Letter of Transmittal
U.S. Securities and Exchange Commission
Filing Desk
450 5th. St., N.W.
Washington, DC 20549
Re: East End Mutual Funds, Inc.
CIK No. 0000920261
File Nos. 811-8408
Commissioners:
Filed herewith on EDGAR in accordance with the provisions of Regulation
S-T is post Effective Amendment No. 2 to the captioned Funds's
Registration Statement on Form N1-A. Changes have been marked in
accordance with Regulation 310 the Articles of Incorporation,
By-Laws and Investment Management agreement are incorporated by reference.
Very Truly Yours
Aristides M. Matsis
EAST END MUTUAL FUNDS,INC.
POST EFFECTIVE AMENDMENT
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON 9/26/97
FILE NO: 811-8408
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
Post-Effective Amendment No. /_2_/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY /X/
ACT OF 1940
Amendment No. 2
(Check appropriate box or boxes.)
EAST END MUTUAL FUNDS, INC.
(Exact name of Registrant as Specified in Charter)
736 West End Avenue, Suite 3A
New York, New York 10025-6245
(Address of Principal Executive Office)
Registrant's Telephone Number, including Area Code:
212-666-0289
ARISTIDES M. MATSIS, 736 WEST END AVENUE, SUITE 3A
NEW YORK, NEW YORK 10025-6245
(Name and Address of Agent for Service)
Please send a copy of communications to:
Aristides M.Matsis
736 West End Avenue, Ste. 3A
New York, New York 10025
212-666-0289
ANNUAL REGISTRATION STATEMENT PURSUANT TO RULE 485
It is proposed that this filing will become effective immediately
upon filing.
A Rule 24f-2 Notice for the year ended June 30, 1997 was filed on
August 27,1997
FORM N-1A
CROSS REFERENCE SHEET
Form N-1A Part A
ITEM NO. PROSPECTUS LOCATION
1. Cover Page . . Cover Page
2. Synopsis . . . Shareholder Transaction
Expenses
3. Condensed Financial
Information . . Per Share Table
4. General Description of
Registrant . . Investment Objective of the
Fund; Investment Policies of
the Fund; Other Investment
Policies; Investment Risks;
Who Should Invest; General
Information; Dividends and
Distributions; Taxation
5. Management of the
Fund . . . . Management's Experience;
How the Fund is Managed;
Fund Service Providers
5A. Management Discussion of
Fund Performance Management Discussion of
Fund Performance
6. Capital Stock and
Other Securities . General Information
7. Purchase of Securities
Being Offered . . How to Invest in the Fund;
How Net Asset Value is Determined
Plan of Distribution;
8. Redemption or
Repurchase How to Sell (Redeem) Your Shares
FORM N-1A PART B
LOCATION IN STATEMENT OF ADDITIONAL INFORMATION
ITEM NO.
9. Pending Legal
Proceedings . . . None
10. Cover Page . . . Cover Page
11. Table of Contents . . Table of Contents
12. General Information and The Company; Description of
History . . . Predecessor Company and the
Management; Independent
Auditors
13.Investment Objectives Investment Objective and
and Policies . . .Policies; Investment
Restrictions
14. Management of the Fund . . Investment Manager; Directors
and Officers
15. Control Persons and Control Persons and Principal
Principal Holders Holders of Securities
of Securities . .
16. Investment Advisory The Investment Manager
and Other Independent Auditors
Services . . . See item "Fund Service
Providers" in Prospectus
17. Brokerage Allocation Execution of Portfolio
Transactions
18. Capital Stock and Other
Securities . . See "General Information" in
Prospectus
19. Purchase, Redemption and Additional Purchase and
Pricing of Securities Redemption Information
Being Offered . . Distribution Plan
FORM N-1A PART B (Continued)
20. Tax Status . . . Tax Information
Tax Distributions of Dividends
21. Underwriters . . Not Applicable
22. Calculations of Performance
Data Measuring Performance
23. Financial Statements . Independent Auditors' Report;
Schedule of Investments 6/30/97;
Statement of Assets and Liabilities
6/30/97; Notes to Financial Statement
6/30/97
PART C
OTHER INFORMATION
Item 24. Financial Statements
and Exhibits
(a) Financial Statements
Schedule of Investments 6/30/97
Statement of Assets and Liabilities 6/30/97
(b) Exhibits Exhibit No.
(1) copies of the Charter as now
in effect;
Articles of Incorporation 1*
(2) copies of the existing bylaws
or instruments corresponding
thereto;
Copy of Bylaws 2*
(3) copies of any voting trust None
agreement with respect to
more than 5 percent of any
class of equity securities
of the Registrant;
(4) copies of all instruments Article VI
defining the rights of holders Section (e)
of the Securities being of Exhibit
registered including where No. 1
applicable, the relevant
portion of the Articles of
Incorporation or bylaws of the
Registrant;
(5) copies of all investment
advisory contracts relating to
the management of the assets
of the Registrant;
Form of Investment Management 5*
Agreement between East End
Mutual Funds, Inc. with
respect to The Capital
Appreciation Series and East
End Investment Management Company;
(6) copies of each underwriting or 16*****
distribution contract between
the Registrant and a principal
underwriter, and specimens or
copies of all agreements between
principal underwriters and dealers;
(7) copies of all bonus, profit None
sharing, pension or other similar
arrangements wholly or partly for
the benefit of directors or
officers of the Registrant in
their capacity as such; any such
plan that is not set forth in a
formal document, furnish a
reasonably detailed description thereof;
(8) copies of all custodian
agreements and depository
contracts under Section 17(f)
of the 1940 Act with respect
to securities and similar
investments of the Registrant,
including the schedule of remuneration;
Form of Custodian Agreement 8***
between East End Mutual Funds,
Inc. and The Provident Bank;
(9) copies of all other material contracts
not made in the ordinary course
of business which are to be
performed in whole or in part at
or after the date of the filing of
the Registration Statement;
(a) Transfer Agency and Service 9(a)***
Agreement between East End
Mutual Funds, Inc. and
East End Investment Management
Company;
(b) Pricing of Portfolio 9(b)***
Agreement between East End
Mutual Funds, Inc. and
East End Investment Management
Company;
(c) Administration Agreement for 9(c)***
Reporting and Accounting
Services between East End Mutual
Funds, Inc. and East End
Investment Management Company.
(10) an opinion and consent of counsel 10****
as to the legality of the securities
being registered, indicating whether
they will, when sold, be legally
issued, fully paid and non-assessable;
(11) copies of any other opinions,
appraisals or rulings and consents
to use thereof relied on in the
preparation of this Registration
Statement and required by Section 7
of the 1933 Act.
(a) Independent Auditors Report
11(a)*****
(b) Consent of Independent Public
11(b)*****
Accountants
(12) all financial statements None
omitted from Item 23;
(13) copies of any agreements or None
understandings made in
consideration for providing the
initial capital between or among
the Registrant, the underwriter,
adviser, promoter, or initial
stockholders and written assurances
from promoters or initial shareholders
that their purchases were made for
investment purposes without any
present intention of redeeming or
reselling;
(14) copies of the model plan used in the
establishment of any retirement plan
in conjunction with which Registrant
offers its securities, any instructions
thereto and any other documents making
up the model plan. Such form(s) should
disclose the costs and fees charged in
connection therewith;
Master Retirement Plan 14(a)***
Master Retirement Plan - Profit Sharing
Adoption Agreement 14(b)***
Master Retirement Plan - Money Purchase
Adoption Agreement 14(c)***
Simplified Employee Pension Plan
Adoption Agreement 14(d)***
Self Directed Individual Retirement
Account 14(e)***
Standardized Paired Profit Sharing
Plan with Trust Agreement 14(f)***
(15) copies of any plan entered into
by Registrant pursuant to Rule 12b-1
under the 1940 Act, which describes
all material aspects of the
financing of distribution of
Registrant's shares, and any agreements
with any person relating to implement-
ation of such Plan;
Form of Plan of Distribution 15(a)**
to be adopted by East End Mutual (b)(ii) ***
Funds, Inc. with respect to the
Capital Appreciation Series;
Form of Agreement Pursuant to 15(b)***
Plan of Distribution between Form of Selling
East End Mutual Funds, Inc. with Agreement 15(b)(ii)
respect to the Capital Appreciation *****
Series and East End Investment
Management Company;
(16) Schedule for computation 16 *****
of each performance quotation
provided in the Registration
Statement in response to Item 22
(which need not be audited);
* These Exhibits were filed with Registration Statement - 6/2/94.
** This Exhibit was filed with Pre-Effective Amendment No. 2 - 9/14/94.
*** This Exhibit was filed with Pre-Effective Amendment No. 3 - 1/25/95.
**** This Exhibit was filed with Post-Effective Amendment No.1 - 5/4/95
*****This Exhibit was filed with Post-Effective Amendment No.2 -9/19/97
Item 25. Persons Controlled by or Under Common Control With Registrant
See Caption "Control Persons and Principal Holders of Securities" in the
Statement of Additional Information
Item 26. Number of Holders of Securities
(a) Title of Class
Common Capital Stock, $.001 par value
(b) Number of Record Holders
3
Item 27. Indemnification
(a) General. The Articles of Incorporation (the "Articles") of
the Corporation provide that to the fullest extent permitted by
Maryland statutory and decisional law and the Investment Company Act
of 1940, no director or officers of the Corporation shallbe personally
liable to the Corporation or its shareholders for money damages.
The Articles further provide that the Corporation shall indemnify
(1) its directors and officers, whether serving the corporation,
or at its request, any other entity, to the full extent permitted or
required by the general laws of the State of Maryland now or
hereafter in force, including the advancing of expenses under
the procedures and to the full extent permitted by law, and
(2) its other employees and agents,to such extent as shall
be authorized by the Board of Directors, the Corporation's
By-Laws and permitted by law. The foregoing rights indemnifi-
cation are not exclusive of any other rights to which those
seeking indemnification may be entitled. The Board of Directors
may take such action as is necessary to carry out the indemnification
provisions and is expressly empowered to adopt, approve, and amend,
from time to time, such By-Laws, resolutions or contracts
implementing such provisions or such further indemnification arrangements
as may be permitted by law.
The Articles further provide that no amendment of the Articles of
Incorporation shall limit or eliminate the right to indemnification
provided, with respect to acts or omissions occurring prior to such
amendment. Nothing contained in the Articles shall be construed to
authorize the Corporation to indemnify any officer or director of the
Corporation against any liability to the Corporation or to any hold-
ers of securities of the Corporation to which he or she is subject
by reason of willful malfeasance,bad faith,gross negligence,
or reckless disregard of the duties involved in the conduct of his
or her office. Any indemnification by the Corporation shall be
consistent with the requirements of law, including the Investment
Company Act of 1940.
The By-Laws of the Corporation provide that the Corporation shall
indemnify any individual who is a present or former director or
officer of the Corporation and who, by reason of his or her position
was, is or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (hereinafter collectively
referred to as a "Proceeding") against judgments, penalties, fines,
settlements and reasonable expenses actually incurred by such
director or officer in connection with such Proceeding, to the
fullest extent that such indemnification may be lawful under Maryland
law.
(b) Disabling Conduct. The By-Laws provide that nothing therein
shall be deemed to protect any director or officer against any
liability to the Corporation or its shareholders to which such
director or officer would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his or her office (such conduct
hereinafter referred to as "Disabling Conduct
The By-Laws provide that no indemnification of a director or officer
may be made unless: (1) there is a final decision on the merits by a
court or other body before whom the Proceeding was brought that the
director or officer to be indemnified was not liable by reason of
Disabling Conduct; or (2) in the absence of such a decision, there is
a reasonable determination, based upon a review of the facts, that the
director or officer to be indemnified was not liable by reason of
Disabling Conduct, which determination shall be made by: (i) the
vote of a majority of a quorum of directors who are neither "int-
erested persons" of the Corporation as defined in Section 2(a)(19)
of the Investment Company Act of 1940, nor parties to the Proceeding;
or (ii) an independent legal counsel in a written opinion.
(c) Standard of Conduct. Under Maryland law, the Corporation may not
indemnify any director if it is proved that: (1) the act or omission
of the director was material to the cause of action adjudicated in
the Proceeding and (i) was committed in bad faith or (ii) was the
result of active and deliberate dishonesty; or (2) the director
actually received an improper personal benefit; or (3) in the case
of a criminal proceeding, the director had reasonable cause to
believe that the act or omission was unlawful. No indemnification
may be made under Maryland law unless authorized for a specific
proceeding after a determination has been made, in accordance with
Maryland law, that indemnification is permissible in the circum-
stances because the requisite standard of conduct has been met.
(d) Required Indemnification. Maryland law requires that a director
or officer who is successful, on the merits or otherwise, in the
defense of any Proceeding shall be indemnified against reasonable
expenses incurred by the director or officer in connection with
the Proceeding. In addition, under Maryland law, a court of appro-
priate jurisdiction may order indemnification under certain cir-
cumstances.
(e) Advance Payment. The By-Laws provide that the Corporation may
pay any reasonable expenses so incurred by any director or officer
in defending a Proceeding in advance of the final disposition there-
of to the fullest extent permissible under Maryland law. In accord-
ance with the By-Laws, such advance payment of expenses shall be
made only upon the undertaking by such director or officer to repay
the advance unless it is ultimately determined that such director
or officer is entitled to indemnification, and only if one of the
following conditions is met: (1) the director or officer to be
indemnified provides a security for his undertaking; (2) the Corp-
oration shall be insured against losses arising by reason of any
lawful advances; or (3) there is a determination, based on a review
of readily available facts,that there is reason to believe that the
director or officer to be indemnified ultimately will be entitled to
indemnification, which determination shall be made by:(i) a majority
of a quorum of directors who are neither "interested persons" of the
Corporation, as defined in Section 2(a)(19) of the Investment Company
Act of 1940, nor parties to the Proceeding; or (ii) an independent
legal counsel in a written opinion.
(f) Insurance. The By-Laws provide that, to the fullest extent
permitted by Maryland law and Section 17(h) of the Investment Company
Act of 1940, the Corporation may purchase and maintain insurance on
behalf of any officer or director of the Corporation, against any
liability asserted against him or her and incurred by him or her in and
arising out of his or her position, whether or not the Corporation
would have the power to indemnify him or her against such liability.
(g) Public Policy Presumption under the Securities Act of 1933 and
Undertaking Pursuant to Rule 484(b)(1) under the 1933 Act. Insofar
as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the Registrant's By-Laws or otherwise,
the Registrant has been advised that, in the opinion of the Securities
and Exchange Commission, such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted
such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by a controlling
precedent, submit to a court of appropriate jurisdiction the question
of whether indemnification by it is against public policy as expressed
in the Act and will be governed by the final adjudication of such issue.
Item 28. Business and Other Connections of Investment Adviser
Aristides M.Matsis and Michael A.Matsis are principals in Matsis Associates
which is a company that was engaged in the business of owning and
operating restaurants.In addition, both have been managing a trust and in
connection therewith have been investing and reinvesting the trust assets.
Item 29. Principal Underwriter
The Fund does not have a principal underwriter
Item 30. Location of Accounts and Records
The books and records of the Fund, are maintained at East End
Investment Management Company, 736 West End Avenue, Suite 3A, New York,NY
10025.
Item 31. Management Services
There are no management service contracts not described in Part A
or Part B of this Form N-1A
Item 32. Undertakings
(a) Registrant agrees that the Directors of East End Mutual,
Funds, Inc. will promptly call a meeting of shareholders for the purpose of
acting upon questions of removal of a director or directors, when requested
in writing to do so by the record holders of not less than 10% of the
outstanding shares.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Post
Effective Registration to the Statement to be signed on its behalf by the
undersigned, hereunto duly authorized in New York, New York, on the 15th.
day of September, 1997.
EAST END MUTUAL FUNDS, INC.
BY: /s/ Aristides Matsis
President
INDEPENDENT AUDITOR'S REPORT
To the Shareholders and
Board of Directors of the
East End Mutual Funds, Inc.
Capital Appreciation Series
We have audited the accompanying statement of assets and
liabilities of East End Mutual Funds, Inc. - Capital Appreciation
Series, including the schedule of investments owned, as of June
30, 1996 and the related statements of operations, changes in net
assets, and the financial highlights for the period from October
2,1995 (commencement of operations) to June 30, 1997. These
financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is
to express an opinion on these financial statements 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 financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities
owned as of June 30, 1996 by correspondence with the custodian
and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all material
respects, the financial position of East End Mutual Funds, Inc. -
Capital Appreciation Series as of June 30, 1996 the results of
its operations, the changes in net assets, and the financial
highlights for the period from October 2, 1995 (commencement of
operations) to June 30, 1997, in conformity with generally
accepted accounting principles.
Abington,Pennsylvania Sanville & Company
August 13, 1997 Certified Public Accountants
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Organization: East End Mutual Funds, Inc. - Capital
Appreciation Series (the "Fund") is a series of East End Mutual
Funds, Inc. (the "Company"), a Maryland Corporation, is a
diversified, open end management investment company registered
under the Investment Company Act of 1940, as amended.
The following is a summary of significant accounting
policies followed by the Fund.
Security Valuation: Securities are valued at the last
reported sales price or in the case of securities where there is
no reported last sale, the closing bid price. Securities for
which market quotations are not readily available are valued at
their fair values as determined in good faith by or under the
supervision of the Company's Board of Directors in accordance
with methods which have been authorized by the Board. Short term
debt obligations with maturities of 60 days or less are valued at
amortized cost which approximates market value.
Securities Transactions and Investment Income: Security
transactions are recorded on the dates the transactions are
entered into (the trade dates). Realized gains and losses on
security transactions are determined on the identified cost
basis. Dividend income is recorded on the ex-dividend date.
Interest income is determined on the accrual basis.
Discount on fixed income securities is amortized.
Dividends and Distributions to Shareholders: The Fund
records all dividends and distributions payable to shareholders
on the ex-dividend date.
Federal Income Taxes: It is the Fund's intention to qualify
as a regulated investment company and distribute all of its
taxable income. Accordingly, no provision for Federal income
taxes will be required in the financial statements.
Deferred Organization Expenses: East End Investment
Management Company (the "Manager") has paid the deferred
organization expenses of the Fund. The deferred organization
expenses will be amortized over a period not exceeding five
years once the Fund has the ability to amortize the expenses and
not exceed the most restrictive annual expense limitation (see
Note 2). The Manager will be repaid at the rate in which the
deferred organization expenses are amortized. In the event that
the Manager (or any subsequent holder) redeems any of its
original shares prior to the end of the five-year period, the
proceeds of the redemption payable in respect of such shares
shall be reduced by the pro-rata share (based on the
proportionate share of the original shares redeemed to the total
number of original shares outstanding at the time of redemption)
of the unamortized deferred organization expenses as of the date
of such redemption. In the event that the Fund is liquidated
prior to the end of the five-year period, the Manager (or any
subsequent holder) shall bear the unamortized deferred
organization expenses.
East End Mutual Funds, Inc. - Capital Appreciation Series
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 1997
2. MANAGEMENT FEE AND TRANSACTIONS WITH AFFILIATES
Under the terms of the investment management agreement, the
Manager has agreed to provide the Fund investment management
services and be responsible for the day to day operations of the
Fund. The Manager will receive a fee, payable monthly, for the
performance of its services at an annual rate of 1% on the
first $500 million of average daily net assets, .75% in excess of
$500 million of average daily net assets. The fee will be
accrued daily and paid monthly. A management fee of $2,330 was
accrued but none paid for the period ended June 30, 1997.
In the event normal operating expenses of the Fund,
exclusive of certain expenses prescribed by state law, are in
excess of the most restrictive state limit where the Fund is
registered to sell shares, the fees payable to the Manager will
be deferred to the extent of such excess, and the Manager may
voluntarily advance money for expenses in order to keep the
Fund's annual expenses at or below the maximum allowable amount.
The manager reimbursed the Fund and advanced fees and expen-
ses totalling $12,483 for the period ended June 30, 1997.
Any deferrals or advances made by the Manager will be subject
to recoupment by the Manager and reimbursement by the Fund within
the following three fiscal years, provided the Fund is able to
effect such reimbursement and remain in compliance with
applicable state expense limitations and further provided, that
such payment would not adversely impact the Fund's tax status or
otherwise have an adverse tax impact on the Fund or its
shareholders. The Fund is contingently liable to the Manager
subject to such recoupment in the amount of $12,483 for the
year ended June 30, 1997 and $19,300 for the period ended June 30,
1996.
The Manager will also provide transfer agency, and portfolio
pricing services to the Fund. Under the terms of the Transfer
Agency and Service Agreement, the Manager will charge a minimum
annual fee of $15,000 to the Fund. The terms of the Portfolio
Pricing Agreement provide for an annual fee of $12,000. In
addition, the Manager will also provide administrative services,
accounting services, financial reporting services, tax accounting
services and compliance control services. The Manager will
charge a minimum annual fee of $38,000 for these additional
services. The Manager did not charge the Fund for any of
these above services for the period ended June 30, 1997.
The Fund has adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Investment Company Act of 1940.
The Plan provides that the Fund may finance activities which are
primarily intended to result in the sale of the Fund's shares.
The Fund may incur distribution expenses of up to .50% of
average daily net assets. A distribution fee of $611 was accrued
but none paid for the period ended June 30, 1997.
Certain officers and directors of the Fund are officers and
directors of the Manager.
3. INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding
short-term securities) for the year ended June 30,1997 were
$87,535 and $47,661 respectively.
At June 30,1997, net unrealized appreciation for Federal income
tax purposes aggregated $20,773 of which $52,711 related to unreal-
ized appreciation of securities and $31,939 related to unrealized
depreciation of securities. The cost of investments at June 30,1996
for Federal income tax purposes was $175,936.
$156,680.
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the use of our report, dated August 13,1997,on the
annual financial statements and financial highlights of the East
End Mutual Funds, Inc, Capital Appreciation series, which is inc-
luded in Part A and Part B in Post Effective Amendment No.2 to
Registration Statement under the Securities Act of 1933 and inc-
luded in the Prospectus and Statement of Additional Information
as specified, and to the reference made to us under the caption
"Independent Auditors" in the Statement of Additional Information.
Abington, Pennsylvania Sanville & Company
September 12,1997 Certified Public Accountants
Dear Fellow Shareholders:
Last year was difficult compared to thr returns of the prior year
31.76 versus (17.87) percent. At the beginning of the year the
marke rotated from purchasing medium capitization equities favored
by the manager into large.
Market sentiment reversed in April and the Fund gained 16.44% from
the low in March to the year end in June. As of this writing the
upward trend continues and the manager believes this will continue
for the near term if not further.
Medium capitalization stocks are good values at this time which is
fueling the Funds gains.
Going forward the management will take advantage of the good values
present in the market at this time and looks forward to a good year.
August 10,1997
\s\ Aristides Matsis
President
THE FOLLOWING UPDATES THE PROSPECTUS
Page
1 Prospectus date is September 26,1997
1 Statement of Additional Information date is September 26,1997
2 The following example illustrates the expenses that you would
incur on a $1,000 investment over various periods assuming
(1) a 5% annual rate of return and (2) redemption at the end
of each period.
1 Year $50.82 3 Years $152.33 5 Years $253.68 10 Years $505.88
EAST END MUTUAL FUNDS, INC.-CAPITAL APPRECIATION SERIES
Schedule of Investments
June 30,1997
COMMON STOCKS - 83.7% Shares Value
Banking/Finance - 6.2%
FirstPlus Financial Group 430 $ 14,620
Computer Hardware - 11.2%
Bay Networks Inc. * 280 7,385
Cascade Communications Corp.* 285 7,873
Indentix Inc. * 1,000 11,125
26,383
Computer Peripherals - 23.0%
Innovex Inc. 350 10,194
Iomega Corp. * 1,710 33,986
Western Digital Corp. * 310 9,804
53,984
Computer Services - 6.0%
Inacom Corp. * 450 14,006
Computer Software - 2.5%
Netscape Communications Corp. * 185 5,932
Education - 1.0%
The Learning Company Inc. * 250 2,312
Leisure - 4.5%
Coastcast Corp. * 800 10,600
Medical Care - 8.5%
Oxford Health Plans Inc. * 280 20,090
Medical Equipment - 9.6%
Advanced Technology Labs * 400 17,200
Imatron, Inc. * 2,100 5,316
22,516
Restaurants - 5.5%
CKE Restaurants Inc.* 410 12,966
Telcommunications - 5.7%
Vimpel Communications ADR* 350 13,330
Total Investments - 83.7% 196,709
Cash and Other Assets less
liabilities - 16.3% 38,430
$ 235,139
* Non income producing during the peroid
The accompanying notes are an integral part of these
financial statements
<PAGE>
EAST END MUTUAL FUNDS, INC.-CAPITAL APPRECIATION SERIES
Statement of Assets and Liabilities
June 30,1997
ASSETS
Investments in securities,at value
(cost-$175,936)(Notes 1 and 3) $ 196,709
Cash in money market account 11,216
Cash 394
Receivable for investment securities sold 26,667
Dividends receivable 87
Due from manager 66
Deferred organization costs (Note 1) 28,989
Total assets 264,128
LIABILITIES
Due to manager for deferred organization
costs (Note 1) 28,989
Total liabilities 28,989
NET ASSETS 235,139
Net assets consist of
Capital paid-in 243,545
Accumulated net realized loss on investments (20,619)
Net unrealized appreciation of investments 20,773
Accumulated net investment loss ( 8,560)
NET ASSETS 235,139
NET ASSET VALUE PER SHARE
(based on 22,732 shares outstanding-
shares authorized with $.0001 per
share par value) 10.34
The accompanying notes are an integral part of these
financial statements
<PAGE>
EAST END MUTUAL FUNDS, INC.-CAPITAL APPRECIATION SERIES
Statement of Operations
June 30,1997
INVESTMENT INCOME
Income
Dividends $ 2,731
Total income 2,731
Expenses
Investment management fees (Note 2) 2,330
Distribution fees (Note 2) 611
Custodian fees 3,764
Registration fees 3,895
Printing and postage fees 2,201
Audit fees 6,595
Legal fees 907
Insurance 1,329
Taxes 100
Other expenses 2,042
Total expenses before reimbursement 23,774
Reimbursement of expenses by manager
(Note 2) (12,483)
Expenses, after reimbursement 11,291
Net investment loss ( 8,560)
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS
Net realized (loss) on investments (20,619)
Change in net unrealized depreciation (21,654)
Net realized and unrealized (loss)
on investments (42,273)
Net decrease in net assets resulting
from operations (50,833)
The accompanying notes are an integral part of these
financial statements
<PAGE>
EAST END MUTUAL FUNDS, INC.-CAPITAL APPRECIATION SERIES
Statement of Changes in Net Assets
June 30,1997
For the period
October 2,1995
(commencement)
Year Ended of operations
June 30, to June 30,
1997 1996
INCREASE (DECREASE)IN NET ASSETS
From operations
Net investment loss $ ( 8,560) $ ( 1,524)
Net realized(loss)/gain
on investments ( 20,619) 22,617
Change in net unrealized
(depreciation) appreciation
on investments ( 21,654) 42,427
Net(decrease)/increase in
net assets resulting from
operations ( 50,833) 63,520
Distributions to shareholders
Net investment income - -
Net realized gain($.937)
and $.078, per share) ( 19,557) ( 1,536)
Total distributions ( 19,557) ( 1,536)
Share Transactions
Net proceeds from sales
of shares 12,000 115,000
Reinvestment of
distributions 19,557 1,536
Cost of shares redeemed ( 10,442) -
Net increase in net assets
resulting from share
transactions 21,115 116,536
Total(decrease)increase
in net assets ( 49,275) 178,520
Net Assets
Beginning of period 284,414 105,894
End of period 235,139 284,414
Other information
Shares:
Sold 1,103 10,463
Issued in reinvestment
of distributions 1,912 149
Redeemed ( 995) -
Net increase 2,020 10,612
The accompanying notes are an integral part of these
financial statements
<PAGE>
EAST END MUTUAL FUNDS, INC.-CAPITAL APPRECIATION SERIES
Financial Highlights
Selected Data For A Share Of Capital Stock Outstanding
Throughout Each Period
For the period
October 2,1995
(commencement)
Year Ended of operations
June 30, to June 30,
1997 1996
Per Share Operating Performance
Net Asset Value, Beginning of
Period $ 13.730 $ 10.480
Income Fom Investment
operations:
Net Investment Loss ( 0.370) (0.007)
Net Realized and Unrealized
Gain(loss) on investments ( 2.083) 3.335
Total From Investment
Operations ( 2.453) 3.328
Less Distributions:
Distributions from Net
Realized Gain 0.937 0.078
Total Distributions 0.937 0.078
Net Asset Value,
End of Period 10.340 13.730
Total Return (17.870)% 31.760%
Ratios/Supplemental Data:
Ratio of Expenses(After Re-
imbursement) to Average Net
Assets 4.840% 2.770 *
Ratio of Net Investment Loss
to Average Net Assets ( 3.670)% ( 0.910)%*
Portfolio Turnover Rate(%) 26.980 % 65.810 %
Average Commission rate $ 0.050 $ 0.060
Net Assets,End of Period $ 235,139 $ 284,414
* annualized
The accompanying notes are an integral part of these
financial statements
<PAGE>
