-----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, FH61U1pGCeMm8cuJQX1mu6FSN+cmmzX6KZev/2MCiFQYZau0MAVFiYltesDDrxOP hTcn/fmr7Osd+qnT/222jw== 0001030805-97-000006.txt : 19971204 0001030805-97-000006.hdr.sgml : 19971204 ACCESSION NUMBER: 0001030805-97-000006 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971203 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: IMPACT MANAGEMENT INVESTMENT TRUST CENTRAL INDEX KEY: 0001030805 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 232873254 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-08065 FILM NUMBER: 97731813 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 SEMI ANNUAL REPORT TO SHAREHOLDERS IMPACT MANAGEMENT INVESTMENT TRUST IMPACT MANAGEMENT GROWTH PORTFOLIO ANNUAL REPORT TO SHAREHOLDERS September 30, 1997 TABLE OF CONTENTS
PAGES A Message From Your Chairman 1 A Letter From the Portfolio Manager 2 Financial Highlights 3 Statement of Assets and Liabilities 4 Schedule of Investments in Securities 5 Statement of Operations 6 Statement of Changes in Net Assets 7 Notes to Financial Statements 8 Independent Auditor's Report 10
01 A Message From Your Chairman Dear Shareholders, I am pleased to present the first Annual Report of IMPACT Management Investment Trust and the IMPACT Management Growth Portfolio. The investment objective of the Portfolio is to provide capital appreciation through investing primarily in equity securities of companies believed to have prospects for above-average growth in earnings. It is our intent to provide you, the investor, with money management services by a seasoned stock market professional. Our Investment Advisor's philosophy and experience regarding money management and stock market investing is unique. By attempting to allocate assets more fully to stocks during positive market trends and by reducing the investment in stocks during declining market periods, the Advisor strives to reduce market risk. The Senior Portfolio Manager of the Advisor, W. Neal Jordan, has been investing this way, professionally, for over thirty years. The U.S. stock market has been embraced by many unseasoned and amateur investors in recent years. This typically occurs near major points of change for the stock market. It is our Investment Advisor's opinion that, although experience has not necessarily been a prerequisite for investment success in recent years, experience may likely be the most valuable tool a money manager can have in the years ahead. I wish to thank you for becoming IMPACT Management Growth Portfolio's charter shareholders. We appreciate your confidence. Sincerely, Charles R. Clark Chairman IMPACT Management Investment Trust 1 02 A Letter From the Portfolio Manager Dear IMPACT Management Investment Trust Shareholders, When I entered the stock market business in February of 1966, I did so with a purpose. My objective was to learn whatever it was that successful investors had come to understand which allowed them to rise above their colleagues, and actually make stock market fortunes. It is one thing to "play the stock market," as a "sophisticated investor," while it is another to go into a competitive marketplace and actually multiply investment capital. In the world of Wall Street, everybody "talks a good game," but actual results may tell another story. My objective in managing the IMPACT Management Growth Portfolio is to try to achieve a very different result from what might come from traditional Wall Street brokerage firm relationships or from other mutual funds that may be consistently victimized by market declines. I'm perfectly willing to hold a temporary defensive cash investment position of up to 100% if our analysis indicates that an authentic bear market trend is beginning or is in existence at a time when cash deposits are coming into the portfolio. The purpose of a conservative approach in which large reserves are sometimes maintained is, paradoxically, to achieve maximum growth of the portfolio's assets. If the best opportunities for lower-risk commitments to the stock market come at the infrequent bear market bottoms, which have been approximately four years apart according to our analysis, or more frequently at bull market pullbacks/"corrections" followed by rapid reversals back to the upside, then we obviously want to be in a position to invest aggressively at those most opportune times. Many mutual funds may be somewhat at the mercy of their shareholders, as to their timing in being fully invested in the fund or making withdrawals. With a less than exemplary record of shareholder timing, these decisions often work to the fund managers' disadvantage as more capital is invested near market tops than near market bottoms. If our timing decisions can prove superior to those of others, and as the stock market with its fluctuations creates opportunities for profit, my expectation is that a consistently positive money flow into the Portfolio may result, which could favorably benefit the Funds' shareholders. I have as my long-term objective, a Warren Buffett kind of result. Sincerely, W. Neal Jordan Senior Portfolio Manager Jordan American Holdings, Inc. d/b/a Equity Assets Management 2 03 IMPACT MANAGEMENT INVESTMENT TRUST IMPACT MANAGEMENT GROWTH PORTFOLIO FINANCIAL HIGHLIGHTS For the Period June 17, 1997 (commencement of operations) to September 30, 1997 Per Share Data* Investment income $ .01 Expenses (.01) Net investment income (loss) .00 Distributions from net investment income .00 Net realized and unrealized (loss) on investments (.08) Distributions from realized gains on investments .00 Net decrease in net asset value (.08) Net asset value: Beginning of period 10.00 End of period $ 9.92 Ratios and Supplemental Data Total return (not annualized)# (0.80)% Ratio of expenses to average net assets+# 2.25% Ratio of net investment income to average net assets+# 0.00% Portfolio turnover rate 0.00% Average commission rate paid $ .1437 Net assets, end of period $501,758 Shares of beneficial interest outstanding, end of period 50,567 Number of shareholder accounts, end of period 17
_____________________ * Selected data for a share of beneficial interest outstanding throughout the period. + Annualized. # Excludes administrative fee charged directly to shareholder accounts (see Note 4 to financial statements). See accompanying notes to financial statements. 3 04 IMPACT MANAGEMENT INVESTMENT TRUST IMPACT MANAGEMENT GROWTH PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES September 30, 1997 ASSETS Investments in securities, at value - identified cost $165,424 $162,753 Cash 294,829 Receivable for shares of beneficial interest sold 44,793 Total assets 502,375 LIABILITIES Investment advisory fee payable 503 Administrative fee payable 114 Total liabilities 617 NET ASSETS $501,758 NET ASSETS CONSIST OF: Accumulated net investment income (loss) $ (17) Accumulated net realized gain (loss) 0 Unrealized depreciation of investments (2,671) Paid-in capital applicable to 50,567 no par value shares of beneficial interest outstanding; unlimited number of shares authorized 504,446 NET ASSETS $501,758 NET ASSET VALUE PER SHARE $ 9.92
See accompanying notes to financial statements. 4 05 IMPACT MANAGEMENT INVESTMENT TRUST IMPACT MANAGEMENT GROWTH PORTFOLIO SCHEDULE OF INVESTMENTS IN SECURITIES September 30, 1997
Shares Value Common Stocks - 32.4% Computers and Technology - 11.3% Compaq Computer Corp.* 90 $ 6,728 Dell Computer Corp.* 70 6,781 Intergraph Corp.* 2,000 21,750 Summit Technology Inc.* 2,000 14,750 Sun Microsystems Inc.* 140 6,554 Communications - 7.0% Associated Group Inc. - Class A* 180 12,690 Scientific Atlanta Inc. 1,000 22,625 Medical - 7.0% Interneuron Pharmaceuticals* 1,600 19,200 Vivus Inc.* 420 15,750 Restaurants - 4.8% Nathans Famous Inc.* 6,000 24,375 Other - 2.3% Harris & Harris Group Inc.* 3,300 11,550 Total investments in securities - 32.4% of net assets (cost $165,424) $162,753
_____________________ * Non-income producing security See accompanying notes to financial statements. 5 06 IMPACT MANAGEMENT INVESTMENT TRUST IMPACT MANAGEMENT GROWTH PORTFOLIO STATEMENT OF OPERATIONS For the Period June 17, 1997 (commencement of operations) to September 30, 1997 Investment income Interest $ 486 Expenses Investment advisory fee 503 Net investment income (loss) (17) Unrealized depreciation of investments (2,671) Net (decrease) in net assets resulting from operations $(2,688)
See accompanying notes to financial statements. 6 07 IMPACT MANAGEMENT INVESTMENT TRUST IMPACT MANAGEMENT GROWTH PORTFOLIO STATEMENT OF CHANGES IN NET ASSETS For the Period June 17, 1997 (commencement of operations) to September 30, 1997 Increase (Decrease) in Net Assets Operations Net investment income (loss) $ (17) Unrealized depreciation of investments (2,671) (Decrease) in net assets resulting from operations (2,688) Beneficial interest share transactions Shares sold (50,579 shares) 504,560 Shares redeemed (12 shares) (114) Increase in net assets from share transactions 504,446 Total increase in net assets 501,758 Net assets Beginning of period 0 End of period $501,758
See accompanying notes to financial statements. 7 08 IMPACT MANAGEMENT INVESTMENT TRUST IMPACT MANAGEMENT GROWTH PORTFOLIO NOTES TO FINANCIAL STATEMENTS Note 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. General Description 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 as a diversified, open-end management investment company. Impact Management Growth Portfolio (the "Fund") is the initial Series of the Trust. The Trust commenced operations on June 17, 1997 with the sale of 10,000 shares of beneficial interest of the Fund to Jordan American Holdings, Inc., d/b/a Equity Assets Management, (the "Investment Advisor") for cash in the amount of $100,000. The Trust commenced investing in securities on September 16, 1997. The Trust's fiscal year end is September 30th of each year. B. Security Valuation Investments in securities traded on a national securities exchange (or reported on the NASDAQ national market) are stated at the last reported sales price on the day of valuation. C. Method of Reporting The financial statements are presented in accordance with generally accepted accounting principles, which require the use of certain estimates made by the Fund's management. The Fund follows industry practice and records 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. D. Income Taxes The Fund's policy is to comply with the requirements of the Internal Revenue Code that are applicable to regulated investment companies and to distribute all its taxable income to its shareholders. Therefore, no federal or state income tax provision is required. 8 09 Note 2. INVESTMENT TRANSACTIONS Purchases of investment securities during the period were $165,424 with no sales of investment securities occurring. At September 30, 1997, the aggregate cost of investments for federal income tax and financial reporting purposes was $165,424 and net unrealized depreciation aggregated $2,671, of which $3,041 related to appreciated investments and $5,712 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 makes investment decisions with respect to the assets of the Fund and continuously reviews, supervises and administers the investment program of the Fund. As compensation for services rendered, the Investment Advisor receives an annual investment advisory fee equal to 2.25% of the Fund's average daily net assets. The investment advisory fee, which may be voluntarily waived in whole or in part by the Investment Advisor, is paid on a monthly basis. Certain officers of the Trust and members of the Board of Trustees are also officers and directors of the Investment Advisor. A wholly-owned subsidiary of the Investment Advisor, Impact Financial Network, Inc., a broker and dealer in securities registered with the Securities and Exchange Commission, earned brokerage fees on the Fund's purchases of investment securities aggregating approximately $1,500 for the period June 17, 1997 (commencement of operations) to September 30, 1997. Note 4. ADMINISTRATIVE SERVICES The Trust has entered into an administrative services agreement with Impact Management Services, Inc. (the "Administrator"). Under the agreement, the Administrator provides administrative personnel and services necessary to operate the Fund and provides transfer agent and dividend disbursing agent services. The Administrator bears substantially all operating expenses of the Fund, excluding brokerage fees, interest charges and taxes. For these services, the Administrator is paid a fee of $165.00 per account, per year. One twelfth of the annual fee paid to the Administrator is charged to shareholder accounts at each month end as a redemption of shares of beneficial interest. Total fees charged to shareholder accounts amounted to $114 for the period June 17, 1997 (commencement of operations) to September 30, 1997. 9 10 INDEPENDENT AUDITOR'S REPORT To the Shareholders and Board of Trustees Impact Management Investment Trust Impact Management Growth Portfolio We have audited the accompanying statement of assets and liabilities of Impact Management Growth Portfolio (the "Fund"), a Series of Impact Management Investment Trust, including the schedule of investments in securities, as of September 30, 1997, and the related statements of operations, changes in net assets, and the financial highlights for the period June 17, 1997 (commencement of operations) to September 30, 1997. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of September 30, 1997, 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 audit provides a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Impact Management Growth Portfolio, a Series of Impact Management Investment Trust, as of September 30, 1997, and the results of its operations, the changes in its net assets and the financial highlights for the period June 17, 1997 (commencement of operations) to September 30, 1997, in conformity with generally accepted accounting principles. /s/ Arthur F. Bell, Jr. & Associates, L.L.C. ARTHUR F. BELL, JR. & ASSOCIATES, L.L.C. CERTIFIED PUBLIC ACCOUNTANTS Lutherville, Maryland November 20, 1997 10 -----END PRIVACY-ENHANCED MESSAGE-----