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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 811-9123
----------------------------------------------
AMIDEX Funds, Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
2621 Van Buren Avenue Norristown, PA 19403
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(Address of principal executive offices) (Zip code)
InCap Service Company, Willow Grove, PA 19090
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(Name and address of agent for service)
Registrant's telephone number, including area code: 610 666-1330
-----------------------------
Date of fiscal year end: 05/31/2003
--------------------
Date of reporting period: 05/31/2003
-------------------
FOR MORE INFORMATION
Visit Our Website:
www. amidex.com ANNUAL REPORT
---------------
MAY 31, 2003
Email:
support@amidex.com
------------------
Call Us Toll Free:
1-888-876-3566
AMIDEX
------------
MUTUAL FUNDS
------------
Mail:
AMIDEX Funds, Inc. AMIDEX Funds, Inc.
c/o InCap Group c/o InCap Group
630-A Fitzwatertown Rd. 630-A Fitzwatertown Rd.
Willow Grove, PA 19090 Willow Grove, PA 19090
TABLE OF CONTENTS
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President's Letter 1
Performance Update 2-4
Schedule of Investments 5-9
Statement of Assets and Liabilities 10-12
Statement of Operations 13-14
Statements of Changes in Net Assets 15-16
Financial Highlights 17-20
Notes to Financial Statements 21-32
Directors and Officers 33
Independent Auditor's Report 34
September 29, 2003
Dear AMIDEXTM Funds, Inc. Shareholder,
Enclosed please find the Annual Report for the AMIDEXTM Funds, Inc. for the
fiscal year ended May 31, 2003.
The AMIDEXTM Funds, Inc., along with most stock mutual funds, are
continuing to struggle with the after-effects of the terrorist assault on our
country, the aftermath of the war with Iraq, and the fallout from the bursting
of the "tech bubble".
Our Israel-related fund, the AMIDEX35TM Mutual Fund, is additionally
challenged by the painful continuation of terrorist assaults on Israel. The
global recession, regional tensions, and a lack of positive momentum have
contributed in the past to the disappointing performance of our Fund. The
publicity given to accounting scandals, self-dealing and breach of investors'
trust by some of the country's biggest companies, and the continuing lack of
dramatically positive economic news, are all also continuing to stall an
economic recovery, and continuing to hold stock prices down.
However, over the last year, we have seen more positive signs, with some
stabilization of share prices and, in general, a lower level of terrorist
assaults than in previous years.
Our primary investment strategies and objectives remain unchanged. Our
funds are based on indexes, and there has been no change in the underlying
indexes or portfolios, other than routine maintenance as outlined in the
prospectuses.
We continue to believe in the merits of investing in our AMIDEX35TM Mutual
Fund and our AMIDEXTM Cancer Innovations & Healthcare Fund, and we remain
committed to the index methodology as the best method of holding portfolios of
stocks in our specialty niches. We encourage our investors to remain focused on
the long-term prospects for the Funds, and to persevere through the
uncertainties that still lie ahead.
An important recent event was the AMIDEXTM Funds, Inc. shareholders
meeting, held on September 15, 2003. Thanks to the participation of AMIDEXTM
Funds, Inc. shareholders, in person and by proxy, we elected a new Investment
Adviser, Index Investments, LLC, a new Fund Auditor, McCurdy & Associates,
CPA's, and a new slate of Directors for our Board. More details about the
results of the meeting are contained in the Notes to the financial statements,
which accompany the attached report. I appreciate the support shown by our
shareholders, and thank all those who participated in the meeting and proxy.
Let's hope that the future brings comfort to those who are suffering, calm
to regions too long plagued by violence, and security, both physical and
economic, to all Americans.
Best regards,
/s/ Cliff Goldstein
Cliff Goldstein
President, AMIDEXTM Funds, Inc.
This report is intended for the Funds' shareholders. It may not be
distributed to prospective investors unless it is preceded or accompanied by the
current Fund prospectus.
1
AMIDEXTM FUNDS, INC. ANNUAL REPORT
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COMPARISON OF A $10,000 INVESTMENT IN THE AMIDEX35TM MUTUAL FUND AND THE S&P 500
TOTAL RETURN INDEX
[LINE GRAPH]
S&P 500
No-Load Class A Class C Total Return
08-Jun-99 10,000 10,000
31-Aug-99 10,000 10,052
19-Nov-99 12,460 9,600 10,855
30-Nov-99 12,300 9,620 10,606
29-Feb-00 19,070 14,950 10,465
19-May-00 17,080 12,520 10,000 10,804
31-May-00 17,050 13,340 10,320 10,914
31-Aug-00 19,820 15,490 11,969 11,692
30-Nov-00 15,100 11,800 9,098 10,159
28-Feb-01 14,082 10,992 8,456 9,607
31-May-01 12,554 9,744 7,498 9,762
31-Aug-01 9,388 7,298 5,657 8,841
30-Nov-01 9,004 7,003 5,412 8,917
28-Feb-02 7,860 6,110 4,719 8,693
31-May-02 6,464 5,024 3,873 8,410
31-Aug-02 5,837 4,537 3,486 7,250
30-Nov-02 6,363 4,953 3,802 7,444
28-Feb-03 5,685 4,425 3,384 6,721
31-May-03 7,850 6,110 4,668 7,732
--------------------------------------------------------------
No-Load Class Class A Class C S&P 500 Total Return
--------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
- --------------------------------------------------------------------------------------------------
Commencement of Operations through
05/31/03 One Year Ending 05/31/03
- --------------------------------------------------------------------------------------------------
S&P 500 Total (6.26)% (8.06)%
Return
- --------------------------------------------------------------------------------------------------
No-Load Class(1) (5.90)% 21.44%
- --------------------------------------------------------------------------------------------------
Class A(2) With sales charge Without sales With sales charge Without sales
(13.01)% charge (12.00)% 16.67% charge 21.62%
- --------------------------------------------------------------------------------------------------
Class C(3) With contingent Without With contingent Without
deferred sales contingent deferred sales contingent
charge (22.21)% deferred sales charge 19.21% deferred sales
charge (22.21)% charge 20.53%
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(1) The AMIDEX35(TM)Mutual Fund No-Load shares commenced operations on June 8,
1999.
(2) The AMIDEX35(TM)Mutual Fund Class A shares commenced operations on November
19, 1999.
(3) The AMIDEX35(TM)Mutual Fund Class C shares commenced operations on May 19,
2000.
2
AMIDEXTM FUNDS, INC. ANNUAL REPORT
- --------------------------------------------------------------------------------
Past performance cannot guarantee future results. The investment return and
principal value of an investment will fluctuate and, therefore, an investor's
shares, when redeemed, may be worth more or less than their original cost.
The above graph depicts the performance of the AMIDEX35(TM) Mutual Fund
versus the S&P 500 Total Return Index. The S&P 500 Total Return Index by
Standard and Poor's Corp. is a capitalization-weighted index comprising 500
issues listed on various exchanges, representing the performance of the stock
market generally. Please note that indices do not take into account any fees and
expenses of investing in the individual securities that they track, and
individuals cannot invest direct in any index.
As with any fund, save an index fund, that commonly compares its
performance to the S&P 500 Total Return Index, such a comparison may be said to
be inappropriate because of the dissimilarity between the Fund's investments and
the securities comprising the index; so too with the AMIDEX35(TM) Mutual Fund,
which will not invest in certain securities comprising this index.
COMPARISON OF A $10,000 INVESTMENT IN THE AMIDEXTM CANCER INNOVATIONS &
HEALTHCARE FUND AND THE RUSSELL 2000 HEALTH CARE INDEX
[LINE GRAPH]
Class A (1) RUSSELL 2000 Healthcare
11/1/2001 9,450 10,000
11/30/2001 9,726 10,256
12/31/2001 9,301 10,751
1/31/2002 8,781 9,842
2/28/2002 8,837 9,106
3/31/2002 8,894 9,796
4/30/2002 7,987 9,479
5/31/2002 7,675 8,960
6/30/2002 7,004 8,001
7/31/2002 6,938 6,967
8/31/2002 6,805 6,836
9/30/2002 6,427 6,561
10/31/2002 6,862 6,695
11/30/2002 7,013 7,154
12/31/2002 6,730 6,682
1/31/2003 6,758 6,442
2/28/2003 6,522 6,191
3/31/2003 6,815 6,551
4/30/2003 7,297 7,242
5/31/2003 8,034 8,392
----------------------------------------------
Class A RUSSELL 2000 Healthcare
----------------------------------------------
3
AMIDEXTM FUNDS, INC. ANNUAL REPORT
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AVERAGE ANNUAL TOTAL RETURN
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Commencement of Operations through
05/31/03 One Year Ending 05/31/03
- --------------------------------------------------------------------------------------------------
Russell 2000
Healthcare (10.51)% (6.33)%
- --------------------------------------------------------------------------------------------------
Class A (1) With sales charge Without sales With sales charge Without sales
(12.95)% charge (9.79)% (1.05)% charge 4.68%
- --------------------------------------------------------------------------------------------------
(1) The AMIDEX(TM) Cancer Innovations & Healthcare Fund Class A shares
commenced operations on November 1, 2001.
Past performance cannot guarantee future results. The investment return and
principal value of an investment will fluctuate and, therefore, an investor's
shares, when redeemed, may be worth more or less than their original cost.
The above graph depicts the performance of the AMIDEX(TM) Cancer
Innovations & Healthcare Fund versus the Russell 2000 Health Care Index. The
Russell 2000 Health Care Index is a capitalization-weighted index of companies
involved in medical services or health care. Please note that indices do not
take into account any fees and expenses of investing in the individual
securities that they track, and individuals cannot invest direct in any index.
As with any fund, save an index fund, that commonly compares its
performance to the Russell 2000 Health Care Index, such a comparison may be said
to be inappropriate because of the dissimilarity between the Fund's investments
and the securities comprising the index; so too with the AMIDEX(TM) Cancer
Innovations & Healthcare Fund, which will not invest in certain securities
comprising this index.
4
AMIDEXTM FUNDS, INC.
THE AMIDEX35TM MUTUAL FUND ANNUAL REPORT
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SCHEDULE OF INVESTMENTS
MAY 31, 2003
SHARES VALUE
------------ ------------
ISRAEL - 35.73%
COMMON STOCK - 35.73%
BANKING & INSURANCE - 16.00%
Bank Hapoalim Ltd. * 212,928 $ 455,409
Bank Leumi Le-Israel * 241,116 380,190
Israel Discount Bank Cl A * 159,710 122,353
Clal Insurance Enterprise * 8,756 144,838
Migdal Insurance Holdings * 170,416 225,670
Tefahot Israel Mortgage * 8,072 78,553
United Mizrahi Bank Ltd. * 34,315 101,579
------------
1,508,592
------------
CHEMICALS - 4.64%
Israel Chemicals Ltd. * 195,835 272,253
Makhteshim-Agan Industries Ltd. * 59,987 165,834
------------
438,087
------------
DIVERSIFIED HOLDINGS - 7.63%
Clal Industries & Investments * 26,851 99,340
Discount Investment Corp. 7,560 167,713
IDB Development Corp. Ltd. 9,229 201,169
IDB Holding Corp. Ltd. 6,490 138,512
Israel Corp. Ltd. * 1,005 112,437
------------
719,171
------------
FOOD - 1.16%
Osem Investment Ltd. * 14,770 109,389
------------
OIL COMPANIES - 1.09%
Delek Group Ltd. * 1,472 102,856
------------
TELECOMMUNICATIONS - 5.21%
Bezeq Israeli Telecommunications Corporation Ltd. 411,490 491,541
------------
Total Common Stock (Cost $4,701,530) 3,369,636
------------
Total Israel (Cost $4,701,530) 3,369,636
------------
5
AMIDEXTM FUNDS, INC.
THE AMIDEX35TM MUTUAL FUND ANNUAL REPORT
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SCHEDULE OF INVESTMENTS
MAY 31, 2003
UNITED STATES - 63.93%
COMMON STOCK - 63.16%
COMPUTER SOFTWARE - 23.61%
Amdocs Ltd. * 38,003 $ 741,438
Check Point Software Technologies Ltd. * 38,795 729,346
DSP Group, Inc. * 4,705 109,485
Mercury Interactive Corp. * 14,186 557,652
Precise Software Solutions Ltd. * 4,700 88,313
------------
2,226,234
------------
DIGITAL IMAGING - 3.65%
Creo Products, Inc. * 8,600 71,380
Electronics for Imaging, Inc. * 9,428 187,334
Orbotech Ltd. * 5,382 84,928
------------
343,642
------------
ELECTRONIC DESIGN AUTOMATION - 0.41%
Verisity Ltd. * 2,800 38,559
------------
ELECTRONIC EQUIPMENT - 0.80%
Zoran Corp. * 3,700 75,739
------------
MEDICAL PRODUCTS - 0.44%
Given Imaging Ltd. * 4,000 33,724
Lumenis Ltd. * 5,000 8,000
------------
41,724
------------
PHARMACEUTICAL - 25.76%
Taro Pharmaceutical Industries Ltd. * 4,600 218,776
Teva Pharmaceutical Industries ADR 43,608 2,210,446
------------
2,429,222
------------
TELECOMMUNICATIONS - 8.49%
Comverse Technology, Inc. * 30,877 469,639
Harmonic, Inc. * 8,500 40,120
NDS Group Plc. ADR* 9,300 155,310
Partner Communications ADR * 30,600 135,864
------------
800,933
------------
6
AMIDEXTM FUNDS, INC.
THE AMIDEX35TM MUTUAL FUND ANNUAL REPORT
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
MAY 31, 2003
Total Common Stock (Cost $12,819,168) 5,956,053
------------
SHORT-TERM INVESTMENTS - 0.77%
First American Treasury Obligations Fund,
0.51% ** (Cost $72,562) 72,562 72,562
------------
Total United States (Cost $12,891,730) 6,028,615
------------
TOTAL INVESTMENTS (COST $17,593,260) - 99.66% 9,398,251
OTHER ASSETS IN EXCESS OF LIABILITIES - 0.34% 32,227
------------
NET ASSETS - 100% $ 9,430,478
============
* Non-income producing security.
ADR - American depository receipt
** Variable rate security; the rate shown represents the rate at May 31, 2003.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
7
AMIDEXTM FUNDS, INC.
AMIDEXTM CANCER INNOVATIONS & HEALTHCARE FUND ANNUAL REPORT
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
MAY 31, 2003
SHARES VALUE
------------ ------------
COMMON STOCK - 96.54%
BIOTECHNOLOGY - 33.45%
Amgen, Inc. * 680 $ 44,003
Biogen, Inc. * 500 21,220
Chiron Corp. * 800 35,272
Enzon Pharmaceuticals, Inc. * 100 1,491
Genentech, Inc. * 2,000 125,220
Genzyme Corp. * 900 42,741
Human Genome Sciences, Inc. * 300 4,395
Idec Pharmaceuticals Corp. * 600 22,902
Immunomedics, Inc. * 100 698
Millennium Pharmaceuticals, Inc. * 900 13,995
Myriad Genetics, Inc. * 100 1,530
Protein Design Labs, Inc. * 200 2,862
------------
316,329
------------
HEALTHCARE PRODUCTS - 12.89%
Amersham Plc. ADR 800 31,312
Beckman Coulter, Inc. 300 12,195
Cytyc Corp. * 200 2,078
Johnson & Johnson 1,200 65,220
Varian Medical Systems, Inc. * 200 11,150
------------
121,955
------------
PHARMACEUTICALS - 50.20%
Abbott Laboratories 500 22,275
Abgenix, Inc. * 200 2,150
AstraZeneca Plc. ADR 600 24,744
Aventis SA ADR 300 15,738
Bristol-Myers Squibb Co. 600 15,360
Celgene Corp. * 200 6,296
Cell Therapeutics, Inc. * 100 1,251
Celltech Group Plc. ADR * 600 6,510
Elan Corp. Plc. ADR * 100 612
Eli Lilly & Co. 400 23,908
Gilead Sciences, Inc. * 800 42,208
GlaxoSmithKline Plc. ADR 1,100 44,011
ICN Pharmaceuticals, Inc. 200 3,000
8
AMIDEXTM FUNDS, INC.
AMIDEXTM CANCER INNOVATIONS & HEALTHCARE FUND ANNUAL REPORT
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
MAY 31, 2003
SHARES VALUE
------------ ------------
Ilex Oncology, Inc. * 100 $ 1,640
ImClone Systems * 300 8,550
Medarex, Inc. * 200 1,304
Medimmune, Inc. * 1,100 38,995
Merck & Co., Inc. 900 50,022
Novartis AG ADR 1,000 40,000
Pfizer, Inc. 2,700 83,754
QLT, Inc. * 100 $ 1,348
Schering-Plough Corp. 600 11,070
SICOR, Inc. * 200 4,228
Tularik, Inc. * 100 939
Vertex Pharmaceuticals, Inc. * 200 2,906
Wyeth 500 21,925
------------
474,744
------------
TOTAL COMMON STOCK (Cost $1,066,406) 913,028
------------
SHORT-TERM INVESTMENTS - 3.41%
First American Treasury Obligations Fund
0.51% ** (Cost $32,250) 32,250 32,250
------------
TOTAL INVESTMENTS (COST $ 1,098,656) - 99.95% $ 945,278
OTHER ASSETS IN EXCESS OF LIABILITIES - 0.05% 514
------------
NET ASSETS - 100% $ 945,792
------------
* Non-income producing security.
ADR - American Depository Receipt
** Variable rate security; the rate shown represents the rate at May 31, 2003.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
9
AMIDEXTM FUNDS, INC.
STATEMENT OF ASSETS AND LIABILITIES ANNUAL REPORT
- --------------------------------------------------------------------------------
MAY 31, 2003
AMIDEX35TM
MUTUAL FUND
--------------
ASSETS:
Investments, at market
(identified cost: $17,593,260) $ 9,398,251
Cash 131
Receivables:
Dividends 2,540
Interest 101
Investments sold 25,283
Fund shares sold 36,382
Prepaid expenses 26,476
Due from advisor 2,000
--------------
Total assets 9,491,164
--------------
LIABILITIES:
Payables:
Consulting fees for Advisory services 7,831
Distribution fees 12,804
Fund accounting fees 7,281
Fund shares redeemed 3
Other liabilities and accrued expenses 32,767
--------------
Total liabilities 60,686
--------------
NET ASSETS $ 9,430,478
==============
NET ASSETS CONSIST OF:
Common stock $ 134
Additional paid-in capital 22,074,356
Distributable earnings (Note 5) (12,644,012)
--------------
Total Net Assets (1,338,346 shares outstanding; 500,000,000
shares of $0.0001 par value authorized) $ 9,430,478
==============
NO-LOAD CLASS SHARES:
Net Assets applicable to 875,598 shares outstanding (Note 2) $ 6,798,898
==============
Net Asset Value, offering and redemption price per share $ 7.76
==============
10
AMIDEXTM FUNDS, INC.
STATEMENT OF ASSETS AND LIABILITIES ANNUAL REPORT
- --------------------------------------------------------------------------------
MAY 31, 2003
AMIDEX35TM
MUTUAL FUND
--------------
CLASS A SHARES:
Net Assets applicable to 355,971 shares outstanding (Note 2) $ 2,142,757
==============
Net Asset Value and redemption price per share $ 6.02
==============
Offering price per share Class A $ 6.27
==============
CLASS C SHARES:
Net Assets applicable to 106,777 shares outstanding (Note 2) $ 488,823
==============
Net Asset Value and offering price per share $ 4.58
==============
Redemption price per share Class C $ 4.53
==============
MAY 31, 2003
AMIDEXTM CANCER
INNOVATIONS
& HEALTHCARE FUND
--------------
ASSETS:
Investments, at market (identified cost: $1,098,656) $ 945,278
Receivables:
Dividends 1,815
Interest 2
Prepaid expenses 3,857
Due from advisor 1,534
--------------
Total assets 952,486
--------------
LIABILITIES:
Payables:
Consulting fees for Advisory services 952
Distribution fees 350
Fund accounting fees 762
Other liabilities 4,630
--------------
Total liabilities 6,694
--------------
NET ASSETS $ 945,792
==============
11
AMIDEXTM FUNDS, INC.
STATEMENT OF ASSETS AND LIABILITIES ANNUAL REPORT
- --------------------------------------------------------------------------------
MAY 31, 2003
AMIDEXTM CANCER
INNOVATIONS
& HEALTHCARE FUND
--------------
NET ASSETS CONSIST OF:
Common stock $ 11
Additional paid-in capital 1,106,781
Distributable earnings (Note 5) (161,000)
--------------
Total Net Assets (111,253 shares outstanding; 500,000,000
shares of $0.0001 par value authorized) $ 945,792
==============
CLASS A SHARES:
Net Assets applicable to 111,253 shares outstanding (Note 2) $ 945,792
==============
Net Asset Value and redemption price per share $ 8.50
==============
Offering price per share Class A $ 8.99
==============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
12
AMIDEXTM FUNDS, INC.
STATEMENT OF OPERATIONS ANNUAL REPORT
- --------------------------------------------------------------------------------
AMIDEX35TM
MUTUAL FUND
FOR THE YEAR ENDED
MAY 31, 2003
--------------
INVESTMENT INCOME:
Interest $ 522
Dividends (net of foreign taxes: $8,445) 34,126
--------------
Total investment income 34,648
--------------
EXPENSES:
Accounting and transfer agent fees 63,708
Consulting fees 49,375
Operating service fees 25,206
Audit fees 17,303
Legal fees 14,382
Custody fees 12,846
Distribution fees - No-load Class 12,166
Investment advisory fees 8,693
Printing fees 8,045
Out of pocket expenses 7,920
Distribution fees - Class A 4,115
Distribution fees - Class C 3,833
Insurance fees 2,723
Registration fees 2,384
Miscellaneous 12,381
--------------
Total expenses 245,080
--------------
Net investment loss (210,432)
--------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investments (1,143,686)
Net change in unrealized appreciation on investments 2,918,399
--------------
1,774,713
--------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 1,564,281
==============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
13
AMIDEXTM FUNDS, INC.
STATEMENT OF OPERATIONS ANNUAL REPORT
- --------------------------------------------------------------------------------
AMIDEXTM CANCER
INNOV. &
HEALTHCARE FUND
FOR THE YEAR
ENDED
MAY 31, 2003
--------------
INVESTMENT INCOME:
Interest $ 658
Dividends 10,105
--------------
Total investment income 10,763
--------------
EXPENSES:
Accounting and transfer agent fees 8,336
Consulting fees 4,658
Custody fees 4,360
Distribution fees - Class A 2,212
Out of pocket expenses 1,987
Audit fees 1,902
Legal fees 1,665
Service fees 1,282
Investment advisory fees 1,049
Printing fees 853
Registration fees 508
Insurance fees 346
Distribution fees - Class C 66
Miscellaneous 1,308
--------------
Total expenses 30,532
--------------
Net investment loss (19,769)
--------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investments (7,622)
Net change in unrealized appreciation on investments 56,156
--------------
48,534
--------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 28,765
==============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
14
AMIDEXTM FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS ANNUAL REPORT
- --------------------------------------------------------------------------------
AMIDEX35TM Mutual Fund
Year Ended Year Ended
INCREASE IN NET ASSETS May 31, 2003 May 31, 2002
------------ ------------
Operations:
Net investment loss $ (210,432) $ (169,536)
Net realized loss on investments (1,143,686) (2,505,346)
Net change in unrealized appreciation
(depreciation) on investments 2,918,399 (5,061,891)
------------ ------------
Net increase (decrease) in net assets resulting
from operations 1,564,281 (7,736,773)
------------ ------------
Increase (decrease) in net assets from Fund
share transactions (Note 2) 39,165 (1,134,004)
------------ ------------
Total increase (decrease) in net assets 1,603,446 (8,870,777)
NET ASSETS:
Beginning of period 7,827,032 16,697,809
------------ ------------
End of period $ 9,430,478 $ 7,827,032
============ ============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
15
AMIDEXTM FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS ANNUAL REPORT
- --------------------------------------------------------------------------------
AMIDEXTM CANCER
INNOVATIONS & HEALTCARE FUND
COMMENCEMENT
OF OPERATIONS
YEAR ENDED THROUGH
MAY 31, 2003 MAY 31, 2002*
------------ ------------
INCREASE IN NET ASSETS
Operations:
Net investment loss $ (19,769) $ (1,699)
Net realized loss on investments (7,622) --
Net change in unrealized appreciation
(depreciation) on investments 56,156 (209,534)
------------ ------------
Net increase (decrease) in net assets resulting
from operations 28,765 (211,233)
------------ ------------
Increase (decrease) in net assets from Fund
share transactions (Note 2) (121,334) 1,249,594
------------ ------------
Total increase (decrease) in net assets (92,569) 1,038,361
NET ASSETS:
Beginning of period 1,038,361 --
------------ ------------
End of period $ 945,792 $ 1,038,361
============ ============
* The AMIDEXTM Cancer Innovations & Healthcare Fund commenced operations on
November 1, 2001.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
16
AMIDEXTM FUNDS, INC.
FINANCIAL HIGHLIGHTS ANNUAL REPORT
- --------------------------------------------------------------------------------
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH FISCAL YEAR OR PERIOD
AMIDEX35TM MUTUAL FUND
NO-LOAD CLASS
------------------------------------------------------------
For the Year For the Year For the Year For the Period
Ended Ended Ended Ended
May 31, 2003 May 31, 2002 May 31, 2001 May 31, 2000(1)
------------ ------------ ------------ -------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 6.39 $ 12.41 $ 17.05 $ 10.00
---------- ---------- ---------- ----------
INVESTMENT OPERATIONS:
Net investment loss (0.18) (0.14) (0.22) (0.23)
Net realized and unrealized gain (loss) on
investments 1.55 (5.88) (4.22) 7.28
---------- ---------- ---------- ----------
Total from investment operations 1.37 (6.02) (4.44) 7.05
---------- ---------- ---------- ----------
DISTRIBUTIONS:
From net realized capital gain -- -- (0.20) --
---------- ---------- ---------- ----------
Total distributions -- -- (0.20) --
---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $ 7.76 $ 6.39 $ 12.41 $ 17.05
========== ========== ========== ==========
TOTAL RETURN 21.44% (48.51)% (26.37)% 70.50%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's) $ 6,799 $ 5,360 $ 11,462 $ 10,981
Ratio of expenses to average net
assets: 3.53% 2.20% 2.20% 2.85%2
Ratio of net investment loss to
average net assets: (3.02)% (1.61)% (1.36)% (1.50)%2
Portfolio turnover rate 8.72% 27.70% 41.60% 18.16%
1 The AMIDEX35TM Mutual Fund No-load Class shares commenced operations on
June 8, 1999.
2 Annualized
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
17
AMIDEXTM FUNDS, INC.
FINANCIAL HIGHLIGHTS ANNUAL REPORT
- --------------------------------------------------------------------------------
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH FISCAL YEAR OR PERIOD
AMIDEX35TM MUTUAL FUND
CLASS A
------------------------------------------------------------
For the Year For the Year For the Year For the Period
Ended Ended Ended Ended
May 31, 2003 May 31, 2002 May 31, 2001 May 31, 2000(1)
------------ ------------ ------------ -------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 4.95 $ 9.62 $ 13.33 $ 9.60
---------- ---------- ---------- ----------
INVESTMENT OPERATIONS:
Net investment loss (0.14) (0.11) (0.20) (0.10)
Net realized and unrealized gain (loss) on
investments 1.21 (4.56) (3.31) 3.83
---------- ---------- ---------- ----------
Total from investment operations 1.07 (4.67) (3.51) 3.73
---------- ---------- ---------- ----------
DISTRIBUTIONS:
From net realized capital gain -- -- (0.20) --
---------- ---------- ---------- ----------
Total distributions -- -- (0.20) --
---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $ 6.02 $ 4.95 $ 9.62 $ 13.33
========== ========== ========== ==========
TOTAL RETURN 21.62% (48.54)% (26.75)% 38.85%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's) $ 2,142 $ 2,003 $ 3,930 $ 645
Ratio of expenses to average net
assets: 3.47% 2.20% 2.20% 2.70%2
Ratio of net investment loss to
average net assets: (2.98)% (1.61)% (1.60)% (1.48)%2
Portfolio turnover rate 8.72% 27.70% 41.60% 18.16%
1 The AMIDEX35TM Mutual Fund Class A shares commenced operations on November
19, 1999.
2 Annualized
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
18
AMIDEXTM FUNDS, INC.
FINANCIAL HIGHLIGHTS ANNUAL REPORT
- --------------------------------------------------------------------------------
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH FISCAL YEAR OR PERIOD
AMIDEX35TM MUTUAL FUND
CLASS C
------------------------------------------------------------
For the Year For the Year For the Year For the Period
Ended Ended Ended Ended
May 31, 2003 May 31, 2002 May 31, 2001 May 31, 2000(1)
------------ ------------ ------------ -------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 3.80 $ 7.43 $ 10.42 $ 10.00
---------- ---------- ---------- ----------
INVESTMENT OPERATIONS:
Net investment loss (0.13) (0.12) (0.23) (0.01)
Net realized and unrealized gain (loss) on
investments 0.91 (3.51) (2.56) 0.43
---------- ---------- ---------- ----------
Total from investment operations 0.78 (3.63) (2.79) 0.42
---------- ---------- ---------- ----------
DISTRIBUTIONS:
From net realized capital gain -- -- (0.20) --
---------- ---------- ---------- ----------
Total distributions -- -- (0.20) --
---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $ 4.58 $ 3.80 $ 7.43 $ 10.42
========== ========== ========== ==========
TOTAL RETURN 20.53% (48.86)% (27.32)% 4.20%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's) $ 489 $ 464 $ 1,305 $ 38
Ratio of expenses to average net
assets: 4.22% 2.95% 2.95% 2.51%2
Ratio of net investment loss to
average net assets: (3.73)% (2.31)% (2.39)% (2.14)%2
Portfolio turnover rate 8.72% 27.70% 41.60% 18.16%
1 The AMIDEX35TM Mutual Fund Class C shares commenced operations on May 19,
2000.
2 Annualized
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
19
AMIDEXTM Funds, Inc.
FINANCIAL HIGHLIGHTS ANNUAL REPORT
- --------------------------------------------------------------------------------
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
AMIDEXTM CANCER INNOVATIONS & HEALTHCARE FUND
CLASS A
------------------------------
FOR THE YEAR FOR THE PERIOD
ENDED ENDED
MAY 31, 2003 MAY 31, 2002(1)
------------ ------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 8.12 $ 10.00
------------ ------------
INVESTMENT OPERATIONS:
Net investment loss (0.16) (0.02)
Net realized and unrealized loss on
investments 0.54 (1.86)
------------ ------------
Total from investment operations 0.38 (1.88)
------------ ------------
NET ASSET VALUE, END OF PERIOD $ 8.50 $ 8.12
============ ============
TOTAL RETURN 4.68% (18.80)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's) $ 946 $ 1,023
Ratio of expenses to average net
assets: 3.43% 1.24%2
Ratio of net investment loss to
average net assets: (2.22)% (0.29)%2
Portfolio turnover rate 0.00% 0.00%
1 The AMIDEXTM Cancer Innovations & Healthcare Fund Class A shares commenced
operations on November 1, 2001.
2 Annualized
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
20
AMIDEXTM FUNDS, INC. ANNUAL REPORT
- --------------------------------------------------------------------------------
NOTES TO THE FINANCIAL STATEMENTS
MAY 31, 2003
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
AMIDEXTM Funds, Inc. (the "Company") was incorporated under the laws of the
state of Maryland on April 27, 1999, and currently consists of two active
portfolios, The AMIDEX35TM Mutual Fund, and the AMIDEXTM Cancer Innovations &
Healthcare Fund (each a "Fund" and collectively the "Funds"). The Funds are
non-diversified Funds. The Company is registered as an open-end management
investment company under the Investment Company Act of 1940 (the "1940 Act").
The Funds were registered to offer four classes of shares, Class A, Class B,
Class C and No-load class, with only the Class A, Class C and No-load shares
currently being offered in the AMIDEX35 TM Mutual Fund and only Class A shares
being offered in the AMIDEXTM Cancer Innovations & Healthcare Fund. Each class
differs as to sales charges, minimum investment amounts and ongoing fees. Income
and realized/unrealized gains or losses are allocated to each class based on
relative share balances. The Funds' investment strategies are capital growth.
The AMIDEX35 TM Mutual Fund became effective with the SEC on April 27, 1999 and
commenced operations on June 8, 1999. The AMIDEXTM Cancer Innovations &
Healthcare Fund became effective with the SEC on August 1, 2001 and commenced
operations on November 1, 2001.
The costs incurred in connection with the organization, initial
registration and public offering of shares were paid by TransNations
Investments, LLC. Accordingly, no organization costs have been recorded by the
Funds.
The Board of Directors, currently comprised of a sole Director, Clifford A.
Goldstein, is currently managing the Funds' portfolios and is currently taking
action to appoint another investment adviser. The expense cap, which was in
place while the investment adviser was responsible for the expenses of the
Funds, has been terminated. With the resignation of the Advisor, the Funds now
bear all expenses related to the Funds operations. Proxy materials were prepared
for a Special Meeting of Shareholders that was convened on September 15, 2003
(See Note 7).
The following is a summary of significant accounting policies consistently
followed by the Funds.
a) Investment Valuation--Common stocks and other equity securities listed on a
securities exchange or quoted on a national market system are valued at 4:00
p.m., New York time, on the day of valuation. Price information on listed stocks
is taken from the exchange where the security is primarily traded. Securities
that are listed on an exchange but which are not traded on the valuation date
are valued at the most recent bid quotation. Other assets and securities for
which no quotations are readily available are valued at fair value as determined
in good faith by the Adviser under the supervision of the Board of Directors. At
May 31, 2003, no securities were valued as determined by the Board of Directors.
Short-term instruments (those with remaining maturities of 60 days or less) are
valued at amortized cost, which approximates fair market value.
21
AMIDEXTM FUNDS, INC. ANNUAL REPORT
- --------------------------------------------------------------------------------
NOTES TO THE FINANCIAL STATEMENTS
MAY 31, 2003
b) Foreign Currency Translation--Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S. dollars
based on the exchange rate of such currencies against U.S. dollars on the date
of valuation. Purchases and sales of securities and income items denominated in
foreign currencies are translated into U.S. dollars at the exchange rate in
effect on the transaction date. The Fund does not separately report the effect
of changes in foreign exchange rates from changes in market prices on securities
held. Such changes are included in net realized and unrealized gain or loss from
investments. Realized foreign exchange gains or losses arise from sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions and the difference between the
recorded amounts of dividends, interest and foreign withholding taxes, and the
U.S. dollar equivalent of the amounts actually received or paid. Net unrealized
foreign exchange gains or losses arise from changes in foreign exchange rates on
foreign currency denominated assets and liabilities other than investments in
securities held at the end of the reporting period.
c) Federal Income Taxes--No provision for federal income taxes has been made
since the AMIDEX35 TM Mutual Fund and the AMIDEXTM Cancer Innovations and
Healthcare Fund has complied to date with the provision of the Internal Revenue
Code applicable to regulated investment companies and intends to so comply in
the future and to distribute substantially all of its net investment income and
realized capital gains in order to relieve the Fund from all federal income
taxes.
d) Distributions to Shareholders--Dividends from net investment income and
distributions of net realized capital gains, if any, will be declared and paid
at least annually. Income and capital gain distributions are determined in
accordance with income tax regulations that may differ from accounting
principles generally accepted in the United States of America.
e) Use of Estimates--The preparation of financial statements in conformity
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 disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.
f) Other--Investment and shareholder transactions are recorded on trade date.
The Funds determine the gain or loss realized from the investment transactions
by comparing the original cost of the security lot sold with the net sales
proceeds. Dividend income is recognized on the ex-dividend date or as soon as
information is available to the Fund and interest income is recognized on an
accrual basis. Accounting principles generally accepted in the United States of
America require that
22
AMIDEXTM FUNDS, INC. ANNUAL REPORT
- --------------------------------------------------------------------------------
NOTES TO THE FINANCIAL STATEMENTS
MAY 31, 2003
permanent financial reporting tax differences relating to shareholder
distributions be reclassified to paid-in-capital for both The AMIDEX35TM Mutual
Fund and The AMIDEXTM Cancer Innovations & Healthcare Fund.
2. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the AMIDEX35TM Mutual Fund for
the year ended May 31, 2003 were as follows:
----------------------------------------------------------------------
NO-LOAD
----------------------------------------------------------------------
SHARES AMOUNT
----------------------------------------------------------------------
Sold 162,832 $ 1,043,883
----------------------------------------------------------------------
Redeemed (126,203) (759,597)
-------- -------------
----------------------------------------------------------------------
Net Increase 36,629 $ 284,286
-------- -------------
----------------------------------------------------------------------
----------------------------------------------------------------------
CLASS A
----------------------------------------------------------------------
SHARES AMOUNT
----------------------------------------------------------------------
Sold 30,559 $ 161,957
----------------------------------------------------------------------
Redeemed (79,192) (355,694)
-------- -------------
----------------------------------------------------------------------
Net Decrease (48,633) $ (193,737)
-------- -------------
----------------------------------------------------------------------
----------------------------------------------------------------------
CLASS C
----------------------------------------------------------------------
SHARES AMOUNT
----------------------------------------------------------------------
Sold 16,468 $ 62,034
----------------------------------------------------------------------
Redeemed (31,920) (113,418)
-------- -------------
----------------------------------------------------------------------
Net Decrease (15,452) $ (51,384)
-------- -------------
----------------------------------------------------------------------
Transactions in shares of the AMIDEXTM Cancer Innovations & Healthcare Fund
for the year ended May 31, 2003 were as follows:
----------------------------------------------------------------------
CLASS A
----------------------------------------------------------------------
SHARES AMOUNT
----------------------------------------------------------------------
Sold 12,278 $ 90,359
----------------------------------------------------------------------
Redeemed (26,983) (197,875)
-------- -------------
----------------------------------------------------------------------
Net Decrease (14,705) $ (107,516)
-------- -------------
----------------------------------------------------------------------
23
AMIDEXTM FUNDS, INC. ANNUAL REPORT
- --------------------------------------------------------------------------------
NOTES TO THE FINANCIAL STATEMENTS
MAY 31, 2003
----------------------------------------------------------------------
CLASS C
----------------------------------------------------------------------
SHARES AMOUNT
----------------------------------------------------------------------
Sold -- $ --
----------------------------------------------------------------------
Redeemed (1,897) (13,818)
-------- -------------
----------------------------------------------------------------------
Net Decrease (1,897) $ (13,818)
-------- -------------
----------------------------------------------------------------------
Transactions in shares of capital stock for the AMIDEX35TM Mutual Fund for
the year ended May 31, 2002 were as follows:
----------------------------------------------------------------------
NO-LOAD
----------------------------------------------------------------------
SHARES AMOUNT
----------------------------------------------------------------------
Sold 98,403 $ 825,943
----------------------------------------------------------------------
Redeemed (183,429) (1,617,026)
-------- -------------
----------------------------------------------------------------------
Net Decrease (85,026) $ (791,083)
-------- -------------
----------------------------------------------------------------------
----------------------------------------------------------------------
CLASS A
----------------------------------------------------------------------
SHARES AMOUNT
----------------------------------------------------------------------
Sold 130,217 $ 837,283
----------------------------------------------------------------------
Redeemed (134,325) (901,835)
-------- -------------
----------------------------------------------------------------------
Net Decrease (4,108) $ (64,552)
-------- -------------
----------------------------------------------------------------------
----------------------------------------------------------------------
CLASS C
----------------------------------------------------------------------
SHARES AMOUNT
----------------------------------------------------------------------
Sold 5,344 $ 27,474
----------------------------------------------------------------------
Redeemed (58,791) (305,843)
-------- -------------
----------------------------------------------------------------------
Net Decrease (53,447) $ (278,369)
-------- -------------
----------------------------------------------------------------------
Transactions in shares of the AMIDEXTM Cancer Innovations & Healthcare Fund
for the period from November 1, 2001 to May 31, 2002 were as follows:
----------------------------------------------------------------------
CLASS A
----------------------------------------------------------------------
SHARES AMOUNT
----------------------------------------------------------------------
Sold 141,559 $ 1,368,767
----------------------------------------------------------------------
Redeemed (15,601) (136,934)
-------- -------------
----------------------------------------------------------------------
Net Increase 125,958 $ 1,231,833
-------- -------------
----------------------------------------------------------------------
24
AMIDEXTM FUNDS, INC. ANNUAL REPORT
- --------------------------------------------------------------------------------
NOTES TO THE FINANCIAL STATEMENTS
MAY 31, 2003
----------------------------------------------------------------------
CLASS C
----------------------------------------------------------------------
SHARES AMOUNT
----------------------------------------------------------------------
Sold 1,897 $ 17,761
----------------------------------------------------------------------
Redeemed -- --
-------- -------------
----------------------------------------------------------------------
Net Increase 1,897 $ 17,761
-------- -------------
----------------------------------------------------------------------
3. INVESTMENT TRANSACTIONS
For the year ended May 31, 2003, aggregate purchases and sales of
investment securities (excluding short-term investments) for each Fund were as
follows:
- --------------------------------------------------------------------------------
Purchases Sales
--------- -----
- --------------------------------------------------------------------------------
AMIDEX35 TM Mutual Fund $ 608,257 $ 869,255
- --------------------------------------------------------------------------------
AMIDEX TM Cancer Innovations & Healthcare Fund -- 71,907
- --------------------------------------------------------------------------------
4. ADVISORY FEES AND OTHER RELATED PARTY TRANSACTIONS
For the period of June 1, 2002 through August 31, 2002, the Funds had
entered into an Advisory Agreement with Equity Income Advisors, Inc. ("EIA") to
provide investment management services to the Funds. Pursuant to the Advisory
Agreement, EIA was entitled to receive a fee, calculated daily and payable
monthly at the annual rate of 0.50% for the AMIDEX35TM Mutual Fund and 0.45% for
the AMIDEXTM Cancer Innovations & Healthcare Fund as applied to the Funds' daily
net assets. For the period of June 1, 2002 through August 31, 2002, the
AMIDEX35TM Mutual Fund incurred $8,693 of advisory fees and the AMIDEXTM Cancer
Innovations & Healthcare Fund incurred $1,049 of advisory fees.
For the period of June 1, 2002 through August 31, 2002, the Funds had
entered into an Operating Services Agreement (the "Servicing Agreement) with EIA
to provide or arrange for day-to-day operational services to the Funds. Pursuant
to the Servicing Agreement, EIA was entitled to receive a fee, calculated daily
and payable monthly at the annual rate of 1.45% for the AMIDEX35TM Mutual Fund
and 0.55% for the AMIDEXTM Cancer Innovations & Healthcare Fund, applied to the
Funds' daily net assets. For the period of June 1, 2002 through August 31, 2002,
the AMIDEX35TM Mutual Fund incurred $25,206 of Servicing Agreement fees and the
AMIDEXTM Cancer Innovations & Healthcare Fund incurred $1,282 of Servicing
Agreement fees.
25
AMIDEXTM FUNDS, INC. ANNUAL REPORT
- --------------------------------------------------------------------------------
NOTES TO THE FINANCIAL STATEMENTS
MAY 31, 2003
EIA was a subsidiary company of InCap Group, Inc. InCap Service Company
("ISC"), the Funds' administrator, transfer agent, and pricing and accounting
agent, was also and currently is a subsidiary company of InCap Group, Inc. EIA
utilized ISC under the Investment Company Services Agreement ("ICSA").
The Advisory Agreement and the Servicing Agreement--including the service
providers commitment-- were terminated effective September 1, 2002. The
termination of these agreements has resulted in an increase of the expense
ratios of the Funds, as the Funds are now responsible for paying all Fund
expenses. The Board of Directors, currently comprised of a sole Director,
Clifford A. Goldstein, is currently managing the Funds' portfolios. A Special
Meeting of Shareholders has been scheduled for September 15, 2003 to appoint
another investment adviser and establish a new Board of Directors. During the
interim, the Board has contracted Gadi Beer to serve as a consultant to assist
in the management of the Funds. For his services, Mr. Beer is receiving $6,000
per month. For the period from September 1, 2002 to May 31, 2003, Mr. Beer
earned $54,033 of consulting fees, with $6,033 remaining payable at May 31, 2003
for both Funds.
The Funds and the Fund's Director have entered into an ICSA with ISC to
provide day-to-day operational services to the Funds including, but not limited
to, accounting, administrative, transfer agent, dividend disbursement, registrar
and record keeping services. For its services, ISC currently receives $8,000 per
month. For the period from September 1, 2002 to May 31, 2003, ISC earned
$72,044, with $8,044 remaining payable at May 31, 2003 for both Funds. Officers
of the Funds are also employees of ISC.
The Funds and the Adviser have entered into a Distribution Agreement with
InCap Securities, Inc. to provide distribution services to the Funds. InCap
Securities, Inc. serves as underwriter/distributor of the Funds.
A separate plan of distribution has been adopted under Rule 12b-1 of the
Investment Company Act of 1940 for each class of shares. With respect to Class A
and the No-load class of shares, the plan provides that the Funds may pay a
servicing or Rule 12b-1 fee of 0.25% annually of the Funds' average net assets
attributable to each class of shares respectively and 1.00% annually of the
Funds' average net assets attributable to Class C shares to persons or
institutions for performing certain servicing functions for the Funds'
shareholders. The distribution plans are compensation plans, which also allow
the Funds to pay or reimburse expenditures in connection with sales, and
promotional services related to distribution of the Funds' shares, including
personal services provided to prospective and existing shareholders.
26
AMIDEXTM FUNDS, INC. ANNUAL REPORT
- --------------------------------------------------------------------------------
NOTES TO THE FINANCIAL STATEMENTS
MAY 31, 2003
The distribution plans for the following classes of shares in the
AMIDEX35TM Mutual Fund Class A, the No-load class and the Class C shares took
effect November 19, 1999, June 8, 1999 and May 19, 2000, respectively. The
distribution plan for the Class A and Class C shares in the AMIDEXTM Cancer
Innovations & Healthcare Fund took effect November 1, 2001 and February 25,
2002, respectively. For the year ended May 31, 2003, the AMIDEX35TM Mutual Fund
incurred $20,114 in 12b-1 fees. For the year ended May 31, 2003, the AMIDEXTM
Cancer Innovations & Healthcare Fund incurred $2,278 in 12b-1 fees. InCap
Securities, Inc. received $3,490 in 12b-1 fees from the AMIDEX35TM Mutual Fund
and $787 from the AMIDEXTM Cancer Innovations & Healthcare Fund.
The distribution plans should have been renewed by August 3, 2002 by the
Board of Directors of the Funds. Continuation of the plans required that a
majority of those Directors who are not "interested persons" vote to continue
the plans. Due to the fact that there were no Independent Directors available to
vote on the plans as of August 3, 2002, the plans were approved and renewed by
the sole Director, Clifford A. Goldstein. A new distribution plan was voted on
at a Special Meeting of Shareholders in September 2003.
5. TAX MATTERS
There were no distributions during the fiscal years 2003 and 2002 for the
AMIDEX35TM Mutual Fund or the AMIDEXTM Cancer Innovations & Healthcare Fund.
As of May 31, 2003, the components of distributable earnings on a tax basis
were as follows:
- ------------------------------------------------------------------------------------
AMIDEXTM
Cancer
AMIDEX35TM Innovations &
Mutual Fund Healthcare Fund
- ------------------------------------------------------------------------------------
Cost of investments for tax purposes $ 20,176,002 $ 1,106,278
- ------------------------------------------------------------------------------------
Unrealized Appreciation/ (Depreciation):
- ------------------------------------------------------------------------------------
Gross Appreciation 1,364,331 52,520
- ------------------------------------------------------------------------------------
Gross Depreciation (12,142,082) (213,520)
------------ ------------
- ------------------------------------------------------------------------------------
Net Unrealized Depreciation $(10,777,751) $ (161,000)
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Undistributed Ordinary Income: -- --
- ------------------------------------------------------------------------------------
Undistributed Long-term Capital Gains/(Losses), Net (1,866,261) --
------------ ------------
- ------------------------------------------------------------------------------------
Distributable Earnings, Net $(12,644,012) $ (161,000)
------------ ------------
- ------------------------------------------------------------------------------------
The difference between book basis and tax-basis unrealized depreciation is
attributable primarily to the tax deferral of losses on wash sales and
post-October losses.
27
AMIDEXTM FUNDS, INC. ANNUAL REPORT
- --------------------------------------------------------------------------------
NOTES TO THE FINANCIAL STATEMENTS
MAY 31, 2003
As of May 31, 2003 the Funds had capital loss carryforwards available for
federal income tax purposes as follows:
----------------------------------------------------------------------
AMIDEXTM Cancer
AMIDEX35TM Innovations &
Mutual Fund Healthcare Fund
Expiring in: 2010 $ (1,795,267) $ --
----------------------------------------------------------------------
Expiring in: 2011 $ (100,824) $ --
----------------------------------------------------------------------
6. CONCENTRATION OF RISK
The AMIDEX35TM Mutual Fund invests exclusively in common stock of Israeli
companies. Investing in the companies from one geographic region may pose
additional risks inherent to a region's economical and political situation.
A large portion of investments held by AMIDEX35TM Mutual Fund are
considered investments in the technology sector of the market. All investments
in common stock held by AMIDEXTM Cancer Innovations & Healthcare Fund are
identified as belonging to the healthcare sector of the market. Investing in a
single market sector may be riskier than investing in a variety of market
sectors.
7. SUBSEQUENT EVENTS--FUND CLOSURES AND SPECIAL MEETING OF SHAREHOLDERS
(UNAUDITED)
Because of difficulty in garnering adequate assets in the AMIDEXTM Cancer
Innovations & Healthcare Fund, the Board of Directors has decided to close the
Class C shares of the Fund. As of December 17, 2002, the Class C shares were
liquidated.
Because of difficulty in garnering adequate assets in the AMIDEXTM Israel
Technology Fund, the Board of Directors has decided to close the Fund. As of
November 5, 2002, the portfolio positions were sold and the NAV was fixed at
$3.89 per share. As of December 31, 2002, all shareholder accounts were
liquidated.
28
AMIDEXTM FUNDS, INC. ANNUAL REPORT
- --------------------------------------------------------------------------------
NOTES TO THE FINANCIAL STATEMENTS
MAY 31, 2003
The Board of Directors has scheduled a Special Meeting of Shareholders for
September 15, 2003 to consider six proposals. They are as follows:
1. To approve a new Investment Advisory agreement between the Company and
Index Investments, LLC.
2. To approve amendments to the AMIDEXTM Articles of Incorporation to
allow for issuance, merger, consolidation or closure of certain series
of the Funds without further shareholder approval, and the filing of
Amended and Restated Articles of Incorporation.
3. To approve a new slate of Directors to serve on the Board of
Directors.
4. To approve McCurdy & Associates CPA's, Inc. to serve as independent
public accountants for the Company.
5. To approve a 12b-1 Distribution Plan.
6. To grant the authority to transact such other business as may properly
come before the shareholders of the Funds to the Board of Directors.
Approval of proposal 1 requires a separate vote by shareholders of each
Fund to bind that Fund. Approval requires the affirmative vote of "a majority of
the outstanding voting securities" of that Fund as that term is defined under
the Investment Company Act of 1940 (the "1940 Act"). This means the affirmative
vote of the lesser of (a) 67% or more of the shares of the Fund present at the
Meeting or represented by proxy if the holders of more than 50% of the
outstanding shares are present or represented by proxy at the Meeting or (b)
more than 50% of the outstanding shares of the Fund.
Approval of proposal 2 requires the affirmative vote of two thirds of the
outstanding voting securities of the Company.
Approval of proposal 3 requires a plurality. Shareholders of the Funds
shall vote together, not separately by Fund.
Approval of proposal 4 requires the affirmative vote of a majority of the
outstanding voting securities of the Company as that term is defined under the
1940 Act.
Approval of proposal 5 requires a majority vote, as defined by statute, of
each share class, voting separately.
Approval of proposal 6 requires a majority vote. Shareholders of the Funds
shall vote separately by Fund.
29
AMIDEXTM FUNDS, INC. ANNUAL REPORT
- --------------------------------------------------------------------------------
NOTES TO THE FINANCIAL STATEMENTS
MAY 31, 2003
Proposal 1 was approved by the shareholders of the Company with voting
results as follows:
----------------------------------------------------------------------
For Against Abstain
----------------------------------------------------------------------
AMIDEX35TM Mutual Fund 892,182 45,678 9,228
----------------------------------------------------------------------
AMIDEX35TM Cancer
Innovations & Healthcare Fund 51,659 3,557 237
----------------------------------------------------------------------
Proposal 2 was not approved since two thirds of the outstanding voting
securities of the Company were not present at the Meeting.
Proposal 3 was approved by the shareholders of the Company with voting
results as follows:
----------------------------------------------------------------------
For Against Abstain
----------------------------------------------------------------------
AMIDEX35TM Mutual Fund 590,592 6,852 15,253
----------------------------------------------------------------------
AMIDEX35TM Cancer
Innovations & Healthcare Fund 42,186 1,149 786
----------------------------------------------------------------------
Proposal 4 was approved by the shareholders of the Company with voting
results as follows:
----------------------------------------------------------------------
For Against Abstain
----------------------------------------------------------------------
AMIDEX35TM Mutual Fund 919,399 20,482 7,209
----------------------------------------------------------------------
AMIDEX35TM Cancer
Innovations & Healthcare Fund 52,867 1,848 737
----------------------------------------------------------------------
Proposal 5 was approved by the shareholders of each class of the Company
with voting results as follows:
----------------------------------------------------------------------
AMIDEX35TM Mutual Fund For Against Abstain
----------------------------------------------------------------------
No-Load 567,885 41,155 5,114
----------------------------------------------------------------------
Class A 274,649 2,716 709
----------------------------------------------------------------------
Class C 50,160 3,473 1,226
----------------------------------------------------------------------
----------------------------------------------------------------------
AMIDEX35TM Cancer For Against Abstain
Innovations & Healthcare Fund
----------------------------------------------------------------------
Class A 49,904 4,077 1,472
----------------------------------------------------------------------
30
AMIDEXTM FUNDS, INC. ANNUAL REPORT
- --------------------------------------------------------------------------------
NOTES TO THE FINANCIAL STATEMENTS
MAY 31, 2003
Proposal 6 was approved by the shareholders of the Company with voting
results as follows:
----------------------------------------------------------------------
For Against Abstain
----------------------------------------------------------------------
AMIDEX35TM Mutual Fund 884,568 50,210 12,309
----------------------------------------------------------------------
AMIDEX35TM Cancer
Innovations & Healthcare Fund 51,120 3,448 884
----------------------------------------------------------------------
The Special Meeting of Shareholders has been adjourned for the interim so
that additional time will be afforded to obtain more shareholder votes.
8. BENEFICIAL 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 May 31, 2003,
Wexford Clearing Corp. held 35.56% of Class A of AMIDEX35TM Mutual Fund in an
omnibus account for the benefit of others. As of May 31, 2003, Merrill Lynch
held 61.49% of Class C of AMIDEX35TM Mutual Fund in an omnibus account for the
benefit of others. As of May 31, 2003, Merrill Lynch held 36.13% of Class A of
AMIDEXTM Cancer Innovations & Healthcare Fund in an omnibus account for the
benefit of others.
9. CHANGE OF AUDITORS
On August 1, 2003, Deloitte & Touche LLP ("Deloitte") resigned as
independent auditors to the AMIDEXTM Funds. Deloitte's reports on the Funds'
financial statements for the period ended May 31, 2000 and the fiscal years
ended May 31, 2001 and May 31, 2002 for the AMIDEX35TM Mutual Fund and for the
period ended May 31, 2002 for the AMIDEXTM Cancer Innovations & Healthcare Fund
contained no adverse opinion or disclaimer of opinion nor were they qualified or
modified as to uncertainty, audit scope or accounting principles. During the
periods and fiscal years stated above, there were no disagreements with Deloitte
on any matter of accounting principles or practices, financial statement
disclosure or auditing scope or procedure which, if not resolved to the
satisfaction of Deloitte, would have caused Deloitte to make reference to the
subject matter of the disagreements in connection with its reports on the Funds'
financial statements for such years.
On September 15, 2003, the Funds, by action of its Board of Directors, upon
approval of the Funds' shareholders, approved the engagement of McCurdy and
Associates CPA's, Inc. as the independent auditors to audit the Funds' financial
statements for the fiscal year ended May 31, 2003.
31
AMIDEXTM FUNDS, INC. ANNUAL REPORT
- --------------------------------------------------------------------------------
NOTES TO THE FINANCIAL STATEMENTS
MAY 31, 2003
During the period ended May 31, 2000 and the fiscal years ended May 31, 2001 and
May 31, 2002 for the AMIDEX35TM Mutual Fund and for the period ended May 31,
2002 for the AMIDEXTM Cancer Innovations & Healthcare Fund, neither the Funds
nor anyone on their behalf consulted McCurdy and Associates CPA's, Inc. 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 Funds' financial statements 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).
32
AMIDEXTM FUNDS, INC. ANNUAL REPORT
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Term of Number of
Office and Portfolios in
Position(s) Length of Fund Complex
Held with Time Principal Occupation(s) Overseen Other Directorships
Name, Address and Age1 The Company Served2 During Past 5 Years by Director3 Held by Director4
- ---------------------- ----------- ------- ------------------- ------------ -----------------
- ------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT DIRECTORS
- ---------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Elliot Hershman Director New Director Principal, Alpha Professional 2
Age 47 Services, PA, an
accounting and management
consulting practice, since
2001; Plant controller,
Forgent Corp., PA, a
publicly held global
telecommunications
company, 1999 to
2001; Accountant,
Rudolph Palitz, LLP,
CPA's, PA, 1997-1999.
- ------------------------------------------------------------------------------------------------------------------------------------
Eli Gabay, Esq. Director New Director Attorney, Solomon Sherman & 2
Age 44 Gabay, Philadelphia, PA
- ------------------------------------------------------------------------------------------------------------------------------------
Erica Levy Director New Director Editor, Philadelphia 2
Age 26 Magazine; Editor Marion
Publications
- ------------------------------------------------------------------------------------------------------------------------------------
OFFICERS
- --------
- ------------------------------------------------------------------------------------------------------------------------------------
Clifford A. Goldstein5 President Since 1999 President, Index Investments, N/A N/A
Age 45 and Director LLC, November 2002 to
present; President,
TransNations Investments,
LLC, Managing Partner and
Attorney with Weber,
Goldstein, Greenberg,
Gallagher, a general
litigation firm,
since 1991.
- ------------------------------------------------------------------------------------------------------------------------------------
Larry E. Beaver, Jr.6 Chief New Director Fund Accounting Manager, N/A Treasurer,
630-A Fitzwatertown Road Accounting InCap Service Co., 2003 Commonwealth
Willow Grove, PA 19090 Officer to present; Fund Accounting International
Age 34 Supervisor, Declaration Series Trust,
Group/InCap Service Co., since June 2003
October 2001 to April 2003;
Fund Accounting Supervisor,
PFPC, Inc., October 1999 to
September 2001; Fund
Accountant, PFPC, Inc., March
1998 to September 1999.
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------
1 Each Director may be contacted by writing to the Director, c/o AMIDEXTM
Funds, Inc., Chartwell Suites, 2621 Van Buren Avenue, Norristown, PA 19403.
2 Each Director holds office until he resigns, is removed or dies. The
President and Chief Accounting Officer shall hold office for a one year
term and until their respective successors are chosen and qualified, or
until such officer dies or resigns.
3 The Fund Complex consists of the Company. The Company has two portfolios,
the AMIDEX35 TM Mutual Fund and the AMIDEXTM Cancer Innovations &
Healthcare Fund.
4 Directorships of companies required to report to the Securities and
Exchange Commission under the Securities Exchange Act of 1934 (i.e.,
"public companies") or other investment companies registered under the 1940
Act.
5 Indicates an "interested person" as defined in the Investment Company Act
of 1940.
6 The Company entered into an agreement related to its Distribution Plan with
InCap Securities, Inc. which is an affiliate of InCap Service Company
("ISC"). Larry E. Beaver, Jr. is Fund Accounting Manager at ISC.
33
INDEPENDENT AUDITOR'S REPORT
- --------------------------------------------------------------------------------
To The Shareholders and
Board of Directors of
AMIDEX Funds, Inc.
We have audited the accompanying statements of assets and liabilities, including
the schedules of portfolio investments of AMIDEX Funds, Inc. (the "Funds")
comprising the AMIDEX35 Mutual Fund and AMIDEX Cancer Innovations & Healthcare
Mutual Fund as of May 31, 2003, and the related statements of operations for the
year then ended, and statements of changes in net assets and the financial
highlights for each of the periods presented. These financial statements and
financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
investments and cash held as of May 31, 2003 by correspondence with the Funds'
custodian. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the portfolios constituting AMIDEX Funds, Inc. as of May 31, 2003, the
results of their operations for the year then ended, and the changes in their
net assets and the financial highlights for each of the periods presented, in
conformity with accounting principles generally accepted in the United States of
America.
McCurdy & Associates CPA's, Inc.
Westlake, Ohio 44145
September 25, 2003
34
ITEM 2. CODE OF ETHICS.
Although contemplated during the last fiscal year and discussed amongst the
Board, it was not until this fiscal year that a Code of Ethics was adopted. As
of the date of the filing of this report, the registrant has adopted a Code of
Ethics that applies to the registrant's principal executive officer and
principal financial officer. A copy of this Code of Ethics is available free of
charge, upon request, by contacting the fund directly.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Elliot Hershman is a member of the Board of Directors and the Audit Committee
Financial expert.
Mr. Hershman is independent under applicable rules.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
For the fiscal year ended 5/31/03 the Amidex Funds paid $5,960 for tax services
and $22,955 for audit services.
For the fiscal year ended 5/31/02 the Amidex Funds paid $6,000 for tax services
and $15,000 for audit services.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive office and principal financial officer
has concluded that the registrant's disclosure controls and procedures (as
defined in rule 30a-2(c) under the Investment Company Act of 1940, as
amended (the "1940 Act") are effective based on their evaluation of these
controls and procedures as of a date within 90 days of the filing date of
this document.
(b) There were so significant changes in the registrant's internal controls or
in other factors that could affect these controls subsequent to the date of
their evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
ITEM 10. EXHIBITS
(a) Code of Ethics for the Boards of Directors/Trustees of the Funds is filed
herewith.
(b) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
are attached hereto as EX-99.CERT. Certifications pursuant to Section 906
of the Sarbanes-Oxley Act of 2002 are attached hereto as EX-906CERT.
Signatures for financial statements attached to Form N-CSR
Pursuant to the requirement 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, hereunder duly authorized.
(Registrant) AMIDEX Funds, Inc.
-----------------------------
By: /s/ Clifford A. Goldstein
--------------------------------------
Clifford A. Goldstein, President
Date: January 29, 2004
------------------------------------
Pursuant to the requirement 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/ Clifford A. Goldstein
--------------------------------------
Clifford A. Goldstein, President
Date: January 29, 2004
------------------------------------
By: /s/ Larry E. Beaver
--------------------------------------
Larry E. Beaver, Jr., Chief Accounting Officer
Date: January 29, 2004
------------------------------------