N-CSRS 1 dobsonsemi.txt DOBSON SEMI-ANNUAL JANUARY 2004 united states securities and exchange commission washington, d.c. 20549 form n-csr certified shareholder report of registered management investment companies Investment Company Act file number 033-96826 --------------------------------------------- Ameriprime Funds -------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) ___________431 N. Pennsylvania St.______46204___________________________________ (Address of principal executive offices) (Zip code) Timothy Ashburn, Unified Fund Services, 431 N. Pennsylvania Street, Indianapolis, IN 46204 -------------------------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: 317-917-7000 Date of fiscal year end: 7/31 -------------------- Date of reporting period: 1/31 ------------------- Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507. Item 1. Reports to Stockholders. Dobson Covered Call Fund Semi-annual Report January 31, 2004 (Unaudited) Fund Advisor: Dobson Capital Management, Inc. 1422 S. Van Ness Street Santa Ana, CA 92707 Toll Free 877-2-DOBSON (877-236-2766) March 1, 2004 Dear Fellow Shareholders: We are pleased to present the semi-annual report of the Dobson Covered Call Fund (DBCCX) as of 01/31/04. We would also like to welcome the new shareholders to our Fund this past six months and thank them for investing with us. I would like to refer you to the management discussion and analysis that follows for specific details about the Dobson Covered Call Fund performance, our expectations for the future and other topics in the news regarding the Mutual Fund Industry. We welcome your comments and again thank you for investing with us. Sincerely, /s/Charles L. Dobson Charles L. Dobson Portfolio Manager The prospectus should be read carefully before investing. To request a prospectus for more complete information, including charges and expenses, call toll free 1-877-2-DOBSON OR 1-877-236-2766. 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 North Pennsylvania Street Indianapolis, IN 46204 Member NASD, SIPC. Managements Discussion of Fund Performance For the 6 month period ended January 31, 2004 our Fund had a total return of 8.03% while the S&P 500 Index had a total return of 15.21%. From inception of the Fund (March 22, 1999) through January 31, 2004 our Fund's annualized return was 1.36%, while the S&P 500 Index annualized return was -.84%. Our Fund's monthly standard deviation based on monthly returns from April 1, 2003 was 3.63 and the S&P 500 standard deviation for the same period was 4.97. Standard deviation is a statistical term that measures the divergence of returns around the average return. The lower this number the less volatile returns were over the defined time period. [Graph Omitted] Volatility (Risk) Comparison Dobson Covered Call Fund S&P 500 Index 3.63 4.97 I don't think I need to tell you that these past 12 months haven't been the most favorable for a covered call strategy. During that period the S&P 500 Index appreciated 34.53% while our Fund appreciated 19.16%. To put these numbers in context, should the index appreciate more than 20% over a twelve-month period we expect our covered call strategy to capture between 50% and 66% of that appreciation. We're pretty close to the middle of those expectations so we can say we did what we expected to do. Looking over the longer term one can see the value of our covered call strategy. Our Fund has appreciated 1.36% on an annualized basis (net of fees) from inception while the S&P 500 Index has declined -.84% on an annualized basis (gross of fees). These inception numbers are approximately 2 months short of five years. I'm sure many people question the value of our covered call program this past 12 months just as I'm sure many people wished they were in our covered call program for calendar years 2000, 2001 and 2002. Unfortunately we don't have the ability to accurately and consistently predict what years the market will be up or down and by how much. That is why we hedge our stock positions with individual stock options. By reducing the volatility of our portfolio, that means lagging the Index in up markets and losing less in down markets, we expect to do better than the Index over time. And that is what we have done over approximately the past 5 years. We should also point out that the portfolio is weighted by S&P 500 Industry weights. One other point to make about the markets these last several months is the rapid appreciation of many of the smaller capitalization stocks in the S&P 500 Index. As you can see from the attached portfolio almost all of our stocks are the larger capitalization issues. It is reasonable to assume that our portfolio lags the Index more than it would if it had some smaller and mid capitalization names. It is also reasonable to assume that if the smaller capitalization stocks decline in the near future our portfolio may do better than expected. We bring this to your attention as there has been a lot of speculation in the press of late touting large capitalization issues and we wanted to explain what might happen should this occur. To get a better understanding of our expectations we refer you to our website, www.dobsoncapital.com. For those of you without access to the internet please call us toll free at 877-546-3066 and we will send you the written explanations. Overall we are pleased with results from inception and believe we have a reasonable probability of meeting expectations in the future. As always, past performance does not guarantee future results. Management's Discussion of Mutual Fund Issues There have been many issues in the press recently regarding Mutual Fund Disclosure. We would like to address some of them here. 1. Portfolio Ownership. As of January 31, 2004, I am not only the Portfolio Manager of our Fund but I am the beneficial owner of approximately 19% of the outstanding shares. 2. Soft Dollars. Although soft dollar arrangements are permitted, it is our belief that commission dollars should be used to keep commission costs low. Therefore we have not nor do we intend to use commission dollars to pay for research or other services. 3. Broker/Dealers. Currently we deal with two broker dealers for the purchase and sale of stocks and options. Both have agreed to the same commission costs. As of this date none of the Broker/Dealers we use has or has ever had any clients with us. 4. Disaster Recovery. Recently we physically moved our computers to another location to simulate a building disaster. All of our systems were able to function immediately. The only difficulty we experienced was with telephone lines. E-mail obviously worked fine. We also e-mail a copy of the portfolio to our primary backup Portfolio Manager's home any day changes are made to the portfolio. Our service provider, Unified Fund Services, Inc. in Indianapolis, Indiana, and our custodian bank UMB bank in Kansas City also have copies of our positions. We believe this will allow us to recover from any major disaster. 5. Proxy voting policies. Please contact us if you would like a copy of our proxy voting policies or to see our proxy voting record. 6. 12b-1 fees. The Fund does not make use of 12b-1 fees. I hope the above analysis has been useful and informative. Please do not hesitate to call me toll free at 877-546-3066 if you have any questions and please visit our website at www.dobsoncapital.com. Investment Results ------------------ Average Annual Total Returns (for periods ended January 31, 2004) Since Inception One Month Six Months One Year Three Year(March 22, 1999) --------- ---------- -------- ---------- --------------- Dobson Covered Call Fund* 0.82% 8.03% 19.16% -1.87% 1.36% S&P 500 Index** 1.84% 15.21% 34.53% -4.60% -0.84% -------------------------------------------------------------------------------- The rate of return will vary and the principal value of an investment will fluctuate. Shares, if redeemed, may be worth more or less than their original cost. Performance data quoted does not reflect the deduction of taxes that an investor may pay on Fund distributions or the redemption of Fund shares. Past performance is not indicative of future investment results. Due to market volatility, current performance may be higher or lower than the performance shown above. * Return figures reflect any change in price per share and assume the reinvestment of all distributions. ** The Index is an unmanaged benchmark that assumes reinvestment of all distributions and excludes the effect of taxes and fees. The S&P 500 Index is a widely recognized unmanaged index of equity prices and is representative of a broader market and range of securities than is found in the Fund's portfolio. Comparison of the Growth of a $10,000 Investment in the Dobson Covered Call Fund and the S&P 500 Index [Graph Omitted] Dobson Covered Call S&P 500 Fund Index ------------------------------ 3/22/99 10,000.00 10,000.00 7/31/99 10,780.00 10,572.59 7/31/00 11,167.02 11,520.55 7/31/01 10,983.65 9,870.22 7/31/02 9,246.19 7,531.63 7/31/03 9,884.77 8,332.78 1/31/04 10,678.44 9,599.94 The chart above assumes an initial investment of $10,000 made on March 22, 1999 (commencement of Fund operations) and held through January 31, 2004. THE FUND'S RETURN REPRESENTS PAST PERFORMANCE AND DOES NOT GUARANTEE FUTURE RESULTS. The returns shown do not reflect deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Investment returns and principal values will fluctuate so that your shares, when redeemed, may be worth more or less than their original purchase price. Dobson Covered Call Fund Schedule of Investments January 31, 2004 (Unaudited) Common Stocks - 98.31% Shares Value -------------- ------------ Air Courier Services - 1.20% FedEx Corp. 1,000 $ 67,280 ------------ Aircraft - 2.21% Boeing Co. 3,000 125,250 ------------ Aircraft Engines & Engine Parts - 1.01% United Technologies Corp. 600 57,324 ------------ Beverages - 3.32% Coca-Cola Co. 1,900 93,556 PepsiCo, Inc. 2,000 94,520 ------------ 188,076 ------------ Biological Products (No Diagnostic Substances) - 2.29% Amgen, Inc. (a) 2,000 128,980 ------------ Cable & Other Pay Television Services - 1.40% Comcast Corp. Class A (a) 2,323 79,261 ------------ Canned, Frozen & Preserved Fruit, Vegetable & food Specialty - 0.63% H.J. Heinz Co. 1,000 35,380 ------------ Chemical & Allied Products - 1.48% Dow Chemical Co. 2,000 83,900 ------------ Computer Communication Equipment - 1.81% Cisco Systems, Inc. (a) 4,000 102,560 ------------ Computers & Office Equipment - 3.51% International Business Machines Corp. 2,000 198,460 ------------ Construction Machinery & Equipment - 1.38% Caterpillar, Inc. 1,000 78,130 ------------ Cutlery, Handtools & General Hardware - 0.64% The Gillette Co. 1,000 36,250 ------------ Diversified - 0.65% Honeywell International, Inc. 1,000 36,120 ------------ Electric Services - 1.82% Duke Energy, Inc. 2,000 43,460 The Southern Co. 2,000 59,600 ------------ 103,060 ------------ Electromedical & Electrotherapeutic Apparatus - 1.74% Medtronic, Inc. 2,000 98,440 ------------ Electronic & Other Electrical Equipment - 1.78% General Electric Co. 3,000 100,890 ------------ See accompanying notes which are an integral part of the financial statements. Dobson Covered Call Fund Schedule of Investments - continued January 31, 2004 (Unaudited) Shares Value -------------- ------------ Electronic Computers - 1.77% Dell, Inc. (a) 3,000 $ 100,410 ------------ Finance Services - 5.27% American Express Co. 2,000 103,680 First Data Corp. 2,000 78,320 Morgan Stanley 2,000 116,420 ------------ 298,420 ------------ Fire, Marine & Casualty Insurance - 2.45% American International Group, Inc. 2,000 138,900 ------------ Motor Vehicles & Passenger Car Bodies - 2.01% Ford Motor Co. 1,000 14,540 General Motors Corp. 2,000 99,360 ------------ 113,900 ------------ National Commercial Banks - 12.75% Bank of America Corp. 2,000 162,920 Bank One Corp. 3,000 151,830 Citigroup, Inc. 4,333 214,397 J.P. Morgan Chase & Co. 2,000 77,780 Wells Fargo & Co. 2,000 114,820 ------------ 721,747 ------------ Oil & Gas Field Services - 2.16% Schlumberger Ltd. 2,000 122,360 ------------ Paper Mills - 1.49% International Paper Co. 2,000 84,540 ------------ Petroleum Refining - 4.49% Chevron Texaco Corp. 2,000 172,700 Exxon Mobil Corp. 2,000 81,580 ------------ 254,280 ------------ Pharmaceutical Preparations - 10.50% Bristol-Myers Squibb Inc. 3,000 84,150 Johnson & Johnson 2,000 106,840 Merck & Co., Inc. 3,000 142,800 Pfizer, Inc. 4,400 161,172 Schering-Plough Corp. 1,000 17,540 Wyeth 2,000 81,900 ------------ 594,402 ------------ Photographic Equipment & Supplies - 0.50% Eastman Kodak, Inc. 1,000 28,410 ------------ Radio & Tv Broadcasting & Communications Equipment - 1.03% QUALCOMM, Inc. 1,000 58,420 ------------ See accompanying notes which are an integral part of the financial statements. Dobson Covered Call Fund Schedule of Investments - continued January 31, 2004 (Unaudited) Shares Value -------------- ------------ Radiotelephone Communications - 1.20% AT&T Wireless Services, Inc. (a) 321 $ 3,547 Dominion Resouces, Inc. 1,000 64,160 ------------ 67,707 ------------ Retail - Drug Stores & Proprietary Stores - 1.83% Walgreen Co. 3,000 103,650 ------------ Retail - Eating Places - 1.36% McDonald's Corp. 3,000 77,220 ------------ Retail - Lumber & Other Building Materials Dealers - 1.88% Home Depot, Inc. 3,000 106,410 ------------ Retail - Variety Stores - 4.87% Target Corp. 3,000 113,880 Wal-Mart Stores, Inc. 3,000 161,550 ------------ 275,430 ------------ Retail-Drug Stores and Proprietary Stores - 0.16% Medco Health Solutions, Inc. (a) 241 8,881 ------------ Security Brokers, Dealers & Flotation Companies - 2.30% The Charles Schwab Corp. 1,000 12,590 Merrill Lynch & Co., Inc. 2,000 117,580 ------------ 130,170 ------------ Semiconductors & Related Devices - 3.84% Agere Systems, Inc. - Class B (a) 264 963 Intel Corp. 4,000 122,400 Texas Instruments, Inc. 3,000 94,050 ------------ 217,413 ------------ Services - Miscellaneous Amusement & Recreation - 1.27% Walt Disney Co. 3,000 72,000 ------------ Services - Prepackaged Software - 2.44% Microsoft Corp. 4,000 110,600 Oracle Corp. (a) 2,000 27,620 ------------ 138,220 ------------ Soap, Detergent, Cleaning Preparations, Perfumes, Cosmetics - 1.79% Procter & Gamble, Inc. 1,000 101,080 ------------ Telephone & Telegraph Apparatus - 0.08% Lucent Technologies, Inc. (a) 1,000 4,480 ------------ Telephone Communications - 4.00% AT&T Corp. 3,200 62,272 BellSouth Corp. 3,000 87,690 SBC Communications, Inc. 3,000 76,500 ------------ 226,462 ------------ TOTAL COMMON STOCKS (Cost $5,359,849) 5,564,273 ------------ See accompanying notes which are an integral part of the financial statements. Dobson Covered Call Fund Schedule of Investments - continued January 31, 2004 (Unaudited) Principal Amount Value -------------- ------------ Money Market Securities - 6.55% Federated Prime Obligations, 0.68% (b) $ 370,821 $ 370,821 ------------ TOTAL MONEY MARKET SECURITIES (Cost $370,821) 370,821 ------------ TOTAL INVESTMENTS (Cost $5,730,670) - 104.86% $ 5,935,094 ------------ Liabilities in excess other assets - (4.86%) (275,070) ------------ TOTAL NET ASSETS - 100.00% $ 5,660,024 ============ (a) Non-income producing. (b) Variable rate security; the coupon rate shown represents the rate at January 31, 2004. See accompanying notes which are an integral part of the financial statements. Dobson Covered Call Fund Schedule of Investments - continued January 31, 2004 (Unaudited) Options Written January 31, 2004 Shares Subject Common Stocks / Expiration Date @ Exercise Price to Call Value --------------------------------------------------------- -------------- ------------ American Express / April 2004 @ 47.5 1,000 $ 4,800 American Express / March 2004 @ 50 1,000 2,550 American International Group, Inc. / February 2004 @ 60 1,000 9,200 American International Group, Inc. / February 2004 @ 65 1,000 4,800 American Telephone & Telegraph Co. / April 2004 @ 20 2,000 1,500 American Telephone & Telegraph Co. / July 2004 @ 22.5 1,200 600 Amgen, Inc. / August 2004 @ 60 1,000 6,100 Amgen, Inc. / October 2004 @ 65 1,000 1,250 Bank of America Corp. / February 2004 @ 75 1,000 6,700 Bank of America Corp. / May 2004 @ 80 1,000 3,600 Bank One Corp. / February 2004 @ 45 1,500 8,400 Bank One Corp. / May 2004 @ 45 1,500 8,700 BellSouth Corp. / July 2004 @ 27.5 1,000 2,750 BellSouth Corp. / March 2004 @ 30 2,000 1,700 Boeing Co. / February 2004 @ 37.5 2,000 8,400 Boeing Co. / May 2004 @ 40 1,000 3,100 Bristol-Myers Squibb Co. / February 2004 @ 27.5 2,000 1,700 Bristol-Myers Squibb Co. / March 2004 @ 30 1,000 350 Caterpillar, Inc. / May 2004 @ 80 1,000 3,200 ChevronTexaco Corp. / February 2004 @ 85 1,000 2,000 ChevronTexaco Corp. / March 2004 @ 85 1,000 2,400 Cisco Systems, Inc. / April 2004 @ 22.5 2,000 8,000 Cisco Systems, Inc. / July 2004 @ 30 2,000 2,000 Citigroup, Inc. / June 2004 @ 50 2,300 4,715 Citigroup, Inc. / March 2004 @ 47.5 2,000 5,500 Coca-Cola Co. / February 2004 @ 47.5 900 1,800 Coca-Cola Co. / May 2004 @ 47.5 1,000 2,700 Comcast Corp. Class A / April 2004 @ 35 1,300 1,755 Comcast Corp. Class A / July 2004 @ 37.50 1,000 1,200 Dell, Inc. / February 2004 @ 35 2,000 700 Dell, Inc. / May 2004 @ 35 2,000 2,500 Disney Co. / April 2004 @ 22.5 1,000 2,100 Disney Co. / July 2004 @ 25 2,000 2,300 Dow Chemical / March 2004 @ 40 1,000 2,450 Dow Chemical / March 2004 @ 35 1,000 6,900 Eastman Kodak / July 2004 @ 30 1,000 1,550 Exxon Mobil / April 2004 @ 40 1,000 1,600 Exxon Mobil / July 2004 @ 40 1,000 2,200 FedEx Corp. / February 2004 @ 70 1,000 250 First Data / February 2004 @ 37.5 1,000 2,250 First Data / May 2004 @ 40 1,000 1,850 General Electric Co. / March 2004 @ 30 1,000 4,000 General Electric Co. / March 2004 @ 32.5 2,000 3,600 See accompanying notes which are an integral part of the financial statements. Dobson Covered Call Fund Schedule of Investments - continued January 31, 2004 (Unaudited) Shares Subject Common Stocks / Expiration Date @ Exercise Price to Call Value --------------------------------------------------------- -------------- ------------ General Motors Corp. / June 2004 @ 55 1,000 $ 1,050 General Motors Corp. / March 2004 @ 42.5 1,000 7,000 Gillette / March 2004 @ 35 1,000 2,100 H.J. Heinz Co. / March 2004 @ 35 1,000 850 Home Depot Inc. / February 2004 @ 35 2,000 2,300 Home Depot Inc. / May 2004 @ 37.5 1,000 950 Honeywell International, Inc. / March 2004 @ 32.5 1,000 3,500 Intel Corp. / April 2004 @ 35 2,000 900 Intel Corp. / February 2004 @ 32.5 2,000 500 International Business Machines / April 2004 @ 90 1,000 10,200 International Business Machines / February 2004 @ 95 1,000 4,500 International Paper / April 2004 @ 42.5 1,000 1,600 International Paper / July 2004 @ 45 1,000 950 J.P. Morgan Chase & Co. / June 2004 @ 37.5 1,000 2,850 J.P. Morgan Chase & Co. / March 2004 @ 35 1,000 4,100 Johnson & Johnson / April 2004 @ 55 1,000 950 Johnson & Johnson / July 2004 @ 55 1,000 1,650 McDonald's Corp. / June 2004 @ 30 1,500 450 McDonald's Corp. / March 2004 @ 25 1,500 1,950 Medtronic, Inc. / February 2004 @ 55 1,000 50 Medtronic, Inc. / May 2004 @ 50 1,000 1,850 Merrill Lynch & Co., Inc. / April 2003 @ 60 1,000 1,950 Merrill Lynch & Co., Inc. / February 2004 @ 45 2,000 5,800 Merrill Lynch & Co., Inc. / July 2004 @ 50 1,000 1,400 Merrill Lynch & Co., Inc. / July 2004 @ 60 1,000 2,950 Microsoft Corp. / April 2004 @ 27.5 2,000 2,500 Microsoft Corp. / July 2004 @ 30 2,000 1,600 Morgan Stanley / April 2004 @ 55 1,000 4,600 Morgan Stanley / July 2004 @ 60 1,000 3,000 PepsiCo, Inc. / April 2004 @ 50 1,000 350 PepsiCo, Inc. / July 2004 @ 47.5 1,000 1,800 Pfizer, Inc. / February 2004 @ 35 2,400 4,200 Pfizer, Inc. / March 2004 @ 32.5 2,000 8,000 Procter & Gamble Co. / April 2004 @ 100 1,000 3,100 QUALCOMM, Inc. / April 2004 @ 50 1,000 9,100 SBC Communications / April 2004 @ 25 2,000 2,700 Schlumberger Ltd. / August 2004 @ 55 1,000 7,700 Schlumberger Ltd. / May 2004 @ 50 1,000 11,400 Target Corp. / April 2004 @ 40 1,500 1,800 Target Corp. / March 2004 @ 40 1,500 1,275 Texas Instruments / April 2004 @ 27.5 1,500 6,900 Texas Instruments / July 2004 @ 35 1,500 2,475 United Technologies / February 2004 @ 85 600 6,120 Walgreen Co. / April 2004 @ 35 1,500 1,650 Walgreen Co. / July 2004 @ 35 1,500 2,550 Wal-Mart Stores, Inc. / February 2004 @ 55 2,000 1,100 Wal-Mart Stores, Inc. / March 2004 @ 60 1,000 200 Wells Fargo & Co. / April 2004 @ 60 1,000 600 Wells Fargo & Co. / February 2004 @ 55 1,000 2,500 Wyeth / April 2004 @ 45 1,000 450 Wyeth / July 2004 @ 45 1,000 1,200 ------------ Total (premiums received $215,610) 121,700 $ 296,940 ============ See accompanying notes which are an integral part of the financial statements. Dobson Covered Call Fund Statement of Assets and Liabilities January 31, 2004 (Unaudited) Assets Investments in securities, at value (cost $5,730,670) $ 5,935,094 Interest receivable 262 Dividends receivable 8,922 Receivable for options written 11,648 Receivable from advisor 11,438 --------------- Total assets 5,967,364 --------------- Liabilities Covered call options written (premiums received $215,610) 296,940 Other payables and accrued expenses 10,123 Trustee fees accrued 277 --------------- Total liabilities 307,340 --------------- Net Assets $ 5,660,024 =============== Net Assets consist of: Paid in capital 5,750,244 Undistributed accumulated net investment income (loss) (3,319) Net realized appreciateion (depreciation) on investments (209,994) Net unrealized appreciation (depreciation) on investments 204,424 on options (81,331) --------------- Net Assets $ 5,660,024 =============== Shares outstanding (unlimited number of shares with no par value) 764,571 --------------- Net Asset Value Offering price and redemption price per share $ 7.40 =============== See accompanying notes which are an integral part of the financial statements. Dobson Covered Call Fund Statement of Operations Six months ended January 31, 2004 (Unaudited) Investment Income Dividend income $ 48,094 Interest income 1,591 --------------- Total Income 49,685 --------------- Expenses Investment advisor fee 21,156 Administration expenses 15,600 Custodian expenses 8,100 Transfer agent expenses 6,106 Fund accounting expenses 6,089 Auditing expenses 5,660 Pricing expenses 4,127 Legal expenses 3,543 Trustee expenses 1,825 Registration expenses 1,353 Miscellaneous expenses 1,066 Insurance expenses 979 Printing expenses 503 --------------- Total Expenses 76,107 Reimbursed expenses (a) (36,409) --------------- Net operating expenses 39,698 --------------- Net Investment Income (Loss) 9,987 --------------- Realized & Unrealized Gain (Loss) Net realized gain (loss) on investment securities (6,445) Net realized gain (loss) on options transactions (166,545) Change in net unrealized appreciation (depreciation) on investment securities 568,564 --------------- Net realized and unrealized gain (loss) on investment securities 395,574 --------------- Net increase (decrease) in net assets resulting from operations $ 405,561 =============== (a) See note 3 to the financial statements. See accompanying notes which are an integral part of the financial statements. Dobson Covered Call Fund Statements of Changes In Net Assets Six months ended January 31, 2004 Year ended (Unaudited) July 31, 2003 ----------------------- ------------------ Operations Net investment income (loss) $ 9,987 $ 10,446 Net realized gain (loss) on investment securities (6,445) 1,516 Net realized gain (loss) on options transactions (166,545) 3,023 Change in net unrealized appreciation (depreciation) 568,564 218,573 ----------------------- ------------------ Net increase (decrease) in net assets resulting from operations 405,561 233,558 ----------------------- ------------------ Distributions From net investment income - (3,978) From net realized gain - (93,218) ----------------------- ------------------ Total distributions - (97,196) ----------------------- ------------------ Capital Share Transactions Proceeds from shares sold 677,650 3,371,983 Reinvestment of distributions - 97,196 Amount paid for shares repurchased (220,967) (200,229) ----------------------- ------------------ Net increase (decrease) in net assets resulting from share transactions 456,683 3,268,950 ----------------------- ------------------ ----------------------- ------------------ Total Increase (Decrease) in Net Assets 862,244 3,405,312 ----------------------- ------------------ Net Assets Beginning of period 4,797,780 1,392,468 ----------------------- ------------------ End of period $ 5,660,024 $ 4,797,780 ======================= ================== Accumulated net investment income (loss) $ (3,319) $ - ----------------------- ------------------ Capital Share Transactions Shares sold 95,575 512,521 Shares issued in reinvestment of distributions - 15,046 Shares repurchased (30,922) (29,941) ----------------------- ------------------ Net increase (decrease) from capital transactions 64,653 497,626 =========================================== See accompanying notes which are an integral part of the financial statements. Dobson Covered Call Fund Financial Highlights Six months ended Jan. 31, 2004 Year ended Year ended Year ended Year ended Period ended (Unaudited) July 31, 2003July 31, 2002July 31, 2001July 31, 2000 July 31,1999(a) -------------------------- ----------- ----------- ------------ ------------ Selected Per Share Data Net asset value, beginning of period $ 6.85 $ 6.88 $ 9.34 $ 10.67 $ 10.78 $ 10.00 ------------ ------------ ----------- ----------- ------------ ------------ Income from investment operations Net investment income (loss) - 0.03 0.02 0.04 0.03 0.01 Net realized and unrealized gain (loss) (0.55) 0.42 (1.36) (0.22) 0.35 0.77 ------------ ------------ ----------- ----------- ------------ ------------ Total from investment operations (0.55) 0.45 (1.34) (0.18) 0.38 0.78 ------------ ------------ ----------- ----------- ------------ ------------ Less Distributions to shareholders: From net investment income - (0.02) (0.03) (0.18) (0.01) - From net realized gain - (0.46) (1.09) (0.97) (0.48) - ------------ ------------ ----------- ----------- ------------ ------------ Total distributions - (0.48) (1.12) (1.15) (0.49) - ------------ ------------ ----------- ----------- ------------ ------------ Net asset value, end of period $ 6.30 $ 6.85 $ 6.88 $ 9.34 $ 10.67 $ 10.78 ============ ============ =========== =========== ============ ============ Total Return 8.03% (b) 6.91% -15.82% -1.64% 3.59% 7.80% (b) Ratios and Supplemental Data Net assets, end of period (000) $ 5,660 $ 4,798 $ 1,392 $ 1,652 $ 1,540 $ 1,375 Ratio of expenses to average net assets 1.50% (c) 1.50% 1.50% 1.50% 1.50% 1.50% (c) Ratio of expenses to average net assets before waiver & reimbursement 2.87% (c) 4.83% 5.51% 5.19% 5.47% 9.77% (c) Ratio of net investment income to average net assets 0.38% (c) 0.48% 0.26% 0.44% 0.31% 0.32% (c) Ratio of net investment income to average net assets before waiver & reimbursement (0.99)(c) (2.85)% (3.75)% (3.25)% (3.66)% (7.95) (c) Portfolio turnover rate 0.20% 0.47% 6.51% 6.62% 31.75% 47.01% (a) For the period March 24, 1999 (Commencement of Operations) to July 31, 1999. (b) Not annualized (c) Annualized. See accompanying notes which are an integral part of the financial statements. Dobson Covered Call Fund Notes to the Financial Statements January 31, 2004 (Unaudited) NOTE 1. ORGANIZATION Dobson Covered Call Fund (the "Fund") was organized as a diversified series of the AmeriPrime Funds (the "Trust") on March 22, 1999 and commenced operations on March 24, 1999. The Trust is an open-end investment company established under the laws of Ohio by an Agreement and Declaration of Trust dated August 8, 1995 (the "Trust Agreement"). The Trust Agreement permits the 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 Trustees. The Fund's investment objective is total return over the long term. The investment advisor to the Fund is Dobson 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 - Equity 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. Securities that are traded on any stock exchange are generally valued by the pricing service at the last quoted sale price. Lacking a last sale price, an exchange traded security is generally valued by the pricing service at its last bid price. Securities traded in the NASDAQ over-the-counter market are generally valued by the pricing service at the NASDAQ Official Closing Price. When market quotations are not readily available, when the Advisor determines that the market quotation or the price provided by the pricing service does not accurately reflect the current market value or when restricted securities are being valued, such securities are valued as determined in good faith by the Advisor, in conformity with guidelines adopted by and subject to review of the Board of Trustees of the Trust. 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, subject to review of the Board of Trustees. Short term investments in fixed income securities with maturities of less than 60 days when acquired, or which subsequently are within 60 days of maturity, are valued by using the amortized cost method of valuation, which the Board has determined will represent fair value. Option writing - When the Fund writes an option, an amount equal to the premium received by the Fund is recorded as a liability and is subsequently adjusted to the current fair value of the option written. Premiums received from writing options that expire unexercised are treated by the Fund on the expiration date as realized gains from investments. The difference between the premium and the amount paid on effecting a closing purchase transaction, including brokerage commissions, is also treated as a realized gain, or if the premium is less than the amount paid for the closing purchase transaction, as a realized loss. If a call option is exercised, the premium is added to the proceeds from the sale of the underlying security or currency in determining whether the Fund has realized a gain or loss. If a put option is exercised, the premium reduces the cost basis of the securities purchased by the Fund. The Fund as writer of an option bears the market risk of an unfavorable change in the price of the security underlying the written option. Dobson Covered Call Fund Notes to the Financial Statements January 31, 2004 - continued (Unaudited) NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - continued Federal Income Taxes- There is no provision for federal income tax. The Fund intends to continue to qualify each year as a "regulated investment company" under subchapter M of the Internal Revenue Code of 1986, as amended, by distributing substantially all of its net investment income and net realized capital gains. Security Transactions and Related Income- 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. 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 realized long term capital gains and its net realized short term capital gains at least once a year. The treatment for financial reporting purposes of distributions made to shareholders during the year from net investment income or net realized capital gains may differ from their ultimate treatment for federal income tax purposes. These differences are caused primarily by differences in the timing of the recognition of certain components of income, expense or realized capital gain for federal income tax purposes. Where such differences are permanent in nature, they are reclassified in the components of the net assets based on their ultimate characterization for federal income tax purposes. Any such reclassifications will have no effect on net assets, results of operations or net asset values per share of the Fund. NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES The Fund retains Dobson Capital Management, Inc. 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 0.80% of the average daily net assets of the Fund, less the amount by which total operating expenses, including management fees, exceed 1.50% of the average value of its daily net assets. The Advisor has contractually agreed to reimburse the Fund for the operating expenses it incurs, but only to the extent necessary to maintain the Fund's total annual operating expenses (excluding brokerage costs, borrowing costs, taxes and extraordinary expenses) at 1.50% of its average daily net assets. For the six months ended January 31, 2004, the Advisor received fees of $21,156 from the Fund. For the six months ended January 31, 2004, the Advisor was obligated to waive and/or reimburse expenses of $36,409. At January 31, 2004 there was a net receivable from the Advisor in the amount of $11,438. 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 services, including all regulatory reporting and necessary office equipment and personnel. Unified receives a monthly fee from the Fund equal to an annual rate of 0.10% of the Fund's assets under $50 million, 0.07% of the Fund's assets from $50 million to $100 million, 0.05% of the Fund's assets $100 million to $150, and 0.03% of the Fund's assets over 150 million (subject to a minimum fee of $2,500 per month). For the six months ended January 31, 2004, the administrator received fees of $15,600 from the Fund for administrative services provided to the Fund. Certain Trustees and the officers of the Trust are members of management and employees of Unified, and/or shareholders of Unified Financial Services, Inc., the parent of Unified. Dobson Covered Call Fund Notes to the Financial Statements January 31, 2004 - continued (Unaudited) NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - continued 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 $938). For the six months ended January 31, 2004, Unified received fees of $5,144 from the Fund for transfer agent services provided to the Fund and $962 in reimbursement for out-of-pocket expenses incurred in providing transfer agent services 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 $2,100 per month for assets of $20 million to $100 million). For the six months ended January 31, 2004, Unified received fees of $6,089 from the Fund for fund accounting services provided to the Fund. The Fund retains Unified Financial Securities, Inc. (the "Distributor) to act as the principal distributor of its shares. The Fund has adopted a plan, pursuant to Rule 12b-1 under the Investment Company Act of 1940, which permits the Fund to pay directly, or reimburse the Fund's Advisor and Distributor, for certain distribution and promotion expenses related to marketing its shares, in an amount not to exceed 0.25% of the average daily net assets of the Fund. Effective December 10, 1999 the 12b-1 plan was inactivated. Timothy L. Ashburn (a Trustee and officer of the Trust) and Thomas G. Napurano (an officer of the Trust) are a director and officer, respectively, of the Distributor and of Unified Financial Services, Inc. (the parent company of the Distributor), and may be deemed to be affiliates of the Distributor. NOTE 4. INVESTMENTS For the six months ended January 31, 2004, purchases and sales of investment securities, other than short-term investments and short-term U.S. government obligations were as follows: Purchases U.S. Government Obligations Sales $ - Other 622,695 U.S. Government Obligations $ - Other 10,259 As of January 31, 2004, the net unrealized depreciation of investments for tax purposes was as follows: Gross Appreciation $ 669,633 Gross (Depreciation) (546,540) --------------- Net Appreciation on Investments $ 123,093 =============== At January 31, 2004, the aggregate cost of securities for federal income tax purposes was $5,730,670. Dobson Covered Call Fund Notes to the Financial Statements January 31, 2004 - continued (Unaudited) NOTE 5. ESTIMATES Preparation of financial statements in accordance with accounting principals generally accepted in the United States of America 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 January 31, 2004, Pershing LLC held 69.53% of the Fund in an omnibus account for the benefit of others. NOTE 7. CALL OPTIONS WRITTEN As of January 31, 2004, portfolio securities valued at $5,344,664 were held in escrow by the custodian as cover for call options written by the Fund. Transactions in options written during the period ended January 31, 2004 were as follows: Number of Premiums Contracts Received Options outstanding at July 31, 2003 1,132 187,668 Options written 1,724 308,964 Options terminated in closing purchase transactions (1,041) (178,644) Options expired (553) (90,973) Options exercised (55) (13,174) ------------- ------------ Options outstanding at January 31, 2004 1,207 $213,840
NOTE 8. DISTRIBUTION TO SHAREHOLDERS On December 11, 2002, an income distribution of $0.0195 per share and capital gain distribution of $0.4569 were declared. The dividends were paid on December 12, 2002 to shareholders of record on December 11, 2002. The tax character of distributions paid during the fiscal years ended July 31, 2003 and 2002 were as follows: Distributions paid from: 2003 2002 ------------- ------------ Ordinary Income $ 3,978 $ 5,586 Short-Term Capital Gain 93,218 176,278 Long-Term Capital Gain - 2,546 ------------- ------------ $ 97,196 $184,410 ============= ============ Dobson Covered Call Fund Notes to the Financial Statements July 31, 2003 - continued (Unaudited) NOTE 8. DISTRIBUTION TO SHAREHOLDERS - continued The Fund paid no distributions during the six-months ended January 31, 2004. As of July 31, 2003, the components of distributable earnings/ (accumulated losses) on a tax basis were as follows: Undistributed ordinary income/(accumulated losses) $ - Undistributed long-term capital gain/(accumulated losses) 453 Unrealized appreciation/(depreciation) (482,928) --------------- $ (482,475) =============== The difference between book basis and tax basis unrealized appreciation (depreciation) is attributable to the tax deferral of wash sales and post-October losses. As of January 31, 2004, the components of distributable earnings/ (accumulated losses) on a tax basis were as follows: Undistributed accumulated net investment income (loss) $ (3,319) Net realized appreciation (depreciation) on investments (209,994) Net unrealized appreciation (depreciation) 123,093 --------------- $ (90,220) =============== NOTE 9. CHANGE OF AUDITORS On March 14, 2004, Cohen McCurdy, Ltd. ("Cohen") was selected to replace McCurdy & Associates CPA's, Inc. ("McCurdy") as the Fund's independent auditor for the 2004 fiscal year. The Trust's selection of Cohen was approved by both the Audit Committee and the Board of Trustees. McCurdy's report on the Fund's financial statements as of July 31, 2003 did not contain an adverse opinion or a disclaimer of opinion and was not qualified or modified as to uncertainty, audit scope or accounting principles. At the financial statement's date and through the date of the engagement of Cohen, there were no disagreements between the Fund and McCurdy on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which such disagreements, if not resolved to the satisfaction of McCurdy, would have caused it to make reference to the subject matter of the disagreement in connection with its reports on the financial statements for such years. PROXY VOTING A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge upon request by calling the Fund at 1-877-546-3066. TRUSTEES Timothy L. Ashburn, Chairman Gary E. Hippenstiel Stephen A. Little Daniel J. Condon Ronald C. Tritschler OFFICERS Timothy L. Ashburn, President and Asst. Secretary Thomas G. Napurano, Chief Financial Officer and Treasurer Carol J. Highsmith, Secretary INVESTMENT ADVISOR Dobson Capital Management, Inc. 1422 S. Van Ness Street Santa Ana, California 92707 877-2-DOBSON (877-236-2766) www.dobsoncapital.com DISTRIBUTOR Unified Financial Securities, Inc. 431 N. Pennsylvania Street Indianapolis, Indiana 46204 INDEPENDENT ACCOUNTANTS Cohen McCurdy, LTD. 27955 Clemens Rd. Westlake, OH 44145 LEGAL COUNSEL Thompson Hine LLP 312 Walnut St., Suite 1400 Cincinnati, OH 45202 CUSTODIAN UMB Bank, N.A., 928 Grand Blvd., 10th floor, Kansas City, Missouri 64106 ADMINISTRATOR, TRANSFER AGENT AND FUND ACCOUNTANT Unified Fund Services, Inc. 431 N. Pennsylvania Street Indianapolis, Indiana 46204 This report is intended only for the information of shareholders or those who have received the Fund's prospectus which contains information about the Fund's management fee and expenses. Please read the prospectus carefully before investing. Distributed by Unified Financial Securities, Inc. Member NASD/SIPC 2. Code of Ethics. Not Applicable Item 3. Audit Committee Financial Expert. Not Applicable Item 4. Principal Accountant Fees and Services. Not Applicable Item 5. Audit Committee of Listed Companies. Not applicable. Item 6. Reserved. Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Funds. Not applicable. Item 8. Purchases of Equity Securities by Closed-End Funds. Not applicable. Item 9. Submission of Matters to a Vote of Security Holders. Not Applicable Item 10.Controls and Procedures. (a) Based on an evaluation of the registrant's disclosure controls and procedures as of January 9, 2004, the disclosure controls and procedures are reasonably designed to ensure that the information required in filings on Forms N-CSR is recorded, processed, summarized, and reported on a timely basis. (b) There were no significant changes in the registrant's internal control over financial reporting that occurred during the registrant's last fiscal half-year that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. Item 11. Exhibits. (a)(1) Not Applicable (a)(2) Certifications by the registrant's principal executive officer and principal financial officer, pursuant to Section 302 of the Sarbanes- Oxley Act of 2002 and required by Rule 30a-2(a) under the Investment Company Act of 1940 are filed herewith. (a)(3) Not Applicable (b) Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 is filed herewith. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) Ameriprime Funds_ By * Timothy Ashburn, President Date Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By *____/s/_Timothy Ashburn, President____________________________________________ Timothy Ashburn, President Date April 12, 2004 By /s/ Thomas Napurano, Treasurer and Chief Financial Officer * Thomas Napurano, Treasurer and Chief Financial Officer Date April 12, 2004