TRUECROSSING FUNDS
SEMI-ANNUAL REPORT
MAY 31, 2000
TRUECROSSING
GROWTH FUND
TRUECROSSING
TECHNOLOGY FUND
NEWBRIDGE PARTNERS, LLC
535 MADISON AVENUE, 14TH FLOOR
NEW YORK, NY 10022
NEWBRIDGE PARTNERS, LLC
INVESTMENT COUNSEL
<PAGE>
--------------------------------------------------------------------------------
TRUECROSSING GROWTH FUND
A MESSAGE TO OUR SHAREHOLDERS
MAY 31, 2000
--------------------------------------------------------------------------------
Dear Shareholder,
We would like to take this opportunity to update you about the progress of
TrueCrossing Growth Fund during the first half of this year and provide you with
thoughts about our investment philosophy going forward. TrueCrossing Growth Fund
has returned -3.50% from inception on December 20, 1999 through May 31, 2000
versus 0.80% for the Standard & Poor's 500 Index ("S&P 500"). While the Fund has
underperformed the S&P 500 in the short-term, we remain dedicated to our
long-term investment philosophy -- earnings growth drives stock prices. We
manage a focused portfolio of high-quality growth companies which we believe
have the potential to rapidly grow earnings over time.
An increased focus on short-term data points, and the subsequent market
volatility, has emphasized the need for a long-term investment philosophy.
Short-term phenomena, such as speculation about Federal Reserve interest rate
moves, caused dramatic swings in equity valuations. It is impossible to
accurately predict these short-term price movements. At NewBridge Partners, we
continue to employ a bottom-up approach in our fundamental research with the
goal of owning high-quality growth companies for the long-term, regardless of
economic environment.
High-quality companies are those that have rapidly expanding earnings, strong
financial foundations, market-leadership, and superb management teams.
Insistence on these fundamental growth and quality characteristics gives
NewBridge Partners the confidence to maintain our long-term perspective in
managing a focused portfolio for our clients. By avoiding the distraction of
daily short-term noise, we are free to focus on the centerpiece of our
philosophy: earnings growth drives stock prices over time.
Recently, every company in the Fund's portfolio met, or exceeded, aggressive
earnings expectations and difficult prior year comparisons. Going forward, we
believe that these companies will continue to grow and thrive. Our investment
commitment, to own high-quality growth companies for as long as they continue to
prosper, is resolute and we believe our investors ultimately will be rewarded.
NewBridge Partners, LLC
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. Due to current market
volatility, the Fund's performance may be less than the figures presented.
Investment return and principal value will fluctuate so that shares, when
redeemed, may be worth more or less than when purchased. As of June 30, 2000,
the Growth Fund's year-to-date return is 4.00% versus -0.42% for the S&P 500.
During this period, some of the Fund's fees were waived; otherwise, total return
would have been lower. Total return figures include reinvestment of dividends
and capital gain distributions. The Fund invests in large-cap and mid-cap
companies. Investments in mid-cap companies may involve greater risks, such as
limited product lines, markets, and financial or managerial resources. The views
in this report were those of the Fund manager as of May 31, 2000, and may not
reflect the views of the manager on the date this report is first published or
anytime thereafter. These views are intended to assist shareholders of the Fund
in understanding their investment in the Fund and do not constitute investment
advice.
1 TRUECROSSING FUNDS
<PAGE>
--------------------------------------------------------------------------------
TRUECROSSING TECHNOLOGY FUND
A MESSAGE TO OUR SHAREHOLDERS
MAY 31, 2000
--------------------------------------------------------------------------------
Dear Shareholder:
As we near the conclusion of the first half of 2000, TrueCrossing Technology
Fund marks its first month in operation. TrueCrossing Technology Fund returned
-16.60% from inception on May 1, 2000 through May 31, 2000 versus -7.64% for the
Morgan Stanley High Tech Index as volatility was especially pronounced in
technology issues.
While volatility is expected when investing in technology, the number of days
this year in which the NASDAQ gained or lost more than 3% eclipsed the combined
total for 1998 and 1999. More information and less trading costs, combined with
recent rate hikes have fueled the fluctuations. At times these factors have led
investors to overlook what we believe to be the key driving forces of our
economy and the foundation for future growth: Globalization and Technology.
Rather than focusing on macro-economic and short-term events, we believe
investors are best served by paying attention to company fundamentals,
identifying the leaders and investing in those companies for the long term.
Although counterintuitive, in view of the rapid changes and disruptive forces of
technology, we believe a bottom-up investment philosophy emphasizing the long
term is an excellent way to capitalize on the tremendous opportunities while
insulating investors from the unavoidable downdrafts.
PORTFOLIO CHANGES DURING THE QUARTER
Adhering to our fundamentally driven investment philosophy, we implemented the
following changes:
SOLD
FOUNDRY (FDRY)
The competition for layer 4-7 routers and switches has intensified. Despite
FDRY's focus, competitive technology and early wins, we believe Juniper (JNPR)
is the best positioned next generation company to effectively compete with Cisco
Systems (CSCO) for market share in the fastest growing part of internet
infrastructure (50% industry CAGR). Our decision was to keep and increase JNPR
and sell FDRY.
Q-LOGIC (QLGC)
QLGC was sold as the pending acquisition of Ancor (ANCR) puts the company in
more direct competition with Brocade (BRCD) for fibre channel switches. BRCD has
80% market share in fibre channel switches and recently announced a
collaboration with CSCO which will use BRCD's technology in its Catalyst 6000
router to provide fibre channel SAN connectivity to the IP based WAN.
BOUGHT
PHONE.COM (PHCM)
The addition of PHCM reflects our investment in the emerging but fast growing
market for wireless internet access. As subscriber growth continues to explode
worldwide, carriers need to add new features as well as offering lower and
simplified pricing. As evidenced in the wireline markets, demand for wireless
data services will be enormous. Using a server-based business model, PHCM sells
to wireless operators who in turn sell the service to their customer base. PHCM
has deals with 60 operators worldwide, representing 200 million subscribers; 50%
of total subscribers. Total subscriber growth is expected to top 1 billion over
the next 5 years. Of the 60 carriers under contract, 5 have large-scale
deployments (100K + subs), 30 have launched, and the balance are near that
stage.
2 TRUECROSSING FUNDS
<PAGE>
--------------------------------------------------------------------------------
TRUECROSSING TECHNOLOGY FUND
A MESSAGE TO OUR SHAREHOLDERS (continued)
MAY 31, 2000
--------------------------------------------------------------------------------
SIEBEL (SEBL)
SEBL is the largest front office applications software company for sales,
marketing and customer service. The CRM (customer relationship management) space
is one of the fastest growing segments of enterprise software and SEBL is the
clear leader as competitors have struggled to keep up and have sold out to other
companies. Hewlett Packard (HWP) bought Clarify and Peoplesoft (PSFT) bought
Vantive. CRM software is critical for customer support that leads to customer
retention as well as the ability to extract new revenue from existing customers.
As the market moves to the Web, the complexity of managing customer
relationships increases and so does the demand for SEBL's products.
GENERAL MOTORS HUGHES (GMH)
GMH is the leading satellite service company with 8.5 million DirectTV
subscribers (1 out of every 12 households has DirectTV). Over the last 12
months, GMH has integrated its acquisition of Primestar, sold its satellite
manufacturing business to Boeing (BA), completed its $9 billion exchange offer
with General Motors (GM), which lowers GM's stake to 27% from 62%, and is
expected to grow EBITDA at 45%. GMH is now a focused satellite services company
well positioned to benefit from enhanced service offerings and two-way internet
access later this year. Until recently, satellite subscribers had to pay cable
companies for local news programming, thereby increasing the total cost of
services to the subscriber. Satellite service providers like GMH and Echostar
now offer local news. With regard to internet access, GMH's DirectPC is fast
(400kbps vs. a 56kbps modem) but nascent. While downstream speeds enable faster
access to web pages, upstream transmission is routed via a dial-up connection.
That is scheduled to change later this year.
YAHOO (YHOO)
YHOO is the leading pure internet portal now that AOL is merging with Time
Warner (TWX). Similar to AOL, YHOO's focus is to have YHOO everywhere: desktops,
laptops, cell phones, PDA's, etc. With more than 3,500 advertisers and 10,500
merchants, YHOO's main revenue streams will continue to be advertising and
transactions but will seek to leverage its brand on a global basis as non-U.S.
internet usage increases. The company has stated its intention to stay
independent and focus on execution. Going forward, earnings are expected to
continue growing at 50%.
We hope this information provides some insight into how we have been positioning
TrueCrossing Technology Fund as it seeks to benefit from key trends and future
growth in technology. For more detailed information about the Fund and our
holdings, please visit our web site at http://www.truecrossingfunds.com. Or feel
free to contact us at (800) 679-5707 if you have any questions about the
direction the Fund is taking. Thank you for your support.
NewBridge Partners, LLC
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. Due to current market
volatility, the Fund's performance may be less than the figures presented.
Investment return and principal value will fluctuate so that shares, when
redeemed, may be worth more or less than when purchased. During this period,
some of the Fund's fees were waived; otherwise, total return would have been
lower. Total return figures include reinvestment of dividends and capital gain
distributions. The Fund invests in large-cap and mid-cap companies. Investments
in mid-cap companies may involve greater risks, such as limited product lines,
markets, and financial or managerial resources. The Fund is non-diversified
which means concentration of Fund in securities of a limited number of issuers
exposes it to greater market risk and potential monetary losses than if its
assets were diversified among the securities of a greater number of issuers.
Technology and technology
3 TRUECROSSING FUNDS
<PAGE>
--------------------------------------------------------------------------------
TRUECROSSING TECHNOLOGY FUND
A MESSAGE TO OUR SHAREHOLDERS (continued)
MAY 31, 2000
--------------------------------------------------------------------------------
related companies are subject to greater competitive pressures, rapid
obsolescence and greater government regulation than other companies. The views
in this report were those of the Fund manager as of May 31, 2000, and may not
reflect the views of the manager on the date this report is first published or
anytime thereafter. These views are intended to assist shareholders of the Fund
in understanding their investment in the Fund and do not constitute investment
advice.
4 TRUECROSSING FUNDS
<PAGE>
--------------------------------------------------------------------------------
TRUECROSSING GROWTH FUND
SCHEDULE OF INVESTMENTS (unaudited)
MAY 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARE SECURITY
AMOUNT DESCRIPTION VALUE
-------- ----------------------------- ----------
<C> <S> <C>
COMMON STOCK (90.3%)
COMMUNICATIONS/MEDIA (13.0%)
5,200 America Online, Inc.+ $ 275,600
4,200 AT&T Corp. -- Liberty Media
Corp.+ 186,113
3,800 Clear Channel Communications,
Inc.+ 284,525
3,300 CMGI, Inc.+ 157,781
----------
904,019
----------
CONSUMER (6.9%)
5,100 Harley-Davidson, Inc. 189,975
6,000 Home Depot, Inc. 292,875
----------
482,850
----------
DATA STORAGE (5.5%)
3,300 EMC Corp.+ 383,831
----------
FINANCIAL (16.3%)
2,200 American International Group,
Inc. 247,638
11,550 Charles Schwab Corp. 332,063
4,200 Citigroup, Inc. 261,187
3,000 Merrill Lynch & Co., Inc. 295,875
----------
1,136,763
----------
HARDWARE (3.4%)
5,500 Dell Computer Corp.+ 237,187
----------
HEALTH CARE (10.7%)
1,200 Genentech, Inc.+ 128,850
5,900 Medtronic, Inc. 304,588
7,000 Pfizer, Inc. 311,937
----------
745,375
----------
NETWORKING (5.5%)
6,700 Cisco Systems, Inc.+ 381,900
----------
</TABLE>
<TABLE>
<CAPTION>
SHARE SECURITY
AMOUNT DESCRIPTION VALUE
-------- ----------------------------- ----------
<C> <S> <C>
COMMON STOCK, CONTINUED
SEMICONDUCTORS (12.6%)
2,400 Broadcom Corp.+ $ 312,150
2,300 Intel Corp. 286,638
1,800 PMC-Sierra, Inc.+ 275,850
----------
874,638
----------
SOFTWARE (2.6%)
2,900 Microsoft Corp.+ 181,431
----------
TELECOMMUNICATIONS (13.8%)
4,500 JDS Uniphase Corp.+ 396,000
7,600 Nokia Corp. ADR 395,200
2,600 QUALCOMM, Inc.+ 172,575
----------
963,775
----------
Total Common Stock
(cost $6,819,567) 6,291,769
----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
-------- ----------------------------- ----------
<S> <C> <C>
CASH MANAGEMENT ACCOUNTS (9.7%)
350,447 Daily Assets Cash Fund $ 350,447
324,523 Daily Assets Government
Obligations Fund 324,523
----------
Total Cash Management
Accounts (cost $674,970) 674,970
----------
TOTAL INVESTMENTS (100.0%)
(COST $7,494,537) $6,966,739
==========
</TABLE>
---------------------------------------------------------
+ Non-income producing security.
See Notes to Financial Statements. 5 TRUECROSSING FUNDS
<PAGE>
--------------------------------------------------------------------------------
TRUECROSSING TECHNOLOGY FUND
SCHEDULE OF INVESTMENTS (unaudited)
MAY 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARE SECURITY
AMOUNT DESCRIPTION VALUE
------- -------------------------------- --------
<C> <S> <C>
COMMON STOCK (90.0%)
COMMUNICATION/MEDIA (5.7%)
185 America Online, Inc.+ $ 9,805
190 CMGI, Inc.+ 9,084
--------
18,889
--------
COMPUTER SERVICES (6.1%)
195 Exodus Communications, Inc.+ 13,760
50 VeriSign, Inc.+ 6,769
--------
20,529
--------
DATA STORAGE (11.9%)
105 Brocade Communications Systems,
Inc.+ 12,383
150 EMC Corp.+ 17,447
70 Qlogic Corp.+ 3,439
55 VERITAS Software Corp.+ 6,407
--------
39,676
--------
HARDWARE (6.4%)
160 Dell Computer Corp.+ 6,900
190 Sun Microsystems, Inc.+ 14,559
--------
21,459
--------
NETWORKING (15.3%)
290 Cisco Systems, Inc.+ 16,530
110 Foundry Networks, Inc.+ 6,937
130 Inktomi Corp.+ 14,511
75 Juniper Networks, Inc.+ 13,139
--------
51,117
--------
SEMICONDUCTORS (19.0%)
75 Applied Micro Circuits Corp.+ 7,444
105 Broadcom Corp.+ 13,657
90 Intel Corp. 11,216
110 PMC-Sierra, Inc.+ 16,856
200 Texas Instruments, Inc. 14,450
--------
63,623
--------
</TABLE>
<TABLE>
<CAPTION>
SHARE SECURITY
AMOUNT DESCRIPTION VALUE
------- -------------------------------- --------
<C> <S> <C>
COMMON STOCK, CONTINUED
SOFTWARE (5.8%)
100 Ariba, Inc.+ $ 5,213
175 Broadvision, Inc.+ 6,267
125 Microsoft Corp.+ 7,820
--------
19,300
--------
TELECOMMUNICATIONS (19.8%)
200 JDS Uniphase Corp.+ 17,600
320 Nokia Corp. ADR 16,640
165 QUALCOMM, Inc.+ 10,952
120 Redback Networks, Inc.+ 10,065
70 Sycamore Networks, Inc.+ 5,854
180 Vignette Corp.+ 4,961
--------
66,072
--------
Total Common Stock
(cost $339,107) 300,665
--------
</TABLE>
<TABLE>
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
------- -------------------------------- --------
<S> <C> <C>
CASH MANAGEMENT ACCOUNTS (10.0%)
17,202 Daily Assets Cash Fund $ 17,202
16,236 Daily Assets Government
Obligations Fund 16,236
--------
Total Cash Management Accounts
(cost $33,437) 33,438
--------
TOTAL INVESTMENTS (100.0%)
(COST $372,544) $334,103
========
</TABLE>
---------------------------------------------------------
+ Non-income producing security.
See Notes to Financial Statements. 6 TRUECROSSING FUNDS
<PAGE>
--------------------------------------------------------------------------------
TRUECROSSING FUNDS
STATEMENTS OF ASSETS AND LIABILITIES (unaudited)
MAY 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TRUECROSSING TRUECROSSING
GROWTH TECHNOLOGY
FUND FUND
<S> <C> <C>
ASSETS
Investments (Note 2):
Investments, at cost................................ $7,494,537 $372,544
Net unrealized depreciation......................... (527,798) (38,441)
---------- --------
Total investments, at value............................. 6,966,739 334,103
Cash.................................................... 18,696 23,832
Receivable from adviser (Note 3)........................ 28,687 12,818
Receivable for Fund shares issued....................... -- 5,004
Interest, dividends and other receivables............... 3,166 110
---------- --------
Total Assets................................................ 7,017,288 375,867
---------- --------
LIABILITIES
Payable for investments purchased....................... 391,479 --
Payable to administrator (Note 3)....................... 4,167 2,016
Accrued expenses and other liabilities.................. 34,420 11,138
---------- --------
Total Liabilities........................................... 430,066 13,154
---------- --------
NET ASSETS.................................................. $6,587,222 $362,713
========== ========
COMPONENTS OF NET ASSETS
Paid-in capital......................................... $7,141,322 $401,380
Undistributed net investment loss....................... (13,013) (226)
Accumulated net realized loss........................... (13,289) --
Unrealized depreciation of investments.................. (527,798) (38,441)
---------- --------
NET ASSETS.................................................. $6,587,222 $362,713
========== ========
SHARES OF BENEFICIAL INTEREST............................... 682,893 43,494
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE.... $ 9.65 $ 8.34
</TABLE>
See Notes to Financial Statements. 7 TRUECROSSING FUNDS
<PAGE>
--------------------------------------------------------------------------------
TRUECROSSING FUNDS
STATEMENTS OF OPERATIONS (unaudited)
PERIOD ENDED MAY 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TRUECROSSING TRUECROSSING
GROWTH TECHNOLOGY
FUND FUND
<S> <C> <C>
INVESTMENT INCOME
Dividend income......................................... $ 4,323 $ 2
Interest income......................................... 6,834 107
--------- --------
Total Investment Income..................................... 11,157 109
--------- --------
EXPENSES
Investment advisory (Note 3)............................ 11,233 155
Administration (Note 3)................................. 11,223 2,016
Transfer agent (Note 3)................................. 11,515 1,956
Custody................................................. 8,065 --
Accounting (Note 3)..................................... 16,161 2,903
Audit................................................... 15,000 4,286
Legal................................................... 9,578 --
Trustees................................................ 4,500 --
Compliance.............................................. 11,070 2,493
Miscellaneous........................................... 13,439 --
--------- --------
Total Expenses.............................................. 111,784 13,809
Expenses reimbursed and fees waived (Note 4)............ (87,614) (13,474)
--------- --------
Net Expenses................................................ 24,170 335
--------- --------
NET INVESTMENT LOSS......................................... (13,013) (226)
--------- --------
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS
Net realized loss on investments........................ (13,289) --
Net change in unrealized depreciation of investments.... (527,798) (38,441)
--------- --------
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS............. (541,087) (38,441)
--------- --------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS........ $(554,100) $(38,667)
========= ========
</TABLE>
See Notes to Financial Statements. 8 TRUECROSSING FUNDS
<PAGE>
--------------------------------------------------------------------------------
TRUECROSSING FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (unaudited)
PERIOD ENDED MAY 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TRUECROSSING TRUECROSSING
GROWTH TECHNOLOGY
FUND FUND
<S> <C> <C>
NET ASSETS, Beginning of Period............................. $ -- $ --
---------- --------
OPERATIONS
Net investment loss..................................... (13,013) (226)
Net realized loss on investments........................ (13,289) --
Net change in unrealized depreciation of investments.... (527,798) (38,441)
---------- --------
Net decrease in net assets resulting from operations........ (554,100) (38,667)
---------- --------
CAPITAL SHARE TRANSACTIONS
Sale of shares.......................................... 7,318,080 401,380
Redemption of shares.................................... (176,758) --
---------- --------
Net increase from capital share transactions................ 7,141,322 401,380
---------- --------
Net increase in net assets.................................. 6,587,222 362,713
---------- --------
NET ASSETS, End of Period (a)............................... $6,587,222 $362,713
========== ========
SHARE TRANSACTIONS
Sale of shares.......................................... 700,611 43,494
Redemption of shares.................................... (17,718) --
---------- --------
Net increase in shares...................................... 682,893 43,494
========== ========
(a) Undistributed net investment loss....................... $ (13,013) $ (226)
========== ========
</TABLE>
See Notes to Financial Statements. 9 TRUECROSSING FUNDS
<PAGE>
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (unaudited)
--------------------------------------------------------------------------------
These financial highlights reflect selected data for a share outstanding
throughout each period:
<TABLE>
<CAPTION>
TRUECROSSING TRUECROSSING
GROWTH TECHNOLOGY
FUND FUND
DECEMBER 20, 1999 MAY 1, 2000
TO TO
MAY 31, 2000 MAY 31, 2000
<S> <C> <C>
NET ASSET VALUE PER SHARE, Beginning of Period.............. $10.00 $ 10.00
------ -------
OPERATIONS
Net investment loss..................................... (0.02) (0.01)
Net realized and unrealized loss on investments......... (0.33) (1.65)
------ -------
Total from Operations....................................... (0.35) (1.66)
------ -------
NET ASSET VALUE, End of Period.............................. $ 9.65 $ 8.34
====== =======
TOTAL RETURN................................................ (3.50) % (16.60) %
RATIO/SUPPLEMENTARY DATA
Net assets at end of period (000's omitted)............... $6,587 $ 363
Ratios to Average Net Assets
Expenses, including reimbursement/waiver of fees........ 1.51%(a) 1.51%(a)
Expenses, excluding reimbursement/waiver of fees........ 6.97%(a) 62.24%(a)
Net investment loss, including reimbursement/waiver of
fees.................................................... (0.81) %(a) (1.02) %(a)
PORTFOLIO TURNOVER RATE..................................... 4% 0%
</TABLE>
---------------
(a) Annualized.
See Notes to Financial Statements. 10 TRUECROSSING FUNDS
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
MAY 31, 2000
--------------------------------------------------------------------------------
NOTE 1. ORGANIZATION
This report relates to TrueCrossing Growth Fund and TrueCrossing Technology Fund
(individually a "Fund", and collectively, "the Funds"), each a series of
TrueCrossing Funds (the "Trust"). The Trust was organized as a business trust
under the laws of the State of Delaware on July 29, 1999 pursuant to a trust
instrument dated July 29, 1999 (the "Trust Instrument"). The Trust is registered
as an open-end, management investment company under the Investment Company Act
of 1940. TrueCrossing Growth Fund is a diversified series of the Trust.
TrueCrossing Technology Fund is non-diversified. Under its Trust Instrument, the
Trust is authorized to issue an unlimited number of each Fund's shares of
beneficial interest without par value. Commencement of operations for each Fund
was as follows:
<TABLE>
<S> <C>
TrueCrossing Growth Fund December 20, 1999
TrueCrossing Technology Fund May 1, 2000
</TABLE>
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
These financial statements are prepared in accordance with generally accepted
accounting principles, which require management to make estimates and
assumptions that affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of increase and decrease in net assets from
operations during the fiscal period. Actual amounts could differ from these
estimates. The following summarizes the significant accounting policies of each
Fund:
SECURITY VALUATION-On each Fund business day, the Trust determines the net asset
value per share of each Fund, as of the close of the regular trading day on the
New York Stock Exchange. Securities, other than short-term securities, held by
each Fund, and for which market quotations are readily available, are valued
using the last reported sales price provided by independent pricing services. If
no sales price is reported, the mean of the last bid and ask price is used. In
the absence of readily available market quotations, securities are valued at
fair value as determined by the Trust's Board of Trustees pursuant to the
Trust's valuation procedures. Securities that mature in sixty days or less are
valued at amortized cost, which approximates market value.
SECURITY TRANSACTIONS AND INVESTMENT INCOME-Investment transactions are
accounted for on trade date. Dividend income is recorded on the ex-dividend
date. Interest income is recorded as earned. Identified cost of investments sold
is used to determine gain and loss for both financial statement and federal
income tax purposes.
REPURCHASE AGREEMENTS-Each Fund may invest in repurchase agreements. Each Fund,
through its custodian, receives delivery of the underlying securities, whose
market value must always equal or exceed the repurchase price. In the event of
default, the Fund may have difficulties disposing of such securities.
DISTRIBUTIONS TO SHAREHOLDERS-Distributions to shareholders of net investment
income and net capital gain, if any, are declared and paid quarterly.
Distributions are based on amounts calculated in accordance with applicable
federal income tax regulations, which may differ from generally accepted
accounting principles. These differences are due primarily to differing
treatments of income and gain on various investment securities held by a Fund,
timing differences and differing characterizations of distributions made by the
Fund.
11 TRUECROSSING FUNDS
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited) (continued)
MAY 31, 2000
--------------------------------------------------------------------------------
FEDERAL TAXES-Each Fund intends to qualify each year as a regulated investment
company and distribute all its taxable income. In addition, by distributing in
each calendar year substantially all its net investment income, capital gain and
certain other amounts, if any, each Fund will not be subject to a federal excise
tax. Therefore, no federal income or excise tax provision is required.
EXPENSE ALLOCATION-The Trust is comprised of two active fund series and it
accounts separately for the assets, liabilities and operations of each of its
funds. Expenses that are directly attributable to more than one fund are
allocated among the respective funds in proportion to each fund's average daily
net assets.
NOTE 3. ADVISORY FEES AND OTHER TRANSACTIONS WITH RELATED PARTIES
INVESTMENT ADVISER-The investment adviser to each Fund is NewBridge Partners,
LLC, (the "Adviser"). For its services, the Adviser receives an advisory fee
from each Fund at an annual rate of 0.70% of each Fund's average daily net
assets.
ADMINISTRATOR-The administrator of each Fund is Forum Administrative Services,
LLC ("FAdS"). For its services, FAdS receives an administrative fee from each
Fund at an annual rate as follows: 0.15% of the average daily net assets under
$50 million of the Fund, 0.10% of the average daily net assets over $50 million
and under $100 million and 0.05% of the average daily net assets over $100
million of the Fund. This fee is subject to an annual minimum of $25,000 per
Fund.
TRANSFER AGENT-The transfer agent and dividend disbursing agent for each Fund is
Forum Shareholder Services, LLC ("FSS"). For its services, FSS receives from
each Fund an annual fee of $24,000 (waived to $18,000 for the first year), plus
certain other fees and expenses.
DISTRIBUTOR-The distributor for each Fund is Forum Fund Services, LLC ("FFS"), a
registered broker-dealer and a member of the National Association of Securities
Dealers, Inc. FFS receives no compensation for its distribution services.
FUND ACCOUNTANT-The fund accountant for each Fund is Forum Accounting Services,
LLC ("FAcS"). For its services, FAcS receives from each Fund an annual fee of
$36,000, subject to adjustments for the number and type of portfolio
transactions.
NOTE 4. WAIVER OF FEES
Certain service providers of each Fund have voluntarily undertaken to waive a
portion of their fees and reimburse certain expenses of each Fund so that total
expenses of each Fund would not exceed certain limitations. Fee waiver and
expense reimbursements may be reduced or eliminated at any time. For the period
ended May 31, 2000, expenses reimbursed and fees waived were as follows:
<TABLE>
<CAPTION>
TOTAL
EXPENSES
EXPENSES FEES WAIVED REIMBURSED
REIMBURSED ----------------- AND FEES
FAdS FSS ADVISER WAIVED
---------- ------ ------- ----------
<S> <C> <C> <C> <C>
TrueCrossing Growth Fund................... $73,687 $2,694 $11,233 $87,614
TrueCrossing Technology Fund............... 12,819 500 155 13,474
</TABLE>
12 TRUECROSSING FUNDS
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited) (continued)
MAY 31, 2000
--------------------------------------------------------------------------------
NOTE 5. SECURITY TRANSACTIONS
The cost of purchases and proceeds from sales of securities, other than
short-term investments, for the period ending May 31, 2000, were as follows:
<TABLE>
<CAPTION>
TRUECROSSING TRUECROSSING
GROWTH FUND TECHNOLOGY FUND
------------ ---------------
<S> <C> <C>
Cost of Purchases............................... $7,001,785 $339,107
Proceeds from Sales............................. 168,929 --
</TABLE>
13 TRUECROSSING FUNDS
<PAGE>
FOR MORE INFORMATION
Investment Adviser
NewBridge Partners, LLC
535 Madison Avenue, 14th Floor
New York, NY 10022
Distributor
Forum Fund Services, LLC
Two Portland Square
Portland, ME 04101
Transfer Agent
Forum Shareholder Services, LLC
Two Portland Square
Portland, ME 04101
This report is authorized for distribution only
to shareholders and to others who have received
a copy of the Funds' prospectus.
TRUECROSSING
FUNDS
TRUECROSSING
GROWTH FUND
TRUECROSSING
TECHNOLOGY FUND
TRUECROSSING FUNDS
Two Portland Square
Portland, ME 04101
800-679-5707
www.truecrossingfunds.com
