N-CSRS 1 t303370.txt 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 811-07582 --------- THE VALIANT FUND -------------------------------------------- (Exact name of registrant as specified in charter) 221 PENSACOLA BOULEVARD, VENICE, FL, 34285 --------------------------------------------------- (Address of principal executive offices) (Zip code) Denis R. Curcio 221 PENSACOLA BOULEVARD, VENICE, FL, 34285 ------------------------------------------ (Name and address of agent for service) Registrant's telephone number, including area code: 800-242-9340 ------------ Date of fiscal year end: 8/31/07 -------- Date of reporting period: 2/28/07 -------- Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507. ITEM 1. REPORTS TO STOCKHOLDERS. THE VALIANT FUND SEMI-ANNUAL REPORT FEBRUARY 28, 2007 THE VALIANT FUND Semi-Annual Report - February 28, 2007 Table of Contents Page -------------------------------------------------- ----------------------------- Fees and Expenses Table 1 U.S. TREASURY MONEY MARKET PORTFOLIO Schedule of Portfolio Investments 3 Statement of Assets and Liabilities 4 Statement of Operations 4 Statements of Changes in Net Assets 5 Financial Highlights 6 -------------------------------------------------- ----------------------------- GENERAL MONEY MARKET PORTFOLIO Schedule of Portfolio Investments 8 Statement of Assets and Liabilities 11 Statement of Operations 11 Statements of Changes in Net Assets 12 Financial Highlights 13 -------------------------------------------------- ----------------------------- TAX-EXEMPT MONEY MARKET PORTFOLIO Schedule of Portfolio Investments 15 Statement of Assets and Liabilities 18 Statement of Operations 18 Statements of Changes in Net Assets 19 Financial Highlights 20 -------------------------------------------------- ----------------------------- Notes to Financial Statements 21 Management of the Trust 28 -------------------------------------------------- ----------------------------- FEES AND EXPENSES (unaudited) As a shareholder of the Valiant Fund, you incur advisory fees and distribution (12b-1) fees. All other Fund expenses are paid by the advisor. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held through the six months ended February 28, 2007. ACTUAL EXPENSES The first line for each share class in the following tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading "Expenses Paid During the Six-Month Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second line for each share class in the following tables provides information about hypothetical account values and hypothetical expenses based on the Porfolios' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolios' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the tables are meant to highlight your ongoing costs only, and do not reflect any transactional costs such as sales charges (loads). Therefore the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
---------------------------------------------------------------------------------------------------------------- Beginning Ending Annualized Account Account Expense Ratio Expenses Paid Value Value Based on the During the 09/01/06 02/28/07 Six-Month Period Six-Month Period* ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- U.S. TREASURY MONEY MARKET PORTFOLIO - CLASS A Actual $1,000.00 $1,025.28 0.20% $1.00 Hypothetical (5% return before expenses) $1,000.00 $1,023.80 0.20% $1.00 ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- U.S. TREASURY MONEY MARKET PORTFOLIO - CLASS B Actual $1,000.00 $1,024.02 0.45% $2.26 Hypothetical (5% return before expenses) $1,000.00 $1,022.56 0.45% $2.26 ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- U.S. TREASURY MONEY MARKET PORTFOLIO - CLASS D Actual $1,000.00 $1,022.76 0.70% $3.51 Hypothetical (5% return before expenses) $1,000.00 $1,021.32 0.70% $3.51 ---------------------------------------------------------------------------------------------------------------- -1- ---------------------------------------------------------------------------------------------------------------- U.S. TREASURY MONEY MARKET PORTFOLIO - CLASS E Actual $1,000.00 $1,021.24 1.00% $5.01 Hypothetical (5% return before expenses) $1,000.00 $1,019.84 1.00% $5.01 ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- GENERAL MONEY MARKET PORTFOLIO - CLASS A Actual $1,000.00 $1,031.18 0.20% $1.01 Hypothetical (5% return before expenses) $1,000.00 $1,023.80 0.20% $1.00 ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- GENERAL MONEY MARKET PORTFOLIO - CLASS B Actual $1,000.00 $1,032.92 0.45% $2.27 Hypothetical (5% return before expenses) $1,000.00 $1,022.56 0.45% $2.26 ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- GENERAL MONEY MARKET PORTFOLIO - CLASS D Actual $1,000.00 $1,023.22 0.70% $3.51 Hypothetical (5% return before expenses) $1,000.00 $1,021.32 0.70% $3.51 ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- GENERAL MONEY MARKET PORTFOLIO - CLASS E Actual $1,000.00 $1,021.71 1.00% $5.01 Hypothetical (5% return before expenses) $1,000.00 $1,019.84 1.00% $5.01 ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- TAX-EXEMPT MONEY MARKET PORTFOLIO - CLASS A Actual $1,000.00 $1,016.94 0.20% $1.00 Hypothetical (5% return before expenses) $1,000.00 $1,023.80 0.20% $1.00 ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- TAX-EXEMPT MONEY MARKET PORTFOLIO - CLASS B Actual $1,000.00 $1,015.68 0.45% $2.25 Hypothetical (5% return before expenses) $1,000.00 $1,022.56 0.45% $2.26 ----------------------------------------------------------------------------------------------------------------
* Expenses for each Portfolio are calculated using the portfolio's annualized expense ratio for each fund, which represents the ongoing expenses as a percentage of net assets for the six-months ended 02/28/07. Expenses are calculated by multiplying the annualized expense ratio by the average account value for the period; then multiplying the result by the number of days in the most recent fiscal half-year; and then dividing that result by the number of days in the calendar year. Expense ratios for the most recent fiscal half-year may differ from expense ratios based on the one-year data in the financial highlights. -2-
THE VALIANT FUND U.S. TREASURY MONEY MARKET PORTFOLIO Schedule of Portfolio Investments February 28, 2007 (unaudited) MATURITY PRINCIPAL RATE DATE AMOUNT VALUE ------- ------- ------------ ------------ U.S. TREASURY OBLIGATIONS - 57.3% U.S. Treasury Bill (a) - 40.5% 4.920% 3/1/07 $ 60,000,000 $ 60,000,000 ------------ U.S. Treasury Note - 16.8% 3.125 5/15/07 25,000,000 24,909,278 ------------ ------------ Total U.S. TREASURY OBLIGATIONS (Amortized Cost $84,909,278) 84,909,278 ------------ REPURCHASE AGREEMENTS - 42.5% Bank of America, Inc., 5.30%, due 03/01/07, with a maturity value of $18,002,650 (Collateralized by various 4.485% - 5.5% GNMA bonds valued at $18,360,000 with maturity dates 6/20/19 - 5/16/33) 18,000,000 18,000,000 Citigroup, Inc., 5.29%, due 03/01/07, with a maturity value of $15,002,204 (Collateralized by various 5.0% - 7.5% GNMA bonds valued at $15,300,000 with maturity dates 12/20/30 - 10/15/36) 15,000,000 15,000,000 Goldman Sachs Inc., 5.30%, due 03/01/07, with a maturity value of $15,002,208 (Collateralized by various 0.53% - 4.828% GNMA bonds valued at $15,300,001 with maturity dates 3/16/23 - 8/16/34) 15,000,000 15,000,000 UBS Paine Webber, 5.31%, due 03/01/07, with a maturity value of $15,002,213 (Collateralized by various 5.5% - 6.5% GNMA bonds valued at $15,300,151 with maturity dates 3/20/29 - 1/15/37) 15,000,000 15,000,000 ------------ Total REPURCHASE AGREEMENTS (Amortized Cost $63,000,000) 63,000,000 ------------ Total Investments (Amortized Cost $147,909,278) (b) - 99.8% 147,909,278 Other Assets less Liabilities - 0.2% 356,275 ------------ TOTAL NET ASSETS - 100% $148,265,553 ============ (a) Interest rate represents yield to maturity at purchase. (b) Cost and value for federal income tax and financial reporting purposes are the same. GNMA - Government National Mortgage Association Valiant U.S. Treasury Money Market Portfolio U.S. Treasury Obligations 57.3% Repurchase Agreements 42.5 ------ 99.8 Other Assets less Liabilities - (0.2%) 0.2 ------ 100.0% ====== The accompanying notes are an integral part of these financial statements.
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THE VALIANT FUND U.S. TREASURY MONEY MARKET PORTFOLIO -------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES -------------------------------------------------------------------------------- FEBRUARY 28, 2007 (UNAUDITED) ASSETS: Investments at value (amortized cost $84,909,278) $ 84,909,278 Repurchase agreements (amortized cost $63,000,000) 63,000,000 ------------- Total investments 147,909,278 Cash 624,979 Receivables: Interest 238,039 Other assets 2,136 ------------- TOTAL ASSETS 148,774,432 LIABILITIES: Payables: Dividends $ 419,300 Accrued expenses and other liabilities: Investment manager 23,708 Distribution and shareholder servicing 65,871 ------------- TOTAL LIABILITIES 508,879 ------------- NET ASSETS $ 148,265,553 ============= COMPOSITION OF NET ASSETS: Capital $ 148,515,995 Accumulated net realized loss from investment transactions (250,442) ------------- NET ASSETS $ 148,265,553 ============= Class A Shares Net assets $ 2,148,587 Shares outstanding (unlimited number of shares authorized with no par value) 2,152,318 Net Asset Value, Offering Price and Redemption Price per share $ 1.00 ============= Class B Shares Net assets $ 33,111,094 Shares outstanding (unlimited number of shares authorized with no par value) 33,166,858 Net Asset Value, Offering Price and Redemption Price per share $ 1.00 ============= Class D Shares Net assets $ 74,740,821 Shares outstanding (unlimited number of shares authorized with no par value) 74,866,748 Net Asset Value, Offering Price and Redemption Price per share $ 1.00 ============= Class E Shares Net assets $ 38,265,051 Shares outstanding (unlimited number of shares authorized with no par value) 38,330,076 Net Asset Value, Offering Price and Redemption Price per share $ 1.00 ============= -------------------------------------------------------------------------------- STATEMENT OF OPERATIONS -------------------------------------------------------------------------------- FOR THE SIX MONTHS ENDED FEBRUARY 28, 2007 (UNAUDITED) INVESTMENT INCOME: Interest $ 4,689,537 ----------- TOTAL INVESTMENT INCOME 4,689,537 EXPENSES: Investment manager $ 178,554 Distribution and shareholder servicing: Class A Shares 4,205 Class B Shares 65,321 Class D Shares 190,168 Class E Shares 251,032 Trustees fees 4,468 ----------- Total expenses before contractual fee reimbursements 693,748 Contractual fee reimbursements (27,336) ----------- NET EXPENSES 666,412 ----------- NET INVESTMENT INCOME 4,023,125 ----------- NET REALIZED GAIN FROM INVESTMENT TRANSACTIONS -- ----------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 4,023,125 =========== The accompanying notes are an integral part of these financial statements.
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THE VALIANT FUND U.S. Treasury Money Market Portfolio -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS -------------------------------------------------------------------------------- INVESTMENT ACTIVITIES: OPERATIONS: Net investment income $ 4,023,125 $ 7,991,886 Net realized gain from investment transactions -- 1,215 ------------- ------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 4,023,125 7,993,101 ------------- ------------- DIVIDENDS: Net investment income: Class A Shares (60,702) (54,812) Class B Shares (896,448) (2,596,109) Class D Shares (1,731,413) (4,026,258) Class E Shares (1,334,562) (1,314,707) ------------- ------------- TOTAL DIVIDENDS TO SHAREHOLDERS (4,023,125) (7,991,886) ------------- ------------- DECREASE IN NET ASSETS FROM CAPITAL TRANSACTIONS (NOTE 4) (57,053,316) (29,647,057) ------------- ------------- NET DECREASE IN NET ASSETS (57,053,316) (29,645,842) NET ASSETS: Beginning of period 205,318,869 234,964,711 ------------- ------------- End of period (including accumulated undistributed net investment income of $0 and $0, respectively.) $ 148,265,553 $ 205,318,869 ============= ============= The accompanying notes are an integral part of these financial statements.
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THE VALIANT FUND U.S. TREASURY MONEY MARKET PORTFOLIO -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS, CLASS A SHARES -------------------------------------------------------------------------------- FOR THE SIX MONTHS ENDED FOR THE YEARS ENDED AUGUST 31, FEBRUARY 28, 2007 -------------------------------------------------------------------- (UNAUDITED) 2006 2005 2004 2003 2002 ---------- ---------- ---------- -------- ---------- ---------- NET ASSET VALUE, BEGINNING OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 ---------- ---------- ---------- -------- ---------- ---------- INVESTMENT ACTIVITIES Net investment income 0.025 0.043 0.023 0.009 0.012 0.021 ---------- ---------- ---------- -------- ---------- ---------- DIVIDENDS Net investment income (0.025) (0.043) (0.023) (0.009) (0.012) (0.021) ---------- ---------- ---------- -------- ---------- ---------- NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 ========== ========== ========== ======== ========== ========== TOTAL RETURN (A) 4.99% 4.34% 2.31% 0.92% 1.22% 2.05% RATIOS/SUPPLEMENTARY DATA: Net Assets at end of period (000) $ 2,149 $ 1,531 $ 1,186 $ 339 $ 7,159 $ 7,260 Ratio of expenses to average net assets, before contractual fee waivers and/or expense reimbursements 0.55%(b) 0.55% 0.55% 0.55% 0.55% 0.55% Ratio of expenses to average net assets 0.20%(b) 0.20% 0.20% 0.20% 0.20% 0.20% Ratio of net investment income to average net assets 5.05%(b) 4.23% 2.58% 0.87% 1.21% 2.12% -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS, CLASS B SHARES -------------------------------------------------------------------------------- FOR THE SIX MONTHS ENDED FOR THE YEARS ENDED AUGUST 31, FEBRUARY 28, 2007 ------------------------------------------------------------------------ (UNAUDITED) 2006 2005 2004 2003 2002 ----------- ----------- ----------- ----------- ------------ ------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 ----------- ----------- ----------- ----------- ------------ ------------ INVESTMENT ACTIVITIES Net investment income $ 0.024 $ 0.040 0.020 0.007 0.010 0.018 ----------- ----------- ----------- ----------- ------------ ------------ DIVIDENDS Net investment income $ (0.024) $ (0.040) (0.020) (0.007) (0.010) (0.018) ----------- ----------- ----------- ----------- ------------ ------------ NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 =========== =========== =========== =========== ============ ============ TOTAL RETURN (A) 4.73% 4.08% 2.06% 0.67% 0.96% 1.80% RATIOS/SUPPLEMENTARY DATA: Net Assets at end of period (000) $ 33,111 $ 48,667 $ 85,223 $ 89,633 $ 126,617 $ 146,246 Ratio of expenses to average net assets, before contractual fee waivers and/or expense reimbursements 0.55%(b) 0.55% 0.55% 0.55% 0.55% 0.55% Ratio of expenses to average net assets 0.45%(b) 0.45% 0.45% 0.45% 0.45% 0.45% Ratio of net investment income to average net assets 4.80%(b) 3.94% 2.05% 0.65% 0.95% 1.77% (a) Total return is calculated assuming a purchase of shares on the first day and a sale on the last day of each period reported and includes reinvestment of dividends. (b) Annualized. The accompanying notes are an integral part of these financial statements.
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THE VALIANT FUND U.S. TREASURY MONEY MARKET PORTFOLIO -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS, CLASS D SHARES -------------------------------------------------------------------------------- FOR THE SIX MONTHS ENDED FOR THE YEARS ENDED AUGUST 31, FEBRUARY 28, 2007 ------------------------------------------------------------------------ (UNAUDITED) 2006 2005 2004 2003 2002 ----------- ----------- ------------ ------------ ------------ ------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 ----------- ----------- ------------ ------------ ------------ ------------ INVESTMENT ACTIVITIES Net investment income $ 0.023 $ 0.038 0.018 0.004 0.008 0.015 ----------- ----------- ------------ ------------ ------------ ------------ DIVIDENDS Net investment income $ (0.023) $ (0.038) (0.018) (0.004) (0.008) (0.015) ----------- ----------- ------------ ------------ ------------ ------------ NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 =========== =========== ============ ============ ============ ============ TOTAL RETURN (A) 4.47% 3.82% 1.80% 0.42% 0.71% 1.54% RATIOS/SUPPLEMENTARY DATA: Net Assets at end of period (000) $ 74,741 $ 83,743 $ 132,938 $ 197,640 $ 286,191 $ 325,896 Ratio of expenses to average net assets, before contractual fee waivers and/or expense reimbursements 0.70%(b) 0.70% 0.70% 0.70% 0.70% 0.70% Ratio of expenses to average net assets 0.70%(b) 0.70% 0.70% 0.70% 0.70% 0.70% Ratio of net investment income to average net assets 4.55%(b) 3.72% 1.70% 0.41% 0.71% 1.54% -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS, CLASS E SHARES -------------------------------------------------------------------------------- FOR THE SIX MONTHS ENDED FOR THE YEARS ENDED AUGUST 31, FEBRUARY 28, 2007 ----------------------------------------------------------------------- (UNAUDITED) 2006 2005 2004 2003 2002 ----------- ----------- ------------ ------------ ------------ ------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 ----------- ----------- ------------ ------------ ------------ ------------ INVESTMENT ACTIVITIES Net investment income $ 0.021 $ 0.035 0.015 0.001 0.005 0.013 ----------- ----------- ------------ ------------ ------------ ------------ DIVIDENDS Net investment income $ (0.021) $ (0.035) (0.015) (0.001) (0.005) (0.013) ----------- ----------- ------------ ------------ ------------ ------------ NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 =========== =========== ============ ============ ============ ============ TOTAL RETURN (A) 4.16% 3.52% 1.50% 0.12% 0.41% 1.24% RATIOS/SUPPLEMENTARY DATA: Net Assets at end of period (000) $ 38,265 $ 71,378 $ 15,617 $ 14,903 $ 28,437 $ 105,257 Ratio of expenses to average net assets, before contractual fee waivers and/or expense reimbursements 1.00%(b) 1.00% 1.00% 1.00% 1.00% 1.00% Ratio of expenses to average net assets 1.00%(b) 1.00% 1.00% 1.00% 1.00% 1.00% Ratio of net investment income to average net assets 4.25%(b) 3.82% 1.55% 0.10% 0.48% 1.32% (a) Total return is calculated assuming a purchase of shares on the first day and a sale on the last day of each period reported and includes reinvestment of dividends. (b) Annualized. The accompanying notes are an integral part of these financial statements.
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THE VALIANT FUND GENERAL MONEY MARKET PORTFOLIO Schedule of Portfolio Investments February 28, 2007 (unaudited) MATURITY PRINCIPAL RATE DATE AMOUNT VALUE ------ -------- ------------ ----------- COMMERCIAL PAPER - 34.2% Commercial Banks - 4.5% Anglo Irish Bank Corp. 5.26% 04/11/07 $ 20,000,000 $ 19,880,303 ------------ EDUCATION - 1.2% Tennessee School Board Authority 5.33 03/14/07 5,388,000 5,388,000 ------------ INDUSTRIES - 2.5% Walnut Energy Center Authority 5.25 05/15/07 10,800,000 10,681,875 ------------ SPECIAL PURPOSE ENTITY - 22.8% Chesham Finance 5.25 04/10/07 20,000,000 19,883,222 Market Street Funding 5.28 03/19/07 20,000,000 19,947,200 Sheffield Receivables Corp. 5.26 03/22/07 20,000,000 19,938,633 Three Rivers Funding Corp. 5.26 03/22/07 20,000,000 19,938,634 Windmill Funding Corp. 5.26 03/06/07 20,000,000 19,985,389 ------------ 99,693,078 ------------ US MUNICIPALS - 3.2% Catholic Health Initiatives 5.35 03/14/07 14,000,000 14,000,000 ------------ TOTAL COMMERCIAL PAPER (AMORTIZED COST $149,643,256) 149,643,256 ------------ CORPORATE OBLIGATIONS* - 14.9% FINANCIAL SERVICES - 6.9% Bank of America 5.32 03/01/07 10,000,000 10,000,000 Merrill Lynch & Co. 5.29 03/14/07 10,000,000 10,000,000 Royal Bank of Canada 5.40 11/09/07 10,000,000 10,000,000 Vista Funding 5.64 03/01/07 400,000 400,000 ------------ 30,400,000 ------------ FOOD - 0.1% Jacksons Food Stores, Inc. 5.37 03/01/07 498,000 498,000 ------------ HEALTH SERVICES - 1.0% Gastroenterology Associates, LLC 5.32 03/01/07 2,105,000 2,105,000 Louisiana Endoscopy 5.32 03/01/07 1,380,000 1,380,000 Riverview Medical Office Building 5.36 03/01/07 700,000 700,000 ------------ 4,185,000 ------------ LEISURE - 0.7% Commonwealth Country Club, Ltd. 5.36 03/01/07 3,000,000 3,000,000 ------------ REAL ESTATE - 1.6% 208 Associates LLC 5.37 03/01/07 765,000 765,000 Aztec Properties LLC 5.34 03/01/07 1,893,000 1,893,000 CMW Real Estate LLC 5.36 03/01/07 2,090,000 2,090,000 El Dorado Enterprises of Miami FL 5.44 03/01/07 110,000 110,000 G & J Properties II 5.37 03/01/07 850,000 850,000 Ordeal Properties LLC 5.37 03/01/07 1,210,000 1,210,000 ------------ 6,918,000 ------------ The accompanying notes are an integral part of these financial statements. -8- THE VALIANT FUND GENERAL MONEY MARKET PORTFOLIO Schedule of Portfolio Investments February 28, 2007 (unaudited) MATURITY PRINCIPAL RATE DATE AMOUNT VALUE ------ -------- ------------ ----------- SPECIAL PURPOSE ENTITY - 4.6% Barry-Wehmiller Group 5.37% 03/01/07 $ 990,000 $ 990,000 Best One Tire & Service 5.37 03/01/07 800,000 800,000 Butler County, Surgical Properties 5.37 03/01/07 1,310,000 1,310,000 Chuo Mubea Suspe Chuomuo 5.37 03/01/07 275,000 275,000 Denver LLC 5.64 03/01/07 360,000 360,000 Exal Corp. 5.37 03/01/07 1,195,000 1,195,000 FE LLC 5.35 03/01/07 850,000 850,000 GCG Portage LLC 5.42 03/01/07 1,125,000 1,125,000 GMC Financing, LLC 5.32 03/01/07 2,615,000 2,615,000 ISO Building LLC 5.37 03/01/07 800,000 800,000 K. C. Jordan & Associates 5.37 03/01/07 700,000 700,000 MMR Development Co. 5.37 03/01/07 1,050,000 1,050,000 Physicians Center LP 5.32 03/01/07 3,010,000 3,010,000 Taylor Steel, Inc. 5.37 03/01/07 1,885,000 1,885,000 Village Enterprises 5.37 03/01/07 970,000 970,000 Wellington Green LLC 5.37 03/01/07 2,060,000 2,060,000 ------------ 19,995,000 ------------ TOTAL CORPORATE OBLIGATIONS (Amortized Cost $64,996,000) 64,996,000 ------------ CERTIFICATE OF DEPOSIT - 24.0% BANKING - 24.0% CALYON Bank 5.43 06/04/07 10,000,000 10,000,125 Citibank 5.32 03/20/07 20,000,000 20,000,000 Credit Industrial 5.33 07/16/07 20,000,000 20,000,000 First Tennessee Bank 5.31 04/09/07 15,000,000 15,000,000 Svenska Handelsbanken 5.37 10/26/07 10,000,000 9,998,426 Wells Fargo 5.25 04/20/07 10,000,000 10,000,000 Wilmington Trust 5.32 06/12/07 20,000,000 20,000,000 ------------ TOTAL CERTIFICATE OF DEPOSIT (Amortized Cost $104,998,551) 104,998,551 ------------ MUNICIPAL NOTES AND BONDS* - 3.6% ILLINOIS - 1.3% Cook County Illinois School District 5.40 12/01/07 1,000,000 1,000,000 Upper Illinois River Valley Development Authority 5.32 03/01/07 4,595,000 4,595,000 ------------ 5,595,000 ------------ MICHIGAN - 0.6% Michigan City Industrial Economic Development Revenue 5.37 03/01/07 1,205,000 1,205,000 Michigan Public Education Facilities Authority Revenue 5.70 08/31/07 1,630,000 1,630,000 ------------ 2,835,000 ------------ NEW YORK - 1.0% Baird Properties LLC 5.39 03/01/07 1,725,000 1,725,000 IHA Capital Development Corp. 5.37 03/01/07 1,500,000 1,500,000 New York City NY Individual Development Agycivic Facility Revenue 5.31 03/01/07 1,435,000 1,435,000 ------------ 4,660,000 ------------ OHIO - 0.6% Hopkins Waterhouse LLC 5.36 03/01/07 740,000 740,000 Mercer County, HealthCare Facilities 5.37 03/02/07 1,825,000 1,825,000 ------------ 2,565,000 ------------ VIRGINIA - 0.1% Ashland Industrial Development Authority 5.54 03/01/07 290,000 290,000 ------------ ------------ TOTAL MUNICIPAL NOTES AND BONDS (Amortized Cost $15,945,000) 15,945,000 ------------ The accompanying notes are an integral part of these financial statements. -9- THE VALIANT FUND GENERAL MONEY MARKET PORTFOLIO Schedule of Portfolio Investments February 28, 2007 (unaudited) MATURITY PRINCIPAL RATE DATE AMOUNT VALUE ------ -------- ------------ ----------- TIME DEPOSIT - 4.6% Rabo Bank 5.32% 03/01/07 $ 20,000,000 $ 20,000,000 ------------ Total TIME DEPOSIT (Amortized Cost $20,000,000) 20,000,000 ------------ REPURCHASE AGREEMENT - 18.6% Bank of America, Inc., 5.30%, due 03/01/07, with a maturity value of $81,411,984. (Collateralized by various 0.88% - 5.57% GNMA bonds valued at $83,028,001 with maturity dates 6/20/18 - 7/16/40) 81,400,000 81,400,000 ------------ Total REPURCHASE AGREEMENTS (Amortized Cost $81,400,000) 81,400,000 ------------ Total Investments (Amortized Cost $436,982,807) (a) - 99.9% 436,982,807 Other Assets less Liabilities - 0.1% 653,887 ------------ TOTAL NET ASSETS - 100% $437,636,694 ============ ------------ * Variable rate investment. Securities payable on demand at par including accrued interest (usually within seven days notice) and unconditionally secured as to principal and interest by letters of credit or other credit support agreements from major banks. The interest rates are adjustable and are based on bank prime rates or other interest rate adjustment indices. The rate shown represents the rate in effect at February 28, 2007. Maturity date shown reflects next rate change date. (a) The cost of investments for federal income tax purposes at February 28, 2007 is $436,983,474. GNMA - Government National Mortgage Association LLC - Limited Liability Corporation LP - Limited Partnership VALIANT GENERAL MONEY MARKET PORTFOLIO Commercial Paper 34.2% Corporate Obligations 14.9 Certificate of Deposit 24.0 Municipal Notes and Bonds 3.6 Time Deposit 4.6 Repurchase Agreement 18.6 ------ 99.9 Other Assets less Liabilities 0.1 ------ 100.0% ====== The accompanying notes are an integral part of these financial statements.
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THE VALIANT FUND GENERAL MONEY MARKET PORTFOLIO -------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES -------------------------------------------------------------------------------- FEBRUARY 28, 2007 (UNAUDITED) ASSETS: Investments, at value (amortized cost $355,582,807) $ 355,582,807 Repurchase agreements (amortized cost $81,400,000) 81,400,000 ------------- Total investments 436,982,807 Cash 55,318 Receivables: Interest 2,272,840 Other assets 101 ------------- TOTAL ASSETS 439,311,066 LIABILITIES: Payables: Dividends $ 1,563,740 Accrued expenses and other liabilities: Investment manager 62,383 Distribution and shareholder servicing 48,249 ------------- TOTAL LIABILITIES 1,674,372 ------------- NET ASSETS $ 437,636,694 ============= COMPOSITION OF NET ASSETS: Capital $ 437,690,250 Accumulated net realized loss from investment transactions (53,556) ------------- NET ASSETS $ 437,636,694 ============= Class A Shares Net assets $ 334,878,337 Shares outstanding (unlimited number of shares authorized with no par value) 334,936,249 Net Asset Value, Offering Price and Redemption Price per share $ 1.00 ============= Class B Shares Net assets $ 1,310,675 Shares outstanding (unlimited number of shares authorized with no par value) 1,310,929 Net Asset Value, Offering Price and Redemption Price per share $ 1.00 ============= Class D Shares Net assets $ 65,049,289 Shares outstanding (unlimited number of shares authorized with no par value) 65,061,513 Net Asset Value, Offering Price and Redemption Price per share $ 1.00 ============= Class E Shares Net assets $ 36,398,393 Shares outstanding (unlimited number of shares authorized with no par value) 36,410,827 Net Asset Value, Offering Price and Redemption Price per share $ 1.00 ============= -------------------------------------------------------------------------------- STATEMENT OF OPERATIONS -------------------------------------------------------------------------------- FOR THE SIX MONTHS ENDED FEBRUARY 28, 2007 (UNAUDITED) INVESTMENT INCOME: Interest $ 11,485,723 ------------ TOTAL INVESTMENT INCOME 11,485,723 EXPENSES: Investment manager $ 430,332 Distribution and shareholder servicing: Class A Shares 568,805 Class B Shares 1,998 Class D Shares 166,096 Class E Shares 150,881 Trustees fees 11,955 ------------ Total expenses before contractual fee reimbursements 1,330,067 Contractual fee waivers and expense reimbursements (581,331) ------------ NET EXPENSES 748,736 ------------ NET INVESTMENT INCOME 10,736,987 ------------ NET REALIZED GAIN FROM INVESTMENT TRANSACTIONS 286 ------------ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 10,737,273 ============ The accompanying notes are an integral part of these financial statements.
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THE VALIANT FUND GENERAL MONEY MARKET PORTFOLIO -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS -------------------------------------------------------------------------------- FOR THE FOR THE SIX MONTHS ENDED YEAR ENDED FEBRUARY 28, 2007 AUGUST 31, 2006 ----------------- --------------- INVESTMENT ACTIVITIES: OPERATIONS: Net investment income $ 10,736,987 $ 20,210,907 Net realized gain/(loss) from investment transactions 286 (667) ------------- ------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 10,737,273 20,210,240 ------------- ------------- DIVIDENDS: Net investment income: Class A Shares (8,349,749) (16,401,785) Class B Shares (27,900) (3,947) Class D Shares (1,540,906) (2,533,211) Class E Shares (818,432) (1,271,964) ------------- ------------- TOTAL DIVIDENDS TO SHAREHOLDERS (10,736,987) (20,210,907) ------------- ------------- INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL TRANSACTIONS (NOTE 4) 15,897,114 58,348,826 ------------- ------------- ------------- ------------- NET INCREASE (DECREASE) IN NET ASSETS 15,897,400 58,348,159 NET ASSETS: Beginning of year 421,739,294 369,391,135 ------------- ------------- ------------- ------------- End of year (including accumulated undistributed net investment income of $0 and $0, respectively) $ 437,636,694 $ 421,739,294 ============= ============= The accompanying notes are an integral part of these financial statements.
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THE VALIANT FUND GENERAL MONEY MARKET PORTFOLIO -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS, CLASS A SHARES -------------------------------------------------------------------------------- FOR THE SIX MONTHS ENDED FOR THE YEARS ENDED AUGUST 31, FEBRUARY 28, 2007 ----------------------------------------------------------------------- (UNAUDITED) 2006 2005 2004 2003 2002 ------------ ----------- ------------ ------------ ------------ ------------ Net Asset Value, Beginning of Year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 ------------ ------------ ------------ ------------ ------------ ------------ Investment Activities Net investment income $ 0.025 $ 0.044 0.024 0.010 0.013 0.022 ------------ ------------ ------------ ------------ ------------ ------------ Dividends Net investment income $ (0.025) $ (0.044) (0.024) (0.010) (0.013) (0.022) ------------ ------------ ------------ ------------ ------------ ------------ Net Asset Value, End of Year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 ============ ============ ============ ============ ============ ============ Total Return (a) 5.09% 4.45% 2.42% 1.01% 1.29% 2.24% Ratios/Supplementary Data: Net Assets at end of period (000) $ 334,878 $ 317,711 $ 273,911 $ 256,923 $ 364,392 $ 357,676 Ratio of expenses to average net assets, before contractual fee waivers and/or expense reimbursements 0.55%(b) 0.55% 0.55% 0.55% 0.55% 0.55% Ratio of expenses to average net assets 0.20%(b) 0.20% 0.20% 0.20% 0.20% 0.20% Ratio of net investment income to average net assets 5.14%(b) 4.46% 2.40% 0.99% 1.28% 2.22% -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS, CLASS B SHARES -------------------------------------------------------------------------------- FOR THE SIX MONTHS ENDED FOR THE YEARS ENDED AUGUST 31, FEBRUARY 28, 2007 ----------------------------------------------------------------------- (UNAUDITED) 2006 2005 2004 2003 2002 ------------ ----------- ------------ ------------ ------------ ------------ Financial Highlights, Class B Shares Net Asset Value, Beginning of Year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 ------------ ------------ ------------ ------------ ------------ ------------ Investment Activities Net investment income $ 0.024 $ 0.041 0.021 0.008 0.010 0.019 ------------ ------------ ------------ ------------ ------------ ------------ Dividends Net investment income $ (0.024) $ (0.041) (0.021) (0.008) (0.010) (0.019) ------------ ------------ ------------ ------------ ------------ ------------ Net Asset Value, End of Year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 ============ ============ ============ ============ ============ ============ Total Return (a) 4.83% 4.22% 2.16% 0.76% 1.04% 1.98% Ratios/Supplementary Data: Net Assets at end of period (000) $ 1,311 $ 98 $ 103 $ 5,064 $ 10,620 $ 15,719 Ratio of expenses to average net assets, before contractual fee waivers and/or expense reimbursements 0.55%(b) 0.55% 0.55% 0.50% 0.55% 0.55% Ratio of expenses to average net assets 0.45%(b) 0.45% 0.45% 0.45% 0.45% 0.45% Ratio of net investment income to average net assets 4.89%(b) 4.12% 1.53% 0.74% 1.03% 1.91% (a) Total return is calculated assuming a purchase of shares on the first day and a sale on the last day of each period reported and includes reinvestment of dividends. (b) Annualized. The accompanying notes are an integral part of these financial statements.
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THE VALIANT FUND GENERAL MONEY MARKET PORTFOLIO -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS, CLASS D SHARES -------------------------------------------------------------------------------- FOR THE SIX MONTHS ENDED FOR THE YEARS ENDED AUGUST 31, FEBRUARY 28, 2007 ----------------------------------------------------------------------- (UNAUDITED) 2006 2005 2004 2003 2002 ------------ ----------- ------------ ------------ ------------ ------------ Net Asset Value, Beginning of Year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 ------------ ------------ ------------ ------------ ------------ ---------- Investment Activities Net investment income $ 0.023 $ 0.039 0.019 0.005 0.007 0.016 ------------ ------------ ------------ ------------ ------------ Dividends Net investment income $ (0.023) $ (0.039) (0.019) (0.005) (0.007) (0.016) ------------ ------------ ------------ ------------ ------------ ------------ Net Asset Value, End of Year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 ============ ============ ============ ============ ============ ============ Total Return (a) 4.57% 3.96% 1.91% 0.50% 0.79% 1.73% Ratios/Supplementary Data: Net Assets at end of period (000) $ 65,049 $ 65,177 $ 53,722 $ 59,116 $ 74,943 $ 40,662 Ratio of expenses to average net assets, before contractual fee waivers and/or expense reimbursements 0.70%(b) 0.70% 0.70% 0.70% 0.70% 0.70% Ratio of expenses to average net assets 0.70%(b) 0.70% 0.70% 0.70% 0.70% 0.70% Ratio of net investment income to average net assets 4.64%(b) 3.95% 1.87% 0.50% 0.73% 1.55% -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS, CLASS E SHARES -------------------------------------------------------------------------------- FOR THE SIX MONTHS ENDED FOR THE YEARS ENDED AUGUST 31, FEBRUARY 28, 2007 ----------------------------------------------------------------------- (UNAUDITED) 2006 2005 2004 2003 2002 ------------ ----------- ------------ ------------ ------------ ------------ Net Asset Value, Beginning of Year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 ------------ ------------ ------------ ------------ ------------ Investment Activities Net investment income $ 0.022 $ 0.036 0.016 0.002 0.005 0.014 Dividends Net investment income $ (0.022) $ (0.036) (0.016) (0.002) (0.005) (0.014) ------------ ------------ ------------ ------------ ------------ Net Asset Value, End of Year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 ============ ============ ============ ============ ============ Total Return (a) 4.26% 3.65% 1.61% 0.20% 0.49% 1.42% Ratios/Supplementary Data: Net Assets at end of period (000) $ 36,399 $ 38,753 $ 35,655 $ 47,050 $ 58,005 $ 83,742 Ratio of expenses to average net assets, before contractual fee waivers and/or expense reimbursements 1.00%(b) 1.00% 1.00% 1.00% 1.00% 1.00% Ratio of expenses to average net assets 1.00%(b) 1.00% 1.00% 1.00% 1.00% 1.00% Ratio of net investment income to average net assets 4.34%(b) 3.61% 1.54% 0.20% 0.51% 1.45% (a) Total return is calculated assuming a purchase of shares on the first day and a sale on the last day of each period reported and includes reinvestment of dividends. (b) Annualized. The accompanying notes are an integral part of these financial statements.
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THE VALIANT FUND TAX-EXEMPT MONEY MARKET PORTFOLIO Schedule of Portfolio Investments February 28, 2007 (unaudited) MATURITY PRINCIPAL RATE DATE AMOUNT VALUE ------ -------- ------------ ------------ COMMERCIAL PAPER -6.3% FLORIDA - 6.3% Jacksonville Health Facilities Authority Hospital 3.60% 04/09/07 $ 5,000,000 $ 5,000,000 Sarasota County Public Hospital, LOC Suntrust Bank 3.52 03/06/07 4,050,000 4,050,000 ------------ TOTAL COMMERCIAL PAPER (Amortized Cost $9,050,000) 9,050,000 ------------ MUNICIPAL BONDS AND NOTES - 9.5% Ohio - 2.2% Adams County Local School District Anticipatory Notes 4.40 05/15/07 3,150,000 3,154,804 ------------ PENNSYLVANIA -5.3% Delaware County 3.63 06/13/07 7,625,000 7,625,000 ------------ WISCONSIN - 2.0% St. Francis School District Anticipatory Notes 3.75 11/01/07 2,800,000 2,801,807 ------------ TOTAL MUNICIPAL BONDS AND NOTES (AMORTIZED COST $13,581,611) 13,581,611 ------------ VARIABLE MUNICIPAL BONDS* - 83.8% ALABAMA - 3.9% Birmingham Alabama Special Care Facilities Authority Revenues 3.68 03/01/07 2,500,000 2,500,000 Jefferson County Public Park and Recreation Board Revenue 3.69 03/01/07 2,000,000 2,000,000 Montgomery Individual Development Board of Pollution Control and Solid Waste Disposal 3.63 03/01/07 1,000,000 1,000,000 ------------ 5,500,000 ------------ CONNECTICUt - 4.7% Connecticut State Health and Educational Facilities Authority Revenue 3.62 03/01/07 5,155,000 5,155,000 Connecticut State Special Tax Obligation Revenue, Series 1 3.53 03/07/07 1,500,000 1,500,000 ------------ 6,655,000 ------------ FLORIDA - 36.0% ABN AMRO Munitops Certificates of Trust 3.69 03/01/07 3,650,000 3,650,000 ABN AMRO Munitops Certificates of Trust, 144A 3.69 03/01/07 3,500,000 3,500,000 Dade County Individual Development Authority, Series B 3.39 03/07/07 1,000,000 1,000,000 Dade County Water and Sewer Systems Revenue 3.51 03/07/07 2,500,000 2,500,000 Florida Housing Finance Corp., Multi - Family Revenue, Charleston, Series I-A 3.66 03/01/07 6,750,000 6,750,000 Florida State Board of Education 3.70 03/01/07 5,955,000 5,955,000 Florida State Municipal Power Agency Revenue, Stanton Project 3.52 03/07/07 1,000,000 1,000,000 Halifax Hospital Medical Center, Health Care Facilities Revenue 3.52 03/07/07 1,200,000 1,200,000 Jacksonville Economic Development Commission Health Care Facilities Revenue, Series A LOC Fortis Banque Belgium, JP Morgan Chase Bank 3.68 03/01/07 2,000,000 2,000,000 Lee County Industrial Development Authority Healthcare Facility 3.69 03/02/07 2,740,000 2,740,000 Marion County Hospital District Revenue 3.54 03/07/07 5,275,000 5,275,000 Orange County HFA Multifamily Revenue, Series E 3.54 03/07/07 1,800,000 1,800,000 Orange County Industrial Development Authority, IDR, LOC U.S. Bank Trust N.A. 4.00 04/01/07 1,325,000 1,325,000 Pinellas County Health Facilities Authority Revenue 3.70 03/01/07 1,910,000 1,910,000 Polk County School Board COP, Series A 3.64 03/01/07 2,000,000 2,000,000 Port Orange Revenue, Palmer College Project, LOC Lasalle Bank N.A. 3.66 03/01/07 4,500,000 4,500,000 Tampa Health Care Facilities Revenue, Lifelink Foundation, Inc. Project 3.66 03/07/07 1,400,000 1,400,000 Volusia County Educational Facility Authority Revenue 3.71 03/01/07 3,145,000 3,145,000 ------------ 51,650,000 ------------ The accompanying notes are an integral part of these financial statements. -15- THE VALIANT FUND TAX-EXEMPT MONEY MARKET PORTFOLIO Schedule of Portfolio Investments February 28, 2007 (unaudited) MATURITY PRINCIPAL RATE DATE AMOUNT VALUE ------ -------- ------------ ------------ GEORGIA - 2.9% De Kalb County Housing Authority Multifamily Housing Revenue 3.57% 03/07/07 $ 4,200,000 $ 4,200,000 ------------ ILLINOIS - 3.2% Channahon Revenue, Series B 3.67 03/01/07 2,000,000 2,000,000 Illinois State Series B 3.53 03/07/07 2,500,000 2,500,000 ------------ 4,500,000 ------------ KENTUCKY - 3.3% Jeffersontown Lease Program Revenue 3.64 03/07/07 1,370,000 1,370,000 Morehead League of Cities Funding Trust, Lease Program Revenue, Series A 3.69 03/02/07 1,400,000 1,400,000 Richmond League of Cities Funding Trusts, Lease Program Revenue, Series A 3.69 03/02/07 2,000,000 2,000,000 ------------ 4,770,000 ------------ LOUISIANA - 8.1% East Baton Rouge Parish La Pollution Control Revenue 3.61 03/01/07 6,750,000 6,750,000 Plaquemines Port La Harbor & Terminal District Port Facilities Revenue 3.85 08/31/07 4,895,000 4,895,000 ------------ 11,645,000 ------------ MISSOURI - 1.3% Missouri St. Health And Educational Facilities Authority Health Facilities Revenue 3.66 03/01/07 1,900,000 1,900,000 ------------ NORTH CAROLINA - 4.1% Mecklenburg County Partnership 3.60 03/01/07 2,000,000 2,000,000 University of North Carolina Revenues, Series B 3.50 03/07/07 3,895,000 3,895,000 ------------ 5,895,000 ------------ NEBRASKA - 2.4% Creighton University Educational Finance Authority Revenue 3.63 03/01/07 2,100,000 2,100,000 Nebraska Educational Finance Authority Revenue 3.64 03/01/07 1,375,000 1,375,000 ------------ 3,475,000 ------------ NEW YORK - 2.7% New York City Transitional Finance Authority 3.60 03/01/07 3,900,000 3,900,000 ------------ PUERTO RICO - 1.1% Puerto Rico Individual, Medical & Environmental Pollution Control Facilities Financing Authority 3.55 03/01/07 1,500,000 1,500,000 ------------ TEXAS - 4.8% Harris County Health Facilities Development Corporation Special Facilities Revenue 3.64 03/01/07 1,900,000 1,900,000 North Central Texas Health Facilities Development Corporation Revenue 3.63 03/01/07 1,000,000 1,000,000 Richardson Independent School District 3.66 03/01/07 1,500,000 1,500,000 Texas Transportation Common Revenue, Series B 3.52 03/07/07 2,500,000 2,500,000 ------------ 6,900,000 ------------ UTAH - 0.7% Emery County Pollution Control Revenue 3.64 03/01/07 1,050,000 1,050,000 ------------ The accompanying notes are an integral part of these financial statements. -16- THE VALIANT FUND TAX-EXEMPT MONEY MARKET PORTFOLIO Schedule of Portfolio Investments February 28, 2007 (unaudited) MATURITY PRINCIPAL RATE DATE AMOUNT VALUE ------ -------- ------------ ------------ VIRGINIA - 3.2% Loudoun County Development Authority Revenue 3.65% 03/01/07 $ 3,000,000 $ 3,000,000 Loudoun County Development Authority Revenue 3.63 03/01/07 1,620,000 1,620,000 ------------ 4,620,000 ------------ WASHINGTON - 1.4% King County Putters-Series 1184 3.70 03/01/07 1,995,000 1,995,000 ------------ TOTAL VARIABLE MUNICIPAL BONDS (AMORTIZED COST $120,155,000) 120,155,000 ------------ TOTAL INVESTMENTS (AMORTIZED COST $142,786,611) (a) - 99.6% 142,786,611 OTHER ASSETS LESS LIABILITIES - 0.4% 610,453 ------------ TOTAL NET ASSETS - 100% $143,397,064 ============ * Variable rate investment. Securities payable on demand at par including accrued interest (usually within seven days notice) and unconditionally secured as to principal and interest by letters of credit or other credit support agreements from major banks. The interest rates are adjustable and are based on bank prime rates or other interest rate adjustment indices. The rate shown represents the rate in effect at February 28, 2007. The maturity date shown reflects next rate change date. Series 144A securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may not be resold subject to that rule except to qualified institutional buyers. Unless otherwise noted, Series 144A securities are deemed to be liquid. (a) Cost and value for federal income tax and financial reporting purposes are the same. COP - Certificates of Participation HFA - Housing Finance Authority IDR - Industrial Development Revenue LOC - Letter of Credit TAN - Tax Anticipation Note Valiant Tax-Exempt Money Market Portfolio Commercial Paper 6.3 % Municipal Bonds and Notes 9.5 Variable Municipal Notes 83.8 ----- 99.6 Other Assets less Liabilities 0.4 ----- 100.0% ===== The accompanying notes are an integral part of these financial statements.
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THE VALIANT FUND TAX-EXEMPT MONEY MARKET PORTFOLIO -------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES -------------------------------------------------------------------------------- FEBRUARY 28, 2007 (UNAUDITED) ASSETS: Investments, at value (amortized cost $142,786,611) $ 142,786,611 Cash 200,941 Receivables: Interest 836,348 Other assets 280 ------------- TOTAL ASSETS 143,824,180 ------------- LIABILITIES: Payables: Dividends $ 402,070 Accrued expenses and other liabilities: Investment manager 24,066 Distribution and shareholder servicing 980 ------------- TOTAL LIABILITIES 427,116 ------------- NET ASSETS $ 143,397,064 ============= COMPOSITION OF NET ASSETS: Capital $ 143,441,939 Accumulated net realized loss from investment transactions (44,875) ------------- NET ASSETS $ 143,397,064 ============= Class A Shares Net Assets $ 140,800,668 Shares outstanding (unlimited number of shares authorized with no par value) 140,936,307 Net Asset Value, Offering Price and Redemption Price per share $ 1.00 ============= Class B Shares Net Assets $ 2,596,396 Shares outstanding (unlimited number of shares authorized with no par value) 2,602,573 Net Asset Value, Offering Price and Redemption Price per share $ 1.00 ============= -------------------------------------------------------------------------------- STATEMENT OF OPERATIONS -------------------------------------------------------------------------------- FOR THE SIX MONTHS ENDED FEBRUARY 28, 2007 (UNAUDITED) INVESTMENT INCOME: Interest $ 2,616,097 ----------- Total Investment Income 2,616,097 Expenses: Investment manager $ 145,640 Distribution and shareholder servicing: Class A Shares 250,919 Class B Shares 3,951 Trustees fees 3,578 ----------- Total expenses before contractual fee reimbursements $ 404,088 Contractual fee waivers and expense reimbursements (255,626) ----------- Net Expenses 148,462 ----------- Net Investment Income 2,467,635 ----------- Net realized gain from investment transactions -- ----------- Net increase in net assets resulting from operations $ 2,467,635 =========== The Valiant Fund Tax-Exempt Money Market Portfolio Statements of Changes in Net Assets The accompanying notes are an integral part of these financial statements.
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THE VALIANT FUND TAX-EXEMPT MONEY MARKET PORTFOLIO -------------------------------------------------------------------------------- STATEMENT OF CHANGES IN NET ASSETS -------------------------------------------------------------------------------- FOR THE SIX FOR THE SIX MONTHS ENDED MONTHS ENDED FEBRUARY 28, AUGUST 31, 2007 2006 ------------- ------------- INVESTMENT ACTIVITIES: OPERATIONS: Net investment income $ 2,467,635 $ 5,228,446 Net realized gain from investment transactions -- -- ------------- ------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 2,467,635 5,228,446 ------------- ------------- DIVIDENDS: Net investment income: Class A Shares (2,432,220) (5,128,154) Class B Shares (35,415) (100,292) ------------- ------------- TOTAL DIVIDENDS TO SHAREHOLDERS (2,467,635) (5,228,446) ------------- ------------- INCREASE IN NET ASSETS FROM CAPITAL TRANSACTIONS (NOTE 4) (19,587,960) 15,411,588 ------------- ------------- NET INCREASE IN NET ASSETS (19,587,960) 15,411,588 NET ASSETS: Beginning of year 162,985,024 147,573,436 ------------- ------------- End of year (including accumulated undistributed net investment income of $0 and $0, respectively) $ 143,397,064 $ 162,985,024 ============= ============= The accompanying notes are an integral part of these financial statements.
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THE VALIANT FUND TAX-EXEMPT MONEY MARKET PORTFOLIO -------------------------------------------------------------------------------- FINACIAL HIGHLIGHTS, CLASS A SHARES -------------------------------------------------------------------------------- FOR THE SIX MONTHS ENDED FOR THE YEARS ENDED AUGUST 31, FEBRUARY 28, 2007 ------------------------------------------------------------------------ (unaudited) 2006 2005 2004 2003 2002 ------------ ------------ ------------ ------------ ------------ ------------ Net Asset Value, Beginning of Year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 ------------ ------------ ------------ ------------ ------------ ------------ Investment Activities Net investment income $ 0.017 $ 0.029 0.018 0.008 0.014 0.015 ------------ ------------ ------------ ------------ ------------ ------------ Dividends Net investment income $ (0.017) $ (0.029) (0.018) (0.008) (0.014) (0.015) ------------ ------------ ------------ ------------ ------------ ------------ Net Asset Value, End of Year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 ============ ============ ============ ============ ============ ============ Total Return (a) 3.36% 2.99% 1.79% 0.83% 1.03% 1.49% Ratios/Supplementary Data: Net Assets at end of period (000) $ 140,801 $ 160,332 $ 143,821 $ 123,388 $ 142,519 $ 174,104 Ratio of expenses to average net assets, before contractual fee waivers and/or expense reimbursements 0.55%(c) 0.55% 0.55% 0.55% 0.55% 0.55% Ratio of expenses to average net assets 0.20%(c) 0.20% 0.20% 0.20% 0.20% 0.20% Ratio of net investment income to average net assets 3.39%(c) 2.96% 1.80% 0.83% 1.02% 1.47% -------------------------------------------------------------------------------- FINACIAL HIGHLIGHTS, CLASS B SHARES -------------------------------------------------------------------------------- FOR THE FOR THE YEARS ENDED FOR THE PERIOD SIX MONTHS ENDED ---------------------------- FEBRUARY 25, 3004(b) FEBRUARY 28, 2007 AUGUST 31, AUGUST 31, AUGUST 31, (unaudited) 2006 2005 TO 2004 ------------ --------------------------- ------------ Net Asset Value, Beginning of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 ------------ ------------ ------------ ------------ Investment Activities Net investment income 0.016 0.027 0.015 0.003 Dividends Net investment income (0.016) (0.027) (0.015) (0.003) ------------- ------------ ------------ ------------ Net Asset Value, End of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 ============ ============ ============ ============ Total Return (a) 3.10% 2.73% 1.54% 0.31% Ratios/Supplementary Data: Net Assets at end of period (000) $ 2,596 $ 2,653 $ 3,752 $ 14,200 Ratio of expenses to average net assets, before contractual fee waivers and/or expense reimbursements 0.55%(c) 0.55% 0.55% 0.55%(c) Ratio of expenses to average net assets 0.45%(c) 0.45% 0.45% 0.45%(c) Ratio of net investment income to average net assets 3.14%(c) 2.68% 1.39% 0.60%(c) (a) Total return is calculated assuming a purchase of shares on the first day and a sale on the last day of each period reported and includes reinvestment of dividends. Total returns for periods less than one full year are not annualized. (b) Commencement of share class. (c) Annualized. The accompanying notes are an integral part of these financial statements.
-20- THE VALIANT FUND NOTES TO FINANCIAL STATEMENTS FEBRUARY 28, 2007 (UNAUDITED) 1. ORGANIZATION: The U.S. Treasury Money Market Portfolio, General Money Market Portfolio, Tax-Exempt Money Market Portfolio, and U.S. Treasury Income Portfolio are separate portfolios of The Valiant Fund. The Valiant Fund (the "Trust") is a Massachusetts business trust, organized on January 29, 1993 and is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Trust is authorized to offer five classes of shares: Class A, Class B, Class C (has not commenced operations), Class D and Class E. The five classes are identical, except as to the services offered to, and the expenses borne, by each class. This report covers U.S. Treasury Money Market Portfolio, General Money Market Portfolio, and Tax-Exempt Money Market Portfolio (referred to individually as a "Portfolio" and collectively as the "Portfolios") for the six months ending February 28, 2007. A separate report is issued for the U.S. Treasury Income Portfolio for the six months ending February 28, 2007. The Portfolios invest primarily in money market instruments maturing in 13 months or less. 2. SIGNIFICANT ACCOUNTING POLICIES: The following is a summary of significant accounting policies followed by the Portfolios in the preparation of their financial statements. The policies are in conformity with generally accepted accounting principles in the United States of America. The preparation of financial statements 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 increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. SECURITY VALUATION: Each Portfolio values its investments on the basis of amortized cost, which involves valuing an instrument at its cost and thereafter assuming a constant accretion to maturity of any discount or amortization to maturity of any premium. The amortized cost value of an instrument may be higher or lower than the price a Portfolio would receive if it sold the instrument. As permitted under Rule 2a-7 of the 1940 Act, and certain conditions therein, securities of the Portfolios are valued initially at cost and thereafter assume a constant amortization to maturity of any discount or premium. SECURITIES TRANSACTIONS AND RELATED INCOME: Securities transactions are recorded on trade date. Security gains and losses are calculated on the identified cost basis. Interest income is recognized on the accrual basis and includes, where applicable, the amortization or accretion of a premium or a discount. REPURCHASE AGREEMENTS: Each Portfolio may enter into repurchase agreements with an entity whose creditworthiness has been reviewed and found satisfactory by the Portfolios' Sub-Advisor, Reich & Tang Asset Management L.P. (Reich & Tang). The repurchase price generally equals the price paid by a Portfolio plus interest negotiated on the basis of current short-term rates, which may be more or less than the rate on the underlying portfolio securities. The seller, under a repurchase agreement, is required to maintain the appropriate collateral levels held pursuant to the agreement, with a market value equal to or greater than the repurchase price (including accrued interest). Collateral subject to repurchase agreements is held by the Portfolios' custodian, either physically or in book entry form. If the seller defaults and the fair value of the collateral declines, realization of the collateral by the Portfolios may be delayed or limited. -21- THE VALIANT FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2007 (UNAUDITED) EXPENSE ALLOCATION: Expenses directly attributable to a Portfolio are charged to that Portfolio. Trust expenses are allocated proportionately among each Portfolio within the Trust in relation to the net assets of each Portfolio. Expenses specific to a class are charged to that class. DIVIDENDS TO SHAREHOLDERS: The Portfolios declare all net investment income daily as dividends to their shareholders and distribute such dividends monthly. Additional dividends are also paid to the Portfolios' shareholders to the extent necessary to avoid the federal excise tax on certain undistributed income and net realized gains of registered investment companies. Dividends are recorded on the ex-dividend date. The amount of dividends from net investment income and net realized gains are determined in accordance with U.S. income tax regulations, which may differ from the U.S. generally accepted accounting principles. These "book/tax" differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified among the components of net assets (See Note 7). Temporary differences do not require reclassification. FEDERAL TAXES: Each Portfolio is a separate taxable entity for federal tax purposes. Each Portfolio has qualified and intends to qualify each year as a "regulated investment company" under Subchapter M of the Internal Revenue Code, as amended, and distribute substantially all of its taxable net investment income and net realized gains, if any, to their shareholders. Accordingly, no provision for federal income tax is required. 3. RELATED PARTY TRANSACTIONS: INVESTMENT ADVISER: Integrity Management & Research, Inc. (the "Manager"), a wholly-owned subsidiary of Integrity Investments, Inc., serves as the Investment Adviser to the Trust. The Manager provides day-to-day investment advisory services to each Portfolio. Reich & Tang serves as Sub-Adviser to Portfolio and, subject to the supervision of the Trustees and of the Manager, directs the investments of each Portfolio in accordance with its investment objective, policies and limitations. The Manager, subject to the general supervision of the Board and in accordance with the investment objective, policies and restrictions of each Portfolio, also provides the Portfolios with ongoing investment guidance, policy direction and monitoring of the Sub-Adviser pursuant to a sub-advisory agreement. The Trust pays the Manager a fee, computed daily and paid monthly, at the annual rate of 0.20% of the average daily net assets of each Portfolio. For the six months ending February 28, 2007, the Manager earned fees of $178,554, $430,332, and $145,640 from the U.S. Treasury Money Market Portfolio, the General Money Market Portfolio, and the Tax-Exempt Money Market Portfolio, respectively. At February 28, 2007, there was a payable due to the Manager in the amount $23,708, $62,383, and $24,066 from the U.S. Treasury Money Market Portfolio, the General Money Market Portfolio, and the Tax-Exempt Money Market Portfolio, respectively. Under terms of the Management Agreement, all expenses incurred by the Portfolios are paid directly by the Manager, except for distribution and shareholder servicing fees, Trustee fees and other miscellaneous non-recurring fees. Certain trustees of the Trust indirectly own and/or are also officers of the Manager. CUSTODIAN: The Bank of New York, ("Custodian") is the Custodian for each Portfolio under custodian agreements with respect to each Portfolio. -22- THE VALIANT FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2007 (UNAUDITED) The Bank of New York also provides fund accounting and administrative services pursuant to a Fund Accounting Agreement dated September 1, 2001 (the "Fund Accounting Agreement") between the Trust and The Bank of New York. The Fund Accounting Agreement has provisions for termination, limitation of liability and indemnification. The Bank of New York maintains all Trust books and records required under Rule 31a-1 under the Investment Company Act of 1940, as amended, performs daily accounting services and provides additional fund reporting and record keeping services. All Bank of New York fees are paid by the Adviser. DISTRIBUTION AND SHAREHOLDER SERVICING PLAN: Integrity Investments, Inc. (the "Distributor"), an affiliate of the Manager, acts as exclusive distributor of the Trust's shares. The Trust has adopted distribution and shareholder servicing plans for each class of shares offered (together, the "Plans") pursuant to Rule 12b-1 of the 1940 Act. For its services, the Distributor is authorized to receive a fee, computed daily and paid monthly, based on the average daily net assets of each class, at the following annual percentage rates: CLASS FEE RATE ----- -------- Class A Shares 0.35% Class B Shares 0.35 Class C Shares 0.65 Class D Shares 0.50 Class E Shares 0.80 EXPENSE LIMITATIONS: The Portfolios' Manager and Distributor have contractually agreed to reimburse expenses and waive certain distribution fees necessary to limit total expenses to the following rates until December 31, 2007: CLASS EXPENSE LIMITATION ----- ------------------ Class A Shares 0.20% Class B Shares 0.45 Class C Shares 0.85 Class D Shares 0.70 Class E Shares 1.00 FEE REIMBURSEMENTS: Expenses reimbursed and fees waived by the Manager and Distributor are set forth on each Portfolio's Statement of Operations. For the six months ending February 28, 2007, the Manager and Distributor waived $27,336 of fees and expenses for the U.S. Treasury Money Market Portfolio. These expenses related to $4,205 of fees attributable to Class A, $18,663 attributable to Class B, and all Trustees fees of $4,468 incurred by the Portfolio during the year. For the six months ending February 28, 2007, the Manager and Distributor waived $581,331 of fees and expenses for the General Money Market Portfolio. These expenses related to $568,805 of fees attributable to Class A, $571 attributable to Class B, and all Trustees fees of $11,955 incurred by the Portfolio during the year. For the six months ending February 28, 2007, the Manager and Distributor waived $255,626 of fees and expenses for the Tax-Exempt Money Market Portfolio. These expenses related to $250,919of fees attributable to Class A, $1,129 attributable to Class B, and all Trustees fees of $3,578incurred by the Portfolio during the year. -23- THE VALIANT FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2007 (UNAUDITED) 4. CAPITAL SHARE TRANSACTIONS: Each class is authorized to issue an unlimited number of shares with no par value. Transactions in capital and shares of beneficial interest by class for the Portfolios for the six months ending February 28, 2007 and the year ended August 31, 2006 are listed below (amounts represent shares and dollars):
U.S. TREASURY MONEY MARKET GENERAL MONEY MARKET TAX-EXEMPT MONEY MARKET PORTFOLIO PORTFOLIO PORTFOLIO ------------------------------ ----------------------------- ------------------------------ FOR THE SIX FOR THE FOR THE SIX FOR THE FOR THE SIX FOR THE MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED FEBRUARY 28, AUGUST 31, FEBRUARY 28, AUGUST 31, FEBRUARY 28, AUGUST 31, 2007 2006 2007 2006 2007 2006 ----------------------------------------------------------------------------------------------------- CLASS A SHARES: Issued 5,671,851 7,357,394 1,220,501,750 2,112,521,864 279,728,879 787,524,064 Reinvested 628 306 901 2,201 19 32 Redeemed (5,052,937) (7,012,095) (1,203,335,090) (2,068,722,614) (299,264,224) (771,010,978) ---------------------------- -------------------------------- ------------------------------ Net increase (decrease) in Class A Shares 619,542 345,605 17,167,561 43,801,451 (19,535,326) 16,513,118 ---------------------------- -------------------------------- ------------------------------ CLASS B SHARES: Issued 58,051,532 159,245,943 1,406,107 655,529 15,160,508 7,737,242 Reinvested -- 168,786 -- -- 17,664 35,021 Redeemed (73,612,018) (196,011,674) (192,883) (661,002) (15,230,806) (8,873,793) ----------------------------- -------------------------------- ------------------------------ Net increase (decrease) in Class B Shares (15,560,486) (36,596,945) 1,213,224 (5,473) (52,634) (1,101,530) ----------------------------- -------------------------------- ------------------------------ CLASS D SHARES: Issued 145,311,142 317,226,353 24,729,998 77,148,735 -- -- Reinvested -- -- 26,949 21,947 -- -- Redeemed (154,289,263) (366,454,130) (24,884,816) (65,715,543) -- -- ------------------------------ -------------------------------- ------------------------------ Net decrease in (8,978,121) (49,227,777) (127,869) 11,455,139 -- -- Class D Shares ------------------------------ -------------------------------- ------------------------------ CLASS E SHARES: Issued 37,667,842 128,626,578 23,305,290 86,497,269 -- -- Reinvested 1,109,239 878,214 26 42 -- -- Redeemed (71,911,332) (73,672,732) (25,661,118) (83,399,602) -- -- ---------------------------- -------------------------------- ------------------------------ Net increase (decrease) in Class E Shares (33,134,251) 55,832,060 (2,355,802) 3,097,709 -- -- ------------------------------ -------------------------------- ------------------------------ NET INCREASE (DECREASE) IN SHARE TRANSACTIONS (57,053,316) (29,647,057) 15,897,114 58,348,826 (19,587,960) 15,411,588 =============================== ================================ ==============================
-24- THE VALIANT FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2007 (UNAUDITED) 5. SECURITIES LENDING: Under an agreement with the Custodian, the Portfolios can lend their securities to approved brokers, dealers and other financial institutions. The Portfolios also continue to receive interest on the securities loaned. Loans are collateralized by cash, in an amount at least equal to the market value of the securities loaned plus accrued interest. The cash collateral is received and is invested in a money market account with the Custodian. A portion of the income generated by the investment of the collateral, net of any rebates paid by the Custodian to borrowers, is remitted to the Custodian as lending agent, and the remainder is paid to the Portfolios. Generally, in the event of counterparty default, the Portfolios have the right to use the collateral to offset losses incurred. As of February 28, 2007, there were no outstanding securities on loan for any of the Portfolios. 6. CONCENTRATION OF CREDIT RISK: As of February 28, 2007, approximately 42.3% of the Tax-Exempt Money Market Portfolio was invested in obligations of political subdivisions of the State of Florida and, accordingly, is subject to the credit risk associated with the non-performance of such issuers. Approximately 90.2% of these investments are further secured, as to principal and interest, by credit enhancements such as letters of credit, municipal bond insurance, and guarantees issued by financial institutions. 7. FEDERAL TAX INFORMATION: All of the dividends paid for the six months ending February 28, 2007 and the year ended August 31, 2006 by the General Money Market Portfolio and the U.S. Treasury Money Market Portfolio are ordinary income for federal income tax purposes. During the six months ending February 28, 2007 and the year ended August 31, 2006, all of the distributions paid by the Tax-Exempt Money Market Portfolio have been designated tax-exempt income distributions. Undistributed net investment income differs for financial statement and tax purposes primarily due to the timing of dividend payments. At August 31, 2006 the following reclassification was made to the capital account of the noted fund to reflect permanent book/tax differences and income and gains available for distributions under income tax regulations, which are primarily due to the differences between book and tax treatment of the expiration of unused capital loss carryforwards. Net investment income, net realized gains, and net assets were not affected by these changes. UNDISTRIBUTED CAPITAL GAINS/ ACCUMULATED PAID IN LOSSES CAPITAL ------------------- ---------------- Tax - Exempt Money Market Fund $8,571 ($8,571) -25- THE VALIANT FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2007 (UNAUDITED) For federal income tax purposes, the following Portfolios have capital loss carryforwards as of August 31, 2006, which are available to offset future realized gains, if any: NAME AMOUNT EXPIRES -------------------------------- --------------------------------------- U.S. Treasury Money Market $ 228,583 2008 21,859 2009 --------------- $ 250,442 =============== General Money Market $ 51,799 2008 1,354 2013 22 2014 --------------- $ 53,175 =============== Tax-Exempt Money Market $ 2,545 2008 42,330 2009 ---------------- $ 44,875 ================ Capital losses incurred after October 31 ("post-October" losses) within the taxable year are deemed to arise on the first business day of the fund's next taxable year. The General Money Market Portfolio will elect to defer post-October losses in the amount of $667. 8. BENEFICIAL OWNERSHIP The beneficial ownership, either directly or indirectly, of more than 25% of the voting securities of a Portfolio creates a presumption of control of the Portfolio under Section 2(a)(9) of the Investment Company Act of 1940. As of February 28, 2007, Relico held 97.31% of Class A shares, Hare & Co. held 100% of Class B shares, and 26.13% of Class D shares, Relico held 31.71% of Class D, Band & Co. held 42.07% of Class D, and Commerce Bank held 74.89% of Class E shares of the U.S. Treasury Money Market Portfolio in omnibus accounts for the sole benefit of their customers. First Union National Bank held 82.78% of the Class A shares and Relico held 100% of the Class B and Class E shares, and 98.93% of the Class D shares of the General Money Market Portfolio in omnibus accounts for the sole benefit of their customers. First Union National Bank held 87.59% of Class A shares, Reich & Tang Services, Inc. (a related party to the Sub-Advisor) held 47.90% and Relico held 52.10% of Class B shares of the Tax-Exempt Money Market Portfolio in omnibus accounts for the sole benefit of their customers. -26- THE VALIANT FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2007 (UNAUDITED) 9. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS. On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48). FIN48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Funds' tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. At this time, management is evaluating the impact that FIN 48 will have on the financial statements. On September 20, 2006, the Financial Accounting Standards Board ("FASB") released Statement of Financial Accounting Standards No. 157 "Fair Value Measurements"("FAS 157"). FAS 157 establishes an authoritative definition of fair value, sets out a framework for measuring fair value, and requires additional disclosures about fairvalue measurements. The application of FAS 157 is required for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. At this time, management is evaluating the impact that FAS 157 will have on the financial statements. -27- MANAGEMENT OF THE TRUST (UNAUDITED) The trustees and officers of the Trust and their principal occupations during the past five years are as follows: RICHARD F. CURCIO PRESIDENT, TRUSTEE, CHAIRMAN OF THE BOARD Founded Integrity Investments, Inc. (a broker/dealer) and Integrity Management & Research, Inc.(an investment adviser) in 1992, and is currently President and Director of each. Senior Vice President/Regional Manager for Fidelity Institutional Services Company from 1987 to 1992. Associated with Fidelity Distributors from 1979 to 1992. JOHN S. CULBERTSON TRUSTEE Retired. Trust Consultant with Fidelity Investments Institutional Services Co. from 1990 to 1993. RUFUS C. CUSHMAN JR. TRUSTEE Retired. Money Manager with Fidelity Management & Research Corp. From 1968 through 1994. H. WILLIS DAY TRUSTEE Retired. Former Senior Vice President of Southeast Bank, FLA, N.A. ROGER F. DUMAS TRUSTEE Private investor since 1987. KENNETH J. PHELPS TRUSTEE President, Principal and Director of Reliance Trust Company, Atlanta, GA since 1992. Chairman, Chief Executive Officer and Director, C&S/Sovran Trust Company, Inc. from 1987 to 1992. DENIS R. CURCIO VICE PRESIDENT, SECRETARY AND TREASURER Mr. Curcio joined Integrity Investments, Inc. the distributor of The Valiant Fund in June of 1998 after graduating from Jacksonville University with a BS in Finance. Aged 30, Denis is responsible for oversight and administration of The Valiant Fund. -28- BRENDEN R. CURCIO VICE PRESIDENT Mr. Curcio joined Integrity Investments, Inc., the distributor of The Valiant Fund in June of 1994 after graduating from Stetson University with a BBA in Finance. Aged 34, Brenden is responsible for institutional sales of The Valiant Fund in the Northeast and Midwest. The Trust's Statement of Additional Information contains additional information about the Trust's Trustees and is available without charge, upon request by calling 1-800-828-2176. Proxy Voting Policies and Procedures A description of the Portfolios' proxy voting policies and procedures and information regarding how the Portfolios' voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, is available, without charge and upon request, by calling Integrity Investments, Inc. at 1-800-828-2176 or by accessing the Portfolios' Form N-PX on the Securities and Exchange Commission's website at www.sec.gov. Quarterly Portfolios The Trust files its complete schedule of portfolio holdings with the Commission for the first and third quarters of each fiscal year on Form N-Q. The Trust's Forms N-Q are available on the Commission's website at www.sec.gov. The Trust's Forms N-Q may also be reviewed and copied at the Commission's Public Reference Room in Washington, DC; information on the operation of the Public Reference Room may be obtained by calling (800)-SEC-0330. -29- THE VALIANT FUND U.S. TREASURY INCOME PORTFOLIO SEMI-ANNUAL REPORT FEBRUARY 28, 2007
THE VALIANT FUND U.S. TREASURY INCOME PORTFOLIO -------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES -------------------------------------------------------------------------------- FEBRUARY 28, 2007* ASSETS: Cash $ 985 ----- TOTAL ASSETS 985 ----- LIABILITIES: Accrued expenses and other liabilities: Investment manager $ 364 ----- TOTAL LIABILITIES 364 ----- NET ASSETS $ 621 ===== COMPOSITION OF NET ASSETS: Capital $ 622 Undistributed net investment income 84 Accumulated net realized loss from investment transactions (85) ----- NET ASSETS $ 621 ===== Class A Shares Net Assets $ 621 Shares outstanding 622 Net Asset Value, Offering Price and Redemption Price per share $1.00 ===== * The portfolio has been inactive since 2001. The accompanying notes are an integral part of these financial statements.
-30-
THE VALIANT FUND U.S. TREASURY INCOME PORTFOLIO -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS, CLASS A SHARES -------------------------------------------------------------------------------- FOR THE SIX MONTHS ENDED FOR THE YEARS ENDED FEBRUARY 28, 2007 (a) ----------------------------------------------------------------------- (UNAUDITED) 2006(b) 2005(c) 2004(d) 2003(e) 2002(f) --------------------- ------------ ------------ ----------- ----------- ---------- Net Asset Value, Beginning of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 --------------------- ------------ ------------ ----------- ----------- ---------- Investment Activities Net investment income -- -- -- -- -- -- Net realized gain from investment transactions -- -- -- -- -- -- --------------------- ------------ ------------ ----------- ----------- ---------- Total from investment activities -- -- -- -- -- -- --------------------- ------------ ------------ ----------- ----------- ---------- Dividends Net investment income -- -- -- -- -- -- --------------------- ------------ ------------ ----------- ----------- ---------- Total dividends -- -- -- -- -- -- --------------------- ------------ ------------ ----------- ----------- ---------- Net Asset Value, End of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 ===================== ============ ============ =========== =========== ========== Total Return -- -- -- -- -- -- Ratios/Supplementary Data: Net Assets at end of period (000) $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 Ratio of expenses to average net assets -- -- -- -- -- -- Ratio of net investment income to average net assets -- -- -- -- -- -- (a) The Portfolio did not operate during the six months ended February 28, 2007. (b) The Portfolio did not operate during the year ended August 31, 2006. (c) The Portfolio did not operate during the year ended August 31, 2005. (d) The Portfolio did not operate during the year ended August 31, 2004. (e) The Portfolio did not operate during the year ended August 31, 2003. (f) The Portfolio did not operate during the year ended August 31, 2002. The accompanying notes are an integral part of these financial statements.
-31- THE VALIANT FUND U.S. TREASURY INCOME PORTFOLIO NOTES TO FINANCIAL STATEMENTS FEBRUARY 28, 2007 1. ORGANIZATION: The Valiant Fund (the "Trust") is a Massachusetts business trust, organized on January 29, 1993 and is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. A separate annual report is issued for the U.S. Treasury Money Market Portfolio, General Money Market Portfolio and Tax-Exempt Money Market Portfolio, separate portfolios of the Trust. This report covers the U.S. Treasury Income Portfolio (hereinafter referred to as "Portfolio") for the six months ended February 28, 2007, during which period the Portfolio did not conduct operations. As the Portfolio did not have any operations during the years ended August 31, 2006 or August 31, 2005, a Statement of Operations and Statement of Changes in Net Assets has not been presented. 2. SIGNIFICANT ACCOUNTING POLICIES: The following is a summary of significant accounting policies followed by the Portfolio in the preparation of its financial statements. The policies are in conformity with generally accepted accounting principles in the United States of America. The preparation of financial statements 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 income and expenses for the period. Actual results could differ from those estimates. SECURITY VALUATION: Investments of the Portfolio are valued at amortized cost, which approximates value. Under the amortized cost method, discount or premium, if any, is accreted or amortized, respectively, on a straight-line basis to the maturity of the security. For the six months ended February 28, 2007, the Portfolio did not engage in any investment activities. SECURITIES TRANSACTIONS AND RELATED INCOME: Securities transactions are recorded on trade date. Security gains and losses are calculated on the identified cost basis. Interest income is recognized on the accrual basis and includes, where applicable, the amortization or accretion of a premium or a discount. For the six months ended February 28, 2007, the Portfolio did not engage in any investment activities nor did it receive any related income. EXPENSE ALLOCATION: Expenses directly attributable to a portfolio are specifically identified and charged. Trust expenses are allocated proportionately among each of the Portfolios within the Trust in relation to the net assets of each portfolio or another reasonable basis. There were no expenses incurred by the Portfolio during the past six months. CAPITAL SHARE TRANSACTIONS: The Portfolio is authorized to issue an unlimited number of shares with no par value. No capital transactions occurred during the year. BENEFICIAL OWNERSHIP The beneficial ownership, either directly or indirectly, of more than 25% of the voting securities of a Portfolio creates a presumption of control of the Portfolio under Section 2(a)(9) of the Investment Company Act of 1940. As of February 28, 2007, Integrity Investments held 100% of the shares of the Portfolio. Certain officers and shareholders of Integrity Investments are also officers of the Trust. -32- MANAGEMENT OF THE TRUST (UNAUDITED) The trustees and officers of the Trust and their principal occupations during the past five years are as follows: RICHARD F. CURCIO PRESIDENT, TRUSTEE, CHAIRMAN OF THE BOARD Founded Integrity Investments, Inc. (a broker/dealer) and Integrity Management & Research, Inc.(an investment adviser) in 1992, and is currently President and Director of each. Senior Vice President/Regional Manager for Fidelity Institutional Services Company from 1987 to 1992. Associated with Fidelity Distributors from 1979 to 1992. JOHN S. CULBERTSON TRUSTEE Retired. Trust Consultant with Fidelity Investments Institutional Services Co. from 1990 to 1993. RUFUS C. CUSHMAN JR. TRUSTEE Retired. Money Manager with Fidelity Management & Research Corp. From 1968 through 1994. H. WILLIS DAY TRUSTEE Retired. Former Senior Vice President of Southeast Bank, FLA, N.A. ROGER F. DUMAS TRUSTEE Private investor since 1987. KENNETH J. PHELPS TRUSTEE President, Principal and Director of Reliance Trust Company, Atlanta, GA since 1992. Chairman, Chief Executive Officer and Director, C&S/Sovran Trust Company, Inc. from 1987 to 1992. DENIS R. CURCIO VICE PRESIDENT, SECRETARY AND TREASURER Mr. Curcio joined Integrity Investments, Inc. the distributor of The Valiant Fund in June of 1998 after graduating from Jacksonville University with a BS in Finance. Aged 30, Denis is responsible for oversight and administration of The Valiant Fund. -33- BRENDEN R. CURCIO VICE PRESIDENT Mr. Curcio joined Integrity Investments, Inc., the distributor of The Valiant Fund in June of 1994 after graduating from Stetson University with a BBA in Finance. Aged 34, Brenden is responsible for institutional sales of The Valiant Fund in the Northeast and Midwest. The Trust's Statement of Additional Information contains additional information about the Trust's Trustees and is available without charge, upon request by calling 1-800-828-2176. Proxy Voting Policies and Procedures A description of the Portfolios' proxy voting policies and procedures and information regarding how the Portfolios' voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, is available, without charge and upon request, by calling Integrity Investments, Inc. at 1-800-828-2176 or by accessing the Portfolios' Form N-PX on the Securities and Exchange Commission's website at www.sec.gov. Quarterly Portfolios The Trust files its complete schedule of portfolio holdings with the Commission for the first and third quarters of each fiscal year on Form N-Q. The Trust's Forms N-Q are available on the Commission's website at www.sec.gov. The Trust's Forms N-Q may also be reviewed and copied at the Commission's Public Reference Room in Washington, DC; information on the operation of the Public Reference Room may be obtained by calling (800)-SEC-0330. -34- ITEM 2. CODE OF ETHICS. Not applicable with semi annual filing. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable with semi annual filing. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable with semi annual filing. ITEM 5: AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable with semi annual filing. ITEM 6. SCHEDULE OF INVESTMENTS. The Schedule of Investments is included as a part of the report to shareholders filed under Item 1 of this Form. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. . PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 9. PURCHASE OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS: Not applicable. 3 ITEM 11. CONTROLS AND PROCEDURES. a) Based on their evaluation of the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) as of a date within 90 days prior to the filing date of this report, the Chief Executive Officer and Chief Financial Officer of the Registrant have concluded that such disclosure controls and procedures are reasonably designed and effective to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to them by others within those entities b) There were no changes in the Registrant's internal control over financial reporting (as defined in Rule 30 a-3(d) under the Investment Company Act of 1940) that occurred during the Registrant's second fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting ITEM 12. EXHIBITS. (a)(1) Not applicable with semi annual filing. (a)(2) Certification of principal executive officer and principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (b) Certification of principal executive officer and principal financial officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 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. (Registrant) THE VALIANT FUND By (Signature and Title) /S/ RICHARD F. CURCIO -------------------------------------- Richard F. Curcio, Chairman of the Board and President Date APRIL 26, 2007 ---------------------------------------------------------- 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. By (Signature and Title) /S/ RICHARD F. CURCIO ----------------------------------------------- Richard F. Curcio, Chairman of the Board and President Date APRIL 26, 2007 ------------------------------------------------------------------- By (Signature and Title) /S/ DENIS R. CURCIO -------------------------------------- Denis R. Curcio, Treasurer Date APRIL 26, 2007 -------------------------------------------------------------------