CORNERSTONE MVP FUND
PROSPECTUS
NOVEMBER 1, 1999
INVESTMENT OBJECTIVE:
Long term capital appreciation
The Fund's investment advisor, Cornerstone Investment
Management, LLC, selects stocks that it believes offer
superior prospects for growth and are reasonably valued.
The advisor screens companies for "MVP" characteristics: Momentum
Valuation
Performance
132 West Main Street
Aspen, Colorado 81611
(877) 687-7859
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
9474 8/16/99
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TABLE OF CONTENTS
PAGE
ABOUT THE FUND.................................................................1
FEES AND EXPENSES OF INVESTING IN THE FUND.....................................2
HOW TO BUY SHARES..............................................................3
HOW TO REDEEM SHARES...........................................................4
DETERMINATION OF NET ASSET VALUE...............................................6
DIVIDENDS, DISTRIBUTIONS AND TAXES.............................................6
MANAGEMENT OF THE FUND.........................................................7
YEAR 2000 ISSUE................................................................7
FINANCIAL HIGHLIGHTS...........................................................7
FOR MORE INFORMATION..................................................BACK COVER
<PAGE>
ABOUT THE FUND
INVESTMENT OBJECTIVE
The investment objective of the Cornerstone MVP Fund is long term capital
appreciation.
PRINCIPAL STRATEGIES
The Fund's investment advisor, Cornerstone Investment Management, LLC,
selects stocks that it believes offer superior prospects for growth and are
reasonably valued based on the advisor's proprietary "MVP" screening process.
The advisor screens over 9,000 U.S. and foreign companies for "MVP"
characteristics:
o Momentum (increasing stock prices), using moving average prices;
o Valuation, using analysis of price multiples such as price to sales and
price to cash flow; and
o Performance, using revenue growth rates, earnings stability and stock
analysts' forecasts for earnings growth.
Stocks that pass the advisor's initial screening are considered as
candidates for the Fund. The advisor further analyzes the companies for strength
of management (based on such factors as industry expertise and past performance)
and performance outlook, and integrates the selected stocks into a diversified
portfolio in accordance with the advisor's sector weightings.
The Fund invests primarily in U.S. equity securities of medium and
large capitalization companies (those with a market capitalization of $1 billion
or more). The Fund may also invest to a limited extent in comparable stocks of
foreign companies by purchasing American Depositary Receipts ("ADRs"). An ADR is
a U.S. dollar denominated certificate that evidences ownership of shares of a
foreign company. ADRs are alternatives to the direct purchase of the underlying
foreign stock.
The Fund may sell a stock if the Fund's advisor believes that one or
more of the "MVP" characteristics are no longer met. To the extent consistent
with meeting the Fund's objective, the advisor strives to enhance the tax
efficiency of the Fund by selling securities with tax losses in order to offset
capital gains, holding securities long enough to avoid short term capital gains,
and keeping turnover reasonably low.
PRINCIPAL RISKS OF INVESTING IN THE FUND
o MANAGEMENT RISK. The strategy used by the Fund's advisor may fail to
produce the intended results.
o COMPANY RISK. The value of the Fund may decrease in response to the
activities and financial prospects of an individual company in the Fund's
portfolio.
o MARKET RISK. Overall stock market risks may also affect the value of the
Fund. Factors such as domestic economic growth and market conditions,
interest rate levels, and political events affect the securities markets.
o VOLATILITY RISK. Common stocks tend to be more volatile than other
investment choices. The value of an individual company can be more volatile
than the market as a whole. This volatility affects the value of the Fund's
shares.
o FOREIGN RISK. To the extent the Fund invests in ADRs, the Fund could be
subject to greater risks because the Fund's performance may depend on
issues other than the performance of a particular company. Changes in
foreign economies and political climates are more likely to affect the Fund
than a mutual fund that invests exclusively in U.S. companies. The value of
foreign securities is also affected by the value of the local currency
relative to the U.S. dollar. There may also be less government supervision
of foreign markets, resulting in non-uniform accounting practices and less
publicly available information.
o An investment in the Fund is not a deposit of any bank and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.
o The Fund is not a complete investment program.
o As with any mutual fund investment, the Fund's returns will vary and you
could lose money.
GENERAL
The investment objective of the Fund may be changed without shareholder
approval.
From time to time, the Fund may take temporary defensive positions that
are inconsistent with the Fund's principal investment strategies in attempting
to respond to adverse market, economic, political, or other conditions. For
example, the Fund may hold all or a portion of its assets in money market
instruments, securities of other no-load mutual funds or repurchase agreements.
If the Fund invests in shares of another mutual fund, the shareholders of the
Fund will indirectly pay additional management fees. As a result of engaging in
these temporary measures, the Fund may not achieve its investment objective. The
Fund may also invest in such instruments at any time to maintain liquidity or
pending selection of investments in accordance with its policies.
IS THE FUND RIGHT FOR YOU?
The Fund may be suitable for:
o Long term investors seeking a fund with a growth investment strategy
o Investors willing to accept price fluctuations in their investment
o Investors who can tolerate the greater risks associated with common stock
investments
HOW THE FUND HAS PERFORMED
Although past performance of a fund is no guarantee of how it will
perform in the future, historical performance may give you some indication of
the risk of investing in the fund because it demonstrates how its returns have
varied over time. The Bar Chart and Performance Table that would otherwise
appear in this prospectus have been omitted because the Fund is recently
organized and has a limited performance history.
FEES AND EXPENSES OF INVESTING IN THE FUND
The tables describe the fees and expenses that you may pay if you buy and hold
shares of the Fund.
SHAREHOLDER FEES (fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases ...........................NONE
Maximum Deferred Sales Charge (Load)........................................NONE
Redemption Fee (as a percentage of amount redeemed, if applicable)..........NONE
ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from Fund assets)
Management Fees............................................................1.10%
Distribution (12b-1) Fees...................................................NONE
Other Expenses.............................................................0.03%
Total Annual Fund Operating Expenses.......................................1.13%
Example:
The example below is intended to help you compare the cost of investing
in the Fund with the cost of investing in other mutual funds. The example uses
the same assumptions as other mutual fund prospectuses: a $10,000 initial
investment for the time periods indicated, reinvestment of dividends and
distributions, 5% annual total return, constant operating expenses, and sale of
all shares at the end of each time period. Although your actual expenses may be
different, based on these assumptions your costs will be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
$116 $361 $625 $1,380
<PAGE>
HOW TO BUY SHARES
The minimum initial investment in the Fund is $10,000 ($2,000 for
qualified retirement plans) and minimum subsequent investments are $500. These
minimums may be waived by the advisor for accounts participating in an automatic
investment program. If your investment is aggregated into an omnibus account
established by an investment advisor, broker or other intermediary, the account
minimums apply to the omnibus account, not to your individual investment. If you
purchase or redeem shares through a broker/dealer or another intermediary, you
may be charged a fee by that intermediary.
INITIAL PURCHASE
BY CHARLES SCHWAB- You may make a purchase through Charles Schwab &
Co. by contacting your Charles Schwab representative at (800) 435-4000. The
Cornerstone MVP Fund ticker symbol is CMVPX. There may be a nominal transaction
charge for purchases.
BY MAIL- To be in proper form, your initial purchase request must
include: o a completed and signed investment application form (which accompanies
this Prospectus); and o a check (subject to the minimum amounts) made payable to
the Fund.
Mail the application and check to:
U.S. Mail: Overnight:
Cornerstone MVP Fund Cornerstone MVP Fund
c/o Unified Fund Services, Inc. c/o Unified Fund Services, Inc.
P.O. Box 6110 431 North Pennsylvania Street
Indianapolis, Indiana 46206-6110 Indianapolis, Indiana 46204
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. To wire money,
you must call Unified Fund Services, Inc. the Fund's transfer agent at
(877)-687-7859 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,
provide your bank with the following information for purposes of wiring your
investment:
Firstar Bank, N.A.
ABA #0420-0001-3
Attn: Cornerstone MVP Fund
D.D.A.# 488922428
Account Name _________________(write in shareholder name)
For the Account # ______________(write in account number)
You must mail a signed application to Firstar Bank, N.A, the Fund's
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 Fund
may charge shareholders for this service in the future.
ADDITIONAL INVESTMENTS
You may purchase additional shares of the Fund at any time (subject to
minimum investment requirements) by mail, wire, or automatic investment. Each
additional mail purchase request must contain:
-your name -the name of your account(s)
-your account number(s) -a check made payable to Cornerstone MVP Fund
Checks should be sent to the Cornerstone MVP Fund at the address listed above. A
bank wire should be sent as outlined above.
AUTOMATIC INVESTMENT PLAN
You may make regular investments in the Fund with an Automatic
Investment Plan by completing the appropriate section of the account application
and attaching a voided personal check. Investments may be made monthly to allow
dollar-cost averaging by automatically deducting $50 or more from your bank
checking account. You may change the amount of your monthly purchase at any
time.
TAX SHELTERED RETIREMENT PLANS
Since the Fund is oriented to longer-term investments, 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 Fund's transfer agent for the procedure to open an IRA or SEP
plan, as well as more specific information regarding these retirement plan
options. Please consult with an attorney or tax advisor regarding these plans.
You must pay custodial fees for your IRA by redemption of sufficient shares of
the Fund from the IRA unless you pay the fees directly to the IRA custodian.
Call the Fund's transfer agent about the IRA custodial fees.
OTHER PURCHASE INFORMATION
You may exchange securities that you own for shares of the Fund,
provided the securities meet the Fund's investment criteria and the Fund's
advisor deems them to be a desirable investment for the Fund. Any exchange will
be a taxable event and you may incur certain transaction costs relating to the
exchange. You may contact the Fund's transfer agent at 877-687-7859 for more
information.
The Fund may limit the amount of purchases and to refuse to sell to any
person. 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
You may receive redemption payments by check or federal wire transfer.
The proceeds 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
may charge for this service in the future. Any charges for wire redemptions will
be deducted from your Fund account by redemption of shares. If you redeem your
shares through a broker/dealer or other institution, you may be charged a fee by
that institution.
BY MAIL - You may redeem any part of your account in the Fund at no
charge by mail. Your request should be addressed to:
Cornerstone MVP Fund
c/o Unified Fund Services, Inc.
P.O. Box 6110
Indianapolis, IN 46204
Requests to sell shares are processed at the net asset value next
calculated after we receive your order in proper form. To be in proper form,
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. The Fund may require 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 the
Fund's transfer agent, 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 Fund's transfer agent at 877-687-7859. 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 Fund or the transfer agent may terminate the telephone redemption
procedures at any time. 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 Fund's transfer agent at 877-687-7859. 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 calendar 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 the right may require you to redeem all of your shares in the
Fund on 30 days' written notice if the value of your 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 advisor concerning the tax consequences of involuntary
redemptions. You may increase the value of your shares in the Fund to the
minimum amount within the 30-day period. Your shares are 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.
DETERMINATION OF NET ASSET VALUE
The price you pay for your shares is based on the Fund's net asset
value per share (NAV). The NAV is calculated at the close of trading (normally
4:00 p.m. Eastern time) on each day the New York Stock Exchange is open for
business (the Stock Exchange is closed on weekends, Federal holidays and Good
Friday). The NAV is calculated by dividing the value of the Fund's total assets
(including interest and dividends accrued but not yet received) minus
liabilities (including accrued expenses) by the total number of shares
outstanding.
The Fund's assets are generally valued at their market value. If market
prices are not available, or if an event occurs after the close of the trading
market that materially affects the values, assets may be valued by the Fund's
advisor at their fair value, according to procedures approved by the Fund's
board of trustees.
Requests to purchase and sell shares are processed at the NAV next
calculated after we receive your order in proper form.
DIVIDENDS, DISTRIBUTIONS AND TAXES
DIVIDENDS AND DISTRIBUTIONS. The Fund typically distributes
substantially all of its net investment income in the form of dividends and
taxable capital gains to its shareholders. These distributions are automatically
reinvested in the Fund unless you request cash distributions on your application
or through a written request. The Fund expects that its distributions will
consist primarily of capital gains.
TAXES. In general, selling shares of the Fund and receiving
distributions (whether reinvested or taken in cash) are taxable events.
Depending on the purchase price and the sale price, you may have a gain or a
loss on any shares sold. Any tax liabilities generated by your transactions or
by receiving distributions are your responsibility. Because distributions of
long term capital gains are subject to capital gains taxes, regardless of how
long you have owned your shares, you may want to avoid making a substantial
investment when a Fund is about to make a long term capital gains distribution.
Early each year, the Fund will mail to you a statement setting forth
the federal income tax information for all distributions made during the
previous year. If you do not provide your taxpayer identification number, your
account will be subject to backup withholding.
The tax considerations described in this section do not apply to
tax-deferred accounts or other non-taxable entities. Because each investor's tax
circumstances are unique, please consult with your tax advisor about your
investment.
MANAGEMENT OF THE FUND
Cornerstone Investment Management, L.L.P. 132 W. Main Street, Aspen,
Colorado serves as investment advisor to the Fund. The advisor determines the
securities to be held or sold by the Fund, and the portion of the Fund's assets
to be held uninvested. Cornerstone Investment Management, L.L.P. was founded in
1997 and, as of Novemeber 1, 1999, manages over $43 million in assets, including
separately managed accounts which include stocks, bonds, mutual funds, and
options for high net worth individuals, families and trusts.
Christopher S. Ryan is President and Managing Partner of the advisor,
and has been responsible for the day-to-day management of the Fund's portfolio
since its inception. Mr. Ryan is a graduate of the University of
Colorado-Boulder (B.S. Finance, M.S. Accounting), and began his investment
career with Merrill Lynch in 1984. He worked for Deloitte & Touche Emerging
Business Services Group from 1989 until 1992 and as a Senior Equity Valuation
Analyst with Ernst & Young Valuation Services Group from 1992 until 1994. Mr.
Ryan was Vice President and Senior Portfolio Manager with NationsBank Private
Client Group, managing diversified equity, bond and international stock
portfolios, from 1994 until he founded the Advisor in 1997. Chris Ryan is both a
Chartered Financial Analyst (CFA) and a Certified Public Accountant (CPA).
During the fiscal year ended June 30, 1999, the Fund paid the advisor a
fee equal to 1.10% of its average daily net assets.
YEAR 2000 ISSUE
Like other mutual funds, financial and business organizations and
individuals around the world, the Fund could be adversely affected if the
computer systems used by the Fund's advisor or the Fund's various service
providers do not properly process and calculate date-related information and
data from and after January 1, 2000. This is commonly known as the "Year 2000
Issue."
The Fund's advisor has taken steps that it believes are reasonably
designed to address the Year 2000 Issue with respect to its computer systems.
The Fund's administrator has obtained reasonable assurances from each of the
Funds' major service providers that they have taken comparable steps with
respect to the computer systems used to service the Fund. At this time, however,
there can be no assurance that these steps will be sufficient to avoid any
adverse impact on the Fund. In addition, the Fund's advisor cannot make any
assurances that the Year 2000 Issue will not affect the companies in which the
Fund invests or worldwide markets and economies.
<PAGE>
FINANCIAL HIGHLIGHTS
The following table is intended to help you better understand the
Fund's financial performance since its inception. Certain information reflects
financial results for a single Fund share. The total returns represent the rate
you would have earned (or lost) on an investment in the Fund, assuming
reinvestment of all dividends and distributions. This information has been
audited by McCurdy & Associates CPA's, Inc., whose report, along with the Fund's
financial statements, are included in the Fund's annual report, which is
available upon request.
FINANCIAL HIGHLIGHTS FOR THE PERIOD DECEMBER 31, 1998
(COMMENCEMENT OF OPERATIONS) TO JUNE 30, 1999
SELECTED PER SHARE DATA
Net asset value, beginning of period $ 10.00
---------------
Income from investment operations
Net investment income (loss) 0.00
Net realized and unrealized gain (loss) 0.73
---------------
---------------
Total from investment operations 0.73
---------------
Net asset value, end of period $ 10.73
===============
TOTAL RETURN (b) 7.30%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000) $13,593
Ratio of expenses to average net assets 1.10% (a)
Ratio of expenses to average net assets
before reimbursement 1.13% (a)
Ratio of net investment income (loss) to
average net assets (0.05)% (a)
Ratio of net investment income (loss) to
average net assets before reimbursement (0.07)% (a)
Portfolio turnover rate 162.54% (a)
(a) Annualized
(b) For periods of less than a full year, total returns are not annualized.
<PAGE>
FOR MORE INFORMATION
Several additional sources of information are available to you. The
Statement of Additional Information (SAI), incorporated into this prospectus by
reference, contains detailed information on Fund policies and operations. Annual
and semi-annual reports contain management's discussion of market conditions,
investment strategies and performance results as of the Fund's latest
semi-annual or annual fiscal year end.
Call the Fund at (877)-687-7859 to request free copies of the SAI and
the Fund's annual and semi-annual reports, to request other information about
the Fund and to make shareholder inquiries.
You may also obtain information about the Fund (including the SAI and
other reports) from the Securities and Exchange Commission on their Internet
site at http://www.sec.gov or at their Public Reference Room in Washington, D.C.
Call the SEC at 800-SEC-0330 for room hours and operation. You may also obtain
fund information by sending a written request and duplicating fee to the Public
Reference Section of the SEC, Washington, D.C. 20549-6609.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
November 1, 1999
This Statement of Additional Information ("SAI") is not a prospectus.
It should be read in conjunction with the Prospectus of Cornerstone MVP Fund
dated November 1, 1999. This SAI incorporates by reference the Fund's Annual
Report to Shareholders for the fiscal year ended June 30, 1999 ("Annual
Report"). A free copy of the Prospectus or Annual Report can be obtained by
writing the Transfer Agent at Unified Fund Services, Inc., 431 North
Pennsylvania Street, Indianapolis, Indiana 46204, or by calling (877) 687-7859.
TABLE OF CONTENTS...........................................................PAGE
Description of The Trust And Fund............................................. 1
Additional Information About Fund Investments And Risk Considerations..........2
Investment Limitations........................................................ 4
The Investment Advisor........................................................ 6
Trustees and Officers......................................................... 8
Portfolio Transactions and Brokerage.......................................... 9
Determination of Share Price................................................. 10
Investment Performance........................................................10
Custodian.....................................................................11
Transfer Agent................................................................11
Accountants.................................................................. 11
Distributor...................................................................11
Administrator.................................................................12
Financial Statements .........................................................12
5955 9/1/99
<PAGE>
DESCRIPTION OF THE TRUST AND FUND
Cornerstone MVP Fund (the "Fund") was organized as a diversified series of
AmeriPrime Funds (the "Trust") on December 31, 1998 and commenced operations on
October 28, 1998. The Trust is an open end investment company established under
the laws of Ohio by an Agreement and Declaration of Trust dated August 8, 1995
(the "Trust Agreement"). The Trust Agreement permits the Trustees to issue an
unlimited number of shares of beneficial interest of separate series without par
value. The Fund is one of a series of funds currently authorized by the
Trustees.
The Fund does not issue share certificates. All shares are held in
non-certificate form registered on the books of the Fund and the Transfer Agent
for the account of the shareholder. 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.
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. The
Declaration of Trust can be amended by the Trustees, except that any amendment
that adversely effects the rights of shareholders must be approved by the
shareholders affected. 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 Fund's
shareholders.
As of October 1, 1999 the following persons may be deemed to
beneficially own five percent (5%) or more of the Fund: Charles Schwab & Co.
("Schwab"), 101 Montgomery Street, San Francisco, CA was the record owner of
97.40% of the Fund. As a result, Schwab may be deemed to control the Fund. The
Schwab accounts are omnibus accounts, and the Fund is unaware of any individual
investor owning 5% or more of the Fund.
As of October 1, 1999, the officers and Trustees as a group
beneficially owned less than 1% of the Fund.
For information concerning the purchase and redemption of shares of the
Fund, see "How to Buy Shares" 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 "Price of Shares" 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.
A. Equity Securities. The Fund will generally be fully invested (subject to
liquidity requirements and defensive purposes) in common stock and common stock
equivalents (such as securities convertible into common stocks). 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. Warrants are
options to purchase equity securities at a specified price for a specified time
period. Rights are similar to warrants, but normally have a short duration and
are distributed by the issuer to its shareholders. The Fund will not invest more
than 5% of its net assets at the time of purchase in rights, warrants,
convertible preferred stocks, or convertible bonds. The advisor will limit the
Fund's investment in convertible securities to those rated A or better by Moodys
Investors Service, Inc. or Standard & Poor's Rating Group or, if unrated, of
comparable quality in the opinion of the advisor. 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.
Equity securities include S&P Depositary Receipts ("SPDRs") and other
similar instruments. SPDRs are shares of a publicly traded unit investment trust
which owns the stock included in the S&P 500 Index, and changes in the price of
the SPDRs track the movement of the Index relatively closely. Similar
instruments may track the movement of other stock indexes.
The Fund may invest up to 20% of its net assets in foreign equity
securities by purchasing American Depository Receipts (ADRs). An ADR is a
certificate evidencing ownership of shares of a foreign-based issuer held in
trust by a bank or similar financial institution. They are alternatives to the
direct purchase of the underlying securities in their national markets and
currencies. To the extent that the Fund does invest in foreign securities, such
investments may be subject to special risks. For example, there may be less
information publicly available about a foreign company than about a U.S.
company, and foreign companies are not generally subject to accounting, auditing
and financial reporting standards and practices comparable to those in the U.S.
Other risks associated with investments in foreign securities include changes in
restrictions on foreign currency transactions and rates of exchanges, changes in
the administrations or economic and monetary policies of foreign governments,
the imposition of exchange control regulations, the possibility of expropriation
decrees and other adverse foreign governmental action, the imposition of foreign
taxes, less liquid markets, less government supervision of exchanges, brokers
and issuers, difficulty in enforcing contractual obligations, delays in
settlement of securities transactions and greater price volatility. In addition,
investing in foreign securities will generally result in higher commissions than
investing in similar domestic securities.
B. Short Sales. The term "selling short" means the Fund sells a stock or other
security that it does not own, borrows the same security from a broker or other
institution to complete the sale, and buys the same security at a later date to
repay the lender. If the security is overvalued, and the price declines before
the Fund buys the security, the Fund makes a profit. If the price of the
security increases before the Fund buys the security, the Fund loses money. The
advisor may "short" various types of equity securities, including SPDRs and
similar instruments. The advisor's strategy of using short positions is intended
to reduce the effects of general market movements on the Fund's performance,
although there is no assurance that the Advisor will be able to do so.
When selling securities short, 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. It is the intention of the advisor that the Fund NOT borrow money to
provide this collateral. Therefore, the Fund may, at times, maintain high levels
of cash or high grade liquid assets (e.g., U.S. Treasury bills, money market
funds, repurchase agreements) for collateral needs. However, the segregated
accounts and deposits will not limit the Fund's potential loss on a short sale,
which is unlimited.
C. Repurchase Agreements. The Fund may invest in repurchase agreements fully
collateralized by obligations of the U.S. Government and its agencies. A
repurchase agreement is a short-term investment in which the purchaser (i.e.,
the Fund) acquires ownership of an obligation issued by the U.S. Government or
by an agency of the U.S. Government ("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 Firstar Bank, N.A. (the Fund's Custodian), other banks with
assets of $1 billion or more and registered securities dealers determined by the
Advisor to be creditworthy. The advisor monitors the creditworthiness of the
banks and securities dealers with which the Fund engages in repurchase
transactions.
D. Option Transactions. 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. Call options which the Fund sells (writes) will be
covered or secured, which means that it will own the underlying security (for an
option on a security); 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.
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 call option, it will receive a premium, but it will assume the
risk of loss should the price of the underlying security rise above the exercise
price. When the Fund writes a covered call option on a stock index, it will
assume the risk that the price of the index will rise above the exercise price,
in which case the Fund may be required to enter into a closing transaction at a
loss. The Fund may invest up to 5% of its net assets in premiums for options it
purchases.
E. REITs. The Fund may invest up to 5% of its assets in real estate invest
trusts ("REITs"). A REIT is a corporation or business trust that invests
substantially all of its assets in interests in real estate. Equity REITs are
those which purchase or lease land and buildings and generate income primarily
from rental income. Equity REITs may also realize capital gains (or losses) when
selling property that has appreciated (or depreciated) in value. Mortgage REITs
are those which invest in real estate mortgages and generate income primarily
from interest payments on mortgage loans. Hydrid REITs generally invest in both
real property and mortgages. In addition, REITs are generally subject to risks
associated with direct ownership of real estate, such as decreases in real
estate values or fluctuations in rental income caused by a variety of factors,
including increases in interest rates, increases in property taxes and other
operating costs, casualty or condemnation losses, possible environmental
liabilities and changes in supply and demand for properties. Risks associated
with REIT investments include the fact that equity and mortgage REITs are
dependent upon specialized management skills and are not fully diversified.
These characteristics subject REITs to the risks associated with financing a
limited number of projects. They are also subject to heavy cash flow dependency,
defaults by borrowers, and self-liquidation. Additionally, equity REITs may be
affected by any changes in the value of the underlying property owned by the
trusts, and mortgage REITs may be affected by the quality of any credit
extended.
INVESTMENT LIMITATIONS
Fundamental. The investment limitations described below have been
adopted by the Trust with respect to the Fund and are fundamental
("Fundamental"), i.e., they may not be changed without the affirmative vote of a
majority of the outstanding shares of the Fund. As used in the Prospectus and
the 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 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.
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 that 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.
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 engage in borrowing (including
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.......Options. The Fund will not purchase or sell puts, calls,
options or straddles, except as described in the Prospectus and the Statement of
Additional Information.
THE INVESTMENT ADVISOR
The Fund's investment adviser is Cornerstone Investment Management, LLC,
132 W. Main Street, Aspen, Colorado 81611. The Advisor is a limited liability
company organized in the state of Colorado in 1997, and controlled by
Christopher S. Ryan.
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 1.10% 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. For the period December
31, 1998 (commencement of operations) through June 30, 1999, the Fund paid
advisory fees of $43,651.
The Advisor retains the right to use the names "Cornerstone" and " MVP"
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
"Cornerstone" and " MVP" 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 Board of Trustees supervises the business activities of the Trust.
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.
<PAGE>
<TABLE>
<S> <C> <C>
==================================== ---------------- ======================================================================
NAME, AGE AND ADDRESS POSITION PRINCIPAL OCCUPATIONS DURING PAST 5 YEARS
==================================== ---------------- ======================================================================
*Kenneth D. Trumpfheller President and President, Treasurer and Secretary of AmeriPrime Financial Services,
Age: 41 Trustee Inc., the Fund's administrator, and AmeriPrime Financial Securities,
1793 Kingswood Drive Inc., the Fund's distributor, since 1994. President and Trustee of
Suite 200 AmeriPrime Advisors Trust and AmeriPrime Insurance Trust; Prior to
Southlake, Texas 76092 December, 1994, a senior client executive with SEI Financial
Services.
==================================== ---------------- ======================================================================
Paul S. Bellany Secretary, Secretary, Treasurer and Chief Financial Officer of AmeriPrime
Age: 40 Treasurer Financial Services, Inc. and AmeriPrime Financial Securities, Inc.;
1793 Kingswood Drive Secretary and Treasurer of AmeriPrime Advisors Trust and AmeriPrime
Suite 200 Insurance Trust; various positions with Fidelity Investments from
Southlake, Texas 76092 1987 to 1998; most recently Fund Reporting Unit Manager.
==================================== ---------------- ======================================================================
Steve L. Cobb Trustee President of Chandler Engineering Company, L.L.C., oil and gas
Age: 41 services company; various positions with Carbo Ceramics, Inc., oil
2001 Indianwood Avenue field manufacturing/supply company, from 1984 to 1997, most recently
Broken Arrow, OK 74012 Vice President of Marketing.
==================================== ================ ======================================================================
Gary E. Hippenstiel Trustee Director, Vice President and Chief Investment Officer of Legacy
Age: 52 Trust Company since 1992; President and Director of Heritage Trust
600 Jefferson Street Company from 1994-1996; Vice President and Manager of Investments of
Suite 350 Kanaly Trust Company from 1988 to 1992.
Houston, TX 77063
==================================== ================ ======================================================================
</TABLE>
The compensation paid to the Trustees of the Trust for the Fund's
fiscal year ended June 30, 1999 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.
<TABLE>
<S> <C> <C>
==================================== ----------------------- ==================================
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 $11,029 $11,029
==================================== ======================= ==================================
Gary E. Hippenstiel $11,029 $11,029
==================================== ======================= ==================================
</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. 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 Trust as a factor in
the selection of brokers and dealers to execute portfolio transactions.
The Advisor is specifically authorized to select brokers or dealers who
also provide brokerage and research services to the Fund and/or the other
accounts over which the Advisor exercises investment discretion and to pay such
brokers or dealers a commission in excess of the commission another broker or
dealer would charge if the Advisor determines in good faith that the commission
is reasonable in relation to the value of the brokerage and research services
provided. The determination may be viewed in terms of a particular transaction
or the Advisor's overall responsibilities with respect to the Trust and to other
accounts over which it exercises investment discretion.
Research services include supplemental research, securities and
economic analyses, statistical services and information with respect to the
availability of securities or purchasers or sellers of securities and analyses
of reports concerning performance of accounts. The research services and other
information furnished by brokers through whom the Fund effects securities
transactions may also be used by the Advisor in servicing all of its accounts.
Similarly, research and information provided by brokers or dealers serving other
clients may be useful to the Advisor in connection with its services to the
Fund. Although research services and other information are useful to the Fund
and the Advisor, it is not possible to place a dollar value on the research and
other information received. It is the opinion of the Board of Trustees and the
Advisor that the review and study of the research and other information will not
reduce the overall cost to the Advisor of performing its duties to the Fund
under the Agreement.
Over-the-counter transactions will be placed either directly with
principal market makers or with broker-dealers, if the same or a better price,
including commissions and executions, is available. Fixed income securities are
normally purchased directly from the issuer, an underwriter or a market maker.
Purchases include a concession paid by the issuer to the underwriter and the
purchase price paid to a market maker may include the spread between the bid and
asked prices.
When the Fund and another of the Advisor's clients seek to purchase or
sell the same security at or about the same time, the Advisor may execute the
transaction on a combined ("blocked") basis. Blocked transactions can produce
better execution for the Fund because of the increased volume of the
transaction. If the entire blocked order is not filled, the Fund 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 Fund 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. In the event that the entire blocked order
is not filled, the purchase or sale will normally be allocated on a pro rata
basis. The allocation may be adjusted by the Advisor, taking into account such
factors as the size of the individual orders and transaction costs, when the
Advisor believes adjustment is reasonable. For the period December 31, 1998
(commencement of operations) through June 30, 1999, the Fund paid brokerage
commissions of $13,028.
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, Martin
Luther King, Jr. 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 "Price of Shares" in
the Prospectus.
INVESTMENT PERFORMANCE
Each Fund may periodically advertise "average annual total return."
"Average annual total return," as defined by the Securities and Exchange
Commission, is computed by finding the average annual compounded rates of return
(over the one and five year periods and the period from initial public offering
through the end of the Fund's most recent fiscal year) that would equate the
initial amount invested to the ending redeemable value, according to the
following formula:
P(1+T)n=ERV
Where: P = a hypothetical $1,000 initial investment
T = average annual total return
n = number of years
ERV = ending redeemable value at the end of the applicable
period of the hypothetical $1,000 investment made at the
beginning of the applicable period.
The computation assumes that all dividends and distributions are reinvested at
the net asset value on the reinvestment dates and that a complete redemption
occurs at the end of the applicable period.
The Fund's investment performance will vary depending upon market
conditions, the composition of the Fund's portfolio and operating expenses of
the Fund. These factors and possible differences in the methods and time periods
used in calculating non-standardized investment performance should be considered
when comparing the Fund's performance to those of other investment companies or
investment vehicles. The risks associated with the Fund's investment objective,
policies and techniques should also be considered. At any time in the future,
investment performance may be higher or lower than past performance, and there
can be no assurance that any performance will continue. For the period December
31, 1998 (commencement of operations) through June 30, 1999, the Fund's total
return was 7.30%.
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 Russell Midcap Index.
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
Firstar 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
Unified Fund Services, Inc. ("Unified"), 431 North Pennsylvania Street,
Indianapolis, Indiana 46204, 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, Unified provides the Fund with fund accounting services, which
includes certain monthly reports, record-keeping and other management-related
services. For its services as fund accountant, Unified receives an annual fee
from the Advisor equal to 0.0275% of the Fund's assets up to $100 million
(subject to various monthly minimum fees, the maximum being $2,000 per month for
assets of $20 to $100 million). For the period December 31, 1998 (commencement
of operations) through June 30, 1999, Unified received $13,560 from the Advisor
(not the Fund) for these services.
ACCOUNTANTS
The firm of McCurdy & Associates, CPA's, 27955 Clemens Road, Westlake,
Ohio 44145, has been selected as independent public accountants for the Fund for
the fiscal year ending June 30, 2000. McCurdy & Associates performs an annual
audit of the Funds' financial statements and provides financial, tax and
accounting consulting services as requested.
DISTRIBUTOR
AmeriPrime Financial Securities, Inc., 1793 Kingswood Drive, Suite 200,
Southlake, Texas 76092, is the exclusive agent for distribution of shares of the
Fund. Kenneth D. Trumpfheller, a Trustee and officer of the Trust, is an
affiliate of the Distributor. 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.
ADMINISTRATOR
The Fund retains AmeriPrime Financial Services, Inc., 1793 Kingswood
Drive, Suite 200, Southlake, TX 76092, (the "Administrator") to manage the
Fund's business affairs and provide the Fund with administrative services,
including all regulatory reporting and necessary office equipment, personnel and
facilities. For the period December 31, 1998 (commencement of operations)
through June 30, 1999, the Administrator received $12,500 from the Advisor (not
the Fund) for these services.
FINANCIAL STATEMENTS
The financial statements and independent auditor's report required to
be included in the statement of additional information are incorporated herein
by reference to the Fund's Annual Report to the shareholders for the period
ended June 30, 1999. The Trust will provide the Annual Report without charge by
calling the Fund at (877)-687-7859.
