SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
1940 Act File No.811-8408
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /_/
Pre-Effective Amendment No. __ /_/
Post-Effective Amendment No. 7 /X/
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /_/
Amendment No. /X/
EAST END MUTUAL FUNDS, INC.
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(Exact Name of Registrant as Specified in Charter)
736 West End Avenue, Ste. 3A, New York, NY 10025
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code:(212)666-0289
Copy to: Aristides M. Matsis, President
East End Mutual Funds, Inc.
736 West End Avenue, Ste. 3A, New York, NY 10025
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(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
/_/ immediately upon filing pursuant to paragraph (b)
/ / on pursuant to paragraph (b)
/x/ 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.
[If appropriate, check the following box:]
/_/ This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
PROSPECTUS & APPLICATIONS
November 3 ,2000
East End Mutual Funds, Inc.
736 West End Avenue, Ste. 3A
New York, New York 10025
INVESTING IN GROWTH COMPANIES FOR THE LONG TERM
THE FUND SEEKS CAPITAL APPRECIATION BY
INVESTING IN COMMON STOCKS.
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FOR ASSISTANCE IN COMPLETING AN APPLICATION
OR QUESTIONS REGARDING SHAREHOLDER ACCOUNTS
(877) 309-6565
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As with all mutual funds, the Securities and Exchange Commission does
not determine if the information contained in this prospectus is
truthful or complete nor has it approved or disapproved any securities
offered in this prospectus. Anyone who tells you otherwise is
committing a crime.
TABLE OF CONTENTS
WHY YOU SHOULD READ THIS PROSPECTUS
Reading the prospectus will help you to decide whether East End Mutual
Funds, Inc. Capital Appreciation Seriesis the right investment for you.
It allows you to compare the Fund's objective, principal strategies,
principal risks, performance and fees and expenses with other mutual
funds. Please keep it for future reference.
INFORMATION ABOUT THE FUND
OBJECTIVE ................................... 1
PRINCIPAL STRATEGIES ........................ 1
PRINCIPAL RISKS ............................. 1
PERFORMANCE ................................. 2
FEES AND EXPENSES ........................... 3
ADDITIONAL INVESTMENT STRATEGIES .................... 4
ACCOUNT INFORMATION
DETERMINING SHARE PRICE ..................... 5
PURCHASING SHARES ........................... 5
SELLING SHARES .............................. 7
SPECIAL INVESTOR SERVICES ................... 8
DIVIDENDS AND TAXES
DIVIDENDS AND DISTRIBUTIONS ................. 9
TAX CONSEQUENCES ............................ 9
MANAGING THE FUND
PORTFOLIO TURNOVER .......................... 10
DISTRIBUTION AND SERVICE PLANS .............. 10
FINANCIAL HIGHLIGHTS ................................ 11
THE POWER OF AUTOMATIC INVESTING .................... 12
APPLICATIONS
ACCOUNT APPLICATION ......................... 13
IRA APPLICATION ............................. 15
EDUCATION IRA APPLICATION ................... 17
IRA TRANSFER APPLICATION .................... 19
EDUCATION IRA TRANSFER APPLICATION .......... 20
PAYROLL DEDUCTION PLAN APPLICATION .......... 21
The Fund is not a complete investment program, but may serve to diversify other
types of investments in your portfolio.
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INFORMATION ABOUT THE FUND
OBJECTIVE
The Fund's investment objective is capital appreciation.
PRINCIPAL STRATEGIES
To achieve its objective, the Fund invests primarily in the common
stocks of medium to large sized companies 5 to 100 billion in
capitalization that are traded on national security exchanges, New
York Stock Exchange, National Association of Securities Dealers and
American Stock Exchange. Up to 25% of the Fund's net assets may be
invested in foreign securities that are traded on U.S. exchanges.
When deciding which securities to buy the Fund considers:
o the above average growth prospects of existing products and new product
development or introduction
o the economic outlook of the industry
o the price of the security and its estimated fundamental value
o relevant market, economic and political environments.
The Fund invests in individual companies for the long term. It buys stocks
of companies that it believes:
o are profitable and leaders in their industry
o have distinct products and services which address substantial markets
o can grow annual earnings by at least 20% for the next three to five
years
o have proven management.
Typically, the Fund sells an individual security when the company fails to
meet expectations, there is a deterioration of underlying fundamentals or
the long-term prospects are poor. A bottoms up approach is used and the
Manager does not consider the high/lows of the market when making purchases.
PRINCIPAL RISKS
The Fund cannot eliminate risk or assure achievement of its objective and
you may lose money on your investment in the Fund.
The Fund is subject to "management" and "market" risks. Management risk
means the Fund's strategy may not produce the expected results, causing
losses. Market risk is when the price of a security moves down in response
to general market and economic conditions or from the activities of the
individual company.
Since the Fund invests mostly in medium to large capitalized companies its
share price may fluctuate more than the share price of funds primarily
invested in large companies. These companies may pose greater risk due to
narrow product lines, limited financial resources, less depth in management
or a limited trading market for their stocks.
Investment Strategy
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East End Investment Management Company, the Fund's investment advisor,
uses a bottom up approach to portfolio management. There is an emphasis on
individual stock selection rather than trying to time the highs and lows
of the market or concentrating in certain industries or sectors. this
hands-on-approach means that in addition to sophisticated computer
analysis, seeks to develop a thorough knowledge of the dynamics of the
businesses in which the Fund invests.
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<PAGE>
In addition, there are risks associated with investing in foreign
countries. Since foreign securities are usually denominated in foreign
currencies, the value of the Fund's portfolio could be affected by
currency exchange rates and exchange control regulations. Other risks
include:
o seizure, expropriation or nationalization of a company's assets
o less publicly available information and differing regulations and
standards
o the impact of political, social or economic instability, or diplomatic
events
o securities that are less liquid and harder to value than those of a U.S.
issuer.
As a result of these risks, the Fund may be more volatile than a fund
investing solely in U.S. companies. These risks may be greater if the Fund
invests in developing countries.
PERFORMANCE
The information below shows the Fund's performance for the life of the
Fund, October 2, 1995 through December 31, 1999. Year-by-year returns
show how the Fund's performance has varied by illustrating its volatility
for each full calendar year for the past four years and is intended to
to show risks of investing in the Fund.These returns include reinvestment
of all dividends and capital gain distributions, and reflect Fund
expenses. As with all mutual funds, past performance does not guarantee
future results.
YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31,
1996 9.03%
1997 4.62%
1998 3.38%
1999 78.22%
Best quarter: 60.1% (3rd.quarter 1999)
Worst quarter: -24.2% (3rd quarter 1998)
12 months: 98.9% (10/1/99 thru 9/30/00)
EAST END CAPITAL APPRECIATION
1996 1997 1998 1999
80% 78.22%
70%
60%
50%
40%
30%
20%
10% 9.03% 4.62% 3.38%
0%
-10%
BAR CHART AND TABLE OF RISK PERFORMANCE
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 1999
INCEPTION DATE OF FUND OCTOBER 2, 1995
1 YEAR LIFE OF FUND
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EAST END CAPITAL APPRECIATION 78.22% 16.82%
RUSSELL 2000 21.26% 16.69%
Average annual total return measures Fund performance over time. The
Fund's average annual return is compared with the Russell 2000 Index.
While the Fund does not seek to match the returns of the Russell 2000,
this Index is recognized as a good indicator of medium to large company
stock performance. You may not invest in the Russell 2000, and unlike
the Fund, does not incur fees or charges and the Fund's performance
figures reflect this while the Russell 2000 Index does not.
FEES AND EXPENSES
This table describes the fees and expenses you may pay if you buy and hold
shares of the Fund.
As a Fund shareholder, you do not pay any sales charges or exchange fees.
Annual expenses can vary from year-to-year. These fees are for the year
ended December 31, 1999.
SHAREHOLDER FEES
(fees paid directly from your investment)
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)
Management fee 1.00 %
Distribution (12b-1) fee (1) 0.00 %
Other expenses 0.81 %
Total Annual Fund Operating Expenses (2) 1.81 %
(1) Maximum distribution fee is 0.75% of net assets.
(2) The manager East End Investment Management Company has agreed
to voluntarily limit fund expenses to 2% of net assets.
EXAMPLE COSTS
The following example allows you to compare the cost of investing in the
Fund to the cost of investing in other mutual funds by showing what your
costs may be over time. This example is based on the following
assumptions:
o $10,000 initial investment o 5% total return for each year
o total annual Fund operating expenses remain the same for each period
o selling shares at the end of each period.
Your actual costs may be higher or lower, so use this example for comparison
only. Based on this information your costs at the end of each period would be:
Understanding Costs
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Costs are an important consideration in choosing a mutual fund. That's
because you pay the costs of operating the fund. These costs can erode a
substantial portion of the capital appreciation the fund achieves. Even
seemingly small differences in expenses can, over time have an effect on
the fund's performance.
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1 YEAR 3 YEARS 5 YEARS 10 YEARS
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$189 $585 $1,006 $2,167
<PAGE>
ADDITIONAL INVESTMENT STRATEGIES
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In seeking to meet its investment objective, the Fund may invest in other
types of securities and employ certain investment practices. These
securities and investment practices offer certain opportunities and carry
various risks.
When a warrant is issued by a company it entitles the holder to buy the
company's common stock at a set price during a stated period of time.
The Fund may lose money on a warrant if the price of the underlying
security declines or if the warrant expires before it is exercised.
The Fund has a securities lending program. The Fund may loan up to 25% of
its total assets, in the form of its portfolio securities, to unaffiliated
broker-dealers, banks or other recognized institutional borrowers. No
loans are made without equivalent collateral. The Fund lends its portfolio
securities to generate additional income. The primary risk in lending
securities is the default of a borrower. If the borrower defaults there
could be a deficiency in the collateral posted by the borrower. This risk
is minimized by computing the value of the loaned securities each day. If
the value of the security increases, additional collateral is provided by
the borrower.
Investing defensively
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In response to unfavorable market, economic or political conditions, the
fund may temporarily invest 50% of its assets in cash, U.S. government
securities, certificates of deposit or high grade debt securities for
defensive purposes. For this purpose, high grade means major rating
services like Standard & Poor's ratings group or Moody's Investors
Service Inc. have rated the securities within their two highest quality
grades. Although the fund would do this to avoid losses, these measures
may hurt the fund's efforts to achieve its objective.
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<PAGE>
ACCOUNT INFORMATION
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DETERMINING SHARE PRICE
The price at which you buy, sell or exchange Fund shares is the share
price or net asset value (NAV).
NAV is calculated at the close of regular trading of the New York Stock
Exchange (normally 4:00 p.m. New York time) each day the Exchange is open.
NAV is not calculated on days the Exchange is closed. For a purchase,
redemption or exchange of Fund shares, your price is the next calculated
NAV after your request is received in good order by the Fund.
To receive a specific day's price, your request must be received before
the close of the Exchange on that day.
When the Fund calculates share price, it values its securities at market
value. Sometimes market quotes for some securities are not available or
are not representative of market value. Examples would be when events
occur that materially affect the value of a security at a time when the
security is not trading or when the securities are illiquid. In that case,
securities may be valued in good faith at fair value, using consistently
applied procedures adopted by the Directors.
PURCHASING SHARES
You pay no sales charge to purchase shares of the Fund. Purchases are made
at NAV. If the Fund or the Fund's transfer agent receives, in proper form,
your check, wire or electronic transfer after 4:00 p.m. Eastern time, your
transaction is not processed until the next business day.
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[CAPTION]
TYPE OF ACCOUNT MINIMUM INITIAL INVESTMENT MINIMUM ADDITIONAL INVESTMENT
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REGULAR ACCOUNTS
By Mail $1,000 $ 250
IRAs
By Mail $1,000 $ 250
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Value of Investments + Cash and Other Assets - Liabilities
NAV = ----------------------------------------------------
Total Number of Shares Outstanding
CALCULATING NAV
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The share price for the fund is determined by adding the value of the
incestments, cash and other assets, deducting liabilities, and then
dividing that value by the total number of shares outstanding.
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<PAGE>
PAYING FOR FUND SHARES
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Purchases must be made by check Federal Reserve Draft, or other
negotiable bank draft, payable in U.S. dollars and drawn on U.S. banks.
a charge is imposed on any returned checks.
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Broker-dealers, financial planners, registered investment advisers, banks
or other institutions may impose investment minimums higher than those
imposed by the Fund. They may also charge for their services. There are no
charges if you purchase your shares directly from the Fund.
The Fund has the right to reject any purchase order, or limit or suspend
the offering of its shares. Additionally, the Fund may discontinue the
acceptance of telephone orders without notice and waive minimum purchase
requirements at any time. Third party checks are not accepted.
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OPENING AN ACCOUNT ADDING TO AN ACCOUNT
By Mail
o Complete and sign the application Make check payable to:
o Make your check payable to: East End Mutual Funds,Inc.
o Mail application and check to: o Mail check with the stub from
your shareholder statement to:
East End Mutual Funds, Inc.
736 West End Avenue, Ste. 3A
New York, New York 10025
Through others
o Contact your financial professional or broker-dealer.
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<PAGE>
SELLING SHARES
You may sell shares of the Fund on any day it is open for business.
Redemption requests received before 4:00 p.m. Eastern time will be made at
that day's NAV. No redemption request will be processed until your shares
have been paid for in full. If you pay for shares by check, payment may
take up to 15 days to clear from the date of purchase.
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SELLING SHARES
By mail
o Make the election on the application or in writing;
o Include shareholder name, tax identification number or Social Security
number and account number,the dollar value or number of shares to be
redeemed, signature guarantee, along with other supporting documents.
o Sign the request exactly as the shares are registered. Mail to the
address above.
Through your Broker Dealer, professional advisor
o Contact your financial professional or broker-dealer.
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REDEMPTION PROCEEDS
Once your redemption request has been received in "proper form," shares
will be redeemed at the next determined NAV. "Proper form" means that
the Fund has received your account application, all shares are paid for,
and all documentation along with any required signature guarantees.
Payment will be made by check to the address of record unless otherwise
specified on the letter of instruction, generally no later than the third
business day after the valuation date.
<PAGE>
SIGNATURE GUARANTEES
The Fund uses signature guarantees to protect you and the Fund from
possible fraudulent requests for redeemed shares. Your redemption request
must be accompanied by a signature guarantee. Additionally, a signature
guarantee is required if your address has changed within 30 days of your
redemption request. Signature guarantees may be obtained from most broker-
dealers, national or state banks, credit unions, federal savings and loan
associations or other eligible institutions. Signature guarantees cannot
be obtained from a notary public. If you have a question concerning
signature guarantees, please call (877) 309-6565.
REDEMPTIONS IN-KIND
The Fund intends to redeem shares in cash, although in order to protect
the interest of remaining shareholders, it retains the right to redeem
its shares in-kind. In-kind redemption means that you receive portfolio
securities rather than cash when redeeming your shares. If this occurs,
you will incur transaction costs when selling the securities.
INVOLUNTARY REDEMPTION
If your account falls below $1000, the Fund may close your account by
redeeming your shares and sending the proceeds minus any applicable
redemption fee. You will receive notice to increase your balance 30 days
before this happens. Your account will not be redeemed if the balance is
below the minimum due to a reduction in the Fund's NAV. Involuntary
redemptions do not apply to automatic investment plans, IRAs and other
retirement accounts.
SPECIAL INVESTOR SERVICES
The Fund offers its shareholders special services, which you may elect at
the time you open your account, or at a later date. If you want further
information on any of these services call (877) 309-6565.
IRAS, 401(K) AND 403(B) ACCOUNTS
Individual Retirement Accounts, 401(k) or 403(b) accounts are available.
SHAREHOLDER CONFIRMATION AND STATEMENTS
A confirmation will be sent each time you buy or sell Fund shares, or
reinvest dividends or capital gain distributions. The confirmation will
list the most recent transaction and the current share balance. Automatic
Investment Plan accounts receive quarterly statements. All accounts
receive annual statements as well as year-end tax information.
DIVIDENDS AND TAXES
DIVIDENDS AND DISTRIBUTIONS
Distributions will be reinvested automatically in Fund shares, unless you
elect to receive them in cash. Most of the Fund's distributions are
expected to be from capital gains. The Fund generally makes two different
kinds of distributions:
o CAPITAL GAINS FROM THE SALE OF PORTFOLIO SECURITIES.
The Fund distributes any net realized capital gains annually, normally
in November.
o NET INVESTMENT INCOME FROM INTEREST OR DIVIDENDS RECEIVED.
The Fund distributes its investment income annually.
TAX CONSEQUENCES
The buying, selling, holding or exchanging of mutual fund shares may
result in a gain or a loss and is a taxable event. The taxation of your
distributions will be the same whether you receive them in cash or
reinvest them in additional shares. Short and long-term holding periods
are based on how long the Fund has held a security and not on how long you
have owned your shares.
TAX CONSIDERATIONS
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Unless your investment is in a tax deferred account you may want to avoid:
o investing in the fund immediately before the fund declares a capital
gain, as it results in you receiving some of your investment back as a
taxable distribution.
o selling shares at a loss for tax purposes and then making an identical
investmenmt within 30 days this results in a "wash sale" and you will
not be allowed to calim a tax loss.
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PAGE>
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TRANSACTION TAX STATUS
Income dividends Ordinary income
Short-term capital gains Ordinary income
Long-term capital gains Capital gains
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The Fund may be subject to foreign withholding or other taxes on some of
its foreign investments. This will reduce the yield or total return on
those investments.
Your investment in the Fund could have additional tax consequences. Please
consult your tax advisor on state, local or other applicable tax laws.
MANAGING THE FUND
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East End Investment Management Company provides advisory services solely
to the Fund and is responsible for its business affairs since inception.
East end determines which securities to buy or sell and which brokers
will execute these trades, it also provides bookeeping, accounting, ad-
ministration, pricing and transfer agency services to the fund. East End
Investment Company is located at 736 West End Avenue, Ste. 3A, New York,
New York 10025. For its services, East End Investment received an annual
fee of 1.00% of the Fund's average daily net assets for the fiscal year
ended June 30, 2000 of $3,552.
PORTFOLIO TURNOVER
Portfolio changes may be made without regard to the length of time the
Fund has held a security. It is not the intention of the Fund to engage in
trading for short-term profits. However, the Fund's portfolio turnover may
vary significantly from year to year. It has not exceeded 100% in the
past, but may do so in the future. A turnover rate of 100% means the
securities owned by the Fund were replaced once during the year. Higher
turnover rates may result in higher brokerage costs to the Fund, higher
net taxable gains for the investor and may reduce the Fund's return.
DISTRIBUTION AND SERVICE PLANS
The Fund has adopted a 12b-1 plan permitting it to pay an annual fee in
connection with the sale and distribution of its shares of up to 0.75% of
the average daily net assets. Since this fee is paid on an ongoing basis,
it may cost more than other types of sales charges over time.
PORTFOLIO MANAGEMENT
The day to day investment operations of the fund are handled by
Mr. Aristides M. Matsis, Chairman of the Board and President of East End
Investment Management Company. He has been engaged in the securities
business since 1986 managing private accounts and the funds investment
operation since 1995, founded the fund and is its largest shareholder.
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights will help you understand the Fund's financial
performance for the past five years. Certain information reflects
financial results for a single Fund share. Total return shows how much
your investment in the Fund increased or decreased during each period,
assuming you reinvested all dividends and distributions. Sanville &
Company, independent auditors, audited this information. Their report is
included in the Fund's annual report, which is available upon request.
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
YEAR ENDED JUNE 30, Oct.,2
---------------------- - 1995
to
2000 1999 1998 1997 1996
PER SHARE OPERATING PERFORMANCE
Net asset value, Beginning of
Period ($) 10.160 9.500 10.340 13.730 10.480
Income from Investment Operations:
Net Investment Income (Loss) (0.018) (0.130) (0.290) (0.370) (0.007)
Net Realized and Unrealized Gain
(Loss) on Investments 10.858 0.790 (0.550) (2.083) 3.335
Total Income from Investmemt
Operations 10.840 0.660 (0.840) (2.453) 3.328
Less Distributions:
Distributions from Net
Realized Gains 0.937 0.078
Total Distributions 0.937 0.078
NET ASSET VALUE,END OF PERIOD($) 21.000 10.160 9.500 10.340 13.730
TOTAL RETURN (%) 106.693 6.947 (8.124) (17.870) 31.760
RATIOS AND SUPPLEMENTAL DATA:
Ratio of Expenses to
Average Net Assets (%) 1.801 2.668 3.057 4.840 2.770
Ratio of Net Investment Income
(Loss) to Average Net Assets (%) (1.488) (1.411) (2.658) (3.670) (0.910)
Portfolio Turnover Rate (%) 42.139 77.364 86.840 26.980 65.810
Net Assets End of Period (%) 462,224 224,490 209,872 235,139 284,414
<PAGE>
For Fund Information:
By telephone: 1 877 309 6565
By mail: East End Mutual Funds, Inc.
736 West End Avenue, Ste. 3A
New York, NY 10025
By internet: Text versions of Fund documents can be
downloaded from the following sources:
SEC (EDGAR data base): http://www.sec.gov
The Fund: http://www.eastend-mutualfunds.com
Statement of Additional Information
For more detailed information about the Fund and its policies,
please read the Statement of Additional Information, which is
incorporated by reference into (its legally made part of) this
Prospectus. You can get a free copy of the Statement of
Additional Information by calling the Fund's toll-free number or
by writing to the address above. The statement of Additional
Information is on file with the Securities and Exchange
Commission.
Annual and Semi-annual Reports
Additional information about the fund's investments is available
in the Fund's annual and semi-annual reports to shareholders. In
the Fund's annual report you will find a discussion of the market
conditions and investment strategies that significantly affected
the Fund's performance during the period covered by the report.
You can receive free copies of these reports by calling the
Fund's toll-free number or by writing to the address above.
Another way you can review and copy Fund documents is by visiting
the SEC's public Reference Room in Washington D.C. Copies can
also be obtained, for a duplicating fee, by e-mail request to
[email protected] or by writing to the SEC's Public Reference
Section, Washington, D.C. 20549-0102. Information on the
operation of the Public Reference Room is available by calling
1 202-942-8090.
Distributor: East End Mutual Funds,Inc.
East End Mutual Funds, Inc.
SEC File # 811-8408
<PAGE>
EAST END MUTUAL FUNDS, INC.
STATEMENT OF ADDITIONAL INFORMATION
November 3, 2000
This Statement of Additional Information is not a prospectus and you should read
it in conjunction with the current prospectus of East End Mutual Funds, Inc.
dated November 3, 2000. To obtain a copy of the Fund's prospectus, please call
1 (877)309-6565 or write: East End Mutual Funds, Inc., 736 West End Avenue, Ste.
3A,New York, New York 10025.
TABLE OF CONTENTS
Page
----
Information about the Fund.....................................................4
Investment Policies and Strategies.............................................4
Risk Factors..................................................................10
Investment Restrictions.......................................................10
Management Relationships, Directors and Compensation..........................10
Principal Stockholders........................................................10
Investment Advisory Services..................................................14
Brokerage Allocation..........................................................14
Potential Conflicts...........................................................15
Distribution Plan.............................................................16
Special Investor Services.....................................................16
Purchase and Redemption of Shares.............................................17
Taxes, Dividends and Capital Gains............................................18
Capital Stock.................................................................18
Transfer Agent, Custodian and Accounting Agent................................19
Auditor ......................................................................19
Financial Statements..........................................................19
Performance Comparisons.......................................................19
Fund Performance Information .................................................20
<PAGE>
INFORMATION ABOUT THE FUND
In December of 1993, the Fund was organized as a Maryland corporation with the
same investment management. The Fund is an open-end, diversified mutual fund
whose investment objective is capital appreciation. The Fund is registered under
the Investment Company Act of 1940, as amended (the 1940 Act).
As a diversified mutual fund, the Fund meets the requirement that at least cash
and cash items represent 75% of the value of its total assets, including
receivables, government securities, securities of investment companies and
"other securities". For purposes of this calculation, "other securities" are
limited in respect to any one issuer to an amount not greater in value than 5%
of the value of the total assets of the Fund and no more than 10% of the
outstanding voting securities of such issuer. The Fund shall not lose its
diversified status under the 1940 Act because of any subsequent discrepancies
between the value of its various investments and these requirements, as long as
these discrepancies occurred following the original acquisition of these
securities and are neither wholly nor partly the result of such acquisition.
INVESTMENT POLICIES AND STRATEGIES
The Fund has adopted the following investment policies and strategies.
Securities of Other Investment Companies - The Fund may invest up to 10% of the
value of its total assets in the securities of other registered investment
companies, provided that the Fund does not purchase either more than 3% of the
voting securities of any one investment company or securities of any investment
company having an aggregate value in excess of 5% of the total value of the
total assets of the Fund. The Fund must acquire these securities in the open
market, involving no commissions to a sponsor or dealer, other than customary
brokerage commissions. The Fund will not invest in an investment company that
has a contingent deferred sales charge, however; a redemption fee of up to
2/10ths of 1% would be considered acceptable.
Repurchase Agreements - Repurchase agreements are arrangements in which banks,
broker-dealers and other recognized financial institutions sell U.S. government
securities or certificates of deposits. There is an agreement at the time of
sale to repurchase the securities at a mutually agreed upon time and price
within one year from the date of acquisition. The Fund's custodian takes
possession of the repurchase agreement securities on behalf of the Fund. The
Fund will not enter into a repurchase agreement transaction with duration longer
than seven days, if the amount of such transaction plus other illiquid
securities equals more than 10% of the net assets of the Fund. Repurchase
agreements are considered loans under the 1940 Act.
The Fund will enter into repurchase agreements only with financial institutions
that management deems creditworthy, in order to help protect against potential
default from the seller. Default by the seller is a potential investment risk
inherent with these transactions. If the original seller does not repurchase the
securities from the Fund, thus defaulting on the repurchase agreement, the Fund
could possibly receive a lower repurchase price on a sale of such securities.
This default situation could occur in the event that the seller files for
bankruptcy or becomes insolvent. If a default situation occurs, the settlement
of such securities by the Fund could be delayed pending court action. The
custody rights of such repurchase agreements would remain with the Fund,
therefore; the Fund would be allowed to retain or dispose of such securities as
deemed necessary by management.
Option Contracts
The Fund may invest up to 10% of its net assets in options. An option is a
contract that gives its owner the right, but not the obligation, to buy (call)
or sell (put) a specified item at a fixed price (the exercise or strike price)
during a specified period. The buyer pays a nonrefundable fee (the premium) to
the seller (known as the writer).
A call provides a hedge against a possible increase in the price of the
underlying security. The call may be exercised at a profit if the price of the
security rises above the exercise price. A loss results if the price of the
security falls below the exercise price or if the option expires. A put provides
a hedge against a possible decline in the price of the underlying security. The
put may be sold at a profit if the price of the underlying security falls below
the exercise price. A loss results if the price of the underlying security
exceeds the exercise price or if the option expires.
Gains and losses on option transactions depend on the ability of the portfolio
manager to correctly predict the direction of stock prices, interest rates, and
other economic factors. The buyer of an option has limited risk; the maximum
risk is the premium paid.
<PAGE>
Warrants:
The Fund invests in warrants to participate in an anticipated increase in the
market value of the security. If such market value increases, the warrants may
be exercised and sold at a gain. A loss will be incurred if the market value
decreases or if the term of the warrant expires before it is exercised. Warrants
convey no rights to dividends or voting. The Fund may invest up to 5% of its net
assets in warrants; however, warrants not listed on a national exchange may not
exceed 2% of net assets. This limitation does not include warrants acquired by
the Fund by attachment to a security.
Lending of Portfolio Securities
The Fund may lend portfolio securities to unaffiliated broker-dealers, banks or
other recognized institutional borrowers, for negotiated lender fees. Securities
loaned may not exceed 30% of the Fund's total assets. The borrower must maintain
cash or equivalent collateral or provide an irrevocable letter of credit equal
to 102% of the value of the securities loaned. The borrower pays the Fund any
dividends or interest paid on loaned securities. Loans are subject to
termination at the option of the Fund or the borrower. The Fund may pay
reasonable administrative and custodial fees in connection with a loan of
portfolio securities and may pay a negotiated portion of the interest earned on
the collateral to the borrower. The Fund does not have the right to vote
securities on loan, but could terminate the loan and regain the right to vote if
it were considered important with respect to the investment.
The primary risk in securities lending is default by the borrower as the value
of a borrowed security rises, resulting in a deficiency in the collateral posted
by the borrower. The Fund seeks to minimize this risk by computing the value of
the securities loaned on a daily basis and requiring additional collateral, if
necessary.
Other than as described above, the Fund will not make loans, except to the
extent it invests in publicly distributed bonds, debentures or other debt
securities.
Short-Term Investments
A short-term investment is one held for a period of less than one year. The Fund
may invest in short-term investments in order to realize a profit or to avoid an
anticipated loss. Short-term transactions produce higher portfolio turnover
rates and may result in higher brokerage commissions than would otherwise be
incurred if the Fund engaged only in long-term transactions. There is no
guarantee that the Fund will obtain any gains from short-term investments.
ADDITIONAL RISK FACTORS
The leveraging, investing in foreign securities, short sales, lending of
portfolio securities and short-term trading are investment techniques that are
considered speculative and may entail greater than average risk to the Fund, to
the extent that they are utilized. As such, the value of the Fund's shares may
fluctuate to a greater degree than if these techniques were not utilized.
Accordingly, the Fund may not be an appropriate investment vehicle for short-
term investors.
<PAGE>
The Fund is designed for long-term investors and for those investors that have
the financial ability to undertake greater risk in exchange for potentially
greater long-term returns.
INVESTMENT RESTRICTIONS
The Fund may invest up to 25% of the value of its total assets in a particular
industry or market sector. This policy, as well as the following investment
restrictions, cannot be changed without the approval of the holders of a
majority of the Fund's shares. The term "majority" means the lesser of either
(1) 67% of the Fund's shares voted, provided that the holders of more than 50%
of the outstanding shares are present at a meeting, either in person or by
proxy; or (2) more than 50% of the Fund's outstanding shares. These restrictions
provide that the Fund shall not:
1. Purchase securities from brokers on margin.
2. Invest in commodities, commodity contracts, real estate and limited
partnership interests in real estate. However, the Fund may invest in
readily marketable securities of real estate trusts or companies and
in master limited partnership interests traded on a national
securities exchange.
3. Invest more than 5% of the value of its total assets in any one issuer
(excluding United States Government securities) or purchase more than
10% of the outstanding voting securities of any one issuer.
4. Underwrite the securities of other issuers.
5. Purchase securities of an issuer, if any affiliate (including the
Fund's officers and directors) owns more than 1/2 of 1%, individually;
or more than 5%, jointly, of the outstanding securities of such
issuer.
6. Invest 20% or more of its net assets in securities of issuers with an
operating history with less than three continuous years of operation.
7. Invest in oil, gas or mineral leases.
8. Borrow money from others, or banks.
9. Issue senior securities.
10. Lend money to anyone.
11. Invest more than 5% of the value of its total assets in any one issuer
(excluding United States Government securities) or purchase more than
10% of the outstanding voting securities of any one issuer.
MANAGEMENT RELATIONSHIPS, DIRECTORS AND COMPENSATION
The Fund's Board of Directors is responsible for the Fund's management, and as
such, has certain fiduciary duties and obligations to the Fund's shareholders.
To follow is biographical information for each Director. An asterisk marks
directors who are "interested persons" of the Fund, as defined in Section 2(a)
(19) of the1940 Act. Generally speaking, "interested persons" are persons or
their close family members who have substantial financial or professional
relationships with investment companies or their investment advisors, principal
underwriters, officers or employees.
<PAGE>
* Aristides M. Matsis, Age 59, Director, President and Treasurer
736 West End Avenue, Ste. 3A, New York, New York 10025, founded
the Fund.
Mr. Matsis is president of East End Investment Management Company, the Fund's
investment advisor, and has acted in this capacity since it's founding in 1993
Editha B. Matsis, Age 40, Director, Vice-President and Secretary manages the
office of the Manager and the fund and has acted in this capacity since 1999.
Dr. Fredrick M. Fisher, Age 63, Director of the Fund is in private practice
of dentistry. His address is 1498 Third Avenue, New York, New York.
Dr. Jeffrey F. Newcomer, Age 43, Director of the Fund is in private practice
of podiatry. His address is 74 Ashton Place, Buffalo, New York.
* Non independent director.
The Directors receive no compensation for their services but may receive ex-
penses, such expenses totalled $200 in 1999.
Code of Ethics
The Fund and its investment advisor each have adopted a Code of Ethics. This
Code permits personnel, subject to the Code, to invest in securities including
those that may be purchased or held by the Fund. However, such personal
investing must be pre-approved by the Fund's compliance officer and is subject
to certain restrictions designed to protect the interests of Fund shareholders.
PRINCIPAL STOCKHOLDERS
For the fiscal year ended June 30, 2000, officers Aristides M. Matsis owned 98%
and Editha B. Matsis 2% of the outstanding shares of the Fund.
INVESTMENT ADVISORY SERVICES
East End Investment Management Company incorporated in Maryland in December
of 1993 and having its principal office at 736 west End Avenue, Ste. 3A, New
York, New York 10025; serves solely as the Fund's investment advisor. Messrs.
Aristides M. Matsis is the sole shareholder and control person of East End
Investment Management Company.
At a Board of Directors' meeting held in June 2000, the Investment Advisory
Agreement between the Fund and East End was approved for an additional one-year
term. This agreement will continue in effect until June 30, 2001, and for
successive annual periods, provided that such continuance is specifically
approved at least annually. The agreement must be approved by: (a) those
Directors who are not interested persons of the Fund or East End, cast in
person, at a meeting called for the purpose of voting on such approval, or (b)
the vote of a majority of the Fund's outstanding voting shares. The Investment
Advisory Agreement may be terminated at any time, without penalty, upon sixty
days written notice, by the vote of a majority of the Fund's outstanding voting
shares, by the vote of a majority of the Fund's Board of Directors or by
East End. This agreement will automatically terminate in the event of its
assignment.
As investment advisor, East End determines the composition of the Fund's
portfolio, the nature and timing of the changes therein and the manner of
implementing such changes. Also provided are research and other related
services. The advisor performs such duties in accordance with directions
received from the Fund's Board of Directors. East End furnishes to the Fund, at
no extra cost, the services of East End's officers and employees, some who may
be duly elected executive officers or directors of the Fund.
Pursuant to the Investment Advisory Agreement, the Fund is obligated to pay
East End a management fee equal to 1.0% of the Fund's average daily net assets.
East End received management fees from the Fund of $3,552, for the fiscal year
ended June 30, 2000.
The Fund is responsible for effecting sales and redemptions of its shares, for
determining the net asset value thereof and for all of its other operations. The
Fund pays all administrative and other expenses attributable to its operations
and transactions, including; transfer agent fees, custodian fees, legal fees,
administrative and clerical services, auditing fees, services rendered,
printing, supplies, postage, state blue sky filings, taxes, directors fees and
expenses, and interest on bank loans.
The Manager has agreed to provide accounting, transfer agency, pricing,
administration and other services to the Fund at no cost.
11
<PAGE>
BROKERAGE ALLOCATION
Aristides M. Matsis, as portfolio manager, is responsible for placing the
portfolio brokerage business of the Fund. In all brokerage orders, the managers
seek the most favorable prices and executions. Determining what may constitute
the most favorable price and execution in a brokerage order involves a number
of factors, including the overall direct net economic result to the Fund
(involving both price paid or received and any commissions or other costs paid)
and the efficiency with which the transaction is effected. East End also
considers the ongoing brokerage and research services (as those terms are
defined in Section 28(e) of the Securities Exchange Act of 1934) provided to
the Fund. East End is authorized to pay broker-dealers a commission for
executing a particular transaction for the Fund, which may be in excess of the
amount of commission another broker-dealer would have charged; if East End
determines, in good faith, that such commission is reasonable in relation to the
value of the brokerage and research services provided by such broker-dealer,
viewed in terms of the particular transaction or of the overall benefits to the
Fund. For the fiscal years ended June 30, the Fund paid brokerage commissions in
the amount of $424, $206 and $252, these commissions were paid for securities
transactions valued at $326,362, $197,681 and $308,332 for the period ending in
2000, 1999 and 1997 respectively.
A person provides brokerage and research services insofar as they may: (1)
furnish a service, either directly or through publications or writings, as to
the value of securities, the advisability of purchasing or selling securities
and the availability of purchasers and sellers of securities; (2) furnishes
analyses and reports concerning issuers, industries, securities, economic
factors and trends, portfolio strategy and the performance of accounts; (3)
effects securities transactions and performs functions incidental thereto
(such as clearance, settlement or custody) as required by rules of the
Securities and Exchange Commission or the NASD, of which such person is a
member or is a person associated with an NASD member firm.
12
<PAGE>
DISTRIBUTION PLAN
The Fund has adopted a Distribution Plan, pursuant to Rule 12b-1 under the 1940
Act, whereby the Fund or East End Investment may finance activities that are
primarily intended to result in the sale of Fund shares, including, but not
limited to: advertising, printing and mailing of prospectuses and reports for
prospective shareholders, printing and distribution of advertising material and
sales literature and the compensation of persons primarily engaged in the sale
and marketing of the Fund's shares. According to the Plan, the Fund may incur
distribution expenses of up to .75% per annum of Fund's average net assets.
For the year ended June 30, 2000, distribution expenses incurred by the Fund
were none.
The Distribution Plan may not be amended to materially increase the amount the
Fund may spend, without shareholder approval. Any material amendments to the
Distribution Plan must be approved by the Fund's Board of Directors, including a
majority of the directors who are not interested persons, by a vote cast in
person at a meeting called for such a purpose. The Board of Directors receives a
quarterly report, documenting the amounts and purposes of payments under the
Distribution Plan. The Distribution Plan has been approved by the Board of
Directors, and will remain in effect until June 30, 2001, unless terminated
earlier by a vote of a majority of the Directors, who are not interested
persons, or by vote of a majority of the Fund's outstanding shares.
13
<PAGE>
Individual Retirement Account (IRA)
The Fund offers Traditional, Roth, Education and SEP IRAs. Investors should
consult with their tax advisers before establishing an IRA account. To determine
eligibility and deductibility of an IRA contribution, investors should read the
IRA Disclosure Statement and Custodial Agreement, which may be obtained from the
Transfer Agent by calling (877) 309-6565.
Qualified Retirement Plans
The Fund offers Section 401(k) and 403(b) plans. Please contact the Transfer
Agent at (877) 309-6565 for details on eligibility and other information.
PURCHASE AND REDEMPTION OF SHARES
A detailed explanation on how to purchase and redeem shares of the Fund, as well
as how the net asset value (NAV) of such shares is determined, is contained in
the Fund's Prospectus.
The Fund, pursuant to Rule 18f-1 of the 1940 Act, intends to redeem shares for
cash, limited to each shareholder during any 90-day period to the lesser amount
of $250,000 or 1% of the net asset value of the Fund at the beginning of such
period. In order to protect the interest of remaining shareholders, the Fund
reserves the right to redeem its shares in-kind. In-kind payments allow the Fund
to select from one or more portfolio securities, equal in value to the total
value of the Fund shares being redeemed, as payment for redemptions. The value
of portfolio securities distributed in-kind will be equal to their value used
for calculating the net asset value of the Fund.
The Fund reserves the right to change or discontinue, without prior notices, any
of the procedures available
14
<PAGE>
for redemption requests.
TAXES, DIVIDENDS AND CAPITAL GAINS
The Fund intends to qualify as a regulated investment company under Subchapter M
of the Internal Revenue Code, and as such, is not subject to federal income
taxes to the extent that it distributes substantially all of its taxable income
to its shareholders. At least 90% of gross income must be derived from
dividends, interest, securities lending income and gains from the sale of
securities. If in any taxable year, the Fund should not qualify as a regulated
investment company: (a) the Fund would be taxed at normal corporate rates on the
entire amount of its taxable income without deduction for dividends or other
distributions to its shareholders, and (b) distributions to shareholders, to the
extent made out of the Fund's current or accumulated earnings and profits, would
be taxable to them as ordinary dividends (regardless of whether they would
otherwise have been considered capital gains dividends). The Fund will utilize
any available capital loss carryovers prior to making any shareholder
distributions on profits realized on the sale of securities.
Federal tax law mandates that, if a shareholder fails to furnish and certify a
taxpayer identification number, or the Internal Revenue Service notifies the
Fund that a shareholder's taxpayer identification number is incorrect or that
withholding is otherwise required, the Fund is required to withhold, from such
shareholder, 31% of all dividend and income distributions and payments for
redemption proceeds. Once withholding is established, all withheld amounts will
be paid to the Internal Revenue Service, from whom such a shareholder should
seek any refund.
CAPITAL STOCK
The Fund has two million shares of capital stock authorized, with a par value of
$0.001 per share. Only one class of stock is issued by the Fund, and as such,
have equal dividend, liquidation and voting rights. Each share is entitled to
one vote. The capital stock is redeemable at the option of the holder. There are
no pre-emptive or other special rights outstanding or attached to any of the
Fund's shares, nor are there any restrictions on the right to freely retain or
dispose of such shares.
Maryland law does not require the holding of annual shareholders' meetings
unless otherwise required by law. However, 10% of the outstanding voting
securities of the Fund have the right to call a shareholders' meeting for
purposes of voting on the election or removal of a director. The shares have
non-cumulative voting rights, which means that the holders of more than 50% of
the shares can elect all of the Fund's Directors if they choose to do so, and in
such event, the holders of the remaining less than 50% of the shares will not be
able to elect anyone to the Board of Directors.
TRANSFER AGENT, CUSTODIAN AND ACCOUNTING AGENT
East End Investment Management Company, acts as shareholder servicing, dividend
paying, accounting, pricing, compliance and transfer agent of the Fund., at 736
West End Avenue, Ste, 3A, New York, New York 10025. Provident Bank, 309 Vine St
660D, Cincinnati, Ohio 45202, serves as custodian of the Fund's assets, inc-
luding its portfolio securities that may be entered in the Federal Reserve Book
Entry System or the security depository systems of The Depository Trust Company
The accounting and pricing agent calculates the net asset value and provides
other accounting services to the Fund. The custodian does not exercise any
supervisory functions in such matters as the purchase and sale of portfolio
securities.
AUDITOR
Sanville & Company, 1514 Old York Road, Abington, Pennsylvania 19001, is the
Fund's independent public accountant and audits the Fund's records and certifies
its financial statements.
FINANCIAL STATEMENTS
The Fund's financial statements for the fiscal year ended June 30, 2000, which
can be found in the 2000 Annual Report to shareholders, are incorporated by
reference into this Statement of Additional Information. The Annual Report also
contains the Fund's financial highlights for the past five years, which are set
forth in the current Prospectus.
PERFORMANCE COMPARISONS
The Fund's annual performance is most closely compared to that of the Russell
2000 Index. The Fund does not seek to match the returns of this index, but it is
a good indicator of small to mid cap company stock performance. You may not
invest in the Russell 2000, and unlike the Fund, it does not incur fees or
charges.
The Fund's total return or performance may also be compared to that of other
funds that are tracked by Morningstar, Inc., a widely used independent research
firm which ranks funds by overall performance, investment objectives and asset
size. Morningstar proprietary ratings reflect risk-adjusted performance. The
ratings are subject to change every month. Morningstar's ratings are calculated
using a fund's three and five-year average annual returns, sales charge
adjustments and a risk factor that reflects fund performance relative to
three-month Treasury bill returns. Lipper Analytical and Standard & Poor's
also track the Fund's NAV.
Additional performance comparisons may be made to indices of stocks comparable
to those in which the Fund invests and the Consumer Price Index (measure for
inflation) to assess the real rate of return from an investment in the Fund.
Certain government statistics, such as the Gross National Product, may be used
to illustrate the investment attributes of the Fund or the general economic and
financial environment in which the Fund operates. Finally, the effect of
tax-deferred compounding on the Fund's investment returns, may be illustrated by
graphs or charts that compare the return from an investment in the Fund on a
tax-deferred basis, assuming reinvestment of capital gains and dividends and
assuming one or more tax rates, versus the return on a taxable basis.
FUND PERFORMANCE INFORMATION
The Fund may reflect its total return in advertisements and shareholder reports.
Total investment return is a widely recognized method of measuring mutual fund
investment performance. Average annual total return is shown in terms of the
average annual compounded rate of return on a hypothetical investment in the
Fund over a period of one, five and ten years. This method of calculating total
return is based on the following assumptions: (1) all dividends and
distributions by the Fund are reinvested in shares of the Fund at net asset
value; Total return may also be expressed in terms of the cumulative value of
an investment in the Fund at the end of a defined period of time.
The Fund's average annual returns for the one, and life of fund for periods
ended June 30,2000 were 78% and 23% respectively.
PART C
OTHER INFORMATION
Item 23. Exhibits
Exhibit No.
- -----------
(1) copy of the Charter as now in effect. 1*
(2) certificate of Incorporation, By laws as amended. 2*
(3) copy of Voting Trust Agreement. None
(4) copies of instruments. Article VI defining the
rights of holders of the securities Section (e)
registered including where applicable, the
relevant portion of the Articles of Incorporation
or By Laws of the Registrant.
(5) copies of all investment advisory contracts
relating to the management of the assets of
the Registrant.
Form of Investment Management Agreement 5*
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 distribution 16*****
contract between the registrant and a princ-
pal underwriter, and specimens or copies of
all agreements between principal underwriters
and dealers.
(7) copies of all bonus, profit sharing, pension none
or other similar arrangements wholly or
partly for the benefit of directors, officers
of the Registrant in their capacity as such
plan that is not set forth in a formal doc-
ment, furnish a reasonably detailed description
thereof.
(8) copies of all custodian agreements and depository none
contracts under Section 17(f) of the 1940 Act
with respect to securities and similar investments
of the Registarnt, including the schedule of
remuneration.
Form of Custodian Agreement between East End 8***
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 preformed in whole or in part on
or after the date of filing of the Registration
Statement.
(a)Transfer Agency and Service Agreement between 9(a)***
East End Mutual Funds, Inc. and East End
Investment Management Company.
(b) Pricing of Portfolio Agreement between East 9(b)***
End Mutual Funds, Inc. and East End Investment
Management Company.
(c) Administartion Agreement for Reporting and 9(c)***
Accounting Services between East End Mutual
Funds, Inc. and East End Investment Management
Company.
(10) an opinion of counsel as to the legality of the 10****
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 the use thereof 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 Accountants 11(b)*****
(12) all financial statements omitted from item 23. none
(13) copies of any agreements or understandings none
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 offeres his 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 implemention
of such plan.
Form of Plan of Distribution to be adopted 15(a)**
by East End Mutual Funds, Inc. with respect
to the Capital Appreciation series. (b)(ii)***
Form of Agreement pursuant to Plan of 15(b)***
Distribution between East End Mutual
Funds, Inc. with respect to the Capital
Appreciation series and East End Investment
Management Company.
Form of Selling Agreement 15(b)(ii)*****
(16) Schedule for computation of each performance 16*****
quotation provided in the Registration Statement
in response to Item 22 (which need not be audited)
* These exhibits were filed with Registration Statement 6/02/94
** This exhibit was filed with the 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 Pre-Effective Amendment No.3 1/25/95
***** This exhibit was filed with Pre-Effective Amendment No.3 1/25/95
(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.
(26) Number of Holders of Securities.
(a) Title of Class
Common Capital Stock,$ .001 par value.
(b) Number of Record Holders 2
(c) Code of Ethics *****
Item 27. Indemnification
(a) General. The Articles of Incorporation (the "Articles") of the Fund provide
that to the fullest extent permitted by Maryland or federal law, no director or
officer of the Fund shall be personally liable to the Fund or its shareholders
for money damages and each director and officer shall be indemnified by the
Fund. The By-Laws of the Fund provide that the Fund shall indemnify any
individual who is a present or former director or officer of the Fund and who,
by reason of his 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. Both the Articles and the By-Laws provide, however, that
nothing therein shall be deemed to protect any director or officer against any
liability to the Fund 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 "interested persons" of
the Fund as defined in Section 2(a)(19) of the 1940 Act, nor parties to the
Proceeding; or (ii) an independent legal counsel in a written opinion.
(c) Standard of Conduct. Under Maryland law, the Fund 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, in accordance with Maryland law, has been made that
indemnification is permissible in the circumstances 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 appropriate jurisdiction may order indemnification under certain
circumstances.
(e) Advance Payment. The By-Laws provide that the Fund may pay any reasonable
expenses so incurred by any director or officer in defending a Proceeding in
advance of the final disposition thereof to the fullest extent permissible under
Maryland law. In accordance 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 Fund 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 Fund, as defined in Section 2(a)(19) of the
1940 Act, 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 1940 Act, the Fund may purchase and
maintain insurance on behalf of any officer or director of the Fund, 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 Fund would have the power to
indemnify him or her against such liability.
Item 28. Business and Other Connections of Investment Advisor
None
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 by the Fund at 736 West End
Avenue New York, Ste. 3A, New York, New York 10025. The Fund's accounting and
transfer agency records are maintained at the same place.
Item 31. Management Services
There are no management service contracts not described in Part A or Part B of
Form N-1A
Item 31. Undertakings
a) The Fund undertakes to provide a copy of its most recent Annual Report
without charge to any recipient of its currently effective prospectus who
requests the information.
b) The Fund agrees that the Directors of the Fund 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 holder 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 certifies that it meets all of the
requirements for effectiveness of this Post-Effective Amendment to its
Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933,
as amended and that it has duly caused this Post-Effective Amendment to be
signed on its behalf by the undersigned, hereunto duly authorized in the City of
New York and State of New York, on the 2nd., day of October 2000.
East End Mutual Funds, Inc.
By: /s/ Aristides M. Matsis
------------------------
Aristides M. Matsis, President
Pursuant to the requirements of the Securities Act of 1933, this Post-Effective
Amendment has been signed below by the following persons in the capacities and
on the date indicated:
Signature Title Date
--------- ----- ----
/s/ Aristides M. Matsis Director, President 9/2/2000
--------------------------- and Treasurer
ARISTIDES M. MATSIS
/s/ Editha M. Matsis Director, Vice President 9/2/2000
EDITHA B. MATSIS and Secretary
/s/ Fredrick M. Fisher Director 9/2/2000
- ---------------------------
FREDRICK M. FISHER
EXHIBIT INDEX
Exhibit 23 (11a) Consent of Sanville & Co.
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the use of our report, dated August 2, 2000, on the annual
financial statements and financial highlights of East End Mutual Funds, Inc.,
which is included in Part A and to the incorporation by reference of the annual
financial statements contained in the Fund's Annual Report for the period ending
June 30, 2000 in Part B in Post Effective Amendment No. 5 to the
Registration Statement under the Securities Act of 1933 and included 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.
August 2, 2000 Sanville & Company
Abington, Pennsylvania, PA
