<PAGE>
LETTER FROM THE PRESIDENT
June 30, 1999
ARTHUR D. ALLY
Dear Shareholder:
When you compare our second quarter performance with both the first quarter
and, in fact, all of 1998 performance, I think you will agree that the long
awaited recovery in small-cap value stocks may finally be underway. While
there is simply no accurate way to predict the future, both Jim Awad (our
money manager) and I believe that we are finally returning to a more normal,
value-oriented market. If we are right, the next twelve to eighteen months
could be very gratifying indeed for Timothy Small-Cap Value investors.
I want to thank each of you who have weathered the 15 month performance
trough with us as the small-cap value segment of the market was completely
ignored and, as a result, under-performed the narrow range of companies that
dominate the various indexes which we believe are considerably over-valued.
Now for our other good news: Timothy is giving birth! We are adding three
new funds to our flagship Small-Cap Value Fund on 7-1-99:
. A Large/Mid-Cap Value Fund (Managed by Fox Asset Management)
. A Fixed Income Fund (Managed by Carr & Associates) and
. A Money Market Fund (Also managed by Carr & Associates)
We are excited about both the asset mix and the quality of money managers
that will be serving as sub-advisors to these funds. Our new 6-30-99
prospectus contains more complete information on each of these funds. Please
call us at 1-800-846-7526 if you would like this new prospectus which should
be thoroughly read before investing or sending money.
All our funds will have full exchange privileges within the same class of
shares at no cost to you, our shareholder. However, I want to encourage you
to be cautious about switching out of the current small-cap value fund into
one or two of the others simply because we have been through this performance
trough. You may very well miss the recovery we expect to occur in the small-
cap value market segment. I hasten to add that I have no precise knowledge
as to whether this will occur, when this will occur or, in fact, if it is
occurring at the present time, so please do not misconstrue this as
investment advice. This I do know, however: patience truly is a virtue in
the investment arena.
Thank you again for the convictions that led you to Timothy.
Sincerely,
/s/ Arthur D. Alley
Arthur D. Ally
President
The Timothy Plan Semi-Annual Report page 1
<PAGE>
INVESTMENT UPDATE MID-YEAR REVIEW
June 30, 1999
JAMES D. AWAD
The last several months have been good to and for our portfolios - and based
on logic we expect the trend to continue.
During the twelve months ending March 30th, the markets were dominated by a
small number of stocks. During this period, the vast majority of small and
mid cap stocks declined sharply in value as a small number of glamorous
stocks advanced. The cheap stocks kept getting cheaper as investors abandoned
them to buy the small number of stocks that kept getting more expensive -
internet and technology stocks.
Ultimately, though, markets are rational and cheap stocks go up. Although
this did not happen during the twelve months ending March 30, the character
of the markets did begin a significant change as we approached the end of
March; The markets began what has become a migration from a momentum market
to a value driven market, from an environment where investors bought growth
at any price to one where investors began to seek growth at a reasonable
price, from a speculative market to a thinking person's market.
This migration has greatly improved the valuation of our portfolios, as we
buy growing companies that sell at a value investor's price.
Although our stocks have rallied nicely, they remain very inexpensively
priced. Stocks that are cheap and are going up tend to attract the attention
of investors who don't own them yet - and this flow of funds tends to
positively impact these stocks. We have begun to see such a flow of funds
into our stocks.
The quality of our companies were by and large always high; the difference
now is that investors are starting to notice them.
We are working hard. We are humble yet determined. We pledge to do our best
to further grow your capital during the coming months.
James D. Awad
Chairman
The Timothy Plan Semi-Annual Report page 2
<PAGE>
SCHEDULE OF INVESTMENTS
As of June 30, 1999 (Unaudited)
COMMON STOCKS - 88.35%
<TABLE>
<CAPTION>
number of shares market value
<S> <C> <C>
AEROSPACE - 2.09%
29,000 Armor Holdings, Inc.*.................................................... $ 302,688
15,000 Kellstrom*............................................................... 273,750
AGRICULTURAL - 0.69%
20,000 Cadiz, Inc.*............................................................. 188,750
20,000 Cadiz, Inc. Rights
APPAREL - 1.25%
10,000 Jones Apparel Group*..................................................... 343,125
BANKS - 1.11%
17,000 Staten Island Bancorp, Inc............................................... 306,000
BROADCASTING - 1.74%
20,000 American Tower Corp, Class A*............................................ 480,000
BUILDING - 0.00%
53 Morrison Knudsen Corp. Warrants.......................................... 186
CHEMICALS- 0.18%
5,000 Mississippi Chemical Corp................................................ 49,063
COMPUTER HARDWARE - 1.09%
10,000 Gaylord Entertainment Co................................................. 300,000
COMPUTER SERVICES AND SOFTWARE - 8.73%
28,000 Comdisco, Inc............................................................ 717,500
12,000 National Data Corp....................................................... 513,000
35,000 New Horizons Worldwide, Inc.*............................................ 691,250
18,000 Sterling Software, Inc.*................................................. 480,375
COMMERCIAL SERVICES - 5.57%
26,000 Cunningham Graphics Intl, Inc.*.......................................... 432,250
70,000 Health Mgmt. Systems Inc.*............................................... 385,000
29,000 StarTek, Inc.*........................................................... 717,750
CONSULTING SERVICES - 1.65%
18,000 BARRA, Inc.*............................................................. 454,500
DIVERSIFIED CONGLOMERATES - 1.48%
15,000 Blount Intl, Inc. Class A................................................ 407,813
ENTERTAINMENT & LEISURE- 1.57%
40,500 Florida Panthers Holdings, Inc.*......................................... 432,844
</TABLE>
*Non-income producing securities.
The accompanying notes are an integral part of these financial statements.
The Timothy Plan Semi-Annual Report page 3
<PAGE>
SCHEDULE OF INVESTMENTS
As of June 30, 1999 (Unaudited)
COMMON STOCKS - 88.35% (cont.)
<TABLE>
<CAPTION>
number of shares market value
<S> <C> <C>
FINANCIAL SERVICES -6.07%
38,900 Doral Financial Corp..................................................... $ 671,025
25,000 Investor's Financial Corp................................................ 1,000,000
FOOD & BEVERAGE - 6.45%
23,000 Corn Products Intl....................................................... 700,063
19,000 Smithfield Foods, Inc.*.................................................. 635,313
23,200 Smucker (J.M.) Co. Class B*.............................................. 440,800
HEALTHCARE SERVICES - 4.93%
25,000 American Retirement Corp.*............................................... 312,500
29,325 Eclipsys Corp*........................................................... 701,967
26,300 LTC Properties, Inc...................................................... 341,900
INSURANCE - 4.49%
20,000 Annuity and Life Re (HLDGS) Ltd*......................................... 448,750
25,000 Presidential Life Corp................................................... 490,625
40,000 Reliance Group Holdings, Inc............................................. 297,500
MACHINERY, GENERAL INDUSTRIAL - 3.35%
24,000 Zebra Tech Class A*...................................................... 922,500
MEDICAL PRODUCTS - 12.05%
45,000 ATS Medical, Inc.*....................................................... 354,375
20,000 Aviron*.................................................................. 575,000
5,000 Beckman Coulter Inc...................................................... 243,125
34,100 Cooper Co................................................................ 850,369
23,000 Lanvision Systems Inc.*.................................................. 26,595
13,500 Shared Medical Systems Corp.............................................. 880,875
26,500 Somanetics Corp.*........................................................ 92,750
27,000 Thermo Cardiosystems Inc.*............................................... 293,625
OIL AND GAS - 0.84%
30,000 Horizon Offshore, Inc.*.................................................. 232,500
PHARMECEUTICAL - 0.94%
30,000 Twinlab Corp.*........................................................... 257,814
PRINTING - 0.93%
18,300 Printronix, Inc.*........................................................ 256,200
</TABLE>
*Non-income producing securities.
The accompanying notes are an integral part of these financial statements.
The Timothy Plan Semi-Annual Report page 4
<PAGE>
SCHEDULE OF INVESTMENTS
As of June 30, 1999 (Unaudited)
COMMON STOCKS - 88.35% (cont.)
<TABLE>
<CAPTION>
number of shares market value
<S> <C> <C>
PUBLISHING - 7.67%
15,500 Houghton Mifflin Co...................................................... $ 729,469
25,000 Penton Media, Inc........................................................ 606,250
44,000 Wiley(John) & Sons, Inc. Class A......................................... 775,500
REALTY - .20%
5,000 Mid Atlantic Realty Trust -REIT.......................................... 55,625
RETAIL STORES-4.55%
50,000 Bradlees Inc.*........................................................... 750,000
25,000 Shoe Carnival*........................................................... 425,000
15,000 U.S. Vision*............................................................. 78,282
SECURITY SERVICES - 2.42%
32,800 Burns International Services Corp........................................ 666,250
TELECOMMUNICATIONS - 4.04%
50,000 Periphonics Corp.*....................................................... 818,750
10,000 Transaction Network Services, Inc........................................ 292,500
TRANSPORTATION - 1.33%
10,000 Air Express Intl Corp.................................................... 253,750
11,000 Genesee & Wyoming, Inc. Class A*......................................... 113,438
VITAMINS AND NUTRITION PRODUCTS - 0.94%
40,000 NBTY Inc.*............................................................... 260,000
Total Common Stock (Cost $20,484,485).................................... $ 24,326,825
------------
BONDS - 1.38%
500,000 American Retirement Corp (5.75%, 10/01/2002)............................. 381,250
Total Bonds (Cost $514,373).............................................. $ 381,250
------------
SHORT-TERM INVESTMENTS - 10.47%
2,882,262 Firstar Bank Treasury Fund............................................... 2,882,262
Total Short-Term Investments (Cost $2,882,262)........................... $ 2,882,262
------------
TOTAL INVESTMENTS - 100.20%
Total Investments (Identified Cost $23,881,120).......................... $ 27,590,337
------------
OTHER ASSETS AND LIABILITIES, NET - (0.20)%
(56,547)
NET ASSETS - 100%........................................................ $ 27,533,790
============
</TABLE>
*Non-income producing securities.
The accompanying notes are an integral part of these financial statements.
The Timothy Plan Semi-Annual Report page 5
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
As of June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
ASSETS
amount
<S> <C>
Investments in securites at market at value (identified cost $23,881,120) (note 1)................. $ 27,590,337
Receivables:
Interest........................................................................................ 15,330
Dividend........................................................................................ 11,026
Other........................................................................................... 111
Due from advisor................................................................................ 42,506
Other assets....................................................................................... 9,940
Capital stock sold................................................................................. 156,104
-------------
Total Assets....................................................................................... $ 27,825,354
=============
LIABILITIES
amount
Payable for investments purchased.................................................................. $ 127,144
Commission payable................................................................................. 34,644
Payable for shares purchased...................................................................... 69,827
Distribution payable............................................................................... 11,227
Accrued expenses................................................................................... 22,404
Accrued service fee (Note 3)....................................................................... 2,882
Other payable...................................................................................... 23,436
-------------
Total Liabilities.................................................................................. $ 291,564
=============
NET ASSETS
amount
Class A Shares (Note1):
Net assets (unlimited shares of $0.001par beneficial interest authorized; 1,166,170 shares
outstanding)................................................................................... 12,944,617
Net asset value and redemption price per class a share ($12,944,617 / 1,166,170 shares)......... 11.10
Offering price per share ($11.10 / 0.945)....................................................... 11.75
Class B Shares (Note1):
Net asset (unlimited shares of $0.001par beneficial interest authorized; 1,342,912 shares
outstanding)................................................................................... 14,589,173
Net asset value and redemption price per class a share ($14,589,173 / 1,342,912 shares)......... 10.86
Redemption price per share ($10.86 x 0.95)...................................................... 10.32
Net Assets......................................................................................... $ 27,533,790
=============
SOURCES OF NET ASSETS
amount
At June 30, 1999, net assets consisted of:
Paid in capital................................................................................. $ 28,427,280
Accumulated net realized loss on investment..................................................... (4,602,707)
Net unrealized appreciation in value of investments............................................ 3,709,217
-------------
Net Assets......................................................................................... $ 27,533,790
=============
</TABLE>
The Accompanying Notes Are An Integral Part of These Financial Statements.
The Timothy Plan Semi-Annual Report page 6
<PAGE>
STATEMENT OF OPERATIONS
For Six Months Ended June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
INVESTMENT INCOME
amount
<S> <C>
Interest .................................................... $ 68,194
Dividends.................................................... 99,996
----------
Total Net Income............................................. $ 168,190
==========
EXPENSES
amount
Investment advisory fees (Note 3)............................ $ 107,372
Transfer agent fees.......................................... 24,168
Administration fees.......................................... 19,654
Distribution fees - class a.................................. 15,081
Accounting fees.............................................. 19,654
Registration fees............................................ 21,694
Distribution fees - class b.................................. 49,499
Custodian fees............................................... 2,362
Printing expense............................................. 4,227
Amortization of organization cost (Note 3)................... 2,707
Services fees - class b (Note 3)............................. 16,500
Auditing fees................................................ 10,000
Insurance expense............................................ 14,475
Legal expense................................................ 12,561
Miscellaneous expense........................................ 15,022
----------
Total Expenses............................................... 334,976
Less: expense reimbursement from manager..................... (83,364)
----------
Total Net Expenses........................................... $ 251,612
==========
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
amount
Net investment income (loss)...................................... $ (83,422)
Realized and unrealized gain (loss) on investments
Net realized gain on investments................................ (3,295,834)
Change in unrealized appreciation of investments.................. 3,803,838
----------
Increase in net assets resulting from operations.................. $ 424,582
==========
</TABLE>
The Accompanying Notes Are An Integral Part of These Financial Statements.
The Timothy Plan Semi-Annual Report page 7
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
For Six Months Ended June 30, 1999 (Unaudited)
INCREASE (DECREASE) IN NET ASSETS
<TABLE>
<CAPTION>
six months
ended year ended
June 30, 1999 Dec. 31, 1998
<S> <C> <C>
OPERATIONS:
Net investment income (loss)................................................. $ (83,422) $ (104,389)
Net change in unrealized appreciation of investments........................ 3,803,838 (1,805,419)
Net realized gain (loss) on investments...................................... (3,295,834) (1,024,293)
----------- -----------
Increase in net assets resulting from operations............................. $ 424,582 $ (2,934,101)
=========== ===========
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from net capital gains:
Class A.................................................................. ----- (89,117)
Class B.................................................................. ----- (98,253)
----------- -----------
Total Net Decrease........................................................... $ ----- $ (187,370)
=========== ===========
CAPITAL SHARE TRANSACTION:
Shares sold:
Class A................................................................... 1,808,490 5,917,565
Class B................................................................... 1,865,152 6,088,477
Dividend reinvested:
Class A................................................................... ----- 88,440
Class B................................................................... ----- 92,993
Shares redeemed:
Class A................................................................... (2,369,525) (2,464,485)
Class B................................................................... (1,596,650) (1,796,707)
----------- -----------
Increase (Decrease) in net assets (resulting from capital)
share transactions........................................................ $ (292,533) $ 7,926,283
=========== ===========
Total Increase in Net Assets................................................. $ 132,049 $ 4,804,812
=========== ===========
NET ASSETS:
Beginning of period.......................................................... 27,401,741 22,596,929
----------- -----------
End of period (including accumulated undistributed net investment income )... $ 27,533,790 $ 27,401,741
=========== ===========
NET INCREASE (DECREASE) IN NUMBER OF SHARES:
Shares sold:
Class A................................................................... 180,092 514,690
Class B................................................................... 189,305 535,115
Shares reinvested
Class A................................................................... ----- 8,122
Class B................................................................... ----- 8,699
Shares redeemed:
Class A................................................................... (233,535) (217,873)
Class B................................................................... (163,194) (163,152)
----------- -----------
Net Increase (Decrease) in Number of Shares Outstanding:..................... $ (27,332) $ 685,601
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
The Timothy Plan Semi-Annual Report page 8
<PAGE>
FINANCIAL HIGHLIGHTS
The table below sets forth financial data for one share of capital stock
outstanding throughout each period presented.
(Unaudited)
<TABLE>
<CAPTION>
CLASS A SHARES
six months year year year year
ended ended ended ended ended
06/30/99 12/31/98 12/31/97 12/31/96 12/31/95
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning.............................. $ 10.89 $ 12.25 $ 11.24 $ 10.07 $ 9.66
Income from investment operations:
Net investment income................................ ----- ----- 0.02 0.10 0.11
Net realized and unrealized gain (loss) on investments.. 0.21 (1.29) 2.37 1.17 0.66
Total from investment income............................ 0.21 (1.29) 2.39 1.27 0.77
Less distributions:
Dividends from realized gains........................ ----- (0.07) (1.38) ----- (0.11)
Dividends from net investment income................. ----- ----- ----- (0.10) (0.25)
------- ------- ------- ------ -------
Total distribution...................................... ----- (0.07) (1.38) (0.10) (0.36)
Net Asset Value at End of Period........................ $ 11.10 $ 10.89 $ 12.25 $ 11.24 $ 10.07
======= ======= ======= ====== =======
Total Return (A)........................................ 3.93% (10.50%) 21.35% 12.59% 7.93%
======= ======= ======= ====== =======
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000s)..................... $12,945 $13,287 $11,208 $ 7,760 $ 6,133
Before reimbursement of expenses by advisor (B)...... 2.46% 2.09% 2.75% 3.70% 5.84%
After reimbursement of expenses by advisor (B)....... 1.60% 1.60% 1.60% 1.60% 1.60%
Ratio of net investment income to average net assets:
Before reimbursement of expenses by advisor (B)...... (0.80%) (1.15%) (0.90%) (1.05%) (2.96%)
After reimbursement of expenses by advisor (B)....... (0.13%) (0.66%) 0.25% 1.05% 1.28%
Portfolio turnover...................................... 27.49% 69.42% 136.36% 13.08% 34.12%
</TABLE>
(A) Total Return Calculation Does Not Reflect Sales Load.
(B) Annualized.
The Timothy Plan Semi-Annual Report page 9
<PAGE>
FINANCIAL HIGHLIGHTS
The table below sets forth financial data for one share of capital stock
outstanding throughout each period presented.
(Unaudited)
<TABLE>
<CAPTION>
CLASS B SHARES
six months year year year year
ended ended ended ended ended
06/30/99 12/31/98 12/31/97 12/31/96 12/31/95*
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning................................. $ 10.70 $ 12.13 $ 11.22 $ 10.08 $ 10.49
Income from investment operations:
Net investment income................................... ----- (0.08) (0.03) 0.07 0.11
Net realized and unrealized gain (loss) on investments.. 0.16 (1.28) 2.32 1.14 (0.16)
Total from investment income............................... 0.16 (1.36) 2.29 1.21 (0.05)
Less distributions:
Dividends from realized gains........................... ----- (0.07) (1.38) ----- (0.11)
Dividend from net investment income..................... ----- ----- ----- (0.07) (0.25)
------- ------- ------- ------- -------
Total distribution......................................... ----- (0.07) (1.38) (0.07) (0.36)
Net Asset Value at End of Period........................... $ 10.86 $ 10.70 $ 12.13 $ 11.22 $ 10.08
======= ======= ======= ======= =======
Total Return (A)........................................... 3.04% (11.18%) 20.50% 11.98% (0.46%)
======= ======= ======= ======= =======
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000s)........................ $12,945 $14,114 $11,389 $ 3,929 $ 620
Before reimbursement of expenses by advisor (B)......... 3.12% 2.84% 3.41% 4.30% 6.44%
After reimbursement of expenses by advisor (B).......... 2.46% 2.35% 2.26% 2.20% 2.20%
Ratio of net investment income to average net assets:
Before reimbursement of expenses by advisor (B)......... (1.79%) (1.90%) (1.56%) (1.65%) (3.56%)
After reimbursement of expenses by advisor (B).......... (1.14%) (1.41%) (0.41%) 0.45% 0.68%
Portfolio turnover......................................... 27.49% 69.42% 136.36% 93.08% 34.12%
</TABLE>
*Class B Shares Commenced Investment Operations on August 25, 1995.
(A) Total Return Calculation Does Not Reflect Redemption Fee.
(B) Annualized.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
June 30, 1999 (Unaudited)
Note 1 - Significant Accounting Policies
The Timothy Plan (the "Fund") is organized as a series of a Delaware business
trust pursuant to a trust agreement dated December 16, 1993. The Fund is
registered under the Investment Company Act of 1940, as amended, as an open-
end diversified management investment company. The Fund's primary objective
is long-term capital growth, with a secondary objective of current income.
The Fund seeks to achieve its investment objective by investing primarily in
common stocks and ADRs while abiding by ethical standards established for
investments by the Fund. The Fund currently consists of one series comprised
of two separate classes of shares (Class A shares and Class B shares) which
vary with respect to sales charges, distribution costs, voting rights and
dividends. Prior to September 22, 1997, Class A changed its load structure
from no-load to a front-end sales load, and class B shares changed from a
front-end sales load to a contingent deferred sales charge ("CDSC"). Each
class is also subject to different 12b-1 Plan expenses. The following is a
summary of significant accounting policies consistently followed by the Fund
in the preparation of its financial statements. The policies are in
conformity with generally accepted accounting principles for investment
companies.
A. Security Valuation.
Investments in securities traded on a national securities exchange are valued
at the last reported sales price on the last business day of the period.
Unlisted securities or listed securities, in which there were no sales, are
valued at the mean of the closing bid and ask prices. Short-term obligations
with remaining maturities of 60 days or less are valued at cost plus accrued
interest, which approximates market value.
B. Investment Income and Securities Transactions.
Security transactions are accounted for on the date the securities are
purchased or sold (trade date). Cost is determined and gains and losses are
based on the identified cost basis for both financial statement and federal
income tax purposes. Dividend income and distributions to shareholders are
reported on the ex-dividend date. Interest income and expenses are accrued
daily. The Fund has made certain investments in real estate investment
trusts ("REITs") which pay dividends to their shareholders based upon
available funds from operations. It is quite common for these dividends to
exceed the REIT's taxable earnings and profits resulting in the excess
portion of such dividends being designated as a return of capital.
C. Net Asset Value Per Share.
Net asset per share of the capital stock of the Fund is determined daily as
of the close of trading on the New York Stock Exchange by dividing the value
of its net assets by the number of Fund shares outstanding. Net Asset Value
is calculated separately for each class of the Fund based on expenses
applicable to a particular class. The net asset value of the classes may
differ because of different fees and expenses charged to each class.
D. Organization Costs.
Organization costs are being amortized on a straight-line basis over five
years from inception.
E. Federal Income Taxes.
It is the policy of the Fund to comply with all requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its taxable income to its shareholders. Therefore, no
federal income tax provision is required. The fund has a capital loss
carryover available to offset future capital gains, if any, of approximately
$1,000,000 which expires in 2006.
F. Use of Estimates.
In preparing financial statements in conformity with generally accepted
accounting principles, management makes estimates and assumptions that affect
the reported amounts of assets and liabilities at the date of the financial
statements, as well as the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
The Timothy Plan Semi-Annual Report page 11
<PAGE>
NOTES TO FINANCIAL STATEMENTS
June 30, 1999 (Unaudited)
Note 2 - Purchases and Sales of Securities
Purchases and sales of securities, other than short-term investments,
aggregated $6,280,559 and $7,085,649 respectively, for the six months ended
June 30, 1999.
Note 3 - Investment Management Fee and Other Transactions with Affiliates
Timothy Partners, LTD., ("TPL") is the investment advisor for the Fund
pursuant to an investment advisory agreement (the "Agreement") effective
March 21, 1994, as amended August 28, 1995. Under the terms of the
Agreement, TPL receives a fee, accrued daily and paid monthly, at an annual
rate of 0.85% of the average daily net assets of the Fund. TPL has voluntary
agreed to waive its fees to the extent total annualized expenses, inclusive
of distribution expenses, exceed 1.60%, with respect to Class A, and 2.35%,
with respect to Class B, of the Fund's average daily net assets. For the six
months ended June 30, 1999, advisory fees of $60,064 were waived by TPL and
TPL reimbursed the Fund $23,358. Effective July 1, 1997, the Fund engaged
TPL to act as sole underwriter and accordingly revised the distribution plans
(the "Plans") on behalf of each class pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended. The revised Plans provide that
the Fund will reimburse TPL or others for expenses actually incurred in the
promotion of distribution of shares. Under the Class A Plan, the Fund will
reimburse TPL a fee at an annual rate of 0.25%, payable monthly, of the
average daily net assets attributable to such class of shares. Under the
Class B Plan, the Fund will reimburse TPL a fee at an annual rate of 1.00%,
payable monthly, of which, 0.25% may be a service fee and 0.75% may be
payable to outside broker/dealers, of the average daily net assets
attributable to such class of shares. For the period from January 1, 1999 to
June 30, 1999, the Fund reimbursed TPL $81,080 for distribution costs
incurred.
Note 4 - Unrealized Appreciation (Depreciation)
At June 30, 1999, the cost for federal income tax purposes is $23,881,120 and
the composition of gross unrealized appreciation (depreciation) of investment
securities is as follows:
<TABLE>
<CAPTION>
Appreciation Depreciation Net Appreciation
<S> <C> <C> <C>
The Timothy Plan Small-Cap Fund $5,203,853 ($1,494,636) $3,709,217
</TABLE>
Year 2000 Issue.
Like other mutual funds, financial and business organizations and individuals
around the world, the Fund could be adversely affected if the computer
systems used by the Advisor, Administrator or other service providers to the
Fund do not properly process and calculate date-related information and data
from January 1, 2000. This is commonly known as the "Year 2000 Issue". The
Advisor and Administrator have taken steps that they believe are reasonably
designed to address the Year 2000 Issue with respect to computer systems that
are used and to obtain reasonable assurances that comparable steps are being
taken by the Fund's major service providers. At this time, however, there
can be no assurance that these steps will be sufficient to avoid any adverse
impact on the Fund. In addition, the Advisor cannot make any assurances that
the Year 2000 issue will not affect the companies in which the Fund invests
or worldwide markets and economies.
The Timothy Plan Semi-Annual Report page 12
<PAGE>
THE TIMOTHY PLAN
1304 West Fairbanks Avenue
Winter Park, FL 32789
BOARD OF TRUSTEES
Arthur D. Ally
Joseph E. Boatwright
W. Thomas Fyler, Jr.
Wesley W. Pennington
Jock M. Sneddon
OFFICERS
Arthur D. Ally, President
Joseph E. Boatwright, Secretary
Wesley W. Pennington, Treasurer
INVESTMENT ADVISOR
Timothy Partners, LTD.
1304 West Fairbanks Avenue
Winter Park, FL 32789
DISTRIBUTOR
Timothy Partners, LTD.
1304 West Fairbanks Avenue
Winter Park, FL 32789
TRANSFER AGENT
Unified Fund Services, Inc.
431 N Pennsylvania Street
Indianapolis, IN 46204
AUDITORS
Tait, Weller & Baker
Eight Penn Center Plaza, Suite 800
Philadelphia, PA 19103
LEGAL COUNSEL
The Law Offices of David D. Jones, P.C.
518 Kimberton #134
Phoenixville, PA 19460
For additional information or a prospectus,
please call: 1-800-846-7526
Visit the Timothy Plan web site on the internet at:
www.timothyplan.com
This report is submitted for the general information of the shareholders of the
Fund. It is not authorized for distribution to prospective investors in the
Fund unless preceded or accompanied by an effective Prospectus which includes
details regarding the Fund's objectives, policies, expenses and other
information.
[LOGO OF THE TIMOTHY PLAN]
SEMI-ANNUAL REPORT
June 30, 1999
