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, 1999
(Unaudited)
<PAGE>
February 15, 2000
Dear Fellow Shareholders:
We are very pleased to present the December 1999 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 continue to see 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.
Towards the end of 1999, we shifted out of some of our technology stocks. These
stocks has doubled in price within the year and were surpassing even wildly
optimistic valuations. In keeping with our conservative long-term discipline,
we sold these stocks, leaving us with an unusually high cash position going
into the beginning of the year 2000. Indeed, as the broader markets have
collapsed since the beginning of the year, we have been able to put some of
that cash to work.
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, 1999
<PAGE>
UNRESTRICTED SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
(UNAUDITED)
ASSETS
12/1999
Investments in securities, at fair value,
identified cost $880,420 $ 841,811
Cash 209,475
Accrued interest and dividends 1,603
Prepaid expenses 1,232
Organization expenses, net of accumulated
amortization of $2,575 763
Receivable from Shareholder Purchase 1,464
--------
Total assets $1,056,348
========
LIABILITIES
Accounts payable 87,484
--------
NET ASSETS
Net assets (equivalent to $11.80 per share
based on 82,114.543 shares of common
stock outstanding) $ 968,864
=========
COMPOSITION OF NET ASSETS
Shares of common stock $ 905,174
Accumulated net investment income 118,863
Net unrealized depreciation on investments (55,173)
---------
Net assets at December 31, 1999 $ 968,864
=========
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, 1999
(UNAUDITED)
Historical
Common Stocks - 86.7% Shares Cost Value
Leisure & Recreational - 11.30%
Hasbro Inc. 1,400 25,726 26,513
International Game Technology 1,600 29,749 32,500
Mattel Inc. 2,750 44,066 36,094
--------- --------
99,542 95,106
Banking and Finance - 11.11%
FIserv, Inc 1,700 37,319 65,131
National City Corp 1,200 28,461 28,425
--------- --------
65,780 93,556
Office Equipment - 9.73%
Diebold, Inc. 1,650 41,069 38,775
Xerox Corp. 1,900 51,149 43,106
--------- --------
92,217 81,881
Instruments - 9.03%
Checkpoint Systems, Inc. 3,000 29,499 30,563
Coherent, Inc. 1,700 34,250 45,475
--------- --------
63,748 76,038
Utilities - Natural Resources - 7.65%
Empire District Electric Co. 1,250 21,665 28,281
Hawaiian Electric 1,250 41,040 36,094
--------- --------
62,706 64,375
Electrical Equipment - 7.33%
Baldor Electric Company 1,850 36,962 33,531
Veramark Tech Inc. 2,300 18,368 28,175
--------- --------
55,330 61,706
Retail - General - 7.32%
Dollar General 1,562 26,308 35,536
Family Dollar Stores, Inc. 1,600 25,748 26,100
--------- --------
52,056 61,636
Medical Products and Supplies - 5.94%
Dentsply Intl Inc. 1,350 30,400 31,894
Mentor Corp. 700 17,963 18,069
--------- --------
48,363 49,963
Computers - Software - 4.76%
Network Associates, Inc. 1,500 46,921 40,031
Pharmaceuticals - 4.37%
Covance, Inc. 3,400 45,445 36,763
Tobacco Products - 4.10%
Phillip Morris 1,500 45,092 34,500
Shoes & Leather - 3.38%
Wolverine World Wide 2,600 44,582 28,438
Steel - 2.65%
A.M.Castle & Co. 1,900 36,530 22,325
Cosmetics - 2.58%
Helen of Troy Ltd. 3,000 41,712 21,750
Electronics Components - 2.52%
Park Electrochemical Corp 800 20,771 21,250
Mining - 2.20%
Brush Wellman Inc. 1,100 23,565 18,494
Real Estate & Related - 1.85%
First American Financial 1,250 21,869 15,547
Commercial Services - 1.19%
"Paychex, Inc. 250 6,050 10,000
Foods & Beverages - 0.84%
"Pepsico, Inc. 200 6,975 7,050
Entertainment - 0.17%
"Walt Disney Prod, Inc. 48 1,166 1,404
--------- --------
TOTAL COMMON STOCKS $ 880,420 $ 841,811
--------- --------
$ 880,420 $ 841,811
========= =========
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, 1999 TO DECEMBER 31, 1999,
FOR THE YEARS ENDED JUNE 30, 1998 AND JUNE 30, 1999
AND FOR THE PERIOD FROM INCEPTION (FEBRUARY 1, 1997) TO JUNE 30, 1997
(UNAUDITED)
12/1999 6/1999 6/1998 6/1997
INVESTMENT INCOME:
Dividends $ 10,201 $ 10,720 $ 8,559 $ 1,634
Interest 0 2,990 5,301 -
-------- -------- --------- ---------
10,201 13,710 13,860 1,634
EXPENSES:
Management Fees 6,466 8,102 6,599 589
Reimbursement of Management Fees 0 (1,479) (3,303) -
Custody Fee - - - 35
Legal and Professional 2,048 3,750 3,000 -
Directors' Fee 303 600 900 -
Amortization 737 581 814 444
Fidelity Bond 247 520 689 -
Taxes 189 502 637 -
Registration Fees 726 1,246 676 -
Bank Service Charges 234 917 404 -
Dues and Subscriptions 90 144 110 228
Reserve Adjustment (680)
-------------------------------------------
10,361 14,883 10,526 1,296
-------------------------------------------
Investment income(loss) - net (160) (1,173) 3,334 338
-------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain (loss) from
securities transactions 91,134 (21,740) 18 514
Unrealized appreciation (deprec-
iation)during the period (55,173) 48,330 (3,930) 8,277
-------------------------------------------
Net gain (loss) on investments 35,960 26,590 (3,912) 8,791
-------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 35,800 $ 25,417 $ (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, 1999 TO DECEMBER 31, 1999,
FOR THE YEARS ENDED JUNE 30, 1998 AND JUNE 30, 1999
AND FOR THE PERIOD FROM INCEPTION (FEBRUARY 1, 1997) TO JUNE 30, 1997
(UNAUDITED)
12/1999 6/1999 6/1998 6/1997
INCREASE IN NET ASSETS
FROM OPERATIONS:
Investment income (loss) - net ($160) $(1,173) $ 3,334 $ 338
Net realized gains (loss) from
securities transactions 91,134 (21,740) 18 514
Net change in unrealized
appreciation of investments (55,173) 48,330 (3,930) 8,277
-----------------------------------------
Increase (decrease) in net assets
from operations 35,800 25,417 (578) 9,129
CAPITAL SHARE TRANSACTIONS
Sales (5,191.495, 33,858.650,
73,972.543 and 11,247.184 shares) 59,582 363,607 832,796 112,471
Redemptions (3,614.323, 21,814.254
and 17,275.449 shares) 40,566 (225,795) (202,999) -
-----------------------------------------
Total capital share transactions 19,015 137,812 629,797 112,471
-----------------------------------------
Increase in net assets 54,816 163,229 629,219 121,600
NET ASSETS:
Beginning of period 914,048 750,819 121,600 -
------------------------------------------
End of period $ 968,864 $ 914,048 $ 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, 1999
(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 4:00pm closing bid prices. Short-term and money
market securities 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, 1999, the Series purchased $371,244
of common stock. During the same period, the Series sold $248,612 of
common stock.
For the year ended June 30, 1999, the Series purchased $317,227 of
common stock. During the same period, the Series sold $100,392 of
U.S. Government obligations and $195,720 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, 1999, the gross unrealized appreciation for all securi-
ties totaled $75,984 and the gross unrealized depreciation for all
securities totaled $114,592, or a net unrealized depreciation of $38,609.
The aggregate cost of securities for federal income tax purposes at
December 31, 1998 was $880,420.
At June 30, 1999, the gross unrealized appreciation for all securities
totaled $134,100 and the gross unrealized depreciation for all securities
totaled $81,423, or a net unrealized appreciation of $52,677. The aggre-
gate cost of securities for federal income tax purposes at June 30,
1999 was $640,542.
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 during 1999 33,858.650 363,607
Shares redeemed during 1999 (21,814.254) (225,795)
Shares issued in 12/29/98 stock dividend 172.798 -
---------- -----------
12,217.194 137,812
---------- -----------
Shares sold this period 5,191.495 $ 59,582
Shares redeemed this period (3,614.323) (40,566)
---------- -----------
1,577.172 19,015
---------- -----------
82,114.543 899,096
========== ===========
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, 1999 TO DECEMBER 31, 1999,
FOR THE YEARS ENDED JUNE 30, 1998 AND JUNE 30, 1999
AND FOR THE PERIOD FROM INCEPTION (FEBRUARY 1, 1997) TO JUNE 30, 1997
(UNAUDITED)
12/1999 6/1999 6/1998 6/1997
NET ASSET VALUE, beginning of period $ 11.35 $ 10.99 $ 10.74 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (.00) (.01) - .03
Net gain on securities both
realized and unrealized .45 .40 .30 .78
------------------------------------
.45 .39 .30 .81
------------------------------------
STOCK DIVIDEND .00 (.03) (.05) (.07)
------------------------------------
NET ASSET VALUE, end of period $ 11.80 $ 11.35 $ 10.99 $ 10.74
=======================================
NET ASSETS, end of period $ 968,864 $ 914,048 $ 750,819 $ 121,600
=======================================
Actual* Actual Actual Actual**
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.1% 2.0% 2.0% 1.1% **
RATIO OF NET INVESTMENT INCOME TO
AVERAGE NET ASSETS (0.2%) (0.2%) 0.6% 0.3% **
PORTFOLIO TURNOVER RATE 27.0% 40.7% - 6.9% **
* The ratios presented were calculated using operating data for the six
month period from July 1, 1999 to December 31, 1999.
** 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, 1999
<PAGE>
WESTERN NEW YORK SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
(UNAUDITED)
ASSETS
12/1999
Investments in securities, at fair value,
identified cost $219,095 $ 194,215
Cash 47,172
Accrued interest and dividends 289
Prepaid expenses 805
Due from Investment Adviser 536
Organization expenses, net of accumulated
amortization of $1,491 1,848
----------
Total assets 244,865
----------
LIABILITIES
Accounts payable 9,935
NET ASSETS
Net assets (equivalent to $9.06 per share
based on 25,941.445 shares outstanding) $ 234,930
==========
COMPOSITION OF NET ASSETS
Shares of common stock $ 258,577
Accumulated net investment income 1,233
Net unrealized appreciation on investments (24,880)
----------
Net assets at December 31, 1999 $ 234,930
==========
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, 1999
(UNAUDITED)
Historical
Common Stocks - 82.5% Shares Cost Value
Electrical Equipment - 18.26%
Acme Electric Corp. 1,750 9,171 10,063
PSC, Inc. 1,950 18,587 14,381
Veramark Tech Inc. 900 7,203 11,025
--------- --------
34,961 35,469
Computers - Software - 7.75%
Comptek Research, Inc. 700 4,971 9,713
Network Associates, Inc. 200 5,800 5,338
--------- --------
10,771 15,050
Steel - 7.32%
Bethlehem Steel Corporation 1,000 7,895 8,375
Gilbraltar Steel Corp 250 4,820 5,844
--------- --------
12,714 14,219
Electronics Components - 5.33%
Astronics Corp. 605 5,021 6,126
Paxar Corp. 500 4,192 4,219
--------- --------
9,213 10,344
Railroads - 5.30%
Genesee & Wyoming Class A 800 9,941 10,300
Office Equipment - 5.26%
Xerox Corp. 450 12,058 10,209
Real Estate & Related - 5.22%
Home Properties of NY, Inc. 200 5,624 5,488
Sovran Self Storage 250 6,892 4,656
--------- --------
12,516 10,144
Chemical - 5.02%
CPAC, Inc. 1,200 7,236 9,750
Tobacco Products - 4.74%
Phillip Morris 400 11,896 9,200
Leisure & Recreational - 4.39%
Mattel Inc. 650 10,540 8,531
Computers - Hardware - 4.03%
Performance Technologies, Inc. 450 3,977 7,819
Industrial Materials - 3.97%
American Precision Ind Inc. 550 9,776 4,675
Servotronics, Inc. 600 5,624 3,038
--------- --------
15,400 7,713
Utilities - Natural Resources - 3.18%
Rochester Gas & Electric 300 6,255 6,169
Commercial Services - 3.09%
Paychex, Inc. 150 4,413 6,000
Computers - Services - 3.05%
Computer Task Group Inc. 400 10,608 5,925
Manufacturing - 2.73%
Mark IV Industries Inc. 300 6,462 5,306
Metal Fabrication & Hardware - 2.73%
Graham Corp. 800 6,076 5,300
Furniture - 2.21%
Bush Industries Inc. 250 6,263 4,297
Environmental Services - 1.96%
Sevenson Environmental Svcs Inc. 400 5,071 3,800
Medical Services - 1.43%
Rural/Metro Corp. 650 11,157 2,783
Computers - Distributors - 1.35%
Ingram Micro 200 6,679 2,625
Industrial Services - 1.16%
American Locker Group Inc. 400 2,544 2,250
Machinery - 0.52%
Columbus McKinnon Corp 100 2,344 1,013
--------- --------
TOTAL COMMON STOCK $ 219,095 $ 194,215
========= =========
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, 1999 TO DECEMBER 31, 1999 AND
FOR THE YEAR ENDED JUNE 30, 1999 AND
FOR THE PERIOD FROM INCEPTION (SEPTEMBER 29, 1997) TO JUNE 30, 1998
12/1999 6/1999 6/1998
INVESTMENT INCOME:
Dividends $ 2,424 $ 2,904 $ 1,705
Interest - - 1,121
----------------------------------
2,424 2,904 2,826
----------------------------------
EXPENSES:
Management Fees 1,492 2,042 1,214
Reimbursement of Management Fees (536) (5,924) (3,016)
Legal and Professional 2,016 3,750 3,000
Directors' Fee 303 600 300
Amortization 391 776 324
Fidelity Bond 247 458 230
Taxes 214 382 238
Registration Fees 282 607 341
Bank Service Charges 136 767 -
Dues and Subscriptions 48 71 -
Reserve Adjustment 160
----------------------------------
4,753 3,529 2,631
----------------------------------
Investment income (loss) - net (2,329) (625) 195
----------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain (loss) from
securities transactions 7,587 (2,829) -
Unrealized appreciation (depreciation)
during the period (10,042) (18,496) 3,071
----------------------------------
Net gain (loss) on investments (2,455) (21,325) 3,071
----------------------------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (4,784) $(21,950) $ 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, 1999 TO DECEMBER 31, 1999 AND
FOR THE YEAR ENDED JUNE 30, 1999 AND
FOR THE PERIOD FROM INCEPTION (SEPTEMBER 29, 1997) TO JUNE 30, 1998
12/1999 6/1999 6/1998
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Investment income (loss) - net $ (2,329) $ (625) $ 195
Net realized gain (loss) from
securities transactions 7,587 (2,829) -
Net change in unrealized appreciation
(depreciation) of investments (10,042) (18,496) 3,071
----------------------------------
Increase (decrease) in net assets
from operations (4,784) (21,950) 3,266
CAPITAL SHARE TRANSACTIONS
Sales (225.479, 11,777.098
and 16,850.33 shares) 2,000 108,178 172,964
Redemptions (470,420, 2,458.779
and 0 shares) (4,497) (20,254) -
----------------------------------
Total capital share transactions (2,497) 87,924 172,964
----------------------------------
Increase (decrease) in net assets (7,281) 65,974 176,230
NET ASSETS:
Beginning of period 242,204 176,230 -
-----------------------------------
End of period $234,923 $242,204 $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, 1999
(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, 1999 to December 31, 1999, the Series
purchased $48,185 of common stock and sold $22,521 of common stock.
For the period ended June 30, 1999, the Series purchased $77,365 of
common stock. During the same period, the Series sold $24,463 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, 1999, the gross unrealized appreciation for all securi-
ties totaled $20,394 and the gross unrealized depreciation for all
securities totaled $45,274, or a net unrealized appreciation of
$24,880. The aggregate cost of securities for federal income tax
purposes at December 31, 1999 was $219,095.
At June 30, 1999, the gross unrealized appreciation for all securities
totaled $12,525 and the gross unrealized depreciation for all securities
totaled $27,950, or a net unrealized depreciation of $15,425. The aggre-
gate cost of securities for federal income tax purposes at June 30,
1999 was $186,431.
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.
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<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 during 1999 11,777.098 108,178
Shares redeemed during 1999 (2,458.779) (20,254)
---------- -----------
9,318.319 87,924
---------- -----------
Shares sold this period 225.479 $ 2,000
Shares redeemed this period (470.420) (4,497)
---------- -----------
(244.941) (2,497)
---------- -----------
25,941,445 258,391
========== ===========
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, 1999 TO DECEMBER 31, 1999 AND
FOR THE YEAR ENDED JUNE 30, 1999 AND
FOR THE PERIOD FROM INCEPTION (SEPTEMBER 29, 1997) TO JUNE 30, 1998
12/1999 6/1999 6/1998
NET ASSET VALUE, beginning of period $ 9.25 $ 10.45 $ 10.00
---------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net investment income (loss) (0.18) (0.05) .02
Net gain (loss) on securities both
realized and unrealized (0.01) (1.15) .44
---------------------------------
(0.19) (1.20) .46
---------------------------------
STOCK DIVIDEND - - (.01)
---------------------------------
NET ASSET VALUE, end of period $ 9.06 $ 9.25 $ 10.45
=================================
NET ASSETS, end of period $ 234,927 $ 242,204 $ 176,230
==================================
Actual* Actual Actual**
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.0% 2.0% 2.0%**
RATIO OF NET INVESTMENT INCOME TO
AVERAGE NET ASSETS (0.98%) (0.4%) 0.2%**
PORTFOLIO TURNOVER RATE 9.5% 13.9% -
* 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.
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