Marathon Value Fund
702 W. Idaho Street, Suite 810
Boise, ID 83702
For Information, Shareholder Services and Requests:
(800) 788-6086
PROSPECTUS
March 19, 1999
The investment objective of the Marathon Value Fund (the "Fund") is to
provide shareholders with maximum long term capital appreciation. The Fund's
advisor, Burroughs & Hutchinson, Inc. (the "Advisor"), seeks to achieve this
objective by investing in common stocks of companies that it believes to be
undervalued. These stocks are typically viewed as out-of-favor and have a share
price which does not reflect the intrinsic value of the company. The Advisor
believes its price driven, value-oriented approach will provide investors with
the opportunity for growth, while providing some protection against adverse
events.
The Fund is "no-load," which means that investors incur no sales charges,
commissions or deferred sales charges on the purchase or redemption of their
shares. The Fund is one of the mutual funds comprising AmeriPrime Funds, an
open-end management investment company, distributed by AmeriPrime Financial
Securities, Inc.
This Prospectus provides the information a prospective investor ought to
know before investing and should be retained for future reference. A Statement
of Additional Information dated February 14, 1999 has been filed with the
Securities and Exchange Commission (the "SEC"), is incorporated herein by
reference, and can be obtained without charge by calling the Fund at the phone
number listed above.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
SUMMARY OF FUND EXPENSES
The tables below are provided to assist an investor in understanding the
direct and indirect expenses that an investor may incur as a shareholder in the
Fund. The expense information is based on estimated amounts for the current
fiscal year. The expenses are expressed as a percentage of average net assets.
The Example should not be considered a representation of future Fund performance
or expenses, both of which may vary.
Shareholders should be aware that the Fund is a no-load fund and,
accordingly, a shareholder does not pay any sales charge or commission upon
purchase or redemption of shares of the Fund. In addition, the Fund does not
have a 12b-1 Plan. Unlike most other mutual funds, the Fund does not pay
directly for transfer agency, pricing, custodial, auditing or legal services,
nor does it pay directly any general administrative or other significant
operating expenses. The Advisor pays all of the expenses of the Fund except
brokerage, taxes, interest, fees and expenses of non-interested person trustees
and extraordinary expenses.
Shareholder Transaction Expenses
Sales Load Imposed on Purchases....................................NONE
Sales Load Imposed on Reinvested Dividends.........................NONE
Deferred Sales Load................................................NONE
Redemption Fees....................................................NONE
Exchange Fees......................................................NONE
Annual Fund Operating Expenses (as a percentage of average net assets)1
Management Fees...................................................1.48%
12b-1 Charges.....................................................0.00%
Other Expenses (after reimbursement)2.............................0.00%
Total Fund Operating Expenses (after reimbursement)2..............1.48%
1 The fund's total operating expenses are equal to the management fee paid to
the Advisor because the Advisor pays all of the Fund's operating expenses
(except as described above).
2 The Advisor has voluntarily agreed to reimburse other expenses for the fiscal
year ended October 31, 1999 to the extent necessary to maintain total operating
expenses as indicated.
The tables above are provided to assist an investor in understanding the
direct and indirect expenses that an investor may incur as a shareholder in the
Fund.
Example
You would pay the following expenses on a $1,000 investment, assuming
(1) 5% annual return and (2) redemption at the end of each time period:
1 Year 3 Years 5 years 10 Years
------ ------- ------- --------
$ 15 $ 47 $81 $178
FINANCIAL HIGHLIGHTS
The following condensed supplementary financial information for the period
March 12, 1998 (commencement of operations) to October 31, 1998 is derived from
the audited financial statements of the Fund. The financial statements of the
Fund have been audited by McCurdy & Associates CPA's, Inc., independent public
accountants, and are included in the Fund's Annual Report. The Annual Report
contains additional performance information and is available upon request and
without charge.
Financial Highlights for the period March 12, 1998 (Commencement of Operations)
to October 31, 1998
Net asset value, beginning of period.......................$10.00
Income from investment operations
Net investment income................................... 0.02
Net realized and unrealized gain (loss)................. (1.54)
-------
Total from investment operations........................... (1.52)
-------
Net asset value, end of period.............................$ 8.48
=======
Total Return...............................................-15.20%
Ratios and Supplemental Data
Net assets, end of period (000)............................$3,259
Ratio of expenses to average net assets.................... 1.36% (a)
Ratio of net investment income to average net assets....... 0.33% (a)
Portfolio turnover rate.................................... 61.04% (a)
(a) Annualized
THE FUND
Marathon Value Fund (the "Fund") was organized as a series of AmeriPrime
Funds, an Ohio business trust (the "Trust"), on March 9, 1998 and commenced
operations on March 12, 1998. 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 Burroughs & Hutchinson, Inc. (the "Advisor").
INVESTMENT OBJECTIVE AND STRATEGIES AND RISK CONSIDERATIONS
The investment objective of the Fund is to provide shareholders with
maximum long term capital appreciation. The Advisor seeks to achieve this
objective by investing in common stocks of companies that it believes to be
undervalued. These stocks are typically viewed as out-of-favor and have a share
price which does not reflect the intrinsic value of the company. The Advisor
believes its price driven, value-oriented approach will provide investors with
the opportunity for growth, while providing some protection against adverse
events. The Fund is designed for shareholders with a long term investment
horizon.
The Fund intends to invest in common stocks of small, medium and large
capitalization companies whose value has been ignored by other investors. These
stocks are typically found at the bottom of the rankings in terms of
price-to-book value, price-to-earnings or price-to-cash flow. These securities
include attractively priced, stable businesses that have not yet been discovered
or become popular, companies having a new catalyst for appreciation, companies
that have declined in value and lost their following, and previously popular
companies out of favor due to circumstances the Advisor believes to be
temporary.
The Advisor considers small capitalization companies to be those with a
market capitalization of less than $1 billion, mid-capitalization companies to
be those with the same capitalization ranges as companies in the Russell Midcap
Index ($1 billion to $10 billion) and large-capitalization companies to be those
with a market capitalization above $10 billion.
The Advisor generally plans to stay fully invested (subject to liquidity
requirements) in common stocks, preferred stocks, and common stock equivalents
(such as securities convertible into common stocks), regardless of price
movements. For temporary defensive purposes, the Fund may hold all or a portion
of its assets in money market instruments, securities of other no-load
registered investment companies 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 another investment company, the shareholders of the Fund
will be subject to duplicative management fees.
To the extent the Fund invests in small and mid-capitalization companies,
the Fund will be subject to the risks associated with such companies. Smaller
capitalization companies may experience higher growth rates and higher failure
rates than do larger capitalization companies. Companies in which the Fund is
likely to invest may have limited product lines, markets or financial resources
and may lack management depth. The trading volume of securities of smaller
capitalization companies is normally less than that of larger capitalization
companies, and, therefore, may disproportionately affect their market price,
tending to make them rise more in response to buying demand and fall more in
response to selling pressure than is the case with larger capitalization
companies. The Advisor seeks to reduce risk by buying "cheap" stocks,
diversifying broadly and avoiding the institutional favorites.
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. It should be noted that the Advisor has limited experience
managing assets organized as a mutual fund. Rates of total return quoted by the
Fund may be higher or lower than past quotations, and there can be no assurance
that any rate of total return will be maintained. See "Investment Policies and
Techniques" for a more detailed discussion of the Fund's investment practices.
HOW TO INVEST IN THE FUND
The Fund is "no-load" and shares of the Fund are sold directly to investors
on a continuous basis, subject to a minimum initial investment of $2,500 and
minimum subsequent investments of $100. These minimums may be waived by the
Advisor for accounts participating in an automatic investment program. Investors
choosing to purchase or redeem their shares through a broker/dealer or other
institution may be charged a fee by that institution. Investors choosing to
purchase or redeem shares directly from the Fund will not incur charges on
purchases or redemptions. To the extent investments of individual investors are
aggregated into an omnibus account established by an investment advisor, broker
or other intermediary, the account minimums apply to the omnibus account, not to
the account of the individual investor.
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 Marathon Value Fund, and sent to the address listed below.
U.S. Mail: Overnight:
Marathon Value Fund Marathon Value Fund
c/o Unified Fund Services, Inc. c/o Unified Fund Services,Inc.
P.O. Box 6110 431 N. Pennsylvania Street
Indianapolis, IN 46206-6110 Indianapolis, IN 46204
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) 788-6086 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:
Firstar Bank, N.A. Cinti/Trust
ABA #0420-0001-3
Attn: Marathon Value Fund
D.D.A. #488886904
Account Name _________________ (write in shareholder name)
For the Account # ______________ (write in account number)
You are required to mail a signed application to the Custodian at the above
address in order to complete your initial wire purchase. Wire orders will be
accepted only on a day on which the Fund, Custodian and Transfer Agent are open
for business. A wire purchase will not be considered made until the wired money
is received and the purchase is accepted by the Fund. Any delays which may occur
in wiring money, including delays which may occur in processing by the banks,
are not the responsibility of the Fund or the Transfer Agent. There is presently
no fee for the receipt of wired funds, but the right to charge shareholders for
this service is reserved by the Fund.
Additional Investments
You may purchase additional shares of the Fund at any time (subject to
minimum investment requirements) by mail, wire, or automatic investment. Each
additional mail purchase request must contain your name, the name of your
account(s), your account number(s), and the name of the Fund. Checks should be
made payable to Marathon Value Fund and should be sent to the address listed
above. A bank wire should be sent as outlined above.
Automatic Investment Plan
You may make regular investments in the Fund with an Automatic Investment
Plan by completing the appropriate section of the account application and
attaching a voided personal check. Investments may be made monthly to allow
dollar-cost averaging by automatically deducting $100 or more from your bank
checking account. You may change the amount of your monthly purchase at any
time.
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); SIMPLE plans; 401(k) plans; qualified corporate pension and profit
sharing plans (for employees); tax deferred investment plans (for employees of
public school systems and certain types of charitable organizations); and other
qualified retirement plans. You should contact the Transfer Agent for the
procedure to open an IRA or SEP plan, as well as more specific information
regarding these retirement plan options. Consultation with an attorney or tax
advisor regarding these plans is advisable. Custodial fees for an IRA will be
paid by the shareholder by redemption of sufficient shares of the Fund from the
IRA unless the fees are paid directly to the IRA custodian. You can obtain
information about the IRA custodial fees from the Transfer Agent.
Other Purchase Information
Dividends begin to accrue after you become a shareholder. The Fund does not
issue share certificates. All shares are held in non-certificate form registered
on the books of the Fund and the Fund's Transfer Agent for the account of the
shareholder. The rights to limit the amount of purchases and to refuse to sell
to any person are reserved by the Fund. If your check or wire does not clear,
you will be responsible for any loss incurred by the Fund. If you are already a
shareholder, the Fund can redeem shares from any identically registered account
in the Fund as reimbursement for any loss incurred. You may be prohibited or
restricted from making future purchases in the Fund.
HOW TO REDEEM SHARES
All redemptions will be made at the net asset value determined after the
redemption request has been received by the Transfer Agent in proper order.
Shareholders may receive redemption payments in the form of a check or federal
wire transfer. The proceeds of the redemption may be more or less than the
purchase price of your shares, depending on the market value of the Fund's
securities at the time of your redemption. Presently there is no charge for wire
redemptions; however, the Fund reserves the right to charge for this service.
Any charges for wire redemptions will be deducted from the shareholder's Fund
account by redemption of shares. Investors choosing to purchase or redeem their
shares through a securities dealer may be charged a fee by that institution.
By Mail - You may redeem any part of your account in the Fund at no
charge by mail. Your request should be addressed to:
Marathon Value Fund
c/o Unified Fund Services, Inc.
P.O. Box 6110
Indianapolis, IN 46206-6110
"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 Unified Fund 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) 788-6086. 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) 788-6086. 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 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 $2,500 due to redemption, or such other
minimum amount as the Fund may determine from time to time. An involuntary
redemption constitutes a sale. You should consult your tax advisor concerning
the tax consequences of involuntary redemptions. A shareholder may increase the
value of his or her shares in the Fund to the minimum amount within the 30 day
period. Each share of the Fund is subject to redemption at any time if the Board
of Trustees determines in its sole discretion that failure to so redeem may have
materially adverse consequences to all or any of the shareholders of the Fund.
SHARE PRICE CALCULATION
The value of an individual share in the Fund (the net asset value) is
calculated by dividing the total value of the Fund's investments and other
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 federal income taxes to the extent that it distributes
substantially all of its net investment income and any realized capital gains.
For federal income tax purposes, dividends paid by the Fund from ordinary
income are taxable to shareholders as ordinary income, but may be eligible in
part for the dividends received deduction for corporations. Pursuant to the Tax
Reform Act of 1986 (the "Tax Reform Act"), all distributions of net 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
advisors regarding specific questions as to federal, state or local taxes and
the tax effect of distributions and withdrawals from the Fund.
On the application or other appropriate form, the Fund will request the
shareholder's certified taxpayer identification number (social security number
for individuals) and a certification that the shareholder is not subject to
backup withholding. Unless the shareholder provides this information, the Fund
will be required to withhold and remit to the U.S. Treasury 31% of the
dividends, distributions and redemption proceeds payable to the shareholder.
Shareholders should be aware that, under regulations promulgated by the Internal
Revenue Service, the Fund may be fined $50 annually for each account for which a
certified taxpayer identification number is not provided. In the event that such
a fine is imposed with respect to a specific account in any year, the Fund may
make a corresponding charge against the account.
OPERATION OF THE FUND
The Fund is a diversified series of AmeriPrime Funds, an open-end
management investment company organized as an Ohio business trust on August 8,
1995. The Board of Trustees supervises the business activities of the Fund. Like
other mutual funds, the Fund retains various organizations to perform
specialized services.
The Fund retains Burroughs & Hutchinson, Inc. 702 W. Idaho Street, Suite
810, Boise, ID 83702 (the "Advisor") to manage the Fund's investments. Burroughs
& Hutchinson has been providing portfolio management services since its founding
in 1967 by A.H. Burroughs III. The Advisor provides equity, balanced and fixed
income portfolio management services to a select group of corporations,
institutions, foundations, trusts and high net worth individuals. The Advisor
currently manages over $240 million in assets for clients.
Mark Matsko has been primarily responsible for the day-to-day management of
the Fund's portfolio since its inception. A graduate of the University of
Montana in 1980 with a B.S. degree in accounting, he passed his CPA exam and
worked as a tax accountant at Arthur Andersen & Co. After leaving Arthur
Andersen, he worked for and became president of Great Falls Coca-Cola. A
Chartered Financial Analyst (CFA), his work in the investment business during
the last ten years has included positions as a broker, a security analyst, and
manager of his own hedge fund. Since 1986, Mr. Matsko has been a portfolio
manager with Burroughs & Hutchinson.
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. The Advisor always
follows the Fund's investment objectives, policies and restrictions and any
policies and instructions of the Board of Trustees. The Fund is authorized to
pay the Advisor a fee equal to an annual average rate of 1.48% of its average
daily net assets. The Advisor pays all of the operating expenses of the Fund
except brokerage, taxes, interest , fees and expenses of non-interested person
trustees and extraordinary expenses. In this regard, it should be noted that
most investment companies pay their own operating expenses directly, while the
Fund's expenses, except those specified above, are paid by the Advisor.
The Fund retains AmeriPrime Financial Services, Inc. (the "Administrator")
to manage the Fund's business affairs and provide the Fund with administrative
services, including all regulatory reporting and necessary office equipment,
personnel and facilities. The Administrator receives a monthly fee from the
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 Unified Fund Services, Inc., 431 N. Pennsylvania St., Indianapolis,
IN 46204 (the "Transfer Agent") to serve as transfer agent, dividend paying
agent and shareholder service agent. The Trust retains AmeriPrime Financial
Securities, Inc., 1793 Kingswood Drive, Suite 200, Southlake, Texas 76092 (the
"Distributor") to act as the principal distributor of the Fund's shares. 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 Advisor (not the fund) may pay certain financial
institutions (which may include banks, brokers, securities dealers and other
industry professionals) a fee for providing distribution related services and/or
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
This section contains general information about various types of securities
and investment techniques that the Fund may purchase or employ.
Equity Securities
The Fund will invest primarily in U.S. equity securities of issuers of all
sizes. Equity securities include common stock and securities exchangeable for
common stock, such as convertible securities, rights and warrants. The Fund will
not invest more than 5% of the value of its net assets in convertible
securities, rights, warrants or real estate investment trusts. Although equity
securities have a history of long-term growth in value, their prices fluctuate
based on changes in a company's financial condition and on overall market and
economic conditions. Smaller companies are especially sensitive to these
factors. The Fund intends to invest primarily in U.S. equity securities, but
reserves the right to invest in short-term cash equivalent securities, either
for temporary defensive purposes or as part of its overall strategy.
Investments in equity securities are subject to inherent market risks and
fluctuations in value due to earnings, economic conditions and other factors
beyond the control of the Adviser. As a result, the return and net asset value
of the Fund will fluctuate. Securities in the Fund's portfolio may not increase
as much as the market as a whole and some undervalued securities may continue to
be undervalued for long periods of time. Although profits in some Fund holdings
may be realized quickly, it is not expected that most investments will
appreciate rapidly.
Options Transactions
The Fund may write covered call options. A call option involves the right
to buy a specific security at a predetermined price before a preset deadline, in
exchange for a premium. 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 the
underlying security. A writer of an option may terminate the obligation prior to
expiration of the option by making an offsetting purchase of an identical
option. Call options on securities which the Fund sells (writes) will be
covered, which means that the Fund will own the underlying security. The 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. 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. The Fund may also buy and write put options
provided the Fund's investment (including premiums and potential settlement
obligations) does not exceed 5% of its net assets. For more information, see
"Additional Information about Fund Investments and Risk Considerations" in the
Fund's Statement of Additional Information.
Other Investments and Investment Techniques
The Fund may invest up to 5% of its net assets in repurchase agreements
fully collateralized by U.S. Government and agency obligations and
instrumentalities. 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,
but investment in such securities may not exceed 5% of the Fund's net assets.
The Fund will not invest more than 5% of its net assets in illiquid securities,
including repurchase agreements maturing in more than seven days. Also limited
to 5% of the Fund's net assets is the Fund's investment in indexed securities
and in STRIPs (Separate Trading of Registered Interest and Principal of
Securities). The Federal Reserve creates STRIPs by separating the coupon
payments and the principal payments from the outstanding Treasury security and
selling them as individual securities.
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 100% of the value of
the loaned securities. The Fund will continue to receive dividends or interest
on the loaned securities and may terminate such loans at any time or reacquire
such securities in time to vote on any matter which the Board of Trustees
determines to be important. 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 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 market conditions, creditworthiness factors or general
economic conditions warrant such action.
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.
Shareholder inquiries should be made by telephone to 800-788-6086, or by
mail, c/o Unified Fund Services, Inc., P.O. Box 6110, Indianapolis, Indiana
46206-6110.
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 Advisor, Administrator or other
service providers to the Fund 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 Advisor and Administrator have taken steps that they
believe are reasonably designed to address the Year 2000 Issue with respect to
computer systems that are used and to obtain reasonable assurances that
comparable steps are being taken by the Fund's major service providers. 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 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.
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 advertise performance information (a "non-standardized
quotation") which is calculated differently from "average annual total return."
A non-standardized quotation of total return may be a cumulative return which
measures the percentage change in the value of an account between the beginning
and end of a period, assuming no activity in the account other than reinvestment
of dividends and capital gains distributions. A non-standardized quotation may
also be an average annual compounded rate of return over a specified period,
which may be a period different from those specified for "average annual total
return." In addition, a non-standardized quotation may be an indication of 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. A non-standardized
quotation will always be accompanied by the Fund's "average annual total return"
as described above.
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 Russell
Mid-Cap 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.
Investment Advisor Administrator
Burroughs & Hutchinson, Inc. AmeriPrime Financial Services, Inc.
702 W. Idaho Street, Suite 810 1793 Kingswood Drive, Suite 200
Boise, ID 83702 Southlake, Texas 76092
Custodian Distributor
Firstar Bank, N.A. AmeriPrime Financial Services, Inc.
425 Walnut St., M.L. 6118 1793 Kingswood Drive, Suite 200
Cincinnati, Ohio 45202 Southlake, Texas 76092
Transfer Agent (all purchases and Independent Auditors
all redemption requests) McCurdy & Associates CPA's, Inc.
Unified Fund Services, Inc. 27955 Clemens Road
431 N. Pennsylvania St. Westlake, Ohio 44145
Indianapolis, IN 46204
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.
TABLE OF CONTENTS Page
SUMMARY OF FUND EXPENSES......................................................3
Shareholder Transaction Expenses...........................................3
Annual Fund Operating Expenses.............................................3
FINANCIAL HIGHLIGHTS..........................................................4
THE FUND......................................................................5
INVESTMENT OBJECTIVE AND STRATEGIES AND RISK CONSIDERATIONS...................5
HOW TO INVEST IN THE FUND.....................................................6
Initial Purchase...........................................................6
Additional Investments.....................................................7
Automatic Investment Plan..................................................7
Tax Sheltered Retirement Plans.............................................7
Other Purchase Information.................................................8
HOW TO REDEEM SHARES..........................................................8
By Mail....................................................................8
By Telephone...............................................................8
Additional Information.....................................................9
SHARE PRICE CALCULATION.......................................................9
DIVIDENDS AND DISTRIBUTIONS..................................................10
TAXES........................................................................10
OPERATION OF THE FUND........................................................11
INVESTMENT POLICIES AND TECHNIQUES...........................................12
Equity Securities.........................................................12
Investment Techniques and Other Investments Loans of Portfolio Securities.13
GENERAL INFORMATION..........................................................13
Fundamental Policies......................................................13
Portfolio Turnover........................................................13
Shareholder Rights........................................................13
Year 2000 Issue...........................................................14
PERFORMANCE INFORMATION......................................................14
