-----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, B+SoQFM1KDIo7jP2m6f2K05AZJ1XwsunlcJ06xvMgTkCLo5b5I0LOyFDRNi33VeA 0lCEGvHZG40oLKdrlCC1gw== /in/edgar/work/20000911/0001000579-00-000088/0001000579-00-000088.txt : 20000922 0001000579-00-000088.hdr.sgml : 20000922 ACCESSION NUMBER: 0001000579-00-000088 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000908 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERIPRIME FUNDS CENTRAL INDEX KEY: 0001000579 STANDARD INDUSTRIAL CLASSIFICATION: [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: 719740 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 0001.txt AMERIPRIME FUNDS GJMB GROWTH FUND ANNUAL REPORT JUNE 30, 2000 FUND ADVISOR: GAMBLE, JONES, MORPHY & BENT 301 EAST COLORADO BOULEVARD, SUITE 802 PASADENA, CALIFORNIA 91101 FOR A PROSPECTUS AND MORE INFORMATION, INCLUDING CHARGES AND EXPENSES CALL 1-888-912-4562. THE PROSPECTUS SHOULD BE READ CAREFULLY BEFORE INVESTING. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THE FUND'S INCEPTION DATE IS DECEMBER 31, 1998. DISTRIBUTED BY AMERIPRIME FINANCIAL SECURITIES, INC. GJMB GROWTH FUND Fund Report dated June 30, 2000 Dear Fellow Shareholders: We are pleased to present you with our Fund's investment results for the past eighteen months. The Fund's average annual total return from December 31, 1998 (inception of the Fund) through June 30, 2000 was 17.50%, net of all fees. This return was well ahead of the 13.27% return of the market capitalization weighted Standard & Poor's 500 Index. We are especially proud of our results on a trailing 12-month basis, due in large part to our superior stock selections in the final quarter of 1999. The Fund's investment results are compared below with the Standard & Poor's 500 Index. RETURNS FOR THE PERIODS ENDED JUNE 30, 2000 Average Annual Total Fund/Index Year-To-Date 1 Year Return Since Inception - ---------- ------------ ------- ---------------------- GJMB Growth Fund 1.44% +15.61% +17.50% S&P 500 Index -0.43% +7.25% +13.27% Comparison of the change in value of a $10,000 investment in the GJMB Growth Fund and the unmanaged S&P 500 Index [OBJECT OMITTED] GJMB Growth Fund S&P 500 Index 12/31/98 $10,000 $10,000 01/31/99 $10,110 $10,418 02/28/99 $ 9,990 $10,094 03/31/99 $10,330 $10,498 04/30/99 $10,670 $10,905 05/31/99 $10,270 $10,648 06/30/99 $11,020 $11,238 07/31/99 $10,720 $10,887 08/31/99 $10,900 $10,834 09/30/99 $10,800 $10,537 10/31/99 $11,610 $11,203 11/30/99 $11,980 $11,431 12/31/99 $12,559 $12,104 01/31/00 $12,257 $11,496 02/29/00 $12,036 $11,279 03/31/00 $12,820 $12,381 04/30/00 $12,830 $12,009 05/31/00 $12,368 $11,762 06/30/00 $12,740 $12,052 This chart shows the value of a hypothetical initial investment of $10,000 in the Fund and the S&P 500 Index on December 31, 1998 (inception of the Fund) and held through June 30, 2000. The S&P 500 Index is a widely recognized unmanaged index of common stock prices. The Index returns do not reflect expenses, which have been deducted from the Fund's return. These performance figures include the change in value of the stocks in the indices plus the reinvestment of dividends and are not annualized. THE FUND'S RETURN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF FUTURE RESULTS. PORTFOLIO OVERVIEW (as of June 30, 2000) SECTOR WEIGHTINGS TEN LARGEST EQUITY HOLDINGS - ----------------- --------------------------- Capital Equipment & Services 5.7% Pfizer 5.2% Consumer Cyclicals 4.3% Oracle Corporation 4.3% Consumer Non-Cyclicals 6.6% Intel Corporation 3.9% Energy/Oil Services 2.0% Microsoft Corp 3.9% Financial Services 7.7% EMC Corp 3.9% Health Care/Pharmaceuticals 18.6% General Electric 3.5% Technology 29.5% Sun Microsystems 3.4% Telecommunications 9.7% Lucent Technologies 3.4% Cash Equivalents 15.9% Cisco Systems 3.3% -------- Coca-Cola 3.3% Total 100.0% -------- Total 38.1%
OUR MARKET OUTLOOK The economy continues to provide a strong fundamental backdrop for investors. Declining interest rates due to the Federal Reserve's goal to keep inflation in check, combined with the government's operating surplus, should provide a scenario for continued long-term growth for our domestic economy. Notwithstanding the encouraging investing landscape, we anticipate continued rough treatment of those equities that fail to measure up to Wall Street's expectations. With the above components in place for the foreseeable future, we intensify our focus on corporate earnings. The market has reacted dramatically to both good and bad earnings results in the last several months. We believe in being long-term investors and therefore tend to look beyond one or even two quarters of earnings results as long as the long-term fundamentals remain intact. Sometimes the best opportunities are found as a result of the near-sighted nature of much of the investing arena. We try to take advantage of price weakness in the quality stocks that we are enthusiastic about and hope that they will be next year's successes for our fund. Although common stocks continue to be expensive on a historical basis, we feel long-term investors will be rewarded by our fund, which is designed to own companies that have a proven track record over the long term. We feel that the companies listed in our "Ten Largest Equity Holdings" are representative of our total fund holdings. We look forward to another successful year and are delighted that you have chosen to invest in the Fund with us. Best regards, Thomas S. Jones Christopher E. Morphy Principal-Gamble, Jones, Morphy & Bent Principal-Gamble, Jones, Morphy & Bent
GJMB GROWTH FUND SCHEDULE OF INVESTMENTS - JUNE 30, 2000 COMMON STOCKS - 84.1% SHARES VALUE CAPITAL EQUIPMENT & SERVICES - 5.7% Honeywell International, Inc. 3,600 $ 121,275 General Electric Co. 8,650 458,450 Illinois Tool Works, Inc. 2,900 165,300 ----------------- 745,025 ----------------- CONSUMER CYCLICALS - 4.3% Ford Motor Co. 5,600 240,800 Home Depot, Inc. 6,200 309,612 Visteon Corp. (a) 733 8,890 ----------------- 559,302 ----------------- CONSUMER NON-CYCLICALS - 6.6% Coca-Cola Co. 7,500 430,781 Procter & Gamble Co. 7,400 423,650 ----------------- 854,431 ----------------- ENERGY - 2.0% Chevron Corp. 1,500 127,219 Royal Dutch Petroleum Co. (d) 2,200 135,437 ----------------- 262,656 ----------------- FINANCIAL SERVICES - 7.7% American International Group, Inc. 2,400 282,000 Bank of America Corp. 5,300 227,900 Fannie Mae 4,600 240,062 FleetBoston Financial Corp. 7,175 243,950 ----------------- 993,912 ----------------- HEALTH CARE & PHARMACEUTICALS - 18.6% Abbott Laboratories 8,525 379,895 American Home Products Corp. 4,400 258,500 Bristol-Myers Squibb Co. 5,800 337,850 Johnson & Johnson 4,175 425,328 Merck & Co., Inc. 4,350 333,319 Pfizer, Inc. 14,050 674,400 ----------------- 2,409,292 ----------------- PREPACKAGED SOFTWARE - 8.2% Microsoft Corp. (a) 6,300 504,000 Oracle Corp. (a) 6,610 555,653 ----------------- 1,059,653 ----------------- GJMB GROWTH FUND SCHEDULE OF INVESTMENTS - JUNE 30, 2000 - CONTINUED COMMON STOCKS - CONTINUED SHARES VALUE TECHNOLOGY - 21.3% Cisco Systems, Inc. (a) 6,800 $ 432,225 EMC Corp. (a) 6,500 500,094 Intel Corp. 3,825 511,355 Lucent Technologies, Inc. 7,500 444,375 Motorola, Inc. 14,800 430,125 Sun Microsystems, Inc. (a) 4,896 445,230 ----------------- 2,763,404 ----------------- TELECOMMUNICATIONS - 9.7% AT&T Corp. 9,100 287,788 Bell Atlantic Corp. 5,550 282,009 Vodafone Airtouch PLC (c) 7,300 302,494 Worldcom, Inc. (a) 8,400 385,350 ----------------- 1,257,641 ----------------- TOTAL COMMON STOCKS (COST $9,530,890) 10,905,316 ----------------- PRINCIPAL AMOUNT VALUE Money Market Securities - 15.6% Firstar Treasury Fund, 5.54% (b) (Cost $2,025,893) 2,025,893 2,025,893 ----------------- TOTAL INVESTMENTS - 99.7% (COST $11,556,783) 12,931,209 ----------------- OTHER ASSETS LESS LIABILITIES - 0.3% 36,016 ----------------- TOTAL NET ASSETS - 100.0% $ 12,967,225 ================= (a) Non-income producing (b) Variable rate security; the coupon rate shown represents the rate at June 30, 2000. (c) American Depository Receipt (d) New York registry shares
GJMB GROWTH FUND JUNE 30, 2000 Statement of Assets & Liabilities ASSETS Investment in securities (cost $11,556,783) $ 12,931,209 Receivable for fund shares sold 31,962 Dividends receivable 8,133 Interest receivable 8,119 ------------------ TOTAL ASSETS 12,979,423 LIABILITIES Accrued investment advisory fee payable $ 12,195 Payable to custodian bank 3 ----------------- TOTAL LIABILITIES 12,198 ------------------ NET ASSETS $ 12,967,225 ================== Net Assets consist of: Paid in capital $ 11,144,350 Accumulated undistributed net investment income 33,577 Accumulated undistributed net realized gain on investments 414,872 Net unrealized appreciation on investments 1,374,426 ------------------ NET ASSETS, for 1,022,389 shares $ 12,967,225 ================== NET ASSET VALUE Net Assets Offering price and redemption price per share ($12,967,225 / 1,022,389) $ 12.68 ==================
GJMB GROWTH FUND STATEMENT OF OPERATIONS FOR THE YEAR ENDED JUNE 30, 2000 INVESTMENT INCOME Dividend income $ 90,239 Interest income 62,184 --------------- TOTAL INCOME 152,423 EXPENSES Investment advisory fee $ 114,130 Trustees' fees 2,055 ------------------ Total expenses before reimbursement 116,185 Reimbursed expenses (2,055) ------------------ Total operating expenses 114,130 --------------- NET INVESTMENT INCOME 38,293 --------------- REALIZED & UNREALIZED GAIN (LOSS) Net realized gain on investment securities 414,873 Change in net unrealized appreciation (depreciation) on investment securities 903,367 ------------------ Net gain on investment securities 1,318,240 --------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 1,356,533 ===============
GJMB GROWTH FUND STATEMENT OF CHANGES IN NET ASSETS YEAR ENDED PERIOD ENDED JUNE 30, 2000 JUNE 30, 1999 (A) ---------------------- ---------------------- Increase (Decrease) in Net Assets OPERATIONS Net investment income $ 38,293 $ 6,675 Net realized gain on investment securities 414,873 34,482 Change in net unrealized appreciation (depreciation) 903,367 471,059 ---------------------- ---------------------- Net increase in net assets resulting from operations 1,356,533 512,216 ---------------------- ---------------------- DISTRIBUTIONS TO SHAREHOLDERS From net investment income (11,391) 0 From net realized gains (34,483) 0 ---------------------- ---------------------- Total distributions (45,874) 0 ---------------------- ---------------------- SHARE TRANSACTIONS Net proceeds from sale of shares 5,493,847 5,990,403 Shares issued in reinvestment of distributions 45,673 0 Shares redeemed (385,290) (283) ---------------------- ---------------------- Net increase in net assets resulting from share transactions 5,154,230 5,990,120 ---------------------- ---------------------- TOTAL INCREASE IN NET ASSETS 6,464,889 6,502,336 ---------------------- ---------------------- NET ASSETS Beginning of period 6,502,336 0 ---------------------- ---------------------- End of period [including accumulated undistributed net investment income of $33,577 and $6,675, respectively] $ 12,967,225 $ 6,502,336 ====================== ====================== (a) December 31, 1998 (commencement of operations) to June 30, 1999.
GJMB GROWTH FUND FINANCIAL HIGHLIGHTS YEAR ENDED PERIOD ENDED JUNE 30, 2000 JUNE 30, 1999 (A) -------------------- -------------------- SELECTED PER SHARE DATA Net asset value, beginning of period $ 11.02 $ 10.00 -------------------- -------------------- Income from investment operations Net investment income 0.05 0.02 Net realized and unrealized gain 1.67 1.00 -------------------- -------------------- Total from investment operations 1.72 1.02 -------------------- -------------------- Less distributions: From net investment income (0.02) 0.00 From net realized gains (0.04) 0.00 -------------------- -------------------- Total distributions (0.06) 0.00 -------------------- -------------------- Net asset value, end of period $ 12.68 $ 11.02 ==================== ==================== TOTAL RETURN 15.61% 10.20% (c) RATIOS AND SUPPLEMENTAL DATA Net assets, end of period (000) $12,967 $6,502 Ratio of expenses to average net assets 1.20% 1.20% (b) Ratio of expenses to average net assets before reimbursement 1.22% 1.25% (b) Ratio of net investment income to average net assets 0.40% 0.34% (b) Ratio of net investment income to average net assets before reimbursement 0.38% 0.28% (b) Portfolio turnover rate 16.99% 24.26% (b) (a) December 31, 1998 (commencement of operations) to June 30, 1999. (b) Annualized (c) For a period of less than a full year, the total return is not annualized.
GJMB GROWTH FUND NOTES TO FINANCIAL STATEMENTS JUNE 30, 2000 NOTE 1. ORGANIZATION GJMB Growth Fund (the "Fund") was organized as a series of the AmeriPrime Funds (the "Trust") on October 22, 1998 and commenced operations on December 31, 1998. The Trust is established under the laws of Ohio by an Agreement and Declaration of Trust dated August 8, 1995 (the "Trust Agreement"). The Fund is registered under the Investment Company Act of 1940, as amended, as a non-diversified open-end management investment company. The Fund's investment objective is to provide long- term capital appreciation. The Trust Agreement permits the Board of Trustees (the "Board") 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. 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. 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. GJMB GROWTH FUND NOTES TO FINANCIAL STATEMENTS JUNE 30, 2000 - CONTINUED NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES The Fund retains Gamble, Jones, Morphy & Bent (the "Advisor") to manage the Fund's investments. The Advisor became a registered investment advisor in 1956 and was reorganized as a California corporation in 1990. Thomas S. Jones, President of the Advisor, and Thomas W. Bent, Executive Vice President of the Advisor, are the controlling shareholders of Gamble, Jones, Morphy & Bent. The investment decisions for the Fund are made by the executive committee 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 year ended June 30, 2000 the Advisor received a fee of $114,130 from the Fund. The Advisor has contractually agreed to reimburse other expenses to the extent necessary to maintain total operating expenses at the rate of 1.20% through October 31, 2004. For the year ended June 30, 2000, the Advisor reimbursed expenses of $2,055. There is no assurance that such reimbursement will continue in the future. 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 year ended June 30, 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 year ended June 30, 2000, Unified received fees of $13,002 from the Advisor for transfer agent services provided to the Fund. 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 million to $100 million). For the year ended June 30, 2000, Unified received fees of $15,000 from the Advisor for fund accounting services provided to the Fund. 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 year ended June 30, 2000. Certain members of management of the Administrator and the Distributor are also members of management of the AmeriPrime Trust. GJMB GROWTH FUND NOTES TO FINANCIAL STATEMENTS JUNE 30, 2000 - CONTINUED NOTE 4. SHARE TRANSACTIONS As of June 30, 2000, there were an unlimited number of authorized shares for the Fund. Paid in capital at June 30, 2000 was $11,144,350. Transactions in shares were as follows: FOR THE YEAR ENDED FOR THE PERIOD DECEMBER 31, 1998 JUNE 30, 2000 (COMMENCEMENT OF OPERATIONS) TO JUNE 30, 1999 SHARES DOLLARS SHARES DOLLARS Shares sold 460,218 $5,493,847 589,954 $5,990,403 Shares issued in reinvestment of dividends 3,651 45,673 0 0 Shares redeemed (31,407) (385,290) (27) (283) --------- ----------- --------- ----------- 432,462 $5,154,230 589,927 $5,990,120 ========= =========== ========= ===========
NOTE 5. INVESTMENTS For the year ended June 30, 2000, purchases and sales of investment securities, other than short-term investments, aggregated $5,186,176 and $1,400,994, respectively. As of June 30, 2000, the gross unrealized appreciation for all securities totaled $2,295,215 and the gross unrealized depreciation for all securities totaled $920,789 for a net unrealized appreciation of $1,374,426. The aggregate cost of securities for federal income tax purposes at June 30, 2000 was $11,556,783. 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 June 30, 2000, Charles Schwab & Co. owned of record, in aggregate, more than 94% of the Fund. INDEPENDENT AUDITOR'S REPORT To The Shareholders and Board of Trustees GJMB Growth Fund (a series of the AmeriPrime Funds) We have audited the accompanying statement of assets and liabilities of the GJMB Growth Fund, including the schedule of portfolio investments, as of June 30, 2000, and the related statement of operations for the year then ended, the statement of changes in net assets and the financial highlights for the year then ended, and the period from December 31, 1998 to June 30, 1999 in the period then ended. 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 as of June 30, 2000 by correspondence with the custodian. 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 GJMB Growth Fund as of June 30, 2000, the results of its operations for the year then ended, the changes in its net assets and the financial highlights for the year then ended, and the period from December 31, 1998 to June 30, 1999 in the period then ended, in conformity with generally accepted accounting principles. McCurdy & Associates CPA's, Inc. Westlake, Ohio 44145 July 19, 2000 June 30, 2000 Dear Fellow Shareholders, Since inception, August 5, 1996, the Fund has returned an average of +14.02% annually to shareholders. Over the same time period, our benchmark, the Russell Mid-Cap Value Index, has returned +12.74%. Year-to-date, the Fund has returned +5.30% versus our benchmark's return of -0.69%. Our returns continue to excel relative to our peers and benchmarks.
RETURNS FOR THE PERIODS ENDED JUNE 30, 2000 Average Annual Return Since Fund/Index YTD 1-Year 3-Year Inception IMS Capital Value Fund +5.30% +6.39% +10.28% +14.02% Russell Mid-Cap Value Index -.69% -7.91% +6.95% +12.74% Lipper Multi-Cap Value Category -.52% -4.30% +7.91% +13.01%
According to Lipper, our returns rank in the top quartile of our category over the last one and three-year periods. Our one-year return ranked in the 15th percentile and our three-year return ranked in the 25th percentile of our category (Lipper Multi-Cap Value, 482 funds). The objective of the IMS Capital Value Fund is long-term growth. The Fund invests in the stocks of quality, undervalued companies that are demonstrating positive business momentum. Our research is concentrated on companies that fall into one or more of our seven STRATEGIC FOCUS AREAS; these are industries or sectors of the market that are particularly opportunistic due to demographic or other long-term trends. While the Fund is concentrated in the stocks of just 35 companies, it's also well diversified, with representation in every major sector of the economy. We choose to limit the number of holdings to avoid diluting the impact of our best research. Thank you for joining us as shareholders in the IMS Capital Value Fund. We appreciate your confidence and trust. We continue to strive towards our goal of becoming one of the most successful and respected value funds in the industry. Sincerely, Carl W. Marker Portfolio Manager (Graphic Omitted) IMS Capital Value Fund Russell Midcap Value Index 8/5/96 $10,000 $10,000 9/30/96 10,500 10,504 12/31/96 11,141 11,410 3/31/97 11,721 11,604 6/30/97 12,451 13,065 9/30/97 13,221 14,732 12/31/97 11,888 15,331 3/31/98 13,602 16,863 6/30/98 13,236 16,430 9/30/98 11,210 14,186 12/31/98 13,463 16,110 3/31/99 13,980 15,609 6/30/99 15,694 17,354 9/30/99 13,624 15,508 12/31/99 15,857 16,093 3/31/00 17,393 16,255 6/30/00 16,698 15,982 This graph shows the value of a hypothetical initial investment of $10,000 in the Fund and the Russell Mid-Cap Value Index on August 5, 1996 (inception of the Fund) and held through June 30, 2000. The index is an unmanaged group of stocks whose total return includes the reinvestment of any dividends and capital gain distributions, but does not reflect expenses, which have lowered the Fund's return. THE FUND'S RETURN REPRESENTS PAST PERFORMANCE AND IS NOT A GUARANTEE OF FUTURE RESULTS. TOP TEN HOLDINGS - JUNE 30, 2000 American Power Conversion 5.28% IBM 4.73% Citigroup 4.68% Intel 4.62% Johnson & Johnson 4.40% Oracle Corp. 4.35% Chiron 4.10% T. Rowe Price 3.85% Disney 3.35% Symantec 3.26%
IMS CAPITAL VALUE FUND SCHEDULE OF INVESTMENTS - JUNE 30, 2000 COMMON STOCKS - 97.8% SHARES VALUE BANKS - 4.7% Citigroup, Inc. 9,000 $ 542,250 -------------- CHEMICALS - 1.9% DuPont (E.I.) de Nemours & Co. 5,000 218,750 -------------- COMMUNICATIONS EQUIPMENT - 3.1% Loral Space & Communications Ltd. (a) 15,000 104,063 Motorola, Inc. 9,000 261,562 -------------- 365,625 -------------- COMPUTER SERVICES & SOFTWARE - 17.5% DST Systems, Inc. (a) 4,000 304,500 International Business Machines Corp. 5,000 547,812 Novell, Inc. (a) 32,000 296,000 Oracle Corp. (a) 6,000 504,375 Symantec Corp. (a) 7,000 377,563 -------------- 2,030,250 -------------- DRUGS & PHARMACEUTICALS - 4.1% Chiron, Inc. (a) 10,000 475,000 -------------- ELECTRIC UTILITY - 2.9% Niagara Mohawk Holdings, Inc. (a) 24,000 334,500 -------------- ELECTRICAL EQUIPMENT - 5.3% American Power Conversion, Inc. (a) 15,000 612,187 -------------- ELECTRONICS - 4.6% Intel Corp. 4,000 534,750 -------------- ENTERTAINMENT - 3.3% Disney (Walt) Co. 10,000 388,125 -------------- FOODS - 3.1% Wm. Wrigley Jr. Company 4,500 360,844 -------------- GENERAL MEDICAL & SURGICAL HOSPITALS - 2.3% Tenet Healthcare Corp. (a) 10,000 270,000 -------------- HEALTH - DIVERSIFIED - 4.4% Johnson & Johnson 5,000 509,375 -------------- HOME HEALTH CARE - 2.3% Gentiva Health Services, Inc. (a) 33,000 268,125 -------------- HOUSEHOLD PRODUCTS - 3.7% Kimberly-Clark Corp. 5,000 286,875 Sunbeam Corp. (a) 40,000 137,500 -------------- 424,375 -------------- INSURANCE - 1.7% Conseco, Inc. 20,000 195,000 -------------- LEISURE DURABLES & TOYS - 4.0% Marvel Enterprises, Inc. (a) 40,000 247,500 Mattel, Inc. 16,000 211,000 -------------- 458,500 -------------- IMS CAPITAL VALUE FUND SCHEDULE OF INVESTMENTS - JUNE 30, 2000 - CONTINUED COMMON STOCKS - CONTINUED SHARES VALUE Miscellaneous Shopping Goods Stores - 1.2% Office Depot, Inc. (a) 23,000 $ 143,750 -------------- NETWORKING - 2.0% 3Com Corp. (a) 4,000 230,500 -------------- OIL & GAS - 5.2% Pennzoil-Quaker State, Inc. 28,000 337,750 Texaco, Inc. 5,000 266,250 -------------- 604,000 -------------- POLLUTION CONTROL - 3.0% Waste Management, Inc. 18,000 342,000 -------------- SAW MILLS, PLANNING MILLS, GENERAL - 1.6% Louisiana Pacific Corp. 17,000 184,875 -------------- SECURITIES INDUSTRY - 3.9% T. Rowe Price Associates, Inc. 10,500 446,250 -------------- SERVICES - 5.3% Block (H&R), Inc. 9,000 291,375 Cendant Corp. (a) 23,000 322,000 -------------- 613,375 -------------- SPECIALTY - 2.5% Toys R Us, Inc. (a) 20,000 291,250 -------------- TELEPHONE SERVICES - 2.2% AT&T Corp. 8,000 253,000 -------------- TRUCKING & FREIGHT - 2.0% FedEx Corp. (a) 6,000 228,000 -------------- TOTAL COMMON STOCKS (COST $8,820,061) 11,324,656 -------------- PRINCIPAL AMOUNT VALUE Money Market Securities - 3.0% Firstar Treasury Fund, 5.54% (b) (Cost $352,351) 352,351 $ 352,351 -------------- TOTAL INVESTMENTS - 100.8% (COST $9,172,412) 11,677,007 -------------- LIABILITIES IN EXCESS OF OTHER ASSETS - (0.8%) (92,433) -------------- TOTAL NET ASSETS - 100.0% $ 11,584,574 ============== (a) Non-income producing (b) Variable rate security; the coupon rate shown represents the rate at June 30, 2000.
IMS CAPITAL VALUE FUND JUNE 30, 2000 Statement of Assets & Liabilities ASSETS Investment in securities (cost $9,172,412) $ 11,677,007 Dividends receivable 7,990 Interest receivable 5,480 Prepaid Insurance 145 Deferred organization costs 9,982 ------------------ TOTAL ASSETS 11,700,604 LIABILITIES Accrued investment advisory fee payable, net of waiver $ 3,855 Payable for fund shares redeemed 102,301 Other payables and accrued expenses 9,874 ----------------- TOTAL LIABILITIES 116,030 ------------------ NET ASSETS $ 11,584,574 ================== Net Assets consist of: Paid in capital $ 8,800,927 Accumulated undistributed net realized gain on investments 279,052 Net unrealized appreciation on investments 2,504,595 ------------------ NET ASSETS, for 832,670 shares $ 11,584,574 ================== NET ASSET VALUE Offering price and redemption price per share ($11,584,574 / 832,670) $ 13.91 ==================
IMS CAPITAL VALUE FUND STATEMENT OF OPERATIONS FOR THE YEAR ENDED JUNE 30, 2000 INVESTMENT INCOME Dividend income $ 116,193 Interest income 23,439 ------------------- TOTAL INCOME 139,632 EXPENSES Investment advisory fee $ 142,721 Administration fees 23,275 Transfer agent fees 18,363 Pricing & bookkeeping fees 16,862 Legal fees 9,939 Custodian fees 5,705 Audit fees 5,000 Amortization of organizational expenses 4,729 Shareholder reports 5,815 Trustees' fees 2,054 Registration fees 417 Insurance 286 ------------------ Total expenses before reimbursement 235,166 Reimbursed expenses (55,066) ------------------ Total operating expenses 180,100 ------------------- NET INVESTMENT LOSS (40,468) ------------------- REALIZED & UNREALIZED GAIN (LOSS) Net realized gain on investment securities 333,492 Change in net unrealized appreciation (depreciation) on investment securities 431,787 ------------------ Net gain on investment securities 765,279 ------------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 724,811 ===================
STATEMENT OF CHANGES IN NET ASSETS YEAR PERIOD ENDED ENDED JUNE 30, JUNE 30, 2000 1999 (A) ----------------- ------------------ Increase (Decrease) in Net Assets OPERATIONS Net investment loss $ (40,468) $ (3,035) Net realized gain on investment securities 333,492 1,172,251 Net realized gain on options transactions 0 2,923 Change in net unrealized appreciation (depreciation) 431,787 1,803,897 ----------------- ------------------ Net increase in net assets resulting from operations 724,811 2,976,036 ----------------- ------------------ DISTRIBUTIONS TO SHAREHOLDERS From net realized gain (1,175,174) 0 ----------------- ------------------ Total distributions (1,175,174) 0 ----------------- ------------------ SHARE TRANSACTIONS Net proceeds from sale of shares 918,215 607,468 Shares issued in reinvestment of distributions 1,165,509 0 Shares redeemed (1,656,678) (3,499,602) ----------------- ------------------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS 427,046 (2,892,134) ----------------- ------------------ TOTAL INCREASE (DECREASE) IN NET ASSETS (23,317) 83,902 Net Assets Beginning of period 11,607,891 11,523,989 ----------------- ------------------ End of period [including accumulated undistributed net investment income of $0 and $0, respectively] $ 11,584,574 $ 11,607,891 ================= ================== (a) For the period November 1, 1998 through June 30, 1999
IMS CAPITAL VALUE FUND FINANCIAL HIGHLIGHTS PERIOD YEAR ENDED PERIOD ENDED YEARS ENDED OCTOBER 31, ENDED JUNE 30, JUNE 30, ------------------------------ OCTOBER 31, 2000 1999 (C) 1998 1997 1996 (D) ------------- ------------- ----------- ----------- ----------- SELECTED PER SHARE DATA Net asset value, beginning of period $ 14.56 $ 11.28 $ 12.06 $ 10.76 $ 10.00 ------------- ------------- ----------- ----------- ----------- Income from investment operations: Net investment income (loss) (0.05) 0.00 (0.06) (0.08) (0.01) Net realized and unrealized gain 0.88 3.28 0.12 1.38 0.77 ------------- ------------- ----------- ----------- ----------- Total from investment operations 0.83 3.28 0.06 1.30 0.76 ------------- ------------- ----------- ------------- ----------- Less Distributions From net investment income 0.00 0.00 (0.03) 0.00 0.00 From net realized gain (1.48) 0.00 (0.81) 0.00 0.00 ------------- ------------ ----------- ------------- ----------- Total Distributions (1.48) 0.00 (0.84) 0.00 0.00 ------------- ------------ ----------- ------------- ----------- Net asset value, end of period $ 13.91 $ 14.56 $ 11.28 $ 12.06 $ 10.76 ============ ============ =========== ============= =========== TOTAL RETURN 6.39% 29.08% (b) 2.27% 12.08% 7.60% (b) RATIOS AND SUPPLEMENTAL DATA Net assets, end of period (000) $11,585 11,608 $11,524 $9,932 $4,741 Ratio of expenses to average net assets 1.59% 1.59% (a) 1.73% 1.97% 1.84% (a) Ratio of expenses to average net assets before reimbursement 2.08% 2.50% (a) 2.34% 2.54% 3.92% (a) Ratio of net investment income (loss) to average net assets (0.36)% (0.04)% (a) (0.53)% (0.64)% (0.25)% (a) Ratio of net investment income (loss) to average net assets before reimbursement (0.84)% (0.95)% (a) (1.14)% 1.20)% (2.32)% (a) Portfolio turnover rate 75.69% 68.16% (a) 81.74% 34.76% 3.56% (a) (a) Annualized (b) For a period of less than a full year, the total return is not annualized. (c) For the period November 1, 1999 through June 30, 1999 (d) August 5, 1996 (commencement of operations) to October 31, 1996
IMS CAPITAL VALUE FUND NOTES TO FINANCIAL STATEMENTS JUNE 30, 2000 NOTE 1. ORGANIZATION IMS Capital Value Fund (the "Fund") was organized as a series of the AmeriPrime Funds (the "Trust") on July 30, 1996, and commenced operations on August 5, 1996. The Trust is established under the laws of Ohio by an Agreement and Declaration of Trust dated August 8, 1995 (the "Trust Agreement"). 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 growth. The Trust Agreement permits the Board of Trustees (the "Board") 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 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 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. 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 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 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. 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. Generally accepted accounting principles require that permanent financial reporting tax differences relating to shareholder distributions be reclassed to paid-in capital. IMS CAPITAL VALUE FUND NOTES TO FINANCIAL STATEMENTS JUNE 30, 2000 - CONTINUED NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES The Fund retains IMS Capital Management, Inc. (the "Advisor") to manage theFund's investments. Carl W. Marker, Chairman and President of the Advisor, 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. 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 1.26% of the average daily net assets of the Fund. For the year ended June 30, 2000 the Advisor received fees of $142,721 from the Fund. The Advisor has contractually agreed to reimburse Fund expenses to the extent necessary to maintain total operating expenses at the rate of 1.59% of net assets through October 31, 2004. For the year ended June 30, 2000 the Advisor reimbursed expenses of $55,066. There is no assurance that such arrangement will continue in the future. 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 months of July and August 1999, the Administrator received 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). Currently the Administrator receives a monthly fee from the Advisor equal to an annual rate of 0.20% of the Fund's assets with no monthly minimum. For the year ended June 30, 2000 the Administrator received fees of $23,275 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. There were no payments made to the Distributor for the year ended June 30, 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 June 30, 2000, there were an unlimited number of authorized shares for the Fund. Paid in capital at June 30, 2000 was $8,800,927. Transactions in shares were as follows: YEAR ENDED YEAR ENDED JUNE 30, 2000 JUNE 30, 1999 SHARES DOLLARS SHARES DOLLARS Shares sold 67,647 $918,215 45,949 $607,468 Shares issued in reinvestment of 89,723 1,165,509 0 0 distributions Shares redeemed (121,795) (1,656,678) (270,632) (3,499,602) --------- ------------ --------- ------------ 35,575 $427,046 (224,683) $(2,892,134) ========= ============ ========= ============ IMS CAPITAL VALUE FUND NOTES TO FINANCIAL STATEMENTS JUNE 30, 2000 - CONTINUED NOTE 5. INVESTMENTS For the year ended June 30, 2000, purchases and sales of investment securities, other than short-term investments, aggregated $8,216,569 and $9,066,048, respectively. The gross unrealized appreciation for all securities totaled $2,831,707 and the gross unrealized depreciation for all securities totaled $327,112 for a net unrealized appreciation of $2,504,595. The aggregate cost of securities for federal income tax purposes at June 30, 2000 was $9,172,412. 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. SUBSEQUENT EVENT As of July 1, 2000, Unified Fund Services, Inc., 431 N. Pennsylvania St., Indianapolis, IN 46204 ("Unified"), a wholly owned subsidiary of Unified Financial Services, Inc., acts as the Fund's transfer agent and, in such capacity, maintains the records of each shareholder's account, answers shareholders' inquiries concerning their accounts, processes purchases and redemptions of the Fund's shares, acts as dividend and distribution disbursing agent and performs other shareholder service functions. 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). In addition, Unified provides the Fund with fund accounting services, which includes certain monthly reports, record keeping and other management-related 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, and 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 million to $100 million). Prior to July 1, 2000, American Data Services, Inc. ("ADS"), Hauppauge Corporate Center, 150 Motor Parkway, Hauppauge, New York 11788, acted as the Fund's transfer agent and fund accountant. AmeriPrime Financial Services, Inc. is also a wholly owned subsidiary of Unified Financial Services, Inc., and as such, this relationship would require that Unified Financial Services, Inc. be considered an affiliate of the Fund. INDEPENDENT AUDITOR'S REPORT To The Shareholders and Board of Trustees IMS Capital Value Fund (a series of the AmeriPrime Funds) We have audited the accompanying statement of assets and liabilities of the IMS Capital Value Fund, including the schedule of portfolio investments, as of June 30, 2000, and the related statement of operations for the year then ended, the statement 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 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 as of June 30, 2000 by correspondence with the custodian. 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 IMS Capital Value Fund as of June 30, 2000, the results of its operations for the year then ended, the changes in its 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 July 19, 2000 AUXIER FOCUS FUND UPDATE BY JEFF AUXIER Dear Fellow Shareholders: INVESTMENT RESULTS - FISCAL YEAR ENDED JUNE 2000 The Auxier Focus Fund (the "Fund"), ticker symbol AUX1Z, ended its June fiscal year with a (0.47)% return since commencement of investment activities. It should be noted that the Fund did not start investing in accordance with its investment objective until October 1, 1999. Therefore, the true time frame is not twelve months, but closer to six or seven months. The Fund is not fully invested in common stocks. Your Fund manager is currently the largest shareholder. I treat your money like my own. Total Return Periods Ending 6/30/00 AUX1Z S&P 500 - -------------------------------------------------------------------------------- Year to date (2.63)% (0.43)% Since commencement of investment in accordance with investment objective (10/01/99) (0.47)% 14.38% Date Auxier Focus Fund - $9,953 S&P 500 Index - $11,438 10/1/99 10000.00 10000.00 10/31/99 10377.36 10632.60 11/30/99 10188.68 10848.67 12/31/99 10222.24 11487.25 1/31/00 10341.81 10910.21 2/29/00 10062.84 10703.85 3/31/00 10501.22 11750.33 4/30/00 10162.47 11396.97 5/30/00 9943.28 11163.03 6/30/00 9953.24 11438.23 |X| Past performance is not indicative of future performance |X| The Auxier Focus Fund's historical results are net of all expenses, versus the gross market benchmark (the S&P 500 Index). Investors are reminded that when trying to achieve benchmark returns, investment management fees, transaction costs and execution costs will be incurred. |X| The S&P 500 Index is an unmanaged index of 500 selected common stocks, most of which are listed on the New York Stock Exchange. The Index is adjusted for dividends and weighted toward stocks with large market capitalizations. |X| Commencement of investment in accordance with investment objective: October 1, 1999 APPROACH My goal is to first identify fundamentally strong, well-managed companies, and then determine a price that provides for a compelling risk/reward ratio. I always start with an assessment of the downside risk. In order to keep the compounding process going, it is imperative to first avoid permanent capital loss. COMMENTARY AND OUTLOOK Over the past 12 months the Federal Reserve Board raised interest rates by 1.75%. This has put pressure on equity valuations and helped to wring out excesses in the speculative areas of the market. Recently, evidence is appearing that points to a slower, more moderate economic pace. Housing starts and unemployment numbers are slowing, while productivity figures look good. If interest rates have peaked, where is one to invest? Salomon Smith Barney went back through 30 years of data to identify significant peaks in interest rates using the 10-year treasury yield. The table below shows the returns following the peak in rates. S&P 500 TOTAL RETURN FOLLOWING A REVERSAL IN YIELDS Date Total Return - 6 months Total Return - 12 Months - ---- ----------------------- ------------------------ 05-02-80 +23.9% +32.1% 11-06-81 +0.02% +22.7% 08-03-84 +12.6% +23.3% 01-15-88 +10.0% +16.8% 02-10-95 +16.8% +39.8% Average Returns: 12.7% 26.9% The best performing sector after interest rates peaked was the financial sector-- up an average of 33.4% versus 17.56% for any 12-month period. Given this historical track record, together with the fact that the financial sector currently trades for roughly half the valuation of the S&P 500 and less then 1/5 of the NASDAQ 100, it makes sense to be currently overweighted in this sector. An additional study was conducted that spanned the past 45 years. An analysis was made on the effects of both falling interest rates and slowing earnings growth on the performance of the equity market. Falling interest rates resulted in above average equity returns while rising interest rates resulted in below average returns. Surprisingly, liquidity in the form of lower interest rates was shown to be more important than earnings growth in driving equity market performance. We hope these investments as well as other first tier companies purchased at attractive prices will contribute to future rewards for our shareholders. Thank you for your continuing support. J. Jeffrey Auxier Portfolio Manager
Auxier Focus Fund Schedule of Investments - June 30, 2000 Common Stocks - 50.1% Shares Value Auto Manufacturer - 0.3% General Motors Corp. 75 $ 4,355 ----------------- Banks - 3.3% Fleet Boston Financial Corp. 400 13,600 Firstar Corp. 200 4,200 Bank One Corp. 200 5,375 U.S. Bancorp 600 11,550 Washington Mutual, Inc. 300 8,794 ----------------- 43,519 ----------------- Biological Products - 2.6% Amgen, Inc. (a) 500 35,125 ----------------- Broadcasting & Publishing - 1.7% Charter Communications, Inc. - Class A (a) 1,200 19,725 TV Guide, Inc. - Class A (a) 100 3,425 ----------------- 23,150 ----------------- Building Materials - 0.7% Home Depot, Inc. 100 4,994 Lowe's Companies, Inc. 100 4,106 ----------------- 9,100 ----------------- Communications Equipment - 1.2% Cox Communications, Inc. - Class A (a) 100 4,631 Lucent Technologies, Inc. 200 11,850 ----------------- 16,481 ----------------- Computer Equipment & Services - 0.4% Ceridian, Corp. (a) 200 4,825 ----------------- Computer Systems - 2.5% International Business Machines, Inc. 300 32,869 ----------------- Computers-Networking - 0.7% Auspex Systems, Inc. (a) 2,000 9,875 ----------------- Data Telecommunications - 0.3% SBC Communications, Inc. 100 4,325 ----------------- Delivery Services - 0.3% Fed Ex Corp. (a) 100 3,800 ----------------- Electronics - 2.0% Motorola, Inc. 900 26,156 ----------------- Entertainment - 0.5% Carnival Corp. 300 5,813 -----------------
Auxier Focus Fund Schedule of Investments - June 30, 2000 - continued Common Stocks - continued Shares Value Financial Services - 6.9% Associates First Capital Corp. - Class A 500 $ 11,125 Berkshire Hathaway, Inc. - Class B (a) 7 12,320 Fannie Mae 100 5,219 Federal Home Loan Mortgage Corp. 1,100 44,550 H&R Block, Inc. 600 19,425 ----------------- 92,639 ----------------- Food & Beverage - 1.5% Albertson's Inc. 150 4,988 Kroger Corp. (a) 500 10,969 Safeway, Inc. (a) 100 4,500 ----------------- 20,457 ----------------- Foreign Telecommunications - 2.9% Telefonica, S.A. (c) 29 1,851 Telstra Corp. Ltd. (c) 100 2,069 Telefonos De Mexico S.A. (c) 600 34,275 ----------------- 38,195 ----------------- Healthcare Services - 2.6% American Home Products, Inc. 200 11,750 Bristol-Myers Squibb, Inc. 400 23,300 ----------------- 35,050 ----------------- Insurance - 0.2% Allstate Corp. 100 2,294 ----------------- Internet - 0.6% America Online, Inc. (a) 150 7,903 ----------------- Office Products - 0.4% Xerox Corp. 300 6,000 ----------------- Oil & Natural Gas - 3.9% Enron Corp. 800 51,600 ----------------- Paper & Forest Products - 0.8% Willamette Industries, Inc. 400 10,900 ----------------- Personal Care - 0.5% Gillette Co. 200 6,988 ----------------- Pharmaceutical - 0.4% Pfizer, Inc. 100 4,800 ----------------- Restaurants - 0.7% McDonald's Corp. 300 9,806 ----------------- Retail - 0.1% Successories, Inc. (a) 1,000 1,781 -----------------
Auxier Focus Fund Schedule of Investments - June 30, 2000 - continued Common Stocks - continued Shares Value Software Products - 2.1% Microsoft Corp. (a) 350 $ 28,000 ----------------- Steel - 0.7% Precision Castparts Corp. 200 9,050 ----------------- Telecommunications - 8.9% Centurytel, Inc. 100 2,906 Sprint Corp. 100 5,181 Global Crossing Ltd. (a) 200 5,262 General Motors Corp. - Class H (a) 26 2,281 Loral Space & Communications, Ltd. (a) 1,900 13,062 Nextlink Communications, Inc. (a) 200 7,587 AT&T Corp. 1,300 41,113 Williams Communications Group, Inc. (a) 100 3,313 WorldCom, Inc. (a) 825 37,847 ----------------- 118,552 ----------------- Transportation - 0.4% United Parcel Services, Inc. 100 5,900 TOTAL COMMON STOCKS (Cost $725,056) 669,308 ----------------- Unit Investment Trust - 0.4% Amex Financial Select SPDR 200 4,750 ----------------- TOTAL UNIT INVESTMENT TRUST (Cost $4,775) Preferred Stocks - 0.4% Telecomunicacoes Brasileiras S.A. - Telebras (c) 50 4,856 Tele Norte Leste Participacoes S.A. (c) 5 118 ----------------- TOTAL PREFERRED STOCK (Cost $4,109) 4,974 ----------------- Principal Value Money Market Securities - 51.5% Firstar Treasury Fund, 5.44% (b) (Cost $688,477) $ 688,477 688,477 ----------------- TOTAL INVESTMENTS - 102.4% (Cost $1,422,417) 1,367,509 ----------------- Liabilities in excess of other assets - (2.4%) (31,467) ----------------- TOTAL NET ASSETS - 100.0% $ 1,336,042 ================= (a) Non-income producing (b) Variable rate security; the coupon rate shown represents the rate at June 30, 2000. (c) American Depository Receipt
Auxier Focus Fund June 30, 2000 Statement of Assets & Liabilities Assets Investment in securities (cost $1,422,417) $ 1,367,509 Cash 2,098 Receivable for fund shares sold 258 Dividends receivable 637 Interest receivable 2,861 ------------------ Total assets 1,373,363 Liabilities Accrued investment advisory fee $ 2,386 Payable for securities purchased 34,935 ----------------- Total liabilities 37,321 ------------------ Net Assets $ 1,336,042 ================== Net Assets consist of: Paid in capital $ 1,374,313 Accumulated undistributed net investment income 10,662 Accumulated undistributed net realized gain on investments 5,975 Net unrealized depreciation on investments (54,908) ------------------ Net Assets, for 133,686 shares $ 1,336,042 ================== Net Asset Value Offering price and redemption price per share ($1,336,042/ 133,686) $ 9.99 ==================
Auxier Focus Fund Statement of Operations for the period July 9, 1999 (Commencement of Operations) to June 30, 2000 Investment Income Dividend income $ 3,522 Interest income 20,923 ----------------- Total Income 24,445 Expenses Investment advisory fee $ 10,346 Trustees' fees 2,055 ------------------ Total expenses before reimbursement 12,401 Reimbursed expenses (2,055) ------------------ Total operating expenses 10,346 ----------------- Net Investment Income 14,099 ----------------- Realized & Unrealized Gain (Loss) Net realized gain on investment securities 5,975 Change in net unrealized depreciation on investment securities (54,908) ------------------ Net loss on investment securities (48,933) ----------------- Net decrease in net assets resulting from operations $ (34,834) =================
Auxier Focus Fund Statement of Changes in Net Assets for the period July 9, 1999 (Commencement of Operations) to June 30, 2000 Increase (Decrease) in Net Assets Operations Net investment income $ 14,099 Net realized gain on investment securities 5,975 Change in net unrealized depreciation (54,908) ----------------- Net decrease in net assets resulting from operations (34,834) ----------------- Distributions to shareholders From net investment income (3,437) ----------------- Total distributions (3,437) ----------------- Share Transactions Net proceeds from sale of shares 1,370,891 Shares issued in reinvestment of distributions 3,437 Shares redeemed (15) ----------------- Net increase in net assets resulting from share transactions 1,374,313 ----------------- Total increase in net assets 1,336,042 ----------------- Net Assets Beginning of period 0 ----------------- End of period [including accumulated undistributed net investment income of $10,662] $ 1,336,042 =================
Auxier Focus Fund Financial Highlights for the period July 9, 1999 (Commencement of Operations) to June 30, 2000 Selected Per Share Data Net asset value, beginning of period $ 10.00 -------------- Income from investment operations Net investment income 0.18 Net realized and unrealized loss (0.16) -------------- Total from investment operations 0.02 -------------- Less distributions: Distributions from net investment income (0.03) Distributions from net realized gains 0.00 -------------- Total distributions (0.03) -------------- Net asset value, end of period $ 9.99 ============== Total Return (0.47)(a)(b) Ratios and Supplemental Data Net assets, end of period (000) $ 1,336 Ratio of expenses to average net assets 1.35% (c) Ratio of expenses to average net assets before reimbursement 1.62% (c) Ratio of net investment income to average net assets 1.84% (c) Ratio of net investment income to average net assets before reimbursement 1.57% (c) Portfolio turnover rate 192.04% (c) (a) For periods of less than a full year, total return is not annualized. (b) Total return is calculated starting October 1, 1999 which is the date the Fund began investing in accordance with its investment objectives. (c) Annualized
AUXIER FOCUS FUND NOTES TO FINANCIAL STATEMENTS JUNE 30, 2000 NOTE 1. ORGANIZATION The Auxier Focus 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 July 9, 1999. The Fund is registered under the Investment Company Act of 1940, as amended, as a non-diversified open-end management investment company. The Fund's investment objective 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. The Fund is one of the series of funds currently authorized by the Trustees. 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 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. 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 of 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. AUXIER FOCUS FUND NOTES TO FINANCIAL STATEMENTS JUNE 30, 2000 - CONTINUED NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Auxier Asset Management, LLC, 8050 S. W. Warm Springs, Suite 130, Tualatin, OR 97062, serves as investment advisor to the Fund. As of June 30, 2000, the advisor manages approximately $175 million in assets. J. Jeffrey Auxier is President and Chief Investment Officer of the advisor and is responsible for the day-to-day management of the Fund's portfolio. Under the terms of the management agreement, (the "Agreement"), the Adviser 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, borrowing costs, fees and expenses of non-interested person trustees, and extraordinary expenses. 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 1.35% 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 Adviser. For the period from July 9, 1999 (commencement of operations) through June 30, 2000, the Advisor received a fee of $10,346 from the Fund. The Advisor has voluntarily agreed to limit the total expenses of the Fund (excluding borrowing costs, taxes, brokerage commissions and extraordinary expenses) to an annual rate of 1.35% of the average net assets of the Fund. For the period July 9, 1999 (commencement of operations) through June 30, 2000, the Advisor reimbursed expenses of $2,055. There is no assurance that such reimbursement will continue in the future. 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 to provide the Fund with administrative services, including all regulatory reporting and necessary office equipment and personnel. The Administrator receives a monthly fee 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 July 9, 1999 (commencement of operations) through June 30, 2000, the Administrator received fees of $20,625 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 period July 9, 1999 (commencement of operations) through June 30, 2000, Unified received fees of $11,041 for transfer agent services provided to the Fund. 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 million to $100 million). For the period July 9, 1999 (commencement of operations) through June 30, 2000, Unified received fees of $8,300 for fund accounting services provided to the Fund. 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. No payments were made to the Distributor for the period July 9, 1999 (commencement of operations) through June 30, 2000. Certain members of management of the Administrator and the Distributor are also members of management of the AmeriPrime Trust. AUXIER FOCUS FUND NOTES TO FINANCIAL STATEMENTS JUNE 30, 2000 - CONTINUED NOTE 4. SHARE TRANSACTIONS As of June 30, 2000, there was an unlimited number of authorized shares without par value for the Fund. Paid in capital at June 30, 2000 was $1,374,313. Transactions in shares were as follows: FOR THE PERIOD JULY 9, 1999 (COMMENCEMENT OF OPERATIONS) TO JUNE 30, 2000 SHARES DOLLARS Shares sold 133,350 $1,370,891 Shares issued in Reinvestment of Dividend 337 3,437 Shares redeemed (1) (15) --------- ------------ 133,686 1,374,313 ======== ============ NOTE 5. INVESTMENTS For the period from July 9, 1999 (commencement of operations) through June 30, 2000, purchases and sales of investment securities, other than short-term investments, aggregated $1,368,648 and $640,683, respectively. As of June 30, 2000, the gross unrealized appreciation for all securities totaled $47,275 and the gross unrealized depreciation for all securities totaled $102,183 for a net unrealized depreciation of $54,908. The aggregate cost of securities for federal income tax purposes at June 30, 2000 was $1,422,417. 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 June 30, 2000, J. Jeffery Auxier, the President and Chief Investment Officer of the Advisor, beneficially owned in aggregate more than 50 % of the Fund. INDEPENDENT AUDITOR'S REPORT To The Shareholders and Board of Trustees Auxier Focus Fund (a series of the AmeriPrime Funds) We have audited the accompanying statement of assets and liabilities of the Auxier Focus Fund, including the schedule of portfolio investments, as of June 30, 2000, and the related statement of operations, the statement of changes in net assets, and the financial highlights for the period from July 9, 1999 to June 30, 2000 in the period then ended. 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 as of June 30, 2000 by correspondence with the custodian and broker. 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 Auxier Focus Fund as of June 30, 2000, the results of its operations, the changes in its net assets and the financial highlights for the period from July 9, 1999 to June 30, 2000, in the period then ended, in conformity with generally accepted accounting principles. McCurdy & Associates CPA's, Inc. Westlake, Ohio 44145 July 19, 2000 -----END PRIVACY-ENHANCED MESSAGE-----