-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EYCAfF39DSIOXw8+94/66FRMegobng7zSo77W857ZMvqUm4y3ZRfuaVP5RkLDtzW cIdL6ZipT65SDCrsZNWM9g== 0001000579-00-000039.txt : 20000407 0001000579-00-000039.hdr.sgml : 20000407 ACCESSION NUMBER: 0001000579-00-000039 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000131 FILED AS OF DATE: 20000406 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERIPRIME FUNDS CENTRAL INDEX KEY: 0001000579 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 752616671 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-09096 FILM NUMBER: 594825 BUSINESS ADDRESS: STREET 1: 1793 KINGSWOOD DR STREET 2: STE 200 CITY: SOUTHLAKE STATE: TX ZIP: 76092 BUSINESS PHONE: 8174311297 MAIL ADDRESS: STREET 1: 1793 KINGSWOOD DRIVE STREET 2: SUITE 200 CITY: SOUTHLAKE STATE: TX ZIP: 76092 N-30D 1 DOBSON COVERED CALL FUND Dear Fellow Shareholder, We are pleased to present the semi-annual report of the Dobson Covered Call Fund as of January 31, 2000. For the six-month period the Fund returned .6% while the S&P 500 Index returned 5.6%. From inception the Fund returned 8.4% while the S&P 500 Index returned 11%. The Fund's standard deviation from inception was 2.22 compared with 4.04 for the Index. This is a risk level that is 55% of the Index. Clearly the major topic of interest has been the performance of the NASDAQ this past six months. Its rapid advance has been surprising to say the least. This unusual dispersion, where a relatively few stocks appreciate at enormous rates while the overwhelming majority of stocks have small or negative returns, tends to distort the overall market return. This was especially evident in the month of December. Dispersions like this occur occasionally in the market but we haven't seen anything this severe. Some of you may remember the energy crisis of the 1980's when you couldn't pay enough for energy stocks. Eventually unusual dispersions abate although no one can predict when. As can be seen in the accompanying report the Fund holds technology stocks in approximately the same percentage as the S&P 500 Technology sector. In hindsight it would have been better to have 100% of the portfolio in technology. Obviously when a particular sector or a few stocks are over-weighted in a portfolio, risk is increased. Since the purpose of a covered call strategy is to reduce risk or volatility, over-weighting is not an investment strategy we follow. That is not to say an investor should not invest in the technology sector. Just like this Fund is diversified, we believe investors should also be diversified among several investment styles according to their risk tolerance. We will continue to do what we do best which is to select the best stock/option combination that provides a risk or volatility that is approximately 60% of the S&P 500 Index. We welcome your comments and questions. Thank you for investing with us. Charles L. Dobson Portfolio Manager
DOBSON COVERED CALL FUND SCHEDULE OF INVESTMENTS - JANUARY 31, 2000 (UNAUDITED) COMMON STOCKS - 94.9% SHARES VALUE BASIC INDUSTRIES - 3.2% PAPER & FOREST PRODUCTS - 3.2% International Paper Co. (a) 1,000 $ 47,625 ----------------- DURABLES - 3.3% AUTOS & AUTO PARTS - 3.3% Ford Motor Co. (a) 1,000 49,750 ----------------- ENERGY - 8.2% ENERGY SERVICES - 4.1% Schlumberger Ltd. (a) 1,000 61,062 ----------------- OIL & GAS - 4.1% Royal Dutch Petroleum ADR (a) 1,000 55,063 Transocean Sedco Forex, Inc. 193 6,140 ----------------- 61,203 ----------------- TOTAL ENERGY 122,265 ----------------- FINANCE - 13.8% BANKS - 9.8% Bank of America Corp. (a) 1,000 48,437 Citigroup, Inc. (a) 1,000 57,563 Wells Fargo, Inc. (a) 1,000 40,000 ----------------- 146,000 ----------------- FEDERAL & FEDERALLY-SPONSORED CREDIT AGENCIES - 4.0% Fannie Mae (a) 1,000 59,938 ----------------- TOTAL FINANCE 205,938 ----------------- HEALTH - 10.5% DIVERSIFIED - 7.6% American Home Products Corp. 1,000 47,063 Bristol-Myers Squibb Co. (a) 1,000 66,000 ----------------- 113,063 ----------------- DRUGS & PHARMACEUTICALS - 2.9% Schering-Plough Corp. (a) 1,000 44,000 ----------------- TOTAL HEALTH 157,063 ----------------- INDUSTRIAL MACHINERY & EQUIPMENT - 2.8% INDUSTRIAL MACHINERY & EQUIPMENT - 2.8% Caterpillar, Inc. (a) 1,000 42,437 ----------------- DOBSON COVERED CALL FUND SCHEDULE OF INVESTMENTS - JANUARY 31, 2000 - CONTINUED (UNAUDITED) COMMON STOCKS - CONTINUED SHARES VALUE MEDIA & LEISURE - 4.9% ENTERTAINMENT - 2.4% Disney (Walt) Co. (a) 1,000 $ 36,250 ----------------- RESTAURANTS - 2.5% McDonald's Corp. (a) 1,000 37,188 ----------------- TOTAL MEDIA & LEISURE 73,438 ----------------- NON-DURABLES - 8.9% BEVERAGES - 3.9% Coca-Cola Co. (a) 1,000 57,437 ----------------- FOODS - 2.5% Heinz (H.J.) Co. (a) 1,000 37,187 ----------------- HOUSEHOLD PRODUCTS - 2.5% Gillette Co. (a) 1,000 37,625 ----------------- TOTAL NON-DURABLES 132,249 ----------------- RETAIL & WHOLESALE - 5.7% BUILDING SUPPLIES - 5.7% Home Depot, Inc. (a) 1,500 84,469 ----------------- TECHNOLOGY - 20.2% COMMUNICATIONS EQUIPMENT - 11.0% Cisco Systems, Inc. (a) (b) 1,000 109,500 Lucent Technologies, Inc. (a) 1,000 55,250 ----------------- 164,750 ----------------- COMPUTER SERVICES & SOFTWARE - 3.4% Oracle Corp. (a) (b) 1,000 49,953 ----------------- COMPUTERS & OFFICE EQUIPMENT - 2.6% Dell Computer Corp. (a) (b) 1,000 38,437 ----------------- ELECTRONIC INSTRUMENTS - 3.2% Honeywell International, Inc. (a) 1,000 48,000 ----------------- TOTAL TECHNOLOGY 301,140 ----------------- DOBSON COVERED CALL FUND SCHEDULE OF INVESTMENTS - JANUARY 31, 2000 - CONTINUED (UNAUDITED) COMMON STOCKS - CONTINUED UTILITIES - 13.4% ELECTRIC UTILITY - 3.9% Duke Energy Corp. 1,000 $ 57,750 ----------------- TELEPHONE SERVICES - 9.5% AT&T Corp. (a) 1,000 52,500 BellSouth Corp. (a) 1,000 46,875 SBC Communications, Inc. (a) 1,000 43,000 ----------------- 142,375 ----------------- TOTAL UTILITIES 200,125 ----------------- TOTAL COMMON STOCKS (COST $1,472,475) 1,416,499 ----------------- PRINCIPAL VALUE VALUE MONEY MARKET SECURITIES - 7.3% Federal Prime Obligation, 5.35% (c) (Cost $109,275) $ 109,275 $ 109,275 ----------------- TOTAL INVESTMENTS - 102.2% (Cost $1,581,750) 1,525,774 ----------------- Liabilities in excess of other assets - (2.2%) (32,671) ----------------- Total Net Assets - 100.0% $ 1,493,103 ================= (a) Security is segregated as collateral for options written. (b) Non-income producing (c) Variable rate security; the coupon rate shown represents the rate at January 31, 2000.
CALL OPTIONS WRITTEN JANUARY 31, 2000 SHARES SUBJECT COMMON STOCKS / EXPIRATION DATE @ EXERCISE PRICE TO CALL VALUE AT&T Corp. / April 2000 @ 55 1,000 $ 3,000 Bank of America Corp. / March 2000 @ 50 1,000 2,500 BellSouth Corp. / April 2000 @ 50 1,000 1,688 Bristol-Myers Squibb, Inc. / March 2000 @ 70 1,000 2,437 Caterpillar, Inc. / March 2000 @ 50 1,000 688 Cisco Systems, Inc. / February 2000 @ 115 1,000 3,875 Citigroup, Inc. / March 2000 @ 55 1,000 5,000 Coca-Cola Co. / May 2000 @ 70 1,000 875 Dell Computer Corp. / February 2000 @ 45 1,000 313 Disney (Walt) Co. / February 2000 @ 35 1,000 2,125 Fannie Mae / March 2000 @ 65 1,000 1,312 Ford Motor Co. / March 2000 @ 55 1,000 750 Gillette Co. / March 2000 @ 45 1,000 500 Heinz (H.J.) Co. / March 2000 @ 40 1,000 625 Home Depot, Inc. / February 2000 @ 100 1,000 219 Honeywell International, Inc. / February 2000 @ 60 1,000 63 International Paper, Inc. / April 2000 @ 55 1,000 1,375 Lucent Technologies, Inc. / February 2000 @ 60 1,000 812 McDonald's Corp. / March 2000 @ 45 1,000 250 Oracle Corp. / February 2000 @ 55 1,000 1,875 Royal Dutch Petroleum ADR / April 2000 @ 65 1,000 437 SBC Communications, Inc. / April 2000 @ 50 1,000 1,625 Schering-Plough, Inc. / February 2000 @ 50 1,000 500 Schlumberger Ltd. / February 2000 @ 60 1,000 8,250 Wells Fargo, Inc. / March 2000 @ 40 1,000 2,312 ----------------- Total (premiums received $58,436) $ 43,406 =================
DOBSON COVERED CALL FUND JANUARY 31, 2000 STATEMENT OF ASSETS & LIABILITIES (UNAUDITED) ASSETS Investment in securities (cost $1,581,750) $ 1,525,774 Dividends receivable 2,171 Interest receivable 370 Receivable for securities sold 96,147 Receivable from investment advisor for reimbursed expenses 5,230 ------------------- TOTAL ASSETS 1,629,692 LIABILITIES Accrued investment advisory fee payable $ 0 Other payables and accrued expenses 9,288 Payable for securities purchased 83,895 Covered call options written - premiums received $58,436 43,406 ----------------- TOTAL LIABILITIES 136,589 ------------------- NET ASSETS $ 1,493,103 =================== Net Assets consist of: Paid in capital 1,519,222 Accumulated undistributed net investment income 759 Accumulated undistributed net realized gain on investments 54,625 Accumulated undistributed net realized loss on options transactions (40,556) Net unrealized depreciation on investments (40,947) ------------------- NET ASSETS, for 144,164 shares $ 1,493,103 =================== NET ASSET VALUE Net Assets Offering price and redemption price per share ($1,493,103/144,164) $ 10.36 ===================
DOBSON COVERED CALL FUND STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED) INVESTMENT INCOME Dividend income $ 10,038 Interest income 2,214 --------------- TOTAL INCOME 12,252 EXPENSES Investment advisory fees 0 Administration fees 15,000 Legal fees 10,441 Transfer agent fees 6,915 Custodian fees 5,438 Pricing & bookkeeping fees 4,800 Audit fees 2,750 Shareholder reports 1,960 Trustees' fees 1,482 Registration fees 1,340 ------------------ Total expenses before reimbursement 50,126 Reimbursed expenses (39,053) ------------------ Total operating expenses 11,073 --------------- NET INVESTMENT INCOME 1,179 --------------- REALIZED & UNREALIZED GAIN (LOSS) Net realized gain on investment securities 56,345 Net realized gain on options transactions 19,355 Change in net unrealized appreciation (depreciation) on investment securities (69,572) ------------------ Net gain on investment securities 6,128 --------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 7,307 ===============
DOBSON COVERED CALL FUND STATEMENT OF CHANGES IN NET ASSETS FOR THE SIX MONTHS ENDED FOR THE JANUARY 31, 2000 PERIOD ENDED (UNAUDITED) JULY 31, 1999 (A) -------------------- ---------------------- Increase (Decrease) in Net Assets OPERATIONS Net investment income $ 1,179 $ 1,310 Net realized gain on investment securities 56,345 3,690 Net realized gain on options transactions 19,355 929 Change in net unrealized appreciation (depreciation) (69,572) 28,626 -------------------- ---------------------- Net increase in net assets resulting from operations 7,307 34,555 -------------------- ---------------------- DISTRIBUTIONS TO SHAREHOLDERS From investment income (1,730) - From net realized gain (66,251) - -------------------- ---------------------- Total Distributions (67,981) - -------------------- ---------------------- SHARE TRANSACTIONS Net proceeds from sale of shares 113,957 1,340,688 Shares issued in reinvestment 67,980 - Shares redeemed (3,403) - -------------------- ---------------------- NET INCREASE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS 178,534 1,340,688 -------------------- ---------------------- TOTAL INCREASE IN NET ASSETS 117,860 1,375,243 -------------------- ---------------------- Net Assets Beginning of period 1,375,243 - -------------------- ---------------------- End of period [including accumulated undistributed net investment income of $759 and $1,310, respectively] $ 1,493,103 $ 1,375,243 ==================== ====================== (a) March 24, 1999 (commencement of operations) to July 31, 1999
DOBSON COVERED CALL FUND FINANCIAL HIGHLIGHTS FOR THE SIX MONTHS ENDED FOR THE JANUARY 31, 2000 PERIOD ENDED (UNAUDITED) JULY 31, 1999 (C) --------------------- -------------------- SELECTED PER SHARE DATA Net asset value, beginning of period $ 10.78 $ 10.00 --------------------- -------------------- Income from investment operations Net investment income 0.01 0.01 Net realized and unrealized gain 0.06 0.77 --------------------- -------------------- Total from investment operations 0.07 0.78 --------------------- -------------------- Less Distributions From net investment income (0.01) 0.00 From net realized gain (0.48) 0.00 --------------------- -------------------- Total Distributions (0.49) 0.00 --------------------- -------------------- Net asset value, end of period $ 10.36 $ 10.78 ===================== ==================== TOTAL RETURN (b) 0.58% 7.80% RATIOS AND SUPPLEMENTAL DATA Net assets, end of period (000) $1,493 $1,375 Ratio of expenses to average net assets 1.50% (a) 1.50% (a) Ratio of expenses to average net assets before reimbursement 6.79% (a) 9.77% (a) Ratio of net investment income to average net assets 0.16% (a) 0.32% (a) Ratio of net investment income to average net assets before reimbursement (5.13)(a) (7.95)(a) Portfolio turnover rate 40.76% (a) 47.01% (a) (a) Annualized (b) For periods of less than a full year, total returns are not annualized. (c) March 24, 1999 (commencement of operations) to July 31, 1999
DOBSON COVERED CALL FUND NOTES TO FINANCIAL STATEMENTS JANUARY 31, 2000 (UNAUDITED) NOTE 1. ORGANIZATION Dobson Covered Call Fund (the "Fund") was organized as a series of the AmeriPrime Funds, an Ohio business trust (the "Trust"), on March 22, 1999 and commenced operations on March 24, 1999. The Fund is registered under the Investment Company Act of 1940, as amended, as a diversified open-end management investment company. The Fund's investment objective is to achieve above average return consistent with lower risk than the S&P 500 Index. The Declaration of Trust permits the Trustees to issue an unlimited number of shares of beneficial interest of separate series without par value. NOTE 2. SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. SECURITIES VALUATIONS- Securities which are traded on any exchange or on the NASDAQ over-the-counter market are valued at the last quoted sale price. Lacking a last sale price, a security is valued at its last bid price except when, in the Advisor's opinion, the last bid price does not accurately reflect the current value of the security. All other securities for which over-the-counter market quotations are readily available are valued at their last bid price. When market quotations are not readily available, when the Advisor determines the last bid price does not accurately reflect the current value or when restricted securities are being valued, such securities are valued as determined in good faith by the Advisor, in conformity with guidelines adopted by and subject to review of the Board of Trustees of the Trust (the "Board"). 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 Advisor 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. 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 Advisor, subject to review of the Board. 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. DOBSON COVERED CALL FUND NOTES TO FINANCIAL STATEMENTS JANUARY 31, 2000 - (UNAUDITED) - CONTINUED NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED OPTION WRITING- When the 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 Fund on the expiration date as realized gains from investments. 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. If a call option is exercised, the premium is added to the proceeds from the sale of the underlying security or currency in determining whether the Fund has realized a gain or loss. If a put option is exercised, the premium reduces the cost basis of the securities purchased by the fund. The Fund as writer of an option bears the market risk of an unfavorable change in the price of the security underlying the written option. FEDERAL INCOME TAXES- The Fund intends to qualify each year as a "regulated investment company" under the Internal Revenue Code of 1986, as amended. By so qualifying, the Fund will not be subject to federal income taxes to the extent that it distributes substantially all of its net investment income and any realized capital gains. DIVIDENDS AND DISTRIBUTIONS- The Fund intends to distribute substantially all of its net investment income as dividends to its shareholders on an annual basis. The Fund intends to distribute its net long-term capital gains and its net short-term capital gains at least once a year. OTHER- The Fund follows industry practice and records security transactions on the trade date. The specific identification method is used for determining gains or losses for financial statements and income tax purposes. Dividend income is recorded on the ex-dividend date and interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the life of the respective securities. NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES The Fund retains Dobson Capital Management, Inc., (the "Advisor") to manage the Fund's investments. The Advisor is a California corporation established in September 1998. Charles L. Dobson is the president, Director and sole shareholder of the advisor, and is primarily responsible for the day-to-day management of the Fund's portfolio. DOBSON COVERED CALL FUND NOTES TO FINANCIAL STATEMENTS JANUARY 31, 2000 - (UNAUDITED) - CONTINUED NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED Under the terms of the management agreement, (the "Agreement"), the Advisor manages the Fund's investments subject to approval of the Board of Trustees. As compensation for its management services, the Fund is obligated to pay the Advisor a fee computed and accrued daily and paid monthly at an annual rate of 0.80% of the average daily net assets of the Fund, less the amount total operating expenses, including management fees, exceed 1.50% of the average value of its daily net assets, to the extent the management fee equals zero. The remaining portion of expenses will be reimbursed by the Advisor. For the six months ended January 31, 2000, the Advisor received fees of $0 from the Fund. For the six months ended January 31, 2000, the Advisor reimbursed expenses of $39,053. Certain officers and directors of the Advisor are also officers and directors of the Trust. The Fund retains AmeriPrime Financial Services, Inc. (the "Administrator") to manage the Fund's business affairs and provide the Fund with administrative services, including all regulatory reporting and necessary office equipment and personnel. For the six months ended January 31, 2000, the Administrator received fees of $15,000 from the Advisor for administrative services provided to the Fund. The Fund retains AmeriPrime Financial Securities, Inc. ("the Distributor") to act as the principal distributor of the Fund's shares. The Fund has adopted a plan, pursuant to Rule 12b-1 under the Investment Company Act of 1940, which permits the Fund to pay directly, or reimburse the Fund's Advisor and Distributor, for certain distribution and promotion expenses related to marketing its shares, in an amount not to exceed 0.25% of the average daily net assets of the Fund. There were no payments made to the Distributor for the six months ended January 31, 2000. Certain members of management of the Administrator and the Distributor are also members of management of the Trust. NOTE 4. SHARE TRANSACTIONS As of January 31, 2000, there were an unlimited number of authorized shares for the Fund. Paid in capital at January 31, 2000 was $1,519,222. DOBSON COVERED CALL FUND NOTES TO FINANCIAL STATEMENTS JANUARY 31, 2000 - (UNAUDITED) - CONTINUED NOTE 4. SHARE TRANSACTIONS - CONTINUED Transactions in shares were as follows:
FOR THE SIX MONTHS ENDED FOR THE PERIOD MARCH 24, 1999 (COMMENCEMENT JANUARY 31, 2000 OF OPERATIONS) TO JULY 31, 1999 SHARES DOLLARS SHARES DOLLARS Shares sold 10,504 $113,957 127,555 $1,340,688 Shares issued in reinvestment 6,425 67,980 - - Shares redeemed (320) (3,403) - - -------- -------- -------- ---------- 16,609 $178,534 127,555 $1,340,688 ======== ======== ======== ==========
NOTE 5. INVESTMENTS For the six months ended January 31, 2000, purchases and sales of investment securities, other than short-term investments, aggregated $351,860 and $289,888, respectively. As of January 31, 2000, the gross unrealized appreciation for all securities totaled $137,005 and the gross unrealized depreciation for all securities totaled $177,952 for a net unrealized depreciation of $40,947. The aggregate cost of securities for federal income tax purposes at January 31, 2000 was $1,581,750. NOTE 6. ESTIMATES Preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. NOTE 7. RELATED PARTY TRANSACTIONS The Advisor is not a registered broker-dealer of securities and thus does not receive commissions on trades made on behalf of the Fund. 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 of January 31, 2000, Charles L. Dobson, President of the Advisor, beneficially owned in aggregate more than 73% of the Fund. DOBSON COVERED CALL FUND NOTES TO FINANCIAL STATEMENTS JANUARY 31, 2000 - (UNAUDITED) - CONTINUED NOTE 8. CALL OPTIONS WRITTEN As of January 31, 2000, portfolio securities valued at $1,277,391 were held in escrow by the custodian as cover for call options written by the Fund. Transactions in options written during the six months ended January 31, 2000 were as follows: NUMBER OF PREMIUMS CONTRACTS RECEIVED Options outstanding at July 31, 1999 240 $71,908 Options written 750 185,682 Options terminated in closing purchase transactions (300) (79,572) Options expired (400) (102,972) Options exercised (40) (16,610) ------------- -------------- Options outstanding at January 31, 2000 250 $58,436 ============= ==============
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