N-CSRS 1 frankncsrs.htm SEC Filing

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: 811-21532


Frank Funds

(Exact Name of Registrant as Specified in Charter)


312 East 22nd Street, #2B, New York, NY  10010

 (Address of Principal Executive Offices)  (Zip Code)


Brian J. Frank, Frank Capital Partners LLC

312 East 22nd Street, #2B, New York, NY  10010

 (Name and Address of Agent for Service)


With copy to:

JoAnn M. Strasser, Thompson Hine LLP

312 Walnut Street, 14th Floor, Cincinnati, Ohio  45202


Registrant’s Telephone Number, including Area Code:  973-887-7698


Date of fiscal year end: June 30


Date of reporting period: December 31, 2010


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. § 3507.


Item 1.  Reports to Stockholders.












FRANK FUNDS


SEMI-ANNUAL REPORT




FRANK VALUE FUND

LEIGH BALDWIN TOTAL RETURN FUND



December 31, 2010

(Unaudited)


























VALUE FUND


PORTFOLIO ANALYSIS

DECEMBER 31, 2010 (UNAUDITED)



The following chart gives a visual breakdown of the Frank Value Fund (the “Value Fund”) by the industry sectors the underlying securities represent as a percentage of the portfolio of investments.


[frankncsrs002.gif]





BALDWIN FUND


PORTFOLIO ANALYSIS

DECEMBER 31, 2010 (UNAUDITED)



The following chart gives a visual breakdown of the Leigh Baldwin Total Return Fund (the “Baldwin Fund”) by the industry sectors the underlying securities represent as a percentage of the portfolio of investments.

[frankncsrs004.gif]




VALUE FUND


SCHEDULE OF INVESTMENTS  

DECEMBER 31, 2010 (UNAUDITED)






Shares

 

Value

 

 

 

COMMON STOCKS - 97.67%

 

 

 

 

Apparel & Other Finished Products of Fabrics & Similar Material - 2.39%

7,645

True Religion Apparel, Inc. *

$     170,178

 

 

 

Communications Services, NEC - 2.35%

 

6,428

Neustar Inc. Class A *

167,449

 

 

 

Computer Communications Equipment - 3.52%

 

12,379

Cisco Systems, Inc. *

250,427

 

 

 

Electronic Computers - 2.36%

 

12,399

Dell, Inc. *

168,006

 

 

 

Finance Services - 2.38%

 

3,940

American Express Co.

169,105

 

 

 

Hospital & Medical Service Plans - 8.78%

 

4,744

Humana, Inc. *

259,687

5,305

WellCare Health Plans, Inc. *

160,317

3,600

Wellpoint, Inc. *

       204,696

 

 

       624,700

Pharmaceutical Preparations - 10.08%

 

26,887

Pfizer, Inc.

470,791

20,638

Prestige Brands Holdings, Inc. *

       246,624

 

 

       717,415

Retail-Apparel & Accessory Stores - 6.25%

 

6,769

Aeropostale Inc. *

166,788

7,119

DSW, Inc. Class A *

       278,353

 

 

       445,141

Retail-Computer & Computer Software Stores - 2.09%

 

6,513

GameStop Corp. Class A *

149,017

 

 

 

Retail-Drug Stores & Proprietary Stores - 3.75%

 

15,004

PetMed Express, Inc.

267,221




* Non-income producing securities during the period.



The accompanying notes are an integral part of these financial statements.


VALUE FUND


SCHEDULE OF INVESTMENTS (CONTINUED)

DECEMBER 31, 2010 (UNAUDITED)






Shares

 

Value

 

 

 

Retail-Radio, TV & Consumer Electronics Stores - 2.52%

 

5,239

Best Buy Co., Inc.

179,645

 

 

 

Semiconductors & Related Devices - 4.49%

 

15,200

Intel Corp.

319,656

 

 

 

Services-Advertising Agencies - 3.03%

 

13,448

Valueclick, Inc. *

215,571

 

 

 

Services-Business Services, NEC - 8.30%

 

10,640

eBay, Inc. *

296,111

15,889

Western Union Co.

       295,059

 

 

       591,170

Services-Computer Programming, Date Processing, ETC - 5.32%

638

Google Inc. Class A *

378,953

 

 

 

Services-Consumer Credit Reporting, Collection Agencies - 2.47%

2,142

Dun & Bradstreet

175,837

 

 

 

Services-Engineering, Accounting, Research, Management - 5.20%

5,854

Forrester Research, Inc. *

206,588

10,320

SAIC, Inc. *

       163,675

 

 

       370,263

Services-Mailing, Reproduction, Commercial Art & Photography - 1.32%

12,407

American Reprographics Co. *

94,169

 

 

 

Services-Management Consulting - 2.94%

 

5,575

Corporate Executive Board Co.

209,341

 

 

 

Services-Personal Services - 5.70%

 

13,705

H.R. Block, Inc.

163,227

6,466

Weight Watchers International, Inc.

       242,410

 

 

       405,637






* Non-income producing securities during the period.

Shares

 

Value

 

 

Services-Prepackaged Software - 7.57%

 

7,138

CA Technologies, Inc.

174,453

13,074

Microsoft Corp.

       364,895

 

 

       539,348

Telegraph & Other Message Communications - 4.86%

 

11,951

J2 Global Communications, Inc. *

       345,983

 

 

 

TOTAL FOR COMMON STOCKS (Cost $6,317,545) - 97.67%

    6,954,232

 

 

 

SHORT TERM INVESTMENTS - 2.45%

 

174,401

Fidelity Institutional Money Market Portfolio 0.25% **

       174,401

 

 

 

TOTAL FOR SHORT TERM INVESTMENTS (Cost $174,401)-2.45%

       174,401

 

 

 

TOTAL INVESTMENTS (Cost $6,491,946) - 100.12%

7,128,633

 

 

 

LIABILITIES IN EXCESS OF OTHER ASSETS - (0.12)%

         (8,230)

 

 

 

NET ASSETS - 100.00%

$  7,120,403






















* Non-income producing securities during the period.

** Variable rate security; the coupon rate shown represents the yield at December 31, 2010.



The accompanying notes are an integral part of these financial statements.


VALUE FUND


SCHEDULE OF INVESTMENTS (CONTINUED)

DECEMBER 31, 2010 (UNAUDITED)



Various inputs are used in determining the value of the Fund's investments.  These inputs are summarized in the three broad levels listed below:


Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access.


Level 2 - Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an active market, price for similar instruments, interest rates, prepayment speeds, yield curves, default rates and similar data.


Level 3 - Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Fund's own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.


The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities.


The following is a summary of inputs used as of December 31, 2010, in valuing the Fund’s investments carried at value:


Investments in Securities

Level 1

Level 2

Level 3

Total

 

 

 

 

 

  Common Stocks

$ 6,954,232

-

-

$ 6,954,232

  Short-Term Investments:

 

 

 

 

    Fidelity Institutional Money

      Market Portfolio

 174,401

-

-

   174,401

 

$ 7,128,633

-

-

$ 7,128,633





The accompanying notes are an integral part of these financial statements.


BALDWIN FUND


SCHEDULE OF INVESTMENTS

DECEMBER 31, 2010 (UNAUDITED)






Shares

 

Value

 

 

 

COMMON STOCKS - 74.76%

 

 

 

 

Crude Petroleum & Natural Gas - 5.54%

 

5,600

Petroleo Brasileiro S.A. (Brazil) *

$     211,904

 

 

 

Finance Services - 1.64%

 

8,000

Oneida Financial Corp.

62,800

 

 

 

Fruit, Vegetable, & Food Specialties - 4.40%

 

3,400

Heinz Co.

168,164

 

 

 

Grain Mill Products - 9.46%

 

5,000

General Mills, Inc.

177,950

3,600

Kellogg Co.

       183,888

 

 

361,838

Guided Missiles & Space Vehicles & Parts - 4.57%

 

2,500

Lockheed Martin Corp.

174,775

 

 

 

Petroleum Refining - 2.00%

 

2,000

Suncor Energy, Inc.

76,580

 

 

 

Pharmaceutical Preparations - 9.43%

 

7,000

Bristol Myers Squibb Co.

185,360

10,000

Pfizer, Inc.

       175,100

 

 

360,460

Pumps & Pumping Equipment - 4.09%

 

3,000

ITT Corp.

156,330

 

 

 

Retail-Drug Stores and Proprietary Stores - 3.06%

 

3,000

Walgreen Co.

116,880

 

 

 

Security Brokers, Dealers & Flotation Companies - 4.48%

 

10,000

Schwab Corp.

171,100

 

 

 

Semiconductors & Related Devices - 4.95%

 

9,000

Intel Corp.

189,270


* Non-income producing securities during the period.



The accompanying notes are an integral part of these financial statements.


BALDWIN FUND


SCHEDULE OF INVESTMENTS (CONTINUED)

DECEMBER 31, 2010 (UNAUDITED)






Shares

 

Value

 

 

 

Services-Motion Picture & Video Tape Production - 6.73%

 

3,000

Dreamworks Animation SKG, Inc. *

88,410

4,500

Walt Disney Co.

       168,795

 

 

257,205

Services-Prepackaged Software - 4.75%

 

6,500

Microsoft Corp.

181,415

 

 

 

Soap, Detergents, Cleaning Preparations, Perfumes, Cosmetics - 5.05%

3,000

Procter & Gamble Co.

192,990

 

 

 

Telephone Communications (No Radio Telephone) - 4.61%

 

6,000

AT&T Corp.

       176,280

 

 

 

TOTAL FOR COMMON STOCKS (Cost $2,874,771) - 74.76%

    2,857,991

 

 

 

EXCHANGE TRADED FUNDS - 4.55%

 

5,000

Aberdeen Asia Pacific Fund

33,750

5,000

Direxion Large Cap Bear 3X Shares *

43,850

5,000

The Gabelli Global Gold, Natural Resources & Income Trust

         96,350

TOTAL FOR EXCHANGE TRADED FUNDS (Cost $171,287) - 3.89%

       173,950

 

 

 

REITS - 4.22%

 

9,000

Annaly Capital Management, Inc.

       161,280

TOTAL FOR REITS (Cost $162,575) - 3.61%

       161,280

 

 

 

Underlying Security

 

   Expiration Date/Exercise Price

 

 

 

 

PUT OPTIONS - 2.93% *

 

Shares Subject

 

to Put

 

 

 

Annaly Capital Management, Inc.

 

8,500

January 2012 Put @ $15.00

9,180

 

 

 

 

AT&T Corp.

 

5,500

January 2012 Put @ $20.00

2,640


* Non-income producing securities during the period.



The accompanying notes are an integral part of these financial statements.


BALDWIN FUND


SCHEDULE OF INVESTMENTS (CONTINUED)

DECEMBER 31, 2010 (UNAUDITED)






Shares

 

Value

 

 

 

 

Bristol-Myers Squibb Co.

 

6,000

January 2012 Put @ $20.00

4,980

 

 

 

 

Disney Enterprises, Inc.

 

4,500

January 2012 Put @ $25.00

3,645

 

 

 

 

Exxon Mobil Corp.

 

2,600

January 2012 Put @ $52.50

4,264

 

 

 

 

General Electric Co.

 

10,000

January 2012 Put @ $15.00

9,800

 

 

 

 

General Mills, Inc.

 

4,400

January 2012 Put @ $30.00

6,292

 

 

 

 

Heinz Co.

 

3,400

January 2012 Put @ $40.00

2,890

 

 

 

 

Intel Corp.

 

8,500

January 2012 Put @ $15.00

4,930

 

 

 

 

ITT Corp.

 

2,700

January 2011 Put @ $45.00

189

 

 

 

 

Kellogg Co.

 

3,000

January 2012 Put @ $40.00

2,400

 

 

 

 

Lockheed Martin Corp.

 

2,500

January 2012 Put @ $65.00

14,000

 

 

 

 

Microsoft Corp.

 

6,500

January 2012 Put @ $22.50

8,385

 

 

 

 

Molson Coors Brewing Co.

 

3,000

January 2011 Put @ $35.00

-






The accompanying notes are an integral part of these financial statements.


BALDWIN FUND


SCHEDULE OF INVESTMENTS (CONTINUED)

DECEMBER 31, 2010 (UNAUDITED)






Shares

 

Value

 

 

 

 

Paychex, Inc.

 

5,700

January 2012 Put @ $25.00

6,270

 

 

 

 

Petroleo Brasileiro S.A. (Brazil)

 

5,600

January 2012 Put @ $30.00

11,424

 

 

 

 

Pfizer, Inc.

 

10,000

January 2012 Put @ $12.50

4,500

 

 

 

 

Philip Morris International, Inc.

 

3,500

January 2012 Put @ $40.00

4,515

 

 

 

 

Procter & Gamble Co.

 

2,500

January 2012 Put @ $50.00

3,725

 

 

 

 

Schwab Corp.

 

10,000

January 2012 Put @ $12.50

5,500

 

 

 

 

Walgreen Co.

 

5,500

January 2012 Put @ $22.50

           2,530

 

 

 

 

Total (Premiums Paid $268,288) - 2.93%

       112,059

 

 

 

SHORT TERM INVESTMENTS - 10.68%

 

408,296

Fidelity Government Fund Class-I 0.03% **

       408,296

 

 

 

TOTAL FOR SHORT TERM INVESTMENTS-(Cost $408,296) 10.68%

   408,296

 

 

 

TOTAL INVESTMENTS (Cost $3,885,217) - 97.14%

3,713,576

 

 

 

OTHER ASSETS IN EXCESS OF LIABILITIES - 2.86%

       109,435

 

 

 

NET ASSETS - 100.00%

$  3,823,011






** Variable rate security; the coupon rate shown represents the yield at December 31, 2010.



The accompanying notes are an integral part of these financial statements.


BALDWIN FUND


SCHEDULE OF CALL OPTIONS WRITTEN  

DECEMBER 31, 2010 (UNAUDITED)






CALL OPTIONS WRITTEN *

 

 

 

 

 

Underlying Security

Shares Subject

 

Expiration Date/Exercise Price

to Call

Value

 

 

 

Annaly Capital Management, Inc.

 

 

January 2011 Call @ $17.50

9,000

$         4,950

 

 

 

AT&T Corp.

 

 

January 2011 Call @ $29.00

6,000

2,700

 

 

 

Bristol-Meyers Squibb Co.

 

 

February 2011 Call @ $26.00

7,000

6,160

 

 

 

Direxion Large Cap Bear 3X Shares

 

 

January 2011 Call @ $13.00

5,000

500

 

 

 

Disney Enterprises, Inc.

 

 

January 2011 Call @ $37.00

4,500

4,365

 

 

 

Dreamworks Animation SKG, Inc.

 

 

January 2011 Call @ $35.00

3,000

300

 

 

 

General Electric Co.

 

 

December 2010 Call @ $18.00

10,000

2,400

 

 

 

General Mills, Inc.

 

 

January 2011 Call @ $36.25

5,000

1,000

 

 

 

Heinz Co.

 

 

January 2011 Call @ $50.00

3,400

1,530

 

 

 

Intel Corp.

 

 

January 2011 Call @ $21.00

9,000

4,680

 

 

 

ITT Corp.

 

 

January 2011 Call @ $50.00

3000

7,200



* Non-income producing securities during the period.



The accompanying notes are an integral part of these financial statements.


BALDWIN FUND


SCHEDULE OF CALL OPTIONS WRITTEN (CONTINUED)

DECEMBER 31, 2010 (UNAUDITED)






CALL OPTIONS WRITTEN *

 

 

 

 

 

Underlying Security

Shares Subject

 

Expiration Date/Exercise Price

to Call

Value

 

 

 

Kellogg Co.

 

 

January 2011 Call @ $50.00

3,600

5,220

 

 

 

Lockheed Martin Corp.

 

 

January 2011 Call @ $70.00

2,500

2,625

 

 

 

Pfizer, Inc.

 

 

January 2011 Call @ $17.50

10,000

3,500

 

 

 

Procter & Gamble Co.

 

 

January 2011 Call @ $65.00

3,000

1,230

 

 

 

Petroleo Brasileiro S.A. (Brazil)

 

 

January 2011 Call @ $35.00

5,600

17,080

 

 

 

Schwab Corp.

 

 

January 2011 Call @ $17.50

10,000

2,500

 

 

 

Suncor Energy, Inc.

 

 

January 2011 Call @ $36.00

2,000

5,400

 

 

 

Walgreen Co.

 

 

January 2011 Call @ $37.00

3,000

            6,630

 

 

 

Total (Premiums Received $54,490)

 

$         79,970












* Non-income producing securities during the period.




The accompanying notes are an integral part of these financial statements.


BALDWIN FUND


SCHEDULE OF CALL OPTIONS WRITTEN (CONTINUED)

DECEMBER 31, 2010 (UNAUDITED)



Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in the three broad levels listed below:


Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access.

        

Level 2 - Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an active market, price for similar instruments, interest rates, prepayment speeds, yield curves, default rates and similar data.


Level 3 - Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Fund's own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.


The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities.


The following is a summary of inputs used as of December 31, 2010 in valuing the Fund’s investments carried at value:


Investments in Securities

Level 1

Level 2

Level 3

Total

    (Assets)

 

 

 

 

    Common Stocks

$2,857,991

-

-

$ 2,724,250

    Exchange Traded Funds

$   173,950

-

-

$    129,430

    Real Estate Investment Trusts

$   161,280

-

-

$    120,050

    Put Options

$   112,059

-

-

$    242,400

    Short-Term Investments:

 

 

 

 

      Fidelity Government Fund Class-I

$   408,296

-

-

$    174,313

Total

$3,713,576

-

-

$ 3,390,443

 

 

 

 

 

Investments in Securities Sold Short

Level 1

Level 2

Level 3

Total

    (Liabilities)

 

 

 

 

    Call Options

$     79,970

-

-

$      23,122

Total

$     79,970

-

-

$      23,122



The accompanying notes are an integral part of these financial statements.


FRANK FUNDS


STATEMENT OF ASSETS AND LIABILITIES

DECEMBER 31, 2010 (UNAUDITED)






 

 

Value

Fund

Baldwin

Fund

Assets:

 

 

 

       Investments in Securities, at Value

           (Cost $6,491,946 and $3,885,217)

$ 7,128,633

$ 3,713,576

       Receivables:

 

 

               Dividends and Interest

  3,968

  11,149

               Due from Adviser

-

   6,157

               Securities Sold

-

 524,200

       Prepaid Expenses

                  -

        12,283

                     Total Assets

   7,132,601

   4,267,365

Liabilities:

 

 

 

        Covered Call Options Written at Fair Market

            Value (premiums received $0 and $54,490)

 

 

                  -

79,970

       Payables:

 

 

 

              Accrued Management Fees

   5,958

-

              Securities Purchased

-

  342,294

              Other Accrued Expenses

          6,240

        22,090

                     Total Liabilities

        12,198

      444,354

 

 

 

 

Net Assets

 

$ 7,120,403

$ 3,823,011

 

 

 

 

Net Assets Consist of:

 

 

    Paid In Capital

$ 6,643,434

$ 4,060,688

    Accumulated Undistributed Net Investment Income

  5,885

 14,251

    Accumulated Undistributed Realized Loss on

        Investments

   (165,603)

(54,807)

    Unrealized Appreciation (Depreciation) in Value of

        Investments

      636,687

   (197,121)

Net Assets, for 689,691 and 451,862 Shares

    Outstanding, respectively

$ 7,120,403

$ 3,823,011

 

 

 

 

Net Asset Value Per Share

 

$          8.46

 

 

 

 

Short-term Redemption Price Per Share ($8.46 x 0.98) *

$          8.29





* The Funds will impose a 2% redemption fee on shares redeemed within 5 business days of purchase.



The accompanying notes are an integral part of these financial statements.


FRANK FUNDS


STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)

DECEMBER 31, 2010 (UNAUDITED)






Investor Class:

Value

Fund

 

 

 

Net Assets

 

$ 6,877,628

 

 

 

Shares outstanding (unlimited number of shares authorized

    with no par value)

      666,125

 

 

 

Net Asset Value

$        10.32

 

 

 

Short-term Redemption Price Per Share ($10.32 x 0.98) *

$        10.11

 

 

 

Class C:

 

 

 

 

 

Net Assets

 

$    232,536

 

 

 

Shares outstanding (unlimited number of shares authorized

    with no par value)

        22,572

 

 

 

Net Asset Value

$        10.30

 

 

 

Short-term Redemption Price Per Share ($10.30 x 0.98) *

$        10.09

 

 

 

Institutional Class:

 

 

 

 

Net Assets

 

$      10,239

 

 

 

Shares outstanding (unlimited number of shares authorized

    with no par value)

             994

 

 

 

Net Asset Value, Redemption Price and Offering Price Per Share

$        10.30

 

 

 

Short-term Redemption Price Per Share ($10.30 x 0.98) *

$        10.09








* The Funds will impose a 2% redemption fee on shares redeemed within 5 business days of purchase.



The accompanying notes are an integral part of these financial statements.


FRANK FUNDS


STATEMENT OF OPERATIONS

        FOR THE SIX MONTHS ENDED DECEMBER 31, 2010 (UNAUDITED)






 

 

Value Fund

Baldwin Fund

Investment Income:

 

 

       Dividends (a)

$      47,034

$    62,557

       Interest

 

             390

             66

            Total Investment Income

        47,424

      62,623

 

 

 

 

Expenses:

 

 

 

       Advisory Fees (Note 3)

  32,235

   8,111

       Administration Fees (Note 4)

   4,447

  30,246

       Transfer Agent Fees

 -

    6,033

       Miscellaneous Expenses

 -

  37

       Audit Fees

 -

  3,781

       Distribution Fees (Class C - $389 and Investor Class - $4,346)

  4,735

 18,024

       Legal Fees

 -

  4,033

       Custody Fees

 -

  9,439

       Trustee Expense

 -

  605

       Printing and Mailing Expense

 -

  276

       Registration Fees

                  -

        1,261

            Total Expenses

        41,417

      81,846

                 Fees Waived and Reimbursed by the Advisor

                  -

   (50,304)

            Net Expenses

        41,417

      31,542

 

 

 

 

Net Investment Income

          6,007

      31,081

 

 

 

 

Realized and Unrealized Gain (Loss) on:

 

 

   Realized Gain (Loss) on Investments

  20,455

 (53,772)

   Realized Gain on Options

 -

 112,672

   Net Change in Unrealized Appreciation (Depreciation) on:

 

 

       Investments

 1,047,689

354,590

       Options

 

                  -

 (242,932)

Realized and Unrealized Gain on Investments and Options

   1,068,144

    170,558

 

 

 

 

Net Increase in Net Assets Resulting from Operations

$ 1,074,151

$  201,639







(a) net of foreign withholding taxes of $478 - Baldwin Fund



The accompanying notes are an integral part of these financial statements.


VALUE FUND


STATEMENT OF CHANGES IN NET ASSETS






 

 

(Unaudited)

 

 

 

Six Months

Year

 

 

Ended

Ended

 

 

12/31/2010

6/30/2010

Increase (Decrease) in Net Assets From Operations:

 

 

    Net Investment Income (Loss)

$         6,007

$    (16,359)

    Net Realized Gain on Investments

  20,455

  4,291

    Unrealized Appreciation (Depreciation) on Investments

    1,047,689

    (268,866)

    Net Increase (Decrease) in Net Assets Resulting

        from Operations

    1,074,151

    (280,934)

 

 

 

 

Distributions to Shareholders:

 

 

    Net Investment Income - Class C

  (95)

    -

    Net Investment Income - Institutional Class

   (27)

   -

    Realized Gains

                   -

                   -

    Total Distributions Paid to Shareholders

           (122)

                   -

 

 

 

 

Capital Share Transactions (Note 5)

    1,739,236

    3,704,827

 

 

 

 

Total Increase in Net Assets

 2,813,265

3,423,893

 

 

 

 

Net Assets:

 

 

 

Beginning of Period

    4,307,138

       883,245

 

 

 

 

End of Period (Including Undistributed Net Investment

    Income of $5,885 and $0, respectively)

$ 7,120,403

$ 4,307,138





The accompanying notes are an integral part of these financial statements.


BALDWIN FUND


STATEMENT OF CHANGES IN NET ASSETS

 





 

 

(Unaudited)

 

 

 

Six Months

Year

 

 

Ended

Ended

 

 

12/31/2010

6/30/2010

Increase (Decrease) in Net Assets From Operations:

 

 

    Net Investment Income

$      31,081

$      57,623

    Net Realized Gain on Investments and Options

 58,900

 143,045

    Unrealized Appreciation (Depreciation) on

        Investments and Options

      111,658

   (251,624)

    Net Increase (Decrease) in Net Assets Resulting

        from Operations

      201,639

     (50,956)

 

 

 

 

Distributions to Shareholders:

 

 

    Net Investment Income

  (16,830)

  (59,803)

    Realized Gains

   (217,665)

     (73,857)

    Total Distributions Paid to Shareholders

   (234,495)

   (133,660)

 

 

 

 

Capital Share Transactions (Note 5)

      532,289

   1,877,692

 

 

 

 

Total Increase in Net Assets

 499,433

 1,693,076

 

 

 

 

Net Assets:

 

 

 

Beginning of Period

   3,323,578

   1,630,502

 

 

 

 

End of Period (Including Undistributed Net Investment

    Income of ($14,251 and $0, respectively)

$ 3,823,011

$ 3,323,578





The accompanying notes are an integral part of these financial statements.


VALUE FUND – INSTITUTIONAL CLASS


FINANCIAL HIGHLIGHTS



Selected data for a share outstanding throughout the period.


 

 

(Unaudited)

 

 

 

Period Ended

 

 

 

12/31/2010

***

 

 

 

 

Net Asset Value, at Beginning of Period

$          10.09

 

 

 

 

 

Income From Investment Operations:

 

 

  Net Investment Income *

             0.03

 

  Net Gain on Securities (Realized and Unrealized)

              0.21

 

     Total from Investment Operations

             0.24

 

 

 

 

 

Distributions:

 

 

 

  Net Investment Income

           (0.03)

 

  Realized Gains

                    -

 

     Total from Distributions

           (0.03)

 

 

 

 

 

Net Asset Value, at End of Period

$          10.30

 

 

 

 

 

Total Return **

2.35%

 

 

 

 

 

Ratios/Supplemental Data:

 

 

  Net Assets at End of Period (Thousands)

$               10

 

  Ratio of Expenses to Average Net Assets

1.24%

  Ratio of Net Investment Loss to Average Net Assets

1.67%

  Portfolio Turnover

24.97%

 



* Per share net investment loss has been determined on the basis of average shares outstanding during the period.

** Assumes reinvestment of dividends.

*** Period began on November 3, 2010.

† Annualized



The accompanying notes are an integral part of these financial statements.


VALUE FUND – CLASS C


FINANCIAL HIGHLIGHTS



Selected data for a share outstanding throughout the period.


 

 

(Unaudited)

 

 

 

Period Ended

 

 

 

12/31/2010

***

 

 

 

 

Net Asset Value, at Beginning of Period

$            9.32

 

 

 

 

 

Income From Investment Operations:

 

 

  Net Investment Income *

             0.01

 

  Net Gain on Securities (Realized and Unrealized)

              0.97

 

     Total from Investment Operations

             0.98

 

 

 

 

 

Distributions:

 

 

 

  Net Investment Income

                  -

  Realized Gains

                   -

 

     Total from Distributions

                  -

 

 

 

 

 

Net Asset Value, at End of Period

$          10.30

 

 

 

 

 

Total Return **

10.56%

 

 

 

 

 

Ratios/Supplemental Data:

 

 

  Net Assets at End of Period (Thousands)

$             233

 

  Ratio of Expenses to Average Net Assets

2.20%

  Ratio of Net Investment Loss to Average Net Assets

0.24%

  Portfolio Turnover

24.97%

 



* Per share net investment loss has been determined on the basis of average shares outstanding during the period.

** Assumes reinvestment of dividends.

*** Period began on September 23, 2010.

† Annualized

Amount calculated is less than $0.005



The accompanying notes are an integral part of these financial statements.


VALUE FUND – INVESTOR CLASS


FINANCIAL HIGHLIGHTS



Selected data for a share outstanding throughout the period.


 

 

(Unaudited)

 

 

 

 

 

 

 

 

Six Months

 

 

 

 

 

 

 

 

Ended

 

Years Ended

 

 

12/31/

2010

 

6/30/

2010

6/30/

2009

6/30/

2008

6/30/

2007

6/30/

2006

 

 

 

 

 

 

 

 

 

Net Asset Value,

    at Beginning of Period

$    8.40

 

$  7.40

$  10.42

$  13.61

$  11.36

$  10.76

 

 

 

 

 

 

 

 

 

Income From Investment Operations:

 

 

 

 

 

 

 

  Net Investment Income (Loss) *

 0.01

 

(0.06)

 (0.03)

 (0.04)

 (0.07)

 (0.04)

  Net Gain (Loss) on Securities

    (Realized and Unrealized)

      1.91

 

    1.06

   (2.16)

    (1.74)

      2.90

      0.92

     Total from Investment Operations

 1.92

 

 1.00

  (2.19)

(1.78)

 2.83

  0.88

 

 

 

 

 

 

 

 

 

Distributions:

 

 

 

 

 

 

 

 

  Net Investment Income

-

 

-

    -

    -

   -

   -

  Realized Gains

           -

 

          -

   (0.83)

    (1.41)

   (0.58)

   (0.28)

     Total from Distributions

-

 

-

 (0.83)

 (1.41)

 (0.58)

 (0.28)

 

 

 

 

 

 

 

 

 

Net Asset Value, at End of Period

$  10.32

 

$  8.40

$    7.40

$  10.42

$  13.61

$   11.36

 

 

 

 

 

 

 

 

 

Total Return **

22.86%

 

13.51%

(19.12)%

(14.31)%

25.41%

8.30%

 

 

 

 

 

 

 

 

 

Ratios/Supplemental Data:

 

 

 

 

 

 

 

  Net Assets at End of Period

    (Thousands)

$  6,878

 

$4,307

$     883

$     968

$     853

$      499

  Ratio of Expenses to Average

    Net Assets

1.49%

***

1.50%

1.50%

1.50%

1.50%

1.50%

  Ratio of Net Investment Loss to

    Average Net Assets

0.22%

***

(0.68)%

 (0.43)%

 (0.35)%

(0.54)%

(0.35)%

  Portfolio Turnover

24.97%

 

58.68%

47.11%

63.03%

72.06%

45.25%





* Per share net investment loss has been determined on the basis of average shares outstanding during the period.

** Assumes reinvestment of dividends.

*** Annualized



The accompanying notes are an integral part of these financial statements.


BALDWIN FUND


FINANCIAL HIGHLIGHTS



Selected data for a share outstanding throughout the period.


 

 

(Unaudited)

 

 

 

 

 

 

Six Months

 

Year

Period

 

 

 

Ended

 

Ended

Ended *

 

 

 

12/31/

2010

 

6/30/

2010

6/30/

2009

 

 

 

 

 

 

 

 

Net Asset Value, at Beginning of Period

$      8.53

 

$     8.94

$    10.00

 

 

 

 

 

 

 

 

Income From Investment Operations:

 

 

 

 

 

  Net Investment Income **

  0.08

 

  0.20

  0.26

 

  Net Loss on Securities (Realized and Unrealized)

        0.38

 

    (0.11)

     (1.15)

 

     Total from Investment Operations

 0.46

 

  0.09

  (0.89)

 

 

 

 

 

 

 

 

Distributions:

 

 

 

 

 

 

  Net Investment Income

(0.04)

 

 (0.20)

  (0.17)

 

  Realized Gains

     (0.49)

 

    (0.30)

             -

 

     Total from Distributions

 (0.53)

 

 (0.50)

 (0.17)

 

 

 

 

 

 

 

 

Net Asset Value, at End of Period

$      8.46

 

$     8.53

$      8.94

 

 

 

 

 

 

 

 

Total Return ***

 5.81%

(a)

 0.82%

 (8.80)%

(a)

 

 

 

 

 

 

 

Ratios/Supplemental Data:

 

 

 

 

 

  Net Assets at End of Period (Thousands)

$    3,823

 

$   3,324

$    1,631

 

Before Reimbursement:

 

 

 

 

 

  Ratio of Expenses to Average Net Assets

4.54%

(b)

5.94%

16.14%

(b)

  Ratio of Net Investment Income (Loss) to

    Average Net Assets

 (1.07)%

(b)

 (1.94)%

 (11.24)%

(b)

After Reimbursement:

 

 

 

 

 

  Ratio of Expenses to Average Net Assets

1.75%

(b)

1.75%

1.75%

(b)

  Ratio of Net Investment Income to Average

    Net Assets

1.72%

(b)

2.25%

3.15%

(b)

  Portfolio Turnover

264.34%

 

417.96%

195.12%

 



* For the Period August 1, 2008 (commencement of investment operations) through June 30, 2009.

** Per share net investment income has been determined on the basis of average shares outstanding during the period.

*** Assumes reinvestment of dividends.

(a) Not Annualized

(b) Annualized



The accompanying notes are an integral part of these financial statements.


FRANK FUNDS


NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2010 (UNAUDITED)



Note 1. Organization

Frank Funds (the “Trust”), is an open-end regulated investment company that was organized as an Ohio business trust on February 12, 2004. The Trust is permitted to issue an unlimited number of shares of beneficial interest of separate series, each series representing a distinct fund with its own investment objective and policies.  At present, there are two series authorized by the Trust, the Frank Value Fund (the “Value Fund”) and the Leigh Baldwin Total Return Fund (the “Baldwin Fund”) ( each a “Fund” and collectively the “Funds”).  Frank Capital Partners LLC (“FCP” or “Frank Capital”) is the adviser to the Value Fund and Leigh Baldwin & Co., LLC (“LBC”) is the adviser to the Baldwin Fund.  The Value Fund’s investment objective is to provide long-term capital appreciation. The Value Fund’s principal investment strategy is value investing.  The Value Fund commenced operations on July 21, 2004.  The Baldwin Fund’s investment objective is to provide total return.  The Baldwin Fund seeks to achieve its investment objective by purchasing equity securities (including common stock, shares of other investment companies and exchange traded funds) and selling covered calls to generate income to the Baldwin Fund.  The Baldwin Fund also utilizes put options in conjunction with the covered calls to limit the risk of ownership of the underlying equity securities.  The Baldwin Fund commenced operations on August 1, 2008.  


Note 2. Summary of Significant Accounting Policies

Codification: The FASB has issued FASB ASC 105 (formerly FASB Statement No. 168), The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles (GAAP) (ASC 105). ASC 105 established the FASB Accounting Standards Codification (Codification or ASC) as the single source of authoritative GAAP recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. The Codification supersedes all existing non-SEC accounting and reporting standards. All other non-grandfathered, non-SEC accounting literature not included in the Codification will become nonauthoritative.


Following the Codification, the FASB will not issue new standards in the form of Statements, FASB Staff Positions or Emerging Issues Task Force Abstracts. Instead, it will issue Accounting Standards Updates, which will serve to update the Codification, provide background information about the guidance and provide the basis for conclusions on the changes to the Codification.





FRANK FUNDS


NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2010 (UNAUDITED)



GAAP is not intended to be changed as a result of the FASB's Codification project, but it will change the way the guidance is organized and presented. As a result, these changes will have a significant impact on how companies reference GAAP in their financial statements and in their accounting policies for financial statements issued for interim and annual periods ending after September 15, 2009.


The following is a summary of the significant accounting policies followed by the Funds in the preparation of its financial statements.  These policies are in conformity with accounting principles generally accepted in the United States of America.


Security Valuation- Equity securities generally are valued by using market quotations, but may be valued on the basis of prices furnished by a pricing service when the adviser believes such prices accurately reflect the fair market value of such securities.  Securities that are traded on any stock exchange or on the NASDAQ over-the-counter market are generally valued by the pricing service at the last quoted sale price.  Lacking a last sale price, an equity security is generally valued by the pricing service at its last bid price.  When market quotations are not readily available, when the adviser determines that the market quotation or the price provided by the pricing service does not accurately reflect the current market value, or when restricted or illiquid securities are being valued, such securities are valued as determined in good faith by the adviser, in conformity with guidelines adopted by and subject to review by the Board of Trustees.


Fixed income securities generally are valued by using market quotations, but may be valued on the basis of prices furnished by a pricing service when the adviser believes such prices accurately reflect the fair market value of such securities.  A pricing service utilizes electronic data processing techniques based on yield spreads relating to securities with similar characteristics to determine prices for normal institutional-size trading units of debt securities without regard to sale or bid prices.  If the adviser decides that a price provided by the pricing service does not accurately reflect the fair market value of the securities, when prices are not readily available from a pricing service, or when restricted or illiquid securities are being valued, securities are valued at fair value as determined in good faith by the adviser, in conformity with guidelines adopted by and subject to review of the Board of Trustees.  Short term investments in fixed income securities with maturities of less than 60 days when acquired, or which subsequently are within 60 days of maturity, are valued by using the amortized cost method of valuation, which the Board has determined will represent fair value.





FRANK FUNDS


NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2010 (UNAUDITED)



In accordance with the Trust’s good faith pricing guidelines, the adviser is required to consider all appropriate factors relevant to the value of securities for which it has determined other pricing sources are not available or reliable as described above.  No single standard for determining fair value exists since fair value depends upon the circumstances of each individual case.  As a general principle, the current fair value of an issue of securities being valued by the adviser would appear to be the amount which the owner might reasonably expect to receive for them upon their current sale.  Methods which are in accord with this principle may, for example, be based on (i) a multiple of earnings; (ii) a discount from market of a similar freely traded security (including a derivative security or a basket of securities traded on other markets, exchanges or among dealers); or (iii) yield to maturity with respect to debt issues, or a combination of these and other methods.


Financial Futures Contracts   The Funds may invest in financial futures contracts solely for the purpose of hedging their existing portfolio securities, or securities that the Funds intend to purchase, against fluctuations in fair value caused by changes in market values or interest rates.  Upon entering into a financial futures contract, the Funds are required to pledge to the broker an amount of cash, U.S. government securities, or other assets, equal to a certain percentage of the contract amount (initial margin deposit).  Subsequent payments, known as “variation margin” are made or received by the Funds each day, depending on the daily fluctuations in the fair value of the security.  The Funds recognize a gain or loss equal to the daily variation margin.  Should market conditions move unexpectedly, the Funds may not achieve the anticipated benefits of the financial futures contracts and may realize a loss. The use of futures transactions involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates, and the underlying hedged assets.

 

Option Writing - The Baldwin Fund may invest in put and call options.  When a fund writes an option, an amount equal to the premium received by the fund is recorded as a liability and is subsequently adjusted to the current fair value of the option written.  Premiums received from writing options that expire unexercised are treated by the Baldwin Fund on the expiration date as realized gains.  The difference between the premium and the amount paid on effecting a closing purchase transaction, including brokerage commissions, is also treated as a realized gain, or, if the premium is less than the amount paid for the closing purchase transaction, as a realized loss.  





FRANK FUNDS


NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2010 (UNAUDITED)



If a call option is exercised, the premium is added to the proceeds from the sale of the underlying security or currency in determining if the fund has a realized gain or loss.  If a put option is exercised, the premium reduces the cost basis of the securities purchased by the fund.  The Baldwin Fund as writer of an option bears the market risk of an unfavorable change in the price of the security underlying the written option.


Share Valuation - The price (net asset value) of the shares of each Fund is normally determined as of 4:00 p.m., Eastern time on each day the Funds are open for business and on any other day on which there is sufficient trading in the Funds’ securities to materially affect the net asset value. The Funds are normally open for business on every day except Saturdays, Sundays and the following holidays: New Year’s Day, Martin Luther King Day, Presidents Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas.


Redemption Fee - To discourage short-term trades by investors, the Funds will impose a redemption fee of 2.00% of the total redemption amount (calculated at market value) if shares are redeemed within five business days of purchase. There were no redemption fees collected for the Funds’ for the six months ended December 31, 2010.


Security Transaction Timing - Security transactions are recorded on the dates transactions are entered into (the trade dates).  Dividend income and distributions to shareholders are recognized on the ex-dividend date.  Interest income is recognized on an accrual basis.  The Funds use the identified cost basis in computing gain or loss on sale of investment securities.  Discounts and premiums on securities purchased are amortized over the life of the respective securities.  Withholding taxes on foreign dividends are provided for in accordance with the Funds’ understanding of the applicable country’s tax rules and rates.


Income Taxes - The Funds intend to continue to qualify each year as a “regulated investment company” under Subchapter M of the Internal Revenue Code of 1986, as amended. By so qualifying, the Funds will not be subject to federal income taxes to the extent that they distribute substantially all of their net investment income and any realized capital gains. It is the Funds’ policy to distribute annually, prior to the end of the calendar year, dividends sufficient to satisfy excise tax requirements of the Internal Revenue Service. This Internal Revenue Service requirement may cause an excess of distributions over the book year-end accumulated income.


In addition, GAAP requires management of the Funds to analyze all open tax years, fiscal years 2008-2010, as defined by IRS statue of limitations for all major industries, including federal tax authorities and certain tax authorities.  As of and during the six months ended December 31, 2010, the Funds did not have a liability for any unrecognized tax benefits.  The Funds have no examination in progress and is not aware of any tax positions for which it is reasonably possible that the total tax amounts of unrecognized tax benefits will significantly change in the next twelve months.  


Distributions to Shareholders - The Funds intend to distribute to their shareholders substantially all of their net realized capital gains and net investment income, if any, at year-end. Distributions will be recorded on ex-dividend date.


Use of Estimates - The preparation of financial statements in conformity with generally accepted accounting principles 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 during the reporting period.  Actual results could differ from those estimates.  


Subsequent Events – Management has evaluated the impact of all subsequent events through the date the financial statements were issued and has determined that there were no subsequent events requiring recognition or disclosure in these financial statements.  


Note 3. Investment Management, Administration and Underwriting Agreements


Value Fund

The Trust has a Management Agreement with Frank Capital, with respect to the Value Fund. Under the terms of the Management Agreement, Frank Capital manages the investment portfolio of the Value Fund, subject to policies adopted by the Trust’s Board of Trustees. Under the Management Agreement, Frank Capital, at its own expense and without reimbursement from the Trust, furnishes office space and all necessary office facilities, and pays fees and expenses incurred by the Value Fund, including but not limited to, legal, auditing, accounting, and expenses of the custodian, along with equipment and executive personnel necessary for managing the assets of the Value Fund.





FRANK FUNDS


NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2010 (UNAUDITED)



Frank Capital also pays the salaries and fees of all its officers and employees that serve as officers and trustees of the Trust.  Frank Capital pays all ordinary operating expenses of the Value Fund except brokerage fees and commissions, taxes, borrowing costs (such as (a) interest and (b) dividend expenses on securities sold short), acquired fund fees and expenses, and extraordinary expenses. For its services and the payment of Value Fund ordinary operating expenses, Frank Capital receives an annual investment management fee of 1.49% of the average daily net assets of the Value Fund. For the six months ended December 31, 2010, Frank Capital earned fees of $32,235 from the Value Fund.  As of December 31, 2010, the Value Fund owed Frank Capital $5,958.


Baldwin Fund

The Trust has a Management Agreement with LBC with respect to the Baldwin Fund.  Under the terms of the Management Agreement, LBC manages the investment portfolio of the Baldwin Fund, subject to policies adopted by the Trust's Board of Trustees.  Under the terms of the Management Agreement LBC pays all of the expenses of the Baldwin Fund except administrative fees, 12b-1 fees, brokerage fees and commissions, taxes, borrowing costs (such as interest and dividend expense of securities sold short) acquired fund fees and expenses and extraordinary expenses. As compensation for its management services, the Baldwin Fund is obligated to pay LBC a fee computed and accrued daily and paid monthly at an annual rate of 0.45% of the average daily net assets of the Baldwin Fund. For the six months ended December 31, 2010, LBC earned a fee of $8,111 from the Baldwin Fund.  


LBC has contractually agreed to defer its fees and to reimburse expenses, exclusive of any front-end or contingent deferred loads, taxes, leverage interest, brokerage commissions, expenses incurred in connection with any merger or reorganization, dividend expense on securities sold short, underlying fund fees, 12b-1 fees and expenses or extraordinary expenses such as litigation, at least until October 31, 2019,  so that the total annual operating expenses will not exceed 1.75%, subject to possible recoupment from the Baldwin Fund in future years on a rolling three year basis (within the three years after the fees have been deferred  or reimbursed) if such recoupment can be achieved within the foregoing expense limits.  






FRANK FUNDS


NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2010 (UNAUDITED)



LBC reimbursed the Baldwin Fund $50,304 for the six months ended December 31, 2010.  LBC owed the Fund $6,157 for reimbursement of expenses at December 31, 2010.  At June 30, 2010, the amount subject to future recoupment is as follows:


Fiscal Year Ended

Recoverable Through

    Amount

 June 30, 2009

 

   June 30, 2012

  $103,914

 June 30, 2010                           June 30, 2013                          $107,270


Note 4. Related Party Transactions

Brian J. Frank and Monique Weiss are the control persons of Frank Capital.  Brian Frank also serves as a trustee of the Trust, and both Mr. Frank and Ms. Weiss serve as officers of the Trust. Mr. Frank and Ms. Weiss receive benefits from Frank Capital resulting from management fees paid to Frank Capital by the Value Fund.


The Baldwin Fund pays LBC brokerage commissions for executing securities transactions, which are separate from, and in addition to, the fees paid by the Baldwin Fund to LBC for advisory services.  For the six months ended December 31, 2010, LBC was paid $24,781 in brokerage commissions.  Frank Capital receives administration fees from the Baldwin Fund of $5,000 per month.  Administrative fees paid to Frank Capital for the six months ended December 31, 2010, were $34,693. LBC acts as the distributor of the Baldwin Fund.    


Note 5. Capital Share Transactions

The Trust is authorized to issue an unlimited number of shares of separate series.  The total paid-in capital as of December 31, 2010, was $6,643,434 and $4,060,688 for the Value Fund and the Baldwin Fund, respectively.  Transactions in capital were as follows:


Value Fund – Investor Class

July 1, 2010 through December 31, 2010

July 1, 2009 through

June 30, 2010

 

 

 

 

 

 

Shares

Amount

Shares

Amount

Shares sold

278,204

$   2,654,563

490,129

$   4,589,276

Shares reinvested

-

    -

-

    -

Shares redeemed

(124,680)

  (1,149,423)

(96,948)

    (884,449)

    Net Increase

   153,524

$   1,505,140

 393,181

$  3,704,827

Value Fund – Class C

September 23, 2010 (commencement of operations) through December 31, 2010

 

 

 

 

Shares

Amount

Shares sold

22,565

$   224,000

Shares reinvested

7

    69

Shares redeemed

             -

                -

    Net Increase

   22,572

$  224,069



Value Fund – Institutional Class

November 3, 2010 (commencement of operations) through December 31, 2010

 

 

 

 

Shares

Amount

Shares sold

991

$   10,000

Shares reinvested

3

    27

Shares redeemed

             -

              -

    Net Increase

        994

$   10,027



Baldwin Fund

July 1, 2010 through December 31, 2010

July 1, 2009 through

June 30, 2010

 

 

 

 

 

 

Shares

Amount

Shares

Amount

Shares sold

50,856

$    440,105

197,991

$ 1,794,458

Shares reinvested

23,730

    200,182

12,902

    115,261

Shares redeemed

(12,541)

   (107,998)

  (3,509)

     (32,027)

    Net Increase

   62,045

$    532,289

 207,384

$ 1,877,692






FRANK FUNDS


NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2010 (UNAUDITED)



Note 6. Options

As of December 31, 2010, the Baldwin Fund had outstanding written call options valued at $79,970.


Transactions in written call options during the six months ended December 31, 2010 were as follows:

 

Number of

 

Premiums

 

Contracts

 

Received

Options outstanding at June 30, 2010

 941   

 

$         51,635

Options written

 6,082

 

300,614

Options exercised

(2,520)

 

(128,241)

Options expired

 (2,741)

 

(124,064)

Options terminated in closing purchase transaction

            (716)

 

        (45,454)

Options outstanding at June 30, 2010

            1,046

 

$         54,490


As of December 31, 2010, the Baldwin Fund held put options valued at $112,059.


Transactions in put options purchased during the six months ended December 31, 2010 were as follows:

 

Number of

 

Premiums

 

Contracts

 

Paid

Options outstanding at June 30, 2010

 835  

 

        $    209,670

Options purchased

     464

 

95,239

Options expired

             (50)

 

   (3,400)

Options terminated

            (110)

 

        (33,221)

Options outstanding at June 30, 2010  

            1,139

 

$      268,288


The Funds adopted SFAS 161, “Disclosures about Derivative Instruments and Hedging Activities”, effective July 1, 2009.


The location on the statement of assets and liabilities of the Baldwin Fund’s derivative positions, which are not accounted for as hedging instruments under GAAP, is as follows:

  Liability

Derivatives

Call options written                             79,970


Realized and unrealized gains and losses on derivatives contracts entered into during the six months ended December 31, 2010, by the Baldwin Fund are recorded in the following locations in the Statement of Operations:


            Realized

           Unrealized

 Location          Gain/(Loss)

 

Location              Gain/(Loss)

Call options         Realized Gain   

      Change in Unrealized

  Written

         (Loss) on Options     $(53,772)   

Appreciation/(Depreciation) $(242,932)

 Written

       on Options Written


The selling of written call options may tend to reduce the volatility of the Baldwin Fund because the premiums received from selling the options will reduce any losses on the underlying securities, but only by the amount of the premiums. However, selling the options may also limit the Baldwin Fund’s gain on the underlying securities.  Written call options expose the Baldwin Fund to minimal counterparty risk since they are exchange-traded and the exchange’s clearing house guarantees the options against default.


Note 7. Investment Transactions

For the six months ended December 31, 2010, purchases and sales of investment securities other than U.S. Government obligations and short-term investments for the Value Fund aggregated $3,012,530 and $1,286,297, respectively.   


For the six months ended December 31, 2010, purchases and sales of investment securities other than U.S. Government obligations, short-term investments and options for the Baldwin Fund aggregated $8,570,523 and $8,651,858, respectively.  Purchases and sales of options for the Baldwin Fund aggregated $271,955 and $327,376, respectively.   






FRANK FUNDS


NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2010 (UNAUDITED)



Note 8. Tax Matters

As of June 30, 2010, the tax basis components of distributable earnings, unrealized appreciation (depreciation) and cost of investment securities for each of the Funds were as follows:

Value Fund      Baldwin Fund


Undistributed capital gain

$            -0-        $   103,958


Capital loss carryforward expiring 6/30/2017+

$      43,309        $            -0-

       6/30/2018   

        59,239                      -0-

$    102,548        $            -0-


Post-October capital loss deferrals realized between

    11/1/09 and 6/30/2010 *

$      34,508        $       2,355


Gross unrealized appreciation on investment securities

$    106,932         $   107,084

Gross unrealized depreciation on investment securities

$  (540,268)        $  (470,148)

Net unrealized depreciation on investment securities

$  (433,336)        $ (363,064)


Cost of investment securities, including Short Term

    investments **

$  4,788,122        $ 3,782,020


*These deferrals are considered incurred in the subsequent year.


** The difference between book and tax cost represents disallowed wash sales for tax purposes.


+ The capital loss carryforward will be used to offset any capital gains realized by the Value Fund in future years through the expiration date.  The Value Fund will not make distributions from capital gains while a capital loss carry forward remains.


On September 30, 2009, the Baldwin Fund declared a distribution of $0.0680 per share of net investment income. The distribution was paid on September 30, 2009 to shareholders of record on September 29, 2009.


On November 27, 2009, the Baldwin Fund declared a distribution of $0.2980 per share of short-term capital gain. The distribution was paid on November 27, 2009 to shareholders of record on November 26, 2009.


On December 21, 2009, the Baldwin Fund declared a distribution of $0.0358 per share of net investment income. The distribution was paid on December 21, 2009 to shareholders of record on December 18, 2009.


On March 24, 2010, the Baldwin Fund declared a distribution of $0.0500 per share of net investment income. The distribution was paid on March 24, 2010 to shareholders of record on March 23, 2010.


On June 30, 2010, the Baldwin Fund declared a distribution of $0.0470 per share of net investment income. The distribution was paid on June 30, 2010 to shareholders of record on June 29, 2010.


The tax character of the distributions paid were as follows:


 

Value Fund

Baldwin Fund

Distributions paid from:

 

 

     Ordinary income

            $0

$133,660

 

$0

$133,660


Permanent book and tax differences relating to shareholder distributions may result in reclassifications to paid in capital and may affect the per-share allocation between net investment income and realized and unrealized gain/loss.  Undistributed net investment income and accumulated undistributed net realized gain/loss on investment transactions may include temporary book and tax differences which reverse in subsequent periods.  Any taxable income or gain remaining at fiscal year end is distributed in the following year.


Note 9. Control and Ownership

The beneficial ownership, either directly or indirectly, of more than 25% of the voting securities of a fund creates a presumption of control of the fund, under Section 2(a)(9) of the Investment Company Act of 1940, as amended.  As of December 31, 2010, NFS, LLC owned approximately 93.81% of the Baldwin Fund, for the benefit of others, and may be deemed to control the Baldwin Fund.  As of December 31, 2010, Pershing, LLC owned approximately 50.02% of the Value Fund, for the benefit of others, and may be deemed to control the Value Fund.  






FRANK FUNDS


NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2010 (UNAUDITED)



Note 10. New Accounting Pronouncement.

In January 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2010-06 “Improving Disclosures about Fair Value Measurements”.  ASU No. 2010-06 amends FASB Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosures, to require additional disclosures regarding fair value measurements.  Certain disclosures required by ASU No. 2010-06 are effective for interim and annual periods beginning after December 15, 2009, and other required disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years.  Management is currently evaluating the impact ASU 2010-06 will have on the Funds’ financial statement disclosures.


 





FRANK FUNDS


EXPENSE ILLUSTRATION

DECEMBER 31, 2010 (UNAUDITED)



Expense Example


As a shareholder of the Value Fund or Baldwin Fund, you typically incur two types of costs: (1) transactions costs, including, deferred sales, charges (loads) and redemption fees; and (2) ongoing costs, including management fees and distribution and/or service (12b-1) fees.  This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds.


With respect to the Funds the Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period of July 1, 2010 through December 31, 2010.  


Actual Expenses


The first line of the table below 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 entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period.


Hypothetical Example for Comparison Purposes


The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s 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 these 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.





FRANK FUNDS


EXPENSE ILLUSTRATION (CONTINUED)

DECEMBER 31, 2010 (UNAUDITED)






Value Fund - Investor Class

 

 

 

Beginning Account Value

Ending

Account Value

Expenses Paid During the Period *

 

July 1, 2010

 December 31, 2010

July 1, 2010 to December 31, 2010

 

 

 

 

Actual

$1,000.00

$1,228.57

$8.37

Hypothetical (5% Annual

  Return before expenses)

 

 

 

$1,000.00

$1,017.69

$7.58

 

 

 

 

* Expenses are equal to the Fund's annualized expense ratio of 1.49%, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

 

 

 

 

Value Fund - Class C

 

 

 

 

Beginning Account Value

Ending

Account Value

Expenses Paid During the Period *

 

July 1, 2010

 December 31, 2010

July 1, 2010 to December 31, 2010

 

 

 

 

Actual

$1,000.00

$1,105.60

$11.68

Hypothetical (5% Annual

  Return before expenses)

 

 

 

$1,000.00

$1,014.12

$11.17

 

 

 

 

* Expenses are equal to the Fund's annualized expense ratio of 2.20%, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

 

 

 

 

Value Fund - Class C

 

 

 

 

Beginning Account Value

Ending

Account Value

Expenses Paid During the Period *

                                  September 23, 2010

 December 31, 2010

September 23, 2010 to December 31, 2010

 

 

 

 

Actual

$1,000.00

$1,105.60

$6.35

Hypothetical (5% Annual

  Return before expenses)

 

 

 

$1,000.00

$1,007.67

$6.05

 

 

 

 

* Expenses are equal to the Fund's annualized expense ratio of 2.20%, multiplied by the average account value over the period, multiplied by 100/365 (to reflect the one-half year period).





FRANK FUNDS


EXPENSE ILLUSTRATION (CONTINUED)

DECEMBER 31, 2010 (UNAUDITED)






Value Fund - Institutional Class

 

 

 

Beginning Account Value

Ending

Account Value

Expenses Paid During the Period *

 

July 1, 2010

December 31, 2010

July 1, 2010 to December 31, 2010

 

 

 

 

Actual

$1,000.00

$1,023.52

$6.32

Hypothetical (5% Annual

  Return before expenses)

 

 

 

$1,000.00

$1,018.95

$6.31

 

 

 

 

* Expenses are equal to the Fund's annualized expense ratio of 1.24%, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

 

 

 

 

Value Fund - Institutional Class

 

 

 

Beginning Account Value

Ending

Account Value

Expenses Paid During the Period *

                                     November 3, 2010

 December 31, 2010

November 3, 2010 to December 31, 2010

 

 

 

 

Actual

$1,000.00

$1,023.52

$2.03

Hypothetical (5% Annual

  Return before expenses)

 

 

 

$1,000.00

$1,006.08

$2.01

 

 

 

 

* Expenses are equal to the Fund's annualized expense ratio of 1.24%, multiplied by the average account value over the period, multiplied by 59/365 (to reflect the one-half year period).

 

 

 

 

Baldwin Fund

 

 

 

 

Beginning Account Value

Ending

Account Value

Expenses Paid During the Period *

 

July 1, 2010

 December 31, 2010

July 1, 2010 to December 31, 2010

 

 

 

 

Actual

$1,000.00

$1,058.05

$9.08

Hypothetical (5% Annual

  Return before expenses)

 

 

 

$1,000.00

$1,016.38

$8.89

 

 

 

 

* Expenses are equal to the Fund's annualized expense ratio of 1.75%, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).





FRANK FUNDS


BOARD OF TRUSTEES

DECEMBER 31, 2010 (UNAUDITED)



The following table provides information regarding each Trustee who is not an “interested person” of the Trust, as defined in the Investment Company Act of 1940. Each Trustee has an indefinite term.


Name, Address and Age

Position & Length of Time Served with the Trust

Principal Occupations During Past 5 Years and Current Directorships

Matthew D.L. Deutsch,

312 E. 22nd St. #2B.

New York, NY 10010

Age: 29

Trustee since June 2004.

CEO of Deutsch & Thomas, Inc., a seller of professional business plans, September 2005 to present; Investment Strategist and Director, M.D.L. Deutsch and Company, an investment management company, February 2003 to September 2005.

Jason W. Frey,

312 E. 22nd St. #2B.

New York, NY 10010

Age: 32

Trustee since June 2004.

Software Developer, ManageIQ, Inc., a virtualization software company, October 2007 to present; Product Developer, Metavante Corporation (f.k.a. Prime Associates, Inc), a banking software development company, September 2002 to October 2007.

Hemanshu Patel

312 E. 22nd St. #2B.

New York, NY 10010

Age: 26

Trustee since January 2010.

Associate , J. W. Childs Associates, private equity firm, November 2007 to present; Analyst, Citigroup Global Markets, July 2006 to November 2007; Student, Rutgers University, August 2002 to May 2006

Andrea Goncalves

312 E. 22nd St. #2B.

New York, NY 10010

Age: 28

Trustee since January 2010.

Senior Accountant, Security Atlantic Mortgage / REMM, mortgage company, May 2006 to present; Financial Management Associate, Ernst & Young, May 2004 to May 2006







FRANK FUNDS


BOARD OF TRUSTEES (CONTINUED)

DECEMBER 31, 2010 (UNAUDITED)



The following table provides information regarding each Trustee who is an “interested person” of the Trust, as defined in the Investment Company Act of 1940, and each officer of the Trust. Each Trustee and Officer of the Trust has an indefinite term.


Name, Address and Age

Position(s) Held with the Fund

Term of Office and Length of  Time Served

Principal Occupation(s) During Past 5 Years

Number of Portfolios in Fund Complex Overseen by Director

Other Directorships Held by Director


Brian J. Frank1

312 E. 22nd St. #2B

New York, NY 10010

Age: 29


President,

Treasurer, Chief Compliance Officer, and

Trustee


Indefinite/

Treasurer, Secretary

and Chief Compliance Officer, June 2004 – present;

President, September 2009 – present


Chief Financial Officer of Frank Capital Partners LLC since June 2003


2


None


Monique M. Weiss1

312 E. 22nd St. #2B.

New York, NY 10010

Age: 41


Secretary


Indefinite/ September 2009 – present


Self-employed, Consultant to mutual fund industry, 2006 – present; Executive Director, Morgan Stanley Investment Management, 1998 – 2006.


2


None







1 Brian J. Frank is considered an “Interested” Trustee, as defined in the Investment Company Act of 1940, as amended, because he is affiliated with the Adviser.  Brian Frank and Monique Weiss are married.


Additional information regarding the Trustees and Officers is available in the Funds’ Statement of Additional Information.





FRANK FUNDS


ADDITIONAL INFORMATION

DECEMBER 31, 2010 (UNAUDITED)



Each Fund’s Statement of Additional Information ("SAI") includes additional information about the trustees and is available, without charge, upon request.  You may call toll-free (888) 217-5426 to request a copy of the SAI or to make shareholder inquiries.


A description of the policies and procedures that each Fund uses to determine how to vote proxies relating to portfolio securities and information regarding how each Fund voted proxies during the most recent 12-month period ended June 30 are available without charge upon request by (1) calling (888) 217-5426 and (2) from the documents filed with the Securities and Exchange Commission ("SEC") on the SEC's website at www.sec.gov.


Each Fund files a complete schedule of investments with the SEC for the first and third quarter of each fiscal year on Form N-Q.  The Funds’ first and third fiscal quarters end on September 30 and March 31. The Form N-Q filing must be made within 60 days of the end of the quarter. The Funds’ Forms N-Q are available on the SEC’s website at http://sec.gov, or they may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC (call 1-800-732-0330 for information on the operation of the Public Reference Room).  You may also obtain copies by calling (888) 217-5426.















Board of Trustees

Brian J. Frank

Matthew D. L. Deutsch

Jason W. Frey

Andrea Goncalves

Hemanshu Patel


Investment Advisers

Frank Capital Partners, LLC

312 E. 22nd St. #2B

New York, NY 10010


Leigh Baldwin & Co., LLC

112 Albany Street, P.O. Box 660

Cazenovia, NY 13035


Dividend Paying Agent,

Shareholders’ Servicing Agent,

Transfer Agent

Mutual Shareholder Services, LLC


Custodian

Huntington National Bank


Independent Registered Public Accounting Firm

Sanville & Company


Legal Counsel

Thompson Hine LLP





This report is provided for the general information of the shareholders of the Value Fund and the Baldwin Fund. This report is not intended for distribution to prospective investors in the Funds, unless preceded or accompanied by an effective prospectus.









Item 2. Code of Ethics.  Not applicable.


Item 3. Audit Committee Financial Expert.  Not applicable.


Item 4. Principal Accountant Fees and Services.  Not applicable.


Item 5. Audit Committee of Listed Companies.  Not applicable.


Item 6.  Schedule of Investments.  Not applicable – schedule filed with Item 1.


Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Funds.  Not applicable.


Item 8.  Portfolio Managers of Closed-End Funds.  Not applicable.


Item 9.  Purchases of Equity Securities by Closed-End Funds.  Not applicable.


Item 10.  Submission of Matters to a Vote of Security Holders.  


The registrant has not adopted procedures by which shareholders may recommend nominees to the registrant's board of trustees.


Item 11.  Controls and Procedures.  


(a)

Disclosure Controls & Procedures.  Principal executive and financial officers have concluded that Registrant’s disclosure controls & procedures are effective based on their evaluation as of a date within 90 days of the filing date of this report.



(b)

There were no significant changes in the registrant’s internal control over financial reporting that occurred during the registrant’s second fiscal half-year that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.



Item 12.  Exhibits.  


(a)(1)

EX-99.CODE ETH.  Not applicable.


(a)(2)

EX-99.CERT.  Filed herewith.


(a)(3)

Any written solicitation to purchase securities under Rule 23c-1 under the Act (17 CFR 270.23c-1) sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons.  Not applicable.


(b)

EX-99.906CERT.  Filed herewith.



SIGNATURES


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.



Frank Funds


By /s/Brian J. Frank, President & Treasurer

     Brian J. Frank

     President & Treasurer


Date: March 9, 2011


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 /s/Brian J. Frank, President & Treasurer

     Brian J. Frank

     President & Treasurer


Date March 9, 2011