Dear Fellow Shareholders:
We are pleased to present the second annual report of the Dobson Covered Call
Fund (DCCF). For the twelve month period ending July 31, 2000 the Fund's total
return was 3.59% and the average annual return since inception was 8.43%. This
compares with 8.97% and 10.98%, respectively, for the S&P 500 Index. The Fund
achieved these results with a volatility or risk level that was approximately
72% of the S&P 500 Index.
DCCF S&P 500 INDEX
Average Annual Return
Since Inception 8.43% 10.98%
One year 3.59% 8.97%
Standard Deviation (risk level) 3.06 4.27
[OBJECT OMITTED]
DCCF S&P 500 INDEX
03/24/99 $10,000 $10,000
03/31/99 $10,390 $10,104
04/30/99 $10,700 $10,495
05/31/99 $10,610 $10,247
06/30/99 $10,960 $10,811
07/31/99 $10,780 $10,474
08/31/99 $10,890 $10,421
09/30/99 $10,630 $10,138
10/31/99 $11,040 $10,779
11/30/99 $11,140 $10,998
12/31/99 $11,104 $11,645
01/31/00 $10,843 $11,060
02/29/00 $10,330 $10,851
03/31/00 $11,167 $11,913
04/30/00 $11,355 $11,554
05/31/00 $11,345 $11,316
06/30/00 $11,261 $11,595
07/31/00 $11,167 $11,414
This graph shows the value of a hypothetical initial investment of $10,000 in
the Fund and the S&P 500 Index on March 24, 1999 (inception of the Fund) and
held through July 31, 2000. The S&P 500 Index is a widely recognized unmanaged
index of common stock prices. The Index returns do not reflect expenses, which
have been deducted from the Fund's return. These performance figures include the
change in value of the stocks in the indices plus the reinvestment of dividends
and are not annualized. THE FUND'S RETURN REPRESENTS PAST PERFORMANCE AND DOES
NOT PREDICT FUTURE RESULTS.
[OBJECT OMITTED]
DCCF S&P 500 Index
Standard deviation (risk level) 3.06 4.27
Before we analyze the markets over the past twelve months, let us say a few
words about comparisons. We have chosen to compare the Fund's results with the
S&P 500 Index because the S&P 500 Index is one of the most widely recognized
benchmarks and, it is instructive in showing how the Fund performed compared to
the broad market. Most rating services, such as Lipper, will place the Fund in
the Equity Income category or Large Cap Value category. Those Lipper Indexes
returned -3.59% and 0.01%, respectively, over the past twelve months. We believe
the Equity Income category is the correct category because of the income
generated from selling individual call options.
Getting back to the market, this past year has been one of the strangest markets
we have seen in years. The explosiveness of the technology industry has been
especially amazing. From July 31, 1999 to December 31, 1999 the technology
industry appreciated over 40%. The next highest group was the consumer cyclical
industry, which appreciated approximately 10%. (Numbers are from the Dow Jones
U. S. Total Market Industry Groups that appear weekly in Barron's.) We point
this out because when one particular industry group, especially one that is a
large percentage of the S&P 500 Index, appreciates rapidly in a short period of
time, the Fund will tend to under-perform the Index. Let's show this with an
example. Assume a stock is priced at $50 and we can sell an option with a strike
price of $50 for $5. (Strike price is the price that the purchaser of the option
can buy the stock). If the stock appreciates 20% to $60 the optioned strategy
will appreciate 10%. The purchaser of the option will exercise it by paying the
seller $50 for the stock. The seller also keeps the $5 premium the purchaser
paid. The seller of the option now has $55, 10% higher than the $50 original
price of the stock.
Keep in mind that if the stock in our example only appreciated 10%, the return
of the optioned strategy would have been the same as the underlying stock but
with less risk. For any appreciation less than 10% in our example, the optioned
strategy would have been superior.
The next step is to apply our example to the Fund's performance. Looking at the
period from inception on March 24, 1999 through December 31, 1999 the Fund
appreciated 11% while the S&P 500 Index appreciated 17.5%. From July 31, 1999 to
December 31, 1999 the S&P 500 Index appreciated over 11% while the Fund
appreciated just over 3%. Remember that over this short period the technology
industry appreciated over 40%. As our example showed, the Fund will lag the S&P
500 Index when it appreciates rapidly over a short period of time. Our example
also suggests that the Fund will do better than the S&P 500 Index in a flat or
declining market. For the first seven months of this year the Fund appreciated
.57% while the S&P 500 Index declined 2%. This is what should be expected from
the Fund and what our example showed would happen.
The purpose of the above discussion is to explain in some detail how the Fund's
optioned strategy works but more importantly to show that the Fund is performing
just as expected. It should also be pointed out that a covered call strategy
reduces the volatility or risk. Looking at the standard deviation of returns,
the Fund is 71.6% as volatile as the S&P 500 Index while capturing approximately
80% of the return of the S&P 500 Index.
Looking forward, we do not expect the market to appreciate as rapidly as it did
from 1996 to 1999. We expect the market to return to its historical rates of
8-10% a year. Technology will still be a leader, but with stock valuations so
high in this industry, appreciation in technology stocks will moderate. The
other factor we see that will moderate stock appreciation is competition. With
the increasing globalization of the economy many more firms will be competing
for the same business. Competition will moderate profits and, therefore, stock
appreciation. Reviewing the example above and the Fund's results to date,
historical market returns will be very favorable for the Fund and its risk
reducing strategy.
Finally, it is sometimes difficult to see the performance on a relatively new
fund like this one. We suggest that you view www.maxfunds.com and enter the name
Dobson. This will show you daily price changes and other analyses.
We thank you for investing with us. Please don't hesitate to contact us if you
have questions or comments.
Charles L. Dobson
Portfolio Manager
<PAGE>
<TABLE>
<CAPTION>
DOBSON COVERED CALL FUND
SCHEDULE OF INVESTMENTS - JULY 31, 2000
<S> <C> <C>
COMMON STOCKS - 95.0% SHARES VALUE
AEROSPACE & DEFENSE - 3.2%
AEROSPACE & DEFENSE - 3.2%
Boeing Co. (a) 1,000 $ 49,000
-----------------
BASIC INDUSTRIES - 2.2%
PAPER & FOREST PRODUCTS - 2.2%
International Paper Co. (a) 1,000 34,000
-----------------
DURABLES - 6.7%
AUTOS & AUTO PARTS - 3.1%
Ford Motor Co. (a) 1,000 46,563
Visteon Corp. 131 1,833
-----------------
48,396
-----------------
PHOTOGRAPHIC EQUIPMENT & SUPPLIES - 3.6%
Eastman Kodak Co. (a) 1,000 54,875
-----------------
TOTAL DURABLES 103,271
-----------------
ENERGY - 8.6%
ENERGY SERVICES - 4.8%
Schlumberger Ltd. (a) 1,000 73,937
-----------------
OIL & GAS - 3.8%
Royal Dutch Petroleum Co. (a) (d) 1,000 58,250
-----------------
TOTAL ENERGY 132,187
-----------------
FINANCE - 13.6%
BANKS - 10.4%
Bank of America Corp. (a) 1,000 47,375
Citigroup, Inc. (a) 1,000 70,563
Wells Fargo & Co. (a) 1,000 41,312
-----------------
159,250
-----------------
FEDERAL & FEDERALLY-SPONSORED CREDIT AGENCIES - 3.2%
Federal National Mortgage Assoc. (a) 1,000 49,875
-----------------
TOTAL FINANCE 209,125
-----------------
HEALTH - 9.5%
DIVERSIFIED - 6.7%
American Home Products Corp. (a) 1,000 53,062
Bristol-Myers Squibb Co. (a) 1,000 49,625
-----------------
102,687
-----------------
DOBSON COVERED CALL FUND
SCHEDULE OF INVESTMENTS - JULY 31, 2000 - CONTINUED
COMMON STOCKS - CONTINUED SHARES VALUE
HEALTH - CONTINUED
DRUGS & PHARMACEUTICALS - 2.8%
Schering-Plough Corp. (a) 1,000 $ 43,188
-----------------
TOTAL HEALTH 145,875
-----------------
INDUSTRIAL MACHINERY & EQUIPMENT - 2.2%
INDUSTRIAL MACHINERY & EQUIPMENT - 2.2%
Caterpillar, Inc. (a) 1,000 34,063
-----------------
MEDIA & LEISURE - 4.5%
ENTERTAINMENT - 2.5%
Disney (Walt) Co. (a) 1,000 38,687
-----------------
RESTAURANTS - 2.0%
McDonald's Corp. (a) 1,000 31,500
-----------------
TOTAL MEDIA & LEISURE 70,187
-----------------
NON-DURABLES - 8.5%
BEVERAGES - 4.0%
Coca-Cola Co. (a) 1,000 61,312
-----------------
FOODS - 2.6%
Heinz (H.J.) Co. (a) 1,000 39,938
-----------------
HOUSEHOLD PRODUCTS - 1.9%
Gillette Co. (a) 1,000 29,188
-----------------
TOTAL NON-DURABLES 130,438
-----------------
RETAIL & WHOLESALE - 3.4%
BUILDING SUPPLIES - 3.4%
Home Depot, Inc. (a) 1,000 51,750
-----------------
TECHNOLOGY - 21.2%
COMMUNICATIONS EQUIPMENT - 11.3%
Cisco Systems, Inc. (a) (b) 2,000 130,875
Lucent Technologies, Inc. (a) 1,000 43,750
-----------------
174,625
-----------------
COMPUTER SERVICES & SOFTWARE - 4.9%
Oracle Corp. (a) (b) 1,000 75,188
-----------------
DOBSON COVERED CALL FUND
SCHEDULE OF INVESTMENTS - JULY 31, 2000 - CONTINUED
COMMON STOCKS - CONTINUED SHARES VALUE
TECHNOLOGY - CONTINUED
COMPUTERS & OFFICE EQUIPMENT - 2.8%
Dell Computer Corp. (a) (b) 1,000 $ 43,937
-----------------
ELECTRONIC INSTRUMENTS - 2.2%
Honeywell International, Inc. (a) 1,000 33,625
-----------------
TOTAL TECHNOLOGY 327,375
-----------------
UTILITIES - 11.4%
ELECTRIC UTILITY - 4.0%
Duke Energy Corp. 1,000 61,687
-----------------
TELEPHONE SERVICES - 7.4%
AT&T Corp. (a) 1,000 30,938
BellSouth Corp. (a) 1,000 39,812
SBC Communications, Inc. (a) 1,000 42,563
-----------------
113,313
-----------------
TOTAL UTILITIES 175,000
-----------------
TOTAL COMMON STOCKS (COST $1,561,027) 1,462,271
-----------------
PRINCIPAL
VALUE VALUE
Money Market Securities - 2.9%
Federated Prime Obligations Fund, 6.11% (c) (Cost $44,898) 44,898 $ 44,898
-----------------
TOTAL INVESTMENTS - 97.9% (COST $1,605,925) 1,507,169
-----------------
OTHER ASSETS LESS LIABILITIES - 2.1% 32,743
-----------------
TOTAL NET ASSETS - 100.0% $ 1,539,912
=================
(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 July 31, 2000.
(d) New York Registry
CALL OPTIONS WRITTEN JULY 31, 2000
SHARES
SUBJECT
COMMON STOCKS / EXPIRATION DATE @ EXERCISE PRICE TO CALL VALUE
AT&T Corp. / October 2000 @ 40 1,000 $ 500
American Home Products Corp. / September 2000 @ 60 1,000 1,063
Bank of America Corp. / August 2000 @ 55 1,000 125
BellSouth Corp. / August 2000 @ 50 1,000 62
Boeing Co. / August 2000 @ 40 1,000 9,250
Bristol-Myers Squibb Co. / September 2000 @ 60 1,000 625
Caterpillar, Inc. / August 2000 @ 45 1,000 187
Cisco Systems, Inc. / August 2000 @ 65 1,000 4,000
Cisco Systems, Inc. / August 2000 @ 70 1,000 1,750
Citigroup, Inc. / September 2000 @ 70 1,000 3,625
Coca-Cola Co. / August 2000 @ 55 1,000 7,125
Dell Computer Corp. / August 2000 @ 50 1,000 500
Disney (Walt) Co. / October 2000 @ 40 1,000 2,063
Eastman Kodak Co. / October 2000 @ 60 1,000 1,625
Federal National Mortgage Assoc. / August 2000 @ 60 1,000 62
Ford Motor Co. / Aug 2000 @ 50 1,000 563
Gillette Co. / September 2000 @ 35 1,000 313
Heinz (H.J.) Co. / September 2000 @ 45 1,000 344
Home Depot, Inc. / August 2000 @ 60 1,000 187
Honeywell International, Inc. / September 2000 @ 55 1,000 188
International Paper, Inc. / October 2000 @ 40 1,000 875
Lucent Technologies, Inc. / October 2000 @ 60 1,000 500
McDonald's Corp. / September 2000 @ 35 1,000 562
Oracle Corp. / August 2000 @ 75 1,000 4,500
Royal Dutch Petroleum Co. / September 2000 @ 60 1,000 1,250
SBC Communications, Inc. / October 2000 @ 55 1,000 437
Schering-Plough Corp. / August 2000 @ 50 1,000 187
Schlumberger Ltd. / August 2000 @ 80 1,000 938
Wells Fargo & Co. / September 2000 @ 45 1,000 1,000
-----------------
Total (premiums received $66,545) $ 44,406
=================
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
DOBSON COVERED CALL FUND JULY 31, 2000
STATEMENT OF ASSETS & LIABILITIES
ASSETS
Investment in securities (cost $1,605,925) $ 1,507,169
Cash 77
Dividends receivable 2,219
Interest receivable 434
Receivable for securities sold 79,967
Receivable from investment advisor
for reimbursed expenses 10,074
-------------------
TOTAL ASSETS 1,599,940
LIABILITIES
Accrued distribution fee payable $ 2,322
Other payables and accrued expenses 13,300
Covered call options written -
(premiums received $66,545) 44,406
-----------------
TOTAL LIABILITIES 60,028
-------------------
NET ASSETS $ 1,539,912
===================
Net Assets consist of:
Paid in capital 1,521,044
Accumulated undistributed net investment income 4,211
Accumulated undistributed net realized gain on investments 91,274
Net unrealized depreciation on investments (76,617)
-------------------
NET ASSETS, for 144,342 shares $ 1,539,912
===================
NET ASSET VALUE
Net Assets
Offering price and redemption price per share ($1,539,912 / 144,342) $ 10.67
===================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DOBSON COVERED CALL FUND
STATEMENT OF OPERATIONS FOR THE
YEAR ENDED JULY 31, 2000
<S> <C> <C>
INVESTMENT INCOME
Dividend income $ 22,382
Interest income 4,703
---------------
TOTAL INCOME 27,085
EXPENSES
Investment advisory fees 0
Administration fees 30,000
Transfer agent fees 14,126
Custodian fees 11,270
Pricing & bookkeeping fees 9,700
Audit fees 5,200
Legal fees 5,025
Distribution fees 1,287
Trustees' fees 2,055
Shareholder reports 1,507
Registration fees 1,340
Insurance expense 366
------------------
Total expenses before reimbursement 81,876
Reimbursed expenses (59,422)
------------------
Total operating expenses 22,454
---------------
NET INVESTMENT INCOME 4,631
---------------
REALIZED & UNREALIZED GAIN (LOSS)
Net realized gain on investment securities 88,905
Net realized gain on options transactions 64,001
Change in net unrealized appreciation (depreciation)
on investment securities (105,243)
------------------
Net gain on investment securities & options transactions 47,663
---------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 52,294
===============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DOBSON COVERED CALL FUND
STATEMENT OF CHANGES IN NET ASSETS
<S> <C> <C>
FOR THE FOR THE
YEAR ENDED PERIOD ENDED
JULY 31, 2000 JULY 31, 1999 (A)
-------------------- ----------------------
Increase (Decrease) in Net Assets
OPERATIONS
Net investment income $ 4,631 $ 1,310
Net realized gain on investment securities 88,905 3,690
Net realized gain on options transactions 64,001 929
Change in net unrealized appreciation (depreciation) (105,243) 28,626
-------------------- ----------------------
Net increase in net assets resulting from operations 52,294 34,555
-------------------- ----------------------
DISTRIBUTIONS TO SHAREHOLDERS
From investment income (1,730) 0
From net realized gain (66,251) 0
-------------------- ----------------------
Total Distributions (67,981) 0
-------------------- ----------------------
SHARE TRANSACTIONS
Net proceeds from sale of shares 251,616 1,340,688
Shares issued in reinvestment 67,981 0
Shares redeemed (139,241) 0
-------------------- ----------------------
NET INCREASE IN NET ASSETS RESULTING
FROM SHARE TRANSACTIONS 180,356 1,340,688
-------------------- ----------------------
TOTAL INCREASE IN NET ASSETS 164,669 1,375,243
-------------------- ----------------------
Net Assets
Beginning of period 1,375,243 0
-------------------- ----------------------
End of period [including accumulated undistributed net
investment income of $4,211 and $1,310, respectively] $ 1,539,912 $ 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 FOR THE
YEAR ENDED PERIOD ENDED
JULY 31, 2000 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 0.03 0.01
Net realized and unrealized gain 0.35 0.77
--------------------- --------------------
Total from investment operations 0.38 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 $ 10.67 $ 10.78
===================== ====================
TOTAL RETURN 3.59% 7.80% (b)
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000) $1,540 $1,375
Ratio of expenses to average net assets 1.50% 1.50% (a)
Ratio of expenses to average net assets
before reimbursement 5.47% 9.77% (a)
Ratio of net investment income to
average net assets 0.31% 0.32% (a)
Ratio of net investment income to
average net assets before reimbursement (3.66)% (7.95)% (a)
Portfolio turnover rate 31.75% 47.01% (a)
(a) Annualized
(b) For a period of less than a full year, the total return is not annualized.
(c) March 24, 1999 (commencement of operations) to July 31, 1999
</TABLE>
<PAGE>
DOBSON COVERED CALL FUND
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2000
NOTE 1. ORGANIZATION
Dobson Covered Call Fund (the "Fund") was organized as a series of the
AmeriPrime Funds (the "Trust") on March 22, 1999 and commenced operations on
March 24, 1999. The Trust is established under the laws of Ohio by an Agreement
and Declaration of Trust dated August 8, 1995 (the "Trust Agreement"). 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 total return over the long term. 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.
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.
DOBSON COVERED CALL FUND
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2000 - CONTINUED
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
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.
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 year
ended July 31, 2000, the Advisor received fees of $0 from the Fund. For the year
ended July 31, 2000, the Advisor reimbursed expenses of $59,422. The director of
the Advisor is also a shareholder of the Fund.
The Fund retains AmeriPrime Financial Services, Inc. (the "Administrator"),
a wholly owned subsidiary of Unified Financial Services, Inc., to manage the
Fund's business affairs and provide the Fund with administrative services,
including all regulatory reporting and necessary office equipment and personnel.
The Administrator receives a monthly fee from the Fund equal to an annual rate
of 0.10% of the Fund's assets under $50 million, 0.075% of the Fund's assets
from $50 million to $100 million, and 0.050% of the Fund's assets over $100
million (subject to a minimum fee of $2,500 per month). For the year ended July
31, 2000, the Administrator received fees of $30,000 from the Fund for
administrative services provided to the Fund.
The Fund retains Unified Fund Services, Inc. ("Unified"), a wholly owned
subsidiary of Unified Financial Services, Inc., to act as the Fund's transfer
agent and fund accountant. For its services as transfer agent, Unified receives
a monthly fee from the Fund of $1.20 per shareholder (subject to a minimum
monthly fee of $750). For the year ended July 31, 2000, Unified received fees of
$14,126 from the Fund for transfer agent services provided to the Fund. For its
services as fund accountant, Unified receives an annual fee from the Fund equal
to 0.0275% of the Fund's assets up to $100 million, 0.0250% of the Fund's assets
from $100 million to $300 million, and 0.0200% of the Fund's assets over $300
million (subject to various monthly minimum fees, the maximum being $2,000 per
month for assets of $20 million to $100 million). For the year ended July 31,
2000, Unified received fees of $9,700 from the Fund for fund accounting services
provided to the Fund.
DOBSON COVERED CALL FUND
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2000 - CONTINUED
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
The Fund retains AmeriPrime Financial Securities, Inc. ("the Distributor"),
a wholly owned subsidiary of Unified Financial Services, Inc., 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. The
distribution expense for the period August 1, 1999 through December 9, 1999 was
$1,287. Effective December 10, 1999 the 12b-1 plan was inactivated. Certain
members of management of the Administrator and the Distributor are also members
of management of the Trust.
NOTE 4. SHARE TRANSACTIONS
As of July 31, 2000, there were an unlimited number of authorized shares
for the Fund. Paid in capital at July 31, 2000 was $1,521,044.
Transactions in shares were as follows:
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
FOR THE YEAR ENDED FOR THE PERIOD MARCH 24, 1999
JULY 31, 2000 (COMMENCEMENT OF OPERATIONS) TO
JULY 31, 1999
SHARES DOLLARS SHARES DOLLARS
Shares sold 24,319 $251,616 127,555 $1,340,688
Shares issued in
reinvestment 6,425 67,981 0 0
Shares redeemed
(13,957) (139,241) 0 0
-------- ----------- ----------- ------------
16,787 $180,356 127,555 $1,340,688
======== =========== =========== ============
</TABLE>
<PAGE>
NOTE 5. INVESTMENTS
For the year ended July 31, 2000, purchases and sales of investment
securities, other than short-term investments, aggregated $581,148 and $463,184,
respectively. As of July 31, 2000, the gross unrealized appreciation for all
securities totaled $199,680 and the gross unrealized depreciation for all
securities totaled $276,297 for a net unrealized depreciation of $76,617. The
aggregate cost of securities for federal income tax purposes at July 31, 2000
was $1,605,925.
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.
DOBSON COVERED CALL FUND
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2000 - CONTINUED
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 July 31, 2000, Charles L.
Dobson, President of the Advisor, beneficially owned in aggregate more than 72%
of the Fund.
NOTE 8. CALL OPTIONS WRITTEN
As of July 31, 2000, portfolio securities valued at $1,398,751 were held in
escrow by the custodian as cover for call options written by the Fund.
Transactions in options written during the year ended July 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 1,530 383,633
Options written due to stock splits 10 0
Options terminated in closing purchase transactions (570) (163,625)
Options expired (860) (198,706)
Options exercised (60) (26,665)
------- ---------
Options outstanding at July 31, 2000 290 $66,545
======= =========
</TABLE>
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To The Shareholders and
Board of Trustees
Dobson Covered Call Fund (a series of the AmeriPrime Funds)
We have audited the accompanying statement of assets and liabilities of the
Dobson Covered Call Fund, including the schedule of portfolio investments, as of
July 31, 2000, and the related statement of operations for the year then ended,
the statement of changes in net assets and the financial highlights for the year
then ended, and the period from March 24, 1999 to July 31, 1999 in the period
then ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments and cash held as
of July 31, 2000 by correspondence with the custodian and broker. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Dobson Covered Call Fund as of July 31, 2000, the results of its operations for
the year then ended, the changes in its net assets and the financial highlights
for the year then ended, and the period from March 24, 1999 to July 31, 1999 in
the period then ended, in conformity with generally accepted accounting
principles.
McCurdy & Associates CPA's, Inc.
Westlake, Ohio 44145
August 18, 2000
