<PAGE>
AMERITOR
Industry
Fund
SEMI-ANNUAL
REPORT
December 31, 1999
An Ameritor NO-LOAD Mutual Fund
AMERITOR FINANCIAL CORPORATION
Ameritor
Financial
Corporation
Investment Adviser
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Dear Shareholder:
This past year has seen changes in the membership of the Board of Trustees and
the Management of the Ameritor Family of Funds. Mark Crain, Richard Ellison,
Richard Haase, Carole Kinney and I have been elected to the Board of Trustees
and Dr. Max Katcher, a Trustee and President of the Funds, has chosen to
retire after 26 years of faithful service to the Corporation. At the February
2nd meeting of the Board of Trustees, I was elected as the new President of
the Ameritor Family of Funds.
With these changes has come a reexamination of the policies and role of the
Board of Trustees with regard to management and administration of the funds.
First and foremost, the Board of Trustees has pledged to be more proactive
with respect to overseeing the management of the Funds. Second, the Board is
committed to an identified course of action designed to improve the return on
shareholder investment.
We are pleased to announce that the Ameritor Industry Fund appreciated
1.12%/(1)/ this fiscal year to date. This is a modest return compared to
overall market gains during this same period and the Board of Trustees will
attempt to improve that performance by (1) making changes in portfolio
management and (2) taking steps to reduce operating costs. It was mainly high
operating costs that offset the gains achieved by the portfolio during the
past year.
The Board of Trustees is searching for a new, professional and experienced
investment manager. We expect to have that change effective by April of this
year.
Ameritor Financial Corporation will continue to serve as the Transfer Agent
and Investment Advisor to the Fund. The Corporation has undertaken aggressive
and systematic reductions of operating costs that are intended to benefit the
shareholders. In addition to day-to-day management and staff changes, the
offices of Ameritor Industry Fund as well as Ameritor Financial Corporation
have relocated to 4400 MacArthur Boulevard, Suite 301,
/(1)/Total Return for the six month period 7/1/99 to 12/31/99 1.12%; total re-
turn for the year 1/1/99 to 12/31/99 7.14%; total return 5 years 12.50%;
Total return 10 years (40.40)%. Past performance is not predictive of fu-
ture performance.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Washington, D.C. 20007-2521. The new phone number is (202) 625-6000 extension
21 for Shareholder Services, or you may reach us toll free at (800) 424-8570.
Please make note of the new address and telephone number for future reference.
I look forward to working toward continued and enhanced appreciation of your
investments, lower operating costs and as a consequence, striving for a higher
shareholder return in future years.
Sincerely,
/s/ John J. Turner
John J. Turner
President
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AMERITOR INDUSTRY FUND
Portfolio of Investments
December 31, 1999
(Unaudited)
<TABLE>
<CAPTION>
Value
Shares (Note 1)
------ --------
<S> <C> <C>
COMMON STOCKS -- 100%
Computer Peripherals -- 43.2%
Cisco Systems Inc (a)........................................ 3,540 $374,938
--------
Total Computer Peripherals 374,938
--------
Consumer Finance -- 3.5%
Associates First Capital Corporation......................... 1,096 30,071
--------
Total Consumer Finance 30,071
--------
Financial Services -- 14.4%
Citigroup Inc (b)............................................ 2,250 125,297
--------
Total Financial Services 125,297
--------
Motor Vehicles -- 12.3%
Ford Motor Company........................................... 2,000 106,625
--------
Total Motor Vehicles 106,625
--------
Telecom Mfg. -- 12.9%
Lucent Technologies Inc...................................... 1,500 112,219
--------
Total Telecom Mfg 112,219
--------
Telephone Services -- 13.7%
MCI Worldcom Inc (a)......................................... 2,250 119,390
--------
Total Telephone Services 119,390
--------
Total Portfolio of Investments (Cost $281,617)............... $868,540
========
</TABLE>
(a) Non-income producing security.
(b) Formerly Travelers Group, Inc.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AMERITOR INDUSTRY FUND
Statement of Assets and Liabilities
December 31, 1999
(Unaudited)
<TABLE>
<S> <C>
Assets:
Investments at value (Cost $281,617) (Note 1).................. $ 868,540
Cash and cash equivalents (Note 1)............................. 25,579
Due from affiliate (Note 4).................................... 2,860
Dividends receivable........................................... 0
Interest receivable............................................ 159
-----------
Total assets.................................................. 897,138
-----------
Liabilities:
Accounts payable and accrued expenses.......................... 16,913
Investment advisory and service fee payable (Note 4)........... 8,676
Other payable to affiliate (Note 4)............................ 775
Payable for trust shares redeemed.............................. 2,737
-----------
Total liabilities............................................. 29,101
-----------
Net Assets....................................................... $ 868,037
===========
Net assets consist of:
Accumulated net investment loss................................ $(4,846,603)
Unrealized appreciation of investments......................... 586,923
Accumulated net realized losses from security transactions..... (398,394)
Capital paid in less distributions since inception............. 5,526,111
-----------
$ 868,037
===========
Net asset value, offering price and redemption price per share
($868,037 divided by 977,543 shares of no par value trust
shares)........................................................ $ 0.89
===========
</TABLE>
The accompanying notes are an integral part of the financial statements
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AMERITOR INDUSTRY FUND
Statement of Operations
For the period ended December 31, 1999
(Unaudited)
<TABLE>
<S> <C> <C>
Investment Income:
Dividends................................................... $2,752
Interest.................................................... 1,311
------
Total income.............................................. $ 4,063
---------
Expenses:
Salaries and employee benefits (Note 4)..................... 13,314
Investment advisory fee (Note 4)............................ 4,091
Professional fees........................................... 31,947
Shareholder servicing fee (Note 4).......................... 48,831
Rent (Note 4)............................................... 3,057
Custodian fees.............................................. 231
Computer services (Note 4).................................. 18,400
Reports to shareholders..................................... 3,476
Trustees' fees and expenses (Note 4)........................ 4,934
Miscellaneous............................................... 2,046
------
Total expenses............................................ 130,327
---------
Net investment loss....................................... (126,624)
---------
Realized and Unrealized Gain/(Loss) on
Investments (Notes 1 and 3):
Net realized gain from investment transactions.............. 102,024
Change in unrealized appreciation of investments............ 41,541
---------
Net gain on investments..................................... 143,565
---------
Net increase in net assets resulting from operations........ $ 17,301
=========
</TABLE>
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AMERITOR INDUSTRY FUND
Statements of Changes in Net Assets
For the period ended December 31, 1999
<TABLE>
<CAPTION>
For the six
months ended For the year For the year
December 31, ended June 30, ended June 30,
1999/(1)/ 1999 1998
------------ -------------- --------------
<S> <C> <C> <C>
Increase (decrease) in net assets
from operations:
Net investment loss................ $(126,264) $(243,325) $(256,697)
Net realized gain from investment
transactions..................... 102,024 94,265 356,531
Change in unrealized appreciation
of investments................... 41,541 157,406 68,162
--------- --------- ---------
Net increase in net assets
resulting from operations........ 17,301 8,346 167,996
Decrease in net assets from trust
share transactions (Note 2)....... (31,229) (102,681) (167,793)
--------- --------- ---------
(Decrease)/Increase in net assets.. (13,928) (94,335) 203
Net assets at beginning of period... 881,965 976,300 976,097
--------- --------- ---------
Net assets at end of period,
including accumulated net
investment loss of $4,846,604,
$4,720,339 and $4,477,014......... $ 868,037 $ 881,965 $ 976,300
========= ========= =========
</TABLE>
/(1)/Unaudited
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AMERITOR INDUSTRY FUND
Financial Highlights
<TABLE>
<CAPTION>
For the six For the For the period For the
months ended years ended June 30, February 1, 1995 year ended
December 31, --------------------------------- through June 30, January 31,
1999/(1)/ ** 1999 1998 1997 1996 1995* 1995
------------ ------ ------ ------ ------ ---------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating
Performance:
Net asset value,
beginning of period.. $ .87 $ .86 $ .72 $ .72 $ .88 $ 0.96 $ 1.65
------ ------ ------ ------ ------ ------ ------
Net investment income
(loss)............... (.13) (.71) (.80) (.33) (.41) (.12) (.26)
Net realized and
unrealized gain
(loss) on
investments.......... .15 .72 .94 .33 .25 .04 (.43)
------ ------ ------ ------ ------ ------ ------
Total from Investment
operations........... .02 .01 .14 -- (.16) (.08) (.69)
------ ------ ------ ------ ------ ------ ------
Net asset value, end of
period............... $ .89 $ .87 $ .86 $ .72 $ .72 $ .88 $ .96
====== ====== ====== ====== ====== ====== ======
Ratio/Supplemental Data:
Total Return........... 1.12% 1.23% 18.36% .5% (18.48)% (20.01)%** (41.82)%
Ratio of expenses to
avg. net assets...... 15.01% 29.92% 22.57% 31.07% 24.61% 24.62% 17.69%
Ratio of net investment
income (loss) to
average net assets... (14.55)% (28.98)% (21.28)% (28.77)% (24.10)% (22.86)%** (15.63)%
Portfolio turnover..... 0% 0% 57% 128% 339% 617%** 289%
Net Assets, end of
period (000's)....... $ 882 $ 882 $ 976 $ 976 $1,008 $1,341 $1,472
</TABLE>
/(1)/Unaudited
* Fund's fiscal year-end was changed to June 30.
** Annualized
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
AMERITOR INDUSTRY FUND
Notes to Financial Statements
1. Organization and significant accounting policies
Ameritor Industry Fund, formerly Steadman American Industry Fund, (the Fund)
is registered under the Investment Company act of 1940, as amended, as a non-
diversified, open-end investment company. The Fund has not been accepting new
subscriptions since November 1996.
The preparation of financial statements, in conformity with generally ac-
cepted accounting principles, requires management to make estimates and as-
sumptions that affect the reported amounts of assets and liabilities and dis-
closure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the re-
porting period. Actual results could differ from those estimates and signifi-
cant changes to estimates could occur in the near term. The following is a
summary of significant accounting policies consistently followed by the Fund
in the preparation of its financial statements.
Cash and cash equivalents
Management defines cash equivalents as investments that mature in three
months or less when acquired. All cash and cash equivalents are invested in a
single money market fund maintained by the investment custodian.
Security valuation
Investments in securities traded on a national securities exchange are val-
ued at the last reported sales price of the period. Investments for which no
sale was reported on that date are valued at the mean between the latest bid
and asked prices.
Security transactions and investment income
Security transactions are recorded on the trade date. Realized gains and
losses from security transactions are reported on an identified cost basis.
Dividend income is recorded on the ex-dividend date. Interest income and ex-
penses are recorded on the accrual basis.
Income taxes
The Fund is subject to income taxes in years when it does not qualify as a
regulated investment company under subchapter M of the Internal Revenue Code.
The Fund accounts for income taxes using the liability method, whereby de-
ferred tax assets and
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
AMERITOR INDUSTRY FUND
liabilities arise from the tax effect of temporary differences between the fi-
nancial statement and tax bases of assets and liabilities, measured using
presently enacted tax rates. If it is more likely than not that some portion
or all of a deferred tax asset will not be realized, a valuation allowance is
recognized.
2. Trust shares
The Trust Indenture does not specify a limit to the number of shares which
may be issued. Transactions in trust shares were as follows:
<TABLE>
<CAPTION>
For the
six months ended For the year For the year
December 31, 1999/(1)/ ended June 30, 1999 ended June 30,1998
------------------------ -------------------- --------------------
Shares Amount Shares Amount Shares Amount
----------- ----------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Shares sold............. --0-- $ --0-- --0-- $ --0-- --0-- $ --0--
Shares redeemed......... (38,133) (102,681) (122,411) (102,681) (208,727) (167,793)
--------- ---------- --------- --------- --------- ---------
Net decrease.......... (38,133) (102,681) (122,411) (102,681) (208,727) (167,793)
========= ========== ========= ========= ========= =========
Shares outstanding:
Beginning of period... 1,015,676 1,138,087 1,346,814
--------- --------- ---------
End of period......... 977,543 1,015,676 1,138,087
========= ========= =========
</TABLE>
/(1)/Unaudited
3. Purchase and sales of securities
During the year ended June 30, 1999, proceeds from sales of investment
securities aggregated $285,271. Net unrealized appreciation of investments
aggregated $586,923, all of which related to gross unrealized appreciation where
there is an excess of value over tax cost.
4. Investment advisory and transactions with affiliates
Ameritor Financial Corporation (AFC), formerly Steadman Security Corpora-
tion, an affiliate, has provided advisory services under an agreement which
first became effective in 1972. On February 28, 1984, at the Annual Meeting of
the shareholders, a new Investment Advisory Agreement was approved. Under the
new advisory agreement AFC will continue to provide the same services it pro-
vided under the same terms and conditions of the previous agreement. The
agreement will continue in effect subject to the annual approval by the Board
of Trustees or by a majority of the outstanding voting securities of the Fund.
The fee for investment advisory services is based on
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
AMERITOR INDUSTRY FUND
1% of the first $35,000,000 of the average daily net assets of the Fund, 7/8
of 1% on the next $35,000,000 and 3/4 of 1% on all sums in excess thereof. In
addition to the investment advisory fee, AFC received fees from the Fund for
the performance of delegated services (dividend disbursing agent and transfer
agent) as defined in the Trust Indenture, as amended. The fee for such serv-
ices was computed on the basis of the number of shareholder accounts calcu-
lated as of the last business day of each month at $1.35 per account.
AFC also received reimbursements from the Fund for the salaries and benefits
of its employees who perform functions other than investment advisory and
shareholder service functions for the fund, for rent and for computer program-
ming services. As of June 30, 1999, the Fund had reimbursed AFC $2,860 in ex-
cess of amounts owed.
Certain officers and trustees of the Fund are "affiliated persons" of the
Investment Adviser, as defined by the Investment Company Act of 1940.
5. Federal income taxes
In the fiscal year ended June 30, 1999, the Fund did not meet the asset di-
versification requirements applicable to regulated investment companies. Thus,
the Fund did not qualify as a regulated investment company under Subchapter M
of the Internal Revenue Code. However, the Fund had a net investment loss in
fiscal year ended June 30, 1999; therefore, no income tax provision is re-
quired. A full valuation allowance was provided for net deferred tax assets,
totaling approximately $1,566,000 at June 30, 1999, which arise principally
from net operating loss carryforwards and capital carryforwards available for
income tax purposes.
For income tax purposes, the fund has net operating loss carryforwards ap-
proximating $4,671,000 which are available to offset future net operating in-
come in non-qualifying years, if any, which expire as follows: (2000)
$239,000; (2001) $139,000; (2002) $353,000; (2003) $371,000; (2004) $235,000;
(2005) $384,000 (2006) $365,000; (2007) $360,000; (2008) $335,000; (2009)
$322,000; (2010) $447,000; (2011) $295,000; (2012) $316,000; (2013) $263,000;
and (2014) $247,000. Capital loss carryforwards aggregating approximately
$70,000 are available to offset future capital gains, if any, expire in 2000.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
This Page Intentionally Blank
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
This Page Intentionally Blank
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
AMERITOR INDUSTRY FUND
1730 K Street, N.W. #904
Washington, D.C. 20006
1-800-424-8570
202-223-1000 Washington, D.C. area
Transfer Agent
Ameritor Financial Corporation
1730 K Street, N.W. #904
Washington, D.C. 20006
Custodian
Crestar Bank, N.A.
1445 New York Ave., N.W.
Washington, D.C. 20005
Independent Accountants
Reznick Fedder & Silverman P.C.
4520 East West Highway
Bethesda, Maryland 20814
For more information about
Ameritor Industry Fund,
account information or daily
Net Asset Values, call:
Shareholder Services
1-800-424-8570
202-223-1000 Washington, D.C. area
