JACOB FUNDS INC.
JACOB WISDOM FUND
STATEMENTS OF CHANGES IN NET ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
August 31, 2012
|
|
|
Year Ended
August 31, 2011
|
|
|
Operations:
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
$
|
165,515
|
|
|
$
|
116,419
|
|
|
Net realized gain on investments
|
|
|
204,645
|
|
|
|
258,227
|
|
|
Change in net unrealized appreciation/depreciation on investments
|
|
|
1,033,937
|
|
|
|
1,267,756
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in net assets resulting from operations
|
|
|
1,404,097
|
|
|
|
1,642,402
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions to Shareholders:
|
|
|
|
|
|
|
|
|
|
From net investment income
|
|
|
(104,302
|
)
|
|
|
—
|
|
|
From net realized gain
|
|
|
—
|
|
|
|
(23,510
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Total distributions to shareholders
|
|
|
(104,302
|
)
|
|
|
(23,510
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Capital Share Transactions: (Note 3)
|
|
|
|
|
|
|
|
|
|
Proceeds from shares sold
|
|
|
136,160
|
|
|
|
114,470
|
|
|
Proceeds from reinvestment of distribution
|
|
|
84,721
|
|
|
|
18,963
|
|
|
Cost of shares redeemed
|
|
|
(1,293,462
|
)
|
|
|
(2,522,148
|
)
|
|
Redemption fees
|
|
|
—
|
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
Net decrease in net assets resulting from capital share transactions
|
|
|
(1,072,581
|
)
|
|
|
(2,388,711
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net Increase (Decrease) in Net Assets
|
|
|
227,214
|
|
|
|
(769,819
|
)
|
|
Net Assets:
|
|
|
|
|
|
|
|
|
|
Beginning of period
|
|
|
10,415,215
|
|
|
|
11,185,034
|
|
|
|
|
|
|
|
|
|
|
|
|
End of period*
|
|
$
|
10,642,429
|
|
|
$
|
10,415,215
|
|
|
|
|
|
|
|
|
|
|
|
|
*
Includes undistributed net investment income of:
|
|
$
|
175,475
|
|
|
$
|
116,411
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an
integral part of these financial statements.
21
JACOB FUNDS INC.
JACOB INTERNET FUND
FINANCIAL HIGHLIGHTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
August
31,
2012
|
|
|
Year Ended
August
31,
2011
|
|
|
Year Ended
August
31,
2010
|
|
|
Year Ended
August
31,
2009
|
|
|
Year Ended
August
31,
2008
|
|
|
Per Share Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
|
$
|
2.95
|
|
|
$
|
2.28
|
|
|
$
|
1.99
|
|
|
$
|
2.07
|
|
|
$
|
2.71
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from investment operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income (loss)
|
|
|
(0.06
|
)
(1)
|
|
|
(0.08
|
)
(1)
|
|
|
(0.06
|
)
(1)
|
|
|
(0.06
|
)
(1)
|
|
|
0.02
|
(2)
|
|
Net realized and unrealized gain (loss) on investments
|
|
|
0.14
|
|
|
|
0.75
|
|
|
|
0.35
|
|
|
|
(0.02
|
)
|
|
|
(0.59
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total from investment operations
|
|
|
0.08
|
|
|
|
0.67
|
|
|
|
0.29
|
|
|
|
(0.08
|
)
|
|
|
(0.57
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less distributions from net investment income
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.07
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, end of period
|
|
$
|
3.03
|
|
|
$
|
2.95
|
|
|
$
|
2.28
|
|
|
$
|
1.99
|
|
|
$
|
2.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total return
|
|
|
2.71%
|
|
|
|
29.39%
|
|
|
|
14.57%
|
|
|
|
(3.86
|
)%
|
|
|
(21.63
|
)%
|
|
Supplemental data and ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (in thousands)
|
|
$
|
39,983
|
|
|
$
|
41,266
|
|
|
$
|
35,058
|
|
|
$
|
36,913
|
|
|
$
|
44,516
|
|
|
Ratio of gross operating expenses (prior to waiver or recoupments) to average net assets
|
|
|
2.87%
|
|
|
|
2.69%
|
|
|
|
3.06%
|
|
|
|
3.71%
|
|
|
|
2.69%
|
|
|
Ratio of net operating expenses (after waiver or recoupments) to average net assets
|
|
|
2.87%
|
(4)
|
|
|
2.82%
|
(4)
|
|
|
2.96%
|
(4)
|
|
|
3.64%
|
(4)
|
|
|
2.65%
|
(3)
|
|
Ratio of net investment income (loss) (prior to waiver or recoupments) to average net assets
|
|
|
(1.99)%
|
|
|
|
(2.53)%
|
|
|
|
(2.49)%
|
|
|
|
(3.54)%
|
|
|
|
0.86%
|
|
|
Ratio of net investment income (loss) (after waiver or recoupments) to average net assets
|
|
|
(1.99)%
|
(4)
|
|
|
(2.66)%
|
(4)
|
|
|
(2.39)%
|
(4)
|
|
|
(3.47)%
|
(4)
|
|
|
0.90%
|
(3)
|
|
Portfolio turnover rate
|
|
|
55.61%
|
|
|
|
52.39%
|
|
|
|
52.09%
|
|
|
|
106.98%
|
|
|
|
80.46%
|
|
|
(1)
|
Net investment loss per share is calculated using ending balances prior to consideration of adjustments for permanent book and tax differences.
|
|
(2)
|
Net investment income per share represents net investment income divided by the average shares outstanding throughout the period.
|
|
(3)
|
Reflects Adviser’s waiver of 0.10% of the shareholder servicing fee beginning December 29, 2005 and ending December 31, 2007.
|
|
(4)
|
For the period January 1, 2009 through January 2, 2013, the Adviser has contractually agreed to waive its advisory fees in an amount up to an annual rate of
0.10% of the Fund’s average daily net assets, to the extent that the Fund’s expense ratio exceeds 2.95%. All eligible previously waived expenses under this agreement were recouped by the Adviser during the year ended August 31, 2011.
|
The accompanying notes are an
integral part of these financial statements.
22
JACOB FUNDS INC.
JACOB SMALL CAP GROWTH FUND
FINANCIAL HIGHLIGHTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
August
31,
2012
|
|
|
Year Ended
August
31,
2011
|
|
|
October 1,
2009
Through
August 31,
2010
(1)
|
|
|
Year
Ended
September 30,
2009
|
|
|
Year
Ended
September 30,
2008
|
|
|
Year
Ended
September 30,
2007
|
|
|
Per Share Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
|
$
|
15.12
|
|
|
$
|
10.90
|
|
|
$
|
11.16
|
|
|
$
|
13.82
|
|
|
$
|
21.94
|
|
|
$
|
15.81
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from investment operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment loss
|
|
|
(0.47
|
)
(2)
|
|
|
(0.55
|
)
(2)
|
|
|
(0.48
|
)
(2)
|
|
|
(0.17
|
)
(2)
|
|
|
(0.29
|
)
(3)
|
|
|
(0.31
|
)
(2)
|
|
Net realized and unrealized gain (loss) on investments
|
|
|
(0.15
|
)
|
|
|
4.75
|
|
|
|
0.22
|
|
|
|
(2.49
|
)
|
|
|
(7.83
|
)
|
|
|
6.44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total from investment operations
|
|
|
(0.62
|
)
|
|
|
4.20
|
|
|
|
(0.26
|
)
|
|
|
(2.66
|
)
|
|
|
(8.12
|
)
|
|
|
6.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less distributions from net investment income
|
|
|
(0.63
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paid in capital from redemption fees
|
|
|
0.00
|
(9)
|
|
|
0.02
|
|
|
|
0.00
|
(9)
|
|
|
0.00
|
(9)
|
|
|
0.00
|
(9)
|
|
|
0.00
|
(9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, end of period
|
|
$
|
13.87
|
|
|
$
|
15.12
|
|
|
$
|
10.90
|
|
|
$
|
11.16
|
|
|
$
|
13.82
|
|
|
$
|
21.94
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total return
|
|
|
(3.75)%
|
|
|
|
38.72%
|
|
|
|
(2.33)%
|
(7)
|
|
|
(19.25)%
|
|
|
|
(37.01)%
|
|
|
|
38.77%
|
|
|
Supplemental data and ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (in thousands)
|
|
$
|
5,384
|
|
|
$
|
7,013
|
|
|
$
|
4,073
|
|
|
$
|
8,321
|
|
|
$
|
31,907
|
|
|
$
|
50,378
|
|
|
Ratio of gross operating expenses (prior to waiver or reimbursements) to average net assets
|
|
|
4.28%
|
|
|
|
4.45%
|
|
|
|
5.43%
|
(4)(8)
|
|
|
2.64%
|
(4)
|
|
|
1.86%
|
(4)
|
|
|
1.83%
|
(4)
|
|
Ratio of net operating expenses (after waiver or reimbursements) to average net assets
|
|
|
3.38%
|
(6)
|
|
|
3.55%
|
(6)
|
|
|
4.82%
|
(4)(5)(6)(8)
|
|
|
2.64%
|
(4)(5)
|
|
|
1.86%
|
(4)
|
|
|
1.83%
|
(4)
|
|
Ratio of net investment loss (prior to waiver or reimbursements) to average net assets
|
|
|
(4.27)%
|
|
|
|
(4.44)%
|
|
|
|
(5.21)%
|
(8)
|
|
|
(1.87)%
|
|
|
|
(1.56)%
|
|
|
|
(1.72)%
|
|
|
Ratio of net investment loss (after waiver or reimbursements) to average net assets
|
|
|
(3.37)%
|
(6)
|
|
|
(3.54)%
|
(6)
|
|
|
(4.60)%
|
(5)(6)(8)
|
|
|
(1.87)%
|
(5)
|
|
|
(1.56)%
|
|
|
|
(1.72)%
|
|
|
Portfolio turnover rate
|
|
|
77.65%
|
|
|
|
102.80%
|
|
|
|
228.16%
|
(7)
|
|
|
307.06%
|
|
|
|
246.41%
|
|
|
|
231.96%
|
|
|
(1)
|
The financial highlights set forth herein include the historical financial highlights of the Rockland Small Cap Growth Fund. The assets of the Rockland Small Cap Growth
Fund were acquired by the Jacob Small Cap Growth Fund on February 1, 2010. At the time of the reorganization, the adviser changed from Gould Investment Partners, LLC to Jacob Asset Management of New York LLC. The Fund’s fiscal year was
changed to August 31 to align with the other Jacob Funds.
|
|
(2)
|
Net investment loss per share represents net investment loss divided by the average shares outstanding throughout the year.
|
|
(3)
|
Net investment loss per share is calculated using ending balances prior to consideration of adjustments for permanent book and tax differences.
|
|
(4)
|
The expense ratio includes interest expense paid to the custodian on overdrafts to cover shareholder redemptions. The expense ratio for interest expense paid to the
custodian for the period ended August 31, 2010 and the years ended September 30, 2009, 2008 and 2007 was 0.02%, 0.01%, 0.01% and 0.01%, respectively.
|
|
(5)
|
Effective September 1, 2009, Gould Investment Partners, LLC agreed to voluntarily waive 0.25% of its advisory fee. The impact on the net expense ratio was (0.01)%
for the fiscal year ended September 30, 2009 and (0.25)% for the period October 1, 2009 through January 31, 2010.
|
|
(6)
|
The Adviser has contractually agreed, through January 2, 2013, to waive its advisory fees in an amount up to an annual rate of 0.90% of the Fund’s average daily
net assets, to the extent that the Fund’s operating expense ratio exceeds 2.45%.
|
|
(9)
|
Amount is less than $0.01.
|
The accompanying notes are an integral part of these financial statements.
23
JACOB FUNDS INC.
JACOB WISDOM FUND
FINANCIAL HIGHLIGHTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
August
31,
2012
|
|
|
Year Ended
August
31,
2011
|
|
|
June
1,
2010
Through
August
31,
2010
(1)
|
|
|
Year Ended
May 31,
2010
(2)
|
|
|
Year Ended
May
31,
2009
|
|
|
Year Ended
May
31,
2008
|
|
|
Per Share Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
|
$
|
8.81
|
|
|
$
|
7.65
|
|
|
$
|
7.65
|
|
|
$
|
6.48
|
|
|
$
|
10.34
|
|
|
$
|
13.28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from investment operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income (loss)
|
|
|
0.16
|
|
|
|
0.08
|
|
|
|
0.02
|
|
|
|
0.00
|
|
|
|
(0.02
|
)
|
|
|
(0.11
|
)
|
|
Net realized and unrealized gain (loss) on securities
|
|
|
1.08
|
|
|
|
1.10
|
|
|
|
(0.02
|
)
|
|
|
1.18
|
|
|
|
(3.23
|
)
|
|
|
(1.13
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total from investment operations
|
|
|
1.24
|
|
|
|
1.18
|
|
|
|
0.00
|
|
|
|
1.18
|
|
|
|
(3.25
|
)
|
|
|
(1.24
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less distributions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From net investment income
|
|
|
(0.09
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
From net realized gain
|
|
|
—
|
|
|
|
(0.02
|
)
|
|
|
—
|
|
|
|
(0.01
|
)
|
|
|
(0.61
|
)
|
|
|
(1.70
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total distributions
|
|
|
(0.09
|
)
|
|
|
(0.02
|
)
|
|
|
—
|
|
|
|
(0.01
|
)
|
|
|
(0.61
|
)
|
|
|
(1.70
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, end of period
|
|
$
|
9.96
|
|
|
$
|
8.81
|
|
|
$
|
7.65
|
|
|
$
|
7.65
|
|
|
$
|
6.48
|
|
|
$
|
10.34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total return
|
|
|
14.08%
|
|
|
|
15.40%
|
|
|
|
0.00%
|
(4)
|
|
|
18.24%
|
|
|
|
(31.46)%
|
|
|
|
(9.77)%
|
|
|
Supplemental data and ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (in thousands)
|
|
$
|
10,642
|
|
|
$
|
10,415
|
|
|
$
|
11,185
|
|
|
$
|
11,763
|
|
|
$
|
4,315
|
|
|
$
|
8,539
|
|
|
Ratio of gross operating expenses (prior to waiver or reimbursements) to average net assets
|
|
|
2.84%
|
|
|
|
2.82%
|
|
|
|
3.22%
|
(5)
|
|
|
4.24%
|
|
|
|
3.44%
|
|
|
|
2.72%
|
|
|
Ratio of net operating expenses (after waiver or reimbursements) to average net assets
(3)
|
|
|
2.34%
|
|
|
|
2.32%
|
|
|
|
2.72%
|
(5)
|
|
|
3.14%
|
|
|
|
2.75%
|
|
|
|
2.71%
|
|
|
Ratio of net investment income (loss) (prior to waiver or reimbursements) to average net assets
|
|
|
1.07%
|
|
|
|
0.54%
|
|
|
|
0.30%
|
(5)
|
|
|
(0.80)%
|
|
|
|
(0.86)%
|
|
|
|
(0.90)%
|
|
|
Ratio of net investment income (loss) (after waiver or reimbursements) to average net assets
(3)
|
|
|
1.57%
|
|
|
|
1.04%
|
|
|
|
0.80%
|
(5)
|
|
|
0.30%
|
|
|
|
(0.17)%
|
|
|
|
(0.89)%
|
|
|
Portfolio turnover rate
|
|
|
19.62%
|
|
|
|
13.60%
|
|
|
|
6.50%
|
(4)
|
|
|
60.69%
|
|
|
|
37.12%
|
|
|
|
30.89%
|
|
|
(1)
|
The Fund’s fiscal year was changed to August 31 to align with the other Jacob Funds.
|
|
(2)
|
The financial highlights set forth herein include the historical financial highlights of the Wisdom Fund. The Wisdom Fund was reorganized into Jacob Wisdom Fund on
February 18, 2010. On December 1, 2009, the adviser changed from Atlanta Investment Counsel, LLC to Jacob Asset Management of New York LLC. Information prior to February 18, 2010 reflects the performance of the Wisdom Fund’s
Class B shares.
|
|
(3)
|
The Advisor has contractually agreed, effective February 18, 2010 through January 2, 2013, to waive its advisory fees in an amount up to an annual rate of 0.50% of the
Fund’s average daily net assets, to the extent that the Fund’s operating expense ratio exceeds 1.95%. Prior to November 30, 2009, the previous adviser agreed to waive operating expenses over 1.75% of the Fund’s average daily net
assets, exclusive of interest, taxes, brokerage fees and 12b-1 fees.
|
The accompanying notes are an integral part of these financial statements.
24
JACOB FUNDS INC.
NOTES TO THE FINANCIAL STATEMENTS
August 31, 2012
NOTE 1—DESCRIPTION OF ORGANIZATION
Jacob Funds Inc. (the “Corporation”) was
organized as a Maryland corporation on July 13, 1999 and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company issuing its shares in series. The Corporation
currently consists of three “diversified” series, the Jacob Internet Fund (the “Internet Fund”), the Jacob Small Cap Growth Fund (the “Small Cap Growth Fund”) and the Jacob Wisdom Fund (the “Wisdom Fund”),
collectively the “Funds” and the authorized capital stock of the Corporation consists of twenty billion shares of stock having a par value of one-tenth of one cent ($0.001) per share. The primary investment objective of the Internet Fund
is long-term growth of capital with current income as a secondary objective. The primary investment objective of the Small Cap Growth Fund is long-term growth of capital. The primary investment objective of the Wisdom Fund is to maximize total
investment return consisting of a combination of income and capital appreciation. The Internet Fund commenced operations on December 14, 1999. The Small Cap Growth Fund commenced operations on February 1, 2010 when it acquired the assets
and liabilities of the Rockland Small Cap Growth Fund in a reorganization transaction (the Small Cap Growth Fund is the successor fund to the Rockland Small Cap Growth Fund), and the Jacob Wisdom Fund commenced operations when it acquired the assets
and liabilities of the Wisdom Fund on February 18, 2010 in a reorganization transaction (the Jacob Wisdom Fund is the successor fund to the Wisdom Fund).
NOTE 2—SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant
accounting policies consistently followed by the Funds. These policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”).
(a)
Investment Valuation
—Investment securities traded on a national securities exchange are valued at
their market value determined by their last sales price in the principal market in which these securities are normally traded (except those traded on the NASDAQ National Market and Capital Market exchanges which are valued at the NASDAQ Official
Closing Price (“NOCP”)), unless there are no transactions on the valuation date, in which case they are valued at the mean between the closing bid and ask prices. Securities traded over-the-counter are valued at the last reported sales
price unless there is no reported sales price, in which case the mean between the closing bid and ask prices is used. Foreign securities, currencies and other assets denominated in foreign currencies are translated into U.S. dollars at the exchange
rate of such currencies. Foreign equity securities are valued at the last sale price at the close of the exchange on which the security is principally traded. Debt securities with maturities of 60 days or less are valued at amortized cost, which
approximates market value. Short-term securities with 60 days or less remaining to maturity are, unless conditions indicate otherwise, amortized to maturity based on their cost to a Fund if acquired within 60 days of maturity or, if already held by
a Fund on the 60
th
day, based on the value determined on
the 61
st
day. If amortized cost does not approximate fair
value, short-term securities are reported at fair value. Where market quotations are not readily available, are unreliable or when values have been materially affected by events occurring
25
JACOB FUNDS INC.
NOTES TO THE FINANCIAL STATEMENTS (Continued)
August 31, 2012
before the close of U.S. markets but after the close of the securities’ primary markets, securities are valued at fair value using procedures approved by the Board of Directors that are
designed to determine a security’s fair value.
The Funds adhere to fair valuation accounting standards which provides an
authoritative definition of fair value and sets out a hierarchy for measuring fair value. These standards require disclosures about the various inputs and valuation techniques used to develop the measurements of fair value and a discussion in
changes in valuation techniques and related inputs during the period. These standards define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date. The fair value hierarchy is organized into three levels based upon the assumptions (referred to as “inputs”) used in pricing the asset or liability. These standards state that “observable inputs” reflect the
assumptions market participants would use in pricing the asset or liability based on market data obtained from independent sources and “unobservable inputs” reflect an entity’s own assumptions about the assumptions market participants
would use in pricing the asset or liability.
Summary of Fair Value Exposure
Various inputs are used in determining the value of the Funds’ investments. These inputs are summarized in the three broad levels
listed below:
Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities that the Funds have
the ability to access.
Level 2—Observable inputs other than quoted prices included in Level 1 that are observable for the
asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument in an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates
and similar data.
Level 3—Unobservable inputs for the asset or liability, to the extent relevant observable inputs are
not available, representing the Funds’ own assumptions about the assumptions a market participant would use in valuing the asset or liability, and based on the best information available.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those
securities.
26
JACOB FUNDS INC.
NOTES TO THE FINANCIAL STATEMENTS (Continued)
August 31, 2012
The following is a summary of the inputs used to value the Internet Fund’s investments as of August 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|
|
|
|
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Internet—Commerce
|
|
$
|
7,055,153
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,055,153
|
|
|
Internet—Infrastructure
|
|
|
17,900,817
|
|
|
|
—
|
|
|
|
—
|
|
|
|
17,900,817
|
|
|
Internet—Media
|
|
|
12,747,209
|
|
|
|
1,226,047
|
|
|
|
—
|
|
|
|
13,973,256
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Common Stock
|
|
|
37,703,179
|
|
|
|
1,226,047
|
|
|
|
—
|
|
|
|
38,929,226
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short Term Investment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Money Market Fund
|
|
|
1,775,129
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,775,129
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments Purchased With Cash Proceeds From Securities Lending
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Paper
|
|
|
—
|
|
|
|
—
|
|
|
|
137,176
|
|
|
|
137,176
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investments in Securities
|
|
$
|
39,478,308
|
|
|
$
|
1,226,047
|
|
|
$
|
137,176
|
|
|
$
|
40,841,531
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
There were no transfers into or out of Level 1, Level 2 and Level 3 fair value measurements during the
reporting period, as compared to their classification from the most recent annual report.
Level 3 Reconciliation
Disclosure
Following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to
determine fair value.
|
|
|
|
|
|
|
Description
|
|
Investments
in Securities
|
|
|
Balance as of August 31, 2011
|
|
$
|
166,439
|
|
|
Accrued discounts/premiums
|
|
|
—
|
|
|
Realized gain (loss)
|
|
|
—
|
|
|
Change in unrealized appreciation (depreciation)
|
|
|
4,193
|
|
|
Purchases
|
|
|
—
|
|
|
Sales
|
|
|
(33,456
|
)
|
|
Transfers in and/or out of Level 3*
|
|
|
—
|
|
|
|
|
|
|
|
|
Balance as of August 31, 2012
|
|
$
|
137,176
|
|
|
|
|
|
|
|
|
|
*
|
The information used in the above reconciliation represents fiscal year to date activity for any investments identified as using Level 3 inputs at either the beginning
or end of the current fiscal period. Transfers in or out of Level 3 represents either the beginning value (for transfers in) or ending value (for transfers out) of any security or instrument where a change in the pricing level occurred from the
beginning to the end of the period.
|
27
JACOB FUNDS INC.
NOTES TO THE FINANCIAL STATEMENTS (Continued)
August 31, 2012
The following is a summary of the inputs used to value the Small Cap Growth Fund’s investments as of August 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accommodation & Food Services
|
|
$
|
150,400
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
150,400
|
|
|
Arts, Entertainment, and Recreation
|
|
|
149,125
|
|
|
|
—
|
|
|
|
—
|
|
|
|
149,125
|
|
|
Biotech & Pharmaceuticals
|
|
|
1,293,811
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,293,811
|
|
|
Energy—Exploration & Production
|
|
|
829,288
|
|
|
|
—
|
|
|
|
—
|
|
|
|
829,288
|
|
|
Energy—Infrastructure & Services
|
|
|
69,800
|
|
|
|
—
|
|
|
|
—
|
|
|
|
69,800
|
|
|
Medical Devices
|
|
|
373,283
|
|
|
|
—
|
|
|
|
—
|
|
|
|
373,283
|
|
|
Retail & Restaurants
|
|
|
69,692
|
|
|
|
—
|
|
|
|
—
|
|
|
|
69,692
|
|
|
Technology—Hardware
|
|
|
508,989
|
|
|
|
—
|
|
|
|
—
|
|
|
|
508,989
|
|
|
Technology—Software & Services
|
|
|
1,881,446
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,881,446
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Common Stock
|
|
|
5,325,834
|
|
|
|
—
|
|
|
|
—
|
|
|
|
5,325,834
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short Term Investment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Money Market Fund
|
|
|
113,642
|
|
|
|
—
|
|
|
|
—
|
|
|
|
113,642
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investments in Securities
|
|
$
|
5,439,476
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,439,476
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
There were no transfers into or out of Level 1, Level 2 and Level 3 fair value measurements during the
reporting period, as compared to their classification from the most recent annual report.
28
JACOB FUNDS INC.
NOTES TO THE FINANCIAL STATEMENTS (Continued)
August 31, 2012
The following is a summary of the inputs used to value the Wisdom Fund’s investments as of August 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Air Freight & Logistics
|
|
$
|
401,580
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
401,580
|
|
|
Beverages
|
|
|
1,239,342
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,239,342
|
|
|
Commercial Banks
|
|
|
315,900
|
|
|
|
—
|
|
|
|
—
|
|
|
|
315,900
|
|
|
Commercial Services & Supplies
|
|
|
707,292
|
|
|
|
—
|
|
|
|
—
|
|
|
|
707,292
|
|
|
Consumer Finance
|
|
|
900,840
|
|
|
|
—
|
|
|
|
—
|
|
|
|
900,840
|
|
|
Food & Staples Retailing
|
|
|
486,140
|
|
|
|
—
|
|
|
|
—
|
|
|
|
486,140
|
|
|
Food Products
|
|
|
470,406
|
|
|
|
—
|
|
|
|
—
|
|
|
|
470,406
|
|
|
Health Care Equipment & Supplies
|
|
|
492,837
|
|
|
|
—
|
|
|
|
—
|
|
|
|
492,837
|
|
|
Hotels, Restaurants & Leisure
|
|
|
313,215
|
|
|
|
—
|
|
|
|
—
|
|
|
|
313,215
|
|
|
Insurance
|
|
|
604,230
|
|
|
|
—
|
|
|
|
—
|
|
|
|
604,230
|
|
|
Machinery
|
|
|
500,385
|
|
|
|
—
|
|
|
|
—
|
|
|
|
500,385
|
|
|
Oil, Gas & Consumable Fuels
|
|
|
875,040
|
|
|
|
—
|
|
|
|
—
|
|
|
|
875,040
|
|
|
Pharmaceuticals
|
|
|
245,700
|
|
|
|
—
|
|
|
|
—
|
|
|
|
245,700
|
|
|
Real Estate Investment Trusts (REITs)
|
|
|
2,276,630
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,276,630
|
|
|
Technology Hardware & Software
|
|
|
472,940
|
|
|
|
—
|
|
|
|
—
|
|
|
|
472,940
|
|
|
Textiles, Apparel & Luxury Goods
|
|
|
233,664
|
|
|
|
—
|
|
|
|
—
|
|
|
|
233,664
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Common Stock
|
|
|
10,536,141
|
|
|
|
—
|
|
|
|
—
|
|
|
|
10,536,141
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short Term Investment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Money Market Fund
|
|
|
159,054
|
|
|
|
—
|
|
|
|
—
|
|
|
|
159,054
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investments in Securities
|
|
$
|
10,695,195
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,695,195
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
There were no transfers into or out of Level 1, Level 2 and Level 3 fair value measurements during the
reporting period, as compared to their classification from the most recent annual report.
In May 2011, the FASB issued ASU
No. 2011-04 “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements” in GAAP and the International Financial Reporting Standards (“IFRS”). This requirement amends FASB ASC Topic 820, Fair Value
Measurements and Disclosures to establish common requirements for measuring fair value and for disclosing information about fair value measurements in accordance with GAAP and IFRS. This requirement is effective for fiscal years beginning after
December 15, 2011 and for interim periods within those fiscal years.
Management is currently evaluating the impact of
this amendment and does not believe they will have a material impact on the Funds’ financial statements.
29
JACOB FUNDS INC.
NOTES TO THE FINANCIAL STATEMENTS (Continued)
August 31, 2012
(b)
Income Recognition
—Interest income is accrued as earned. Dividend income is recorded on the ex-dividend date. All discounts and premiums are amortized using the effective interest method
for tax and financial reporting purposes.
(c)
Expenses
—Expenses that are not attributable to a particular Fund are
typically allocated in proportion to each Fund’s respective net assets.
(d)
Securities Transactions
—Security
transactions are accounted for on trade date. Realized gains and losses on securities sold are determined using specific identification.
(e)
Foreign Currency Transactions
—The books and records are maintained in U.S. dollars. Foreign currency denominated transactions (i.e., market value of investment securities, assets and
liabilities, purchases and sales of investment securities, and income and expenses) are translated into U.S. dollars at the current rate of exchange.
The Funds do not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
(f)
Distributions to Shareholders
—The Funds record distributions to shareholders on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Distributions of net realized capital gains, if any, will
be declared and distributed annually. The amounts of distributions from net investment income and net realized capital gains are determined in accordance with federal income tax regulations, which may differ from those amounts determined under U.S.
generally accepted accounting principles. These book/tax differences are either temporary or permanent in nature. To the extent these differences are permanent, reclassifications are made in the capital accounts in the period that the differences
arise. The reclassifications have no effect on net assets or net asset value per share.
(g)
Federal Income
Taxes
—The Funds comply with provisions of Subchapter M of the Internal Revenue Code applicable to regulated investment companies, including the distribution of substantially all of the Funds’ taxable income. Accordingly, no provision
for federal income taxes is considered necessary in the financial statements.
The Funds follow accounting standards regarding
recognition and measurement of tax positions taken on a tax return. No material uncertain tax positions existed as of August 31, 2012. As a result, the Funds have not recorded any liabilities for uncertain tax positions as of August 31, 2012. The
standards require the Funds to analyze all open tax years, as defined by the Statute of Limitations, for all major jurisdictions. Open tax years are those that are open for examinations by taxing authorities. Major jurisdictions for the Funds only
relate to federal tax years. As of August 31, 2012, open federal tax years include the tax years ended August 31, 2009 through August 31, 2012 for the Internet Fund, the
30
JACOB FUNDS INC.
NOTES TO THE FINANCIAL STATEMENTS (Continued)
August 31, 2012
tax years ended September 30, 2009, period ended August 31, 2010, year ended August 31, 2011 and year ended August 31, 2012 for the Small Cap Growth Fund and the tax years
ended May 31, 2009 through May 31, 2010, period ended August 31, 2010, year ended August 31, 2011 and year ended August 31, 2012 for the Wisdom Fund.
At August 31, 2012 the Internet Fund and Small Cap Growth Fund deferred, on a tax basis, Post October losses of $1,183,273 and $274,746, respectively and the Internet Fund deferred, on a tax basis, Post
December Ordinary losses of $578,111.
(h)
Use of Estimates
—The preparation of financial statements in conformity
with GAAP requires management to make estimates and assumptions that affect the reported amount 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.
(i)
Contingencies and
Commitments
—The Funds indemnify the Corporation’s Officers and Directors for certain liabilities that might arise from their performance of their duties to the Funds. Additionally, in the normal course of business, the Funds enter into
contracts that contain a variety of representations and warranties and which provide general indemnifications. Each Fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the
Funds that have not yet occurred. However, based on experience, the Corporation expects the risk of loss to be remote.
31
JACOB FUNDS INC.
NOTES TO THE FINANCIAL STATEMENTS (Continued)
August 31, 2012
NOTE 3—CAPITAL SHARE TRANSACTIONS
At August 31, 2012 there were twenty billion
shares, $0.001 par value, authorized. Transactions in shares of the Internet Fund were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
August 31, 2012
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Sales
|
|
|
1,957,940
|
|
|
$
|
5,838,275
|
|
|
Redemptions
|
|
|
(2,760,849
|
)
|
|
|
(8,143,073
|
)
|
|
Redemption Fees
|
|
|
—
|
|
|
|
4,599
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Decrease
|
|
|
(802,909
|
)
|
|
$
|
(2,300,199
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Shares Outstanding:
|
|
|
|
|
|
|
|
|
|
Beginning of period
|
|
|
13,977,160
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
End of period
|
|
|
13,174,251
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
August 31, 2011
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Sales
|
|
|
2,475,803
|
|
|
$
|
7,520,786
|
|
|
Redemptions
|
|
|
(3,893,220
|
)
|
|
|
(11,571,722
|
)
|
|
Redemption Fees
|
|
|
—
|
|
|
|
13,217
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Decrease
|
|
|
(1,417,417
|
)
|
|
$
|
(4,037,719
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Shares Outstanding:
|
|
|
|
|
|
|
|
|
|
Beginning of period
|
|
|
15,394,577
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
End of period
|
|
|
13,977,160
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32
JACOB FUNDS INC.
NOTES TO THE FINANCIAL STATEMENTS (Continued)
August 31, 2012
Transactions in shares of the Small Cap Growth Fund were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
August 31, 2012
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Sales
|
|
|
61,059
|
|
|
$
|
838,030
|
|
|
Reinvestments
|
|
|
18,902
|
|
|
|
240,803
|
|
|
Redemptions
|
|
|
(155,451
|
)
|
|
|
(2,133,300
|
)
|
|
Redemption Fees
|
|
|
—
|
|
|
|
204
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Decrease
|
|
|
(75,490
|
)
|
|
$
|
(1,054,263
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Shares Outstanding
|
|
|
|
|
|
|
|
|
|
Beginning of period
|
|
|
463,748
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
End of period
|
|
|
388,258
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
August 31, 2011
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Sales
|
|
|
208,094
|
|
|
$
|
3,553,418
|
|
|
Redemptions
|
|
|
(118,082
|
)
|
|
|
(1,878,153
|
)
|
|
Redemption Fees
|
|
|
—
|
|
|
|
8,277
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Increase
|
|
|
90,012
|
|
|
$
|
1,683,542
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares Outstanding
|
|
|
|
|
|
|
|
|
|
Beginning of period
|
|
|
373,736
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
End of period
|
|
|
463,748
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33
JACOB FUNDS INC.
NOTES TO THE FINANCIAL STATEMENTS (Continued)
August 31, 2012
Transactions in shares of the Wisdom Fund were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
August 31, 2012
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Sales
|
|
|
14,580
|
|
|
$
|
136,160
|
|
|
Reinvestments
|
|
|
9,530
|
|
|
|
84,721
|
|
|
Redemptions
|
|
|
(138,230
|
)
|
|
|
(1,293,462
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net Decrease
|
|
|
(114,120
|
)
|
|
$
|
(1,072,581
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Shares Outstanding
|
|
|
|
|
|
|
|
|
|
Beginning of period
|
|
|
1,182,659
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
End of period
|
|
|
1,068,539
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
August 31, 2011
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Sales
|
|
|
12,786
|
|
|
$
|
114,470
|
|
|
Reinvestments
|
|
|
2,184
|
|
|
|
18,963
|
|
|
Redemptions
|
|
|
(294,874
|
)
|
|
|
(2,522,148
|
)
|
|
Redemption Fees
|
|
|
—
|
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Decrease
|
|
|
(279,904
|
)
|
|
$
|
(2,388,711
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Shares Outstanding
|
|
|
|
|
|
|
|
|
|
Beginning of period
|
|
|
1,462,563
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
End of period
|
|
|
1,182,659
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A 2% redemption fee is assessed on any shares, except those received from reinvested distributions, that are sold within
30 days (Internet Fund) or 90 days (Small Cap Growth and Wisdom Funds) following their purchase date.
From time to time, the Funds may have a
concentration of shareholders holding a significant percentage of shares outstanding. Investment activities of these shareholders could have a material impact on the Funds. As of August 31, 2012, two shareholders owned greater than 10% of the Wisdom
Fund’s outstanding shares.
NOTE 4—INVESTMENT TRANSACTIONS
During the year ended August 31, 2012 for the Internet Fund, the Small Cap Growth Fund and the Wisdom Fund, purchases and sales of investment securities (excluding short-term investments) were as follows:
|
|
|
|
|
|
|
|
|
|
|
Fund
|
|
Purchases
|
|
|
Sales
|
|
|
Jacob Internet Fund
|
|
$
|
21,757,971
|
|
|
$
|
25,474,754
|
|
|
Jacob Small Cap Growth Fund
|
|
|
4,533,006
|
|
|
|
5,981,650
|
|
|
Jacob Wisdom Fund
|
|
|
2,023,166
|
|
|
|
2,300,344
|
|
34
JACOB FUNDS INC.
NOTES TO THE FINANCIAL STATEMENTS (Continued)
August 31, 2012
The Funds did not purchase long-term U.S. Government securities as a part of their investment strategies during the year ended August 31, 2012.
NOTE 5—TAX INFORMATION
At August 31, 2012, the components of accumulated
earnings/(losses) on a tax basis for the Funds were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Internet
Fund
|
|
|
Small Cap
Growth Fund
|
|
|
Wisdom
Fund
|
|
|
Cost of Investments
|
|
$
|
31,891,083
|
|
|
$
|
5,195,447
|
|
|
$
|
8,126,018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross unrealized appreciation
|
|
|
12,864,823
|
|
|
|
678,400
|
|
|
|
2,678,262
|
|
|
Gross unrealized depreciation
|
|
|
(3,914,375
|
)
|
|
|
(434,371
|
)
|
|
|
(109,085
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized appreciation
|
|
$
|
8,950,448
|
|
|
$
|
244,029
|
|
|
$
|
2,569,177
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Undistributed ordinary income
|
|
|
—
|
|
|
|
—
|
|
|
|
169,237
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total distributable earnings
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
169,237
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other accumulated losses
|
|
$
|
(7,945,200
|
)
|
|
$
|
(14,708,445
|
)
|
|
$
|
(1,270,894
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total accumulated earnings/(losses)
|
|
$
|
1,005,248
|
|
|
$
|
(14,464,416
|
)
|
|
$
|
1,467,520
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The differences between cost amounts for book purposes and tax purposes are primarily due to the tax deferral of losses on
wash sales, passive foreign investment companies (“PFICs”) and real estate investment trusts (“REITs”). At August 31, 2012, the Funds had accumulated net realized capital loss carryovers as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Internet
Fund
|
|
|
Small Cap
Growth Fund
|
|
|
Wisdom
Fund
|
|
|
Expiration
|
|
|
$
|
—
|
|
|
$
|
8,388,410
|
|
|
$
|
835,894
|
|
|
|
8/31/2017
|
|
|
|
6,183,816
|
|
|
|
6,045,289
|
|
|
|
435,000
|
|
|
|
8/31/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$6,183,816
|
|
|
$
|
14,433,699
|
|
|
$
|
1,270,894
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
To the extent the Funds realize future net capital gains, taxable distributions to its shareholders will be offset by any
unused capital loss carryover. For the year ended August 31, 2012, the Internet Fund, Small Cap Growth Fund and Wisdom Fund utilized capital loss carry forwards of $3,861,655, $65,992 and $209,504, respectively.
The Internet Fund made no distributions during the fiscal years ended August 31, 2012 and 2011. The Small Cap Growth Fund paid $267,796 out of ordinary
income during the year ended August 31, 2012 and made no distributions during the year ended August 31, 2011. The Wisdom Fund paid $104,302 out of ordinary
35
JACOB FUNDS INC.
NOTES TO THE FINANCIAL STATEMENTS (Continued)
August 31, 2012
income during the year ended August 31, 2012 and paid $23,510 out of short term capital gains during the year ended August 31, 2011, of which the tax basis was ordinary income.
Reclassification Adjustments:
Capital stock, undistributed net investment income (loss), and accumulated net realized gain (loss) have been
adjusted in the Statements of Assets and Liabilities for permanent book-tax differences for the Funds.
Differences primarily relate to the tax
treatment of net operating losses, expiring capital losses, and foreign currency gains and losses. To the extent these book and tax differences are permanent in nature, such amounts are reclassified at the end of the fiscal year among capital stock,
undistributed net investment income (loss) and undistributed net realized gain (loss) on investments. Accordingly, at August 31, 2012 reclassifications were recorded as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Internet
Fund
|
|
|
Small Cap
Growth
Fund
|
|
|
Wisdom
Fund
|
|
|
Undistributed net investment income
|
|
$
|
218,978
|
|
|
$
|
113,541
|
|
|
$
|
(2,149
|
)
|
|
Accumulated net realized loss on investments
|
|
|
(3
|
)
|
|
|
(34,063
|
)
|
|
|
2,148
|
|
|
Capital Stock
|
|
|
(218,975
|
)
|
|
|
(79,478
|
)
|
|
|
1
|
|
NOTE 6—INVESTMENT ADVISORY AND OTHER AGREEMENTS
The Corporation has Investment Advisory Agreements (the “Advisory Agreements”) with Jacob Asset Management of New York LLC (the “Adviser”), with whom certain Officers and a Director of
the Board are affiliated, to furnish investment advisory services to the Funds. Under the terms of the Advisory Agreements, the Corporation, on behalf of the Funds, compensates the Adviser for its management services based on an annual rate of 1.25%
of the Internet Fund’s average daily net assets; 0.90% of the Small Cap Growth Fund’s average daily net assets; and 0.50% of the Wisdom Fund’s annual average daily net assets and 0.40% of annual average daily net assets over $500
million.
The Adviser has contractually agreed to waive up to 0.10% of the average daily net assets from its advisory fee to the extent the
Internet Fund’s total annual operating expenses exceed 2.95% of the average daily net assets through January 2, 2014. The Adviser has the ability to recoup amounts waived for a period of three years following such fee waivers to the extent
that such recoupment by the Adviser will not cause the Internet Fund to exceed any applicable expense limitation in place when the fee was waived.
The Adviser has contractually agreed to waive its advisory fees in an amount up to an annual rate of 0.90% of the Small Cap Growth Fund’s average daily net assets, to the extent that the Fund’s
total annual operating expenses exceed 2.45% of average daily net assets through January 2, 2014. The Adviser has the ability to recoup amounts waived for a period of three years following such fee waivers to the extent that such recoupment by the
Adviser will not cause the Small Cap Growth Fund’s expenses to exceed 2.45%. For the year ended August 31, 2012, fees of $53,238 were waived by the Adviser. If the proposed reorganization described under Note 9 is completed for the Small
Cap Growth Fund, the fee waiver agreement will operate as described above, but with fees waived if expenses exceed 2.25%.
36
JACOB FUNDS INC.
NOTES TO THE FINANCIAL STATEMENTS (Continued)
August 31, 2012
The Adviser has contractually agreed to waive its advisory fees in an amount up to an annual rate of 0.50% of the Fund’s average daily net assets, to the extent that the Wisdom Fund’s total
annual operating expenses exceed 1.95% of average daily net assets through January 2, 2014. The Adviser has the ability to recoup amounts waived for a period of three years following such fee waivers to the extent that such recoupment by the Adviser
will not cause the Wisdom Fund’s expenses to exceed 1.95%. For the year ended August 31, 2012, fees of $52,573 were waived by the Adviser.
Following is a schedule of when fees may be recouped:
|
|
|
|
|
|
|
|
|
|
Small Cap
Growth Fund
|
|
|
Wisdom
Fund
|
|
|
Expiration
|
|
$
|
—
|
|
|
$
|
17,306
|
|
|
May 31, 2013
|
|
|
25,607
|
|
|
|
14,645
|
|
|
August 31, 2013
|
|
|
57,146
|
|
|
|
56,022
|
|
|
August 31, 2014
|
|
|
53,238
|
|
|
|
52,573
|
|
|
August 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
$135,991
|
|
|
$
|
140,546
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Bancorp Fund Services, LLC serves as transfer agent, administrator and accounting services agent for the Funds. U.S.
Bank, N.A. serves as custodian for the Funds. U.S. Bancorp Asset Management, Inc. serves as the securities lending agent.
NOTE
7—SECURITIES LENDING
The Funds may lend portfolio securities equal in value to up to 33% of their total assets (including such loans)
to borrowers under terms of participation in a securities lending program administered by U.S. Bancorp Asset Management, Inc. The Agreement requires that loans are collateralized at all times in an amount equal to at least 102% of the market value
of any loaned securities at the time of the loan, plus accrued interest.
The Funds receive compensation in the form of fees and earn interest
on the cash collateral. The amount of fees depends on a number of factors including the types of security, length of the loan and credit standing of the borrower. The Funds continue to receive interest or dividends on the securities loaned during
the borrowing period. The Funds have the right under the terms of the securities lending agreement to recover the securities from the borrower on demand. U.S. Bancorp Asset Management, Inc. received no income from the Internet Fund for its
securities lending administrative services during the year ended August 31, 2012. The Small Cap Growth Fund and Wisdom Fund did not participate in securities lending during the year ended August 31, 2012.
As of August 31, 2012, the Internet Fund had loaned securities that were collateralized by cash proceeds that the borrower paid to the Internet Fund. The
cash collateral is invested by the custodian with the approval of the Adviser. Although risk is mitigated by the collateral and by an indemnification by the securities lending agent, the Internet Fund could experience a delay in recovering its
securities and possible loss of income or
37
JACOB FUNDS INC.
NOTES TO THE FINANCIAL STATEMENTS (Continued)
August 31, 2012
value if the borrower fails to return the borrowed securities. The Internet Fund is also exposed to market risk on the investments it purchases with the proceeds of the cash collateral. As of
August 31, 2012, the value of the Internet Fund’s securities on loan was $1,782,782. The cost of the related collateral was $657,577 and the fair value of the investments purchased was $137,176 resulting in unrealized depreciation of $520,401
as of August 31, 2012. An amount of $1,142,560 of the collateral was not invested and held in cash. For the year ended August 31, 2012, the Internet Fund experienced $4,193 of unrealized gains on the investments it purchased with proceeds of the
cash collateral.
NOTE 8—DISTRIBUTION AND SERVICE PLAN
The Corporation, on behalf of the Internet Fund, has adopted a distribution and service plan (the “Internet Fund Plan”), pursuant to Rule 12b-1 under the 1940 Act. The Internet Fund Plan
provides that the Internet Fund will compensate the Adviser 0.25% per annum of the Internet Fund’s average daily net assets for certain expenses and costs incurred in connection with providing shareholder servicing and maintaining
shareholder accounts and to compensate parties with which it has written agreements and whose clients own shares of the Internet Fund for providing servicing to their clients (“Shareholder Servicing Fee”). The Internet Fund Plan also
provides for a distribution fee equal to 0.10% of the Internet Fund’s average daily net assets on an annual basis (“Asset Based Sales Charge”). The fee is used to compensate Quasar Distributors, LLC, the Funds’ distributor (the
“Distributor”), for basic distribution services, out of pocket expenses incurred in connection with activities to sell Internet Fund shares, advertising, compliance reviews, and licensing of the Adviser’s staff. The Distributor may
make payments from time to time from the Asset Based Sales Charge to broker-dealers and other financial professionals whose clients are Internet Fund shareholders for providing distribution assistance and promotional support to the Internet Fund.
Remaining amounts of the Asset Based Sales Charge may be used to satisfy distribution costs as directed by the Adviser. The Internet Fund incurred $140,462 in expenses pursuant to the 12b-1 Plan for the year ended August 31, 2012.
The Corporation, on behalf of the Small Cap Growth Fund and Wisdom Fund, has adopted a distribution and service plan (the “Plan”) pursuant to
Rule 12b-1 under the 1940 Act. Rule 12b-1 provides that an investment company that bears any direct or indirect expense of distributing its shares must do so only in accordance with the Plan permitted by Rule 12b-1. Pursuant to the Plan, the Small
Cap Growth Fund and Wisdom Fund make payments to the Distributor, the Adviser, financial intermediaries or others to reimburse such parties for distribution and/or shareholder servicing activity in an amount not to exceed 0.35% of the average daily
net assets on an annual basis. The distribution fees are “asset based” sales charges and, therefore, long-term shareholders may pay more in total sales charges than the economic equivalent of the maximum front-end sales charge permitted by
the Financial Industry Regulatory Authority (FINRA). The Small Cap Growth Fund incurred $20,704 and the Wisdom Fund incurred $36,801 in expenses pursuant to the 12b-1 Plan for the year ended August 31, 2012.
38
JACOB FUNDS INC.
NOTES TO THE FINANCIAL STATEMENTS (Continued)
August 31, 2012
NOTE 9—SUBSEQUENT EVENTS
In preparing these financial statements, the Corporation has
evaluated events after August 31, 2012 that would require adjustment to or additional disclosure in these financial statements.
Effective July
9, 2012, the Adviser replaced PineBridge Investments, LLC as the investment adviser to the PineBridge US Micro Cap Growth Fund and the PineBridge US Small Cap Growth Fund (the “PineBridge Funds”). The PineBridge Funds have subsequently
been renamed the Jacob Micro Cap Growth Fund and Jacob Small Cap Growth Fund II, respectively. The PineBridge Funds are proposed to be reorganized into the Small Cap Growth Fund and the Jacob Micro Cap Growth Fund, a new series of the Corporation,
respectively. The Board of the PineBridge Funds has approved each reorganization and each fund’s shareholders will consider approval of the agreement and plan of reorganization and termination at a special shareholders meeting expected to take
place on or around November 9, 2012.
39
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors of Jacob Funds Inc.
and the Shareholders of the
Jacob Internet Fund,
Jacob Small Cap Growth Fund and
Jacob
Wisdom Fund
We have audited the accompanying statements of assets and liabilities of the Jacob Internet Fund, Jacob Small Cap Growth Fund,
and Jacob Wisdom Fund, each a series of shares of Jacob Funds Inc. (the
“Funds”
), including the schedules of investments, as of August 31, 2012, the related statements of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the two years in the period then ended and each of the respective years or periods ended August 31, 2010.
Additionally, we have audited the financial highlights of the Jacob Wisdom Fund for each of the two years in the period ended May 31, 2009. 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. The financial statements and financial highlights for all of the remaining years or periods presented were audited by
other auditors, whose reports dated July 30, 2010, November 23, 2009, and October 28, 2009 each expressed an unqualified opinion on such financial statements and financial highlights.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we
plan and perform the audits to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of securities owned as of August 31, 2012, 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 audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Jacob Internet Fund, Jacob Small Cap Growth
Fund, and Jacob Wisdom Fund as of August 31, 2012, the results of their operations for the year then ended and the changes in their net assets and their financial highlights for each of the two years in the period then ended and each of the
respective years or periods ending August 31, 2010 and also the financial highlights of the Jacob Wisdom Fund for each of the two years in the period ended May 31, 2009, in conformity with accounting principles generally accepted in the
United States of America.
BBD, LLP
Philadelphia, Pennsylvania
October 24, 2012
40
JACOB FUNDS INC.
ADDITIONAL INFORMATION ON FUND EXPENSES (Unaudited)
For the Six Months Ended August 31, 2012 for the Internet Fund, Small Cap
Growth Fund and Wisdom Fund
As a shareholder of a mutual fund, you may 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.
The Funds do not currently charge sales charges (loads) or exchange fees. The Funds assess a redemption fee of 2% on shares sold within 30 days for the Internet Fund and 90 days for the Small Cap Growth Fund and Wisdom Fund following their purchase
date. In addition, you will be assessed fees for outgoing wire transfers, returned checks and stop payment orders. The Funds charge management fees and distribution and/or service (12b-1) fees. The Expense Example is intended to help you understand
your ongoing costs (in dollars) of investing in the Funds 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 (3/1/2012–8/31/2012) for the Internet Fund, Small Cap Growth Fund and Wisdom Fund.
Actual Expenses
The first line of the table below provides information about account values based on actual returns and actual expenses. Although the Funds charge no
sales load, the Funds charge a redemption fee of 2% on shares sold within 30 days for the Internet Fund and 90 days for the Small Cap Growth Fund and Wisdom Fund following the purchase date. In addition, you will be assessed fees for outgoing wire
transfers, returned checks and stop payment orders at prevailing rates charged by U.S. Bancorp Fund Services, LLC, the Funds’ transfer agent. If you request that a redemption be made by wire transfer, currently the Funds’ transfer agent
charges a $15.00 fee. The Example does not reflect transactional costs, such as redemption fees. You may use the information in the first line below, 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 the 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 based on a hypothetical return and hypothetical expenses based
on a Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not a 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 Funds 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. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect transactional costs, such as redemption fees. Therefore, the second line of the table is
useful in comparing ongoing costs only, and will not help you determine the
41
JACOB FUNDS INC.
ADDITIONAL INFORMATION ON FUND EXPENSES (Unaudited) (Continued)
relative total costs of owning different funds. In addition, if the transactional costs were included, your costs would have been higher.
Internet Fund
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning Account
Value 3/1/12
|
|
|
Ending Account
Value 8/31/12
|
|
|
Expenses Paid
During the Period
3/1/12–8/31/12*
|
|
|
Actual
|
|
$
|
1,000.00
|
|
|
$
|
965.00
|
|
|
$
|
14.42
|
|
|
Hypothetical (5% annual return before expenses)
|
|
$
|
1,000.00
|
|
|
$
|
997.96
|
|
|
$
|
14.66
|
|
|
*
|
Expenses are equal to the Internet Fund’s annualized expense ratio of 2.92% multiplied by the average account value over the period multiplied by 184/366 (to
reflect the one-half year period).
|
Small Cap Growth Fund
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning Account
Value 3/1/12
|
|
|
Ending Account
Value 8/31/12
|
|
|
Expenses Paid
During the Period
3/1/12–8/31/12*
|
|
|
Actual
|
|
$
|
1,000.00
|
|
|
$
|
934.00
|
|
|
$
|
17.06
|
|
|
Hypothetical (5% annual return before expenses)
|
|
$
|
1,000.00
|
|
|
$
|
994.99
|
|
|
$
|
17.60
|
|
|
*
|
Expenses are equal to the Small Cap Growth Fund’s annualized expense ratio of 3.51% multiplied by the average account value over the period multiplied by 184/366
(to reflect the one-half year period).
|
Wisdom Fund
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning Account
Value 3/1/12
|
|
|
Ending Account
Value 8/31/12
|
|
|
Expenses Paid
During the Period
3/1/12–8/31/12*
|
|
|
Actual
|
|
$
|
1,000.00
|
|
|
$
|
1,047.30
|
|
|
$
|
11.84
|
|
|
Hypothetical (5% annual return before expenses)
|
|
$
|
1,000.00
|
|
|
$
|
1,001.07
|
|
|
$
|
11.57
|
|
|
*
|
Expenses are equal to the Wisdom Fund’s annualized expense ratio of 2.30% multiplied by the average account value over the period multiplied by 184/366 (to reflect
the one-half year period).
|
42
JACOB FUNDS INC.
ADDITIONAL INFORMATION (Unaudited)
Proxy Voting
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available without
charge by calling toll-free 1-888-JACOB-FX (522-6239) or on the SEC website at http://www.sec.gov.
Proxy Voting Record
Information regarding how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available
without charge by calling 1-888-JACOB-FX (522-6239) or on the SEC website at http://www.sec.gov.
Holdings Disclosure
The Funds’ Semi-Annual and Annual Reports include a complete schedule of portfolio holdings for the second and fourth quarters of each fiscal year.
The Funds file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form
N-Q. The Funds’ Forms N-Q are available on the SEC website at http://www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be
obtained by calling 1-800-SEC-0330.
ADDITIONAL TAX INFORMATION (Unaudited)
For the period ended August 31, 2012, certain dividends paid by the Funds may be subject to a maximum tax rate of 15%, as provided by the Jobs and Growth Tax Relief Reconciliation Act of 2003. The
percentage of dividends declared from net investment income designated as qualified dividend income is as follows:
For corporate shareholders, the percent of ordinary income distributions qualifying for the corporate dividends received
deduction for the period ended August 31, 2012 is as follows:
43
JACOB FUNDS INC.
ADDITIONAL INFORMATION (Unaudited)
Information about Directors
The business and affairs of the Funds are managed under the direction of the Corporation’s Board of Directors. Information pertaining to the Directors of the Corporation is set forth below. The
Statement of Additional Information includes additional information about the Corporation’s Directors and Officers and is available, without charge, upon request by calling toll-free 1-888-JACOB-FX (1-888-522-6239).
|
|
|
|
|
|
|
|
|
|
|
|
|
Name, Address and Age
|
|
Position(s)
Held
within
the Corporation
|
|
Term of
Office &
Length of
Time
Served
(1)
|
|
Principal Occupation During
Past Five
Years
|
|
Number of
Portfolios
in Fund
Complex
Overseen
by Director
|
|
Other
Directorships
Held By
Director
|
|
Independent Directors:
|
|
|
|
|
|
|
|
|
|
|
|
William B. Fell
653 Manhattan
Beach Blvd. #J Manhattan Beach, CA 90266
Age: 43
|
|
Director
|
|
Since
1999
|
|
Accounting and Financial Consultant, 2010–2011; Controller, ABB Inc., Instrumentation Division, 2009–2010; General Accounting Manager, ABB Inc., Instrumentation Division,
February 2004–September 2009.
|
|
3
|
|
None
|
|
|
|
|
|
|
|
|
Christopher V. Hajinian
653
Manhattan Beach Blvd. #J Manhattan Beach, CA 90266
Age: 43
|
|
Director
|
|
Since
1999
|
|
Media Production, since 2011; Property Management, since 2008; Attorney, Neil A. Morris Associates, P.C., 2006–2007.
|
|
3
|
|
None
|
|
|
|
|
|
|
|
|
Jeffrey I. Schwarzschild
653
Manhattan Beach Blvd. #J Manhattan Beach, CA 90266 Age: 41
|
|
Director
|
|
Since
1999
|
|
Chief Counsel, California Conservation Corps, since September 2011; Deputy Attorney General, The State of California, October 2006–September 2011; Associate attorney, Law
Office of Mark E. Merin, April 2003–September 2006.
|
|
3
|
|
None
|
|
|
|
|
|
|
|
|
Interested Directors:
|
|
|
|
|
|
|
|
|
|
|
|
Ryan I. Jacob
(2)
653 Manhattan Beach Blvd. #J Manhattan Beach, CA 90266
Age: 43
|
|
Director, President, Chairman of the Board and Chief Executive Officer
|
|
Since
1999
|
|
Chairman and Chief Executive Officer of the Adviser since 1999; Chief Portfolio Manager of The Internet Fund, Inc. from December 1997–June 1999; Analyst for Horizon Asset
Management, 1994–August 1998.
|
|
3
|
|
None
|
(continued on next page)
44
JACOB FUNDS INC.
ADDITIONAL INFORMATION (Unaudited) (Continued)
(continued from previous page)
|
|
|
|
|
|
|
|
|
Name, Address and Age
|
|
Position(s)
Held within
the Corporation
|
|
Term of
Office &
Length
of
Time
Served
(1)
|
|
Principal Occupation During
Past Five
Years
|
|
Officers:
|
|
|
|
|
|
|
|
Francis J. Alexander
(3)
653
Manhattan Beach Blvd. #J
Manhattan Beach, CA 90266
Age: 68
|
|
Vice President, Secretary and Treasurer
|
|
Since
1999
|
|
Member of the Adviser and portfolio manager of the Internet Fund since inception in 1999, Director of the Internet Fund, 1999–October 2003; President, Alexander Capital
Management, Inc., March 1985–present; Managing Member, ACMG, LLC (registered investment adviser), October 1999 to December 2003; Director and portfolio manager, 1998–March 2002, chairman of investment committee, March 1999–March 2002,
Lepereq, de Neuflize & Co. Inc. (financial services company in investment advisory and broker/dealer business).
|
|
|
|
|
|
|
Shane
Morris
(3)
653 Manhattan Beach Blvd. #J
Manhattan Beach, CA
90266
Age: 35
|
|
Chief Compliance Officer and Anti-Money Laundering Compliance
Officer
|
|
2004–2007
and since
July 2008
|
|
Operations Manager for the Adviser since July 2008; Writer, Walt Disney Animation Studios, October 2007–July 2008; Operations Manager for the Adviser, February
2002–October 2007.
|
|
(1)
|
Each Director holds office during the lifetime of the Funds, until his termination, or until the election and qualification of his successor.
|
|
(2)
|
Ryan I. Jacob is deemed to be an “interested person” of the Funds (as defined in the 1940 Act) because of his affiliation with the Adviser.
|
|
(3)
|
Francis J. Alexander and Shane Morris are related to each other as stepfather and stepson, respectively.
|
45
Investment Advisor
Jacob Asset Management of New York LLC
Administrator and Transfer Agent
and Dividend Agent
U.S.
Bancorp Fund Services, LLC
Underwriter and Distributor
Quasar Distributors, LLC
Custodian
U.S. Bank, N.A.
Legal Counsel
Stradley Ronon Stevens & Young, LLP
Independent Registered Public
Accounting Firm
BBD, LLP
This report has been prepared for the information of shareholders of the Jacob Internet Fund, the
Jacob Small Cap Growth Fund and the Jacob Wisdom Fund is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus that includes information regarding the Funds’ objectives, policies,
management, records and other information.
Jacob Asset Management of New York LLC
1-888-JACOB-FX (522-6239)
www.Jacobmutualfunds.com
Annual
Report
August 31, 2012