-----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, C4jTSdE/i1KLls/+gbqhLLCNjnnS2ua1i3xWMXNOnh08RQfKU38J61LFeZaQNhad Ox7C5POIUJ63q+HNbftBOg== 0001035449-02-000099.txt : 20020415 0001035449-02-000099.hdr.sgml : 20020415 ACCESSION NUMBER: 0001035449-02-000099 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20011231 FILED AS OF DATE: 20020304 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERIPRIME FUNDS CENTRAL INDEX KEY: 0001000579 IRS NUMBER: 752616671 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-09096 FILM NUMBER: 02565582 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 arigjmbn30d.txt ARISTON GJMB GJMB Growth Fund Fund Report dated December 31, 2001 Dear Fellow Shareholders: While we continue to be encouraged about the long term outlook for equity markets, we are maintaining a cautious stance in the short term, evidenced by our above average cash balance in the portfolio. We believe that the Federal Reserve has done almost all that they can to re-stimulate our economy and it is now up to American businesses to uphold their end of the bargain and begin to make capital expenditures in their infrastructure. It is our feeling that we are nearing an economic upturn and we are continually upgrading the holdings in our portfolio to best reflect our view. During 2001 the market reacted dramatically to the realization that the earnings outlook of twelve months ago was obviously too optimistic. We also were all shocked by the events of September 11th , yet have been encouraged by the market's resilience in the ensuing months. We believe in the concept of long term investing and therefore tend to look beyond the current days event's for potential long term opportunities. Sometimes, the best opportunities are found as a result of the near-sighted nature of others in the investing arena. We try to take advantage of pricing opportunities in the quality companies, which we are enthusiastic about holding, with the hope that they will be next year's successes for our fund. Although we are currently maintaining a moderate cash balance, it is our belief that investors who focus on the long term will be well compensated by owning stock in those companies that have a combinations of a proven track record of rewarding their shareholders and the financial fundamentals generally required to support future growth. We feel that the companies listed in our "Ten Largest Equity Holdings" are very representative of our total fund holdings. We appreciate your continued confidence in our investment strategy. Best regards, Thomas S. Jones Christopher E. Morphy Principal - Gamble, Jones, Morphy & Bent Principal - Gamble, Jones, Morphy & Bent
Fund Performance Returns for the Periods Ended December 31, 2001 Average Annual Total 6 Months 12 Months Return Since Inception Fund/Index Actual Return Actual Return (December 31, 1998) GJMB Growth Fund -2.93% -11.42% 0.39% S&P 500 Index -5.55% -11.88% -1.42%
Comparison of the Change in Value of a $200,000 investment in the GJMB Growth Fund and the unmanaged S&P 500 Index. The Fund S&P 500 Index 12/31/98 200,000 200,000 3/31/99 206,600 203,175 6/30/99 220,400 207,185 9/30/99 216,000 210,735 12/31/99 251,177 242,076 3/31/00 256,401 247,620 6/30/00 254,794 241,043 9/30/00 248,565 238,706 12/31/00 228,434 220,042 3/31/01 201,989 193,962 6/30/01 208,444 205,289 9/30/01 183,664 175,173 12/31/01 202,342 193,892 This chart shows the value of a hypothetical initial investment of $200,000 in the Fund and the S&P 500 Index on December 31, 1998 and held through December 31, 2001. The S&P 500 Index is widely recognized unmanaged indices of common stock prices and is representative of a broader market and range of securities than is found in the Fund portfolio. Individuals cannot invest directly in the indices. Performance figures reflect the change in value of the stocks in the index, and reinvestment of dividends. The index returns do not reflect expenses, which have been deducted from the Fund's return. The performance of the Fund is computed on a total return basis, which includes reinvestment of all dividends. THE FUND'S RETURN REPRESENTS PAST PERFORMANCE AND DOES NOT PREDICT FUTURE RESULTS. Investment returns and the principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Portfolio Overview (as of December 31, 2001) Industry Sector Weightings Ten Largest Equity Holdings - -------------------------- --------------------------- Information Technology 15.0% Home Depot, Inc. 3.0% Financials 11.7% The Boeing Co. 3.0% Health Care 9.7% Honeywell International, Inc. 2.9% Industrials 8.7% Kimberly-Clark Corp. 2.9% Consumer Discretionary 8.2% General Electric Co. 2.8% Consumer Staples 8.1% Walt Disney Co. 2.8% Telecommunication Services 6.6% The Coca-Cola Co. 2.7% Energy 2.5% Proctor & Gamble Co. 2.6% Cash Equivalents 29.5% U.S. Bancorp 2.5% Royal Dutch Petroleum Co. 2.4% Total 100.0% Total 27.6%
GJMB Growth Fund Schedule of Investments - December 31, 2001 Common Stocks - 70.5% Shares Value Aircraft - 3.0% The Boeing Co. 9,200 $ 356,776 ----------------- ----------------- Beverages - 2.7% The Coca-Cola Co. 7,000 330,050 ----------------- ----------------- Biological Products ( No Diagnostic Substances) - 2.2% Amgen Inc. (a) 4,500 253,980 ----------------- ----------------- Computer & Office Equipment - 1.5% Hewlett-Packard Co. 9,000 184,860 ----------------- ----------------- Computer Communications Equipment - 1.5% Cisco Systems, Inc. (a) 10,000 181,100 ----------------- ----------------- Computer Storage Devices - 1.4% EMC Corp. (a) 12,000 161,280 ----------------- ----------------- Electronic Computers - 1.5% Sun Microsystems, Inc. (a) 15,000 184,500 ----------------- ----------------- Financial Services - 2.2% Morgan Stanley Dean Witter & Co. 4,700 262,918 ----------------- ----------------- Fire, Marine & Casualty Insurance - 2.3% American International Group, Inc. 3,500 277,900 ----------------- ----------------- Instruments for Measurement & Testing of Electricity & Electric Signals - 1.6% Agilent Technologies, Inc. (a) 6,500 185,315 ----------------- ----------------- Motor Vehicle Parts & Accessories - 2.9% Honeywell International, Inc. 10,300 348,346 ----------------- ----------------- Motor Vehicles & Passenger Car Body Manufacturing - 2.4% Ford Motor Co. 18,500 290,820 ----------------- ----------------- National Commercial Banks - 7.2% Bank of America Corp. 4,500 283,275 Citigroup, Inc. 5,500 277,640 U.S. Bancorp 14,547 304,469 ----------------- ----------------- 865,384 ----------------- ----------------- Oil & Gas - 2.4% Royal Dutch Petroleum Co. (c) 6,000 294,120 ----------------- -----------------
See accompanying notes which are an integral part of the financial statements. GJMB Growth Fund Schedule of Investments - December 31, 2001 (Continued) Common Stocks - 70.5% (continued) Shares Value Paper Mills - 2.9% Kimberly-Clark Corp. 5,800 $ 346,840 ----------------- ----------------- Pharmaceutical Preparations - 7.5% American Home Products Corp. 4,100 251,576 Bristol-Myers Squibb Co. 4,600 234,600 Merck & Co., Inc. 4,000 235,200 Pfizer, Inc. 4,600 183,310 ----------------- ----------------- 904,686 ----------------- ----------------- Prepackaged Software - 3.1% Microsoft Corp. (a) 2,900 192,125 Oracle Corp. (a) 13,000 179,530 ----------------- ----------------- 371,655 ----------------- ----------------- Radio & TV Broadcasting & Communications Equipment - 1.5% Motorola, Inc. 12,000 180,240 ----------------- ----------------- Radio Telephone Communications - 3.3% AT&T Wireless Services, Inc. (a) 14,500 208,365 Vodafone Group PLC (c) 7,500 192,600 ----------------- ----------------- 400,965 ----------------- ----------------- Retail - Lumber & Other Building Materials Dealers - 3.0% Home Depot, Inc. 7,000 357,070 ----------------- ----------------- Semiconductor & Related Devices - 3.0% Intel Corp. 6,000 188,700 Texas Instruments, Inc. 6,000 168,000 ----------------- ----------------- 356,700 ----------------- ----------------- Services - Computer Integrated Systems Designs - 2.8% General Electric Co. 8,400 336,672 ----------------- ----------------- Services-Miscellaneous Amusement & Recreation - 2.8% Walt Disney Co. 16,000 331,520 ----------------- ----------------- Soap, Detergents, Cleaning Preparations, Perfumes & Cosmetics - 2.6% Procter & Gamble Co. 4,000 316,520 ----------------- ----------------- Telephone Communications (No Radio Telephone) - 3.2% AT&T Corp. 11,000 199,540 WorldCom Group (a) 13,500 190,080 ----------------- ----------------- 389,620 ----------------- ----------------- TOTAL COMMON STOCKS (Cost $9,497,721) 8,469,837 ----------------- -----------------
See accompanying notes which are an integral part of the financial statements. GJMB Growth Fund Schedule of Investments - December 31, 2001 (Continued) Principal Amount Value Money Market Securities - 29.5% Huntington Money Fund - Investment A - 0.94% (b) 3,537,269 $ 3,537,269 ----------------- ----------------- Cost ($3,537,269) TOTAL INVESTMENTS - 100.0% (Cost $13,034,990) 12,007,106 ----------------- ----------------- Liabilities in excess of other assets - 0.0% 711 ----------------- ----------------- TOTAL NET ASSETS - 100.0% $ 12,007,817 ================= =================
(a) Non-income producing (b) Variable rate security; the coupon rate shown represents the rate at December 31, 2001 (c) American Depositary Receipt See accompanying notes which are an integral part of the financial statements. GJMB Growth Fund Statement of Assets & Liabilities December 31, 2001 Assets Investment in securities (cost $13,034,990) $ 12,007,106 Dividends receivable 9,859 Interest receivable 3,041 ------------------- Total assets 12,020,006 ------------------- Liabilities Accrued investment advisory fee $ 12,189 ------------------- Total liabilities 12,189 ------------------- Net Assets $ 12,007,817 =================== Net Assets consist of: Paid in capital $ 13,761,414 Accumulated net realized loss on investments (725,713) Net unrealized depreciation on investments (1,027,884) ------------------- Net Assets, for 1,243,322 shares $ 12,007,817 =================== Net Asset Value Net Assets Offering price and redemption price per share ($12,007,817/1,243,322) $ 9.66 ===================
See accompanying notes which are an integral part of the financial statements. GJMB Growth Fund Statement of Operations for the period ended December 31, 2001 (a) Investment Income Dividend income $ 59,785 Interest income 28,943 ------------------- Total Income 88,728 Expenses Investment advisory fee $ 72,498 Trustee expense 1,040 ------------------- Total expenses before reimbursement 73,538 Reimbursed expenses (1,040) ------------------- Total operating expenses 72,498 ------------------- Net Investment Income (Loss) 16,230 ------------------- Realized & Unrealized Gain (Loss) Net realized gain (loss) on investment securities (689,364) Change in net unrealized appreciation (depreciation) on investment securities 280,375 ------------------- Net realized and unrealized gain (loss) on investment securities (408,989) ------------------- Net increase (decrease) in net assets resulting from operations $ (392,759) ===================
(a) The Fund elected to change its fiscal year to December 31. The figures shown are for the short year (July 1, 2001 through December 31, 2001). See accompanying notes which are an integral part of the financial statements. GJMB Growth Fund Statement of Changes in Net Assets Period ended Year ended December 31, 2001 (a) June 30, 2001 --------------------- ---------------------- Increase (Decrease) in Net Assets Operations Net investment income (loss) $ 16,230 $ 53,687 Net realized gain (loss) on investment securities (689,364) (57,455) Change in net unrealized appreciation (depreciation) 280,375 (2,682,685) --------------------- ---------------------- Net increase (decrease) in net assets resulting from operations (392,759) (2,686,453) --------------------- ---------------------- Distributions to shareholders From net investment income (55,707) (59,414) From net realized gains (13,468) (380,299) --------------------- ---------------------- Total distributions (69,175) (439,713) --------------------- ---------------------- Capital Share Transactions Proceeds from shares sold 259,944 3,640,631 Reinvestment of distributions 68,431 437,453 Amount paid for shares repurchased (555,291) (1,222,476) --------------------- ---------------------- Net increase (decrease) in net assets resulting from capital share transactions (226,916) 2,855,608 --------------------- ---------------------- Total increase (decrease) in net assets (688,850) (270,558) --------------------- ---------------------- Net Assets Beginning of period 12,696,667 12,967,225 --------------------- ---------------------- End of period [including accumulated undistributed net investment income (loss) of $0, and $27,850, respectively] $ 12,007,817 $ 12,696,667 ===================== ====================== Capital Share Transactions Shares sold 26,914 321,049 Shares issued in reinvestment of distributions 7,143 40,752 Shares repurchased (58,963) (115,962) --------------------- ---------------------- Net increase (decrease) from capital transactions (24,906) 245,839 ===================== ======================
(a) The Fund elected to change its fiscal year to December 31. The figures shown are for the short year (July 1, 2001 through December 31, 2001). See accompanying notes which are an integral part of the financial statements. GJMB Growth Fund Financial Highlights Period ended Year ended Year ended Period ended December 31, 2001 (d) June 30, 2001 June 30, 2000 June 30, 1999 (a) ------------------ ----------------- ---------------- ---------------------- Selected Per Share Data Net asset value, beginning of period $ 10.01 $ 12.68 $ 11.02 $ 10.00 ------------------ ----------------- ---------------- ---------------- Income from investment operations Net investment income 0.01 0.05 0.05 0.02 Net realized and unrealized gain (loss) (0.30) (2.33) 1.67 1.00 ------------------ ----------------- ---------------- ---------------- Total from investment operations (0.29) (2.28) 1.72 1.02 ------------------ ----------------- ---------------- ---------------- Less distributions: From net investment income (0.05) (0.05) (0.02) 0.00 From net realized gains (0.01) (0.34) (0.04) 0.00 ---------------- ---------------- ------------------ ----------------- ---------------- ---------------- Total distributions (0.06) (0.39) (0.06) 0.00 ------------------ ----------------- ---------------- ---------------- Net asset value, end of period $ 9.66 $ 10.01 $ 12.68 $ 11.02 ================== ================= ================ ================ Total Return (2.93)(c) (18.19)% 15.61% 10.20% (c) Ratios and Supplemental Data Net assets, end of period (000) $12,008 $12,697 $12,967 $6,502 Ratio of expenses to average net assets 1.20% (b) 1.20% 1.20% 1.20% (b) Ratio of expenses to average net assets before reimbursement 1.22% (b) 1.23% 1.22% 1.25% (b) Ratio of net investment income to average net assets 0.27% (b) 0.40% 0.40% 0.34% (b) Ratio of net investment income to average net assets before reimbursement 0.25% (b) 0.38% 0.38% 0.28% (b) Portfolio turnover rate 40.72% 59.92% 16.99% 24.26%
(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. (d) The Fund elected to change its fiscal year to December 31. The figures shown are for the short year (July 1, 2001 through December 31, 2001). See accompanying notes which are an integral part of the financial statements. GJMB Growth Fund Notes to Financial Statements December 31, 2001 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 Trust Agreement permits the Board of Trustees to issue an unlimited number of shares of beneficial interest of separate series without par value. The Fund is one of a series of funds currently authorized by the Board of Trustees. The Fund's investment objective is to provide long term capital appreciation. The investment advisor to the Fund is Gamble, Jones, Morphy & Bent (the "Advisor"). The Board of Trustees approved a change in the fiscal year-end of the Fund from June 30 to December 31. Accordingly, the financial statements of the Fund are presented for the six-month period ended December 31, 2001. 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 that 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 Fund's Advisor 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. 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. If the Advisor decides that a price provided by the pricing service does not accurately reflect the fair market value of the securities, when prices are not readily available from a pricing service, or when restricted or illiquid securities are being valued, securities are valued at fair value as determined in good faith by the Advisor, in conformity with guidelines adopted by and subject to review of the Board of Trustees. Short term investments in fixed income securities with maturities of less than 60 days when acquired, or which subsequently are within 60 days of maturity, are valued by using the amortized cost method of valuation, which the Board of Trustees 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. At December 31, 2001 loss carryovers totaled $488,248 expiring in 2009. 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. GJMB Growth Fund Notes to Financial Statements December 31, 2001 - continued NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - continued 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 Advisor is Gamble, Jones, Morphy & Bent. Thomas S. Jones, President of the Advisor, and Christopher E. Morphy, Corporate Secretary of the Advisor, own a majority of the Advisor's shares and may be deemed to have controlling interests. The investment decisions for the Fund are made by Gary A. Pulford under the guidance of the executive committee of the Advisor. While Mr. Pulford is responsible for the day-to-day management of the Fund's portfolio, the executive committee is actively involved in determining the overall make-up of the Fund. Under the terms of the management agreement (the "Agreement"), the Advisor manages the Fund's investments subject to approval of the Board and pays all of the expenses of the Fund except brokerage fees and commissions, taxes, interest, 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 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 six month period ended December 31, 2001 the Advisor earned a fee of $72,498 from the Fund. The Advisor has contractually agreed to reimburse the Fund for all fees and expenses of the non-interested person Trustees through October 31, 2004. For the six month period ended December 31, 2001, the Advisor reimbursed Trustees' expenses of $1,040. The Fund retains Unified Fund Services, Inc. ("Unified") to manage the Fund's business affairs and provide the Fund with administrative, transfer agency, and fund accounting services, including all regulatory reporting and necessary office equipment and personnel. The Advisor paid all administrative, transfer agency, and fund accounting fees on behalf of the Fund per the management agreement. A Trustee and the officers of the Trust are members of management and/or employees of Unified. The Fund retains Unified Financial Securities, Inc. to act as the principal distributor of its shares. There were no payments made to the distributor during the fiscal period ended December 31, 2001. A Trustee and officer of the Trust may be deemed to be an affiliate of Unified Financial Securities, Inc. NOTE 4. INVESTMENTS For the period ended December 31, 2001, purchases and sales of investment securities, other than short term investments, aggregated $3,813,480 and $4,913,326, respectively. As of December 31, 2001, the gross unrealized appreciation for all securities totaled $556,876 and the gross unrealized depreciation for all securities totaled $1,584,760 for a net unrealized depreciation of $1,027,884. The aggregate cost of securities for federal income tax purposes at December 31, 2001 was $13,293,561, including wash sales of $258,571. GJMB Growth Fund Notes to Financial Statements December 31, 2001 - continued NOTE 5. 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 6. 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 December 31, 2001, Charles Schwab & Co. held 94.38% of the outstanding Fund shares in an omnibus account for the benefit of others. 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 December 31, 2001, and the related statement of operations for the period then ended, the statements of changes in net assets for each of the two periods indicated in the period then ended, and the financial highlights for the period of July 1, 2001 to December 31, 2001 (change in accounting period), for each of the two years in the periods then ended and for the period of December 31, 1998 (commencement of operations) 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 auditing standards generally accepted in the United States of America. 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 December 31, 2001 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 December 31, 2001, the results of its operations for the period then ended, the changes in net assets for each of the periods indicated in the period then ended, and the financial highlights for July 1, 2001 to December 31, 2001 (change in accounting period), each of the two years in the periods then ended and for the period of December 31, 1998 (commencement of operations) to June 30, 1999 in the period then ended, in conformity with accounting principles generally accepted in the United States of America. McCurdy & Associates CPA's, Inc. Westlake, Ohio January 18, 2002 Information Regarding Trustees and Officers The Board of Trustees supervises the business activities of the Trust. Each Trustee serves as a trustee until the termination of the Trust unless the Trustee dies, resigns, retires or is removed. The following table provides information regarding each Trustee who is not an "interested person" of the Trust, as defined in the Investment Company Act of 1940. - --------------------------------------------------- ------------------- --------------------- ------------------------ Number of Portfolios Position(s) Held Length of in Fund Complex** Name, Age and Address with Trust Time Served Overseen by Trustee - --------------------------------------------------- ------------------- --------------------- ------------------------ - --------------------------------------------------- ------------------- --------------------- ------------------------ Steve L. Cobb Trustee Trustee since 1995 16 2001 N. Indianwood Avenue Broken Arrow, OK 74012 Year of Birth: 1957 - --------------------------------------------------- ------------------- --------------------- ------------------------ - ----------------------------------------------------------------------- ---------------------------------------------- Principal Occupations During Past 5 Years Other Directorships Held by Trustee - ----------------------------------------------------------------------- ---------------------------------------------- - ----------------------------------------------------------------------- ---------------------------------------------- President of Chandler Engineering Company, L.L.C., oil and gas None services company since 1997; various positions with Carbo Ceramics, Inc., oil field manufacturing/supply company, from 1984 to 1997, most recently Vice President of Marketing. - ----------------------------------------------------------------------- ---------------------------------------------- - --------------------------------------------------- ------------------- --------------------- ------------------------ Number of Portfolios Position(s) Held Length of in Fund Complex** Name, Age and Address with Trust Time Served Overseen by Trustee - --------------------------------------------------- ------------------- --------------------- ------------------------ - --------------------------------------------------- ------------------- --------------------- ------------------------ Gary E. Hippenstiel Trustee Trustee since 1995 16 600 Jefferson Street Suite 350 Houston, TX 77002 Year of Birth: 1947 - --------------------------------------------------- ------------------- --------------------- ------------------------ - ----------------------------------------------------------------------- ---------------------------------------------- Principal Occupations During Past 5 Years Other Directorships Held by Trustee - ----------------------------------------------------------------------- ---------------------------------------------- - ----------------------------------------------------------------------- ---------------------------------------------- Director, Vice President and Chief Investment Officer of Legacy Trust None Company since 1992; President and Director of Heritage Trust Company from 1994-1996; Vice President and Manager of Investments of Kanaly Trust Company from 1988 to 1992. - ----------------------------------------------------------------------- ---------------------------------------------- The following table provides information regarding each Trustee who is an "interested person" of the Trust, as defined in the Investment Company Act of 1940, and each officer of the Trust. - --------------------------------------------------- ------------------- --------------------- ------------------------ Number of Portfolios Position(s) In Length of in Fund Complex** Name, Age and Address Fund Complex** Time Served Overseen by Trustee - --------------------------------------------------- ------------------- --------------------- ------------------------ - --------------------------------------------------- ------------------- --------------------- ------------------------ Kenneth D. Trumpfheller* President, Trustee and 34 1725 E. Southlake Blvd. Secretary and President since 1995 Suite 200 Trustee Secretary since Southlake, Texas 76092 1995 Year of Birth: 1958 - --------------------------------------------------- ------------------- --------------------- ------------------------ - ----------------------------------------------------------------------- ---------------------------------------------- Principal Occupations During Past 5 Years Other Directorships Held by Trustee - ----------------------------------------------------------------------- ---------------------------------------------- - ----------------------------------------------------------------------- ---------------------------------------------- President and Managing Director of Unified Fund Services, Inc., the None Fund's transfer agent, fund accountant and administrator, since October 2000. President, Treasurer and Secretary of AmeriPrime Financial Services, Inc., a fund administrator, (which merged with Unified Fund Services, Inc.) from 1994 through October 2000. President, Treasurer and Secretary of AmeriPrime Financial Securities, Inc., the Trust's distributor through December 2000, from 1994 through December 2000. - ----------------------------------------------------------------------- ---------------------------------------------- - --------------------------------------------------- ------------------- --------------------- ------------------------ Number of Portfolios Position(s) in Length of in Fund Complex** Name, Age and Address Fund Complex Time Served Overseen by Trustee - --------------------------------------------------- ------------------- --------------------- ------------------------ - --------------------------------------------------- ------------------- --------------------- ------------------------ Robert A. Chopyak Treasurer and Treasurer and CFO N/A 1725 E. Southlake Blvd. Chief Financial since 2000 Suite 200 Officer Southlake, Texas 76092 Year of Birth: 1968 - --------------------------------------------------- ------------------- --------------------- ------------------------ - ----------------------------------------------------------------------- ---------------------------------------------- Principal Occupations During Past 5 Years Other Directorships Held by Trustee - ----------------------------------------------------------------------- ---------------------------------------------- - ----------------------------------------------------------------------- ---------------------------------------------- Assistant Vice-President of Financial Administration of Unified Fund None Services, Inc., the Fund's transfer agent, fund accountant and administrator, since August 2000. Manager of AmeriPrime Financial Services, Inc. from February 2000 to August 2000. Self-employed, performing Y2K testing, January 1999 to January 2000. Vice President of Fund Accounting, American Data Services, Inc., a mutual fund services company, October 1992 to December 1998. - ----------------------------------------------------------------------- ---------------------------------------------- * Mr. Trumpfheller in an "interested person" of the Trust because he is an officer of the Trust. In addition, he may be deemed to be and "interested person" of the Trust because he is a registered principal of the Trust's distributor. ** As of December 31, 2001, the term "Fund Complex" refers to AmeriPrime Funds and AmeriPrime Advisors Trust. The Statement of Additional Information includes additional information about the Trustees and is available without charge upon request, by calling toll free at 1-888-912-4562.
A R I S T O N - ----------------------- Ariston Capital Management Corporation 40 Lake Bellevue Drive Suite 220 Bellevue, Washington 98005 Telephone (425) 454-1600 Fax (425) 455-2534 ARISTON CONVERTIBLE SECURITIES FUND ARISTON INTERNET CONVERTIBLE FUND ANNUAL REPORT Dear Fellow Shareholders: We will remember the Year 2001 as "annus horribilis" (the horrible year). Please refer to the Management Discussion and Analysis of Fund Performance in the annual report for performance comparisons for both Funds for the year ended December 31, 2001. We appreciate your support and confidence in us. We will continue to work hard for our communal investment success. We always welcome the opportunity to discuss any question you may have about your investment. Sincerely, Richard B. Russell President February, 2002 For a prospectus and more information, including charges and expenses, call toll free 1-888-387-2273. The prospectus should be read carefully before investing. Past performance does not guarantee future results. The material contains forward-looking statements regarding the intent, beliefs, or current expectations of the author. Such forward-looking statements are not a guarantee of future performance, involve risks and uncertainties, and actual results may differ materially from those statements as a result of various factors. The views expressed are subject to change based on market and other conditions. Distributed by Unified Financial Securities, Inc., 431 N. Pennsylvania St. Indianapolis, IN 46204. Member NASD and SIPC MANAGEMENT DISCUSSION AND ANALYSIS OF FUND PERFORMANCE 3 Years 5 Years 10 Years -------- -------- -------- 1 Year Annualized Annualized Annualized - ------------------------------------------------------- ------------- --------------- ---------------- --------------- Ariston Convertible Securities Fund -26.23% +7.45% +7.46 +8.06 - ------------------------------------------------------- ------------- --------------- ---------------- --------------- Standard & Poor's 500 Index (unmanaged) -11.88% -1.03% +10.70% +12.94% - ------------------------------------------------------- ------------- --------------- ---------------- --------------- NASDAQ Composite Index(unmanaged) -21.05% -3.83% +8.86% +13.46% - ------------------------------------------------------- ------------- --------------- ---------------- --------------- Lehman Brothers Government Credit Bond Index (unmanaged) +8.51% +5.89% +7.37% +7.27% - ------------------------------------------------------- ------------- --------------- ---------------- --------------- Russell 2000 Index (unmanaged) +2.49% +6.42% +7.52% +11.52%
Average Annual Since April 30, 2000 1Year Inception - ------------------------------------------------------ ------------- ---------------- Ariston Internet Convertible Fund -33.53% -48.73% - ------------------------------------------------------- ------------- ---------------- NASDAQ Composite Index (unmanaged) -21.05% -49.48% - ------------------------------------------------------- ------------- ---------------- AMEX Internet Index (unmanaged) -47.81% -71.51% - ------------------------------------------------------- ------------- ---------------- Dow Jones Internet Index (unmanaged) -54.36% -79.23% - ------------------------------------------------------- ------------- ---------------- Sources: Lipper Analytical Services, Inc. & Wiesenberger, a Thomson Financial Company.
Ariston Lehman Brothers Russell Covertible Government Credit 2000 Securities Bond Index Index Fund $20,179 $18,837 - $21,415 ----------- ---------------- --------------- 1991 4th Quarter 10,000 10,000 10,000 1992 1st Quarter 9,862 9,850 10,751 2nd Quarter 9,361 10,249 10,018 3rd Quarter 10,036 10,750 10,304 4th Quarter 11,282 10,758 11,843 1993 1st Quarter 11,667 11,259 12,347 2nd Quarter 10,897 11,598 12,616 3rd Quarter 11,693 11,983 13,719 4th Quarter 12,020 11,948 14,080 1994 1st Quarter 11,585 11,572 13,705 2nd Quarter 11,364 11,428 13,171 3rd Quarter 11,848 11,485 14,085 4th Quarter 12,177 11,528 13,823 1995 1st Quarter 12,598 12,102 14,460 2nd Quarter 12,805 12,887 15,815 3rd Quarter 13,818 13,134 17,378 4th Quarter 14,445 13,746 17,755 1996 1st Quarter 15,228 13,424 18,660 2nd Quarter 14,857 13,487 19,593 3rd Quarter 15,587 13,724 19,660 4th Quarter 15,151 14,144 20,682 1997 1st Quarter 14,397 14,023 19,613 2nd Quarter 15,872 14,533 22,792 3rd Quarter 17,229 15,042 26,184 4th Quarter 17,145 15,525 25,306 1998 1st Quarter 18,588 15,761 27,850 2nd Quarter 18,066 16,174 26,549 3rd Quarter 15,168 16,974 21,202 4th Quarter 17,504 16,998 24,660 1999 1st Quarter 17,618 16,794 23,321 2nd Quarter 20,683 16,611 26,948 3rd Quarter 20,342 16,697 25,245 4th Quarter 34,065 16,629 29,821 2000 1st Quarter 37,363 17,074 31,933 2nd Quarter 33,178 17,322 30,726 3rd Quarter 37,156 17,819 31,067 4th Quarter 29,034 18,598 28,920 2001 1st Quarter 20,898 19,193 21,629 2nd Quarter 23,500 19,251 25,401 3rd Quarter 17,437 20,167 17,616 4th Quarter 21,415 20,179 18,837 This graph, prepared in accordance with SEC regulations, shows the value of a hypothetical initial investment of $10,000 in the Fund, the Lehman Brothers Government Credit Bond Index and the Russell 2000 Index on December 31, 1991 and held through December 31, 2001. The Lehman Brothers Government Credit Bond Index is a widely recognized unmanaged index of Government bonds. The Russell 2000 Index is a widely recognized unmanaged index of common stock prices. These indices are representative of a broader market and range of securities than is found in the Fund portfolio. Individuals cannot invest directly in any index. Performance figures reflect the change in value of the stocks and bonds in the index, and reinvestment of dividends. The index returns do not reflect expenses, which have been deducted from the Fund's return. The performance of the Fund is computed on a total return basis, which includes reinvestment of all dividends. THE FUND'S RETURN REPRESENTS PAST PERFORMANCE AND DOES NOT PREDICT FUTURE RESULTS. The graph and performance table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Investment returns and the principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Ariston AMEX NASDAQ Dow Jones Internet Internet Composite Internet Convertible Holdings Index Stock Securities $2,849 $5,072 Index Fund $2,077 $5,125 ----------- ------------- --------- --------- 5/1/00 10,000 10,000 10,000 10,000 5/31/00 8,670 8,225 8,811 8,013 6/30/00 9,490 9,669 10,277 9,608 7/31/00 9,160 9,491 9,761 8,870 8/31/00 10,630 10,789 10,902 10,729 9/30/00 10,310 9,810 9,521 9,567 10/31/00 9,590 8,569 8,736 7,649 11/30/00 7,580 6,157 6,737 4,904 12/31/00 7,710 5,458 6,408 4,551 1/31/01 8,360 6,070 7,193 5,071 2/28/01 6,170 4,200 5,583 3,177 3/31/01 5,390 3,269 4,776 2,324 4/30/01 6,310 3,897 5,493 2,922 5/31/01 6,120 3,816 5,480 2,929 6/30/01 5,990 3,688 5,613 2,815 7/31/01 5,360 3,285 5,265 2,275 8/31/01 4,890 2,609 4,691 1,764 9/30/01 4,240 1,997 3,895 1,297 10/31/01 4,750 2,341 4,393 1,545 11/30/01 5,010 2,879 5,019 1,962 12/31/01 5,125 2,849 5,072 2,077 This graph, prepared in accordance with SEC regulations, shows the value of a hypothetical initial investment of $10,000 in the Fund, the AMEX Internet Holdings Index, the Dow Jones Internet Index and the NASDAQ Composite Index on April 30, 2000 (Fund inception) and held through December 31, 2001. The AMEX Internet Holdings Index, the Dow Jones Internet Index and the NASDAQ Composite Index are widely recognized unmanaged indices of common stock prices and are representative of a broader market and range of securities than is found in the Fund portfolio. Individuals cannot invest directly in any index. Performance figures reflect the change in value of the stocks in the index, and reinvestment of dividends. The index returns do not reflect expenses, which have been deducted from the Fund's return. The performance of the Fund is computed on a total return basis, which includes reinvestment of all dividends. THE FUND'S RETURN REPRESENTS PAST PERFORMANCE AND DOES NOT PREDICT FUTURE RESULTS. The graph and performance table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Investment returns and the principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Last years performance was very disappointing. We did not fully anticipate the abnormal confluence of events that led to the most severe bear market in a generation. The first global recession since the early 1970's, an unprecedented technology inventory correction, and the disruptive paradigm shift toward internet computing platforms were all finally trumped by the September 11 tragedy. To make matters worse, our investment style concentrates on carefully chosen strategically positioned growth companies. Since earnings growth was totally out-of-favor last year, this strategy lagged badly. Value strategies produced the best relative returns last year, for the first time since the middle 1980's. Growth and value strategies tend to compete with one another. Value stocks tend to be defensive plays that perform best in weak market periods. When the market improves, growth-oriented companies take the lead. During the economic recovery investors should again focus more on earnings growth and less on tangible balance sheet asset analysis, which drives value strategies. Investors in the aggregate are always wrong at critical market turning points. They are euphoric at market tops and depressed at market bottoms. Euphoria ruled at the top in early 2000 and investor's emotions progressed downward along with the bear market until unmistakable signs of capitulation occurred coincident with the April 2001 bottom. In late August 2001 this bottom was being retested with predictable investor despondency. Then the September 11 disaster hit closing the market for several days. The massive panic selling that briefly followed created capitulation of historic proportions with a historic bottom on September 21. We believe this market low was a very major, epic market bottom similar to the major lows in 1982, 1974, 1938 and 1932. The Enron debacle, the Tyco meltdown, and the related accounting psychosis are currently causing a partial retest of last September's bottom corresponding to the depression phase of the cycle of market emotions. It is human nature during a period of disillusionment to let one's dour emotions rule and those emotions are normally governed by recent events. The unending negative drumbeat in the media further tends to amplify this tendency, but the markets are forward looking and they discount events before they are obvious to the majority. There are many reliable historical indicators measuring the economic relationships that drive the investment cycles. Currently, the reality is that they are unequivocally bullish for the stock market and economy going forward. The best and most important indicators of future market and economic activity are those that measure monetary trends. These monetary indicators are as bullish as any time in history. The Federal Reserve has slashed short-term interest rates by 73% to the lowest level in four decades. It has been flooding the economy with liquidity. The money supply has been growing at skyrocketing rates. Inevitably, all this stimulus will kick in. Almost all of this growing ocean of excess of monetary liquidity has been diverted into the bomb shelter - money market funds. Last year money market fund assets grew by a whopping $440 billion to $2.24 trillion. Money market inflows topped any full year's inflows into stock funds ever. For every one dollar inflow into stock funds, ten dollars got stashed in money market funds. This has happened despite the fact that the return on taxable money funds dropped to 1.6% versus 6.0% one year earlier. Money market funds are now providing a negative return after inflation and taxes. With another $2.3 trillion hiding in bank savings accounts with similar minuscule yields, there is a growing ocean of liquidity creating an explosive bullish mix. The pessimistic bearish argument generally centers on the idea that growth stocks (particularly technology stocks) "are still expensive." This argument just does not make any sense whatsoever. Intuitively, stock valuations should be more compelling at NASDAQ 1,800 then they were at NASDAQ 5,000. The mistake being made is to value stocks on depressed current or past-year earnings or to project these earnings levels ahead. Stocks need to be valued on long-term earnings potential and that is not happening now. We do not need a huge bolt of demand to get commensurate earnings growth. We should get a disproportionate amount of earnings growth going forward with only a modest increase in demand. This is because of the highly leveraged business models of the leading growth companies. The leverage in profit margins worked against these growth companies in the downturn with their earnings taking a big hit. But now, at the bottom, profit margins should increase far out of proportion to even a modest increase in demand. We expect to see companies clobbering Wall Street earning estimates as this recovery gets going. When economic growth resumes, it is going to impact some parts of the economy before others. When the overall economy is growing at 2%-4%, some of the fastest growing industries will be growing at 8%-12% and some of the leading companies in those industries will be expanding at 20%-50%. We beleive growth areas are in productivity enhancing industries: technology related, service outsourcing and health sciences (especially biotechnology). They will be the primary beneficiaries of this new economic expansion. Our portfolios are invested in leading companies of these growth industries. Conversely, the laggards will be the productivity retarding industries: industrial cyclicals and commodity producers. These laggards tend to be the investment domain of the value investor. To summarize: It is not a case that the best is over. The best is yet to come. Ariston Convertible Securities Fund Schedule of Investments - December 31, 2001 Principal CONVERTIBLE BONDS - 58.2% Amount Value Biological Products (No Diagnostic Substances) - 2.8% Gilead Sciences, Inc., 5.00% 12/15/2007 $ 185,000 $ 287,213 --------------- Computer Services/Data Processing - 5.2% Automatic Data Processing, Inc., 0.00%, 02/20/2012 350,000 539,000 --------------- Computer Storage Devices - 4.9% Veritas Software Corp., 1.856%, 08/13/2006 380,000 501,600 --------------- Electronic Components - 4.2% Celestica, Inc., 0.00%, 08/01/2020 1,000,000 428,950 --------------- Pharmaceutical Preparations - 8.3% Cephalon, Inc., 5.25% 5/1/2006 350,000 429,625 Elan Finance Corp. Ltd., 0.00%, 12/14/2008 600,000 425,250 --------------- 854,875 Printed Circuit Boards - 5.8% Sanmina Corp., 4.25%, 05/01/2004 550,000 603,625 --------------- Semiconductors & Related Devices - 17.7% International Rectifier Corp., 4.25%, 07/15/2007 (b) 770,000 635,281 Nvidia Corp., 4.75%, 10/15/2007 365,000 609,094 Semtech Corp., 4.50%, 2/01/2007 525,000 573,615 --------------- 1,817,990 --------------- Services Computer Programing Services - 4.5% BEA Systems, Inc., 4.00%, 12/15/2006 (b) 550,000 465,382 --------------- Services - Prepackaged Software - 4.8% Siebel Systems Inc., 5.50%, 9/15/2006 350,000 495,250 --------------- TOTAL CONVERTIBLE BONDS (Cost $5,995,949) 5,993,885 --------------- COMMON STOCKS - 41.8% Shares Value Biological Products - 15.9% Genzyme Corp. (a) 27,300 $1,634,178 --------------- Radio & TV Broadcasting & Communications - 9.5% Qualcomm, Inc. (a) 19,269 973,084 --------------- Semiconductors & Related Devices - 16.4% Analog Devices, Inc. (a) 38,000 1,686,820 --------------- TOTAL COMMON STOCKS (Cost $1,080,962) 4,294,082 ---------------
See accompanying notes which are an integral part of the financial statements. Ariston Convertible Securities Fund Schedule of Investments - December 31, 2001 - continued Call Options - 0.0% Shares Subject to Call Value NASDAQ 100 @ 70 Expires 1/19/02 7,000 $ 525 525 NASDAQ 100 @ 70 Expires 1/18/03 5,500 2,200 --------------- --------------- (Cost $233,881) 2,725 --------------- TOTAL INVESTMENTS - 100.0% (Cost $7,310,792) 10,290,692 --------------- Other assets less liabilities - 0.0% 2,168 --------------- TOTAL NET ASSETS - 100.0% $10,292,860 =============== (a) Non-income producing (b) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, to qualified institutional buyers. At December 31, 2001 the value of these securities amounted to $1,100,663 or 10.7% of net assets.
See accompanying notes which are an integral part of the financial statements. Ariston Internet Convertible Fund Schedule of Investments - December 31, 2001 Principal CONVERTIBLE BONDS - 85.4% Amount Value Electronic Components - 6.1% Celestica, Inc., 0.00%, 8/01/2020 $ 75,000 $ 32,171 ------------ Electonic Components & Accessories - 4.1% Vishay Intertechnology, Inc., 0.00% 06/04/2021 (b) 40,000 21,400 ------------ Finance Services - 3.3% First Data Corp., 2.00% 3/01/2008 15,000 17,475 ------------ Printed Circuit Boards - 11.5% Jabil Circuit, Inc., 1.75%, 05/15/2021 25,000 23,875 Sanmina Corp., 4.25%, 05/01/2004 20,000 21,950 Sprint PCS Group, 4.00% 11/15/2029 20,000 14,925 ------------ ------------ 60,750 ------------ Semiconductors & Related Devices Manufacturing - 32.1% Atmel Corp., 0.00%, 04/21/2018 30,000 15,225 International Rectifier Corp.: 4.25%, 7/15/2007 10,000 8,250 4.25%, 7/15/2007 (b) 30,000 24,751 Lattice Semiconductor, Inc., 4.75% 11/01/2006 15,000 18,038 LSI Logic Corp., 4.25% 11/01/2006 25,000 28,531 Nvidia Corp., 4.75%, 10/15/2007 25,000 41,719 Semtech Corp., 4.50%, 02/01/2007 30,000 32,778 ------------ ------------ 169,292 ------------ Services, Computer Programming Services - 9.8% Affiliated Computer Services, Inc., 3.50% 02/15/2006 25,000 34,875 BEA Systems, Inc., 4.00%, 12/15/2006 (b) 20,000 16,923 ------------ ------------ 51,798 ------------ Services, Prepackaged Software - 18.5% Citrix Systems, Inc., 0.00% 03/22/2019 40,000 18,450 Siebel Systems, Inc., 5.50%, 9/15/2006 20,000 28,300 Symantec Corp., 3.00% 11/01/2006 (b) 20,000 24,375 Veritas Software Corp., 1.856%, 8/13/2006 20,000 26,400 ------------ 97,525 ------------ TOTAL CONVERTIBLE BONDS (Cost $491,490) 450,411 ------------ COMMON STOCKS - 13.2% Shares Value Semiconductors & Related Devices - 4.4% Analog Devices, Inc. (a) 525 23,305 ------------ Printed Circuit Boards - 4.4% Park Electrochemical Corp. (a) 888 23,443 ------------
See accompanying notes which are an integral part of the financial statements. Ariston Internet Convertible Fund Schedule of Investments - December 31, 2001 - continued COMMON STOCKS - 13.2% - continued Shares Value Radio & TV Broadcasting and Communications - 4.4% Qualcomm, Inc. (a) 450 $ 22,725 ------------ TOTAL COMMON STOCKS (Cost $80,353) 69,473 ------------ CALL OPTIONS - 0.4% Shares Subject to Call Value NASDAQ 100 @ 45 Expires 1/18/03 5,000 2,100 NASDAQ 100 @ 70 Expires 1/19/02 4,000 160 NASDAQ 100 @ 70 Expires 1/18/03 4,000 30 ------------ ------------ (Cost $21,981) 2,290 ------------ Principal Amount Value MONEY MARKET SECURITIES - 0.5% Huntington Money Fund - Investment A 0.97% (c) (Cost $2,394) $ 2,394 $ 2,394 ------------ TOTAL INVESTMENTS - 99.5% (Cost $596,218) 524,568 ------------ Other assets less liabilities - 0.5% 2,383 ------------ TOTAL NET ASSETS - 100.0% $526,951 ============ (a) Non-income producing (b) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, to qualified institutional buyers. At December 31, 2001, the value of these securities amounted to $87,449 or 16.60% of net assets. (c) Variable rate security; the coupon rate shown represents the rate at December 31, 2001.
See accompanying notes which are an integral part of the financial statements. Ariston Funds Statement of Assets & Liabilities - December 31, 2001 Aritson Aritson Convertible Internet Securities Convertible Fund Fund Assets Investment in securities (cost $7,310,792 and $10,290,692 $ 524,568 $596,218, respectively) Interest receivable 45,424 3,371 Receivable for securities sold 41,166 - Receivable for fund shares sold 5,500 - ---------------- ---------------- Total assets 10,382,782 527,939 Liabilities Payable to custodian bank 19,798 - Payable for fund shares purchased 44,493 - Accrued investment advisory fee 18,436 988 Other accrued liabilities 7,195 - ---------------- ---------------- Total liabilities 89,922 988 ---------------- ---------------- Net Assets $10,292,860 $ 526,951 ================ ================ Net Assets consist of: Paid in capital 10,230,823 926,623 Accumulated net realized gain (loss) (2,917,863) (328,022) Net unrealized appreciation (depreciation) on investments 2,979,900 (71,650) ---------------- ---------------- Net Assets $10,292,860 $ 526,951 ================ ================ Applicable to 654,967 and 25,702 shares outstanding, respectively Net asset value, offering and redemption price redemption price per share (Elite Shares see Note 1) $ 15.72 $ 20.50 ================ ================
See accompanying notes which are an integral part of the financial statements. Ariston Funds Statement of Operations For the year ended December 31, 2001 Aritson Aritson Convertible Internet Securities Convertible Investment Income Fund Fund Dividend Income $ - $ 1,363 Interest Income 234,887 18,439 Accretion of Discount 112,250 3,822 Amortization of Premium (439,264) (37,037) ---------------- ---------------- ---------------- ---------------- Total Income (92,127) (13,413) ---------------- ---------------- Expenses Investment advisory fee (see note 3) 291,220 11,559 12b-1 fees - Premier Class Shares (see note 3) - 382 Trustees Fees 2,239 1,589 Interest Expense 16,677 - ---------------- ---------------- Total operating expenses 310,136 13,530 ---------------- ---------------- Net Investment Income (Loss) (402,263) (26,943) ---------------- ---------------- Realized & Unrealized Gain (Loss) Net realized gain (loss) on investment securities (2,430,761) (256,210) Change in net unrealized appreciation (depreciation) on investment securities (2,042,903) 20,285 ---------------- ---------------- Net realized and unrealized gain (loss) on investment securities (4,473,664) (235,925) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations $(4,875,927) $ (262,868) ================ ================
See accompanying notes which are an integral part of the financial statements. Ariston Convertible Securities Fund Statement of Changes in Net Assets Year Year Ended Ended December 31, December 31, 2001 2000 ---------------- ---------------- Increase (Decrease) in Net Assets Operations Net investment income (loss) $ (402,263) $ (537,319) Net realized gain (loss) on investment securities (2,430,761) (354,274) Change in net unrealized appreciation (depreciation) (2,042,903) (3,997,844) ---------------- ---------------- Net increase (decrease) in net assets resulting from operations (4,875,927) (4,889,437) Distributions to shareholders From net realized gain - (172) ---------------- ---------------- Share Transactions Net proceeds from sale of shares 2,000,064 22,820,048 Shares issued in reinvestment of distributions - 172 Shares redeemed (5,797,234) (14,924,574) ---------------- ---------------- Net increase (decrease) in net assets resulting from share transactions (3,797,170) 7,895,646 ---------------- ---------------- Total increase (decrease) in net assets (8,673,097) 3,006,037 Net Assets Beginning of period 18,965,957 15,959,920 ---------------- ---------------- End of period $10,292,860 $18,965,957 ================ ================ Shares of Capital Stock in the Fund sold and redeemed: Shares sold 108,112 863,158 Shares issued in reinvestment of distributions - 7 Shares repurchased (343,274) (611,558) ---------------- ---------------- ---------------- ---------------- Total increase (decrease) of capital stock (235,162) 251,607 ---------------- ----------------
See accompanying notes which are an integral part of the financial statements. Ariston Internet Convertible Fund Statement of Changes in Net Assets Year Ended May 1, 2000 (a) December 31, through 2001 December 31, 2000 ---------------- --------------------------- Increase (Decrease) in Net Assets Operations Net investment income (loss) $ (26,943) $ (9,785) Net realized gain (loss) on investment securities (256,210) (71,811) Change in net unrealized appreciation (depreciation) 20,285 (91,935) ---------------- ---------------- Net decrease in net assets resulting from operations (262,868) (173,531) Share Transactions Net proceeds from sale of shares: Elite shares 99,129 836,112 Premier shares - 99,286 Shares issued in reinvestment of distributions: Elite shares - - Premier shares - - Shares redeemed: Elite shares (1,100) (17,840) Premier shares (52,237) - ---------------- ---------------- Net increase (decrease) in net assets resulting from share transactions 45,792 917,558 ---------------- ---------------- Total increase (decrease) in net assets (217,076) 744,027 Net Assets Beginning of year 744,027 - ---------------- ---------------- End of year $ 526,951 $ 744,027 ================ ================ Shares of Capital Stock in the Fund sold and redeemed: Share Transactions Net proceeds from sale of shares: Elite shares 16,545 88,468 Premier shares - 10,209 Shares redeemed Elite shares (b) (77,223) (2,088) Premier shares (10,209) - ---------------- ---------------- ---------------- ---------------- Total increase (decrease) in capital stock (70,887) 96,589 ================ ================ (a) May 1, 2000 (commencement of operations) through December 31, 2000 (b) Shares redeemed reflect the effect of a 1 for 4 reverse stock split that occurred on December 20, 2001.
See accompanying notes which are an integral part of the financial statements. Ariston Convertible Securities Fund Financial Highlights Years Ended December 31, ------------------------------------ ------------- ------------- ------------ ------------- ------------ ------------- ------------- ------------ 2001 2000 1999 (a) 1998 1997 ------------- ------------ ------------- ------------- ------------ ------------- ------------ ------------- ------------- ------------ Selected Per Share Data Net asset value, beginning of period $ 21.31 $ 25.00 $ 15.36 $ 15.08 $ 13.66 ------------- ------------ ------------- ------------- ------------ ------------- ------------ ------------- ------------- ------------ Income from investment operations: Net investment income (loss) (0.52) (0.58) (0.11) 0.00 0.11 Net realized and unrealized gain (loss) on investments (5.07) (3.11) 14.49 0.31 1.68 ------------- ------------ ------------- ------------- ------------ ------------- ------------ ------------- ------------- ------------ Total from investment operations (5.59) (3.69) 14.38 0.31 1.79 ------------- ------------ ------------- ------------- ------------ ------------- ------------ ------------- ------------- ------------ Less distributions: Distributions from net investment income 0.00 0.00 0.00 0.00 (0.11) Distributions from net realized gains 0.00 0.00 (4.74) (0.03) (0.26) ------------- ------------ ------------- ------------- ------------ ------------- ------------ ------------- ------------- ------------ Total distributions 0.00 0.00 (4.74) (0.03) (0.37) ------------- ------------ ------------- ------------- ------------ ------------- ------------ ------------- ------------- ------------ Net asset value, end of period $ 15.72 $ 21.31 $ 25.00 $ 15.36 $ 15.08 ============= ============ ============= ============= ============ ============= ============ ============= ============= ============ Total Return (26.23)% (14.76)% 94.61% 2.09% 13.16% Ratios and Supplemental Data Net assets, end of period (000) $10,293 $18,966 $15,960 $10,385 $10,345 Ratio of expenses to average net assets 2.37% 2.25% 2.10% 2.32% 2.38% Ratio of expenses to average net assets before reimbursement 2.37% 2.28% 2.10% 2.32% 2.38% Ratio of net investment income to average net assets (3.07)% (2.30)% (0.59)% (0.13)% 0.79% Ratio of net investment income to average net assets before reimbursement (3.07)% (2.33)% (5.90)% (1.30)% 0.79% Portfolio turnover rate 26.17% 47.83% 32.89% 27.79% 30.47% (a) See note 1 of the Notes to the Financial Statements.
See accompanying notes which are an integral part of the financial statements. Ariston Internet Convertible Fund Financial Highlights Elite Shares Year ended Period ended December 31, December 31, 2001 2000 (a) ----------------- ----------------- Selected Per Share Data Net asset value, beginning of period $ 7.71 $ 10.00 ----------------- ----------------- Income from investment operations: Net investment income (loss) (0.27) (0.13) Net realized and unrealized gain (loss) on investments (2.83) (2.16) ----------------- ----------------- ----------------- ----------------- Total from investment operations (3.10) (2.29) ----------------- ----------------- Less distributions: Distributions from net investment income 0.00 0.00 Distributions from net realized gains 0.00 0.00 ----------------- ----------------- Total distributions 0.00 0.00 ----------------- ----------------- Recapitalization resulting from reverse split (Note 2) 15.89 ----------------- ----------------- Net asset value, end of period $ 20.50 $ 7.71 ================= ================= Total Return (b) (33.53)% (22.90)% Ratios and Supplemental Data Net assets, end of period (000) $527 $666 Ratio of expenses to average net assets (see Note 3) 2.25% 2.25% (c) Ratio of net investment income to average net assets (4.55)% (2.06)(c) Portfolio turnover rate 80.71% 63.90% (a) May 1, 2000 (commencement of operations) through December 31, 2000. (b) For a period of less than a full year, the total return is not annualized. (c) Annualized
See accompanying notes which are an integral part of the financial statements. Ariston Funds Notes to Financial Statements December 31, 2001 NOTE 1. ORGANIZATION Ariston Convertible Securities Fund (the "Convertible Securities Fund") and Ariston Internet Convertible Fund (the "Internet Convertible Fund"), (collectively the "Funds"), were organized as diversified series of the AmeriPrime Funds (the "Trust") on February 24, 1999 and February 29, 2000, respectively. The Trust is established under the laws of Ohio by an Agreement and Declaration of Trust dated August 8, 1995 (the "Trust Agreement"). On April 30, 1999, the Convertible Securities Fund acquired the assets and assumed the liabilities of Lexington Convertible Securities Fund (the "Predecessor Fund") in a tax-free reorganization. The Predecessor Fund commenced operations on January 20, 1988. The Internet Convertible Fund commenced operations May 1, 2000. The Trust Agreement permits the Board of Trustees to issue an unlimited number of shares of beneficial interest of separate series without par value. The Board of Trustees has authorized that shares of the Internet Convertible Fund may be offered in two classes: Premier Shares and Elite Shares. The Board of Trustees determined to close the Premier Share class and as of December 31, 2001 there were no Premier Shares outstanding. The investment objective of each Fund is total return. The Funds' advisor is Ariston Capital Management Corporation (the "Advisor"). 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 - Common stocks, which are traded on any exchange, are valued at the last quoted sale price. Lacking a last sale price, a security is valued at the mean between the last bid and ask price except when, in the Advisor's opinion, the mean price does not accurately reflect the current value of the security. When market quotations are not readily available, when the Advisor determines the mean 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 and oversight of the Board of the Trust. All other securities generally are valued at the mean between the last bid and ask price, 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. Convertible securities are valued at the greater of the value determined as described in the preceding sentence and the value of the shares of common stock into which the securities are convertible (determined as described in the preceding paragraph). If the Advisor decides that a price provided by the pricing service does not accurately reflect the fair market value of the securities, when market quotations are not readily available, 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, in conformity with guidelines adopted by and subject to review of the Board of Trustees. Short-term investments in fixed income securities with maturities of less than 60 days when acquired, or which subsequently are within 60 days of maturity, are valued by using the amortized cost method of valuation, which the Board has determined will represent fair value. 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. Capital loss carry forwards for the Convertible Securities Fund are $2,785,035; $354,274 expiring in 2008 and $2,430,761 expiring in 2009. Capital loss carry forwards for the Internet Convertible Securities Fund are $328,021; $71,811 expiring in 2008 and $256,210 expiring in 2009. Ariston Funds Notes to Financial Statements December 31 - continued NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - continued Dividends and Distributions - Each Fund intends to distribute substantially all of its net investment income as dividends to its shareholders on a quarterly basis. Each Fund intends to distribute its net long-term capital gains and its net short-term capital gains at least once a year. On December 20, 2001 the Elite Share Class of the Internet Convertible Fund had a one for four reverse stock split. The result of this split was that shares held on record date were reduced to one quarter of the original amount and the share price of the Elite Share Class was increased by $15.89 per share. Securities Transactions & Investment Income - 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. Convertible securities that are purchased at substantial premiums may cause the aggregate amortization of premium to exceed interest income and the aggregate accretion of discount at levels that may cause the Funds to recognize negative income. Other- Generally accepted accounting principles require that permanent financial reporting tax differences relating to shareholder distributions be reclassified to paid in capital for both the Convertible Securities Fund and the Internet Convertible Fund. NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES The Funds retain Ariston Capital Management Corporation (the "Advisor") to manage each Fund's investments. The Advisor was founded in 1977. Richard B. Russell, President and controlling shareholder of the Advisor, is primarily responsible for the day-to-day management of each Fund's portfolio. Under the terms of each Fund's management agreement (the "Agreements"), the Advisor manages the Fund's investments subject to approval of the Board and pays all of the expenses of the Fund except brokerage fees and commissions, taxes, borrowing costs (such as (a) interest and (b) dividend expenses on securities sold short), 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, the Convertible Securities Fund is obligated to pay the Advisor a fee computed and accrued daily and paid monthly at an annual rate of 2.25% of the average value of daily net assets of the Fund, less 12b-1 expenses and fees and expenses of the non-interested person Trustees. The Internet Convertible Fund is obligated to pay the Advisor a fee computed and accrued daily and paid monthly at an annual rate of 2.25% of the average value of daily net assets of the Fund, less fees and expenses of the non-interested person Trustees. It should be noted that most investment companies pay their own operating expenses directly, while the Funds' expenses, except those specified above, are paid by the Advisor. For the year ended December 31, 2001, the Advisor received fees of $291,220 from the Convertible Securities Fund. For the year ended December 31, 2001, the Advisor received fees of $11,559 from the Internet Convertible Fund. Each Fund has adopted a Distribution Plan pursuant to Rule 12b-1 under the 1940 Act (each, a "Plan"). The Plan for the Convertible Securities Fund permits the Fund to pay directly, or reimburse the Advisor or Distributor, for distribution expenses in an amount not to exceed 0.25% of the average daily net assets of the Fund. Expenses of the Convertible Securities Fund were not affected by the 12b-1 Plan because the Fund's Advisor has not activated the Plan. The Plan for the Internet Convertible Securities Fund was active for the period January 1, 2001 through December 10, 2001 at a rate of 0.70% of the average value of the daily net assets of the Premier Class of Shares. For the period January 1, 2001 through December 10, 2001 12b-1 fees in the amount of $382 were accrued in the Premier Class of Shares. Upon liquidation of the Premier share class, The Board of Trustees deactivated the Plan when it determined to close the Premier Share Class. Ariston Funds Notes to Financial Statements December 31, 2001 - continued NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - continued The Funds retain Unified Fund Services, Inc. ("Unified"), a wholly owned subsidiary of Unified Financial Services, Inc., to manage the Funds' business affairs and provide the Funds with administrative, transfer agency, and fund accounting services, including all regulatory reporting and necessary office equipment and personnel. The Advisor paid all administrative, transfer agency, and fund accounting fees on behalf of the Funds per the management agreement. A Trustee and the officers of the Trust are members of management and /or employees of Unified. The Funds retained Unified Financial Securities, Inc. to act as the principal distributor of their shares. There were no payments made to the distributor during the year ended December 31, 2001. A Trustee and officer of the Trust may be deemed to be an affiliate of Unified Financial Securities, Inc. NOTE 4. INVESTMENTS Convertible Securities Fund. For the year ended December 31, 2001, purchases and sales of investment securities, other than short-term investments, aggregated $3,514,919 and $9,236,730, respectively. As of December 31, 2001, the gross unrealized appreciation for all securities totaled $3,901,064 and the gross unrealized depreciation for all securities totaled $921,164 for a net unrealized appreciation of $2,979,900. The aggregate cost of securities for federal income tax purposes at December 31, 2001 was $7,310,792. There is no difference between book basis and tax basis unrealized appreciation that would be primarily attributable to the tax deferral of losses on wash sales. Internet Convertible Fund. For the year ended December 31, 2001, purchases and sales of investment securities, other than short-term investments, aggregated $541,869 and $457,827, respectively. As of December 31, 2001, the gross unrealized appreciation for all securities totaled $37,224 and the gross unrealized depreciation for all securities totaled $108,874 for a net unrealized depreciation of $71,650. The aggregate cost of securities for federal income tax purposes at December 31, 2001 was $596,218. There is no difference between book basis and tax basis unrealized appreciation that would be primarily attributable to the tax deferral of losses on wash sales. 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 each 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 December 31, 2001, Charles Schwab & Co., Inc. held for the benefit of others, in aggregate, approximately 28% of the Convertible Securities Fund. Information Regarding Trustees and Officers The Board of Trustees supervises the business activities of the Trust. Each Trustee serves as a trustee until the termination of the Trust unless the Trustee dies, resigns, retires or is removed. The following table provides information regarding each Trustee who is not an "interested person" of the Trust, as defined in the Investment Company Act of 1940. Number of Portfolios Position(s) Held Length of in Fund Complex** Name, Age and Address with Trust Time Served Overseen by Trustee - --------------------------------------------------- ------------------- --------------------- ------------------------ Steve L. Cobb Trustee Trustee since 1995 16 2001 N. Indianwood Avenue Broken Arrow, OK 74012 Year of Birth: 1957 - ----------------------------------------------------------------------- ---------------------------------------------- Principal Occupations During Past 5 Years Other Directorships Held by Trustee - ----------------------------------------------------------------------- ---------------------------------------------- President of Chandler Engineering Company, L.L.C., oil and gas None services company since 1997; various positions with Carbo Ceramics, Inc., oil field manufacturing/supply company, from 1984 to 1997, most recently Vice President of Marketing. - -------------------------------------------------- ------------------- --------------------- ------------------------ Number of Portfolios Position(s) Held Length of in Fund Complex** Name, Age and Address with Trust Time Served Overseen by Trustee - --------------------------------------------------- ------------------- --------------------- ------------------------ Gary E. Hippenstiel Trustee Trustee since 1995 16 600 Jefferson Street Suite 350 Houston, TX 77002 Year of Birth: 1947 - --------------------------------------------------- ------------------- --------------------- ------------------------ Principal Occupations During Past 5 Years Other Directorships Held by Trustee - ----------------------------------------------------------------------- ---------------------------------------------- Director, Vice President and Chief Investment Officer of Legacy Trust None Company since 1992; President and Director of Heritage Trust Company from 1994-1996; Vice President and Manager of Investments of Kanaly Trust Company from 1988 to 1992. - ----------------------------------------------------------------------- ---------------------------------------------- The following table provides information regarding each Trustee who is an "interested person" of the Trust, as defined in the Investment Company Act of 1940, and each officer of the Trust. Number of Portfolios Position(s) In Length of in Fund Complex** Name, Age and Address Fund Complex** Time Served Overseen by Trustee - --------------------------------------------------- ------------------- --------------------- ------------------------ Kenneth D. Trumpfheller* President, Trustee and 34 1725 E. Southlake Blvd. Secretary and President since 1995 Suite 200 Trustee Secretary since 1995 Southlake, Texas 76092 Year of Birth: 1958 - ----------------------------------------------------------------------- ---------------------------------------------- Principal Occupations During Past 5 Years Other Directorships Held by Trustee - ----------------------------------------------------------------------- ---------------------------------------------- President and Managing Director of Unified Fund Services, Inc., the None Fund's transfer agent, fund accountant and administrator, since October 2000. President, Treasurer and Secretary of AmeriPrime Financial Services, Inc., a fund administrator, (which merged with Unified Fund Services, Inc.) from 1994 through October 2000. President, Treasurer and Secretary of AmeriPrime Financial Securities, Inc., the Trust's distributor through December 2000, from 1994 through December 2000. - --------------------------------------------------- ------------------- --------------------- ------------------------ Number of Portfolios Position(s) in Length of in Fund Complex** Name, Age and Address Fund Complex Time Served Overseen by Trustee - --------------------------------------------------- ------------------- --------------------- ------------------------ Robert A. Chopyak Treasurer and Treasurer and CFO N/A 1725 E. Southlake Blvd. Chief Financial since 2000 Suite 200 Officer Southlake, Texas 76092 Year of Birth: 1968 - ----------------------------------------------------------------------- ---------------------------------------------- Principal Occupations During Past 5 Years Other Directorships Held by Trustee - ----------------------------------------------------------------------- ---------------------------------------------- Assistant Vice-President of Financial Administration of Unified Fund None Services, Inc., the Fund's transfer agent, fund accountant and administrator, since August 2000. Manager of AmeriPrime Financial Services, Inc. from February 2000 to August 2000. Self-employed, performing Y2K testing, January 1999 to January 2000. Vice President of Fund Accounting, American Data Services, Inc., a mutual fund services company, October 1992 to December 1998. - ----------------------------------------------------------------------- ---------------------------------------------- * Mr. Trumpfheller in an "interested person" of the Trust because he is an officer of the Trust. In addition, he may be deemed to be and "interested person" of the Trust because he is a registered principal of the Trust's distributor. ** As of December 31, 2001, the term "Fund Complex" refers to AmeriPrime Funds and AmeriPrime Advisors Trust. The Statement of Additional Information includes additional information about the Trustees and is available without charge upon request, by calling toll free at 1-888-387-2273.
-----END PRIVACY-ENHANCED MESSAGE-----