-----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, RKqOnh3KHntXDXXuvdT/jiuOHoLYRbMnjaX18O/8sLGQpfx+5sutXsmnrw0gFRBL jHcdP64fnUkZU6ZzFEoiHw== 0001012709-02-001585.txt : 20021209 0001012709-02-001585.hdr.sgml : 20021209 20021209164532 ACCESSION NUMBER: 0001012709-02-001585 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020930 FILED AS OF DATE: 20021209 EFFECTIVENESS DATE: 20021209 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IMPACT MANAGEMENT INVESTMENT TRUST CENTRAL INDEX KEY: 0001030805 IRS NUMBER: 232873254 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-08065 FILM NUMBER: 02852557 BUSINESS ADDRESS: STREET 1: 1875 SKI TIME SQUARE DR STREET 2: STE ONE CITY: STEAMBOAT SPRINGS STATE: CO ZIP: 80487 BUSINESS PHONE: 9708791189 MAIL ADDRESS: STREET 1: ARROTT BUILDING STREET 2: 401 WOOD ST 3RD FL CITY: PITTSBURGH STATE: PA ZIP: 15222 N-30D 1 n30d-1202.txt IMPACT MANAGEMENT INVESTMENT TRUST IMPACT MANAGEMENT INVESTMENT TRUST TABLE OF CONTENTS SECTION PAGE - -------------------------------------------------------------------------------- A Message From the President of the Trust......................................2 A Message From Your Investment Management Team A Message From Your Portfolio Manager- IMPACT Total Return Portfolio......3 A Message From Your Portfolio Manager- IMPACT 25 Fund.....................4 IMPACT TOTAL RETURN PORTFOLIO Fund Performance..........................................................5 Financial Highlights- Class R.............................................8 Financial Highlights- Class F.............................................9 Financial Highlights- Class A............................................10 Financial Highlights- Institutional Class................................11 Statement of Assets and Liabilities......................................12 Statement of Investments in Securities...................................13 Statement of Operations..................................................16 Statements of Changes in Net Assets......................................17 IMPACT 25 FUND Fund Performance.........................................................18 Financial Highlights.....................................................20 Statement of Assets and Liabilities......................................21 Statement of Investments in Securities...................................22 Statement of Operations..................................................24 Statements of Changes in Net Assets......................................25 Notes to Financial Statements.................................................26 Independent Auditors Report...................................................31 1 ......A MESSAGE FROM THE PRESIDENT OF THE TRUST Dear Shareholders, Enclosed you will find the annual report to shareholders for the year ended September 30, 2002 for the IMPACT Management Investment Trust. In the semi annual report for the period ended March 31, 2002, I indicated to you that despite the exceptional investment performance by the IMPACT Total Return Portfolio's (Portfolio) investment management team and the outstanding efforts made by the Portfolio's underwriter during the previous year, the asset level achieved was inadequate to allow the investment advisor, Equity Assets Management, Inc. ("EAM") to achieve profitability. In May 2002, EAM entered into an agreement with Schneider Capital Management, Inc. ("Schneider"), the Portfolio's sub-adviser to sell its business relating to the management of the Portfolio's assets to Schneider. The agreement was later terminated in September 2002. EAM continues to be unable to achieve profitability in connection with its management of the Portfolio and has been unable to attract any additional qualified proposals for the sale of the investment management business related to the Portfolio. The Board of Trustees has determined that the Portfolio is not presently economically viable and does not have prospects to become economically viable in the future. In addition, the Board has determined to cease offering shares of the Portfolio for sale. At the time this report is being mailed to you, you have already received notice that the Board of Trustees in October 2002 directed the orderly liquidation of the IMPACT Total Return Portfolio and the IMPACT 25 Fund. Also, in late November 2002, Schneider and Denali Advisors, LLC, (the sub advisor for the IMPACT 25 Fund) were directed to sell all the securities within each respective fund thereby converting the fund to a 100% cash position. If you continue to own shares within the IMPACT Total Return Portfolio or the IMPACT 25 Fund, I strongly encourage you to redeem your shares immediately since the mutual funds are in a 100% cash position. A prompt redemption will serve to avoid any additional operating expenses within the mutual funds during the formal liquidation process. On behalf of the Board of Trustees, I want to thank you for being a shareholder of IMPACT Management Investment Trust and wish you the best in your future endeavors. Sincerely, A.J. Elko President 2 ......A MESSAGE FROM YOUR PORTFOLIO MANAGER - IMPACT TOTAL RETURN PORTFOLIO Dear Shareholders: We are pleased to provide you with the annual report for the IMPACT Total Return Portfolio for the fiscal year ended September 30, 2002. INVESTMENT REVIEW: The Portfolio returned -14.41% (Class R Shares) versus -16.95% for the Russell 1000 Value Index. The favorable performance versus the benchmark was generated from varied sources in the Portfolio's holdings. Investments in natural gas stocks, healthcare provider Aetna Inc., and sweetener producer Tate & Lyle PLC made a favorable contribution to returns. STRATEGY AND OUTLOOK: Mixed data in recent months heightened investor fears that the recovery might stagger back towards recession. A shroud of pessimism enveloped the economic viewpoint of many U.S. investors, which is understandable based on the "personal portfolio pain" they endured during the past 2 1/2 years. Absent some external shock to the system, we still believe that an objective outlook must weigh in favor of continued U.S. economic expansion that will be modest at best. The tentative upward turn in corporate profits should also endure. The Portfolio is focused on companies where the recent profit picture is bleak, stock prices are severely depressed, investor expectations are very low, and we have identified internal or external factors that will spark an earnings recovery. In this vein, the Portfolio is over weighted in trucking, semiconductors, natural gas, food processing and basic materials. The weighting is less than the benchmark in the financial, consumer discretionary and utility sectors. Arnold C. Schneider III, CFA Portfolio Manager Schneider Capital Management 3 ......A MESSAGE FROM YOUR PORTFOLIO MANAGER - IMPACT 25 FUND Dear Shareholder: We are pleased to provide you with the annual report for the IMPACT 25 Fund for the fiscal year ended September 30, 2002. U.S. STOCK MARKET OVERVIEW The decline in stocks continued during the year ended September 30, 2002. The decline in the S&P 500 for the 12-month period was 20.5%. The NASDAQ Composite declined 20.9%. The Russell 2000 index of small cap stocks declined 9.3%. The good news is that valuations are cheaper, so stocks should provide much better returns in the future. It is taking a long time for the stock market bubble to deflate, but with valuations at more reasonable levels, the prospect for attractive returns is higher. INVESTMENT REVIEW We began managing this portfolio April 12, 2002, so we have managed it for less than six months. During that time, the S&P 500 returned -26.03%. The Impact 25 Fund Class A shares returned -18.50% net of fees. We were pleased to be able to add 7.53% of excess returns by our active management. While we are very disappointed by the decline in the portfolio, we are pleased to be ahead of the benchmark by a nice margin. We favored securities that were deep value with low Price/earnings, Price/book value, and high dividend yields. These securities are safer and do not fall as much in down markets. STRATEGY AND OUTLOOK We continue to favor low-risk stocks that are cheap relative to earnings, cash flow, book value, or dividends. While there have been some strong positive stock returns recently, we expect valuations to trend towards the average, favoring value stocks over growth stocks. The economy is slowly improving and has been strongest in the consumer areas. Our largest sector weights are in Financials, Consumer Cyclicals, Consumer Non-Cyclicals, and Energy. We hold very little in the Technology and Telecom sectors. We believe that the portfolio is well positioned to benefit from a slow-growth economy. We appreciate your support as we work to find companies that are out of favor and poised to rebound. Michael R. Munson, CFA Portfolio Manager Denali Advisors 4 IMPACT MANAGEMENT INVESTMENT TRUST IMPACT TOTAL RETURN PORTFOLIO - -------------------------------------------------------------------------------- FUND PERFORMANCE - -------------------------------------------------------------------------------- FOR THE FISCAL YEAR FROM OCTOBER 1, 2001 THROUGH SEPTEMBER 30, 2002 - -------------------------------------------------------------------------------- GROWTH OF A $10,000 INVESTMENT IMPACT TOTAL RETURN PORTFOLIO CLASS R SHARES [GRAPHIC OMITTED]
9/30/1997 9/30/1998 9/30/1999 9/30/2000 9/30/2001 9/30/2002 --------- --------- --------- --------- --------- --------- Impact Total Return - Retail $10,000 $8,407 $9,374 $12,319 $13,334 $11,413 Russell 1000 Value Index $10,000 $10,359 $12,298 $13,394 $12,201 $10,133 S&P 500 Index $10,000 $10,900 $13,925 $15,774 $11,570 $9,202
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- GROWTH OF A $10,000 INVESTMENT IMPACT TOTAL RETURN PORTFOLIO CLASSS A SHARES [GRAPHIC OMITTED]
2/3/2000 9/30/2000 9/30/2001 9/30/2002 -------- --------- --------- --------- Impact Total Return - Class A $10,000 $11,345 $11,672 $9,475 Russell 1000 Value Index $10,000 $10,698 $9,744 $8,092 S&P 500 Index $10,000 $10,155 $7,449 $5,924
5 IMPACT MANAGEMENT INVESTMENT TRUST IMPACT TOTAL RETURN PORTFOLIO - -------------------------------------------------------------------------------- FUND PERFORMANCE - -------------------------------------------------------------------------------- FOR THE FISCAL YEAR FROM OCTOBER 1, 2001 THROUGH SEPTEMBER 30, 2002 - -------------------------------------------------------------------------------- GROWTH OF A $10,000 INVESTMENT IMPACT TOTAL RETURN PORTFOLIO CLASS F SHARES [GRAPHIC OMITTED]
10/5/1999 9/30/2000 9/30/2001 9/30/2002 --------- --------- --------- --------- Impact Total Return - Class F $10,000 $13,220 $14,436 $12,427 Russell 1000 Value Index $10,000 $10,854 $9,886 $8,210 S&P 500 Index $10,000 $11,165 $8,190 $6,514
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- GROWTH OF A $10,000 INVESTMENT IMPACT TOTAL RETURN PORTFOLIO INSTITUTIONAL CLASS SHARES [GRAPHIC OMITTED] 12/6/2001 9/30/2002 --------- --------- Impact Total Return - Institutional Class $10,000 $7,665 Russell 1000 Value Index $10,000 $8,148 S&P 500 Index $10,000 $7,611 6 IMPACT MANAGEMENT INVESTMENT TRUST IMPACT TOTAL RETURN PORTFOLIO - -------------------------------------------------------------------------------- FUND PERFORMANCE - -------------------------------------------------------------------------------- FOR THE FISCAL YEAR FROM OCTOBER 1, 2001 THROUGH SEPTEMBER 30, 2002
- ---------------------------------------------------------------------------------------------------------------------- IMPACT TOTAL RETURN PORTFOLIO - TOTAL RETURN AS OF 9/30/02 - ---------------------------------------------------------------------------------------------------------------------- Total Return -------------------------------------------------------------- Category 1 Year 3 Year Since Inception - ---------------------------------------------------------------------------------------------------------------------- IMPACT Total Return - Class R * -14.41% 6.67% 1.89% -------------------------------------------------------------- IMPACT Total Return - Class A ** -18.83% N/A 4.98% -------------------------------------------------------------- Impact Total Return - Class F *** -13.92% N/A 7.58% -------------------------------------------------------------- IMPACT Total Return - Institutional Class **** N/A N/A -28.60% - ---------------------------------------------------------------------------------------------------------------------- Russell 1000 Value Index * -16.95% -5.93% 1.93% - ---------------------------------------------------------------------------------------------------------------------- S&P 500 Index * -20.47% -11.33% -0.38% - ----------------------------------------------------------------------------------------------------------------------
The table above provides the average annual total return for the fiscal year of the Fund, a three year return where applicable, and since inception in relation to the S&P 500 Index, and the Russell 1000 Value Index. * Inception - July 1, 1997 ** Inception - February 3, 2000 (Net of Load Fees) *** Inception - October 5, 1999 **** Inception - December 6, 2001 Past performance does not predict future results. Investment return and principal value will fluctuate so that an investor's shares may be worth more or less than the original cost. All returns assume reinvestment of dividends. - -------------------------------------------------------------------------------- 7 IMPACT MANAGEMENT INVESTMENT TRUST - ---------------------------------- IMPACT TOTAL RETURN PORTFOLIO - ----------------------------- FINANCIAL HIGHLIGHTS CLASS R (FORMERLY RETAIL CLASS)
FOR THE YEAR ENDED SEPTEMBER 30, ---------------------------------------------------------------------------------- 2002 2001 2000 1999 1998 ---------------------------------------------------------------------------------- PER SHARE DATA(ALPHA): Investment income $ 0.15 $ 0.21 $ 0.24 $ 0.26 $ 0.29 Expenses 0.27 0.29 0.23 0.22 0.21 ------------ ------------ ------------ ------------ ------------ Net investment income (loss) (0.12) (0.08) 0.01 0.04 0.08 Distribution from net investment income -- (0.02) -- (0.08) (0.01) Net realized and unrealized gain (loss) on investments (0.80) 0.99 2.55 0.86 (1.66) Distribution from realized gain (loss) on investments (2.17) (0.82) (0.48) (0.69) ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net asset value (3.09) 0.07 2.08 0.13 -- NET ASSET VALUE, BEGINNING 10.61 10.54 8.46 8.33 (1.59) ------------ ------------ ------------ ------------ ------------ 9.92 NET ASSET VALUE, ENDING $ 7.52 $ 10.61 $ 10.54 $ 8.46 $ 8.33 ============ ============ ============ ============ ============ SELECTED FINANCIAL STATISTICS AND RATIOS: Total return (14.41)% 8.24% 31.42% 11.50% (15.93)% Ratio of expenses to average net assets 2.60% 2.60% 2.60% 2.60% 2.60%# Ratio of net investment income to average net assets (1.13)% (0.68)% 0.10% 0.42%# 0.88%# Portfolio turnover rate 117.58% 162.78% 206.32% 254.79% 221.45% Average commission rate paid .0017 .0016 .0023 .0612 .1296 Net assets, end of period $ 979 707 $ 1 551 950 $ 1 969 144 $ 6 270 819 $ 3 925 928 Shares of beneficial interest outstanding, end of period 130 354 146 248 186 760 741 369 471 512 Number of member accounts, end of period 86 79 81 156 136
- -------------------- (alpha) Selected data for a share of beneficial interest outstanding through each period. # Excludes administrative fee and account closing fee charged directly to shareholder accounts (See Note 3 to financial statements). The accompanying notes are an integral part of these statements. 8 IMPACT MANAGEMENT INVESTMENT TRUST - ---------------------------------- IMPACT TOTAL RETURN PORTFOLIO - ----------------------------- FINANCIAL HIGHLIGHTS CLASS F (FORMERLY WHOLESALE CLASS)
October 5, 1999(theta) For the Year Ended September 30, to September --------------------------------------------------- 2002 2001 30, 2000 --------------------------------------------------- PER SHARE DATA(ALPHA): Investment income $ 0.17 $ 0.27 $ 0.40 Expenses 0.22 0.25 0.18 ------------ ------------ ------------ Net investment income (loss) (0.05) 0.02 0.22 Distribution from net investment income (0.02) (0.18) -- Net realized and unrealized gain (loss) on investments (1.19) 1.01 2.50 Distribution from realized gain (loss) on investments (1.37) (0.30) -- ------------ ------------ ------------ Net increase (decrease) in net asset value (2.63) 0.55 2.72 NET ASSET VALUE, BEGINNING 11.72 11.17 8.45 ------------ ------------ ------------ NET ASSET VALUE, ENDING $ 9.09 $ 11.72 $ 11.17 ============ ============ ============ SELECTED FINANCIAL STATISTICS AND RATIOS: Total return (13.92)% 9.20% 32.19%(mu) Ratio of expenses to average net assets 1.85% 1.85% 1.85%(mu),# Ratio of net investment income to average net assets (0.39)% 0.20% 2.36%(mu),# Portfolio turnover rate 117.58% 162.78% 202.02% Average commission rate paid .0017 .0016 .0023 Net assets, end of period $ 1 927 052 $ 2 084 822 $ 1 441 027 Shares of beneficial interest outstanding, end of period 211 959 177 856 129 052 Number of member accounts, end of period 113 92 75
- -------------------- (theta) Class F (formerly Wholesale class) began trading October 5, 1999 at $8.45 per share. (alpha) Selected data for a share of beneficial interest outstanding throughout each period. (mu) Based on operations for the period shown and, accordingly, not representative of a full year. # Excludes administrative fee and account closing fee charged directly to shareholder accounts (See Note 3 to financial statements). The accompanying notes are an integral part of these statements. 9 IMPACT MANAGEMENT INVESTMENT TRUST - ---------------------------------- IMPACT TOTAL RETURN PORTFOLIO - ----------------------------- FINANCIAL HIGHLIGHTS CLASS A (FORMERLY TRADITIONAL CLASS)
February 3, 2000(theta) For the Year Ended September 30, to September --------------------------------------------------- 2002 2001 30, 2000 --------------------------------------------------- PER SHARE DATA(ALPHA): Investment income $ 0.24 $ 0.42 $ 1.55 Expenses 0.30 0.27 0.84 ------------ ------------ ------------ Net investment income (loss) (0.06) 0.15 0.71 Distribution from net investment income (0.02) (0.11) -- Net realized and unrealized gain (loss) on investments (1.78) 1.02 2.07 Distribution from realized gain (loss) on investments (0.21) (0.04) -- ------------ ------------ ------------ Net increase (decrease) in net asset value (2.07) 1.02 2.78 NET ASSET VALUE, BEGINNING 13.80 12.78 10.00 ------------ ------------ ------------ NET ASSET VALUE, ENDING $ 11.73 $ 13.80 $ 12.78 ============ ============ ============ SELECTED FINANCIAL STATISTICS AND RATIOS: Total return (18.83)% 2.89% 27.80%(mu) Ratio of expenses to average net assets 1.85% 1.85% 7.07%(mu),# Ratio of net investment income to average net assets (0.38)% 1.03% 6.08%(mu),# Portfolio turnover rate 117.58% 162.78% 93.35% Average commission rate paid .0017 .0016 .0023 Net assets, end of period $ 1 784 824 $ 696 545 $ 9 348 Shares of beneficial interest outstanding, end of period 152 109 50 481 782 Number of member accounts, end of period 210 70 4
- ------------------- (theta) Class A (formerly Traditional class) began trading February 3, 2000 at $10.00 per share. (alpha) Selected data for a share of beneficial interest outstanding throughout each period. (mu) Based on operations for the period shown and, accordingly, not representative of a full year. # Excludes administrative fee and account closing fee charged directly to shareholder accounts (See Note 3 to financial statements). The accompanying notes are an integral part of these statements. 10 IMPACT MANAGEMENT INVESTMENT TRUST - ---------------------------------- IMPACT TOTAL RETURN PORTFOLIO - ----------------------------- FINANCIAL HIGHLIGHTS INSTITUTIONAL CLASS December 6, 2001(theta) to September 30, 2002 ------------------- PER SHARE DATA(ALPHA): Investment income $ 0.15 Expenses 0.16 ------------ Net investment income (loss) (0.01) Distribution from net investment income -- Net realized and unrealized gain (loss) on investments (2.85) Distribution from realized gain (loss) on investments -- ------------ Net increase (decrease) in net asset value (2.86) NET ASSET VALUE, BEGINNING 10.00 ------------ NET ASSET VALUE, ENDING $ 7.14 ============ SELECTED FINANCIAL STATISTICS AND RATIOS: Total return (28.60)%(mu) Ratio of expenses to average net assets 1.60%(mu) Ratio of net investment income to average net assets (0.07)%(mu) Portfolio turnover rate 117.58% Average commission rate paid .0363 Net assets, end of period $ 178 609 Shares of beneficial interest outstanding, end of period 25 000 Number of member accounts, end of period 1 - ------------------- (theta) Institutional class began trading December 6, 2001 at $10.00 per share. (alpha) Selected data for a share of beneficial interest outstanding throughout each period. (mu) Based on operations for the period shown and, accordingly, not representative of a full year. The accompanying notes are an integral part of these statements. 11 IMPACT MANAGEMENT INVESTMENT TRUST - ---------------------------------- IMPACT TOTAL RETURN PORTFOLIO - ----------------------------- STATEMENT OF ASSETS AND LIABILITIES SEPTEMBER 30, 2002 ASSETS: Investments in securities, at market value (cost $6,167,848) $ 4 890 092 Interest and dividends receivable 17 319 Receivable for investments sold 41 744 ----------- TOTAL ASSETS 4 949 155 ----------- CONTINGENCIES (Note 5) LIABILITIES: Payable for investments purchased 70 463 Investment advisory fee payable 5 543 Distribution expenses payable 1 706 Administrative fee payable 1 252 ----------- TOTAL LIABILITIES 78 964 ----------- NET ASSETS $ 4 870 191 =========== NET ASSETS CONSIST OF: Accumulated net investment loss - net of distributions $ (38 801) Accumulated net realized loss (423 404) Net unrealized depreciation (1 277 756) Paid-in capital applicable to 519,422 no par value shares of beneficial interest outstanding; unlimited number of shares authorized 6 610 152 ----------- NET ASSETS $ 4 870 191 =========== NET ASSET SHARES VALUE NET ASSETS OUTSTANDING PER SHARE ----------------------------------------- Class R (formerly Retail Class) $ 979 707 130 354 $ 7.52 Class A (formerly Wholesale Class) 1 784 824 152 109 $ 11.73 Class F (formerly Traditional Class) 1 927 052 211 959 $ 9.09 Institutional Class 178 608 25 000 $ 7.14 ------------ ------------ $ 4 870 191 519 422 ============ ============ The accompanying notes are an integral part of these statements. 12 IMPACT MANAGEMENT INVESTMENT TRUST - ---------------------------------- IMPACT TOTAL RETURN PORTFOLIO - ----------------------------- SCHEDULE OF INVESTMENTS IN SECURITIES SEPTEMBER 30, 2002 SHARES VALUE ------------ ------------ COMMON STOCK - 93.9% CONSUMER PRODUCTS - 9.2% Archer-Daniels-Midland Co. 9 468 $ 118 445 Tate & Lyle PLC 13 100 304 896 TRANSPORTATION - 5.1% CSX Corporation 6 300 166 194 Swift Transportation Co.* 4 400 68 640 COMPUTERS AND TECHNOLOGY - 11.4% Advanced Micro Devices, Inc.* 6 800 36 312 Agilent Technologies, Inc.* 6 800 88 808 Arrow Electronics, Inc. 3 400 42 942 Micron Technology, Inc.* 9 600 118 752 Sanmina-SCI Corporation 27 400 75 898 Symbol Technologies, Inc. 3 100 23 777 Teradyne, Inc.* 14 300 137 280 UTILITIES - 2.8% El Paso Corporation 3 300 27 291 P G & E Corporation* 8 900 100 214 CAPITAL GOODS - 3.6% Clayton Homes, Inc. 10 800 118 584 York International Corp. 1 700 47 940 BASIC MATERIALS - 8.4% Alcan Aluminum LTD 4 700 115 996 Bowater Incorporated 600 21 180 Freeport McMoRan Copper & Gold, Inc.* 3 900 52 494 IMC Global Inc. 13 300 160 265 NuCor Corp. 1 000 37 900 COMMUNICATIONS - 0.8% Nextel Communications, Inc. 4 900 36 995 SERVICES - 15.0% Liberty Media Corp. - A* 3 100 22 258 Nabors Industries* 6 400 209 600 J.C. Penney Co., Inc. 14 700 234 024 The St. Joe Company* 2 100 57 960 Starwood Hotel & Resorts Worldwide 5 000 111 500 Toys R Us, Inc. 5 400 54 972 The accompanying notes are an integral part of these statements. 13 IMPACT MANAGEMENT INVESTMENT TRUST - ---------------------------------- IMPACT TOTAL RETURN PORTFOLIO - ----------------------------- SCHEDULE OF INVESTMENTS IN SECURITIES SEPTEMBER 30, 2002 (Continued) SHARES VALUE ------------ ------------ ENERGY - 9.5% Burlington Resources 5 500 $ 210 980 Consol Energy Corp. 3 000 37 980 Duke Energy Corp. 1 100 21 505 Patterson Energy Inc.* 3 100 79 081 Valero Energy Corp. 3 300 87 351 FINANCIAL: CONSUMER FINANCING - 2.4% Americredit Corp.* 13 600 109 752 FINANCIAL: INSURANCE - 17.3% Aetna, Inc. 8 300 297 223 Allstate Corp. 6 300 223 965 American Financial Group 2 300 52 946 Aon Corp. 3 300 67 617 Loews Corporation 1 200 51 468 Travelers Property & Casualty 1 000 13 200 Ace Limited 2 900 85 869 FINANCIAL: BANKING - 3.0% Fleet Boston Financial 4 900 99 617 J P Morgan Chase & Company 1 900 36 081 CONSUMER: CYCLICAL - 7.5% Brunswick Corp. 2 100 44 184 Goodyear Tire & Rubber Co. 1 700 15 113 Paccar, Inc. 4 850 163 882 Visteon Corp. 12 900 122 163 HEALTHCARE - 0.6% Andrx Group* 1 300 28 795 MUTUAL FUND - 3.3% Russell 1000 Value 3 600 152 352 ------------ TOTAL COMMON STOCKS (cost $5,703,402) 4 592 241 ------------ CONVERTIBLE BONDS - 4.7% Amkor Tech Inc. Cnv Bond 5.75%, Due 6/1/06 234 79 395 Corning Inc. Cnv Bond 3.5%, Due 11/1/08 141 74 906 Freeport McMoRan Copper & Gold, Inc. Cnv Bond 8.25%, Due 1/31/06 65 77 838 ------------ TOTAL CONVERTIBLE BONDS (cost $398,734) 232 139 ------------ The accompanying notes are an integral part of these statements. 14 IMPACT MANAGEMENT INVESTMENT TRUST - ---------------------------------- IMPACT TOTAL RETURN PORTFOLIO - ----------------------------- SCHEDULE OF INVESTMENTS IN SECURITIES SEPTEMBER 30, 2002 (Continued) SHARES VALUE ------------ ------------ SHORT-TERM INVESTMENTS - 1.4% Rydex Series Trust - U.S. Government Money Market Fund (0.84% seven day yield) $ 29 545 Fifth Third Bank Repurchase Agreement - 1.45%, Due 10/1/02 36 167 ------------ TOTAL SHORT-TERM INVESTMENTS (cost $65,712) 65 712 ------------ TOTAL INVESTMENT IN SECURITIES - 90.5% OF NET ASSETS (cost $6,167,848) $ 4 890 092 ============ * non-income producing security The accompanying notes are an integral part of these statements. 15 IMPACT MANAGEMENT INVESTMENT TRUST - ---------------------------------- IMPACT TOTAL RETURN PORTFOLIO - ----------------------------- STATEMENT OF OPERATIONS FOR THE YEAR ENDED SEPTEMBER 30, 2002 INVESTMENT INCOME: Interest income $ 14 610 Dividend income 91 184 ------------ TOTAL INVESTMENT INCOME 105 794 ------------ EXPENSES: (Note 3) Investment advisory fee 89 847 Distribution expenses 29 680 Administrative fee 25 068 ------------ TOTAL EXPENSES 144 595 ------------ NET INVESTMENT LOSS (38 801) ------------ NET REALIZED LOSSES AND CHANGE IN UNREALIZED DEPRECIATION Net realized losses (423 404) Change in unrealized depreciation (981 081) ------------ NET REALIZED AND UNREALIZED LOSSES (1 404 485) ------------ NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (1 443 286) ============ NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS BY CLASS: Class R (formerly Retail Class) $ (421 326) Class A (formerly Traditional Class) (322 260) Class F (formerly Wholesale Class) (542 799) Institutional Class (156 901) ------------ $ (1 443 286) ============ The accompanying notes are an integral part of these statements. 16 IMPACT MANAGEMENT INVESTMENT TRUST - ---------------------------------- IMPACT TOTAL RETURN PORTFOLIO - ----------------------------- STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEARS ENDED SEPTEMBER 30, 2002 AND 2001
YEAR ENDED SEPTEMBER 30, --------------------------- 2002 2001 --------------------------- INCREASE (DECREASE) IN NET ASSETS: Operations: Net investment loss $ (38 801) $ (7 966) Net realized gain (loss) on securities (423 404) 605 429 Change in net unrealized depreciation on securities (981 081) (375 234) ----------- ----------- INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (1 443 286) 222 229 ----------- ----------- Distributions to shareholders: From net investment income -- (27 576) From net realized gain on securities (597 463) (198 792) ----------- ----------- TOTAL DISTRIBUTIONS TO SHAREHOLDERS (597 463) (226 368) ----------- ----------- Beneficial interest share transactions*: Shares sold 4 577 513 3 079 982 Shares redeemed (2 575 212) (2 387 415) Shares issued for reinvestment of distributions 575 322 225 370 ----------- ----------- INCREASE IN NET ASSETS FROM SHARE TRANSACTIONS 2 577 623 917 937 ----------- ----------- TOTAL INCREASE IN NET ASSETS 536 874 913 798 NET ASSETS, BEGINNING OF PERIOD 4 333 317 3 419 519 ----------- ----------- NET ASSETS, END OF PERIOD (including undistributed net investment loss of $(38,801) and $(7,966), respectively) $ 4 870 191 $ 4 333 317 =========== =========== *SHARE INFORMATION: Shares sold 345 332 238 631 Shares redeemed (250 741) (199 154) Change in shares resulting from transfers between classes (68) (1 341) Shares issued for reinvestment of distributions 50 313 19 905 ----------- ----------- INCREASE IN SHARES OUTSTANDING 144 836 58 041 =========== ===========
The accompanying notes are an integral part of these statements. 17 IMPACT MANAGEMENT INVESTMENT TRUST IMPACT 25 FUND - -------------------------------------------------------------------------------- FUND PERFORMANCE - -------------------------------------------------------------------------------- FOR THE FISCAL YEAR FROM OCTOBER 1, 2001 THROUGH SEPTEMBER 30, 2002 - -------------------------------------------------------------------------------- GROWTH OF A $10,000 INVESTMENT IMPACT 25 FUND CLASS A SHARES [GRAPHIC OMITTED] 4/12/2002 9/30/2002 --------- --------- IMPACT 25 Fund - Class A $10,000 $9,133 Russell 1000 Growth Index $10,000 $8,703 S&P 500 Index $10,000 $8,781 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- GROWTH OF A $10,000 INVESTMENT IMPACT 25 FUND CLASS F SHARES [GRAPHIC OMITTED] 5/6/2002 9/30/2002 -------- --------- IMPACT 25 Fund Class F $10,000 $9,243 Russell 1000 Growth Index $10,000 $9,128 S&P 500 Index $10,000 $9,114 - -------------------------------------------------------------------------------- The accompanying notes are an integral part of these statements. 18 IMPACT MANAGEMENT INVESTMENT TRUST IMPACT 25 FUND - -------------------------------------------------------------------------------- FUND PERFORMANCE - -------------------------------------------------------------------------------- FOR THE FISCAL YEAR FROM OCTOBER 1, 2001 THROUGH SEPTEMBER 30, 2002 - -------------------------------------------------------------------------------- IMPACT 25 FUND - TOTAL RETURN AS OF 9/30/02 - -------------------------------------------------------------------------------- Category Since Inception - -------------------------------------------------------------------------------- IMPACT 25 - Class A * -18.50% - -------------------------------------------------------------------------------- IMPACT 25 - Class F ** -18.80% - -------------------------------------------------------------------------------- Russell 1000 Growth Index * -27.65% - -------------------------------------------------------------------------------- S&P 500 Index * -26.03% - -------------------------------------------------------------------------------- The table above provides the total return for the period the Fund was in operation in relation to The Russell 1000 Growth Index and the S&P 500 Index, * Inception April 12, 2002 ** Inception May 6, 2002 Past performance does not predict future results. Investment return and principal value will fluctuate so that an investor's shares may be worth less than the original cost. All returns assume reinvestment of dividends. The accompanying notes are an integral part of these statements. 19 IMPACT MANAGEMENT INVESTMENT TRUST - ---------------------------------- IMPACT 25 FUND (FORMERLY JORDAN 25 FUND) - ---------------------------------------- FINANCIAL HIGHLIGHTS
CLASS R CLASS A CLASS F (FORMERLY RETAIL CLASS) (FORMERLY TRADITIONAL CLASS) (FORMERLY WHOLESALE CLASS) ---------------------------------------------------------------------------------------------- JANUARY 24, JANUARY 24, JANUARY 24, YEAR ENDED 2001(THETA) TO YEAR ENDED 2001(THETA) TO YEAR ENDED 2001(THETA) TO SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, EPTEMBER 30, SEPTEMBER 30, 2002 2001 2002 2001 2002 2001 --------------------------------------------------------------------------------------------- PER SHARE DATA(ALPHA): Investment income $ -- $ 0.24 $ 0.10 $ 0.24 $ 0.08 $ 0.24 Expenses -- 0.16 0.08 0.12 0.07 0.11 ------------ ------------ ------------ ------------ ------------ ------------ Net investment income (loss) -- 0.08 0.02 0.12 0.01 0.13 Distribution from net investment income (0.08) -- (0.12) -- (0.13) -- Net realized and unrealized gain (loss) on investments -- -- (1.87) -- (1.89) -- Distribution from realized gain (loss) on investments -- -- -- -- -- -- Liquidation of class (10.00) -- -- -- -- -- ------------ ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net asset value (10.08) 0.08 (1.97) 0.12 (2.01) 0.13 NET ASSET VALUE, BEGINNING 10.08 10.00 10.12 10.00 10.13 10.00 NET ASSET VALUE, ENDING ------------ ------------ ------------ ------------ ------------ ------------ $ -- $ 10.08 $ 8.15 $ 10.12 $ 8.12 $ 10.13 ============ ============ ============ ============ ============ ============ SELECTED FINANCIAL STATISTICS AND RATIOS: Total return -% 0.80%(mu) (18.50)% 1.20%(mu) (18.80)% 1.30%(mu) Ratio of expenses to average net assets -% 1.76%(mu) 1.85% 1.27%(mu) 1.85% 1.80%(mu) Ratio of net investment income to average net assets -% 0.75%(mu) 0.20% 1.23%(mu) 0.20% 3.03%(mu) Portfolio turnover rate -% 0.00% 27.94% 0.00% 27.94% 0.00% Average commission rate paid -- -- .0316 -- .0316 -- Net assets, end of period $ -- $ 1 008 $ 357 166 $ 954 $ 16 237 $ 10 135 Shares of beneficial interest outstanding, end of period -- 100 43 849 94 2 000 1 000 Number of member accounts, end of period -- 1 31 1 1 1
- ------------------- (theta) Impact 25 Fund began trading January 24, 2001 at $10.00 per share. (alpha) Selected data for a share of beneficial interest outstanding through each period. (mu) Based on operations for the period shown and, accordingly, not representative of a full year. The accompanying notes are an integral part of these statements. 20 IMPACT MANAGEMENT INVESTMENT TRUST - ---------------------------------- IMPACT 25 FUND (FORMERLY JORDAN 25 FUND) - ---------------------------------------- STATEMENT OF ASSETS AND LIABILITIES SEPTEMBER 30, 2002 ASSETS: Investments in securities, at value (cost $443,878) $ 373 448 Interest and dividends receivable 540 ------------ TOTAL ASSETS 373 988 CONTINGENCIES (Note 5) LIABILITIES - Accrued operating expenses 585 ------------ NET ASSETS $ 373 403 ============ NET ASSETS CONSIST OF: Accumulated net investment income - net of distributions $ 754 Accumulated net realized loss (18 333) Net unrealized depreciation (70 430) Paid-in capital applicable to 45,849 no par value shares of beneficial interest outstanding; unlimited number of shares authorized 461 412 ------------ NET ASSETS $ 373 403 ============ NET ASSET SHARES VALUE NET ASSETS OUTSTANDING PER SHARE ----------------------------------------- Class A (formerly Traditional Class) $ 357 166 43 849 $ 8.15 Class F (formerly Wholesale Class) 16 237 2 000 $ 8.12 ----------- ------------ $ 373 403 45 849 The accompanying notes are an integral part of these statements. 21 IMPACT MANAGEMENT INVESTMENT TRUST IMPACT 25 FUND (FORMERLY JORDAN 25 FUND) SCHEDULE OF INVESTMENTS IN SECURITIES SEPTEMBER 30, 2002 SHARES VALUE ------------ ------------ COMMON STOCK - 97.2% HEALTHCARE - 14.5% Abbot Laboratories 411 $ 16 604 Eli Lilly & Co. 61 3 376 Merck & Co., Inc. 208 9 508 Patterson Dental Company 480 24 567 SERVICES: REAL ESTATE - 14.4% AMB Properties Corporation 438 12 658 Novastar Financial, Inc. 497 13 469 Vorando Realty Trust 698 27 536 SERVICES: RETAIL - 20.3% AutoNation, Inc.* 1 708 19 676 Dillards, Inc. 374 7 547 The Kroger Company 1 369 19 303 Supervalu, Inc. 353 5 701 WalMart Stores, Inc. 587 28 904 ENERGY - 11.8% Chevron Texaco Corporation 370 25 623 Exxon Mobil Corporation 540 17 226 TECHNOLOGY - 2.6% Pitney Bowes, Inc. 320 9 757 CONSUMER: NONCYCLICAL - 10.1% General Mills, Inc. 269 11 949 H J Heinz Company 467 15 584 Hormel Foods Corporation 409 8 948 William Wrigley Jr. Co. 310 15 342 CONSUMER: CYCLICAL - 4.7% Genuine Parts Company 570 17 465 TRANSPORTATION - 2.1% United Parcel Services 125 7 816 FINANCIAL: INSURANCE 11.2% Federal National Mortgage Association 358 21 315 Nationwide Financial Services 261 6 969 Worthington Industries 722 13 501 The accompanying notes are an integral part of these statements. 22 IMPACT MANAGEMENT INVESTMENT TRUST IMPACT 25 FUND (FORMERLY JORDAN 25 FUND) SCHEDULE OF INVESTMENTS IN SECURITIES SEPTEMBER 30, 2002 (Continued) SHARES VALUE ------------ ------------ FINANCIAL: MISCELLANEOUS SERVICES - 0.8% Charter Municipal Mortgage Acceptance Company 160 $ 2 819 ------------ TOTAL COMMON STOCKS (cost $433,593) 363 163 SHORT-TERM INVESTMENTS - 2.8% Fifth Third Bank Repurchase Agreement - 1.45%, Due 10/1/02 (cost $10,285) 10 285 ------------ TOTAL INVESTMENT IN SECURITIES - 100% OF NET ASSETS (cost $443,878) $ 373 448 ============ * non-income producing security The accompanying notes are an integral part of these statements. 23 IMPACT MANAGEMENT INVESTMENT TRUST - ---------------------------------- IMPACT 25 FUND (FORMERLY JORDAN 25 FUND) - ---------------------------------------- STATEMENT OF OPERATIONS FOR THE YEAR ENDED SEPTEMBER 30, 2002 INVESTMENT INCOME - Interest and dividend income $ 4 041 ------------ EXPENSES: (Note 3) Investment advisory fee 2 179 Distribution expenses 473 Administrative fee 635 ------------ TOTAL EXPENSES 3 287 ------------ NET INVESTMENT INCOME 754 ------------ NET REALIZED LOSSES AND CHANGE IN UNREALIZED DEPRECIATION Net realized losses (18 333) Change in unrealized depreciation (70 430) ------------ NET REALIZED AND UNREALIZED LOSSES (88 763) ------------ NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (88 009) ============ NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS BY CLASS: Class A (formerly Traditional Class) $ (84 225) Class F (formerly Wholesale Class) (3 784) ------------ $ (88 009) ============ The accompanying notes are an integral part of these statements. 24 IMPACT MANAGEMENT INVESTMENT TRUST - ---------------------------------- IMPACT 25 FUND (FORMERLY JORDAN 25 FUND) - ---------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS FOR THE PERIODS ENDED SEPTEMBER 30, 2002 AND 2001
YEAR ENDED SEPTEMBER 30, ----------------------------- 2002 2001 ----------------------------- INCREASE (DECREASE) IN NET ASSETS: Operations: Net investment income $ 754 $ 227 Net realized loss on securities (18 333) -- Change in net unrealized depreciation on securities (70 430) -- ------------ ------------ INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (88 009) 227 ------------ ------------ Beneficial interest share transactions*: Shares sold 557 095 40 525 Shares redeemed (107 780) (28 655) ------------ ------------ INCREASE IN NET ASSETS FROM SHARE TRANSACTIONS 449 315 11 870 ------------ ------------ TOTAL INCREASE IN NET ASSETS 361 306 12 097 NET ASSETS, BEGINNING OF PERIOD 12 097 -- ------------ ------------ NET ASSETS, END OF PERIOD (including undistributed net Investment income of $754 and $227, respectively) $ 373 403 $ 12 097 ============ ============ *SHARE INFORMATION: Shares sold 55 542 4 023 Shares redeemed (10 887) (2 829) ------------ ------------ INCREASE IN SHARES OUTSTANDING 44 655 1 194 ============ ============
The accompanying notes are an integral part of these statements. 25 IMPACT MANAGEMENT INVESTMENT TRUST - ---------------------------------- IMPACT TOTAL RETURN PORTFOLIO & IMPACT 25 FUND - ---------------------------------------------- (FORMERLY JORDAN 25 FUND) - ------------------------- NOTES TO FINANCIAL STATEMENTS NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ORGANIZATION - ------------ IMPACT Management Investment Trust (the "Trust") was organized as a Massachusetts business trust on December 18, 1996. The Trust is registered under the Investment Company Act of 1940 (the "1940 Act") as a diversified, open-ended management investment company. IMPACT Total Return Portfolio ("IMPACT") was the initial series of the Trust. IMPACT commenced operations on June 17, 1997, with the sale of 10,000 shares of beneficial interest to Jordan American Holdings, Inc., d/b/a Equity Assets Management ("EAM") (the "Investment Advisor"), for cash in the amount of $100,000. Effective January 1, 2001, EAM is the advisor of the Trust as a wholly owned subsidiary of Jordan American Holdings, Inc. On January 16, 2001, the second series of the Trust, the Jordan 25 Fund ("Jordan 25") was formed and subsequently changed its name to the IMPACT 25 Fund. On January 24 and 25, the Trust sold 1,194 shares of beneficial interest to EAM for cash in the amount of $12,000. IMPACT offers four classes of shares and the IMPACT 25 Fund ("25 Fund") offers three classes of shares. These are the only two active series (collectively "Funds") of the Trust. (See Note 3). SECURITY VALUATION - ------------------ Investments in securities listed or traded on a securities exchange are valued at the last quoted sales price on the security's principal exchange on that day. Listed securities not traded on an exchange that day, and other securities, which are traded in the over-the-counter market, are valued at the mean between the last closing bid and ask prices in the market on that day. METHOD OF REPORTING - ------------------- The financial statements are presented in accordance with accounting principles generally accepted in the United States of America, which require the use of certain estimates made by the Funds' management. The Funds follow industry practice and record security transactions on the trade date. Realized gains and losses are reported on the identified cost basis. Dividend income is recognized on the ex-dividend date, and interest income is recorded on the accrual basis. FEDERAL INCOME TAXES - -------------------- No provision for federal income taxes is required since the Funds intend to continue to qualify as regulated investment companies and distribute all their taxable income to their shareholders. 26 IMPACT MANAGEMENT INVESTMENT TRUST - ---------------------------------- IMPACT TOTAL RETURN PORTFOLIO & IMPACT 25 FUND - ---------------------------------------------- (FORMERLY JORDAN 25 FUND) - ------------------------- NOTES TO FINANCIAL STATEMENTS NOTE 2. INVESTMENT TRANSACTIONS Purchases and sales of investment securities of IMPACT, other than short-term investments, during the year ended September 30, 2002 were $10,264,127 and $7,914,572, respectively. At September 30, 2002, the aggregate cost of investments for federal income tax and financial reporting purposes was $6,167,848 and net unrealized depreciation aggregated $1,277,755, of which $214,055 related to appreciated investments and $1,491,810 to depreciated investments. Purchases and sales of investment securities of 25 Fund, other than short-term investments, during the year ended September 30, 2002 were $560,617 and $108,691, respectively. At September 30, 2002, the aggregate cost of investments for federal income tax and financial reporting purposes was $443,878 and net unrealized depreciation aggregated $70,430, of which $2,747 related to appreciated investments and $73,177 to depreciated investments. NOTE 3. INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES The Trust has entered into an investment advisory agreement with the Investment Advisor. The Investment Advisor reviews, supervises and administers the investment program of the Funds. As compensation for services rendered, the Investment Advisor receives an annual investment advisory fee based on the Funds' average daily assets. The investment advisory fee is calculated daily and paid monthly. The Trust entered into a sub-advisory agreement with Schneider Capital Management, Inc. ("Schneider") regarding IMPACT. Pursuant to the sub-advisory agreement, the Investment Advisor pays Schneider monthly at the rate of 60 basis points annually, out of its advisory fee. The Trust also entered into a sub-advisory agreement with Danali Advisors LLC ("Danali") regarding the 25 Fund. Pursuant to the sub-advisory agreement, the Investment Advisor pays Danali monthly at the rate of 60 basis points annually, out of its advisory fee. The Trust has a Distribution Plan pursuant to Rule 12b-1 of the 1940 Act. Under the provisions of the Distribution Plan, the Funds pay or reimburse the Investment Advisor, affiliates or other third parties for expenses incurred in connection with the promotion and distribution of the Funds' shares based on the average daily net assets of the Funds. The Trust has an administrative service agreement with Impact Administrative Services, Inc. ("IASI"), an affiliate of the Investment Advisor. Under the agreement, IASI provides administrative personnel and services necessary to operate the Fund including transfer agent and dividend disbursing agent services. IASI waived its entire fee under its agreement through the period ended September 30, 2002 and, through funding provided by its affiliate EAM, bears substantially all "other" expenses of the Funds, excluding brokerage fees, interest charges and taxes. Prior to the current agreement, IASI was 27 IMPACT MANAGEMENT INVESTMENT TRUST - ---------------------------------- IMPACT TOTAL RETURN PORTFOLIO & IMPACT 25 FUND - ---------------------------------------------- (FORMERLY JORDAN 25 FUND) - ------------------------- NOTES TO FINANCIAL STATEMENTS paid a fee of $165.00 per account through April 30, 1999. The annual fee paid to IASI was charged directly to shareholder accounts at each month end as redemption of shares of beneficial interest. Subsequent to April 30, 1999, the Trust began accruing an administrative service fee of 35 basis points based on daily net assets of the Funds to pay for the other expenses. The administrative service fee is calculated daily and paid monthly to IASI. In addition, prior to January 1, 2001, when a shareholder closed an account, IASI was paid a fee of $2.00, which was charged to the shareholder as redemption of shares of beneficial interest. NOTE 3. INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES (Continued) The following table describes the fees and expenses applicable to each class of shares. Class Class Class Institutional R A F Class ------------------------------------------------ Sales Charge (1) - 5.75% - - Investment Advisory Fee: IMPACT 1.25% 1.25% 1.25% 1.25% 25 Fund 1.20% 1.20% 1.20% 1.20% Distribution (12b-1) Fees 1.00% 0.25% 0.25% None Administrative Expenses 0.35% 0.35% 0.35% 0.35% (1)Reduced for purchases of $50,000 or more, decreasing to zero for purchases over $1 million. A wholly-owned subsidiary of the Investment Advisor, IMPACT Financial Network, Inc. ("IFNI"), a broker and dealer in securities registered with the Securities and Exchange Commission and a member of the National Association of Securities Dealers, Inc., was reimbursed 12b-1 fees and sales charges from both series of the Trust for a total of $91,831 and $61,824 pursuant to the provisions of the Distribution Plan for the years ended September 30, 2002 and 2001. IFNI pays out a portion of these fees to additional selling agents. Certain officers of the Trust and members of the Board of Trustees during the year were also officers and directors of the Investment Advisor. 28 IMPACT MANAGEMENT INVESTMENT TRUST - ---------------------------------- IMPACT TOTAL RETURN PORTFOLIO & IMPACT 25 FUND - ---------------------------------------------- (FORMERLY JORDAN 25 FUND) NOTES TO FINANCIAL STATEMENTS NOTE 4. CAPITAL SHARE TRANSACTIONS IMPACT TOTAL RETURN PORTFOLIO: - ------------------------------
YEAR ENDED YEAR ENDED SEPTEMBER 30, 2002 SEPTEMBER 30, 2001 SHARES AMOUNT SHARES AMOUNT ----------- ----------- ----------- ----------- CLASS R (FORMERLY RETAIL CLASS): - -------------------------------- Sold 19 740 $ 222 396 35 517 $ 402 322 Reinvested 29 975 313 843 14 307 159 237 Repurchased (65 421) (596 077) (75 407) (853 472) Transfer between classes (189) (1 760) (14 929) (167 883) ----------- ----------- ----------- ----------- NET DECREASE IN CLASS R (15 895) (61 598) (40 512) (459 796) ----------- ----------- ----------- ----------- CLASS A (FORMERLY TRADITIONAL CLASS): - ------------------------------------- Sold 124 594 1 988 908 49 780 749 969 Reinvested 1 314 21 400 15 201 Repurchased (24 401) (355 761) (46) (677) Transfer between classes 121 1 760 -- -- ----------- ----------- ----------- ----------- NET INCREASE IN CLASS A 101 628 1 656 307 49 749 749 493 ----------- ----------- ----------- ----------- CLASS F (FORMERLY WHOLESALE CLASS): - ----------------------------------- Sold 106 265 1 411 209 153 334 1 927 691 Reinvested 19 024 240 080 5 583 65 932 Repurchased (91 186) (1 054 353) (123 701) (1 533 266) Transfer between classes -- -- 13 588 167 883 ----------- ----------- ----------- ----------- NET INCREASE IN CLASS F 34 103 596 936 48 804 628 240 ----------- ----------- ----------- ----------- INSTITUTIONAL CLASS: - -------------------- Sold 94 733 955 000 -- -- Repurchased (69 733) (569 022) -- -- ----------- ----------- ----------- ----------- NET INCREASE IN INSTITUTIONAL CLASS 25 000 385 978 -- -- ----------- ----------- ----------- ----------- TOTAL NET INCREASE IN FUND 144 836 $ 2 577 623 58 041 $ 917 937 =========== =========== =========== ===========
29 IMPACT MANAGEMENT INVESTMENT TRUST - ---------------------------------- IMPACT TOTAL RETURN PORTFOLIO & IMPACT 25 FUND - ---------------------------------------------- (FORMERLY JORDAN 25 FUND) - ------------------------- NOTES TO FINANCIAL STATEMENTS NOTE 4. CAPITAL SHARE TRANSACTIONS (Continued) IMPACT 25 FUND (FORMERLY JORDAN 25 FUND):
YEAR ENDED YEAR ENDED SEPTEMBER 30, 2002 SEPTEMBER 30, 2001 SHARES AMOUNT SHARES AMOUNT ----------- ----------- ----------- ----------- CLASS R (FORMERLY RETAIL CLASS): - -------------------------------- Sold -- $ -- 100 $ 1 000 Reinvested -- -- -- -- Repurchased (100) (1 008) -- -- ----------- ----------- ----------- ----------- NET INCREASE (DECREASE) IN CLASS R (100) (1 008) 100 1 000 ----------- ----------- ----------- ----------- CLASS A (FORMERLY TRADITIONAL CLASS): - ------------------------------------- Sold 53 542 537 095 94 943 Reinvested -- -- -- -- Repurchased (9 787) (96 627) -- -- ----------- ----------- ----------- ----------- NET INCREASE IN CLASS A 43 755 440 468 94 943 ----------- ----------- ----------- ----------- CLASS F (FORMERLY WHOLESALE CLASS): - ----------------------------------- Sold 2 000 20 000 3 829 38 582 Reinvested -- -- -- -- Repurchased (1 000) (10 145) (2 829) (28 655) ----------- ----------- ----------- ----------- NET INCREASE IN CLASS F 1 000 9 855 1 000 9 927 ----------- ----------- ----------- ----------- TOTAL NET INCREASE IN FUND 44 655 $ 449 315 1 194 $ 11 870 =========== =========== =========== ===========
NOTE 5. PLAN OF LIQUIDATION In May 2002, EAM and Schneider entered into an agreement whereby EAM would sell Schneider its business relating to the management of the Portfolio's assets. EAM continues to be unable to achieve profitability in connection with its management of the Trust. The above stated agreement with Schneider was cancelled and EAM has been unable to sell the investment management business related to the Trust. The Trust's Board of Trustees has determined that the administration of the Trust is not presently economically viable and does not have prospects to become economically viable in the future. Accordingly, the Board has requested that EAM develop a plan for the orderly liquidation of the Trust. In addition, the Board has determined to cease offering shares of the Trust for sale. 30 INDEPENDENT AUDITORS' REPORT - ---------------------------- To the Shareholders and Board of Trustees IMPACT Management Investment Trust IMPACT Total Return Portfolio and IMPACT 25 Fund (formerly Jordan 25 Fund) We have audited the accompanying statements of assets and liabilities of IMPACT Total Return Portfolio ("IMPACT") and IMPACT 25 Fund (formerly Jordan 25 Fund) ("25 Fund") (collectively the "Funds"), two Series of IMPACT Management Investment Trust, including the schedules of investments in securities, as of September 30, 2002 and the related statements of operations for the year ended September 30, 2002 and changes in net assets for the periods ended September 30, 2002 and 2001 and financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits 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 and financial highlights. Our procedures included confirmation of securities owned as of September 30, 2002, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly in all material respects, the financial position of IMPACT Total Return Portfolio and IMPACT 25 Fund, two Series of IMPACT Management Investment Trust, as of September 30, 2002 and the results of its operations for the year ended September 30, 2002 and changes in net assets for the periods ended September 30, 2002 and 2001 and the financial highlights for each of the five years in the period then ended in conformity with accounting principles generally accepted in the United States of America. /s/ SPICER, JEFFRIES & CO. Denver, Colorado November 8, 2002 31 -----END PRIVACY-ENHANCED MESSAGE-----