zero.

Leverage. Leveraging (buying securities using borrowed money) exaggerates the
effect on NAV of any increase or decrease in the market value of a Fund's
investment. Money borrowed for leveraging is limited to 33 1/3% of the value of
each Fund's total assets. Those borrowings would be subject to interest costs
which may or may not be recovered by appreciation of the securities purchased.

-12-

Active Trading. Each Fund may trade securities actively. This strategy could
increase transaction costs, reduce performance and may result in taxable
distributions, and accordingly lower the Fund's after-tax performance.

Illiquid Securities. Each Fund may invest up to 15% of its assets in illiquid
securities. A potential risk from investing in illiquid securities is that
illiquid securities cannot be disposed of quickly in the normal course of
business. Also, illiquid securities can be more difficult to value than more
widely traded securities and the prices realized from their sale may be less
than if such securities were more widely traded.

Interest Rates, Credit Risk and Call Risk of Debt Securities. Each Fund may
invest in fixed income investments which are affected by interest rates. When
interest rates rise, the prices of bonds typically fall in proportion to their
maturities. Debt securities are also subject to credit risk, i.e. the risk that
an issuer of securities will be unable to pay principal and interest when due,
or that the value of the security will suffer because investors believe the
issuer is less able to pay. This is broadly gauged by the credit ratings of the
securities in which the Funds invest. However, ratings are only the opinions of
the agencies issuing them and are not absolute guarantees as to quality. Many
fixed income securities, especially those issued at high interest rates, provide
that the issuer may repay them early. Issuers often exercise this right when
interest rates are low. Accordingly, holders of callable securities may not
benefit fully from the increase in value that other fixed income securities
experience when rates decline. Furthermore, the Funds may reinvest the proceeds
of the payoff at current yields, which may be lower than those paid by the
security that was paid off.

Debt Securities. Each Fund may invest up to 35% of its assets in fixed income
securities rated below investment grade, although neither Fund has any current
intention of investing more than 5% of its assets in such securities during the
coming year. These securities may be subject to certain risks with respect to
the issuing entity and to greater market fluctuations than certain lower
yielding, higher rated fixed income securities. Debt securities, in general, are
subject to interest rate risk, with the possibility that the market prices of a
Fund's investments may decline due to an increase in market interest rates and
credit risk, i.e. the risk that an issuer of securities will be unable to pay
principal and interest when due, or that the value of the security will suffer
because investors believe the issuer is less able to pay.

Portfolio Management. The portfolio manager's skill in choosing appropriate
investments for each Fund will determine in large part whether a Fund achieves
its investment objectives.

An investment in Midas Fund (and Midas Investors) is also subject to the
following principal specific risks:

Precious Metals. Investments in gold, silver, platinum and other natural
resources are considered speculative. Their prices can be influenced by a
variety of global economic, financial and political factors and may fluctuate
substantially over short periods of time and be more

-13-

volatile than other types of investments. Economic, political, or other
conditions affecting one or more of the major sources of gold, silver, platinum
and other natural resources could have a substantial effect on supply and demand
in countries throughout the world. Additionally, the majority of such producers
are domiciled in a limited number of countries. Midas Fund's investments can
also be significantly affected by developments in the precious metals and
resource industries. Bullion and coins do not generate income. The sole source
of return to the Funds from bullion and coins is from gains or losses realized
on their sale. The Funds pay custody costs to store their bullion and coins.

Mining. Resource mining involves significant risks and hazards to which these
Funds are exposed. Even when a resource mineralization is discovered, there is
no guarantee that the actual reserves of a mine will increase. Mining
exploration can last over a number of years, incur substantial costs, and not
lead to any new commercial mining. Resource mining runs the risk of increased
environmental, labor or other costs in mining due to environmental hazards,
industrial accidents, labor disputes, discharge of toxic chemicals, fire,
drought, flooding and other natural acts. Changes in laws relating to mining or
resource production or sales could also substantially affect resource values.

Concentration Risk. The Funds are subject to industry concentration risk, which
is the risk that a Fund's performance can be significantly affected by the
developments in the precious metals and resource industries.

-14-

COMPARATIVE FEE TABLE

Based on historical information derived from the year ending December 31,
2000, annualized current fees and expenses incurred by each Fund as of [proxy
date], and PRO FORMA fees for the Acquiring Funds after the Reorganizations are
shown below.

Shareholder Fees (fees paid directly from your investment)

Maximum Sales Charge (Load) Imposed on Purchases............................None
Maximum Deferred Sales Charge (Load)........................................None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends ................None
Redemption Fee within 30 days of purchase .................................1.00%

Annual Fund Operating Expenses (expenses as a % of average daily net assets that
are deducted from Fund assets)

Management Distribution Other Total Annual Fee Waiver Net Expenses
Fees and Service Expenses* Fund Opera- and Expense
12b-1 fees ting Reimbursement
Expenses
- ----------------- --------------- ---------------- --------------- ---------------- --------------------- ----------------------

Midas 1.00% 0.25% 2.23% 3.48% 0.00 3.48%
Fund
- ----------------- --------------- ---------------- --------------- ---------------- --------------------- ----------------------
Midas
Investors 1.00% 1.00% 3.86% 5.86% 0.75 5.11%**
- ----------------- --------------- ---------------- --------------- ---------------- --------------------- ----------------------
Pro 1.00% 0.25% 2.22% 3.47% 0.00% 3.47%
Forma
Combined
Fund
- ----------------- --------------- ---------------- --------------- ---------------- --------------------- ----------------------
- ----------------- --------------- ---------------- --------------- ---------------- --------------------- ----------------------
Special 0.90% 1.00% 1.54% 3.44% 0.00 3.44%
Equities
- ----------------- --------------- ---------------- --------------- ---------------- --------------------- ----------------------
U.S. and 1.00% 1.00% 2.95% 4.95% 0.75 4.20%**
Overseas
- ----------------- --------------- ---------------- --------------- ---------------- --------------------- ----------------------
Pro 0.89% 1.00% 1.55% 3.44% 0.00% 3.44%
Forma
Combined
Fund
- ----------------- --------------- ---------------- --------------- ---------------- --------------------- ----------------------

* Includes the reimbursement by each Fund to the Investment Manager for
accounting and other administrative services which are authorized by the
Board of Directors. The cost of services may vary over time; therefore, the
amount of the reimbursement may fluctuate.

** Reflects a contractual distribution fee waiver in effect through May 1,
2002.

-15-

EXAMPLE OF EFFECT ON FUND EXPENSES

This example is intended to help you compare the cost of investing in the
Midas Investors and U.S. and Overseas with the cost of investing in Midas Fund
and Special Equities, respectively, both as they presently exist and assuming
the Reorganization has been completed. The example assumes that you invest
$10,000 in the specified Fund for the time periods indicated and then redeem all
of your shares at the end of those periods. The example also assumes that your
investment has a 5% return each year, that all dividends and other distributions
are reinvested and that the Fund's operating expenses are those shown in the
tables above. Although your actual costs may be higher or lower, based on these
assumptions, your costs would be:

One Year Three Five Ten Years
Years Years
- ------------------------------- ---------- ---------- ---------- -----------
Midas Fund $ 351 $1,068 $1,807 $3,756
- ------------------------------- ---------- ---------- ---------- -----------
Midas Investors $ 511 $1,671 $2,812 $5,579
- ------------------------------- ---------- ---------- ---------- -----------
Pro Forma Combined Midas $ 350 $1,065 $1,803 $3,747
Fund
- ------------------------------- ---------- ---------- ---------- -----------

- ------------------------------- ---------- ---------- ---------- -----------
Special Equities $ 347 $1,056 $1,788 $3,721
- ------------------------------- ---------- ---------- ---------- -----------
U.S. and Overseas $ 422 $1,420 $2,420 $4,922
- ------------------------------- ---------- ---------- ---------- -----------
Pro Forma Combined Special $ 347 $1,056 $1,788 $3,721
Equities Fund
- ------------------------------- ---------- ---------- ---------- -----------

-16-

OPERATIONS OF MIDAS FUND AND SPECIAL EQUITIES FOLLOWING THE
REORGANIZATION

It is not expected that either Midas Fund or Special Equities will revise
any of its policies following the Reorganizations to reflect those of Midas
Investors or U.S. and Overseas, respectively. The Investment Manager has
reviewed the current portfolios of Midas Fund and Special Equities and
determined that each Fund's holdings are compatible with the portfolios of Midas
Investors and U.S. and Overseas, respectively. The Funds that will be merged are
similar in terms of the number of issuers in which they are invested; overall,
as of December 31, 2000 Midas Fund and Midas Investors each have portfolios that
include fewer than 30 positions and Special Equities and U.S. and Overseas each
have portfolios with fewer than 20 positions. As a result, the Investment
Manager believes that, if the Reorganizations are approved, a substantial
portion of Midas Investors and U.S. and Overseas' assets could be transferred to
and held by Midas Fund and Special Equities, respectively.

PERFORMANCE

The information below provides an indication of the risks of investing in
each Fund by showing changes in the Fund's performance from year to year. The
tables compare the Funds' average annual returns for the 1, 5, and 10 year
periods with returns of appropriate broad-based securities market indices and in
so doing, also reflect the risks of investing in the Funds. The Standard &
Poor's 500 Stock Index ("S&P 500") is an index that is unmanaged and fully
invested in common stocks. The Morningstar Specialty Fund-Precious Metals
Average ("PMA") is an equally weighted average of the 38 managed precious metals
funds tracked by Morningstar. The Morgan Stanley Capital International World
Index ND ("MSCI World Index") is an unmanaged index which is derived from
equities of Europe, Australasia and Far East countries and Canada and the U.S.
The Russell 2000 Index is an index that is unmanaged and fully invested in
common stocks of small companies. Morningstar's World Stock Fund Average
("MSFA") is an equally weighted average of 125 world equity mutual funds. Both
the bar charts and the tables assume reinvestment of dividends and
distributions. As with all mutual funds, past performance is not necessarily an
indication of future performance.

MIDAS FUND
Year-by-year total return as of 12/31 each year (%)

(0.2) (7.16) 99.24 (17.27) 36.73
- ----- ------ ----- ------- -----
1991 1992 1993 1994 1995

21.22 (59.03) (28.44) (9.93) (38.24)
- ----- ------- ------- ------ -------
1996 1997 1998 1999 2000

Best Quarter:
4/93-6/93
36.64%

Worst Quarter:
10/97-12/97
(40.90)%

Average annual total return for the periods ended 12/31/00

1 Year 5 Years 10 Years
----------------------------------------------------------------
Midas Fund (38.24)% (27.69)% (8.47)%
S&P 500 (9.10)% 18.32% 17.45%
PMA (17.69)% (13.81)% (5.39)%

-17-

MIDAS INVESTORS
Year-by-year total return as of 12/31 each year (%)

(1.14) (17.18) 87.63 (13.83) (5.43)
- ------ ------- ----- ------- ------
1991 1992 1993 1994 1995

4.26 (55.69) (32.21) (6.03) (26.42)
- ----- ------- ------- ------ -------
1996 1997 1998 1999 2000

Best Quarter:
4/93-6/93
34.87%

Worst Quarter:
10/97-12/97
(32.99)%

Average annual total return for the periods ended 12/31/00

1 Year 5 Years 10 Years
-----------------------------------------------------------
Midas Investors (26.42)% (26.36)% (12.21)%
S&P 500 (9.10)% 18.32% 17.45%
PMA (17.69)% (13.81)% (5.39)%

MIDAS SPECIAL EQUITIES FUND
Year-by-year total return as of 12/31 each year (%)

40.54 28.38 16.35 (16.54) 40.47
- ----- ----- ----- ------- -----
1991 1992 1993 1994 1995

1.06 5.23 (5.00) 30.58 (21.18)
- ---- ---- ------ ----- -------
1996 1997 1998 1999 2000

Best Quarter:
10/99-12/99
35.37%

Worst Quarter:
7/98-9/98
(26.91)%

Average annual total return for the periods ended 12/31/00

1 Year 5 Years 10 Years
-------------------------------------------------
Midas Special Equities Fund (21.18)% 0.78% 9.85%
S&P 500 (9.10)% 18.32% 17.45%
Russell 2000 Index (3.03)% 10.32% 15.53%

-18-

MIDAS U.S. AND OVERSEAS FUND
Year-by-year total return as of 12/31 each year (%)

22.55 (2.57) 26.71 (13.12) 25.11
- ----- ------ ----- ------- -----
1991 1992 1993 1994 1995

5.34 5.64 1.18 47.44 (52.09)
- ---- ---- ---- ----- -------
1996 1997 1998 1999 2000

Best Quarter:
10/99-12/99
51.37%

Worst Quarter:
4/00-6/00
(26.47)%

Average annual total return for the periods ended 12/31/00

1 Year 5 Years 10 Years
------------------------------------------------
Midas U.S. and Overseas Fund (52.09)% (4.47)% 2.69%
MSFA (10.58)% 12.11% 10.72%
MSCI World Index (13.18)% 12.12% 11.93%

-19-

MANAGEMENT

INVESTMENT MANAGER

Midas Management Corporation is the Investment Manager of each of the Funds
and would continue to serve in that capacity for the combined Funds. The
Investment Manager provides day-to-day advice regarding portfolio transactions
for each Fund. The Investment Manager also furnishes or obtains on behalf of
each Fund all services necessary for the proper conduct of the Fund's business
and administration. Its address is 11 Hanover Square, New York, New York 10005.

Midas Fund is managed by the Investment Manager's Investment Policy
Committee, and would continue to be managed by the Committee if the
Reorganization is approved. The Chairman of the Investment Policy Committee, and
a member of that Committee since 1990, is Thomas B. Winmill, who is the
portfolio manager of Midas Investors. Mr. Winmill has served as the portfolio
manager of Midas Investors since May 1, 1998. He is President and Chief
Executive Officer of the Investment Manager and all the Midas Funds. As Chairman
of the Investment Policy Committee, Mr. Winmill helps establish general
investment guidelines.

Bassett S. Winmill is the portfolio manager of Special Equities and U.S.
and Overseas and he would continue to serve in that capacity for the combined
Fund. He is the Chief Investment Strategist of the Investment Manager, a member
of its Investment Policy Committee and a director of three of the Midas Funds.
He has served as the portfolio manager of Special Equities and U.S. and Overseas
since November 30, 1999. Previously, he was Chairman of the Investment Policy
Committee.

Each Fund pays a management fee to the Investment Manager at an annual rate
based on each Fund's average daily net assets. Midas Fund pays a management fee
of 1.00% on the first $200 million of average daily net assets, declining
thereafter. Midas Investors, Special Equities and U.S. and Overseas each pay
management fees of 1.00% on the first $10 million of average daily net assets,
declining thereafter. For the fiscal year ending December 31, 2000, Midas Fund,
Midas Investors, Special Equities and U.S. and Overseas paid the Investment
Manager a fee of 1.00%, 1.00%, 0.90%, and 1.00%, respectively, of each Fund's
average daily net assets.

As discussed above under the section entitled "Comparative Fee Table," each
combined Fund's expenses are expected to be lower than each of the Fund's
current expenses.

DISTRIBUTOR

Investor Service Center, Inc. ("Investor Service Center"), 11 Hanover
Square, New York, New York 10005, is the distributor of the Funds and provides
distribution and shareholder services and will continue to serve in that
capacity after the Reorganization. Each of the Funds has adopted a plan under
Rule 12b-1 and pays the distributor a 12b-1 fee as compensation for distribution
and shareholder services based on each Fund's average daily net assets. These
fees are paid out of the Fund's assets on an ongoing basis. Over time these fees
will increase the cost of an investment and may cost more than paying other
types of sales charges.

-20-

Midas Fund and Special Equities pay a 12b-1 fee equal to 0.25% and 1.00%,
respectively, per annum of the Fund's average daily net assets. Based on a one
year contractual agreement, Midas Investors and U.S. and Overseas each pays a
12b-1 fee equal to 0.25% of the Fund's average daily net assets. Without that
agreement, each of these Funds would pay a 12b-1 fee equal to 1.00% per annum of
the Fund's average daily net assets. If the Reorganizations are not approved by
Midas Investors and U.S. and Overseas shareholders, Investor Service Center may
choose not to continue its fee waivers at the end of the contractual period, and
each Fund's expenses could be higher.

OTHER FUND SERVICE PROVIDERS

The Funds currently have the same transfer and shareholder servicing agent
and the same custodian. Tait, Weller & Baker are the independent accountants for
the Funds and the Reorganizations are not expected to affect their ability to
continue to serve in that capacity for the combined Funds.

DIRECTORS AND OFFICERS

Each of the Directors of Midas Fund and Special Equities will continue to
serve in that capacity for the combined Funds. For a complete description of the
Directors and officers of Midas Fund and Special Equities, including a
description of each Director's principal occupation for the past five years and
compensation paid to each Director, see the May 1, 2001 Statement of Additional
Information for each Fund, incorporated herein by reference. These individuals
also serve as directors of Midas Investors and U.S. and Overseas.

CERTIFICATES

Upon approval of the Reorganizations, shareholders will not be required to
turn in their share certificates or take any other action to effectuate the
Reorganizations. Shareholders of Midas Investors and U.S. and Overseas with
certificates representing shares will have established in their name an account
on the transfer books of Midas Fund and/or Special Equities, respectively, with
shares of the Acquiring Fund in the amount provided for under the Plans.
Certificates for the respective Funds will be cancelled and have no further
value.

PURCHASES, REDEMPTIONS AND EXCHANGES

PURCHASES. The price for Fund shares is the Fund's next calculation, after
the order is placed, of NAV per share which is determined as of the close of
regular trading on the New York Stock Exchange (the "Exchange")(currently, 4:00
p.m., eastern time, unless weather, equipment failure or other factors

-21-

contribute to an earlier closing) each day the Exchange is open. The Funds'
shares will not be priced on the days on which the Exchange is closed for
trading. The Funds' investments are valued based on market value, or where
market quotations are not readily available, based on the fair value as
determined in good faith by or under the direction of the Fund's board. For a
more complete discussion of share purchases, see the "Purchasing Shares" section
in the Funds' Prospectus.

REDEMPTIONS. Shares of the Funds may be redeemed by telephone, by mail, or
by Systematic Withdrawal Plan. Redemptions are made at the NAV per share of each
Fund next determined after a request in proper form is received. Payment for
shares redeemed will ordinarily be made within three business days after receipt
of the redemption request in proper form. Redemption proceeds from shares
purchased by check or EFT transfer may be delayed 15 calendar days to allow the
check or transfer to clear. Shares of all Funds redeemed or exchanged within 30
days of purchase will be subject to a 1% redemption fee. For a more complete
discussion of share redemption procedures, see the "Redeeming Shares" and the
"Account and Transaction Policies" sections in the Funds' Prospectus.

Redemptions of Midas Investors and U.S. and Overseas shares may be effected
through the Closing Date, which is expected to occur on or about [closing date].

EXCHANGES. At least $500 worth of shares of a Fund may be exchanged for
shares of any of the other Midas Funds. For a complete discussion of the Funds'
exchange policies, see the "Exchange Privileges" section in the Funds'
Prospectus.

DIVIDENDS AND OTHER DISTRIBUTIONS

Each Fund pays its shareholders dividends from net investment income and
distributes net capital gains that it has realized, if any. Income dividends are
normally declared and paid annually and net capital gains, if any, normally are
distributed once a year. Distributions are reinvested in the Fund unless
otherwise requested.

Generally, shareholders will be taxed when they sell shares, exchange
shares and receive distributions (whether reinvested or taken in cash).
Typically, the tax treatment will be as follows: income dividends and net short
term capital gains distributions will be treated as ordinary income,
distributions of net capital gain (the excess of net long term capital gain over
net short-term capital loss) will be treated as long term capital gains, gains
or losses from sales or exchanges of shares held for more than one year will be
treated as long term capital gains or losses and gains or losses from sales or
exchanges of shares held for one year or less will be treated as short term
capital gains or losses.

On or immediately before the Closing Date, Midas Investors and U.S. and
Overseas will each declare as a distribution substantially all of its net
investment income and realized net capital gain, if any, through that date and
will distribute that amount plus any previously declared but unpaid
distributions, in order to continue to maintain its tax status as a regulated
investment company.

-22-

The privacy policies of the Funds are identical.

FEDERAL INCOME TAX CONSEQUENCES OF THE REORGANIZATION

The Funds will receive an opinion of tax counsel, Kirkpatrick & Lockhart
LLP, to the effect that each Reorganization will qualify as a tax-free
reorganization within the meaning of section 368(a)(1)(C) of the Code.
Accordingly, none of the Funds and their shareholders will recognize any gain or
loss as a direct result of the Reorganizations. See "The Proposed Transaction -
Federal Income Tax Considerations" below. If Midas Investors or U.S. and
Overseas sells securities prior to the Closing Date, it may recognize net gains
or losses. Any net gains recognized by either Fund would increase the amount of
any taxable distribution made to its shareholders prior to the Closing Date.

THE PROPOSED TRANSACTION

REASONS FOR THE REORGANIZATION

The Board of Directors of Midas Investors and the Board of Directors of
U.S. and Overseas each approved the respective Reorganization at a meeting held
on June 13, 2001. The Boards and the Investment Manager have determined that the
Funds that are going to be reorganized have similar or compatible investment
objectives, policies, fundamental investment limitations and risks and that
Midas Fund and Special Equities have lower operating expenses than Midas
Investors and U.S. and Overseas, respectively, thereby making it more efficient
for the Funds to be combined in the manner proposed.

At the Meeting of Midas Investors' and U.S. and Overseas' Boards on June
13, 2001, the Investment Manager reported that it had evaluated whether it would
be in shareholders' best interests for each Fund to continue to operate in its
current structure. The Investment Manager noted the long-term performance of
each Fund, each Fund's expenses, and the relative size of Midas Investors and
U.S. and Overseas, compared to Midas Fund and Special Equities, respectively.
The Investment Manager expressed its view that the respective mergers of each of
the Funds could be advantageous for shareholders and could lead to a reduction
in shareholder expenses due to a larger asset base and the elimination of
certain redundant expenses. The Investment Manager also noted that Midas
Investors' investment objective and strategies overlap to a large extent with
the Midas Fund, which may be potentially confusing to investors. The Investment
Manager determined that a merger of the four Funds into two Funds would
streamline the offering of the family of Midas Funds, clarifying the unique
character of each Fund for investors. The Investment Manager also noted in
detail how the Reorganizations will benefit it and its affiliate, the Funds'
Distributor, Investor Service Center, by providing certain cost savings and
higher fees.

-23-

The Investment Manager then reviewed with each Board the principal terms of
the Reorganization Plans. The Investment Manager informed the Boards that the
Reorganization was expected to be tax-free to the Voting Fund shareholders, that
the Voting Fund shareholders would receive shares of the respective Acquiring
Fund equal in aggregate NAV to their Voting Fund shares and that after the
Reorganization shareholders of the combined Fund could continue to exchange into
other Midas Funds. The Investment Manager reviewed each respective Fund's
performance with the Boards. With respect to Midas Fund and Midas Investors, the
Investment Manager noted that Midas Investors had higher total returns than
Midas Fund for three out of the past five years, although Midas Fund had better
long term average annual total returns, over a ten year period. With respect to
Special Equities and U.S. and Overseas, the Investment Manager noted that U.S.
and Overseas had higher total returns than Special Equities for four of the past
five years, but Special Equities had higher average annual total returns over
one, five and ten year periods than U.S. and Overseas. As to future performance,
the Investment Manager noted that there could be no guarantee or assurance with
respect to either Midas Fund or Special Equities - similar to other mutual
funds.

In approving the Reorganizations, the Board of Midas Investors and the
Board of U.S. and Overseas, including a majority of each Board's Independent
Directors, respectively considered a number of factors, including the following:

1. The compatibility of the Fund's investment objectives, policies and
restrictions, and the compatibility of the assets being acquired to those
already held by the Acquiring Fund;

2. The effect of the Reorganization on expected investment performance;

3. The effect of the Reorganization on the expense ratio of the Fund relative
to its current expense ratio;

4. The costs to be incurred by the Fund as a result of the Reorganization;

5. The tax consequences of the Reorganization;

6. Possible alternatives to the Reorganization; and

7. The potential benefits of the transaction to other persons, including the
Investment Manager and Investors Service Center.

On the basis of the information provided to it, the respective Boards,
including a majority of each Board's Independent Directors, have determined that
the Reorganization in which its Fund is participating would be in the best
interests of that Fund and that the interests of that Fund's shareholders would
not be diluted as a result of the Reorganization. THEREFORE, EACH BOARD
UNANIMOUSLY APPROVED THE REORGANIZATION AND RECOMMENDED THE APPROVAL OF THE
REORGANIZATION PLAN BY THE SHAREHOLDERS OF MIDAS INVESTORS AND U.S. AND
OVERSEAS, RESPECTIVELY, AT THE MEETING.

-24-

REORGANIZATION PLAN

The terms and conditions under which the Reorganizations would be
consummated are set forth in the Reorganization Plans. Significant provisions of
each Reorganization Plan are summarized below; however, this summary is
qualified in its entirety by reference to each Reorganization Plan, the form of
which is attached as Appendix B to this Proxy Statement/Prospectus.

Each Reorganization Plan provides for (a) the acquisition by the Acquiring
Fund on the Closing Date of all the assets of the Voting Fund in exchange solely
for Acquiring Fund shares and the assumption by the Acquiring Fund of all of the
Voting Fund's liabilities and (b) the distribution of those Acquiring Fund
shares to the shareholders of the Voting Fund.

The assets of the Voting Fund to be acquired by the Acquiring Fund include
all cash, cash equivalents, securities, receivables, claims and rights of
action, rights to register shares under applicable securities laws, books and
records, deferred and prepaid expenses shown as assets on the Voting Fund's
books and all other property owned by the Voting Fund. The Acquiring Fund will
assume all of the Voting Fund's liabilities, debts, obligations and duties of
whatever kind or nature; provided, however, that Voting Fund will use its best
efforts to discharge all of its known liabilities before the Closing Date. The
Acquiring Fund will deliver its shares to the Voting Fund, which will distribute
the shares to the Voting Fund's shareholders.

The value of the Voting Fund's assets to be acquired by the Acquiring Fund
and the NAV per share of the Acquiring Fund shares to be exchanged for those
assets will be determined as of the close of regular trading on the Exchange on
the Closing Date ("Valuation Time"), using the valuation procedures described in
the relevant Fund's then-current Prospectus and Statement of Additional
Information. The Voting Fund's net value shall be the value of its assets to be
acquired by the Acquiring Fund, less the amount of its liabilities, as of the
Valuation Time.

On, or as soon as practicable after, the Closing Date, the Voting Fund will
distribute the Acquiring Fund shares it receives pro rata to its shareholders of
record as of the effective time of the Reorganization, so that each Voting Fund
shareholder will receive a number of full and fractional Acquiring Fund shares
equal in aggregate value to the shareholder's holdings in the Voting Fund. The
Voting Fund will be terminated as soon as practicable after the share
distribution. The shares will be distributed by opening accounts on the books of
the Acquiring Fund in the names of Voting Fund shareholders and by transferring
to those accounts the shares previously credited to the account of the Voting
Fund on those books. Certificates for shares in the Voting Fund will be
canceled, have no further value, and should be disposed of. Fractional shares in
the Acquiring Fund will be rounded to the third decimal place.

-25-

Because the Acquiring Fund shares will be issued at NAV in exchange for the
net assets of the Voting Fund, the aggregate value of Acquiring Fund shares
issued to Voting Fund shareholders will equal the aggregate value of Voting Fund
shares. The NAV per share of the Acquiring Fund will be unchanged by the
transaction. Costs of the Funds pertaining to the Reorganization will be borne
by the respective Funds.

Any transfer taxes payable upon the issuance of the Acquiring Fund shares
in a name other than that of the registered Voting Fund shareholder will be paid
by the person to whom those shares are to be issued as a condition of the
transfer. Any reporting responsibility of the Voting Fund to a public authority
will continue to be its responsibility until it is terminated.

The consummation of each Reorganization is subject to a number of
conditions set forth in the Reorganization Plans, some of which may be waived by
any Fund. In addition, the Reorganization Plans may be amended in any mutually
agreeable manner, except that no amendment may be made subsequent to the Meeting
that has a material adverse effect on the interests of a Voting Fund's
shareholders. If a Reorganization is not approved by shareholders of a Fund at
the Meeting, that Fund will continue to operate, and its Board will then
consider other options and alternatives for the future of the Fund, including
resubmitting this proposal for shareholder approval or other appropriate action.

DESCRIPTION OF SECURITIES TO BE ISSUED

Midas Fund is registered with the SEC as an open-end management investment
company. It has authorized capital of one billion shares of common stock, par
value $0.01 per share. The Fund may issue additional series of shares. Currently
the Fund offers only one class of shares, but its Board of Directors is
authorized to create additional classes and series. Fund shareholders are
entitled to one vote per share and a fractional vote for fractional shares held.
Voting rights are not cumulative.

Special Equities is registered with the SEC as an open-end management
investment company. It has authorized capital of 500 million shares of common
stock, par value $0.01 per share. The Fund may issue additional series of
shares. Currently the Fund offers only one class of shares, but its Board of
Directors is authorized to create additional classes and series. Fund
shareholders are entitled to one vote per share and a fractional vote for
fractional shares held. Voting rights are not cumulative.

TEMPORARY WAIVER OF INVESTMENT RESTRICTIONS

Certain fundamental investment restrictions of Midas Investors and
U.S. and Overseas, which prohibit those Funds from acquiring more than a stated
percentage of ownership of another company or industry, might be construed as
restricting their ability to carry out the Reorganization. By approving the
respective Reorganization Plans, Midas Investors and U.S. and Overseas

-26-

shareholders will be agreeing to waive, only for the purpose of the
Reorganization, those fundamental investment restrictions that could prohibit or
otherwise impede the transaction.

FEDERAL INCOME TAX CONSIDERATIONS

The exchange of each Voting Fund's assets for the respective Acquiring
Fund's shares and that Acquiring Fund's assumption of that Voting Fund's
liabilities is intended to qualify for federal income tax purposes as a tax-free
reorganization under section 368(a)(1)(C) of the Code. Each pair of Funds
participating in a Reorganization will receive an opinion of tax counsel,
Kirkpatrick & Lockhart LLP, substantially to the effect that, with respect to
that Reorganization:

(1) The Acquiring Fund's acquisition of the Voting Fund's assets in exchange
solely for the Acquiring Fund's shares and the Acquiring Fund's assumption
of the Voting Fund's liabilities, followed by the Voting Fund's
distribution of those shares pro rata to its shareholders constructively in
exchange for their Voting Fund shares, will qualify as a reorganization
within the meaning of section 368(a)(1)(C) of the Code, and each Fund will
be "a party to a reorganization" within the meaning of section 368(b) of
the Code;

(2) The Voting Fund will recognize no gain or loss on the transfer to the
Acquiring Fund of its assets in exchange solely for Acquiring Fund shares
and the Acquiring Fund's assumption of the Voting Fund's liabilities or on
the subsequent distribution of those shares to the Voting Fund's
shareholders in constructive exchange for their Voting Fund shares;

(3) The Acquiring Fund will recognize no gain or loss on its receipt of the
transferred assets in exchange solely for its shares and its assumption of
the Voting Fund's liabilities;

(4) The Acquiring Fund's basis in the transferred assets will be the same as
the Voting Fund's basis therein immediately before the Reorganization, and
the Acquiring Fund's holding period for those assets will include the
Voting Fund's holding period therefor;

(5) A Voting Fund shareholder will recognize no gain or loss on the
constructive exchange of all its Voting Fund shares solely for Acquiring
Fund shares pursuant to the Reorganization; and

-27-

(6) A Voting Fund shareholder's aggregate basis in the Acquiring Fund shares it
receives in the Reorganization will be the same as the aggregate basis in
its Voting Fund shares it constructively surrenders in exchange for those
Acquiring Fund shares, and its holding period for those Acquiring Fund
shares will include its holding period for those Voting Fund shares,
provided the shareholder holds them as capital assets on the Closing Date.

Each tax opinion will state that no opinion is expressed as to the effect
of the Reorganization on either Fund or any Voting Fund shareholder with respect
to any Voting Fund asset as to which any unrealized gain or loss is required to
be recognized for federal income tax purposes at the end of a taxable year (or
on the termination or transfer thereof) under a mark-to- market system of
accounting.

Shareholders of each Voting Fund should consult their tax advisers
regarding the effect, if any, of the Reorganization applicable to them in light
of their individual circumstances. Because the foregoing discussion only relates
to the federal income tax consequences of the Reorganizations, shareholders also
should consult their tax advisers about state and local tax consequences, if
any, of the Reorganizations.

FINANCIAL HIGHLIGHTS OF MIDAS FUND AND SPECIAL EQUITIES

The tables below provide selected per share data and ratios for Midas Fund
and Special Equities. This information is supplemented by the financial
statements and accompanying notes in each Fund's Annual Report to Shareholders
for the fiscal year ended December 31, 2000 and in each Fund's Semi-Annual
Report to shareholders for the fiscal period ended June 30, 2001. The financial
highlights for the fiscal years ended December 31, 2000, and earlier shown below
have been audited by Tait, Weller & Baker, independent auditors, whose report is
included in the Annual Report to Shareholders.

MIDAS FUND

Years Ended December 31,
- ------------------------------------------------------------------------------------------------------------------------------------
2000 1999 1998 1997 1996
---- ---- ---- ---- ----
PER SHARE DATA*

Net asset value at beginning of period .............. $ 1.36 $ 1.51 $ 2.11 $ 5.15 $ 4.25
----------- ----------- ----------- ----------- -----------
Income from investment operations:
Net investment loss .............................. (.02) (.01) -- (.03) (.05)
Net realized and unrealized gain (loss) .......... (.50) (.14) (.60) (3.01) .95
----------- ----------- ----------- ----------- -----------
Total from investment operations ............ (.52) (.15) (.60) (3.04) .90
----------- ----------- ----------- ----------- -----------
Less distributions:
Distributions from net realized gains ............ -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Net asset value at end of period .................... $ .84 $ 1.36 $ 1.51 $ 2.11 $ 5.15
=========== =========== =========== =========== ===========
TOTAL RETURN ........................................ (38.24)% (9.93)% (28.44)% (59.03)% 21.22%
RATIOS/SUPPLEMENTAL DATA

-28-

Net assets at end of period (000's omitted) ......... $ 34,820 $ 71,280 $ 87,841 $ 100,793 $ 200,457
Ratio of expenses to average net assets(a)(b) ....... 3.48% 2.81% 2.33% 1.90% 1.63%
Ratio of net investment loss to average net assets(c) (2.35)% (.80)% (.02)% (.72)% (.92)%
Portfolio turnover rate ............................. 109% 74% 27% 50% 23%

*Per share net investment loss and net realized and unrealized gain (loss) on
investments have been computed using the average number of shares outstanding.
These computations had no effect on net asset value per share. (a) Ratio prior
to reimbursement by the investment manager was 2.15% and 1.83% for the years
ended December 31, 1997 and 1996, respectively. (b) Ratio after transfer agent
and custodian credits was 3.40%, 2.73%, 2.30%, 1.88% and 1.61% for the years
ended December 31, 2000, 1999, 1998, 1997 and 1996, respectively. (c) Ratio
prior to reimbursement by the investment manager was (0.97)% and (1.12)%, for
the years ended December 31, 1997 and 1996, respectively.

MIDAS SPECIAL EQUITIES FUND

Net asset value at beginning of period ........... $ 26.56 $ 20.34 $ 23.38 $ 22.96 $ 25.42
---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment loss ........................... (.39) (.27) (.61) (.38) (.73)
Net realized and unrealized gain (loss) ....... (5.27) 6.49 (.65) 1.55 .99
---------- ---------- ---------- ---------- ----------
Total from investment operations ........ (5.66) 6.22 (1.26) 1.17 .26
---------- ---------- ---------- ---------- ----------
Less distributions:
Distributions from net realized gains ......... (.88) -- (1.78) (.75) (2.72)
---------- ---------- ---------- ---------- ----------
Net increase (decrease) in net asset value .... (6.54) 6.22 (3.04) .42 (2.46)
Net asset value at end of period ................. $ 20.02 $ 26.56 $ 20.34 $ 23.38 $ 22.96
========== ========== ========== ========== ==========
TOTAL RETURN ..................................... (22.2)% 30.6% (5.0)% 5.3% 1.0%
RATIOS/SUPPLEMENTAL DATA
Net assets at end of period (000's omitted) ...... $ 29,036 $ 41,629 $ 36,807 $ 44,773 $ 49,840
Ratio of expenses to average net assets(a)(b) .... 3.44% 3.13% 3.42% 2.81% 2.92%
Ratio of net investment loss to average net assets (1.77)% (1.44)% (2.57)% (1.48)% (2.81)%
Portfolio turnover rate .......................... 248% 159% 97% 260% 311%

*Per share net investment loss and net realized and unrealized gain (loss) on
investments have been computed using the average number of shares outstanding.
These computations had no effect on net asset value per share. (a) Ratio
excluding interest expense was 2.77%, 2.71%, 2.63%, 2.53% and 2.45% for the
years ended December 31, 2000, 1999, 1998, 1997 and 1996, respectively. (b)
Ratio after transfer agent and custodian fee credits was 3.42%, 3.04%, 3.41% and
2.79% for the years ended December 31, 2000, 1999, 1998 and 1997, respectively.
There was no custodian fee credit for 1996.

-29-

CAPITALIZATION

The following tables show the capitalization (unaudited) of each Fund as of
June 30, 2001, and on a PRO FORMA combined basis as of June 30, 2001, giving
effect to the Reorganization (amounts are in thousands):

Midas Fund Midas Investors Midas Fund (Pro
Forma)
- --------------------------------------------------------------------------------
Net Assets $34,493,984 $3,374,174 $37,868,158
- --------------------------------------------------------------------------------
Net Asset Value $0.88 $2.01 $0.88
Per Share
- --------------------------------------------------------------------------------
Shares Outstanding 39,377,053.001 1,675,616.368 43,031,997.727
- --------------------------------------------------------------------------------

Special Equities U.S. and Overseas Special Equities
(Pro Forma)
- --------------------------------------------------------------------------------
Net Assets $20,555,267 $2,834,726 $23,389,993
- --------------------------------------------------------------------------------
Net Asset Value Per $14.64 $3.47 $14.64
Share
- --------------------------------------------------------------------------------
Shares Outstanding 1,403,877.842 817,306.874 1,597,677.117
- --------------------------------------------------------------------------------

REQUIRED VOTE

Approval of each Reorganization Plan requires the affirmative vote of a
majority of the outstanding voting securities of Midas Investors and U.S. and
Overseas, respectively, as of the Record Date. Each outstanding full share of
Midas Investors and U.S. and Overseas is entitled to one vote, and each
outstanding fractional share thereof is entitled to a proportionate fractional
share of one vote. If a Reorganization is not approved by the requisite vote of
shareholders of either Midas Investors or U.S. and Overseas, the Board of that
Fund will consider what subsequent actions would be in the best interests of
shareholders.

THE BOARD UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE
"FOR" EACH PROPOSAL.

ORGANIZATION OF THE FUNDS

Midas Fund is a non-diversified open-end management investment company
organized as a Maryland corporation in 1995. Prior to August 28, 1995, the Fund
operated under the name "Excel Midas Gold Shares, Inc.," a Minnesota corporation
organized in 1985.

Special Equities Fund is a non-diversified open-end management investment
company organized as a Maryland corporation in 1986.

-30-

LEGAL MATTERS

Certain legal matters in connection with the issuance of Midas Fund shares
and Special Equities shares as part of the Reorganization will be passed upon by
Midas Fund and Special Equities counsel, The Law Offices of Stephanie A. Djinis.
Certain legal matters concerning the tax consequences of the Reorganization will
also be passed upon by Kirkpatrick & Lockhart LLP.

INFORMATION FILED WITH THE SEC

Each of the Midas Funds are subject to the information requirements of the
Securities Exchange Act of 1934 and the 1940 Act and, in accordance therewith,
each files reports and other information with the SEC. Reports, proxy
statements, registration statements and other information may be inspected
without charge and copied at the Public Reference Room maintained by the SEC at
450 Fifth Street, N.W., Washington, DC 20549, and at the following regional
offices of the SEC: 7 World Trade Center, Suite 1300, New York, NY 10048 and 500
West Madison Street, 14th Floor, Chicago, IL 60661. Information on the operation
of the Public Reference Room may be obtained by calling the SEC at
(202)942-8090. The SEC maintains an internet web site at http://www.sec.gov that
contains information regarding the Midas Funds, and other registrants that file
electronically with the SEC. Copies of such material may also be obtained, after
paying a duplicating fee, from the Public Reference Branch, Office of Consumer
Affairs and Information Services, Securities and Exchange Commission,
Washington, DC, 20549, or by electronic request at the following e-mail address:
publicinfo@sec.gov.

EXPERTS

The audited financial statements of each of the Funds, incorporated herein
by reference and incorporated by reference into each Fund's Statement of
Additional Information, have been audited by Tait, Weller & Baker independent
accountants, whose report thereon is included in each Fund's Annual Report to
Shareholders for the fiscal year ended December 31, 2000. The financial
statements audited by Tait, Weller & Baker have been incorporated herein by
reference in reliance on its report given on its authority as experts in
auditing and accounting matters.

OTHER INFORMATION

SHAREHOLDER PROPOSALS

As a general matter, Midas Investors and U.S. and Overseas do not hold
annual or other regular meetings of shareholders. Any shareholder who wishes to
submit proposals to be considered at a special meeting of Midas Investors or
U.S. and Overseas shareholders should send such proposals to the respective Fund
at 11 Hanover Square, New York, New York 10005. Proposals must be received a
reasonable period of time prior to any meeting to be included in the proxy
materials or otherwise considered. Moreover, consideration of such proposals is

-31-

subject to limitations under the federal securities laws and the Funds' Articles
of Incorporation and Bylaws. Persons named as proxies will vote in their
discretion with respect to proposals submitted on an untimely basis.

In addition to the use of the mails, proxies may be solicited personally,
by telephone, or by other means, and the Funds may pay persons holding its
shares in their names or those of their nominees for their expenses in sending
soliciting materials to their principals. The Funds will bear the cost of
soliciting proxies. In addition, the Funds will retain ____________
("_________"),________________________, to solicit proxies on behalf of its
Board for a fee estimated at $___________ plus expenses, primarily by contacting
shareholders by telephone and telegram. Authorizations to execute proxies may be
obtained by telephonic instructions in accordance with procedures designed to
authenticate the shareholder's identity. In all cases where a telephonic proxy
is solicited, the shareholder will be asked to provide his or her address,
social security number (in the case of an individual) or taxpayer identification
number (in the case of an entity) or other identifying information and the
number of shares owned and to confirm that the shareholder has received the
Proxy Statement and proxy card in the mail. Within 48 hours of receiving a
shareholder's telephonic voting instructions and prior to the Meeting, a
confirmation will be sent to the shareholder to ensure that the vote has been
taken in accordance with the shareholder's instructions and to provide a
telephone number to call immediately if the shareholder's instruction are not
correctly reflected in the confirmation. Shareholders requiring further
information with respect to telephonic voting instructions or the proxy
generally should contact _____________ toll-free at 1-800-___________. Any
shareholder giving a proxy may revoke it at any time before it is exercised by
submitting to the Fund a written notice of revocation or a subsequently executed
proxy or by attending the meeting and voting in person.

OTHER BUSINESS

The Board of Midas Investors and the Board of U.S. and Overseas knows of no
other business to be brought before the Meeting other than matters set forth in
this Proxy Statement/Prospectus, but should any other matter requiring a vote of
Midas Investors or U.S. and Overseas shareholders arise, the persons named as
proxies will vote in their discretion with respect to proposals submitted on an
untimely basis.

-32-

APPENDIX A

PRINCIPAL SHAREHOLDERS

The following table sets forth the ownership of each Fund's outstanding
equity securities as of June 30, 2001 by each record and beneficial owner of 5%
or more of the outstanding equity securities of a Fund's class and PRO FORMA
percentage ownership of Midas Fund and Special Equities if the Reorganizations
were effected.

MIDAS INVESTORS

Name and Address Percent Number of Pro Forma Percent
Ownership Shares Ownership of Midas
Fund
- ------------------------- -------------- ----------------- ------------------
Charles Schwab & 5.59% 93,162.914 25.35%
Co. Inc.,
101 Montgomery
Street, San Francisco,
CA 94104-4122
- ------------------------- -------------- ----------------- ------------------

MIDAS FUND

Name and Address Percent Number of Pro Forma Percent
Ownership Shares Ownership of Midas
Fund
- ------------------------- -------------- ----------------- ------------------
Charles Schwab & 25.72% 10,107,179.04 25.35%
Co. Inc.,
101 Montgomery
Street, San Francisco,
CA 94104-4122
- ------------------------- -------------- ----------------- ------------------

SPECIAL EQUITIES

Name and Address Percent Number of Pro Forma Percent
Ownership Shares Ownership of Midas
Fund
- ------------------------- -------------- ----------------- ------------------
n/a
- ------------------------- -------------- ----------------- ------------------

A-1

U.S. AND OVERSEAS

Name and Address Percent Number of Pro Forma Percent
Ownership Shares Ownership of Midas
Fund
- ------------------------- -------------- ----------------- ------------------
n/a
- ------------------------- -------------- ----------------- ------------------

A-2

APPENDIX B

FORM OF AGREEMENT AND PLAN OF REORGANIZATION

THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is made as of
_____________ __, 2001, between [MIDAS INVESTORS LTD./MIDAS U.S. AND OVERSEAS
FUND LTD.], a Maryland corporation ("Target"), and [MIDAS FUND, INC./MIDAS
SPECIAL EQUITIES FUND, INC.], a Maryland corporation ("Acquiring Fund"). Target
and Acquiring Fund are sometimes referred to herein individually as a "Fund" and
collectively as the "Funds."

The Funds wish to effect a reorganization described in section 368(a)(1)(C)
of the Internal Revenue Code of 1986, as amended ("Code"), and intend this
Agreement to be, and adopt it as, a "plan of reorganization" within the meaning
of the regulations under the Code ("Regulations"). The reorganization will
involve the transfer to Acquiring Fund of Target's assets in exchange solely for
voting shares of common stock of Acquiring Fund, par value $0.001 per share
("Acquiring Fund Shares"), and the assumption by Acquiring Fund of Target's
liabilities, followed by the constructive distribution of the Acquiring Fund
Shares pro rata to the holders of shares of common stock of Target ("Target
Shares") in exchange therefor, all on the terms and conditions set forth herein.
The foregoing transactions are referred to herein collectively as the
"Reorganization."

In consideration of the mutual promises contained herein, the parties agree
as follows:

1. PLAN OF REORGANIZATION AND TERMINATION

1.1. Target agrees to assign, sell, convey, transfer, and deliver all of
its assets described in paragraph 1.2 ("Assets") to Acquiring Fund. Acquiring
Fund agrees in exchange therefor -

(a) to issue and deliver to Target the number of full and fractional
(rounded to the third decimal place) Acquiring Fund Shares determined by
dividing the net value of Target (computed as set forth in paragraph 2.1)
by the net asset value ("NAV") of an Acquiring Fund Share (computed as set
forth in paragraph 2.2), and

(b) to assume all of Target's liabilities described in paragraph 1.3
("Liabilities").

Such transactions shall take place at the Closing (as defined in paragraph 3.1).

1.2. The Assets shall include all cash, cash equivalents, securities,
receivables (including interest and dividends receivable), claims and rights of
action, rights to register shares under applicable securities laws, books and
records, deferred and prepaid expenses shown as assets on Target's books, and
other property owned by Target at the Effective Time (as defined in paragraph
3.1).

B-1

1.3. The Liabilities shall include all of Target's liabilities, debts,
obligations, and duties of whatever kind or nature, whether absolute, accrued,
contingent, or otherwise, whether or not arising in the ordinary course of
business, whether or not determinable at the Effective Time, and whether or not
specifically referred to in this Agreement. Notwithstanding the foregoing,
Target agrees to use its best efforts to discharge all its known Liabilities
before the Effective Time.

1.4. At or immediately before the Effective Time, Target shall declare and
pay to its shareholders a dividend and/or other distribution in an amount large
enough so that it will have distributed substantially all (and in any event not
less than 90%) of its investment company taxable income (computed without regard
to any deduction for dividends paid) and substantially all of its realized net
capital gain, if any, for the current taxable year through the Effective Time.

1.5. At the Effective Time (or as soon thereafter as is reasonably
practicable), Target shall distribute the Acquiring Fund Shares it receives
pursuant to paragraph 1.1 to Target's shareholders of record, determined as of
the Effective Time (each a "Shareholder" and collectively "Shareholders"), in
constructive exchange for their Target Shares. Such distribution shall be
accomplished by Target's transfer agent's opening accounts on Acquiring Fund's
share transfer books in the Shareholders' names and transferring such Acquiring
Fund Shares thereto. Each Shareholder's account shall be credited with the
respective pro rata number of full and fractional (rounded to the third decimal
place) Acquiring Fund Shares due that Shareholder. All outstanding Target
Shares, including any represented by certificates, shall simultaneously be
canceled on Target's share transfer books. Acquiring Fund shall not issue
certificates representing the Acquiring Fund Shares issued in connection with
the Reorganization.

1.6. As soon as reasonably practicable after distribution of the Acquiring
Fund Shares pursuant to paragraph 1.5, but in all events within six months after
the Effective Time, Target shall be terminated and any further actions shall be
taken in connection therewith as required by applicable law.

1.7. Any reporting responsibility of Target to a public authority is and
shall remain its responsibility up to and including the date on which it is
terminated.

1.8. Any transfer taxes payable upon issuance of Acquiring Fund Shares in a
name other than that of the registered holder on Target's books of the Target
Shares constructively exchanged therefor shall be paid by the person to whom
such Acquiring Fund Shares are to be issued, as a condition of such transfer.

2. VALUATION

2.1. For purposes of paragraph 1.1(a), Target's net value shall be (a) the
value of the Assets computed as of the close of regular trading on the New York
Stock Exchange ("NYSE") on the date of the Closing ("Valuation Time"), using the
valuation procedures set forth in Target's then-current prospectus and statement
of additional information ("SAI"), less (b) the amount of the Liabilities as of
the Valuation Time.

B-2

2.2. For purposes of paragraph 1.1(a), the NAV per Acquiring Fund Share
shall be computed as of the Valuation Time, using the valuation procedures set
forth in Acquiring Fund's then-current prospectus and SAI.

2.3. All computations pursuant to paragraphs 2.1 and 2.2 shall be made by
or under the direction of Midas Management Corporation.

3. CLOSING AND EFFECTIVE TIME

3.1. The Reorganization, together with related acts necessary to consummate
the same ("Closing"), shall occur at the Funds' principal office on or about
_________, or at such other place and/or on such other date as to which they may
agree. All acts taking place at the Closing shall be deemed to take place
simultaneously as of the close of business on the date thereof or at such other
time as to which the Funds may agree ("Effective Time"). If, immediately before
the Valuation Time, (a) the NYSE is closed to trading or trading thereon is
restricted or (b) trading or the reporting of trading on the NYSE or elsewhere
is disrupted, so that accurate appraisal of the net value of Target and the NAV
per Acquiring Fund Share is impracticable, the Effective Time shall be postponed
until the first business day after the day when such trading shall have been
fully resumed and such reporting shall have been restored.

3.2. Target's fund accounting and pricing agent shall deliver at the
Closing a certificate of an authorized officer verifying that the information
(including adjusted basis and holding period, by lot) concerning the Assets,
including all portfolio securities, transferred by Target to Acquiring Fund, as
reflected on Acquiring Fund's books immediately following the Closing, does or
will conform to such information on Target's books immediately before the
Closing. Target's custodian shall deliver at the Closing a certificate of an
authorized officer stating that (a) the Assets held by the custodian will be
transferred to Acquiring Fund at the Effective Time and (b) all necessary taxes
in conjunction with the delivery of the Assets, including all applicable federal
and state stock transfer stamps, if any, have been paid or provision for payment
has been made.

3.3. Target shall deliver to Acquiring Fund at the Closing a list of the
names and addresses of the Shareholders and the number of outstanding Target
Shares owned by each Shareholder, all as of the Effective Time, certified by
Target's Secretary or Assistant Secretary. Acquiring Fund's transfer agent shall
deliver at the Closing a certificate as to the opening on Acquiring Fund's share
transfer books of accounts in the Shareholders' names. Acquiring Fund shall
issue and deliver a confirmation to Target evidencing the Acquiring Fund Shares
to be credited to it at the Effective Time or provide evidence satisfactory to
Target that such Acquiring Fund Shares have been credited to Target's account on
Acquiring Fund's books. At the Closing, each party shall deliver to the other
bills of sale, checks, assignments, stock certificates, receipts, or other
documents the other party or its counsel reasonably requests.

3.4. Each Fund shall deliver to the other at the Closing a certificate
executed in its name by its President or a Vice President in form and substance
satisfactory to the recipient and dated the Effective Time, to the effect that
the representations and warranties it made in this

B-3

Agreement are true and correct at the Effective Time except as they may be
affected by the transactions contemplated by this Agreement.

4. REPRESENTATIONS AND WARRANTIES

4.1. Target represents and warrants as follows:

4.1.1. Target is a corporation duly organized, validly existing, and
in good standing under the laws of the State of Maryland; and its Articles
of Incorporation are on file with the Department of Assessments and
Taxation of Maryland;

4.1.2. Target is duly registered as an open-end management investment
company under the Investment Company Act of 1940, as amended ("1940 Act"),
and such registration is in full force and effect;

4.1.3. At the Closing, Target will have good and marketable title to
the Assets and full right, power, and authority to sell, assign, transfer,
and deliver the Assets free of any liens or other encumbrances (except
securities that are subject to "securities loans" as referred to in section
851(b)(2) of the Code); and on delivery and payment for the Assets,
Acquiring Fund will acquire good and marketable title thereto;

4.1.4. Target's current prospectus and SAI conform in all material
respects to the applicable requirements of the Securities Act of 1933, as
amended ("1933 Act"), and the 1940 Act and the rules and regulations
thereunder and do not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading;

4.1.5. Target is not in violation of, and the execution and delivery
of this Agreement and consummation of the transactions contemplated hereby
will not conflict with or violate, Maryland law or any provision of the
Target's Articles of Incorporation or By-Laws or of any agreement,
instrument, lease, or other undertaking to which Target is a party or by
which it is bound or result in the acceleration of any obligation, or the
imposition of any penalty, under any agreement, judgment, or decree to
which Target is a party or by which it is bound, except as otherwise
disclosed in writing to and accepted by Acquiring Fund;

4.1.6. Except as otherwise disclosed in writing to and accepted by
Acquiring Fund, all material contracts and other commitments of, or
applicable to, Target (other than this Agreement and investment contracts,
including options, futures, and forward contracts) will be terminated, or
provision for discharge of any liabilities of Target thereunder will be
made, at or prior to the Effective Time, without either Fund's incurring
any liability or penalty with respect thereto and without diminishing or
releasing any rights Target may have had with respect to actions taken or
omitted or to be taken by any other party thereto prior to the Closing;

B-4

4.1.7. Except as otherwise disclosed in writing to and accepted by
Acquiring Fund, no litigation, administrative proceeding, or investigation
of or before any court or governmental body is presently pending or (to
Target's knowledge) threatened against Target or any of its properties or
assets that, if adversely determined, would materially and adversely affect
Target's financial condition or the conduct of its business; Target knows
of no facts that might form the basis for the institution of any such
litigation, proceeding, or investigation and is not a party to or subject
to the provisions of any order, decree, or judgment of any court or
governmental body that materially or adversely affects its business or its
ability to consummate the transactions contemplated hereby;

4.1.8. The execution, delivery, and performance of this Agreement have
been duly authorized as of the date hereof by all necessary action on the
part of Target's board of directors, which has made the determinations
required by Rule 17a-8(a) under the 1940 Act; and, subject to approval by
Target's shareholders, this Agreement constitutes a valid and legally
binding obligation of Target, enforceable in accordance with its terms,
except as the same may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium, and similar laws relating to or
affecting creditors' rights and by general principles of equity;

4.1.9. At the Effective Time, the performance of this Agreement shall
have been duly authorized by all necessary action by Target's shareholders;

4.1.10. No governmental consents, approvals, authorizations, or
filings are required under the 1933 Act, the Securities Exchange Act of
1934, as amended ("1934 Act"), or the 1940 Act for the execution or
performance of this Agreement by Target, except for (a) the filing with the
Securities and Exchange Commission ("SEC") of a registration statement by
Target on Form N-14 relating to the Acquiring Fund Shares issuable
hereunder, and any supplement or amendment thereto ("Registration
Statement"), including therein a proxy statement/prospectus ("Proxy
Statement"), and (b) such consents, approvals, authorizations, and filings
as have been made or received or as may be required subsequent to the
Effective Time;

4.1.11. On the effective date of the Registration Statement, at the
time of the Shareholders' Meeting (as defined in paragraph 5.2), and at the
Effective Time, the Proxy Statement will (a) comply in all material
respects with the applicable provisions of the 1933 Act, the 1934 Act, and
the 1940 Act and the regulations thereunder and (b) not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which such statements were made, not misleading;
provided that the foregoing shall not apply to statements in or omissions
from the Proxy Statement made in reliance on and in conformity with
information furnished by Acquiring Fund for use therein;

4.1.12. The Liabilities were incurred by Target in the ordinary course
of its business; and there are no Liabilities other than Liabilities
disclosed or provided for in Target's financial statements referred to in
paragraph 4.1.18 and Liabilities incurred by Target in the ordinary course
of its business subsequent to December 31, 2000, or otherwise disclosed to

B-5

Acquiring Fund, none of which has been materially adverse to the business,
assets, or results of Target's operations;

4.1.13. Target qualified for treatment as a regulated investment
company under Subchapter M of the Code ("RIC") for each past taxable year
since it commenced operations and will continue to meet all the
requirements for such qualification for its current taxable year; the
Assets shall be invested at all times through the Effective Time in a
manner that ensures compliance with the foregoing; and Target has no
earnings and profits accumulated in any taxable year in which the
provisions of Subchapter M did not apply to it;

4.1.14. Target is not under the jurisdiction of a court in a "title 11
or similar case" (within the meaning of section 368(a)(3)(A) of the Code);

4.1.15. Not more than 25% of the value of Target's total assets
(excluding cash, cash items, and U.S. government securities) is invested in
the stock and securities of any one issuer, and not more than 50% of the
value of such assets is invested in the stock and securities of five or
fewer issuers;

4.1.16. During the five-year period ending at the Effective Time, (a)
neither Target nor any person "related" (as defined in section
1.368-1(e)(3) of the Regulations) to Target will have acquired Target
Shares with consideration other than Acquiring Fund Shares or Target
Shares, except for shares redeemed in the ordinary course of Target's
business as an open-end investment company as required by section 22(e) of
the 1940 Act, and (b) no distributions will have been made with respect to
Target Shares (other than normal, regular dividend distributions made
pursuant to Target's historic dividend-paying practice), either directly or
through any transaction, agreement, or arrangement with any other person,
except for dividends qualifying for the deduction for dividends paid (as
defined in section 561 of the Code) referred to in sections 852(a)(1) and
4982(c)(1)(A) of the Code;

4.1.17. Target's federal income tax returns, and all applicable state
and local tax returns, for all taxable years to and including the taxable
year ended December 31, 2000, have been timely filed or the filing time
therefor duly extended and all taxes payable pursuant to such returns have
been timely paid; and

4.1.18. Target's audited financial statements for the year ended
December 31, 2000, and unaudited financial statements for the six months
ended June 30, 2001, to be delivered to Acquiring Fund, fairly represent
Target's financial position as of each such date and the results of its
operations and changes in its net assets for the periods then ended.

4.2 Acquiring Fund represents and warrants as follows:

4.2.1. Acquiring Fund is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Maryland; and
its Articles of Incorporation are on file with the Department of
Assessments and Taxation of Maryland;

B-6

4.2.2. Acquiring Fund is duly registered as an open-end management
investment company under the 1940 Act, and such registration is in full
force and effect;

4.2.3. No consideration other than Acquiring Fund Shares (and
Acquiring Fund's assumption of the Liabilities) will be issued in exchange
for the Assets in the Reorganization;

4.2.4. The Acquiring Fund Shares to be issued and delivered to Target
hereunder will, at the Effective Time, have been duly authorized and, when
issued and delivered as provided herein (including the receipt of
consideration in exchange therefor exceeding their par value), will be duly
and validly issued and outstanding shares of Acquiring Fund, fully paid and
non-assessable;

4.2.5. Acquiring Fund's current prospectus and SAI conform in all
material respects to the applicable requirements of the 1933 Act and the
1940 Act and the rules and regulations thereunder and do not include any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading;

4.2.6. Acquiring Fund is not in violation of, and the execution and
delivery of this Agreement and consummation of the transactions
contemplated hereby will not conflict with or violate, Maryland law or any
provision of Acquiring Fund's Articles of Incorporation or By- Laws or of
any provision of any agreement, instrument, lease, or other undertaking to
which Acquiring Fund is a party or by which it is bound or result in the
acceleration of any obligation, or the imposition of any penalty, under any
agreement, judgment, or decree to which Acquiring Fund is a party or by
which it is bound, except as otherwise disclosed in writing to and accepted
by Target;

4.2.7. Except as otherwise disclosed in writing to and accepted by
Target, no litigation, administrative proceeding, or investigation of or
before any court or governmental body is presently pending or (to Acquiring
Fund's knowledge) threatened against Acquiring Fund or any of its
properties or assets that, if adversely determined, would materially and
adversely affect Acquiring Fund's financial condition or the conduct of its
business; Acquiring Fund knows of no facts that might form the basis for
the institution of any such litigation, proceeding, or investigation and is
not a party to or subject to the provisions of any order, decree, or
judgment of any court or governmental body that materially or adversely
affects its business or its ability to consummate the transactions
contemplated hereby;

4.2.8. The execution, delivery, and performance of this Agreement have
been duly authorized as of the date hereof by all necessary action on the
part of Acquiring Fund's board of directors (together with Target's board
of directors, the "Boards"), which has made the determinations required by
Rule 17a-8(a) under the 1940 Act; and this Agreement constitutes a valid
and legally binding obligation of Acquiring Fund, enforceable in accordance
with its terms, except as the same may be limited by bankruptcy,
insolvency, fraudulent transfer,

B-7

reorganization, moratorium, and similar laws relating to or affecting
creditors' rights and by general principles of equity;

4.2.9. No governmental consents, approvals, authorizations, or filings
are required under the 1933 Act, the 1934 Act, or the 1940 Act for the
execution or performance of this Agreement by Acquiring Fund, except for
(a) the filing with the SEC of the Registration Statement and a
post-effective amendment to Acquiring Fund's registration statement on Form
N1-A and (b) such consents, approvals, authorizations, and filings as have
been made or received or as may be required subsequent to the Effective
Time;

4.2.10. On the effective date of the Registration Statement, at the
time of the Shareholders' Meeting, and at the Effective Time, the Proxy
Statement will (a) comply in all material respects with the applicable
provisions of the 1933 Act, the 1934 Act, and the 1940 Act and the
regulations thereunder and (b) not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which such statements were made, not misleading;
provided that the foregoing shall not apply to statements in or omissions
from the Proxy Statement made in reliance on and in conformity with
information furnished by Target for use therein;

4.2.11. Acquiring Fund qualified for treatment as a RIC for each past
taxable year since it commenced operations and will continue to meet all
the requirements for such qualification for its current taxable year;
Acquiring Fund intends to continue to meet all such requirements for the
next taxable year; and it has no earnings and profits accumulated in any
taxable year in which the provisions of Subchapter M of the Code did not
apply to it;

4.2.12. Acquiring Fund has no plan or intention to issue additional
Acquiring Fund Shares following the Reorganization except for shares issued
in the ordinary course of its business as an open-end investment company;
nor is there any plan or intention for Acquiring Fund, or any person
"related" (within the meaning of section 1.368-1(e)(3) of the Regulations)
to Acquiring Fund, to acquire -- during the five-year period beginning at
the Effective Time, either directly or through any transaction, agreement,
or arrangement with any other person -- with consideration other than
Acquiring Fund Shares, any Acquiring Fund Shares issued to the Shareholders
pursuant to the Reorganization, except for redemptions in the ordinary
course of Acquiring Fund's business as an open-end investment company as
required by section 22(e) of the 1940 Act;

4.2.13. Following the Reorganization, Acquiring Fund (a) will continue
Target's "historic business" (within the meaning of section 1.368-1(d)(2)
of the Regulations) and (b) will use a significant portion of Target's
"historic business assets" (within the meaning of section 1.368-1(d)(3) of
the Regulations) in a business; moreover, Acquiring Fund (c) has no plan or
intention to sell or otherwise dispose of any of the Assets, except for
dispositions made in the ordinary course of that business and dispositions
necessary to maintain its status as a RIC, and (d) expects to retain
substantially all the Assets in the same form as it receives them in the
Reorganization, unless and until subsequent investment circumstances
suggest the desirability of change or it becomes necessary to make
dispositions thereof to maintain such status;

B-8

4.2.14. There is no plan or intention for Acquiring Fund to be
dissolved or merged into another corporation or a business trust or any
"fund" thereof (within the meaning of section 851(g)(2) of the Code)
following the Reorganization;

4.2.15. Immediately after the Reorganization, (a) not more than 25% of
the value of Acquiring Fund's total assets (excluding cash, cash items, and
U.S. government securities) will be invested in the stock and securities of
any one issuer and (b) not more than 50% of the value of such assets will
be invested in the stock and securities of five or fewer issuers;

4.2.16. Acquiring Fund does not directly or indirectly own, nor at the
Effective Time will it directly or indirectly own, nor has it directly or
indirectly owned at any time during the past five years, any shares of
Target;

4.2.17. During the five-year period ending at the Effective Time,
neither Acquiring Fund nor any person "related" (as defined in section
1.368-1(e)(3) of the Regulations) to Acquiring Fund will have acquired
Target Shares with consideration other than Acquiring Shares;

4.2.18. Acquiring Fund's federal income tax returns, and all
applicable state and local tax returns, for all taxable years to and
including the taxable year ended December 31, 2000, have been timely filed
or the filing time therefor duly extended and all taxes payable pursuant to
such returns have been timely paid;

4.2.19. Acquiring Fund's audited financial statements for the year
ended December 31, 2000, and unaudited financial statements for the six
months ended June 30, 2001, to be delivered to Target, fairly represent
Acquiring Fund's financial position as of each such date and the results of
its operations and changes in its net assets for the periods then ended;
and

4.2.20. If the Reorganization is consummated, Acquiring Fund will
treat each Shareholder that receives Acquiring Fund Shares in connection
with the Reorganization as having made a minimum initial purchase of such
shares for the purpose of making additional investments therein, regardless
of the value of the shares so received.

4.3. Each Fund represents and warrants as follows:

4.3.1. The fair market value of the Acquiring Fund Shares received by
each Shareholder will be approximately equal to the fair market value of
its Target Shares constructively surrendered in exchange therefor;

4.3.2. Its management (a) is unaware of any plan or intention of
Shareholders to redeem, sell, or otherwise dispose of (i) any portion of
their Target Shares before the Reorganization to any person "related"
(within the meaning of section 1.368-1(e)(3) of the Regulations) to either
Fund or (ii) any portion of the Acquiring Fund Shares to be received by
them in the Reorganization to any person related (as so defined) to
Acquiring Fund, (b) does not

B-9

anticipate dispositions of those Acquiring Fund Shares at the time of or
soon after the Reorganization to exceed the usual rate and frequency of
dispositions of shares of Target as an open-end investment company, (c)
expects that the percentage of Shareholder interests, if any, that will be
disposed of as a result of or at the time of the Reorganization will be de
minimis, and (d) does not anticipate that there will be extraordinary
redemptions of Acquiring Fund Shares immediately following the
Reorganization;

4.3.3. The Shareholders will pay their own expenses, if any, incurred
in connection with the Reorganization;

4.3.4. The fair market value of the Assets on a going concern basis
will equal or exceed the Liabilities to be assumed by Acquiring Fund and
those to which the Assets are subject;

4.3.5. There is no intercompany indebtedness between the Funds that
was issued or acquired, or will be settled, at a discount;

4.3.6. Pursuant to the Reorganization, Target will transfer to
Acquiring Fund, and Acquiring Fund will acquire, at least 90% of the fair
market value of the net assets, and at least 70% of the fair market value
of the gross assets, held by Target immediately before the Reorganization.
For the purposes of this representation, any amounts used by Target to pay
its Reorganization expenses and to make redemptions and distributions
immediately before the Reorganization (except (a) redemptions in the
ordinary course of its business required by section 22(e) of the 1940 Act
and (b) regular, normal dividend distributions made to conform to its
policy of distributing all or substantially all of its income and gains to
avoid the obligation to pay federal income tax and/or the excise tax under
section 4982 of the Code) will be included as assets held thereby
immediately before the Reorganization;

4.3.7. None of the compensation received by any Shareholder who is an
employee of or service provider to Target will be separate consideration
for, or allocable to, any of the Target Shares held by such Shareholder;
none of the Acquiring Fund Shares received by any such Shareholder will be
separate consideration for, or allocable to, any employment agreement,
investment advisory agreement, or other service agreement; and the
consideration paid to any such Shareholder will be for services actually
rendered and will be commensurate with amounts paid to third parties
bargaining at arm's-length for similar services;

4.3.8. Immediately after the Reorganization, the Shareholders will not
own shares constituting "control" (within the meaning of section 304(c) of
the Code) of Acquiring Fund;

4.3.9. Neither Fund will be reimbursed for any expenses incurred by it
or on its behalf in connection with the Reorganization unless those
expenses are solely and directly related to the Reorganization (determined
in accordance with the guidelines set forth in Rev. Rul. 73-54, 1973-1 C.B.
187) ("Reorganization Expenses"); and

B-10

4.3.10. The aggregate value of the acquisitions, redemptions, and
distributions limited by paragraphs 4.1.16, 4.2.12, and 4.2.17 will not
exceed 50% of the value (without giving effect to such acquisitions,
redemptions, and distributions) of the proprietary interest in Target at
the Effective Time.

5. COVENANTS

5.1. Each Fund covenants to operate its respective business in the ordinary
course between the date hereof and the Closing, it being understood that:

(a) such ordinary course will include declaring and paying customary
dividends and other distributions and such changes in operations as are
contemplated by each Fund's normal business activities and

(b) each Fund will retain exclusive control of the composition of its
portfolio until the Closing; provided that (1) Target shall not dispose of
more than an insignificant portion of its historic business assets (as
defined above) during such period without Acquiring Fund's prior consent
and (2) if Target's shareholders' approve this Agreement (and the
transactions contemplated hereby), then between the date of such approval
and the Closing, the Funds shall coordinate the Funds' respective
portfolios so that the transfer of the Assets to Acquiring Fund will not
cause it to fail to be in compliance with all of its investment policies
and restrictions immediately after the Closing.

5.2. Target covenants to call a shareholders' meeting to consider and act
on this Agreement and to take all other action necessary to obtain approval of
the transactions contemplated hereby ("Shareholders' Meeting").

5.3. Target covenants that the Acquiring Fund Shares to be delivered
hereunder are not being acquired for the purpose of making any distribution
thereof, other than in accordance with the terms hereof.

5.4. Target covenants that it will assist Acquiring Fund in obtaining
information Acquiring Fund reasonably requests concerning the beneficial
ownership of Target Shares.

5.5. Target covenants that its books and records (including all books and
records required to be maintained under the 1940 Act and the rules and
regulations thereunder) will be turned over to Acquiring Fund at the Closing.

5.6. Each Fund covenants to cooperate in preparing the Proxy Statement in
compliance with applicable federal securities laws.

5.7. Each Fund covenants that it will, from time to time, as and when
requested by the other Fund, execute and deliver or cause to be executed and
delivered all such assignments and other instruments, and will take or cause to
be taken such further action, as the other Fund may deem necessary or desirable
in order to vest in, and confirm to, (a) Acquiring Fund, title to and

B-11

possession of all the Assets, and (b) Target, title to and possession of the
Acquiring Fund Shares to be delivered hereunder, and otherwise to carry out the
intent and purpose hereof.

5.8. Acquiring Fund covenants to use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940 Act, and such
state securities laws it may deem appropriate in order to continue its
operations after the Effective Time.

5.9. Subject to this Agreement, each Fund covenants to take or cause to be
taken all actions, and to do or cause to be done all things, reasonably
necessary, proper, or advisable to consummate and effectuate the transactions
contemplated hereby.

6. CONDITIONS PRECEDENT

Each Fund's obligations hereunder shall be subject to (a) performance by
the other Fund of all its obligations to be performed hereunder at or before the
Effective Time, (b) all representations and warranties of the other Fund
contained herein being true and correct in all material respects as of the date
hereof and, except as they may be affected by the transactions contemplated
hereby, as of the Effective Time, with the same force and effect as if made at
and as of the Effective Time, and (c) the following further conditions that, at
or before the Effective Time:

6.1. This Agreement and the transactions contemplated hereby shall have
been duly adopted and approved by both Boards and shall have been approved by
Target's shareholders in accordance with applicable law.

6.2. All necessary filings shall have been made with the SEC and state
securities authorities, and no order or directive shall have been received that
any other or further action is required to permit the parties to carry out the
transactions contemplated hereby. The Registration Statement shall have become
effective under the 1933 Act, no stop orders suspending the effectiveness
thereof shall have been issued, and the SEC shall not have issued an unfavorable
report with respect to the Reorganization under section 25(b) of the 1940 Act
nor instituted any proceedings seeking to enjoin consummation of the
transactions contemplated hereby under section 25(c) of the 1940 Act. All
consents, orders, and permits of federal, state, and local regulatory
authorities (including the SEC and state securities authorities) deemed
necessary by either Fund to permit consummation, in all material respects, of
the transactions contemplated hereby shall have been obtained, except where
failure to obtain same would not involve a risk of a material adverse effect on
the assets or properties of either Fund, provided that either Fund may for
itself waive any of such conditions.

6.3. At the Effective Time, no action, suit, or other proceeding shall be
pending before any court or governmental agency in which it is sought to
restrain or prohibit, or to obtain damages or other relief in connection with,
the transactions contemplated hereby.

6.4. Target shall have received an opinion of The Law Offices of Stephanie
A. Djinis ("Counsel") substantially to the effect that:

B-12

6.4.1. Acquiring Fund is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Maryland with
power under its Articles of Incorporation to own all its properties and
assets and, to Counsel's knowledge, to carry on its business as presently
conducted;

6.4.2. This Agreement (a) has been duly authorized, executed, and
delivered by Acquiring Fund and (b) assuming due authorization, execution,
and delivery of this Agreement by Target, is a valid and legally binding
obligation of Acquiring Fund, enforceable in accordance with its terms,
except as the same may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium, and similar laws relating to or
affecting creditors' rights and by general principles of equity;

6.4.3. The Acquiring Fund Shares to be issued and distributed to the
Shareholders under this Agreement, assuming their due delivery as
contemplated by this Agreement and the receipt of consideration in exchange
therefor exceeding their par value, will be duly authorized and validly
issued and outstanding and fully paid and non-assessable;

6.4.4. The execution and delivery of this Agreement did not, and the
consummation of the transactions contemplated hereby will not, materially
violate Acquiring Fund's Articles of Incorporation or By-Laws or any
provision of any agreement (known to Counsel, without any independent
inquiry or investigation) to which Acquiring Fund is a party or by which it
is bound or (to Counsel's knowledge, without any independent inquiry or
investigation) result in the acceleration of any obligation, or the
imposition of any penalty, under any agreement, judgment, or decree to
which Acquiring Fund is a party or by which it is bound, except as set
forth in such opinion or as otherwise disclosed in writing to and accepted
by Target;

6.4.5. To Counsel's knowledge (without any independent inquiry or
investigation), no consent, approval, authorization, or order of any court
or governmental authority is required for the consummation by Acquiring
Fund of the transactions contemplated herein, except such as have been
obtained under the 1933 Act, the 1934 Act, and the 1940 Act and such as may
be required under state securities laws;

6.4.6. Acquiring Fund is registered with the SEC as an investment
company, and to Counsel's knowledge no order has been issued or proceeding
instituted to suspend such registration; and

6.4.7. To Counsel's knowledge (without any independent inquiry or
investigation), (a) no litigation, administrative proceeding, or
investigation of or before any court or governmental body is pending or
threatened as to Acquiring Fund or any of its properties or assets and (b)
Acquiring Fund is not a party to or subject to the provisions of any order,
decree, or judgment of any court or governmental body that materially and
adversely affects Acquiring Fund's business, except as set forth in such
opinion or as otherwise disclosed in writing to and accepted by Target.

B-13

In rendering such opinion, Counsel may (1) rely, as to matters governed by
the laws of the State of Maryland, on an opinion of competent Maryland
counsel, (2) make assumptions regarding the authenticity, genuineness,
and/or conformity of documents and copies thereof without independent
verification thereof, and (3) limit such opinion to applicable federal and
state law.

6.5. Acquiring Fund shall have received an opinion of Counsel substantially
to the effect that:

6.5.1. Target is a corporation duly organized, validly existing, and
in good standing under the laws of the State of Maryland with power under
its Articles of Incorporation to own all its properties and assets and, to
Counsel's knowledge, to carry on its business as presently conducted;

6.5.2. This Agreement (a) has been duly authorized, executed, and
delivered by Target and (b) assuming due authorization, execution, and
delivery of this Agreement by Acquiring Fund, is a valid and legally
binding obligation of Target, enforceable in accordance with its terms,
except as the same may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium, and similar laws relating to or
affecting creditors' rights and by general principles of equity;

6.5.3. The execution and delivery of this Agreement did not, and the
consummation of the transactions contemplated hereby will not, materially
violate Target's Articles of Incorporation or By-Laws or any provision of
any agreement (known to Counsel, without any independent inquiry or
investigation) to which Target is a party or by which it is bound or (to
Counsel's knowledge, without any independent inquiry or investigation)
result in the acceleration of any obligation, or the imposition of any
penalty, under any agreement, judgment, or decree to which Target is a
party or by which it is bound, except as set forth in such opinion or as
otherwise disclosed in writing to and accepted by Acquiring Fund;

6.5.4. To Counsel's knowledge (without any independent inquiry or
investigation), no consent, approval, authorization, or order of any court
or governmental authority is required for the consummation by Target of the
transactions contemplated herein, except such as have been obtained under
the 1933 Act, the 1934 Act, and the 1940 Act and such as may be required
under state securities laws;

6.5.5. Target is registered with the SEC as an investment company, and
to Counsel's knowledge no order has been issued or proceeding instituted to
suspend such registration; and

6.5.6. To Counsel's knowledge (without any independent inquiry or
investigation), (a) no litigation, administrative proceeding, or
investigation of or before any court or governmental body is pending or
threatened as to Target or any of its properties or assets and (b) Target
is not a party to or subject to the provisions of any order, decree, or
judgment of any court or governmental body that materially and adversely
affects Target's business, except as set forth in such opinion or as
otherwise disclosed in writing to and accepted by Acquiring Fund.

B-14

In rendering such opinion, Counsel may (1) rely, as to matters governed by the
laws of the State of Maryland, on an opinion of competent Maryland counsel, (2)
make assumptions regarding the authenticity, genuineness, and/or conformity of
documents and copies thereof without independent verification thereof, and (3)
limit such opinion to applicable federal and state law.

6.6. Each Fund shall have received an opinion of Kirkpatrick & Lockhart LLP
("Tax Counsel"), addressed to and in form and substance reasonably satisfactory
to it, as to the federal income tax consequences mentioned below ("Tax
Opinion"). In rendering the Tax Opinion, Tax Counsel may rely as to factual
matters, exclusively and without independent verification, on the
representations made in this Agreement, which Tax Counsel may treat as
representations and warranties made to it, and in separate letters addressed to
Tax Counsel and the certificates delivered pursuant to paragraph 3.4. The Tax
Opinion shall be substantially to the effect that, based on the facts and
assumptions stated therein and conditioned on consummation of the Reorganization
in accordance with this Agreement, for federal income tax purposes:

6.6.1. Acquiring Fund's acquisition of the Assets in exchange solely
for Acquiring Fund Shares and Acquiring Fund's assumption of the
Liabilities, followed by Target's distribution of those shares pro rata to
the Shareholders constructively in exchange for their Target Shares, will
qualify as a reorganization within the meaning of section 368(a)(1)(C) of
the Code, and each Fund will be "a party to a reorganization" within the
meaning of section 368(b) of the Code;

6.6.2. Target will recognize no gain or loss on the transfer of the
Assets to Acquiring Fund in exchange solely for Acquiring Fund Shares and
Acquiring Fund's assumption of the Liabilities or on the subsequent
distribution of those shares to the Shareholders in constructive exchange
for their Target Shares;

6.6.3. Acquiring Fund will recognize no gain or loss on its receipt of
the Assets in exchange solely for Acquiring Fund Shares and its assumption
of the Liabilities;

6.6.4. Acquiring Fund's basis in the Assets will be the same as
Target's basis therein immediately before the Reorganization, and Acquiring
Fund's holding period for the Assets will include Target's holding period
therefor;

6.6.5. A Shareholder will recognize no gain or loss on the
constructive exchange of all its Target Shares solely for Acquiring Fund
Shares pursuant to the Reorganization; and

6.6.6. A Shareholder's aggregate basis in the Acquiring Fund Shares it
receives in the Reorganization will be the same as the aggregate basis in
its Target Shares it constructively surrenders in exchange for those
Acquiring Fund Shares, and its holding period for those Acquiring Fund
Shares will include its holding period for those Target Shares, provided
the Shareholder held them as capital assets at the Effective Time.

B-15

Notwithstanding subparagraphs 6.6.2 and 6.6.4, the Tax Opinion may state that no
opinion is expressed as to the effect of the Reorganization on the Funds or any
Shareholder with respect to any Asset as to which any unrealized gain or loss is
required to be recognized for federal income tax purposes at the end of a
taxable year (or on the termination or transfer thereof) under a mark- to-market
system of accounting.

At any time before the Closing, either Fund may waive any of the foregoing
conditions (except that set forth in paragraph 6.1) if, in the judgment of its
Board, such waiver will not have a material adverse effect on its shareholders'
interests.

7. BROKERAGE FEES AND EXPENSES

7.1. Each Fund represents and warrants to the other that there are no
brokers or finders entitled to receive any payments in connection with the
transactions provided for herein.

7.2. Except as otherwise provided herein, all the Reorganization Expenses
will be borne by the Funds.

8. ENTIRE AGREEMENT; NO SURVIVAL

Neither party has made any representation, warranty, or covenant not set
forth herein, and this Agreement constitutes the entire agreement between the
parties. The representations, warranties, and covenants contained herein or in
any document delivered pursuant hereto or in connection herewith shall not
survive the Closing.

9. TERMINATION OF AGREEMENT

This Agreement may be terminated at any time at or prior to the Effective
Time, whether before or after approval by Target's shareholders:

9.1. By either Fund (a) in the event of the other Fund's material breach of
any representation, warranty, or covenant contained herein to be performed at or
prior to the Effective Time, (b) if a condition to its obligations has not been
met and it reasonably appears that such condition will not or cannot be met, or
(c) if the Closing has not occurred on or before March 31, 2002; or

9.2. By the parties' mutual agreement.

In the event of termination under paragraphs 9.1(c) or 9.2, there shall be no
liability for damages on the part of either Fund, or its directors or officers,
to the other Fund.

10. AMENDMENT

This Agreement may be amended, modified, or supplemented at any time,
notwithstanding approval thereof by Target's shareholders, in any manner
mutually agreed on in writing by the parties; provided that following such
approval no such amendment shall have a material adverse effect on the
Shareholders' interests.

B-16

11. MISCELLANEOUS

11.1. This Agreement shall be governed by and construed in accordance with
the internal laws of the State of Maryland; provided that, in the case of any
conflict between such laws and the federal securities laws, the latter shall
govern.

11.2. Nothing expressed or implied herein is intended or shall be construed
to confer upon or give any person, firm, trust, or corporation other than the
parties and their respective successors and assigns any rights or remedies under
or by reason of this Agreement.

11.3. This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement, and shall become effective
when one or more counterparts have been executed by each Fund and delivered to
the other party hereto. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

IN WITNESS WHEREOF, each party has caused this Agreement to be executed and
delivered by its duly authorized officers as of the day and year first written
above.

[MIDAS FUND, INC./MIDAS SPECIAL EQUITIES FUND, INC.]

By: _________________________

MIDAS INVESTORS LTD./MIDAS U.S. AND OVERSEAS FUND
LTD.]

By: _________________________

B-17

APPENDIX C

Management's discussion of the performance of Midas Fund, which is included
in its Annual Report to Shareholders for the fiscal year ended December 31,
2000, is set forth below:

COMMENTARY

It is a pleasure to submit our combined annual report for Midas Fund and
Midas Investors. Both Midas Fund and Midas Investors seek capital appreciation
and protection against inflation and invest primarily in companies involved in
mining, processing or dealing in gold or other precious metals. Importantly,
Midas Fund's primary focus can also include other natural resource companies as
well.

Based on the London p.m. gold price, the average price of gold during 2000
was $279.10 per ounce, barely changed from the $278.57 average in 1999. The
year's highest price was $312.70, seen on February 4; the lowest price was
$263.80 on October 27. Unfortunately, however, the trend was downward. Gold
began the year at $290.25 per ounce and dropped by the end of 2000 to $274.45.
Precious metal stocks fared poorly as well, with the Philadelphia Gold and
Silver Index down 25%, the Australian ASX Gold Index down 30%, and the
Johannesburg All Gold Index down 38%. In this same period Midas Investors and
Midas Fund declined 26.42% and 38.24%, respectively.

In 2000, influences depressing prices of precious metals and mining shares
included both fundamental and psychological factors. Affecting market
psychology, the Bank of England's repeated auctions of gold appeared to shake
investor confidence in the market's ability to absorb the gold sales of central
banks globally. Likewise, low lease rates for gold offered by these central
banks, combined with a strong U.S. dollar, emboldened speculative short sellers
to make further sales of gold whenever a price rally appeared in the offing,
dampening further spikes to higher gold price levels. Another psychological
shift dramatically affecting security prices is the new alignment of gold mining
company valuation techniques with more standard valuation techniques,
historically applied to base metal and other resources companies. Investors seem
less satisfied with appraisals of a company's mining prospects and ounces of
gold reserves, and more concerned with measurements focusing on returns on
equity and assets.

Fundamentally, higher interest rates and declining gold prices severely
impacted the ability of many precious metals companies to meet their financial
targets in 2000. Debt obligations assumed in prior high gold price environments
became increasingly difficult to service. In several instances, loans became due
and payable, while more stringent, expensive, and illiquid capital markets were
increasingly inaccessible to medium and junior producing mining companies.
Discouraging to some investors as well were the announcements by some prominent
companies of cutbacks in mining exploration and development budgets, dimming
their prospects of future growth. More surprising was the lack of merger
activity in the industry, which would appear to give smaller companies the
economies of scale necessary to achieve financial and operational leverage
essential in the more competitive environment.

C-1

The brightest spot in the precious metals markets during 2000 was
unquestionably in the platinum and palladium arena, whose steadily rising
industrial use, primarily for catalytic converters, and increasing appeal for
jewelry - up 80% in the last decade according to Johnson Matthey Plc - together
with limited supplies, led prices to new highs. Platinum surged approximately
40% over the year to $619 per ounce, reaching a 10 year high. The price of
palladium doubled to a record $980 per ounce - up from $120 per ounce just four
years ago. Our investments in companies involved with these two exciting metals
participated dramatically in these price trends in 2000 and show signs of
further appreciation potential in 2001.

As these events transpired over 2000, the Investment Policy Committee,
which assumed sole portfolio management of Midas Fund in December 1999, sought
to implement a strategy over the year to restructure the Fund's portfolio to own
the securities of the largest mining companies in the world and to continue the
reduction of its exposure to junior development and junior mining companies.
Through pursuit of this strategy, by the end of 2000 the primary emphasis of the
Fund's mining portfolio has focused on quality major and medium size producing
companies with disciplined operations, financial strength, and positive cash
flow even at current gold prices. As the recessionary threat to the economy
loomed, Midas Fund's strategy also included lessening its exposure to declining
base metal prices and reallocating its assets in companies involved in diamonds,
energy, power generation, and other natural resources. The Fund occasionally
employed leverage and futures strategies in an effort to enhance returns. To a
limited extent, the Fund invested in securities of selected growth companies and
money market securities.

Midas Investors' strategy in 2000 was to build a globally diverse portfolio
of equity securities of primarily the largest capitalization companies involved
directly or indirectly in mining, processing or dealing in gold and other
precious metals. The Fund's investments in platinum and palladium producing
companies were among the most fruitful over the year. To a limited extent, the
Fund also held securities of selected growth companies, and money market
securities and, in addition, selectively employed leverage and futures
strategies in attempting to enhance returns.

Looking ahead, we are optimistic about improving prospects for gold prices.
The September 26, 1999 statement of the 15 European central banks restricting
gold sales and lending for 5 years will be supplemented by the expectation of
the end of Bank of England gold auctions after 2001. Although forecasts of
global gross domestic product, the total value of goods and services produced
world-wide, being revised downward may lead to generally lower industrial and
jewelry demand, recent declines in U.S. dollar strength may give rise to widely
anticipated increases in gold prices in U.S. dollar terms and stimulate offshore
demand in high gold consuming regions, such as Asia and Europe. At the same
time, mining companies are being compelled to either lower their costs of
production or seek to combine with other companies, which can offer the
potential for appreciation in their share prices.

C-2

APPENDIX D

Management's discussion of the performance of Special Equities, which is
included in its Annual Report to Shareholders for the fiscal year ended December
31, 2000, is set forth below:

COMMENTARY

It is a pleasure to submit this annual Report for Midas Special Equities
Fund and to welcome our new shareholders who find appealing the Fund's
aggressive investment strategies for capital appreciation. We thank you for your
support and confidence in 2000 and look forward to discovering opportunities for
above average capital appreciation on your behalf in the months and years ahead.

Consistent with the Fund's investment objective and policies, the Fund's
strategy in 2000 was to invest in equity securities, often involving special
situations and emerging growth companies, and employ certain aggressive
investment strategies in seeking to enhance returns, including short term
trading, leverage and transactions in futures on the S&P 500 index. By late
spring, the Fund began to reposition its portfolio to emphasize larger, "old
economy" companies and de-emphasize "new economy" technology companies. In 2000,
the Russell 2000 and the Standard & Poor's 500 indices declined 3.03% and 9.10%,
respectively. The Nasdaq, reflecting mostly technology stocks, fell 39.3%, the
worst annual performance in its history. Although the Fund's aggressive
investment strategies of seeking its capital appreciation objective was
successful in 1999, achieving a +30.58% total return, the year 2000 was a
disappointment with a negative 21.18% total return. The Fund's performance in
2000 reflects its higher investment commitment to the technology area while the
more positive performance within its portfolio came from investments in "old
economy" companies in the consumer cyclical and financial sectors.

Looking ahead, we anticipate a slowing economy with moderate inflation and
lower interest rates over the course of the year. In this type of environment,
we think that higher returns will be enjoyed by those companies with improving
revenue growth and returns on capital, solid financial strength, and a dominant
business franchise that will grow notwithstanding weakness in the overall
economy. In view of the potential for lower interest rates, we believe the
financial sector, including the insurance and money center banking industries,
have particular promise. In certain situations, technology companies that serve
markets anticipated to grow, even in a recessionary environment, or whose
productivity enhancing products or services are seen as essential in an
increasing competitive global marketplace, may benefit by higher valuations.

Investing in the financial markets in the year 2001 probably holds more
volatility ahead. For investors who can accept these short term swings for long
term appreciation potential, Midas Special Equities Fund has the flexibility to
adapt and attempt to obtain capital appreciation for its shareholders from
shifting market trends.

D-1

MIDAS INVESTORS LTD. Proxy/Voting Instruction Card
MIDAS U.S. AND OVERSEAS FUND LTD.

THIS PROXY IS BEING SOLICITED BY AND ON BEHALF OF THE BOARD OF DIRECTORS OF
MIDAS INVESTORS LTD. ("MIDAS INVESTORS") AND THE BOARD OF DIRECTORS OF MIDAS
U.S. AND OVERSEAS FUND LTD. ("U.S. AND OVERSEAS") (COLLECTIVELY, THE "FUNDS")
for the special Meeting of Shareholders on [meeting date], and at any
postponement or adjournment thereof.

The undersigned shareholder of Midas Investors and/or U.S. and Overseas hereby
appoints Thomas B. Winmill and Monica Pelaez and each of them, the attorneys and
proxies of the undersigned, with full power of substitution in each of them, to
attend the Special Meeting of Shareholders to be held at the offices of the
Funds at 11 Hanover Square, New York, New York on [meeting date] at 10:00 a.m.,
and at any postponement or adjournment thereof ("Meeting") to cast on behalf of
the undersigned all votes that the undersigned is entitled to cast at the
Meeting and otherwise to represent the undersigned at the Meeting with all of
the powers the undersigned possesses and especially (but without limiting the
general authorization and power hereby given) to vote as indicated on the
proposals, as more fully described in the proxy statement for the Meeting. The
undersigned hereby acknowledges receipt of the Notice of Special Meeting and the
accompanying Proxy Statement and revokes any proxy heretofore given for the
Meeting. If no directions are given, the proxies will vote FOR all proposals and
in their discretion on any other matter that may properly come before the
Meeting.

YOUR VOTE IS IMPORTANT. IF YOU ARE NOT VOTING BY TELEPHONE, PLEASE SIGN AND DATE
THIS PROXY BELOW AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.

Sign here as name(s) appear to the left.

-------------------------

Signature(s) should be exactly the same as the name or names
appearing on this form. Please sign this proxy and return it
promptly whether or not you plan to attend the Meeting. If
signing for a corporation or partnership or as agent,
attorney or fiduciary, indicate the capacity in which you
are signing. If you do attend the Meeting and decide to vote
by ballot, such vote will supersede this proxy.

Dated: , 2001
-----------------------------

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: [XXX]

Please sign, date and return this proxy/voting instructions card promptly in the
enclosed postage- paid envelope. If no direction is given on a proposal, the
proxies will vote FOR the proposal, in accordance with the recommendations of
each Board of Directors of the Funds.

Shareholders of Midas Investors Ltd. only:

1. Approval of a Plan of Reorganization under which Midas Fund, Inc. would
acquire all of the assets of Midas Investors Ltd. in exchange solely for
shares of Midas Fund, Inc. and the assumption by Midas Fund, Inc. of all of
Midas Investors Ltd.'s liabilities, followed by the distribution of those
shares to the shareholders of Midas Investors Ltd.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

Shareholders of Midas U.S. and Overseas Fund Ltd. only:

2. Approval of a Plan of Reorganization under which Midas Special Equities
Fund, Inc. would acquire all of the assets of Midas U.S. and Overseas Fund
Ltd. in exchange solely for shares of Midas Special Equities Fund, Inc. and
the assumption by Midas Special Equities Fund, Inc. of all of Midas U.S.
and Overseas Fund Ltd.'s liabilities, followed by the distribution of those
shares to the shareholders of Midas U.S. and Overseas Fund Ltd.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

YOUR VOTE IS IMPORTANT. IF YOU ARE NOT VOTING BY TELEPHONE, PLEASE SIGN AND DATE
THIS PROXY BELOW AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.

TO VOTE BY TELEPHONE, CALL [1-888-_______].

MIDAS FUND, INC.
MIDAS INVESTORS LTD.

MIDAS SPECIAL EQUITIES FUND, INC.
MIDAS U.S. AND OVERSEAS FUND LTD.

11 HANOVER SQUARE
NEW YORK, NEW YORK 10005

STATEMENT OF ADDITIONAL INFORMATION
[effective date]

This Statement of Additional Information relates specifically to the
proposed reorganizations whereby Midas Fund, Inc. would acquire the assets of
Midas Investors Ltd. in exchange solely for shares of Midas Investors Ltd. and
the assumption by Midas Fund, Inc. of the liabilities of Midas Investors Ltd.
and Midas Special Equities Fund, Inc. would acquire the assets of Midas U.S. and
Overseas Fund Ltd. in exchange solely for shares of Midas U.S. and Overseas Fund
Ltd. and the assumption by Midas Special Equities Fund, Inc. of the liabilities
of Midas U.S. and Overseas Fund Ltd. (collectively, the "Reorganizations"). This
Statement of Additional Information consists of this cover page, the PRO FORMA
financial statements of Midas Special Equities Fund [and Midas Fund] (giving
effect to the Reorganization[s]) and the following described documents, each of
which is incorporated by reference herein:

The Statement of Additional Information of Midas Fund, Inc., dated May
1,2001. EDGAR accession number: 0000770200-01-500009.

The Statement of Additional Information of Midas Investors Ltd., dated May
1, 2001. EDGAR accession number: 0000042031-01-500009.

The Statement of Additional Information of Midas Special Equities Fund,
Inc., dated May 1, 2001. EDGAR accession number: 0000788422-01-500008.

The Statement of Additional Information of Midas U.S. and Overseas Fund
Ltd., dated May 1, 2001. EDGAR accession number: 0000796532-01-500010.

The Annual Report to shareholders of Midas Fund, Inc., for the fiscal year
ended December 31, 2000. EDGAR accession number: 0000788422-01-000009.

The Annual Report to shareholders of Midas Investors Ltd., for the fiscal
year ended December 31, 2000. EDGAR accession number: 0000788422-01-000010.

The Annual Report to shareholders of Midas Special Equities Fund, Inc., for
the fiscal year ended December 31, 2000. EDGAR accession number:
0000788422-01-000002.

SAI-1

The Annual Report to shareholders of Midas U.S. and Overseas Fund Ltd., for
the fiscal year ended December 31, 2000. EDGAR accession
number:0000788422-01-000007.

The Semi-Annual Report to shareholders of Midas Fund, Inc., for the period
ended June 30, 2001. EDGAR accession number: ______________.

The Semi-Annual Report to shareholders of Midas Investors Ltd., for the
period ended June 30, 2001. EDGAR accession number: __________________.

The Semi-Annual Report to shareholders of Midas Special Equities Fund,
Inc., for the period ended June 30, 2001. EDGAR accession number:
__________________.

The Semi-Annual Report to shareholders of Midas U.S. and Overseas Fund,
Inc., for the period ended June 30, 2001. EDGAR accession number:
__________________.

This Statement of Additional Information is not a prospectus and should be
read only in conjunction with the Proxy Statement/Prospectus dated [effective
date] relating to the above- referenced matter. A copy of the Proxy
Statement/Prospectus may be obtained by calling toll- free 1-800-400-MIDAS
(6432).

SAI-2

PRO FORMA INFORMATION

Pro Forma information is not included for Midas Fund because as of June 30,
2001 the net asset value of Midas Investors does not exceed ten percent of the
net asset value of Midas Fund.

Pro Formas-1

Pro Forma Financial Statements
Midas U.S. and Overseas Fund and
Midas Special Equities Fund

Pro Forma Schedule of Portfolio Investments (Unaudited)

Market Value
-------------------------------------------------------------------------------
Pro forma
for the Pro Forma % of
Midas U.S. and Midas Special Combined Total Invest-
Description Overseas Fund Equities Fund Fund ments
- ------------------------------------------------------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------------------------------------------------------

The News Corporation Limited
Preferred ADS Warrants $261,800 $261,800 0.72%
------------------------------------------------------------------

Nokia Oyj ADR $174,000 1,539,900 1,713,900 4.74%
------------------------------------------------------------------------------------

Telefonos de Mexico S.A. ADR 324,900 324,900 0.90%
------------------ ------------------------------------------

Royal Dutch Petroleum Company 248,306 248,306 0.69%
------------------ ------------------------------------------

Alliance Capital Management Holding
L.P. 106,313 1,589,625 1,695,938

American International Group, Inc. 295,687 2,912,522 3,208,209

Berkshire Hathaway Inc. Class B 2,354,000 2,354,000

Calpine Corp. 180,250 1,442,000 1,622,250

Citigroup Inc. 272,316 2,328,450 2,600,766

Corning Inc. 274,625 1,473,469 1,748,094

EL Paso Energy Corp 214,875 1,575,750 1,790,625

Enron Corp. 224,438 1,496,250 1,720,688

Exxon Mobil Corp. 260,812 1,651,812 1,912,624

Microsoft Corp. 164,825 164,825

Mills Corp. 243,469 1,421,063 1,664,532

Oracle 354,563 354,563

Pro Formas-2

Pfizer Inc. 230,000 230,000

Pharmacia Corp. 237,900 1,586,000 1,823,900

Philip Morris Companies Inc. 3,493,600 3,493,600

Schering-Plough Corp. 2,525,375 2,525,375

Stillwell Financial, Inc. 268,175 1,419,750 1,687,925

The Boeing Company 198,000 1,320,000 1,518,000

The Charles Schwab Corp. 198,625 1,276,875 1,475,500

-----------------------------------------------------
3,724,873 29,866,541 33,591,414 92.95%
---------------------------------------------------------------------------
Total Investments(Cost: $4,602,846, 100.00%
$26,097,904, $30,700,750 ) $ 4,472,079 $ 31,668,241 $ 36,140,320
===============================================================================

Pro Formas-3

Pro-Forma Statement of Assets and Liabilities
Year Ended December 31, 2000 (Unaudited)
Midas U.S. and Midas Special Equities Pro Forma for the
Overseas Fund Fund Combined Fund
-------------------------------------------------------------------------------------

ASSETS:

Investments at cost $4,602,846 $26,097,904 $30,700,750
Investments at market value $4,472,079 $31,668,241 $36,140,320
Receivables:
Dividends 614 42,082 42,696
Other assets 1,043 5,625 6,668
-------------------------------------------------------------------------------------
Total assets 4,473,736 31,715,948 36,189,684
=====================================================================================
Liabilities:
Cash Overdraft 172 172
Payables:
Demand notes payable to Bank 489,048 2,585,245 3,074,293
Accrued expenses 38,196 67,994 106,190
Accrued management and distribution
fees 3,797 26,961 30,758
Total liabilities 531,213 2,680,200 3,211,413
=====================================================================================

Net Assets $3,942,523 $29,035,748 $32,978,271
Shares outstanding, $0.01 par value 873,287 1,450,480 1,647,409
Net asset value, offering and redemption
price per share $4.51 $20.02 $20.02

At December 31, 2000, net assets consist of:
Paid-in Capital $4,606,526 $26,663,916 $31,270,442
Accumulated net realized loss on
investments (533,236) (3,198,505) (3,731,741)
Net unrealized appreciation
(depreciation) on investments
(130,767) 5,570,337 5,439,570
$3,942,523 $29,035,748 $32,978,271
=====================================================================================

Pro Formas-4

Pro-Forma Statement of Operations
Year Ended December 31, 2000 (Unaudited)
Midas U.S. and Midas Special Pro Forma Pro Forma For The
Overseas Fund Equities Fund Adjustments Combined Fund
----------------------------------------------------------------------------------------------
INVESTMENT INCOME

Dividends $ 43,973 $ 402,921 - $ 446,894
Foreign taxes withheld (1,819) - - (1,819)
Interest 11,245 158,793 - 170,038
----------------------------------------------------------------------------------------------
Total income 53,399 561,714 0 615,113
==============================================================================================

EXPENSES
Investment management 63,481 305,677 (15,870) (a) 353,288
Distribution 63,481 341,025 - 404,506
Interest 65,771 228,490 - 294,261
Transfer agent 33,010 122,188 (20,000) (b) 135,198
Custodian 20,933 73,300 (1,000) (b) 93,233
Professional 37,359 46,634 (35,000) (b) 48,993
Registration 16,170 25,435 (14,000) (b) 27,605
Directors 6,725 9,353 (3,500) (b) 12,578
Printing 5,782 14,537 (5,500) (b) 14,819
Other 632 6,248 (500) (b) 6,380
----------------------------------------------------------------------------------------------
Total expenses 313,344 1,172,887 (95,370) 1,390,861
Investment management and
distribution plan expense waived (47,611) - 47,611 (a) -
Fee reduction (886) (7,194) - (8,080)
----------------------------------------------------------------------------------------------
Net expenses 264,847 1,165,693 (47,759) 1,382,781

-----------------------------------------------------------------------------------------------
Net investment income (loss) (211,448) (603,979) 47,759 (767,668)
-----------------------------------------------------------------------------------------------

REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
Net realized gain from security
transactions 629,592 6,056,666 - 6,686,258
Net realized loss from foreign currency
and futures transactions (1,198,331) (5,060,166) - (6,258,497)
Unrealized appreciation (depreciation)
of investments during the period (3,723,451) (8,697,055) - (12,420,506)
-----------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments, foreign currencies and
futures (4,292,190) (7,700,555) - (11,992,745)
Net Increase (Decrease) in Net Assets $(4,503,638) $(8,304,534) $47,759 $(12,760,413)
Resulting from Operations
===============================================================================================

(a) Reflects adjustments in expenses due to effects of proposed contract rate.
(b) Reflects adjustments in expenses due to elimination of duplicative services.

Pro Formas-5

Pro forma Notes to Financial Statements (Unaudited)

1. The accompanying pro forma financial statements are presented to show the
effect of the proposed reorganization of Midas U.S. and Overseas Fund Ltd.
("USO") into Midas Special Equities Fund, Inc. ("SE") as if such reorganization
had taken place as of December 31, 2000. Under the terms of the Plan, the
reorganization of USO and SE will be taxed as a tax-free business combination
and accordingly will be accounted for by a method of accounting for tax free
combinations of investment companies (sometimes referred to as the "pooling
without restatement method". The reorganization would be accomplished by an
acquisition of the net assets of USO in exchange for shares of SE at net asset
value. The statement of assets and liabilities, schedule of investments and the
related statement of operations of USO and SE have been combined as of and for
the year ended December 31, 2000. The accompanying pro forma financial
statements should be read in conjunction with the financial statements and
schedule of investments of SE and USO which are included in their respective
annual reports dated December 31, 2000. The following notes refer to the
accompanying pro forma financial statements as if the above mentioned
reorganization of SE and USO had taken place as of December 31, 2000.

USO and SE are Maryland corporations registered under the Investment Company Act
of 1940, as amended, as open-end management investment companies. USO's
investment objective is to seek to obtain the highest possible total return on
its assets from long term growth of capital and from income principally through
a portfolio of securities of U.S. and overseas issuers. SE's investment
objective is capital appreciation. The Fund seeks capital appreciation by
investing aggressively in equity securities, warrants, convertible securities
and debt instruments.

The following is a summary of significant accounting policies consistently
followed by each Fund in the preparation of its financial statements. With
respect to security valuation, investments in securities traded on a national
securities exchange, unless over-the-counter quotations for such securities are
believed to more closely reflect their fair value, and securities traded on the
Nasdaq National Market System ("NMS") are valued at the last reported sales
price on the day the valuations are made. Such securities that are not traded on
a particular day, securities traded in the over- the-counter market that are not
on NMS, and foreign securities are valued at the mean between the current bid
and asked prices. Securities of foreign issuers denominated in foreign
currencies are translated into U.S. dollars at prevailing exchange rates.
Futures and forward contracts are marked to market daily and the change in
market value is recorded by the Funds as an unrealized gain or loss. When a
contract is closed, a realized gain or loss is recorded by the Funds equal to
the difference between the opening and closing value of the contract. A Fund
could be exposed to risk if the counterparties are unable to meet the terms of
the contracts. Debt obligations with remaining maturities of 60 days or less are
valued at cost adjusted for amortization of premiums and accretion of discounts.
Investment transactions are accounted for on the trade date. Dividend income and
distributions to shareholders are recorded on the ex-dividend date and interest
income is recorded on the accrual basis. In preparing financial statements in
conformity with generally accepted accounting principles, management makes
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements, as well as the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.

Each Fund intends to comply with the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute substantially all
taxable income and net capital gains, if any, after utilization of any capital
loss carryforward, to shareholders and therefore no Federal income tax provision
is required.

2. Distributions from net realized gains, if any, are normally declared and paid
annually. Distributions are determined in accordance with income tax regulations
which may differ from generally accepted accounting principles. These
differences are primarily due to differing treatments for capital loss
carryforwards, post-October capital losses, net operating losses and foreign
currency transactions.

3. Effective June 30, 1999, the investment management agreements between Bull &
Bear Advisers, Inc. and SE and USO were transferred to Midas Management
Corporation (the "Investment Manager"). The terms of the investment management
agreements, other than the name of the investment manager, did not change. Under
the terms of the investment management agreements of SE and USO, the Investment
Manager receives a management fee, payable monthly, based on the average daily
net assets of the Fund at the annual rate of 1% on the first $10 million, 7/8 of

Pro Formas-6

1% from $10 million to $30 million, 3/4 of 1% from $30 million to $150 million,
5/8 of 1% from $150 million to $500 million, and 1/2 of 1% over $500 million.
Pursuant to the investment management agreements with each Fund, the Investment
Manager has agreed to waive all or part of its fee or reimburse any Fund monthly
if and to the extent the aggregate operating expenses of the Fund exceed the
most restrictive limit imposed by any state in which shares of the Funds are
qualified for sale, although currently the Funds are not subject to any such
limits. Each Fund has adopted a plan of distribution pursuant to Rule 12b-1
under the 1940 Act. Under each Plan, each Fund pays the Fund's Distributor,
Investor Service Center, Inc., an affiliate of the Investment Manager, a fee of
1.00% for distribution and shareholder services. The shareholder service fee is
intended to cover personal services provided to the shareholders of the Funds
and the maintenance of shareholder accounts. The distribution fee is to cover
all other activities and expenses primarily intended to result in the sale of
the Funds' share. For USO, the Distributor has made a partial contractual fee
waiver that continues through May 1, 2002 and waived $47,611 in distribution
expenses for the year ended December 31, 2000. Certain officers and directors of
the Fund are officers and directors of the Investment Manager and the Fund's
Distributor. USO and SE reimbursed the Investment Manager $5,313 and $29,945,
respectively, for providing certain administrative and accounting services at
cost during the year ended December 31, 2000.

4. At December 31, 2000, aggregate cost, gross unrealized appreciation, gross
unrealized depreciation, and net unrealized appreciation (depreciation) of
securities for federal income tax purposes were for USO $4,602,846, $140,442,
$271,209 and $(130,767), respectively, and for SE $26,097,904, $6,061,196,
$490,859, and $5,570,337, respectively. Purchases and sales of securities other
than short term notes were for USO $17,336,589 and $21,475,649, respectively and
for SE $90,144,809 and $104,168,060, respectively.

5. The Funds have a committed bank line of credit at an interest rate equal to
the Federal Reserve Funds Rate plus 1.00 percentage point for leveraging and/or
temporary or emergency purposes. At December 31, 2000, the outstanding balance,
and for the year ended December 31, 2000, the weighted average interest rate and
the weighted average amount outstanding were for USO $489,048, 7.19% and
$903,278 and for SE $2,585,245, 7.16% and $3,171,112, respectively. The Funds
participate in repurchase agreements with the Funds' custodian. The custodian
takes possession of the underlying collateral securities which are valued daily
to ensure that the fair market value, including accrued interest is at least
equal, at all times, to the repurchase price. In the event of default of the
obligation to repurchase, the Funds have the right to liquidate the collateral
and apply the proceeds in satisfaction of the obligation. Under certain
circumstances, in the event of default or bankruptcy by the other party to the
agreement, realization and/or retention of the collateral may be subject to
legal proceedings. The Funds have entered into an arrangement with its transfer
agent and custodian whereby interest earned on uninvested cash balances was used
to offset a portion of the Funds' expenses. During the period, the transfer
agent fees and custodian fees of USO and SE were reduced by $886 and $7,194,
respectively, under such arrangements.

Pro Formas-7

PART C -- OTHER INFORMATION

Item 15. Indemnification

Indemnification. The Registrant is incorporated under Maryland law. Section
2-418 of the Maryland General Corporation Law requires the Registrant to
indemnify its directors, officers and employees against expenses, including
legal fees, in a successful defense of a civil or criminal proceeding. The law
also permits indemnification of directors, officers, employees and agents unless
it is proved that (a) the act or omission of the person was material and was
committed in bad faith or was the result of active and deliberate dishonesty,
(b) the person received an improper personal benefit in money, property or
services or (c) in the case of a criminal action, the person had reasonable
cause to believe that the act or omission was unlawful.

Registrant's Articles of Incorporation: (1) provide that, to the maximum
extent permitted by applicable law, a director or officer will not be liable to
the Registrant or its stockholders for monetary damages; (2) require the
Registrant to indemnify and advance expenses as provided in the By-laws to its
present and past directors, officers, employees and agents, and persons who are
serving or have served at the request of the Registrant in similar capacities
for other entities in advance of final disposition of any action against that
person to the extent permitted by Maryland law and the 1940 Act; (3) allow the
corporation to purchase insurance for any present or past director, officer,
employee, or agent; and (4) require that any repeal or modification of the
amended and restated Articles of Incorporation by the shareholders, or adoption
or modification of any provision of the Articles of Incorporation inconsistent
with the indemnification provisions, be prospective only to the extent such
repeal or modification would, if applied retrospectively, adversely affect any
limitation on the liability of or indemnification available to any person
covered by the indemnification provisions of the amended and restated Articles
of Incorporation.

Section 11.01 of Article XI of the By-Laws sets forth the procedures by
which the Registrant will indemnify its directors, officers, employees and
agents. Section 11.02 of Article XI of the By-Laws further provides that the
Registrant may purchase and maintain insurance or other sources of reimbursement
to the extent permitted by law on behalf of any person who is or was a director
or officer of the Registrant, or is or was serving at the request of the
Registrant as a director or officer of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him or
her and incurred by him or her in or arising out of his or her position.

Registrant's Investment Management Agreement between the Registrant and
Midas Management Corporation ("Investment Manager") provides that the Investment
Manager shall not be liable to the Registrant or any shareholder of the
Registrant for any error of judgment or mistake of law or for any loss suffered
by the Registrant in connection with the matters to which the Investment
Management Agreement relates. However, the Investment Manager is not protected
against any liability to the Registrant by reason of willful misfeasance, bad
faith, or gross negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties under the Investment Management
Agreement.

Pro Formas-8

Section 9 of the Distribution Agreement between the Registrant and Investor
Service Center, Inc. ("Service Center") provides that the Registrant will
indemnify Service Center and its officers, directors and controlling persons
against all liabilities arising from any alleged untrue statement of material
fact in the Registration Statement or from any alleged omission to state in the
Registration Statement a material fact required to be stated in it or necessary
to make the statements in it, in light of the circumstances under which they
were made, not misleading, except insofar as liability arises from untrue
statements or omissions made in reliance upon and in conformity with information
furnished by Service Center to the Registrant for use in the Registration
Statement; and provided that this indemnity agreement shall not protect any such
persons against liabilities arising by reason of their bad faith, gross
negligence or willful misfeasance; and shall not inure to the benefit of any
such persons unless a court of competent jurisdiction or controlling precedent
determines that such result is not against public policy as expressed in the
Securities Act of 1933. Section 9 of the Distribution Agreement also provides
that Service Center agrees to indemnify, defend and hold the Registrant, its
officers and Directors free and harmless of any claims arising out of any
alleged untrue statement or any alleged omission of material fact contained in
information furnished by Service Center for use in the Registration Statement or
arising out of any agreement between Service Center and any retail dealer, or
arising out of supplementary literature or advertising used by Service Center in
connection with the Distribution Agreement.

The Registrant undertakes to carry out all indemnification provisions of
its Articles of Incorporation and By-Laws and the above-described contract in
accordance with Investment Company Act Release No. 11330 (September 4, 1980) and
successor releases.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, may be provided to directors, officers and controlling
persons of the Registrant, 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 with the successful defense of any action, suit or
proceeding or payment pursuant to any insurance policy) is asserted against the
Registrant by such director, officer or controlling person in connection with
the securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question 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.

Item 16. Exhibits

(1) Articles of Incorporation filed with the Securities and Exchange Commission
on April 28, 2000, accession number 0000770200-00-000007

(2) Bylaws filed with the Securities and Exchange Commission on March 2, 1998,
accession number 0000770200-98-000001

Pro Formas-9

(3) Voting trust agreement - not applicable

(4) Form of Agreement and Plan of Reorganization is attached hereto as Appendix
B to the proxy statement/prospectus

(5) Instruments defining the rights of security holders are contained in the
Articles of Incorporation, filed with the Securities and Exchange
Commission on April 28, 2000, accession number 0000770200-00-000007, and
the Bylaws filed with the Securities and Exchange Commission on March 2,
1998, accession number 0000770200-98-000001

(6) Form of Investment Management Agreement filed with the Securities and
Exchange Commission on March 1, 2000, accession number 0000770200-00-000005

(7) Form of Distribution Agreement filed with the Securities and Exchange
Commission on March 1, 2000, accession number 0000770200-00-000005

(8) Not applicable

(9) (a) Supplement to Form of Custody and Investment Accounting Agreement
filed with the Securities and Exchange Commission on May 1, 2001,
Accession Number 0000770200-01-500004. Supplement to Custody and
Investment Accounting Agreement with Investors Fiduciary Trust Company
filed with the Securities and Exchange Commission on April 28, 2000,
accession number 0000770200-00-000007. Form of Custody and Investment
Accounting Agreement with Investors Fiduciary Trust Company filed with
the Securities and Exchange Commission on April 28, 1997, accession
number 0000770200-97- 000010

(b) Form of Retirement Plan Custodial Services Agreement, filed with the
Securities and Exchange Commission on March 31, 1998, accession number
0000770200- 98-000006

(10) (a) Plan of Distribution filed with the Securities and Exchange Commission
on March 1, 2000, accession number 0000770200-00-000005 (b) Rule 18f-3
Plan - not applicable

(11) Opinion and consent of counsel as to legality of securities being
registered. Filed herewith.

(12) Opinion and consent of Kirkpatrick & Lockhart LLP regarding certain tax
matters in connection with the reorganization of Midas Investors Ltd. into
Midas Fund, Inc. - to be filed.

Pro Formas-10

(13) (a) Form of Transfer Agency Agreement filed with the Securities and
Exchange Commission on August 24, 1994, accession number
0000770200-95-000006

(b) Form of Agency Agreement, filed with the Securities and Exchange
Commission on August 24, 1994, accession number 0000770200-95-000006

(d) Form of Credit Facilities Agreement, filed with the Securities and
Exchange Commission on March 31, 1998, accession number
0000770200-98-000006

(e) Form of Segregated Account Procedural and Safekeeping Agreement, filed
with the Securities and Exchange Commission on March 31, 1998,
accession number 0000770200-98-000006

(f) Form of Retirement Plan Custodial Services Agreement, filed with the
Securities and Exchange Commission on March 31, 1998, accession number
0000770200- 98-000006

(14) Accountants' consent. Filed herewith

(15) Financial statements omitted pursuant to Item 14(a)(1) - none.

(16) Manually signed copy of power of attorney - none.

(17) Additional exhibits - none.

Item 17. Undertakings

(1) The undersigned registrant agrees that prior to any public reoffering of
the securities registered through the use of a prospectus which is part of
this registration statement by any person or party who is deemed to be an
underwriter within the meaning of Rule 145(c) of the Securities Act, the
reoffering prospectus will contain the information for the applicable
registration form for reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other items
of the applicable form.

(2) The undersigned registrant agrees that every prospectus that is filed under
paragraph (1) above will be filed as part of an amendment to the
registration statement and will not be used until the amendment is
effective, and that, in determining any liability under the 1933 Act, each
post-effective amendment shall be deemed to be a new registration statement
for the securities offered therein, and the offering of the securities at
that time shall be deemed to be the initial bona fide offering of them.

(3) Registrant hereby undertakes to file a post-effective amendment to this
registration statement on N-14, containing an opinion of counsel supporting
the tax consequences of

Pro Formas-11

the reorganization described herein wi thin a reasonable time after receipt
of such opinion.

SIGNATURES

As required by the Securities Act of 1933, this registration statement has
been signed on its behalf of the registrant, in the City, County and State of
New York on this July 30, 2001.

MIDAS FUND, INC.

/s/ Thomas B. Winmill
---------------------
By: Thomas B. Winmill

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:

Thomas B. Winmill Chairman, President, Chief July 30, 2001
- ----------------- Executive Officer and
Thomas B. Winmill General Counsel

William G. Vohrer Treasurer, Chief Accounting July 30, 2001
- ----------------- Officer, Chief Financial
William G. Vohrer Officer

Bruce B. Huber Director July 30, 2001
- --------------
Bruce B. Huber

James E. Hunt Director July 30, 2001
- -------------
James E. Hunt

John B. Russell Director July 30, 2001
- ---------------
John B. Russell

Pro Formas-12

EXHIBIT INDEX

EXHIBIT

(11) Opinion and Consent of Counsel as to Legality of Securities Being
Registered.

(13) (c) Amendment to Credit Facilities Agreement.

(14) Accountant's Consent.

Pro Formas-13

MIDAS FUND, INC.
11 Hanover Square
New York, NY 10005

July 30, 2001

Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549

Re: Midas Fund, Inc.
--------------------
SEC File Nos. 2-98229 and 811-4316

Dear Sir or Madam:

We submit herewith the Form N-14 on behalf of Midas Fund, Inc. Please note
that this prospectus/proxy statement for Midas Investors Ltd. shareholders is
also being sent to Midas U.S. and Overseas Fund Ltd. shareholders and will be
filed today by Midas Special Equities Fund, Inc.

Should you have any questions or comments on this filing please call
counsel to Midas Special Equities Fund, Inc., Stephanie A. Djinis, Esq. of Law
Offices of Stephanie A. Djinis at (703) 873-0885, fax (703) 873-0888.

Sincerely,

MIDAS FUND, INC.

/s/ Thomas B. Winmill
---------------------
Thomas B. Winmill
President

Pro Formas-14