N-CSRS 1 wegenercnsrs200803.htm





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 811-21860


Wegener Investment Trust

(Exact name of registrant as specified in charter)


5575 Vincent Gate Terrace,  #1248

Alexandria, VA  22312

 (Address of principal executive offices) (Zip code)


Steven M. Wegener

5575 Vincent Gate Terrace,  #1248

Alexandria, VA  22312



(Name and address of agent for service)


With copy to:

JoAnn M. Strasser

Thompson Hine LLP

312 Walnut Street, 14th floor

Cincinnati, Ohio 45202



Registrant's telephone number, including area code: (703) 282-9380


Date of fiscal year end: June 30


Date of reporting period: December 31, 2007


Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1).  The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection and policymaking roles.


A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public.  A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number.  Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609.  The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. 3507.


Item 1.  Reports to Stockholders.
















SEMI-ANNUAL REPORT




WEGENER ADAPTIVE GROWTH FUND


A SERIES OF THE WEGENER INVESTMENT TRUST


December 31, 2007


























WEGENER ADAPTIVE GROWTH FUND

Portfolio Illustration

December 31, 2007 (Unaudited)



The following chart gives a visual breakdown of the Fund by the industry sectors the underlying securities represent as a percentage of the portfolio of investments excluding options and short term investments.


[wegenercnsrs200803002.jpg]














   

 

Wegener Adaptive Growth Fund

 

 

Schedule of Investments

 

 

December 31, 2007 (Unaudited)

 

   

Shares

 

Value

   

COMMON STOCKS - 92.93%

 
   

Accident & Health Insurance - 2.57%

 

200

Assurant, Inc.

$        13,380

200

Reinsurance Group Of America, Inc.

         10,496

  

23,876

Agricultural Products-Livestock & Animal Specialties - 2.00%

 

700

Cal-Maine Foods, Inc.

18,571

   

Computer Storage Devices - 1.30%

 

400

Western Digital Corp.

12,084

   

Crude Petroleum & Natural Gas - 4.60%

 

300

Chesapeake Energy Corp.

11,760

350

Santos Ltd.

17,280

600

Mariner Energy, Inc.

         13,728

  

42,768

Deep Sea Foreign Transportation - 2.48%

 

300

Tsakos Energy Navigation Ltd.

11,109

550

International Shipholding Corp.

         11,990

  

23,099

Electric Services - 0.82%

 

6,400

Commerce Energy Group, Inc.

7,616

   

Electromedical & Electrotherapy - 0.84%

 

2,200

Escalon Medical Corp.

7,832

   

Fabricated Structural Metal Products - 1.02%

 

300

Gulf Island Fabrication, Inc.

9,513

   

Fire, Marine & Casualty Insurance - 2.88%

 

300

Odyssey Re Holdings Corp.

11,013

1,300

Amcomp, Inc.

12,155

100

Safety Insurance Group, Inc.

           3,662

  

26,830

Food And Kindred Products - 1.41%

 

350

Unilever Plc

13,097

   

Foreign Money Center Banks - 1.25%

 

90

Deutsche Bank

11,647

   

Games, Toys & Children's Vehicles - 1.10%

 

400

Hasbro, Inc.

10,232

   

Healthcare - 1.38%

 

700

Obagi Medical Products, Inc.

12,831

   

Industrial Organic Chemicals - 1.48%

 

500

Methanex Corp.

13,800

   

Industrial Trucks, Tractors, Trailors & Stackers - 1.06%

 

150

Terex Corp.

9,836

   

Insurance Agents, Brokers & Service - 0.65%

 

900

Brooke Corp.

6,066

   

Leather & Leather Products - 0.45%

 

600

Jaclyn, Inc.

4,164

   

Machine Tools, Metal Cutting Types - 0.63%

 

350

Hardinge, Inc.

5,873

   

Medicinal Chemicals & Botanical Products - 1.40%

 

700

Nutraceutical International Corp.

9,275

600

Mannatech, Inc.

           3,792

  

13,067

Metal Forgings & Stampings - 1.35%

 

500

Park-Ohio Holding Corp.

12,550

   

Metal Mining - 2.20%

 

200

Freeport Mcmoran Copper & Gold Inc

20,488

   

Oil & Gas Field Exploration Services - 1.81%

 

300

CGG Veritas

16,815

   

Oil & Gas Field Machinery & Equipment - 4.09%

 

400

FMC Technologies, Inc.

22,680

450

Oil States International

         15,354

  

38,034

Oil Royalty Traders - 1.38%

 

300

Sabine Royalty Trust

12,864

   

Orthopedic, Prosthetic & Surgical Appliances & Supplies - 0.73%

 

600

Span America Medical Systems, Inc.

6,786

   

Personal Credit Institutions - 0.49%

 

300

First Marblehead Corp.

4,590

   

Petroleum Refining - 5.18%

 

400

Frontier Oil Corp.

16,232

250

Valero Energy Corp.

17,508

200

Sunoco, Inc.

         14,488

  

48,228

Pharmaceutical Preparations - 7.29%

 

600

Biovail Corp. International

8,076

600

Aspreva Pharmaceuticals Corp.

15,600

400

Sciele Pharma, Inc.

8,180

100

Johnson & Johnson

6,670

250

Adams Respiratory Therapeutics, Inc.

14,935

900

Viropharma, Inc.

7,146

100

Cephalon, Inc.

           7,176

  

67,783

Plastics Products - 2.07%

 

1,500

ICO, Inc.

19,260

   

Printed Circuit Boards - 0.59%

 

3,500

SMTC Corp.

5,530

   

Real Estate Agents & Managers - 1.03%

 

2,300

Silverleaf Resorts, Inc.

9,568

   

Retail-Auto Dealers & Gasoline - 1.63%

 

450

Delek US Holdings, Inc.

9,104

400

Asbury Automotive Group, Inc.

           6,020

  

15,124

Retail-Catalog & Mail-Order Houses - 1.75%

 

800

Systemax, Inc.

16,256

   

Retail-Grocery Stores - 1.42%

 

260

Village Super Market, Inc.

13,231

   

Rolling Drawing & Extruding of Nonferrous Metals - 1.56%

 

750

Olin Corp.

14,498

   

Secondary Smelting & Refining - 1.85%

 

300

OM Group, Inc.

17,262

   

Security Brokers, Dealers - 1.37%

 

300

Oppenheimer Holdings, Inc.

12,705

   

Semiconductors & Related Devices - 3.25%

 

800

Smart Modular Technologies, Inc.

8,144

1,529

Siliconware Precision Indust Co.,Ltd

13,593

2,000

Chipmos Technologies Bermuda, Ltd

           8,520

  

30,257

Services-Business Services - 1.68%

 

550

Telvent Git SA

15,626

   

Services-Computer Integrated Systems Design - 1.16%

 

600

Sykes Enterprise, Inc.

10,800

   

Services-Engineering Services - 3.18%

 

350

Vse Corp.

17,094

1,900

Versar, Inc.

         12,483

  

29,577

Services-Equipment Rental & Leasing - 1.75%

 

700

Aerocentury Corp.

16,240

   

Services-Help Supply Services - 2.74%

 

600

Volt Information Sciences, Inc.

10,956

1,500

Rcm Technologies, Inc.

8,820

100

Manpower, Inc.

           5,690

  

25,466

Services-Skilled Nursing Care - 0.36%

 

300

Advocat, Inc.

3,306

   

Steel Works, Blast Furnaces & Rolling & Finishing Mills - 2.47%

 

400

Ternium SA Sponsored ADR

16,044

1,100

Friedman Industries, Inc.

           6,985

  

23,029

Sugar & Confectionery Products - 0.81%

 

400

Imperial Sugar Co.

7,508

   

Surgical & Medical Instruments - 1.32%

 

900

Aristotle Corp.

12,330

   

Wholesale-Computers & Peripher - 1.24%

 

1,100

Inx, Inc.

11,495

   

Wholesale-Electrical Apparatus - 1.34%

 

200

Anixter International, Inc.

12,454

   

Wholesale-Groceries, General Line - 1.75%

 

500

Amcon Distributing Co.

16,374

   

Wholesale-Metals Service Centers & offices - 1.74%

 

300

Reliance Steel & Aluminum Co.

16,259

   

Women's, Misses', and Juniors Outerwear - 1.04%

 

8,400

Tarrant Apparel Group

           9,743

   

TOTAL FOR COMMON STOCKS (Cost $863,929) - 92.93%

$      864,838

   

PUT OPTIONS

 
   

Underlying Security

 

   Expiration Date/Exercise Price

 
   

Shares Subject

 

to Put

  
 

Russell 2000 Index

 

900

March 2008 Put @ 780.00

$        41,310

   
 

S&P 500 Index

 

100

March 2008 Put @ 1,500.00

           7,370

   
 

Total (Premiums Paid $51,480) - 5.23%

$        48,680

   

SHORT TERM INVESTMENTS - 5.94%

 

55,267

Fidelity Money Market Portfolio Class Select 4.95% ** (Cost $55,267)

         55,267

   

TOTAL INVESTMENTS (Cost $970,675) - 104.10%

$      968,785

   

LIABILITIES IN EXCESS OF OTHER ASSETS - (4.10)%

       (38,161)

   

NET ASSETS - 100.00%

$      930,624

   

* Non-income producing securities during the period.

 

** Variable rate security; the coupon rate shown represents the yield at December 31, 2007.

 

ADR - American Depository Receipt

 

The accompanying notes are an integral part of these financial statements.

 












    

Wegener Adaptive Growth Fund

Schedule of Call Options Written

December 31, 2007 (Unaudited)

    
 

CALL OPTIONS WRITTEN

  
    
 

Underlying Security

Shares Subject

 
 

Expiration Date/Exercise Price

to Call

Value

 

 Russell 2000 Index

  
 

 September 2008 Call @ 780.00

                  900

 $        30,510

    
 

 S&P 500 Index

  
 

 September 2008 Call @ 1,500.00

                  100

            5,220

    
 

Total (Premiums Received $61,030)

 

 $        35,730

    
    
    
    
    
    
    
    
    

 The accompanying notes are an integral part of these financial statements.

















   

 

Wegener Adaptive Growth Fund

 

 

Statement of Assets and Liabilities

 

 

December 31, 2007 (Unaudited)

 

   

Assets:

  

       Investments in Securities, at Value (Cost $970,675)

$      968,785

       Receivables:

 

               Dividends and Interest

1,664

               Due from Advisor

           4,595

                     Total Assets

        975,044

Liabilities:

  

        Covered Call Options Written at Fair Market Value (premiums received $61,030)

35,730

        Other Accrued Expenses

           8,690

                     Total Liabilities

         44,420

Net Assets

 

$      930,624

   

Net Assets Consist of:

 

    Paid In Capital

$      876,324

    Accumulated Undistributed Net Investment Loss

         (1,944)

    Accumulated Undistributed Realized Gain on Investments and Options Written

         32,834

    Unrealized Appreciation in Value of Investments and Options Written

         23,410

Net Assets, for 87,016 Shares Outstanding

$      930,624

   

Net Asset Value Per Share

$         10.69

   

The accompanying notes are an integral part of these financial statements.

 












   

 

Wegener Adaptive Growth Fund

 

 

Statement of Operations

 

 

For the six months ended December 31, 2007 (Unaudited)

 

   
   

Investment Income:

 

       Dividends (net of foreign tax withheld of $11)

$         5,633

       Interest

 

           1,508

            Total Investment Income

           7,141

   

Expenses:

  

       Advisory Fees (Note 3)

           5,707

       Legal Fees

           7,604

       Audit Fees

           5,069

       Transfer Agent Fees

           5,069

       Custodial Fees

           2,281

       Trustee Fees

           1,014

       Blue Sky Fees

              507

       Insurance Fees

              298

       Printing and Mailing Fees

              151

       Miscellaneous Fees

              151

            Total Expenses

         27,851

                 Fees Waived and Reimbursed by the Advisor (Note 3)

       (18,766)

            Net Expenses

           9,085

   

Net Investment Loss

         (1,944)

   

Realized and Unrealized Gain (Loss) on Investments:

 

   Realized Gain on Investments

         54,888

   Realized Gain on Options

         55,020

   Net Change in Unrealized Depreciation on:

 

       Investments

       (83,106)

       Options

 

       (16,284)

Realized and Unrealized Gain (Loss) on Investments

         10,518

   

Net Increase in Net Assets Resulting from Operations

$         8,574

   
   
   

The accompanying notes are an integral part of these financial statements.

 














    

Wegener Adaptive Growth Fund

Statements of Changes in Net Assets

 

 

 

 

    
  

(Unaudited)

 
  

Six Months

 Period *

  

Ended

 Ended

  

12/31/2007

6/30/2007

Increase (Decrease) in Net Assets From Operations:

  

    Net Investment Loss

$       (1,944)

$       (1,459)

    Net Realized Gain (Loss) on Investments and Options Written

        109,908

       (26,076)

    Unrealized Appreciation (Depreciation) on Investments and Options Written

       (99,390)

        122,800

    Net Increase in Net Assets Resulting from Operations

           8,574

         95,265

    

Distributions to Shareholders:

  

    Net Investment Income

  -  

  -  

    Realized Gains

       (50,998)

                -  

    Total Dividends and Distributions Paid to Shareholders

       (50,998)

  -  

    

Capital Share Transactions (Note 5)

         87,703

        690,080

    

Total Increase in Net Assets

         45,279

        785,345

    

Net Assets:

   

   Beginning of Period

        885,345

        100,000

    

   End of Period (Including Undistributed Net Investment Loss of ($1,944) and

  

         $0, respectively)

$      930,624

$      885,345

    
    

*  For the period September 13, 2006 (commencement of investment operations) through June 30, 2007.

 

The accompanying notes are an integral part of these financial statements.

  













     

Wegener Adaptive Growth Fund

 

Financial Highlights

 

Selected data for a share outstanding throughout the period.

 
     
  

(Unaudited)

  
  

Six Months

 Period *

 
  

Ended

 Ended

 
  

12/31/2007

6/30/2007

 
     

Net Asset Value, at Beginning of Period

$         11.19

$         10.00

 
     

Income From Investment Operations:

   

  Net Investment Income (Loss) **

          (0.02)

          (0.02)

 

  Net Gain on Securities (Realized and Unrealized)

             0.14

             1.21

 

     Total from Investment Operations

             0.12

             1.19

 
     

Distributions:

    

  Net Investment Income

  -  

  -  

 

  Realized Gains

          (0.62)

                -  

 

     Total from Distributions

          (0.62)

  -  

 
     

Net Asset Value, at End of Period

$         10.69

$         11.19

 
     

Total Return ***

         1.06%

11.90%

 
     

Ratios/Supplemental Data:

   

  Net Assets at End of Period (Thousands)

$            931

$            885

 

  Before Waivers

   

     Ratio of Expenses to Average Net Assets ****

6.10%

6.48%

 

     Ratio of Net Investment Income (Loss) to Average Net Assets ****

       (4.53)%

       (4.72)%

 

  After Waivers

   

     Ratio of Expenses to Average Net Assets ****

1.99%

1.99%

 

     Ratio of Net Investment Income (Loss) to Average Net Assets ****

       (0.43)%

       (0.24)%

 

  Portfolio Turnover

48.59%

81.91%

 
     
     

*  For the period September 13, 2006 (commencement of investment operations) through June 30, 2007.

** Per share net investment income has been determined on the basis of average shares outstanding during the period.

*** Assumes reinvestment of dividends.

**** Annualized

     

The accompanying notes are an integral part of these financial statements.

   












WEGENER ADAPTIVE GROWTH FUND

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2007 (UNAUDITED)


Note 1. Organization

The Wegener Adaptive Growth Fund (the “Fund”), is a diversified series of the Wegener Investment Trust (the “Trust”), an open-end regulated investment company that was organized as an Ohio business trust on January 23, 2006. The Trust is permitted to issue an unlimited number of shares of beneficial interest of separate series. The Fund is currently the only series authorized by the Trustees. The Fund’s investment objective is long-term capital appreciation while attempting to protect capital during negative market conditions using hedging strategies. The Fund’s principal investment strategy is to invest in a portfolio of common stocks that the Fund’s investment manager, Wegener, LLC (the “Advisor”), believes has superior prospects for appreciation.

 

Note 2. Summary of Significant Accounting Policies

The following is a summary of significant accounting policies employed by the Fund in preparing its financial statements:


Security Valuation- Equity securities generally are valued by using market quotations, but may be valued on the basis of prices furnished by a pricing service when the Advisor believes such prices accurately reflect the fair market value of such securities. Securities that are traded on any stock exchange or on the NASDAQ over-the-counter market are generally valued by the pricing service at the last quoted sale price. Lacking a last sale price, an equity security is generally valued by the pricing service at its last bid price. When market quotations are not readily available, when the Advisor determines that the market quotation or the price provided by the pricing service does not accurately reflect the current market value, or when restricted or illiquid securities are being valued, such securities are valued as determined in good faith by the Advisor in conformity with guidelines adopted by and subject to review of the Board of Trustees. The Board has adopted guidelines for good faith pricing, and has delegated to the Advisor the responsibility for determining fair value prices, subject to review by the Board of Trustees.


Fixed income securities generally are valued by using market quotations, but may be valued on the basis of prices furnished by a pricing service when the Adviser believes such prices accurately reflect the fair market value of such securities. A pricing service utilizes electronic data processing techniques based on yield spreads relating to securities with similar characteristics to determine prices for normal institutional-size trading units of debt securities without regard to sale or bid prices. If the Advisor decides that a price provided by the pricing service does not accurately reflect the fair market value of the securities, when prices are not readily available from a pricing service, or when restricted or illiquid securities are being valued, securities are valued at fair value as determined in good faith by the Advisor, in conformity with guidelines adopted by and subject to review of the Board of Trustees. Short term investments in fixed income securities with maturities of less than 60 days when acquired, or which subsequently are within 60 days of maturity, are valued by using the amortized cost method of valuation, which the Board has determined will represent fair value.


In accordance with the Trust’s good faith pricing guidelines, the Advisor is required to consider all appropriate factors relevant to the value of securities for which it has determined other pricing sources are not available or reliable as described above.  No single standard for determining fair value controls, since fair value depends upon the circumstances of each individual case.  As a general principle, the current fair value of securities being valued by the Advisor would appear to be the amount which the owner might reasonably expect to receive for them upon their current sale.  Methods which are in accord with this principle may, for example, be based on (i) a multiple of earnings; (ii) a discount from market of a similar freely traded security (including a derivative security or a basket of securities traded on other markets, exchanges or among dealers); or (iii) yield to maturity with respect to debt issues, or a combination of these and other methods.


Repurchase Agreements- In connection with transactions in repurchase agreements, it is the Company's policy that its custodian take possession of the underlying collateral securities, the fair value of which exceeds the principal amount of the repurchase transaction, including accrued interest, at all times. If the seller defaults, and the fair value of the collateral declines; realization of the collateral by the Company may be delayed or limited.


Financial Futures Contracts- The Fund invests in financial futures contracts solely for the purpose of hedging its existing portfolio securities, or securities that the Fund intends to purchase, against fluctuations in fair value caused by changes in prevailing market interest rates. Upon entering into a financial futures contract, the Fund is required to pledge to the broker an amount of cash, U.S. government securities, or other assets, equal to a certain percentage of the contract amount (initial margin deposit). Subsequent payments, known as “variation margin,” are made or received by the Fund each day, depending on the daily fluctuations in the fair value of the underlying security. The Fund recognizes a gain or loss equal to the daily variation margin. Should market conditions move unexpectedly, the Fund may not achieve the anticipated benefits of the financial futures contracts and may realize a loss. The use of futures transactions involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates, and the underlying hedged assets.


Short Sales- The Fund may sell a security it does not own in anticipation of a decline in the fair value of that security. When the Fund sells a security short, it must borrow the security sold short and deliver it to the broker-dealer through which it made the short sale. A gain, limited to the price at which the Fund sold the security short, or a loss, unlimited in size, will be recognized upon the termination of a short sale.


Option Writing- When the Fund writes an option, an amount equal to the premium received by the Fund is recorded as a liability and is subsequently adjusted to the current fair value of the option written. Premiums received from writing options that expire unexercised are treated by the Fund on the expiration date as realized gains from investments. The difference between the premium and the amount paid on effecting a closing purchase transaction, including brokerage commissions, is also treated as a realized gain, or, if the premium is less than the amount paid for the closing purchase transaction, as a realized loss. If a call option is exercised, the premium is added to the proceeds from the sale of the underlying security or currency in determining whether the Fund has realized a gain or loss. If a put option is exercised, the premium reduces the cost basis of the securities

WEGENER ADAPTIVE GROWTH FUND

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2007 (UNAUDITED)



purchased by the Fund. The Fund as writer of an option bears the market risk of an unfavorable change in the price of the security underlying the written option.



Federal Income Taxes- The Fund’s policy is to comply with the requirements of the Internal Revenue Code that are applicable to regulated investment companies and to distribute all its taxable income to its shareholders. Therefore, no federal income tax provision is required.


Use of Estimates- The preparation of financial statements in conformity with generally accepted accounting principles 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 increase and decreases in net assets from operations during the reporting period. Actual results could differ from these estimates.


Other- The Fund follows industry practice and records security transactions on the trade date. The specific identification method is used for determining gains or losses for financial statements and income tax purposes. Dividend income is recorded on the ex-dividend date and interest income is recorded on an accrual basis. Discounts and premiums are amortized over the useful lives of the respective securities. Withholding taxes on foreign dividends will be provided for in accordance with the Fund’s understanding of the applicable country’s tax rules and rates.


Distributions to Shareholders- The Fund intends to distribute to its shareholders substantially all of its net realized capital gains and net investment income, if any, at year-end. Distributions will be recorded on ex-dividend date.


Note 3. Investment Management Agreement

The Fund has a management agreement (the “Management Agreement”) with the Advisor to furnish investment advisory and management services to the Fund. The Fund will pay the Advisor a monthly fee based on the Fund’s average daily net assets at the annual rate of 1.25%.


The Advisor has contractually agreed to waive fees and/or reimburse the expenses but only to the extent necessary to maintain the Fund’s total annual operating expenses (excluding brokerage costs; borrowing costs, such as (a) interest and (b) dividends on securities sold short; taxes; and extraordinary expenses) at 1.99% of its average daily net assets through October 31, 2008. Advisory fee waivers and expense reimbursements by the Advisor are subject to repayment by the Fund for a period of three years after such fees and expenses are incurred provided that the repayments do not cause the ordinary expenses to exceed 1.99% per annum. For the six months ended December 31, 2007, the Advisor earned advisory fees of $5,707, of which all was waived and the Advisor reimbursed the Fund $18,766.  


Note 4. Related Party Transactions

Steven M. Wegener is the control person of the Advisor and also serves as a trustee and officer of the Trust.  Mr. Wegener receives benefits from the Advisor resulting from management fees paid to the Advisor by the Fund.

 

Note 5. Capital Stock

The Fund is authorized to issue an unlimited number of shares of separate series.  Paid in capital at December 31, 2007 was $876,016 representing 87,016 shares outstanding.


Transactions in capital stock were as follows:

 

Six Months Ended December 31, 2007

 

Shares

Amount

Shares Sold

3,204

$37,205

Shares issued in reinvestment of distributions

4,762

               50,998

Shares redeemed

        -

            -

Net Increase

7,966

$87,703


Note 6. Options

As of December 31, 2007, the Fund had outstanding written call options valued at $35,730.


Transactions in written call options during the six months ended December 31, 2007 were as follows:


 

Number of

 

Premiums

 

Contracts

 

Received

Options outstanding at June 30, 2007

9   

 

$           41,253

Options written

      12

 

84,640

Options exercised

        -

 

-

Options expired

        -

 

-

Options terminated in closing purchase transaction

            (11)

 

           (64,863)

Options outstanding at December 31, 2007

                10

 

$         61,030



WEGENER ADAPTIVE GROWTH FUND

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2007 (UNAUDITED)



As of December 31, 2007, the Fund held put options valued at $48,680.


Transactions in put options purchased during the six months ended December 31, 2007 were as follows:


 

Number of

 

Premiums

 

Contracts

 

Paid

Options outstanding at June 30, 2007

    9  

 

$       26,387

Options purchased

         12

 

76,786

Options expired

                0

 

0

Options Terminated

             (11)

 

   (51,693)

Options outstanding at December 31, 2007

               10

 

$   51,480


Note 7. Investment Transactions

For the six months ended December 31, 2007, purchases and sales of investment securities other than U.S. Government obligations, short-term investments and options aggregated $517,490 and $444,146, respectively.  Purchases and sales of options aggregated $174,583 and $224,287, respectively.   Purchases and sales of U.S. Government obligations aggregated $0 and $0, respectively.


Note 8. Tax Matters

For Federal income tax purposes, the cost of investments owned at December 31, 2007 was $970,675 excluding proceeds from options written totaling $61,030.


At December 31, 2007, the composition of unrealized appreciation (the excess of value over tax cost) and depreciation (the excess of tax cost over value) including options written was as follows:


Appreciation

Depreciation

Net Appreciation(Depreciation)

$139,455

($116,045)

$23,410


As of December 31, 2007, the components of distributable earnings on a tax basis were as follows:

 

                             Value

Undistributed ordinary income                                       

($1,944)

Undistributed long-term capital gain         

         32,834

Unrealized appreciation on investments and options

      23,410

 

     $   54,300

Distributions from short term capital gains in the amount of $50,998 were paid to shareholder on December 28, 2007 at a rate of 62 cents per share. No distributions were paid during the period ended June 30, 2007.


Dividends and Distributions to Shareholders- The Fund records all dividends and distributions payable to shareholders on the ex-dividend date.


Permanent book and tax differences relating to shareholder distributions may result in reclassifications to paid in capital and may affect the per-share allocation between net investment income and realized and unrealized gain/loss.  Undistributed net investment income and accumulated undistributed net realized gain/loss on investment transactions may include temporary book and tax differences which reverse in subsequent periods.  Any taxable income or gain remaining at fiscal year end is distributed in the following year.


Note 9. Control and 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 December 31, 2007, the family of Steven M. Wegener, who serves as a control person of the Advisor and as a trustee and officer of the Trust, in aggregate, owned approximately 99.72% of the Fund.


Note 10.  New Accounting Pronouncements

The Fund adopted Financial Accounting Standards Board (FASB) Interpretation No. 48 – Accounting for Uncertainty in Income Taxes, on January 1, 2007.  FASB Interpretation No. 48 requires that the tax effects of certain tax positions to be recognized.  These tax positions must meet a “more likely than not” standard based on their technical merits, have a more than 50 percent likelihood of being sustained upon examination.  At adoption, the financial statements must be adjusted to reflect only those tax positions that are more likely than not of being sustained.  Management of the Fund does not believe that any adjustments were necessary to the financial statements at adoption.


In September 2006, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements”.  The Statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (“GAAP”), and expands disclosures about fair value measurements.  The Statement establishes a fair value hierarchy that distinguishes between (1)

WEGENER ADAPTIVE GROWTH FUND

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2007 (UNAUDITED)



market participant assumptions developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) the reporting entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs).  The Statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and is to be applied prospectively as of the beginning of the fiscal year in which this Statement is initially applied. At this time, management is evaluating the implications of FAS 157, and the impact, if any, of this standard on the Fund’s financial statements has not yet been determined.








     

Wegener Adaptive Growth Fund

 

Expense Illustration

 

December 31, 2007 (Unaudited)

 
     

Expense Example

 
     

As a shareholder of the Wegener Adaptive Growth Fund, you incur ongoing costs which typically consist of  management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

     

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, July 1, 2007 through December 31, 2007.

     

Actual Expenses

 
     

The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by  $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

     

Hypothetical Example for Comparison Purposes

 
     

The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in this Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

     
 

Beginning Account Value

Ending Account Value

Expenses Paid During the Period *

 
 

July 1, 2007

December 31, 2007

July 1, 2007 to December 31, 2007

 
     

Actual

$1,000.00

$1,010.62

$10.09

 

Hypothetical (5% Annual

    

   Return before expenses)

$1,000.00

$1,015.17

$10.11

 
     

* Expenses are equal to the Fund's annualized expense ratio of 1.99%, multiplied by the average account value over  the period, multiplied by 184/365 (to reflect the one-half year period).













WEGENER ADAPTIVE GROWTH FUND

TRUSTEES AND OFFICERS

DECEMBER 31, 2007 (UNAUDITED)




TRUSTEES AND OFFICERS



The following table provides information regarding each Trustee who is not an “interested person” of the Trust, as defined in the Investment Company Act of 1940.  Each Trustee serves as a Trustee until the termination of the Trust unless the Trustee dies, resigns, retires or is removed.










Name, Address and Year of Birth

Position & Length of Time Served with the Trust

Principal Occupations During Past 5 Years and Current Directorships

Michael E. Kitces

922 Jaysmith Street

Great Falls, VA 22066

1977

Trustee since 2006

Director of Financial Planning, Pinnacle Advisory Group, Inc. since 11/2002; Client Service Manager with Medallion Financial Group, an independent planning firm, 4/2001-10/2002

Mark D. Pankin

1018 North Cleveland Street

Arlington, VA 22201

1945

Trustee since 2006

Owner/Principal of MDP Associates LLC, an investment advisory firm, since 10/1994 (reorganized advisory business from sole proprietorship to LLC in 1/2002)



The following table provides information regarding each Trustee who is an “interested person” of the Trust, as defined in the Investment Company Act of 1940, and each officer of the Trust.


Name, Address, and Year of Birth

Position and Length of Time Served with the Trust

Principal Occupations During Past 5 Years and Current Directorships

Steven M. Wegener1

5575 Vincent Gate Terrace, #1248

Alexandria, VA 22312

1977

Trustee, Treasurer, President and Chief Compliance Officer since 2006

President, Wegener, LLC (2003-present); Master's Student and Teaching Assistant for

Economics and Banking Courses, University of Virginia (2001-2003)

Niloufar Marandiz

5575 Vincent Gate Terrace, #1248

Alexandria, VA 22312

1975

Secretary since 2006

Project Manager, Vivakos (2007-present). Engineer, Mantaro Networks (2005-2006), Engineer, Isocore (2004-2005), Student, George Mason University (2001-2004)



1 Steven Michael Wegener is considered an "Interested” Trustee as defined in the Investment Company Act of 1940, as amended, because he is affiliated with the Advisor.









WEGENER ADAPTIVE GROWTH FUND

ADDITIONAL INFORMATION

DECEMBER 31, 2007 (UNAUDITED)


Statement of Additional Information

The Fund's Statement of Additional Information ("SAI") includes additional information about the trustees and is available, without charge, upon request.  You may call toll-free (800) 595-4077 to request a copy of the SAI or to make shareholder inquiries.


Portfolio Holdings


The Fund files a complete schedule of investments with the SEC for the first and third quarter of each fiscal year on Form N-Q.  The Fund’s first and third fiscal quarters end on September 30 and March 31. The Fund’s Forms N-Q are available on the SEC’s website at http://sec.gov, or they may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC (call 1-800-732-0330 for information on the operation of the Public Reference Room).  You may also obtain copies by calling the Fund at (800) 595-4077.


Proxy Voting Guidelines

The Fund’s Advisor is responsible for exercising the voting rights associated with the securities held by the Fund.  A description of the policies and procedures used by the Advisor in fulfilling this responsibility is available without charge by calling 1-800-595-4077.  It is also included in the Fund’s State of Additional Information, which is available on the Securities and Exchange Commission’s website at http://www.sec.gov.

Information regarding how the Fund voted proxies, Form N-PX, relating to portfolio securities during the most recent 12-month period ended June 30th will be available without charge, upon request, by calling our toll free number 1-800-595-4077.

Approval of Management Agreement

On July 22, 2006 the Board of Trustees, including a majority of the trustees who are not interested persons of the Trust or interest parties to the Management Agreement (the “Independent Trustees”) decided to approve the Management Agreement.  The factors considered by the Board of Trustees included: (i) the Advisor’s business and the qualifications of its personnel, (ii) the nature, extent and quality of the services provided by the Advisor to the Fund, (iii) the investment performance of the Advisor, (iv) the costs of the services to be provided and the profits to be realized by the Advisor, (v) the extent to which economies of scale will be realized as the Fund grows, and (vi) whether the fee levels reflect these economies of scales to the benefit of shareholders.

In evaluating the Advisor’s business and the qualifications of its personnel, the Trustees reviewed the Advisor’s registration statement, the experience and background of the Advisor’s portfolio manager, Mr. Steve Wegener, and the current assets under management and the nature of the accounts.  The Trustees noted that the Advisor does not have an affiliated broker-dealer and will not have a distributor, and thus the Advisor will not receive the benefits of 12b-1 fees and brokerage commissions that could be paid to an affiliate.  Based on the information provided at the meeting, the Trustees concluded that they were satisfied with the qualifications of the portfolio manager and the benefits the Advisor derives from its relationship with the Fund.

As to the nature, extent and quality of the services provided by the Advisor to the Fund, the Trustees note that the Advisor will provide investment advice and furnish or arrange to be furnished a continuous investment program for the Fund consistent with the Fund’s investment objective and policies.  The Advisor will also provide the Trust with any reports, evaluations, information or analysis as the Board of Trustees may request, and advise the officers of the Trust and the committees of the Board of Trustees in carrying out the decisions of the Board of Trustees.  The Advisor will pay the compensation and expenses of the directors, officers, employees, members or stockholders of the Advisor, and cover all advertising, promotion and other distribution expenses incurred in connection with the Fund’s shares to the extent such expenses are not permitted to be paid by the Fund under any distribution expense plan or other permissible arrangement that may be adopted in the future.  The Trustees also noted that the Advisor has adopted a compliance program to monitor and review investment decisions and prevent and detect violation of the Fund’s investment policies

WEGENER ADAPTIVE GROWTH FUND

ADDITIONAL INFORMATION

DECEMBER 31, 2007 (UNAUDITED)



and limitations and the federal securities laws.  The Trustees concluded that, based on the line of credit available to Mr. Wegener, the Advisor would be able to meet its obligations to the Fund, however it was agreed that the Advisor (or Mr. Wegener) would invest in the Fund and allow the account to serve as an assurance that the Advisor would meet the Fund’s expense limitation agreement.  The Trustees concluded that, overall, they were satisfied with the nature, extent and quality of the services to be provided to the Fund under the Management Agreement.

Although the Trustees could not consider the Fund’s investment performance as it had not yet commenced operations, they did review the investment results of a model portfolio using various hedging strategies and concluded that the they were comfortable with the portfolio manager’s ability to implement the Fund’s strategy.   To gage the costs of the services to be provided and the profits to be realized by the Advisor, the Trustees analyzed the Advisor’s estimates of its profitability and financial condition.  Noting that these estimates showed losses for the first year of operation, the Trustees concluded they were satisfied that the Advisor’s level of profitability from its relationship with the Fund would not be excessive.  The Trustees also approved the Fund’s management fee and expense ratio, in light of the agreement of the Advisor to waive fees or reimburse expenses (subject to possible recoupment) to the extent that the Fund’s total operating expenses exceed 1.99%, the quality of services the Fund expected to receive, the active management strategy of the Advisor, the level of fees paid by funds in the Peer Group and the small anticipated size of the Fund.

As to economies of scale, while the Trustees noted that the Management Agreement does not contain breakpoints that reduce the fee rate on assets above specified levels, they also recognized that given the likelihood that the Fund would be relatively small for the next few years, the lack of breakpoints was acceptable under the circumstances.   After reviewing all of the factors material to their decision, it was the consensus of the Trustees, including the Independent Trustees that approval of the Management Agreement would be in the best interests of the Fund.















Board of Trustees

Michael E. Kitces

Mark D. Pankin

Steven M. Wegener


Investment Adviser

Wegener, LLC

5575 Vincent Gate Terrace, #1248

Alexandria, VA 22312


Dividend Paying Agent,

Shareholders’ Servicing Agent,

Transfer Agent

Mutual Shareholder Services, LLC


Custodian

U.S. Bank, NA


Independent Registered Public Accounting Firm

Sanville & Company


Legal Counsel

Thompson Hine LLP



This report is provided for the general information of the shareholders of the Wegener Adaptive Growth Fund. This report is not intended for distribution to prospective investors in the Fund, unless preceded or accompanied by an effective prospectus.












Item 2. Code of Ethics  Not applicable.


Item 3. Audit Committee Financial Expert  Not applicable.


Item 4. Principal Accountant Fees and Services  Not applicable.


Item 5. Audit Committee of Listed Companies.   Not applicable.


Item 6. Schedule of Investments. Included in Report to Shareholders.


Item 7. Disclosure of Closed End fund Proxy Voting Policies/Procedures. Not applicable.


Item 8.  Portfolio Managers of Closed-End Funds.  Not applicable.


Item 9. Purchases of Equity Securities by Closed End Funds. Not applicable.


Item 10. Submission of Matters to a Vote of Security Holders. Not applicable.


Item 11. Controls and Procedures.

(a)

Disclosure Controls & Procedures.  Principal executive and financial officers have concluded that Registrant’s disclosure controls & procedures are effective based on their evaluation as of a date within 90 days of the filing date of this report.


(b)

Internal Controls. There were no significant changes in Registrant’s internal controls of in other factors that could significantly effect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.


Item 12.  Exhibits.  



(a)(1)

EX-99.CERT.  Filed herewith.


(a)(2)

Any written solicitation to purchase securities under Rule 23c-1 under the Act (17 CFR 270.23c-1) sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons.  Not applicable.


(b)

EX-99.906CERT.  Filed herewith.


SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


Wegener Investment Trust


By /s/Steven M. Wegener

     *Steven M. Wegener

     President and Treasurer



Date: March 7, 2008


*Print the name and title of each signing officer under his or her signature.