UNITED STATES
Securities and Exchange Commission
Washington, DC. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
Post-Effective Amendment No. 9 X
and
THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 9 X
Bullfinch Fund, Inc.
(Exact Name of Registrant as Specified in Charter)
2 Lantern Lane, Honeoye Falls, NY 14472
(Address of Principal Executive Offices)
716-624-1758
(Registrant's Telephone Number)
Christopher Carosa 2 Lantern Lane Honeoye Falls, NY 14472
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of this registration.
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It is proposed that this filing will become effective (check appropriate box)
[x] immediately upon filing pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)
[ ] on (date) pursuant to paragraph (a) of rule 485
Calculation of Registration Fees
(i) Aggregate sale price of securities sold during the fiscal year in
reliance on rule 24f-2 (from Item 10):
$471,785
(ii) Aggregate price of shares issued in connection with dividend reinvestment
plans (from Item 11, if applicable):
+ 0
(iii) Aggregate price of shares redeemed or repurchased during the fiscal year
(if applicable)
(246,048)
(iv) Aggregate price of shares redeemed or repurchased and previously applied
as a reduction to filing fees pursuant to rule 24e-2 (if applicable):
+ 0
(v) Net aggregate price of securities sold and issued during the fiscal year
in reliance on rule 24f-2[ line (i), plus line (ii), less line (iii), plus
line (iv)] (if applicable)
225,737
(vi) Multiplier prescribed by Section 6(b) of the Securities Act of 1933 or
other applicable law or regulation (see Instruction C.6):
x 0.000278
(vii) Fee due [line (i) or line (v) multiplied by line (vii)]:
$63
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Cross Reference Sheet
INFORMATION REQUIRED CAPTIONS IN FILING
Part A: IN A PROSPECTUS
Item 1. Cover Page Cover Page
Item 2. Synopsis Unrestricted Series Expenses
Item 3. Condensed Financial Information Condensed Financial Information
Item 4. General Description of Registrant The Fund
Item 5. Management of the Fund Management of the Fund
Item 6. Capital Stock and other Securities Capitalization
Item 7. Purchase of Securities being Offered Purchase of Shares - Reinvestments
Item 8. Redemption or Repurchase Redemption of Shares
Item 9. Legal Proceedings Litigation
Part B: STATEMENT OF ADDITIONAL INFORMATION
Item 10. Cover Page Cover Page
Item 11. Table of Contents Table of Contents
Item 12. General Information and History The Fund
Item 13. Investment Objectives and Policies Objectives and Policies
Item 14. Management of the Registrant Officers & Directors of the Fund
Item 15. Control Persons & Principal Holders Not Applicable
of Securities
Item 16. Investment Management and Other Investment Adviser
Services
Item 17. Brokerage Allocation Brokerage
Item 18. Capital Stock & Other Securities Capitalization
Item 19. Purchase, Redemption & Pricing of Purchase of Shares
Securities Being Offered
Item 19. Purchase, Redemption & Pricing of Redemption of Shares
Securities Being Offered
Item 19. Purchase, Redemption & Pricing of Pricing of Shares
Securities Being Offered
Item 20. Tax Status Tax Status
Item 21. Underwriters Not Applicable
Item 22. Calculation of Performance Data
Item 23. Financial Statements Financial Statements
Part C: OTHER INFORMATION
Item 24. Financial Statements & Exhibits Financial Statements & Exhibits
Item 25. Persons Controlled by/or under Control Persons
Common Control
Item 26. Number of Holders of Securities Number of Shareholders
Item 27. Indemnifications Indemnification
Item 28. Business & Other Connections of Activities of Investment Adviser
Adviser
Item 29 Principal Underwriters Principal Underwriter
Item 30. Location of Accounts & Records Location of Accounts & Records
Item 31. Management Services Not Applicable
Item 32. Undertakings Not Applicable
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BULLFINCH FUND, INC.
2 LANTERN LANE, HONOEYE FALLS, NY 14472
1-888-BULLFINCH (1-888-285-5346) 716-624-1758
PROSPECTUS October 15, 1999
The Bullfinch Family of Mutual Funds
The Bullfinch Fund, Inc. (the "Fund") is an open-end non-diversified manage-
ment investment company that offers separate series - the Unrestricted Series
and the Western New York Series - (individually and collectively known as the
"Series"), each a separate investment portfolio having its own investment
objective and policies. Carosa, Stanton & DePaolo Asset Management, LLC (the
"Adviser"), serves the Bullfinch Fund as investment manager for each Series.
This Prospectus, which should be held for future reference, is designed to set
forth concisely the information that you should know before you invest. A
"Statement of Additional Information" containing more information about the Fund
has been filed with the Securities and Exchange Commission. Such Statement is
dated October 15, 1999 and has been incorporated by reference into the
Prospectus. A copy of the Statement may be obtained without charge, by writing
to the Fund or by calling the telephone number shown above.
Unrestricted Series
The investment objective of the Unrestricted Series is to seek conservative
long term growth in capital. The Adviser seeks to achieve this objective by
using an asset mix consisting primarily of exchange listed and over-the-counter
common stocks as well as U.S. government securities maturing within five years.
Criteria used by the Adviser will be based on the Business Economics, Manage-
ment Quality, Financial Condition and Stock Price of each business. The Adviser
seeks to be conservative by investing in securities which it believes possess a
lower potential for downside price volatility.
Western New York Series
The Western New York Series seeks capital appreciation
through investment in the common stock of companies with an important economic
presence in the Greater Western New York Region. The Adviser seeks to achieve
this objective by using an asset mix consisting primarily of exchange listed
and over-the-counter common stocks as well as U.S. government securities matur-
ing within five years. Criteria used by the Adviser will be based on the Bus-
iness Economics, Management Quality, Financial Condition and Stock Price of
each business. The Adviser may also consider industry liquidity, and market
capitalization and the need to invest in a variety of different industries.
Series Share Purchase
Capital shares of a Series may only be purchased directly from the Fund at
net asset value of the Series as next determined after receipt of order. The
Board of Directors has established $2,500 as the minimum initial purchase
($500 for IRAs) and $250 for subsequent purchases ($50 for IRAs).
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE
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BULLFINCH FUND SERIES' EXPENSES
The Bullfinch Fund is 100% no-load. You do not pay any sales charges when
you invest in any Series within the Bullfinch Family of Funds.
The Bullfinch Family of Funds does not charge a fee for purchases, exchanges,
or redemptions. All series are 100% no-load. The following illustrates all
expenses and fees that a shareholder of any Series will incur. The expenses
and fees set forth below are for the 1999 fiscal year.
Shareholder Transaction Expenses: Unrestricted Series Western New York Series
Sales Load Imposed on Purchases None None
Sales Load Imposed on Reinvested Dividends None None
Redemption Fees None None
Exchange Fees None None
Annual Operating Expenses (as a percentage of net assets):
Unrestricted Series Western New York Series
Management Fees 1.10%* 0.00%*
12b-1 Fees None None
Other Expenses 0.90%* 2.00%*
Total Operating Expenses 2.00% 2.00%
* To cap the ratio of each Series at 2.00%, the Manager, per its contract,
reimbursed the Unrestricted Series a total of $1,479 and the Western New York
Series a total of $5,924. Had the manager not reimbursed each Series, the
Expense ratios would have been 2.30% and 5.40% respectively.
You would pay the following expenses on a $1,000 investment assuming:
a) 5% annual rate of return and b) redemption at the end of each time period.
Example: Unrestricted Series Western New York Series
Example 1 Year 3 Years 1 Year 3 Years
$21 $66 $21 $66
The purpose of the table above is to assist the investor in understanding the
various costs and expenses associated with investing in any Series. For a more
complete description of the various costs and expenses illustrated above,
please refer to the Management section of this Prospectus.
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the Series'
financial performance for the past 2 years (including that portion of the year
ending June 30, 1998 when each Series was in operation). Certain information
results for a single Series share. The total returns in the table represent
the rate that an investor would have earned [or lost] on an investment in each
Series (assuming reinvestment of all dividends & distributions). This
information has been audited by our independent auditor, whose report, along
with the Fund's financial statements, are included in the SAI or annual
report, which is available upon request.
Unrestricted Western New York
Series Series
For the years ending: 6/30/99 6/30/98* 6/30/99 6/30/98*
Net asset value, beginning of period* $ 10.99 11.00 $ 10.45 10.12
Income from investment operations
Net investment income (loss) $ (0.01) 0.00 $ (0.05) 0.02
Net gains or (losses) on securities
both realized and unrealized $ 0.40 0.04 $ (1.15) 0.32
--------------- ----------------
Total from investment operations $ 11.38 11.04 $ 9.25 10.46
Less distributions
Dividends (from net investment income) $ (0.00) (0.05) $ (0.00) (0.01)
Distributions (from capital gains) $ (0.03) (0.00) $ (0.00) (0.00)
---------------- ----------------
Net asset value, end of period $ 11.35 10.99 $ 9.25 10.45
================ ================
Total return 3.53% 0.39%** (11.48)% 6.74%**
Net assets, end of period $914,048 750,819 $242,204 176,230
Ratio of expenses to average net assets 2.00% 2.00% 2.00% 2.00%
Ratio of investment income -
net to average assets (0.20)% 0.00%** (0.40)% 0.04%**
Portfolio turnover rate 40.7% 0.0% 13.9% 0.0%
Average commission per share $ 0.04 0.57 $ 0.09 0.20
* The Inception Date for the Unrestricted Series was July 24,1997 and the
Inception Date for the Western New York Series was December 30, 1997.
** Annualized From Inception for each Series.
THE EXAMPLE ABOVE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN.
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THE FUND
The Fund is an open-end management investment company incorporated under
the laws of the State of Maryland on January 29, 1997. The Fund offers
separate series of units of beneficial interest ("shares"). This Pros-
pectus relates to the Unrestricted Series and the Western New York Series.
The Fund's business office is in Honeoye Falls, NY: mail may be addressed
to 2 Lantern Lane, Honeoye Falls, NY 14472.
OBJECTIVE, POLICES AND RISK FACTORS
UNRESTRICTED SERIES
Objective & Policies: The investment objective of the Unrestricted Series is
to seek conservative long term growth in capital. The Unrestricted Series in-
vests primarily in exchange listed and over-the-counter common stocks, and U.S.
government obligations maturing within five years. As such, the Unrestricted
Series has no current intention to invest in illiquid securities. To the extent
feasible, the Adviser will endeavor to emphasize fundamental corporate con-
siderations related to the prospects of the issuer and its industry. Depending
on its view of their relative attractiveness in light of market and economic
conditions, the Adviser will vary the proportions invested among common stocks
(see Equity Selection Criteria below) and U.S. government securities maturing
within five years. Assets in the Unrestricted Series may be invested in money
market funds for temporary investment.
Risk Factors: Risks associated with the Unrestricted Series' performance will
be those due to broad market declines and the decline in the price of partic-
ular companies held in the Unrestricted Series' portfolio. Because the Unre-
stricted Series' investments fluctuate in value, the Unrestricted Series'
shares will fluctuate in value. The Adviser seeks to reduce the risk of nega-
tive returns while seeking to obtain long term capital growth when it believes
valuations and market conditions are favorable. It must be realized, as is true
of almost all securities, there can be no assurance that the Unrestricted
Series will attain its objective.
The Unrestricted Series' investment objective is not fundamental and may be
changed by the Board of Directors without shareholder approval; however, it is
the Board of Directors' policy to notify shareholders prior to any material
change in the Unrestricted Series' objective.
Equity Selection Criteria: Criteria used by the Adviser to classify equities
includes balance sheet and income statement data, historical pricing valuations
and the stock's current dividend policy.
Portfolio Turnover Policy: The Unrestricted Series does not purchase securi-
ties for short term trading in the ordinary course of operations. Accordingly,
it is expected that the annual turnover rate will not exceed 50%, wherein
turnover is computed by dividing the lesser of the Unrestricted Series' total
purchases or sales of securities within the period by the average monthly
portfolio value of the Unrestricted Series' during such period. There may be
times when management deems it advisable to substantially alter the composition
of the portfolio, in which event, the portfolio turnover rate might substant-
ially exceed 50%; this would only result from special circumstances and not
from the Unrestricted Series' normal operations.
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Non-diversification Policy: The Unrestricted Series is classified as being
non-diversified which means that it may invest a relatively high percentage
of its assets in the securities of a limited number of issuers. The Unre-
stricted Series, therefore, may be more susceptible than a diversified fund to
any single economic, political, or regulatory occurrence. The policy of the
Unrestricted Series, in the intention of achieving its objective as stated
above, is, therefore, one of selective investments rather than diversification.
The Unrestricted Series seeks only the required diversification necessary to
maintain its federal non-taxable status under Sub-Chapter M of the Internal
Revenue Code (see the Tax Status Section of this prospectus).
WESTERN NEW YORK SERIES
Objective & Policies: The investment objective of the Western New York Series
is to seek capital appreciation through investment in the common stock of
companies with an important economic presence in the Greater Western New York
Region of New York State. Under normal conditions, the Adviser invests at least
65% of the Fund's total assets in securities of companies with an important
economic presence in the Greater Western New York Region of New York (see
Equity Selection Criteria below). The Western New York Series invests primarily
in exchange listed and over-the-counter common stocks, and U.S. government
obligations maturing within five years. These U.S. government obligations will
typically be U.S. Treasury Bills and U.S. Treasury Notes which are supported by
the full faith and credit of the United States. As such, the Western New York
Series has no current intention to invest in illiquid securities. To the extent
feasible, the Adviser will endeavor to emphasize fundamental corporate
considerations related to the prospects of the issuer and its industry.
Depending on its view of their relative attractiveness in light of market and
economic conditions, the Adviser will vary the proportions invested among
common stocks (see Equity Selection Criteria below) and U.S. government
securities maturing within five years. Assets in the Western New York Series
may be invested in money market funds for temporary investment.
Risk Factors: Risks associated with the Western New York Series' performance
will be those due to broad market declines and the decline in the price of
particular companies held in the Western New York Series' portfolio. Changes
and developments in the economic environment of Western New York State may
have a disproportionate effect on the Western New York Series' portfolio.
Because the Western New York Series' investments fluctuate in value, the
Western New York Series' shares will fluctuate in value. The Adviser seeks to
reduce the risk of negative returns while seeking to obtain capital apprecia-
tion when it believes valuations and market conditions are favorable. It
must be realized, as is true of almost all securities, there can be no assur-
ance that the Western New York Series will attain its objective.
The Western New York Series' investment objective is not fundamental and may be
changed by the Board of Directors without shareholder approval; however, it is
the Board of Directors' policy to notify shareholders prior to any material
change in the Western New York Series' objective.
Equity Selection Criteria: Criteria used by the Adviser to classify equities
includes balance sheet and income statement data, historical pricing valuations
and the stock's current dividend policy. The Adviser may also consider industry
diversification, liquidity, and market capitalization. To be eligible for inclu-
sion in the Western New York Series' portfolio, a stock currently must meet the
following criteria: the stock must be issued either by a company that employs at
least fifty persons in the Greater Western New York Region, or issued by a Comp-
any which has a capital investment (including annual payroll) in the Greater
Western New York Region of greater than $1,000,000, or by a Company that main-
tains its corporate headquarters in the Greater Western New York Region. The
Greater Western New York Region includes the following New York State Counties:
Erie, Niagara, Chautauqua, Cattaraugus, Orleans, Genesee, Wyoming, Allegany,
Monroe, Livingston, Steuben, Wayne, Ontario, Yates
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Portfolio Turnover Policy: The Western New York Series does not purchase sec-
urities for short term trading in the ordinary course of operations. Accord-
ingly, it is expected that the annual turnover rate will not exceed 50%. There
may be times when management deems it advisable to substantially alter the
composition of the portfolio, in which event, the portfolio turnover rate
might substantially exceed 50%; this would only result from special circum-
stances and not from the Western New York Series' normal operations.
Non-diversification Policy: The Western New York Series is classified as being
non-diversified which means that it may invest a relatively high percentage
of its assets in the securities of a limited number of issuers. The Western
New York Series, therefore, may be more susceptible than a diversified fund to
any single economic, political, or regulatory occurrence. The policy of the
Western New York Series, in the intention of achieving its objective as stated
above, is, therefore, one of selective investments rather than diversification.
The Western New York Series seeks only the required diversification necessary
to maintain its federal non-taxable status under Sub-Chapter M of the Internal
Revenue Code (see the Tax Status Section of this prospectus).
TAX STATUS
Under provisions of Sub-Chapter M of the Internal Revenue Code of 1986 as amend-
ed, the Fund, by paying out substantially all of its investment income and rea-
lized capital gains, and by satisfying certain other requirements, will be
relieved of federal income tax on the amounts distributed to shareholders.
Distribution of any net long term capital gains realized by the Series in 1997
will be taxable to the shareholder as long term capital gains, regardless of the
length of time Series shares have been held by the investor. All income realized
by the Series, including short term capital gains, will be taxable to the share-
holder as ordinary income. Dividends from net income will be made annually or
more frequently at the discretion of the Fund's Board of Directors. Dividends
received shortly after purchase of shares by an investor will have the effect of
reducing the per share net asset value of his shares by the amount of such divi-
dends or distributions and, although in effect a return of capital, are subject
to federal income taxes.
The Fund is required by federal law to withhold 31% of reportable payments
(which may include dividends, capital gains, distributions and redemptions) paid
to shareholders who have not complied with IRS regulations. In order to avoid
this withholding requirement, you must certify on a W-9 tax form supplied by
the Fund that your Social Security or Taxpayer Identification Number provided is
correct and that you are not currently subject to back-up withholding, or that
you are exempt from back-up withholding.
INVESTMENT RESTRICTIONS
By-laws of the Fund provide the following fundamental investment restrictions;
The Fund may not, except by the approval of a majority of the outstanding
shares; i.e. a) 67% or more of the voting securities present at a duly called
meeting, if the holders of more than 50% of the outstanding voting securities
are present or represented by proxy, or b) of more than 50% of the outstanding
voting securities, whichever is less:
(a) Act as underwriter for securities of other issuers except insofar as the
Fund may be deemed an underwriter in selling its own portfolio securities.
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(b) Borrow money or purchase securities on margin, but may obtain such short
term credit as may be necessary for clearance of purchases and sales of se-
curities for temporary or emergency purposes in an amount not exceeding 5%
of the value of its total assets.
(c) Sell securities short.
(d) Invest in securities of other investment companies (other than money market
funds for temporary investment) except as part of a merger, consolidation,
or purchase of assets approved by the Fund's shareholders or by purchases
with no more than 10% of the Fund's assets in the open market involving
only customary brokers commissions.
(e) Invest 25% or more of its total assets at the time of purchase in any one
industry (other than U.S. Government Securities).
(f) Make investments in commodities, commodity contracts or real estate although
the Fund may purchase and sell securities of companies which deal in real
estate or interests therein.
(g) Make loans. The purchase of a portion of a readily marketable issue of pub-
licly distributed bonds, debentures or other debt securities will not be
considered the making of a loan.
(h) Acquire more than 10% of the securities of any class of another issuer,
(other than securities issued or guaranteed by the United States Govern-
ment, its agencies or its instrumentalities) treating all preferred secur-
ities of an issuer as a single class and all debt securities as a single
class, or acquire more than 10% of the voting securities of another issuer.
(i) Invest in companies for the purpose of acquiring control.
(j) The Fund may not purchase or retain securities of any issuer if those offi-
cers and directors of the Fund or its Investment Adviser owning individual-
ly more than 1/2 of 1% of any class of security or collectively own more
than 5% of such class of securities of such issuer.
(k) Pledge, mortgage or hypothecate any of its assets.
(l) Invest in securities which may be subject to registration under the Securi-
ties Act of 1933 prior to sale to the public or which are not at the time of
purchase readily salable.
(m) Invest more than 5% of the total Fund assets, taken at market value at the
time of purchase, in securities of companies with less than three years'
continuous operation, including the operations of any predecessor.
(n) Issue senior securities
INVESTMENT ADVISER
Carosa, Stanton & DePaolo Asset Management, LLC is a New York Limited Liability
Company that acts as an Investment Adviser to the Fund. Carosa, Stanton &
DePaolo Asset Management, LLC, formerly known as Carosa & Stanton Asset Manage-
ment, LLC, began accepting private portfolio management clients in February of
1997 and currently manages ten portfolios and has more than four million
dollars under management as of October 1999. Christopher Carosa and Gordon R.
Stanton established Carosa & Stanton Asset Management, LLC in late 1996 as the
principal members & officers and are, respectively, are the President and Vice-
President of the Fund. Anthony R. DePaolo joined the firm in September 1997 as
a principal member and officer and the name of the firm was formally changed
at that time. Mr. DePaolo is a Vice-President of the Fund. In July 1998,
Bradford L. McAdam joined the firm and is a Vice-President of the Fund.
Mr. Carosa has direct responsibility for day to day management of the Series'
portfolios. He has a B.S. (Intensive) in Physics and Astronomy from Yale Uni-
versity and an MBA in Finance and Marketing from the University of Rochester's
William E. Simon Graduate School of Business. He began his career in 1982 with
Manning & Napier Advisors, Inc. When he left Manning & Napier in the summer of
1996 to begin writing finance books, he was a Managing Director and member of
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the Funds Group as well as Executive Vice President and Senior Trust Officer
for Exeter Trust Company, an affiliate of Manning & Napier. At the time of his
departure, Mr. Carosa was responsible for custody and trust operations for more
than 700 accounts with assets approaching $1 billion and he was a member of the
Trust and Investment Committee.
Mr. Stanton has a B.A. in Architecture from Yale University and an MBA in
Finance, Economics and Management for the Stern School of Business. Mr.
Stanton's most recent experience has been as owner of a company which produced
laser light shows. He also has extensive experience working for non-profit
organizations. Mr. Carosa & Mr. Stanton have been the members of the management
committee of a private investment partnership formed in July of 1987. In order
to permit other investors to participate in the investment objective of this
partnership, in early 1997 the partners voted to convert that partnership into
a public no-load mutual fund and formalize Mr. Carosa's and Mr. Stanton's duties
by selecting their firm to be investment adviser.
Mr. DePaolo has a B.S. in Political Science from the State University of New
York and a AAS in Sociology from Erie Community College. Mr. DePaolo's most
recent experience has been as General Manager and Director of Client Services
at Howe & Rusling, a registered investment adviser. Previously, Mr. DePaolo
served as Director of Business Development at the Burke Group, a employee
benefits/pension consultant and as Senior Vice President of IMPCO, a direct
marketing firm.
Mr. McAdam holds an MBA in Public Accounting and Management Systemns as well
as a B.A. in Economics from Cornell University. He is also a Certified Public
Accountant and a Chartered Financial Analyst. Mr. McAdams most recent exper-
Ience has been as Director of Research for Steven Charles, a registered invest-
Ment adviser. Before that, he served as a Senior Securities Analyst for Manning
& Napier Advisors, Inc.
The Board of Directors include former partners of the private investment part-
nership. The Partnership and the Unrestricted Series have a substantially
similar or the same investment objective. On September 24, 1997 the Board of
Directors of Fund reviewed an Investment Management Agreement with Carosa,
Stanton & DePaolo Asset Management, LLC, which was unanimously approved by the
Board of Directors. This Agreement will continue on a year to year basis, as
amended, provided that approval is voted at least annually by specific approval
of the Board of Directors of the Fund or by vote of the holders of a majority
of the outstanding voting securities of the Series, but, in either event, it
must also be approved by a majority of the directors of the Fund who are
neither parties to the agreement nor interested persons as defined in the
Investment Company Act of 1940 at a meeting called for the purpose of voting
on such approval. Under the Agreement, Carosa, Stanton & DePaolo Asset Manage-
ment, LLC will furnish investment advice to the Fund on the basis of a
continuous review of the portfolio and recommend when and to what extent
securities should be purchased or disposed. The Agreement may be terminated at
any time, without the payment of any penalty, by the Board of Directors or by
vote of a majority of the outstanding voting securities of the Series on at
least 60 days' written notice to Carosa, Stanton & DePaolo Asset Management,
LLC. In the event of its assignment, the Agreement will terminate automatically.
Ultimate decisions as to the investment objective and policies are made by the
Fund's directors. For these services the Fund has agreed to pay to the Adviser
a fee of 1.25% per year on the first million dollars of net assets of each Ser-
ies and 1.0% per year on the remaining portion of net assets of each Series.
All fees are computed on the average daily closing net asset value of each Ser-
ies and are payable monthly in arrears. The Adviser will forgo sufficient fees
to hold the total expenses of each Series to less than 2.0% of the first $10
million in assets and 1.5% of the next $20 million. There is a risk factor
associated with the Adviser's lack of experience in managing mutual funds.
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Pursuant to its contract with the Fund, the Investment Adviser is required to
render research, statistical, and Advisory services to the Fund; to make specif-
ic recommendations based on each Series' investment requirements; and to pay the
salaries of those of the Fund's employees who may be officers or directors or
employees of the Investment Adviser. The Fund is responsible for the operat-
ing expenses of each Series, including: (i) interest and taxes; (ii) brokerage
commissions; (iii) insurance premiums; (iv) compensation and expenses of its
Directors other than those affiliated with the Adviser; (v) legal and audit ex-
penses; (vi) fees and expenses of each Series' Custodian, and Accounting Servic-
es Agent, if obtained for any Series from an entity other than the Adviser;
(vii) expenses incidental to the issuance of its shares, including iss-
uance on the payment of, or reinvestment of, dividends and capital gain distrib-
utions; (viii) fees and expenses incidental to the registration under federal
or state securities laws of the Fund and each Series or its shares;(ix) expens-
es of preparing, printing and mailing reports and notices and proxy material to
shareholders of any Series; (x) all other expenses incidental to holding meet-
ings of the shareholders; (xi) dues or assessments of or contributions to the
Investment Company Institute or any successor; and (xii) such non-recurring ex-
penses as may arise, including litigation affecting the Fund and the legal
obligations with respect to which the Fund may have to indemnify its Offic-
ers and Directors.
The Adviser may use its own resources to engage in activities that promote
the sale of the Series, including payments to third-parties who provide share-
holder support servicing and distribution assistance. Investors may be charged
a fee if they effect transactions through a broker or agent.
CAPITALIZATION
Description of Common Stock: The authorized capitalization of the Fund consists
of 10,000,000 shares of common stock of $0.01 par value per share. Each share
has equal dividend, distribution and liquidation rights. There are no conver-
sion or pre-emptive rights applicable to any shares of the Fund. All shares
issued are fully paid and non-accessible.
Voting Rights: Each holder of common stock has one vote for each share held
and fractional shares will have an equivalent fractional vote. Voting rights
are non-cumulative.
PURCHASE OF SHARES -REINVESTMENTS
The offering price of the shares offered by the Fund for any Series is at the
net asset value per share next determined after receipt of the purchase order
by the Fund and is computed in the manner described under the caption "PRICING
OF SHARES" in this Prospectus. The Series reserves the right at its sole dis-
cretion to terminate the offering of its shares made by this Prospectus at any
time and to reject purchase applications when, in the judgment of management
such termination or rejection is in the best interests of the Fund.
Payment may be made by wire. A purchase
order will be effective as of the day the check is received by the Fund
if the Fund receives the check before the close of regular trading on
the New York Stock Exchange, normally 4:00 p.m., Eastern time. If payment is
made by wire, the purchase order will be effective the day payment is
received by the Series' custodian. The purchase price of shares of any
Series is the net asset value determined on the day the purchase order
is effective.
The shares of any Series may be purchased in exchange for securities to
be included in that Series, subject to the Adviser's determination that these
securities are acceptable. Securities accepted in an exchange will be valued
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<PAGE>
using the same valuation method the Series uses to value portfolio securities.
All accrued interest and purchase or other rights which are reflected in the
market price of accepted securities at the time of valuation become the prop-
erty of the Series and must be delivered by the shareholder to the Series upon
receipt from the issuer. Shares issued in exchanged for securities will be
priced at the net asset value calculated on the day of exchange.
The day of exchange will be the day the securities are received by the Fund if
the Fund receives the securities before the close of regular trading on the New
York Stock Exchange, normally 4:00 p.m., Eastern time. If the transfer is made
by electronic delivery, the day of exchange will be the day the securities are
received by the Series' custodian.
The Adviser will not accept securities in exchange for shares of the Series
unless (1) such securities would normally qualify for purchase by the Series
at the time of the exchange; (2) the shareholder represents and agrees that
all securities offered to the Series are not subject to any restrictions upon
their sale by the Series under the Securities Act of 1933, or otherwise; and
(3) the Series is able to value the securities in a manner consistent with the
valuation method the Series uses to value portfolio securities.
Initial Investments: Initial purchase of shares of the Series may be made on-
ly by application submitted to the Fund. For the convenience of investors, a
Share Purchase Application form is provided with this Prospectus. The minimum
initial purchase of shares is $2,500 ($500 for IRAs). Less may be accepted
under special circumstances.
Subsequent Purchases: Subsequent purchases may be made by check or readily
available funds and may be made in writing (including an electronic trans-
mission) or by telephone. Shareholders wishing to make subsequent purchases
by telephone must first elect the privilege by writing to the Fund. The
minimum subsequent purchase is $250 ($50 for IRAs), but less may be accepted
under special circumstances.
Exchanges Between Series: To purchase shares by exchanging from another Series,
please call the Bullfinch Fund shareholder services at 1-888-BULLFINCH (1-888-
285-5346) for instructions. Your exchange will be based on the closing net
asset value per share next determined after your purchase order is effective.
There is no charge for exchanges between Series. Generally, an exchange between
Series is a taxable event. State securities laws may restrict your ability to
make exchanges. The Fund reserves the right to temporarily or permanently term-
inate the exchange privilege for any shareholder who makes an excessive number
of exchanges between Series. Anything greater than 3 exchanges within six months
will be considered excessive. You will receive advance written notice that the
Fund intends to limit your use of the exchange privilege. The Fund also re-
serves the right to terminate or modify the exchange privilege at any time upon
30 days advance written notice or to refuse any exchange request.
Re-Investments: The Fund will automatically retain and reinvest dividends
and capital gains distributions in fractional shares and use same for the pur-
chase of additional shares for the shareholder at net asset value as of the
close of business on the distribution date. A shareholder may at any time by
letter or forms supplied by the Fund direct the Fund to pay dividend and/
or capital gains distributions, if any, to such shareholder in cash.
Fractional Shares: Fractional shares may be purchased. The Fund will
maintain an account for each shareholder of shares for which no certificates
have been issued.
RETIREMENT PLANS
Individual Retirement Account: Persons who earn compensation and are not active
participants (and who do not have a spouse who is an active participant) in an
employee maintained retirement plan may establish Individual Retirement Accounts
(IRA) using Fund shares. Annual contributions, limited to the lesser of $2,000
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<PAGE>
or 100% of compensation, are tax deductible from gross income. This IRA deduc-
tion is also retained for individual taxpayers and married couples with adjusted
gross incomes within certain specified limits. All individuals may make nonde-
ductible IRA contributions to separate accounts to the extent that they are not
eligible for a deductible contribution.
Earnings under the IRA are reinvested and are tax-deferred until withdrawals be-
gin. The maximum annual contribution may be increased to $2,250 if you have a
spouse who earns no compensation during the taxable year. A separate and inde-
pendent Spousal IRA must be maintained.
You may begin to make non-penalty withdrawals as early as age 59 1/2 or as late
as age 70 1/2. In the event of death or disability, withdrawals may be made be-
fore age 59 1/2 without penalty.
A Disclosure Statement is required by U.S. Treasury Regulations. This Statement
describes the general provisions of the IRA and is forwarded to all prospective
IRA accounts. There is no charge to open and maintain a Bullfinch Fund IRA.
This policy may be changed by the Board of Directors if they deem it to be
in the best interests of all shareholders. All IRA's may be revoked within 7
days of their establishment with no penalty.
PRICING OF SHARES
The net asset value of the Series' shares is determined as of the close of busi-
ness of the New York Stock Exchange (the "Exchange") on each business day of
which that Exchange is open. The Exchange annually announces the days on which
it will not be open for trading; the most recent announcement indicates that
it will not be open on: New Year's Day, Martin Luther King's Birthday,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. The price is determined by dividing the val-
ue of its securities, plus any cash and other assets less all liabilities, ex-
cluding capital surplus, by the number of shares outstanding.
Securities traded on national securities exchanges or the NASDAQ National Market
System are valued at the closing prices of the securities on these exchanges and
securities traded on over-the-counter markets are valued daily at the closing
bid prices.
Short term paper (debt obligations that mature in less than 60 days) is valued
at amortized cost which approximates market value. Other assets are valued at
fair value as determined in good faith by the Board of Directors.
REDEMPTION OF SHARES
The Fund will redeem all or any part of the shares of any shareholder who
sends a letter requesting redemption to the Fund at its address as it
appears on this Prospectus (if certificates have not been issued) or certifi-
cates with respect to shares for which certificates have been issued. In either
case, proper endorsements guaranteed either by a national bank or a member firm
of the New York Stock Exchange will be required. The Fund will waive the sig-
nature guarantee requirement should the shareholder personally deliver the
letter requesting redemption to the Fund at its address as it appears on this
Prospectus and provides two valid forms of identification including a valid
driver's license or a major credit card. The redemption price is the net asset
value per share next determined after the order is received by the Fund for
redemption of shares. The proceeds received by the shareholder may be more or
less than his cost of such shares, depending upon the net asset value per
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<PAGE>
share at the time of redemption and the difference should be treated by the
shareholder as a capital gain or loss for federal income tax purposes.
Payment by the Fund will ordinarily be made within three business days after
tender of a valid redemption request. The Fund may suspend the right of
redemption or postpone the date of payment for more than seven days if: The New
York Stock Exchange is closed for other than customary weekend or holiday clos-
ings, or when trading on the New York Stock Exchange is restricted as determined
by the Securities and Exchange Commission or when the Securities and Exchange
Commission has determined that an emergency exists, making disposal of fund
securities or valuation of net assets not reasonably practicable. The Fund
intends to make payments in cash, however, the Fund reserves the right to make
payments in kind.
BROKERAGE
The Investment Management Agreement states that in connection with its duties to
arrange for the purchase and the sale of securities held in the portfolio of
the Series by placing purchase and sale orders for the Series, the Adviser shall
select such broker-dealers ("brokers") as shall, in the Adviser's judgment,
implement the policy of the Series to achieve "best execution", i.e., prompt
and efficient execution at the most favorable securities price. In making such
selection, the Adviser is authorized in the Agreement to consider the
reliability, integrity and financial condition of the broker, the size and
difficulty in executing the order and the value of the expected contribution of
the broker to the investment performance of the Series on a continuing basis.
The Adviser is also authorized to consider whether a broker provides brokerage
and/or research services to the Series and/or other accounts of the Adviser.
Information or services may include economic studies, industry studies, stat-
istical analyses, corporate reports, or other forms of assistance to the Series
or its Adviser. No effort will be made to determine the value of these
services or the amount they may reduce expenses of the Adviser or the Series.
The Board of Directors will evaluate and review the reasonableness of
brokerage commissions paid on a monthly basis initially and after the first
year of operation at least semiannually.
MANAGEMENT OF THE FUND
The Fund does not expect to hold annual meetings of shareholders but special
meetings of shareholders may be held under certain circumstances. Shareholders
of the Fund retain the right, under certain circumstances, to request that a
meeting of shareholders be held for the purpose of considering the removal of a
Director from office, and if such a request is made, the Fund will assist with
shareholder communications in connection with the meeting. The overall business
and affairs of the Fund is managed by the Fund's Board of Directors. The Board
approves all significant agreements between the Fund and persons or companies
furnishing services to the Fund, including the Fund's agreements with its
Investment Adviser and Custodian. The day-to-day operations of the Fund are
delegated to the Fund's officers and to Carosa, Stanton & DePaolo Asset
Management, LLC (the "Adviser"), 2 Lantern Lane, Honeoye Falls, NY 14472.
Christopher Carosa, President of the Fund and President of the Fund's Invest-
ment Adviser, will be primarily responsible for the day-to-day management of
the Series' portfolios.
The Board meets regularly four times a year to review Fund progress and status.
The Board may convene a special meeting under certain circumstances. In addi-
tion, the Board may ask a non-interested Director to perform an independent
audit as requested by the Board.
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<PAGE>
CUSTODIAN & TRANSFER AGENT
The Fund acts as its own transfer agent. Pursuant to an agreements unanimously
approved by the Board of Directors on February 1, 1997 and on September 24,
1997, the custodian for the Unrestricted Series and the Western New York Series
is Charles Schwab & Co., Inc., The Schwab Building, 101 Montgomery Building,
San Francisco, CA 94104. Charles Schwab & Co., Inc. may, at its own expense,
employ a sub-custodian, provided that Charles Schwab & Co., Inc. shall remain
liable for all its duties as custodian.
IRA TRUSTEE
Delaware Charter Guarantee & Trust Co.
P.O. Box 8963
Wilmington, DE 19899
REPORTS TO SHAREHOLDERS
The Fund sends all shareholders annual reports containing audited financial
statements and other periodic reports, at least semiannually, containing unau-
dited financial statements.
AUDITORS
Bonadio & Co., LLP, Certified Public Accountants, Rochester, NY have been
selected as the independent auditor of the Series. Bonadio & Co., LLP has no
direct or indirect financial interest in the Fund or the Adviser.
ADDITIONAL INFORMATION
This Prospectus omits certain information contained in the registration state-
ment on file with the Securities & Exchange Commission. The registration state-
ment may be inspected without charge at the principal office of the Commission
in Washington, D.C. and copies of all or part thereof may be obtained upon pay-
ment of the fee prescribed by the Commission. Shareholders may also direct in-
quiries to the Fund by phone or at the address given on pg 1 of this Prospectus.
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<PAGE>
SHARE PURCHASE APPLICATION
A) Please fill out one of the following four types of accounts:
1) Individual Accounts ****
______________________ __ ____________________ ______________________
First Name MI Last Name Social Security Number
2) Joint Accounts ****
______________________ __ ____________________ ______________________
First Name MI Last Name Social Security Number
______________________ __ _____________________ _______________________
First Name MI Last Name Social Security Number
3) Custodial Accounts ****
______________________ __ ____________________
Custodian's First Name MI Custodian's Last Name
______________________ __ ____________________ ______________________
Minor's First Name MI Minor's Last Name Minor's
Social Security Number
4) All Other Accounts ****
___________________________________________ __________________________
Name of account. Tax Identification Number
___________________________________________
(Use this second line if you need it)
B) Biographical and other information about the new account:
Full Address:
Number & Street __________________________________________________
City__________________________ St____ Zip_______________________
Citizen of____________________ Home Phone_____________ Bus Phone_____________
Dividend Direction (check one): Reinvest all distributions____ Pay in Cash____
Signature of Owner, Trustee or Custodian: __________________________________
Signature of Joint Owner (if joint account): __________________________________
Please make check payable to: BULLFINCH FUND, INC.
2 Lantern Lane, Honeoye Falls, NY 14472
Amount of Investment Attached:
Unrestricted Series $______________ (Minimum initial purchase $2,500)
Western New York Series $______________ (Minimum initial purchase $2,500)
All applications are accepted in New York and under New York laws.
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<PAGE>
FORM W-9
(March 1994)
Department of Treasury
Internal Revenue Service
PAYER'S REQUEST FOR TAXPAYER
IDENTIFICATION NUMBER
Name as shown on account (if joint account, give name corresponding to TIN)
_________________________________________________
Street Address
_________________________________________________
City, State & Zip Code
_________________________________________________
Part 1.- Taxpayer Identification Number Part 2. - Backup Withholding
Social Security Number ______________________ Check if you are NOT subject
to backup withholding under
or the provisions of section
3406(a) (1) (C) of the In-
Employer ID Number ______________________ ternal Revenue Code ________
Certification - Under the penalty of perjury, I certify that the information
provided on this form is true, correct and complete.
Signature ___________________________________ Date _______________________
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<PAGE>
INVESTMENT ADVISER PROSPECTUS
CAROSA, STANTON & DEPAOLO ASSET MANAGEMENT, LLC BULLFINCH FUND, INC.
8 East Street, Suite 200 4675 Schurr Road 2 Lantern Lane
Honeoye Falls, NY 14472 Clarence, NY 14031 Honeoye Falls, NY 14472
716-234-2080 716-759-7001 1-888-BULLFINCH
(1-888-285-5346)
October 15, 1999
TABLE OF CONTENTS
UNRESTRICTED SERIES
Bullfinch Fund Series' Expenses .. 2 The Series seeks conservative, long
Condensed Financial Information .. 2 term growth of capital. The Adviser
The Fund ......................... 3 seeks to achieve this objective by
Objective, Policies & Risk Factors using an asset mix consisting primar-
Objective and Policies ......... 3 ily of exchange listed and over-the-
Risk Factors ................... 3 counter common stocks as well as U.S.
Portfolio Turnover Policy ...... 3 Government securities maturing within
Nondiversification Policy ...... 3 five years. The Adviser seeks to be
Tax Status ....................... 3 conservative by investing in securi-
Investment Restrictions .......... 4 ties which it believes possess a
Investment Adviser ............... 5 lower potential for downside price
Capitalization volatility.
Description of Common Stock .... 6
Voting Rights .................. 6
Purchase of Shares - Reinvestment. 6 WESTERN NEW YORK SERIES
Initial Investments ............ 7 The Series seeks capital apprecia-
Subsequent Purchases ........... 7 tion through investment in the
Reinvestments .................. 7 common stock of companies with an
Whole Shares ................... 7 important economic presence in the
Retirement Plans Greater Western New York Region. The
IRA ............................ 7 Adviser seeks to achieve this object-
Pricing of Shares ................ 8 ive by using an asset mix consisting
Redemption of Shares ............. 8 primarily of exchange listed and over-
Brokerage ........................ 8 the- counter common stocks as well as
Management of the Fund ........... 9 U.S. Government securities maturing
Custodian & Transfer Agent ....... 9 within five years.
Reports to Shareholders .......... 9
Auditors ......................... 9
Additional Information ........... 9
Share Purchase Application ...... 10
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<PAGE>
BULLFINCH FUND, INC.
2 Lantern Lane
Honeoye Falls, NY 14472
716-624-1758
Part B
STATEMENT OF ADDITIONAL INFORMATION
October 15, 1999
This Statement of Additional Information is not a prospectus, but should be
read in conjunction with the Fund's current prospectus dated October 15, 1998.
To obtain the Prospectus, please write the Fund or call the either of the
telephone number that are shown above and on the prior page.
TABLE OF CONTENTS
Objective, Policies & Risk Factors
Objective and Policies ..............2
Trading Costs .........................2
Tax Status ............................2
Officers and Directors of the Fund ....4
Calculation of Performance Data .......5
Auditor's Report ......................5
Financial Reports .....................6
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<PAGE>
OBJECTIVE, POLICES AND RISK FACTORS
Objective & Policies: From time to time any Series may hold warrants, preferred
stock or convertible debt it may have received as a result of a corporate action
related to one of its then current holdings. No Series has any intention of
exceeding 5% in any of these types of securities.
TRADING COSTS
Carosa, Stanton & DePaolo seeks brokers from which it feels it can achieve the
best price and execution for each individual transaction for all its clients.
Should more than one broker be capable of providing best price and execution,
other factors may be considered in the selection of the broker. These factors
can include commission, research and operational expediency. There may be an
increased cost on OTC trades if the adviser chooses to execute such trades on
any agency basis (i.e., not to trade through a market-maker in any particular
security). These costs include the mark-ups by the market-maker on the OTC
securities, which are in addition to the commissions paid to the agent broker-
dealer. A market-maker may mark-up (down) a security for which it makes a
market, which is a cost that will be incurred in addition to the agency
commissions assessed by the executing broker.
TAX STATUS
Under provisions of Sub-Chapter M of the Internal Revenue Code of 1986 as amend-
ed, the Series, by paying out substantially all of its investment income and
realized capital gains, and by satisfying certain other requirements has been
and intends to continue to be relieved of federal income tax on the amounts di-
stributed to shareholders.
Distribution of any net long term capital gains realized by the Series in 1997
will be taxable to the shareholder as long term capital gains, regardless of the
length of time Series shares have been held by the investor. All income realized
by the Series, including short term capital gains, will be taxable to the share-
holder as ordinary income. Dividends from net income will be made annually or
more frequently at the discretion of the Fund's Board of Directors. Dividends
received shortly after purchase of shares by an investor will have the effect of
reducing the per share net asset value of his shares by the amount of such divi-
dends or distributions and, although in effect a return of capital, are subject
to federal income taxes.
The Fund is required by federal law to withhold 31% of reportable payments
(which may include dividends, capital gains, distributions and redemptions) paid
to shareholders who have not complied with IRS regulations. In order to avoid
this withholding requirement, you must certify on a W-9 tax form supplied by
the Fund that your Social Security or Taxpayer Identification Number provided is
correct and that you are not currently subject to back-up withholding, or that
you are exempt from back-up withholding.
FEDERAL TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS
The following is only a summary of certain additional tax considerations
generally affecting the Series and its shareholders that are not described in
the Series' Prospectus. No attempt is made to present a detailed explanation
of the tax treatment of the Series or its shareholders, and the discussion here
and in the Series' Prospectus is not intended as a substitute for careful tax
planning.
The following discussion of federal income tax consequences is based on
the Internal Revenue Code of 1986, as amended (the "Code") and the regulations
issued thereunder as in effect on the date of this Statement of Additional
Information. New legislation, as well as administrative changes or court
decisions, may significantly change the conclusions expressed herein, and may
have a retroactive effect with respect to the transactions contemplated herein.
Qualification as Regulated Investment Company
As a regulated investment company ("RIC") under Subchapter M of the Code,
the Series is exempt from federal income tax on its net investment income and
capital gains which it distributes to shareholders, provided that it
distributes at least 90% of its investment company taxable income (generally,
net investment income and the excess of net short-term capital gain over net
long-term capital loss) for the year (the "Distribution Requirement") and
satisfies certain other requirements of the Code that are described below.
Distributions of investment company taxable income made during the taxable
year will satisfy the Distribution Requirement.
- 2 -
<PAGE>
In addition to satisfaction of the Distribution Requirement each Series
must derive at least 90% of its gross income from dividends, interest, certain
payments with respect to securities loans and gains from the sale or other
disposition of stocks, securities or foreign currencies, or from other income
(including but not limited to gains from options, futures or forward
contracts) derived with respect to its business of investing in such stock,
securities or currencies ("Qualifying Income") and derive less than 30% of its
gross income from the sale or other disposition of stocks, securities and
certain other investments held for less than three months including foreign
currencies (or options, futures or forward contracts on foreign currencies)
but only if such currencies (or options, futures or forward contracts) are not
directly related to the Series' principal business of investing in stock or
securities or options and futures with respect to stocks or securities (the
so-called "Short-Short Gain Rule"). Moreover, at the close of each quarter
of its taxable year, at least 50% of the value of the Series' assets must
consist of cash and cash items, Government securities, securities of other
RICs, and securities of other issuers (as to which the Series has not
invested more than 5% of the value of its total assets in any one issuer and
as to which the Series does not hold more than 10% of the outstanding voting
securities of any one issuer), and no more than 25% of the value of its total
assets may be invested in the securities of any one issuer (other than
Government securities and securities of other RICs), or in two or more issuers
which the Series controls and which are engaged in the same, similar or related
trades or businesses (the "Asset Diversification Test").
- 3 -
<PAGE>
OFFICERS AND DIRECTORS OF THE FUND
Officers and Directors of the Fund, together with their addresses, principal
occupations during the past five years are:
Name and Address Age Position Principal Occupation Past Five Years
Christopher Carosa* 39 President, President
2 Lantern Lane Treasurer, Carosa, Stanton & DePaolo
Honeoye Falls, NY Chairman of the Honeoye Falls, NY
the Board/
Director Managing Director
Manning & Napier Advisers, Inc.
Executive VP & Senior Trust Officer
Exeter Trust Company, Rochester NY
Gordon R. Stanton* 40 Vice-President, Vice-President
230 E. 73rd St. #4C Director Carosa, Stanton & DePaolo
New York, NY Honeoye Falls, NY
President, Laser Reflections, Inc.
(Producer of Laser Light Shows)
New York, NY
Anthony R. DePaolo 50 Vice-President Vice-President and Managing Director
4675 Schurr Road Carosa, Stanton & DePaolo
Clarence, NY Honeoye Falls, NY
General Manager, Howe & Rusling
Rochester, NY
Dir. of Bus. Development, Burke Group
Honeoye Falls, NY
Senior Vice President, IMCO
Rochester, NY
Bradford L. McAdam 42 Vice-President Vice-President, Director of Research
Carosa, Stanton & DePaolo
Honeoye Falls, NY
Vice-President, Director of Research
Steven Charles
Rochester, NY
Senior Securities Analyst
Manning & Napier Advisors, Inc.
Rochester, NY
William E.J. Martin 39 Director Construction Project Manager/Estimator
4410 Woodlawn Ave N ECI General Contractors, Inc.
Seattle, WA Seattle, WA
Thomas Midney 39 Director Director of Production Planning
13 Burr Road The Goss & DeLeeuw Machine Company
Bloomfield, CT Kensington, CT
Michael J. Morris 39 Director Director of Pricing
334 Robbins Ave United HealthCare
Newington, CT Hartford, CT
Betsy K. Carosa 39 Secretary Secretary
2 Lantern Lane (Wife of the Bullfinch Fund, Inc.
Honeoye Falls, NY President) Honeoye Falls, NY
- 4 -
<PAGE>
COMPENSATION TABLE
Aggregate Pension or Estimated Total
Name, Position Compens Retirement Annual Compensation
ation From Benefits Benefits Upon From Registrant
Registrant Accrued As Retirement And Fund Complex
Part of Fund Paid to
Expenses Directors
Christopher $ 0 N/A N/A $ 0
Carosa*, Director
Gordon R. $ 0 N/A N/A $ 0
Stanton*, Director
William E.J. $ 400 N/A N/A $ 400
Martin, Director
Thomas $ 400 N/A N/A $ 400
Midney, Director
Michael J. $ 400 N/A N/A $ 400
Morris, Director
* Director of the Fund who would be considered "interested persons" as defined
by the Investment Company Act of 1940.
A total of $0 has been paid in 1999 to officers and directors of the Fund to co-
mpensate for travel expenses associated with their Fund duties. Beginning in its
fiscal year 1998, the Fund will compensate non-interested directors at a rate of
$100 per directors meeting attended. The Fund does not compensate its officers
and directors that are affiliated with the Investment Adviser except as they may
benefit through payment of the Advisory fee (see pg. 5 of the Prospectus).
MAJOR SHAREHOLDERS: As of October 15, 1999 shareholders of record who own 5% or
more of the outstanding shares of each Series are as follows:
Unrestricted Series
Name Address Percentage ownership
C. Carosa Honeoye Falls, New York 7.55%
G. Stanton New York City, New York 8.77%
Ceiling Pro of WNY Hamburg, New York 15.32%
L. Pusateri P/S East Amherst, New York 7.41%
I. Burke Rochester, New York 19.21%
B. McAdam Churchville, New York 6.47%
J. Hartney Clarence, New York 5.40%
Western New York Series
Name Address Percentage ownership
J. Hartney Clarence, New York 57.10%
A. DePaolo Clarence, New York 8.26%
L. Pusateri P/S East Amherst, New York 14.09%
CALCULATION OF PERFORMANCE DATA
YIELD AND TOTAL RETURN
From time-to-time the Series may advertise its total return. Both
yield and total return figures are based on historical earnings and are not
intended to indicate future performance. The "total return" of a Series
refers to the average annual compounded rates of return over one-, five-, and
ten-year periods or for the life of the Series (as stated in the
advertisement) that would equate an initial amount invested at the beginning
of a stated period to the ending redeemable value of the investment, assuming
the reinvestment of all dividend and capital gains distributions.
The "30-day yield" of a Series is calculated by dividing the net investment
income per share earned during a 30-day period by the net asset value per
share on the last day of the period. Net investment income includes interest
and all recurring and nonrecurring charges that have been applied to all
shareholder accounts. The yield calculation assumes that net investment
income earned over 30 days is compounded monthly for six months and then
annualized. Methods used to calculate advertised yields are standardized for
all stock and bond mutual funds. However, these methods differ from the
accounting methods used by a Series to maintain its books and records, and so
the advertised 30-day yield may not fully reflect the income paid to your own
account or the yield reported in a Series' reports to shareholders.
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<PAGE>
BONADIO & CO, LLP
Certified Public Accountants
171 Sully's Trail
Pittsford, NY 14534
716-381-1000
Fax 716-381-3131
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Directors of Bullfinch Fund, Inc.:
We have audited the accompanying statement of assets and liabilities of the
Unrestricted Series (a series within Bullfinch Fund, Inc.), including the
schedule of investments in securities, as of June 30, 1999, and the
related statements of operations, changes in net assets and the financial
highlights and related ratios/supplemental data for the
years ended June 30, 1999 and 1998 and for the period from inception
(February 1, 1997) to June 30, 1997. These financial statements and financial
highlights and related ratios/supplemental data are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these statements and the financial highlights and related
ratios/supplemental data based on our audits.
We conducted our audits in accordance with generally accepted auditing stand-
ards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights and related ratios/supplemental data are free of material mis-
statement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures include-
ed confirmation of securities owned as of June 30, 1999, 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 and related
ratios/supplemental data referred to above present
fairly, in all material respects, the financial position of the Unrestricted
Series (a series within Bullfinch Fund, Inc.) as of June 30, 1999, and
the results of its operations, the change in its net assets and the financial
highlights and related ratios/supplemental data for the
years ended June 30, 1999 and 1998 and for the period from inception
(February 1, 1997) to June 30, 1997, in conformity with generally accepted
accounting principles.
BONADIO & CO., LLP
Pittsford, New York
August 4, 1999
-6-
<PAGE>
UNRESTRICTED SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1999
ASSETS
1999
Investments in securities, at fair value,
identified cost $640,542 $ 693,219
Cash 82,986
Receivable for Capital Stock 138,088
Accrued interest and dividends 790
Prepaid expenses 1,256
Due from Investment Adviser 1,479
Organization expenses, net of accumulated
amortization of $1,838 1,500
--------
Total assets $ 919,318
========
LIABILITIES
Accounts payable 5,270
--------
NET ASSETS
Net assets (equivalent to $11.35
based on 80,537.371 shares of stock outstanding) $ 914,048
=========
COMPOSITION OF NET ASSETS
Shares of common stock $ 886,159
Accumulated net investment loss (24,788)
Net unrealized appreciation on investments 52,677
---------
Net assets at June 30, 1999 $ 914,048
==========
The accompanying notes are an integral part of these statements.
-7-
<PAGE>
UNRESTRICTED SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
SCHEDULE OF INVESTMENTS IN SECURITIES
JUNE 30, 1999
Historical
Common Stocks - 100% Shares Cost Value
Computer software - 19.2%
Oracle Corporation 3,000 $ 46,411 $ 111,375
Network Associates, Inc. 1,500 46,921 22,031
--------- --------
93,332 133,406
Utilities - 8.3%
Empire District Electric Co. 1,250 21,665 32,578
Hawaiian Electric 700 24,648 24,850
--------- --------
46,313 57,428
Medical Products and Supplies - 7.5%
Dentsply Intl, Inc. 1,350 30,400 38,981
Mentor Corporation 700 17,963 13,038
--------- --------
48,363 52,019
Retail - 6.5%
Dollar General Corporation 1,562 26,308 45,298
Cosmetics - 5.8%
Helen of Troy, Ltd. 2,250 34,440 40,359
Electrical Equipment - 5.3%
Baldor Electric Company 1,850 36,962 36,769
Shoes and Leather - 5.3%
Wolverine World Wide 2,600 44,582 36,400
Banking and Finance - 5.1%
Fiserv, Inc. 1,125 22,369 35,226
Mining - 4.7%
Brush Wellman, Inc. 1,800 41,478 32,625
Steel - 4.7%
A.M. Castle & Co. 1,900 36,530 32,300
Tobacco Products - 4.6%
Phillip Morris 800 28,043 32,150
Instruments - 4.6%
Coherent, Inc. 1,700 34,250 31,663
Leisure and Recreational - 4.3%
International Game Technology 1,600 29,749 29,600
Computers - Hardware - 3.9%
3Com Corp. 1,000 22,900 26,687
Electronics Components - 3.3%
Park Electrochemical Corp. 800 20,771 23,000
Real Estate and Related - 3.2%
First American Financial 1,250 21,869 22,344
Industrial Services - 2.4%
Olsten Corporation 2,650 44,142 16,728
Foods and Beverages - 1.1%
Pepsico Incorporated 200 6,975 7,738
Entertainment - 0.2%
Walt Disney Holding Co. 48 1,166 1,479
--------- ---------
TOTAL COMMON STOCKS $ 640,542 $ 693,219
--------- ---------
$ 640,542 $ 693,219
========= =========
The accompanying notes are an integral part of these statements.
-8-
<PAGE>
UNRESTRICTED SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED JUNE 30, 1999 AND 1998
AND FOR THE PERIOD FROM INCEPTION (FEBRUARY 1, 1997) TO JUNE 30, 1997
1999 1998 1997
INVESTMENT INCOME:
Dividends $ 10,720 $ 8,559 $ 1,634
Interest 2,990 5,301 -
-------- --------- ---------
13,710 13,860 1,634
EXPENSES:
Management Fees 8,102 6,599 589
Reimbursement of Management Fees (1,479) (3,303) -
Custody Fee - - 35
Legal and Professional 3,750 3,000 -
Directors' Fee 600 900 -
Amortization 581 814 444
Fidelity Bond 520 689 -
Taxes 502 637 -
Registration Fees 1,246 676 -
Bank Service Charges 917 404 -
Dues and Subscriptions 144 110 228
--------------------------------
14,883 10,526 1,296
--------------------------------
Investment income(loss) - net (1,173) 3,334 338
--------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain (loss) from
securities transactions (21,740) 18 514
Unrealized appreciation (depreciation)
during the period 48,330 (3,930) 8,277
--------------------------------
Net gain (loss) on investments 26,590 (3,912) 8,791
--------------------------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 25,417 $ (578) $ 9,129
================================
The accompanying notes are an integral part of these statements.
UNRESTRICTED SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED JUNE 30, 1999 AND 1998
AND FOR THE PERIOD FROM INCEPTION (FEBRUARY 1, 1997) TO JUNE 30, 1997
1999 1998 1997
INCREASE IN NET ASSETS FROM OPERATIONS:
Investment income (loss) - net $(1,173) $ 3,334 $ 338
Net realized gains (loss) from
securities transactions (21,740) 18 514
Net change in unrealized
appreciation of investments 48,330 (3,930) 8,277
-------------------------------
Increase (decrease) in net assets
from operations 25,417 (578) 9,129
CAPITAL SHARE TRANSACTIONS
Sales (33,858.650, 73,972.543
and 11,247.184 shares) 363,607 832,796 112,471
Redemptions (21,814.254
and 17,275.449 shares) (225,795) (202,999) -
-------------------------------
Total capital share transactions 137,812 629,797 112,471
-------------------------------
Increase in net assets 163,229 629,219 121,600
NET ASSETS:
Beginning of period 750,819 121,600 -
-------------------------------
End of period $ 914,048 $ 750,819 $ 121,600
===============================
The accompanying notes are an integral part of these statements.
-9-
<PAGE>
UNRESTRICTED SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
(1) The Organization
The Unrestricted Series (the "Series") is a series of the Bullfinch
Fund, Inc. (the "Fund"), which was organized as a corporation in Mary-
land on January 29, 1997, and commenced operations on February 1, 1997.
The Fund had no operations prior to February 1, 1997 other than matters
relating to its organization and registration as an open-end, non-divers-
ified management investment company under the Investment Company Act of
1940, and its registration of securities under the Securities Act of
1933. On February 1, 1997, the Series sold 11,247.184 shares of common
stock ("initial shares") to its initial, joint tenant investors.
The investment objective of the Series is to seek conservative long-term
growth in capital. The Adviser seeks to achieve this objective by using
an asset mix consisting primarily of exchange listed securities and over-
the-counter common stocks as well as U.S. Government securities maturing
within five years.
(2) Summary of Significant Accounting Policies
Cash -
Cash consists of amounts deposited in money market accounts and is not
federally insured. The Series has not experienced any losses on such
amounts and believes it is not exposed to any significant credit risk on
cash.
Security Valuation -
The Series records its investments at fair value.
Securities traded on national securities exchanges or the NASDAQ National
Market System are valued daily at the closing prices of the securities on
those exchanges and securities traded on over-the-counter markets are
valued daily at the closing bid prices. Short-term and money market sec-
urities are valued at amortized cost which approximates market value.
Federal Income Taxes -
For federal income tax purposes, the Series expects to continue to
qualify as a regulated investment company under the provisions of the
Internal Revenue Code by distributing substantially all of its taxable
net income (both ordinary and capital gains) to its shareholders and
complying with other requirements for regulated investment companies.
Therefore, no provision for income taxes is required.
-10-
<PAGE>
Organization Expenses -
Organization expenses are being amortized over a 60-month period.
The Series' initial shareholders have agreed that if any of the initial
shares are redeemed during the first 60 months of the Series' operations
by any holder thereof, the proceeds of the redemption will be reduced by
the pro rata share of the unamortized organization expenses as of the date
of the redemption. The pro rata share by which the redemption proceeds
shall be reduced shall be derived by dividing the number of original
shares redeemed by the total number of original shares outstanding at the
time of the redemption.
Distributions to Shareholders -
The Series has distributed its net investment income and net
realized capital gains to its shareholders on December 29, 1998,
June 30, 1998 and June 30, 1997 in the form of stock dividends equal
to 172.798, 297.096 and 78.803 shares of stock.
Other -
The Series follows industry practice and records security transactions on
the trade date. The specific identification method is used for determin-
ing gains or losses for financial statement and income tax purposes.
Dividend income is recorded on the ex-dividend date and interest income
is recorded on the accrual basis.
Estimates -
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from those estimates.
(3) Investments
For the year ended June 30, 1999, the Series purchased $317,227 of
common stock. During the same period, the Series sold $100,392 of
U.S. Government obligations and $195,720 of common stock.
For the year ended June 30, 1998, the Series purchased $50,455 of U.S.
Government obligations and $485,826 of common stock. During the same per-
iod, the Series sold $29 of common stock.
For the period ended June 30, 1997, the Series purchased $50,377 of U.S.
Government obligations and $5,541 of common stock. During the same per-
iod, the Series sold $7,663 of common stock and $256 of short-term in-
vestments.
At June 30, 1999, the gross unrealized appreciation for all securities
totaled $134,100 and the gross unrealized depreciation for all securities
totaled $81,423, or a net unrealized appreciation of $52,677. The aggre-
gate cost of securities for federal income tax purposes at June 30,
1999 was $640,542.
At June 30, 1998, the gross unrealized appreciation for all securities
totaled $62,102 and the gross unrealized depreciation for all securities
totaled $57,755, or a net unrealized appreciation of $4,347. The aggre-
gate cost of securities for federal income tax purposes at June 30,
1998 was $641,167.
At June 30, 1997, the gross unrealized appreciation for all securities
totaled $9,862 and the gross unrealized depreciation for all securities
totaled $1,585, or a net unrealized appreciation of $8,277. The aggre-
gate cost of securities for federal income tax purposes at June 30,
1997 was $104,898.
(4) Investment Advisory Agreement
Carosa, Stanton & DePaolo Asset Management, LLC serves as investment
advisor to the Fund pursuant to an investment advisory agreement which
was approved by the Fund's board of directors. Carosa, Stanton & DePaolo
Asset Management, LLC is a registered Investment adviser under the
Investment Advisers Act of 1940. The Investment advisory agreement
provides that Carosa, Stanton & DePaolo Asset Management, LLC,
subject to the supervision and approval of the Fund's board of directors,
is responsible for the day-to-day management of the Series' portfolio
which include selecting the investments and handling its business affairs.
-11-
<PAGE>
As compensation for its services to the Fund, the investment advisor re-
ceives monthly compensation at an annual rate of 1.25% on the first $1
million of daily average net assets and 1% on that portion of the daily
average net assets in excess of $1 million. These fees will be reduced
by any sub-transfer agent fees incurred by the Fund.
Carosa, Stanton & DePaolo Asset Management, LLC has agreed to forego
sufficient investment advisory fees to limit total expenses of the Fund
to 2% of the first $10 million in average assets and 1.5% of the next
$20 million in average assets.
(5) Capital Share Transactions
The Fund has authorized 10,000,000 shares of common stock at $0.01 par
value per share. Each share has equal dividend, distribution and liquid-
ation rights. Transactions in capital stock of the Series were as follows:
Shares Amount
Shares sold during 1997 11,247.184 $ 112,471
Shares issued in 6/30/97 stock dividend 78.803 -
---------- -----------
11,325.987 112,471
---------- -----------
Shares sold during 1998 73,972.543 832,796
Shares redeemed during 1998 (17,275.449) (202,999)
Shares issued in 6/30/98 stock dividend 297.096 -
---------- -----------
56,994.190 629,797
---------- -----------
Shares sold during 1999 33,858.650 363,607
Shares redeemed during 1999 (21,814.254) (225,795)
Shares issued in 12/29/98 stock dividend 172.798 -
---------- -----------
12,217.194 137,812
---------- -----------
80,537.371 $ 880,080
========== ===========
UNRESTRICTED SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
FINANCIAL HIGHLIGHTS AND RELATED RATIOS/
SUPPLEMENTAL DATA FOR A SHARE OUTSTANDING
FOR THE YEARS ENDED JUNE 30, 1999 AND 1998
AND FOR THE PERIOD FROM INCEPTION (FEBRUARY 1, 1997) TO JUNE 30, 1997
1999 1998 1997
NET ASSET VALUE, beginning of period $ 10.99 $ 10.74 $ 10.00
------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (0.01) - .03
Net gain on securities both realized
and unrealized .40 .30 .78
------------------------------
.39 .30 .81
------------------------------
STOCK DIVIDEND (.03) (.05) (.07)
------------------------------
NET ASSET VALUE, end of period $ 11.35 $ 10.99 $ 10.74
==============================
NET ASSETS, end of period $ 914,048 $ 750,819 $ 121,600
==============================
Actual Actual Actual *
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.0% 2.0% 1.1% *
RATIO OF NET INVESTMENT INCOME TO
AVERAGE NET ASSETS (0.2%) 0.6% .3% *
PORTFOLIO TURNOVER RATE 40.7% - 6.9% *
* The ratios presented were calculated using operating data for the five
month period from inception (February 1, 1997) to June 30, 1997.
The accompanying notes are an integral part of these statements.
-12-
<PAGE>
BONADIO & CO, LLP
Certified Public Accountants
171 Sully's Trail
Pittsford, NY 14534
716-381-1000
Fax 716-381-3131
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Directors of Bullfinch Fund, Inc.:
We have audited the accompanying statement of assets and liabilities of the
Western New York Series (a series within Bullfinch Fund, Inc.), including the
schedule of investments in securities, as of June 30, 1999, and the
related statements of operations, changes in net assets and the financial
highlights and related ratios/supplemental data for the year
ended June 30, 1999 and for the period from inception (September 29, 1997) to
June 30, 1998. These financial statements and financial highlights and related
ratios/supplemental data are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
statements and the financial highlights and related ratios/supplemental data
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights and related ratios/supplemental data 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 June 30, 1999, 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, the financial highlights and related
ratios/supplemental data referred to above present
fairly, in all material respects, the financial position of the Western New
York Series (a series within Bullfinch Fund, Inc.) as of June 30, 1999, and
the results of its operations, the change in its net assets and the financial
highlights and related ratios/supplemental data for the
year ended June 30, 1999 and for the period from inception (September 29, 1997)
to June 30, 1998, in conformity with generally accepted accounting principles.
BONADIO & CO., LLP
Pittsford, New York
August 4, 1999
-13-
<PAGE>
WESTERN NEW YORK SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1999
ASSETS
1999
Investments in securities, at fair value,
identified cost $186,431 $ 171,006
Cash 67,547
Accrued interest and dividends 154
Prepaid expenses 757
Due from Investment Adviser 5,924
Organization expenses, net of accumulated
amortization of $1,100 2,239
--------
Total assets 247,627
--------
LIABILITIES
Accounts payable 5,423
--------
NET ASSETS
Net assets (equivalent to $9.25 per share
based on 26,186.386 shares of stock outstanding) $ 242,204
=========
COMPOSITION OF NET ASSETS
Shares of common stock $ 261,074
Accumulated net investment loss (3,445)
Net unrealized depreciation on investments (15,425)
----------
Net assets at June 30, 1999 $ 242,204
==========
The accompanying notes are an integral part of these statements.
-14-
<PAGE>
WESTERN NEW YORK SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
SCHEDULE OF INVESTMENTS IN SECURITIES
JUNE 30, 1999
Historical
Common Stocks - 100% Shares Cost Value
Electrical Equipment - 16.8%
PSC, Inc. 1,950 $ 18,587 $ 19,134
ACME Electric Corporation 1,750 9,171 9,516
--------- --------
27,758 28,650
Computer Hardware - 10.2%
Performance Technologies, Inc. 600 8,232 12,075
3Com Corp 200 4,600 5,338
--------- --------
12,832 17,413
Steel - 8.1%
Bethlehem Steel Corporation 1,000 7,894 7,687
Gibraltar Steel Corporation 250 4,820 6,187
--------- --------
12,714 13,874
Real Estate and Related - 7.2%
Sovran Self Storage 250 6,891 6,734
Home Properties of New York 200 5,623 5,525
--------- --------
12,514 12,259
Electronic Components - 6.1%
Astronics Corporation 605 5,021 6,050
Paxar Corporation 500 4,192 4,438
--------- --------
9,213 10,488
Computer Software - 5.0%
Comptek Research, Inc. 700 4,971 5,643
Network Associates, Inc. 200 5,800 2,938
--------- --------
10,771 8,581
Industrial Materials - 5.0%
American Precision Industries 550 9,776 5,913
Servotronics, Inc. 600 5,624 2,550
--------- --------
15,400 8,463
Railroads - 4.8%
Genessee & Wyoming, Inc. 800 9,941 8,250
Tobacco Products - 4.7%
Phillip Morris, Inc. 200 7,004 8,038
Metal Fabrication and Hardware - 4.3%
Graham Corp. 800 6,076 7,400
Computer Services - 4.0%
Computer Task Group, Inc. 400 10,608 6,800
Manufacturing - 3.7%
Mark IV Industries, Inc. 300 6,462 6,338
Medical Services - 3.7%
Rural/Metro Corporation 650 11,157 6,256
Computer Distributors - 3.0%
Ingram Micro, Inc. 200 6,681 5,150
Commercial Services - 2.8%
Paychex, Inc. 150 4,413 4,781
Environment Services - 2.7%
Sevenson Environmental Srvs, Inc 400 5,071 4,650
Furniture - 2.4%
Bush Industries, Inc. 250 6,263 4,156
Apparel - 2.1%
Hartmarx Corporation 850 6,665 3,559
Industrial Services - 2.0%
American Locker Group, Inc. 400 2,544 3,500
Machinery - 1.4%
Columbus McKinnon Corporation 100 2,344 2,400
--------- ---------
TOTAL COMMON STOCK $ 186,431 $ 171,006
========= =========
-15-
<PAGE>
The accompanying notes are an integral part of these statements.
WESTERN NEW YORK SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 1999 AND
FOR THE PERIOD FROM INCEPTION (SEPTEMBER 29, 1997)
TO JUNE 30, 1998
1999 1998
INVESTMENT INCOME:
Dividends $ 2,904 $ 1,705
Interest - 1,121
--------------------
2,904 2,826
--------------------
EXPENSES:
Management Fees 2,042 1,214
Reimbursement of Management Fees (5,924) (3,016)
Legal and Professional 3,750 3,000
Directors' Fee 600 300
Amortization 776 324
Fidelity Bond 458 230
Taxes 382 238
Registration Fees 607 341
Bank Service Charges 767 -
Dues and Subscriptions 71 -
--------------------
3,529 2,631
--------------------
Investment income (loss) - net (625) 195
--------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain (loss) from
securities transactions (2,829) -
Unrealized appreciation (depreciation)
during the period (18,496) 3,071
--------------------
Net gain (loss) on investments (21,325) 3,071
--------------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $(21,950) $ 3,266
====================
The accompanying notes are an integral part of these statements.
WESTERN NEW YORK SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED JUNE 30, 1999 AND
FOR THE PERIOD FROM INCEPTION (SEPTEMBER 29, 1997)
TO JUNE 30, 1998
1999 1998
DECREASE IN NET ASSETS FROM OPERATIONS:
Investment income (loss) - net $ (625) $ 195
Net realized gain (loss) from
securities transactions (2,829) -
Net change in unrealized
appreciation (depreciation) of investments (18,496) 3,071
--------------------
Increase (decrease) in net assets from operations (21,950) 3,266
CAPITAL SHARE TRANSACTIONS
Sales (11,777.098 and 16,850.33 shares) 108,178 172,964
Redemptions (2,458.779 and 0 shares) (20,254) -
--------------------
Total capital share transactions 87,924 172,964
--------------------
Increase in net assets 65,974 176,230
NET ASSETS:
Beginning of period 176,230 -
--------------------
End of period $242,204 $176,230
====================
The accompanying notes are an integral part of these statements.
-16-
<PAGE>
WESTERN NEW YORK SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
(1) The Organization
The Western New York Series (the "Series") is a series of the Bullfinch
Fund, Inc. (the "Fund") which was organized as a corporation in Mary-
land on January 29, 1997 as an open-end, non-diversified management
investment company under the Investment Company Act of
1940. On September 29, 1997, the Fund sold 10,500 shares of the
Series to its initial investor for $105,000.
The investment objective of the Series is to seek capital appreciation
through the investment in common stock of companies with an important
economic presence in the Greater Western New York Region. The Adviser
seeks to achieve this objective by using an asset mix consisting primarily
of exchange listed securities and over-the-counter common stocks as well
as U.S. Government securities maturing within five years.
(2) Summary of Significant Accounting Policies
Cash -
Cash consists of amounts deposited in money market accounts and is not
federally insured. The Fund has not experienced any losses on such
amounts and believes it is not exposed to any significant credit risk on
cash.
Security Valuation -
The Series records its investments at fair value.
Securities traded on national securities exchanges or the NASDAQ National
Market System are valued daily at the closing prices of the securities on
those exchanges and securities traded on over-the-counter markets are
valued daily at the closing bid prices. Short-term and money market sec-
urities are valued at amortized cost which approximates market value.
Federal Income Taxes -
For federal income tax purposes, the Series expects to continue to
qualify as a regulated investment company under the provisions of the
Internal Revenue Code by distributing substantially all of its taxable
net income (both ordinary and capital gains) to its shareholders and
complying with other requirements for regulated investment companies.
Therefore, no provision for income taxes is required.
-17-
<PAGE>
Organization Expenses -
Organization expenses are being amortized over a 60-month period.
The Series' initial shareholder has agreed that if any of the initial
shares are redeemed during the first 60 months of the Series' operations
by any holder thereof, the proceeds of the redemption will be reduced by
the pro rata share of the unamortized organization expenses as of the date
of the redemption. The pro rata share by which the redemption proceeds
shall be reduced shall be derived by dividing the number of original
shares redeemed by the total number of original shares outstanding at the
time of the redemption.
Distributions to Shareholders -
The Series has distributed its net investment income and net realized
capital gains to its shareholders on June 30, 1998 in the form of a stock
dividend equal to 17.737 shares of stock.
Other -
The Series follows industry practice and records security transactions on
the trade date. The specific identification method is used for determin-
ing gains or losses for financial statement and income tax purposes.
Dividend income is recorded on the ex-dividend date and interest income
is recorded on the accrual basis.
Estimates -
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from those estimates.
(3) Investments
For the period ended June 30, 1999, the Series purchased $77,365 of
common stock. During the same period, the Series sold $24,463 of
common stock.
For the period ended June 30, 1998, the Series purchased $98,879 of U.S.
Government obligations and $136,357 of common stock.
At June 30, 1999, the gross unrealized appreciation for all securities
totaled $12,525 and the gross unrealized depreciation for all securities
totaled $27,950, or a net unrealized depreciation of $15,425. The aggre-
gate cost of securities for federal income tax purposes at June 30,
1999 was $186,431.
At June 30, 1998, the gross unrealized appreciation for all securities
totaled $16,011 and the gross unrealized depreciation for all securities
totaled $12,940, or a net unrealized appreciation of $3,071. The aggre-
gate cost of securities for federal income tax purposes at June 30,
1998 was $136,357.
(4) Investment Advisory Agreement
Carosa, Stanton & DePaolo Asset Management, LLC serves as investment
advisor to the Fund pursuant to an investment advisory agreement which
was approved by the Fund's board of directors. Carosa, Stanton &
DePaolo Asset Management, LLC is a registered Investment adviser under
the Investment Advisers Act of 1940. The Investment advisory agreement
provides that Carosa, Stanton & DePaolo Asset Management, LLC,
subject to the supervision and approval of the Fund's board of directors,
is responsible for the day-to-day management of the Fund's portfolio
which include selecting investments and handling its business affairs.
-18-
<PAGE>
As compensation for its services to the Fund, the investment advisor re-
ceives monthly compensation at an annual rate of 1.25% on the first $1
million of daily average net assets and 1% on that portion of the daily
average net assets in excess of $1 million. These fees will be reduced
by any sub-transfer agent fees incurred by the Fund.
Carosa, Stanton & DePaolo Asset Management, LLC has agreed to forego
sufficient investment advisory fees to limit total expenses of the Fund
to 2% of the first $10 million in average assets and 1.5% of the next
$20 million in average assets.
(5) Capital Share Transactions
The Fund has authorized 10,000,000 shares of common stock at $0.01 par
value per share. Each share has equal dividend, distribution and liquid-
ation rights. Transactions in capital stock of the Series were as follows:
Shares Amount
Shares sold during 1998 16,850.330 $ 172,964
Shares issued in 6/30/98 stock dividend 17.737 -
---------- -----------
16,868.067 172,964
---------- -----------
Shares sold during 1999 11,777.098 108,178
Shares redeemed during 1999 (2,458.779) (20,254)
---------- -----------
9,318.319 87,924
---------- -----------
26,186.386 $ 260,888
========== ===========
WESTERN NEW YORK SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
FINANCIAL HIGHLIGHTS AND RELATED RATIOS/
SUPPLEMENTAL DATA FOR A SHARE OUTSTANDING
FOR THE YEAR ENDED JUNE 30, 1999 AND
FOR THE PERIOD FROM INCEPTION (SEPTEMBER 29, 1997)
TO JUNE 30, 1998
1999 1998
NET ASSET VALUE, beginning of period $ 10.45 $ 10.00
--------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net investment income (loss) (0.05) .02
Net gain (loss) on securities both
realized and unrealized (1.15) .44
--------------------
(1.20) .46
--------------------
STOCK DIVIDEND - (.01)
--------------------
NET ASSET VALUE, end of period $ 9.25 $ 10.45
====================
NET ASSETS, end of period $ 242,204 $ 176,230
====================
Actual Actual*
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.0% 2.0%*
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS (0.4%) 0.2%*
PORTFOLIO TURNOVER RATE 13.9% -
* The ratios presented were calculated using operating data for the nine
month period from inception (September 29, 1997) to June 30, 1998.
The accompanying notes are an integral part of these statements.
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<PAGE>
FORM N-1A
PART C - OTHER INFORMATION
Contents Page #
Item 24. Financial Statements & Exhibits 1
Item 25. Persons Controlled by or Under Common Control 9
Item 26. Number of Holders of Securities 9
Item 27. Indemnification 9
Item 28. Business and Other Connections of Investment Adviser 9
Item 29. Principal Underwriters 9
Item 30. Location of Accounts & Records 9
Item 31. Management Services 10
Item 32. Undertakings 10
Signatures 11
Exhibits 12
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<PAGE>
Item 24. a. Financial Statements - All other financial statements are presented
in Part B. These include:
UNRESTRICTED SERIES
Statement of Assets and Liabilities June 30, 1999
Schedule of Investments in Securities June 30, 1999
Notes to Financial Statement June 30, 1999
WESTERN NEW YORK SERIES
Statement of Assets and Liabilities June 30, 1999
Schedule of Investments in Securities June 30, 1999
Notes to Financial Statement June 30, 1999
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<PAGE>
b. Exhibits
(3.i) Articles of Incorporation
(3.ii) By-Laws
(10.1) Investment Management Agreement
(10.2) Custodian Agreement
(10.3) Reimbursement Agreements with Officers and/or Directors
(99.1) Opinion of Counsel Concerning Fund Securities
(99.2) Auditor's Consent
All exhibits are incorporated by reference to post-effective
amendment no. 6 of the Securities Act of 1933.
Item 25. Persons Controlled by or Under Common Control - See Major
Shareholders Part B.
Item 26. Number of Holders of Securities - As of October 15, 1999, there
are forty-seven (47) shareholders of the BULLFINCH FUND, Inc.
Item 27. Indemnification - Insofar as indemnification for liability arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant, the registrant
has been advised that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being regist-
ered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be gov-
erned by the final adjudication of such issue.
Item 28. Business and Other Connections of Investment Adviser - the activity
of Carosa, Stanton & DePaolo Asset Management, LLC at the present
time is performance under the terms of the Investment Management
Agreement currently effective between Carosa, Stanton & DePaolo
Asset Management, LLC and the BULLFINCH FUND, Inc. Mr. Christopher
Carosa, Mr. Gordon R. Stanton and Mr. Anthony R. DePaolo are the sole
members of the Investment Adviser. Mr. Carosa is also Executive
Director of CTO Research Associate, a research and consulting firm,
and within the past two years has been employed as a Managing Direct-
or by Manning & Napier Advisors, Inc. and as Executive Vice President
and Senior Trust Officer of its affiliate, Exeter Trust Company. Mr.
Stanton, within the past two years, has been President of Laser
Reflections, Inc., a producer of laser light shows. Mr. DePaolo is
also President of Ardman Regional Ltd., a research and consulting
firm, and within the past two years has been employed as the General
Manager of Howe & Rusling.
Item 29. Principal Underwriters - the Fund acts as its own underwriter.
Item 30. Location of Accounts & Records - all Fund records, including all
accounts, books and other documents required to be maintained by
Section 31(a) of the 1940 Act and the Rules promulgated thereunder,
are held in corporate headquarters - 2 Lantern Lane, Honeoye Falls,
New York 14472. All assets and securities of the Series are in
account at Charles Schwab & Co. Inc, The Schwab Building, 101
Montgomery Building, San Francisco, CA 94104.
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<PAGE>
Item 31. Management Services - Not applicable
Item 32. Undertakings - Not applicable
-10-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Invest-
ment Company Act of 1940, the BULLFINCH FUND, Inc. has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the Town of Mendon and State of New York,
on the 15th day of October 1999.
BULLFINCH FUND, INC.
Christopher Carosa,
President
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed below by the following person in the capacities and
on the date indicated.
Christopher Carosa President, Treasurer and Director 10-15-99
Gordon R. Stanton Vice President and Director 10-15-99
William E. J. Martin Director 10-15-99
Thomas Midney Director 10-15-99
Michael J. Morris Director 10-15-99
Betsy K. Carosa Secretary 10-15-99
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<PAGE>
