<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / /
--
Pre-Effective Amendment No. / /
Post-Effective Amendment No. 9 /X/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT / /
OF 1940
Amendment No. 10 /X/
(Check appropriate box or boxes.)
AmeriPrime Funds - File Nos. 33-96826 and 811-9096
1793 Kingswood Drive, Suite 200, Southlake, Texas 76092
- -------------------------------------------------------------------
(Address of Principal Executive Offices) Zip Code
Registrant's Telephone Number, including Area Code: (817) 431-2197
Kenneth Trumpfheller, 1793 Kingswood Drive, Suite 200, Southlake, Texas 76092
(Name and Address of Agent for Service)
With copy to:
Donald S. Mendelsohn, Brown, Cummins & Brown Co., L.P.A.
3500 Carew Tower, Cincinnati, Ohio 45202
Release Date: June, 1997
It is proposed that this filing will become effective:
/ / immediately upon filing pursuant to paragraph (b) /X/ on June 30, 1997
pursuant to paragraph (b) / / 60 days after filing pursuant to paragraph (a)(1)
/ / on (date) pursuant to paragraph (a)(1) / / 75 days after filing pursuant to
paragraph (a)(2) / / on (date) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
/ / this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Registrant continues its election made by the filing of its
Registration Statement, effective November 6, 1995, to register an indefinite
number and amount of its securities under Rule 24f-2 of the Investment Company
Act. Registrant filed, pursuant to paragraph b(1) of Rule 24f-2, a Form 24F-2
for the fiscal year ended October 31, 1996 on December 30, 1996.
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AmeriPrime Funds
CROSS REFERENCE SHEET
FORM N-1A
FOR FOUNTAINHEAD SPECIAL VALUE FUND
ITEM SECTION IN EACH PROSPECTUS
1.............................. Cover Page
2.............................. Summary of Fund Expenses
3.............................. Supplement to Prospectus
4.............................. The Fund, Investment Objective and
Strategies, Investment Policies and
Techniques and Risk Considerations,
Operation of the Fund, General
Information
5.............................. Operation of the Fund
5A............................. None
6.............................. Cover Page, Dividends and
Distributions, Taxes, Operation of
the Fund, General Information,
Supplement to Prospectus
7.............................. Cover Page, How to Invest in the
Fund, Share Price Calculation,
Operation of the Fund,
8.............................. How to Redeem Shares
9.............................. None
13.............................. General Information
15.............................. General Information
SECTION IN STATEMENT OF
ITEM ADDITIONAL INFORMATION
10.............................. Cover Page
11.............................. Table of Contents
12.............................. None
13.............................. Additional Information About Fund
Investments and Risk Considerations,
Investment Limitations
14.............................. Trustees and Officers
15.............................. Description of the Trust
16.............................. The Investment Adviser, Custodian,
Transfer Agent, Accountants
17.............................. Portfolio Transactions and Brokerage
18.............................. Description of the Trust
19.............................. Determination of Share Price
20.............................. None
21.............................. Distributor
22.............................. Investment Performance
23.............................. Financial Statements
<PAGE>
FOUNTAINHEAD SPECIAL VALUE FUND
Supplement Dated June 30, 1997
To Prospectus Dated December 23, 1996
The following condensed supplementary financial information for the
period ended April 30, 1997, is derived from the unaudited financial statements
of the Fund. The unaudited financial statements of the Fund are included in the
Fund's Semi-Annual Report to Shareholders.
Fountainhead Special Value Fund
Financial Highlights for the period December 31, 1996 (Commencement of
Operations) to Apirl 31, 1997 (Unaudited)
Selected Per Share Data
Net asset value,
begining of period $10.00
-----------
Income from investment
Operations
Net investment income 0.01
Net realized and
unrealized gain (loss) (0.14)
-----------
Total from investment operations (0.13)
-----------
Less Distributions
From net interest income 0.00
-----------
Net asset value,
end of period $9.86
===========
Total Return (3.98)%
Ratios and Supplemental Data
Net assets, end of period (000) $641
Ratio of expenses to
average net assets (b) 0.83%
Ratio of net investment income to
average net assets (b) 0.00%
Portfolio turnover rate 429.00%
Average commissions paid 0.02
(a) Annualized
(b) During the period December 31, 1996 to March 31, 1996 the advisor agreed to
limit the funds expenses to .75% of net assets, without this limitation the
funds expense ratio and interest income ratio would have been 1.00% and
(.01)%
The following should be read in conjunction with the section entitled
"General Information" on page 13 of the Prospectus.
As of June 6, 1997, Roger E. King, Robert E. Walsh and Jenswold,
King & Associates, Inc. Profit Sharing Plan may be deemed to control the
Fund as a result of their respective beneficial ownership of the shares
of the Fund.
<PAGE>
FOUNTAINHEAD SPECIAL VALUE FUND
PROSPECTUS December 23, 1996
c/o Jenswold, King & Associates, Inc.
Two Post Oak Central
1980 Post Oak Blvd., Suite 2400
Houston, Texas 77056-3898
For Information, Shareholder Services and Requests:
(800) 868-9535
Fountainhead Special Value Fund ("Fund") is a mutual fund whose
investment objective is to provide long term capital growth. The Fund's Advisor,
Jenswold, King & Associates, Inc., seeks to achieve the objective by investing
primarily in a broad range of equity securities believed by the Advisor to be
selling at attractive prices relative to their intrinsic value.
The Fund is "no-load," which means there are no sales charges or
commissions. In addition, there are no 12b-1 fees, distribution expenses or
deferred sales charges which are borne by the shareholders. The Fund is one of
the mutual funds comprising AmeriPrime Funds, an open-end management investment
company, and is 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 ("SEC") dated December 23, 1996, which is incorporated
herein by reference and can be obtained without charge by calling the Fund at
the phone number listed above. The SEC maintains a Web Site (http://www.sec.gov)
that contains the Statement of Additional Information, material incorporated by
reference, and other information regarding registrants that file electronically
with the SEC.
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.
ASA0204B-022197-2
<PAGE>
SUMMARY OF FUND EXPENSES
The expense information provided below 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. In addition, the Fund does not
have a 12b-1 Plan.
<TABLE>
<CAPTION>
Shareholder Transaction Expenses
<S> <C>
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 (after reimbursement)................................................................................ 0.68%
12b-1 Charges..........................................................................................................NONE
Other Expenses........................................................................................................0.32%
Total Fund Operating Expenses (after reimbursement)...................................................................1.00%
<FN>
* The Advisor has agreed to waive fees and reimburse expenses to limit total net
operating expenses for the Fund to not more than 1.00% of its average daily net
assets. Absent fee waivers and expense reimbursement, management fees would be
1.43% and the Fund estimates that total operating expenses would be 1.75%.
The tables above are provided to assist an investor in understanding the direct
and indirect expenss that an investor may incur as a shareholder in the Fund.
</FN>
</TABLE>
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
------ -------
$10 $32
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THE FUND
Fountainhead Special Value Fund ("Fund") was organized as a series of
AmeriPrime Funds, an Ohio business trust ("Trust"), on October 20, 1995, and
commenced operations on December 23, 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 Jenswold, King & Associates, Inc.
("Advisor").
INVESTMENT OBJECTIVE AND STRATEGIES
The investment objective of the Fund is to provide long term capital
growth. The Fund seeks to achieve the objective by investing primarily in a
broad range of equity securities which the Advisor believes to be selling at
attractive prices relative to their intrinsic value. It is anticipated that an
emphasis will be placed on domestic mid-cap equity securities (those with a
market capitalization between $500 million and $5 billion).
The Advisor selects portfolio securities on the basis of what the
Advisor considers to be the intrinsic value of each security. In determining
whether a specific security represents investment value, particular emphasis is
given to securities: 1) trading at a discount to the company's estimated private
market value (based on its projected level of cash flows, balance sheet
characteristics, future earnings, and payments made for similar companies in
mergers and acquisitions), 2) trading at the low end of the company's historic
fundamental valuation range (based on current financial ratios such as
price/cash flow, price/earnings and price/book value), or 3) trading at a
discount to the company's earnings growth rate. While it is anticipated that the
Fund will diversify its investments across a range of industries/sectors,
certain industries are likely to be overweighted compared to others because the
Advisor seeks the best investment values regardless of industry. The Advisor
retains the flexibility to invest in securities of various market
capitalizations.
The Advisor generally intends to stay fully invested (subject to
liquidity requirements and defensive purposes) in common 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 preferred stocks,
bonds, corporate debt 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 abnormal market or economic
conditions, the Fund may hold all or a portion of its assets in money market
instruments (including money market funds) 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.
If the Fund acquires securities of a money market fund, the shareholders of the
Fund will be subject to duplicative management fees.
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, you should be aware that the Advisor has no prior
experience in managing investment companies and that 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
<PAGE>
"Investment Policies and Techniques and Risk Considerations" for a more detailed
discussion of the Fund's investment practices.
HOW TO INVEST IN THE FUND
Shares of the Fund are sold on a continuous basis, and you may invest
any amount you choose, as often as you wish, subject to a minimum initial
investment of $5,000 ($2,000 for IRAs) and minimum subsequent investments of
$1,000. For corporate retirement plans, however, there is no minimum for
separate employee accounts.
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 Fountainhead Special Value Fund, and sent by mail or overnight
delivery to:
Fountainhead Special Value Fund
c/o American Data Services, Inc.
24 West Carver Street, 2nd Floor
Huntington, New York 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 800-868-9535 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: Fountainhead Special Value Fund
D.D.A. #483885570
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
<PAGE>
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 Fountainhead Special Value Fund and should be sent to the
address listed above. A bank wire should be sent as outlined above.
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 adviser 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.
By Mail - You may redeem any part of your account in the Fund at no
charge by mail. Your request should be addressed to:
Fountainhead Special Value Fund
c/o American Data Services, Inc.
24 W. Carver Street
Huntington, New York 11743
<PAGE>
"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
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) 868-9535. 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) 868-9535. 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 $2,000 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 adviser 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
<PAGE>
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
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 will not be subject to
<PAGE>
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 ("Tax Reform Act"), all distributions of net
short-term 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 advisers 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 Jenswold, King & Associates, Inc., Two Post Oak
Central, 1980 Post Oak Blvd., Suite 2400, Houston, Texas 77056-3898 ("Advisor")
to manage the Fund's investments. The Advisor is a Houston-based independent
investment advisor that provides value-oriented equity and balanced management
for both taxable and tax-exempt clients and currently manages approximately $650
million in assets. The Advisor is a Texas corporation controlled by Roger E.
King, the Chairman, President and majority shareholder of the Advisor. Mr. King
is primarily responsible for the day-to-day management of the Fund's portfolio.
Mr. King co-founded the firm in 1981 and has served as its president since 1986
and as its chairman since 1993. The Fund is authorized to pay the Advisor a fee
equal to an annual average rate of 1.43% of its average daily net assets. The
Advisor has agreed to waive management fees and reimburse expenses to limit
total net operating expenses for the Fund to not more than 0.75% of its average
daily net assets through March 31, 1997. Thereafter, the Advisor has agreed to
waive management fees and reimburse expenses to limit total net operating
expenses for the Fund to not more than 1.00% of its average daily net assets for
at least its first year of operations (through 1997).
<PAGE>
The Fund retains AmeriPrime Financial Services, Inc. ("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
Advisor 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 ("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
("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
Advisor.
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. The Adviser (not the Fund) may pay certain financial
institutions (which may include banks, securities dealers and other industry
professionals) a "servicing fee" for performing certain administrative servicing
functions for Fund shareholders to the extent these institutions are allowed to
do so by applicable statute, rule or regulation.
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.
<PAGE>
Equity Securities
Equity securities consist of common stock, preferred stock and common
stock equivalents (such as convertible preferred stock and convertible
debentures, rights and warrants) and investment companies which invest primarily
in the above. 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 at the time of
purchase in either rights or warrants. Equity securities also include common
stocks and common stock equivalents of domestic real estate investment trusts
and other companies which operate as real estate corporations or which have a
significant portion of their assets in real estate. The Fund will not acquire
any direct ownership of real estate.
The Fund may invest in foreign equity securities through the purchase
of American Depository Receipts (ADRs). 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. To the extent that
the Fund does invest in foreign securities, such investments may be subject to
special risks, such as changes in restrictions on foreign currency transactions
and rates of exchange, and changes in the administrations or economic and
monetary policies of foreign governments.
Fixed Income Securities
The Fund may invest in fixed income securities. 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
BBB or higher by Standard & Poor's Corporation, or Baa or higher by 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 <PAGE>
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.
Investment Techniques
The Fund may invest up to 5% of its net assets in repurchase agreements
fully collateralized by U.S. Government obligations, as well as reverse
repurchase agreements. The Fund may engage in short sales, but the percentage of
the Fund's net assets that may be used as collateral or segregated for short
sales is limited to 5%.
When Issued Securities and Forward Commitments - The Fund may
buy and sell securities on a when-issued or delayed delivery basis, with payment
and delivery taking place at a future date. The price and interest rate that
will be received on the securities are each fixed at the time the buyer enters
into the commitment. The Fund may enter into such forward commitments if they
hold, and maintain until the settlement date in a separate account at the Fund's
Custodian, cash or U.S. government securities in an amount sufficient to meet
the purchase price. The Fund will not invest more than 25% of its total assets
in forward commitments. Forward commitments involve a risk of loss if the value
of the security to be purchased declines prior to the settlement date. Any
change in value could increase fluctuations in the Fund's share price and yield.
Although the Fund will generally enter into forward commitments with the
intention of acquiring securities for its portfolio, the Fund may dispose of a
commitment prior to the settlement if the Advisor deems it appropriate to do so.
Loans of Portfolio Securities - The Fund may make short and
long term loans of its portfolio securities. Under the lending policy authorized
by the Board of Trustees and implemented by the Advisor in response to requests
of broker-dealers or institutional investors which the Advisor 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 102% 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.
General
The Fund may invest in mortgage related securities, invest in foreign
securities other than ADR's, and may buy and write put and call options and
futures on stock indices, provided the Fund's investment in each does not exceed
5% of its net assets.
<PAGE>
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. The Fund will, however, sell any
portfolio security (without regard to the length of time it has been held) when
the Advisor believes that changes in its price or underlying value, or general
economic or market conditions, warrant such action. It is anticipated that the
Fund will have a portfolio turnover rate of less than 100%.
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
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) Mid Cap Index, the Russell Mid Cap Index, or the S&P 500 Index.
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.
<PAGE>
The Advisor has been managing equity income accounts since 1982. The
performance of the accounts with investment objectives, policies and strategies
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
Russell Mid Cap Index. Roger E. King is responsible for the performance of the
accounts and is also responsible for the investment management of the Fund. As
of December 31, 1996, the assets in those accounts totaled approximately $650
million.
[chart showing growth of $10,000 investment from January 1, 1982 through
December 31, 1996, compared to the Russell Mid Cap Index]
* The Advisor's total returns by year were as follows: 1982 40.67%, 1983 22.95%,
1984 12.43%, 1985 28.60%, 1986 15.56%, 1987 -5.35%, 1988 27.96%, 1989 25.20%,
1990 -1.04%, 1991 36.86%, 1992 11.40%, 1993 6.50%, 1994 -8.35%, 1995 55.00%,
1996 12.42%. The Jenswold, King & Associates, Inc. performance is the
time-weighted, dollar-weighted average total return associated with a composite
of equity income accounts managed by Roger E. King, having objectives similar to
the Fund, and is unaudited. The composite does not include accounts with less
than $1,000,000 assets in or accounts under the Advisor's management for less
than one quarter, because the nature of those accounts make them inappropriate
for purposes of comparison. Performance figures reflected are net of management
fees and net of all expenses, including transaction costs and commissions.
Results include the reinvestment of dividends and capital gains.
The Russell Mid Cap 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 Russell Mid Cap Index
reflects the total return of securities comprising the Index with market
capitalizations ranging from $1 billion to $6 billion, including changes in
market prices as well as accrued investment income, which is presumed to be
reinvested. Performance figures for the Russell Mid Cap Index do not reflect
deduction of transaction costs or expenses, including management fees.
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, and availability of cash for
new investments. In addition, the managed accounts are not subject to
certain investment limitations, diversification requirements, and other
restrictions imposed by the Investment Company Act and the Internal
Revenue Code. The results for different periods may vary.
Investment Advisor Administrator
Jenswold, King and Associates, Inc. AmeriPrime Financial Services, Inc.
Two Post Oak Central 1793 Kingswood Drive, Suite 200
1980 Post Oak Blvd., Suite 2400 Southlake, Texas 76092
Houston, Texas 77056-3898
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 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.
<PAGE>
TABLE OF CONTENTS PAGE
SUMMARY OF FUND EXPENSES........................................... 2
Shareholder Transaction Expenses........................... 2
Annual Fund Operating Expenses............................ 2
THE FUND........................................................... 3
INVESTMENT OBJECTIVE AND STRATEGIES................................. 3
HOW TO INVEST IN THE FUND.......................................... 4
Initial Purchase.......................................... 4
By Mail........................................... 4
By Wire.......................................... 4
Additional Investments..................................... 5
Tax Sheltered Retirement Plans............................. 5
Other Purchase Information................................ 5
HOW TO REDEEM SHARES................................................ 5
By Mail.................................................... 6
By Telephone............................................... 6
Additional Information..................................... 6
SHARE PRICE CALCULATION............................................ 7
DIVIDENDS AND DISTRIBUTIONS........................................ 7
TAXES.............................................................. 8
OPERATION OF THE FUND............................................... 8
INVESTMENT POLICIES AND TECHNIQUES AND RISK CONSIDERATIONS......... 9
Equity Securities......................................... 10
Fixed Income Securities....................................10
Investment Techniques..................................... 11
General................................................... 11
GENERAL INFORMATION................................................ 12
Fundamental Policies...................................... 12
Portfolio Turnover........................................ 12
Shareholder Rights........................................ 12
PERFORMANCE INFORMATION............................................ 12
<PAGE>
FOUNTAINHEAD SPECIAL VALUE FUND
STATEMENT OF ADDITIONAL INFORMATION
June 30, 1997
This Statement of Additional Information is not a prospectus. It should
be read in conjunction with the Prospectus of Fountainhead Special Value Fund
dated December 23, 1996 and Supplement to Prospecuts dated June 30, 1997. 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- 800-868-9535.
<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............................................ 6
THE INVESTMENT ADVISOR............................................ 8
TRUSTEES AND OFFICERS............................................. 9
PORTFOLIO TRANSACTIONS AND BROKERAGE.............................. 10
DETERMINATION OF SHARE PRICE...................................... 11
INVESTMENT PERFORMANCE............................................ 11
CUSTODIAN......................................................... 12
TRANSFER AGENT.................................................... 12
ACCOUNTANTS....................................................... 12
DISTRIBUTOR....................................................... 12
FINANCIAL STATEMENTS.............................................. 12
<PAGE>
DESCRIPTION OF THE TRUST
Fountainhead Special 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 four series 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.
As of June 6, 1997, the following persons may be deemed to beneficially
own five percent (5%) or more of the Fund: Rene Drouin and Patricia Gallaher,
Co-Trustees, 1903 Big Canyon Drive, Austin, Texas 78746 -5.37%; Roger E. King,
1980 Post Oak Boulevard, Suite 2400, Houston, Texas - 11.11%; Servis Beulah IRA,
602 Hallie, Houston, Texas 77024 - 26.33% and Jenswold, King & Associates, Inc.
Profit Sharing Plan, Roger E. King and Robert E. Walsh, Co- Trustees, 1980 Post
Oak Boulevard, #2400, Houston, Texas 77056-3898 - 43.97%.
As of June 6, 1997, Roger E. King, Robert E. Walsh and Jenswold, King &
Associates, Inc. Profit Sharing Plan may be deemed to control the Fund as a
result of their beneficial ownership of shares of the Fund. As of June 6, 1997,
the officers and trustees as a group may be deemed to beneficially own 2.6% of
the Fund.
For 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
<PAGE>
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 rights or warrants.
B. Repurchase Agreements. 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 the 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, and the Fund will not
invest more than 5% of its net assets in repurchase agreements.
C. Reverse Repurchase Agreements. Reverse repurchase agreements involve
sales of portfolio securities by the Fund to member banks of the Federal Reserve
System or recognized securities dealers, concurrently with an agreement by the
Fund to repurchase the same securities at a later date at a fixed price, which
is generally equal to the original sales price plus interest. The Fund retains
record ownership and the right to receive interest and principal payments on the
portfolio security involved. The Fund's objective in such a transaction would be
to obtain funds to pursue additional investment opportunities whose yield would
exceed the cost of the reverse repurchase transaction. Generally, the use of
reverse repurchase agreements should reduce portfolio turnover and increase
yield.
In connection with each reverse repurchase agreement, the Fund
will direct its Custodian to place cash or U.S. government obligations in a
separate account in an amount equal to the repurchase price. In the event of
bankruptcy or other default by the purchaser, the Fund could experience both
delays in repurchasing the portfolio securities and losses.
D. Illiquid Securities. The portfolio of the Fund may contain illiquid
securities. Illiquid securities generally include securities which cannot be
disposed of promptly and in the ordinary course of business without taking a
reduced price. Securities may be illiquid due to contractual or legal
restrictions on resale or lack of a ready market. The following securities are
considered to be illiquid: repurchase agreements and reverse repurchase
agreements maturing in more than seven days, nonpublicly offered securities and
restricted securities. The Fund will not invest more than 5% of its net assets
in illiquid securities.
E. Mortgage-Related Securities. Mortgage-related securities include
securities representing interests in a pool of mortgages. These securities,
including securities issued by FNMA, GNMA and the Federal Home Loan Mortgage
Corporation, provide investors with payments consisting of both interest and
principal as the mortgages in the underlying mortgage pools are repaid. The Fund
will only invest in pools of mortgage loans assembled for sale to investors by
agencies or instrumentalities of the U.S. government and will limit its
investment to 5% of its net assets. Unscheduled or early payments on the
underlying mortgages may shorten the securities' effective maturities.
<PAGE>
Other types of securities representing interests in a pool of
mortgage loans are known as collateralized mortgage obligations (CMOs) and real
estate mortgage investment conduits (REMICs) and multi-class pass-throughs. CMOs
and REMICs are debt instruments collateralized by pools of mortgage loans or
other mortgage-backed securities. Multi-class pass-through securities are equity
interests in a trust composed of mortgage loans or other mortgage-backed
securities. Payments of principal and interest on underlying collateral provides
the funds to pay debt service on the CMO or REMIC or make scheduled
distributions on the multi-class pass-through securities. The Fund will only
invest in CMOs, REMICs and multi-class pass-through securities (collectively
"CMOs" unless the context indicates otherwise) issued by agencies or
instrumentalities of the U.S. government (such as the Federal Home Loan Mortgage
Corporation). Neither Fund will invest in "stripped" CMOs, which represent only
the income portion or the principal portion of the CMO.
CMOs are issued with a variety of classes or "tranches," which
have different maturities and are often retired in sequence. One or more
tranches of a CMO may have coupon rates which reset periodically at a specified
increment over an index such as the London Interbank Offered Rate ("LIBOR").
These "floating rate CMOs," typically are issued with lifetime "caps" on their
coupon rate, which means that there is a ceiling beyond which the coupon rate
may not be increased. The yield of some floating rate CMOs varies in excess of
the change in the index, which would cause the value of such CMOs to fluctuate
significantly once rates reach the cap.
REMICs, which have elected to be treated as such under the
Internal Revenue Code, are private entities formed for the purpose of holding a
fixed pool of mortgages secured by an interest in real property. REMICs are
similar to CMOs in that they issue multiple classes of securities. As with other
CMOs, the mortgages which collateralize the REMICs in which a Fund may invest
include mortgages backed by GNMA certificates or other mortgage pass-throughs
issued or guaranteed by the U.S. government, its agencies or instrumentalities.
The average life of securities representing interests in pools
of mortgage loans is likely to be substantially less than the original maturity
of the mortgage pools as a result of prepayments or foreclosures of such
mortgages. Prepayments are passed through to the registered holder with the
regular monthly payments of principal and interest, and have the effect of
reducing future payments. To the extent the mortgages underlying a security
representing an interest in a pool of mortgages are prepaid, the Fund may
experience a loss (if the price at which the respective security was acquired by
the Fund was at a premium over par, which represents the price at which the
security will be redeemed upon prepayment). In addition, prepayments of such
securities held by the Fund will reduce the share price of the Fund to the
extent the market value of the securities at the time of prepayment exceeds
their par value. Furthermore, the prices of mortgage-related securities can be
significantly affected by changes in interest rates. Prepayments may occur with
greater frequency in periods of declining mortgage rates because, among other
reasons, it may be possible for mortgagors to refinance their outstanding
mortgages at lower interest rates. In such periods, it is likely that any
prepayment proceeds would be reinvested by the Fund at lower rates of return.
F. Foreign Securities. The Fund may invest up to 5% of its net assets
at the time of purchase in foreign equity securities including common stock,
preferred stock and common stock equivalents issued by foreign companies, and
foreign fixed income securities. Foreign fixed income securities include
corporate debt obligations issued by foreign companies and debt obligations of
foreign governments or international organizations. This category may include
floating rate obligations, variable rate obligations, Yankee dollar obligations
(U.S. dollar denominated obligations issued by foreign companies and traded on
U.S. markets) and Eurodollar obligations (U.S. dollar denominated obligations
issued by foreign companies and traded on foreign markets).
<PAGE>
Foreign government obligations generally consist of debt
securities supported by national, state or provincial governments or similar
political units or governmental agencies. Such obligations may or may not be
backed by the national government's full faith and credit and general taxing
powers. Investments in foreign securities also include obligations issued by
international organizations. International organizations include entities
designated or supported by governmental entities to promote economic
reconstruction or development as well as international banking institutions and
related government agencies. Examples are the International Bank for
Reconstruction and Development (the World Bank), the European Coal and Steel
Community, the Asian Development Bank and the InterAmerican Development Bank. In
addition, investments in foreign securities may include debt securities
denominated in multinational currency units of an issuer (including
international issuers). An example of a multinational currency unit is the
European Currency Unit. A European Currency Unit represents specified amounts of
the currencies of certain member states of the European Economic Community, more
commonly known as the Common Market.
Purchases of foreign securities are usually made in foreign
currencies and, as a result, the Fund may incur currency conversion costs and
may be affected favorably or unfavorably by changes in the value of foreign
currencies against the U.S. dollar. In addition, there may be less information
publicly available about a foreign company then 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.
G. Option Transactions. Up to 5% of the Fund's net assets may be
invested in option transactions involving individual securities and market
indices. An option involves either (a) the right or the obligation to buy or
sell a specific instrument at a specific price until the expiration date of the
option, or (b) the right to receive payments or the obligation to make payments
representing the difference between the closing price of a market index and the
exercise price of the option expressed in dollars times a specified multiple
until the expiration date of the option. Options are sold (written) on
securities and market indices. The purchaser of an option on a security pays the
seller (the writer) a premium for the right granted but is not obligated to buy
or sell the underlying security. The purchaser of an option on a market index
pays the seller a premium for the right granted, and in return the seller of
such an option is obligated to make the payment. A writer of an option may
terminate the obligation prior to expiration of the option by making an
offsetting purchase of an identical option. Options are traded on organized
exchanges and in the over-the-counter market. Options on securities which the
Fund sells (writes) will be covered or secured, which means that it will own the
underlying security (for a call option); will segregate with the Custodian high
quality liquid debt obligations equal to the option exercise price (for a put
option); or (for an option on a stock index) will hold a portfolio of securities
substantially replicating the movement of the index (or, to the extent it does
not hold such a portfolio, will maintain a segregated account with the Custodian
of high quality liquid debt obligations equal to the market value of the option,
marked to market daily). When the Fund writes options, it may be required to
maintain a margin account, to pledge the underlying securities or U.S.
government obligations or to deposit liquid high quality debt obligations in a
separate account with the Custodian.
<PAGE>
The purchase and writing of options involves certain risks; for
example, the possible inability to effect closing transactions at favorable
prices and an appreciation limit on the securities set aside for settlement, as
well as (in the case of options on a stock index) exposure to an indeterminate
liability. The purchase of options limits the Fund's potential loss to the
amount of the premium paid and can afford the Fund the opportunity to profit
from favorable movements in the price of an underlying security to a greater
extent than if transactions were effected in the security directly. However, the
purchase of an option could result in the Fund losing a greater percentage of
its investment than if the transaction were effected directly. When the Fund
writes a covered call option, it will receive a premium, but it will give up the
opportunity to profit from a price increase in the underlying security above the
exercise price as long as its obligation as a writer continues, and it will
retain the risk of loss should the price of the security decline. When the Fund
writes a covered put option, it will receive a premium, but it will assume the
risk of loss should the price of the underlying security fall below the exercise
price. When the Fund writes a covered put option on a stock index, it will
assume the risk that the price of the index will fall below the exercise price,
in which case the Fund may be required to enter into a closing transaction at a
loss. An analogous risk would apply if the Fund writes a call option on a stock
index and the price of the index rises above the exercise price.
H. Hedging Transactions. The Fund may hedge all or a portion of its
portfolio investments through the use of options and futures contracts. The
objective of the hedging program is to protect a profit or offset a loss in a
portfolio security from future price erosion or to assure a definite price for a
security by acquiring the right or option to purchase or to sell a fixed amount
of the security at a future date. For example, in order to hedge against the
risk that the value of the Fund's portfolio securities may decline, the fund
might sell futures contracts on stock indices. When hedging of this character is
successful, any depreciation in the value of the hedged portfolio securities
will be substantially offset by an increase in the Fund's equity in the stock
index futures position.
There is no assurance that the objective of the hedging
program will be achieved, since the success of the program will depend on the
Advisor's ability to predict the future direction of the relevant security or
stock index, and incorrect predictions by the Advisor may have an adverse effect
on the Fund. In this regard, skills and techniques necessary to arrive at such
predictions are different from those needed to predict price changes in
individual stocks.
A stock index futures contract is a binding contractual
commitment which involves the payment or receipt of payments representing,
respectively, the loss or gain of a specified market index. Ordinarily, the Fund
would enter into stock index futures contracts to hedge its investments in
common stocks. Futures contracts are traded on exchanges licensed and regulated
by the Commodity Futures Trading Commission. The Fund will be subject to any
limitations imposed by the exchanges with respect to futures contracts trading
and positions. A clearing corporation associated with the particular exchange
assumes responsibility for all purchases and sales and guarantees delivery and
payment on the contracts. Although most futures contracts call for actual
delivery or acceptance of the underlying securities or currency, in most cases
the contracts are closed out before settlement date without the making or taking
of delivery. Closing out is accomplished by entering into an offsetting
transaction, which may result in a profit or a loss. There is no assurance that
the Fund will be able to close out a particular futures contract.
A hedging strategy involving options and futures contracts
entails some risks. For example, the total premium paid for an option may be
lost if the Fund does not exercise the option or futures contract, or the writer
does not perform his obligations. It is also possible that the futures contracts
selected by the Fund will not follow the price movement of the underlying stock
index. If this occurs, the hedging strategy may not be successful. Further, if
the Fund sells a stock index
<PAGE>
futures contract and is required to pay an amount measured by any increase in
the market index, it will be exposed to an indeterminate liability. In addition,
a liquid secondary market may not exist for any particular option or futures
contract at any specific time.
The Fund will incur transactional costs in connection with the
hedging program. When the Fund purchases or sells a futures contract, an amount
of cash and liquid assets will be deposited in a segregated account with the
Trust's Custodian to guarantee performance of the futures contract. The amount
of such deposits will depend upon the requirements of each exchange and broker
and will vary with each futures contract. Because open futures contract
positions are marked to market and gains and losses are settled on a daily
basis, the Fund may be required to deposit additional funds in such a segregated
account if it has incurred a net loss on its open futures contract positions on
any day.
The Trust has filed a supplemental notice of eligibility with
the Commodity Futures Trading Commission ("CFTC") to claim relief from
regulation as a commodity "pool" within the meaning of the CFTC's regulations.
In its filing, the Trust has represented that the Fund's transactions in futures
contracts will constitute bona fide hedging transactions within the meaning of
such regulations and that the Fund will enter into commitments which require as
deposits for initial margin for futures contracts no more than 5% of the fair
market value of its assets.
I. Short Sales. The Fund may sell a security short in anticipation of a
decline in the market value of the security. When the Fund engages in a short
sale, it sells a security which it does not own. To complete the transaction,
the Fund must borrow the security in order to deliver it to the buyer. The Fund
must replace the borrowed security by purchasing it at the market price at the
time of replacement, which may be more or less than the price at which the Fund
sold the security. The Fund will incur a loss as a result of the short sale if
the price of the security increases between the date of the short sale and the
date on which the Fund replaces the borrowed security. The Fund will realize a
profit if the security declines in price between those dates.
In connection with its short sales, the Fund will be required
to maintain a segregated account with its Custodian of cash or high grade liquid
assets equal to the market value of the securities sold less any collateral
deposited with its broker. The Fund will limit its short sales so that no more
than 5% of its net assets (less all its liabilities other than obligations under
the short sales) will be deposited as collateral and allocated to the segregated
account. However, the segregated account and deposits will not necessarily limit
the Fund's potential loss on a short sale, which is unlimited. The Fund's policy
with respect to short sales is fundamental, although the particular practices
followed with respect to short sales, such as the percentage of the Fund's
assets which may be deposited as collateral or allocated to the segregated
account, are not deemed fundamental and may be changed by the Board of Trustees
without the vote of the Fund's shareholders.
J. Corporate Debt Securities. Corporate debt securities are bonds or
notes issued by corporations and other business organizations, including
business trusts, in order to finance their credit needs. Corporate debt
securities include commercial paper which consist of short term (usually from
one to two hundred seventy days) unsecured promissory notes issued by
corporations in order to finance their current operations.
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 <PAGE>
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 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, provided that the Fund has an asset coverage of
300% for all borrowings and repurchase commitments of the Fund pursuant to
reverse repurchase transactions.
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 are
secured by or represent interests in real estate. This limitation does not
preclude the Fund from investing in mortgage-related securities or investing in
companies engaged in the real estate business or have a significant portion of
their assets in real estate (including real estate investment trusts).
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 nonpublicly 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.
<PAGE>
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 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
(including reverse repurchase agreements) representing more than 5% of its total
assets are outstanding. The Fund will not invest more than 5% of its net assets
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, futures contracts, short sales and other permitted
investments and techniques.
iv. Short Sales. The Fund will not effect short sales of securities unless
it owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short. 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 will
not invest more than 5% of its net assets in repurchase agreements. vii.
Illiquid Investments. The Fund will not invest more than 5% of its net assets in
securities for which there are legal or contractual restrictions on resale and
other illiquid securities.
THE INVESTMENT ADVISOR
<PAGE>
The Fund's investment advisor is Jenswold, King & Associates, Inc., Two
Post Oak Central, 1980 Post Oak Boulevard, Suite 2400, Houston, Texas
77056-3898. Roger E. King may be deemed to be a controlling person of the
Advisor due to his ownership of a majority of its shares.
Under the terms of the management agreement (the "Agreement"), the
Advisor manages the Fund's investments subject to approval of the Board of
Trustees and pays all of the expenses of the Fund except brokerage, taxes,
interest, fees and expenses of the non-interested person trustees and
extraordinary expenses. As compensation for its management services and
agreement to pay the Fund's expenses, the Fund is obligated to pay the Advisor a
fee computed and accrued daily and paid monthly at an annual rate of 1.75% 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 "Fountainhead" 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
"Fountainhead" 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.
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, as defined in
the Investment Company Act of 1940, is indicated by an asterisk.
<TABLE>
<CAPTION>
===================================================================================================================================
Name, Age and Address Position Principal Occupations During Past 5 Years
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
* Kenneth D. Trumpfheller President and Trustee President, Treasurer and Secretary of AmeriPrime
Age: 38 Financial Services, Inc., the Fund's administrator, and
1793 Kingswood Drive AmeriPrime Financial Securities, Inc., the Fund's
Suite 200 distributor. Prior to December, 1994, a senior client
Southlake, Texas 76092 executive with SEI Financial Services.
<PAGE>
- -----------------------------------------------------------------------------------------------------------------------------------
Julie A. Feleo Secretary, Treasurer Secretary, Treasurer and Chief Financial Officer of
Age: 30 AmeriPrime Financial Services, Inc. and AmeriPrime
1793 Kingswood Drive Financial Securities, Inc.; Fund Reporting Analyst at
Suite 200 Fidelity Investments from 1993 to 1997; Fund
Southlake, Texas 76092 Accounting Analyst at Fidelity Investments in 1993.
Prior to 1993, Accounting Manager at Windows
Presentation Manager Association.
- -----------------------------------------------------------------------------------------------------------------------------------
Steve L. Cobb Trustee President of Clare Energy, Inc., oil and gas exploration
Age: 39 company; International Marketing Manager of Carbo
2001 Indianwood Avenue Ceramics Inc., oil field manufacturing/supply company;
Broken Arrow, OK 74012 President, Chandler Engineering Company, L.L.C.
- -----------------------------------------------------------------------------------------------------------------------------------
Gary E. Hippenstiel Trustee President and Director of Heritage Trust Company;
Age: 49 Director, Vice President and Chief Investment Officer of
600 Jefferson Street Legacy Trust Company from 1994-1995; Vice President
Houston, Texas 70002 and Manager of Investments of Kanaly Trust Company
from 1988 to 1992.
===================================================================================================================================
The compensation paid to the Trustees of the Trust for the fiscal year
ended October 31, 1996 is set forth in the following table. Trustee fees are
Trust expenses and each series of the Trust pays a portion of the Trustee fees.
======================================================================================
Aggregate Total Compensation
Compensation from Trust (the Trust is
Name from Trust not in a Fund Complex)
- --------------------------------------------------------------------------------------
Kenneth D. Trumpfheller 0 0
- --------------------------------------------------------------------------------------
Steve L. Cobb $4,000 $4,000
- --------------------------------------------------------------------------------------
Gary E. Hippenstiel $4,000 $4,000
======================================================================================
</TABLE>
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.
<PAGE>
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.
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 for the period indicated 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
<PAGE>
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
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, safekeeps 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, 1997. McCurdy & Associates performs an
annual audit of the Fund's financial statements and provides financial, tax and
accounting consulting services as requested.
<PAGE>
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.
FINANCIAL STATEMENTS
The financial statements and independent auditors' report required to
be included in this Statement of Additional Information are incorporated herein
by reference to the Fund's Semi-Annual Report to Shareholders for the period
ended April 30, 1997. The Funds will provide the SemiAnnual Report without
charge at written request or request by telephone.
<PAGE>
AmeriPrime Funds
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements for the Fountainhead Special Value Fund
Included in Part A:
(1) Financial Highlights from Commencement of Operations through April
30, 1997.
Included in Part B: The following documents are
incorporated by reference to AmeriPrime Funds 1997 Semi-Annual Report to
Shareholders.
(1) Report of Independent Public Accountant.
(2) Statement of Assets and Liabilities as of April 30, 1997.
(3) Unaudited Schedule of Investments - April 30, 1997.
(4) Unaudited Statement of Assets and Liabilities - April 30, 1997.
(5) Unaudited Statement of Operations for the period from
Commencement of Operations through April 30, 1997.
(6) Unaudited Statement of Changes in Net Assets
for the period from Commencement
Operations through April 30, 1997.
(7) Unaudited Financial Highlights for the period from Commencement
of Operations through April 30, 1997.
(8) Notes to Financial Statements.
(1) (i) Copy of Registrant's Declaration of
Trust, which was filed as an Exhibit to
Registrant's Registration Statement, is
hereby incorporated by reference.
(ii) Copy of Amendment No. 1 to Registrant's
Declaration of Trust, which was filed as
an Exhibit to Registrant's Pre-Effective
Amendment No. 1, is hereby incorporated
by reference.
(iii) Copy of Amendment No. 2 to Registrant's
Declaration of Trust, which was
filed as an Exhibit to
Registrant's Post-Effective Amendment No.
1, is hereby incorporated by reference.
(iv) Copy of Amendment No. 3 to Registrant's
Declaration of Trust,which was filed as
an Exhibit to Registrant's Post-Effective
Amendment No. 4, is hereby incorporated
by reference.
(v) Copy of Amendment No. 4 to Registrant's
Declaration of Trust, which was filed as
an Exhibit to Registrant's Post-Effective
{^r} (vi) Copy of Amendment No. 5 and Amendment No.
6 to Registrant's Declaration of Trust is
filed herewith.Amendment No. 4, is hereby
incorporated by reference.{/r}
(2) Copy of Registrant's By-Laws, which was
filed as an Exhibit to Registrant's
Registration Statement, is hereby
incorporated by reference.
(3) Voting Trust Agreements - None.
(4) Specimen of Share Certificates - None.
(5) (i) Copy of Registrant's Management
Agreement with Carl Domino Associates, L.P.,
Adviser to Carl Domino Equity Income ] Fund,
which was filed as an Exhibit to
Registrant's Pre-Effective Amendment No. 1,
is hereby incorporated by reference.
{^r} -1-{^/r}
<PAGE>
(ii) Copy of Registrant's Management Agreement
with Jenswold, King & Associates, Adviser
to Fountainhead Special Value Fund,{^} which
was filed as an exhibibt to Registrants Post
effective Amendment No. 8, are hereby icorpo-
rated by refence.{^/r}
(iii) Copy of Registrant's Management Agreement
with Advanced Investment Technology, Inc.,
Adviser to AIT Vision U.S.Equity Portfolio,
which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 6, is hereby
incorporated by reference.
(iv) Copy of Registrant's Management Agreement with
GLOBALT Inc., Adviser to GLOBALT Growth Fund,
which was filed as an Exhibit to Registrant's
Pre-Effective Amendment No. 1, is
hereby incorporated by reference.
(v) Copy of Registrant's Management Agreement with
Newport Investment Advisors, Inc., Adviser to
the MAXIM Contrarian Fund, which was filed as
an Exhibit to Registrant's Post-Effective
Amendment No. 2, is hereby incorporated by
reference.
(vi) Copy of Registrant's Management
Agreement with IMS Capital
Management, Inc., Adviser to the IMS Capital
Value Fund, which was filed as an Exhibit
to Registrant's Post-Effective Amendment
No. 2, is hereby incorporated by reference.
(vii) Copy of Registrant'sManagement Agreement
with Commonwealth Advisors, Inc., Adviser
toFlorida Street Bond Fund and
Florida Street Growth Fund,
{^} which was filed as an Exhibit
to Registrant's Post-Effective Amendment
No. 8, is hereby incorporated by reference
{/r}
(viii) Copy of Registrant's Management Agreement
with Corbin & Company, Adviser to Corbin
Small-Cap Fund, {^} which was filed as an
Exhibit to Registrant's Post-Effective
Amendment No. 8, is hereby,
incorporated by reference{/r}
(ix) Copy of Registrant's proposed Management
Agreement with Vuong Asset Management
Company, LLC, Adviser to MAI Enhanced Index
Fund, MAI Growth & Income Fund, MAI
Aggressive Growth Fund, MAI High-Yield Income
Fund, MAI Capital Appreciation Fund and MAI
Global Equity Fund (the "MAI Family of
Funds"){^} which was filed as an
Exhibit to Registrant's Post-Effective
Amendment No. 8, is hereby,
incorporated by reference{/r}
(6) Copy of Registrant's Amended and Restated
Underwriting Agreement with AmeriPrime
Financial Securities, Inc.,{^}
which was filed as an
Exhibit to Registrant's Post-Effective
Amendment No. 8, is hereby,
incorporated by reference{/r}
(7) Bonus, Profit Sharing, Pension or Similar
Contracts for the benefit of
Directors or Officers - None.
{^r} -2-{^/r}
<PAGE>
(8) {r} (i) {/r}Copy of Registrant's
Agreement with the Custodian, Star Bank,
N.A., which was filed as an Exhibit to
Registrant's Pre-Effective Amendment No.
1, is hereby incorporated by reference.
{r} (ii)Copy of Registrant's Appendix B to
the Agreement with the Custodian,
Star Bank, N.A., {r}Exhibit to
Registrant's Pre-Effective Amendment No.
8, is hereby incorporated by reference.
{/r}
(9) Copy of Registrant's Agreement with the
Administrator, AmeriPrime Financial
Services, Inc., {r}which was filed as an
Exhibit to Registrant's Pre-Effective
Amendment No. 8, is hereby incorporated by
reference.{/r}
(10) Opinion and Consent of Brown, Cummins
& Brown Co., L.P.A. is filed herewith.
(11) Consent of independent public accountants
- None.
(12) Financial Statements Omitted from
Item 23 - None.
(13) Copy of Letter of Initial Stockholders,
which was filed as an Exhibit to
Registrant's Pre-Effective Amendment No. 1,
is hereby incorporated by reference.
(14) Model Plan used in Establishment of any
Retirement Plan - None.
(15) (i) Copy of Registrant's Rule 12b-1
Distribution Plan for The
MAXIM Contrarian Fund, which was
filed as an Exhibit to the
Registrant's Post-Effective
Amendment No. 1, is hereby
incorporated by reference.
(ii) Copy of Registrant's Rule 12b-1
Service Agreement for The
MAXIM Contrarian Fund, which was
filed as an Exhibit to
Registrant's Post-Effective
Amendment No. 1, is hereby
incorporated by reference.
(16) Schedule for Computation of Each Performance
Quotation - None.
(17) Financial Data Schedule - None.
(18) Rule 18f-3 Plan - None.
(19) (i) Power of Attorney for Registrant and
Certificate with respect, thereto,
which were filed as an Exhibit to
Registrant's Post-Effective
Amendment No. 5, are hereby
incorporated by reference.
{^r} -3-{^/r}
<PAGE>
(ii) Powers of Attorney for Trustees and
Officers {^r}which were filed
as an Exhibit to Registrant's Post-
Effective Amendment No. 8, are
hereby incorporated by reference.
{/^r}
{^r)(iii) Power of Attorney for the Treasurer
of the Trust is filed herewith.{^/r)
Item 25. Persons Controlled by or Under Common Control with the
Registrant (As of March 1, 1997
The Carl Domino Associates, L.P., Profit Sharing Trust may be
deemed to control the Carl Domino Equity Income Fund, Roger E. King,
{^r} Robert E. Walsh and the Jenswold, King & Associates, Inc.{^/r)
Profit Sharing Plan may be deemed to control the Fountainhead Special Value
Fund, and Cheryl and Kenneth Holeski may be deemed to control The MAXIM
Contrarian Fund, as a result of their respective beneficial ownership of those
Funds.
Item 26. Number of Holders of Securities {^r)(as of May 30, 1997){^/r}
- -------- ----------------------------------------------------
Title of Class Number of Record Holders
{^r)Carl Domino Equity Income Fund 54
Fountainhead Special Value Fund 34
AIT Vision U.S. Equity Portfolio 28
GLOBALT Growth Fund 53
The MAXIM Contrarian Fund 42
IMS Capital Value Fund 249
{^r}Florida Street Income Fund 0
{^r}Florida Street Equity Fund 0
Corbin Small-Cap Value Fund 0
{^r}MAI Enhanced Index Fund 0
MAI Growth and Income Fund 0
MAI Aggressive Growth Fund 0
MAI High-Yield Income Fund 0
MAI Capital Appreciation Fund 0
MAI Global Equity Fund 0
Item 27. Indemnification
(a) Article VI of the Registrant's Declaration of Trust
provides for indemnification of officers and Trustees
as follows:
Section 6.4 Indemnification of Trustees,
Officers, etc. Subject to and except as
otherwise provided in the Securities Act of
1933, as amended, and the 1940 Act,
the Trust shall
{^r} -4-{^/r}
<PAGE>
indemnify each of its Trustees and officers (including
persons who serve at the Trust's request as directors,
officers or trustees of another organization in which the
Trust has any interest as a shareholder, creditor or
otherwise (hereinafter referred to as a "Covered Person")
against all liabilities,
including but not limited to amounts paid in
satisfaction of judgments, in compromise or
as fines and penalties, and expenses,
including reasonable accountants' and
counsel fees, incurred by any Covered Person
in connection with the defense or
disposition of any action, suit or other
proceeding, whether civil or criminal,
before any court or administrative or
legislative body, in which such Covered
Person may be or may have been involved as a
party or otherwise or with which such person
may be or may have been threatened, while in
office or thereafter, by reason of being or
having been such a Trustee or officer,
director or trustee, and except that no
Covered Person shall be indemnified against
any liability to the Trust or its
Shareholders to which such Covered Person
would otherwise be subject by reason of
willful misfeasance, bad faith, gross
negligence or reckless disregard of the
duties involved in the conduct of such
Covered Person's office.
Section 6.5 Advances of Expenses.
The Trust shall advance attorneys' fees or
other expenses incurred by a Covered Person
in defending a proceeding to the full extent
permitted by the Securities Act of 1933, as
amended, the 1940 Act, and Ohio Revised Code
Chapter 1707, as amended. In the event any
of these laws conflict with Ohio Revised
Code Section 1701.13(E), as amended, these
laws, and not Ohio Revised Code Section
1701.13(E), shall govern.
Section 6.6 Indemnification Not
Exclusive, etc. The right of indemnification
provided by this Article VI shall not be
exclusive of or affect any other rights to
which any such Covered Person may be
entitled. As used in this Article VI,
"Covered Person" shall include such person's
heirs, executors and administrators. Nothing
contained in this article shall affect any
rights to indemnification to which personnel
of the Trust, other than Trustees and
officers, and other persons may be entitled
by contract or otherwise under law, nor the
power of the Trust to purchase and maintain
liability insurance on behalf of any such
person.
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<PAGE>
The Registrant may not pay for insurance which
protects the Trustees and officers against
liabilities rising from action involving willful
misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of
their offices.
(b) The Registrant may maintain a standard mutual
fund and investment advisory professional and
directors and officers liability policy. The policy,
if maintained, would provide coverage to the
Registrant, its Trustees and officers, and could
cover its Advisers, among others.Coverage under
the policy would include losses by reason of any act,
error, omission, misstatement, misleading statement,
neglect or breach of duty. (c) Insofar as
indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to
trustees, officers and controlling persons of the
Registrant pursuant to the provisions of Ohio law and
the Agreement and Declaration of the Registrant or
the By-Laws of the Registrant, or otherwise,
the Registrant has been advised that in the opinion
of the Securities and Exchange Commission such
indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against
such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a trustee,
officer or controlling person of the Trust in the
successful defense of any action, suit
or proceeding) is asserted by such trustee, officer
or controlling person in connection with the
securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question
whether such indemnification by it is against public
policy as expressed in the Act and will be governed
by the final adjudication of such issue.
Item 28. Business and Other Connections of Investment Adviser
A. Carl Domino Associates, L.P., 580 Village Boulevard,
Suite 225, West Palm Beach, Florida 33409, ("CDA"),
adviser to the Carl Domino Equity Income Fund, is a
registered investment adviser.
(1) CDA has engaged in no other business during
the past two fiscal years.
(2) The following list sets forth other
substantial business activities of the
partners and officers of CDA during the past
two years.
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(a) Penn Independent Corp., a partner in
CDA, is an insurance holding company
that operates a premium finance
company, a surplus lines insurance
company and a wholesale insurance
agency.
(b) James E. Heerin, Jr., an officer of
CDA, is vice president and general
counsel of Penn Independent Corp.
and an officer and director
of Shrimp Culture II, Inc., both at
420 South York Road, Hatboro, PA
19040. Shrimp Culture II, Inc.
raises and sells shrimp.
(c) Lawrence Katz, a partner in CDA, is
an orthopedic surgeon in private
practice.
(d) Saltzman Partners, a partner in CDA,
is a limited partnership that
invests in companies and businesses.
(e) Cango Inversiones, SA, a partner in
CDA, is a foreign business entity
that invests in U.S. companies and
businesses.
B. Jenswold, King & Associates, Inc., 1980 Post Oak
Boulevard, Suite 2400, Houston, Texas 77056-3898
("JKA"), adviser to the Fountainhead Special Value
Fund, is a registered investment adviser.
(1) JKA has engaged in no other business during
the past two fiscal years.
(2) The following list sets forth other
substantial business activities of the
directors and officers of JKA during the
past two years.
(a) John Servis, a director of JKA, is a
licensed real estate broker.
C. Advanced Investment Technology, Inc., 311 Park Place
Boulevard, Suite 250, Clearwater, Florida 34619
("AIT"), adviser to AIT Vision U.S. Equity Portfolio,
is a registered investment adviser.
(1) AIT has engaged in no other business during
the past two fiscal years.
(2) The following list sets forth other
substantial business activities of the
directors and officers of AIT during the
past two fiscal years.
(a) Dean S. Barr, director and the CEO
of AIT,was the managing director of
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<PAGE>
LBS Capital Management, Inc.,
311 Park Place Blvd.,
Clearwater, Florida from 1989-1996.
(b) Mani Ganesh, a director and the vice
president of AIT, was the vice
president of LBS Capital Management,
Inc. from 1989-1996.
(c) Scott P. Mason, a director of AIT is
also a professor at Harvard
University.
(d) Raymond L. Killian, a director of
AIT and the chief executive officer
of Investment Technology Group,
Inc., 900 3rd Avenue, New York, New
York.
(e) David C. Cushing, a director of AIT
ands registered representative of
Investment Technology Group, Inc.
(f) Lisa A. Sloan, chief operating
officer of AIT was director of
operations of LBS Capital
Management, Inc., 311 Park Place
Blvd., Suite 330, Clearwater,
Florida. From 1995-1996 she was a
technical controller with Salomon
Brothers, Inc., 8800 Hidden River
Parkway, Tampa, Florida.
D. GLOBALT, Inc., 3060 Peachtree Road, N.W., One
Buckhead Plaza, Suite 225, Atlanta, Georgia 30305
("GLOBALT"), adviser to GLOBALT Growth Fund, is a
registered investment adviser.
(1) GLOBALT has engaged in no other business
during the past two fiscal years.
(2) The following list sets forth other
substantial business activities of the
officers and directors of GLOBALT during the
past two years.
(a) Gregory S. Paulette, an officer of
GLOBALT,is the president of GLOBALT
Capital Management, a division of
GLOBALT.
E. Newport Investment Advisors, Inc., 20600 Chagrin
Boulevard, Suite 1020, Shaker Heights, Ohio 44122
("Newport"), adviser to The MAXIM Contrarian Fund, is
a registered investment adviser.
(1) Newport has engaged in no other business
during the past two fiscal years.
(2) The following list sets forth other
substantial business activities of the
officers and directors of Newport during the
past two years.
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<PAGE>
(a) Kenneth Holeski, president of
Newport is the vice president of
Newport Evaluation Services, Inc., a
fiduciary consultingbusiness at
20600 Chagrin Boulevard, Shaker
Heights, Ohio 44122, and a
registered representative of WRP
Investments, Inc., 4407 Belmont
Avenue, Youngstown, Ohio 44505, a
registered broker/dealer.
(b) Donn M. Goodman, vice president of
Newport, is the president of Newport
Evaluation Services, Inc.
F. IMS Capital Management, Inc., 10159 S.E. Sunnyside
Road, Suite 330, Portland, Oregon 97015, ("IMS"),
Adviser to the IMS Capital Value Fund, is a
registered investment adviser.
(1) IMS has engaged in no other business during
the past two fiscal years.
(2) The following list sets forth other
substantial business activities of the
directors and officers of IMS during the
past two years - None.
G. CommonWealth Advisors, Inc., 929 Government Street,
Baton Rouge, Louisiana 70802, ("CommonWealth"),
Adviser to the{^r} Florida Street {^/r}Bond Fund and
the {^r}Floria Street {^/r}Growth Fund, is a
registered investment advisor.
(1) CommonWealth has engaged in no other
business during the past two fiscal years.
(2) The following list sets forth other
substantial business activities of the
directors and officers of CommonWealth
during the past two years.
(a) Walter A. Morales, President/Chief
Investment Officer of CommonWealth
was the Director of an insurance/
broadcasting corporation, Guaranty
Corporation, 929 Government Street,
Baton Rouge, Louisiana 70802 from
August 1994 to February 1996.
From September 1994 through the
present, a registered representative
of a Broker/Dealer company,
Securities Service Network,
2225 Peters Road, Knoxville,
Knoxville, Tennessee 37923.
Beginning August 1995 through the
present, an instructor at the
University of Southwestern Louisiana
in Lafayette, Louisiana.
H. Corbin & Company, 320 S. University Drive, Suite 406,
Fort Worth, Texas 76107, ("Corbin"), Adviser to the
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<PAGE>
Corbin Small-Cap Value Fund, is a registered
investment adviser.
(1) Corbin has engaged in no other business
during the past two fiscal years.
(2) The following list sets forth other
substantial business activities of the
directors and officers of Corbin during the
past two years.
(a) Barbara E. Shields, Vice President
for Legal Affairs of Corbin, was the
Vice President and a trust officer
for Central Bank & Trust, P.O. Box
2138, Fort Worth, Texas from June
1994 to December 1995.
(b) Jeffrey D. Ressetar, the Chief
Financial Officer of Corbin, was a
securities analyst/operations
manager for a private foundation,
the William C. Conner Educational
Fund, at Texas Christian University
in Fort Worth, Texas from June 1995
to December 1995.
{^r} I. Vuong Asset Management Company, LLC, 6575 West Loop
South, Suite 110, Houston, Texas 77401, ("VAMCO"),
Adviser to the MAI Family of Funds, is a registereed
investment adviser.
(1) VAMCO has engaged in no other business during the
past two fiscal years.
(2) The following list sets forth substantial
business activities of the directors and officers
of VAMCO during the past two years.
(a) Qui Tu Vuong, the Chief Investment
Officer and head of Equity Asset Manage-
ment of VAMCO, is the Chief Executive
Officer of Vuong & Co., LLC, a holding
company at 6575 West Loop South #110,
Bellaire, Texas 77401; and Sales Manager
/Equities Regulation Representative of
Omni Financial Group, LLC, a Securities
brokerage company at 6575 West Loop South
#110, Bellaire, Texas 77401; and
President of Oishiicorp, Inc.,
an investment advising corporation at
6575 West Loop South #110, Bellaire,
Texas 77401; and Managing General
Partner of Sigma Delta Capital
Appreciation Funds, LP, an investment
company at 6575 West Loop South #110,
Bellaire, Texas 77401; and President of
Premier Capital Management and Consulting
Group, Inc., a financial consulting
corporation at 6575 West Loop South #170
Bellaire, Texas 77401; and from August
1992 through February, 1996, he was a
registered representative of Securities
America, Inc., a securities brokerage
{^/r}
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<PAGE>
corporation at 6575 West Loop South #170
Bellaire, Texas 77401.
(b) Quyen Ngoc Vuong, President, Chairman
and Chief Financial Officer of VAMCO,
is the Manager of Vuong & Company, LLC,
and Manager of Omni Financial Group,LLC.
(c) Canh Viet Le, Manager of VAMCO, is the
Manager of Vuong and Company, LLC, and was
Co-Founder and Chief Financial Officer of
Tribe Computer Works, a manufacturing
network in Alameda, California from April
1990 through January, 1996.
Item 29. Principal Underwriters
A. AmeriPrime Financial Securities, Inc., is the
Registrant's principal underwriter. Kenneth D.
Trumpfheller, 1793 Kingswood Drive, Suite 200,
Southlake, Texas 76092, is the President, Secretary
and Treasurer of the underwriter and the President
and a Trustee of the Registrant.
{^r} B. Omni Financial Group, LLC ("OMNI") acts as
co-distributor, along with AmeriPrime Financial
Securities, Inc., of the MAI Family of Funds. Qui T.
Vuong, Quyen N. Vuong and Diep N. Vuong, each whose
principal business address is 6575 West Loop South,
Suite 125, Bellaire, Texas 77401, are the managers of
OMNI, hold no offices or position with the
Registrant.{^/r}
Item 30. Location of Accounts and Records
Accounts, books and other documents required to be maintained
by Section 31(a) of the Investment Company Act of 1940 and the
Rules promulgated thereunder will be maintained by the
Registrant at 1793 Kingswood Drive, Suite 200, Southlake,
Texas 76092 and/or by the Registrant's Custodian, Star Bank,
N.A., 425 Walnut Street, Cincinnati, Ohio 45202, and/or
transfer and shareholder service agent, American Data
Services, Inc., Hauppauge Corporate Center, 150 Motor Parkway,
Hauppauge, New York 11760.
Item 31. Management Services Not Discussed in Parts A or B
None.
Item 32. Undertakings
(a) Not Applicable.
(b) The Registrant hereby undertakes to furnish each
person to whom a prospectus is delivered with a copy
of the Registrant's latest annual report to
shareholders, upon request and without charge.
(c) The Registrant hereby undertakes to file a Post-
Effective Amendment, using financial statements which
need not be certified, within four to six months from
the effective date of the Fountainhead Special Value
Fund registration.
(d) The Registrant hereby undertakes to file a Post-
Effective Amendment, using financial statements which
need not be certified, within four to six months from
the effective date of the {^r}Florida Street {^/r}
Growth Fund, the {^r}Florida Street {^/r} Bond Fund,
and the Corbin Small-Cap Value Fund registration.
<PAGE>
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<PAGE>
{^r} (e) The Registrant hereby undertakes to file a Post-
Effective Amendment, using financial statements which
need not be certified, within four to six months from
the effective date of the MAI Family of Funds
registration.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Cincinnati, State of Ohio, on the 19 day of June,
1997.
AmeriPrime Funds
By:
Donald S. Mendelsohn,
Attorney-in-Fact
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Kenneth D. Trumpfheller,
President and Trustee By:_________________________
Donald S. Mendelsohn,
Julie A. Feleo, Treasurer Attorney-in-Fact
Steve L. Cobb, Trustee June 30, 1997
Gary E. Hippenstiel, Trustee
EXHIBIT INDEX
EXHIBIT
1. Opinion of Brown, Cummins & Brown Co., L.P.A.................EX-99.B10
<PAGE>
BROWN, CUMMINS & BROWN CO., L.P.A.
ATTORNEYS AND COUNSELORS AT LAW
3500 CAREW TOWER
J. W. BROWN (1911-1995) 441 VINE STREET
JAMES R. CUMMINS CINCINNATI, OHIO 45202
ROBERT S BROWN TELEPHONE (513) 381-2121 OF COUNSEL
DONALD S. MENDELSOHN TELECOPIER (513) 381-2125 GILBERT BETTMAN
LYNNE SKILKEN
AMY G. APPLEGATE
KATHRYN KNUE PRZYWARA
MELANIE S. CORWIN
JOANN M. STRASSER
June 30, 1997
AmeriPrime Funds
1793 Kingswood Drive, Suite 200
Southlake, Texas 76092
Gentlemen:
This letter is in response to your request for our opinion in
connection with the filing of Post-Effective Amendment No. 9 of AmeriPrime Funds
(the "Trust").
We have examined a copy of the Trust's Agreement and Declaration of
Trust, the Trust's By-Laws, the Trust's record of the various actions by the
Trustees thereof, and all such agreements, certificates of public officials,
certificates of officers and representatives of the Trust and others, and such
other documents, papers, statutes and authorities as we deem necessary to form
the basis of the opinion hereinafter expressed. We have assumed the genuineness
of the signatures and the conformity to original documents of the copies of such
documents supplied to us as original or photostat copies.
Based upon the foregoing, we are of the opinion that, after
registration is effective for purposes of federal and applicable state
securities laws, the shares of each series of the Trust, if issued in accordance
with the then current Prospectus and Statement of Additional Information of the
Trust, will be legally issued, fully paid and non-assessable. Post-Effective
Amendment No. 9 does not contain any disclosure which would render it ineligible
to become effective pursuant to Rule 485(b).
We herewith give you our permission to file this opinion with the
Securities and Exchange Commission as an exhibit to Post-Effective Amendment No.
9 referred to above.
Very truly yours,
BROWN, CUMMINS & BROWN CO., L.P.A.
BCB:ama
<PAGE>
