<PAGE>
<TABLE>
<CAPTION>
LABRADOR MUTUAL FUND
STATEMENT OF NET ASSETS
As of June 30, 2000 (Unaudited)
<S> <C> <C>
Number Market
of Shares Value
Common Stocks - 98.9%
Banks - 0.7%
Firstar Corp. 200 $ 4,200
Wells Fargo & Company 200 7,812
Computers Hardware - 11.0%
Hewlett-Packard Company 1,000 124,312
Juniper Hetworks, Inc. * 400 58,225
Computers Systems - 29.2%
Cisco Systems Inc.* 2,400 152,550
International Business Machine 700 76,694
Sun Microsystems* 2,800 254,800
Drugs & Healthcare - 17.7%
Johnson & Johnson 400 40,000
Medimmune, Inc. * 1,200 88,800
Medtronic, Inc. 1,600 79,700
Merck & Company Inc. 600 45,525
Schering-Plough Corporation 800 40,250
Electric Equipment - 1.7%
Agilent Technologies Inc. * 381 29,028
Financial Services - 1.7%
CMGI, Inc. 600 27,488
Food & Beverage - 1.3%
Coca Cola 300 17,175
Congra, Inc. 200 3,813
Insurance - 3.5%
American International Group Inc. 500 58,875
Machinery & Medal Processing - 0.7%
Illinois Tool Works 200 11,400
Marketing Service - 4.3%
Omicom Group Inc. 800 71,200
Number Market
of Shares Value
Other Consumer Goods - 6.2%
General Electric Company 1,200 $ 61,200
Gillette Company 400 13,700
Proctor & Gamble Company 300 16,800
Xerox Corporation 600 12,000
Other Financials -3.2%
Automatic Data Processing, Inc. 1,000 53,561
Pharmaceutical - 4.5%
Abbot Laboratories 600 26,475
Pfizer, Inc. 1,000 47,500
Retail - 1.3%
Walgreen Company 700 22,269
Semiconductors-Electric - 6.4%
Intel Corporation 800 106,950
Software Products - 1.4%
Microsoft Corp. * 300 24,000
Telecommunications - 3.9%
Lucent Technology 1,100 64,350
-------
Total Common Stocks
(Cost $1,006,943) 1,640,652
---------
Money Market - 1.6%
-------------------
Firstar Treasury Fund 5.44% (a)
(Cost $26,916) 26,916
--------
Total Investments - 100.5%
(Cost $1,033,859) 1,667,568
Other Assets and Liabilities, Net - (0.5)% (8,419)
------------------------------------------ -------
Net Assets - 100% $1,659,149
==========
*Non-income producing security.
(a) Variable rate security; the coupon rate shown represents the rate at June 30, 2000.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LABRADOR MUTUAL FUND
STATEMENT OF ASSETS AND LIABILITIES
As of June 30, 2000 (Unaudited)
<S> <C>
ASSETS:
Investments, at market value (cost $1,033,859) .......... $ 1,667,568
Receivables:
Dividends ......................................... 852
...................................Interest 63
....Expense Reimbursement by Manager.................. 13,137
Other assets.......................................... 500
-------------
Total assets ......................................... 1,682,120
LIABILITIES:
Accrued 12B-1 Fees ..................................... 618
Accrued Administration Fees ............................ 7,137
Accrued Auditing Fees .................................. 1,876
Accrued Custodian Fees ................................. 872
Accrued Fund Accounting Fees ........................... 2,284
Accrued Insurance ...................................... 3,459
Accrued Legal Fees ..................................... 802
Accrued Advisor Fees ................................... 2,367
Acrued Transfer Agent Fees .............................. 3,556
--------
........................Total liabilities 22,971
------
NET ASSETS ................................................... $ 1,659,149
==========
Net assets consist of:
Paid-in capital ......................................... 1,115,985
Accumulated undistributed net realized loss on investments (90,545)
Net unrealized appreciation on
....................................... investments 633,709
Net assets ................................................... $ 1,659,149
==========
Shares of capital stock
outstanding (no par value,
unlimited shares authorized)............................. 112,288
Net asset value, offering
and redemption, price per share ......................... $ 14.78
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LABRADOR MUTUAL FUND
STATEMENT OF OPERATIONS
For the six months ended June 30, 2000 (Unaudited)
<S> <C>
INVESTMENT INCOME:
Interest ................................................ $ 543
Dividends ............................................... 3,989
-----
Total investment income ............................ 4,532
EXPENSES:
12B-1 Expense .......................................... 2,028
Administration Expense ................................. 2,118
Auditing Expense ....................................... 377
Custodian Expense ...................................... 2,420
Fund Accounting Expense ................................ 9,075
Insurance Expense....................................... 1,159
Legal Expense .......................................... 252
Management Expense ..................................... 12,169
Postage Expense......................................... 50
Pricing Expense ........................................ 756
Report Printing Expense................................. 403
Miscellaneous Expense .................................. 125
Transfer Agent Expense .................................. 7,560
-------
.................................... Total expenses 38,492
------
Less: Expense reimbursement from Manager................................(19,243)
--------
Total net expenses.......................................... 19,249
NET INVESTMENT LOSS ......................................... (14,717)
----------
REALIZED AND UNREALIZED GAIN
.........................................ON INVESTMENTS:
Net realized change in investment........................ (17,258)
Net change in unrealized
appreciation on investments ........................ 77,337
-------
Net gain on investments ................................. 60,079
-------
INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ............................... $45,362
========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LABRADOR MUTUAL FUND
STATEMENTS OF CHANGES IN NET ASSETS
<S> <C> <C>
Six months Year
Ended Ended
June 30, 2000 December 31,
(Unaudited) 1999
---------- ----
INCREASE IN NET ASSETS
Operations:
Net investment loss..................................... $(14,717) $(23,088)
Net change in realized appreciation on investments....... (17,258) (33,042)
Net change in unrealized appreciation on investments................ 77,337 364,115
----------- -------
Increase in net assets from operations .................. 45,362 307,985
----------- -------
Capital share transactions:
Proceeds from shares sold ............ 24,967 40,114
Cost of shares repurchased............................... (38,000) (68,500)
---------- ------------
Net decrease in net assets from
capital share transactions ......................... (13,033) (28,386)
--------- ------------
TOTAL INCREASE IN NET ASSETS ................................. 32,329 279,599
--------- -----------
NET ASSETS:
Beginning of period ..................................... 1,626,820 1,347,221
End of period (including accumulated net investment loss
of $14, 717 for the period ended June 30, 2000).......... $ 1,659,149 $1,1626,820
========= ==========
OTHER INFORMATION:
Share transactions:
Sold .................................................... 1,783 3,313
Repurchased ............................................. (2,596) (5,237)
------- -------
NET DECREASE IN SHARES OUTSTANDING .......................... (813) (1,924)
======= =======
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LABRADOR MUTUAL FUND
FINANCIAL HIGHLIGHTS
<S> <C> <C> <C>
Six
Months
Ended Year Period
June 30, Ended Ended
2000 Dec.31, Dec.31,
(Unaudited) 1999 1998(a)
----------- ---- -------
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning of period.......................... $14.38 $11.71 $10.00
Loss from investment operations:..............................
Net investment income loss.............................. (0.13) (0.20)
(0.02)
Net realized and unrealized
gain on investments................................ 0.53 2.87 1.73
---- ----
Total from investment operations 0.40 2.67 1.71
Net asset value, end of period ............................... $ 14.78 $ 14.38 $11.71
===== ===== =====
TOTAL RETURN................................................. 2.78% 26.70% 17.10%(c)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period ............................... $1,659,149 $1,626,820 $1,347,221
Ratio of expenses to average net assets:
Before reimbursement of expenses by Manager........... 4.80%(b) 5.33% 5.78% (b)
After reimbursement of expenses by Manager ............ 2.40%(b) 2.40% 2.40% (b)
Ratio of net investment income to average net assets:
Before reimbursement of expenses by Manager ........... (4.23)%(b) (4.55)% (4.80)%(b)
After reimbursement of expenses by Manager ............ (1.83)%(b) (1.59)% (0.81)%(b)
Portfolio turnover ...................................... 33.04% 9.56% 0.00%
(a) For the period September 24, 1998 (inception date of fund) to
December 31,1998.
(b) Annualized.
(c) For the period ended December 31, 1998 total return was revised to reflect actual total return.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
-----------------------------
(Unaudited)
Note 1 - General
The Labrador Mutual Fund, (the "Trust") which has a similarly named portfolio
called the Labrador Mutual Fund ("the Fund") is a mutual fund that invests
principally in securities of companies which, in the opinion of the Fund's
management, conduct their business in a socially responsible manner. Capital
growth and current income are the primary and secondary investment objectives.
Investment advisory and management services are provided to the Fund by Labrador
Investment Advisers, Inc., (the "Manager").
Note 2 - Significant Accounting Policies
The following is a summary of the significant accounting policies followed by
the Fund in the preparation of its financial statements. These policies are in
conformity with generally accepted accounting principles.
A) Security Valuations
Shares of the Fund are sold on a continuous basis. Net asset value per share is
determined as of the close of regular trading on the floor of the New York Stock
Exchange (currently 4:00 p.m., New York time) on each business day. The Fund's
investments are valued based on market value or, where market quotations are not
readily available, based on fair value as determined in good faith by, or in
accordance with procedures established by, the Fund's Board of Trustees. The
Fund's net asset value per share is determined by dividing the sum of the market
value of all securities and all other assets of the Fund, less liabilities of
the Fund, by the total number of the Fund's shares outstanding.
B) Securities Transactions and Investment Income
Securities transactions are recorded on a trade basis. The cost of securities
sold is determined using the first-in-first-out method. Interest income is
recorded on the accrual basis and dividend income is recorded on the ex-dividend
date.
C) Dividends and Distributions to Shareholders
The Fund ordinarily pays dividends from its net investment income and
distributes net realized securities gains, if any, once a year, but it may make
distributions on a more frequent basis to comply with the distribution
requirements of the Code, in all events in a manner consistent with the
provisions of the 1940 Act. Dividends are automatically reinvested in additional
Fund shares at net asset value, unless the shareholder has elected to receive
payment in cash. All expenses are accrued daily and deducted before declaration
of dividends to investors. However, to the extent that net realized gains of the
Fund could be reduced by any capital loss carry-overs, such gains will not be
distributed.
D) Federal Income Taxes
The Fund has elected to be treated as a "regulated investment company" under
Sub-chapter M of the Internal Revenue Code so long as such qualification is in
the best interest of its shareholders. Such qualifications relevies the Fund of
any liability for Federal income tax to the extent its earnings are distributed
in accordance with applicable provisions of the Code. The Fund intends to make
sufficient distributions prior to the end of each calendar year to avoid
liability for a 4.0% Federal excise tax on undistributed income. Accordingly, no
provisions for federal income taxes have been made in the accompanying financial
statements. The Fund intends to utilize provisions of the federal income tax
laws which allows it to carry a realized capital loss forward for eight years
following the year of the loss and offset such losses against any future
realized capital gains.
NOTES TO FINANCIAL STATEMENTS
-----------------------------
(Unaudited)
D) Federal Income Taxes
Net realized gains or losses may differ for financial and tax reporting purposes
for the Fund primarily as a result of losses from wash sales which are not
recognized for tax purposes until the corresponding shares are sold.
E) Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Note 3 - Agreements and Other Transactions with Affiliates
Under a plan adopted by the Fund's Board of Trustees pursant to Rule 12b-1 under
the 1940 Act (the "Plan"), the Fund pays Unified Management Corporation a
shareholder servicing and distribution fee at the annual rate of 0.25% of the
average daily net assets of the Fund. Such fee will be used in its entirety by
Unified Management Corporation to make payments for administration, shareholder
services and distribution assistance, including, but not limited to: (i)
compensation to securities dealers and other organizations (each, a "Service
Organization" and collectively, the "Service Organizations"), for providing
distribution assistance with respect to assets invested in the Fund, (ii)
compensation to Service Organization for providing administration, accounting
and other shareholder services with respect to Fund shareholders, and (iii)
otherwise promoting the sale of shares of the Fund, including paying for the
preparation of advertising and sales literature and the printing and
distribution of such promotional materials to prospective investors. The fees
paid to Unified Management Corporation under the Plan are payable without regard
to actual expenses incurred. The Fund understands that third parties also may
charge fees to their clients who are beneficial owners of Fund shares in
connection with their client accounts. These fees would be in addition to any
amounts which may be received by them from Unified Management Corporation under
the Plan.
The Board of Trustees provides broad supervision over the affairs of the Fund.
Pursuant to a Management Agreement between the Fund and the Manager and subject
to the authority of the Board of Trustees, the Manager manages the Fund's
investments and is responsible for the overall management of the business
affairs of the Fund. The Manager continually conducts investment research and
supervision for the Fund and is responsible for the purchase or sale of
portfolio instruments, for which it receives an annual fee from the Fund. The
Fund is authorized to pay the Manager a monthly fee equal to an annual average
rate of 1.50% of its average daily net assets, minus the amount by which the
Fund's total expenses (excluding brokerage, taxes, interest and extraordinary
expenses) exceeds 2.40%. The Manager has undertaken, until such time as it gives
investors 60 days notice to the contrary, to waive it's investment advisory fee
to the extent Total Fund Operating Expenses (excluding brokerage, taxes,
interest and extraordinary expenses) exceed 2.40%. At June 30, 2000 the Manager
owed the Fund $13,137 in net reimbursement.
Note 4- Investment Transactions
For the six months ended June 30, 2000, purchases and sales of of investment
securities, excluding short-term investments, were $262,119 and $287,796
respectively.
NOTES TO FINANCIAL STATEMENTS
-----------------------------
(Unaudited)
Note 5- Unrealized Appreciation (Depreciation)
At June 30, 2000, the composition of gross unrealized appreciation
(depreciation) of investment securities is as follows:
Appreciation Depreciation Net Appreciation
The Labrador Mutual Fund $ 716,515 ($82,806) $ 633,709
Note 6- Shares of Beneficial Interest
The Fund is authorized to issue an unlimited number of shares of beneficial
interest with no par value. At June 30, 2000, Labrador Investment Adviser and
its affiliates owned 2,167 shares of the Fund.
