Dear Fellow Shareholder,
We are pleased to present the semi-annual report of the Dobson Covered Call Fund
as of January 31, 2000. For the six-month period the Fund returned .6% while the
S&P 500 Index returned 5.6%. From inception the Fund returned 8.4% while the S&P
500 Index returned 11%. The Fund's standard deviation from inception was 2.22
compared with 4.04 for the Index. This is a risk level that is 55% of the Index.
Clearly the major topic of interest has been the performance of the NASDAQ this
past six months. Its rapid advance has been surprising to say the least. This
unusual dispersion, where a relatively few stocks appreciate at enormous rates
while the overwhelming majority of stocks have small or negative returns, tends
to distort the overall market return. This was especially evident in the month
of December. Dispersions like this occur occasionally in the market but we
haven't seen anything this severe. Some of you may remember the energy crisis of
the 1980's when you couldn't pay enough for energy stocks. Eventually unusual
dispersions abate although no one can predict when.
As can be seen in the accompanying report the Fund holds technology stocks in
approximately the same percentage as the S&P 500 Technology sector. In hindsight
it would have been better to have 100% of the portfolio in technology. Obviously
when a particular sector or a few stocks are over-weighted in a portfolio, risk
is increased. Since the purpose of a covered call strategy is to reduce risk or
volatility, over-weighting is not an investment strategy we follow. That is not
to say an investor should not invest in the technology sector. Just like this
Fund is diversified, we believe investors should also be diversified among
several investment styles according to their risk tolerance. We will continue to
do what we do best which is to select the best stock/option combination that
provides a risk or volatility that is approximately 60% of the S&P 500 Index.
We welcome your comments and questions. Thank you for investing with us.
Charles L. Dobson
Portfolio Manager
<PAGE>
<TABLE>
<CAPTION>
DOBSON COVERED CALL FUND
SCHEDULE OF INVESTMENTS - JANUARY 31, 2000
(UNAUDITED)
<S> <C> <C>
COMMON STOCKS - 94.9% SHARES VALUE
BASIC INDUSTRIES - 3.2%
PAPER & FOREST PRODUCTS - 3.2%
International Paper Co. (a) 1,000 $ 47,625
-----------------
DURABLES - 3.3%
AUTOS & AUTO PARTS - 3.3%
Ford Motor Co. (a) 1,000 49,750
-----------------
ENERGY - 8.2%
ENERGY SERVICES - 4.1%
Schlumberger Ltd. (a) 1,000 61,062
-----------------
OIL & GAS - 4.1%
Royal Dutch Petroleum ADR (a) 1,000 55,063
Transocean Sedco Forex, Inc. 193 6,140
-----------------
61,203
-----------------
TOTAL ENERGY 122,265
-----------------
FINANCE - 13.8%
BANKS - 9.8%
Bank of America Corp. (a) 1,000 48,437
Citigroup, Inc. (a) 1,000 57,563
Wells Fargo, Inc. (a) 1,000 40,000
-----------------
146,000
-----------------
FEDERAL & FEDERALLY-SPONSORED CREDIT AGENCIES - 4.0%
Fannie Mae (a) 1,000 59,938
-----------------
TOTAL FINANCE 205,938
-----------------
HEALTH - 10.5%
DIVERSIFIED - 7.6%
American Home Products Corp. 1,000 47,063
Bristol-Myers Squibb Co. (a) 1,000 66,000
-----------------
113,063
-----------------
DRUGS & PHARMACEUTICALS - 2.9%
Schering-Plough Corp. (a) 1,000 44,000
-----------------
TOTAL HEALTH 157,063
-----------------
INDUSTRIAL MACHINERY & EQUIPMENT - 2.8%
INDUSTRIAL MACHINERY & EQUIPMENT - 2.8%
Caterpillar, Inc. (a) 1,000 42,437
-----------------
DOBSON COVERED CALL FUND
SCHEDULE OF INVESTMENTS - JANUARY 31, 2000 - CONTINUED
(UNAUDITED)
COMMON STOCKS - CONTINUED SHARES VALUE
MEDIA & LEISURE - 4.9%
ENTERTAINMENT - 2.4%
Disney (Walt) Co. (a) 1,000 $ 36,250
-----------------
RESTAURANTS - 2.5%
McDonald's Corp. (a) 1,000 37,188
-----------------
TOTAL MEDIA & LEISURE 73,438
-----------------
NON-DURABLES - 8.9%
BEVERAGES - 3.9%
Coca-Cola Co. (a) 1,000 57,437
-----------------
FOODS - 2.5%
Heinz (H.J.) Co. (a) 1,000 37,187
-----------------
HOUSEHOLD PRODUCTS - 2.5%
Gillette Co. (a) 1,000 37,625
-----------------
TOTAL NON-DURABLES 132,249
-----------------
RETAIL & WHOLESALE - 5.7%
BUILDING SUPPLIES - 5.7%
Home Depot, Inc. (a) 1,500 84,469
-----------------
TECHNOLOGY - 20.2%
COMMUNICATIONS EQUIPMENT - 11.0%
Cisco Systems, Inc. (a) (b) 1,000 109,500
Lucent Technologies, Inc. (a) 1,000 55,250
-----------------
164,750
-----------------
COMPUTER SERVICES & SOFTWARE - 3.4%
Oracle Corp. (a) (b) 1,000 49,953
-----------------
COMPUTERS & OFFICE EQUIPMENT - 2.6%
Dell Computer Corp. (a) (b) 1,000 38,437
-----------------
ELECTRONIC INSTRUMENTS - 3.2%
Honeywell International, Inc. (a) 1,000 48,000
-----------------
TOTAL TECHNOLOGY 301,140
-----------------
DOBSON COVERED CALL FUND
SCHEDULE OF INVESTMENTS - JANUARY 31, 2000 - CONTINUED
(UNAUDITED)
COMMON STOCKS - CONTINUED
UTILITIES - 13.4%
ELECTRIC UTILITY - 3.9%
Duke Energy Corp. 1,000 $ 57,750
-----------------
TELEPHONE SERVICES - 9.5%
AT&T Corp. (a) 1,000 52,500
BellSouth Corp. (a) 1,000 46,875
SBC Communications, Inc. (a) 1,000 43,000
-----------------
142,375
-----------------
TOTAL UTILITIES 200,125
-----------------
TOTAL COMMON STOCKS (COST $1,472,475) 1,416,499
-----------------
PRINCIPAL
VALUE VALUE
MONEY MARKET SECURITIES - 7.3%
Federal Prime Obligation, 5.35% (c) (Cost $109,275) $ 109,275 $ 109,275
-----------------
TOTAL INVESTMENTS - 102.2% (Cost $1,581,750) 1,525,774
-----------------
Liabilities in excess of other assets - (2.2%) (32,671)
-----------------
Total Net Assets - 100.0% $ 1,493,103
=================
(a) Security is segregated as collateral for options written.
(b) Non-income producing
(c) Variable rate security; the coupon rate shown represents the rate at January 31, 2000.
</TABLE>
<TABLE>
<CAPTION>
CALL OPTIONS WRITTEN JANUARY 31, 2000
<S> <C> <C>
SHARES
SUBJECT
COMMON STOCKS / EXPIRATION DATE @ EXERCISE PRICE TO CALL VALUE
AT&T Corp. / April 2000 @ 55 1,000 $ 3,000
Bank of America Corp. / March 2000 @ 50 1,000 2,500
BellSouth Corp. / April 2000 @ 50 1,000 1,688
Bristol-Myers Squibb, Inc. / March 2000 @ 70 1,000 2,437
Caterpillar, Inc. / March 2000 @ 50 1,000 688
Cisco Systems, Inc. / February 2000 @ 115 1,000 3,875
Citigroup, Inc. / March 2000 @ 55 1,000 5,000
Coca-Cola Co. / May 2000 @ 70 1,000 875
Dell Computer Corp. / February 2000 @ 45 1,000 313
Disney (Walt) Co. / February 2000 @ 35 1,000 2,125
Fannie Mae / March 2000 @ 65 1,000 1,312
Ford Motor Co. / March 2000 @ 55 1,000 750
Gillette Co. / March 2000 @ 45 1,000 500
Heinz (H.J.) Co. / March 2000 @ 40 1,000 625
Home Depot, Inc. / February 2000 @ 100 1,000 219
Honeywell International, Inc. / February 2000 @ 60 1,000 63
International Paper, Inc. / April 2000 @ 55 1,000 1,375
Lucent Technologies, Inc. / February 2000 @ 60 1,000 812
McDonald's Corp. / March 2000 @ 45 1,000 250
Oracle Corp. / February 2000 @ 55 1,000 1,875
Royal Dutch Petroleum ADR / April 2000 @ 65 1,000 437
SBC Communications, Inc. / April 2000 @ 50 1,000 1,625
Schering-Plough, Inc. / February 2000 @ 50 1,000 500
Schlumberger Ltd. / February 2000 @ 60 1,000 8,250
Wells Fargo, Inc. / March 2000 @ 40 1,000 2,312
-----------------
Total (premiums received $58,436) $ 43,406
=================
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
DOBSON COVERED CALL FUND JANUARY 31, 2000
STATEMENT OF ASSETS & LIABILITIES
(UNAUDITED)
ASSETS
Investment in securities (cost $1,581,750) $ 1,525,774
Dividends receivable 2,171
Interest receivable 370
Receivable for securities sold 96,147
Receivable from investment advisor
for reimbursed expenses 5,230
-------------------
TOTAL ASSETS 1,629,692
LIABILITIES
Accrued investment advisory fee payable $ 0
Other payables and accrued expenses 9,288
Payable for securities purchased 83,895
Covered call options written -
premiums received $58,436 43,406
-----------------
TOTAL LIABILITIES 136,589
-------------------
NET ASSETS $ 1,493,103
===================
Net Assets consist of:
Paid in capital 1,519,222
Accumulated undistributed net investment income 759
Accumulated undistributed net realized gain on investments 54,625
Accumulated undistributed net realized loss on options transactions (40,556)
Net unrealized depreciation on investments (40,947)
-------------------
NET ASSETS, for 144,164 shares $ 1,493,103
===================
NET ASSET VALUE
Net Assets
Offering price and redemption price per share ($1,493,103/144,164) $ 10.36
===================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DOBSON COVERED CALL FUND
STATEMENT OF OPERATIONS FOR THE
SIX MONTHS ENDED JANUARY 31, 2000
(UNAUDITED)
<S> <C> <C>
INVESTMENT INCOME
Dividend income $ 10,038
Interest income 2,214
---------------
TOTAL INCOME 12,252
EXPENSES
Investment advisory fees 0
Administration fees 15,000
Legal fees 10,441
Transfer agent fees 6,915
Custodian fees 5,438
Pricing & bookkeeping fees 4,800
Audit fees 2,750
Shareholder reports 1,960
Trustees' fees 1,482
Registration fees 1,340
------------------
Total expenses before reimbursement 50,126
Reimbursed expenses (39,053)
------------------
Total operating expenses 11,073
---------------
NET INVESTMENT INCOME 1,179
---------------
REALIZED & UNREALIZED GAIN (LOSS)
Net realized gain on investment securities 56,345
Net realized gain on options transactions 19,355
Change in net unrealized appreciation (depreciation)
on investment securities (69,572)
------------------
Net gain on investment securities 6,128
---------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 7,307
===============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DOBSON COVERED CALL FUND
STATEMENT OF CHANGES IN NET ASSETS
<S> <C> <C>
FOR THE
SIX MONTHS ENDED FOR THE
JANUARY 31, 2000 PERIOD ENDED
(UNAUDITED) JULY 31, 1999 (A)
-------------------- ----------------------
Increase (Decrease) in Net Assets
OPERATIONS
Net investment income $ 1,179 $ 1,310
Net realized gain on investment securities 56,345 3,690
Net realized gain on options transactions 19,355 929
Change in net unrealized appreciation (depreciation) (69,572) 28,626
-------------------- ----------------------
Net increase in net assets resulting from operations 7,307 34,555
-------------------- ----------------------
DISTRIBUTIONS TO SHAREHOLDERS
From investment income (1,730) -
From net realized gain (66,251) -
-------------------- ----------------------
Total Distributions (67,981) -
-------------------- ----------------------
SHARE TRANSACTIONS
Net proceeds from sale of shares 113,957 1,340,688
Shares issued in reinvestment 67,980 -
Shares redeemed (3,403) -
-------------------- ----------------------
NET INCREASE IN NET ASSETS RESULTING
FROM SHARE TRANSACTIONS 178,534 1,340,688
-------------------- ----------------------
TOTAL INCREASE IN NET ASSETS 117,860 1,375,243
-------------------- ----------------------
Net Assets
Beginning of period 1,375,243 -
-------------------- ----------------------
End of period [including accumulated undistributed net
investment income of $759 and $1,310, respectively] $ 1,493,103 $ 1,375,243
==================== ======================
(a) March 24, 1999 (commencement of operations) to July 31, 1999
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DOBSON COVERED CALL FUND
FINANCIAL HIGHLIGHTS
<S> <C> <C>
FOR THE SIX
MONTHS ENDED FOR THE
JANUARY 31, 2000 PERIOD ENDED
(UNAUDITED) JULY 31, 1999 (C)
--------------------- --------------------
SELECTED PER SHARE DATA
Net asset value, beginning of period $ 10.78 $ 10.00
--------------------- --------------------
Income from investment operations
Net investment income 0.01 0.01
Net realized and unrealized gain 0.06 0.77
--------------------- --------------------
Total from investment operations 0.07 0.78
--------------------- --------------------
Less Distributions
From net investment income (0.01) 0.00
From net realized gain (0.48) 0.00
--------------------- --------------------
Total Distributions (0.49) 0.00
--------------------- --------------------
Net asset value, end of period $ 10.36 $ 10.78
===================== ====================
TOTAL RETURN (b) 0.58% 7.80%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000) $1,493 $1,375
Ratio of expenses to average net assets 1.50% (a) 1.50% (a)
Ratio of expenses to average net assets
before reimbursement 6.79% (a) 9.77% (a)
Ratio of net investment income to
average net assets 0.16% (a) 0.32% (a)
Ratio of net investment income to
average net assets before reimbursement (5.13)(a) (7.95)(a)
Portfolio turnover rate 40.76% (a) 47.01% (a)
(a) Annualized
(b) For periods of less than a full year, total returns are not annualized.
(c) March 24, 1999 (commencement of operations) to July 31, 1999
</TABLE>
<PAGE>
DOBSON COVERED CALL FUND
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2000
(UNAUDITED)
NOTE 1. ORGANIZATION
Dobson Covered Call Fund (the "Fund") was organized as a series of the
AmeriPrime Funds, an Ohio business trust (the "Trust"), on March 22, 1999 and
commenced operations on March 24, 1999. The Fund is registered under the
Investment Company Act of 1940, as amended, as a diversified open-end management
investment company. The Fund's investment objective is to achieve above average
return consistent with lower risk than the S&P 500 Index. The Declaration of
Trust permits the Trustees to issue an unlimited number of shares of beneficial
interest of separate series without par value.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Fund in the preparation of its financial statements.
SECURITIES VALUATIONS- 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, in conformity with guidelines adopted by and subject to
review of the Board of Trustees of the Trust (the "Board").
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. 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.
DOBSON COVERED CALL FUND
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2000 - (UNAUDITED) - CONTINUED
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
OPTION WRITING- When the Fund writes an option, an amount equal to the premium
received by the Fund is recorded as a liability and is subsequently adjusted to
the current fair value of the option written. Premiums received from writing
options that expire unexercised are treated by the Fund on the expiration date
as realized gains from investments. The difference between the premium and the
amount paid on effecting a closing purchase transaction, including brokerage
commissions, is also treated as a realized gain, or if the premium is less than
the amount paid for the closing purchase transaction, as a realized loss. If a
call option is exercised, the premium is added to the proceeds from the sale of
the underlying security or currency in determining whether the Fund has realized
a gain or loss. If a put option is exercised, the premium reduces the cost basis
of the securities purchased by the fund. The Fund as writer of an option bears
the market risk of an unfavorable change in the price of the security underlying
the written option.
FEDERAL INCOME 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.
DIVIDENDS AND DISTRIBUTIONS- The Fund intends to distribute substantially all of
its net investment income as dividends to its shareholders on an annual basis.
The Fund intends to distribute its net long-term capital gains and its net
short-term capital gains at least once a year.
OTHER- The Fund follows industry practice and records security transactions on
the trade date. The specific identification method is used for determining gains
or losses for financial statements and income tax purposes. Dividend income is
recorded on the ex-dividend date and interest income is recorded on an accrual
basis. Discounts and premiums on securities purchased are amortized over the
life of the respective securities.
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund retains Dobson Capital Management, Inc., (the "Advisor") to manage
the Fund's investments. The Advisor is a California corporation established in
September 1998. Charles L. Dobson is the president, Director and sole
shareholder of the advisor, and is primarily responsible for the day-to-day
management of the Fund's portfolio.
DOBSON COVERED CALL FUND
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2000 - (UNAUDITED) - CONTINUED
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
Under the terms of the management agreement, (the "Agreement"), the Advisor
manages the Fund's investments subject to approval of the Board of Trustees. As
compensation for its management services, the Fund is obligated to pay the
Advisor a fee computed and accrued daily and paid monthly at an annual rate of
0.80% of the average daily net assets of the Fund, less the amount total
operating expenses, including management fees, exceed 1.50% of the average value
of its daily net assets, to the extent the management fee equals zero. The
remaining portion of expenses will be reimbursed by the Advisor. For the six
months ended January 31, 2000, the Advisor received fees of $0 from the Fund.
For the six months ended January 31, 2000, the Advisor reimbursed expenses of
$39,053. Certain officers and directors of the Advisor are also officers and
directors of the Trust.
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 and
personnel. For the six months ended January 31, 2000, the Administrator received
fees of $15,000 from the Advisor for administrative services provided to the
Fund.
The Fund retains AmeriPrime Financial Securities, Inc. ("the Distributor")
to act as the principal distributor of the Fund's shares. The Fund has adopted a
plan, pursuant to Rule 12b-1 under the Investment Company Act of 1940, which
permits the Fund to pay directly, or reimburse the Fund's Advisor and
Distributor, for certain distribution and promotion expenses related to
marketing its shares, in an amount not to exceed 0.25% of the average daily net
assets of the Fund. There were no payments made to the Distributor for the six
months ended January 31, 2000. Certain members of management of the
Administrator and the Distributor are also members of management of the Trust.
NOTE 4. SHARE TRANSACTIONS
As of January 31, 2000, there were an unlimited number of authorized shares
for the Fund. Paid in capital at January 31, 2000 was $1,519,222.
DOBSON COVERED CALL FUND
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2000 - (UNAUDITED) - CONTINUED
NOTE 4. SHARE TRANSACTIONS - CONTINUED
Transactions in shares were as follows:
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED FOR THE PERIOD MARCH 24, 1999 (COMMENCEMENT
JANUARY 31, 2000 OF OPERATIONS) TO JULY 31, 1999
<S> <C> <C> <C> <C>
SHARES DOLLARS SHARES DOLLARS
Shares sold 10,504 $113,957 127,555 $1,340,688
Shares issued in
reinvestment 6,425 67,980 - -
Shares redeemed (320) (3,403) - -
-------- -------- -------- ----------
16,609 $178,534 127,555 $1,340,688
======== ======== ======== ==========
</TABLE>
<PAGE>
NOTE 5. INVESTMENTS
For the six months ended January 31, 2000, purchases and sales of
investment securities, other than short-term investments, aggregated $351,860
and $289,888, respectively. As of January 31, 2000, the gross unrealized
appreciation for all securities totaled $137,005 and the gross unrealized
depreciation for all securities totaled $177,952 for a net unrealized
depreciation of $40,947. The aggregate cost of securities for federal income tax
purposes at January 31, 2000 was $1,581,750.
NOTE 6. ESTIMATES
Preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
NOTE 7. RELATED PARTY TRANSACTIONS
The Advisor is not a registered broker-dealer of securities and thus does
not receive commissions on trades made on behalf of the Fund. The beneficial
ownership, either directly or indirectly, of more than 25% of the voting
securities of a Fund creates a presumption of control of the Fund, under Section
2(a)(9) of the Investment Company Act of 1940. As of January 31, 2000, Charles
L. Dobson, President of the Advisor, beneficially owned in aggregate more than
73% of the Fund.
DOBSON COVERED CALL FUND
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2000 - (UNAUDITED) - CONTINUED
NOTE 8. CALL OPTIONS WRITTEN
As of January 31, 2000, portfolio securities valued at $1,277,391 were held
in escrow by the custodian as cover for call options written by the Fund.
Transactions in options written during the six months ended January 31,
2000 were as follows:
<TABLE>
<S> <C> <C>
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
Options outstanding at July 31, 1999 240 $71,908
Options written 750 185,682
Options terminated in closing purchase transactions (300) (79,572)
Options expired (400) (102,972)
Options exercised (40) (16,610)
------------- --------------
Options outstanding at January 31, 2000 250 $58,436
============= ==============
</TABLE>
