-----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, T13qlE8mYtNqWgcPRqRjXlmFLql9ztM4EmBupHFXx2XcbUj2hKBatlZ1Mpehi8AB jFYRSJ1szVcTguMsmL+6pw== 0001035449-02-000341.txt : 20020829 0001035449-02-000341.hdr.sgml : 20020829 20020829115316 ACCESSION NUMBER: 0001035449-02-000341 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020630 FILED AS OF DATE: 20020829 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERIPRIME FUNDS CENTRAL INDEX KEY: 0001000579 IRS NUMBER: 752616671 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-09096 FILM NUMBER: 02752182 BUSINESS ADDRESS: STREET 1: 1793 KINGSWOOD DR STREET 2: STE 200 CITY: SOUTHLAKE STATE: TX ZIP: 76092 BUSINESS PHONE: 8174311297 MAIL ADDRESS: STREET 1: 1793 KINGSWOOD DRIVE STREET 2: SUITE 200 CITY: SOUTHLAKE STATE: TX ZIP: 76092 N-30D 1 annualn30d.txt IMS AUXIER June 30, 2002 Dear Fellow Shareholders, The IMS Capital Value Fund employs a fundamental value approach, diversifying its holdings across all major sectors of the market. The Fund seeks companies that fall into at least one of the advisor's seven strategic focus areas. The Fund primarily selects mid-cap companies with positive business momentum that appear undervalued on a fundamental basis. The IMS Capital Value Fund grew substantially in the first half of this year. Fund assets increased from $11.7 million on December 31, 2001 to $17.1 million by June 30, 2002. The value style of investing continued its recent trend of posting better results than the growth style of investing, which has helped the IMS Capital Value Fund retain and grow its shareholder base. We are proud of the Fund's consistent performance, its adherence to the principles of value investing, and the way it has held up during this tough market cycle. So far this year, the Fund is down only 4.58%, while the market, as measured by the S & P 500 Index, is down over 13%. We view the Fund as a partnership with our shareholders. We all have the same objective and want the same results to take as little risk as possible, while posting better than market returns. Please be confident that regardless of market conditions, we are working hard to reward you for the confidence and trust you have placed in our hands. We continually strive towards our goal of making the IMS Capital Value Fund one of the most successful and respected funds in the industry. Sincerely, Carl W. Marker Portfolio Manager IMS Capital Value Fund The prospectus should be read carefully before investing. To request a prospectus for more complete information, including charges and expenses, call toll free 1-800-934-5550. Past performance does not guarantee future results. Shares when redeemed may be worth more or less than their original cost. Distributed by Capital Research Brokerage Services, LLC, Member NASD, SIPC. 107 South Fair Oaks Avenue, Suite 315, Pasadena, Ca 91105 Average Average Annual Annual Averge Annual Fund/Index Six One Three Year Five Year Since Inception Months Year Return Return (August 5, 1996) IMS Capital Value Fund (No Load) -4.48% -1.05% +2.97% +6.69% +8.53% IMS Capital Value Fund (Load Adjusted) -9.96% -6.76% +0.96% +5.34% +8.45% Russell Mid-Cap Value Index +2.86% +1.92% +5.17% +9.09% +12.63%
IMS Capital Russell Mid-Cap Value Fund Value Fund $16,220 $20,186 ---------- -------------- 8/5/96 10,000.00 9,425.00 9/30/96 10,504.37 9,896.25 12/31/96 11,409.73 10,499.45 3/31/97 11,603.96 11,046.10 6/30/97 13,065.51 11,734.13 9/30/97 14,732.05 12,459.85 12/31/97 15,331.28 11,253.69 3/31/98 16,863.41 12,875.93 6/30/98 16,429.88 12,529.04 9/30/98 14,185.88 10,610.91 12/31/98 16,110.49 12,743.30 3/31/99 15,608.87 13,233.03 6/30/99 17,354.26 14,855.28 9/30/99 15,508.25 12,896.34 12/31/99 16,092.71 15,009.48 3/31/00 16,254.91 16,463.84 6/30/00 15,981.83 15,804.83 9/30/00 17,524.22 15,611.68 12/31/00 19,179.24 14,300.25 3/31/01 18,501.91 15,434.82 6/30/01 19,805.51 16,392.11 9/30/01 17,517.96 14,524.80 12/31/01 19,625.29 16,981.78 3/31/02 21,175.19 17,892.73 6/30/02 20,186.23 16,220.39 Past performance does not guarantee future results. This graph shows the value of a hypothetical initial investment of $10,000 in the Fund and the Russell Mid-Cap Value Index on August 5, 1996 (inception of the Fund) and held through June 30, 2002. The index is an unmanaged group of stocks whose total return includes the reinvestment of any dividends and capital gain distributions, but does not reflect expenses, which have lowered the Fund's return. Investors cannot invest directly in any index. The graph and performance table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Please read the prospectus carefully before investing as it contains important information, including information about the risk factors associated with the Fund. Investment return and principal value fluctuate in response to the activities of individual companies and general market and economic conditions. As a result, an investor's shares when redeemed may be worth more or less than their original cost. Top Ten Equity Holdings - June 30, 2002 PacifiCare Health Systems, Inc. 3.65% Office Max, Inc. 3.61% Waste Management, Inc. 3.04% Humana, Inc. 2.74% H & R Block, Inc. 2.69% Manor Care, Inc. 2.68% Boston Scientific Corp. 2.57% Albertson's, Inc. 2.49% Sovereign Bancorp, Inc. 2.44% ConAgra Foods, Inc. 2.42% IMS Capital Value Fund Schedule of Investments June 30, 2002 Common Stocks - 79.2% Shares Value Accident & Health Insurance - 0.2% Conseco, Inc. (a) 20,000 $ 40,000 ------------------ Air Courier Services - 4.1% Airborne, Inc. 20,000 384,000 FedEx Corp. 6,000 320,400 ------------------ 704,400 ------------------ Biological Products (No Diagnostic Substances) - 1.0% Biogen, Inc. (a) 4,000 165,720 ------------------ Computer Communication Equipment - 0.9% 3Com Corp (a) 35,000 154,000 ------------------ Computer Storage Devices - 1.4% Storage Technology Corp. (a) 15,000 239,550 ------------------ Computer Terminals - 0.8% Palm, Inc. (a) 75,000 132,000 ------------------ Crude Petroleum & Natural Gas - 4.3% Dynegy, Inc. 50,000 360,000 Unocal Corp. 10,000 369,400 ------------------ 729,400 ------------------ Dolls & Stuffed Toys - 1.3% Marvel Enterprises, Inc. (a) 40,500 217,890 ------------------ Electric Services - 1.7% FirstEnergy Corp. 8,500 283,730 ------------------ Fats & Oils - 2.3% Archer-Daniels-Midland Co. 30,250 386,897 ------------------ Hospital & Medical Service Plans - 6.4% Humana, Inc. (a) 30,000 468,900 PacifiCare Health Systems, Inc. - Class B (a) 23,000 625,600 ------------------ 1,094,500 ------------------ Life Insurance - 2.0% Lincoln National Corp. 8,000 336,000 ------------------ Meat Packing Plants - 2.4% ConAgra Foods, Inc. 15,000 414,750 ------------------ National Commercial Banks - 1.8% First Tennessee National Corp. 8,000 306,400 ------------------
See accompanying notes which are an integral part of the financial statements. IMS Capital Value Fund Schedule of Investments June 30, 2002 Common Stocks - 83.6% - continued Shares Value Pharmaceutical Preparations - 3.0% Chiron, Corp. (a) 6,000 $ 211,800 Watson Pharmaceuticals, Inc. (a) 12,000 303,240 ------------------ 515,040 ------------------ Radio & TV Broadcasting & Communications Equipment - 0.9% Gilat Satellite Networks Ltd. (a) 20,000 22,000 Motorola, Inc. 9,000 129,780 ------------------ 151,780 ------------------ Refuse Systems - 3.0% Waste Management, Inc. 20,000 521,000 ------------------ Retail - Catalog & Mail - Order Houses - 1.8% Schein Henry, Inc. (a) 7,000 311,500 ------------------ Retail - Drug Stores & Proprietary Stores - 0.9% Rite Aid Corp. (a) 66,000 155,100 ------------------ Retail - Grocery Stores - 2.5% Albertson's, Inc. 14,000 426,440 ------------------ Savings Institution, Federally Chartered - 2.4% Sovereign Bancorp, Inc. 28,000 418,600 ------------------ Security & Commodity Brokers, Dealers, Exchanges Services - 1.0% T. Rowe Price Group, Inc. 5,000 164,400 ------------------ Security Brokers, Dealers & Flotation Companies - 1.7% Knight Trading Group, Inc. (a) 10,000 52,400 Raymond James Financials, Inc. 8,500 244,800 ------------------ 297,200 ------------------ Semiconductors & Related Devices - 2.8% Atmel Corp. (a) 48,000 300,480 LSI Logic Corp. (a) 21,000 183,750 ------------------ 484,230 ------------------ Services - Computer Integrated Systems Design - 3.4% Computer Sciences Corp. (a) 6,000 286,800 Unisys Corp. (a) 33,000 297,000 ------------------ 583,800 ------------------ Services - Health Services - 1.0% Gentiva Health Services, Inc. (a) 20,000 179,800 ------------------ Services - Misc Health & Allied Services - 1.0% Accredo Health, Inc. (a) 3,850 177,667 ------------------
See accompanying notes which are an integral part of the financial statements. IMS Capital Value Fund Schedule of Investments June 30, 2002 Common Stocks - 79.2% - continued Shares Value Services - Personal Services - 4.8% Cendant Corp. (a) 23,000 $ 365,240 H & R Block, Inc. 10,000 461,500 ------------------ 826,740 ------------------ Services - Prepackaged Software - 4.2% Computer Associates International, Inc. 25,000 397,250 Symantec Corp. (a) 10,000 328,500 ------------------ 725,750 ------------------ Services - Skilled Nursing Care Facilities - 2.7% Manor Care, Inc. (a) 20,000 460,000 ------------------ Specialty - 3.6% OfficeMax, Inc. (a) 105,000 618,450 ------------------ Sugar & Confectionary Products - 1.6% Wrigley, William Jr. Co. 5,000 276,750 ------------------ Surgical & Medical Instruments & Apparatus - 2.6% Boston Scientific Corp. (a) 15,000 439,800 ------------------ Telephone Communications (No Radiotelephone) - 3.7% AT&T Corp. 23,500 251,450 CenturyTel, Inc. 13,000 383,500 ------------------ 634,950 ------------------ TOTAL COMMON STOCKS (Cost $12,222,921) 13,574,234 ------------------ Unit Investment Trusts - 5.2% S&P Midcap 400 SPDR Trust, Series 1 10,000 897,500 ------------------ TOTAL UNIT INVESTMENT TRUSTS (Cost $973,450) Principal Amount Value Corporate Bonds - 5.3% Marvel Enterprises, 12.00%, 06/15/09 TOTAL CORPORATE BONDS (Cost $749,729) 900,000 904,500 ------------------ Money Market Securities - 10.4% First American Treasury Obligation Fund - Cl S, 1.29% (b) 950,725 950,725 Huntington Money Fund - Invest A, 0.76% (b) 830,000 830,000 ------------------ TOTAL MONEY MARKET SECURITIES (Cost $1,780,725) 1,780,725 ------------------ TOTAL INVESTMENTS (Cost $15,726,825) - 100.1% $ 17,156,959 ------------------ Liabilities in excess of other assets - (0.1)% (13,061) ------------------ TOTAL NET ASSETS - 100.0% $ 17,143,898 ================== (a) Non-income producing. (b) Variable rate security; the coupon rate shown represents the rate at June 30, 2002.
See accompanying notes which are an integral part of the financial statements. IMS Capital Value Fund Statement of Assets and Liabilities June 30, 2002 Assets Investments in securities, at value (cost $15,726,825) $ 17,156,959 Interest receivable 5,510 Dividends receivable 9,498 Receivable for fund shares sold 15,810 Receivable from advisor 4,020 ----------------- Total assets 17,191,797 ----------------- Liabilities Redemptions payable 22,273 Other payables and accrued expenses 25,626 ----------------- Total liabilities 47,899 ----------------- Net Assets $ 17,143,898 ================= Net Assets consist of: Paid in capital 16,184,517 Accumulated undistributed net investment income (loss) 39,600 Accumulated net realized gain (loss) on investments (510,353) Net unrealized appreciation (depreciation) on investments 1,430,134 ----------------- Net Assets, for 1,437,558 shares $ 17,143,898 ================= Net Asset Value Net asset value per share ($17,143,898 / 1,437,558) $ 11.93 ================= Offering price per share ($11.93 / .9425%) $ 12.66 =================
See accompanying notes which are an integral part of the financial statements. IMS Capital Value Fund Statement of Operations Year ended June 30, 2002 Investment Income Dividend income $ 181,190 Interest income 73,731 -------------- Total Income 254,921 -------------- Expenses Investment advisor fee 170,884 Transfer agent expenses 34,559 Administration expenses 27,133 Fund accounting expenses 19,200 Legal expenses 12,000 Registration expenses 8,300 Auditing expenses 7,000 Printing expenses 6,954 Organizational expenses 4,598 Custodian expenses 3,600 Pricing expenses 3,360 Trustee expenses 2,178 Insurance expenses 1,527 Miscellaneous expenses 1,400 -------------- Total Expenses 302,693 Reimbursed expenses (87,372) -------------- -------------- Total operating expenses 215,321 -------------- -------------- Net Investment Income (Loss) 39,600 -------------- Realized & Unrealized Gain (Loss) Net realized gain (loss) on investment securities (319,190) Change in net unrealized appreciation (depreciation) on investment securities (47,829) -------------- -------------- Net realized and unrealized gain (loss) on investment securities (367,019) -------------- -------------- Net increase (decrease) in net assets resulting from operations $ (327,419) ==============
See accompanying notes which are an integral part of the financial statements. IMS Capital Value Fund Statement of Changes In Net Assets Year Year Ended Ended June 30, June 30, Increase (Decrease) in Net Assets 2002 2001 --------------- --------------- Operations Net investment income (loss) $ 39,600 $ (45,064) Net realized gain (loss) on investment securities (319,190) 1,471,980 Change in net unrealized appreciation (depreciation) (47,829) (1,026,632) --------------- --------------- Net increase (decrease) in net assets resulting from operations (327,419) 400,284 --------------- --------------- Distributions From net realized gain (1,491,184) (405,947) --------------- --------------- Total distributions (1,491,184) (405,947) --------------- --------------- Capital Share Transactions Proceeds from shares sold 13,518,420 2,031,252 Reinvestment of distributions 1,453,985 394,976 Amount paid for shares repurchased (7,498,133) (2,516,910) --------------- --------------- Net increase (decrease) in net assets resulting from share transactions 7,474,272 (90,682) --------------- --------------- Total Increase (Decrease) in Net Assets 5,655,669 (96,345) --------------- --------------- Net Assets Beginning of period 11,488,229 11,584,574 --------------- --------------- End of period [including accumulated undistributed net investment income of $39,600 and $0, respectively] $ 17,143,898 $ 11,488,229 =============== =============== Capital Share Transactions Shares sold 1,088,375 148,372 Shares issued in reinvestment of distributions 121,978 32,642 Shares repurchased (601,161) (185,318) --------------- --------------- Net increase (decrease) from capital transactions 609,192 (4,304) =============== ===============
See accompanying notes which are an integral part of the financial statements. IMS Capital Value Fund Financial Highlights Year Ended Year ended Year ended Period ended Year Ended Year Ended June 30, June 30, June 30, June 30, Oct. 31, Oct. 31, 2002 2001 2000 1999 (c) 1998 1997 ------------ ----------- ------------ ----------- ------------ ----------- Selected Per Share Data Net asset value, beginning of period $ 13.87 $ 13.91 $ 14.56 $ 11.28 $ 12.06 $ 10.76 ------------ ----------- ------------ ----------- ------------ ----------- Income from investment operations Net investment income (loss) 0.04 (0.05) (0.05) 0.00 (0.06) (0.08) Net realized and unrealized gain (loss) (0.19) 0.50 0.88 3.28 0.12 1.38 ------------ ----------- ------------ ----------- ------------ ----------- Total from investment operations (0.15) 0.45 0.83 3.28 0.06 1.30 ------------ ----------- ------------ ----------- ------------ ----------- Less Distributions to shareholders: From net investment income 0.00 0.00 0.00 0.00 (0.03) 0.00 From net realized gain (1.79) (0.49) (1.48) 0.00 (0.81) 0.00 ------------ ----------- ------------ ----------- ------------ ----------- Total distributions (1.79) (0.49) (1.48) 0.00 (0.84) 0.00 ------------ ----------- ------------ ----------- ------------ ----------- Net asset value, end of period $ 11.93 $ 13.87 $ 13.91 $ 14.56 $ 11.28 $ 12.06 ============ =========== ============ =========== ============ =========== Total Return (1.05)% (3.72)% 6.39% 29.08% (b) 2.27% 12.08% Ratios and Supplemental Data Net assets, end of period (000) $ 17,144 $11,488 $11,585 $11,608 $11,524 $9,932 Ratio of expenses to average net assets 1.59% 1.59% 1.59% 1.59% (a) 1.73% 1.97% Ratio of expenses to average net assets before reimbursement 2.23% 2.28% 2.08% 2.50% (a) 2.34% 2.54% Ratio of net investment income to average net assets 0.29% (0.39)% (0.36)% (0.04)(a) (0.53)% (0.64)% Ratio of net investment income to average net assets before reimbursement (0.35)% (1.09)% (0.84)% (0.95)(a) (1.14)% (1.20)% Portfolio turnover rate 33.40% 77.87% 75.69% 45.19% 81.74% 34.76% (a) Annualized. (b) For periods of less than a full year, total return is not annualized. (c) For the period November 1, 1998 through June 30, 1999.
See accompanying notes which are an integral part of the financial statements. IMS Capital Value Fund Notes to Financial Statements June 30, 2002 NOTE 1. ORGANIZATION IMS Capital Value Fund (the "Fund") was organized as a diversified series of AmeriPrime Funds (the "Trust") on July 25, 1996 and commenced operations on August 5, 1996. The Trust is established under the laws of Ohio by an Agreement and Declaration of Trust dated August 8, 1995 (the "Trust Agreement"). The Trust Agreement permits the Board of Trustees to issue an unlimited number of shares of beneficial interest of separate series without par value. The Fund is one of a series of funds currently authorized by the Board of Trustees. The Fund's investment objective is to provide long-term growth of capital. The investment advisor of the Fund is IMS Capital Management, 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 Fund's Advisor, the last bid price does not accurately reflect the current value of the security. All other securities for which over-the-counter market quotations are readily available are valued at their last bid price. When market quotations are not readily available, when the Advisor determines the last bid price does not accurately reflect the current value or when restricted securities are being valued, such securities are valued as determined in good faith by the Fund's 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. IMS Capital Value Fund Notes to Financial Statements June 30, 2002 NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES The Fund retains IMS Capital Management, Inc. to manage the Fund's investments. Carl W. Marker, Chairman and President of the Advisor, is primarily responsible for the day-to-day management of the Fund's portfolio. Under the terms of the management agreement (the "Agreement"), the Advisor manages the Fund's investments subject to approval of the Board of Trustees. As compensation for its management services, the Fund is obligated to pay the Advisor a fee computed and accrued daily and paid monthly at an annual rate of 1.26% of the average daily net assets of the Fund. For the year ended June 30, 2002, the advisor earned fees of $170,884 from the Fund. The Advisor has contractually agreed to waive all or a portion of its management fees and/or reimburse the Fund for expenses it incurs to maintain total operating expenses at the rate of 1.59% of average daily net assets through October 31, 2006. For the year ended June 30, 2002, the Advisor reimbursed expenses of $87,372. The Fund retains Unified Fund Services, Inc. ("Unified") to manage the Fund's business affairs and provide the Fund with administrative services, including all regulatory reporting and necessary office equipment and personnel. For those services, Unified receives a monthly fee from the Fund equal to an annual rate of 0.20% of the Fund's assets with no monthly minimum. For the year ended June 30, 2002, Unified earned $27,133 from the Fund for administrative services. The Fund also retains 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 $750). For the year ended June 30, 2002, Unified earned $34,559 from the Fund for transfer agency services. 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, and 0.0250% of the Fund's assets from $100 million to $300 million, and 0.0200% of the Fund's assets over $300 million (subject to various monthly minimum fees, the maximum being $2,000 per month for assets of $20 million to $100 million). For the year ended June 30, 2002, Unified earned $19,200 from the Fund for fund accounting services. A Trustee and the officers of the Trust are members of management and /or employees of Unified. Unified Financial Securities, Inc., is a wholly owned subsidiary of Unified Financial Securities, Inc. A Trustee and officer of the Trust may be deemed to be an affiliate of Unified Financial Securities, Inc. Unified Financial Securities, Inc. received commissions totaling $355 for the sale of fund shares. NOTE 4. INVESTMENTS For the year ended June 30, 2002, purchases and sales of investment securities, other than short-term investments, aggregated $9,947,477 and $4,123,377, respectively. As of June 30, 2002, the gross unrealized appreciation for all securities totaled $2,871,858 and the gross unrealized depreciation for all securities totaled $1,441,724 for net unrealized appreciation of $1,430,134. The aggregate cost of securities for federal income tax purposes at June 30, 2002 was $15,862,774. The difference between book cost and tax cost consists of wash sales in the amount of $135,949. 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. IMS Capital Value Fund Notes to Financial Statements June 30, 2002 NOTE 6. LOSS CARRYFORWARDS At June 30, 2002, the Fund had available for federal tax purposes a capital loss carryforward of $319,190, which expires in 2010. Capital loss carryforwards are available to offset future realized capital gains. To the extent that these carryforwards are used to offset future capital gains, it is probable that the amount, which is offset, will not be distributed to shareholders. NOTE 7. ELECTION OF TRUSTEES At a special meeting of the shareholders held on May 29, 2002, a vote was held to elect members to serve on the Board of Trustees. The vote tally for each Trustee is as follows: For Withheld Total Gary Hippenstiel 10,516,210.432 648,472.896 11,164,683.328 Mark Muller 10,856,443.432 308,239.896 11,164,683.328 Ken Trumpfheller 10,493,506.432 671,176.896 11,164,683.328 Richard Wright 10,858,138.432 306,544.896 11,164,683.328 Information Regarding Trustees and Officers The Board of Trustees supervises the business activities of the Trust. Each Trustee serves as a trustee until the termination of the Trust unless the Trustee dies, resigns, retires or is removed. The following table provides information regarding each Trustee who is not an "interested person" of the Trust, as defined in the Investment Company Act of 1940. - --------------------------------------------------- ------------------- --------------------- ------------------------ Number of Portfolios Position(s) Held Length of in Fund Complex** Name, Age and Address with Trust Time Served Overseen by Trustee - --------------------------------------------------- ------------------- --------------------- ------------------------ Mark W. Muller Trustee Trustee since 1999 35 5016 Cedar River Tr. Fort Worth, Texas 76137 Year of Birth: 1964 - --------------------------------------------------- ------------------- --------------------- ------------------------ - ----------------------------------------------------------------------- ---------------------------------------------- Principal Occupations During Past 5 Years Other Directorships Held by Trustee - ----------------------------------------------------------------------- ---------------------------------------------- - ----------------------------------------------------------------------- ---------------------------------------------- President of JAMAR Resources, Inc., a manufacturers representative None firm, September 2001 to present. Account Manager for SCI, Inc., a custom manufacturer, from April 2000 to September 2001. Account Manager for Clarion Technologies, a manufacturer of automotive, heavy truck, and consumer goods, from 1996 to April 2000. From 1986 to 1996, an engineer for Sicor, a telecommunication hardware company. - ----------------------------------------------------------------------- ---------------------------------------------- - --------------------------------------------------- ------------------- --------------------- ------------------------ Number of Portfolios Position(s) Held Length of in Fund Complex** Name, Age and Address with Trust Time Served Overseen by Trustee - --------------------------------------------------- ------------------- --------------------- ------------------------ - --------------------------------------------------- ------------------- --------------------- ------------------------ Gary E. Hippenstiel Trustee Trustee since 1995 17 600 Jefferson Street Suite 350 Houston, TX 77002 Year of Birth: 1947 - --------------------------------------------------- ------------------- --------------------- ------------------------ - ----------------------------------------------------------------------- ---------------------------------------------- Principal Occupations During Past 5 Years Other Directorships Held by Trustee - ----------------------------------------------------------------------- ---------------------------------------------- - ----------------------------------------------------------------------- ---------------------------------------------- Director, Vice President and Chief Investment Officer of Legacy Trust None Company since 1992; President and Director of Heritage Trust Company from 1994-1996; Vice President and Manager of Investments of Kanaly Trust Company from 1988 to 1992. - ----------------------------------------------------------------------- ---------------------------------------------- - --------------------------------------------------- ------------------- --------------------- ------------------------ Number of Portfolios Position(s) Held Length of in Fund Complex Name, Age and Address with Trust Time Served Overseen by Trustee - --------------------------------------------------- ------------------- --------------------- ------------------------ - --------------------------------------------------- ------------------- --------------------- ------------------------ Richard J. Wright, Jr. Trustee Trustee since 1999 35 13532 N. Central Expressway MS 3800 Dallas, Texas 75243 Year of Birth: 1962 - --------------------------------------------------- ------------------- --------------------- ------------------------ - ----------------------------------------------------------------------- ---------------------------------------------- Principal Occupations During Past 5 Years Other Directorships Held by Trustee - ----------------------------------------------------------------------- ---------------------------------------------- - ----------------------------------------------------------------------- ---------------------------------------------- Various positions with Texas Instruments, a technology company, since None 1985, including the following: Program Manager for Semi-Conductor Business Opportunity Management System, 1998 to present; Development Manager for web-based interface, 1999 to present; Systems Manager for Semi-Conductor Business Opportunity Management System, 1997 to 1998; Development Manager for Acquisition Manager, 1996-1997; Operations Manager for Procurement Systems, 1994-1997. - ----------------------------------------------------------------------- ---------------------------------------------- The following table provides information regarding each Trustee who is an "interested person" of the Trust, as defined in the Investment Company Act of 1940, and each officer of the Trust. - --------------------------------------------------- ------------------- --------------------- ------------------------ Number of Portfolios Position(s) In Length of in Fund Complex** Name, Age and Address Fund Complex** Time Served Overseen by Trustee - --------------------------------------------------- ------------------- --------------------- ------------------------ - --------------------------------------------------- ------------------- --------------------- ------------------------ Kenneth D. Trumpfheller* President, Trustee and 35 1725 E. Southlake Blvd. Secretary and President since 1995 Suite 200 Trustee Secretary since 2000 Southlake, Texas 76092 Year of Birth: 1958 - --------------------------------------------------- ------------------- --------------------- ------------------------ - ----------------------------------------------------------------------- ---------------------------------------------- Principal Occupations During Past 5 Years Other Directorships Held by Trustee - ----------------------------------------------------------------------- ---------------------------------------------- - ----------------------------------------------------------------------- ---------------------------------------------- President and Managing Director of Unified Fund Services, Inc., the None Fund's transfer agent, fund accountant and administrator, since October 2000. President, Treasurer and Secretary of AmeriPrime Financial Services, Inc., a fund administrator, (which merged with Unified Fund Services, Inc.) from 1994 through October 2000. President, Treasurer and Secretary of AmeriPrime Financial Securities, Inc., the Trust's distributor through December 2000, from 1994 through December 2000. - ----------------------------------------------------------------------- ---------------------------------------------- - --------------------------------------------------- ------------------- --------------------- ------------------------ Number of Portfolios Position(s) in Length of in Fund Complex** Name, Age and Address Fund Complex Time Served Overseen by Trustee - --------------------------------------------------- ------------------- --------------------- ------------------------ - --------------------------------------------------- ------------------- --------------------- ------------------------ Robert A. Chopyak Treasurer and Treasurer and CFO N/A 1725 E. Southlake Blvd. Chief Financial since 2000 Suite 200 Officer Southlake, Texas 76092 Year of Birth: 1968 - --------------------------------------------------- ------------------- --------------------- ------------------------ - ----------------------------------------------------------------------- ---------------------------------------------- Principal Occupations During Past 5 Years Other Directorships Held by Trustee - ----------------------------------------------------------------------- ---------------------------------------------- - ----------------------------------------------------------------------- ---------------------------------------------- Assistant Vice-President of Financial Administration of Unified Fund None Services, Inc., the Fund's transfer agent, fund accountant and administrator, since August 2000. Manager of AmeriPrime Financial Services, Inc. from February 2000 to August 2000. Self-employed, performing Y2K testing, January 1999 to January 2000. Vice President of Fund Accounting, American Data Services, Inc., a mutual fund services company, October 1992 to December 1998. - ----------------------------------------------------------------------- ---------------------------------------------- *Mr. Trumpfheller in an "interested person" of the Trust because he is an officer of the Trust. In addition, he may be deemed to be an "interested person" of the Trust because he is a registered principal of the Trust's distributor. **As of December 31, 2001, the term "Fund Complex" refers to AmeriPrime Funds and AmeriPrime Advisors Trust. The Statement of Additional Information includes additional information about the Trustees and is available without charge upon request, by calling toll free at 1-800-934-5550.
To the Shareholders and Trustees IMS Capital Value Fund (a series of the AmeriPrime Funds) In planning and performing our audit of the financial statements of IMS Capital Value Fund (the "Fund") for the fiscal year ended June 30, 2002, we considered its internal control, including control activities for safeguarding securities, in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and to comply with the requirements of Form N-SAR, not to provide assurance on internal control. The management of the Fund is responsible for establishing and maintaining internal control. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of controls. Generally, controls that are relevant to an audit pertain to the entity's objective of preparing financial statements for external purposes that are fairly presented in conformity with generally accepted accounting principles. Those controls include the safeguarding of assets against unauthorized acquisition, use or disposition. Because of inherent limitations in internal control, errors or fraud may occur and not be detected. Also, projection of any evaluation of internal control to future periods is subject to the risk that it may become inadequate because of changes in conditions or that the effectiveness of the design and operation may deteriorate. Our consideration of internal control would not necessarily disclose all matters in internal control that might be material weaknesses under standards established by the American Institute of Certified Public Accountants. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements caused by error or fraud in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. However, we noted no matters involving internal control and its operation, including controls for safeguarding securities, that we consider to be material weaknesses as defined above as of June 30, 2002. This report is intended solely for the information and use of management and the Board of Trustees of the Fund and the Securities and Exchange Commission and is not intended to be and should not be used by anyone other than these specified parties. McCurdy & Associates CPA's, Inc. Westlake, Ohio July 17, 2002 AUXIER FOCUS FUND PERFORMANCE UPDATE JUNE 30, 2002 The table below summarizes the performance for the quarter, six months, and year ended June 30, 2002. Average Annual 3 Months 6 Months 1 Year Total Return Cumulative Cumulative Average Annual Since Inception Return Return Total Return (July 9, 1999) -------------------------------------------------------------------------- Auxier Focus Fund -5.90% -3.49% 0.07% 5.25% S&P 500 Stock Index -13.39% -13.15% -17.97% -9.97%
Auxier Focus Fund S&P 500Index 7/9/99 10,000.00 10,000.00 7/31/99 10,020.00 9,472.75 8/31/99 10,040.00 9,425.85 9/30/99 10,070.00 9,167.77 10/31/99 10,450.00 9,747.67 11/30/99 10,260.00 9,934.71 12/31/99 10,293.80 10,519.48 1/31/00 10,414.20 9,991.02 2/29/00 10,133.28 9,802.09 3/31/00 10,574.73 10,760.40 4/28/00 10,233.61 10,436.78 5/31/00 10,012.88 10,222.53 6/30/00 10,022.91 10,474.59 7/31/00 9,912.55 10,310.98 8/31/00 10,374.07 10,951.08 9/30/00 10,464.36 10,373.08 10/31/00 10,394.13 10,329.08 11/30/00 10,173.41 9,515.34 12/29/00 10,711.08 9,562.02 1/31/01 10,975.80 9,901.06 2/28/01 10,904.53 8,998.85 3/31/01 10,782.35 8,429.08 4/30/01 11,108.17 9,083.59 5/31/01 11,556.16 9,144.53 6/30/01 11,637.61 8,921.75 7/31/01 11,820.88 8,834.18 8/31/01 11,790.33 8,281.70 9/30/01 11,138.71 7,612.99 10/31/01 11,179.44 7,758.24 11/30/01 11,861.61 8,353.20 12/31/01 12,067.67 8,426.50 1/31/02 11,944.32 8,303.52 2/28/02 12,005.59 8,143.35 3/31/02 12,376.04 8,449.65 4/30/02 12,324.64 7,937.59 5/31/02 12,406.88 7,879.32 6/30/02 11,646.22 7,318.07 This graph, prepared in accordance with SEC regulations, shows the value of a hypothetical initial investment of $10,000 in the Fund and the S&P 500 Index on July 9, 1999 (inception of the Fund) and held through June 30, 2002. The S&P 500 Index is a widely recognized unmanaged index of common stock prices and is representative of a broader market and range of securities than is found in the Fund portfolio. Individuals cannot invest directly in the index. Performance figures reflect the change in value of the stocks in the index, and reinvestment of dividends. The index returns do not reflect expenses, which have been deducted from the Fund's return. The performance of the Fund is computed on a total return basis, which includes reinvestment of all dividends. The returns shown do not reflect deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. THE FUND'S RETURN REPRESENTS PAST PERFORMANCE AND DOES NOT PREDICT FUTURE RESULTS. Investment returns and the principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. As of June 30, 2002, the Auxier Focus Fund held a 2.5% position in Guidant Corp. (GDT) and a 0.7% position in Philip Morris Cos. (MO). For a prospectus and more information, including charges and expenses, call toll free 1-877-328-9437. 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, 431 N. Pennsylvania St. Indianapolis, IN 46204. Member NASD, SIPC Auxier Focus Fund Management Discussion of Fund Performance Dear Shareholders: As I write this letter, the market as measured by the S&P 500 has dropped over 42% from its high reached in 2000. This compares to a 42.4% drop in 1973-74. In 1975 the market recovered 31.5%. The good news is that after the sharpest decline in 28 years, and one of the longest bear markets on record, a number of high quality companies are finally coming down to price points that represent interesting risk/reward opportunities. Our equity strategy for the Fund is to invest when exceptional companies become available at bargain prices. This strategy requires patience, as exceptional companies do not frequently become available at these prices. When the general price level is high (like the past 3-4 years) we have put a higher percentage of money to work in bonds, cash, or "work-out" situations. A "work-out" is an arbitrage situation with a definite timetable that tends to be shorter term in nature. When prices drop, and the "margin of safety" improves, we move funds into quality undervalued common stocks. This price/value discipline drives the allocation process. I am more willing to take a time risk, than a price risk. Due to the powerful positive effect of steady compounding an investor is wise to look down first. Priority one, what can we lose? In this environment the primary objective is to identify improving fundamentals where the price is down due to irrational emotional selling that does not appear to be related to the prospects of the business. Today's rising measures of investor fear and pessimism are encouraging. The bullish sentiment has recently declined below 30%. The volatility index that measures fear in the market (VIX Index) recently hit a level not seen since the 1987 crash. It is a much better time to be shopping for investments when the mood is dour and expectations are low. This is where solid research and knowing current underlying operating trends allows an investor to be able to appraise the asset better than the market. The day-to-day research effort throughout the year is vital because when prices drop you need conviction to decide whether the drop is temporary or long-term in nature. In a post-bubble environment investors tend to revisit the fundamentals of investing and seek benchmarks that were ignored in the bubble. Basics like cash flow, dividends, conservative accounting, price-to-sales, price-to-earnings etc. grow in importance over price momentum. Investors reverse course from the fear/optimism sentiment and begin valuing companies based on the cash the business generates, as opposed to the "hype" or excitement behind a story. We are currently in such a reversion to the mean where your stock purchases should be stringently researched and scrutinized top-to-bottom. Fortunately, value investors perform much better in this type of climate than in a speculative mania. Deciphering misappraisals and mistakes by the market will be a key to above-average returns going forward. There are no new eras, so one must diligently monitor market prices vs. private market values and replacement values of the companies in the portfolio to insure against the potential of permanent capital loss. AREAS OF CONCERN Balance sheet analysis takes on increased importance now that corporate debt levels are hovering around historical highs, roughly 45% of GDP (and quite possibly understated due to numerous creative financing techniques). According to Moody's, over 771 US companies have not disclosed the "ratings triggers" clauses that materially benefit the senior creditors or banks if a company's credit rating is cut. This can seriously impact the financial health of a business in the event of a debt downgrade to junk status. Furthermore, as corporations work to clean up their debt/equity ratios, the risk of dilution to the common shareholder is magnified. The level of personal debt as a percentage of the economy is still close to 75% vs. 63% in the last recession (SOURCE: Financial Times). Excessive debt levels here can negatively impact growth as at some point consumers need to stop spending beyond their means and start saving. This could remove potential buying power from the economy. Deregulation is another worry - it is great for consumers but terrible for shareholders. As an investor you ideally want a de facto monopoly or at least a company whose industry has formidable barriers - not hundreds of competitors bankrolled by the bubble's incessant stock offerings. For example, Philip Morris has consistently enriched shareholders over the past 50 years. One reason: the company was so maligned by critics of smoking that there has never been enough excitement on Wall Street to create an oversupply of stock. Still, Philip Morris prospers with relatively constant demand, high barriers to entry, few competitors, and government mandated price increases. The $2.32 dividend today is more than the 1982 share price (adjusted for stock splits). With a projected dividend increase in August the yield approaches 6%. Contrast that with the 1996 deregulation of telecom and electric utilities, two industries that were subsequently swamped with capital and new entrants, setting the stage for some breathtaking bankruptcies. Looking forward, we are entering a period where the good companies are being thrown out with the bad. Typically, in the later stages of a bear market, price declines are frightening with nearly all companies subjected to tremendous selling pressure. This is the "wash out" stage and should be viewed as an opportunity to buy the world's greatest businesses "on sale." It is a time to upgrade in quality. Again, we are looking for those businesses that enjoy improving operating trends, yet their shares are being tossed out because of investors' fear and irrational behavior. This is still an environment that requires careful selectivity. The valuations of many large companies are too expensive if you properly expense stock options, use realistic pension-fund projections with normalized profit margins and sales growth. Excessive stock-option compensation has fueled the incentive to inflate earnings aggressively in order to cash out quickly on share price moves. While most proxy statements are still disappointing in this regard, more and more abusive compensation issues are being publicized. EXAMPLE OF A BUSINESS REPRESENTING OUR INVESTMENT CRITERIA Guidant Corp. (ticker GDT), a top holding of the Fund, represents the investment criteria we look for. For starters, the Indianapolis-based maker of medical devices for the heart has a strong balance sheet consisting of very little debt (17.4% long-term debt to stockholder's equity), a solid current ratio of 2.33 (current assets divided by current liabilities), and holds $2.25 in cash per diluted share. When Guidant released second quarter earnings on July 18th, they reported double-digit sales and earnings growth across all product groups, and projected double-digit sales and earnings growth for the second half of 2002. This marked the 33rd quarter out of the last 34 quarters Guidant has reported earnings in-line with, or greater than expectations. Despite this consistency, the company trades at a forward PE multiple of only 14.3, a far cry from its five-year low PE of 23.8. Finally, Guidant's business model does not require a high amount of capital expenditures (the investment necessary to continue daily operations). Thus the company produces a high amount of free cash flow. With the combination of a strong balance sheet, consistent earnings numbers, favorable business prospects, a cash-flow friendly business model and a purchase price representing a margin of safety, we believe Guidant has the potential to produce above-average returns for shareholders. IN SUMMARY In these rough seas it is very important to have an enduring investment philosophy to rely on. In order to finish and win the race you have to first stay in the race. It has been my experience that investors need to adhere to a systematic, low-risk approach to investing while striving toward predictability in returns. Otherwise, it can be difficult to stay the course. Thank you for your support! Auxier Focus Fund Schedule of Investments - June 30, 2002 Common Stocks - 60.4% Shares Value Accident & Health Insurance - 1.8% AFLAC, Inc. 9,250 $ 296,000 ---------------- Aircraft - 0.7% Boeing Co. 2,500 112,500 ---------------- Bottled & Canned Soft Drinks Carbonated Waters - 0.1% National Beverage Corp. (a) 1,000 14,000 ---------------- Cable & Other Pay Television Services - 0.5% Liberty Media Corp., Class A (a) 9,000 90,000 ---------------- Chemicals & Allied Products - 0.3% Dow Chemical Co. 1,400 48,132 ---------------- Cigarettes - 0.7% Philip Morris Companies, Inc. 2,500 109,200 ---------------- Commercial Banks - 1.6% City Bank 1,700 54,400 Golden State Bancorp, Inc. 6,000 217,500 ---------------- ---------------- 271,900 ---------------- Construction, Mining & Materials Handling Machinery & Equip. - 0.7% Dover Corp. 3,100 108,500 ---------------- Crude Petroleum & Natural Gas - 1.1% Burlington Resources, Inc. 5,000 190,000 ---------------- Electric & Other Services Combined - 0.0% Sierra Pacific Resources (a) 1,000 7,800 ---------------- Electric Housewares & Fans - 0.3% Helen of Troy Ltd. (a) 4,000 46,560 ---------------- Electronic Computers - 0.2% Ceridian Corp. (a) 2,000 37,960 ---------------- Federal & Federally - Sponsored Credit Agencies - 2.2% Federal Home Loan Mortgage Corp. 6,000 367,200 ---------------- Finance Services - 1.3% American Express Co. 5,500 199,760 Morgan Stanley Dean Witter & Co. 300 12,924 ---------------- ---------------- 212,684 ---------------- Fire, Marine & Casualty Insurance - 2.9% Chubb Corp. 2,500 177,000 SAFECO Corp. 600 18,534 Travelers Property Casualty Corp. (a) 16,000 283,200 ---------------- 478,734 ----------------
See accompanying notes which are an integral part of the financial statements. Auxier Focus Fund Schedule of Investments - June 30, 2002 (continued) Common Stocks - 60.4% (continued) Fire, Marine, Casualty Insurance - 1.6% Berkshire Hathaway, Inc. - Class B (a) 120 $ 267,960 ---------------- Food & Kindred Products - 1.4% British American Tobacco Plc. (c) 11,200 239,680 ---------------- Iron & Steel Foundries - 0.6% Precision Castparts Corp. 3,200 105,600 ---------------- Laboratory Analytical Instruments - 1.0% Waters Corp. (a) 6,000 160,200 ---------------- Life Insurance - 0.4% Prudential Financial, Inc. 2,000 66,720 ---------------- Miscellaneous Shopping Goods Stores - 0.3% Office Depot, Inc. (a) 3,000 50,400 ---------------- Motor Vehicle Parts & Accessories - 0.2% Delphi Corp. 1,000 13,200 Visteon Corp. 1,500 21,300 ---------------- ---------------- 34,500 ---------------- Motor Vehicles & Passenger Car Bodies - 0.8% General Motors Corp. 2,375 126,944 ---------------- National Commercial Banks - 6.1% Bank One Corp. 200 7,696 Citigroup, Inc. 3,493 135,354 FleetBoston Financial Corp. 13,400 433,490 J.P. Morgan Chase & Co. 300 10,176 MBNA Corp. 8,000 264,560 U.S. Bancorp 6,745 157,496 ---------------- ---------------- 1,008,772 ---------------- Newspapers: Publishing Or Publishing & Printing - 0.5% Gannett, Inc. 100 7,590 Knight Ridder, Inc. 1,300 81,835 ---------------- ---------------- 89,425 ---------------- Operative Builders - 0.6% D.R. Horton, Inc. 4,050 105,421 ---------------- Paper board containers & boxes - 0.5% Longview Fibre Co. (a) 8,000 75,360 ---------------- Pharmaceutical Preparations - 5.9% Bristol-Myers Squibb, Co. 3,300 84,810 Merck & Co., Inc. 5,600 283,584 Pfizer Inc. 8,000 280,000 Schering-Plough, Corp. 14,000 344,400 ---------------- ---------------- 992,794
See accompanying notes which are an integral part of the financial statements. Auxier Focus Fund Schedule of Investments - June 30, 2002 (continued) Common Stocks - 60.4% (continued) Radio & TV Broadcasting & Communications Equipment - 0.4% Motorola, Inc. 5,000 $ 72,100 ---------------- Real Estate Investment Trusts - 0.7% Plum Creek Timber Co., Inc. 4,000 122,400 ---------------- Refuse Systems - 1.1% Waste Management, Inc. 6,900 179,745 ---------------- Retail - Drug Stores & Proprietary Stores - 0.4% CVS Corp. 2,300 70,380 ---------------- Retail - Eating Places - 2.2% McDonald's Corp. 12,900 367,005 ---------------- Retail - Family Clothing Stores - 0.1% Gap, Inc. 1,600 22,720 ---------------- Retail - Grocery Stores - 3.1% Albertson's, Inc. 5,350 162,961 Kroger Co. (a) 16,400 326,360 Safeway, Inc. (a) 1,000 29,190 ---------------- ---------------- 518,511 ---------------- Retail - Jewelry Stores - 0.0% Tiffany & Co. 100 3,520 ---------------- Savings Institutions, Not Federally Chartered - 2.8% Washington Mutual, Inc. 12,450 462,019 ---------------- Semiconductors & Related Devices - 0.1% TriQuint Semiconductor, Inc. (a) 3,000 19,230 ---------------- Services - Business Services - 3.0% eFunds Corp. (a) 38,200 362,480 Viad Corp. 5,000 130,000 ---------------- ---------------- 492,480 ---------------- Services - Commercial Physical & Biological Research - 0.1% Edwards Lifesciences Corp. (a) 500 11,460 ---------------- Services - Computer Programming, Data Processing - 0.4% AOL Time Warner, Inc. (a) 4,500 66,195 ---------------- Services - Educational Services - 0.1% ITT Educational Services, Inc. (a) 900 19,620 ---------------- Services - Management Consulting Services - 1.3% MAXIMUS, Inc. (a) 7,000 221,900 ----------------
See accompanying notes which are an integral part of the financial statements. Auxier Focus Fund Schedule of Investments - June 30, 2002 (continued) Common Stocks - 60.4% (continued) Services - Packaged Software - 0.1% Equifax, Inc. 500 $ 13,500 ---------------- Services - Personal Services - 0.1% H & R Block, Inc. 200 9,230 ---------------- Services - Prepackaged Software - 0.8% Openwave Systems, Inc. (a) 4,000 22,440 Novell, Inc. (a) 35,300 113,313 ---------------- ---------------- 135,753 ---------------- Services-Advertising Agencies - 0.7% The Interpublic Group of Cos., Inc. 2,000 49,520 TMP Worldwide, Inc. (a) 2,800 60,200 ---------------- 109,720 ---------------- Services-Computer Processing & Data Preparation - 2.2% IMS Health, Inc. 20,000 359,000 ---------------- Services-Educational Services - 0.7% Learning Tree International, Inc. (a) 6,600 122,364 ---------------- Specialty Outpatient Facilities - 0.7% SeraCare Life Sciences, Inc. (a) 18,500 108,595 ---------------- State Commercial Banks - 0.2% Bank of New York Co., Inc. 1,000 33,750 ---------------- Surgical & Medical Instruments & Apparatus - 3.3% Guidant Corp. 13,600 411,128 Utah Medical Products, Inc. 9,000 142,830 ---------------- 553,958 ---------------- Telephone Communications (No Radiotelephone) - 0.5% CenturyTel, Inc. 1,200 35,400 Sprint FON Group 4,300 45,623 ---------------- ---------------- 81,023 ---------------- Television Broadcasting Stations - 0.9% Grupo Televisa, S.A. (a) (c) 3,900 145,782 ---------------- Water Transportation - 0.1% Carnival Corp. 300 8,307 ---------------- TOTAL COMMON STOCKS (Cost $10,303,807) 10,045,213 ---------------- Unit Investment Trust - 0.1% Shares Value AMEX Financial Select Sector SPDR Fund 500 12,550 ---------------- TOTAL UNIT INVESTMENT TRUST (Cost $12,885) 12,550 ----------------
See accompanying notes which are an integral part of the financial statements. Auxier Focus Fund Schedule of Investments - June 30, 2002 (continued) Shares Value Preferred Stocks - 2.5% Boston Edison Co. 4.25% 200 $ 12,300 Central Power & Light Co. 4.00% 305 19,520 Cincinnati Gas & Electric Co. 4.00% 400 34,800 Cincinnati Gas & Electric Co. 4.75% 300 19,050 Dayton Power & Light Co. 3.90% 1,500 105,750 Hawaiian Electric Inc. 4.25% 4,000 44,125 Indianapolis Power and Light Co. 4.00% 300 16,941 Monongahela Power Co. 4.40% 100 6,920 Pacific Enterprises Co. 4.50% 1,000 64,250 Peco Energy Co. 3.80% 400 22,860 Public Service Electric & Gas Co. 4.08% 945 63,055 Westar Energy Inc. 4.25% 300 16,650 ---------------- TOTAL PREFERRED STOCK (Cost $426,416) 426,221 ---------------- Corporate Notes & Bonds - 15.6% Crown Cork & Seal Co. Unsecured Notes 7.125% 9/01/2002 170,000 167,450 Crown Cork & Seal Co. 6.75% 4/15/2003 100,000 91,000 Finova Group, Inc., 7.50% 11/15/2009 26,000 8,710 Fort James Group, Inc. Senior Notes 6.625% 9/15/2004 40,000 38,992 Fruit of the Loom 7.375% 11/15/2023 (d) 50,000 35,750 GATX Capital Corp. 8.25% 09/01/2003 360,000 364,478 Georgia Pacific Corp. Debentures, 7.70% 6/15/2015 70,000 62,118 GMAC Medium Term Notes 5.75% 10/15/2006 100,000 100,175 GMAC Notes, 6.875% 09/15/2011 200,000 198,898 GMAC Smart Notes, 7.50% 01/15/2012 40,000 40,605 Hilton Hotels Corp. Subordinated Notes 5.00% 05/15/2006 150,000 141,375 Nevada Power Co. Senior Notes 6.20% 04/15/2004 65,000 59,829 Pacific Gas & Electric Co. First Mortgage/Refunding Series 93 G 6.25% 3/01/2004 130,000 128,700 Pacific Gas & Electric Co. First Mortgage/Refunding Series 93E 5.88% 10/01/2005 125,000 121,250 Pacific Gas & Electric Co. First Mortgage/Refunding Series 92 D 8.25% 11/01/2022 60,000 60,300 Pacific Gas & Electric Co. First Mortgage/Refunding Series 93F 6.75% 10/01/2023 21,000 19,320 So. California Edison Co. Notes 6.375% 1/15/2006 50,000 47,250 So. California Edison Co. First Mortgage / Refunding Series 93I, 6.90% 10/1/2018 100,000 92,500 WMX Technologies Inc. Notes 6.38% 12/01/2003 170,000 173,963 WMX Technologies Inc. 7.00% 05/15/2005 51,000 53,452 Waste Management Inc. Senior Notes 7.375% 08/01/2010 154,000 160,149 Waste Management Inc. Debentures 7.65% 03/15/2011 401,000 425,073 ---------------- TOTAL CORPORATE BONDS (Cost $2,572,568) 2,591,337 ---------------- Principal Value Money Market Securities - 19.9% Huntington Money Market Fund - Investment A, 0.76%, (Cost $3,318,173) (b) 3,318,173 3,318,173 ---------------- TOTAL INVESTMENTS - 98.5% (Cost $16,633,849) 16,393,494 Other assets less liabilities - 1.5% 244,709 ---------------- TOTAL NET ASSETS - 100.0% $ 16,638,203 ================ (a) Non-income producing. (b) Variable rate security; the coupon rate shown represents the rate at June 30, 2002. (c) American Depositary Receipt (d) Non-income producing security - issuer is in default
See accompanying notes which are an integral part of the financial statements. Auxier Focus Fund Statement of Assets and Liabilities June 30, 2002 Assets Investments in securities, at value (cost $16,633,849) $ 16,393,494 Cash 27,104 Interest receivable 45,439 Dividends receivable 15,315 Receivable for investments sold 262,506 Receivable for fund shares sold 114,346 ----------------- Total assets 16,858,204 ----------------- Liabilities Accrued advisory fees 19,508 Payable for investments purchased 200,493 ----------------- Total liabilities 220,001 ----------------- Net Assets $ 16,638,203 ================= Net Assets consist of: Paid in capital 16,556,538 Accumulated undistributed net investment income (loss) 43,485 Accumulated net realized gain (loss) on investments 278,535 Net unrealized appreciation (depreciation) on investments (240,355) ----------------- Net Assets, for 1,469,121 shares $ 16,638,203 ================= Net Asset Value Offering price and redemption price per share ($16,638,203 / 1,469,121) $ 11.33 =================
See accompanying notes which are an integral part of the financial statements. Auxier Focus Fund Statement of Operations for the year ended June 30, 2002 Investment Income Dividend income $ 109,162 Interest income 117,997 -------------- Total Income 227,159 Expenses Investment advisor fee 147,525 Trustee expenses 2,222 -------------- Total Expenses 149,747 Reimbursed expenses (2,222) -------------- -------------- Total operating expenses 147,525 -------------- -------------- Net Investment Income (Loss) 79,634 -------------- Realized & Unrealized Gain (Loss) Net realized gain (loss) on investment securities 303,257 Change in net unrealized appreciation (depreciation) on investment securities (682,921) -------------- -------------- Net realized and unrealized gain (loss) on investment securities (379,664) -------------- -------------- Net increase (decrease) in net assets resulting from operations $ (300,030) ==============
See accompanying notes which are an integral part of the financial statements. Auxier Focus Fund Statement of Changes in Net Assets Year ended Year ended Year ended Increase (Decrease) in Net Assets June 30, 2002 June 30, 2001 June 30, 2000 (a) ---------------- ----------------- -------------------- Operations Net investment income (loss) $ 79,634 $ 51,443 $ 14,099 Net realized gain (loss) on investment securities 303,257 (6,003) 5,975 Change in net unrealized appreciation (depreciation) (682,921) 497,474 (54,908) --------------- ----------------- -------------------- Net increase (decrease) in net assets resulting from operations (300,030) 542,914 (34,834) ---------------- ----------------- -------------------- Distributions to shareholders From net investment income (71,862) (26,392) (3,437) From net realized gain (18,729) (5,965) - ---------------- ----------------- -------------------- Total distributions (90,591) (32,357) (3,437) ---------------- ----------------- -------------------- Share Transactions Net proceeds from shares sold 10,074,386 5,255,592 1,370,891 Shares issued in reinvestment of distributions 90,185 32,294 3,437 Shares redeemed (219,862) (50,370) (15) ---------------- ----------------- -------------------- Net increase (decrease) in net assets resulting from share transactions 9,944,709 5,237,516 1,374,313 ---------------- ---------------- -------------------- Total increase (decrease) in net assets 9,554,088 5,748,073 1,336,042 ---------------- ----------------- -------------------- Net Assets Beginning of period 7,084,115 1,336,042 0 ---------------- ----------------- -------------------- End of period [including accumulated undistributed net investment income of $43,485, and $35,713, respectively] $ 16,638,203 $ 7,084,115 $ 1,336,042 ================ ================= ==================== Shares of capital stock of the Fund sold and redeemed: Shares sold 860,061 488,135 133,350 Shares reinvested 7,863 3,080 337 Shares redeemed (18,835) (4,869) (1) ---------------- ----------------- -------------------- Net increase (decrease) in number of shares outstanding 849,089 486,346 133,686 ================ ================= ====================
See accompanying notes which are an integral part of the financial statements. Auxier Focus Fund Financial Highlights Year ended Year ended Period ended June 30, June 30, June 30, 2002 2001 2000 (c) ------------------ ------------------ ------------------ Selected Per Share Data Net asset value, beginning of period $ 11.43 $ 9.99 $ 10.00 ------------------ ------------------ ------------------ Income from investment operations Net investment income 0.08 0.17 0.18 Net realized and unrealized gain (loss) (0.07) 1.43 (0.16) ------------------ ------------------ ------------------ Total from investment operations 0.01 1.60 0.02 ------------------ ------------------ ------------------ Less distributions: Distributions from net investment income (0.09) (0.13) (0.03) Distributions from net realized gains (0.02) (0.03) 0.00 ------------------ ------------------ ------------------ Total distributions (0.11) (0.16) (0.03) ------------------ ------------------ ------------------ Net asset value, end of period $ 11.33 $ 11.43 $ 9.99 ================== ================== ================== Total Return 0.07% 16.11% 0.23% (a) Ratios and Supplemental Data Net assets, end of period (000) $ 16,638 $ 7,084 $ 1,336 Ratio of expenses to average net assets 1.35% 1.35% 1.35% (b) Ratio of expenses to average net assets before reimbursement 1.37% 1.41% 1.62% (b) Ratio of net investment income to average net assets 0.73% 1.56% 1.84% (b) Ratio of net investment income to average net assets before reimbursement 0.71% 1.50% 1.57% (b) Portfolio turnover rate 55.72% 41.46% 187.85% (a) For a period of less than a full year, the total return is not annualized. (b) Annualized. (c) For the period July 9, 1999 (commencement of operations) through June 30, 2000.
See accompanying notes which are an integral part of the financial statements. Auxier Focus Fund Notes to Financial Statements June 30, 2002 NOTE 1. ORGANIZATION The Auxier Focus Fund (the "Fund") was organized as a non-diversified series of the AmeriPrime Funds (the "Trust") on February 2, 1999 and commenced operations on July 9, 1999. The Trust is established under the laws of Ohio by an Agreement and Declaration of Trust dated August 8, 1995 (the "Trust Agreement"). The 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 the series of funds currently authorized by the Trustees. The Fund's investment objective is to provide long-term capital appreciation. The investment advisor to the Fund is Auxier Asset Management, LLC (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 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 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. Auxier Focus Fund Notes to Financial Statements June 30, 2002 - continued NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Auxier Asset Management, LLC, 8050 S.W. Warm Springs St., Suite 130, Tualatin, OR 97062, serves as investment advisor to the Fund. J. Jeffrey Auxier is President and Chief Investment Officer of the Advisor and is responsible for the day-to-day management of the Fund's portfolio. Also, J. Jeffrey Auxier may be deemed to be a controlling person of the Advisor due to his ownership of a majority of its shares. 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 interest and dividends on securities sold short), Rule 12b-1 expenses, 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 1.35% 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 Fund's expenses, except those specified above, are paid by the Advisor. For the year ended June 30, 2002, the Advisor received a fee of $147,525 from the Fund. The Advisor has contractually agreed to reimburse the Fund for the fees and expenses of the disinterested Trustees through October 31, 2002. For the year ended June 30, 2002, the Advisor reimbursed expenses of $2,222. 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 Agreement. A Trustee and the officers of the Trust are members of management and/or employees of Unified and shareholders of the Fund. The Fund retains Unified Financial Securities, Inc., a wholly owned subsidiary of Unified Financial Services, Inc. to act as the principal distributor of its shares. There were no payments made to Unified Financial Securities, Inc. during the fiscal year June 30, 2002. A Trustee and officer of the Trust may be deemed to be an affiliate of Unified Financial Securities, Inc. NOTE 4. INVESTMENTS For the year ended June 30, 2002, purchases and sales of investment securities, other than short term investments, aggregated $13,402,551 and $4,113,996, respectively. As of June 30, 2002, the gross unrealized appreciation for all securities totaled $686,687 and the gross unrealized depreciation for all securities totaled $927,042 for a net unrealized depreciation of $240,355. The aggregate cost of securities for federal income tax purposes at June 30, 2002 was $16,636,830. The difference between book cost and tax cost consists of wash sales in the amount of $2,981. Auxier Focus Fund Notes to Financial Statements June 30, 2002 - continued NOTE 5. ESTIMATES Preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. NOTE 6. RELATED PARTY TRANSACTIONS The beneficial ownership, either directly or indirectly, of more than 25% of the voting securities of a fund creates a presumption of control of the fund, under Section 2(a)(9) of the Investment Company Act of 1940. As of June 30, 2002, Charles Schwab & Co. held 60.93% of the outstanding Fund shares in an omnibus account for the benefit of others. NOTE 7. ELECTION OF TRUSTEES At a special meeting of the shareholders held on May 29, 2002, a vote was held to elect members to serve on the Board of Trustees. The vote tally for each Trustee is as follows: For Withheld Total Gary Hippenstiel 10,516,210.432 648,472.896 11,164,683.328 Mark Muller 10,856,443.432 308,239.896 11,164,683.328 Ken Trumpfheller 10,493,506.432 671,176.896 11,164,683.328 Richard Wright 10,858,138.432 306,544.896 11,164,683.328
Information Regarding Trustees and Officers The Board of Trustees supervises the business activities of the Trust. Each Trustee serves as a trustee until the termination of the Trust unless the Trustee dies, resigns, retires or is removed. The following table provides information regarding each Trustee who is not an "interested person" of the Trust, as defined in the Investment Company Act of 1940. - --------------------------------------------------- ------------------- --------------------- ------------------------ Number of Portfolios Position(s) Held Length of in Fund Complex** Name, Age and Address with Trust Time Served Overseen by Trustee - --------------------------------------------------- ------------------- --------------------- ------------------------ Mark W. Muller Trustee Trustee since 1999 35 5016 Cedar River Tr. Fort Worth, Texas 76137 Year of Birth: 1964 - --------------------------------------------------- ------------------- --------------------- ------------------------ - ----------------------------------------------------------------------- ---------------------------------------------- Principal Occupations During Past 5 Years Other Directorships Held by Trustee - ----------------------------------------------------------------------- ---------------------------------------------- - ----------------------------------------------------------------------- ---------------------------------------------- President of JAMAR Resources, Inc., a manufacturers representative None firm, September 2001 to present. Account Manager for SCI, Inc., a custom manufacturer, from April 2000 to September 2001. Account Manager for Clarion Technologies, a manufacturer of automotive, heavy truck, and consumer goods, from 1996 to April 2000. From 1986 to 1996, an engineer for Sicor, a telecommunication hardware company. - ----------------------------------------------------------------------- ---------------------------------------------- - --------------------------------------------------- ------------------- --------------------- ------------------------ Number of Portfolios Position(s) Held Length of in Fund Complex** Name, Age and Address with Trust Time Served Overseen by Trustee - --------------------------------------------------- ------------------- --------------------- ------------------------ - --------------------------------------------------- ------------------- --------------------- ------------------------ Gary E. Hippenstiel Trustee Trustee since 1995 17 600 Jefferson Street Suite 350 Houston, TX 77002 Year of Birth: 1947 - --------------------------------------------------- ------------------- --------------------- ------------------------ - ----------------------------------------------------------------------- ---------------------------------------------- Principal Occupations During Past 5 Years Other Directorships Held by Trustee - ----------------------------------------------------------------------- ---------------------------------------------- - ----------------------------------------------------------------------- ---------------------------------------------- Director, Vice President and Chief Investment Officer of Legacy Trust None Company since 1992; President and Director of Heritage Trust Company from 1994-1996; Vice President and Manager of Investments of Kanaly Trust Company from 1988 to 1992. - ----------------------------------------------------------------------- ---------------------------------------------- - --------------------------------------------------- ------------------- --------------------- ------------------------ Number of Portfolios Position(s) Held Length of in Fund Complex Name, Age and Address with Trust Time Served Overseen by Trustee - --------------------------------------------------- ------------------- --------------------- ------------------------ - --------------------------------------------------- ------------------- --------------------- ------------------------ Richard J. Wright, Jr. Trustee Trustee since 1999 35 13532 N. Central Expressway MS 3800 Dallas, Texas 75243 Year of Birth: 1962 - --------------------------------------------------- ------------------- --------------------- ------------------------ - ----------------------------------------------------------------------- ---------------------------------------------- Principal Occupations During Past 5 Years Other Directorships Held by Trustee - ----------------------------------------------------------------------- ---------------------------------------------- - ----------------------------------------------------------------------- ---------------------------------------------- Various positions with Texas Instruments, a technology company, since None 1985, including the following: Program Manager for Semi-Conductor Business Opportunity Management System, 1998 to present; Development Manager for web-based interface, 1999 to present; Systems Manager for Semi-Conductor Business Opportunity Management System, 1997 to 1998; Development Manager for Acquisition Manager, 1996-1997; Operations Manager for Procurement Systems, 1994-1997. - ----------------------------------------------------------------------- ---------------------------------------------- The following table provides information regarding each Trustee who is an "interested person" of the Trust, as defined in the Investment Company Act of 1940, and each officer of the Trust. - --------------------------------------------------- ------------------- --------------------- ------------------------ Number of Portfolios Position(s) In Length of in Fund Complex** Name, Age and Address Fund Complex** Time Served Overseen by Trustee - --------------------------------------------------- ------------------- --------------------- ------------------------ - --------------------------------------------------- ------------------- --------------------- ------------------------ Kenneth D. Trumpfheller* President, Trustee and 35 1725 E. Southlake Blvd. Secretary and President since 1995 Suite 200 Trustee Secretary since 2000 Southlake, Texas 76092 Year of Birth: 1958 - --------------------------------------------------- ------------------- --------------------- ------------------------ - ----------------------------------------------------------------------- ---------------------------------------------- Principal Occupations During Past 5 Years Other Directorships Held by Trustee - ----------------------------------------------------------------------- ---------------------------------------------- - ----------------------------------------------------------------------- ---------------------------------------------- President and Managing Director of Unified Fund Services, Inc., the None Fund's transfer agent, fund accountant and administrator, since October 2000. President, Treasurer and Secretary of AmeriPrime Financial Services, Inc., a fund administrator, (which merged with Unified Fund Services, Inc.) from 1994 through October 2000. President, Treasurer and Secretary of AmeriPrime Financial Securities, Inc., the Trust's distributor through December 2000, from 1994 through December 2000. - ----------------------------------------------------------------------- ---------------------------------------------- - --------------------------------------------------- ------------------- --------------------- ------------------------ Number of Portfolios Position(s) in Length of in Fund Complex** Name, Age and Address Fund Complex Time Served Overseen by Trustee - --------------------------------------------------- ------------------- --------------------- ------------------------ - --------------------------------------------------- ------------------- --------------------- ------------------------ Robert A. Chopyak Treasurer and Treasurer and CFO N/A 1725 E. Southlake Blvd. Chief Financial since 2000 Suite 200 Officer Southlake, Texas 76092 Year of Birth: 1968 - --------------------------------------------------- ------------------- --------------------- ------------------------ - ----------------------------------------------------------------------- ---------------------------------------------- Principal Occupations During Past 5 Years Other Directorships Held by Trustee - ----------------------------------------------------------------------- ---------------------------------------------- - ----------------------------------------------------------------------- ---------------------------------------------- Assistant Vice-President of Financial Administration of Unified Fund None Services, Inc., the Fund's transfer agent, fund accountant and administrator, since August 2000. Manager of AmeriPrime Financial Services, Inc. from February 2000 to August 2000. Self-employed, performing Y2K testing, January 1999 to January 2000. Vice President of Fund Accounting, American Data Services, Inc., a mutual fund services company, October 1992 to December 1998. - ----------------------------------------------------------------------- ---------------------------------------------- *Mr. Trumpfheller in an "interested person" of the Trust because he is an officer of the Trust. In addition, he may be deemed to be an "interested person" of the Trust because he is a registered principal of the Trust's distributor. **As of December 31, 2001, the term "Fund Complex" refers to AmeriPrime Funds and AmeriPrime Advisors Trust. The Statement of Additional Information includes additional information about the Trustees and is available without charge upon request, by calling toll free at 1-877-3Auxier or 877-328-9437.
INDEPENDENT AUDITOR'S REPORT To The Shareholders and Board of Trustees Auxier Focus Fund (a series of the AmeriPrime Funds) We have audited the accompanying statement of assets and liabilities of the Auxier Focus Fund, including the schedule of portfolio investments, as of June 30, 2002, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the two years in the period then ended and for the period of July 9, 1999 (commencement of operations) to June 30, 2000. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of investments and cash held as of June 30, 2002 by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Auxier Focus Fund as of June 30, 2002, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the two years in the period then ended and the period of July 9, 1999 (commencement of operations) to June 30, 2000, in conformity with accounting principles generally accepted in the United States of America. McCurdy & Associates CPA's, Inc. Westlake, Ohio 44145 July 17, 2002 -----END PRIVACY-ENHANCED MESSAGE-----