UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number
811-07168
The Henlopen Fund
-----------------
(Exact name of registrant as specified in charter)
Longwood Corporate Center South
415 McFarlan Road, Suite 213
Kennett Square, PA 19348
------------------------
(Address of principal executive offices) (Zip code)
Michael L. Hershey
Landis Associates LLC
Longwood Corporate Center South
Kennett Square, PA 19348
------------------------
(Name and address of agent for service)
(610) 925-0400
--------------
Registrant's telephone number, including area code:
Date of fiscal year end: June 30
Date of reporting period: 12/31/2003
ITEM 1. REPORTS TO STOCKHOLDERS.
- --------------------------------
THE HENLOPEN FUND
SEMIANNUAL REPORT
DECEMBER 31, 2003
To My Fellow Shareholders:
For the quarter ended December 31, 2003, The Henlopen Fund increased 16.41%.
Annualized returns for the Fund for 1, 3, 5 and 10 years are 64.98%, 9.57%,
11.68%, and 15.02%, respectively. Since our inception on December 2, 1992, the
Fund has an annualized return of 16.18%.
The December quarter capped off a year of strong gains for all the major
indices. The acceleration of economic growth and overall improvement in
employment statistics mentioned in our September quarterly letter continued to
drive investor enthusiasm, as evidenced by strong performance across most
industry sectors. The Henlopen Fund again benefited from broad-based gains,
with holdings in technology, financial services and energy making the strongest
advances. The Fund increased its exposure to the biotechnology sector during
the year, as we believe the industry will yield many of the next generation of
therapeutic advances. Our thesis appears to have been validated during the
December quarter as two of these holdings, Applied Molecular Evolution and
Esperion Therapeutics, were acquired by large pharmaceutical companies looking
to strengthen their drug pipelines.
The climate for equities remains favorable, as the economy continues to
strengthen and interest rates remain extremely low. Valuation levels of stock
indices and the threat of future interest rate hikes should provide fodder for
the bears and increase market volatility in the year ahead, but companies with
strong growth prospects and solid management execution should continue to be
rewarded with higher stock prices. We will continue our efforts to position the
Fund in such companies for our shareholders' benefit.
Sincerely yours,
/s/Michael L. Hershey /s/Bruce V. Vogenitz
Michael L. Hershey Bruce V. Vogenitz
President Vice President
MANAGED BY LANDIS ASSOCIATES LLC
WWW.HENLOPENFUND.COM
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT*<F1> IN
The Henlopen Fund, S&P 500 Index and Lipper Growth Fund Index
Date The Henlopen Fund S&P 500 Index Lipper Growth Fund Index
---- ----------------- ------------- ------------------------
12/2/92 $10,000 $10,000 $10,000
12/31/92 $10,010 $10,162 $10,204
3/31/93 $10,821 $10,604 $10,507
6/30/93 $11,562 $10,654 $10,661
9/30/93 $12,450 $10,926 $11,173
12/31/93 $12,999 $11,179 $11,426
3/31/94 $12,760 $10,758 $11,084
6/30/94 $12,126 $10,804 $10,841
9/30/94 $12,853 $11,332 $11,373
12/31/94 $12,644 $11,330 $11,246
3/31/95 $13,583 $12,430 $12,059
6/30/95 $15,494 $13,613 $13,349
9/30/95 $17,819 $14,692 $14,563
12/31/95 $17,453 $15,574 $14,918
3/31/96 $19,233 $16,409 $15,591
6/30/96 $21,442 $17,144 $16,107
9/30/96 $21,024 $17,670 $16,566
12/31/96 $21,182 $19,141 $17,527
3/31/97 $20,072 $19,658 $17,468
6/30/97 $22,519 $23,083 $20,228
9/30/97 $28,095 $24,811 $22,301
12/31/97 $25,971 $25,524 $22,450
3/31/98 $31,183 $29,084 $25,229
6/30/98 $29,902 $30,041 $25,946
9/30/98 $23,918 $27,058 $22,985
12/31/98 $30,323 $32,818 $28,216
3/31/99 $30,744 $34,456 $29,647
6/30/99 $34,816 $36,885 $31,571
9/30/99 $34,260 $34,582 $29,936
12/31/99 $49,162 $39,781 $36,103
3/31/00 $63,069 $40,678 $38,735
6/30/00 $53,512 $39,597 $37,119
9/30/00 $50,296 $39,213 $36,626
12/31/00 $40,041 $36,145 $32,176
3/31/01 $33,035 $31,860 $26,892
6/30/01 $38,551 $33,724 $28,772
9/30/01 $30,774 $28,787 $23,228
12/31/01 $40,339 $31,864 $26,394
3/31/02 $38,887 $31,952 $25,829
6/30/02 $33,882 $27,671 $22,200
9/30/02 $27,404 $22,891 $18,737
12/31/02 $31,925 $24,821 $20,007
3/31/03 $30,593 $24,039 $19,563
6/30/03 $36,586 $27,742 $22,497
9/30/03 $45,293 $28,477 $23,170
12/31/03 $52,728 $31,945 $25,656
*<F1> assumes equal $10,000 investments made on inception date of December 2,
1992.
Past performance is not predictive of future performance. Investment return and
principal value will fluctuate, and redemption value may be more or less than
original cost. The graph does not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund shares.
THE HENLOPEN FUND
STATEMENT OF NET ASSETS
December 31, 2003 (Unaudited)
SHARES OR
PRINCIPAL
AMOUNT COST VALUE
- --------- ---- -----
LONG-TERM INVESTMENTS -- 95.8% (A)<F3>
COMMON STOCKS -- 94.2 (A)<F3>
ADVERTISING -- 1.0%
200,000 Modem Media Inc.*<F2> $ 1,239,714 $ 1,634,000
AUTO & TRUCK RELATED -- 0.3%
100,000 Coast Distribution
System, Inc. 594,648 551,000
BASIC MATERIALS -- 1.7%
50,000 Century
Aluminum Co.*<F2> 1,028,196 950,500
125,000 Metals USA, Inc.*<F2> 1,206,637 1,258,750
55,000 Universal Stainless &
Alloy Products, Inc.*<F2> 866,924 594,000
------------ ------------
3,101,757 2,803,250
BIOTECHNOLOGY -- 2.1%
100,000 Cypress
Bioscience, Inc.*<F2> 1,473,595 1,515,000
100,000 EntreMed, Inc.*<F2> 638,050 334,000
70,000 Geron Corp.*<F2> 1,024,180 697,900
150,000 OrthoLogic Corp.*<F2> 1,012,589 919,500
------------ ------------
4,148,414 3,466,400
BUSINESS SERVICES -- 3.8%
110,000 Gevity HR, Inc. 932,193 2,446,400
150,000 Lionbridge
Technologies, Inc.*<F2> 983,805 1,441,500
125,000 The Ultimate Software
Group, Inc.*<F2> 996,292 1,096,250
80,000 Unisys Corp.*<F2> 1,019,317 1,188,000
------------ ------------
3,931,607 6,172,150
COMMUNICATIONS -- 4.8%
70,000 IDT Corp. - Cl B*<F2> 1,185,895 1,619,100
69,400 Interphase Corp.*<F2> 721,780 898,730
200,000 NMS Communications
Corp.*<F2> 2,405,787 1,248,000
350,000 Optical Communication
Products, Inc.*<F2> 1,373,520 1,295,000
20,000 Research In
Motion Ltd.*<F2> 1,207,400 1,336,600
301,000 Science
Dynamics Corp.*<F2> 2,771,553 27,090
35,000 UTStarcom, Inc.*<F2> 1,411,181 1,297,450
------------ ------------
11,077,116 7,721,970
COMMUNICATIONS SERVICES -- 2.9%
50,000 America Movil S.A. de
C.V. ADR Series L 1,117,920 1,367,000
57,625 Hughes Electronics
Corp.*<F2> 870,466 953,694
20,000 Media General, Inc. 1,337,242 1,302,000
100,000 Primus
Telecommunications
Group, Inc.*<F2> 1,061,050 1,018,000
------------ ------------
4,386,678 4,640,694
COMPUTER PERIPHERALS -- 0.5%
300,000 Peerless
Systems Corp.*<F2> 1,016,975 750,000
CONSTRUCTION SERVICES -- 2.9%
10,000 Centex Corp. 1,075,572 1,076,500
12,000 Lennar Corp. 1,166,249 1,152,000
50,000 Masco Corp. 1,350,000 1,370,500
12,000 Pulte Homes, Inc. 1,032,001 1,123,440
------------ ------------
4,623,822 4,722,440
CONSUMER NON-DURABLES -- 0.7%
15,000 Fortune Brands, Inc. 1,026,778 1,072,350
DEFENSE RELATED -- 0.9%
30,000 L-3 Communications
Holdings, Inc.*<F2> 1,469,070 1,540,800
DISTRIBUTION -- 1.1%
110,000 PC Mall, Inc.*<F2> 1,120,972 1,776,500
ELECTRONICS/EQUIPMENT MANUFACTURING -- 0.9%
100,000 DDI Corp.*<F2> 1,367,415 1,465,000
FINANCIAL SERVICES -- 4.8%
75,000 AmeriCredit Corp.*<F2> 1,171,500 1,194,750
60,000 Commercial Capital
Bancorp, Inc.*<F2> 1,326,486 1,284,600
500 Franklin
Bank Corp.*<F2> 7,250 9,500
50,000 MBNA Corp. 1,270,586 1,242,500
125,000 Tradestation
Group Inc.*<F2> 1,226,237 1,107,500
75,000 W Holding
Company, Inc. 1,288,140 1,395,750
35,000 Wachovia Corp. 1,592,284 1,630,650
------------ ------------
7,882,483 7,865,250
FOOD & BEVERAGES -- 2.5%
40,000 Central European
Distribution Corp.*<F2> 1,208,116 1,264,000
30,000 Diageo PLC -
SP-ADR 1,332,940 1,585,800
60,000 Smithfield
Foods, Inc.*<F2> 1,285,140 1,242,000
------------ ------------
3,826,196 4,091,800
FURNITURE -- 0.8%
40,000 Stanley Furniture
Company, Inc. 848,598 1,260,000
HEALTHCARE PRODUCTS -- 14.4%
65,000 Abaxis, Inc.*<F2> 1,158,015 1,177,800
80,000 Ciphergen
Biosystems, Inc.*<F2> 932,945 899,200
310,000 IGEN
International, Inc.*<F2> 5,109,762 18,262,100
115,000 Nabi
Biopharmaceuticals*<F2> 1,309,807 1,461,650
160,000 PharmaNetics, Inc.*<F2> 2,272,750 296,000
120,000 Quidel Corp.*<F2> 1,021,188 1,298,400
------------ ------------
11,804,467 23,395,150
HEALTHCARE SERVICES -- 1.0%
6,000 ICON PLC --
SP-ADR*<F2> 198,472 261,600
150,000 Ventiv Health, Inc.*<F2> 1,335,035 1,372,500
------------ ------------
1,533,507 1,634,100
INSURANCE -- 0.6%
75,000 American Safety
Insurance Holdings,
Ltd.*<F2> 1,012,642 983,250
LEISURE/ENTERTAINMENT -- 4.9%
40,000 Alliance
Gaming Corp.*<F2> 1,053,933 986,000
50,000 Aztar Corp.*<F2> 1,110,808 1,125,000
50,000 International Game
Technology 1,450,444 1,785,000
25,000 Multimedia
Games, Inc.*<F2> 1,086,348 1,027,500
100,000 Scientific
Games Corp.*<F2> 1,202,338 1,701,000
50,000 XM Satellite Radio
Holdings Inc.*<F2> 1,130,295 1,318,000
------------ ------------
7,034,166 7,942,500
METALS -- 2.4%
70,000 Gold Fields Ltd. -
SP-ADR*<F2> 1,066,443 975,800
12,000 Rio Tinto PLC -
SP-ADR*<F2> 1,270,549 1,335,720
300,000 Western Silver Corp.*<F2> 868,429 1,584,000
------------ ------------
3,205,421 3,895,520
MISCELLANEOUS MANUFACTURING -- 5.8%
150,000 Axsys
Technologies, Inc.*<F2> 4,046,085 2,128,500
100,000 Concord
Camera Corp.*<F2> 1,284,463 925,000
60,000 Craftmade
International, Inc. 1,488,072 1,574,400
150,000 Crown Holdings, Inc.*<F2> 1,190,655 1,359,000
50,000 Noble
International, Ltd. 1,000,800 1,140,000
75,000 Tempur-Pedic
International Inc.*<F2> 1,120,001 1,162,500
40,000 Tyco
International Ltd. 1,037,926 1,060,000
------------ ------------
11,168,002 9,349,400
OIL & GAS EXPLORATION/PRODUCTION -- 3.3%
30,000 Ashland Inc. 1,087,473 1,321,800
140,000 Brigham
Exploration Co.*<F2> 866,530 1,124,060
150,000 KCS Energy, Inc.*<F2> 1,258,624 1,582,500
20,000 Murphy Oil Corp. 1,132,206 1,306,200
------------ ------------
4,344,833 5,334,560
OILFIELD PRODUCTS/SERVICES -- 5.4%
75,000 Grant Prideco, Inc.*<F2> 1,593,380 976,500
600,000 Grey Wolf, Inc.*<F2> 3,887,199 2,244,000
50,000 Maverick Tube Corp.*<F2> 918,443 962,500
50,000 Patterson-UTI
Energy, Inc.*<F2> 2,013,748 1,646,000
110,000 Universal Compression
Holdings, Inc.*<F2> 3,613,692 2,877,600
------------ ------------
12,026,462 8,706,600
PUBLISHING -- 0.1%
6,445 News Corp. Ltd. -
SP-ADR*<F2> 186,260 194,961
RETAILING -- 4.2%
45,000 America's
Car-Mart, Inc.*<F2> 1,084,650 1,211,400
30,000 Dollar Tree
Stores, Inc.*<F2> 1,123,242 901,800
50,000 Pep Boys-Manny,
Moe & Jack 1,043,580 1,143,500
400,000 Rite Aid Corp.*<F2> 3,075,398 2,416,000
30,000 The Sports
Authority, Inc.*<F2> 1,267,646 1,152,000
------------ ------------
7,594,516 6,824,700
SEMICONDUCTORS/RELATED -- 6.3%
65,000 Amkor
Technology, Inc.*<F2> 1,069,965 1,183,650
40,000 ATMI, Inc.*<F2> 1,283,210 925,600
175,000 ChipMOS
TECHNOLOGIES
LTD.*<F2> 1,300,206 1,643,250
400,000 Dialog Semiconductor
PLC - ADR*<F2> 1,015,650 1,740,000
70,000 Fairchild
Semiconductor
International, Inc.*<F2> 2,586,540 1,747,900
200,000 Genus, Inc.*<F2> 1,227,569 1,200,000
70,000 Kulicke and Soffa
Industries, Inc.*<F2> 905,924 1,006,600
15,000 OmniVision
Technologies, Inc.*<F2> 983,730 828,750
------------ ------------
10,372,794 10,275,750
SOFTWARE & RELATED SERVICES -- 9.2%
150,000 Aladdin Knowledge
Systems 908,614 1,339,500
110,000 Authentidate
Holding Corp.*<F2> 1,505,437 1,309,000
400,000 Bitstream Inc.*<F2> 2,926,970 1,228,000
80,000 Carreker Corp.*<F2> 949,184 1,120,800
135,000 CyberGuard Corp.*<F2> 859,845 1,177,200
100,000 Evolving
Systems, Inc.*<F2> 1,450,166 1,330,000
90,000 ILOG S.A. SP-ADR*<F2> 1,240,203 1,107,000
75,000 Internet Security
Systems, Inc.*<F2> 1,078,808 1,412,250
359,000 Level 8
Systems, Inc.*<F2> 2,289,090 118,470
300,000 Novell, Inc.*<F2> 1,043,380 3,156,000
340,000 TeleCommunication
Systems, Inc.*<F2> 1,309,375 1,679,600
------------ ------------
15,561,072 14,977,820
TEXTILES -- 1.0%
100,000 Quaker Fabric Corp. 1,110,777 950,000
106,400 Unifi, Inc.*<F2> 1,360,972 686,280
------------ ------------
2,471,749 1,636,280
TOBACCO -- 0.7%
40,000 British American
Tobacco PLC -
SP-ADR 977,448 1,106,800
TRANSPORTATION -- 3.2%
90,000 Celadon Group, Inc.*<F2> 1,094,401 1,278,000
100,000 Mesa Air Group, Inc.*<F2> 1,123,025 1,252,000
25,000 Ryanair Holdings
PLC -- SP-ADR*<F2> 1,184,550 1,266,000
75,000 Tsakos Energy
Navigation Ltd. 1,153,730 1,383,750
------------ ------------
4,555,706 5,179,750
------------ ------------
Total common
stocks 145,511,288 152,970,745
REITS -- 1.6% (A)<F3>
60,000 Friedman, Billings,
Ramsey Group, Inc. 1,066,100 1,384,800
75,000 Gladstone
Commercial Corp. 1,125,000 1,263,750
------------ ------------
Total REITS 2,191,100 2,648,550
------------ ------------
Total long-term
investments 147,702,388 155,619,295
SHORT-TERM INVESTMENTS -- 4.1% (A)<F3>
VARIABLE RATE DEMAND NOTE
$6,568,557 U.S. Bank, N.A. 6,568,557 6,568,557
------------ ------------
Total investments $154,270,945 162,187,852
------------
------------
Cash and
receivables, less
liabilities -- 0.1% (A)<F3> 226,810
------------
NET ASSETS $162,414,662
------------
------------
Net Asset Value Per Share
(No par value, unlimited
shares authorized), offering
and redemption price
($162,414,662 / 6,222,533
shares outstanding) $ 26.10
------------
------------
*<F2> Non-income producing security.
(a)<F3> Percentages for the various classifications relate to net assets.
The accompanying notes to financial statements are an integral part of this
statement.
THE HENLOPEN FUND
STATEMENT OF OPERATIONS
For the Period Ending December 31, 2003 (Unaudited)
INCOME:
Dividends $ 144,236
Interest 17,274
-----------
Total income 161,510
-----------
EXPENSES:
Investment management fees 564,262
Transfer agent fees 94,605
Administrative services 61,812
Printing and postage expense 23,144
Professional fees 22,841
Custodian fees 17,212
Board of Trustees fees 16,500
Registration fees 14,610
Insurance expense 10,666
Other expenses 1,687
-----------
Total expenses 827,339
-----------
NET INVESTMENT LOSS (665,829)
-----------
NET REALIZED GAIN ON INVESTMENTS 15,927,509
NET INCREASE IN UNREALIZED APPRECIATION ON INVESTMENTS 21,803,726
-----------
NET GAIN ON INVESTMENTS 37,731,235
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $37,065,406
-----------
-----------
The accompanying notes to financial statements are an integral part of this
statement.
THE HENLOPEN FUND
STATEMENTS OF CHANGES IN NET ASSETS
For the Period Ending December 31, 2003 (Unaudited) and for the Year Ended
June 30, 2003
DECEMBER 31, 2003 JUNE 30, 2003
----------------- -------------
OPERATIONS:
Net investment loss $ (665,829) $ (780,808)
Net realized gain (loss) on investments 15,927,509 (29,514,180)
Net increase in unrealized appreciation on investments 21,803,726 34,345,585
------------ ------------
Net increase in net assets resulting from operations 37,065,406 4,050,597
------------ ------------
FUND SHARE ACTIVITIES:
Proceeds from shares issued (2,418,555 and 4,106,479 shares, respectively) 58,749,575 61,986,610
Cost of shares redeemed (495,608 and 5,484,134 shares, respectively) (11,369,937) (83,494,575)
Redemption fee 12,518 97,954
------------ ------------
Net increase (decrease) in net assets derived from Fund share activities 47,392,156 (21,410,011)
------------ ------------
TOTAL INCREASE (DECREASE) 84,457,562 (17,359,414)
NET ASSETS AT THE BEGINNING OF THE PERIOD 77,957,100 95,316,514
------------ ------------
NET ASSETS AT THE END OF THE PERIOD $162,414,662 $ 77,957,100
------------ ------------
------------ ------------
FINANCIAL HIGHLIGHTS
(Selected data for each share of the Fund outstanding throughout each period)
(UNAUDITED)
FOR THE FOR THE YEARS ENDED JUNE 30,
PERIOD ENDING ------------------------------------------------------
DECEMBER 31, 2003 2003 2002 2001 2000 1999
----------------- ---- ---- ---- ---- ----
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 18.13 $ 16.79 $ 19.15 $ 28.39 $ 19.84 $ 17.04
Income from investment operations:
Net investment loss (a)<F4> (0.14) (0.16) (0.18) (0.16) (0.25) (0.11)
Net realized and unrealized
gains (losses) on investments 8.11 1.50 (2.14) (7.85) 10.18 2.91
------- ------- ------- ------- ------- -------
Total from investment operations 7.97 1.34 (2.32) (8.01) 9.93 2.80
Less distributions:
Dividend from net investment income -- -- -- -- -- --
Distributions from net realized gains -- -- (0.04) (1.23) (1.38) --
------- ------- ------- ------- ------- -------
Total from distributions -- -- (0.04) (1.23) (1.38) --
------- ------- ------- ------- ------- -------
Net asset value, end of period $ 26.10 $ 18.13 $ 16.79 $ 19.15 $ 28.39 $ 19.84
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
TOTAL INVESTMENT RETURN 43.96%*<F5> 7.98% (12.11)% (27.96)% 53.71% 16.43%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's $) 162,415 77,957 95,317 150,872 240,106 63,009
Ratio of expenses to average net assets 1.47%**<F6> 1.58% 1.39% 1.28% 1.37% 1.46%
Ratio of net investment loss
to average net assets (1.18)%**<F6> (1.04)% (0.98)% (0.74)% (0.97)% (0.63)%
Portfolio turnover rate 79.25% 90.06% 132.21% 287.66% 156.85% 162.11%
(a)<F4> Net investment loss per share is calculated using average shares
outstanding.
*<F5> Not annualized.
**<F6> Annualized.
The accompanying notes to financial statements are an integral part of these
statements.
THE HENLOPEN FUND
NOTES TO FINANCIAL STATEMENTS
December 31, 2003 (Unaudited)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES --
The following is a summary of significant accounting policies of The
Henlopen Fund (the "Fund"), which is organized as a Delaware Business Trust
and is registered as a diversified open-end management company under the
Investment Company Act of 1940, as amended. The Fund commenced operations
on December 2, 1992. The investment objective of the Fund is long-term
capital appreciation.
(a) Each security, excluding short-term investments, is valued at the
last sale price reported by the principal security exchange on which
the issue is traded, securities that are traded on the Nasdaq National
Market or the Nasdaq Smallcap Market are valued at the Nasdaq Official
Closing Price, or if no sale is reported, the latest bid price.
Securities which are traded over-the-counter are valued at the latest
bid price. Securities for which quotations are not readily available
are valued at fair value as determined by the investment adviser under
the supervision of the Board of Trustees. Short-term investments with
maturities of 60 days or less are valued at cost which approximates
market value. For financial reporting purposes, investment transactions
are recorded on trade date.
(b) Net realized gains and losses on sales of securities are computed
on the identified cost basis.
(c) Dividend income is recorded on the ex-dividend date. Interest
income is recorded on the accrual basis.
(d) The Fund has investments in short-term variable rate demand notes,
which are unsecured instruments. The Fund may be susceptible to credit
risk with respect to these notes to the extent the issuer defaults on
its payment obligation. The Fund's policy is to monitor the
creditworthiness of the issuer and nonperformance by these
counterparties is not anticipated.
(e) Accounting principles generally accepted in the United States of
America ("GAAP") require that permanent differences between income for
financial reporting and tax purposes be reclassified in the capital
accounts.
(f) The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from these estimates.
(g) Provision has not been made for Federal income taxes since the
Fund has elected to be taxed as a "regulated investment company" and
intends to distribute substantially all net investment company taxable
income and net capital gains to its shareholders and otherwise comply
with the provisions of the Internal Revenue Code applicable to
regulated investment companies.
(h) The Fund imposes a 1% redemption fee on the value of shares
redeemed less than 30 days after purchase. The redemption fee will not
apply to shares purchased through reinvested distributions (dividends
and capital gains), shares held in retirement plans or through the
systematic withdrawal plan. The redemption fee is designed to
discourage short-term trading and any proceeds of the fee will be
credited to paid in capital.
(2) INVESTMENT ADVISER AND MANAGEMENT AGREEMENT AND TRANSACTIONS WITH RELATED
PARTIES --
The Fund has a management agreement with Landis Associates LLC (the
"Adviser"), with whom certain officers and trustees of the Fund are
affiliated, to serve as investment adviser and manager. Under the terms of
the agreement, the Fund will pay the Adviser a monthly management fee at
the annual rate of 1% on the daily net assets of the Fund.
The Fund has an administrative agreement with Fiduciary Management, Inc.
("FMI"), with whom an officer of the Fund is affiliated, to supervise all
aspects of the Fund's operations except those performed by the Adviser.
Under the terms of the agreement, the Fund will pay FMI a monthly
administrative fee at the annual rate of 0.2% on the first $30,000,000 of
the daily net assets of the Fund, 0.1% on the daily net assets of the Fund
on the next $30,000,000 and 0.05% on the daily net assets of the Fund over
$60,000,000.
(3) DISTRIBUTION TO SHAREHOLDERS --
Net investment income and net realized gains, if any, are distributed to
shareholders at least annually.
(4) INVESTMENT TRANSACTIONS --
For the period ending December 31, 2003, purchases and proceeds of sales of
investment securities (excluding short-term securities) were $129,410,323
and $87,568,032, respectively.THE HENLOPEN FUND
(5) ACCOUNTS PAYABLE AND ACCRUED LIABILITIES --
As of December 31, 2003, liabilities of the Fund included the following:
Payable to brokers for investments purchased $ 3,701,731
Payable to the Adviser for management fees 107,757
Payable to FMIfor administrative fees 14,837
Payable to shareholders for redemptions 33,980
Other liabilities 25,329
(6) SOURCES OF NET ASSETS --
As of December 31, 2003, the sources of net assets were as follows:
Fund shares issued and outstanding $174,129,130
Net unrealized appreciation on investments 7,916,907
Accumulated net realized loss (19,631,375)
------------
$162,414,662
------------
------------
(7) INCOME TAX INFORMATION --
The following information for the Fund is presented on an income tax basis
as of December 31, 2003:
GROSS GROSS NET UNREALIZED
COST OF UNREALIZED UNREALIZED APPRECIATION
INVESTMENTS APPRECIATION DEPRECIATION ON INVESTMENTS
----------- ------------ ------------ --------------
$154,279,451 $29,542,203 $21,633,802 $7,908,401
The following information for the Fund is presented on an income tax basis
as of June 30, 2003:
GROSS GROSS NET UNREALIZED DISTRIBUTABLE DISTRIBUTABLE
COST OF UNREALIZED UNREALIZED DEPRECIATION ORDINARY LONG-TERM
INVESTMENTS APPRECIATION DEPRECIATION ON INVESTMENTS INCOME CAPITAL GAINS
----------- ------------ ------------ -------------- ------------- -------------
$93,073,466 $13,327,800 $27,223,125 $13,895,325 $ -- $ --
The difference, if any, between the cost amount for financial statement and
federal income tax purposes is due primarily to timing differences in
recognizing certain gains and losses in security transactions.
The tax components of dividends paid during the year ended June 30, 2003,
capital loss carryovers (expiring in 2011), as of June 30, 2003, and tax
basis post-October losses as of June 30, 2003, which are not recognized for
tax purposes until the first day of the following fiscal year are:
ORDINARY LONG -TERM NET CAPITAL
INCOME CAPITAL GAINS LOSS POST-OCTOBER
DISTRIBUTIONS DISTRIBUTIONS CARRYOVERS LOSSES
------------- ------------- ----------- ------------
$ -- $ -- $20,918,990 $14,631,388
Since there were no ordinary distributions paid for the year ended June 30,
2003, there were no distributions designated as qualifying for the
dividends received deduction for corporate shareholders.
THE HENLOPEN FUND
TRUSTEES AND OFFICERS
# of Portfolios Other
Term of in Fund Directorships
Position(s) Office and Complex held by
Held with Length of Principal Occupation(s) Overseen Trustee
Name, Address and Age the Fund Time Served During Past Five Years by Trustee or Officer
- --------------------- ----------- ----------- ----------------------- --------------- -------------
"DISINTERESTED PERSONS" OF THE FUND
Howard E. Cosgrove Trustee Indefinite, Retired; prior to August 1, 2000 1 Chairman
c/o Conectiv, Inc. Trustee since Chairman and Chief Executive Officer of the
800 King Street 2002 of Conectiv, Inc., a regulated power Board of
Wilmington, DE 19899 delivery and electric product/energy NRG
Age: 60 merchant company. Energy, Inc.
Robert J. Fahey, Jr. Trustee Indefinite, Senior Director of Real Estate 1 None
1717 Arch Street, 30th Floor Trustee since Investment Banking for the Financial
Philadelphia, PA 19103 1992 Services Group of Cushman &
Age: 45 Wakefield, a commercial real estate firm.
John H. Remer Trustee Indefinite, Retired. 1 None
c/o Landis Associates LLC Trustee since
Longwood Corporate 2002
Center South, Suite 213
415 McFarlan Road
Kennett Square, PA 19348
Age: 79
"INTERESTED PERSONS" OF THE FUND*<F7>
Michael L. Hershey Trustee Indefinite, Chairman, President, Treasurer and 1 None
Longwood Corporate Trustee since Secretary of Landis Associates LLC.
Center South, Suite 213 1992
415 McFarlan Road President One year term,
Kennett Square, PA 19348 President since
Age: 65 1992
Stephen L. Hershey, M.D. Trustee Indefinite, Orthopaedic surgeon. 1 None
4745 Stanton-Ogleton Road Trustee since
Suite 225 1992
Newark, DE 19713
Age: 63
Bruce V. Vogenitz, C.F.A. Vice-President One year term, Vice President of Landis Associates N/A None
Longwood Corporate and Secretary Vice President LLC.
Center South, Suite 213 and Secretary
415 McFarlan Road since 1998
Kennett Square, PA 19348
Age: 38
Camille F. Wildes Vice-President/ One year term, Vice President of Fiduciary N/A None
c/o Fiduciary Compliance Vice President/ Management,Inc.
Management, Inc. Officer and Compliance Officer
225 East Mason Street Treasurer since 1994 and
Milwaukee, WI 53202 Treasurer since 2001
Age: 51
*<F7> Messrs. Michael L. Hershey and Vogenitz are "interested persons" of the
Fund because they are officers of the Fund and the Adviser. Dr. Stephen
L. Hershey is an "interested person" of the Fund because he is the
brother of Mr. Michael L. Hershey. Ms. Wildes is an "interested person"
of the Fund because she is an officer of the Fund.
For additional information about the Trustees and Officers, please call (866)
880-0032 and request a Statement of Additional Information. One will be mailed
to you free of charge.
LANDIS ASSOCIATES LLC
Investment Adviser
U.S. BANCORP FUND SERVICES, LLC
Transfer Agent and
Dividend Disbursing Agent
U.S. BANK, N.A.
Custodian
PRICEWATERHOUSECOOPERS LLP
Independent Auditors
FOLEY & LARDNER
Legal Counsel
THE HENLOPEN FUND
LONGWOOD CORPORATE CENTER SOUTH
415 MCFARLAN ROAD, SUITE 213
KENNETT SQUARE, PENNSYLVANIA 19348
(610-925-0400)
WWW.HENLOPENFUND.COM
This report is not authorized for use as an offer of sale or a solicitation of
an offer to buy shares of The Henlopen Fund unless accompanied or preceded by
the Fund's current prospectus.
ITEM 2. CODE OF ETHICS.
- -----------------------
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
- ----------------------------------------
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
- -----------------------------------------------
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
- ----------------------------------------------
Not applicable.
ITEM 6. [RESERVED]
- ------------------
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
- -------------------------------------------------------------------------
MANAGEMENT INVESTMENT COMPANIES
- -------------------------------
Not applicable.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
- --------------------------------------------------------------------------
COMPANY AND AFFILIATED PURCHASERS.
- ----------------------------------
Not applicable.
ITEM 9. CONTROLS AND PROCEDURES.
- --------------------------------
(a) The disclosure controls and procedures of The Henlopen Fund are
periodically evaluated. As of February 20, 2004, the date of the last
evaluation, we concluded that our disclosure controls and procedures are
adequate.
(b) The internal controls of The Henlopen Fund are periodically evaluated.
Since, February 20, 2004, the date of the last evaluation, there have been
no significant changes in The Henlopen Fund's internal controls or in other
factors that could have had a significant effect on such controls. There
have also been no significant deficiencies or material weaknesses
identified since the last evaluation that required any corrective action.
ITEM 10. EXHIBITS.
- -----------------
(a) Any code of ethics or amendment thereto. Not applicable.
(b) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Filed herewith.
(c) Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Filed herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
The Henlopen Fund
-----------------
Registrant
By /s/ Michael L. Hershey
-----------------------------------------------
Michael L. Hershey, Principal Executive Officer
Date March 9, 2004
----------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
The Henlopen Fund
-----------------
Registrant
By /s/ Michael L. Hershey
-----------------------------------------------
Michael L. Hershey, Principal Financial Officer
Date March 9, 2004
----------------------------------