<page>
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 Ashburn
Unified Fund Services, Inc.
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: 10/31
-----------------
Date of reporting period: 10/31/03
----------
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.
<page>
AAM Equity Fund
Annual Report
October 31, 2003
Fund Advisor:
Appalachian Asset Management, Inc.
1018 Kanawha Boulevard East
Charleston, West Virginia 25301
Toll Free (888) 905-2283
<page>
Management's Discussion & Analysis
Dear Shareholder:
In review of the past twelve months ended October 31, 2003, the stock
market has seen a nice recovery from its lows. The AAM Equity Fund has been
directly affected by this strong market surge, pushing our net asset value up
over 16.58% in the last twelve months. The majority of the stocks in the Fund
have seen a nice recovery to their earnings and the low interest rate
environment is helping to stimulate the economy.
Our outlook continues to be cautiously optimistic. The recent economic news
and the earnings announcements in October lead us to believe that our current
investment mix is suitable for the next market move. The AAM Equity Fund is
designed to provide long-term value relative to the stock market. As we continue
to follow that objective, we have taken advantage of the recent tax law change
that reduces the tax on dividends and have focused on dividend paying stocks in
our recent portfolio additions.
The financial and technology sectors of the market have led the upward move
in the market over the last 6 months and we continue to maintain our position in
both of these sectors. We also have large weightings in the drug sector and the
energy sector, which have lagged in performance during the recent market move.
However, we are still quite positive long-term for both of these sectors and are
inclined to be patient with their market performance.
Our big focus over the next few months will be to keep an eye on interest
rates and we will continue to monitor the economic recovery. As we approach the
Presidential election next November, all eyes will be on what effect its outcome
will have on the markets over the next four years. As your investment manager,
we will continue to manage the portfolio for long-term growth with a watchful
eye to future developments that might affect the stock market.
Thank you for your ownership of the AAM Equity Fund and we look forward to
serving you in the future.
Knox H. Fuqua
For more information on the Fund, please call 1-888-905-2283 to request a
prospectus. Investing in the Fund involves certain risks that are discussed in
the Fund's prospectus. Please read the prospectus carefully before you invest or
send money.
<page>
Average Annual Total Returns
(for the periods ended October 31, 2003)
Since Inception
1 Year 5 Years June 30, 1998
------------- ---------- ------------------
AAM Equity Fund 16.58% 1.21% 0.02%
S&P 500 Index* 20.78% 0.53% 0.00%
Dow Jones Industrial Average* 19.47% 4.58% 3.59%
*The S&P 500 Index and the Dow Jones Industrial Average Index are widely
recognized unmanaged indices of equity prices and are representative of a
broader market and range of securities than is found in the Fund portfolio.
Performance figures reflect the change in value of equity securities in the
Indices. The Index returns do not reflect expenses, which have been deducted
from the Fund's return.
Growth of $10,000 Investment in the AAM Equity Fund, S&P 500 Index and the
Dow Jones Industrial Average
AAM DJIA S&P 500
6/30/98 10,000.00 10,000.00 10,000.00
10/31/98 9,430.00 9,650.96 9,739.10
4/30/99 11,120.00 12,220.16 11,915.10
10/31/99 11,008.58 12,248.75 12,241.50
4/30/00 11,821.53 12,342.99 13,121.55
10/31/00 11,590.33 12,716.06 12,986.08
4/30/01 10,962.97 12,545.97 11,420.17
10/31/01 9,703.43 10,701.96 9,753.89
4/30/02 10,401.12 11,835.03 9,978.32
10/31/02 8,588.27 10,105.91 8,280.52
4/30/03 8,765.63 10,322.65 8,650.79
10/31/03 10,012.02 12,074.02 10,000.89
The chart above assumes an initial investment of $10,000 made on June 30,
1998 (commencement of operations) and held through October 31, 2003. THE FUND'S
RETURN REPRESENTS PAST PERFORMANCE AND DOES NOT GUARANTEE FUTURE RESULTS. The
returns shown do not reflect deduction of taxes that a shareholder would pay on
Fund distributions or the redemption of Fund shares. Investment returns and
principal values will fluctuate so that your shares, when redeemed, may be worth
more or less than their original purchase price.
<page>
AAM Equity Fund
Schedule of Investments in Securities
October 31, 2003
<table>
<s> <c> <c>
Common Stocks - 94.19% Number of
Shares Value
----------------------------
Beverages - 1.27%
Coca-Cola Co. 4,725 $ 219,240
--------------
Biological Products (No Diagnostic Substances) - 1.69%
Amgen, Inc. (a) 4,725 291,816
--------------
Chemical & Allied Products - 1.86%
Dow Chemical Co. 8,500 320,365
--------------
Computer Communication Equipment - 1.15%
Cisco Systems, Inc. (a) 9,475 198,786
--------------
Computers & Office Equipment - 2.70%
Hewlett-Packard Co. 10,000 223,100
International Business Machines Corp. 2,700 241,596
--------------
464,696
--------------
Crude Petroleum & Natural Gas - 2.20%
EOG Resources, Inc. 9,000 379,260
--------------
Drilling Oil & Gas Wells - 2.22%
Global Santa Fe Corp. 17,000 382,670
--------------
Electromedical & Electrotherapeutic Apparatus - 1.19%
Medtronic, Inc. 4,500 205,065
--------------
Electronic & Other Electrical Equipment (No Computer Equipment) - 1.39%
General Electric Co. 8,225 238,607
--------------
Electronic Computers - 2.12%
Dell Computer Corp. (a) 10,100 364,812
--------------
Finance Services - 2.51%
American Express Co. 5,400 253,422
First Data Corp. 5,000 178,500
--------------
431,922
--------------
Fire, Marine & Casualty Insurance - 5.15%
American International Group, Inc. 6,175 375,625
Berkshire Hathaway, Inc. - Class B (a) 100 259,800
Markel Corp. (a) 1,000 252,390
--------------
887,815
--------------
Food & Kindred Products - 1.75%
Altria Group, Inc. 6,500 302,250
--------------
Hospital & Medical Service Plans - 3.14%
Amerigroup Corp (a) 7,400 309,468
Anthem, Inc. (a) 3,375 230,951
--------------
540,419
--------------
Industrial Inorganic Chemicals - 2.42%
Praxair, Inc. 6,000 417,480
--------------
Life Insurance - 1.50%
Jefferson-Pilot Corp. 5,400 257,796
--------------
Malt Beverages - 2.00%
Anheuser-Busch Co. 7,000 344,820
--------------
</table>
The accompanying notes are an integral part of the financial statements.
<page>
AAM Equity Fund
Schedule of Investments in Securities
October 31, 2003
<table>
<s> <c> <c>
Common Stocks - 94.19% - continued Number
of Shares Value
----------------------------
Miscellaneous Manufacturing Industries - 1.33%
International Game Technology 7,000 $ 229,250
--------------
National Commercial Banks - 5.50%
BB&T Corp. 7,725 298,726
Citigroup, Inc. 8,900 421,860
SunTrust Banks, Inc. 3,375 226,361
--------------
946,947
--------------
Oil & Gas Field Services - 1.47%
Schlumberger Ltd. 5,400 253,638
--------------
Personal Credit Institutions - 2.12%
Capital One Financial Corp. 6,000 364,800
--------------
Petroleum Refining - 6.72%
BP PLC. (c) 7,000 296,660
ChevronTexaco Corp. 3,375 250,762
Exxon Mobil Corp. 8,000 292,640
Murphy Oil Corp. 5,400 318,492
--------------
1,158,554
--------------
Pharmaceutical Preparations - 10.28%
Abbott Laboratories, Inc. 6,000 255,720
AstraZeneca PLC (c) 6,000 286,080
Bristol-Myers Squibb Inc. 8,300 210,571
Johnson & Johnson 8,550 430,322
Pfizer, Inc. 11,100 350,760
Wyeth 5,400 238,356
--------------
1,771,809
--------------
Radio & Tv Broadcasting & Communications Equipment - 2.47%
Nokia Corp. (c) 25,000 424,750
--------------
Radiotelephone Communications - 2.68%
Dominion Resouces, Inc. 4,050 249,480
Vodafone Group PLC. (c) 10,000 211,500
--------------
460,980
--------------
Retail - Auto Dealers & Gasoline Stations - 1.55%
Carmax, Inc. (a) 8,500 267,835
--------------
Retail - Department Stores - 1.30%
Kohl's Corp. (a) 4,000 224,280
--------------
Retail - Drug Stores & Proprietary Stores - 1.62%
Walgreen Co. 8,000 278,560
--------------
Rolling Drawing & Extruding of Nonferrous Metals - 1.81%
Tredegar Corp. 20,000 311,600
--------------
Savings Institutions, Not Federally Chartered - 1.52%
Washington Mutual, Inc. 6,000 262,500
--------------
Security Brokers, Dealers & Flotation Companies - 2.18%
Goldman Sachs Group, Inc. 4,000 375,600
--------------
Semiconductors & Related Devices - 1.92%
Intel Corp. 10,000 330,500
--------------
</table>
The accompanying notes are an integral part of the financial statements.
<page>
AAM Equity Fund
Schedule of Investments in Securities
October 31, 2003
<table>
<s> <c> <c>
Common Stocks - 94.19% - continued Number
of Shares Value
----------------------------
Services - Miscellaneous Amusement & Recreation - 1.26%
Harrah's Entertainment, Inc. 5,000 217,500
--------------
Services - Computer Programming, Data Processing, Etc. - 0.69%
Electronic Data Systems Corp. 5,500 117,975
--------------
Services - Miscellaneous Amusement & Recreation - 1.71%
Walt Disney Co. 13,000 294,320
--------------
Services - Motion Picture & Video Tape Production - 1.30%
Fox Entertainment Group, Inc. - Class A (a) 8,075 223,678
--------------
Services - Prepackaged Software - 3.37%
Microsoft Corp. 16,000 418,400
VERITAS Software Corp. (a) 4,500 162,675
--------------
581,075
--------------
Ship & Boat Building & Repairing - 1.80%
General Dynamics Corp. 3,700 309,690
--------------
Transportation Services - 1.38%
InteractiveCorp (a) 6,500 238,615
--------------
Wholesale - Groceries & Related Products - 1.95%
Sysco Corp. 10,000 336,600
--------------
TOTAL COMMON STOCKS (Cost $14,199,846) 16,228,875
--------------
Short-Term Investments - 5.80% (b) Principal
Amount
----------
Money Market Securities - 5.80%
Huntington Money Market Fund - Investment Shares, 0.20% 999,148 999,148
--------------
TOTAL SHORT-TERM INVESTMENTS (Cost $999,148) 999,148
--------------
TOTAL INVESTMENTS (Cost $15,198,994) - 99.99% $ 17,228,023
--------------
Other assets less liabilities - 0.01% 2,513
--------------
TOTAL NET ASSETS - 100.00% $ 17,230,536
==============
</table>
(a) Non-income producing.
(b) Variable rate security; the coupon rate shown represents the rate at October
31, 2003.
(c) American Depositary Receipts
The accompanying notes are an integral part of the financial statements.
<page>
AAM Equity Fund
Statement of Assets and Liabilities
October 31, 2003
<table>
<s> <c>
ASSETS
Investments in securities, at value
(cost $15,198,994) $ 17,228,023
Dividends and interest receivable 17,286
Receivable for Fund shares sold 7,247
-----------------
Total Assets 17,252,556
-----------------
LIABILITIES
Payable for Fund shares repurchased 2,527
Accrued advisory fees 19,493
-----------------
Total Liabilities 22,020
-----------------
NET ASSETS $ 17,230,536
=================
NET ASSETS CONSIST OF:
Paid in surplus $ 16,138,873
Accumulated undistributed net investment income 45,840
Accumulated net realized gain (loss) from
investment transactions (983,206)
Net unrealized appreciation (depreciation) on investments 2,029,029
-----------------
$ 17,230,536
=================
Shares Outstanding 1,757,439
-----------------
Net asset value, offering,
and redemption price per share $ 9.80
=================
</table>
The accompanying notes are an integral part of the financial statements.
<page>
AAM Equity Fund
Statement of Operations
For the Year Ended October 31, 2003
<table>
<s> <c>
Investment Income:
Dividend Income $ 203,409
Interest Income 1,873
----------------
Total investment income 205,282
----------------
Expenses:
Investment Advisor fees 146,055
Organizational expense 4,077
Trustee expense 2,763
Tax expense 15
----------------
Total expenses before reimbursement by Advisor 152,910
Less: Reimbursement by Advisor (6,840)
----------------
Net Expenses 146,070
----------------
Net Investment Income (Loss) 59,212
----------------
Net Realized and Unrealized Gains (Losses)
on Investments:
Net realized gain (loss) from investment transactions (393,606)
Net change in unrealized appreciation (depreciation)
on investments 2,830,509
----------------
Net realized and unrealized gain (loss) on investments 2,436,903
----------------
Net increase (decrease) in net assets resulting
from operations $ 2,496,115
================
</table>
The accompanying notes are an integral part of the financial statements.
<page>
AAM Equity Fund
Statements of Changes in Net Assets
<table>
<s> <c> <c>
For the Years Ended
October 31, October 31,
2003 2002
---------------- ----------------
Operations:
Net investment income (loss) $ 59,212 $ 63,042
Net realized gain (loss) from investment transactions (393,606) (382,910)
Net change in unrealized appreciation (depreciation)
on investments 2,830,509 (609,650)
Net increase (decrease) in net assets resulting
---------------- ----------------
from operations 2,496,115 (929,518)
---------------- ----------------
Distributions to Shareholders:
Net investment income (70,691) (28,581)
---------------- ----------------
Total dividends and distributions to shareholders (70,691) (28,581)
---------------- ----------------
Capital Share Transactions:
Proceeds from shares sold 10,047,931 9,478,469
Reinvestment of dividends 5,718 21,791
Amount paid for repurchase of shares (3,105,260) (6,056,366)
---------------- ----------------
Net increase (decrease) from capital share transactions 6,948,389 3,443,894
---------------- ----------------
Total increase (decrease) in net assets 9,373,813 2,485,795
---------------- ----------------
Net Assets
Beginning of year 7,856,723 5,370,928
---------------- ----------------
End of year $ 17,230,536 $ 7,856,723
================ ================
Accumulated undistributed net investment income
included in net assets at end of period 45,840 57,319
---------------- ----------------
Capital Share Transactions:
Shares sold 1,173,999 1,005,727
Shares reinvested 664 2,138
Shares redeemed (343,834) (639,167)
---------------- ----------------
Net increase (decrease) from
capital share transactions 830,829 368,698
================ ================
</table>
The accompanying notes are an integral part of the financial statements.
<page>
AAM Equity Fund
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout each year)
<table>
<s> <c> <c> <c> <c> <c>
For the years ended October 31,
---------------------------------------------- -------------- --------------
2003 2002 2001 2000 1999
-------------- -------------- -------------- -------------- --------------
Net asset value, beginning of year $ 8.48 $ 9.63 $ 11.53 $ 10.99 $ 9.43
Income (loss) from investment
operations:
Net investment income (loss) 0.04 0.09 0.05 0.03 0.05
Net gains or (losses) on securities
(both realized and unrealized) 1.36 (1.19) (1.92) 0.55 1.53
-------------- -------------- -------------- -------------- --------------
Total from investment operations 1.40 (1.10) (1.87) 0.58 1.58
-------------- -------------- -------------- -------------- --------------
Less distributions
Dividends (from net investment income) (0.08) (0.05) (0.03) (0.04) (0.02)
Distributions (from capital gains) - - - - -
-------------- -------------- -------------- -------------- --------------
Total dividend and distributions (0.08) (0.05) (0.03) (0.04) (0.02)
-------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- --------------
Net asset value, end of year $ 9.80 $ 8.48 $ 9.63 $ 11.53 $ 10.99
============== ============== ============== ============== ==============
Total return 16.58% -11.49% -16.28% 5.28% 16.74%
Net assets, end of year (000) $ 17,231 $ 7,857 $ 5,371 $ 5,295 $ 4,337
Ratios and Supplemental Data:
Ratio of expenses to average net assets
before reimbursement 1.20% 1.33% 1.30% 1.35% 1.35%
Ratio of expenses to average net assets 1.15% 1.20% 1.15% 1.15% 1.15%
Ratio of net income (loss) to average
net assets before reimbursement 0.41% 0.83% 0.30% 0.02% 0.23%
Ratio of net income (loss) to average
net assets 0.47% 0.95% 0.46% 0.22% 0.43%
Portfolio Turnover Rate 34.26% 20.06% 21.63% 32.79% 27.34%
</table>
The accompanying notes are an integral part of the financial statements.
<page>
AAM Equity Fund
Notes to Financial Statements
October 31, 2003
NOTE 1. ORGANIZATION
AAM Equity Fund (the "Fund") was organized as a diversified series of the
AmeriPrime Funds (the "Trust") on June 30, 1998. The Trust is a registered
open-end investment company, 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 of the Trust (the "Board") 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.
The Fund's investment objective is to provide long-term capital appreciation.
The Fund's advisor is Appalachian Asset 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 which 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 of the Trust.
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
Fund's 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 has determined will represent fair value.
Federal Income Taxes- There is no provision for federal income tax. The
Fund intends to continue to qualify each year as a "regulated investment
company" under Sub-Chapter M of the Internal Revenue Code of 1986, as amended,
by distributing substantially all of its net investment income and net realized
capital gains.
Security Transactions and Related Income- 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.
Dividends and Distributions- The Fund intends to distribute substantially
all of its net investment income as dividends to its shareholders on at least an
annual basis. The Fund intends to distribute its net realized long term capital
gains and its net realized short term capital gains at least once a year. The
treatment for financial reporting purposes of distributions made to shareholders
during the year from net investment income or net realized capital gains may
differ from their ultimate treatment for federal income tax purposes. These
differences are caused primarily by differences in the timing of the recognition
of certain components of income, expense or realized capital gain for federal
income tax purposes. Where such differences are permanent in nature, they are
reclassified in the components of the net assets based on their ultimate
characterization for federal income tax purposes. Any such reclassifications
will have no effect on net assets, results of operations or net asset values per
share of the Fund.
<page>
AAM Equity Fund
Notes to Financial Statements
October 31, 2003 - continued
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund's investment advisor is Appalachian Asset Management, Inc.
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 of the expenses of the Fund except brokerage fees and commissions,
taxes, borrowing costs (such as (a) interest and (b) dividend expenses on
securities sold short), fees and expenses of non-interested 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 at the annual rate of 1.15% of the average value of the 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 fiscal year ended October 31, 2003 the
Advisor earned a fee of $146,055 from the Fund. The Advisor contractually has
agreed through February 28, 2004, to waive and/or reimburse the Fund for fees
and expenses of the non-interested Trustees and any deferred organizational
costs amortized during the period, but only to the extent necessary to maintain
the Fund's total annual operating expenses at 1.15% of average daily net assets.
For the fiscal year ended October 31, 2003, the Advisor reimbursed fees of
$6,840.
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 services, fund accounting and
transfer agency 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. Certain
Trustees and the officers of the Trust are members of management and employees
of Unified, and/or shareholders of Unified Financial Services, Inc.
Unified Financial Securities, Inc. (the "Distributor") acts as the
principal distributor of the Fund's shares. There were no payments made by the
Fund to the Distributor during the fiscal year ended October 31, 2003. A Trustee
and certain officers of the Trust are a director and/or officers of the
Distributor and of Unified Financial Services, Inc. (the parent company of the
Distributor and Unified), and may be deemed to be affiliates of the Distributor.
NOTE 4. INVESTMENTS
For the fiscal year ended October 31, 2003, purchases and sales of
investment securities, other than short-term investments were as follows:
Amount
----------------
Purchases
U.S. Government Obligations $ -
Other 10,794,208
Sales
U.S. Government Obligations $ -
Other 4,056,934
As of October 31, 2003, the net unrealized appreciation of investments for
tax purposes was as follows:
Amount
---------------
Gross Appreciation $ 2,195,340
Gross (Depreciation) (166,311)
--------------
Net Appreciation on Investments $ 2,029,029
===============
At October 31, 2003, the aggregate cost of securities for federal income
tax purposes was $15,198,994.
<page>
AAM Equity Fund
Notes to Financial Statements
October 31, 2003 - continued
NOTE 5. ESTIMATES
Preparation of financial statements in accordance with accounting
principles generally accepted in the United States of America 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. BENEFICIAL OWNERS
The beneficial ownership, either directly or indirectly, of more than 25%
of the voting securities of a mutual fund creates a presumption of control of
the fund, under Section 2(a)(9) of the Investment Company Act of 1940. As of
fiscal year ended October 31, 2003, RSBCO held in aggregate more than 92% of the
Fund for the benefit of clients of Kanawha Trust, advisor of National
Independent Trust Company.
NOTE 7. ORGANIZATION COSTS
Organization costs were amortized on a straight-line basis over a five-year
period that ended in June, 2003.
NOTE 8. CAPITAL LOSS CARRYFORWARDS
At October 31, 2003, the Fund had available for federal tax purposes an
unused capital loss carryforward of $983,206, which is available for offset
against future taxable net capital gains. These loss carryforwards expire as
follows:
Year of Expiration Amount
- --------------------- ------------
2006 $ 15,559
2007 $ 74,070
2009 $117,061
2011 $776,516
NOTE 9. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid during fiscal years 2003 and 2002
was as follows.
2003 2002
------------- ---------------
Ordinary income $ 70,691 $ 28,581
Long-term Capital Gain - -
------------- ---------------
------------- ---------------
Total distributions paid $ 70,691 $ 28,581
============= ===============
As of October 31, 2003, the components of distributable
earnings/(accumulated losses) on a tax basis were as follows:
Undistributed ordinary income/(accumulated losses) $ 45,840
Undistributed long-term capital gain/(accumulated losses) (983,206)
Unrealized appreciation/(depreciation) 2,029,029
--------------
$ 1,091,663
==============
<page>
INDEPENDENT AUDITOR'S REPORT
To the Shareholders and Board of Trustees
AAM Equity Fund
(a series of AmeriPrime Funds)
We have audited the accompanying statement of assets and liabilities of the
AAM Equity Fund, including the schedule of portfolio investments as of October
31, 2003, and the related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the five years in the period
then ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of October 31, 2003, by correspondence with the custodian.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of the
AAM Equity Fund as of October 31, 2003, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the
period then ended, and the financial highlights for each of the five years in
the period then ended, in conformity with accounting principles generally
accepted in the United States of America.
/s/ McCurdy & Associates CPA's, Inc.
McCurdy & Associates CPA's, Inc.
Westlake, Ohio
November 18, 2003
<page>
ELECTION OF TRUSTEES - Unaudited
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
Gary Hippenstiel 11,300,632.473 987.366 4,698,819.489 16,000,439.33
Stephen A. Little 11,300,632.473 987.366 4,698,819.489 16,000,439.33
Daniel Condon 11,300,632.473 987.366 4,698,819.489 16,000,439.33
Ronald C. Tritschler 11,300,632.473 987.366 4,698,819.489 16,000,439.33
Timothy L. Ashburn 11,300,632.473 987.366 4,698,819.489 16,000,439.33
</table>
<page>
TRUSTEES AND OFFICERS (Unaudited)
The Board of Trustees supervises the business activities of the Trust. Each
Trustee serves as a trustee until termination of the Trust unless the Trustee
dies, resigns, retires, or is removed.
The following table provides information regarding each Trustee who is an
"interested person" of the Trust, as defined in the Investment Company Act of
1940, and each officer of the Trust.
<table>
<s> <c> <c> <c>
- ----------------------------- ---------------------------------------- ----------------------------------- --------------------
Number of
Name, Age and Address Position(s) Held with the Fund Complex1 Length of Time Served Portfolios in Fund
Complex1 Overseen
by Trustee
- ----------------------------- ---------------------------------------- ----------------------------------- --------------------
Timothy Ashburn(2) President, Assistant Secretary and President and Secretary since 28
Trustee October 2002; Trustee of
c/o Unified Fund Services, AmeriPrime Advisors Trust since
Inc. November 2002, AmeriPrime Funds
431 N. Pennsylvania St. since December 2002, and Unified
Indianapolis, IN 46204 Series Trust since October 2002
Year of Birth: 1950
- ----------------------------- ---------------------------------------- ----------------------------------- --------------------
</table>
<table>
<s> <c>
- ---------------------------------------------------------------------- --------------------------------------------------------
Principal Occupations During Past 5 Years Other Directorships Held by Trustee
- ---------------------------------------------------------------------- --------------------------------------------------------
Chairman of Unified Financial Services, Inc. since 1989 and Chief Unified Financial Services, Inc. since 1989;
Executive Officer from 1989 to 1992 and 1994 to April 2002; CCMI Funds since July 2003
President of Unified Financial Services from November 1997 to April
2000.
- ---------------------------------------------------------------------- --------------------------------------------------------
</table>
<table>
<s> <c> <c> <c>
- ----------------------------- ---------------------------------------- ----------------------------------- --------------------
Number of
Name, Age and Address Position(s) Held with the Fund Complex1 Length of Time Served Portfolios in Fund
Complex1 Overseen
by Trustee
- ----------------------------- ---------------------------------------- ----------------------------------- --------------------
Ronald C. Tritschler(3) Trustee Trustee of AmeriPrime Funds and 28
Unified Series Trust since
c/o Unified Fund Services, December 2002 and AmeriPrime
Inc. Advisors Trust since November 2002
431 N. Pennsylvania St.
Indianapolis, IN 46204
Year of Birth: 1952
- ----------------------------- ---------------------------------------- ----------------------------------- --------------------
</table>
<table>
<s> <c>
- ---------------------------------------------------------------------- --------------------------------------------------------
Principal Occupations During Past 5 Years Other Directorships Held by Trustee
- ---------------------------------------------------------------------- --------------------------------------------------------
Chief Executive Officer, Director and legal counsel of The Webb CCMI Funds since July 2003
Companies, a national real estate company, from 2001 to present;
Executive Vice President and Director of The Webb Companies from
1990 to 2000; Director, The Lexington Bank, from 1998 to present;
Director, Vice President and legal counsel for The Traxx Companies, an owner and
operator of convenience stores, from 1989 to present.
- ---------------------------------------------------------------------- --------------------------------------------------------
</table>
<table>
<s> <c> <c> <c>
- ----------------------------- ---------------------------------------- ----------------------------------- --------------------
Number of
Name, Age and Address Portfolios in Fund
Complex1 Overseen
Position(s) Held with the Fund Complex1 Length of Time Served by Trustee
- ----------------------------- ---------------------------------------- ----------------------------------- --------------------
Thomas G. Napurano Treasurer and Chief Financial Officer Since October 2002 for AmeriPrime N/A
Funds and AmeriPrime Advisors
c/o Unified Fund Services, Trust; since December 2002 for
Inc. Unified Series Trust
431 N. Pennsylvania St.
Indianapolis, IN 46204
Year of Birth: 1941
- ----------------------------- ---------------------------------------- ----------------------------------- --------------------
</table>
<table>
<s> <c>
- ---------------------------------------------------------------------- --------------------------------------------------------
Principal Occupations During Past 5 Years Other Directorships Held by Trustee
- ---------------------------------------------------------------------- --------------------------------------------------------
Chief Financial Officer and Executive Vice President of Unified N/A
Financial Services, Inc., the parent company of the Trust's
administrator and principal distributor; Director of Unified
Financial Services, Inc. from 1989 to March 2002; Chief Financial
Officer of CCMI Funds since July 2003.
- ---------------------------------------------------------------------- --------------------------------------------------------
</table>
<table>
<s> <c> <c> <c>
- ----------------------------- ---------------------------------------- ----------------------------------- --------------------
Number of
Name, Age and Address Position(s) Held Length of Time Served Portfolios
with Trust in Fund Complex(1)
Overseen by Trustee
- ----------------------------- ---------------------------------------- ----------------------------------- --------------------
Carol Highsmith Secretary Since October 2002 for AmeriPrime N/A
Funds and Ameriprime Advisors
c/o Unified Fund Services, Trust; since December 2002 for
Inc. Unified Series Trust
431 N. Pennsylvania St.
Indianapolis, IN 46204
Year of Birth: 1964
- ----------------------------- ---------------------------------------- ----------------------------------- --------------------
</table>
<table>
<s> <c>
- ---------------------------------------------------------------------- --------------------------------------------------------
Principal Occupations During Past 5 Years Other Directorships Held
- ---------------------------------------------------------------------- --------------------------------------------------------
Employed by Unified Fund Services, Inc. (November 1994 to present) None
- ---------------------------------------------------------------------- --------------------------------------------------------
</table>
(1) The term "Fund Complex" refers to AmeriPrime Funds, AmeriPrime Advisors
Trust, and Unified Series Trust.
(2) Mr. Ashburn is an "interested person" of the Trust because he is an
officer of the Trust. In addition, he may be deemed to be an "interested person"
of the Trust because he is Chairman and a director of Unified Financial
Securities, Inc., the principal underwriter for certain funds in the Fund
Complex.
(3) Mr. Tritschler may be deemed to be an "interested person" of the Trust
because he has an ownership interest in Unified Financial Services, Inc., the
parent of the principal underwriter for certain funds in the Fund Complex.
<page>
The following table provides information regarding each Trustee who is not
an "interested person" of the Trust, as defined in the Investment Company Act of
1940.
<table>
<s> <c> <c> <c>
- ------------------------------ ---------------------------------- ----------------------- -------------------------
Number of Portfolios in
Position(s) Held with the Fund Fund Complex1
Complex1 Overseen
Name, Age and Address Length of Time Served by Trustee
- ------------------------------ ---------------------------------- ----------------------- -------------------------
Gary E. Hippenstiel Trustee Trustee of AmeriPrime 28
Funds since 1995,
c/o Unified Fund Services, AmeriPrime Advisors
Inc. Trust since July 2002
431 N. Pennsylvania St. and Unified Series
Indianapolis, IN 46204 Trust since December
2002
Year of Birth: 1947
- ------------------------------ ---------------------------------- ----------------------- -------------------------
</table>
<table>
<s> <c>
- ----------------------------------------------------------------- -------------------------------------------------
Principal Occupations During Past 5 Years Other Directorships Held by Trustee
- ----------------------------------------------------------------- -------------------------------------------------
Director, Vice President and Chief Investment Officer of Legacy CCMI Funds since July 2003
Trust Company, N.A. since 1992.
- ----------------------------------------------------------------- -------------------------------------------------
</table>
<table>
<s> <c> <c> <c>
- ------------------------------ ---------------------------------- ----------------------- -------------------------
Position(s) Held with the Fund Length of Time Served Number of
Complex1 Portfolios in
Name, Age and Address Fund Complex1
Overseen by Trustee
- ------------------------------ ---------------------------------- ----------------------- -------------------------
Stephen A. Little Trustee Trustee of AmeriPrime 28
Funds and Unified
c/o Unified Fund Services, Series Trust since
Inc. December 2002 and
431 N. Pennsylvania St. AmeriPrime Advisors
Indianapolis, IN 46204 Trust since November
2002
Year of Birth: 1946
- ------------------------------ ---------------------------------- ----------------------- -------------------------
</table>
<table>
<s> <c>
- ----------------------------------------------------------------- -------------------------------------------------
Principal Occupations During Past 5 Years Other Directorships Held by Trustee
- ----------------------------------------------------------------- -------------------------------------------------
President and founder, The Rose, Inc., a registered investment CCMI Funds since July 2003
advisor, since April 1993.
- ----------------------------------------------------------------- -------------------------------------------------
</table>
<table>
<s> <c> <c> <c>
- ------------------------------ ---------------------------------- ----------------------- -------------------------
Position(s) Held with the Fund Number of
Portfolios in
Name, Age and Address Complex1 Length of Time Served Fund Complex1 Overseen
by Trustee
- ------------------------------ ---------------------------------- ----------------------- -------------------------
Daniel Condon Trustee Trustee of AmeriPrime 28
Funds and Unified
c/o Unified Fund Services, Series Trust since
Inc. December 2002 and
431 N. Pennsylvania St. AmeriPrime Advisors
Indianapolis, IN 46204 Trust since November
2002
Year of Birth: 1950
- ------------------------------ ---------------------------------- ----------------------- -------------------------
</table>
<table>
<s> <c>
- ----------------------------------------------------------------- -------------------------------------------------
Principal Occupations During Past 5 Years Other Directorships Held by Trustee
- ----------------------------------------------------------------- -------------------------------------------------
Vice President and General Manager, International Crankshaft CCMI Funds since July 2003
Inc., an automotive equipment manufacturing company, 1990 to present; Trustee,
The Unified Funds, from 1994 to 2002; Trustee, Star Select Funds, a REIT mutual
fund, from 1997 to 2000.
- ----------------------------------------------------------------- -------------------------------------------------
</table>
1 The term "Fund Complex" refers to AmeriPrime Funds, AmeriPrime Advisors
Trust and Unified Series Trust.
PROXY VOTING
A description of the policies and procedures that the Fund uses to
determine how to vote proxies relating to portfolio securities is available
without charge upon request by calling the Fund at (888) 905-2283.
<page>
Item 2. Code of Ethics.
(a) As of the end of the period covered by this report, the registrant has
adopted a code of ethics that applies to the registrant's principal executive
officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions, regardless of whether these
individuals are employed by the registrant or a third party.
(b) For purposes of this item, "code of ethics" means written standards
that are reasonably designed to deter wrongdoing and to promote:
(1) Honest and ethical conduct, including the ethical handling of actual or
apparent conflicts of interest between personal and professional relationships;
(2) Full, fair, accurate, timely, and understandable disclosure in reports
and documents that a registrant files with, or submits to, the Commission and in
other public communications made by the registrant;
(3) Compliance with applicable governmental laws, rules, and regulations;
(4) The prompt internal reporting of violations of the code to an
appropriate person or persons identified in the code; and
(5) Accountability for adherence to the code.
(c) Amendments: During the period covered by the report, there have not
been any amendments to the provisions of the code of ethics.
(d) Waivers: During the period covered by the report, the registrant has
not granted any express or implicit waivers from the provisions of the code of
ethics.
Item 3. Audit Committee Financial Expert.
(a) The registrant's Board of Trustees has determined that the registrant
does not have an audit committee financial expert. The committee members and the
full Board considered the possibility of adding a member that would qualify as
an expert. The audit committee determined that, although none of its members
meet the technical definition of an audit committee financial expert, the
committee has sufficient financial expertise to adequately perform its duties
under the Audit Committee Charter without the addition of a qualified expert.
Item 4. Principal Accountant Fees and Services. Not applicable
Item 5. Audit Committee of Listed Companies. Not applicable.
Item 6. Reserved.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Funds.
Not applicable.
Item 8. Reserved.
Item 9. Controls and Procedures.
(a) Based on an evaluation of the registrant's disclosure controls and
procedures as of January 9, 2004, the disclosure controls and procedures are
reasonably designed to ensure that the information required in filings on Forms
N-CSR is recorded, processed, summarized, and reported on a timely basis.
(b) There were no significant changes in the registrant's internal control
over financial reporting that occurred during the registrant's last fiscal
half-year that have materially affected, or are reasonably likely to materially
affect, the registrant's internal control over financial reporting.
Item 10. Exhibits.
(a)(1) Code is filed herewith
(a)(2) Certifications required by Item 10(a)(2) of Form N-CSR are filed
herewith.
(b) Certification required by Item 10(b) of Form N-CSR is 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 /s/ Timothy Ashburn
Timothy Ashburn, President
Date 1/9/04
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 /s/ Timothy Ashburn
Timothy Ashburn, President
Date 1/9/04
By /s/ Thomas G. Napurano
Thomas Napurano, Treasurer and Chief Financial Officer
Date 1/9/04
--------------------------------
<page>