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 811-09541
------------------
AmeriPrime Advisors Trust
(Exact name of registrant as specified in charter)
Unified Fund Services, Inc.
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: 7/31
------------
Date of reporting period: 1/31/04
-----------
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.
Item 1. Reports to Stockholders.
<page>
Polynous Growth Fund
Investment Objective:
Long-term Capital
Appreciation
SEMI-ANNUAL REPORT
January 31, 2004
<page>
This page intentionally left blank.
<page>
Summary of Semi-Annual Period August 1, 2003 through January 31, 2004
Dear Shareholder,
The Polynous Growth Fund's latest semi-annual period resulted in continued
positive performance for its shareholders. Please refer to the management
discussion in the following section for a commentary on the Fund's performance
as this shareholder letter will contain more general commentary on overall
economic and stock market conditions.
The overall stock market also continued to have a significant recovery
during the latest semi-annual period. The strong upward movement of the stock
market was based on building confidence that the U.S. economy is now in a
sustainable recovery and the positive liquidity effects of low interest rates
and relatively high money supply growth. The significant upward movement of
market indexes over the last year may, however, result in a short-term period of
market consolidation.
Aside from the stock market being likely to experience a period of
consolidation after such strong gains, there are also some other factors of
concern to many investors. Although the economic recovery has been relatively
strong in the growth of overall economic activity, there is also, unfortunately,
a very notable lag in employment growth. On one hand the overall unemployment
rate (less than six percent) is not very high relative to typical peak
unemployment rates of seven to eight percent at the beginning of a new growth
cycle. On the other hand, there has been almost no growth in aggregate
employment.
The economic recovery in the early 1990's was also notable for the lack of
employment growth relative to previous recoveries but this economic recovery has
even lagged the minimal employment growth we experienced during that period.
Although there is a lot of political rhetoric during an election year about the
movement of U.S. jobs to lower cost foreign locations, I believe the reasons for
the low employment growth are much more complex. The complexity is a combination
of rapid productivity growth where existing employees are more productive due to
increasingly sophisticated deployment of technology, much more disciplined
corporate management in general, and also a low nominal growth rate environment
due to very low inflation.
The increased productivity from deploying more advanced technologies in the
workplace results partly from more sophisticated work processes enabled by
continually developing software applications and partly from the continual
decreases in the cost of computing and communications equipment. The basic
building blocks of computing and communications equipment, semiconductor
circuits, have declined in price by 20 to 25 percent annually for approximately
the last 30 years. Since employees do not typically decline in price, a lot of
the slow employment growth is from the pure economics that deploying technology
equipment is much more economically effective than employing another employee.
The more disciplined corporate management is partly a result of the more
sophisticated information systems that allow more intensive real-time management
of their businesses and partly from the unrelenting competitive pressures
stemming from their peers using similar management practices. With the very
efficient capital markets in the U.S. that are continually searching for the
best corporate performers to receive relatively higher allocations of capital,
it is a pretty serious decision today for a corporation to increase their cost
base by hiring more employees and possibly be perceived as having higher costs
than their competitors.
The more subtle factor affecting employment growth is what I have described
above as a low nominal growth rate. Inflation is very low, currently at around
only one percent, versus historical inflation rates averaging three to four
percent and occasional periods where inflation has been six to eight percent.
Nominal growth is the sum of real growth and the
<page>
inflation rate and while current real growth of four to five percent is in
line with historical averages, the resulting nominal growth rate of around five
percent is much lower than typical nominal growth rates of eight to ten percent.
In other words, although the economy is having a real recovery in statistical
terms, the overall rates of growth just do not feel very exciting to most people
which may result in another potential depressant on the rate of employment
growth.
The factors listed above may all sound fairly negative for the prospects of
exciting employment growth, but I believe that the combination of factors may
also be viewed as one of the strengths of the U.S. economy. A much disciplined
economy that actively deploys innovative tools for managing its businesses will
continue to be a very productive economy in my opinion. The potential personal
misfortune of not benefiting from an aggressive hiring environment is
unfortunate if someone needs to find employment but with a total unemployment
rate of less than six percent the overall economy is not currently experiencing
a significant amount of economic pain. Ultimately, the tendency to continually
deploy advanced tools for managing businesses will result in higher
profitability that will also result in higher employment growth.
In the interim, however, the lack of employment growth will probably be a
somewhat weighty factor hanging over the stock market. Another weighty factor,
however, is the increased scrutiny on every other economic statistic that is
released given the uncertainties stemming from the employment situation. The
potential volatility from such scrutiny will probably be frustrating for the
stock market throughout the spring and early summer. Within a few months,
however, there will probably be more confidence about the state of the current
economic recovery. Unfortunately, that confidence may be obscured by what could
be one of the nastiest presidential election campaigns in history. It is not my
place to comment on the positions of the various political parties, but it is
probably accurate to say that one party will continually claim that things are
being mismanaged and the other party will continually claim that the other
candidate is seriously flawed, and the end result will be that no one feels very
good and the stock market may also reflect such a general sense of malaise.
Our strategy in such an environment will not be much different than usual,
however, which is to use our internally generated fundamental research to
opportunistically invest in attractively priced growth stocks. The choppy
environments that I am essentially predicting will probably give us a lot of
opportunities, and so I look forward to attempting to continue the Fund's
attractive performance.
Yours truly,
/s/ Kevin L. Wenck
Kevin L. Wenck, President
The views expressed are those of the author. Views expressed are subject to
change based on market and other conditions. This report contains
forward-looking statements, and actual results may differ materially from those
projected in such statements.
For prospectus and more information, including charges and expenses, call
toll-free 1-800-528-8069. 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 Polynous Securities, LLC.
One Pine Street, Suite 2208
San Francisco, CA 94111
Member NASD,SIPC
<page>
Management Discussion & Analysis
As noted in the main shareholder letter, the Fund appreciated 13.06% during
the six month period ended January 31, 2004. This performance is attractive in
absolute terms but it did trail the performance of major market indexes. The S&P
500 Index that consists mainly of large companies appreciated 15.21% during the
period and the Russell 2000 Index that consists of smaller companies appreciated
22.67%. The relatively large appreciation of the Russell 2000 Index was due to a
lot of speculative investment activity that will often occur during the later
phases of a market rally. It is interesting to note that the best performing
groups of companies for the entire year in 2003 in the stock market were
companies that were losing money from their business operations. As economic
sentiment started to improve later in the year, investors began to speculatively
throw large amounts of money at such companies on the bet that they might become
profitable in 2004. The disciplined investment process used by the Fund results
in such types of companies appearing to be of poor quality and so the Fund is
limited in its ability to own such companies regardless of their currently
attractive stock market performance.
At the end of the quarter you may also note that the Fund is only about 75%
invested in common stocks. After the speculative environment of the previous six
months, I believed that it would be prudent to be more conservatively invested
in case there was a period of market softness such as what has now occurred
throughout most of February and March. You may also note that the one large
position in the Fund that had almost quadrupled in the last year (Optical Cable
Corporation) has now been decreased to about 15 percent of the portfolio. As of
mid-March, the position has also been further decreased to less than six percent
of the portfolio, which is much more in line with the historical position sizes
that have typically been used by the Fund.
Investment Results
<table>
<s> <c> <c> <c> <c> <c>
Average Annual Total Returns
(for periods ended January 31, 2004)
Since Inception
One Month Six Months One Year Five Year (August 12, 1996)
-------------- ------------- ----------- ------------- --------------------
Polynous Growth Fund* 6.42% 13.06% 63.15% 1.57% 2.02%
Polynous Growth Fund* 1.67% 8.01% 55.70% 0.64% 1.39%
(after deduction of sales load)
S&P 500 Index** 1.84% 15.21% 34.53% -1.03% 8.99%
Russell 2000 Index** 4.34% 22.67% 58.03% 9.60% 9.42%
</table>
The rates of return will vary and the principal value of an investment will
fluctuate. Shares, if redeemed, may be worth more or less than their original
cost. Performance data quoted does not reflect the deduction of taxes that an
investor may pay on Fund distributions or the redemption of Fund shares. Past
performance is not indicative of future investment results. Due to market
volatility, current performance may be higher or lower than the performance
shown above. The Fund's advisor waived fees and/or reimbursed expenses, which
improved the Fund's performance.
* Return figures reflect any change in price per share and assume the
reinvestment of all distributions.
** The Indices are unmanaged benchmarks that assume reinvestment of all
distributions and excludes the effect of taxes and fees. The S&P 500 and Russell
2000 are widely recognized unmanaged indices of equity prices and are
representative of a broader market and range of securities than are found in the
Fund's portfolio.
<page>
Comparison of the Growth of a $10,000 Investment in the Polynous Growth
Fund, the S&P 500 Index and the Russell 2000 Index
Polynous
Growth S&P 500 Russell 2000
Fund Index Index
($11,082) ($19,035) ($19,596)
--------------------------------------------
8/12/96 9,546.54 10,000.00 10,000.00
7/31/97 11,435.83 14,609.87 12,871.26
7/31/98 11,257.75 17,426.23 13,169.17
7/31/99 10,308.28 20,947.64 14,145.12
7/31/00 8,789.26 22,826.70 16,092.65
7/31/01 9,677.74 19,557.19 15,817.37
7/31/02 5,693.91 14,934.06 12,976.59
7/31/03 9,801.94 16,522.63 15,974.92
1/31/04 11,082.11 19,035.21 19,596.34
The chart above assumes an initial investment of $10,000 made on August 12,
1996 (commencement of Fund operations) and held through January 31, 2004. 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>
Polynous Growth Fund
Schedule of Investments
January 31, 2004 (Unaudited)
<table>
<s> <c> <c>
Common Stocks - 75.27% Shares Value
------------- -------------
Arrangement Of Transportation Of Freight & Cargo - 2.40%
EGL, Inc. (a) 11,800 $ 189,390
-------------
Crude Petroleum & Natural Gas - 1.94%
Cimarex Energy Co. (a) 5,800 153,004
-------------
Drawing & Insulating of Nonferrous Wire - 14.69%
Optical Cable Corp. (a) 145,300 1,160,947
-------------
Electromedical & Electrotherapeutic Apparatus - 1.93%
CardioDynamics International Corp. (a) 23,500 152,750
-------------
Hospital & Medical Service Plans - 5.66%
Anthem, Inc. (a) 2,800 228,984
First Health Group Corp. (a) 11,000 218,020
-------------
447,004
-------------
In Vitro & In Vivo Diagnostic Substances - 4.13%
Able Laboratories (a) 11,000 192,500
Meridian Bioscience, Inc. 11,600 133,980
-------------
326,480
-------------
Manifold Business Forms - 2.35%
Ennis Business Forms 11,700 186,030
-------------
Men's & Boys' Furnishings, Work Clothing, & Allied Garments - 2.34%
Quiksilver, Inc. (a) 11,200 184,576
-------------
National Commercial Banks - 4.73%
First Commonwealth Financial Corp. 13,000 186,940
Susquehanna Bancshares, Inc. 7,400 187,146
-------------
374,086
-------------
Oil & Gas Field Machinery & Equipment - 2.22%
W-H Energy Services, Inc. (a) 11,100 175,713
-------------
Optical Instruments & Lenses - 1.03%
Meade Instruments Corp. (a) 22,600 81,586
-------------
</table>
See accompanying notes which are an integral part of the financial statements.
<page>
Polynous Growth Fund
Schedule of Investments - continued
January 31, 2004 (Unaudited)
<table>
<s> <c> <c>
Common Stocks - 75.27% - continued Shares Value
------------- -------------
Pharmaceutical Preparations - 2.87%
King Pharmaceuticals, Inc. (a) 13,600 $ 226,848
-------------
Plastic Materials, Synthetic Resins & Nonvulcan Elastomers - 2.49%
A. Schulman, Inc. 11,300 196,620
-------------
Retail - Apparel & Accessory Stores - 1.11%
Jos. A. Bank Clothiers, Inc. (a) 2,000 87,780
-------------
Retail - Jewelry Stores - 2.50%
Friedmans, Inc. 26,900 197,446
-------------
Retail - Radio TV & Consumer Electronics Stores - 2.53%
Conn's, Inc. (a) 12,500 200,000
-------------
Search, Detection, Navigation, Guidance, Aeronautical Systems - 2.76%
DRS Technologies, Inc. (a) 7,600 218,196
-------------
Semiconductors & Related Devices - 2.40%
MEMC Electronic Materials, Inc. (a) 18,000 189,360
-------------
Services - Educational Services - 2.61%
INVESTools, Inc. (a) 86,500 205,870
-------------
Services - Management Consulting Services - 0.67%
Exult, Inc. (a) 8,400 53,004
-------------
Services - Miscellaneous Health & Allied Services - 2.43%
Prime Medical Services, Inc (a) 34,900 191,950
-------------
State Commercial Banks - 4.75%
Provident Bankshares Corp. 6,200 190,588
S&T Bancorp, Inc. 6,100 184,525
-------------
375,113
-------------
Trucking (No Local) - 2.38%
Heartland Express, Inc. 8,600 187,824
-------------
</table>
See accompanying notes which are an integral part of the financial statements.
<page>
Polynous Growth Fund
Schedule of Investments - continued
January 31, 2004 (Unaudited)
<table>
<s> <c> <c>
Common Stocks - 75.27% - continued Shares Value
------------- -------------
Wholesale - Drugs, Proprietaries & Druggists' Sundries - 2.35%
Axcan Pharma Inc. (a) 10,300 $ 185,400
-------------
TOTAL COMMON STOCKS (Cost $5,163,566) 5,946,977
-------------
Private Placements - 0.12%
Gene Logic Escrow Holding (Note 4) 1,250 9,503
-------------
TOTAL PRIVATE PLACEMENTS (Cost $5,000) 9,503
-------------
Warrants - 0.00%
UQM Technologies 4,600 -
-------------
TOTAL WARRANTS (Cost $0) -
-------------
Principal
U.S. Treasury & Agency Obligations - 25.30% Amount Value
------------- -------------
U.S. Treasury Bill, 0.00%, 2/05/2004 $ 500,000 499,964
U.S. Treasury Bill, 0.00%, 2/12/2004 500,000 499,910
U.S. Treasury Bill, 0.00%, 2/19/2004 500,000 499,833
U.S. Treasury Bill, 0.00%, 2/26/2004 500,000 499,747
-------------
TOTAL U.S. TREASURY & AGENCY OBLIGATIONS (Cost $1,999,454) 1,999,454
-------------
Money Market Securities - 4.93%
Huntington Money Market Fund - Investment Shares, 0.20% (b) 389,739 389,739
-------------
TOTAL MONEY MARKET SECURITIES (Cost $389,739) 389,739
-------------
TOTAL INVESTMENTS (Cost $7,557,759) - 105.62% $ 8,345,673
-------------
Liabilities in excess of other assets - (5.62%) (444,312)
-------------
TOTAL NET ASSETS - 100.00% $ 7,901,361
=============
</table>
- -------------
(a) Non-income producing.
(b) Variable rate security; the coupon rate shown represents the rate at January
31, 2004.
See accompanying notes which are an integral part of the financial statements.
<page>
Polynous Growth Fund
Statement of Assets and Liabilities
January 31, 2004 (Unaudited)
<table>
<s> <c>
Assets
Investments in securities, at value (cost $7,557,759) $ 8,345,673
Interest receivable 83
Dividends receivable 6,120
Receivable for investments sold 200,057
Receivable for fund shares sold 14,348
Other assets 164
---------------
Total assets 8,566,445
---------------
Liabilities
Accrued advisory fees 1,051
Accrued 12b-1 fees 1,622
Other payables and accrued expenses 11,155
Payable for investments purchased 651,256
---------------
Total liabilities 665,084
---------------
Net Assets $ 7,901,361
===============
Net Assets consist of:
Paid in capital 12,769,602
Accumulated net investment income (loss) (58,760)
Accumulated net realized gain (loss) on investments (5,597,395)
Net unrealized appreciation (depreciation) on investments 787,914
---------------
Net Assets $ 7,901,361
===============
Net Asset Value
Net Asset value per share ($7,901,361 / 681,246) $ 11.60
===============
Offering price per share ($11.60 / 0.955) $ 12.15
===============
Redemption price per share ($11.60 * 0.99) (Note 8) $ 11.48
===============
</table>
See accompanying notes which are an integral part of the financial statements.
<page>
Polynous Growth Fund
Statement of Operations
Six months ended January 31, 2004 (Unaudited)
<table>
<s> <c>
Investment Income
Dividend income $ 6,143
Interest income 7,784
-------------
Total Income 13,927
-------------
Expenses
Investment advisor fee 38,256
Administration expenses 13,964
Transfer agent expenses 10,329
12b-1 fee 9,564
Fund accounting expenses 6,963
Legal expenses 6,963
Auditing expenses 3,481
Registration expenses 3,406
Custodian expenses 2,793
Printing expenses 2,793
Miscellaneous expenses 1,377
Pricing expenses 1,262
Trustee expenses 1,033
Insurance expenses 842
-------------
Total Expenses 103,026
Waived expenses (a) (30,339)
-------------
Net operating expenses 72,687
-------------
Net Investment Income (Loss) (58,760)
-------------
Realized & Unrealized Gain (Loss)
Net realized gain (loss) on investment securities 533,609
Change in net unrealized appreciation (depreciation)
on investment securities 418,516
-------------
Net realized and unrealized gain (loss) on investment securities 952,125
-------------
Net increase (decrease) in net assets resulting from operations $ 893,365
=============
</table>
(a) See note 3 to the financial statements.
See accompanying notes which are an integral part of the financial statements.
<page>
Polynous Growth Fund
Statements of Changes In Net Assets
<table>
<s> <c> <c>
Six months ended
January 31, 2004 Year ended
(Unaudited) July 31, 2003
-------------------- ----------------
Operations
Net investment income (loss) $ (58,760) $ (2,884)
Net realized gain (loss) on investment securities 533,609 (662,516)
Change in net unrealized appreciation (depreciation) 418,516 3,827,659
-------------------- ----------------
Net increase (decrease) in net assets resulting from operations 893,365 3,162,259
-------------------- ----------------
Capital Share Transactions
Proceeds from shares sold 295,940 2,229,207
Amount paid for shares repurchased (1,524,529) (1,303,253)
-------------------- ----------------
Net increase (decrease) in net assets resulting
from share transactions (1,228,589) 925,954
-------------------- ----------------
Total Increase (Decrease) in Net Assets (335,224) 4,088,213
-------------------- ----------------
Net Assets
Beginning of period 8,236,585 4,148,372
-------------------- ----------------
End of period $ 7,901,361 $ 8,236,585
==================== ================
Accumulated net investment income (loss) $ (58,759) $ -
-------------------- ----------------
Capital Share Transactions
Shares sold 27,498 262,953
Shares repurchased (148,827) (156,173)
-------------------- ----------------
Net increase (decrease) from capital transactions (121,329) 106,780
==================== ================
</table>
See accompanying notes which are an integral part of the financial statements.
<page>
Polynous Growth Fund
Financial Highlights
<table>
<s> <c> <c> <c> <c> <c> <c>
Six months ended
Jan. 31, 2004 Year ended Year ended Year ended Year ended Year ended
(Unaudited) July 31, 2003 July 31, 2002 July 31, 2001 July 31, 2000 July 31, 1999
--------------- ------------ ------------ ------------ ------------ ------------
Selected Per Share Data
Net asset value, beginning of period $ 10.26 $ 5.96 $ 10.13 $ 9.20 $ 10.79 $ 12.85
--------------- ------------ ------------ ------------ ------------ ------------
Income from investment operations
Net investment income (loss) (0.08) 0.00 (0.15) (0.01) (0.12) (0.18)
Net realized and unrealized gain (loss) 1.42 4.30 (4.02) 0.94 (1.47) (1.01)
--------------- ------------ ------------ ------------ ------------ ------------
Total from investment operations 1.34 4.30 (4.17) 0.93 (1.59) (1.19)
--------------- ------------ ------------ ------------ ------------ ------------
Less Distributions to Shareholders:
From net investment income - - - - - -
From net realized gains - - - - - (0.87)
--------------- ------------ ------------ ------------ ------------ ------------
Total distributions - - - - - (0.87)
--------------- ------------ ------------ ------------ ------------ ------------
Net asset value, end of period $ 11.60 $ 10.26 $ 5.96 $ 10.13 $ 9.20 $ 10.79
=============== ============ ============ ============ ============ ============
Total Return 13.06% (a) 72.15% (41.16)% 10.09% (14.74)% (8.34)%
Ratios and Supplemental Data
Net assets, end of period (000) $ 7,901 $ 8,237 $ 4,148 $ 7,631 $ 7,593 $ 16,702
Ratio of expenses to average net assets 1.90% (b) 1.90% 1.90% 1.90% 1.90% 1.90%
Ratio of expenses to
average net assets before waiver
& reimbursement 2.69% (b) 3.44% 3.17% 4.42% 4.09% 2.41%
Ratio of net investment income to
average net assets (1.54)%(b) (0.05)% (1.57)% (0.12)% (0.95)% (1.42)%
Ratio of net investment income to
average net assets before waiver
& reimbursement (2.33)%(b) (1.60)% (2.83)% (2.64)% (3.14)% (1.93)%
Portfolio turnover rate 238.05% 194.90% 405.11% 494.19% 261.88% 102.53%
</table>
- ---------------------
(a) Not annualized.
(b) Annualized.
See accompanying notes which are an integral part of the financial statements.
<page>
Polynous Growth Fund
Notes to the Financial Statements
January 31, 2004
(Unaudited)
NOTE 1. ORGANIZATION
The Polynous Growth Fund (the "Fund") was organized as a diversified series
of AmeriPrime Advisors Trust (the "Trust") on February 8, 2001. The Trust is an
open-end investment company established under the laws of Ohio by an Agreement
and Declaration of Trust dated August 3, 1999 (the "Trust Agreement"). The Trust
Agreement permits the 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 Trustees. On March 30, 2001, the
Fund acquired all of the assets and assumed all of the liabilities of the
Polynous Growth Fund, a series of the Polynous Trust in a tax-free
reorganization. The investment objective of the Fund is long-term capital
appreciation. The investment advisor of the Fund is Polynous 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 - Equity 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. Securities that are traded on any stock
exchange are generally valued by the pricing service at the last quoted sale
price. Lacking a last sale price, an exchange traded security is generally
valued by the pricing service at its last bid price. Securities traded in the
NASDAQ over-the-counter market are generally valued by the pricing service at
the NASDAQ Official Closing Price. When market quotations are not readily
available, when the Advisor determines that the market quotation or the price
provided by the pricing service does not accurately reflect the current market
value or when restricted or illiquid 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
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, 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.
<page>
Polynous Growth Fund
Notes to the Financial Statements
January 31, 2004 - continued
(Unaudited)
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - continued
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 subchapter 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.
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund retains Polynous Capital Management, Inc. to manage the Fund's
investments. Under the terms of the management agreement, (the "Agreement"), the
Advisor manages the Fund's investments subject to approval of the Board. As
compensation for its management services, the Fund is obligated to pay the
Advisor a fee computed and accrued daily and paid monthly at an annual rate of
1.00% on net assets of $100 million and below; 0.75% on the next $150 million;
0.60% on the next $250 million; 0.50% on the next $500 million; and 0.40% on all
net assets amounts above $1 billion. The Advisor earned fees of $38,256 from the
Fund for the six months ended January 31, 2004. The Advisor has contractually
agreed to reduce some, or all, of its management fees and/or reimburse Fund
expenses to keep total annual operating expenses at or below 1.90% through
November 30, 2004. For the six months ended January 31, 2004, the Advisor was
obligated to waive and/or reimburse expenses of $30,339.
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, including all
regulatory reporting and necessary office equipment and personnel. For those
services Unified receives a monthly fee from the Fund equal to an annual rate of
0.10% of the Fund's average daily net assets under $50 million, 0.07% of the
Fund's average daily net assets from $50 million to $100 million, and 0.05% of
the Fund's average daily net assets over $100 million (subject to a minimum fee
of $2,500 per month). For the six months ended January 31, 2004, Unified earned
$13,964 from the Fund.
<page>
Polynous Growth Fund
Notes to the Financial Statements
January 31, 2004 - continued
(Unaudited)
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - continued
The Fund also retains Unified to act as the Fund's transfer agent and fund
accountant. For its services as transfer agent, Unified receives a monthly fee
from the Fund of $1.25 per shareholder (subject to various minimum monthly fees,
the maximum being $1,250) for these transfer agency services. For the six months
ended January 31, 2004, Unified received fees of $7,536 from the Fund for
transfer agent services provided to the Fund and $2,793 from Fund in
reimbursement for out-of-pocket expenses incurred in providing transfer agent
services to the Fund. For its services as fund accountant, Unified receives an
annual fee from the Fund equal to 0.05% of the Fund's assets up to $50 million,
0.04% of the Fund's assets from $50 million to $100 million, and 0.03% of the
Fund's assets from $100 million to $150 million, and 0.02% of the Fund's net
assets over $150 million (subject to various monthly minimum fees, the maximum
being $1,667). For the six months ended January 31, 2004, Unified earned $6,963
from the Fund. Certain Trustees and the officers of the Trust are members of
management and employees of Unified, and/or shareholders of Unified Financial
Services, Inc.
Polynous Securities, LLC (the "Distributor"), an affiliate of the Advisor,
serves as principal underwriter for the Fund. Under the terms of the
Underwriting Agreement between the Trust and the Distributor, the Distributor
earned $1,223 from underwriting and broker commissions on the sale of shares of
the Fund during the six months ended January 31, 2004. Kevin L. Wenck may be
deemed to be an affiliate of the Distributor.
The Fund has adopted a distribution plan in accordance to Rule 12b-1 under
the Investment Company Act of 1940 under which the Fund will pay a distribution
fee at a rate of .25% per annum of the average daily net assets to reimburse the
Distributor for expenses in distributing shares and promoting sales of the Fund.
For the six months ended January 31, 2004, the Fund paid the Distributor $9,564
for distribution costs incurred.
NOTE 4. RESTRICTED SECURITIES
The private placement shares of Gene Logic, Inc. is a result of an
acquisition of a previous stock held by the Fund, TherImmune Research
Corporation. The acquisition was completed on April 1, 2003. The shares, as
reported on the Schedule of Investments, and cash received for the acquisition
are held in escrow to meet claims and expenses as set forth in the acquisition
agreement. These amounts will be distributed after the expiration of the
18-month escrow period. The escrow shares have been valued at $7.60 per share
pursuant to procedures adopted by the Board of Trustees.
NOTE 5. INVESTMENTS
For the six months ended January 31, 2004, purchases and sales of
investment securities, other than short-term investments and short-term U.S.
government obligations were as follows:
Purchases
U.S. Government Obligations $ -
Other 12,996,477
<page>
Polynous Growth Fund
Notes to the Financial Statements
January 31, 2004 - continued
(Unaudited)
NOTE 5. INVESTMENTS - continued
Sales
U.S. Government Obligations $ -
Other 12,707,246
As of January 31, 2004, the net unrealized appreciation of investments for
tax purposes was as follows:
Gross Appreciation $ 1,010,811
Gross (Depreciation) (222,897)
---------------
Net Appreciation
on Investments $ 787,914
===============
At January 31, 2004, the aggregate cost of securities for federal income
tax purposes was $7,557,759.
NOTE 6. 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 7. 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 January 31,
2004, Delaware Charter Guarantee & Trust held 32.41% of the Fund in an omnibus
account for the benefit of others.
<page>
Polynous Growth Fund
Notes to the Financial Statements
January 31, 2004 - continued
(Unaudited)
NOTE 8. CONTINGENT DEFERRED SALES CHARGE
There is no initial sales charge on purchase of shares of $500,000 or more;
however, the dealer receives 1.00% fee from the Distributor and a contingent
deferred sales charge ("CDSC") of 1.00% is imposed on redemptions of such shares
within 12 months of purchase, based on the lower of the shares' cost or current
net asset value. In addition, shares purchased by certain investors investing
$500,000 or more that have made arrangements with the Distributor, are not
subject to any charge. In determining whether a CDSC is payable, the Fund will
first redeem shares not subject to any charge. No CDSC charge is imposed on the
redemption of shares acquired through reinvestment of income dividends or
capital gains distributions. The Distributor receives the entire amount of the
CDSC to defray its expense in providing certain distribution-related services to
the Fund, including payment of sales commissions to selling dealers or
qualifying financial institutions, as described above.
<page>
Polynous Growth Fund
Notes to the Financial Statements
January 31, 2004 - continued
(Unaudited)
NOTE 9. CAPITAL LOSS CARRYFORWARDS
At July 31, 2003, the Fund had available for federal tax purposes an unused
capital loss carryforward of $6,429,550, of which $1,405,178 expires in 2007,
$2,760,352 expires in 2008, $1,539,782 expires in 2009 and $724,238 expires in
2011. Capital loss carryforwards are available to offset future realized capital
gains. To the extent that these carryforwards are used to offset future capital
gains, it is probable that the amount offset will not be distributed to
shareholders.
NOTE 10. DISTRIBUTION TO SHAREHOLDERS
There were no distributions to shareholders for the six months ended
January 31, 2004 or the fiscal years ended July 31, 2003 and 2002.
As of July 31, 2003, the components of distributable earnings/ (accumulated
losses) on a tax basis were as follows:
Undistributed ordinary income/(accumulated losses) $ -
Undistributed long-term capital gain/(accumulated losses) (6,030,949)
Unrealized appreciation/(depreciation) 269,343
---------------
$ (5,761,606)
===============
The difference between book basis and tax basis unrealized appreciation
(depreciation) is attributable to the tax deferral of wash sales and
post-October losses.
As of January 31, 2004, the components of distributable earnings/
(accumulated losses) on a tax basis were as follows:
Undistributed ordinary income/(accumulated losses) $ (58,760)
Undistributed long-term capital gain/(accumulated losses) (5,597,395)
Unrealized appreciation/(depreciation) 787,914
---------------
$ (4,868,241)
===============
NOTE 11. CHANGE OF AUDITORS
On March 14, 2004, Cohen McCurdy, Ltd. ("Cohen") was selected to replace
McCurdy & Associates CPA's, Inc. ("McCurdy") as the Fund's independent auditor
for the 2004 fiscal year. The Trust's selection of Cohen was approved by both
the Audit Committee and the Board of Trustees.
McCurdy's report on the Fund's financial statements as of July 31, 2003 did
not contain an adverse opinion or a disclaimer of opinion and was not qualified
or modified as to uncertainty, audit scope or accounting principles. At the
financial statement's date and through the date of the engagement of Cohen,
there were no disagreements between the
<page>
Polynous Growth Fund
Notes to the Financial Statements
January 31, 2004 - continued
(Unaudited)
NOTE 11. CHANGE OF AUDITORS - continued
Fund and McCurdy on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedures, which such
disagreements, if not resolved to the satisfaction of McCurdy, would have caused
it to make reference to the subject matter of the disagreement in connection
with its reports on the financial statements for such years.
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 (800) 528-8069.
19
TRUSTEES INDEPENDENT ACCOUNTANTS
Timothy L. Ashburn, Chairman Cohen McCurdy, Ltd.
Gary E. Hippenstiel 27955 Clemens Rd.
Stephen A. Little Westlake, OH 44145
Daniel J. Condon
Ronald C. Tritschler LEGAL COUNSEL
Thompson Hine LLP
OFFICERS 312 Walnut St., Suite 1400
Timothy L. Ashburn, President and Asst. Secretary Cincinnati, OH 45202
Thomas G. Napurano, Chief Financial Officer
and Treasurer CUSTODIAN
Carol J. Highsmith, Secretary U.S. Bank, N.A.
425 Walnut St.
INVESTMENT ADVISOR Cincinnati, OH 45202
Polynous Capital Management, Inc.
One Pine Street, Suite 2208 ADMINISTRATOR, TRANSFER AGENT
San Francisco, CA 94111 AND FUND ACCOUNTANT
Unified Fund Services, Inc.
DISTRIBUTOR 431 N. Pennsylvania Street
Polynous Securities, LLC. Indianapolis, Indiana 46204
One Pine Street, Suite 2208
San Francisco, CA 94111
This report is intended only for the information of shareholders or those who
have received the Fund's prospectus which contains information about the Fund's
management fee and expenses. Please read the prospectus carefully before
investing.
Distributed by Polynous Securities, LLC.
Member NASD/SIPC
<page>
Polynous Growth Fund
c/o Unified Fund Services, Inc.
PO Box 6110
Indianapolis, IN 46206-6110
<page>
FOR MORE INFORMATION
Several additional sources of information are available to you. The
Statement of Additional Information (SAI), incorporated into this
prospectus by reference, contains detailed information on Fund policies and
operations. Annual and semi-annual reports contain management's discussion
of market conditions and investment strategies that significantly affected
the Fund's performance results as of the Funds' latest semi-annual or
annual fiscal year-end. Call the Fund at (800) 528-8069 to request free
copies of the SAI and the Fund'a annual and semi-annual reports, to request
other information about the Fund and to make shareholder inquiries. You may
review and copy information about the Fund (including the SAI and other
reports) at the Securities and Exchange Commission (SEC) Public Reference
Room in Washington, D.C. Call the SEC at 1-202-942-8090 for room hours and
operation. You may also obtain reports and other information about the Fund
on the EDGAR Database on the SEC's Internet site at http.//www.sec.gov, and
copies of this information may be obtained, after paying a duplicating fee,
by electronic request at the following e-mail address: publicinfo@sec.gov,
or by writing the SEC's Public Reference Section of the SEC, Washington,
D.C. 20549-0102.
Investment Company Act #811-09541
Polynous Growth Fund
c/o Unified Fund Services, Inc.
PO Box 6110
Indianapolis, IN 46206-6110
<page>
Item 2. Code of Ethics. Not Applicable
Item 3. Audit Committee Financial Expert. Not Applicable
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. Purchases of Equity Securities by Closed-End Funds. Not applicable.
Item 9. Submission of Matters to a Vote of Security Holders. Not Applicable
Item 10. Controls and Procedures.
(a) Based on an evaluation of the registrant's disclosure controls and
procedures as of April 7, 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 11. Exhibits.
(a)(1) Not Applicable
(a)(2) Certifications by the registrant's principal executive officer
and principal financial officer, pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002 and required by Rule 30a-2under the Investment Company
Act of 1940 are filed herewith.
(a)(3) Not Applicable
(b) Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 is filed
herewith.
<page>
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 Advisors Trust
By
* /s/ Timothy Ashburn
------------------------------------
Timothy Ashburn, President
Date 4/12/04
---------------------------------
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 4/12/04
---------------------------------
By
* /s/ Thomas Napurano
----------------------------------------------------------------
Thomas Napurano, Chief Financial Officer and Treasurer
Date 4/12/04
---------------------------------
<page>