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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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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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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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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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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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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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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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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