UNITED STATES
securities and exchange commission
washington, d.c. 20549
form n-csr
Certified shareholder report of registered management
investment companies
Investment Company Act file number 811-09096
-------------------
Ameriprime Funds
- -------------------------------------------------------
(Exact name of registrant as specified in charter)
431 N. Pennsylvania St. Indianapolis, IN 46204
- -----------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Timothy L. Ashburn Unified Fund Services 431 N. Pennsylvania St.
Indianapolis, IN 46204
- ----------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: 317-917-7000
Date of fiscal year end: 6/30
------------
Date of reporting period: 12/31/02
-----------
Form N-CSR is to be used by management investment companies to file reports
with the Commission not later than 10 days after the transmission to
stockholders of any report that is required to be transmitted to stockholders
under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1).
The Commission may use the information provided on Form N-CSR in its regulatory,
disclosure review, inspection and policymaking roles.
A registrant is required to disclose the information specified by Form
N-CSR, and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. 3507.
<page>
Item 1. Reports to Stockholders.
IMS Capital Value Fund
Schedule of Investments
December 31, 2002 (Unaudited)
<table>
<s> <c> <c>
Common Stocks - 97.57% Shares Value
Air Courier Services - 5.02%
Airborne, Inc. 32,000 $ 474,560
FedEx Corp. 6,000 325,320
---------------
799,880
---------------
Biological Products (No Diagnostic Substances) - 1.00%
Biogen, Inc. (a) 4,000 160,240
---------------
Cable & Other Pay Television Services - 1.92%
Comcast Corp. Class A (a) 13,000 306,410
---------------
Computer Communication Equipment - 2.04%
3Com Corp (a) 70,000 324,100
---------------
Computer Storage Devices - 1.93%
EMC Corp. (a) 50,000 307,000
---------------
Computers & Office Equipment - 0.95%
Lexmark International, Inc. (a) 2,500 151,250
---------------
Crude Petroleum & Natural Gas - 1.92%
Unocal Corp. 10,000 305,800
---------------
Dolls & Stuffed Toys - 8.46%
Marvel Enterprises, Inc. (a) 150,000 1,347,000
---------------
Electric & Other Services Combined - 1.82%
Exelon Corp. 5,500 290,235
---------------
Electrical Industrial Apparatus - 2.03%
American Power Conversion, Inc. (a) 21,400 324,210
---------------
Fats & Oils - 2.35%
Archer Daniels Midland Co. 30,250 375,100
---------------
Hospital & Medical Service Plans - 6.57%
Humana, Inc. (a) 40,000 400,000
Pacificare Health Systems, Inc. - Class B (a) 23,000 646,300
---------------
1,046,300
---------------
Life Insurance - 1.59%
Lincoln National Corp. 8,000 252,640
---------------
Meat Packing Plants - 2.35%
Conagra Foods, Inc. 15,000 375,150
---------------
</table>
<page>
IMS Capital Value Fund
Schedule of Investments
December 31, 2002 (Unaudited) - continued
<table>
<s> <c> <c>
Common Stocks - 97.57% - continued Shares Value
National Commercial Banks - 1.80%
First Tennessee National Corp. 8,000 287,520
---------------
Pharmaceutical Preparations - 4.44%
Chiron, Corp. (a) 6,000 225,600
Watson Pharmaceuticals, Inc. (a) 17,000 480,590
---------------
706,190
---------------
Radio & Tv Broadcasting & Communications Equipment - 0.49%
Motorola, Inc. 9,000 77,850
---------------
Refuse Systems - 2.88%
Waste Management, Inc. 20,000 458,400
---------------
Retail - Catalog & Mail - Order Houses - 1.98%
Schein Henry, Inc. (a) 7,000 315,000
---------------
Retail - Drug Stores & Proprietary Stores - 1.02%
Rite Aid Corp. (a) 66,000 161,700
---------------
Retail - Grocery Stores - 3.99%
Albertson's, Inc. 14,000 311,640
Winn Dixie Stores, Inc. 21,200 323,936
---------------
635,576
Retail - Miscellaneous Shopping Goods Stores - 3.30%
OfficeMax, Inc. (a) 105,000 525,000
---------------
Savings Institution, Federally Chartered - 2.47%
Sovereign Bancorp, Inc. 28,000 393,400
---------------
Security & Commodity Brokers, Dealers, Exchanges Services - 0.86%
Price T. Rowe Associates, Inc. 5,000 136,400
---------------
Security Brokers, Dealers & Flotation Companies - 1.58%
Raymond James Financials, Inc. 8,500 251,430
---------------
Semiconductors & Related Devices - 0.76%
LSI Logic Corp. (a) 21,000 121,170
---------------
Services - Computer Integrated Systems Design - 4.41%
Computer Sciences Corp. (a) 6,000 206,700
Unisys Corp. (a) 50,000 495,000
---------------
701,700
---------------
</table>
<page>
IMS Capital Value Fund
Schedule of Investments
December 31, 2002 (Unaudited) - continued
<table>
<s> <c> <c>
Common Stocks - 97.57% - continued Shares Value
Services - Computer Processing & Data Preparation - 1.98%
SunGard Data Systems, Inc. (a) 13,400 315,704
---------------
Services - Health Services - 2.77%
Gentiva Health Services, Inc. 50,000 440,500
---------------
Services - Personal Services - 4.04%
Cendant Corp. (a) 23,000 241,040
H & R Block, Inc. 10,000 402,000
---------------
643,040
---------------
Services - Prepackaged Software - 4.66%
Computer Associates International, Inc. 25,000 337,500
Symantec Corp. (a) 10,000 404,500
---------------
742,000
---------------
Services - Skilled Nursing Care Facilities - 2.92%
Manor Care, Inc. (a) 25,000 465,250
---------------
Specialty Cleaning, Polishing and Sanitation Preparations - 2.00%
Clorox Corp. 7,700 317,625
---------------
Surgical & Medical Instruments & Apparatus - 1.94%
Guidant Corp. (a) 10,000 308,500
---------------
Telephone Communications (No Radiotelephone) - 7.33%
Centurytel, Inc. 20,000 587,600
Sprint Corp. 40,000 579,200
---------------
1,166,800
---------------
TOTAL COMMON STOCKS (Cost $14,605,360) 15,536,070
---------------
Call Options - 1.51%
NASDAQ-100 Index Tracking Stock @ 23 Expires 6/21/03 945 240,975
---------------
TOTAL CALL OPTIONS (Cost $448,200)
Money Market Securities - 1.77%
Huntington Money Fund - Invest A, 0.38%, (Cost $281,242) (b) 281,242 281,242
---------------
TOTAL INVESTMENTS (Cost $15,334,802) - 100.85% $ 16,058,287
---------------
Liabilities in excess of cash and other assets - (0.85%) (135,043)
---------------
TOTAL NET ASSETS - 100.00% $ 15,923,244
===============
</table>
(a) Non-income producing.
(b) Variable rate security; the coupon rate shown represents the rate at
December 31, 2002. <page>
IMS Strategic Allocation Fund
Schedule of Investments
December 31, 2002 (Unaudited)
<table>
<s> <c> <c>
Unit Investment Trusts - 84.00% Shares Value
S&P Midcap 400/Barra Growth Index Fund 4,300 393,235
S&P Mid Cap 400/Barra Value Index Fund 2,800 223,972
S&P 500/Barra Value Index Fund 5,100 219,453
S&P Smallcap 600/Barra Value Index Fund 800 58,120
S&P Smallcap 600/Barra Growth Index Fund 4,000 260,400
S&P 500/Barra Growth Index Fund 8,600 386,226
NASDAQ-100 Index Tracking Stock 6,500 158,665
--------------
TOTAL UNIT INVESTMENT TRUSTS (Cost $1,736,978) 1,700,071
--------------
Money Market Securities - 16.21%
Huntington Money Fund - Invest A, 0.38% (b) 328,119 328,119
--------------
TOTAL MONEY MARKET SECURITIES (Cost $328,119)
TOTAL INVESTMENTS (Cost $2,065,097) - 100.21% $ 2,028,190
--------------
Liabilities in excess of other assets - (0.21)% (4,191)
--------------
TOTAL NET ASSETS - 100.00% $ 2,023,999
==============
</table>
(a) Non-income producing.
(b) Variable rate security; the coupon rate shown represents the rate at
December 31, 2002. <page>
IMS Funds
Statement of Assets and Liabilities
December 31, 2002 (Unaudited)
<table>
<s> <c> <c>
IMS Capital IMS Strategic
Value Fund Allocation Fund
----------------- ------------------
Assets
Investments in securities, at value (cost $15,334,802 and $2,065,097) $ 16,058,287 $ 2,028,190
Interest receivable 282 56
Dividends receivable 8,356 -
Receivable for fund shares sold 781 -
Other receivables 318 -
----------------- ------------------
Total assets $ 16,068,024 $ 2,028,246
----------------- ------------------
Liabilities
Accrued advisory fees 14,205 2,352
Payable for fund shares redeemed 118,954 -
Other payables and accrued expenses 11,621 1,984
----------------- ------------------
Total liabilities 144,780 4,336
----------------- ------------------
Net Assets: $ 15,923,244 $ 2,023,910
================= ==================
Net Assets consist of:
Paid in capital 16,107,265 2,061,109
Accumulated net investment income (loss) (3,275) (292)
Accumulated net realized gain (loss) on investments (904,231) -
Net unrealized appreciation (depreciation) on investments 723,485 (36,907)
----------------- ------------------
Net Assets for 1,440,788 and 209,552 shares $ 15,923,244 $ 2,023,910
================= ==================
Net Asset Value
Net asset per share ( $15,923,244 / 1,440,788 and $2,023,999 / 209,552) $ 11.05 $ 9.66
================= ==================
$ 11.72 $ 9.66
================= ==================
Redemption price per share (a) $ 10.94 $ 9.56
================= ==================
</table>
(a) The redemption price per share reflects a redemption fee of 1.00% on
shares redeemed within 90 days of purchase.
<page>
IMS Funds
Statement of Operations
Period ended December 31, 2002 (Unaudited)
<table>
<s> <c> <c>
IMS Capital IMS Strategic
Value Fund Allocation Fund
----------------- -------------------
Investment Income
Dividend income $ 95,568 $ 4,182
Interest income 61,478 188
----------------- -------------------
Total Income 157,046 4,370
----------------- -------------------
Expenses
Investment advisor fee 104,574 2,940
Administration expenses 16,599 2,500
Auditing expenses 3,403 -
Custodian expenses 1,743 -
Fund accounting expenses 10,457 1,800
Insurance expenses 1,079 -
Legal expenses 5,810 -
Trustee expenses 996 -
Pricing expenses 1,743 166
Registration expenses 3,984 4,945
Printing expenses 2,158 -
Transfer agent expenses 16,599 1,905
Miscellaneous expenses 581 223
----------------- -------------------
Total Expenses 169,726 14,479
Reimbursed expenses (37,763) (9,817)
----------------- -------------------
Total operating expenses 131,963 4,662
----------------- -------------------
Net Investment Income (Loss) 25,083 (292)
----------------- -------------------
Realized & Unrealized Gain (Loss)
Net realized gain (loss) on investment securities (393,235) -
Change in net unrealized appreciation (depreciation)
on investment securities (704,313) (36,907)
----------------- -------------------
Net realized and unrealized gain (loss) on investment securities (1,097,548) (36,907)
----------------- -------------------
Net increase (decrease) in net assets resulting from operations $ (1,072,465) $ (37,199)
================= ===================
</table>
IMS Funds
Statement of Changes In Net Assets
<table>
<s> <c> <c> <c>
IMS Capital IMS Strategic
Value Allocation
Fund Fund (a)
-------------------------------------- -----------------
Year
Six months ended Ended Period ended
Dec. 31, 2002 June 30, Dec. 31, 2002
(Unaudited) 2002 (Unaudited)
-------------------- ----------------- -----------------
Increase (Decrease) in Net Assets
Operations
Net investment income (loss) $ 25,083 $ 228,835 $ (292)
Net realized gain (loss) on investment securities (393,235) (319,833) -
Change in net unrealized appreciation (depreciation) (704,313) (236,421) (36,907)
-------------------- ----------------- -----------------
Net increase (decrease) in net assets resulting from operations (1,072,465) (327,419) (37,199)
-------------------- ----------------- -----------------
Distributions
From net investment income (70,938) - -
From net realized gain - (1,491,184) -
-------------------- ----------------- -----------------
Total distributions (70,938) (1,491,184) -
-------------------- ----------------- -----------------
Capital Share Transactions
Proceeds from shares sold 2,991,124 13,518,420 2,193,609
Reinvestment of distributions 68,638 1,453,985 -
Amount paid for shares repurchased (3,137,013) (7,498,133) (132,500)
-------------------- ----------------- -----------------
Net increase (decrease) in net assets
resulting
from share transactions (77,251) 7,474,272 2,061,109
-------------------- ----------------- -----------------
Total Increase (Decrease) in Net Assets (1,220,654) 5,655,669 2,023,910
-------------------- ----------------- -----------------
Net Assets
Beginning of period 17,143,898 11,488,229 -
-------------------- ----------------- -----------------
$ 15,923,244 $ 17,143,898 $ 2,023,910
==================== ================= =================
Capital Share Transactions
Shares sold 278,955 1,088,375 222,613
Shares issued in reinvestment of
distributions 6,063 121,978 -
Shares repurchased (281,788) (601,161) (13,061)
-------------------- ----------------- -----------------
Net increase (decrease) from capital transactions 3,230 609,192 209,552
==================== ================= =================
</table>
(a) For the period November 7, 2002 (Commencement of Operations) through
December 31, 2002.
<page>
IMS Capital Value Fund
Financial Highlights
<table>
<s> <c> <c> <c> <c> <c>
Six months
ended Year Ended Year ended Year ended Period ended
Dec. 31, 2002 June 30, June 30, June 30, June 30,
(Unaudited) 2002 2001 2000 1999 (c)
---------------- ------------ ------------------ ------------ -------------
Selected Per Share Data
Net asset value, beginning of period $ 12.66 $ 13.87 $ 13.91 $ 14.56 $ 11.28
---------------- ------------ ------------------ ------------ -------------
Income from investment operations
Net investment income (loss) 0.02 0.04 (0.05) (0.05) 0.00
Net realized and unrealized gain (loss) (1.58) (0.19) 0.50 0.88 3.28
---------------- ------------ ------------------ ------------ -------------
Total from investment operations
(1.56) (0.15) 0.45 0.83 3.28
---------------- ------------ ------------------ ------------ -------------
Less Distributions to shareholders:
From net investment income (0.05) 0.00 0.00 0.00 0.00
From net realized gain 0.00 (1.79) (0.49) (1.48) 0.00
---------------- ------------ ------------------ ------------ -------------
Total distributions (0.05) (1.79) (0.49) (1.48) 0.00
---------------- ------------ ------------------ ------------ -------------
Net asset value, end of period $ 11.05 $ 11.93 $ 13.87 $ 13.91 $ 14.56
================ ============ ================== ============ =============
Total Return (12.34)% (b) (1.05)% (3.72)% (6.39)% (29.08)%(b)
Ratios and Supplemental Data
Net assets, end of period (000) $ 15,923 $17,144 $11,488 $ 11,585 $11,608
Ratio of expenses to average net assets 1.59%(a) 1.59% 1.59% 1.59% 1.59%
Ratio of expenses to average net assets
before waiver & reimbursement 2.05%(a) 2.23% 2.28% 2.08% 2.50%
Ratio of net investment income to
average net assets 0.30%(a) 0.29% 0.39% 0.36% 0.04%
Ratio of net investment income to
average net assets before waiver & reimbursement (0.15)%(a) (0.35)% 1.09% 0.84% 0.95%
Portfolio turnover rate 29.36% 33.40% 77.87% 75.69% 45.19%
</table>
(a) Annualized.
(b) For periods of less than a full year, total return is not annualized. (c)
For the period November 1, 1998 through June 30, 1999.
<page>
IMS Funds
IMS Strategic Allocation Fund
Financial Highlights
Period ended
Dec. 31, 2002 (c)
(Unaudited)
-----------------
Selected Per Share Data
Net asset value, beginning of period $ 10.00
-----------------
Income from investment operations
Net investment income (loss) 0.00
Net realized and unrealized gain (loss) (0.34)
-----------------
Total from investment operations
(0.34)
-----------------
Less Distributions to shareholders:
From net investment income 0.00
From net realized gain 0.00
-----------------
Total distributions 0.00
-----------------
Net asset value, end of period $ 9.66
=================
Total Return (3.40)%(b)
Ratios and Supplemental Data
Net assets, end of period (000) $ 2,024
Ratio of expenses to average net assets 1.96%(a)
Ratio of expenses to average net assets
before waiver & reimbursement 6.09%(a)
Ratio of net investment income to
average net assets (0.12)%(a)
Ratio of net investment income to
average net assets before waiver & reimbursement (4.25)%(a)
Portfolio turnover rate 0.00%
(a) Annualized.
(b) For periods of less than a full year, total return is not annualized.
(c) For the period November 7, 2002 (Commencement of Operations) through
December 31, 2002.
<page>
IMS Funds
Notes to Financial Statements
December 31, 2002 (Unaudited)
NOTE 1. ORGANIZATION
IMS Capital Value Fund (the "Capital Value") was organized as a diversified
series of AmeriPrime Funds (the "Trust") on July 25, 1996 and commenced
operations on August 5, 1996. IMS Strategic Allocation Fund (the "Strategic
Allocation") was organized as a non-diversified series of AmeriPrime Funds (the
"Trust") on September 30, 2002 and commenced operations on November 7, 2002. The
Trust is established under the laws of Ohio by an Agreement and Declaration of
Trust dated August 8, 1995 (the "Trust Agreement"). The Trust Agreement permits
the Board of Trustees to issue an unlimited number of shares of beneficial
interest of separate series without par value. Each Fund is one of a series of
funds currently authorized by the Board of Trustees. The Capital Value
investment objective is to provide long-term growth from capital appreciation,
dividends, and interest. The Strategic Allocation investment objective is to
provide long-term growth from capital appreciation, dividends, and interest. The
investment advisor of each Fund is IMS Capital Management, Inc. (the "Advisor").
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Fund in the preparation of its financial statements.
Securities Valuations - Securities that are traded on any exchange or on
the NASDAQ over-the-counter market are valued at the last quoted sale price.
Lacking a last sale price, a security is valued at its last bid price except
when, in the opinion of the Advisor, the last bid price does not accurately
reflect the current value of the security. All other securities for which
over-the-counter market quotations are readily available are valued at their
last bid price. When market quotations are not readily available, when the
Advisor determines the last bid price does not accurately reflect the current
value or when restricted securities are being valued, such securities are valued
as determined in good faith by the Advisor, in conformity with guidelines
adopted by and subject to review of the Board of Trustees.
Fixed income securities generally are valued by using market quotations,
but may be valued on the basis of prices furnished by a pricing service when the
Advisor believes such prices accurately reflect the fair market value of such
securities. A pricing service utilizes electronic data processing techniques
based on yield spreads relating to securities with similar characteristics to
determine prices for normal institutional-size trading units of debt securities
without regard to sale or bid prices. If the Advisor decides that a price
provided by the pricing service does not accurately reflect the fair market
value of the securities, when prices are not readily available from a pricing
service or when restricted or illiquid securities are being valued, securities
are valued at fair value as determined in good faith by the Advisor, in
conformity with guidelines adopted by and subject to review of the Board of
Trustees. Short-term investments in fixed income securities with maturities of
less than 60 days when acquired, or which subsequently are within 60 days of
maturity, are valued by using the amortized cost method of valuation, which the
Board of Trustees has determined will represent fair value.
Federal Income Taxes - Each Fund intends to qualify each year as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended. By so qualifying, each Fund will not be subject to federal income taxes
to the extent that it distributes substantially all of its net investment income
and any realized capital gains.
Dividends and Distributions - Each Fund intends to comply with federal tax
rules regarding distribution of substantially all of its net investment income
and capital gains. These rules may cause multiple distributions during the
course of the year.
IMS Funds
Notes to Financial Statements
December 31, 2002 (Unaudited)
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - continued
Other - Each Fund follows industry practice and records security
transactions on the trade date. The specific identification method is used for
determining gains or losses for financial statements and income tax purposes.
Dividend income is recorded on the ex-dividend date and interest income is
recorded on an accrual basis. Discounts and premiums on securities purchased are
amortized over the life of the respective securities.
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Each Fund retains IMS Capital Management, Inc. to manage the Fund's
investments. Carl W. Marker, Chairman and President of the Advisor, is primarily
responsible for the day-to-day management of each Fund's portfolio.
Under the terms of the management agreement (the "Agreement"), the Advisor
manages each Fund's investments subject to approval of the Board of Trustees. As
compensation for its management services, each Fund is obligated to pay the
Advisor a fee computed and accrued daily and paid monthly at an annual rate of
1.26% of the average daily net assets of each Fund. For the period ended
December 31, 2002, the Advisor earned a fee of $104,574 from Capital Value and
$2,940 from Strategic Allocation.
The Advisor has contractually agreed to waive all or a portion of its
management fees and/or reimburse expenses through October 31, 2006 to maintain
each Fund's total operating expenses, as a percentage of average daily net
assets, as follows: Capital Value, 1.59% and Strategic Allocation, 1.96%. For
the period ended December 31, 2002, the Advisor reimbursed expenses of $37,763
for the Capital Value and $9,817 for the Strategic Allocation.
Each Fund retains Unified Fund Services, Inc. ("Unified"), a wholly owned
subsidiary of Unified Financial Services, Inc., to manage each Fund's business
affairs and provide each Fund with administrative services, including all
regulatory reporting and necessary office equipment and personnel. For those
services Unified receives a monthly fee from the Funds equal to an annual rate
of 0.10% of each Fund's average daily net assets under $50 million, 0.075% of
each Fund's average daily net assets from $50 million to $100 million, and
0.050% of each Fund's average daily net assets over $100 million (subject to a
minimum fee of $2,500 per month). For the period ended December 31, 2002,
Unified earned $16,599 from Capital Value and $2,500 from Strategic Allocation
for administrative services.
Each Fund also retains Unified to act as each Fund's transfer agent and
fund accountant. For its services as transfer agent, Unified receives a monthly
fee from each Fund of $1.20 per shareholder (subject to a minimum monthly fee of
$900 per Fund) for these transfer agency services. For the period ended December
31, 2002, Unified earned $16,599 from Capital Value and $1,905 from Strategic
Allocation for transfer agency services. For its services as fund accountant,
Unified receives an annual fee from the Fund equal to 0.0275% of the Fund's
assets up to $100 million, and 0.0250% of the Fund's assets from $100 million to
$300 million, and 0.0200% of the Fund's assets over $300 million (subject to
various monthly minimum fees, the maximum being $2,100 per month for assets of
$20 million to $100 million). For the period ended December 31, 2002, Unified
earned $10,457 from Capital Value and $1,800 from Strategic Allocation for fund
accounting services. A Trustee and the officers of the Trust are members of
management and /or employees of Unified.
<page>
IMS Funds
Notes to Financial Statements
December 31, 2002 (Unaudited)
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - continued
Capital Value retains Capital Research Brokerage Services, LLC to act as
the principal distributor of its shares. For the period ended December 31, 2002,
the Capital Research Brokerage Services, LLC received $0 for distribution fees.
Strategic Allocation retains Unified Financial Securities, Inc., a wholly
owned subsidiary of Unified Financial Services, Inc., to act as the principal
distributor of its shares. There were no payments made to the Unified Financial
Securities, Inc. during the period ended December 31, 2002. Timothy L. Ashburn
(a Trustee and officer of the Trust) and Thomas G. Napurano (an officer of the
Trust) are a director and officer, respectively, of the Distributor and of
Unified Financial Services, Inc. (the parent company of the Distributor), and
may be deemed to be affiliates of the Distributor.
NOTE 4. INVESTMENTS
Capital Value. For the period ended December 31, 2002, purchases and sales
of investment securities, other than short-term investments, aggregated
$4,919,919 and $4,599,592, respectively. As of December 31, 2002, the gross
unrealized appreciation for all securities totaled $2,514,532 and the gross
unrealized depreciation for all securities totaled $1,791,047 for net unrealized
appreciation of $723,485. The aggregate cost of securities for federal income
tax purposes at December 31, 2002 was $15,334,801.
Strategic Allocation. For the period ended December 31, 2002, purchases and
sales of investment securities, other than short-term investments, aggregated
$1,736,978 and $0, respectively. As of December 31, 2002, the gross unrealized
appreciation for all securities totaled $5,978 and the gross unrealized
depreciation for all securities totaled $42,885 for net unrealized depreciation
of $36,907. The aggregate cost of securities for federal income tax purposes at
December 31, 2002 was $2,065,097.
NOTE 5. ESTIMATES
Preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
NOTE 6. SUBSEQUENT EVENT
Effective as of March 18, 2003, Unified Financial Securities, Inc. will
replace Capital Research Brokerage Services, LLC as distributor to Capital
Value.
<page>
ELECTION OF TRUSTEES
At a special meeting of the shareholders held on December 18, 2002, a vote
was held to elect members to serve on the Board of Trustees. The vote tally for
each Trustee is as follows:
<table>
<s> <c> <c> <c> <c>
For Against Withheld Total
Timothy L. Ashburn 11,300,632.473 987.366 4,698,819.489 16,000,439.328
Daniel J. Condon 11,300,632.473 987.366 4,698,819.489 16,000,439.328
Gary E. Hippenstiel 11,300,632.473 987.366 4,698,819.489 16,000,439.328
Stephen A. Little 11,300,632.473 987.366 4,698,819.489 16,000,439.328
Ronald C. Tritschler 11,300,632.473 987.366 4,698,819.489 16,000,439.328
</table>
<page>
AUXIER FOCUS FUND
PERFORMANCE UPDATE
DECEMBER 31, 2002
AUXFX RETURNS VS. S&P 500 INDEX
AUXIER FOCUS FUND S&P 500 INDEX DIFFERENCE
12/31/01 - 12/31/02 -6.79% -22.10% 15.31%
12/31/00 - 12/31/01 12.67% -11.88% 24.55%
12/31/99 - 12/31/00 4.05% -9.10% 13.15%
since inception 7/9/99 12.48% * -34.28% * 46.76%
*These reflect total return since the Fund's inception.
The S&P 500 Index is a widely recognized unmanaged index of common stock
prices and is representative of a broader market and range of securities than is
found in the Fund portfolio. Individuals cannot invest directly in the index.
Performance figures reflect the change in value of the stocks in the index, and
reinvestment of dividends. The index returns do not reflect expenses, which have
been deducted from the Fund's return. The performance of the Fund is computed on
a total return basis, which includes reinvestment of all dividends. THE FUND'S
RETURN REPRESENTS PAST PERFORMANCE AND DOES NOT PREDICT FUTURE RESULTS.
Investment returns and the principal value of an investment will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than their
original cost. The returns do not reflect deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
For a prospectus and more information, including charges and expenses, call
toll free 1-877-328-9437. The prospectus should be read carefully before
investing. Past performance does not guarantee future results. Shares when
redeemed may be worth more or less than their original cost.
Distributed by Unified Financial Securities, Inc, 431 N. Pennsylvania St.
Indianapolis, IN 46204. Member NASD, SIPC
<page>
Management Discussion of Fund Performance
Dear Shareholders:
The General Stock Market in 2002 The U.S. stock market as measured by the
Standard and Poor's 500 declined 22% in 2002, a decline of approximately $2.6
trillion. The average mutual fund declined 22% as well, the worst showing since
1974. The US market has now experienced three consecutive down years. Over the
past 200 years, there have been only two periods where the markets dropped four
consecutive years: 1836-39 and 1929-32. The largest single year percentage gain
in the past 100 years was registered in 1933 when the Dow Jones average
appreciated over 54%.
While our focus is fundamental valuation of securities, it is also critical
to study past market and economic history to help minimize risk. It appears that
with every major technological advance, capital is sacrificed for the betterment
of society. In the 1830's canals were the rage, in the 1870's railroads. The
1920's brought radio, electricity and autos to the masses. All were great for
the standard of living but terrible, ultimately, for shareholders.
Results in 2002 Our performance versus the major stock averages is likely
to be better in a flat to down market. Our long-term goal is to outperform the
S&P 500 Index while taking substantially lower risk. The outperformance should
come generally in bad markets with the hope of matching returns in the up
markets. This has been the case this past year.
Typical Situation We approach investing like farming. There is a time to
plant and a time to harvest. The time to plant is when pessimism is rampant and
the investment community is negative. We aim to harvest at the height of
optimism and euphoria, the enemies of the rational investor. The buy list will
include securities that are often misunderstood and mispriced due to a temporary
or surmountable problem. A price decline due to a massive flood of easy money is
not the ideal bet. If the risk/reward on individual stocks does not appear
compelling, we look for alternative parking spots that are somewhat insulated
from market declines. These investments tend to be more dependent upon specific
corporate actions, as opposed to market supply and demand relationships, and
therefore are more defensive. This past year we have been moving more money into
the senior debt of companies taking aggressive measures to shore up their
balance sheets. The value we try to add is in quantifying the risk of each
investment and monitoring the day-to-day operating fundamentals. When the
fundamentals turn up and the price is right, we are in a position to move fast.
Current Situation The past year we have put an increased research emphasis
on the liability side of corporate balance sheets. Since 1995, off-balance sheet
debt has grown in excess of 250%. Under-funded pension charges for S&P companies
could exceed $15 billion in 2003 alone. Source: Mercer. Last July, Moody's
reported that 771 investment grade companies had disclosed only 22% of 2,819
conditions that could cause a drop in their credit rating. In the late 1990's
many industries attracted huge inflows of cheap capital that fueled an
unprecedented capital spending boom and a rapidly accelerating credit cycle.
This trend is now reversing. Companies are being forced to slash soaring debt
levels, both on- and off-balance sheet, as their asset values have plummeted.
Today, 45% of S&P 500 companies are one notch from losing their investment grade
ratings. Source: Merrill Lynch. This is prompting companies to aggressively
address the problem, enhancing the value of bank and senior debt while
potentially diluting the common stock. An added positive is that the issuance of
lower rated corporate bonds dropped to $58.2 billion in 2002, down from $78.2
billion in 2001. This declining supply, coupled with historically wide spreads
over treasuries and a redirecting of cash flow to restore balance sheet health,
makes the senior corporate bond sector attractive. In particular, the electric
utility industry is struggling with over $800 billion in debt, which is leading
to some very interesting situations as the industry restructures. Senior claims
on pipelines or transmission assets provide strong security, yet these bonds
offer equity-type upside with much lower risk. Now, more than ever it is
important to quantify the risk in each security. This requires scrutiny of the
entire business. Looking at a couple of benchmarks or screens just is not
sufficient. After three years of market declines, I am getting much more enticed
by the price points of some high quality businesses.
Hidden risks in seemingly low-risk bonds Money has been flowing into
government bonds for the past three years. Historically, when a currency has
been tied to a fixed standard like the US dollar was to gold in the 1930s, it is
very difficult to reverse deflationary trends. However, when a currency has been
allowed to float, like the dollar is now, central banks have been able to
"reflate" their economies through the use of monetary and fiscal policies. The
broad basket of commodity prices as measured by the CRB index is up over 30%
this past year, reflecting this stimulus. The printing of money, increased
deficit spending and a depreciating currency all increase the risk of rising
rates. The implication to holders of long-term government debt could be painful
with current interest so low. A one to two percentage point rise in the 30-year
treasury could mean principal losses of over 15%.
A Final Thought With a potential conflict in the Middle East pending and
"uncertainty" the dominating headline, it might be helpful to revisit some words
of wisdom from Warren Buffett. He has been the primary driver of Berkshire
Hathaway's share price appreciation from $80 in 1972 to $75,000 in 2002 . . .
"We will continue to ignore political and economic forecasts, which are an
expensive distraction for many investors and businessmen. Thirty years ago, no
one could have foreseen the huge expanse of the Vietnam War, wage and price
controls, two oil shocks, the resignation of a president, the dissolution of the
Soviet Union, a one-day drop of the Dow of 568 points or treasury bill yields
fluctuating between 2.8% and 17.4%. But, surprise--none of these blockbuster
events made the slightest dent in Ben Graham's investment principles. Nor did
they render unsound the negotiated purchases of fine businesses at sensible
prices. Imagine the cost to us, then, if we had let a fear of unknowns cause us
to defer or alter the deployment of capital. Indeed, we have usually made our
best purchases when apprehensions about some macro event were at a peak. Fear is
the foe of the faddist but the friend of the fundamentalist."
Thank you!
Jeff Auxier
<page>
Auxier Focus Fund
Schedule of Investments
December 31, 2002 (Unaudited)
<table>
<s> <c> <c>
Common Stocks - 60.75% Shares Value
Accident & Health Insurance - 0.92%
AON Corp. 9,500 $ 179,455
---------------
Aircraft - 0.76%
Boeing Co. 4,500 148,455
---------------
Bottled & Canned Soft Drinks & Carbonated Waters - 0.43%
National Beverage Corp. (a) 5,500 84,150
---------------
Cable & Other Pay Television Services - 0.29%
Liberty Media Corp. (a) 6,247 55,848
---------------
Cigarettes - 2.36%
Philip Morris Companies, Inc. 11,400 462,042
---------------
Commercial Banks - 1.77%
City Bank of Lynnwood, WA 14,000 346,500
---------------
Construction, Mining & Materials Handling Machinery & Equip. - 0.46%
Dover Corp. 3,100 90,396
---------------
Electric & Other Services Combined - 0.03%
Sierra Pacific Resources (a) 1,000 6,500
---------------
Electric Housewares & Fans - 0.24%
Helen of Troy Ltd. (a) 4,000 46,560
---------------
Electric Services - 0.48%
Texas Utilities Co. 5,000 93,400
---------------
Electronic Computers - 0.15%
Ceridian Corp. (a) 2,000 28,840
---------------
Federal & Federally - Sponsored Credit Agencies - 1.72%
Freddie Mac 5,700 336,585
---------------
Finance Services - 1.50%
American Express Co. 7,500 265,125
Lloyds TSB Group Plc. ADR 1,000 28,590
---------------
293,715
---------------
Fire, Marine & Casualty Insurance - 2.97%
Berkshire Hathaway, Inc. - Class B (a) 20 48,460
Chubb Corp. 2,500 130,500
Travelers Property Casualty Corp. Class A (a) 27,150 397,748
Travelers Property Casualty Corp. Class B (a) 310 4,541
---------------
581,249
---------------
</table>
<page>
Auxier Focus Fund
Schedule of Investments
December 31, 2002 (Unaudited) - continued
<table>
<s> <c> <c>
Common Stocks - 60.75% - continued Shares Value
Food & Kindred Products - 1.38%
BAT Industries Plc. 13,700 269,890
---------------
Iron & Steel Foundries - 0.40%
Precision Castparts Corp. 3,200 77,600
---------------
Laboratory Analytical Instruments - 0.67%
Waters Corp. (a) 6,000 130,680
---------------
Miscellaneous Shopping Goods Stores - 0.22%
Office Depot, Inc. (a) 3,000 44,280
---------------
Motor Vehicle Parts & Accessories - 0.05%
Visteon Corp. 1,500 10,440
---------------
Motor Vehicles & Passenger Car Bodies - 0.45%
General Motors Corp. 2,375 87,542
---------------
National Commercial Banks - 3.72%
Bank One Corp. 200 7,310
Citigroup, Inc. 3,693 129,957
Fleet Boston Corp. 13,700 332,910
MBNA Corp. 6,000 114,120
U.S. Bancorp 6,745 143,129
---------------
727,426
---------------
Oil & Gas Field Services - 0.72%
Willbros Group, Inc. (a) 17,000 139,740
---------------
Operative Builders - 0.36%
D.R. Horton, Inc. 4,050 70,267
---------------
Paper board containers & boxes - 0.29%
Longview Fibre Co. (a) 8,000 57,840
---------------
Pharmaceutical Preparations - 5.09%
Bristol-Myers Squibb, Inc. 1,500 34,725
Merck & Co., Inc. 5,600 317,016
Pfizer, Inc. 8,000 244,560
Schering-Plough, Inc. 18,000 399,600
---------------
995,901
---------------
</table>
<page>
Auxier Focus Fund
Schedule of Investments
December 31, 2002 (Unaudited) - continued
<table>
<s> <c> <c>
Common Stocks - 60.75% - continued Shares Value
Radio & Tv Broadcasting & Communications Equipment - 0.22%
Motorola, Inc. 5,000 43,250
---------------
Real Estate Investment Trusts - 2.17%
Plum Creek Timber Co., Inc. 18,000 424,800
---------------
Refuse Systems - 0.81%
Waste Management, Inc. 6,900 158,148
---------------
Retail - Drug Stores & Proprietary Stores - 0.23%
CVS Corp. 1,800 44,946
---------------
Retail - Eating Places - 2.52%
McDonald's Corp. 8,000 128,640
Yum! Brands, Inc. (a) 15,000 363,300
---------------
491,940
---------------
Retail - Grocery Stores - 2.40%
Albertson's, Inc. 5,350 119,091
Kroger Corp. (a) 18,400 284,280
Safeway, Inc. (a) 2,800 65,408
---------------
468,779
---------------
Retail - Jewelry Stores - 1.14%
Tiffany & Co. 6,100 145,851
Zale Corp. (a) 2,400 76,560
---------------
222,411
---------------
Retail - Lumber & Other Building Materials Dealers - 0.25%
The Home Depot, Inc. 2,000 47,920
---------------
Retail - Shoe Stores - 0.09%
Footstar, Inc. (a) 2,500 17,400
---------------
Savings Institution, Federally Chartered - 0.13%
Washington Federal, Inc. 1,000 24,850
---------------
Savings Institutions, Not Federally Chartered - 1.05%
Washington Mutual, Inc. 5,950 205,454
---------------
Services - Advertising - 0.45%
Valassis Communications, Inc. (a) 3,000 88,290
---------------
Services - Advertising Agencies - 1.37%
The Interpublic Group of Co., Inc. 19,000 267,520
---------------
</table>
<page>
Auxier Focus Fund
Schedule of Investments
December 31, 2002 (Unaudited) - continued
<table>
<s> <c> <c>
Common Stocks - 60.75% - continued Shares Value
Services - Business Services - 2.71%
Efunds Corp. (a) 58,200 530,202
---------------
Services - Computer Processing & Data Preparation - 4.41%
Automatic Data Processing, Inc. 5,000 196,250
Concord EFS, Inc. (a) 22,000 346,280
IMS Health, Inc. 20,000 320,000
---------------
862,530
---------------
Services - Computer Programming, Data Processing, Etc. - 1.70%
Electronic Data Systems Corp. 18,000 331,740
---------------
Services - Educational Services - 0.81%
ITT Educational Services, Inc. (a) 2,900 68,295
Learning Tree International, Inc. (a) 6,600 90,420
---------------
158,715
---------------
Services - General Medical & Surgical Hospitals - 0.50%
Tenet Healthcare Corp. (a) 6,000 98,400
---------------
Services - Management Consulting Services - 2.30%
Maximus, Inc. (a) 17,200 448,920
---------------
Services - Motion Picture & Video Tape Production - 0.30%
AOL Time Warner, Inc. 4,500 58,950
---------------
Services - Packaged Software - 0.06%
Equifax, Inc. 500 11,570
---------------
Services - Specialty Outpatient Facilities - 0.72%
SeraCare, Inc. (a) 23,500 141,000
---------------
State Commercial Bank - 0.12%
Bank of New York, Inc. 1,000 23,960
---------------
Surgical & Medical Instruments & Apparatus - 5.00%
Baxter International, Inc. 12,000 336,000
Guidant Corp. (a) 14,600 450,410
Utah Medical Products, Inc. (a) 10,000 191,000
---------------
977,410
---------------
Telephone Communications (No Radiotelephone) - 0.28%
Sprint Corp. 3,800 55,024
---------------
Television Broadcasting Stations - 0.99%
Grupo Televisa, S.A. (a) 6,900 192,717
---------------
</table>
<page>
Auxier Focus Fund
Schedule of Investments
December 31, 2002 (Unaudited) - continued
<table>
<s> <c> <c>
Common Stocks - 60.75% - continued Shares Value
Tobacco Products - 0.43%
UST, Inc. 2,500 83,575
---------------
Water Transportation - 0.04%
Carnival Corp. 300 7,485
---------------
Wholesale - Drugs Proprietaries & Druggists' Sundries - 0.12%
Cardinal Health, Inc. 400 23,676
---------------
TOTAL COMMON STOCKS (Cost $12,955,423) 11,876,883
---------------
Unit Investment Trusts - 0.06%
Sector SPDR Trust 500 11,000
---------------
TOTAL UNIT INVESTMENT TRUSTS (Cost $12,885) 11,000
---------------
Preferred Stocks - 2.97%
Boston Edison, 4.25% 200 13,100
Central Power & Light, 4% 305 18,662
Cincinnati Gas & Electric, 4% 400 36,900
Cincinnati Gas & Electric, 4.75% 300 22,434
Connecticut Light & Power, 1.9% 1,500 38,625
Connecticut Light & Power, 2.0% 1,000 31,531
Dayton Power & Light, 3.90% 1,500 97,500
Hawaiian Electric, Inc., 4.25% 4,000 45,750
Indianapolis Power & Light, 4% 300 16,359
Mississippi Power Co., 7% 600 58,819
Monongahela Power, 4.40% 100 5,340
Northern Ind Pub Sv., 4.25% 500 30,625
Pacific Enterprises, 4.5% 1,000 65,870
Peco Energy, 3.8% 400 24,500
Public Svc Gas & Electric, 4.08% 945 61,898
Westar Energy, Inc., 4.25% 300 12,563
---------------
TOTAL PREFERRED STOCKS (Cost $597,706) 580,476
---------------
Corporate Bonds - 22.06% Principal Amount Value
AOL Time Warner, 6.15%, 05/01/07 505,000 525,202
Coastal Corp. Note, 7.5%, 08/15/06 220,000 180,562
Crown Cork & Seal, 6.75%, 04/15/03 100,000 98,500
Finova Capital Corp., 7.5%, 11/15/09 26,000 9,100
Fruit of the Loom, 7.375%, 11/15/23 50,000 -
GATX Capital Corp, Note, 8.25%, 09/01/03 360,000 362,016
GMAC, 7.50%, 01/15/12 40,000 40,799
GMAC, 5.75%, 10/15/06 100,000 100,461
GMAC, 6.875%, 09/15/11 200,000 199,775
</table>
<page>
Auxier Focus Fund
Schedule of Investments
December 31, 2002 (Unaudited) - continued
<table>
<s> <c> <c>
Corporate Bonds - 22.06% - continued Principal Amount Value
Hilton Hotels, 5%, 05/15/06 440,000 423,500
Interpublic Group, 0%, 12/14/21 50,000 39,250
Monongahela Power, 5%, 10/01/06 50,000 48,318
Nevada Power Company, 6.2%, 04/15/04 65,000 59,822
Newpark Resource, Inc., 8.625%, 12/15/07 50,000 47,750
Pacific Gas & Electric, 6.25%, 03/01/04 130,000 128,700
Pacific Gas & Electric, 6.75%, 10/01/23 21,000 19,845
Pacific Gas & Electric, 5.875%, 10/01/05 125,000 122,500
Pacific Gas & Electric, 8.25%, 11/01/22 60,000 58,500
Sierra Pacific Power Company, 8%, 06/01/08 275,000 257,914
Southern California Edison, 6.375%, 01/15/06 50,000 46,750
Southern California Edison, 6.9%, 10/01/18 100,000 93,500
Tyco International Ltd. Note, 5.875%, 11/01/04 50,000 48,525
Tyco International Ltd. Note, 6.375%, 01/15/04 50,000 48,514
Waste Management, Inc., 7%, 05/15/05 51,000 53,680
Waste Management, Inc., 6.375%, 12/01/03 170,000 173,286
Waste Management, Inc., 7.65%, 03/15/11 871,000 956,622
Waste Management, Inc., 7.375%, 08/01/10 154,000 168,744
---------------
TOTAL CORPORATE BONDS (Cost $4,156,858) 4,312,135
---------------
Government Bonds - 2.54%
Canada
Ontario Hydro, 0%, 10/01/20 1,500,000 338,492
Ontario Hydro, 0%, 11/27/20 706,000 157,753
---------------
TOTAL MUNICIPAL BONDS (Cost $495,501) 496,245
---------------
Money Market Securities - 12.17%
Huntington Money Fund - Invest A, 0.38%, (Cost $2,379,716) (b) 2,379,716 2,379,716
---------------
TOTAL INVESTMENTS (Cost $20,598,089) - 100.55% $ 19,656,455
---------------
Liabilities in excess of cash and other assets - (0.55%) (106,687)
---------------
TOTAL NET ASSETS - 100.00% $ 19,549,768
===============
</table>
(a) Non-income producing.
(b) Variable rate security; the coupon rate shown represents the yield at
December 31, 2002. <page>
Auxier Focus Fund
Statement of Assets and Liabilities
December 31, 2002 (Unaudited)
<table>
<s> <c>
Assets
Investments in securities, at value (cost $20,598,089) $ 19,656,455
Interest receivable 67,130
Dividends receivable 34,003
Receivable for investments sold 14,792
Receivable for fund shares sold 111,260
-----------------
Total assets 19,883,640
-----------------
Liabilities
Accrued advisory fees 22,485
Redemptions payable 42,000
Payable for investments purchased 269,387
-----------------
Total liabilities 333,872
-----------------
Net Assets $ 19,549,768
=================
Net Assets consist of:
Paid in capital 20,636,923
Accumulated net investment income (loss) 24,891
Accumulated net realized gain (loss) on investments (170,413)
Net unrealized appreciation (depreciation) on investments (941,633)
-----------------
Net Assets, for 1,832,260 shares $ 19,549,768
=================
Net Asset Value,
Offering and redemption price per share ($19,549,768 / 1,832,260) $ 10.67
=================
</table>
<page>
Auxier Focus Fund
Statement of Operations
Six months ended December 31, 2002 (Unaudited)
<table>
<s> <c>
Investment Income
Dividend income $ 116,250
Interest income 163,169
---------------
Total Income 279,419
---------------
Expenses
Investment advisor fee 125,943
Trustee fees 1,600
---------------
Total Expenses 127,543
Reimbursed Expenses (1,600)
---------------
Total Operating Expenses 125,943
---------------
Net Investment Income (Loss) 153,476
---------------
Realized & Unrealized Gain (Loss)
Net realized gain (loss) on investment securities (159,865)
Change in net unrealized appreciation (depreciation)
on investment securities (701,278)
---------------
Net realized and unrealized gain (loss) on investment securities (861,143)
---------------
Net increase (decrease) in net assets resulting from operations $ (707,667)
===============
</table>
<page>
Auxier Focus Fund
Statement of Changes In Net Assets
<table>
<s> <c> <c>
Six months ended
Dec. 31, 2002 Year ended
Increase (Decrease) in Net Assets (Unaudited) June 30, 2002
-------------------- ------------------
Operations
Net investment income (loss) $ 153,476 $ 79,634
Net realized gain (loss) on investment securities (159,865) 303,257
Change in net unrealized appreciation (depreciation) (701,278) (682,921)
-------------------- ------------------
Net increase (decrease) in net assets resulting from operations (707,667) (300,030)
-------------------- ------------------
Distributions
From net investment income (172,070) (71,862)
From net realized gain (289,083) (18,729)
-------------------- -----------------
Total distributions (461,153) (90,591)
-------------------- ------------------
Capital Share Transactions
Proceeds from shares sold 7,964,617 10,074,386
Reinvestment of distributions 460,746 90,185
Amount paid for shares repurchased (4,344,978) (219,862)
-------------------- ------------------
Net increase (decrease) in net assets
resulting
from share transactions 4,080,385 9,944,709
-------------------- -----------------
Total Increase (Decrease) in Net Assets 2,911,565 9,554,088
-------------------- ------------------
Net Assets
Beginning of period 16,638,203 7,084,115
-------------------- ------------------
End of period [including accumulated net
investment income (loss) of $153,476 and $0, respectively] $ 19,549,768 $ 16,638,203
==================== ==================
Capital Share Transactions
Shares sold 736,327 860,061
Shares issued in reinvestment of
distributions 42,940 7,863
Shares repurchased (416,128) (18,835)
-------------------- ------------------
Net increase (decrease) from capital transactions 363,139 849,089
==================== ==================
</table>
<page>
Auxier Focus Fund
Financial Highlights
<table>
<s> <c> <c> <c> <c>
Six months ended
Dec. 31, 2002 For
the year For the
year Period ended
(Unaudited) June
30, 2002 June 30,
2001 June 30, 2000
(c)
------------------- ------------- ------------- ---------------
Selected Per Share Data
Net asset value, beginning of period $ 11.33 $ 11.43 $ 9.99 $ 10.00
------------------- ------------- ------------- ---------------
Income from investment operations
Net investment income (loss) 0.09 0.08 0.17 0.18
Net realized and unrealized gain (loss) (0.48) (0.07) 1.43 (0.16)
------------------- ------------- ------------- ---------------
Total from investment operations (0.39) 0.01 1.60 0.02
------------------- ------------- ------------- ---------------
Less Distributions to shareholders:
From net investment income (0.10) (0.09) (0.13) (0.03)
From net realized gain (0.17) (0.02) (0.03) 0.00
------------------- ------------- ------------- ---------------
Total distributions (0.27) (0.11) (0.16) (0.03)
------------------- ------------- ------------- ---------------
Net asset value, end of period $ 10.67 $ 11.33 $ 11.43 $ 9.99
=================== ============= ============= ===============
Total Return (3.42)% (b) 0.07% 16.11% 0.23%(b)
Ratios and Supplemental Data
Net assets, end of period (000) $ 19,550 $ 16,638 $ 7,084 $ 1,336
Ratio of expenses to average net assets 1.35%(a) 1.35%(a) 1.35%(a) 1.35%(a)
Ratio of expenses to average net assets
before waiver & reimbursement 1.37%(a) 1.37%(a) 1.41%(a) 1.62%(a)
Ratio of net investment income to
average net assets 1.64%(a) 0.73%(a) 1.56%(a) 1.84%(a)
Ratio of net investment income to
average net assets before waiver & reimbursement 1.64%(a) 0.71%(a) 1.50%(a) 1.57%(a)
Portfolio turnover rate 20.34% 55.72% 41.46% 187.85%
</table>
(a) Annualized.
(b) For periods of less than a full year, total return is not annualized. (c)
For the period July 9, 1999 (commencement of operations) through June 30, 2000.
<page>
Auxier Focus Fund
Notes to Financial Statements
December 31, 2002 (Unaudited)
NOTE 1. ORGANIZATION
The Auxier Focus Fund (the "Fund") was organized as a non-diversified
series of the AmeriPrime Funds (the"Trust") on February 2, 1999 and commenced
operations on July 9, 1999. The Trust is established under the laws of Ohio by
an Agreement and Declaration of Trust dated August 8, 1995 (the "Trust
Agreement"). The Agreement permits the Board of Trustees (the "Board") to issue
an unlimited number of shares of beneficial interest of separate series without
par value. The Fund is one of the series of funds currently authorized by the
Trustees. The Fund's investment objective is to provide long-term capital
appreciation. The investment advisor to the Fund is Auxier Asset Management, LLC
(the "Advisor").
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Fund in the preparation of its financial statements.
Securities Valuation- Securities that are traded on any exchange or on the
NASDAQ over-the-counter market are valued at the last quoted sale price. Lacking
a last sale price, a security is valued at its last bid price except when in the
opinion of the Advisor the last bid price does not accurately reflect the
current value of the security. All other securities for which over-the-counter
market quotations are readily available are valued at their last bid price. When
market quotations are not readily available, when the Advisor determines the
last bid price does not accurately reflect the current value or when restricted
securities are being valued, such securities are valued as determined in good
faith by the Advisor, in conformity with guidelines adopted by and subject to
review of the Board of Trustees.
Fixed income securities generally are valued by using market quotations,
but may be valued on the basis of prices furnished by a pricing service when the
Advisor believes such prices accurately reflect the fair market value of such
securities. A pricing service utilizes electronic data processing techniques
based on yield spreads relating to securities with similar characteristics to
determine prices for normal institutional-size trading units of debt securities
without regard to sale or bid prices. If the Advisor decides that a price
provided by the pricing service does not accurately reflect the fair market
value of the securities, when prices are not readily available from a pricing
service or when restricted or illiquid securities are being valued, securities
are valued at fair value as determined in good faith by the Advisor, in
conformity with guidelines adopted by and subject to review of the Board of
Trustees. Short term investments in fixed-income securities with maturities of
less than 60 days when acquired, or which subsequently are within 60 days of
maturity, are valued by using the amortized cost method of valuation, which the
Board of Trustees has determined will represent fair value.
Federal Income Taxes- The Fund intends to qualify each year as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended. By so
qualifying, the Fund will not be subject to federal income taxes to the extent
that it distributes substantially all of its net investment income and any
realized capital gains.
Dividends and Distributions- The Fund intends to comply with federal tax
rules regarding distribution of substantially all of its net investment income
and capital gains. These rules may cause multiple distributions during the
course of the year.
Other- The Fund follows industry practice and records security transactions
on the trade date. The specific identification method is used for determining
gains or losses for financial statements and income tax purposes. Dividend
income is recorded on the ex-dividend date and interest income is recorded on an
accrual basis. Discounts and premiums on securities purchased are amortized over
the life of the respective securities.
<page>
Auxier Focus Fund
Notes to Financial Statements
December 31, 2002 (Unaudited) - continued
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Auxier Asset Management, LLC, 8050 S.W. Warm Springs St., Suite 130,
Tualatin, OR 97062, serves as investment advisor to the Fund. J. Jeffrey Auxier
is President and Chief Investment Officer of the Advisor and is responsible for
the day-to-day management of the Fund's portfolio. Also, J. Jeffrey Auxier may
be deemed to be a controlling person of the Advisor due to his ownership of a
majority of its shares.
Under the terms of the management agreement (the "Agreement"), the Advisor
manages the Fund's investments subject to approval of the Board and pays all of
the expenses of the Fund except brokerage fees and commissions, taxes, borrowing
costs (such as interest and dividends on securities sold short), Rule 12b-1
expenses, fees and expenses of non-interested person Trustees and extraordinary
expenses. As compensation for its management services and agreement to pay the
Fund's expenses, the Fund is obligated to pay the Advisor a fee computed and
accrued daily and paid monthly at an annual rate of 1.35% of the average value
of its daily net assets of the Fund. It should be noted that most investment
companies pay their own operating expenses directly, while the Fund's expenses,
except those specified above, are paid by the Advisor. For the period ended
December 31, 2002, the Advisor received a fee of $125,943 from the Fund. The
Advisor has contractually agreed to reimburse the Fund for the fees and expenses
of the disinterested Trustees through October 31, 2003. For the period ended
December 31, 2002, the Advisor reimbursed expenses of $1,600.
The Fund retains Unified Fund Services, Inc. ("Unified"), a wholly owned
subsidiary of Unified Financial Services, Inc., to manage the Fund's business
affairs and provide the Fund with administrative, transfer agency, and fund
accounting services, including all regulatory reporting and necessary office
equipment and personnel. The Advisor paid all administrative, transfer agency,
and fund accounting fees on behalf of the Fund per the Agreement. A Trustee and
the officers of the Trust are members of management and /or employees of
Unified.
The Fund retains Unified Financial Securities, Inc., a wholly owned
subsidiary of Unified Financial Services, Inc. to act as the principal
distributor of the Fund's shares. There were no payments made to the distributor
during the period ended December 31, 2002. Timothy L. Ashburn (a Trustee and
officer of the Trust) and Thomas G. Napurano (an officer of the Trust) are a
director and officer, respectively, of the Distributor and of Unified Financial
Services, Inc. (the parent company of the Distributor), and may be deemed to be
affiliates of the Distributor. Ronald C. Tritschler owns securities of Unified
Financial Services, Inc. and may be deemed to be an affiliate of the
Distributor.
NOTE 4. INVESTMENTS
For the period ended December 31, 2002, purchases and sales of investment
securities, other than short term investments, aggregated $7,918,287 and
$2,887,347, respectively. As of December 31, 2002, the gross unrealized
appreciation for all securities totaled $629,234 and the gross unrealized
depreciation for all securities totaled $1,570,867 for a net unrealized
depreciation of $941,633. The aggregate cost of securities for federal income
tax purposes at December 31, 2002 was $20,598,089.
NOTE 5. ESTIMATES
Preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
<page>
Auxier Focus Fund
Notes to Financial Statements
December 31, 2002 (Unaudited) - continued
NOTE 6. RELATED PARTY TRANSACTIONS
The beneficial ownership, either directly or indirectly, of more than 25%
of the voting securities of a fund creates a presumption of control of the fund,
under Section 2(a)(9) of the Investment Company Act of 1940. As of December 31,
2002, Charles Schwab & Co. held 59.02% of the outstanding Fund shares in an
omnibus account for the benefit of others.
NOTE 7. SUBSEQUENT EVENT
On January 3, 2003, the Auxier Focus Fund, a series of the Unified Series
Trust (the "Successor Fund"), acquired all of the assets and liabilities of the
Fund in a tax-free reorganization. Shareholders of the Fund received shares of
the Successor Fund in exchange for their Fund shares, and the Fund ceased
operations.
<page>
ELECTION OF TRUSTEES
At a special meeting of the shareholders held on December 18, 2002, a vote
was held to elect members to serve on the Board of Trustees. The vote tally for
each Trustee is as follows:
<table>
<s> <c> <c> <c> <c>
For Against Withheld Total
Timothy L. Ashburn 11,300,632.473 987.366 4,698,819.489 16,000,439.328
Daniel J. Condon 11,300,632.473 987.366 4,698,819.489 16,000,439.328
Gary E. Hippenstiel 11,300,632.473 987.366 4,698,819.489 16,000,439.328
Stephen A. Little 11,300,632.473 987.366 4,698,819.489 16,000,439.328
Ronald C. Tritschler 11,300,632.473 987.366 4,698,819.489 16,000,439.328
</table>
<page>
The Jumper Strategic Advantage Fund
Schedule of Investments
December 31, 2002 (Unaudited)
<table>
<s> <c> <c>
Convertible Preferred Stocks - 5.74% Shares Value
ALLTEL Corp., 7.75%, 05/17/05 950 49,044
Chubb Corp., 7%, 11/16/05 1,000 23,950
Duke Energy Corp., 8.25%, 05/16/04 8,500 135,235
FPL Group Inc., 8.5%, 02/16/05 1,000 55,750
Sempra Energy, 8.5%, 05/17/05 1,400 33,775
TXU Corp., 8.75%, 11/16/05 1,400 40,040
----------------
TOTAL PREFERRED STOCKS (Cost $425,334) 337,794
----------------
Principal
Amount Value
Corporate Bonds - 69.51%
AutoZone, Inc., 6.00%, 11/01/2003 200,000 204,884
Bank of Hawaii Honolulu, 6.875%, 6/1/2003 300,000 305,871
Bear Stearns Note, 6.125%, 02/01/03 100,000 100,296
Bellsouth Telecommunication Note, 6.25%, 05/15/03 20,000 20,329
Caterpillar Financial Service, 5.17%, 08/08/03 100,000 102,131
Cit Group Inc. Note, 7.125%, 10/15/04 200,000 211,442
Comdisco Holding PIK, 11%, 06/13/05 18,978 17,042
Dial Corp. Del Note, 6.625%, 06/15/03 150,000 151,901
Eastman Chem Co Note, 6.375%, 01/15/04 150,000 155,765
Finova Capital Corp., 7.50%, 10/15/2009 75,000 26,250
Ford Motor Credit Co., 5.75%, 2/23/2004 300,000 304,813
General Electric Capital Corp., 5.93%,
1/17/2003 300,000 300,418
Gen. Amer. Trans. Corp., 8.625%, 12/01/04 100,000 98,386
General Motors Acceptance Corp. Float, 10/16/2003 300,000 298,884
Harsco Corp. Note, 6%, 09/15/03 200,000 204,867
Heller Financial, Inc., 6.40%, 1/15/2003 300,000 300,364
Household Bank Note, 6.5%, 07/15/03 100,000 101,696
Int Lease Fin Sr Note, 5.25%, 05/03/04 200,000 206,113
Lehman Brothers Note, Float, 10/02/2003 100,000 100,176
Morgan Stanley Note, 7.125%, 01/15/03 107,000 107,152
Newell Rubbermaid, Inc., 5.42%, 10/21/2003 100,000 102,981
Sony Corp. Note, 6.125%, 03/04/03 100,000 100,810
Southern National Note, 7.05%, 05/23/03 250,000 255,078
Tele Communications, Inc., 8.25%, 1/15/2003 200,000 200,060
Textron Financial Corp., 5.95%, 3/15/04 100,000 103,901
Walmart Note, 6.5%, 06/01/03 10,000 10,194
----------------
TOTAL CORPORATE BONDS (Cost $4,119,229) 4,091,804
----------------
Convertible Corporate Bonds - 5.94%
Clear Channel Communications 200,000 199,500
Inco Ltd Deb Conv 100,000 100,875
Thermo Electron 50,000 49,625
----------------
TOTAL CONVERTIBLE CORPORATE BONDS (Cost $349,179) 350,000
----------------
Agency Obligations - 12.76%
Federal Home Loan Bank, 5.125%, 01/13/03 750,000 750,882
----------------
TOTAL AGENCY OBLIGATIONS (Cost $750,011)
Money Market Securities - 4.35%
Huntington Money Fund - Invest A, 0.38% (a) (Cost $256,328) 256,328 256,328
----------------
TOTAL INVESTMENTS - 98.30% (Cost $5,900,080) 5,786,808
----------------
Other Assets Less Liabilities - 1.70% 100,013
----------------
NET ASSETS - 100.00% $ 5,886,821
================
</table>
<page>
The Jumper Strategic Advantage Fund
Statement of Assets and Liabilities
December 31, 2002 (Unaudited)
<table>
<s> <c>
Assets
Investments in securities, at value (cost $5,900,080) $ 5,786,808
Interest receivable 90,741
Dividends receivable 8,179
Other receivable 3,515
---------------
Total assets 5,889,243
----------------
Liabilities
Accrued advisory fees 872
Accrued 12b-1 fees 233
Other payables and accrued expenses 1,317
----------------
Total liabilities 2,422
----------------
Net Assets $ 5,886,821
================
Net Assets consist of:
Paid in capital 6,260,289
Accumulated net investment income (loss) 8,950
Accumulated net realized gain (loss) on investments (269,146)
Net unrealized appreciation (depreciation) on investments (113,272)
----------------
Net Assets $ 5,886,821
================
Institutional Class:
Net Asset Value,
offering and redemption price per share ($5,008,128 / 2,674,373) $ 1.87
================
Investor Class:
Net Asset Value,
offering and redemption price per share ($878,693 / 470,101) $ 1.87
================
</table>
<page>
The Jumper Strategic Advantage Fund
Statement of Operations
Six months ended December 31, 2002 (Unaudited)
<table>
<s> <c>
Investment Income
Dividend income $ 17,040
Interest income 121,859
--------------
Total Income 138,899
--------------
Expenses
Investment advisor fee 23,133
12b-1 fee, Investor Class 1,453
Trustee fees 1,100
--------------
Total Expenses 25,686
Reimbursed expenses (1,100)
--------------
Total operating expenses 24,586
--------------
Net Investment Income (Loss) 114,313
--------------
Realized & Unrealized Gain (Loss)
Net realized gain (loss) on investment securities (31,176)
Change in net unrealized appreciation (depreciation)
on investment securities (58,574)
--------------
Net realized and unrealized gain (loss) on investment securities (89,750)
--------------
Net increase (decrease) in net assets resulting from operations $ 24,563
==============
</table>
<page>
The Jumper Strategic Advantage Fund
Statement of Changes In Net Assets
<table>
<s> <c> <c>
Six months ended For the
Dec. 31, 2002 year ended
Increase (Decrease) in Net Assets (Unaudited) June 30, 2002
-------------------- --------------------
Operations
Net investment income (loss) $ 114,313 $ 248,075
Net realized gain (loss) on investment securities (31,176) (145,795)
Change in net unrealized appreciation (depreciation) (58,574) 207,638
-------------------- --------------------
Net increase (decrease) in net assets resulting from operations 24,563 309,918
-------------------- --------------------
Distributions
Institutional
From net investment income (94,008) (177,478)
Investor -
From net investment income (20,323) (68,786)
-------------------- --------------------
Total distributions (114,331) (246,264)
-------------------- --------------------
Capital Share Transactions -
Proceeds from shares sold
Institutional - 822,805
Investor 318,800 219,022
Reinvestment of distributions
Institutional 93,987 177,478
Investor 19,659 68,786
Amount paid for shares repurchased
Institutional (52,500) (742,146)
Investor (488,099) (1,529,620)
-------------------- --------------------
Net increase (decrease) in net assets
resulting
from share transactions (108,153) (983,675)
-------------------- --------------------
Total Increase (Decrease) in Net Assets (197,921) (920,021)
-------------------- --------------------
Net Assets
Beginning of period 6,084,742 7,004,763
-------------------- --------------------
End of period [including accumulated net
investment income (loss) of $114,313 and $0, respectively] $ 5,886,821 $ 6,084,742
==================== ====================
Capital Share Transactions - Institutional Shares
Shares sold - 432,571
Shares issued in reinvestment of
distributions 50,168 92,790
Shares repurchased (27,792) (389,810)
-------------------- --------------------
Net increase (decrease) from capital transactions 22,376 135,551
==================== ====================
Capital Share Transactions - Investor Shares
Shares sold 169,945 115,768
Shares issued in reinvestment of
distributions 10,521 36,445
Shares repurchased (261,639) (800,847)
-------------------- --------------------
Net increase (decrease) from capital transactions (81,173) (377,532)
==================== ====================
</table>
<page>
The Jumper Strategic Advantage Fund - Institutional Class
Financial Highlights
<table>
<s> <c> <c> <c> <c> <c>
For the For the For the For the
Six months year year year period
ended ended ended ended ended
Dec. 31, 2002 (c) June
30, June 30, June 30,
June 30, (Unaudited)
2002 2001 2000 1999 (d)
--------------- ---------- ---------- ---------- ----------
Selected Per Share Data
Net asset value, beginning of period $ 1.90 $ 1.89 $ 1.95 $ 1.96 $ 2.00
--------------- ---------- ---------- ---------- ----------
Income from investment operations
Net investment income (loss) 0.04 0.07 0.12 0.11 0.05
Net realized and unrealized gain
(loss) (0.03) 0.01 (0.06) (0.01) (0.04)
--------------- ---------- ---------- ---------- ----------
Total from investment
operations 0.01 0.08 0.06 0.10 0.01
--------------- ---------- ---------- ---------- ----------
Less Distributions to
shareholders:
From net investment income (0.04) (0.07) (0.12) (0.10) (0.05)
From net realized
gain 0.00 0.00 0.00 (0.01) 0.00
--------------- ---------- ---------- ---------- ----------
Total distributions
(0.04) (0.07) (0.12) (0.11) (0.05)
--------------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 1.87 $ 1.90 $ 1.89 $ 1.95 $ 1.96
=============== ========== ========== ========== ==========
Total Return 0.28% (b) 0.53% 3.17% 5.17% 0.51%(b)
Ratios and Supplemental Data
Net assets, end of period (000) $ 5,008 $ 5,040 $ 4,749 $ 4,399 $ 2,429
Ratio of expenses to average net assets 0.75%(a) 0.75%(a) 0.75%(a) 0.75%(a) 0.75%(a)
Ratio of expenses to average net assets
before waiver & reimbursement 0.78%(a) 0.79%(a) 0.78%(a) 0.82%(a) 0.85%(a)
Ratio of net investment income to
average net assets 3.76%(a) 3.83%(a) 6.36%(a) 5.65%(a) 3.89%(a)
Ratio of net investment income to
average net assets before waiver
& reimbursement 3.73%(a) 3.80%(a) 6.33%(a) 5.58%(a) 3.79%(a)
Portfolio turnover rate 25.59% 82.73% 24.07% 187.73% 173.38%
</table>
(a) Annualized.
(b) For periods of less than a full year, total return is not annualized. (c)
For the period July 1, 2002 to December 31, 2002. (d) For the Period October 26,
1998 (commencement of operations) to
June 30, 1999.
<page>
The Jumper Strategic Advantage Fund - Investor Class
Financial Highlights
<table>
<s> <c> <c> <c> <c>
For the For the For the
Six months year year period
ended ended ended ended
Dec. 31, June 30, June 30, June 30,
2002 (c)
(Unaudited) 2002 2001 2000 (d)
------------ ---------- ---------- ----------
Selected Per Share Data
Net asset value, beginning of period $ 1.90 $ 1.88 $ 1.95 $ 1.98
------------ ---------- ---------- ----------
Income from investment operations
Net investment income (loss) 0.02 0.07 0.12 0.08
Net realized and unrealized gain (loss) (0.02) 0.02 (0.08) (0.03)
------------ ---------- ---------- ----------
Total from investment operations
0.00 0.09 0.04 0.05
------------ ---------- ---------- ----------
Less Distributions to shareholders:
From net investment income (0.03) (0.07) (0.11) (0.08)
From net realized gain 0.00 0.00 0.00 0.00
------------ ---------- ---------- ----------
Total distributions
(0.03) (0.07) (0.11) (0.08)
------------ ---------- ---------- ----------
Net asset value, end of period $ 1.87 $ 1.90 $ 1.88 $ 1.95
============ ========== ========== ==========
Total Return 0.20% (b) 1.06% 2.31% 2.49%(b)
Ratios and Supplemental Data
Net assets, end of period (000) $ 879 $1,045 $ 2,256 $ 1,734
Ratio of expenses to average net assets 1.00%(a) 1.00%(a) 1.00%(a) 1.00%(a)
Ratio of expenses to average net assets
before waiver & reimbursement 1.06%(a) 1.04%(a) 1.03%(a) 1.04%(a)
Ratio of net investment income to
average net assets 3.49%(a) 3.85%(a) 6.11%(a) 5.87%(a)
Ratio of net investment income to
average net assets before waiver & reimbursement 3.43%(a) 3.82%(a) 6.08%(a) 5.82%(a)
Portfolio turnover rate 25.59% 82.73% 24.07% 187.73%
</table>
(a) Annualized.
(b) For periods of less than a full year, total return is not annualized.
(c) For the period July 1, 2002 to December 31, 2002.
(d) For the Period November 2, 1999 (commencement of operations) to June 30,
2000.
<page>
Jumper Strategic Advantage Fund
Notes To Financial Statements
December 31, 2002 (Unaudited)
NOTE 1. ORGANIZATION
Jumper Strategic Advantage Fund (the "Fund") was organized as a diversified
series of the AmeriPrime Funds (the "Trust") on February 26, 1998 and commenced
operations on October 26, 1998. The Trust is established under the laws of Ohio
by an Agreement and Declaration of Trust dated August 8, 1995 (the "Trust
Agreement"). The Trust Agreement permits the Board of Trustees to issue an
unlimited number of shares of beneficial interest of separate series without par
value. The Fund is one of a series of funds currently authorized by the Board of
Trustees. The Fund currently offers two classes of shares: "Institutional Class"
shares and "Investor Class" shares. The classes differ as follows: 1) Investor
Class shares pay 12b-1 expenses of 0.25%, and 2) each class may bear differing
amounts of class specific expenses. The Fund's investment objective is to
provide current income with a low amount of share price fluctuation. The
investment advisor to the Fund is The Jumper Group, Inc. (the "Advisor").
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Fund in the preparation of its financial statements.
Securities Valuations - Securities that are traded on any exchange or on
the NASDAQ over-the-counter market are valued at the last quoted sale price.
Lacking a last sale price, a security is valued at its last bid price except
when, in the Advisor's opinion, the last bid price does not accurately reflect
the current value of the security. All other securities for which
over-the-counter market quotations are readily available are valued at their
last bid price. When market quotations are not readily available, when the
Advisor determines the last bid price does not accurately reflect the current
value or when restricted securities are being valued, such securities are valued
as determined in good faith by the Advisor, in conformity with guidelines
adopted by and subject to review of the Board of Trustees.
Fixed income securities generally are valued by using market quotations,
but may be valued on the basis of prices furnished by a pricing service when the
Advisor believes such prices accurately reflect the fair market value of such
securities. A pricing service utilizes electronic data processing techniques
based on yield spreads relating to securities with similar characteristics to
determine prices for normal institutional-size trading units of debt securities
without regard to sale or bid prices. If the Advisor decides that a price
provided by the pricing service does not accurately reflect the fair market
value of the securities, when prices are not readily available from a pricing
service or when restricted or illiquid securities are being valued, securities
are valued at fair value as determined in good faith by the Advisor, in
conformity with guidelines adopted by and subject to review of the Board of
Trustees. Short term investments in fixed-income securities with maturities of
less than 60 days when acquired, or which subsequently are within 60 days of
maturity, are valued by using the amortized cost method of valuation, which the
Board of Trustees has determined will represent fair value.
Federal Income Taxes - The Fund intends to qualify each year as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended. By so qualifying, the Fund will not be subject to federal income taxes
to the extent that it distributes substantially all of its net investment income
and any realized capital gains. The Fund intends to pay dividends to avoid all
income and excise taxes.
Dividends and Distributions - The Fund intends to distribute substantially
all of its net investment income as dividends to its shareholders on a daily
basis and to pay such dividends monthly. The Fund intends to distribute its net
long term capital gains and its net short term capital gains at least once a
year.
<page>
Jumper Strategic Advantage Fund
Notes To Financial Statements
December 31, 2002 (Unaudited) - continued
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - continued
Other - The Fund follows industry practice and records security
transactions on the trade date. The specific identification method is used for
determining gains or losses for financial statements and income tax purposes.
Dividend income is recorded on the ex-dividend date and interest income is
recorded on an accrual basis. Discounts and premiums on securities purchased are
amortized over the life of the respective securities.
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund retains The Jumper Group, Inc. to manage the Fund's investments.
Jay Colton Jumper, the Fund's portfolio manager, is primarily responsible for
the day-to-day management of the Fund's portfolio.
Under the terms of the management agreement, (the "Agreement"), the Advisor
manages the Fund's investments subject to approval of the Board of Trustees and
pays all expenses of the Fund except brokerage fees and commissions,
distribution fees (12b-1) for the Investor Class, taxes, interest, fees and
expenses of non-interested person trustees, and extraordinary expenses. As
compensation for its management services and agreement to pay the Fund's
expenses, the Fund is obligated to pay the Advisor a fee computed and accrued
daily and paid monthly at an annual rate of 0.75% of the average daily net
assets of the Fund. It should be noted that most investment companies pay their
own operating expenses directly, while the Fund's expenses, except those
specified above, are paid by the Advisor. For the period ended December 31,
2002, the Advisor earned a fee of $23,133 from the Fund. The Advisor has
contractually agreed to reimburse the Fund for fees and expenses of the
non-interested person Trustees through October 31, 2003. For the period ended
December 31, 2002, the Advisor reimbursed expenses of $1,100.
The Fund retains Unified Fund Services, Inc. ("Unified"), a wholly owned
subsidiary of Unified Financial Services, Inc., to manage the Fund's business
affairs and provide the Fund with administrative, transfer agency, and fund
accounting services, including all regulatory reporting and necessary office
equipment and personnel. The Advisor paid all administrative, transfer agency,
and fund accounting fees on behalf of the Fund per the Agreement. A Trustee and
the officers of the Trust are members of management and /or employees of
Unified.
The Fund retains Unified Financial Securities, Inc., a wholly owned
subsidiary of Unified Financial Services, Inc. to act as the principal
distributor of the Fund's shares. There were no payments made to the distributor
during the period ended December 31, 2002. Timothy L. Ashburn (a Trustee and
officer of the Trust) and Thomas G. Napurano (an officer of the Trust) are a
director and officer, respectively, of the Distributor and of Unified Financial
Services, Inc. (the parent company of the Distributor), and may be deemed to be
affiliates of the Distributor
The Investor Class has adopted a Distribution Plan pursuant to Rule 12b-1
under the Investment Company Act of 1940 (the "Plan"). The Plan permits the Fund
to pay directly, or reimburse the Advisor or the distributor, for distribution
expenses in an amount not to exceed 0.25% of the average daily net assets of the
Investor Class. For the period ended December 31, 2002, the Investor Class
shares paid $1,453 in 12b-1 fees incurred by the Fund.
<page>
Jumper Strategic Advantage Fund
Notes To Financial Statements
December 31, 2002 (Unaudited) - continued
NOTE 4. INVESTMENTS
For the period ended December 31, 2002, purchases and sales of investment
securities, other than short term investments, aggregated $1,183,784 and
$2,203,907, respectively. As of December 31, 2002, the gross unrealized
appreciation for all securities totaled $33,092 and the gross unrealized
depreciation for all securities totaled $146,364 for a net unrealized
depreciation of $113,272. The aggregate cost of securities for federal income
tax purposes at December 31, 2002 was $5,900,080.
NOTE 5. ESTIMATES
Preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
NOTE 6. RELATED PARTY TRANSACTIONS
The Advisor is not a registered broker-dealer of securities and thus does
not receive commissions on trades made on behalf of the Fund. The beneficial
ownership, either directly or indirectly, of more than 25% of the voting
securities of a fund creates a presumption of control of the fund, under Section
2(a)(9) of the Investment Company Act of 1940. As of December 31, 2002, First
Clearing Corp. for the benefit of its customers, beneficially owned 81.44% of
the Investor shares of the Fund and Dawn K. Bullard beneficially owned 31.33% of
the Institutional shares of the Fund.
<page>
ELECTION OF TRUSTEES
At a special meeting of the shareholders held on December 18, 2002, a vote
was held to elect members to serve on the Board of Trustees. The vote tally for
each Trustee is as follows:
<table>
<s> <c> <c> <c> <c>
For Against Withheld Total
Timothy L. Ashburn 11,300,632.473 987.366 4,698,819.489 16,000,439.328
Daniel J. Condon 11,300,632.473 987.366 4,698,819.489 16,000,439.328
Gary E. Hippenstiel 11,300,632.473 987.366 4,698,819.489 16,000,439.328
Stephen A. Little 11,300,632.473 987.366 4,698,819.489 16,000,439.328
Ronald C. Tritschler 11,300,632.473 987.366 4,698,819.489 16,000,439.328
</table>
<page>
Item 2. Code of Ethics. Not applicable to Semi-Annual Reports
Item 3. Audit Committee Financial Expert. Not applicable to Semi-Annual
Reports
Items 4-8. Reserved
Item 9. Controls and Procedures. Not applicable to Reports
Item 10. Exhibits. Certifications required by Item 10(b) of Form N-CSR are
filed herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Ameriprime Funds
By (Signature and Title)
* /s/ Timothy Ashburn
---------------------------------------------------------------------
[Timothy Ashburn, President]
Date 3/3/03
------------------------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)
* /s/ Timothy Ashburn
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[Timothy Ashburn, President]
Date 3/3/03
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By (Signature and Title)
* /s/ Thomas Napurano
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[Thomas Napurano, Chief Financial Officer]
Date 3/3/03
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