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)
431 N. Pennsylvania Street, Indianapolis, IN 46204
- -------------------------------------------------------
(Address of principal executive offices) (Zip code)
Lynn Wood
- ---------
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: 07/31
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Date of reporting period: 07/31/04
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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.
==============================================
Polynous Growth
Fund
==============================================
Annual Report
July 31, 2004
Fund Advisor:
Polynous Capital Management, Inc.
One Pine Street, Suite 2208
San Francisco, CA 94111
(415) 956-3384
SUMMARY OF ANNUAL PERIOD AUGUST 1, 2003 THROUGH JULY 31, 2004
- -------------------------------------------------------------
Dear Shareholder,
The Polynous Growth Fund's latest fiscal year resulted in roughly flat
performance for its shareholders as the Fund was relatively conservative in its
investing activities during most of the period. 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 did, however, have much more positive performance than
the Fund during the full fiscal year but the overall performance was a
combination of very positive performance in the first half of the period and
negative performance in the second half of the period. After the strong upward
momentum in the first half of the period due to significant economic stimulus
and the anticipation of resumed economic growth, the second half of the period
has been affected by sluggish employment growth and concerns about the economy
slowing once again.
Aside from concerns about the state of economic growth within the U.S., there
have also been a variety of concerns related to global macroeconomic events. The
three main areas of concern are the sustainability of China's economic growth,
the persistently sluggish economic activity in Europe, and the significant
upward spike in energy prices. Comments on all three areas will be made in the
following.
China over the last six months has gone from very rapid and essentially out of
control growth to a significant slamming of the brakes. Edicts are suddenly
issued forth from Beijing to not unload ships filled with raw materials, to not
issue any more loans, or to stop construction on certain types of industrial
plants and real estate development projects. Compliance with the edicts is often
hit or miss which also continues to exacerbate the imbalances in their economy.
While on one hand, most of the developed world complains about the effects of
inexpensive goods imported from China affecting their economies and a lot of the
developing world complains about the inexpensive Chinese goods affecting the
competitiveness of their own exports, the sad reality for China from all of this
frenetic activity is that the country is not even generating a balance of
payments surplus. The strong current growth being reported by the country seems
to be mainly to support a large need for employment by a rapidly urbanizing
population and to support endemic corruption focusing on siphoning off a portion
of all the burgeoning economic activity.
The potential economic instability in China may be seen from a fairly simple set
of data which is that GDP growth was roughly 20 percent in the past year and
that capital spending was roughly 50 percent of total GDP. Sounds very
impressive at first glance unless one knows that typical capital spending ratios
for a developing economy are usually around 25 to 30 percent of GDP and only 15
to 20 percent of GDP for a developed economy. Essentially, if capital spending
ratios return to more normalized - and controlled levels - the Chinese economy
would have flat to negative GDP growth. If such adjustments only affected China,
such events might be merely items for an interesting discussion but one other
interesting aspect of China flooding the world with their underpriced goods is
that they recycle their export revenues into U.S. Treasury Bonds. Such large
demand for dollars to continue purchasing U.S. Treasury Bonds keeps the value of
the U.S. dollar at somewhat artificially high levels thereby affecting the
competitiveness of U.S. exports which further inflates the U.S. trade deficit
and also artificially affects global trade flows.
The economic imbalances created by the China investment boom will of course end
at some point and the effects could be far reaching. If China begins to
liquidate its holdings of U.S. Treasury securities, then I believe U.S. domestic
interest rates will likely increase by up to roughly one-half to one percent.
While such an increase does not sound that significant, it is actually a ten to
20 percent increase in interest costs in our current low interest rate
environment. Such liquidations would also affect the value of the dollar which,
ironically, given that China pegs its currency to the dollar would only result
in even more underpriced Chinese exports flooding the world. While a less
expensive dollar will also theoretically make U.S. exports more competitive,
another negative imbalance which will also be described below is that such
currency fluctuation will also further depress the demand for European exports.
The unfortunate end result of such an unwinding of economic imbalances is also
conceivably an endless cycle of "beggar thy neighbor" trade wars where all
global economies are depressed for some period of time.
As mentioned above, the current events globally are already part of the cause of
the persistent sluggishness of the European economies. Another self-inflicted
cause of such sluggishness, however, are internal policies within Europe which
raise the cost of doing business and depress overall economic activity. If such
conditions were merely a European problem then they may be of less concern but
with the U.S. balance of payments deficit being roughly five percent of U.S.
GDP, the U.S. really needs a strong economic environment in Europe to create
more balance in U.S. economic conditions. Unfortunately, I do not see much
progress in the chronic sluggishness of European
1
economies in the near-term and apparently neither do a lot of other investors
given our own sluggish stock market environment for most of 2004.
The other weighty factor in the current environment is the unprecedented high
energy prices. The recent price of oil came very close to reaching $50 per
barrel which is roughly double the long term average for the last 15 years of
approximately $20 to $25 per barrel. The various factors affecting oil prices
currently are all well known, i.e., instability in Iraq, tax disputes with the
principal Russian oil company Yukos, and greater than average demand growth for
energy from China and other rapidly growing Asian economies, but what is not
well known are the outcomes of such issues. Energy prices have a well-known
history, however, of boom and bust behavior - and of speculators chasing price
spikes which is probably a contributing factor in a world that now has
supposedly over 10,000 hedge funds - and so I would predict that energy prices
will probably be much lower in the next six to twelve months. In the interim,
however, each additional upward spike causes even more short-term gyrations in
our current stock market environment.
As if all of the macroeconomic concerns were not already enough of a potential
problem for our current stock market environment, one other weighty factor is
now the outlook for technology companies. Earlier this year there was great
optimism once again for the technology sector as many companies were announcing
very rapid order growth in the first quarter of 2004. The order growth, although
exciting, didn't actually make much sense, however, as it was clear to me that
ten to 20 percent sequential order growth in an economic environment growing
three to five percent sequentially, was not sustainable.
For myself, however, whose emphasis on company fundamentals and overall economic
analysis results in attempting to understand deeper trends behind the broader
statistics, the reality of what was happening was actually pretty obvious. After
the sluggish economic conditions of 2003, most companies started 2004 with very
low inventories and very tight supply chains in terms of their vendors' ability
to rapidly fill new orders. The apparently impressive growth of many technology
companies in the first quarter was largely inventory restocking as end users of
technology related components desired to avoid situations where they could not
ship products worth $50 to $500,000 in revenues for themselves due to shortages
of $0.50 to $50 components.
Now that there is currently a pause in such inventory accumulation, however;
investor sentiment seems to have swung back to the opinion that the technology
recovery is now over. The good news about what has happened so far this year in
the technology sector in my opinion is that companies' information systems are
now much more sophisticated than they were during the internet bubble of 1999
and 2000 and that any inventory imbalances are being corrected probably in only
one quarter instead of over a two year period which occurred during 2001 and
2002. As such, I would expect attractive unit growth to resume in the technology
sector by the fourth quarter of 2004 and hopefully such trends will also result
in more confidence about such a prominent sector in the stock market.
You may also note in the schedule of investments section of this annual report
that the Fund is now once again fairly heavily invested in technology sector
companies. This allocation to technology companies did affect the Fund's
performance negatively in July which was the last month of the Fund's fiscal
year. At that point, when the Fund began being more heavily invested in the
technology sector after many companies had already declined between 25 to 50
percent from highs reached earlier in the year, other investors were still
selling such stocks even after the valuations of many of such companies had
reached levels that were last seen eight to ten years ago. While it is sometimes
difficult to pick the exact low for any individual stock, my experience is that
if my fundamental analysis is correct, then being early for the next upcycle is
usually a very rewarding strategy.
The risks to such a strategy were at least suggested, however, in the early
parts of this letter which are the lingering effects of sluggish employment
growth and concerns about the sustainability of overall economic growth. Amidst
all of such concerns, however, the U.S. is experiencing positive real economic
growth of approximately three to four percent which is in line with historical
experience in most economic expansions. The environment also has very low
inflation relative to historical norms and still has extremely low interest
rates. These positive attributes seem to be ignored in a stock market
environment that seems to gyrate daily based on that day's news or statistics,
but that will not happen for much longer if the economy does continue to grow.
As such, as both the Fund's manager and a significant shareholder myself, I am
quite happy to be almost fully invested in the Fund once again given the current
valuations in the stock market and the positive attributes in the current
environment. As mentioned in earlier parts of this letter, however, I am also
keeping a vigilant eye on much broader global trends in case the Fund should be
positioned more conservatively.
Yours truly,
Kevin L. Wenck, President
2
MANAGEMENT DISCUSSION & Analysis
- --------------------------------
AVERAGE ANNUAL
5 YEAR RETURN SINCE
1 YEAR AVERAGE ANNUAL INCEPTION
FUND/INDEX TOTAL RETURN RETURN AUGUST 12, 1996
---------------------------------------------------------------------------
Polynous Growth Fund
(after deduction of sales
load) 1.95% -0.62% 0.58%
S&P 500 Index 13.15% -2.25% 8.16%
Russell 2000 Index 17.06% 6.54% 8.17%
As noted in the accompanying table, the Fund (after accounting for a sales
charge of 4.5 percent) declined 2.6 percent during the latest annual period.
This below average performance is from a combination of having been somewhat
conservatively invested during the early part of the annual period given overall
macroeconomic and stock market concerns, from being significantly underweighted
in energy stocks that have been leading performing stocks in 2004, and from
becoming reinvested much more heavily in technology stocks during the latter
part of the fiscal year while such stocks were still declining in price.
As the stock market events of 2004 have played out year-to-date, the decision to
have been more conservatively invested earlier in the fiscal year, although
early from a timing perspective, was probably also appropriate given our
subsequently correct assessment of potential economic concerns in what had
become a fairly speculative and frothy stock market environment. The decision to
have practically no investments in energy companies was a difficult one but is
in line with the fundamental principles of the fund. Essentially, the Fund is
likely to participate in trends that are projected to persist over a two to
three year period but unlikely to participate in much shorter term trends due to
their lack of sustainability. Although future price movements in energy markets
will of course only be known over time, we believe the current price spikes in
actual energy prices, and the positive performance of energy stocks in 2004, are
almost entirely attributable to short term events that have already been
mentioned in the shareholder letter. The possibly early investments in the
technology sector will be a strategy that also of course will only be determined
as being appropriate over some period of time. Unit growth of technology
oriented products is still very high at approximately 20 to 25 percent annually,
however, and so at this point the very attractive valuation of technology stocks
makes it appear that such an allocation to the technology sector will be an
appropriate investment strategy.
GROWTH OF $10,000 INVESTMENT
[GRAPH OMITTED]
Polynous S&P Russell
($9,993) ($18,695) ($18,700)
8/12/1996 9,546.54 10,000.00 10,000.00
7/31/1997 11,435.83 14,609.87 12,871.26
7/31/1998 11,257.75 17,426.23 13,169.17
7/31/1999 10,308.28 20,947.64 14,145.12
7/31/2000 8,789.26 22,826.70 16,092.65
7/31/2001 9,677.74 19,557.19 15,817.37
7/31/2002 5,693.91 14,934.06 12,976.59
7/31/2003 9,801.94 16,522.63 15,974.92
7/31/2004 9,993.01 18,694.56 18,700.44
3
This graph shows the value of a hypothetical initial investment of $10,000 in
the Fund, the S&P 500 Index and the Russell 2000 Index on August 12, 1996
(inception of the Fund) and held through July 31, 2004. The S&P 500 Index and
the Russell 2000 Index are widely recognized unmanaged indices of common stock
prices and are representative of a broader market and range of securities than
is found in the Polynous Growth Fund portfolio. The Indices' returns do not
reflect expenses, which have been deducted from the Fund's return. These
performance figures include the change in value of the stocks in the indices
plus the reinvestment of dividends. The performance of the Fund is computed on a
total return basis, which includes reinvestment of all dividends. The returns
shown do not reflect deduction of taxes that a shareholder would pay on Fund
distributions or the redemption of Fund shares. THE FUND'S RETURN REPRESENTS
PAST PERFORMANCE AND DOES NOT PREDICT FUTURE RESULTS.
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 a 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
4
FUND HOLDINGS - (UNAUDITED)
POLYNOUS GROWTH FUND PORTFOLIO ANALYSIS AS OF JULY 31, 20041
[CHART OMITTED]
Liabilities
in excess of
Small-Cap Mid-Cap Other Private Short-Term cash and other
Companies Companies Companies2 Placements Investments assets
-----------------------------------------------------------------------
48.62% 27.74% 17.95% 0.11% 5.51% 0.08%
1As a percent of net assets
2U.S. companies below $50 million and above $5 billion.
The Fund invests in the equity securities of U.S. companies with total market
capitalization at the time of purchase of between $50 million and $5 billion and
which are typically described as small-capitalization and mid-capitalization
companies.
ABOUT YOUR FUND'S EXPENSES - (UNAUDITED)
- --------------------------
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments, reinvested
dividends, or other distributions; redemption fees; and exchange fees; and (2)
ongoing costs, including management fees; distribution and/or service (12b-1)
fees; and other Fund expenses. This Example is intended to help you understand
your ongoing costs (in dollars) of investing in the Fund and to compare these
costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period from January 31, 2004 to July 31, 2004.
Actual Expenses
- ---------------
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
- --------------------------------------------
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of the other funds.
5
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), redemption fees, or exchange fees. Therefore, the second line
of the table is useful in comparing ongoing costs only, and will not help you
determine the relative total costs of owning different funds. In addition, if
these transactional costs were included, your costs would have been higher.
- ---------------------------------- -------------------- -------------------------- --------------------------
POLYNOUS GROWTH FUND BEGINNING ACCOUNT ENDING ACCOUNT EXPENSES PAID DURING
VALUE VALUE PERIOD*
JANUARY 31, 2004 JULY 31, 2004 JANUARY 31 - JULY 31,
2004
- ---------------------------------- -------------------- -------------------------- --------------------------
Actual $1,000.00 $901.72 $8.98
(-9.83% return)
- ---------------------------------- -------------------- -------------------------- --------------------------
Hypothetical $1,000.00 $1,015.42 $9.52
(5% return before expenses)
- ---------------------------------- -------------------- -------------------------- --------------------------
* Expenses are equal to the Fund's annualized expense ratio of 1.90%, multiplied
by the average account value over the period, multiplied by 182/366 (to reflect
the one-half year period).
6
POLYNOUS GROWTH FUND
SCHEDULE OF INVESTMENTS
JULY 31, 2004
COMMON STOCKS - 97.16% SHARES VALUE
------------ ---------------
DRAWING & INSULATING OF NONFERROUS WIRE - 1.84%
Optical Cable Corp. (a) 32,400 $ 137,376
---------------
ELECTRONIC COMPONENTS - 2.71%
Advanced Energy Industries, Inc. (a) 13,400 132,124
Innovex, Inc. (a) 19,200 70,080
---------------
202,204
---------------
GOLD AND SILVER ORES - 2.32%
Goldcorp, Inc. 15,000 172,650
---------------
HOSPITAL & MEDICAL SERVICE PLANS - 2.99%
Anthem, Inc. (a) 2,700 222,669
---------------
IN VITRO & IN VIVO DIAGNOSTIC SUBSTANCES - 2.59%
Meridian Bioscience, Inc. 16,224 192,903
---------------
NATIONAL COMMERCIAL BANKS - 9.87%
First Commonwealth Financial Corp. 14,800 189,292
Sky Financial Group, Inc. 7,900 184,465
Susquehanna Bancshares, Inc. 7,400 172,198
United Security Bancshares 7,822 189,762
---------------
735,717
---------------
OPERATIVE BUILDERS - 1.48%
D.R. Horton, Inc. 4,000 110,520
---------------
OPTICAL INSTRUMENTS & LENSES - 1.31%
Meade Instruments Corp. (a) 28,900 97,971
---------------
PHARMACEUTICAL PREPARATIONS - 1.70%
Adolor Corp. (a) 11,900 126,735
---------------
PRINTED CIRCUIT BOARDS - 2.51%
Flextronics International Ltd. (a) 14,900 187,293
---------------
RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT - 1.37%
RELM Wireless Corporation (a) 49,900 102,295
---------------
See accompanying notes which are an integral part of the financial statements.
7
POLYNOUS GROWTH FUND
SCHEDULE OF INVESTMENTS
JULY 31, 2004 - CONTINUED
COMMON STOCKS - 97.16% - CONTINUED SHARES VALUE
------------ ---------------
RETAIL - APPAREL & ACCESSORY STORES - 6.06%
Hot Topic, Inc. (a) 4,100 $ 65,272
Jos. A. Bank Clothiers, Inc. (a) 6,000 184,380
Pacific Sunwear of California, Inc. (a) 9,900 201,960
---------------
451,612
---------------
RETAIL - COMPUTER & COMPUTER SOFTWARE STORES - 1.67%
GameStop Corp. (a) 8,100 124,740
---------------
RETAIL - DRUG STORES & PROPRIETARY STORES - 3.00%
Omnicare, Inc. 7,900 223,333
---------------
RETAIL - FAMILY CLOTHING STORES - 1.84%
Children's Place Retail Stores, Inc. (a) 6,700 137,350
---------------
RETAIL - JEWELRY STORES - 1.34%
Friedmans, Inc. (a) 26,900 99,530
---------------
SAVINGS INSTITUTION, FEDERALLY CHARTERED - 3.04%
Sovereign Bancorp, Inc. 10,400 226,408
---------------
SAVINGS INSTITUTIONS, NOT FEDERALLY CHARTERED - 2.51%
Independence Community Bank Corp. 5,000 186,700
---------------
SEMICONDUCTORS & RELATED DEVICES - 25.73%
Agere Systems, Inc. - Class A (a) 150,600 186,744
Applied Films Corp. (a) 10,000 186,500
Applied Micro Circuits Corp. (a) 30,300 109,080
Conexant Systems, Inc. (a) 90,000 143,100
Cypress Semiconductor Corp. (a) 15,500 175,770
Intersil Holding Corp. 8,200 150,634
Linear Technology Corp. 4,900 191,590
MEMC Electronic Materials, Inc. (a) 21,100 191,799
Microchip Technology, Inc. 6,900 199,893
Omnivision Technologies, Inc. (a) 16,300 192,014
Sirf Technology Holdings, Inc. (a) 17,000 190,230
---------------
1,917,354
---------------
SERVICES - ENGINEERING SERVICES - 2.62%
Tetra Tech, Inc. (a) 12,100 195,294
---------------
See accompanying notes which are an integral part of the financial statements.
8
POLYNOUS GROWTH FUND
SCHEDULE OF INVESTMENTS
JULY 31, 2004 - CONTINUED
COMMON STOCKS - 97.16% - CONTINUED SHARES VALUE
------------ ---------------
SERVICES - GENERAL MEDICAL & SURGICAL HOSPITALS - 2.34%
Health Management Associates, Inc. 8,700 $ 174,522
---------------
SERVICES - PREPACKAGED SOFTWARE - 5.87%
Concord Communications, Inc. (a) 8,820 81,585
Magma Design Automation, Inc. (a) 10,900 193,475
Vignette Corp. (a) 113,600 162,448
---------------
437,508
---------------
SERVICES - PREPACKED SOFTWARE - 2.59%
Micromuse, Inc. (a) 42,900 193,050
---------------
SERVICES - VIDEO TAPE RENTAL - 2.41%
Hollywood Entertainment Corp. (a) 13,900 179,449
---------------
STATE COMMERCIAL BANKS - 5.45%
Provident Bankshares Corp. 6,800 203,252
S&T Bancorp, Inc. 6,100 202,947
---------------
406,199
---------------
TOTAL COMMON STOCKS (Cost $8,417,569) 7,241,382
---------------
PRIVATE PLACEMENTS - 0.11%
Gene Logic Escrow Holding (a) (b) 1,250 8,040
---------------
TOTAL PRIVATE PLACEMENTS (Cost $5,000) 8,040
---------------
MONEY MARKET SECURITIES - 5.67%
First American Treasury - Class A, 0.59%, (c) 51,893 51,893
Huntington Money Market Fund - Investment A, .21%, (c) 371,000 371,000
---------------
TOTAL MONEY MARKET SECURITIES (COST $422,893) 422,893
---------------
TOTAL INVESTMENTS (COST $8,845,462) - 102.94% $ 7,672,315
---------------
LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS - (2.94%) (219,273)
---------------
TOTAL NET ASSETS - 100.00% $ 7,453,042
===============
(a) Non-income producing.
(b) Restricted (Note 4)
(c) Variable rate security; the coupon rate shown represents the rate at
July 31, 2004.
See accompanying notes which are an integral part of the financial statements.
9
POLYNOUS GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 2004
ASSETS
Investments in securities, at value (cost $8,845,462) $ 7,672,315
Interest receivable 103
Dividends receivable 5,913
Receivable from advisor 9,488
------------------
TOTAL ASSETS 7,687,819
------------------
LIABILITIES
Payable for investments purchased 211,741
Payable for fund shares redeemed 891
Accrued expenses 14,448
Accrued administration fees 2,500
Accrued transfer agent fees 1,837
Accrued 12b-1 fees 1,574
Accrued fund accounting fees 1,500
Accrued trustee fees 286
------------------
TOTAL LIABILITIES 234,777
------------------
NET ASSETS $ 7,453,042
==================
NET ASSETS CONSIST OF:
Paid in capital $ 12,999,744
Accumulated net realized (loss) on investments (4,373,555)
Net unrealized (depreciation) on investments (1,173,147)
------------------
NET ASSETS $ 7,453,042
==================
SHARES OUTSTANDING 712,429
==================
Net asset value per share ($7,453,042 / 712,429) $ 10.46
==================
Offering price per share ($10.46 / 0.955) (a) $ 10.95
==================
Redemption price per share ($10.46 x 0.99) (Note 9) $ 10.36
==================
(a) reflects maximum sales charge (load) on purchases of 4.50%
See accompanying notes which are an integral part of the financial statements.
10
POLYNOUS GROWTH FUND
STATEMENT OF OPERATIONS
YEAR ENDED JULY 31, 2004
INVESTMENT INCOME
Dividend income $ 34,321
Interest income 10,032
Miscellaneous income 29
---------------
TOTAL INCOME 44,382
---------------
EXPENSES
Investment advisor fee 76,376
12b-1 fee 19,036
Administration expenses 29,583
Transfer agent expenses 24,521
Fund accounting expenses 18,000
Auditing expenses 12,271
Legal expenses 9,662
Registration expenses 3,983
Custodian expenses 8,896
Printing expenses 4,500
Trustee expenses 2,919
Miscellaneous expenses 1,302
Pricing expenses 3,768
Insurance expenses 844
---------------
TOTAL EXPENSES 215,661
Reimbursed expenses (71,112)
---------------
Total operating expenses 144,549
---------------
NET INVESTMENT (LOSS) (100,167)
---------------
REALIZED & UNREALIZED GAIN (LOSS)
Net realized gain on investment securities 1,757,449
Change in unrealized appreciation (depreciation)
on investment securities (1,542,545)
---------------
Net realized and unrealized gain (loss) on investment securities 214,904
---------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 114,737
===============
See accompanying notes as an integral part of the financial statements.
11
POLYNOUS GROWTH FUND
STATEMENTS OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
INCREASE (DECREASE) IN NET ASSETS JULY 31, 2004 JULY 31, 2003
------------------ ------------------
OPERATIONS
Net investment (loss) $ (100,167) $ (2,884)
Net realized gain (loss) on investment securities 1,757,449 (662,516)
Change in net unrealized appreciation (depreciation) (1,542,545) 3,827,659
------------------ ------------------
Net increase in net assets resulting from operations 114,737 3,162,259
------------------ ------------------
CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold 1,036,531 2,229,207
Reinvestment of distributions - -
Amount paid for shares repurchased (1,934,811) (1,303,253)
------------------ ------------------
Net increase (decrease) in net assets resulting
from share transactions (898,280) 925,954
------------------ ------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (783,543) 4,088,213
------------------ ------------------
NET ASSETS
Beginning of period 8,236,585 4,148,372
------------------ ------------------
End of period $ 7,453,042 $ 8,236,585
================== ==================
CAPITAL SHARE TRANSACTIONS
Shares sold 95,742 262,953
Shares repurchased (185,886) (156,173)
------------------ ------------------
Net increase (decrease) from capital transactions (90,144) 106,780
================== ==================
See accompanying notes which are an integral part of the financial statements.
12
POLYNOUS GROWTH FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING DURING THE PERIOD
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
JULY 31, 2004 JULY 31, 2003 JULY 30, 2002 JULY 30, 2001 JULY 30, 2000
-------------- ---------------- ---------------- --------------- ----------------
SELECTED PER SHARE DATA
Net asset value, beginning of period $ 10.26 $ 5.96 $ 10.13 $ 9.20 $ 10.79
--------------- --------------- ---------------- --------------- ----------------
Income from investment operations
Net investment income (loss) (0.14) 0.00 (0.15) (0.01) (0.12)
Net realized and unrealized gain (loss) 0.34 4.30 (4.02) 0.94 (1.47)
--------------- --------------- ---------------- --------------- ----------------
Total from investment operations 0.20 4.30 (4.17) 0.93 (1.59)
--------------- --------------- ---------------- --------------- ----------------
Net asset value, end of period $ 10.46 $ 10.26 $ 5.96 $ 10.13 $ 9.20
=============== =============== ================ =============== ================
TOTAL RETURN (a) 1.95% 72.15% (41.16)% 10.09% (14.74)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000) $ 7,453 $ 8,237 $ 4,148 $ 7,631 $ 7,593
Ratio of expenses to average net assets 1.90% 1.90% 1.90% 1.90% 1.90%
Ratio of expenses to average net assets
before waiver & reimbursement 2.89% 3.44% 3.17% 4.42% 4.09%
Ratio of net investment income (loss) to
average net assets (1.32)% (0.05)% (1.57)% (0.12)% (0.95)%
Ratio of net investment income (loss) to
average net assets before waiver &
reimbursement (2.31)% (1.60)% (2.83)% (2.64)% (3.14)%
Portfolio turnover rate 418.73% 194.90% 405.11% 494.19% 261.88%
(a) Total return calculation does not reflect load.
See accompanying notes which are an integral part of the financial statements.
13
THE POLYNOUS GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2004
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 &
Declaration of Trust dated August 3, 1999 (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. 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
organization. The investment objective of the Fund is long-term capital
appreciation. The Advisor to 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.
Fixed income securities generally are valued by using market quotations, but may
be valued on the basis of prices furnished by a pricing service when the Advisor
believes such prices accurately reflect the fair market value of such
securities. A pricing service utilizes electronic data processing techniques
based on yield spreads relating to securities with similar characteristics to
determine prices for normal institutional-size trading units of debt securities
without regard to sale or bid prices. If the Advisor decides that a price
provided by the pricing service does not accurately reflect the fair market
value of the securities, when prices are not readily available from a pricing
service, or when restricted or illiquid securities are being valued, securities
are valued at fair value as determined in good faith by the Advisor, in
conformity with guidelines adopted by and subject to review of the Board. 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 - The Fund's policy is to continue to comply with the
requirements of Sub-Chapter M of the Internal Revenue Code that are applicable
to regulated investment companies and to distribute all its taxable income to
its shareholders. Therefore, no federal income tax provision is required.
Dividends and Distributions - The Fund will distribute substantially all of its
net investment income in December, and capital gains, if any, annually.
Distributions to shareholders are recorded on the ex-dividend date. Income and
capital gain distributions are determined in accordance with income tax
regulations, which may differ from accounting principles generally accepted in
the United States of America.
Other - The Fund follows industry practice and records security transactions on
the trade date. The specific identification method is used for determining gains
or losses for financial statements and income tax purposes. Dividend income is
recorded on the ex-dividend date and interest income is recorded on an accrual
basis.
14
THE POLYNOUS GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2004 - CONTINUED
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Discounts and premiums on securities purchased are amortized over the life of
the respective securities. Accounting principles generally accepted in the
United States require that permanent financial reporting tax differences
relating to shareholder distributions be reclassified to paid in capital.
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Polynous Capital Management, Inc. is the Fund's Advisor. The Advisor is a
California corporation established in May 1996. Kevin L. Wenck is the president,
sole board member and sole shareholder of the Advisor, and is primarily
responsible for the day-to-day management of the Fund's portfolio.
Under the terms of the management agreement (the "Agreement"), the Advisor
manages the Fund's investments subject to approval of the Board. 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 $76,376, before
reimbursement, from the Fund for the fiscal year ended July 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 year ended July 31, 2004, the
Advisor was obligated to waive and/or reimburse Fund expenses of $71,112, of
which $9,488 was a receivable, from the Advisor, at year-end. Any operating
expenses of the Fund reimbursed by the Advisor are subject to recoupment in the
first three fiscal years following the year in which reimbursement occurred, if
the total expenses of the Fund for such years (after recoupment) do not exceed
1.90% of the average daily net assets of the Fund. The amounts available to be
potentially recouped by the Advisor are listed in the table below:
-------------------------------------- ------------------------------------
July 31, 2002 85,385
-------------------------------------- ------------------------------------
July 31, 2003 84,944
-------------------------------------- ------------------------------------
July 31,2004 71,112
-------------------------------------- ------------------------------------
The Fund retains Unified Fund Services, Inc. ("Unified") to manage the Fund's
business affairs and provide the Fund with administrative services, including
all regulatory reporting and necessary office equipment and personnel. Unified
receives a monthly fee from the Fund equal to an annual rate of 0.10% of the
Fund's average daily net assets up to $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 year ended July 31, 2004, Unified earned fees of $29,583
from the Fund for administrative services provided to the Fund.
The Fund also retains Unified to act as the Fund's transfer agent and fund
accountant. For its services as transfer agent, Unified earned a monthly fee
from the Fund of $1.25 per shareholder (subject to a minimum monthly fee of
$900). For the year ended July 31, 2004, Unified earned fees of $24,521 from the
Fund for transfer agent services provided 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 over $100 million (subject to a
minimum of $1,667 per month). For the year ended July 31, 2004, Unified earned
fees of $18,000 from the Fund for fund accounting services provided to the Fund.
For the year ended July 31, 2004, the Fund paid $2,919 for Trustee fees and
expenses. Certain Trustees and the officers of the Trust are employees of
Unified, and/or shareholders of Unified Financial Services, Inc., the parent of
Unified.
15
THE POLYNOUS GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2004 - CONTINUED
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
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 $3,542 from underwriting and broker commissions on the sale of shares of
the Fund during the year ended July 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 year ended July 31, 2004, the
Fund paid the Distributor $19,036 for distribution costs incurred.
NOTE 4. RESTRICTED SECURITIES
The investment in 1,250 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 Gene Logic shares are not
registered under the Securities Act currently and are subject to restrictions
for resale. Limitations on the resale of such securities may have an adverse
effect on their marketability. Gene Logic has taken steps to register these
shares, but it is unknown when the registration will be effective. The Gene
Logic shares have been valued at $6.43 per share (the last quoted sales price as
of July 31, 2004), in accordance with procedures adopted by the Board. It is
possible that the estimated value may differ significantly from the amount that
might ultimately be realized in the near term, and the difference could be
material.
NOTE 5. INVESTMENTS
For the year ended July 31, 2004, purchases and sales of investment securities,
other than short-term investments, aggregated $27,426,878, and $23,250,000,
respectively. As of July 31, 2004, the gross unrealized appreciation for all
securities totaled $189,117 and the gross unrealized depreciation for all
securities totaled $1,368,818 for a net unrealized depreciation, for federal
income tax purposes, of $1,179,701. The aggregate cost of securities for federal
income tax purposes at July 31, 2004 was $8,852,016. The difference between book
cost and tax cost consists of wash sales in the amount of $6,554.
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. FUND OWNERSHIP
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 July 31, 2004,
Delaware Charter Guarantee & Trust, for the benefit of others, owned in
aggregate 30.78% of the Fund, and thus may be deemed to control the Fund.
NOTE 8. FEDERAL INCOME TAXES
At July 31, 2004, the Fund had available for federal tax purposes an unused
capital loss carryforward of $4,765,603, of which $2,501,583 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.
16
THE POLYNOUS GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2004 - CONTINUED
NOTE 9. 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.
NOTE 10. DISTRIBUTION TO SHAREHOLDERS
There were no capital gain or income distributions for the years ended 2003 and
2004.
As of July 31, 2004, 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) (4,367,001)
Unrealized appreciation / (depreciation) (1,179,701)
------------
$(5,546,702)
===========
The difference between book basis and tax basis unrealized appreciation
(depreciation) is attributable to the tax deferral of wash sales.
NOTE 11. CHANGE OF AUDITORS
On March 3, 2004, McCurdy & Associates CPA's, Inc. ("McCurdy") notified the
Board of its intention to resign as the Fund's independent auditors upon
selection of replacement auditors.
On March 14, 2004, the Fund's Audit Committee and Board selected Cohen McCurdy,
Ltd. ("Cohen") to replace McCurdy as the Fund's auditors for the fiscal year
ending July 31, 2004 to be effective upon the resignation of McCurdy.
On March 14, 2004, upon receipt of notice that Cohen was selected as the Fund's
auditor, McCurdy resigned as independent auditors to the Fund. McCurdy's
reports on the Fund's financial statements for the fiscal years ended July 31,
2003 and 2002 contained no adverse opinion or a disclaimer of opinion nor were
they qualified or modified as to uncertainty, audit scope or accounting
principles. During the two-year period ended July 31, 2003 through the date of
engagement of Cohen, there were no disagreements with McCurdy on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure which, if not resolved to the satisfaction of McCurdy, would
have caused McCurdy to make reference to the subject matter of the disagreements
in connection with its reports on the Fund's financial statements for such
periods.
Neither the Fund nor anyone on its behalf consulted with Cohen on items which
(i) concerned the application of accounting principles to a specified
transaction, either completed or proposed or the type of audit opinion that
might be rendered on the Fund's financial statements as a result of such
consultations or (ii) concerned the subject of a disagreement (as defined in
paragraph (a)(1)(iv) of Item 304 of Regulation S-K) or a reportable event (as
described in paragraph (a)(1)(v) of said Item 304).
17
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
-------------------------------------------------------
To The Shareholders and
Board of Trustees
Polynous Growth Fund:
(One in the series of AmeriPrime Advisors Trust)
We have audited the accompanying statement of assets and liabilities of Polynous
Growth Fund, including the schedule of portfolio investments, as of July 31,
2004, and the related statement of operations, changes in net assets, and the
financial highlights for the year 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 audit. The statement of changes in net assets
for the year ended July 31, 2003 and financial highlights for each of the four
years in the period then ended were audited by McCurdy & Associates CPA's, Inc.,
whose audit practice was acquired by Cohen McCurdy, Ltd. McCurdy & Associates
CPA's, Inc. expressed unqualified opinions on those statements.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). 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
investments and cash held by the custodian as of July 31, 2004 by correspondence
with the custodian and brokers. 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
audit provides a reasonable basis for our opinion.
In our opinion, the 2004 financial statements and financial highlights, referred
to above, present fairly, in all material respects, the financial position of
Polynous Growth Fund as of July 31, 2004, the results of its operations, the
changes in its net assets, and the financial highlights for the year then ended,
in conformity with accounting principles generally accepted in the United States
of America.
/s/ Cohen McCurdy, Ltd.
Cohen McCurdy, Ltd.
Westlake, Ohio
September 23, 2004
18
TRUSTEE AND OFFICERS (UNAUDITED)
INDEPENDENT TRUSTEES
- ----------------------------------------------------- ----------------------------------------------------------------
NAME, ADDRESS*, (DATE OF BIRTH), POSITION WITH FUND PRINCIPAL OCCUPATION DURING PAST 5 YEARS AND OTHER
COMPLEX,** TERM OF POSITION WITH TRUST DIRECTORSHIPS
- ----------------------------------------------------- ----------------------------------------------------------------
Gary E. Hippenstiel (1947) Director, Vice President and Chief Investment Officer of
Legacy Trust Company, N.A. since 1992. Trustee of AmeriPrime
Trustee, 1995 to present Advisors Trust since July 2002 and Unified Series Trust since
December 2002. Trustee of CCMI Funds since June 2003. Trustee
of Access Variable Insurance Trust, since April 2003.
- ----------------------------------------------------- ----------------------------------------------------------------
Stephen A. Little (1946) President and founder, The Rose, Inc., a registered investment
advisor, since April 1993. Trustee of AmeriPrime Advisors
Trustee, December 2002 to present Trust since November 2002 and Unified Series Trust since
December 2002. Trustee of CCMI Funds since June 2003.
- ----------------------------------------------------- ----------------------------------------------------------------
Daniel J. Condon (1950) President, 2004 to present, Vice President and General
Manager, 1990 to 2003, International Crankshaft Inc., an
Trustee, December 2002 to present automotive equipment manufacturing company; Trustee, The
Unified Funds, from 1994 to 2002; Trustee, Firstar Select
Funds, a REIT mutual fund, from 1997 to 2000. Trustee of
AmeriPrime Advisors Trust since November 2002 and Unified
Series Trust since December 2002. Trustee of CCMI Funds since
June 2003.
- ----------------------------------------------------- ----------------------------------------------------------------
INTERESTED TRUSTEES AND PRINCIPAL OFFICERS
- --------------------------------------------------- ------------------------------------------------------------------
NAME, ADDRESS*, (DATE OF BIRTH), POSITION WITH PRINCIPAL OCCUPATION DURING PAST 5 YEARS
FUND COMPLEX,** TERM OF POSITION WITH TRUST AND OTHER DIRECTORSHIPS
- --------------------------------------------------- ------------------------------------------------------------------
Timothy L. Ashburn (1950)*** Employed by Unified Financial Services, Inc., Chairman of
1104 Buttonwood Court Unified Financial Services, Inc. 1989 to 2004, Chief Executive
Lexington, KY 40515 Officer from 1989 to 1992 and 1994 to April 2002, and President
from November 1997 to April 2000. Trustee of AmeriPrime Advisors
Chairman, December 2002 to present Trust since November 2002 and Unified Series Trust since October
President, December 2002 to July 2004 2002. Trustee of CCMI Funds since June 2003.
Asst. Secretary, December 2003 to present
Secretary, June 2003 to December 2003
- --------------------------------------------------- ------------------------------------------------------------------
Ronald C. Tritschler (1952)**** Chief Executive Officer, Director and legal counsel of The Webb
Companies, a national real estate company, from 2001 to present;
Trustee, December 2002 to present Executive Vice President and Director of The Webb Companies from
1990 to 2000; Director, First State Financial, 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. Trustee of AmeriPrime Advisors Trust since
November 2002, Ameriprime Funds since July 2002, and Unified
Series Trust since December 2002. Trustee of CCMI Funds since
June 2003.
- --------------------------------------------------- ------------------------------------------------------------------
Anthony J. Ghoston (1959) Executive Vice President of Unified Fund Services, Inc. since
June 2004; Senior Vice President of Unified Fund Services, Inc.
President, July 2004 to present April 2003 to June 2004; Senior Vice President and Chief
Information Officer of Unified Financial Services since 1997.
- --------------------------------------------------- ------------------------------------------------------------------
Thomas G. Napurano (1941) Chief Financial Officer and Executive Vice President of Unified
Financial Services, Inc., the parent company of the Trust's
Chief Financial Officer and Treasurer, October administrator and Distributor; Director, Unified Financial
2002 to present Services, Inc., from 1989 to March 2002. CFO of AmeriPrime
Advisors Trust since October 2002 and Unified Series Trust since
December 2002. CFO of CCMI Funds since June 2003.
- --------------------------------------------------- ------------------------------------------------------------------
Carol Highsmith (1964) Employed by Unified Fund Services, Inc. (November 1994 to
present). Secretary of AmeriPrime Advisors Trust, Unified Series
Secretary, December 2003 to present Trust, and CCMI Funds since December 2003.
Asst. Secretary, June 2003 to December 2003
- --------------------------------------------------- ------------------------------------------------------------------
* The address for each of the trustees and officers is 431 N. Pennsylvania,
Indianapolis, IN 46204, except as noted for Tim Ashburn
** Fund Complex refers to AmeriPrime Advisors Trust, AmeriPrime Funds and
Unified Series Trust. The Fund Complex consists of 29 series.
*** 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 has an ownership interest in Unified Financial Services, Inc.,
the parent of the Distributor of certain series in the Fund Complex.
**** 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 Distributor of certain series in the Fund Complex.
19
The Funds Statement of Additional Information ("SAI") includes additional
information about the trustees and is available, without charge, upon request.
You may call toll-free (800) 924-3863 to request a copy of the SAI or to make
shareholder inquiries.
PROXY VOTING
A description of the policies and procedures that the Fund uses to determine how
to vote proxies relating to portfolio securities and information regarding how
the Fund voted those proxies during the 12-month period ended June 30, 2004 are
available without charge upon request by (1) calling the Fund at (800) 924-3863
and (2) from Fund documents filed with the Securities and Exchange Commission
("SEC") on the SEC's website at www.sec.gov.
-----------
TRUSTEES
Timothy L. Ashburn, Chairman
Gary E. Hippenstiel
Stephen A. Little
Daniel J. Condon
Ronald C. Tritschler
OFFICERS
Anthony J. Ghoston, President
Thomas G. Napurano, Chief Financial Officer and Treasurer
Timothy L. Ashburn, Assistant Secretary
Carol J. Highsmith, Secretary
INVESTMENT ADVISOR
Polynous Capital Management, Inc.
One Pine Street, Suite 2208
San Francisco, CA 94111
DISTRIBUTOR
Polynous Securities, LLC
One Pine Street, Suite 2208
San Francisco, CA 94111
INDEPENDENT ACCOUNTANTS
Cohen McCurdy, Ltd.
826 Westpoint Pkwy, Suite 1250
Westlake, OH 44145
LEGAL COUNSEL
Thompson Hine LLP
312 Walnut St., 14th Floor
Cincinnati, OH 45202
CUSTODIAN
U.S. Bank, N.A.
425 Walnut St.
Cincinnati, OH 45202
ADMINISTRATOR, TRANSFER AGENT
AND FUND ACCOUNTANT
Unified Fund Services, Inc.
431 N. Pennsylvania Street
Indianapolis, IN 46204
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
20
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.
(a) AUDIT FEES
-----------
FY 2003 $ 11,506
FY 2004 $ 9,468
(b) AUDIT-RELATED FEES
------------------
Registrant
----------
FY 2003 $ 635
FY 2004 $ 0
Nature of the fees: consent for post-effective filing
(c) TAX FEES
--------
Registrant
----------
FY 2003 $ 650
FY 2004 $ 0
Nature of the fees: preparation of 1120 RIC
(d) ALL OTHER FEES
--------------
Registrant
----------
FY 2003 $ 0
FY 2004 $ 0
Nature of the fees:
(e) (1) AUDIT COMMITTEE'S PRE-APPROVAL POLICIES
---------------------------------------
The audit committee has not adopted pre-approval policies and
procedures described in paragraph (c)(7) of Rule 2-01 of
Regulation S-X.
(2) PERCENTAGES OF SERVICES APPROVED BY THE AUDIT COMMITTEE
-------------------------------------------------------
Registrant
----------
Audit-Related Fees: 0%
Tax Fees: 0%
All Other Fees: 0%
None of the services described in paragraph (b) through (d) of
this Item were approved by the audit committee pursuant to
paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) During audit of registrant's financial statements for the most recent
fiscal year, less than 50 percent of the hours expended on the principal
accountant's engagement were attributed to work performed by persons other
than the principal accountant's full-time, permanent employees.
(g) The aggregate non-audit fees billed by the registrant's accountant for
services rendered to the registrant, and rendered to the registrant's
investment adviser (not including any sub-adviser whose role is primarily
portfolio management and is subcontracted with or overseen by another
investment adviser), and any entity controlling, controlled by, or under
common control with the adviser that provides ongoing services to the
registrant:
Registrant
----------
FY 2003 $ 1,285
FY 2004 $ 0
(h) Not applicable. The auditor performed no services for the registrant's
investment adviser or any entity controlling, controlled by, or under
common control with the investment adviser that provides ongoing services
to the registrant.
ITEM 5. AUDIT COMMITTEE OF LISTED COMPANIES. Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
Not applicable - schedule filed with Item 1.
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.
The registrant has not adopted procedures by which shareholders may recommend
nominees to the registrant's board of trustees
ITEM 10. CONTROLS AND PROCEDURES.
(a) Based on an evaluation of the registrant's disclosure controls and
procedures as of September 22, 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.
There were no significant changes in the registrant's internal control over
financial reporting that occurred during the registrant's second 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) Code is filed herewith.- Annual
(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.
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
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By * /s/ Anthony Ghoston, President
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October 12, 2004
Date ---------------------------
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/ Anthony Ghoston, President
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October 12, 2004
Date --------------------------
/s/ Thomas Napurano
By * ----------------------------------------------------------
Thomas Napurano, Chief Financial Officer and Treasurer
October 12, 2004
Date ---------------------------