<TABLE>
<CAPTION>
AAM EQUITY FUND
SCHEDULE OF INVESTMENTS - APRIL 30, 2000
(UNAUDITED)
<S> <C> <C>
COMMON STOCK - 95.9% SHARES VALUE
BASIC INDUSTRIES - 7.6%
MANUFACTURERS - DIVERSIFIED - 4.3%
Honeywell International, Inc. 1,300 $ 72,881
Tredegar Corp. 2,500 64,844
Tyco International Ltd. 1,200 55,125
------------------
192,850
------------------
METALS & MINING - 1.7%
Alcoa, Inc. 1,200 77,775
------------------
PAPER & FOREST PRODUCTS - 1.6%
Avery Dennison Corp. 1,075 70,547
------------------
TOTAL BASIC INDUSTRIES 341,172
------------------
CONSTRUCTION & REAL ESTATE - 2.5%
CONSTRUCTION - 2.5%
Martin Marietta Materials, Inc. 2,100 111,300
------------------
DURABLES - 7.0%
AUTOS & AUTO PARTS - 2.1%
Ford Motor Co. 1,750 95,703
------------------
CONSUMER ELECTRONICS - 4.9%
Circuit City Stores, Inc. - Circuit City Group 1,600 94,100
Koninklijke Philips Electronics N.V. (c) 2,800 124,950
------------------
219,050
------------------
TOTAL DURABLES 314,753
------------------
ELECTRONICS - 2.8%
SEMICONDUCTORS - 2.8%
Intel Corp. 1,000 126,812
------------------
ENERGY - 9.8%
ENERGY SERVICES - 4.5%
Halliburton Co. 2,000 88,375
Schlumberger Ltd. 1,500 114,844
------------------
203,219
------------------
OIL & GAS - 5.3%
BP Amoco PLC (d) 1,640 83,640
Chevron Corp. 1,000 85,750
Conoco Inc. - Class A 3,000 71,250
------------------
240,640
------------------
TOTAL ENERGY 443,859
------------------
AAM EQUITY FUND
SCHEDULE OF INVESTMENTS - APRIL 30, 2000 (UNAUDITED) - CONTINUED
COMMON STOCKS - CONTINUED SHARES VALUE
FINANCE - 12.3%
BANKS - 5.2%
CCB Financial Corp. 1,500 $ 59,437
Citigroup, Inc. 1,500 89,156
SunTrust Banks, Inc. 800 40,600
Wachovia Corp. 750 47,016
------------------
236,209
------------------
DIVERSIFIED - 2.6%
BB&T Corp. 2,500 66,563
Capital One Financial Corp. 1,125 49,219
------------------
115,782
------------------
INSURANCE - 4.5%
American International Group, Inc. 875 95,977
Berkshire Hathaway, Inc. - Class B (a) 25 47,903
Markel Corp. (a) 400 58,000
------------------
201,880
------------------
TOTAL FINANCE 553,871
------------------
HEALTH - 10.3%
DIVERSIFIED - 5.5%
American Home Products Corp. 1,800 101,137
Bristol-Myers Squibb Co. 1,250 65,547
Johnson & Johnson 1,000 82,500
------------------
249,184
------------------
DRUGS & PHARMACEUTICALS - 4.8%
Amgen, Inc. (a) 1,500 84,000
Merck & Co., Inc. 1,000 69,625
Schering-Plough Corp. 1,500 60,469
------------------
214,094
------------------
TOTAL HEALTH 463,278
------------------
INDUSTRIAL MACHINERY & EQUIPMENT - 2.6%
ELECTRICAL EQUIPMENT - 2.6%
General Electric Co. 750 117,938
------------------
MEDIA & LEISURE - 8.7%
BROADCASTING - 6.3%
AT&T Liberty Media Group - Class A (a) 1,775 88,639
Cox Communications Inc. - Class A (a) 1,500 64,125
Media General, Inc. - Class A 1,500 73,781
MediaOne Group, Inc. (a) 750 56,625
------------------
283,170
------------------
AAM EQUITY FUND
SCHEDULE OF INVESTMENTS - APRIL 30, 2000 (UNAUDITED) - CONTINUED
COMMON STOCKS - CONTINUED SHARES VALUE
MEDIA & LEISURE (CONTINUED)
ENTERTAINMENT - 2.4%
Disney (Walt) Co. 2,500 $ 108,281
------------------
TOTAL MEDIA & LEISURE 391,451
------------------
NON-DURABLES - 5.2%
BEVERAGES - 3.1%
Anheuser-Busch Cos., Inc. 975 68,798
Coca-Cola Co. 1,500 70,594
------------------
139,392
------------------
FOODS - 0.9%
Sara Lee Corp. 2,800 42,000
------------------
HOUSEHOLD PRODUCTS - 1.2%
Gillette Co. 1,500 55,500
------------------
TOTAL NON-DURABLES 236,892
------------------
RETAIL & WHOLESALE - 4.3%
DRUG STORES - 1.6%
Walgreen Co. 2,500 70,625
------------------
SPECIALTY - 2.7%
Sysco Corp. 1,600 60,200
Zale Corp. (a) 1,500 61,875
------------------
122,075
------------------
TOTAL RETAIL & WHOLESALE 192,700
------------------
TECHNOLOGY - 12.6%
COMPUTER SERVICES & SOFTWARE - 4.9%
Citrix Systems, Inc. (a) 1,200 73,275
EMC Corp. (a) 750 104,203
Microsoft Corp. (a) 600 41,850
------------------
219,328
------------------
COMPUTERS & OFFICE EQUIPMENT - 7.7%
3Com Corp. (a) 1,000 39,437
Cisco Systems, Inc. (a) 1,500 103,992
Hewlett-Packard Co. 700 94,500
International Business Machines Corp. 1,000 111,625
------------------
349,554
------------------
TOTAL TECHNOLOGY 568,882
------------------
AAM EQUITY FUND
SCHEDULE OF INVESTMENTS - APRIL 30, 2000 (UNAUDITED) - CONTINUED
COMMON STOCKS - CONTINUED SHARES VALUE
TELECOMMUNICATIONS - 3.3%
COMMUNICATIONS EQUIPMENT - 3.3%
Lucent Technologies, Inc. 975 $ 60,633
Motorola, Inc. 750 89,297
------------------
149,930
------------------
UTILITIES - 6.9%
NATURAL GAS - 2.5%
Enron Corp. 1,600 111,500
------------------
TELEPHONE SERVICES - 4.4%
AT&T Corp. 1,100 51,356
MCI WorldCom Inc. (a) 1,800 81,788
SBC Communications, Inc. 1,500 65,250
------------------
198,394
------------------
TOTAL UTILITIES 309,894
------------------
TOTAL COMMON STOCK - (COST $3,559,815) 4,322,732
------------------
PRINCIPAL
AMOUNT VALUE
MONEY MARKET SECURITIES - 3.5%
Firstar Treasury Fund, 5.00% (b) (Cost $158,152) 158,152 158,152
------------------
TOTAL INVESTMENTS - (COST $3,717,967) - 99.4% 4,480,884
------------------
OTHER ASSETS LESS LIABILITIES - 0.6% 26,198
------------------
TOTAL NET ASSETS - 100.0% $ 4,507,082
==================
(a) Non-income producing
(b) Variable rate security; the coupon rate shown represents the rate at April 30, 2000.
(c) American Depository Receipt
(d) American Depository Shares
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
AAM EQUITY FUND APRIL 30, 2000
STATEMENT OF ASSETS AND LIABILITIES
(UNAUDITED)
ASSETS
Investment in securities, at value (cost $3,717,967) $ 4,480,884
Dividends receivable 3,454
Interest receivable 600
Receivable from investment advisor for
reimbursed expenses 7,312
Deferred organizational costs 19,602
------------------
TOTAL ASSETS 4,511,852
LIABILITIES
Payable to custodian bank $ 4,770
-----------------
TOTAL LIABILITIES 4,770
------------------
NET ASSETS $ 4,507,082
==================
Net Assets consist of:
Paid in capital $ 3,817,761
Accumulated undistributed net investment income 4,232
Accumulated net realized loss on investments (77,828)
Net unrealized appreciation on investments 762,917
------------------
NET ASSETS, for 383,210 shares $ 4,507,082
==================
NET ASSET VALUE
Net Assets
Offering price and redemption price per share ($4,507,082 / 383,210) $ 11.76
==================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AAM EQUITY FUND
STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED APRIL 30, 2000
(UNAUDITED)
<S> <C> <C>
INVESTMENT INCOME
Dividend Income $ 24,523
Interest Income 5,072
-------------------
TOTAL INCOME 29,595
EXPENSES
Investment advisory fee 25,363
Organizational expenses 3,090
Trustees' fees 1,992
------------------
Total expenses before reimbursement 30,445
Reimbursed expenses (5,082)
------------------
Total operating expenses 25,363
-------------------
NET INVESTMENT INCOME 4,232
-------------------
REALIZED & UNREALIZED GAIN (LOSS)
Net realized gain on investment securities 14,512
Change in net unrealized appreciation (depreciation)
on investment securities 295,203
------------------
Net gain on investment securities 309,715
-------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 313,947
===================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AAM EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
<S> <C> <C>
SIX MONTHS
ENDED YEAR
APRIL 30, ENDED
2000 OCTOBER 31,
(UNAUDITED) 1999
----------------- -----------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income $ 4,232 $ 16,393
Net realized gain (loss) on investment securities 14,512 (54,500)
Change in net unrealized appreciation 295,203 568,946
----------------- -----------------
Net increase in net assets resulting from operations 313,947 530,839
----------------- -----------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (16,393) (7,205)
From net realized gains 0 0
----------------- -----------------
Total distributions (16,393) (7,205)
----------------- -----------------
SHARE TRANSACTIONS
Net proceeds from sale of shares 758,226 1,493,997
Shares issued in reinvestment of dividends 10,989 4,455
Shares redeemed (896,433) (537,268)
----------------- -----------------
Net increase (decrease) in net assets resulting
from share transactions (127,218) 961,184
----------------- -----------------
TOTAL INCREASE IN NET ASSETS 170,336 1,484,818
NET ASSETS
Beginning of period 4,336,746 2,851,928
----------------- -----------------
End of period [including accumulated undistributed net
investment income of $4,232 and $16,393, respectively] $ 4,507,082 $ 4,336,746
================= =================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AAM EQUITY FUND
FINANCIAL HIGHLIGHTS
<S> <C> <C> <C>
SIX MONTHS
ENDED YEAR PERIOD
APRIL 30, ENDED ENDED
2000 OCTOBER 31, OCTOBER 31,
(UNAUDITED) 1999 1998 (A)
----------------- ----------------- -----------------
SELECTED PER SHARE DAT
Net asset value, beginning of period $ 10.99 $ 9.43 $ 10.00
----------------- ----------------- -----------------
Income from investment operations
Net investment income 0.01 0.05 0.03
Net realized and unrealized gain (loss) 0.80 1.53 (0.60)
----------------- ----------------- -----------------
Total from investment operations 0.81 1.58 (0.57)
----------------- ----------------- -----------------
Distribution to shareholders from:
Net investment income (0.04) (0.02) 0.00
Net realized gains 0.00 0.00 0.00
----------------- ----------------- -----------------
Total distributions (0.04) (0.02) 0.00
----------------- ----------------- -----------------
Net asset value, end of period $ 11.76 $ 10.99 $ 9.43
================= ================= =================
TOTAL RETURN (b) 6.31% 16.74% (5.70)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000) $4,507 $4,337 $2,852
Ratio of expenses to average net assets 1.15% (c) 1.15% 1.14% (c)
Ratio of expenses to average net assets before reimbursement 1.38% (c) 1.35% 1.40% (c)
Ratio of net investment income to average net assets 0.19% (c) 0.43% 0.90% (c)
Ratio of net investment income to average net assets
before reimbursement (0.04)%(c) 0.23% 0.64% (c)
Portfolio turnover rate 28.34% (c) 27.34% 14.41% (c)
(a) June 30, 1998 (commencement of operations) to October 31, 1998
(b) For periods of less than a full year, total returns are not annualized.
(c) Annualized
</TABLE>
<PAGE>
AAM EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000 (UNAUDITED)
NOTE 1. ORGANIZATION
AAM Equity Fund (the "Fund") was organized as a series of the AmeriPrime
Funds, an Ohio business trust (the "Trust"), on June 30, 1998 and commenced
operations on November 1, 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 provide long-term capital
appreciation. The Declaration of Trust Agreement for the Fund permits the Board
of Trustees (the "Board") 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.
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.
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.
AAM EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000 (UNAUDITED) - CONTINUED
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
DIVIDENDS AND DISTRIBUTIONS - The Fund intends to comply with federal tax rules
regarding distribution of substantially all of its net investment income and
capital gains. These rules may cause multiple distributions during the course of
the 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 Appalachian Asset Management, Inc. (the "Advisor") to manage
the Fund's investments. The advisor is controlled by its President, Knox H.
Fuqua. Mr. Fuqua 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 and
pays all of the expenses of the Fund except brokerage commissions, taxes,
interest, fees and expenses of non-interested person trustees, and extraordinary
expenses, including organizational expenses. As compensation for its management
services and agreement to pay the Fund's expenses, the Fund is obligated to pay
the Advisor a fee computed and accrued daily and paid monthly at an annual rate
of 1.15% of the average daily net assets of the Fund. 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. For the
six months ended April 30, 2000, the Advisor received a fee of $25,363 from the
Fund. The Advisor has voluntarily agreed to reimburse other expenses to the
extent necessary to maintain total operating expenses at the rate of 1.15%. For
the six months ended April 30, 2000, the Advisor reimbursed expenses of $5,082.
There is no assurance that such reimbursement will continue in the future.
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 Advisor 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 six months
ended April 30, 2000, the Administrator received fees of $15,000 from the
Advisor for administrative services provided to the Fund.
AAM EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000 (UNAUDITED) - CONTINUED
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
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 Advisor of $1.20 per shareholder (subject to a minimum
monthly fee of $750). For the six months ended April 30, 2000, Unified received
fees of $7,746 from the Advisor for transfer agent services provided to the
Fund. For its services as fund accountant, Unified receives an annual fee from
the Advisor equal to 0.0275% of the Fund's assets up to $100 million, and
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 to $100 million). For the
six months ended April 30, 2000, Unified received fees of $4,800 from the
Advisor for fund accounting services provided to the Fund.
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. There were no payments made to the
Distributor for the six months ended April 30, 2000. Certain members of
management of the Administrator and the Distributor are also members of
management of the AmeriPrime Trust.
NOTE 4. SHARE TRANSACTIONS
As of April 30, 2000, there were an unlimited number of authorized shares
for the Fund. Paid in capital at April 30, 2000 was $3,817,761.
Transactions in shares were as follows:
<TABLE>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 2000 (UNAUDITED) OCTOBER 31, 1999
SHARES DOLLARS SHARES DOLLARS
Shares sold 67,671 $758,226 144,204 $1,493,997
Shares issued in reinvestment of
dividends 961 10,989 393 4,455
Shares redeemed (80,183) (896,433) (52,307) (537,268)
----------- ----------- ----------- ----------
(11,551) $(127,218) 92,290 $961,184
=========== =========== =========== ==========
</TABLE>
AAM EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000 (UNAUDITED) - CONTINUED
NOTE 5. INVESTMENTS
For the six months ended April 30, 2000, purchases and sales of investment
securities, other than short-term investments, aggregated $595,052 and $672,096,
respectively. At April 30, 2000, the unrealized appreciation for all securities
totaled $1,035,916 and the gross unrealized depreciation for all securities
totaled $272,999 for a net unrealized appreciation of $762,917. The aggregate
cost of securities for federal income tax purposes at April 30, 2000 was
$3,717,967.
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 April 30, 2000, National
Financial Services Corp. owned of record in aggregate more than 61% of the Fund.
<PAGE>
May 15, 2000
Dear Shareholder:
As of April 30, 2000, the Fund's portfolio contained 28 equities, with 98.5% of
the money in equity securities and 1.5% in cash. It is not too often that
someone rings a bell saying that it is time to do something, but recently that
has seemed to be the case with value investing. The last two weeks in March saw
the loss of three of the best-known value managers in the country to
"retirement." Robert Sanborn, Julian Robertson and William Sams were all
considered "gurus" in the investment arena just a few short years ago, having
built impressive records over decades. However, the growth and momentum market
of the last 24 months ruined their records and reputations. Yet, events like
this typically send the sign that a major turning point in market philosophy is
near.
In the late 1980s and early 1990s, the junk bond market was roiled in a bear
market, caused by both changing legislation and economic fundamentals. It was
during a relatively short period of time that the junk-laden institutions,
Columbia Savings, a formerly high-flying thrift, and First Executive, one of the
nation's largest insurers, were taken over by regulators. This signaled the end
of the bear market in junk bonds, which have since posted spectacular returns.
Clearly, the fall of these two well-known institutions, along with the demise of
Drexel Burnham Lambert, was, in hindsight, the perfect sign that a bottom had
been reached.
In the stock market today, there are many signs that the philosophy of buying a
company at substantially less than its intrinsic value has once again become a
very popular one on Wall Street. Major troubles at well-known ".com" names like
DRKOOP.COM and PEAPOD.COM have investors questioning the business-to-consumer
models that dominated the Internet for the past few years. This sector of the
marketplace, as well as a few others, has been an investor favorite over the
past eighteen months. Many people have eschewed the profitable well-managed
businesses that we concentrate on, to pursue firms with questionable prospects
of profitability. Ultimately, however, profits are what business is all about,
and those are what will eventually determine the price of stocks over the long
term.
In my opinion, it is this emphasis on buying profits cheaply that led to the
career demise of the three legendary investors mentioned above. It has always
been my opinion that smart people do not suddenly turn stupid, and vice versa.
Clearly, circumstances change over a period of time, whether they are political,
economic, or otherwise. However, in a capitalist economy, the striving is always
for profit. That has not been the case with the stocks that drew investor
attention over the last few years. In fact, profits were considered a major
negative for many in the sector; they were interpreted to mean that the company
was not investing enough to grow the business. Those who rejected this logic
paid the price by not achieving as notable results as their "buy and forget the
fundamentals" brethren. For that, investors punished them through large
withdrawals of funds that eventually ended those managers' careers. However,
this market has created a potential once-in-a-decade opportunity for profits.
The reason is fairly simple.
It is well known that, once all of the sellers exit a security or a market,
prices have bottomed and the upside lies ahead. Clearly, that is the situation
with value investing. Liquidation of value-oriented securities reached a climax
in the fourth quarter of 1999 and early 2000, just as interest in
growth/momentum issues had reached its peak. This could be looked at as the
classic "no one left to buy/no one left to sell" situation that creates
opportunity. Remember $15,000 condos in Houston during the Texas real estate
bust, or 20% junk bond yields or 18% treasury bonds? This same multi-year
profitability seems to be present today. That is why we have continued to
accumulate the value-oriented securities that are held by the Fund. While
predicting a bottom for any type of market is always precarious, it seems that
the time for that may be now.
It is important to remember that these situations do not turn around
immediately, but they are going to start building momentum of their own. While
the smart money can see this in the market, it will be quite a while before the
general public begins to realize it. The key to making this as lucrative as
possible is to stay focused on fundamentals, which are the values underlying
these securities. By continuing to accumulate these stock positions at
rock-bottom prices, we are fulfilling part of a tried-and-true axiom of
investing: buy low. As people refocus their sights on profitability and bid the
prices of our securities upward, we will be able to fulfill the second part of
that axiom: sell high.
PERFORMANCE DISCUSSION
The Fund generated a total return of 17.78% for the six months ended April 30,
2000. The Russell 2000 Index return was 18.72%, and the S&P 600 Small-Cap Index
finished with a return of 17.18%.
The performance of the Russell 2000 and S&P 600 was primarily attributable to
investors pouring funds into the Internet, computer technology, and
biotechnology sectors of the marketplace. This rise of speculative activity
highlighted the momentum-based market in which the Fund has operated almost
since its creation. It is clear that these sectors, which lack profitability,
are filled with companies of dubious value, and have very little realistic
chance of long-term viability. I believe that it will be extremely tough for
these areas to repeat their incredible showing.
Clearly, performance in the Fund was fueled by the meteoric rise of the Titan
Corporation into national prominence. This company was the #1 performing stock
on the NYSE in 1999 and was the largest position in the Fund. Our cost of
slightly over five dollars per share represented excellent timing when it was
initially purchased in 1998. We believe that his company will be a strong
performer for the Fund over the next few years.
Another stock that should be noted for its performance is Cyberonics. Cyberonics
is a leading medical device company based in Houston. The firm has a product
approved for the treatment of epilepsy and is currently exploring the
possibility of treating clinical depression, obesity, and Alzheimer's disease
with the product. We also believe this will be a good stock over the next few
years.
RETURNS FOR THE SIX MONTHS ENDED APRIL 30, 2000
FUND/INDEX SIX MONTHS AVERAGE ANNUAL RETURN
SINCE INCEPTION
JUNE 30, 1997
CORBIN SMALL-CAP VALUE FUND 17.78% -5.69%
S&P 600 SMALL-CAP INDEX 17.18% 9.62%
RUSSELL 2000 INDEX 18.72% 10.20%
CORBIN SMALL-CAP S&P 600 RUSSELL 2000
FUND INDEX INDEX
6/30/97 10,000 10,000 10,000
7/31/97 10,310 10,629 10,467
8/31/97 10,520 10,897 10,703
9/30/97 11,330 11,617 11,485
10/31/97 11,030 11,116 10,975
11/30/97 11,210 11,035 10,900
12/31/97 10,917 11,257 11,095
1/31/98 10,577 11,037 10,926
2/28/98 10,853 12,043 11,746
3/31/98 11,258 12,503 12,239
4/30/98 11,173 12,577 12,306
5/30/98 10,619 11,910 11,646
6/30/98 10,513 11,945 11,680
7/31/98 9,597 11,031 10,726
8/31/98 7,402 8,905 8,646
9/30/98 7,189 9,448 9,272
10/31/98 7,051 9,887 9,652
11/30/98 6,380 10,443 10,162
12/31/98 6,753 11,109 10,796
1/31/99 6,593 10,969 10,936
2/28/99 6,114 9,981 10,055
3/31/99 5,954 10,109 10,209
4/30/99 7,126 10,777 11,123
5/31/99 7,605 11,038 11,288
6/30/99 7,722 11,667 11,794
7/31/99 7,882 11,564 11,473
8/31/99 7,339 11,055 11,051
9/30/99 7,424 11,103 11,053
10/31/99 7,189 11,075 11,098
11/30/99 7,743 11,543 11,761
12/31/99 8,542 12,485 13,092
1/31/00 8,255 12,098 12,881
2/29/00 8,713 13,718 15,008
3/31/00 9,511 13,204 14,019
4/28/00 8,468 12,978 13,175
The chart shows the value of a hypothetical initial investment of $10,000 in the
Fund, the S&P 600 Index and the Russell 2000 Index on June 30, 1997 (the
inception of the Fund) and held through April 30, 2000. The S&P 600 Index and
the Russell 2000 Index are widely recognized unmanaged indices of common stock
prices. Performance figures include the change in value of the stocks in the
indices and reinvestment of dividends, and are not annualized. The index returns
do not reflect expenses, which have been deducted from the Fund's return. THE
FUND'S RETURN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF FUTURE
RESULTS.
FOCUS ON THE TOP FIVE HOLDINGS
TITAN CORPORATION (TTN) - Titan Corporation assists technology-based businesses
by providing them with state-of-the-art solutions, such as information
technology, electron-beam food pasteurization, communications and medical
product sterilization. Titan is primarily known for facilitating corporations
with communications and information technology services.
CYBERONICS (CYBX) - Cyberonics Inc. is a creator and manufacturer of unique
medical devices, which are used to treat neurological conditions like epilepsy.
The success of the treatment is due to an innovative vagus nerve stimulation
therapy. Cyberonics has the approval to sell the NCP system in the United
States, Europe, Canada, and other markets around the world.
SUCCESSORIES (SCES) - Successories Inc. is a specialty retailer and wholesaler
that creates, produces, and promotes a large assortment of motivational and
self-improvement products. The company's product line includes lines of wall
decor, books, audiotapes, desktop art, mugs, greeting cards, and personalized
gifts and awards.
CARREKER-ANTINORI, INC. (CANI) - Carreker-Antinori Inc., offers integrated
consulting and software solutions for corporations similar to bank holding
companies in the United States. Some of its services include yield management,
enabling technology solutions, payment systems, and payment electronification.
VTEL (VTEL) - VTEL Corporation designs, produces, and distributes digital visual
communications technology to corporations, healthcare facilities, educational
institutions, and government operations. It is considered to be a very
distinguished corporation because of its exclusive service and video networking
software.
FINAL THOUGHTS
Thank you once again for choosing the Corbin Small-Cap Value Fund. Remember that
the Fund's ticker symbol is CORBX, and it can be looked up on most quotation
services. Also of note is the fact that I have begun writing a column that
sometimes discusses securities that the Fund owns or that we are considering for
purchase. That weekly column is located at BIZPRESS.NET or FWBUSINESSPRESS.COM.
You may also find it by accessing our web site at CORBINCOM.COM. If you ever
have any questions or comments, please contact me at [email protected] or
(800) 490-9333.
Sincerely,
David A. Corbin, CFA
President and Chief
Investment Officer
<PAGE>
<TABLE>
<CAPTION>
CORBIN SMALL-CAP VALUE FUND
SCHEDULE OF INVESTMENTS - APRIL 30, 2000
(UNAUDITED)
<S> <C> <C>
COMMON STOCKS - 98.5% SHARES VALUE
BASIC INDUSTRIES- 6.0%
Iron & Steel - 1.9%
Quanex Corp. 3,000 $ 49,125
-----------------
PAPER & FOREST PRODUCTS - 1.7%
Republic Group, Inc. 4,000 45,250
-----------------
PLASTICS & FIBERS - 2.4%
Schulman (A.), Inc. 5,000 64,375
-----------------
TOTAL BASIC INDUSTRIES 158,750
-----------------
CONSTRUCTION & REAL ESTATE - 3.2%
REAL ESTATE INVESTMENT TRUSTS - 3.2%
Crescent Real Estate Equities Co. 5,000 85,625
-----------------
DURABLES - 2.6%
AGRICULTURAL MACHINERY - 0.1%
Alamo Group, Inc. 300 3,263
-----------------
AUTOS & AUTO PARTS - 0.4%
Wabash National Corp. 715 10,412
-----------------
OFFICE FURNITURE & FIXTURES - 2.1%
Koala Corp. (a) 3,700 55,962
-----------------
TOTAL DURABLES 69,637
-----------------
ENERGY - 1.7%
OIL & GAS - 1.7%
Unifab International, Inc. (a) 7,000 44,625
-----------------
FINANCE - 8.0%
BANKS - 1.8%
First Financial Bankshares, Inc. 1,800 48,600
-----------------
CREDIT & OTHER FINANCE - 3.7%
Delta Financial Corp. (a) 20,000 37,500
Onyx Acceptance Corp. (a) 13,000 61,750
-----------------
99,250
-----------------
INVESTMENT BANKING & BROKERAGE - 2.5%
Jefferies Group, Inc. 3,000 66,000
-----------------
TOTAL FINANCE 213,850
-----------------
CORBIN SMALL-CAP VALUE FUND
SCHEDULE OF INVESTMENTS - APRIL 30, 2000 (UNAUDITED) - CONTINUED
COMMON STOCKS - CONTINUED SHARES VALUE
HEALTH - 7.7%
MEDICAL EQUIPMENT & SUPPLIES - 7.7%
Cyberonics, Inc. (a) 10,000 $ 203,750
-----------------
MEDIA & LEISURE - 16.3%
PUBLISHING - 3.4%
Thomas Nelson, Inc. 13,000 91,000
-----------------
RESTAURANTS - 12.9%
BUCA, Inc. (a) 7,000 105,437
CKE Restaurants, Inc. 10,400 38,350
Pizza Inn, Inc. 31,000 102,688
Taco Cabana, Inc. (a) 16,000 97,000
-----------------
343,475
-----------------
TOTAL MEDIA & LEISURE 434,475
-----------------
NON-DURABLES - 2.8%
BEVERAGES - 2.8%
Lancer Corp. (a) 18,900 73,237
-----------------
RETAIL & WHOLESALE - 13.9%
GENERAL MERCHANDISE STORES - 3.9%
Duckwall-Alco Stores, Inc. (a) 12,000 103,500
-----------------
GROCERY STORES - 0.8%
Ingles Markets, Inc. - Class A 2,000 20,000
-----------------
SPECIALTY - 9.2%
Rush Enterprises, Inc. (a) 3,500 29,422
Successories, Inc. (a) 115,000 215,625
-----------------
245,047
-----------------
TOTAL RETAIL & WHOLESALE 368,547
-----------------
TECHNOLOGY - 36.3%
COMMUNICATIONS EQUIPMENT - 4.7%
VTEL Corp. (a) 29,500 123,531
-----------------
COMPUTER BASED SYSTEMS - 0.3%
Aspeon, Inc. (a) 1,000 9,438
-----------------
COMPUTER SERVICES & SOFTWARE - 27.6%
Carreker-Antinori, Inc. (a) 12,000 132,000
Titan Corp. (a) 14,000 602,000
-----------------
734,000
-----------------
CORBIN SMALL-CAP VALUE FUND
SCHEDULE OF INVESTMENTS - APRIL 30, 2000 (UNAUDITED) - CONTINUED
COMMON STOCKS - CONTINUED SHARES VALUE
TECHNOLOGY (continued)
ELECTRONIC INSTRUMENTS - 3.7%
Herley Industries, Inc. (a) 5,500 $ 98,313
-----------------
TOTAL TECHNOLOGY 965,282
-----------------
TOTAL COMMON STOCKS (COST $2,363,154) 2,617,778
-----------------
PRINCIPAL
AMOUNT VALUE
MONEY MARKET SECURITIES - 0.9%
Firstar Treasury Fund, 5.00% (b) (Cost $24,028) 24,028 24,028
-----------------
TOTAL INVESTMENTS - 99.4% (COST $2,387,182) 2,641,806
-----------------
OTHER ASSETS LESS LIABILITIES - 0.6% 14,553
-----------------
TOTAL NET ASSETS - 100.0% $ 2,656,359
=================
(a) Non-income producing
(b) Variable rate security; the coupon rate shown represents the rate at April 30, 2000.
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
CORBIN SMALL-CAP VALUE FUND APRIL 30, 2000
STATEMENT OF ASSETS & LIABILITIES
(UNAUDITED)
ASSETS
Investment in securities, at value (cost $2,387,182) $ 2,641,806
Cash 12,760
Receivable for fund shares sold 1,442
Dividends receivable 3,166
-------------------
TOTAL ASSETS 2,659,174
LIABILITIES
Accrued investment advisory fee payable $ 2,815
------------------
TOTAL LIABILITIES 2,815
-------------------
NET ASSETS $ 2,656,359
===================
NET ASSETS CONSIST OF:
Paid in capital $ 3,345,636
Undistributed net investment loss (4,484)
Accumulated net realized loss on investments (939,417)
Net unrealized appreciation on investments 254,624
-------------------
NET ASSETS, for 333,982 shares $ 2,656,359
===================
NET ASSET VALUE
Net Assets
Offering price and redemption price per share ($2,656,359 / 333,982) $ 7.95
===================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CORBIN SMALL-CAP VALUE FUND
STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED APRIL 30, 2000
(UNAUDITED)
<S> <C> <C>
INVESTMENT INCOME
Dividend Income $ 12,393
Interest Income 898
----------------
TOTAL INCOME 13,291
EXPENSES
Investment advisory fee $ 16,331
Trustees' fees 1,992
---------------
Total expenses before reimbursement 18,323
Reimbursed expenses (1,992)
---------------
Total operating expenses 16,331
----------------
NET INVESTMENT INCOME (LOSS) (3,040)
----------------
REALIZED & UNREALIZED GAIN (LOSS)
Net realized gain (loss) on investment securities (87,074)
Change in net unrealized appreciation (depreciation)
on investment securities 481,766
---------------
Net gain on investment securities 394,692
----------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 391,652
================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CORBIN SMALL-CAP VALUE FUND
STATEMENT OF CHANGES IN NET ASSETS
<S> <C> <C>
SIX MONTHS
ENDED YEAR
APRIL 30, ENDED
2000 OCTOBER 31,
(UNAUDITED) 1999
------------------- -------------------
Increase/(Decrease) in Net Assets
OPERATIONS
Net investment gain (loss) $ (3,040) $ (4,598)
Net realized gain (loss) on investment securities (87,074) (300,255)
Change in net unrealized appreciation (depreciation) 481,766 327,949
------------------- -------------------
Net increase (decrease) in net assets resulting from operations 391,652 23,096
------------------- -------------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income 0 0
From net realized gain 0 0
------------------- -------------------
Total distributions 0 0
------------------- -------------------
SHARE TRANSACTIONS
Net proceeds from sale of shares 385,458 747,375
Shares issued in reinvestment of dividends 0 0
Shares redeemed (415,040) (765,186)
------------------- -------------------
NET INCREASE IN NET ASSETS RESULTING
FROM SHARE TRANSACTIONS (29,582) (17,811)
------------------- -------------------
TOTAL INCREASE IN NET ASSETS 362,070 5,285
NET ASSETS
Beginning of period 2,294,289 2,289,004
------------------- -------------------
End of period [including accumulated net investment loss
of $4,484 and $1,444, respectively] $ 2,656,359 $ 2,294,289
=================== ===================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CORBIN SMALL-CAP VALUE FUND
FINANCIAL HIGHLIGHTS
<S> <C> <C> <C> <C>
SIX MONTHS
ENDED YEAR YEAR PERIOD
APRIL 30, ENDED ENDED ENDED
2000 OCTOBER 31, OCTOBER 31, OCTOBER 31,
(UNAUDITED) 1999 1998 1997 (A)
------------ --------------- --------------- ---------------
SELECTED PER SHARE DATA
Net asset value, beginning of period $ 6.75 $ 6.62 $ 11.03 $ 10.00
------------ --------------- --------------- ---------------
Income from investment operations
Net investment income (loss) (0.01) (0.01) (0.01) 0.00
Net realized and unrealized gain (loss) 1.21 0.14 (3.76) 1.03
------------ --------------- --------------- ---------------
Total from investment operations 1.20 0.13 (3.77) 1.03
------------ --------------- --------------- ---------------
Less Distributions
From net investment income 0.00 0.00 (0.01) 0.00
From net realized gain 0.00 0.00 (0.63) 0.00
------------ --------------- --------------- ---------------
Total distributions 0.00 0.00 (0.64) 0.00
------------ --------------- --------------- ---------------
Net asset value, end of period $ 7.95 $ 6.75 $ 6.62 $ 11.03
============ =============== =============== ===============
TOTAL RETURN (b) 17.78% 1.96% (36.07)% 10.30%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000) $2,656 $2,294 $2,289 $1,334
Ratio of expenses to average net assets 1.25% (c) 1.25% 1.25% 1.23% (c)
Ratio of expenses to average net assets
before reimbursement 1.40% (c) 1.31% 1.30% 1.23% (c)
Ratio of net investment income (loss) to
average net assets (0.23)%(c) (0.20)% (0.15)% 0.00%
Ratio of net investment income (loss) to
average net assets before reimbursement (0.39)%(c) (0.26)% (0.20)% 0.00%
Portfolio turnover rate 45.36% (c) 65.66% 86.42% 20.41% (c)
(a) June 30, 1997 (commencement of operations) to October 31, 1997
(b) For periods of less than a full year, total returns are not annualized.
(c) Annualized
</TABLE>
<PAGE>
CORBIN SMALL-CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000 (UNAUDITED)
NOTE 1. ORGANIZATION
The Corbin Small-Cap Value Fund (the "Fund") was organized as a series of
the AmeriPrime Funds, an Ohio business trust (the "Trust") on June 10, 1997 and
commenced operations on June 30, 1997. The Fund is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The investment objective of the Fund is to
provide long-term capital appreciation to its shareholders. The Declaration of
Trust Agreement permits the Board of Trustees (the "Board") 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 VALUATION - 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.
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 values 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.
CORBIN SMALL-CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000 (UNAUDITED) - CONTINUED
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
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. Loss carryforwards total $852,343 as of October 31,
1999: $300,255 expiring in 2007 and, $552,088 expiring in 2006.
DIVIDENDS AND DISTRIBUTIONS - The Fund intends to comply with federal tax rules
regarding distribution of substantially all of its net investment income and
capital gains. These rules may cause multiple distributions during the course of
the 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 Corbin & Company (the "Advisor") to manage the Fund's
investments. David A. Corbin, President of the Advisor, 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 and
pays all of the expenses of the Fund except brokerage commissions, taxes,
borrowing costs (such as (a) interest and (b) dividend expenses on securities
sold short), fees and expenses of the non-interested person trustees, and
extraordinary expenses. As compensation for its management services and
agreement to pay the Fund's expenses, the Fund is obligated to pay the Advisor a
fee computed and accrued daily and paid monthly at an annual rate of 1.25% of
the average daily net assets of the Fund. 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. For the six
months ended April 30, 2000, the Advisor received a fee of $16,331 from the
Fund. The Advisor has contractually agreed to reimburse other expenses to
maintain total fund operating expenses at the rate of 1.25% of net assets
through March 1, 2001. For the six months ended April 30, 2000, the Advisor
reimbursed expenses of $1,992. There is no assurance that such contractual
agreement will continue in the future.
CORBIN SMALL-CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000 (UNAUDITED) - CONTINUED
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
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, personnel and
facilities. The Administrator receives a monthly fee from the Advisor 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 six
months ended April 30, 2000, the Administrator received fees of $15,000 from the
Advisor 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 Advisor of $1.20 per shareholder (subject to a minimum
monthly fee of $750). For the six months ended April 30, 2000, Unified received
fees of $6,758 for transfer agent services provided to the Fund. For its
services as fund accountant, Unified receives an annual fee from the Advisor
equal to 0.0275% of the Fund's assets up to $100 million, 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 to $100 million). For the six months ended April 30,
2000, Unified received fees of $4,800 for fund accounting services provided to
the Fund.
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. There were no payments made to the
Distributor for the six months ended April 30, 2000. Certain members of
management of the Administrator and the Distributor are also members of
management of the AmeriPrime Trust.
CORBIN SMALL-CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000 (UNAUDITED) - CONTINUED
NOTE 4. SHARE TRANSACTIONS
As of April 30, 2000, there was an unlimited number of authorized shares
for the Fund. Paid in capital at April 30, 2000 was $3,345,636.
Transactions in shares were as follows:
<TABLE>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 2000 OCTOBER 31, 1999
SHARES DOLLARS SHARES DOLLARS
Shares sold 46,411 $385,458 114,423 $747,375
Shares issued in reinvestment
of distributions 0 0 0 0
Shares redeemed (52,542) (415,040) (120,150) (765,186)
-------- --------- --------- ---------
(6,131) $(29,582) (5,727) $(17,811)
======== ========= ========= =========
</TABLE>
NOTE 5. INVESTMENTS
For the six months ended April 30, 2000, purchases and sales of investment
securities, other than short-term investments, aggregated $614,702 and $577,251,
respectively. The gross unrealized appreciation for all securities totaled
$765,325 and the gross unrealized depreciation for all securities totaled
$510,701 for a net unrealized appreciation of $254,624. The aggregate cost of
securities for federal income tax purposes at April 30, 2000 was $2,387,182.
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.
CORBIN SMALL-CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000 (UNAUDITED) - 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 April 30, 2000, Charles
Schwab & Co. owned of record, in aggregate, more than 51% of the Fund.
<PAGE>
FOUNTAINHEAD KALEIDOSCOPE FUND SEMI-ANNUAL REPORT
Dear Fellow Shareholders:
For the six months ended April 30, 2000, Fountainhead Kaleidoscope Fund handily
outperformed its respective benchmarks, generating a return of 34.8% versus 7.2%
for the S&P 500 Index and 18.7% for the Russell 2000 Index.
RETURNS FOR THE PERIODS ENDED 4/30/2000
Return Since Inception
Fund/Index (November 1, 1999)
Fountainhead Kaleidoscope Fund 34.8%
Russell 2000 Index 18.7%
S&P 500 Index 7.2%
Fountainhead Russell 2000 S&P 500
Kaleidoscope Fund Index Index
10/31/1999 $10,000 $10,000 $10,000
11/30/1999 $12,600 $10,597 $10,201
12/31/1999 $13,800 $11,797 $10,801
1/31/2000 $12,820 $11,607 $10,262
2/29/2000 $12,859 $13,523 $10,066
3/31/2000 $13,599 $12,632 $11,050
4/30/2000 $13,479 $11,871 $10,720
The chart shows the value of a hypothetical initial investment of $10,000 in the
Fund, the Russell 2000 Index, and the S&P 500 Index on November 1, 1999 (the
inception of the Fund) and held through April 30, 2000. The Russell 2000 Index
and S&P 500 Index are widely recognized, unmanaged indices of common stock
prices. Performance figures include the change in value of the stocks in the
indices and the reinvestment of dividends; they are not annualized. The index
returns do not reflect expenses, which have been deducted from the Fund's
return. THE FUND'S RETURN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS.
During the first six months of our fiscal year, the Fund's return was fueled by
performance in several areas. Of significance were our telecommunications issues
(Broadwing +36.0% and Rural Cellular +19.3%), our healthcare stocks (Beckman
Coulter +35.9%, AmeriSource Health +33.3%, and Watson Pharmaceutical +32.7%),
select technology holdings (Cabletron Systems +31.7% and Viatel +17.9%), some
financial holdings (ACE Limited +40.8%) and several of our special situation
stocks (Pepsi Bottling Group +28.7%). (The percentage gains are reflective of
the stock's price appreciation as of April 30, 2000 versus the Fund's average
cost.) Recently our position in ReliaStar Financial also paid off handsomely as
ING Group announced its intent to acquire the company for $54 per share in cash,
a 75% premium to its close prior to the announcement.
The first four months of 2000 have proven to be difficult ones for most
investors in the U.S. financial markets. While it is clear that the U.S. economy
is growing at a very healthy rate, it is unclear how long this rate of growth
will continue without significant adverse consequences. The markets are
grappling with what the true situation is with inflation (are inflationary
pressures building and if so, how quickly are they accelerating), how long will
the Fed have to raise interest rates and by what amount, when will the economy
start to moderate, and are the valuation multiples applied to the so-called New
Economy stocks still too rich?
In addition, the level of market volatility has been unprecedented. To a large
degree, the significant decline in speculative and richly valued stocks has been
healthy. Many day traders, most of whom exhibit the characteristics of gamblers
rather than investors, have been flushed out of the market, no longer able to
meet the growing demands of margin calls. According to a recent survey, there
are only approximately 50,000 day traders in the U.S., but they are a
surprisingly powerful force. As a group, they account for about 17% of daily
average trading volume on the NYSE and the NASDAQ. Online, they account for 75%
to 80%, typically trading 25 to 40 times a day. The partial elimination of this
group (or at least the tempering of their behavior) bodes well for the markets
going forward and does help eliminate some degree of speculative excess. The
manic-depressive behavior of day traders and momentum players in driving many
stocks to nosebleed heights only to see them decline precipitously has most
directly impacted technology-related stocks. Another pressure on tech stocks has
been, and will in the near future continue to be, the expiration of lock-up
periods for many second- and third-tier technology stocks, which recently went
public. This overhang should continue to keep pressure on some areas of
technology as insiders are allowed to sell their shares for the first time since
coming public. The extra supply of these shares flooding into the market will
take some time to be absorbed by other investors.
On a positive note, despite the market turbulence of the past few months, the
average individual investor has kept his cool and responded to the volatility in
stride. However, fund managers recently raised large amounts of cash in
preparation for massive expected redemptions. This mass exodus did not occur. In
fact, the Investment Company Institute recently reported that in none of the
periods where we have witnessed a stock market break or a sharp decline in
equity values have mutual fund shareholders, as a group, liquidated their shares
en masse. Contrary to popular belief, most individual fund investors have
exhibited more patience, while some institutional investors have scrambled
around. In market corrections over the past 15 years, one-month redemptions have
averaged only 1.9% of the previous month's total assets versus a long-term
average monthly redemption rate of 1.5%. This trend held true with the
Fountainhead Kaleidoscope Fund, as we saw very few redemption requests. However,
fund managers as a whole have raised cash in anticipation of redemptions, which
have not materialized. The net result is this money will probably flow back into
the market, bidding prices up higher.
In addition to the aforementioned cash, which will be looking for a home in the
equity market, several fundamental aspects of the market appear promising. For
one, earnings growth overall continues to be strong. Over 70% of all S&P 500
companies reported first quarter 2000 earnings, which exceeded expectations,
while only 10% fell short. This compares very favorably to a five-year average
of just 56% positive and 26% negative. In addition, according to many
economists, we are in the early stages of a multiyear cyclical profit recovery,
which is being driven by stronger global growth.
With this said, these overall favorable factors are tempered by our belief that
the markets will continue to experience a high level of volatility until the Fed
is close to being done with raising rates and inflationary pressures appear to
be contained. This is the key to seeing a broad advance in the major indices. In
the meantime, however, many individual opportunities exist in select companies,
which, in our belief, are currently trading at discounts to their respective
private-market values.
As previously mentioned in our other work, the growth potential in
telecommunications should prove tremendous as usage in the United States still
is not near as great as in Europe. As a result, most U.S. telecom companies
trade at large discounts to their European counterparts. With higher growth
potential in the U.S. and cheaper valuations, it is likely that foreign telecom
companies will look to take advantage of the situation by acquiring U.S. assets
via takeover offers. Of course, merger and acquisition activity is icing on the
cake, as many of these companies should do very well fundamentally as growth
continues to be explosive, overall market penetration accelerates, and
subscriber bases become more and more valuable. In the wireless area, we
continue to see potential in Nextel Communications, Price Communications, Rural
Cellular, VoiceStream Wireless, and Western Wireless. Despite the enormous share
price appreciation in many of these stocks during 1999, we believe much upside
potential continues to exist and we have added to some of these positions during
the last six months when the opportunity has presented itself. In the broadband
area, Global Crossing continues to take action which is unlocking shareholder
value, and Broadwing is well positioned to benefit from previous acquisitions
and it could prove to be an acquisition candidate. Finally, in the higher-tech
telecommunications area, Viatel and Winstar Communications remain favorites.
Cable is another area where we see much opportunity, as it is an area which has
significantly benefited from the acceptance and use of the Internet. Cable
companies, such as Adelphia Communications, Cablevision Systems, and Charter
Communications, essentially provide the inroads for this technology to enter
into our homes. The value of cable was validated with the announcement of the
America Online/Time Warner merger. In addition to highlighting the value
inherent in cable companies, the merger should facilitate the affiliation
between AOL and other cable operators, which should, in turn, accelerate the
rollout and adoption of cable broadband high-speed Internet service. Substantial
growth still should come from this area, and consolidation opportunities should
also present themselves.
Select companies in the healthcare industry also look attractive to us. In
particular, mid- and small-cap specialty pharmaceutical companies (such as Dura
Pharmaceutical and Watson Pharmaceutical) and mid-cap medical device companies
(such as St. Jude Medical and Beckman Coulter) could prove to be big winners as
they offer defensive characteristics associated with large-cap healthcare
companies, but are buffered from many of the existing concerns associated with
potential Medicare reform. Most medical device stocks should not be impacted
directly from Medicare reform, and mid- and small-cap specialty pharmaceutical
companies are valued more by the potential which exists from their developmental
pipelines. In addition, many of these companies are growing their earnings at
rates much higher than their larger-cap brethren.
As always, we appreciate your loyalty and support of King Investment Advisors
and of Fountainhead Kaleidoscope Fund.
Sincerely,
Roger E. King
Chairman and President
<PAGE>
<TABLE>
<CAPTION>
FOUNTAINHEAD KALEIDOSCOPE FUND
SCHEDULE OF INVESTMENTS - APRIL 30, 2000
(UNAUDITED)
<S> <C> <C>
COMMON STOCKS - 99.4% SHARES VALUE
BEVERAGES - 3.7%
Pepsi Bottling Group, Inc. 2,800 $ 60,375
-------------------
BUSINESS EQUIPMENT - 3.5%
Diebold, Inc. 2,000 57,750
-------------------
BUSINESS SERVICES - 3.4%
Equifax, Inc. 2,300 56,350
-------------------
CABLE TV & SATELLITE SYSTEMS - 7.3%
Adelphia Communications Corp. - Class A (a) 2,450 121,428
-------------------
COMPUTER COMMUNICATIONS EQUIPMENT - 0.8%
Cabletron Systems, Inc. (a) 600 13,725
-------------------
FINANCIAL SERVICES - 3.7%
Countrywide Credit Industries, Inc. 2,200 60,775
-------------------
HEALTH CARE INFORMATION SYSTEMS - 4.5%
IMS Health, Inc. 4,300 73,637
-------------------
HOUSEHOLD PRODUCTS - 5.9%
Dial Corp. 7,000 97,563
-------------------
INSURANCE - 8.3%
ACE Limited 2,700 64,631
ReliaStar Financial Corp. 1,700 73,100
-------------------
137,731
-------------------
INTERNET SERVICES & SOFTWARE - 5.6%
EarthLink, Inc. (a) 2,400 45,300
Rhythms NetConnections, Inc. (a) 2,300 47,581
-------------------
92,881
-------------------
LABORATORY ANALYTICAL INSTRUMENTS - 3.6%
Beckman Coulter, Inc. 925 60,009
-------------------
MEDICAL APPLIANCES & EQUIPMENT - 4.3%
St. Jude Medical, Inc. (a) 2,300 71,731
-------------------
FOUNTAINHEAD KALEIDOSCOPE FUND
SCHEDULE OF INVESTMENTS - APRIL 30, 2000 - CONTINUED
COMMON STOCKS - CONTINUED SHARES VALUE
PHARMACEUTICALS - 11.9%
AmeriSource Health Corp. (a) 2,200 $ 43,863
Dura Pharmaceuticals, Inc. (a) 7,000 91,000
Watson Pharmaceuticals, Inc. (a) 1,400 62,913
-------------------
197,776
-------------------
PUBLISHING - 4.5%
Meredith Corp. 2,700 75,094
-------------------
SAVINGS & LOANS - 1.5%
Astoria Financial Corp. 900 24,806
-------------------
TELECOMMUNICATION SERVICES - 10.9%
Broadwing, Inc. 943 26,699
Telephone & Data Systems, Inc. 800 81,600
Viatel, Inc. (a) 1,900 72,675
-------------------
180,974
-------------------
TELEVISION BROADCASTING - 1.9%
Paxson Communications Corp.- Class A (a) 3,700 30,525
-------------------
WIRELESS COMMUNICATIONS - 14.1%
Price Communications Corp. (a) 3,600 73,350
Rural Cellular Corp. - Class A (a) 1,100 81,331
Western Wireless Corp. - Class A (a) 1,600 79,500
-------------------
234,181
-------------------
TOTAL COMMON STOCKS (COST $1,521,652) 1,647,311
-------------------
PRINCIPAL
AMOUNT VALUE
MONEY MARKET SECURITIES - 0.1%
Firstar Treasury Fund, 5.00% (b) (Cost $2,236) 2,236 2,236
-------------------
TOTAL INVESTMENTS - 99.5% (COST $1,523,888) 1,649,547
-------------------
OTHER ASSETS LESS LIABILITIES - 0.5% 8,732
-------------------
TOTAL NET ASSETS - 100.0% $ 1,658,279
===================
(a) Non-income producing
(b) Variable rate security; the coupon rate shown represents the rate at April 30, 2000.
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
FOUNTAINHEAD KALEIDOSCOPE FUND APRIL 30, 2000
STATEMENT OF ASSETS & LIABILITIES
(UNAUDITED)
ASSETS
Investment in securities, at value (Cost $1,523,888) $ 1,649,547
Receivable for investment sold 8,419
Receivable for fund shares sold 2,000
Dividends receivable 470
Interest receivable 32
-------------------
TOTAL ASSETS 1,660,468
LIABILITIES
Accrued investment advisory fee payable $ 1,629
Payable to custodian 560
-------------------
TOTAL LIABILITIES 2,189
-------------------
NET ASSETS $ 1,658,279
===================
Net Assets consist of:
Paid in capital $ 1,556,102
Accumulated undistributed net investment loss (840)
Accumulated undistributed net realized loss on investments (22,642)
Net unrealized appreciation on investments 125,659
-------------------
Net Assets, for 123,024 shares $ 1,658,279
===================
NET ASSET VALUE
Net Assets
Offering price and redemption price per share ($1,658,279 / 123,024) $ 13.48
===================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FOUNTAINHEAD KALEIDOSCOPE FUND
STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED APRIL 30, 2000
(UNAUDITED)
<S> <C> <C>
INVESTMENT INCOME
Dividend Income $ 2,482
Interest Income 3,222
---------------
TOTAL INCOME 5,704
EXPENSES
Investment advisory fee $ 9,162
Trustees' fees 1,022
---------------
Total expenses before waivers and reimbursements 10,184
Waived fees and reimbursed expenses (3,640)
---------------
Total operating expenses 6,544
---------------
NET INVESTMENT LOSS (840)
---------------
REALIZED & UNREALIZED GAIN (LOSS)
Net realized loss on investment securities (22,642)
Change in net unrealized appreciation (depreciation)
on investment securities 125,659
---------------
Net gain on investment securities 103,017
---------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 102,177
===============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FOUNTAINHEAD KALEIDOSCOPE FUND
STATEMENT OF CHANGES IN NET ASSETS
<S> <C>
SIX MONTHS
ENDED
APRIL 30,
2000
(UNAUDITED)
-------------------
Increase/(Decrease) in Net Assets
OPERATIONS
Net investment loss $ (840)
Net realized loss on investment securities (22,642)
Change in net unrealized
appreciation (depreciation) 125,659
-------------------
Net increase in net assets
resulting from operations 102,177
-------------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income 0
From net realized gain 0
-------------------
Total distributions 0
-------------------
SHARE TRANSACTIONS
Net proceeds from sale of shares 1,559,102
Shares issued in reinvestment
of distributions 0
Shares redeemed (3,000)
-------------------
NET INCREASE IN NET ASSETS RESULTING
FROM SHARE TRANSACTIONS 1,556,102
-------------------
TOTAL INCREASE IN NET ASSETS 1,658,279
NET ASSETS
Beginning of period 0
-------------------
End of period [including accumulated
undistributed net investment loss of $(840)] $ 1,658,279
===================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FOUNTAINHEAD KALEIDOSCOPE FUND
FINANCIAL HIGHLIGHTS
<S> <C>
SIX MONTHS
ENDED
APRIL 30,
2000
(UNAUDITED)
---------------
SELECTED PER SHARE DATA
Net asset value, beginning of period $ 10.00
---------------
Income from investment operations
Net investment loss (0.01)
Net realized and unrealized gain (loss) 3.49
---------------
Total from investment operations 3.48
---------------
Less Distributions
From net investment income 0.00
From net realized gain 0.00
---------------
Total distributions 0.00
---------------
Net asset value, end of period $ 13.48
===============
TOTAL RETURN (a) 34.80%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000) $1,658
Ratio of expenses to average net assets 1.25% (b)
Ratio of expenses to average net assets
before fee waivers and reimbursement 1.95% (b)
Ratio of net investment loss to average
net assets (0.16)%(b)
Ratio of net investment loss to average
net assets before fee waivers and
reimbursement (0.86)%(b)
Portfolio turnover rate 169.47% (b)
(a) For periods of less than a full year, total returns are not annualized.
(b) Annualized
</TABLE>
<PAGE>
FOUNTAINHEAD KALEIDOSCOPE FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000 (UNAUDITED)
NOTE 1. ORGANIZATION
The Fountainhead Kaleidoscope Fund (the "Fund") was organized as a series
of the AmeriPrime Funds, an Ohio business trust (the "Trust"), on September 29,
1999 and commenced operations on November 1, 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 provide
long-term capital growth. The Declaration of Trust Agreement for the fund
permits the Board of Trustees (the "Board") 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 VALUATION- 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 opinion of the Advisor (as such term is defined in note 3 of this
document), 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.
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 values 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, 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 by 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.
FOUNTAINHEAD KALEIDOSCOPE FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000 (UNAUDITED) - CONTINUED
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
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 its net investment income and any realized
capital gains.
DIVIDENDS AND DISTRIBUTIONS- The Fund intends to comply with federal tax rules
regarding distribution of substantially all its net investment income and
capital gains. These rules may cause multiple distributions during the course of
the year.
REDEMPTION FEES - The Fund charges a redemption fee of 1% of the current net
asset value of shares redeemed if the shares are owned less than 180 days. The
fee is charged for the benefit of remaining shareholders to defray Fund
portfolio transaction expenses and facilitate portfolio management. This fee
applies to shares being redeemed in the order in which they are purchased. The
fee, which is retained by the Fund, is accounted for as an addition to paid-in
capital.
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 King Investment Advisors, Inc., 1980 Post Oak Boulevard,
Suite 2400, Houston, Texas 77056-3898 (the "Advisor") to manage the Fund's
investments. Roger E. King, President of the Advisor, 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 and
pays all of the expenses of the Fund except brokerage commissions, taxes,
borrowing costs (such as (a) interest and (b) dividend expenses on securities
sold short), fees and expenses of non-interested person trustees, and
extraordinary expenses. As compensation for its management services and
agreement to pay the Fund's expenses, the Fund is obligated to pay the Advisor a
fee computed and accrued daily and paid monthly at an annual rate of 1.75% of
the average daily net assets of the Fund. For the six months ended April 30,
FOUNTAINHEAD KALEIDOSCOPE FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000 (UNAUDITED) - CONTINUED
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
2000, the Advisor received a fee of $9,162 from the Fund. The Advisor
contractually agreed to waive fees by 0.50% of the average daily net assets of
the Fund through February 28, 2000. In addition, the Advisor has agreed to
reimburse expenses for the Fund to the extent necessary to maintain total
operating expenses at the rate of 1.25%. For the six months ended April 30,
2000, the Advisor waived fees and reimbursed expenses of $3,640. There is no
assurance that such an arrangement will continue in the future.
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 to provide the Fund with administrative services,
including all regulatory reporting and necessary office equipment and personnel.
The Administrator receives a monthly fee from the Advisor 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 six months
ended April 30, 2000, the Administrator received fees of $10,000 from the
Advisor 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 Advisor of $1.20 per shareholder (subject to a minimum
monthly fee of $750). For the six months ended April 30, 2000, Unified received
fees of $7,253 from the Advisor for transfer agent services. For its services as
fund accountant, Unified receives an annual fee from the Advisor equal to
0.0275% of the Fund's assets up to $100 million, 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 six months ended April
30, 2000, Unified received fees of $4,800 from the Advisor for fund accounting
services.
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. No payments were made to the
Distributor for the six months ended April 30, 2000. Certain members of
management of the Administrator and the Distributor are also members of
management of the AmeriPrime Trust.
FOUNTAINHEAD KALEIDOSCOPE FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000 (UNAUDITED) - CONTINUED
NOTE 4. SHARE TRANSACTIONS
As of April 30, 2000, the Fund had an unlimited number of authorized
shares. Paid-in capital at April 30, 2000 was $1,556,102.
Transactions in shares were as follows:
SIX MONTHS ENDED
APRIL 30, 2000
SHARES DOLLARS
Shares sold 123,243 $1,559,102
Shares issued in
reinvestment of dividends 0 0
Shares redeemed (219) (3,000)
--------- -----------
123,024 $1,556,102
========= ===========
NOTE 5. INVESTMENTS
For the six months ended April 30, 2000, purchases and sales of investment
securities, other than short-term investments, totaled $2,311,256 and $766,962,
respectively. The gross unrealized appreciation for all securities totaled
$209,831 and the gross unrealized depreciation for all securities totaled
$84,172 for a net unrealized appreciation of $125,659. The total cost of
securities for federal income tax purposes at April 30, 2000 was $1,523,888.
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.
FOUNTAINHEAD KALEIDOSCOPE FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000 (UNAUDITED) - 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 the Fund creates a presumption of control of the Fund, under
Section 2(a)(9) of the Investment Company Act of 1940. As of April 30, 2000,
Roger E. King owned of record, in aggregate, more than 39% of the Fund.
<PAGE>
FOUNTAINHEAD SPECIAL VALUE FUND SEMI-ANNUAL REPORT
The calendar year of 1999 was an outstanding one for shareholders of the
Fountainhead Special Value Fund. The fund returned 133% for 1999, ranking it No.
1 out of 199 funds in the Mid-Cap Value category according to Lipper Analytical
Services. While the Fund has given up some of its performance since the end of
the year, (the Fund returned a negative 10.4% from 1/1/00 through 4/30/00), it
still ranked as the second best performing fund in the Mid-Cap Value category
for the one-year period ended 3/31/00 according to Lipper.
For the six months ended 4/30/00, Fountainhead Special Value Fund returned 19.2%
versus 7.2% for the S&P 500 and 17.4% for the Russell Mid-Cap Index. For the
twelve-month period ended 4/30/00 the Fund returned 66.6% versus 10.1% and 16.0%
for the S&P 500 and Russell Mid-Cap Index, respectively. Lastly, since
inception, the Fund has generated a compound average annual return of 35.5%, an
impressive 11.29 percentage points over the 24.21% compound average annual
return for the S&P 500 and 17 percentage points over the 18.5% return for the
Russell Mid-Cap Index.
RETURNS FOR THE PERIODS ENDED 4/30/2000
Average Annual
Return Since Inception
Fund/Index Six Months December 31, 1996
---------- ---------- ---------------------
Fountainhead Special Value Fund 19.2% 35.5%
Russell 2000 Index 18.7% 11.9%
Russell MidCap Index 17.4% 18.5%
Fountainhead
Special Value Russell 2000 Russell MidCap
Fund Index Index
12/96 $10,000 $10,000 $10,000
1/97 $10,420 $10,200 $10,374
2/97 $10,830 $9,953 $10,358
3/97 $10,140 $9,483 $9,918
4/97 $9,860 $9,510 $10,165
5/97 $10,869 $10,567 $10,907
6/97 $11,560 $11,021 $11,264
7/97 $11,990 $11,533 $12,203
8/97 $11,860 $11,797 $12,070
9/97 $12,950 $12,661 $12,759
10/97 $13,370 $12,105 $12,263
11/97 $13,070 $12,026 $12,555
12/97 $13,665 $12,237 $12,902
1/98 $13,433 $12,044 $12,659
2/98 $14,757 $12,934 $13,649
3/98 $15,910 $13,466 $14,296
4/98 $16,476 $13,540 $14,332
5/98 $15,758 $12,811 $13,887
6/98 $16,232 $12,838 $14,080
7/98 $15,424 $11,798 $13,409
8/98 $11,976 $9,507 $11,263
9/98 $12,229 $10,251 $11,992
10/98 $12,744 $10,669 $12,810
11/98 $12,481 $11,228 $13,416
12/98 $13,179 $11,923 $14,202
1/99 $13,967 $12,082 $14,178
2/99 $14,240 $11,103 $13,706
3/99 $15,352 $11,276 $14,135
4/99 $16,534 $12,287 $15,179
5/99 $17,382 $12,466 $15,135
6/99 $18,665 $13,030 $15,670
7/99 $19,008 $12,673 $15,239
8/99 $18,927 $12,204 $14,844
9/99 $20,210 $12,206 $14,321
10/99 $23,110 $12,256 $15,000
11/99 $26,373 $12,988 $15,432
12/99 $30,756 $14,458 $16,790
1/00 $29,397 $14,225 $30,852
2/00 $30,852 $16,574 $17,483
3/00 $30,349 $15,482 $18,485
4/00 $27,523 $14,550 $17,610
The chart shows the value of a hypothetical initial investment of $10,000 in the
Fund, the Russell MidCap Index, and the Russell 2000 Index on December 31, 1996
and held through April 30, 2000. The Russell MidCap Index and the Russell 2000
Index are widely recognized, unmanaged indices of common stock prices.
Performance figures include the change in value of the stocks in the indices and
the reinvestment of dividends; they are not annualized. The index returns do not
reflect expenses, which have been deducted from the Fund's return. The Fund's
return represents past performance and is not predictive of future results.
For the first six months of our fiscal year, the Fund was aided by performance
in our telecommunications issues (WinStar Communications +54.1% since October
31, 1999, Broadwing +36.0%, Clearnet Communications +94.9%, Nextel
Communications +27.0%, and Rural Cellular +22.8%), our healthcare stocks (Elan
+65.6%, Watson Pharmaceutical +41.5% and Beckman Coulter +40.9%), select
technology holdings (Cabletron Systems +37.1% and Viatel +14.6%), some cable
holdings (UnitedGlobalCom +22.1%) and several of our special situation stocks
(Citizens Utilities +38.9%).
The first four months of 2000 have proven to be difficult ones for most
investors in the U.S. financial markets. While it is clear that the U.S. economy
is growing at a very healthy rate, it is unclear how long this rate of growth
will continue without significant adverse consequences. The markets are
grappling with what the true situation is with inflation (are inflationary
pressures building and if so, how quickly are they accelerating), how long will
the Fed have to raise interest rates and by what amount, when will the economy
start to moderate, and are the valuation multiples applied to the so-called New
Economy stocks still too rich?
In addition, the level of market volatility has been unprecedented. To a large
degree, the significant decline in speculative and richly valued stocks has been
healthy. Many daytraders, most of whom exhibit the characteristics of gamblers
rather than investors, have been flushed out of the market, no longer able to
meet the growing demands of margin calls. According to a recent survey, there
are only approximately 50,000 daytraders in the U.S., but they are a
surprisingly powerful force. As a group, they account for about 17% of daily
average trading volume on the NYSE and the NASDAQ. Online, they account for 75%
to 80%, typically trading 25 to 40 times a day. The partial elimination of this
group (or at least the tempering of their behavior) bodes well for the markets
going forward and does help eliminate some degree of speculative excess. The
manic-depressive behavior of daytraders and momentum players in driving many
stocks to nosebleed heights only to see them decline precipitously has most
directly impacted technology-related stocks. Another pressure on tech stocks has
been, and will in the near future continue to be, the expiration of lock-up
periods for many second- and third-tier technology stocks which recently went
public. This overhang should continue to keep pressure on some areas of
technology as insiders are allowed to sell their shares for the first time since
coming public. The extra supply of these shares flooding into the market will
take some time to be absorbed by other investors.
On a positive note, despite the market turbulence of the past few months, the
average individual investor has kept his cool and responded to the volatility in
stride. However, fund managers recently raised large amounts of cash in
preparation for massive expected redemptions. This mass exodus did not occur. In
fact, the Investment Company Institute recently reported that in none of the
periods where we have witnessed a stock market break or a sharp decline in
equity values have mutual fund shareholders, as a group, liquidated their shares
en masse. Contrary to popular belief, most individual fund investors have
exhibited more patience, while some institutional investors have scrambled
around. In market corrections over the past 15 years, one-month redemptions have
averaged only 1.9% of the previous month's total assets versus a long-term
average monthly redemption rate of 1.5%. However, fund managers as a whole have
raised cash in anticipation of redemptions which have not materialized. The net
result is this money will probably flow back into the market, bidding prices up
higher.
In addition to the aforementioned cash which will be looking for a home in the
equity market, several fundamental aspects of the market appear promising. For
one, earnings growth overall continues to be strong. Over 70% of all S&P 500
companies reported first quarter 2000 earnings which exceeded expectations,
while only 10% fell short. This compares very favorably to a five-year average
of just 56% positive and 26% negative. In addition, according to many
economists, we are in the early stages of a multiyear cyclical profit recovery
which is being driven by stronger global growth.
With this said, these overall favorable factors are tempered by our belief that
the markets will continue to experience a high level of volatility until the Fed
is close to being done with raising rates and inflationary pressures appear to
be contained. This is the key to seeing a broad advance in the major indices. In
the meantime, however, many individual opportunities exist in select companies
which, in our belief, are currently trading at discounts to their respective
private-market values.
As previously mentioned in our other work, the growth potential in
telecommunications should prove tremendous as usage in the United States still
is not near as great as in Europe. As a result, most U.S. telecom companies
trade at large discounts to their European counterparts. With higher growth
potential in the U.S. and cheaper valuations, it is likely that foreign telecom
companies will look to take advantage of the situation by acquiring U.S. assets
via takeover offers. Of course, merger and acquisition activity is icing on the
cake, as many of these companies should do very well fundamentally as growth
continues to be explosive, overall market penetration accelerates, and
subscriber bases become more and more valuable. In the wireless area, we
continue to see potential in Nextel Communications, Price Communications, Rural
Cellular, VoiceStream Wireless, and Western Wireless. Despite the enormous share
price appreciation in many of these stocks during 1999, we believe much upside
potential continues to exist and we have added to some of these positions during
the last six months when the opportunity has presented itself. In the broadband
area, Global Crossing continues to take action to unlock shareholder value, and
Broadwing is well positioned to benefit from previous acquisitions and it could
prove to be an acquisition candidate. Finally, in the higher-tech
telecommunications area, Viatel and WinStar Communications remain favorites.
Cable is another area where we see much opportunity, as it is an area which has
significantly benefited from the acceptance and use of the Internet. Cable
companies, such as Adelphia Communications, Cablevision Systems, and Charter
Communications, essentially provide the inroads for this technology to enter
into our homes. The value of cable was validated with the announcement of the
America Online/Time Warner merger. In addition to highlighting the value
inherent in cable companies, the merger should facilitate the affiliation
between AOL and other cable operators which should, in turn, accelerate the
rollout and adoption of cable broadband high-speed Internet service. Substantial
growth still should come from this area, and consolidation opportunities should
also present themselves.
Select companies in the healthcare industry also look attractive to us. In
particular, mid- and small-cap specialty pharmaceutical companies (such as Dura
Pharmaceutical and Watson Pharmaceutical) and mid-cap medical device companies
(such as St. Jude Medical and Beckman Coulter) could prove to be big winners as
they offer defensive characteristics associated with large-cap healthcare
companies, but are buffered from many of the existing concerns associated with
potential Medicare reform. Most medical device stocks should not be impacted
directly from Medicare reform, and mid- and small-cap specialty pharmaceutical
companies are valued more by the potential which exists from their developmental
pipelines. In addition, many of these companies are growing their earnings at
rates much higher than their larger-cap brethren.
As always, we appreciate your loyalty and support of King Investment Advisors
and of Fountainhead Special Value Fund. While we do not expect 2000 to be as
rewarding a year as 1999, we do expect it to be a beneficial one for our
shareholders.
Sincerely,
Roger E. King
Chairman and President
<PAGE>
<TABLE>
<CAPTION>
FOUNTAINHEAD SPECIAL VALUE FUND
SCHEDULE OF INVESTMENTS - APRIL 30, 2000 (UNAUDITED)
<S> <C> <C>
COMMON STOCKS - 88.0% SHARES VALUE
BUSINESS EQUIPMENT - 2.3%
Diebold, Inc. 16,700 $ 482,212
----------------
CABLE TV & SATELLITE SYSTEMS - 15.0%
Adelphia Communication Corp. - Class A (a) 31,261 1,549,373
Cablevision Systems Corp. - Class A (a) 15,000 1,015,313
UnitedGlobalCom, Inc. - Class A (a) 12,000 637,500
----------------
3,202,186
----------------
DIVERSIFIED UTILITIES - 1.1%
Citizens Utilities Co. (a) 15,000 240,938
----------------
INTERNET SOFTWARE & SERVICES - 1.7%
Rhythms NetConnections, Inc. (a) 17,500 362,031
----------------
LABORATORY ANALYTICAL INSTRUMENTS - 3.0%
Beckman Coulter, Inc. 9,800 635,775
----------------
MEDICAL APPLIANCES & EQUIPMENT - 1.5%
St. Jude Medical, Inc. (a) 10,200 318,112
----------------
COMPUTER COMMUNICATIONS EQUIPMENT - 2.5%
Cabletron Systems, Inc. (a) 23,000 526,125
----------------
HOUSEHOLD PRODUCTS - 4.8%
Dial Corp. 73,500 1,024,406
----------------
PHARMACEUTICALS - 8.9%
Dura Pharmaceuticals, Inc. (a) 80,500 1,046,500
Watson Pharmaceuticals, Inc. (a) 18,900 849,319
----------------
1,895,819
----------------
FOUNTAINHEAD SPECIAL VALUE FUND
SCHEDULE OF INVESTMENTS - APRIL 30, 2000 (UNAUDITED) - CONTINUED
COMMON STOCKS - CONTINUED SHARES VALUE
TELECOMMUNCATION SERVICES - 24.0%
Broadwing, Inc. 36,300 $ 1,027,744
Global Crossing LTD (a) 27,290 859,635
Rural Cellular Corp. - Class A (a) 8,200 606,287
Telephone & Data Systems, Inc. 12,200 1,244,400
Viatel Inc. (a) 24,800 948,600
WinStar Communications, Inc. (a) 11,100 442,613
----------------
5,129,279
----------------
WIRELESS COMMUNICATIONS - 23.2%
Nextel Communications, Inc. - Class A (a) 6,100 667,569
Price Communications Corp. (a) 70,000 1,426,250
United States Cellular Corp. (a) 10,700 642,669
Voicestream Wireless Corp. (a) 14,775 1,462,725
Western Wireless Corp. - Class A 14,900 740,344
----------------
4,939,557
----------------
TOTAL COMMON STOCKS (COST $14,275,012) 18,756,440
----------------
PRINCIPAL
AMOUNT VALUE
MONEY MARKET SECURITIES - 3.2%
Firstar Treasury Fund, 5.00% (b) (Cost $693,012) 693,012 693,012
----------------
TOTAL INVESTMENTS - 91.2% (COST $14,968,024) 19,449,452
----------------
OTHER ASSETS LESS LIABILITIES - 8.8% 1,873,346
----------------
TOTAL NET ASSETS - 100.0% $ 21,322,798
================
(a) Non-income producing
(b) Variable rate security; the coupon rate shown represents the rate at April 30, 2000.
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
FOUNTAINHEAD SPECIAL VALUE FUND APRIL 30, 2000
STATEMENT OF ASSETS & LIABILITIES (UNAUDITED)
ASSETS
Investment in securities, at value (Cost $14,968,024) $ 19,449,452
Cash 17,688
Receivable for investment sold 2,665,868
Interest receivable 3,312
-------------------
TOTAL ASSETS 22,136,320
LIABILITIES
Accrued investment advisory fee payable $ 42,763
Payable for securities purchased 759,581
Payable for fund shares redeemed 1,545
Other payables and accrued expenses 9,633
-------------------
TOTAL LIABILITIES 813,522
-------------------
NET ASSETS $ 21,322,798
===================
Net Assets consist of:
Paid in capital $ 14,211,371
Accumulated net investment loss (107,653)
Accumulated undistributed net realized gain on investments 2,737,652
Net unrealized appreciation on investments 4,481,428
-------------------
Net Assets, for 810,804 shares $ 21,322,798
===================
NET ASSET VALUE
Net Assets
Offering price and redemption price per share ($21,322,798/810,804) $ 26.30
===================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FOUNTAINHEAD SPECIAL VALUE FUND
STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED APRIL 30, 2000 (UNAUDITED)
<S> <C> <C>
INVESTMENT INCOME
Dividend Income $ 12,134
Interest Income 13,846
-----------------
TOTAL INCOME 25,980
EXPENSES
Investment advisory fee $ 124,772
Trustees' fees 1,992
Transfer agent fees 7,592
Shareholder reports 5,515
Registration fees 4,958
Pricing & bookkeeping fees 11,400
Legal fees 3,636
Insurance fees 5,621
Custodian fees 4,120
Audit fees 6,417
Administration fees 15,000
----------------
Total expenses before waivers and reimbursements 191,023
Waived fees and reimbursed expenses (57,017)
----------------
Total operating expenses 134,006
-----------------
NET INVESTMENT LOSS (108,026)
-----------------
REALIZED & UNREALIZED GAIN (LOSS)
Net realized gain on investment securities 2,848,081
Change in net unrealized depreciation
on investment securities (343,662)
----------------
Net gain on investment securities 2,504,419
-----------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 2,396,393
=================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FOUNTAINHEAD SPECIAL VALUE FUND
STATEMENT OF CHANGES IN NET ASSETS
<S> <C> <C>
SIX MONTHS
ENDED YEAR
APRIL 30, ENDED
2000 OCTOBER 31,
(UNAUDITED) 1999
------------------- --------------------
Increase/(Decrease) in Net Assets
OPERATIONS
Net investment loss $ (108,026) $ (85,772)
Net realized gain on investment securities 2,848,081 670,151
Change in net unrealized appreciation (depreciation) (343,662) 5,115,600
------------------- --------------------
Net increase in net assets resulting from operations 2,396,393 5,699,979
------------------- --------------------
DISTRIBUTIONS TO SHAREHOLDERS
From net realized gain (680,208) 0
------------------- --------------------
SHARE TRANSACTIONS
Net proceeds from sale of shares 7,198,048 3,403,006
Shares issued in reinvestment of distributions 651,634 0
Shares redeemed (2,310,874) (1,672,500)
------------------- --------------------
NET INCREASE IN NET ASSETS
RESULTING FROM SHARE TRANSACTIONS 5,538,808 1,730,506
------------------- --------------------
TOTAL INCREASE IN NET ASSETS 7,254,993 7,430,485
NET ASSETS
Beginning of period 14,067,805 6,637,320
------------------- --------------------
End of period [including accumulated
undistributed net investment income (loss) of
$(108,026) and $0, respectively] $ 21,322,798 $ 14,067,805
=================== ====================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FOUNTAINHEAD SPECIAL VALUE FUND
FINANCIAL HIGHLIGHTS
<S> <C> <C> <C> <C>
SIX MONTHS
ENDED YEAR YEAR PERIOD
APRIL 30, ENDED ENDED ENDED
2000 OCTOBER 31, OCTOBER 31, OCTOBER 31,
(UNAUDITED) 1999 1998 1997 (A)
--------------- --------------- --------------- ---------------
SELECTED PER SHARE DATA
Net asset value, beginning of period $ 22.86 $ 12.61 $ 13.35 $ 10.00
--------------- --------------- --------------- ---------------
Income from investment operations
Net investment income (loss) (0.15) (0.16) (0.09) (0.02)
Net realized and unrealized gain (loss) 4.63 10.41 (0.51) 3.37
--------------- --------------- --------------- ---------------
Total from investment operations 4.48 10.25 (0.60) 3.35
--------------- --------------- --------------- ---------------
Less Distributions
From net realized gain (1.04) 0.00 (0.14) 0.00
--------------- --------------- --------------- ---------------
Net asset value, end of period $ 26.30 $ 22.86 $ 12.61 $ 13.35
=============== =============== =============== ===============
TOTAL RETURN (b) 19.23% 81.28% (4.67)% 33.70%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000) $21,323 $14,068 $6,637 $2,629
Ratio of expenses to average net assets 1.34% (c) 1.25% 1.20% 0.97% (c)
Ratio of expenses to average net assets
before fee waivers and reimbursement 1.91% (c) 2.50% 2.76% 8.25% (c)
Ratio of net investment income (loss) to
average net assets (1.08)%(c) (0.95)% (0.67)% (0.16)%(c)
Ratio of net investment income (loss) to
average net assets
before fee waivers and reimbursement (1.65)%(c) (2.20)% (2.22)% (7.45)%(c)
Portfolio turnover rate 103.14% (c) 177.56% 108.31% 130.63% (c)
(a) December 31, 1996 (commencement of operations) to October 31, 1997
(b) For periods of less than a full year, total returns are not annualized.
(c) Annualized
</TABLE>
<PAGE>
FOUNTAINHEAD SPECIAL VALUE FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000 (UNAUDITED)
NOTE 1. ORGANIZATION
The Fountainhead Special Value Fund (the "Fund") is organized as a series
of the AmeriPrime Funds, an Ohio business trust (the "Trust"). 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 provide long-term capital growth. The Declaration of Trust
Agreement for the fund permits the Board of Trustees (the "Board") 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 VALUATION- 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 opinion of the Advisor (as such term is defined in note 3 of this document),
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.
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 values 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 by 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.
FOUNTAINHEAD SPECIAL VALUE FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000 (UNAUDITED) - CONTINUED
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
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 its net investment income and any realized
capital gains.
DIVIDENDS AND DISTRIBUTIONS- The Fund intends to comply with federal tax rules
regarding distribution of substantially all its net investment income and
capital gains. These rules may cause multiple distributions during the course of
the year.
REDEMPTION FEES - The Fund charges a redemption fee of 1% of the current net
asset value of shares redeemed if the shares are owned less than 180 days. The
fee is charged for the benefit of remaining shareholders to defray Fund
portfolio transaction expenses and facilitate portfolio management. This fee
applies to shares being redeemed in the order in which they are purchased. The
fee, which is retained by the Fund, is accounted for as an addition to paid-in
capital.
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 King Investment Advisors, Inc. (the "Advisor") to manage the
Fund's investments. Roger E. King, President of the Advisor, 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. 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 1.50% of the
average daily net assets of the Fund. For the six months ended April 30, 2000
the Advisor received a fee of $124,772 from the Fund. The Advisor voluntarily
agreed to waive fees and reimburse expenses for the Fund for the period November
1, 1999 to February 29 to the extent necessary to maintain total operating
expenses at the rate of 1.25% for that period.
FOUNTAINHEAD SPECIAL VALUE FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000 (UNAUDITED) - CONTINUED
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
The Advisor contractually agreed to waive and reimburse expenses for the Fund
for the period March 1, 2000 to April 30, 2000 to the extent necessary to
maintain total operating expenses at the rate of 1.50%. For the six months ended
April 30, 2000, the Advisor waived fees and reimbursed expenses of $57,017. The
Advisor has contractually agreed to waive fees and/or reimburse expenses to
maintain total fund operating expenses at 1.50% of net assets through March 1,
2001.
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 to provide the Fund with administrative services,
including all regulatory reporting and necessary office equipment and personnel.
The Administrator receives a monthly fee 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 six months ended April 30, 2000, the
Administrator received fees of $15,000 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 six months ended April 30, 2000, Unified received
fees of $7,592 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 six months ended April
30, 2000, Unified received fees of $11,400 for fund accounting services provided
to the Fund.
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. No payments were made to the
Distributor for the six months ended April 30, 2000. Certain members of
management of the Administrator and the Distributor are also members of
management of the AmeriPrime Trust.
FOUNTAINHEAD SPECIAL VALUE FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000 (UNAUDITED) - CONTINUED
NOTE 4. SHARE TRANSACTIONS
As of April 30, 2000, the Fund had an unlimited number of authorized
shares. Paid-in capital at April 30, 2000 was $14,211,371.
Transactions in shares were as follows:
<TABLE>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 2000 OCTOBER 31, 1999
SHARES DOLLARS SHARES DOLLARS
Shares sold 252,613 $7,198,048 194,253 $3,403,006
Shares issued in
reinvestment of
dividends 22,666 651,634 0 0
Shares redeemed
(79,824) (2,310,874) (105,383) (1,672,500)
-------- ---------- --------- ----------
195,455 $5,538,808 88,870 $1,730,506
======== ========== ========= ==========
</TABLE>
NOTE 5. INVESTMENTS
For the six months ended April 30, 2000, purchases and sales of investment
securities, other than short-term investments, totaled $11,856,050 and
$9,620,540, respectively. The gross unrealized appreciation for all securities
totaled $4,628,988 and the gross unrealized depreciation for all securities
totaled $147,560 for a net unrealized appreciation of $4,481,428. The total cost
of securities for federal income tax purposes at April 30, 2000 was $14,968,024.
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.
<PAGE>
Dear Fellow Shareholders:
For the six months ended April 30, 2000, the GLOBALT Growth Fund outperformed
its benchmark, the S&P 500 Index, by a significant margin of 11.21% to 7.20%.
The Fund performed very strongly in the first part of the period, when growth
strategies in general were market leaders, and less buoyantly in the second
part, when growth stocks came under pressure. In this period of unusually high
volatility, we are pleased with the Fund's net results.
Periods Ending 4/30/2000 GROWX S&P 500
Avg. Annual 1 Year Return 16.71% 10.13%
Avg. Annual Return Since Inception 23.41% 23.94%
Russell
Period GGF S&P 500 1000 Growth
---------- ------ -------- ------------
Beginning 12/1/95
$25,000 $25,000 $25,000
Dec-95 $26,600 $25,483 $25,143
Jan-96 $27,600 $26,349 $25,984
Feb-96 $28,199 $26,594 $26,460
Mar-96 $28,549 $26,849 $26,495
Apr-96 $29,074 $27,244 $27,190
May-96 $29,400 $27,947 $28,142
Jun-96 $29,400 $28,053 $28,180
Jul-96 $28,074 $26,813 $26,537
Aug-96 $28,871 $27,379 $27,217
Sep-96 $30,647 $28,920 $29,198
Oct-96 $31,195 $29,718 $29,372
Nov-96 $33,295 $31,965 $31,577
Dec-96 $31,913 $31,332 $30,966
Jan-97 $33,914 $33,289 $33,133
Feb-97 $33,052 $33,550 $32,908
Mar-97 $31,558 $32,172 $31,128
Apr-97 $33,862 $34,092 $33,195
May-97 $35,836 $36,168 $35,597
Jun-97 $37,506 $37,788 $37,025
Jul-97 $40,773 $40,795 $40,303
Aug-97 $39,077 $38,510 $37,947
Sep-97 $40,902 $40,619 $39,814
Oct-97 $39,663 $39,262 $38,343
Nov-97 $40,424 $41,080 $39,967
Dec-97 $41,063 $41,785 $40,415
Jan-98 $41,342 $42,247 $41,623
Feb-98 $44,377 $45,294 $44,753
Mar-98 $46,382 $47,613 $46,539
Apr-98 $47,663 $48,092 $47,181
May-98 $46,466 $47,266 $45,841
Jun-98 $48,859 $49,186 $48,651
Jul-98 $48,219 $48,662 $48,330
Aug-98 $40,533 $41,626 $41,076
Sep-98 $42,203 $44,293 $44,231
Oct-98 $44,929 $47,894 $47,787
Nov-98 $47,854 $50,797 $51,423
Dec-98 $51,668 $53,724 $56,062
Jan-99 $54,438 $55,970 $59,353
Feb-99 $51,378 $54,231 $56,640
Mar-99 $52,925 $56,401 $59,625
Apr-99 $54,237 $58,585 $59,703
May-99 $53,451 $57,202 $57,870
Jun-99 $56,246 $60,376 $61,921
Jul-99 $54,266 $58,492 $59,951
Aug-99 $54,239 $58,199 $60,929
Sep-99 $53,306 $56,604 $59,649
Oct-99 $56,920 $60,187 $64,153
Nov-99 $59,749 $61,410 $67,611
Dec-99 $65,706 $65,028 $74,642
Jan-00 $61,416 $61,761 $71,141
Feb-00 $62,269 $60,591 $74,620
Mar-00 $66,379 $66,519 $79,963
Apr-00 $63,306 $64,518 $76,157
Past performance is not predictive of future performance.
The GLOBALT Growth Fund's historical results are net of all
expenses, versus the gross market benchmark (the S&P 500
Index). Investors are reminded that when trying to achieve
benchmark returns, investment management fees, transaction
costs and execution costs will be incurred.
The S&P 500 Index is an unmanaged index of 500 selected common
stocks, most of which are listed on the New York Stock
Exchange. The Index is adjusted for dividends and weighted
toward stocks with large market capitalization.
Inception Date: December 1, 1995.
In the latter part of the period, we took money out of extended high growth
stocks, balancing economic sector representation and increasing the number of
issues in the portfolio. The net effects were to moderate volatility and to
lower the average market capitalization in the Fund. Reliance on the largest
capitalization companies and the Technology sector was reduced, and
participation in a broader range of growth sectors was increased, particularly
companies with greater exposure to improving international economies. In effect,
we spread out our technology names and included more growth drivers at better
valuations. We are convinced that the U.S. economy, while slowing, remains
healthy and the current correction is providing opportunities to own some of the
most promising growth stocks at better prices.
We have not backed away from our conviction that the information age economy is
rapidly creating large new markets. Today, the spending intentions of most
companies are universally single-minded. Virtually every organization is moving
from the planning stage to spending on their number one priority: e-commerce and
the development of the infrastructure necessary to make pervasive e-commerce
possible. We are committed to investing in companies that will benefit from
these developments and are aware that there are many ways to accomplish this in
both "new" and "old" companies. We also understand that the level of creative
destruction (i.e., rapid replacement of old methods with new ways of doing
business) will be high, and we have seen some evidence of this in recent months.
The greater diversification in our portfolios is recognition of our respect for
risk control in this market environment. Higher turnover in the portfolio will
be a by-product of the process, as long as volatility remains high.
Likewise, the idea of two separate economies is simplistic and misleading. In
"old" vs. "new," investors will seek the "real" economy, where a revolution is
occurring in the way business is conducted worldwide. In time, "e" will go back
to being just another letter in the alphabet, because e-business will not be
unique; it will be the standard for all business. We are firmly convinced that
growth strategies will prevail, and that highly charged inflection points in the
stock market create opportunities to own the companies best positioned to cope
with the new, "real" economy. Technology has become the weapon to win the war in
a globally deregulated environment. The shift to a growth focus by the market in
recent years mirrors trends in the real economy brought about by globalization,
deregulation and capital redeployment and in this sense is a secular change in
our opinion. There has never been a more challenging environment in which to be
an investor nor a better time to be focused on the opportunities which the
global "information age" economy is presenting to U.S. companies.
Please contact us with any questions or comments you may have. As always, we
appreciate your confidence in the GLOBALT Growth Fund.
Sincerely,
Samuel E. Allen
Chief Executive Officer
<PAGE>
<TABLE>
<CAPTION>
GLOBALT GROWTH FUND
SCHEDULE OF INVESTMENTS - APRIL 30, 2000
(UNAUDITED)
<S> <C> <C>
COMMON STOCKS - 97.7% SHARES VALUE
ADVERTISING - 1.9%
Interpublic Group of Cos., Inc. 5,400 $ 221,400
Omnicom Group, Inc. 1,800 163,912
-------------------
385,312
-------------------
AIR DELIVERY, FREIGHT & PARCEL SERVICES - 1.3%
United Parcel Service, Inc. 4,000 266,000
-------------------
BANKS - 3.0%
Citigroup, Inc. 7,450 442,809
State Street Corp. 1,700 164,688
-------------------
607,497
-------------------
CHEMICALS - 0.6%
Praxair, Inc. 3,000 133,312
-------------------
COMMUNICATIONS EQUIPMENT - 4.4%
Comverse Technology, Inc. (a) 920 82,052
JDS Uniphase Corp. (a) 1,680 174,300
Lucent Technologies, Inc. 3,300 205,219
Motorola, Inc. 1,300 154,781
QUALCOMM, Inc. (a) 1,900 206,031
Scientific-Atlanta, Inc. 1,300 84,581
-------------------
906,964
-------------------
COMPUTER SERVICES & SOFTWARE - 12.5%
Agile Software Corp. (a) 2,700 100,069
America Online, Inc. (a) 5,000 299,375
i2 Technologies, Inc. (a) 500 64,625
Microsoft Corp. (a) 8,900 620,775
Oracle Corp. (a) 7,500 599,531
PSINet, Inc. (a) 4,800 111,300
Portal Software, Inc. (a) 2,100 96,337
Siebel Systems, Inc. (a) 350 43,006
Verisign, Inc. (a) 700 97,563
Veritas Software Corp. (a) 3,000 321,797
Yahoo!, Inc. (a) 1,700 221,425
-------------------
2,575,803
-------------------
GLOBALT GROWTH FUND
SCHEDULE OF INVESTMENTS - APRIL 30, 2000 (UNAUDITED) - CONTINUED
COMMON STOCKS - CONTINUED
SHARES VALUE
COMPUTERS & OFFICE EQUIPMENT - 12.9%
Cisco Systems, Inc. (a) 12,400 $ 859,668
Dell Computer Corp. (a) 4,000 200,500
Diebold, Inc. 9,500 274,312
EMC Corp. (a) 2,100 291,769
Electronics for Imaging, Inc. (a) 3,000 156,750
International Business Machines, Inc. 3,000 334,875
Network Appliance, Inc. (a) 2,020 149,354
Sun Microsystems, Inc. (a) 4,200 386,138
-------------------
2,653,366
-------------------
DRUGS & PHARMACEUTICALS - 10.2%
Alza Corp. - Class A (a) 3,000 132,000
Amgen, Inc. (a) 4,900 274,400
Bristol-Myers Squibb, Inc. 5,600 293,650
Johnson & Johnson 5,012 413,490
Lilly (Eli) & Co. 2,500 193,281
Merck & Co., Inc. 4,000 278,500
Pharmacia Corp. 2,500 125,000
Warner-Lambert, Inc. 3,400 386,962
-------------------
2,097,283
-------------------
ELECTRIC UTILITY - 0.7%
AES Corp. (a) 1,700 152,044
-------------------
ELECTRONICS - 3.5%
Jabil Circuit, Inc. (a) 5,600 229,250
Molex, Inc.- Class A 9,150 366,000
SCI Systems, Inc. (a) 2,200 117,150
-------------------
712,400
-------------------
ENTERTAINMENT - 3.4%
Time Warner Inc. 4,700 422,706
Viacom, Inc. - Class B (a) 5,000 271,875
-------------------
694,581
-------------------
FINANCE - DIVERSIFIED - 0.9%
American Express Co. 1,300 195,000
-------------------
HOUSEHOLD PRODUCTS - 1.8%
Colgate-Palmolive Co. 2,900 165,662
Procter & Gamble, Inc. 3,300 196,763
-------------------
362,425
-------------------
INDUSTRIAL MACHINERY & EQUIPMENT - 0.8%
Illinois Tool Works, Inc. 2,500 160,156
-------------------
GLOBALT GROWTH FUND
SCHEDULE OF INVESTMENTS - APRIL 30, 2000 (UNAUDITED) - CONTINUED
COMMON STOCKS - CONTINUED
SHARES VALUE
INSURANCE - 3.5%
AFLAC, Inc. 6,100 $ 297,756
American International Group, Inc. 3,200 351,000
Marsh & McLennan Cos., Inc. 800 78,850
-------------------
727,606
-------------------
INVESTMENT SERVICES - 1.9%
Donaldson, Lufkin & Jenrette, Inc. 3,000 125,438
Franklin Resources, Inc. 8,000 258,000
-------------------
383,438
-------------------
MANUFACTURERS - DIVERSIFIED - 7.1%
General Electric Co. 6,300 990,675
Honeywell International, Inc. 5,400 302,738
Minnesota Mining & Manufacturing Co. 2,000 173,000
-------------------
1,466,413
-------------------
MEDICAL EQUIPMENT & SUPPLIES - 2.0%
Stryker Corp. 5,600 402,850
-------------------
OIL & GAS EQUIPMENT - 0.5%
Baker Hughes, Inc. 3,500 111,344
-------------------
OIL & GAS EXPLORATION & PRODUCTION - 1.2%
Apache Corp. (a) 5,000 242,188
-------------------
OIL & GAS SERVICES - 2.7%
Ensco International, Inc. 5,000 165,937
Global Marine, Inc. (a) 7,000 168,000
Halliburton Co. 5,000 220,938
-------------------
554,875
-------------------
PERSONAL CARE PRODUCTS - 2.3%
Avon Products, Inc. 7,000 290,500
Kimberly-Clark Corp. 3,000 174,188
-------------------
464,688
-------------------
PUBLISHING - 0.8%
Reader's Digest Association, Inc. - Class A 5,000 159,688
-------------------
RESTAURANTS - 0.8%
Starbucks Corp. (a) 5,500 166,289
-------------------
GLOBALT GROWTH FUND
SCHEDULE OF INVESTMENTS - APRIL 30, 2000 (UNAUDITED) - CONTINUED
COMMON STOCKS - CONTINUED
SHARES VALUE
RETAIL - DISCOUNT & VARIETY STORES - 2.3%
Costco Wholesale Corp. (a) 2,300 $ 124,344
Wal-Mart Stores, Inc. 6,200 343,325
-------------------
467,669
-------------------
RETAIL - HOME IMPROVEMENT STORES - 0.9%
Home Depot, Inc. 3,300 185,006
-------------------
SEMICONDUCTORS - 6.8%
Anadigics, Inc. (a) 900 67,556
Analog Devices, Inc. (a) 1,500 115,125
Applied Micro Circuits Corp. (a) 800 103,100
Broadcom Corp. - Class A (a) 800 137,900
Conexant Systems, Inc. (a) 380 22,752
Intel Corp. 2,800 355,075
Maxim Integrated Products, Inc. (a) 800 51,850
RF Micro Devices, Inc. (a) 1,900 197,719
Texas Instruments, Inc. 1,000 162,875
Xilinx, Inc. (a) 2,500 183,125
-------------------
1,397,077
-------------------
TELECOMMUNICATION SERVICES - 6.5%
Aether Systems, Inc. (a) 1,100 183,133
Level 3 Communications, Inc. (a) 1,900 169,100
MCI Worldcom, Inc. (a) 10,550 479,366
U.S. West, Inc. 7,000 498,313
-------------------
1,329,912
-------------------
TRAVEL SERVICES - 0.5%
Sabre, Inc. 2,900 101,681
-------------------
TOTAL COMMON STOCKS (Cost $16,557,163) 20,062,867
-------------------
PRINCIPAL
AMOUNT VALUE
MONEY MARKET SECURITIES - 3.6%
Firstar Treasury Fund, 5.00% (b) (Cost $740,182) 740,182 740,182
-------------------
TOTAL INVESTMENTS - (COST $17,297,345) - 101.3% 20,803,049
-------------------
LIABILITIES IN EXCESS OF OTHER ASSETS - (1.3)% (272,846)
-------------------
TOTAL NET ASSETS - 100.0% $ 20,530,203
===================
(a) Non-income producing
(b) Variable rate security; the coupon rate shown represents the rate at April 30, 2000.
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
GLOBALT GROWTH FUND APRIL 30, 2000
STATEMENT OF ASSETS AND LIABILITIES
(UNAUDITED)
ASSETS
Investment in securities, at value (cost $17,297,345) $ 20,803,049
Cash 330
Dividends receivable 11,058
Interest receivable 1,174
Receivable for fund shares sold 167
Receivable for investments sold 85,815
--------------------
TOTAL ASSETS 20,901,593
LIABILITIES
Accrued investment advisory fee payable $ 19,486
Payable for investments purchased 351,904
-------------------
TOTAL LIABILITIES 371,390
--------------------
NET ASSETS $ 20,530,203
====================
Net Assets consist of:
Paid in capital 14,751,696
Undistributed Net Investment Loss (31,661)
Accumulated undistributed net realized gain on investments 2,304,464
Net unrealized appreciation on investments 3,505,704
--------------------
NET ASSETS, for 987,091 shares $ 20,530,203
====================
NET ASSET VALUE
Net Assets
Offering price and redemption price per share ($20,530,203 / 987,091) $ 20.80
====================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GLOBALT GROWTH FUND
STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED APRIL 30, 2000
(UNAUDITED)
<S> <C> <C>
INVESTMENT INCOME
Dividend Income $ 64,243
Interest Income 20,369
-----------------
TOTAL INCOME 84,612
EXPENSES
Investment advisory fee $ 113,387
Trustees' fees 1,992
-----------------
Total expenses before reimbursement 115,379
Reimbursed expenses (1,992)
-----------------
Total operating expenses 113,387
-----------------
NET INVESTMENT LOSS (28,775)
-----------------
REALIZED & UNREALIZED GAIN (LOSS)
Net realized gain on investment securities 2,304,450
Change in net unrealized appreciation (depreciation)
on investment securities (312,861)
-----------------
Net gain on investment securities 1,991,589
-----------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 1,962,814
=================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GLOBALT GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
<S> <C> <C>
SIX MONTHS
ENDED YEAR
APRIL 30, ENDED
2000 OCTOBER 31,
(UNAUDITED) 1999
------------------- -------------------
Increase/(Decrease) in Net Assets
OPERATIONS
Net investment income (loss) $ (28,775) $ (42,743)
Net realized gain on investment securities 2,304,450 844,362
Change in net unrealized
appreciation (depreciation) (312,861) 2,489,533
------------------- -------------------
Net increase in net assets
resulting from operations 1,962,814 3,291,152
------------------- -------------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income 0 (15,584)
From net realized gain (843,737) (592,834)
------------------- -------------------
Total distributions (843,737) (608,418)
------------------- -------------------
SHARE TRANSACTIONS
Net proceeds from sale of shares 2,250,865 4,333,512
Shares issued in reinvestment of distributions 736,100 608,118
Shares redeemed (509,879) (2,399,432)
------------------- -------------------
NET INCREASE IN NET ASSETS RESULTING
FROM SHARE TRANSACTIONS 2,477,086 2,542,198
------------------- -------------------
TOTAL INCREASE IN NET ASSETS 3,596,163 5,224,932
NET ASSETS
Beginning of period 16,934,040 11,709,108
------------------- -------------------
End of period [including accumulated
undistributed net investment income (loss)
of $(31,661) and $(2,886), respectively] $ 20,530,203 $ 16,934,040
=================== ===================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GLOBALT GROWTH FUND
FINANCIAL HIGHLIGHTS
<S> <C> <C> <C> <C> <C>
SIX MONTHS PERIOD
ENDED YEARS ENDED OCTOBER 31, ENDED
APRIL 30, 2000 ---------------------------------------------------- OCTOBER 31,
(UNAUDITED) 1999 1998 1997 1996 (A)
-------------- ---------------- --------------- --------------- -----------------
SELECTED PER SHARE DATA
Net asset value, beginning of period $ 19.53 $ 16.14 $ 15.66 $ 12.48 $ 10.00
-------------- ---------------- --------------- --------------- -----------------
Income from investment operations:
Net investment income (loss) (0.03) (0.05) 0.02 0.01 0.01
Net realized and unrealized gain 5.13 4.27 1.86 3.34 2.47
-------------- ---------------- --------------- --------------- -----------------
Total from investment operations 5.10 4.22 1.88 3.35 2.48
-------------- ---------------- --------------- --------------- ----------------
Less Distributions
From net investment income 0.00 (0.02) (0.01) 0.00 0.00
From net realized gain (0.95) (0.81) (1.39) (0.17) 0.00
-------------- ---------------- --------------- --------------- ----------------
Total Distributions (0.95) (0.83) (1.40) (0.17) 0.00
-------------- ---------------- --------------- --------------- ----------------
Net asset value, end of period $ 23.68 $ 19.53 $ 16.14 $ 15.66 $ 12.48
============== ================ =============== =============== ================
TOTAL RETURN (b) 11.21% 26.67% 13.28% 27.15% 24.80%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000) $20,530 $16,934 $11,709 $8,003 $3,443
Ratio of expenses to average net assets 1.17% (c) 1.17% 1.17% 1.17% 1.16% (c)
Ratio of expenses to average net assets
before reimbursement 1.19% (c) 1.18% 1.19% 1.19% 1.25% (c)
Ratio of net investment income (loss) to
average net assets (0.30)%(c) (0.27)% 0.14% 0.06% 0.11% (c)
Ratio of net investment income (loss) to
average net assets before reimbursement (0.32)%(c) (0.28)% 0.12% 0.04% 0.02% (c)
Portfolio turnover rate 72.52%(c) 120.46% 83.78% 110.01% 66.42% (c)
(a) December 1, 1995 (commencement of operations) to October 31, 1996
(b) For periods of less than a full year, total returns are not annualized.
(c) Annualized
</TABLE>
<PAGE>
GLOBALT GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000 (UNAUDITED)
NOTE 1. ORGANIZATION
GLOBALT Growth Fund (the "Fund") was organized as a series of the
AmeriPrime Funds, an Ohio business trust (the "Trust) on October 20, 1995 and
commenced operations on December 1, 1995. 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 provide
long-term growth of capital. The Declaration of Trust Agreement permits the
Board of Trustees (the "Board") 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 VALUATION- 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.
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.
GLOBALT GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000 (UNAUDITED) - CONTINUED
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
DIVIDENDS AND DISTRIBUTIONS- The Fund intends to comply with federal tax rules
regarding distribution of substantially all of its net investment income and
capital gains. These rules may cause multiple distributions during the course of
the 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 GLOBALT, Inc. (the "Advisor") to manage the Fund's
investments. The advisor was organized as a Georgia corporation in 1990. Angela
Allen, President of the Advisor, and Samuel Allen, Chairman of the Advisor, are
the controlling shareholders of GLOBALT, Inc. The investment decisions for the
Fund are made by a committee of the Advisor, which 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 and
pays all of the expenses of the Fund except brokerage commissions, taxes,
interest, fees and expenses of non-interested person trustees, and extraordinary
expenses. As compensation for its management services and agreement to pay the
Fund's expenses, the Fund is obligated to pay the Advisor a fee computed and
accrued daily and paid monthly at an annual rate of 1.17% of the average daily
net assets of the Fund. 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. For the six months ended April 30,
2000, the Advisor received a fee of $113,387 from the Fund. The Advisor has
voluntarily agreed to reimburse other expenses for the six months ended April
30, 2000 to the extent necessary to maintain total expenses at the rate of
1.17%. For the six months ended April 30, 2000, the Advisor reimbursed expenses
of $1,992. There is no assurance that such reimbursement will continue in the
future.
The Fund retains AmeriPrime Financial Services, Inc. (the "Administrator"), a
wholly owned subsidiary of Unified Financial Services, Inc., to manage the funds
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 Advisor equal to an annual rate of
0.10% of the Fund's assets under
GLOBALT GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000 (UNAUDITED) - CONTINUED
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
$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 six months ended April 30, 2000, the Administrator
received fees of $15,000 from the Advisor 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 Advisor of $1.20 per shareholder (subject to a minimum
monthly fee of $750). For the six months ended April 30, 2000, Unified received
fees of $8,357 from the Advisor for transfer agent services provided to the
Fund. For its services as fund accountant, Unified receives an annual fee from
the Advisor equal to 0.0275% of the Fund's assets up to $100 million, and
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 to $100 million). For the
six months ended April 30, 2000, Unified received fees of $10,800 from the
Advisor for fund accounting services provided to the Fund.
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. There were no payments made to the
Distributor for the six months ended April 30, 2000. Certain members of
management of the Administrator and the Distributor are also members of
management of the AmeriPrime Trust.
NOTE 4. SHARE TRANSACTIONS
As of April 30, 2000, there were an unlimited number of authorized shares
for the Fund. Paid in capital at April 30, 2000 was $14,751,696.
Transactions in shares were as follows:
<TABLE>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 2000 (UNAUDITED) OCTOBER 31, 1999
SHARES DOLLARS SHARES DOLLARS
Shares sold 110,372 $2,250,865 237,096 $4,333,512
Shares issued in reinvestment
of distributions
Shares redeemed (24,454) (509,879) (130,011) (2,399,432)
-------- ----------- ---------- ----------
120,139 $2,477,086 141,345 $2,542,198
======== =========== ========== ==========
</TABLE>
GLOBALT GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000 (UNAUDITED) - CONTINUED
NOTE 5. INVESTMENTS
For the six months ended April 30, 2000, purchases and sales of investment
securities, other than short-term investments, aggregated $15,508,286 and
$13,452,081, respectively. The gross unrealized appreciation for all securities
totaled $4,343,123 and the gross unrealized depreciation for all securities
totaled $837,419 for a net unrealized appreciation of $3,505,704. The aggregate
cost of securities for federal income tax purposes at April 30, 2000 was
$17,297,345.
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.
<PAGE>
