REGISTRATION NO. 333-82559
REGISTRATION NO. 811-9437
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ X ]
Pre-Effective Amendment No.1......[ X ]
Post-Effective Amendment No.......[ ]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ X ]
Amendment No. 1 ....[ X ]
Lindbergh Funds
(Exact Name Of Registrant As Specified In Charter)
5520 Telegraph Road, Suite 204, Saint Louis, Missouri 63129
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (314) 416-0055
Dewayne L. Wiggins, 5520 Telegraph Road, Suite 204, Saint Louis, Missouri 63129
(Name and Address of Agent for Service)
With copy to:
Charles W. Lutter, Jr., Attorney
103 Canyon Oaks, San Antonio, TX 78232-1305
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Approximate Date of Proposed Offering: September 30, 1999
It is proposed that this filing will become effective:
[ ] immediately upon filing pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of Rule 485
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, Registrant
hereby declares that an indefinite number or amount of shares are being
registered under the Securities Act of 1933.
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(Logo)
Lindbergh
Funds
Lindbergh Signature Fund
An actively managed asset allocation fund.
PROSPECTUS
September ___ , 1999
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities nor has any
Commission determined that this prospectus is accurate or complete. Anyone who
tells you otherwise is committing a crime.
This offering is limited to residents of the states of California, Illinois,
Missouri and Texas.
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TABLE OF CONTENTS
RISK/RETURN SUMMARY..........................................................3
Investment Objective....................................................3
Principal Investment Strategies.........................................3
Principal Risks.........................................................3
Performance Information.................................................4
Fees and Expenses.......................................................5
WHO IS RESPONSIBLE FOR YOUR FUND ACCOUNT.....................................6
HOW WE MANAGE THE FUND.......................................................7
Investment Objective....................................................7
Principal Investment Strategies.........................................7
Discussion of Principal Risks...........................................9
ADDITIONAL CONSIDERATIONS...................................................11
DISTRIBUTION FEES...........................................................12
HOW YOUR SHARES ARE VALUED..................................................12
HOW SECURITIES IN THE PORTFOLIO ARE VALUED..................................12
DIVIDENDS...................................................................13
TAXES ...................................................................13
HOW TO BUY SHARES...........................................................13
HOW TO REDEEM SHARES........................................................16
SHAREHOLDER SERVICES........................................................17
OTHER FUND INFORMATION..............................................back cover
Types of Information...........................................back cover
Where You Can Get This Information.............................back cover
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RISK/RETURN SUMMARY
INVESTMENT OBJECTIVE
The Fund's primary objective is to increase the value of your investment over
the long-term through capital appreciation and earned income. Capital
preservation is an important but secondary objective.
PRINCIPAL INVESTMENT STRATEGIES
The Fund invests in common stocks, bonds and money market instruments in
proportions consistent with their expected returns and risk as assessed by the
Fund's adviser, Lindbergh Capital Management, Inc. (the "Adviser"). In
evaluating potential risk and return tradeoffs, the Adviser reviews general
macro-economic conditions, Federal Reserve policy and employs various analytical
models.
When, in the Adviser's judgment, conditions are favorable for stock investments,
the Fund will normally be fully invested in common stocks. If, however, in the
Adviser's view, stock market conditions are less favorable for investors, all or
a portion of fund assets will be shifted out of stocks and into such fixed
income investments as bonds and cash. The Fund is permitted to be 100% invested
in any one of the three asset classes - stocks, bonds, or cash.
After allocating funds among the major asset classes, the Adviser next judges
which stock market sub-classes, such as large capitalization growth stocks or
small capitalization value stocks, present the best investment opportunities. As
part of this evaluation process, the Adviser considers factors such as the
current stage of the business cycle, Federal Reserve policy, macro-economic
policy in general, the state of world affairs, and financial market conditions.
Once the Adviser identifies the broad stock market sub-classes that it believes
have the most potential, it then focuses its search within those specific areas
for individual stocks. After narrowing the search, the criteria the Adviser uses
in selecting specific stocks from within a subclass depends on a variety of
considerations such as conditions in the economy and financial markets, company
and industry fundamentals, stock price trends, and company valuations to name a
few. The Adviser relies on its judgment and experience to determine what factors
should receive the most emphasis at any point in time.
In managing the Fund's fixed income assets, the Adviser strives to take
advantage of opportunities created by changing interest rates during the course
of a business cycle. If it believes conditions favor a basic change in Federal
Reserve policy, the Adviser may respond by either lengthening or shortening the
time to maturity of the Fund's fixed income portfolio. Its goal with this
strategy is two-fold: First capital preservation during periods of rising
interest rates. Second, capital appreciation during interest rate declines. In
executing this strategy, the Adviser primarily uses U.S. government securities
and to a lesser extent investment grade corporate bonds with maturities more
than one year.
PRINCIPAL RISKS
The Fund's total return, like stock and bond prices generally, will fluctuate
within a wide range, so you could lose money over short or even long periods of
time. This section describes what we think are the most significant factors that
can cause the Fund's performance to suffer.
Lindbergh Funds Prospectus (PEA#1) Page 3 of 18
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* MARKET RISK. STOCKS: The market value of shares of common stock can change
rapidly and unpredictably which could result from political or economic
events having little or nothing to do with the issuer. In addition,
investments in smaller companies may involve greater risk than investments
in larger, more established companies, and shares of smaller companies may
be subject to more abrupt or erratic price movements.
* MARKET RISK. BONDS: The market values of bonds decline over short or even
long periods due to rising interest rates, the credit worthiness of the
issuer, and terms of the bonds.
* MANAGER OR STRATEGY RISK: This is the chance that the Adviser's security
selection or strategy execution will cause the Fund to underperform other
funds with similar objectives.
* DIVERSIFICATION RISK: The Fund is not classified as a diversified fund. As
a consequence, the Fund's net asset value may be more volatile than that of
a more widely diversified fund because the Fund may invest more of its
assets in a smaller number of companies. Consequently, the Fund may be more
vulnerable to any single economic, political or regulatory occurrence, and
the gain's or losses on a single stock may have a greater impact on the
Fund's net asset value.
PERFORMANCE INFORMATION
Lindbergh Signature Fund commenced operations on September ___ , 1999. As a
consequence, the Fund does not have a performance history.
Lindbergh Funds Prospectus (PEA#1) Page 4 of 18
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FEES AND EXPENSES
The following table describes the fees and expenses that you may pay if you buy
and hold shares of the Fund.
Shareholder Fees (fees paid directly from your investment)
Sales Charge (Load) Imposed on Purchases: None
Sales Charge (Load) Imposed on Reinvested Dividends: None
Redemption Fees: None
Exchange Fees: None
Annual Fund Operating Expenses (expenses deducted from fund assets)
Management Fees: 0.75%
Distribution (12b-1) Fees: 0.25%
Other Expenses: 0.75%
Total Annual Fund Operating Expenses: 1.75%
Expense Reimbursements*: (1.00%)
Net Expenses: 0.75%
* Actual total expenses will not exceed 0.75% because the Adviser's contract
with the Fund requires it to pay fund expenses to maintain total annual fund
operating expenses at 0.75% through August 31, 2000, and to inform the Fund
prior to that date, if the commitment is to continue.
Example
The following example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all your shares at the end of those periods. This
example also assumes that your investment has a 5% return each year and that the
Fund's operating expenses remain the same. Although your actual costs may be
higher or lower based on these assumptions your costs would be:
1 Year 3 Years
$ 179 $ 555
Lindbergh Funds Prospectus (PEA#1) Page 5 of 18
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WHO IS RESPONSIBLE FOR YOUR FUND ACCOUNT
A number of entities provide services to the Fund. This section shows how the
Fund is organized, the entities that perform these services, and how these
entities are compensated. Additional information on the organization of the Fund
is provided in the Fund's Statement of Additional Information. For information
on how to receive this document, see the back cover of this prospectus.
INVESTMENT ADVISER & PORTFOLIO MANAGER
Lindbergh Capital Management, Inc., 5520 Telegraph Road, Suite 204, St. Louis,
Missouri 63129, is the investment adviser for the Fund. It manages the Fund's
portfolio and provides administrative services to the extent not supplied by
other service providers. It has been an investment adviser for the past 11 years
managing portfolios for individuals and retirement plans. This is the first
mutual fund to be managed by the Adviser. The annual advisory fee to be paid to
Lindbergh Capital, based on average net assets, is 0.75%. In connection with
establishing the Fund, the Adviser has planned to keep total fund operating
expenses low. To this end, the Adviser has agreed to pay all Fund expenses
necessary to keep total fund operating expenses at 0.75% through August 31,
2000, and to advise the Fund prior to fiscal year end whether it will continue
to cap expenses.
Dewayne L. Wiggins, President and a controlling shareholder of the Adviser since
1988, is the Fund's portfolio manager. Mr. Wiggins has been responsible for the
day-to-day management of all client portfolios since 1988.
TRANSFER AGENT, FUND ACCOUNTING AND ADMINISTRATOR
Unified Fund Services, Inc. ("Unified"), 431 North Pennsylvania, Indianapolis,
Indiana 46204, acts as the Fund's transfer agent and, in capacity, maintains the
records of each shareholder's account, answers shareholders' inquiries
concerning their accounts, processes purchases and redemptions of the Fund's
shares, acts as dividend and distribution disbursing agent and performs other
shareholder service functions.
In its capacity as fund administrator, Unified provides the Fund with certain
monthly reports, record-keeping and other management related services.
Unified also provides fund accounting services to the Fund including maintaining
the Fund's accounts, books and records and calculating the daily net asset
value. For these administrative and fund accounting services, Unified will
receive a set amount for the first fiscal year, 35% of which is for
administrative services.
DISTRIBUTOR
Unified Management Corporation, an affiliate of Unified Fund Services, is the
distributor for shares of the Fund. It is based in Indianapolis, Indiana and is
the distributor for a number of investment companies around the country. It acts
as agent for sale of Fund shares in the various states and coordinates marketing
materials.
CUSTODIAN
Assets of the Fund are held by UMB Bank, N.A., 928 Grand Boulevard, 10th Floor,
Kansas City, Missouri 64106, as the custodian.
Lindbergh Funds Prospectus (PEA#1) Page 6 of 18
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BOARD OF TRUSTEES
Lindbergh Funds Board of Trustees has general supervisory responsibilities of
the Lindbergh Signature Fund. The Board monitors and supervises the performance
of the investment adviser and other service providers, monitors the Lindbergh
Funds business and investment activities, and determines whether or not to renew
agreements with service providers.
HOW WE MANAGE THE FUND
This section takes a closer look at the Fund's investment objectives and the
strategies to help achieve them. In addition, it provides further detail on the
important risks faced by investors in the Fund.
INVESTMENT OBJECTIVE
The Fund's primary objective is to increase the value of your investment over
the long-term through capital appreciation and earned income.
Capital preservation is an important but secondary objective. As a consequence,
the Fund strives to reduce risk so long as such efforts remain compatible with
the Fund's primary objective of long-term growth of principal.
The foregoing investment objectives may not be changed without shareholder
approval. The other policies described under this caption are not fundamental
policies and thus may be changed by a majority vote of the Board of Trustees of
the Lindbergh Funds. Such a change will not require a vote of Fund shareholders.
PRINCIPAL INVESTMENT STRATEGIES
To help achieve the Fund's investment objectives, the Fund's adviser, Lindbergh
Capital Management, Inc., employs an investment strategy known as asset
allocation. Fund assets are allocated among stock, bond, and cash in proportions
consistent with their expected returns and risks as assessed by the Fund's
Adviser.
Through asset allocation, the Adviser strives to improve returns by
participating in rising stock markets and limiting losses in stock market
declines. To the extent that the Adviser successfully executes this strategy,
the Fund will also realize its secondary objective of capital preservation.
The Adviser's asset allocation process encompasses three distinct steps. First,
the Adviser decides the percentage of fund assets to set aside for stock
investments; any remaining fund assets will ordinarily be invested in fixed
income securities. Next, for those funds allocated to fixed income, the Adviser
determines what portion to invest in bonds. Finally, the Adviser decides which
major sectors of the stock and bond market offer, in its view, the best
investment opportunities.
In assessing potential risk and reward tradeoffs in the financial markets, the
Adviser reviews general macro- economic conditions, Federal Reserve policy and
employs various analytical models and indicators. These factors together help
the Adviser determine the proportion of fund assets to invest in each asset
class. The Fund is permitted to be 100% invested in any one of the three asset
classes - stocks, bonds, or cash.
Lindbergh Funds Prospectus (PEA#1) Page 7 of 18
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The primary tool used to quantify stock market risk is Lindbergh's proprietary
Market MeterTM system. The models and indicators that make up the Market MeterTM
are designed to assess equity market risk by various criteria. For instance,
when interest rates change, certain indicators in the Market MeterTM measure the
possible implications of such changes on the expected returns of stock
investors.
When the Market MeterTM indicates that conditions generally favor stock
investments, the Fund will usually be fully invested in common stocks. If,
however, the Market MeterTM signals a less favorable stock market environment,
the Adviser will normally reduce its equity investments to around 60% of fund
assets. Finally, if the Market MeterTM senses excessive levels of stock market
risk, Fund equity holdings may be reduced to 30% or less of Fund assets.
In executing asset allocation, Lindbergh Capital Management, Inc. expects to
closely adhere to the recommendations of its various models, particularly its
Market MeterTM system. The Adviser, however, will deviate from these equity
allocation targets whenever, in its judgment, it is appropriate to do so.
After allocating funds to asset classes, the Adviser next judges from its
perspective which major sectors of the stock market universe hold the best
investment opportunities. As part of this evaluation process, the Adviser may
consider such factors as the current stage of the business cycle, Federal
Reserve policy, macro-economic policy in general, the state of world affairs,
and financial market conditions.
Once the Adviser identifies the broad stock market sectors that it believes have
the most potential, it then focuses its search within those specific sectors for
individual stocks. As a result of this process, the Fund's stock investments
will often be concentrated in certain broad stock market sectors such as small
growth or small value stocks, or large growth or large value stocks. For
example, if the Adviser believes small stocks offer the best potential return
relative to risk, the Fund may invest all or a large share of the Fund's equity
assets in small-company growth stocks.
After narrowing the search, the criteria the Adviser uses in selecting specific
stocks from within a subclass depends on a variety of considerations such as
conditions in the economy and financial markets, company and industry
fundamentals, stock price trends, and company valuations to name a few. The
Adviser relies on its judgment and experience to determine what factors should
receive the most emphasis at any point in time.
If, for instance, the Federal Reserve is constraining the growth of money and
credit, the Adviser may reduce the Fund's exposure to interest sensitive stocks
and increase its investments in companies that have superior financial strength.
Conversely, during those periods when the U.S. economy is beginning to recover
from a recession, the Adviser may place greater weight on lower quality and
poorer performing stocks as potential stock purchase candidates. When evaluating
growth stocks, company and industry fundamentals will generally play a greater
role in the adviser's equity selection process. With value stocks, though, more
emphasis is usually placed on stock prices and valuation considerations.
In managing the Fund's fixed income assets, the Adviser strives to take
advantage of opportunities created by changing interest rates during the course
of a business cycle. If it believes conditions favor a basic change in Federal
Reserve policy, the Adviser may respond by either lengthening or shortening the
time to maturity of the Fund's fixed income portfolio. Its goal with this
strategy is two-fold: First, capital preservation during periods of rising
interest rates. Second, capital appreciation during interest rate declines. In
executing the strategy with respect to fixed income assets the Adviser primarily
uses U.S. government securities and to a lesser extent investment grade
corporate bonds.
Lindbergh Funds Prospectus (PEA#1) Page 8 of 18
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While it is permissible to invest in bonds and other debt securities, the Fund
expects to be fully invested in equities for extended periods. It is, therefore,
inappropriate to characterize the Fund as a balanced fund.
In addition, the Fund makes no attempt to capitalize on short-term stock market
swings by moving from a 100% equity position into cash and shortly thereafter,
back again into equities. For this reason, it is likewise inappropriate to
characterize the Fund's operating strategy as market timing. On occasion,
though, the Fund may be required to reverse course shortly after implementing a
change in asset allocation. Such short-term reversals should prove to be more
the exception than the rule.
As the terms are used above, stock investments include equity securities of all
types, such as common stocks, preferred stocks, securities convertible into
common stocks, and depository receipts. The Adviser focuses primarily on stocks
traded over national securities exchanges and inter-dealer system. Bond
investments include all varieties of fixed-income securities maturing in more
than one year. Major market sectors or sub-classes of bond investments include
items issued by the U.S. government, by government agencies, by banks and by
corporations. The cash class includes all types of short-term and money market
instruments.
DISCUSSION OF PRINCIPAL RISKS
Diversification Risk
* This is a non-diversified fund. It will keep half of the portfolio
diversified for tax law purposes; however, it may invest up to 25% of
assets in the stocks or bonds of one company. As a result, there maybe a
limited number of companies each representing a larger percentage of the
portfolio and, if those companies are adversely effected by some event,
they would have a greater adverse effect on the portfolio than on a
portfolio where assets are diversified among a larger number of companies.
Manager or Strategy Risk
* You should recognize that market risks inherent in investment cannot be
avoided, nor is there any assurance that the Fund's investment objectives
will be achieved.
* Because the Fund may invest in a wide range of investments and markets, the
Fund's Adviser has substantially more investment discretion than the
advisers of most mutual funds. The performance of the Fund will reflect in
part the Adviser's ability to effectively allocate the Fund's assets among
these investments and markets.
* The principal risk of the Fund's strategy is that the Adviser may misjudge
market conditions when allocating fund assets among stocks, bonds, cash
investments and markets. Investment performance could suffer, for example,
if only a small portion of fund assets were allocated to stocks during a
significant stock market advance or if a major portion of its assets were
allocated to stocks during a market decline. As a result, you could be
worse off than if no attempt had been made to allocate funds.
Stock Market Risks
* GENERAL: Equity securities fluctuate in value, often based on factors
unrelated to the value of the issuer of the securities, and such
fluctuations can be pronounced. Changes in the value of the Fund's
investments will result in changes in the value of its shares and thus the
Fund's total return to investors.
Lindbergh Funds Prospectus (PEA#1) Page 9 of 18
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* COMPANY RISKS: Due to changing investor perception, individual stocks can
perform differently than the overall market.
* SECTOR AND INDUSTRY RISKS: The stocks of companies within specific economic
sectors or industries can periodically perform differently than the overall
stock market. To the extent that the Fund holds above average investment
positions in specific market sectors or industries, it increases not only
the potential for above-average returns, but also the possibility of
below-average returns or investment losses.
* RISKS OF GROWTH STOCKS: Growth stocks typically trade at higher multiples
of current earnings than other stocks. Therefore, their stock prices tend
to be more acutely sensitive to changes in current or expected earnings
than the prices of other stocks. The stocks of growth companies are subject
to substantial price declines if earnings fail to meet investors
expectations.
* RISKS OF VALUE STOCKS: Value stocks are shares in companies that appear to
be inexpensive relative to anticipated earnings and dividend growth. Value
stocks, however, can remain undervalued for years. There is not only the
risk that a value stock may never reach what the Adviser considers fair
value, it may decline even further in value.
* RISKS OF SMALL STOCKS: The Fund may purchase securities of smaller
capitalization companies which may be subject to more abrupt or erratic
market movements than larger, more established companies. Buying and
selling shares of small companies may be more difficult than it is for
larger companies because there are fewer shares available, and they tend to
trade less frequently. Smaller companies are also more likely to declare
bankruptcy or to cease operations.
Risks of Fixed Income Investments
* INTEREST RATE RISK: Debt securities will fluctuate in value with changes in
interest rates. In general, debt securities will increase in value when
interest rates fall and decrease in value when interest rates rise. Longer
term debt securities are generally more sensitive to interest rate changes.
In addition, the zero coupon obligations may be highly volatile to changing
interest rates.
* CREDIT OR DEFAULT RISK: The Fund is subject to the risk that the issuers of
debt securities held by the Fund will not make payment on the securities.
There is also the risk that an issuer could suffer adverse changes in
financial condition that could lower the credit quality of a security. This
could lead to greater volatility in the price of the security and fund
shares. Also, a change in credit quality rating of a bond can affect the
bond's liquidity and make it more difficult for the Fund to sell.
* CALL RISK: Many corporate bonds may be redeemed (called) at the option of
the issuer before their stated maturity date. The Fund would then be forced
to invest the unanticipated proceeds at lower interest rates, resulting in
a decline in the Fund's income.
* LIQUIDITY RISK: Compared with equity securities, there are generally fewer
active buyers and sellers of fixed income securities. It, therefore, can be
more difficult to liquidate fixed income holdings and receive a reasonable
or fair price. Such liquidity risk depends, in part, upon the entity that
issued the bonds and the amount of securities traded. Unlike most equity
securities, sales of smaller parcels of bond securities are often more
illiquid and thus the seller is more likely to receive a price less than
its listed market value.
Lindbergh Funds Prospectus (PEA#1) Page 10 of 18
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* PREPAYMENT AND EXTENSION RISK: Certain debt securities may be repaid before
the money is due. In such an event, the proceeds could be invested at lower
interest rates. Intermediate-term and long-term bonds commonly provide
protection against this possibility, but mortgage-backed securities do not.
Mortgage-backed securities are more sensitive to risks of prepayment
because they can be prepaid whenever their underlying collateral is
prepaid. Conversely, extension risk is the possibility that in an
environment of rising interest rates, expected prepayments will not be
made, with the result that the security's life will become longer than
anticipated. Typically, the security's value will drop when this occurs.
ADDITIONAL CONSIDERATIONS
USE OF DERIVATIVES
The Adviser may utilize derivatives as tools in managing the Fund's portfolio.
Derivatives are financial instruments which derive their performance, at least
in part, from the performance of an underlying asset, index, or interest rate.
Derivatives the Fund may use include options, futures, asset-backed securities
and interest-rate swaps.
The Fund will invest in futures and options for the following reasons:
* To keep cash on hand to meet shareholder redemptions or other needs while
simulating full investment in stocks or bonds.
* To reduce the Fund's transaction costs or add value when the instruments
are favorably priced.
* To use as an investment tool when reallocating assets among stocks, bonds,
and cash investments.
Adviser may, for instance, wish to reallocate 10% of the Fund's assets from
stocks to bonds. To implement this change rapidly and with low transaction
costs, the Adviser may sell stock index futures and purchase bond index futures.
Losses (or gains) involving futures can sometimes be substantial - in part,
because a relatively small price movement in a futures contract may result in an
immediate and substantial loss (or gain). The Fund will not use futures for
speculative purposes and, therefore, does not intend to leverage its net assets.
The Fund will not enter into contracts for which the aggregate initial margin
and premiums (less the in-the-money amount of an option) exceed 5% of the fair
market value of its assets. The Fund will not effect a futures or options
transaction if the aggregate value of the Fund's securities subject to
outstanding futures and options would exceed 100% of the Fund's total assets.
RISKS WITH FUTURES CONTRACTS
* When using stock and bond index futures to reallocate assets among stocks,
bonds, and cash equivalent investments, there may be an imperfect
correlation between changes in the market value of the futures position
relative to the underlying asset in the Fund. This can diminish the
effectiveness of using futures as a tool for reallocating fund assets.
* The liquidity of futures market is one factor that determines their value.
If the Fund cannot close out a futures position, it may be compelled to
continue to make daily cash payments to the broker to meet margin
requirements, thus increasing the transaction cost.
Lindbergh Funds Prospectus (PEA#1) Page 11 of 18
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NOT TAX MANAGED
While the Fund's primary objective is to seek long-term capital appreciation,
the Fund does not necessarily purchase or hold individual securities to qualify
for long-term capital gains treatment. In determining when to sell a security,
the Adviser may consider a variety of factors other than the holding period,
including but not limited to financial market conditions, corporate
developments, other investment opportunities, and fund redemptions.
BORROWING
The Fund can only borrow money under the following conditions: (i) borrow not in
excess of 33 1/3% of its total assets from banks as a temporary measure for
extraordinary purposes, and (ii) engage in transactions involving futures
options and the like on margin.
YEAR 2000 CONSIDERATIONS
The Fund could be adversely affected if the computer systems used by the Fund's
service providers and entities that are linked to the Funds' record do not
properly process and calculate date-related information and data from and after
January 1, 2000. The Adviser expects that all its relevant computer systems will
be able to correctly interpret the year 2000 when that date arrives. Also, the
Adviser has obtained satisfactory assurances that comparable steps are being
taken by each of the Fund's other major service providers. There is, however, no
assurance that these steps will be sufficient to avoid any adverse impact on the
Fund. In addition, the prices of securities in which the Fund invest could be
adversely affected by year 2000 problems experienced by the issuers of those
securities.
DISTRIBUTION FEES
Lindbergh Signature Fund has adopted a plan under Rule 12b-1 that allows the
Fund to pay distribution and other fees for the distribution of its shares and
for services provided to shareholders. The Plan allows for the payment of up to
0.25% of average annual net assets. Because these fees are paid out of the
Fund's assets on an on-going basis, over time, these fees will increase the cost
of your investment and may cost you more than paying other types of sales
charges.
HOW YOUR SHARES ARE VALUED
The share price (also called "net asset value" or NAV per share) is calculated
at the close of the New York Stock Exchange, normally 4 p.m. Eastern Time, each
day the New York Stock Exchange is open for business. To calculate the NAV, the
Fund's assets are valued and totaled, liabilities are subtracted, and the
balance, called net assets, is divided by the number of shares outstanding.
Current market values are used to price fund shares.
HOW SECURITIES IN THE PORTFOLIO ARE VALUED
We use current market valuations to value the securities in the Fund:
* Securities that trade on an organized exchange are valued at the last
published sales price on the exchange. If no sales are recorded, the
securities are valued at the average of the closing bid and asked prices on
the exchange.
Lindbergh Funds Prospectus (PEA#1) Page 12 of 18
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* Over-the-counter securities are valued at the average of closing bid and
asked prices.
* Debt securities maturing in 60 days or less are usually valued at amortized
(gradually reduced) cost.
* Longer-term debt securities may be valued by an independent pricing
service.
* Securities with unavailable market quotations and other assets are valued
at "fair value"--which is determined or directed by the Board of Directors.
If any of the Fund's securities are traded in markets that close at different
times, events affecting portfolio values that occur between the time that their
prices are determined and the time the Fund's shares are priced will generally
not be reflected in the Fund's share price. The net asset value of the Fund's
shares may change on days when shareholders will not be able to purchase or
redeem the Fund's shares.
The value of securities denominated in foreign currencies and traded in foreign
markets will have their value converted into the U.S. dollar equivalents at the
prevailing market rate. Fluctuation in the value of foreign currencies in
relation to the U.S. dollar may affect the net asset value of the Fund's shares
even if there has not been any change in the foreign currency price of the
Fund's investments.
DIVIDENDS
Dividends and capital gains, if any, are distributed once per year. The Fund
makes distributions of any net realized long-term capital gains and distributes
virtually all of its net income (interest and dividends less expenses) as well
as any capital gains realized from the sale of its holdings. Dividends and
distributions are automatically reinvested in additional shares on payment dates
at the ex-dividend net asset value, unless cash payments are requested on the
account application or in writing to the Transfer Agent. All shareholders on the
record date are entitled to the dividend.
TAXES
Investment earnings (dividends and capital gains) are taxable in the year in
which they were declared, not paid (whether they are received in cash or
reinvested in shares) and are distributed to shareholders. Any dividends and
capital gains you receive are taxable. So are gains and losses you receive when
you sell your shares as in any mutual fund. If you buy shares shortly before or
on the "record date", you could receive a portion of the money invested as a
taxable distribution. You will be sent timely information for your tax filing
needs. We recommend that you consult with a tax adviser about any possible tax
consequences on your account.
HOW TO BUY SHARES
Shares of the Fund are sold every day the New York Stock Exchange is open for
business, at the Fund's net asset value per share next calculated after receipt
of the purchase order in proper form. The Fund reserves the right to reject any
purchase request. Investors may be charged a fee if they effect transactions
through a broker or agent.
MINIMUM INVESTMENT
The minimum initial investment in the Fund is $3,000. The minimum initial
investment to open an IRA account is $2,000. The minimum investment may also be
waived for certain other types of retirement accounts and direct deposit
accounts.
Lindbergh Funds Prospectus (PEA#1) Page 13 of 18
<PAGE>
OPENING AN ACCOUNT
An account may be opened by mail or bank wire, as follows:
By Mail
To open a new account by mail:
(a) Complete and sign the account application.
(b) Enclose a check payable to the Lindbergh Signature Fund.
(c) Mail the application and the check to the Fund's Transfer Agent, Unified
Fund Services, Inc. (the "Transfer Agent") at the following address:
The Lindbergh Funds
c/o Unified Fund Services, Inc.
P.O. Box 6110
Indianapolis, Indiana 46206-6110
By Wire
To open a new account by wire, call the Transfer Agent. A representative will
assist you to obtain an account application by fax (or mail), which must be
completed, signed and faxed (or mailed) to the Transfer Agent before payment by
wire may be made. Then, request your financial institution to wire immediately
available funds to:
UMB Bank, N.A., Kansas City, MO 64106
ABA# 101000695
For credit to: Lindbergh Signature Fund
A/C#9870983818
For further credit: (Shareholder Name and Account Number)
The order is considered received when UMB Bank, N.A., the Trust's custodian (the
"Custodian"), receives payment by wire. The completed account application must
be mailed to the Transfer Agent on the same day the wire payment is made. See
"Opening an Account -- By Mail" above. Financial institutions may charge a fee
for wire transfers.
SUBSEQUENT INVESTMENTS
Once an account is open, additional purchases of Fund shares may be made at any
time in minimum amounts of $100.
By Mail
Send a check payable to the Lindbergh Signature Fund to:
Lindbergh Funds Prospectus (PEA#1) Page 14 of 18
<PAGE>
The Lindbergh Funds
c/o Unified Fund Services, Inc.
P.O. Box 6110
Indianapolis, Indiana 46206-6110
The Trust will charge a $15 fee against your account for any check returned for
insufficient funds. You also will be responsible for any losses suffered by the
Trust as a result.
By Wire
Wire the funds as described above under "Opening an Account -- By Wire."
Shareholders need to call the Transfer Agent before wiring funds.
By ACH
Automated Clearing House ("ACH") is the electronic transfer of funds directly
between an account with a financial institution and the Fund. Once an account is
open, shares may be purchased or redeemed through ACH. ACH can be in minimum
amounts of $100.
In order to use the ACH service, the ACH authorization section of the account
application must be completed. For existing accounts, an ACH Authorization Form
may be obtained by calling the Transfer Agent.
To order a purchase by ACH, call the Transfer Agent. There are no charges for
ACH transactions imposed by the Fund or the Transfer Agent. ACH transactions are
completed approximately two business days following the placement of the
transfer order. Allow at least two weeks for preparation before using ACH.
ACH may be used to make direct deposits into a Fund account of part or all of
recurring payments made to a shareholder by his or her employer (corporate,
federal, military, or other) or by the Social Security Administration.
By Phone Order
Once an account is open, shares may be purchased at a certain day's price by
calling the Transfer Agent, before the close of regular trading on the New York
Stock Exchange (currently 4:00 p.m., Eastern time) on that day. Orders must be
for $1,000 or more and may not be for an amount greater than twice the value of
the existing account at the time the order is placed.
Payment by check or wire must be received within three business days after the
order is placed, or the order will be canceled and you will be responsible for
any resulting loss to the Fund. Payment of telephone orders by check may not be
mailed to the Transfer Agent's Post Office Box address, but must be mailed to
the Transfer Agent at:
The Lindbergh Funds
c/o Unified Fund Services, Inc.
431 North Pennsylvania Street
Indianapolis, Indiana 46204
Payment must be accompanied by the order number given at the time the order is
placed. A written confirmation with complete purchase information will be sent
to the shareholder of record shortly after payment is received.
Lindbergh Funds Prospectus (PEA#1) Page 15 of 18
<PAGE>
HOW TO REDEEM SHARES
Shares of the Fund may be redeemed on any day on which the Fund computes its net
asset value. Shares are redeemed at their net asset value next determined after
the Transfer Agent receives the redemption request in proper form. Redemption
requests may be made by mail or by telephone.
BY MAIL
You may redeem shares by mailing a written request to:
The Lindbergh Funds
c/o Unified Fund Services, Inc.
P.O. Box 6110
Indianapolis, Indiana 46206-6110
Written requests must state the shareholder's name, the name of the Fund, the
account number and the shares or dollar amount to be redeemed and be signed
exactly as the shares are registered.
SIGNATURES REQUIRED
Shareholders requesting a redemption of $5,000 or more, or a redemption of any
amount payable to a person other than the shareholder of record or to be sent to
an address other than that on record with the Trust, must have all signatures on
written redemption requests guaranteed.
The Transfer Agent will accept signatures guaranteed by a financial institution
whose deposits are insured by the FDIC; a member of the New York, American,
Boston, Midwest, or Pacific Stock Exchange; or any other "eligible guarantor
institution," as defined in the Securities Exchange Act of 1934.
The Transfer Agent will not accept signatures guaranteed by a notary public. The
Transfer Agent has adopted standards for accepting signature guarantees from the
above institutions. The Trust may elect in the future to limit eligible
signature guarantors to institutions that are members of a signature guarantee
program. The Trust and its Transfer Agent reserve the right to amend these
standards at any time without notice.
Redemption requests by corporate and fiduciary shareholders must be accompanied
by appropriate documentation establishing the authority of the person seeking to
act on behalf of the account. Forms of resolutions and other documentation to
assist in compliance with the Transfer Agent's procedures may be obtained by
calling the Transfer Agent.
BY PHONE
You may also redeem shares by telephone by calling the Transfer Agent. In order
to make redemption requests by telephone, the Telephone Privileges section of
the account application must be completed. For existing accounts, a Telephone
Privileges form may be obtained by calling the Transfer Agent.
Telephone redemptions may be requested only if the proceeds are to be issued to
the shareholder of record and mailed to the address on record with the Fund.
Upon request, proceeds of $100 or more may be transferred by ACH, and proceeds
of $1,000 or more may be transferred by wire, in either case to the account
stated on the account application. You will be charged for outgoing wires.
Lindbergh Funds Prospectus (PEA#1) Page 16 of 18
<PAGE>
Telephone privileges and account designations may be changed by sending the
Transfer Agent a written request with all signatures guaranteed as described
above.
The Transfer Agent requires personal identification before accepting any
redemption request by telephone, and telephone redemption instructions may be
recorded. If reasonable procedures are not followed by the Trust, it may be
liable for losses due to unauthorized or fraudulent telephone instructions. In
the event of drastic economic or market changes, you may experience difficulty
in redeeming by telephone. If such a case should occur, redemption by mail
should be considered.
RECEIVING PAYMENT
The Trust normally will make payment for all shares redeemed within three
business days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the Securities and Exchange
Commission. A requested wire of redemption proceeds normally will be effected
the following business day, but in no event more than three business days, after
receipt of the redemption request in proper form. However, when shares are
purchased by check or through ACH, the proceeds from the redemption of those
shares are not available, and the shares may not be exchanged, until the
purchase check or ACH transfer has been converted to federal funds, which could
take up to 15 calendar days.
SHAREHOLDER SERVICES
Each time shares are purchased or redeemed, a statement will be mailed showing
the details of the transaction and the number and value of shares owned after
the transaction. Transactions made in brokerage sweep accounts will be detailed
on a monthly brokerage statement. Share certificates are not issued. Financial
reports showing investments, income and expenses of the Fund are mailed to
shareholders semi-annually. After the end of each year, shareholders receive a
statement of all their transactions for the year.
The Trust provides a number of plans and services to meet the special needs of
certain investors, including:
* an automatic investment plan,
* a payroll deduction plan, and,
* a systematic withdrawal plan to provide monthly payments.
Brochures describing these plans and related charges and account applications
are available free from the Transfer Agent.
Lindbergh Funds Prospectus (PEA#1) Page 17 of 18
<PAGE>
[ back cover page]
OTHER FUND INFORMATION
Types of Information
If you'd like more information about the Lindbergh Funds, the following
documents are available free upon request:
Annual/Semiannual Additional information about the Fund's s
Report to Shareholders investments is available in the Fund'annual and
semiannual reports to shareholders. In these
reports, you will find adiscussion of the market
conditions and investment strategies that
significantly affected the Fund's performance
during the most recent fiscal year.
Statement of Additional The SAI provides more detailed information about
Information ("SAI") the Fund.
The current annual and semiannual reports and the SAI are incorporated by
reference into (and are thus legally a part of) this prospectus.
Where You Can Get This Information
By Telephone Call 1-888-505-6361 Monday through Friday, 7 a.m. to
4 p.m. Eastern Time.
You may also call this number for shareholder inquires.
Via the Internet Visit the Securities and Exchange Commission Web site
at "www.SEC.Gov".
From the You can review and copy information about the Fund
Securities and (including the SAI) at the SEC's Public Reference Room
Exchange in Washington, D.C. To find out more about this public
Commission service, call the SEC at 1-800-SEC-0330. You can also
receive copies of this information, for a fee, by
writing the Public Reference Section, Securities and
Exchange Commission, Washington, DC 20549-6009.
By Mail Specify the document you are requesting when writing to
us at:
The Lindbergh Funds
c/o Unified Fund Services, Inc.
P.O. Box 6110
Indianapolis, Indiana 46206-6110
Fund's Investment Company Act
File Number: 811-9437
Lindbergh Funds Prospectus (PEA#1) Page 18 of 18
<PAGE>
(Logo)
Lindbergh
Funds
LINDBERGH SIGNATURE FUND
STATEMENT OF ADDITIONAL INFORMATION
September ___, 1999
This Statement of Additional Information is not a prospectus. It should be read
in conjunction with the current prospectus of Lindbergh Funds dated September
___ , 1999. To obtain a copy of the prospectus, call 1-888-505-6361 or write to:
The Lindbergh Funds, c/o Unified Fund Services, Inc., P.O. Box 6110,
Indianapolis, Indiana 46206-6110.
<PAGE>
TABLE OF CONTENTS
DESCRIPTION OF THE TRUST.....................................................3
INVESTMENT POLICIES..........................................................4
ADDITIONAL INFORMATION ABOUT
FUND INVESTMENTS AND RISK CONSIDERATIONS................................5
Use of Other Mutual Funds ..............................................5
Forward Commitments and Reverse Repurchase Agreements...................6
Leveraging..............................................................6
Put and Call Options....................................................6
Purchasing Options......................................................6
Writing Options.........................................................7
Combined Positions......................................................7
Correlation of Price Changes............................................7
Liquidity of Options and Futures Contracts..............................8
OTC Options.............................................................8
Foreign Currency Transactions...........................................8
Segregated Assets and Covered Positions.................................10
Illiquid Investments....................................................11
Restricted Securities...................................................11
Risks of International Investing........................................11
Risk of High Yield Securities or Funds..................................14
PORTFOLIO TRANSACTIONS.......................................................15
PORTFOLIO TURNOVER...........................................................16
MANAGEMENT OF THE TRUST......................................................16
PURCHASE AND REDEMPTION......................................................19
DETERMINATION OF NET ASSET VALUE.............................................20
TAX STATUS...................................................................20
PERFORMANCE INFORMATION......................................................20
PERFORMANCE COMPARISONS......................................................21
CUSTODIAN....................................................................22
TRANSFER AGENT, FUND ACCOUNTING AGENT, AND ADMINISTRATOR.....................22
INDEPENDENT ACCOUNTANTS AND COUNSEL..........................................23
FINANCIAL STATEMENTS.........................................................23
<PAGE>
DESCRIPTION OF THE TRUST
HISTORY OF THE TRUST
Lindbergh Funds (the "Trust") is an open-end management investment company and
is a voluntary association of the type known as a "business trust" organized
under the laws of the Commonwealth of Massachusetts on June 16, 1999. There is
currently only one series within the Trust, the Lindbergh Signature Fund (the
"Fund"). It represents a separate non-diversified portfolio of securities.
CHARACTERISTICS OF TRUST SHARES
The Trustees have exclusive power, without the requirement of shareholder
approval, to issue series of shares without par value, each series representing
interests in a separate portfolio, or divide the shares of any portfolio into
classes, each class having such different dividend, liquidation, voting and
other rights as the Trustees may determine, and may establish and designate the
specific classes of shares of each portfolio. Before establishing a new class of
shares in an existing portfolio, the Trustees must determine that the
establishment and designation of separate classes would not adversely affect the
rights of the holders of the initial or previously established and designated
class or classes.
The assets received by the Trust from the issue or sale of shares of the Fund,
and all income, earnings, profits and proceeds thereof, subject only to the
rights of creditors, are separately allocated to the Fund. They constitute the
underlying assets of that Fund, are required to be segregated on the books of
accounts, and are to be charged with the expenses with respect to the Fund. Any
general expenses of the Trust, not readily identifiable as belonging to a
particular Fund, shall be allocated by or under the direction of the Board of
Trustees in such manner as the Board determines to be fair and equitable.
Each share of the Fund represents an equal proportionate interest in that Fund
with each other share and is entitled to such dividends and distributions, out
of the income belonging to that Fund, as are declared by the Board. Upon
liquidation of the Trust, shareholders of the Fund are entitled to share pro
rata in the net assets belonging to the Fund available for distribution.
Under the Trust's Master Trust Agreement, no annual or regular meeting of
shareholders is required. In addition, after the Trustees were initially elected
by the shareholders, the Trustees became a self-perpetuating body. Thus, there
will ordinarily be no shareholder meetings unless otherwise required by the
Investment Company Act of 1940 (the "1940 Act").
On any matter submitted to shareholders, the holder of each share is entitled to
one vote per share (with proportionate voting for fractional shares). On matters
affecting any individual Fund, a separate vote of that Fund would be required.
Shareholders of any Fund are not entitled to vote on any matter which does not
affect their Fund but which requires a separate vote of another Fund.
Shares do not have cumulative voting rights, which means that in situations in
which shareholders elect Trustees, holders of more than 50% of the shares voting
for the election of Trustees can elect 100% of the Trust's Trustees, and the
holders of less than 50% of the shares voting for the election of Trustees will
not be able to elect any person as a Trustee.
Shares have no preemptive, subscription or conversion rights.
Lindbergh Funds - Statement of Additional Information (PEA#1) Page 3 of 26
<PAGE>
Trust shares are fully paid and non-assessable; and, there are no restrictions
on the right of shareholders to retain or dispose of their shares.
SHAREHOLDER LIABILITY
Under Massachusetts law, the shareholders of the Trust could, under certain
circumstances, be held personally liable for the obligations of the Trust.
However, the Master Trust Agreement disclaims shareholder liability for acts or
obligations of the Trust and requires that notice of such disclaimer be given in
each agreement, obligation or instrument entered into or executed by the Trust
or the Trustees. The Master Trust Agreement provides for indemnification out of
the Trust's property for all losses and expenses of any shareholder held
personally liable for the obligations of the Trust. Thus, the risk of a
shareholder incurring financial loss on account of shareholder liability is
limited to circumstances in which the Trust itself would be unable to meet its
obligations.
INVESTMENT POLICIES
Lindbergh Signature Fund will not change any of the following investment
restrictions without the affirmative vote of a majority of the outstanding
voting securities of the Fund, which, as used herein, means the lesser of (i)
67% of the Fund's outstanding shares present at a meeting at which more than 50%
of the outstanding shares of the Fund are represented either in person or by
proxy, or (ii) more than 50% of the Fund's outstanding shares.
The Fund may not
(1) Issue senior securities.
(2) Borrow money, except that the Fund may (i) borrow not in excess of 33 1/3%
of the total assets of the Fund from banks as a temporary measure for
extraordinary purposes, and (ii) engage in transactions involving futures,
options and the like on margin.
(3) Underwrite the securities of other issuers.
(4) Purchase or sell real property (including limited partnership interests,
but excluding readily marketable interests in real estate investment trusts
or readily marketable securities or companies which invest in real estate).
(5) Engage in the purchase or sale of commodities or commodity contracts,
except that the Fund may invest in financial and currency futures contracts
and related options for bona fide hedging purposes and to provide exposure
while attempting to reduce transaction costs.
(6) Lend its assets, except that purchases of debt securities in furtherance of
the Fund's investment objectives will not constitute lending of assets and
except that the Fund may lend portfolio securities with an aggregate market
value of not more than one-third of the Fund's net assets.
(7) Purchase any security on margin, except that it may obtain such short-term
credits as are necessary for clearance of securities transactions. This
restriction does not apply to bona fide hedging activity utilizing
financial futures and related options.
(8) Make short sales in situations where the security is not owned by the Fund.
(9) Acquire more than 10% of the voting securities of any one issuer.
Lindbergh Funds - Statement of Additional Information (PEA#1) Page 4 of 26
<PAGE>
(10) With respect to 50% of the Fund, invest more than 5% of the value of its
total assets in securities of any one issuer, except such limitation shall
not apply to obligations issued or guaranteed by the United States
Government, its agencies or instrumentalities.
The following investment restrictions may be changed by the Board of Trustees
without a shareholder vote:
The Fund may not
(1) Invest in companies for the purpose of exercising control or management.
(2) Hypothecate, pledge, or mortgage any of its assets, except to secure loans
as a temporary measure for extraordinary purposes and except as may be
required to collateralize letters of credit to secure state surety bonds.
(3) Invest more than 15% of its net assets in illiquid securities.
(4) Invest in oil, gas or other mineral leases.
(5) In connection with bona fide hedging activities, invest more than 5% of its
assets as initial margin deposits or premiums for futures contracts and
provided the Fund may enter into futures contracts and option transactions
only to the extent that obligations under such contracts or transactions
represent not more than 100% of the Fund's assets.
If a percentage restriction is adhered to at the time of investment, a later
increase or decrease in percentage, resulting from a change in values of
portfolio securities or amount of net assets, will not be considered a violation
of any of the foregoing restrictions.
Fund investment policy does not require the Adviser to concentrate investments
in a particular industry or group of industries. It is Fund policy, however,
that if a particular industry represents 25% or more of total assets, then
officers of the Trust will prepare, file and distribute supplement disclosure to
shareholders and prospective investors identifying the industry and related
risks.
ADDITIONAL INFORMATION ABOUT
FUND INVESTMENTS AND RISK CONSIDERATIONS
This section contains a more detailed discussion of some of the investments the
Fund may make and some of the techniques it may use, as described in the
Prospectus.
USE OF OTHER MUTUAL FUNDS
The Fund may invest in the securities of other investment companies ("underlying
funds"). Except for federal regulations limiting the amount that can be invested
in any single investment company, the Fund itself is under no restriction as to
size or kind of investments it can make in underlying funds. The Adviser,
however, expects to generally limit investments in underlying funds to those
that invest primarily in fixed income securities. With such investments,
shareholders pay not only for the operational costs of the Fund, but they also
indirectly pay a portion of the operational costs of the other fund. Such
double-tiered costs would not be incurred if shareholders owned the underlying
fund directly.
Lindbergh Funds - Statement of Additional Information (PEA#1) Page 5 of 26
<PAGE>
FORWARD COMMITMENTS AND REVERSE REPURCHASE AGREEMENTS
The Fund will direct its Custodian to place cash or U.S. government obligations
in a separate account of the Fund in an amount equal to the commitments of the
Fund to purchase or repurchase securities as a result of its forward commitment
or reverse repurchase agreement obligations. With respect to forward commitments
to sell securities, the Fund will direct its Custodian to place the securities
in a separate account. The Fund will direct its Custodian to segregate such
assets for when, as and if issued commitments only when it determines that
issuance of the security is probable. When a separate account is maintained, the
securities deposited in the separate account will be valued daily at market for
the purpose of determining the adequacy of the securities in the account. To the
extent funds are in a separate account, they will not be available for new
investment or to meet redemptions.
Commitments to purchase securities on a when, as and if issued basis will not be
recognized in the portfolio of the Fund until the Adviser determines that
issuance of the security is probable. At such time, the Fund will record the
transaction and, in determining its net asset value, will reflect the value of
the security daily.
Securities purchased on a forward commitment basis and subject to reverse
repurchase agreements are subject to changes in market value based upon the
public's perception of the creditworthiness of the issuer and changes in the
level of interest rates (which will generally result in all of those securities
changing in value in the same way; i.e., all those securities experiencing
appreciation when interest rates decline and depreciation when interest rates
rise). Therefore, if in order to achieve a higher level of income, the Fund
remains substantially fully invested at the same time that it has purchased on a
forward commitment basis or entered into reverse repurchase transactions, there
will be a possibility that the market value of the Fund's assets will have
greater fluctuation.
LEVERAGING
Leveraging the Fund creates an opportunity for increased net income but, at the
same time, creates special risk considerations. For example, leveraging may
exaggerate changes in the net asset value of Fund shares and in the yield on the
Fund's portfolio. Although the principal of such borrowings will be fixed, the
Fund's assets may change in value during the time the borrowing is outstanding.
Leveraging will create interest expenses for the Fund which can exceed the
income from the assets retained. To the extent the income derived from
securities purchased with borrowed funds exceeds the interest the Fund will have
to pay, the Fund's net income will be greater than if leveraging were not used.
Conversely, if the income from the assets retained with borrowed funds is not
sufficient to cover the cost of leveraging, the net income of the Fund will be
less than if leveraging were not used, and therefore the amount available for
distribution to shareholders will be reduced.
PUT AND CALL OPTIONS
The Fund may purchase put and call options.
PURCHASING OPTIONS
By purchasing a put option, the Fund obtains the right (but not the obligation)
to sell the option's underlying instrument at a fixed "strike" price. In return
for this right, the Fund pays the current market price for the option (known as
the option premium). Options have various types of underlying instruments,
including specific securities, indices of securities prices, and futures
contracts. The Fund may terminate its position in a put option it has purchased
by allowing it to expire or by exercising the option. If the option is allowed
to expire, the Fund will lose the entire premium it paid. If the Fund exercises
the option, it completes the sale of the underlying instrument at the "strike"
price. The Fund also may terminate a put option position by closing it out in
the secondary market at its current price, if a liquid secondary market exists.
Lindbergh Funds - Statement of Additional Information (PEA#1) Page 6 of 26
<PAGE>
The buyer of a typical put option can expect to realize a gain if security
prices fall substantially. However, if the underlying instrument's price does
not fall enough to offset the cost of purchasing the option, a put buyer can
expect to suffer a loss (limited to the amount of the premium paid, plus related
transaction costs).
The features of call options are essentially the same as those of put options,
except that the purchaser of a call option obtains the right to purchase, rather
than sell, the underlying instrument at the option's "strike" price. A call
buyer typically attempts to participate in potential price increases of the
underlying instrument with risk limited to the cost of the option if security
prices fall. At the same time, the buyer can expect to suffer a loss if the
underlying prices do not rise sufficiently to offset the cost of the option.
WRITING OPTIONS
When the Fund writes a put option, it takes the opposite side of the transaction
from the option's purchaser. In return for receipt of the premium, the Fund
assumes the obligation to pay the "strike" price for the option's underlying
instrument if the other party to the option chooses to exercise it. When writing
an option on a futures contract the Fund will be required to make margin
payments for futures contracts. The Fund may seek to terminate its position in a
put option it writes before exercise by closing out the option in the secondary
market at its current price. If the secondary market is not liquid for a put
option the Fund has written, however, the Fund must continue to be prepared to
pay the "strike" price while the option is outstanding, regardless of price
changes, and must continue to segregate assets to cover its position.
If the underlying prices rise, a put writer would generally expect to profit.
Although its gain would be limited to the amount of the premium it received. If
security prices remain the same over time, the writer also may profit, because
it should be able to close out the option at a lower price. If the underlying
prices fall, the put writer would expect to suffer a loss. This loss should be
less than the loss from purchasing the underlying instrument directly, however,
because the premium received for writing the option should mitigate the effects
of the decline.
Writing a call option obligates the Fund to sell or deliver the option's
underlying instrument, in return for the "strike" price, upon exercise of the
option. The characteristics of writing call options are similar to those of
writing put options, except that writing calls generally is a profitable
strategy if the underlying prices remain the same or fall. Through receipt of
the option premium, a call writer mitigates the effects of a price decline. At
the same time, because a call writer must be prepared to deliver the underlying
instrument in return for the "strike" price, even if its current value is
greater, a call writer gives up some ability to participate in the underlying
price increases.
COMBINED POSITIONS
The Fund may purchase and write options in combination with each other, or in
combination with futures or forward contracts, to adjust the risk and return
characteristics of the overall position. For example, the Fund may purchase a
put option and write a call option on the same underlying instrument, in order
to construct a combined position whose risk and return characteristics are
similar to selling a futures contract. Another possible combined position would
involve writing a call option at one "strike" price and buying a call option at
a lower price, in order to reduce the risk of the written call option in the
event of a substantial price increase. Because combined options positions
involve multiple trades, they result in higher transaction costs and may be more
difficult to open and close out.
CORRELATION OF PRICE CHANGES
Because there are a limited number of types of exchange-traded options and
futures contracts, it is likely that the standardized contracts available will
not match the Fund's current or anticipated investments exactly. The Fund may
Lindbergh Funds - Statement of Additional Information (PEA#1) Page 7 of 26
<PAGE>
invest in options and futures contracts based on securities with different
issuers, maturities, or other characteristics from the securities in which it
typically invests.
Options and futures prices also can diverge from the prices of their underlying
instruments or precious metals, even if the underlying instruments or precious
metals match the Fund's investment well. Options and futures prices are affected
by such factors as current and anticipated short-term interest rates, changes in
volatility of the underlying instrument or precious metal, and the time
remaining until expiration of the contract, which may not affect the security or
the precious metal prices the same way. Imperfect correlation also may result
from: differing levels of demand in the options and futures markets and the
securities or precious metal markets, structural differences in how options and
futures and securities or precious metal are traded, or imposition of daily
price fluctuation limits or trading halts. The Fund may purchase or sell options
and futures contracts with a greater or lesser value than the securities or
precious metal it wishes to hedge or intends to purchase in order to attempt to
compensate for differences in volatility between the contract and the securities
or precious metals, although this may not be successful in all cases. If price
changes in the Fund's options or futures positions are poorly correlated with
its other investments, the positions may fail to produce anticipated gains or
result in losses that are not offset by gains in other investments.
LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS
There is no assurance a liquid secondary market will exist for any particular
options or futures contract at any particular time. Options may have relatively
low trading volume and liquidity if their "strike" prices are not close to the
underlying instrument or precious metal's current price. In addition, exchanges
may establish daily price fluctuation limits for options and futures contracts,
and may halt trading if a contract's price moves upward or downward more than
the limit in a given day. On volatile trading days when the price fluctuation
limit is reached or a trading halt is imposed, it may be impossible for the Fund
to enter into new positions or close out existing positions. If the secondary
market for a contract is not liquid because of price fluctuation limits or
otherwise, it could prevent prompt liquidation of unfavorable positions, and
potentially could require the Fund to continue to hold a position until delivery
or expiration regardless of changes in its value. As a result, the Fund's access
to other assets held to cover its options or futures positions also could be
impaired. In addition, one of the requirements for qualification as a regulated
investment company for tax purposes in that less than 30% of the Fund's gross
income be derived from gains from the sale or other disposition of securities
held for less than three months. Accordingly, the Fund may be restricted in
effecting closing transactions within three months after entering into an option
or futures contract.
OTC OPTIONS
Unlike exchange-traded options, which are standardized with respect to the
underlying instrument, expiration date, contract size, and "strike" price, the
terms of over-the-counter options i.e., options not traded on exchanges ("OTC
options"), generally are established through negotiation with the other party to
the option contract. While this type of arrangement allows the Fund greater
flexibility to tailor an option to its needs, OTC options generally involve
greater credit risk than exchange-traded options, which are guaranteed by the
clearing organization of the exchanges where they are traded. The risk of
illiquidity also is greater with OTC options, since these options generally can
be closed out only by negotiation with the other party to the option.
FOREIGN CURRENCY TRANSACTIONS
Investments in foreign companies usually involve use of currencies of foreign
countries. The Fund also may hold cash and cash-equivalent investments in
foreign currencies. The value of the Fund's assets as measured in U.S. dollars
will be affected by changes in currency exchange rates and exchange control
regulations. The Fund may, as appropriate markets are developed, but is not
required to, engage in currency transactions including cash market purchases at
the spot rates, forward currency contracts, exchange listed currency futures,
exchange listed and over-the-counter options
Lindbergh Funds - Statement of Additional Information (PEA#1) Page 8 of 26
<PAGE>
on currencies, and currency swaps for two purposes. One purpose is to settle
investment transactions. The other purpose is to try to minimize currency risks.
All currency transactions involve a cost. Although foreign exchange dealers
generally do not charge a fee, they do realize a profit based on the difference
(spread) between the prices at which they are buying and selling various
currencies. Commissions are paid on futures options and swaps transactions, and
options require the payment of a premium to the seller.
A forward contract involves a privately negotiated obligation to purchase or
sell at a price set at the time of the contract with delivery of the currency
generally required at an established future date. A futures contract is a
standardized contract for delivery of foreign currency traded on an organized
exchange that is generally settled in cash. An option gives the right to enter
into a contract. A swap is an agreement based on a nominal amount of money to
exchange the differences between currencies.
The Fund will generally use spot rates or forward contracts to settle a security
transaction or handle dividend and interest collection. When the Fund enters
into a contract for the purchase or sale of a security denominated in a foreign
currency or has been notified of a dividend or interest payment, it may desire
to lock in the price of the security or the amount of the payment in dollars. By
entering into a spot rate or forward contract, the Fund will be able to protect
itself against a possible loss resulting from an adverse change in the
relationship between different currencies from the date the security is
purchased or sold to the date on which payment is made or received or when the
dividend or interest is actually received.
The Fund may use forward or futures contracts, options, or swaps when the
investment manager believes the currency of a particular foreign country may
suffer a substantial decline against another currency. For example, it may enter
into a currency transaction to sell, for a fixed amount of dollars, the amount
of foreign currency approximating the value of some or all of the Fund's
portfolio securities denominated in such foreign currency. The precise matching
of the securities transactions and the value of securities involved generally
will not be possible. The projection of short-term currency market movements is
extremely difficult and successful execution of a short-term strategy is highly
uncertain.
The Fund may cross-hedge currencies by entering into transactions to purchase or
sell one or more currencies that are expected to decline in value relative to
other currencies in which the Fund has (or expects to have) portfolio exposure.
The Fund may engage in proxy hedging. Proxy hedging is often used when the
currency to which the Fund's portfolio is exposed is difficult to hedge. Proxy
hedging entails entering into a forward contract to sell a currency whose
changes in value are generally considered to be linked to a currency or
currencies in which some or all of the Fund's portfolio securities are or are
expected to be denominated, and simultaneously buy U.S. dollars. The amount of
the contract would not exceed the value of the Fund's securities denominated in
linked securities.
The Fund will not enter into a currency transaction or maintain an exposure as a
result of the transaction when it would obligate the Fund to deliver an amount
of foreign currency in excess of the value of the Fund's portfolio securities or
other assets denominated in that currency. The Fund will designate cash or
securities in an amount equal to the value of the Fund's total assets committed
to consummating the transaction. If the value of the securities declines,
additional cash or securities will be designated on a daily basis so that the
value of the cash or securities will equal the amount of the Fund's commitment.
On the settlement date of the currency transaction, the Fund may either sell
portfolio securities and make delivery of the foreign currency or retain the
securities and terminate its contractual obligation to deliver the foreign
currency by purchasing an offsetting position. It is impossible to forecast what
the market value of portfolio securities will be on the settlement date of a
currency transaction. Accordingly, it may be necessary for the Fund to buy
additional foreign currency on the spot market (and bear the expense of such
purchase) if the market value of the securities are less than
Lindbergh Funds - Statement of Additional Information (PEA#1) Page 9 of 26
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the amount of foreign currency the Fund is obligated to deliver and a decision
is made to sell the securities and make delivery of the foreign currency.
Conversely, it may be necessary to sell on the spot market some of the foreign
currency received on the sale of the portfolio securities if its market value
exceeds the amount of foreign currency the Fund is obligated to deliver. The
Fund will realize gains or losses on currency transactions.
The Fund may also buy put options and write covered call options on foreign
currencies to try to minimize currency risks. The risk of buying an option is
the loss of premium. The risk of selling (writing) an option is that the
currency option will minimize the currency risk only up to the amount of the
premium, and then only if rates move in the expected direction. If this does not
occur, the option may be exercised and the Fund would be required to buy the
underlying currency at the loss which may not be offset by the amount of the
premium. Through the writing of options on foreign currencies, the Fund may also
be required to forego all or a portion of the benefits which might otherwise
have been obtained from favorable movements on exchange rates. All options
written on foreign currencies will be covered; that is, the Fund will own
securities denominated in the foreign currency, hold cash equal to its
obligations or have contracts that offset the options.
The Fund may construct a synthetic foreign currency investment, sometimes called
a structured note, by (a) purchasing a money market instrument which is a note
denominated in one currency, generally U.S. dollars, and (b) concurrently
entering into a forward contract to deliver a corresponding amount of that
currency in exchange for a different currency on a future date and at a
specified rate of exchange. Because the availability of a variety of highly
liquid short-term U.S. dollar market instruments, or notes, a synthetic money
market position utilizing such U.S. dollar instruments may offer greater
liquidity than direct investment in foreign currency.
SEGREGATED ASSETS AND COVERED POSITIONS
When purchasing a stock index futures contract, selling an uncovered call
option, or purchasing securities on a when-issued or delayed delivery basis, the
Fund will restrict cash, which may be invested in repurchase obligations or
liquid securities. When purchasing a stock index futures contract, the amount of
restricted cash or liquid securities, when added to the amount deposited with
the broker as margin, will be at least equal to the market value of the futures
contract and not less than the market price at which the futures contract was
established. When selling an uncovered call option, the amount of restricted
cash or liquid securities, when added to the amount deposited with the broker as
margin, will be at least equal to the value of securities underlying the call
option and not less than the strike price of the call option. When purchasing
securities on a when-issued or delayed delivery basis, the amount of restricted
cash or liquid securities will be at least equal to the Fund's when-issued or
delayed delivery commitments.
The restricted cash or liquid securities will either be identified as being
restricted in the Fund's accounting records or physically segregated in a
separate account at the Fund's custodian. For the purpose of determining the
adequacy of the liquid securities which have been restricted, the securities
will be valued at market or fair value. If the market or fair value of such
securities declines, additional cash or liquid securities will be restricted on
a daily basis so that the value of the restricted cash or liquid securities,
when added to the amount deposited with the broker as margin, equals the amount
of such commitments by the Fund.
Fund assets need not be segregated if the Fund "covers" the futures contract or
call option sold. For example, the Fund could cover a futures or forward
contract which it has sold short by owning the securities or currency underlying
the contract. The Fund may also cover this position by holding a call option
permitting the Fund to purchase the same futures or forward contract at a price
no higher than the price at which the sell position was established. The Fund
could cover a call option which it has sold by holding the same currency or
security (or, in the case of a stock index, a portfolio of stock substantially
replicating the movement of the index) underlying the call option. The Fund may
also cover by holding a separate call option of the same security or stock index
with a strike price no higher than the strike price of the call option sold by
the Fund. The Fund could cover a call option which it has sold on a futures
contract by entering into a long position in the same futures contract at a
price no higher than the strike price of the call option
Lindbergh Funds - Statement of Additional Information (PEA#1) Page 10 of 26
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or by owning the securities or currency underlying the futures contract. The
Fund could also cover a call option which it has sold by holding a separate call
option permitting it to purchase the same futures contract at a price no higher
than the strike price of the call option sold by the Fund.
ILLIQUID INVESTMENTS
Illiquid investments are investments that cannot be sold or disposed of in the
ordinary course of business at approximately the prices at which they are
valued. Under the supervision of the Board of Trustees, the Adviser determines
the liquidity of the Fund's investments and, through reports from the Adviser,
the Board monitors trading activity in illiquid investments. In determining the
liquidity of the Fund's investments, the Adviser may consider various factors,
including (i) the frequency of trades and quotations, (ii) the number of dealers
and prospective purchasers in the marketplace, (iii) dealer undertakings to make
a market, (iv) the nature of the security (including any demand or tender
features), and (v) the nature of the marketplace for trades (including the
ability to assign or offset the Fund's rights and obligations relating to the
investment). Investments currently considered by the Trust to be illiquid
include repurchase agreements not entitling the holder to payments of principal
and interest within seven days, over-the-counter options, and restricted
securities. However, with respect to OTC options which the Fund writes, all or a
portion of the value of the underlying instrument may be illiquid depending on
the assets held to cover the option and the nature and terms of any agreement
the Fund may have to close out the option before expiration. In the absence of
market quotations, illiquid investments are priced at fair value as determined
in good faith by the Adviser, subject to review of the Board of Trustees. If,
through a change in values, net assets or other circumstances, the Fund were in
a position where more than 15% of its net assets were invested in illiquid
securities, it would seek to take appropriate steps to protect liquidity.
RESTRICTED SECURITIES
Restricted securities generally can be sold in privately negotiated
transactions, pursuant to an exemption from registration under the Securities
Act of 1933, or in a registered public offering. Where the registration is
required, the Fund holding restricted securities may be obligated to pay all or
part of the registration expense and a considerable period may elapse between
the time it decides to seek registration and the time the Fund may be permitted
to sell a security under an effective registration statement. If, during such a
period, adverse market conditions were to develop, the Fund might obtain a less
favorable price than prevailed when it decided to seek registration of the
security.
RISKS OF INTERNATIONAL INVESTING
Political, Social and Economic Risks
Investing in securities of non-U.S. companies may entail additional risks due to
the potential political, social and economic instability of certain countries
and the risks of expropriation, nationalization, confiscation or the imposition
of restrictions on foreign investment, convertibility of currencies into U.S.
dollars and on repatriation of capital invested. In the event of such
expropriation, nationalization or other confiscation by any country, the Fund
could lose its entire investment in any such country.
Religious, Political, and Ethnic Instability
Certain countries in which the Fund may invest may have groups that advocate
radical religious or revolutionary philosophies or support ethnic independence.
Any disturbance on the part of such individuals could carry the potential for
widespread destruction or confiscation of property owned by individuals and
entities foreign to such country and could cause the loss of the Fund's
investment in those countries. Instability may also result from, among other
things: (i) authoritarian governments or military involvement in political and
economic decision-making, including changes in
Lindbergh Funds - Statement of Additional Information (PEA#1) Page 11 of 26
<PAGE>
government through extra-constitutional means; (ii) popular unrest associated
with demands for improved political, economic and social conditions; and (iii)
hostile relations with neighboring or other countries. Such political, social
and economic instability could disrupt the principal financial markets in which
the Fund invests and adversely affect the value of the Fund's assets.
Foreign Investment Restrictions
Certain countries prohibit or impose substantial restrictions on investments in
their capital markets, particularly their equity markets, by foreign entities
such as the Fund. These restrictions or controls may at times limit or preclude
investment in certain securities and may increase the cost and expenses of the
Fund. For example, certain countries require prior governmental approval before
investments by foreign persons may be made, or may limit the amount of
investment by foreign persons in a particular company, or limit the investment
by foreign persons to only a specific class of securities of a company that may
have less advantageous terms than securities of the company available for
purchase by nationals. Moreover, the national policies of certain countries may
restrict investment opportunities in issuers or industries deemed sensitive to
national interests. In addition, some countries require governmental approval
for the repatriation of investment income, capital or the proceeds of securities
sales by foreign investors. In addition, if there is a deterioration in a
country's balance of payments or for other reasons, a country may impose
restrictions on foreign capital remittances abroad. The Fund could be adversely
affected by delays in, or a refusal to grant, any required governmental approval
for repatriation, as well as by the application to it of other restrictions on
investments.
Non-Uniform Corporate Disclosure Standards and Governmental Regulation
Foreign companies are subject to accounting, auditing and financial standards
and requirements that differ, in some cases significantly, from those applicable
to U.S. companies. In particular, the assets, liabilities, and profits appearing
on the financial statements of such a company may not reflect its financial
position or results of operations in the way they would be reflected had such
financial statements been prepared in accordance with U.S. generally accepted
accounting principles. Most of the securities held by a Foreign Region Fund will
not be registered with the SEC or regulators of any foreign country, nor will
the issuers thereof be subject to the SEC's reporting requirements. Thus, there
will be less available information concerning most foreign issuers of securities
held by the Fund than is available concerning U.S. issuers. In instances where
the financial statements of an issuer are not deemed to reflect accurately the
financial situation of the issuer, the Adviser will take appropriate steps to
evaluate the proposed investment, which may include on-site inspection of the
issuer, interviews with its management and consultations with accountants,
bankers and other specialists. There is substantially less publicly available
information about foreign companies than there are reports and ratings published
about U.S. companies and the U.S. government. In addition, where public
information is available, it may be less reliable than such information
regarding U.S. issuers. Issuers of securities in foreign jurisdictions are
generally not subject to the same degree of regulation as are U.S. issuers with
respect to such matters as restrictions on market manipulation, insider trading
rules, shareholder proxy requirements and timely disclosure of information.
Currency Fluctuations
Since the Fund may invest a substantial portion of its total assets in the
securities of foreign issuers which are denominated in foreign currencies, the
strength or weakness of the U.S. dollar against such foreign currencies may
account for a significant part of the Fund's investment performance. A decline
in the value of any particular currency against the U.S. dollar will cause a
decline in the U.S. dollar value of the Fund's holdings of securities and cash
denominated in such currency and, therefore, will cause an overall decline in
the Fund's net asset value and any net investment income and capital gains
derived from such securities to be distributed in U.S. dollars to shareholders
of the Fund. Moreover, if the value of the foreign currencies in which the Fund
receives its income declines relative to the U.S. dollar between the receipt of
the income and the making of Fund distributions, the Fund may be required to
Lindbergh Funds - Statement of Additional Information (PEA#1) Page 12 of 26
<PAGE>
liquidate securities in order to make distributions if the Fund has insufficient
cash in U.S. dollars to meet distribution requirements.
The rate of exchange between the U.S. dollar and other currencies is determined
by several factors, including the supply and demand for particular currencies,
central bank efforts to support particular currencies, the relative movement of
interest rates and pace of business activity in the other countries and the
United States, and other economic and financial conditions affecting the world
economy.
Although the Fund values its assets daily in terms of U.S. dollars, the Fund
does not intend to convert its holdings of foreign currencies into U.S. dollars
on a daily basis. The Fund will do so, from time to time, and investors should
be aware of the costs of currency conversion. Although foreign exchange dealers
do not charge a fee for conversion, they do realize a profit based on the
difference ("spread") between the prices at which they buy and sell various
currencies. Thus, a dealer may offer to sell a foreign currency to the Fund at
one rate, while offering a lesser rate of exchange should the Fund desire to
sell that currency to the dealer.
Adverse Market Characteristics
Securities of many foreign issuers may be less liquid and their prices more
volatile than securities of comparable U.S. issuers. In addition, foreign
securities markets and brokers generally are subject to less governmental
supervision and regulation than in the United States, and foreign securities
exchange transactions usually are subject to fixed commissions, which generally
are higher than negotiated commissions on U.S. transactions. In addition,
foreign securities exchange transactions may be subject to difficulties
associated with the settlement of such transactions. Delays in settlement could
result in temporary periods when assets of the Fund are uninvested and no return
is earned thereon. The inability of the Fund to make intended security purchases
due to settlement problems could cause the Fund to miss attractive investment
opportunities. Inability to dispose of a portfolio security due to settlement
problems either could result in losses to the Fund due to subsequent declines in
value of the portfolio security or, if the Fund has entered into a contract to
sell the security, could result in possible liability to the purchaser. The
Adviser will consider such difficulties when determining the allocation of the
Fund's assets, although the Adviser does not believe that such difficulties will
have a material adverse effect on the Fund's portfolio trading activities.
The Fund may use foreign custodians, which may involve risks in addition to
those related to the use of U.S. custodians. Such risks include uncertainties
relating to: (i) determining and monitoring the financial strength, reputation
and standing of the foreign custodian; (ii) maintaining appropriate safeguards
to protect the Fund's investments, and (iii) obtaining and enforcing judgments
against such custodians.
Withholding Taxes
The Fund's net investment income from foreign issuers may be subject to non-U.S.
withholding taxes by the foreign issuer's country, thereby reducing the Fund's
net investment income or delaying the receipt of income where those taxes may be
recaptured.
Special Considerations Affecting Emerging Markets
Investing in the securities of issuers domiciled in emerging markets, including
the markets of Latin America and certain Asian markets such as Taiwan, Malaysia
and Indonesia, may entail special risks relating to the potential political and
economic instability and the risks of expropriation, nationalization,
confiscation or the imposition of restrictions on foreign investment,
convertibility of currencies into U.S. dollars and on repatriation of capital
invested. In the event of such expropriation, nationalization or other
confiscation by any country, the Fund could lose its entire investment in any
such country.
Lindbergh Funds - Statement of Additional Information (PEA#1) Page 13 of 26
<PAGE>
Emerging securities markets are substantially smaller, less developed, less
liquid and more volatile than the major securities markets. The limited size of
emerging securities markets and limited trading volume in issuers compared to
the volume of trading in U.S. securities could cause prices to be erratic for
reasons apart from factors that affect the quality of the securities. For
example, limited market size may cause prices to be unduly influenced by traders
who control large positions. Adverse publicity and investors' perceptions,
whether or not based on fundamental analysis, may decrease the value and
liquidity of portfolio securities in these markets. In addition, securities
traded in certain emerging markets may be subject to risks due to the
inexperience of financial intermediaries, a lack of modern technology, the lack
of a sufficient capital base to expand business operations, and the possibility
of permanent or temporary termination of trading.
Settlement mechanisms in emerging securities markets may be less efficient and
less reliable than in more developed markets. In such emerging securities
markets there may be share registration and delivery delays or failures.
Most Latin American countries have experienced substantial, and in some periods
extremely high, rates of inflation for many years. Inflation and rapid
fluctuations in inflation rates and corresponding currency devaluations have had
and may continue to have negative effects on the economies and securities
markets of certain Latin American countries.
RISK OF HIGH YIELD SECURITIES OR FUNDS
The Fund's investment in corporate bonds may consist of non-investment grade
fixed income securities or shares in other investment companies that invest in
such securities. Non-investment grade obligations are commonly referred to as
"high yield" securities or "junk bonds." Although these securities or funds
investing in such securities usually offer higher yield than investment grade
securities, they also involve more risk of default. High yield bonds may also be
more susceptible to real or perceived adverse economic conditions than
investment grade bonds.
DESCRIPTION OF U.S. GOVERNMENT SECURITIES
As used in this Statement of Additional Information, the term "U.S. Government
Securities" refers to a variety of securities which are issued or guaranteed by
the United States Treasury, by various agencies of the United States Government,
and by various instrumentalities which have been established or sponsored by the
United States Government. The term also refers to "repurchase agreements"
collateralized by such securities.
U.S. Treasury Securities are backed by the "full faith and credit" of the United
States. Securities issued or guaranteed by Federal agencies and U.S. government
sponsored instrumentalities may or may not be backed by the full faith and
credit of the United States. In the case of securities not backed by the full
faith and credit of the United States, the investor must look principally to the
agency or instrumentality issuing or guaranteeing the obligation for ultimate
repayment, and may not be able to assert a claim against the United States
itself in the event the agency or instrumentality does not meet its commitment.
Some of the U.S. government agencies that issue or guarantee securities include
the Export-Import Bank of the United States, Farmers Home Administration,
Federal Housing Administration, Maritime Administration, Small Business
Administration, and the Tennessee Valley Authority.
An instrumentality of the U.S. government is a government agency organized under
Federal charter with government supervision. Instrumentalities issuing or
guaranteeing securities include, among other, Federal Home Loan Banks, the
Federal Land Banks, Central Bank for Cooperatives, Federal Intermediate Credit
Banks, and the Federal National Mortgage Association.
Lindbergh Funds - Statement of Additional Information (PEA#1) Page 14 of 26
<PAGE>
DESCRIPTION OF REPURCHASE AGREEMENTS
Repurchase agreements are transactions by which a person purchases a security
and simultaneously commits to resell that security to the seller (a member bank
of the Federal Reserve System or recognized securities dealer) at an agreed upon
price on an agreed upon date within a number of days (usually not more than
seven) from the date of purchase. The resale price reflects the purchase price
plus an agreed upon market rate of interest which is unrelated to the coupon
rate or maturity of the purchased security. A repurchase agreement involves the
obligation of the seller to pay the agreed upon price, which obligation is in
effect secured by the value of the underlying security.
The Fund may engage in a repurchase agreement with respect to any security in
which it is authorized to invest. Any repurchase transaction in which the Fund
engages will require collateralization equal to at least 102% of the Seller's
obligation during the entire term of the repurchase agreement. While it does not
presently appear possible to eliminate all risks from these transactions
(particularly the possibility of a decline in the market value of the underlying
securities, as well as delays and costs to the Fund in connection with
bankruptcy proceedings), it is the Fund's current policy to limit repurchase
agreement transactions to those parties whose creditworthiness has been reviewed
and deemed satisfactory by the Adviser.
The use of repurchase agreements involves certain risks. For example, if the
seller of the agreement defaults on its obligation to repurchase the underlying
securities at a time when the value of these securities has declined, the Trust
may incur a loss upon disposition of them. If the seller of the agreement
becomes insolvent and subject to liquidation or reorganization under the
Bankruptcy Code or other laws, a bankruptcy court may determine that the
underlying securities are collateral not within the control of the Trust and
therefore subject to sale by the trustee in bankruptcy. Finally, it is possible
that the Trust may not be able to substantiate its interest in the underlying
securities. While the Trust's management acknowledges these risks, it is
expected that they can be controlled through stringent security selection
criteria and careful monitoring procedures.
PORTFOLIO TRANSACTIONS
The Advisory Agreement between the Trust and Lindbergh Capital Management, Inc.
(the "Adviser") requires that the Adviser, in executing portfolio transactions
and selecting brokers or dealers, seek the best overall terms available. In
assessing the terms of a transaction, consideration may be given to various
factors, including the breadth of the market in the security, the price of the
security, the financial condition and execution capability of the broker or
dealer (for a specified transaction and on a continuing basis), the
reasonableness of the commission, if any, and the brokerage and research
services provided to the Trust and/or other accounts over which the Adviser or
an affiliate of the Adviser exercises investment discretion.
The Adviser has not and does not currently utilize soft-dollar or directed
brokerage arrangements. However, under the Advisory Agreement, the Adviser is
permitted, in certain circumstances, to pay a higher commission than might
otherwise be obtained in order to acquire brokerage and research services. The
Adviser must determine in good faith, however, that such commission is
reasonable in relation to the value of the brokerage and research services
provided -- viewed in terms of that particular transaction or in terms of all
the accounts over which investment discretion is exercised. In such case, the
Board of Trustees will review the commissions paid by the Fund of the Trust to
determine if the commissions paid over representative periods of time were
reasonable in relation to the benefits obtained. The advisory fee of the Adviser
would not be reduced by reason of its receipt of such brokerage and research
services. To the extent that research services of value are provided by
broker/dealers through or with whom the Trust places portfolio transactions the
Adviser may be relieved of expenses which it might otherwise bear.
Lindbergh Funds - Statement of Additional Information (PEA#1) Page 15 of 26
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The Trust may, in some instances, purchase securities that are not listed on a
national securities exchange or quoted on NASDAQ, but rather are traded in the
over-the-counter market. When the transactions are executed in the
over-the-counter market, it is intended generally to seek first to deal with the
primary market makers. However, the services of brokers will be utilized if it
is anticipated that the best overall terms can thereby be obtained. Purchases of
newly issued securities usually are placed with those dealers from which it
appears that the best price or execution will be obtained. Those dealers may be
acting as either agents or principals.
Brokerage fees paid by the Fund for the most recent fiscal years will, in future
periods, be included in the Trust's Statement of Additional Information.
PORTFOLIO TURNOVER
The Adviser buys and sells securities for the Fund to accomplish its investment
objectives. The Fund's investment policies may lead to frequent changes in
investments, particularly in periods of rapidly fluctuating interest rates. The
Fund's investments may also be traded to take advantage of perceived short-term
disparities in market values or yields among securities of comparable quality
and maturity. A change in the securities held by a Fund is known as "portfolio
turnover." It is anticipated that portfolio turnover for the Fund will be equal
to or less than 100%.
MANAGEMENT OF THE TRUST
TRUSTEES
The business affairs of the Trust are managed by the Board of Trustees. The
Trustees establish policies, as well as review and approve contracts and their
continuance. The Trustees also select the officers and select the Trustees to
serve as audit committee members.
TRUSTEES AND OFFICERS OF THE TRUST
Trustees and officers of the Trust, together with information as to their
principal business occupations during at least the last five years, are shown
below. Each Trustee who is an "interested person" of the Trust, as defined in
the Investment Company Act of 1940, is indicated by an asterisk. The officers of
the Trust listed below are affiliated persons of the Trust and the Adviser.
Lindbergh Funds - Statement of Additional Information (PEA#1) Page 16 of 26
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<TABLE>
<S> <C> <C>
POSITIONS
WITH THE
NAME, ADDRESS AND AGE TRUST PRINCIPAL OCCUPATION
Dewayne L. Wiggins (50) Trustee* and President of Adviser since 1988.
5520 Telegraph Road #204 President
St. Louis, MO 63129
Brian D. Fitzpatrick (46) Trustee Associate Professor of Finance, Rockhurst University, since
18135 Canterbury 1989; Management Assessor, Sprint, Inc. since 1992.
Stillwell, KS 66085
Roger J. Levy (60) Trustee President, The Illtex Agency Inc. since 1994; Director/Chief
4302B Laclede Avenue Financial Officer of Access Control Technologies, Inc. 1990
St. Louis, MO 63108 to 1998; registered representative of Park Avenue Life of the
Guardian Life Insurance Co.
Susan Wiggins (43) Trustee* Secretary of the Adviser since 1992.
2668 Cripple Creek
St. Louis, MO 63129
David M. Weinbaum (50) Trustee Author, publisher since 1995; President, Melrose Properties
1106 Kingshighway since 1994; owner/operator of eight McDonalds restaurants
Rolla, MO 65401 through Davaron Corp., AArmy Corp. and sole proprietor-
ships since 1975.
Sandra J. Britton (46) Secretary Administrative Assistant for Adviser since August 1998;
5520 Telegraph Road #204 Accounting for Family Fare 1992 to June 1998.
St. Louis, MO 63129
Carol Highsmith (34) Vice President Secretary of the Star Select Funds and Secretary of Unified
431 N. Pennsylvania St. and Assistant Funds, Financial Services, Inc. and Unified Investment
Indianapolis, IN 46204 Secretary Advisers, Inc. (October 1996 to present); employed by
Unified Fund Services, Inc. (November 1994 to present).
Michael Durham (40) Treasurer Director of Operations for the Indiana Pork Producers
431 N. Pennsylvania St. Association ( May 1994 to May 1995), Vice President of
Indianapolis, IN 46204 Unified Fund Services, Inc. ( May 1995 to present).
* Dewayne L. Wiggins and Susan Wiggins are husband and wife.
</TABLE>
Lindbergh Funds - Statement of Additional Information (PEA#1) Page 17 of 26
<PAGE>
The compensation to be paid to the Trustees of the Trust is set forth in the
following table:
<TABLE>
<S> <C> <C> <C> <C>
PENSION OR TOTAL
RETIREMENT ESTIMATED COMPENSATION
AGGREGATE ACCRUED AS ANNUAL FROM TRUST (THE
COMPENSATION PART OF FUND BENEFITS UPON TRUST IS NOT IN A
NAME OF TRUSTEE FROM TRUST (1) EXPENSES RETIREMENT FUND COMPLEX)(1)
Dewayne L. Wiggins $ 0 $ 0 $ 0 $ 0
Brian D. Fitzpatrick $ 1,500 $ 0 $ 0 $ 1,500
Roger J. Levy $ 1,500 $ 0 $ 0 $ 1,500
David M. Weinbaum $ 1,500 $ 0 $ 0 $ 1,500
Susan Wiggins $ 0 $ 0 $ 0 $ 0
TOTAL $ 4,500 $ 0 $ 0 $ 4,500
(1) Trustee fees are Trust expenses. The compensation is estimated for the first full year of the Trust.
</TABLE>
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
Dewayne L. Wiggins and Lindbergh Capital Management, Inc. are control persons by
virtue of Lindbergh Capital providing initial funds to cover Trust organization
and their roles in Trust governance.
DISTRIBUTOR
Unified Management Corporation, 431 North Pennsylvania, Indianapolis, Indiana
46204, is the exclusive agent for distribution of shares of the Fund. The
Distributor is obligated to sell shares of the Fund on a best efforts basis only
against purchase orders for the shares. Shares of the Fund are offered to the
public on a continuous basis.
ADDITIONAL INFORMATION ABOUT INVESTMENT ADVISER
The Adviser was organized in 1998. Its Co-Founders are Dewayne L. Wiggins and
his brother Steven N. Wiggins. Steven N. Wiggins is a professor of economics at
Texas A&M University, College Station, Texas. Dewayne L. Wiggins, along with his
wife Susan Wiggins, own 50.3% of the Adviser, and Steven Wiggins owns 49.7%.
The Adviser has registered the service mark "Lindbergh Signature Fund" and
retains the right to use the name "Lindbergh" in connection with another
investment company or business enterprise with which the Adviser is or may
become associated. The Trust's right to use the name "Lindbergh Signature Fund"
automatically ceases ninety days after termination of the Agreement and may be
withdrawn by the Adviser on 90-days written notice.
The Adviser may make payments to banks or other financial institutions that
provide shareholder services and administer shareholder accounts. The
Glass-Steagall Act prohibits banks from engaging in the business of
underwriting, selling or distributing securities. Although the scope of this
prohibition under the Glass-Steagall Act has not been clearly defined by the
courts or appropriate regulatory agencies, management of the Fund believes that
the Glass-Steagall Act should not preclude a bank from providing such services.
However, state securities laws on this issue may differ from the interpretations
of federal law expressed herein and banks and financial institutions may be
required to register as dealers pursuant to state law. If a bank were prohibited
from continuing to perform all or a part
Lindbergh Funds - Statement of Additional Information (PEA#1) Page 18 of 26
<PAGE>
of such services, management of the Fund believes that there would be no
material impact on the Fund or its shareholders. Banks may charge their
customers fees for offering these services to the extent permitted by applicable
regulatory authorities, and the overall return to those shareholders availing
themselves of the bank services will be lower than to those shareholders who do
not. The Fund may from time to time purchase securities issued by banks which
provide such services; however, in selecting investments for the Fund, no
preference will be shown for such securities.
The Board of Trustees (including a majority of the "disinterested Trustees") and
shareholder approval was given for the Advisory Agreement through to and
including August 2001. The Agreement provides that it will continue initially
for two years, and from year to year thereafter as long as it is approved at
least annually both (i) by a vote of a majority of the outstanding voting
securities of such Fund (as defined in the 1940 Act) or by the Board of Trustees
of the Trust, and (ii) by a vote of a majority of the Trustees who are not
parties to the Advisory Agreement or "interested persons" of any party thereto,
cast in person at a meeting called for the purpose of voting on such approval.
The Agreements may be terminated on 60 days' written notice by either party and
will terminate automatically if assigned.
PURCHASE AND REDEMPTION
TERMS OF PURCHASE
The Trust reserves the right to reject any purchase order and to change the
amount of the minimum initial and subsequent investments in the Fund upon
notice.
REOPENING AN ACCOUNT
A shareholder may reopen a closed account with a minimum investment of $1,000
without filing a new account application, during the calendar year the account
is closed or during the following calendar year, provided that the information
on the existing account application remains correct.
BROKERS
The Trust has authorized one or more brokers to accept purchase and redemption
orders on behalf of the Fund. Authorized brokers are permitted to designate
other intermediaries to accept purchase and redemption orders on the Fund's
behalf. The Fund will be deemed to have received a purchase or redemption order
when an authorized broker or, if applicable, an authorized broker's designee,
accepts the order. Orders will be priced at the Fund's net asset value next
computed after the order is accepted by an authorized broker or the authorized
broker's designee.
REDEMPTION IN KIND
The Trust has committed to pay in cash all redemption requests by a shareholder
of record, limited in amount during any 90-day period up to the lesser of
$250,000 or 1% of the value of the Fund's net assets at the beginning of such
period. Such commitment is irrevocable without the prior approval of the
Securities and Exchange Commission. In the case of requests for redemption in
excess of such amount, the Board of Trustees reserves the right to make payments
in whole or in part in securities or other assets of the Fund. In this event,
the securities would be valued in the same manner as the Fund's net asset value
is determined. If the recipient sold such securities, brokerage charges would be
incurred.
SUSPENSION OF REDEMPTIONS
The right of redemption may be suspended or the date of payment postponed (a)
during any period when the New York Stock Exchange is closed, (b) when trading
in the markets the Fund normally uses is restricted, or when an
Lindbergh Funds - Statement of Additional Information (PEA#1) Page 19 of 26
<PAGE>
emergency exists as determined by the Securities and Exchange Commission so that
disposal of the Fund's investments or determination of its net asset value is
not reasonably practicable, or (c) for such other periods as the Securities and
Exchange Commission by order may permit to protect the Fund's shareholders.
DETERMINATION OF NET ASSET VALUE
The methods and days on which net asset value is calculated by the Fund are
described in the prospectus.
TAX STATUS
Status of the Fund
The Fund intends to pay no federal income tax because it expects to meet the
requirements of Subchapter M of the Internal Revenue Code applicable to
regulated investment companies and to receive the special tax treatment afforded
to such companies. To qualify for this treatment, the Fund must, among other
requirements:
* derive at least 90% of its gross income from dividends, interest, and gains
from the sale of securities;
* invest in securities within certain statutory limits; and
* distribute to its shareholders at least 90% of its net income earned during
the year.
SHAREHOLDERS' TAX STATUS
Shareholders are subject to federal income tax on dividends and capital gains
received as cash or additional shares. Depending on the composition of the
Fund's income, a portion of the dividends from net investment income may qualify
for the dividends received deduction allowable to certain U.S. corporations. In
general, dividend income of the Fund distributed to certain U.S. corporate
shareholders will be eligible for the corporate dividends received deduction
only to the extent that (i) the Fund's income consists of dividends paid by
certain U.S. corporations and (ii) the Fund would have been entitled to the
dividends received deduction with respect to such dividend income if the Fund
were not a regulated investment company.
The foregoing tax consequences apply whether dividends are received in cash or
as additional shares. No portion of any income dividend paid by any Fund is
eligible for the dividends received deduction available to corporations.
CAPITAL GAINS
Shareholders will pay federal tax at capital gains rates on long-term capital
gains distributed to them regardless of how long they have held the Fund shares.
FOREIGN TAXES
Dividend and interest income received by the Fund from sources outside the U.S.
may be subject to withholding and other taxes imposed by such foreign
jurisdictions. Tax conventions between certain countries and the U.S. may reduce
or eliminate these foreign taxes, however, and foreign countries generally do
not impose taxes on capital gains respecting investments by foreign investors.
PERFORMANCE INFORMATION
Quotations of the Fund's performance are based on historical earnings, show the
performance of a hypothetical investment, and are not intended to indicate
future performance of the Fund. An investor's shares when redeemed
Lindbergh Funds - Statement of Additional Information (PEA#1) Page 20 of 26
<PAGE>
may be worth more or less than their original cost. Performance of the Fund will
vary based on changes in market conditions and the level of the Fund's expenses.
TOTAL RETURN
"Average annual total return," as defined by the Securities and Exchange
Commission, is computed by finding the average annual compounded rates of return
(over the one and five year periods and the period from initial public offering
through the end of the Fund's most recent fiscal year) that would equate the
initial amount invested to the ending redeemable value, according to the
following formula:
P(1+T)n = ERV
Where: P = a hypothetical $1,000 initial investment
T = average annual total return
n = number of years
ERV = ending redeemable value at the end of
the applicable period of the
hypothetical $1,000 investment made at
the beginning of the applicable period.
The computation assumes that all dividends and distributions are reinvested at
the net asset value on the reinvestment dates and that a complete redemption
occurs at the end of the applicable period.
YIELD
The yield of the Fund's shares is determined each day by dividing the net
investment income per share (as defined by the Securities and Exchange
Commission) earned by the Fund over a thirty-day period by the net asset value
per share of the Fund on the last day of the period. This value is annualized
using semi-annual compounding. This means that the amount of income generated
during the thirty-day period is assumed to be generated each month over a
12-month period and is reinvested every six months.
The "yield" of a money market fund refers to the income generated by an
investment in the Fund over a seven-day period. This income is then annualized.
The amount of income generated by investments during the week is assumed to be
generated each week over a 52-week period and is shown as a percentage of the
investment. The "effective yield" is calculated similarly but, when annualized,
the income earned by an investment in the Fund is assumed to be reinvested. The
effective yield will be slightly higher than the yield because of the
compounding effect of this assumed reinvestment.
The yield of does not necessarily reflect income actually earned by the
applicable shares because of certain adjustments required by the Securities and
Exchange Commission and, therefore, may not correlate to the dividends or other
distributions paid to shareholders. To the extent that financial institutions
and broker/dealers charge fees in connection with services provided in
conjunction with an investment in the Fund, performance will be reduced for
those shareholders paying those fees.
PERFORMANCE COMPARISONS
A comparison of the quoted non-standard performance of various investments is
valid only if performance is calculated in the same manner. Because there are
different methods of calculating performance, investors should consider the
effect of the methods used to calculate performance when comparing performance
of a particular Fund with the performance quoted with respect to other
investment companies or types of investments.
Lindbergh Funds - Statement of Additional Information (PEA#1) Page 21 of 26
<PAGE>
From time to time, in advertising and marketing literature, the Fund's
performance may be compared to the performance of broad groups of mutual funds
with similar investment goals, as tracked by independent organizations such as
Investment Company Data, Inc. ("ICD"), Lipper Analytical Services, Inc.
("Lipper"), CDA Investment Technologies, Inc. ("CDA"), Morningstar, Inc. and
other independent organizations. When these organizations' tracking results are
used, the Fund will be compared to the appropriate fund category, that is, by
fund objective and portfolio holdings or the appropriate volatility grouping,
where volatility is a measure of the Fund's risk. Rankings may be listed among
one or more of the asset-size classes as determined by the independent ranking
organization. Footnotes in advertisements and other marketing literature will
include the organization issuing the ranking, time period, and asset size class,
as applicable, for the ranking in question.
In addition, the Fund's performance may be compared to unmanaged indices of
securities that are comparable in their terms and intent to those in which the
Fund invests such as the Dow Jones Industrial Average ("DJIA"), Standard &
Poor's 500 Stock Index ("S&P 500"), the Lehman Brothers Aggregate Bond Index,
the Russell 2000 Index, the Morgan Stanley Capital International Europe,
Australia and Far East Index, the Morgan Stanley REIT Index, the NanoCap(TM)
Index and the Consumer Price Index ("CPI"). The DJIA and S&P 500 are unmanaged
indices widely regarded as representative of the equity market in general. The
CPI is a commonly used measured of inflation.
Marketing and other literature for the Fund may include a description of the
potential risks and rewards associated with an investment in the Fund. The
description may include a comparison of the Fund to broad categories of
comparable funds in terms of potential risks and returns. The description may
also compare the Fund to bank products, such as certificates of deposit. Unlike
mutual funds, certificates of deposit are insured up to $100,000 by the U.S.
government and offer a fixed rate of return. Because bank products guarantee the
principal value of an investment and money market funds seek stability of
principal, these investments are considered to be less risky than investments in
either bond or equity funds, which may involve loss of principal.
The risks and rewards associated with an investment in bond or equity funds
depend upon many factors. For fixed income funds these factors include, but are
not limited to the fund's overall investment objective, the average portfolio
maturity, credit quality of the securities held, and interest rate movements.
For equity funds, factors include the fund's overall investment objective, the
types of equity securities held and the financial position of the issuers of the
securities. The risks and rewards associated with an investment in international
bond or equity funds will also depend upon currency exchange rate fluctuation.
Shorter-term bond funds generally are considered less risky and offer the
potential for less return than longer-term fixed income funds. The same is true
of domestic bond funds relative to international fixed income funds, and fixed
income funds that purchase higher quality securities relative to bond funds that
purchase lower quality securities. Growth and income equity funds are generally
considered to be less risky and offer the potential for less return than growth
funds. In addition, international equity funds usually are considered more risky
than domestic equity fund but generally offer the potential for greater return.
CUSTODIAN
UMB Bank, N.A., 928 Grand Boulevard, 10th Floor, Kansas City, Missouri 64106
("Custodian") serves as the custodian for the Fund.
TRANSFER AGENT, FUND ACCOUNTING AGENT, AND ADMINISTRATOR
Unified Fund Services, Inc. (the "Transfer Agent"), P.O. Box 6110, Indianapolis,
Indiana 46206-6110, acts as the transfer agent, fund accounting agent and
administrator for the Trust. The Transfer Agent maintains the records of each
shareholder's account, answers shareholders' inquiries concerning their
accounts, processes purchases and redemptions of shares, acts as dividend and
distribution disbursing agent and performs other accounting and shareholder
service functions. The Transfer Agent provides the Trust with certain monthly
reports, record-keeping and other management-related services. For its services
the Transfer Agent receives a base fee of $14 per active
Lindbergh Funds - Statement of Additional Information (PEA#1) Page 22 of 26
<PAGE>
shareholder account with a minimum annual fee of $15,000. The Transfer Agent and
Unified Management Corporation are both wholly owned subsidiaries of Unified
Financial Services, Inc.
Neither the Custodian nor Unified Fund Services, Inc., has any part in
determining the investment policies of the Trust or any of the Fund or which
securities are to be purchased or sold by the Fund, and neither can provide
protection to shareholders against possible depreciation of assets.
INDEPENDENT ACCOUNTANTS AND COUNSEL
McCurdy & Associates CPA's Inc., 27955 Clemens Road, Westlake, Ohio 44145,
independent accountants, have been selected as the Trust's auditors for the
initial seed capital audit and for the fiscal year ending August 31, 2000.
Charles W. Lutter, Jr., 103 Canyon Oaks, San Antonio, Texas 78232, is legal
counsel to the Trust.
FINANCIAL STATEMENTS
Audited initial seed capital financial statements are set forth below.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To The Shareholders and Board of Trustees
Lindbergh Funds
We have audited the accompanying statement of assets and liabilities of
Lindbergh Funds (comprising, respectively, the Lindbergh Signature Fund) as of
September 13, 1999. This financial statement is the responsibility of the
Company's management. Our responsibility is to express an opinion on this
financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of assets and liabilities is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statement of assets and
liabilities presentation. Our procedures included confirmation of cash held by
the custodian as of September 13, 1999, by correspondence with the custodian. We
believe that our audit provides a reasonable basis for our opinion.
In our opinion, the statement of assets and liabilities referred to above
presents fairly, in all material respects, the financial position of the
Lindbergh Signature Fund constituting Lindbergh Funds as of September 13, 1999,
in conformity with generally accepted accounting principles.
/S/ McCurdy & Associates CPA's, Inc.
McCurdy & Associates CPA's, Inc.
Westlake, Ohio
September 13, 1999
Lindbergh Funds - Statement of Additional Information (PEA#1) Page 23 of 26
<PAGE>
Lindbergh Funds
Statement of Assets and Liabilities
September 13, 1999
The Lindbergh
Signature Fund
--------------
ASSETS:
Cash in Bank $100,000
--------
Total Assets $100,000
--------
LIABILITIES: $ 0
--------
Total Liabilities $ 0
--------
NET ASSETS $100,000
--------
NET ASSETS CONSIST OF:
Capital Paid In $100,000
--------
OUTSTANDING SHARES
Unlimited Number of Shares
Authorized Without Par Value 1,000
NET ASSET VALUE PER SHARE $100.00
OFFERING PRICE PER SHARE $100.00
See accompanying notes and accountant's audit report.
Lindbergh Funds - Statement of Additional Information (PEA#1) Page 24 of 26
<PAGE>
LINDBERGH FUNDS
NOTES TO FINANCIAL STATEMENTS
September 13, 1999
1. ORGANIZATION
Lindbergh Funds (the "Trust") is an open-end management investment
company and is a voluntary association of the type known as a "business
trust" organized under the laws of the Commonwealth of Massachusetts on
June 16, 1999. There is currently only one series within the Trust, the
Lindbergh Signature Fund (the "Fund"). It represents a separate
non-diversified portfolio of securities.
The Fund uses an independent custodian. No transactions other than
those relating to organizational matters and the sale of 1,000 shares
of the Lindbergh Signature Fund have taken place to date.
The Fund's primary investment objective is long-term capital
appreciation and earned income.
2. CONTROL PERSONS
As of September 13, 1999, all of the outstanding shares of the Fund
were owned by Steven N. Wiggins, a principal of Lindbergh Capital
Management. A shareholder who beneficially owns, directly or
indirectly, more than 25% of the Fund's voting securities may be deemed
a "control person" (as defined in the 1940 Act) of the Fund.
3. RELATED PARTY TRANSACTIONS
Lindbergh Capital Management, Inc. is the investment adviser for the
Fund. It manages the Fund's portfolio and provides administrative
services to the extent not supplied by other service providers. The
annual advisory fee to be paid to Lindbergh Capital, based on average
net assets, is 0.75%. In connection with establishing the Fund, the
Adviser has planned to keep total fund operating expenses low. To this
end, the Adviser has agreed to pay all Fund expenses necessary to keep
total fund operating expenses at 0.75% through August 31, 2000, and to
advise the Fund prior to fiscal year end whether it will continue to
cap expenses.
The Fund has adopted a plan under Rule 12b-1 that allows the Fund to
pay distribution and other fees for the distribution of its shares and
for services provided to shareholders. The Plan allows for the payment
of up to 0.25% of average annual net assets.
Certain officers and/or directors of Lindbergh Capital Management, Inc.
are also officers and/or trustees of the Fund.
Unified Fund Services, Inc. ("Unified") acts as the Fund's transfer
agent and, in capacity, maintains the records of each shareholder's
account, answers shareholders' inquires concerning their accounts,
processes purchases and redemptions of the Fund' shares, acts as
dividend and distribution disbursing agent and performs other
shareholder service functions.
In its capacity as fund administrator, Unified provides the Fund with
certain monthly reports, record-keeping and other management related
services.
Unified also provides fund accounting services to the Fund including
maintaining the Fund's accounts, books and records and calculating the
daily net asset value. For these administrative and fund accounting
services, Unified will receive a set amount for the first fiscal year,
35% of which is for administrative services.
Certain officers and/or employees of Unified are also officers for the
Fund.
Lindbergh Funds - Statement of Additional Information (PEA#1) Page 25 of 26
<PAGE>
4. CAPITAL STOCK AND DISTRIBUTION
At September 13, 1999, the authorized capitalization of the Fund
consists of unlimited shares without par value per share. Each share
has equal dividend, distribution and liquidation rights. There are no
conversion, subscription or preemptive rights applicable to any shares
of the Fund. All shares issued are fully paid and non-assessable. Each
holder of common stock has one vote for each share held. There are no
restrictions on the right of shareholders to retain or dispose of their
shares. Voting rights are non-cumulative.
Transactions in capital stock were as follows:
Shares Sold:
Lindbergh Signature Fund 1,000
Shares Redeemed:
Lindbergh Signature Fund 0
-----
Net Increase:
Lindbergh Signature Fund 1,000
-----
Shares Outstanding:
Lindbergh Signature Fund 1,000
-----
Lindbergh Funds - Statement of Additional Information (PEA#1) Page 26 of 26
<PAGE>
PART C. OTHER INFORMATION
Item 23. Exhibits
(a) Lindbergh Fund's ("Registrant's") Master Trust Agreement dated June 16,
1999, is incorporated by reference to Registrant's original registration
statement on Form N-1A filed July 9, 1999 (the "original registration
statement").
(b) Registrant's current By-Laws dated June 16, 1999, is incorporated by
reference to Registrant's original registration statement.
(c) Not Applicable [other instruments defining rights of security holders].
(d) Advisory Agreement between Registrant and Lindbergh Capital Management,
Inc. dated June 16, 1999, is incorporated by reference to Registrant's
original registration statement.
(e) Distribution Agreement among Registrant, Unified Management Corporation and
Lindbergh Capital Management, Inc. dated June 16, 1999, is incorporated by
reference to Registrant's original registration statement.
(f) Not Applicable [bonus or profit sharing contracts for directors or
officers].
(g) Custody Agreement between Registrant and UMB Bank, N.A. dated June 16,
1999, is incorporated by reference to Registrant's original registration
statement.
(h) Mutual Fund Services Agreement between the Registrant and Unified Fund
Services, Inc. dated June 16, 1999, is incorporated by reference to
Registrant's original registration statement.
(i) Opinion and Consent of Lynch, Brewer, Hoffman & Sands, LLP, Attorneys at
Law, dated July 2, 1999, is incorporated by reference to Registrant's
original registration statement.
(j) Consent of independent public accountants is filed herewith.
(k) Not Applicable [omitted financial statements].
(l) Copy of Letter of Initial Stockholders is filed herewith.
(m) Rule 12b-1 Plan is incorporated by reference to Registrant's original
registration statement.
(n) Not Applicable [Financial Data Schedule].
(o) Not Applicable [Rule 18f-3 Plan].
<PAGE>
Item 24. Persons Controlled by or under Common Control with the Registrant
Information pertaining to persons controlled by or under common control with
Registrant is incorporated by reference to the prospectus and the Statement of
Additional Information contained in Part A and Part B, respectively, of this
Registration Statement at the section entitled "The Investment Advisor."
Item 25. Indemnification
Under Article VI of the Registrant's Master Trust Agreement, each of its
Trustees and officers or person serving in such capacity with another entity at
the request of the Registrant (a "Covered Person") shall be indemnified (from
the assets of the Sub-Trust or Sub-Trusts in question) against all liabilities,
including, but not limited to, amounts paid in satisfaction of judgments, in
compromises or as fines or penalties, and expenses, including reasonable legal
and accounting fees, incurred by the Covered Person in connection with the
defense or disposition of any action, suit or other proceeding, whether civil or
criminal before any court or administrative or legislative body, in which such
Covered Person may be or may have been involved as a party or otherwise or with
which such person may be or may have been threatened, while in office or
thereafter, by reason of being or having been such a Trustee or officer,
director or trustee, except with respect to any matter as to which it has been
determined that such Covered Person (i) did not act in good faith in the
reasonable belief that such Covered Person's action was in or not opposed to the
best interests of the Trust or (ii) had acted with wilful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of such Covered Person's office (either and both of the conduct
described in (i) and (ii) being referred to hereafter as "Disabling Conduct"). A
determination that the Covered Person is not entitled to indemnification may be
made by (i) a final decision on the merits by a court or other body before whom
the proceeding was brought that the person to be indemnified was not liable by
reason of Disabling Conduct, (ii) dismissal of a court action or an
administrative proceeding against a Covered Person for insufficiency of evidence
of Disabling Conduct, or (iii) a reasonable determination, based upon a review
of the facts, that the indemnitee was not liable by reason of Disabling Conduct
by (a) a vote of the majority of a quorum of Trustees who are neither
"interested persons" of the Trust as defined in Section 1(a)(19) of the 1940 Act
nor parties to the proceeding, or (b) as independent legal counsel in a written
opinion.
Item 26. Business and Other Connections of Investment Adviser
Registrant's investment adviser is discussed in the Prospectus and Statement of
Additional Information contained in Part A and Part B of this Registration
Statement. In addition to that discussion, Steve Wiggins, Vice-President and
Co-Founder of Lindbergh Capital Management, Inc. is a professor of economics at
Texas A&M University, College Station, Texas.
Item 27. Principal Underwriters
(a) Unified Management Corporation the Registrant's distributor, acts as
distributor for the following funds:
Industry Leaders Fund The Julius Bear Investment Funds
104 Summit Avenue 330 Madison Avenue
Summit, NJ 07902 New York, NY 10017
<PAGE>
Labrador Mutual Fund Milestone Funds
2344 Corte De La Jara 1 Executive Boulevard
Pleasanton, CA 94566 Yonkers, NY 10701
Saratoga Advantage Trust Securities Management & Timing Funds
1501 Franklin Avenue 620 Woodmere Avenue, Suite B
Mineola, NY 11501 Traverse City, MI 49686
Sparrow Funds Firstar Select Funds
225 S. Meramec Ave., Ste. 732 431 North Pennsylvania Street
St. Louis, MO 63105 Indianapolis, IN 46204
The Unified Funds Regional Opportunity Fund
431 North Pennsylvania Street 700 W. Pete Rose Way
Indianapolis, IN 46204 Longworth Hall Suite 127
Cincinnati, OH 45203
(b) Information with respect to each director and officer of Unified Management
Corporation is incorporated by reference to Schedule A of Form BD filed by
it under the Securities Exchange Act of 1934 (File No. 8-23508).
(c) Not Applicable.
Item 28. Location of Accounts and Records
Accounts, books and other documents required to be maintained by Registrants
pursuant to Section 31(a) of the Investment Company Act of 1940 and the Rules
promulgated thereunder will be maintained at: Registrants investment adviser,
Lindbergh Capital Management, Inc., 5520 Telegraph Road, Suite 204, St. Louis,
Missouri 63129 (minute books); Registrant's transfer agent, fund accounting and
administrative services provider, Unified Fund Services, Inc., 431 North
Pennsylvania Street, Indianapolis, Indiana 46204; and Registrant's custodian,
UMB Bank, N.A., 928 Grand Boulevard, Kansas City, Missouri 64106.
Item 29. Management Services Not Discussed in Parts A or B
None.
Item 30. Undertakings
The Registrant hereby undertakes to furnish each person to whom a prospectus is
delivered with a copy of the Registrant's latest annual report to shareholders,
upon request and without charge.
Registrant undertakes to call a meeting of shareholders for purposes of voting
upon the question of removal of one or more Trustees when requested in writing
to do so by the holders of at least 10% of the Trust's outstanding shares, and
in connection with such meeting to comply with the provisions of Section 16(c)
of the Investment Company Act of 1940 relating to shareholder communications.
<PAGE>
Signatures
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this Registration Statement
to be signed on its behalf by the undersigned, there unto duly authorized, in
the city of Saint Louis and the State of Missouri, on the 22nd day of September
1999.
Lindbergh Funds
By:/S/ DEWAYNE L. WIGGINS
Dewayne L. Wiggins, President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.
Signature Title Date
/S/ DEWAYNE L. WIGGINS President and September 22, 1999
- --------------------------
Dewayne L. Wiggins Trustee
*/S/ BRIAN D. FITZPATRICK Trustee September 22, 1999
- --------------------------
Brian D. Fitzpatrick
*/S/ ROGER J. LEVY Trustee September 22, 1999
- --------------------------
Roger J. Levy
*/S/ DAVID M. WEINBAUM Trustee September 22, 1999
- --------------------------
David M. Weinbaum
*/S/ SUSAN WIGGINS Trustee September 22, 1999
- --------------------------
Susan Wiggins
*By: /S/ CHARLES W. LUTTER, JR.
--------------------------
Charles W. Lutter, Jr.
Attorney-in-Fact
<PAGE>
Index to Exhibits
Exhibit
Number Description of Document
(j) Consent of Independent Public Accountants
(l) Letter of Initial Stockholder
EXHIBIT
Item 23 (j)
Consent of Independent Public Accountants
<PAGE>
(Logo) McCurdy 27955 Clemens Road
& Associates Westlake, Ohio 44145
CPA's, Inc. Phone: (440) 835-8500
Fax: (440) 835-1093
[GRAPHIC OMITTED]
CERTIFIED PUBLIC ACCOUNTANTS
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to all references made to us in this Pre-Effective Amendment No. 1 to
Lindbergh Funds' Registration Statement on Form N-1A.
/S/ MCCURDY & ASSOCIATES CPA'S, INC.
McCurdy & Associates CPA'S, Inc.
September 13, 1999
EXHIBIT
Item 23 (l)
Letter of Initial Stockholders
<PAGE>
September 13, 1999
Board of Trustees
Lindbergh Funds
c/o Lindbergh Capital Management, Inc.
5520 Telegraph Road, Suite 204
Saint Louis, Missouri 63129
RE: Representations of Initial Shareholder
Dear Sirs:
I am providing the initial seed capital for Lindbergh Signature Fund - $100,000
in exchange for 1,000 shares at $100 per share.
I understand that the Funds' registration statement on Form N-1A is not yet
effective and that the shares purchased are restricted as to resale under the
Securities Act of 1933.
In light of the foregoing, I represent to you that the purchase was made for
investment purposes and not with the intention of redeeming or reselling; that I
have the investment acumen to understand the merits and risks of the investment;
and, that I have the financial resources to bear the risk of loss.
If you have questions, contact me at anytime.
Sincerely,
/S/STEVEN N. WIGGINS
Steven N. Wiggins
