BULLFINCH FUND, INC.
2 LANTERN LANE
HONEOYE FALLS, NEW YORK 14472
(716) 624-1758
1-888-BULLFINCH
(1-888-285-5346)
Semi-Annual Report
December 31, 1998
(Unaudited)
<PAGE>
February 15, 1999
Dear Shareholders:
We are very pleased to present the December 1998 Semi-Annual Report
(Unaudited) of the Bullfinch Fund, Inc. This report contains the unaudited
statements for both the Unrestricted Series and the Western New York Series.
We are happy to report we have experienced very good asset growth in the
Unrestricted Series since its inception (July 24, 1997). As this report
shows, this asset growth has allowed us to keep the expense ratio of the
Unrestricted Series below our self-imposed 2% cap. We look forward to continued
growth in assets in both Series. At this point in the life of the Series, asset
growth is most important as it allows the expense ratio of the fund to continue
to decline. This report marks the first full year of existence for the Western
New York Series (it became effective December 30, 1997).
We wish to thank our shareholders for expressing their confidence in us and
wish them continued good fortune in the coming year.
Best Regards,
Bullfinch Fund, Inc.
Christopher Carosa
President
<PAGE>
UNRESTRICTED SERIES
(A Series Within Bullfinch Fund, Inc.)
UNAUDITED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 1998, JUNE 30, 1998 AND 1997
<PAGE>
UNRESTRICTED SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1998
(UNAUDITED)
ASSETS
12/1998
Investments in securities, at fair value,
identified cost $729,083 $ 766,741
Cash 34,676
Accrued interest and dividends 1,000
Prepaid expenses 1,729
Due from Investment Adviser 859
Organization expenses, net of accumulated
amortization of $1,550 1,788
--------
Total assets $ 806,793
========
LIABILITIES
Accounts payable 4,053
--------
NET ASSETS
Net assets (equivalent to $11.45 per share
based on 70,093.419 shares of common
stock outstanding) $ 802,740
=========
COMPOSITION OF NET ASSETS
Shares of common stock $ 759,480
Accumulated net investment income 5,602
Net unrealized depreciation on investments 37,658
---------
Net assets at December 31, 1998 $ 802,740
=========
The accompanying notes are an integral part of these statements.
-2-
<PAGE>
UNRESTRICTED SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
SCHEDULE OF INVESTMENTS IN SECURITIES
DECEMBER 31, 1998
(UNAUDITED)
Historical
Common Stocks - 89.3% Shares Cost Value
Computer software - 21.3%
Oracle Corporation 2,000 $ 46,412 $ 86,250
Network Associates, Inc. 1,000 30,896 66,250
--------- --------
77,308 152,500
Medical Products and Supplies - 8.1%
Dentsply Int'l Inc. 1,350 30,400 34,762
Mentor Corporation 700 17,963 16,406
Vital Signs, Inc. 100 7,760 7,000
--------- --------
56,123 58,168
Instruments - 6.7%
Thermedics, Inc. 2,500 42,338 27,031
Coherent, Inc. 1,700 34,250 21,144
--------- --------
76,588 48,175
Leisure and Recreational - 6.4%
International Game Technology 1,600 29,749 38,900
Jackpot Enterprises, Inc. 726 7,804 6,852
--------- --------
37,553 45,752
Electronics Components - 6.0%
Park Electrochemical Corp. 1,500 41,436 42,938
Banking and Finance - 5.4%
Fiserv, Inc. 750 22,369 38,577
Utilities - 5.3%
Empire District Electric Co. 1,250 21,665 30,938
Texas Utilities Company 110 4,455 5,136
Nevada Power Company 80 1,620 2,080
--------- --------
27,740 38,153
Electrical Equipment - 5.2%
Baldor Electric Company 1,850 36,962 37,462
Shoes and Leather - 4.8%
Wolverine World Wide 2,600 44,582 34,450
Cosmetics - 4.6%
Helen of Troy Ltd. 2,250 34,441 33,047
Mining - 4.4%
Brush Wellman, Inc. 1,800 41,478 31,388
Automotive Parts - 4.3%
Superior Industries Intl 1,100 30,862 30,594
Airline - 4.3%
ASA Holdings, Inc. 1,000 29,097 30,500
Retail - General - 4.1%
Dollar General Corporation 1,250 26,313 29,531
Steel - 4.0%
A.M. Castle & Co. 1,900 36,530 28,500
Industrial Services - 2.8%
Olsten Corporation 2,650 44,142 19,544
Beverage - 1.1%
Pepsico Incorporated 200 6,975 8,175
Pre-Fab Housing - 0.5%
Skyline Corporation 100 2,338 3,250
Retail - Specialty - 0.2%
Toys R Us, Inc. Holding Company 100 2,500 1,694
Telecommunications - 0.2%
Vertex Communications Corp. 100 2,125 1,588
Entertainment - 0.2%
Walt Disney Holding Co. 16 1,166 1,440
Restaurants/Food Service - 0.1%
Tricon Global Restaurant, Inc. 20 - 1,003
--------- ---------
TOTAL COMMON STOCKS $ 678,628 $ 716,429
--------- ---------
U.S. Government Obligations - 6.3%
U.S. Treasury Note - 100% $ 50,000 $ 50,455 $ 50,312
--------- ---------
TOTAL U.S. GOVERNMENT OBLIGATIONS $ 50,455 $ 50,312
--------- ---------
$ 729,083 $ 766,741
========= =========
The accompanying notes are an integral part of these statements.
-3-
<PAGE>
UNRESTRICTED SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENTS OF OPERATIONS
FOR THE PERIOD FROM JULY 1, 1998 TO DECEMBER 31, 1998,
FOR THE YEAR ENDED JUNE 30, 1998 AND FOR THE PERIOD
FROM INCEPTION (FEBRUARY 1, 1997) TO JUNE 30, 1997
(UNAUDITED)
12/1998 6/1998 6/1997
INVESTMENT INCOME:
Dividends $ 4,845 $ 8,559 $ 1,634
Interest 2,625 5,301 -
-------- --------- ---------
7,470 13,860 1,634
EXPENSES:
Management Fees 4,033 6,599 589
Reimbursement of Management Fees - (3,303) -
Custody Fee 25 - 35
Legal and Professional 1,891 3,000 -
Director's Fee 403 900 -
Amortization 293 814 444
Fidelity Bond 231 689 -
Taxes 378 637 -
Registration Fees 604 676 -
Bank Service Charges 299 404 -
Dues and Subscriptions 61 110 228
Miscellaneous Expenses 701 - -
---------------------------------
8,919 10,526 1,296
----------------------------------
Investment income - net (1,449) 3,334 338
----------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Realized gain from securities transactions 21,208 18 514
Unrealized appreciation (depreciation)
during the period 21,014 (3,930) 8,277
----------------------------------
Net gain (loss) on investments 42,222 (3,912) 8,791
==================================
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 40,773 (578) 9,129
==================================
The accompanying notes are an integral part of these statements.
UNRESTRICTED SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD FROM JULY 1, 1998 TO DECEMBER 31, 1998,
FOR THE YEAR ENDED JUNE 30, 1998 AND FOR THE PERIOD
FROM INCEPTION (FEBRUARY 1, 1997) TO JUNE 30, 1997
(UNAUDITED)
12/1998 6/1998 6/1997
DECREASE IN NET ASSETS FROM OPERATIONS:
Investment income - net $ (1,449) $ 3,334 $ 338
Net realized gain from
securities transaction 21,208 18 514
Net change in unrealized
appreciation of investments 21,014 (3,930) 8,277
----------------------------------
Increase (decrease) in net assets
from operations 40,773 (578) 9,129
CAPITAL SHARE TRANSACTIONS
Sales (6,844.699, 73,972.543
and 11,247.184 shares) 68,677 832,796 112,471
Redemptions (5,244.255 and
17,275.449 shares) (57,529) (202,999) -
----------------------------------
Total capital share transactions 11,148 629,797 112,471
----------------------------------
Increase in net assets 51,921 629,219 121,600
NET ASSETS:
Beginning of period 750,819 121,600 -
----------------------------------
End of period $ 802,740 $ 750,819 $ 121,600
==================================
The accompanying notes are an integral part of these statements.
-4-
<PAGE>
UNRESTRICTED SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
(UNAUDITED)
(1) The Organization
The Unrestricted Series (the "Series") is a series of the Bullfinch
Fund, Inc. (the "Fund") was organized as a corporation in Mary-
land on January 29, 1997 and commenced operations on February 1, 1997.
The Fund had no operations prior to February 1, 1997 other than matters
relating to its organization and registration as an open-end, non-divers-
ified management investment company under the Investment Company Act of
1940, and its registration of securities under the Securities Act of
1933. On February 1, 1997, the Fund sold 11,247.184 shares of common
stock ("initial shares") to its initial, joint tenant investors.
The investment objective of the Series is to seek conservative long-term
growth in capital. The Adviser seeks to achieve this objective by using
an asset mix consisting primarily of exchange listed securities and over-
the-counter common stocks as well as U.S. Government securities maturing
within five years.
(2) Summary of Significant Accounting Policies
Cash -
Cash consists of amounts deposited in money market accounts and is not
federally insured. The Fund has not experienced any losses on such
amounts and believes it is not exposed to any significant credit risk on
cash.
Security Valuation -
The Series records its investments at fair value.
Securities traded on national securities exchanges or the NASDAQ National
Market System are valued daily at the closing prices of the securities on
those exchanges and securities traded on over-the-counter markets are
valued daily at the closing bid prices. Short-term and money market sec-
urities are valued at amortized cost which approximates market value.
Federal Income Taxes -
For federal income tax purposes, the Fund is expected to qualify as a
regulated investment company under the provisions of the Internal Revenue
Code by distributing substantially all of its taxable net income (both
ordinary and capital gain) to its shareholders and complying with other
requirements for regulated investment companies. Therefore, no provision
for income taxes is required.
-5-
<PAGE>
Organization Expenses -
Organization expenses are being amortized over a 60-month period.
The Fund's initial shareholders have agreed that if any of the initial
shares are redeemed during the first 60 months of the Fund's operations
by any holder thereof, the proceeds of the redemption will be reduced by
the pro rata share of the unamortized organization expenses as of the date
of the redemption. The pro rata share by which the redemption proceeds
shall be reduced shall be derived by dividing the number of original
shares redeemed by the total number of original shares outstanding at the
time of the redemption.
Distributions to Shareholders -
The Series intends to distribute its net investment income and net
realized capital gains to its shareholders on December 29, 1998,
June 30, 1998 and 1997 in the form of stock dividends equal to
172.798, 297.096 and 78.803 shares of stock.
Other -
The Series follows industry practice and records security transactions on
the trade date. The specific identification method is used for determin-
ing gains or losses for financial statement and income tax purposes.
Dividend income is recorded on the ex-dividend date and interest income
is recorded on the accrual basis.
Estimates -
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements
accompanying notes. Actual results could differ from those estimates.
(3) Investments
For the period ending December 31, 1998, the Series purchased $203,742
of common stock. During the same period, the Series sold $50,389 of U.S.
Government obligations and $74,738 of common stock.
For the year ended June 30, 1998, the Series purchased $50,455 of U.S.
Government obligations and $485,826 of common stock. During the same per-
iod, the Series sold $29 of common stock.
For the period ended June 30, 1997, the Series purchased $50,377 of U.S.
Government obligations and $5,541 of common stock. During the same per-
iod, the Series sold $7,663 of common stock and $256 of short-term in-
vestments.
At December 31, 1998, the gross unrealized appreciation for all securi-
ties totaled $122,070 and the gross unrealized depreciation for all
securities totaled $84,412, or a net unrealized appreciation of $37,658.
The aggregate cost of securities for federal income tax purposes at
December 31, 1998 was $729,083.
At June 30, 1998, the gross unrealized appreciation for all securities
totaled $62,102 and the gross unrealized depreciation for all securities
totaled $57,755, or a net unrealized appreciation of $4,347. The aggre-
gate cost of securities for federal income tax purposes at June 30,
1998 was $641,167.
At June 30, 1997, the gross unrealized appreciation for all securities
totaled $9,862 and the gross unrealized depreciation for all securities
totaled $1,585, or a net unrealized appreciation of $8,277. The aggre-
gate cost of securities for federal income tax purposes at June 30,
1997 was $104,898.
(4) Investment Advisory Agreement
Carosa, Stanton & DePaolo Asset Management, LLC serves as investment
advisor to the Fund pursuant to an investment advisory agreement which
was approved by the Fund's board of directors. Carosa, Stanton & DePaolo
Asset Management, LLC is a registered Investment adviser under the
Investment Advisers Act of 1940. The Investment advisory agreement
provides that Carosa, Stanton & DePaolo Asset Management, LLC,
subject to the supervision and approval of the Fund's board of directors,
is responsible for the day-to-day management of the Series' portfolio
which include selecting the investments and handling its business affairs.
-6-
<PAGE>
As compensation for its services to the Fund, the investment advisor re-
ceives monthly compensation at an annual rate of 1.25% on the first $1
million of daily average net assets and 1% on that portion of the daily
average net assets in excess of $1 million. These fees will be reduced
by any sub-transfer agent fees incurred by the Fund.
Carosa, Stanton & DePaolo Asset Management, LLC has agreed to forego
sufficient investment advisory fees to limit total expenses of the Fund
to 2% of the first $10 million in average assets and 1.5% of the next
$20 million in average assets.
(5) Capital Share Transactions
The Fund has authorized 10,000,000 shares of common stock at $0.01 par
value per share. Each share has equal dividend, distribution and liquid-
ation rights. Transactions in capital stock were as follows:
Shares Amount
Shares sold during 1997 11,247.184 $ 112,471
Shares issued in 6/30/97 stock dividend 78.803 -
---------- -----------
11,325.987 112,471
---------- -----------
Shares sold during 1998 73,972.543 $ 832,796
Shares redeemed during 1998 (17,275.449) (202,999)
Shares issued in 6/30/98 stock dividend 297.096 -
---------- -----------
56,994.190 629,797
---------- -----------
Shares sold this period 6,844.699 $ 68,677
Shares redeemed this period (5,244.255) (57,529)
Shares issued in 12/31/98 stock dividend 172.798 -
---------- -----------
1,773.242 11,148
---------- -----------
70,093.419 753,416
========== ===========
UNRESTRICTED SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
FINANCIAL HIGHLIGHTS AND RELATED RATIOS/
SUPPLEMENTAL DATA FOR A SHARE OUTSTANDING
FOR THE PERIOD FROM JULY 1, 1998 TO DECEMBER 31, 1998
FOR THE YEAR ENDED JUNE 30, 1998 AND FOR THE PERIOD
FROM INCEPTION (FEBRUARY 1, 1997) TO JUNE 30, 1997
(UNAUDITED)
12/1998 6/1998 6/1997
NET ASSET VALUE, beginning of period $ 10.99 $ 10.74 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (.02) - .03
Net gain on securities both
realized and unrealized .51 .30 .78
-----------------------------
.49 .30 .81
-----------------------------
STOCK DIVIDEND (.03) (.05) (.07)
-----------------------------
NET ASSET VALUE, end of period 11.45 $ 10.99 $ 10.74
=============================
NET ASSETS, end of period $ 802,740 $ 750,819 $ 121,600
================================
Actual * Actual Actual **
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.3 * 2.0% 1.1% **
RATIO OF NET INVESTMENT INCOME TO
AVERAGE NET ASSETS (.2) * 0.6% .3% **
PORTFOLIO TURNOVER RATE 18.4 * - 6.9% **
* The ratios presented were calculated using operating data for the six
month period from July 1, 1998 to December 31, 1998.
** The ratios presented were calculated using operating data for the five
month period from inception (February 1, 1997) to June 30, 1997.
The accompanying notes are an integral part of these statements.
-7-
<PAGE>
WESTERN NEW YORK SERIES
(A Series Within Bullfinch Fund, Inc.)
UNAUDITED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 1998 AND JUNE 30, 1998
<PAGE>
WESTERN NEW YORK SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1998
(UNAUDITED)
ASSETS
12/1998
Investments in securities, at fair value,
identified cost $144,466 $ 130,470
Cash 35,668
Accrued interest and dividends 48
Prepaid expenses 1,529
Due from Investment Adviser 3,727
Organization expenses, net of accumulated
amortization of $715 2,624
----------
Total assets 174,066
----------
LIABILITIES
Accounts payable 9,308
NET ASSETS
Net assets (equivalent to $9.02 per share
based on 18,275.856 shares outstanding) $ 164,758
==========
COMPOSITION OF NET ASSETS
Shares of common stock $ 185,956
Accumulated net investment income (7,202)
Net unrealized appreciation on investments (13,996)
----------
Net assets at December 31, 1998 $ 164,758
==========
The accompanying notes are an integral part of these statements.
-10-
<PAGE>
WESTERN NEW YORK SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
SCHEDULE OF INVESTMENTS IN SECURITIES
DECEMBER 31, 1998
(UNAUDITED)
Historical
Common Stocks - 100% Shares Cost Value
Electrical Equipment - 13.3%
ACME Electric Corporation 1,750 $ 9,171 $ 8,313
PSC, Inc. 950 9,437 9,025
--------- --------
18,608 17,338
Electronic Components - 7.9%
Astronics Corporation 605 5,021 5,823
Paxar Corp. 500 4,192 4,469
--------- --------
9,213 10,292
Industrial Services - 7.7%
American Locker Group, Inc. 400 2,544 10,100
Industrial Materials - 7.3%
American Precision Industries 550 9,776 5,672
Servotronics, Inc. 600 5,624 3,900
--------- --------
15,400 9,572
Computer Hardware - 6.0%
Performance Technologies, Inc. 600 8,232 7,875
Medical Services - 5.5%
Rural/Metro Corporation 650 11,157 7,109
Real Estate and Related - 4.8%
Sovran Self Storage 250 6,892 6,281
Metal Fabrication and Hardware - 4.8%
Graham Corp. 800 6,076 6,200
Computer Software - 4.7%
Comptek Research, Inc. 700 4,971 6,125
Medical Products and Supplies - 4.6%
Bausch & Lomb, Inc. 100 3,944 6,000
Steel - 4.4%
Gibraltar Steel Corporation 250 4,820 5,688
Machinery - 4.2%
Gleason Corporation 200 5,373 3,625
Columbus McKinnon Corporation 100 2,344 1,800
--------- --------
7,717 5,425
Computer Services - 4.2%
Computer Task Group, Inc. 200 6,681 5,425
Apparel - 4.1%
Hartmarx Corporation 950 7,485 5,343
Commercial Services - 3.9%
Paychex, Inc. 100 4,412 5,144
Railroads - 3.9%
Genessee & Wyoming Class A 400 5,674 5,100
Furniture - 3.3%
Bush Industries, Inc. 350 9,107 4,353
Manufacturing - 3.0%
Mark IV Industries, Inc. 300 6,462 3,900
Environment Services - 2.5%
Sevenson Environmental Srvs, Inc 400 5,071 3,200
--------- ---------
TOTAL COMMON STOCK $ 144,466 $ 130,470
========= =========
The accompanying notes are an integral part of these statements.
-11-
<PAGE>
WESTERN NEW YORK SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM JULY 1, 1998 TO DECEMBER 31, 1998 AND
FOR THE PERIOD FROM INCEPTION (SEPTEMBER 29, 1997)
TO JUNE 30, 1998 (UNAUDITED)
12/1998 6/1998
INVESTMENT INCOME:
Dividends $ 1,699 $ 1,705
Interest - 1,121
--------------------
1,699 2,826
--------------------
EXPENSES:
Management Fees 991 1,214
Reimbursement of Management Fees (1,529) (3,016)
Legal and Professional 890 3,000
Director's Fee 403 300
Amortization 391 324
Fidelity Bond 231 230
Taxes 252 238
Registration Fees 270 341
Bank Service Charges 299 -
Dues and Subscriptions 36 -
--------------------
2,234 2,631
--------------------
Investment income - net (535) 195
--------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from securities transactions (4,749) -
Unrealized appreciation (depreciation)
during the period (18,994) 3,071
--------------------
Net gain (loss) on investments (23,743) 3,071
--------------------
INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS $ (25,278) $ 3,266
====================
The accompanying notes are an integral part of these statements.
WESTERN NEW YORK SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD FROM JULY 1, 1998 TO DECEMBER 31, 1998
FOR THE PERIOD FROM INCEPTION (SEPTEMBER 29, 1997)
TO JUNE 30, 1998
(UNAUDITED)
12/1998 6/1998
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Investment income - net $ 535 $ 195
Net realized gain (loss) from
securities transactions (4,749) -
Net change in unrealized appreciation
(depreciation) of investments (18,994) 3,071
-------------------
Increase (decrease) in net assets from operations (24,278) 3,266
CAPITAL SHARE TRANSACTIONS
Sales (1,678.832 and 16,850.33 shares) 15,251 172,964
Redemptions (271.043 and 0 shares) (2,445) -
-------------------
Total capital share transactions 12,806 172,964
-------------------
Increase (decrease) in net assets (11,472) 176,230
NET ASSETS:
Beginning of period 176,230 -
-------------------
End of period $164,758 $ 176,230
===================
The accompanying notes are an integral part of these statements.
-13-
<PAGE>
WESTERN NEW YORK SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
(UNAUDITED)
(1) The Organization
The Western New York Series (the "Series") is a series of the Bullfinch
Fund, Inc. (the "Fund") was organized as a corporation in Mary-
land on January 29, 1997 as an open-end, non-diversified management
investment company under the Investment Company Act of
1940, and its registration of securities under the Securities Act of
1933. On September 29, 1997, the Fund sold 10,500 shares of the
Series to its initial investor for $105,000.
The investment objective of the Series is to seek capital appreciation
through the investment in common stock of companies with in important
economic presence in the Greater Western New York Region. The Adviser
seeks to achieve this objective by using
an asset mix consisting primarily of exchange listed securities and over-
the-counter common stocks as well as U.S. Government securities maturing
within five years.
(2) Summary of Significant Accounting Policies
Cash -
Cash consists of amounts deposited in money market accounts and is not
federally insured. The Fund has not experienced any losses on such
amounts and believes it is not exposed to any significant credit risk on
cash.
Security Valuation -
The Series records its investments at fair value.
Securities traded on national securities exchanges or the NASDAQ National
Market System are valued daily at the closing prices of the securities on
those exchanges and securities traded on over-the-counter markets are
valued daily at the closing bid prices. Short-term and money market sec-
urities are valued at amortized cost which approximates market value.
Federal Income Taxes -
For federal income tax purposes, the Fund is expected to qualify as a
regulated investment company under the provisions of the Internal Revenue
Code by distributing substantially all of its taxable net income (both
ordinary and capital gain) to its shareholders and complying with other
requirements for regulated investment companies. Therefore, no provision
for income taxes is required.
-14-
<PAGE>
Organization Expenses -
Organization expenses are being amortized over a 60-month period.
The Series' initial shareholders have agreed that if any of the initial
shares are redeemed during the first 60 months of the Series' operations
by any holder thereof, the proceeds of the redemption will be reduced by
the pro rata share of the unamortized organization expenses as of the date
of the redemption. The pro rata share by which the redemption proceeds
shall be reduced shall be derived by dividing the number of original
shares redeemed by the total number of original shares outstanding at the
time of the redemption.
Distributions to Shareholders -
The Fund has distributed its net investment income and net realized
capital gains to its shareholders on June 30, 1998 in the form of stock
dividends equal to 17.737 shares of stock.
Other -
The Series follows industry practice and records security transactions on
the trade date. The specific identification method is used for determin-
ing gains or losses for financial statement and income tax purposes.
Dividend income is recorded on the ex-dividend date and interest income
is recorded on the accrual basis.
Estimates -
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements
accompanying notes. Actual results could differ from those estimates.
(3) Investments
For the period from July 1, 1998 to December 31, 1998, the Series
purchased $15,942 of common stock and sold $1,147 of common stock.
For the period ended June 30, 1998, the Series purchased $98,879 of U.S.
Government obligations and $136,357 of common stock.
At December 31, 1998, the gross unrealized appreciation for all securi-
ties totaled $13,568 and the gross unrealized depreciation for all
securities totaled $27,564, or a net unrealized appreciation of
$13,996. The aggregate cost of securities for federal income tax
purposes at December 31, 1998 was $144,466.
At June 30, 1998, the gross unrealized appreciation for all securities
totaled $16,011 and the gross unrealized depreciation for all securities
totaled $12,940, or a net unrealized appreciation of $3,071. The aggre-
gate cost of securities for federal income tax purposes at June 30,
1998 was $136,357.
(4) Investment Advisory Agreement
Carosa, Stanton & DePaolo Asset Management, LLC serves as investment
advisor to the Fund pursuant to an investment advisory agreement which
was approved by the Fund's board of directors. Carosa, Stanton &
DePaolo Asset Management, LLC is a registered Investment adviser under
the Investment Advisers Act of 1940. The Investment advisory agreement
provides that Carosa, Stanton & DePaolo Asset Management, LLC,
subject to the supervision and approval of the Fund's board of directors,
is responsible for the day-to-day management of the Fund's portfolio
which include selecting the investments and handling its business affairs.
-15-
<PAGE>
As compensation for its services to the Fund, the investment advisor re-
ceives monthly compensation at an annual rate of 1.25% on the first $1
million of daily average net assets and 1% on that portion of the daily
average net assets in excess of $1 million. These fees will be reduced
by any sub-transfer agent fees incurred by the Fund.
Carosa, Stanton & DePaolo Asset Management, LLC has agreed to forego
sufficient investment advisory fees to limit total expenses of the Fund
to 2% of the first $10 million in average assets and 1.5% of the next
$20 million in average assets.
(5) Capital Share Transactions
The Fund has authorized 10,000,000 shares of common stock at $0.01 par
value per share. Each share has equal dividend, distribution and liquid-
ation rights. Transactions in capital stock were as follows:
Shares Amount
Shares sold during 1998 16,850.330 $ 172,964
Shares issued in 6/30/98 stock dividend 17.737 -
---------- -----------
16,868.067 172,964
---------- -----------
Shares sold this period 1,678.832 $ 15,251
Shares redeemed this period (271.043) (2,445)
Shares issued in 12/31/98 stock dividend - -
---------- -----------
1,407.789 12,806
---------- -----------
18,275.856 185,770
========== ===========
WESTERN NEW YORK SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
FINANCIAL HIGHLIGHTS AND RELATED RATIOS/
SUPPLEMENTAL DATA FOR A SHARE OUTSTANDING
FOR THE PERIOD FROM JULY 1, 1998 TO DECEMBER 31, 1998 AND
FOR THE PERIOD FROM INCEPTION (SEPTEMBER 29, 1997)
TO JUNE 30, 1998
(UNAUDITED)
12/1998 6/1998
NET ASSET VALUE, beginning of period $ 10.45 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (.06) .02
Net gain on securities both realized and unrealized (1.38) .44
-------------------
(1.43) .46
-------------------
STOCK DIVIDEND - (.01)
-------------------
NET ASSET VALUE, end of period $ 9.02 $ 10.45
===================
NET ASSETS, end of period $ 164,758 176,230
===================
Actual* Actual**
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.4%* 2.0%**
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS (0.3)%* 0.2%**
PORTFOLIO TURNOVER RATE 0.7%* -
* The ratios presented were calculated using operating data for the six
month period from July 1, 1998 to December 31, 1998.
** The ratios presented were calculated using operating data for the five
month period from inception (February 1, 1997) to June 30, 1997.
The accompanying notes are an integral part of these statements.
-16-
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