-----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, I5usi4oj6ghztalX6d4ONb9ocwDXuvfCSlGMVju/Toe/NhMQa83/i44TrEmrx7pb BVK8DmJ3L5peklNhaAPdnw== 0001035449-02-000227.txt : 20020508 0001035449-02-000227.hdr.sgml : 20020508 ACCESSION NUMBER: 0001035449-02-000227 CONFORMED SUBMISSION TYPE: N-30D/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010430 FILED AS OF DATE: 20020508 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/A SEC ACT: 1940 Act SEC FILE NUMBER: 811-09096 FILM NUMBER: 02638708 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/A 1 ameribond0401.txt AMERIPRIME FUNDS GLOBALT GROWTH FUND Semi-Annual Report April 30, 2001 (Unaudited) Dear Fellow Shareholders: The first six months of the GLOBALT Growth Fund's current fiscal year, November 1, 2000 through April 30, 2001, encompassed one of the weakest equity markets in recent times. During this period the Fund declined 19.74%. A measure of growth styles, the Russell 1000 Growth Index declined 26.43% during this period and the S&P 500 declined 12.06%, both including income. The Fund has returned (20.05)% over the last year, 11.73% annualized for the last five years and 13.90% annualized since its inception December 1, 1995. Of course, you should be aware that these results represent past performance and are not predictive of future results. There were few safe havens in the equity markets during the first half of the fiscal year. Even successive cuts by the Federal Reserve Board couldn't keep the gloom from spreading, and every major broad stock market measure declined during the period. After several years of significant outperformance, growth oriented investment styles declined more than the general market and the GLOBALT Growth Fund tracks this style. It is likely we will see several more quarters of weak economic data, particularly in the technology sector. Despite these setbacks, the forces of ultimate economic recovery are in motion -- most notably the Federal Reserve's decided shift to monetary stimulation. However, we also realize that there are too many problems and unknowns to make recovery easy or uninterrupted. Although there is a natural tendency to correlate stock prices with the economy, in fact, stock prices typically decline faster and turn up before the economy. We characterize the stock market as being in a bottoming phase and believe that many growth stocks have reached levels that are quite attractive relative to expected growth prospects. Periods of earnings uncertainty can be harrowing for investors, but returns off the lows are often particularly strong. We are gradually positioning the portfolio to capitalize on the anticipated recovery phase and we are confident that our clients will be rewarded for having leaned temporarily against the wind. Trends have improved markedly since the S&P's low point in early April. Although not indicative of future results, the portfolio's gain from April 1, 2001 through this date (May 17th) was approximately 12%. Please contact us with any questions or comments you may have. As always, we appreciate your confidence in the GLOBALT Growth Fund. Sincerely, Gary E. Fullam Samuel E. Allen Chief Investment Officer Chief Executive Officer For a prospectus and more information, including charges and expenses, call toll free 1-877-289-4769. 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. Distributed by Unified Financial Securities, Inc.
GLOBALT Growth Fund Schedule of Investments - April 30, 2001 (Unaudited) Common Stocks - 93.9% Shares Value Abrasive Asbestos & Misc Nonmetallic Mineral Products - 1.1% Minnesota Mining & Manufacturing Co. 1,700 $ 202,317 ------------------ Accident & Health Insurance - 1.8% AFLAC, Inc. 9,900 314,820 ------------------ Aircraft Engines & Engine Parts - 1.5% United Technologies Corp. 3,400 265,472 ------------------ Beverages - 1.7% Coca-Cola Co. 6,500 300,235 ------------------ Biological Products (No Diagnostic Substances) - 1.6% Biogen, Inc. (a) 4,300 278,038 ------------------ Chemicals & Allied Products - 1.0% Pharmacia Corp. 3,500 182,910 ------------------ Cogeneration Services & Small Power Producers - 1.3% AES Corp. (a) 5,000 238,350 ------------------ Computer & Office Equipment - 2.0% International Business Machines Corp. 1,900 218,766 Lexmark International Group, Inc. (a) 2,100 129,003 ------------------ 347,769 ------------------ Computer Communications Equipment - 1.6% Cisco Systems, Inc. (a) 11,300 191,874 Juniper Networks, Inc. (a) 1,500 88,545 ------------------ 280,419 ------------------ Computer Peripheral Equipment - 0.7% RSA Security, Inc. (a) 4,050 129,600 ------------------ Computer Storage Devices - 0.6% EMC Corp. (a) 2,700 106,920 ------------------ Converted Paper & Paperboard Products (No Containers/Boxes) - 0.5% Avery Dennison Corp. 1,500 84,105 ------------------ Cutlery, Handtools & General Hardware - 0.7% Danaher Corp. 2,300 128,823 ------------------ Drilling Oil & Gas Wells - 1.4% Transocean Sedco Forex, Inc. 4,500 244,260 ------------------ GLOBALT Growth Fund Schedule of Investments - April 30, 2001 (Unaudited) Common Stocks - continued Shares Value Electrical Industrial Apparatus - 0.3% American Power Conversion Corp. (a) 4,200 $ 59,430 ------------------ Electromedical & Electrotherapeutic Apparatus - 1.7% Medtronic, Inc. 2,000 89,200 St. Jude Medical, Inc. (a) 3,700 211,825 ------------------ 301,025 ------------------ Electronic & Other Electrical Equipment (No Computer Equip) - 4.0% General Electric Co. 14,400 695,088 ------------------ Electronic Components - 0.7% Power-One, Inc. (a) 6,900 120,819 ------------------ Electronic Components & Accessories - 1.1% AVX Corp. 3,000 55,620 SCI Systems, Inc. (a) 5,300 135,415 ------------------ 191,035 ------------------ Electronic Computers - 0.9% Dell Computer Corp. (a) 2,700 71,010 Sun Microsystems, Inc. (a) 5,400 92,448 ------------------ 163,458 ------------------ Electronic Connectors - 0.4% Molex, Inc. 1,800 72,702 ------------------ Finance Services - 3.4% American Express Co. 9,500 403,180 Morgan Stanley Dean Witter & Co. 3,200 200,928 ------------------ 604,108 ------------------ Fire, Marine & Casualty Insurance - 2.2% American International Group, Inc. 4,700 384,460 ------------------ Food & Kindred Products - 0.6% Campbell Soup Co. 3,500 106,540 ------------------ General Industrial Machinery & Equipment - 1.9% Tyco International Ltd. 6,400 341,568 ------------------ Investment Advice - 0.5% Franklin Resources, Inc. 2,200 96,030 ------------------ GLOBALT Growth Fund Schedule of Investments - April 30, 2001 (Unaudited) Common Stocks - continued Shares Value Laboratory Analytical Instruments - 1.2% Applera Corp. - (Applied Biosystems Group) 2,000 $ 61,875 Applera Corp - (Celera Genomics Group) (a) 1,500 64,120 Millipore Corp. 1,600 91,760 ------------------ 217,755 ------------------ Metalworking Machinery & Equipment - 1.0% Black & Decker Corp. 4,500 179,370 ------------------ Motor Vehicle Parts & Accessories - 1.6% Honeywell International, Inc. 6,000 293,280 ------------------ Motors & Generators - 0.5% Capstone Turbine Corp. (a) 2,800 82,040 ------------------ National Commercial Banks - 4.3% Bank of America Corp. 4,600 257,600 Citigroup, Inc. 10,433 512,782 ------------------ 770,382 ------------------ Natural Gas Transmission - 0.8% Williams Companies, Inc. 3,200 134,944 ------------------ Oil & Gas Field Machinery & Equipment - 1.5% Baker Hughes, Inc. 6,700 263,243 ------------------ Optical Instruments & Lenses - 0.5% KLA-Tencor Corp. (a) 1,700 93,432 ------------------ Orthopedic, Prosthetic & Surgical Appliances & Supplies - 0.7% Minimed, Inc. (a) 2,900 115,826 ------------------ Paper Mills - 1.3% Kimberly Clark Corp. 3,900 231,660 ------------------ Perfumes, Cosmetics & Other Toilet Preparations - 3.2% Avon Products 1,700 71,944 Colgate Palmolive Co. 5,200 290,420 Estee Lauder Companies, Inc. Class A 5,100 202,725 ------------------ 565,089 ------------------ Petroleum Refining - 2.2% Chevron Oil 2,700 260,712 Exxon Mobil Corp. 1,500 132,900 ------------------ 393,612 ------------------ GLOBALT Growth Fund Schedule of Investments - April 30, 2001 (Unaudited) Common Stocks - continued Shares Value Pharmaceutical Preparations - 5.3% American Home Products Corp. 2,100 $ 121,275 Bristol-Myers Squib Co. 3,500 196,000 Johnson & Johnson 3,712 358,134 King Pharmaceuticals, Inc. (a) 1,900 80,047 Merck & Co. 600 45,582 Pfizer, Inc. 3,350 145,055 ------------------ 946,093 ------------------ Public Building And Related Furniture 0.6% Lear Corp. (a) 2,800 100,800 ------------------ Radio & TV Broadcasting & Communications Equipment - 0.4% Scientific-Atlanta, Inc. 1,300 75,049 ------------------ Retail-Grocery Stores - 0.9% Safeway, Inc. (a) 3,000 162,900 ------------------ Retail-Jewelry Stores - 1.2% Tiffany & Co. 6,500 210,730 ------------------ Retail-Variety Stores - 3.4% Costco Wholesale Corp. (a) 6,700 234,031 Wal-Mart Stores, Inc. 7,300 377,702 ------------------ 611,733 ------------------ Security Brokers, Dealers & Flotation Companies - 0.9% Merrill Lynch & Co. 2,700 166,590 ------------------ Semiconductors & Related Devices - 4.0% Analog Devices, Inc. (a) 1,300 61,503 Intel Corp. 10,100 312,191 International Rectifier Corp. (a) 3,700 205,350 LSI Logic Corp. (a) 3,000 61,410 Xilinx, Inc. (a) 1,600 75,952 ------------------ 716,406 ------------------ Services-Advertising Agencies - 0.5% Omnicom Group, Inc. 1,000 87,850 ------------------ Services-Computer Integrated Systems Design - 0.3% Yahoo!, Inc. (a) 3,000 60,540 ------------------ Services-Computer Programming, Data Processing, Etc. - 0.7% AOL Time Warner, Inc. (a) 2,500 126,250 ------------------ GLOBALT Growth Fund Schedule of Investments - April 30, 2001 (Unaudited) Common Stocks - continued Shares Value Services-Consumer Credit Reporting, Collection Agencies - 0.8% Equifax, Inc. 4,600 $ 152,122 ------------------ Services-Engineering, Accounting, Research, Management - 1.9% Fluor Corp. (a) 6,500 342,615 ------------------ Services-Help Supply Services - 1.3% Manpower, Inc. 7,000 226,450 ------------------ Services-Personal Services - 0.6% Cendant Corp. (a) 6,500 115,310 ------------------ Services-Prepackaged Software - 11.7% BMC Software, Inc. (a) 5,200 125,788 Cadence Design System, Inc. (a) 3,000 62,100 Citrix Systems, Inc. (a) 4,800 136,320 Computer Associates International, Inc. 5,400 173,826 Compuware Corp. (a) 21,700 223,076 Mercury Interactive Corp. (a) 1,100 72,765 Micromuse, Inc. (a) 3,100 153,450 Microsoft Corp. (a) 9,700 657,175 Openwave System, Inc. (a) 2,400 83,064 Oracle Corp. (a) 8,800 142,208 Peoplesoft, Inc. (a) 2,000 74,080 Synopsys, Inc. (a) 2,300 132,089 Veritas Software Co. (a) 900 53,649 ------------------ 2,089,590 ------------------ Special Industry Machinery - 0.4% Applied Materials, Inc. (a) 1,400 76,440 ------------------ State Commercial Banks - 0.6% Bank of New York Company, Inc. 2,300 115,460 ------------------ Telephone Communications (No Radio Telephone) - 3.0% Level 3 Communications, Inc. (a) 5,100 72,573 Verizon Communications, Inc. 4,300 236,801 Williams Communications Group, Inc. (a) 2,632 11,895 Worldcom, Inc. (a) 11,700 213,525 ------------------ 534,794 ------------------ GLOBALT Growth Fund Schedule of Investments - April 30, 2001 (Unaudited) Common Stocks - continued Shares Value Wholesale-Petroleum & Petroleum Products (No Bulk Stations) - 1.4% Enron Corp. 3,900 244,608 ------------------ TOTAL COMMON STOCKS (Cost $16,386,181) $ 16,743,264 ------------------ Principal Amount Value Money Market Securities 6.1% Firstar Treasury Fund, 4.05% (b) (Cost $1,084,220) 1,084,220 $ 1,084,220 ------------------ TOTAL INVESTMENTS - (Cost $17,470,401) - 100.1% 17,827,484 ------------------ Liabilities in excess of other assets - (0.1)% (12,350) ------------------ Total Net Assets - 100.0% $ 17,815,134 ================== ================== (a) Non-income producing (b) Variable rate security; the coupon rate shown represents the rate at April 30, 2001. See Accompanying notes which are an integral part of the financial statement.
GLOBALT Growth Fund April 30, 2001 Statement of Assets and Liabilities (Unaudited) Assets Investment in securities, at value (cost $17,470,401) $ 17,827,484 Cash 837 Dividends receivable 3,299 Interest receivable 1,618 Receivable for fund shares sold 167 ----------------- Total assets 17,833,405 ----------------- Liabilities Accrued investment advisory fee $ 18,271 ----------------- Total liabilities 18,271 ----------------- Net Assets $ 17,815,134 ================= Net Assets consist of: Paid-in capital 18,411,292 Accumulated undistributed net investment loss (23,347) Accumulated undistributed net realized loss on investments (929,894) Net unrealized appreciation on investments 357,083 ----------------- Net Assets, for 1,224,036 shares $ 17,815,134 ================= Net Asset Value Net Assets Offering price and redemption price per share ($17,815,134 / 1,224,036) $ 14.55 ================= See Accompanying notes which are an integral part of the financial statement.
GLOBALT Growth Fund Statement of Operations for the six months ended April 30, 2001 (Unaudited) Investment Income Dividend income $ 59,565 Interest income 26,027 Miscellanous income 78 ---------------- Total Income 85,670 ---------------- Expenses Investment advisory fee $ 106,131 Trustees' fees 542 Total expenses before reimbursement 106,673 ---------------- Reimbursed expenses (542) Total operating expenses 106,131 ---------------- Net Investment Loss (20,461) ---------------- Realized & Unrealized Gain (Loss) Net realized loss on investment securities (966,192) Change in net unrealized depreciation on investment securities (3,233,015) ---------------- Net realized & unrealized loss on investment securities (4,199,207) ---------------- Net increase in net assets resulting from operations $ (4,219,668) ================ See Accompanying notes which are an integral part of the financial statement.
Statement of Changes in Net Assets Six months Year ended ended April 30, 2001 October 31, (Unaudited) 2000 ----------------- ---------------- Increase/(Decrease) in Net Assets Operations Net investment loss $ (20,461) $ (91,031) Net realized gain (loss) on investment securities (966,192) 2,192,866 Change in net unrealized appreciation (depreciation) (3,233,015) (228,467) ----------------- ---------------- Net increase (decrease) in net assets resulting from operations (4,219,668) 1,873,368 ----------------- ---------------- Distributions to shareholders From net investment income 0 0 From net realized loss (2,156,584) (843,736) ----------------- ---------------- ----------------- ---------------- Total distributions (2,156,584) (843,736) ----------------- ---------------- Share Transactions Net proceeds from sale of shares 1,973,582 3,981,216 Shares issued in reinvestment of distributions 2,156,480 736,101 Shares redeemed (1,048,419) (1,571,246) ----------------- ---------------- Net increase (decrease) in net assets resulting from share transactions 3,081,643 3,146,071 ----------------- ---------------- Total increase in net assets (3,294,609) 4,175,703 Net Assets Beginning of period 21,109,743 16,934,040 ----------------- ---------------- End of period [including accumulated net investment loss of $23,347 and $2,886, respectively] $ 17,815,134 $ 21,109,743 ================= ================ Capital Share Transactions Shares sold 131,348 191,757 Shares issued in reinvestment of distributions 143,670 34,221 Shares repurchased (70,007) (73,904) ----------------- ---------------- Net increase from capital transactions 205,011 152,074 ================= ================ See Accompanying notes which are an integral part of the financial statement.
GLOBALT Growth Fund Financial Highlights Six months ended Period April 30, ended 2001 Years ended October 31, October 31, ------------ ------------------------------------------------ ---------- ------------ ------------------------------------------------ ---------- (Unaudited) 2000 1999 1998 1997 1996 (a) ------------ ---------- ----------- ---------- ----------- ---------- ------------ ---------- ----------- ---------- ----------- ---------- Selected Per Share Data Net asset value, beginning of period $ 20.72 $ 19.53 $ 16.14 $ 15.66 $ 12.48 $ 10.00 ------------ ---------- ----------- ---------- ----------- ---------- ------------ ---------- ----------- ---------- ----------- ---------- Income from investment operations: Net investment income (loss) (0.02) (0.09) (0.05) 0.02 0.01 0.01 Net realized and unrealized gain (loss) (4.00) 2.23 4.27 1.86 3.34 2.47 ------------ ---------- ----------- ---------- ----------- ---------- ------------ ---------- ----------- ---------- ----------- ---------- Total from investment operations (4.02) 2.14 4.22 1.88 3.35 2.48 ------------ ---------- ----------- ---------- ----------- ---------- ------------ ---------- ----------- ---------- ----------- ---------- Less distributions From net investment income 0.00 0.00 (0.02) (0.01) 0.00 0.00 From net realized gain (2.15) (0.95) (0.81) (1.39) (0.17) 0.00 ------------ ---------- ----------- ---------- ----------- ---------- ------------ ---------- ----------- ---------- ----------- ---------- Total Distributions (2.15) (0.95) (0.83) (1.40) (0.17) 0.00 ------------ ---------- ----------- ---------- ----------- ---------- ------------ ---------- ----------- ---------- ----------- ---------- Net asset value, end of period $ 14.55 $ 20.72 $ 19.53 $ 16.14 $ 15.66 $ 12.48 ============ ========== =========== ========== =========== ========== ============ ========== =========== ========== =========== ========== Total Return (19.74)% 10.78% 26.67% 13.28% 27.15% 24.80% (b) Ratios and Supplemental Data Net assets, end of period (000) $17,815 $21,110 $16,934 $11,709 $8,003 $3,443 Ratio of expenses to average net assets 1.17%(c) 1.18% 1.17% 1.17% 1.17% 1.16% (c) Ratio of expenses to average net assets before reimbursement 1.18%(c) 1.18% 1.18% 1.19% 1.19% 1.25% (c) Ratio of net investment income (loss) to average net assets (0.23)%(c) (0.45)% (0.27)% 0.14% 0.06% 0.11% (c) Ratio of net investment income (loss) to average net assets before reimbursement (0.23)%(c) (0.45)% (0.28)% 0.12% 0.04% 0.02% (c) Portfolio turnover rate 120.27% 159.09% 120.46% 83.78% 110.01% 66.42% (c) (a) December 1, 1995 (commencement of operations) to October 31, 1996 (b) For period of less than a full year, total return is not annualized. (c) Annualized. See Accompanying notes which are an integral part of the financial statement.
GLOBALT Growth Fund Notes to Financial Statements April 30, 2001 (Unaudited)` NOTE 1. ORGANIZATION GLOBALT Growth Fund (the "Fund") was organized as a series of the AmeriPrime Funds, an Ohio business trust (the "Trust) on October 20, 1995 and commenced operations on December 1, 1995. 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 of capital. The Declaration of 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 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 Adviser (as such term is defined in note 3 of this document), the last bid price does not accurately reflect the current value of the security. All other securities for which over-the-counter market quotations are readily available are valued at their last bid price. When market quotations are not readily available, when the Adviser determines the last bid price does not accurately reflect the current value or when restricted securities are being valued, such securities are valued as determined in good faith by the Adviser, in conformity with guidelines adopted by and subject to review of the Board. Fixed-income securities generally are valued by using market quotations, but may be valued on the basis of prices furnished by a pricing service when the Adviser believes such prices accurately reflect the fair market value of such securities. A pricing service utilizes electronic data processing techniques based on yield spreads relating to securities with similar characteristics to determine prices for normal institutional-size trading units of debt securities without regard to sale or bid prices. If the Adviser decides that a price provided by the pricing service does not accurately reflect the fair market value of the securities, when prices are not readily available from a pricing service or when restricted or illiquid securities are being valued, securities are valued at fair value as determined in good faith by the Adviser, in conformity with guidelines adopted by and subject to review of the Board. 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 at least an annual basis. The Fund intends to distribute its net long-term capital gains and its net short-term capital gains at least once a year. Other- The Fund follows industry practice and records security transactions on the trade date. The specific identification method is used for determining gains or losses for financial statements and income tax purposes. Dividend income is recorded on the ex-dividend date and interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the life of the respective securities. Generally accepted accounting principles require that permanent financial reporting tax differences relating to shareholder distributions be reclassified to paid-in capital. GLOBALT Growth Fund Notes to Financial Statements April 30, 2001 - continued (Unaudited) NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES The Fund retains GLOBALT, Inc. (the "Adviser") to manage the Fund's investments. The Adviser was organized as a Georgia corporation in 1990. Samuel Allen, Chairman of the Adviser, is the controlling shareholder of GLOBALT, Inc. The investment decisions for the Fund are made by a committee of the Adviser, 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 Adviser 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, Rule 12b-1 expenses and extraordinary expenses. As compensation for its management services and agreement to pay the Fund's expenses, the Fund is obligated to pay the Adviser a fee of 1.17% 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 six months ended April 30, 2001, the Adviser earned a fee of $106,131 from the Fund. The Adviser has voluntarily agreed to reimburse fees and other expenses of the non-interested Trustees to the extent necessary to maintain total operating expenses at the rate of 1.17%. For the six months ended April 30, 2001, the Adviser reimbursed expenses of $542. There is no assurance that such reimbursement will continue in the future. 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 Adviser 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. Prior to December 31, 2000, the Fund retained AmeriPrime Financial Securities, Inc. to act as the principal distributor of its shares. Effective December 31, 2000, AmeriPrime Financial Securities, Inc. sold substantially all of its assets to Unified Financial Securities, Inc. Both companies are wholly owned subsidiaries of Unified Financial Services, Inc. Effective December 31, 2000, the Fund retained Unified Financial Securities, Inc. to act as the principal distributor of its shares. There were no payments made to either distributor during the six months ended April 30, 2001. A Trustee and officer of the Trust may be deemed to be an affiliate of AmeriPrime Financial Securities Inc. and Unified Financial Securities, Inc. NOTE 4. INVESTMENTS For the six months period ended April 30, 2001, purchases and sales of investment securities, other than short-term investments, aggregated $22,379,508 and $21,009,187, respectively. The gross unrealized appreciation for all securities totaled $1,336,499 and the gross unrealized depreciation for all securities totaled $979,416 for a net unrealized appreciation of $357,083. The aggregate cost of securities for federal income tax purposes at April 31, 2001 was $17,470,401. 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. Carl Domino Equity Income Fund Semi-Annual Report April 30, 2001 (Unaudited) Carl Domino Equity Income Fund Schedule of Investments Common Stocks - 83.6% Shares Value Abrasive, Asbestos & Miscellaneous Non-Metallic Mineral Products - 1.9% Minnesota Mining & Manufacturing Co. 600 $ 71,406 --------- Aircraft - 1.3% UAL Corp. 1,400 49,728 --------- Calculating & Accounting Equipment - 0.4% Hypercom Corp. 4,000 15,800 --------- Canned Frozen & Preserved Fruit, Vegetables & Food Specialties - 0.5% Heinz (H.J.) Co. 500 19,575 --------- Computer & Office Equipment - 1.5% Hewlett-Packard Co. 2,000 56,860 --------- Construction Machinery & Equipment - 2.4% Caterpillar, Inc. 1,800 90,360 --------- Crude Petroleum & Natural Gas - 2.0% Unocal Corp. 2,000 76,320 --------- Farm Machinery & Equipment 2.0% Deere & Co. 1,800 73,926 --------- Fire, Marine & Casualty Insurance - 5.7% ACE Ltd. 1,800 64,260 Allstate Corporation 1,700 70,975 Safeco Corp. (a) 3,000 80,100 --------- 215,335 --------- General Industrial Machinery & Equipment - 2.1% Pall Corp. 3,300 77,451 --------- Grain Mill Products - 2.1% General Mills Inc. 2,000 78,820 --------- Guided Missiles & Space Vehicles & Parts - 2.0% Goodrich (B.F.) Co. 1,900 74,860 --------- Heating Equipment Except Electric & Warm Air, & Plumbing Fixtures - 1.5% Masco Corp. 2,388 54,924 --------- Hotels, Rooming House, Camps & Other Lodging Places - 0.7% Wyndham International, Inc. - Class A 13,500 26,460 --------- Carl Domino Equity Income Fund Schedule of Investments - April 30, 2001 (Unaudited) Common Stocks - continued Shares Value Industrial Instruments for Measurement, Display & Control - 2.1% Emerson Electric Co. 1,200 $ 79,980 --------- Industrial Organic Chemicals - 2.4% International Flavors & Fragrances, Inc. 3,600 88,992 --------- Instruments for Measuring & Testing of Electricity & Electric Signals - 2.2% Snap-On, Inc. 2,900 84,100 --------- Life Insurance - 1.2% Lincoln National Corp. 1,000 46,160 --------- Miscellaneous Electrical Machinery, Equipment & Supplies - 0.3% Ultralife Batteries, Inc. (a) 1,500 10,500 --------- Motor Vehicles & Passenger Car Bodies - 2.3% Ford Motor Co. 2,993 88,234 --------- Motorcycles, Bicycles & Parts - 0.1% American Quantum Cycles, Inc. (a) 15,000 300 --------- National Commercial Banks - 5.8% First Union Corp. 2,300 68,931 J.P. Morgan Chase & Co. 1,300 62,374 SouthTrust Corp. 1,850 87,968 --------- 219,273 --------- Natural Gas Transmission - 2.2% Williams Companies, Inc. 2,000 84,340 --------- Office Machines - 1.8% Pitney Bowes, Inc. 1,813 69,021 --------- Paper Mills - 1.6% Kimberly-Clark Corp. 1,000 59,400 --------- Paperboard Mills - 1.9% Mead Corp. 2,600 73,320 --------- Perfumes, Cosmetics & Other Toilet Preparations - 1.5% Avon Products, Inc. 1,340 56,709 --------- Petroleum Refining - 6.4% Conoco, Inc. - Class B 2,700 82,134 Sunoco, Inc. 2,200 83,644 USX-Marathon Group, Inc. 2,400 76,704 --------- 242,482 --------- Carl Domino Equity Income Fund Schedule of Investments - April 30, 2001 (Unaudited) Common Stocks - continued Shares Value Pharmaceutical Preparations - 2.1% American Home Products Corp. 1,400 $ 80,850 --------- Plastic Mail, Synthetic Resin/Rubber Cellulos (No Glass) - 2.1% DuPont (E.I.) de NeMours & Co. 1,759 79,489 --------- Plastic Products - 2.4% Tupperware Corp. 4,100 90,282 --------- Retail - Family Clothing Stores - 1.9% Nordstrom Inc. 4,000 73,560 --------- Savings Institutions, Federally Chartered - 2.3% Community Savings Bankshares, Inc. (a) 6,011 85,897 --------- Services - Business Services -0.6% Korea Thrunet Co., Ltd. - Class A (a) 6,700 23,450 --------- Services - Computer Programming, Data Processing - 0.1% Rare Medium Group, Inc. (a) 4,000 4,720 --------- Services - Personal - 2.2% Block (H&R), Inc. 1,500 82,500 --------- Specialty Cleaning, Polishing & Sanitation Preparations - 1.7% The Clorox Company 2,000 63,660 --------- Sporting & Athletic Goods - 2.2% Calloway Golf Co. 3,400 82,484 --------- Surgical & Medical Instruments & Apparatus - 1.9% Baxter International, Inc. 800 72,920 --------- Telephone Communications (No Radio Telephone) - 0.2% Williams Communications Group, Inc. (a) 1,645 7,434 --------- Water Transportation - 6.0% Knightsbridge Tankers Ltd. (a) 3,100 77,810 Statia Terminals Group NV 11,000 150,150 --------- 227,960 --------- TOTAL COMMON STOCKS (Cost $3,550,453) 3,159,842 --------- Preferred Stock - 2.3% Accident & Health Insurance Conseco Financial Preferred Series F, 7% (Cost $100,000) 4,507 85,768 --------- Warrants - 0.0% Operative Builders New China Homes Ltd. Warrants (Cost $312) Expire 03/09/05 2,500 600 --------- TOTAL INVESTMENTS - 85.9% (Cost $3,778,470) 3,246,210 --------- Other assets less liabilities - 14.1% 531,605 --------- TOTAL NET ASSETS - 100.0% $ 3,777,815 ========= (a) Non-income producing Carl Domino Equity Income Fund April 30, 2001 Statement of Assets & Liabilities (Unaudited) Assets Investment in securities, at value (cost $3,401,764) $ 3,246,210 Cash 527,291 Dividends receivable 13,907 Receivable for fund shares sold 780 Receivable for securities sold 36,888 ------------ Total assets 3,825,076 ------------ Liabilities Payable for fund shares redeemed 43,664 Accrued investment advisory fee payable 3,597 ------------ Total liabilities 47,261 ------------ Net Assets $ 3,777,815 ============ Net Assets consist of: Paid in capital 3,964,107 Accumulated undistributed net investment loss (20,837) Accumulated undistributed net realized loss on investments (9,901) Net unrealized depreciation on investments (155,554) ------------ Net Assets, for 279,231 shares $ 3,777,815 ============ Net Asset Value Net Assets Offering price and redemption price per share ($3,777,815/279,231) $ 13.53 ============ Carl Domino Equity Income Fund Statement of Operations for the six months ended April 30, 2001 (Unaudited) Investment Income Dividend income $ 58,721 Interest income 1,098 ------------- Total Income 59,819 ------------- Expenses Investment advisory fee 26,674 Trustees' fees 375 ------------- Total expenses before reimbursement 27,049 Reimbursed expenses (375) ------------- Total operating expenses 26,674 ------------- Net Investment Income 33,145 ------------- Realized & Unrealized Gain (Loss) Net realized gain (loss) on investment securities (19,639) Change in net unrealized appreciation (depreciation) on investment securities 395,674 ------------- Net realized and unrealized gain (loss) on investment securities 376,035 ------------- Net (increase) decrease in net assets resulting from operations $ 409,180 ============= Carl Domino Equity Income Fund Statement of Changes in Net Assets For the six Year months ended Ended April 30, 2001 October 31, (Unaudited) 2000 ------------ ------------ Increase (Decrease) in Net Assets Operations Net investment income $ 33,145 $ 95,169 Net realized gain (loss) on investment securities (19,639) 412,205 Change in net unrealized appreciation (depreciation) 395,674 (682,002) ------------ ------------ Net increase (decrease) in net assets resulting from operations 409,180 (174,628) ------------ ------------ Distributions to shareholders From net investment income (85,952) (112,488) From net realized gain (403,435) (693,933) ------------ ------------ Total distributions (489,387) (806,421) ------------ ------------ Capital Share Transactions Proceeds from shares sold 109,430 1,167,265 Reinvestment of distributions 478,692 795,280 Amount paid for shares repurchased (450,528) (4,940,290) ------------ ------------ Net increase (decrease) in net assets resulting from share transactions 137,594 (2,977,745) ------------ ------------ Total increase (decrease) in net assets 57,387 (3,958,794) Net Assets Beginning of period $ 3,720,428 7,679,222 ------------ ------------ End of period $ 3,777,815 $ 3,720,428 ============ ============ Capital Share Transactions Shares sold 8,378 79,589 Shares issued in reinvestment of distributions 38,686 58,265 Shares repurchased (33,046) (349,001) ------------ ------------ Net increase from capital transactions 14,018 (211,147) ============ ============
Carl Domino Equity Income Fund Financial Highlights Period Six months ended ended April 30, Years ended October 31, October 31, 2000 --------------------------------------------------- (Unaudited) 2000 1999 1998 1997 1996 (a) -------- ---------- ---------- ---------- --------- --------- Selected Per Share Data Net asset value, beginning of period $ 14.03 $ 16.12 $ 14.68 $ 16.15 $ 12.03 $ 10.00 -------- ---------- ---------- ---------- --------- -------- Income from investment operations: Net investment income 0.12 0.22 0.23 0.21 0.19 0.16 Net realized and unrealized gain (loss) 1.35 (0.58) 1.38 (0.60) 4.15 1.87 -------- ---------- ---------- ---------- --------- --------- Total from investment operations 1.47 (0.36) 1.61 (0.39) 4.34 2.03 -------- ---------- ---------- ---------- --------- -------- Less distributions: From net investment income (0.31) (0.24) (0.17) (0.14) (0.22) 0.00 From net realized gain (1.66) (1.49) 0.00 (0.94) 0.00 0.00 -------- ---------- ---------- ---------- --------- --------- Total distributions (1.97) (1.73) (0.17) (1.08) (0.22) 0.00 -------- ---------- ---------- ---------- --------- --------- Net asset value, end of period $ 13.53 $ 14.03 $ 16.12 $ 14.68 $ 16.15 $ 12.03 ======== ========== ========== ========== ========= ========= Total Return 10.75% (b) (1.84)% 11.52% (3.17)% 36.58% 20.30% (b) Ratios and Supplemental Data Net assets, end of period (000) $3,778 $3,720 $7,679 $7,338 $3,750 $1,122 Ratio of expenses to average net assets 1.50%(c) 1.50% 1.50% 1.50% 1.50% 1.51% (c) Ratio of expenses to average net assets before reimbursement 1.52%(c) 1.55% 1.52% 1.53% 1.55% 1.73% (c) Ratio of net investment income to average net assets 1.86%(c) 1.57% 1.43% 1.37% 1.28% 1.57% (c) Ratio of net investment income to average net assets before reimbusement 1.84%(c) 1.52% 1.41% 1.33% 1.22% 1.35% (c) Portfolio turnover rate 21.70% 26.10% 69.92% 75.95% 52.49% 62.51% (c) (a) December 1, 1995 (commencement of operations) to October 31, 1996 (b) For periods of less than a full year, the total return is not annualized. (c) Annualized
Carl Domino Equity Income Fund Notes to Financial Statements April 30, 2001 (Unaudited) NOTE 1. ORGANIZATION Carl Domino Equity Income Fund (the "Fund") was organized as a series of AmeriPrime Funds (the "Trust") on August 8, 1995 and commenced operations on December 1, 1995. 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 of capital together with current income. 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 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 adviser'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 Fund's adviser determines the last bid price does not accurately reflect the current value or when restricted securities are being valued, such securities are valued as determined in good faith by the Fund's adviser, in conformity with guidelines adopted by and subject to review of the Board. Fixed income securities generally are valued by using market quotations, but may be valued on the basis of prices furnished by a pricing service when the adviser believes such prices accurately reflect the fair market value of such securities. A pricing service utilizes electronic data processing techniques based on yield spreads relating to securities with similar characteristics to determine prices for normal institutional-size trading units of debt securities without regard to sale or bid prices. If the adviser decides that a price provided by the pricing service does not accurately reflect the fair market value of the securities, when prices are not readily available from a pricing service or when restricted or illiquid securities are being valued, securities are valued at fair value as determined in good faith by the adviser, in conformity with guidelines adopted by and subject to review of the Board. 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. Carl Domino Equity Income Fund Notes to Financial Statements April 30, 2001 (Unaudited) - continued NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES The Fund has retained Northern Trust Value Investors (the "Adviser"); a division of Northern Trust Investments, Inc., to manage the Fund's investments. Carl Domino is the portfolio manager 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 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, Rule 12b-1 expenses and extraordinary expenses or non-recurring expenses that may arise. As compensation for its management services and agreement to pay the Fund's expenses, the Fund is obligated to pay the Adviser a fee of 1.50% 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 six months ended, April 30, 2001, the Adviser received a fee of $8,470 from the Fund. The Adviser has contractually agreed to reimburse the Fund for the fees and expenses of the non-interested person trustees incurred by the Fund through February 28, 2002, but only to the extent necessary to maintain the Fund's total annual operating expenses at the rate of 1.50% of average daily net assets. For the six months ended April 30, 2001, the Adviser reimbursed expenses of $375. The Fund has retained Unified Fund Services, Inc. ("Unified"), a wholly owned subsidiary of Unified Financial Services, Inc., 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 Adviser 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. Prior to December 31, 2000, the Fund had retained AmeriPrime Financial Securities, Inc. to act as the principal distributor of its shares. Effective December 31, 2000, AmeriPrime Financial Securities, Inc. sold substantially all of its assets to Unified Financial Securities, Inc. Both companies are wholly owned subsidiaries of Unified Financial Services, Inc. Effective December 31, 2000, the Fund retained Unified Financial Securities, Inc. to act as the principal distributor of its shares. There were no payments made to either distributor during the six months ended April 30, 2001. A Trustee and officer of the Trust may be deemed to be an affiliate of AmeriPrime Financial Securities Inc. and Unified Financial Securities, Inc. Carl Domino Equity Income Fund Notes to Financial Statements April 30, 2001 (Unaudited) - continued NOTE 4. INVESTMENTS For the six months ended April 30, 2001, purchases and sales of investment securities, other than short-term investments, aggregated $655,225 and $884,587, respectively. As of April 30, 2001, the gross unrealized appreciation for all securities totaled $467,911 the gross unrealized depreciation for all securities totaled $423,464 for a net unrealized depreciation of $155,554. The aggregate cost of securities for federal income tax purposes at April 30, 2001 was $3,401,764. 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 Adviser 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 April 30, 2001, Carl J. Domino beneficially owned or controlled, in aggregate, more than 35% of the Fund. Fountainhead Special Value Fund Semi-Annual Report April 30, 2001 (Unaudited) Dear Shareholder, April 30, 2001 marked the first six months of Fountainhead Special Value Fund's (KINGX) fifth fiscal year. The overall environment for the Fund again proved to be difficult as the volatile times experienced in calendar year 2000 crept into 2001 despite a headfake rally in January of this year. However, thanks to skillful stock picking and a tilt towards value,1 the Fund was able to generate a total return of -8.4% over the November 1, 2000 to April 30, 2001 period, outperforming the S&P 500 Index which returned -12.0% for the six-months ended 4/30/01 and slightly underperforming both the Russell Midcap and the Russell 2000, which returned -4.9% and -1.8%, respectively, for the same period. Since inception, the Fund has continued to handily outperform its benchmarks, turning in an average annual total return of 25.3% versus 13.9% for the Russell Midcap, 8.5% for the Russell 2000, and 15.7% for the S&P 500. Total Returns for the Period Ended April 30, 2001 - --------------------------------------------------------------------------------------------- Average Annual Total Return Six- One- Since Inception Fund/Index Months Year December 31, 1996 - --------------------------------------------------------------------------------------------- Fountainhead Special Value Fund -8.4% -3.5% 25.3% - --------------------------------------------------------------------------------------------- S&P 500 Index -12.0% -12.9% 15.7% Russell 2000 Index -1.8% -2.9% 8.5% Russell Midcap Index -4.9% 3.1% 13.9% - ---------------------------------------------------------------------------------------------
Date Fountainhead Russell 2000 Russell1 Midcap Special Value Index- $14,145 Index - $17,662 Fund - $26,549 12/96 $10,000 $10,000 $10,000 1/97 $10,420 $10,200 $10,374 2/97 $10,830 $9,952 $10,358 3/97 $10,140 $9,482 $9,918 4/97 $9,860 $9,509 $10,165 5/97 $10,869 $10,567 $10,907 6/97 $11,560 $11,021 $11,264 7/97 $11,990 $11,533 $12,203 8/97 $11,860 $11,797 $12,270 9/97 $12,950 $12,661 $12,759 10/97 $13,370 $12,105 $12,263 11/97 $13,070 $12,026 $12,555 12/97 $13,665 $12,237 $12,902 1/98 $13,433 $12,043 $12,659 2/98 $14,757 $12,933 $13,649 3/98 $15,910 $13,466 $14,296 4/98 $16,476 $13,540 $14,332 5/98 $15,758 $12,810 $13,887 6/98 $16,232 $12,837 $14,080 7/98 $15,424 $11,798 $13,409 8/98 $11,976 $9,506 $11,263 9/98 $12,229 $10,251 $11,992 10/98 $12,481 $10,669 $12,810 11/98 $11,730 $11,232 $13,417 12/98 $12,913 $11,933 $14,205 1/99 $13,967 $12,088 $14,181 2/99 $14,240 $11,114 $13,708 3/99 $15,352 $11,285 $14,137 4/99 $16,534 $12,296 $15,182 5/99 $17,382 $12,476 $15,138 6/99 $18,665 $13,040 $15,673 7/99 $19,008 $12,683 $15,242 8/99 $18,927 $12,213 $14,847 9/99 $20,210 $12,216 $14,324 10/99 $23,100 $12,266 $15,003 11/99 $26,361 $12,998 $15,434 12/99 $30,743 $14,469 $16,792 1/00 $29,384 $14,237 $16,237 2/00 $30,838 $16,587 $17,485 3/00 $30,336 $15,494 $18,486 4/00 $27,511 $14,561 $17,611 5/00 $25,335 $13,712 $17,144 6/00 $27,448 $14,908 $17,652 7/00 $26,026 $14,428 $17,454 8/00 $27,856 $15,529 $19,126 9/00 $26,580 $15,072 $18,854 10/00 $28,462 $14,400 $18,563 11/00 $24,184 $12,921 $16,893 12/00 $25,887 $14,031 $18,178 1/01 $30,523 $14,762 $18,471 2/01 $27,624 $13,794 $17,346 3/01 $25,234 $13,119 $16,271 4/01 $26,549 $14,145 $17,662 The chart shows the value of a hypothetical initial investment of $10,000 in the Fund, the Russell 2000 Index, and the Russell Midcap Index on December 31, 1996 (the inception of the Fund) and held through April 30, 2001. The Russell 2000 Index and the Russell Midcap Index are widely recognized, unmanaged indices of common stock prices. You may not invest directly in an index. The index returns do not reflect expenses, which have been deducted from the Fund's return. These figures reflect the reinvestment of dividends. The value of the investment will fluctuate so that when redeemed, shares may be worth more or less than the original investment. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. Over the last six months, the Fund's performance was driven by several technology holdings (Vishay Intertechnology +25.9% and Diebold +25.3%), select media/broadcasting stocks (Media General +26.5%, Ackerley Group +18.0%, and Paxson Communications +12.2%), and special situation stocks (Dollar Thrifty Automotive Group +43.7%). As we have discussed in prior publications, the environment for telecommunications companies remained difficult as the ongoing inventory correction continued to unwind, and the ability to raise capital for companies to fund their buildouts remained very difficult. As a result, shares of telecom companies continued to lag the market as a whole. Specifically, the underperformance of Global Crossing, Rural Cellular, Nextel Partners, and Citizens Communications hindered the Fund's performance. Shares of some of our healthcare companies, including Watson Pharmaceutical, Radiance Medical, and Alpharma, also underperformed the broader market. It is no secret that the environment over the past year or so has been very difficult and turbulent. Economic growth slowed to a 1% annual rate during the fourth quarter of 2000 from a blistering rate of 8.3% in the fourth quarter of 1999. The capital markets were essentially closed, preventing many companies from raising additional capital to fund their business needs. In the bond market, the total default rate in the marketplace was 6.9% during the middle of May, a level rapidly approaching its prior high of 8.8% recorded in 1991. However, unlike past experiences, formerly solid credits have been a significant participant. Investment grade defaults are representing an abnormally high percentage (25.9%) of total defaults. In particular, defaults have been rampant in media, telecommunications, food, restaurants, and movie theater chains. The bottom line is that things have been tough everywhere, not just in the second- and third-tier sectors. The Federal Reserve responded to this turmoil by cutting interest rates five times through May 15, 2001, for a total of 250 basis points. In light of the troublesome environment that companies have been faced with over the last several quarters, it is interesting to note that small- and mid-cap stocks, as a whole, have actually been holding up fairly well, despite their higher level of volatility.2 This stands in stark contrast to recent years where large-caps have dominated the equity markets. For example, over the 1993 through 1999 period, returns generated in the equity market were driven almost entirely by large-cap stocks. Investors generally displayed a notable preference for larger-cap issues and, as a result, the outperformance of larger-cap securities exceeded the differences in the fundamental performance of the underlying companies. Since March 2000, however, the equity markets have seen a change in leadership as small- and mid-cap stocks have performed well relative to larger-cap equities. Since March 2000, the Russell 2000 has outperformed the S&P 500 by nearly 700 basis points and the Russell Midcap Index has outperformed the S&P 500 by a spectacular 1,890 basis points. In fact, if the current outperformance lasts, small-cap stocks will have their first three-year streak of beating large-caps since 1993. However, while mid- and small-cap stocks have recently been outperforming, as a group, they still remain fairly inexpensive, based on various valuation measurements such as P/E, price-to-book value, etc., when compared to large-cap equities, thus setting the stage for further possible outperformance. In addition to overall attractive valuations, mid- and small-cap companies are also seeing their earnings grow faster than their large-cap brethren. For example, the average large-cap company, as represented by the S&P 500, is projected to see its earnings grow by 15.5%, according to Zacks, over the next five years, whereas the average small-cap company, as proxied by the Russell 2000, should see its earnings grow at a rate of 17.4%. The recent outperformance by the small- and mid-cap group is partly attributable to the fact that many mid- and small-cap companies are more flexible in some ways than many large-cap companies; those which are well managed and have viable financing options are often better positioned to survive downturns in the economy. During most of the 1990s, there was a tendency for many portfolio managers and institutional investors to neglect broad areas of the market. With many portfolios linked to specific benchmarks, such as the S&P 500, most overall portfolio holdings were skewed towards those in the Index; securities outside the Index were frequently inefficiently priced. This was acceptable to many investors when the broad indices rose notably in price. However, the more difficult market environment of 2000 has led many to consider absolute performance bogeys and to revisit previously neglected areas of the market. This trend should continue to bolster the performance of small- and mid-cap stocks as, in our opinion, many large-cap high multiple stocks may continue to experience lackluster stock performance. The relative inefficiency of the small- and mid-cap markets allows for the opportunity for portfolio managers to add significant value to shareholders by finding overlooked and underfollowed gems which can amply reward shareholders over the long-term. The primary factor which contributes to this inefficiency is that few large Wall Street firms follow many of these smaller companies. For example, currently only 43% of the companies in the Russell 2500 have at least six Wall Street analysts following them; for the Russell 2000, that figure falls to 34%. In addition, a good number of firms have no coverage. For those companies with good management, a solid business model, a decent balance sheet, and an attractive valuation, the upside potential could be very rewarding as more investors, and eventually Wall Street, recognize the inherent value in these companies. Periods marked by extreme volatility have never been friendly for small- and mid-cap stock performance. For example, during 1998, volatility doubled, largely due to the Long-Term Capital Management crisis and the Asian financial crisis, and it has remained at relatively high levels since then. During this period (1998 through present), the large-cap premium increased from 143% to a high of 177% in July 2000. Since then, the large-cap premium has declined, but still averages around 159%, well above the 14-year average of 109%. Although past performance does not guarantee future results, we look at historical data to help us as we try to both understand the current market and to determine where it may be headed in the future. Historically, when volatility peaks and begins to subside, the valuation gap begins to work in favor of smaller-cap stocks as investors return to the group. For example, volatility peaked in December 1990 during the last recession and was then cut in half over the next four and a half years. Likewise, the multiple gaps between large-caps and mid- and small-caps peaked at 117% in October 1990 and then declined to a low of 88% in August 1995. As the impact of the Fed's easing of interest rates takes hold and the economy eventually stabilizes and recovers, we anticipate diminishing volatility and dissipating risk aversion should contribute to a smaller valuation gap between large-caps and mid- and small-caps. Historically, conditions such as these have led to prolonged periods of outperformance by small- and mid-cap stocks. For example, in the early `90s, yield spreads contracted from a high of 1,000 basis points to approximately 400 basis points. As a result, the large-cap premium contracted from 60% to a 10% discount to small-caps in December 1994. During this period, small-caps outperformed large-caps by an average of 6.7% per year. Another positive for the group is the emerging sign that the credit markets may be starting to reopen. As the economy starts to recover, the high yield debt market will begin to rally and the capital markets will once again open; credit discrimination will lessen, and banks will once again lend. In fact, outside of telecommunications, high yield spreads have been rapidly narrowing. Lower borrowing costs for growth capital will eventually engage the economy, leading to an improved profit picture and rising share prices. Historically, small-cap shares typically have twice the return of their large-cap brethren following economic slowdowns, with twelve-month gains in excess of 30%, according to CS First Boston. In fact, during past periods, there has been a high inverse correlation between the direction of high yield spreads and small- and mid-cap stock price movement. Small-caps have historically been the largest beneficiaries of falling credit spreads since they tend to be most damaged by the periods of liquidity shrinkage. Historically, stocks of smaller-sized companies have performed better than large-caps when coming out of a recession or a slowdown in the economy. In fact, in eight of the last eleven periods when the Fed was in an easing mode, small-/mid-caps beat large-caps over the ensuing twelve months. As previously mentioned, during this time many small- to mid-sized companies are more flexible and better able to respond to the changing economy. Many of these companies also have the opportunity to perform extremely well once the economy and stock market heat back up, as those with niche markets or products may be acquired by larger firms, often at significant premiums. Thus they have the ability to perform well in a variety of economic environments. We feel that the Fund owns a good many of these types of stocks and is well positioned to deliver solid returns for our shareholders going forward. Thank you for your continued support of the Fountainhead Special Value Fund. Sincerely, Roger E. King Chairman and President The Fountainhead Special Value Fund is offered by prospectus only. The prospectus contains important information about the Fund's objectives, risks, fees, distribution charges, and other expenses. You should read the prospectus carefully before investing or sending money. You can obtain a prospectus by calling 800-868-9535. Shares of the Fountainhead Special Value Fund are distributed by Unified Financial Securities, Inc. - -------- 1 Unlike a traditional value manager who buys solely low P/E, low price/book, low price/sales, or low price/cash flow stocks, the Fund may own some stocks which have traditionally been classified as growth stocks. The Fund's advisor utilizes a broader definition of value, which includes purchasing stocks which are trading at either a discount to their five-year projected growth rate, or at a discount to their private-market value. The Fund's advisor looks favorably upon purchasing stocks of companies which are growing their earnings at a healthy rate, it is just sensitive to the price it will pay for that growth. In the Fund's advisor's opinion, this approach allows for more flexibility and provides the opportunity for the Fund's advisor to take advantage of more opportunities in the market. 2 Small Company Risk: The risks associated with investing in small companies (less than $6.5 billion in market capitalization) include: the earnings and prospects of smaller companies are more volatile than larger companies; small companies may experience higher failure rates than do larger companies; the trading volume of securities of smaller companies is normally less than that of larger companies and, therefore, may disproportionately affect their market price, tending to make them fall more in response to selling pressure than is the case with larger companies; and small companies may have limited markets, product lines or financial resources and may have less management experience than larger companies.
Fountainhead Special Value Fund Schedule of Investments - April 30, 2001 (Unaudited) Common Stocks - 102.1% Shares Value Cable & Other Pay Television Services - 12.4% Adelphia Communication Corp. - Class A (a) 36,228 $ 1,317,250 Cablevision Systems Corp. - Class A (a) 11,300 776,875 Charter Communications, Inc. - Class A (a) 46,000 984,860 ------------------ 3,078,985 ------------------ Calculating & Accounting Machines (No Electronic Computers) - 1.8% Diebold, Inc. 13,700 446,483 ------------------ Electromedical & Electrotherapeutic Apparatus - 1.6% Visx, Inc. (a) 19,500 394,875 ------------------ Electronic Components & Accessories - 3.5% Vishay Intertechnology, Inc. (a) 35,100 875,745 ------------------ National Commercial Banks - 5.0% Riggs National Corp. 77,900 1,234,715 ------------------ Newspapers: Publishing Or Publishing & Printing - 2.1% Media General, Inc. - Class A 10,800 519,048 ------------------ Perfumes, Cosmetics & Other Toilet Preparations - 3.2% Elizabeth Arden, Inc. (a) 43,200 790,560 ------------------ Pharmaceutical Preparations - 13.9% Alpharma, Inc. 32,200 728,364 Elan Corp. PLC (a) 24,174 1,212,326 King Pharmaceuticals, Inc. (a) 9,000 379,170 Mylan Laboratories, Inc. 32,600 871,724 Watson Pharmaceuticals, Inc. (a) 5,700 283,860 ------------------ 3,475,444 ------------------ Radio Broadcasting Stations - 0.2% Paxson Communications Corp. (a) 4,000 51,040 ------------------ Radio Telephone Communications - 17.1% Dobson Communications Corp. (a) 79,000 1,139,180 Nextel Communications, Inc. - Class A (a) 12,200 198,250 Nextel Partners, Inc. - Class A (a) 62,200 1,069,218 Rural Cellular Corp. (a) 29,000 1,084,890 Western Wireless Corp. - Class A 17,600 783,728 ------------------ 4,275,266 ------------------ Security Brokers, Dealers & Flotation Companies - 6.7% E*Trade Group, Inc. (a) 98,000 921,200 Knight Trading Group, Inc. (a) 41,000 758,500 ------------------ 1,679,700 ------------------ Fountainhead Special Value Fund Schedule of Investments - April 30, 2001 (Unaudited) Common Stocks - 102.1% - continued Shares Value Services-Advertising - 3.0% Ackerley Group, Inc. 62,000 $ 758,880 ------------------ Services-Auto Rental & Leasing - 6.2% Dollar Thrifty Automotive Group, Inc. (a) 70,000 1,547,000 ------------------ Services - Consumer Credit Reporting,Collection Agencies - 1.6% Equifax, Inc. 12,000 396,840 ------------------ Services - Motion Picture & Video Tape Production - 3.8% Fox Entertainment Group, Inc. (a) 41,000 940,950 ------------------ Surgical & Medical Instruments & Apparatus - 9.9% Boston Scientific Corp. (a) 83,000 1,318,040 Radiance Medical Systems, Inc. (a) 225,000 1,140,750 ------------------ 2,458,790 ------------------ Telephone Communications (No Radio Telephone) - 10.1% Global Crossing Ltd. (a) 27,290 341,944 Telephone & Data Systems, Inc. 11,300 1,186,500 Broadwing, Inc. 40,000 992,000 ------------------ 2,520,444 ------------------ TOTAL COMMON STOCKS 25,444,765 ------------------ TOTAL INVESTMENTS - 102.1% (Cost $22,135,438) 25,444,765 ------------------ Liabilities in excess of other assets - (2.1)% (514,219) ------------------ Total Net Assets - 100.0% $ 24,930,546 ================== (a) Non-income producing. See accompanying notes which are an integral part of the financial statements.
Fountainhead Special Value Fund Statement of Assets & Liabilities (Unaudited) April 30, 2001 Assets Investment in securities, at value (Cost $22,135,438) $ 25,444,765 Receivable for investments sold 71,848 Receivable for fund shares sold 42,500 Dividend receivable 1,260 Interest receivable 2,512 Other receivable 10,615 ----------------- Total assets 25,573,500 Liabilities Accrued investment advisory fee $ 59,102 Payable for investments purchased 302,650 Payable to custodian bank 213,901 Payable for shares redeemed 66,210 Other payables 1,091 ----------------- Total liabilities 642,954 Net Assets $ 24,930,546 ================= Net Assets consist of: Paid-in capital $ 22,279,242 Accumulated undistributed net investment loss (155,468) Accumulated undistributed net realized loss on investments (502,555) Net unrealized appreciation on investments 3,309,327 ----------------- Net Assets, for 1,199,277 shares $ 24,930,546 ================= Net Asset Value Net Assets Offering price and redemption price per share ($24,930,546/1,199,277) $ 20.79 ================= See accompanying notes which are an integral part of the financial statements.
Fountainhead Special Value Fund Statement of Operations for the six months ended April 30, 2001 (Unaudited) Investment Income Dividend income $ 21,018 Interest income 2,230 --------------- Total Income 23,248 Expenses Investment advisory fee $ 174,321 Administration fees 15,000 Audit fees 6,442 Custodian fees 3,724 Fund accounting 12,600 Insurance fees 2,551 Legal fees 4,104 Registration fees 4,066 Shareholder reports 5,494 Transfer agent fees 9,013 Trustees' fees 417 Miscellaneous expenses 1,834 --------------- Total expenses before waivers and reimbursements 239,566 Waived fees and reimbursed expenses (60,850) --------------- Total operating expenses 178,716 --------------- Net Investment Loss (155,468) --------------- Realized & Unrealized Gain (Loss) Net realized gain on investment securities 586,102 Change in net unrealized depreciation on investment securities (2,356,966) --------------- Net realized and unrealized loss on investment securities (1,770,864) --------------- Net decrease in net assets resulting from operations $ (1,926,332) =============== See accompanying notes which are an integral part of the financial statements.
Fountainhead Special Value Fund Statement of Changes in Net Assets For the Six months ended For the April 30, 2001 Year ended (Unaudited) October 31, 2000 -------------------- ----------------- Increase (Decrease) in Net Assets Operations Net investment loss $ (155,468) $ (238,881) Net realized gain on investment securities 586,102 2,763,544 Change in net unrealized appreciation (depreciation) (2,356,966) 841,203 -------------------- ----------------- Net increase (decrease) in net assets resulting from operations (1,926,332) 3,365,866 -------------------- ----------------- Distributions to shareholders From net realized gain (3,741,772) (680,581) -------------------- ----------------- Share Transactions Net proceeds from sale of shares 6,475,567 12,130,823 Shares issued in reinvestment of distributions 3,528,824 651,634 Shares redeemed (4,326,465) (4,614,823) -------------------- ----------------- Net increase in net assets resulting from share transactions 5,677,925 8,167,634 -------------------- ----------------- Total increase in net assets 9,821 10,852,919 Net Assets Beginning of period 24,920,724 14,067,805 -------------------- ----------------- End of period [including accumulated undistributed net investment income (loss) of ($155,468) and $0, respectively] $ 24,930,545 $ 24,920,724 ==================== ================= See accompanying notes which are an integral part of the financial statements.
Fountainhead Special Value Fund Financial Highlights For the Six months ended Period ended April 30, 2001 For the year ended October 31, October 31, ------------------------------------- (Unaudited) 2000 1999 1998 1997 (c) ----------------------- ---------- --------- --------- Selected Per Share Data Net asset value, beginning of period $ 27.21 $ 22.86 $ 12.61 $ 13.35 $ 10.00 ---------- ---------- ---------- --------- --------- Income from investment operations Net investment income (loss) (0.14) (0.31) (0.16) (0.09) (0.02) Net realized and unrealized gain (loss) (2.15) 5.70 10.41 (0.51) 3.37 ---------- ---------- ---------- --------- --------- Total from investment operations (2.29) 5.39 10.25 (0.60) 3.35 ---------- ---------- ---------- --------- --------- Less Distributions From net realized gain (loss) (4.13) (1.04) 0.00 (0.14) (0.00) ---------- ---------- ---------- --------- --------- Net asset value, end of period $ 20.79 $ 27.21 $ 22.86 $ 12.61 $ 13.35 ========== ========== ========== ========= ========= Total Return (8.40)%(a) 23.35% 81.28% (4.67)% 33.70% Ratios and Supplemental Data Net assets, end of period (000) $24,931 $24,921 $14,068 $ 6,637 $ 2,629 Ratio of expenses to average net assets 1.50% (b) 1.42% 1.25% 1.20% 0.97% Ratio of expenses to average net assets before fee waivers and reimbursement 2.01% (b) 2.03% 2.50% 2.76% 8.25% Ratio of net investment income (loss) to average net assets (1.30)%(b) (1.15)% (0.95)% (0.67)% (0.16)% Ratio of net investment income (loss) to average net assets before fee waivers and reimbursement (1.81)%(b) (1.76)% (2.20)% (2.22)% (7.45)% Portfolio turnover rate 101.63% 125.24% 177.56% 108.31% 130.63% (a) For periods of less than a full year, total return is not annualized. (b) Annualized (c) December 31, 1996 (commencement of operations) to October 31, 1997. See accompanying notes which are an integral part of the financial statements.
Fountainhead Special Value Fund Notes To Financial Statements April 30, 2001 (Unaudited) NOTE 1. ORGANIZATION The Fountainhead Special Value Fund (the "Fund") is organized as a series of the AmeriPrime Funds, an Ohio business trust (the "Trust"). The Fund is registered under the Investment Company Act of 1940, as amended, as a diversified, open-end management investment company. The Fund's investment objective is to provide long-term capital growth. The Agreement and Declaration of Trust for the Trust 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 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 Advisor (as such term is defined in note 3 of this document), 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 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. 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. 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 its net investment income and any realized capital gains. Dividends and Distributions - The Fund intends to distribute substantially all of its net investment income as dividends to its shareholders on at least an annual basis. The Fund intends to distribute its net long-term capital gains and its net short-term capital gains at least once a year. Redemption Fees - The Fund charges a redemption fee of 1% of the current net asset value of shares redeemed if the shares are owned less than 180 days. The fee is charged for the benefit of remaining shareholders to defray Fund portfolio transaction expenses and facilitate portfolio management. This fee Fountainhead Special Value Fund Notes To Financial Statements April 30, 2001 - continued (Unaudited) NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - continued applies to shares being redeemed in the order in which they are purchased. The fee, which is retained by the Fund, is accounted for as an addition to paid-in capital. Other - The Fund follows industry practice and records security transactions on the trade date. The specific identification method is used for determining gains or losses for financial statements and income tax purposes. Dividend income is recorded on the ex-dividend date and interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the life of the respective securities. NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES The Fund retains King Investment Advisors, Inc. (the "Advisor") to manage the Fund's investments. Roger E. King, 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. 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 1.43% of the average daily net assets of the Fund. For the six months ended April 30, 2001 the Advisor received a fee of $174,321 from the Fund. The Advisor has contractually agreed to waive management fees and reimburse expenses for the Fund to the extent necessary to maintain total operating expenses at the rate of 1.50% of average daily net assets through February 28, 2002. For the six months ended April 30, 2001, the Advisor waived fees and reimbursed expenses of $72,883. The Fund has retained Unified Fund Services, Inc. ("Unified"), 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, personnel, and facilities. Unified receives a monthly fee from the Fund 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 six months ended April 30, 2001, Unified received fees of $15,000 from the Fund for administrative services provided to the Fund. A Trustee and the officers of the Trust are members of management and/or employees of Unified. The Fund also retained Unified to act as the Fund's transfer agent and Fund accountant. For its services as transfer agent, Unified receives a monthly fee from the Fund of $1.20 per shareholder (subject to a minimum monthly fee of $900). For the six months ended April 30, 2001, Unified received fees of $9,013 from the Fund for transfer agent services provided to the Fund. For its services as Fund accountant, Unified receives an annual fee from the Fund 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 six months ended April 30, 2001, Unified received fees of $12,600 from the Fund for fund accounting services provided to the Fund. Prior to December 31, 2000, the Fund had retained AmeriPrime Financial Securities, Inc. to act as the principal distributor of its shares. Effective December 31, 2000, AmeriPrime Financial Securities, Inc. sold substantially all of its assets to Unified Financial Securities, Inc. Both companies are wholly owned Fountainhead Special Value Fund Notes To Financial Statements April 30, 2001 - continued (Unaudited) NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - continued subsidiaries of Unified Financial Services, Inc. Effective December 31, 2000, the Fund retained Unified Financial Securities, Inc. to act as the principal distributor of its shares. There were no payments made to either distributor during the six months ended April 30, 2001. A Trustee and officer of the Trust may be deemed to be an affiliate of AmeriPrime Financial Securities Inc. and Unified Financial Securities, Inc. NOTE 4. INVESTMENTS For the six months ended April 30, 2001, purchases and sales of investment securities, other than short-term investments, totaled $14,562,677 and $12,302,559, respectively. The gross unrealized appreciation for all securities totaled $4,445,090 and the gross unrealized depreciation for all securities totaled $1,135,763 for a net unrealized appreciation of $3,309,327. The total cost of securities for federal income tax purposes on April 30, 2001 was $22,135,438. 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 April 30, 2001, Charles Schwab & Co., for the benefit of its customers, beneficially owned over 31% of the Fund. AAM Equity Fund Semi-Annual Report April 30, 2001 (Unaudited)
AAM Equity Fund Schedule of Investments - April 30, 2001 (Unaudited) Common Stocks - 80.6% Shares Value Aircraft - 1.4% Northrop Grumman Corp. 950 $ 85,738 --------------- Beverages -1.6% Coca-Cola Co. 2,000 92,380 --------------- Biological Products (No Diagnostic Substances) -1.5% Amgen, Inc. (a) 1,500 91,710 --------------- Cable & Other Pay Television Service - 1.0% Liberty Media Corp. Class A (a) 3,550 56,800 --------------- Communications Equipment - 0.0% McData Corp. Class A (a) 46 1,050 --------------- Computer & Office Equipment - 2.9% International Business Machines Corp. 1,000 115,140 Hewlett-Packard Co. 2,000 56,860 --------------- 172,000 --------------- Computer Communications Equipment - 1.4% Cisco Systems, Inc. (a) 5,000 84,900 --------------- Computer Storage Devices - 2.0% EMC Corp. (a) 3,000 118,800 --------------- Converted Paper & Paperboard Products (No Containers/Boxes) - 1.4% Avery Dennison Corp. 1,500 84,105 --------------- Electric Services - 2.3% Dominion Resources, Inc. 2,000 136,980 --------------- Electronic & Other Electrical Equipment (No Computer Equip) - 2.0% General Electric Co. 2,500 120,675 --------------- Electronic Computers - 1.4% Sun Microsystems, Inc. (a) 5,000 85,600 --------------- Electronic Instruments - 3.0% Emerson Electric Co. 1,500 99,975 Koninklijke Phillips Electronics (c) 2,500 77,000 --------------- 176,975 --------------- Fire, Marine, Casualty Insurance - 3.6% American International Group, Inc. 1,250 102,250 Berkshire Hathaway, Inc. Class B (a) 50 113,750 --------------- 216,000 --------------- AAM Equity Fund Schedule of Investments - April 30, 2001 (Unaudited) Common Stocks - continued Shares Value Foods - 1.2% Sara Lee Corp. 3,500 $ 69,685 --------------- Heavy Construction Other Than Building Const - Contractors - 1.8% Ashland Inc. 2,500 107,650 --------------- Instruments For Measuring & Testing Of Electricity & Electronic Signals - 1.6% Agilent Technologies, Inc. (a) 2,500 97,525 --------------- Insurance - 1.7% Markel Corp. (a) 500 98,125 --------------- Malt Beverages - 1.3% Anheuser Busch Companies, Inc. 1,950 77,981 --------------- Mining, Quarrying Of Nonmetallic Minerals (No Fuels) - 1.5% Martin Marietta Materials, Inc. 2,000 91,940 --------------- National Commercial Banks - 6.7% Bank of America Corp. 1,325 74,200 BB&T Corp. 3,500 123,970 Citigroup Inc. 2,000 98,300 Suntrust Banks, Inc. 1,600 101,600 --------------- 398,070 --------------- Oil, Gas, Field Services - 1.7% Schlumberger Ltd. 1,500 99,450 --------------- Personal Credit Institutions - 2.1% Capital One Financial Corp. 2,000 125,720 --------------- Petroleum Refining - 6.0% BP Amoco Corp. 1,640 88,691 Chevron Corp. 1,000 96,560 Conoco, Inc. - Class A 3,000 90,870 Murphy Oil Corp. 925 75,850 --------------- 351,971 --------------- Pharmaceutical Preparations - 8.2% American Home Product 1,800 103,950 Bristol Meyers Squibb Co. 1,750 98,000 Johnson & Johnson 1,000 96,480 Merck & Company, Inc. 1,200 91,164 Schering-Plough Corp. 2,500 96,350 --------------- 485,944 --------------- Primary Production Of Aluminum - 2.1% Alcoa, Inc. 3,000 124,200 --------------- AAM Equity Fund Schedule of Investments - April 30, 2001 (Unaudited) Common Stocks - continued Shares Value Retail-Drug Stores & Proprietary Stores -1.8% Walgreen Co. 2,500 $ 106,950 --------------- Retail-Radio TV & Consumer Electronics Stores - 2.3% Circuit City Stores, Inc. 9,000 135,450 --------------- Rolling Drawing & Extruding Of Nonferrous Metals - 2.0% Tredegar Corp. 6,000 117,300 --------------- Semiconductors & Related Devices 1.6% Intel Corp. 3,000 92,730 --------------- Services-Computer Programming, Data Processing, Etc. - 1.3% AOL-Time Warner, Inc. (a) 1,500 75,750 --------------- Services-Miscellaneous Amusement & Recreation - 1.5% Walt Disney Company 3,000 90,750 --------------- Services-Prepackaged Software - 2.3% Microsoft Corp. (a) 2,000 135,500 --------------- Ship & Boat Building & Repairing - 1.9% General Dynamics Corp. 1,500 115,620 --------------- Telephone & Telegraph Apparatus - 0.0% Avaya, Inc. (a) 85 1,257 --------------- Telephone Communications (No Radio Telephone) - 1.1% AT&T Corp. 3,000 66,840 --------------- Telephone Services - 1.7% SBC Communications, Inc. 2,500 103,125 --------------- Wholesale-Groceries & Related Products - 1.7% Sysco Corp. 3,500 98,420 --------------- Total Common Stock (Cost $4,310,010) $ 4,791,666 --------------- Principal Amount Value Money Market Securities - 22.2% Firstar Treasury Fund, 3.79% (b) (Cost $1,320,282) $1,320,282 $ 1,320,282 --------------- TOTAL INVESTMENTS (Cost $5,630,292) - 102.8% 6,111,948 --------------- Other assets less liabilities - (2.8)% (169,639) --------------- Total Net Assets - 100.0% $ 5,942,309 =============== (a) Non-income producing. (b) Variable rate security; the coupon rate shown represents the rate at April 30, 2001. (c) American Depository Receipt. See accompanying notres which are an integral part of the financial statements.
AAM Equity Fund Statement of Assets and Liabilities (Unaudited) April 30, 2001 Assets Investment in securities, at value (cost $5,630,292) $ 6,111,948 Cash 18 Dividends receivable 2,492 Interest receivable 2,606 Receivable for investments sold 42,869 Receivable from advisor 4,554 Deferred organization costs 11,442 ------------------- Total assets 6,175,929 Liabilities Payable for investments purchased $ 222,699 Accrued investment advisory fee payable 5,036 Other payables and accrued expenses 5,885 ------------------- Total liabilities 233,620 Net Assets $ 5,942,309 =================== Net Assets consist of: Paid-in capital $ 5,637,341 Accumulated undistributed net investment income 12,814 Accumulated undistributed net realized loss on investments (189,502) Net unrealized appreciation on investments 481,656 ------------------- Net Assets, for 546,270 shares $ 5,942,309 =================== Net Asset Value Net Assets Offering price and redemption price per share ($5,942,309/546,270) $ 10.88 =================== See accompanying notres which are an integral part of the financial statements.
AAM Equity Fund Statement of Operations for the six months ended April 30, 2001 (Unaudited) Investment Income Dividend Income $ 29,805 Interest Income 13,736 ------------------- Total Income 43,541 Expenses Investment advisory fee 28,971 Organizational expenses 5,036 Trustees' fees 548 ------------------- Total expenses before reimbursement 34,555 Reimbursed expenses (5,584) ------------------- Total operating expenses 28,971 ------------------- Net Investment Income 14,570 ------------------- Realized & Unrealized Gain (Loss) Net realized loss on investment securities (67,136) Change in net unrealized depreciation on investment securities (216,858) ------------------- Net loss on investment securities (283,994) ------------------- Net increase in net assets resulting from operations $ (269,424) =================== See accompanying notres which are an integral part of the financial statements.
AAM Equity Fund Statement of Changes in Net Assets Six months ended Year April 30, ended 2001 October 31, (Unaudited) 2000 ------------------ ----------------- Increase (Decrease) in Net Assets Operations Net investment income $ 14,570 $ 10,114 Net realized loss on investment securities (67,136) (30,026) Change in net unrealized appreciation (depreciation) (216,858) 230,800 ------------------ ----------------- Net increase (decrease) in net assets resulting from operations (269,424) 210,888 ------------------ ----------------- Distributions to shareholders From net investment income (11,870) (16,393) From net realized gains 0 0 ------------------ ----------------- Total distributions (11,870) (16,393) Share Transactions Net proceeds from sale of shares 1,224,766 1,722,471 Shares issued in reinvestment of dividends 0 10,990 Shares redeemed (295,693) (970,172) ------------------ ----------------- Net increase in net assets resulting from share transactions 929,073 763,289 ------------------ ----------------- Total increase in net assets 647,779 957,784 Net Assets Beginning of period 5,294,530 4,336,746 ------------------ ----------------- End of period [including accumulated undistributed net investment income of $10,114 and $14,570, respectively] $ 5,942,309 $ 5,294,530 ================== ================= See accompanying notres which are an integral part of the financial statements.
AAM Equity Fund Financial Highlights Six months ended Year Year Period April 30, ended ended ended 2001 October 31, October 31, October 31, (Unaudited) 2000 1999 1998 (c) -------------- -------------- -------------- ------------ Selected Per Share Data Net asset value, beginning of period $ 11.53 $ 10.99 $ 9.43 $ 10.00 -------------- -------------- -------------- ------------ Income from investment operations Net investment income 0.03 0.03 0.05 0.03 Net realized and unrealized gain (loss) (0.65) 0.55 1.53 (0.60) -------------- -------------- ------------ -------------- Total from investment operations (0.62) 0.58 1.58 (0.57) -------------- -------------- -------------- ------------ Distribution to shareholders from: Net investment income (0.03) (0.04) (0.02) 0.00 Net realized gains 0.00 0.00 0.00 0.00 -------------- -------------- ------------ -------------- Total distributions (0.03) (0.04) (0.02) 0.00 -------------- -------------- -------------- ------------ Net asset value, end of period $ 10.88 $ 11.53 $ 10.99 $ 9.43 ============== ============== ============== ============ Total Return (5.41)%(b) 5.28% 16.74% (5.70)%(b) Ratios and Supplemental Data Net assets, end of period (000) $5,942 $5,295 $4,337 $2,852 Ratio of expenses to average net assets 1.15% (a) 1.15% 1.15% 1.14% (a) Ratio of expenses to average net assets before reimbursement 1.37% (a) 1.35% 1.35% 1.40% (a) Ratio of net investment income to average net assets 0.58% (a) 0.22% 0.43% 0.90% (a) Ratio of net investment income to average net assets before reimbursement 0.36%b(a) 0.02% 0.23% 0.64% (a) Portfolio turnover rate 37.54% 32.79% 27.34% 14.41% (a) (a) Annualized (b) For periods of less than a full year, the total return is not annualized. (c) June 30, 1998 (commencement of operations) to October 31, 1998 See accompanying notes which are an integral part of the financial statements.
Corbin Small-Cap Value Fund Semi-Annual Report April 30, 2001 (Unaudited) May 17, 2001 Dear Shareholder: As of April 30, 2001, the Fund's portfolio contained 21 equities, with 100.5% of the money in equity securities and -0.5% in cash. What a difference a year makes in the fast-moving financial world of the 21st century. A year ago at this time, investors were talking about the blip in the Internet and technology juggernaut; today, we know it to have been a complete collapse. With that said, is the technology sector going away? Of course not. Two of the Fund's largest holdings are companies that use, implement, and develop technology. The difference is that they have sustainable business models that we believe will be proven to be lucrative in the future. The reason has to do with the competitive advantages that these companies have over any would-be peers. I would like to focus on this point in my discussion of the Fund this quarter. Almost all of the companies that are owned by the Fund have some sort of competitive advantage over their peers, their industry, or other businesses in general. I will focus on three of these firms, because they all have some unique attribute that will, in my opinion, make them a good investment over the long-term. One such company is Cyberonics, a maker of medical devices. The company was recently featured in a major national magazine for its unique patented product, the NCP. The NCP is a pacemaker for the brain. It sends electric current to this area of the body to treat a variety of ailments, and it is the best way to treat many problems without the use of drugs. Last year, the company received a buy-out offer from medical-device giant Medtronic, which wanted to add this unique product to its line of devices. This is a clear instance of proprietary technology giving an advantage to a firm. Liqui-Box Corporation has a different competitive advantage. The company literally puts liquid in boxes through patented packaging designs. Plastic bottles for Ozarka Water, wine "in a box," and cola syrup "in a box," as well as other such products, are the firm's livelihood. While the market for these products is growing, it will never be huge. The company is part of an oligopoly in its business, meaning that competition is limited. Limited competition allows for excess profits over time, as well as making the business model more steady. Not too many venture capitalists are looking for opportunities to enter the liquid-in-boxes business. This means that, over the long-term, this firm can generate excess profits with little risk. This makes it a good business, and, potentially, a good stock. Pizza Inn is another company that has an advantage in a competitive industry. It franchises its restaurants primarily in little towns, or in situations in which a small "footprint" makes sense. Consequently, the company can make a large amount of money with very little capital being deployed. This has allowed the company to buy-in shares, pay a good dividend, and make any capital improvements that are needed. Its competitive advantage is that does not need as large a cash-flow margin to operate, in comparison with others in its industry. Every business in which the Fund owns stock has a unique niche in which it operates. Although market conditions during the last few years have not caused investors to focus on such businesses, that will probably change in the future. We are excited about the opportunities that the market has created, and we continue to believe that the economic fundamentals are becoming increasingly favorable for this style of investing. On a final note, I would like to comment on the SureBeam Corporation IPO (initial public offering) in which the Fund participated in March. Corbin & Company was one of the first firms to recognize the potential for Titan Corporation's SureBeam unit. SureBeam went public the week of March 16th, which was one of the worst weeks in market history. The deal was easily over-subscribed, and the stock made its public debut. The fact that it could go public in March was a testament to its strong management and business. There were only two IPOs in that month, with this being one of them. We have confidence in this stock, because food safety is constantly in the news, and it is only going to become a bigger issue over the next few years. The advantages of SureBeam's electron-beam food pasteurization process are rapidly gaining recognition in the food industry. We do not purchase many IPOs, but we believe that SureBeam is going to be something special. PERFORMANCE DISCUSSION The Fund generated a total return of -9.48% for the six months ended April 30, 2001. The Russell 2000 return for that period was -1.72%, and the S&P 600 Small-Cap Index finished the six months with a return of 1.19%. While the Fund's results are disappointing, we believe that market conditions have created many opportunities.
Returns for the Six Months Ended April 30, 2001 Average Annual Return Since Inception Fund / Index Six Months One Year (June 30, 1997) - ----------------------------------- ---------------- -------------- ------------------- - ----------------------------------- ---------------- -------------- ------------------- Corbin Small-Cap Value Fund -9.48% -19.04% -9.37% S & P 600 Small-Cap Index 1.19% 8.10% 9.25% Russell 2000 Index -1.77% -2.86% 6.71%
Corbin Small-Cap S&P 600 Small-Cap Russell 2000 Index $6,855 $14,037 $12,828 ---------------------------------------------------- 6/30/97 10,000 10,000 10,000 7/31/97 10,310 10,629 10,465 8/31/97 10,520 10,897 10,704 9/30/97 11,330 11,617 11,488 10/31/97 11,030 11,116 10,983 11/30/97 11,210 11,035 10,912 12/31/97 10,917 11,257 11,103 1/31/98 10,577 11,037 10,928 2/28/98 10,853 12,043 11,736 3/31/98 11,258 12,502 12,220 4/30/98 11,173 12,575 12,287 5/30/98 10,619 11,909 11,626 6/30/98 10,513 11,944 11,650 7/31/98 9,597 11,030 10,707 8/31/98 7,402 8,904 8,628 9/30/98 7,189 9,448 9,303 10/31/98 7,051 9,886 9,683 11/30/98 6,380 10,442 10,190 12/31/98 6,753 11,108 10,820 1/31/99 6,593 10,969 10,964 2/28/99 6,114 9,981 10,076 3/31/99 5,954 10,110 10,233 4/30/99 7,126 10,777 11,151 5/31/99 7,605 11,040 11,314 6/30/99 7,722 11,668 11,826 7/31/99 7,882 11,565 11,501 8/31/99 7,339 11,056 11,075 9/30/99 7,424 11,103 11,078 10/31/99 7,189 11,075 11,123 11/30/99 7,743 11,543 11,787 12/31/99 8,542 12,486 13,121 1/31/00 8,255 12,099 12,910 2/29/00 8,713 13,718 15,042 3/31/00 9,511 13,211 14,051 4/28/00 8,468 12,985 13,205 5/31/00 7,701 12,601 12,435 6/30/00 7,903 13,347 13,519 7/31/00 7,573 13,019 13,085 8/31/00 7,956 14,172 14,083 9/30/00 7,850 13,786 13,669 10/31/00 7,573 13,872 13,059 11/30/00 7,030 12,428 11,718 12/31/00 6,577 13,959 12,725 01/31/01 7,475 14,558 13,387 02/28/01 7,112 13,670 12,509 03/31/01 6,213 13,043 11,897 04/30/01 6,855 14,037 12,828 This graph shows the value of a hypothetical initial investment of $10,000 in the Fund and the S&P 600 Small-Cap Index and the Russell 2000 Index on June 30, 1997 (inception of the Fund) and held through April 30, 2001. The S&P 600 Small-Cap Index and the Russell 2000 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 Corbin Small-Cap Value Fund portfolio. 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. 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 Fund held a considerable amount of cash going into October last year, and we put much of it to work in the October/November time frame, expecting the market to rally after the presidential election. We did not expect the election process to take 30+ days to determine a winner. In addition, bad economic reports fueled the market's problems. Unfortunately, this led to a ghastly month of December for the Fund. In my years of investing, I have never seen the degree of indiscriminate tax-loss selling that occurred in December. However, that activity did allow us to pick up some outstanding bargains, including an initial investment in Summa Industries and additions to the holdings of Cyberonics, Rush Enterprises, and VTEL Corporation. Recent market events have left participants wondering what will happen next. We believe that the market is in a process of re-setting to a value style of investing that should favor the Fund. For the first time in many months, investors are adding small-cap value stocks to their portfolios. We believe that that trend will continue. FOCUS ON THE TOP FIVE HOLDINGS Duckwall-Alco Stores, Inc. (DUCK) - The company is a retailer primarily based in the middle 60% of the country. It operates small retail stores in rural towns from Ohio to Idaho. Most of the stores are in non-competitive markets, and, because of that, the firm has significantly higher profit margins than those of most retailers. The company has recently re-purchased 20% of its stock and is looking at numerous alternatives to maximize value. Quanex Corporation (NX) - This company is one of the leading steel mini-mills in the country. It is also one of the lowest-cost producers of aluminum in the world. The firm is currently in the process of selling assets and focusing on delivering value to its shareholders through share repurchases and debt reduction. Successories, Inc. (SCES) - Successories is a specialty retailer and wholesaler that creates, produces, and promotes a large assortment of motivational and self-improvement products. The company's product line includes wall decor, books, audiotapes, desktop art, mugs, greeting cards, and personalized gifts and awards. Titan Corporation (TTN) - Titan assists technology-based businesses and others by creating, developing, and deploying state-of-the-art technical solutions, such as information technology, communications, medical product sterilization, and (through its majority-owned subsidiary, SureBeam Corporation) electron-beam food pasteurization. Titan is primarily known for providing information technology and communications services and products for defense, intelligence, and other U.S. and allied government agencies, and for its satellite-based and wireless-based communication services and systems. VTEL Corporation (VTEL) - VTEL designs and produces digital visual communications technology, and distributes that technology to corporations, healthcare facilities, educational institutions, and government operations. It is considered to be a distinguished corporation because of its exclusive services and video-networking software. FINAL THOUGHTS Thank you once again for choosing the Corbin Small-Cap Value Fund. The Fund's ticker symbol is CORBX, and it can be found on most quotation services. If you have any questions or comments, please contact me at dcorbin@corbincom.com or (800) 490-9333. We appreciate your confidence in the Fund and look forward to better days ahead. Sincerely, David A. Corbin, CFA President and Chief Investment Officer For a prospectus and more information, including charges and expenses, call toll free 1-800-924-6848. 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. Distributed by Unified Financial Securities, Inc.
Corbin Small-Cap Value Fund Schedule of Investments - April 30, 2001 (Unaudited) Common Stocks - 101.9% Shares Value Air Conditioning & Warm Air Heating Equipment & Commercial & Industrial Refrigeration Equipment - 5.0% Lancer Corporation (a) 20,000 $ 102,000 ---------------------- Books: Publishing Or Publishing And Printing - 4.4% Thomas Nelson, Inc. 13,000 89,700 ---------------------- Commercial Printing - 6.2% Successories, Inc. (a) 64,700 126,165 ---------------------- Electric Lighting & Wiring Equipment - 5.4% Hubbell, Inc. 4,000 110,480 ---------------------- Electromedical & Electrotherapeutic Apparatuses - 2.8% Cyberonics, Inc. (a) 5,000 57,000 ---------------------- In Vitro & In Vivo Diagnostic Substances - 1.9% North American Scientific, Inc. (a) 3,000 39,720 ---------------------- Miscellaneous Furniture & Fixtures - 1.3% Koala Corporation (a) 7,000 26,390 ---------------------- Plastics Products - 9.6% Liqui-Box Corporation 2,400 106,128 Summa Industries, Inc. (a) 10,000 90,200 ---------------------- 196,328 ---------------------- Plastics, Materials, Synthetic Resins & Nonvulcan Elastomers - 1.7% A. Schulman , Inc. 3,000 35,010 ---------------------- Radio & TV Broadcasting & Communications Equipment - 15.0% VTEL Corporation (a) 234,600 307,326 ---------------------- Retail-Auto Dealers & Gasoline Stations - 3.2% Rush Enterprises, Inc. (a) 15,200 64,600 ---------------------- Retail-Variety Stores - 6.9% Duckwall-Alco Stores, Inc. (a) 21,000 140,700 ---------------------- Search, Detection, Navigation, Guidance, Aeronautical Systems - 3.8% Herley Industries, Inc. (a) 5,000 78,400 ---------------------- Services-Computer Integrated Systems Design - 14.7% Titan Corporation (a) 18,000 300,600 ---------------------- Corbin Small-Cap Value Fund Schedule of Investments - April 30, 2001 (Unaudited) Common Stocks - continued Shares Value Services-Management Consulting Services - 2.3% Nextera Enterprises, Inc. Class A (a) 47,300 $ 46,827 ---------------------- Ship & Boat Building & Repairing - 3.2% Unifab International, Inc. (a) 10,000 65,100 ---------------------- Special Industry Machinery (No Metalworking Machinery) - 4.5% SureBeam Corporation Class A (a) 7,600 92,720 ---------------------- Steel Works, Blast Furnace, Rolling Mills (Coke Ovens) - 6.1% Quanex Corporation 6,000 124,200 ---------------------- Television Broadcasting Stations - 1.1% Hispanic Television Network, Inc. (a) 64,500 22,575 ---------------------- Wholesale-Groceries & Related Products - 2.8% Pizza Inn, Inc. 29,000 57,420 ---------------------- TOTAL COMMON STOCKS (Cost $2,768,532) 2,083,261 ---------------------- TOTAL INVESTMENTS - 101.9% (Cost $2,768,532) $ 2,083,261 ---------------------- Other assets less liabilities - (1.9)% (39,022) ---------------------- Total Net Assets - 100.0% $ 2,044,239 ====================== (a) Non-income producing See Accompanying notes which are an integral part of the financial statement.
Corbin Small-Cap Value Fund April 30, 2001 Statement of Assets & Liabilities (Unaudited) Assets Investment in securities, at value (cost $2,768,532) $ 2,083,261 Receivable for fund shares sold 800 Dividends receivable 405 Other receivables 6,634 ------------------ Total assets 2,091,100 Liabilities Payable for fund shares redeemed 36,012 Payable for securities purchased 8,941 Accrued investment advisory fee 1,908 ------------------ Total liabilities 46,861 ------------------ Net Assets $ 2,044,239 ================== Net Assets consist of: Paid in capital $ 3,283,169 Accumulated undistributed net investment loss (6,059) Accumulated net realized loss on investments (547,600) Net unrealized depreciation on investments (685,271) ------------------ Net Assets, for 318,817 shares $ 2,044,239 ================== Net Asset Value Net Assets Offering price and redemption price per share ($2,044,239/318,817) $ 6.41 ================== See Accompanying notes which are an integral part of the financial statement.
Corbin Small-Cap Value Fund Statement of Operations for the six months ended April 30, 2001 (Unaudited) Investment Income Dividend income $ 12,369 Interest income 3,048 ---------------- Total Income 15,417 Expenses Investment advisory fee $ 15,897 Trustees' fees 542 ---------------- Total expenses before reimbursement 16,439 Reimbursed expenses (542) ---------------- Total operating expenses 15,897 ---------------- Net Investment Loss (480) ---------------- Realized & Unrealized Loss Net realized loss on investment securities (172,280) Change in net unrealized depreciation on investment securities (63,022) ---------------- Net realized & unrealized loss on investment securities (235,302) ---------------- Net decrease in net assets resulting from operations $ (235,782) ================ See Accompanying notes which are an integral part of the financial statement.
Corbin Small-Cap Value Fund Statement of Changes in Net Assets Six months ended Year April 30, 2001 ended (Unaudited) October 31, 2000 ------------------- ------------------- Increase/(Decrease) in Net Assets Operations Net investment income (loss) (480) $ 6,352 Net realized gain (loss) on investment securities (172,280) 477,022 Change in net unrealized appreciation (depreciation) (63,022) (395,107) ------------------- ------------------- Net increase (decrease) in net assets resulting from operations (235,782) 88,267 ------------------- ------------------- Distributions to shareholders From net investment income (10,486) 0 From net realized gain 0 0 ------------------- ------------------- Total distributions (10,486) 0 ------------------- ------------------- Share Transactions Net proceeds from sale of shares 525,301 1,151,984 Shares issued in reinvestment of distributions 0 0 Shares redeemed (1,122,392) (646,942) ------------------- ------------------- Net increase (decrease) in net assets resulting from share transactions (597,091) 505,042 ------------------- ------------------- Total increase (decrease)in net assets (843,359) 593,309 Net Assets Beginning of period 2,887,598 2,294,289 ------------------- ------------------- End of period [including accumulated net investment income (loss) of $(4,617) and $6,352, respectively] $ 2,044,239 $ 2,887,598 =================== =================== Capital Share Transactions Shares sold 80,763 151,045 Shares issued in reinvestment of distributions 0 0 Shares repurchased (167,991) (85,167) ------------------- ------------------- Net increase from capital transactions (87,228) 65,878 =================== =================== See Accompanying notes which are an integral part of the financial statement.
Corbin Small-Cap Value Fund Financial Highlights Six months Ended Year Year Year Period April 30, Ended ended ended ended 2001 October 31, October 31, October 31, October 31, (Unaudited) 2000 1999 1998 1997 (a) -------------- ------------- ------------- ------------ ------------ Selected Per Share Data Net asset value, beginning of period 7.11 $ 6.75 $ 6.62 $ 11.03 $ 10.00 ------------ ------------- ------------- ------------ ------------ Income from investment operations: Net investment income (loss) 0.02 0.02 (0.01) (0.01) 0.00 Net realized and unrealized gain (loss) (0.70) 0.34 0.14 (3.76) 1.03 ------------- ------------ ------------ -------------- ----------- Total from investment operations (0.68) 0.36 0.13 (3.77) 1.03 ------------ ------------ ------------- ------------ ------------ Less Distributions From net investment income (0.02) 0.00 0.00 (0.01) 0.00 From net realized gain 0.00 0.00 0.00 (0.63) 0.00 ------------ ------------ ------------ ------------ ------------- Total distributions (0.02) 0.00 0.00 (0.64) 0.00 -------------- ------------- ------------- ------------ ------------ Net asset value, end of period $ 6.41 $ 7.11 $ 6.75 $ 6.62 $ 11.03 ============== ============= ============= ============ ============ Total Return (9.48)(b) 5.33% 1.96% (36.07)% 10.30% (b) Ratios and Supplemental Data Net assets, end of period (000) $ 2,044 $ 2,888 $ 2,294 $ 2,289 $ 1,334 Ratio of expenses to average net assets 1.25% (c) 1.25% 1.25% 1.25% 1.23% (c) Ratio of expenses to average net assets before reimbursement 1.29% (c) 1.36% 1.31% 1.30% 1.23% (c) Ratio of net investment income to average net assets (0.04)(c) 0.24% (0.20)% (0.15)% 0.00% Ratio of net investment income to average net assets before reimbursement (0.08)(c) 0.12% (0.26)% (0.20)% 0.00% Portfolio turnover rate 32.04% 94.69% 65.66% 86.42% 20.41% (c) (a) June 30, 1997 (commencement of operations) to October 31, 1997 (b) For periods of less than a full year, total returns are not annualized. (c) Annualized See Accompanying notes which are an integral part of the financial statement.
Corbin Small-Cap Value Fund Notes to Financial Statements April 30, 2001 (Unaudited) NOTE 1. ORGANIZATION The Corbin Small-Cap Value Fund (the "Fund") was organized as a series of the AmeriPrime Funds, an Ohio business trust (the "Trust") on June 10, 1997, and commenced operations on June 30, 1997. The Fund is registered under the Investment Company Act of 1940, as amended, as a diversified, open-end management investment company. The investment objective of the Fund is to provide long-term capital appreciation to its shareholders. The Declaration of 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 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 Advisor (as such term is defined in note 3 of this document), 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 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. 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 by the Board of Trustees of the Trust. 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 at least an annual basis. The Fund intends to distribute its net long-term capital gains and its net short-term capital gains at least once a year. Other - The Fund follows industry practice and records security transactions on the trade date. The specific identification method is used for determining gains or losses for financial statements and income tax purposes. Dividend income is recorded on the ex-dividend date, and interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the life of the respective securities. Generally accepted accounting principles require that permanent financial reporting tax differences relating to shareholder distributions be reclassified to paid-in capital. Corbin Small-Cap Value Fund Notes to Financial Statements April 30, 2001 - continued (Unaudited) NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES The Fund retains Corbin & Company (the "Advisor") to manage the Fund's investments. David A. Corbin, 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 and pays all of the expenses of the Fund except brokerage fees and 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 1.25% of the average daily net assets of the Fund. It should be noted that most investment companies pay their own operating expenses directly, while the Fund's expenses, except those specified above, are paid by the Advisor. For the six months ended April 30, 2001, the Advisor earned a fee of $15,897 from the Fund. The Advisor has contractually agreed through February 28, 2002, to reimburse the Fund for the fees and expenses of the disinterested Trustees, but only to the extent necessary to maintain the Fund's total annual operating expenses at 1.25% of average daily net assets. For the six months ended April 30, 2001, the Advisor reimbursed expenses of $542. The Fund retains Unified Fund Services, Inc., ("Unified") a wholly owned subsidiary of Unified Financial Services, Inc., 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. Prior to December 31, 2000, the Fund retained AmeriPrime Financial Securities, Inc., to act as the principal distributor of its shares. Effective December 31, 2000, AmeriPrime Financial Securities, Inc., sold substantially all of its assets to Unified Financial Securities, Inc. Both companies are wholly owned subsidiaries of Unified Financial Services, Inc. Effective December 31, 2000, the Fund retained Unified Financial Securities, Inc., to act as the principal distributor of its shares. There were no payments made to either distributor during the six months ended April 30, 2001. A Trustee and officer of the Trust may be deemed to be an affiliate of AmeriPrime Financial Securities Inc., and Unified Financial Securities, Inc. NOTE 4. INVESTMENTS For the six months ended April 30, 2001, purchases and sales of investment securities, other than short-term investments, aggregated $775,574 and $1,089,122, respectively. The gross unrealized appreciation for all securities totaled $95,671, and the gross unrealized depreciation for all securities totaled $780,942, for a net unrealized depreciation of $685,271. The aggregate cost of securities for federal income tax purposes at April 30, 2001, was $2,768,532. 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 Corbin Small-Cap Value Fund Notes to Financial Statements April 30, 2001 - continued (Unaudited) NOTE 6. RELATED PARTY TRANSACTIONS - continued Investment Company Act of 1940. As of April 30, 2001, Charles Schwab & Co., for the benefit of its customers, beneficially owned over 35% of the Fund. Marathon Value Portfolio Semi-Annual Report April 30, 2001 (Unaudited) Dear Shareholder: For a discussion of the Fund's performance during the six months ended April 30, 2001, please see the 'Management Discussion' in the semi-annual report. I have carefully tailored the Marathon Value Portfolio ("MVP") to give you a wide exposure to the different areas of investment promise including about a 7% foreign market exposure. Our average market capitalization exceeds 10 billion dollars and Morningstar puts us in the large capitalization blend sector. That means we invest in both "value" and "growth" stocks and that we own predominantly large liquid companies. Risk control is a major part of my job. You may refer to our web site at www.spectrumadvisory.com/mutual.html for more current information on the fund. In the first six months of the current fiscal year, I have invested an additional $75,000 of personal funds in MVP. I intend to add to my holdings in the current period as well. Thank you for your confidence in MVP and a special thanks to those who have referred friends to the Fund. Sincerely, Marc S. Heilweil President For a prospectus and more information, including charges and expenses, call toll free 1-800-788-6086. 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. Distributed by Unified Financial Securities, Inc. Management Discussion: You should be pleased that Marathon Value Portfolio ("Marathon") had another excellent six months. For the period ended April 30, 2001, total return of Marathon was +6.63%, while for the same period the S& P 500 was down -12.1%. Since inception, March 28, 2000, through April 30, 2001, Marathon's return was +18.87%; the S&P 500 total return for the same period was -16.10%. A comparison of the one-year period ended April 30, 2001 shows Marathon with a total return of +13.17% and the S&P 500 with a total return of -13.00. The latest six-month period also provided an excellent lesson in investment math. Many major favorites of the late 90's surged 30 to 50 percent from late March to early May. Their long-term holders did not come close to recouping their losses of the prior six months. The lesson - a 50% gain does not come close to recouping a 50% loss. The ideal investment in a public company has three elements: good management, a good business, and a good price. Not surprisingly, those investments that contributed most to our return in the last six months had at least two of those elements. Eaton Corporation is a manufacturer of highly engineered products for trucks and automobiles and also makes fluid power and control products. Its management has excelled in developing higher margin products in order to survive in these tough businesses. It also had a subsidiary that it spun off to shareholders, Axcelis Technology Inc. Axcelis has a leading position in the manufacturing of equipment to make transistors for use in semiconductors. When I examined this spin-off, I liked it and it too has performed well. First Data also helped returns as its superb business model received greater recognition. It makes a few pennies every time a customer or merchant engages in a non-cash transaction. Ric Duques has been a superb leader, and I am sorry to see him stepping down, but he has carefully groomed his successor. Ideas do not always originate with business sources, for example, my mother-in-law once worked as a representative for Elizabeth Arden, so I have often heard praise for its skin care products and cosmetics. When Unilever PLC, following a new management fad, dumped the business, I took a close look at the buyer now renamed Elizabeth Arden. I liked the management and the price of the stock and bought it. The latest six-month period has demanded careful winnowing of individual companies. You will recall that previously we had taken advantage of the spectacular prices available on the top-flight "old economy" manufacturers: 3M and Emerson Electric. No such obvious themes informed my selection in this latest six-month period. It is, more than ever, a "market of stocks" which suits us "to a tee". COMPARISON OF A $10,000 INVESTMENT IN THE MARATHON VALUE PORTFOLIO FUND AND THE S&P 500 INDEX Date Marathon Value Portfolio $11,792 S&P 500 $8,391 3/28/00 $10,000.00 $10,000.00 4/30/00 $10,526.00 $9,642.00 5/31/00 $10,644.00 $9,444.00 6/30/00 $10,558.00 $9,677.00 7/31/00 $10,644.00 $9,525.00 8/31/00 $10,987.00 $10,117.00 9/30/00 $10,773.00 $9,583.00 10/31/00 $11,148.00 $9,542.00 11/30/00 $10,987.00 $8,790.00 12/31/00 $11,513.00 $8,833.00 1/31/01 $11,867.00 $9,147.00 2/28/01 $11,706.00 $8,313.00 3/31/01 $11,330.00 $7,786.00 4/30/01 $11,792.00 $8,391.00 *This chart shows the value of a hypothetical initial investment of $10,000 in the Fund and the S&P 500 Index on March 28, 2000 (commencement of operations under Spectrum) and held through May 31, 2001. The S&P 500 Index is a widely recognized unmanaged index of common stock prices. Performance figures reflect the change in value of the stocks in the index, reinvestment of dividends and are not annualized. The index returns do not reflect expenses, which have been deducted from the Fund's return. Periods prior to 3/28/00, when another investment advisor managed the Fund, are not shown. THE FUND'S RETURN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF FUTURE RESULTS.
Marathon Value Portfolio Schedule of Investments - April 30, 2001 (Unaudited) Common Stocks - 76.0% Shares Value Aerospace - 0.2% Spacehab, Inc. (a) 4,200 12,222 ------------------ Apparel - 1.3% Jones Apparel Group, Inc. (a) 1,900 75,506 ------------------ Banking - 3.2% Mitsubishi Tokyo Financial Group, Inc. (c) 7,200 74,160 SouthTrust Corp. 1,200 57,060 US Bancorp 2,530 53,585 ------------------ 184,805 ------------------ Basic Materials & Chemicals - 2.8% PPG Industries, Inc. 1,600 85,040 Valspar Corp. 2,500 77,250 ------------------ 162,290 ------------------ Beverages - 1.6% Coca Cola Co. 2,000 92,380 ------------------ Biotechnology - 1.4% Amgen, Inc. 1,300 79,482 ------------------ Building Materials - 1.4% Masco Corp. 3,500 80,500 ------------------ Computer Hardware - 0.4% Compaq Computer Corp. 1,300 22,750 ------------------ Computer Services / Processing - 2.7% First Data Corp. 2,300 155,112 ------------------ Consumer Staples - Household Products - 4.3% Kimberly Clark Corp. 2,000 118,800 Procter & Gamble Co. 700 42,035 Tupperware Corp. 3,900 85,878 ------------------ 246,713 ------------------ Container & Packaging - 1.1% Temple Inland, Inc. 1,200 61,200 ------------------ Cosmetics & Toiletries - 1.5% Elizabeth Arden, Inc. (a) 4,800 87,840 ------------------ Marathon Value Portfolio Schedule of Investments - April 30, 2001 (Unaudited) Common Stocks - contined Shares Value Electronic Equipment - 8.3% CommScope, Inc. (a) 3,100 $ 58,528 Cooper Industries, Inc. 1,600 59,792 Eaton Corp. 1,300 95,693 Emerson 1,800 119,970 Invensys Plc (c) 7,500 32,250 SCI Systems, Inc. (a) 600 15,330 Texas Instruments, Inc. 1,600 61,920 Uniroyal Technology Corp. (a) 3,000 27,600 ------------------ 471,083 ------------------ Entertainment - 0.1% GC Companies, Inc. 5,000 8,350 ------------------ Equipment - Semi-Conductors - 1.9% Axcelis Technologies, Inc. (a) 7,186 107,862 ------------------ Financial Services - 0.7% Moody's Corp. 1,200 37,680 ------------------ Food & Beverage - 0.5% Tootsie Roll Industries, Inc. 618 29,887 ------------------ Grocery Stores - 2.2% Delhaize "Le Lion" S.A. Co. (c) 1,800 94,770 Weis Markets, Inc. 900 31,374 ------------------ 126,144 ------------------ Health Care - Diverse - 7.0% Abbott Laboratories 1,000 46,380 Becton, Dickinson & Co. 3,200 103,520 Bristol-Myers Squibb Co. 1,200 67,200 Merck & Co., Inc. 2,400 182,328 ------------------ 399,428 ------------------ Home Furnishings - 0.3% Leggett & Platt, Inc. 800 15,528 ------------------ Industrial Machinery - Photo Imaging - 1.9% Zebra Technologies Corp. - Class A (a) 2,500 108,150 ------------------ Insurance - 7.0% Chubb Corp., The 1,500 100,125 Berkshire Hathaway, Inc. - Class B 100 227,500 Tokio Marine & Fire Insurance Ltd. (c) 1,300 67,925 ------------------ 395,550 ------------------ Manufacturer - Diverse - 2.2% Lawson Products, Inc. 1,000 27,900 Minnesota Mining and Manufacturing Co. 800 95,208 ------------------ 123,108 ------------------ Marathon Value Portfolio Schedule of Investments - April 30, 2001 (Unaudited) Common Stocks - contined Shares Value Manufacturer - Capital Goods - 2.3% Dionex Corp. (a) 2,000 59,940 Hunt Corp. 1,500 7,875 Illinois Tool Works, Inc. 1,000 63,380 ------------------ 131,195 ------------------ Motels & Hotels - 0.5% Host Marriott Corp. 2,000 25,780 ------------------ Oil & Gas - 1.6% BP Amoco (c) 1,700 91,936 ------------------ Oil - Gas Drilling & Equipment - 2.3% Schumberger Limited 2,000 132,600 ------------------ Publishing - Newspapers - 1.4% Gannett Co., Inc. 1,200 77,460 ------------------ Real Estate - 6.4% Avatar Holdings, Inc. 1,500 37,500 Crescent Real Estate Equities Co. 6,000 142,740 Federal Realty Investment Trust 2,800 54,600 Post Properties, Inc. 2,900 106,894 Trizec Hahn Corp. 1,500 23,250 ------------------ 364,984 ------------------ Retail Stores - 2.1% Costco Wholesale Corp. (a) 2,700 94,311 Rite Aid Corp. 3,600 26,244 ------------------ 120,555 ------------------ Telecommunications - 2.2% CoreComm Limited (a) 3,500 805 BellSouth Corp. 2,800 117,488 Global TeleSystems, Inc. (a) 10,000 5,800 ------------------ 124,093 ------------------ Transportation - 3.2% Florida East Coast Industries, Inc. - Class A 2,200 68,200 Kriby Corp. 5,100 112,710 ------------------ 180,910 ------------------ TOTAL COMMON STOCKS (Cost $3,975,325) $ 4,333,083 ------------------ Principal Amount Value AGENCY OBLIGATIONS - 1.1% Federal Home Loan Mtg. Co., 7.00%, 03/11/2013 (Cost $60,115) 65,000 $ 64,922 ------------------ CORPORATE BONDS - 1.6% Avatar Holdings Note, 7.00%, 4/01/2005 (Cost $27,024) (a) 30,000 28,838 Comdisco, Inc., 6.00%, 1/03/2002 (Cost $63,436) 100,000 62,500 ------------------ Marathon Value Portfolio Schedule of Investments - April 30, 2001 (Unaudited) 91,338 ------------------ CORPORATE COMMERCIAL PAPER - 17.5% Heller Financial, 4.65%, 5/8/01 (Cost $1,000,000) 1,000,000 1,000,000 ------------------ MONEY MARKET SECURITIES - 5.3% Firstar Treasury Fund, 4.05% (b) (Cost $302,445) 302,445 302,445 ------------------ TOTAL INVESTMENTS - 101.5% (Cost $5,428,811) 5,791,788 ------------------ Liabilities in excess of Other Assets - (1.5%) (88,697) ------------------ TOTAL NET ASSETS - 100.0% $ 5,703,091 ================== (a) Non-income producing. (b) Variable rate security; the coupon rate shown represents the rate at April 30, 2001. (c) American Depositary Receipt See accompanying notes which are an integral part of the financial statements.
Marathon Value Portfolio Statement of Assets & Liabilities (Unaudited) April 30, 2001 Assets Investment in securities (Cost $5,428,811) $ 5,791,788 Dividends receivable 1,527 Interest receivable 4,567 Receivable for fund shares sold 12,200 ----------------- Total Assets 5,810,082 Liabilities Payable to custodian bank $ 5,069 Payable investments purchased 93,340 Accrued investment advisory fee payable 8,582 ----------------- Total Liabilities 106,991 ----------------- Net Assets $ 5,703,091 ================= Net Assets consist of: Paid - in capital $ 5,401,681 Accumulated undistributed net investment income 25,357 Accumulated net realized loss on security transactions (86,924) Net unrealized appreciation on investments 362,977 ----------------- Net Assets, for 518,953 shares $ 5,703,091 ================= Net Asset Value Net Assets Offering price and redemption price per share ($5,703,091/518,953) $ 10.99 ================= See accompanying notes which are an integral part of the financial statements.
Marathon Value Portfolio Statement of Operations (Unaudited) For the six months ended April 30, 2001 Investment Income Dividend income $ 27,378 Interest income 42,762 ------------------ Total Income 70,140 Expenses Investment advisory fee $ 28,322 Trustees' fees 680 ------------------ Total operating expenses 29,002 ------------------ Net Investment Income 41,138 ------------------ Realized & Unrealized Gain Net realized gain on securities transactions 83,045 Change in net unrealized appreciation on investment securities 187,078 ------------------ Net gain on investment securities 270,123 ------------------ Net increase in net assets resulting from operations $ 311,261 ================== See accompanying notes which are an integral part of the financial statements.
Marathon Value Portfolio Statement of Changes in Net Assets For the six months Year ended ended April 30, October 31, 2001 (Unaudited) 2000 ------------------------------- Increase (Decrease) in Net Assets Operations Net investment income $ 41,138 $ 19,574 Net realized gain on investment securities 83,045 180,290 Net realized (gain) loss on options transactions 0 (70,563) Change in net unrealized appreciation 187,078 128,612 ------------- --------------- Net increase in net assets resulting from operations 311,261 257,913 ------------- --------------- Distributions to shareholders From net investment loss (35,339) 0 From net realized gain 0 0 ------------- --------------- Total distributions (35,339) 0 ------------- --------------- Share Transactions Net proceeds from sale of shares 1,646,501 3,655,135 Shares issued in reinvestment of distributions (1,103) 0 Shares redeemed 0 (4,247,371) ------------- --------------- Net increase (decrease) in net assets resulting from share transactions 1,645,398 (592,236) ------------- --------------- Total increase (decrease) in net assets 1,921,320 (334,323) Net Assets Beginning of period 3,781,771 4,116,094 ------------- --------------- End of period [including accumulated net investment income of $41,138 and $19,574, respectively] $ 5,703,091 $ 3,781,771 ============= =============== See accompanying notes which are an integral part of the financial statements.
Marathon Value Portfolio Financial Highlights For the six months ended Year Year Period April 30, ended ended ended 2001 October 31, October 31, October 31, (Unaudited) 2000 1999 1998 (a) ------------------------ ---------- ----------- Selected Per Share Data Net asset value, beginning of period $ 10.38 $ 9.23 $ 8.48 $ 10.00 ----------- ---------- ---------- ----------- Income from investment operations Net investment income (loss) 0.92 0.08 (0.01) 0.02 Net realized and unrealized gain (loss) (0.22) 1.07 0.78 (1.54) ----------- ---------- ---------- ----------- Total from investment operations 0.70 1.15 0.77 (1.52) ----------- ---------- ---------- ----------- Less distributions From net investment income (loss) (0.09) 0.00 (0.02) 0.00 From realized gain 0.00 0.00 0.00 0.00 Return of capital 0.00 0.00 0.00 0.00 ----------- ---------- ---------- ----------- Net asset value, end of period $ 10.99 $ 10.38 $ 9.23 $ 8.48 =========== ========== ========== =========== Total Return 6.63% 11.48% (d) 9.04% (15.20)%(b) Ratios and Supplemental Data Net assets, end of period (000) $5,703 $3,782 $4,116 $3,259 Ratio of expenses to average net assets 1.28% (c) 1.42% (e) 1.48% 1.47% (c) Ratio of expenses to average net assets before reimbursement 1.28% (c) 1.49% 1.51% 1.50% (c) Ratio of net investment income (loss) to average net assets 1.81% (c) 0.85% (0.07)% 0.36% (c) Ratio of net investment income (loss) to average net assets before reimbursement 1.81% (c) 0.79% (0.11)% 0.33% (c) Portfolio turnover rate 44.59% 207.02% 140.37% 61.04% (c) (a) March 12, 1998 (commencement of operations) to October 31, 1998 (b) For periods of less than a full year, the total return is not annualized. (c) Annualized. (d) Effective March 28, 2000, the Fund obtained a new advisor. The total return from March 28, 2000 (date of change in advisor) through October 31, 2000 was 11.37%. (e) The rate for the fiscal year ended October 31, 2000 is higher than the rate in the current prospectus due to activity by the predecessor advisor. The predecessor advisor charged higher fees. See accompanying notes which are an integral part of the financial statements.
Marathon Value Portfolio Notes To Financial Statements April 30, 2001 (Unaudited) NOTE 1. ORGANIZATION Marathon Value Portfolio (the "Fund") was organized as a series of AmeriPrime Funds (the "Trust") on December 29, 1997 and commenced operations on March 12, 1998. The Trust is an open-end investment company established under the laws of Ohio by an Agreement and Declaration of Trust dated August 8, 1995 (the "Trust Agreement"). The Fund's investment objective is to provide long-term capital appreciation. The Trust Agreement permits the Board of Trustees (the "Board") to issue an unlimited number of shares of beneficial interest of agreement 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 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 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 by guidelines adopted 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. 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. 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 at least an annual basis. The Fund intends to distribute its net long-term capital gains and its net short-term capital gains at least once a year. Option writing - When the Fund writes an option; an amount equal to the premium received by the Fund is recorded as a liability and is subsequently adjusted to the current fair value of the option written. Premiums received from writing options that expire unexercised are treated by the Fund on the expiration date as realized gains from investments. The difference between the premium and the amount paid on effecting a closing purchase transaction, including brokerage commissions, is also treated as a realized gain, or if the Marathon Value Portfolio Notes To Financial Statements April 30, 2001 (Unaudited) NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - continued premium is less than the amount paid for the closing purchase transaction, as a realized loss. If a call option is exercised, the premium is added to the proceeds from the sale of the underlying security or currency in determining whether the Fund has realized a gain or loss. If a put option is exercised, the premium reduces the cost basis of the securities purchased by the Fund. The Fund as writer of an option bears the market risk of an unfavorable change in the price of the security underlying the written option. 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 differences relating to shareholder distributions be reclassified to paid-in capital. NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES The Fund retains Spectrum Advisory Services, Inc. (the "Advisor") to manage the Fund's investments. Marc S. Heilweil, 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 and pays all 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 the non-interested person trustees, Rule 12B-1 expenses, 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 computed and accrued daily and paid monthly at an annual rate of 1.25% of the average daily net assets of the Fund. It should be noted that most investment companies pay their own operating expenses directly, while the Advisor pays the Fund's expenses, except those specified above. For the period ended, April 30, 2001, the Advisor earned a fee of $8,582 from the Fund. The Advisor has contractually agreed to reimburse the Fund for the fees and expenses of the non-interested person trustees, but only to the extent necessary to maintain the Fund's total annual operating expense ratio at 1.28% of average daily net assets through February 28, 2006. A Trustee and the officers of the Trust are members of management and/or employees of Unified. The Fund has retained Unified Fund Services, Inc. ("Unified"), a wholly owned subsidiary of Unified Financial Services, Inc., 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. Prior to December 31, 2000, the Fund had retained AmeriPrime Financial Securities, Inc., to act as the principal distributor of its shares. Effective December 31, 2000, AmeriPrime Financial Securities, Inc. sold substantially all of its assets to Unified Financial Securities, Inc. Both companies are wholly owned subsidiaries of Unified Financial Services, Inc. Effective December 31, 2000, the Fund retained Unified Financial Securities, Inc. to act as the principal distributor of its shares. There were no payments made to Marathon Value Portfolio Notes To Financial Statements April 30, 2001 (Unaudited) NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - continued either distributor during the period ended April 30, 2001. A Trustee and officer of the Trust may be deemed to be an affiliate of AmeriPrime Financial Securities, Inc. and Unified Financial Securities, Inc. NOTE 4. INVESTMENTS For the period ended April 30, 2001, purchases and sales of investment securities, other than short-term investments, aggregated $2,109,884 and $765,571, respectively. As of April 30, 2001, the gross unrealized appreciation for all securities totaled $518,883 and the gross unrealized depreciation for all securities totaled $155,906 for a net unrealized appreciation of $362,977. The aggregate cost of securities for federal income tax purposes at April 30, 2001 was $5,428,811. 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 April 30, 2001, Charles Schwab & Co. owned of record in aggregate more than 68% of the Fund. AAM Equity Fund Semi-Annual Report April 30, 2001 (Unaudited)
AAM Equity Fund Schedule of Investments - April 30, 2001 (Unaudited) Common Stocks - 80.6% Shares Value Aircraft - 1.4% Northrop Grumman Corp. 950 $ 85,738 --------------- Beverages -1.6% Coca-Cola Co. 2,000 92,380 --------------- Biological Products (No Diagnostic Substances) -1.5% Amgen, Inc. (a) 1,500 91,710 --------------- Cable & Other Pay Television Service - 1.0% Liberty Media Corp. Class A (a) 3,550 56,800 --------------- Communications Equipment - 0.0% McData Corp. Class A (a) 46 1,050 --------------- Computer & Office Equipment - 2.9% International Business Machines Corp. 1,000 115,140 Hewlett-Packard Co. 2,000 56,860 --------------- 172,000 --------------- Computer Communications Equipment - 1.4% Cisco Systems, Inc. (a) 5,000 84,900 --------------- Computer Storage Devices - 2.0% EMC Corp. (a) 3,000 118,800 --------------- Converted Paper & Paperboard Products (No Containers/Boxes) - 1.4% Avery Dennison Corp. 1,500 84,105 --------------- Electric Services - 2.3% Dominion Resources, Inc. 2,000 136,980 --------------- Electronic & Other Electrical Equipment (No Computer Equip) - 2.0% General Electric Co. 2,500 120,675 --------------- Electronic Computers - 1.4% Sun Microsystems, Inc. (a) 5,000 85,600 --------------- Electronic Instruments - 3.0% Emerson Electric Co. 1,500 99,975 Koninklijke Phillips Electronics (c) 2,500 77,000 --------------- 176,975 --------------- Fire, Marine, Casualty Insurance - 3.6% American International Group, Inc. 1,250 102,250 Berkshire Hathaway, Inc. Class B (a) 50 113,750 --------------- 216,000 --------------- AAM Equity Fund Schedule of Investments - April 30, 2001 (Unaudited) Common Stocks - continued Shares Value Foods - 1.2% Sara Lee Corp. 3,500 $ 69,685 --------------- Heavy Construction Other Than Building Const - Contractors - 1.8% Ashland Inc. 2,500 107,650 --------------- Instruments For Measuring & Testing Of Electricity & Electronic Signals - 1.6% Agilent Technologies, Inc. (a) 2,500 97,525 --------------- Insurance - 1.7% Markel Corp. (a) 500 98,125 --------------- Malt Beverages - 1.3% Anheuser Busch Companies, Inc. 1,950 77,981 --------------- Mining, Quarrying Of Nonmetallic Minerals (No Fuels) - 1.5% Martin Marietta Materials, Inc. 2,000 91,940 --------------- National Commercial Banks - 6.7% Bank of America Corp. 1,325 74,200 BB&T Corp. 3,500 123,970 Citigroup Inc. 2,000 98,300 Suntrust Banks, Inc. 1,600 101,600 --------------- 398,070 --------------- Oil, Gas, Field Services - 1.7% Schlumberger Ltd. 1,500 99,450 --------------- Personal Credit Institutions - 2.1% Capital One Financial Corp. 2,000 125,720 --------------- Petroleum Refining - 6.0% BP Amoco Corp. 1,640 88,691 Chevron Corp. 1,000 96,560 Conoco, Inc. - Class A 3,000 90,870 Murphy Oil Corp. 925 75,850 --------------- 351,971 --------------- Pharmaceutical Preparations - 8.2% American Home Product 1,800 103,950 Bristol Meyers Squibb Co. 1,750 98,000 Johnson & Johnson 1,000 96,480 Merck & Company, Inc. 1,200 91,164 Schering-Plough Corp. 2,500 96,350 --------------- 485,944 --------------- Primary Production Of Aluminum - 2.1% Alcoa, Inc. 3,000 124,200 --------------- AAM Equity Fund Schedule of Investments - April 30, 2001 (Unaudited) Common Stocks - continued Shares Value Retail-Drug Stores & Proprietary Stores -1.8% Walgreen Co. 2,500 $ 106,950 --------------- Retail-Radio TV & Consumer Electronics Stores - 2.3% Circuit City Stores, Inc. 9,000 135,450 --------------- Rolling Drawing & Extruding Of Nonferrous Metals - 2.0% Tredegar Corp. 6,000 117,300 --------------- Semiconductors & Related Devices 1.6% Intel Corp. 3,000 92,730 --------------- Services-Computer Programming, Data Processing, Etc. - 1.3% AOL-Time Warner, Inc. (a) 1,500 75,750 --------------- Services-Miscellaneous Amusement & Recreation - 1.5% Walt Disney Company 3,000 90,750 --------------- Services-Prepackaged Software - 2.3% Microsoft Corp. (a) 2,000 135,500 --------------- Ship & Boat Building & Repairing - 1.9% General Dynamics Corp. 1,500 115,620 --------------- Telephone & Telegraph Apparatus - 0.0% Avaya, Inc. (a) 85 1,257 --------------- Telephone Communications (No Radio Telephone) - 1.1% AT&T Corp. 3,000 66,840 --------------- Telephone Services - 1.7% SBC Communications, Inc. 2,500 103,125 --------------- Wholesale-Groceries & Related Products - 1.7% Sysco Corp. 3,500 98,420 --------------- Total Common Stock (Cost $4,310,010) $ 4,791,666 --------------- Principal Amount Value Money Market Securities - 22.2% Firstar Treasury Fund, 3.79% (b) (Cost $1,320,282) $1,320,282 $ 1,320,282 --------------- TOTAL INVESTMENTS (Cost $5,630,292) - 102.8% 6,111,948 --------------- Other assets less liabilities - (2.8)% (169,639) --------------- Total Net Assets - 100.0% $ 5,942,309 =============== (a) Non-income producing. (b) Variable rate security; the coupon rate shown represents the rate at April 30, 2001. (c) American Depository Receipt. See accompanying notres which are an integral part of the financial statements.
AAM Equity Fund Statement of Assets and Liabilities (Unaudited) April 30, 2001 Assets Investment in securities, at value (cost $5,630,292) $ 6,111,948 Cash 18 Dividends receivable 2,492 Interest receivable 2,606 Receivable for investments sold 42,869 Receivable from advisor 4,554 Deferred organization costs 11,442 ------------------- Total assets 6,175,929 Liabilities Payable for investments purchased $ 222,699 Accrued investment advisory fee payable 5,036 Other payables and accrued expenses 5,885 ------------------- Total liabilities 233,620 Net Assets $ 5,942,309 =================== Net Assets consist of: Paid-in capital $ 5,637,341 Accumulated undistributed net investment income 12,814 Accumulated undistributed net realized loss on investments (189,502) Net unrealized appreciation on investments 481,656 ------------------- Net Assets, for 546,270 shares $ 5,942,309 =================== Net Asset Value Net Assets Offering price and redemption price per share ($5,942,309/546,270) $ 10.88 =================== See accompanying notres which are an integral part of the financial statements.
AAM Equity Fund Statement of Operations for the six months ended April 30, 2001 (Unaudited) Investment Income Dividend Income $ 29,805 Interest Income 13,736 ------------------- Total Income 43,541 Expenses Investment advisory fee 28,971 Organizational expenses 5,036 Trustees' fees 548 ------------------- Total expenses before reimbursement 34,555 Reimbursed expenses (5,584) ------------------- Total operating expenses 28,971 ------------------- Net Investment Income 14,570 ------------------- Realized & Unrealized Gain (Loss) Net realized loss on investment securities (67,136) Change in net unrealized depreciation on investment securities (216,858) ------------------- Net loss on investment securities (283,994) ------------------- Net increase in net assets resulting from operations $ (269,424) =================== See accompanying notres which are an integral part of the financial statements.
AAM Equity Fund Statement of Changes in Net Assets Six months ended Year April 30, ended 2001 October 31, (Unaudited) 2000 ------------------ ----------------- Increase (Decrease) in Net Assets Operations Net investment income $ 14,570 $ 10,114 Net realized loss on investment securities (67,136) (30,026) Change in net unrealized appreciation (depreciation) (216,858) 230,800 ------------------ ----------------- Net increase (decrease) in net assets resulting from operations (269,424) 210,888 ------------------ ----------------- Distributions to shareholders From net investment income (11,870) (16,393) From net realized gains 0 0 ------------------ ----------------- Total distributions (11,870) (16,393) Share Transactions Net proceeds from sale of shares 1,224,766 1,722,471 Shares issued in reinvestment of dividends 0 10,990 Shares redeemed (295,693) (970,172) ------------------ ----------------- Net increase in net assets resulting from share transactions 929,073 763,289 ------------------ ----------------- Total increase in net assets 647,779 957,784 Net Assets Beginning of period 5,294,530 4,336,746 ------------------ ----------------- End of period [including accumulated undistributed net investment income of $10,114 and $14,570, respectively] $ 5,942,309 $ 5,294,530 ================== ================= See accompanying notres which are an integral part of the financial statements.
AAM Equity Fund Financial Highlights Six months ended Year Year Period April 30, ended ended ended 2001 October 31, October 31, October 31, (Unaudited) 2000 1999 1998 (c) -------------- -------------- -------------- ------------ Selected Per Share Data Net asset value, beginning of period $ 11.53 $ 10.99 $ 9.43 $ 10.00 -------------- -------------- -------------- ------------ Income from investment operations Net investment income 0.03 0.03 0.05 0.03 Net realized and unrealized gain (loss) (0.65) 0.55 1.53 (0.60) -------------- -------------- ------------ -------------- Total from investment operations (0.62) 0.58 1.58 (0.57) -------------- -------------- -------------- ------------ Distribution to shareholders from: Net investment income (0.03) (0.04) (0.02) 0.00 Net realized gains 0.00 0.00 0.00 0.00 -------------- -------------- ------------ -------------- Total distributions (0.03) (0.04) (0.02) 0.00 -------------- -------------- -------------- ------------ Net asset value, end of period $ 10.88 $ 11.53 $ 10.99 $ 9.43 ============== ============== ============== ============ Total Return (5.41)%(b) 5.28% 16.74% (5.70)%(b) Ratios and Supplemental Data Net assets, end of period (000) $5,942 $5,295 $4,337 $2,852 Ratio of expenses to average net assets 1.15% (a) 1.15% 1.15% 1.14% (a) Ratio of expenses to average net assets before reimbursement 1.37% (a) 1.35% 1.35% 1.40% (a) Ratio of net investment income to average net assets 0.58% (a) 0.22% 0.43% 0.90% (a) Ratio of net investment income to average net assets before reimbursement 0.36%b(a) 0.02% 0.23% 0.64% (a) Portfolio turnover rate 37.54% 32.79% 27.34% 14.41% (a) (a) Annualized (b) For periods of less than a full year, the total return is not annualized. (c) June 30, 1998 (commencement of operations) to October 31, 1998 See accompanying notes which are an integral part of the financial statements.
AAM Equity Fund Notes to Financial Statements April 30, 2001 (Unaudited) NOTE 1. ORGANIZATION AAM Equity Fund (the "Fund") was organized as a series of the AmeriPrime Funds, an Ohio business trust (the "Trust"), on June 30, 1998 and commenced operations on June 30, 1998. The Trust is established under the laws of Ohio by an Agreement and Declaration of Trust (the "Trust Agreement") dated August 8, 1995. The Fund is registered under the Investment Company Act of 1940, as amended, as a diversified open-end management investment company. The Fund's investment objective is to provide long-term capital 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 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 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. 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. 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 at least an annual basis. The Fund intends to distribute its net long-term capital gains and its net short-term capital gains at least once a year. Other - The Fund follows industry practice and records security transactions on the trade date. The specific identification method is used for determining gains or losses for financial statements and income tax purposes. Dividend income is recorded on the ex-dividend date and interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the life of the respective securities. Generally accepted accounting principles require that permanent financial ___ reporting tax differences ___ relating to shareholder distributions be reclassified to paid-in capital. AAM Equity Fund Notes to Financial Statements April 30, 2001 (Unaudited) - continued NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES The Fund retains Appalachian Asset Management, Inc. (the "Advisor") to manage the Fund's investments. Its President, Knox H. Fuqua, controls the Advisor. Mr. Fuqua 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 and pays all of the expenses of the Fund except brokerage fees and 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 1.15% 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 months ended, April 30, 2001 the Advisor earned a fee of $28,971 from the Fund. The Advisor has contractually agreed to reimburse fees and expenses of the non-interested person Trustees incurred by the Fund through February 28, 2002, but only to the extent necessary to maintain the Fund's total annual operating expenses at 1.15% of average daily net assets. For the six months ended April 30, 2001, the Advisor reimbursed expenses of $5,584. 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. Prior to December 31, 2000, the Fund retained AmeriPrime Financial Securities, Inc. to act as the principal distributor of its shares. Effective December 31, 2000, AmeriPrime Financial Securities, Inc. sold substantially all of its assets to Unified Financial Securities, Inc. Both companies are wholly owned subsidiaries of Unified Financial Services, Inc. Effective December 31, 2000, the Fund retained Unified Financial Securities, Inc. to act as the principal distributor of its shares. There were no payments made to either distributor during the six months ended April 30, 2001. A Trustee and officer of the Trust may be deemed to be an affiliate of AmeriPrime Financial Securities Inc. and Unified Financial Securities, Inc. NOTE 4. INVESTMENTS For the six months ended April 30, 2001, purchases and sales of investment securities, other than short-term investments, ___ aggregated $1,072,358 and $856,907, respectively. At April 30, 2001, the unrealized appreciation for all securities totaled $715,051 and the gross unrealized depreciation for all securities totaled $233,395 for a net unrealized appreciation of $481,656. The aggregate cost of securities for federal income tax purposes at April 30, 2001 was $5,630,292. 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 April 30, 2001, National Financial Services Corp. owned of record in aggregate more than 68% of the Fund. Carl Domino Global Equity Income Fund Semi-Annual Report April 30, 2001 (Unaudited) Carl Domino Global Equity Income Fund Schedule of Investments - April 30, 2001 (Unaudited) Common Stocks - 94.0% Shares Value Aircraft - 4.9% Bombardier, Inc. Class B (a) 1,100 15,862 Northrop Grumman Corp. 400 36,100 ------------ 51,962 ------------ Air Transportation, Scheduled - 2.6% British Airways Plc (c) 550 27,858 ------------ Beverages - 2.5% Diageo Plc (c) 625 26,188 ------------ Books: Publishing or Publishing & Printing - 2.5% McGraw-Hill Companies, Inc. 400 25,912 ------------ Bottled & Canned Soft Drinks & Carbonated Water - 2.0% Cadbury Schweppes Plc (c) 870 21,707 ------------ Calculating & Accounting Machines - 3.7% Diebold, Inc. 1,200 39,108 ------------ Commercial Banks - 2.4% Barclays PLC (c) 200 25,820 ------------ Computer & Office Equipment - 2.7% Hewlett-Packard Co. 990 28,146 ------------ Construction, Mining & Materials Handling Machinery - 3.1% Dover Corp. 840 32,819 ------------ Converted Paper & Paperboard Products - 1.3% Avery Dennison Corp. 250 14,018 ------------ Electric Services - 6.4% Duke Energy Corp. 700 32,732 Reliant Energy, Inc. 700 34,685 ------------ 67,417 ------------ Electronic & Other Electrical Equipment (No Computers) - 2.0% Koninklijke Phillips Electronics NV (c) 700 21,560 ------------ Fire Marine & Casualty Insurance - 1.4% SAFECO Corp. 550 14,685 ------------ Food and Kindred Products - 2.0% Unilever PLC (c) 714 21,684 ------------ Instruments for Measuring & Testing Electricity - 1.0% Snap-On, Inc. 350 10,150 ------------ Carl Domino Global Equity Income Fund Schedule of Investments - April 30, 2001 (Unaudited) Common Stocks - continued Shares Value Life Insurance - 2.7% AXA (c) 300 17,550 ING Groep N.V. (c) 154 10,624 ------------ 28,174 ------------ Miscellaneous Electrical Machinery & Equipment - 1.8% CAE, Inc. (c) 1,200 19,644 ------------ Motor Vehicles Parts & Accessories - 1.4% Honeywell International, Inc. 300 14,664 ------------ National Commercial Banks - 2.8% First Union Corp. 350 10,490 J.P. Morgan Chase & Co. 225 10,796 Royal Bank of Canada 600 17,100 U.S. Bankcorp 1,400 29,652 ------------ 68,038 ------------ Natural Gas Transmission - 2.8% Williams Companies, Inc. 700 29,519 ------------ Newspapers: Publishing or Publishing & Printing - 2.2% News Corp. Ltd. (c) 600 23,040 ------------ Perfumes, Cosmetics & Other Toilet Preparations - 2.0% Avon Products, Inc. 500 21,160 ------------ Petroleum Refining - 8.6% Conoco, Inc. - Class B 365 11,103 Royal Dutch Petroleum Co. (e) 400 23,812 Texaco, Inc. 200 14,456 USX-Marathon Group, Inc. 1,300 41,548 ------------ 90,919 ------------ ------------ Pharmaceutical Preparations - 2.8% American Home Products Corp. 200 11,550 Glaxo SmithKline Plc (c) 341 18,267 ------------ ------------ 29,817 ------------ Plastic Mail, Synthetic Resin/Rubber, Cellulose - 0.7% DuPont (E.I.) de NeMours & Co. 176 7,953 ------------ Services - Personal Services - 2.6% Block (H&R), Inc. 500 27,500 ------------ Services - Prepackaged Software - 1.5% SAP Aktiengesellschaft (c) 400 16,120 ------------ Carl Domino Global Equity Income Fund Schedule of Investments - April 30, 2001 (Unaudited) Common Stocks - continued Shares Value Semiconductors & Related Devices - 3.1% Maxim Integrated Products, Inc. 638 32,602 ------------ Soap, Detergent, Cleaning Preparations, Perfumes - 1.7% Procter & Gamble Co. 300 18,015 ------------ Specialty Cleaning, Polishing & Sanitation Preparations - 2.6% The Clorox Company 850 27,055 ------------ Telephone Communications (No Radio Telephone) - 7.7% British Telecommunications PLC (c) 150 12,135 Nippon Telegraph & Telephone Corp. (c) 400 13,168 SBC Communications, Inc. 500 20,625 Telecom Italia S.p.A. (c) 200 22,050 Verizon Communications 200 11,013 Williams Communications Group Inc. (a) 576 2,601 ------------ 81,592 ------------ Trucking & Courier Services - 2.7% United Parcel Service, Inc. - Class B 500 28,725 ------------ TOTAL COMMON STOCKS (Cost $987,550) $ 993,571 ------------ Principal Amount Value Money Market Securities - 17.5% Firstar Treasury Fund, 3.79% (b) (Cost $185,375) $ 185,375 $ 185,375 ------------ TOTAL INVESTMENTS - 111.5% (Cost $1,172,925) 1,178,946 ------------ Liabilities in excess of other assets - (11.5)% (121,733) ------------ TOTAL NET ASSETS - 100.0% $ 1,057,213 ============ ============ (a) Non-income producing (b) Variable rate security; the coupon rate shown represents the rate at April 30, 2001 (c) American Depositary Receipt (d) Ordinary Shares (e) New York Registry Shares Carl Domino Global Equity Income Fund April 30, 2001 Statement of Assets & Liabilities (Unaudited) Assets Investment in securities, at value (cost $1,172,925) $ 1,178,946 Dividends receivable 2,429 Interest receivable 221 ------------ Total assets 1,181,596 Liabilities Accrued investment advisory fee payable 1,191 Payable to custodian 123,192 ------------ Total liabilities 124,383 ------------ Net Assets $ 1,057,213 ============ Net Assets consist of: Paid in capital 1,016,356 Accumulated undistributed net investment income 1,626 Accumulated net realized gain on investments 33,210 Net unrealized appreciation on investments 6,021 ------------ Net Assets, for 92,110 shares $ 1,057,213 ============ Net Asset Value Net Assets Offering price and redemption price per share ($1,057,213/ 92,110) $11.48 ============ Carl Domino Global Equity Income Fund Statement of Operations for the six months ended April 30, 2001 (Unaudited) Investment Income Dividend income $ 12,399 Interest income 2,572 ------------- Total Income 14,971 ------------- Expenses Investment advisory fee 7,756 Foreign tax withholding 73 Trustees' fees 375 ------------- Total expenses before reimbursement 8,204 Reimbursed expenses (375) ------------- Total operating expenses 7,829 ------------- Net Investment Income 7,142 ------------- Realized & Unrealized Gain (Loss) Net realized gain on investment securities 50,245 Change in net unrealized appreciation (depreciation) on investment securities (84,337) ------------- Net realized and unrealized gain (loss) on investment securities (34,092) ------------- Net increase (decrease) in net assets resulting from operations $(26,950) ============= Carl Domino Global Equity Income Fund Statement of Changes In Net Assets For the six months ended Year ended April 30, 2001 October 31, (Unaudited) 2000 ------------ ----------- Increase (Decrease) in Net Assets Operations Net investment income $ 7,142 $ 10,509 Net realized gain (loss) on investment securities 50,245 2,293 Change in net unrealized appreciation (depreciation) (84,337) 33,253 ------------ ----------- Net increase (decrease) in net assets resulting from operations (26,950) 46,055 ------------ ----------- Distributions From net investment income (12,962) (15,991) From net realized gain (2,292) 0 ------------ ----------- Total distributions (15,254) (15,991) ------------ ----------- Share Transactions Net proceeds from sale of shares 0 0 Shares issued in reinvestment of distributions 13,441 15,991 Shares redeemed (17,161) (268,401) ------------ ----------- Net increase (decrease) in net assets resulting from share transactions (3,720) (252,410) ------------ ----------- Total increase (decrease) in net assets (45,924) (222,346) Net Assets Beginning of period 1,103,137 1,325,483 ------------ ----------- End of period $ 1,057,213 $ 1,103,137 ============ =========== Capital Share Transactions Shares sold 0 123,489 Shares issued in reinvestment of distributions 1,479 0 Shares redeemed (1,162) (10,000) ------------ ----------- Net increase (decrease) from capital transactions 317 113,489 ============ =========== Carl Domino Global Equity Income Fund Financial Highlights
Six Months ended April 30, 2001 Year ended Period ended (Unaudited) October 31, October 31, 200O 1999 (a) ---------- --------------------------- Selected Per Share Data Net asset value, beginning of period $ 11.94 $ 11.68 $ 10.00 ---------- ---------- ------------ Income from investment operations Net investment income 0.08 0.10 0.14 Net realized and unrealized gain (loss) (0.10) 0.30 1.54 ---------- ------------ ---------- ---------- ------------ Total from investment operations (0.02) 0.40 1.68 ---------- ---------- ------------ Distributions to shareholders From net investment income (0.14) (0.14) 0.00 From net realized gain (0.30) 0.00 0.00 ---------- ---------- ------------ Total distributions (0.44) (0.14) 0.00 ---------- ---------- ------------ Net asset value, end of period $ 11.48 $ 11.94 $ 11.68 ========== ========== ============ Total Return -2.46% (b) 3.42% 16.80% (b) Ratios and Supplemental Data Net assets, end of period (000) $ 1,057 $1,057 $1,325 Ratio of expenses to average net assets 1.50% (c) 1.50% 1.50% (c) Ratio of expenses to average net assets before reimbursement 1.58% (c) 1.59% 1.55% (c) Ratio of net investment income to average net assets 1.45% (c) 0.83% 1.42% (c) Ratio of net investment income to average net assets before reimbursement 1.38% (c) 0.74% 1.37% (c) Portfolio turnover rate 45.24% 11.65% 28.34% (c) (a) December 31, 1998 (commencement of operations) to October 31, 1999 (b) For periods of less than a full year, total returns are not annualized (c) Annualized
Carl Domino Global Equity Income Fund Notes to Financial Statements April 30, 2001 (Unaudited) NOTE 1. ORGANIZATION Carl Domino Global Equity Income Fund (the "Fund") was organized as a series of the AmeriPrime Funds (the "Trust) on October 28, 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 diversified open-end management investment company. The Fund's investment objective is to provide long-term growth of capital together with current income. 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 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 adviser'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 adviser determines the last bid price does not accurately reflect the current value or when restricted securities are being valued, such securities are valued as determined in good faith by the adviser, in conformity with guidelines adopted by and subject to review of the Board. Fixed income securities generally are valued by using market quotations, but may be valued on the basis of prices furnished by a pricing service when the adviser believes such prices accurately reflect the fair market value of such securities. A pricing service utilizes electronic data processing techniques based on yield spreads relating to securities with similar characteristics to determine prices for normal institutional-size trading units of debt securities without regard to sale or bid prices. If the adviser decides that a price provided by the pricing service does not accurately reflect the fair market value of the securities, when prices are not readily available from a pricing service or when restricted or illiquid securities are being valued, securities are valued at fair value as determined in good faith by the adviser, in conformity with guidelines adopted by and subject to review of the Board. 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. Carl Domino Global Equity Income Fund Notes to Financial Statements April 30, 2001 (Unaudited) - continued NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - continued Federal Income Taxes - The Fund intends to qualify each year as a "regulated investment company" under the Internal Revenue Code of 1986, as amended. By so qualifying, the Fund will not be subject to federal income taxes to the extent that it distributes substantially all of its net investment income and any realized capital gains. Dividends and Distributions - The Fund intends to 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. NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES The Fund has retained Northern Trust Value Investors (the "Adviser"); a division of Northern Trust Investments, Inc., to manage the Fund's investments. Bruce Honig, is the portfolio manager 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 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, Rule 12b-1 expenses and extraordinary expenses or non-recurring expenses that may arise. As compensation for its management services and agreement to pay the Fund's expenses, the Fund is obligated to pay the Adviser a fee of 1.50% 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 six months ended, April 30, 2001, the Adviser received a fee of $8,470 from the Fund. The Adviser has contractually agreed to reimburse the Fund for the fees and expenses of the non-interested person trustees incurred by the Fund through February 28, 2002, but only to the extent necessary to maintain the Fund's total annual operating expenses at the rate of 1.50% of average daily net assets. For the six months ended April 30, 2001, the Adviser reimbursed expenses of $375. The Fund has retained Unified Fund Services, Inc. ("Unified"), a wholly owned subsidiary of Unified Financial Services, Inc., to manage the Fund's business affairs and Carl Domino Global Equity Income Fund Notes to Financial Statements April 30, 2001 (Unaudited) - continued NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - continued provide the Fund with administrative, transfer agency, and fund accounting services, including all regulatory reporting and necessary office equipment and personnel. The Adviser 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. Prior to December 31, 2000, the Fund had retained AmeriPrime Financial Securities, Inc. to act as the principal distributor of its shares. Effective December 31, 2000, AmeriPrime Financial Securities, Inc. sold substantially all of its assets to Unified Financial Securities, Inc. Both companies are wholly owned subsidiaries of Unified Financial Services, Inc. Effective December 31, 2000, the Fund retained Unified Financial Securities, Inc. to act as the principal distributor of its shares. There were no payments made to either distributor during the six months ended April 30, 2001. A Trustee and officer of the Trust may be deemed to be an affiliate of AmeriPrime Financial Securities Inc. and Unified Financial Securities, Inc. NOTE 4. INVESTMENTS For the six months ended April 30, 2001, purchases and sales of investment securities, other than short-term investments, aggregated $480,130 and $572,365, respectively. As of April 30, 2001, the gross unrealized appreciation for all securities totaled $97,995 and the gross unrealized depreciation for all securities totaled $91,974 for a net unrealized appreciation of $6,021. The aggregate cost of securities for federal income tax purposes at April 30, 2001 was $1,172,925. 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. Carl Domino Global Equity Income Fund Notes to Financial Statements April 30, 2000 (Unaudited) - continued NOTE 6. RELATED PARTY TRANSACTIONS The Adviser 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 April 30, 2001, Carl J. Domino beneficially owned or controlled, in aggregate, more than 98% of the Fund. Carl Domino Growth Fund Semi-Annual Report April 30, 2001 (Unaudited) Carl Domino Growth Fund Schedule of Investments - April 30, 2001 (Unaudited) Common Stocks - 84.7% Shares Value Aircraft - 2.4% Northrop Grumann 280 $ 25,270 ------------ Calculating Services - Computer - 2.2% Automatic Data Processing, Inc. 440 23,870 ------------ Cogeneration Services & Small Power Producers - 1.6% AES Corporation (a) 360 17,161 ------------ Computer & Office Equipment - 3.1% International Business Machines Inc. 290 33,391 ------------ Crude Petroleum & Natural Gas - 2.7% Devon Energy Group 500 29,505 ------------ Electromedical & Electrotherapeutic Apparatus - 6.7% Medtronic Inc. 1,620 72,252 ------------ Electronic Computers - 2.5% Sun Microsystems, Inc. (a) 1,600 27,392 ------------ Life Insurance - 2.1% American International Group 270 22,086 ------------ Malt Beverages - 1.9% Anheuser Busch Companies, Inc. 500 19,995 ------------ National Commercial Banks - 9.1% Citigroup, Inc. 850 41,778 MBNA Corp. 1,000 35,650 US Bankcorp 950 20,121 ------------ 97,549 ------------ Pharmaceutical Preparations - 5.5% ELAN Group Plc (a) 490 24,574 Johnson & Johnson, Inc. 360 34,733 ------------ 59,307 ------------ Radio Telephone Communications - 1.7% Vodafone Group ADR 600 18,168 ------------ Retail - Lumber & Other Building Materials Dealers - 6.0% Home Depot Inc. 1,365 64,292 ------------ Retail-Variety Stores - 5.0% Wal-Mart Stores Inc. 1,030 53,292 ------------ Semiconductors & Related Devices - 5.8% Intel Corp. 2,000 61,820 ------------ Services, Computer Programming, Data Processing - 3.1% AOL Time Warner (a) 660 33,330 ------------ Services - Prepackaged Software - 10.5% Microsoft Corp. (a) 930 63,008 Oracle Corp. (a) 3,080 49,773 ------------ 112,781 ------------ Ship & Boat Building & Repair - 2.2% General Dynamics Corp. 300 23,124 ------------ Surety Insurance - 4.8% MGIC Investment Corp. 800 51,992 ------------ Telephone & Telegraph Apparatus - 1.8% Tellabs Inc. (a) 540 18,959 ------------ Telephone Communications (No Radio Telephone) - 4.0% Nokia Corp. 760 25,984 Worldcom Inc. (a) 940 17,155 ------------ 43,139 ------------ TOTAL COMMON STOCKS (Cost $993,688) 908,675 ------------ Principal Amount Value Money Market Securities - 15.3% Firstar Treasury Fund, 3.79% (b) (Cost $163,979) $ 163,979 163,979 ------------ TOTAL INVESTMENTS - 100.0% (Cost $1,157,667) 1,072,654 ------------ Other assets less liabilities - 0.0% 744 ------------ TOTAL NET ASSETS - 100.0% $ 1,073,398 ============ (a) Non-income producing (b) Variable rate security; the coupon rate shown represents the rate at April 30, 2001. (c) American Depositary Receipt Carl Domino Growth Fund April 30, 2001 Statement of Assets & Liabilities (Unaudited) Assets Investment in securities, at value (cost $1,157,667) $ 1,072,653 Cash $ 1,266 Interest receivable 606 Dividends receivable 84 ------------- Total assets 1,074,609 Liabilities Accrued investment advisory fee 1,212 ------------ Total liabilities 1,212 ------------- Net Assets $ 1,073,397 ============= Net Assets consist of: Paid in capital $ 1,159,339 Accumulated net investment loss (4,372) Accumulated net realized loss on investments 3,443 Net unrealized depreciation on investments (85,013) ------------- Net Assets, for 115,008 shares $ 1,073,397 ============= Net Asset Value Net Assets Offering price and redemption price per share ($ 1,073,397/ 115,008) $ 9.33 ============= Carl Domino Growth Fund Statement of Operations for the six months ended April 30, 2001 (Unaudited) Investment Income Dividend income $ 2,452 Interest income 1,646 ------------ Total Income 4,098 Expenses Investment advisory fee $ 8,470 Trustees' fees 375 ------------ Total expenses before reimbursement 8,845 Reimbursed expenses (375) ------------ Total operating expenses 8,470 ------------ Net Investment Loss (4,372) ------------ Realized & Unrealized Gain (Loss) Net realized gain (loss) on investment securities 62,425 Change in net unrealized appreciation (depreciation) on investment securities (305,571) ----------- Net realized and unrealized gain (loss) on investment securities (243,146) ------------ Net increase (decrease) in net assets resulting from operations $ (247,518) ============ Carl Domino Growth Fund Statement of Changes In Net Assets For the six For the months ended Year ended April 30, October 31, 2001 2000 (Unaudited) ------------ ------------ Increase/(Decrease) in Net Assets Operations Net investment loss $ (4,372) $ (17,034) Net realized gain (loss) on investment securities 62,425 (37,616) Change in net unrealized appreciation (depreciation) (305,571) 143,522 ----------- ----------- Net increase (decrease) in net assets resulting from operations (247,518) 88,872 ----------- ----------- Distributions From net investment income 0 0 From net realized gain 0 0 ----------- ----------- ----------- ----------- Total distributions 0 0 ----------- ----------- Share Transactions Net proceeds from sale of shares 4,625 106,000 Shares issued in reinvestment of dividends 0 0 Shares redeemed 0 (49,372) ----------- ----------- Net increase in net assets resulting from share transactions 4,625 56,628 ----------- ----------- Total increase (decrease) in net assets (242,893) 145,500 Net Assets Beginning of period 1,316,290 1,170,790 ----------- ----------- End of period $ 1,073,397 $ 1,316,290 =========== =========== Capital Share Transactions Shares sold 460 8,914 Shares issued in reinvestment of distributions 0 0 Shares repurchased 0 (3,769) ----------- ----------- Net increase from capital transactions 460 5,145 =========== ===========
Carl Domino Growth Fund Financial Highlights For the For the For the period ended Year ended period ended April 30, 2001 October 31, October 31, (Unaudited) 2000 1999 (c) ----------- ----------- ----------- Selected Per Share Data Net asset value, beginning of period $ 11.49 $ 10.70 $ 10.00 ----------- ----------- ----------- Income from investment operations: Net investment loss (0.04) (0.15) (0.09) Net realized and unrealized gain (loss) (2.12) 0.94 0.79 ----------- ----------- ----------- ----------- ----------- ----------- Total from investment operations (2.16) 0.79 0.70 ----------- ----------- ----------- Less distributions: From net realized gain 0.00 0.00 0.00 From net investment income 0.00 0.00 0.00 ----------- ----------- ----------- Total distributions 0.00 0.00 0.00 ----------- ----------- ----------- Net asset value, end of period $ 9.33 $ 11.49 $ 10.70 =========== =========== =========== Total Return (18.87)(a) 7.38% 7.00%(a) Ratios and Supplemental Data Net assets, end of period (000) $ 1,073 $1,316 $1,171 Ratio of expenses to average net assets 1.50% (b) 1.50% 1.50% (b) Ratio of expenses to average net assets before reimbursement 1.56% (b) 1.56% 1.56% (b) Ratio of net investment income (loss) to average net assets (0.77)%(b) (1.24)% (0.99)(b) Ratio of net investment income (loss) to average net assets before reimbursement (0.84)%(b) (1.30)% (1.06)(b) Portfolio turnover rate 26.27% 25.30% 34.37%(b) (a) For periods of less than a full year, the total return is not annualized. (b) Annualized (c) December 31, 1998 (commencement of operations) to October 31, 1999
Carl Domino Growth Fund Notes to Financial Statements April 30, 2001 (Unaudited) NOTE 1. ORGANIZATION Carl Domino Growth Fund (the "Fund") was organized as a series of AmeriPrime Funds (the "Trust") on October 28, 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 growth of capital. 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 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 Adviser'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 Fund's Adviser determines the last bid price does not accurately reflect the current value or when restricted securities are being valued, such securities are valued as determined in good faith by the Fund's Adviser, in conformity with guidelines adopted by and subject to review of the Board. Fixed income securities generally are valued by using market quotations, but may be valued on the basis of prices furnished by a pricing service when the Adviser believes such prices accurately reflect the fair market value of such securities. A pricing service utilizes electronic data processing techniques based on yield spreads relating to securities with similar characteristics to determine prices for normal institutional-size trading units of debt securities without regard to sale or bid prices. If the Adviser decides that a price provided by the pricing service does not accurately reflect the fair market value of the securities, when prices are not readily available from a pricing service or when restricted or illiquid securities are being valued, securities are valued at fair value as determined in good faith by the Adviser, in conformity with guidelines adopted by and subject to review of the Board. 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 Carl Domino Growth Fund Notes to Financial Statements April 30, 2001 (Unaudited) - continued NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - continued an accrual basis. Discounts and premiums on securities purchased are amortized over the life of the respective securities. Generally accepted accounting principles require that permanent financial reporting tax differences relating to shareholder distributions be reclassified to paid in capital. NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES The Fund has retained Northern Trust Value Investors (the "Adviser"); a division of Northern Trust Investments, Inc., to manage the Fund's investments. Bruce Honig, is the portfolio manager 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 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, Rule 12b-1 expenses and extraordinary expenses or non-recurring expenses that may arise. As compensation for its management services and agreement to pay the Fund's expenses, the Fund is obligated to pay the Adviser a fee of 1.50% 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 six months ended, April 30, 2001, the Adviser received a fee of $8,470 from the Fund. The Adviser has contractually agreed to reimburse the Fund for the fees and expenses of the non-interested trustees incurred by the fund through February 28, 2002, but only to the extent necessary to maintain the Fund's total annual operating expenses at the rate of 1.50% of average daily net assets. For the six months ended April 30, 2001, the Adviser reimbursed expenses of $375. The Fund has retained Unified Fund Services, Inc. ("Unified"), a wholly owned subsidiary of Unified Financial Services, Inc., 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 Adviser 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. Prior to December 31, 2000, the Fund had retained AmeriPrime Financial Securities, Inc. to act as the principal distributor of its shares. Effective December 31, 2000, AmeriPrime Financial Securities, Inc. sold substantially all of its assets to Unified Financial Securities, Inc. Both companies are wholly owned subsidiaries of Unified Financial Services, Inc. Effective December 31, 2000, the Fund retained Unified Financial Securities, Inc. to act as the principal distributor of its shares. There were no payments made to either distributor during the six months ended April 30, 2001. A Trustee and officer of the Trust may be deemed to be an affiliate of AmeriPrime Financial Securities Inc. and Unified Financial Securities, Inc. Carl Domino Growth Fund Notes to Financial Statements April 30, 2001 (Unaudited)- continued NOTE 4. INVESTMENTS For the six months ended April 30, 2001, purchases and sales of investment securities, other than short-term investments, aggregated $292,586 and $327,995, respectively. As of April 30, 2001, the gross unrealized appreciation for all securities totaled $42,817 and the gross unrealized depreciation for all securities totaled $127,830 for a net unrealized depreciation of $85,013. The aggregate cost of securities for federal income tax purposes at April 30, 2001 was $1,157,667. 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 Adviser 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 April 30, 2001, Carl J. Domino, beneficially owned or controlled, in aggregate, more than 66% of the Fund. Fountainhead Kaleidoscope Fund Semi-Annual Report April 30, 2001 (Unaudited) Dear Shareholder, April 30, 2001 marked the first six months of Fountainhead Kaleidoscope Fund's (KALEX) second fiscal year. The overall environment for the Fund again proved to be difficult as the volatile times experienced in calendar year 2000 crept into 2001 despite a headfake rally in January of this year. However, thanks to skillful stock picking and a tilt towards value1, the Fund was able to generate a total return of -2.0% over the November 1, 2000 to April 30, 2001 period, outperforming the S&P 500 Index which returned -12.0% for the six-months ended 4/30/01, and performing essentially in line with the Russell 2000 Index which return -1.8% for the same period. Since inception, the Fund has continued to handily outperform its benchmarks, turning in an average annual total return of 26.8% versus 10.0% for the Russell 2000, and -4.5% for the S&P 500.
Total Return for the Period Ended April 30, 2001 - ------------------------------------- ------------------ --------------- ------------------------------------------- Average Annual Total Return Six- Since Inception of the Fund Fund/Index Months One-Year November 1, 1999 - -------------------------------------- ----------------- ----------------- ---------------------------------------- Fountainhead Kaleidoscope Fund -2.0% 5.9% 26.8% - -------------------------------------- ----------------- ----------------- ---------------------------------------- S&P 500 Index -12.0% -12.9% -4.5% Russell 2000 Index -1.8% -2.9% 10.0% - -------------------------------------- ----------------- ----------------- ----------------------------------------
Fountainhead Russell S&P Kaleidoscope 2000 500 Fund Index Index $14,265 $11,740 $10,610 11/00 $10,000 $10,000 $10,000 11/99 $12,600 $10,597 $10,201 12/99 $13,800 $11,797 $10,801 1/00 $12,820 $11,607 $10,262 2/00 $12,859 $13,523 $10,066 3/00 $13,599 $12,632 $11,050 4/00 $13,468 $11,871 $10,720 5/00 $13,278 $11,179 $10,496 6/00 $14,568 $12,154 $10,757 7/00 $14,278 $11,763 $10,592 8/00 $14,968 $12,660 $11,244 9/00 $14,468 $12,288 $10,653 10/00 $14,488 $11,740 $10,610 11/00 $12,668 $10,534 $9,774 12/00 $13,813 $11,439 $9,822 1/01 $15,954 $12,035 $10,170 2/01 $14,643 $11,246 $9,243 3/01 $13,729 $10,696 $8,657 4/01 $14,265 $11,532 $9,330 The chart shows the value of a hypothetical initial investment of $10,000 in the Fund, the Russell 2000 Index, and the Russell Midcap Index on December 31, 1996 (the inception of the Fund) and held through April 30, 2001. The Russell 2000 Index and the S&P 500 Index are widely recognized, unmanaged indices of common stock prices. You may not invest directly in an index. The index returns do not reflect expenses, which have been deducted from the Fund's return. These figures reflect the reinvestment of dividends. The value of the investment will fluctuate so that when redeemed, shares may be worth more or less than the original investment. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. Over the six month period ended April 30, 2001, the Fund's performance was driven by several media/broadcasting stocks (Media General +26.5%, Ackerley Group +18.0%, and Paxson Communications +12.2%), select healthcare companies (Mylan Labs +17.2%), and special situation stocks (Dollar Thrifty Automotive Group +43.7%, Diebold +25.3%, and Countrywide Credit +14.0%). As we have discussed in prior publications, the environment for telecommunications companies remained difficult as the ongoing inventory correction continued to unwind, and the ability to raise capital for companies to fund their buildouts remained very difficult. As a result, shares of telecom and some capital-intensive companies continued to lag the market as a whole. Specifically, the underperformance of Rural Cellular, Nextel Partners, UnitedGlobalCom, and Citizens Communications hindered the Fund's performance. Shares of some of our healthcare companies, including Watson Pharmaceuticals, Radiance Medical, and Alpharma, also underperformed the broader market. It is no secret that the environment over the past year or so has been very difficult and turbulent. Economic growth slowed to a 1% annual rate during the fourth quarter of 2000 from a blistering rate of 8.3% in the fourth quarter of 1999. The capital markets were essentially closed, preventing many companies from raising additional capital to fund their business needs. In the bond market, the total default rate in the marketplace was 6.9% during the middle of May, a level rapidly approaching its prior high of 8.8% recorded in 1991. However, unlike past experiences, formerly solid credits have been a significant participant. Investment grade defaults are representing an abnormally high percentage (25.9%) of total defaults. In particular, defaults have been rampant in media, telecommunications, food, restaurants, and movie theater chains. The bottom line is that things have been tough everywhere, not just in the second- and third-tier sectors. The Federal Reserve responded to this turmoil by cutting interest rates five times through May 15, 2001, for a total of 250 basis points. In light of the troublesome environment that companies have faced over the last several quarters, it is interesting to note that small- and mid-cap stocks, as a whole, have actually been holding up fairly well, despite their higher level of volatility.2 This stands in stark contrast to recent years where large-caps have dominated the equity markets. For example, over the 1993 through 1999 period, returns generated in the equity market were driven almost entirely by large-cap stocks. Investors generally displayed a notable preference for larger-cap issues and, as a result, the outperformance of larger-cap securities exceeded the differences in the fundamental performance of the underlying companies. Since March 2000, however, the equity markets have seen a change in leadership as small- and mid-cap stocks have performed well relative to larger-cap equities. Since March 2000, the Russell 2000 has outperformed the S&P 500 by nearly 700 basis points, and the Russell Mid-Cap Index has outperformed the S&P 500 by a spectacular 1,890 basis points. In fact, if the current outperformance lasts, small-cap stocks will have their first three-year streak of beating large-caps since 1993. However, while mid- and small-cap stocks have recently been outperforming, as a group, they still remain fairly inexpensive, based on various valuation measurements such as P/E, price-to-book value, etc., when compared to large-cap equities, thus setting the stage for further possible outperformance. In addition to overall attractive valuations, small- and mid-cap companies are also seeing their earnings grow faster than their large-cap brethren. For example, the average large-cap company, as represented by the S&P 500, is projected to see its earnings grow by 15.5%, according to Zacks, over the next five years. Whereas the average small-cap company, as proxied by the Russell 2000, should see its earnings grow at a rate of 17.4%. The recent outperformance by the small- and mid-cap group is partly attributable to the fact that many mid- and small- cap companies are more flexible in some ways than many larger companies; those which are well managed with viable financing options are often better positioned to survive downturns in the economy. During most of the 1990s, there was a tendency for many portfolio managers and institutional investors to neglect broad areas of the market. With many portfolios linked to specific benchmarks, such as the S&P 500, most overall portfolio holdings were skewed towards those in the Index; securities outside the Index were frequently inefficiently priced. This was acceptable to many investors when the broad indices rose notably in price. However, the more difficult market environment of 2000 has led many to consider absolute performance bogeys and to revisit previously neglected areas of the market. This trend should continue to bolster the performance of small- and mid-cap stocks as, in our opinion, many large-cap high multiple stocks may continue to experience lackluster stock performance. The relative inefficiency of the small- and mid-cap markets allows for the opportunity for portfolio managers to add significant value to shareholders by finding overlooked and underfollowed gems which can amply reward shareholders over the long-term. The primary factor which contributes to this inefficiency is that few large Wall Street firms follow many of these smaller companies. For example, currently only 43% of the companies in the Russell 2500 have at least six Wall Street analysts following them; for the Russell 2000, that figure falls to 34%. In addition, a good number of firms have no coverage. For those companies with good management, a solid business model, a decent balance sheet, and an attractive valuation, the upside potential could be very rewarding as more investors, and eventually Wall Street, recognize the inherent value in these companies. Periods marked by extreme volatility have never been friendly for small- and mid-cap stock performance. For example, during 1998, volatility doubled, largely due to the Long-Term Capital Management crisis and the Asian financial crisis, and it has remained at relatively high levels since then. During this period (1998 through present), the large-cap premium increased from 143% to a high of 177% in July 2000. Since then, the large-cap premium has declined, but still averages around 159%, well above the 14-year average of 109%. Although past performance does not guarantee future results, we look at historical data to help us as we try to both understand the current market and to determine where it may be needed in the future. Historically, when volatility peaks and begins to subside, the valuation gap begins to work in favor of smaller-cap stocks as investors return to the group. For example, volatility peaked in December 1990 during the last recession and was then cut in half over the next four and a half years. Likewise, the multiple gaps between large-caps and mid- and small-caps peaked at 117% in October 1990 and then declined to a low of 88% in August 1995. As the impact of the Fed's easing of interest rates takes hold and the economy eventually stabilizes and recovers, we anticipate diminishing volatility and dissipating risk aversion should contribute to a smaller valuation gap between large-caps and mid- and small-caps. Historically, conditions such as these have led to prolonged periods of outperformance by small- and mid-cap stocks. For example, in the early `90s, yield spreads contracted from a high of 1,000 basis points to approximately 400 basis points. As a result, the large-cap premium contracted from 60% to a 10% discount to small-caps in December 1994. During this period, small-caps outperformed large-caps by an average of 6.7% per year. Another positive for the group is the emerging sign that the credit markets may be starting to reopen. As the economy starts to recover, the high yield debt market will begin to rally and the capital markets will once again open; credit discrimination will lessen, and banks will once again lend. In fact, outside of telecommunications, high yield spreads have been rapidly narrowing. Lower borrowing costs for growth capital will eventually engage the economy, leading to an improved profit picture and rising share prices. Historically, small-cap shares typically have twice the return of their large-cap brethren following economic slowdowns, with twelve-month gains in excess of 30%, according to CS First Boston.. In fact, during past periods, there has been a high inverse correlation between the direction of high yield spreads and small- and mid-cap stock price movement. Small-caps have historically been the largest beneficiaries of falling credit spreads since they tend to be most damaged by the periods of liquidity shrinkage. Historically, stocks of smaller-sized companies have performed better than large-caps when coming out of a recession or a slowdown in the economy. In fact, in eight of the last eleven periods when the Fed was in an easing mode, small-/mid-caps beat large-caps over the ensuing twelve months. As previously mentioned, during this time many small- to mid-sized companies are more flexible and better able to respond to the changing economy. Many of these companies also have the opportunity to perform extremely well once the economy and stock market heat back up, as those with niche markets or products may be acquired by larger firms, often at significant premiums. Thus they have the ability to perform well in a variety of economic environments. We feel that the Fund owns a good many of these types of stocks and is well positioned to deliver solid returns for our shareholders going forward. Thank you for your continued support of the Fountainhead Kaleidoscope Fund. Sincerely, Roger E. King Chairman and President The Fountainhead Kaleidoscope Fund is offered by prospectus only. The prospectus contains important information about the Fund's objectives, risks, fees, distribution charges, and other expenses. You should read the prospectus carefully before investing or sending money. You can obtain a prospectus by calling 800-868-9535. Shares of the Fountainhead Kaleidoscope Fund are distributed by Unified Financial Securities, Inc. - -------- 1 Unlike a traditional value manager who buys solely low P/E, low price/book, low price/sales, or low price/cash flow stocks, the Fund may own some stocks which have traditionally been classified as growth stocks. The Fund's advisor utilizes a broader definition of value, which includes purchasing stocks which are trading at either a discount to their five-year projected growth rate, or at a discount to their private-market value. The Fund's advisor looks favorably upon purchasing stocks of companies, which are growing their earnings at a healthy rate, it is just sensitive to the price it will pay for that growth. In the Fund's advisor's opinion, this approach allows for more flexibility and provides the opportunity for the Fund's advisor to take advantage of more opportunities in the market. 2 Small Company Risk: The risks associated with investing in small companies (less than $1.8 billion in market capitalization) include: the earnings and prospects of smaller companies are more volatile than larger companies; small companies may experience higher failure rates than do larger companies; the trading volume of securities of smaller companies is normally less than that of larger companies and, therefore, may disproportionately affect their market price, tending to make them fall more in response to selling pressure than is the case with larger companies; and small companies may have limited markets, product lines or financial resources and may have less management experience than larger companies.
Fountainhead Kaleidoscope Fund Schedule of Investments - April 30, 2001 (Unaudited) Common Stocks - 97.1% Shares Value Cable & Other Pay Television Services - 8.4% Adelphia Communications Corp. - Class A (a) 2,450 $ 89,082 Charter Communications, Inc. - Class A (a) 5,500 117,755 UnitedGlobalCom, Inc. (a) 2,500 40,069 ------------ 246,906 ------------ Calculating & Accounting Machines (No Electronic Computers) - 3.3% Diebold, Inc. 3,000 97,770 ------------ Mortgage Bankers & Loan Correspondents - 1.6% Countrywide Credit Industries, Inc. 1,100 46,937 ------------ National Commercial Banks - 5.4% Riggs National Corp. 10,000 158,500 ------------ Natural Gas Transmission & Distribution - 2.4% Southwest Gas Corp. 3,300 69,465 ------------ Newspapers: Publishing Or Publishing & Printing - 2.8% Media General, Inc. - Class A 1,700 81,702 ------------ Perfumes, Cosmetics & Other Toilet Preparations - 3.5% Elizabeth Arden, Inc. (a) 5,700 104,310 ------------ Periodicals: Publishing, Or Publishing And Printing - 3.5% Meredith Corp. 2,700 101,898 ------------ Pharmaceutical Preparations - 16.1% Alpharma, Inc. 5,200 117,624 Elan Corp. PLC. (a) 2,014 101,002 King Pharmaceuticals, Inc. (a) 2,000 84,260 Mylan Laboratories, Inc. 5,100 136,374 Watson Pharmaceuticals, Inc. (a) 700 34,860 ------------ 474,120 ------------ Radio Broadcasting Stations - 2.9% Paxson Communications Corp. (a) 6,600 84,216 ------------ Radio Telephone Communications - 14.6% Dobson Communications Corp. (a) 10,000 144,200 Nextel Partners, Inc. - Class A (a) 3,800 65,322 Rural Cellular Corp. (a) 4,000 149,640 Western Wireless Corp. - Class A 1,600 71,248 ------------ 430,410 ------------ Fountainhead Kaleidoscope Fund Schedule of Investments - April 30, 2001 - continued (Unaudited) Common Stocks - 97.1% - continued Shares Value Security Brokers, Dealers & Flotation Companies - 7.9% E*Trade Group, Inc. (a) 14,000 $ 131,600 Knight Trading Group, Inc. (a) 5,500 101,750 ------------ 233,350 ------------ Services - Advertising - 2.9% Ackerley Group, Inc. 7,000 85,680 ------------ Services - Auto Rental & Leasing - 4.3% Dollar Thrifty Automotive Group, Inc. (a) 5,800 128,180 ------------ Services - Consumer Credit Reporting, Collection Agencies - 1.5% Equifax, Inc. 1,300 42,991 ------------ Services-Help Supply Services - 3.1% Manpower, Inc. 2,800 90,580 ------------ Surgical & Medical Instruments & Apparatus - 9.3% Boston Scientific Corp. (a) 9,200 146,096 Radiance Medical Systems, Inc. (a) 25,000 126,750 ------------ 272,846 ------------ Telephone Communications (No Radio Telephone) - 3.6% Broadwing, Inc. 943 23,386 Telephone & Data Systems, Inc. 800 84,000 ------------ 107,386 ------------ TOTAL COMMON STOCKS (Cost $2,645,854) $ 2,857,247 ------------ Principal Amount Value Money Market Securities - 1.8% Firstar Treasury Fund, 3.79% (b) (Cost $51,711) 51,711 51,711 ------------ TOTAL INVESTMENTS - 98.9% (Cost $2,697,565) 2,908,958 ------------ Other assets less liabilities - 1.1% 32,411 ------------ Total Net Assets - 100.0% $ 2,941,369 ============ (a) Non-income producing (b) Variable rate security; the coupon rate shown represents the rate at April 30, 2001. See accompanying notes which are an integral part of the financial statements.
Fountainhead Kaleidoscope Fund April 30, 2001 Statement of Assets & Liabilities (Unaudited) Assets Investment in securities, at value (Cost $2,697,565) $ 2,908,958 Cash 68,916 Receivable from advisor 13,571 Receivable for fund shares sold 1,508 Dividend receivable 500 Interest receivable 319 ----------- Total assets 2,993,772 Liabilities Accrued investment advisory fee $ 16,771 Payable for securities purchased 35,632 ----------- Total liabilities 52,403 ----------- Net Assets $ 2,941,369 =========== Net Assets consist of: Paid-in capital $ 2,854,050 Accumulated undistributed net investment loss (11,156) Accumulated net realized loss on investments (112,918) Net unrealized appreciation on investments 211,393 ----------- Net Assets, for 216,357 shares $ 2,941,369 =========== Net Asset Value Net Assets Offering price and redemption price per share ($2,941,369/216,357) $ 13.60 =========== See accompanying notes which are an integral part of the financial statements.
Fountainhead Kaleidoscope Fund Statement of Operations for the six months ended April 30, 2001 (Unaudited) Investment Income Dividend income $ 5,319 Interest income 829 ---------- Total Income 6,148 Expenses Investment advisory fee $ 24,037 Trustees' fees 417 ---------- Total expenses before waivers and reimbursements 24,454 Waived fees and reimbursed expenses (7,150) ---------- Total operating expenses 17,304 ---------- Net Investment Loss (11,156) ---------- Realized & Unrealized Gain (Loss) Net realized gain on investment securities 1,698 Change in net unrealized appreciation (depreciation) on investment securities (43,134) ---------- Net realized and unrealized loss on investment securities (41,436) ---------- Net decrease in net assets resulting from operations $(52,592) ========== See accompanying notes which are an integral part of the financial statements.
Fountainhead Kaleidoscope Fund Statement of Changes in Net Assets For the six months ended April 30, 2001 Year ended (Unaudited) October 31, 2000 ---------------- ----------------- Increase (Decrease) in Net Assets Operations Net investment loss $ (11,156) $ (8,490) Net realized gain (loss) on investment securities 1,698 (1,015) Change in net unrealized appreciation (depreciation) (43,134) 254,527 ---------------- ----------------- Net increase (decrease) in net assets resulting from operations (52,592) 245,022 ---------------- ----------------- Distributions to Shareholders From net investment income 0 0 From net realized loss (113,601) 0 ---------------- ----------------- Total distributions (113,601) 0 ---------------- ----------------- Share Transactions Net proceeds from sale of shares 275,694 2,508,109 Shares issued in reinvestment of distributions 113,133 0 Shares redeemed (8,891) (25,505) ---------------- ----------------- Net increase in net assets resulting from share transactions 379,936 2,482,604 ---------------- ----------------- Total increase in net assets 213,743 2,727,626 ---------------- ----------------- Net Assets Beginning of period 2,727,626 0 ---------------- ----------------- End of period [including accumulated undistributed net investment income (loss) $ 2,941,369 $ 2,727,626 of $11,156 & $0, respectively] ================ ================= See accompanying notes which are an integral part of the financial statements.
Fountainhead Kaleidoscope Fund Financial Highlights For the six months ended April 30, 2001 Year ended (Unaudited) October 31, 2000 ---------------- ----------------- Selected Per Share Data Net asset value, beginning of period $ 14.49 $ 10.00 ---------------- ----------------- Income (loss) from investment operations Net investment loss (0.05) (0.07) Net realized and unrealized gain (loss) (0.24) 4.56 ---------------- ----------------- Total from investment operations (0.29) 4.49 ---------------- ----------------- Less distributions From net investment income 0.00 0.00 From net realized gain (0.60) 0.00 ---------------- ----------------- Total distributions (0.60) 0.00 ---------------- ----------------- Net asset value, end of period $ 13.60 $ 14.49 ================ ================= Total Return (1.47)% 44.90% Ratios and Supplemental Data Net assets, end of period (000) $2,941 $2,728 Ratio of expenses to average net assets 1.28% (a) 1.25% Ratio of expenses to average net assets before fee waivers and reimbursement 1.81% (a) 1.86% Ratio of net investment loss to average net assets (0.83)%(a) (0.49)% Ratio of net investment loss to average net assets before fee waivers and reimbursement (1.36)%(a) (1.10)% Portfolio turnover rate 95.47% 195.96% (a) Annualized See accompanying notes which are an integral part of the financial statements.
Fountainhead Kaleidoscope Fund Notes To Financial Statements April 30, 2001 (Unaudited) NOTE 1. ORGANIZATION The Fountainhead Kaleidoscope Fund (the "Fund") was organized as a series of the AmeriPrime Funds, an Ohio business trust (the "Trust"), on September 29, 1999 and commenced operations on November 1, 1999. The Fund is registered under the Investment Company Act of 1940, as amended, as a diversified, open-end management investment company. The Fund's investment objective is to provide long-term capital growth. The Agreement and Declaration of Trust for the Trust 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 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 Advisor (as such term is defined in note 3 of this document), 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 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. 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. 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 its net investment income and any realized capital gains. Dividends and Distributions - The Fund intends to comply with federal tax rules regarding distribution of substantially all its net investment income and capital gains. These rules may cause multiple distributions during the course of the year. Redemption Fees - The Fund charges a redemption fee of 1% of the current net asset value of shares redeemed if the shares are owned less than 180 days. The fee is charged for the benefit of remaining Fountainhead Kaleidoscope Fund Notes To Financial Statements April 30, 2001 - continued (Unaudited) NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - continued shareholders to defray Fund portfolio transaction expenses and facilitate portfolio management. This fee applies to shares being redeemed in the order in which they are purchased. The fee, which is retained by the Fund, is accounted for as an addition to paid-in capital. Other - The Fund follows industry practice and records security transactions on the trade date. The specific identification method is used for determining gains or losses for financial statements and income tax purposes. Dividend income is recorded on the ex-dividend date and interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the life of the respective securities. NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES The Fund retains King Investment Advisors, Inc., 1980 Post Oak Boulevard, Suite 2400, Houston, Texas 77056-3898 (the "Advisor") to manage the Fund's investments. Roger E. King, 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 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, Rule 12b-1 expenses, 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 computed and accrued daily and paid monthly at an annual rate of 1.75% of the average daily net assets of the Fund. For the six months ended April 30, 2001, the Advisor earned a fee of $24,037 from the Fund. The Advisor has contractually agreed through February 28, 2002 to waive all or a portion of its management fees and/or reimburse the Fund for expenses it incurs, but only to the extent necessary to maintain the Fund's total annual operating expenses at 1.25% of its average daily net assets. For the six months ended April 30, 2001, the Advisor waived fees and reimbursed expenses of $7,150. The Fund has retained Unified Fund Services, Inc. ("Unified"), a wholly owned subsidiary of Unified Financial Services, Inc., 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. Prior to December 31, 2000, the Fund had retained AmeriPrime Financial Securities, Inc. to act as the principal distributor of its shares. Effective December 31, 2000, AmeriPrime Financial Securities, Inc. sold substantially all of its assets to Unified Financial Securities, Inc. Both companies are wholly owned subsidiaries of Unified Financial Services, Inc. Effective December 31, 2000, the Fund retained Unified Financial Securities, Inc. to act as the principal distributor of its shares. There were no payments made to either distributor during the six months ended April 30, 2001. A Trustee and officer of the Trust may be deemed to be an affiliate of AmeriPrime Financial Securities Inc. and Unified Financial Securities, Inc. Fountainhead Kaleidoscope Fund Notes To Financial Statements April 30, 2001 - continued (Unaudited) NOTE 4. INVESTMENTS For the six months ended April 30, 2001, purchases and sales of investment securities, other than short-term investments, totaled $1,505,700 and $1,291,360, respectively. The gross unrealized appreciation for all securities totaled $395,623 and the gross unrealized depreciation for all securities totaled $184,230 for a net unrealized appreciation of $211,393. The total cost of securities for federal income tax purposes on April 30, 2001 was $2,697,565. 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 April 30, 2001, Roger E. King beneficially owned or controlled, in aggregate, approximately 28% of the Fund.
Florida Street Growth Fund Schedule of Investments - April 30, 2001 (Unaudited) Common Stock - 93.1% Shares Value Alternative Power - 6.0% International Rectifier Corp. 3,800 $ 210,900 ------------------ Biological Products (No Diagnostics) - 1.3% Medimmune Inc. 1,200 46,980 ------------------ Capital Equipment & Services - 6.6% General Dynamics Corp. 1,000 77,080 L3 Communications Holdings, Inc. (a) 1,500 115,875 Thermo Electron Corp. 1,500 39,540 ------------------ 232,495 ------------------ Consumer Cyclicals - 7.5% Christopher & Banks Corp. (a) 2,475 97,886 RadioShack Corp. 2,500 76,575 SCP Pool Corp. (a) 2,812 88,578 ------------------ 263,039 ------------------ Consumer Non-Durables & Services - 1.4% Convergys Corp. (a) 1,000 36,500 Rare Medium Group, Inc. (a) 9,675 11,417 ------------------ 47,917 ------------------ Crude Petroleum & Natural Gas - 0.7% Anadarko Petroleum Corp. 400 25,848 ------------------ Electronic Equipment - 0.8% Agilent Technologies, Inc. (a) 700 27,307 ------------------ Electric Services - 1.6% Duke Energy Co. 1,200 56,112 ------------------ Energy - 12.2% Baker Hughes, Inc. 1,500 58,935 Core Laboratories N.V. (a) 3,000 71,640 Global Marine Inc. (a) 2,500 71,875 Maverick Tube Corp. (a) 1,500 36,600 Noble Drilling Corp. (a) 2,000 97,000 Ocean Energy, Inc. 5,000 92,550 ------------------ 428,600 ------------------ Florida Street Growth Fund Schedule of Investments - April 30, 2001 (Unaudited) - continued Common Stock - continued Shares Value Financials - 6.9% AFLAC Inc. 1,400 $ 44,520 BlackRock, Inc. - Class A (a) 1,200 40,560 Concord EFS, Inc. (a) 1,800 83,790 State Street Corp. 700 72,646 ------------------ 241,516 ------------------ Instruments for the Measuring & Testing of Electricity & Electric Signals - 0.6% Keithly Instruments 800 21,240 ------------------ Miscellaneous Fabricated Metal Products - 1.6% Shaw Group Inc. 1,000 57,000 Network Equipment - 0.7% Methode Electronics, Inc. - Class A 4,100 23,452 ------------------ National Commercial Banks - 3.4% BB&T Corp. 2,000 70,840 National Commerce Financial Corp. 49,820 ------------------ 120,660 ------------------ Natural Gas Transmissions - 2.9% Western Gas Resources Inc. 2,550 101,388 ------------------ Operative Builders - 0.9% D. R. Horton Inc. 1,332 32,261 ------------------ Outsourced Electronic Manufacturing - 1.5% Flextronics International Ltd. (a) 2,000 53,780 ------------------ Pharmaceutical Preparation - 1.8% Forest Labratories Inc. 500 30,575 King Pharmaceuticals 800 33,704 ------------------ 64,279 ------------------ Retail - Grocery Stores - 0.6% Whole Foods Market, Inc. 400 19,440 ------------------ Retail - Shoe Stores - 1.1% Payless ShoeSource 600 38,250 ------------------ Retail - Women's Clothing Stores - 1.8% Cato Corp. 3,500 61,705 ------------------ Semiconductors & Related Devices - 6.2% Avanex Corp. 6,100 87,901 JDS Uniphase Corp. 760 16,256 National Semiconduct Corp. (a) 2,200 63,360 Stratos Lightwave Inc. 6,193 49,509 ------------------ 217,026 ------------------ Florida Street Growth Fund Schedule of Investments - April 30, 2001 (Unaudited) - continued Common Stock - continued Shares Value Semiconductor Manufacturing & Test Equipment - 2.3% Teradyne, Inc. (a) 1,000 $ 39,500 Trikon Technologies, Inc. (a) 4,000 41,440 ------------------ 80,940 ------------------ Services - Computer Integrated Services Design - 0.5% Sonus Networks, Inc. 700 17,822 ------------------ Services - Computer Programming, Data Processing - 1.2% Earthlink Inc. 4,000 43,760 ------------------ Services - Management Consulting Services - 1.1% Answerthink, Inc. 8,000 40,080 ------------------ Software - 2.1% Adobe Systems Inc. 700 31,444 Parametric Technology Corp. 3,800 43,320 ------------------ 74,764 ------------------ Telecommunications - 2.1% Alltel Corp. 900 49,149 WorldCom, Inc. (a) 1,350 24,637 ------------------ 73,786 ------------------ Telecommunication Equipment - 0.7% Corning Inc. 1,140 25,046 ------------------ Telephone & Telegraph Apparatus - 5.0% Corvis Corp. 13,000 89,050 Sycamore Networks, Inc. 9,100 86,632 ------------------ 175,682 ------------------ Utilities - 8.0% AES Corp. (a) 1,200 57,204 CMS Energy Corp. 2,800 87,640 IdaCorp, Inc. 3,500 134,750 ------------------ 279,594 ------------------ Wireless Equipment - 2.0% QUALCOMM, Inc. (a) 1,200 68,832 ------------------ TOTAL COMMON STOCKS (Cost $3,202,962) 3,271,501 ------------------ Principal Money Market Securities - 9.1% Amount Federated Prime Obligations Fund, 4.46% (b) (Cost $319,566) $ 319,566 $ 319,566 ------------------ TOTAL INVESTMENTS - 102.2% (Cost $3,522,528) 3,591,067 ------------------ Liabilities in excess of other assets - (2.2)% (77,538) ------------------ Total Net Assets - 100.0% $ 3,513,529 ================== (a) Non-income producing. (b) Variable rate security; the coupon rate shown represents the rate at April 30, 2001.
Florida Street Growth Fund April 30, 2001 Statement of Assets & Liabilities (Unaudited) Assets Investment in securities, at value (cost $3,522,528) $ 3,591,067 Dividends receivable 2,172 Interest receivable 1,864 -------------------- Total assets 3,595,103 -------------------- Liabilities Accrued investment advisory fee 2,885 Payable to custodian bank 5,667 Payable for fund shares redeemed 14,212 Payable for securities purchased 58,810 -------------------- Total liabilities 81,574 -------------------- Net Assets $ 3,513,529 ==================== Net Assets consist of: Paid in capital $ 3,883,550 Accumulated net investment gain (loss) (8,078) Accumulated net realized (gain) loss on investments (430,482) Net unrealized appreciation (depreciation) on investments 68,539 -------------------- Net Assets, for 390,381 shares $ 3,513,529 ==================== Net Asset Value Net Assets Offering price and redemption price per share ($3,513,529 / 390,381) $ 9.00 ====================
Florida Street Growth Fund Statement of Operations for the six months ended April 30, 2001 (Unaudited) Investment Income Dividend income $ 12,605 Interest income 6,969 ------------------- Total Income 19,574 Expenses Investment advisory fee 25,904 Trustees' fees 417 ------------------- Total operating expenses 26,321 ------------------- Net Investment Income (Loss) (6,747) ------------------- Realized & Unrealized Gain (Loss) Net realized gain (loss) on investment securities (428,868) Change in net unrealized appreciation (depreciation) on investment securities (533,973) ------------------- Net realized & unrealized gain (loss) on investment securities (962,841) ------------------- Net increase (decrease) in net assets resulting from operations $ (969,588) ===================
Florida Street Growth Fund Statement of Changes in Net Assets Six Months Ended Year April 30, ended 2001 October 31, (Unaudited) 2000 -------------------- -------------------- Increase in Net Assets Operations Net investment income (loss) $ (6,747) $ (32,025) Net realized gain (loss) on investment securities (428,868) 1,436,697 Change in net unrealized appreciation (depreciation) (533,973) (71,053) -------------------- -------------------- Net increase (decrease) in net assets resulting from operations (969,588) 1,333,619 -------------------- -------------------- Distributions to shareholders From net investment income 0 0 From net realized gain (999,515) 0 -------------------- -------------------- Total distributions (999,515) 0 -------------------- -------------------- Share Transactions Net proceeds from sale of shares 68,429 247,952 Shares issued in reinvestment of distributions 996,912 - Shares redeemed (507,526) (259,473) -------------------- -------------------- Net increase (decrease) in net assets resulting from share transactions 557,815 (11,521) -------------------- -------------------- Total increase (decrease) in net assets (1,411,288) 1,322,098 Net Assets Begining of period 4,924,817 3,602,719 -------------------- -------------------- End of period $ 3,513,529 $ 4,924,817 ==================== ==================== Capital Share Transactions: Shares sold 6,696 14,704 Shares issued on reinvestment of dividends 111,762 - Shares repurchased (52,611) (18,372) -------------------- -------------------- Net increase (decrease) from capital share transactions 65,847 (3,668) ==================== ====================
Florida Street Growth Fund Financial Highlights Six months Year Year Year Period ended ended ended ended ended April 30, 2001 October 31, October 31, October 31, October 31, (Unaudited) 2000 1999 1998 1997 (a) -------------- --------------- ------------- ------------- -------------- Selected Per Share Data Net asset value, beginning of period $ 15.18 $ 10.98 $ 9.16 $ 10.19 $ 10.00 -------------- --------------- ------------- ------------- -------------- Income from investment operations Net investment income (loss) (0.02) (0.10) (0.04) 0.02 0.03 Net realized and unrealized gain (loss) (3.07) 4.30 1.88 (1.01) 0.16 -------------- --------------- ------------- ------------- -------------- Total from investment operations (3.09) 4.20 1.84 (0.99) 0.19 -------------- --------------- ------------- ------------- -------------- Less distributions From net investment income 0.00 0.00 (0.02) (0.01) 0.00 From net realized gain (3.09) 0.00 0.00 (0.03) 0.00 -------------- --------------- ------------- ------------- -------------- Total distributions (3.09) 0.00 (0.02) (0.04) 0.00 -------------- --------------- ------------- ------------- -------------- Net asset value, end of period $ 9.00 $ 15.18 $ 10.98 $ 9.16 $ 10.19 ============== =============== ============= ============= ============== Total Return (b) (20.17)% 38.25% 20.06% (9.73)% 1.90% Ratios and Supplemental Data Net assets, end of period (000) $ 3,514 $4,924 $3,603 $3,320 $2,117 Ratio of expenses to average net assets 1.37% (c) 1.37% 1.35% 1.25% 1.35% (c) Ratio of expenses to average net assets before reimbursement 1.37% (c) 1.40% 1.38% 1.35% 1.35% (c) Ratio of net investment income (loss) to (0.35)%(c) (0.62)% (0.40)% 0.21% 1.14% (c) average net assets Ratio of net investment income (loss) to average net assets before reimbursement (0.35)%(c) (0.65)% (0.43)% 0.12% 1.14% (c) Portfolio turnover rate 35.00% 114.00% 111.97% 63.10% 0.87% (c) (a) August 6, 1997 (commencement of operations) to October 31, 1997 (b) For period of less than a full year, total return is not annualized. (c) Annualized
Florida Street Growth Fund Notes to Financial Statements April 30, 2001 (Unaudited) NOTE 1. ORGANIZATION Florida Street Growth Fund (the "Fund") was organized as a non-diversified series of the AmeriPrime Funds, an Ohio business trust (the "Trust") on June 10, 1997 and commenced operations on August 6, 1997. The Trust is an open-end investment company established under the laws of Ohio by an Agreement and Declaration of Trust dated August 8, 1995 (the "Trust Agreement. The 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. 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 growth of capital. The investment advisor to the Fund is Commonwealth Advisors, Inc. (the "Advisor"). 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 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 the 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 services, 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 quidelines adopted by and subject to the 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. 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. Florida Street Growth Fund Notes to Financial Statements April 30, 2001 (Unaudited) - continued NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES The Fund retains Commonwealth Advisors, Inc. (the Advisor) to manage the Fund's investments. Richard L. Chauvin, Senior Vice-President of the Advisor is responsible for the day-to-day management 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 of Trustees 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, Rule 12b-1 expenses 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 computed and accrued daily and paid monthly at an annual rate of 1.35% of the average value of its daily net assets of the Fund. 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 six months ended April 30, 2001, the Advisor received a fee of $25,904 from the Fund. The Fund has retained Unified Fund Services, Inc. ("Unified"), a wholly owned subsidiary of Unified Financial Services, Inc., 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 Adviser 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. Prior to December 31, 2000, the Fund had retained AmeriPrime Financial Securities, Inc. to act as the principal distributor of its shares. Effective December 31, 2000, AmeriPrime Financial Securities, Inc. sold substantially all of its assets to Unified Financial Securities, Inc. Both companies are wholly owned subsidiaries of Unified Financial Services, Inc. Effective December 31, 2000, the Fund retained Unified Financial Securities, Inc. to act as the principal distributor of its shares. There were no payments made to either distributor during the six months ended April 30, 2001. A Trustee and officer of the Trust may be deemed to be an affiliate of AmeriPrime Financial Securities Inc. and Unified Financial Securities, Inc. NOTE 4. INVESTMENTS For the six months ended April 30, 2001, purchases and sales of investment securities, other than short term investments, aggregated $1,302,771 and $1,914,663, respectively. The gross unrealized appreciation for all securities totaled $689,481 and the gross unrealized depreciation for all securities totaled $620,942 for a net unrealized appreciation of $68,539. The aggregate cost of securities for federal income tax purposes at April 30, 2001 was $3,522,528. 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. Florida Street Growth Fund Notes to Financial Statements April 30, 2001 (Unaudited) - continued 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 April 30, 2001, Charles Schwab & Co. held in aggregate more than 94% of the Fund in an omnibus account for the benefit of others.
Florida Street Bond Fund Schedule of Investments - April 30, 2001 (Unaudited) Shares Value Common Stock - 1.9% JPS Textile Group, Inc. (b) 21,245 $ 94,115 Trikon Technologies, Inc. 18,300 189,588 ----------------- TOTAL COMMON STOCK (Cost $372,210) 283,703 ----------------- Principal Corporate Bonds - 78.0% Amount Value Anacomp, Inc. 10.875%, 4/1/04 $ 4,020,000 824,100 Baker, Inc. 7.00%, 6/1/02 340,000 281,775 BankAmerica Manufactured HSG Trust S96-1 - Class B 7.875%, 10/10/26 2,000,000 800,000 Brauns Fashions, Inc. 12.00%, 1/1/05 465,000 462,675 Covad Communications Group 0.00%, 3/15/08 (a) (d) 1,000,000 45,000 Covad Communications Group 12.00%, 2/15/10 (a) (d) 1,000,000 120,000 DiGiorgio Corp. 10.00%, 6/15/07 100,000 93,000 Global Corp. 12.50%, 2/1/10 571,000 177,010 IMPAC Group, Inc. 8.95%, 6/25/25 1,000,000 990,790 Laroche Industries, Inc. 9.50%, 9/15/07 (c) 19,250,000 481,250 McMillin Cos. LLC 13.00%, 8/31/06 (d) 1,020,000 1,020,000 Metamor Worldwide, Inc. 2.94%, 8/15/04 3,215,000 578,700 Metropolitan Asset Corp. 7.30%, 5/20/25 470,000 373,062 National Equipment Services, Inc. 10.00%, 11/30/04 (c) 150,000 122,250 Nations Rent, Inc. 10.375%, 12/15/08 1,000,000 205,000 Northeast Optic Networks, Inc. 12.75%, 8/15/08 3,575,000 1,483,625 Oakwood Homes Corp. 8.125%, 3/1/09 914,000 324,470 Oakwood Homes Corp. 7.875%, 3/1/04 1,130,000 457,650 Rural/Metro Corp. 7.875%, 3/15/08 620,000 195,300 Service Merchandise, Inc. 9.00%, 12/15/04 (c) 12,404,000 744,240 Service Merchandise, Inc. 8.375%, 1/15/49 (c) 2,747,000 1,490,248 Specialty Foods Corp. New Holdings, Inc. 13.25%, 8/15/03 330,000 113,850 ----------------- TOTAL CORPORATE BONDS (Cost $16,476,726) 11,383,995 ----------------- Convertible Securities - 5.4% Digital Island, Inc. 6.00%, 2/15/05 840,000 220,500 Tele-Save Communications 4.50%, 09/15/02 2,015,000 562,185 ----------------- TOTAL CONVERTIBLE BONDS (Cost $2,108,939) 782,685 ----------------- Florida Street Bond Fund Schedule of Investments - April 30, 2001 - continued (Unaudited) Principal Amount Value Money Market Securities - 10.1% Federal Prime Obligations Fund 4.47% (b) (Cost $1,470,896) $ 1,470,896 $ 1,470,896 ----------------- TOTAL INVESTMENTS - 95.4% (Cost $20,428,771) 13,921,279 ----------------- Other assets less liabilities - 4.6% 667,533 ----------------- TOTAL NET ASSETS - 100.0% $ 14,588,812 ================= (a) Security initially issued in zero coupon form which converts to coupon form at a specified rate and date. The coupon rate shown is the rate at April 30, 2001. (b) Non-income producing (c) Non-income producing - issuer is in default or has filed for protection under the Federal Bankruptcy Code. (d) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At April 30, 2001 the value of these securities amounted to $1,185,000 and 8.1% of net assets.
Florida Street Bond Fund Statement of Assets & Liabilities April 30, 2001 (Unaudited) Assets Investment in securities, at value (cost $20,428,771) $ 13,921,279 Cash 692,447 Interest receivable 356,894 Receivable for securities sold 292,305 Receivable for fund shares sold 20,047 Receivable from investment advisor for reimbursed expenses 52,747 Other receivables 211,724 ------------------- Total assets 15,547,443 ------------------- Liabilities Accrued investment advisory fee 32,015 Distributions payable 3,601 Payable for securities purchased 561,489 Payable for fund shares redeemed 360,344 Other payables and accrued expenses 1,182 ------------------- Total liabilities 958,631 ------------------- Net Assets $ 14,588,812 =================== Net Assets consist of: Paid in capital $ 25,568,360 Net undistributed investment income (192,786) Net undistributed capital loss (4,279,270) Net unrealized appreciation (depreciation) on investments (6,507,492) ------------------- Net Assets, for 2,825,214 shares $ 14,588,812 =================== Net Asset Value Net Assets Offering price and redemption price per share ($14,588,812 / 2,825,214) $ 5.16 ===================
Florida Street Bond Fund Statement of Operations for the six months ended April 30, 2001 (Unaudited) Investment Income Dividend income $ 1,200 Interest income 2,142,365 ------------------- Total Income 2,143,565 Expenses Investment advisory fee 83,965 Trustees fees 417 ------------------- Total operating expenses before reimbursement 84,382 Expenses reimbursed by advisor (417) ------------------- Total expenses 83,965 ------------------- Net Investment Income 2,059,600 ------------------- Realized & Unrealized Gain (Loss) Net realized gain (loss) on investment securities (1,199,282) Change in net unrealized appreciation (depreciation) on investment securities (1,642,950) ------------------- Net realized & unrealized gain (loss) on investment securities (2,842,232) ------------------- Net increase (decrease) in net assets resulting from operations $ (782,632) ===================
Florida Street Bond Fund Statement of Changes in Net Assets Six months Year ended ended April, 2001 October 31, (Unaudited) 2000 ------------------ ------------------- Increase in Net Assets Operations Net investment income $ 2,059,600 $ 2,541,908 Net realized gain (loss) on investment securities (1,199,282) (2,416,166) Change in net unrealized appreciation (depreciation) (1,642,950) 55,266 ------------------ ------------------- Net increase (decrease) in net assets resulting from operations (782,632) 181,008 ------------------ ------------------- Distributions to shareholders From net investment income (2,252,386) (3,338,264) From net realized gain - - ------------------ ------------------- Total distributions (2,252,386) (3,338,264) ------------------ ------------------- Share Transactions Net proceeds from sale of shares 703,160 4,098,352 Shares issued in reinvestment of distributions 2,251,277 3,308,492 Shares redeemed (2,078,531) (5,795,524) ------------------ ------------------- Net increase (decrease) in net assets resulting from share transactions 875,906 1,611,320 ------------------ ------------------- Total increase (decrease) in net assets (2,159,112) (1,545,936) Net Assets Beginning of period 16,747,924 18,293,860 ------------------ ------------------- End of period $ 14,588,812 $ 16,747,924 ================== =================== Capital Share Transactions: Shares sold 121,698 549,356 Shares issued on reinvestment of dividends 395,998 462,439 Shares repurchased (345,779) (787,691) ------------------ ------------------- Net increase (decrease) from capital share transactions 171,917 224,104 ================== ===================
Florida Street Bond Fund Financial Highlights Six months Year Year Year Period ended ended ended ended ended April 30, 2001 October 31, October 31, October 31, October 31, (Unaudited) 2000 1999 1998 1997 (a) --------------- ---------------- ---------------- ---------------- ---------------- Selected Per Share Data Net asset value, beginning of period $ 6.31 $ 7.53 $ 9.16 $ 9.95 $ 10.00 --------------- ---------------- ---------------- ---------------- ---------------- Income from investment operations Net investment income 0.77 1.03 1.51 0.85 0.21 Net realized and unrealized loss (1.07) (0.89) (1.60) (0.79) (0.12) --------------- ---------------- ---------------- ---------------- ---------------- Total from investment operations (0.30) 0.14 (0.09) 0.06 0.09 --------------- ---------------- ---------------- ---------------- ---------------- Less Distributions From net investment income (0.85) (1.36) (1.51) (0.85) (0.02) From net realized gain - - (0.03) - (0.12) --------------- ---------------- ---------------- ---------------- ---------------- Total distributions (0.85) (1.36) (1.54) (0.85) (0.14) --------------- ---------------- ---------------- ---------------- ---------------- Net asset value, end of period $ 5.16 $ 6.31 $ 7.53 $ 9.16 $ 9.95 =============== ================ ================ ================ ================ Total Return (4.75)% 1.14% (1.45)% 0.33% 0.90% (b) Ratios and Supplemental Data Net assets, end of period (000) $14,589 $16,748 $18,294 $19,929 $7,289 Ratio of expenses to average net assets 1.15% 1.16% 0.75% 0.75% 0.53% (c) Ratio of expenses to average net assets before reimbursement 1.15% 1.18% 1.17% 1.10% 1.10% (c) Ratio of net investment income to average net assets 28.10% 14.27% 17.77% 8.73% 3.95% (c) Ratio of net investment income to average net assets before reimbursement 28.09% 14.25% 17.35% 8.38% 3.38% (c) Portfolio turnover rate 134.84% 161.53% 129.38% 10.45% 60.55% (c) (a) For the period August 4, 1997 (commencement of operations) to October 31, 1997. (b) For periods of less than a full year, total returns are not annualized. (c) Annualized
Florida Street Bond Fund Notes to Financial Statements April 30, 2001 (Unaudited) NOTE 1. ORGANIZATION Florida Street Bond Fund (the "Fund") was organized as a series of the AmeriPrime Funds (the "Trust") on June 10, 1997 and commenced operations on August 4, 1997. 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 one of the series of funds currently authorized by the Trustees. The Trust Agreement permits the Board of Trustees issue an unlimited number of shares of beneficial interest of separate series without par value. The Fund's investment objective is to provide long-term growth of capital. The investment advisor to the Fund is Commonwealth Advisors, Inc. (the "Advisor"). 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 Advisor's opinion, the last bid price does not accurately reflect the current value of the security. All other securities for which over-the-counter market quotations are readily available are valued at their last bid price. When market quotations are not readily available, when the Advisor determines the last bid price does not accurately reflect the current value or when restricted securities are being valued, such securities are valued as determined in good faith by the Advisor, in conformity with guidelines adopted by and subject to review of the Board of Trustees. 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. 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. Florida Street Bond Fund Notes to Financial Statements April 30, 2001 (Unaudited) - continued NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES The Fund retains Commonwealth Advisors, Inc. to manage the Fund's investments. Walter A. Morales, the Advisor's president and chief investment manager, is responsible for the day-to-day management 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 of Trustees 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 the Fund's expenses, the Fund is obligated to pay the Advisor a fee computed and accrued daily and paid monthly at an annual rate of 1.10% 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 Funds' expenses, except those specified above, are paid by the Advisor. For the six months ended April 30, 2001, the Advisor earned a fee of $83,965 from the Fund. At April 30, 2001 the fund owed the Advisor $32,015 in advisory fees and the Advisor owed the fund $52,747 for the reimbursement of expenses. The Fund retains Unified Fund Services, Inc., a wholly owned subsidiary of Unified Financial Services, Inc., 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. (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 six months ended April 30, 2001. A Trustee and officer of the Trust may be deemed to be an affiliate of the Distributor. NOTE 4. OPERATING POLICIES Restricted Securities- The Fund is permitted to invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's schedule of investments. Short Sales- A Fund may sell a security it does not own in anticipation of a decline in the fair value of that security. When a fund sells a security short, it must borrow the security sold short and deliver it to the broker-dealer through which it made the short sale as collateral for its obligation to deliver the security upon conclusion of the sale. A gain, limited to the price at which the Fund sold the security short, or a loss, unlimited in size, will be recognized upon the termination of a short sale. NOTE 5. INVESTMENTS For the six months ended April 30, 2001, purchases and sales of investment securities, other than short-term investments, aggregated $18,929,166 and $19,540,972, respectively. The gross unrealized appreciation for all securities totaled $691,160 and the gross unrealized depreciation for all securities totaled $7,198,652 for a net unrealized depreciation of $6,507,492. The aggregate cost of securities for federal income tax purposes at April 30, 2001 was $20,428,771. Florida Street Bond Fund Notes to Financial Statements April 30, 2001 (Unaudited) - continued NOTE 6. ESTIMATES Preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. NOTE 7. RELATED PARTY TRANSACTIONS The 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 April 30, 2001, Charles Schwab & Co. held, for the benefit of others, 93.08% of the outstanding Fund shares in an omnibus account for the benefit of others. NOTE 8. SUBSEQUENT EVENTS Liquidation of the Fund. - ----------------------- The Board of Trustees has decided to redeem all outstanding shares of the Fund and to cease the operations of the Fund, with the proceeds sent to each shareholder's address of record. The Board of Trustees concluded that it was in the best interests of shareholders to cease operations of the Fund. The Administrator indicated to the Board of Trustees that, it was the intention of the Advisor to resign as the investment advisor to the Fund and, as such, the most prudent course would be to liquidate the portfolio as soon as practicable and to determine the Fund's net asset value base upon the liquidated value of the portfolio. In making this decision, the Board of Trustees determined that failure to redeem all shares of the Fund may have adverse consequences to the Fund's shareholders. The Fund ceased operations on November 30, 2001. -----END PRIVACY-ENHANCED MESSAGE-----