N-Q 1 franknq.htm UNITED STATES

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549



FORM N-Q


QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

 MANAGEMENT INVESTMENT COMPANY


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

6 Stacy Court, Parsippany, NJ  07054

 (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: September 30, 2011


Form N-Q is to be used by management investment companies, other than small business investment companies registered on Form N-5 (ss.ss. 239.24 and 274.5 of this chapter), to file reports with the Commission, not later than 60 days after the close of the first and third fiscal quarters, pursuant to rule 30b1-5 under the Investment Company Act of 1940 (17 CFR 270.30b1-5).  The Commission may use the information provided on Form N-Q in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-Q, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-Q 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 the Secretary, Securities and Exchange Commission, and 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. SCHEDULE OF INVESTMENTS.



Frank Value Fund

 

Schedule of Investments

 

September 30, 2011 (Unaudited)

 
       

Shares

    

Value

 
       

COMMON STOCKS - 94.92%

    
       

Apparel & Other Finished Prods of Fabrics & Similar Material - 2.55%

    

12,165

 

Cato Corp. Class-A

  

$       274,442

 
       

Communications Services, NEC - 2.31%

    

9,877

 

Neustar, Inc. Class-A *

  

248,308

 
       

Computer Communications Equipment - 2.74%

    

18,984

 

Cisco Systems, Inc.

  

294,252

 
       

Electronic Computers - 4.78%

    

36,339

 

Dell, Inc. *

  

513,833

 
       

Finance Services - 3.62%

    

8,674

 

American Express Co.

  

389,463

 
       

Fire, Marine & Casualty Insurance - 5.20%

    

7,868

 

Berkshire Hathaway, Inc. Class-B *

  

558,943

 
       

Hospital & Medical Service Plans - 10.81%

    

7,159

 

Humana, Inc.

  

520,674

 

7,464

 

WellCare Health Plans, Inc. *

  

283,483

 

5,497

 

Wellpoint, Inc.

  

         358,844

 
     

1,163,001

 

Pharmaceutical Preparations - 4.98%

    

30,306

 

Pfizer, Inc.

  

535,810

 
       

Retail-Apparel & Accessory Stores - 5.12%

    

10,422

 

Aeropostale, Inc.*

  

112,662

 

9,480

 

DSW, Inc. Class-A

  

         437,786

 
     

550,448

 

Retail-Computer & Computer Software - 2.12%

    

9,879

 

Gamestop Corp. Class-A *

  

228,205

 
       

Retail-Radio, TV & Consumer Electronics Stores - 1.70%

    

7,842

 

Best Buy Co., Inc.

  

182,719

 
       

Semiconductors & Related Devices - 4.53%

    

22,853

 

Intel Corp.

  

487,569

 
       

Services-Advertising Agencies - 2.95%

    

20,395

 

Valueclick, Inc. *

  

317,346

 
       

Services-Business Services - 12.29%

    

8,224

 

eBay, Inc. *

  

242,526

 

1,165

 

MasterCard, Inc. Class-A

  

369,491

 

3,952

 

Visa, Inc. Class-A

  

338,765

 

24,276

 

Western Union Co.

  

         371,180

 
     

1,321,962

 

Services-Computer Programming, Date Processing, Etc. - 4.70%

    

981

 

Google, Inc. Class-A *

  

505,254

 
       

Services-Consumer Credit Reporting - 1.85%

    

3,247

 

Dun & Bradstreet Corp.

  

198,911

 
       

Services-Educational Services - 1.55%

    

12,753

 

Career Education Corp. *

  

166,427

 
       

Services-Engineering, Accounting, Research, Management - 1.74%

    

15,863

 

SAIC, Inc. *

  

187,342

 
       

Services-Mailing, Reproduction - 0.62%

    

19,860

 

American Reprographics Co. *

  

66,730

 
       

Services-Management Consulting - 2.33%

    

8,423

 

Corporate Executive Board Co.

  

251,005

 
       

Services-Personal Services - 6.61%

    

21,450

 

H&R Block, Inc.

  

285,500

 

7,300

 

Weight Watchers International, Inc.

  

         425,225

 
     

710,725

 

Services-Prepackaged Software - 6.65%

    

10,823

 

CA Technologies, Inc.

  

210,074

 

20,293

 

Microsoft Corp.

  

         505,093

 
     

715,167

 

Telegraph & Other Message Communications - 3.17%

    

12,682

 

J2 Global Communications, Inc.

  

         341,146

 
       

TOTAL FOR COMMON STOCKS (Cost $10,232,205) - 94.92%

  

$   10,209,008

 
       

SHORT TERM INVESTMENTS - 5.03%

    

540,592

 

Fidelity Institutional Money Market Portfolio

  

         540,592

 
  

    0.15% ** (Cost $540,592)

    
       

TOTAL INVESTMENTS (Cost $10,772,797) - 99.95%

  

$   10,749,600

 
       

OTHER ASSETS LESS LIABILITIES- 0.05%

  

           5,729

 
       

NET ASSETS - 100.00%

  

$   10,755,329

 
       

* Non-income producing securities during the period.

    

** Variable rate security; the coupon rate shown represents the yield at September 30, 2011.

   
       

NOTES TO FINANCIAL STATEMENTS

    

Frank Value Fund

    

1. SECURITY TRANSACTIONS

    

At September 30, 2011, the net unrealized appreciation on investments, based on cost for federal income tax purposes of $10,772,797 amounted to $23,197 which consisted of aggregate gross unrealized appreciation of $1,032,224 and aggregate gross unrealized

depreciation of $1,055,421.

    
       

2. 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.

       

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.

       

In accordance with FAS 157, fair value is defined as the price that the Funds would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. FAS 157 also establishes a framework for measuring fair value, and a three-level hierarchy for fair value measurements based upon the transparency  of  inputs  to  the valuation of an asset or liability.  The three-tier hierarchy of inputs is summarized below:

       

Valuation Inputs of Assets

Level 1

Level 2

Level 3

Total

Common Stock

$10,209,008

              $0

              $0

$10,209,008

Exchange Traded Funds

              $0

              $0

              $0

              $0

Convertible Bonds

              $0

              $0

              $0

              $0

Cash Equivalents

$540,592

              $0

              $0

$540,592

Total

  

$10,749,600

       $0

       $0

$10,749,600




Leigh Baldwin Total Return Fund

Schedule of Investments

September 30, 2011 (Unaudited)

       

Shares

     

Value

       

COMMON STOCKS - 62.80%

    
       

Accident & Health Insurance - 4.07%

    

4,400

 

AFLAC, Inc.

   

$          153,780

       

Beverages - 2.01%

    

1,000

 

Diageo Plc.

   

75,930

       

Cigarettes - 1.65%

    

1,000

 

Philip Morris International, Inc.

   

62,380

       

Crude Petroleum & Natural Gas - 3.56%

    

6,000

 

Petroleo Brasileiro S.A. (Brazil)

   

134,700

       

Farm Machinery & Equipment - 4.78%

    

2,800

 

John Deere & Co.

   

180,796

       

Finance Services - 4.51%

    

1,000

 

American Express Co.

   

44,900

2,000

 

Financial Engines, Inc. *

   

36,220

10,000

 

Oneida Financial Corp.

   

              89,399

      

170,519

Metal Mining - 1.61%

    

2,000

 

Freeport McMoran Copper & Gold, Inc.

   

60,900

       

National Commercial Banks - 0.56%

    

2,000

 

Valley National Bank

   

21,180

       

Office Machines, NEC - 4.18%

    

8,400

 

Pitney Bowes, Inc.

   

157,920

       

Petroleum Refining - 3.27%

    

1,000

 

Exxon Mobil Corp.

   

72,630

2,000

 

Suncor Energy, Inc.

   

              50,880

      

123,510

Pharmaceutical Preparations - 5.05%

    

3,000

 

Johnson & Johnson

   

191,070

       

Refuse Systems - 5.17%

    

6,000

 

Waste Management, Inc.

   

195,360

       

Retail-Drug Stores & Proprietary Stores - 0.95%

    

4,000

 

PetMed Express, Inc.

   

36,000

       

Retail-Variety Stores - 5.49%

    

4,000

 

Wal-Mart Stores, Inc.

   

207,600

       

Security Brokers, Dealers & Flotation Companies - 2.98%

    

10,000

 

Schwab Corp.

   

112,700

       

Semiconductors & Related Devices - 3.43%

    

5,000

 

Cree, Inc. *

   

129,900

       

Services-Motion Picture & Video Tape Production - 1.92%

    

4,000

 

Dreamworks Animation SKG, Inc. *

   

72,720

       

Services-Prepackaged Software - 3.95%

    

6,000

 

Microsoft Corp.

   

149,340

       

Services-Video Tape Rental - 0.30%

    

100

 

Netflix, Inc. *

   

11,327

       

Steel Works, Blast Furnaces & Rolling Mills (Coke Ovens) - 3.37%

    

8,000

 

Mittal Steel Co. N.V.

   

127,280

       

TOTAL FOR COMMON STOCKS (Cost $2,790,475) - 62.80%

   

$        2,374,912

       

EXCHANGE TRADED FUNDS - 10.63%

    

7,000

 

Aberdeen Asia Pacific Fund

   

$            48,230

1,000

 

Direxion Large Cap Bear 3X Shares *

   

46,280

5,000

 

The Gabelli Global Gold, Natural Resources & Income Trust

   

71,550

3,000

 

ProShares UltraShort Gold *

   

57,510

5,000

 

ProShares UltraPro Short S&P500 *

   

102,400

2,000

 

ProShares Ultra  S&P500

   

              75,940

       

TOTAL FOR EXCHANGE TRADED FUNDS (Cost $404,539) - 10.63%

   

$          401,910

       

 PUT OPTIONS

    
       

Shares Subject

 

Underlying Security

    

to Put

 

Expiration Date/Exercise Price

    
       
  

AFLAC, Inc.

    

4,000

 

January 2013 Put @ 35.00

   

$            32,000

       
  

Mittal Steel Co. N.V.

    

8,000

 

January 2013 Put @ 15.00

   

              31,200

       
  

Bristol Myers Squibb Co.

    

6,500

 

January 2013 Put @ 22.50

   

                9,165

       
  

Cree, Inc.

    

5,000

 

January 2013 Put @ 25.00

   

              35,500

       
  

Ebay, Inc.

    

6,000

 

January 2013 Put @ 25.00

   

              23,700

       
  

General Mills, Inc.

    

4,500

 

January 2013 Put @ 30.00

   

                6,120

       
  

John Deere & Co.

    

2,500

 

January 2013 Put @ 55.00

   

              22,750

       
  

Johnson & Johnson

    

2,500

 

January 2013 Put @ 55.00

   

              11,000

       
  

Petroleo Brasileiro S.A.

    

6,000

 

January 2013 Put @ 25.00

   

              37,380

       
  

Pitney Bowes, Inc.

    

8,000

 

January 2013 Put @ 20.00

   

              33,600

       
  

Proctor & Gamble Co.

    

3,000

 

January 2013 Put @ 50.00

   

                7,530

       
  

Schwab Corp.

    

10,000

 

January 2013 Put @ 12.50

   

              30,000

       
  

Wal Mart Stores, Inc.

    

2,000

 

January 2013 Put @ 40.00

   

                4,140

       
  

Waste Management, Inc.

    

5,000

 

January 2013 Put @ 25.00

   

              12,250

       
  

TOTAL (Premiums Paid $186,903) - 7.84%

   

$          296,335

       

SHORT TERM INVESTMENTS - 20.62%

    

779,698

 

Fidelity Institutional Government Money Market Fund-Class I, 0.01%** (Cost $779,698)

 

            779,698

       

TOTAL INVESTMENTS (Cost $4,161,615) - 101.88%

   

$        3,852,855

       

LIABILITIES IN EXCESS OF OTHER ASSETS - (1.88%)

   

           (71,170)

       

NET ASSETS - 100.00%

   

$        3,781,685

       

* Non-income producing securities during the period.

    

** Variable rate security; the coupon rate shown represents the yield at September 30, 2011.

   
       

Leigh Baldwin Total Return Fund

Schedule of Options Written

September 30, 2011 (Unaudited)

       
  

CALL OPTIONS WRITTEN

    
       

Shares Subject

 

Underlying Security

    

to Call

 

Expiration Date/Exercise Price

   

Value

       
  

AFLAC, Inc.

    

4,400

 

 October 2011 Call @ 37.00

   

                4,620

       
  

American Express Co.

    

1,000

 

 September 2011 Call @ 48.00

   

                    10

       
  

Cree, Inc.

    

5,000

 

 October 2011 Call @ 35.00

   

                  900

       
  

Diageo, Plc

    

1,000

 

 October 2011 Call @ 75.00

   

                3,100

       
  

Dreamworks Animation SKG, Inc.

    

4,000

 

 October 2011 Call @ 20.00

   

                1,800

       
  

Exxon Mobil Corp.

    

1,000

 

 September 2011 Call @ 70.00

   

                3,200

       
  

Financial Engines, Inc.

    

2,000

 

 October 2011 Call @ 22.50

   

                  700

       
  

Freeport McMoran Copper & Gold, Inc.

    

2,000

 

 September 2011 Call @ 32.00

   

                    40

       
  

John Deere & Co.

    

2,800

 

 October 2011 Call @ 67.50

   

                5,600

       
  

Johnson & Johnson

    

3,000

 

 October 2011 Call @ 65.00

   

                3,270

       
  

Microsoft Corp.

    

6,000

 

 October 2011 Call @ 28.00

   

                  480

       
  

Mittle Steel Co. N.V.

    

8,000

 

 October 2011 Call @ 20.00

   

                1,040

       
  

Netflix, Inc.

    

100

 

 September 2011 Call @ 140.00

   

                      6

       
  

PetMed Express, Inc.

    

4,000

 

 October 2011 Call @ 10.00

   

                  800

       
  

Petroleo Brasileiro S.A.

    

6,000

 

 October 2011 Call @ 28.00

   

                    60

       
  

Philip Morris International, Inc.

    

1,000

 

 October 2011 Call @ 60.00

   

                3,590

       
  

Pitney Bowes, Inc.

    

8,400

 

 October 2011 Call @ 20.00

   

                2,100

       
  

ProShares UltraShort Gold

    

3,000

 

 October 2011 Call @ 17.00

   

                8,100

       
  

ProShares UltraPro Short S&P 500

    

5,000

 

 October 2011 Call @ 20.00

   

              12,250

       
  

ProShares Ultra S&P 500

    

2,000

 

 October 2011 Call @ 46.00

   

                  560

       
  

Schwab Corp.

    

10,000

 

 October 2011 Call @ 13.00

   

                1,500

       
  

Suncor Energy, Inc.

    

2,000

 

 September 2011 Call @ 27.00

   

                    20

       
  

Valley National Bank

    

2,000

 

 October 2011 Call @ 11.00

   

                1,000

       
  

Wal Mart Stores, Inc.

    

4,000

 

 October 2011 Call @ 52.50

   

                3,720

       
  

Waste Management, Inc.

    

6,000

 

 October 2011 Call @ 33.00

   

                7,200

       
  

Total (Premiums Received $73,701)

   

$            65,666

       

NOTES TO FINANCIAL STATEMENTS

    

Leigh Baldwin Total Return Fund

    

1. SECURITY TRANSACTIONS

    

At September 30, 2011, the net unrealized depreciation on investments, based on cost for federal income tax purposes of $4,358,568 amounted to $133,259, which consisted of aggregate gross unrealized appreciation of $76,903 and aggregate gross unrealized depreciation of $210,162.

       

2. 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.     

In accordance with FAS 157, fair value is defined as the price that the Funds would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. FAS 157 also establishes a framework for measuring fair value, and a three-level hierarchy for fair value measurements based upon the transparency  of  inputs  to  the valuation of an asset or liability.  The three-tier hierarchy of inputs is summarized below:

       

Valuation Inputs of Assets

Level 1

Level 2

Level 3

Total

Common Stock

$2,374,912

              $0

              $0

$2,374,912

Exchange Traded Funds

$401,910

              $0

              $0

$401,910

Real Estate Investment Trusts

$                0

$0

$0

$0

Options Purchased

$       296,335

              $0

              $0

$296,335

Cash Equivalents

$       779,698

              $0

              $0

$779,698

Total

  

$3,852,855

$0

       $0

$3,852,855

       
       

Valuation Inputs of Liabilities

Level 1

Level 2

Level 3

Total

Options Written

$           65,666

       $0

$0

$65,666

Total

  

$           65,666

       $0

       $0

$65,666





ITEM 2. CONTROLS AND PROCEDURES.


     (a)


EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. The Registrant maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Registrant's filings under the Securities Exchange Act of 1934 and the Investment Company Act of 1940 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to the Registrant's management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Registrant's management, including the principal executive officer and the principal financial officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Within 90 days prior to the filing date of this Quarterly Schedule of Portfolio Holdings on Form N-Q, the Registrant had carried out an evaluation, under the supervision and with the participation of the Registrant's management, including the Registrant's principal executive officer and the Registrant's principal financial officer, of the effectiveness of the design and operation of the Registrant's disclosure controls and procedures. Based on such evaluation, the Registrant's principal executive officer and principal financial officer concluded that the Registrant's disclosure controls and procedures are effective.

     (b)

CHANGES IN INTERNAL CONTROLS. There have been no significant changes in the Registrant's internal controls or in other factors that could significantly affect the internal controls subsequent to the date of their evaluation in connection with the preparation of this Quarterly Schedule of Portfolio Holdings on Form N-Q.


ITEM 3. EXHIBITS.


Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.


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

 Brian J. Frank

 President


Date: November 2, 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

Brian J. Frank

President


Date November 2, 2011


By /s/Monique M. Weiss

Monique M. Weiss

Secretary


Date November 2, 2011