N-30D 1 0001.txt AMERIPRIME FUNDS COLUMBIA PARTNERS Equity Fund Dear Fellow Shareholders: We are pleased to present the investment results for the Columbia Partners Equity Fund. The Fund in the six-month period since we last reported to you, September 30, 1999 to March 31, 2000, was up 53.3% and for the past twelve months ended March 31, 2000, was up 76.6%. The Fund's investment results are compared to the unmanaged S&P 500 Index and the Russell 2000 Index in the table and chart below. Returns for the Periods Ending March 31, 2000 Since Inception Fund/Index 1st Quarter 2000 6 Months 1 Year (April 1, 1999) ---------- ---------------- -------- ------ --------------- Columbia Partners Equity Fund 27.2% 53.3% 76.6% 76.6% S&P 500 Index 2.3% 17.5% 17.9% 17.9% Russell 2000 Index 7.1% 26.2% 37.3% 37.3% Columbia Partners Equity Fund S&P 500 Index Russell 2000 Index $17,656 $11,794 $13,558 ------------------ ------------- ------------------ 3/31/99 $10,000 $10,000 $10,000 6/30/99 10,980 10,705 11,510 9/30/99 10,940 10,036 10,746 12/31/99 13,880 11,530 12,694 3/31/00 17,656 11,794 13,558 The Columbia Partners Equity Fund's historical results are net of all expenses, and assume reinvestment of dividends and capital gains since April 1, 1999 (commencement of operations), versus the gross market benchmarks (the S&P 500 Index and the Russell 2000 Index), which assume all dividends are reinvested. When trying to achieve benchmark returns, investment management fees, transaction costs and execution costs will be incurred. PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. Review & Outlook The equity markets' performance since our last report has been a continuation of trends that have been long standing: positive returns, growth stocks outperforming value stocks, and the technology sector providing the greatest returns. The numbers, however, mask a volatile first quarter in 2000 that took investors, and the NASDAQ market in particular, on a wild roller coaster ride. After a few shaky days in early January, technology and biotech stocks got back down to the important business of heading to the stratosphere. At its peak on March 10, the NASDAQ was up 24% year to date. The NASDAQ then went through a series of gyrations, mostly to the downside, which saw the Index drop 10% from its high, but still finish up 12.4% for the quarter. We believe that a correction in the technology stocks was inevitable. The sector had moved up too quickly, and many stocks had become fully valued. We also believe that this is a healthy occurrence, and should be followed by a recovery. Based on valuation concerns, we had pared back our tech holdings in the fourth quarter, and continued to take profits in the first quarter. We are emphasizing consumer cyclical and telecommunications stocks, and energy stocks representation has been increased. We continue to look for companies with strong earnings growth whose stocks are selling at reasonable valuations. A disciplined blend of both the growth and the value philosophies is the best investment strategy for producing consistent incremental return, we believe, and our portfolios are diversified across all economic sectors to constrain risk. As long as fundamentals remain intact, we expect market leadership to return to the growth oriented stocks and sectors. As always, we will be diligent in observing shifting trends in expectations and fundamentals for the various market sectors. Our emphasis will shift along with confirmed shifts in our indicators. Very truly yours, Terence W. Collins, President
COLUMBIA PARTNERS EQUITY FUND SCHEDULE OF INVESTMENTS - MARCH 31, 2000 COMMON STOCK - 80.7% SHARES VALUE APPAREL STORES - 1.9% Chico's FAS, Inc. (a) 26,535 $ 449,851 ----------------- AUTOS & AUTO PARTS - 1.5% Gentex Corp. (a) 9,805 363,398 ----------------- BANKS - 4.8% Citigroup, Inc. 19,452 1,153,747 ----------------- BEVERAGES - 1.5% Coca-Cola Co. 7,665 361,692 ----------------- BUILDING SUPPLIES - 3.4% Home Depot, Inc. 12,380 809,342 ----------------- COMMUNICATIONS EQUIPMENT - 4.6% Cable Design Technologies Corp. (a) 9,230 308,628 Lucent Technologies, Inc. 7,075 429,806 Terayon Communication Systems, Inc. (a) 1,740 356,700 ----------------- 1,095,134 ----------------- COMPUTER SERVICES & SOFTWARE - 12.6% Ariba, Inc. (a) 1,485 311,293 Citrix Systems, Inc. (a) 9,065 600,556 ImproveNet, Inc. (a) 60 443 Inktomi Corp. (a) 2,800 546,000 Microsoft Corp. (a) 8,255 880,189 Rational Software Corp. (a) 5,110 390,596 RealNetworks, Inc. (a) 5,440 309,995 ----------------- 3,039,072 ----------------- COMPUTERS & OFFICE EQUIPMENT - 5.3% Cisco Systems, Inc. (a) 8,250 635,250 Reynolds & Reynolds Co. - Cl A 9,805 262,284 Seagate Technology, Inc. (a) 6,265 377,466 ----------------- 1,275,000 ----------------- DEPARTMENT & DISCOUNT STORES - 4.5% Target Corp. 8,255 617,061 Wal-Mart Stores, Inc. 8,255 470,019 ----------------- 1,087,080 ----------------- DRUGS & PHARMACEUTICALS - 3.2% Pfizer, Inc. 12,875 471,547 Theragenics Corp. (a) 22,745 298,528 ----------------- 770,075 ----------------- GROCERY STORES - 2.8% Safeway, Inc. (a) 14,735 666,759 ----------------- HEALTH - DIVERSIFIED - 3.4% American Home Products Corp. 7,665 410,557 Johnson & Johnson 5,895 413,387 ----------------- 823,944 ----------------- COLUMBIA PARTNERS EQUITY FUND SCHEDULE OF INVESTMENTS - MARCH 31, 2000 COMMON STOCKS - CONTINUED SHARES VALUE INVESTMENT BANKING & BROKERAGE - 2.3% Merrill Lynch & Co., Inc. 5,305 $ 549,068 ----------------- MANUFACTURERS - DIVERSIFIED - 2.7% General Electric Co. 4,125 641,695 ----------------- MEDICAL EQUIPMENT & SUPPLIES - 0.8% Priority Healthcare - Cl B (a) 1 25 Sybron International Corp. (a) 6,510 188,383 ----------------- 188,408 ----------------- OIL & GAS - 3.2% BJ Services Co. (a) 6,015 440,223 Nabors Industries Inc. (a) 8,485 328,794 ----------------- 769,017 ----------------- RESTAURANTS - 2.0% McDonald's Corp. 12,970 488,807 ----------------- RETAIL SPECIALTY STORES - 2.3% Costco Wholesale Corp.(a) 10,610 557,688 ----------------- SEMICONDUCTORS - 12.6% Broadcom Corp. - Cl A (a) 3,625 880,422 Dallas Semiconductor Corp. 7,910 292,176 Intel Corp. 7,075 933,900 TranSwitch Corp. (a) 4,450 427,478 Vitesse Semiconductor Corp. (a) 5,110 491,518 ----------------- 3,025,494 ----------------- TELEPHONE SERVICES - 5.3% Covad Communications Group, Inc. (a) 4,200 304,237 MCI WorldCom, Inc. (a) 7,897 358,326 RCN Corp. (a) 4,365 234,892 Winstar Communications, Inc. (a) 6,427 385,620 ----------------- 1,283,075 ----------------- TOTAL COMMON STOCK (COST $15,620,083) 19,398,346 ----------------- PRINCIPAL VALUE VALUE Money Market Securities - 15.8% Firstar Treasury Fund, 5.09% (b) (Cost $3,789,774) 3,789,774 $ 3,789,774 ----------------- TOTAL INVESTMENTS (COST $19,409,857) - 96.5% 23,188,120 ----------------- OTHER ASSETS LESS LIABILITIES - 3.5% 852,237 ----------------- TOTAL NET ASSETS - 100.0% $ 24,040,357 ================= (a) Non-income producing (b) Variable rate security; the coupon rate shown represents the rate at March 31, 2000.
COLUMBIA PARTNERS EQUITY FUND MARCH 31, 2000 STATEMENT OF ASSETS & LIABILITIES ASSETS Investment in securities (cost $19,409,857) $ 23,188,120 Cash 33,085 Receivable for securities sold 761,917 Dividends receivable 3,427 Interest receivable 9,820 Receivable for fund shares sold 75,000 ------------------- TOTAL ASSETS 24,071,369 LIABILITIES Accrued investment advisory fee payable $ 25,377 Payable for securities purchased 5,635 ----------------- TOTAL LIABILITIES 31,012 ------------------- NET ASSETS $ 24,040,357 =================== Net Assets consist of: Paid in capital 16,900,872 Accumulated undistributed net realized gain on investments 3,361,222 Net unrealized appreciation on investments 3,778,263 ------------------- NET ASSETS, for 1,400,556 shares $ 24,040,357 =================== NET ASSET VALUE Offering price and redemption price per share ($24,040,357 / 1,400,556 ) $ 17.16 ===================
COLUMBIA PARTNERS EQUITY FUND STATEMENT OF OPERATIONS YEAR ENDED MARCH 31, 2000 INVESTMENT INCOME Dividend income $ 35,592 Interest income 63,463 --------------- TOTAL INCOME 99,055 EXPENSES Investment advisory fee $ 133,984 Trustees' fees 2,596 ------------------- Total expenses before reimbursement 136,580 Reimbursed expenses (2,596) ------------------- Total operating expenses 133,984 --------------- NET INVESTMENT LOSS (34,929) --------------- REALIZED & UNREALIZED GAIN (LOSS) Net realized gain on investment securities 3,818,020 Change in net unrealized appreciation (depreciation) on investment securities 3,778,263 ------------------- Net gain on investment securities 7,596,283 --------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 7,561,354 ===============
COLUMBIA PARTNERS EQUITY FUND STATEMENT OF CHANGES IN NET ASSETS YEAR ENDED MARCH 31, 2000 INCREASE IN NET ASSETS OPERATIONS Net investment income (loss) $ (34,929) Net realized gain on investment securities 3,818,020 Change in net unrealized appreciation (depreciation) 3,778,263 ----------------- Net increase in net assets resulting from operations 7,561,354 ----------------- DISTRIBUTIONS TO SHAREHOLDERS From net investment income 0 From net realized gain (421,869) ----------------- Total distributions (421,869) ----------------- SHARE TRANSACTIONS Net proceeds from sale of shares 17,229,187 Shares issued in reinvestment of distributions 421,869 Shares redeemed (750,184) ----------------- NET INCREASE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS 16,900,872 ----------------- TOTAL INCREASE IN NET ASSETS 24,040,357 ----------------- NET ASSETS Beginning of period 0 ----------------- End of period [including accumulated undistributed net investment income of $0] $ 24,040,357 =================
COLUMBIA PARTNERS EQUITY FUND FINANCIAL HIGHLIGHTS YEAR ENDED MARCH 31, 2000 SELECTED PER SHARE DATA Net asset value, beginning of period $ 10.00 --------------- Income from investment operations Net investment loss (0.04) Net realized and unrealized gain 7.59 --------------- Total from investment operations 7.55 --------------- Less Distributions From net investment income 0.00 From net realized gain (0.39) --------------- Total distributions (0.39) --------------- Net asset value, end of period $ 17.16 =============== TOTAL RETURN 76.56% RATIOS AND SUPPLEMENTAL DATA Net assets, end of period (000) $24,040 Ratio of expenses to average net assets 1.20% Ratio of expenses to average net assets before reimbursement 1.22% Ratio of net investment income (loss) to average net assets (0.31)% Ratio of net investment income (loss) to average net assets before reimbursement (0.34)% Portfolio turnover rate 215.08%
COLUMBIA PARTNERS EQUITY FUND NOTES TO FINANCIAL STATEMENTS MARCH 31, 2000 NOTE 1. ORGANIZATION Columbia Partners Equity Fund (the "Fund") was organized as a series of the AmeriPrime Funds, an Ohio business trust (the "Trust"), on February 2, 1999 and commenced operations on April 1, 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 provide long-term capital growth. 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. COLUMBIA PARTNERS EQUITY FUND NOTES TO FINANCIAL STATEMENTS MARCH 31, 2000 - CONTINUED NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED 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 at least 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. Generally accepted accounting principles require that permanent financial reporting tax differences relating to shareholder distributions be reclassified to accumulated net realized gains. NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES The Fund retains Columbia Partners, L.L.C. (the "Advisor") to manage the Fund's investments. The Advisor was organized as an independent limited liability company owned 50% by its employees and 50% by Galway Capital Management, L.L.C., a venture capital firm. The Advisor was organized in 1995. The investment decisions for the Fund are made by a team of the Advisor, which is primarily responsible for the day-to-day management of the Fund's portfolio. Under the terms of the management agreement, (the "Agreement"), the Advisor manages the Fund's investments subject to approval of the Board of Trustees and pays all of the expenses of the Fund except brokerage commissions, taxes, interest, fees and expenses of non-interested person trustees, and extraordinary expenses. As compensation for its management services and agreement to pay the Fund's expenses, the Fund is obligated to pay the Advisor a fee of 1.20% of the average daily net assets of the Fund. It should be noted that most investment companies pay their own operating expenses directly, while the Fund's expenses, except those specified above, are paid by the Advisor. For the fiscal year ended March 31, 2000 the Advisor received a fee of $133,984 from the Fund. The Advisor has voluntarily agreed to reimburse other expenses to the extent necessary to maintain total operating expenses at the rate of 1.20%. For the fiscal year ended March 31, 2000, the Advisor reimbursed expenses of $2,596. There is no assurance that such reimbursement will continue in the future. COLUMBIA PARTNERS EQUITY FUND NOTES TO FINANCIAL STATEMENTS MARCH 31, 2000 - CONTINUED NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED The Fund retains AmeriPrime Financial Services, Inc. (the "Administrator"), a wholly owned subsidiary of Unified Financial Services, Inc., to manage the Fund's business affairs and provide the Fund with administrative services, including all regulatory reporting and necessary office equipment and personnel. The Administrator receives a monthly fee from the Advisor equal to an annual rate of 0.10% of the Fund's assets under $50 million, 0.075% of the Fund's assets from $50 million to $100 million, and 0.050% of the Fund's assets over $100 million (subject to a minimum fee of $2,500 per month). For the fiscal year ended March 31, 2000 the Administrator received fees of $30,000 from the Advisor for administrative services provided to the Fund. The Fund retains Unified Fund Services, Inc. ("Unified"), a wholly owned subsidiary of Unified Financial Services, Inc., to act as the Fund's transfer agent and fund accountant. For its services as transfer agent, Unified receives a monthly fee from the Advisor of $1.20 per shareholder (subject to a minimum monthly fee of $750). For the fiscal year ended March 31, 2000, Unified received fees of $15,790 from the Advisor for transfer agent services. For its services as fund accountant, Unified receives an annual fee from the Advisor equal to 0.0275% of the Fund's assets up to $100 million, 0.0250% of the Fund's assets from $100 million to $300 million and 0.0200% of the Fund's assets over $300 million (subject to various monthly minimum fees, the maximum being $2,000 per month for assets of $20 to $100 million). For the fiscal year ended March 31, 2000, Unified received fees of $15,600 from the Advisor for fund accounting services. The Fund retains AmeriPrime Financial Securities, Inc. ("the Distributor"), a wholly owned subsidiary of Unified Financial Services, Inc., to act as the principal distributor of the Fund's shares. There were no payments made to the Distributor for the fiscal year ended March 31, 2000. Certain members of management of the Administrator and the Distributor are also members of management of the AmeriPrime Trust. COLUMBIA PARTNERS EQUITY FUND NOTES TO FINANCIAL STATEMENTS MARCH 31, 2000 - CONTINUED NOTE 4. SHARE TRANSACTIONS As of March 31, 2000 there was an unlimited number of authorized shares for the Fund. Paid in capital at March 31, 2000 was $16,900,872. Transactions in shares were as follows: FOR THE FISCAL YEAR ENDED MARCH 31, 2000 SHARES DOLLARS Shares sold 1,426,414 $17,229,187 Shares issued in reinvestment 30,997 421,869 Shares redeemed (56,855) (750,184) ---------- ----------- 1,400,556 $16,900,872 ========== =========== NOTE 5. INVESTMENTS For the fiscal year ended March 31, 2000, purchases and sales of investment securities, other than short-term investments, aggregated $32,638,522 and $20,836,460, respectively. As of March 31, 2000, the gross unrealized appreciation for all securities totaled $4,106,042 and the gross unrealized depreciation for all securities totaled $327,779 for a net unrealized appreciation of $3,778,263. The aggregate cost of securities for federal income tax purposes at March 31, 2000 was $19,409,857. 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. INDEPENDENT AUDITOR'S REPORT To The Shareholders and Board of Trustees Columbia Partners Equity Fund (a series of the AmeriPrime Funds) We have audited the accompanying statement of assets and liabilities of the Columbia Partners Equity Fund, including the schedule of portfolio investments, as of March 31, 2000, and the related statement of operations, the statement of changes in net assets , and the financial highlights for the for the period indicated. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of investments and cash held by the custodian as of March 31, 2000, by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Columbia Partners Equity Fund as of March 31, 2000, the results of its operations, the changes in its net assets, and the financial highlights for the period indicated, in conformity with generally accepted accounting principles. McCurdy & Associates CPA's, Inc. Westlake, Ohio 44145 April 20, 2000 Dear Fellow Shareholders, The Martin Capital Opportunity Funds performed extremely well for the first fiscal year, which ended March 31, 2000. The U.S. Opportunity Fund returned 61.9% for the fiscal year vs. 17.9% for the S&P 500. The Austin Opportunity Fund returned 40.2% for the period from inception September 1, 1999 through March 31, 2000 vs. 14.3% for the S&P 500 during that same time frame. These returns were achieved with practically no turnover within the portfolios. Both funds performed well due in part to the strength of the high-tech sector. Although the fiscal year ended with some weakness in those same high-tech stocks, we remain committed to buying quality growth companies and holding them for the long term. OUTLOOK The short-term outlook is clouded by higher oil prices and rising interest rates, pushed up over the past nine months by inflation concerns associated with potentially unsustainable economic growth. These higher rates are primarily responsible for the market volatility we have seen recently. In the long term, productivity of the labor force is increasing at a rapid rate, spurred by the high-tech revolution. This increasing productivity will allow faster economic growth with less inflation. It will also help to increase corporate earnings. Within the Martin Capital Opportunity Funds, we have attempted to select companies that will benefit from the demand for greater productivity. Powerful bull markets are characterized by high valuations. As long as the economy keeps growing at above average rates and inflation remains lower than average, high valuation levels can be sustained indefinitely. From time to time, however, when the economy shows signs of slowing to a below-average rate of growth, or inflation looks like it may pick up, the stock market can be merciless in reducing valuation levels. Eventually, when the stock market begins to look past short-term economic growth or inflation concerns to long-term above-average economic growth and lower inflation trends, the bull market resumes, taking stocks to new highs. As long as we can make a good case for long-term sustainable growth with low inflation, we will be much less inclined to try to protect portfolios from apparent short-term risks at the expense of missing out on long-term bull market returns. Thank you for your trust and confidence in the Martin Capital Opportunity Funds. Sincerely, Paul B. Martin, Jr. AUSTIN OPPORTUNITY FUND The Austin Opportunity Fund performed well as the Central Texas region continues to grow at a feverish pace. Population growth and job creation continues at near-record levels while new private ventures and initial public offerings are a weekly occurrence. The fund is invested in a balance of locally founded companies such as Vignette, PSW Technologies, and NetSolve along with older, more established companies with significant operations in Austin such as Advanced Micro Devices, Applied Materials and Apple Computer. Ten Largest Holdings Percent of Net Assets 3/31/00 -------------------- ----------------------------- Vignette 6.7% Advanced Micro Devices 4.9% Applied Materials 4.2% Broadwing 3.5% Apple Computer 3.2% PSW Technologies 3.2% Cirrus Logic 2.8% NetSolve 2.8% Motorola 2.7% National Instruments 2.7% We believe the Austin Opportunity Fund will continue to perform well over the long term. The constantly expanding global economy will become increasingly dependant upon technology and innovation leadership - both strong traits of the Central Texas region. Returns for the Periods Ending March 31, 2000 Fund/Index 1st Quarter 2000 6 Months 1 Year Since Inception ---------- ---------------- -------- ------ --------------- Martin Capital Austin Opportunity Fund 6.1% 42.5% n/a 40.2% S&P 500 Index 2.3% 17.5% n/a 14.3% Martin Capital Austin Opportunity Fund S&P 500 Index $14,020 $11,429 ----------------------- ------------- 8/31/99 $10,000.00 $10,000.00 9/30/99 9,840.00 9,725.90 10/31/99 10,490.00 10,341.35 11/30/99 12,000.00 10,551.59 12/31/99 13,210.00 11,173.08 01/31/00 13,530.00 10,611.75 02/29/00 14,520.00 10,410.87 3/31/00 14,020.00 11,429.36 This chart shows the value of a hypothetical initial investment of $10,000 in the Fund and the S&P 500 Index on September 1, 1999 (commencement of operations) and held through March 31, 2000. The S&P 500 Index is a widely recognized unmanaged index of common stock prices. Performance figures reflect the change in value of the stocks in the index, reinvestment of dividends and are not annualized. The index returns do not reflect expenses, which have been deducted from the Fund's return. THE FUND'S RETURN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF FUTURE RESULTS. U.S. OPPORTUNITY FUND The U.S. Opportunity Fund exceeded our performance expectations as the U.S. economy and equity markets both expanded at a rapid rate. Most of the key holdings are in the technology sector at this time. This is a reflection of our belief that technology is the driver of economic growth into the 21st century. Our high-tech holdings have outperformed more traditional industries over the past 12 months. Ten Largest Holdings Percent of Net Assets 3/31/00 -------------------- ----------------------------- Qualcomm 4.4% Vignette 3.4% Lam Research 3.2% Oracle Corp. 3.2% LSI Logic 2.7% Applied Materials 2.5% Sun Microsystems 2.5% Advanced Micro Devices 2.3% Cisco Systems 2.3% Altera Corporation 2.2% Broad-based stock indices such as the S&P 500 exceeded long-term average rates of growth during the first year of the U.S. Opportunity Fund. Not surprisingly, economic fundamentals were excellent during this time frame. The period was characterized by low inflation and significant growth in output both in terms of hours worked [productivity] and in the aggregate [GDP]. This scenario of high employment and productivity coupled with low inflation has persisted for so long that the Federal Reserve is rethinking its traditional trade-offs of economic growth against price increases. The U.S. Opportunity Fund portfolio is structured to take advantage of an economy expanding at a healthy pace in an environment of low inflation and free markets. This approach has contributed to the high returns achieved over the past year, and we believe will continue to help sustain solid returns in the future. Returns for the Periods Ending March 31, 2000 Fund/Index 1st Quarter 2000 6 Months 1 Year Since Inception ---------- ---------------- -------- ------ --------------- Martin Capital U.S. Opportunity Fund 10.7% 54.9% 61.9% 61.9% S&P 500 Index 2.3% 17.5% 17.9% 17.9% Martin Capital U.S. Opportunity Fund S&P 500 Index $16,190 $11,794 --------------------- ------------- 3/31/99 $10,000.00 $10,000.00 4/30/99 9,870.00 10,387.30 5/31/99 9,690.00 10,142.06 6/30/99 10,560.00 10,704.94 7/31/99 10,210.00 10,370.73 8/31/99 10,350.00 10,319.40 9/30/99 10,450.00 10,036.54 10/31/99 11,410.00 10,671.65 11/30/99 12,640.00 10,888.61 12/31/99 14,630.00 11,529.95 01/31/00 14,110.00 10,950.68 02/29/00 15,750.00 10,743.39 03/31/00 16,190.00 11,794.41 This chart shows the value of a hypothetical initial investment of $10,000 in the Fund and the S&P 500 Index on April 1, 1999 (commencement of operations) and held through March 31, 2000. The S&P 500 Index is a widely recognized unmanaged index of common stock prices. Performance figures reflect the change in value of the stocks in the index, reinvestment of dividends and are not annualized. The index returns do not reflect expenses, which have been deducted from the Fund's return. THE FUND'S RETURN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF FUTURE RESULTS.
MARTIN CAPITAL AUSTIN OPPORTUNITY FUND SCHEDULE OF INVESTMENTS - MARCH 31, 2000 COMMON STOCKS - 90.6% SHARES VALUE BIOTECHNOLOGY & DRUGS - 2.0% Luminex Corp. (a) 400 $ 8,775 Pharmaceutical Product Development, Inc. (a) 700 11,856 ----------------- 20,631 ----------------- BUSINESS SERVICES - 0.1% American Physicians Service Group, Inc. (a) 500 1,531 ----------------- CABLE & OTHER PAY TELEVISION SERVICES - 0.9% Classic Communications, Inc. (a) 600 9,450 ----------------- COMMUNICATIONS EQUIPMENT - 3.7% Motorola, Inc. 200 28,475 Tellabs, Inc. (a) 30 1,888 VTEL Corp. (a) 1,100 8,525 ----------------- 38,888 ----------------- COMPUTER SERVICES & SOFTWARE - 17.6% BMC Software, Inc. (a) 300 14,812 Computer Sciences Corp. (a) 300 23,700 Electronic Arts, Inc. (a) 300 21,356 Electronic Data Systems Corp. 200 12,938 Netpliance, Inc. (a) 1,000 14,500 NetSolve, Inc. (a) 900 29,025 Perficient, Inc. (a) 700 13,913 Pervasive Software, Inc. (a) 1,600 20,600 PSW Technologies, Inc. (a) 850 33,787 ----------------- 184,631 ----------------- COMPUTERS & OFFICE EQUIPMENT - 12.7% Apple Computer, Inc. (a) 250 33,953 Crossroads Systems, Inc. (a) 240 24,780 Dell Computer Corp. (a) 450 24,300 IKON Office Solutions, Inc. 200 1,238 International Business Machines Corp. 180 21,240 National Instruments Corp. (a) 600 28,162 ----------------- 133,673 ----------------- ELECTRICAL EQUIPMENT - 4.2% Applied Materials, Inc. (a) 470 44,327 ----------------- ELECTRONIC INSTRUMENTS - 8.9% Advanced Micro Devices, Inc. (a) 900 51,469 Electrosource, Inc. (a) 1,000 14,312 Solectron Corp. (a) 600 24,225 XeTel Corp. (a) 1,000 3,125 ----------------- 93,131 ----------------- ENTERTAINMENT - 1.0% Grand Adventures Tour & Travel Publishing Corp. (a) 2,000 10,000 ----------------- MARTIN CAPITAL AUSTIN OPPORTUNITY FUND SCHEDULE OF INVESTMENTS - MARCH 31, 2000 - CONTINUED COMMON STOCKS - CONTINUED SHARES VALUE GROCERY STORES - 2.4% Whole Foods Market, Inc. (a) 600 24,834 ----------------- HEALTH - DIVERSIFIED - 1.7% Abbott Laboratories, Inc. 500 17,688 ----------------- HEALTHCARE FACILITIES - 0.4% Columbia/HCA Healthcare Corp. 100 2,531 Prime Medical Services, Inc. (a) 200 1,775 ----------------- 4,306 ----------------- INDUSTRIAL MACHINERY - 0.5% DTM Corp. (a) 2,000 5,125 ----------------- INSURANCE - 0.8% Citizens, Inc. (a) 300 1,969 Financial Industries Corp. 100 950 Humana, Inc. (a) 200 1,487 InterContinental Life Corp. (a) 200 2,000 National Western Life Insurance Co. - Cl A (a) 30 2,430 ----------------- 8,836 ----------------- INTERNET INFORMATION PROVIDERS - 11.9% Drkoop.com, Inc. (a) 1,500 5,531 Garden.com, Inc. (a) 1,500 12,187 Hoover's, Inc. 1,830 20,816 ProsoftTraining.com (a) 700 15,575 Vignette Corp. (a) 440 70,483 ----------------- 124,592 ----------------- MANUFACTURERS - DIVERSIFIED - 0.3% Minnesota Mining & Manufacturing Co. 30 2,668 ----------------- MEDICAL EQUIPMENT & SUPPLIES - 1.0% Arrhythmia Research Technology, Inc. (a) 2,000 5,000 Encore Medical Corp. (a) 2,000 5,625 ----------------- 10,625 ----------------- NATURAL GAS - 1.7% Southern Union Co. 1,000 18,063 ----------------- OIL & GAS OPERATIONS - 0.4% Brigham Exploration Co. (a) 2,000 4,500 ----------------- PERSONAL & HOUSEHOLD PRODUCTS - 0.1% Surrey, Inc. (a) 1,000 1,594 ----------------- PHOTOGRAPHY & IMAGING - 1.9% Dupont Photomask, Inc. (a) 350 20,278 ----------------- MARTIN CAPITAL AUSTIN OPPORTUNITY FUND SCHEDULE OF INVESTMENTS - MARCH 31, 2000 - CONTINUED COMMON STOCKS - CONTINUED SHARES VALUE PRINTING & PUBLISHING - 2.2% Harte-Hanks Communications, Inc. 1,000 22,688 ----------------- REAL ESTATE DEVELOPERS - 0.2% Stratus Properties, Inc. (a) 500 2,125 ----------------- RESTAURANTS - 1.3% Schlotzky's Inc. (a) 2,200 13,200 ----------------- RETAIL & WHOLESALE - SPECIALTY - 3.7% EZCORP, Inc. - Cl A 500 1,969 pcOrder.com, Inc. - Cl A (a) 700 15,750 Travis Boats & Motors, Inc. (a) 1,600 21,200 ----------------- 38,919 ----------------- SCIENTIFIC & TECHNICAL INSTRUMENTS - 0.8% ThermoQuest Corp. (a) 500 8,406 ----------------- SEMICONDUCTORS - 4.5% Cirrus Logic, Inc. (a) 1,600 29,200 Silicon Laboratories, Inc. (a) 200 17,700 ----------------- 46,900 ----------------- TELECOMMUNICATIONS SERVICES - 3.7% Broadwing, Inc. 1,000 37,126 SBC Communications, Inc. 40 1,688 ----------------- 38,814 ----------------- TOTAL COMMON STOCKS (COST $788,288) 950,423 ----------------- PRINCIPAL VALUE VALUE Money Market Securities - 10.1% Firstar Treasury Fund, 5.09% (b) (Cost $105,373) 105,373 105,373 ----------------- TOTAL INVESTMENTS - 100.7% (COST $893,661) 1,055,796 ----------------- LIABILITIES IN EXCESS OF OTHER ASSETS - (0.7)% (6,970) ----------------- TOTAL NET ASSETS - 100.0% $ 1,048,826 ================= (a) Non-income producing (b) Variable rate security; the coupon rate shown represents the rate at March 31, 2000.
MARTIN CAPITAL AUSTIN OPPORTUNITY FUND MARCH 31, 2000 STATEMENT OF ASSETS & LIABILITIES ASSETS Investment in securities (cost $893,661) $ 1,055,796 Cash 2,526 Dividends receivable 19 Interest receivable 1,060 ------------------- TOTAL ASSETS 1,059,401 LIABILITIES Accrued investment advisory fee payable $ 1,003 Payable for securities purchased 9,562 Accrued other payables 10 ----------------- TOTAL LIABILITIES 10,575 ------------------- NET ASSETS $ 1,048,826 =================== Net Assets consist of: Paid in capital $ 886,691 Net unrealized appreciation on investments 162,135 ------------------- NET ASSETS, for 74,784 shares $ 1,048,826 =================== NET ASSET VALUE Offering price and redemption price per share ($1,048,826 / 74,784) $ 14.02 ===================
MARTIN CAPITAL AUSTIN OPPORTUNITY FUND STATEMENT OF OPERATIONS FOR THE PERIOD SEPTEMBER 1, 1999 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 2000 INVESTMENT INCOME Dividend income $ 262 Interest income 2,250 --------------- TOTAL INCOME 2,512 EXPENSES Investment advisory fee $ 4,479 Trustees' fees 938 ------------------- Total expenses before reimbursement 5,417 Reimbursed expenses (938) ------------------- Total operating expenses 4,479 --------------- NET INVESTMENT LOSS (1,967) --------------- REALIZED & UNREALIZED GAIN (LOSS) Net realized gain on investment securities 65 Change in net unrealized appreciation on investment securities 162,135 ------------------- Net gain on investment securities 162,200 --------------- NET INCREASE IN NET ASSETS $ 160,233 RESULTING FROM OPERATIONS ===============
MARTIN CAPITAL AUSTIN OPPORTUNITY FUND STATEMENT OF CHANGES IN NET ASSETS FOR THE PERIOD SEPTEMBER 1, 1999 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 2000 INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS Net investment loss $ (1,967) Net realized gain on investment securities 65 Change in net unrealized appreciation 162,135 ----------------- Net increase in net assets resulting from operations 160,233 ----------------- SHARE TRANSACTIONS Net proceeds from sale of shares 889,826 Shares redeemed (1,233) ----------------- Net increase in net assets resulting from share transactions 888,593 ----------------- TOTAL INCREASE IN NET ASSETS 1,048,826 ----------------- NET ASSETS Beginning of period 0 ----------------- End of period [including accumulated undistributed net investment income of $0] $ 1,048,826 =================
MARTIN CAPITAL AUSTIN OPPORTUNITY FUND FINANCIAL HIGHLIGHTS FOR THE PERIOD SEPTEMBER 1, 1999 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 2000 SELECTED PER SHARE DATA Net asset value, beginning of period $ 10.00 --------------- Income from investment operations Net investment loss (0.04) Net realized and unrealized gain 4.06 --------------- Total from investment operations 4.02 --------------- Net asset value, end of period $ 14.02 =============== TOTAL RETURN (b) 40.20% RATIOS AND SUPPLEMENTAL DATA Net assets, end of period (000) 1,049 Ratio of expenses to average net assets 1.25% (a) Ratio of expenses to average net assets before reimbursement 1.51% (a) Ratio of net investment income (loss) to average net assets (0.55)% (a) Ratio of net investment income (loss) to average net assets before reimbursement (0.81)% (a) Portfolio turnover rate 0.80% (a) (a) Annualized (b) For periods of less than a full year, total returns are not annualized.
MARTIN CAPITAL U.S. OPPORTUNITY FUND SCHEDULE OF INVESTMENTS - MARCH 31, 2000 COMMON STOCKS - 85.9% SHARES VALUE APPAREL STORES - 1.1% Gap, Inc. 800 $ 39,950 ----------------- BANKS - 2.7% Citigroup, Inc. 780 46,264 Toronto-Dominion Bank 2,000 53,375 ----------------- 99,639 ----------------- BUILDING SUPPLIES - 1.4% Home Depot, Inc. 800 52,300 ----------------- COMMUNICATIONS EQUIPMENT - 8.6% At Home Corp. - Cl A (a) 700 23,056 Lucent Technologies, Inc. 600 36,450 Motorola, Inc. 400 56,950 QUALCOMM, Inc. (a) 1,100 164,037 VTEL Corp. (a) 5,000 38,750 ----------------- 319,243 ----------------- COMPUTER SERVICES & SOFTWARE - 18.1% 3Com Corp. (a) 1,000 55,625 Advent Software, Inc. (a) 1,600 73,400 America Online, Inc. (a) 700 47,513 BMC Software, Inc. (a) 700 34,562 Cadence Design Systems, Inc. (a) 1,900 38,713 Computer Associates International, Inc. 800 47,350 EMC Corp. (a) 600 75,600 Microsoft Corp. (a) 400 42,650 Networks Associates, Inc. (a) 1,500 48,375 Oracle Corp. (a) 1,500 117,094 Prodigy Communications Corp. (a) 1,500 22,594 Yahoo! Inc. (a) 400 68,550 ----------------- 672,026 ----------------- COMPUTERS & OFFICE EQUIPMENT - 11.6% Altera Corp. (a) 900 80,325 Cisco Systems, Inc. (a) 1,100 84,700 Dell Computer Corp. (a) 1,000 54,000 Hewlett-Packard Co. 400 53,250 Micron Technology, Inc. (a) 500 63,000 Sun Microsystems, Inc. (a) 1,000 93,688 ----------------- 428,963 ----------------- CONSTRUCTION - 0.6% Centex Corp. 1,000 23,687 ----------------- DRUGS & PHARMACEUTICALS - 2.7% Lilly (Eli) & Co. 500 31,563 Merck & Co., Inc. 500 31,469 Pfizer, Inc. 1,000 36,625 ----------------- 99,657 ----------------- MARTIN CAPITAL U.S. OPPORTUNITY FUND SCHEDULE OF INVESTMENTS - MARCH 31, 2000 - CONTINUED COMMON STOCKS - CONTINUED SHARES VALUE ELECTRICAL EQUIPMENT - 5.8% American Power Conversion Corp. (a) 1,700 $ 72,887 Applied Materials, Inc. (a) 1,000 94,313 General Electric Co. 300 46,669 ----------------- 213,869 ----------------- ELECTRONIC INSTRUMENTS - 7.2% LSI Logic Corp. (a) 1,400 100,537 Texas Instruments, Inc. 500 81,000 Advanced Micro Devices, Inc. (a) 1,500 85,781 ----------------- 267,318 ----------------- ENTERTAINMENT - 1.3% Time Warner, Inc. 500 49,469 ----------------- FINANCE - DIVERSIFIED - 1.2% American Express Co. 300 44,681 ----------------- GROCERY STORES - 0.9% Whole Foods Market, Inc. (a) 800 33,112 ----------------- INDUSTRIAL MACHINERY & EQUIPMENT - 3.2% Lam Research Corp. (a) 2,600 117,162 ----------------- INSURANCE - 1.0% Berkshire Hathaway Inc. - Cl B (a) 20 36,460 ----------------- INTERNET INFORMATION PROVIDERS - 3.4% Vignette Corp. (a) 800 128,150 ----------------- INVESTMENT COMPANY - 1.2% Bear Stearns Cos., Inc. 1,000 45,750 ----------------- MEDICAL EQUIPMENT & SUPPLIES - 2.4% Colorado MEDtech, Inc. (a) 3,000 23,625 Medtronic, Inc. 1,000 51,563 VISX, Inc. (a) 800 14,600 ----------------- 89,788 ----------------- PHOTOGRAPHY & IMAGING - 1.2% Dupont Photomask, Inc. (a) 800 46,350 ----------------- RESTAURANTS - 1.8% Starbucks Corp. (a) 1,500 67,219 ----------------- RETAIL & WHOLESALE - SPECIALTY - 2.2% pcOrder.com, Inc. - Cl A (a) 700 15,750 Tiffany & Co. 800 66,950 ----------------- 82,700 ----------------- MARTIN CAPITAL U.S. OPPORTUNITY FUND SCHEDULE OF INVESTMENTS - MARCH 31, 2000 - CONTINUED COMMON STOCKS - CONTINUED SHARES VALUE SECURITIES INDUSTRY - 2.6% E*TRADE Group, Inc. (a) 1,500 $ 44,906 Schwab (Charles) Corp. 900 51,075 ----------------- 95,981 ----------------- SEMICONDUCTORS - 1.8% Intel Corp. 500 66,000 ----------------- TELEPHONE SERVICES - 1.9% AT&T Corp. 500 28,312 Qwest Communications International, Inc. (a) 900 43,200 ----------------- 71,512 ----------------- TOTAL COMMON STOCKS (COST $2,146,282) 3,190,986 ----------------- PRINCIPAL VALUE VALUE U.S. GOVERNMENT OBLIGATIONS - 3.2% U.S. Treasury Bond, 6%, 2/15/2026 (Cost $116,054) 120,000 118,688 ----------------- MONEY MARKET SECURITIES - 10.6% Firstar Treasury Fund, 5.09% (b) (Cost $391,357) 391,357 391,357 ----------------- TOTAL INVESTMENTS - 99.7% (COST $2,653,693) 3,701,031 ----------------- OTHER ASSETS LESS LIABILITIES - 0.3% 12,204 ----------------- TOTAL NET ASSETS - 100.0% $ 3,713,235 ================= (a) Non-income producing (b) Variable rate security; the coupon rate shown represents the rate at March 31, 2000.
MARTIN CAPITAL U.S. OPPORTUNITY FUND MARCH 31, 2000 STATEMENT OF ASSETS & LIABILITIES ASSETS Investment in securities (cost $2,653,693) $ 3,701,031 Cash 496 Dividends receivable 739 Interest receivable 3,308 Receivable for fund shares sold 11,500 Other receivables 84 ------------------- TOTAL ASSETS 3,717,158 LIABILITIES Accrued investment advisory fee payable $ 3,743 Accrued other payables 180 ----------------- TOTAL LIABILITIES 3,923 ------------------- NET ASSETS $ 3,713,235 =================== Net Assets consist of: Paid in capital $ 2,665,897 Net unrealized appreciation on investments 1,047,338 ------------------- NET ASSETS, for 229,413 shares $ 3,713,235 =================== NET ASSET VALUE Offering price and redemption price per share ($3,713,235 / 229,413) $ 16.19 ===================
MARTIN CAPITAL U.S. OPPORTUNITY FUND STATEMENT OF OPERATIONS YEAR ENDED MARCH 31, 2000 INVESTMENT INCOME Dividend income $ 4,105 Interest income 11,634 Miscellaneous income 148 --------------- TOTAL INCOME 15,887 EXPENSES Investment advisory fee $ 22,038 Trustees' fees 2,076 ------------------- Total expenses before reimbursement 24,114 Reimbursed expenses (2,076) ------------------- Total operating expenses 22,038 --------------- NET INVESTMENT LOSS (6,151) --------------- REALIZED & UNREALIZED GAIN (LOSS) Net realized gains on options transactions 5,598 Change in net unrealized appreciation on investment securities 1,047,338 ------------------- Net gain on investment securities 1,052,936 --------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 1,046,785 ===============
MARTIN CAPITAL U.S. OPPORTUNITY FUND STATEMENT OF CHANGES IN NET ASSETS YEAR ENDED MARCH 31, 2000 INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS Net investment loss $ (6,151) Net realized gain on investments 5,598 Change in net unrealized appreciation 1,047,338 ----------------- Net increase in net assets resulting from operations 1,046,785 ----------------- SHARE TRANSACTIONS Net proceeds from sale of shares 2,694,998 Shares redeemed (28,548) ----------------- Net increase in net assets resulting from share transactions 2,666,450 ----------------- TOTAL INCREASE IN NET ASSETS 3,713,235 ----------------- Net Assets Beginning of period 0 ----------------- End of period [including accumulated undistributed net investment income of $0] $ 3,713,235 =================
MARTIN CAPITAL U.S. OPPORTUNITY FUND FINANCIAL HIGHLIGHTS YEAR ENDED MARCH 31, 2000 SELECTED PER SHARE DATA Net asset value, beginning of period $ 10.00 --------------- Income from investment operations Net investment income (loss) (0.04) Net realized and unrealized gain 6.23 --------------- Total from investment operations 6.19 --------------- Net asset value, end of period $ 16.19 =============== TOTAL RETURN 61.90% RATIOS AND SUPPLEMENTAL DATA Net assets, end of period (000) 3,713 Ratio of expenses to average net assets 1.25% Ratio of expenses to average net assets before reimbursement 1.37% Ratio of net investment income (loss) to average net assets (0.35)% Ratio of net investment income (loss) to average net assets before reimbursement (0.47)% Portfolio turnover rate 0.35%
MARTIN CAPITAL OPPORTUNITY FUNDS NOTES TO FINANCIAL STATEMENTS MARCH 31, 2000 NOTE 1. ORGANIZATION Martin Capital Austin Opportunity Fund (the "Austin Opportunity Fund") and Martin Capital U.S. Opportunity Fund (the "U.S. Opportunity Fund") were organized as series of the AmeriPrime Funds, an Ohio business trust (the "Trust") on August 14, 1998 and commenced operations on September 1, 1999 and April 1, 1999, respectively. Each Fund is registered under the Investment Company Act of 1940, as amended, as a non-diversified open-end management investment company. The investment objective of each Fund is to provide long-term capital appreciation. 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 each 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, and 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. MARTIN CAPITAL OPPORTUNITY FUNDS NOTES TO FINANCIAL STATEMENTS MARCH 31, 2000 - 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- Each Fund intends to qualify each year as a "regulated investment company" under the Internal Revenue Code of 1986, as amended. By so qualifying, each 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- Each Fund intends to distribute substantially all of its net investment income as dividends to its shareholders on at least an annual basis. Each Fund intends to distribute its net long-term capital gains and its net short-term capital gains at least once a year. OTHER- Each 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. Generally accepted accounting principles require that permanent financial reporting tax differences relating to shareholder distributions be reclassified to net realized gains and paid-in capital. NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES The Funds retain Martin Capital Advisors, L.L.P. (the "Advisor") to manage each Fund's investments. The Advisor is a Texas limited liability partnership organized on January 29, 1999. Paul Martin, President and controlling partner of the Advisor is primarily responsible for the day-to-day management of the Fund's portfolio. MARTIN CAPITAL OPPORTUNITY FUNDS NOTES TO FINANCIAL STATEMENTS MARCH 31, 2000 - CONTINUED NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED Under the terms of each Fund's management agreement (the "Agreements"), the Advisor manages the Fund's investments subject to approval of the Board of Trustees and pays all of the expenses of the Fund except brokerage commissions, taxes, interest, fees and expenses of non-interested person trustees, and extraordinary expenses. As compensation, for its management services and agreement to pay each Fund's expenses, each Fund is authorized to pay the Advisor a fee computed and accrued daily and paid monthly at an annual rate of 1.25% of the average daily net assets of the Fund. It should be noted that most investment companies pay their own operating expenses directly, while the Fund's expenses, except those specified above, are paid by the Advisor. For the period September 1, 1999 (commencement of operations) through March 31, 2000, the Advisor received a fee of $4,479 from the Austin Opportunity Fund. For the fiscal year ended March 31, 2000, the Advisor received a fee of $22,038 from the U.S. Opportunity Fund. The Advisor has voluntarily agreed to reimburse other expenses to the extent necessary to maintain total operating expenses at the rate of 1.25% for each Fund. For the period September 1, 1999 (commencement of operations) through March 31, 2000, the Advisor reimbursed expenses of $938 for the Austin Opportunity fund. For the fiscal year ended March 31, 2000, the Advisor reimbursed expenses of $2,076 for the U.S. Opportunity Fund. There is no assurance that such reimbursements will continue in the future. Each Fund has adopted a Distribution Plan pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the "Plan") under which each Fund is authorized to incur distribution expenses at an annual rate of 0.25% of the average daily net assets of the Fund. All distribution expenses incurred by a Fund under its plan are paid by the Advisor pursuant to the management agreement. Each Fund retains AmeriPrime Financial Services, Inc. (the "Administrator"), a wholly owned subsidiary of Unified Financial Services, Inc., to manage each Fund's business affairs and to provide each Fund with administrative services, including all regulatory reporting and necessary office equipment and personnel. For the period September 1, 1999 (commencement of operations) through March 31, 2000, the Administrator received fees of $10,000 from the Advisor for administrative services provided to the Austin Opportunity Fund. For the fiscal year ended March 31, 2000, the Administrator received fees of $18,333 from the Advisor for administrative services provided to the U.S. Opportunity Fund. Each Fund retains Unified Fund Services, Inc. ("Unified"), a wholly owned subsidiary of Unified Financial Services, Inc., to act as each Fund's transfer agent and to provide each Fund with fund accounting services. For its services as transfer agent, Unified receives a monthly fee from the Advisor of $1.20 per shareholder (subject to a minimum monthly fee of $750). For the period September 1, 1999 (commencement of operations) through MARTIN CAPITAL OPPORTUNITY FUNDS NOTES TO FINANCIAL STATEMENTS MARCH 31, 2000 - CONTINUED NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED March 31, 2000, Unified received fees of $6,465 from the Advisor for transfer agent services provided to the Austin Opportunity Fund. For the fiscal year ended March 31, 2000, Unified received fees of $17,935 from the Advisor for transfer agent services provided to the U.S. Opportunity Fund. For its services as fund accountant, Unified receives an annual fee from the Advisor equal to 0.0275% of each Fund's assets up to $100 million, and 0.0250% of each Fund's assets from $100 million to $300 million, and 0.0200% of each Fund's assets over $300 million (subject to various monthly minimum fees, the maximum being $2,000 per month for assets of $20 to $100 million). For the period September 1, 1999 (commencement of operations) through March 31, 2000, Unified received fees of $4,258 from the Advisor for fund accounting services provided to the Austin Opportunity Fund. For the fiscal year ended March 31, 2000, Unified received fees of $9,600 from the Advisor for fund accounting services provided to the U.S. Opportunity Fund. Each Fund retains AmeriPrime Financial Securities, Inc. (the "Distributor"), a wholly owned subsidiary of Unified Financial Services, Inc., to act as the principal distributor of each Fund's shares. There were no payments made to the Distributor for the period September 1, 1999 (commencement of operations) through March 31, 2000 and for the fiscal year ended March 31, 2000 for the Austin Opportunity Fund and U.S. Opportunity Fund, respectively. Certain members of management of the Administrator and the Distributor are also members of management of the AmeriPrime Trust. NOTE 4. SHARE TRANSACTIONS AUSTIN OPPORTUNITY FUND. As of March 31, 2000, there were an unlimited number of authorized shares for the Fund. Paid in capital at March 31, 2000 was $886,691. Transactions in shares were as follows: FOR THE PERIOD SEPTEMBER 1, 1999 (COMMENCEMENT OF OPERATIONS) THROUGH MARCH 31, 2000 SHARES DOLLARS Shares sold 74,885 $889,826 Shares redeemed (101) (1,233) --------- --------- 74,784 $888,593 ========= ========= MARTIN CAPITAL OPPORTUNITY FUNDS NOTES TO FINANCIAL STATEMENTS MARCH 31, 2000 - CONTINUED NOTE 4. SHARE TRANSACTIONS - CONTINUED U.S. OPPORTUNITY FUND. As of March 31, 2000, there were an unlimited number of authorized shares for the Fund. Paid in capital at March 31, 2000 was $2,665,897. Transactions in shares were as follows: FOR THE FISCAL YEAR ENDED MARCH 31, 2000 SHARES DOLLARS Shares sold 231,507 $2,694,998 Shares redeemed (2,094) (28,548) -------- ----------- 229,413 $2,666,450 ======== =========== NOTE 5. INVESTMENTS AUSTIN OPPORTUNITY FUND. For the period September 1, 1999 (commencement of operations) through March 31, 2000, purchases and sales of investment securities, other than short-term investments, aggregated $790,763 and $2,540, respectively. The gross unrealized appreciation for all securities totaled $223,991 and the gross unrealized depreciation for all securities totaled $61,856 for a net unrealized appreciation of $162,135. The aggregate cost of securities for federal income tax purposes at March 31, 2000 was $893,661. U.S. OPPORTUNITY FUND. For the fiscal year ended March 31, 2000, purchases and sales of investment securities, other than short-term investments, aggregated $2,262,297 and $5,622, respectively. The gross unrealized appreciation for all securities totaled $1,163,613 and the gross unrealized depreciation for all securities totaled $116,275 for a net unrealized appreciation of $1,047,338. The aggregate cost of securities for federal income tax purposes at March 31, 2000 was $2,653,693. 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. MARTIN CAPITAL OPPORTUNITY FUNDS NOTES TO FINANCIAL STATEMENTS MARCH 31, 2000 - CONTINUED 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 Funds. 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 March 31, 2000, National Investor Services owned of record in aggregate more than 27% of the Austin Opportunity Fund. As of March 31, 2000, National Investor Services owned of record in aggregate more than 67% of the U.S. Opportunity Fund. NOTE 8. CALL OPTIONS WRITTEN U.S. OPPORTUNITY FUND. Transactions in options written during the fiscal year ended March 31, 2000 were as follows: NUMBER OF PREMIUMS CONTRACTS RECEIVED Options written 5 $5,600 Options expired (5) (5,600) ------ ------- Options outstanding at March 31, 2000 0 $ 0 ====== ======= MARTIN CAPITAL OPPORTUNITY FUNDS INDEPENDENT AUDITOR'S REPORT April 20, 2000 To The Shareholders and Board of Trustees Martin Capital Opportunity Funds (series of AmeriPrime Funds) We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of the Martin Capital Opportunity Funds (comprising, respectively, the Martin Capital Austin Opportunity Fund and the Martin Capital U.S. Opportunity Fund), as of March 31, 2000, and the related statements of operations, the statements of changes in net assets, and the financial highlights for each of the periods indicated. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of investments and cash held as of March 31, 2000 by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial positions of the Martin Capital Austin Opportunity Fund and the Martin Capital U.S. Opportunity Fund as of March 31, 2000, the results of their operations, the changes in their net assets, and the financial highlights for each of the periods indicated in conformity with generally accepted accounting principles. McCurdy & Associates CPA's, Inc. Westlake, Ohio 44145 April 20, 2000
WESTCOTT NOTHING BUT NET FUND SCHEDULE OF INVESTMENTS - MARCH 31, 2000 (UNAUDITED) COMMON STOCKS - 101.3% SHARES VALUE COMMUNICATIONS SOFTWARE - 11.2% Communication Intelligence Corp. (a) 15,000 $ 89,532 Lernout & Hauspie Speech Products NV (a) 2,000 221,000 ----------------- 310,532 ----------------- CORPORATE, PROFESSIONAL & FINANCIAL SOFTWARE - 8.7% Ariba, Inc. (a) 750 157,219 Cybercash, Inc. (a) 3,625 48,938 Intuit, Inc. (a) 650 35,344 ----------------- 241,501 ----------------- DATABASE & FILE MANAGEMENT SOFTWARE - 3.8% Centura Software Corp. (a) 10,000 103,438 ----------------- DEVELOPMENT TOOLS, AND OPERATING SYSTEMS - 5.5% BE, Inc. (a) 10,000 151,250 ----------------- DIVERSIFIED TELECOM SERVICE PROVIDERS - 1.4% Qwest Communications International, Inc. (a) 825 39,600 ----------------- INFORMATION COLLECTION & DELIVERY SERVICES - 16.7% Hyperfeed Technologies, Inc. (a) 40,000 240,000 Multex.com, Inc. (a) 1,175 43,640 WAVO Corp. (a) 40,000 178,752 ----------------- 462,392 ----------------- INTERNET & INTRANET SOFTWARE SERVICES - 7.3% Exodus Communications, Inc. (a) 400 56,250 Healtheon / WebMd Corp. (a) 1,900 42,988 Inktomi Corp. (a) 265 51,675 Network Solutions, Inc. (a) 250 38,422 RealNetworks Inc. (a) 225 12,821 ----------------- 202,156 ----------------- INTERNET & ONLINE CONTENT PROVIDERS - 16.6% America Online, Inc. (a) 800 54,300 Blue Zone, Inc. 10,000 90,000 Mediconsult.com, Inc. (a) 80,000 230,000 Yahoo, Inc. (a) 500 85,688 ----------------- 459,988 ----------------- INVESTMENT BANKING & BROKERAGE - 6.7% E*Trade Group, Inc. (a) 1,100 32,931 Knight/Trimark Group, Inc. (a) 3,000 153,000 ----------------- 185,931 ----------------- MARKETING & PUBLIC RELATION SERVICES - 1.7% Be Free, Inc. (a) 1,120 24,640 Razorfish, Inc. - Class A (a) 800 21,850 ----------------- 46,490 ----------------- WESTCOTT NOTHING BUT NET FUND SCHEDULE OF INVESTMENTS - MARCH 31, 2000 (UNAUDITED) - CONTINUED COMMON STOCKS - CONTINUED MISCELLANEOUS BUSINESS SERVICES - 5.6% eBAY, Inc. (a) 750 $ 132,000 Ventro Corp. (a) 375 21,234 ----------------- 153,234 ----------------- MULTIMEDIA PRODUCTION, GRAPHICS & PUBLISHING - 1.4% Macromedia, Inc. (a) 430 38,834 ----------------- NETWORKING & COMMUNICATION DEVICES - 5.8% Foundry Networks, Inc. (a) 240 34,500 LinuxWizardry System, Inc. (a) 35,200 126,498 ----------------- 160,998 ----------------- SECURITY SOFTWARE SERVICES - 3.8% Check Point Software Technologies LTD. (a) 350 59,872 VeriSign, Inc. (a) 300 44,963 ----------------- 104,835 ----------------- SERVICES TO FINANCIAL COMPANIES - 2.4% Checkfree Holdings Corp. (a) 375 26,438 First Data Corp. 900 39,769 ----------------- 66,207 ----------------- SERVICES TO COMMUNICATION PROVIDERS - 1.7% Global Crossing LTD. (a) 650 26,650 Network Access Solutions Corp. (a) 950 20,900 ----------------- 47,550 ----------------- SPECIALTY RETAIL - 1.0% Amazon.com, Inc. (a) 400 26,800 ----------------- TOTAL COMMON STOCKS (COST $3,034,407) 2,801,736 ----------------- TOTAL INVESTMENTS - 101.3% (COST $3,034,407) 2,801,736 ----------------- LIABILITIES IN EXCESS OF OTHER ASSETS - (1.3)% (36,385) ----------------- TOTAL NET ASSETS - 100.0% $ 2,765,351 ================= (a) Non-income producing
WESTCOTT NOTHING BUT NET FUND MARCH 31, 2000 STATEMENT OF ASSETS & LIABILITIES (Unaudited) ASSETS Investment in securities (cost $3,034,407) $ 2,801,736 Dividends receivable 18 Interest receivable 592 Receivable for securities sold 174,260 ------------------- TOTAL ASSETS 2,976,606 LIABILITIES Accrued investment advisory fee payable $ 4,738 Accrued distribution fee payable 177 Payable for securities purchased 13,751 Payable to custodiun bank 192,439 Other payables and accrued expenses 150 ----------------- TOTAL LIABILITIES 211,255 ------------------- NET ASSETS $ 2,765,351 =================== Net Assets consist of: Paid in capital $ 3,019,791 Accumulated net investment loss (10,665) Accumulated net realized loss on investments (11,104) Net unrealized depreciation on investments (232,671) ------------------- NET ASSETS $ 2,765,351 =================== CLASS A: Net Asset Value, offering price and redemption price per share ($273,426/28,362 shares) $ 9.64 =================== CLASS I: Net Asset Value, offering price and redemption price per share ($2,491,925/260,053 shares) $ 9.58 ===================
WESTCOTT NOTHING BUT NET FUND STATEMENT OF OPERATIONS FOR THE PERIOD DECEMBER 8, 1999 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 2000 (UNAUDITED) INVESTMENT INCOME Dividend income $ 36 Interest income 2,347 --------------- TOTAL INCOME 2,383 EXPENSES Investment advisory fee $ 12,722 Distribution fees - Class A 177 Trustee's fees 1,343 ------------------- Total expenses before reimbursement 14,242 Reimbursed expenses (1,194) ------------------- Total operating expenses 13,048 --------------- NET INVESTMENT LOSS (10,665) --------------- REALIZED & UNREALIZED GAIN (LOSS) Net realized loss on investment securities (11,104) Change in net unrealized depreciation on investment securities (232,671) ------------------- Net loss on investment securities (243,775) --------------- NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (254,440) ===============
WESTCOTT NOTHING BUT NET FUND STATEMENT OF CHANGES IN NET ASSETS FOR THE PERIOD DECEMBER 8, 1999 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 2000 (UNAUDITED) INCREASE (DECREASE) IN NET ASSETS OPERATIONS Net investment loss $ (10,665) Net realized loss on investment securities (11,104) Change in net unrealized depreciation (232,671) ----------------- Net decrease in net assets resulting from operations (254,440) ----------------- DISTRIBUTIONS TO SHAREHOLDERS From net investment income 0 Return of capital 0 From net realized gain 0 ----------------- Total distributions 0 SHARE TRANSACTIONS - NET INCREASE Class A 284,693 Class I 2,735,098 ----------------- NET INCREASE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS 3,019,791 ----------------- TOTAL INCREASE IN NET ASSETS 2,765,351 ----------------- Net Assets Beginning of period 0 ----------------- End of period [including accumulated net $ 2,765,351 investment loss of $(10,665)] =================
WESTCOTT NOTHING BUT NET FUND CLASS A FINANCIAL HIGHLIGHTS FOR THE PERIOD DECEMBER 8, 1999 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 2000 (UNAUDITED) Selected Per Share Data Net asset value, beginning of period $ 10.00 --------------- Income from investment operations Net investment loss (0.06) Net realized and unrealized gain (loss) (0.30) --------------- Total from investment operations (0.36) --------------- Less distributions: Distributions from net investment income 0.00 Distributions from net realized gains 0.00 --------------- Total distributions 0.00 --------------- Net asset value, end of period $ 9.64 =============== TOTAL RETURN (a) (3.60)% RATIOS AND SUPPLEMENTAL DATA Net assets, end of period (000) $273 Ratio of expenses to average net assets 1.97% (b) Ratio of expenses to average net assets before reimbursement 2.17% (b) Ratio of net investment income to average net assets (1.64)% (b) Ratio of net investment income (loss) to average net assets before reimbursement (1.84)% (b) Portfolio turnover rate 124.70% (b) (a) For periods of less than a full year, total returns are not annualized. (b) Annualized WESTCOTT NOTHING BUT NET FUND CLASS I FINANCIAL HIGHLIGHTS FOR THE PERIOD DECEMBER 8, 1999 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 2000 (UNAUDITED) Selected Per Share Data Net asset value, beginning of period $ 10.00 --------------- Income from investment operations Net investment loss (0.05) Net realized and unrealized gain (loss) (0.37) --------------- Total from investment operations (0.42) --------------- Less distributions: Distributions from net investment income 0.00 Distributions from net realized gains 0.00 --------------- Total distributions 0.00 --------------- Net asset value, end of period $ 9.58 =============== TOTAL RETURN (a) (4.20)% RATIOS AND SUPPLEMENTAL DATA Net assets, end of period (000) $2,492 Ratio of expenses to average net assets 1.72% (b) Ratio of expenses to average net assets before reimbursement 1.90% (b) Ratio of net investment income to average net assets (1.40)% (b) Ratio of net investment income (loss) to average net assets before reimbursement (1.58)% (b) Portfolio turnover rate 124.70% (b) (a) For periods of less than a full year, total returns are not annualized. (b) Annualized WESTCOTT NOTHING BUT NET FUND NOTES TO FINANCIAL STATEMENTS MARCH 31, 2000 (UNAUDITED) NOTE 1. ORGANIZATION The Westcott Nothing But Net Fund (the "Fund") was organized as diversified series of AmeriPrime Funds (the "Trust") on September 29, 1999 and commenced operations on December 8, 1999. The Trust is an open-end investment company established under the laws of Ohio by an Agreement and Declaration of Trust dated August 8, 1995 (the "Trust Agreement"). The Fund's investment objective is to provide long-term growth of capital. The Trust Agreement permits the Trustees to issue an unlimited number of shares of beneficial interest without par value. The Fund currently consists of two classes of shares, Class A and Class I, each of which has equal rights as to assets and voting privileges except that each class has different distribution expenses. Each class has exclusive voting rights with respect to its distribution plans. 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 VALUATION- 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 opinion of the Adviser, 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 Adviser 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 Adviser, in conformity with guidelines adopted by and subject to review of 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 Adviser believes such prices accurately reflect the fair market values 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 Adviser, subject to review by 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 WESTCOTT NOTHING BUT NET FUND NOTES TO FINANCIAL STATEMENTS MARCH 31, 2000 (UNAUDITED) - CONTINUED NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED using the amortized-cost method of valuation, which the Board has determined will represent fair value. 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 comply with federal tax rules regarding distribution of substantially all its net investment income and capital gains. These rules may cause multiple distributions during the course of the 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 Aegis Asset Management, Inc. (the "Adviser") to manage the Fund's investments. Layng Guerriero is primarily responsible for the day-to-day management of the portfolio of the Fund. Under the terms of the management agreement (the "Agreement"), the Adviser manages each Fund's investments subject to approval of the Board of Trustees and pays all of the expenses of each Fund except brokerage, taxes, borrowing costs (such as (a) interest and (b) dividend expenses on securities sold short), fees and expenses of the non-interested person trustees and extraordinary expenses. As compensation for its management services and agreement to pay the Fund's expenses, the Fund is obligated to pay the Adviser a fee (based on average daily net assets) of 1.70% computed and accrued daily and paid. For the period from December 8, 1999 (commencement of operations) through March 31, 2000, the Adviser received a fee of $12,722 from the Fund. The Adviser has voluntarily agreed to reimburse other expenses to the extent necessary to maintain total operating expenses at the rate of 1.97%, and 1.72% for A and B shares, respectively. For the period from December 8, 1999 (commencement of operations) through March 31, 2000, The Adviser reimbursed expenses of $1,194. There is no assurance that such reimbursement will continue in the future. WESTCOTT NOTHING BUT NET FUND NOTES TO FINANCIAL STATEMENTS MARCH 31, 2000 (UNAUDITED) - CONTINUED NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED On behalf of the Class A shares, the fund has adopted a distribution fee (the "Distribution Plan") under Rule 12b-1 of the 1940 Act. Under the Distribution Plan, the Fund is authorized to pay a fee in an amount not to exceed on an annual basis 0.25% of the average daily net asset value of the Class A Shares. For the period from December 8, 1999 (commencement of operations) through March 31, 2000, the Adviser received distribution fees of $177 from the Fund for expenses related to the sale of Fund shares. The Fund retains AmeriPrime Financial Services, Inc. (the "Administrator"), a wholly owned subsidiary of Unified Financial Services, Inc., to manage the Fund's business affairs and provide the Fund with administrative services, including all regulatory reporting and necessary office equipment and personnel. The Administrator receives a monthly fee from the Adviser equal to an annual rate of 0.10% of the Fund's assets under $50 million, 0.075% of the Fund's assets from $50 million to $100 million, and 0.050% of the Fund's assets over $100 million (subject to a minimum fee of $2,500 per month). For the period from December 8, 1999 (commencement of operations) through March 31, 2000, the Administrator received fees of $9,390 from the Adviser for administrative services provided to the Fund. The Fund retains Unified Fund Services, Inc. ("Unified"), a wholly owned subsidiary of Unified Financial Services, Inc., to act as the Fund's transfer agent and fund accountant. For its services as transfer agent, Unified receives a monthly fee from the Adviser of $1.20 per shareholder (subject to a minimum monthly fee of $750). For the period from December 8, 1999 (commencement of operations), Unified received fees of $6,653 from the Adviser for transfer agent services. For its services as fund accountant, Unified receives an annual fee from the Adviser equal to 0.0275% of the Fund's assets up to $100 million, 0.0250% of the Fund's assets from $100 million to $300 million and 0.0200% of the Fund's assets over $300 million (subject to various monthly minimum fees, the maximum being $2,000 per month for assets of $20 to $100 million). For the period from December 8, 1999 (commencement of operations), Unified received fees of $5,574 from the Adviser for fund accounting services. The Fund retains AmeriPrime Financial Securities, Inc. ("the Distributor"), a wholly owned subsidiary of Unified Financial Services, Inc. to act as the principal distributor of the Fund's shares. There were no payments made to the Distributor for the period from December 8, 1999 (commencement of operations) through March 31, 2000. Certain members of management of the Administrator and the Distributor are also members of management of the AmeriPrime Trust. WESTCOTT NOTHING BUT NET FUND NOTES TO FINANCIAL STATEMENTS MARCH 31, 2000 (UNAUDITED) - CONTINUED NOTE 4. SHARE TRANSACTIONS As of March 31, 2000, there were an unlimited number of authorized shares for the Fund. Paid in capital at March 31, 2000 was $3,019,791. Transactions in shares were as follows: FOR THE PERIOD DECEMBER 8, 1999 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 2000 SHARES DOLLARS CLASS A: Shares sold 50,886 $538,241 Shares issued from reinvested Dividends 0 0 Shares redeemed (22,524) (253,548) ---------- ----------- 28,362 $284,693 ========== =========== FOR THE PERIOD DECEMBER 8, 1999 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 2000 SHARES DOLLARS CLASS I: Shares sold 281,134 $2,960,385 Shares issued from reinvested Dividends 0 0 Shares redeemed (21,081) (225,287) ---------- ---------- 260,053 $2,735,098 ========== ========== NOTE 5. INVESTMENTS For the period from December 8, 1999 (commencement of operations) through March 31, 2000, purchases and sales of investment securities, other than short-term investments, aggregated $3,767,548 and $722,039, respectively. As of March 31, 2000, the gross unrealized appreciation for all securities totaled $334,090 and the gross unrealized depreciation for all securities totaled $566,761 for a net unrealized depreciation of $232,671. The aggregate cost of securities for federal income tax purposes at March 31, 2000 was $3,034,407. WESTCOTT NOTHING BUT NET FUND NOTES TO FINANCIAL STATEMENTS MARCH 31, 2000 (UNAUDITED) - CONTINUED 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 Adviser is not a registered broker-dealer of securities and 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 March 31, 2000, Margaret Guerriero beneficially owned in aggregate more than 94% of A Shares of the Fund. As of March 31, 2000, Eckhard Pfeiffer beneficially owned in aggregate more than 89% of I Shares of the Fund.