PROSPECTUS
August 1, 1996
IMS CAPITAL VALUE FUND
10159 S.E. Sunnyside Road
Suite 330
Portland, Oregon 97015
For Information, Shareholder Services and Requests:
(800) 934-5550
The investment objective of the IMS Capital Value Fund (the "Fund") is to
provide long term growth for its shareholders. IMS Capital Management, Inc. (the
"Advisor") applies a value-oriented, contrarian investment philosophy to
reduce risk while enhancing potential returns. The Advisor seeks to reduce risk
through diversification and by focusing on large, high quality, dividend-paying
U.S. companies. The Advisor strives to maximize potential returns by purchasing
companies at historically low prices, when they are temporarily out of favor and
contrary to conventional wisdom.
The Fund is "no-load," which means that investors incur no sales charges,
commissions or deferred sales charges on the purchase or redemption of their
shares. The Fund is one of the mutual funds comprising AmeriPrime Funds, an
open-end management investment company, distributed by AmeriPrime Financial
Securities, Inc.
This Prospectus provides the information a prospective investor ought to
know before investing and should be retained for future reference. A Statement
of Additional Information has been filed with the Securities and Exchange
Commission dated August 1, 1996, which is incorporated herein by reference
and can be obtained without charge by calling the Fund at the phone number
listed above.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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SUMMARY OF FUND EXPENSES
The tables below are provided to assist an investor in understanding the
direct and indirect expenses that an investor may incur as a shareholder in the
Fund. The expense information is based on estimated amounts for the current
fiscal year. The expenses are expressed as a percentage of average net assets.
The Example should not be considered a representation of future Fund performance
or expenses, both of which may vary.
Shareholders should be aware that the Fund is a no-load fund and,
accordingly, a shareholder does not pay any sales charge or commission upon
purchase or redemption of shares of the Fund.
Shareholder Transaction Expenses
Sales Load Imposed on Purchases. . . . . . . . . . . . . . . . . . . . . . .NONE
Sales Load Imposed on Reinvested Dividends . . . . . . . . . . . . . . . . .NONE
Deferred Sales Load. . . . . . . . . . . . . . . . . . . . . . . . . . . . .NONE
Redemption Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .NONE
Exchange Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .NONE
Annual Fund Operating Expenses (as a percentage of average net assets)
Management Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.59%
12b-1 Charges. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .NONE
Other Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.33%
Total Fund Operating Expenses. . . . . . . . . . . . . . . . . . . . . . . 1.92%
The tables above are provided to assist an investor in understanding the
direct and indirect expenses that an investor may incur as a shareholder in the
Fund.
Example
You would pay the following expenses on a $1,000 investment, assuming (1)
5% annual return and (2) redemption at the end of each time period:
1 Year 3 Years
$19 $60
THE FUND
IMS Capital Value Fund (the "Fund") was organized as a series of
AmeriPrime Funds, an Ohio business trust (the "Trust"), on July 30, 1996,
and commenced operations on August 1, 1996. This prospectus offers shares of
the Fund and each share represents an undivided, proportionate interest in the
Fund. The investment advisor to the Fund is IMS Capital Management, Inc. (the
"Advisor").
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INVESTMENT OBJECTIVE AND STRATEGIES
The investment objective of the IMS Capital Value Fund is to provide long
term growth for its shareholders. IMS Capital Management, Inc. (the "Advisor")
applies a value-oriented, contrarian investment philosophy to reduce risk while
enhancing potential returns. The Advisor seeks to reduce risk through
diversification and by focusing on large, high quality, dividend-paying U.S.
companies. The Advisor strives to maximize potential returns by purchasing
companies at historically low prices, when they are temporarily out of favor and
contrary to conventional wisdom.
The Advisor will purchase stocks of companies which, in its estimation,
are unfairly valued due to special and temporary circumstances. The Advisor
selects stocks which it believes possess limited downside risk, yet have the
potential to produce significant gains. The Advisor will select either growth or
value stocks that are trading significantly below their previous highs, if such
securities are also determined by the Advisor to be trading at substantial
discounts from their intrinsic values. The companies selected generally will be
highly visible, household names that trade on the New York Stock Exchange and
that historically have had market capitalizations of at least one billion
dollars. These well-capitalized, globally-diversified companies generally have
the resources to weather negative business conditions successfully and provide
both growth and stability. The Advisor seeks to further limit investment risk by
diversifying across a broad range of industries and companies. Because of its
diversified, large company focus, the Fund is designed to be a "core holding"
within a typical investor's asset mix.
The Advisor believes that investors tend to overreact to short-term
negative events, which can in turn create undervalued security prices. For this
reason, the Advisor applies a patient approach to stock selection. Through a
careful process of company research and analysis, the Advisor selects companies
for potential purchase based on various criteria outlined below. A target buy
price is established for each company - generally well below the current price.
Companies are then tracked and monitored until the right combination of events
or market conditions creates a buying opportunity at or below the target price.
The Advisor seeks to identify situations where the reasons for a stock's decline
are misunderstood, temporary and solvable. A company is purchased only after the
Advisor has determined that investing in the security is timely given the nature
and reasons for its decline. When analyzing companies, particular emphasis is
given to securities with a high potential for gain upon return to historical
levels, securities trading at a discount to the Advisor's estimation of the
company's fair market value (based on projected future cash flow, balance sheet
characteristics, and future earnings), and securities trading at the low end of
their historical fundamental valuation ranges based on current financial ratios
such as price-to-cash flow, price-to-book value and price-to-earnings.
By owning a diversified collection of large U.S. companies that, as a
group, have already experienced a "correction" (i.e., as a group are generally
trading at 30% or more below historical levels), the Advisor believes that the
Fund, by design, may weather "bear" (down) markets more favorably than other
funds with similar investment objectives. The Advisor can, however, provide no
assurances to that effect. The Advisor typically holds companies for three to
five years at a time, and therefore believes that the Fund may not be
appropriate for those with shorter time horizons.
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The Advisor has been managing equity accounts for its clients since 1988.
The performance of the accounts with investment objectives, policies and
strategies substantially similar to those of the Fund appears below. The data is
provided to illustrate past performance of the Advisor in managing such
accounts, as compared to the S&P 500 Index. The persons responsible for the
performance below are the same as those responsible for the investment
management of the Fund.
<TABLE>
<CAPTION>
IMS CAPITAL MANAGEMENT PERFORMANCE SUMMARY
[A Graph with the following data is included in the Prospectus]
<S> <C> <C>
IMS CAPITAL MANAGEMENT S&P 500 INDEX
1991 $14,103 $13,040
1992 $18,620 $14,038
1993 $23,236 $15,441
1994 $23,124 $15,461
1995 $26,366 $21,490
Growth of $10,000 invested January 1, 1991 to December 31, 1995.
<FN>
* The Advisor's total returns by year were as follows: 1991 41.03%, 1992
32.03%, 1993 24.79%, 1994 0.48%, 1995 14.02%. The Advisor's performance
figures reflect the use of time-weighted, dollar-weighted average annualized
total returns for the Advisor's equity accounts having objectives similar to
the Fund. The results are audited by an independent certified public
accounting firm. The composite includes all fee-paying, discretionary,
individual stock portfolios above $10,000. Other accounts of the Advisor
are excluded from the composite because the nature of those accounts make
them inappropriate for purposes of comparison. In addition, performance of
accounts prior to 1991 is excluded for the same reason. In 1988, no account
satisfied the Advisor's criteria for inclusion in the composite. In 1989
and 1990, the aggregate assets in the qualifying accounts were too small to
provide diversification comparable to that of a diversified mutual fund, and
therefore the Advisor believes inclusion of performance for those years
would be misleading. Performance figures reflected are net of all expenses,
including transaction costs, commissions and management fees. Results
include the reinvestment of dividends and capital gains. The presentation
of the performance composite complies with the Performance Presentation
Standards of the Association for Investment Management and Research (AIMR).
Complete performance presentation notes are available on request.
The S&P 500 Index total returns by year were as follows: 1991 30.40%, 1992
7.65%, 1993 10.04%, 1994 1.29%, 1995 37.41%. The S&P 500 Index is a widely
recognized, unmanaged index of market activity based upon the aggregate
performance of a selected portfolio of publicly traded common stocks,
including monthly adjustments to reflect the reinvestment of dividends and
other distributions. The S&P 500 Index reflects the total return of
securities comprising the Index, including changes in market prices as
well as accrued investment income, which is presumed to be reinvested.
Performance figures for the S&P 500 Index do not reflect deduction of
transaction costs or expenses, including management fees.
</FN>
</TABLE>
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The performance of the accounts managed by the Advisor should not be
considered indicative of future performance of the Fund. Results may differ
because of, among other things, differences in brokerage commissions, account
expenses, including management fees, the size of positions taken in relation to
account size and diversification of securities, timing of purchases and sales,
availability of cash for new investments and the private character of accounts
compared with the public character of the Fund. In addition, the results for
different periods may vary.
The Advisor generally intends to stay fully invested (subject to liquidity
requirements) in common stock, preferred stock and common stock equivalents
(such as securities convertible into common stocks) regardless of the movement
of stock prices. However, the Fund may invest in fixed income securities, such
as corporate debt securities and U.S. government obligations, when the Advisor
believes that these securities offer opportunities to further the Fund's
investment objective. While the Fund ordinarily will invest in common stocks of
U.S. companies, it may invest in foreign companies through the purchase of
American Depository Receipts.
For temporary defensive purposes under adverse market conditions, the Fund
may hold a substantial portion of its assets in cash equivalents or U.S.
government repurchase agreements. The Fund may also invest in such instruments
at any time to maintain liquidity or pending selection of investments in
accordance with its policies.
As all investment securities are subject to inherent market risks and
fluctuations in value due to earnings, economic and political conditions and
other factors, the Fund cannot give any assurance that its investment objective
will be achieved. In addition, it should be noted that the Advisor has not
previously managed assets organized as a mutual fund and the Fund has no
operating history. Rates of total return quoted by the Fund may be higher or
lower than past quotations, and there can be no assurance that any rate of total
return will be maintained. See "Investment Policies and Techniques and Risk
Considerations" for a more detailed discussion of the Fund's investment
practices.
HOW TO INVEST IN THE FUND
The Fund is "no-load" and shares of the Fund are sold directly to
investors on a continuous basis, subject to the following minimums: minimum
initial investment of $5,000 ($2,000 for IRAs and other retirement plans) and
minimum subsequent investments of $100. These minimums may be waived by the
Advisor for accounts participating in an automatic investment program. Investors
choosing to purchase or redeem their shares through a securities dealer or
broker/dealer may be charged a fee by that institution. Investors choosing to
purchase or redeem shares directly from the Fund will not incur charges on
purchases or redemptions.
Initial Purchase
By Mail - You may purchase shares of the Fund by completing and signing
the investment application form which accompanies this Prospectus and mailing
it, in proper form, together with a check (subject to the above minimum amounts)
made payable to IMS Capital Value Fund, and sent to the address listed below.
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Mail or Overnight to:
IMS Capital Value Fund
c/o American Data Services, Inc.
24 West Carver Street
Huntington, NY 11743
Your purchase of shares of the Fund will be effected at the next share price
calculated after receipt of your investment.
By Wire - You may also purchase shares of the Fund by wiring federal funds
from your bank, which may charge you a fee for doing so. If money is to be
wired, you must call the Transfer Agent at 800-934-5550 to set up your account
and obtain an account number. You should be prepared at that time to provide the
information on the application. Then, you should provide your bank with the
following information for purposes of wiring your investment:
Star Bank, N.A. Cinti/Trust
ABA #0420-0001-3
Attn: IMS Capital Value Fund
D.D.A. # 485777197
Account Name _________________ (write in shareholder name) For
the Account # ______________ (write in account number)
You are required to mail a signed application to the Custodian at the
above address in order to complete your initial wire purchase. Wire orders will
be accepted only on a day on which the Fund, Custodian and Transfer Agent are
open for business. A wire purchase will not be considered made until the wired
money is received and the purchase is accepted by the Fund. Any delays which may
occur in wiring money, including delays which may occur in processing by the
banks, are not the responsibility of the Fund or the Transfer Agent. There is
presently no fee for the receipt of wired funds, but the right to charge
shareholders for this service is reserved by the Fund.
Additional Investments
You may purchase additional shares of the Fund at any time (subject to
minimum investment requirements) by mail, wire, or automatic investment. Each
additional mail purchase request must contain your name, the name of your
account(s), your account number(s), and the name of the Fund. Checks should be
made payable to IMS Capital Value Fund and should be sent to the address listed
above. A bank wire should be sent as outlined above.
Automatic Investment Plan
You may make regular investments in the Fund with an Automatic Investment
Plan by completing the appropriate section of the account application and
attaching a voided personal check. Investments may be made monthly to allow
dollar-cost averaging by automatically deducting $100 or more from your bank
checking account. You may change the amount of your monthly purchase at any
time.
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Tax Sheltered Retirement Plans
Since the Fund is oriented to longer term investments, shares of the Fund
may be an appropriate investment medium for tax sheltered retirement plans,
including: individual retirement plans (IRAs); simplified employee pensions
(SEPs); 401(k) plans; qualified corporate pension and profit sharing plans (for
employees); tax deferred investment plans (for employees of public school
systems and certain types of charitable organizations); and other qualified
retirement plans. You should contact the Transfer Agent for the procedure to
open an IRA or SEP plan, as well as more specific information regarding these
retirement plan options. Consultation with an attorney or tax advisor regarding
these plans is advisable. Custodial fees for an IRA will be paid by the
shareholder by redemption of sufficient shares of the Fund from the IRA unless
the fees are paid directly to the IRA custodian. You can obtain information
about the IRA custodial fees from the Transfer Agent.
Other Purchase Information
Dividends begin to accrue after you become a shareholder. The Fund does
not issue share certificates. All shares are held in non-certificate form
registered on the books of the Fund and the Fund's Transfer Agent for the
account of the shareholder. The rights to limit the amount of purchases and to
refuse to sell to any person are reserved by the Fund. If your check or wire
does not clear, you will be responsible for any loss incurred by the Fund. If
you are already a shareholder, the Fund can redeem shares from any identically
registered account in the Fund as reimbursement for any loss incurred. You may
be prohibited or restricted from making future purchases in the Fund.
HOW TO REDEEM SHARES
All redemptions will be made at the net asset value determined after the
redemption request has been received by the Transfer Agent in proper order.
Shareholders may receive redemption payments in the form of a check or federal
wire transfer. The proceeds of the redemption may be more or less than the
purchase price of your shares, depending on the market value of the Fund's
securities at the time of your redemption. Presently there is no charge for wire
redemptions; however, the Fund reserves the right to charge for this service.
Any charges for wire redemptions will be deducted from the shareholder's Fund
account by redemption of shares. Investors choosing to purchase or redeem their
shares through a securities dealer may be charged a fee by that institution.
By Mail - You may redeem any part of your account in the Fund at no charge
by mail. Your request should be addressed to:
IMS Capital Value Fund
c/o American Data Services, Inc.
24 W. Carver Street
Huntington, New York 11743
"Proper order" means your request for a redemption must include your
letter of instruction, including the Fund name, account number, account name(s),
the address and the dollar amount or number of shares you wish to redeem. This
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request must be signed by all registered share owner(s) in the exact name(s) and
any special capacity in which they are registered. For all redemptions, the Fund
requires that signatures be guaranteed by a bank or member firm of a national
securities exchange. Signature guarantees are for the protection of
shareholders. At the discretion of the Fund or American Data Services, Inc., a
shareholder, prior to redemption, may be required to furnish additional legal
documents to insure proper authorization.
By Telephone - You may redeem any part of your account in the Fund by
calling the Transfer Agent at (800) 934-5550. You must first complete the
Optional Telephone Redemption and Exchange section of the investment application
to institute this option. The Fund, the Transfer Agent and the Custodian are not
liable for following redemption or exchange instructions communicated by
telephone that they reasonably believe to be genuine. However, if they do not
employ reasonable procedures to confirm that telephone instructions are genuine,
they may be liable for any losses due to unauthorized or fraudulent
instructions. Procedures employed may include recording telephone instructions
and requiring a form of personal identification from the caller.
The telephone redemption and exchange procedures may be terminated at any
time by the Fund or the Transfer Agent. During periods of extreme market
activity it is possible that shareholders may encounter some difficulty in
telephoning the Fund, although neither the Fund nor the Transfer Agent has ever
experienced difficulties in receiving and in a timely fashion responding to
telephone requests for redemptions or exchanges. If you are unable to reach the
Fund by telephone, you may request a redemption or exchange by mail.
Additional Information - If you are not certain of the requirements for a
redemption please call the Transfer Agent at (800) 934-5550. Redemptions
specifying a certain date or share price cannot be accepted and will be
returned. You will be mailed the proceeds on or before the fifth business day
following the redemption. However, payment for redemption made against shares
purchased by check will be made only after the check has been collected, which
normally may take up to fifteen days. Also, when the New York Stock Exchange is
closed (or when trading is restricted) for any reason other than its customary
weekend or holiday closing or under any emergency circumstances, as determined
by the Securities and Exchange Commission, the Fund may suspend redemptions or
postpone payment dates.
Because the Fund incurs certain fixed costs in maintaining shareholder
accounts, the Fund reserves the right to require any shareholder to redeem all
of his or her shares in the Fund on 30 days' written notice if the value of his
or her shares in the Fund is less than $5,000 due to redemption, or such other
minimum amount as the Fund may determine from time to time. An involuntary
redemption constitutes a sale. You should consult your tax advisor concerning
the tax consequences of involuntary redemptions. A shareholder may increase the
value of his or her shares in the Fund to the minimum amount within the 30 day
period. Each share of the Fund is subject to redemption at any time if the Board
of Trustees determines in its sole discretion that failure to so redeem may have
materially adverse consequences to all or any of the shareholders of the Fund.
SHARE PRICE CALCULATION
The value of an individual share in the Fund (the net asset value) is
calculated by dividing the total value of the Fund's investments and other
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assets (including accrued income), less any liabilities (including estimated
accrued expenses), by the number of shares outstanding, rounded to the nearest
cent. Net asset value per share is determined as of the close of the New York
Stock Exchange (4:00 p.m., Eastern time) on each day that the exchange is open
for business, and on any other day on which there is sufficient trading in the
Fund's securities to materially affect the net asset value. The net asset value
per share of the Fund will fluctuate.
Securities which are traded on any exchange or on the NASDAQ
over-the-counter market are valued at the last quoted sale price. Lacking a last
sale price, a security is valued at its last bid price except when, in the
Advisor's opinion, the last bid price does not accurately reflect the current
value of the security. All other securities for which over-the-counter market
quotations are readily available are valued at their last bid price. When market
quotations are not readily available, when the Advisor determines the last bid
price does not accurately reflect the current value or when restricted
securities are being valued, such securities are valued as determined in good
faith by the Advisor, 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. 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.
DIVIDENDS AND DISTRIBUTIONS
The Fund intends to distribute substantially all of its net investment
income as dividends to its shareholders on an annual basis, and intends to
distribute its net long term capital gains and its net short term capital gains
at least once a year.
Income dividends and capital gain distributions are automatically
reinvested in additional shares at the net asset value per share on the
distribution date. An election to receive a cash payment of dividends and/or
capital gain distributions may be made in the application to purchase shares or
by separate written notice to the Transfer Agent. Shareholders will receive a
confirmation statement reflecting the payment and reinvestment of dividends and
summarizing all other transactions. If cash payment is requested, a check
normally will be mailed within five business days after the payable date. If you
withdraw your entire account, all dividends accrued to the time of withdrawal,
including the day of withdrawal, will be paid at that time. You may elect to
have distributions on shares held in IRAs and 403(b) plans paid in cash only if
you are 59 1/2 years old or permanently and totally disabled or if you otherwise
qualify under the applicable plan.
TAXES
The Fund intends to qualify each year as a "regulated investment company"
under the Internal Revenue Code of 1986, as amended. By so qualifying, the Fund
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will not be subject to federal income taxes to the extent that it distributes
substantially all of its net investment income and any realized capital gains.
For federal income tax purposes, dividends paid by the Fund from ordinary
income are taxable to shareholders as ordinary income, but may be eligible in
part for the dividends received deduction for corporations. Pursuant to the Tax
Reform Act of 1986 (the "Tax Reform Act"), all distributions of net capital
gains to individuals are taxed at the same rate as ordinary income. All
distributions of net capital gains to corporations are taxed at regular
corporate rates. Any distributions designated as being made from net realized
long term capital gains are taxable to shareholders as long term capital gains
regardless of the holding period of the shareholder.
The Fund will mail to each shareholder after the close of the calendar
year a statement setting forth the federal income tax status of distributions
made during the year. Dividends and capital gains distributions may also be
subject to state and local taxes. Shareholders are urged to consult their own
tax advisors regarding specific questions as to federal, state or local taxes
and the tax effect of distributions and withdrawals from the Fund.
On the application or other appropriate form, the Fund will request the
shareholder's certified taxpayer identification number (social security number
for individuals) and a certification that the shareholder is not subject to
backup withholding. Unless the shareholder provides this information, the Fund
will be required to withhold and remit to the U.S. Treasury 31% of the
dividends, distributions and redemption proceeds payable to the shareholder.
Shareholders should be aware that, under regulations promulgated by the Internal
Revenue Service, the Fund may be fined $50 annually for each account for which a
certified taxpayer identification number is not provided. In the event that such
a fine is imposed with respect to a specific account in any year, the Fund may
make a corresponding charge against the account.
OPERATION OF THE FUND
The Fund is a diversified series of AmeriPrime Funds, an open-end
management investment company organized as an Ohio business trust on August 8,
1995. The Board of Trustees supervises the business activities of the Fund. Like
other mutual funds, the Fund retains various organizations to perform
specialized services. The Fund retains IMS Capital Management, Inc., 10159 S.E.
Sunnyside Road, Suite 330, Portland, Oregon 97015 (the "Advisor") to manage the
assets of the Fund and is authorized to pay the Advisor a fee equal to an annual
average rate of 1.59% of the Fund's average daily net assets. The Advisor, an
Oregon corporation, is an independent investment advisory firm that has
practiced a large company, value-oriented, contrarian style of management for a
select group of clients since 1988. The Advisor currently manages accounts for
institutional clients which include the State of Oregon, Pacific University, and
several 401K plans. Individual clients include families, trusts and small
businesses, both taxable and non-taxable. Carl W. Marker is primarily
responsible for the day-to-day management of the Fund's portfolio. Mr. Marker
has served as the Advisor's chairman, president and primary portfolio manager
since its founding in 1988, and began privately managing individual common
stocks in 1981. Mr. Marker has a B.S. degree from the University of Oregon and
previously worked for divisions of both General Motors and Mercedes-Benz as a
financial systems analyst before founding IMS Capital Management, Inc. Mr.
Marker is regularly quoted by the press and has been published in the Dick Davis
Digest, the Wall Street Transcript, several newspapers and magazines, and has
appeared on the PBS television program, Serious Money.
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The Fund is responsible for the payment of all organizational and
operating expenses of the Fund, including brokerage fees and commissions; taxes
or governmental fees; interest; fees and expenses of the non-interested person
trustees; clerical and shareholder service staff salaries; office space and
other office expenses; fees and expenses incurred by the Fund in connection with
membership in investment company organizations; legal, auditing and accounting
expenses; expenses of registering shares under federal and state securities
laws; insurance expenses; fees and expenses of the custodian, transfer agent,
dividend disbursing agent, shareholder service agent, administrator, accounting
and pricing services agent and underwriter of the Fund; expenses, including
clerical expenses, of issue, sale, redemption or repurchase of shares of the
Fund; the cost of preparing and distributing reports and notices to
shareholders, the cost of printing or preparing prospectuses and statements of
additional information for delivery to the Fund's shareholders; the cost of
printing or preparing statements, reports or other documents to shareholders;
expenses of shareholders' meetings and proxy solicitations; and such
extraordinary or non-recurring expenses as may arise, including litigation to
which the Fund may be a party and indemnification of the Trust's trustees and
officers with respect thereto. The Fund will only be liable for organizational
expenses when the Fund reaches $10,000,000 in assets or when the Fund has been
in existence for at least one year.
The Fund retains AmeriPrime Financial Services, Inc. (the "Administrator")
to manage the Fund's business affairs and provide the Fund with administrative
services, including all regulatory reporting and necessary office equipment,
personnel and facilities. The Administrator receives a monthly fee from the Fund
equal to an annual average rate of 0.10% of the Fund's average daily net assets
up to fifty million dollars, 0.075% of the Fund's average daily net assets from
fifty to one hundred million dollars and 0.050% of the Fund's average daily net
assets over one hundred million dollars (subject to a minimum annual payment of
$30,000). In addition, the Advisor will reimburse the Administrator for
organizational expenses advanced by the Administrator. The Fund retains American
Data Services, Inc., 24 West Carver Street, Huntington, New York 11743 (the
"Transfer Agent") to serve as transfer agent, dividend paying agent and
shareholder service agent. The Trust retains AmeriPrime Financial Securities,
Inc., 1793 Kingswood Drive, Suite 200, Southlake, Texas 76092 (the
"Distributor") to act as the principal distributor of the Fund's shares. Kenneth
D. Trumpfheller, officer and sole shareholder of the Administrator and the
Distributor, is an officer and trustee of the Trust. The services of the
Administrator, Transfer Agent and Distributor are operating expenses paid by the
Fund.
Consistent with the Rules of Fair Practice of the National Association of
Securities Dealers, Inc., and subject to its obligation of seeking best
qualitative execution, the Advisor may give consideration to sales of shares of
the Fund as a factor in the selection of brokers and dealers to execute
portfolio transactions.
INVESTMENT POLICIES AND TECHNIQUES AND RISK CONSIDERATIONS
This section contains general information about various types of
securities and investment techniques that the Fund may purchase or employ.
Equity Securities
The fund will invest primarily in U.S. equity securities consisting of
common stock, preferred stock and common stock equivalents such as convertible
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preferred stock and convertible debentures, rights and warrants. Convertible
preferred stock is preferred stock that can be converted into common stock
pursuant to its terms. Convertible debentures are debt instruments that can be
converted into common stock pursuant to their terms. The Fund will not invest
more that 5% of its net assets in convertible preferred stock, convertible
debentures, rights or warrants. The Fund reserves the right to invest in foreign
stocks, through the purchase of American Depository Receipts (ADRs), provided
the companies have substantial operations in the U.S. and do not exceed 5% of
the Fund's net assets. ADRs are dollar-denominated receipts that are
generally issued in registered form by domestic banks, and represent the deposit
with the bank of a security of a foreign issuer.
Fixed Income Securities
Although the Fund intends to invest primarily in U.S. common stocks, the Advisor
reserves the right, during periods of unusually high interest rates or unusual
market conditions, to invest in fixed income securities for preservation of
capital, total return and capital gain purposes, if the Advisor believes that
such a position would best serve the Fund's investment objective. Fixed
income securities include corporate debt securities, U.S. government securities
and participation interests in such securities. Fixed income securities are
generally considered to be interest rate sensitive, which means that their value
will generally decrease when interest rates rise and increase when interest
rates fall. Securities with shorter maturities, while offering lower yields,
generally provide greater price stability than longer term securities and are
less affected by changes in interest rates.
Corporate Debt Securities - Corporate debt securities are long and
short term debt obligations issued by companies (such as publicly issued and
privately placed bonds, notes and commercial paper). The Advisor considers
corporate debt securities to be of investment grade quality if they are rated A
or higher by Standard & Poor's Corporation, or Moody's Investors Services, Inc.,
or if unrated, determined by the Advisor to be of comparable quality. Investment
grade debt securities generally have adequate to strong protection of principal
and interest payments. In the lower end of this category, credit quality may be
more susceptible to potential future changes in circumstances and the securities
have speculative elements. The Fund will not invest more than 5% of the value of
its net assets in securities that are below investment grade.
U.S. Government Obligations - U.S. government obligations may be
backed by the credit of the government as a whole or only by the issuing agency.
U.S. Treasury bonds, notes, and bills and some agency securities, such as those
issued by the Federal Housing Administration and the Government National
Mortgage Association (GNMA), are backed by the full faith and credit of the U.S.
government as to payment of principal and interest and are the highest quality
government securities. Other securities issued by U.S. government agencies or
instrumentalities, such as securities issued by the Federal Home Loan Banks and
the Federal Home Loan Mortgage Corporation, are supported only by the credit of
the agency that issued them, and not by the U.S. government. Securities issued
by the Federal Farm Credit System, the Federal Land Banks, and the Federal
National Mortgage Association (FNMA) are supported by the agency's right to
borrow money from the U.S. Treasury under certain circumstances, but are not
backed by the full faith and credit of the U.S. government.
- 12 -
<PAGE>
Investment Techniques
General
The Fund, on occasion, may write covered call options on securities held
within the portfolio, for income purposes, provided that such investments do not
exceed 5% of the Fund's net assets. The Fund may not engage in short sales
of any kind. For income purposes, the Fund may lend its portfolio securities
from time to time, provided that such transactions do not exceed 5% of the
Fund's net assets.
Repurchase Agreements - The Fund may invest in repurchase agreements
fully collateralized by U.S. Government obligations. A repurchase agreement is a
short-term investment in which the purchaser (i.e., the Fund) acquires ownership
of a U.S. Government obligation (which may be of any maturity) and the seller
agrees to repurchase the obligation at a future time at a set price, thereby
determining the yield during the purchaser's holding period (usually not
more than seven days from the date of purchase). Any repurchase transaction in
which the Fund engages will require full collateralization of the seller's
obligation during the entire term of the repurchase agreement. In the event of a
bankruptcy or other default of the seller, the Fund could experience both delays
in liquidating the underlying security and losses in value. However, the Fund
intends to enter into repurchase agreements only with Star Bank, N.A. (the
Fund's Custodian), other banks with assets of $1 billion or more and
registered securities dealers determined by the Advisor (subject to review by
the Board of Trustees) to be creditworthy. The Advisor monitors the
creditworthiness of the banks and securities dealers with which the Fund engages
in repurchase transactions.
GENERAL INFORMATION
Fundamental Policies. The investment limitations set forth in the
Statement of Additional Information as fundamental policies may not be changed
without the affirmative vote of the majority of the outstanding shares of the
Fund. The investment objective of the Fund may be changed without the
affirmative vote of a majority of the outstanding shares of the Fund. Any such
change may result in the Fund having an investment objective different from the
objective which the shareholders considered appropriate at the time of
investment in the Fund.
Portfolio Turnover. The Fund does not intend to purchase or sell
securities for short term trading purposes. However, if the objectives of the
Fund would be better served, short-term profits or losses may be realized from
time to time. It is anticipated that the Fund will hold most securities from 1
to 5 years at a time and that portfolio turnover will average less than 45%.
Shareholder Rights. Any Trustee of the Trust may be removed by vote of the
shareholders holding not less than two-thirds of the outstanding shares of the
Trust. The Trust does not hold an annual meeting of shareholders. When matters
are submitted to shareholders for a vote, each shareholder is entitled to one
vote for each whole share he owns and fractional votes for fractional shares he
owns. All shares of the Fund have equal voting rights and liquidation rights.
PERFORMANCE INFORMATION
The Fund may periodically advertise "average annual total return." The
"average annual total return" of the Fund refers to the average annual
compounded rate of return over the stated period that would equate an initial
- 13 -
<PAGE>
amount invested at the beginning of a stated period to the ending redeemable
value of the investment. The calculation of "average annual total return"
assumes the reinvestment of all dividends and distributions.
The Fund may also periodically advertise its total return over various
periods in addition to the value of a $10,000 investment (made on the date of
the initial public offering of the Fund's shares) as of the end of a specified
period. The "total return" for the Fund refers to the percentage change in the
value of an account between the beginning and end of the stated period, assuming
no activity in the account other than reinvestment of dividends and capital
gains distributions.
The Fund may also include in advertisements data comparing performance
with other mutual funds as reported in non-related investment media, published
editorial comments and performance rankings compiled by independent
organizations and publications that monitor the performance of mutual funds
(such as Lipper Analytical Services, Inc., Morningstar, Inc., Fortune or
Barron's). Performance information may be quoted numerically or may be presented
in a table, graph or other illustration. In addition, Fund performance may be
compared to well-known indices of market performance including the Standard &
Poor's (S&P) 500 Index or the Dow Jones Industrial Average.
The advertised performance data of the Fund is based on historical
performance and is not intended to indicate future performance. Rates of total
return quoted by the Fund may be higher or lower than past quotations, and there
can be no assurance that any rate of total return will be maintained. The
principal value of an investment in the Fund will fluctuate so that a
shareholder's shares, when redeemed, may be worth more or less than the
shareholder's original investment.
Investment Advisor Administrator
IMS Capital Management, Inc. AmeriPrime Financial Services, Inc.
10159 S.E. Sunnyside Road, Suite 330 1793 Kingswood Drive, Suite 200
Portland, Oregon 97015 Southlake, Texas 76092
Custodian Distributor
Star Bank, N.A. AmeriPrime Financial Securities, Inc.
P.O. Box 641082 1793 Kingswood Drive, Suite 200
Cincinnati, Ohio 45264 Southlake, Texas 76092
Transfer Agent (all purchase and Independent Auditors
redemption requests) McCurdy & Associates CPA's, Inc.
American Data Services, Inc. 27955 Clemens Road
24 West Carver Street Westlake, Ohio 44145
Huntington, New York 11743
No person has been authorized to give any information or to make any
representations, other than those contained in this Prospectus, in connection
with the offering contained in this Prospectus, and if given or made, such
information or representations must not be relied upon as being authorized by
the Fund. This Prospectus does not constitute an offer by the Fund to sell its
shares in any state to any person to whom it is unlawful to make such offer in
such state.
- 14 -
<PAGE>
TABLE OF CONTENTS PAGE
SUMMARY OF FUND EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Shareholder Transaction Expenses . . . . . . . . . . . . . . . . . . . 2
Annual Fund Operating Expenses . . . . . . . . . . . . . . . . . . . . 2
THE FUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
INVESTMENT OBJECTIVE AND STRATEGIES. . . . . . . . . . . . . . . . . . . . . 3
HOW TO INVEST IN THE FUND. . . . . . . . . . . . . . . . . . . . . . . . . . 5
Initial Purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
By Mail. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
By Wire. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Additional Investments . . . . . . . . . . . . . . . . . . . . . . . . 6
Automatic Investment Plan. . . . . . . . . . . . . . . . . . . . . . . 6
Tax Sheltered Retirement Plans . . . . . . . . . . . . . . . . . . . . 7
Other Purchase Information . . . . . . . . . . . . . . . . . . . . . . 7
HOW TO REDEEM SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
By Mail. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
By Telephone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Additional Information . . . . . . . . . . . . . . . . . . . . . . . . 8
SHARE PRICE CALCULATION. . . . . . . . . . . . . . . . . . . . . . . . . . . 8
DIVIDENDS AND DISTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . . . . 9
TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
OPERATION OF THE FUND. . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
INVESTMENT POLICIES AND TECHNIQUES AND RISK CONSIDERATIONS . . . . . . . . . 11
Equity Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Fixed Income Securities. . . . . . . . . . . . . . . . . . . . . . . . 12
Corporate Debt Securities - . . . . . . . . . . . . . . . . . . 12
U.S. Government Obligations. . . . . . . . . . . . . . . . . . . 12
Investment Techniques. . . . . . . . . . . . . . . . . . . . . . . . . 13
General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
GENERAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Fundamental Policies . . . . . . . . . . . . . . . . . . . . . . . . . 13
Portfolio Turnover . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Shareholder Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 13
PERFORMANCE INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . 13
<PAGE>
IMS CAPITAL VALUE FUND
STATEMENT OF ADDITIONAL INFORMATION
AUGUST 1, 1996
This Statement of Additional Information is not a prospectus. It should be
read in conjunction with the Prospectus of IMS Capital Value Fund dated
August 1, 1996. A copy of the Prospectus can be obtained by writing
the Transfer Agent at 24 W. Carver Street, Huntington, New York 11743, or by
calling 1-800-934-5550.
- 1 -
<PAGE>
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
PAGE
DESCRIPTION OF THE TRUST. . . . . . . . . . . . . . . . . . . . . . 1
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK
CONSIDERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 1
INVESTMENT LIMITATIONS. . . . . . . . . . . . . . . . . . . . . . . 2
THE INVESTMENT ADVISOR. . . . . . . . . . . . . . . . . . . . . . . 5
TRUSTEES AND OFFICERS . . . . . . . . . . . . . . . . . . . . . . . 6
PORTFOLIO TRANSACTIONS AND BROKERAGE. . . . . . . . . . . . . . . . 7
DETERMINATION OF SHARE PRICE. . . . . . . . . . . . . . . . . . . . 8
INVESTMENT PERFORMANCE. . . . . . . . . . . . . . . . . . . . . . . 8
CUSTODIAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
TRANSFER AGENT. . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ACCOUNTANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
DISTRIBUTOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
- 2 -
<PAGE>
DESCRIPTION OF THE TRUST
IMS Capital Value Fund (the "Fund") was organized as a series of AmeriPrime
Funds (the "Trust"). 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.
Each share of a series represents an equal proportionate interest in the
assets and liabilities belonging to that series with each other share of that
series and is entitled to such dividends and distributions out of income
belonging to the series as are declared by the Trustees. The shares do not have
cumulative voting rights or any preemptive or conversion rights, and the
Trustees have the authority from time to time to divide or combine the shares of
any series into a greater or lesser number of shares of that series so long as
the proportionate beneficial interest in the assets belonging to that series and
the rights of shares of any other series are in no way affected. In case of any
liquidation of a series, the holders of shares of the series being liquidated
will be entitled to receive as a class a distribution out of the assets, net of
the liabilities, belonging to that series. Expenses attributable to any series
are borne by that series. Any general expenses of the Trust not readily
identifiable as belonging to a particular series are allocated by or under the
direction of the Trustees in such manner as the Trustees determine to be fair
and equitable. No shareholder is liable to further calls or to assessment by the
Trust without his or her express consent.
Upon sixty days prior written notice to shareholders, the Fund may make
redemption payments in whole or in part in securities or other property if the
Trustees determine that existing conditions make cash payments undesirable. For
other information concerning the purchase and redemption of shares of the Fund,
see "How to Invest in the Fund" and "How to Redeem Shares" in the Fund's
Prospectus. For a description of the methods used to determine the share price
and value of the Fund's assets, see "Share Price Calculation" in the Fund's
Prospectus.
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK
CONSIDERATIONS
This section contains a more detailed discussion of some of the investments
the Fund may make and some of the techniques it may use, as described in the
Prospectus (see "Investment Objectives and Strategies" and "Investment Policies
and Techniques and Risk Considerations").
A. Equity Securities. Equity securities include common stock, preferred
stock and common stock equivalents (such as convertible preferred stock, rights
and warrants). Convertible preferred stock is preferred stock that can be
converted into common stock pursuant to its terms. Warrants are options to
purchase equity securities at a specified price valid for a specific time
period. Rights are similar to warrants, but normally have a short duration and
are distributed by the issuer to its shareholders. The Fund may invest up to 5%
of its net assets at the time of purchase in convertible preferred stock,
convertible debentures, rights or warrants.
- 3 -
<PAGE>
B. American Depository Receipts. American Depository Receipts are
dollar-denominated receipts that are generally issued in registered form by
domestic banks, and represent the deposit with the bank of a security of a
foreign issuer. To the extent that the Fund invests in foreign securities, such
investments may be subject to special risks. For example, there may be less
information publicly available about a foreign company than about a U.S.
company, and foreign companies are not generally subject to accounting, auditing
and financial reporting standards and practices comparable to those in the U.S.
Other risks associated with investments in foreign securities include changes in
restrictions on foreign currency transactions and rates of exchanges, changes in
the administrations or economic and monetary policies of foreign governments,
the imposition of exchange control regulations, the possibility of expropriation
decrees and other adverse foreign governmental action, the imposition of foreign
taxes, less liquid markets, less government supervision of exchanges, brokers
and issuers, difficulty in enforcing contractual obligations, delays in
settlement of securities transactions and greater price volatility. In addition,
investing in foreign securities will generally result in higher commissions than
investing in similar domestic securities.
C. Options Transactions. The Fund may write (sell) covered call options on
common stocks in the Fund's portfolio. A covered call option on a security is an
agreement to sell a particular portfolio security if the option is exercised at
a specified price, or before a set date. The Fund profits from the sale of the
option, but gives up the opportunity to profit from any increase in the price of
the stock above the option price, and may incur a loss if the stock price falls.
Risks associated with writing covered call options include the possible
inability to effect closing transactions at favorable prices and an appreciation
limit on the securities set aside for settlement. The Fund will only engage in
exchange-traded options transactions.
D. Loans of Portfolio Securities. The Fund may made short and long term
loans of its portfolio securities. Under the lending policy authorized by the
Board of Trustees and implemented by the Adviser in response to requests of
broker-dealers or institutional investors which the Adviser deems qualified, the
borrower must agree to maintain collateral, in the form of cash or U.S.
government obligations, with the Fund on a daily mark-to-market basis in an
amount at least equal to 100% of the value of the loaned securities. The Fund
will continue to receive dividends or interest on the loaned securities and may
terminate such loans at any time or reacquire such securities in time to vote on
any matter which the Board of Trustees determines to be serious. With respect to
loans of securities, there is the risk that the borrower may fail to return the
loaned securities or that the borrower may not be able to provide additional
collateral.
INVESTMENT LIMITATIONS
Fundamental. The investment limitations described below have been adopted
by the Trust with respect to the Fund and are fundamental ("Fundamental"), i.e.,
they may not be changed without the affirmative vote of a majority of the
outstanding shares of the Fund. As used in the Prospectus and this Statement of
Additional Information, the term "majority" of the outstanding shares of the
Fund means the lesser of (1) 67% or more of the outstanding shares of the Fund
present at a meeting, if the holders of more than 50% of the outstanding shares
of the Fund are present or represented at such meeting; or (2) more than 50% of
the outstanding shares of the Fund. Other investment practices which may be
changed by the Board of Trustees without the approval of shareholders to the
- 4 -
<PAGE>
extent permitted by applicable law, regulation or regulatory policy are
considered non-fundamental ("Non-Fundamental").
1. Borrowing Money. The Fund will not borrow money, except (a) from a bank,
provided that immediately after such borrowing there is an asset coverage of
300% for all borrowings of the Fund; or (b) from a bank or other persons for
temporary purposes only, provided that such temporary borrowings are in an
amount not exceeding 5% of the Fund's total assets at the time when the
borrowing is made. This limitation does not preclude the Fund from entering into
reverse repurchase transactions, which will not be considered as borrowings
provided they are fully collateralized.
2. Senior Securities. The Fund will not issue senior securities. This
limitation is not applicable to activities that may be deemed to involve the
issuance or sale of a senior security by the Fund, provided that the Fund's
engagement in such activities is (a) consistent with or permitted by the
Investment Company Act of 1940, as amended, the rules and regulations
promulgated thereunder or interpretations of the Securities and Exchange
Commission or its staff and (b) as described in the Prospectus and this
Statement of Additional Information.
3. Underwriting. The Fund will not act as underwriter of securities
issued by other persons. This limitation is not applicable to the extent
that, in connection with the disposition of portfolio securities (including
restricted securities), the Fund may be deemed an underwriter under certain
federal securities laws.
4. Real Estate. The Fund will not purchase or sell real estate. This
limitation is not applicable to investments in marketable securities which have
a significant portion of their assets in real estate.
5. Commodities. The Fund will not purchase or sell commodities unless
acquired as a result of ownership of securities or other investments. This
limitation does not preclude the Fund from purchasing or selling options or
futures contracts, from investing in securities or other instruments backed by
commodities or from investing in companies which are engaged in a commodities
business or have a significant portion of their assets in commodities.
6. Loans. The Fund will not make loans to other persons, except (a) by
loaning portfolio securities, (b) by engaging in repurchase agreements, or (c)
by purchasing non-publicly offered debt securities. For purposes of this
limitation, the term "loans" shall not include the purchase of a portion of an
issue of publicly distributed bonds, debentures or other securities.
7. Concentration. The Fund will not invest 25% or more of its total assets
in a particular industry. This limitation is not applicable to investments in
obligations issued or guaranteed by the U.S. government, its agencies and
instrumentalities or repurchase agreements with respect thereto.
With respect to the percentages adopted by the Trust as maximum limitations
on its investment policies and limitations, an excess above the fixed percentage
will not be a violation of the policy or limitation unless the excess results
- 5 -
<PAGE>
immediately and directly from the acquisition of any security or the action
taken. This paragraph does not apply to the borrowing policy set forth in
paragraph 1 above.
Notwithstanding any of the foregoing limitations, any investment company,
whether organized as a trust, association or corporation, or a personal holding
company, may be merged or consolidated with or acquired by the Trust, provided
that if such merger, consolidation or acquisition results in an investment in
the securities of any issuer prohibited by said paragraphs, the Trust shall,
within ninety days after the consummation of such merger, consolidation or
acquisition, dispose of all of the securities of such issuer so acquired or such
portion thereof as shall bring the total investment therein within the
limitations imposed by said paragraphs above as of the date of consummation.
Non-Fundamental. The following limitations have been adopted by the Trust
with respect to the Fund and are Non-Fundamental (see "Investment Restrictions"
above).
i. Pledging. The Fund will not mortgage, pledge, hypothecate or in any
manner transfer, as security for indebtedness, any assets of the Fund except as
may be necessary in connection with borrowings described in limitation (1)
above. Margin deposits, security interests, liens and collateral arrangements
with respect to transactions involving options, futures contracts, short sales
and other permitted investments and techniques are not deemed to be a mortgage,
pledge or hypothecation of assets for purposes of this limitation.
ii. Borrowing. The Fund will not purchase any security while borrowings
representing more than 5% of its total assets are outstanding. The Fund will
not invest in reverse repurchase agreements.
iii. Margin Purchases. The Fund will not purchase securities or evidences
of interest thereon on "margin." This limitation is not applicable to short term
credit obtained by the Fund for the clearance of purchases and sales or
redemption of securities, or to arrangements with respect to transactions
involving options and other permitted investments and techniques.
iv. Short Sales. The Fund will not effect short sales.
v. Options. The Fund will not purchase or sell puts, calls, options or
straddles, except as described in the Prospectus and this Statement of
Additional Information.
vi. Repurchase Agreements. The Fund may invest some or all of the funds
assets in U.S. Government repurchase agreements temporarily under certain
conditions described in the prospectus.
vii. Illiquid Investments. The Fund will not invest in securities for
which there are legal or contractual restrictions on resale and other illiquid
securities.
viii.Mortgage-related Securities. The Fund will not invest in mortgage-
related securities.
- 6 -
<PAGE>
Other Restrictions. To comply with the current state regulations, the Fund
presently intends to observe the following restrictions, which may be changed by
the Board of Trustees without shareholder approval.
THE INVESTMENT ADVISOR
The Fund's investment advisor is IMS Capital Management, 10159 S.E.
Sunnyside Road, Suite 330, Portland, Oregon 97015. Carl W. Marker may be deemed
to be a controlling person of the Advisor due to his ownership of the shares of
the corporation.
Under the terms of the management agreement (the "Agreement"), the Advisor
manages the Fund's investments subject to approval of the Board of Trustees. As
compensation for its management services, the Fund is obligated to pay the
Advisor a fee computed and accrued daily and paid monthly at an annual rate of
1.59% of the average daily net assets of the Fund. The Advisor may waive all or
part of its fee, at any time, and at its sole discretion, but such action shall
not obligate the Advisor to waive any fees in the future.
The Advisor retains the right to use the name "IMS" in connection with
another investment company or business enterprise with which the Advisor is or
may become associated. The Trust's right to use the name "IMS" automatically
ceases ninety days after termination of the Agreement and may be withdrawn by
the Advisor on ninety days written notice.
The Advisor may make payments to banks or other financial institutions that
provide shareholder services and administer shareholder accounts. The
Glass-Steagall Act prohibits banks from engaging in the business of
underwriting, selling or distributing securities. Although the scope of this
prohibition under the Glass-Steagall Act has not been clearly defined by the
courts or appropriate regulatory agencies, management of the Fund believes that
the Glass-Steagall Act should not preclude a bank from providing such services.
However, state securities laws on this issue may differ from the interpretations
of federal law expressed herein and banks and financial institutions may be
required to register as dealers pursuant to state law. If a bank were prohibited
from continuing to perform all or a part of such services, management of the
Fund believes that there would be no material impact on the Fund or its
shareholders. Banks may charge their customers fees for offering these services
to the extent permitted by applicable regulatory authorities, and the overall
return to those shareholders availing themselves of the bank services will be
lower than to those shareholders who do not. The Fund may from time to time
purchase securities issued by banks which provide such services; however, in
selecting investments for the Fund, no preference will be shown for such
securities.
- 7 -
<PAGE>
TRUSTEES AND OFFICERS
The names of the Trustees and executive officers of the Trust are shown
below. Each Trustee who is an "interested person" of the Trust, a defined in the
Investment Company Act of 1940, is indicated by an asterisk.
<TABLE>
<S> <C> <C>
Name, Age and Address Position Principal Occupations During Past 5 Years
* Kenneth D. Trumpfheller President and Trustee President, Treasurer and Secretary of AmeriPrime
Age: 37 Financial Services, Inc., the Fund's administrator,
1793 Kingswood Drive and AmeriPrime Financial Securities, Inc., the
Suite 200 Fund's distributor. Prior to December, 1994,
Southlake, Texas 76092 a senior client executive with SEI Financial Services.
Kelli D. Shomaker, C.P.A. Secretary, Treasurer Manager of Compliance of AmeriPrime Financial
Age: 33 Services, Inc.; Vice President, Chief Accounting
1793 Kingswood Drive Officer, Treasurer and Controller of United
Suite 200 Services Advisors, Inc. and United Services
Southlake, Texas 76092 Insurance Funds from 1994 to 1996; Vice President,
Chief Accounting Officer, Treasurer, and Controller
of Accolade Funds and Pauze/Swanson United Services
Funds from 1993 to 1996; Controller from 1987 to
1996 and Vice President, Chief Accounting Officer
and Treasurer from 1990 to 1996 of United Services
Funds; Director of Security Trust & Financial Company
from 1993 to 1996.
Steve L. Cobb Trustee President of Clare Energy, Inc., oil and gas
Age: 37 exploration company; International Marketing
140 Mockingbird Lane Manager of Carbo Ceramics Inc., oil field
Coppell, Texas 76019 manufacturing/supply company.
Gary E. Hippenstiel Trustee Vice President and Chief Investment Officer
Age: 48 of Legacy Trust Company; President and Director
600 Jefferson Street of Heritage Trust Company from 1994 to 1996;
Houston, Texas 70002 Vice President and Manager of Investments of
Kanaly Trust Company from 1988 to 1992.
</TABLE>
The compensation paid to the Trustees of the Trust is set forth in the
following table:
<TABLE>
<S> <C> <C> <C> <C>
Pension or
Aggregate Retirement Estimated Annual Total Compensation
Compensation Accrued As Part Benefits Upon from Trust (the Trust is
Name from Trust (1) of Fund Expenses Retirement not in a Fund Complex) (1)
Kenneth D. Trumpfheller 0 0 0 0
Steve L. Cobb $4,000 0 0 $4,000
Gary E. Hippenstiel $4,000 0 0 $4,000
<FN>
1 Trustee fees are Trust expenses and each series of the Trust pays a portion of
the Trustee fees. The compensation is estimated for the first full year of the
Trust ending October 31, 1996.
</FN>
</TABLE>
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<PAGE>
PORTFOLIO TRANSACTIONS AND BROKERAGE
Subject to policies established by the Board of Trustees of the Trust, the
Advisor is responsible for the Fund's portfolio decisions and the placing of the
Fund's portfolio transactions. In placing portfolio transactions, the Advisor
seeks the best qualitative execution for the Fund, taking into account such
factors as price (including the applicable brokerage commission or dealer
spread), the execution capability, financial responsibility and responsiveness
of the broker or dealer and the brokerage and research services provided by the
broker or dealer. The Advisor generally seeks favorable prices and commission
rates that are reasonable in relation to the benefits received.
The Advisor is specifically authorized to select brokers or dealers who
also provide brokerage and research services to the Fund and/or the other
accounts over which the Advisor exercises investment discretion and to pay such
brokers or dealers a commission in excess of the commission another broker or
dealer would charge if the Advisor determines in good faith that the commission
is reasonable in relation to the value of the brokerage and research services
provided. The determination may be viewed in terms of a particular transaction
or the Advisor's overall responsibilities with respect to the Trust and to other
accounts over which it exercises investment discretion.
Research services include supplemental research, securities and economic
analyses, statistical services and information with respect to the availability
of securities or purchasers or sellers of securities and analyses of reports
concerning performance of accounts. The research services and other information
furnished by brokers through whom the Fund effects securities transactions may
also be used by the Advisor in servicing all of its accounts. Similarly,
research and information provided by brokers or dealers serving other clients
may be useful to the Advisor in connection with its services to the Fund.
Although research services and other information are useful to the Fund and the
Advisor, it is not possible to place a dollar value on the research and other
information received. It is the opinion of the Board of Trustees and the Advisor
that the review and study of the research and other information will not reduce
the overall cost to the Advisor of performing its duties to the Fund under the
Agreement.
Over-the-counter transactions will be placed either directly with principal
market makers or with broker-dealers, if the same or a better price, including
commissions and executions, is available. Fixed income securities are normally
purchased directly from the issuer, an underwriter or a market maker. Purchases
include a concession paid by the issuer to the underwriter and the purchase
price paid to a market maker may include the spread between the bid and asked
prices.
To the extent that the Trust and another of the Advisor's clients seek to
acquire the same security at about the same time, the Trust may not be able to
acquire as large a position in such security as it desires or it may have to pay
a higher price for the security. Similarly, the Trust may not be able to obtain
as large an execution of an order to sell or as high a price for any particular
portfolio security if the other client desires to sell the same portfolio
security at the same time. On the other hand, if the same securities are bought
or sold at the same time by more than one client, the resulting participation in
volume transactions could produce better executions for the Trust. In the event
that more than one client wants to purchase or sell the same security on a given
date, the purchases and sales will normally be made by random client selection.
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<PAGE>
DETERMINATION OF SHARE PRICE
The price (net asset value) of the shares of the Fund is determined as of
4:00 p.m., Eastern time on each day the Trust is open for business and on any
other day on which there is sufficient trading in the Fund's securities to
materially affect the net asset value. The Trust is open for business on every
day except Saturdays, Sundays and the following holidays: New Year's Day,
President's Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas. For a description of the methods used to determine
the net asset value (share price), see "Share Price Calculation" in the
Prospectus.
INVESTMENT PERFORMANCE
"Average annual total return," as defined by the Securities and Exchange
Commission, is computed by finding the average annual compounded rates of return
(over the one and five year periods and the period from initial public offering
through the end of the Fund's most recent fiscal year) that would equate the
initial amount invested to the ending redeemable value, according to the
following formula:
P(1+T)n = ERV
Where: P = a hypothetical $1,000 initial investment
T = average annual total return
n = number of years
ERV = ending redeemable value at the end of the applicable
period of the hypothetical $1,000 investment made at the
beginning of the applicable period.
The computation assumes that all dividends and distributions are reinvested at
the net asset value on the reinvestment dates and that a complete redemption
occurs at the end of the applicable period.
The Fund's investment performance will vary depending upon market
conditions, the composition of the Fund's portfolio and operating expenses of
the Fund. These factors and possible differences in the methods and time periods
used in calculating non-standardized investment performance should be considered
when comparing the Fund's performance to those of other investment companies or
investment vehicles. The risks associated with the Fund's investment objective,
policies and techniques should also be considered. At any time in the future,
investment performance may be higher or lower than past performance, and there
can be no assurance that any performance will continue.
From time to time, in advertisements, sales literature and information
furnished to present or prospective shareholders, the performance of the Fund
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<PAGE>
may be compared to indices of broad groups of unmanaged securities considered to
be representative of or similar to the portfolio holdings of the Fund or
considered to be representative of the stock market in general. The Fund may use
the Standard & Poor's 500 Stock Index or the Dow Jones Industrial Average.
In addition, the performance of the Fund may be compared to other groups of
mutual funds tracked by any widely used independent research firm which ranks
mutual funds by overall performance, investment objectives and assets, such as
Lipper Analytical Services, Inc. or Morningstar, Inc. The objectives, policies,
limitations and expenses of other mutual funds in a group may not be the same as
those of the Fund. Performance rankings and ratings reported periodically in
national financial publications such as Barron's and Fortune also may be used.
CUSTODIAN
Star Bank, N.A., 425 Walnut Street, Cincinnati, Ohio 45202, is Custodian of
the Fund's investments. The Custodian acts as the Fund's depository, safekeeping
its portfolio securities, collects all income and other payments with respect
thereto, disburses funds at the Fund's request and maintains records in
connection with its duties.
TRANSFER AGENT
American Data Services, Inc., 24 W. Carver Street, Huntington, New York
11743, acts as the Fund's transfer agent and, in such capacity, maintains the
records of each shareholder's account, answers shareholders' inquiries
concerning their accounts, processes purchases and redemptions of the Fund's
shares, acts as dividend and distribution disbursing agent and performs other
accounting and shareholder service functions. In addition, American Data
Services, Inc. provides the Fund with certain monthly reports, record-keeping
and other management-related services.
ACCOUNTANTS
The firm of McCurdy & Associates, CPA's, 27955 Clemens Road, Westlake, Ohio
44145, has been selected as independent public accountants for the Trust for the
fiscal year ending October 31, 1996. McCurdy & Associates performs an annual
audit of the Fund's financial statements and provides financial, tax and
accounting consulting services as requested.
DISTRIBUTOR
AmeriPrime Financial Securities, Inc., 1793 Kingswood Drive, Suite 200,
Southlake, Texas 76092, is the exclusive agent for distribution of shares of the
Fund. The Distributor is obligated to sell the shares of the Fund on a best
efforts basis only against purchase orders for the shares.
Shares of the Fund are offered to the public on a continuous basis.
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